エステーAR表1-4 05.8.2 1:54 PM ページ 2

Shifting emphasis fromvalue to growth!
ANNUAL REPORT 2005
For the Year Ended March 31, 2005

エステーAR再校戻しデータ 05.8.2 1:18 PM ページ 1

CONSOLIDATED FINANCIAL HIGHLIGHTS

Thousands of
U.S. dollars (Note 1)

Millions of yen
Years ended March 31,

Net Sales
Operating Income

2001

2002

2003

2004

2005

2005

¥37,896

36,92138,06645,082

44,109$410,737

2,399

1,983

3,798

3,419

3,748

34,902Net Income

750

509

1,431

1,451

1,823

16,978R&D Expenses

343

408

490

413

423

3,938

Capital Expenditures

1,600

1,137

733

404

880

8,194

Total Assets

34,382

32,921

34,73236,26936,959344,158

Shareholders’ Equity

25,78225,606

26,04826,69327,449255,603

Equity Ratio (%)

75.0

77.8

75.0

73.6

74.3

—

ROE (Note 2)

2.90

1.99

5.50

5.50

6.74

—

ROA (Note 3)

7.98

6.94

11.67

10.07

10.85

—

Net Income¥23.60

16.37

46.53

48.87

63.43

$0.59

Shareholder’s Equity

822.21

833.01

874.85924.33957.45

8.92

8.00

8.00

10.00

17.00

22.00

0.20

Per Share

Yen

Cash Dividends

U.S. dollars

Notes: 1. All dollar figures herein refer to U.S. currency. Yen amounts have been translated, for convenience only, at ¥107.39= $1, the approximate exchange rateon March 31, 2005.
2. ROE = Net Income / Shareholders’ Equity
3. ROA = (Operating Income + Interest and Dividends Received + Purchase Discount) / Total Assets

Net Sales

Net Income(Millions of yen)

(Millions of yen)

Total Assets/
Shareholder ’s Equity
36,95927,44936,26926,69334,732
26,04832,92125,60604

34,382

03

25,782

1,823
1,451

05

1,431

44,109

04

509

750

45,08238,06636,92137,896(Millions of yen)

01

02

03

01

02

05

01

02
Total Assets

1

03

04

05

Shareholders’ Equity

エステーAR再校戻しデータ 05.8.2 1:18 PM ページ 2

A MESSAGE FROM MANAGEMENT

The management reforms we have instituted over the past seven years or
so have produced satisfactory results in the areas of management structure, product development, marketing, and brand power enhancement.
We will boldly undertake additional reforms, and build a corporate structure that will allow higher management efficiency while increasing corporate value.

Grasping the Market and Operating Environments

the past year. Although soaring crude oil prices drove

Last year’s drastic changes in Japan’s capital markets

up the cost of materials, operating income grew 9.6%

have created an environment in which strong firms

to ¥3.7 billion, while net income jumped 25.6% to ahave become stronger. We believe this represents a sig-

record high of ¥1.8 billion. Taking market share as one

nificant opportunity for S.T. Chemical. Grasping theaxis and profits as the other, we were able to substan-nature and direction of changes in the economic envi-

tially increase our profit margins through the energeticronment will allow us to become a stronger company,

implementation of management reforms focused on ourand to practice management that will raise our corpo-

core brands. We are moving toward our goal of becom-

rate value.

ing a sturdy and compact company.

Downward pressure on consumer prices shows nosign of abating. With the exception of competing on the

The Aims of Management Reformbasis of price, we know of only one way to gain con-

1. Becoming the top firm in the air care fieldsumer demand for our products, and that is to create

Sales of the Air Care Group accounted for 44% of total

distinctive, high-value-added products in accordance

net sales for the fiscal year under review, making it thewith our guiding principle and motto, “Doing things nomost significant of the Company’s core businesses, andother company in the world does.”its primary focus. Our share of the market for air careproducts has grown steadily since I acceded to the pres-

Performance

idency, and we are now in the number-two slot. Core

During fiscal 2005, ended March 31, 2005, net sales

brands such as Shoshu Riki, Shoshu Pot, and Shoshu

edged down 2.2% to ¥44.1 billion. This was primarily

Plug are performing well. We will continue to heighten

the result of declines in retail prices, the effects of the

our focus on the air care business in a drive to movenew requirement that products display prices inclusive

into the number-one position.

of consumption tax, and the unusual weather during
2

エステーAR再校戻しデータ 05.8.2 1:18 PM ページ 3• Our business objective is to build, maintain, and expand asolid customer base. We are not simply a manufacturer.
Through our products, we offer families excitement and satisfaction.
• Emphasizing creativity and innovation, we are doing things
no other company in the world does. By thinking for ourselves, and standing on our own two feet, we are offering
distinguishing products.
• We aim to hold a commanding share of our niche market,
and look to take full advantage of our strengths so that we
can succeed.

2. Further strengthening brand power

needs, and we have sought alliances with selected

During fiscal 2005 we concentrated management

domestic and overseas firms. Two such alliances areresources in core brand operations, and thoroughly

those with Sumitomo 3M and Fumakilla Indonesia

enhanced our brand power. We improved leading air(PT), which continue to function smoothly. Acting oncare products and linked those improvements to in-

the basis of this concept, we will in the future seek

store campaigns and television commercials, thereby

strategic alliances that employ the complementary

achieving a significant jump in sales. This clear strategy

strengths of S.T. Chemical and its alliance partners.

of focusing our efforts had solid effects. Our advertising capabilities received recognition when a study by

4. Shareholder returns and the investment environment

the CM Research Center ranked us 34th out of about

We take pride in the fact that our shareholder return2,000 Japanese companies for “Most Appealing

policies are among the best of any Japanese company.

Commercials.” This was a dramatic jump from the pre-This is the third consecutive fiscal year in which we

vious year when we were placed 145th. This leap washave substantially increased dividends, increasing themthe second largest of all Japanese companies.

from last term’s ¥17 per share to ¥22, for a payout

We will continue to strengthen our brand power

ratio of 42%. Together with this, we acquired 400,000

out of our conviction that “the strong become

shares of treasury stock during fiscal 2005. With thisstronger.”purchase, we have acquired more than 15% of S.T.
Chemical’s issued and outstanding shares. To further

3. Strategic alliances

benefit our shareholders, we have improved the invest-

Forging alliances is one of the most important strategies

ment environment for individual investors by reducing

leading to growth. Up until the present, our central

the number of shares that constitute a trading unit ofthrust has been increasing our corporate value by

our stock.

means of a product lineup that matches consumer
3エステーAR再校戻しデータ 05.8.2 1:19 PM ページ 4

A MESSAGE FROM MANAGEMENT

5. Shifting to a “company-with-committees structure”

depth of talent. Reform initiatives in the humanIn accordance with our emphasis on corporate gover-resources area have made a considerable impact on thenance in management, in June 2004 we shifted to adevelopment of corporate culture and have played acompany-with-committees structure, which haslarge role in overall management reforms. We will con-

allowed me as an executive to create a sense of urgency.

tinue with further changes.

To further increase management transparency andfairness, we have increased the proportion of outside

Strategies in Fiscal 2006

directors on our board this year from 50% to a

Our management reforms have only just begun. Firstly,

majority.

we are making progress with our strategy regarding theprice of our stock, which is the most important man-

Current Management Issues

agement indicator. This is to say that we are striving to

To avoid the risks associated with seasonal variations,increase shareholder value.

we will expand our operations in the home care catego-

Again this fiscal year we are emphasizing profits as

ry to specialize in niche markets. If S.T. Chemicala key factor in management decision making. It is

grows to the level of ¥100 billion in net sales, we will

essential that we discontinue general products that

be able to carve out a considerable position in the homecompete on the basis of low price and focus on uniqueproducts industry.

products that enjoy both high value and high pricing.

Our human resources policies are characterized bya significant delegation of authority and responsibility

In this way we will cement a solid position for ourselves
within the industry.

in a participatory management structure. As a result of

The innovations we have implemented to the pre-the recruiting of more women and hiring from outside

sent, in the areas of product development, marketing,

the Company, we are steadily developing an increased

and advertising, which were aimed at winning the top4

エステーAR再校戻しデータ 05.8.2 1:19 PM ページ 5

market shares for our core brands and achieving major

hoping to eventually affect lifestyle changes in Japan asenhancement in brand value, have shown major effects.

well as providing a strategic vision for S.T. Chemical.
I ask for your continued support and understand-Future innovation will target manufacturing operations, where further productivity gains are expected toing of the Company’s management strategy.

bring significant increases in profit ratios resulting fromthe contraction of the cost of sales ratio.

July, 2005

Long-Term Vision
S.T. Chemical has succeeded in shifting its focus fromthe cloth care business, which had been one of theCompany’s most important operations since its estab-Takashi Suzuki

lishment, to the air care business, which boasts a line of

President and Chief Executive Officer
Chairman of the Board

value-added products. I think it is critical to our future
growth and development that we expand our presencein other home care markets. We can achieve major
growth within a short period by uncovering promisingniche markets and developing them.
We have adopted the slogan, “Refreshing the Air,”for the entire Company. We want to refresh the air
indoors and out. We want to refresh the air in homes,
offices, and stores. By introducing more innovative
products to the market under this new theme, I am
5エステーAR再校戻しデータ 05.8.2 1:19 PM ページ 6

S.T. CHEMICAL AT A GLANCE

S.T. Chemical products bring a touch of excitement to everyday life. Product development emphasizes
the value of understanding through listening, seeing, and using, delivering unique products that areboth exciting and beneficial. We have adopted the slogan of “Refreshing the Air” pursuing innovative
product development as we strive to create a powerful brand.

