NISSAN CHEMICAL ANNUAL REPORT 2017

ANNUAL REPORT 2017
For the year ended M arch 31, 2017

NISSAN CHEMICAL INDUSTRIES, LTD.
Printed in Japan

Editorial Policy

A Fusion of Knowledge

In 1992, we introduced responsible care activities, which are
initiatives designed to ensure environmental friendliness, health andsafety throughout the entire lifecycle of each chemical. We havedisclosed the details of these activities via Environmental and Safety
Report since 1999 and via CSR Report since 2013.
In the CSR Report, we tried to provide our stakeholders with easy-tounderstand information regarding the CSR approach and activities of thecompany and the group companies. In FY2016, we began publishing thisinformation as the Annual Report, and added a business overview andfinancial highlights to ensure that our group’s business activities are better
understood. Detailed financial information is provided in the Financial Section.
Moving forward, we will continue developing our CSR activities tocontribute to the realization of a sustainable society. We will also
improve the content of the report and make it a useful tool forcommunicating with our stakeholders.

Reporting period
FY2016 (April 2016 to March 2017)* The occupational accidents data is from January to December 2016 (P54).
Scope of reporting
This report describes the initiatives of the Nissan Chemical Group, with a focus
on environmental and safety initiatives of Nissan Chemical Industries, Ltd.

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

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

Consolidated subsidiaries:
Nissei Corporation, Nissan Butsuryu Co., Ltd., Nissan Green & Landscape Co.,
Ltd., Nissan Engineering, Ltd., Nihon Hiryo Co., Ltd., Nissan Chemical America
Corporation (NCA), Nissan Chemical Europe S.A.R.L. (NCE), NCK Co., Ltd. (NCK)
Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.

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

Nissan Chemical Industries, Ltd. Annual Report 2017

Group companies:
The above consolidated subsidiaries and entities accounted for using equity
method, Environmental Technical Laboratories, Ltd., Nissan Chemical Taiwan
Co., Ltd. (NCT), Nissan Chemical Product (Shanghai) Co., Ltd. (NCS),
Nissan Chemical Agro Korea Ltd. (NAK), Nissan Chemical Do Brasil (NCB)● Issued: November 2017
(The previous edition was issued in November 2016, and the next edition isplanned to be issued in October 2018.)● Frequency of issuance: Annually● Guidelines used as reference
・GRI G4 Sustainability Reporting Guidelines
・ISO26000● Contact for inquiries about this report
CSR & Public Relations Office, Corporate Planning Department, Nissan Chemical Industries, Ltd.
TEL: 03-3296-8320
E-mail: csr_pr@nissanchem.co.jp

CO NT E N T S
03 ・・・・・・・・・・・・・・・・Interview with the President
07 ・・・・・・・・・・・・・・・・Business Model
09 ・・・・・・・・・・・・・・・・SDGs and Nissan Chemical Initiatives
11 ・・・・・・・・・・・・・・・・“Progress2030” Long-Term Business Plan and“Vista2021” Mid-Term Business Plan
15 ・・・・・・・・・・・・・・・・Financial Highlights
17 ・・・・・・・・・・・・・・・・Non-Financial Highlights
19 ・・・・・・・・・・・・・・・・Main Products
19 ・・・・・・・・・・・・・・・Nissan Chemical Products that Play an Active Role in Society
21 ・・・・・・・・・・・・・・・Environmentally Friendly Products
Business Overview
23 ・・・・・・・・・・・・・・・・Performance Materials
25 ・・・・・・・・・・・・・・・・Agricultural Chemicals
27 ・・・・・・・・・・・・・・・・Pharmaceuticals
29 ・・・・・・・・・・・・・・・・Chemicals
31 ・・・・・・・・・・・・・・・・Advanced Materials & Planning
33 ・・・・・・・・・・・・・・・・Research and Development
CSR Management
35 ・・・・・・・・・・・・・・・・Promotion of CSR
36 ・・・・・・・・・・・・・・・・Corporate Governance
38 ・・・・・・・・・・・・・・・・Compliance
39 ・・・・・・・・・・・・・・・・Risk Management
39 ・・・・・・・・・・・・・・・・Information Disclosure
40 ・・・・・・・・・・・・・・・・Value Chain
Responsible Care (RC) Activities
41 ・・・・・・・・・・・・・・・・Responsible Care Management
41 ・・・・・・・・・・・・・・・Nissan Chemical RC Management System
42 ・・・・・・・・・・・・・・・Responsible Care Basic Policies
Selection of Material Issues in RC
43 ・・・・・・・・・・・・・・・Promotion of the RC Mid-Term Plan
RC Audits
45 ・・・・・・・・・・・・・・・・Environment Safety and Climate Change Strategy
45 ・・・・・・・・・・・・・・・Environmental Impact from Production Activities
46 ・・・・・・・・・・・・・・・Capital Investment for the Environment and Safety and its Economic Effects
47 ・・・・・・・・・・・・・・・Amount of Energy Consumption and Energy Consumption Rate
48 ・・・・・・・・・・・・・・・Reduction of Greenhouse Gas Emissions
49 ・・・・・・・・・・・・・・・Environmental Performance / Efficient Use of Water Resources
51 ・・・・・・・・・・・・・・・・Biodiversity Conservation
53 ・・・・・・・・・・・・・・・・Safety and Disaster Prevention, Occupational Safety and Health55 ・・・・・・・・・・・・・・・・Chemicals and Product Safety
Communication with Society
57 ・・・・・・・・・・・・・・・・Our Commitment to and Communication with Stakeholders
57 ・・・・・・・・・・・・・・・・Relationships with Customers
59 ・・・・・・・・・・・・・・・・Relationships with Investors
60 ・・・・・・・・・・・・・・・・Relationships with Society
61 ・・・・・・・・・・・・・・・・Relationships with Employees
65 ・・・・・・・・・・・・・・・・Financial Section
80 ・・・・・・・・・・・・・・・・Independent Auditor’s Report
Corporate Information
81 ・・・・・・・・・・・・・・・・Our Network
84 ・・・・・・・・・・・・・・・・Corporate History
85 ・・・・・・・・・・・・・・・・Corporate Profile / Directors
86 ・・・・・・・・・・・・・・・・Share Information
87 ・・・・・・・・・・・・・・・・Comparison with GRI G4 Sustainability Reporting Guidelines

Nissan Chemical Industries, Ltd. Annual Report 201702

Editorial Policy

A Fusion of Knowledge

In 1992, we introduced responsible care activities, which are
initiatives designed to ensure environmental friendliness, health andsafety throughout the entire lifecycle of each chemical. We havedisclosed the details of these activities via Environmental and Safety
Report since 1999 and via CSR Report since 2013.
In the CSR Report, we tried to provide our stakeholders with easy-tounderstand information regarding the CSR approach and activities of thecompany and the group companies. In FY2016, we began publishing thisinformation as the Annual Report, and added a business overview andfinancial highlights to ensure that our group’s business activities are better
understood. Detailed financial information is provided in the Financial Section.
Moving forward, we will continue developing our CSR activities tocontribute to the realization of a sustainable society. We will also
improve the content of the report and make it a useful tool forcommunicating with our stakeholders.

Reporting period
FY2016 (April 2016 to March 2017)* The occupational accidents data is from January to December 2016 (P54).
Scope of reporting
This report describes the initiatives of the Nissan Chemical Group, with a focus
on environmental and safety initiatives of Nissan Chemical Industries, Ltd.

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

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

Consolidated subsidiaries:
Nissei Corporation, Nissan Butsuryu Co., Ltd., Nissan Green & Landscape Co.,
Ltd., Nissan Engineering, Ltd., Nihon Hiryo Co., Ltd., Nissan Chemical America
Corporation (NCA), Nissan Chemical Europe S.A.R.L. (NCE), NCK Co., Ltd. (NCK)
Entities accounted for using equity method:
Sun Agro Co., Ltd., Clariant Catalysts (Japan) K.K.

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

Nissan Chemical Industries, Ltd. Annual Report 2017

Group companies:
The above consolidated subsidiaries and entities accounted for using equity
method, Environmental Technical Laboratories, Ltd., Nissan Chemical Taiwan
Co., Ltd. (NCT), Nissan Chemical Product (Shanghai) Co., Ltd. (NCS),
Nissan Chemical Agro Korea Ltd. (NAK), Nissan Chemical Do Brasil (NCB)● Issued: November 2017
(The previous edition was issued in November 2016, and the next edition isplanned to be issued in October 2018.)● Frequency of issuance: Annually● Guidelines used as reference
・GRI G4 Sustainability Reporting Guidelines
・ISO26000● Contact for inquiries about this report
CSR & Public Relations Office, Corporate Planning Department, Nissan Chemical Industries, Ltd.
TEL: 03-3296-8320
E-mail: csr_pr@nissanchem.co.jp

CO NT E N T S
03 ・・・・・・・・・・・・・・・・Interview with the President
07 ・・・・・・・・・・・・・・・・Business Model
09 ・・・・・・・・・・・・・・・・SDGs and Nissan Chemical Initiatives
11 ・・・・・・・・・・・・・・・・“Progress2030” Long-Term Business Plan and“Vista2021” Mid-Term Business Plan
15 ・・・・・・・・・・・・・・・・Financial Highlights
17 ・・・・・・・・・・・・・・・・Non-Financial Highlights
19 ・・・・・・・・・・・・・・・・Main Products
19 ・・・・・・・・・・・・・・・Nissan Chemical Products that Play an Active Role in Society
21 ・・・・・・・・・・・・・・・Environmentally Friendly Products
Business Overview
23 ・・・・・・・・・・・・・・・・Performance Materials
25 ・・・・・・・・・・・・・・・・Agricultural Chemicals
27 ・・・・・・・・・・・・・・・・Pharmaceuticals
29 ・・・・・・・・・・・・・・・・Chemicals
31 ・・・・・・・・・・・・・・・・Advanced Materials & Planning
33 ・・・・・・・・・・・・・・・・Research and Development
CSR Management
35 ・・・・・・・・・・・・・・・・Promotion of CSR
36 ・・・・・・・・・・・・・・・・Corporate Governance
38 ・・・・・・・・・・・・・・・・Compliance
39 ・・・・・・・・・・・・・・・・Risk Management
39 ・・・・・・・・・・・・・・・・Information Disclosure
40 ・・・・・・・・・・・・・・・・Value Chain
Responsible Care (RC) Activities
41 ・・・・・・・・・・・・・・・・Responsible Care Management
41 ・・・・・・・・・・・・・・・Nissan Chemical RC Management System
42 ・・・・・・・・・・・・・・・Responsible Care Basic Policies
Selection of Material Issues in RC
43 ・・・・・・・・・・・・・・・Promotion of the RC Mid-Term Plan
RC Audits
45 ・・・・・・・・・・・・・・・・Environment Safety and Climate Change Strategy
45 ・・・・・・・・・・・・・・・Environmental Impact from Production Activities
46 ・・・・・・・・・・・・・・・Capital Investment for the Environment and Safety and its Economic Effects
47 ・・・・・・・・・・・・・・・Amount of Energy Consumption and Energy Consumption Rate
48 ・・・・・・・・・・・・・・・Reduction of Greenhouse Gas Emissions
49 ・・・・・・・・・・・・・・・Environmental Performance / Efficient Use of Water Resources
51 ・・・・・・・・・・・・・・・・Biodiversity Conservation
53 ・・・・・・・・・・・・・・・・Safety and Disaster Prevention, Occupational Safety and Health55 ・・・・・・・・・・・・・・・・Chemicals and Product Safety
Communication with Society
57 ・・・・・・・・・・・・・・・・Our Commitment to and Communication with Stakeholders
57 ・・・・・・・・・・・・・・・・Relationships with Customers
59 ・・・・・・・・・・・・・・・・Relationships with Investors
60 ・・・・・・・・・・・・・・・・Relationships with Society
61 ・・・・・・・・・・・・・・・・Relationships with Employees
65 ・・・・・・・・・・・・・・・・Financial Section
80 ・・・・・・・・・・・・・・・・Independent Auditor’s Report
Corporate Information
81 ・・・・・・・・・・・・・・・・Our Network
84 ・・・・・・・・・・・・・・・・Corporate History
85 ・・・・・・・・・・・・・・・・Corporate Profile / Directors
86 ・・・・・・・・・・・・・・・・Share Information
87 ・・・・・・・・・・・・・・・・Comparison with GRI G4 Sustainability Reporting Guidelines

Nissan Chemical Industries, Ltd. Annual Report 201702

Interview with the President
Could you talk us through your resultsfor FY2016 and forecast for FY2017?
In FY2016, we performed well in the Chemicals, and achieved growth in
the Performance Materials and Agricultural Chemicals, from Display
Materials and Fluralaner (veterinary pharmaceuticals), respectively. In the
Pharmaceuticals, domestic sales of active ingredients for theanti-cholesterol agent LIVALO® fell due to the availability of generic drugs.
Overall, however, we achieved sales of 180.3 billion yen, and operating
income of 31.4 billion yen, setting new records on both fronts. In terms offinancial indicators, we improved upon the previous year’s figures acrossthe board too, with an operating margin of 17.4%, return on equity (ROE) of
15.1%, and R&D expenses as a percentage of sales coming in at 8.9%.
Looking ahead to FY2017, we expect to see an increase in raw materials
and fuels prices and a sharp rise in fixed costs, given capital investment in
the future of our Performance Materials business. Thanks to growth inactive ingredients for veterinary pharmaceuticals, and increased sales of
Semiconductor and Display Materials, however, we are forecasting sales of
189 billion yen, above 8.7 billion yen from FY2016, and operating income of
32.5 billion yen, an increase of 1.1 billion yen.

Could you tell us about your business plans?

President & CEO

Kojiro Kinoshita

03

Nissan Chemical Industries, Ltd. Annual Report 2017

Last year, we launched a long-term business plan called “Progress2030”,
accompanied by a mid-term business plan called “Vista2021”.
As part of the process of formulating “Progress2030”, we set out adefinition for the group’s business model, as a “Future-Creating Enterprisethat responds to social needs with unique, innovative technologies.” Our
aim is to enhance corporate value hand-in-hand with the development ofsociety around us, while at the same time helping to deal with global
challenges such as advances in ICT, food shortages, increasing energy
demand, and environmental protection. We will realize this through fourdomains, “Information & Communication”, “Life Sciences”, “Environment &Energy” and “Chemicals & Affiliates” with five core technologies adding“Optical Control” to four of “Fine Organic Synthesis”, “Functional Polymer
Design”, “Ultrafine Particle Control” and “Biological Evaluation” that wehave developed.
With that in mind, we have also set out a corporate vision for 2030, as “acorporate group which provides new values for helping to enrich people’s
lives by integrating internal and external knowledge with facing globallychanging society,” and “a group of first-class pioneers who blaze a way tothe future with enthusiasm by trusts they have built and skills they havecultivated.”
We have also mapped out a basic strategy – “entering new fields by
evolving, deepening and expanding unique technologies” – and have set
ourselves the target of achieving sales of 300 billion yen and operating
income of 50 billion yen in FY2030.
“Vista2021” meanwhile outlines our ideal situation for 2021, focusing on“Information & Communication and Life Sciences are the driving force for
growth while Chemicals & Affiliates achieve a stable profit” and “establish
the foundation of Environment & Energy business and a position as aanother in India this year. The aim is to increase sales volumes by
establishing a stronger presence in the overseas agrochemicals market,
which is experiencing rapid growth at present. To secure the key humanresources to expand our operations globally in other segments too, in 2014
we introduced an overseas study program, which has provided experience
for a number of employees every year since then.

promising chemical manufacturer that keeps moving forward with a strong
presence.” During StageⅠ, the three years covered under the first half ofthe plan, we intend to focus on existing products to drive performance, withthe aim of achieving sales of 217 billion yen and operating income of 35
billion yen by the final year in FY2018.

What specific measures are you planning to take in the future?
What is your policy on shareholder returns?

To achieve our vision by 2030, we will need to “foray into new businessdomains”, “development of new products that match market trends”, and“enhancing R&D capability”. To generate new business, it is essential totrain resources who could be a connoisseur to find clue. In April 2016, weassigned resident members of staff to Santa Clara in the U.S., to havethem gather information on and evaluate the latest technologies, away frompractical work, with the aim of translating that into new business in the
future.
At the same time, it is important to maintain an accurate picture of trends
among existing customers too. We are working to develop new productsthat respond precisely to users’ needs, and that are always one step aheadof current trends.
All of this depends on R&D. We have always invested management
resources on R&D, and will continue to do so in the future, while also
working in closer cooperation with outside parties, as well as in-houseinitiatives, so that we can continue to refine and improve our technologies.
Accelerate overseas expansion is also essential for us to develop. We
established an overseas subsidiary in Brazil last year, and have established2016

In May last year, when we announced “Vista2021”, we set out a policy of
incrementally increasing our dividend payout ratio to 40% by FY2018, witha total payout ratio of 70%. While we maintained a dividend payout ratioaround the 30% mark up until FY2015, we have set ourselves a numericaltarget so that we can live up to the expectations of our shareholders.
Having previously repurchased shares on a flexible basis, we have now
announced our total payout ratio alongside dividends, clearly signaling that
we will continue to do so in the future too.

2018

Liquid crystal materials
for photo-alignment IPS
Semiconductor materials
Active ingredients forveterinary pharmaceuticals

2021

Oilfield materials

Optical materials

OLED materials

Biomedical materials

New insecticides

Battery materials
3,000

3,000
2,500

2,500
2,000

2,170
1,637

1,712

1,500
1,000

2030

222

253

1,769

286

1,803

314

500

1,890
350

300
200
100

500
0

500
400

400
325

600

2013

2014

2015

2016

2017

2018

2021

Operating income (100 million yen, right axis)

2030 (FY)0

Sales (100 million yen, left axis)
Nissan Chemical Industries, Ltd. Annual Report 201704

Interview with the President
Could you talk us through your resultsfor FY2016 and forecast for FY2017?
In FY2016, we performed well in the Chemicals, and achieved growth in
the Performance Materials and Agricultural Chemicals, from Display
Materials and Fluralaner (veterinary pharmaceuticals), respectively. In the
Pharmaceuticals, domestic sales of active ingredients for theanti-cholesterol agent LIVALO® fell due to the availability of generic drugs.
Overall, however, we achieved sales of 180.3 billion yen, and operating
income of 31.4 billion yen, setting new records on both fronts. In terms offinancial indicators, we improved upon the previous year’s figures acrossthe board too, with an operating margin of 17.4%, return on equity (ROE) of
15.1%, and R&D expenses as a percentage of sales coming in at 8.9%.
Looking ahead to FY2017, we expect to see an increase in raw materials
and fuels prices and a sharp rise in fixed costs, given capital investment in
the future of our Performance Materials business. Thanks to growth inactive ingredients for veterinary pharmaceuticals, and increased sales of
Semiconductor and Display Materials, however, we are forecasting sales of
189 billion yen, above 8.7 billion yen from FY2016, and operating income of
32.5 billion yen, an increase of 1.1 billion yen.

Could you tell us about your business plans?

President & CEO

Kojiro Kinoshita

03

Nissan Chemical Industries, Ltd. Annual Report 2017

Last year, we launched a long-term business plan called “Progress2030”,
accompanied by a mid-term business plan called “Vista2021”.
As part of the process of formulating “Progress2030”, we set out adefinition for the group’s business model, as a “Future-Creating Enterprisethat responds to social needs with unique, innovative technologies.” Our
aim is to enhance corporate value hand-in-hand with the development ofsociety around us, while at the same time helping to deal with global
challenges such as advances in ICT, food shortages, increasing energy
demand, and environmental protection. We will realize this through fourdomains, “Information & Communication”, “Life Sciences”, “Environment &Energy” and “Chemicals & Affiliates” with five core technologies adding“Optical Control” to four of “Fine Organic Synthesis”, “Functional Polymer
Design”, “Ultrafine Particle Control” and “Biological Evaluation” that wehave developed.
With that in mind, we have also set out a corporate vision for 2030, as “acorporate group which provides new values for helping to enrich people’s
lives by integrating internal and external knowledge with facing globallychanging society,” and “a group of first-class pioneers who blaze a way tothe future with enthusiasm by trusts they have built and skills they havecultivated.”
We have also mapped out a basic strategy – “entering new fields by
evolving, deepening and expanding unique technologies” – and have set
ourselves the target of achieving sales of 300 billion yen and operating
income of 50 billion yen in FY2030.
“Vista2021” meanwhile outlines our ideal situation for 2021, focusing on“Information & Communication and Life Sciences are the driving force for
growth while Chemicals & Affiliates achieve a stable profit” and “establish
the foundation of Environment & Energy business and a position as aanother in India this year. The aim is to increase sales volumes by
establishing a stronger presence in the overseas agrochemicals market,
which is experiencing rapid growth at present. To secure the key humanresources to expand our operations globally in other segments too, in 2014
we introduced an overseas study program, which has provided experience
for a number of employees every year since then.

promising chemical manufacturer that keeps moving forward with a strong
presence.” During StageⅠ, the three years covered under the first half ofthe plan, we intend to focus on existing products to drive performance, withthe aim of achieving sales of 217 billion yen and operating income of 35
billion yen by the final year in FY2018.

What specific measures are you planning to take in the future?
What is your policy on shareholder returns?

To achieve our vision by 2030, we will need to “foray into new businessdomains”, “development of new products that match market trends”, and“enhancing R&D capability”. To generate new business, it is essential totrain resources who could be a connoisseur to find clue. In April 2016, weassigned resident members of staff to Santa Clara in the U.S., to havethem gather information on and evaluate the latest technologies, away frompractical work, with the aim of translating that into new business in the
future.
At the same time, it is important to maintain an accurate picture of trends
among existing customers too. We are working to develop new productsthat respond precisely to users’ needs, and that are always one step aheadof current trends.
All of this depends on R&D. We have always invested management
resources on R&D, and will continue to do so in the future, while also
working in closer cooperation with outside parties, as well as in-houseinitiatives, so that we can continue to refine and improve our technologies.
Accelerate overseas expansion is also essential for us to develop. We
established an overseas subsidiary in Brazil last year, and have established2016

In May last year, when we announced “Vista2021”, we set out a policy of
incrementally increasing our dividend payout ratio to 40% by FY2018, witha total payout ratio of 70%. While we maintained a dividend payout ratioaround the 30% mark up until FY2015, we have set ourselves a numericaltarget so that we can live up to the expectations of our shareholders.
Having previously repurchased shares on a flexible basis, we have now
announced our total payout ratio alongside dividends, clearly signaling that
we will continue to do so in the future too.

2018

Liquid crystal materials
for photo-alignment IPS
Semiconductor materials
Active ingredients forveterinary pharmaceuticals

2021

Oilfield materials

Optical materials

OLED materials

Biomedical materials

New insecticides

Battery materials
3,000

3,000
2,500

2,500
2,000

2,170
1,637

1,712

1,500
1,000

2030

222

253

1,769

286

1,803

314

500

1,890
350

300
200
100

500
0

500
400

400
325

600

2013

2014

2015

2016

2017

2018

2021

Operating income (100 million yen, right axis)

2030 (FY)0

Sales (100 million yen, left axis)
Nissan Chemical Industries, Ltd. Annual Report 201704

Interview with the President

Corporate social responsibility is a key requirement for
all companies these days. What are your thoughts on CSR?
In recent years, ESG investment has become increasingly common, as amethod of investment with an emphasis on environmental, social andgovernance initiatives. The Sustainable Development Goals (SDGs)
meanwhile have been adopted with the aim of dealing with global issues,and the Paris Agreement has also come into effect. As a result of these andother developments, it is no longer enough for companies to focus on theirshort-term results. We need to be proactive and make a real effort in areas
such as addressing climate change, preserving the environment, ensuring
employee health and safety, and reinforcing compliance.
Our business activities are based on our corporate philosophy,“We contribute to society in harmony with the environment, based on our
excellent technologies, products and services.” We believe that putting that
into practice is CSR activities. In recognition of just how important that is,
we reviewed our Group Code of Conduct in 2016 and revised our BasicCSR Policy. In April this year, we established a CSR Committee and a CSR& Public Relations Office, in order to plan CSR strategy in line with social
trends, raise awareness within the group, and actively provide information
for stakeholders. We are also committed to promoting CSR activities
throughout the supply chain, including suppliers as well as our own
operations.

What is your position on compliance?
We regard compliance with legislation and social norms to be aprerequisite for our continued survival and development as a company. We
have in place a Compliance Committee that is chaired by myself andincludes outside experts among its members, and we have also set up a“consultation hotline system” to enable employees to report matters to theCompliance Committee directly. Although we have taken steps to prevent
reporting parties being disadvantaged in any way, we have only received
zero to two reports per year so far under this system. It therefore feels that
we need to improve the system and make more of an effort to raiseawareness.
In terms of corporate governance, we introduced an executive officer
system in 2014, and have reduced the number of directors on our board, sothat we can speed up decision-making, and clarify both managerial andoperational responsibilities. We also appoint outside directors in an effort toimprove management oversight capabilities, and are constantly working to
improve compliance, risk management and internal control systems, so that
we can ensure sound and transparent management.

Corporate Ethos Structure

MissionStatement(Ou

Mission Statement (Our Values)r Value

s)

Corpo
rate
Philosophy(C“Contribute to society with excellent technologies and products.”“Promote prosperity and welfare through concerted efforts to constantly develop new areas.”“Respect people who exhibit a sense of responsibility, originality and motivation.”

Corporate Philosophy (Corporate Purpose)

orporate PurpCorpo

rate Vision

We contribute to society in harmony with the environment,
based on our excellent technologies, products and services.

Corporate Vision
A corporate group that contributes to human survival and development.

05

Nissan Chemical Industries, Ltd. Annual Report 2017

ose)

Basic

CSR P

olicy

What sort of initiatives are you implementing withregard to the SDGs?
Given that the SDGs apply to issues facing advanced nations as well as
developing countries, we have an obligation as a company to do our bit tohelp find solutions. That is why we have been working recently to align our
corporate activities with the 17 goals set out under the SDGs. While we are
already working hard in areas such as technology and products,
responsible care, and social contribution activities, I think that we still needto do more and expand the scope of our activities even further. We arefocusing specifically on developing products such as agrochemicals thatare essential for growing high quality crops consistently and efficiently, cell
culture materials to assist with regenerative medicine, materials forpreventing biomolecule adhesion, and other biomedical materials.

What are your priorities as part of your CSR activities?
We promote responsible care activities as a group, to ensure that all of our
products are “environmentally friendly, healthy and safe” throughout theirlife cycle. Having recently earmarked “countermeasures to address climatechange” and “occupational health and safety” as material issues for our
responsible care activities, we intend to carry out initiatives in these areas
on a priority basis.
Countermeasures to address climate change are a top priority for the entire
world, as evidenced by the Paris Agreement coming into effect. Even
though we have reduced our greenhouse gas emissions by switching from
naphtha to natural gas as the fuel and feedstock for ammonia production,
we are nonetheless still working to achieve further reductions throughmeasures such as promoting energy saving technology and alternative
fuels. We also work hard to eliminate accidents, as one of our key
responsibilities as a company, and the cornerstone of our business activities.
While the number of accidents fell last year, accidents that require staff
time off from work are still occurring. A fire also broke out at the Onoda
Plant last year, although it was fortunately not too serious. We aredetermined to keep on focusing on occupational health and safety in the
future, so that we can eliminate industrial accidents completely.
In the interests of sustainable growth, we also recognize that we need tosecure and develop human resources. As well as establishing fairpersonnel systems, we are working to create more pleasant workplaces atthe same time.
We are committed to human resource development based on respect fora diverse range of human resources, personalities and ways of thinking. We
also have a number of systems in place to enable employees to strike abalance between their work and personal lives, and make every effort toprovide support to maintain mental and physical health. As a result of
initiatives such as these, we were recognized under the “2017 CertifiedHealth and Productivity Management Organization Recognition Program(White 500)”.

Finally, is there anything you would like to say to
the group’s stakeholders?
I hope you will take time to read through our Annual Report 2017, and that
it will help to give you a better understanding of Nissan Chemical
Industries.
This year is a momentous year for us as it marks our 130th anniversary.
Our aim is to be an excellent chemical company with a strong presence,capable of contributing to the survival and development of the entire humanrace. We intend to effectively implement measures in line with strategies
set out in our long-term and mid-term business plans, so that we can build
momentum for further growth and development, as we continue to evolve
into a Future-Creating Enterprise.
I hope we can rely on the understanding and support of all of our
stakeholders in the future.

Nissan Chemical Industries, Ltd. Annual Report 201706

Interview with the President

Corporate social responsibility is a key requirement for
all companies these days. What are your thoughts on CSR?
In recent years, ESG investment has become increasingly common, as amethod of investment with an emphasis on environmental, social andgovernance initiatives. The Sustainable Development Goals (SDGs)
meanwhile have been adopted with the aim of dealing with global issues,and the Paris Agreement has also come into effect. As a result of these andother developments, it is no longer enough for companies to focus on theirshort-term results. We need to be proactive and make a real effort in areas
such as addressing climate change, preserving the environment, ensuring
employee health and safety, and reinforcing compliance.
Our business activities are based on our corporate philosophy,“We contribute to society in harmony with the environment, based on our
excellent technologies, products and services.” We believe that putting that
into practice is CSR activities. In recognition of just how important that is,
we reviewed our Group Code of Conduct in 2016 and revised our BasicCSR Policy. In April this year, we established a CSR Committee and a CSR& Public Relations Office, in order to plan CSR strategy in line with social
trends, raise awareness within the group, and actively provide information
for stakeholders. We are also committed to promoting CSR activities
throughout the supply chain, including suppliers as well as our own
operations.

What is your position on compliance?
We regard compliance with legislation and social norms to be aprerequisite for our continued survival and development as a company. We
have in place a Compliance Committee that is chaired by myself andincludes outside experts among its members, and we have also set up a“consultation hotline system” to enable employees to report matters to theCompliance Committee directly. Although we have taken steps to prevent
reporting parties being disadvantaged in any way, we have only received
zero to two reports per year so far under this system. It therefore feels that
we need to improve the system and make more of an effort to raiseawareness.
In terms of corporate governance, we introduced an executive officer
system in 2014, and have reduced the number of directors on our board, sothat we can speed up decision-making, and clarify both managerial andoperational responsibilities. We also appoint outside directors in an effort toimprove management oversight capabilities, and are constantly working to
improve compliance, risk management and internal control systems, so that
we can ensure sound and transparent management.

Corporate Ethos Structure

MissionStatement(Ou

Mission Statement (Our Values)r Value

s)

Corpo
rate
Philosophy(C“Contribute to society with excellent technologies and products.”“Promote prosperity and welfare through concerted efforts to constantly develop new areas.”“Respect people who exhibit a sense of responsibility, originality and motivation.”

Corporate Philosophy (Corporate Purpose)

orporate PurpCorpo

rate Vision

We contribute to society in harmony with the environment,
based on our excellent technologies, products and services.

Corporate Vision
A corporate group that contributes to human survival and development.

05

Nissan Chemical Industries, Ltd. Annual Report 2017

ose)

Basic

CSR P

olicy

What sort of initiatives are you implementing withregard to the SDGs?
Given that the SDGs apply to issues facing advanced nations as well as
developing countries, we have an obligation as a company to do our bit tohelp find solutions. That is why we have been working recently to align our
corporate activities with the 17 goals set out under the SDGs. While we are
already working hard in areas such as technology and products,
responsible care, and social contribution activities, I think that we still needto do more and expand the scope of our activities even further. We arefocusing specifically on developing products such as agrochemicals thatare essential for growing high quality crops consistently and efficiently, cell
culture materials to assist with regenerative medicine, materials forpreventing biomolecule adhesion, and other biomedical materials.

What are your priorities as part of your CSR activities?
We promote responsible care activities as a group, to ensure that all of our
products are “environmentally friendly, healthy and safe” throughout theirlife cycle. Having recently earmarked “countermeasures to address climatechange” and “occupational health and safety” as material issues for our
responsible care activities, we intend to carry out initiatives in these areas
on a priority basis.
Countermeasures to address climate change are a top priority for the entire
world, as evidenced by the Paris Agreement coming into effect. Even
though we have reduced our greenhouse gas emissions by switching from
naphtha to natural gas as the fuel and feedstock for ammonia production,
we are nonetheless still working to achieve further reductions throughmeasures such as promoting energy saving technology and alternative
fuels. We also work hard to eliminate accidents, as one of our key
responsibilities as a company, and the cornerstone of our business activities.
While the number of accidents fell last year, accidents that require staff
time off from work are still occurring. A fire also broke out at the Onoda
Plant last year, although it was fortunately not too serious. We aredetermined to keep on focusing on occupational health and safety in the
future, so that we can eliminate industrial accidents completely.
In the interests of sustainable growth, we also recognize that we need tosecure and develop human resources. As well as establishing fairpersonnel systems, we are working to create more pleasant workplaces atthe same time.
We are committed to human resource development based on respect fora diverse range of human resources, personalities and ways of thinking. We
also have a number of systems in place to enable employees to strike abalance between their work and personal lives, and make every effort toprovide support to maintain mental and physical health. As a result of
initiatives such as these, we were recognized under the “2017 CertifiedHealth and Productivity Management Organization Recognition Program(White 500)”.

Finally, is there anything you would like to say to
the group’s stakeholders?
I hope you will take time to read through our Annual Report 2017, and that
it will help to give you a better understanding of Nissan Chemical
Industries.
This year is a momentous year for us as it marks our 130th anniversary.
Our aim is to be an excellent chemical company with a strong presence,capable of contributing to the survival and development of the entire humanrace. We intend to effectively implement measures in line with strategies
set out in our long-term and mid-term business plans, so that we can build
momentum for further growth and development, as we continue to evolve
into a Future-Creating Enterprise.
I hope we can rely on the understanding and support of all of our
stakeholders in the future.

Nissan Chemical Industries, Ltd. Annual Report 201706

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

Social Issues and Changes

Our Objectives

Our Business Activities

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

Business Domains

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

ICT Evolution

Fine Organic
Synthesis

Information &Communication

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

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

Food Shortages
Enhance Well-being▲Flexible display

Life Sciences

Chemicals &Affiliates

Ultrafine Particle
Control

Advanced Medical Care

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

▲Dialyzer

Biological Evaluation

Increasing Energy Demand
Reducing Environmental Impact

07

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

Environment &EnergyOptical Control

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

Global Environmental Protection

Strengthening responsible care activities

Diversity

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

Sensible Business Activities

Strengthening corporate governance and ensuring the appropriate disclosure

Nissan Chemical Industries, Ltd. Annual Report 2017

▲Photovoltaic generation

Nissan Chemical Industries, Ltd. Annual Report 201708

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

Social Issues and Changes

Our Objectives

Our Business Activities

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

Business Domains

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

ICT Evolution

Fine Organic
Synthesis

Information &Communication

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

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

Food Shortages
Enhance Well-being▲Flexible display

Life Sciences

Chemicals &Affiliates

Ultrafine Particle
Control

Advanced Medical Care

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

▲Dialyzer

Biological Evaluation

Increasing Energy Demand
Reducing Environmental Impact

07

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

Environment &EnergyOptical Control

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

Global Environmental Protection

Strengthening responsible care activities

Diversity

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

Sensible Business Activities

Strengthening corporate governance and ensuring the appropriate disclosure

Nissan Chemical Industries, Ltd. Annual Report 2017

▲Photovoltaic generation

Nissan Chemical Industries, Ltd. Annual Report 201708

SDGs and Nissan Chemical Initiatives
Contributing to the SDGs through our Corporate Activities“The Sustainable Development Goals (SDGs)” were set out at a “UN Sustainable Development Summit” in September 2015. They
consist of 17 goals and 169 targets that need to be addressed globally by the year 2030 in order to safeguard the human race and theplanet, as we continue to work towards enriching all of our lives.
Based on the SDGs, UN member countries are required to make an effort to achieve goals in areas such as poverty, hunger,
energy, climate change and peace by the year 2030. Companies are also expected to make a contribution.

Contributing through technology/products

Contributing
through Contributing
Advanced responsible through
Performance Agricultural Pharma- Chemicals Materials& care activities social activities
Materials Chemicals ceautials
Planning

We supply and develop agrochemicals that help to deal with foodproblems.

●

(P25)
●

●

(P27)

●

(P31)

(P60)
●

(P60)
●

(P61)
●

●

(P29)
●

(P23)

(P31)

●

(P47)
●

(P61)
●

●

●

(P23) (P25) (P27)●●(P29) (P31)

●

●

(P29)
●

●

(P41)

(P49)
●

●

(P23)

(P31)

(P55)

●

●

●

(P23)

(P31)

(P48)

We make every effort to create pleasant workplaces, based on respect for adiverse range of human resources, personalities and ways of thinking.
We supply products that help to maintain sanitary water.
We also make effective use of water resources.

(P50)
●

We are conducting research into pharmaceuticals and medical materials to
help people keep their health all over the world. We also carry out welfare
fund activities as part of our efforts to contribute to local communities.
We provide support for next generation education through initiatives such as
off-site classes and “Riko-challe” (support choosing STEM fields). We also present
awards to researchers who have achieved unique and outstanding results.

We develop materials to improve energy efficiency, and materials
for purposes such as secondary batteries and energy harvesting.
We are also constantly working to reduce energy consumption.
We conduct fair personnel evaluations, operate a range of training
schemes for human resource development, and have introduced anumber of systems to ensure a work-life balance.
We promote innovation through research and development.

We supply products and materials that help to reduce environmental
impact.
We are committed to reduce environmental impact such as minimize
waste, and conduct both human and environmental risk assessments
covering the entire life cycle of our products.
We develop materials that improve energy efficiency and help to makeeffective use of unused energy sources, and are working to reducegreenhouse gas emissions.

●

1 No poverty
2 Zero hunger
3 Good health and well-being
4 Quality education
5 Gender equality
6 Clean water and sanitation

09

Nissan Chemical Industries, Ltd. Annual Report 2017

7 Affordable and clean energy
8 Decent work and economic growth
9 Industry, innovation and infrastructure
10 Reduced inequalities
11 Sustainable cities and communities
12 Responsible consumption and production

13 Climate action
14 Life below water
15 Life on land
16 Peace, justices and strong institutions
17 Partnerships for the goals

(P51)
●

We carry out biodiversity conservation activities in the vicinity ofour plants, laboratories and other facilities.

(P51)
We have set out compliance requirements that include “preventing
relations with antisocial forces”, “prohibition of excessive entertainmentand gift-giving”, and “prohibition of bribery of foreign public officials”.

Nissan Chemical Industries, Ltd. Annual Report 201710

SDGs and Nissan Chemical Initiatives
Contributing to the SDGs through our Corporate Activities“The Sustainable Development Goals (SDGs)” were set out at a “UN Sustainable Development Summit” in September 2015. They
consist of 17 goals and 169 targets that need to be addressed globally by the year 2030 in order to safeguard the human race and theplanet, as we continue to work towards enriching all of our lives.
Based on the SDGs, UN member countries are required to make an effort to achieve goals in areas such as poverty, hunger,
energy, climate change and peace by the year 2030. Companies are also expected to make a contribution.

Contributing through technology/products

Contributing
through Contributing
Advanced responsible through
Performance Agricultural Pharma- Chemicals Materials& care activities social activities
Materials Chemicals ceautials
Planning

We supply and develop agrochemicals that help to deal with foodproblems.

●

(P25)
●

●

(P27)

●

(P31)

(P60)
●

(P60)
●

(P61)
●

●

(P29)
●

(P23)

(P31)

●

(P47)
●

(P61)
●

●

●

(P23) (P25) (P27)●●(P29) (P31)

●

●

(P29)
●

●

(P41)

(P49)
●

●

(P23)

(P31)

(P55)

●

●

●

(P23)

(P31)

(P48)

We make every effort to create pleasant workplaces, based on respect for adiverse range of human resources, personalities and ways of thinking.
We supply products that help to maintain sanitary water.
We also make effective use of water resources.

(P50)
●

We are conducting research into pharmaceuticals and medical materials to
help people keep their health all over the world. We also carry out welfare
fund activities as part of our efforts to contribute to local communities.
We provide support for next generation education through initiatives such as
off-site classes and “Riko-challe” (support choosing STEM fields). We also present
awards to researchers who have achieved unique and outstanding results.

We develop materials to improve energy efficiency, and materials
for purposes such as secondary batteries and energy harvesting.
We are also constantly working to reduce energy consumption.
We conduct fair personnel evaluations, operate a range of training
schemes for human resource development, and have introduced anumber of systems to ensure a work-life balance.
We promote innovation through research and development.

We supply products and materials that help to reduce environmental
impact.
We are committed to reduce environmental impact such as minimize
waste, and conduct both human and environmental risk assessments
covering the entire life cycle of our products.
We develop materials that improve energy efficiency and help to makeeffective use of unused energy sources, and are working to reducegreenhouse gas emissions.

●

1 No poverty
2 Zero hunger
3 Good health and well-being
4 Quality education
5 Gender equality
6 Clean water and sanitation

09

Nissan Chemical Industries, Ltd. Annual Report 2017

7 Affordable and clean energy
8 Decent work and economic growth
9 Industry, innovation and infrastructure
10 Reduced inequalities
11 Sustainable cities and communities
12 Responsible consumption and production

13 Climate action
14 Life below water
15 Life on land
16 Peace, justices and strong institutions
17 Partnerships for the goals

(P51)
●

We carry out biodiversity conservation activities in the vicinity ofour plants, laboratories and other facilities.

(P51)
We have set out compliance requirements that include “preventing
relations with antisocial forces”, “prohibition of excessive entertainmentand gift-giving”, and “prohibition of bribery of foreign public officials”.

Nissan Chemical Industries, Ltd. Annual Report 201710

“Progress2030” Long-Term Business Plan and “Vista2021” Mid-Term Business Plan

1. Outline of “Progress2030” Long-Term Business Plan

2. Outline of “Vista2021” Mid-Term Business Plan
―A six-year plan starting in FY2016―

1 The Corporate’s 2030 Vision“A corporate group which provides new values for helping to enrich people’s lives by integrating internal and external knowledge withfacing globally-changing society”“A group of first-class pioneers who blaze a way to the future with enthusiasm by trusts they have built and skills they have cultivated”“Entering new fields by evolving, deepening and expanding unique technologies”
1) Information & Communication (display, semiconductor, inorganic, optical and sensor materials)
For display, semiconductor and inorganic materials, we will provide products based on technological innovations in the market.
We will also create sensor materials by using our existing technologies and optical materials by establishing optical control technologies.
2) Life Sciences (agrochemicals, veterinary pharmaceuticals, pharmaceuticals and biomedical materials)
We will strengthen the pipeline for agrochemicals and pharmaceuticals, also develop new veterinary pharmaceuticals.
In addition, we will create biomedical materials that contribute to advanced medical care using accumulated technologies for biological evaluation and material design.
3) Environment & Energy (batteries, energy harvesting and thermal control materials)
We will establish a device evaluation technology then supply battery materials and materials that contribute to efficient use of energy.
4) Chemicals & Affiliates (basic chemicals, fine chemicals and affiliates)
We will continue to carry out R&D in relation to TEPIC® -epoxy compound for LED sealants, solder resist, painting- and launch new high-performance compounds.

Net sales (left axis)

Operating income (right axis) (Core Technologies

2,500(100 million yen)600

(16.0%)

2,500

OpticalControlChemicals & Affiliates
50 billion yen
UltrafineParticle
Control(16.7%)

3,000

50 billion yen

Functional
Polymer
Design)Operating margin

3,000(100 million yen)

Environment & Energy
環境エネルギー

2,000

500
1,769
(16.2%)

500

Net sales (left axis)

Operating income (right axis)

2,000
1,500

2,170

1,769

Chemicals

400
310

271

224

1,000

500

400

350

286

200

150

0

0

2018

2021

(FY)

Nissan Chemical Industries, Ltd. Annual Report 2017

Agricultural Chemicals

Pharmaceuticals

20

20

286

120

154

39
▲1

40

2015

2018

400
167

129

108

0

24

350 7

Others*2

184

▲20

45
2021

(FY)

*

400

300

1,000

200

500

100

2015

2021

4

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

500

538
450

427*4

2030

0

288*

5

Dividend payout ratio

200

Total payout ratio

100

(%)
R&D Expenses

Capex*3 Approval basis *4 Production commencement basis

60

20
0

Gradually increase to
40% in FY2018
Maintain 70%
Dividend payout ratio

80

40

(FY)

Maintain above 15%
Maintain above 14%
Above 8%

Shareholder Return

3

300

0

Financial Indicators (FY2018 target)
Operating margin
ROE
R&D expenses/sales

FY2016-2018 total

400

286

0

3 R&D Expenses, Capex

Full details of “Progress2030” and “Vista2021” are available online.
http://www.nissanchem.co.jp/eng/news_relese/release/en2016_05_16.pdf

11

350
250

100

Performance Materials

450

300

500
2015

2. Operating income by segment [100 million yen]

Net income (right axis)

2,500

2,500

600
400

1,500
Biological
Evaluation

1. Sales / Operating income / Net income*1 [100 million yen]

2 Others: trading, others and adjustment
1 Net income attributable to owners of parent
Naphtha (¥/kL): FY2015 42,800 FY2016 35,400 FY2017 and onward 51,100 FX rate (¥/$): FY2015 1H 122 2H 118 FY2016 and onward 115

Net sales (FY2030)
Life Sciences
100 billion yen

2 Financial Target*

3 Business Domains / Business Size

Fine
Organic
Synthesis

1 Ideal Situation of 2021
“Information & Communication and Life Sciences are the driving force for growth while Chemicals & Affiliates achieve a stable profit.”“Establish the foundation of Environment & Energy business and a position as a promising chemical manufacturer that keeps moving forward with a strong presence.”

2 Basic Strategies

Information & Communication
100 billion yen

The plan is divided into the first three years (FY2016 to 2018) as StageⅠand the second three years (FY2019 to 2021) as Stage Ⅱ.

37
37

2011

67

59

64

71

Total payout ratio

70
40

31

29

32

31

2012

2013

2014

2015

2018
(FY)

Nissan Chemical Industries, Ltd. Annual Report 201712

“Progress2030” Long-Term Business Plan and “Vista2021” Mid-Term Business Plan

1. Outline of “Progress2030” Long-Term Business Plan

2. Outline of “Vista2021” Mid-Term Business Plan
―A six-year plan starting in FY2016―

1 The Corporate’s 2030 Vision“A corporate group which provides new values for helping to enrich people’s lives by integrating internal and external knowledge withfacing globally-changing society”“A group of first-class pioneers who blaze a way to the future with enthusiasm by trusts they have built and skills they have cultivated”“Entering new fields by evolving, deepening and expanding unique technologies”
1) Information & Communication (display, semiconductor, inorganic, optical and sensor materials)
For display, semiconductor and inorganic materials, we will provide products based on technological innovations in the market.
We will also create sensor materials by using our existing technologies and optical materials by establishing optical control technologies.
2) Life Sciences (agrochemicals, veterinary pharmaceuticals, pharmaceuticals and biomedical materials)
We will strengthen the pipeline for agrochemicals and pharmaceuticals, also develop new veterinary pharmaceuticals.
In addition, we will create biomedical materials that contribute to advanced medical care using accumulated technologies for biological evaluation and material design.
3) Environment & Energy (batteries, energy harvesting and thermal control materials)
We will establish a device evaluation technology then supply battery materials and materials that contribute to efficient use of energy.
4) Chemicals & Affiliates (basic chemicals, fine chemicals and affiliates)
We will continue to carry out R&D in relation to TEPIC® -epoxy compound for LED sealants, solder resist, painting- and launch new high-performance compounds.

Net sales (left axis)

Operating income (right axis) (Core Technologies

2,500(100 million yen)600

(16.0%)

2,500

OpticalControlChemicals & Affiliates
50 billion yen
UltrafineParticle
Control(16.7%)

3,000

50 billion yen

Functional
Polymer
Design)Operating margin

3,000(100 million yen)

Environment & Energy
環境エネルギー

2,000

500
1,769
(16.2%)

500

Net sales (left axis)

Operating income (right axis)

2,000
1,500

2,170

1,769

Chemicals

400
310

271

224

1,000

500

400

350

286

200

150

0

0

2018

2021

(FY)

Nissan Chemical Industries, Ltd. Annual Report 2017

Agricultural Chemicals

Pharmaceuticals

20

20

286

120

154

39
▲1

40

2015

2018

400
167

129

108

0

24

350 7

Others*2

184

▲20

45
2021

(FY)

*

400

300

1,000

200

500

100

2015

2021

4

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

500

538
450

427*4

2030

0

288*

5

Dividend payout ratio

200

Total payout ratio

100

(%)
R&D Expenses

Capex*3 Approval basis *4 Production commencement basis

60

20
0

Gradually increase to
40% in FY2018
Maintain 70%
Dividend payout ratio

80

40

(FY)

Maintain above 15%
Maintain above 14%
Above 8%

Shareholder Return

3

300

0

Financial Indicators (FY2018 target)
Operating margin
ROE
R&D expenses/sales

FY2016-2018 total

400

286

0

3 R&D Expenses, Capex

Full details of “Progress2030” and “Vista2021” are available online.
http://www.nissanchem.co.jp/eng/news_relese/release/en2016_05_16.pdf

11

350
250

100

Performance Materials

450

300

500
2015

2. Operating income by segment [100 million yen]

Net income (right axis)

2,500

2,500

600
400

1,500
Biological
Evaluation

1. Sales / Operating income / Net income*1 [100 million yen]

2 Others: trading, others and adjustment
1 Net income attributable to owners of parent
Naphtha (¥/kL): FY2015 42,800 FY2016 35,400 FY2017 and onward 51,100 FX rate (¥/$): FY2015 1H 122 2H 118 FY2016 and onward 115

Net sales (FY2030)
Life Sciences
100 billion yen

2 Financial Target*

3 Business Domains / Business Size

Fine
Organic
Synthesis

1 Ideal Situation of 2021
“Information & Communication and Life Sciences are the driving force for growth while Chemicals & Affiliates achieve a stable profit.”“Establish the foundation of Environment & Energy business and a position as a promising chemical manufacturer that keeps moving forward with a strong presence.”

2 Basic Strategies

Information & Communication
100 billion yen

The plan is divided into the first three years (FY2016 to 2018) as StageⅠand the second three years (FY2019 to 2021) as Stage Ⅱ.

37
37

2011

67

59

64

71

Total payout ratio

70
40

31

29

32

31

2012

2013

2014

2015

2018
(FY)

Nissan Chemical Industries, Ltd. Annual Report 201712

“Progress2030” Long-Term Business Plan and “Vista2021” Mid-Term Business Plan

3-1. Outline of “Vista2021 StageⅠ”

3-2. Progress with “Vista2021 StageⅠ”

1 Basic strategies

1 Results for FY2016 and Forecast for FY2017

1) Maximizing the profit from existing products2) Improving marketing power
3) Enhancing R&D capability

Boosting the market shares of products for growing fields, driving overseas business expansion, and reducing costs
Identifying market needs by moving closer to customers and obtaining information about advanced materials
Improving existing technologies, establishing new technologies, and accelerating the development of new products

Increased sales(FY2018 vs. FY2015)

1,500

286

AdBlue®

High purity ammonia

TEPIC

®

Performance Materials

VA

Display Materials
Semiconductor Materials 3D packaging materials (TMAT), new lithography materials

OLED materials
Light control film materials

Sensor materials
HYPERTECH®

Agricultural Chemicals

New insecticides (in-house)

New products (acquired)

LIVALO® active ingredients (overseas)
New drugs / Expanded pipeline

271

252

Operating margin

17.4%

17.2%

ROE

15.1%

15.0%

R&D expenses / sales

8.9%

9.1%

300
200

500

100

3. Shareholder Return

2015

2016

2017 (forecast)2018 (target)

0(FY)

Results for FY2016 Forecast for FY2017
Dividend payout ratio

33.1%

35.8%

Total payout ratio

70.4%

Maintained at 70%

2 Progress with Basic Strategies
ROUNDUP®

ALTAIR®

Fluralaner

Overseas

Finetech®
sales based on forecasts at the time of formulating our new mid-term business plan
* Increased
ARC is a registered trademark of Brewer Science, Inc.
®

AdBlue® is a registered trademark of Verband der Automobilindustrie.

