Challenge for
Growth and Evolution
Ishihara Sangyo Kaisha
Annual Report 2015
Year Ended March 31, 2015

Contents
Consolidated Financial Highlights ..........................................................................1
To Our Shareholders and Friends ............................................................................2
Business Overview ............................................................................................................5
Financial Statements
Consolidated Balance Sheet................................................................................6
Consolidated Statement of Operations .......................................................8
Consolidated Statement of Comprehensive Income (Loss)............9
Forward-Looking Statements
Forward-looking statements in this report relating to operational
result forecasts are based on certain assumptions that theCompany believes are reasonable and involve risks anduncertainties. Actual results may differ significantly from these
forecasts, affected by various material factors.

Consolidated Statement of Changes in Net Assets ...........................10
Consolidated Statement of Cash Flows ....................................................11
Notes to Consolidated Financial Statements.........................................12
Report of Independent Public Accountants ..........................................38
Corporate Data .........................................................................................................39

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Consolidated Financial Highlights
For the year ended March 31, 2015
Thousands of
U.S. dollars(Note 1)Millions of yen

2015

2014

2013

2015

For the years ended March 31,
Net sales:
Domestic...........................................................................................

¥

50,803¥49,047¥48,053$422,374

Overseas...........................................................................................

52,52856,24752,388436,713

Total......................................................................................................

103,331

105,294

100,441

859,087

Inorganic chemicals...........................................................................

51,34251,751

52,824

426,854

Organic chemicals.............................................................................

49,03150,36443,282

407,640

Other businesses..............................................................................

2,958

3,179

4,335

24,593

Total......................................................................................................

103,331

105,294

100,441

859,087

Operating income.................................................................................

11,105

3,039

2,792

92,326

Net income (loss)..................................................................................

6,984(7,837)926

58,065

Depreciation and amortization of property, plant and equipment.........

5,561

6,040

5,786

46,234

Research and development costs.........................................................

9,330

8,965

8,451

77,569Current assets......................................................................................

107,470

97,998105,571

893,499

Total assets...........................................................................................

169,415

165,987

177,316

1,408,505

Current liabilities....................................................................................

56,89259,49664,713472,996

Net assets.............................................................................................

53,21546,71053,065442,426

Sales classified by business segment (Note 2):

As of March 31,

U.S. dollars(Note 1)Yen

Per share data
Net income (loss)..................................................................................

¥

17.46

(¥

19.59)

¥

2.31

$

0.15

Net assets.............................................................................................

133.08116.79132.65

1.11

Number of employees (as of March 31).................................................

1,636

1,694

1,908

—

Note 1:	The U.S. dollar amounts in this report have been translated from the yen amounts, for convenience only, at ¥120.28 =U.S.$1.00, the rate ofexchange prevailing on March 31, 2015.
Note 2:	From current accounting period, we have revised our reporting segment categories. The previous “Construction” category is now included under“Other businesses.”

Ishihara Sangyo Kaisha, Ltd.

1

To Our Shareholders and Friends
The global markets in fiscal 2014, ended March 2015, saw the USA economy transition
towards favorable growth while the decline of the EU economy continued. At the sametime, the economies of China and countries in Southeast Asia continued to experiencea slow-down in growth. In Japan, despite a decline in personal consumption due to theconsumption tax rate hike, factors such as improvements in corporate earnings and acontinuing trend towards improvement in employment and wages have led to an overall
trend towards recovery.
With respect to the market environment surrounding the ISK Group, although
domestic demand for titanium dioxide showed signs of a mild decline heading
into the end of the fiscal period, overall market conditions were favorable. On theoverseas market, while we saw an increase in supply particularly in emerging markets,
stagnant demand growth resulted in market conditions that remain unfavorable. In the
Kenichi Tanaka
President & CEOagrochemicals business, global markets saw continued growth driven by increased
demand in the emerging nations of South America but the growing popularity of generic
agrochemicals has led to increased pricing competition among companies and products.
Amid such conditions, the ISK Group worked to improve earnings by focusing ourefforts on restoring profitability for titanium dioxide and other products in our inorganic
chemicals business, placing maintaining and expanding sales for existing agrochemicals
as well as the development and promotion of new products as our highest management
priority for our organic chemicals business, while also working to improve earnings
through cost reductions.
As a result, consolidated net sales for the year under review decreased ¥2.0 billion
year-on-year, to ¥103.3 billion (US$ 859 million), operating income increased ¥8.1 billion,to ¥11.1 billion (US$ 92 million), and ordinary income increased ¥8.8 billion, to ¥11.8 billion(US$ 98 million). Extraordinary losses improved greatly due to the elimination of liquidation
losses for affiliates recorded as extraordinary losses during the previous fiscal year.
However, the Group reversed deferred tax assets due to tax code revisions and otherfactors. As a result, net income for the year was ¥7.0 billion (US$ 58 million) (net losses forthe previous year were ¥7.8 billion).
As we head toward our 100th anniversary in 2020, under the slogan of “Challenge
for 2020,” we will strive to become a strong and responsible chemical company withexcellent brand power. To achieve this goal, we established our sixth medium-term
management plan (fiscal 2015-2017) (hereinafter, MTP), our three-year plan to be initiatedfrom fiscal 2015.
The aims and ideals the Group hopes to achieve by its 100th anniversary in 2020
A strong and responsible chemical company with excellent brand power
As a “strong chemical company”• Develop business with a global competitive edge based on our unique
technologies.
• Develop high-value-added and highly profitable businesses that will ensure
continued growth and stable profits supported by innovative technologies.

2

Ishihara Sangyo Kaisha, Ltd.

As a “responsible chemical company”• Engage in environmental and social contribution activities as a good corporate
citizen, keep an open dialogue with local communities, attach importance toincreasing value for stakeholders, and be a corporation in which employees
take pride.

Policy concerning MTP initiatives
This MTP will be to focus on initiatives linked to “strengthening existing businesses” and“strengthening our growth platform”, our ultimate goal being the immediate stabilization of
earnings and the establishment of a platform for profitable growth.
In our inorganic chemicals business, reducing overseas sales of titanium dioxide, asegment that is seeing a decline in profitability, and favorable sales for functional materials
resulted in a profit during fiscal 2014. However, prices for titanium ore remain high andthus market conditions for general-purpose applications remain unfavorable. The MTP
outlines a strategy of “applying our advantages to strengthen existing business”. To thisend, our titanium dioxide business will apply our advantage of having the No. 1 share of
the domestic market combined with our industry-leading technology to focus on sales
that emphasize quality (added-value products) and establish a business structure thatis not easily influenced by market conditions and other external factors. For functional
materials, we will focus our sales force on growth markets such as electronic materials,
electro-conductive materials, cosmetic materials, and other lifestyle, environment, andenergy sector products as we look to increase the ratio of value-added products we offer.
We also will focus on initiatives aimed at “applying our existing technology toward the earlycommercialization of new materials and next-generation technology development” in orderto create new products that will serve as a powerful driving force for business growth.
The organic chemicals business is expected to see a medium to long-term increasein demand for agrochemicals due to a global increase in agricultural production. At thesame time, development costs are increasing due to stricter registration regulations
caused by growing demand for safer, eco-friendly agrochemicals. Also, the market
has seen an influx of cheap generic agrochemicals that have grabbed a major share of
the market and made cost competitiveness increasingly important. The MTP outlines
a strategy of “strengthening the profitability of existing businesses” by launching new
mixtures and other initiatives aimed maintaining and improving our product positions
in major markets such as Japan and the EU in order to maximize the value of existingproducts. At the same time, we will expand sales in Asia and other regions where ourdevelopment has fallen behind and work to achieve further reductions in manufacturingcosts in order to increase our competitiveness in emerging markets. To “strengthen andsolidify our growth platform”, we will launch new original products and implement otherstrategies to promote future profitable growth while also committing to the aggressive
injection of management resources for R&D in the life sciences field as we seek toaccelerate our expansion into the bio-pharma and medical device markets and propel thegrowth of our organic chemicals businesses.

Ishihara Sangyo Kaisha, Ltd.

3

Management targets (consolidated)
100 millions of yen

Net sales
Operating income (margin)
Ordinary income
Net income returned to parent
company
ROE (return on equity)

Millions of U.S. dollars (Note)

FY2015 FY2016 FY2017 FY2015 FY2016 FY2017
targettargettargettargettargettarget¥ 1,100 ¥ 1,150 ¥ 1,190$ 957 $ 1,000 $ 1,035
82 (7%) 94 (8%) 111 (9%) 71 (7%) 82 (8%) 97 (9%)
61
80
100
53
70
87
52

70

80

45

61

70

9%

11%

11%

9%

11%

11%

Note: The U.S. dollar amounts indicated in this table are converted based on the three-yearassumed rate of ¥115.00 = U.S.$ 1.00 for FY2015-FY2017.
The Group has formulated a “Basic Philosophy” and “Code of Conduct” to represent thefundamental and universal values shared by all its employees in the execution of theirwork activities.

Basic Philosophy• Contribute to social development, protection of life and environmental preservation• Respect shareholders, customers, suppliers, local communities and employees• Abide by laws and regulations; maintain transparency in business activities
Code of Conduct• We will strictly observe laws, regulations, social norms and Company rules, whilesteadfastly adhering to high ethical standards, so as to gain social trust in ourbusiness.
• In manufacturing activities, we will place the utmost priority on global environmental
protection, and worker safety, and will work to prevent any workplace accident or
injury.
• On the basis of respect for human rights, we will promote mutual understanding
and cooperation among employees, in order to create an open and friendly
workplace.
• To maintain transparency in our business activities, as a corporate citizen, we will
promote communication with local communities and society, and will disclose
corporate information in a timely and appropriate manner.
With all employees constantly mindful of and practicing the Basic Philosophy and Code of
Conduct, the ISK Group will strive to foster progress of society through growth as a robust
development-oriented corporation that adapts to the changing times and environment.
We look forward to your ongoing support and understanding.

Kenichi Tanaka
President & CEO
4

Ishihara Sangyo Kaisha, Ltd.

Business Overview
From current consolidated accounting period, we have revised

category is now included under “Other businesses.”

our reporting segment categories. The previous “Construction”

Inorganic Chemicals
Domestic sales of titanium dioxide were on par with theWith respect to earnings, we achieved profitability for theprevious year in terms of both volume and amounts. However,first time in three years. This was the result of factors such as

overseas sales decline greatly compared to the previous year

a scale-down in overseas sales of titanium dioxide, a segment

in terms of both volume and amounts due to shutting downthat has declined in profitability, and reduced manufacturing

production at our Singapore subsidiary and the transition tocosts, which declined thanks to a drop in titanium ore prices

an emphasis on profitable sales. As a result, overall net sales

that, although still high, have fallen compared to when market

declined ¥3.2 billion, to ¥39.3 billion (US$ 327 million).

prices were abnormally high.

Among functional materials, sales of materials for DeNOx

As a result, segment net sales decreased ¥0.4 billion, tocatalysts declined due to intensifying price competition overseas¥51.3 billion (US$ 427 million) and operating income improved

but sales of materials for electronic components and electro-

greatly to ¥5.9 billion (US$ 49 million) (losses for the previous

conductive materials were strong. This segment also wasyear were ¥1.1 billion).

propelled by new products during the fiscal year. As a result, net
sales were ¥12.0 billion (US$ 100 million) (a ¥2.8 billion increaseyear-on-year).

Organic Chemicals
Domestic sales of agrochemicals were impacted during

Net sales of medical products declined compared to thethe first half by the adverse decline in demand following theprevious fiscal year. This was the result of a decline in orders

consumption tax rate hike. However, during the second half,

due to sales from contracted pharmaceutical ingredients

our sales efforts, including the launch of a new powdery

carrying over from the previous fiscal year.

mildew fungicide, helped us maintain net sales that were on
par with the previous fiscal year.
Overseas sales of fungicides increased following a

Income declined due to lower sales volume and increases
in R&D expenses resulting from the start of full-scale trials of
medical-use HVJ-E. However, the improvement in unrealized

summer of moist weather in Europe and sales in Asia andgains resulting from internal transactions with overseas

Oceana increased due in part to the launch of a new pesticide

subsidiaries exceeded those losses.

in Australia. However, dry climate and intensifying competition

As a result, segment sales decreased ¥1.3 billion, toresulted in a decline in sales of fungicides to South America¥49.0 billion (US$ 408 million) and operating income increased

and we were impacted by revisions to sales structure changes¥1.2 billion, to ¥6.7 billion (US$ 56 million).

that resulting in a decline in herbicides to the European
market. As a result, overall net sales declined compared to theprevious fiscal year.

