Annual Report 2012
Year ended March 31, 2012

Creating
Shared Value
Enriching society through a new management partnershipformed between the Chairman and President

Utilizing our revolutionary
development capabilities,
we will create new, innovative
products that improve living
environments.
Growth3Gs
GlobalGroup

The 3Gs of sustainable growthContents
2 Chairman’s Message / Board of Directors

11 Financial and Non-Financial Highlights

22 Financial Section

4 Interview with the President

12 At a Glance

47 Investor Information

8 Profile: Shared Value

14 Operational Review

Forward-Looking Statements
This annual report contains forward-looking statements regarding S.T. CORPORATION’s future plans, strategies, and performance. Such forward-looking statements
are based on information available as of the issuance of this annual report. Please note that forward-looking statements may differ greatly from the Company’s actual
performance due to the economic situation, business environment, market demand, and foreign currency exchange rate fluctuations in the future.
Note: Fiscal years in this annual report are based on S.T. CORPORATION’s fiscal year ending March 31.

1Chairman’s Message / Board of Directors

2

Targeting Further Expansion
Based on the 3Gs
In fiscal 2012, the year ended March 31, 2012,of tasks that the Company’s executive management

we overcame the adversities presented by the damage

must undertake as industry reorganization andsustained to our Fukushima Plant during the Great East

globalization continue to accelerate.

Japan Earthquake, which occurred on March 11, 2011, andFurther, the new system will enable me to assume

were once again able to devote our full attention to boosting

the role of Chief Executive Officer, who is responsible forsales. However, while we succeeded in raising sales, income

the management of the S.T. CORPORATION Group,

was down due to the reduced performances of affiliates.

corporate communication, and capital policies.

In April 2012, the Company began operating in

Meanwhile, President Yoneda will act as Chief Operating

accordance with a new management system. Under this

Officer and accept responsibility for managing S.T. CORPO-

system, I will manage S.T. CORPORATION together withRATION itself. Going forward, we will strive to further satisfy

President Yukimasa Yoneda. This partnership will enableconsumers and advance management reforms based

us to flexibly and quickly perform the increasing number

on the 3Gs of expansion: Growth, Global, and Group.

August 2012

Takashi Suzuki
Chairman of the Board, Chief Executive Officer

Contributing to Sustainable Growth under
the Company-with-Committees System
As members of S.T. CORPORATION’s Board of Directors, we pledge to utilize our specialized backgrounds to ensure
the proper monitoring of management and support the Company in realizing its management philosophy.

Takashi Suzuki
Chairman of
the Board of Directors

Naoto Onzo
Outside Director

Yoshiko Shirata
Outside Director

Kanichi Suzuki
Outside Director

Fuminobu Aruga
Outside Director

Chieko Matsuda
Outside Director

Yukimasa Yoneda
Director

Kanzo Kobayashi
Director

Hirohide Shimada
Director

Takako Suzuki
Director

3

Interview with the President

4Instituting a New Management System toTarget Expansion Based on the 3Gs
Greetings, my name is Yukimasa Yoneda, and I assumed the position of President and Chief
Operating Officer of S.T. CORPORATION on April 1, 2012. Together with the Chairman of the Board,
Chief Executive Officer Takashi Suzuki, we will pursue expansion of the Group based on the 3Gs.
I hope you will support us throughout this endeavor.

Q
A

What is your plan for realizing a new start for S.T. CORPORATION?

Targeting the establishment of a more profitable business structure, we will advanceCompanywide “S.T. Reformation” measures and expand our overseas operations.

Establishment of a More Profitable Business Structure

Companywide “S.T. Reformation” Measures

We have always believed that household products have

In 2011, we began to implement sales innovation measures, andthe important role of improving the daily lifestyles of consumers

in 2012 we will step up our reformation measures and expand

and making them healthier and more comfortable for boththese initiatives across the entire Company. As part of thisthe mind and body. We have continued to create and provide

process, the sales division will revise their sales strategies,

products that serve this purpose in accordance with ourand nonsales divisions will develop systems to support sales“Refreshing the Air” corporate slogan. As a result of thisdivisions as strategic units of the Company. Further, executive

commitment, our Air Care product Shoshu-Riki has gained

officers will push forward with Companywide organizational

immeasurable favor from repeat customers and has thus

reforms and medium- to long-term management reforms.

grown into a mega brand that supports the entire Company.
Going forward, we will remain vigilant in our quest to commu-

Expansion of Overseas Operations

nicate our ideals and value-added factors through our products

To overhaul systems related to our overseas operations andand services in hopes of winning even greater support for theenhance our ability to respond to rapidly changing conditions

Company and brand. On the management side of operations,in the global economy and international markets, we have

we will thoroughly minimize all unnecessary, irregular, andreorganized overseas operations into three divisions based onwasteful activities, as we create our corporate consciousness

key regions—ASEAN countries, East Asia, and North Ameri-

focused on sustainable cost management.

ca and Europe. Moving forward, we will systematically andeffectively expand overseas operations in accordance withstrategies formulated in consideration of these three regions.

5Interview with the President

Q

I understand you have a very unique background. Could you please explainA

Based on my experience, I will endeavor to address the issues faced

this background in your own words?

by S.T. CORPORATION from an outside perspective.

Before coming to S.T. CORPORATION, I worked in

the financial aspects of its business. While I continue

the retail field, where I was in direct contact withto build on the Company’s strengths, I intend to

consumers—a change from my previous backgroundaddress this challenge by utilizing my knowledge andin expanding international business at the worldwide

experience in communications with customers andtrading companies and manufacturers. During my time

stringent cost management acquired during my retailin the retail field, I had the opportunity to be party todays to assist the Company establish a more

stringent cost-management efforts that felt very muchvital and profitable businesslike walking on thin ice. Even during this period, I had

structure. I will also draw on

dealings with S.T. CORPORATION. The Company’s

my experience in international

slogan of “Refreshing the Air” and its unique “enveloping

business to rapidly increase

deodorizing technologies” left a particularly strong

the Company’s overseas

impression on me, and even today I continue to carrysales, which still remain at

the mission statement card I received then.

a low level of 3.5% of total

From an outside perspective, I see S.T. CORPORATION’s main challenge is with the management ofQA6

net sales.
Mission Statement Card

Would please explain the structural reorganization that was conducted in April 2012?

I am planning management process reforms in three stages: organizational reform, businessprocess reform, and mindset reform. April’s structural reorganization was an organizational
reform initiative geared toward separating divisions based on functions.

I am basing my management process reforms on theand mindset reform. In April of this year, the first year

three-step concept of “three years, three months, andof reforms, we reorganized the Company’s structure,

three stages.” Positioning the first year of these reforms

separating divisions based on functions and paving

as a year for laying foundations, the second as a year

the way for future management reforms. Going forward,

for implementing reforms, and the third as a year for

we will implement business process and mindset

realizing results, I intend to advance reforms in threereforms in conjunction with the Companywide “S.T.

stages: organizational reform, business process reform,

Reformation” measures already under way.

Q

In closing, is there anything you would
like to say to your stakeholders?

“We want to refresh the air in your rooms and elsewhere in your lives. We want to refresh the air,Aor in other words breathe new life into our society and Japan.” This is part of S.T. CORPORATION’s
corporate slogan and also embodies the very essence of the Company. Guided by this principle,
we will endeavor to meet the expectations of our stakeholders and maintain their trust,and I hope we can continue to be worthy of their favor.

In 2006, S.T. CORPORATION used the milestone of its 60th

S.T. CORPORATION is committed to meeting the expecta-

anniversary as an opportunity to formulate its new corporate

tions of its stakeholders by raising corporate value and main-slogan: “Refreshing the Air.” This slogan embodies the Compa-

taining their trust by ensuring the impartiality and transparency

ny’s desire to be more creative and innovative in all its businessof management. To these ends, we will raise corporate value

activities and “refresh the air,” or in other words breathe new

by addressing economic, social, and environmental concerns

life into society. As part of these efforts, 2011 marked the launchwhile employing the Company-with-Committees system ofof our Air Counter household radiation detector, which relieves

corporate governance described in the Companies Act of Japan

consumers’ concerns regarding radiation, and the start of theto ensure the impartiality and transparency of management.

Clear Forest business, which represents a new brand of tech-

In closing, I would like to ask

nology created by Japan Aroma Laboratory Co., Ltd., of thefor the continued support of all

S.T. CORPORATION Group. In these ways, we are helping toour stakeholders.

address social and environmental concerns.
Air Counter household radiation detectors

August 2012

Yukimasa Yoneda
President and Chief Operating Officer

Profile1950 Born on October 22, in Fukuoka Prefecture(currently 61 years of age)

Organizational
Structure
by Function

CEO
SuzukiGroup Management
Corporate
Communication

President, COO
Yoneda1976 Joined ITOCHU Corporation

Capital Policies

2003 President and Representative Director of HAC Kimisawa Co., Ltd.
(currently CFS Corporation)2008 Director and Managing Executive Officer of PIGEON CORPORATION
2009 President of SUGI PHARMACY CO., LTD.
2009 Representative Director of SUGI HOLDINGS CO., LTD.
2011 Advisor to the Company
2012 President and Chief Operating Officer of the Company

Manufacturing
DivisionInternational
Business
Division

Sales
Division

Operating Staff Divisions

GlobalMarketing
Division

Corporate
Management
Division

Strategic Staff Divisions

7

Profile: Shared Value

S.T. CORPORATION’s History
Developing markets that enrich lives

1950

1960

1970

1971
1960

Household Gloves

1946

Mothproofing Agents

Production begins of household gloves that protect handsfrom harsh cleaning agents.

Deodorizers
and Air Fresheners
Production commences of
deodorizers and air fresheners
that contribute to the sense ofluxury during Japan’s periodof rapid economic growth.

S.T. Chemical Plant isfounded and starts production of
mothproofing agents to protect
clothing from moth larvae.

Shift from sanitation toaromatic air fresheners
Post-warreconstruction period

8

Rapid economic growth period

Stable growth period

1980

1981

Dehumidifiers
Production startsof Japan’s first
dehumidifiers that
relieve the humidity
in homes as they
increasingly sufferfrom a lack ofventilation.

1990

2000

2010

1988

PopularMothproofing Agent
Mushuda, S.T. CORPORATION’s
immensely popular mothproofing
agent, is launched.

2010
2000

New Fragrant
Mothproofing Agent

Shoshu-Riki, a high-performing
deodorizer brand that boasts
sales of over ¥10 billion, andDashu-Tan, a refrigerator air
freshener, are launched.

Demand shifts from deodorizers
to high-quality aromatic products;
S.T. CORPORATION begins
providing the new FragrantMushuda mothproofing agent
and the My Aroma brand of air
fresheners accordingly.

Refrigerator
Deodorizers

Shift from aromatic
air fresheners to deodorizers

Shift to high-quality
aromatic products
Maturity period

9

3Gs
2011
Household Radiation Detector
The Air Counter household radiation
detector is launched, and the Clear
Forest environmental pollutant
cleaning business iscommenced.

In 2011, S.T. CORPORATION
created a market that addresses
social and environmental concerns.
Through operations in this market,
we will enrich lifestyles and society.

Our Sustainability Is Creating Shared Value through Our Business
Markets are changing. S.T. CORPORATION is a company that achieves growth by creating new markets in response
to market changes. To the Company, the risks brought about by market changes represent business opportunities. Following
the Great East Japan Earthquake, which occurred on March 11, 2011, markets have developed with greater importance placedon social and environmental issues rather than on economic concerns. Against this backdrop, S.T. CORPORATION has begun
conducting strategic CSR initiatives that entail leveraging its strengths in revolutionizing sundry items to create shared value
with all its current and future stakeholders in a manner that addresses social and environmental issues. We believe this will
enable S.T. CORPORATION to achieve sustainable growth going forward.

Four Main Themes
Theme

Key initiatives

Adapting to andresponding to social
needs• Brand image creation and enhancement

Addressing social andenvironmental issues• Clear Forest

Assisting community
development

Increasing
responsiveness

Developing systems to
support main themes

10• Environmental impact reduction(Eco-Ship Mark)• Air Counter• Campaign to support musicals• Hands-on education programs /Earthquake-response education programs• Diversity promotion• Globe-spanning training programs• Promotion of women to officers• Corporate governance(Company-with-Committees system)

AIR
Care

CLOTH
Care

HUMIDITY
Care

HAND
Care

THERMAL
Care

HOME
Care

Financial and Non-Financial Highlights
S.T. CORPORATION and consolidated subsidiaries
Years ended March 31, 2012 and 2011

millions of yen(except per share data)

2012

thousands of
U.S. dollars (Note)

2012

2011

For the Year:¥46,354¥43,580$564,335

1,751

2,114

21,319

76

786

920

Total assets

30,28730,011

368,723

Total net assets

19,701

19,972

239,852

3.48¥ 36.03$ 0.04

Cash dividends

22.00

22.00

0.26

Net assets

884.45893.74

10.77

Net sales
Operating income
Net income
At Year-End:Per Share (yen and U.S. dollars):¥

Net income

19,14419,02919,966

19,972

6.1

5.8

5.9

4.0

0.4

76

786

1,119

1,076

1,295

46,354

43,580

millions of yen / %43,546

Total Net Assets / ROE

millions of yen

44,879Net Income

millions of yen

47,006Net Sales

08

09

10

11

12

08

09

10

11

12

19,701

Note: Figures have been translated into U.S. dollars at ¥82.14=U.S.$1.00, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market on March 31, 2012.