3 Initiatives for Stage Ⅱ and Onward
1) Information & Communication
i. Developing heat-resistant lenses, light control film and optical interconnect materials

ii. Creating next-generation display and semiconductor materials2) Life Sciences
i. Developing NC-515 (insecticide), new fungicides and herbicides for paddy rice
ii. Jointly developing NIP-022 (thrombocytopenia treatment agent) and promoting the research collaboration of antifungal drugs
iii. Achieving global standardization of cell culture materials
3) Environment & Energy
i. Developing materials for secondary batteries and fuel cells ii. Creating energy harvesting materials4) R&Di. Acquiring seeds in the field of biomedical materials ii. Introducing cutting-edge technologies through open innovations
iii. Developing new business fields by strengthening and fusion of core technologies

Nissan Chemical Industries, Ltd. Annual Report 2017

240

400

350

325

314
224

1,890

1,000

0

Oilfield materials

New Materials

1,803

Results for FY2016 Forecast for FY2017
500

Photo-alignment IPS

ARC® (bottom anti-reflective coating)Multi-layer semiconductor process materials

Inorganic Materials

Pharmaceuticals

Over three billion yen

Net income (right axis)

2,170

2 Sources of Growth
One to three billion yen

Operating income (right axis)

2,500

1,769

Chemicals

13

Net sales (left axis)

2,000

Less than one billion yen

2. Financial Indicators

1. Sales / Operating income / Net income [100 million yen]

1) Maximizing the profit from existing products
i. Increasing sales of Fluralaner (active ingredient for BRAVECTO® veterinary pharmaceuticals)
In addition to chewable tablets (oral) for dogs, which are already on sale in over 80 different countries,
last year we also launched spot on products (transdermal) for cats in Europe and the U.S. We are planningto launch a spot on product for dogs in Europe and the U.S. in the future too.

* BRAVECTO is a registered trademark of Intervet International B.V.
®

▲BRAVECTO® spot on products
ii. Launching ROUNDUP® MAXLOAD ALⅡ
We launched a fast acting product in the ROUNDUP® MAXLOAD AL series for general household use in June of last year. Sales have been strong since then.
iii. Growth in SUNEVER® (LCD alignment coating)
We have increased our share among existing customers and secured new orders for small and medium-sized products, including smartphones. There isgenuine demand for television screens too.

2) Improving marketing poweri. Opening the Nissan Chemical America Santa Clara Office (April 2016)
We are aiming to “secure new technologies and materials”, and “develop human resources with a discerning eye, as the key to launching new businesses
and creating new products.”
ii. Establishing Nissan Chemical Do Brasil (June 2016)
We are aiming to “identify needs and strengthen sales capabilities in the world’s largest agrochemicals market, and to improve technical services.”3) Enhancing R&D capabilities
i. Completing plans to improve Biological Research Laboratories (March 2017)
We are accelerating research in the interests of creating new products, as a life science research facility
handling operations such as evaluating the efficacy and safety of agrochemicals, pharmaceuticals andmedical materials.
ii. “Collaborating on creating biomedical materials”
As part of our comprehensive collaboration with Kyushu University, we have started research intomaterials for regenerative medicine and transdermal DDS materials.

▲Laboratory at Kyushu University

Nissan Chemical Industries, Ltd. Annual Report 201714

“Progress2030” Long-Term Business Plan and “Vista2021” Mid-Term Business Plan

3-1. Outline of “Vista2021 StageⅠ”

3-2. Progress with “Vista2021 StageⅠ”

1 Basic strategies

1 Results for FY2016 and Forecast for FY2017

1) Maximizing the profit from existing products2) Improving marketing power
3) Enhancing R&D capability

Boosting the market shares of products for growing fields, driving overseas business expansion, and reducing costs
Identifying market needs by moving closer to customers and obtaining information about advanced materials
Improving existing technologies, establishing new technologies, and accelerating the development of new products

Increased sales(FY2018 vs. FY2015)

1,500

286

AdBlue®

High purity ammonia

TEPIC

®

Performance Materials

VA

Display Materials
Semiconductor Materials 3D packaging materials (TMAT), new lithography materials

OLED materials
Light control film materials

Sensor materials
HYPERTECH®

Agricultural Chemicals

New insecticides (in-house)

New products (acquired)

LIVALO® active ingredients (overseas)
New drugs / Expanded pipeline

271

252

Operating margin

17.4%

17.2%

ROE

15.1%

15.0%

R&D expenses / sales

8.9%

9.1%

300
200

500

100

3. Shareholder Return

2015

2016

2017 (forecast)2018 (target)

0(FY)

Results for FY2016 Forecast for FY2017
Dividend payout ratio

33.1%

35.8%

Total payout ratio

70.4%

Maintained at 70%

2 Progress with Basic Strategies
ROUNDUP®

ALTAIR®

Fluralaner

Overseas

Finetech®
sales based on forecasts at the time of formulating our new mid-term business plan
* Increased
ARC is a registered trademark of Brewer Science, Inc.
®

AdBlue® is a registered trademark of Verband der Automobilindustrie.

3 Initiatives for Stage Ⅱ and Onward
1) Information & Communication
i. Developing heat-resistant lenses, light control film and optical interconnect materials

ii. Creating next-generation display and semiconductor materials2) Life Sciences
i. Developing NC-515 (insecticide), new fungicides and herbicides for paddy rice
ii. Jointly developing NIP-022 (thrombocytopenia treatment agent) and promoting the research collaboration of antifungal drugs
iii. Achieving global standardization of cell culture materials
3) Environment & Energy
i. Developing materials for secondary batteries and fuel cells ii. Creating energy harvesting materials4) R&Di. Acquiring seeds in the field of biomedical materials ii. Introducing cutting-edge technologies through open innovations
iii. Developing new business fields by strengthening and fusion of core technologies

Nissan Chemical Industries, Ltd. Annual Report 2017

240

400

350

325

314
224

1,890

1,000

0

Oilfield materials

New Materials

1,803

Results for FY2016 Forecast for FY2017
500

Photo-alignment IPS

ARC® (bottom anti-reflective coating)Multi-layer semiconductor process materials

Inorganic Materials

Pharmaceuticals

Over three billion yen

Net income (right axis)

2,170

2 Sources of Growth
One to three billion yen

Operating income (right axis)

2,500

1,769

Chemicals

13

Net sales (left axis)

2,000

Less than one billion yen

2. Financial Indicators

1. Sales / Operating income / Net income [100 million yen]

1) Maximizing the profit from existing products
i. Increasing sales of Fluralaner (active ingredient for BRAVECTO® veterinary pharmaceuticals)
In addition to chewable tablets (oral) for dogs, which are already on sale in over 80 different countries,
last year we also launched spot on products (transdermal) for cats in Europe and the U.S. We are planningto launch a spot on product for dogs in Europe and the U.S. in the future too.

* BRAVECTO is a registered trademark of Intervet International B.V.
®

▲BRAVECTO® spot on products
ii. Launching ROUNDUP® MAXLOAD ALⅡ
We launched a fast acting product in the ROUNDUP® MAXLOAD AL series for general household use in June of last year. Sales have been strong since then.
iii. Growth in SUNEVER® (LCD alignment coating)
We have increased our share among existing customers and secured new orders for small and medium-sized products, including smartphones. There isgenuine demand for television screens too.

2) Improving marketing poweri. Opening the Nissan Chemical America Santa Clara Office (April 2016)
We are aiming to “secure new technologies and materials”, and “develop human resources with a discerning eye, as the key to launching new businesses
and creating new products.”
ii. Establishing Nissan Chemical Do Brasil (June 2016)
We are aiming to “identify needs and strengthen sales capabilities in the world’s largest agrochemicals market, and to improve technical services.”3) Enhancing R&D capabilities
i. Completing plans to improve Biological Research Laboratories (March 2017)
We are accelerating research in the interests of creating new products, as a life science research facility
handling operations such as evaluating the efficacy and safety of agrochemicals, pharmaceuticals andmedical materials.
ii. “Collaborating on creating biomedical materials”
As part of our comprehensive collaboration with Kyushu University, we have started research intomaterials for regenerative medicine and transdermal DDS materials.

▲Laboratory at Kyushu University

Nissan Chemical Industries, Ltd. Annual Report 201714

Financial Highlights
Operating income / Operating margin(100 million yen)
300

200

14.6

248

12.8

12.9

10.9
198

2007

2008

2009

195

222

253

16.2

314

286

2010

Financial Data (consolidated)
(%)
15.0

10.0

155

100

0

13.6

10.4
192

174

12.7

14.8

17.4

5.0

2011

2012

2013

2014

2015

Operating income (left axis)

2016

0.0
(FY)

150

12.6
10.3

11.9

11.4

9.5

155
128

100

15.1

14.6

200

130

101

12.7
167

139

240

224

10.0

110

5.0

50
0

2007

2008

2009

2010

(%)
15.0

12.7
182

2011

2012

2013

2014

2015

2016

Net income attributable to owners of parent (left axis)

0.0
(FY)

ROE (right axis)

Total amount of dividend / Share repurchase / Total payout ratio
118(100 million yen)

(%)

200
150

56

100
50
0

67

59

53
80

50

37

32
28

50

50

36

38

41

41

41

43

49

2007

2008

2009

2010

2011

2012

2013

Total amount of dividend (left axis)

64
60
57
2014

71

70

90

90

68

79

2015

2016

Share repurchase (left axis)

100

7.4

8.2

9.2

8.9

8.7

100

50

0

125

137

131

126

136

137

142

8.7

150

FY2016

Sales

100 million yen

1,538

1,637

1,712

1,769

1,803

Operating income

100 million yen

195

222

253

286

314

Ordinary income

100 million yen

205

237

264

295

317

Net income attributable to owners of parent

100 million yen

139

167

182

224

240

EBITDA*1

100 million yen

290

308

338

383

403

EPS*2

Yen / Share

83.74

102.11113.99143.37156.97

Dividend

Yen / Share

26

30

36

44

52

%

31.0

29.4

31.6

30.7

33.1

Total assets

100 million yen

1,992

2,080

2,239

2,282

2,317

Net assets

100 million yen

1,267

1,378

1,513

1,569

1,637

Cash

100 million yen

319

308

313

353

357

Liabilities with interest

100 million yen

381

361

351

331

308

%

63.0

65.7

66.9

68.1

69.9

Capex

100 million yen

81

88

98

102

143

Depreciation

100 million yen

95

85

85

97

89

Dividend payout ratio

Equity ratio*1 Operating income + depreciation *2 Net income attributable to owners of parent / issued shares

0(FY)

Sales according to region (100 million yen)

2007

2008

2009

2010

2011

2012

2013

2014

Nissan Chemical Industries, Ltd. Annual Report 2017

Sales according to segment (100 million yen)

Operating income according to segment (100 million yen)
Others*
2

8.9

158

8.9

10.0

161
5.0

Europe,USA, etc.
224
Other Asian
countries
393
South Korea
155

R&D expenses (left axis)

15

FY2015FY2016 Sales and Operating Income

(%)

8.8

FY2014

Total payout ratio (right axis)(100 million yen)

8.6

FY201350

R&D expenses / Percentage of sales
150

FY2012

Operating margin (right axis)

Net income attributable to owners of parent / ROE(100 million yen) 15.6

Unit

2015

2016

Japan
1,031

Others*327
Pharmaceuticals
80
Agricultural
Chemicals
520

Chemicals
348

Performance
Materials
528

Pharmaceuticals
17

Agricultural
Chemicals
132

Chemicals
38

Performance
Materials
125

0.0
(FY)

R&D expenses / sales (right axis)* Others: trading, others and adjustment
Nissan Chemical Industries, Ltd. Annual Report 201716

Financial Highlights
Operating income / Operating margin(100 million yen)
300

200

14.6

248

12.8

12.9

10.9
198

2007

2008

2009

195

222

253

16.2

314

286

2010

Financial Data (consolidated)
(%)
15.0

10.0

155

100

0

13.6

10.4
192

174

12.7

14.8

17.4

5.0

2011

2012

2013

2014

2015

Operating income (left axis)

2016

0.0
(FY)

150

12.6
10.3

11.9

11.4

9.5

155
128

100

15.1

14.6

200

130

101

12.7
167

139

240

224

10.0

110

5.0

50
0

2007

2008

2009

2010

(%)
15.0

12.7
182

2011

2012

2013

2014

2015

2016

Net income attributable to owners of parent (left axis)

0.0
(FY)

ROE (right axis)

Total amount of dividend / Share repurchase / Total payout ratio
118(100 million yen)

(%)

200
150

56

100
50
0

67

59

53
80

50

37

32
28

50

50

36

38

41

41

41

43

49

2007

2008

2009

2010

2011

2012

2013

Total amount of dividend (left axis)

64
60
57
2014

71

70

90

90

68

79

2015

2016

Share repurchase (left axis)

100

7.4

8.2

9.2

8.9

8.7

100

50

0

125

137

131

126

136

137

142

8.7

150

FY2016

Sales

100 million yen

1,538

1,637

1,712

1,769

1,803

Operating income

100 million yen

195

222

253

286

314

Ordinary income

100 million yen

205

237

264

295

317

Net income attributable to owners of parent

100 million yen

139

167

182

224

240

EBITDA*1

100 million yen

290

308

338

383

403

EPS*2

Yen / Share

83.74

102.11113.99143.37156.97

Dividend

Yen / Share

26

30

36

44

52

%

31.0

29.4

31.6

30.7

33.1

Total assets

100 million yen

1,992

2,080

2,239

2,282

2,317

Net assets

100 million yen

1,267

1,378

1,513

1,569

1,637

Cash

100 million yen

319

308

313

353

357

Liabilities with interest

100 million yen

381

361

351

331

308

%

63.0

65.7

66.9

68.1

69.9

Capex

100 million yen

81

88

98

102

143

Depreciation

100 million yen

95

85

85

97

89

Dividend payout ratio

Equity ratio*1 Operating income + depreciation *2 Net income attributable to owners of parent / issued shares

0(FY)

Sales according to region (100 million yen)

2007

2008

2009

2010

2011

2012

2013

2014

Nissan Chemical Industries, Ltd. Annual Report 2017

Sales according to segment (100 million yen)

Operating income according to segment (100 million yen)
Others*
2

8.9

158

8.9

10.0

161
5.0

Europe,USA, etc.
224
Other Asian
countries
393
South Korea
155

R&D expenses (left axis)

15

FY2015FY2016 Sales and Operating Income

(%)

8.8

FY2014

Total payout ratio (right axis)(100 million yen)

8.6

FY201350

R&D expenses / Percentage of sales
150

FY2012

Operating margin (right axis)

Net income attributable to owners of parent / ROE(100 million yen) 15.6

Unit

2015

2016

Japan
1,031

Others*327
Pharmaceuticals
80
Agricultural
Chemicals
520

Chemicals
348

Performance
Materials
528

Pharmaceuticals
17

Agricultural
Chemicals
132

Chemicals
38

Performance
Materials
125

0.0
(FY)

R&D expenses / sales (right axis)* Others: trading, others and adjustment
Nissan Chemical Industries, Ltd. Annual Report 201716

Non-Financial Highlights
Employees working in global field (as of March 31, 2017)

Non-Financial Data (non-consolidated)
NCK Co., Ltd.
Employees based overseas: 11(Local employees: 89)

Nissan Chemical Europe S.A.R.L.
Employees based overseas: 3(Local employees: 5)Unit

FY2012FY2013

FY2014FY2015FY2016

Male

People

1,550

1,543

1,553

1,567

1,597

FemalePeople

162

164

168

172

173

%

9.5

9.6

9.8

9.9

9.8

Male

People

22

34

39

59

51

FemalePeople

3

7

10

6

13

%

12.0

17.1

20.4

9.2

20.3

Male

People

31

26

18

20

19

FemalePeople

75

81

91

96

100

People

9

9

10

12

11

Percentage of females among managers

%

2.0

2.0

2.1

2.5

2.1

Re-employment of retired employees

People

59

66

60

64

85

Percentage of re-employment of retired employees

%

64

63

66

97

89

Percentage of employees with disabilities*1

%

2.12

2.22

2.35

2.15

2.23

Employees who started maternity leave

People

5

8

9

7

13

Male

People

0

0

1

2

0

FemalePeople

6

6

6

8

11

Percentage returning to work after taking maternity/childcare leave (“–”: Not applicable) Male

%

ー

ー

ー

100

100

Female

%

100

80

100

100

100

Male

%

ー

ー

ー

100

100

Female

%

100

100

100

85.7

100

Male

People

0

0

0

0

1

FemalePeople

5

7

9

11

10

Average overtime per month

Hrs

16.8

18.0

18.8

19.0

20.0

Percentage of taking annual leave

%

77.6

76.9

73.4

77.4

77.2

People

4

1

1

3

2

%

7.5

3.1

3.8

12.0

4.9

Amount of energy consumed (crude oil equivalent) *2

1,000 kL

97

95

92

99

99

Waste generation

1,000 tons

26.8

26.3

33.0

33.4

33.7

Final disposal volume of waste

1,000 tons

2.5

1.5

2.3

2.2

1.1

Full-time employees

Percentage of females among full-time employees
Nissan Chemical Agro Korea Ltd.
(Local employees: 3)

New employees (graduates)

Percentage of females among new employees
Temporary employees
Nissan Chemical Products(Shanghai) Co., Ltd.
Employees based overseas: 6(Local employees: 20)

Nissan Chemical
America Corporation
Employees based overseas: 5(Local employees: 27)

Nissan Chemical Taiwan Co., Ltd.
Employees based overseas: 6(Local employees: 17)

Female managers

Nissan Chemical Do Brasil(Local employees: 2)
An additional one employee is assigned to a research laboratory (IMEC) and another to a university (University of Texas).

Employees who started childcare leave

Greenhouse gas emissions(1,000 tons)
500
400
300
200

499

455

467

447

448

437

458

462

462

160

160

157

175

140

153

172

152

61

60

59

49

55

53

55

238

234

247

53

231

220

248

250

237

2007

2008

2009

2010

2011

2012

2013

2014

190
71

432
155

255

31
246

2015

2016

Retention rate after taking maternity/childcare leave (“–”: Not applicable)

1000

Employees who started shorter working hours for childcare
CO2 emissions from energy use

Water resources input* / Effluent(Million m3)

CO2 emissions from non-energy use

Dinitrogen monoxide (CO2 equivalent)* Tap water, groundwater and industrial water used for business activities

40

Leaving job within 3 years of employment

30

Percentage of employees leaving job within 3 years of employment

20
10
0

16.2
2007

41.6

40.9

40.4

41.0

16.7
2008

15.9
2009

41.3

40.3
15.9

2010

15.5
2011

15.3
2012

42.8

41.1

41.1
15.1
2013

14.9
2014

42.2
15.1

2015

15.0
2016

Water resources input

17

(FY)

Nissan Chemical Industries, Ltd. Annual Report 2017

(FY)
Effluent*1 Statutory rate: 2.0% *2 Energy: Fuel, purchased electricity and purchased steam used for business activities
Nissan Chemical Industries, Ltd. Annual Report 201718

Non-Financial Highlights
Employees working in global field (as of March 31, 2017)

Non-Financial Data (non-consolidated)
NCK Co., Ltd.
Employees based overseas: 11(Local employees: 89)

Nissan Chemical Europe S.A.R.L.
Employees based overseas: 3(Local employees: 5)Unit

FY2012FY2013

FY2014FY2015FY2016

Male

People

1,550

1,543

1,553

1,567

1,597

FemalePeople

162

164

168

172

173

%

9.5

9.6

9.8

9.9

9.8

Male

People

22

34

39

59

51

FemalePeople

3

7

10

6

13

%

12.0

17.1

20.4

9.2

20.3

Male

People

31

26

18

20

19

FemalePeople

75

81

91

96

100

People

9

9

10

12

11

Percentage of females among managers

%

2.0

2.0

2.1

2.5

2.1

Re-employment of retired employees

People

59

66

60

64

85

Percentage of re-employment of retired employees

%

64

63

66

97

89

Percentage of employees with disabilities*1

%

2.12

2.22

2.35

2.15

2.23

Employees who started maternity leave

People

5

8

9

7

13

Male

People

0

0

1

2

0

FemalePeople

6

6

6

8

11

Percentage returning to work after taking maternity/childcare leave (“–”: Not applicable) Male

%

ー

ー

ー

100

100

Female

%

100

80

100

100

100

Male

%

ー

ー

ー

100

100

Female

%

100

100

100

85.7

100

Male

People

0

0

0

0

1

FemalePeople

5

7

9

11

10

Average overtime per month

Hrs

16.8

18.0

18.8

19.0

20.0

Percentage of taking annual leave

%

77.6

76.9

73.4

77.4

77.2

People

4

1

1

3

2

%

7.5

3.1

3.8

12.0

4.9

Amount of energy consumed (crude oil equivalent) *2

1,000 kL

97

95

92

99

99

Waste generation

1,000 tons

26.8

26.3

33.0

33.4

33.7

Final disposal volume of waste

1,000 tons

2.5

1.5

2.3

2.2

1.1

Full-time employees

Percentage of females among full-time employees
Nissan Chemical Agro Korea Ltd.
(Local employees: 3)

New employees (graduates)

Percentage of females among new employees
Temporary employees
Nissan Chemical Products(Shanghai) Co., Ltd.
Employees based overseas: 6(Local employees: 20)

Nissan Chemical
America Corporation
Employees based overseas: 5(Local employees: 27)

Nissan Chemical Taiwan Co., Ltd.
Employees based overseas: 6(Local employees: 17)

Female managers

Nissan Chemical Do Brasil(Local employees: 2)
An additional one employee is assigned to a research laboratory (IMEC) and another to a university (University of Texas).

Employees who started childcare leave

Greenhouse gas emissions(1,000 tons)
500
400
300
200

499

455

467

447

448

437

458

462

462

160

160

157

175

140

153

172

152

61

60

59

49

55

53

55

238

234

247

53

231

220

248

250

237

2007

2008

2009

2010

2011

2012

2013

2014

190
71

432
155

255

31
246

2015

2016

Retention rate after taking maternity/childcare leave (“–”: Not applicable)

1000

Employees who started shorter working hours for childcare
CO2 emissions from energy use

Water resources input* / Effluent(Million m3)

CO2 emissions from non-energy use

Dinitrogen monoxide (CO2 equivalent)* Tap water, groundwater and industrial water used for business activities

40

Leaving job within 3 years of employment

30

Percentage of employees leaving job within 3 years of employment

20
10
0

16.2
2007

41.6

40.9

40.4

41.0

16.7
2008

15.9
2009

41.3

40.3
15.9

2010

15.5
2011

15.3
2012

42.8

41.1

41.1
15.1
2013

14.9
2014

42.2
15.1

2015

15.0
2016

Water resources input

17

(FY)

Nissan Chemical Industries, Ltd. Annual Report 2017

(FY)
Effluent*1 Statutory rate: 2.0% *2 Energy: Fuel, purchased electricity and purchased steam used for business activities
Nissan Chemical Industries, Ltd. Annual Report 201718

M a in Pr o d uct s
Nissan Chemical Products that Play an Active Role in Society
Here we introduce our three business domains and products used in various parts of society.

AdBlue®

TEPIC®
SUNEVER®

ROUNDUP MAXLOAD®

LIVALO® / LANDEL®

Melamine

SNOWTEX®

ARC®
LEIMAY® / ORACLE®
HI-LITE®
STARMITE® / SANMITE®
SIRIUS / ALTAIR®

Fluralaner®

Per for manc e M ater ials
Display Materials●●

SUNEVER® (LCD alignment coating)Life Sc ienc es

Semiconductor Materials●

ARC® (bottom anti-reflective coating)

Inorganic Materials●

NHC (inorganic coating materials)®

●

Agricultural Chemicals

SNOWTEX ® (semiconductor polishing,hard coating, etc.)
Organo silica sol (coating foranti-scratch, insulation, CTE reduction)

Herbicide

19

Nissan Chemical Industries, Ltd. Annual Report 2017

LCD TV

Image

Pharmaceuticals

Fungicide●

SIRIUS ®

●STARMITE®

●LEIMAY ®

●ALTAIR ®

●SANMITE ®

●ORACLE ®

●ROUNDUPMAXLOAD●PULSOR

●

TARGA

●

●

Image

Insecticide®

Chemic als
Chemicals●

LIVALO® (anti-cholesterol agent)●

Melamine (adhesive agent for particle board)●

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

AdBlue® (High-grade urea solution)●

FINEOXOCOL ®

●TEPIC ® (epoxy compound for LED
sealants, solder resist, painting)®

Novel agent under development®

●

PERMIT ®

NIP-022 (thrombocytopenia treatment
agent)●●

Melamine cyanurate (flame retardant)

Active ingredients for veterinary pharmaceuticals

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

NTC-801 (anti-arrhythmic agent)●

HI-LITE ® (chlorinated isocyanuric acidfor sterilizing)●

Nissan Reishi (health food)®

Fluralaner

Image

Nissan Chemical Industries, Ltd. Annual Report 201720

M a in Pr o d uct s
Nissan Chemical Products that Play an Active Role in Society
Here we introduce our three business domains and products used in various parts of society.

AdBlue®

TEPIC®
SUNEVER®

ROUNDUP MAXLOAD®

LIVALO® / LANDEL®

Melamine

SNOWTEX®

ARC®
LEIMAY® / ORACLE®
HI-LITE®
STARMITE® / SANMITE®
SIRIUS / ALTAIR®

Fluralaner®

Per for manc e M ater ials
Display Materials●●

SUNEVER® (LCD alignment coating)Life Sc ienc es

Semiconductor Materials●

ARC® (bottom anti-reflective coating)

Inorganic Materials●

NHC (inorganic coating materials)®

●

Agricultural Chemicals

SNOWTEX ® (semiconductor polishing,hard coating, etc.)
Organo silica sol (coating foranti-scratch, insulation, CTE reduction)

Herbicide

19

Nissan Chemical Industries, Ltd. Annual Report 2017

LCD TV

Image

Pharmaceuticals

Fungicide●

SIRIUS ®

●STARMITE®

●LEIMAY ®

●ALTAIR ®

●SANMITE ®

●ORACLE ®

●ROUNDUPMAXLOAD●PULSOR

●

TARGA

●

●

Image

Insecticide®

Chemic als
Chemicals●

LIVALO® (anti-cholesterol agent)●

Melamine (adhesive agent for particle board)●

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

AdBlue® (High-grade urea solution)●

FINEOXOCOL ®

●TEPIC ® (epoxy compound for LED
sealants, solder resist, painting)®

Novel agent under development®

●

PERMIT ®

NIP-022 (thrombocytopenia treatment
agent)●●

Melamine cyanurate (flame retardant)

Active ingredients for veterinary pharmaceuticals

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

NTC-801 (anti-arrhythmic agent)●

HI-LITE ® (chlorinated isocyanuric acidfor sterilizing)●

Nissan Reishi (health food)®

Fluralaner

Image

Nissan Chemical Industries, Ltd. Annual Report 201720

M a i n Product s

Environmentally Friendly Products
We define environmentally friendly products as products that reduce environmental impact across each of the processes below, from manufacture to distribution, use anddisposal, or that play an important role in achieving that goal. We have set ourselves the goal of improving the percentage of our products that are environmentally friendly.

Manufacture

Distribution

i. Saving energy
iv. Reducing waste and environmental pollutants

Use

ii. Reducing CO2
v. Purifying air and water

Disposaliii. Conserving resources (water, raw materials)
vi. Renewable (new) energy

Performance Materials
HYPERTECH®
Nucleating agents for electroless plating
Nucleating agents make it possible to reduce the amount of metal
used for wiring in items such as flexible printed substrates or touch
panels by more than 90%.
Metal wiring is made by forming a metal film across the entire
surface of the substrate in a vacuum, and then removing unwanted
parts with acid. HYPERTECH® makes it possible to draw wiring
patterns, meaning that metal only adheres to drawn lines. This inturn minimizes the amount of metal plating required.

Agricultural Chemicals
Compact agrochemical formulations
We supply lightweight, compact
agrochemical formulations that contain ahigh concentration of active ingredients,
including WG (Water dispersible) andJumbo (floating granules, containing active
ingredients, wrapped in a soluble film). This
helps in ways such as reducing packaging
materials, waste products, and CO2
emissions from manufacturing and shipping.

▲Comet WG

Chemicals
AdBlue®
AdBlue® is a high-grade urea solution used in “urea SCR system”, a technology for
purifying emissions. When sprayed onto emissions from diesel vehicles, it breaks
down nitrogen oxide (NOX) into harmless nitrogen and water, which helps toreduce environmental impact. We supply AdBlue® in line with each customer’s
needs, in tank trucks, 200L drums, 1m3 containers, or BIB (bag-in-box,20L,10L).
▲Touch panel

Coating materials with ultra-high refractive index
OLED lighting already has a low environmental impact. By
applying a film between the electrodes and substrates, or between
the electrodes and light source, however, it is possible to improvelight efficiency from the light source by up to 20%. HYPERTECH®
is transparent, heat resistant and offers excellent adhesion todifferent substrate materials. Ease of application can also help toreduce manufacturing costs.

▲AdBlue®

HI-LITE®
HI-LITE® is widely used to assist with environmental sanitation, for purposes suchas disinfecting and sterilizing pools and septic tanks. Having obtained certification
under NSF/ANSI-60 (the standard for chemicals intentionally added to drinking
water), there is new scope to expand the range of applications for HI-LITE® forsterilizing drinking water. Such as applying in areas where standards of sanitation
are insufficient, particularly in developing countries.
▲Hygienic water supplies (illustration purposes only)▲OLED lighting

Advanced Materials & Planning

Inorganic Materials

ECOPROMOTE® Series

SNOWTEX®, Aluminasol, Organo silica sol, NanoUse®ZR
Materials can be used for a wide range of purposes, including
saving energy from transformers, improving the efficiency ofnatural energy, purifying emissions, and extending the life of
motors.

▲Purifying emissions (illustration purposes only)

21

Nissan Chemical Industries, Ltd. Annual Report 2017

▲Tenku Jumbo

ECOPROMOTE® is a crystal nucleating agent for polylactate. Combining theproperties of a bioplastic, made from plant instead of oil, and a biodegradable
plastic that is broken down into water and carbon dioxide by microorganisms,
polylactate is the foremost carbon neutral synthetic resin in terms of practicalapplication. Uses are nonetheless limited due to issues relating to moldability andheat resistance. ECOPROMOTE® stimulates the growth of polylactate crystals, andcan be used for high speed injection molding or extrusion molding without affecting
transparency. As a result, it is increasingly being used for durable purposes suchas electronic devices, printers and filaments in 3D printers.

▲3D printerNissan Chemical Industries, Ltd. Annual Report 201722

M a i n Product s

Environmentally Friendly Products
We define environmentally friendly products as products that reduce environmental impact across each of the processes below, from manufacture to distribution, use anddisposal, or that play an important role in achieving that goal. We have set ourselves the goal of improving the percentage of our products that are environmentally friendly.

Manufacture

Distribution

i. Saving energy
iv. Reducing waste and environmental pollutants

Use

ii. Reducing CO2
v. Purifying air and water

Disposaliii. Conserving resources (water, raw materials)
vi. Renewable (new) energy

Performance Materials
HYPERTECH®
Nucleating agents for electroless plating
Nucleating agents make it possible to reduce the amount of metal
used for wiring in items such as flexible printed substrates or touch
panels by more than 90%.
Metal wiring is made by forming a metal film across the entire
surface of the substrate in a vacuum, and then removing unwanted
parts with acid. HYPERTECH® makes it possible to draw wiring
patterns, meaning that metal only adheres to drawn lines. This inturn minimizes the amount of metal plating required.

Agricultural Chemicals
Compact agrochemical formulations
We supply lightweight, compact
agrochemical formulations that contain ahigh concentration of active ingredients,
including WG (Water dispersible) andJumbo (floating granules, containing active
ingredients, wrapped in a soluble film). This
helps in ways such as reducing packaging
materials, waste products, and CO2
emissions from manufacturing and shipping.

▲Comet WG

Chemicals
AdBlue®
AdBlue® is a high-grade urea solution used in “urea SCR system”, a technology for
purifying emissions. When sprayed onto emissions from diesel vehicles, it breaks
down nitrogen oxide (NOX) into harmless nitrogen and water, which helps toreduce environmental impact. We supply AdBlue® in line with each customer’s
needs, in tank trucks, 200L drums, 1m3 containers, or BIB (bag-in-box,20L,10L).
▲Touch panel

Coating materials with ultra-high refractive index
OLED lighting already has a low environmental impact. By
applying a film between the electrodes and substrates, or between
the electrodes and light source, however, it is possible to improvelight efficiency from the light source by up to 20%. HYPERTECH®
is transparent, heat resistant and offers excellent adhesion todifferent substrate materials. Ease of application can also help toreduce manufacturing costs.

▲AdBlue®

HI-LITE®
HI-LITE® is widely used to assist with environmental sanitation, for purposes suchas disinfecting and sterilizing pools and septic tanks. Having obtained certification
under NSF/ANSI-60 (the standard for chemicals intentionally added to drinking
water), there is new scope to expand the range of applications for HI-LITE® forsterilizing drinking water. Such as applying in areas where standards of sanitation
are insufficient, particularly in developing countries.
▲Hygienic water supplies (illustration purposes only)▲OLED lighting

Advanced Materials & Planning

Inorganic Materials

ECOPROMOTE® Series

SNOWTEX®, Aluminasol, Organo silica sol, NanoUse®ZR
Materials can be used for a wide range of purposes, including
saving energy from transformers, improving the efficiency ofnatural energy, purifying emissions, and extending the life of
motors.

▲Purifying emissions (illustration purposes only)

21

Nissan Chemical Industries, Ltd. Annual Report 2017

▲Tenku Jumbo

ECOPROMOTE® is a crystal nucleating agent for polylactate. Combining theproperties of a bioplastic, made from plant instead of oil, and a biodegradable
plastic that is broken down into water and carbon dioxide by microorganisms,
polylactate is the foremost carbon neutral synthetic resin in terms of practicalapplication. Uses are nonetheless limited due to issues relating to moldability andheat resistance. ECOPROMOTE® stimulates the growth of polylactate crystals, andcan be used for high speed injection molding or extrusion molding without affecting
transparency. As a result, it is increasingly being used for durable purposes suchas electronic devices, printers and filaments in 3D printers.

▲3D printerNissan Chemical Industries, Ltd. Annual Report 201722

B u s i n e s s Over vi ew

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

Display Materials
We continue to develop our display materials business, spearheaded by SUNEVER® polyimide-based LCD alignment coating materials
and NHC® insulating hard coating materials, by catering to the growing needs of the display market, particularly in Asia.

Semiconductor Materials

Main Products
SUNEVER®

Polarizing filter

Backlight

SUNEVER® is a polyimide-based coating for LCD / flat panel displays. It
is used to coat the surface of the outer glass panels, to align liquid
crystal molecules in a certain direction. We offer various grades of thisproduct for small- and medium-sized screens, such as LCD monitors,
PCs, tablets and smartphones, in addition to those for the latest
flat-panel LCD TVs.

Glass substrate
Transparent
electrode
Alignment
film
Liquid crystal
Color filter

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

▲LCD panel

ARC® (bottom anti-reflective coating)

Inorganic Materials
We have continuously developed nano-colloids to a variety of industries for many years using “Ultrafine Particle Control technology”, oneof our core technologies. We strive to supply our main product, SNOWTEX®, and other products.

ARC® is an anti-reflective coating developed for semiconductor lithography. It is used to coat the part under the photoresist, to resolve a number of issues withlithographic exposure, such as reflection from varying substrate levels. This makes it possible to significantly reduce the device failure rate.

Mask

New Products

Exposure

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

Substrate

Electronic Materials●

Inorganic Materials
Development of a wide range of applications that take advantage of the features of high performancecolloid products● Prompt response to customers through collaboration between sales, manufacturing, and research
teams●

Korea : Pyeongtaek (NCK)

China : Shanghai (NCS)

Business Results and Outlook

500

Sales (left axis)

400
300
200

Operating income (right axis)
494

120

518

528

576

(100 million yen)

150

120

125

123

100

88
50

100
0

23

2013

2014

2015

Nissan Chemical Industries, Ltd. Annual Report 2017

2016

Comment

428

ResistARC®
Substrate

SNOWTEX® / Organo silica sol

Taiwan : Kaohsiung (NCT)

600

Exposure

Base

Promoting R&D in an integrated manner with customers in Japan and overseas countries
Bases established in Japan, Korea, Taiwan, and China that target the continuously growing field ofelectronic materials in the Asian market(100 million yen)

Mask
ResistEffects of anti-reflective coatings

Features of Our Business●▲LCD TV

In Display Materials in FY2016, SUNEVER® sold wellfor small- and medium-sized devices such as
smartphones. In terms of Semiconductor Materials,
sales of multi layer process materials were affected by
reduced operating rates from selected customers. In
Inorganic Materials, we saw a decline in sales of
SNOWTEX® for general purposes, and also in organo
silica sol.

SNOWTEX® is a colloid solution with nano-sized silica particles
dispersed stably in water. Organo silica sol is the same product but
dispersed in an organic solvent. Making the most of their diverse
capabilities, these products are used across a wide range of different
fields, including coating agents for optical films and printers, andpolishing agents for electronic substrate materials and electronic
recording media.

▲Tablet device

OLED materials
We are focusing developing markets for OLED, which is expected to
grow in the future as a next-generation display. In addition to coating
hole-injection layer materials and TFT planarizing film materials, we are
currently moving forward with the development of distinctive peripheral
materials, including bank materials that help ensure the uniformity of
pixels during inkjet application, and optical alignment materials used foranti-reflective retardation films.

▲Silicon wafer

Polarizer (optical alignment
material + coating polarizer)
Light

Barrier layer (SIN)

Emission layer
Anode (reflective anode)

TFT array

Retardation film (optical alignment
material ＋ coating liquid crystal)Light extraction layer
Sealing / planarizing materials
Bank (photosensitive liquid repellant material)
Hole-injection layer (HIL)

Film substrate

TFT planarization layer(photosensitive acrylic)

Glass substrate

Release layer02017 (Outlook) (FY)

Nissan Chemical Industries, Ltd. Annual Report 201724

B u s i n e s s Over vi ew

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

Display Materials
We continue to develop our display materials business, spearheaded by SUNEVER® polyimide-based LCD alignment coating materials
and NHC® insulating hard coating materials, by catering to the growing needs of the display market, particularly in Asia.

Semiconductor Materials

Main Products
SUNEVER®

Polarizing filter

Backlight

SUNEVER® is a polyimide-based coating for LCD / flat panel displays. It
is used to coat the surface of the outer glass panels, to align liquid
crystal molecules in a certain direction. We offer various grades of thisproduct for small- and medium-sized screens, such as LCD monitors,
PCs, tablets and smartphones, in addition to those for the latest
flat-panel LCD TVs.

Glass substrate
Transparent
electrode
Alignment
film
Liquid crystal
Color filter

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

▲LCD panel

ARC® (bottom anti-reflective coating)

Inorganic Materials
We have continuously developed nano-colloids to a variety of industries for many years using “Ultrafine Particle Control technology”, oneof our core technologies. We strive to supply our main product, SNOWTEX®, and other products.

ARC® is an anti-reflective coating developed for semiconductor lithography. It is used to coat the part under the photoresist, to resolve a number of issues withlithographic exposure, such as reflection from varying substrate levels. This makes it possible to significantly reduce the device failure rate.

Mask

New Products

Exposure

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

Substrate

Electronic Materials●

Inorganic Materials
Development of a wide range of applications that take advantage of the features of high performancecolloid products● Prompt response to customers through collaboration between sales, manufacturing, and research
teams●

Korea : Pyeongtaek (NCK)

China : Shanghai (NCS)

Business Results and Outlook

500

Sales (left axis)

400
300
200

Operating income (right axis)
494

120

518

528

576

(100 million yen)

150

120

125

123

100

88
50

100
0

23

2013

2014

2015

Nissan Chemical Industries, Ltd. Annual Report 2017

2016

Comment

428

ResistARC®
Substrate

SNOWTEX® / Organo silica sol

Taiwan : Kaohsiung (NCT)

600

Exposure

Base

Promoting R&D in an integrated manner with customers in Japan and overseas countries
Bases established in Japan, Korea, Taiwan, and China that target the continuously growing field ofelectronic materials in the Asian market(100 million yen)

Mask
ResistEffects of anti-reflective coatings

Features of Our Business●▲LCD TV

In Display Materials in FY2016, SUNEVER® sold wellfor small- and medium-sized devices such as
smartphones. In terms of Semiconductor Materials,
sales of multi layer process materials were affected by
reduced operating rates from selected customers. In
Inorganic Materials, we saw a decline in sales of
SNOWTEX® for general purposes, and also in organo
silica sol.

SNOWTEX® is a colloid solution with nano-sized silica particles
dispersed stably in water. Organo silica sol is the same product but
dispersed in an organic solvent. Making the most of their diverse
capabilities, these products are used across a wide range of different
fields, including coating agents for optical films and printers, andpolishing agents for electronic substrate materials and electronic
recording media.

▲Tablet device

OLED materials
We are focusing developing markets for OLED, which is expected to
grow in the future as a next-generation display. In addition to coating
hole-injection layer materials and TFT planarizing film materials, we are
currently moving forward with the development of distinctive peripheral
materials, including bank materials that help ensure the uniformity of
pixels during inkjet application, and optical alignment materials used foranti-reflective retardation films.

▲Silicon wafer

Polarizer (optical alignment
material + coating polarizer)
Light

Barrier layer (SIN)

Emission layer
Anode (reflective anode)

TFT array

Retardation film (optical alignment
material ＋ coating liquid crystal)Light extraction layer
Sealing / planarizing materials
Bank (photosensitive liquid repellant material)
Hole-injection layer (HIL)

Film substrate

TFT planarization layer(photosensitive acrylic)

Glass substrate

Release layer02017 (Outlook) (FY)

Nissan Chemical Industries, Ltd. Annual Report 201724

B u s i ness Overvie w

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

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

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

Integrated System from Exploratory Research, Development to Manufacture and Sales
Manufactureand Sales

Development

391

475

100
0

92

108

(100 million yen)

150

100

62

50

2013

0
2017 (Outlook) (FY)

2014

2015

Main Products

2016

Comment

132

300
200

520

563
156

400

In FY2016, we recorded strong sales of ALTAIR® both
domestically and overseas. Increased sales of ROUNDUP®, thelaunch of ROUNDUP® MAXLOAD ALⅡ for the household market,
and the release of agricultural herbicide TREFANOCIDE® also
contributed to an increase in revenue. BRAVECTO® chewable
tablets for dogs are now on sale in 80 different countries, and wehave also started selling spot on products for dogs and cats, as
we continue to steadily increase shipments of Fluralaner.

* TREFANOCIDE is a registered trademark of Gowan Crop Protection Limited.
®

PERMIT®

▲LEIMAY®

LEIMAY®, ORACLE®
These fungicides have specific activity for diseases caused by oomycetes and myxomycetes. We sell LEIMAY®, which is used
as an atomizing agent for potatoes, grapes, and vegetables, and ORACLE®, which is used for preventing and eliminating theroot-knot disease of cruciferous vegetables and soil-borne diseases of potatoes, rice, vegetables, and lawns. BESGREEN®
meanwhile is designed to prevent diseases in lawns, and is sold in more than 20 countries, including South Korea, China andparts of Europe.

GREATAM®, PULSOR®
These products contain a fungicide that we acquired from Dow AgroSciences in 2010. We market GREATAM® for the sheathblight disease that affects paddy rice and IKARUGA® for large patch disease of lawn. We export and sell this product inoverseas markets including China, Korea, India, and Brazil under the trade name of PULSOR®.

■ Active Ingredients for Veterinary Pharmaceutical

ALTAIR®

Fluralaner

ALTAIR , an active ingredient in herbicides for paddy rice, is a wide-spectrum herbicide with that is highly effective ineliminating bulrush and cyperaceous perennial weeds. It is also effective for weeds that are resistant to conventionalsulfonylurea-based herbicides. We market this product in Japan, Korea, and China.

A compound that we invented in-house, Fluralaner is one of the ingredients contained in BRAVECTO® (veterinary
pharmaceuticals), developed by MSD Animal Health. We manufacture Fluralaner and then supply it to MSD Animal Health foruse in as active ingredients for veterinary pharmaceuticals.

Nissan Chemical Industries, Ltd. Annual Report 2017

▲STARMITE®

■ Fungicide■ Herbicide®

25▲ROUNDUP®
MAXLOAD AL

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

Operating income (right axis)

457

This herbicide controls gramineous weeds that affect broadleaf crops such as soy beans, rapeseed, beets, cotton, andsunflowers. It is used in more than 40 countries, including India and countries in the United States and Europe.

▲ROUNDUP®
MAXLOAD ALⅡSANMITE®

Business Results and Outlook

500

TARGA®

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

Plants600

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

STARMITE®

Research laboratories

Sales (left axis)

SIRIUS®

■ Insecticide

Business division(100 million yen)

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

Taking advantage of the fact that it is extremely effective against cyperaceous weeds, we market this product in Japan under
the trade names of HICUT®, which is a herbicide for paddy rice in the mid to late term that is highly effective against the pesky
weed Eleocharis kuroguwai, and INPOOL®, for lawns. We also market it as PERMIT® in more than 20 overseas countries as
an herbicide for paddy rice, corn fields, sugar cane fields, and lawns.

Features of Our Business
Exploratory Research

ROUNDUP® MAXLOAD, ROUNDUP® MAXLOAD AL, ROUNDUP® MAXLOAD ALⅡ▲ALTAIR®

▲BRAVECTO®

Nissan Chemical Industries, Ltd. Annual Report 201726

B u s i ness Overvie w

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

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

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

Integrated System from Exploratory Research, Development to Manufacture and Sales
Manufactureand Sales

Development

391

475

100
0

92

108

(100 million yen)

150

100

62

50

2013

0
2017 (Outlook) (FY)

2014

2015

Main Products

2016

Comment

132

300
200

520

563
156

400

In FY2016, we recorded strong sales of ALTAIR® both
domestically and overseas. Increased sales of ROUNDUP®, thelaunch of ROUNDUP® MAXLOAD ALⅡ for the household market,
and the release of agricultural herbicide TREFANOCIDE® also
contributed to an increase in revenue. BRAVECTO® chewable
tablets for dogs are now on sale in 80 different countries, and wehave also started selling spot on products for dogs and cats, as
we continue to steadily increase shipments of Fluralaner.

* TREFANOCIDE is a registered trademark of Gowan Crop Protection Limited.
®

PERMIT®

▲LEIMAY®

LEIMAY®, ORACLE®
These fungicides have specific activity for diseases caused by oomycetes and myxomycetes. We sell LEIMAY®, which is used
as an atomizing agent for potatoes, grapes, and vegetables, and ORACLE®, which is used for preventing and eliminating theroot-knot disease of cruciferous vegetables and soil-borne diseases of potatoes, rice, vegetables, and lawns. BESGREEN®
meanwhile is designed to prevent diseases in lawns, and is sold in more than 20 countries, including South Korea, China andparts of Europe.

GREATAM®, PULSOR®
These products contain a fungicide that we acquired from Dow AgroSciences in 2010. We market GREATAM® for the sheathblight disease that affects paddy rice and IKARUGA® for large patch disease of lawn. We export and sell this product inoverseas markets including China, Korea, India, and Brazil under the trade name of PULSOR®.

■ Active Ingredients for Veterinary Pharmaceutical

ALTAIR®

Fluralaner

ALTAIR , an active ingredient in herbicides for paddy rice, is a wide-spectrum herbicide with that is highly effective ineliminating bulrush and cyperaceous perennial weeds. It is also effective for weeds that are resistant to conventionalsulfonylurea-based herbicides. We market this product in Japan, Korea, and China.

A compound that we invented in-house, Fluralaner is one of the ingredients contained in BRAVECTO® (veterinary
pharmaceuticals), developed by MSD Animal Health. We manufacture Fluralaner and then supply it to MSD Animal Health foruse in as active ingredients for veterinary pharmaceuticals.

Nissan Chemical Industries, Ltd. Annual Report 2017

▲STARMITE®

■ Fungicide■ Herbicide®

25▲ROUNDUP®
MAXLOAD AL

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

Operating income (right axis)

457

This herbicide controls gramineous weeds that affect broadleaf crops such as soy beans, rapeseed, beets, cotton, andsunflowers. It is used in more than 40 countries, including India and countries in the United States and Europe.

▲ROUNDUP®
MAXLOAD ALⅡSANMITE®

Business Results and Outlook

500

TARGA®

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

Plants600

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

STARMITE®

Research laboratories

Sales (left axis)

SIRIUS®

■ Insecticide

Business division(100 million yen)

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

Taking advantage of the fact that it is extremely effective against cyperaceous weeds, we market this product in Japan under
the trade names of HICUT®, which is a herbicide for paddy rice in the mid to late term that is highly effective against the pesky
weed Eleocharis kuroguwai, and INPOOL®, for lawns. We also market it as PERMIT® in more than 20 overseas countries as
an herbicide for paddy rice, corn fields, sugar cane fields, and lawns.

Features of Our Business
Exploratory Research

ROUNDUP® MAXLOAD, ROUNDUP® MAXLOAD AL, ROUNDUP® MAXLOAD ALⅡ▲ALTAIR®

▲BRAVECTO®

Nissan Chemical Industries, Ltd. Annual Report 201726

B u s i ness Overvie w

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

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

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

Features of Our Business
A Unique Business Model That Specializes in New Drug Discovery and the Manufacture of API without a Sales ForceBusiness Model
Before Launch
NissanChemicalUpfront payment
Development milestone

Major
PharmaNissanChemicalClinical trial

API production

License out
Drug discovery

Sales (left axis)

Major
PharmaSales(100 million yen)
100

116

27

69

49
23

0

80

2013

2014

20
2015

Nissan Chemical Industries, Ltd. Annual Report 2017

17
2016

9

50

0
2017 (Outlook) (FY)Comment

50

87This is a dual type Ca antagonist that blocks not only L-type calcium channels, but also T-typechannels. This agent has shown to have a positive effect on hypertension and angina pectoris. In
addition, the agent is expected to provide a renal-protective and cardio-protective benefits. LANDEL®
is distributed by Zeria Pharmaceutical Co., Ltd. and Shionogi & Co., Ltd. in Japan, and FINTE® isdistributed by Green Cross Co. in South Korea.

▲LIVALO®

Novel Agent under Development
NIP-022 (thrombocytopenia treatment agent)This orally administrable drug exhibits both a phosphodiesterase inhibitory effect and a thromboxane
A2 synthetase inhibitory effect. It is expected to be used as a novel agent for asthma and intermittent
claudication associated with peripheral arterial disease.

Formulation
MarketingThis is a new orally administrable antiarrhythmic agent that inhibits the acetylcholine-activatedpotassium channel current (IKACh). NTC-801 is expected to be used as an atrial selective agent for thetreatment of atrial fibrillation because IKACh channels are apparent in the atrium but not in the ventricle.

▲Compound library at Biological Research Laboratories

Finetech® Business

Operating income (right axis)

88

Efonidipine hydrochloride (LANDEL®, FINTE®)

NTC-801 (anti-arrhythmic agent)

API shipment

150

100

This is a statin agent that greatly reduces LDL cholesterol and causes fewer drug-interactions,offering the advantage of safety. This agent is recognized as one of the “strong statins” in clinicalpractice, and it is distributed by Kowa Pharmaceutical Co. Ltd. in Japan. It has also been released in
the United States, as well as Latin American, European, and Asian countries. There are plans torelease it in other countries and territories in the future.

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

Business Results and Outlook(100 million yen)

Pitavastatin calcium (LIVALO®)This activates the thrombopoietin receptor, which is a hematopoietic factor. This is orally
administrable drug and enables to accelerate platelet production. It has the potential to be a drug fortreating every kind of thrombocytopenia.