Other businesses
In the year under review, the Group’s other businesses posted

year-on-year) and operating income of ¥0.2 billion

sales of ¥3.0 billion (US$ 25 million) (a ¥0.2 billion decrease(US$ 1 million) (a ¥0.1 billion decrease year-on-year).

Ishihara Sangyo Kaisha, Ltd.

5

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheet
As of March 31, 2015
Thousands of
U.S. dollars(Note 1)Millions of yen

2015
AssetsCurrent assets:
Cash and deposits (Notes 4, 9 and 17)......................................................................
Trade receivables (Note 17):
Notes ....................................................................................................................
Accounts...............................................................................................................

¥

21,472

2014¥

17,851

2015$

178,517

Less allowance for doubtful receivables....................................................................
Trade receivables, net............................................................................................

2,640
26,41929,059(188)
28,871

2,599
23,27225,871(181)
25,69021,949219,646
241,595(1,563)240,032

Inventories (Note 6)....................................................................................................
Deferred income taxes (Note 13)...............................................................................
Other current assets..................................................................................................
Total current assets................................................................................................

53,3772,264
1,485
107,469

51,091
1,676
1,690
97,998443,773
18,823
12,346
893,491

Less accumulated depreciation.................................................................................
Property, plant and equipment, net (Note 24)........................................................

5,768
49,385
113,623
3,498
1,127
173,401(128,876)
44,525

6,332
53,525
138,5073,818
2,065
204,247(157,087)
47,16047,955
410,584
944,654
29,082
9,369
1,441,644(1,071,466)
370,178

Investments and other assets:
Investments in securities (Notes 5, 9 and 17):
Unconsolidated subsidiaries and affiliates.............................................................
Other.....................................................................................................................
Total investments in securities..............................................................................

3,674
1,822
5,496

3,285
2,111
5,396

30,545
15,14845,693

Deferred income taxes (Note 13)...............................................................................
Asset for retirement benefits (Note 11).......................................................................
Other.........................................................................................................................
Total investments and other assets.......................................................................

8,786
14
3,125
17,421

12,70892,716
20,82973,046116
25,981
144,836

165,987$ 1,408,505

Property, plant and equipment:
Land (Notes 7 and 9).................................................................................................
Buildings and structures (Notes 7, 8 and 9)...............................................................
Machinery and equipment (Notes 8 and 9)................................................................
Leased assets (Note 8)..............................................................................................
Construction in progress...........................................................................................

Total assets (Note 24)....................................................................................................
See notes to consolidated financial statements.

6

Ishihara Sangyo Kaisha, Ltd.

¥

169,415¥

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Thousands of
U.S. dollars(Note 1)Millions of yen

2015
Liabilities and net assets
Current liabilities:
Short-term bank loans (Notes 9 and 17)....................................................................
Current portion of long-term bank loans (Notes 9 and 17).........................................
Current portion of bonds (Notes 9 and 17)................................................................
Trade payables (Note 17):
Notes ....................................................................................................................
Accounts...............................................................................................................

¥

Lease obligations (Notes 9 and 17)............................................................................
Accrued income taxes (Note 13)................................................................................
Accrued expenses.....................................................................................................
Accrued bonuses for employees...............................................................................
Reserve for sales returns...........................................................................................
Provision for loss on construction contracts..............................................................
Reserve for Ferosilt removal......................................................................................
Reserve for implementation of environmental and safety arrangements....................
Provision for maintenance.........................................................................................
Provision for loss on liquidation of a subsidiary.........................................................
Other current liabilities...............................................................................................
Total current liabilities.......................................................................................
Long-term liabilities:
Long-term bank loans (Notes 9 and 17).....................................................................
Bonds (Notes 9 and 17).............................................................................................
Lease obligations (Notes 9 and 17)............................................................................
Liability for retirement benefits (Note 11)....................................................................
Deferred income taxes (Note 13)...............................................................................
Long-term deposits received.....................................................................................
Reserve for Ferosilt removal......................................................................................
Reserve for implementation of environmental and safety arrangements....................
Provision for maintenance.........................................................................................
Asset retirement obligations (Note 10).......................................................................
Other long-term liabilities...........................................................................................
Total long-term liabilities...................................................................................

15,40016,072
280

2014

¥

16,52015,269
280

2015

$

128,035
133,622
2,328

1,369
11,04012,409
549
628
4,346
670
33
—
2,459
25
—
324
3,697
56,892

1,061
12,164
13,225
638
463
3,944
483
34
4
2,061
35
142
2,241
4,157
59,496

11,382
91,786103,168
4,564
5,221
36,1325,570
274—
20,444208—
2,694
30,736472,996

42,447840
897
12,085
36
880
—
807
83
840
393
59,30840,622
1,120
1,092
10,811
13
730
3,526
544
42
841
440
59,781

352,902
6,984
7,458
100,474
299
7,316
—
6,709
690
6,984
3,267
493,083

43,421
10,627600

43,421
10,627(5,673)360,999
88,352
4,989(698)
53,950(692)
47,683(5,803)
448,537

513
0
(850)
(398)
(735)
53,215
169,415

318
(26)
(404)
(861)
(973)
46,710165,9874,265
0(7,067)(3,309)(6,111)
442,426$ 1,408,505

Contingent liabilities (Note 12)
Net assets:
Shareholders’ equity (Note 14):
Common stock:
Authorized: 1,000,000 thousand shares
Issued:403,839 thousand shares in 2015 and 2014................................
Capital surplus.......................................................................................................
Retained earnings..................................................................................................
Less treasury stock, at cost:
3,973 thousand shares in 2015 and 3,909 thousand shares in 2014..................
Total shareholders’ equity................................................................................
Accumulated other comprehensive income (loss):
Net unrealized holding gain on securities...............................................................
Unrealized deferred gain (loss) on hedges.............................................................
Translation adjustments.........................................................................................
Retirement benefits liability adjustments................................................................
Total accumulated other comprehensive loss..................................................
Total net assets................................................................................................
Total liabilities and net assets........................................................................................

¥¥

See notes to consolidated financial statements.
Ishihara Sangyo Kaisha, Ltd.

7

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Operations
For the year ended March 31, 2015

Thousands of
U.S. dollars(Note 1)Millions of yen

Net sales (Note 24)........................................................................................................

¥

2015
103,331¥2014
105,294$2015
859,087

Cost of sales (Notes 6 and 15)......................................................................................

68,856

79,567572,464

Gross profit...................................................................................................................

34,47525,727

286,623

Selling, general and administrative expenses (Note 15).................................................

23,37022,688194,297

Operating income (Note 24)..........................................................................................

11,105

3,039

92,326

194

151

1,613

Other income:Interest and dividend income....................................................................................
Equity in earnings of affiliates.....................................................................................

385

428

3,201

Foreign exchange gain, net.......................................................................................

1,691

1,836

14,059

Reversal of provision for liquidation of a subsidiary...................................................

759

—

6,310

Other.........................................................................................................................

328

276

2,727

3,357

2,691

27,910Interest expense........................................................................................................

1,563

1,747

12,995Retirement benefit expense.......................................................................................

356

356

2,960

Other.........................................................................................................................

779

661

6,476

2,698

2,764

22,431

11,764

2,966

97,805

312

—

2,594

Gain on sales of non-current assets..........................................................................

—

22

—

Other.........................................................................................................................

34

—

283

346

22

2,877

Loss on disposal of fixed assets................................................................................

285

286

2,369

Reserve for implementation of environmental and safety arrangements....................

251

—

2,087

Other expenses:

Ordinary income...........................................................................................................
Extraordinary gains:
Gain from redemption upon liquidation of a subsidiary..............................................

Extraordinary losses:

Loss on liquidation of a subsidiary (Notes 6, 8 and 19)..............................................

—

12,777—

Loss on impairment of fixed assets (Notes 8 and 24).................................................

86

—

715

Other.........................................................................................................................

40

115

333

662

13,178

5,504

Income (loss) before income taxes................................................................................

11,448(10,190)

95,178

Income taxes (Note 13):
Current......................................................................................................................

860

696

7,150

Deferred....................................................................................................................

3,604(3,049)29,963

Net income (loss) (Note 22)...........................................................................................
See notes to consolidated financial statements.

8

Ishihara Sangyo Kaisha, Ltd.

¥

6,984

¥

(7,837)$58,065Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Comprehensive Income (Loss)
For the year ended March 31, 2015

Thousands of
U.S. dollars(Note 1)Millions of yen

Net income (loss)..........................................................................................................

¥

2015
6,984

2014
(7,837)¥$

2015
58,065

Other comprehensive income (Note 20):
Net unrealized holding gain on securities..................................................................

195

73

1,621

Unrealized deferred gain on hedges..........................................................................

26

38

216

Translation adjustments.............................................................................................

(518)

2,000

(4,307)

Adjustment for projected benefit obligation of an overseas subsidiary......................

–

(29)

–

Retirement benefits liability adjustments....................................................................

463

138

3,849

Other comprehensive income of affiliates accounted for by
the equity method attributable to the Company......................................................

72

271

599

Total other comprehensive income............................................................................

238

2,491

1,978

Comprehensive income (loss).......................................................................................

¥

7,222

¥

(5,346)$

Thousands of
U.S. dollars(Note 1)Millions of yen

2015

60,0432014

2015

Comprehensive income (loss) attributable to:Shareholders of Ishihara Sangyo Kaisha, Ltd............................................................

¥

7,222

¥

(5,346)$60,043

¥

7,222

¥

(5,346)$60,043

See notes to consolidated financial statements.

Ishihara Sangyo Kaisha, Ltd.

9

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Changes in Net Assets
Year ended March 31, 2015
Millions of yen
Shareholders’ equity

Number ofshares ofcommon stockin issueBalance at April 1, 2013....................

Commonstock

Capitalsurplus

Accumulated other comprehensive income (loss)

Retainedearnings

Treasurystock,
at cost29 ¥– ¥ 53,065

–

–

–

(7,837)

–

–

–

–

–

–

(7,837)

Acquisition of treasury stock............

–

–

–

–

(11)

–

–

–

–

–

(11)

Disposition of treasury stock............

–

–

1

–

0

–

–

–

–

–

1

Other changes..................................

–

–

–

–

–

73

38

2,271

(29)

(861)

1,492

318 ¥

(26) ¥(404) ¥

403,839,431 ¥ 43,421 ¥ 10,627 ¥ (5,673) ¥ (692)

¥

¥

245 ¥

(64) ¥ (2,675) ¥Total net
assetsNet loss............................................

Balance at April 1, 2014....................

403,839,431 ¥ 43,421 ¥ 10,626 ¥ 2,164 ¥ (681)

Adjustment
for projected
Net
Unrealized
benefit
Retirement
unrealized
deferredobligation of
benefits
holding gain gain (loss) Translation an overseas
liability
on securities on hedges adjustments subsidiary adjustments– ¥(861) ¥ 46,710

Cumulative effects of changes inaccounting policies (Note 3)..........

–

–

–

(711)

–

–

–

–

–

–

(711)

Restated balance at April, 1, 2014....

–43,421

10,627(6,384)

(692)

318

(26)

(404)

–

(861)

45,999Net income.......................................

–

–

–

6,984

–

–

–

–

–

–

6,984

Acquisition of treasury stock............

–

–

–

–

(6)

–

–

–

–

–

(6)

Disposition of treasury stock............

–

–

0

–

0

–

–

–

–

–

0

Other changes..................................

–

–

–

–

–

195

26

(446)

–

463

238

513 ¥

0 ¥

(850) ¥– ¥(398) ¥ 53,215

Balance at March 31, 2015.............

403,839,431 ¥ 43,421 ¥ 10,627 ¥600 ¥ (698)¥Thousands of U.S. dollars (Note 1)
Shareholders’ equity

Commonstock

Balance at April 1, 2014....................

Capitalsurplus

Accumulated other comprehensive income (loss)

Retainedearnings

Treasurystock,
at cost$360,999 $ 88,352 $ (47,165) $ (5,753)

Adjustment
for projected
Net
Unrealized
benefit
Retirement
unrealized
deferredobligation of
benefits
holding gain gain (loss) Translation an overseas
liability
on securities on hedges adjustments subsidiary adjustments$ 2,644 $(216) $ (3,359) $– $Total net
assets(7,158) $388,344

Cumulative effects of changes inaccounting policies (Note 3)..........

––(5,911)

–

–

–

–

–

Restated balance at April, 1, 2014....

360,999

88,352(53,076)(5,753)

2,644

(216)

(3,359)–Net income.......................................

––

58,065

–

–

–

–

–

–

58,065Acquisition of treasury stock............

