Annual Report 2010
ASAHI KASEI CORPORATION
A
S
A
H
I
K
A
S
E
I
C
O
R
P
O
R
A
T
O
N
I
A
n
n
u
A
l
R
e
P
o
R
t
2
0
1
0
Contributing to human life and human livelihood
through constant innovation and advances
based in science and the human intellect.
Contents
01 Consolidated Financial Highlights
03 To Our Shareholders
04 A Message from the President
10 At a Glance
12 Operating Segments
12 Chemicals
Asahi Kasei Chemicals Corp.
14 Homes
Asahi Kasei Homes Corp.
16 Health Care
Asahi Kasei Pharma Corp./Asahi Kasei Kuraray Medical Co., Ltd./
Asahi Kasei Medical Co., Ltd.
18 Fibers
Asahi Kasei Fibers Corp.
20 Electronics
Asahi Kasei Microdevices Corp./Asahi Kasei E-materials Corp.
22 Construction Materials
Asahi Kasei Construction Materials Corp.
24 Services, Engineering and Others
25 Toward Sustainable Growth
33 Financial Section
70 Major Subsidiaries and Affiliates
72 Corporate Profile
73 Investors Information
Asahi Kasei Annual Report 2010
01
Consolidated Financial Highlights
Asahi Kasei Corporation and consolidated subsidiaries
Fiscal year beginning April 1
2009
2008
¥ billion
2007
2006
2005
US$ million*
2009
For the year
Net sales
Operating income
Net income
At year-end
Total assets
Net worth†
Per share
Net income
Net worth‡
Cash dividends
Key indexes
Operating margin
Payout ratio
ROA
ROE
Net worth to total assets‡
D/E ratio‡
¥ 1,433.6
¥ 1,553.1
¥ 1,696.8
¥ 1,623.8
¥ 1,498.6
$ 15,415
57.6
25.3
35.0
4.7
127.7
69.9
127.8
68.6
108.7
59.7
620
272
¥ 1,368.9
¥ 1,379.3
¥ 1,425.4
¥ 1,459.9
¥ 1,376.0
$ 14,719
644.7
603.8
666.2
645.7
594.2
6,932
¥
US$*
¥ 18.08
¥ 3.39
¥ 50.01
¥ 49.00
¥ 42.46
$ 0.19
452.91
10.00
431.77
10.00
476.39
13.00
461.50
12.00
424.34
10.00
4.87
0.11
4.0%
55.3%
1.8%
4.1%
46.3%
0.42
2.3%
295.0%
0.3%
0.7%
43.8%
0.52
7.5%
26.0%
4.8%
10.7%
46.7%
0.32
7.9%
24.5%
4.8%
11.1%
44.2%
0.34
7.3%
23.6%
4.5%
10.8%
43.2%
0.40
* U.S. dollar amounts in this annual report are translated from Japanese yen, for convenience only, at the rate of ¥93=US$1 as described in Note 1 of Notes to
Consolidated Financial Statements.
† Net assets less minority interest. For the year beginning April 1, 2005, figures for shareholders’ equity shown.
‡ At fiscal year end.
Net Sales
(¥ billion)
2,000
1,696.8
1,553.1
1,433.6
1,500
1,000
500
0
Operating Income,
Operating Margin
(¥ billion)
127.7
150
120
90
60
30
0
7.5
57.6
35.0
4.0
2.3
Net Income, ROE
Total Assets,
Net Worth to Total Assets
(%)
15
12
9
6
3
0
69.9
10.7
(¥ billion)
80
60
40
20
0
(%)
20
(¥ billion)
1,500
1,425.4
1,379.3
1,368.9
46.7
46.3
43.8
15
10
5
0
1,000
500
0
25.3
4.1
4.7
0.7
(%)
60
40
20
0
FY
07
08
09
FY
07
08
09
FY
07
08
09
FY*
07
08
09
Operating income, left scale
Net income, left scale
Total assets, left scale
Operating margin, right scale
ROE, right scale
Net worth to total assets, right scale
* At year end.
02
Basic Tenets of the Asahi Kasei Group
Contributing to human life and human livelihood
through constant innovation and advances
based in science and the human intellect.
Asahi Kasei Group Management Configuration
(as of April 1, 2010)
Holding company
Core operating companies
Asahi Kasei
Asahi Kasei
Fibers
Asahi Kasei
Chemicals
Asahi Kasei
Construction
Materials
Asahi Kasei
Homes
Asahi Kasei
Microdevices
Asahi Kasei
E-materials
Asahi Kasei
Pharma
Asahi Kasei
Kuraray
Medical
Asahi Kasei
Medical
Chemicals & Fibers
business sector
Homes &
Construction Materials
business sector
Electronics
business sector
Health Care
business sector
To Our Shareholders
Asahi Kasei Annual Report 2010
03
The global economy was generally recovering during fiscal 2009, led by growth in China and other
emerging countries, as an effect of economic stimulus packages implemented in response to the 2008
financial crisis. Although corporate earnings improved with increased exports to Asian countries, the
Japanese economy remained sluggish as the strong yen, curtailed domestic capital investment, and weak
consumer spending continued.
The operating environment for the Asahi Kasei Group remained challenging due to volatile feedstock prices,
the strong yen, and a sluggish recovery of domestic demand, which led to a decline in sales. Income
nevertheless increased as an effect of cost reductions as well as increased exports buoyed by strong
overseas demand.
Based on these results, we paid a year-end dividend of ¥5 per share, which, combined with the interim
dividend, brought the total annual dividend to ¥10 per share.
Fiscal 2010 is the final year of our Growth Action – 2010 initiative. As we continue to proceed with
implementation of the current initiative based on our strategic review of June 2009, we are also advancing
the formulation of the subsequent medium-term strategic management initiative.
Under the new management team installed on April 1, we are forging ahead with a revitalization of the Asahi
Kasei Group in accordance with our basic tenets in order to achieve sustainable growth in the midst of this
rapidly changing business climate, ensuring that we continue to further our contribution to our stakeholders
and to society at large.
August 2010
Nobuo Yamaguchi
Honorary Chairman
Ichiro Itoh
Chairman
04
A Message from the President
Taketsugu Fujiwara, President
Advancing Growth Action – 2010 and Looking Ahead to the Next Strategic Management Initiative
Fiscal 2010 is the final year of Growth Action – 2010,
the Asahi Kasei Group’s five-year strategic initiative
which began in fiscal 2006. Even as we continue to
Succession and Development of Management
Initiatives
The Asahi Kasei Group has continuously achieved
advance under our current strategy, we are also
growth by transforming its business portfolio to meet
proceeding with formulation of the subsequent
management initiative which will begin in fiscal 2011.
the changing needs of the times. Such transformations
have been guided by a succession of strategic
management initiatives. From fiscal 1999 to 2002,
operations were reinforced through selectivity and
focus under the Ishin-2000 initiative. From fiscal 2003
Strategic Management Initiatives
Ishin-2000
(FY 1999–2002)
Selectivity and focus
Disposal of negative legacies
Ishin-05
(FY 2003–2005)
Selective diversification
Creation of cash flow
Management speed
and autonomy*
Growth Action – 2010
(FY 2006–2010)
Business portfolio realignment for
expansion and growth
Strategic investment
* Transition to holding company configuration in Oct. 2003.
Asahi Kasei Annual Report 2010
05
Advancing the Growth Action – 2010 strategic
initiative to transform our business portfolio and
strengthen our operational base
Growth Action – 2010 Concept
Expanding
global
businesses
Enhancing
domestic
businesses
Chemical-based,
specialized function
Electronic materials
Medical devices
Electronic devices
High growth businesses
Stable growth, stable earnings businesses
Domestic businesses
(housing, construction materials,
pharmaceuticals, home-use products, etc.)
Polymers
(including processed products)
Monomers
(acrylonitrile, MMA, styrene, etc.)
Long-term investments
(¥ billion)
Investment from FY 2003 to FY 2005
70–80/year
Strategic investment for FY 2006 to FY 2010
Total for FY 2006 to FY 2010
400
800
Organic
M&A
(¥ billion)
220
150
Resources for dividends 30
to 2005, under the Ishin-05 initiative, further expansion
of operations and strengthening of the financial
investment focused on the fields of chemical-based/
specialized function products, electronics products,
constitution were advanced through a strategy of
and health care. Together with ordinary investments,
selective diversification.
These were followed by the current Growth Action –
2010 initiative beginning in 2006, with the expansion of
global businesses and the enhancement of domestic
we targeted total capital expenditure of some ¥800
billion for the five-year term, with fiscal 2010
performance targets including sales of ¥1,800 billion
and operating income of ¥150 billion.
businesses as pillars of strategy, to achieve a business
portfolio realignment for expansion and growth for
Strategic investments, including M&A, were
proactively performed, and global businesses were
heightened corporate value and brand strength. The
expanded, with results exceeding the initial plan
plan provided for some ¥400 billion in strategic
through fiscal 2007.
Revision of Financial Performance Forecasts
(¥ billion)
FY 2007
FY 2008
FY 2009
FY 2010
original target
FY 2010 outlook
(as of June 2009)
FY 2010 forecast
(as of May 2010)
Net sales
1,696.8
1,553.1
1,433.6
1,800.0
1,350.0–1,500.0
1,677.0
Operating income
127.7
35.0
57.6
150.0
60.0–80.0
Net income
69.9
4.7
25.3
80.0
—
80.0
42.5
06
A Message from the President
Strategic Review of Growth Action – 2010
As the global economic crisis in the second half of
Although investment of ¥800 billion had been
fiscal 2008 caused a severe deterioration in the
planned for the five-year period, this was reduced by
operating climate, it became clear that achievement of
¥130 billion to ¥670 billion. Investments for simple
our initial financial targets would be highly problematic.
expansion of capacity for volume-products were put
In June 2009, we therefore performed a strategic
review of Growth Action – 2010, including a revision of
our targets for financial performance. Although we
on hold, and other investments were made subject to
strict selectivity in consideration of the business
environment.
found no need for fundamental change in our strategic
Based on these criteria, we proceeded with
pillars of expanding global businesses and enhancing
proactive capacity expansions for products with strong
domestic businesses, we did identify the need to
growth prospects such as Hipore™ lithium-ion battery
further accelerate the expansion of high-growth
(LiB) separator, APS™ polysulfone-membrane artificial
businesses with a focus on the fields of electronics and
kidneys, and Sepacell™ leukocyte reduction filters.
health care, while streamlining businesses for which
future competitiveness cannot be ensured, largely in
commodity fields. The outlook for financial
Developments in M&A and alliances were also
advanced. In electronics, we acquired the
semiconductor operations of Toko Inc. In health care,
performance in fiscal 2010 was revised to ¥1,350–
we established an alliance with NxStage Medical, Inc.
1,500 billion of net sales and ¥60–80 billion of
and acquired majority ownership in Med-Tech Inc.
operating income.
At the same time, we took steps to strengthen the
Revision of Investment Plan
Original 5-year plan
(a)
Revised 5-year plan
(b)
Decrease from original plan
(b-a)
(Decision adopted, ¥ billion)
195
240
40
150
430
15
30
670
(5)
(120)
0
0
(120)
(5)
0
(130)
FY 2010 plan
¥40 billion
¥50 billion
¥10 billion
¥100 billion+ (M&A)
Maintenance
Expansion
R&D
M&A
Subtotal
Renewing
petrochemical complex
Dividends,
restructuring, etc
Total
200
360
40
150
550
20
30
800
Major Capital Expenditures
Completed in FY 2009
Under construction in FY 2009
Chemicals
Fibers
Chemicals
• New boiler and power generation
• Capacity expansion for Roica™ elastic
• New power generation facility for use
turbine using SDA pitch
polyurethane filament in Thailand
with wood biomass fuel
• Capacity expansion for ion-exchange
membranes
Health Care
Electronics
• Capacity expansion for LSIs
• Capacity expansions for Hipore™ LiB
• New AN and MMA plants in Thailand
Health Care
• New assembly plant for Planova™ virus
• New plant for Sepacell™ leukocyte
separator in Moriyama
removal filters
reduction filters
• Expansion of capacity for spinning
polysulfone hollow-fiber membrane for
APS™ dialyzers
• New plant for spinning hollow-fiber
membrane for Planova™ virus
removal filters
Holding Company
• New integrated research complex
• New plant for therapeutic apheresis
devices
Electronics
• New plant for Hipore™ LiB separator in
Hyuga, expansion thereof
Asahi Kasei Annual Report 2010
07
operational constitution by streamlining businesses
with no firm prospects for significant growth, including
the discontinuation of in-house production of polyester
filament and the down-scaling of our autoclaved
aerated concrete (AAC) production configuration.
Throughout all other businesses, concerted efforts
were applied to reduce fixed costs and hold down
inventories. As a result, income growth was obtained
in fiscal 2009 even as sales decreased.
Strategies and Actions by Business Sector
Chemicals & Fibers
The basic strategy is to proactively invest in businesses
which can be expanded globally, while reviewing
businesses for which ongoing competitive superiority
would be difficult to secure, in order to strengthen the
configuration for Hebel™ AAC was strengthened by
operational configuration.
the closure of the Shiraoi plant and a reduction of
In fibers, in-house production of polyester filament
production capacity at the Hozumi plant.
was discontinued, and the monofilament and
polytrimethylene terephthalate fiber businesses were
Health Care
withdrawn. In chemicals, structural improvement of
Business acquisitions and alliances with overseas
fertilizer and industrial explosives operations were
companies were advanced for the expansion and
advanced through consolidation with other producers.
globalization of operations. In medical devices, an alliance
Additionally, we and Mitsubishi Chemical Holdings
was established with NxStage Medical, Inc. in the field of
agreed to establish a joint venture between Asahi
hemodialysis products as a key element in the strategic
Kasei Chemicals and Mitsubishi Chemical to unify
expansion of a world-leading position in blood purification
naphtha cracker operations in Mizushima in April 2011,
systems. In bioprocess technology, we acquired the
providing for a flexible operational configuration which
bioprocess operations of TechniKrom, Inc.
will be able to swiftly adapt to changes in the operating
In pharmaceuticals, newly approved products
climate for petrochemicals with reinforced competitiveness.
include Recomodulin™ anticoagulant and Famvir™
For global business expansion and growth, we
anti-herpes agent. Overseas clinical development for
increased production capacity for ion-exchange
Recomodulin™ is also advancing.
membranes and for synthetic rubber and elastomer,
and began construction of acrylonitrile (AN) and methyl
Electronics
methacrylate (MMA) plants through a joint venture with
Production capacity expansions have been
PTT of Thailand. We also built a new plant in China for
concentrated on products which address growing
Duranate™ HDI-based polyisocyanate and a new
market needs related to energy and resource
plant in China for the assembly of Microza™ water-
conservation. In devices, we acquired the
filtration modules.
Homes & Construction Materials
semiconductor operations of Toko Inc. to enter the
field of power management LSIs, and expanded the
electronic compass business—a new field of LSI
In homes, a new framing system was developed for
application. LSI sales functions in Korea, China, and
next-generation energy conservation performance, and
Europe were incorporated as overseas subsidiaries.
new products featuring advanced environmental
In electronic materials, we increased production
compatibility were launched. The sales organization
has been reconfigured and strengthened, and
capacity for Hipore™ LiB separator by expanding our
plant in Moriyama and building a new plant in Hyuga,
peripheral businesses such as remodeling and real
and expanded production capacity for dry film
estate have been expanded.
photoresist at our plant in China, further reinforcing
In construction materials, the operational
these globally competitive businesses.
08
A Message from the President
Global Business Operations
Taiwan
Korea
Outlook for Fiscal 2010
Although demand in developing countries is on a
recovery trend, the operating climate for the Asahi
Kasei Group in fiscal 2010 is expected to remain
obscure, with lingering concerns over weak domestic
Japanese demand, a strong yen, and volatile
feedstock prices. Furthermore, the successive start-
up of large petrochemical plants in the Middle East and
China may lead to oversupply. Even in this climate, we
expect to achieve an increase in both sales and
operating income by implementing our strategy under
Growth Action – 2010 to further expand competitive
businesses while advancing wide-ranging measures to
strengthen the operational configuration.
Formosa Asahi Spandex Co., Ltd.
Asahi Kasei EMD Taiwan Corp.
Asahi Kasei Microdevices Taiwan Corp.
Asahi Kasei Wah Lee Hi-Tech Corp.
Asahi-Schwebel (Taiwan) Co., Ltd.
Asahi Kasei Medical Trading
(Taiwan) Co., Ltd.
Beijing Office
Hong Kong
Asahi Kasei Plastics
(Hong Kong) Co., Ltd.
Asahi Chemical (HK) Ltd.
Thailand
Asahikasei Plastics
(Thailand) Co., Ltd.
PTT Asahi Chemical Co., Ltd.
Thai Asahi Kasei
Spandex Co., Ltd.
Singapore
Asahi Kasei Plastics
Singapore Pte. Ltd.
Polyxylenol
Singapore Pte. Ltd.
Indonesia
PT Nippisun Indonesia
Southeastern China
Zhangjiagang
Asahi-DuPont POM
(Zhangjiagang) Co., Ltd.
Suzhou
Asahikasei (Suzhou) Plastics
Compound Co., Ltd.
Asahi Kasei Electronics
Materials (Suzhou) Co., Ltd.
Hangzhou
Asahi Kasei Microza (Hangzhou) Co., Ltd.
Hangzhou Asahikasei Spandex Co., Ltd.
Hangzhou Asahikasei Textiles Co., Ltd.
Asahi Kasei Medical (Hangzhou) Co., Ltd.
Asahi Kasei Medical Trading (Hangzhou) Co., Ltd.
Holding company
Chemicals segment
Health Care segment
Fibers segment
Electronics segment
Nantong
Asahi Kasei Performance
Chemicals Corp.
Shanghai
Asahi Kasei Business
Management
(Shanghai) Co., Ltd.
Asahikasei Plastics
(Shanghai) Co., Ltd.
Asahi Kasei Fibers
International （Shanghai）
Co., Ltd.
Asahi Kasei Microdevices
(Shanghai) Co., Ltd.
Tong Suh Petrochemical Corp., Ltd.
Asahi Kasei Chemicals Korea Co., Ltd.
Asahi Kasei Microdevices Korea Corp.
Asahi Kasei Medical Trading (Korea) Co., Ltd.
United States
Asahi Kasei America, Inc.
Asahikasei Plastics
(America) Inc.
Asahi Kasei Plastics
North America, Inc.
Sun Plastech Inc.
Asahi Kasei Spandex America, Inc.
AKM Semiconductor, Inc.
Asahi Kasei Medical America Inc.
Asahi Kasei Bioprocess, Inc.
Europe
Belgium
Asahi Kasei Plastics Europe SA/NV
Asahi Kasei Synthetic Rubber
Europe SA/NV
Asahi Photoproducts (Europe) SA/NV
Asahi Kasei Bioprocess Europe SA/NV
United Kingdom
Asahi Photoproducts (UK) Ltd.
Germany
Asahi Packaging GmbH
Asahi Kasei Fibers Deutschland GmbH
Asahi Kasei Spandex Europe GmbH
Asahi Kasei Medical Europe GmbH
Spain
Asahi Pharma Spain, SL
Italy
Asahi Kasei Fibers Italy SRL
France
Asahi Kasei Microdevices Europe SAS
Japan
Hozumi
Shiga
Moriyama
Gunma
Saitama
Ageo
Osaka
head office
Ono
Mizushima
Iwakuni
Chikushino
Oita
Nobeoka
Hyuga
Mibu
Tomobe
Sakai
Tokyo head office
Chiba
Tateyama
Kawasaki
Ohito
Wakayama
Fuji
Nagoya
Suzuka
Asahi Kasei Annual Report 2010
09
Chemicals & Fibers: Operating income is
forecasted to grow in chemicals operations with
continuing strong demand expected, mainly in China.
Fibers operations are forecasted to return to profitability
with increased shipments throughout all main products
and the effect of structural reconfiguration.
Homes & Construction Materials: Operating
income is forecasted to grow in homes operations as
increased orders and deliveries are expected thanks to
new products, such as the Hebel Haus™ Frex “G3,”
which match growing market needs. Operating income
is forecasted to grow in construction materials
operations as an effect of thorough cost-cutting.
Health Care: Operating income is forecasted to
Net Income, Dividends per Share
(¥ billion)
(¥ per share)
80
60
40
20
0
FY
68.6
69.9
13
12
59.7
10
56.5
8
27.7
6
42.5
(forecast)
10
10
10
(plan)
25.3
03
04
05
06
07
4.7
08
09
10
20
15
10
5
0
grow with increased shipments of Recomodulin™
Net income, left scale
expected in pharmaceuticals operations and increased
Dividends per share, right scale
shipments of APS™ and therapeutic apheresis devices
expected in medical devices operations.
Electronics: Operating income is forecasted to
By “human life” we mean people, and by “human
grow with increased shipments of each product in
livelihood” we mean society. Amidst the transformations
both electronic devices and electronic materials due to
taking place in the world around us, our path forward
recovering demand. The Hipore™ business in
is to contribute to the development of a society that
particular is being expanded with significant capacity
progresses in harmony with the natural environment
expansions and developments to meet growing
and enables each individual to live in health and
demand in automotive applications.
Return to Shareholders
comfort. It is by making these ideals come to reality
through our business operations worldwide that we
fulfill our mission as a corporate enterprise, and we are
well placed to do so by exerting the diverse strengths
The annual dividend for fiscal 2009 was ¥10 per share
of the Asahi Kasei Group.
in line with our basic policy to strive for increased
Based on this, reinforcement of established
dividends through continuous earnings growth while
businesses will be advanced through identification of
maintaining an appropriate cash reserve based on
the ultimate operational configuration under which
consolidated income. While we intend to increase the
stable earnings can be secured, and businesses will
return to shareholders as consolidated income
be reviewed from the two perspectives of “harmony
improves further, we plan an annual dividend of ¥10
per share in fiscal 2010.
with the environment” and “living in health and
comfort.” Competitive businesses will be proactively
expanded, with accelerated growth of businesses that
Medium-term Management Perspective
have global potential. New businesses will be
developed based on these two perspectives by
The world’s economic map and values have undergone
combining the strengths of the diverse operations,
major changes since the global financial crisis, and the
technologies, and human resources of the Asahi Kasei
emergence of many new markets and needs is
Group, as well as by actively leveraging alliances and
expected. Under these circumstances, we must clearly
M&A. Rather than simply supplying materials and
discern the currents of the new era and ensure that the
components, the ultimate objective in new business
operations of the Asahi Kasei Group are executed in
accordance with them.
will be to develop comprehensive systems and
services that meet emerging needs in society.
Our basic tenets are to contribute to human life
and human livelihood through constant innovation and
advances based in science and the human intellect.
10
At a Glance
Contributing to human life and human livelihood through constant innovation
and advances based in science and the human intellect
Through strategic business expansion since the 1950s, Asahi Kasei has grown in step with the Japanese
economy, developing into the selectively diversified enterprise group it is today. Across the decades,
successful growth and development have been achieved through successive reconfigurations of our
operational configuration to meet the needs of society for convenience and comfort in tune with the times.
History of Business Portfolio Transformation (Sales Composition)
Bemberg™
regenerated
cellulose
1950
Rayon fiber
Nylon fiber
1965
Acrylic fiber
• Expansion into
synthetic fiber
businesses
• Start of housing business
• Construction of petrochemical
complex
Homes &
Construction
Materials
1980
Chemicals
Chemicals Net sales
Operating income
(¥ billion)
622.1
26.1
Homes
Net sales
Operating income
389.7
25.3
Homes
27.2%
FY 2009
Net sales
¥1,433.6 billion
Health Care
7.9%
Fibers
7.0%
Chemicals
43.4%
• Development of housing business
• Formation of pharmaceuticals
business unit and consolidation
with Toyo Jozo Co., Ltd.
• Start of LSI and dry film photoresist
businesses
Electronics
Fibers
Health Care
1995
Homes &
Construction
Materials
Chemicals
(¥ billion)
Health
Care
Net sales
Operating income
113.2
4.0
Fibers
Net sales
Operating loss
101.2
2.8
Electronics
Net sales
Operating income
142.7
7.2
Electronics
10.0%
Construction
Materials
3.3%
Services,
Engineering
and Others 1.2%
Construction
Materials
Net sales
Operating income
Services, Engineering
and Others
Net sales
Operating income
47.0
1.2
17.6
1.8
The businesses of the Asahi Kasei Group are organized in
nine core operating companies. Under our Growth Action –
2010 mid-term management initiative, strategic investments
have been implemented for the transformation of our
business portfolio to achieve further expansion and growth.