After Launch
Sales milestone
Royalty

Main Products

While sales of LIVALO® continued to grow on theoverseas market in FY2016, figures were down in thedomestic market due to the increasing availability ofgeneric products. Sales of Finetech® were strong. We
also brought in revenue from a lump-sum payment
resulting from a joint research agreement with
Mitsubishi Tanabe Pharma Corporation, relating to thedevelopment of new drugs for autoimmune diseases.

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

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

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

▲Finetech® development plant

Nissan Chemical Industries, Ltd. Annual Report 201728

B u s i ness Overvie w

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

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

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

Features of Our Business
A Unique Business Model That Specializes in New Drug Discovery and the Manufacture of API without a Sales ForceBusiness Model
Before Launch
NissanChemicalUpfront payment
Development milestone

Major
PharmaNissanChemicalClinical trial

API production

License out
Drug discovery

Sales (left axis)

Major
PharmaSales(100 million yen)
100

116

27

69

49
23

0

80

2013

2014

20
2015

Nissan Chemical Industries, Ltd. Annual Report 2017

17
2016

9

50

0
2017 (Outlook) (FY)Comment

50

87This is a dual type Ca antagonist that blocks not only L-type calcium channels, but also T-typechannels. This agent has shown to have a positive effect on hypertension and angina pectoris. In
addition, the agent is expected to provide a renal-protective and cardio-protective benefits. LANDEL®
is distributed by Zeria Pharmaceutical Co., Ltd. and Shionogi & Co., Ltd. in Japan, and FINTE® isdistributed by Green Cross Co. in South Korea.

▲LIVALO®

Novel Agent under Development
NIP-022 (thrombocytopenia treatment agent)This orally administrable drug exhibits both a phosphodiesterase inhibitory effect and a thromboxane
A2 synthetase inhibitory effect. It is expected to be used as a novel agent for asthma and intermittent
claudication associated with peripheral arterial disease.

Formulation
MarketingThis is a new orally administrable antiarrhythmic agent that inhibits the acetylcholine-activatedpotassium channel current (IKACh). NTC-801 is expected to be used as an atrial selective agent for thetreatment of atrial fibrillation because IKACh channels are apparent in the atrium but not in the ventricle.

▲Compound library at Biological Research Laboratories

Finetech® Business

Operating income (right axis)

88

Efonidipine hydrochloride (LANDEL®, FINTE®)

NTC-801 (anti-arrhythmic agent)

API shipment

150

100

This is a statin agent that greatly reduces LDL cholesterol and causes fewer drug-interactions,offering the advantage of safety. This agent is recognized as one of the “strong statins” in clinicalpractice, and it is distributed by Kowa Pharmaceutical Co. Ltd. in Japan. It has also been released in
the United States, as well as Latin American, European, and Asian countries. There are plans torelease it in other countries and territories in the future.

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

Business Results and Outlook(100 million yen)

Pitavastatin calcium (LIVALO®)This activates the thrombopoietin receptor, which is a hematopoietic factor. This is orally
administrable drug and enables to accelerate platelet production. It has the potential to be a drug fortreating every kind of thrombocytopenia.

After Launch
Sales milestone
Royalty

Main Products

While sales of LIVALO® continued to grow on theoverseas market in FY2016, figures were down in thedomestic market due to the increasing availability ofgeneric products. Sales of Finetech® were strong. We
also brought in revenue from a lump-sum payment
resulting from a joint research agreement with
Mitsubishi Tanabe Pharma Corporation, relating to thedevelopment of new drugs for autoimmune diseases.

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

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

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

▲Finetech® development plant

Nissan Chemical Industries, Ltd. Annual Report 201728

B u s i ness Overvie w

Chemicals
Main Products

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

Melamine

Basic Chemicals
We provide products to meet a wide range of demands, focusing on melamine, sulfuric acid, nitric acid, ammonia and other industrial
chemicals. We also provide high purity chemicals for washing semiconductors.

Fine Chemicals
This business focuses on environmental chemicals such as TEPIC® (a special epoxy compound for sealants), melamine cyanurate andPHOSMEL® (non-halogen flame retardants), phenylphosphonic acid (a surface modifier), and HI-LITE® (sterilizing agent anddisinfectant).

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

Ammonia

AdBlue®

Urea

Melamine

Nitric acidIso cyanuric acid

Production flow of ammonia series products at Toyama Plant
Procurement from outside (as of August 2017)

Onoda Plant

TEPIC®

Chlorine

355

HI-LITE®

343

348

355

100
0

19

19

2013

2014

40

38

36

30
20

Comment

50

39This is our unique, highly branched, saturated fatty alcohols and acids product with a long chain alkyl groupconsisting of carbon 16 to 20. It has been used for various esters, lubricants, cosmetics, and ink modifiers.
▲LED

This is a compound of melamine and isocyanuric acid. We provide a high quality product by integratingproduction from raw materials. MC is highly nitrogen containing compound, which offers superb thermal
stability up to 300°C. It is used as a flame retardant or an auxiliary flame retardant for various engineering
plastics such as nylon resins. It also exhibits outstanding flame retardation when used with flame retardants
such as phosphorus systems or metal hydroxide, and has been added to various plastics.

▲AdBlue® trucks

Chlorinated isocyanulate is the main ingredient in this product, which is used for sterilization and disinfectionof swimming pools and water purification tanks, and thus contributing to public hygiene.

(100 million yen)

300
200

FINEOXOCOL®

Nissan Reishi

Operating income (right axis)
343▲PlywoodThis is a solution of urea in demineralized water used as an operating fluid in diesel-powered freight trucks topurify emissions. We have established and expanded our original supply system addressing customer
needs.

HI-LITE®

Business Results and Outlook
400

AdBlue® (High-grade urea solution)

Melamine cyanurate (MC)Melaminecyanurate

High purity liquid ammonia/
High purity aqueous ammonia

High purity nitric acid

Sales (left axis)

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

This tris (2, 3-Epoxy propyl) isocyanurate is a special tri-functional epoxy compound consisting of a triazine
ring and three glycidyl groups. The triazine ring provides excellent outdoor durability due to its low UVabsorption, while the glycidyl groups provide outstanding heat resistance by densely cross-linking with resins.

Supplying Derivatives that Use Ammonia as Main Raw Material(100 million yen)High purity chemicals

TEPIC®

Features of Our Business
Natural gas

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

Despite maintaining healthy export sales of melamine,
fixed costs for basic chemicals increased in FY2016
due to capital expenditure on initiatives such as
switching feedstocks for ammonia. In terms of finechemicals meanwhile, we saw an increase in revenue
from HI-LITE® and TEPIC®.

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

▲HI-LITE® in use

10
2015

2016

0
2017 (Outlook) (FY)

▲Reishi29

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201730

B u s i ness Overvie w

Chemicals
Main Products

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

Melamine

Basic Chemicals
We provide products to meet a wide range of demands, focusing on melamine, sulfuric acid, nitric acid, ammonia and other industrial
chemicals. We also provide high purity chemicals for washing semiconductors.

Fine Chemicals
This business focuses on environmental chemicals such as TEPIC® (a special epoxy compound for sealants), melamine cyanurate andPHOSMEL® (non-halogen flame retardants), phenylphosphonic acid (a surface modifier), and HI-LITE® (sterilizing agent anddisinfectant).

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

Ammonia

AdBlue®

Urea

Melamine

Nitric acidIso cyanuric acid

Production flow of ammonia series products at Toyama Plant
Procurement from outside (as of August 2017)

Onoda Plant

TEPIC®

Chlorine

355

HI-LITE®

343

348

355

100
0

19

19

2013

2014

40

38

36

30
20

Comment

50

39This is our unique, highly branched, saturated fatty alcohols and acids product with a long chain alkyl groupconsisting of carbon 16 to 20. It has been used for various esters, lubricants, cosmetics, and ink modifiers.
▲LED

This is a compound of melamine and isocyanuric acid. We provide a high quality product by integratingproduction from raw materials. MC is highly nitrogen containing compound, which offers superb thermal
stability up to 300°C. It is used as a flame retardant or an auxiliary flame retardant for various engineering
plastics such as nylon resins. It also exhibits outstanding flame retardation when used with flame retardants
such as phosphorus systems or metal hydroxide, and has been added to various plastics.

▲AdBlue® trucks

Chlorinated isocyanulate is the main ingredient in this product, which is used for sterilization and disinfectionof swimming pools and water purification tanks, and thus contributing to public hygiene.

(100 million yen)

300
200

FINEOXOCOL®

Nissan Reishi

Operating income (right axis)
343▲PlywoodThis is a solution of urea in demineralized water used as an operating fluid in diesel-powered freight trucks topurify emissions. We have established and expanded our original supply system addressing customer
needs.

HI-LITE®

Business Results and Outlook
400

AdBlue® (High-grade urea solution)

Melamine cyanurate (MC)Melaminecyanurate

High purity liquid ammonia/
High purity aqueous ammonia

High purity nitric acid

Sales (left axis)

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

This tris (2, 3-Epoxy propyl) isocyanurate is a special tri-functional epoxy compound consisting of a triazine
ring and three glycidyl groups. The triazine ring provides excellent outdoor durability due to its low UVabsorption, while the glycidyl groups provide outstanding heat resistance by densely cross-linking with resins.

Supplying Derivatives that Use Ammonia as Main Raw Material(100 million yen)High purity chemicals

TEPIC®

Features of Our Business
Natural gas

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

Despite maintaining healthy export sales of melamine,
fixed costs for basic chemicals increased in FY2016
due to capital expenditure on initiatives such as
switching feedstocks for ammonia. In terms of finechemicals meanwhile, we saw an increase in revenue
from HI-LITE® and TEPIC®.

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

▲HI-LITE® in use

10
2015

2016

0
2017 (Outlook) (FY)

▲Reishi29

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201730

B u s i ness Overvie w

Advanced Materials & Planning
Tackling challenges in new fields with an “undaunted spirit”
Our mission is to create new materials and businesses that will be our pillars for future growth of Performance Materials
and Life Sciences business. We work on developing new materials that meet market needs by making full use of our coretechnologies, “Fine Organic Synthesis”, “Functional Polymer Design”, “Ultrafine Particle Control” and “Biological
Evaluation”. We also promote collaboration between industry, government, and academia, such as alliances with
distinguished companies and joint research with universities, to generate actual demand at an early stage.

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

Main and New Products▲Bioplastic products (illustration purposes only)

Life Sciences Materials

Optical Materials

Cell culture material

SUNCONNECT®

We offer the FCeM series and SphereMax as base materials for three-dimensional cell cultures. Used to culture cells in athree-dimensional state, these products can adjust cells efficiently while mimicking the in vivo environment.
The FCeM® series has been adapted for the evaluation of anticancer drugs because it is capable of culturing large amounts of
iPS / ES cells as well as cancer cells. Just like the FCeM® series, SphereMax® allows for the low adhesion culture of cancer cells.
Evenly dispersed spheres sink to the bottom, making it easy to collect the cultured cells. This makes the SphereMax® useful for
sphere formation assay and 3D imaging analysis.
®

Liquid organic-inorganic hybrid resin materials that exhibit high thermal stability andnear-infrared transparency. Suitable for imprinting methods, photo lithography, andother processes. It is used for optical interconnects for purposes such as opticalwaveguides and lenses for optical connectors.

®

▲Optical printed circuit board (illustration purposes only)▲Cells suspended in culture media

NANOFIBERGEL®
This gelator comprises palmitic acid and dipeptide, and is friendly to people and theenvironment. It changes from a gel (solid) to sol (liquid) in response to stress. It can beprepared in different forms, such as a spray, cream, and stick. Adding active
ingredients such as hyaluronic acid to the gel has the effect that ingredients penetrate
into the skin more slowly. We are continuing to develop products for cosmetics,
quasi-drugs and pharmaceuticals.

Battery Materials
Organic Thin-film Solar Cell Material▲Spray▲Cream▲StickNegative electrode (AI)We are developing the hole collection layer of organic thin-film solar cells. The holecollection layer collects holes from excitons generated in the active layer, and thentransports them to the cathode. At the same time, it blocks the inflow of electrons. It
plays an important role in improving power generation efficiency. We will acceleratemarket development by taking advantage of the features of our materials, such as thecapability of forming highly flat thin films, preparation at the HOMO level, andcompatibility with various printing methods.

Electron collection layer
Active layer(power generation layer)
Hole collection layer

prevelex® (Material for Preventing the Adhesion of Biomolecules)
Applicable from experiments and research to regenerative medicine, it isan ultra-thin film material with nanometer-level thickness which allows theeasy coating of objects of various shapes. It can be coated on PP, COP,
PDMS and other base materials that had been difficult to coat. We are
seeking new customers in the medical equipment field with characteristics
such as prevention of the adhesion of DNA and other biomolecules as wellas cell adhesion and protein adsorption.

Light

Positive electrode (ITO)▲Example for Organic Thin-film Solar Cell

▲Consumables for pharmaceutical research

Secondary Battery Materials
We are working to develop undercoat materials for use in lithium ion batteries. Applying
coating materials to current collectors improves the flow of electricity, which in turnmakes it possible to develop low resistance, high output batteries. This is chiefly
targeted at vehicle batteries, which require higher levels of output, capacity and safety.

▲Electric vehicle

31

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201732

B u s i ness Overvie w

Advanced Materials & Planning
Tackling challenges in new fields with an “undaunted spirit”
Our mission is to create new materials and businesses that will be our pillars for future growth of Performance Materials
and Life Sciences business. We work on developing new materials that meet market needs by making full use of our coretechnologies, “Fine Organic Synthesis”, “Functional Polymer Design”, “Ultrafine Particle Control” and “Biological
Evaluation”. We also promote collaboration between industry, government, and academia, such as alliances with
distinguished companies and joint research with universities, to generate actual demand at an early stage.

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

Main and New Products▲Bioplastic products (illustration purposes only)

Life Sciences Materials

Optical Materials

Cell culture material

SUNCONNECT®

We offer the FCeM series and SphereMax as base materials for three-dimensional cell cultures. Used to culture cells in athree-dimensional state, these products can adjust cells efficiently while mimicking the in vivo environment.
The FCeM® series has been adapted for the evaluation of anticancer drugs because it is capable of culturing large amounts of
iPS / ES cells as well as cancer cells. Just like the FCeM® series, SphereMax® allows for the low adhesion culture of cancer cells.
Evenly dispersed spheres sink to the bottom, making it easy to collect the cultured cells. This makes the SphereMax® useful for
sphere formation assay and 3D imaging analysis.
®

Liquid organic-inorganic hybrid resin materials that exhibit high thermal stability andnear-infrared transparency. Suitable for imprinting methods, photo lithography, andother processes. It is used for optical interconnects for purposes such as opticalwaveguides and lenses for optical connectors.

®

▲Optical printed circuit board (illustration purposes only)▲Cells suspended in culture media

NANOFIBERGEL®
This gelator comprises palmitic acid and dipeptide, and is friendly to people and theenvironment. It changes from a gel (solid) to sol (liquid) in response to stress. It can beprepared in different forms, such as a spray, cream, and stick. Adding active
ingredients such as hyaluronic acid to the gel has the effect that ingredients penetrate
into the skin more slowly. We are continuing to develop products for cosmetics,
quasi-drugs and pharmaceuticals.

Battery Materials
Organic Thin-film Solar Cell Material▲Spray▲Cream▲StickNegative electrode (AI)We are developing the hole collection layer of organic thin-film solar cells. The holecollection layer collects holes from excitons generated in the active layer, and thentransports them to the cathode. At the same time, it blocks the inflow of electrons. It
plays an important role in improving power generation efficiency. We will acceleratemarket development by taking advantage of the features of our materials, such as thecapability of forming highly flat thin films, preparation at the HOMO level, andcompatibility with various printing methods.

Electron collection layer
Active layer(power generation layer)
Hole collection layer

prevelex® (Material for Preventing the Adhesion of Biomolecules)
Applicable from experiments and research to regenerative medicine, it isan ultra-thin film material with nanometer-level thickness which allows theeasy coating of objects of various shapes. It can be coated on PP, COP,
PDMS and other base materials that had been difficult to coat. We are
seeking new customers in the medical equipment field with characteristics
such as prevention of the adhesion of DNA and other biomolecules as wellas cell adhesion and protein adsorption.

Light

Positive electrode (ITO)▲Example for Organic Thin-film Solar Cell

▲Consumables for pharmaceutical research

Secondary Battery Materials
We are working to develop undercoat materials for use in lithium ion batteries. Applying
coating materials to current collectors improves the flow of electricity, which in turnmakes it possible to develop low resistance, high output batteries. This is chiefly
targeted at vehicle batteries, which require higher levels of output, capacity and safety.

▲Electric vehicle

31

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201732

B u s i ness Overvie w

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

Chemical Research Laboratories
Chemical Research Laboratories is Nissan Chemical’s core R&D site,
and is responsible for our corporate research. It researches anddevelops agricultural chemicals and pharmaceuticals that utilize thefine organic synthesis technology we have cultivated over the years,
research on company-wide processes, and material analysis research.
Major research contents
・Discovery of agrochemicals and pharmaceuticals, and the development of agrochemical
formulations and active pharmaceutical ingredients・Development of new organic materials and polymer materials
・Process development of new products and candidates・Material analysis and computational science that support research▲Funabashi, Chiba

Materials Research Laboratories
Materials Research Laboratories create highly unique new materials, allowing us to respond quickly to increasingly sophisticated and diverse market
needs. At the same time, the laboratories focus their efforts on researching next-generation materials in an effort to create new markets.
Major research contents
・Material development based on technologies for the design, synthesis, and evaluation of functional polymers and composite materials
・Development of new materials intended for new display technologies and semiconductor process technologies
・Manufacturing research and the application development of materials such as inorganic particulates

Promotion of Industry-Government-Academia Collaborations
While we deepen our proprietary technologies, we also promote thecreation of new materials and introduction of new technologies
through industry-government-academia collaborations. As part ofthese activities, we are participating in a project of the Japan Agency
for Medical Research and Development (AMED), which was foundedin April 2015, and are working on the development of a cellmanufacturing and processing system for the industrialization ofregenerative medicine. We are conducting joint development with
Kyoto University, and have discovered a technology that leads to the
low-cost manufacturing of iPS cells. We will continue contributing to
the development of regenerative medicine while also proceeding withstate-of-the-art research.

iPS cells

Bone cells

OrgansBlood cells

Nerve cells
Muscle cells▲Regenerative medicine (illustration purposes only)

In the area of collaboration between industry and academia, wehave been involved in research through comprehensive collaboration
with Kyushu University since April 2006. This collaboration aims tocreate new materials through functionalization and application
research, which is conducted by combining the seeds (materials)
owned by us with advanced technologies owned by the university. In
addition to the previously described efforts, we engage in R&D
activities around the world. We collaborate with overseas universities
and participate in an international consortium.
▲Fukuoka Industry-Academia Symphonicity

R&D Expenses
We consider R&D is the source of growth, and have intensively invested our management resources in R&D.
Over the last five years, R&D expenses have totaled 74.8 billion yen. The percentage of our expenses in Performance Materials andLife Sciences (Agricultural Chemicals and Pharmaceuticals) is accounting for 47% and 41% respectively.
▲Funabashi, Chiba▲Sodegaura, Chiba▲Toyama, Toyama

Biological Research Laboratories
Biological Research Laboratories serve as a place for life science
research, such as evaluation research related to the usefulness andsafety of agricultural chemicals, pharmaceuticals, and medical materials.

2016

5

79

2015

5

74

2014

5

67

2013

4

63

38

39

35

22

17

161

24

16

158

27

16

150

Major research contents
・Efficacy tests, safety tests, and residue tests of agrochemicals in greenhouses and on
farmland33

Nissan Chemical Industries, Ltd. Annual Report 2017

29

11

142

■ Chemicals■ Performance Materials

・Pharmacological tests, safety tests and pharmacokinetics tests of pharmaceuticals,
ranging from those on the gene level to those based on pathological models
・Development of medical materials such as cell culture media, stem cell amplifiers, andcoating materials for medical equipment

35

2012

4

65

30

26

137

■ Agricultural Chemicals■ Pharmaceuticals(FY)▲Shiraoka, Saitama

12

0

50

100

150 (100 million yen) ■ Others

Nissan Chemical Industries, Ltd. Annual Report 201734

B u s i ness Overvie w

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

Chemical Research Laboratories
Chemical Research Laboratories is Nissan Chemical’s core R&D site,
and is responsible for our corporate research. It researches anddevelops agricultural chemicals and pharmaceuticals that utilize thefine organic synthesis technology we have cultivated over the years,
research on company-wide processes, and material analysis research.
Major research contents
・Discovery of agrochemicals and pharmaceuticals, and the development of agrochemical
formulations and active pharmaceutical ingredients・Development of new organic materials and polymer materials
・Process development of new products and candidates・Material analysis and computational science that support research▲Funabashi, Chiba

Materials Research Laboratories
Materials Research Laboratories create highly unique new materials, allowing us to respond quickly to increasingly sophisticated and diverse market
needs. At the same time, the laboratories focus their efforts on researching next-generation materials in an effort to create new markets.
Major research contents
・Material development based on technologies for the design, synthesis, and evaluation of functional polymers and composite materials
・Development of new materials intended for new display technologies and semiconductor process technologies
・Manufacturing research and the application development of materials such as inorganic particulates

Promotion of Industry-Government-Academia Collaborations
While we deepen our proprietary technologies, we also promote thecreation of new materials and introduction of new technologies
through industry-government-academia collaborations. As part ofthese activities, we are participating in a project of the Japan Agency
for Medical Research and Development (AMED), which was foundedin April 2015, and are working on the development of a cellmanufacturing and processing system for the industrialization ofregenerative medicine. We are conducting joint development with
Kyoto University, and have discovered a technology that leads to the
low-cost manufacturing of iPS cells. We will continue contributing to
the development of regenerative medicine while also proceeding withstate-of-the-art research.

iPS cells

Bone cells

OrgansBlood cells

Nerve cells
Muscle cells▲Regenerative medicine (illustration purposes only)

In the area of collaboration between industry and academia, wehave been involved in research through comprehensive collaboration
with Kyushu University since April 2006. This collaboration aims tocreate new materials through functionalization and application
research, which is conducted by combining the seeds (materials)
owned by us with advanced technologies owned by the university. In
addition to the previously described efforts, we engage in R&D
activities around the world. We collaborate with overseas universities
and participate in an international consortium.
▲Fukuoka Industry-Academia Symphonicity

R&D Expenses
We consider R&D is the source of growth, and have intensively invested our management resources in R&D.
Over the last five years, R&D expenses have totaled 74.8 billion yen. The percentage of our expenses in Performance Materials andLife Sciences (Agricultural Chemicals and Pharmaceuticals) is accounting for 47% and 41% respectively.
▲Funabashi, Chiba▲Sodegaura, Chiba▲Toyama, Toyama

Biological Research Laboratories
Biological Research Laboratories serve as a place for life science
research, such as evaluation research related to the usefulness andsafety of agricultural chemicals, pharmaceuticals, and medical materials.

2016

5

79

2015

5

74

2014

5

67

2013

4

63

38

39

35

22

17

161

24

16

158

27

16

150

Major research contents
・Efficacy tests, safety tests, and residue tests of agrochemicals in greenhouses and on
farmland33

Nissan Chemical Industries, Ltd. Annual Report 2017

29

11

142

■ Chemicals■ Performance Materials

・Pharmacological tests, safety tests and pharmacokinetics tests of pharmaceuticals,
ranging from those on the gene level to those based on pathological models
・Development of medical materials such as cell culture media, stem cell amplifiers, andcoating materials for medical equipment

35

2012

4

65

30

26

137

■ Agricultural Chemicals■ Pharmaceuticals(FY)▲Shiraoka, Saitama

12

0

50

100

150 (100 million yen) ■ Others

Nissan Chemical Industries, Ltd. Annual Report 201734

CS R M a n a gem ent

Promotion of CSR

Corporate GovernanceOur group considers that the corporate philosophy “We contribute to society in harmony with the environment, based on
our excellent technologies, products and services” is the basis of our business activities. We reviewed our CSR promotion
system and established the CSR Committee in April this year to enhance our CSR activities. The activities of this committee
include the development of mid- and long-term plans and annual plans related to CSR, and the evaluation of the results of
the activities. The committee reports its activities to board meetings twice a year.
At the same time, we established the “CSR & Public Relations Office” under the Corporate Planning Department. The
missions of this new office are “to draw up CSR strategies in response to social trends, to raise awareness of CSR
internally, and to send relevant information”. This office will provide internal and external stakeholders with information
about the company, including the contents of our CSR activities, in an appropriate manner.

We think of corporate governance as a mechanism that ensures sound, efficient management to provide stakeholders withsustainable, long-term profits. Based on this idea, we strive to ensure management decisions are made promptly, and work toclarify the management responsibility and responsibility for executing operations. At the same time, we take initiatives forstrengthening the management’s monitoring function, compliance system, risk management system, and internal control
system under our board meeting and board of corporate auditors, whose members include highly independent outside officers.
In addition, we have put into practice all of the principles stipulated in the Corporate Governance Code, which wasestablished by the Financial Services Agency of Japan and Tokyo Stock Exchange, Inc.

Our Corporate Governance System
Execution and supervision of operations

Basic CSR Policy(1) Conduct sensible business activities as a member of the international community in compliance with laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.
(3) Strive to achieve no-accidents & no-disasters and protect the global environment.
(4) Disclose information appropriately with a focus on communication with stakeholders.
(5) Create a cheerful and pleasant workplace by respecting the individuality and personalities of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

CSR Promotion System
Board Meeting

By introducing a system with executive officers, we clarify the management’s functionof prompt decision-making and supervision and the function of executing operations,
thereby strengthening both. We also strive to improve management’s capabilities todevelop and execute our management strategies. In addition, we have set a
one-year term for each director and executive officer, thereby clarifying themanagement responsibility and the responsibility for executing operations.

Board Meeting
Our board meets once a month, in principle, to resolve important management
matters. It also supervises the execution of operations by directors and executive
officers. We ensure that important management matters are determined throughcareful deliberations at the board meetings or management meetings in our efforts toeliminate or reduce business risks. In addition, the details of decisions made at the
management meetings and the results of business executions based on decisions
made at the board meetings, etc. are reported to the board meetings to enhance thesupervising function of the board meeting.

General Shareholders’ Meeting

Accounting auditor

Management Meeting(Business execution framework)

Compliance Committee[Chairman: Vice President][Chairman: President]

Responsible Care Committee

Quality Assurance Committee

Security Trade Control Committee[Chairman: Head of Environment, Safety & Quality Assurance Department]

We have the Internal Audit Department, which conducts fair and independent internal
audits in accordance with the Internal Auditing Regulations. Business activities arechecked by the Finance & Accounting, Legal, Intellectual Property, and Environment,
Safety & Quality Assurance Departments, with each applying its respective expertise.
Corporate auditors audit the execution of directors’ operation by participating in theboard meetings and other important meetings in accordance with auditing plans
formulated by the board of auditors. They also ensure the appropriate level ofcooperation with stakeholders.

Accounting Audit
Head of Corporate Planning
Department

Head of Corporate Planning
Department

Head of Environment, Safety& Quality Assurance Department

Head of Environment, Safety& Quality Assurance Department

Head of Production
Technology Department

Head of Legal Oﬃce

Head of Personnel Department

Outside Lawyer

Head of Purchasing Department

Oﬃcer in charge of Environment,
Safety & Quality Assurance
Department

Oﬃcer in charge of Environment,
Safety & Quality Assurance
Department

Head of Production
Technology Department

Head of Production
Technology Department

Head of Personnel Department

Head of Purchasing Department

Head of Purchasing Department

Heads of business divisions

Heads of business divisions

Heads of plants and laboratories

Heads of plants and laboratories
Presidents of group companies

35

Nissan Chemical Industries, Ltd. Annual Report 2017

Presidents of group companies

Head of Corporate Planning
Department
Environment & Safety Group
LeaderQuality Assurance Group Leader
Head of Legal Oﬃce

President and CEO

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

Audit

Board of Corporate
Auditors

Each divisions& departments

Cooperate

ReportManagement
Meeting

Group companies

Audit by Corporate Auditors
CSR Committee

Board Meeting

Audit

Internal Audit
President and CEO

ReportInternal Audit
Department

Audit

Audit

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

Number of Major Meetings and Attendances (FY2016)
Board Meeting

12 times

Attendance of outside directors at board meetings

100%

Attendance of outside corporate auditors at board meetings

100%

12 times

Board of Corporate Auditors’ Meeting
Attendance of outside corporate auditors at board of auditors’ meetings

100%

Nissan Chemical Industries, Ltd. Annual Report 201736

CS R M a n a gem ent

Promotion of CSR

Corporate GovernanceOur group considers that the corporate philosophy “We contribute to society in harmony with the environment, based on
our excellent technologies, products and services” is the basis of our business activities. We reviewed our CSR promotion
system and established the CSR Committee in April this year to enhance our CSR activities. The activities of this committee
include the development of mid- and long-term plans and annual plans related to CSR, and the evaluation of the results of
the activities. The committee reports its activities to board meetings twice a year.
At the same time, we established the “CSR & Public Relations Office” under the Corporate Planning Department. The
missions of this new office are “to draw up CSR strategies in response to social trends, to raise awareness of CSR
internally, and to send relevant information”. This office will provide internal and external stakeholders with information
about the company, including the contents of our CSR activities, in an appropriate manner.

We think of corporate governance as a mechanism that ensures sound, efficient management to provide stakeholders withsustainable, long-term profits. Based on this idea, we strive to ensure management decisions are made promptly, and work toclarify the management responsibility and responsibility for executing operations. At the same time, we take initiatives forstrengthening the management’s monitoring function, compliance system, risk management system, and internal control
system under our board meeting and board of corporate auditors, whose members include highly independent outside officers.
In addition, we have put into practice all of the principles stipulated in the Corporate Governance Code, which wasestablished by the Financial Services Agency of Japan and Tokyo Stock Exchange, Inc.

Our Corporate Governance System
Execution and supervision of operations

Basic CSR Policy(1) Conduct sensible business activities as a member of the international community in compliance with laws and regulations.
(2) Enhance corporate value by providing safe and useful products and services.
(3) Strive to achieve no-accidents & no-disasters and protect the global environment.
(4) Disclose information appropriately with a focus on communication with stakeholders.
(5) Create a cheerful and pleasant workplace by respecting the individuality and personalities of employees.
(6) Conduct ourselves as good corporate citizens and decent members of society.

CSR Promotion System
Board Meeting

By introducing a system with executive officers, we clarify the management’s functionof prompt decision-making and supervision and the function of executing operations,
thereby strengthening both. We also strive to improve management’s capabilities todevelop and execute our management strategies. In addition, we have set a
one-year term for each director and executive officer, thereby clarifying themanagement responsibility and the responsibility for executing operations.

Board Meeting
Our board meets once a month, in principle, to resolve important management
matters. It also supervises the execution of operations by directors and executive
officers. We ensure that important management matters are determined throughcareful deliberations at the board meetings or management meetings in our efforts toeliminate or reduce business risks. In addition, the details of decisions made at the
management meetings and the results of business executions based on decisions
made at the board meetings, etc. are reported to the board meetings to enhance thesupervising function of the board meeting.

General Shareholders’ Meeting

Accounting auditor

Management Meeting(Business execution framework)

Compliance Committee[Chairman: Vice President][Chairman: President]

Responsible Care Committee

Quality Assurance Committee

Security Trade Control Committee[Chairman: Head of Environment, Safety & Quality Assurance Department]

We have the Internal Audit Department, which conducts fair and independent internal
audits in accordance with the Internal Auditing Regulations. Business activities arechecked by the Finance & Accounting, Legal, Intellectual Property, and Environment,
Safety & Quality Assurance Departments, with each applying its respective expertise.
Corporate auditors audit the execution of directors’ operation by participating in theboard meetings and other important meetings in accordance with auditing plans
formulated by the board of auditors. They also ensure the appropriate level ofcooperation with stakeholders.

Accounting Audit
Head of Corporate Planning
Department

Head of Corporate Planning
Department

Head of Environment, Safety& Quality Assurance Department

Head of Environment, Safety& Quality Assurance Department

Head of Production
Technology Department

Head of Legal Oﬃce

Head of Personnel Department

Outside Lawyer

Head of Purchasing Department

Oﬃcer in charge of Environment,
Safety & Quality Assurance
Department

Oﬃcer in charge of Environment,
Safety & Quality Assurance
Department

Head of Production
Technology Department

Head of Production
Technology Department

Head of Personnel Department

Head of Purchasing Department

Head of Purchasing Department

Heads of business divisions

Heads of business divisions

Heads of plants and laboratories

Heads of plants and laboratories
Presidents of group companies

35

Nissan Chemical Industries, Ltd. Annual Report 2017

Presidents of group companies

Head of Corporate Planning
Department
Environment & Safety Group
LeaderQuality Assurance Group Leader
Head of Legal Oﬃce

President and CEO

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

Audit

Board of Corporate
Auditors

Each divisions& departments

Cooperate

ReportManagement
Meeting

Group companies

Audit by Corporate Auditors
CSR Committee

Board Meeting

Audit

Internal Audit
President and CEO

ReportInternal Audit
Department

Audit

Audit

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

Number of Major Meetings and Attendances (FY2016)
Board Meeting

12 times

Attendance of outside directors at board meetings

100%

Attendance of outside corporate auditors at board meetings

100%

12 times

Board of Corporate Auditors’ Meeting
Attendance of outside corporate auditors at board of auditors’ meetings

100%

Nissan Chemical Industries, Ltd. Annual Report 201736

C SR Management

Compliance
Policy and Procedures in the Nomination of Officer Candidates
Decisions regarding the nomination of candidates for directors and corporate auditors are made at board meetings attended by outside directors and proposed at
the general shareholders’ meeting. In addition, nominations of corporate auditor candidates are approved by the board of corporate auditors in advance.
PolicyDirectors

Corporate
Auditors

Number stipulated in the
Articles of Incorporation

We operate business activities globally in diverse fields, including chemicals, performancematerials, agricultural chemicals, and pharmaceuticals. Accordingly, in nominating candidates forour directors, we consider the balance between knowledge, experience, capabilities, and otherelements of the overall board of directors and its diversity to ensure that our directors can makedecisions regarding the above business activities and supervise the execution of operations in an
appropriate and flexible manner.
<Internal Directors>
Human resources who have expertise, knowledge and other capacities in each business field suchas corporate planning, personnel, finance & accounting, research and development, production
technology, environment, safety & quality assurance and others.
<Outside Directors>
Human resources who are capable of giving opinions proactively, raising questions and giving
advice on growth strategies, the enhancement of governance and other issues from the viewpointsof various stakeholders and society.

12

Human resources with experience and knowledge in a wide range of fields including finance &accounting who are capable of giving opinions and advice to the management from a fair andneutral standpoint, in addition to auditing the execution of operations.

5

Current
numberNumber of outside officers
included in the figure on the left

Regarding compliance with legislation and social norms to be a prerequisite for our continued survival and development as a company,
we have established a “Compliance Committee” as the organization for actively promoting, maintaining and improving compliancethroughout the entire group. The committee is chaired by the president and consists of members that include outside specialists.
The Compliance Committee specifies the matters to be observed by the Group’s employees, revises guidelines and creates
manuals. It also receives reports from each division / department chief, plant / laboratory chief, related committees and presidents ofsubsidiaries. In addition, it periodically audits the state of compliance and provides recommendations for improvements whennecessary. The committee also holds explanatory sessions on various laws and regulations and compliance, with the secretariat
playing the leading role, in its efforts to ensure compliance with laws and regulations.

Matters to be Observed Stipulated in the Compliance Manual92(2)We have specified the matters to be observed from various points of view, including the prevention of corruption.

Restrictions on acts of endowment and political donations(1) Political donations and donations to various organizations must be made by observing the relevant laws and regulations, such as the Public Offices Election Act
and the Political Funds Control Act, and by following the proper methods.
(2) Prior approval must be obtained by following internal rules before donating money or making any other donation.
(3) Sound, transparent relationships with politicians and the government must be created by refraining strictly from actions that may lead to the misunderstanding that
we have cozy relationships with them, not to mention bribery, payoffs, and illegal political donations.
43(1)The figure in ( ) indicates the number of directors / corporate auditors designated as independent officers.

Policy on Determination of Officers’ Remuneration
The fundamental principle in the determination of officers’ remuneration is to maintain a system of remuneration that is in line with management policy by ensuringthat officers contribute to increasing operating performance on a continual basis over the mid- to long-term and toward increasing the overall value of the group,
thereby meeting shareholder expectations. At the same time, the basic policy is to set remuneration at an appropriate level, taking into account such factors as the
management environment, operating performance and consistency with the treatment of employees.
The remunerations of individual directors are determined within the total amount determined by resolution of the general shareholders’ meeting at the board
meeting attended by outside directors as well. The remunerations of individual corporate auditors are determined through discussions by the corporate auditors.

Analysis and Evaluation of the Effectiveness of the Overall Board of Directors (Effectiveness Evaluation)
Every year, we conduct a questionnaire survey of all of our directors to see whether the board of directors is fulfilling its roles and duties. Based on the responses tothe questionnaire, we undertake an analysis and evaluation at an opinion exchange meeting (of all independent officers, the president, the vice president and head of
the Corporate Planning Department). The contents of the analysis and evaluation are deliberated and confirmed at the board meeting.
As a result of the effectiveness evaluation in FY2016, it was judged that the overall operation of the board of directors of the company is mostly appropriate and its
effectiveness is secured from the viewpoint of whether it is fulfilling its major roles and duties. However, it was determined that, to aim for further improvement in thefollowing points, the level of achievement of each of them will be checked and improvement measures will be taken as necessary from the next fiscal year onward.

Prohibition of excessive entertainment and gift-giving(1) Entertainment and gift-giving for public officials or quasi-public officials that contravene the regulations under the National Public Service Ethics Act, etc. are prohibited.
(2) Entertainment and gifts to business partners must be given within the bounds of common sense of the general public.
(3) Response to entertainment or a gift offered by our client or business partner, etc. must not be made before consulting our superiors when the entertainment or
the gift is suspected to be beyond the bounds of common sense of the general public.

Prohibition of bribery of foreign public officials

It is prohibited to provide foreign public officials, etc. with money or any other favors to gain illegal profits in the course of business or in return for favors provided bythem in business, either directly or via a third party such as a consultant. It is also prohibited to promise or offer to provide such favors.
Matters to be observed that are stipulated in the compliance manual are described at http://www.nissanchem.co.jp/eng/profile/compliance.html

Measures for Promoting Compliance (FY2016)
Internal training (explanatory sessions): Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, Insider Trading Regulations, General Data Protection
Regulations
Response to Guidelines for the Prevention of Bribery of Foreign Public Officials: Internal notification of the law, revision to the compliance manual
Response to the revised Act on the Protection of Personal Information: Revision to the Regulations for Information Management
Consultation Hotline
We have a system that permits direct whistleblowing to the Compliance Committee.
When an employee discovers a compliance violation or potential compliance violation,
they shall address the problem in normal operations, in principle, through measures that
include reporting the matter to their superior. However, if they think it is difficult to address
the problem promptly and effectively, they can use the hotline to prevent complianceviolations or resolve the problem early on. Whistleblowers can remain anonymous and ifthey state their name, we make sure that they are not disadvantaged by the use of the
hotline.
In FY2016, there were no cases of whistleblowing. We inform employees of the system
via our in-house newsletter.

Major improvements to be undertaken in the future

・Creating a system that will allow directors, including outside directors, to hold discussions and exchange opinions in an even more unrestricted manner
・Undertaking thorough deliberations regarding preparations for risks and negative aspects
・Recruitment of women and external human resources with extensive experience in business administration

Consultation Hotline Reports (Number)

FY2012FY2013

FY2014FY2015FY2016

0

2

1

1

0

The major roles and duties of the board of directors are described in our corporate governance report.
http://www.nissanchem.co.jp/eng/profile/corporate_governance.pdf
37

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201738

C SR Management

Compliance
Policy and Procedures in the Nomination of Officer Candidates
Decisions regarding the nomination of candidates for directors and corporate auditors are made at board meetings attended by outside directors and proposed at
the general shareholders’ meeting. In addition, nominations of corporate auditor candidates are approved by the board of corporate auditors in advance.
PolicyDirectors

Corporate
Auditors

Number stipulated in the
Articles of Incorporation

We operate business activities globally in diverse fields, including chemicals, performancematerials, agricultural chemicals, and pharmaceuticals. Accordingly, in nominating candidates forour directors, we consider the balance between knowledge, experience, capabilities, and otherelements of the overall board of directors and its diversity to ensure that our directors can makedecisions regarding the above business activities and supervise the execution of operations in an
appropriate and flexible manner.
<Internal Directors>
Human resources who have expertise, knowledge and other capacities in each business field suchas corporate planning, personnel, finance & accounting, research and development, production
technology, environment, safety & quality assurance and others.
<Outside Directors>
Human resources who are capable of giving opinions proactively, raising questions and giving
advice on growth strategies, the enhancement of governance and other issues from the viewpointsof various stakeholders and society.

12

Human resources with experience and knowledge in a wide range of fields including finance &accounting who are capable of giving opinions and advice to the management from a fair andneutral standpoint, in addition to auditing the execution of operations.

5

Current
numberNumber of outside officers
included in the figure on the left

Regarding compliance with legislation and social norms to be a prerequisite for our continued survival and development as a company,
we have established a “Compliance Committee” as the organization for actively promoting, maintaining and improving compliancethroughout the entire group. The committee is chaired by the president and consists of members that include outside specialists.
The Compliance Committee specifies the matters to be observed by the Group’s employees, revises guidelines and creates
manuals. It also receives reports from each division / department chief, plant / laboratory chief, related committees and presidents ofsubsidiaries. In addition, it periodically audits the state of compliance and provides recommendations for improvements whennecessary. The committee also holds explanatory sessions on various laws and regulations and compliance, with the secretariat
playing the leading role, in its efforts to ensure compliance with laws and regulations.

Matters to be Observed Stipulated in the Compliance Manual92(2)We have specified the matters to be observed from various points of view, including the prevention of corruption.

Restrictions on acts of endowment and political donations(1) Political donations and donations to various organizations must be made by observing the relevant laws and regulations, such as the Public Offices Election Act
and the Political Funds Control Act, and by following the proper methods.
(2) Prior approval must be obtained by following internal rules before donating money or making any other donation.
(3) Sound, transparent relationships with politicians and the government must be created by refraining strictly from actions that may lead to the misunderstanding that
we have cozy relationships with them, not to mention bribery, payoffs, and illegal political donations.
43(1)The figure in ( ) indicates the number of directors / corporate auditors designated as independent officers.

Policy on Determination of Officers’ Remuneration
The fundamental principle in the determination of officers’ remuneration is to maintain a system of remuneration that is in line with management policy by ensuringthat officers contribute to increasing operating performance on a continual basis over the mid- to long-term and toward increasing the overall value of the group,
thereby meeting shareholder expectations. At the same time, the basic policy is to set remuneration at an appropriate level, taking into account such factors as the
management environment, operating performance and consistency with the treatment of employees.
The remunerations of individual directors are determined within the total amount determined by resolution of the general shareholders’ meeting at the board
meeting attended by outside directors as well. The remunerations of individual corporate auditors are determined through discussions by the corporate auditors.

Analysis and Evaluation of the Effectiveness of the Overall Board of Directors (Effectiveness Evaluation)
Every year, we conduct a questionnaire survey of all of our directors to see whether the board of directors is fulfilling its roles and duties. Based on the responses tothe questionnaire, we undertake an analysis and evaluation at an opinion exchange meeting (of all independent officers, the president, the vice president and head of
the Corporate Planning Department). The contents of the analysis and evaluation are deliberated and confirmed at the board meeting.
As a result of the effectiveness evaluation in FY2016, it was judged that the overall operation of the board of directors of the company is mostly appropriate and its
effectiveness is secured from the viewpoint of whether it is fulfilling its major roles and duties. However, it was determined that, to aim for further improvement in thefollowing points, the level of achievement of each of them will be checked and improvement measures will be taken as necessary from the next fiscal year onward.

Prohibition of excessive entertainment and gift-giving(1) Entertainment and gift-giving for public officials or quasi-public officials that contravene the regulations under the National Public Service Ethics Act, etc. are prohibited.
(2) Entertainment and gifts to business partners must be given within the bounds of common sense of the general public.
(3) Response to entertainment or a gift offered by our client or business partner, etc. must not be made before consulting our superiors when the entertainment or
the gift is suspected to be beyond the bounds of common sense of the general public.

Prohibition of bribery of foreign public officials

It is prohibited to provide foreign public officials, etc. with money or any other favors to gain illegal profits in the course of business or in return for favors provided bythem in business, either directly or via a third party such as a consultant. It is also prohibited to promise or offer to provide such favors.
Matters to be observed that are stipulated in the compliance manual are described at http://www.nissanchem.co.jp/eng/profile/compliance.html

Measures for Promoting Compliance (FY2016)
Internal training (explanatory sessions): Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, Insider Trading Regulations, General Data Protection
Regulations
Response to Guidelines for the Prevention of Bribery of Foreign Public Officials: Internal notification of the law, revision to the compliance manual
Response to the revised Act on the Protection of Personal Information: Revision to the Regulations for Information Management
Consultation Hotline
We have a system that permits direct whistleblowing to the Compliance Committee.
When an employee discovers a compliance violation or potential compliance violation,
they shall address the problem in normal operations, in principle, through measures that
include reporting the matter to their superior. However, if they think it is difficult to address
the problem promptly and effectively, they can use the hotline to prevent complianceviolations or resolve the problem early on. Whistleblowers can remain anonymous and ifthey state their name, we make sure that they are not disadvantaged by the use of the
hotline.
In FY2016, there were no cases of whistleblowing. We inform employees of the system
via our in-house newsletter.

Major improvements to be undertaken in the future

・Creating a system that will allow directors, including outside directors, to hold discussions and exchange opinions in an even more unrestricted manner
・Undertaking thorough deliberations regarding preparations for risks and negative aspects
・Recruitment of women and external human resources with extensive experience in business administration

Consultation Hotline Reports (Number)

FY2012FY2013

FY2014FY2015FY2016

0

2

1

1

0

The major roles and duties of the board of directors are described in our corporate governance report.
http://www.nissanchem.co.jp/eng/profile/corporate_governance.pdf
37

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201738

C SR Management

Risk Management

Value Chain

We have established risk management guidelines with basic rules on risk management to prevent the emergence of various risks to theGroup that could affect the achievement of the following items, and minimize the damage and impact of these risks should they arise.

Supply Chain Management

1. Ensuring the safety of human resources

3. Sound maintenance of assets

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

2. Surviving as a company

4. Maintaining trust of stakeholders

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

Risk Management Framework

We have established a policy on the procurement of raw materials and materials. We work on priority topics of CSR together with our business partners in ourefforts to fulfill our corporate social responsibility.
Before outsourcing an operation such as the manufacture of important raw materials, intermediates and products, we ask the potential contractor to answer aquestionnaire on CSR. We give priority to companies which fulfill our standards when selecting business partners. We also conduct on-site audits of suppliers inJapan and overseas to check their initiatives for CSR activities in detail, with a particular focus on their activities related to the environment, health and safety (EHS)
in our efforts to promote supply chain management. In addition, we have made it our policy not to use conflict minerals and raw materials containing such minerals
related to inhumane armed groups in the Democratic Republic of the Congo and surrounding countries.

Board Meeting
Risk
Management Meeting
CRO
Risk Management Office(Corporate Planning Department)
Division /Department Heads

Risk Managers(Each division / department, plant /laboratory and consolidated subsidiary)

CSR Committee
Compliance Committee
Responsible Care Committee
Quality Assurance Committee
Security Trade Control Committee
ReportWe appoint risk managers to divisions, departments, plants, laboratories and group companies under the overall control of the Chief Risk Management Officer (CRO)appointed by the board of directors. We run the Risk Management Meeting with the Corporate Planning Department serving as the Risk Management Office.
At the Risk Management Meeting, we cooperate with specialized committees in identifying and assessing risks in individual organizations, examining the status of
the implementation of countermeasures, strengthening systems for handling crises and emergencies, and formulating a business continuity plan (BCP). In addition, we
share the risk management information of the entire group through the annual plan, the annual review of risk management activities and reports from all organizations.
The status of risk management is reported regularly to the board meeting via CRO.

Major Initiatives in FY2016● Checking the status of BCPs of important businesses and reviewing them ● Strengthening overseas risk management● Provision of training on initial response by the emergency headquarters of the head office, and training on safety confirmation

Information Disclosure

Purchase Policy
We procure and purchase raw materials and materials in accordance with our Basic CSR Policy.
1. Compliance with laws, regulations, and social norms
We promote sound procurement and purchase activities by observing all relevant laws, regulations, social norms, and internal regulations, as well as corporate ethics.
2. Fair, equitable, transparent trades
We continue to create opportunities for business with new suppliers, without adhering to past purchases or the corporate group, thereby ensuring fair, equitable,transparent trades.
3. Procurement and purchase based on economic rationality
We undertake procurement and purchase that are optimal for us based on a comprehensive evaluation of quality, price, stable supply, technology development
capabilities, stable management and other factors.
4. Consideration for the global environment
To achieve a sustainable society, we strive to remain conscious of the protection of the global environment in our procurement and purchase activities.
5. Establishment of partnership
Based on our fundamental recognition that all of our business partners are essential for executing businesses, we establish relationships of mutual trust with them in ourefforts to achieve further development. We will also work on the following themes with our business partners in our efforts to fulfill our corporate social responsibility.
1) Compliance with laws, regulations, social norms and corporate ethics
2) Ensure safety and protecting the environment3) Respect human rights and giving consideration to the work environment

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

Disclosure of Product SDS

Board Meeting
President and CEO
Management Meeting

Financial Results
Information

Head of Finance &Accounting Department

Tokyo Stock Exchange
Judgment of necessity of timely disclosure

Head of Corporate
Planning Department(Chief Information Officer)

Head of Each Division

Group Companies

Information that may apply tofacts decided or occurred

Environmental Reporting Platform Development Pilot ProjectAs a measure for disclosing environmental, social and governance (ESG) information, which has been increasingly demanded by institutional investors in recent
years, we disclose information by participating in the “Environmental Reporting Platform Development Pilot Project”, which is led by the Ministry of the Environmentof Japan.
39

Nissan Chemical Industries, Ltd. Annual Report 2017

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

Disclosure of GPS Safety Summaries
We participate in the Global Product Strategy (GPS) / Japan Initiative of Product Stewardship (JIPS) activities that are promoted by the International Council of
Chemical Associations (ICCA) and the Japan Chemical Industry Association (JCIA). We assess the risk of chemical products, manage them properly, compile theirsafety information in the GPS Safety Summary and make it available to the public. The disclosure of this information helps to minimize the risks of chemical
substances throughout the entire value chain.
Nissan Chemical Industries, Ltd. Annual Report 201740

C SR Management

Risk Management

Value Chain

We have established risk management guidelines with basic rules on risk management to prevent the emergence of various risks to theGroup that could affect the achievement of the following items, and minimize the damage and impact of these risks should they arise.

Supply Chain Management

1. Ensuring the safety of human resources

3. Sound maintenance of assets

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

2. Surviving as a company

4. Maintaining trust of stakeholders

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

Risk Management Framework

We have established a policy on the procurement of raw materials and materials. We work on priority topics of CSR together with our business partners in ourefforts to fulfill our corporate social responsibility.
Before outsourcing an operation such as the manufacture of important raw materials, intermediates and products, we ask the potential contractor to answer aquestionnaire on CSR. We give priority to companies which fulfill our standards when selecting business partners. We also conduct on-site audits of suppliers inJapan and overseas to check their initiatives for CSR activities in detail, with a particular focus on their activities related to the environment, health and safety (EHS)
in our efforts to promote supply chain management. In addition, we have made it our policy not to use conflict minerals and raw materials containing such minerals
related to inhumane armed groups in the Democratic Republic of the Congo and surrounding countries.