CATEGORY

CATEGORY SHARE

Cloth care (mothproofing agents)

MAJOR BRANDS

Composition of Net Sales• Mushuda

MOTHPROOFING AND HYGIENE-RELATED PRODUCTS

22%

33%

• Neopara>
2002

Hand care (gloves)

2005

Composition of Net Sales• Family

7%

8%
>
2002

Thermal care (disposable warmers)

2005

Composition of Net Sales• Onpacks

11%

2005

Air care (deodorizers and air fresheners)

Composition of Net Sales• Air Wash

44%

HOUSEHOLD ENVIRONMENT-RELATED PRODUCTS

43%• Shoshu Riki
• Shoshu Pot• Shoshu Plug>

• Dasshutan
2002

Humidity care (dehumidifiers)

2005

Composition of Net Sales• DryPet

6%

9%
>
2002

Home care (other products)

2005

Composition of Net Sales• Finish9%

7%• Powers• Kome-Touban• Scotchgard>• Nexcare
2002

6

2005

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HIGHLIGHTS OF FISCAL 2005
Net sales in the Cloth Care Group declined 7.5% to ¥9,861 million, affected by a shrinking market scale caused by a shift inproduct-use cycles—previously, six months, now 12 months—and by low temperatures from February to March of this year.
While the cost of some raw materials increased due to rises in crude oil prices, S.T. Chemical made vigorous efforts todecrease other raw material costs, improve cost of sales through more efficient production, and slash selling, general andadministrative costs. As a result, income in the Cloth Care Group rose and supported other business segments.

Net sales in the Hand Care Group decreased 8.5% to ¥3,166 million. Though industrial gloves led a slight increase in sales
volume, overall sales results dropped due to the influence of price reductions for glove shipments to a joint-venture sales
subsidiary, established in August 2004.

The Thermal Care Group commenced operations in July 2003, and product returns that did not occur in April to June of theprevious year were concentrated in April to June of the fiscal year ended March 31, 2005. This caused negative net sales
figures for the first quarter of the fiscal year under review. In addition, an unseasonably warm winter and other adverse
weather conditions contributed to the drop in net sales of the Thermal Care Group, finishing at ¥4,871 million, down 14.7%
from a year earlier.

Sales volume of core brands Shoshu Riki and Shoshu Pot rose significantly and contributed to income growth, supported byproduct upgrades and by concentrated advertising investment. Moreover, core brands in the Air Care Group increased theirmarket share, including for refrigerator deodorizer Dasshutan. As a result, sales in the Air Care Group rose 5.1% comparedwith the previous fiscal year to ¥19,457 million.

Net sales in the Humidity Care Group fell 15.8% from the previous fiscal year to ¥2,592 million. Primary causes of thedecrease were stiff pricing competition from other makers and the unavoidable drop in volume caused by the dry rainyseason. Operating income rose in this group, however, on the back of marketing policies formulated for the securing of
profits.

Net sales in the Home Care Group climbed 13.4% to ¥4,159 million. Products that recorded sales growth included Finish, adishwashing powder for automatic dishwashers that saw market expansion, and Kome-touban, used to repel insects from
uncooked rice. Sales of a new bathtub cleaner released in September 2004 were also strong.
In addition, products that we market in an agreement with Sumitomo 3M continued to contribute to sales growth, including
the Scotchgard brand of products that we began marketing in August 2004.

7

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REVIEW OF OPERATIONS

8

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AIR CARE (Deodorizers and Air Fresheners)

Net Sales

Shoshu Pot

Shoshu Plug

Dasshutan

02

19,457

Shoshu Riki

18,506

Air Wash

17,36015,861(Millions of yen)

03

04

05

Air Care is one of S.T. Chemical’s core businesses, and thevious fiscal year. Acting on the basis of our “Refreshing theCompany is increasing sales in this area as its market share

Air” concept, we have introduced several new products andsteadily expands. Last year the Company concentrated man-

have created new markets for them. Among these are the newagement resources in core brands, while coordinating product

Air Wash products, which have antibacterial and deodorizing

development, advertising, and in-store promotions. As a result,capabilities, and the battery-powered Shoshu Plug, whichsales of our three major air care products, Shoshu Riki, Shoshu

requires no electrical outlet. These products are selling well.

Pot, and Shoshu Plug jumped 120% in comparison to the pre-

CLOTH CARE (Mothproofing Agents)

Net Sales

9,861

Mushuda(for drawers)

10,656

Mushuda(for closets)

11,491

Mushuda(for wardrobes)

12,167(Millions of yen)

02

03

04

05

Neopara Ace

MushudaMatomete Cover

The Cloth Care Group is second only to the Air Care Group as

designed for large storage spaces, and Mushuda Matometea marketing priority. Our Mushuda brand is trusted to protect

Cover, a covering for clothing storage that contains mothproof-

clothing from insects, and enjoys a formidable level of cus-

ing agents. This, together with strong marketing efforts, gave

tomer loyalty. Again in fiscal 2005, this brand displayed strong

us the lead in the mothproofing agent market. The Neopara

market presence and held the top share of its market. We

line, with its traditional Japanese paper and trusted orange

expanded our product lineup in response to the diversification

packaging, has for many years been a familiar sight to con-of clothing-storage methods, introducing Mushuda Fan forsumers.

walk-in closets, a battery-operated unit with an integral fan

HUMIDITY CARE (Dehumidifiers)

Net Sales

DryPet(for wardrobes)

DryPet Futon
Kaiteki Sheets

Binchotan DryPet

DryPet Compact

02

03

04

2,592

3,078

2,766

3,200

(Millions of yen)05

Since DryPet dehumidifiers went on sale in 1981, they have

we introduced Binchotan DryPet, which has increased

continuously led the market. Our broad lineup includes prod-absorbency and contains binchotan, a high-quality charcoal,ucts for different locations and applications, including DryPet

which gives it deodorizing effects. Together with unpleasantCompact, with its environmentally conscious design, dehumidi-

odors, this high-value-added product also adsorbs formalde-fier sheets for drawers and casings for clothes, and Futon

hyde and other chemicals.

Kaiteki Sheets for placing underneath bedding. Last fiscal year
9

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REVIEW OF OPERATIONS

10

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HAND CARE (Gloves)
Net Sales

Family Squalene

Family Middle
Thick PVC Gloves

Family Thin
PVC Gloves

03

04

3,166

02

3,460

3,166

Family Chamomile

3,024(Millions of yen)05

The Family series of household gloves are high-value-added

gloves with squalene additives that are gentle on the hands, andproducts that not only protect the hands, but soothe the skin.

high-value-added gloves with chamomile extract in a special

S.T. Chemical is meeting customer needs and heightening its

foam layer that is gentle on the skin and prevents hands frombrand value through the development of unique products, such

becoming hot and sticky.

as its series of fingertip-reinforced regular household gloves,

HOME CARE (Cleaners and other products)
Net Sales

FinishUltra Powers

Kome-Touban

Scotchgard

4,159

3,666

3,279

2,667

(Millions of yen)

Nexcare

02

03

04

05

The Home Care Group handles various products that have spe-

Sarayu Fukkatsu, which keeps the water in a Japanese bathcial characteristics. Among these are Finish, a dishwashingclean. S.T. Chemical is also taking concrete steps to expand its

powder for automatic dishwashers; Ultra Powers, which cleans

product lineup through an alliance with Sumitomo 3M, includ-

washing machine tubs; Senjotan for cleaning household drain

ing Scotchgard water and oil repellent and Nexcare brand ban-pipes; Kome-touban, to protect uncooked rice from insects; anddages.

THERMAL CARE (Disposable warmers)
Net Sales

Haru-Onpacks

Koshimomi-Onpacks

Katamomi-Onpacks

Ashipoka-Sheet(for feet)

04

4,871

5,712

(Millions of yen)05

In July 2003, S.T. Chemical began marketing Onpacks brandback) and Koshimomi-Onpacks (for shoulders) with gel con-disposable warmers manufactured by Mycoal Corporation.

taining aloe supplements that can be placed directly on the

Today the product line includes Katamomi-Onpacks (for the

skin.

11

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SPECIAL FEATURES 1

THE PATH OF INNOVATION TO “REFRESHING THE AIR”
In January 2004, S.T. Chemical adopted a new slogan, “Refreshing the Air.” The new slogan represents
our desire to bring a greater level of comfort into our customers’ lives, improving not only the air andatmosphere of stores, homes, and workplaces, but of the entire Japanese society. Working in unity
under this slogan for the benefit of our customers, we will continue with our assorted projects, embellishing them and pursuing innovation in all of our business activities.

Air Care Group● Looking at the composition of our net sales in fiscal 2000, the Air Care Group at 31% of total
net sales was second to the Cloth Care Group, which held 43%. In order to turn the air care business into the backbone of the Company’s operations, we carried out in-store promotions linked
with product development and advertising efforts. As a result, air care products grew to hold thenumber-one position in the composition of net sales in fiscal 2002. In the fiscal year under review,
we purposefully concentrated management resources on our three core brands, Shoshu Riki,
Shoshu Pot, and Shoshu Plug. At the same time that we enhanced the brand value, we also succeeded in expanding sales and market share.

A Refreshing Approach to Corp orate Strategy
Management Innovation

Marketing Innovations● As a result of our focused
efforts during the fiscal year
under review to link productdevelopment, television commercials, and in-store promotional activities, we achieved
significant sales increases in
our three core brands, Shoshu
Riki, Shoshu Pot, and Shoshu
Plug.