With the expansion of global businesses and the
enhancement of domestic businesses advancing in our four
business sectors of Chemicals & Fibers, Homes &
Construction Materials, Electronics, and Health Care, we are
focused on helping society progress in harmony with the
natural environment and enabling each individual to live in
health and comfort as strategic perspectives, and working
to create new businesses which combine the diverse
strengths of our many operations.
Asahi Kasei Annual Report 2010
11
Operating Segments, Core Operating Companies
Main Businesses
Major Consolidated Subsidiaries
Chemicals
Asahi Kasei Chemicals Corp.
Homes
Asahi Kasei Homes Corp.
Organic and inorganic industrial
chemicals, synthetic resin, synthetic
rubber, coating materials, latex,
pharmaceutical and food additives,
explosives, photopolymers and plate-
making systems, separation and ion-
exchange membranes, systems, and
equipment.
Sanyo Petrochemical Co., Ltd.
Asahi Kasei Pax Corp.
Asahi Kasei Home Products Corp.
Japan Elastomer Co., Ltd.
Tong Suh Petrochemical Corp., Ltd.
Asahi Kasei Plastics Singapore Pte. Ltd.
Asahikasei Plastics (America) Inc.
Asahi Kasei Performance Chemicals Corp.
Asahi Kasei Microza (Hangzhou) Co., Ltd.
PS Japan Corp.
Hebel Haus™ houses, Hebel Maison™
apartments, condominiums, remodeling,
real estate, residential land development,
financial services.
Asahi Kasei Jyuko Co., Ltd.
Asahi Kasei Mortgage Corp.
Asahi Kasei Reform Co., Ltd.
Asahi Kasei Real Estate, Ltd.
Asahi Kasei Home Construction Corp.
Health Care
Asahi Kasei Pharma Corp.
Asahi Kasei Kuraray Medical
Co., Ltd.
Asahi Kasei Medical Co., Ltd.
Fibers
Asahi Kasei Fibers Corp.
Pharmaceuticals, diagnostic reagents,
hemodialyzers, therapeutic apheresis
devices, Planova™ virus removal filters,
Sepacell™ leukocyte reduction filters.
Asahikasei Aime Co., Ltd.
Med-Tech Inc.
Asahi Kasei Bioprocess, Inc.
Asahi Kasei Medical (Hangzhou) Co., Ltd.
Roica™ elastic polyurethane filament
(spandex), Eltas™ spunbond, Lamous™
artificial suede, Bemberg™ cupro
cellulosic fiber.
Kyokuyo Sangyo Co., Ltd.
Thai Asahi Kasei Spandex Co., Ltd.
Hangzhou Asahikasei Spandex Co., Ltd.
Asahi Kasei Spandex Europe GmbH
Asahi Kasei Spandex America, Inc.
Asahi Chemical (HK) Ltd.
Hangzhou Asahikasei Textiles Co., Ltd.
Electronics
Asahi Kasei Microdevices Corp.
Asahi Kasei E-materials Corp.
Mixed-signal LSIs, Hall elements, Hall
effect ICs, Hipore™ Li-ion battery
separator, Sunfort™ dry film photoresist,
photomask pellicles, Pimel™
photosensitive polyimide precursor.
Asahi Kasei Toko Power Devices Corp.
AKM Semiconductor, Inc.
Asahi Kasei Electronics Materials
(Suzhou) Co., Ltd.
Asahi-Schwebel (Taiwan) Co., Ltd.
Asahi Kasei Wah Lee Hi-Tech Corp.
Asahi Photoproducts (Europe) SA/NV
Construction Materials
Asahi Kasei Construction
Materials Corp.
Hebel™ autoclaved aerated concrete,
foundation piles, Neoma™ foam and
other thermal insulation.
Asahi Kasei Foundation Systems Corp.
Asahi Kasei Extech Corp.
Services, Engineering
and Others
Plant, equipment, process engineering,
employment agency, think tank.
Asahi Research Center Co., Ltd.
Asahi Finance Co., Ltd.
Asahi Kasei Engineering Co., Ltd.
Asahi Kasei Amidas Co., Ltd.
12
Operating Segments
Chemicals
Holding Creating the Future with Chemistry as our basic ideal,
we are dedicated to helping society to progress in harmony with
the natural environment and enable each individual living in
health and comfort, through our diverse business operations—
advancing as a vigorous, high-earnings company.
Masaki Sakamoto
President, Asahi Kasei Chemicals
Net Sales
(¥ billion)
Growth Action – 2010
800
600
400
200
0
FY
689.3
622.1
08
09
Operating Income (Loss),
Operating Margin
(¥ billion)
26.1
(%)
12.0
8.0
4.2
4.0
0
(4.0)
(0.9)
(6.5)
08
09
30
20
10
0
(10)
FY
To advance growth, each business is classified either as a strategic expansion
business, with proactive, focused investment of management resources for global
expansion, or as a stable growth, stable earnings business, with well-balanced
investments to advance differentiation and higher added value.
Strategic expansion businesses:
• AN, MMA, and synthetic rubber and elastomer—characterized by the potential to
attain greater earnings through expanded scale and heightened market position.
• Water treatment systems and ion-exchange membrane systems—
characterized by the potential to attain growth through the extension into
peripheral fields based on established strengths.
Stable earnings businesses:
• Polymers/compounds and performance chemicals—characterized by the
potential to attain greater added value and steady growth in earnings through
a leading position in growing market segments.
• Petrochemicals and basic chemicals—characterized by the potential to maintain
stable earnings through a strengthened operational base and structure.
Fiscal 2009 Review
Sales decreased by ¥67.2 billion (9.8%)
from a year ago to ¥622.1 billion and
operating income increased by ¥32.6
billion to ¥26.1 billion.
Although market prices remained low
during the first half of the fiscal year,
operating income from chemicals and
derivative products increased with high
overseas market prices for acrylonitrile (AN)
and adipic acid as an effect of recovering
demand in China and other Asian markets
in the second half of the fiscal year and
with a decrease in inventory valuation loss.
Operating income from polymer
products was flat, as low market prices
due to decreased feedstock prices were
offset by an increase in shipment volumes
reflecting a recovery of demand in
automotive and electronics applications in
the second half of the fiscal year together
with a decrease in inventory valuation loss.
Although recovery in water-treatment
related business was sluggish and ion-
exchange membrane related business was
impacted by the strong yen, operating
income from specialty products increased
with strong performance both in home-use
Highlights
Major Developments for Microza™
In the spring of 2009, the Microza™ MF
hollow-fiber filtration membrane was
adopted for one of the Asia’s largest
waterworks facilities, located in Manila,
the Philippines. Treating saline water with
the Microza™ MF together with RO
membranes, the facility now supplies
100,000 m3 of high-quality drinking water
to some 800,000 residents. Microza™
membranes are also in operation at
Korea’s largest membrane bioreactor
(MBR) facility to treat petrochemical plant
effluent as well as at Sri Lanka’s first
waterworks facility using membrane
filtration. In addition, a new high-flux
submerged membrane module was
launched, targeting expanded sales in
Asia and new applications development.
Microza™ for water treatment
Asahi Kasei Annual Report 2010
13
R&D and Capital Expenditure
(¥ billion except %)
Major Products
Chemicals and derivative products
Ammonia, nitric acid, caustic soda,
acrylonitrile (AN), styrene, adipic acid,
methyl methacrylate (MMA) and
acrylic resin.
Polymer products
Stylac™-AS styrene-acrylonitrile,
Stylac™-ABS acrylonitrile-butadiene-
styrene, Tenac™ polyacetal, Xyron™
modified polyphenylene ether (mPPE),
Leona™ nylon 66, Suntec™
polyethylene (PE), synthetic rubber
and elastomer.
Specialty products
Coating materials, Ceolus™
microcrystalline cellulose, styrene-
butadiene latex, explosives, Microza™
UF and MF membranes and systems,
ion-exchange membranes and
electrolysis systems, Saran Wrap™
cling film, Ziploc™ storage bags,
plastic film, sheet, and foam.
Core Operating Company Directors
Asahi Kasei Chemicals
Masaki Sakamoto
President & Representative Director,
Presidential Executive Officer
Masami Fujimori
Director, Vice-Presidential Executive Officer
Kyosuke Komiya
Director, Senior Executive Officer
Hajime Nagahara
Director, Senior Executive Officer
Yuji Kobayashi
Director, Senior Executive Officer
Yoshio Negishi
Director, Senior Executive Officer
Heiichiro Obanawa
Director, Senior Executive Officer
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
14.0
14.6
2.3%
2.0%
27.6
36.3
32.4
32.2
Major Investments
Completed in
fiscal 2009
Under
construction in
fiscal 2009
New boiler and power generation turbine using SDA pitch
Capacity expansion for ion-exchange membranes
New power generation facility for use with wood biomass fuel
New AN and MMA plants in Thailand
products such as Saran Wrap™ and in
coating materials and with steady
performance in functional additives.
Fiscal 2010 outlook
Sales and operating income for the year
are forecasted to increase. Although
terms of trade will deteriorate due to high
feedstock prices, shipments are
expected to increase particularly in
overseas markets.
R&D
R&D for new chemical products and
production processes is performed in
accordance with our basic ideal of
Creating the Future with Chemistry.
Through the enhancement of our
established core technologies and the
acquisition of new technologies, R&D
focused on the environment, resources,
and energy is advanced to help society to
progress in harmony with the natural
environment and enable each individual to
live in health and comfort.
In chemicals and derivative products,
current projects slated for completion
within 1–2 years include the development
of alternative chemical processes to enable
feedstock diversification as with the
propane process for acrylonitrile (AN), and
the development of chemical production
processes using CO2 as feedstock.
In polymer products, current projects
include the development of polyamide with
ultra-high heat resistance, high rigidity, and
excellent moldability using novel molecular
design, as well as the development of new
composite materials using interface control
technology. Computer-aided engineering
(CAE) technology we developed in-house
has become an essential element of our
R&D capability, and is playing an
increasingly significant role in new market
development and joint development with
customers.
In specialty products, recent notable
achievements include the industry’s first
photocatalytic paint which provides 30-year
durability with one-layer coating—adopted
for Hebel Haus™ homes. Low-cost, safe,
and low-waste processes to manufacture
active pharmaceutical ingredients (APIs) are
under development utilizing our rich base in
process development technology. In the
field of membrane separation, the
technology and commercial know-how
gained with Microza™ is utilized in the
development of a wide range of water-
treatment systems as well as in the
development of membranes for bacteria
separation in bioprocess applications.
50th Anniversary for Saran Wrap™
Saran Wrap™ cling film marks its 50th
anniversary on the Japanese market in
2010. Since its launch in 1960, it has
grown to become an indispensable
partner in the kitchen. The adaptable,
versatile wrap has kept up with the many
changes that have taken place over the
decades. From the advent and spread of
refrigerators, freezers, and microwaves to
the diversification of people’s diets in
recent years—Saran Wrap™ has always
provided the performance and
convenience to satisfy the expectations
of demanding consumers. As the leading
brand of food wrapping cling film in
Japan, Saran Wrap™ will continue to
advance with enhanced quality and ease
of use for generations to come.
14
Operating Segments
Homes
The order-built homes business will be expanded with dominant
competitiveness as the differentiated market leader in the field
of urban unit homes. Housing-related operations will be
developed as an array of businesses, building and utilizing their
own distinctive strengths.
Masahito Hirai
President, Asahi Kasei Homes
Net Sales
(¥ billion)
Growth Action – 2010
500
400
300
200
100
0
FY
Order-built homes operations are focused on the market for home rebuilding in major
urban areas, as a high-earnings operational structure is reinforced and expanded.
409.9
389.7
Specific actions include:
• Successive development of new products tailored to specific market
characteristics in different regions.
• Advancement of cost reductions through shared procurement and logistical
networks with other home builders.
• Productivity enhancements through reduced home construction time.
• Advanced development of technology to enhance the Long Life Home product
strategy.
08
09
Long-term customer relationships are maintained through the provision of
remodeling, real estate, and financial services.
Operating Income,
Operating Margin
(¥ billion)
30
20
10
0
FY
21.9
5.3
08
09
Specific actions include:
• Expansion of real estate operations in brokerage of used Hebel Haus™ homes.
• Expansion of remodeling operations through high-value added services for
long-term maintenance and enhancement of home asset value.
• Establishment of stable earnings in home financing operations with mortgage
securitization and development of homeowners insurance business.
• Development of new businesses utilizing proprietary technology, know-how,
and the asset value of Hebel Haus™ homes.
(%)
9.0
25.3
6.5
6.0
3.0
0
Fiscal 2009 Review
Sales decreased by ¥20.2 billion (4.9%)
from a year ago to ¥389.7 billion and
operating income increased by ¥3.5 billion
(15.9%) to ¥25.3 billion.
Operating income from order-built and
pre-built homes increased with cost
reductions and other measures to heighten
operating efficiency offsetting a substantial
decline in deliveries of order-built Hebel
Haus™ unit homes. Orders for order-built
homes received during the year increased
to ¥306.9 billion, up by ¥15.8 billion from a
year ago, reflecting a recovery in orders
during the second half of the fiscal year.
Despite steady performance in
Highlights
Launch of the Hebel Haus™
Shindaichi Premium
The Hebel Haus™ Shindaichi Premium,
featuring a sedate Japanese aesthetic
that stands out tastefully in mature
neighborhoods, was launched in August
2009. Targeting the market for rebuilding
in urban residential areas and older
suburban subdivisions where excellent
living climates endure, it is the latest
rendition in the Shindaichi series of
pitched-roof, two-story unit homes. With
a design that appeals to every age group,
the home will provide sustained value for
successive generations of residents.
Hebel Haus™ Shindaichi Premium
Asahi Kasei Annual Report 2010
15
R&D and Capital Expenditure
(¥ billion except %)
Major Products
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
2.1
2.5
0.5%
0.6%
6.0
7.0
4.3
3.4
remodeling and real estate operations,
operating income in housing-related
operations decreased with slack
performance in financing operations.
Fiscal 2010 Outlook
With increasing deliveries of unit homes
and apartment buildings as well as
significant cost reductions, sales and
operating income are forecasted to
increase.
R&D
R&D is focused on enhancing core
technologies. Shelter technology brings
greater safety and security through
earthquake resistance, seismic damping,
and fire resistance; greater long-term
usability through physical durability/
evaluation, systematic maintenance, and
Sales Trends
(Asahi Kasei Homes non-consolidated)
(¥ billion)
400
300
200
100
0
FY
354.1
1.1
33.6
347.5
1.0
28.9
319.4
317.6
322.5
1.0
24.5
316.4
1.9
32.1
338.7
1.5
29.9
307.3
297.1
282.3
338.0
2.0
34.0
302.0
05
06
07
08
09
10
Forecast
Others
Pre-built homes
Order-built homes
Hebel Haus Frex “G3”
The Hebel Haus™ Frex “G3” was
launched in January 2009, targeting the
market for three-story housing in urban
areas. Eliminating the need for interior
load-bearing walls, its robust steel
framing system provides complete
freedom in floorplan configuration—
including the creation of large, open living
spaces—and furthermore enables
enhanced integration of natural light,
ease of remodeling; enhanced livability
through thermal insulation, air circulation,
and sound barrier; and enhanced ecology
through energy conservation and reduced
CO2 emissions.
Lifestyle technology brings greater
comfort, convenience, and satisfaction.
Evaluation/simulation technology is being
enhanced to enable customers to more
intuitively appreciate the real-world effects
of variations and modifications, ensuring
that the design of each home is optimized
to match each customer’s preferences.
Additional research is focused on the
physiological and psychological aspects of
comfort, and how these can be utilized
through technological development to
achieve greater energy efficiency and
environmental compatibility in homes
optimized for health and comfort.
Orders Received
(¥ billion)
400
313.3
300
303.4
306.1
291.1
306.9
324.0
200
100
0
FY
05
06
07
08
09
10
Forecast
wind, and greenery within confined urban
plots. Positioned in a more moderate
price bracket than conventional heavy
steel framed homes, the Frex “G3”
broadens the appeal of urban residency
accentuating the natural environment.
Hebel Haus™ houses, Hebel Maison™
apartments, condominiums,
residential land development,
remodeling, real estate,
home financing.
Core Operating Company Directors
Asahi Kasei Homes
Shingo Hatano
Chairman & Director
Masahito Hirai
President & Representative Director,
Presidential Executive Officer
Eisuke Ikeda
Director, Vice-Presidential Executive Officer
Morio Watanabe
Director, Primary Executive Officer
Hideo Toumi
Director, Executive Officer
Hiroshi Kobayashi
Director
Hebel Haus™ Frex “G3”
16
Operating Segments
Health Care
Net Sales
(¥ billion)
120
119.6
113.2
80
40
0
FY
08
09
The pharmaceutical business is advancing as a specialized,
R&D-centered operation, expanding earnings through the
launch of new drugs and reinforcing the operational foundation
through the steady advancement of R&D.
Toshio Asano
President, Asahi Kasei Pharma
Growth Action – 2010
Pharmaceutical-related:
Advancement as a specialized, R&D-centered operation, with management
resources focused on the development of new world-class drugs to build on an
established presence in selected therapeutic fields. Maintaining slim, robust
management while expanding operations. In diagnostics, investment of
management resources is focused on products with strong growth prospects.
Medical device-related:
Based on established leadership in devices for extracorporeal circulation, the
business is being transformed for development as a comprehensive leader in
blood-related healthcare systems, spanning from disease treatment to preventive
medicine and blood-based risk-factor analysis/diagnosis. Over the longer term,
healthcare systems will be developed in regenerative medicine, the nervous
system, and other fields.
Operating Income,
Operating Margin
(¥ billion)
15
12
9
6
3
0
FY
12.0
10.1
4.0
3.5
08
09
(%)
15.0
12.0
9.0
6.0
3.0
0
Fiscal 2009 Review
Sales decreased by ¥6.4 billion (5.4%)
from a year ago to ¥113.2 billion and
operating income decreased by ¥8.0 billion
(66.8%) to ¥4.0 billion.
Although increased shipments of the
Flivas™ agent for treatment of benign
prostatic hyperplasia and the Elcitonin™
calcitonin formulation contributed to sales
growth in pharmaceuticals operations,
operating income decreased due to a
decline in licensing income.
Shipment volumes of APS™
polysulfone-membrane artificial kidneys
and Sepacell™ leukocyte reduction filters
grew mainly in export, but operating
income in device-related operations
decreased with a significant impact of the
strong yen on each product family and with
the effect of greater capital depreciation.
Fiscal 2010 Outlook
The overall sales and operating income for
the segment are forecasted to increase. In
pharmaceuticals operations, NHI price
revisions will have a negative impact on
product prices, but shipments are expected
to increase, most notably for Recomodulin™
recombinant thrombomodulin. In device-
related operations, shipments of APS™
polysulfone-membrane artificial kidneys
and Planova™ virus removal filters are
expected to increase, especially in
overseas markets.
Highlights
Expansion of Bioprocess Business
Asahi Kasei Medical, a pioneer of virus
removal filters, is advancing a strategic
program of expansion of its bioprocess
business. A substantial capacity
expansion for Planova™ virus removal
filters was achieved with the start-up of a
new hollow-fiber spinning plant in
Nobeoka, Miyazaki, in April 2009 as well
as the completion of a new assembly
plant in Oita in May 2010. The product
lineup was expanded in June 2009 with
the launch of Planova™ BioEX virus
removal filters for biopharmaceutical
production, opening up a new area of
demand.
New plant for Planova™ hollow-fiber membrane
Asahi Kasei Annual Report 2010
17
With the expansion of medical devices-related operations
identified as a strategic objective for the group, global business
development will be advanced through proactive capital
investment and R&D for innovative therapeutic and medical-
related devices and systems.
Yasuyuki Yoshida
President, Asahi Kasei Kuraray Medical & Asahi Kasei Medical
R&D and Capital Expenditure
(¥ billion except %)
Major Products
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
18.4
16.4
16.3%
13.7%
9.2
31.6
12.2
10.3
Major Investments
Completed in
fiscal 2009
Under
construction in
fiscal 2009
Expansion of capacity for spinning polysulfone hollow-fiber membrane for APS™ dialyzers
New plant for spinning hollow-fiber membrane for Planova™ virus removal filters
New plant for Sepacell™ leukocyte reduction filters
New assembly plant for Planova™ virus removal filters
New plant for therapeutic apheresis devices
Pharmaceutical Product Pipeline
(as of May 2010)
Development stage
Product
Phase III
AT-877
(injection)
PTH
(injection)
Objective
Additional
indication
New biologic
Class
Rho-kinase inhibitor
Synthetic human
parathyroid hormone
Indication
Acute cerebral
infarction
Osteoporosis
AK-120 (oral)
Additional indication
Famiclovir antiviral
Herpes simplex
Phase II
AT-877 (oral)
Additional indication
New dosage form
Rho-kinase inhibitor
Pulmonary
hypertension
Phase II
(overseas)
AK150
(injection)
ART-123
(injection)
AK106
New chemical entity
Pentosan polysulfate
Osteoarthritis
New biologic
Recombinant human
thrombomodulin
Septicemia with
disseminated intravas-
cular coagulation
New chemical entity
Anti-inflammatory
Rheumatoid arthritis
R&D
In pharmaceuticals, the focus is on
addressing unmet medical needs within
the context of a mature market and an
aging society, particularly in the fields of
orthopedics and urology, helping to
enable people to live in health and
comfort. The development of new world-
class drugs is being advanced with
continuous innovation of our proprietary
technology and enhanced collaboration
with advanced technologies from around
the world.
In medical devices and related
systems, developments are further
advanced in hemodialysis, therapeutic
apheresis, leukocyte reduction, and virus
removal, with a focus on next-generation
fields of research including regenerative
medicine utilizing autohemotherapy.
Alliance with NxStage Medical
In May 2009, Asahi Kasei Kuraray Medical
concluded an agreement with NxStage
Medical, Inc. on a multi-faceted alliance
in the field of hemodialysis products,
providing for the assembly of dialyzers on
consignment at NxStage Medical’s
manufacturing facilities in Germany using
hollow-fiber membrane from Asahi Kasei
Kuraray Medical. This base for dialyzer
assembly in Europe will enhance
Asahi Kasei Kuraray Medical’s
competitiveness in global markets while
minimizing exchange-rate risk.
Polysulfone-membrane artificial kidneys
Pharmaceutical-related
Pharmaceuticals including
Recomodulin™, Elcitonin™, and
Flivas™, diagnostic enzymes and
reagents.
Medical device-related
APS™ polysulfone-membrane artificial
kidneys (dialyzers), Cellsorba™
leukocyte adsorption columns,
Planova™ virus removal filters,
Sepacell™ leukocyte reduction filters.
Core Operating Company Directors
Asahi Kasei Pharma
Toshio Asano
President & Representative Director,
Presidential Executive Officer
Akio Kobayashi
Director, Primary Executive Officer
Kazuyoshi Hori
Director, Senior Executive Officer
Yasuyuki Yoshida
Director
Asahi Kasei Kuraray Medical
Yasuyuki Yoshida
President & Representative Director,
Presidential Executive Officer
Naoyuki Ohya
Director, Primary Executive Officer
Takao Kiyota
Director, Primary Executive Officer
Hideo Horii
Director
Toshio Asano
Director
Asahi Kasei Medical
Yasuyuki Yoshida
President & Representative Director,
Presidential Executive Officer
Naoyuki Ohya
Director, Primary Executive Officer
Takao Kiyota
Director, Primary Executive Officer
Toshio Asano
Director
18
Operating Segments
Fibers
Net Sales
(¥ billion)
120
116.4
101.2
80
40
0
FY
We are advancing a transformation of our business portfolio by
expanding business in non-apparel and industrial-use materials,
while enhancing domestic operations, reinforcing the operational
foundation, and nurturing new businesses.
Hidefumi Takai
President, Asahi Kasei Fibers
Growth Action – 2010
Expansion of overseas business and development of business in non-apparel and
industrial-use materials to transform the business portfolio centered on the
domestic market and material for apparel. Development of new businesses as
next-generation core fields of operation while strengthening base for profitability
in domestic business operations. Reviewing investments and working capital to
improve cash flow.
Heightening earnings in core businesses:
• Expanding business in global markets and industrial-use materials.
• Raising operating rates to full capacity.
• Continuous cost reduction.
Establishing and expanding new businesses:
08
09
• Developing new businesses using cellulose and new polymers; nurturing them
into new core businesses.
