Creating Corporate Value Report 2017
Year ended March 31, 2017

Refreshing the Air

Our business is to brighten and enliven the lives of customers with air.
We have focused on niche markets, and reeled in customers whiledeveloping products with the keywords:“understanding through listening, seeing, and using.”

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 group companies inJapan, and the “S.T. (nonconsolidated)” means S.T. Corporation (nonconsolidated).

[Target period] April 1, 2016 to March 31, 2017
[Date of issuance] August 2017
[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
Management Strategy P. 2

Message P. 4

Systems for Supporting Management P. 6

Business at a Glance P. 10

Sustainability Overview P. 12

Financial and Non-Financial Highlights P. 8

Corporate Data / Overview of Communication Tools P. 13

Household Gloves

Disposable Warmers

Mothproofing Agents(Market Share: No.2)(Market Share: No.2)(Market Share: No.1)

24% 17% 50%

Dehumidifiers

Deodorizers

Deodorizers and Air Fresheners(Market Share: No.1)(Market Share: No.1)(Market Share: No.2)

38%

79%

26%

The market share was estimated by INTAGE Inc.
(Filtered according to SRI category) (Data from January to December put together, except disposable pocket warmers, for which data from April to March were put together. )1Management Strategy

Our business environment is changing, as the social structure istransforming and globalization is progressing.
We aim to establish a robust business basefor responding to such changes, create customers,
and develop highly profitable system and management base.

2

Growing our brand through“brand value management”
Innovation in the Air Care business

Structural change of society

Create markets
with our new unique
air-care technologies

Foray into a new market
with our existing
technologies

Trend of globalization

Enhanceour global
strategies

3Message

To a growth track with “united S.T. CORPORATION”
Profit skyrocketed thanks to the business matrix structure“to create markets with our new unique air-care technologies,” and “toIn the year ended March 2017, we developed the business matrix

enhance our global strategies.”

structure further, which commenced in the previous year, with the“To foray into a new market with our existing technologies,” weaim of actualizing a highly profitable system under the managerial

launched “Yells,” a new brand of nursing-care goods for meeting thepolicy “brand value management.” The visualization of each businessneeds in the super-aged society. We will alleviate the complaints andprogressed, and we strived to manage our revenue thoroughly. As

inconveniences at nursing-care sites by utilizing our original deodoranta result, our revenue increased considerably. As for new products,

technology.

fragrance products sold well; especially the sales of “SHALDAN”“To create markets with our new unique air-care technologies,” we

FRAGRANCE and “Shoshu-Riki” Premium Aroma series contributed.

will release “Aroma Sapuri,” a new brand focused on the physiologicalAs for deodorizers, high-priced products with high added value, such

effects of fragrance, and suggest new healthy habits with aroma oil. As

as the “Shoshu-Riki” Function Plus series for restrooms, contributed.

for another new technology “Clear Forest,” we obtained the European

Consequently, sales were 46.0 billions of yen, up 2.9% year on year.

organic certification in July 2016, and are cultivating a new market.

As for profit, quantity sold increased and products with high“To enhance our global strategies,” we will concentrate on

added value were promoted. As for cost, our continued efforts forthe business in the ASEAN region, which is the target area of our

reducing product returns and the costs for manufacturing bore fruit,strategies, with the hub of our activities located in Thailand.

and we strived to decrease inventory and the number of products.
Consequently, operating income was 2.9 billions of yen, up 21.9% year

For actualizing “united S.T. CORPORATION”

on year, ordinary income was 2.9 billions of yen, up 68.3% year on

Our policy for this year is “to get on a growth path as united S.T.

year, and profit attributable to owners of parent was 1.8 billions of yen,

CORPORATION.”

up 99.2% year on year.

We have evolved the business matrix structure further, integrated
domestic and overseas sales sections, which had been separate

Development of a highly profitable system,

organizations, into one organization, and strengthened the support ofand sowing the seeds of growth

the support section.