08

09

Total Net Assets

10

11

12

ROE

Number of Musical Participants

Number of Officers /Ratio of Female Directors

peoplepeoplepeople / %

08

09

10

11

12

08

09

10

11

12

8
7

8
7

19,822

20,90321,083

20,87020,188

647

630

611

619

607

10

Number of Employees (Consolidated)

0.0

12.5

08

09

Number of Officers

30.0

28.6

25.0

10

11

12

Ratio of Female Directors

11

At a Glance

As a manufacturerof niche sundry
items, we are
addressing socialand environmental
issues throughour businesses.
S.T. CORPORATION has continued
to develop new markets in response to
the growth opportunities presented
by changes in consumer needs andvalues. These markets have since
become fixtures in society represented
by our strong, unique niche brands.
Currently, we are working to createmuch-needed markets that addresssocial and environmental issues
by leveraging our revolutionary
product development capabilities.

AIR Care

CLOTH Care

HUMIDITY Care

HAND Care

THERMAL Care

HOME CareOVERSEAS
Promoting Capital andBusiness Alliances

Developing New Businesses

Participation in
Community Development

Corporate Governance12

: Four Priority Themes
Strategic CSR（Shared Value）

Market Share and Rank (Japan)
Deodorizers and
Air Fresheners

Refrigerator
Deodorizers

27.2%

65.5%

(Market Share: No. 2)

Sales Results for FY 2012 (Year-on Year Change)

43%(Market Share: No. 1)

Mothproofing
Agents

45.6%

¥

34.0%

(Market Share: No. 1)

Household
Gloves

24.0%

20.6%

Assistingcommunity
development

Increasing
responsiveness

●

●

●

+6.1%

●

million

20%

¥

9,070

–1.3%

●

5%

¥

2,530

–5.8%

●

●

●

8%

¥

3,812

+5.2%

●

●

●

16%

¥

7,234

+9.2%

●

●

●

8%

¥

3,788 +41.0%●(Market Share: No. 2)

Disposable
Warmers

Addressing
social andenvironmental
issues19,920(Market Share: No. 1)

Dehumidifiers

Adapting to andresponding
to social needs(Market Share: No. 2)●

millionmillionmillionmillion●●millionRatio of overseas sales to total net sales: 3.5%;
bolster global capabilities as an additional driver of growth●

S.T. CORPORATION, FUMAKILLA LIMITED, and NS FaFa Japan Co., Ltd., arecooperating to allow all parties to mutually supplement their operations and to
facilitate the development and improve the profitability of the Group.

●

Clear Forest business:
Working with government agencies and local communities to rejuvenate forests
and the forestry industry and remove environmental pollutants●●

Hosting and organizing original musicals;
providing disaster relief and support

●

●

●

●

Overseeing the validity of management’s efforts to carry out its responsibilities and tasks while
supporting stable corporate growth in the context of the Company’s corporate philosophy andbasic management policies
Note: Market share data source: S.T. CORPORATION

13

Operational Review
Year-round-use products in the Air Care category include air fresheners andrefrigerator deodorizers. This category accounts for 43% of the Company’s
net sales and serves a market with a scale of approximately ¥55.3 billion. We
have high expectations for future growth in this category.

AIR Care(Deodorizers and Air Fresheners)

Shoshu-Riki

My Aroma
CoffretDashu-Tan(Refrigerator deodorizer)

product that was launched in August 2011.

totaling over ¥10.0 billion, and several

In fiscal 2013, we will continue to pro-

09

10

11

19,920

Shoshu-Riki, which has recorded sales

18,767

tions from Shoshu-Riki Pukupon, a

19,573commercials as well as sales contribu-

Products in this category include

19,789Strengths

20,717

Net Sales
millions of yen

08

12other unique and strong brands.

pose new applications for our products

Overview and Future Strategies

and provide high-quality fragrances

Net sales were up thanks to higher

with the goal of creating and expanding

sales of Shoshu-Riki following the

new demand.

attention it garnered through TV

The mothproofing agents marketed in the Cloth Care category protect offseason clothing from moth larvae while clothes are being stored. This category
accounts for 20% of the Company’s net sales. The scale of the market for
the Cloth Care category remains consistent at approximately ¥25.0 billion.

CLOTH Care
(Mothproofing Agents)

MushudaMushuda(Cover style)Fragrant Mushuda

Neopara Ace

09

10

11

9,070

Great East Japan Earthquake.

9,193This category is home to Mushuda, S.T.
9,413

as usual in spring 2011 following the

9,912

Strengths

millions of yen

10,113

Net Sales

08

14

Shoshu-Plug
Autospray

12

CORPORATION’s immensely popular

In fiscal 2013, we will develop sales

mothproofing agent that has earned anof products for new storage styles as

unshakable reputation in the market.

well as fragrant mothproofing agents

Overview and Future Strategies

while educating consumers that do not

Net sales in this category declined due tocurrently use mothproofing agents

our inability to undertake sales promotions

about the benefits of these products.

HUMIDITY Care
(Dehumidifiers)

Dehumidifiers are a type of product unique to Japan, which experiences
high levels of humidity. We have continued to lead the market that the Humidity
Care category serves since we created it. The scale of the market for thiscategory holds stable at approximately ¥9.5 billion and is characterized by
the difficulty among participants to differentiate their products.

Drypet Skitto

DrypetCompact

Drypet(Sheet type)

Bincho-Tan Drypet(Shoe cupboards)

pet products, net sales were down due

brands, and Bincho-Tan Drypet, whichto poor sales of other products.

2,530

pet, one of the Company’s top-selling
2,686

Despite solid sales of sheet-type Dry-

2,930

Overview and Future Strategies

Products in this category include Dry-

2,950

Strengths

millions of yen

2,597

Net Sales

possesses both dehumidifying anddeodorizing properties.

In fiscal 2013, we will work to expand
the market by providing new high-valueadded products.

08

09

10

11

12

In the Hand Care category, we provide household gloves that protect
the hands of users when doing housework, washing cars, or gardening.
The scale of the market for this category is currently approximately ¥11.0
billion and is showing a trend toward expansion.

HAND Care(Gloves)

Family(Fingertip-reinforced)

Family(Containing hyaluronic acid)

FamilyStylinglove

Family(Long type)line of household gloves as well as a

to a rise in sales associated with post-

number of products with added value,earthquake reconstruction demand.

such as gloves with reinforced finger-

In fiscal 2013, we will strengthentips or those made of compounds thatand cultivate our brands while aiming

do not irritate hands.

to create and expand new demand.

08

09

10

11

3,812

Net sales in this category were up thanks

3,625This category houses our Family brand

3,311

Overview and Future Strategies

3,209

Strengths

millions of yen

3,548

Net Sales

1215

Operational Review

The Thermal Care category controls sales floors in coordination with mothproofing agents through the provision of winter-use products and those thatwarm users’ hands and feet. The scale of the market for this category isapproximately ¥43.0 billion. This market is heavily impacted by the weather.

THERMAL Care
(Disposable Warmers)

Haru-Onpacks(Adhesive type)

Onpacks(Non-adhesive type)Haru-Onpacks(Adhesive type for socks)

Medical Jeen

concern for reducing electricity usage

products, which we supply through an

during the winter due to the influences

alliance with this company, were addedof the earthquake.

to this category’s lineup in 2003.

5,279

5,386

7,234

the exceptionally cold winter andMycoal Co., Ltd.’s Onpacks brand
6,624

Strengths

millions of yen

5,860

Net Sales

In fiscal 2013, we will strengthen

Overview and Future Strategies

and cultivate our brands while aiming to

Net sales in this category increased

create and expand new demand.

as a result of higher demand following
08

09

10

11

12

In the Home Care category, we provide niche cleaner products andhousehold radiation detectors as well as new products that we are currently
trying to cultivate.

HOME Care(Cleaners and Other Products)

Ultra-Powers
Washing Tub Cleaner

Kome-Touban

Ohisama no Sentaku(Sunlight-activatedshoe cleaner)

Air Counter_S(Household radiation
detector)

This category includes several unique

Net sales were up as a result ofniche products, such as Ultra-Powers

the sales contributions from the Air

Washing Tub Cleaner and Kome-Touban,

Counter household radiation detector

which protects stored rice from insect

and strong sales of insect-repelling

infestation, as well sunlight-activated

Kome-Touban for protecting rice.

2,686

3,040

3,788

Overview and Future Strategies

3,633

Strengths

millions of yen
4,171

Net Sales

Ohisama no Sentaku shoe cleaner andOhisama no Shoshu spray for futons.
08

16

Automatic electricallypowered insect
repeller

09

10

11

12

In fiscal 2013, we will boldly advance
operations in new markets.

Overseas businesses play a key role in advancing initiatives based on
the 3Gs of expansion. At present, the overseas sales ratio is only 3.5%;
however, in fiscal 2013, we will reform organizational structures related tooverseas business and expand operations based on regional strategies.

OVERSEAS

Overview and Future Strategies

millions of yen / %Despite the sluggish global economy

the benefits of this alliance in otherand strong yen, sales of gloves and air

ways as well.

2,593

Net Sales

08

09

Overseas Sales

4.0

10

1,606

4.4

1,645

5.5

1,750

1,997

fresheners increased in Europe. Mean-

3.8

3.5

11

12

Overseas Sales Ratio

Looking ahead, we will break a newwhile, sales in Asia and the United

start on the global stage by reorganizing

States have bottomed out and were in

operations into three divisions based online with the previous fiscal year. Re-

key regions—ASEAN countries, Eastgarding production, we will utilize allied

Asia, and North America and Europe—company FUMAKILLA LIMITED’s over-in consideration of trends in the global

seas production sites and fully leverage

economy and international markets.

Country South Korea



Company Name

Principal Business Activities

Aekyung S.T. Co., Ltd.

Sale of deodorizers and air fresheners / household goods

S.T. Korea Corporation

Production of deodorizers and air fresheners / dehumidifiers Taiwan

Family Glove Co., Ltd. (Taiwan)*1

Production and sale of gloves

 Thailand

Shaldan (Thailand) Co., Ltd.
Family Glove Co., Ltd. (Thailand)*

Production and sale of deodorizers and air fresheners
2

Production and sale of gloves Vietnam

Family Glove Co., Ltd. (Vietnam)

Production of gloves

 Philippines

Shaldan (Philippines) Inc.

Production and sale of mothproofing agents / deodorizers and air fresheners*1. ISO14001/9001-certified plants*2. ISO9001-certified plants

17

Operational Review

Promoting Capitaland Business Alliances

Taking full advantage of the complementary nature of the operating domainsof S.T. CORPORATION, FUMAKILLA LIMITED, and NS FaFa Japan Co., Ltd.,
efforts are being made to ensure mutual growth and development as well as
increased profitability.
Details of the Business Alliance
Development: Joint research and development utilizing the research technologies
and know-how of all three companies
Sales and marketing: Mutual use of each company’s sales and marketing channels
Procurement: Mutual use of each company’s manufacturing facilities and sharing
and standardization of materials
Logistics: Mutual use of logistics infrastructure

S.T. CORPORATIONFUMAKILLA LIMITED

Business
Details

Production and sale of deodorizers and Production and sale of pesticides /air fresheners / mothproofing agents /household products / gardening
gloves / dehumidifiers and related products supplies and related products

Production and sale of fabricdetergents / fabric softeners / personalcare products

Strengths• Boasts numerous leading brands• Outstanding marketing andsales capabilities• Strong expertise in developing
environmentally conscious products• Boasts numerous year-round-use
products

Developing
New Businesses(Clear Forest)• Excellent research anddevelopment capabilities• Ratio of overseas sales tototal sales: 20%

The Clear Forest business represents a new brand of technology produced
together with the government and the community that helps reinvigorate forests and forestry businesses while removing environmental pollutants. Thisbusiness also contributes to the creation of employment opportunities.
Three elements of the technology

Four effects of environmental• Forest land waste material

pollutant cleanser

removal system• Extracting equipment• Cleanser for environmental
pollutants

18

NS FaFa Japan Co., Ltd.

• Reduction of air pollution• Antioxidant function• Elimination of odors• Forest bathing effect

Forests cover 66% of Japan, and of

To address this problem, Japan

start of the new business. The cleanser

this amount 40% are plantations.