• Advancing alliances and joint projects with partners within and outside the
Asahi Kasei Group; connecting established fiber technology and know-how
with growth fields.
Operating Income (Loss),
Operating Margin
(¥ billion)
0
(0.5)
(1.0)
(1.5)
(2.0)
(2.5)
(3.0)
FY
(1.3)
(1.5)
(2.7)
(2.8)
09
08
(%)
0
(0.5)
(1.0)
(1.5)
(2.0)
(2.5)
(3.0)
Highlights
New Developments in Nonwovens
As part of its focus on high-performance
nonwovens for industrial use, in March
2009 Asahi Kasei Fibers completed a
semi-commercial production line and
began pre-marketing for nonwovens
made with super engineering plastics.
Made possible by proprietary innovations
in manufacturing technology, these new
nonwovens feature high uniformity,
chemical resistance, and heat resistance.
Another recent product is the Precisé™
polyester nonwoven featuring high barrier
performance with ultrafine fiber layers. Its
sales are expanding in growth fields such
as the environment, energy, medical, and
electronics.
Eutec™ oil-water separation filters made with
ultrafine nonwovens
Asahi Kasei Annual Report 2010
19
R&D and Capital Expenditure
(¥ billion except %)
Major Products
Roica™ elastic polyurethane filament,
Bemberg™ cupro regenerated
cellulosic fiber, nonwovens including
Eltas™ spunbond and Lamous™
artificial suede, Leona™ nylon 66
filament.
Core Operating Company Directors
Asahi Kasei Fibers
Hidefumi Takai
President & Representative Director,
Presidential Executive Officer
Fujio Nishimura
Director, Senior Executive Officer
Masaki Sakamoto
Director
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
3.8
3.9
3.8%
3.8%
4.6
12.4
7.7
5.2
Major Investments
Completed in
fiscal 2009
Capacity expansion for Roica™ elastic polyurethane filament in Thailand
Fiscal 2009 Review
Sales decreased by ¥15.2 billion from a
year ago to ¥101.2 billion and an
operating loss of ¥2.8 billion was
recorded as profitability decreased by
¥1.3 billion.
Overseas shipment volumes of
Roica™ elastic polyurethane filament
grew, but operating income decreased
due to the significant impact of low
market prices and the strong yen.
Exports of Bemberg™ regenerated
cellulose were steady overall, but
operating income decreased mainly due
to the strong yen. Operating income in
nonwovens operations increased with
growth in shipments of Lamous™
artificial suede for car seats and the
effect of operating cost reductions,
although shipments of spunbond
decreased. Despite lower shipment
volumes of Leona™ nylon 66 filament,
operating income increased with
declining feedstock prices and cost
reductions.
Fiscal 2010 Outlook
We forecast sales and operating income
to increase during this fiscal year
despite high feedstock prices. In
addition to the positive effect of
structural improvements, market prices
are expected to rise and shipments of
major products such as Roica™,
Bemberg™, spunbond, and Leona™
filament are expected to increase.
R&D
R&D is focused on the development of
new materials and high-value added
grades of existing materials such as
Roica™ polyurethane, Bemberg™
cupro, Leona™ nylon 66, and various
nonwovens. For the advancement of
global development and the expansion
of industrial-use materials based on the
Growth Action – 2010 mid-term
initiative, we are enriching and
enhancing our R&D functions to achieve
results more quickly.
Kasei Fibers, contribute to heightened
brand recognition for Asahi Kasei in China
and reinforce a strong presence for
Bemberg™ in the world of Chinese
fashion and apparel.
Award for Fashion Design
Creativity in China
Two of China’s leading fashion designers
were honored as recipients of the Asahi
Kasei Award for Fashion Design Creativity
in China, with fashion shows of apparel
featuring Bemberg™ fabric held together
with the 5th & 6th award ceremonies in
Beijing in November 2009 and March
2010. The shows and award ceremonies,
jointly held by Asahi Kasei and Asahi
November 2009 fashion show in China featuring
Bemberg™
20
Operating Segments
Electronics
Growth of a high-earnings operational structure in electronic
devices is obtained by establishing a position as the leading
supplier in select product categories, meeting the needs of
next-generation electronics.
Hideki Kobori
President, Asahi Kasei Microdevices
Net Sales
(¥ billion)
Growth Action – 2010
150
120
90
60
30
0
FY
142.7
129.7
08
09
Operating Income,
Operating Margin
(¥ billion)
7.3
7.2
5.6
5.1
8
6
4
2
0
(%)
8.0
6.0
4.0
2.0
0
FY
08
09
Highlights
Growing Adoption of Electronic
Compass Products
Electronic compass products from Asahi
Kasei Microdevices are increasingly
adopted in mobile phones and
smartphones all around the world. By
enabling onscreen maps to automatically
rotate to match the direction the user is
facing, the electronic compass provides
Advancement of high-earnings operations by securing industry leadership status
in each market segment and functional category, building a presence as a vital
partner which provides customers with materials and functions that are
indispensable for production processes and final products, utilizing superior
development, design, and production technologies and marketing strength.
In electronic devices:
Expansion of business while maintaining high market share through addition of
peripheral functions in established applications and market development in new
high-growth fields, based on the two core technologies of sensor technology and
mixed-signal LSI technology, including new developments which combine the
two core technologies. Further business expansion through unified management
of Asahi Kasei Toko Power Devices for greater synergies between our
established technologies and the IP cores and process technologies related to
power management semiconductors.
In electronic materials:
Expansion and reinforcement of industry-leading businesses including Hipore™ Li-
ion battery (LiB) separator, dry film photoresist (DF), and large photomask pellicles,
while launching new products which contribute to the reduction of environmental
burden. For Hipore™, maintaining the No. 1 position in portable applications and
establishing a leading position in the promising market for automotive applications.
For DF, with the world’s largest production capacity, solidifying the market position in
high-end applications, and expanding supply to the global market while enhancing
cost competitiveness in order to further increase market share.
Fiscal 2009 Review
Sales increased by ¥13.0 billion (10.1%)
from a year ago to ¥142.7 billion and
operating income decreased slightly to
¥7.2 billion.
Operating income from electronic
devices increased with substantial
growth in shipments of LSIs in new
applications outweighing a sharp impact
of the strong yen. Shipments of electronic
materials recovered, particularly for
Hipore™ LiB separator, but operating
the key to a wide variety of new functions
and services, including novel advertising
media in combination with GPS location
information and high-speed data
networks.
Electronic compass
Asahi Kasei Annual Report 2010
21
Growth with increasing global market share and solid profitability
in electronic materials is obtained by reducing costs in existing
products as well as developing competitive new grades and new
products which provide new value to customers.
Makoto Konosu
President, Asahi Kasei E-materials
R&D and Capital Expenditure
(¥ billion except %)
Major Products
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
18.4
18.4
12.9%
20.1%
22.8
31.8
23.6
19.8
Major Investments
Completed in
fiscal 2009
Capacity expansion for LSIs
Capacity expansions for Hipore™ LiB separator in Moriyama
Under
construction in
fiscal 2009
New plant for Hipore™ LiB separator in Hyuga, expansion thereof
Mixed-signal LSIs, Hall elements,
Hall effect ICs, fine-pattern coils,
Hipore™ Li-ion battery separator,
photomask pellicles, plastic optical
fiber, light-diffusion plates, APR™
photosensitive resin and printing plate
making systems, epoxy resin, Pimel™
photosensitive polyimide precursor,
Sunfort™ dry film photoresist (DF),
glass fabric for printed wiring boards.
Core Operating Company Directors
income decreased with the impact of
falling market prices.
Fiscal 2010 Outlook
We forecast an increase in both sales
and operating income during this fiscal
year. Sales volumes are projected to
increase for both devices and materials
thanks to recovering demand.
Significant cost reductions will also be
performed throughout the segment.
R&D
Swift R&D to keep pace with the rapid
technology innovation of the electronics
industry is directed toward the creation
of products that meet the emerging
needs and demanding requirements
which are identified through close
interaction with customers. In electronic
Successive Capacity Expansions
for Hipore™
Asahi Kasei E-materials is advancing a
program to significantly expand capacity
for Hipore™ LiB separator. Its Hipore™
plant in Moriyama, Shiga, was expanded
in two phases in July and September
2009. A new Hipore™ plant in Hyuga,
Miyazaki, began operation in April 2010,
and an expansion of this new plant is
under way. Hipore™ enjoys a global
devices, advanced development of
high-performance products is based on
compound semiconductor process
technology gained through development
of high-sensitivity magnetic sensors and
mixed-signal LSI technology.
Development of new electronic
materials compatible with emerging
standards for fine patterning, high
density, and high transmission speeds
in the field of semiconductors and
package substrates is based on
technologies for the design, synthesis,
thin-film coating, and fine-pattern
processing of photosensitive polymers.
Other advanced developments include
materials with new added value for flat-
panel displays.
Asahi Kasei Microdevices
Hideki Kobori
President & Representative Director,
Presidential Executive Officer
Masafumi Nakao
Director, Executive Officer
Makoto Konosu
Director
Asahi Kasei E-materials
Makoto Konosu
President & Representative Director,
Presidential Executive Officer
Tetsuro Ota
Director, Senior Executive Officer
Shigeki Takayama
Director, Executive Officer
market share of some 50%, and its
applications are being expanded from
laptop computers and mobile phones to
hybrid-electric and all-electric vehicles,
where rapid growth is forecasted.
Hipore™ LiB separator
22
Operating Segments
Construction Materials
With a reinforced commitment to safety, security, and comfort,
we are focused on the development of high-value added
products and construction technologies that meet customer
needs in our core areas of AAC-related products, foundation
systems, insulation materials, and structural components.
Hiroshi Kobayashi
President, Asahi Kasei Construction Materials
Net Sales
(¥ billion)
Growth Action – 2010
We provide solution-based products and services to meet increasingly
sophisticated customer needs in our four core areas, contributing to enhanced
infrastructure and advancing synergies with Asahi Kasei Homes.
AAC-related:
Expanding operations through the incorporation of peripheral businesses, and
further reinforcing the operational foundation through pervasive cost reduction.
Foundation systems:
Expanding new applications in the field of seismic reinforcement, with our
competitive Eazet™ piling system based on small-diameter steel pipe and ATT
Column™ hybrid piling system combining a cement column and a bladed steel
pipe. Securing a distinctive position in the field of foundation systems with new
developments to enhance the lineup of products and services.
Insulation materials:
Strengthening the product lineup through the development of new grades and a
diverse range of composite products that meet growing demand as concern
about global warming has increasingly brought energy conservation into focus.
Structural materials:
Expanding the business in steel-frame structural components and systems with a
focus on enhancing the safety and security of steel frame structures and buildings.
80
60
40
20
0
FY
60.9
47.0
08
09
Operating Income,
Operating Margin
(¥ billion)
3
2
1
0
FY
1.7
1.2
2.8
2.6
08
09
(%)
12.0
8.0
4.0
0
Highlights
Artmule Sicera™ Premium Panels
In the spring of 2009, Artmule Sicera™
was launched as a premium line of
exterior wall panels with a special high-
performance paint applied to Hebel™ and
Hebel Lite™ to provide excellent
durability and anti-fouling performance.
The high-durability paint is a hybrid
system comprising silicone resin and
acrylic-silicone resin, featuring superior
resistance to ultraviolet degradation. The
silicone characteristics of high water
repellency and low water absorbency
serve to keep the surface dry, sustaining
the anti-fouling effect for an extended
duration. These panels thus maintain their
beautiful matte-finish texture over a long
term with a minimal maintenance cost
requirement.
Artmule Sicera™ exterior wall panel
Asahi Kasei Annual Report 2010
23
R&D and Capital Expenditure
(¥ billion except %)
Major Products
Hebel™ autoclaved aerated concrete
(AAC) panels, Eazet™ and other piles
and foundation systems, Neoma™
foam insulation panels, steel-frame
structural components.
Core Operating Company Directors
Asahi Kasei Construction Materials
Hiroshi Kobayashi
President & Representative Director,
Presidential Executive Officer
Masahumi Hunaki
Director, Senior Executive Officer
Masateru Sakai
Director, Senior Executive Officer
Masahito Hirai
Director
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
1.1
1.0
2.3%
1.7%
1.2
2.4
3.3
3.6
Fiscal 2009 Review
Sales decreased by ¥13.9 billion
(22.8%) from a year ago to ¥47.0 billion
and operating income decreased by
¥0.5 billion (28.6%) to ¥1.2 billion.
A decline in new construction starts
resulted in lower shipments of Hebel™
autoclaved aerated concrete (AAC)
panels and the BasePack™ earthquake-
resistant column base attachment
system, and operating income in building
materials and housing materials
operations decreased slightly.
Operating income in foundation
systems operations decreased with
lower shipment volumes of Eazet™
piling systems for small-scale
construction and the DynaWing™ pre-
cast concrete piling system featuring
minimal soil disposal and high load-
bearing capacity.
Although insulation materials
operations were also affected by the
decline in new construction starts, cost
reductions enabled an increase in
operating income.
Fiscal 2010 Outlook
We forecast an increase in sales and
operating income. Development of new
applications in foundation systems is
expected to advance, and shipments of
insulation materials are expected to
grow with demand buoyed by
government policies to promote energy
conservation. Shipments of Hebel™
AAC, however, are forecasted to remain
sluggish as construction demand
continues to be weak. Operating costs
will be lower as an effect of optimization
of the production infrastructure.
R&D
R&D is focused on strengthening the
operational base for established
businesses of AAC, phenolic foam
insulation, and high-performance
foundation systems, as well as the
proactive development of new products
and services in peripheral areas.
Fire Insurance Product
In January 2010, Asahi Kasei
Construction Materials began handling a
fire insurance product called “Triangle A”
as an agent for AIU Insurance Co.
Developed jointly with AIU, “Triangle A”
enables wood-frame homes built with
AAC walls to continue to be subject to
discounted premiums based on AAC’s
fire-resistant characteristics. While wood-
fame/AAC homes had generally enjoyed
this discount as a separate category of
structure for the calculation of fire
insurance premiums, a January 2010
revision of the structural categorization
grouped all wood-frame homes into a
single category regardless of exterior wall
material. “Triangle A” fire insurance policies
maintain the discount for wood-frame
homes built with Hebel Powerboard™ and
Hebel Lite™ AAC walls.
A house built with Hebel Powerboard™
exterior walls
24
Operating Segments
Services, Engineering and Others
Net Sales
(¥ billion)
40
30
20
10
0
FY
27.3
17.6
08
09
Operating Income,
Operating Margin
(¥ billion)
6
4
2
0
FY
5.6
20.5
10.2
1.8
08
09
R&D and Capital Expenditure
R&D expenditure
R&D expenditure as
% of net sales
Capital expenditure
(¥ billion except %)
Depreciation and
amortization
Fiscal 2009
Fiscal 2008
0.21
0.09
1.2%
0.3%
0.9
1.1
0.8
0.8
Major Products
Plant engineering, environmental
engineering, personnel staffing and
placement, think tank services.
Fiscal 2009 Review
Sales decreased by ¥9.7 billion (35.4%)
from a year ago to ¥17.6 billion and
operating income decreased by ¥3.8
billion (67.6%) to ¥1.8 billion.
Operating income in engineering
operations decreased as a curtailment
of capital investments led to a decline in
orders received.
Fiscal 2010 Outlook
Overall sales and operating income are
forecasted to remain largely unchanged
from fiscal 2009 with steady performance
expected in engineering operations.
R&D
Engineering developments in progress
include technology to inspect for internal
pipe corrosion as well as a joint project
for next-generation automotive safety
features using computer simulation.
Note: From April 2010, operations previously classified
in the Services, Engineering and Others segment
are classified in a new “Others” category.
(%)
30.0
20.0
10.0
0
Asahi Kasei Annual Report 2010
25
Toward Sustainable Growth
Contents
26 Corporate Governance
30 Corporate Social Responsibility
32 Directors, Corporate Auditors, Executive Officers
26
Corporate Governance
Basic Concept for Corporate Governance
We believe that constant effort to increase the efficiency
and transparency of management is essential for
continuous enhancement of the corporate value of the
Asahi Kasei Group. One major reform for this purpose was
the adoption of the structure of a holding company and
core operating companies, since which time the Asahi
Kasei Group has exercised corporate governance for the
Group based on the following two principles.
1) Based on the structure of a holding company and core
operating companies, the core operating companies are
responsible for business execution and the holding
company is responsible for oversight.
2) The Group Approval Authority Regulations are positioned
as the highest ranking among all the regulations
governing the overall Group for decision-making in
executing business. Authority is distributed to each organ
of the holding company and the core operating
companies in accordance with the degree of influence on
management.
In this context, corporate governance is further enhanced
by implementing various measures, including the election of
multiple Outside Directors and the institutionalization of
Internal Auditing and Internal Control.
We will continue to advance measures to heighten
corporate governance for the further enhancement of
corporate value.
Structures Related to Management Decision-Making, Execution, and Oversight
Management Configuration
Holding company
Asahi Kasei
Board of Corporate Auditors
Shareholders
(as of April, 2010)
Internal Auditing
Internal Control
Board of Directors
Group Advisory Committee
Chairman of the Board
President
Strategic Management Council
CSR Council
Group staff functions
• Strategic planning & analysis
• Compliance & risk management
• Resources administration
New Business Development
Executive Officer for
Chemicals & Fibers
Executive Officer for
Homes &
Construction Materials
Executive Officer for
Electronics
Executive Officer for
Health Care
Core operating
companies
Asahi Kasei
Fibers
Asahi Kasei
Chemicals
Fiber, textiles
Chemicals
Asahi Kasei
Construction
Materials
Construction
materials
Asahi Kasei
Homes
Asahi Kasei
Microdevices
Asahi Kasei
E-materials
Asahi Kasei
Pharma
Housing
Electronic
devices
Electronic
materials
Pharmaceuticals
Asahi Kasei
Kuraray
Medical
Medical
devices
Asahi Kasei
Medical
Medical-related
products/
systems
Chemicals &
Fibers business sector
Homes & Construction
Materials business sector
Electronics
business sector
Health Care
business sector
Asahi Kasei Annual Report 2010
27
Board of Directors
Oversees group management, and deliberates and decides
on basic group policy and strategy, and on substantive
proposals by the Strategic Management Council. The
Chairman of the holding company chairs meetings of the
Board of Directors. Meets once or twice per month.
Board of Corporate Auditors
Comprises four Corporate Auditors, two of whom are
Outside Corporate Auditors. Corporate Auditors exchange
views, deliberate, and decide on substantive matters
relating to auditing. Meets at least once per quarter.
Strategic Management Council
Deliberates and decides on substantive matters relating to
the operation of the holding company and of the group. Its
decisions are made by the President of the holding
company, who chairs meetings of the council, after
deliberation by the attending constituent members. Meets
twice per month.
Group Advisory Committee
The advisory body to the holding company’s Board of
Directors. Meets twice per year.
We employ an Executive Officer system, under which we
have ten Directors, including three Outside Directors, and
sixteen Executive Officers, including five who concurrently
serve as Director, as well as a Corporate Auditor system,
under which we have four Corporate Auditors, including
two Outside Corporate Auditors. (as of June 30, 2010)
To help ensure that Directors and Corporate Auditors
may perform their duties to the fullest extent, in accordance
with Article 426 Paragraph 1 of the Corporation Law our
Articles of Incorporation provide for the indemnification of
Directors (including former Directors) and Corporate
Auditors (including former Corporate Auditors) from liability
stipulated in Article 423 Paragraph 1 of the Corporation
Law, through resolution of the Board of Directors, within
limitations set forth by law or ordinance.
Corporate Governance System
An outline of the corporate governance system of the Asahi
Kasei Group is as follows.
1) Asahi Kasei Corporation is a holding company and has
elected to take the form of a company with a Board of
Corporate Auditors
2) Two Outside Directors were elected in June 2007 to
enable oversight of the management of the Asahi Kasei
Group based on their wealth of experience and broad
range of insight, for the further strengthening of the
management oversight function of the Board of Directors.
Furthermore, an additional Outside Director was installed
in June 2008 and the Company currently has three
Outside Directors out of ten Directors.
3) The company has a Group Advisory Committee as an
advisory body to the Board of Directors, enabling the
receipt of various advice and recommendations of
knowledgeable persons from outside the Company for
the benefit of the overall management of the Asahi Kasei
Group.
4) Internal Auditing serves as the corporate organ for
internal audits of the execution of duties in the Asahi
Kasei Group in accordance with basic corporate
regulations for internal audits. Results of the internal
audits conducted by each group staff function are also
reported to Internal Auditing, so that all information
regarding results of internal audits in the Asahi Kasei
Group are centralized at Internal Auditing.
5) In accordance with the audit policy adopted by the Board
of Corporate Auditors, each Corporate Auditor audits
Directors in the discharge of their duties by attending
Board of Directors’ meetings and examining business
performance. Corporate Auditors of the Company and
Corporate Auditors of the core operating companies
exchange information on a regular basis. Our Corporate
Auditors Office has multiple dedicated personnel who,
independently from Directors, support the Corporate
Auditors in their duties.
6) PricewaterhouseCoopers Aarata performs financial
audits of the Company and the core operating
companies in accordance with the Corporation Law and
the Financial Instruments and Exchange Act.
7) Company standards stipulate that as a general rule a
Director is not to concurrently serve as Director at four or
more other companies whose shares are stock-market
listed.
8) The Company has a performance-linked remuneration
system as stated above, and remuneration of Directors is
determined by the Board of Directors within the range
stipulated therein.
Given the above, the current corporate governance system
of the Asahi Kasei Group is considered to be optimum
within the formulation of a holding company/core operating
company configuration and a company with a Board of
Corporate Auditors.
28
Corporate Governance
Audits
Internal Auditing is a corporate organ under the direct
authority of the President of the holding company. Each
year, Internal Auditing prepares plans for an internal audit in
accordance with basic corporate regulations for internal
audits, obtains the President’s approval for these plans, and
then performs the internal audit.
In accordance with the audit policy adopted by the
Board of Corporate Auditors, each Corporate Auditor
attends meetings of the Board of Directors and audits
Directors in the discharge of their duties through
examination of business performance. The Corporate
Auditors Office provides staff to support Corporate Auditors
in their duties.
PricewaterhouseCoopers Aarata is contracted as the
Independent Auditors to perform financial audits in
accordance with the Companies Act and Financial
Instruments and Exchange Act. Partners of the
Independent Auditors designated to perform the audit for
fiscal 2009 were Mr. Katsunori Sasayama and Mr. Masahiko
Hagimori. The Independent Auditors form a team of
assistants for performance of the audit in accordance with
its audit plan. The team mainly comprises certified public
accountants and junior accountants, and also includes
certified information systems accountants and other
specialist accountants.
Internal Auditing, the Board of Corporate Auditors, and
the Corporate Auditors of core operating companies and
other subsidiaries regularly meet to confirm the
effectiveness of internal governance systems for legal
compliance and risk management. The Board of Corporate
Auditors provides counsel to the Independent Auditors with
respect to its audit plan, and receives the results of the
consolidated financial audit of Asahi Kasei each quarter and
each fiscal year.
Adoption of Shareholder Rights Plan
The Asahi Kasei Group has established a basic corporate
policy concerning the nature of parties who would control
the company’s financial and operational decisions. The
adoption of a Shareholder Rights Plan, comprising
measures in response to large acquisition of shares to
prevent control of the company’s financial and operational
decisions by inappropriate parties in light of this basic
corporate policy, was approved at the Ordinary General
Meeting of Shareholders held in June 2008.
The purpose of the Shareholder Rights Plan is to secure
and heighten the company’s corporate value and the
common interest of shareholders in the event of a purchase
of 20% or more of the company’s shares, by ensuring
necessary and sufficient information and time for
shareholders to make proper judgment, by obtaining an
opportunity to negotiate with the purchasing party, and
otherwise. Please refer to the relevant news release at
www.asahi-kasei.co.jp/asahi/en/news/2008/e080423.html
for more details.
Compliance
Corporate Ethics
Our Corporate Ethics – Basic Policy and Code of Conduct
is the standard and guide for ethical conduct throughout
the day-to-day work of each and every member of the
Asahi Kasei Group. It has been translated into English and
Chinese, and it or an equivalent standard applies to all
majority-held subsidiaries the world over.
Protection of Personal Information
Asahi Kasei is committed to the proper handling and use of
personal information, in accordance with our basic policy.
Education and training for all employees, including the
distribution of an information security handbook which
covers issues related to personal information protection, is
monitored by the Corporate Ethics Committee.