Board Meeting
Risk
Management Meeting
CRO
Risk Management Office(Corporate Planning Department)
Division /Department Heads

Risk Managers(Each division / department, plant /laboratory and consolidated subsidiary)

CSR Committee
Compliance Committee
Responsible Care Committee
Quality Assurance Committee
Security Trade Control Committee
ReportWe appoint risk managers to divisions, departments, plants, laboratories and group companies under the overall control of the Chief Risk Management Officer (CRO)appointed by the board of directors. We run the Risk Management Meeting with the Corporate Planning Department serving as the Risk Management Office.
At the Risk Management Meeting, we cooperate with specialized committees in identifying and assessing risks in individual organizations, examining the status of
the implementation of countermeasures, strengthening systems for handling crises and emergencies, and formulating a business continuity plan (BCP). In addition, we
share the risk management information of the entire group through the annual plan, the annual review of risk management activities and reports from all organizations.
The status of risk management is reported regularly to the board meeting via CRO.

Major Initiatives in FY2016● Checking the status of BCPs of important businesses and reviewing them ● Strengthening overseas risk management● Provision of training on initial response by the emergency headquarters of the head office, and training on safety confirmation

Information Disclosure

Purchase Policy
We procure and purchase raw materials and materials in accordance with our Basic CSR Policy.
1. Compliance with laws, regulations, and social norms
We promote sound procurement and purchase activities by observing all relevant laws, regulations, social norms, and internal regulations, as well as corporate ethics.
2. Fair, equitable, transparent trades
We continue to create opportunities for business with new suppliers, without adhering to past purchases or the corporate group, thereby ensuring fair, equitable,transparent trades.
3. Procurement and purchase based on economic rationality
We undertake procurement and purchase that are optimal for us based on a comprehensive evaluation of quality, price, stable supply, technology development
capabilities, stable management and other factors.
4. Consideration for the global environment
To achieve a sustainable society, we strive to remain conscious of the protection of the global environment in our procurement and purchase activities.
5. Establishment of partnership
Based on our fundamental recognition that all of our business partners are essential for executing businesses, we establish relationships of mutual trust with them in ourefforts to achieve further development. We will also work on the following themes with our business partners in our efforts to fulfill our corporate social responsibility.
1) Compliance with laws, regulations, social norms and corporate ethics
2) Ensure safety and protecting the environment3) Respect human rights and giving consideration to the work environment

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

Disclosure of Product SDS

Board Meeting
President and CEO
Management Meeting

Financial Results
Information

Head of Finance &Accounting Department

Tokyo Stock Exchange
Judgment of necessity of timely disclosure

Head of Corporate
Planning Department(Chief Information Officer)

Head of Each Division

Group Companies

Information that may apply tofacts decided or occurred

Environmental Reporting Platform Development Pilot ProjectAs a measure for disclosing environmental, social and governance (ESG) information, which has been increasingly demanded by institutional investors in recent
years, we disclose information by participating in the “Environmental Reporting Platform Development Pilot Project”, which is led by the Ministry of the Environmentof Japan.
39

Nissan Chemical Industries, Ltd. Annual Report 2017

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

Disclosure of GPS Safety Summaries
We participate in the Global Product Strategy (GPS) / Japan Initiative of Product Stewardship (JIPS) activities that are promoted by the International Council of
Chemical Associations (ICCA) and the Japan Chemical Industry Association (JCIA). We assess the risk of chemical products, manage them properly, compile theirsafety information in the GPS Safety Summary and make it available to the public. The disclosure of this information helps to minimize the risks of chemical
substances throughout the entire value chain.
Nissan Chemical Industries, Ltd. Annual Report 201740

Re s p o n s i b l e C ar e ( R C ) Activit ies

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

Nissan Chemical RC Management System
To achieve our RC mid-term plan, we have established RC management system based on ISO14001*, and we carry out
target management and continuous improvements based on PDCA.
We have established the RC Committee, which is chaired by the head of the Environment, Safety & Quality Assurance
Department, as the organization in charge of promoting these activities. The committee holds annual meetings, at which its
members discuss the results of activities at each laboratory / plant in each fiscal year, review all the activities of thecompany, and discuss the RC targets for the next fiscal year.
The results of the discussions are reported and approved at board meeting and the management meeting before the RC
targets for the next fiscal year are determined.

* International standard for environmental management system. All of our plants have acquired ISO 14001 third party certification.
Responsible Care Committee(Report, annual plan development)

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

PLAN

Four Codes of RC

Environmental Protection /ACTION Safety and Disaster Prevention /Occupational Safety and Health /Corrective actions
Chemicals and Product Safety
Annual results report

Implement in accordancewith annual plan

DO

CHECK
Internal audit

Selection of Material Issues in RC
To enhance our EHS initiatives, we have selected “countermeasures to address climate change” and “occupational safety
and health” as material issues that we should work on intensively in our RC activities.
We have selected material issues in light of our RC mid-term plan and international indices such as ISO 26000, the Ten
Principles of the UN Global Compact, SDGs, and the Global Risks Report 2017. We set their priorities based on thepriorities of our stakeholders and their materiality for us, thereby narrowing down to the above two issues, and obtained
approval at the board meeting and the management meeting.
Moving forward, we will carry out target management and evaluation based on PDCA and review the material issues in
response to our business activities or social change or when otherwise necessary.

Selection of candidates for material issues

・RC mid-term plan・International indicesSetting priorities
Approval▲ RC Committee: Officer in charge of the Environment, Safety & Quality Assurance Department and the heads of the Production Technology Department,
Personnel Department, Purchasing Department, business divisions, and all plants and laboratories. Meetings are held annually.
(Chairman: Head of Environment, Safety & Quality Assurance Department)

41

Nissan Chemical Industries, Ltd. Annual Report 2017

(Board meeting and management meeting)・Countermeasures to address climate change・Occupational safety and health

Nissan Chemical Industries, Ltd. Annual Report 201742

Re s p o n s i b l e C ar e ( R C ) Activit ies

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

Nissan Chemical RC Management System
To achieve our RC mid-term plan, we have established RC management system based on ISO14001*, and we carry out
target management and continuous improvements based on PDCA.
We have established the RC Committee, which is chaired by the head of the Environment, Safety & Quality Assurance
Department, as the organization in charge of promoting these activities. The committee holds annual meetings, at which its
members discuss the results of activities at each laboratory / plant in each fiscal year, review all the activities of thecompany, and discuss the RC targets for the next fiscal year.
The results of the discussions are reported and approved at board meeting and the management meeting before the RC
targets for the next fiscal year are determined.

* International standard for environmental management system. All of our plants have acquired ISO 14001 third party certification.
Responsible Care Committee(Report, annual plan development)

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

PLAN

Four Codes of RC

Environmental Protection /ACTION Safety and Disaster Prevention /Occupational Safety and Health /Corrective actions
Chemicals and Product Safety
Annual results report

Implement in accordancewith annual plan

DO

CHECK
Internal audit

Selection of Material Issues in RC
To enhance our EHS initiatives, we have selected “countermeasures to address climate change” and “occupational safety
and health” as material issues that we should work on intensively in our RC activities.
We have selected material issues in light of our RC mid-term plan and international indices such as ISO 26000, the Ten
Principles of the UN Global Compact, SDGs, and the Global Risks Report 2017. We set their priorities based on thepriorities of our stakeholders and their materiality for us, thereby narrowing down to the above two issues, and obtained
approval at the board meeting and the management meeting.
Moving forward, we will carry out target management and evaluation based on PDCA and review the material issues in
response to our business activities or social change or when otherwise necessary.

Selection of candidates for material issues

・RC mid-term plan・International indicesSetting priorities
Approval▲ RC Committee: Officer in charge of the Environment, Safety & Quality Assurance Department and the heads of the Production Technology Department,
Personnel Department, Purchasing Department, business divisions, and all plants and laboratories. Meetings are held annually.
(Chairman: Head of Environment, Safety & Quality Assurance Department)

41

Nissan Chemical Industries, Ltd. Annual Report 2017

(Board meeting and management meeting)・Countermeasures to address climate change・Occupational safety and health

Nissan Chemical Industries, Ltd. Annual Report 201742

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Promotion of the RC Mid-Term Plan (FY2016 – 2021)
Responsible
Care Code

Mid-term plan (FY2016 - 2021)

Achievement assessment☆☆☆＝100 - 70%, ☆☆＝70 - 30%, ☆＝30% or below

FY2016 plan

・Energy consumption (crude oil equivalent) increased slightly (up 600 kiloliters year on year to 99,400 kiloliters).
The energy consumption rate was reduced by 16.9% from the year 2011 level.
・Energy saving through the improvement of equipment
capacity and the renewal of aging facilities, etc.
・The conversion of waste solvents into forms of fuel has progressed as planned.
・GHG emissions were reduced by 30,000 tons (equivalent to around 6% of the total emissions) ・Reducing GHG emissions further through fuelconversion for melamine, etc.
due to the switching of the feedstock for ammonia.
・Reducing N2O generated from nitric acid plants
・The Eco Track System, a system for managing environmental data, was introduced(and began to be operated in FY2017).

・Reducing the energy consumption rate*1
・Energy saving through the renewal of aging facilities(achieving a 20% reduction from the year 2011 level by 2021)
・Promoting the conversion of waste solvents into forms
2・Reducing GHG emissions and improving the GHG emission rate*of fuelReducing the total amount of emissions during the period of the mid-term plan (2016 to 2021)
by 100,000 tons compared to the period of the previous mid-term plan (2010 to 2015) ・Switching from naphtha to liquefied natural gas as
the feedstock for ammonia
Improving the emission rate by 20% from the FY2011 level by FY2021(Reducing GHG emissions by 10,000 tons)
1 Amount of energy consumption / sales 2 Emissions / sales**

Environmental
・Reducing industrial waste
protection andcountermeasures
Establishing a CSR supply chain management (green procurement) system
to address climate ・change・Promoting the reuse and recycling of waste
・Conducting EHS audits of important business partners

FY2017 plan☆☆☆

・Data on the amount of industrial emissions and valuables of all plants were checked.
The recycling rate was defined and preparations for its improvement were made.

・Setting a recycling rate target

・EHS audits of important raw material suppliers were conducted.
・The purchase policy was revised in line with CSR promotion.

・Continuously conducting EHS audits
・Checking CSR measures taken in the supply chain

・Continuous activities based on biodiversity action
guidelines

・Strengthening measures for protecting biodiversity

・Continuing activities based on biodiversity action
guidelines

・Support for a NPO named “Kurohama-numa Shuhen no Shizen wo Taisetsu ni Suru Kai(Society for Cherishing the Natural Environment around Kurohamanuma Pond)”,and information sharing with it (Biological Research Laboratories)
・Participation in cleanup activities for the Fujimae-Higata tidal flat (Nagoya Plant)
・Management of Bio-park (Toyama Plant)
・Support for the conservation of Pinus pentaphylla (Sodegaura Plant), etc.

・Promoting the development and sales of environmentally friendly products

・Promoting the sale of environmentally friendly products

・Increased production bases of AdBlue® for processing exhaust gas from diesel vehicles
Update of JIS mark certification

・Promoting the sale of environmentally friendly products☆☆☆

・Safety culture evaluation was expanded to affiliates.
Departments with problems and identified problems were set as improvement themes
through evaluative analysis.
・Risk assessment of chemicals was carried out.

・Review of prior assessment guideline and its revision☆☆

・Fall accidents decreased due to the renewal of facilities and other measures.
・Occupational safety newspaper was published.
・There was one case of an accident requiring staff time off from work. There were twocases of accidents involving employees of subcontractors including temporary staff.

・Capital investment for safety (350 million yen for three years)
・Checking the status of occupational safety at affiliates
and giving them directions on occupational safety☆☆☆

・Internal standards for the risk assessment and safety measures were created.
・Safety summary of urea was disclosed.
・We participated in activities with non-animal methods, etc. We participated in the International
Council of Chemical Associations’ Long-Range Research Initiative (ICCA-LRI) Workshop.

・Confirming risk assessment management
・Continuing the disclosure of safety summaries ofchemical substances

・Creating a safety culture and improving the safety capabilities
・Optimizing the method for evaluating the safety culture
Safety and
Improvingtheeffectiveness
of
the
prior
assessment
systemsformanufacturing,・・Enhancing the risk assessment performed in priordisaster prevention
construction work and improving the effectiveness of researchassessment
Occupationalsafety and health・Establishing an occupational safety and health management system basedon ISO45001
・Achieving zero accidents that require staff time off from work

Chemicals andproduct safety

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

・Improving occupational safety through equipment
improvement
・Publishing an occupational safety newspaper・Strengthening inspections for occupational safety and healthin RC audits
・Creating internal standards for the risk assessment ofchemical substances and safety measures based on safety data
・Promoting the disclosure of safety summaries of chemical
substances
・Participating in LRI*3 activities organized by the Japan
Chemical Industry Association*3 Long-range Research Initiative：an international initiative to provide long-term support for research on the impact of chemicals on human health and the environment

RC Audits
RC audits are activities for checking RC activities at each plant, laboratory, and affiliate. They are carried out by the Environment, Safety & Quality
Assurance Department in accordance with the RC audit guidelines. In these audits, it is checked whether RC activities, as well as internal audits andpatrols, are carried out appropriately at each location and the PDCA cycle is implemented without fail. In the RC audits, the Environment, Safety &Quality Assurance Department clarifies visible or potential problems related to the EHS and promotes improvements in response after clarifying the
problems, if any. In FY2016, a total of 43 audits were conducted.
T O P I C S

Safety Audits
In safety audits, the Environment, Safety & Quality Assurance Department identifies unsafe places and unsafe behaviors in a preventive
manner by monitoring works on site. These audits were conducted at five selected locations, including those with frequent accidents
and where a serious accident has occurred. We will continue to conduct audits that are aimed exclusively at checking worker safety.

43

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201744

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Promotion of the RC Mid-Term Plan (FY2016 – 2021)
Responsible
Care Code

Mid-term plan (FY2016 - 2021)

Achievement assessment☆☆☆＝100 - 70%, ☆☆＝70 - 30%, ☆＝30% or below

FY2016 plan

・Energy consumption (crude oil equivalent) increased slightly (up 600 kiloliters year on year to 99,400 kiloliters).
The energy consumption rate was reduced by 16.9% from the year 2011 level.
・Energy saving through the improvement of equipment
capacity and the renewal of aging facilities, etc.
・The conversion of waste solvents into forms of fuel has progressed as planned.
・GHG emissions were reduced by 30,000 tons (equivalent to around 6% of the total emissions) ・Reducing GHG emissions further through fuelconversion for melamine, etc.
due to the switching of the feedstock for ammonia.
・Reducing N2O generated from nitric acid plants
・The Eco Track System, a system for managing environmental data, was introduced(and began to be operated in FY2017).

・Reducing the energy consumption rate*1
・Energy saving through the renewal of aging facilities(achieving a 20% reduction from the year 2011 level by 2021)
・Promoting the conversion of waste solvents into forms
2・Reducing GHG emissions and improving the GHG emission rate*of fuelReducing the total amount of emissions during the period of the mid-term plan (2016 to 2021)
by 100,000 tons compared to the period of the previous mid-term plan (2010 to 2015) ・Switching from naphtha to liquefied natural gas as
the feedstock for ammonia
Improving the emission rate by 20% from the FY2011 level by FY2021(Reducing GHG emissions by 10,000 tons)
1 Amount of energy consumption / sales 2 Emissions / sales**

Environmental
・Reducing industrial waste
protection andcountermeasures
Establishing a CSR supply chain management (green procurement) system
to address climate ・change・Promoting the reuse and recycling of waste
・Conducting EHS audits of important business partners

FY2017 plan☆☆☆

・Data on the amount of industrial emissions and valuables of all plants were checked.
The recycling rate was defined and preparations for its improvement were made.

・Setting a recycling rate target

・EHS audits of important raw material suppliers were conducted.
・The purchase policy was revised in line with CSR promotion.

・Continuously conducting EHS audits
・Checking CSR measures taken in the supply chain

・Continuous activities based on biodiversity action
guidelines

・Strengthening measures for protecting biodiversity

・Continuing activities based on biodiversity action
guidelines

・Support for a NPO named “Kurohama-numa Shuhen no Shizen wo Taisetsu ni Suru Kai(Society for Cherishing the Natural Environment around Kurohamanuma Pond)”,and information sharing with it (Biological Research Laboratories)
・Participation in cleanup activities for the Fujimae-Higata tidal flat (Nagoya Plant)
・Management of Bio-park (Toyama Plant)
・Support for the conservation of Pinus pentaphylla (Sodegaura Plant), etc.

・Promoting the development and sales of environmentally friendly products

・Promoting the sale of environmentally friendly products

・Increased production bases of AdBlue® for processing exhaust gas from diesel vehicles
Update of JIS mark certification

・Promoting the sale of environmentally friendly products☆☆☆

・Safety culture evaluation was expanded to affiliates.
Departments with problems and identified problems were set as improvement themes
through evaluative analysis.
・Risk assessment of chemicals was carried out.

・Review of prior assessment guideline and its revision☆☆

・Fall accidents decreased due to the renewal of facilities and other measures.
・Occupational safety newspaper was published.
・There was one case of an accident requiring staff time off from work. There were twocases of accidents involving employees of subcontractors including temporary staff.

・Capital investment for safety (350 million yen for three years)
・Checking the status of occupational safety at affiliates
and giving them directions on occupational safety☆☆☆

・Internal standards for the risk assessment and safety measures were created.
・Safety summary of urea was disclosed.
・We participated in activities with non-animal methods, etc. We participated in the International
Council of Chemical Associations’ Long-Range Research Initiative (ICCA-LRI) Workshop.

・Confirming risk assessment management
・Continuing the disclosure of safety summaries ofchemical substances

・Creating a safety culture and improving the safety capabilities
・Optimizing the method for evaluating the safety culture
Safety and
Improvingtheeffectiveness
of
the
prior
assessment
systemsformanufacturing,・・Enhancing the risk assessment performed in priordisaster prevention
construction work and improving the effectiveness of researchassessment
Occupationalsafety and health・Establishing an occupational safety and health management system basedon ISO45001
・Achieving zero accidents that require staff time off from work

Chemicals andproduct safety

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

・Improving occupational safety through equipment
improvement
・Publishing an occupational safety newspaper・Strengthening inspections for occupational safety and healthin RC audits
・Creating internal standards for the risk assessment ofchemical substances and safety measures based on safety data
・Promoting the disclosure of safety summaries of chemical
substances
・Participating in LRI*3 activities organized by the Japan
Chemical Industry Association*3 Long-range Research Initiative：an international initiative to provide long-term support for research on the impact of chemicals on human health and the environment

RC Audits
RC audits are activities for checking RC activities at each plant, laboratory, and affiliate. They are carried out by the Environment, Safety & Quality
Assurance Department in accordance with the RC audit guidelines. In these audits, it is checked whether RC activities, as well as internal audits andpatrols, are carried out appropriately at each location and the PDCA cycle is implemented without fail. In the RC audits, the Environment, Safety &Quality Assurance Department clarifies visible or potential problems related to the EHS and promotes improvements in response after clarifying the
problems, if any. In FY2016, a total of 43 audits were conducted.
T O P I C S

Safety Audits
In safety audits, the Environment, Safety & Quality Assurance Department identifies unsafe places and unsafe behaviors in a preventive
manner by monitoring works on site. These audits were conducted at five selected locations, including those with frequent accidents
and where a serious accident has occurred. We will continue to conduct audits that are aimed exclusively at checking worker safety.

43

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201744

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Environment Safety and Climate Change Strategy
Environmental Impact from Production Activities

Capital Investment for the Environment and Safety and its Economic Effects

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

Investment:
We have made active capital investments such as changing the feedstock for
manufacturing ammonia at the Toyama Plant in our efforts to save energy
and reduce GHG emissions. We also renovate aging facilities and implement
constructions for labor safety and work environment improvement measuresin a well-planned manner to ensure safety and disaster prevention andmaintain safe operations.

This is the summary of environmental impact yielded by the company.

FY2016 Environmental Impact Results
INPUT
Raw Materials

Capex for environment and safety [million yen]

Energy Input

99,438kl (Crude oil equivalent)
Energy:fuel, purchased electricity andpurchased steam used for businessactivities (fuel and purchased steam
crude oil equivalent)

Water Resources Input

2,500

Water resources:
tap water, ground water andindustrial water used forbusiness activities

0

(FY)

(Five plants)

OUTPUT

Emissions to the Atmosphere
CO2: the amount of CO2 emitted from business activities
GHG other than CO2: the amount of CH4, N2O, HFC
and SF6
NOx, SOx, dust: the amount of NOx, SOx and dust
included in emissions from each burning facility

Amount [million yen]
FY2015FY2016

754
681

685
581

73

104

2012

2013

678

2014

Capex for environment

1,443
952

Energy saving

173

40

Resource saving

49

92

Reuse and recycling

32

41

1,419

491
2015

2016

Capex for safety and disaster prevention

Ｔ Ｏ ＰＩＣ Ｓ

Emissions into waters
Effluent
COD
Total nitrogen
Total phosphorus
PRTR substances

1,672
994

1,500

Production
Activities

246,000 tons-CO2
187,000 tons-CO2
148 tons
382 tons
25 tons
1.47 tons

Type of cost reduction

2,000

500

CO2
GHG other than CO2
NOx
SOx
Dust
PRTR substances

2,379
960

42,231,000m3

1,000

Emissions to the Atmosphere

Economic effects:
Fuel conversion from naphtha to natural gas, conversion of industrial waste
into valuables, and changes to treatment methods produced the following
economic effects in FY2016.

14,990,000 m3
294 tons
3,356 tons
18 tons
0.38 tons

Emissions into waters
COD, Total nitrogen, Total phosphorus: volume that wascalculated by multiplying effluent to the public waters by
the concentration of nitrogen, phosphorus and COD

Toyama Plant: Expanded Use of Natural Gas

Emissions to the soil
PRTR substances

N/A

Waste
Total volume
Recycled volume
External disposal volume

33,689 tons
3,819 tons
1,113 tons

In August 2016, the Toyama Plant switched from naphtha to natural gas as the fuel and feedstock used forammonia. Efforts for CO2 emission reduction at its production facilities have produced significant results. In
August 2017, we switched from heavy oil to natural gas as the fuel for melamine furnaces. Moving forward,
we will consider expanding the use of natural gas as fuel for other boilers. Natural gas does not generate
any sulfur oxide or soot dust when it is burned. The amount of NOx (nitrogen oxide) emitted by natural gas
is 30% to 40% less than that of petroleum, thereby helping to protect the global environment and prevent
climate change.

Waste
Recycled volume: the amount of waste recycled
External disposal volume: the final amount of landfill
disposal by contractor▲Melamine furnaces

45

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201746

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Environment Safety and Climate Change Strategy
Environmental Impact from Production Activities

Capital Investment for the Environment and Safety and its Economic Effects

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

Investment:
We have made active capital investments such as changing the feedstock for
manufacturing ammonia at the Toyama Plant in our efforts to save energy
and reduce GHG emissions. We also renovate aging facilities and implement
constructions for labor safety and work environment improvement measuresin a well-planned manner to ensure safety and disaster prevention andmaintain safe operations.

This is the summary of environmental impact yielded by the company.

FY2016 Environmental Impact Results
INPUT
Raw Materials

Capex for environment and safety [million yen]

Energy Input

99,438kl (Crude oil equivalent)
Energy:fuel, purchased electricity andpurchased steam used for businessactivities (fuel and purchased steam
crude oil equivalent)

Water Resources Input

2,500

Water resources:
tap water, ground water andindustrial water used forbusiness activities

0

(FY)

(Five plants)

OUTPUT

Emissions to the Atmosphere
CO2: the amount of CO2 emitted from business activities
GHG other than CO2: the amount of CH4, N2O, HFC
and SF6
NOx, SOx, dust: the amount of NOx, SOx and dust
included in emissions from each burning facility

Amount [million yen]
FY2015FY2016

754
681

685
581

73

104

2012

2013

678

2014

Capex for environment

1,443
952

Energy saving

173

40

Resource saving

49

92

Reuse and recycling

32

41

1,419

491
2015

2016

Capex for safety and disaster prevention

Ｔ Ｏ ＰＩＣ Ｓ

Emissions into waters
Effluent
COD
Total nitrogen
Total phosphorus
PRTR substances

1,672
994

1,500

Production
Activities

246,000 tons-CO2
187,000 tons-CO2
148 tons
382 tons
25 tons
1.47 tons

Type of cost reduction

2,000

500

CO2
GHG other than CO2
NOx
SOx
Dust
PRTR substances

2,379
960

42,231,000m3

1,000

Emissions to the Atmosphere

Economic effects:
Fuel conversion from naphtha to natural gas, conversion of industrial waste
into valuables, and changes to treatment methods produced the following
economic effects in FY2016.

14,990,000 m3
294 tons
3,356 tons
18 tons
0.38 tons

Emissions into waters
COD, Total nitrogen, Total phosphorus: volume that wascalculated by multiplying effluent to the public waters by
the concentration of nitrogen, phosphorus and COD

Toyama Plant: Expanded Use of Natural Gas

Emissions to the soil
PRTR substances

N/A

Waste
Total volume
Recycled volume
External disposal volume

33,689 tons
3,819 tons
1,113 tons

In August 2016, the Toyama Plant switched from naphtha to natural gas as the fuel and feedstock used forammonia. Efforts for CO2 emission reduction at its production facilities have produced significant results. In
August 2017, we switched from heavy oil to natural gas as the fuel for melamine furnaces. Moving forward,
we will consider expanding the use of natural gas as fuel for other boilers. Natural gas does not generate
any sulfur oxide or soot dust when it is burned. The amount of NOx (nitrogen oxide) emitted by natural gas
is 30% to 40% less than that of petroleum, thereby helping to protect the global environment and prevent
climate change.

Waste
Recycled volume: the amount of waste recycled
External disposal volume: the final amount of landfill
disposal by contractor▲Melamine furnaces

45

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201746

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Amount of Energy Consumption and Energy Consumption Rate

Reduction of Greenhouse Gas Emissions

Production and research:
In accordance with “the Act on the Rational Use of Energy”, we collect data on theamount of energy consumed at all of our business establishments and submit this data
to the national government, along with data on our energy consumption rate. Our energy
consumption in FY2016 was almost equal to the previous fiscal year’s level in crude oil
equivalent. We have a product matrix that covers a wide range of products, from
commodity chemicals to agrochemicals, pharmaceuticals and functional products forelectronic materials. This makes it difficult to evaluate the energy consumption rate
based on the simple quantity of production, which is why we calculate it based on sales.
Our energy consumption rate improved from the previous year by 3%. This is attributed
mainly to the increased sales of high value added products.

In accordance with “the Act on Promotion of Global Warming Countermeasures”, we collect data on the emissions of carbon dioxide (CO2) and other greenhousegases from all of our business establishments, including our plants, laboratories, and head office and report this data to the national government. In FY2016, we wereable to reduce GHG emissions from energy use and non-energy use because we changed fuel and feedstock for manufacturing ammonia from naphtha to natural gas
with fewer GHG emissions. The GHG emission rate, which is calculated as the ratio between emissions and sales (emission / sales), fell steadily over the course of six
years from FY2011 to FY2016. In FY2016, the GHG emission rate was reduced to 78% compared to the FY2011 level.

Logistics:
As a cargo owner, we work together with Nissan Butsuryu Co., Ltd., a group company
which handles our logistics operations, to promote the rational use of energy fortransportation. In FY2016, the amount of energy consumption in crude oil equivalent
increased slightly from the previous fiscal year. However, the energy consumption rate was
improved from the previous fiscal year. We will continue striving to improve our energy
consumption rate through measures such as promoting modal shifts, replacing vehicles
with energy-saving and practicing eco-driving.

Energy consumption (crude oil equivalent 1,000kl)
and energy consumption index (FY2011 as a base of 100) in production and research
125
100

100.0

96.4

89.1

96.9

96.7

94.8

81.5

86.1

83.1

98.8

99.4

75
50
25
0

2011

2012

2013

91.9

2014

2016

2015

(FY)

Energy consumption index

Energy consumption

GHG emissions [1,000 tons - CO2]

Index of the GHG emission rate (FY2011 as a base of 100)

500

100

400

220
300

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

35.4

35.9

36.5

36.5

36.3

2
0

40

53

200

30

5.0

5.0

5.2

5.2

5.2

5.4

2011

2012

2013

2014

2015

2016

Energy consumption

250

237

255

246
50

35.7

6
4

248

20

100

175

10
(FY)

0

0

2011

55

31

140

153

172

152

155

2012

2013

2014

2015

2016

CO2 emissions
from energy use

Energy consumption rate

Ｔ Ｏ ＰＩＣ Ｓ

49

55

53

CO2 emissions
from non-energy use

(FY)

0

100

2011

94

2012

93

89

87

2013

2014

2015

78

2016

(FY)

Dinitrogen monoxide (N2O)

Calculation of Scope 3 Emissions: Indirect Emissions of Greenhouse Gas (GHG) via the Supply Chain

Centralized Management of Environmental Data

We have introduced the “FUJITSU Sustainability Solution Eco Track” as a support tool for the visualization of environmental action plans and the results of theactions for their application to sustainability activities, global information disclosure, and third-party verification, in addition to the response to environmental laws
and regulations and the reduction of the environmental impact. We have named the system the Nissan Eco Track System (NEco) and commenced thecentralized management of environmental data from plants, laboratories and affiliates. We use the system for presenting environmental data in this report,
responding to the CDP climate change and water questionnaire, and other purposes.

To discover our GHG emissions throughout the supply chain, from the purchase of raw materials to use and disposal by customers, we calculated ourindirect GHG emissions via the supply chain (Scope 3 emissions) in addition to our direct GHG emissions (Scope 1) and indirect emissions derived fromenergy (Scope 2). As a result of the calculations of our Scope 3 emissions based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions
Throughout the Supply Chain (Ver. 2.2) and Database of Emissions Unit Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations
Throughout the Supply Chain (Ver. 2.4) provided by the Ministry of Economy, Trade and Industry and the Ministry of the Environment of Japan, we foundthat emissions from purchased goods and services accounted for 90% of all the items that were included in the calculation.
Scope-3▲NEco47

Nissan Chemical Industries, Ltd. Annual Report 2017

No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Item
Purchased goods and services
Capital goods
Fuel- and energy-related activities not included in Scope 1 or 2
Transportation and distribution (upstream)
Waste generated in operations
Business travel
Employee commuting
Leased assets (upstream)
Transportation and distribution (downstream)
Processing of sold products
Use of sold products
End-of-life treatment of sold products
Leased assets (downstream)
Franchises
Investments

Calculated value (tCO2e)
670,794
40,752
7,870
13,848
7,076
1,443
370
Included in Scope 1 or 2
Being studied
Being studied
Not applicable255
203
Not applicableNot applicable

90.3%
Purchased goods and services
Capital goods
Fuel- and energy-related
activities not includedin Scope 1 or 2
Transportation and distribution(upstream)

Waste generated in operations
Business travel
Employee commuting
End-of-life treatmentof sold products
Leased assets (downstream)

Nissan Chemical Industries, Ltd. Annual Report 201748

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Amount of Energy Consumption and Energy Consumption Rate

Reduction of Greenhouse Gas Emissions

Production and research:
In accordance with “the Act on the Rational Use of Energy”, we collect data on theamount of energy consumed at all of our business establishments and submit this data
to the national government, along with data on our energy consumption rate. Our energy
consumption in FY2016 was almost equal to the previous fiscal year’s level in crude oil
equivalent. We have a product matrix that covers a wide range of products, from
commodity chemicals to agrochemicals, pharmaceuticals and functional products forelectronic materials. This makes it difficult to evaluate the energy consumption rate
based on the simple quantity of production, which is why we calculate it based on sales.
Our energy consumption rate improved from the previous year by 3%. This is attributed
mainly to the increased sales of high value added products.

In accordance with “the Act on Promotion of Global Warming Countermeasures”, we collect data on the emissions of carbon dioxide (CO2) and other greenhousegases from all of our business establishments, including our plants, laboratories, and head office and report this data to the national government. In FY2016, we wereable to reduce GHG emissions from energy use and non-energy use because we changed fuel and feedstock for manufacturing ammonia from naphtha to natural gas
with fewer GHG emissions. The GHG emission rate, which is calculated as the ratio between emissions and sales (emission / sales), fell steadily over the course of six
years from FY2011 to FY2016. In FY2016, the GHG emission rate was reduced to 78% compared to the FY2011 level.

Logistics:
As a cargo owner, we work together with Nissan Butsuryu Co., Ltd., a group company
which handles our logistics operations, to promote the rational use of energy fortransportation. In FY2016, the amount of energy consumption in crude oil equivalent
increased slightly from the previous fiscal year. However, the energy consumption rate was
improved from the previous fiscal year. We will continue striving to improve our energy
consumption rate through measures such as promoting modal shifts, replacing vehicles
with energy-saving and practicing eco-driving.

Energy consumption (crude oil equivalent 1,000kl)
and energy consumption index (FY2011 as a base of 100) in production and research
125
100

100.0

96.4

89.1

96.9

96.7

94.8

81.5

86.1

83.1

98.8

99.4

75
50
25
0

2011

2012

2013

91.9

2014

2016

2015

(FY)

Energy consumption index

Energy consumption

GHG emissions [1,000 tons - CO2]

Index of the GHG emission rate (FY2011 as a base of 100)

500

100

400

220
300

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

35.4

35.9

36.5

36.5

36.3

2
0

40

53

200

30

5.0

5.0

5.2

5.2

5.2

5.4

2011

2012

2013

2014

2015

2016

Energy consumption

250

237

255

246
50

35.7

6
4

248

20

100

175

10
(FY)

0

0

2011

55

31

140

153

172

152

155

2012

2013

2014

2015

2016

CO2 emissions
from energy use

Energy consumption rate

Ｔ Ｏ ＰＩＣ Ｓ

49

55

53

CO2 emissions
from non-energy use

(FY)

0

100

2011

94

2012

93

89

87

2013

2014

2015

78

2016

(FY)

Dinitrogen monoxide (N2O)

Calculation of Scope 3 Emissions: Indirect Emissions of Greenhouse Gas (GHG) via the Supply Chain

Centralized Management of Environmental Data

We have introduced the “FUJITSU Sustainability Solution Eco Track” as a support tool for the visualization of environmental action plans and the results of theactions for their application to sustainability activities, global information disclosure, and third-party verification, in addition to the response to environmental laws
and regulations and the reduction of the environmental impact. We have named the system the Nissan Eco Track System (NEco) and commenced thecentralized management of environmental data from plants, laboratories and affiliates. We use the system for presenting environmental data in this report,
responding to the CDP climate change and water questionnaire, and other purposes.

To discover our GHG emissions throughout the supply chain, from the purchase of raw materials to use and disposal by customers, we calculated ourindirect GHG emissions via the supply chain (Scope 3 emissions) in addition to our direct GHG emissions (Scope 1) and indirect emissions derived fromenergy (Scope 2). As a result of the calculations of our Scope 3 emissions based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions
Throughout the Supply Chain (Ver. 2.2) and Database of Emissions Unit Values for Accounting of Greenhouse Gas Emissions, etc., by Organizations
Throughout the Supply Chain (Ver. 2.4) provided by the Ministry of Economy, Trade and Industry and the Ministry of the Environment of Japan, we foundthat emissions from purchased goods and services accounted for 90% of all the items that were included in the calculation.
Scope-3▲NEco47

Nissan Chemical Industries, Ltd. Annual Report 2017

No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Item
Purchased goods and services
Capital goods
Fuel- and energy-related activities not included in Scope 1 or 2
Transportation and distribution (upstream)
Waste generated in operations
Business travel
Employee commuting
Leased assets (upstream)
Transportation and distribution (downstream)
Processing of sold products
Use of sold products
End-of-life treatment of sold products
Leased assets (downstream)
Franchises
Investments

Calculated value (tCO2e)
670,794
40,752
7,870
13,848
7,076
1,443
370
Included in Scope 1 or 2
Being studied
Being studied
Not applicable255
203
Not applicableNot applicable

90.3%
Purchased goods and services
Capital goods
Fuel- and energy-related
activities not includedin Scope 1 or 2
Transportation and distribution(upstream)

Waste generated in operations
Business travel
Employee commuting
End-of-life treatmentof sold products
Leased assets (downstream)

Nissan Chemical Industries, Ltd. Annual Report 201748

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Control of Exhaust Gas

Reduction of Emissions of VOCs

Control of Waste Water

Efficient Use of Water Resources

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

We regularly take initiatives to reduce emissions of volatile organic compounds(VOCs), which cause the formation of photochemical oxidants. We have not emitted
any 1,2-dichloroethane into the atmosphere since 2006 due to the introduction of
VOC eliminators and other initiatives. Our emissions of other VOCs (benzene andformaldehyde) have also remained at around 25% of the level of 2006 and earlier. In
FY2016, our emissions of benzene were reduced further because we changed thefuel and feedstock for manufacturing ammonia from naphtha to natural gas.

Our plants observe the discharge standards stipulated in “the Water
Pollution Control Act” and regulatory values based on agreements with local
communities. We monitor the chemical oxygen demand (COD), the total
nitrogen and total phosphorous concentration in waste water. In FY2016, theemissions of all of them increased due to the increase in production volume.

At each plant, we carry out exhaustive water-saving activities by observing environmental laws andregulations and cooperating with local organizations. These activities ensure that our operations do
not place an impact on natural water circulation. We also clean waste water before returning it tonature to prevent it from negatively impacting the environment.
At the Toyama Plant, we have been promoting the rational use of groundwater as a member of thegroundwater use council in the Toyama area, a local council that works to protect the local naturalenvironment and promote the sound development of local communities. At the Onoda Plant, we havebeen taking measures to maintain the quality of waste water discharged from the plant in line with “theAct on Special Measures concerning Conservation of the Environment of the Seto Inland Sea.”

SOx emission / NOx emission [ton]
450

381

379

391

345

Emissions of organic air pollutants [ton]
1.0
0.8

136

146

114

158

0.83 0.82

148

0.4

0.20 0.17

2012

2013

2014

2015
SOx emission

2016

0.0

(FY)

1998

2012

0.26

0.27

0.17

2013

3,123

0.17

2016 (FY)NOx emission

BenzeneFormaldehyde

3,000

294

0.13 0.17

2015

2014

45.0

3,064

300

0.20 0.17

Water input / Effluent [Million m3]

3,356

359

3,166

0.6

0.2

0

4,000

400

382

300

150

COD (left axis) / Total phosphorus (left axis) / Total nitrogen (right axis) emissions [ton]

279

35.0

249

243

30.0

2,294

200

2,000

Reduction of Waste
We thoroughly implement control measures to ensure the proper disposal of waste, while
also striving to reduce industrial waste. We introduced the PBasis from Panasonic ET
Solutions Co., Ltd. as the legal compliance system for waste. We also applied electronic
manifests.
Waste water discharged in the manufacturing process accounts for the majority of ourindustrial waste. We treat this waste internally by means of combustion. The amount ofwaste generated began to rise in FY2014 due to an increase in the production volume oforganic fine chemicals and flame retardants attributed to their new uses. As for solid waste,
we reuse sludge as feedstock for the base course material of roads and cement. In addition,at the Toyama Plant, we promote the recycling of waste plastics and the conversion of suchplastics to valuables, and we have changed the method of their intermediate processing. As
a result, the final disposal volume was reduced by half from FY2015. We have set a goal of
reducing the final disposal volume to 800 tons by FY2020.

40.0

25.0
20.0

Waste volume [1,000 tons]

1,000

100

40
30
20
10
0

26.8
2012

26.3
2013

33.4

33.0
2014

41.1

41.1

42.2

42.8

15.0
10.0

33.7

2015

41.3

2016

(FY)

Recycled volume / Final disposal volume [1,000 tons]
6

19
0

2012
COD emission

11
2013

14

13
2014

2015

Total phosphorus emission

5.0

18
2016

0
(FY)

Total nitrogen emission

0.0

15.3

2012

15.1

2013

14.9

2014

15.1

2015
Water resources input

15.0

2016

(FY)
Effluent

420

2.5 2.5
2012

2.4

1.5

2013

4.5

3.1 2.3
2014

3.8

2.2

2015

1.1

2016

Recycled volume(FY)

Final disposal volume

Reduction of Emissions of PRTR Substances
In FY2016, we emitted 60 chemical substances whose emissions must be
registered in accordance with “the Act on Confirmation, etc. of Release Amounts ofSpecific Chemical Substances in the Environment and Promotion of Improvements
to the Management Thereof (PRTR law)”. The main substances emitted wereformaldehyde and n-hexane. Formaldehyde is used as a reaction solvent, whilen-hexane is found in naphtha, which is used as a fuel or feedstock. Emissions of
n-hexane also decreased in FY2016 because we changed the feedstock for
manufacturing ammonia.
We emitted a total of 1.9 tons of these substances, including 1.5 tons into theatmosphere and 0.4 tons into waters. Emissions into the atmosphere decreased
from the previous fiscal year. We will continue to take steps to control theemissions. We did not emit these substances into the soil.
49

Nissan Chemical Industries, Ltd. Annual Report 2017

Emissions of PRTR substances [ton]Substance
Formaldehyde
n-Hexane
OthersTotal

FY2012
0.5
1.2
0.3
2.0

FY2013
0.5
1.4
0.4
2.3

FY2014
0.4
1.4
0.5
2.3

FY2015
0.5
1.3
0.4
2.2

FY2016
0.3
1.1
0.4
1.8

Breakdown of emissions of PRTR substances [ton]
3

1.8

1.9

1.7

0.5

0.5

0.4

0.5

2012

2013

2014

2015

2

1.6

1
0

▲ Shomyo Falls and Hannoki Falls, into which meltwater from the Tateyama Mountain Range flows

1.5▲Toyama Plant and Tateyama Mountain Range seen from the Ida River

0.4
Atmosphere

2016

(FY)
WatersNissan Chemical Industries, Ltd. Annual Report 201750

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Control of Exhaust Gas

Reduction of Emissions of VOCs

Control of Waste Water

Efficient Use of Water Resources

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

We regularly take initiatives to reduce emissions of volatile organic compounds(VOCs), which cause the formation of photochemical oxidants. We have not emitted
any 1,2-dichloroethane into the atmosphere since 2006 due to the introduction of
VOC eliminators and other initiatives. Our emissions of other VOCs (benzene andformaldehyde) have also remained at around 25% of the level of 2006 and earlier. In
FY2016, our emissions of benzene were reduced further because we changed thefuel and feedstock for manufacturing ammonia from naphtha to natural gas.

Our plants observe the discharge standards stipulated in “the Water
Pollution Control Act” and regulatory values based on agreements with local
communities. We monitor the chemical oxygen demand (COD), the total
nitrogen and total phosphorous concentration in waste water. In FY2016, theemissions of all of them increased due to the increase in production volume.

At each plant, we carry out exhaustive water-saving activities by observing environmental laws andregulations and cooperating with local organizations. These activities ensure that our operations do
not place an impact on natural water circulation. We also clean waste water before returning it tonature to prevent it from negatively impacting the environment.
At the Toyama Plant, we have been promoting the rational use of groundwater as a member of thegroundwater use council in the Toyama area, a local council that works to protect the local naturalenvironment and promote the sound development of local communities. At the Onoda Plant, we havebeen taking measures to maintain the quality of waste water discharged from the plant in line with “theAct on Special Measures concerning Conservation of the Environment of the Seto Inland Sea.”

SOx emission / NOx emission [ton]
450

381

379

391

345

Emissions of organic air pollutants [ton]
1.0
0.8

136

146

114

158

0.83 0.82

148

0.4

0.20 0.17

2012

2013

2014

2015
SOx emission

2016

0.0

(FY)

1998

2012

0.26

0.27

0.17

2013

3,123

0.17

2016 (FY)NOx emission

BenzeneFormaldehyde

3,000

294

0.13 0.17

2015

2014

45.0

3,064

300

0.20 0.17

Water input / Effluent [Million m3]

3,356

359

3,166

0.6

0.2

0

4,000

400

382

300

150

COD (left axis) / Total phosphorus (left axis) / Total nitrogen (right axis) emissions [ton]

279

35.0

249

243

30.0

2,294

200

2,000

Reduction of Waste
We thoroughly implement control measures to ensure the proper disposal of waste, while
also striving to reduce industrial waste. We introduced the PBasis from Panasonic ET
Solutions Co., Ltd. as the legal compliance system for waste. We also applied electronic
manifests.
Waste water discharged in the manufacturing process accounts for the majority of ourindustrial waste. We treat this waste internally by means of combustion. The amount ofwaste generated began to rise in FY2014 due to an increase in the production volume oforganic fine chemicals and flame retardants attributed to their new uses. As for solid waste,
we reuse sludge as feedstock for the base course material of roads and cement. In addition,at the Toyama Plant, we promote the recycling of waste plastics and the conversion of suchplastics to valuables, and we have changed the method of their intermediate processing. As
a result, the final disposal volume was reduced by half from FY2015. We have set a goal of
reducing the final disposal volume to 800 tons by FY2020.

40.0

25.0
20.0

Waste volume [1,000 tons]

1,000

100

40
30
20
10
0

26.8
2012

26.3
2013

33.4

33.0
2014

41.1

41.1

42.2

42.8

15.0
10.0

33.7

2015

41.3

2016

(FY)

Recycled volume / Final disposal volume [1,000 tons]
6

19
0

2012
COD emission

11
2013

14

13
2014

2015

Total phosphorus emission

5.0

18
2016

0
(FY)

Total nitrogen emission

0.0

15.3

2012

15.1

2013

14.9

2014

15.1

2015
Water resources input

15.0

2016

(FY)
Effluent

420

2.5 2.5
2012

2.4

1.5

2013

4.5

3.1 2.3
2014

3.8

2.2

2015

1.1

2016

Recycled volume(FY)

Final disposal volume

Reduction of Emissions of PRTR Substances
In FY2016, we emitted 60 chemical substances whose emissions must be
registered in accordance with “the Act on Confirmation, etc. of Release Amounts ofSpecific Chemical Substances in the Environment and Promotion of Improvements
to the Management Thereof (PRTR law)”. The main substances emitted wereformaldehyde and n-hexane. Formaldehyde is used as a reaction solvent, whilen-hexane is found in naphtha, which is used as a fuel or feedstock. Emissions of
n-hexane also decreased in FY2016 because we changed the feedstock for
manufacturing ammonia.
We emitted a total of 1.9 tons of these substances, including 1.5 tons into theatmosphere and 0.4 tons into waters. Emissions into the atmosphere decreased
from the previous fiscal year. We will continue to take steps to control theemissions. We did not emit these substances into the soil.
49

Nissan Chemical Industries, Ltd. Annual Report 2017

Emissions of PRTR substances [ton]Substance
Formaldehyde
n-Hexane
OthersTotal

FY2012
0.5
1.2
0.3
2.0

FY2013
0.5
1.4
0.4
2.3

FY2014
0.4
1.4
0.5
2.3

FY2015
0.5
1.3
0.4
2.2

FY2016
0.3
1.1
0.4
1.8

Breakdown of emissions of PRTR substances [ton]
3

1.8

1.9

1.7

0.5

0.5

0.4

0.5

2012

2013

2014

2015

2

1.6

1
0

▲ Shomyo Falls and Hannoki Falls, into which meltwater from the Tateyama Mountain Range flows

1.5▲Toyama Plant and Tateyama Mountain Range seen from the Ida River

0.4
Atmosphere

2016

(FY)
WatersNissan Chemical Industries, Ltd. Annual Report 201750

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Biodiversity Conservation
At Nissan Chemical, we are fully aware of the fact that biodiversity serves as an important foundation for sustainable society in the future. As amember of international society, we intend to promote activities that contribute to biodiversity conservation by sharing roles and responsibilities withall the people and working together with them. For this purpose, we have established the “Nissan Chemical Biodiversity Action Guidelines”.
In addition, in October 2015 we participated in the Japan Business and Biodiversity Partnership to promote our initiatives for biodiversity.

Nissan Chemical Biodiversity Action Guidelines
Our corporate philosophy is “We contribute to society in harmony with the environment, based on our excellent technologies, products, and services.”Ｔ Ｏ ＰＩＣ Ｓ

Support for “Kurohama-numa Shuhen no Shizen wo Taisetsu ni Suru Kai” and dialogues with it

In FY2016, we began to support “Kurohama-numa Shuhen no Shizen wo Taisetsu ni Suru Kai (Society for Cherishing the Natural Environment aroundKurohamanuma Pond)”, an NPO in Hasuda City, Saitama. For many years, this organization has been engaged in activities for conserving the biodiversityof the area around Kurohamanuma Pond, which is designated as the No.11 Land for Conservation by Trust (Trust Hozen 11-gou chi) by the Saitama
Greenery Trust Association of Saitama Prefecture. Its activities have resulted in numerous achievements, including success in growing Carex capricornis
and other endangered species. On the other hand, it faces multiple urgent issues such as the drying up of the pond and the reduction of rare species ofplants and animals attributed to the propagation of alien species such as willow and red-eared sliders. The NPO also contributes to the environmental
learning of local elementary and junior high school students. We are favorable with these continuous, locally based activities for protecting biodiversity anddecided to give a donation to this NPO every year.
Representatives from our CSR & Public Relations Office, Environment, Safety & Quality Assurance Department and Biological Research Laboratories
visited the environmental learning center (Kankyo Gakushu-kan) in Hasuda City, which is managed by the NPO, observed its activities in the area aroundKurohamanuma Pond, and then exchanged opinions with the NPO concerning activities of the NPO and the company, issues on biodiversity conservation,
expectations for business enterprises and other aspects.

We at the Nissan Chemical Group engage in business activities that take into account biodiversity and help protect the global environment.
1) We will understand, analyze, and evaluate the impact of our products on biodiversity throughout their lifecycle and strive to reduce theimpact. We will work to preserve biodiversity and ensure the sustainable use of biological resources.
2) We will strive to raise each employee’s awareness of biodiversity through responsible care activities.
3) We will continue to carry out social contribution activities that help preserve biodiversity and earn us the high esteem and trust of society.
4) We will disclose the results of these initiatives to deepen the level of communication with society.

Our Biodiversity Initiatives▲Landscape of the area around Kurohamanuma Pond

▲Carex capricornis, an endangered species
that the NPO has been growing successfully▲A session for exchanging opinions
about biodiversity conservation activities

Ｔ Ｏ ＰＩＣ Ｓ

Participation in the Membership Program of Armand Bayou Nature Center
Toyama Plant“Nissan Bio-Park Nishi-Hongo”

Biological Research Laboratories
Support for “Kurohama-numa Shuhen
no Shizen wo Taisetsu ni Suru Kai” (TOPICS)

Nissan Chemical America Corporation participated a corporate membership ofArmand Bayou Nature Center (ABNC).
ABNC is one of the largest urban wilderness preserve in the U.S. ABNC contains
2500 acres of the natural wetlands forest, prairie and marsh habitats once abundantin the Houston/Galveston area. ABNC is home to over 370 species of birds,
mammals, reptiles and amphibians. The Center’s stewardship programs ensure that
future generations have the opportunity to experience a wilderness close to home.
ABNC’s educational programs promote the value of preservation and conservation ofnatural resources. These programs also encourage everyone to incorporate
ecological concepts into their daily lives.

▲Armand Bayou Nature Center

Nagoya Plant“Fujimae-Higata Clean-up Activities”

51

Nissan Chemical Industries, Ltd. Annual Report 2017

Sodegaura Plant“Support for the conservationof Pinus pentaphylla”

Nissan Chemical Industries, Ltd. Annual Report 201752

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Biodiversity Conservation
At Nissan Chemical, we are fully aware of the fact that biodiversity serves as an important foundation for sustainable society in the future. As amember of international society, we intend to promote activities that contribute to biodiversity conservation by sharing roles and responsibilities withall the people and working together with them. For this purpose, we have established the “Nissan Chemical Biodiversity Action Guidelines”.
In addition, in October 2015 we participated in the Japan Business and Biodiversity Partnership to promote our initiatives for biodiversity.

