Creating Corporate Value Report 2016
Year ended March 31, 2016

Refreshing the AirRefreshing the Air

Compilation policy
This report includes the efforts for creating corporate value as an annual report on
the business activities of the S.T. Group. With reference to the requests, opinions,etc. from stakeholders, it includes important issues (financial and non-financial
information) for both stakeholders and the S.T. Group.
[Scope of reporting] See the entire picture of communication tools on page 13.
[Target organizations] The document reports on our company, or the S.T. Group(consolidated), if not mentioned. The “S.T. Group” means the entire S.T. Group, the“S.T. Group (in Japan)” means S.T. (nonconsolidated) and groups companies inJapan, and the “S.T. (nonconsolidated)” means S.T. (nonconsolidated).

[Target period] Term ended Mar. 2016 (Apr. 1, 2015 to Mar. 31, 2016)[Date of issuance] Aug. 2016
[Forward-Looking Statement] This report contains forward-looking statements
regarding S.T. CORPORATION’s future plans, strategies, and performance. Suchforward-looking statements are based on information available as of the issuanceof this report. Please note that the Company’s actual performance may differ
greatly from forward-looking statements due to the economic situation, businessenvironment, market demand, and foreign currency exchange rate fluctuations in the
future.

Contents
Value Creation

2

Message

4

Systems for Supporting Management

6

Financial and Non-Financial Highlights

8

Business at a Glance10

Sustainability Overview

12

Corporate Data/Overview of Communication Tools

13

1Value Creation

We meet social requirements and expectations
and create new markets with air.
Our company exists for meeting social requirements and expectations and creating new markets with air.
We will share our management philosophy and corporate philosophy “sincerity” with stakeholders, develop innovative“unprecedented products”, and brighten and enliven the lives of customers with air.
We aim to become top in the global niche market.
As our strength, we have a lot of unique brands specializing in the niche fields of daily necessities,
including the deodorizers and air fresheners “Shoshu-Riki”, the mothproofing agents “Mushuda”,
the deodorizer “Dashu-Tan”, and the dehumidifier “Drypet”.

＋

2

To prevent moth holes

For making your living more colorful

To prevent mold from growing in your house

Air

Air

Air

Repellents

＋

Aroma

−

Moisture

Mothproofing
AgentsAir fresheners

Dehumidifiers

1946

1971

1981

Reconstruction period afterWorld War II

Improvement of publichealth during the rapid
economic growth period

Increase in the air-tightnessof high-rise condominiums
in the prime of growing
economyIn 2015, “SDGs” was adopted in the United Nations in September,and the “Paris Agreement” was adopted at COP21 in December. Stakeholders’ requirements and expectations are
now the creation of “social value (solving social issues)” rather thanthe creation of “economic value” for the purpose of realizing a sustainable society.
We promote the sustainable co-growth of enterprises and society and create mid to long-term corporate value.
To do so, we create “social value (solving social issues)” and meeting social requirements andexpectations by using an identity of S.T., “creating new markets based on our unique air-care technologies”.

To remove annoying odors

To dispel the anxiety over radiation

To lead a healthy life

Air

Air

Air

−

Odors

Deodorizers＋

Detectors

Radiation
meters＋Forest(Fragrant component)

Solving social
issues

1999

2011

20XX

In the mature economy, theneeds for fragrance were
replaced by the needs fordeodorization.

Onset of the disaster of
the Great East Japan
Earthquake

Discussions for solving
global issues became fierce.