Asahi Kasei Annual Report 2010
29
Information Disclosure Policy
The Asahi Kasei Group has established an Information
Disclosure Policy, enhancing the management and
disclosure of corporate information to obtain greater
corporate value. Corporate regulations for information
disclosure based on this policy were adopted on July 1,
2008. The basic principles of the Information Disclosure
Policy are shown below.
citizen” as a Guiding Precept. “Ensuring transparency” is
a fundamental element of our Corporate Ethics – Basic
Policy. We proactively engage in information disclosure
and communication based on these basic concepts.
• Corporate information is disclosed fairly, impartially,
accurately, and as swiftly as possible to stakeholders such
as customers, suppliers, shareholders, investors, employees,
and local communities, and to the general public.
• With our Basic Credo of “contributing to human life and
human livelihood through constant innovation and
advances based in science and the human intellect,” we
hold “progressing in concert with society, and honoring
the laws and standards of society as a good corporate
• In our communication with stakeholders and with the
general public, we strive for dialog which fosters a
relationship of trust, promoting greater understanding of
the Asahi Kasei Group and its operations, to increase
brand strength and heighten corporate value.
Compliance Monitoring by the Corporate Ethics Committee
Monitoring of compliance and oversight of education and
training for compliance throughout the Asahi Kasei Group are
performed by the Corporate Ethics Committee, which was
formed in July 1998. Where shortcomings are discovered,
the committee formulates and implements measures for
improvement.
The committee discusses the training programs
implemented at each group company, measures for
prevention of sexual harassment, environmental
countermeasures, the state of compliance with laws and
regulations including personal information protection law,
and operation of the Compliance Hotline.
Risk Management
Risk Management Committee
The Risk Management Committee was established in April
2005 to enhance the risk management system for prevention
of operational crises and minimization of the effects should a
crisis occur. Our Basic Risk Management Regulations
provide clear guidelines to heighten the capability and
effectiveness for risk management and emergency response
throughout the Asahi Kasei Group.
Corporate Risk Management
Corporate Risk Management works with the various divisions
and departments to guide the proper response to any major
accidents, incidents, or problems which cause significant
damage to Asahi Kasei Group operations or which may
foreseeably cause Asahi Kasei Group operations to have
adverse effects on the general public. In fiscal 2008, a New
Influenza Response Manual was instituted in preparation for
any global pandemic of a new strain of influenza. In fiscal
2009, we adopted a set of internal rules and procedures to
guide the response to a major earthquake in the Kanto area
of Japan, where our Tokyo head office is located.
30
Corporate Social Responsibility
CSR at the Asahi Kasei Group
CSR in Action
We believe that CSR is achieved by raising corporate value
for our various stakeholders through our business
operations in accordance with our basic tenets of
contribution to human life and human livelihood through
constant innovation and advances based in science and the
human intellect.
CSR Fundamentals
Based on a clear understanding of the effects of our
operations on the global environment and the global
community, our efforts and actions related to CSR are
focused on four CSR Fundamentals: Compliance, Respect
for Employee Individuality, Responsible Care*, and
Corporate Citizenship.
Asahi Kasei Group CSR
The
Customer
Customer
satisfaction
The
Employee
Employee
fulfillment
The
Supplier
Fair business
dealings
The
Community
Community
outreach
The
Environment
Environmental
protection
Sustainable Increase
in Corporate Value
The
Shareholder
Shareholder
returns
The Local
Economy
Local economic
participation
Business Operations
CSR Fundamentals
Compliance
Respect for Employee
Individuality
Responsible Care
Corporate Citizenship
* Responsible Care represents the commitment and initiative to secure and improve safety and environmental protection at every step of the product life-cycle
through the individual determination and responsibility of each firm producing and handling chemical products. As of October 2009, fifty-three countries
throughout the world have a Responsible Care program.
Asahi Kasei Annual Report 2010
31
Framework for Advancement
The CSR Council, formed in April 2005 with the holding
company President serving as chair, formulates CSR policy
and guides the CSR effort throughout the Asahi Kasei
Group. At the same time, it monitors specific CSR initiatives
implemented by its seven committees, including the
Corporate Ethics Committee to ensure regulatory
compliance and the Responsible Care Committee to guide
efforts for environment, health, and safety.
President of
holding company
Corporate Ethics Committee
• Preparation of Basic Policy and Code of Conduct for corporate ethics
• Advancement of ethics education and operation of compliance hotline
CSR Council
Responsible Care Committee
• Formulation of unified policy
and action plans
• Guidance and counsel for
the subordinate committees
• Preparation of CSR Reports
• Monitoring of independent
evaluation
• Disclosure of CSR information
in concert with Corporate
Communications and
Investor Relations
• Deliberation of plans and results in regard to environmental protection, product safety,
operational safety, etc.
Market Compliance Committee
• Examination prior to all across-the-board price revisions for compliance with Antimonopoly Law
Export Control Committee
• Compliance with export-related regulations
Risk Management Committee
• Formulation of plans and measures to respond to actual or potential crises
Community Fellowship Committee
• Formulation of policy, plans, and courses of action in regard to community fellowship activities
Global Warming Response Committee
• Deliberation and adoption of group-wide measures to counter global warming
Highlight
Independent Drinking Water Supply Systems
Asahi Kasei Chemicals has installed drinking water supply
systems at three Asahi Kasei Group plant sites: Moriyama,
Shiga prefecture, in February 2008; Suzuka, Mie prefecture,
in April 2009; and Nobeoka, Miyazaki prefecture, in June
2010.
The systems utilize Microza™ microfiltration
membranes to purify deep well water. While serving to
supply drinking water to personnel working at these sites
on a daily basis, these systems also provide a vital
independent back-up as a secure source of safe drinking
water for residents as well as hospitals and other facilities
nearby in the event of a disaster which damages the public
drinking water supply.
Drinking water supply system
32
Directors, Corporate Auditors, Executive Officers
(As of June 29, 2010)
Nobuo Yamaguchi
Ichiro Itoh
Taketsugu Fujiwara
Honorary Chairman &
Representative Director
Chairman &
Representative Director
President & Representative Director
Presidential Executive Officer
Tsutomu Inada
Koji Fujiwara
Yuji Mizuno
Masanori Mizunaga
Director
Senior Executive Officer
Director
Senior Executive Officer
Director
Senior Executive Officer
Director
Senior Executive Officer
Yuzo Seto
Outside Director
Yukiharu Kodama
Outside Director
Morio Ikeda
Outside Director
Yuji Tsuchiya
Corporate Auditor
Keiji Kamei
Senior Executive Officer
Yutaka Shibata
Lead Executive Officer
Yasuyuki Yoshida
Executive Officer
Kenji Nakamae
Corporate Auditor
Katsuhiko Yamazoe
Senior Executive Officer
Shinichiro Nei
Lead Executive Officer
Masahito Hirai
Executive Officer
Kazuo Tezuka
Outside Corporate Auditor
Ryo Matsui
Lead Executive Officer
Makoto Konosu
Executive Officer
Haruyuki Yoneda
Executive Officer
Yuji Aoki
Outside Corporate Auditor
Toshikatsu Sunami
Lead Executive Officer
Masaki Sakamoto
Executive Officer
Asahi Kasei Annual Report 2010
33
Financial Section
Contents
34 Consolidated Eleven-Year Summary
36 Management’s Discussion and Analysis
42 Risk Analysis
44 Consolidated Balance Sheets
46 Consolidated Statements of Income
47 Consolidated Statements of Changes in Net Assets
48 Consolidated Statements of Cash Flows
49 Notes to Consolidated Financial Statements
69 Report of Independent Auditors
34
Financial Section
Consolidated Eleven-Year Summary
Asahi Kasei Corporation and consolidated subsidiaries
For the years ended March 31
Net sales
Chemicals
Life & Livinga
Chemical and Chemical-related
Chemicals and Plastics
Homes
Housing and Construction Materials
Health Careb
Fibersb
Electronicsb
Construction Materials
Special Products and Services
Electronics
Membranes and Systems
Biotechnology and Medical Products
Engineering and Othersb
Services, Engineering and Othersb
Domestic sales
Overseas sales
Operating income
Ordinary income
Income (loss) before income taxes
Net income (loss)
Net income (loss) per share, yen
Capital expenditure
Depreciation and amortization
R&D expenditures
Cash dividends per share, yen
As of March 31
Total assets
Inventories
Property, plant and equipment
Investments and other assets
Net worthc
Net worth per share, yen
Net worth/total assets, %
Number of employees
2010
2009d
2008
2007
2006
2005e
2004
2003f
2003
2002
2001g
2001
2000
¥ 1,433,595 ¥ 1,553,108 ¥ 1,696,789 ¥ 1,623,791
¥ 1,498,620 ¥ 1,377,697 ¥ 1,253,534 ¥ 1,193,614 ¥ 1,193,614 ¥ 1,195,393 ¥ 1,269,415 ¥ 1,269,415 ¥ 1,194,462
622,093
689,323
879,235
752,632
660,402
570,182
453,707
424,673
Millions of yen, except where noted
—
—
—
—
—
—
—
—
—
52,558
—
—
389,728
409,882
386,227
405,695
404,539
375,755
361,273
320,553
—
—
—
—
113,207
119,619
111,232
104,474
101,201
116,405
114,072
106,639
142,700
129,655
113,267
112,094
47,024
60,927
55,732
60,818
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
17,642
27,297
37,024
28,881
1,063,186
1,159,143
1,209,452
1,195,751
370,409
393,965
487,337
428,040
—
477,581
440,698
449,470
—
—
430,934
379,677
51,942
59,149
59,813
52,908
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
105,842
103,933
105,965
105,463
105,463
98,686
95,481
89,704
91,518
101,514
110,551
110,551
125,908
134,791
134,791
139,181
—
383,654
408,474
433,440
433,440
412,954
102,859
56,512
93,024
59,908
82,484
60,622
71,579
63,101
71,579
64,062
95,999
—
270,250
262,650
26,821
24,228
28,156
44,786
44,786
57,565
60,234
1,125,454
1,067,893
1,011,366
981,064
981,064
1,006,810
1,086,219
1,086,219
1,044,630
373,166
309,804
242,168
212,550
212,550
188,583
183,196
183,196
149,832
108,726
115,809
104,166
112,876
60,932
53,643
61,555
50,389
61,555
50,389
94,481
59,668
42.46
66,310
69,399
51,467
10.00
91,141
56,454
40.16
68,479
71,531
50,715
8.00
54,820
(100,869)
(100,869)
27,672
(66,791)
(66,791)
19.62
86,387
64,408
48,420
6.00
(47.63)
93,985
60,808
49,311
6.00
(47.63)
93,985
60,808
49,311
6.00
45,664
39,849
10,679
5,180
3.61
74,826
60,676
49,574
6.00
96,024
86,747
50,318
25,177
17.45
69,188
62,222
49,768
6.00
—
—
—
—
—
—
—
96,228
18,307
95,481
60,234
—
96,024
86,747
50,318
25,177
17.45
69,188
62,222
49,768
6.00
—
—
—
—
—
—
—
80,653
17,967
93,460
70,570
—
74,323
85,853
39,615
20,525
14.23
63,213
63,629
50,015
6.00
34,959
127,656
127,801
32,500
120,456
126,507
19,031
105,599
114,883
83,990
126,725
86,166
62,924
10.00
79,436
60,849
10.00
57,622
56,367
46,056
25,286
18.08
50.01
82,911
73,983
56,170
13.00
68,575
49.00
84,413
71,646
52,426
12.00
4,745
69,945
3.39
2010
2009
2008
2007
2006
2005
2004
2003
2003
2002
2001
2001
2000
¥ 1,368,892 ¥ 1,379,337 ¥ 1,425,367 ¥ 1,459,922
¥ 1,376,044 ¥ 1,270,057 ¥ 1,249,206 ¥ 1,212,374 ¥ 1,212,374 ¥ 1,193,011 ¥ 1,240,008 ¥ 1,240,008 ¥ 1,180,372
251,084
273,539
272,372
240,006
447,497
441,271
424,193
426,959
226,331
218,477
234,873
281,502
633,343
603,846
666,244
645,655
452.91
431.77
476.39
461.50
46.3
43.8
46.7
44.2
25,085
24,244
23,854
23,715
214,062
202,521
181,609
176,788
176,788
180,826
196,510
196,510
181,771
414,368
419,969
428,302
427,188
427,188
415,193
419,168
419,168
416,881
284,390
223,958
226,825
198,697
198,697
181,618
176,177
176,177
127,013
594,211
511,726
450,451
407,639
407,639
496,826
516,013
516,013
476,159
424.34
365.43
321.41
290.92
290.92
353.16
357.70
357.70
330.07
43.2
40.3
36.1
33.6
33.6
41.6
41.6
41.6
40.3
23,030
23,820
25,011
25,730
25,730
26,227
26,695
26,695
26,580
a. The Life & Living segment was combined with the Chemicals segment in the year ended March 31, 2008.
b. For continuity, figures for business categories which were renamed are shown on the same line.
• From the year ended March 31, 2004, through the year ended March 31, 2009: Figures shown as Health Care are for the previous Pharma segment, and figures shown as
Electronics are for the previous Electronics Materials & Devices segment.
e. For comparison purposes, results for the year ended March 31, 2005, are recalculated to reflect the April 2005 transfer of Leona™ nylon 66 filament operations from the Fibers
segment to the Chemicals segment.
f. For comparison purposes, results by business category for the year ended March 31, 2003, are recalculated in accordance with the revised categories for the year ended
March 31, 2004, which are aligned with the core operating companies in the holding company configuration adopted on October 1, 2003.
• Through the year ended March 31, 2003: Figures shown as Fibers are those for the previous Fibers and Textiles sector, and figures shown as Services, Engineering and
• The “fabricated home products” segment of the Chemical and Chemical-related sector is separated to an independent Life & Living segment. The remainder of the Chemical
Others are those for the previous Liquors, Services and Others sector.
c. Net assets less minority interest. Though the year ended March 31, 2006, figures for shareholders’ equity shown.
d. For comparison purposes, results for the year ended March 31, 2009, are recalculated to reflect the April 2010 transfer of electronic materials operations from the Chemicals
segment and from Corporate Expenses to the Electronics segment, and the April 2010 transfer of Leona™ nylon 66 filament operations from the Chemicals segment to the
Fibers segment.
and Chemical-related sector is reclassified as the Chemicals segment.
• The Housing and Construction Materials sector is separated into the Homes segment and the Construction Materials segment.
• The Fibers and Textiles sector is renamed the Fibers segment.
• With the divestment of liquors operations, the Liquors, Services and Others sector is renamed the Services, Engineering and Others segment.
g. For comparison purposes, results by business category for the year ended March 31, 2001, are recalculated in accordance with the revised categories for the year ended
March 31, 2002.
• Operations of the “membranes and systems” segment combine with the Chemicals and Plastics sector to form the Chemical and Chemical-related sector.
• The “electronics” segment is reclassified as the Electronics sector.
• Operations of the “biotechnology and medical products” segment are reclassified as the Health Care sector.
• The remaining operations comprise the Liquors, Services and Others sector, in place of the “engineering and others” segment.
2010
2009d
2008
2007
2006
2005e
2004
2003f
2003
2002
2001g
2001
2000
¥ 1,433,595 ¥ 1,553,108 ¥ 1,696,789 ¥ 1,623,791
¥ 1,498,620 ¥ 1,377,697 ¥ 1,253,534 ¥ 1,193,614 ¥ 1,193,614 ¥ 1,195,393 ¥ 1,269,415 ¥ 1,269,415 ¥ 1,194,462
Millions of yen, except where noted
Asahi Kasei Annual Report 2010
35
—
—
—
—
—
—
389,728
409,882
386,227
405,695
404,539
375,755
361,273
320,553
—
—
—
—
—
430,934
379,677
—
—
—
—
—
—
—
—
—
—
—
477,581
440,698
449,470
622,093
689,323
879,235
752,632
660,402
570,182
453,707
424,673
52,558
51,942
59,149
59,813
52,908
—
—
—
—
—
—
For the years ended March 31
Net sales
Chemicals
Life & Livinga
Chemical and Chemical-related
Chemicals and Plastics
Housing and Construction Materials
Homes
Health Careb
Fibersb
Electronicsb
Construction Materials
Special Products and Services
Electronics
Membranes and Systems
Biotechnology and Medical Products
Engineering and Othersb
Services, Engineering and Othersb
Domestic sales
Overseas sales
Operating income
Ordinary income
Income (loss) before income taxes
Net income (loss)
Net income (loss) per share, yen
Capital expenditure
Depreciation and amortization
R&D expenditures
Cash dividends per share, yen
As of March 31
Total assets
Inventories
Property, plant and equipment
Investments and other assets
Net worthc
Net worth per share, yen
Net worth/total assets, %
Number of employees
113,207
119,619
111,232
104,474
101,201
116,405
114,072
106,639
142,700
129,655
113,267
112,094
47,024
60,927
55,732
60,818
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
17,642
27,297
37,024
28,881
1,063,186
1,159,143
1,209,452
1,195,751
370,409
393,965
487,337
428,040
34,959
127,656
127,801
32,500
120,456
126,507
19,031
105,599
114,883
4,745
69,945
83,990
126,725
3.39
79,436
60,849
10.00
50.01
82,911
73,983
56,170
13.00
68,575
49.00
84,413
71,646
52,426
12.00
57,622
56,367
46,056
25,286
18.08
86,166
62,924
10.00
251,084
273,539
272,372
240,006
447,497
441,271
424,193
426,959
226,331
218,477
234,873
281,502
633,343
603,846
666,244
645,655
452.91
431.77
476.39
461.50
46.3
43.8
46.7
44.2
25,085
24,244
23,854
23,715
—
—
—
—
383,654
408,474
433,440
433,440
412,954
105,842
103,933
105,965
105,463
105,463
98,686
95,481
—
—
89,704
91,518
101,514
110,551
110,551
125,908
134,791
134,791
139,181
102,859
56,512
93,024
59,908
82,484
60,622
71,579
63,101
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
71,579
64,062
95,999
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
26,821
24,228
28,156
44,786
44,786
57,565
60,234
—
—
—
—
—
270,250
262,650
96,228
18,307
95,481
60,234
—
80,653
17,967
93,460
70,570
—
1,125,454
1,067,893
1,011,366
981,064
981,064
1,006,810
1,086,219
1,086,219
1,044,630
373,166
309,804
242,168
212,550
212,550
188,583
183,196
183,196
149,832
108,726
115,809
104,166
112,876
60,932
53,643
61,555
50,389
61,555
50,389
94,481
59,668
42.46
66,310
69,399
51,467
10.00
91,141
56,454
40.16
68,479
71,531
50,715
8.00
54,820
(100,869)
(100,869)
27,672
(66,791)
(66,791)
19.62
86,387
64,408
48,420
6.00
(47.63)
93,985
60,808
49,311
6.00
(47.63)
93,985
60,808
49,311
6.00
45,664
39,849
10,679
5,180
3.61
74,826
60,676
49,574
6.00
96,024
86,747
50,318
25,177
17.45
69,188
62,222
49,768
6.00
96,024
86,747
50,318
25,177
17.45
69,188
62,222
49,768
6.00
74,323
85,853
39,615
20,525
14.23
63,213
63,629
50,015
6.00
2010
2009
2008
2007
2006
2005
2004
2003
2003
2002
2001
2001
2000
¥ 1,368,892 ¥ 1,379,337 ¥ 1,425,367 ¥ 1,459,922
¥ 1,376,044 ¥ 1,270,057 ¥ 1,249,206 ¥ 1,212,374 ¥ 1,212,374 ¥ 1,193,011 ¥ 1,240,008 ¥ 1,240,008 ¥ 1,180,372
214,062
202,521
181,609
176,788
176,788
180,826
196,510
196,510
181,771
414,368
419,969
428,302
427,188
427,188
415,193
419,168
419,168
416,881
284,390
223,958
226,825
198,697
198,697
181,618
176,177
176,177
127,013
594,211
511,726
450,451
407,639
407,639
496,826
516,013
516,013
476,159
424.34
365.43
321.41
290.92
290.92
353.16
357.70
357.70
330.07
43.2
40.3
36.1
33.6
33.6
41.6
41.6
41.6
40.3
23,030
23,820
25,011
25,730
25,730
26,227
26,695
26,695
26,580
a. The Life & Living segment was combined with the Chemicals segment in the year ended March 31, 2008.
b. For continuity, figures for business categories which were renamed are shown on the same line.
e. For comparison purposes, results for the year ended March 31, 2005, are recalculated to reflect the April 2005 transfer of Leona™ nylon 66 filament operations from the Fibers
segment to the Chemicals segment.
• From the year ended March 31, 2004, through the year ended March 31, 2009: Figures shown as Health Care are for the previous Pharma segment, and figures shown as
f. For comparison purposes, results by business category for the year ended March 31, 2003, are recalculated in accordance with the revised categories for the year ended
Electronics are for the previous Electronics Materials & Devices segment.
March 31, 2004, which are aligned with the core operating companies in the holding company configuration adopted on October 1, 2003.
• Through the year ended March 31, 2003: Figures shown as Fibers are those for the previous Fibers and Textiles sector, and figures shown as Services, Engineering and
• The “fabricated home products” segment of the Chemical and Chemical-related sector is separated to an independent Life & Living segment. The remainder of the Chemical
Others are those for the previous Liquors, Services and Others sector.
c. Net assets less minority interest. Though the year ended March 31, 2006, figures for shareholders’ equity shown.
d. For comparison purposes, results for the year ended March 31, 2009, are recalculated to reflect the April 2010 transfer of electronic materials operations from the Chemicals
segment and from Corporate Expenses to the Electronics segment, and the April 2010 transfer of Leona™ nylon 66 filament operations from the Chemicals segment to the
Fibers segment.
and Chemical-related sector is reclassified as the Chemicals segment.
• The Housing and Construction Materials sector is separated into the Homes segment and the Construction Materials segment.
• The Fibers and Textiles sector is renamed the Fibers segment.
• With the divestment of liquors operations, the Liquors, Services and Others sector is renamed the Services, Engineering and Others segment.
g. For comparison purposes, results by business category for the year ended March 31, 2001, are recalculated in accordance with the revised categories for the year ended
March 31, 2002.
• Operations of the “membranes and systems” segment combine with the Chemicals and Plastics sector to form the Chemical and Chemical-related sector.
• The “electronics” segment is reclassified as the Electronics sector.
• Operations of the “biotechnology and medical products” segment are reclassified as the Health Care sector.
• The remaining operations comprise the Liquors, Services and Others sector, in place of the “engineering and others” segment.
36
Financial Section
Management’s Discussion and Analysis
Fiscal year 2009 (April 1, 2009 – March 31, 2010)
Overview of Fiscal 2009 Consolidated Results
Operating Environment
The global economy was generally recovering during the year, led
by growth in China and other emerging countries, as an effect of
but increased as a percentage of net sales by 1.2 percentage
points to 19.2% as an effect of the large decline in sales.
Operating income as a percentage of net sales increased by
1.7 percentage points to 4.0%.
economic stimulus packages implemented in response to the
2008 financial crisis. Although corporate earnings improved with
Non-operating Income and Expenses, Ordinary Income
Net non-operating expenses were ¥1.3 billion, ¥1.2 billion
increased exports to Asian countries, the Japanese economy
higher than the ¥2.5 billion of a year earlier, largely due to
remained sluggish as the strong yen, curtailed domestic capital
lower foreign exchange loss and an increase in equity in
expenditure, and weak consumer spending continued.
earnings of affiliates. As a result, ordinary income increased by
Although exports were on a recovery path, the operating
¥23.9 billion (73.4%) to ¥56.4 billion.
environment for the Asahi Kasei Group remained challenging
due to the strong yen and a sluggish recovery of domestic
demand.
Extraordinary Income and Loss
Extraordinary losses of ¥17.2 billion included ¥10.0 billion in
business structure improvement expenses and a ¥2.9 billion
Net Sales, Operating Income
Consolidated net sales for the fiscal year decreased by ¥119.5
loss on disposal of noncurrent assets. Extraordinary income of
¥6.9 billion included a ¥6.5 billion gain as a result of arbitration
billion (7.7%) from a year ago to ¥1,433.6 billion. Overseas sales
award. These combined for a net extraordinary loss of ¥10.3
decreased, largely in Chemicals, by ¥23.6 billion (6.0%) to
billion, ¥3.2 billion lower than a year earlier.
¥370.4 billion, but increased by 0.4 percentage points as a
portion of consolidated net sales from 25.4% to 25.8%.