〈Streamlining Power〉
Product
strength

Customers First
Marketingstrength

Advertisingstrength● A study by the CM Research Center ranked us 34th out of about
2,000 Japanese companies for “Most Appealing Commercials,
2004” for our television commercials promoting our Shoshu Pot,
Shoshu Riki, and Mushuda products. This was a dramatic jumpfrom the previous year, marking the second largest jump of all
Japanese companies covered in the study.

Shoshu Pot commercial

Shoshu Riki commercial

Mushuda commercial

12● In June 2004, we shifted to a company-withcommittees structure with the aim of enhancing
the speed of decision-making and flexibility ofoperations, and increasing management transparency and fairness. We established a
Nominating Committee, an Auditing Committee,
and a Compensation Committee, each of which
are over half composed of outside directors inorder to create a more effective management
oversight structure.

Reducing the Number of Shares in a Trading Unit
● S.T. Chemical recognizes that reducing thenumber of shares in trading units of stocks is aneffective means of increasing the liquidity ofstocks in the market, in that it creates an environment in which it is easier to invest in stocks. For
this reason and to make our stock attractive toindividual investors, following a comprehensive
analysis of our stock price, number of shareholders, and financial position, on October 1, 2004 a
trading unit of stock was reduced from 1,000
shares to 100 shares.

エステーAR再校戻しデータ 05.8.2 1:22 PM ページ 13

Alliances● S.T. Chemical is actively forming alliances with firms that can make effective use of its
marketing capabilities. With the cooperation of foreign companies, S.T. Chemical is domestically marketing “Finish” brand dishwashing powder for automatic dishwashers made by
Reckitt Benckiser plc. and “Ambi-Pur Fresh,” an on-tank aromatic toilet cleanser producedby Sara Lee. Furthermore, the Company has an agreement with Mycoal Corporation, aJapanese company, covering the marketing of their Onpacks disposable chemical warmers.
In 2004, S.T. Chemical tied up marketing operations with Sumitomo 3M to sell popularhome-use products such as Scotchgard, a water and oil repellent, and Nexcare brand bandages. In July 2004, the two companies established a joint-venture sales subsidiary to market
Sumitomo 3M’s Scotch-Brite sponges, and S.T. Chemical’s Family Gloves, Zippers, Gekipika
and other attractive products. Then, in January 2005, we commenced the manufacturing andsales of aromatic deodorizers through a tie-up with Fumakilla Indonesia (PT). The rapid
expansion of Indonesia’s middle-income stratum is forecast to elicit growth in demand.

p orate Strategy
Research and Development

Japan Aroma Laboratory Co., Ltd.

● The Company released Air Wash in February 2005, andthis product is quickly creating a new market for itself. With
ingredients primarily composed of water and air, the addition of Shoshu Riki’s deodorizing technology gives thisbreakthrough product the ability to “Wash the Air.” Its
ultrafine mist contains antibacterial and deodorizing properties that cleanse the air of foul odors and airborne bacteria,
and work to eliminate adhesive bacteria from floors andother surfaces.

● Japan Aroma Laboratory Co., Ltd. was established in
January 2004 to meet a need for more sophisticatedproduct development in the air care business. This institution is engaged in specialized research, which is
focused on the scientific study of air quality from a variety of perspectives. S.T. Chemical will leverage businesssynergies and promote research and development that
focus on products that not only deodorize the air, butalso gently stimulate and relax the mind and body.
Moreover, research successes attained through ties withresearch institutions not affiliated with S.T. Chemical
are widely publicized, and are used as a basis for making
sweeping proposals.

● In 2004, to strengthen the three existing core brands,
Shoshu Pot, Shoshu Riki, and Shoshu Plug were upgradedwith new fragrances added to the lineup. By closely linking
marketing and advertising activities, sales and market share
were significantly increased.

13

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SPECIAL FEATURES 2

AIR CARE PROJECT: CREATING AND NURTURING A POWER BRAND
S.T. Chemical has carried out vigorous efforts to build and implement a comprehensive strategy for the
expansion of its air care business, and it is through these efforts that the Company has attained the market
share that it enjoys in the industry today. Since 1998, The Company has fostered the creation of powerbrands by significant streamlining of its product lineup and focusing on management resources to strengthen core businesses. Under the slogan of “Refreshing the Air” since 2004, S.T. Chemical has been striving tofurther strengthen its business platform centered on the air care business, and is actively promoting the
growth and strength of Company brands.
The Company created aWith a product conceptof “strong and long-lasting,” this toilet deodorizer utilizes plant extracts
for powerful deodorizing
effects, and its large
container makes it an
economical choice. Over
10 million units weresold in its first year on
the market.
This hit toilet deodorizer
utilizes a super clear gelthat contains natural
deodorizing agents, selling over 10 million units
in its first year. This
product was the forerunner of our streamlining and focus strategy.

Net sales（Millions of yen）

20,000

Shoshu Riki
for Toilets

Market share of air fresheners
Air care net sales

Dasshutan
for Refrigerators

12,000

8,000

1998

● Market Data

Shoshu Plug

Shoshu Riki brand added a room deodorizer to
its product lineup. Noted
for its unique, asymmetrical design.

Shoshu Rikifor Rooms

This potent deodorizer’s
strength comes from a
combination of charcoal
ingredients, including thespecial charcoal binchoutan. Because thecharcoal in a gel form
shrinks, it is easy to see
when replacement isneeded, leading to ahigher rate of repeat
users. Dasshutan quickly
gained market share after
its release.

Ambi-Pur Fresh

Dasshutan for
Freezers andvegetable
drawers ofRefrigerators

These were added tothe product lineup of
the popular Dasshutan
brand, leading to a dramatic increase in market
share. The Dasshutan
deodorizer for refrigerators claimed the market’s top share in 2002.

Note: To adjust for its fiscal year change in 1999,
S.T. Chemical’s sales only covered a nine-month
period ( July 1999-March 2000). However, for the
purposes of comparison, the dotted green line
represents our 12-month sales projection for that
period.

Streamlining Items

0

new market for thisinnovative plug-type
electric room deodorizer, which has become aclassic example of ahigh-priced, high-valueadded product. Repeat
user ratio exceeds 60
percent.

Shoshu Pot
for Rooms

Shoshu Pot
for Toilets

16,0004,000

A room deodorizer wasadded to the productlineup of the popular
Shoshu Pot brand. The
first model was wellreceived for its fashionable appearance and twolayer clear gel.

1999

2000

2001

SRI Monthly Data
Period: 2000: April 1999 - March 2000 / 2005: April 2004 - March 2005
Area: Japan, by market category

Air Care (Air fresheners)

Refrigerator Deodorizers

Toilet Bowl and Air Fresheners(Excluding cloth deodorizers)

26.8% >
2000

39.7%
2005

“

0.9% >
2000

56.2%
2005

14

4.2% >
2000

11.5%
2005

2002

2003

エステーAR再校戻しデータ 05.8.2 1:22 PM ページ 15

The Company created a
new market under the
product concept of“Wash the Air,” unveiling this unique productthat eliminates foulodors and bacteria with
an ultra-fine mist.

“Refreshing the Air”
Our second plug-type
electric room deodorizer,
this product is equippedwith a negative ion
generator—the world’s
smallest at the time.
Though this is a higherpriced product, it is alsoa unique, high-valueadded item, and its
market is expanding.
Shoshu Plugfor Pets

Shoshu Plugfor Cars

Shoshu Rikifor Rooms

The Company beganselling seasonal fragrance items in 2002,
leading to a significant
increase in consumer
interest in deodorizers
and contributing to the
expansion of the market.
(Photo: 2002 sunflower
scented deodorizer)

Shoshu Pot
for Rooms

Shoshu Pot Room was
upgraded with a new
design and fragrance,
based upon principles
of aromatherapy. A mild
fragrance creates a healing, relaxing mood.

Negative Ion Plug

Shoshu Riki
Toilet Spray

The Shoshu Riki brand
was complemented witha newly developed
wide-angle jet spraydeodorizer for the toilet.
Unpleasant odors are
rapidly extinguishedwith a spray field covering triple the area of
conventional products.
Sanitizing agents arealso included.

Japan’s first liquid, ontank aromatic toilet
cleanser, released inalliance with Sara Lee
Corporation. S.T. Chemical and Sara Lee also
jointly developed aholder to fit on the tankof Japanese toilets.

Ambi-Pur Fresh,
Perfume Selection

Renewal of Three Core Brands

Shoshu Plug
Essential Oilln

Refreshing oil essences areincluded in the fragrance
blend, and refill packs areattached. Pure oils extracted from herbs and plants
make for a room refreshingboth in body and in mind.
The lemon grass fragrance
enhances refreshment andthe chamomile fragrance
relaxes.

Shoshu Rikifor Rooms

Shoshu Riki
for Toilets

Shoshu Pot
for Toilets

Shoshu Pot
for Rooms

Air Wash

Battery-Powered
Shoshu PlugA battery powered
Shoshu Plug was added
to the lineup for use
anywhere. It is effective
in wide spaces due tothe utilization of a
newly developed 360degree rotating fan
based on microcomputer control technology.
This product is contributing to the rapid
market share increase of
the Shoshu Plug series.

The three core brands of Shoshu
Pot, Shoshu Riki, and Shoshu Plugwere upgraded with new fragrances
added to the lineup. Under the concept of “Refreshing the Air,” productdevelopment, advertising, and sales
promotion were closely linked, andsales and market share were significantly increased.

This luxurious European
fragrance comes in afine pearl design andpastel color, drawing aclear distinction between
existing products. This
product creates a more
comforting toilet environment.

Share
（%）

40

Blue Enzyme
Power Bleaching
Plus

This two-in-one typepower cleaner contains
both enzyme and bleaching ingredients. Annual
sales of this productseries exceed 10 million
units per year.