3Message

To attract customers with our “unique air-care technologies”.
Brand value management
Based on services for society and trust from society, we hope tocontribute to society by providing customers with the most reliable
products as a management philosophy. Under the corporate
philosophy “sincerity” and slogan “Refreshing the Air”, we aim
to become a company that can brighten and enliven the lives ofcustomers with air and is loved by customers and society. Our basic
policy is to keep being a Company that is both Robust and Quick to
Act (the three policies of narrowing down and concentrating on targets,development of unprecedented products, and swift management), anddevelop a highly profitable system, as we set the goal of “brand value
management” in 2013.
“The base for a highly profitable system” developed.
In the past 3 years, our company was affected by the inflationary
policy, consumption tax hike, etc. under the Abe administration,
but since I was appointed to the current position in 2013, we havepromoted the management reform. I started “developing the base for ahighly profitable system” in the first year, strived to “create customers”
in the second year, and set the goal of “shifting to profit-oriented
management” in the third year and transformed our organization by
adopting the business division system. Then, I think that the basefor a highly profitable system has been established. In the current
term, consumers’ viewpoint changed considerably, and an increasing
number of customers purchase attractive products even if they are
expensive. It can be said that the trend of consumption has beenpolarized between the customers who demand low-priced products
and the customers who purchase products they want. The sales andprofit of our products increased, because high-priced products withhigh added value, such as the new brand “SHALDAN” and the core
brand “Shoshu-Riki” series in the Air Care category, produced goodresults.
Mid to long-term corporate strategies
On the other hand, the environment surrounding us is witnessing
structural changes in society around the world, including the change inthe demographic structure, such as the declining birthrate and aging
population, economic globalization, and the growth of interests insustainability of health, environments, etc. We recognize these changes
as chances to grow further, and will create new markets and live up to
expectations from society, based on our “unique air-care technologies”.
In addition, we aim to improve the brand value (corporate value) of
S.T. by meeting social requirements for the provision of safe, reliable
products to consumers, the recruitment and training of personnel, thereduction in environmental burdens, the development and procurementof recyclable materials.
Advance from “base development” to the “growth phase”
From this term, we will concentrate on the “expansion of our market”,“increase of our market share”, and “profit-oriented”. In the verticallymanaged business division system, the second business division (AirCare) aims to “expand our market”, while the first and third businessdivisions (seasonal and niche products) aim to “increase their market
shares”. The horizontally-managed functional division will reform our
profit-earning structure.
For “expanding our market”, we will (1) enter new fields with ourexisting air-care technologies, (2) create new markets with our new
unique air-care technologies, and (3) develop the overseas businessbase in Asia. For “increasing our market share”, we will (1) vitalize
the markets and selling space of seasonal products, and (2) develop
the markets of niche products and strengthen their business base.
For “profit-oriented”, we aim to maximize profit by (1) enhancing
our core competence and improving our development capability, (2)removing redundant processes in management to streamline it, and (3)promoting all employees to sharpen their sense of management. Then,we will head for sustainable growth.
In conclusion,
We have so far developed innovative “unprecedented products”, andbrought new surprises and pleasures to the living of customers. We
will keep improving our “unique air-care technologies” and creating
new value and markets. We will aim to achieve the co-growth ofenterprises and society, the mid to long-term improvement in corporate
value, and the enhancement of shareholder value, in cooperation
with stakeholders, including shareholders. We would appreciate yourcontinued support.

Takako Suzuki
President and Chief Operating Officer (COO)4

5

Systems for Supporting Management

Corporate GovernanceWe consider that corporate governance is a “system for supporting”
the sustainable co-growth of enterprises and society. It is important
to develop an environment for securing the transparency and fairnessof management facilitating active decision making, and disclosing
information properly. We recognize that shareholders, society and theenvironment entrust us with valuable managerial resources, and aim
to realize the sustainable growth of society and the environment andcreate corporate value in the mid to long terms, in cooperation withstakeholders, and will fulfill our accountability.
Development of Corporate Governance System
In June 2004, in order to enhance oversight function of the Board of
Directors and the quality of management and enrich management
practices such as prompt decision-making and agile executionof operation, the Company was reorganized into a company withcommittees (currently company with three committees), which is moretransparent and fair and in which Outside Directors account for the
majority of board members. In June 2008, a female director was
appointed for the first time, and in June 2016, female directors makeup 33% of the board (2 out of 10 Executive Officers are also women). In
addition, we appoint Independent Outside Directors with a wide arrayof knowledge, experience and skills such as marketing and accounting,etc. (The Company was selected as “Diversity Management Selection
100 (2013)” (METI Minister Award).) In 2015, a board evaluation was
also conducted to improve the effectiveness of the Board.
Remunerations of Directors and Executive Officers
The remunerations of directors and executive officers are designed for
improving corporate value.