Domestic sales decreased by ¥96.0 billion (8.3%) to ¥1,063.2
Net Income
With ordinary income of ¥56.4 billion and the net extraordinary
billion with lower market prices as an effect of decreased
loss of ¥10.3 billion, income before income taxes was ¥46.1
feedstock prices in the Chemicals segment and with a decrease
billion. Currently payable income taxes of ¥17.1 billion and
in deliveries of order-built unit homes in the Homes segment.
deferred income tax obligation of ¥3.4 billion combined for an
Operating income increased by ¥22.7 billion (64.8%) to
income tax expense of ¥20.5 billion. Minority interest in
¥57.6 billion. As a percentage of net sales, cost of sales
income of consolidated subsidiaries was ¥0.3 billion. As a
decreased by 2.9 percentage points to 76.8%, largely due to
result, net income increased by ¥20.5 billion (433.0%) to
decreased feedstock prices and improved operating rates
¥25.3 billion, and net income per share increased by ¥14.69
driven by demand recovery. SG&A decreased by ¥5.0 billion,
to ¥18.08 from the ¥3.39 of a year earlier.
Net Sales
(¥ billion)
2,000
1,500
1,000
500
0
Operating Income,
Operating Margin
(¥ billion)
150
120
90
60
30
0
SG&A, SG&A Ratio
(%)
15
(¥ billion)
300
12
240
9
6
3
0
180
120
60
0
(%)
20
16
12
8
4
0
Net Income,
Net Income per Share
(¥ billion)
80
60
40
20
0
(¥)
60
45
30
15
0
FY
07
08
09
FY
07
08
09
FY
07
08
09
FY
07
08
09
Operating income, left scale
SG&A, left scale
Net income, left scale
Operating margin, right scale
SG&A ratio, right scale
Net income per share, right scale
Asahi Kasei Annual Report 2010
37
Results by Segment
in the Chemicals and Fibers segments have been revised to
reflect this transfer.
Operating Segments
Consolidated sales and operating income by segment are
shown below. Six operating segments correspond to the main
Chemicals
Sales decreased by ¥67.2 billion (9.8%) from a year ago to
fields of business, and the Services, Engineering and Others
¥622.1 billion and operating income increased by ¥32.6 billion
segment comprises the remainder of operations. The following
to ¥26.1 billion.
segment names have been revised beginning with the first
Although market prices remained low during the first half of
quarter of fiscal 2009 for greater clarity and correspondence
the fiscal year, operating income from chemicals and derivative
with the fields of businesses under operation.
products increased with high overseas market prices for
Previously
Changed to
acrylonitrile (AN) and adipic acid as an effect of recovering
demand in China and other Asian markets in the second half of
Electronics segment
the fiscal year and with a decrease in inventory valuation loss.
Electronics Materials &
Devices segment
Pharma segment
Health Care segment
The electronic materials operations of Asahi Kasei Corp.,
Operating income from polymer products was flat, as low market
prices due to decreased feedstock prices were offset by an
increase in shipment volumes reflecting a recovery of demand in
automotive and electronics applications in the second half of the
Asahi Kasei Chemicals, and Asahi Kasei EMD (renamed Asahi
fiscal year together with a decrease in inventory valuation loss.
Kasei Microdevices on April 1, 2009) were transferred to Asahi
Although recovery in water-treatment related business was
Kasei E-materials on April 1, 2009. In consideration of the
sluggish and ion-exchange membrane related business was
similarity of product types and characteristics to those of
impacted by the strong yen, operating income from specialty
electronics operations, the operations of Asahi Kasei E-
products increased with strong performance both in home-use
materials are reported in the Electronics segment. For
products such as Saran Wrap™ and in coating materials and
comparison purposes, results for the previous year have been
with steady performance in functional additives.
revised to reflect the transfer of the corresponding operations
from the Chemicals segment and Corporate Expenses to the
Electronics segment.
Homes
Sales decreased by ¥20.2 billion (4.9%) from a year ago to
The Leona™ nylon 66 filament business of Asahi Kasei
¥389.7 billion and operating income increased by ¥3.5 billion
Chemicals was transferred to Asahi Kasei Fibers on April 1,
(15.9%) to ¥25.3 billion.
2009. For comparison purposes, results for the previous year
Operating income from order-built and pre-built homes
ROE
(%)
12
9
6
3
0
FY
07
08
09
Chemicals
Homes
(¥ billion)
1,000
800
600
400
200
0
(200)
FY
(¥ billion)
(¥ billion)
(¥ billion)
100
500
80
60
40
20
0
(20)
400
300
200
100
0
FY
30
24
18
12
6
0
6.5%
5.3%
08
09
4.2%
(0.9)%
08
09
Net sales, left scale
Net sales, left scale
Operating income (loss), right scale
Operating income, right scale
Operating margin (%)
Operating margin (%)
38
Financial Section
increased with cost reductions and other measures to
profitability decreased by ¥1.3 billion.
heighten operating efficiency offsetting a substantial decline in
Overseas shipment volumes of Roica™ elastic
deliveries of order-built Hebel Haus™ unit homes. Orders for
polyurethane filament grew, but operating income decreased
order-built homes received during the year increased to
due to the significant impact of low market prices and the strong
¥306.9 billion, up by ¥15.8 billion from a year ago, reflecting a
yen. Exports of Bemberg™ regenerated cellulose were steady
recovery in orders during the second half of the fiscal year.
overall, but operating income decreased mainly due to the strong
Despite steady performance in remodeling and real
yen. Operating income in nonwovens operations increased with
estate operations, operating income in housing-related
growth in shipments of Lamous™ artificial suede for car seats
operations decreased with slack performance in financing
and the effect of operating cost reductions, although shipments
operations.
Health Care
Sales decreased by ¥6.4 billion (5.4%) from a year ago to
¥113.2 billion and operating income decreased by ¥8.0 billion
(66.8%) to ¥4.0 billion.
of spunbond decreased. Despite lower shipment volumes of
Leona™ nylon 66 filament, operating income increased with
declining feedstock prices and cost reductions.
Electronics
Sales increased by ¥13.0 billion (10.1%) from a year ago to ¥142.7
Although increased shipments of the Flivas™ agent for
billion and operating income decreased slightly to ¥7.2 billion.
treatment of benign prostatic hyperplasia and the Elcitonin™
Operating income from electronic devices increased with
calcitonin formulation contributed to sales growth in
substantial growth in shipments of LSIs in new applications
pharmaceuticals operations, operating income decreased due
outweighing a sharp impact of the strong yen. Shipments of
to a decline in licensing income.
electronic materials recovered, particularly for Hipore™ Li-ion
Shipment volumes of APS™ polysulfone-membrane
battery (LiB) separator, but operating income decreased with
artificial kidneys and Sepacell™ leukocyte reduction filters
the impact of falling market prices.
grew mainly in export, but operating income in device-related
operations decreased with a significant impact of the strong
yen on each product family and with the effect of greater
capital depreciation.
Construction Materials
Sales decreased by ¥13.9 billion (22.8%) from a year ago to
¥47.0 billion and operating income decreased by ¥0.5 billion
(28.6%) to ¥1.2 billion.
Fibers
Sales decreased by ¥15.2 billion (13.1%) from a year ago to
A decline in new construction starts resulted in lower
shipments of Hebel™ autoclaved aerated concrete (AAC)
¥101.2 billion and an operating loss of ¥2.8 billion resulted as
panels and the BasePack™ earthquake-resistant column
Health Care
Fibers
Electronics
(¥ billion)
(¥ billion)
(¥ billion)
(¥ billion)
(¥ billion)
(¥ billion)
150
120
90
60
30
10.1%
3.5%
0
FY
08
09
15
12
9
6
3
0
160
120
80
40
0
(60)
FY
80
60
40
20
0
(1.3)%
(2.7)%
(30)
08
09
150
120
90
60
30
0
FY
30
24
18
12
6
0
5.6%
5.1%
08
09
Net sales, left scale
Net sales, left scale
Net sales, left scale
Operating income, right scale
Operating income (loss), right scale
Operating income, right scale
Operating margin (%)
Operating margin (%)
Operating margin (%)
Asahi Kasei Annual Report 2010
39
base attachment system, and operating income in building
¥660.4 billion, mainly due to a ¥22.5 billion decrease in
materials and housing materials operations decreased slightly.
inventories (merchandise and finished goods, work in process,
Operating income in foundation systems operations
raw materials and supplies) and a ¥31.6 billion decrease in
decreased with lower shipment volumes of Eazet™ piling
other, although notes and accounts receivable, trade,
systems for small-scale construction and the DynaWing™
increased by ¥30.1 billion primarily due to a year-on-year
pre-cast concrete piling system featuring minimal soil disposal
increase in fourth quarter net sales.
and high load-bearing capacity.
Although deferred tax assets decreased by ¥13.5 billion,
Although insulation materials operations were also
noncurrent assets increased by ¥11.4 billion (1.6%) to ¥708.5
affected by the decline in new construction starts, cost
billion, with property, plant and equipment increasing by ¥6.2
reductions enabled an increase in operating income.
billion largely due to an increase in newly consolidated
Services, Engineering and Others
Sales decreased by ¥9.7 billion (35.4%) from a year ago to
subsidiaries, and investment securities increasing by ¥18.0
billion mainly due to increased fair value.
Current liabilities decreased by ¥53.1 billion (10.9%) to
¥17.6 billion and operating income decreased by ¥3.8 billion
¥434.8 billion, with a ¥36.0 billion decrease in commercial paper
(67.6%) to ¥1.8 billion.
and a ¥20.0 billion decrease in the current portion of bonds.
Operating income in engineering operations decreased
Although long-term loans payable decreased by ¥10.6
as a curtailment of capital investments led to a decline in
billion, noncurrent liabilities increased by ¥9.3 billion (3.3%) to
orders received.
Geographical Information
Geographic segment information is not shown because over
¥289.4 billion largely due to a ¥20.0 billion bond issue.
Interest-bearing debt decreased by ¥51.0 billion to
¥264.6 billion.
Net assets increased by ¥33.3 billion (5.5%) from ¥611.4
90% of total sales were from operations domiciled in Japan
billion to ¥644.7 billion despite ¥11.2 billion in dividend
and over 90% of total assets were located in Japan.
payments, with net income of ¥25.3 billion, a ¥13.4 billion
Liquidity and Capital Resources
Financial position
Total assets at fiscal year end were ¥1,368.9 billion, ¥10.4
increase in valuation difference on available-for-sale securities,
and a ¥3.8 billion increase in minority interests due to an
increase in newly consolidated subsidiaries. As a result, net
worth per share increased by ¥21.14 to ¥452.91. Net worth/
total assets increased from 43.8% to 46.3%, and debt-to-
billion (0.8%) lower than a year earlier.
equity ratio decreased by 0.10 to 0.42.
Current assets decreased by ¥21.8 billion (3.2%) to
Construction Materials
Services, Engineering and
Others
(¥ billion)
(¥ billion)
(¥ billion)
(¥ billion)
90
60
30
2.8%
2.6%
0
FY
08
09
6
4
2
0
40
30
20
10
20.6%
10.3%
0
FY
08
09
8
6
4
2
0
Net sales, left scale
Net sales, left scale
Operating income, right scale
Operating income, right scale
Operating margin (%)
Operating margin (%)
40
Financial Section
Capital Expenditure
Capital expenditure (capex) was primarily for new and
expanded production plant and equipment in long-term
Chemicals
growth fields. Investments were also made for rationalization,
Homes
modification, maintenance, and IT systems to bring greater
product reliability and cost reductions.
Capex by operating segment shown below is for
property, plant and equipment and intangible assets,
combined, before consumption tax.
The electronic materials operations of Asahi Kasei Corp.,
Health Care
Fibers
Electronics
Construction Materials
Services, Engineering and Others
Asahi Kasei Chemicals, and Asahi Kasei EMD (renamed Asahi
Kasei Microdevices on April 1, 2009) were transferred to Asahi
Combined
Totals for the year
(¥ million)
Compared to
previous year (%)
27,649
6,009
9,173
4,556
22,761
1,191
927
72,266
76.1
85.4
29.1
36.7
71.6
49.0
85.7
58.9
288.9
66.3
Kasei E-materials on April 1, 2009. In consideration of the
Corporate assets and eliminations
11,724
similarity of product types and characteristics to those of
Consolidated
83,990
electronics operations, the operations of Asahi Kasei E-
materials are reported in the Electronics segment. For
Notable capex by operating segment was as follows.
comparison purposes, results for the previous year have been
revised to reflect the transfer of the corresponding operations
from the Chemicals segment and corporate assets to the
Electronics segment.
Chemicals
Energy conservation equipment in Mizushima; capacity
expansion for ion-exchange membranes for chlor-alkali
The Leona™ nylon 66 filament business of Asahi Kasei
electrolysis; plant modification, rationalization, and
Chemicals was transferred to Asahi Kasei Fibers on April 1,
maintenance.
2009. For comparison purposes, results for the previous year
in the Chemicals and Fibers segments have been revised to
reflect this transfer.
Homes
Leases; construction system modification, rationalization, and
A total of ¥84.0 billion was invested during the fiscal year
maintenance.
for the expansion of businesses with competitive superiority,
particularly in the Chemicals, Electronics, and Health Care
segments, as well as for modification and rationalization.
Total Assets, Net Worth
Net Worth to Total Assets
Interest-Bearing Debt,
D/E Ratio
Capex, Depreciation
and Amortization
(¥ billion)
1,500
1,200
900
600
300
0
(%)
50
40
30
20
10
0
(¥ billion)
400
300
200
100
0
(¥ billion)
1.00
150
0.75
0.50
0.25
0.00
120
90
60
30
0
FY
07
08
09
FY
07
08
09
FY
07
08
09
FY
07
08
09
Total assets
Net worth
Interest-bearing debt, left scale
Capex
D/E ratio, right scale
Depreciation and amortization
Asahi Kasei Annual Report 2010
41
Health Care
Capacity expansion for polysulfone hollow-fiber membrane for
cash used, principally due to redemption of commercial paper.
As a result, cash and cash equivalents at fiscal year end were
APS™ artificial kidneys, Planova™ virus removal filters, and
¥93.1 billion, ¥5.0 billion less than a year earlier.
Sepacell™ leukocyte reduction filters; plant modification,
rationalization, and maintenance.
Fibers
Capacity expansion in Thailand for Roica™ elastic polyurethane
Cash Flows from Operating Activities
Cash used included ¥25.1 billion of increase in notes and
accounts receivable, trade, as an effect of a recovery of
business, largely in Chemicals and Electronics. Income before
filament; plant modification, rationalization, and maintenance.
income taxes generated ¥46.1 billion, depreciation and
amortization generated ¥86.2 billion, and decrease in
Electronics
Capacity expansion for Hipore™ LiB separator and LSIs; plant
inventories generated ¥34.0 billion largely in Chemicals. Net
cash generated from operating activities was ¥169.3 billion,
modification, rationalization, and maintenance.
¥100.5 billion more than a year earlier.
Construction Materials
Plant modification, rationalization, and maintenance.
Services, Engineering and Others
Rationalization, labor-saving, and maintenance.
Corporate Assets
Construction of a new integrated research complex, R&D
equipment, IT systems, maintenance.
Cash Flows from Investing Activities
Cash used included ¥84.5 billion for purchase of property,
plant and equipment for continuing expansion of competitively
superior operations and enhancement of overall competitiveness,
¥6.9 billion for purchase of intangible assets, and ¥11.3 billion for
purchase of investment securities. Net cash used in investing
activities was ¥100.2 billion, ¥35.5 billion less than a year earlier.
Cash Flows from Financing Activities
In addition to ¥63.4 billion of net cash used to reduce interest-
Cash Flows
Free cash flows* were a positive ¥69.1 billion, as cash
bearing debt, including bonds and loans, ¥11.2 billion was
used for dividend payments. Net cash used in financing
generated, principally from operating income and depreciation
activities was ¥75.1 billion, ¥162.4 more than a year earlier.
and amortization, exceeded cash used, principally for
acquisition of noncurrent assets and investment securities.
* Total of net cash provided by (used in) operating activities
Cash flows from financing activities were a net ¥75.1 billion
and net cash provided by (used in) investment activities.
Free Cash Flows
Cash Flows
(¥ billion)
(¥ billion)
80
60
40
20
0
(20)
(40)
(60)
(80)
200
100
0
(100)
(200)
FY
07
08
09
FY
07
08
09
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
42
Financial Section
Risk Analysis
Operating risks and non-operating risks which may materially influence investor decisions are described below.
The management maintains awareness of the possibility that these scenarios may emerge and, to the fullest
possible extent, implements measures to avoid their emergence and to minimize their impact on corporate
performance in the event that they do emerge.
The description of risks given here includes elements which may emerge in the future, but as it is based on
current evaluations at the time of preparation of this report, it does not include risks which could not be foreseen.
Crude oil and naphtha prices
Housing-related tax policy, interest rate fluctuation
Operating costs in operations based on petrochemicals
Operations in the Homes segment are affected by
are affected by prices for crude oil and naphtha. If crude oil
Japanese tax policies as they relate to home acquisition
and naphtha prices rise, selling prices for products derived
and by fluctuations in Japanese interest rates. Changes in
from these feedstocks must be increased in a timely
Japanese tax policy, including consumption taxes, or
manner to maintain sufficient price spreads. Price spreads
fluctuations in Japanese interest rates may result in
may diminish, thereby affecting our consolidated
diminished housing demand, thereby affecting our
performance and financial condition.
consolidated performance and financial condition.
Exchange rate fluctuation
Profitability of electronics-related businesses
Operations based overseas maintain accounts in the local
The electronics industry is characterized by sharp market
currency where they operate. The yen value of items
cycles. The profitability of electronics-related businesses
carried in these accounts is affected by the rate of
may decline significantly in a relatively short time, thereby
exchange at the time of conversion to yen. Although
affecting our consolidated performance and financial
measures such as currency exchange hedges are utilized
condition. Because products in this field rapidly become
to minimize the short-term effects of exchange rate
obsolete, the timely development and commercialization of
fluctuations, such fluctuations may exceed the foreseeable
leading-edge devices and materials is required. New
range over the short to long term, thereby affecting our
product development may be delayed, or demand
consolidated performance and financial condition.
fluctuations may exceed expectations, thereby affecting
our consolidated performance and financial condition.
Overseas operations
Pharmaceuticals and medical devices
Overseas operations may face a variety of risks which
cannot be foreseen, including the existence or emergence
Pharmaceutical and medical device businesses may be
of economically unfavorable circumstances due to legal
significantly affected by government measures to curtail
and regulatory changes, vulnerability of infrastructure,
health care expenditure or other changes in government
difficulty in hiring/retaining qualified employees, or other
policy. Unforeseeable side effects or complications may
factors, and social or political instability due to terrorism,
emerge, significantly affecting these businesses. The
war, or other factors. Overseas operations may be
pharmaceutical business additionally faces the possibility
impaired by such scenarios, thereby affecting our
that product approval may be withdrawn as a result of
consolidated performance and business plans.
Japan’s reexamination system, and that competition may
Asahi Kasei Annual Report 2010
43
intensify as a result of the market entry of generics. For
pharmaceuticals and medical devices under development,
regulatory approval may fail to be obtained, market
demand may be lower than expected, and the national
reimbursement prices may be lower than expected. Such
scenarios may affect our consolidated performance and
financial condition.
Industrial accidents and natural disasters
The occurrence of a significant industrial accident or
natural disaster at a plant or elsewhere may result in a loss
of public trust, the emergence of costs associated with
accident response, including compensation, and the
emergence of costs associated with plant shutdown,
including opportunity loss and compensation to
customers, thereby affecting our consolidated performance
and financial condition.
Intellectual property, product liability, and legal
regulation
An unfavorable ruling may emerge in a dispute relating to
intellectual property, a product defect resulting in a large-
scale recall and compensation whose costs exceed
insurance coverage may emerge, and detrimental legal
and regulatory changes may emerge in any country where
we operate. Such scenarios may affect our consolidated
performance and financial condition.
Irrecoverable credits
Credits extended to customers may become irrecoverable
to an unforeseeable extent, necessitating additional losses
or allowances to be recorded in financial accounts, and
thereby affecting our consolidated performance and
financial condition.
44
Financial Section
Consolidated Balance Sheets
Asahi Kasei Corporation and consolidated subsidiaries
March 31, 2010 and 2009
ASSETS
Current assets:
Millions of yen
Thousands of
U.S. dollars (Note 1)
2010
2009
2010
Cash and deposits (Note 8 and 10)
¥
93,928
¥
97,969
$ 1,009,984
Notes and accounts receivable, trade (Notes 10)
238,931
208,868
2,569,150
Short-term investment securities (Notes 8, 10 and 11)
985
406
10,591
Merchandise and finished goods
Work in progress
Raw materials and supplies
Deferred tax assets (Note 14)
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets:
Property, plant and equipment
Buildings and structures (Note 5 (b), (d))
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles (Note 5 (b), (d))
Accumulated depreciation
Machinery, equipment and vehicles, net
Land (Note 5 (d))
Lease assets (Note 9)
Accumulated depreciation
Lease assets, net
Construction in progress
Other (Note 5 (b), (d))
Accumulated depreciation
Other, net
Subtotal
Intangible assets—
Goodwill
Other
Subtotal
124,557
138,098
1,339,318
75,044
51,484
23,106
54,027
(1,654)
82,832
52,609
18,444
85,626
(2,648)
806,924
553,587
248,448
580,940
(17,782)
660,408
682,205
7,101,159
404,974
(224,608)
180,366
1,169,979
(1,005,094)
164,885
55,031
5,808
(1,132)
4,676
27,380
381,725
(217,710)
164,014
1,138,427
(977,646)
160,781
53,740
2,540
(227)
2,313
44,140
4,354,559
(2,415,135)
1,939,424
12,580,424
(10,807,467)
1,772,957
591,735
62,449
(12,168)
50,282
294,411
115,024
109,437
(99,867)
15,158
(93,155)
16,282
1,236,822
(1,073,835)
162,987
447,497
441,271
4,811,796
5,927
28,729
34,656
7,449
29,935
37,384
63,729
308,917
372,646
Investments and other assets—
Investment securities (Notes 5 (a), 10 and 11)
175,059
157,091
1,882,359
Long-term receivables (Note 10)
Deferred tax assets (Note 14)
Other
Allowance for doubtful accounts
Subtotal
6,074
15,383
29,962
(147)
2,670
28,874
29,993
(151)
65,314
165,406
322,172
(1,579)
226,331
218,477
2,433,671
Total noncurrent assets
708,485
697,132
7,618,114
Total assets
¥ 1,368,892
¥ 1,379,337
$ 14,719,273
The accompanying notes are an integral part of these statements.
Asahi Kasei Annual Report 2010
45
Millions of yen
Thousands of
U.S. dollars (Note 1)
2010
2009
2010
LIABILITIES AND NET ASSETS
Liabilities:
Current liabilities—
Notes and accounts payable, trade (Note 10)
¥ 121,409
¥ 113,378
$ 1,305,472
Short-term loans payable (Notes 5 (b), 10 and 18)
Commercial paper (Notes 10 and 18)
Current portion of bonds (Notes 10 and 18)
Lease obligations (Notes 9, 10 and 18)
Income taxes payable (Note 10)
Accrued expenses
Advances received
Provision for repairs
Provision for product warranties
Other
Total current liabilities
Noncurrent liabilities—
93,962
19,000
—
1,123
12,160
91,371
37,815
8,191
3,607
46,189
100,786
1,010,348
55,000
20,000
489
4,097
86,947
40,203
1,674
9,396
55,951
204,301
—
12,080
130,752
982,487
406,610
88,072
38,783
496,652
434,827
487,921
4,675,556
Bonds payable (Note 10 and 18)
25,000
5,000
268,817
Long-term loans payable (Notes 5 (b), 10 and 18)
121,921
132,474
1,310,982
Lease obligations (Notes 9, 10 and 18)
Deferred tax liabilities (Note 14)
3,593
7,597
1,845
4,257
38,631
81,692
Provision for retirement benefits (Notes 3 (a) and 13)
109,450
109,864
1,176,880
Provision for directors’ retirement benefits
Provision for repairs
Long-term guarantee deposited (Note 10)
Other
Total noncurrent liabilities
Total liabilities
Net assets:
Shareholders’ equity:
Capital stock—
Authorized—4,000,000,000 shares
1,225
169
18,321
2,101
1,046
4,499
19,149
1,931
13,171
1,818
197,005
22,590
289,378
724,204
280,065
767,986
3,111,586
7,787,142
Issued and outstanding—1,402,616,332 shares
103,389
103,389
1,111,705
Capital surplus
Retained earnings (Note 7 (b) ii))
Treasury stock—
(2010—4,228,468 shares, 2009—4,070,731 shares)
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total valuation and translation adjustments
Minority interest
Total net assets
Commitments and contingent liabilities (Notes 5 (c) and 9)
79,403
79,404
853,791
432,114
418,292
4,646,382
(2,017)
(1,946)
(21,684)
612,888
599,139
6,590,193
36,692
(109)
(16,128)
20,455
11,346
23,301
(178)
(18,416)
4,708
7,504
394,540
(1,175)
(173,423)
219,941
121,997
644,688
611,351
6,932,131
Total liabilities and net assets
¥ 1,368,892
¥ 1,379,337
$ 14,719,273
The accompanying notes are an integral part of these statements.