–

–

–

(50)

–

–

–

–

–

(50)

Disposition of treasury stock............

–

0

–

0

–

–

–

–

–

0

Other changes..................................

–

–

–

–

1,621

216

(3,708)

–

3,849

1,978

– $

(3,309) $442,426

Balance at March 31, 2015.............
See notes to consolidated financial statements.

10

Ishihara Sangyo Kaisha, Ltd.

$360,999 $ 88,352 $ 4,989 $ (5,803)$ 4,265 $0 $ (7,067) $–(5,911)(7,158) 382,433

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Consolidated Statement of Cash Flows
For the year ended March 31, 2015
Thousands of
U.S. dollars(Note 1)Millions of yen

2015
Cash flows from operating activities
Income (loss) before income taxes................................................................................
Adjustments to reconcile income before income taxes and minority interests to net
cash provided by operating activities:
Depreciation and amortization...................................................................................
Loss on disposal or sales of fixed assets, net............................................................
Loss on impairment of fixed assets...........................................................................
(Decrease) increase in provision for loss on liquidation of a subsidiary......................
Foreign exchange gain, net.......................................................................................
Decrease in provisions for accrued retirement benefits for employees......................
Increase in liabilities for retirement benefits, net.........................................................
Reversal of reserve for Ferosilt removal ....................................................................
Increase (decrease) in reserve for implementation of environmental
and safety arrangements..........................................................................................
Interest and dividend income....................................................................................
Interest expense........................................................................................................
Equity in earnings of affiliates, net..............................................................................
Other.............................................................................................................................
Changes in operating assets and liabilities:
Trade receivables...................................................................................................
Inventories.............................................................................................................
Other current assets..............................................................................................
Trade payables......................................................................................................
Accrued expenses and other current liabilities.......................................................
Subtotal..............................................................................................................
Interest and dividends received....................................................................................
Interest paid..................................................................................................................
Insurance claim received...............................................................................................
Income taxes paid.........................................................................................................
Net cash provided by operating activities..............................................................
Cash flows from investing activities
Increase in time deposits...........................................................................................
Decrease in time deposits.........................................................................................
Purchases of property, plant and equipment.............................................................
Proceeds from sales of property, plant and equipment.............................................
Increase in long-term loans receivable......................................................................
Collection of long-term loans receivables..................................................................
Proceeds from liquidation of a subsidiary..................................................................
Other.........................................................................................................................
Net cash used in investing activities.......................................................................
Cash flows from financing activities
Proceeds from issuance of bonds.............................................................................
Redemption of bonds................................................................................................
Decrease in short-term bank loans, net.....................................................................
Proceeds from long-term bank loans........................................................................
Repayment of long-term bank loans..........................................................................
Repayment of lease obligations.................................................................................
Proceeds from deposits received..............................................................................
Repayment of deposits received...............................................................................
Purchases of treasury stock......................................................................................
Net cash provided by (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 (Note 4).......................................................
See notes to consolidated financial statements.

¥¥

11,4482014¥(10,190)2015$

95,178

5,561
150
86
(1,990)(1,151)–912(2,310)
255

6,040
97
5,808
2,241
(18)
(8,687)9,950(2,274)(25)

46,234
1,247
715(16,545)(9,569)–7,582(19,205)
2,120

(194)
1,563
(294)
(292)

(151)
1,747
(343)
142

(1,613)
12,995(2,444)(2,428)(2,823)(1,623)277(1,339)
217
8,453
148
(1,623)
95
(722)
6,351

875
10,967240(1,099)(1,306)
14,014160(1,709)26(424)
12,067(23,470)(13,494)2,303(11,132)
1,804
70,2781,230(13,493)790(6,003)52,802–490(4,646)
72
(208)
190
471
416
(3,215)(350)–(4,278)
370
(250)
154
–
228
(4,126)–
4,074(38,628)599(1,729)
1,580
3,916
3,459
(26,729)–(280)(1,120)18,263(15,635)
(663)
2,286
(2,073)
(6)
772
188
4,096
17,186
21,282

1,400(1,600)(8,115)
17,073(15,344)(1,286)
1,953(2,526)(10)(8,455)703
189
16,997
17,186–(2,328)(9,312)
151,837(129,988)(5,512)
19,006(17,235)
(50)
6,418
1,563
34,054
142,883
176,937¥$

Ishihara Sangyo Kaisha, Ltd.

11

Ishihara Sangyo Kaisha, Ltd. and Consolidated Subsidiaries

Notes to Consolidated Financial Statements
Year ended March 31, 2015

1. Basis of Preparation of Consolidated Financial Statements
The accompanying consolidated financial statements of Ishihara

in Japan in order to present them in a format which is more

Sangyo Kaisha, Ltd. (the “Company”) and its consolidated

familiar to readers outside Japan. In addition, the notes to thesubsidiaries have been prepared on the basis of accounting

consolidated financial statements include information which is notprinciples generally accepted in Japan, which are different inrequired under accounting principles generally accepted in Japan

certain respects as to the application and disclosure requirements

but is presented herein as additional information.

of International Financial Reporting Standards, and are compiled

The translation of yen amounts into U.S. dollar amounts

from the consolidated financial statements prepared by theis included solely for convenience, as a matter of arithmetic

Company as required by the Financial Instruments and Exchange

computation only, at ¥120.28 = U.S.$1.00, the approximate rate of

Act of Japan.

exchange in effect on March 31, 2015. This translation should not

In preparing the accompanying consolidated financial

be construed as a representation that yen have been, could havestatements, certain reclassifications and rearrangements havebeen, or could in the future be, converted into U.S. dollars at the

been made to the consolidated financial statements issued

above or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation and accounting for investments inunconsolidated subsidiaries and affiliates

contracted rates.
Revenue and expense items arising from transactions

The accompanying consolidated financial statements include

denominated in foreign currencies are generally translated into yen

the accounts of the Company and its 13 significant consolidated

at the exchange rates in effect at the respective transaction dates.

subsidiaries, consisting of ISK Bioscience K.K., ISK SINGAPORE

Foreign exchange gain or loss is credited or charged to income

PTE. LTD., the ISK AMERICAS INCORPORATED Group (5in the year in which such gain or loss is recognized for financial

subsidiaries), ISK BIOSCIENCES EUROPE S.A., ISK Taiwan Co.,

reporting purposes.

Ltd., Fuji Titanium Industry Co., Ltd., Ishihara Techno Corporation,
Yokkaichi Energy Service Co., Ltd. and ISK Engineering Partners

Financial statements of overseas consolidated subsidiaries

Corporation.

The balance sheet accounts of the overseas consolidated

The Company’s remaining subsidiaries, including ISK

subsidiaries are translated into yen at the rates of exchange in

BIOSCIENCES KOREA LTD., have not been consolidated because

effect at the balance sheet date, except that the components ofthey are not significant in terms of total assets, retained earnings,

net assets are translated at their historical rates. Revenue andnet sales and net income.

expense accounts are translated at the average rates of exchange

The investment in significant affiliates is stated at its

in effect during the year. Differences resulting from translating

underlying net equity after the elimination of intercompany income.

financial statements denominated in foreign currencies have not

Investments in unconsolidated subsidiaries and the remaining

been included in the determination of net income (loss) but are

affiliate companies are stated at cost.
The overseas consolidated subsidiaries are consolidated onreported as translation adjustments which are components ofaccumulated other comprehensive income (loss).

the basis of fiscal periods ending December 31, which differs fromthe balance sheet date of the Company. As a result, adjustments(c) Cash and cash equivalents

have been made for any significant intercompany transactions

For the purposes of the consolidated statement of cash flows,which took place during the period between the year ends ofcash and cash equivalents consist of cash on hand, cash in banksthese overseas consolidated subsidiaries and the year end of thewhich can be withdrawn at any time and short-term investments

Company.

with a maturity of three months or less when purchased which
can easily be converted to cash and are subject to little risk of(b) Foreign currency translation

change in value.

Foreign currency transactions
All monetary assets and liabilities denominated in foreign(d) Inventories

currencies are translated into yen amounts at the rates ofInventories of the Company and its domestic consolidated

exchange in effect at the balance sheet date, except thatsubsidiaries are principally stated at lower of cost or net sellingreceivables and payables hedged by qualified forward foreignvalue, cost being determined by the gross average method.

exchange contracts are translated at their corresponding
12

Ishihara Sangyo Kaisha, Ltd.

(e) Securities
Securities are classified into three categories: trading securities,(g) Property, plant and equipment and depreciation (except forleased assets)held-to-maturity debt securities and other securities. Trading

Property, plant and equipment are stated at cost. Depreciation

securities, consisting of debt and marketable equity securities, areof property, plant and equipment is recognized primarily bycarried at fair value. Gain and loss, both realized and unrealized,

the straight-line method over the estimated useful lives ofare credited or charged to income. Held-to-maturity debt

the respective assets. The useful lives of property, plant andsecurities are carried at amortized cost. Marketable securities

equipment are principally as follows:classified as other securities are carried at fair value, with any

Buildings and structures...........................3 to 55 years

changes in unrealized holding gain or loss, net of the applicable

Machinery and equipment........................2 to 20 years

income taxes, reported as a separate component of accumulated

Costs for maintenance, repairs and minor renewals areother comprehensive income (loss). Non-marketable securities

charged to income as incurred. Major renewals and betterments

classified as other securities are carried at cost. Cost of securities

are capitalized.

sold is determined by the moving average method.
Investments in investment business limited liability(h) Intangible assets (except for leased assets)

partnerships and other similar partnerships, which are deemed to

Intangible assets are amortized by the straight-line method overbe securities under Article 2, Clause 2 of the Financial Instruments

the useful lives of the respective assets. Expenditures relatingand Exchange Law of Japan, are valued at the amount of theto computer software developed for internal use are charged tounderlying equity in their net assets based on the latest financial

income as incurred, except if these are deemed to contributestatements available as of the closing date stipulated in theto the generation of future income or cost savings. Suchpartnership agreement.

expenditures are capitalized as assets and amortized by thestraight-line method over their estimated useful lives of 5 years.

(f) Derivatives and hedging activities
Derivative financial instruments are utilized by the Company(i) Research and development costs

and its domestic consolidated subsidiaries principally in order

Research and development costs are charged to income as

to manage risk arising from adverse fluctuation in foreign

incurred.

exchange rates and interest rates. The Company and its domestic
consolidated subsidiaries have established a control environment(j) Leased assets

which includes policies and procedures for risk assessment,

Leased assets under finance leases that transfer ownership ofincluding an assessment of the effectiveness of their hedging

the assets are depreciated by using the economic useful lives ofactivities, and for the approval, reporting and monitoring ofleased assets.

transactions involving derivatives.

Leased assets under finance lease contracts that do not

Derivatives are carried at fair value with any changes intransfer ownership to the lessee are depreciated to a residual

unrealized gain or loss credited or charged to income, except

value of zero by the straight-line method using the term of thefor those which meet the criteria for deferral hedge accounting

contract as the useful life.

under which unrealized gain or loss is deferred and reported as acomponent of accumulated other comprehensive income (loss).

(k) Allowance for doubtful receivables

Receivables and payables hedged by forward foreign exchange

The Company and its domestic consolidated subsidiaries havecontracts which meet certain conditions are translated at theirprovided an allowance for doubtful receivables based on theircontracted rates (the “allocation method”). Interest-rate swaps

historical experience of bad debts on ordinary receivables plus anwhich meet certain conditions are accounted for as if the interest

additional estimate of probable specific doubtful accounts fromrates which apply to the swaps had originally applied to thecustomers experiencing financial difficulties.

underlying debt (the “special method”).
The effectiveness of hedges is assessed based oncomparison of the cumulative changes in markets or cash flows of

The allowance for doubtful receivables of the overseas
consolidated subsidiaries has been provided at the estimatedaggregate amount of their probable bad debts.

the hedged items and those of the hedging instruments. However,
the assessment of interest rate swaps which the special method is(l) Accrued bonuses for employees

applied is omitted.

Accrued employees’ bonuses are accounted for at an estimatedamount of the bonuses to be paid as allocated to the current fiscal
year.

Ishihara Sangyo Kaisha, Ltd.

13

(m) Reserve for sales returns(Additional information)

Reserve for sales returns is provided for estimated losses incurring

The board of Directors of the Company approved a plan todue to the return of finished goods and merchandise sold duringterminate the operations of ISK SINGAPORE PTE. LTD., athe fiscal year subsequent to the balance sheet date, using theconsolidated subsidiary of the Company, and procedures were

historical rate of such returns in prior years.

commenced for its liquidation in August 2013.