Nissan Chemical Biodiversity Action Guidelines
Our corporate philosophy is “We contribute to society in harmony with the environment, based on our excellent technologies, products, and services.”Ｔ Ｏ ＰＩＣ Ｓ

Support for “Kurohama-numa Shuhen no Shizen wo Taisetsu ni Suru Kai” and dialogues with it

In FY2016, we began to support “Kurohama-numa Shuhen no Shizen wo Taisetsu ni Suru Kai (Society for Cherishing the Natural Environment aroundKurohamanuma Pond)”, an NPO in Hasuda City, Saitama. For many years, this organization has been engaged in activities for conserving the biodiversityof the area around Kurohamanuma Pond, which is designated as the No.11 Land for Conservation by Trust (Trust Hozen 11-gou chi) by the Saitama
Greenery Trust Association of Saitama Prefecture. Its activities have resulted in numerous achievements, including success in growing Carex capricornis
and other endangered species. On the other hand, it faces multiple urgent issues such as the drying up of the pond and the reduction of rare species ofplants and animals attributed to the propagation of alien species such as willow and red-eared sliders. The NPO also contributes to the environmental
learning of local elementary and junior high school students. We are favorable with these continuous, locally based activities for protecting biodiversity anddecided to give a donation to this NPO every year.
Representatives from our CSR & Public Relations Office, Environment, Safety & Quality Assurance Department and Biological Research Laboratories
visited the environmental learning center (Kankyo Gakushu-kan) in Hasuda City, which is managed by the NPO, observed its activities in the area aroundKurohamanuma Pond, and then exchanged opinions with the NPO concerning activities of the NPO and the company, issues on biodiversity conservation,
expectations for business enterprises and other aspects.

We at the Nissan Chemical Group engage in business activities that take into account biodiversity and help protect the global environment.
1) We will understand, analyze, and evaluate the impact of our products on biodiversity throughout their lifecycle and strive to reduce theimpact. We will work to preserve biodiversity and ensure the sustainable use of biological resources.
2) We will strive to raise each employee’s awareness of biodiversity through responsible care activities.
3) We will continue to carry out social contribution activities that help preserve biodiversity and earn us the high esteem and trust of society.
4) We will disclose the results of these initiatives to deepen the level of communication with society.

Our Biodiversity Initiatives▲Landscape of the area around Kurohamanuma Pond

▲Carex capricornis, an endangered species
that the NPO has been growing successfully▲A session for exchanging opinions
about biodiversity conservation activities

Ｔ Ｏ ＰＩＣ Ｓ

Participation in the Membership Program of Armand Bayou Nature Center
Toyama Plant“Nissan Bio-Park Nishi-Hongo”

Biological Research Laboratories
Support for “Kurohama-numa Shuhen
no Shizen wo Taisetsu ni Suru Kai” (TOPICS)

Nissan Chemical America Corporation participated a corporate membership ofArmand Bayou Nature Center (ABNC).
ABNC is one of the largest urban wilderness preserve in the U.S. ABNC contains
2500 acres of the natural wetlands forest, prairie and marsh habitats once abundantin the Houston/Galveston area. ABNC is home to over 370 species of birds,
mammals, reptiles and amphibians. The Center’s stewardship programs ensure that
future generations have the opportunity to experience a wilderness close to home.
ABNC’s educational programs promote the value of preservation and conservation ofnatural resources. These programs also encourage everyone to incorporate
ecological concepts into their daily lives.

▲Armand Bayou Nature Center

Nagoya Plant“Fujimae-Higata Clean-up Activities”

51

Nissan Chemical Industries, Ltd. Annual Report 2017

Sodegaura Plant“Support for the conservationof Pinus pentaphylla”

Nissan Chemical Industries, Ltd. Annual Report 201752

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Safety and Disaster Prevention, Occupational Safety and Health
Safety and Disaster Prevention

Occupational Safety and Health

Safety Results

We carry out prior assessment for manufacture, process risk predictions, and facility risk predictions with the aim of ensuring safety, achieving stable operations,and improving our process safety capability. As a result, in FY2016 there were no explosion or leakage accidents, but there was a fire that is believed to have beencaused by static electricity at Onoda Plant. The fire affected only a small area and did not develop into a serious accident, allowing recovery to be completed inaround two months. To prevent a recurrence, we carried out complete inspections of similar tasks at all our plants.
To maintain zero serious accident level, we began to consider the idea of assessing the safety culture of plants in FY2014. We expanded the evaluations to allplants of Nissan Chemical in FY2015 and to laboratories and our affiliates’ plants in FY2016. As a result, issues such as the communication gap between the
management team, managers, and workers were identified and improvements are in progress at each location.
Our plants, laboratories and affiliates carry out various drills and training every year, such as comprehensive disaster drills, earthquake drills, initial fire-fighting
drills, communication and reporting training. These drills and training sessions all take into account the characteristics of the location and region, and are designed
to make us ready to respond to emergencies or accidents in a reliable manner.

We make continuous improvements with regard to occupational safety and health aswell, by implementing a PDCA cycle in our RC management system. We thereby
prevent work accidents, promote the good health of staff, and build a comfortableworkplace environment in our efforts to improve the level of safety and health at eachbusiness location.
In FY2017, we selected occupational safety and health as one of the RC material
issues.
At locations where work accidents have occurred, we investigate the causes andimplement provisional or permanent measures. We also expand the measures acrossthe entire group in our efforts to prevent similar accidents.
In addition, we became a member of the Anzen Project (safety project) of the Ministryof Health, Labour and Welfare in FY2016. We have applied for the Visible Safety Activity
Competition and engage in safety activities.
Moving forward, we will strive to protect work accidents at our subcontractors as well.

In FY2016, we had one case of an accident requiring staff time off from work and threecases of accidents not requiring staff time off from work. The number of cases ofaccidents requiring staff time off from work decreased (by two), resulting in an
improvement in the frequency rate.
We believe that the improvement is attributed to measures taken at each businesslocation by reflecting our assessment of the risks of potential hazards of tasks in which
accidents occurred. We are carrying out a plan to invest a total of 350 million yen inmeasures for the safety of facilities during the three years from FY2016. We made capital
investments to prevent fall accidents and falls. The prevention of these accidents enabledby the investments is believed to be a factor that contributed to the above improvement.

Ｔ Ｏ ＰＩＣ Ｓ

Central Awards for No-Accident

Lost work time accidents frequency rate [%]

2.0

1.48

1.5
1.15

We have introduced a system under which we grant
an award to plants of Nissan Chemical and ouraffiliates involved in manufacturing that haveachieved zero accidents for five consecutive years.
In FY2016, the award was granted to Nagoya Plant
and Nissan Engineering, Ltd. for their achievement ofzero accidents during the five years from FY2011 toFY2015. At the award presentation ceremony,a lecture was given by each winner about theircountermeasures against accidents.

1.11

1.0
0.5
0.0

0.43
0.00
2006

2007

▲Nissan Engineering, Ltd.

0.36

0.37

2008

2009

0.37

0.37

2010

2011 2012 2013
Nissan Chemical

2014 2015 2016
Chemical Industry

Lost work time severity rate [%]0.20▲Nagoya Plant

0.36
0.00

0.15
0.10

Ｔ Ｏ ＰＩＣ ＳGroup Safety Activities of the Laboratories
Our young laboratory staff (who are in their first, second or
third year at the company) engage in activities in groups forpreventing work accidents, including safety-related research,
discussions and presentations that are aimed at sharing
knowledge and raising safety awareness. Under the instructionof their seniors, these laboratory staff members discuss thecauses of accidents, countermeasures against them, and otherissues based on past work accidents and books, external
information, and other materials about HHK* and safety. In
FY2016, a total of 53 staff members in ten groups from the
Chemical Research Laboratories, Materials ResearchLaboratories and Biological Research Laboratories engaged in
the activities and held a reporting session in October. At thereporting session, an award of excellence was granted to thegroup that carried out the most excellent activities.

Hiyari-Hatto (near-miss incident) and Kigakari (alarming).
* ItHHKmeansstandsthe fordiscoveryof near-miss incidents that are not linked directly to serious
injuries or accidents but could have resulted in such injuries or accidents.

53

Nissan Chemical Industries, Ltd. Annual Report 2017

0.05

Group
Chemical ResearchLaboratories

Summary of their reported activities
Activation of HHK through sharing of information
Research on chemical accidents,
optimization of experiment environment
Investigation into causes of HHK→
Implementation of countermeasures
Investigation into HHK→Promotion of risk prediction
before experiment task

Materials ResearchLaboratories(Funabashi)

0.00

Investigation into HHK→Identification of causes /implementation of countermeasures
Safety patrol→Identification of risks andimplementation of countermeasures
Investigation into protective gear and SDS→
Risk prevention(Toyama)

Investigation into protective gear→Suggestion of
improvements(Sodegaura)

Studying earthquake countermeasures andemergency response

Biological ResearchLaboratories

Risk assessment of chemicals

0.001
0.006

0.028

0.000
2006

2007

2008

0.000

0.004

0.000

2009

2010

2011 2012 2013
Nissan Chemical

0.000

0.000

0.029

0.013

2014 2015 2016
Chemical Industry

Ｔ Ｏ ＰＩＣ Ｓ

Occupational Safety Newspaper
We have begun publishing an occupational safety newspaper as a measure for providing
information about occupational safety, which is aimed at eliminating work accidents. The firstissue of the newspaper included a message from the president regarding eliminating work
accidents and data on work accidents that have occurred. It was distributed and posted at all
our business locations. In the following issues, we introduced the safety initiatives taken ateach plant, laboratory, and affiliate along with a message from the head of each in the formof a relay. We also provide information about heat stroke, falls, protective gear, GHS
labeling, and other topics on a monthly basis in our efforts to raise safety awareness.

Nissan Chemical Industries, Ltd. Annual Report 201754

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Safety and Disaster Prevention, Occupational Safety and Health
Safety and Disaster Prevention

Occupational Safety and Health

Safety Results

We carry out prior assessment for manufacture, process risk predictions, and facility risk predictions with the aim of ensuring safety, achieving stable operations,and improving our process safety capability. As a result, in FY2016 there were no explosion or leakage accidents, but there was a fire that is believed to have beencaused by static electricity at Onoda Plant. The fire affected only a small area and did not develop into a serious accident, allowing recovery to be completed inaround two months. To prevent a recurrence, we carried out complete inspections of similar tasks at all our plants.
To maintain zero serious accident level, we began to consider the idea of assessing the safety culture of plants in FY2014. We expanded the evaluations to allplants of Nissan Chemical in FY2015 and to laboratories and our affiliates’ plants in FY2016. As a result, issues such as the communication gap between the
management team, managers, and workers were identified and improvements are in progress at each location.
Our plants, laboratories and affiliates carry out various drills and training every year, such as comprehensive disaster drills, earthquake drills, initial fire-fighting
drills, communication and reporting training. These drills and training sessions all take into account the characteristics of the location and region, and are designed
to make us ready to respond to emergencies or accidents in a reliable manner.

We make continuous improvements with regard to occupational safety and health aswell, by implementing a PDCA cycle in our RC management system. We thereby
prevent work accidents, promote the good health of staff, and build a comfortableworkplace environment in our efforts to improve the level of safety and health at eachbusiness location.
In FY2017, we selected occupational safety and health as one of the RC material
issues.
At locations where work accidents have occurred, we investigate the causes andimplement provisional or permanent measures. We also expand the measures acrossthe entire group in our efforts to prevent similar accidents.
In addition, we became a member of the Anzen Project (safety project) of the Ministryof Health, Labour and Welfare in FY2016. We have applied for the Visible Safety Activity
Competition and engage in safety activities.
Moving forward, we will strive to protect work accidents at our subcontractors as well.

In FY2016, we had one case of an accident requiring staff time off from work and threecases of accidents not requiring staff time off from work. The number of cases ofaccidents requiring staff time off from work decreased (by two), resulting in an
improvement in the frequency rate.
We believe that the improvement is attributed to measures taken at each businesslocation by reflecting our assessment of the risks of potential hazards of tasks in which
accidents occurred. We are carrying out a plan to invest a total of 350 million yen inmeasures for the safety of facilities during the three years from FY2016. We made capital
investments to prevent fall accidents and falls. The prevention of these accidents enabledby the investments is believed to be a factor that contributed to the above improvement.

Ｔ Ｏ ＰＩＣ Ｓ

Central Awards for No-Accident

Lost work time accidents frequency rate [%]

2.0

1.48

1.5
1.15

We have introduced a system under which we grant
an award to plants of Nissan Chemical and ouraffiliates involved in manufacturing that haveachieved zero accidents for five consecutive years.
In FY2016, the award was granted to Nagoya Plant
and Nissan Engineering, Ltd. for their achievement ofzero accidents during the five years from FY2011 toFY2015. At the award presentation ceremony,a lecture was given by each winner about theircountermeasures against accidents.

1.11

1.0
0.5
0.0

0.43
0.00
2006

2007

▲Nissan Engineering, Ltd.

0.36

0.37

2008

2009

0.37

0.37

2010

2011 2012 2013
Nissan Chemical

2014 2015 2016
Chemical Industry

Lost work time severity rate [%]0.20▲Nagoya Plant

0.36
0.00

0.15
0.10

Ｔ Ｏ ＰＩＣ ＳGroup Safety Activities of the Laboratories
Our young laboratory staff (who are in their first, second or
third year at the company) engage in activities in groups forpreventing work accidents, including safety-related research,
discussions and presentations that are aimed at sharing
knowledge and raising safety awareness. Under the instructionof their seniors, these laboratory staff members discuss thecauses of accidents, countermeasures against them, and otherissues based on past work accidents and books, external
information, and other materials about HHK* and safety. In
FY2016, a total of 53 staff members in ten groups from the
Chemical Research Laboratories, Materials ResearchLaboratories and Biological Research Laboratories engaged in
the activities and held a reporting session in October. At thereporting session, an award of excellence was granted to thegroup that carried out the most excellent activities.

Hiyari-Hatto (near-miss incident) and Kigakari (alarming).
* ItHHKmeansstandsthe fordiscoveryof near-miss incidents that are not linked directly to serious
injuries or accidents but could have resulted in such injuries or accidents.

53

Nissan Chemical Industries, Ltd. Annual Report 2017

0.05

Group
Chemical ResearchLaboratories

Summary of their reported activities
Activation of HHK through sharing of information
Research on chemical accidents,
optimization of experiment environment
Investigation into causes of HHK→
Implementation of countermeasures
Investigation into HHK→Promotion of risk prediction
before experiment task

Materials ResearchLaboratories(Funabashi)

0.00

Investigation into HHK→Identification of causes /implementation of countermeasures
Safety patrol→Identification of risks andimplementation of countermeasures
Investigation into protective gear and SDS→
Risk prevention(Toyama)

Investigation into protective gear→Suggestion of
improvements(Sodegaura)

Studying earthquake countermeasures andemergency response

Biological ResearchLaboratories

Risk assessment of chemicals

0.001
0.006

0.028

0.000
2006

2007

2008

0.000

0.004

0.000

2009

2010

2011 2012 2013
Nissan Chemical

0.000

0.000

0.029

0.013

2014 2015 2016
Chemical Industry

Ｔ Ｏ ＰＩＣ Ｓ

Occupational Safety Newspaper
We have begun publishing an occupational safety newspaper as a measure for providing
information about occupational safety, which is aimed at eliminating work accidents. The firstissue of the newspaper included a message from the president regarding eliminating work
accidents and data on work accidents that have occurred. It was distributed and posted at all
our business locations. In the following issues, we introduced the safety initiatives taken ateach plant, laboratory, and affiliate along with a message from the head of each in the formof a relay. We also provide information about heat stroke, falls, protective gear, GHS
labeling, and other topics on a monthly basis in our efforts to raise safety awareness.

Nissan Chemical Industries, Ltd. Annual Report 201754

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Chemicals and Product Safety
Considerations for Animal Testing

Chemicals Management
To achieve the “2020 targets”*1 on which agreement was reached at the“World Summit on Sustainable Development (WSSD)” in 2002, the“Strategic Approach to International Chemicals Management (SAICM)”
for promoting risk reduction based on scientific risk assessment,collection and provision of information, and other measures wereadopted at the “International Conference on Chemicals Management(ICCM)” in 2006. At Nissan Chemical, we strive to minimize the negative
impact of chemical products on people’s health and the environment
during their lifecycle in line with the domestic SAICM implementation
plan.

Assessments made using laboratory animals are essential for the research and development of agrochemicals,
pharmaceuticals, medical materials and chemical materials that are beneficial for society. Biological Research Laboratories
has established Animal Testing Guideline of Nissan Chemical in accordance with the Three Rs principles of animal welfare(Replacement with alternative methods, Reduction in the use of laboratory animals and Refinement of methods for
reducing pain) and laws and regulations such as the “Act on Welfare and Management of Animals”. In accordance withthese guidelines, the Institutional Animal Care and Use Committee examines whether to conduct animal testing, bothethically and scientifically, and checks how the tests are performed to ensure that animal testing is conducted appropriately
and that proper consideration is given to animal welfare.
Due to these initiatives, the Biological Research Laboratories has obtained third-party certification of its laboratory
animal facilities from Japan Health Sciences Foundation.

Research
Disposal

Development

ChemicalsManagement

Manufacture

Use
Sales

*

1 “… aiming to achieve, by 2020, that chemicals are used and produced in ways that lead to the minimizationof significant adverse effects on human health and the environment …”

Ｔ Ｏ ＰＩＣ Ｓ

Third-Party Certification of Laboratory Animal Facilities

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

Introduction of a New Alternative to Skin Sensitization Tests

Prior risk assessment results (Number of cases)

Main Categories for Risk Assessment
1 Compliance with laws, regulations, and agreements 6 Logistics safety and stability
2 Chemical material safety, impact on humanhealth and the environment
3 Occupational safety and health for workers
4 Safety of facilities and for operations
5 Product safety and environmental impact

7 Reduction of disposal amount
8 Quality assurance
9 Environmental and safety aspects forcommissioning, purchasing, and sales

Stage

Department responsible
for assessment

FY2014FY2015FY2016

Research and development

Laboratories

31

18

19

Industrialization test

Plants (technical)

2

12

19

Manufacture

Plants (manufacture)

96

116

110

129

146

148

Total

55

Nissan Chemical Industries, Ltd. Annual Report 2017

Biological Research Laboratories takes specific measures in theconsideration of animal welfare. It judges whether to conduct animal testing
based on preliminary surveys conducted by multiple judges and inconsideration of the level of pain inflicted on laboratory animals. It also
takes measures for reducing pain reflecting consideration of the humane
endpoints of the animals being tested. It also checks how the tests are
performed in its efforts to ensure the morality of animal testing and improve
the reliability of its scientific knowledge. As a result of these initiatives, in
December 2016 the Biological Research Laboratories obtained certification
stating that it conducts animal testing appropriately in accordance with theguidelines of the Ministry of Health, Labour and Welfare. The certification
was obtained from the Japan Health Sciences Foundation, which conducts
third-party validation of voluntary management systems of animal testing.

Recent years have been seen growing concern about animal
protection, and the development of alternative test methods that do not
use laboratory animals has been actively promoted. The amino acidderivative reactivity assay (ADRA) is a new alternative to skinsensitization tests that was developed by Fujifilm Corporation. Validation
tests of this method are being conducted to have it included in the OECD
Test Guidelines, with the support of LRI of JCIA. We participate in thistest to support the research. We have also completed the introduction oftechnologies for this test method, ahead of other companies, to the
Safety Research Department of the Biological Research Laboratories.

Nissan Chemical Industries, Ltd. Annual Report 201756

R e s ponsi bl e Car e ( RC) Ac tiv itie s

Chemicals and Product Safety
Considerations for Animal Testing

Chemicals Management
To achieve the “2020 targets”*1 on which agreement was reached at the“World Summit on Sustainable Development (WSSD)” in 2002, the“Strategic Approach to International Chemicals Management (SAICM)”
for promoting risk reduction based on scientific risk assessment,collection and provision of information, and other measures wereadopted at the “International Conference on Chemicals Management(ICCM)” in 2006. At Nissan Chemical, we strive to minimize the negative
impact of chemical products on people’s health and the environment
during their lifecycle in line with the domestic SAICM implementation
plan.

Assessments made using laboratory animals are essential for the research and development of agrochemicals,
pharmaceuticals, medical materials and chemical materials that are beneficial for society. Biological Research Laboratories
has established Animal Testing Guideline of Nissan Chemical in accordance with the Three Rs principles of animal welfare(Replacement with alternative methods, Reduction in the use of laboratory animals and Refinement of methods for
reducing pain) and laws and regulations such as the “Act on Welfare and Management of Animals”. In accordance withthese guidelines, the Institutional Animal Care and Use Committee examines whether to conduct animal testing, bothethically and scientifically, and checks how the tests are performed to ensure that animal testing is conducted appropriately
and that proper consideration is given to animal welfare.
Due to these initiatives, the Biological Research Laboratories has obtained third-party certification of its laboratory
animal facilities from Japan Health Sciences Foundation.

Research
Disposal

Development

ChemicalsManagement

Manufacture

Use
Sales

*

1 “… aiming to achieve, by 2020, that chemicals are used and produced in ways that lead to the minimizationof significant adverse effects on human health and the environment …”

Ｔ Ｏ ＰＩＣ Ｓ

Third-Party Certification of Laboratory Animal Facilities

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

Introduction of a New Alternative to Skin Sensitization Tests

Prior risk assessment results (Number of cases)

Main Categories for Risk Assessment
1 Compliance with laws, regulations, and agreements 6 Logistics safety and stability
2 Chemical material safety, impact on humanhealth and the environment
3 Occupational safety and health for workers
4 Safety of facilities and for operations
5 Product safety and environmental impact

7 Reduction of disposal amount
8 Quality assurance
9 Environmental and safety aspects forcommissioning, purchasing, and sales

Stage

Department responsible
for assessment

FY2014FY2015FY2016

Research and development

Laboratories

31

18

19

Industrialization test

Plants (technical)

2

12

19

Manufacture

Plants (manufacture)

96

116

110

129

146

148

Total

55

Nissan Chemical Industries, Ltd. Annual Report 2017

Biological Research Laboratories takes specific measures in theconsideration of animal welfare. It judges whether to conduct animal testing
based on preliminary surveys conducted by multiple judges and inconsideration of the level of pain inflicted on laboratory animals. It also
takes measures for reducing pain reflecting consideration of the humane
endpoints of the animals being tested. It also checks how the tests are
performed in its efforts to ensure the morality of animal testing and improve
the reliability of its scientific knowledge. As a result of these initiatives, in
December 2016 the Biological Research Laboratories obtained certification
stating that it conducts animal testing appropriately in accordance with theguidelines of the Ministry of Health, Labour and Welfare. The certification
was obtained from the Japan Health Sciences Foundation, which conducts
third-party validation of voluntary management systems of animal testing.

Recent years have been seen growing concern about animal
protection, and the development of alternative test methods that do not
use laboratory animals has been actively promoted. The amino acidderivative reactivity assay (ADRA) is a new alternative to skinsensitization tests that was developed by Fujifilm Corporation. Validation
tests of this method are being conducted to have it included in the OECD
Test Guidelines, with the support of LRI of JCIA. We participate in thistest to support the research. We have also completed the introduction oftechnologies for this test method, ahead of other companies, to the
Safety Research Department of the Biological Research Laboratories.

Nissan Chemical Industries, Ltd. Annual Report 201756

Co mm u n i c ati on w i th Soci et y

Our Commitment to and Communication with Stakeholders
Customers

We identify customer needs through sales activities, and work to improve our products
and services.

Customers
We provide safe, secureand excellent products
and services.

Shareholders / Investors

We enhance corporate
value and provide theappropriate profit
returns.

We engage actively insocial contribution
activities and regional
interaction.

Our Group

Employees

Business Partners

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

We establish good, constructive
relationships through fairand equitablebusiness.

Employees

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

Business Partners

We promote supply chain management and check our partners’ CSR initiatives asnecessary. (See page 40.)

Communities / Society

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

Quality Policy and Quality Targets

PDCA in Quality Assurance
Quality Assurance Committee(Report, annual plan development)

Implement in accordancewith annual plan

Annual report(performance results)
Corrective actions

Operation of
Quality Assurance

Number of complaints
25

20

15

74

FY201546

FY2016

42

e

eas

Incr

10

5

0

Leakage

Foreign Containers
substances

Quantity
FY2014

Labeling
FY2015

Delivery
FY2016Ｔ Ｏ ＰＩＣ Ｓ“Providing products and services that satisfy customers”

We have passed rigorous inspections and obtained / renewed certifications!

Quality Targets (for Achieving the Quality Policy)

・Onoda Plant underwent an inspection by the Food and Drug
Administration of the United States, which judged that thequality system for Fluralaner, an active ingredient for
veterinary pharmaceuticals, is functioning appropriately.

●Quality assurance in all processes, from design and development to production, shipment,
distribution, and delivery●Taking corrective and preventive measures to address quality abnormalities and problems●Strengthening supply chain management linked to business strategies

FY2014

・At Toyama Plant, HI-LITE® that is manufactured there underwent
inspections under the U.S. standards NSF / ANSI-50 (standards forequipment for swimming pools) and NSF / ANSI-60 (standard for
drinking water treatment chemicals) and renewed the certifications.

Ｔ Ｏ ＰＩＣ Ｓ

Awarded by MSD as the Best Overall External Site

PLAN

ACTION

Quality Policy

30

Reporting of Improvements and Survey Results at the Committee Meeting
We have a corporate network that requires us to promptly collect customer opinions
concerning products (including complaints and product liability accident information), evaluatethem, and take corrective action if necessary.
We have reduced by half the number of complaints about leakage, foreign substances andcontainers, which were the highest in number in the last three years. We have also checked
the effectiveness of the measures that we implemented. Complaints in fields related to
distribution -- that is, quantity, labeling, and delivery -- have been on an upward trend, so wehave decided to conduct auditing and provide intensive guidance about these processes.

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

* An international standard on quality management systems

Number of complaints by causeseCommunities / Society

Our quality assurance management system is based on ISO9001 (QMS)*. Our plants haveobtained ISO9001 certification. They each maintain and update their certification through thecertifying body. They are also proceeding with revisions to the year 2015 version.
We have established a Quality Assurance Committee that promotes quality assurance activities.
It is chaired by the head of the Environment, Safety & Quality Assurance Department. It consists of
the officer in charge of the Environment, Safety & Quality Assurance Department and the heads of
the Production Technology Department, Purchasing Department, all the business divisions, all theplants and all the laboratories. The committee meets regularly once a year.
The matters reported during the committee meetings are the results of activities, audits,
improvements made in response to audit results, information about complaints, and improvements
made in response to the complaints at Nissan Chemical and affiliates in the fiscal year under review.
The members also discuss action policies related to quality assurance and other items for thefollowing fiscal year. The results of the discussions are reported and approved at board meetingand the management meeting before the quality targets for the following fiscal year are determined.

a
cre
De

Shareholders / Investors

At the general shareholders’ meeting, the president, who acts as the chairperson,
provides explanations of the business report and business plan. We also hold an IR
briefing meeting for institutional investors, analysts, and the media every half year to
explain the overall conditions of our business.

Quality Assurance Management System

DO

CHECK

We provide Merck Animal Health with Fluralaner, an active
ingredient of BRAVECTO®, which is a global veterinary
pharmaceutical. In 2016, we won the “Best Overall External Site 2016”,
an award granted by the parent company of MSD to companies that
ensure a stable supply of high-quality products including
pharmaceuticals, and which have contributed to an increase in the
profits of MSD.

・Nagoya Plant and Toyama Plant received the first JIS certification
renewal examination of AdBlue®, a high-grade urea solution
manufactured at the plants, and passed the examination.

Moving forward, we will promote continuous improvements together
with the plants to provide customers with safer, higher-quality products.

Activity report / Internal audit

57

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201758

Co mm u n i c ati on w i th Soci et y

Our Commitment to and Communication with Stakeholders
Customers

We identify customer needs through sales activities, and work to improve our products
and services.

Customers
We provide safe, secureand excellent products
and services.

Shareholders / Investors

We enhance corporate
value and provide theappropriate profit
returns.

We engage actively insocial contribution
activities and regional
interaction.

Our Group

Employees

Business Partners

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

We establish good, constructive
relationships through fairand equitablebusiness.

Employees

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

Business Partners

We promote supply chain management and check our partners’ CSR initiatives asnecessary. (See page 40.)

Communities / Society

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

Quality Policy and Quality Targets

PDCA in Quality Assurance
Quality Assurance Committee(Report, annual plan development)

Implement in accordancewith annual plan

Annual report(performance results)
Corrective actions

Operation of
Quality Assurance

Number of complaints
25

20

15

74

FY201546

FY2016

42

e

eas

Incr

10

5

0

Leakage

Foreign Containers
substances

Quantity
FY2014

Labeling
FY2015

Delivery
FY2016Ｔ Ｏ ＰＩＣ Ｓ“Providing products and services that satisfy customers”

We have passed rigorous inspections and obtained / renewed certifications!

Quality Targets (for Achieving the Quality Policy)

・Onoda Plant underwent an inspection by the Food and Drug
Administration of the United States, which judged that thequality system for Fluralaner, an active ingredient for
veterinary pharmaceuticals, is functioning appropriately.

●Quality assurance in all processes, from design and development to production, shipment,
distribution, and delivery●Taking corrective and preventive measures to address quality abnormalities and problems●Strengthening supply chain management linked to business strategies

FY2014

・At Toyama Plant, HI-LITE® that is manufactured there underwent
inspections under the U.S. standards NSF / ANSI-50 (standards forequipment for swimming pools) and NSF / ANSI-60 (standard for
drinking water treatment chemicals) and renewed the certifications.

Ｔ Ｏ ＰＩＣ Ｓ

Awarded by MSD as the Best Overall External Site

PLAN

ACTION

Quality Policy

30

Reporting of Improvements and Survey Results at the Committee Meeting
We have a corporate network that requires us to promptly collect customer opinions
concerning products (including complaints and product liability accident information), evaluatethem, and take corrective action if necessary.
We have reduced by half the number of complaints about leakage, foreign substances andcontainers, which were the highest in number in the last three years. We have also checked
the effectiveness of the measures that we implemented. Complaints in fields related to
distribution -- that is, quantity, labeling, and delivery -- have been on an upward trend, so wehave decided to conduct auditing and provide intensive guidance about these processes.

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

* An international standard on quality management systems

Number of complaints by causeseCommunities / Society

Our quality assurance management system is based on ISO9001 (QMS)*. Our plants haveobtained ISO9001 certification. They each maintain and update their certification through thecertifying body. They are also proceeding with revisions to the year 2015 version.
We have established a Quality Assurance Committee that promotes quality assurance activities.
It is chaired by the head of the Environment, Safety & Quality Assurance Department. It consists of
the officer in charge of the Environment, Safety & Quality Assurance Department and the heads of
the Production Technology Department, Purchasing Department, all the business divisions, all theplants and all the laboratories. The committee meets regularly once a year.
The matters reported during the committee meetings are the results of activities, audits,
improvements made in response to audit results, information about complaints, and improvements
made in response to the complaints at Nissan Chemical and affiliates in the fiscal year under review.
The members also discuss action policies related to quality assurance and other items for thefollowing fiscal year. The results of the discussions are reported and approved at board meetingand the management meeting before the quality targets for the following fiscal year are determined.

a
cre
De

Shareholders / Investors

At the general shareholders’ meeting, the president, who acts as the chairperson,
provides explanations of the business report and business plan. We also hold an IR
briefing meeting for institutional investors, analysts, and the media every half year to
explain the overall conditions of our business.

Quality Assurance Management System

DO

CHECK

We provide Merck Animal Health with Fluralaner, an active
ingredient of BRAVECTO®, which is a global veterinary
pharmaceutical. In 2016, we won the “Best Overall External Site 2016”,
an award granted by the parent company of MSD to companies that
ensure a stable supply of high-quality products including
pharmaceuticals, and which have contributed to an increase in the
profits of MSD.

・Nagoya Plant and Toyama Plant received the first JIS certification
renewal examination of AdBlue®, a high-grade urea solution
manufactured at the plants, and passed the examination.

Moving forward, we will promote continuous improvements together
with the plants to provide customers with safer, higher-quality products.

Activity report / Internal audit

57

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201758

C o m muni cat i on with So c ie ty

Relationships with Investors

Relationships with Society

We have formulated a Disclosure Policy and disclose information in accordance with the rules on timely disclosure
established by the Tokyo Stock Exchange, Inc., on which our shares are listed.

We recognize that creating a sustainable society is essential for the growth and development of companies. As a corporate citizen, we
engage in a range of social contribution activities in addition to providing products and services with new values that help enrich people’s lives.

Support for the Next Generation

Disclosure Policy (Excerpt)1) Information Disclosure Standards
The Company will disclose its information in accordance with the Financial Instruments and Exchange Act and other laws and ordinances, and with the Securities
Listing Regulations, and other rules concerned with timely disclosure established by Tokyo Stock Exchange, Inc. where the Company’s shares are listed(hereinafter “the Timely Disclosure Rules”).
In the case where there arises any matter with significant impact on securities investment decisions such as facts concerning decisions or occurrences,financial results and information on any subsidiary, where Tokyo Stock Exchange, Inc. makes an inquiry and requests disclosure of the fact concerned with theinquiry, or where any material content regarding the Company’s information already disclosed is changed, suspended or the like, the Company will disclose
information in compliance with the Timely Disclosure Rules.
In addition, the Company endeavors to disclose company information other than that is required under the Timely Disclosure Rules (hereinafter “information
subject to timely disclosure”), including materials presented in company briefing sessions, as positively and impartially as possible to meet investors’ requests.

2) Information Disclosure Methods
The Company will swiftly publish information that falls under the information subject to timely disclosure by means of the Timely Disclosure Network(TDnet) provided by Tokyo Stock Exchange, Inc., as well as on its own website. At the time of disclosing any information that is not subject to timely
disclosure, the Company shall give consideration to transmission of the information to general investors in an appropriate, accurate and impartial mannerin view of the objective of the Timely Disclosure Rules.

Institutional Investors, Analysts, and the MediaWe hold an IR briefing meeting for institutional investors, analysts, and the media every half year to explain the overall conditions of our business.
This meeting is attended by the officer in charge of IR and the managers responsible from individual divisions. We also hold tours of our facilities for
institutional investors and analysts as needed so that they can see our work sites in person and better understand our production and research. In
addition, we participate every year in conferences in Japan and other countries hosted by securities companies.

Overseas Investors
Our officer in charge of IR participates every year in conferences hosted by securities
companies or other entities that are held in the United States, Europe, Asia and otherregions. At these conferences, the officer provides explanations directly to overseas
investors and exchanges opinions with them.
We publish news releases, business plans, presentation materials for full-year andfirst-half financial results briefing sessions in both Japanese and English at the same time,in principle, with the aim of disclosing information more promptly and fairly to investors inJapan and overseas.

59

Nissan Chemical Industries, Ltd. Annual Report 2017

Ｔ Ｏ ＰＩＣ Ｓ

Summer Riko-Challe 2017
The “Summer Riko-Challe” is an event aimed at arousing interest in and promoting understanding of careers in
the field of science and technology among female students. It is co-hosted by the Cabinet Office, the Ministry of
Education, Culture, Sports, Science and Technology and Keidanren (the Japan Business Federation). In 2017,
we registered to participate in the event for the first time. In July of the same year, Biological Research Laboratories
invited 13 female junior high school students from Saitama and other prefectures for work experience andinteractions with female laboratory staff, thereby deepening their interest in science and technology.

Interaction with Local Residents
We hold plant tours and explanatory meetings on a regular basis for local residents and schools. During these meetings we explain our initiatives fordisaster prevention and environmental protection in an effort to show them that the plants are safe and secure. We also participate in local
beautification activities such as cleaning of public roads and nearby stations around the plants, and activities for planting flowers together withlocal residents. In addition, Onoda Plant co-hosted an event for experiencing “eco-friendly craft in the summer holidays” with the regional councils on
global warming countermeasures of Sanyo-Onoda City. Participants in the event enjoyed creating wind turbines from plastic bottles.

Welfare FundWe have been engaged in welfare fund activities since 1997 as a part of our activities for contributing to local communities. These activities are carried out
individually at the head office and individual offices, plants, laboratories, and group companies. They are also conducted as joint projects. In these activities,
there are cases where staff members visit welfare facilities and ask them what items they need before considering what to donate. Overall, the activities arecarried out in a community-based manner.

Industry Awards

Private Investors
Once a year, we hold a briefing session for private investors, at which the officer in charge of IR
provides explanations. We also hold a convivial party for shareholders after the end of eachgeneral shareholders’ meeting to promote constructive dialogues with the shareholders who
participated in the meeting.

In FY2015, we became involved with the “Tobitate! (Leap for Tomorrow) Young Ambassador Program”, a joint government-industry project for
supporting students who wish to study overseas. This program is aimed at fostering globally competitive individuals who will demonstrate theircapabilities on the world stage in the future. Japanese companies make donations and regularly cooperate with student selection and otherprocesses as judges to send high school and university students, who are the potential future leaders of Japan, to various parts of the world.
In addition, Chemical Research Laboratories and Materials Research Laboratories send their staff members to local elementary schools to give
special classes. In FY2016, they visited three schools and conducted two chemical experiments by picking up familiar themes. Biological ResearchLaboratories provides local junior high school students with opportunities for work experience. In FY2016, it provided four students from two juniorhigh schools with opportunities to experience a range of operations. It also accepts interns and dispatches part-time lecturers.

▲Financial results briefing session

To support the development of synthetic organic chemistry, we established the “Nissan Chemical Industries Award for Novel Reaction & Method” in
FY2009 as an award presented by the Society of Synthetic Organic Chemistry, Japan. This award is granted to researchers who have made creative,
excellent achievements in research related to novel reactions and methods. The research undertaken by Professor Takayoshi Arai of Chiba University,
who was the FY2016 recipient of the award, promotes catalyst searches, the elucidation of complex catalysts’ structures and functions, and thedevelopment of novel reactions made by using them, which is enabled by creating unique asymmetric catalysts. This research is highly acclaimed inJapan and overseas.

Nissan Chemical Industries, Ltd. Annual Report 201760

C o m muni cat i on with So c ie ty

Relationships with Investors

Relationships with Society

We have formulated a Disclosure Policy and disclose information in accordance with the rules on timely disclosure
established by the Tokyo Stock Exchange, Inc., on which our shares are listed.

We recognize that creating a sustainable society is essential for the growth and development of companies. As a corporate citizen, we
engage in a range of social contribution activities in addition to providing products and services with new values that help enrich people’s lives.

Support for the Next Generation

Disclosure Policy (Excerpt)1) Information Disclosure Standards
The Company will disclose its information in accordance with the Financial Instruments and Exchange Act and other laws and ordinances, and with the Securities
Listing Regulations, and other rules concerned with timely disclosure established by Tokyo Stock Exchange, Inc. where the Company’s shares are listed(hereinafter “the Timely Disclosure Rules”).
In the case where there arises any matter with significant impact on securities investment decisions such as facts concerning decisions or occurrences,financial results and information on any subsidiary, where Tokyo Stock Exchange, Inc. makes an inquiry and requests disclosure of the fact concerned with theinquiry, or where any material content regarding the Company’s information already disclosed is changed, suspended or the like, the Company will disclose
information in compliance with the Timely Disclosure Rules.
In addition, the Company endeavors to disclose company information other than that is required under the Timely Disclosure Rules (hereinafter “information
subject to timely disclosure”), including materials presented in company briefing sessions, as positively and impartially as possible to meet investors’ requests.

2) Information Disclosure Methods
The Company will swiftly publish information that falls under the information subject to timely disclosure by means of the Timely Disclosure Network(TDnet) provided by Tokyo Stock Exchange, Inc., as well as on its own website. At the time of disclosing any information that is not subject to timely
disclosure, the Company shall give consideration to transmission of the information to general investors in an appropriate, accurate and impartial mannerin view of the objective of the Timely Disclosure Rules.

Institutional Investors, Analysts, and the MediaWe hold an IR briefing meeting for institutional investors, analysts, and the media every half year to explain the overall conditions of our business.
This meeting is attended by the officer in charge of IR and the managers responsible from individual divisions. We also hold tours of our facilities for
institutional investors and analysts as needed so that they can see our work sites in person and better understand our production and research. In
addition, we participate every year in conferences in Japan and other countries hosted by securities companies.

Overseas Investors
Our officer in charge of IR participates every year in conferences hosted by securities
companies or other entities that are held in the United States, Europe, Asia and otherregions. At these conferences, the officer provides explanations directly to overseas
investors and exchanges opinions with them.
We publish news releases, business plans, presentation materials for full-year andfirst-half financial results briefing sessions in both Japanese and English at the same time,in principle, with the aim of disclosing information more promptly and fairly to investors inJapan and overseas.

59

Nissan Chemical Industries, Ltd. Annual Report 2017

Ｔ Ｏ ＰＩＣ Ｓ

Summer Riko-Challe 2017
The “Summer Riko-Challe” is an event aimed at arousing interest in and promoting understanding of careers in
the field of science and technology among female students. It is co-hosted by the Cabinet Office, the Ministry of
Education, Culture, Sports, Science and Technology and Keidanren (the Japan Business Federation). In 2017,
we registered to participate in the event for the first time. In July of the same year, Biological Research Laboratories
invited 13 female junior high school students from Saitama and other prefectures for work experience andinteractions with female laboratory staff, thereby deepening their interest in science and technology.

Interaction with Local Residents
We hold plant tours and explanatory meetings on a regular basis for local residents and schools. During these meetings we explain our initiatives fordisaster prevention and environmental protection in an effort to show them that the plants are safe and secure. We also participate in local
beautification activities such as cleaning of public roads and nearby stations around the plants, and activities for planting flowers together withlocal residents. In addition, Onoda Plant co-hosted an event for experiencing “eco-friendly craft in the summer holidays” with the regional councils on
global warming countermeasures of Sanyo-Onoda City. Participants in the event enjoyed creating wind turbines from plastic bottles.

Welfare FundWe have been engaged in welfare fund activities since 1997 as a part of our activities for contributing to local communities. These activities are carried out
individually at the head office and individual offices, plants, laboratories, and group companies. They are also conducted as joint projects. In these activities,
there are cases where staff members visit welfare facilities and ask them what items they need before considering what to donate. Overall, the activities arecarried out in a community-based manner.

Industry Awards

Private Investors
Once a year, we hold a briefing session for private investors, at which the officer in charge of IR
provides explanations. We also hold a convivial party for shareholders after the end of eachgeneral shareholders’ meeting to promote constructive dialogues with the shareholders who
participated in the meeting.

In FY2015, we became involved with the “Tobitate! (Leap for Tomorrow) Young Ambassador Program”, a joint government-industry project for
supporting students who wish to study overseas. This program is aimed at fostering globally competitive individuals who will demonstrate theircapabilities on the world stage in the future. Japanese companies make donations and regularly cooperate with student selection and otherprocesses as judges to send high school and university students, who are the potential future leaders of Japan, to various parts of the world.
In addition, Chemical Research Laboratories and Materials Research Laboratories send their staff members to local elementary schools to give
special classes. In FY2016, they visited three schools and conducted two chemical experiments by picking up familiar themes. Biological ResearchLaboratories provides local junior high school students with opportunities for work experience. In FY2016, it provided four students from two juniorhigh schools with opportunities to experience a range of operations. It also accepts interns and dispatches part-time lecturers.

▲Financial results briefing session

To support the development of synthetic organic chemistry, we established the “Nissan Chemical Industries Award for Novel Reaction & Method” in
FY2009 as an award presented by the Society of Synthetic Organic Chemistry, Japan. This award is granted to researchers who have made creative,
excellent achievements in research related to novel reactions and methods. The research undertaken by Professor Takayoshi Arai of Chiba University,
who was the FY2016 recipient of the award, promotes catalyst searches, the elucidation of complex catalysts’ structures and functions, and thedevelopment of novel reactions made by using them, which is enabled by creating unique asymmetric catalysts. This research is highly acclaimed inJapan and overseas.

Nissan Chemical Industries, Ltd. Annual Report 201760

C o m muni cat i on with So c ie ty

Relationships with Employees
Approach

Training and Capability Development

In the mid-term business plan “Vista2021”, “transforming into an organization where excellent challengers are fostered and utilizing the ideas of a diverse range of individuals”
is described as the way our group should be. To bring these situations about, we intend to tackle a range of initiatives including the exchange of personnel between
departments and the promotion of diversity. We also instituted health promotion initiatives, including mental health measures, to create a pleasant work environment. As aresult, we were recognized under the “2017 Certified Health and Productivity Management Organization Recognition Program (White 500)*” in February 2017. We willcontinue to create organizations and work environments that will allow employees to demonstrate their capabilities to the fullest.

We believe it is essential for human resource development that “each employee should continue to educate themselves voluntarily in their efforts to develop themselves”.
We have therefore introduced various human resource development programs for our employees who aspire to learn new things and develop themselves.

2011

2012

2013

2014

2015

2016 (FY)

List of training programs (implemented in FY2016)
Name

Content

PeriodNew staff self-start training

Improvement of communication skills / Career training

43

28 daysSecond year self-start training

Presentation of assigned research papers

36

2 daysThird year self-start training

Presentation of assigned research papers / Development of junior leadership33

4 daysTraining before promotion to C3 Class / managerial position

Developing the capability of setting essential challenges and the capability of formulating strategies

66

6 daysTraining before promotion to A3 class

Developing leadership22

4 days

Evaluator training

Improving evaluation skills

55

1 day

Domestic and overseas study programs

Fostering next-generation leaders

5

Overseas language study program

Dispatch to overseas language schools

6

90 daysE-mail writing training

Improving skills in writing e-mails in English

96

1 day

Strategic OJTImproving the capability of developing human resources

22

Correspondence course

Improving the business execution capability

851

2.35

2.30

Employment of People with Disabilities

2.20

For more than ten years, we have kept the percentage of employees with disabilities at a level
above the statutory minimum rate. We will continue to observe the legal requirements andremain proactive in providing workplaces that enable the active participation of people withdisabilities.

2.10

2.23
2.22

2.15

2.12

2.00

1.96

1.90

1.70

Statutory minimum level2012 and before: 1.80%
Since 2013: 2.00%

2011

2012

2013

2014

2015

2016 (FY)▲People who completed the overseas language study program (fourth class)Nissan Chemical Industries, Ltd. Annual Report 2017

Number of trainees

Percentage of employees with disabilities
(%)
2.40

1.80

61

CSR training

0

CommonTraining on health management / promotion

5

Cultural education

Compliance training

14.0

12.0

10

Acquisition of qualifications

15

Dispatch to external classes for acquiring specialized knowledge

17.1

New employee
training

Correspondence course

19.2

New staff
self-start training

Cross-cultural communication training(Overseas language program, English conversation training, etc.)

20

28.2

21.9

Second year
self-start training

Domestic and overseas study programs

25

Business
improvement training

Production technology presentation

30

Third year
self-start training

Strategic OJT

35

Activities for Recruiting Foreign Students
We recruit foreign students as a measure for developing globally competitive humanresources. For this purpose, we are focusing mainly on enhancing public relations activities,
such as posting information on job hunting websites, in addition to participating in company
information sessions for foreign students. Moving forward, we will continue to promote thediversity of our human resources by employing foreign students continually and create anorganization that will allow diverse human resources to demonstrate their capabilities.

Target: 30%

Training before
promotion to A3 class

Theme proposal system● Period of the plan Five years from April 1, 2016 to March 31, 2021
The proportion of women among employees in the main career track is especially low.
● Issue
Increase the proportion of women among employees in the main career track to 10% or higher● Target● Actions to take
1. Increase the proportion of women among new graduates in the main career track to 30% or higher
2. Assign women proactively to departments with low rates of female employees in the main career track(%)
40

Training before promotion
to C3 class

R&D strategic planning training

Action Plan for Promoting Active Participation of Women in the Workplace (Excerpt)

Proportion of women among new graduates in the main career track

Training for improving
on-site capabilities

Dispatch to external research institutions

At Nissan Chemical, a diverse range of individuals have been actively contributing to the groupwith their excellent talents in a wide range of fields irrespective of age, gender and nationality.
We will continue to promote respect for diversity in accordance with our action plans andsimilar. One thing that we are proud of is our high employee retention rate. We believe that our
workplace environment allows each individual employee to play an active part.

Training before promotion
to managerial position

Participation in academic meetings

Respect for Diversity, Personal Characteristics and Ways of Thinking of Individuals

A class

Internal research exchange meeting● Building a policy on human resource development: “What the leaders of Nissan Chemical should be like”● Introducing career support programs that encourage individuals to take on “challenges”● Developing management human resources and globally competitive human resources and enhancing measures for beginning to foster them at an early stageNon-managerial positions

Our personnel system is a structure that, through the interactive communication (dialogue) with their superiors, staff as “an independent individual” can work
vibrantly with high motivation, utilizing their creativity while feeling their own growth toward the ideal picture of who they want to be. We strive to improve thetransparency and persuasiveness of our personnel evaluation to make it fair, and ensure that it better reflects the achievements and contributions of employees.
In “Progress2030”, our long-term business plan, we set “a group of innovators who embody dreams” as the vision of what we should aim for as an enterprise. To
make this vision a reality with initiatives in the personnel system, we promote the following measures.

Managerial position / C class

Evaluator Training

Personnel System

Improving research and development capabilities Developing a cosmopolitan Support for careerand production technology capabilities
way of thinking
development
CommonManagerial position / C classManagerial position / C class
CommonDeveloping leadershipManagerial positions*

A program for recognizing “health and productivity management” initiatives with which employee health management is considered from the viewpoint of business administration and put into practice strategically.

Educational Training System▲Training before promotion to C3 class▲Training before promotion to managerial position

Nissan Chemical Industries, Ltd. Annual Report 201762

C o m muni cat i on with So c ie ty

Relationships with Employees
Approach

Training and Capability Development

In the mid-term business plan “Vista2021”, “transforming into an organization where excellent challengers are fostered and utilizing the ideas of a diverse range of individuals”
is described as the way our group should be. To bring these situations about, we intend to tackle a range of initiatives including the exchange of personnel between
departments and the promotion of diversity. We also instituted health promotion initiatives, including mental health measures, to create a pleasant work environment. As aresult, we were recognized under the “2017 Certified Health and Productivity Management Organization Recognition Program (White 500)*” in February 2017. We willcontinue to create organizations and work environments that will allow employees to demonstrate their capabilities to the fullest.

We believe it is essential for human resource development that “each employee should continue to educate themselves voluntarily in their efforts to develop themselves”.
We have therefore introduced various human resource development programs for our employees who aspire to learn new things and develop themselves.

2011

2012

2013

2014

2015

2016 (FY)

List of training programs (implemented in FY2016)
Name

Content

PeriodNew staff self-start training

Improvement of communication skills / Career training

43

28 daysSecond year self-start training

Presentation of assigned research papers

36

2 daysThird year self-start training

Presentation of assigned research papers / Development of junior leadership33

4 daysTraining before promotion to C3 Class / managerial position

Developing the capability of setting essential challenges and the capability of formulating strategies

66

6 daysTraining before promotion to A3 class

Developing leadership22

4 days

Evaluator training

Improving evaluation skills

55

1 day

Domestic and overseas study programs

Fostering next-generation leaders

5

Overseas language study program

Dispatch to overseas language schools

6

90 daysE-mail writing training

Improving skills in writing e-mails in English

96

1 day

Strategic OJTImproving the capability of developing human resources

22

Correspondence course

Improving the business execution capability

851

2.35

2.30

Employment of People with Disabilities

2.20

For more than ten years, we have kept the percentage of employees with disabilities at a level
above the statutory minimum rate. We will continue to observe the legal requirements andremain proactive in providing workplaces that enable the active participation of people withdisabilities.