Overview of Corporate Governance(Year ended March 31, 2016)

Governance Type

Company with three committees

Number of Board Members

8

Number of Outside Directors

4 (50%)

Number of Independent Directors

3 (Notified as the persons designated by Tokyo Stock Exchange)

Board Diversity

3 female directors (including 1 outside directors)

Number of Board Meetings Held per Year

12

Average Attendance Rate of Board Meetings

100%

Director’s Term

1 yearChairman and CEO

One person serving as both

Nomination Committee

5 members (3 outside directors; chaired by an outside director)

Audit Committee

3 members (3 outside directors; chaired by an outside director)

Compensation Committee

3 members (2 outside directors; chaired by an outside director)

Corporate Governance Structure
General Meeting of Shareholders
Election/Dismissal

Nomination Committee

Election/Dismissal

Accounting Auditors
Accounting Audit

Board of Directors

Audit Committee(Audit Committee Office)Election/Dismissal

Internal Audit Group

6

Compensation Committee

Representative Executive Officers

Executive Officer Meeting

Executive Officer in Charge

Executive Officer in Charge

Operating Divisions

Group Companies

Board of Directors(As of June 15, 2016)

Takashi Suzuki

Naoto Onzo

Kanichi Suzuki

Fuminobu Aruga

Noriyuki Watanabe

Takako Suzuki

Kumiko Ishikawa

Kouichi Yoshizawa

Chairman of the Board of Directors

Director ( Outside Director )Director ( Outside Director )Director

Chairman of the Boardof Directors

Nomination
Committee

Compensation
Committee○

Director(Outside Director) ☆

◎Director(Outside Director)○

Director(Outside Director) ☆
Director(Outside Director) ☆

Audit
Committee(As of June 15, 2016)◎○

Director(Outside Director) ☆

◎○Nine directors( five of whom are
Outside Directors )◎：Chairperson

Fivemembers○：Committee member※

Naoto Onzo

Overall management

Takako Suzuki※

Kanichi Suzuki

Managing Executive Officer

In charge of Division Management, and the First
Tsukasa Konda
Business Division and the Third Business Division

Managing Executive Officer

In charge of the Management Control Division andKumiko Ishikawa
the Manufacturing Division

Managing Executive Officer

In charge of the Sales Division

Yo Kouzuki

Executive Officer

In charge of the Executive Creative Director

Koji Kage

Executive Officer

In charge of the Second Business Division

Masami Kitahara

Executive Officer

In charge of the Management Strategy Division
Kouichi Yoshizawa
and responsible for Domestic Group Companies

Four
members

Executive Officer

In charge of the R&D Division

Executive Officer

In charge of the International Business Division
Keiichi Hayasaka
and responsible for Overseas Group Companies※

Fuminobu Aruga

Noriyuki Watanabe

Director

Name

Takashi Suzuki○○

Responsibilities

Overall management

Mitsuko Miyagawa

Director(As of June 15, 2016)

Representative Executive
Officer, President, COO○○

Director

Areas of Executive Officer Responsibility

Representative Executive
Officer, Chairman, CEO

Takashi Suzuki○

Director ( Outside Director )Director

Executive Officers

Name

Mitsuko Miyagawa

Director ( Outside Director )Director

Corporate Governance Overview
Directors

Director ( Outside Director )Takako Suzuki※

Kumiko Ishikawa※

Kouichi Yoshizawa

※

Three
members※：Holds the concurrent position of executive officer☆ Independent Outside Director※※

Mikio Tsuji※：Holds the concurrent position of director

Risk Management and Compliance
For internal control, we promote system development in order tosecure the adequacy of organizational business operation. In orderto accomplish organizational goals effectively, efficiently, and properly,
opinions inside and outside the company are constantly grasped andimprovements are continuously made, while organizing rules andbusiness processes.
We consider that risk control is the most important issue formanagement. We are working to establish a system that can prevent

occurrence of various management risks surrounding the company,
minimize damage in the event that incidents do occur, and to prevent
their recurrence.
As for compliance, we observe not only laws, but also internal andexternal regulations, ethics, and social norms; fulfill social requirements
and expectations by putting its management philosophy and codes ofconduct into practice; and strive to maintain and improve the trust of
stakeholders.