(n) Reserve for Ferosilt removal(r) Retirement benefits

The Company has provided a reserve for estimated expenditures

Liability for retirement benefits is provided at an amount calculated

for Ferosilt removal and disposal based on local costs for thebased on the retirement benefit obligation and the fair value of theremoval, transportation and disposal of Ferosilt with reference topension plan assets as of the balance sheet date.

each construction region and disposal location.

The retirement benefit obligation for employees is attributed
to each period by the straight-line method over the estimated(Additional information)
Removal of Ferosilt was completed at all construction regions anddisposal locations in March 2015.

years of service of the eligible employees.
Actuarial gain or loss is amortized in the year following theyear in which such gain or loss is recognized, principally by thestraight-line method, over the estimated average remaining years(o) Reserve for implementation of environmental and safety
arrangementsof service of the employees participating in the plans.
Prior service cost is amortized by the straight-line method

The Company has provided the reserve for estimatedover the estimated average remaining years of service of theexpenditures to promote environmental and safety arrangements.

employees participating in the plans.

(p) Provision for maintenanceamortized by the straight-line method over a period of 15 years.

The net retirement benefit obligation at transition is being
Provision for maintenance is provided in an amount estimatedto be necessary for the maintenance for certain machinery and(s) Income taxes

equipment

Income taxes are calculated based on taxable income andcharged to income on an accrual basis. Certain temporary(q) Provision for loss on liquidation of a subsidiarydifferences exist between taxable income and income reported for

Provision for loss on liquidation of a subsidiary is provided based

financial statement purposes which enter into the determination

on an estimate of expenditures necessary to complete theof taxable income in a different period. The Company andprocess of liquidating of a subsidiary.

its consolidated subsidiaries recognize the tax effect of such
temporary differences in their consolidated financial statements.

3. Changes in Accounting Policies
The Company and its domestic subsidiaries adopted thecalculating the retirement benefit obligation and service cost weremain clause of Paragraph 35 of “Accounting Standard forrecognized by adjusting retained earnings at April 1, 2014, in

Retirement Benefits” (Accounting Standards Board of Japanaccordance with the transitional treatment provided in Paragraph(“ASBJ”) Statement No.26 of May 17, 2012) and the main

37 of Accounting Standard for Retirement Benefits.

clause of Paragraph 67 of “Guidance on Accounting Standard

As a result, the liability for retirement benefits increased by

for Retirement Benefits” (ASBJ Guidance No.25 of March 26,¥1,095 million ($9,104 thousand) and retained earnings decreased2015) effective from April 1, 2014. As a result, the methods forby ¥711 million ($5,911 thousand) at April 1, 2014, and thecalculating the retirement benefit obligation and service cost have

impacts on consolidated operating income, ordinary income andbeen revised in the following respect: the method for determining

income before income taxes for the year ended March 31, 2015

the discount rate has been changed to the use of a single

were immaterial. Also, net assets per share at March 31, 2015

weighted-average discount rate reflecting the expected timing anddecreased by ¥1.77 ($0.01) and the impact on basic net income

amount of benefit payments.

per share was immaterial.

The cumulative effects of changing the methods for

14

Ishihara Sangyo Kaisha, Ltd.

4. Cash and Deposits
The reconciliation between cash and cash equivalents in the accompanying consolidated statements of cash flows and cash anddeposits in the accompanying consolidated balance sheets as of March 31, 2015 and 2014 is presented as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and deposits........................................................................................................

2015
21,472¥Time deposits with maturities in excess of three months..............................................

2014
17,851¥¥

21,282$

176,937

(665)

(190)

Cash and cash equivalents...........................................................................................

$

2015
178,517¥(1,580)17,186

5. Investments in Securities
Marketable securities classified as held-to-maturity debt securities and other securities at March 31, 2015 and 2014 were as follows:(a) Held-to-maturity debt securities
Millions of yen

2015
Carrying value

2014

Estimated fair Unrealized gain
value
(loss)
Carrying value

Estimated fair Unrealized gain
value
(loss)

Securities whose estimated fair value exceeds
their carrying value..................................................

¥

10

¥

10

¥

0

¥

–

¥

–

¥

–

Total...........................................................................

¥

10

¥

10

¥

0

¥

–

¥

–

¥

–

Securities whose carrying value exceeds
their estimated fair value..........................................

¥

–

¥

–

¥

–

¥

10

¥

10

¥

(0)

Total...........................................................................

¥

–

¥

–

¥

–

¥

10

¥

10

¥

(0)

Thousands of U.S. dollars

2015
Carrying value

Estimated fair Unrealized gain
value
(loss)

Securities whose estimated fair value exceeds
their carrying value..................................................

$

83

$

83

$

0

Total...........................................................................

$

83

$

83

$

0

(b) Other securities
Millions of yen

2015
Carrying value

Acquisition
cost

2014
Unrealized gain
(loss)
Carrying value

Acquisition
cost

Unrealized gain
(loss)

Securities whose carrying value exceeds theiracquisition cost: Equity securities............................

¥ 1,371¥703

668¥ 1,099

Subtotal..............................................................

1,371

703

668

1,099

626

473

Securities whose acquisition cost exceeds theircarrying value: Equity securities...............................

36

40

(4)

78

91

(13)

Subtotal..............................................................

36

Total...........................................................................

¥ 1,407

¥

40
¥

743

¥

(4)

78

664

¥ 1,177

¥

626

¥

91
¥

717

473

(13)
¥

460

Ishihara Sangyo Kaisha, Ltd.

15

Thousands of U.S. dollars

2015
Carrying value

Acquisition
cost

Unrealized gain
(loss)

Securities whose carrying value exceeds theiracquisition cost: Equity securities............................

$ 11,398$ 5,845$ 5,553

Subtotal..............................................................

11,398

5,845

5,553

Securities whose acquisition cost exceeds theircarrying value: Equity securities...............................

299

332

(33)

Subtotal..............................................................

299

332

(33)

Total...........................................................................

$ 11,697$ 6,177$ 5,520

Proceeds from sales of other securities and the aggregate gain and loss for the years ended March 31, 2015 and 2014 are summarized
as follows:
Thousands of
U.S. dollars

Millions of yen

Proceeds from sales.....................................................................................................

¥

2015
3

¥

2014
219

$

2015
25

Aggregate gain..............................................................................................................

3

48

25

Aggregate loss..............................................................................................................

–

(19)

–

The redemption schedule subsequent to March 31, 2015 for held-to-maturity debt securities classified as other securities is described in
Note 17.

6. Inventories
Inventories at March 31, 2015 and 2014 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Finished goods and merchandise.................................................................................

¥

2015
31,870¥2014
30,798$2015
264,965

Work in process............................................................................................................

4,149

4,047

34,495

Raw materials and supplies..........................................................................................

17,35816,246

144,313

Total..............................................................................................................................
Net loss on devaluation of inventories included in cost of sales
for the years ended March 31, 2015 and 2014 amounted to ¥16¥

53,377¥51,091$

443,773

amounted to ¥2,754 million for the year ended March 31, 2014.
The Company records inventories on construction contracts

million ($133 thousand) and ¥100 million, respectively. In addition,and provisions for loss on construction contracts on a gross

net loss on devaluation of inventories included in extraordinary

basis. Inventories for which a provision for loss was recognized onloss, as a component of loss on liquidation of a subsidiary,construction contracts were ¥3 million as of March 31, 2014.

7. Acquisition Costs of Land and Buildings
The accumulated amount deducted from the acquisition costs of land and buildings, resulting from the exchange of rights on an urban
area redevelopment project totaled ¥923 million ($7,674 thousand) at March 31, 2015 and 2014, respectively.

16

Ishihara Sangyo Kaisha, Ltd.

8. Loss on Impairment of Fixed Assets
For the year ended March 31, 2015, the Company recorded a loss on impairment of fixed assets. The main components of loss on
impairment of fixed assets are as follows:
Thousands of
U.S. dollars

Millions of yen

Location
Yokkaichi Plant(Yokkaichi City, Mie Prefecture)

Major use
Production equipment

Classification
Buildings and structures

2015
35

¥

Machinery and equipment

2015
291

$

51

Total

¥

86

424
$

715

The Company and its consolidated subsidiaries group theirin the above table, such as equipment for liquid ammonia andassets based on the business segment and production process

fuel oil, is not anticipated to be utilized in the future, the Company

for assessment of loss on impairment. Idle assets which are notrecognized the production equipment as idle assets andanticipated to be utilized in the future and leased real estate arerecognized a loss on impairment. The Company wrote down theclassified as individual cash-generating units. Assets not definitely

book value of these assets to nil.
For the year ended March 31, 2014, the Company recorded

linked to a specific business, such as the head-office building,the facilities for research and development and the facilities fora loss on impairment of fixed assets and included it in loss on

welfare, are classified as corporate assets.

liquidation of a subsidiary. The main components of loss on

As the production equipment located at the Yokkaichi Plant

impairment of fixed assets are as follows:
Millions of yen

Location
Singapore Plant(Singapore)

Major use
Production equipment

Classification
Buildings and structures

2014
514

¥

Machinery and equipment

2,630

Leased assets

2,464

Other

200

Total

¥

5,808

On August 12, 2013, the Board of Directors of the Company

on impairment of fixed assets for the year ended March 31, 2014.

approved a plan to terminate the operations of ISK Singapore

The recoverable value of the above impaired fixed assets was

PTE. Ltd., a consolidated subsidiary involved in the inorganic

measured at estimated net realizable value. The Company wrote

chemical business, and procedures were commenced for the

down the book value of these assets to nil.

liquidation. In line with this approval, the Company recorded loss

9. Short-Term Bank Loans, Long-Term Bank Loans, Lease Obligations and Bonds
The average annual interest rate on short-term bank loans at March 31, 2015 and 2014 was approximately 1.5%.
Long-term bank loans, including the current portion of long-term bank loans, at March 31, 2015 and 2014 consisted of the following:Thousands of
U.S. dollars

Millions of yen

Secured bank loans......................................................................................................

¥

2015
18,202¥

2014
18,646$

2015
151,330

Unsecured bank loans..................................................................................................

40,317

37,245335,194

Subtotal........................................................................................................................

58,51955,891

486,524

Less amounts due within one year................................................................................
Total..............................................................................................................................

(15,269)(16,072)¥

42,447¥

40,622(133,622)$

352,902

Interest rates applicable to long-term bank loans presented in the above table ranged from 1.2% to 5.9% at March 31, 2015 and from
1.0% to 5.9% at March 31, 2014. These bank loans become due from 2015 through to 2022.

Ishihara Sangyo Kaisha, Ltd.

17

Bonds at March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars

Millions of yen

Unsecured bonds, payable in yen at rate of 0.257%, due 2019....................................

¥

Less amounts due within one year................................................................................
Total..............................................................................................................................

2015
1,120

¥

2014
1,400

¥

1,120

(280)

(280)
¥

840

2015
9,312

$

(2,328)$

6,984

Lease obligations at March 31, 2015 and 2014 were as follows:
Thousands of
U.S. dollars

Millions of yen

Finance lease obligations (ownership not transferred to the lessee)..............................

¥

Less amounts due within one year................................................................................
Total..............................................................................................................................

2015
1,446

¥

897

2015
12,022

$

(638)

(549)
¥

2014
1,730

¥

1,092

(4,564)$

7,458

Information for the payment schedules of long-term bank loans, bonds, and lease obligations subsequent to March 31, 2015 is describedin Note 17.
At March 31, 2015 and 2014, the following assets were pledged as collateral for short-term bank loans, the current portion of longterm bank loans and long-term bank loans:Thousands of
U.S. dollars

Millions of yen

Property, plant and equipment, net of accumulated depreciation.................................

¥

2015
29,765¥

2014
33,141

2015
247,464$

Investments in securities...............................................................................................

105

74

873

Cash and deposits........................................................................................................

190

532

1,580

Total..............................................................................................................................

¥

30,060¥33,747$

249,917

Short-term bank loans, the current portion of long-term bank loans and long-term bank loans secured by such collateral at March 31,
2015 and 2014 were as follows:
Thousands of
U.S. dollars

Millions of yen

Short-term bank loans..................................................................................................

¥

2015
12,790¥2014
13,030$2015
106,335

Current portion of long-term bank loans.......................................................................

4,717

5,046

39,217Long-term bank loans...................................................................................................

13,485

13,600112,113

Total..............................................................................................................................

¥

30,992¥

31,676$257,665

In addition, cash and deposits of nil and ¥133 million, buildings and structures of ¥92 million ($765 thousand) and ¥97 million, land of ¥219
million ($1,821 thousand) and ¥219 million were pledged as collateral to secure future loans from certain financial institutions at March 31,
2015 and 2014, respectively. However, there were no corresponding liabilities at March 31, 2015 and 2014.