35

30

25

2002

2003

2004

● Shifts in the Fragrance Business

2005

(%)

—Increasing popularity of sweet fruit-based scents—

25

Consumer preferences are undergoing significant changes from “fresh” fragrances

20such as “green” and “citrus” to sweeter floral and fruity fragrances. In recent years

15

the market for grapefruit and orange scented deodorizers has been growing. The

10market in the years to come is expected to continue seeing growth in the areas of5juicy fruit scents and mixed fruit scents.

0

15

Sales Composition by Type of Fragrance（％）
For Rooms
For Toilets

No
Lavender Citrus
Fragrance

Mint
Herb

Soap

Water

FloralPeach

Strawberry

Other
FruitsOtherエステーAR再校戻しデータ 05.8.2 1:22 PM ページ 16

MANAGEMENT’S DISCUSSION AND ANALYSIS

Net sales

Operating income

In the fiscal year ended March 31, 2005, consolidated net sales

Notwithstanding the drop in total net sales, strong perfor-

fell ¥973 million, compared with the previous fiscal year, tomances in the Air Care and Home Care Groups contributed to¥44,109 million. Results are attributed to continued intense

an increase in earnings. Income also benefited from improve-competition, a drop in product prices, and inclement weather,ments in the cost of sales, while an overall reduction in operat-

culminating in overall difficult operating conditions. In the Air

ing costs offset the increase in advertising and promotion

Care Group (deodorizers and air fresheners), sales of mainstay

expenses. For the fiscal year under review, selling, general andbrands including Shoshu Riki, Shoshu Pot, and Shoshu Plugadministrative (SG&A) expenses declined 4.7% year on year.

were strong, underpinning a significant increase in sales.

As a result of these factors, operating income rose 9.6%,

Performance was also buoyed by robust sales of new products

compared with the previous fiscal year, to ¥3,748 million.

by the Home Care Group. Results of the Cloth Care Group

Research and development expenses, one element of SG&A,(mothproofing agents), however, were depressed as the market

edged up 2.4% to ¥423 million.

continued to shrink due to the shift in consumer demands fromsix-month to 12-month products and the unusually low tem-

Other income (expenses)

peratures in spring. Sales of this segment fell below the previous
fiscal year’s level. Sales of the Thermal Care Group (disposable

Other expenses fell 19.8% to ¥540 million. Major components

warmers) were also weak impacted by the warm winter.

were interest received, which surged ¥11 million, or 41.1%,

Having commenced operations in July 2003, conditions were

cash purchase discounts, which rose ¥16 million, or 8.5%, andfurther exacerbated by the return of merchandise from the

cash sales discounts, which climbed ¥15 million or 1.9%. In the

April through June quarter, which the Company did not expe-

fiscal year under review, the Company also recorded a loss onrience in the previous fiscal year. Sales in the Humidity Caresales of fixed assets totaling ¥56 million.

Group (dehumidifiers) were poor again affected by the unusual
weather conditions, particularly the absence of the customarybaiu (rainy season).

Net income
Net income increased ¥372 million, or 25.6%, compared withthe previous fiscal year, to ¥1,823 million. Income before

Cost of sales

income taxes and minority interests was ¥3,209 million, up

The cost of sales declined ¥483 million, or 1.9% year on year,¥463 million from last fiscal year’s ¥2,746 million. Net income

from ¥24,973 million to ¥24,490 million. Despite the sharp

per share was ¥63.43, a significant rise from ¥48.87 in the pre-increase in crude oil prices and the general trend toward rising

vious fiscal year.

material costs, the drop in the cost of sales is attributed toCompany-wide efforts to reduce costs. During the six-year period, which commenced in 1999, the Company worked diligently
to streamline its new product lineup and reduce inventories. At
the same time, efforts were made to standardize production
reducing the adverse impact of material costs due to changes inseasonal demand. As a result of these initiatives, the cost of
sales has improved significantly, particularly in the mainstay
categories of Cloth Care and Air Care.

Financial position
Total assets rose ¥690 million to ¥36,959 million as of the endof the fiscal year. Current assets also expanded ¥1,244 million,
or 5.8%, to ¥22,784 million. Major components were cash andtime deposits, which jumped 18.9% to ¥10,456 million, andinventories, which edged up ¥100 million to ¥3,769 million.
Total fixed assets declined ¥554 million, or 3.8%, to¥14,175 million. Investments and other assets also declined

16エステーAR再校戻しデータ 05.8.2 1:22 PM ページ 17¥435 million, or 6.8%, to ¥5,933 million. This is mainly attributed to a drop in investment securities.
Current liabilities edged up ¥23 million, or 0.3%, com-

Accounting for all these factors, cash and cash equivalents
increased ¥861 million at the end of the fiscal year totaling¥9,633 million.

pared with the previous fiscal year-end. The increase in trade
payables was offset by a drop in other payables.
During the fiscal year under review, the Company acquired
400,000 shares of treasury stock for a cumulative total as ofthe end of the fiscal year of 5,180,000 shares with a value of¥4,100 million. Of this total, the Company has retired
3,180,000 shares of treasury stock for a balance as of March
31, 2005 of 1,670,000 shares.

Capital expenditures
Capital expenditures more than doubled from ¥404 million in
the previous fiscal year to ¥880 million. Investment in theHousehold Environment-Related Products segment made up
more than 90% of capital expenditure while the residual was
directed toward the Mothproofing and Hygiene-Related
Products segment.

Financial indicators
Despite ongoing efforts to reduce the number of products in its
lineup, the Company has continued to allocate management
resources in selected areas. As a result ROE improved from
5.5% to 6.7% and ROA increased from 10.07% to 10.85%.
Shareholders’ equity per share of common stock rose from¥924.33 to ¥957.45. The shareholders’ equity ratio climbed to74.3%, while the interest coverage ratio was 2,623.4 times.

Dividends
Management has raised the year-end dividend by ¥2 to ¥12 pershare. The annual dividend, including the interim dividend of¥10 per share, will therefore be ¥22 per share, up ¥5 from ¥17
per share for the previous fiscal year. On a non-consolidated
basis, the dividend payout ratio was 42%.

Cash flows
During the fiscal year ended March 31, 2005, net cash provided by operating activities increased ¥307 million to ¥2,970 million. Sources of cash included income before income taxes andminority interests to ¥3,209 million, an increase of ¥463 million. The net balance between receivables and payables andaccrued expenses was a cash inflow of ¥537 million. This wasan improvement of ¥161 million compared with the previous
fiscal year.
Net cash used in investing activities was ¥923 million,
down from net cash used of ¥1,964 million in the previous fiscal year. This was mainly attributable to the reduction of
investment in corporate bonds totaling ¥720 million.
Net cash used in financing activities improved ¥164 million
to ¥1,185 million. The principal component was payments ofdividends, which totaled ¥576 million an increase of ¥191 million from ¥385 million in the previous fiscal year. Acquisitionof treasury stock amounted to ¥572 million, down ¥380 million year on year.

17エステーAR再校戻しデータ 05.8.2 1:22 PM ページ 18

INTERVIEW WITH YASUSHI KAJIWARA, OUTSIDE DIRECTOR

I have long believed in such wisdom as, “even in harmony there
are always differences” and “store up virtues in heaven.” With
those thoughts, as moral support, I will express my opinions
frankly, in order to fulfill my duties.
Yasushi Kajiwara (Born on March 13, 1935)
April 1958
June 1989
June 1997
June 1999
June 2001

Joined The Industrial Bank of Japan, Ltd.
Assumed position of Managing Director of the Bank
Joined TOSOH Corporation as Senior Managing Director
Assumed position of Deputy President of the Company
Joined Center for Global Communications (GLOCOM), International
University of Japan as a fellow (Current position)
June 2004 Joined S.T. Chemical as an outside director (Current position)

Q. What were your feelings when appointed an outside

Q. As an outside director, what issues do you see as critical todirector of the Company?

the Company?

A. Amid ongoing discussions surrounding corporate gover-

A. S.T. Chemical is in the business of improving living envi-

nance, I was most interested in the background behind theCompany’s early adoption of a company-with-committees
structure and of course the expectations that I would face inaccepting this appointment. Management transparency and its
fundamental philosophy are critical to further development as
an open and fair corporation. I was naturally keen to assess thephilosophy of S.T. Chemical. In contrast to the U.S. model,
which focuses on shareholder returns, President Suzuki clearlyfavors the European model, which emphasizes stakeholder benefits, comprising shareholders, customers, trading partners andemployees. In this regard, I am in complete agreement and confident I can contribute to the Company, making the most use of
my experiences in various fields.

ronments, an industry, which I believe, offers boundless opportunity for the Company to grow. From management’s
perspective, it is imperative we reevaluate our product development priorities and focus on securing concrete results. At thosetimes, we should formulate strategies from a global perspective.
Survival is an ongoing concern that will inevitably become
increasingly important as competition intensifies both in Japanand overseas. To combat the threat of overseas competitors, wemust focus on employee education and training, and on
enhancing the moral of our staff. In order to earn the trust of
stakeholders, we must clearly disclose the Company’s future
direction, maintain transparency in employee evaluation, andensure the highest ethical behavior in management. In the fieldof R&D, I have high expectations for the outcome of the Japan
Aroma Laboratory Co., Ltd.

Q.

There are concerns that outside directors will be of limited
benefit to the Company, because of their limited knowledge of
the Company. How would you respond to this thought?

A.