7Financial and Non-Financial Highlights

thousands of U.S.dollars*1

millions of yen

2015

2016

2016

¥48,263¥48,351$429,062

1,813

2,342

20,782

Profit attributable to owners of parent

892

912

8,094

R&D expenses

513

536

4,758

1,486

1,758

15,597

Depreciation and amortization

844

1,128

10,013

Free cash flow

369

1,857

16,476

Total assets

33,78534,924309,915

Total net assets

22,60023,496

208,500

Number of issued outstanding shares (thousands)*2

21,851

21,699Years ended March 31, 2016 and 2015

For the YearNet sales
Operating income

Capital expenditures

At Year-End%

Financial Indicators
Operating income margin

3.8

4.8

ROA*3

2.7

2.7

ROE*4

4.2

4.1

Equity ratio

64.8

65.2

3,752

3,688

Number of employees (people)

859

860

Ratio of female directors to total directors (%)

44.4

37.5

Ratio of outside directors to total directors (%)

55.6

50.0

Non-Financial Indicators
CO2 emissions (tons)*5

yen

U.S. dollars

Per Share Information
Profit attributable to owners of parent
Net assets
Dividends
Common Stock prices*6¥40.83¥42.01$0.37

1,001.84

1,049.58

9.31

22

22

0.20

1,021

1,114

9.89

Notes:1. U.S. dollar amounts are translated from yen for convenience only, at the rate of ¥112.69 = U.S.$1.00, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2016.
2. Number of issued outstanding shares does not include that of treasury shares.
3. ROA=Profit attributable to owners of parent divided by average total assets for the fiscal year.
4. ROE=Profit attributable to owners of parent divided by average total equity (total net assets minus subscription rights less non-controlling interests in consolidated subsidiaries) for the fiscal year.
5. The CO2 emissions from the S.T. Group (in Japan)
6. The common stock prices listed are as of the end of the fiscal years ended March 31.

8

Net sales composition by category

Operating income/Operating income margin(millions of yen)

HomeHome
Care Care
7％
Home
Care 7％
7％
Humidity
Care
Humidity
７
％
Care
７7％
％
Humidity
Care
７％
Home
Home
Care
Home
Care
7％
Care
7％

48,351121212131313141414151515161616

1,7511,7511,751
1,7511,751
1,751
1,7511,751
1,8001,8001,800
1,8001,800
1,751
1,800
1,8001,800
2,1312,1312,131
2,1312,131
1,800
2,131
2,1312,131
1,8131,8131,813
1,8131,813 2,131
1,813
1,8131,813
2,3422,3422,342
2,342
2,3421,813
2,342
2,3422,342

16

121212131313141414151515161616

Total net assets/Equity ratio●ROA (%) ●ROE (%)■Total net assets (millions of yen) ●Equity ratio (%)

6.1 6.1

16

65.4
65.4
65.4
63.463.4
63.4
65.2
65.2
65.2
63.263.264.8
63.2
64.8
64.8

6.1

6.16.16.1
4.0 4.0 4.2
4.0 4.2

4.2
4.1 4.1 4.1
6.16.16.1
4.04.04.0 4.24.24.2
4.14.14.1
2.9 2.9 2.9
2.7 2.7 2.7
4.24.2
4.2
2.7
2.7
4.0
4.0
4.0
2.7
2.92.92.91.9
1.9
1.9
4.1
4.1
2.74.1
2.7
2.7

2.72.72.7
0.3 0.3 2.90.3
1.9
1.91.92.9
2.9
0.4 0.4 0.4
2.72.72.7
2.72.72.7
0.30.30.3
1.9
1.9
12 0.41312
1.9
12131413141514151615
16 16
0.4
0.4

65.4
65.4
65.4
63.4
63.4
63.4
63.2
63.2
63.2 64.8
65.2
65.2
65.2
64.8 64.8
65.4
65.4
65.4
63.4
63.4
63.4
63.2
63.2
63.2

12 121312
13141314151415161516
121212131313141414151515161616

121212131313141414151515161616

121212131313141414151515161616

121212131313141414151515161616

76
76
76

121212131313141414151515161616

0.312
0.312
0.312
131313141414151515161616
0.40.40.4

CO2 emissions

Number of employees

12 121312
13141314151415161516

16

12 121312
13141314151415161516

16

16

Ratio of outside directors to total directors/
Ratio of female directors to total directors