The year ending March 2018 (this year) is the last fiscal year in the

In order to improve our corporate culture, we will promote themedium-term business plan. This year, we will conduct “sowing the“change in work styles.” We will not able to create products that makeseeds of growth” while “developing a highly profitable system.”customers happy, unless we ourselves keep a good balance between

For “developing a highly profitable system,” we will “expand thework and private life and lead a happy life. By getting rid of meaninglessmarket with our Air Care business,” increase our share by “vitalizing thetasks and introducing flexible ways of working, we will enhance ourmarket with our existing business,” and boost our profit by “continuously

productivity and develop a sustainable business base.

reforming our profit earning structure.”
For “sowing the seeds of growth,” we will try to achieve the threeobjectives: “to foray into a new market with our existing technologies,”

Through these activities, we will get on a growth track in new
fields and markets, to make great strides. 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 medium to long terms, in cooperation
with stakeholders, 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 2017, female directors makeup 33% of the board (two out of nine executive officers is also woman).
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, 2017)

Governance Type

Company with three committees

Number of Board Members

9

Number of Outside Directors

5 (56%)

Number of Independent Directors

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

Board Diversity

3 female directors (including 1 outside director)

Number of Board Meetings Held per Year

7 times

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

4 members (4 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 14, 2017)

Takashi Suzuki

Naoto Onzo

Kanichi Suzuki

Mitsuko Miyagawa

Kazuo Sugiyama

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(As of June 14, 2017)

Audit
Committee

Compensation
Committee○

Director(Outside Director) ☆

◎Director(Outside Director)○

Director(Outside Director) ☆

○Takashi Suzuki○◎※

Naoto Onzo
Kanichi Suzuki◎○

Director ( Outside Director )Director

Areas of executive officer responsibility
Executive Officers

Name

Noriyuki Watanabe

Director ( Outside Director )Director

Corporate governance overview
Directors

Director ( Outside Director )(As of June 14, 2017)

Responsibilities

Name

Representative Executive
Officer, Chairman, CEO

Overall management

Takashi Suzuki※

Representative Executive
Officer, President, COO

Overall management

Takako Suzuki※

Managing Executive Officer

In charge of the Business Management Divisionand the Business Department 1
and the Business Department 2

Tsukasa Konda

Mitsuko Miyagawa

Director(Outside Director) ☆

○Noriyuki Watanabe

Managing Executive Officer

In charge of the Management Control Divisionand responsible for Domestic Group Companies

Kumiko Ishikawa

Director(Outside Director) ☆

○Kazuo Sugiyama

Managing Executive Officer

In charge of the Sales Divisionand the Domestic Sales Department

Yo Kouzuki○

Director○

Director
Director
9 directors( five of whom areoutside directors )◎：Chairperson

5members○：Committee member

4
members

Takako Suzuki※

Executive Officer

In charge of the Executive Creative Director

Koji Kage

Kumiko Ishikawa※

Executive Officer

In charge of the Management Strategy Divisionand the Manufacturing Division

Kouichi Yoshizawa

Kouichi Yoshizawa※

Executive Officer

In charge of the R&D Division

Mikio Tsuji

Executive Officer

In charge of the International Sales Department
and responsible for Overseas Group Companies

Keiichi Hayasaka

3
members※：Holds the concurrent position of executive officer※※※：Holds the concurrent position of director☆ Independent Outside 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 reoccurrence.
As for compliance, we observe not only laws, but also internal andexternal regulations, ethics, and social norms; fulfill social requirements
and expectations by putting our management philosophy and codesof conduct into practice; and strive to maintain and improve the trust of
stakeholders.