2.10

2.23
2.22

2.15

2.12

2.00

1.96

1.90

1.70

Statutory minimum level2012 and before: 1.80%
Since 2013: 2.00%

2011

2012

2013

2014

2015

2016 (FY)▲People who completed the overseas language study program (fourth class)Nissan Chemical Industries, Ltd. Annual Report 2017

Number of trainees

Percentage of employees with disabilities
(%)
2.40

1.80

61

CSR training

0

CommonTraining on health management / promotion

5

Cultural education

Compliance training

14.0

12.0

10

Acquisition of qualifications

15

Dispatch to external classes for acquiring specialized knowledge

17.1

New employee
training

Correspondence course

19.2

New staff
self-start training

Cross-cultural communication training(Overseas language program, English conversation training, etc.)

20

28.2

21.9

Second year
self-start training

Domestic and overseas study programs

25

Business
improvement training

Production technology presentation

30

Third year
self-start training

Strategic OJT

35

Activities for Recruiting Foreign Students
We recruit foreign students as a measure for developing globally competitive humanresources. For this purpose, we are focusing mainly on enhancing public relations activities,
such as posting information on job hunting websites, in addition to participating in company
information sessions for foreign students. Moving forward, we will continue to promote thediversity of our human resources by employing foreign students continually and create anorganization that will allow diverse human resources to demonstrate their capabilities.

Target: 30%

Training before
promotion to A3 class

Theme proposal system● Period of the plan Five years from April 1, 2016 to March 31, 2021
The proportion of women among employees in the main career track is especially low.
● Issue
Increase the proportion of women among employees in the main career track to 10% or higher● Target● Actions to take
1. Increase the proportion of women among new graduates in the main career track to 30% or higher
2. Assign women proactively to departments with low rates of female employees in the main career track(%)
40

Training before promotion
to C3 class

R&D strategic planning training

Action Plan for Promoting Active Participation of Women in the Workplace (Excerpt)

Proportion of women among new graduates in the main career track

Training for improving
on-site capabilities

Dispatch to external research institutions

At Nissan Chemical, a diverse range of individuals have been actively contributing to the groupwith their excellent talents in a wide range of fields irrespective of age, gender and nationality.
We will continue to promote respect for diversity in accordance with our action plans andsimilar. One thing that we are proud of is our high employee retention rate. We believe that our
workplace environment allows each individual employee to play an active part.

Training before promotion
to managerial position

Participation in academic meetings

Respect for Diversity, Personal Characteristics and Ways of Thinking of Individuals

A class

Internal research exchange meeting● Building a policy on human resource development: “What the leaders of Nissan Chemical should be like”● Introducing career support programs that encourage individuals to take on “challenges”● Developing management human resources and globally competitive human resources and enhancing measures for beginning to foster them at an early stageNon-managerial positions

Our personnel system is a structure that, through the interactive communication (dialogue) with their superiors, staff as “an independent individual” can work
vibrantly with high motivation, utilizing their creativity while feeling their own growth toward the ideal picture of who they want to be. We strive to improve thetransparency and persuasiveness of our personnel evaluation to make it fair, and ensure that it better reflects the achievements and contributions of employees.
In “Progress2030”, our long-term business plan, we set “a group of innovators who embody dreams” as the vision of what we should aim for as an enterprise. To
make this vision a reality with initiatives in the personnel system, we promote the following measures.

Managerial position / C class

Evaluator Training

Personnel System

Improving research and development capabilities Developing a cosmopolitan Support for careerand production technology capabilities
way of thinking
development
CommonManagerial position / C classManagerial position / C class
CommonDeveloping leadershipManagerial positions*

A program for recognizing “health and productivity management” initiatives with which employee health management is considered from the viewpoint of business administration and put into practice strategically.

Educational Training System▲Training before promotion to C3 class▲Training before promotion to managerial position

Nissan Chemical Industries, Ltd. Annual Report 201762

C o m muni cat i on with So c ie ty

Relationships with EmployeesAwards Program

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

We support the promotion of good physical and mental health proactively by working together with the Nissan Chemical Health Insurance Association sothat all our employees can enjoy working.

NameCentral Awards
Division Awards
Office Awards

Presenter

Content

President and CEO
Commend employees who have made beneficial
Head of each division inventions, devised improvement measures, ormade remarkable achievements and contributions.
Head of each office

Officer in charge of
Rewards forIntellectual Property
Excellent Inventions Department

Reward excellent inventions at an early stage topromote the improvement of R&D capabilities. Rank
S rewards are granted to more excellent inventions.

Number of awards Number of rewarded
2
3
11

9
18
69

21
(Rank S: 3inventions)69● In February 2017, we were recognized under the“2017 Certified Health and Productivity Management
Organization Recognition Program (White 500)”.

▲Central Awards presentation ceremony

Creation of a Comfortable Workplace
We have introduced a wide variety of programs and measures that enable employees to work in a highly productive manner and achieve a good work-lifebalance. In recent years, we have maintained a high rate of paid leave use of more than 70%. In addition, we have implemented No Overtime Day andother measures to raise employee awareness toward work efficiency and help create a comfortable workplace.

Name

Promotion of Appropriate Work Hours

Flextime
Childcare Leave
Paternity Leave
Nursing Care Leave
Family Care Leave
Shorter Working Hours
Half-day Leave

Content
This system has been introduced at the head office and laboratories.
If certain requirements are fulfilled, an employee may take childcare leave until theirchild is two years old or until the coming April 20 after the child’s first birthday.
A male employee whose spouse gave birth to a child may take up to seven days ofpaternity leave (paid leave) within eight weeks of the child’s birth.
An employee may use up to 20 days per year of annual leave which has been saved up
for childcare or spousal care and which is no longer valid.
If certain requirements are fulfilled, an employee may take up to 365 days of family care leave in
total per family member needing care. Family care leave may be taken in up to three installments.
Specified working hours may be shortened by units of 30 minutes and by up to 120 minutes
for looking after children in third grade (elementary school) or younger.
An employee may take annual leave by units of half days, with an upper limit of 30 times per year.

We recommend that 2 days of company-wide planned leave and 3 days of individually planned leave are taken every year.
An employee may save up a maximum of 40 days of annual leave that are invalid and use
Annual Leave Accumulation them as medical leave, leave for their own sickness, leave to conduct a complete medical
checkup, leave to look after elderly or sick family members, or for other similar purposes.
An employee may take ten consecutive days of leave (paid leave) within one year after
Refreshment Leave
becoming 50 years old. Financial aid is also granted.
Re-employment Refreshment Leave An employee may take three consecutive days of leave (paid leave) within one month
before or after their mandatory retirement.
Planned Leave

Regular Health Checkups● We encourage employees to undergo regular health checkups
by targeting a rate of 100%. We achieved the target rate of
100% in FY2016 (Note).
Note: Employees on temporary retirement, etc. are excluded.

Mental Health Measures(FY2016)

Systems for Promoting a Good Work-Life Balance2017 Certified Health and Productivity Management
Organization Recognition Program (White 500)

●Encouraging employees to take annual paid leave:
As a result of labor-management consultations,
we recommend that two days of company-wideplanned leave and three days of individuallyplanned leave are taken every year. An annual
paid leave calendar is created at each workplace.
In addition, for employees who have taken very
few days of paid leave, the Personnel Department
contacts the superiors of such employees andencourages them to take paid leave.
●No Overtime Day:
This program is implemented at our head officeand plants. No Overtime Day is set at eachbusiness location based on its own conditions.
Measures including patrols are taken so that the
program will not be a mere façade.

Countermeasures against Harassment
The revised Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment and the revised Act on Childcare Leave, Caregiver Leave
and Other Measures for the Welfare of Workers Caring for Children or Other Family Members came into full effect on January 1, 2017. These laws make it mandatory for
employers to take measures for preventing harassment by superiors or co-workers related to pregnancy, childbirth, childcare leave, family care leave and similar events.

● We carry out a stress check, analyze its results and give feedback, and provide Line-Care* 1 and Self-Care*2 Training as necessary.
● Stress check (September 2016): Undergone by 99.4% of all employees● Organizational analysis of stress check and reporting session: A total of twelve reporting sessions were held for executives at the head office,laboratories, and plants. The analysis and holding of reporting sessions were outsourced to an external specialty company.
● Training: Self-Care Training was provided twice to new employees and those who had never undergone the training.

provided by manager / supervisor. It includes understanding and improving the work environment daily and providing consultations to subordinates.
*12 CareCare that can be provided to oneself. It includes being aware of one’s own stress and preventing or coping with stress.
*

Health Promotion Committee● The members of this committee are selected from the company, the Nissan Chemical Health Insurance Association, and the Nissan Chemical
Labor Union, two from each, and meet regularly to discuss health promotion measures. The committee met four times in FY2016.

Labor-Management Relationship Based on Open Dialogue and Mutual Understanding
Nissan Chemical and the Nissan Chemical Labor Union have built a good relationship based on mutual understanding and trust. They strive to improve labor conditions
and develop systems through discussions as good partners to the management by taking a range of measures, including holding periodic meetings for reporting
business results and initiatives for better work-life balance.
All non-managerial employees, excluding those who have concluded a special agreement with the company, belong to the Nissan Chemical Labor Union. The number(as of March 31, 2017)of its members is 1,417 (including those from some affiliates).
Name of the meeting

Content

Central Management
Advisory Council

The policies and financial results of the company
are explained by the management to the labor union
members.
1) Explanation of the contents of the Central
Management Advisory Council
2) Discussions about problems that are specific toeach business location
Opportunities for the management and general
union members to have open dialogues. Union
members can discuss issues and problems of theirown workplaces directly with the management.
The Personnel Department and executive membersof the labor union regularly exchange opinions
about a wide range of problems and hold discussions
to solve issues.
Two each are selected from the company, the healthinsurance association, and the labor union as its
members, who discuss measures for promoting
good health among employees and other issues.
This committee was launched in 2017 as a forum forlabor-management discussions for reviewing theworkstyle.

Business Location
Management Advisory
Council
Dialogue activities
Labor-Management
Committee
Health Promotion
Committee

Countermeasures against Power Harassment● In 2013, we introduced training for obtaining basic knowledge on power harassment as part of the training before promotion to A3 class (positions equivalent to team leaders at plants).
More than 100 employees have undergone this training so far.
● Consultation services and explanatory materials are provided on our intranet (internal network) to raise awareness of power harassment.

▲Certificate granted under the 2017
Certified Health and Productivity
Management Organization
Recognition Program

Workstyle Committee

Number of meetings Number of participants
held in FY2016
per meeting
2Company: 6
Labor union: 7

Differs
amongbusiness
locationsExecutives of thebusiness location
Executives of thelabor union branch
Company: 3
Labor union:
Slightly more than
10

3

8

Company: 3
Labor union: 7

4

Company: 2
Health insurance
union: 2
Labor union: 2

ーー▲Central Management Advisory Council

Measures against Harassment Related to Pregnancy, Childbirth, Childcare Leave, Family Care Leave, etc.
● We have added consultation services and explanatory materials on harassment related to pregnancy, childbirth, childcare leave, family care leave, etc. to the existing ones on sexual harassment.
● We have revised our rules of employment in our efforts to prevent harassment.

63

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201764

C o m muni cat i on with So c ie ty

Relationships with EmployeesAwards Program

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

We support the promotion of good physical and mental health proactively by working together with the Nissan Chemical Health Insurance Association sothat all our employees can enjoy working.

NameCentral Awards
Division Awards
Office Awards

Presenter

Content

President and CEO
Commend employees who have made beneficial
Head of each division inventions, devised improvement measures, ormade remarkable achievements and contributions.
Head of each office

Officer in charge of
Rewards forIntellectual Property
Excellent Inventions Department

Reward excellent inventions at an early stage topromote the improvement of R&D capabilities. Rank
S rewards are granted to more excellent inventions.

Number of awards Number of rewarded
2
3
11

9
18
69

21
(Rank S: 3inventions)69● In February 2017, we were recognized under the“2017 Certified Health and Productivity Management
Organization Recognition Program (White 500)”.

▲Central Awards presentation ceremony

Creation of a Comfortable Workplace
We have introduced a wide variety of programs and measures that enable employees to work in a highly productive manner and achieve a good work-lifebalance. In recent years, we have maintained a high rate of paid leave use of more than 70%. In addition, we have implemented No Overtime Day andother measures to raise employee awareness toward work efficiency and help create a comfortable workplace.

Name

Promotion of Appropriate Work Hours

Flextime
Childcare Leave
Paternity Leave
Nursing Care Leave
Family Care Leave
Shorter Working Hours
Half-day Leave

Content
This system has been introduced at the head office and laboratories.
If certain requirements are fulfilled, an employee may take childcare leave until theirchild is two years old or until the coming April 20 after the child’s first birthday.
A male employee whose spouse gave birth to a child may take up to seven days ofpaternity leave (paid leave) within eight weeks of the child’s birth.
An employee may use up to 20 days per year of annual leave which has been saved up
for childcare or spousal care and which is no longer valid.
If certain requirements are fulfilled, an employee may take up to 365 days of family care leave in
total per family member needing care. Family care leave may be taken in up to three installments.
Specified working hours may be shortened by units of 30 minutes and by up to 120 minutes
for looking after children in third grade (elementary school) or younger.
An employee may take annual leave by units of half days, with an upper limit of 30 times per year.

We recommend that 2 days of company-wide planned leave and 3 days of individually planned leave are taken every year.
An employee may save up a maximum of 40 days of annual leave that are invalid and use
Annual Leave Accumulation them as medical leave, leave for their own sickness, leave to conduct a complete medical
checkup, leave to look after elderly or sick family members, or for other similar purposes.
An employee may take ten consecutive days of leave (paid leave) within one year after
Refreshment Leave
becoming 50 years old. Financial aid is also granted.
Re-employment Refreshment Leave An employee may take three consecutive days of leave (paid leave) within one month
before or after their mandatory retirement.
Planned Leave

Regular Health Checkups● We encourage employees to undergo regular health checkups
by targeting a rate of 100%. We achieved the target rate of
100% in FY2016 (Note).
Note: Employees on temporary retirement, etc. are excluded.

Mental Health Measures(FY2016)

Systems for Promoting a Good Work-Life Balance2017 Certified Health and Productivity Management
Organization Recognition Program (White 500)

●Encouraging employees to take annual paid leave:
As a result of labor-management consultations,
we recommend that two days of company-wideplanned leave and three days of individuallyplanned leave are taken every year. An annual
paid leave calendar is created at each workplace.
In addition, for employees who have taken very
few days of paid leave, the Personnel Department
contacts the superiors of such employees andencourages them to take paid leave.
●No Overtime Day:
This program is implemented at our head officeand plants. No Overtime Day is set at eachbusiness location based on its own conditions.
Measures including patrols are taken so that the
program will not be a mere façade.

Countermeasures against Harassment
The revised Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment and the revised Act on Childcare Leave, Caregiver Leave
and Other Measures for the Welfare of Workers Caring for Children or Other Family Members came into full effect on January 1, 2017. These laws make it mandatory for
employers to take measures for preventing harassment by superiors or co-workers related to pregnancy, childbirth, childcare leave, family care leave and similar events.

● We carry out a stress check, analyze its results and give feedback, and provide Line-Care* 1 and Self-Care*2 Training as necessary.
● Stress check (September 2016): Undergone by 99.4% of all employees● Organizational analysis of stress check and reporting session: A total of twelve reporting sessions were held for executives at the head office,laboratories, and plants. The analysis and holding of reporting sessions were outsourced to an external specialty company.
● Training: Self-Care Training was provided twice to new employees and those who had never undergone the training.

provided by manager / supervisor. It includes understanding and improving the work environment daily and providing consultations to subordinates.
*12 CareCare that can be provided to oneself. It includes being aware of one’s own stress and preventing or coping with stress.
*

Health Promotion Committee● The members of this committee are selected from the company, the Nissan Chemical Health Insurance Association, and the Nissan Chemical
Labor Union, two from each, and meet regularly to discuss health promotion measures. The committee met four times in FY2016.

Labor-Management Relationship Based on Open Dialogue and Mutual Understanding
Nissan Chemical and the Nissan Chemical Labor Union have built a good relationship based on mutual understanding and trust. They strive to improve labor conditions
and develop systems through discussions as good partners to the management by taking a range of measures, including holding periodic meetings for reporting
business results and initiatives for better work-life balance.
All non-managerial employees, excluding those who have concluded a special agreement with the company, belong to the Nissan Chemical Labor Union. The number(as of March 31, 2017)of its members is 1,417 (including those from some affiliates).
Name of the meeting

Content

Central Management
Advisory Council

The policies and financial results of the company
are explained by the management to the labor union
members.
1) Explanation of the contents of the Central
Management Advisory Council
2) Discussions about problems that are specific toeach business location
Opportunities for the management and general
union members to have open dialogues. Union
members can discuss issues and problems of theirown workplaces directly with the management.
The Personnel Department and executive membersof the labor union regularly exchange opinions
about a wide range of problems and hold discussions
to solve issues.
Two each are selected from the company, the healthinsurance association, and the labor union as its
members, who discuss measures for promoting
good health among employees and other issues.
This committee was launched in 2017 as a forum forlabor-management discussions for reviewing theworkstyle.

Business Location
Management Advisory
Council
Dialogue activities
Labor-Management
Committee
Health Promotion
Committee

Countermeasures against Power Harassment● In 2013, we introduced training for obtaining basic knowledge on power harassment as part of the training before promotion to A3 class (positions equivalent to team leaders at plants).
More than 100 employees have undergone this training so far.
● Consultation services and explanatory materials are provided on our intranet (internal network) to raise awareness of power harassment.

▲Certificate granted under the 2017
Certified Health and Productivity
Management Organization
Recognition Program

Workstyle Committee

Number of meetings Number of participants
held in FY2016
per meeting
2Company: 6
Labor union: 7

Differs
amongbusiness
locationsExecutives of thebusiness location
Executives of thelabor union branch
Company: 3
Labor union:
Slightly more than
10

3

8

Company: 3
Labor union: 7

4

Company: 2
Health insurance
union: 2
Labor union: 2

ーー▲Central Management Advisory Council

Measures against Harassment Related to Pregnancy, Childbirth, Childcare Leave, Family Care Leave, etc.
● We have added consultation services and explanatory materials on harassment related to pregnancy, childbirth, childcare leave, family care leave, etc. to the existing ones on sexual harassment.
● We have revised our rules of employment in our efforts to prevent harassment.

63

Nissan Chemical Industries, Ltd. Annual Report 2017

Nissan Chemical Industries, Ltd. Annual Report 201764

Financial Section
Financial Review

Financial Review of the Year Ended March 31, 2017

Overview

Operating Results

increase of 3,579 million yen from March 31, 2016). It is mainly due toDuring the year ended March 31, 2017 (from April 1, 2016 to March 31,

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

the increase of notes and accounts receivable - trade.

2017), the domestic economy has been slowly recovering due to thewere 180,289 million yen (an increase of 3,394 million yen from theAlso, total liabilities as of March 31, 2017 were 68,041 million yen (aimprovement of income environment and employment situation thoughsame period of the previous year). Operating income was 31,438

decrease of 3,203 million yen). It is mainly due to the decrease of long -activities for the year ended March 31, 2017 were 13,152 million yen

the individual consumption seems weak. By contrast, the world

million yen (an increase of 2,832 million yen). Ordinary income wasterm loans payable.

(8,416 million yen).

economy has increased a sense of uncertain and foreign currency

31,713 million yen (an increase of 2,181 million yen). Net income

exchange and fuel prices have fluctuated.

attributable to owners of parent was 24,026 million yen (an increase of

In this situation, in our group business, the sales of Chemicals

We have achieved the highest operating income and ordinary

investment on plant and equipment, net cash used in investing

Due to the share repurchase, payment for dividends and payments of

Net assets as of March 31, 2017 were 163,707 million yen (anlong-term loans payable, net cash used in financing activities for theincrease of 6,782 million yen).

year ended March 31, 2017 were 19,042 million yen (17,317 million
yen).

1.8 point from March 31, 2016).

As a result of these factors, cash and cash equivalents at end of thisChemicals. In the Performance Materials Segment, the Display

income for three consecutive years and regarding net income

Materials had healthy sales. In the Agricultural Chemicals Segment,

attributable to owners of parent, we have achieved it for four

Position of Cash Flow

period were 35,701 million yen (35,335 million yen), reflecting 94 million

the sales of Fluralaner (an active ingredient of veterinary pharmaceuti-consecutive years.

Deducting income taxes paid from income before income taxes andyen effect of exchange rate changes and 25 million yen decrease in

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

cash and cash equivalents resulting from exclusion of subsidiaries

cal) increased. In the Pharmaceutical Segment, the domestic sales of“LIVALO ” (anti-cholesterol drug) decreased due to expansion of

Financial Position

capital, net cash provided by operating activities for the year ended

from consolidation. It increased by 365 million yen from March 31,

generic products.

Total assets as of March 31, 2017 were 231,748 million yen (anMarch 31, 2017 were 32,491 million yen (29,989 million yen for the

2016.

®

Operating Income (Millions of Yen)

Net Income per Share (Yen)

35,000160

28,60630,00025,34725,00020,00022,246
19,548

Total Assets (Millions of Yen)
156.9731,438

223,854140
200,000
120

228,169 231,748

207,999
199,243

113.99100

83.74

150,000

0

Nissan Chemical Industries, Ltd. Annual Report 2017

0

30

11.4

12.7

12.7

14.6

36

FY2012 FY2013 FY2014 FY2015 FY2016

0

30
26

10,000

10,245
9,796
9,544
9,684
8,786
8,889
8,515 8,452
8,085

7,500

20

5,000

10

2,500

15.1

10

0

14,29912,50044

20FY2012 FY2013 FY2014 FY2015 FY2016

15,000503020FY2012 FY2013 FY2014 FY2015 FY2016

60

52

60

50,000Capital Expenditures
Depreciation Expense (Millions of Yen)

Dividends per Share (Yen)

40

40

5,000

68.1

69.9

40

100,000

60

Equity Ratio (%)
Return on Equity (%)
66.9
70
65.7
63.0

50

102.11

15,00010,000250,000

143.3780

65

Due to the proceeds from sales of investment securities and the

As a result of these factors, equity ratio was 69.9% (an increase of

1,676 million yen).

Segment strongly increased in both Basic Chemicals and Fine

same period of the previous year).

FY2012 FY2013 FY2014 FY2015 FY2016

0

FY2012 FY2013 FY2014 FY2015 FY2016

0

FY2012 FY2013 FY2014 FY2015 FY2016

Nissan Chemical Industries, Ltd. Annual Report 201766

Financial Section
Financial Review

Financial Review of the Year Ended March 31, 2017

Overview

Operating Results

increase of 3,579 million yen from March 31, 2016). It is mainly due toDuring the year ended March 31, 2017 (from April 1, 2016 to March 31,

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

the increase of notes and accounts receivable - trade.

2017), the domestic economy has been slowly recovering due to thewere 180,289 million yen (an increase of 3,394 million yen from theAlso, total liabilities as of March 31, 2017 were 68,041 million yen (aimprovement of income environment and employment situation thoughsame period of the previous year). Operating income was 31,438

decrease of 3,203 million yen). It is mainly due to the decrease of long -activities for the year ended March 31, 2017 were 13,152 million yen

the individual consumption seems weak. By contrast, the world

million yen (an increase of 2,832 million yen). Ordinary income wasterm loans payable.

(8,416 million yen).

economy has increased a sense of uncertain and foreign currency

31,713 million yen (an increase of 2,181 million yen). Net income

exchange and fuel prices have fluctuated.

attributable to owners of parent was 24,026 million yen (an increase of

In this situation, in our group business, the sales of Chemicals

We have achieved the highest operating income and ordinary

investment on plant and equipment, net cash used in investing

Due to the share repurchase, payment for dividends and payments of

Net assets as of March 31, 2017 were 163,707 million yen (anlong-term loans payable, net cash used in financing activities for theincrease of 6,782 million yen).

year ended March 31, 2017 were 19,042 million yen (17,317 million
yen).

1.8 point from March 31, 2016).

As a result of these factors, cash and cash equivalents at end of thisChemicals. In the Performance Materials Segment, the Display

income for three consecutive years and regarding net income

Materials had healthy sales. In the Agricultural Chemicals Segment,

attributable to owners of parent, we have achieved it for four

Position of Cash Flow

period were 35,701 million yen (35,335 million yen), reflecting 94 million

the sales of Fluralaner (an active ingredient of veterinary pharmaceuti-consecutive years.

Deducting income taxes paid from income before income taxes andyen effect of exchange rate changes and 25 million yen decrease in

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

cash and cash equivalents resulting from exclusion of subsidiaries

cal) increased. In the Pharmaceutical Segment, the domestic sales of“LIVALO ” (anti-cholesterol drug) decreased due to expansion of

Financial Position

capital, net cash provided by operating activities for the year ended

from consolidation. It increased by 365 million yen from March 31,

generic products.

Total assets as of March 31, 2017 were 231,748 million yen (anMarch 31, 2017 were 32,491 million yen (29,989 million yen for the

2016.

®

Operating Income (Millions of Yen)

Net Income per Share (Yen)

35,000160

28,60630,00025,34725,00020,00022,246
19,548

Total Assets (Millions of Yen)
156.9731,438

223,854140
200,000
120

228,169 231,748

207,999
199,243

113.99100

83.74

150,000

0

Nissan Chemical Industries, Ltd. Annual Report 2017

0

30

11.4

12.7

12.7

14.6

36

FY2012 FY2013 FY2014 FY2015 FY2016

0

30
26

10,000

10,245
9,796
9,544
9,684
8,786
8,889
8,515 8,452
8,085

7,500

20

5,000

10

2,500

15.1

10

0

14,29912,50044

20FY2012 FY2013 FY2014 FY2015 FY2016

15,000503020FY2012 FY2013 FY2014 FY2015 FY2016

60

52

60

50,000Capital Expenditures
Depreciation Expense (Millions of Yen)

Dividends per Share (Yen)

40

40

5,000

68.1

69.9

40

100,000

60

Equity Ratio (%)
Return on Equity (%)
66.9
70
65.7
63.0

50

102.11

15,00010,000250,000

143.3780

65

Due to the proceeds from sales of investment securities and the

As a result of these factors, equity ratio was 69.9% (an increase of

1,676 million yen).

Segment strongly increased in both Basic Chemicals and Fine

same period of the previous year).

FY2012 FY2013 FY2014 FY2015 FY2016

0

FY2012 FY2013 FY2014 FY2015 FY2016

0

FY2012 FY2013 FY2014 FY2015 FY2016

Nissan Chemical Industries, Ltd. Annual Report 201766

Consolidated Balance Sheets
For FY2016 and FY2015(Thousands of
U.S. dollars)(Millions of Yen)

Assets

FY2016FY2016FY2015

Liabilities

FY2016FY2015FY2016¥ 14,943¥ 15,350$ 133,182

Short-term loans payable

23,15522,938206,373

Current portion of long-term loans payable

3,070

3,060

27,362Current liabilities

Current assets¥ 35,701¥ 35,335$ 318,191

Notes and accounts receivable - trade

60,07557,606535,428

Merchandise and finished goods

28,60230,198254,920

64

43

570

Raw materials and supplies

7,778

8,266

69,323

Income taxes payable

3,288

4,576

29,305

Accounts receivable - other

2,379

4,726

21,203

Provision for bonuses

1,920

1,874

17,112

Short-term loans receivable

1,065

1,039

9,492

Deferred tax assets

2,708

2,968

24,135

Provision for directors’ bonuses

28

21

250

Other

2,221

2,030

19,795

Provision for environmental measures

−

350

−

(33)

(34)

(294)

Other

11,2599,765

100,348

140,564

142,181

1,252,799

Total current liabilities

57,66557,937513,948

Long-term loans payable

4,580

7,100

40,820

Deferred tax liabilities

2,649

3,095

23,610

Provision for business structure improvement

594

680

5,294

Cash and deposits

Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets

Notes and accounts payable - tradeNon-current liabilities

Property, plant and equipment
62,25359,662554,840

Accumulated depreciation and impairment loss

(38,428)(37,027)(342,496)

Buildings and structures, net

23,824

22,635

212,335

Machinery, equipment and vehicles

120,540

116,267

1,074,332

Provision for loss on business of subsidiaries and affiliates

309

309

2,754

(109,038)(107,181)(971,818)

Net defined benefit liability

101

102

900

11,502

9,086

102,51335,71733,828318,333

Other

2,141

2,020

19,082(30,880)(28,819)(275,223)

Total non-current liabilities

10,376

13,30792,478

4,837

5,008

43,111

68,041

71,244606,426

Land

9,198

9,195

81,979Leased assets

103

116

918

Net assets

Accumulated depreciation

(90)

(87)

(802)

Leased assets, net

12

28

107

Shareholders’ equity

Construction in progress

2,594

1,506

23,119

Capital stock

18,942

18,942

168,824

Total property, plant and equipment

51,96947,461

463,182

Capital surplus

13,611

13,611

121,310Retained earnings

126,370

115,878

1,126,292

Software

610

476

5,437

Treasury shares(7,587)(4,281)(67,620)

Other

966

426

8,610

Total intangible assets

1,577

903

14,055

Total Shareholders’ equity

151,337

144,151

1,348,815

Investment securities

32,46533,251

289,349

10,07910,51589,831

Deferred tax assets

125

99

1,114

Foreign currency translation adjustment

243

171

2,166

Net defined benefit asset

1,987

2,086

17,709Remeasurements of defined benefit plans

380

554

3,387

Other

3,156

2,354

28,128

(98)

(167)

(873)

Total Accumulated other comprehensive income

10,703

11,241

95,392

37,636

37,623

335,437

1,666

1,531

14,84891,18385,988812,683

Total net assets

163,707

156,924

1,459,064¥ 231,748¥ 228,169$ 2,065,490

Total liabilities and net assets¥ 231,748¥ 228,169$ 2,065,490

Buildings and structures

Accumulated depreciation and impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net

Intangible assets

Investments and other assets

Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

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

Nissan Chemical Industries, Ltd. Annual Report 2017

Total liabilities

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

Non-controlling interests

Nissan Chemical Industries, Ltd. Annual Report 201768

Consolidated Balance Sheets
For FY2016 and FY2015(Thousands of
U.S. dollars)(Millions of Yen)

Assets

FY2016FY2016FY2015

Liabilities

FY2016FY2015FY2016¥ 14,943¥ 15,350$ 133,182

Short-term loans payable

23,15522,938206,373

Current portion of long-term loans payable

3,070

3,060

27,362Current liabilities

Current assets¥ 35,701¥ 35,335$ 318,191

Notes and accounts receivable - trade

60,07557,606535,428

Merchandise and finished goods

28,60230,198254,920

64

43

570

Raw materials and supplies

7,778

8,266

69,323

Income taxes payable

3,288

4,576

29,305

Accounts receivable - other

2,379

4,726

21,203

Provision for bonuses

1,920

1,874

17,112

Short-term loans receivable

1,065

1,039

9,492

Deferred tax assets

2,708

2,968

24,135

Provision for directors’ bonuses

28

21

250

Other

2,221

2,030

19,795

Provision for environmental measures

−

350

−

(33)

(34)

(294)

Other

11,2599,765

100,348

140,564

142,181

1,252,799

Total current liabilities

57,66557,937513,948

Long-term loans payable

4,580

7,100

40,820

Deferred tax liabilities

2,649

3,095

23,610

Provision for business structure improvement

594

680

5,294

Cash and deposits

Work in process

Allowance for doubtful accounts
Total current assets
Non-current assets

Notes and accounts payable - tradeNon-current liabilities

Property, plant and equipment
62,25359,662554,840

Accumulated depreciation and impairment loss

(38,428)(37,027)(342,496)

Buildings and structures, net

23,824

22,635

212,335

Machinery, equipment and vehicles

120,540

116,267

1,074,332

Provision for loss on business of subsidiaries and affiliates

309

309

2,754

(109,038)(107,181)(971,818)

Net defined benefit liability

101

102

900

11,502

9,086

102,51335,71733,828318,333

Other

2,141

2,020

19,082(30,880)(28,819)(275,223)

Total non-current liabilities

10,376

13,30792,478

4,837

5,008

43,111

68,041

71,244606,426

Land

9,198

9,195

81,979Leased assets

103

116

918

Net assets

Accumulated depreciation

(90)

(87)

(802)

Leased assets, net

12

28

107

Shareholders’ equity

Construction in progress

2,594

1,506

23,119

Capital stock

18,942

18,942

168,824

Total property, plant and equipment

51,96947,461

463,182

Capital surplus

13,611

13,611

121,310Retained earnings

126,370

115,878

1,126,292

Software

610

476

5,437

Treasury shares(7,587)(4,281)(67,620)

Other

966

426

8,610

Total intangible assets

1,577

903

14,055

Total Shareholders’ equity

151,337

144,151

1,348,815

Investment securities

32,46533,251

289,349

10,07910,51589,831

Deferred tax assets

125

99

1,114

Foreign currency translation adjustment

243

171

2,166

Net defined benefit asset

1,987

2,086

17,709Remeasurements of defined benefit plans

380

554

3,387

Other

3,156

2,354

28,128

(98)

(167)

(873)

Total Accumulated other comprehensive income

10,703

11,241

95,392

37,636

37,623

335,437

1,666

1,531

14,84891,18385,988812,683

Total net assets

163,707

156,924

1,459,064¥ 231,748¥ 228,169$ 2,065,490

Total liabilities and net assets¥ 231,748¥ 228,169$ 2,065,490

Buildings and structures

Accumulated depreciation and impairment loss
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation and impairment loss
Tools, furniture and fixtures, net

Intangible assets

Investments and other assets

Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

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

Nissan Chemical Industries, Ltd. Annual Report 2017

Total liabilities

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

Non-controlling interests

Nissan Chemical Industries, Ltd. Annual Report 201768

Consolidated Statements of Income /Consolidated Statements of Comprehensive Income

Consolidated Statements of Changes in Net Assets
For FY2016

For FY2016 and FY2015(Millions of Yen)
Total shareholders’ equity

Consolidated Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Plant stop losses
Product compensation expenses
Impairment loss
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on business of subsidiaries and affiliates
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Millions of Yen)

69

Nissan Chemical Industries, Ltd. Annual Report 2017

Capital stock

Capital surplus Retained earnings Treasury shares

FY2016FY2015FY2016¥ 180,289
105,916
74,37242,93431,438¥ 176,894
106,146
70,74842,14228,606$ 1,606,854
943,993662,852
382,656
280,196

20
726
701
805
2,253

16
580
858
1,022
2,478

178
6,471
6,248
7,175
20,080Change in scope of consolidation

Disposal of treasury shares

0

156
601
274
−
220
314
411
1,978
31,713

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

1,390
5,357
2,442
−
1,961
2,799
3,663
17,629282,647

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

−
−

3,081
3,081

−
−

−
−
−
31,713
7,439
81
7,520
24,192166¥ 24,026

3,941
311
4,253
28,3607,955(2,151)
5,804
22,556206¥ 22,350−−−
282,647
66,301
722
67,023
215,6151,480$ 214,135

Consolidated Statements of Comprehensive Income
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of affiliates accounted for using equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attribute to)
Owners of parent
Non-controlling interests(Thousands of
U.S. dollars)(Thousands of
U.S. Dollars)(Millions of Yen)FY2016FY2015FY2016¥ 24,192¥ 22,556$ 215,615

(436)
188
(174)
1
(420)
23,771

(159)
(800)
(84)
(1)
(1,047)21,508(3,886)
1,676(1,551)9(3,743)211,863¥

23,584
186¥

21,380127$

Balance at beginning of current period¥ 18,942¥13,611¥ 115,878¥ (4,281)

Total
shareholders’equity¥ 144,151

Changes of items during period
Dividends of surplus(7,680)(7,680)Net income attributable to owners of parent

24,02624,026

(157)

(157)
(9,002)(9,002)00(5,695)

5,695

−

−

10,492(3,305)

7,186¥ 13,611¥ 126,370¥ (7,587)¥ 151,337

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

Total
net assets¥ 1,531¥ 156,924

Share repurchase

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

Accumulated other comprehensive income

Balance at beginning of current period¥ 10,515

¥ 171

¥ 554

¥ 11,241

Changes of items during period
Dividends of surplus(7,680)Net income attributable to owners of parent

24,026

Change in scope of consolidation(157)

Share repurchase(9,002)

Disposal of treasury shares

0Cancellation of treasury shares−

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

(435)

72

(174)

(537)

134

(403)

(435)

72

(174)

(537)

134

6,782

¥ 10,079

¥ 243

¥ 380

¥ 10,703¥ 1,666¥ 163,707

210,196
1,658

Nissan Chemical Industries, Ltd. Annual Report 201770

Consolidated Statements of Income /Consolidated Statements of Comprehensive Income

Consolidated Statements of Changes in Net Assets
For FY2016

For FY2016 and FY2015(Millions of Yen)
Total shareholders’ equity

Consolidated Statements of Income
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on disposal of non-current assets
Plant stop losses
Product compensation expenses
Impairment loss
Foreign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on business of subsidiaries and affiliates
Total extraordinary losses
Income before income taxes and non-controlling interests
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent(Millions of Yen)

69

Nissan Chemical Industries, Ltd. Annual Report 2017

Capital stock

Capital surplus Retained earnings Treasury shares

FY2016FY2015FY2016¥ 180,289
105,916
74,37242,93431,438¥ 176,894
106,146
70,74842,14228,606$ 1,606,854
943,993662,852
382,656
280,196

20
726
701
805
2,253

16
580
858
1,022
2,478

178
6,471
6,248
7,175
20,080Change in scope of consolidation

Disposal of treasury shares

0

156
601
274
−
220
314
411
1,978
31,713

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

1,390
5,357
2,442
−
1,961
2,799
3,663
17,629282,647

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

−
−

3,081
3,081

−
−

−
−
−
31,713
7,439
81
7,520
24,192166¥ 24,026

3,941
311
4,253
28,3607,955(2,151)
5,804
22,556206¥ 22,350−−−
282,647
66,301
722
67,023
215,6151,480$ 214,135

Consolidated Statements of Comprehensive Income
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of affiliates accounted for using equity method
Total other comprehensive income
Comprehensive income(Comprehensive income attribute to)
Owners of parent
Non-controlling interests(Thousands of
U.S. dollars)(Thousands of
U.S. Dollars)(Millions of Yen)FY2016FY2015FY2016¥ 24,192¥ 22,556$ 215,615

(436)
188
(174)
1
(420)
23,771

(159)
(800)
(84)
(1)
(1,047)21,508(3,886)
1,676(1,551)9(3,743)211,863¥

23,584
186¥

21,380127$

Balance at beginning of current period¥ 18,942¥13,611¥ 115,878¥ (4,281)

Total
shareholders’equity¥ 144,151

Changes of items during period
Dividends of surplus(7,680)(7,680)Net income attributable to owners of parent

24,02624,026

(157)

(157)
(9,002)(9,002)00(5,695)

5,695

−

−

10,492(3,305)

7,186¥ 13,611¥ 126,370¥ (7,587)¥ 151,337

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

Total
net assets¥ 1,531¥ 156,924

Share repurchase

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

Accumulated other comprehensive income

Balance at beginning of current period¥ 10,515

¥ 171

¥ 554

¥ 11,241

Changes of items during period
Dividends of surplus(7,680)Net income attributable to owners of parent

24,026

Change in scope of consolidation(157)

Share repurchase(9,002)

Disposal of treasury shares

0Cancellation of treasury shares−

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

(435)

72

(174)

(537)

134

(403)

(435)

72

(174)

(537)

134

6,782

¥ 10,079

¥ 243

¥ 380

¥ 10,703¥ 1,666¥ 163,707

210,196
1,658

Nissan Chemical Industries, Ltd. Annual Report 201770

Consolidated Statements of Changes in Net Assets
For FY2015

For FY2016(Millions of Yen)

(Thousands of U.S. dollars)

Total shareholders’ equity
Capital stock

Balance at beginning of current period¥ 18,942

Total shareholders’ equity

Capital surplus Retained earnings Treasury shares

Total
shareholders’equity¥ (584)¥ 137,572¥ 13,611¥ 105,602

Changes of items during period

Balance at beginning of current period

Capital surplus Retained earnings Treasury shares$ 168,824$ 121,310$ 1,032,781

Total
shareholders’equity$ (38,155) $ 1,284,768

Changes of items during period−

Dividends of surplus(6,269)(6,269)Dividends of surplus(68,449)(68,449)

Net income attributable to owners of parent

22,35022,350Net income attributable to owners of parent

214,135

214,135

(500)

(500)

Change in scope of consolidation(1,399)(1,399)(9,001)(9,001)

Share repurchase00

Disposal of treasury shares

0

5,304

−

Cancellation of treasury shares(0)−$ 168,824

Change in scope of consolidation
Share repurchase
Disposal of treasury shares

0Cancellation of treasury shares(0)(5,304)

Net changes of items other than shareholders’ equity

Balance at end of current period−−

10,276(3,696)

6,579¥ 18,942¥ 13,611¥ 115,878¥ (4,281)¥ 144,151

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

Accumulated other comprehensive income

Balance at beginning of current period(80,232)(80,232)00(50,758)

50,758−−93,512(29,456)

64,046$ 121,310$ 1,126,292

Net changes of items other than shareholders’ equity

Total changes of items during period

Non-controllinginterests

Total
net assets¥ 12,210¥ 1,481¥ 151,263¥ 10,676

¥ 894

¥ 639

$ (67,620) $ 1,348,815

Accumulated other comprehensive income

Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeTotal
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeBalance at beginning of current period$ 93,717$ 1,524$ 4,938$ 100,187

Non-controllinginterests

Total
net assets$ 13,645 $ 1,398,610

Changes of items during period

Changes of items during period
Dividends of surplus(6,269)Dividends of surplus(68,449)

Net income attributable to owners of parent

22,350Net income attributable to owners of parent

214,135

Change in scope of consolidation(500)

Change in scope of consolidation(1,399)

Share repurchase(9,001)

Share repurchase(80,232)

Disposal of treasury shares

0

Disposal of treasury shares

0Cancellation of treasury shares−

Cancellation of treasury shares−

Net changes of items other than shareholders’ equity

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

71

Capital stock

Nissan Chemical Industries, Ltd. Annual Report 2017

(161)

(722)

(84)

(969)

50

(918)

(161)

(722)

(84)

(969)

50

5,660

¥ 10,515

¥ 171

¥ 554

¥ 11,241¥ 1,531¥ 156,924

Total changes of items during period
Balance at end of current period(3,877)642(1,551)(4,786)

1,194(3,592)(3,877)642(1,551)(4,786)

1,194

60,446$ 89,831$ 2,166$ 3,387$ 95,392$ 14,848 $ 1,459,064

Nissan Chemical Industries, Ltd. Annual Report 201772

Consolidated Statements of Changes in Net Assets
For FY2015

For FY2016(Millions of Yen)

(Thousands of U.S. dollars)

Total shareholders’ equity
Capital stock

Balance at beginning of current period¥ 18,942

Total shareholders’ equity

Capital surplus Retained earnings Treasury shares

Total
shareholders’equity¥ (584)¥ 137,572¥ 13,611¥ 105,602

Changes of items during period

Balance at beginning of current period

Capital surplus Retained earnings Treasury shares$ 168,824$ 121,310$ 1,032,781

Total
shareholders’equity$ (38,155) $ 1,284,768

Changes of items during period−

Dividends of surplus(6,269)(6,269)Dividends of surplus(68,449)(68,449)

Net income attributable to owners of parent

22,35022,350Net income attributable to owners of parent

214,135

214,135

(500)

(500)

Change in scope of consolidation(1,399)(1,399)(9,001)(9,001)

Share repurchase00

Disposal of treasury shares

0

5,304

−

Cancellation of treasury shares(0)−$ 168,824

Change in scope of consolidation
Share repurchase
Disposal of treasury shares

0Cancellation of treasury shares(0)(5,304)

Net changes of items other than shareholders’ equity

Balance at end of current period−−

10,276(3,696)

6,579¥ 18,942¥ 13,611¥ 115,878¥ (4,281)¥ 144,151

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

Accumulated other comprehensive income

Balance at beginning of current period(80,232)(80,232)00(50,758)

50,758−−93,512(29,456)

64,046$ 121,310$ 1,126,292

Net changes of items other than shareholders’ equity

Total changes of items during period

Non-controllinginterests

Total
net assets¥ 12,210¥ 1,481¥ 151,263¥ 10,676

¥ 894

¥ 639

$ (67,620) $ 1,348,815

Accumulated other comprehensive income

Total
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeTotal
Valuation
accumulateddifference on Foreign currency Remeasurements
otheravailable-for-saletranslationof defined benefit comprehensive
securities
adjustment
plansincomeBalance at beginning of current period$ 93,717$ 1,524$ 4,938$ 100,187

Non-controllinginterests

Total
net assets$ 13,645 $ 1,398,610

Changes of items during period

Changes of items during period
Dividends of surplus(6,269)Dividends of surplus(68,449)

Net income attributable to owners of parent

22,350Net income attributable to owners of parent

214,135

Change in scope of consolidation(500)

Change in scope of consolidation(1,399)

Share repurchase(9,001)

Share repurchase(80,232)

Disposal of treasury shares

0

Disposal of treasury shares

0Cancellation of treasury shares−

Cancellation of treasury shares−

Net changes of items other than shareholders’ equity

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

71

Capital stock

Nissan Chemical Industries, Ltd. Annual Report 2017

(161)

(722)

(84)

(969)

50

(918)

(161)

(722)

(84)

(969)

50

5,660

¥ 10,515

¥ 171

¥ 554

¥ 11,241¥ 1,531¥ 156,924

Total changes of items during period
Balance at end of current period(3,877)642(1,551)(4,786)

1,194(3,592)(3,877)642(1,551)(4,786)

1,194

60,446$ 89,831$ 2,166$ 3,387$ 95,392$ 14,848 $ 1,459,064

Nissan Chemical Industries, Ltd. Annual Report 201772

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

For FY2016 and FY2015(Thousands of
U.S. dollars)(Millions of Yen)FY2016FY2015FY2016¥ 31,713¥ 28,360$ 282,647

Depreciation

8,889

9,684

79,225

Impairment loss

220

3,941

1,961

Interest and dividend income

(746)

(597)

(6,649)Interest expenses

156

194

1,390

Increase (decrease) in provision for business structure improvement

(86)

(23)

(766)

Increase (decrease) in provision for loss on business of subsidiaries and affiliates

−

309

−

Loss (gain) on sales of investment securities−(3,081)−

Cash flows from operating activities
Income before income taxes and non-controlling interests

601

319

5,357

Decrease (increase) in notes and accounts receivable-trade(2,573)

143(22,932)

Decrease (increase) in inventories

2,054(2,716)18,307

Increase (decrease) in notes and accounts payable-trade

(334)

352

(2,977)

Other

(474)

(514)

(4,225)

Subtotal

39,41936,372

351,328

Interest and dividend income received

2,175

1,177

19,385

Loss (gain) on disposal of non-current assets

Interest expenses paid

(156)

(194)

(1,390)

Income taxes paid

(8,947)(7,366)(79,742)

Net cash provided by (used in) operating activities

32,491

29,989289,581

(787)

(331)

(7,014)

Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities

2,988

2,206

26,631

Purchase of property, plant and equipment(12,394)(9,071)(110,463)

Payments for retirement of property, plant and equipment

(477)

(262)

(4,251)

Purchase of intangible assets(1,091)(383)(9,724)

Net decrease (increase) in short-term loans receivable

(12)

(216)

(107)

Purchase of long-term prepaid expenses

(834)

(844)

(7,433)

Other

(542)

485

(4,831)(13,152)(8,416)(117,219)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

220

54

1,961

Proceeds from long-term loans payable

550

1,100

4,902

Repayments of long-term loans payable(3,060)(3,090)(27,273)

Cash dividends paid

(7,680)(6,269)(68,449)

(52)

(70)

(463)

(9,002)(9,001)(80,232)

(17)

(40)

(152)
(169,715)

Dividends paid to non-controlling interests
Share repurchase
Other(19,042)(17,317)

Effect of exchange rate change on cash and cash equivalents

94

(324)

838

Net increase (decrease) in cash and cash equivalents

390

3,931

3,476

Net cash provided by (used in) financing activities

35,33531,343314,929

Increase in cash and cash equivalents from newly consolidated subsidiary

−

61

−

Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation

(25)

−

(223)

¥ 35,701¥ 35,335$ 318,191

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

73

Nissan Chemical Industries, Ltd. Annual Report 2017

1. Basis for presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act, the related accounting regulations, and theaccounting principles generally accepted in Japan (“J-GAAP”), which
differ in certain aspects from the application and disclosure requirementsof the accounting principles generally accepted in the United States ofAmerica (“US-GAAP”) and International Financial Reporting Standards(“IFRS”).
In preparing these consolidated financial statements, certain reclassification and rearrangements have been made to the consolidated financial
statements issued in Japan in order to present them in a form that is morefamiliar to readers in other countries.
2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2017 include theaccount of Nissan Chemical Industries, Ltd. (the “Company”) and its eightmain (ten in FY2015) subsidiaries (together, the “Companies”). The
Company does not consolidate other subsidiaries due to their immateriality
in terms of consolidated total assets, net sales, net income, and retained
earnings.
Under the control or influence concept, those companies in which theCompany, either directly or indirectly, is able to exercise control over
operations are fully consolidated. Those companies over which theCompany has the ability to exercise significant influence are accounted forby the equity method.
Investments in two affiliated companies (two in FY2015) are accounted
for by the equity method.
The assets and liabilities of the newly consolidated subsidiaries arestated at fair value as of the respective dates on which they were acquired.
All significant inter-company balances and transactions have been
eliminated in consolidation.
All material unrealized profits included in assets resulting from transactions within the Companies are eliminated.
b. Securities
The Company’s marketable securities are reported at fair value. Unrealized
holding gains and losses, net of the related tax effect, on marketablesecurities are excluded from earnings. Instead, they are reported as aseparate component of other comprehensive income until realized.
Realized gains and losses for securities are included in earnings,
and are derived using the moving average method for determining the costof securities sold.
Non-marketable securities in companies over which the Company isincapable of exercising significant influence are stated at cost andreviewed periodically for impairment.

d. Property, Plant and Equipment (excluding Leased Assets)
Property, plant and equipment are stated at cost. In general, the depreciation of property, plant and equipment is computed by the declining-balancemethod over the estimated useful lives of these assets.
The estimated useful life ranges are two years to fifty years for buildings
and structures, and two years to twelve years for machinery andequipment.
e. Goodwill and other Intangible Assets
Goodwill is amortized by the straight-line method within 20 years. Other
intangible assets are also amortized the using straight-line method. The
most typical intangible asset is Software, and its useful life is five years.
f. Leased Assets
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value of zeroby the straight-line method, using the contract term as the useful life.
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is the Company’s best estimate forthe amount of probable credit losses in the Company’s existing tradereceivables.
An additional reserve for individual receivable is recorded when the
Company becomes aware of a customer’s inability to meet its financial
obligations, such as when a customer files for bankruptcy or when the its
operating results or financial position deteriorates.
If the customer’s circumstances change, estimates of the recoverabilityof receivables are further adjusted.
h. Provision for Bonuses
The Company provides accrued bonuses for employees based on theestimated amounts to be paid for the fiscal year.
i. Provision for Director’s Bonuses
The Company provides accrued bonuses for members of the Board of
Directors based on the estimated amounts to be paid for the fiscal year.
j. Provision for Business Structure Improvement
The Company provides a reserve at the estimated amount to cover the
expenses and losses to be incurred in association with structural
improvement.
k. Provision for Loss on Business of Subsidiaries and Affiliates
The Company provides a reserve at the estimated amount to cover thelosses on business of subsidiaries and affiliates in consideration of theirfinancial position.

c. Inventories
Inventories are stated at the lower of cost or net realizable value. The costis determined by the average method.