860

647 647 647
647 647647
647 647663 663 663
663 663 647
663
663 663760 760 760
760 760663
760
760 760
859 859 859
859 859760
859
859 859
860 860 860
860 860 859
860
860 860(people)

3,688

3,7273,7273,727
3,7273,727
3,727
3,7273,727
3,9303,9303,930
3,9303,930
3,727
3,930
3,9303,930
3,8843,8843,884
3,8843,8843,930
3,884
3,8843,884
3,7523,7523,752
3,7523,752 3,884
3,752
3,7523,752
3,6883,6883,688
3,6883,6883,752
3,688
3,6883,688(tons)

23,49665.264.8
64.864.8
65.2 65.2

912

1,2341,2341,234

565 1,2341,234
1,234
1,2341,234
892 892 892
892 892
1,234
892
892 892
912 912 912
912 912 892
912
912 91276565 565 565
565 56576565
565 56576

76
76

12 121312
13141314151415161516

4.8

121212131313141414151515161616

ROA/ROE(millions of yen)

4.8 4.8

12 121312
131413141514151615
16

Cloth
Cloth
Care
Care
２
１２
％
１％
Cloth
Care
２１
％

Profit attributable to owners of parent

4.5

3.8 3.8
3.8 3.8 3.8 4.8
4.84.83.8
3.8 3.8
3.8 4.5
Air Care4.54.5
Air CareAir Care
44％44％ 44％
3.83.83.8
3.83.83.8 4.84.84.8
3.83.83.8
Air Air
Care
Care
Air Care4.54.54.5
44％
44％
44％
3.83.83.8
3.83.83.8
3.83.83.8
Air Care
Air Care
Air Care
44％
44％
44％

Humidity
Humidity
Humidity
Care
Care
７
Care
％
７％７
％
Hand
Care
Hand
Care
Hand
Care
Home
Home
Care
Care
7％7％
Home
Care
7％
１１％
１１％ １１％
Hand
Hand
Care
Hand
Care
Care
Humidity
Humidity
７％
７％
Humidity
CareCare
７Care
％
１１
１
％
１％
１１％
Hand
Hand
CareCare
Hand
Care
ThermalCare
Thermal１
１
１％
１％ Care１１％
ThermalCare
1０％1０％ 1０％
ThermalThermalThermal
Care
CareCare
1０1０
％％
1０％
Cloth
Care ２
１
Cloth
％２１
Care
ThermalThermalCare
Thermal
Care
Cloth
Care
％ ２１％
1０1０
％％
1０％
Cloth
Cloth
Care
Cloth
Care
２１
Care
２
％
１％
２１％
16

121212131313141414151515161616

76

4.5 4.5

19,701
19,701
19,701
19,701
19,701
19,701
19,701
19,701
20,213
20,213
20,213
20,213
20,213
19,701
20,213
20,213
20,21321,08721,08721,08721,08721,087
20,21321,08721,08721,08722,60022,60022,60022,60022,60021,08722,60022,60022,60023,49623,49623,49623,49623,496
22,60023,49623,49623,49646,35446,35446,35446,35446,35446,35446,35446,35446,94446,94446,94446,94446,94446,35446,94446,94446,944
46,993
46,993
46,993
46,993
46,993
46,944
46,993
46,993
46,99348,26348,26348,26348,26348,263
46,99348,26348,26348,26348,351
48,351
48,351
48,351
48,351
48,26348,351
48,351
48,35112 121312
16
131413141514151615■Operating income (millions of yen)
●Operating income margin (%)

(%)

2,342

Net sales●Ratio of outside directors to total directors (%)
55.6●Ratioof femaledirectors
total directors (%)
55.6
55.6
55.6to 55.6
55.6

50.050.0
50.0
50.0
50.0 50.0
55.6
55.6
55.6 50.050.0 50.0
55.6
55.6
55.6
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
44.4
37.5
55.6
55.6 44.4
55.6
55.6
55.6
55.6
44.4
37.5 37.5
50.0
50.0
50.0
50.0
50.0
50.0
33.333.3
33.3
44.4
44.4
44.4 50.0
37.5
37.5
37.5
50.0
50.0
30.030.0 30.0
25.025.0 25.0
33.3
33.3
33.3
44.4
44.4 37.5
37.5
37.5
44.4
30.0
30.0
30.0
25.0
25.0
25.0
33.3
33.3
33.3
30.0
30.0
30.0
25.0
25.0
25.0
12
1312 1413 1514 1615
16