Aroma Laboratory Co., Ltd., of the S.T.

we have created reduces air-borne pol-Periodic thinning is required for planta-

CORPORATION Group, has beenlutants and can prevent bacterial andtions, but issues have arisen with theworking in cooperation with the Forestry

viral infections. Also, by clearing tree

large amounts of tree trimmings,

and Forest Products Research Institutetrimmings at plantations, we help raise

by-products of the thinning process,to create an environmental pollutant

healthy forests and contribute to thebeing abandoned and not undergoingcleanser using such abandoned tree

forest’s ability to absorb carbon dioxide.

proper disposal processes.

trimmings. This venture marked theParticipation in
Community Development

Since 1998, S.T. CORPORATION has continued to hold a series of musicals
starring children from across Japan to support education and the arts.

(Musicals)

Audition

Rehearsal camp event

Employee management

Actors in these musical performances—periodically. Since tickets are not sold,people who have become members ofAnne of Green Gables in the “Heartbeat

these performances are held on an

this “tour,” including the staff and castof 20,000 People Tour”—are selected

invitation-only basis. Embodied within

as well as audiences.

from local children participating in open

these musicals is S.T. CORPORATION’s

auditions in eight major cities acrossdesire to share a feeling of passion andat these performances surpassed

Japan, and performances are held

joy among the more than 20,000

210,000 people.

Participation in
Community Development(Air Counter and Disaster Relief)

In 2011, the cumulative total of guests

Following the Great East Japan Earthquake, which occurred on March 11, 2011,a serious incident occurred at the Tokyo Electric Power Company, Incorporated’s
nuclear power station. In response to this incident, we developed household
radiation detectors to help relieve consumers’ concerns regarding radiation.

Air Counter(Household radiation
detector)

Air Counter_S(Household radiation
detector)

Air Counter EX(Household radiation
detector)

The household radiation detectors
come packaged with a booklet
that provides users with accurate
facts regarding radiation, thus
helping dispel the concerns
fostered by the media and unfounded sources of information.

Under the guidance of Professor

startling, and we quickly realized its

in Fukushima Prefecture, we were able

Masahiro Fukushi, of Tokyo Metropolitan

potential for helping to address social

to create new employment opportunities

University, we were able to successfullyand environmental concerns. In thein the earthquake-stricken region.

develop the Air Counter household

period from October 20, 2011, to June 30,

At the same time, we are working together

radiation detector, which hit the market

2012, we sold approximately 260,000

with the government and educationalroughly six months after the earthquake.

units from this series.

institutions to provide instruction on the

The response to this product was

By contracting production to a company

proper use of these products.

19

Operational Review

system to the current committee-baseda part of efforts to maintain a soundsystem. In shifting to this system, themanagement monitoring and oversight

three Nomination, Audit, and Compen-function, steps are taken to put in placesation committees were establisheda mutual checks-and-balance system

within the Board of Directors. Eachamong executive officers and to monitor

Corporate Governance Policy

Committee is comprised of a majority

the execution of business by executive

S.T. CORPORATION aims to live up to theof outside directors. As the fundamental

officers through directors, the Board of

expectations of its shareholders and otherdecision-making body, the Board of

Directors, and the Audit Committee.

investors, its customers and suppliers,

Directors appoints executive officers, who

Turning to its three committees, S.T.

members of the community, its employees,

are responsible for the executive function.

CORPORATION also benefits fromand all of its other stakeholders and also

The term of office for both directors andthe knowledge and experience of

prove itself worthy of their trust. To thisexecutive officers is one year.

external senior executives as well as

Corporate Governanceend, the Company adopted the Company-

Directors are elected at the Generalprofessors from universities. In addition

with-Committees system to ensure

Meeting of Shareholders every year,

to strengthening the monitoring andthe impartiality and transparency of its

and executive officers are appointed

oversight functions, this initiative

operational structure and is continuallyby the Board of Directors. This systemenables the Company to enhance thepursuing lasting improvements in theallows the Board of Directors to concen-

objectivity, transparency, and fairness

quality of its management systems.

trate on each of the decision-making

of its corporate management.

and supervisory functions by delegating
Committee-Based Corporate

authority over the business execution

Audit by Audit Committee, Internal

Governance System

function to executive officers. This ensures

Audit Group, and Accounting Auditors

In 2004, S.T. CORPORATION shifted

agile decision making and flexible busi-

The Audit Committee conducts audits

from a company with corporate auditors

ness execution. In addition, and as

by receiving business execution reports

A Balanced Decision-Making, Business Execution, and Oversight Structure
Board ofDirectors

General Meeting of Shareholders
Election /Dismissal

Election /Dismissal

Accounting Auditors
Accounting Audit

Nomination
Committee

Board of Directors

Audit Committee(Audit Committee Office)Election /Dismissal

Internal Audit Group

20

Compensation
Committee

Chief Executive
Officer

Executive Officer
Meeting

Executive Officers in
ChargeGroup Companies’
Representative Directors

Operating Divisions

Group Companies

As of June 15, 2012

Ten members, fi ve of whom are outside directors, including threefemale directors.
The Board of Directors concentrates on the decision-making,management, and oversight functions. Meetings are held regularly
on a quarterly basis with extraordinary meetings convened as andwhen required to decide on matters of managerial importance.

Executive
Of the ten executive officers, fi ve hold the concurrent position of
Officer Meeting director (including two female officers). In principle, meetings areheld every alternate week. Meetings provide a forum for the mutual
exchange of information while expediting decision making as wellas the timely and flexible execution of business.
Nomination
Committee

Comprised of fi ve members with outside directors composing
the majority; chaired by an outside director. This Committee
determines the appointment and dismissal of directors.

Audit
Committee

Comprised of four members, all of whom are outside directors;
chaired by an outside director. This Committee audits the management by directors and executive officers.

Compensation
Committee

Comprised of three members with outside directors composing
the majority; chaired by an outside director. This Committee
determines compensation details paid to directors andexecutive officers.

from executive officers, examining financeInternal Control System

worked to enhance the reliability of its

reports and other documents, and directing

In accordance with requirements

financial reporting, following the initialinvestigations on a project-by-project basis.

stipulated in Japan’s Corporation Law andground laying processes centered on the

To ensure audit effectiveness, the Audit

Financial Instruments and Exchange

preparation of numerous check sheets

Committee members also visit operationalLaw, S.T. CORPORATION has worked

and other documents. As a result, insites in cooperation with the Internal

on building effective internal control

each fiscal year since the introduction

Audit Group and exchange timely opin-

systems for the entire Group that focusof the Internal Control Report systemions with the chief executive officer andon compliance and risk management.

under the Financial Instruments andRegarding compliance, the Company

accounting auditors.

Exchange Law in fiscal 2009, the Com-has been striving to enhance thepany’s system of internal control over

executive officer, the Internal Audit Groupawareness and structure of all Groupfinancial reporting has been evaluatedis responsible for internal audits and plans

units regarding compliance, establishingas “effective.” In addition, in fiscal 2011,

and implements annual internal audits.

internal compliance regulations andthe Company’s general IT control system

The Internal Audit Group also conducts

the Compliance Committee, both covering

was verified as “effective,” and it has

special audits on demand for the Board

the entire S.T. CORPORATION Group.

continued to be verified as such in eachof Directors, Audit Committee, or the chief

In risk management as well, the Company

subsequent fiscal year. S.T. CORPORA-

executive officer.

maintains internal risk management

TION will continue to further improve

Currently, S.T. CORPORATION’s

regulations and the Risk Management

the reliability of its financial reporting

accounting auditors are Ernst & Young

Committee, which covers the entire Group,and management transparency.

ShinNihon LLC, a member firm of Ernst

while addressing specific risks by assigning& Young Global Limited, an independent

the Special Committee as necessary.

auditor that conducts accounting audits

In the area of internal control over

Under the direct control of the chief

financial reporting, the Company has

and internal control audits.

Directors and Executive Officers
Directors

Nomination
Committee

As of June 15, 2012

Audit
Committee

Compensation
Committee

Chairman of theBoard of Directors

Name
Takashi Suzuki *Director(Outside Director)

Naoto Onzo

Director(Outside Director)

Yoshiko Shirata

Director(Outside Director)

Kanichi Suzuki

Director(Outside Director)

Fuminobu Aruga

Director(Outside Director)

Chieko Matsuda

Director

Yukimasa Yoneda *Director

Kanzo Kobayashi *Director

Hirohide Shimada*

Director

Takako Suzuki *Ten members(of whom fi ve areoutside directors)
Chairperson

Fivemembers
Committee member

FourmembersThreemembers* Holds the concurrent position of executive officer

Position

Name

CEO

Takashi Suzuki *President, COO

Yukimasa Yoneda *Senior Executive Vice President,
Executive Officer

Kanzo Kobayashi *Managing Executive Officer,
Corporate Management Division

Hirohide Shimada *Managing Executive Officer,
Branch Sales Business Department,
Sales Division

Takahiko KatoManaging Executive Officer,
Global Marketing Division

Yo Kouzuki

Executive Officer,
Corporate Administration Department,
Corporate Management Division

Kumiko Ishikawa

Executive Officer,
Global Marketing Division

Takako Suzuki *Executive Officer, Sales Division

Tsukasa Konda

Executive Officer, Creative Director,
Advertising GroupKoji Kage* Holds the concurrent position of director

21

Financial Section

Management’s Discussion and Analysis● Sales Overview

products,” and “agile management.” At the same time, we imple-

In the fiscal year under review, the year ended March 31, 2012, themented management reformation initiatives as part of our “S.T. Ref-Japanese economy strove to recover from the effects of the Great

ormation” program and worked to raise corporate value, a goal

East Japan Earthquake, which occurred on March 11, 2011. This

shared among and pursued by all members of the Group.

recovery continued until summer 2011, after which the economy

As a result, net sales rose 6.4% year on year, to ¥46,354 million.

began to feel the impact of the reappearance of debt issues inRegarding individual segments, in the Mothproofing and Hygiene-

Europe as well as floods in Thailand and started to slow accord-

Related Products segment, sales in the Cloth Care category edged

ingly. Regardless, the Japanese economy benefited from the slightdown 1.3% from the previous fiscal year, sales in the Hand Care

depreciation of the yen and an upturn in the U.S. economy, and as acategory expanded 5.2%, and sales in the Thermal Care category

result the economy showed signs of rebounding by the end of theincreased 9.2%. In the Household Environment-Related Products

fiscal year. As we approached summer 2011, consumer spending

segment, sales in the Air Care category were up 6.1% year on year,

picked up once again. One factor contributing to this comeback

sales in the Humidity Care category fell 5.8%, and sales in thewas the relaxation of the attitude of voluntary restraint that followed

Home Care category were up 41.0%. Additional information regard-

the Great East Japan Earthquake. Other contributing factors includ-ing the performances of individual segments can be found in the “At

ed strong demand for televisions in response to the complete shift

a Glance” section on pages 12 to 21 of this report.

to digital terrestrial broadcasts as well as demand for air conditionJapan. While spending from fall 2011 onward may have seemed● Cost of Sales, SG&A Expenses, andOperating Income

weak in comparison with the high levels evident during the summer,

While we continued to pursue lower manufacturing costs, raw mate-consumption levels were still solid thanks to strong growth in auto-

rials costs rose, and as a result the cost of sales grew 7.8% year on

mobiles sales following the reinstatement of a program offering sub-year, to ¥27,360 million. Selling, general and administrative expens-sidies for the purchase of environment-friendly automobiles and aes stepped up 7.2%, to ¥17,256 million, and operating income

recovery with regard to spending in the service sector, particularly

declined 17.2%, to ¥1,751 million, accordingly. The increase inon travel and eating out.

expenses was primarily due to higher marketing expenses, which

ers and cooler summer clothing in line with the “Cool Biz” trend in

Our Fukushima Plant suffered damage to certain buildings, pro-outweighed the benefits from our continued efforts to reduce logis-

duction equipment, and stored products during the Great East

tics costs and other expenses.

Japan Earthquake, forcing us to temporarily suspend operations at
this site. We subsequently inspected and repaired the facilities as● Other Income (Expenses), Pretax, and Net Income

necessary and were able to achieve an almost complete resumption

In other income and expenses, expenses and losses were up large-of production on April 11, 2011, one month after the earthquake.

ly due to the recording of equity in loss of affiliates of ¥325 million,

Throughout the fiscal year, the S.T. CORPORATION Group contin-

the reduced performances of certain affiliates, and loss on disposi-ued to further differentiate its products by advancing the “design ×tion of property, net, of ¥223 million, which included a retirement

fragrance revolution” strategy, which is based on the three basic

loss of ¥186 million associated with the reconstruction of the build-concepts of “select and focus,” the “development of unparalleled

ing that houses the Company’s headquarters. As a result, income

millions of yen / %
2.6

2.4

786

1,119

1.8
1,076

3.8

1,295

4.9

1,751

2,493

5.2

2.8

2,114

5.6

2,246

6.8
3,219

46,354

millions of yen / %43,580

millions of yen

43,546Net Income /Net Income Margin

44,879Operating Income /Operating Income Margin

47,006Net Sales

08

09

10

11

12

08

09

Operating Income

22

10

11

12

Operating Income Margin

08
Net Income

09

10
Net Income Margin

11

76

0.2

12

before income taxes and minority interests decreased 55.6%, to● Cash Flows¥596 million, and net income dropped 90.4%, to ¥76 million.