Nissan Chemical Industries, Ltd. Annual Report 201774

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

For FY2016 and FY2015(Thousands of
U.S. dollars)(Millions of Yen)FY2016FY2015FY2016¥ 31,713¥ 28,360$ 282,647

Depreciation

8,889

9,684

79,225

Impairment loss

220

3,941

1,961

Interest and dividend income

(746)

(597)

(6,649)Interest expenses

156

194

1,390

Increase (decrease) in provision for business structure improvement

(86)

(23)

(766)

Increase (decrease) in provision for loss on business of subsidiaries and affiliates

−

309

−

Loss (gain) on sales of investment securities−(3,081)−

Cash flows from operating activities
Income before income taxes and non-controlling interests

601

319

5,357

Decrease (increase) in notes and accounts receivable-trade(2,573)

143(22,932)

Decrease (increase) in inventories

2,054(2,716)18,307

Increase (decrease) in notes and accounts payable-trade

(334)

352

(2,977)

Other

(474)

(514)

(4,225)

Subtotal

39,41936,372

351,328

Interest and dividend income received

2,175

1,177

19,385

Loss (gain) on disposal of non-current assets

Interest expenses paid

(156)

(194)

(1,390)

Income taxes paid

(8,947)(7,366)(79,742)

Net cash provided by (used in) operating activities

32,491

29,989289,581

(787)

(331)

(7,014)

Cash flows from investing activities
Purchase of investment securities
Proceeds from sales of investment securities

2,988

2,206

26,631

Purchase of property, plant and equipment(12,394)(9,071)(110,463)

Payments for retirement of property, plant and equipment

(477)

(262)

(4,251)

Purchase of intangible assets(1,091)(383)(9,724)

Net decrease (increase) in short-term loans receivable

(12)

(216)

(107)

Purchase of long-term prepaid expenses

(834)

(844)

(7,433)

Other

(542)

485

(4,831)(13,152)(8,416)(117,219)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

220

54

1,961

Proceeds from long-term loans payable

550

1,100

4,902

Repayments of long-term loans payable(3,060)(3,090)(27,273)

Cash dividends paid

(7,680)(6,269)(68,449)

(52)

(70)

(463)

(9,002)(9,001)(80,232)

(17)

(40)

(152)
(169,715)

Dividends paid to non-controlling interests
Share repurchase
Other(19,042)(17,317)

Effect of exchange rate change on cash and cash equivalents

94

(324)

838

Net increase (decrease) in cash and cash equivalents

390

3,931

3,476

Net cash provided by (used in) financing activities

35,33531,343314,929

Increase in cash and cash equivalents from newly consolidated subsidiary

−

61

−

Decrease in cash and cash equivalents resulting from exclusion of subsidiaries from consolidation

(25)

−

(223)

¥ 35,701¥ 35,335$ 318,191

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

73

Nissan Chemical Industries, Ltd. Annual Report 2017

1. Basis for presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been preparedin accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act, the related accounting regulations, and theaccounting principles generally accepted in Japan (“J-GAAP”), which
differ in certain aspects from the application and disclosure requirementsof the accounting principles generally accepted in the United States ofAmerica (“US-GAAP”) and International Financial Reporting Standards(“IFRS”).
In preparing these consolidated financial statements, certain reclassification and rearrangements have been made to the consolidated financial
statements issued in Japan in order to present them in a form that is morefamiliar to readers in other countries.
2. Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2017 include theaccount of Nissan Chemical Industries, Ltd. (the “Company”) and its eightmain (ten in FY2015) subsidiaries (together, the “Companies”). The
Company does not consolidate other subsidiaries due to their immateriality
in terms of consolidated total assets, net sales, net income, and retained
earnings.
Under the control or influence concept, those companies in which theCompany, either directly or indirectly, is able to exercise control over
operations are fully consolidated. Those companies over which theCompany has the ability to exercise significant influence are accounted forby the equity method.
Investments in two affiliated companies (two in FY2015) are accounted
for by the equity method.
The assets and liabilities of the newly consolidated subsidiaries arestated at fair value as of the respective dates on which they were acquired.
All significant inter-company balances and transactions have been
eliminated in consolidation.
All material unrealized profits included in assets resulting from transactions within the Companies are eliminated.
b. Securities
The Company’s marketable securities are reported at fair value. Unrealized
holding gains and losses, net of the related tax effect, on marketablesecurities are excluded from earnings. Instead, they are reported as aseparate component of other comprehensive income until realized.
Realized gains and losses for securities are included in earnings,
and are derived using the moving average method for determining the costof securities sold.
Non-marketable securities in companies over which the Company isincapable of exercising significant influence are stated at cost andreviewed periodically for impairment.

d. Property, Plant and Equipment (excluding Leased Assets)
Property, plant and equipment are stated at cost. In general, the depreciation of property, plant and equipment is computed by the declining-balancemethod over the estimated useful lives of these assets.
The estimated useful life ranges are two years to fifty years for buildings
and structures, and two years to twelve years for machinery andequipment.
e. Goodwill and other Intangible Assets
Goodwill is amortized by the straight-line method within 20 years. Other
intangible assets are also amortized the using straight-line method. The
most typical intangible asset is Software, and its useful life is five years.
f. Leased Assets
Leased assets arising from finance lease transactions which do nottransfer ownership to the lessee are depreciated to a residual value of zeroby the straight-line method, using the contract term as the useful life.
g. Allowance for Doubtful Accounts
The allowance for doubtful accounts is the Company’s best estimate forthe amount of probable credit losses in the Company’s existing tradereceivables.
An additional reserve for individual receivable is recorded when the
Company becomes aware of a customer’s inability to meet its financial
obligations, such as when a customer files for bankruptcy or when the its
operating results or financial position deteriorates.
If the customer’s circumstances change, estimates of the recoverabilityof receivables are further adjusted.
h. Provision for Bonuses
The Company provides accrued bonuses for employees based on theestimated amounts to be paid for the fiscal year.
i. Provision for Director’s Bonuses
The Company provides accrued bonuses for members of the Board of
Directors based on the estimated amounts to be paid for the fiscal year.
j. Provision for Business Structure Improvement
The Company provides a reserve at the estimated amount to cover the
expenses and losses to be incurred in association with structural
improvement.
k. Provision for Loss on Business of Subsidiaries and Affiliates
The Company provides a reserve at the estimated amount to cover thelosses on business of subsidiaries and affiliates in consideration of theirfinancial position.

c. Inventories
Inventories are stated at the lower of cost or net realizable value. The costis determined by the average method.

Nissan Chemical Industries, Ltd. Annual Report 201774

l. Provision for Retirement Benefits
The Company has a defined benefit plan and a retirement plan that
substantially covers all of its employees.
The method for calculating the estimated amount of all retirement benefits
to be paid at future retirement dates is based on the benefit formula.
Actuarial gains and losses are primarily amortized using the decliningbalance method over the average of the estimated remaining service years(16 years) commencing from the period which the gains and losses occurred.
Certain consolidated subsidiaries use a simplified method for calculating
retirement benefits.
In this method, the retirement benefit obligation is the same amount as
the necessary payment related to retirement benefits.
m. Translation of Foreign Currency
The assets and liabilities of the Company’s subsidiaries located outside
Japan are translated into Japanese yen at the exchange rate in effect on
the balance sheet date. Revenue and expense items are translated at theprevailing average exchange rates for the year. Gains and losses resulting
from foreign currency transactions are included in other income(deductions), and those resulting from the translation of financial
statements are excluded from the statements of income. Instead, they are
accumulated in net assets as a component of accumulated othercomprehensive income (loss).
n. Derivatives and Hedge Accounting
The Company enters into interest rate swap contracts to hedge the risk ofchanges in interest rates over borrowings.
Derivatives are carried at fair value with all changes in unrealized gains
and losses charged to income, except for those which meet the criteria fordeferral hedge accounting under which unrealized gains or losses, net ofthe applicable income taxes, are reported as components of accumulated
other comprehensive income (loss).
If interest rates swap contracts meet certain criteria, the net amount to be
paid or received under the interest rate swap contract is added to or
deducted from the interest on the assets or liabilities for which the swap
contract is executed.
o. Cash and Cash Equivalent
The Companies consider cash equivalents, include all highly fluid
investments, to have been purchased with original maturities of threemonths or less.

75

Nissan Chemical Industries, Ltd. Annual Report 2017

3. U.S. dollar Amounts
The accompanying consolidated financial statements are expressed inJapanese yen as of and for the year ended March 31, 2017 after being
converted from the currency of the country in which the Company operates.
The translation of Japanese yen amounts to United States dollar amounts is
included solely for the convenience of the readers outside Japan, and has
been made at the rate of ¥112.20 to US $1, which is the approximate
closing exchange rate reported by the Tokyo Foreign Exchange Market on
March 31, 2017. This translation should not be construed to indicate that theJapanese yen amounts shown can be converted to United States dollars at
the above rate.
4. Change in Accounting Policy
Effective from the beginning of the current consolidated fiscal year, theCompany adopted the “Practical Solution on a change in depreciation
method due to Tax Reform 2016” (Practical Issue Task Force (PITF) No.32,
issued on June 17, 2016) in accordance with the revision of the Corporation Tax Law of Japan.
Accordingly, the Company changed the depreciation method for facilities
attached to buildings and structures acquired on and after April 1, 2016
from the declining-balance method to the straight-line method.
The impact of this change on operating income, ordinary income, andincome before income taxes and non-controlling interests for the current
consolidated fiscal year was immaterial.
5. Reclassifications
Effective from the beginning of the current consolidated fiscal year, “Gain on
sales of non-current assets”, which were displayed separately in“Non-operating income” in the previous fiscal year, are now included in“Other” since the amount was lower than 10% of “Non-operating income”.
In order to reflect the change, the Company has reclassified the consolidated financial statement for the previous fiscal year.
As a result, 274 million yen of “Gain on sales of non-current assets” and748 million yen of “Other”, which were shown in “Non-operating income”
in the previous consolidated statements of income, are reclassified as 1,022
million yen of “Other”.
Effective from the beginning of the current consolidated fiscal year,“Purchase of intangible assets” and “Purchase of long-term prepaid
expenses”, which were included in “Other” of “Cash flows from investing
activities” in the previous fiscal year, are displayed separately to improve thelevel of clarity.
In order to reflect the change, the Company has reclassified the consolidated financial statement for the previous fiscal year.
As a result, (742) million yen of “Other” in the previous consolidated
statements of cash flows are reclassified as (383) million yen of “Purchaseof intangible assets”, (844) million yen of “Purchase of long-term prepaid
expenses” and 485 million yen of “Other”.

6. Collateral Assets and Liabilities
Collateral assets and liabilities as of FY2016 and FY2015 were as follows:

FY2015¥ 97

Investment securities¥ 180

FY2016FY2016(Thousands of
U.S. dollars)(Millions of Yen)

(Thousands of
U.S. dollars)(Millions of Yen)FY2016

9. Comprehensive Income

FY2016FY2015

Valuation difference on available-for-sale securities:$ 865$ (5,187)¥ (582)¥ 2,426

Reclassification adjustment(47)(3,048)(419)

Gains (losses) arising during the year

Accounts payable

¥ 253

¥ 270

$ 2,255

Amount before tax effect

(629)

(621)

(5,606)

Accrued expenses

¥

¥ −

$

Tax effect

192

461

1,711

(436)

(159)

(3,886)

1,676

0

0

Valuation difference on available-for-sale

7. Research and Development Expenses
Research and development expenses included in selling, general andadministrative expenses for FY2016 and FY2015 were as follows:(Millions of Yen)FY2016¥ 16,078

FY2015¥ 15,778(Thousands of
U.S. dollars)
FY2016$ 143,298

8. Impairment Losses
The Company recognized impairment losses on the following asset groupfor FY2015.
(Millions of Yen)
Location

Use

Type

AmountGermany

Three-dimensional
packaging material market

Goodwill andPatent¥ 3,941

In general, the Companies define division as the basis of grouping. In thecase of consolidated subsidiaries, the Company is also defined as thebasis of grouping in terms of its scale. In regards to intangible assets, wedeem each asset to be one group. The book value of goodwill and patent ofThin Materials GmbH (consolidate subsidiary for FY2015) is reduced to arecoverable amount, and is recognized as an impairment loss on an
extraordinary loss. The Companies measure the recoverable amount of thisasset group by value in use. It is calculated by discounting the future cash
flow at 11%.

securities, net of tax

Foreign currency translation adjustment
Gains (losses) arising during the year

188

(758)

Reclassification adjustment

−

−

−

Amount before tax effect

188

(758)

1,676

Tax effect

−

(42)

−

188

(800)

1,676

(1,283)Foreign currency translation adjustment,
net of tax

Remeasurements of defined benefit plans:
Gains (losses) arising during the year

(144)

2

Reclassification adjustment

(107)

(148)

(954)

Amount before tax effect

(252)

(146)

(2,246)

77

61

686

(174)

(84)

(1,551)

Tax effectRemeasurements of defined benefit plans,
net of tax

Share of other comprehensive income of affiliates accounted for using equity methods
Gains (losses) arising during the year
Total other comprehensive income

1

(1)

9

¥ (420)¥ (1,047)$ (3,743)

10. Common Shares(1) Dividends
Cash dividends charged to retained earnings for the years ended March
31, 2017 and 2016 represent the dividends paid out during those years.
The accompanying consolidated financial statements do not include any
provisions for a dividend approved by the Annual Shareholders Meeting of
28 yen per share with an aggregate 4,249 million yen for the year ended
March 31, 2017.
(2) Retained Earnings
Retained earnings on a consolidated basis consist of legal reserve andretained earnings. In accordance with provisions of the Companies Act ofJapan, the Company has provided a legal reserve as an appropriation ofretained earnings. The Code states that while neither legal capital surplus nor
legal retained earnings are available for dividends, both may be used to reduceor eliminate a deficit by a resolution of the shareholders’ meeting, or may betransferred to stated capital common stock by a resolution of the Board of
Directors. Legal reserve in the accompanying consolidated financial statement
includes only that of the Company. Retained earnings of the Company and its
consolidated subsidiaries include a certain special reserve for the purpose ofobtaining tax benefits in accordance with the Special Taxation Law of Japan.

Nissan Chemical Industries, Ltd. Annual Report 201776

l. Provision for Retirement Benefits
The Company has a defined benefit plan and a retirement plan that
substantially covers all of its employees.
The method for calculating the estimated amount of all retirement benefits
to be paid at future retirement dates is based on the benefit formula.
Actuarial gains and losses are primarily amortized using the decliningbalance method over the average of the estimated remaining service years(16 years) commencing from the period which the gains and losses occurred.
Certain consolidated subsidiaries use a simplified method for calculating
retirement benefits.
In this method, the retirement benefit obligation is the same amount as
the necessary payment related to retirement benefits.
m. Translation of Foreign Currency
The assets and liabilities of the Company’s subsidiaries located outside
Japan are translated into Japanese yen at the exchange rate in effect on
the balance sheet date. Revenue and expense items are translated at theprevailing average exchange rates for the year. Gains and losses resulting
from foreign currency transactions are included in other income(deductions), and those resulting from the translation of financial
statements are excluded from the statements of income. Instead, they are
accumulated in net assets as a component of accumulated othercomprehensive income (loss).
n. Derivatives and Hedge Accounting
The Company enters into interest rate swap contracts to hedge the risk ofchanges in interest rates over borrowings.
Derivatives are carried at fair value with all changes in unrealized gains
and losses charged to income, except for those which meet the criteria fordeferral hedge accounting under which unrealized gains or losses, net ofthe applicable income taxes, are reported as components of accumulated
other comprehensive income (loss).
If interest rates swap contracts meet certain criteria, the net amount to be
paid or received under the interest rate swap contract is added to or
deducted from the interest on the assets or liabilities for which the swap
contract is executed.
o. Cash and Cash Equivalent
The Companies consider cash equivalents, include all highly fluid
investments, to have been purchased with original maturities of threemonths or less.

75

Nissan Chemical Industries, Ltd. Annual Report 2017

3. U.S. dollar Amounts
The accompanying consolidated financial statements are expressed inJapanese yen as of and for the year ended March 31, 2017 after being
converted from the currency of the country in which the Company operates.
The translation of Japanese yen amounts to United States dollar amounts is
included solely for the convenience of the readers outside Japan, and has
been made at the rate of ¥112.20 to US $1, which is the approximate
closing exchange rate reported by the Tokyo Foreign Exchange Market on
March 31, 2017. This translation should not be construed to indicate that theJapanese yen amounts shown can be converted to United States dollars at
the above rate.
4. Change in Accounting Policy
Effective from the beginning of the current consolidated fiscal year, theCompany adopted the “Practical Solution on a change in depreciation
method due to Tax Reform 2016” (Practical Issue Task Force (PITF) No.32,
issued on June 17, 2016) in accordance with the revision of the Corporation Tax Law of Japan.
Accordingly, the Company changed the depreciation method for facilities
attached to buildings and structures acquired on and after April 1, 2016
from the declining-balance method to the straight-line method.
The impact of this change on operating income, ordinary income, andincome before income taxes and non-controlling interests for the current
consolidated fiscal year was immaterial.
5. Reclassifications
Effective from the beginning of the current consolidated fiscal year, “Gain on
sales of non-current assets”, which were displayed separately in“Non-operating income” in the previous fiscal year, are now included in“Other” since the amount was lower than 10% of “Non-operating income”.
In order to reflect the change, the Company has reclassified the consolidated financial statement for the previous fiscal year.
As a result, 274 million yen of “Gain on sales of non-current assets” and748 million yen of “Other”, which were shown in “Non-operating income”
in the previous consolidated statements of income, are reclassified as 1,022
million yen of “Other”.
Effective from the beginning of the current consolidated fiscal year,“Purchase of intangible assets” and “Purchase of long-term prepaid
expenses”, which were included in “Other” of “Cash flows from investing
activities” in the previous fiscal year, are displayed separately to improve thelevel of clarity.
In order to reflect the change, the Company has reclassified the consolidated financial statement for the previous fiscal year.
As a result, (742) million yen of “Other” in the previous consolidated
statements of cash flows are reclassified as (383) million yen of “Purchaseof intangible assets”, (844) million yen of “Purchase of long-term prepaid
expenses” and 485 million yen of “Other”.

6. Collateral Assets and Liabilities
Collateral assets and liabilities as of FY2016 and FY2015 were as follows:

FY2015¥ 97

Investment securities¥ 180

FY2016FY2016(Thousands of
U.S. dollars)(Millions of Yen)

(Thousands of
U.S. dollars)(Millions of Yen)FY2016

9. Comprehensive Income

FY2016FY2015

Valuation difference on available-for-sale securities:$ 865$ (5,187)¥ (582)¥ 2,426

Reclassification adjustment(47)(3,048)(419)

Gains (losses) arising during the year

Accounts payable

¥ 253

¥ 270

$ 2,255

Amount before tax effect

(629)

(621)

(5,606)

Accrued expenses

¥

¥ −

$

Tax effect

192

461

1,711

(436)

(159)

(3,886)

1,676

0

0

Valuation difference on available-for-sale

7. Research and Development Expenses
Research and development expenses included in selling, general andadministrative expenses for FY2016 and FY2015 were as follows:(Millions of Yen)FY2016¥ 16,078

FY2015¥ 15,778(Thousands of
U.S. dollars)
FY2016$ 143,298

8. Impairment Losses
The Company recognized impairment losses on the following asset groupfor FY2015.
(Millions of Yen)
Location

Use

Type

AmountGermany

Three-dimensional
packaging material market

Goodwill andPatent¥ 3,941

In general, the Companies define division as the basis of grouping. In thecase of consolidated subsidiaries, the Company is also defined as thebasis of grouping in terms of its scale. In regards to intangible assets, wedeem each asset to be one group. The book value of goodwill and patent ofThin Materials GmbH (consolidate subsidiary for FY2015) is reduced to arecoverable amount, and is recognized as an impairment loss on an
extraordinary loss. The Companies measure the recoverable amount of thisasset group by value in use. It is calculated by discounting the future cash
flow at 11%.

securities, net of tax

Foreign currency translation adjustment
Gains (losses) arising during the year

188

(758)

Reclassification adjustment

−

−

−

Amount before tax effect

188

(758)

1,676

Tax effect

−

(42)

−

188

(800)

1,676

(1,283)Foreign currency translation adjustment,
net of tax

Remeasurements of defined benefit plans:
Gains (losses) arising during the year

(144)

2

Reclassification adjustment

(107)

(148)

(954)

Amount before tax effect

(252)

(146)

(2,246)

77

61

686

(174)

(84)

(1,551)

Tax effectRemeasurements of defined benefit plans,
net of tax

Share of other comprehensive income of affiliates accounted for using equity methods
Gains (losses) arising during the year
Total other comprehensive income

1

(1)

9

¥ (420)¥ (1,047)$ (3,743)

10. Common Shares(1) Dividends
Cash dividends charged to retained earnings for the years ended March
31, 2017 and 2016 represent the dividends paid out during those years.
The accompanying consolidated financial statements do not include any
provisions for a dividend approved by the Annual Shareholders Meeting of
28 yen per share with an aggregate 4,249 million yen for the year ended
March 31, 2017.
(2) Retained Earnings
Retained earnings on a consolidated basis consist of legal reserve andretained earnings. In accordance with provisions of the Companies Act ofJapan, the Company has provided a legal reserve as an appropriation ofretained earnings. The Code states that while neither legal capital surplus nor
legal retained earnings are available for dividends, both may be used to reduceor eliminate a deficit by a resolution of the shareholders’ meeting, or may betransferred to stated capital common stock by a resolution of the Board of
Directors. Legal reserve in the accompanying consolidated financial statement
includes only that of the Company. Retained earnings of the Company and its
consolidated subsidiaries include a certain special reserve for the purpose ofobtaining tax benefits in accordance with the Special Taxation Law of Japan.

Nissan Chemical Industries, Ltd. Annual Report 201776

11. Investment Securities(Thousands of
U.S. dollars)(Millions of Yen)FY2016FY2016FY2015¥ 24,031¥ 24,559$ 214,180

Unlisted securities of affiliates

6,636

7,244

59,144

Unlisted securities

1,797

1,447

16,016¥ 32,465¥ 33,251$ 289,349

Equity securities

12. Short-term Debt and Long-term Debt
Short-term debt consisting of an unsecured bank overdraft as of March 31,2017 was 23,155 million yen.
The weighted average interest rate on short-term debt outstanding as ofMarch 31, 2017 was 0.5%.
The weighted average interest rate on long-term debt outstanding as ofMarch 31, 2017 was 0.85%.
The weighted average interest rate on the current portion of long-term
debt outstanding as of March 31, 2017 was 0.92%.
Long-term debt as of FY2016 and FY2015 were as follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2016FY2016FY2015Long-term debt

¥ 7,650¥ 10,160$ 68,182

Less current portion(3,070)(3,060)(27,362)¥ 4,580¥ 7,100$ 40,820

Long-term debt payments due after FY2016 were as follows:(Millions of Yen)

(Thousands of
U.S. dollars)

FY2017¥ 2,470$ 22,014

FY20181,670

14,884FY2019330

2,941

FY2020 and thereafter

110

980

¥ 4,580$ 40,820

Year ending March 31

13. Retirement Benefits(1) The liability for retirement benefits as of FY2016 and FY2015 were as
follows:

Retirement benefit obligation
Plan asset

2.0%

2.0%

3.6 to 9.0%

3.6 to 9.0%

Expected rate of salary increase (forecast)(Note) Expected rate of salary increase is calculated based on our point system.

14. Income Taxes
The Company is subject to a number of taxes based on income. The
statutory income tax rates were approximately 30.86% for the year ended
March 31, 2017 and 33.06% for the year ended March 31, 2016.
The tax effects of significant temporary differences which resulted indeferred tax assets and liabilities as of FY2016 and FY2015 were as
follows:

FY2016

Deferred tax assets:
The tax effect of investment on
subsidiary to be liquidated
Inventory
Provision for bonus
Unrealized profit of non-current assets
Loss on valuation of securities
Other
Gross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Net defined benefit asset
Reserve for advanced
depreciation of non-current assets
Other
Total deferred tax liabilities
Net deferred tax assets¥ 1,124$ 10,018

754
575
394
356
2,554
5,759
(41)
5,717

6,649
5,250
4,082
3,565
20,82950,410(437)
49,964(4,477)(596)(4,751)(631)(39,902)(5,312)

(276)

(285)

(2,460)(72)(5,422)¥ 184(76)(5,745)¥ (27)(642)(48,324)$ 1,640

The differences between the statutory tax rate and the effective tax rate forthe years ended FY2016 and FY2015 were as follows:
FY201633.06%

2.69%

2.45%

0.46

0.59

Difference of tax rate for foreign consolidated subsidiaries(0.65)(0.60)

Equity in earnings of affiliates(0.68)(1.00)(2.80)(2.55)Tax credit(6.20)(7.74)

Other, net

0.04(3.74)

Effective tax rate

23.72%

20.47%(Reconciliation)(14,018)

Elimination of intercompany dividend income(1,987)(2,056)(17,709)

Entertainment and other permanently non-deductible

101

72

900
(16,800)900

Net defined benefit asset(1,987)(2,086)(17,709)¥ (1,885)¥ (1,983)$ (16,800)

FY201530.86%(124,938)

102

FY2016

746
589
458
400
2,337
5,656
(49)
5,606

$ 107,228

Nissan Chemical Industries, Ltd. Annual Report 2017

FY2015¥ 1,124(14,055)(1,983)(Thousands of
U.S. dollars)(Millions of Yen)

¥ 11,998

101

15. Segment Information(1) General Information about reportable segments
In regard to reportable segments, the Company is able to obtain discrete financial data from its component units.
Accordingly, its segments are subject to regular review to help the Board of Directors decide how to allocate managerial resources and evaluate businessperformance.
Divisions by products and services are located at headquarters. Each division works out a comprehensive strategy applicable to their products and services
and carries out their business activities.
The Company consists of segments based on the following divisions:
Segment

Statutory tax rate

(1,885)

0.8%

0.8%

Long-term expected rate of return

FY2016

Net defined benefit liability
Net retirement benefit obligation

77

FY2015FY2015

Discount rate

¥ 12,031

Unfunded retirement benefit obligation
Net retirement benefit obligation

FY2016(Thousands of
U.S. dollars)(Millions of Yen)FY2016(2) Actuarial assumptions
The principal actuarial assumptions as of FY2016 and FY2015 were as
follows:

expenseDividend and other items excluded permanently fromtaxable income

Chemicals
Performance Materials
Agricultural Chemicals

Main Products
Basic chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc.)
Fine chemicals (epoxy compound for LED sealants, solder resist and painting, flame retardants, chlorinated cyanuric
acid for sterilizing, etc.)
Display materials (LCD alignment coating, etc.)
Semiconductor materials (bottom anti-reflective coating for semiconductors, etc.)
Inorganic materials (hard coating materials, electronic information materials, polishing materials, etc.)
Agrochemicals (herbicides, insecticides, fungicides, combination fungicide and insecticide, and plant growth regulators)
Animal health products

Pharmaceuticals

LIVALO® (anti-cholesterol drugs), etc.
Finetech® (custom manufacturing and process researching services for pharmaceutical companies)

Trading

Trading, etc.

OthersTransportation, landscaping, engineering, fertilizer, etc.

(2) Basis for the measurement of reported segment income or loss, segment assets, and other material items
The accounting policies for the reportable segments are consistent with the Company’s accounting policies used in the preparation of its consolidated financial
statements.
Intersegment sales and income (loss) are recognized based on current market prices.
(3) Information on sales, income (loss), assets, and other item amounts by reportable segment
Millions of Yen
FY2015Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

OthersAdjustment(Note)

Consolidated
Total¥ 25,159
9,187
34,347
3,927
26,643¥ 45,840
5,932
51,773
12,021
40,972¥ 43,695
3,792
47,487
10,831
52,917¥ 8,668
−
8,668
2,006
11,144¥ 43,014
12,63055,644
1,813
19,672¥ 10,516
10,362
20,879475
10,147¥ −(41,905)(41,905)(2,469)66,671¥ 176,894−
176,894
28,606228,169

1,427
−

5,124
51

1,411
−

818
−

57
2

386
−

403
−

9,629
54

¥ 2,264¥ 5,405¥ 1,298

¥ 438

441

¥ 381

¥ 10,245¥

15¥

Notes: The adjustments are as follows:(1) The (2,469) million yen adjustment in segment income includes (361) million yen in intersegment eliminations, and (2,107) million yen corporate expenses not
attributable to any reportable segment. The corporate expenses are mainly group administrative expenses which do not belong to segments.
(2) The 66,671 million yen adjustment in segment assets includes (11,172) million yen in intersegment eliminations and 77,843 million yen in corporate assets not
attributable to any reportable segment. The corporate assets are mainly group administrative assets which do not belong to segments.
(3) The 403 million yen adjustment in depreciation and amortization is corporate expenses.
(4) The 381 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets are mainly group
administrative assets which do not belong to segments.

Nissan Chemical Industries, Ltd. Annual Report 201778

11. Investment Securities(Thousands of
U.S. dollars)(Millions of Yen)FY2016FY2016FY2015¥ 24,031¥ 24,559$ 214,180

Unlisted securities of affiliates

6,636

7,244

59,144

Unlisted securities

1,797

1,447

16,016¥ 32,465¥ 33,251$ 289,349

Equity securities

12. Short-term Debt and Long-term Debt
Short-term debt consisting of an unsecured bank overdraft as of March 31,2017 was 23,155 million yen.
The weighted average interest rate on short-term debt outstanding as ofMarch 31, 2017 was 0.5%.
The weighted average interest rate on long-term debt outstanding as ofMarch 31, 2017 was 0.85%.
The weighted average interest rate on the current portion of long-term
debt outstanding as of March 31, 2017 was 0.92%.
Long-term debt as of FY2016 and FY2015 were as follows:(Thousands of
U.S. dollars)(Millions of Yen)FY2016FY2016FY2015Long-term debt

¥ 7,650¥ 10,160$ 68,182

Less current portion(3,070)(3,060)(27,362)¥ 4,580¥ 7,100$ 40,820

Long-term debt payments due after FY2016 were as follows:(Millions of Yen)

(Thousands of
U.S. dollars)

FY2017¥ 2,470$ 22,014

FY20181,670

14,884FY2019330

2,941

FY2020 and thereafter

110

980

¥ 4,580$ 40,820

Year ending March 31

13. Retirement Benefits(1) The liability for retirement benefits as of FY2016 and FY2015 were as
follows:

Retirement benefit obligation
Plan asset

2.0%

2.0%

3.6 to 9.0%

3.6 to 9.0%

Expected rate of salary increase (forecast)(Note) Expected rate of salary increase is calculated based on our point system.

14. Income Taxes
The Company is subject to a number of taxes based on income. The
statutory income tax rates were approximately 30.86% for the year ended
March 31, 2017 and 33.06% for the year ended March 31, 2016.
The tax effects of significant temporary differences which resulted indeferred tax assets and liabilities as of FY2016 and FY2015 were as
follows:

FY2016

Deferred tax assets:
The tax effect of investment on
subsidiary to be liquidated
Inventory
Provision for bonus
Unrealized profit of non-current assets
Loss on valuation of securities
Other
Gross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Net defined benefit asset
Reserve for advanced
depreciation of non-current assets
Other
Total deferred tax liabilities
Net deferred tax assets¥ 1,124$ 10,018

754
575
394
356
2,554
5,759
(41)
5,717

6,649
5,250
4,082
3,565
20,82950,410(437)
49,964(4,477)(596)(4,751)(631)(39,902)(5,312)

(276)

(285)

(2,460)(72)(5,422)¥ 184(76)(5,745)¥ (27)(642)(48,324)$ 1,640

The differences between the statutory tax rate and the effective tax rate forthe years ended FY2016 and FY2015 were as follows:
FY201633.06%

2.69%

2.45%

0.46

0.59

Difference of tax rate for foreign consolidated subsidiaries(0.65)(0.60)

Equity in earnings of affiliates(0.68)(1.00)(2.80)(2.55)Tax credit(6.20)(7.74)

Other, net

0.04(3.74)

Effective tax rate

23.72%

20.47%(Reconciliation)(14,018)

Elimination of intercompany dividend income(1,987)(2,056)(17,709)

Entertainment and other permanently non-deductible

101

72

900
(16,800)900

Net defined benefit asset(1,987)(2,086)(17,709)¥ (1,885)¥ (1,983)$ (16,800)

FY201530.86%(124,938)

102

FY2016

746
589
458
400
2,337
5,656
(49)
5,606

$ 107,228

Nissan Chemical Industries, Ltd. Annual Report 2017

FY2015¥ 1,124(14,055)(1,983)(Thousands of
U.S. dollars)(Millions of Yen)

¥ 11,998

101

15. Segment Information(1) General Information about reportable segments
In regard to reportable segments, the Company is able to obtain discrete financial data from its component units.
Accordingly, its segments are subject to regular review to help the Board of Directors decide how to allocate managerial resources and evaluate businessperformance.
Divisions by products and services are located at headquarters. Each division works out a comprehensive strategy applicable to their products and services
and carries out their business activities.
The Company consists of segments based on the following divisions:
Segment

Statutory tax rate

(1,885)

0.8%

0.8%

Long-term expected rate of return

FY2016

Net defined benefit liability
Net retirement benefit obligation

77

FY2015FY2015

Discount rate

¥ 12,031

Unfunded retirement benefit obligation
Net retirement benefit obligation

FY2016(Thousands of
U.S. dollars)(Millions of Yen)FY2016(2) Actuarial assumptions
The principal actuarial assumptions as of FY2016 and FY2015 were as
follows:

expenseDividend and other items excluded permanently fromtaxable income

Chemicals
Performance Materials
Agricultural Chemicals

Main Products
Basic chemicals (melamine, sulfuric acid, nitric acid, ammonia, etc.)
Fine chemicals (epoxy compound for LED sealants, solder resist and painting, flame retardants, chlorinated cyanuric
acid for sterilizing, etc.)
Display materials (LCD alignment coating, etc.)
Semiconductor materials (bottom anti-reflective coating for semiconductors, etc.)
Inorganic materials (hard coating materials, electronic information materials, polishing materials, etc.)
Agrochemicals (herbicides, insecticides, fungicides, combination fungicide and insecticide, and plant growth regulators)
Animal health products

Pharmaceuticals

LIVALO® (anti-cholesterol drugs), etc.
Finetech® (custom manufacturing and process researching services for pharmaceutical companies)

Trading

Trading, etc.

OthersTransportation, landscaping, engineering, fertilizer, etc.

(2) Basis for the measurement of reported segment income or loss, segment assets, and other material items
The accounting policies for the reportable segments are consistent with the Company’s accounting policies used in the preparation of its consolidated financial
statements.
Intersegment sales and income (loss) are recognized based on current market prices.
(3) Information on sales, income (loss), assets, and other item amounts by reportable segment
Millions of Yen
FY2015Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

OthersAdjustment(Note)

Consolidated
Total¥ 25,159
9,187
34,347
3,927
26,643¥ 45,840
5,932
51,773
12,021
40,972¥ 43,695
3,792
47,487
10,831
52,917¥ 8,668
−
8,668
2,006
11,144¥ 43,014
12,63055,644
1,813
19,672¥ 10,516
10,362
20,879475
10,147¥ −(41,905)(41,905)(2,469)66,671¥ 176,894−
176,894
28,606228,169

1,427
−

5,124
51

1,411
−

818
−

57
2

386
−

403
−

9,629
54

¥ 2,264¥ 5,405¥ 1,298

¥ 438

441

¥ 381

¥ 10,245¥

15¥

Notes: The adjustments are as follows:(1) The (2,469) million yen adjustment in segment income includes (361) million yen in intersegment eliminations, and (2,107) million yen corporate expenses not
attributable to any reportable segment. The corporate expenses are mainly group administrative expenses which do not belong to segments.
(2) The 66,671 million yen adjustment in segment assets includes (11,172) million yen in intersegment eliminations and 77,843 million yen in corporate assets not
attributable to any reportable segment. The corporate assets are mainly group administrative assets which do not belong to segments.
(3) The 403 million yen adjustment in depreciation and amortization is corporate expenses.
(4) The 381 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets are mainly group
administrative assets which do not belong to segments.

Nissan Chemical Industries, Ltd. Annual Report 201778

Independent Auditor’s Report
Millions of Yen
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Others¥ 25,723
9,057
34,7803,820
26,113¥ 46,403
6,406
52,80912,53348,028¥ 47,791
4,160
51,952
13,201
55,588¥ 7,966
26
7,992
1,656
10,182¥ 42,281
12,91655,198
1,697
19,782¥ 10,108
13,921
24,029966
10,731

1,613
−

4,763
−

1,336
−

705
−

59
2

330
−

¥ 2,000¥ 8,404¥ 2,416¥ 903

FY2016

Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

¥

46

¥

299

Adjustment(Note)

Consolidated
Total

¥

14
(46,489)(46,474)(2,437)61,322¥ 180,289−
180,289
31,438
231,748

79
−

8,887
2

229

¥ 14,299¥

Notes: The adjustments are as follows:(1) The (2,437) million yen adjustment in segment income includes (285) million yen in intersegment eliminations, 14 million yen sales not attributable to any reporting
segment, and (2,165) million yen corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to segments.
(2) The 61,322 million yen adjustment in segment assets includes (9,338) million yen in intersegment eliminations and 70,660 million yen in corporate assets not
attributable to any reportable segment. The corporate assets are mainly group administrative assets which do not belong to segments.
(3) The 79 million yen adjustment in depreciation and amortization is corporate expenses.
(4) The 229 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets are mainly group
administrative assets which do not belong to segments.
Thousands of U.S. Dollars
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

OthersAdjustment(Note)

Consolidated
Total$ 229,260
80,722309,982
34,046
232,736$ 413,574
57,094
470,668
111,702428,057$ 425,945
37,077463,030
117,656
495,437$ 70,998
232
71,23014,75990,749$ 376,836
115,116
491,961
15,125
176,310$ 90,089
124,073
214,162
8,610
95,642$
125(414,340)(414,207)(21,720)546,542$ 1,606,854−
1,606,854
280,196
2,065,490

14,376−42,451−

11,907
−

6,283
−

526
18

2,941
−

704
−

79,20718$ 17,825$ 74,902$ 21,533$ 8,048410$ 2,665

2,041$ 127,442

FY2016

Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets$

Overseas operations, which represent sales to customers outside Japan for FY2016 and FY2015 were as follows:
Millions of Yen
FY2015Japan

Net sales¥ 104,032

FY2016Japan

Net sales¥ 103,077

FY2016Japan

Net sales$ 918,690

Other Asia

Europe and theUnited States

Other Asia

Europe and theUnited States

Consolidated Total

Thousands of U.S. dollars
Europe and the
Other Asia
United States

Consolidated Total

Korea¥ 18,401¥ 34,398

Korea¥ 15,513

Korea$ 138,262¥ 39,286$ 350,143¥ 20,062¥ 22,412$ 199,750

Consolidated Total¥ 176,894¥ 180,289$ 1,606,854$

Yaesu Audit Company
5-17, Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan
Phone: +(81)-3-3242-1351 Fax: +(81)-3-3242-1353

Independent Auditor’s Report
To the Board of Directors of
Nissan Chemical Industries, Ltd.
We have audited the accompanying consolidated financial statements of Nissan Chemical Industries, Ltd. and consolidated subsidiaries,
which comprise the consolidated balance sheets as of March 31, 2017, and the related consolidated statements of income, comprehensive income, changes in net assets, and cash flows for the year then ended, and a summary of significant accounting policies and otherexplanatory information, all expressed in Japanese Yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in conformity withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit inconformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevantto the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Nissan Chemical Industries, Ltd. and its consolidated subsidiaries as of March 31, 2017, and the consolidated results of theiroperations and their cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2017 arepresented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made on the basis described in Note 3 to the consolidated financial statements.
Yaesu Audit Company
Tokyo, Japan
June 28, 2017

16. Amounts per Share

Net income per share is based on the weighted average number of shares of common stock outstanding during the year.
Cash dividends per share attributable to the period represent dividends declared as applicable to the year.
Amounts per share of net income and cash dividends for FY2016 and FY2015 were as follows:(Yen)
FY2016

Net income
Cash dividends

79¥ 156.97¥ 52.00

Nissan Chemical Industries, Ltd. Annual Report 2017

(U.S. dollars)
FY2015¥ 143.37¥ 44.00

FY2016$ 1.40$ 0.46

Nissan Chemical Industries, Ltd. Annual Report 201780

Independent Auditor’s Report
Millions of Yen
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

Others¥ 25,723
9,057
34,7803,820
26,113¥ 46,403
6,406
52,80912,53348,028¥ 47,791
4,160
51,952
13,201
55,588¥ 7,966
26
7,992
1,656
10,182¥ 42,281
12,91655,198
1,697
19,782¥ 10,108
13,921
24,029966
10,731

1,613
−

4,763
−

1,336
−

705
−

59
2

330
−

¥ 2,000¥ 8,404¥ 2,416¥ 903

FY2016

Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets

¥

46

¥

299

Adjustment(Note)

Consolidated
Total

¥

14
(46,489)(46,474)(2,437)61,322¥ 180,289−
180,289
31,438
231,748

79
−

8,887
2

229

¥ 14,299¥

Notes: The adjustments are as follows:(1) The (2,437) million yen adjustment in segment income includes (285) million yen in intersegment eliminations, 14 million yen sales not attributable to any reporting
segment, and (2,165) million yen corporate expenses not attributable to any reportable segment. The corporate expenses are mainly group administrative expenses
which do not belong to segments.
(2) The 61,322 million yen adjustment in segment assets includes (9,338) million yen in intersegment eliminations and 70,660 million yen in corporate assets not
attributable to any reportable segment. The corporate assets are mainly group administrative assets which do not belong to segments.
(3) The 79 million yen adjustment in depreciation and amortization is corporate expenses.
(4) The 229 million yen adjustment in increase of property, plant and equipment and intangible assets is corporate assets. The corporate assets are mainly group
administrative assets which do not belong to segments.
Thousands of U.S. Dollars
Chemicals

Performance
Materials

Agricultural
Chemicals

Pharmaceuticals

Trading

OthersAdjustment(Note)

Consolidated
Total$ 229,260
80,722309,982
34,046
232,736$ 413,574
57,094
470,668
111,702428,057$ 425,945
37,077463,030
117,656
495,437$ 70,998
232
71,23014,75990,749$ 376,836
115,116
491,961
15,125
176,310$ 90,089
124,073
214,162
8,610
95,642$
125(414,340)(414,207)(21,720)546,542$ 1,606,854−
1,606,854
280,196
2,065,490

14,376−42,451−

11,907
−

6,283
−

526
18

2,941
−

704
−

79,20718$ 17,825$ 74,902$ 21,533$ 8,048410$ 2,665

2,041$ 127,442

FY2016

Net sales
Sales to outside customers
Intersegment sales
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
Increase of property, plant andequipment, and intangible assets$

Overseas operations, which represent sales to customers outside Japan for FY2016 and FY2015 were as follows:
Millions of Yen
FY2015Japan

Net sales¥ 104,032

FY2016Japan

Net sales¥ 103,077

FY2016Japan

Net sales$ 918,690

Other Asia

Europe and theUnited States

Other Asia

Europe and theUnited States

Consolidated Total

Thousands of U.S. dollars
Europe and the
Other Asia
United States

Consolidated Total

Korea¥ 18,401¥ 34,398

Korea¥ 15,513

Korea$ 138,262¥ 39,286$ 350,143¥ 20,062¥ 22,412$ 199,750

Consolidated Total¥ 176,894¥ 180,289$ 1,606,854$

Yaesu Audit Company
5-17, Yaesu 1-chome, Chuo-ku, Tokyo 103-0028, Japan
Phone: +(81)-3-3242-1351 Fax: +(81)-3-3242-1353

Independent Auditor’s Report
To the Board of Directors of
Nissan Chemical Industries, Ltd.
We have audited the accompanying consolidated financial statements of Nissan Chemical Industries, Ltd. and consolidated subsidiaries,
which comprise the consolidated balance sheets as of March 31, 2017, and the related consolidated statements of income, comprehensive income, changes in net assets, and cash flows for the year then ended, and a summary of significant accounting policies and otherexplanatory information, all expressed in Japanese Yen.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in conformity withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit inconformity with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevantto the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Nissan Chemical Industries, Ltd. and its consolidated subsidiaries as of March 31, 2017, and the consolidated results of theiroperations and their cash flows for the year then ended in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2017 arepresented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made on the basis described in Note 3 to the consolidated financial statements.
Yaesu Audit Company
Tokyo, Japan
June 28, 2017

16. Amounts per Share

Net income per share is based on the weighted average number of shares of common stock outstanding during the year.
Cash dividends per share attributable to the period represent dividends declared as applicable to the year.
Amounts per share of net income and cash dividends for FY2016 and FY2015 were as follows:(Yen)
FY2016

Net income
Cash dividends

79¥ 156.97¥ 52.00

Nissan Chemical Industries, Ltd. Annual Report 2017

(U.S. dollars)
FY2015¥ 143.37¥ 44.00

FY2016$ 1.40$ 0.46

Nissan Chemical Industries, Ltd. Annual Report 201780

C o r porat e I nf orm a tio n

Our Network

List of Offices, Plants and Laboratories
Offices

Domestic Production Bases
Nagoya Plant

This plant faces the Port of Nagoya. Here we
manufacture sulfuric acid and high-quality
urea aqueous solution, among other products.

Head Office

Sapporo OfficeSendai Office

Nagoya OfficeOsaka Office

Fukuoka Office7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054
Tel: 03-3296-8111

Toyama Plant

Greenwood Sendai Ichibancho Building 2-7-12, Ichibancho, Aoba-ku, Sendai 980-0811
Tel: 022-266-4311

This plant is located in the center of Toyama
Plain. Here we manufacture various groups of
products, such as basic chemicals, environmental chemicals, and performance materials.

Osaka Daiichi Seimei Building 1-8-17, Umeda, Kita-ku, Osaka 530-0001
Tel: 06-6346-7200

Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi, Chuo-ku, Sapporo 060-0002
Tel: 011-251-0261
Nagoya KS Building 3-1-18, Taiko, Nakamura-ku, Nagoya 453-0801
Tel: 052-452-8623
JPR Hakata Building 1-4-4, Hakata Ekimae, Hakata-ku, Fukuoka 812-0011
Tel: 092-432-3421

PlantsSodegaura Plant

Sodegaura Plant Goi Works

Saitama Plant

Toyama Plant

Nagoya Plant

Onoda Plant

11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-63-2341
235-1, Aza Nishidai, Oaza Jimbohara-machi, Kamisato-machi, Saitama 369-0305
Tel: 0495-34-2810

Onoda Plant

7, Tsukiji-cho, Minato-ku, Nagoya 455-0045
Tel: 052-661-1676

This plant is located in Sanyo-Onoda City,
Yamaguchi. It is our base for the production offine organic synthetic compounds, such as
agrochemicals and pharmaceuticals.

12-17, Goiminamikaigan, Ichihara, Chiba 290-0045
Tel: 0436-22-2110
635 Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-433-9602
6903-1, Oaza Onoda, Sanyo-Onoda, Yamaguchi 756-0093
Tel: 0836-83-2800

Laboratories
Chemical Research Laboratories

10-1, Tsuboi-Nishi 2-chome, Funabashi, Chiba 274-8507
Tel: 047-465-1112

Biological Research Laboratories

1470, Shiraoka, Shiraoka, Saitama 349-0294
Tel: 0480-92-2513

Materials Research Laboratories
488-6, Suzumi-cho, Funabashi, Chiba 274-0052
Tel: 047-774-0200
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-64-2881
635, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-465-7133

Nissan Chemical GroupJapan
Nissei Corporation

Nissan Butsuryu Co., Ltd.

Nissan Green & Landscape Co., Ltd.

Nissan Engineering, Ltd.

Environmental Technical Laboratories, Ltd.

Nihon Hiryo Co., Ltd.

Sun Agro Co., Ltd.

Clariant Catalysts (Japan) K.K.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3241-2548■ Sales of chemical products and insurance, and real estate business
3-16-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047
Tel: 03-3256-4031■ Landscaping and civil engineering
2-11-7, Kohoku, Adachi-ku, Tokyo 123-0872
Tel: 03-3898-6643■ Environmental analysis

Saitama Plant

This plant is located in northern Saitama. Here
we manufacture agricultural formulations.
81

Nissan Chemical Industries, Ltd. Annual Report 2017

Sodegaura Plant Goi Works

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3510-3601■ Fertilizers and agrochemicals

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-5255-6901■ Transportation
1-28-6, Kameido, Koto-ku, Tokyo 136-0071
Tel: 03-3636-7578■ Plant engineering services
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3241-4231■ Fertilizers and agrochemicals
2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: 03-5977-7300■ Catalysts for petrochemical and petroleum productsThis plant is located in the industrial area in
Sodegaura City, Chiba. It is our base for the
production of performance materials.

Nissan Chemical Industries, Ltd. Annual Report 201782

C o r porat e I nf orm a tio n

Our Network

List of Offices, Plants and Laboratories
Offices

Domestic Production Bases
Nagoya Plant

This plant faces the Port of Nagoya. Here we
manufacture sulfuric acid and high-quality
urea aqueous solution, among other products.

Head Office

Sapporo OfficeSendai Office

Nagoya OfficeOsaka Office

Fukuoka Office7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054
Tel: 03-3296-8111

Toyama Plant

Greenwood Sendai Ichibancho Building 2-7-12, Ichibancho, Aoba-ku, Sendai 980-0811
Tel: 022-266-4311

This plant is located in the center of Toyama
Plain. Here we manufacture various groups of
products, such as basic chemicals, environmental chemicals, and performance materials.

Osaka Daiichi Seimei Building 1-8-17, Umeda, Kita-ku, Osaka 530-0001
Tel: 06-6346-7200

Maruito Sapporo Building 1-1, Kita-Nijyo-Nishi, Chuo-ku, Sapporo 060-0002
Tel: 011-251-0261
Nagoya KS Building 3-1-18, Taiko, Nakamura-ku, Nagoya 453-0801
Tel: 052-452-8623
JPR Hakata Building 1-4-4, Hakata Ekimae, Hakata-ku, Fukuoka 812-0011
Tel: 092-432-3421

PlantsSodegaura Plant

Sodegaura Plant Goi Works

Saitama Plant

Toyama Plant

Nagoya Plant

Onoda Plant

11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-63-2341
235-1, Aza Nishidai, Oaza Jimbohara-machi, Kamisato-machi, Saitama 369-0305
Tel: 0495-34-2810

Onoda Plant

7, Tsukiji-cho, Minato-ku, Nagoya 455-0045
Tel: 052-661-1676

This plant is located in Sanyo-Onoda City,
Yamaguchi. It is our base for the production offine organic synthetic compounds, such as
agrochemicals and pharmaceuticals.

12-17, Goiminamikaigan, Ichihara, Chiba 290-0045
Tel: 0436-22-2110
635 Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-433-9602
6903-1, Oaza Onoda, Sanyo-Onoda, Yamaguchi 756-0093
Tel: 0836-83-2800

Laboratories
Chemical Research Laboratories

10-1, Tsuboi-Nishi 2-chome, Funabashi, Chiba 274-8507
Tel: 047-465-1112

Biological Research Laboratories

1470, Shiraoka, Shiraoka, Saitama 349-0294
Tel: 0480-92-2513

Materials Research Laboratories
488-6, Suzumi-cho, Funabashi, Chiba 274-0052
Tel: 047-774-0200
11-1, Kitasode, Sodegaura, Chiba 299-0266
Tel: 0438-64-2881
635, Sasakura, Fuchu-machi, Toyama 939-2753
Tel: 076-465-7133

Nissan Chemical GroupJapan
Nissei Corporation

Nissan Butsuryu Co., Ltd.

Nissan Green & Landscape Co., Ltd.

Nissan Engineering, Ltd.

Environmental Technical Laboratories, Ltd.

Nihon Hiryo Co., Ltd.

Sun Agro Co., Ltd.

Clariant Catalysts (Japan) K.K.