12

13

14

15

16

121212131313141414151515161616

121212131313141414151515161616

121212131313141414151515161616

121212131313141414151515161616

121212131313141414151515161616

121212131313141414151515161616

S.T. Group (in Japan)

9

Business at a Glance

Business by Category

Proprietary Brand

Market Share and Rank (Japan)

Deodorizers and Air Fresheners

Air CareTV commercial of “SHALDAN”(Deodorizers and
Air Fresheners)

27%(Market Share: No.2)

Deodorizers

78%(Market Share: No.1)

Cloth CareTV commercial of “Mushuda”(Mothproofing Agents)

Mothproofing Agents

50%(Market Share: No.1)

ThermalCare

Disposable Warmers(Disposable Warmers)(Market Share: No.2)

Hand Care(Gloves)

16%

Household Gloves

24%(Market Share: No.2)

Humidity
Care

Dehumidifiers(Dehumidifiers)(Market Share: No.1)

Home Care(Cleaners andOther Products)

38%

44
%
44
%
44
%
44
%
44
44%%

Composition of Net Sales

Sales/YoY

21,118Millions of yen

+3.9%

21
%
21
%
21
%
21
%
21
21%%

10,155

10
%
10
%
10
%
10
%
10
10%%

4,947

Millions of yen-2.4%

Millions of yen-18.8%

11
%
11
%
11
%
11
%
11
11%%

5,333

7
%
7
%
7
%
7
%
7
7%%

3,268

7
%
7
%
7
%
7
%
7
7%%

3,530

Millions of yen+5.2%

Millions of yen+11.1%

Millions of yen+2.8%

Strengthen Global
Business

The ratio of overseas sales is 7%. We strengthen global business as another driver of growth.

Promoting Capital andBusiness Alliances

We concluded contracts for capital and business tie-ups with FUMAKILLA LIMITED and NS FaFa Japan Co., Ltd.

Promoting New BusinessIn 2011, the technological brand “Clear Forest”, which was researched and developed in collaboration with research institutes, debuted.

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Market Environment

Salient Business Features and Strengths

Overview of Fiscal 2016 and Strategies Going Forward● The market is growing. Our performance was recovered ● Mainstay business division accounting for 44% of the ● As the performance of the new product “SHALDAN” Suteki
from the reduction in reaction to the increase inCompany’s total sales. A division that is expected toPlus and “Shoshu-Riki” Premium Aroma was healthy, sales
consumption tax.
experience future growth.
grew.
● Products focusing on fragrance and for cars are ● This division owns unique brands, including our largest ● This term, our company concentrates on the sale ofgrowing, with further growth anticipated.
brand “Shoshu-Riki” and “SHALDAN” and “Dashu-Tan”,
fragrance-oriented products and in-vehicle products. S.T.
which deodorizes air with the power of charcoal.
aims to cultivate new demand based on “Shoshu-Riki” and“SHALDAN”.
● The market is on a plateau and stable.
● A foundation business rivaling the importance of the Air ● The performance of “Kaori Mushuda” is favorable. Sales
Care category in terms of marketing.
declined, due to the effects of product return, etc. after the● With changes in storage styles, responding to diverse
renewal of “Mushuda” in the spring of last year.
needs will be the key in the future.
● This category comprises topline brands including“Mushuda” and “Neopara Ace”, which are well ● In addition to strengthening and fostering brands, cultivate
recognized for their reliability in protecting clothes fromand expand new demand.
moths.