10. Asset Retirement Obligations
The asset retirement obligations include legal obligations for
disposal of items including polychlorobiphenyl pursuant to theoriginal condition upon termination of lease contracts.
The asset retirement obligations are measured at present“Law Concerning Special Measures Against PCB Waste” andvalue calculated based on the discount rate applicable toother legal obligations for the removal of leasehold improvements

government bonds and the assets’ useful lives, estimated to be 3

and restoration of premises around the Yokkaichi Plant to theiryears to 8 years.

18

Ishihara Sangyo Kaisha, Ltd.

The following is a summary of changes in the carrying amounts of the asset retirement obligations for the years ended March 31, 2015
and 2014.
Thousands of
U.S. dollars

Millions of yen

Asset retirement obligation balance at the beginning of the year..................................

¥

2015
841

2014
849

¥

2015
6,992

$

Liabilities incurred due to the acquisition of property, plant and equipment..................

5

–

42

Accretion expense........................................................................................................

0

1

0

Liabilities settled............................................................................................................
Asset retirement obligation balance at the end of the year............................................

(9)

(6)
¥

840

¥

841

(50)
$

6,984

Disclosure of detailed information on the asset retirement obligations at March 31, 2015 and 2014 were omitted because the total
amounts of asset retirement obligations at March 31, 2015 and 2014 were less than 1% of the amount of total liabilities and net assets.

11. Retirement Benefits
The Company and certain consolidated subsidiaries havecontribution pension plans.

a lump-sum payment plan as a retirement benefit plan for

Certain consolidated subsidiaries have calculated theireligible employees upon retirement. Retirement payments

retirement benefit obligations and retirement benefit expenses

are determined by reference to basic salary, years of service

based on the amount which would be payable at the year end

and certain other factors. In addition to this, the Company

if all eligible employees terminated their services voluntarily (theand certain domestic consolidated subsidiaries have defined“Simplified Method”).

The changes in retirement benefit obligations during the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Retirement benefit obligations at the beginning of the year...........................................

¥

2015
10,3472014
10,370¥$2015
86,024

Cumulative effects of changes in accounting policies...................................................

1,095

–

9,104

Restated balance at the beginning of the year..............................................................

11,442

10,37095,128Service cost..................................................................................................................

612

567

5,088

Interest cost..................................................................................................................

110

190

915

Actuarial gain................................................................................................................

(273)

(303)

(2,270)Retirement benefits paid...............................................................................................

(483)

(502)

(4,016)

Prior service cost..........................................................................................................

–

(24)

–

Other.............................................................................................................................
Retirement benefit obligations at the end of the year....................................................

49

(3)
¥

11,405¥

10,347(24)$

94,821

The changes in plan assets during the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Plan assets at the beginning of the year........................................................................

¥

2015
306

¥

2014
276

$

2015
2,544

Expected return on plan assets....................................................................................

5

5

42
125

Actuarial gain................................................................................................................

15

63

Contributions paid by the Company and subsidiaries...................................................

25

26

207

Retirement benefits paid...............................................................................................

(181)

(70)

(1,505)

Other.............................................................................................................................
Plan assets at the end of the year.................................................................................

6

(8)
¥

162

¥

306

(66)
$

1,347

Ishihara Sangyo Kaisha, Ltd.

19

The changes in retirement benefit obligations calculated by the Simplified Method during the year ended March 31, 2015 and 2014 are as
follows:
Thousands of
U.S. dollars

Millions of yen

Retirement benefit obligations at the beginning of the year...........................................

¥

2015
761

¥

2014
843

$

2015
6,327

Retirement benefit expenses.........................................................................................

80

75

665

Retirement benefits paid...............................................................................................

(13)

(157)

(108)

Retirement benefit obligations at the end of the year....................................................

¥

828

¥

761

$

6,884

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheet as of March 31,
2015 and 2014 for the Company’s and the consolidated subsidiaries’ defined benefit plans:
Thousands of
U.S. dollars

Millions of yen

Funded retirement benefit obligation.............................................................................

¥

Plan assets at fair value.................................................................................................
Unfunded retirement benefit obligation.........................................................................

2015
276

¥

2014
363

$

2015
2,295

(162)

(306)

(1,347)

114

57

948

11,957

10,74599,410Net amount of asset and liability for retirement benefits
in the consolidated balance sheet..............................................................................

12,071

10,802

100,358

Liability for retirement benefits......................................................................................

12,085

10,811

100,474

Asset for retirement benefits.........................................................................................

(14)

(9)

(116)

Net amount of asset and liability for retirement benefits
in the consolidated balance sheet..............................................................................

¥

12,071¥

10,802$

100,358

The components of retirement benefit expenses for the years ended March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost..................................................................................................................

¥

2015
612

¥

2014
567

$

2015
5,088

Interest cost..................................................................................................................

110

190

915

Expected return on plan assets....................................................................................

(5)

(5)

(42)

Net retirement obligation at transition........................................................................

359

359

2,986

Actuarial loss.............................................................................................................

68

153

565

Prior service cost.......................................................................................................

20

24

166

Retirement benefit expenses calculated by the Simplified Method............................

80

75

665

Amortization:

Retirement benefit expenses.........................................................................................

¥

1,244

¥

1,363

$

10,343The components of retirement benefits liability adjustments included in other comprehensive income (before tax effect) for the year ended
March 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Actuarial loss.................................................................................................................

¥

2015
356

¥

2014
181

$

2015
2,959

Prior service cost..........................................................................................................

20

25

166

Net retirement obligation at transition............................................................................

359

–

2,986

Others...........................................................................................................................
Total..............................................................................................................................

20

Ishihara Sangyo Kaisha, Ltd.

–

15
¥

750

¥

206

124
$

6,235

The components of retirement benefits liability adjustments included in accumulated other comprehensive income (before tax effect) as ofMarch 31, 2015 and 2014 are as follows:
Thousands of
U.S. dollars

Millions of yen

Unrecognized actuarial loss..........................................................................................

¥

2015
371

2014
739

¥

2015
3,084

$

Unrecognized prior service cost...................................................................................

209

232

1,738

Unrecognized net retirement obligation at transition.....................................................

–

359

–

Total..............................................................................................................................

¥

580

¥

1,330

$

4,822

The fair value of plan assets, by major category, as a percentage of total plan assets as of March 31, 2015 and 2014 are as follows:

Debt securities..............................................................................................................

2015
84%

2014
84%

Equity securities............................................................................................................

11

9

Cash and deposits........................................................................................................

5

6

Others...........................................................................................................................

–

1

Total..............................................................................................................................

100%

100%

The expected return on plan assets has been estimated based on the anticipated allocation to each asset class at present and in the
future and the expected long-term returns on assets held in each category at present and in the future.
The assumptions used in accounting for the defined benefit plans for the year ended March 31, 2015 and 2014 are as follows:

Discount rate.................................................................................................................

2015
Principally 0.9%

2014
Principally 1.8%

Expected long-term rate of return on plan assets.........................................................

Principally 1.8%

Principally 3.0%

Rates of salary increase................................................................................................

Principally 6.5%

Principally 6.7%

Total contributions paid by the Company and certain consolidated subsidiaries to the defined contribution pension plans for the years
ended March 31, 2015 and 2014 amounted to ¥85 million ($707 thousand) and ¥83 million, respectively.

12. Contingent Liabilities(a) Guarantees
At March 31, 2015, the Company was contingently liable for the following:Thousands of
U.S. dollars

Millions of yen

Trade notes receivable discounted with banks.......................................................................................

¥

As guarantor for borrowings of unconsolidated subsidiaries..................................................................
Total.......................................................................................................................................................

(b) Remediation measures in response to contaminated soil
and underground water and waste assumed to be buried at
Yokkaichi Plant of the Company (the “Plant”)

2015
130

$

2015
1,081

$

1,962

106
¥

236

881

contamination remediation measures and for analyzing anddisposing of buried waste.
As a result of soil and underground water surveys conducted

Regarding costs for remediation measures for contaminatedat the Plant after an assessment by a comprehensive compliancesoil and underground water at the Plant and waste assumed totest, contamination was identified, which seems to be mainly

be buried at the Plant, the Company’s policy is to record thesederived from past production activities. In response to this,costs as extraordinary losses, which were paid during the year

the Company submitted certain documents to Yokkaichi Cityor reasonably estimated as of the balance sheet date. The

in 2008, which has jurisdiction over the matter, notifying theCompany does not record any costs that cannot be reasonably

authorities of these findings, in accordance with the “Ordinanceestimated at the balance sheet date, such as costs for permanent

for Conservation of the Living Environment” enacted by Mie
Ishihara Sangyo Kaisha, Ltd.

21

Prefecture. Subsequently, the Company conducted a survey toidentify the status and source of the contamination, collected datadetailed surveys.
In light of this situation, the Company will undertake more

to design a plan for preventing the expansion of contamination

detailed studies for identifying the location, extent, nature, andunder the guidance and advice from the Environmental Expert

volume of buried waste and determine appropriate methods

Committee, which consists of third-party academic advisors.

for disposing of such waste in or after fiscal 2015 once the

Until and including the year under review, the Company

Company has completed the disposal of Ferosilt. The Company

has undertaken trials aimed at determining a suitable method

will continually monitor the effects on the environment around thefor removing or insolubilizing causative substances, and set

Plant until that time.

up pumping and water treatment facilities in order to prevent
dispersal of contaminated ground water. In the year under review,(1) Buried waste in area No. 2

the Company also has kept conducting full-scale pumping.

Since area No. 2 was previously the site of a sedimentation

Thereafter, full-scale pumping will be continued, which

pond, certain legally permitted waste was also buried there.

includes installments of additional pumping and purification

Consequently, prior to waste removal, the Company will needequipment and adopting local applications based on the results

to distinguish between legally and illegally buried wastes. In theof trial insolubilizing measures based on the results of the surveys

process of identifying the exact location of the inappropriately

and trials in prior years.

buried waste, the Company is confirming the presence of

The following information on buried waste that must
be removed from the Plant has been officially announced

underground metallic and type of soil, which is different fromother layers.

in connection with the assessment of the comprehensive
compliance test. The measures required to remove the buried(2) Inorganic sludge and other substances at a former plant sitewaste will probably have an impact on the Company’s future

The Company temporarily stored removed Ferosilt at the site.

business performance. At present, the specific details of the

From January 2009, the Company started to carry out the Ferosilt

waste to be removed, such as the type, properties and volume

removal and a boring survey has been implemented in sections

have yet to be determined because the vacant area in the Plant

as removal was completed. Inorganic sludge was identified fromis used for temporarily storing removed Ferosilt and therefore thecertain bored sections.

Company cannot comprehensively continue all the necessary

13. Income Taxes
Income taxes applicable to the Company and its domestic

the years ended March 31, 2015 and 2014 was, in the aggregate,consolidated subsidiaries consist of corporation, inhabitants’ andapproximately 35.1%. Overseas subsidiaries are subject to theenterprise taxes. The applicable statutory tax rate in Japan forincome taxes of the respective countries in which they operate.

The effective tax rate reflected in the accompanying consolidated statement of operations for the year ended March 31, 2015 differs fromthe above statutory tax rate for the following reasons:Statutory tax rate..................................................................................................................................................................

2015
35.1 %

Permanently non-deductible expenses.............................................................................................................................

0.3

Permanently non-taxable income......................................................................................................................................

(1.0)

Per capita portion of inhabitants’ taxes.............................................................................................................................

0.3

Tax deduction for experiment and research expenses......................................................................................................

(0.9)

Unrealized gain on intercompany transactions..................................................................................................................

(0.8)

Changes in valuation allowance.........................................................................................................................................

(3.0)

Decrease of deferred tax assets resulting from change in tax rates..................................................................................

9.4

Other.................................................................................................................................................................................

(0.4)

Effective tax rate...................................................................................................................................................................

39.0 %

22

Ishihara Sangyo Kaisha, Ltd.

The details of the differences between the statutory tax rate

Deferred income taxes reflect the net tax effect of theand the effective tax rate for the year ended March 31, 2014

temporary differences between the carrying amounts of thehave not been presented because the Company and its

assets and liabilities for financial reporting purposes and theconsolidated subsidiaries recorded a loss before income taxes

corresponding amounts for income tax purposes.

and minority interests.
The significant components of the Company’s and consolidated subsidiaries’ deferred tax assets and liabilities at March 31, 2015 and2014 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Deferred tax assets:
Tax loss carryforwards..............................................................................................

¥

10,317¥

10,948$85,775

Liability for retirement benefits...................................................................................