46
Financial Section
Consolidated Statements of Income
Asahi Kasei Corporation and consolidated subsidiaries
Years ended March 31, 2010 and 2009
Net sales (Note 16)
Cost of sales (Note 6 (a), (b))
Gross profit
Selling, general and administrative expenses (Note 6 (a))
Operating income (Note 16)
Non-operating income:
Interest income
Dividends income
Equity in earnings of affiliates
Insurance income
Other
Total non-operating income
Non-operating expenses:
Interest expense
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income:
Gain on sales of investment securities
Gain on sales of noncurrent assets (Note 6 (c))
Gain on change in equity
Gain as a result of arbitration award (Note 4)
Total extraordinary income
Extraordinary loss:
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on disposal of noncurrent assets (Note 6 (d))
Impairment loss (Notes 6 (e) and 16)
Environmental expenses (Note 6 (f))
Business structure improvement expenses (Notes 6 (g) and 16)
Total extraordinary loss
Income before income taxes
Income taxes (Note 14)—current
—deferred
Total income taxes
Minority interest in income
Net income
The accompanying notes are an integral part of these statements.
Millions of yen
Thousands of
U.S. dollars (Note 1)
2010
2009
2010
¥ 1,433,595
¥ 1,553,108
$ 15,414,999
1,100,688
332,907
275,285
57,622
1,237,815
315,293
280,333
34,959
11,835,352
3,579,647
2,960,057
619,590
1,071
2,276
1,151
—
3,394
7,891
3,714
702
4,730
9,146
56,367
112
152
153
6,502
6,919
—
1,918
2,944
836
1,482
10,050
17,230
46,056
17,107
3,377
20,483
286
1,021
2,594
831
1,131
2,963
8,540
4,284
1,359
5,356
10,999
32,500
17
524
—
—
540
70
721
5,943
343
1,932
5,001
14,009
19,031
8,521
5,174
13,695
592
11,516
24,470
12,371
—
36,494
84,851
39,938
7,544
50,861
98,343
606,098
1,203
1,634
1,646
69,916
74,399
—
20,626
31,657
8,994
15,934
108,062
185,273
495,224
183,941
36,307
220,249
3,078
¥
25,286
¥
4,745
$
271,897
Asahi Kasei Annual Report 2010
47
Consolidated Statements of Changes in Net Assets
Asahi Kasei Corporation and consolidated subsidiaries
Years ended March 31, 2010 and 2009
Shareholders’ equity
Valuation, translation adjustments
Millions of yen
Capital
stock
Capital
surplus
Retained
earnings
(Note 7 (b))
Treasury
stock
Total
shareholders’
equity
Valuation
difference on
available-for-
sale securities
Deferred
gains or
losses on
hedges
Foreign
currency
translation
adjustment
Total
valuation,
translation
adjustments
Minority
interest
Total
net assets
Balance at March 31, 2009
¥ 103,389 ¥ 79,404 ¥ 418,292 ¥ (1,946) ¥ 599,139 ¥ 23,301 ¥ (178) ¥ (18,416) ¥ 4,708 ¥ 7,504 ¥ 611,351
Changes during the fiscal year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of
equity method
Net changes of items
other than shareholders’
equity
Total changes of items
during the period
(1)
(11,188)
25,286
(10)
(267)
(96)
25
(11,188)
25,286
(96)
24
(10)
(267)
(11,188)
25,286
(96)
24
(10)
(267)
—
(1)
13,821
(71)
13,749
13,391
68
2,287
15,747
3,841
33,338
13,391
68
2,287
15,747
3,841
19,588
Balance at March 31, 2010
¥ 103,389 ¥ 79,403 ¥ 432,114 ¥ (2,017) ¥ 612,888 ¥ 36,692 ¥ (109) ¥ (16,128) ¥ 20,455 ¥ 11,346 ¥ 644,688
Shareholders’ equity
Valuation, translation adjustments
Millions of yen
Capital
stock
Capital
surplus
Retained
earnings
(Note 7 (b))
Treasury
stock
Total
shareholders’
equity
Valuation
difference on
available-for-
sale securities
Deferred
gains or
losses on
hedges
Revaluation
surplus
Foreign
currency
translation
adjustment
Total
valuation,
translation
adjustments
Minority
interest
Total
net assets
Balance at March 31, 2008 ¥ 103,389 ¥ 79,427 ¥ 432,246 ¥ (2,019) ¥ 613,042 ¥ 51,091 ¥ 11 ¥ 873 ¥ 1,226 ¥ 53,201 ¥ 7,912 ¥ 674,156
Reversal of revaluation
reserve due to unification
of accounting standards
at overseas subsidiaries
Changes during the fiscal year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Change of scope of
equity method
Net changes of items
other than shareholders’
equity
Total changes of items
during the period
873
873
(873)
(873)
—
(19,581)
4,745
(23)
(241)
314
10
(19,581)
4,745
(241)
291
10
(19,581)
4,745
(241)
291
10
—
(23)
(14,826)
73
(14,777)
(27,790)
(189)
—
(19,642)
(47,621)
(408)
(62,805)
(27,790)
(189)
—
(19,642)
(47,621)
(408)
(48,029)
Balance at March 31, 2009 ¥ 103,389 ¥ 79,404 ¥ 418,292 ¥ (1,946) ¥ 599,139 ¥ 23,301 ¥ (178) ¥ — ¥ (18,416) ¥ 4,708 ¥ 7,504 ¥ 611,351
Shareholders’ equity
Valuation, translation adjustments
Thousands of U.S. dollars (Note 1)
Capital
stock
Capital
surplus
Retained
earnings
(Note 7 (b))
Treasury
stock
Total
shareholders’
equity
Valuation
difference on
available-for-
sale securities
Deferred
gains or
losses on
hedges
Foreign
currency
translation
adjustment
Total
valuation,
translation
adjustments
Minority
interest
Total
net assets
Balance at March 31, 2009
$ 1,111,705 $ 853,805 $ 4,497,765 $ (20,925) $ 6,442,350 $ 250,550 $ (1,910) $ (198,019) $ 50,620 $ 80,692 $ 6,573,662
Changes during the fiscal year
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of
equity method
Net changes of items
other than shareholders’
equity
Total changes of items
during the period
(120,300)
271,897
(120,300)
271,897
(1,031)
(1,031)
(14)
272
(105)
(2,875)
258
(105)
(2,875)
(120,300)
271,897
(1,031)
258
(105)
(2,875)
—
(14)
148,616
(759)
147,843
143,990
735
24,596
169,321 41,305
358,469
143,990
735
24,596
169,321 41,305
210,626
Balance at March 31, 2010
$ 1,111,705 $ 853,791 $ 4,646,382 $ (21,684) $ 6,590,193 $ 394,540 $ (1,175) $ (173,423) $ 219,941 $ 121,997 $ 6,932,131
The accompanying notes are an integral part of these statements.
48
Financial Section
Consolidated Statements of Cash Flows
Asahi Kasei Corporation and consolidated subsidiaries
Years ended March 31, 2010 and 2009
Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in provision for repairs
Increase (decrease) in provision for product warranties
Decrease in provision for retirement benefits
Interest and dividend income
Interest expense
Equity in earnings of affiliates
Loss (gain) on sales of investment securities
Loss on valuation of investment securities
Gain on sale of property, plant and equipment
Loss on disposal of noncurrent assets
Gain as a result of arbitration award
Decrease (increase) in notes and accounts receivable, trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable, trade
Increase (decrease) in accrued expenses
Decrease in advances received
Other, net
Subtotal
Interest and dividend income, received
Interest expense, paid
Proceeds from arbitration award
Income taxes, paid
Income taxes refunded
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from purchase of investments in subsidiaries resulting in change
in scope of consolidation
Payments of loans receivable
Collection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from issuance of commercial paper
Redemption of commercial paper
Proceeds from long-term loans payable
Decrease in long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Repayment of lease obligations
Purchase of treasury stock
Proceeds from disposal of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from change of
scope of consolidation
Cash and cash equivalents at end of year (Note 8)
The accompanying notes are an integral part of these statements.
Millions of yen
Thousands of
U.S. dollars (Note 1)
2010
2009
2010
¥ 46,056
86,166
836
1,089
(190)
2,187
(5,790)
(1,284)
(3,347)
3,714
(1,151)
(112)
1,918
(152)
2,944
(6,502)
(25,106)
33,994
1,603
2,555
(2,476)
20,048
157,003
4,418
(3,758)
6,502
—
5,143
169,308
(84,482)
675
(6,876)
(11,291)
5,272
914
(12,623)
11,665
(3,438)
(100,185)
7,744
(9,956)
59,000
(95,000)
5,633
(29,863)
20,000
(20,000)
(908)
(99)
24
(11,188)
(342)
(115)
(75,071)
620
(5,327)
98,092
¥ 19,031
79,436
343
619
(90)
(621)
3,380
(6,011)
(3,615)
4,284
(831)
53
721
(524)
5,943
—
83,714
(6,737)
(37,272)
(21,530)
(9,498)
(18,728)
92,068
5,925
(4,185)
—
(24,996)
68,812
(97,214)
1,948
(22,016)
(17,518)
516
—
(6,374)
5,791
(839)
(135,707)
81,230
(34,439)
135,000
(135,000)
97,131
(11,947)
—
(25,000)
(206)
(249)
147
(19,581)
(352)
581
87,314
(5,360)
15,059
83,033
$ 495,224
926,517
8,994
11,713
(2,047)
23,521
(62,255)
(13,806)
(35,986)
39,938
(12,371)
(1,203)
20,626
(1,634)
31,657
(69,916)
(269,952)
365,522
17,234
27,477
(26,626)
215,574
1,688,202
47,505
(40,408)
69,916
—
55,302
1,820,518
(908,409)
7,257
(73,936)
(121,409)
56,688
9,827
(135,728)
125,427
(36,973)
(1,077,257)
83,271
(107,059)
634,409
(1,021,505)
60,566
(321,112)
215,054
(215,054)
(9,762)
(1,069)
258
(120,300)
(3,678)
(1,234)
(807,214)
6,669
(57,284)
1,054,752
360
¥ 93,125
—
¥ 98,092
3,876
$ 1,001,345
Asahi Kasei Annual Report 2010
49
Notes to Consolidated Financial Statements
Asahi Kasei Corporation and consolidated subsidiaries
1. Major policies for preparing the consolidated financial statements:
The consolidated financial statements, which are filed with the
prime minister of Japan as required by the Financial Instruments
and Exchange Act in Japan, are prepared in accordance with
accounting principles generally accepted in Japan, which are
different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards. The
accompanying consolidated financial statements are a translation
of those filed with the prime minister of Japan and incorporate
certain modifications to enhance foreign readers’ understanding of
the financial statements. In addition, the notes to the consolidated
financial statements include certain financial information which is
not required under the disclosure regulations in Japan, but is
presented herein as additional information. In addition, certain
reclassifications of previously reported amounts have been made to
conform to current classifications. Such modifications or
reclassifications have no effect on net income or retained earnings.
The U.S. dollar amounts presented in the financial statements
are included solely for the convenience of readers. These
translations should not be construed as representations that the
Japanese yen amounts actually represent, or have been or could
be converted into U.S. dollars. As the amounts shown in U.S.
dollars are for convenience only, and are not intended to be
computed in accordance with generally accepted translation
procedures, the approximate current exchange rate of ¥93=US$1
prevailing on March 31, 2010, has been used.
Consolidation and investments in affiliated companies—
The consolidated financial statements consist of the accounts of
the parent company and 98 subsidiaries (103 subsidiaries at March
31, 2009, hereinafter collectively referred to as the “Company”)
which, with minor exceptions due to materiality, are all majority and
wholly owned companies, including 9 core operating companies
(Asahi Kasei Chemicals Corp., Asahi Kasei Homes Corp., Asahi
2. Significant accounting policies:
(a) Cash and cash equivalents
For cash flow statement purposes, cash and cash equivalents
include all highly liquid investments, generally with original maturities
of three months or less, which are readily convertible to known
amounts of cash and are so near maturity that they present an
insignificant risk of changes in value due to changes in interest rates.
(b) Inventories
Inventories held for sale in the ordinary course of business are
stated at the lower of cost or net sales value. Residential lots and
dwellings for sale are stated at specifically identified costs.
(c) Noncurrent assets and depreciation/amortization
Property, plant and equipment (except lease assets) are stated at cost.
Significant renewals and improvements are capitalized at cost, while
maintenance and repairs are charged to income as incurred.
Depreciation is provided for under the declining-balance method for
property, plant and equipment, except for buildings which are
depreciated using the straight-line method, at rates based on
estimated useful lives of the assets, principally ranging from five to sixty
years for buildings and from four to twenty-two years for machinery
and equipment.
Intangible fixed assets (except lease assets), including software
for internal use, are amortized using the straight-line method over
the estimated useful lives of the assets. The estimated useful life of
software for internal use is mainly five years.
Kasei Pharma Corp., Asahi Kasei Kuraray Medical Co., Ltd., Asahi
Kasei Medical Co., Ltd., Asahi Kasei Fibers Corp., Asahi Kasei
Microdevices Corp., Asahi Kasei E-materials Corp. and Asahi Kasei
Construction Materials Corp.), Tong Suh Petrochemical Corp. Ltd.
(Korea), and Sanyo Petrochemical Co., Ltd. Material inter-company
transactions and accounts have been eliminated.
Investments in unconsolidated subsidiaries and 20% to 50%
owned companies in which the Company exercises significant
influence are accounted for, with minor exceptions due to
materiality, using the equity method of accounting. There were 49
such unconsolidated subsidiaries and 20% to 50% owned
companies to which the equity method is applied at March 31,
2010 (51 at March 31, 2009), including Asahi Kasei Metals Ltd.,
Asahi Kasei Geotechnologies Co., Ltd., and Asahi Organic
Chemicals Industry Co., Ltd.
Certain subsidiaries results are reported in the consolidated
financial statements using a December 31 or a February 28 year-
end. Material differences in inter-company transactions and
accounts arising from the use of different fiscal year-ends are
appropriately adjusted for through consolidation procedures.
All assets and liabilities of consolidated subsidiaries are valued
using the partial fair value method. The excess of the cost over the
underlying net equity of investments in subsidiaries and affiliated
companies accounted for using the equity method of accounting is
allocated to identifiable assets and liabilities based on fair values at
the date of acquisition. The unassigned residual value of the excess
of the cost over the underlying net equity is recognized as goodwill
or negative goodwill. The Company amortizes goodwill and
negative goodwill using the straight-line method over the estimated
period of benefit over a five or twenty-year period, with the
exception of minor amounts, which are charged to income in the
year of acquisition.
Lease assets are depreciated/amortized on a straight-line basis
over the period of the lease with no residual value. For financial lease
transactions without title transfer whose transaction date is before
March 31, 2008, the previous method of accounting for lease
transactions continues to be applied, with periodic lease charges for
financing leases charged to income as incurred.
(d) Significant allowances
i) Allowance for doubtful accounts
Estimates of the unrecoverable portion of receivables, generally
based on historical rates and for specific receivables of particular
concern based on individual estimates of recoverability, are
recognized as allowance for doubtful accounts.
ii) Provision for repairs
The portion of foreseeable repair expenses deemed to
correspond to normal wear and tear of plant and equipment
as of the closing date of the consolidated fiscal period is
recognized as provision for repairs.
iii) Provision for product warranties
Estimates of product warranty expenses based on historical
rates and the amount required for remediation of deficient
eave assembly specification are recognized as provision for
product warranties.
iv) Provision for retirement benefits
Provision for retirement benefits represent the estimated
50
Financial Section
present value of projected benefit obligations in excess of the
fair value of the plan assets. Unrecognized actuarial gains/
losses, resulting from variances between actual results and
economic estimates or actuarial assumptions, are amortized
on a straight-line basis primarily over the following ten years.
Unrecognized prior service costs are amortized on a straight-
line basis primarily over the following ten years.
v) Provision for directors’ retirement benefits
Provision is made for lump-sum indemnities to directors and
corporate auditors equal to the estimated liability calculated
under the internal rules of the Company.
(e) Significant revenue and expense recognition
i) Construction activities that are realizable as of current
fiscal year end.
The percentage-of-completion method (progress of work is
estimated using the percentage of costs incurred to the total
projected costs).
ii) Other construction activity
The completed-contract method
(f) Financial instruments
i) Securities
Securities are classified into four categories; trading securities,
held-to-maturity debt securities, equity securities of
unconsolidated subsidiaries and affiliates, and other securities.
At March 31, 2010 and 2009, the Company did not have
trading securities or held-to-maturity debt securities.
Equity securities of unconsolidated subsidiaries and
affiliates are accounted for, with minor exceptions due to
materiality, using the equity method of accounting.
Other securities whose fair values are readily determinable are
carried at fair value with net unrealized gains or losses included as
a component of net assets, net of related taxes. Other securities
whose fair values are not readily determinable are stated at cost. In
cases where any significant decline in the realizable value is
assessed to be other than temporary, the cost of other securities is
devalued by the impaired amount and is charged to income.
Realized gains and losses are determined using the average
cost method and are reflected in the income statement.
3. Changes in significant accounting policies:
ii) Derivative financial instruments
All derivatives are stated at fair value. Gains or losses arising
from changes in fair value are charged or credited to income for
the period in which they arise, except for derivatives that are
designated as hedging instruments. Gains or losses arising from
changes in fair value of these qualifying hedges are deferred as
“Deferred gains or losses on hedges” to be offset against gains
or losses of the underlying hedged assets and liabilities.
(g) Taxes
Accrued income taxes are stated at the estimated amount payable for
corporation, enterprise, and inhabitant taxes. The asset and liability
approach is used to recognize deferred tax assets and liabilities for the
expected future tax consequences of temporary differences between
the carrying amounts and the tax bases of assets and liabilities.
In Japan, the consumption tax system is designed so that all
goods and services are taxed at a flat rate of 5% unless specified
otherwise. Assets, liabilities, and profit and loss accounts are
stated net of consumption tax.
The Company has elected to file its return under the
consolidated tax filing system.
(h) Translation of foreign currencies
Foreign currency receivables and payables are translated into
Japanese yen at the exchange rates prevailing at the balance
sheet date. Resulting gains and losses are charged or credited to
income for the period.
Assets and liabilities of foreign subsidiaries and 20% to 50%
owned companies accounted for using the equity method of
accounting are translated into Japanese yen at year-end
exchange rates, and income and expenses of same are translated
into Japanese yen at the average exchange rate for the fiscal year.
Shareholders’ equity of foreign subsidiaries and 20% to 50%
owned companies is translated into Japanese yen at the historical
exchange rates. The translation differences in Japanese yen
amounts arising from the use of different rates are recognized as
foreign currency translation adjustment in the balance sheets.
A portion of the foreign currency translation adjustment is allocated
to “Minority interest” and the Company’s portion is presented as a
separate component of net assets in the balance sheets.
(a) Application of Partial Amendments to Accounting
(b) Application of Accounting Standard for Construction
Standard for Retirement Benefits (Part 3)
Contracts
Partial Amendments to Accounting Standard for Retirement
Benefits (Part 3) (ASBJ Statement No. 19, July 31, 2008) has
been applied beginning from the fiscal year ended March 31,
2010. This has results in no effect on operating income, ordinary
income, or income before income taxes.
Accounting Standard for Construction Contracts (ASBJ
Statement No. 15, December 27, 2007) and Guidance on
Accounting Standard for Construction Contracts (ASBJ Guidance
No. 18, December 27, 2007) have been applied beginning from
the fiscal year ended March 31, 2010. The revenue for
construction activity for which construction activities are realizable
has been recognized based on the percentage-of-completion
method (progress of work is estimated using the percentage of
costs incurred to the total projected costs) and the completed-
contract method is applied to other work. This change has been
result in no effect on the consolidated financial statements.
4. Additional information:
Consolidated subsidiary Asahi Kasei Pharma Corp. had claimed for
compensation from CoTherix, Inc. of the US to the breach a license
agreement for Fasudil rho-kinase inhibitor, and a final arbitration ruling
was issued in December, 2009. Deducting expenses incurred in the
arbitration proceedings, etc., from the arbitration award received by
Asahi Kasei Pharma, ¥6,502 million (US $ 69,916 thousand) is
recorded in the consolidated statements of income as “gain as a
result of arbitration award” under extraordinary income.
Asahi Kasei Annual Report 2010
51
5. Notes to Consolidated Balance Sheets:
(a) Investment securities
Among investment securities, shares of unconsolidated subsidiaries and affiliates as of March 31, 2010 and 2009, amounted to
¥61,501 million (US$661,297 thousand) and ¥62,170 million, respectively.
Included in those amounts are investments in joint ventures of ¥33,654 million (US$361,874 thousand) and ¥25,583 million,
respectively.
(b) Hypothecated assets and secured debt
A summary of assets pledged as collateral and secured debt as of March 31, 2010 and 2009, is shown below:
Hypothecated assets
Buildings and structures
Machinery, equipment and vehicles
Other
Secured debt
Short-term loans payable
Long-term loans payable
Millions of yen
2010
¥ 433
16
0
¥ 449
¥ 24
620
¥ 644
2009
¥ 534
21
1
¥ 556
¥ 4
8
¥ 12
Thousands of
U.S. dollars
2010
$ 4,652
176
4
$ 4,832
$ 258
6,667
$ 6,925
Besides the above, investment securities pledged to suppliers as transaction guarantee at March 31, 2010 and 2009, were ¥98
million (US$1,052 thousand) and ¥80 million, respectively.
(c) Contingent liabilities
Contingent liabilities at March 31, 2010 and 2009, arising in the ordinary course of business are as follows:
Loans guaranteed
Commitment for guarantees
Letters of awareness
Completion guarantees
Notes discounted
Millions of yen
2010
¥ 8,920
1,144
797
10,605
13
2009
¥ 8,525
1,394
637
4,764
152
Thousands of
U.S. dollars
2010
$ 95,916
12,302
8,566
114,036
138
¥ 21,479
¥ 15,472
$ 230,959
The parent company and certain of its subsidiaries and affiliates are defendants in several pending lawsuits. However, based upon the
information currently available to both the Company and its legal counsel, management of the Company believes that any damages
from such lawsuits will not have a material effect on the Company’s consolidated financial statements.
(d) Reduction entries due to state subsidies, etc.
Cumulative reduction entries due to state subsidies, etc. for the acquisition of property, plant and equipment as of March 31, 2010 and
2009, were ¥5,936 million (US$63,829 thousand) and ¥4,078 million, respectively. The breakdown of reduction entries as of March 31,
2010, is as follows:
Buildings and structures
Machinery, equipment and vehicles
Land
Other
Millions of yen
2010
¥ 2,612
2,958
252
113
¥ 5,936
2009
¥ 2,105
1,622
238
112
¥ 4,078
Thousands of
U.S. dollars
2010
$ 28,089
31,809
2,714
1,217
$ 63,829
52
Financial Section
6. Notes to Consolidated Statements of Income:
(a) Selling, general and administrative expenses
Major components of selling, general and administrative expenses are as follows:
Freight and storage
Salaries and benefits
Research and development (*)
Millions of yen
2010
¥ 32,102
90,623
44,846
2009
¥ 33,940
88,988
43,249
Thousands of
U.S. dollars
2010
$ 345,183
974,441
482,218
(*) The aggregate amounts of research and development expenses included in manufacturing costs and selling, general and administrative expenses for the years ended March 31, 2010 and
2009, were ¥62,924 million (US$676,597 thousand) and ¥60,849 million, respectively.