Net cash provided by operating activities was ¥1,560 million, down
¥1,144 million year on year. This was primarily due to a decline in

Accordingly, net income per share dropped from ¥36.03 pershare in the previous fiscal year, to ¥3.48 per share; the net income

income before income taxes and minority interests as well as higher

margin declined from 1.8%, to 0.2%; and return on equity (ROE)

loss on sales of property, plant and equipment and loss on equity

decreased from 4.0%, to 0.4%.

of affiliates. Net cash used in investing activities was ¥787 million,
down ¥2,815 million, which was largely attributable to lower pur-

● Financial Positionchases of investment securities. Net cash used in financing activi-

Total assets as of March 31, 2012, stood at ¥30,287 million, up ¥276

ties was ¥549 million, mainly the result of a rise in payments ofmillion, compared with the previous year-end. Total current assets

dividends to minority shareholders.

rose ¥418 million, to ¥16,941 million, while non-current assets de-

As a result, cash and cash equivalents at end of year stood atclined ¥142 million, to ¥13,346 million. The rise in current assets was¥5,921 million, up ¥190 million from the previous fiscal year-end.

primarily attributable to an increase in merchandise and finishedgoods, whereas the decline in non-current assets was the result of● Dividends and Return to Shareholders

a decrease in buildings and structures.

Taking into consideration such factors as net income and the needto realize shareholder returns, the Company has decided to distrib-

Total liabilities were ¥10,585 million, up ¥547 million, largely due
to a rise in trade payables. Accordingly, total net assets were

ute a fiscal year-end dividend of ¥11.0 (¥22.0 for the full year, includ-¥19,701 million, down ¥270 million from the previous year-end,

ing the interim dividend), on par with the previous fiscal year’s

following a decrease in total shareholders’ equity.

payment, making for a consolidated dividend payout ratio of
632.2%. Going forward, the Company will continue to place impor-Total shareholders’ equity contracted ¥466 million, to ¥19,901

tance on returns to shareholders.

million, and net assets per share edged down from ¥893.74 to¥884.45. While the equity ratio was down from the previous fiscal
year’s 64.9%, it still remained high at 63.4%, and we continued to● Business and Operational Risks

maintain a sound financial position with zero interest-bearing debt.

Factors that could possibly impact the Group’s operating results,financial position, or stock prices include the following: an escala-● Capital Expenditures andtion in raw materials prices; the impact on manufacturing operations

Depreciation and Amortizationof natural disasters and changes in international political or otherIn the fiscal year under review, capital expenditures rose from theconditions; sales fluctuations due to unseasonal weather; and theprevious year’s ¥662 million to ¥1,007 million, 60% of which was

failure of initiatives to raise new businesses. Forward-looking state-strategically invested in the Household Environment-Related Prod-

ments in this annual report are based on certain assumptions madeucts segment. Depreciation and amortization, including that relatedby the Company as of March 31, 2012.

to intangible assets, decreased from ¥992 million to ¥931 million.

Capital Expenditures /Depreciation and Amortization

ROE / ROADividends per Share /Payout Ratio

millions of yen%

yen / %

3.8

40.7

44.6

42.9

61.1

08

09

10

11

22.0

22.0

4.2

22.0

5.9
22.0

5.8

22.0

1,007
931

992

6.1

4.0

662

922
673

858
716

649

936

632.2

4.0
2.7
0.3

08

09

10

Capital Expenditures
Depreciation and Amortization

11

12

08
ROE

09
ROA

10

11

0.4

12

Dividends per Share

12

Payout Ratio

23

Financial Section

Consolidated Balance Sheets
S.T. CORPORATION and consolidated subsidiaries
For the years ended March 31, 2012 and 2011

Thousands of
U.S. dollars (Note 2)

Millions of yen

2012

ASSETS

2012

2011

Current assets:¥ 6,121¥ 6,399

23

55

283

Trade notes and accounts receivable (Note 6)

4,545

4,442

55,333Merchandise and finished goods

4,919

4,242

59,882

Cash and time deposits (Notes 6, 10 and 18)
Marketable securities (Notes 6 and 8)$ 74,518

Work in process

142

110

1,723

Raw materials and supplies

360

448

4,377

Deferred tax assets (Note 12)

365

402

4,440

Other current assets

481

439

5,855

(14)

(13)

(167)

16,941

16,523

206,245

Land

3,279

3,284

39,915

Buildings and structures

5,564

6,185

67,743

Machinery, equipment and vehicles

7,242

7,092

88,169Tools, furniture and fixtures

3,615

3,646

44,010Less - allowance for doubtful accounts
Total current assets

Property, plant and equipment, at cost (Notes 9 and 10):

Construction in progress

86

27

1,051

Leased assets (Note 19)

122

28

1,480

(13,613)(13,949)(165,735)

6,295

6,312

76,633

Less - accumulated depreciation
Property, plant and equipment, net

183

283

2,224

183

283

2,224

Investments in non-consolidated subsidiaries and affiliates

3,577

3,707

43,552

Investment securities (Notes 6 and 8)

18,988Intangible assets, net of accumulated amortization (Note 19)
Total intangible assets

Investments and other assets:
1,560

1,345

Long-term loans

59

72

715

Deferred tax assets other than unrealized revaluation loss on land (Note 12)

235

349

2,865

1,438

1,419

17,501Other assets
Total investments and other assets
Total assets

24

6,869

6,893

83,621¥ 30,287¥ 30,011$ 368,723

thousands of
U.S. dollars (Note 2)

millions of yen

LIABILITIES AND NET ASSETS

2012

2012

2011

Current liabilities:¥ 5,918¥ 5,369

33

8

397

1,881

1,835

22,894

Accrued expenses

569

578

6,927
2,245

Trade payables (Note 6)
Lease obligations
Other payables (Note 6)$ 72,044

Income taxes payable

184

203

Consumption taxes payable

12

67

144

Allowance for sales returns

108

121

1,318

Provision for loss on disaster

—

39

—

Other current liabilities
Total current liabilities

74

66

902

8,778

8,286

106,871

90

14

1,091
15,426Long-term liabilities:
Lease obligations

1,267

1,234

Directors’ retirement and severance benefits

117

124

1,418

Deferred tax liabilities - unrealized revaluation profit on land (Note 9)

333

381

4,056

Employees’ retirement and severance benefits (Note 13)

Other long-term liabilities
Total long-term liabilities

1

—

8

1,807

1,753

21,999Contingent liabilities (Note 11)
Net assets (Note 14):
Shareholders’ equity:
Common stock:
Authorized - 96,817,000 shares in 2012 and 2011
7,066

7,066

86,018

Capital surplus

7,068

7,068

86,046

Retained earnings

7,552

7,956

91,946

Issued and outstanding - 23,000,000 shares in 2012 and 2011

(1,785)(1,722)(21,730)

19,901

20,367242,281

Unrealized holding gain on other securities, net of taxes

356

160

4,331

Unrealized revaluation loss on land, net of taxes (Note 9)

(502)

(550)

(6,111)

Translation adjustments

(546)

(506)

(6,648)

(692)

(896)

(8,428)Subscription rights

99

82

1,202

Minority interests in consolidated subsidiaries

394

419

4,798

Treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive loss:

Total accumulated other comprehensive loss

Total net assets

19,701

19,972

239,852

Total liabilities and net assets¥30,287¥30,011$368,723

See notes to consolidated financial statements.

25

Consolidated Statements of Income
S.T. CORPORATION and consolidated subsidiaries
For the years ended March 31, 2012 and 2011

thousands of
U.S. dollars (Note 2)

millions of yen

2012

2012

2011

¥46,354
27,36018,99512
19,007
17,256
1,751¥43,580
25,37818,202
918,211
16,0972,114$564,335
333,085
231,249
151
231,400
210,081
21,319Non-operating income (expenses):
Interest and dividends received
Interest expense
Purchase discounts
Sales discounts
Loss on equity of affiliates
Other, net
Total non-operating income (expenses)
Ordinary income

78
(1)
188
(888)
(325)
37
(910)
841

78
(1)
183
(818)
(94)
85
(567)
1,547

952
(10)
2,285
(10,805)(3,953)456(11,075)
10,244

Special gains (losses), net:
Loss on disposition of property, net
Gain on sales of investment securities, net
Loss on valuation of investment securities
Loss on valuation of subsidiaries’ stocks
Reversal of allowance for doubtful accounts
Loss on disaster (Note 17)
Total special gains (losses), net
Income before income taxes and minority interests

(223)
—
—
—
—
(22)
(246)
596

(34)
0
(14)
(43)
3
(117)
(205)
1,343

(2,717)
—
—
—
—
(272)
(2,989)7,254

Income taxes (Note 12):Current
Deferred
Total income taxes
Income before minority interests

381
91
473
123

499
(18)
482
861

4,642
1,111
5,753
1,502

Net sales
Cost of sales (Notes 16 and 22)
Gross profit before reversal of allowance for sales returns
Reversal of allowance for sales returns
Gross profit
Selling, general and administrative expenses (Note 16)
Operating income

Minority interests
Net income

48
76

¥

75
786

¥

582
920

$

See notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income
S.T. CORPORATION and consolidated subsidiaries
For the years ended March 31, 2012 and 2011
thousands of
U.S. dollars (Note 2)

millions of yen

2012
¥123

¥ 861

$1,502Other comprehensive income (loss) (Note 5):
Unrealized holding gain (loss) on other securities, net of taxes
Unrealized revaluation loss on land, net of taxes
Translation adjustments
Other comprehensive income (loss) on equity method companies
Total other comprehensive income (loss)
Comprehensive income

149
48
(60)
42
178
¥301

(119)
—
(30)
(42)
(191)
¥ 670

1,809
579
(731)
511
2,169
$3,670Total comprehensive income attributable to:Shareholders of S.T. CORPORATION
Minority interests in consolidated subsidiaries

280
22

610
60

3,403
268

See notes to consolidated financial statements.

26

2012

2011

Income before minority interests

Consolidated Statements of Changes in Net Assets
S.T. CORPORATION and consolidated subsidiaries
For the years ended March 31, 2012 and 2011

millions of yen

Balance at April 1, 2011
Cash dividends paid by distribution of retained earnings
Net income
Purchases of treasury stock
Changes in treasury stock held by equity method companies
Net changes in items other than those in shareholders’ equity
Balance at March 31, 2012

Number of sharesof common stock(Thousands)

Commonstock

CapitalsurplusRetainedearnings

Treasury stock,at cost23,000¥ 7,066¥ 7,068¥ 7,956(479)
76¥ (1,722)

23,000¥7,066¥7,068Translation
adjustments

Total accumulated
othercomprehensive
loss

Total
shareholders’equity(0)(62)¥ 20,367
(479)
76
(0)
(62)

¥7,552¥(1,785)¥19,901

Subscription
rightsMinority
interests inconsolidated
subsidiaries

Total net
assetsmillions of yen
Unrealized
Unrealized
holding gain on revaluation loss onother securities, land, net of taxes
net of taxes(Note 9)Balance at April 1, 2011
Cash dividends paid by distribution of retained earnings
Net income
Purchases of treasury stock
Changes in treasury stock held by equity method companies
Net changes in items other than those in shareholders’ equity
Balance at March 31, 2012¥160¥(550)¥(506)¥(896)

¥82

¥419

196
¥356

48
¥(502)(40)¥(546)

204¥(692)

17
¥99

(25)
¥394

¥19,972
(479)
76
(0)
(62)
195
¥19,701

Total
shareholders’equitymillions of yen

Balance at April 1, 2010
Cash dividends paid by distribution of retained earnings
Net income
Purchases of treasury stock
Disposition of treasury stock
Cancellation of treasury stock
Changes in treasury stock held by equity method companies
Net changes in items other than those in shareholders’ equity
Balance at March 31, 2011

Number of sharesof common stock(Thousands)

Commonstock

CapitalsurplusRetainedearnings

Treasury stock,at cost29,500¥7,066¥7,068¥17,024(480)
786¥(11,026)(6,500)23,000¥7,066¥7,068Translation
adjustments

Total accumulated
othercomprehensive
loss

(3)
(9,371)

(1)
9
9,371
(75)

¥20,132
(480)
786
(1)
5
—
(75)

¥ 7,956¥ (1,722)¥20,367

Subscription
rightsMinority
interests inconsolidated
subsidiaries

Total net
assetsmillions of yen
Unrealized
Unrealized
holding gain on revaluation loss onother securities, land, net of taxes
net of taxes(Note 9)Balance at April 1, 2010
Cash dividends paid by distribution of retained earnings
Net income
Purchases of treasury stock
Disposition of treasury stock
Cancellation of treasury stock
Changes in treasury stock held by equity method companies
Net changes in items other than those in shareholders’ equity
Balance at March 31, 2011

¥ 400¥(550)¥(480)¥(629)

¥67

¥396

(241)
¥ 160

—
¥(550)(27)¥(506)(267)¥(896)

15
¥82

23
¥419

¥19,966
(480)
786
(1)
5
—
(75)
(229)
¥19,972

thousands of U.S. dollars (Note 2)

Balance at April 1, 2011
Cash dividends paid by distribution of retained earnings
Net income
Purchases of treasury stock
Changes in treasury stock held by equity method companies
Net changes in items other than those in shareholders’ equity
Balance at March 31, 2012

Number of sharesof common stock(Thousands)

Commonstock

CapitalsurplusRetainedearnings

Treasury stock,at cost23,000$ 86,018$ 86,046$ 96,856(5,830)920$ (20,968)

23,000$86,018$86,046$91,946

Total
shareholders’equity(4)(758)$ 247,952(5,830)
920
(4)
(758)

$(21,730)$242,281

thousands of U.S. dollars (Note 2)
Unrealized
Unrealized
holding gain on revaluation loss onother securities, land, net of taxes
net of taxes(Note 9)Balance at April 1, 2011
Cash dividends paid by distribution of retained earnings
Net income
Purchases of treasury stock
Changes in treasury stock held by equity method companies
Net changes in items other than those in shareholders’ equity
Balance at March 31, 2012

Translation
adjustments

Total accumulated
othercomprehensive
loss

Subscription
rightsMinority
interests inconsolidated
subsidiaries$1,946$(6,691)$(6,166)$(10,911)$ 999$5,106

2,385$4,331

579$(6,111)(482)$(6,648)2,483$ (8,428)

203$1,202(307)$4,798

Total net
assets$243,145(5,830)
920
(4)
(758)
2,379
$239,852

See notes to consolidated financial statements.