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3241-2548■ Sales of chemical products and insurance, and real estate business
3-16-9, Uchikanda, Chiyoda-ku, Tokyo 101-0047
Tel: 03-3256-4031■ Landscaping and civil engineering
2-11-7, Kohoku, Adachi-ku, Tokyo 123-0872
Tel: 03-3898-6643■ Environmental analysis

Saitama Plant

This plant is located in northern Saitama. Here
we manufacture agricultural formulations.
81

Nissan Chemical Industries, Ltd. Annual Report 2017

Sodegaura Plant Goi Works

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3510-3601■ Fertilizers and agrochemicals

1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-5255-6901■ Transportation
1-28-6, Kameido, Koto-ku, Tokyo 136-0071
Tel: 03-3636-7578■ Plant engineering services
1-10-5, Nihonbashihon-cho, Chuo-ku, Tokyo 103-0023
Tel: 03-3241-4231■ Fertilizers and agrochemicals
2-28-8, Honkomagome, Bunkyo-ku, Tokyo 113-0021
Tel: 03-5977-7300■ Catalysts for petrochemical and petroleum productsThis plant is located in the industrial area in
Sodegaura City, Chiba. It is our base for the
production of performance materials.

Nissan Chemical Industries, Ltd. Annual Report 201782

C o r porat e I nf orm a tio n

Corporate History

Our Network

History of Nissan Chemical Industries, Ltd.

Overseas Bases (As of March 31, 2017)

We were founded in 1887 as Tokyo Jinzo Hiryo, Japan’s first manufacturer of chemical fertilizers, by visionaries of the Meiji Period, namely Jokichi
Takamine, Eiichi Shibusawa, Takashi Masuda, and others.
We later merged with Kanto Sanso, Nippon Kagaku Hiryo, and other companies, and eventually changed the company name to Dainippon Jinzo
Hiryo. In 1937, we made a comprehensive transfer of our assets, etc., to Nippon Kagaku Kogyo, which was affiliated with Nippon Sangyo Corporation,and then changed the company name to Nissan Chemical Industries, Ltd., the name by which we are known today (hereafter, the “Company”).

History

Nissan Chemical Europe S.A.R.L

NCK Co., Ltd.

Parc d'affaires de Crécy - 10A rue de la Voie Lactée
69370 Saint Didier au Mont d'Or, France
Tel: +33-4-37-64-40-20■ Sales of agrochemicals

127, Chupalsandan-ro, Paengseong-eup, Pyeongtaek-si,
Gyeonggi-do, 17998, Korea
Tel: +82-31-691-7044■ R&D, production and sales ofelectronic materials

Nissan Chemical Agro Korea Ltd.
Room 2001, 74, Sejong-daero, Jung-gu,
Seoul 04526, Korea
Tel: +82-2-774-6470■ Sales of agrochemicals

February 1887
July 1889
March 1891
December 1895
November 1897
December 1907
July 1910
February 1919
June 1922
May 1923

April 1928
February 1931
October 1932
December 1937
April 1943
April 1945
May 1949
July 1949
January 1965
November 1968
August 1969
December 1969
June 1988
October 1989
July 1996
April 1998
April 2001
June 2001

Nissan Chemical Product(Shanghai) Co., Ltd.

Nissan Chemical Do Brasil

Room 1110, New Town Center,
83 Lou Shan Guan Road, Shanghai, China
Tel: +86-21-6236-8300■ Sales support and promotional services for agrochemicals
Sales support for performance materials

Nissan Chemical Taiwan Co., Ltd.
5F, 67 Luke 2nd Road, Luzhu District,Kaohsiung, Taiwan
Tel: +886-7-695-5252■ R&D and sales support for electronic materials

83

Nissan Chemical Industries, Ltd. Annual Report 2017

Avenida Gisele Constantino, 1850,
Salas 1518 a 1520, Parque Bela Vista,
Votorantim, SP, 18110-650, Brasil
Tel: +55-15-3019-8772■ Sales support and promotional services
for agrochemicals

Nissan Chemical America Corporation
10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: +1-713-532-4745■ R&D, production and sales of inorganic materials

October 2001
July 2002
December 2002
February 2005
January 2010
October 2010
June 2013
October 2013
January 2014
October 2014

Tokyo Jinzo Hiryo is established.
Nippon Seimi Seizo (later renamed Nippon Kagaku Hiryo) is established.
The Onoda Plant of Nippon Seimi Seizo (now the Onoda Plant of the Company) is completed.
Oji Seizosho (later renamed Kanto Sanso) is established.
The Oji Plant of Kanto Sanso (which later becomes the Oji Plant of the Company) is completed.
The Komatsugawa Plant of Tokyo Jinzo Hiryo (which later becomes Tokyo Nissan Kagaku) is completed.
Tokyo Jinzo Hiryo is renamed Dainippon Jinzo Hiryo.
The Nagoya Plant (now the Nagoya Plant of the Company) of Nippon Jinzo Hiryo (later merged with Nippon Kagaku Hiryo) is completed.
Taisho Unsou (now Nissan Butsuryu Co., Ltd.) is established.
Dainippon Jinzo Hiryo merges with Kanto Sanso and Nippon Kagaku Hiryo.
The Research Section of the Engineering Department is established at the head office and the Research Group is established at the Oji Plant. They serve as theresearch and development departments.
The Toyama Plant of Dainippon Jinzo Hiryo (now the Toyama Plant of the Company) is completed.
The fertilizer testing station of Dainippon Jinzo Hiryo (Koyasu, Yokohama City) is relocated to Shiraoka (now the Biological Research Laboratories of theCompany).
Bunka Nohosha (now Nissei Corporation) is established.
Dainippon Jinzo Hiryo transfers assets, etc. to Nippon Kagaku Kogyo and then the latter is renamed Nissan Chemical Industries, Ltd.
Nissan Chemical Industries, Ltd. is acquired by Nippon Mining Co., Ltd. and becomes its chemical section.
Nippon Oil & Fats Co., Ltd. takes over the chemical section of Nippon Mining Co., Ltd. in a transfer of business and changes its name to Nissan Chemical
Industries, Ltd.
The Company is listed on the Japanese stock exchange after it resumes operation.
The Company spins off its oil and fats section (now NOF Corporation) in accordance with the Enterprise Reorganization Act.
The Company establishes Nissan Petrochemicals Ltd., thereby entering the petrochemical business.
Tokyo Nissan Kagaku relocates its plant to Kamisato-mura, Saitama (now the Saitama Plant of the Company).
The Company constructs the Sodegaura Plant following the formulation of a plan to close and relocate the Oji Plant.
Production at the Oji Plant is discontinued and the plant is closed.
The Company transfers its petrochemical section to Kyowa Hakko Kogyo Co., Ltd. (now KH Neochem Co., Ltd.) and withdraws from the petrochemical business.
The Company establishes Nissan Chemical America Corporation (NCA) in the United States.
The Company establishes Nissan Chemical Houston Corporation (NCH) in the United States.
The Company acquires Tokyo Nissan Kagaku as its Saitama Plant.
The Company establishes Nissan Chemical Korea Co., Ltd. (now, NCK Co., Ltd.) in South Korea.
The Company reorganizes its R&D facilities and sets up the Chemical Research Laboratories, Electronic Materials Research Laboratories, and Specialty
Materials Research Laboratories.
The Company establishes Nissan-Agri Co., Ltd. (now Sun Agro Co., Ltd.), thereby spinning off its fertilizer business and integrating group companies related tothe business.
The Company acquires the domestic herbicide business from Monsanto Japan Limited.
The Company establishes Nissan Chemical Europe S.A.R.L. (NCE) in France.
The Company establishes Nissan Chemical Agro Korea Ltd. (NAK) in South Korea.
The Company acquires a fungicide from Dow AgroSciences LLC of the United States.
The Company establishes Nissan Chemical Taiwan Co., Ltd. (NCT) in Taiwan.
The Company acquires Thin Materials GmbH (Germany).
The Company merges NCH into NCA.
The Company establishes Nissan Chemical Product (Shanghai) Co., Ltd. (NCS) in China.
The Company reorganizes the Electronic Materials Research Laboratories and Inorganic Materials Research Laboratories into the Materials ResearchLaboratories.

June 2016 The Company establishes Nissan Chemical Do Brasil (NCB) in Brazil.

Nissan Chemical Industries, Ltd. Annual Report 201784

C o r porat e I nf orm a tio n

Corporate History

Our Network

History of Nissan Chemical Industries, Ltd.

Overseas Bases (As of March 31, 2017)

We were founded in 1887 as Tokyo Jinzo Hiryo, Japan’s first manufacturer of chemical fertilizers, by visionaries of the Meiji Period, namely Jokichi
Takamine, Eiichi Shibusawa, Takashi Masuda, and others.
We later merged with Kanto Sanso, Nippon Kagaku Hiryo, and other companies, and eventually changed the company name to Dainippon Jinzo
Hiryo. In 1937, we made a comprehensive transfer of our assets, etc., to Nippon Kagaku Kogyo, which was affiliated with Nippon Sangyo Corporation,and then changed the company name to Nissan Chemical Industries, Ltd., the name by which we are known today (hereafter, the “Company”).

History

Nissan Chemical Europe S.A.R.L

NCK Co., Ltd.

Parc d'affaires de Crécy - 10A rue de la Voie Lactée
69370 Saint Didier au Mont d'Or, France
Tel: +33-4-37-64-40-20■ Sales of agrochemicals

127, Chupalsandan-ro, Paengseong-eup, Pyeongtaek-si,
Gyeonggi-do, 17998, Korea
Tel: +82-31-691-7044■ R&D, production and sales ofelectronic materials

Nissan Chemical Agro Korea Ltd.
Room 2001, 74, Sejong-daero, Jung-gu,
Seoul 04526, Korea
Tel: +82-2-774-6470■ Sales of agrochemicals

February 1887
July 1889
March 1891
December 1895
November 1897
December 1907
July 1910
February 1919
June 1922
May 1923

April 1928
February 1931
October 1932
December 1937
April 1943
April 1945
May 1949
July 1949
January 1965
November 1968
August 1969
December 1969
June 1988
October 1989
July 1996
April 1998
April 2001
June 2001

Nissan Chemical Product(Shanghai) Co., Ltd.

Nissan Chemical Do Brasil

Room 1110, New Town Center,
83 Lou Shan Guan Road, Shanghai, China
Tel: +86-21-6236-8300■ Sales support and promotional services for agrochemicals
Sales support for performance materials

Nissan Chemical Taiwan Co., Ltd.
5F, 67 Luke 2nd Road, Luzhu District,Kaohsiung, Taiwan
Tel: +886-7-695-5252■ R&D and sales support for electronic materials

83

Nissan Chemical Industries, Ltd. Annual Report 2017

Avenida Gisele Constantino, 1850,
Salas 1518 a 1520, Parque Bela Vista,
Votorantim, SP, 18110-650, Brasil
Tel: +55-15-3019-8772■ Sales support and promotional services
for agrochemicals

Nissan Chemical America Corporation
10333 Richmond Avenue, Suite 1100, Houston,
Texas 77042, U.S.A.
Tel: +1-713-532-4745■ R&D, production and sales of inorganic materials

October 2001
July 2002
December 2002
February 2005
January 2010
October 2010
June 2013
October 2013
January 2014
October 2014

Tokyo Jinzo Hiryo is established.
Nippon Seimi Seizo (later renamed Nippon Kagaku Hiryo) is established.
The Onoda Plant of Nippon Seimi Seizo (now the Onoda Plant of the Company) is completed.
Oji Seizosho (later renamed Kanto Sanso) is established.
The Oji Plant of Kanto Sanso (which later becomes the Oji Plant of the Company) is completed.
The Komatsugawa Plant of Tokyo Jinzo Hiryo (which later becomes Tokyo Nissan Kagaku) is completed.
Tokyo Jinzo Hiryo is renamed Dainippon Jinzo Hiryo.
The Nagoya Plant (now the Nagoya Plant of the Company) of Nippon Jinzo Hiryo (later merged with Nippon Kagaku Hiryo) is completed.
Taisho Unsou (now Nissan Butsuryu Co., Ltd.) is established.
Dainippon Jinzo Hiryo merges with Kanto Sanso and Nippon Kagaku Hiryo.
The Research Section of the Engineering Department is established at the head office and the Research Group is established at the Oji Plant. They serve as theresearch and development departments.
The Toyama Plant of Dainippon Jinzo Hiryo (now the Toyama Plant of the Company) is completed.
The fertilizer testing station of Dainippon Jinzo Hiryo (Koyasu, Yokohama City) is relocated to Shiraoka (now the Biological Research Laboratories of theCompany).
Bunka Nohosha (now Nissei Corporation) is established.
Dainippon Jinzo Hiryo transfers assets, etc. to Nippon Kagaku Kogyo and then the latter is renamed Nissan Chemical Industries, Ltd.
Nissan Chemical Industries, Ltd. is acquired by Nippon Mining Co., Ltd. and becomes its chemical section.
Nippon Oil & Fats Co., Ltd. takes over the chemical section of Nippon Mining Co., Ltd. in a transfer of business and changes its name to Nissan Chemical
Industries, Ltd.
The Company is listed on the Japanese stock exchange after it resumes operation.
The Company spins off its oil and fats section (now NOF Corporation) in accordance with the Enterprise Reorganization Act.
The Company establishes Nissan Petrochemicals Ltd., thereby entering the petrochemical business.
Tokyo Nissan Kagaku relocates its plant to Kamisato-mura, Saitama (now the Saitama Plant of the Company).
The Company constructs the Sodegaura Plant following the formulation of a plan to close and relocate the Oji Plant.
Production at the Oji Plant is discontinued and the plant is closed.
The Company transfers its petrochemical section to Kyowa Hakko Kogyo Co., Ltd. (now KH Neochem Co., Ltd.) and withdraws from the petrochemical business.
The Company establishes Nissan Chemical America Corporation (NCA) in the United States.
The Company establishes Nissan Chemical Houston Corporation (NCH) in the United States.
The Company acquires Tokyo Nissan Kagaku as its Saitama Plant.
The Company establishes Nissan Chemical Korea Co., Ltd. (now, NCK Co., Ltd.) in South Korea.
The Company reorganizes its R&D facilities and sets up the Chemical Research Laboratories, Electronic Materials Research Laboratories, and Specialty
Materials Research Laboratories.
The Company establishes Nissan-Agri Co., Ltd. (now Sun Agro Co., Ltd.), thereby spinning off its fertilizer business and integrating group companies related tothe business.
The Company acquires the domestic herbicide business from Monsanto Japan Limited.
The Company establishes Nissan Chemical Europe S.A.R.L. (NCE) in France.
The Company establishes Nissan Chemical Agro Korea Ltd. (NAK) in South Korea.
The Company acquires a fungicide from Dow AgroSciences LLC of the United States.
The Company establishes Nissan Chemical Taiwan Co., Ltd. (NCT) in Taiwan.
The Company acquires Thin Materials GmbH (Germany).
The Company merges NCH into NCA.
The Company establishes Nissan Chemical Product (Shanghai) Co., Ltd. (NCS) in China.
The Company reorganizes the Electronic Materials Research Laboratories and Inorganic Materials Research Laboratories into the Materials ResearchLaboratories.

June 2016 The Company establishes Nissan Chemical Do Brasil (NCB) in Brazil.

Nissan Chemical Industries, Ltd. Annual Report 201784

C o r porat e I nf orm a tio n

Corporate Profile

Share Information(As of March 31, 2017)(As of March 31, 2017)

Corporate Name
Head Office
FoundedCapital Stock
Number of Employees
Stock Listing
Transfer Agent

Nissan Chemical Industries, Ltd.
7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054, Japan
TEL: 03-3296-8111
1887
18,942 million yen
Consolidated: 2,402
Tokyo Stock Exchange
Sumitomo Mitsui Trust Bank, Limited 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan

Directors / Corporate Auditors / Executive Officers(As of June 28, 2017)

Major shareholders (Top ten companies)

Number of shares held (1,000 shares)

Investment (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

18,061

11.9

Japan Trustee Services Bank, Ltd. (Trust Account)

12,871

8.5

Trust & Custody Services Bank, Ltd.
as trustee for the Mizuho Trust & Banking Co., Ltd.
Retirement Benefit Trust

7,633

5.0

The Norinchukin Bank

4,800

3.2

Nissan Chemical Industries, Ltd. Customer Shareholders Association

3,968

2.6

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

3,217

2.1

Representative Director, President & CEO

Kojiro Kinoshita

Sompo Japan Nipponkoa Insurance Inc.

2,380

1.6

Director, Senior Executive Vice President

Junichi Miyazaki

Ono Pharmaceutical Co., Ltd.

2,376

1.6

Director, Senior Managing Executive Officer

Hiroyoshi Fukuro

Nissan Chemical Industries, Ltd. Employee Shareholders Association

2,205

1.5

Director, Managing Executive Officer

Masataka Hatanaka

Japan Trustee Services Bank, Ltd. (Trust Account 5)

2,108

1.4

Katsuaki Miyaji
Hidenori Takishita(Notes) 1. Although the company holds 2,242,017 treasury shares, it is not included in the above list of major shareholders.
2. Investment percentages are calculated excluding treasury shares.

Takashi Honda
Outside Director

Tisato Kajiyama
Tadashi Ohe

Corporate Auditors

Yasuyuki Nakajima
Norihiro Suzuki
Shuichi Takemoto
Noriyuki Katayama

Managing Executive Officer

Takeshi Iwata

Executive Officers

Satoru Hamamoto

24.1

11.6

1.5

(¥)

4,000

(Thousands)
35,0002,500

30,000

2,000
1,500

Motoaki Ishikawa

1,000

Hajime Yoshida

11.4

4,500

Shinsuke Yagi

Toshiro Miyake

4.1

Share Price and Trading volume (April 2015 – March 2017)

3,000

Kazuhiko Ohrai

47.3

Overseas investors Individuals/Others Treasury shares* The company retired 2,000,000 of its 2,242,017 treasury shares on May 9, 2017.

Hiroshi Onitsuka

Hironori YoshidaNissan Chemical Industries, Ltd. Annual Report 2017

Percentage ofshare held (%)

3,500

Yuji Nishida

Other domestic
companies

Financial institutions Securities companies

Nobutomo Tsuruzoe

Hitoshi Suzuki

85

360,000,000
154,000,000
11,976

Total Number of Authorized Shares
Shares of Common Share Issued
Shareholders

25,00020,00015,00010,000

500
0

5,000
2015/
4

5

6

7

8

9

10

11

12

2016/
1

2

3

4

5

6

7

8

9

10

11

12

2017/
1

2

3

0

Nissan Chemical Industries, Ltd. Annual Report 201786

C o r porat e I nf orm a tio n

Corporate Profile

Share Information(As of March 31, 2017)(As of March 31, 2017)

Corporate Name
Head Office
FoundedCapital Stock
Number of Employees
Stock Listing
Transfer Agent

Nissan Chemical Industries, Ltd.
7-1, Kanda Nishiki-cho 3-chome, Chiyoda-ku, Tokyo 101-0054, Japan
TEL: 03-3296-8111
1887
18,942 million yen
Consolidated: 2,402
Tokyo Stock Exchange
Sumitomo Mitsui Trust Bank, Limited 4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8233, Japan

Directors / Corporate Auditors / Executive Officers(As of June 28, 2017)

Major shareholders (Top ten companies)

Number of shares held (1,000 shares)

Investment (%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

18,061

11.9

Japan Trustee Services Bank, Ltd. (Trust Account)

12,871

8.5

Trust & Custody Services Bank, Ltd.
as trustee for the Mizuho Trust & Banking Co., Ltd.
Retirement Benefit Trust

7,633

5.0

The Norinchukin Bank

4,800

3.2

Nissan Chemical Industries, Ltd. Customer Shareholders Association

3,968

2.6

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

3,217

2.1

Representative Director, President & CEO

Kojiro Kinoshita

Sompo Japan Nipponkoa Insurance Inc.

2,380

1.6

Director, Senior Executive Vice President

Junichi Miyazaki

Ono Pharmaceutical Co., Ltd.

2,376

1.6

Director, Senior Managing Executive Officer

Hiroyoshi Fukuro

Nissan Chemical Industries, Ltd. Employee Shareholders Association

2,205

1.5

Director, Managing Executive Officer

Masataka Hatanaka

Japan Trustee Services Bank, Ltd. (Trust Account 5)

2,108

1.4

Katsuaki Miyaji
Hidenori Takishita(Notes) 1. Although the company holds 2,242,017 treasury shares, it is not included in the above list of major shareholders.
2. Investment percentages are calculated excluding treasury shares.

Takashi Honda
Outside Director

Tisato Kajiyama
Tadashi Ohe

Corporate Auditors

Yasuyuki Nakajima
Norihiro Suzuki
Shuichi Takemoto
Noriyuki Katayama

Managing Executive Officer

Takeshi Iwata

Executive Officers

Satoru Hamamoto

24.1

11.6

1.5

(¥)

4,000

(Thousands)
35,0002,500

30,000

2,000
1,500

Motoaki Ishikawa

1,000

Hajime Yoshida

11.4

4,500

Shinsuke Yagi

Toshiro Miyake

4.1

Share Price and Trading volume (April 2015 – March 2017)

3,000

Kazuhiko Ohrai

47.3

Overseas investors Individuals/Others Treasury shares* The company retired 2,000,000 of its 2,242,017 treasury shares on May 9, 2017.

Hiroshi Onitsuka

Hironori YoshidaNissan Chemical Industries, Ltd. Annual Report 2017

Percentage ofshare held (%)

3,500

Yuji Nishida

Other domestic
companies

Financial institutions Securities companies

Nobutomo Tsuruzoe

Hitoshi Suzuki

85

360,000,000
154,000,000
11,976

Total Number of Authorized Shares
Shares of Common Share Issued
Shareholders

25,00020,00015,00010,000

500
0

5,000
2015/
4

5

6

7

8

9

10

11

12

2016/
1

2

3

4

5

6

7

8

9

10

11

12

2017/
1

2

3

0

Nissan Chemical Industries, Ltd. Annual Report 201786Comparison with GRI G4 Sustainability Reporting Guidelines
General Standard Disclosures
Strategy and Analysis

Page with Information

G4-1
G4-2

P3-6 Interview with the President—

A statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and the organization’s strategy for addressing sustainability
A description of key impacts, risks, and opportunities

Organizational Profile
G4-3
Name of the organization
G4-4

Primary brands, products, and services

G4-5

G4-7

Location of the organization’s headquarters
Number of countries where the organization operates, and names of countries where either the organization has significant operations or that are specifically
relevant to the sustainability topics covered in the report
Nature of ownership and legal form

G4-8

Markets served

G4-6

G4-9

Scale of the organization

G4-10

Breakdown of employment

G4-11
G4-12

Percentage of total employees covered by collective bargaining agreements
The organization’s supply chain

G4-13

Significant changes regarding the organization’s size, structure, ownership, or its supply chain

P85 Corporate Profile
P19-22 Main ProductsP23-34 Business Overview
P85 Corporate Profile
P17-18 Non-Financial Highlights
P81-83 Our Network
P85 Corporate Profile
P15-16 Financial Highlights
P23-34 Business Overview
Annual securities reportP15-16 Financial Highlights
P17-18 Non-Financial Highlights
P81-83 Our Network
Annual securities reportP17-18 Non-Financial Highlights
Annual securities report
P61-64 Relationships with Employees—
P11-14 “Progress2030” and “Vista2021”
P84 Corporate History

Whether the Chair of the highest governance body is also an executive officer
Nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting the highest
governance body members
G4-41
Processes for the highest governance body to ensure conflicts of interest are avoided and managed
Highest Governance Body’s Role in Setting Purpose, Values, and Strategy

Corporate governance reportP36-37 Corporate GovernanceCorporate governance report
Corporate governance report

Highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or mission statements,
strategies, policies, and goals related to economic, environmental and social impacts
Highest Governance Body’s Competencies and Performance Evaluation

P36-37 Corporate GovernanceCorporate governance report

G4-39
G4-40

G4-42
G4-43

Measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics
Processes for evaluation of the highest governance body’s performance with respect to the governance of economic, environmental and social topics and actions
taken in response to the evaluation
Highest Governance Body’s Role in Risk Management

G4-44

G4-45

• Highest governance body’s role in the identification and management of economic, environmental and social impacts, risks, and opportunities• Whether stakeholder consultation is used to support the highest governance body’s identification and management of economic, environmental and social
impacts, risks, and opportunities

G4-46

Highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social topics

G4-47
Frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities
Highest Governance Body’s Role in Sustainability Reporting
G4-48

Highest committee or position that formally reviews and approves the organization’s sustainability report and ensures that all material Aspects are covered

Whether and how the precautionary approach or principle is addressed by the organization

G4-15

Externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses

G4-16

Memberships of associations and national or international advocacy organizations

P41-56 Responsible Care (RC) Activities
P9-10 SDGs and Nissan Chemical Initiatives
P41-44 Responsible Care Management
P41-44 Responsible Care Management
P55-56 Chemicals and Product Safety

Identified Material Aspects and Boundaries• Entities included in the organization’s consolidated financial statements or equivalent documents• Whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report• Process for defining the report content and the Aspect Boundaries
G4-18• How the organization has implemented the Reporting Principles for Defining Report Content
G4-19
List of all the material Aspects identified in the process for defining report content
G4-20
Aspect Boundary within the organization for each material Aspect
G4-21
Aspect Boundary outside the organization for each material Aspect
G4-22
Effect of any restatements of information provided in previous reports, and the reasons for such restatements
G4-23
Significant changes from previous reporting periods in the Scope and Aspect Boundaries
Stakeholder Engagement

P2 Editorial Policy
Annual securities report

G4-24
A list of stakeholder groups engaged by the organization
G4-25
Basis for identification and selection of stakeholders with whom to engage
G4-26
The organization’s approach to stakeholder engagement
G4-27
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns
Report ProfileP57-64 Communication with Society
P57-64 Communication with Society
P57-64 Communication with Society
P51-52 Biodiversity Conservation

G4-28
G4-29
G4-30
G4-31

P2 Editorial Policy
P2 Editorial Policy
P2 Editorial Policy
P2 Editorial Policy

G4-17

Reporting period for information provided
Date of most recent previous report
Reporting cycle
Contact point for questions regarding the report or its contents

GRI Content Index• ‘In accordance’ option the organization has chosen
G4-32• GRI Content Index for the chosen option• Reference to the External Assurance Report, if the report has been externally assured—
P41-44 Responsible Care Management————

Referred to GRI G4 (Core).
P87-90 Comparison with GRI G4 Sustainability Reporting Guidelines
No External Assurance

Assurance
G4-33• The organization’s policy and current practice with regard to seeking external assurance for the report• Scope and basis of any external assurance provided• Relationship between the organization and the assurance providers• Whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report—

Governance
Governance structure and its composition
G4-34

Governance structure of the organization and committees responsible for decision-making on economic, environmental and social impacts

G4-35

Process for delegating authority for economic, environmental and social topics from the highest governance body to senior executives and other employees
Whether the organization has appointed an executive-level position or positions with responsibility for economic, environmental and social topics, and whether
post holders report directly to the highest governance body
Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics, and if consultation isdelegated, to whom and any feedback processes to the highest governance body

G4-36
G4-37
G4-38

87

Composition of the highest governance body and its committees

Nissan Chemical Industries, Ltd. Annual Report 2017

P35 Promotion of CSR
P36-37 Corporate GovernanceCorporate governance report
P35 Promotion of CSR
P36-37 Corporate Governance
P59 Relationships with Investors
Corporate governance report
P35 Promotion of CSR
P36-37 Corporate GovernanceCorporate governance reportP36-37 Corporate Governance
P38 Compliance
P39 Risk Management
P41-44 Responsible Care Management
Corporate governance reportP36-37 Corporate GovernanceCorporate governance reportP36-37 Corporate Governance—Highest Governance Body’s Role in Evaluating Economic, Environmental and Social Performance
G4-49

Process for communicating critical concerns to the highest governance body

G4-50

Nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve themCommitments to External Initiatives
G4-14

Corporate governance reportP36-37 Corporate GovernanceCorporate governance report

P38 Compliance
P39 Risk Management
Corporate governance report
P38 Compliance
P39 Risk Management

Remuneration and Incentives
Remuneration policies for the highest governance body and senior executives and how performance criteria in the remuneration policy relate to the highest governancebody’s and senior executives’ economic, environmental and social objectives
G4-52
Process for determining remuneration
G4-53
How stakeholders’ views are sought and taken into account regarding remuneration
G4-54
Ratio of the annual total compensation for the organization’s highest-paid individual to the median annual total compensation for all employees
Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual to the median percentage increase in annual total compensation for all employees
G4-55
Ethics and Integrity
G4-51

G4-56

The organization’s values, principles, standards and norms of behavior

G4-57Internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to organizational integrity

Internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity
G4-58
Specific Standard Disclosures
DMA

Why the Aspect is material, impacts that make this Aspect material, how the organization manages the material Aspect or its impacts, and evaluation of the management approach

Economic
Economic Performance
Direct Economic Value Generated and Distributed
EC1
Financial implications and other risks and opportunities for the organization’s activities due to climate change
EC2
Coverage of the organization’s defined benefit plan obligations
EC3
Financial assistance received from the government
EC4Market Presence
Ratios of standard entry level wage compared to local minimum wage at significant locations of operation
EC5
Proportion of senior management hired from the local community at significant locations of operation
EC6
Indirect Economic Impacts
EC7

Development and impact of infrastructure investments and services supported

Significant indirect economic impacts
EC8
Procurement Practices

P36-37 Corporate GovernanceP36-37 Corporate GovernanceP36-37 Corporate Governance——P3-6 Interview with the President
P35 Promotion of CSR
P38 ComplianceP36-37 Corporate GovernanceCorporate governance report
P38 ComplianceP41-56 Responsible Care (RC) Activities

Annual securities report—
Annual securities report———
P51-52 Biodiversity Conservation
P60 Relationships with Society—

Proportion of spending on local suppliers at significant locations of operation
EC9
Environmental
Materials

—

EN1
EN2

Materials used by weight or volume
Percentage of materials used that are recycled input materials——

Energy
EN3
EN4
EN5
EN6
EN7
Water

Energy consumption within the organization
Energy consumption outside the organization
Energy intensity
Reduction of energy consumption
Reductions in energy requirements of products and services

P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
—

EN8
EN9

Total water withdrawal by source
Water sources significantly affected by withdrawal of waterP45-50 Environment Safety and Climate Change Strategy—

Nissan Chemical Industries, Ltd. Annual Report 2017

88Comparison with GRI G4 Sustainability Reporting Guidelines
General Standard Disclosures
Strategy and Analysis

Page with Information

G4-1
G4-2

P3-6 Interview with the President—

A statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and the organization’s strategy for addressing sustainability
A description of key impacts, risks, and opportunities

Organizational Profile
G4-3
Name of the organization
G4-4

Primary brands, products, and services

G4-5

G4-7

Location of the organization’s headquarters
Number of countries where the organization operates, and names of countries where either the organization has significant operations or that are specifically
relevant to the sustainability topics covered in the report
Nature of ownership and legal form

G4-8

Markets served

G4-6

G4-9

Scale of the organization

G4-10

Breakdown of employment

G4-11
G4-12

Percentage of total employees covered by collective bargaining agreements
The organization’s supply chain

G4-13

Significant changes regarding the organization’s size, structure, ownership, or its supply chain

P85 Corporate Profile
P19-22 Main ProductsP23-34 Business Overview
P85 Corporate Profile
P17-18 Non-Financial Highlights
P81-83 Our Network
P85 Corporate Profile
P15-16 Financial Highlights
P23-34 Business Overview
Annual securities reportP15-16 Financial Highlights
P17-18 Non-Financial Highlights
P81-83 Our Network
Annual securities reportP17-18 Non-Financial Highlights
Annual securities report
P61-64 Relationships with Employees—
P11-14 “Progress2030” and “Vista2021”
P84 Corporate History

Whether the Chair of the highest governance body is also an executive officer
Nomination and selection processes for the highest governance body and its committees, and the criteria used for nominating and selecting the highest
governance body members
G4-41
Processes for the highest governance body to ensure conflicts of interest are avoided and managed
Highest Governance Body’s Role in Setting Purpose, Values, and Strategy

Corporate governance reportP36-37 Corporate GovernanceCorporate governance report
Corporate governance report

Highest governance body’s and senior executives’ roles in the development, approval, and updating of the organization’s purpose, value or mission statements,
strategies, policies, and goals related to economic, environmental and social impacts
Highest Governance Body’s Competencies and Performance Evaluation

P36-37 Corporate GovernanceCorporate governance report

G4-39
G4-40

G4-42
G4-43

Measures taken to develop and enhance the highest governance body’s collective knowledge of economic, environmental and social topics
Processes for evaluation of the highest governance body’s performance with respect to the governance of economic, environmental and social topics and actions
taken in response to the evaluation
Highest Governance Body’s Role in Risk Management

G4-44

G4-45

• Highest governance body’s role in the identification and management of economic, environmental and social impacts, risks, and opportunities• Whether stakeholder consultation is used to support the highest governance body’s identification and management of economic, environmental and social
impacts, risks, and opportunities

G4-46

Highest governance body’s role in reviewing the effectiveness of the organization’s risk management processes for economic, environmental and social topics

G4-47
Frequency of the highest governance body’s review of economic, environmental and social impacts, risks, and opportunities
Highest Governance Body’s Role in Sustainability Reporting
G4-48

Highest committee or position that formally reviews and approves the organization’s sustainability report and ensures that all material Aspects are covered

Whether and how the precautionary approach or principle is addressed by the organization

G4-15

Externally developed economic, environmental and social charters, principles, or other initiatives to which the organization subscribes or which it endorses

G4-16

Memberships of associations and national or international advocacy organizations

P41-56 Responsible Care (RC) Activities
P9-10 SDGs and Nissan Chemical Initiatives
P41-44 Responsible Care Management
P41-44 Responsible Care Management
P55-56 Chemicals and Product Safety

Identified Material Aspects and Boundaries• Entities included in the organization’s consolidated financial statements or equivalent documents• Whether any entity included in the organization’s consolidated financial statements or equivalent documents is not covered by the report• Process for defining the report content and the Aspect Boundaries
G4-18• How the organization has implemented the Reporting Principles for Defining Report Content
G4-19
List of all the material Aspects identified in the process for defining report content
G4-20
Aspect Boundary within the organization for each material Aspect
G4-21
Aspect Boundary outside the organization for each material Aspect
G4-22
Effect of any restatements of information provided in previous reports, and the reasons for such restatements
G4-23
Significant changes from previous reporting periods in the Scope and Aspect Boundaries
Stakeholder Engagement

P2 Editorial Policy
Annual securities report

G4-24
A list of stakeholder groups engaged by the organization
G4-25
Basis for identification and selection of stakeholders with whom to engage
G4-26
The organization’s approach to stakeholder engagement
G4-27
Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns
Report ProfileP57-64 Communication with Society
P57-64 Communication with Society
P57-64 Communication with Society
P51-52 Biodiversity Conservation

G4-28
G4-29
G4-30
G4-31

P2 Editorial Policy
P2 Editorial Policy
P2 Editorial Policy
P2 Editorial Policy

G4-17

Reporting period for information provided
Date of most recent previous report
Reporting cycle
Contact point for questions regarding the report or its contents

GRI Content Index• ‘In accordance’ option the organization has chosen
G4-32• GRI Content Index for the chosen option• Reference to the External Assurance Report, if the report has been externally assured—
P41-44 Responsible Care Management————

Referred to GRI G4 (Core).
P87-90 Comparison with GRI G4 Sustainability Reporting Guidelines
No External Assurance

Assurance
G4-33• The organization’s policy and current practice with regard to seeking external assurance for the report• Scope and basis of any external assurance provided• Relationship between the organization and the assurance providers• Whether the highest governance body or senior executives are involved in seeking assurance for the organization’s sustainability report—

Governance
Governance structure and its composition
G4-34

Governance structure of the organization and committees responsible for decision-making on economic, environmental and social impacts

G4-35

Process for delegating authority for economic, environmental and social topics from the highest governance body to senior executives and other employees
Whether the organization has appointed an executive-level position or positions with responsibility for economic, environmental and social topics, and whether
post holders report directly to the highest governance body
Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics, and if consultation isdelegated, to whom and any feedback processes to the highest governance body

G4-36
G4-37
G4-38

87

Composition of the highest governance body and its committees

Nissan Chemical Industries, Ltd. Annual Report 2017

P35 Promotion of CSR
P36-37 Corporate GovernanceCorporate governance report
P35 Promotion of CSR
P36-37 Corporate Governance
P59 Relationships with Investors
Corporate governance report
P35 Promotion of CSR
P36-37 Corporate GovernanceCorporate governance reportP36-37 Corporate Governance
P38 Compliance
P39 Risk Management
P41-44 Responsible Care Management
Corporate governance reportP36-37 Corporate GovernanceCorporate governance reportP36-37 Corporate Governance—Highest Governance Body’s Role in Evaluating Economic, Environmental and Social Performance
G4-49

Process for communicating critical concerns to the highest governance body

G4-50

Nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve themCommitments to External Initiatives
G4-14

Corporate governance reportP36-37 Corporate GovernanceCorporate governance report

P38 Compliance
P39 Risk Management
Corporate governance report
P38 Compliance
P39 Risk Management

Remuneration and Incentives
Remuneration policies for the highest governance body and senior executives and how performance criteria in the remuneration policy relate to the highest governancebody’s and senior executives’ economic, environmental and social objectives
G4-52
Process for determining remuneration
G4-53
How stakeholders’ views are sought and taken into account regarding remuneration
G4-54
Ratio of the annual total compensation for the organization’s highest-paid individual to the median annual total compensation for all employees
Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual to the median percentage increase in annual total compensation for all employees
G4-55
Ethics and Integrity
G4-51

G4-56

The organization’s values, principles, standards and norms of behavior

G4-57Internal and external mechanisms for seeking advice on ethical and lawful behavior, and matters related to organizational integrity

Internal and external mechanisms for reporting concerns about unethical or unlawful behavior, and matters related to organizational integrity
G4-58
Specific Standard Disclosures
DMA

Why the Aspect is material, impacts that make this Aspect material, how the organization manages the material Aspect or its impacts, and evaluation of the management approach

Economic
Economic Performance
Direct Economic Value Generated and Distributed
EC1
Financial implications and other risks and opportunities for the organization’s activities due to climate change
EC2
Coverage of the organization’s defined benefit plan obligations
EC3
Financial assistance received from the government
EC4Market Presence
Ratios of standard entry level wage compared to local minimum wage at significant locations of operation
EC5
Proportion of senior management hired from the local community at significant locations of operation
EC6
Indirect Economic Impacts
EC7

Development and impact of infrastructure investments and services supported

Significant indirect economic impacts
EC8
Procurement Practices

P36-37 Corporate GovernanceP36-37 Corporate GovernanceP36-37 Corporate Governance——P3-6 Interview with the President
P35 Promotion of CSR
P38 ComplianceP36-37 Corporate GovernanceCorporate governance report
P38 ComplianceP41-56 Responsible Care (RC) Activities

Annual securities report—
Annual securities report———
P51-52 Biodiversity Conservation
P60 Relationships with Society—

Proportion of spending on local suppliers at significant locations of operation
EC9
Environmental
Materials

—

EN1
EN2

Materials used by weight or volume
Percentage of materials used that are recycled input materials——

Energy
EN3
EN4
EN5
EN6
EN7
Water

Energy consumption within the organization
Energy consumption outside the organization
Energy intensity
Reduction of energy consumption
Reductions in energy requirements of products and services

P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
—

EN8
EN9

Total water withdrawal by source
Water sources significantly affected by withdrawal of waterP45-50 Environment Safety and Climate Change Strategy—

Nissan Chemical Industries, Ltd. Annual Report 2017

88Comparison with GRI G4 Sustainability Reporting Guidelines
EN10
Percentage and total volume of water recycled and reused
Biodiversity—

EN11
Operational sites owned, leased, managed in areas of high biodiversity value
EN12
Significant impacts of activities, products, and services on biodiversity in areas of high biodiversity value
EN13
Habitats protected or restored
EN14
Total number of IUCN red list species and national conservation list species with habitats in areas affected by operations
EmissionsP51-52 Biodiversity Conservation—
P51-52 Biodiversity Conservation—

EN15
Direct greenhouse gas (GHG) emissions (Scope 1)
EN16
Energy indirect greenhouse gas (GHG) emissions (Scope 2)
EN17
Other indirect greenhouse gas (GHG) emissions (Scope 3)
EN18
Greenhouse gas (GHG) emissions intensity
EN19
Reduction of greenhouse gas (GHG) emissions
EN20
Emissions of ozone-depleting substances (ODS)
EN21NOx, SOx, and other significant air emissions
Effluents and Waste

P45-50 Environment Safety and Climate Change Strategy
CO2 emissions from energy use, CO2 emissions from non-energy use
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy—
P45-50 Environment Safety and Climate Change Strategy

EN22
EN23
EN24
EN25
EN26

P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
Not applicable——

Total water discharge by quality and destination
Total weight of waste by type and disposal method
Total number and volume of significant spills
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention AnnexⅠ,Ⅱ, Ⅲ, and Ⅷ, and percentage of transported waste shipped internationally
Water bodies and related habitats significantly affected by the organization’s discharges of water and runoff

Products and Services
EN27
EN28

Extent of impact mitigation of environmental impacts of products and services
Percentage of products sold and their packaging materials that are reclaimed

P19-22 Main Products
—

—

HR8

Total number of incidents of violations involving rights of indigenous peoples and actions taken
Assessment
HR9
Total number and percentage of operations that have been subject to human rights reviews or impact assessments
Supplier Human Rights Assessment

Not applicable

HR10
Percentage of new suppliers that were screened using human rights criteria
HR11
Significant negative human rights impacts in the supply chain and actions taken
Human Rights Grievance Mechanisms

—
—

HR12

Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms
Society
Local Communities

Not applicable

SO1
Percentage of operations with implemented local community engagement, impact assessments, and development programs
SO2
Operations with significant negative impacts on local communities
Anti-corruption—
Not applicable

SO3
Total number and percentage of operations assessed for risks related to corruption and the significant risks identified
SO4
Communication and training on anti-corruption policies and procedures
SO5
Confirmed incidents of corruption and actions taken
Public Policy—
P38 Compliance
Not applicable

SO6
Total value of political contributions
Anti-competitive Behavior—

SO7
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes
Compliance

Not applicable—Compliance
EN29
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

Not applicable

SO8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations
Supplier Assessment for Impacts on Society

Not applicable

Transport
EN30
Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce

P45-50 Environment Safety and Climate Change Strategy

SO9Percentage of new suppliers that were screened using criteria for impacts on society
SO10
Significant negative impacts on society in the supply chain and actions taken
Grievance Mechanisms for Impacts on Society

—
—

SO11
Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms
Product Responsibility
Customer Health and Safety

Not applicable

PR1
Percentage of significant product and service categories for which health and safety impacts are assessed for improvement
PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle
Product and Service LabelingP55-56 Chemicals and Product Safety
Not applicable

Overall
EN31
Total environmental protection expenditures and investments
Supplier Environmental Assessment

P45-50 Environment Safety and Climate Change Strategy

EN32
EN33

—
—

Percentage of new suppliers that were screened using environmental criteria
Significant negative environmental impacts in the supply chain and actions taken

Environmental Grievance Mechanisms
EN34
Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms

Not applicable

SocialLabor Practices and Decent Work
Employment
LA1
LA2
LA3

Total number and rates of new employee hires and employee turnover
Benefits provided to full-time employees that are not provided to temporary or part-time employees
Return to work and retention rates after parental leave

Labor/Management Relations
LA4
Minimum notice periods regarding operational changes
Occupational Health and Safety

P17-18 Non-Financial Highlights—
P17-18 Non-Financial Highlights—
P61-64 Relationships with Employees
P53-54 Safety and Disaster Prevention, Occupational Safety and Health—P61-64 Relationships with Employees

LA9
LA10
LA11

P61-64 Relationships with Employees
P61-64 Relationships with Employees
P61-64 Relationships with Employees

Average hours of training per year per employee
Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings
Percentage of employees receiving regular performance and career development reviews

Basic salary does not differ between women and men.

LA14
Percentage of new suppliers that were screened using labor practices criteria
LA15
Significant negative impacts for labor practices in the supply chain and actions taken
Labor Practices Grievance Mechanisms

—
—

LA16
Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms
Human Rights
Investment—

HR1
Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening
HR2
Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations
Non-discrimination

—
—

HR3
Total number of incidents of discrimination and corrective actions taken
Freedom of Association and Collective Bargaining

Not applicable

Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights
HR4Child Labor

Not applicable

Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the abolition of child labor

Forced or Compulsory Labor
Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor
HR6

Nissan Chemical Industries, Ltd. Annual Report 2017—
Not applicable—

PR6
Sale of banned or disputed products
PR7
Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications
Customer Privacy

Not applicableNot applicable

PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data
Compliance

Not applicablePR9

Not applicable

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services—

LA13
Ratio of basic salary and remuneration of women to men
Supplier Assessment for Labor Practices

HR5

Type of product and service information required by the organization’s procedures for product and service information and labeling, and percentage of significant
product and service categories subject to such information requirements
PR4
Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling
PR5
Results of surveys measuring customer satisfaction
Marketing Communications
PR3

LA5
Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs
LA6Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities
LA7
Workers with high incidence or high risk of diseases related to their occupation
LA8
Health and safety topics covered in formal agreements with trade unions
Training and Education

Diversity and Equal Opportunity
LA12
Composition of governance bodies and breakdown of employees per category
Equal Remuneration for Women and Men

89

Security Practices
HR7
Percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations
Indigenous Rights

Not applicableNot applicable

Nissan Chemical Industries, Ltd. Annual Report 201790

Comparison with GRI G4 Sustainability Reporting Guidelines
EN10
Percentage and total volume of water recycled and reused
Biodiversity—

EN11
Operational sites owned, leased, managed in areas of high biodiversity value
EN12
Significant impacts of activities, products, and services on biodiversity in areas of high biodiversity value
EN13
Habitats protected or restored
EN14
Total number of IUCN red list species and national conservation list species with habitats in areas affected by operations
EmissionsP51-52 Biodiversity Conservation—
P51-52 Biodiversity Conservation—

EN15
Direct greenhouse gas (GHG) emissions (Scope 1)
EN16
Energy indirect greenhouse gas (GHG) emissions (Scope 2)
EN17
Other indirect greenhouse gas (GHG) emissions (Scope 3)
EN18
Greenhouse gas (GHG) emissions intensity
EN19
Reduction of greenhouse gas (GHG) emissions
EN20
Emissions of ozone-depleting substances (ODS)
EN21NOx, SOx, and other significant air emissions
Effluents and Waste

P45-50 Environment Safety and Climate Change Strategy
CO2 emissions from energy use, CO2 emissions from non-energy use
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy—
P45-50 Environment Safety and Climate Change Strategy

EN22
EN23
EN24
EN25
EN26

P45-50 Environment Safety and Climate Change Strategy
P45-50 Environment Safety and Climate Change Strategy
Not applicable——

Total water discharge by quality and destination
Total weight of waste by type and disposal method
Total number and volume of significant spills
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention AnnexⅠ,Ⅱ, Ⅲ, and Ⅷ, and percentage of transported waste shipped internationally
Water bodies and related habitats significantly affected by the organization’s discharges of water and runoff

Products and Services
EN27
EN28

Extent of impact mitigation of environmental impacts of products and services
Percentage of products sold and their packaging materials that are reclaimed

P19-22 Main Products
—

—

HR8

Total number of incidents of violations involving rights of indigenous peoples and actions taken
Assessment
HR9
Total number and percentage of operations that have been subject to human rights reviews or impact assessments
Supplier Human Rights Assessment

Not applicable

HR10
Percentage of new suppliers that were screened using human rights criteria
HR11
Significant negative human rights impacts in the supply chain and actions taken
Human Rights Grievance Mechanisms

—
—

HR12

Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms
Society
Local Communities

Not applicable

SO1
Percentage of operations with implemented local community engagement, impact assessments, and development programs
SO2
Operations with significant negative impacts on local communities
Anti-corruption—
Not applicable

SO3
Total number and percentage of operations assessed for risks related to corruption and the significant risks identified
SO4
Communication and training on anti-corruption policies and procedures
SO5
Confirmed incidents of corruption and actions taken
Public Policy—
P38 Compliance
Not applicable

SO6
Total value of political contributions
Anti-competitive Behavior—

SO7
Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes
Compliance

Not applicable—Compliance
EN29
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations

Not applicable

SO8
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations
Supplier Assessment for Impacts on Society

Not applicable

Transport
EN30
Significant environmental impacts of transporting products and other goods and materials for the organization’s operations, and transporting members of the workforce

P45-50 Environment Safety and Climate Change Strategy

SO9Percentage of new suppliers that were screened using criteria for impacts on society
SO10
Significant negative impacts on society in the supply chain and actions taken
Grievance Mechanisms for Impacts on Society

—
—

SO11
Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms
Product Responsibility
Customer Health and Safety

Not applicable

PR1
Percentage of significant product and service categories for which health and safety impacts are assessed for improvement
PR2
Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle
Product and Service LabelingP55-56 Chemicals and Product Safety
Not applicable

Overall
EN31
Total environmental protection expenditures and investments
Supplier Environmental Assessment

P45-50 Environment Safety and Climate Change Strategy

EN32
EN33

—
—

Percentage of new suppliers that were screened using environmental criteria
Significant negative environmental impacts in the supply chain and actions taken

Environmental Grievance Mechanisms
EN34
Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms

Not applicable

SocialLabor Practices and Decent Work
Employment
LA1
LA2
LA3

Total number and rates of new employee hires and employee turnover
Benefits provided to full-time employees that are not provided to temporary or part-time employees
Return to work and retention rates after parental leave

Labor/Management Relations
LA4
Minimum notice periods regarding operational changes
Occupational Health and Safety

P17-18 Non-Financial Highlights—
P17-18 Non-Financial Highlights—
P61-64 Relationships with Employees
P53-54 Safety and Disaster Prevention, Occupational Safety and Health—P61-64 Relationships with Employees

LA9
LA10
LA11

P61-64 Relationships with Employees
P61-64 Relationships with Employees
P61-64 Relationships with Employees

Average hours of training per year per employee
Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings
Percentage of employees receiving regular performance and career development reviews

Basic salary does not differ between women and men.

LA14
Percentage of new suppliers that were screened using labor practices criteria
LA15
Significant negative impacts for labor practices in the supply chain and actions taken
Labor Practices Grievance Mechanisms

—
—

LA16
Number of grievances about labor practices filed, addressed, and resolved through formal grievance mechanisms
Human Rights
Investment—

HR1
Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening
HR2
Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations
Non-discrimination

—
—

HR3
Total number of incidents of discrimination and corrective actions taken
Freedom of Association and Collective Bargaining

Not applicable

Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights
HR4Child Labor

Not applicable

Operations and suppliers identified as having significant risk for incidents of child labor, and measures taken to contribute to the abolition of child labor

Forced or Compulsory Labor
Operations and suppliers identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of all forms of forced or compulsory labor
HR6

Nissan Chemical Industries, Ltd. Annual Report 2017—
Not applicable—

PR6
Sale of banned or disputed products
PR7
Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications
Customer Privacy

Not applicableNot applicable

PR8
Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data
Compliance

Not applicablePR9

Not applicable

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services—

LA13
Ratio of basic salary and remuneration of women to men
Supplier Assessment for Labor Practices

HR5

Type of product and service information required by the organization’s procedures for product and service information and labeling, and percentage of significant
product and service categories subject to such information requirements
PR4
Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling
PR5
Results of surveys measuring customer satisfaction
Marketing Communications
PR3

LA5
Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs
LA6Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities
LA7
Workers with high incidence or high risk of diseases related to their occupation
LA8
Health and safety topics covered in formal agreements with trade unions
Training and Education

Diversity and Equal Opportunity
LA12
Composition of governance bodies and breakdown of employees per category
Equal Remuneration for Women and Men

89

Security Practices
HR7
Percentage of security personnel trained in the organization’s human rights policies or procedures that are relevant to operations
Indigenous Rights

Not applicableNot applicable

Nissan Chemical Industries, Ltd. Annual Report 2017

90

NISSAN CHEMICAL ANNUAL REPORT 2017

ANNUAL REPORT 2017
For the year ended M arch 31, 2017

NISSAN CHEMICAL INDUSTRIES, LTD.
Printed in Japan