● Climate change significantly impacts the market. Difficult ● Winter-based product range. Provide an additional ● Sales dropped, due to the downturn of the entire market
to differentiate products. Intense market competition.
point-of-sale management role linked to spring andamid the unusually warm winter around the end of last
autumn mothproofing agents.
year.
● Advantage of alliance products. Offer “Onpacks” and ● This term, our company will conduct efficient sales
other brands manufactured by Mycoal Corporation
activities, to cultivate and expand new demand.
in July 2003. Products are distinguished by theirestablished reputation for high quality, especially
products for feet.
● Both household and industrial-use markets are healthy. ● An inaugural, enduring division with a history of six ● Sales grew, because the performance of industrial nitrile
decades together with the Cloth Care category.
and household rubber gloves was good inside and outside● In addition to improving work efficiency, proposals forJapan.
improved functionality and added value are key points. ● This category is comprised of the “Family” series ofhousehold gloves, “Modelulove” series of industrial- ● In addition to strengthening and fostering brands, cultivate
use gloves and other products. Gloves with reinforced
and expand new demand.
fingertips and nitrile rubber gloves strong to piercing
have been released.
● The market is on a plateau. Difficult to differentiate ● This division has consistently led the market since ● Sales grew, because of the increase in sales of all products,
products. Intense market competition.
“Drypet” was first launched in 1981.
including the “Drypet” sheet type, for which the combined
use with a mothproofing agents is recommended.
● Putting forward value-added products that offer new ● This category is comprised of the mainstay brandfunctions and applications is critical to future growth.
“Drypet”, as well as other products including “Bincho- ● In addition to strengthening and fostering brands, cultivate
Tan Drypet”, which offers a deodorizing functionand expand new demand.
together with dehumidifying; a solid lineup including
refill- and sheet-type products.
● Robust conditions in the niche cleaner and mothproofing ● This division is currently fostering the niche cleaner ● Sales grew, because of the healthy performance of “Komeagents for rice bins markets.
market and is coordinating efforts to nurture other new
Touban”, the mothproofing agents for rice bins, andproducts that are under development.
“Ohisama-no-Sentaku”, a detergent for shoes in the nichemarket.
● It owns unique products, such as the cleaners in theniche market, including “Ultra Powers” and “Ohisama- ● Take up the challenge of entering new domains in order tono-Sentaku”, and the mothproofing agents for rice
secure further growth.
bins “Kome-Touban”.

We focus our strategy areas and category we promote overseas. Our strategy is focused on the ASEAN area and the category is on the Air Care.

By utilizing the complementary relations among the 3 companies, we aim to grow our businesses and increase profitability.

In 2013, we established the Clear Forest Division to create a new market of “air purifiers” for improving the quality of air.

Market share data is based on INTAGE Inc.’s “SRI Category with Filter”. (January to December aggregate; April to March aggregate for disposable warmers only)

11

Sustainability Overview

We aim to achieve the co-growth of enterprises and society, by meetingsocial requirements and expectations in good faith.
The Company considers sustainability as “actions for the mutual
development of the Company and society”. Our business utilizes
valuable resources provided by stakeholders, and we are aware thatthese resources are entrusted to the Company with the expectations
that they will be properly managed. In order to meet the expectations,
we will work on “Social Requirements (Social Responsibility)” and“Social Expectation (Value Creation using ‘an identity of S.T.’)”. ThroughPolicy of Sustainability

engagement we aim at mutual development with society by receivinga proper understanding of the Company and continuous support fromsociety.
As for sustainability, important issues (materiality) for both stakeholders
and the S.T. Group are included with reference to the opinions,requests, etc. from stakeholders.

Materiality● Utilization of unique air-care technologies

SocialExpectation(Value Creation)[Solving Social Issues]
S.T. is developing products that could make the living of customers more
comfortable with air, and proceeding with the air purifying business based on
new technologies. Since “SDGs”, there are growing social requirements andexpectations for “solving social issues”, and the S.T. Group considers thattackling these issues would lead to the creation of corporate value.
● Provision of safe, reliable products to consumers[Consumer Issues]
We consider that the manufacturers of daily necessities have a social
mission to make the living of consumers more comfortable and an
important obligation to offer safe, reliable products and services. If an
enterprise loses the satisfaction and trust of consumers, it will become
unable to survive. We recognize it, and take various measures.