27

Consolidated Statements of Cash Flows
S.T. CORPORATION and consolidated subsidiaries
For the years ended March 31, 2012 and 2011

thousands of
U.S. dollars (Note 2)

millions of yen

2012

2012

2011

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes and minority interests
to net cash provided by operating activities:
Depreciation and amortization
Loss on sales of property, plant and equipment
Loss on sales and valuation of investment securities
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in employees’ retirement and severance benefits(Decrease) increase in directors’ retirement and severance benefits
Decrease in allowance for sales returns
Interest and dividends received
Interest expense
Foreign exchange loss
Loss on disaster
Equity in loss of affiliates
Changes in operating assets and liabilities:
Receivables
Inventories
Payables and accrued expenses
Other, net
SubtotalInterest and dividends received
Interest paid
Payments for loss on disaster
Income taxes paid
Net cash provided by operating activities¥ 596¥ 1,343$ 7,254

931
223
—
0
35
(8)
(12)
(78)
1
37
22
325

992
34
56
(3)
(16)
18
(9)
(78)
1
8
117
94

11,332
2,717
—
3
426
(92)
(151)
(952)
10
449
272
3,953

(112)
(636)
564
(57)
1,830
165
(1)
(66)
(368)
1,560

(244)
1
986
195
3,497
78
(1)
(65)
(805)
2,704

(1,361)(7,743)
6,862(698)
22,283
2,011
(10)
(807)
(4,484)18,994

(0)
500
(997)
0
(386)
—
79
17
(787)

(0)
200
(773)
1
(3,031)1—
1(3,601)(0)
6,087(12,136)
4(4,698)—958
206(9,579)

(0)
—
(479)
(47)
(22)
(549)

(1)
5
(481)
(36)
(8)
(521)

(4)
—
(5,830)(575)(273)(6,682)

(34)
190
5,731
¥5,921(21)(1,439)7,170¥ 5,731

(420)
2,314
69,769$ 72,083

Cash flows from investing activities:
Payments into deposits (more than three months)
Proceeds from withdrawal of time deposits (more than three months)
Purchases of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchases of investment securities
Proceeds from sales of investment securities
Proceeds from liquidation of affiliate
Other investments, net
Net cash used in investing activities
Cash flows from financing activities:
Purchases of treasury stock
Proceeds from sales of treasury stock
Payments of dividends
Payments of dividends to minority shareholders
Other finance, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 18)
See notes to consolidated financial statements.

28

Notes to Consolidated Financial Statements
S.T. CORPORATION and consolidated subsidiaries
March 31, 2012

1 Summary of Significant Accounting Policies(a) Basis of presentation

Assets and liabilities of the consolidated subsidiaries acquired before

S.T. CORPORATION (the “Company”) and its domestic subsidiaries

April 1, 1999 were initially valued at cost at the time of acquisition. It is themaintain their books of account in conformity with accounting principles

Company’s policy to value assets and liabilities of subsidiaries acquired

generally accepted in Japan, and its overseas subsidiaries maintain theiron or after April 1, 1999 at fair value when the Company obtains control

books of account in conformity with those of their countries of domicile.

over such subsidiaries; however, the Company has not acquired any

Effective April 1, 2008, the Company adopted the “Practical Solution on

subsidiaries since April 1, 1999.

Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (PITF No. 18, issued by the ASBJ on(c) Accounting period

May 17, 2006). In accordance with PITF No. 18, the accompanying con-

The accounting period of the Company begins on April 1 and ends onsolidated financial statements for the years ended March 31, 2012 andMarch 31 of the following year. The two overseas subsidiaries have fiscal

2011 have been prepared by using the accounts of foreign consolidated

years ending on December 31. The necessary adjustments for significant

subsidiaries prepared in accordance with either International Financialtransactions, if any, during the intervening period are made on consolidation.

Reporting Standards (IFRS) or accounting principles generally acceptedin the United States as adjusted for certain items including those forgoodwill, actuarial differences and capitalized development costs.
The accompanying consolidated financial statements have been pre-(d) Translation of foreign currency transactions andfinancial statements
Monetary assets and liabilities denominated in foreign currencies arepared in accordance with accounting principles generally accepted intranslated into yen at the rates of exchange in effect at the balance sheet

Japan, which are different in certain respects as to the application anddate and the accounts of the overseas consolidated subsidiaries aredisclosure requirements of IFRS, and are compiled from the consolidated

translated into yen at the rates of exchange in effect at the balance sheet

financial statements prepared by the Company as required by thedate. Foreign exchange gains and losses are credited or charged to in-

Financial Instruments and Exchange Act of Japan.

come and translation adjustments are included in net assets.

In preparing the accompanying consolidated financial statements,
certain reclassifications have been made to the consolidated financial(e) Marketable securities and investment securities

statements issued domestically for readers outside Japan. The notes to

Other securities with determinable market value are carried at market val-

the consolidated financial statements include information which is not re-ue with any changes in unrealized holding gain or loss, net of the related

quired under accounting principles generally accepted in Japan but isdeferred income tax assets or liabilities, included in net assets. Other se-

presented herein as additional information. Furthermore, certain amounts

curities without determinable market value are stated at cost determinedin the prior year’s financial statements have been reclassified to conformby the moving-average method and the cost of other securities sold isto the current year’s presentation.

computed based on the moving-average method. During the years ended
March 31, 2012 and 2011, the Company and its consolidated subsidiaries(b) Principles of consolidation and accounting for investments in

did not have any trading securities.

unconsolidated subsidiaries and affiliates
The accompanying consolidated financial statements include the ac-(f) Inventories

counts of the Company and any significant companies controlled directly

Inventories are stated at the lower of cost or net selling value, cost being

or indirectly by the Company. Companies over which the Company exer-

determined by the average method.

cises significant influence in terms of their operating and financial policies
have been accounted for by the equity method. As of March 31, 2012, thenumber of consolidated subsidiaries and affiliates accounted for by the(g) Property, plant and equipment, except for leased assets,
and depreciation

equity method were five and four (five and four in 2011), respectively.

Property, plant and equipment are stated at cost. Depreciation of proper-

Suriemu Este Hanbai Co., Ltd. was liquidated and accordingly, accounts

ty, plant and equipment of the Company and its domestic subsidiaries,

of it were not included in consolidation from the current fiscal year. On

except for buildings (excluding structures attached to the buildings) ac-

March 31, 2012, NS FaFa Japan Co., Ltd. became an affiliate accounted

quired on or after April 1, 1998, is computed by the declining-balance

for by the equity method as a result of the purchase of stocks.

method in conformity with the Corporation Tax Law of Japan.

Investments in subsidiaries and affiliates which are not consolidated or

Depreciation of property and equipment of overseas subsidiaries andaccounted for by the equity method are carried at cost or less. Where

buildings (excluding structures attached to the buildings) acquired on or

there has been a permanent decline in the value of such investments, theafter April 1, 1998 of the Company and domestic subsidiaries is comput-

Company has written down the investments.

ed by the straight-line method.

29

Notes to Consolidated Financial Statements

The estimated useful lives of the major depreciable assets are as follows:(l) Employees’ retirement and severance benefits

Buildings and structures

3 to 50 years

Accrued retirement and severance benefits have been recorded mainly at

Machinery, equipment and vehicles

2 to 17 years

the amount calculated based on the retirement benefit obligation and theTools, furniture and fixtures

2 to 20 years

fair value of the pension plan assets as of the balance sheet date, as adjusted for unrecognized actuarial gain or loss and unrecognized prior ser-(h) Intangible assets and long-term prepaid expenses

vice cost.

Intangible assets and long-term prepaid expenses, except for leased assets,

Actuarial gain or loss is amortized in the year following the year inare amortized by the straight-line method. Cost of software purchased forwhich the gain or loss is recognized primarily by the straight-line methodinternal use is amortized by the straight-line method over a period of fiveover a period of five years which is shorter than the average remaining

years, the useful life applicable to commercially available software.

years of service of the employees.

(i) Leases

over a period of five years which is shorter than the average remaining

Non-cancelable lease transactions that transfer substantially all the risks andyears of service of the employees.

Prior service cost is amortized as incurred by the straight-line method

rewards associated with the ownership of the leased assets are accounted

In addition, one overseas subsidiary provides an allowance for pay-for as finance leases. All other lease transactions are accounted for as oper-

ments of employees’ retirement and severance benefits at 100% of theating leases and related payments are charged to income as incurred.

voluntary termination payments.

Finance leases entered into before April 1, 2008 of the Company andits domestic subsidiaries are accounted for as operating leases, except(m) Directors’ retirement and severance benefits

for those which transfer ownership of the leased assets to the lessee.

The Company has accrued directors’ retirement and severance benefits

Leased assets accounted for as finance leases are depreciated onat the amount which would be required to be paid if all directors resigned

the straight-line method over the lease periods with no residual value.

from their positions and left the Company as of the balance sheet date inaccordance with its internal regulations.

(j) Allowance for doubtful receivables
The allowance for doubtful receivables is provided based on past experi-(n) Consumption taxes

ence for normal receivables and on an estimate of the collectability of re-Transactions subject to consumption taxes are recorded at amounts ex-

ceivables from companies in financial difficulty.

clusive of consumption taxes.

(k) Allowance for sales returns(o) Cash and cash equivalents

The allowance for sales returns is provided for losses on sales returns

Cash and cash equivalents in the accompanying consolidated state-subsequent to the balance sheet date at an amount equivalent to thatments of cash flows consist of cash on hand, demand deposits and liq-

calculated based on the actual percentage of returns in prior years.

uid short-term investments with a maturity of three months or less fromtheir respective dates of acquisition.

2 Basis of Translation
The consolidated financial statements presented herein are expressed in yen and, solely for the convenience of the reader, have been translated into U.S.
dollars at ¥82.14 = U.S.$1.00, the approximate exchange rate prevailing on the Tokyo Foreign Exchange Market on March 31, 2012. This translation should
not be construed as a representation that all amounts shown could have been, or could in the future be, converted into U.S. dollars at that or any other rate.

3 Changes in Accounting Policies
Application of the “Accounting Standard for Earnings per Share” and thecome per share. By the new method, the stock options—for which the

Accounting Standard for Earnings per Share”

vesting date comes after a certain period of service—are evaluated by

Effective the fiscal year ended March 31, 2012, the Company has adopted

including a portion of the estimated fair value of the stock options that is

the Accounting Standard for Earnings per Share (ASBJ Statement No. 2,

relative to the future services given to the Company in the amount ofissued on June 30, 2010) and the Guidance on the Accounting Practicalmoney to be paid in if the stock options are exercised.

Solution on Unification of Accounting Standard for Earnings per Share

The impact on diluted net income per share was nil.

(ASBJ Guidance No. 4, issued on June 30, 2010).

30

The Company has changed the method of calculating diluted net in-“Guidance on the Accounting Practical Solution on Unification of

4 Supplementary Information
Accounting Standard for Accounting Changes and Corrections of Errors
Effective from April 1, 2011, the Company applied the Accounting Standard for Accounting Changes and Corrections of Errors (ASBJ Statement No. 24,
issued on December 4, 2009) and the Guidance on Accounting Standard for Accounting Changes and Corrections of Errors (ASBJ Guidance No. 24, issued on December 4, 2009).