7

45

4

4

4

4

Financial and Non-Financial Highlights

ハンドケア
１１％

サーモケア
1０％

衣

13

Operating income / Operating income margin

14

15

16

■ Operating income (millions of yen)
● Operating income margin (%)(millions of yen)(millions of yen)

6

17

13

14

15

17

13

14

2,854
912

2,342

1,813
1,234

1,800

衣類ケア ２１％

16

3.8

2,131

3.8

2,854

2,342

4.5

565

衣類ケア ２１％

1,813

サーモケア
1０％

4.8
エアケア
44％

3.8

2,131

サーモケア
1０％

4.8

4.5

エアケア
3.8
44％
ハンドケア
１１％

6.2

892

ホームケア 7％
湿気ケア ７％1,800

45,95848,351ハンドケア
１１％

48,263

ホームケア 7％
46,993

46,94445,95848,3516.2
湿気ケア ７％

17

Profit attributable to owners of parent

1,817

Net sales*2

15

16

17

13

0.3

14
13 15
14 16
15 17
16

17

12

millions of yen

6

17¥43,5802,114
64.8 65.2
786
610
662
992
-897

210.8

3,884

202.1

29,0293,683¥43,5462,246
1,119
63.4 65.4
63.2
612
673
922
2,137

3,688
234.9

2011

3,752
226.0

2010

3,930

234.9

226.0

210.8

202.1

565

892

912

197.0

1,817

For the Year
¥47,006¥44,879
Net sales*2
Operating income
3,219
2,493
64.8 65.2
Profit attributable to owners 6.1of parent
1,295
1,076
6.1 63.2
63.4 65.4
R&D expenses
489
499
4.2
4.2
4.0
4.0
Capital expenditures
649
716
4.1
4.1
Depreciation and2.9
amortization
936
858
2.9
2.7
2.7
2.7
2.7
Free cash flow
3,655
945
1.9
1.9
At Year-End
0.3
0.3
0.4
Total assets 0.4
28,393
27,617
13
14
15
16
17
12
13
14
15
16
12
13
12
14
13
15
14
16
15
16
Total net assets
19,14419,029Number of issued outstanding shares (thousands)*3
21,813
21,831
1,234

1,817
912

2009

197.0

2008

Fiscal year (ended March 31)

30,01112 13131414 1515 1616
17
19,966
19,972

21,852

21,786

6

17

Non-Financial Indicators
CO2 emissions (tons)*6
Number of employees (people)
Ratio of female directors to total directors (%)
Ratio of outside directors to total directors (%)
13

14
13

15
14

16
15

17
16

17

Per Share Information
Profit attributable to owners of parent
Net assets
Dividends
Common Stock prices*7

33.34,398

37.5

33.3

14
15

16
17

44.4

30.0

13

13
14

607
12.5
62.5

15
16

¥54.08853.90
22
1,264

890
50.0

5.6
3.8
5.8
67.5
55.6

860

50.0

6.8
4.2
6.1
55.6
55.6
65.6
859

760

663

890

860
3,683

859
3,688

760
3,752

663 3,884

3,930

3,683

3,688

%

Financial Indicators
Operating income margin
ROA*4
ROE*5
Equity ratio

4,079
619
12.5
62.5

17

¥49.32853.81
22
940

50.0

5.2
4.0
5.9
55.6
55.6
67.2

50.0

4.9
2.7
4.0
64.9
55.6

33.34,433

37.5

33.3

14

16

44.4

30.0

13

611
11.1
66.7
15

¥51.25892.46
22
1,046

17

4,167
630
12.5
62.5

¥36.03893.7422
916

Notes:	1. U.S. dollar amounts are translated from yen for convenience only, at the rate of ¥112.19 = U.S.$1.00, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2017.
2. Effective from the fiscal year ended March 31, 2017, we have applied the new accounting standards.
3. Number of issued outstanding shares does not include that of treasury shares.
4. ROA = Profit attributable to owners of parent / average total assets for the fiscal year.