(b) Loss on devaluation of inventories
Inventories held for sale in the ordinary course of business are stated at the lower of cost or net sales value. Loss on devaluation of
inventories for the years ended March 31, 2010 and 2009, was as follows:
Millions of yen
2010
¥(5,241)
2009
¥12,923
Thousands of
U.S. dollars
2010
$(56,357)
(c) Gain on sales of noncurrent assets
Gain on sales of noncurrent assets for the year ended March 31, 2010, was comprised of the gain on the sales of machinery and
equipment, etc. amounting to ¥152 million (US$1,634 thousand). Gain on sales of noncurrent assets for the year ended March 31,
2009, was primarily the gain on the sale of land, etc. amounting to ¥514 million.
(d) Loss on disposal of noncurrent assets
Loss on disposal of noncurrent assets for the years ended March 31, 2010 and 2009, was primarily the loss on abandonment and sale
of buildings, machinery and equipment, etc. The abandonment and sale of buildings, machinery and equipment, etc. was performed
under a single, all-inclusive contract for each facility.
(e) Impairment loss
Impairment loss for the years ended March 31, 2010 and 2009, were as follows:
Use
Asset class
Location
Production facility for autoclaved aerated
concrete (AAC) panels
Machinery and
equipment, etc.
Mizuho, Gifu
Production facility for autoclaved aerated
concrete (AAC) panels and others
Machinery and
equipment, etc.
Shiraoi, Hokkaido,
and elsewhere
Production facility for synthetic resin
Production facility for polyester filament
Machinery and
equipment, etc.
Machinery and
equipment, etc.
Sodegaura, Chiba
Nobeoka, Miyazaki
Production facility for performance Paper Machinery and
equipment, etc.
Gobo, Wakayama
Production facility for functional food
additives
Machinery and
equipment, etc.
Shiraoi, Hokkaido
Idle assets
Land
Production facility for fine-pattern devices Machinery and
equipment, etc.
Atsukgi, Kanagawa,
and elsewhere
Hyuga, Miyazaki
Millions of yen
2010
¥ 1,365
2009
¥ —
—
754
955
—
—
264
531
—
—
112
198
108
—
79
Thousands of
U.S. dollars
2010
$ 14,675
—
10,269
—
5,707
—
2,128
1,160
Grouping of operating assets is based on managerial accounting categories, with consideration given to production process,
geographic location, and domain of authority for making investment decisions. Idle assets are recorded separately in each fixed assets
class.
With respect to assets shown in the above table, the book value was reduced to the recoverable amount due to diminished profitability.
The recoverable amount is stated as future cash flow less 5% as measured by usability value. The resulting extraordinary loss for production
facility for autoclaved aerated concrete (AAC) panels and for production facility for synthetic resin was recorded under business structure
improvement expenses for the year ended March 31, 2010. The resulting extraordinary loss for production facility for autoclaved aerated
Asahi Kasei Annual Report 2010
53
concrete (AAC) panels and others and for production facility for functional food additives was recorded under business structure improvement
expenses for the year ended March 31, 2009. For idle land of which the market value has significantly decreased, the book value is reduced to
the recoverable amount. The recoverable amount is measured at the net selling price primarily based on the value appraised by real estate
appraisers.
(f) Environmental expenses
Environmental expenses for the years ended March 31, 2010 were mainly for abandonment of polychlorinated biphenyl (“PCB”) wastes,
etc. and for the year ended March 31, 2009, were mainly for decontamination of idle land, etc.
(g) Business structure improvement expenses
Major components of the business structure improvement expenses are as follows:
Loss on disposal and devaluation of assets and others
Impairment of fixed assets
Loss on liquidation of subsidiaries and others
7. Notes to Consolidated Statements of Changes in Net Assets:
For the year ended March 31, 2010
(a) Class and total number of issued and outstanding shares and treasury stock
Millions of yen
2010
¥ 7,730
2,320
—
¥ 10,050
2009
¥ 3,271
866
865
¥ 5,001
Thousands of
U.S. dollars
2010
$ 83,118
24,944
—
$ 108,062
Issued and outstanding shares
Capital stock
Total
Treasury stock
Capital stock (Notes 1 & 2)
Total
Number of
shares as of
March 31, 2009
Increase in
number of shares
during the fiscal year
Decrease in
number of shares
during the fiscal year
Number of
shares as of
March 31, 2010
Thousands of shares
1,402,616
1,402,616
4,071
4,071
—
—
211
211
—
—
53
53
1,402,616
1,402,616
4,228
4,228
Notes: 1. The increase of 211 thousand shares in capital stock of treasury stock was due to purchase of shares in quantities of less than one share unit.
2. The decrease of 53 thousand shares in capital stock of treasury stock was due to sale of shares in quantities of less than one share unit.
(b) Dividends
i) Cash dividends paid
1) The following was resolved by the Board of Directors on May 12, 2009.
Regarding dividends for capital stock
Total dividends
Dividend per share
Date of record
Payment date
¥4,196 million (US$45,114 thousand)
¥3.00 (US$0.03)
March 31, 2009
June 3, 2009
2) The following was resolved by the Board of Directors on November 2, 2009.
Regarding dividends for capital stock
Total dividends
Dividend per share
Date of record
Payment date
¥6,992 million (US$75,186 thousand)
¥5.00 (US$0.05)
September 30, 2009
December 1, 2009
ii) Dividends for which the date of record falls within the fiscal year under review but the payment date occurs in the
following fiscal year
The following was resolved by the Board of Directors on May 10, 2010.
Regarding dividends for capital stock
Total dividends
Source of dividends
Dividend per share
Date of record
Payment date
¥6,992 million (US$75,182 thousand)
Retained earnings
¥5.00 (US$0.05)
March 31, 2010
June 7, 2010
54
Financial Section
For the year ended March 31, 2009
(a) Class and total number of issued and outstanding shares and treasury stock
Issued and outstanding shares
Capital stock
Total
Treasury stock
Capital stock (Notes 1 & 2)
Total
Number of
shares as of
March 31, 2008
Increase in
number of shares
during the fiscal year
Decrease in
number of shares
during the fiscal year
Number of
shares as of
March 31, 2009
Thousands of shares
1,402,616
1,402,616
4,081
4,081
—
—
530
530
—
—
540
540
1,402,616
1,402,616
4,071
4,071
Notes: 1. The increase of 530 thousand shares in capital stock of treasury stock was due to purchase of shares in quantities of less than one share unit.
2. Of the decrease of 540 thousand shares in capital stock of treasury stock, a decrease of 348 thousand was due to sale of shares in quantities of less than one share unit, and a
decrease of 193 thousand was the portion of the Company’s shares which had been recorded as the Company’s treasury stock which were sold by an affiliate for which the equity
method applies.
(b) Dividends
i) Cash dividends paid
1) The following was resolved by the Board of Directors on May 8, 2008.
Regarding dividends for capital stock
Total dividends
Dividend per share
Date of record
Payment date
¥9,791 million
¥7.00
March 31, 2008
June 6, 2008
2) The following was resolved by the Board of Directors on November 5, 2008.
Regarding dividends for capital stock
Total dividends
Dividend per share
Date of record
Payment date
¥9,790 million
¥7.00
September 30, 2008
December 1, 2008
ii) Dividends for which the date of record falls within the fiscal year under review but the payment date occurs in the
following fiscal year
The following was resolved by the Board of Directors on May 12, 2009.
Regarding dividends for capital stock
Total dividends
Source of dividends
Dividend per share
Date of record
Payment date
¥4,196 million
Retained earnings
¥3.00
March 31, 2009
June 3, 2009
8. Note of Consolidated Statements of Cash Flows:
Cash and cash equivalents
Reconciliation of cash and cash equivalents on the consolidated statements of cash flows to the amounts disclosed on the balance
sheets at March 31, 2010 and 2009, is as follows:
Cash and deposits
Time deposits with deposit term of over 3 months
Money market funds, medium-term government bond funds, and others included
in marketable securities
Cash and cash equivalents
Millions of yen
2010
¥ 93,928
(1,788)
985
¥ 93,125
2009
¥ 97,969
(163)
286
¥ 98,092
Thousands of
U.S. dollars
2010
$ 1,009,984
(19,230)
10,591
$ 1,001,345
Asahi Kasei Annual Report 2010
55
9. Leases:
(a) Financial lease transactions
Financial lease transactions without title transfer
i) Components of lease assets are as follows:
1) Property, plant and equipment: Mainly model homes (buildings and structures) for housing operations.
2) Intangible fixed assets: Software.
ii) Depreciation of lease assets:
As stated in 2. Significant accounting policies (c) Noncurrent assets and depreciation/amortization. For financial lease
transactions without title transfer whose transaction date is before March 31, 2008, the previous method of accounting for lease
transactions continues to be applied.
The cost of the assets and the related accumulated amortization, computed using the straight-line method over the term of the
lease, at March 31, 2010 and 2009, would have been as follows:
Buildings and structures
Machinery, equipment and vehicles
Property, plant and equipment—other
Intangible fixed assets—other
Buildings and structures
Machinery, equipment and vehicles
Property, plant and equipment—other
Intangible fixed assets—other
Buildings and structures
Machinery, equipment and vehicles
Property, plant and equipment—other
Intangible fixed assets—other
Millions of yen
2010
Accumulated
amortization
¥ 4,503
156
678
149
¥ 5,486
Millions of yen
2009
Accumulated
amortization
¥ 6,418
191
926
223
¥ 7,758
Thousands of U.S. dollars
2010
Accumulated
amortization
$ 48,414
1,673
7,293
1,606
$ 58,987
Net amount
¥ 1,360
113
303
110
¥ 1,886
Net amount
¥ 3,433
160
534
187
¥ 4,315
Net amount
$ 14,625
1,215
3,258
1,180
$ 20,278
Cost
¥ 5,863
269
981
259
¥ 7,372
Cost
¥ 9,851
351
1,460
410
¥ 12,072
Cost
$ 63,040
2,888
10,551
2,786
$ 79,265
The future lease payments under the Company’s financing leases at March 31, 2010 and 2009, including amounts representing
interest, were as follows:
Due within one year
Due after one year
Millions of yen
2010
¥ 1,333
552
¥ 1,886
2009
¥ 2,353
1,961
¥ 4,315
Thousands of
U.S. dollars
2010
$ 14,339
5,939
$ 20,278
Lease charges were ¥ 2,229 million (US$23,968 thousand) and ¥3,459 million for the years ended March 31, 2010 and 2009,
respectively. The amortization amounts of the leased assets, computed using the straight-line method over the term of the leases and no
residual value, were ¥2,229 million (US$23,968 thousand) and ¥3,459 million for the years ended March 31, 2010 and 2009, respectively.
No impairment loss is allocated to the leased assets.
56
Financial Section
(b) Operating lease transactions
Future lease payments for the non-cancelable portion of the Company’s operating leases at March 31, 2010 and 2009, were as follows:
Due within one year
Due after one year
10. Financial instruments:
(a) State of financial instruments
Millions of yen
2010
¥ 4,651
11,697
¥ 16,349
2009
¥ 4,525
16,172
¥ 20,696
Thousands of
U.S. dollars
2010
$ 50,015
125,780
$ 175,795
i) Policy related to financial instruments
The Company raises long-term funds as required mainly for its planned capital expenditure by borrowing from banks, borrowing
from life insurance companies, issuing bonds, etc. A portion of surplus funds is invested only in highly stable financial assets.
Short-term working funds are raised by bank borrowings, issuance of commercial paper, etc. Derivatives are mainly used for the
purpose of reducing risks related to assets and liabilities which are exposed to risks of fluctuations of exchange rate and interest
rate. Derivatives are not traded for speculative purposes.
ii) Components of financial instruments, their risks, and management of risks
As operating receivables, notes and accounts receivable, trade, are exposed to credit risk of customers. As the business of the
Company spans a wide range of fields, operating receivables are not excessively concentrated on specific customers, but each
group company monitors and manages the state of credit for each supplier.
Investment securities are exposed to the risk of fluctuations in market price, but they are mainly shares in supplier companies,
etc., held for policy purposes. Fair value is periodically evaluated, and the financial condition of the issuing company is monitored.
As operating liabilities, notes and accounts payable, trade, generally have a payment term of one year or less.
Variable interest-rate borrowings are exposed to the risk of interest rate fluctuations, but derivatives (interest currency swaps,
interest-rate swaps) are used as hedges to fix interest expenses for a portion of long-term variable interest-rate borrowings.
Operating receivables and operating liabilities include those denominated in currencies other than Japanese yen, and are thus
exposed to the risk of exchange rate fluctuations. In order to minimize the effects of short-term exchange-rate fluctuations, the
Company hedges with derivative transactions (forward exchange contracts) in principle within the range of the underlying
receivables and liabilities.
Derivative transactions are exposed to the credit risk of transacting financial institutions, but the state of credit is verified
through periodical monitoring. Such transactions are performed and managed in accordance with each company’s internal
regulations which stipulate the related authority, procedures, limits, etc.
Borrowings are exposed to liquidity risk, but the parent company specifies standards for required on-hand funds based on the
Company’s funding plans, prepares and revises plans for cash receipts and disbursements as appropriate, and enters into
commitment-line agreements with transacting financial institutions to manage such risk.
Loan securitization in housing operations are exposed to the risk of interest rate fluctuation between the time of execution of
housing loans and the time of execution of their securitizations, but derivative transactions (interest rate swaps) are performed to
reduce such risk.
iii) Supplementary explanation of fair value of financial instruments
Fair value of financial instruments includes value based on market value, and, in the case where no market value exists,
reasonably calculated value. As variable factors are incorporated in its calculation, fair value may change due to the adoption of
different assumptions, conditions, etc. “Amount of contract” regarding derivative transactions in the note 12. “Derivative financial
instruments” is not itself an indication of the market risk of the derivative transactions.
Asahi Kasei Annual Report 2010
57
(b) Fair value of financial instruments
Amounts carried on the consolidated balance sheets, their fair values, and the differences between them as of March 31, 2010, are as shown below.
Financial instruments whose fair values are deemed extremely difficult to determine are not included in this table (See Note 2, below).
Cash and deposits
Notes and accounts receivable, trade
Allowance for doubtful accounts(*1)
Short-term investment securities
Other securities
Investment securities
Other securities
Long-term receivables
Allowance for doubtful accounts(*1)
Total assets
Notes and accounts payable, trade
Short-term loans payable
Commercial paper
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposited
Total liabilities
Derivative financial instruments(*2)
Cash and deposits
Notes and accounts receivable, trade
Allowance for doubtful accounts(*1)
Short-term investment securities
Other securities
Investment securities
Other securities
Long-term receivables
Allowance for doubtful accounts(*1)
Total assets
Notes and accounts payable, trade
Short-term loans payable
Commercial paper
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposited
Total liabilities
Derivative financial instruments(*2)
Carrying
amount
¥ 93,928
238,931
(1,543)
237,388
Millions of yen
2010
Fair value
¥ 93,928
237,388
112
112
105,303
6,844
(73)
6,770
443,501
121,409
78,302
19,000
12,160
25,000
137,406
4,716
5,694
403,686
(200)
105,303
7,125
443,856
121,409
78,302
19,000
12,160
24,808
138,385
4,774
5,583
404,421
(200)
Thousands of U.S. dollars
2010
Fair value
$ 1,009,984
2,552,557
Carrying
amount
$ 1,009,984
2,569,150
(16,593)
2,552,557
1,199
1,199
1,132,286
1,132,286
73,587
(787)
72,800
4,768,826
1,305,472
841,957
204,301
130,752
268,817
1,477,481
50,710
61,221
4,340,713
(2,152)
76,616
4,772,642
1,305,472
841,957
204,301
130,752
266,755
1,488,015
51,333
60,028
4,348,614
(2,152)
Difference
¥ —
—
—
—
355
355
—
—
—
—
192
(980)
(58)
111
(735)
—
Difference
$
—
—
—
—
3,816
3,816
—
—
—
—
2,062
(10,534)
(622)
1,193
(7,901)
—
(*1) Specific allowance for doubtful accounts is specifically deducted from notes and accounts receivable, trade, and long-term loans receivable.
(*2) Net amount of assets and liabilities from derivative transactions is shown. In the case of a net liability, the amount is shown in parentheses.
58
Financial Section
Notes: 1. Method of calculating fair value of financial instruments; securities and derivative financial instruments
i) Assets
1) Cash and deposits; notes and accounts receivable, trade
As their fair value approximates book value due to their short maturity, the corresponding book value amount is used as fair value.
2) Short-term investment securities, investment securities
The stock exchange price is used to determine fair value of these traded stocks. Refer to the Note 11 "Marketable securities and investment securities" for information regarding
securities based on each objective for which they are held.
3) Long-term loans receivable
The carrying amount shown includes long-term loans receivable scheduled for repayment within one year. Their fair value is determined by a method of calculation in which the
total amount of capital and interest is discounted using the interest rate that would apply if equivalent long-term loans were newly issued. For long-term loans receivable that have
a variable interest rate, as they are deemed to reflect market interest rates within a short term, book value is used as fair value.
ii) Liabilities
1) Notes and accounts payable, trade; short-term loans payable; commercial paper; income taxes payable
As their fair value approximates book value due to their short maturity, the corresponding book value amount is used as fair value.
2) Bonds payable
With regard to fair value of the bonds payable issued by the parent company, for those with market value, fair value is determined by the market value. For those without market
value that are subject to exceptional treatment for interest rate swaps, fair value is determined by a method of calculation in which the total amount of capital and interest, treated
as a unit with such interest rate swaps, is discounted using the interest rate that would apply if equivalent bonds were newly issued.
3) Long-term loans payable
The carrying amount shown includes long-term loans payable that are scheduled for repayment within one year of ¥15,660 million (US$168,391 thousand). Their fair value is
determined by a method of calculation in which the total amount of capital and interest is discounted using the interest rate that would apply if equivalent long-term loans were
newly entered. Of long-term loans payable that have a variable interest rate, fair value of those subject to exceptional treatment of interest rate swaps is determined by a method
of calculation in which the total amount of capital and interest, treated as a unit with such interest rate swaps, is discounted using the interest rate that would apply if equivalent
long-term loans were newly entered, and book value is used as fair value of others, as they are deemed to reflect market interest rates within a short term.
4) Lease obligations
The carrying amount shown is the total amount combining lease obligations under current liabilities and lease obligations under noncurrent liabilities. Present value is calculated by
discounting the total amount of capital and interest using the presumed interest rate that would apply if lease transactions were newly made is used as fair value.
5) Long-term guarantee deposited
In the case where the deposit period can be estimated, fair value of long-term guarantee deposited is determined through calculation of the discount over that period.
iii) Derivative transactions
Refer to the note 12 “Derivative financial instruments.”
2. For equity investment in nonpublic companies, with a carrying amount of ¥70,630 million (US$759,465 thousand), fair value is not included in short-term investment securities or in
investment securities, as no market value exists and it is deemed extremely difficult to determine fair value due to the impossibility of estimating future cash flows.
3. Of the carrying amount of long-term loans payable, ¥176 million (US$1,891 thousand) is for loans from the Japan Science and Technology Agency, and the timing of repayment is yet
to be determined as it begins after development success is certified. Fair value is not included as it is deemed extremely difficult to determine due to the impossibility of estimating
future cash flows.
4. Within long-term guarantee deposited, the fair value of a portion having a carrying amount of ¥12,628 million (US$135,784 thousand) is not included as no market value exists and it is
deemed extremely difficult to determine fair value due to the impossibility of estimating future cash flows.
5. For monetary credits and securities with maturity, amount scheduled for redemption subsequent to the closing date.
Cash and deposits
Notes and accounts receivable, trade
Short-term investment securities, investment securities
Government and municipal bonds
Long-term receivables
Cash and deposits
Notes and accounts receivable, trade
Short-term investment securities, investment securities
Government and municipal bonds
Long-term receivables
Millions of yen
2010
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
¥ 93,928
238,931
2
769
¥ 333,631
¥ —
—
5
6,059
¥ 6,064
¥ —
—
—
15
¥ 15
¥ —
—
—
—
¥ —
Thousands of U.S. dollars
2010
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
$ —
—
49
65,152
$ 65,201
$ —
—
—
161
$ 161
$ —
—
—
—
$ —
Due within one year
$ 1,009,984
2,569,150
24
8,273
$ 3,587,431
6. For bonds payable, long-term loans payable, lease obligations, and other interest-bearing debt, amount scheduled for repayment subsequent to the closing date.
Refer to Note 18 “Borrowings”.
(Additional information)
Accounting Standard for Financial Instruments (ASBJ statement No. 10) and Implementation Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ Guidance No. 19) are
applied beginning with the fiscal year ended March 31, 2010.
Asahi Kasei Annual Report 2010
59
11. Marketable securities and investment securities:
(a) Other securities with available fair value－
The aggregate cost, carrying amount which was identical to fair value, and gross unrealized gains and losses of debt and equity
securities classified as other securities for which fair values were available at March 31, 2010 and 2009, were as follows:
Securities with unrealized gains:
Equity securities
Securities with unrealized losses:
Equity securities
Debt securities
Carrying
amount
Millions of yen
2010
Cost
Unrealized gains
(losses)
¥ 96,284
¥ 33,280
¥ 63,004
9,019
0
9,019
¥ 105,303
10,415
0
10,415
¥ 43,695
(1,396)
—
(1,396)
¥ 61,608
Note: For equity investment in nonpublic companies, with a carrying amount of ¥70,630 million, fair value is not included in short-term investment securities or in investment securities, as no
market value exists and it is deemed extremely difficult to determine fair value.
Securities with unrealized gains:
Equity securities
Securities with unrealized losses:
Equity securities
Debt securities
Carrying
amount
Millions of yen
2009
Cost
Unrealized gains
(losses)
¥ 73,118
¥ 32,070
¥ 41,048
9,478
0
9,478
¥ 82,596
11,177
0
11,177
¥ 43,247
(1,700)
—
(1,700)
¥ 39,349
Note: Loss on devaluation of other securities whose fair values are readily determinable for the year ended March 31, 2009, totaled ¥497 million.
Securities with unrealized gains:
Equity securities
Securities with unrealized losses:
Equity securities
Debt securities
Thousands of U.S. dollars
2010
Cost
Carrying
amount
Unrealized gains
(losses)
$ 1,035,307
$ 357,848
$ 677,460
96,979
1
96,979
$ 1,132,286
111,986
1
111,987
$ 469,835
(15,008)
—
(15,008)
$ 662,452
Note: For equity investment in nonpublic companies, with a carrying amount of US$759,465 thousand, fair value is not included in short-term investment securities or in investment securities, as
no market value exists and it is deemed extremely difficult to determine fair value.
(b) The realized gains and losses on the sale of other securities during the year ended March 31 2010 and 2009, were as follows:
Selling amount
Gain on sales of securities
Loss on sales of securities
Millions of yen
2010
¥ 275
112
—
2009
¥ 463
17
70
Thousands of
U.S. dollars
2010
$ 2,954
1,203
—
(c) Loss on devaluation of investment securities whose fair values are readily determinable for the years ended March 31, 2010, totaled
¥1,918 million (US$20,626 thousand).