5 Consolidated Statements of Comprehensive Income
The amount of recycling and amount of income tax effect associated with other comprehensive income for the year ended March 31, 2012 were as follows:
millions of yen

thousands of
U.S. dollars

2012

2012

Unrealized holding gain on other securities, net of taxes¥208

Amount recognized in the year
Reclassification adjustments included in the statement of income
Before income tax effect adjustment$2,529

—

—

208

2,529

(59)

(720)

149

1,809

48

579

(60)

(731)

Amount recognized in the year

37

448

Reclassification adjustments included in the statement of income

5

63

42

511

¥178

$2,169Amount of income tax effectUnrealized holding gain on other securities, net of taxes
Unrealized revaluation loss on land, net of taxes
Amount of income tax effectTranslation adjustments
Amount recognized in the year
O ther comprehensive income on equity method companies

Other comprehensive income on equity method
Total other comprehensive income

6 Financial Instruments(1) Current status of financial instruments

Substantially all trade payables—notes and accounts payable–(a) Policy in relation to financial instruments

trade and other payables—have payment due dates within one year.

The Company and its consolidated subsidiaries (collectively, theIn addition, payables denominated in foreign currencies are exposed“Group”) raises necessary funds following capital investment plans

to foreign currency exchange risk.

for undertaking the manufacturing-and-selling businesses. If surplus(c) Risk management system for financial instruments

funds arise, the Group manages only financial assets with high de-Credit risk management—the risk that customers or counterparties

grees of safety.

may default
The Company holds its management policy and puts it into effect(b) Details of financial instruments and related risk

whereby the Company grasps trust conditions of its customers andTrade receivables—trade notes and accounts receivable—are ex-monitors due dates and outstanding balances regularly to identify

posed to credit risk in relation to customers. In addition, receivables

and mitigate risks of bad debts from customers who are having finan-

denominated in foreign currencies are exposed to foreign currency

cial difficulties.

exchange risk.
Securities and investment securities, most of which are stocks of

The consolidated subsidiaries perform equivalent managementwith the Company.

other companies with which the Group has business relationships,
are exposed to market price fluctuation risk.

31

Notes to Consolidated Financial Statements

Market risk management—the risk arising from fluctuations in exchange

Liquidity risk management—the risk that the Group may not be able

rates and interest rates

to meet its payment obligations on the schedule dates

The Company uses forward exchange contract transactions with the aim

The Company manages liquidity risk by means of preparing monthlyof avoiding risk related to fluctuation in future foreign exchange.
For marketable and investment securities, the Company periodicallyfinancial plans.
(d) Supplementary explanation of items relating to the fair value ofconfirms the market value of such financial instruments and reports tofinancial instruments

the director in charge. The Company reviews the status of these invest-

The fair value of financial instruments is based on their quoted market

ments on a continuing basis.

prices if available. If there are no market prices available, fair value isreasonably estimated. Because estimation of fair values incorporates
variable factors, adopting different assumptions can change the value.

(2) Estimated fair value of financial instruments
The carrying value of financial instruments recognized on the consolidated balance sheets as of March 31, 2012 and 2011, the estimated fair value ofsuch items and the differences between them are shown below. Financial instruments for which fair value is extremely difficult to estimate are not included in the following table.
millions of yen
Year ended March 31, 2012a Cash and time deposits
b Trade notes and accounts receivable

Carrying value

Fair value

Difference¥ 6,121¥ 6,121

—

4,545

4,545

—

1,536

1,536

—

¥12,202¥12,202—a Trade payables¥ 5,918¥ 5,918—b Other payables

1,881

1,881

—

¥ 7,798¥ 7,798—c Marketable securities and investment securities
AssetsLiabilities

millions of yen
Year ended March 31, 2011a Cash and time deposits
b Trade notes and accounts receivable

Carrying value

Fair value

Difference¥ 6,399¥ 6,399

—

4,442

4,442

—

1,353

1,353

—

¥12,194¥12,194—a Trade payables¥ 5,369¥ 5,369—b Other payables

1,835

1,835

—

¥ 7,204¥ 7,204—c Marketable securities and investment securities
AssetsLiabilities

thousands of U.S. dollars
Year ended March 31, 2012

Carrying value

Fair value

a Cash and time deposits$ 74,518$ 74,518

Difference—b Trade notes and55,33355,333—

18,697

18,697—$148,548$148,548—

a Trade payables$ 72,044$ 72,044—

b Other payables

22,89422,894—$ 94,938$ 94,938—

accounts receivablec Marketable securities and investment securities
AssetsLiabilities

Notes: 1. Method of estimating the fair value of financial instruments and other matters relating to marketable and investment securities
Assetsa. Cash and time deposits and b. Trade notes and accounts receivable
Because these items are settled over short terms, fair value and carrying values are nearly equivalent. Therefore, relevant carrying value is used.
c. Marketable securities and investment securities
Stocks are valued at the exchange trading price.
Bonds are valued at the exchange trading price or at the price provided by the financial institutions offering these securities.
For information on securities classified by purpose of holding, please refer to the “Marketable Securities and Investment Securities” section of
the notes to the financial statements.
Liabilities
a. Trade payables and b. Other payables
Because these items are settled over short terms, fair value and carrying value is nearly equivalent.
Therefore, relevant carrying value is used.

32

2. Financial instruments for which fair value is difficult to determine
Carrying value
thousands of
U.S. dollars

millions of yen

2012

2011

¥47

¥47

Unlisted equity securities

2012
$574

Because the fair value of these financial instruments is extremely difficult to determine, given that no quoted market price is available, they are not included in the above table.
3. Redemption schedule for receivables and other securities with maturity dates at March 31, 2012 and 2011 are summarized as follows:
millions of yen

More than
1 year andwithin 5 years

More than
5 years andwithin
10 yearsYear ended March 31, 2012

One yearor less

Time deposits¥ 6,120

¥ —

—

—

4,545

—

—

—

—

—

Bond

—

100

—

—

Other

—

100

¥10,665

¥200

—

—

More than
5 years andwithin
10 yearsMore than
10 years

Trade notes and accounts receivable
Marketable securities and investment securities

Total

More than
10 years

millions of yen

More than
1 year andwithin 5 years

Year ended March 31, 2011

One yearor less

Time deposits¥ 6,398

¥ —

—

—

4,442

—

—

—

—

—

Bond

—

100

—

—

Other

—

100

¥10,840

¥200

—

—

More than
5 years andwithin
10 yearsMore than
10 years

Trade notes and accounts receivable
Marketable securities and investment securities

Total

thousands of U.S. dollars

Year ended March 31, 2012

One yearor less

Time deposits$ 74,504

Trade notes and accounts receivable

More than
1 year andwithin 5 years

—

—

—

55,333

$

—

—

—

—

—

—

1,217

—

—

—

—

Marketable securities and investment securities
Bond
Other
Total

—

1,217

$129,837$2,435

7 Derivatives
The Company and its consolidated subsidiaries had no derivative instruments outstanding at March 31, 2012 and 2011.

33

Notes to Consolidated Financial Statements

8 Marketable Securities and Investment Securities
The acquisition cost and related carrying value of other securities with a determinable market value at March 31, 2012 and 2011 are summarized as follows:
thousands of
U.S. dollars

millions of yen

2012

2011

2012

Acquisition cost

¥1,029¥1,054$12,527

Carrying value

1,536

1,353

18,697

Total unrealized gain

560

339

6,822

Total unrealized loss

54

40

653

At March 31, 2012 and 2011, unlisted stocks (whose carrying value was ¥47 million (U.S.$574 thousand) and ¥47 million, respectively) are not included in the above table, because their fair value is extremely difficult to determine, given that no quoted market price is available.
Sales of other securities for the years ended March 31, 2012 and 2011 are summarized as follows:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

Proceeds received—¥1,201—Aggregate gain

—

0

—

Aggregate loss

—

—

—

9 Land Revaluation
In accordance with the Land Revaluation Law (Proclamation No. 34 dat-from deferred tax liabilities for other temporary differences in the accom-

ed March 31, 1998), land used for business activities was revalued atpanying consolidated balance sheets. The market value of the land as ofMarch 31, 2002. The revaluation difference, net of taxes, is stated as “un-March 31, 2012 and 2011 decreased by ¥574 million (U.S.$6,984 thou-realized revaluation loss on land, net of taxes” in net assets. Deferred taxsand) and ¥543 million, respectively, after the revaluation.

liabilities arising from this revaluation difference are presented separately

10 Pledged Assets
Pledged assets for the years ended March 31, 2012 and 2011 are summarized as follows:
thousands of
U.S. dollars

millions of yen

2012

¥ 26

Buildings and structures

—

52

—

Land

—

94

—

¥26

¥172

$317

Time deposits

TotalTime deposits were pledged as collateral mainly for leased office space at March 31, 2012 and 2011.

34

2012

2011

¥26

$317

11 Commitments and Contingent Liabilities
The Company had the following contingent liabilities as of March 31, 2012 and 2011.
thousands of
U.S. dollars

millions of yen

2012
Loan guarantees for Shaldan (Thailand) Co., Ltd.

2012

2011

¥9

¥1

$112

At March 31, 2012 and 2011, trade notes discounted with banks in the ordinary course of business amounted to ¥69 million (U.S.$837 thousand) and¥101 million, respectively.

12 Income Taxes
At March 31, 2012 and 2011, the tax effect of the temporary differences which gave rise to a significant portion of the deferred tax assets (excluding deferred taxes on unrealized revaluation loss on land) was as follows:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

Current assets:
¥ 163

¥ 179

$ 1,980

Allowance for sales returns

46

48

565

Accrued business taxes

16

16

201

Other

140

162

1,705

Total current deferred tax assets

366

406

4,451

Deferred gain on sales of property

(0)

(0)

(5)

Other

(0)

(3)

(6)

Total current deferred tax liabilities

(1)

(3)

(11)

¥ 365

¥ 402

$ 4,440

Accrued employees’ bonuses

Current liabilities:

Net current deferred tax assets
Non-current assets:

¥ 449

¥ 485

$ 5,467

A llowance for directors’ retirement and severance benefits

41

50

496

Write-downs of securities

61

70

746

Impairment loss

14

42

175

Other

2

2

29

Gross non-current deferred tax assets

568

649

6,913

Valuation allowance

(112)

(130)

(1,360)Total non-current deferred tax assets

456

519

5,552

Deferred gain on sales of property

(15)

(18)

(184)

Undistributed earnings of controlled foreign companies

(39)

(45)

(470)

Unrealized holding gain on other securities, net of taxes

(167)

(108)

(2,033)A llowance for employees’ retirement and severance benefits

Non-current liabilities:

Total non-current deferred tax liabilities

(221)

(170)

(2,687)

Net non-current deferred tax assets

¥ 235

¥ 349

$ 2,86535

Notes to Consolidated Financial Statements

A reconciliation of the statutory tax rate to the Company’s effective tax rates for the years ended March 31, 2012 and 2011 is summarized as follows:

2012

2011

Japanese statutory tax rate

40.00%

40.00%

Permanent differences such as entertainment expenses, etc.

6.52

2.70

Permanent differences such as dividend income

1.96(0.19)Tax credit

0.08(1.66)

Undistributed earnings of controlled foreign companies(0.32)

0.65

Equity in loss of affiliates

21.80

2.79

—

(7.96)

Cancellation of temporary difference related to investments in affiliates accounted for by the equity method
Downward adjustment of deferred tax assets at end of year due to tax rate change

11.32

—

Other

(2.06)(0.46)

Effective tax rate

79.30%

35.87%

Adjustment of deferred tax assets and liabilities pursuant to the change inare expected to be realized during the period from the fiscal year begin-

the corporate tax rates

ning on April 1, 2012 to the fiscal year beginning on April 1, 2014 and to

Following the promulgation on December 2, 2011 of the “Act for Partial

35% for temporary differences that are expected to be realized during

Revision of the Income Tax Act, Etc., for the Purpose of Creating a

and after the fiscal year beginning on April 1, 2015.

Taxation System Responding to Changes in Economic and Social

As a result of these changes, deferred tax assets (net of deferred tax

Structures” (Act No. 114 of 2011) and the “Act on Special Measures forliabilities) on March 31, 2012 decreased by ¥44 million (U.S.$531 thou-

Securing Financial Resources Necessary to Implement Measures forsand), and income taxes-deferred and unrealized holding gain on other

Reconstruction following the Great East Japan Earthquake” (Act No. 117

securities, net of taxes, for the year then ended increased by ¥67 millionof 2011), effective from the fiscal year beginning on and after April 1,(U.S.$821 thousand) and ¥24 million (U.S.$290 thousand), respectively.

2012, corporate tax rates will be reduced and a special temporary recov-

Deferred tax liabilities-unrealized revaluation profit on land on March 31,

ery tax will be imposed. In accordance with this reform, the effective stat-

2012 decreased by ¥48 million (U.S.$579 thousand) and unrealized re-utory tax rate, used to measure deferred tax assets and deferred tax

valuation loss on land, net of taxes, for the year then ended increased byliabilities, will be reduced from 40% to 38% for temporary differences thatthe same amounts.