8

yen

13

2.9
2.9
2.9
1.9
1.9
1.9

2.7
2.7
2.7

234.9
234.9
234.9

226.0
226.0
226.0

210.8
210.8
210.8

2.7
2.7
2.7

0.3
0.3
0.3
0.4
0.4
0.4

13
13
1314
14
1415
15
1516
16
1617
17
17

12
12
1213
13
1314
14
1415
15
1516
16
16

CO2 emissions*6

663
663
663

131313 141414 151515 161616 171717

890
890
890

860
860
860

859
859
859

760
760
760

(people)

3,683
3,683
3,683

3,688
3,688
3,688

3,752
3,752
3,752

3,884
3,884
3,884

12
12
1213
13
1314
14
1415
15
1516
16
16

Number of employees(tons)
S.T. Group (in Japan)

3,930
3,930
3,930

4.1
4.1
4.1

202.1
202.1
202.1

4.2
4.2
4.2

197.0
197.0
197.0

1,81
1,81
1,81
912
912
912

892
892
892

1,234
1,234
1,234

4.0
4.0
4.0

565
565
565

65.4
65.4
65.4
63.4
63.4
63.4
63.2
63.2
63.2

6.1
6.1
6.1

Ratio of outside directors to total directors /Ratio of female directors to total directors● Ratio of outside directors to total directors (%)● Ratio of female directors to total directors (%)

55.6
55.6
55.6
55.6
55.6
55.6
50.0
50.0
50.0
50.0
50.0
50.0

55.6
55.6
55.6

44.4
44.4
44.4
37.5
37.5
37.5
33.3
33.3
33.3
30.0
30.0
30.0

33.3
33.3
33.3

131313 141414 151515 161616 171717

131313 141414 151515 161616 171717

millions of yen

thousands of U.S.dollars*1

2012

2013

2014

2015

2016

2017

2017

¥46,354
1,751
76
659
1,007
931
773

¥46,944
1,800
565
572
2,061
830
-944

¥46,993
2,131
1,234
564
942
894
2,624

¥48,263
1,813
892
513
1,486
844
369

¥48,351
2,342
912
536
1,758
1,128
1,857

¥45,958
2,854
1,817
611
608
997
4,529

$409,644

30,287
19,701
21,71830,076
20,213
21,71632,37021,087
21,85333,78522,60021,851

34,92423,496
21,69938,45825,812
21,877342,795
230,077

25,441
16,196
5,444
5,422
8,883
40,365

%

3.8
0.3
0.4
63.4

3.8
1.9
2.9
65.4

4.5
4.0
6.1
63.2

3.8
2.7
4.2
64.8

4.8
2.7
4.1
65.2

6.2
5.0
7.6
65.3

3,727
647
25.0
50.0

3,930
663
30.0
50.0

3,884
760
33.3
55.6

3,752
859
44.4
55.6

3,688
860
37.5
50.0

3,683
890
33.3
55.6

¥3.48
884.4522
1,025¥26.01905.8422988¥56.74936.0622
999¥40.831,001.84
22
1,021¥42.01
1,049.58
22
1,114

yen

U.S. dollars¥83.57
1,148.41
24
1,809

$0.74
10.24
0.21
16.12

5. ROE = Profit attributable to owners of parent / average total equity (total net assets - subscription rights - non-controlling interests in consolidated subsidiaries) for the fiscal year.
6. The CO2 emissions from the S.T. Group (in Japan)
7. The common stock prices were as of the end of the fiscal years, ended March 31.

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)

26%(Market Share: No.2)

Deodorizers

79%(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)

17%

Household Gloves

24%(Market Share: No.2)

Humidity
Care

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

Home Care(Cleaners andOther Products)

38%

43
%
43
%
43
%
43
%
43
43%%

Composition of Net Sales

Sales/YoY

19,640Millions of yen

+3.5%

19
%
19
%
19
%
19
%
19
19%%

8,938

13
%
13
%
13
%
13
%
13
13%%

5,728

Millions of yen-1.4%

Millions of yen+15.8%

12
%
12
%
12
%
12
%
12
12%%

5,290

6
%
6
%
6
%
6
%
6
6%%

2,966

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

Overseas

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.