The position of outside director is occasionally referred toas “independent director.” Certain critics argue that this independence is inversely proportional to the knowledge one has of
the company and its industry. This premise is continuallydebated in the United States, too. Others argue, however, that
too much knowledge about the company can create hesitationand difficulties when determining issues of a complex nature.
Take the business practice of rebates as one example. A simple
question may arise, such as “Rebates are counter-productive,
so shouldn’t we stop them?” Comparison with other industries,
in Japan and overseas, provides us a chance to question the status quo and wrestle with the issues, which can then lead toreforms. Consequently, if I have a query, I believe it is my roleand responsibility to introduce the issue for discussion and later
to offer my thoughts and recommendations.

18

Q.

How would you evaluate the company-with-committees
structure?

A.

The company-with-committees structure, adopted fromthe U.S. system, remains open to conjecture. However, fromthe perspective of clearly separating the executive and supervisory functions and promoting procedures to ensure management transparency, I believe without argument, that progresshas been made. Put simply, we should incorporate the underlying principles of this structure within the Company and establish a structure best suited to S.T. Chemical. Some would argue
that any system starts getting out of dated, on the moment of
its establishment. It is therefore prudent that we continuously
assess the merits and demerits of each structure in order tomaximize practical benefits.

FINANCIAL SECTION
Contents
Consolidated Balance Sheets
Consolidated Statements of Income and Retained Earnings
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Auditors

20
22
23
24
35

19

CONSOLIDATED BALANCE SHEETS
S.T. CHEMICAL CO., LTD. and consolidated subsidiaries
March 31, 2005 and 2004ASSETS

Thousands of
U.S. dollars (Note 2)

Millions of yen

2005
Current assets:
Cash and time deposits (Note 10)
Marketable securities (Note 3)
Trade notes and accounts receivables
Less - allowance for doubtful receivables
Inventories
Deferred tax assets (Note 6)
Other current assets¥

Total current assets

10,456
3,000
4,889
(18)
3,769
353
336

2004

¥

8,795
3,236
5,079
(39)
3,668
366
434

2005

$

97,362
27,93245,525(167)
35,096
3,287
3,128

22,784

21,540212,164

204
3,513
137
160
72
1,871
(24)

174
3,957
155
132
71
1,944
(66)

1,903
32,710
1,277
1,493
668
17,424
(228)

5,933

6,368

55,247

3,404
6,102
7,760
2,941
10
(12,198)

3,477
6,138
7,883
2,683
10
(12,037)

31,69456,81972,26027,38392(113,589)

Property, plant and equipment, net

8,018

8,154

74,658Intangible assets, net of accumulated amortization

224

207

2,089

36,269$ 344,158

Investments and other assets:
Investments in non-consolidated subsidiaries and affiliates
Investment securities (Note 3)Long-term loans
Deferred tax assets other than unrealized revaluation loss on land (Note 6)
Deferred tax asset - unrealized revaluation loss on land (Note 4)
Other assets
Less-allowance for doubtful accounts
Total investments and other assets

Property, plant and equipment, at cost (Notes 4 and 5):
Land
Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Construction in progress
Less accumulated depreciation

Total assets¥

See notes to consolidated financial statements.

20

36,959¥LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands of
U.S. dollars (Note 2)

Millions of yen

2005
Current liabilities:
Short-term bank loans (Note 5)
Current portion of long-term debt (Note 5)
Trade payables
Other payables
Income taxes payable (Note 6)
Consumption taxes payable
Accrued expenses
Allowance for sales returns
Other current liabilities¥

Total current liabilities
Long-term liabilities:
Long-term debt, less current portion (Note 5)
Employees’ retirement and severance benefits (Note 7)
Directors’ retirement and severance benefits
Total long-term liabilities
Minority interests in consolidated subsidiaries

3
—
4,417
1,920
786
19
563
150
51

2004

¥

51
31
4,075
2,248
633
79
556
159
55

2005

$

28
—
41,133
17,882
7,320
176
5,239
1,401
477

7,910

7,887

73,657

—
1,002
77

35
1,038
102

—
9,330
720

1,079

1,175

10,050

521

514

4,848

7,066
7,068
14,891
(108)
519
(359)
(1,627)

7,066
7,068
13,722
(107)
582
(363)
(1,275)65,79365,814
138,662(1,002)
4,832(3,342)(15,153)

27,44926,693

255,60336,269$ 344,158

Contingent liabilities (Note 12)
Shareholders’ equity (Note 8):
Common stock
Authorized - 96,817,000 shares in 2005 and in 2004
Issued and outstanding - 30,346,851 shares in2005 and 2004
Capital surplus
Retained earnings
Unrealized revaluation loss on land, net of taxes (Note 4)
Unrealized holding profit on securities, net of taxes
Translation adjustments
Treasury stock, at cost
Total shareholders’ equity
Total liabilities and shareholders’ equity¥

See notes to consolidated financial statements.

21

36,959¥

CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
S.T. CHEMICAL CO., LTD. and consolidated subsidiaries
For the years ended March 31, 2005 and 2004

Thousands of
U.S. dollars (Note 2)

Millions of yen

2005¥

Net sales
Cost of sales
Gross profit before reversal of allowance for sales returns
Reversal of allowance for sales returns
Gross profit
Selling, general and administrative expenses (Note 9)
Operating income
Other income (expenses):
Interest and dividends received
Interest expenses
Cash purchase discountCash sales discount
Profit on sales of securities, net
Equity in income (loss) of affiliates
Write-down of securities
Other, net
Income before income taxes and minority interests
Income taxes (Note 6)
Current
Deferred
Minority interests
Net income
Retained earnings at beginning of year
Increases:
Reversal of unrealized revaluation loss on land, net taxes
Decreases:
Cash dividends paid
Bonuses to directors
Redemption or disposition of treasury stock
Retained earnings at end of year (Note 8)¥

See notes to consolidated financial statements.

22

2004

44,10924,49045,082
24,973$ 410,737
228,049

19,6198

20,109(30)

182,68776

19,627
15,87920,07916,660182,764
147,862

3,748

3,419

34,902

56
(1)
205
(825)
1
19
(9)
14

45
(4)
189
(810)
17
(9)
(3)
(96)

519
(11)
1,912
(7,681)
13
180
(88)
131

(540)

(673)

(5,024)

3,209

2,746

29,878

1,283
28

1,273
(29)

11,946
258

1,311
75
1,823

1,244
51
1,451

12,204695
16,97813,722

12,694

127,781

0

0

6

576
16
64

385
17
21

5,363
145
595

13,722$ 138,662

14,891¥

2005¥

CONSOLIDATED STATEMENTS OF CASH FLOWS
S.T. CHEMICAL CO., LTD. and consolidated subsidiaries
For the years ended March 31, 2005 and 2004

Thousands of
U.S. dollars (Note 2)

Millions of yen

2005
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 sale of property, plant and equipment
Gain on sale and valuation of marketable securities
Loss (profit) on sale and valuation of investment securities
Decrease of allowance for doubtful receivables
Decrease of employees’ retirement and severance benefits(Decrease) increase of directors’ retirement and severance benefits(Decrease) increase of allowance for sales returns
Interest and dividends received
Interest expense
Foreign exchange loss
Equity in (income) loss of affiliates
Change in operating assets and liabilities:
Receivables
Inventories
Payables and accrued expenses
Others, net

¥

2004

3,209

¥

2005

2,746

$

29,878

845
51
(1)
9
(62)
(37)
(24)
(8)
(56)
1
(3)
(19)

867
5
(4)
(9)
(12)
(21)
14
30
(45)
4
38
9

7,871
471
(13)
88
(578)
(343)
(228)
(76)
(519)
11
(30)
(180)

235
(97)
302
(296)

(539)
(29)
915
297

2,191
(900)
2,809
(2,760)

4,048
54
(1)
(1,130)

4,266
42
(4)
(1,641)

37,692500(11)(10,524)

2,970

2,663

27,658

(800)
(979)
2,350
(705)
114
(841)
—
(62)

(22)
(376)
2,555
(382)
52
(2,165)67(1,694)(7,450)(9,116)
21,879(6,565)
1,059(7,831)—(574)

Net cash provided by (used in) investing activities(923)(1,964)(8,598)Cash flows from financing activities:
Increase in bank loans
Repayments of bank loans and current portion of long-term debt
Increase in long-term debt
Repayment of long-term debt
Purchase of treasury stock
Proceeds from sale of treasury stock
Payments of dividend
Payments of dividend to minority shareholders

22
(70)
—
(69)
(572)
156
(576)
(77)

—
(48)
22
(76)
(952)
97
(385)
(8)

207
(654)
—
(638)
(5,327)
1,453(5,363)(716)(1,185)(1,349)(11,039)

Sub totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Deposit of time deposits (more than 3 months)
Purchase of marketable securities
Proceeds from sale of marketable securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchases of investment securities
Proceeds from sale of investment securities
Other investments, net

Net cash used in financing activities
Effect of exchanges rate change 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 10)¥

See notes to consolidated financial statements.

23

(0)

(9)

(5)

861
8,772

(659)
9,431

8,016
81,684

9,633

¥

8,772

$

89,701NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
S.T. CHEMICAL CO., LTD. and consolidated subsidiaries
March 31, 2005

1. Summary of Significant Accounting Policies(e) Marketable securities and investment securities
Trading securities are carried at market value and held-to-matu-(a) Basis of presentation

rity securities are carried at amortized cost.