13 Employees’ Retirement and Severance Benefits
The Company and its domestic subsidiaries have defined benefit plans

meritorious service awards to employees in excess of the prescribed for-covering substantially all of their employees which are partially funded

mula, which are charged to income as paid as it is not practicable tothrough a qualified funded pension plan. Under these plans, employees

compute the liability for such future payments since the amounts varyare entitled to lump-sum or pension retirement or severance benefits

depending on the circumstances.

determined by points accumulated monthly based on the employees’

The following table summarizes the funded status and amounts recog-

contributions, length of service and the conditions under which termina-

nized in the accompanying consolidated balance sheets at March 31,

tion occurs. In addition, the Company and its domestic subsidiaries pay

2012 and 2011:
thousands of
U.S. dollars

millions of yen

2011

2012
$(39,421)¥(3,238)¥(3,114)

Plan assets

1,909

1,789

23,239Unfunded benefit obligation(1,329)(1,325)(16,183)

Unrecognized actuarial loss

63

93

772

Unrecognized past service cost

(1)

(2)

(15)

¥(1,267)¥(1,234)$(15,426)

Retirement and severance benefit obligation

Accrued benefit obligation

36

2012

The following table summarizes the components of net retirement benefit expenses for the years ended March 31, 2012 and 2011:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

¥158

¥156

Interest cost on benefit obligation

61

60

748

E xpected return on plan assets

(36)

(35)

(436)
428

Service cost

$1,922A mortization of actuarial loss

35

3

A mortization of past service cost

(1)

(1)

(7)

E xtraordinary additional retirement payments

3

21

35

¥221

¥204

$2,690

Net retirement benefit expenses

The assumptions used in determining the pension benefit obligation are presented below:

2012

2011

Straight-line
methodStraight-line
methodDiscount rate

2.00%

2.00%

Expected rate of return on plan assets

2.00%

2.00%

Method of periodic allocation of estimated retirement benefits

14 Net Assets
The Corporation Law of Japan (the “Law”), which superseded most of

Capital surplus and the legal reserve are not available for the distribu-

the provisions of the Commercial Code of Japan, went into effect on May

tion of dividends but may be used to reduce or eliminate a deficit or may

1, 2006. The Law provides that an amount equal to 10% of the amount tobe transferred to stated capital. At March 31, 2012, the legal reserve of

be disbursed as distributions of capital surplus (other than the capital re-

the Company included in retained earnings amounted to ¥550 million

serve) and retained earnings (other than the legal reserve) be transferred(U.S.$6,694 thousand).

to the capital reserve and the legal reserve, respectively, until the sum of

The maximum amount which the Company can distribute as dividends

the capital reserve and the legal reserve equals 25% of the capital stockis calculated based on the non-consolidated financial statements of theaccount. Such distributions can be made at any time by resolution of theCompany and in accordance with the Corporation Law of Japan.

shareholders or by the Board of Directors if certain conditions are met.

15 Amounts per Share
Net assets per share as of March 31, 2012 and 2011 were ¥884.45

Diluted net income per share for the year ended March 31, 2012 is not(U.S.$10.77) and ¥893.74, respectively. Basic net income per share forpresented because latent shares with dilutive effect do not exist. Diluted

the years ended March 31, 2012 and 2011 was ¥3.48 (U.S.$0.04) andnet income per share for the year ended March 31, 2011 was ¥36.03.

¥36.03, respectively.

37

Notes to Consolidated Financial Statements

The basis for the calculation of basic net income per share and diluted net income per share for the years ended March 31, 2012 and 2011 was as follows:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

Basic net income per share:
¥76

¥786

$920

A mount attributable to shareholders of common stock

76

786

920

Weighted-average number of shares outstanding (millions of shares)

22

22

—

Net income
Amount not attributable to shareholders of common stock

Diluted net income per share:
Increase in number of shares outstanding

—

0

—

Shares resulting in an anti-dilutive effect (millions of shares)

1

1

—

The basis for calculation of total net assets per share as of March 31, 2012 and 2011 was as follows:
thousands of
U.S. dollars

millions of yen

2012

2011

2012

¥19,701¥19,972$239,852

493

501

6,000

99

82

1,202

Total net assets per share:
Total net assets
Deductions:
Subscription rights
Minority interests in consolidated subsidiaries
Amounts attributable to shareholders of common stock

394

419

4,798

19,20919,471

233,852

22

22—

Number of shares outstanding at year-end (millions of shares)

16 Major Expenses
Major expenses included in selling, general and administrative expenses for the years ended March 31, 2012 and 2011 were as follows:
thousands of
U.S. dollars

millions of yen

2012

2011

2012

Sales promotion expenses¥5,097¥4,614$62,058

Advertising costs

2,889

2,531

35,170

Salaries

2,007

1,859

24,434

Shipment and storage expenses

1,407

1,403

17,126

Provision for employees’ retirement and severance benefits

179

172

2,181

Provision for directors’ retirement and severance benefits

16

18

194

Research and development expenses included in general and administrative expenses and cost of sales for the years ended March 31, 2012 and2011 amounted to ¥659 million (U.S.$8,018 thousand) and ¥610 million, respectively.

38

17 Loss on Disaster
The Company recorded a loss related to the Great East Japan Earthquake during the years ended March 31, 2012 and 2011. The components of the loss
on disaster are as follows:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

¥ 9

¥ 60

Provision for loss on disaster

—

39

—

Other

13

17

159

Total

¥22

¥117

$272

Fixed costs incurred during the suspension of operations$112

18 Cash and Time Deposits
A reconciliation of cash and cash equivalents in the accompanying consolidated statements of cash flows to cash and time deposits in the accompanying consolidated balance sheets at March 31, 2012 and 2011 is as follows:
thousands of
U.S. dollars

millions of yen

Cash and time deposits
Time deposits with a maturity in excess of three months

2012

2011

2012

¥6,121¥6,399$74,518

(223)

(723)

(2,718)

23

55

283

¥5,921¥5,731$72,083

Marketable securities with a maturity of three months or less from their respective dates of acquisition
Cash and cash equivalents

19 Leases
Finance leases

In accordance with the revised accounting standard effective the fiscal

Leased assets included in property, plant and equipment are tools, furni-

year ended March 31, 2009, the Company and its domestic subsidiaries

ture and fixtures in the mothproofing and hygiene-related products seg-account for finance leases as operating leases for those that were entered

ment and the household environment-related products segment. Leased

into before April 1, 2008 and if ownership of the leased property does notassets included in intangible assets are software.

transfer to the lessee. Information in relation to leased assets held under finance leases but accounted for as operating leases is as follows:(1) A summary of the proforma amounts (inclusive of the related interest) of acquisition cost, accumulated depreciation and net book value at March 31,
2012 and 2011, primarily relating to tools, furniture and fixtures is as follows:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

Acquisition cost

¥43

¥101

Accumulated depreciation

35

76

$529
431

Net book value

¥ 8

¥ 24

$ 99

39

Notes to Consolidated Financial Statements(2) Future minimum lease payments, inclusive of the related interest, subsequent to March 31, 2012 and 2011 are summarized as follows:
thousands of
U.S. dollars

millions of yen

2012

2012

2011

Payable in one year or less

¥7

¥16

Payable after one year

1

8

12

¥8

¥24

$99

Total

$87

(3) Lease payments and proforma depreciation charges for the years ended March 31, 2012 and 2011 were ¥14 million (U.S.$169 thousand) and ¥22
million, respectively.
(4) Depreciation is computed by the straight-line method over the respective lease terms assuming a nil residual value.
Operating leases
The Company and its consolidated subsidiaries had no significant operating leases at March 31, 2012 and 2011.

20 Segment Information(1) Summary of reporting segments

Hygiene-Related Products and Household Environment-Related

The reportable segments of the Group are components for which dis-

Products. The business segments are classified according to the naturecrete financial information is available and whose operating results areof the Company’s products and their markets.

regularly reviewed by the Board of Directors of the Company to make decisions about resource allocation and to assess their performance.
The Company formulates comprehensive strategies for implementation

The Mothproofing and Hygiene-Related Products segment includes
the manufacture and sales of Cloth Care products, Hand Care products
and Thermal Care products. The Household Environment-Related

in Japan and overseas at its head office and conducts business activities.

Products segment includes the manufacture and sales of Air Care prod-

The Company has two reportable segments: Mothproofing anducts, Humidity Care products and Home Care products.

(2) Calculation method of sales, profits or losses, and other items by reportable segment
The accounting method for the reportable segments is the same as the principles and procedures set forth in Note 1, “Summary of Significant
Accounting Policies.” The segment income or losses are based on operating income or loss.
(3) Information on the amounts of sales, income (loss), and other items by reportable segments
millions of yen
Mothproofing andHygiene-Related
Products

HouseholdEnvironmentRelated Products¥20,116¥26,238———

Net sales

20,116

26,23846,354

Segment income¥

685¥ 1,066¥ 1,751

¥

373

¥

¥

Year ended March 31, 2012

Total

Sales
Sales to third parties
Intra-group sales and transfers¥46,354

Other items
Depreciation

538

911

millions of yen
Mothproofing andHygiene-Related
Products

HouseholdEnvironmentRelated Products¥19,442¥24,139———

Net sales

19,442

24,13943,580

Segment income¥ 1,126¥989¥ 2,114

¥

¥

570

¥

Year ended March 31, 2011

Total

Sales
Sales to third parties
Intra-group sales and transfers¥43,580

Other items
Depreciation

40

405

975

thousands of U.S. dollars

Year ended March 31, 2012

Mothproofing andHygiene-Related
Products

HouseholdEnvironmentRelated Products$244,901$319,433———

244,901

319,433

564,335$

8,342$ 12,977$ 21,319

$

4,538

$

$ 11,089

Total

Sales
Sales to third parties
Intra-group sales and transfers
Net sales
Segment income$564,335

Other items
Depreciation

6,551

Notes: 1. The total for segment income is the same as the operating income in the consolidated statements of income.
2. Assets and liabilities by reportable segment have not been described in the above tables because the Board of Directors of the Company does not regularly review them tomake decisions about resource allocation and to assess their performance.

(4) Related information(a) Information by product and service
millions of yen
Year ended March 31, 2012

Cloth Care

¥9,070

Sales to third parties

Thermal Care

¥7,234

Air Care

OthersTotal¥19,920¥10,130¥46,354

Others

Total

Millions of yen
Year ended March 31, 2012

Cloth Care

¥9,193

Sales to third parties

Thermal Care

¥6,624

Air Care¥18,767¥8,997¥43,580

Thousands of U.S. dollars
Year ended March 31, 2012

Cloth Care

Sales to third parties$110,427(b) Information by geographical segment

Thermal Care

$88,068

Air Care

Others$242,511$123,328

Total$564,335

Property, plant and equipment

Sales

Geographical segment information is not presented as the amount ofGeographical segment information is not presented as overseas

property, plant and equipment in Japan, which exceeded 90% of thesales, which were less than 10% of consolidated net sales for the

total of property, plant and equipment at March 31, 2012 and 2011.

years ended March 31, 2012 and 2011.
(c) Information by major customer
Sales

Customer’s namethousands of
U.S. dollars

millions of yen

Related segment

2012

2011

2012

Paltac Corporation¥15,026¥13,906$182,937

Mothproofing and hygiene-related productsHousehold environment-related products

ARATA CORPORATION¥ 9,766¥ 9,231$118,897

Mothproofing and hygiene-related productsHousehold environment-related products

21 Related Party Transactions(1) Dealings with related parties
There are no significant transactions with related parties to be reported.
(2) Notes about a parent company and important affiliated companies
Financial information on important affiliated companies
The summary of financial information of FUMAKILLA LIMITED, an important affiliated company, as of March 31, 2012 and 2011, and for the year thenended is as follows:41

Notes to Consolidated Financial Statements

thousands of
U.S. dollars

millions of yen

Total current assets

2012

2011

2012

¥14,541¥14,743$177,022

6,719

5,339

81,801

Total deferred assets

5

9

57

Total current liabilities

13,631

11,302

165,945

679

718

8,272

Total net assets

6,954

8,070

84,664
190,867

Total non-current assets

Total long-term liabilities

Sales

15,678

17,792

Income (loss) before income taxes(1,374)

159(16,733)

Net income (loss)(1,006)148(12,244)

22 Inventory Valuation Loss Included in Cost of Sales
Inventory valuation loss write-downs below cost to net selling value are included in cost of sales and amounted to ¥550 million (U.S.$6,701 thousand)and ¥425 million for the years ended March 31, 2012 and 2011.