Development of New
Businesses

We obtained the organic certification for the new kind of product “Clear Forest,” to cultivate a new business field.

Millions of yen+3.1%

Millions of yen

-5.4%

3,395

Millions of yen-0.4%

The market share was estimated by INTAGE Inc. (Filtered according to SRI category) (Data from January to December put together, except disposable pocket warmers, for which data from April to March were put together.)
Sales and annual growth rate are shown in accordance with the new accounting policy, as it was revised effective from the year ended March 2017.

10

Market Environment

Salient Business Features and Strengths

Overview of Fiscal 2017 and Strategies Going Forward● The market is growing.
● M ainstay business division accounting for about ● T he performance of products with high added value,
40% of the Company’s total sales. A business that isincluding “SHALDAN” Fragrance, “Shoshu-Riki” Premium● F ragrance-focused products are showing a growth
expected to experience future growth.
Aroma series and Function Plus series, was favorable,
trend, with further growth anticipated.
increasing sales.
● This division owns unique brands, including our largest
brand “Shoshu-Riki,” “SHALDAN” for enjoying more ● This year, we will keep striving to expand the markets offragrance, and “Dashu-Tan,” which deodorizes air withmainly “Shoshu-Riki” and “SHALDAN.” We will also sow thethe power of charcoal.
seeds of growth.
● The market is on a plateau and stable.
● A foundation business rivaling the importance of the Air ● T he results in the spring and autumn seasons of theCare category in terms of marketing.
previous year were healthy, and this spring saw relatively● With changes in storage styles, responding to diverse
low air temperatures, making sales reaching a peak thisneeds will be the key in the future.
● T his category comprises topline brands includingyear and then decreasing sales in the previous year.
“Mushuda” and “Neopara Ace,” which are wellrecognized for their reliability in protecting clothes from ● This year, we will make efforts to strengthen and develop
moths.
our brand, and propose new storage methods, to cultivateand expand a new kind of demand.
● Climate change significantly impacts the market. Difficult ● W inter-based product range. Provide an additional ● Sales recovered and grew from the second preceding year,
to differentiate products. Intense market competition.
point-of-sale management role linked to spring andwhich witnessed a record warm winter.
autumn mothproofing agents.
● It is essential to introduce purposes of use that are still● T his year, we will keep concentrating on the sale ofnot popular and appeal to young people.
products for feet, and promote the sales of our products at● Advantage of alliance products. Offer “Onpacks” andother brands manufactured by Mycoal Corporation
stores, to cultivate and expand a new kind of demand.
in July 2003. Products are distinguished by theirestablished reputation for high quality, especially
products for feet.
● Both household and industrial-use markets are growing. ● An inaugural, enduring division with a history of six ● Industrial NBR gloves, the household vinyl gloves “Family”
decades together with the Cloth Care category.
Hand Fleur, etc. sold well, and sales increased.
● In addition to improving work efficiency, proposals for
improved functionality and added value are key points. ● This category is comprised of the “Family” series of ● This year, we will keep promoting the sales of householdhousehold gloves, “Modelobe” series of industrialand industrial gloves, to strengthen and develop ouruse gloves and other products. Gloves with reinforced
brands.
fingertips and NBR gloves with good puncture
resistance have been marketed.
● The market is growing. Difficult to differentiate products. ● This business has consistently led the market since ● A s we shifted from products for the largest market toIntense market competition.
“Drypet” was first launched in 1981.
products with high added value, sales dropped.
● Putting forward value-added products that offer new ● T his category is comprised of the mainstay brand ● This year, we will keep promoting products with high addedfunctions and applications is critical to future growth.
“Drypet,” as well as other products including “Binchovalue to cultivate and expand a new kind of demand.
Tan Drypet,” which offers a deodorizing function
together with dehumidifying; a solid lineup including
refill- and sheet-type products.
● Robust conditions in the niche cleaner and mothproofing ● This business is currently fostering the niche cleaner ● The performance of “Kome-Touban” and “Ultra-Powers
agents for rice bins markets.
market and is coordinating efforts to nurture other new
Washing Tub Cleaner” was healthy, but the sales of otherproducts that are under development.
products dropped. Accordingly, the sales of this segment
declined.
● I t owns unique products, such as the cleaners in
the niche market, including “Ultra Powers” and ● We will endeavor to make inroads into new fields for further“Ohisamano-Sentaku,” and the mothproofing agents
growth.
for rice bins “Kome-Touban.”