3,851

3,794

Loss on devaluation of inventories.............................................................................

195

441

1,621

Unrealized gain on intercompany transactions..........................................................

1,631

1,902

13,5604,190

32,017

Accrued expenses.....................................................................................................

504

532

Accrued bonuses for employees...............................................................................

216

178

1,796

Reserve for Ferosilt removal......................................................................................

1,033

1,961

8,588

Reserve for implementation of environmental and safety arrangements....................

293

203

2,436

Asset retirement obligations......................................................................................

267

294

2,220

Loss on liquidation of a subsidiary.............................................................................

6,783

7,466

56,393

Other.........................................................................................................................

1,864

1,922

15,498Gross deferred tax assets.............................................................................................

26,95429,641

224,094

Less valuation allowance..............................................................................................

(15,347)(14,572)(127,594)

Total deferred tax assets...............................................................................................

11,607

15,06996,500

Deferred tax liabilities:
Property, plant and equipment..................................................................................

(21)

(21)

(175)

Unrealized holding gain on securities........................................................................

(143)

(120)

(1,189)Translation adjustments.............................................................................................

–

(180)

–

Other.........................................................................................................................

(429)

(382)

(3,566)

Total deferred tax liabilities............................................................................................

(593)

(703)

Net deferred tax assets.................................................................................................

¥

11,014¥

14,366(4,930)$91,570The “Act for Partial Amendment of the Income Tax Act, etc.” (Act1, 2015 and for the temporary differences expected to be

No.9 of 2015) and the “Act for Partial Amendment of the Local

realized or settled from April 1, 2016, respectively. The effectTax Act, etc.” (Act No.2 of 2015) were promulgated on March 31,of the announced reduction of the effective statutory tax rate

2015. As a result, the effective statutory tax rate used to measure

was to decrease deferred tax assets, after offsetting deferred

the Company’s deferred tax assets and liabilities was changed

tax liabilities, by ¥1,039 million ($8,638 thousand) and increase

from 35.1% to 32.6% and 31.8% for the temporary differences

deferred income tax expense by ¥1,080 million ($8,979 thousand),expected to be realized or settled in the year beginning April

as of and for the year ended March 31, 2015.

Ishihara Sangyo Kaisha, Ltd.

23

14. Shareholders’ Equity
The Company Act of Japan (the “Act”) provides that an amountcertain conditions are met.

equal to 10% of the amount to be disbursed as distributions

Under the Act, upon the issuance and sale of new shares ofof capital surplus (other than the capital reserve) and retainedcommon stock, the entire amount of the proceeds is required toearnings (other than the legal reserve) be transferred to the capitalbe accounted for as common stock, although a company may, byreserve and the legal reserve, respectively, until the sum of theresolution of the Board of Directors, account for an amount not

capital reserve and the legal reserve equals 25% of the capital

exceeding one-half of the proceeds of the sale of new shares asstock account. Such distributions can be made at any time byadditional paid-in capital.

resolution of the shareholders or by the Board of Directors if
Common stock and treasury stock
Movements in common stock and treasury stock during the years ended March 31, 2015 and 2014 are summarized as follows:
Thousands of shares

2015
April 1, 2014

Increase

Decrease

March 31, 2015

Common stock.....................................................................

403,839––

403,839

Treasury stock......................................................................

3,909

65

1

3,973

Thousands of shares

2014
April 1, 2013

Increase

Decrease

March 31, 2014

Common stock.....................................................................

403,839––

403,839

Treasury stock......................................................................

3,808

103

2

3,909

The increases in treasury stock were due to purchases of sharesshares at requests of shareholders who own less than one votingof less than one voting unit for the years ended March 31, 2015

unit for the years ended March 31, 2015 and 2014.

and 2014. The decreases in treasury stock were due to sales of

15. Research and Development Costs
Research and development costs included in manufacturing costs

ended March 31, 2015 and 2014 totaled ¥9,330 million ($77,569

and selling, general and administrative expenses for the years

thousand) and ¥8,965 million, respectively.

16. Leases
Operating lease transactions
Future minimum lease payments subsequent to March 31, 2015 under non-cancelable operating leases are summarized as follows:Year ending March 31,

2016........................................................................................................................................................

¥

2017 and thereafter.................................................................................................................................
Total........................................................................................................................................................

24

Ishihara Sangyo Kaisha, Ltd.

Thousands of
U.S. dollars

Millions of yen

57

$

130
¥

187

474
1,081

$

1,555

17. Financial Instruments
Overview(3) Risk management for financial instruments(1) Policy for financial instruments(a) Monitoring of credit risk (the risk that customers or

In consideration of plans for capital expenditures or cash

counterparties may default)

management, the Company and its consolidated subsidiaries

In accordance with the internal policies for credit limit(collectively, the “Group”) raise funds through bank loans or

management, the Group reduces certain risks arising from credit

issuing bonds for its domestic and overseas business. The Grouptransactions with customers by setting credit limits for individual

manages temporary cash surpluses through low-risk financial

customers, managing maturity dates and outstanding amounts,

assets. The Group uses derivatives for the purpose of reducing

recognizing the existing risks and controlling all receivables

fluctuation risk of foreign exchange and interest rates. However,appropriately. The Group monitors the financial situation of

the use of derivatives is limited within the extent of risk at theits main customers periodically and compares outstanding

basis of the actual demand and the Group does not enter into

receivables balances with the amounts of credit limit by each

derivatives for speculative or trading purposes.

customer periodically and confirms that the internal policies areappropriately applied.

(2) Types of financial instruments and related risk

In accordance with the internal policies for asset

Trade receivables – trade notes and accounts receivable – aremanagement, the Group invests in held-to-maturity debt securities

exposed to credit risk in relation to customers. In addition,with high credit ratings. Accordingly, the Group believes that the

the Group has global operations and the percentage of sales

credit risk deriving from such debt securities is insignificant.

transactions denominated in foreign currencies is high. As a result,

The Group also believes that the credit risk of derivatives

the Group is exposed to foreign currency exchange risk arising

is insignificant as it enters into derivative transactions only withfrom receivables denominated in foreign currencies.

financial institutions or trading companies which have a soundMarketable securities and investments in securities are

credit profile.

exposed to market risk. Those securities are composed of mainly
held-to-maturity debt securities and the shares of common(b) Monitoring of market risks (the risks arising from fluctuations instock of other companies with which the Group has businessforeign exchange rates, interest rates and others)

relationships, or affiliated companies. The Group has also loans

For trade receivables and payables denominated in foreign

receivable from other companies with which it has businesscurrencies, the Group identifies the foreign currency exchange

relationships. These loans receivable are exposed to credit risk.

risk for each currency on a monthly basis and enters into forward

Regarding trade payables – trade notes and accounts

foreign exchange contracts to hedge such risk. In order to mitigate

payable – the Group is exposed to the risk of failure of settlement

the unfavorable impact caused by foreign currency exchangeof these payables at the due date because of working capitalfluctuations on accounts receivable deriving from forecasted

issue, which may result in loss of credit. The Group is also

export sales transactions, the Group may enter into forward

exposed to foreign currency exchange risk arising from thoseforeign exchange contracts to the extent it is probable that thosepayables denominated in foreign currencies due to the import offorecasted export sales take place. In order to mitigate the interest

raw materials and other supplies.

rate risk for loans payable and bonds bearing interest at variable

A portion of bank loans and bonds has some financial
covenants, which may result in the risk of early repayment

rates, the Group may also enter into interest rate swap transactions.
For marketable securities and investments in securities,

depending on the fluctuation of the financial position of the Group.

the Group periodically reviews the fair values of such financial

Short-term and long-term bank loans with variable interest rates

instruments and the financial position of the issuers. In addition,

are exposed to interest rate fluctuation risk. The repayment dates

the Group continuously evaluates whether securities otherof the debt extend up to 7 years from the balance sheet date.

than those classified as held-to-maturity debt securities should

Regarding derivatives, the Group enters into forward foreignexchange contracts to reduce the foreign currency exchange
risk arising from the receivables and payables denominated in

be maintained taking into account their fair values and therelationships with the issuers.
In conducting derivative transactions, the division in charge of

foreign currencies. The Group also enters into interest rate swap

derivative transactions follows the internal policies, and requests

transactions to reduce fluctuation risk deriving from interest

divisions that perform such derivative transactions to report thesepayable for long-term bank loans bearing interest at variabletransactions, and reconciles this information with transaction

rates. Information regarding the method of hedge accounting isdetails obtained from financial institutions. The division preparesdescribed in Note 2 (f).

monthly reports which include actual transaction data, theIshihara Sangyo Kaisha, Ltd.

25

contracted amounts, principals, fair value of these derivatives andavailable, fair value is reasonably estimated. Since various

valuation gains or losses. These reports are then submitted to theassumptions and factors are reflected in estimating the fair value,

Board of Directors for their review.

different assumptions and factors could result in different fairvalue. In addition, the notional amounts of derivatives in Note 18
are not necessarily indicative of the actual market risk involved in(c) Monitoring of liquidity risk (the risk that the Group may not be

the derivative transactions.

able to meet its obligations on scheduled due dates)
Based on the reports from each cash management division, theGroup prepares and updates its cash flow plans on a monthly

Estimated Fair Value of Financial Instruments

basis to manage liquidity risk. The Group also reports these

The carrying value of financial instruments on the consolidated

plans to the Board of Directors and takes actions if necessary tobalance sheets, estimated fair value and the differences as ofmaintain a specified level of cash position.

March 31, 2015 and 2014 are shown in the following table. The
following table does not include financial instruments for which it isextremely difficult to determine the fair value. (Please refer to Note

(4) Supplementary explanation of the estimated fair value of17(b) below)

financial instruments
The fair value of financial instruments is based on their quoted
market price, if available. When there is no quoted market price(a) Estimated fair value of financial instruments

Millions of yen

2015

2014

Carrying value

Estimated fair
value

Carrying value

Estimated fair
value

¥

¥

¥

¥

Difference

Difference

Assets:(1) Cash and deposits....................................................
(2) Trade receivables......................................................

21,472
29,05921,472¥–

29,059–17,85125,871

17,851¥–25,871–(0)(3) Securities and investments in securities:
Held-to-maturity debt securities................................

10

10

0

10

10

Other securities.........................................................

1,406

1,406

–

1,177

1,177

Total assets......................................................................

¥

51,947¥51,947¥0¥44,909¥44,909–¥(0)Liabilities:(1) Trade payables..........................................................

12,40912,409–13,225

13,225–(2) Short-term bank loans ..............................................

15,40015,400–16,52016,520–(3) Long-term bank loans, including current portion......

58,51958,53655,891

17

55,93746

Total liabilities...................................................................

¥

86,328¥86,345¥

17¥85,636¥

85,682¥46

Derivatives (*)...................................................................

¥

274

¥

274

¥

–

¥

(135)

¥

(135)

¥

–

26

Ishihara Sangyo Kaisha, Ltd.

Thousands of U.S. dollars

2015
Carrying value

Estimated fairvalue(1) Cash and deposits....................................................

$ 178,517$ 178,517(2) Trade receivables......................................................

241,595

241,595

–

83

83

0

Difference

Assets:$–(3) Securities and investments in securities:
Held-to-maturity debt securities................................
Other securities.........................................................

11,689

11,689Total assets......................................................................

$ 431,884$ 431,884(1) Trade payables..........................................................

103,168

103,168–(2) Short-term bank loans ..............................................

128,035

128,035––$0Liabilities:(3) Long-term bank loans, including current portion......

486,524

486,665

Total liabilities...................................................................

$ 717,727$ 717,868$

141

Derivatives (*)...................................................................

$

$

$

–

2,278

2,278

141

(*) Assets and liabilities arising from derivatives are shown at net value with the amount in parentheses representing net liability position.

Methods to determine the estimated fair value of financial

Liabilities:

instruments and other matters related to securities and derivative(1) Trade payables and (2) Short-term bank loans

transactions are as follows:

Since these items are settled in a short time period, their carrying
value approximates estimated fair value.

Assets:(1) Cash and deposits and (2) Trade receivables(3) Long-term bank loans, including current portion

Since these items are settled in a short time period, their carrying

For long-term bank loans with floating interest rates, their carrying

value approximates estimated fair value.

value approximates estimated fair value because their interest rate
reflects the market interest rate.

(3) Securities and investments in securities

The estimated fair value of long-term bank loans with

The fair value of equity and debt securities is based on quoted

fixed interest rates is based on the present value of the total ofmarket prices.

principal and interest discounted by the interest rate to be applied

Regarding the information on securities and investments inassuming new loans under the similar conditions to existing loans

securities corresponding to holding purposes, please refer toare made.