23 Note to Consolidated Statements of Changes in Net Assets
Shares in issue and outstanding and treasury stock at March 31, 2012 and 2011 were as follows:Year ended March 31, 2012

Year ended March 31, 2011

Number of shares in issue and outstanding:Number of shares in issue and outstanding:Common stock

23,000 thousand

Number of shares held in treasury:
Common stock

1,282 thousand

Note: Details of the increase are as follows:
Increase due to purchase of shares less than standard unit:
0 thousand
Increase due to changes in treasury stock held by equity method companies:
67 thousand

Subscription rights at March 31, 2012 were as follows:
Subscription rights for stock options

Common stock

23,000 thousand

Number of shares held in treasury:¥99 million (U.S.$1,202 thousand)Common stock

1,214 thousand

Notes: 1. Details of the increase are as follows:
Increase due to purchase of shares less than standard unit:
0 thousand
Increase due to changes in treasury stock held by equity method companies:
72 thousand
2. Details of the decrease are as follows:
Decrease due to cancellation of treasury stock:
6,500 thousand
Decrease due to exercising share subscription rights:
6 thousand

Subscription rights at March 31, 2011 were as follows:
Subscription rights for stock options
Dividends paid from retained earnings for the year ended March 31,
Total amount ofdividends(millions of yen)

Dividends
per share(yen)

B oard of Directors’ meeting
held on May 23, 2011240

B oard of Directors’ meeting
held on October 31, 2011240

Record date

Effective date11

March 31,2011

June 3,201111

September 30,
2011

December 2,
2011

Total amount ofdividends(millions of yen)

Dividends
per share(yen)

B oard of Directors’ meeting
held on May 24, 2010240

B oard of Directors’ meeting
held on October 28, 2010240

Resolution

Recorddate

Effective
date

11

March 31,2010

June 3,201011

September 30,
2010

December 3,
2010

Dividends for which the record date was in the year ended March 31, 2012

Dividends for which the record date was in the year ended March 31, 2011

and the effective date is in the year ending March 31, 2013 were as follows:

and the effective date is in the year ending March 31, 2012 were as follows:

Resolution

B oard of Directors’ meeting
held on May 21, 201242

Dividends paid from retained earnings for the year ended March 31,
2011 were as follows:2012 were as follows:
Resolution¥82 million

Total amount ofdividends(millions of yen)

240

Source ofdividends

Retainedearnings

Dividends
per share
(yen)

11

Recorddate

Effectivedate

Resolution

March 31,2012

June 1,2012

B oard of Directors’ meeting
held on May 23, 2011

Total amount ofdividends(millions of yen)

240

Source ofdividends

Retainedearnings

Dividends
per share
(yen)

11

Recorddate

Effective
date

March 31,2011

June 3,2011

24 Stock Option Plans
At March 31, 2012, the Company had stock option plans, which were approved at the annual general meetings of the shareholders and by the Board of
Directors. Details of these stock option plans are summarized as follows:
Date of approval

Number of shares granted

Eligible participants

Exercisable period

June 15, 2004

130,000

4 officers and 9 employees

July 1, 2006 – June 30, 2011

June 14, 2005

160,000

3 officers and 23 employees

July 1, 2007 – June 30, 2012

June 14, 2006

75,0003 officers and 4 employees

July 1, 2008 – June 30, 2013
August 1, 2009 – July 31, 2014

June 15, 2007

140,000

4 officers and 14 employees

June 18, 2008

95,0003 officers and 12 employees

August 1, 2010 – July 31, 2015

June 18, 2009

20,0004 employees

August 4, 2011 – August 3, 2016

June 18, 2010

155,000

4 officers and 17 employees

August 3, 2012 – August 2, 2017

June 17, 2011

35,0007 employees

August 2, 2013 – August 1, 2018

The option price per share was determined on the date the options were granted based on an established formula for determining option prices. The
options are exercisable during the above periods provided that the recipients are still directors, officers or employees of the Company or its subsidiaries.
Cost related to the 2012 stock option plan amounting to ¥17 million (U.S.$203 thousand) were included in selling, general and administrative
expenses.
Contents of stock options
2005

2006

2007

2008

2009

2010

2011

2012

Grantees

4 officers and
9 employees

3 officers and23 employees

3 officers and4 employees

4 officers and
14 employees

3 officers and
12 employees

4 employees

4 officers and
17 employees

7 employeesType ofstock

Common stock

Common stock

Common stock

Common stock

Common stock

Common stock

Common stock

Common stock

Number ofsharesgranted

130,000

160,000

75,000140,000

95,00020,000155,000

35,000Grant dateAugust 4, 2004

August 4, 2005

August 1, 2006

August 1, 2007

August 1, 2008

August 3, 2009

August 2, 2010

August 1, 2011

Conditionfor exercise

Working from
August 4, 2004
to June 30,
2006

Working from
August 4, 2005
to June 30,
2007

Working from
August 1, 2006
to June 30,
2008

Working from
August 1, 2007
to July 31,
2009

Working from
August 1, 2008
to July 31,
2010

Working from
August 3, 2009
to August 3,
2011

Working from
August 2, 2010
to August 2,
2012

Working from
August 1, 2011
to August 1,
2013

Working
periodAugust 4, 2004
to June 30,
2006

August 4, 2005
to June 30,
2007

August 1, 2006
to June 30,
2008

August 1, 2007
to July 31,
2009

August 1, 2008
to July 31,
2010

August 3, 2009
to August 3,
2011

August 2, 2010
to August 2,
2012

August 1, 2011
to August 1,
2013

Exercisable
periodWithin 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)

Within 5 years
after the vesting date (thoseretiring after
the vestingdate cannot
exercise theirstock options)43Notes to Consolidated Financial Statements

Stock option activity during the year ended March 31, 2012 was as follows:
Number of shares

2005

2006

2007

2008

2009

2010

2011

2012

Non-vested outstanding at beginning of year

—

—

—

—

—

20,000155,000—

Granted during the year

—

—

—

—

—

—

—

35,000Forfeited during the year

—

—

—

—

—

—

—

—

Vested during the year

—

—

—

—

—

20,000——

Outstanding at end of year

—

—

—

—

—

—

155,000

35,00098,000100,000

75,000140,000

95,000———

Vested during the year

—

—

—

—

—

20,000——Exercised during the year

—

—

—

—

—

—

—

—

Forfeited during the year

98,000

—

—

—

—

—

—

—

—

100,000

75,000140,000

95,00020,000——

Vested outstanding at beginning of year

Outstanding at end of year

Price of stock options
yen

U.S. dollars

2005

2006

2007

2008

2009

2010

2011

2012

2012

¥1,405¥1,628¥1,727¥1,517¥1,264¥1,037¥1,049¥976$12Weighted-average market price

—

—

—

—

—

—

—

—

—

Fair value per option on grant date

—

—

292

191

220

197

178

194

2

Exercise price

The fair value of each stock option grant was estimated at the grant date using the Black-Scholes option pricing model. The fair value per
option for options granted during the year ended March 31, 2012 was estimated based on the following assumptions:

2012
30.2%

Volatility

4 years and 6 months

Option term

¥22 (U.S.$0.27)

Expected dividend (per share)

0.33%

Risk-free interest rate

Volatility was determined based on the actual stock price over the
past 4 years and 6 months.

Risk-free interest rate was based on government bonds whose terms
corresponded with the terms of the above options.

The option term was estimated under the assumption that the options
would be exercised in the middle of the exercisable period because of

Method of estimating exercised stock options

insufficient data.

The Company estimated the number of exercised stock options based

Expected dividend (per share) was based on the dividend amountapplicable to the 2011 fiscal year.

44

on the actual number of forfeitures because it is difficult to estimate thenumber of stock options which will be forfeited in the future.

Report of Independent Auditors

45

Five-Year Financial Summary
S.T. CORPORATION and consolidated subsidiaries
Years ended March 31

thousands of
U.S. dollars(except per sharedata and ratios)

millions of yen(except per share data and ratios)

2012

2011

2010

2009

2008

2012
$564,335

For the Year:Net sales¥46,354¥43,580¥43,546¥44,879¥47,006

Cost of sales

27,34725,37025,151

26,28026,887

332,934

Selling, general and administrative expenses

17,256

16,097

16,14916,107

16,900210,081

Operating income

1,751

2,114

2,246

2,493

3,219

21,319

Income before income taxes and minority interests

596

1,343

1,943

1,969

2,458

7,254

Net income

76

786

1,119

1,076

1,295

920

1,007

662

673

716

649

12,259Depreciation and amortization

931

992

922

858

936

11,332R&D expenses

659

610

612

499

489

8,018

Capital expenditures

Cash flows from operating activities

1,560

2,704

2,263

1,549

2,784

18,994

Cash flows from investing activities(787)(3,601)

(126)

(604)

871

(9,579)

Free cash flow

773

(897)

2,137

945

3,655

9,415

Cash flows from financing activities

(549)

(521)

(499)

(530)

(6,589)(6,682)¥16,941¥16,523¥17,667¥16,118¥16,080$206,245

Property, plant and equipment, net

6,295

6,312

6,561

6,766

7,070

76,633

Total assets

30,28730,011

29,02927,61728,393368,723
106,871

At Year-End:Total current assets

Total current liabilities

8,778

8,286

7,313

6,881

7,581

Total long-term liabilities

1,807

1,753

1,751

1,706

1,667

21,999Total net assets

19,701

19,972

19,966

19,02919,144

239,852

Cash and cash equivalents

5,921

5,731

7,170

5,520

5,185

72,083

Number of shares issued (thousand shares)

23,00023,00029,50029,50029,500Treasury stock (thousand shares)

1,282

1,214

7,648

7,669

7,687

647

630

611

619

607

Number of employees
Per Share (yen and U.S. dollars):¥ 3.48¥ 36.03¥ 51.25¥ 49.32¥ 54.08

Cash dividends

22.00

22.00

22.00

22.00

22.00

0.26

Net assets

884.45893.74892.46853.81

853.9010.77

Net income$ 0.04

Ratios (%):
Operating income margin

3.78

4.85

5.16

5.55

6.85

Income before income taxes and minority interests/net sales

1.29

3.08

4.46

4.39

5.23

Net income margin

0.16

1.80

2.57

2.40

2.76

ROE

0.39

4.03

5.87

5.78

6.06

ROA

0.25

2.66

3.95

3.84

4.16

Equity ratio

63.42

64.88

67.18

67.49

65.60

Notes: 1. U.S. dollar amounts are translated from yen for convenience only, at the rate of ¥82.14 = U.S.$1.00, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2012.
2. ROE = Net income divided by average total equity (total net assets minus subscription rights less minority interests in consolidated subsidiaries) for the fiscal year.
3. ROA = Net income divided by average total assets for the fiscal year.

46

Investor Information
As of March 31, 2012

● Corporate Data
Company name

S.T. CORPORATION

Headquarters

4-10, Shimo-ochiai 1-chome,

Consolidated subsidiaries
S.T. TRADING CO., LTD.

Shinjuku-ku, Tokyo 161-8540,

Sale of hand gloves and workplace supplies

Japan
Establishment

August 31, 1948

S.T. AUTO CO., LTD.

Common stock¥7,065,500,000

Sale of chemical car care products

Fiscal year-end

March 31

Shares issued and outstanding

23,000,000

S.T. BUSINESS SUPPORT CO., LTD.

Listed stock exchangeTokyo Stock Exchange,

Contract work for S.T. GroupFirst Section

FAMILY GLOVE CO., LTD. (THAILAND)

Shareholders

11,181

Registered transfer agent

Mizuho Trust & Banking Co., Ltd.

Accounting auditors

Ernst & Young ShinNihon LLC

FAMILY GLOVE CO., LTD. (TAIWAN)

Annual shareholders’ meeting

Middle of June each year

Production and sale of gloves

Employees

647 (consolidated)

Production and sale of gloves

399 (non-consolidated)
Contact

Hirohide Shimada,Public Relations Department

E-mailir@st-c.co.jp

Telephone+81-3-5906-0734

Facsimile+81-3-5906-0742● Major Shareholders
Thousands of shares% of total

Shaldan Co., Ltd.

5,537

24.1

Nippon Life Insurance Company

1,671

7.3

S.T. CORPORATION

1,142

5.0

TCSB (Mizuho Bank)

884

3.8

Individuals, etc. ........................... 40.6%

Takashi Suzuki

682

3.0

Other Japanese corporations ..... 36.5%

FUMAKILLA LIMITED

541

2.4

Financial institutions ................... 20.6%

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

524

2.3

Non-Japanese institutions ........... 1.9%

Carenne433

1.9

Securities firms ............................. 0.4%

Hiromu Fujii

401

1.7

Seiichi Suzuki

382

1.7

Share ownership breakdown● Stock Chart
Stock price (yen)Nikkei 225 (yen)

1,500

15,0001,000

10,0005,000

500
Trading volume (shares)
1,000,000

009/6 78

9 10 11 12 10/1 2

3

4

5

6

7

8

9 10 11 12 11/1 2

3

4

5

6

7

8

9 10 11 12 12/1 2

3

4

5

6

0

47

4-10, Shimo-ochiai 1-chome, Shinjuku-ku, Tokyo 161-8540, Japan
http://www.st-c.co.jp/

Printed in Japan, August 2012