Outside Japan, we will focus on the target areas of our strategies. We will enter the ASEAN market with the hub of our activities located in Thailand. We will fortify our business
infrastructure, and concentrate on the sale of air-care products and new core products.

Utilizing the fact that the business areas of the three companies are complementary to each other, we will try to improve the development and profitability of the three companies' businesses.

We launched “Yells” for alleviating the complaints and inconveniences experienced at nursing-care facilities, and “Aroma Sapuri,” a new brand suggesting new healthy habits with fragrance.

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 Expectation (Value Creation using ‘an identityof S.T.’)” and “Social Requirements (Social Responsibility).” 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 bothstakeholders and the S.T. Group are included with reference to theopinions, requests, etc. from stakeholders.

Materiality● Utilization of unique air-care technologies[Solving Social Issues]

SocialExpectations(Value Creation)

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 this and take various measures to ensurethat it does not happen.

Overview of Fiscal 2017 and Strategies Going Forward● <Products> [Ensure healthy lives] As for the new technologies, started
making B2B transactions in the “Clear Forest” brand. Received anorganic certificate and obtained patents for hay fever related products.
As for the existing technologies, in the spring of 2017, established “Yells,”
a new brand of products for elderly care.
● <Community> [Sustainable industrialization (new employment),sustainably managed forests] Through the comprehensive collaborationagreement with the Hokkaido Government, continued promoting the use
and raising awareness of Sakhalin fir and energizing the local industry.
● [Protecting consumers' health and safety] Continued regularly holding
meetings of PL Committee that carries out quality control, etc.
● [Fair marketing, factual and unbiased information and fair contractual
practices] Continued providing the products/useful information, quality
information, and other information, on its website.
● [Consumer service, support, and complaint and dispute resolution]
Received the “award for excellence” at the 20th Corporate Telephone
Manner Contest (hosted by Japan Telecom Users Association) for thethird consecutive year (recognized as “Silver Rank Company”).
● [Consumer data protection and privacy] Continued managing personal
information.

●S ecuring and training of personnel

SocialRequirements(Social Responsibility)[Labor Practices]
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] In order to reduce long
working hours, continued reviewing tasks assigned to its employees andimplementing no-overtime days.
● [Human development and training in the workplace] Continued providing
its employees with educational programs such as e-learning.
● [Conditions of work and social protection] Continued the promotion ofmaternity and childcare leaves, shortened working hours, etc.
● [Social dialogue] Continued having dialogue with labor unions, etc.
● [Health and safety at work] Under the Business Continuity Plan (BCP),
continued inspection, correction, and improvement, including disaster
drills.

● Efforts based on environmentally conscious products,

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

12● [Climate change mitigation and adaptation] Continued propelling a modal
shift and hybridization of company cars.
● [Prevention of pollution] Continued reducing waste at each and every
plant.
● [Sustainable resource use] Continued having no-overtime days, managing
air conditioning at each department, performing educational activities
through information monitors, etc.

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, 2017)

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

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

Consolidated: 890

Family Glove Co., Ltd. (Taiwan)

Tokyo 161-8540, Japan

Non-consolidated: 415

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 2017
(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 2017

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 2017
Financial Section

Investors’ Guide 2017

(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 2017