The accompanying consolidated financial statements of S.T.
Chemical Co., Ltd. (the “Company”) and consolidated subsid-

Other securities with determinable market value are carriediaries are prepared on the basis of accounting principles gener-

at market value with any changes in unrealized holding gain orally accepted in Japan, which are different in certain respects as

loss, net of the related deferred income tax assets, in sharehold-to the application and disclosure requirements of International

ers’ equity. Other securities without determinable market value

Financial Reporting Standards, and are complied from the con-are stated at cost determined principally by the moving averagesolidated financial statements prepared by the Company as re-method and the cost of other securities sold is principally com-quired by the Securities and Exchange Law of Japan.

puted based on the moving average method. During the years
ended March 31, 2005 and 2004, the Company and its consoli-

In preparing the accompanying consolidated financial state-

dated subsidiaries did not have any trading securities.

ments, certain reclassifications have been made to the consolidated financial statements issued domestically for readers outside Japan. Furthermore, the notes to the consolidated financial(f) Inventories

statements include information which is not required under ac-

Inventories of the Company and its domestic subsidiaries arecounting principles generally accepted in Japan but is presented

stated at cost determined by the average cost method and thoseherein as additional information.

of overseas subsidiaries are stated at the lower of cost or market,
cost being determined by the average cost method.

(b) Principles of consolidation and accounting for investments in(g) Property, plant and equipment and depreciation

unconsolidated subsidiaries and affiliates
The consolidated financial statements for the year ended March

Property, plant and equipment are stated at cost. Depreciation

31, 2005 and 2004 include the accounts of the Company and itsof property plant and equipment of the Company and its do-five significant subsidiaries. All significant inter-company bal-

mestic subsidiaries except for buildings (excluding structures

ances and transactions have been eliminated in consolidation.

attached to the buildings) acquired on and after April 1, 1998, is

The equity method is applied to investments in significant

computed by the declining-balance method in conformity withaffiliates in accordance with the provisions of the Regulations.

the Corporation Tax Law of Japan. Depreciation of property
and equipment of overseas subsidiaries and buildings, excluding
structures, acquired on and after April 1, 1998 of the Company(c) Accounting period
The accounting period of the Company begins on April 1 andand domestic subsidiaries is computed by the straight-line

ends March 31 of the following year. The two overseas subsid-

method.
The estimated useful lives of the major depreciable assets

iaries have fiscal years ending on December 31. The necessary
adjustments for significant transactions, if any, during the inter-are as follows:

vening period are made on consolidation.

Buildings and structures

3 to 50 years

Machinery, equipment and vehicles

2 to 17 years

Tools, furniture and fixtures

2 to 20 years(d) Translation of foreign currency transactions and financial
statements
Monetary assets and liabilities denominated in foreign currencies are translated into yen at the rates in effect at the balance
sheet date and the accounts of the overseas consolidated subsidiaries, etc., except for the components of shareholders’ equity,
are translated into yen at the rates of exchange in effect at thebalance sheet date. Foreign exchange gains and losses are credited or charged to operations and translation adjustments areincluded in shareholders’ equity and minority interests.

24

(m) Leases(h) Intangible assets and long-term prepaid expenses
Intangible assets and long-term prepaid expenses are amortized

Finance leases, except for those which transfer ownership of theby the straight-line method. Cost of software purchased for in-property to the lessee, are accounted for as operating leases.

ternal use is amortized by the straight-line method over 5 years,
the useful life applicable to commercially available software.

(n) Consumption taxes
Consumption taxes imposed on the Company’s and its subsidiaries’ sales to customers are withheld by the Company and its(i) Allowance for doubtful receivables
The Company and its domestic subsidiaries provide allowances

subsidiaries at the time of sale and subsequently paid to the gov-

for estimated losses at the amounts calculated based on past ex-ernment. Consumption taxes withheld upon sale are not included

perience for receivables other than doubtful receivables andin net sales in the accompanying statements of income, but areamounts estimated specifically for each doubtful receivable. Over-

recorded as a liability, “consumption taxes payable.” Consump-seas subsidiaries provide allowances for doubtful receivables prin-tion taxes which are paid by the Company and its subsidiaries

cipally based on estimated uncollectible amounts.

on the purchases of goods and services from outside the groupare also not included in costs or expenses in the accompanying
statements of income, but are offset against consumption taxes(j) Allowance for sales returns
The allowance for sales returns is generally provided for losses

payable. The net balance is reflected as consumption taxes pay-on sales returns subsequent to the balance sheet date at an amountable in the accompanying consolidated balance sheets at Marchequivalent to that calculated based on sales in conformity with31, 2005 and 2004.

the Corporation Tax Law of Japan.
The allowance for certain products is estimated based on(o) Valuation of assets and liabilities of consolidated subsidiaries
Assets and liabilities of the consolidated subsidiaries acquired

the actual percentage of returns in prior years.

before April 1, 1999 have been valued at cost. It is the Company’s
policy to value assets and liabilities of subsidiaries acquired on(k) Employees’ retirement and severance benefits
Accrued retirement and severance benefits are provided based

and after April 1, 1999 at fair value when the Company obtains

on the estimated retirement and severance benefit obligation andcontrol over such subsidiaries, however, the Company has not

the pension fund assets.

acquired any subsidiaries since April 1, 1999.

Actuarial gains and losses, and past service obligations areamortized using the straight-line method over 5 years, which is(p) Cash and cash equivalents

within the estimated average remaining service years of employ-

Cash and cash equivalents in the cash flow statements consist ofees.

cash on hand, demand deposits and liquid short-term investments with a maturity of three months or less from their date of

In addition, one overseas subsidiary provides an allowanceacquisition.

for payment of employees’ retirement and severance benefits at
100% of the voluntary termination payment.
(l) Directors’ retirement and severance benefits
The Company has accrued directors’ retirement and severance
benefits at the amount which would be required to be paid if all
directors resigned from their positions at left the Company as of
the balance sheet date in accordance with internal regulations.

25

2. Basis of Translation

3. Marketable Securities

The consolidated financial statements presented herein are ex-

The cost and related aggregate market value of other securitiespressed in yen and, solely for the convenience of the reader, havewith a determinable market value at March 31, 2005 and 2004

been translated into U.S. dollars at ¥107.39 =U.S.$1.00, the ap-

are summarized as follows:

proximate exchange rate prevailing on the Tokyo Foreign Ex-

Millions ofyenchange Market on March 31, 2005. This translation should not
be construed as a representation that the amounts shown could

Thousands of
U.S. dollars

2005

2004

2005

¥ 3,935¥ 4,361$36,645

4,800

5,331

44,698

Total unrealized gain

883

978

8,227

Total unrealized loss

19

7

174

have been , or could in the future be, converted into U.S. dollars

Cost

at that or any other rate.

Market value

The Company recognized impairment losses on securities
at the difference between the market value and book value if themarket value had declined by 30% or more from the book value.
Impairment losses on securities for the years ended March 31,
2005 and 2004 were ¥9 million (U.S.$88 thousand) and ¥3 million, respectively.
Securities at March 31, 2005 and 2004 excluded from theabove table are summarized at their respective book value asfollows:
Millions of
yen

2005

Thousands of
U.S. dollars

2004

2005

Current assets:
Unlisted investment trust
certificates within theclosed period
MMF
Foreign securities¥560$ 4,294

1,170

461

¥

1,170

10,896

23

73

212

58

58

541

Unlisted stocks other thanthose traded on theover-the-counter market

In the years ended March 31, 2004, the Company recognized impairment losses on non-marketable securities of ¥0 million if the net book value had declined by 50% or more from the26

5. Short-term Bank Loans and Long-term Debt

book value or if the issuers of the non-marketable securities wentbankrupt or were substantially bankrupt.

Short-term loans from banks at an average interest rate of 1.015%

Other securities sold during the years ended March 31, 2005

amounted to ¥3 million (U.S.$28 thousand) at March 31, 2005.

and 2004 are summarized as follows:

Long-term debt at March 31, 2004 consisted of the fol-Millions ofyenlowing:Thousands of
U.S. dollars

2005

2004

2005

¥ 2,350¥ 2,622$21,879

Total profit

1

17

13

Total loss

—

—

—

Millions of yen

2004

Proceeds received

Loans, principally from banks, maturing ininstallments through 2008, at interests rate

The redemption schedule of other securities with maturity

ranging from 2.7% to 3.0%

¥ 66

Less current portion

(31)
¥ 35

dates at March 31, 2005 and 2004 are summarized as follows:
Millions ofyen

One year and lessThousands of
U.S. dollars

2005

2004

2005

¥ 1,246¥ 1,433$11,598

1,754

2,120

16,337

Assets pledged as collateral at March 31, 2005 are presented
below:

More than 1 year andwithin 5 years

Buildings and structures

Millions ofyen

Thousands of
U.S. dollars

¥

$

77

713

Machinery and equipment andMore than 5 years andwithin 10 years

—

—

—

vehiclesMore than 10 years

—

—

—

Land

35

329

Total

¥ 136

$ 1,263

4. Land Revaluation
In accordance with the Land Revaluation Laws (Proclamation
No. 34 dated March 31, 1998), land used for business activities
was revalued at March 31, 2002. The book value before revaluation was ¥3,332 million and the book value after revaluation
was ¥3,153 million and the difference, net of taxes, is stated as
unrealized valuation loss on land in shareholders’ equity. Deferred tax assets arising from this revaluation are presented separately from deferred tax assets for other temporary differencesin the accompanying balance sheets. The differences between
the market value and the book value after revaluation were ¥278
million (U.S.$2,585 thousand) and ¥153 million at March 31,
2005 and 2004, respectively.