Note 5.

Derivatives:
Please refer to Note 18 “Derivatives.”(b) Financial instruments whose fair values were extremely difficult to determine
Thousands of
U.S. dollars

Millions of yen

Unlisted equity securities..............................................................................................

¥

2015
4,025

¥

2014
3,636

$

2015
33,464

Investments in limited partnerships...............................................................................

55

73

457

Preferred securities.......................................................................................................

–

500

–

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above financial instruments are notincluded in the preceding table.

Ishihara Sangyo Kaisha, Ltd.

27

(c) Redemption schedule of deposits, monetary receivables and securities with maturities
Millions of yen

2015
Due in one
year or less

Deposits.....................................

¥

Trade receivables.......................

21,4622014

Due after one
year throughfive years

Due after five
years throughten years¥¥

29,059––Due after ten
years

Due after one
year throughfive years

Due in one
year or lessDue after five
years throughten years¥

Due after ten
years

– ¥

– ¥

17,841 ¥

–

– ¥

–

–

–

25,871

–

–

–

–

10

– ¥

10

Investments in securities:
Held-to-maturity debt
securities..............................
Total...........................................

–¥

50,521

–
¥

–

¥

10

–

10 ¥

–

–
¥

43,712 ¥–¥–Thousands of U.S. dollars

2015
Due in one
year or less

Deposits.....................................

$ 178,433

Trade receivables.......................

241,595

Held-to-maturity debt
securities..............................

–

Total...........................................

$ 420,028

Due after one
year throughfive years

Due after five
years throughten years$$–

Due after ten
years

– $

–

–

–

–

–

83

–

Investments in securities:

$

–

$

83

$

–

(d) Redemption schedule of long-term debt
Millions of yen

2015Long-term bank loans.....................................

Due in one year
or less

Due after one
year through two
years

¥

¥

16,072

13,483Due after two
years throughthree years¥

12,328Due after three
years throughfour years¥

11,251

Due after four
years through five
years

¥

4,844

Due after five
years

¥

541

Bonds..............................................................

280

280

280

280

–

–

Lease obligations...............................................

549

391

252

144

70

40

Total..............................................................

¥

16,901¥

14,154¥

12,860¥11,675

¥

4,914

¥

581

Thousands of U.S. dollars

2015
Due in one year
or less

Due after one
year through twoyears

Long-term bank loans.....................................

$ 133,622$ 112,097$ 102,494

Bonds..............................................................

2,328

2,328

2,328

2,328

–

–

Lease obligations...............................................

4,564

3,251

2,095

1,197

582

333

Total..............................................................

$ 140,514$ 117,676$ 106,917

28

Ishihara Sangyo Kaisha, Ltd.

Due after two
years throughthree years

Due after three
years throughfour years$$

93,54097,065Due after four
years through five
years

$

$

40,27340,855Due after five
years

$

$

4,498

4,831

18. Derivatives
The notional amounts and the estimated fair value of the derivative instruments outstanding which did not qualify for deferral hedge
accounting at March 31, 2015 and 2014 were as follows:(a) Currency-related transactions
Forward foreign exchange contracts:
Millions of yen

2015

2014

Estimated fairvalue

Notional amount

Unrealized gain
(loss)

Notional amount¥¥

Estimated fairvalue

Unrealized loss

Sell:
Euro.............................................................

¥

2,754

U.S. dollars................................................

¥

281

281

6,171

¥

(80)

¥

(80)

–

–

–

466

2

2

484

(7)

(7)

446

(16)

(16)

Buy:
Japanese yen............................................
Total..............................................................

¥

3,238

¥

274

¥

¥

274

7,083

¥

(94)

¥

(94)

Thousands of U.S. dollars

2015
Estimated fairvalue

Notional amount

Unrealized gain
(loss)

Sell:
Euro.............................................................

$

22,897

U.S. dollars..................................................

$

2,336

$

2,336

–

–

–

4,024

(58)

(58)

Buy:
Japanese yen..............................................
Total.................................................................

$

26,921

$

2,278

$

2,278

(b) Currency-related transactions (hedge accounting is applied)
Forward foreign exchange contracts:
Millions of yen

2015
Method of accounting

The allocation
methodClassification

Hedged item

Sell:
U.S. dollars

Accounts
receivable

Buy:
U.S. dollars

Accounts
payableTotal

Notional amount

Notional amount(over one year)

¥

¥

–
13

¥

13

–

2014
Estimated fairvalue (*)

¥

–
¥

–

(**)

Notional amount

Notional amount(over one year)

¥

464

¥

–

¥

464

¥

–

2

(**)
¥

–

Estimated fairvalue (*)

¥

–

(**)
(**)

¥

Ishihara Sangyo Kaisha, Ltd.

–

29

Thousands of U.S. dollars

2015
Method of accounting

The allocation
methodClassification

Hedged item

Sell:
U.S. dollars

Accounts
receivable

Buy:
U.S. dollars

Accounts
payableTotal

Notional amount

Notional amount(over one year)

$

–

$

–

$

108

$

–

108

Estimated fairvalue (*)

$

–

(**)
(**)

$

–

(*) The estimated fair value of forward foreign currency exchange contracts is computed using prices provided by counterparty financial institutions.
(**) Because forward foreign exchange contracts are accounted for as if the exchange rates applied to the forward foreign exchange contracts hadoriginally applied to the accounts receivable or payable, their fair values were included in accounts receivable or payable.

(c) Interest-related transactions (hedge accounting is applied)
Millions of yen

2015
Method of accounting

Classification

Hedged item

Deferral hedge Receive/ floating Long-termand pay/fixedbank loans
The special
methodNotional amount

¥

–

¥

–

¥

9,835

¥

5,772

Receive/ floating Long-termand pay/fixedbank loans
Total

2014

Notional amount(over one year)

9,835

Estimated fairvalue (*)

¥

5,772

–

Notional amount

Notional amount(over one year)

¥

3,102

¥

–

¥

11,023

¥

5,802

7,921

(**)
¥

–

Estimated fairvalue (*)

¥

(41)

¥

(41)

5,802

(**)

Thousands of U.S. dollars

2015
Method of accounting

Classification

Hedged item

Deferral hedge Receive/ floating Long-termand pay/fixedbank loans
The special
methodNotional amount

Notional amount(over one year)

$

–

$

$

81,768

Receive/ floating Long-termand pay/fixedbank loans
Total

81,768–Estimated fairvalue (*)$

47,988$47,988

–
(**)

$

–

(*) The estimated fair value of forward foreign currency exchange contracts is computed using prices provided by counterparty financial institutions.
(**) Because interest rate swap agreements are accounted for as if the interest rates applied to the swaps had originally applied to the long-term bankloans, their estimated fair values were included in estimated fair value of long-term bank loans.

19. Loss on Liquidation of a Subsidiary
During the year ended March 31, 2014, ISK Singapore PTE. Ltd., aamount of ¥12,777 million, which consisted of impairment loss

consolidated subsidiary of the Company, terminated its operationsof fixed assets amounting to ¥5,808 million, loss on devaluationand commenced procedures for liquidation. As a result, theof inventories amounting to ¥2,754 million and other losses

Company recognized a loss on liquidation of a subsidiary in theamounting to ¥4,215 million.

30

Ishihara Sangyo Kaisha, Ltd.

20. Other Comprehensive Income
The following table presents reclassification adjustments and tax effects for components of other comprehensive income for the years
ended March 31, 2015 and 2014:
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Net unrealized holding gain on securities:
Amount arising during the year..................................................................................

¥

218

¥

140

$

1,812

Reclassification adjustments for gains realized in consolidated statementof operations...........................................................................................................

–

(46)

–

Before tax effect....................................................................................................

218

94

1,812

Tax effect...............................................................................................................

(23)

(21)

(191)

Total.......................................................................................................................

195

73

1,621

0

1

0

Unrealized deferred gain on hedges:
Amounts arising during the year................................................................................
Reclassification adjustments for losses realized in consolidated statementof operations...........................................................................................................

41

62

341

Tax effect...............................................................................................................

(15)

(25)

(125)

Total.......................................................................................................................

26

38

216

(698)

2,179

(5,803)

Translation adjustment:
Amount arising during the year..................................................................................
Tax effect...............................................................................................................

180

(179)

1,496

Total.......................................................................................................................

(518)

2,000

(4,307)

Amount arising during the year..................................................................................

–

(43)

–

Tax effect...............................................................................................................

–

14

–

Total.......................................................................................................................

–

(29)

–

Amount arising during the year..................................................................................

303

206

2,519

Reclassification adjustments for gains realized in consolidated statementof operations...........................................................................................................

447

–

3,716

Adjustment for projected benefit obligation of an overseas subsidiary:

Retirement benefits liability adjustments:

Before tax effect....................................................................................................

750

–

6,235

Tax effect...............................................................................................................

(287)

(68)

(2,386)

Total.......................................................................................................................

463

138

3,849

Other comprehensive income of affiliates accounted for by the equity method
attributable to the Company.......................................................................................
Total other comprehensive income...............................................................................

271

72
¥

238

¥

2,491

599
$

1,978

21. Supplemental Information to Consolidated Statements of Cash Flows
Information on significant non-cash transactions
The Company and its consolidated subsidiaries recorded new leased assets of ¥371 million ($3,084 thousand) and ¥297 million andlease obligations of ¥400 million ($3,326 thousand) and ¥312 million under finance leases for the years ended March 31, 2015 and 2014,
respectively.

Ishihara Sangyo Kaisha, Ltd.

31

22. Amounts per ShareYen

Net income (loss) per share...........................................................................................

¥Net assets per share.....................................................................................................
Net income (loss) per share is based on the net income

2015
17.46

U.S. dollars

2014(19.59)

¥

2015
0.15

$

116.79133.08

1.11

shares of common stock outstanding at the year end.

attributable to shareholders of common stock and the weighted-

Diluted net income per share for the years ended March

average number of shares of common stock outstanding during31, 2015 and 2014 is not presented since no potentially dilutive

each year. Net assets per share are based on the number of

securities have been issued.

The financial data for the computation of basic net income per share for the years ended March 31, 2015 and 2014 in the table above issummarized as follows:
Thousands of
U.S. dollars

Millions of yen

2015

2014

2015

Information on basic net income per share:
Net income (loss).......................................................................................................

¥Net income (loss) not attributable to common shareholders.....................................
Adjusted net income (loss) attributable to common shareholders.................................

6,984

¥

(7,837)

¥

6,984

$

58,065––¥(7,837)–$58,065

Thousands of shares2015
399,901

Weighted-average number of shares of common stock outstanding during the year.......

2014
399,987

The financial data for the computation of net assets per share at March 31, 2015 and 2014 in the above table is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Total net assets.............................................................................................................

¥

2015
53,215¥53,215¥

2014
46,710¥46,710$2015
442,426$

442,426

Deductions from total net assets:
Minority interests.......................................................................................................
Total net assets used in the calculation of net assets per share....................................

––

Thousands of shares

Number of shares used in the calculation of net assets per share....................................

32

Ishihara Sangyo Kaisha, Ltd.

2015
399,866

2014
399,930–

23. Related Party Transactions
Major transactions and balances between the Company and an affiliated company for the years ended and as of March 31, 2015 and2014 were as follows:
Transactions

BalancesThousandsof U.S.
dollars

Millions of yen

Thousandsof U.S.
dollars

Millions of yen

Name of affiliated company

Type of transaction

2015

2014

2015

Account

2015

2014

2015

BELCHIM CROPPROTECTION N.V.

Sales of products

¥ 48

¥ 63

$ 399

Trade receivables

¥6

¥–

$ 50

Major transactions and balances between a consolidated subsidiary and an affiliated company for the years ended and as of March 31,
2015 and 2014 were as follows:
Transactions

BalancesThousandsof U.S.
dollars

Millions of yen
Name of affiliated company

Type of transaction

2015

BELCHIM CROPPROTECTION N.V.

Sales of products¥ 16,776

2014

Millions of yen

2015¥ 13,412 $ 139,475

Thousandsof U.S.
dollars

Account

Trade receivables

2015

2014

2015

¥ 4,054¥ 4,124$ 33,705

24. Segment Information(a) Overview of the reportable segments

Organic chemicals

The Company’s reportable segments are determined on the basis

This reportable segment includes the business of manufacturingthat such segments provide the Board of Directors with specificand sales of organic intermediates such as agrochemicals andinformation to determine the business activity policy and allocation

active pharmaceutical ingredients.

of management resources and to evaluate their businessperformance. Consequently, the Company has classified its

Other businesses

business into three reportable segments of “Inorganic chemicals,”This reportable segment principally includes the trading business“Organic chemicals,” and “Other businesses” based on theand the construction business.

properties of products and services sold, manufacturing methods
and processes.