Overview of Fiscal 2016 and Strategies Going Forward● <Products> [Ensure healthy lives (Creation of a new market “airpurifiers”)]Received the 40th Harushige Inoue Award and the “Award
for Excellence” at the Japan Resilience Award 2016 (hosted by the
Association for Resilience Japan).
● <Community> [Sustainable industrialization (new employment),
Sustainable manage forests] Concluded a comprehensive collaborationagreement with Kushiro City.
● [Protecting consumers' health and safety] Through PL Committee, etc.,
managed and shared the quality of the products.
● [Fair marketing, factual and unbiased information and fair contractual
practices] Provided the products/useful information, quality information,and other information, on its website etc.
● [Consumer service, support, and complaint and dispute resolution]
Received the “award for excellence” at the 19th Corporate Telephone
Manner Contest (hosted by Japan Telecom Users Association) for thesecond consecutive year.
● [Consumer data protection and privacy] Under the policies for personal
information protection and privacy, developed a management system andkeep checking it regularly.

●S ecuring and training of personnel[Labor Practices]

SocialRequirements(Social Responsibility)

Amid the significant turning point, including demographic changes andglobalization, if we cannot secure competent personnel who can respondto such changes, we will not be able to create corporate value sustainably.
The S.T. Group recognizes this, and is improving employment and labor
environments.

● [Employment and employment relationship] Promoted diversity. It madeefforts to establish systems where diverse workforce can thrive andnurture corporate culture that enhances driving force with brand value
management.
● [Human development and training in the workplace] Promoted compliancethat corresponds with the society’s expectations as the embodiment of
the brand and CSR. It will continue implementing the S. T. Reform (STR)
and human resource development.
● [Social dialogue] Promoted mutual understanding between management
and employees such as labor union.
● [Conditions of work and social protection] Encouraged employees to havea good work-life balance. Also encouraged employees to enjoy benefits
such as maternity leave and childcare leave.
● [Health and safety at work] Promoted activities to protect health andsafety of employees. The Business Continuity Plan (BCP) included plans
in preparation for disaster and disaster drills.

● Efforts based on environmentally conscious products,

manufacturing and distribution processes[Environment]
S.T. Group (in Japan) actively engages in the countermeasures for climatechange, which is required globally, and tackles various environmental
issues that would be influenced by business activities.

12● [Climate change mitigation and adaptation] CO2 emission was 3,688t. We
will explore ways to utilize renewable resources.
● [Prevention of pollution] Waste products generation has been reduced.
● [Sustainable resource use] Successfully reduced the amount of powerusage.

Corporate Data

Company namePaid-in capitalGroup companies

S.T. CORPORATION¥7,065,500,000

S.T. Trading Co., Ltd.

Headquarters

Employees (as of March 31, 2016)

S.T. (Thailand) Co., Ltd.

4-10, Shimo-ochiai 1-chome, Shinjuku-ku,

Consolidated: 860

Family Glove Co., Ltd. (Taiwan)

Tokyo 161-8540, Japan

Non-consolidated: 406

S.T. Korea Corporation (South Korea)

Telephone +81-3-3367-6111(excluding part-time and temporary employees)

Japan Aroma Laboratory Co., Ltd.

S.T. Business Support Co., Ltd.

Shaldan (Thailand) Co., Ltd.
Establishment
August 31, 1948

Stock listingFirst Section, Tokyo Stock Exchange

Account settlement date
March 31

Overview of Communication Tools

Creating Corporate Value Report 2016
(Japanese edition / English edition)

DigestAn easy to understand annual report (pdf) on activities
aimed at creating corporate value for all stakeholders.

Corporate Information Website

Corporate Profile 2016

In addition to introducing each of theCompany publications, the Corporate
Information Website is a comprehensive toolthat provides the latest information and an
overview of S.T. CORPORATION to all
stakeholders.

A compilation and comprehensive tool
overviewing the Company as a whole ina Data Book (pdf) format for the benefit
of investors.

Creating Corporate Value Report 2016
Financial Section

Investors’ Guide 2016

(Japanese site / English site)

Overview(English edition)

Specialized data

Compilation Data Book (pdf) and separate
supplement containing financial data for themost recent fiscal year.

(Japanese edition / English edition)(Japanese and English compilation)

Compilation Data Book (pdf) covering
10 years of quantitative information on
the Company’s corporate activities for
institutional investors.

Communication tools are available within the Library section of the Company’s Corporation Information Website.

13

4-10, Shimo-ochiai 1-chome, Shinjuku-ku, Tokyo 161-8540, Japan
http://www.st-c.co.jp/english/company/ index.html
Printed in Japan, August 2016