27

24

221

6. Income Taxes
At March 31, 2005 and 2004, the tax effect of the temporary differences which gave rise to a significant portion of the deferred tax
assets (excluding deferred tax on the unrealized revaluation loss on land) were as follows:
Millions of
yen

2005

Thousands of
U.S. dollars

2004

2005

Current assets:
Accrued employees’ bonuses

¥

159

¥

174

$

1,477

Allowance for sales returns

60

64

562

Write-down of securities

—

4

—

Accrued business taxes

45

53

420

Other

90

87

837

Total current deferred tax assets

354

382

3,296

Valuation allowance

—

(12)

—

Deferred gain on sale of property

(0)

(0)

(4)

Unrealized holding profit on securities, net of taxes

(1)

(3)

(5)

(1)

(3)

(9)

353

366

3,287

381

382

3,549

Current liabilities:

Total current deferred tax liabilities
Net current deferred tax assets
Non-current assets:
Allowance for employees’ retirement and severance benefits
Allowance for directors’ retirement and severance benefits

31

41

288

Write-down of securities

96

87

895

Other

33

29

305

541

539

5,037

Total non-current deferred tax assets
Non-current liabilities:
Deferred gain on sale of property

(20)

(21)

(189)

Unrealized holding profit on securities, net of taxes

(345)

(385)

(3,216)

Other

(15)

—

(138)

(381)

(406)

(3,544)

Total non-current deferred tax liabilities

Net non-current deferred tax assets

¥

28

160

¥

132

$

1,493

A reconciliation of the statutory tax rate to the Company’s

The following table summarizes the components of the net

effective tax rate for the year ended March 31, 2004 is as fol-

retirement benefit expenses for the years ended March 31, 2005

lows :

and 2004.
Millions of
yen

2004

Japanese statutory tax rate

2005

42.00%

Permanent differences such as entertainment

Service cost¥

expenses, etc.

1.21

Permanent differences such as dividend income(0.12)

obligation

Inhabitants’ per capita taxes, etc.

0.82

Expected return on plan

Other

1.38

assets

Effective tax rate

45.29%

Amortization of actuarial loss

Thousands of
U.S. dollars

2004

154

¥

2005

153

$ 1,432

50

466

(26)

(33)

(238)

103

112

957

(23)

(24)

(212)

0

35

4

294

$ 2,409

Interest cost on benefit
50

Amortization of past
service obligations

No reconciliation has been presented for the year ended

Extraordinary additional

March 31, 2005 as the difference between the statutory tax rate

retirement payments

and the effective tax rate was less than 5%.

Net retirement benefit

7. Employees’ Retirement and Severance Benefits

expenses

¥

259

¥

The Company and its domestic subsidiaries have defined benThe assumptions used in determining the pension benefit

efits plans covering substantially all of its employees which are

obligation are shown below:

partially funded through a qualified funded pension plan as described in Note 1(k). Under these plans, employees are entitledto lump-sum or pension retirement or severance benefits, determined by points accumulated monthly based on the employees’

Method of periodic

contributions, length of service and the conditions under which

allocation of

the termination occurs. In addition, the Company and its do-

estimated

mestic subsidiaries pay meritorious service awards to employees

retirement

in excess of the prescribed formula, which are charged to in-benefits

come as paid as it is not practicable to compute the liability for

Discount rate
return on assets

circumstances.
The following table summarizes the funding status andamounts recognized in the consolidated balance sheets at March
31, 2005 and 2004.
Thousands of
U.S. dollars

2005

2004

2005

$(25,091)

Retirement and severance¥ (2,695)¥ (2,563)

Plan assets

benefit obligation

1,377

1,280

12,825

Unfunded benefit obligation(1,317)(1,284)(12,266)

Unrecognized actuarial loss

332

292

3,088

(16)

(46)

(152)

¥ (1,002)¥ (1,038)$ (9,330)

Unrecognized past service
obligation
Accrued benefit obligation

2004

Straight-line method

Straight-line method

2.0%

2.0%

2.0%

3.0%

Expected rate ofsuch future payments since the amounts vary depending on theMillions of
yen

2005

29

8. Shareholders’ Equity

Date of approval

In accordance with the Commercial Code of Japan (the “Code”),

June 27, 2000

the Company has provided a legal reserve which is included in

Number of shares
grantedEligible participants

Exercisable period

350,000

6 directors andJuly 1, 2002 -shares

4 employees

June 30, 2007

(all executive

retained earnings. The Code provides that an amount equal toofficers)

at least 10% of the amount to be disbursed as a distribution ofJune 15, 2001

earnings be appropriated to the legal reserve until the total ofsuch reserve and the additional paid-in capital account equals

140,000

1 director andJuly 1, 2003 -shares23 employees

June 30, 2008

(including 1

25% of the common stock account.

executive officer)

Capital surplus and legal reserve are not available for dividends
June 14, 2002

but may be used to reduce a deficit or may be transferred tostated capital. At March 31, 2005, the legal reserve of the Com-

225,000

1 director andJuly 1, 2004 -shares43 employees

June 30, 2009

155,000

1 director andJuly 1, 2005 -shares

25 employees

June 30, 2010

June 15, 2004

130,000

4 officers andJuly 1, 2006 -shares

9 employees

June 30, 2011

June 14, 2005

160,000

Officers andJuly 1, 2007–

sharesemployees

June 30, 2012

June 13, 2003

pany included in retained earnings amounted to ¥550 million(U.S.$5,120 thousand).
The accompanying consolidated financial statements do notinclude any provision for cash dividends of ¥10.00 (U.S.$0.09)
per share totaling ¥344 million (U.S.$3,204 thousand) whichwere declared by the Company in June 2005.

(the Board of

The maximum amount which the Company can distribute

Directors will

as dividends is calculated based on the non-consolidated finan-

approve resolutions

cial statements of the Company and in accordance with the Com-

designating eligible

mercial Code of Japan.

officers and employees)

At March 31, 2005, the Company had stock option plans,
which were approved at the annual general meetings of the share-

The option price per share was determined on the date theholders and the Board of Directors as follows:

options were granted based on an established formula for determining option prices. The options are exercisable during theabove periods provided that the recipients are still directors, statutory auditors or employees of the Company or its subsidiaries.
Net assets per share as of March 31, 2005 and 2004 were¥957.45 (U.S.$ 8.92) and ¥924.33, respectively. Net income pershare for the years ended March 31, 2005 and 2004 were ¥63.43(U.S.$ 0.59) and ¥48.87, respectively.
Diluted net income per share for the years ended March 31,
2005 and 2004 was ¥63.00 (U.S.$0.59) and ¥48.62.

30

9. Major Expenses

Basis for calculation of basic net income per share and diluted net income per share for the years ended March 31, 2005

Major expenses included in selling, general and administrativeand 2004 were as follows:

expenses for the years ended March 31, 2005 and 2004 were as
Millions of
yen

2005

follows:

Thousands of
U.S. dollars

2004

Millions of
yen

2005

Basic net income per share:
Net income¥ 1,823¥ 1,451$16,978

Sales promotion expenses

Thousands of
U.S. dollars

2005

2004

2005

¥ 3,683¥ 4,601$34,298

Advertising costs

3,306

3,052

30,790

Amounts not attributable

Salaries

1,669

1,777

15,541to shareholders of

Shipment and storage

common stock:

expenses

1,596

1,678

14,859Directors’ bonuses by

Provision for employees’
204

237

1,904

16

14

153

—

22

—

appropriation of retained
earnings

retirement and severance
—

15

—

benefits

Amounts attributable toProvision for directors’shareholders of common
stockretirement and severance
1,823

1,436

16,978benefits

Weighted-average number

Provision for doubtfulof shares outstanding(millions of shares)

accounts
29

29—

Diluted net income per

Research and development expenses included in general andshare:

administrative expenses and cost of sales for the years ended

Increase in number ofshares outstanding

March 31, 2005 and 2004 amounted to ¥423 million (U.S.$3,938
0

0

0

—

0

—

thousand) and ¥413 million, respectively.

Shares resulting in ananti-dilutive effectIn accordance with the introduction of the Business Scale
Taxation by revision of the local tax law from the fiscal year
beginning on or after April 1, 2004, the business tax on added
value and capital was accounted for selling , general and administrative expenses.
As a result, selling, general and administrative expenses increased by ¥53 million (U.S.$496 thousand) and operating income and income before income taxes and minority interests
decreased by ¥53 million (U.S.$496 thousand).

31

10. Cash and Cash Equivalents(3) Lease payments and pro-forma depreciation charges for the

A reconciliation of cash and cash equivalents at March 31, 2005

years ended March 31, 2005 and 2004 were ¥69 million

and 2004 to the accounts and amounts in the accompanying(U.S.$638 thousand) and ¥78 million, respectively.

consolidated balance sheets is as follows:
Millions ofyenCash and time deposits(4) Depreciation is computed by the straight-line method overThousands of
U.S. dollars

2005

2004

2005

¥10,456¥ 8,795$97,362

the respective lease terms assuming a nil residual value.
Operating leases
Future minimum lease payments at March 31, 2005 were as

Time deposits with afollows:

maturity in excess of
three months

(823)

(23)

(7,662)

Cash and cash equivalents

9,633

8,772

89,701Millions of
yen

2005

Payable in one year or less

Deposits pledged as collateral mainly for leasing office spaceat March, 31 2005 and 2004 amounted ¥23 million (U.S.$211

Payable after one year

thousand) and ¥24 million, respectively.

Total

11. Leases

¥

2004

1

¥

2
¥

Thousands of
U.S. dollars

3

1

2005

$

3
¥

5

10
23

$

33

12. Commitments and Contingent Liabilities

Finance leases, except for those which transfer ownership of the

At March 31, 2005 and 2004, trade notes discounted with banks

property to the lessee, are accounted for as operating leases, andin the ordinary course of business amounted to ¥68 million

the assets and the related liability are not included in the balance(U.S.$632 thousand) and ¥93 million, respectively.

sheets.