(b) Valuation method for reportable segment sales, income (loss)(Change in Reportable Segments)

The accounting policies for the reportable business segments

Effective April 1, 2014 the Company has included the reportable

are the same as those described in Note 2. Intersegment sales

segment of “Construction” in the “Other businesses” segment due

are recorded at the same prices used in transactions with third

to a decrease in materiality. Along with this change in reportableparties. In accordance with the changes in accounting policies

segments, the Company has reclassified the segment information

described in Note 3, the calculation method of the retirement

for the previous year.

benefits obligation and service costs for each reportable segment

and assets

was revised. The impact on segment income for each reportable
Inorganic chemicals

business segment was immaterial.

This reportable segment includes the business of manufacturing
and sales of titanium dioxide, functional materials, which arevalue-added products designed to take advantage of thecharacteristics of titanium dioxide and other inorganic chemicals.

Ishihara Sangyo Kaisha, Ltd.

33

(c) Reportable segment information
Millions of yen

2015
Reportable segments
Inorganic
chemicals

Organic
chemicals¥ 51,342¥ 49,031

Otherbusinesses

Subtotal

Elimination andcorporate (*1)

Consolidated(*2)¥¥ 103,331

Net sales and operating income:Net sales:
External customers...............................................

¥

2,958

¥ 103,331–

Intersegment.........................................................

–

–

2,026

2,026

(2,026)–

Net sales...............................................................

51,342

49,031

4,984

105,357(2,026)

103,331

Segment income......................................................

¥

Segment assets.......................................................

5,895

¥

6,698

¥

152

¥ 12,745¥(1,640)¥ 11,105¥ 73,143¥ 58,753¥

2,573¥ 134,469¥ 34,946¥ 169,415

3,495

1,015

62

4,572

185

4,757

Other items:
Depreciation and amortization of
intangible assets.................................................
Loss on impairment of fixed assets.......................

86

–

–

86

–

86

Increase in fixed tangible and intangible assets.....

2,282

627

44

2,953

137

3,090

Millions of yen

2014
Reportable segments
Inorganic
chemicals

Organic
chemicals

External customers...............................................

¥ 51,751¥ 50,364

Intersegment.........................................................

1

–

Other
businesses

Subtotal

Elimination andcorporate (*1)

Consolidated
(*2)

¥

–

¥ 105,294(1,894)–

Net sales and operating income:Net sales:

Net sales...............................................................

51,752

Segment (loss) income.............................................

¥

Segment assets.......................................................

(1,086)¥50,364¥3,179¥ 105,294

1,893

1,894

5,072

107,188¥

4,667(1,894)¥(1,628)105,294

5,462

¥

291

¥

¥ 73,264¥ 54,706¥

3,873¥ 131,843¥ 34,144¥ 165,987

3,039

Depreciation and amortization of
intangible assets.................................................

3,944

1,108

74

5,126

145

5,271

Loss on impairment of fixed assets.......................

5,808

–

–

5,808

–

5,808

Increase in fixed tangible and intangible assets.....

1,985

655

6

2,646

148

2,794

Other items:

34

Ishihara Sangyo Kaisha, Ltd.

Thousands of U.S. dollars

2015
Reportable segments
Inorganic
chemicals

Organic
chemicals

Otherbusinesses

Elimination andcorporate (*1)

Subtotal

Consolidated(*2)

Net sales and operating income:Net sales:
External customers............................................... $ 426,854 $ 407,640 $

24,593 $ 859,087 $Intersegment.........................................................

––

16,844

16,844(16,844)–

Net sales...............................................................

426,854407,640

41,437875,931(16,844)859,087

49,010 $55,687 $1,264 $ 105,961 $(13,635) $92,326

Segment income...................................................... $Segment assets....................................................... $ 608,105 $ 488,469 $–$ 859,087

21,392 $ 1,117,966 $ 290,539 $ 1,408,505

Other items:
Depreciation and amortization of
intangible assets.................................................

29,057

8,439

515

38,011

1,538

39,549Loss on impairment of fixed assets.......................

715

–

–

715

–

715

Increase in fixed tangible and intangible assets.....

18,972

5,213

366

24,551

1,139

25,690(*1)		The elimination and corporate applicable to segment

assets amounted to ¥34,946 million ($290,539 thousand)income(loss) amounted to ¥1,640 million ($13,635 thousand)and ¥34,144 million includes ¥828 million ($6,884 thousand)and ¥1,628 million in the above tables and includes ¥165

and ¥981 million of offset of inter-segment receivables andmillion ($1,372 thousand) and ¥158 million of eliminations

payables, and ¥35,774 million ($297,423 thousand) andof intersegment transactions and ¥1,805 million ($15,007¥35,125 million of corporate assets, which are not allocable

thousand) and ¥1,786 million of corporate expenses, which areto a reportable segment as of March 31, 2015 and 2014,

not allocable to the reportable segments for the years ended

respectively. Corporate assets consist of investments ofMarch 31, 2015 and 2014, respectively. Corporate expenses

surplus funds (cash and securities), long-term investments

mainly comprise expenses incurred by the administration(investments in securities), assets of the administration

department of the Company, which are not allocable to any
reportable segment.
The elimination and corporate applicable to segment

department and so forth.
(*2) Segment income(loss) corresponds to operating income in the
consolidated statements of operations.

Ishihara Sangyo Kaisha, Ltd.

35

Related information
Products and services information
The information on each product and service is omitted because it is the same as that of reportable segment information for the years
ended March 31, 2015 and 2014.
Geographical information
Net sales by geographical segment for the years ended March 31, 2015 and 2014 are summarized as follows:
Millions of yen

Year ended March 31, 2015
Japan

Net sales..........................................................

¥

50,803

Asia¥

17,511

America¥

12,946

Europe¥21,643

Other

¥

428

Total

¥ 103,331

Millions of yen

Year ended March 31, 2014
Japan

Net sales..........................................................

¥

49,047

Asia¥

17,968America¥

15,229Europe¥22,876

Other

¥

174

Total

¥ 105,294

Thousands of U.S. dollars

Year ended March 31, 2015
Japan

Net sales..........................................................

$ 422,374

Asia

America

Europe$ 145,585$ 107,632$ 179,938

Other

$

3,558

Total

$ 859,087

The regions are determined on the basis of geographic proximity and the Company’s business activities as follows:
Asia:

China, Taiwan, South Korea, Thailand, Indonesia and Singapore

America: The United States, Canada, Brazil, Argentina and Mexico
Europe: Germany, the Netherlands, France, the United Kingdom, Belgium, Italy, Eastern Europe and the Middle East
Other:

Australia, New Zealand and Africa

Property, plant and equipment by geographical segment as of March 31, 2015 and 2014 are summarized as follows:
Millions of yen

At March 31, 2015
Japan

Property, plant and equipment.................................................

¥

43,518

Asia

¥

150

America¥

816

Europe

¥

41

Total

¥

44,525¥47,160Millions of yen

At March 31, 2014
Japan

Property, plant and equipment.................................................

¥

46,208

Asia

¥

141

America¥765

Europe

¥

46

Total

Thousands of U.S. dollars

At March 31, 2015
Japan

Property, plant and equipment.................................................

36

Ishihara Sangyo Kaisha, Ltd.

$ 361,806

Asia

$

1,247

America$

6,784Europe

$

341

Total

$ 370,178

Geographical information are determined on the basis of geographic proximity and the Company’s business activity as follows:
Asia:

TaiwanAmerica: The United States
Europe: Belgium
Information on sales transactions with major customers
Sales transactions with major customers for the year ended March 31, 2015 are as follows:

Customer name

Relevant reportable segments

MITSUI & CO., LTD.

Inorganic chemicals and organic chemicals............................................

Millions of yen

Thousands of
U.S. dollars

2015¥ 10,481

2015$ 87,138

Information on sales transactions with major customers for the year ended March 31, 2014 is omitted because there were no sales
transactions with major customers which exceed 10% of net sales in the consolidated statement of operations.

25. Subsequent Event
ISK SINGAPORE PTE. LTD. (hereafter “ISK-S”), a wholly owned

On June 3, 2015, ISK-S reached agreements for the partial salesubsidiary of the Company, has been undergoing liquidationof the above rights. Detailed information on the transaction isproceedings including sales of commercial land lease rights.

summarized as follows(a) Reason for saleDue to the termination of business activities, ISK-S is selling its idle assets.
(b) Details of assets sold
Asset details and location

Land lease rights(Location) Tuas, Singapore

Company name and location

JTC Corporation(Location) Singapore

Relationship with the GroupISK-S has concluded a sales agreement for land lease rights with JTC Corporation. There are noother capital, personal or business relationships, or any other relationship as a related party.

Company name and location

A distribution company (name withheld)

Relationship with the GroupISK-S has concluded a sales agreement for land lease rights with the Company. There are no othercapital, personal or business relationships, or any other relationship as a related party.

(c) Overview of parties involved(Location) Singapore(d) Sale price(f) Financial impact

Approximately ¥4.2 billion ($34,919 million)

Gains on sales of land lease rights in the amount of ¥4.2 billion(Note) T he above is an approximate amount based on the total combinedtransaction price for both companies and converted based on themost recent currency rate.

($34,919 million) will be recorded as an extraordinary gain for theyear ending March 31, 2016.

(e) Timing of sale
July 2015 (planned)

Ishihara Sangyo Kaisha, Ltd.

37

Report of Independent Public Accountants

38

Ishihara Sangyo Kaisha, Ltd.

Corporate Data
(As of June 26, 2015)

Head Office

Overseas Affiliated Companies

1-3-15 Edobori, Nishi-ku, Osaka 550-0002, Japan
Tel: +81-6-6444-1451(General Affairs Division)
Fax: +81-6-6445-7798(General Affairs Division)

ISK Taiwan Co.,Ltd
Empire Bldg., Fl 11-1., 87, Sung Chiang Road
Taipei, Taiwan
Tel: +886-2-2504-5387 Fax: +886-2-2509-4961

Board of Directors
Executive Director Chairman
Kazutaka Fujii
Executive Director President
Kenichi Tanaka
Directors
Yoshinari Terakawa
Michiyoshi Arata
Akira Kobayashi
Chimoto Honda
Yoshiyuki Suzuki
Outside Directors
Noriyuki Yonemura
Daizaburo Teranishi

Board of Corporate Auditors(Standing) Corporate Auditor
Keiji Higashiyama
Outside Corporate Auditors
Yoshitaka Akikuni
Masaaki Harima

Executive Officers
President & Chief Executive Officer
Kenichi Tanaka
Senior Managing Executive Officer
Yoshinari Terakawa
Managing Executive Officers
Michiyoshi Arata
Akira Kobayashi
Chimoto Honda
Yoshiyuki Suzuki

ISK KOREA CORPORATION#421 Cheonggu Blueville, 11-1 Sunae-dong, Bundang-gu
Seongnam-City, Gyeonggi-do,
463-825 Korea
Tel: +82-31-778-6393 Fax: +82-31-778-6392
ISK Biosciences Korea Ltd.
4F Kairos Bldg., 837-2 Yeoksam-dong, Gangnam-gu,
Seoul , 135-937 Korea
Tel: +82-2-555-1401 Fax: +82-2-563-1408
ISK Americas, Incorporated
7474 Auburn Road
Concord, OH 44077-9703, U.S.A.
Tel: +1-440-357-4600 Fax: +1-440-357-4611
ISK Biosciences Corporation
7470 Auburn Road, Suite A
Concord, OH 44077-9703, U.S.A.
Tel: +1-440-357-4640 Fax: +1-440-357-4661
ISK Biocides, Inc.
416 East Brooks Road, Memphis, TN
38109-0158, U.S.A.
Tel: +1-901-344-5350 Fax: +1-901-344-5387
ISHIHARA CORPORATION (U.S.A.)
601 California Street Suite 1700
San Francisco, CA 94108, U.S.A.
Tel: +1-415-421-8207 Fax: +1-415-397-5403
ISK Biosciences Europe N.V.
Pegasus Park Building 6, 4th Floor De
Kleetlaan 12B – Box9 1831 Diegem Belgium
Tel: +32-2-627-8611 Fax: +32-2-627-8600

Executive Officers
Yoichi Kobayashi
Ken Kawaguchi
Masanari Kato
Teruaki Matsue
Norihiro Kato
Hideo Takahashi
Kiyomitsu Yoshida
Kiyoshi Masuda
Ishihara Sangyo Kaisha, Ltd.

39

Ishihara Sangyo Kaisha, Ltd.

Printed in Japan