13. Derivatives(1) A summary of the pro-forma amounts (inclusive of the re-

The Company has entered into forward foreign exchange con-lated interest) of acquisition cost, accumulated depreciation andtracts to reduce its exposure to the risk of future adverse fluctua-

net book value at March 31, 2005 and 2004 primarily relatingtion in foreign exchange rates related to its trade receivables andto tools, furniture and fixtures held under finance lease is aspayables and loans denominated in foreign currencies. It is thefollows:

Company’s policy not to enter into any speculative derivatives
Millions of
yen

2005

Acquisition cost¥

Accumulated depreciation
Net book value

318

2004

¥

229
¥

89

¥

transactions and its subsidiaries and associated companies doThousands of
U.S. dollars

not enter into any forward foreign exchange contracts.

2005

Unrealized gain or loss on a hedging instrument is deferred

310$ 2,966

until the Company recognizes gain or loss on the underlying

176

2,134

hedged item. Assets or liabilities hedged by forward foreign ex-

831

change contracts are translated at the forward exchange con-134$

tract rates.
As the Company enters into such contracts only with do-(2) Future minimum lease payments, inclusive of the related in-mestic banks with high credit ratings, the Company does notterest, at March 31, 2005 and 2004 are summarized as follows:
Millions of
yen

2005

anticipate any risk of non-performance by these counter-parties.
In addition, the execution of and control over derivatives

Thousands of
U.S. dollars

2004

transactions are carried out by the Administrative Division in2005

accordance with internal control regulations which limit the
Payable in one year or less¥

Payable after one year
Total

53

¥

36
¥

89

68

$

66
¥

134

498

nature of the transactions and individuals authorized to be in

334$

charge of such transactions.

831

At March 31, 2005 and 2004, the Company had no outstanding derivatives positions.

32

14. Segment Information
The Company and its consolidated subsidiaries operate in two business segments and the business segment information for the years
ended March 31, 2005 and 2004 is analyzed as follows:Year ended March 31, 2005
Millions of yen
Mothproofing
andhygiene-related
products

Householdenvironmentrelated
products

Total¥ 17,899¥ 26,210——

Eliminations
or corporate
assetsConsolidated¥44,109—¥ 44,109———

1. Revenues(1) Operating revenues(2) Intra-group sales and transfers
Total revenues

17,89926,21044,109—44,109

2. Operating expenses

15,75024,61040,361—40,361

Operating income

2,149

1,599

3,748

—

3,748

(1) Total assets

9,212

11,68920,901

16,05836,959(2) Depreciation

222

623

845

—

845

(3) Capital expenditures

73

807

880

—

880

Mothproofing
andhygiene-related
products

Householdenvironmentrelated
products

Total

Eliminations
or corporate
assetsConsolidated¥ 19,830¥ 25,252¥45,082—¥ 45,082

—

—

—

—

—

3. Assets, depreciation and capital expenditure:

Year ended March 31, 2004
Millions of yen

1. Revenues(1) Operating revenues(2) Intra-group sales and transfers
Total revenues

19,83025,25245,082—45,082

2. Operating expenses

17,90423,75941,663—

41,663Operating income

1,926

1,493

3,419

—

3,419

(1) Total assets

10,038

11,05021,08815,181

36,269(2) Depreciation

292

575

867

—

867

(3) Capital expenditures

74

329

404

—

404

3. Assets, depreciation and capital expenditure:33

Year ended March 31, 2005
Thousands of U.S. dollars
Mothproofing
andhygiene-related
products

Householdenvironmentrelated
products

Total$ 166,675$ 244,062——

Eliminations
or corporate
assetsConsolidated$ 410,737—$ 410,737———

1. Revenues(1) Operating revenues(2) Intra-group sales and transfers
Total revenues

166,675

244,062

410,737—

410,737

2. Operating expenses

146,666

229,169

375,834—

375,834

Operating income

20,00914,89334,902—

34,902(1) Total assets

85,783

108,843

194,627

149,531

344,158(2) Depreciation

2,067

5,804

7,871

—

7,871

682

7,514

8,195

—

8,195

3. Assets, depreciation and capital expenditure:(3) Capital expenditures

The business segments are classified according to the nature of the Company’s products and their markets. Major products in themothproofing and hygiene-related segment are Cloth Care, Hand Care and Thermal Care and those in the household environmentrelated segment are Air Care, Humidity Care, and Home Care.
Based on the agreement between the Company and its consolidated subsidiary of S.T. Mycoal., Ltd. for the year ended March 31,
2005, the sales promotion expenses of the Company was born by S.T. Mycoal.
As a result , operating expenses in mothproofing and hygiene-related segment decreased by ¥73 million (U.S.$682 thousand) andhousehold environment-related segment increased by ¥73 million (U.S.$682 thousand).
Geographical segment information and overseas sales are not presented as the revenues and total assets in Japan exceeded 90% of
the totals both segments and as overseas sales were less than 10% of consolidated sales for the years ended March 31, 2005 and 2004.

34

Report of Independent Auditors
The Board of Directors
S.T. Chemical Co., Ltd.
We have audited the accompanying consolidated balance sheets of S.T. Chemical Co., Ltd. and consolidated subsidiaries as of March 31, 2005
and 2004, and the related consolidated statements of income and retained earnings, and cash flows for the years then ended, all expressed in yen.
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of S.T.
Chemical Co., Ltd. and consolidated subsidiaries at March 31, 2005 and 2004, and the consolidated results of their operations and their cash
flows for the years then ended in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2005 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 2.

June 14, 2005

35

CORPORATE INFORMATION(June 14, 2005)

Board of Directors and Corporate Executive Officers (June 14, 2005)
Takashi Suzuki

Motohiko Kogo

The chairman of the board, member of nomination committee

Outside director, member of audit committee

Yasushi Kajiwara

Toshiharu Nagasawa

Outside director, member of nomination, audit and compensation committees

Director, member of nomination committee

Tunehachi Tagaya

Mitsuo Tsuchihashi

Outside director, member of nomination and audit committees

Director, member of compensation committee

Masanori Noro
Outside director, member of nomination and compensation committees

Executive Officers
Takashi Suzuki

Kanzo Kobayashi

Representative Executive Officer
President, Chief Executive Officer

Executive Officer
In charge of manufacturing and international business
Deputy general manager of Corporate Sales headquarters

Nobuhiro Mine

Michihiro Ishikawa

Senior Managing Executive Officer
In charge of general management

Executive Officer
Tokyo branch general manager

Toshiharu Nagasawa

Masakazu Kinoto

Managing Executive Officer
In charge of R&D and human resources

Executive Officer
Osaka branch general manager

Mitsuo Tsuchihashi

Hirohide Shimada

Managing Executive Officer
In charge of corporate staff and affiliated companies

Executive Officer
In charge of Corporate Planning Group

Noriaki Kageura
Managing Executive Officer
General manager of Corporate Sales headquarters

Corporate Data
Company name
Headquarters
Establishment
Paid-in capital
Employees
Contact
E-mailTel
Fax

S.T. Chemical Co., Ltd.
4-10, Shimo-Ochiai, 1-Chome, Shinjuku-ku, Tokyo 161-8540, Japan
August 31, 1948
¥7,065,500,000
647 (Consolidated)
466 (Non-consolidated)
Hirohide Shimada, Corporate Planning Group
ir@st-c.co.jp+81-3-5906-0734+81-3-5906-0742

Group Companies
Consolidated Subsidiaries

S.T. Trading Co., Ltd.
Sales of hand gloves, industrial paper wipes, lubricant spray and products

S.T. Auto Co., Ltd.
Sales of car chemical care products

S.T. Mycoal Co., Ltd.
Sales support and marketing of Mycoal disposable warmers

Family Glove (Thailand) Co., Ltd.
Manufacture and sale of hand gloves

Family Glove (Taiwan) Co., Ltd.
Manufacture and sale of hand gloves

36

エステーAR表2-3戻しデータ 05.8.2 1:51 PM ページ 2

INVESTOR INFORMATION(August 1, 2005)

Fiscal year-end

March 31

Shares issued and outstanding

30,346,851

Listed exchangeTokyo Stock Exchange, First Section

Shareholders

4,853

Primary shareholders(Thousands of shares)(% of total)

4,707

15.5

Shaldan Co., Ltd.
T-ZONE Capital Corporation

2,880

9.5

Bear, Stearns & Co. Inc.

1,912

6.3

Nippon Life Insurance Company

1,671

5.5

Seiichi Suzuki

1,182

3.9

Akio Suzuki

1,115

3.7

Mizuho Bank, Ltd.

884

2.9

Takashi Suzuki

742

2.4

Hiroshi Fujii

740

2.4

The Bank of Tokyo-Mitsubishi, Ltd.

681

2.2

Note: The Company has 1,677 thousand shares of treasury stock (5.5% of total shares).

Individuals
Other Japanese institutions
Financial institutions
Non-Japanese institutions
Treasury stock

33.75%
33.49%
18.06%
9.17%
5.53%

Registered transfer agent

Mizuho Trust & Banking Co., Ltd.

AuditorErnst & Young Shin Nihon

Annual shareholder’s meeting

Middle of June each year (June 14, 2005)

Stock chart
Stock Price (Yen)

Nikkei 225 (Yen)

1,500

15,0001,200

12,000900

9,000
3,000,000

4,227,000

600

6,000
1,500,000

300

3,000
0

0

02/6 78

9

10 11 12 03/1 2

3

4

5

6

7

8

9

10 11 12 04/1 2

3

37

4

5

6

7

8

9

10 11 12 05/1 2

3

4

5

6

0

エステーAR表1-4 05.8.2 1:53 PM ページ 1

Japan’s Leading Home Products Manufacturer
4-10, Shimo-Ochiai 1-chome, Shinjuku-ku, Tokyo 161-8540 Japan
http://www.st-c.co.jp/
Printed in Japan

This report was printed onrecycled paper with soy ink.

Recycled paper incorporating
100% waste paper