60
Financial Section
12. Derivative financial instruments:
(a) Derivative financial instruments—Hedge accounting is not applied
i) Foreign exchange forward contracts
Classification
Items
Amount of contract
Amount of contract
over one year
Fair value
Profit (loss) from valuation
Foreign exchange forward contract
Millions of yen
2010
Selling
U.S. dollar
Euro
Thai baht
Buying
U.S. dollar
Dealings other than
market dealings
Total
¥ 11,406
3,518
479
1,311
¥ 16,714
¥ —
—
—
—
¥ —
¥ (105)
(8)
(27)
16
¥ (124)
¥ (105)
(8)
(27)
16
¥ (124)
Thousands of U.S. dollars
2010
Classification
Items
Amount of contract
Amount of contract
over one year
Fair value
Profit (loss) from valuation
Foreign exchange forward contract
Selling
U.S. dollar
Euro
Thai baht
Buying
U.S. dollar
Dealings other than
market dealings
Total
$ 122,640
37,830
5,154
14,092
$ 179,716
$ —
—
—
—
$ —
$ (1,126)
$ (1,126)
(81)
(292)
170
$ (1,329)
(81)
(292)
170
$ (1,329)
ii) Interest rate swaps and interest currency rate swaps
Millions of yen
2009
Classification
Items
Amount of contract
Amount of contract
over one year
Fair value
Profit (loss) from valuation
Dealings other than
market dealings
Interest rate swap
receive floating / pay fixed
Total
¥750
¥750
¥ —
¥ —
¥8
¥8
¥8
¥8
(b) Derivative financial instruments—Hedge accounting is applied
i) Foreign exchange forward contracts
Classification
Items
Hedged assets / liabilities
Amount of contract
Foreign exchange forward contracts
Millions of yen
2010
Amount of contract
over one year
Selling
U.S. dollar
Principled
treatment
Euro
Buying
U.S. dollar
Euro
Total
Accounts receivable, trade
Accounts receivable, trade
Accounts payable, trade
Accounts payable, trade
¥ 3,263
698
53
60
¥ 4,075
¥ —
—
—
—
¥ —
Fair value
¥ (79)
5
(1)
(1)
¥ (77)
Asahi Kasei Annual Report 2010
61
Classification
Items
Hedged assets / liabilities
Amount of contract
Foreign exchange forward contracts
Thousands of U.S. dollars
2010
Amount of contract
over one year
Selling
U.S. dollar
Principled
treatment
Euro
Buying
U.S. dollar
Euro
Total
Accounts receivable, trade
Accounts receivable, trade
Accounts payable, trade
Accounts payable, trade
$ 35,090
7,509
566
646
$ 43,812
$ —
—
—
—
$ —
Fair value
$ (849)
49
(14)
(9)
$ (823)
ii) Interest rate swaps and interest currency rate swaps
Classification
Items
Hedged assets / liabilities
Amount of contract
Millions of yen
2010
Amount of contract
over one year
Fair value
Exceptional
treatment for an
interest rate swap
Exceptional
treatment for an
interest rate swap
and foreign
exchange swap
Total
Interest rate swaps
Receive fixed/ pay floating
Long-term loans payable
Pay fixed / receive floating
Long-term loans payable
¥ 5,000
45,178
¥ 5,000
44,054
Interest currency rate swaps
U.S. dollar receive fixed/
Japanese yen pay floating
U.S. dollar receive floating /
Thai baht pay fixed
Bonds payable
5,000
5,000
Long-term loans payable
731
585
¥ 55,909
¥ 54,638
(*)
(*)
(*)
(*)
—
Classification
Items
Hedged assets / liabilities
Amount of contract
Thousands of U.S. dollars
2010
Amount of contract
over one year
Fair value
Exceptional
treatment for an
interest rate swap
Exceptional
treatment for an
interest rate swap
and foreign
exchange swap
Total
Interest rate swaps
Receive fixed/ pay floating
Long-term loans payable
Pay fixed / receive floating
Long-term loans payable
$ 53,763
485,788
$ 53,763
473,695
Interest currency rate swaps
U.S. dollar receive fixed/
Japanese yen pay floating
U.S. dollar receive floating /
Thai baht pay fixed
Bonds payable
53,763
53,763
Long-term loans payable
7,858
$ 601,173
6,286
$ 587,508
(*)
(*)
(*)
(*)
—
(*) Fair value of interest rate swaps and interest currency rate swaps by exceptional treatment is included in fair value of the corresponding long-term loans payable to which hedge
accounting is applied.
62
Financial Section
13. Provision for retirement benefits:
Upon terminating employment, employees of the parent company and its major subsidiaries in Japan are entitled, under most
circumstances, to lump-sum severance indemnities and/or pension payments determined by reference mainly to their current basic rate
of pay and length of service. Additional benefits may be granted to employees depending on the conditions under which termination of
employment occurs. Certain foreign subsidiaries have defined benefit pension plans or defined contribution plans.
The obligation for these severance indemnity benefits is provided for through accruals, contributory funded defined benefit pension
plans, contributory funded defined benefit enterprise pension plans and non-contributory funded tax-qualified pension plans.
Information on provision for retirement benefits at March 31, 2010 and 2009, was as follows:
(a) Projected benefit obligations
(b) Fair value of plan assets
(c) Unfunded benefit obligations [(a)+(b)]
(d) Unrecognized actuarial gains/losses
(e) Unrecognized prior service costs
(f) Amount shown on balance sheet [(c)+(d)+(e)]
(g) Prepaid pension cost
(h) Provision for retirement benefits [(f)-(g)]
Millions of yen
2010
2009
Thousands of
U.S. dollars
2010
¥ (295,842)
¥ (296,676)
$ (3,181,099)
170,895
(124,947)
24,478
(4,019)
(104,488)
4,961
152,927
(143,749)
45,072
(5,615)
(104,292)
5,572
1,837,580
(1,343,519)
263,199
(43,211)
(1,123,531)
53,349
¥ (109,450)
¥ (109,864)
$ (1,176,880)
Note: The figures in the above table do not include additional benefit payables amounting to ¥45 million (US$489 thousand) and ¥59 million at March 31, 2010 and 2009, respectively. The
amounts were recorded as part of current liabilities on the consolidated balance sheets at March 31, 2010 and 2009.
Periodic retirement benefit expenses for employees for the years ended March 31, 2010 and 2009, include the following components:
Service cost*
Interest cost
Expected return on plan assets
Amortization of unrecognized actuarial gains/losses
Amortization of unrecognized prior service costs
Retirement benefit expenses
Millions of yen
2010
¥ 9,235
7,313
(3,797)
3,969
(1,375)
2009
¥ 8,896
7,282
(4,728)
(249)
(1,394)
Thousands of
U.S. dollars
2010
$ 99,305
78,639
(40,825)
42,680
(14,787)
¥ 15,346
¥ 9,807
$ 165,011
Note: In addition to the above costs, additional benefits amounting to ¥717 million (US$7,706 thousand) and ¥453 million were charged to income for the years ended March 31, 2010 and
2009, respectively.
* Not including contributions made by employees.
The assumptions used in calculation of the above information are as follows:
Discount rate
Expected rate of return on plan assets
2010
Mainly 2.5%
Mainly 2.5%
2009
2.5%
2.5%
Method of attributing the projected benefits to periods of employee service
Straight-line basis
Straight-line basis
Amortization of unrecognized prior service costs
Amortization of unrecognized actuarial gains/losses
Mainly 10 years
Mainly 10 years
Mainly 10 years
Mainly 10 years
Asahi Kasei Annual Report 2010
63
14. Taxes:
Income taxes applicable to the parent company and subsidiaries in Japan include (1) corporation tax, (2) enterprise tax, and (3) inhabitants tax.
Significant components of the deferred tax assets and liabilities at March 31 2010 and 2009, were as follows:
Deferred tax assets:
Provision for retirement benefits
Tax loss carryforwards
Accrued bonuses
Loss on disposal of noncurrent assets
Unrealized gain on noncurrent assets and others
Provision for repairs
Devaluation of investment securities
Impairment loss
Provision for product warranties
Accrued enterprise tax
Devaluation of inventories
Environmental expenses
Allowance for doubtful accounts
Depreciation
Other
Subtotal deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Valuation difference on available-for-sale securities
Reserve for noncurrent assets reduction
Reserve for special depreciation
Other
Total deferred tax liabilities
Millions of yen
2010
2009
¥ 44,158
11,377
6,994
4,061
4,053
3,346
2,853
2,684
1,636
1,330
1,296
1,146
823
649
9,267
95,673
(18,336)
77,336
(27,166)
(13,316)
(149)
(5,814)
(46,445)
¥ 44,448
14,736
6,496
3,764
3,225
2,396
2,141
2,887
1,418
692
1,947
1,030
801
934
8,452
95,366
(15,016)
80,350
(18,479)
(13,585)
(164)
(5,061)
(37,289)
Thousands of
U.S. dollars
2010
$ 474,813
122,332
75,204
43,671
43,580
35,977
30,674
28,855
17,595
14,297
13,940
12,328
8,847
6,978
99,649
1,028,740
(197,166)
831,574
(292,106)
(143,178)
(1,607)
(62,521)
(499,412)
Net deferred tax assets
¥ 30,891
¥ 43,061
$ 332,162
Net deferred tax assets (liabilities) at March 31, 2010 and 2009, were included in the following entries on the consolidated balance sheets.
Current assets—Deferred tax assets
Non-current assets—Deferred tax assets
Current liabilities—Deferred tax liabilities
Non-current liabilities—Deferred tax liabilities
Millions of yen
2010
¥ 23,106
15,383
—
(7,597)
2009
¥ 18,444
28,874
—
(4,257)
Thousands of
U.S. dollars
2010
$ 248,448
165,406
—
(81,692)
Reconciliation of the differences between the statutory tax rate and the effective income tax rate for the year ended March 31, 2010
and 2009 was as follows:
Statutory tax rate
Increase (reduction) in taxes resulting from:
Non-deductible expenses and non-taxable income
Equalization of inhabitants taxes
Amortization of goodwill
Equity in earnings of unconsolidated subsidiaries and affiliates
Difference of tax rates for foreign subsidiaries
Valuation allowance
Unrealized profit
R&D expenses deductible from income taxes
Other
Effective income tax rate
2010
40.7%
4.0
1.0
0.4
(0.8)
1.5
7.2
(2.2)
(8.1)
0.8
44.5%
Statutory tax rate
Increase (reduction) in taxes resulting from:
Non-deductible expenses and non-taxable income
Equalization of inhabitants taxes
Amortization of goodwill
Equity in earnings of unconsolidated subsidiaries and affiliates
Difference of tax rates for foreign subsidiaries
Valuation allowance
Unrealized profit
Consolidated tax filing system
Other
Effective income tax rate
2009
40.7%
15.0
2.2
0.9
(2.4)
(5.5)
17.1
8.0
(3.8)
(0.3)
72.0%
64
Financial Section
15. Business combinations, etc.:
Transactions under common control, etc.
Transactions under common control, etc. in the fiscal year ended
March 31, 2010, were as follows:
(a) Establishment of Asahi Kasei E-materials Corp. through a
business split of electrochemicals-related operations of Asahi
Kasei Chemicals Corp. and Asahi Kasei Microdevices Corp.
i) Name and nature of business subject to transaction, statutory
form of business combination, name of company after
transaction, and outline and purpose of transaction
1) Name and nature of business subject to transaction
Name of business:
Electronics-related operations of the parent company
and of consolidated subsidiaries Asahi Kasei Chemicals
Corp. and Asahi Kasei Microdevices Corp.
Nature of business:
Production and sales of Hipore™ Li-ion rechargeable
battery separators, light diffusion plates, APR™
photopolymer and printing plate making systems, Pimel™
photosensitive polyimide precursor, Sunfort™ dry film
photoresist, glass fabric for printed wiring boards,
photomask pellicles, etc.
2) Statutory form of business combination
Establishment of Asahi Kasei E-materials Corp. by
business split of electrochemicals-related operations of
the parent company, Asahi Kasei Chemicals Corp., and
Asahi Kasei Microdevices Corp.
3) Name of company after transaction
Asahi Kasei E-materials Corp.
4) Outline and purpose of transaction
Asahi Kasei E-materials Corp. was established through a
business split of electrochemicals-related operations of
the parent company, Asahi Kasei Chemicals Corp., and
Asahi Kasei Microdevices Corp. in order to clarify those
operations as a field of focus for growth for the Asahi
Kasei Group and to facilitate greater management
efficiency in a structure for swift execution of strategic
decisions and resource investment.
ii) Outline of the accounting treatment implemented
This transaction was accounted for as a transaction under
common control based on the Accounting Standard for
Business Combinations issued by the Business Accounting
Council in Japan and the Accounting Standard for Business
Divestitures (Accounting Standard No. 7) and Guidance on
Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures (Accounting
Standard Guidance No. 10) issued by the Accounting
Standards Board of Japan.
(b) Business split of Leona™ filament business from Asahi Kasei
Chemicals Corp. to Asahi Kasei Fibers Corp.
i) Name and nature of business subject to transaction, statutory
form of business combination, name of company after
transaction, and outline and purpose of transaction
1) Name and nature of business subject to transaction
Name of business:
Leona™ filament business of consolidated subsidiary
Asahi Kasei Chemicals Corp.
Nature of business:
Production and sale of Leona™ nylon 66 filament
2) Statutory form of business combination
Business split from Asahi Kasei Chemicals Corp. to
Asahi Kasei Fibers Corp.
3) Name of company after transaction
Asahi Kasei Fibers Corp.
4) Outline and purpose of transaction
For the further expansion and development of the Leona™
filament business, it is essential to reinforce and accelerate
applications development based on advanced technical
know-how in the field of fibers. Asahi Kasei Fibers Corp.
holds the realignment of its business portfolio from apparel
to industrial-use materials as a pillar of mid-term
management strategy, and it can be expected that by
transferring the Leona™ filament business, which is
focused on industrial applications such as tire cord and air
bags, this portfolio realignment can be accelerated through
the pursuit of synergies with existing fiber business, in both
technology and marketing. The Leona™ filament business
of Asahi Kasei Chemicals Corp. was therefore split off to be
absorbed by Asahi Kasei Fibers Corp.
ii) Outline of the accounting treatment implemented
This transaction was accounted for as a transaction under
common control based on the Accounting Standard for
Business Combinations issued by the Business Accounting
Council in Japan and the Accounting Standard for Business
Divestitures (Accounting Standard No. 7) and Guidance on
Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures (Accounting
Standard Guidance No. 10) issued by the Accounting
Standards Board of Japan.
Asahi Kasei Annual Report 2010
65
16. Business segment information:
(a) Industry segments
Sales and operating income (loss) for the year ended March 31:
Millions of yen
2010
Sales:
Chemicals
Homes
Health Care
Fibers
Electronics
Services,
Engineering
and
Others
Construction
Materials
Combined
Corporate
expenses
and
eliminations
Consolidated
Customers
¥ 622,093
¥ 389,728
¥ 113,207
¥ 101,201
¥ 142,700 ¥ 47,024 ¥ 17,642 ¥ 1,433,595 ¥
— ¥ 1,433,595
Intersegment
Total
16,495
24
96
1,772
1,159
13,048
23,541
56,134
(56,134)
—
638,588
389,752
113,303
102,973
143,859
60,072
41,182
1,489,729
(56,134)
1,433,595
Operating expenses
612,520
364,412
109,304
105,737
136,616
58,870
39,360
1,426,820
(50,847)
1,375,973
Operating income (loss)
¥ 26,068
¥ 25,340
¥ 3,999
¥
(2,764)
¥ 7,243 ¥ 1,202 ¥ 1,822
¥
62,909 ¥ (5,287)
¥
57,622
Sales:
Chemicals
Homes
Pharma
Fibers
Millions of yen
2009
Electronics
Materials &
Devices
Construction
Materials
Services,
Engineering
and
Others
Combined
Corporate
expenses
and
eliminations
Consolidated
Customers
¥ 741,486
¥ 409,882
¥ 119,619
¥ 102,176
¥ 91,721 ¥ 60,927 ¥ 27,297 ¥ 1,553,108 ¥
— ¥ 1,553,108
Intersegment
15,728
71
11
1,990
654
12,676
32,567
63,697
(63,697)
—
Total
757,214
409,952
119,630
104,166
92,375
73,603
59,864
1,616,804
(63,697)
1,553,108
Operating expenses
757,632
388,082
107,590
105,027
89,030
71,919
54,237
1,573,519
(55,370)
1,518,148
Operating income (loss)
¥
(419)
¥ 21,871
¥ 12,040
¥
(861)
¥ 3,345 ¥ 1,683 ¥ 5,627 ¥
43,286 ¥ (8,326)
¥
34,959
Thousands of U.S. dollars
2010
Sales:
Chemicals
Homes
Health Care
Fibers
Electronics
Services,
Engineering
and
Others
Construction
Materials
Combined
Corporate
expenses
and
eliminations
Consolidated
Customers
$ 6,689,171 $ 4,190,629 $ 1,217,279 $ 1,088,180 $ 1,534,410 $ 505,637 $ 189,694 $ 15,414,999 $
— $ 15,414,999
Intersegment
Total
177,365
254
1,033
19,058
12,460
140,298
253,126
603,593
(603,593)
—
6,866,535
4,190,883
1,218,312
1,107,238
1,546,869
645,935
442,820
16,018,592
(603,593)
15,414,999
Operating expenses
6,586,239
3,918,410
1,175,307
1,136,959
1,468,993
633,014
423,227
15,342,149
(546,740)
14,795,409
Operating income (loss)
$ 280,296 $ 272,473 $
43,005 $
(29,721) $
77,876 $ 12,921 $ 19,593
676,444 $ (56,853)
619,590
Identifiable assets, depreciation and amortization, impairment loss and capital expenditure as of and for the year ended March 31:
Millions of yen
2010
Chemicals
Homes
Health Care
Fibers
Electronics
Services,
Engineering
and
Others
Construction
Materials
Combined
Corporate
expenses
and
eliminations
Consolidated
Identifiable assets
¥ 533,296
¥ 232,031
¥ 164,161
¥ 110,426
¥ 174,131 ¥ 39,981
¥ 395,449
¥ 1,649,475
¥ (280,583)
¥ 1,368,892
Depreciation and
amortization
32,416
4,309
12,191
7,719
23,594
3,263
799
Impairment loss
1,486
—
—
—
108
1,365
—
84,290
2,959
2,965
198
Capital expenditure
27,649
6,009
9,173
4,556
22,761
1,191
927
72,266
11,724
87,255
3,156
83,990
Millions of yen
2009
Chemicals
Homes
Pharma
Fibers
Electronics
Materials &
Devices
Construction
Materials
Services,
Engineering
and
Others
Combined
Corporate
assets
and
eliminations
Consolidated
Identifiable assets
¥ 583,614
¥ 216,716
¥ 176,699
¥ 107,781
¥ 115,154 ¥ 43,736
¥ 449,637
¥ 1,693,337
¥ (314,000)
¥ 1,379,337
Depreciation and
amortization
Impairment loss
36,666
3,439
10,275
6,440
15,428
3,619
806
—
—
112
264
79
754
—
76,673
1,208
2,763
—
79,436
1,208
Capital expenditure
45,667
7,037
31,569
12,257
21,557
2,430
1,082
121,598
5,127
126,725
66
Financial Section
Thousands of U.S. dollars
2010
Chemicals
Homes
Health Care
Fibers
Electronics
Services,
Engineering
and
Others
Construction
Materials
Combined
Corporate
expenses
and
eliminations
Consolidated
Identifiable assets
$ 5,734,366 $ 2,494,959 $ 1,765,171 $ 1,187,381 $ 1,872,378 $ 429,901 $ 4,252,135 $ 17,736,291 $ (3,017,018) $ 14,719,273
Depreciation and
amortization
348,558
46,338
131,089
83,000
253,695
35,083
8,586
906,349
31,881
938,230
Impairment loss
15,977
—
—
—
1,160
14,675
—
31,812
2,128
33,940
Capital expenditure
297,305
64,614
98,635
48,986
244,744
12,803
9,972
777,057 126,063
903,120
Notes: 1. The following segment names have been revised on April 1, 2009 for greater clarity and correspondence with the fields of businesses under operation.
Previously
Electronics Materials & Devices segment
Pharma segment
2. The Company’s industry segments are aggregated into seven segments based primarily upon similarities of products, services, and economic characteristics.
Chemicals—
The Company produces, processes and sells chemicals and derivative products (such as ammonia, nitric acid, caustic soda, acrylonitrile, styrene monomer, methyl
Changed to
Electronics segment
Health Care segment
methacrylate (MMA) monomer, PMMA resin, and adipic acid), polymer products (such as Suntec™ polyethylene (PE), Stylac™-AS (styrene-acrylonitrile), Stylac™-ABS
(acrylonitrile-butadiene-styrene), synthetic rubber, Tenac™ polyacetal, Xyron™ modified polyphenylene ether (mPPE), Leona™ nylon 66 polymer, and polystyrene),
specialty products (such as coating materials, latex, Ceolus™ microcrystalline cellulose, explosives, explosion-bonded metal clad, Microza™ UF and MF membranes
and systems, ion-exchange membranes and electrolysis systems, Saran Wrap™ cling film, Ziploc™ storage bags, and plastic films, sheets, and foams).
Homes—
The Company builds Hebel Haus™ custom-built pre-fabricated homes and Hebel Maison™ apartments, and operates related businesses such as condominiums,
remodeling, real estate, residential land development, and home financing.
Health Care—
The Company produces and sells pharmaceuticals (such as Elcitonin™, Bredinin™, Flivas™, and Toledomin™), pharmaceutical intermediates, and diagnostics reagents.
The Company also manufactures APS™ artificial kidneys, Sepacell™ leukocyte reduction filters, Cellsorba™ leukocyte adsorption columns, Planova™ virus removal
filters, and contact lenses.
Fibers—
The Company produces and sells Roica™ elastic polyurethane filament, nonwoven fabrics (such as Eltas™ spunbond and Lamous™ artificial suede), Leona™ nylon 66
filament , Bemberg™ cuprammonium rayon, and polyester filament.
Electronics—
The Company produces and sells Hipore™ microporous membrane, APR™ photosensitive resin and printing plate making systems, Pimel™ photosensitive polyimide,
Sunfort™ dry-film photoresist (DF), photomask pellicles, LSIs, Hall elements, and glass fabric.
Construction Materials—
The Company produces and sells autoclaved aerated concrete (AAC) panels (such as Hebel™), piles, and Neoma™ foam insulation panels.
Services, Engineering and Others—
The Company provides plant engineering, environmental engineering, personnel staffing and placement, and think tank services.
3. Corporate operating expenses included in “Corporate expenses and eliminations” for the years ended March 31, 2010 and 2009, amounted to ¥13,831 million
(US$148,718 thousand) and ¥14,726 million, respectively.
4. Corporate assets such as surplus funds (cash and deposits), long-term-investment funds (investment securities etc.), and land etc. included in “Corporate assets and
eliminations” for the years ended March 31, 2010 and 2009, amounted to ¥404,144 million (US$4,345,636 thousand) and ¥457,979 million, respectively.
5. Among impairment losses for the year ended March 31, 2010, ¥955 million (US$10,269 thousand) in Chemicals and ¥1,365 million (US$14,675 thousand) in
Construction Materials, and for the year ended March 31, 2009, ¥112 million in Pharma and ¥754 million in Construction Materials, are included in business structure
improvement expenses under extraordinary losses.
6. The electronic materials operations of Asahi Kasei Corp., Asahi Kasei Chemicals, and Asahi Kasei EMD (renamed Asahi Kasei Microdevices on April 1, 2009) were
transferred to Asahi Kasei E-materials on April 1, 2009. In consideration of the similarity of product types and characteristics to those of electronics operations, the
operations of Asahi Kasei E-materials are reported in the Electronics segment. For comparison purposes, results for the previous year have been revised to reflect the
transfer of the corresponding operations from the Chemicals segment and Corporate Expenses to the Electronics segment. The Leona™ nylon 66 filament business
of Asahi Kasei Chemicals was transferred to Asahi Kasei Fibers on April 1, 2009. For comparison purposes, results for the previous year in the Chemicals and Fibers
segments have been revised to reflect this transfer.
Millions of yen
2009
Sales:
Chemicals
Homes
Health Care
Fibers
Electronics
Services,
Engineering
and
Others
Construction
Materials
Combined
Corporate
expenses
and
eliminations
Consolidated
Customers
¥ 689,323 ¥ 409,882 ¥ 119,619 ¥ 116,405 ¥ 129,655 ¥ 60,927 ¥ 27,297 ¥ 1,553,108 ¥
— ¥ 1,553,108
Intersegment
19,927
71
11
1,904
469
12,676
32,567
67,625
(67,625)
—
Total
709,250
409,952
119,630
118,309
130,124
73,603
59,864
1,620,732
(67,625)
1,553,108
Operating expenses
715,779
388,082
107,590
119,818
122,838
71,919
54,237
1,580,264
(62,116)
1,518,148
Operating income (loss)
¥
(6,529)
¥ 21,871 ¥ 12,040 ¥
(1,509)
¥ 7,286 ¥ 1,683 ¥ 5,627 ¥
40,469 ¥ (5,509) ¥
34,959
Asahi Kasei Annual Report 2010
67
Millions of yen
2009
Chemicals
Homes
Health Care
Fibers
Electronics
Services,
Engineering
and
Others
Construction
Materials
Combined
Corporate
assets
and
eliminations
Consolidated
Identifiable assets
¥ 531,724 ¥ 216,716 ¥ 176,699 ¥ 119,889 ¥ 157,551 ¥ 43,736 ¥ 449,637 ¥ 1,695,952 ¥ (316,615) ¥ 1,379,337
Depreciation and
amortization
Impairment loss
32,245
3,439
10,275
7,156
19,828
3,619
806
77,367
2,069
—
—
112
264
79
754
—
1,208
—
79,436
1,208
Capital expenditure
36,335
7,037
31,569
12,404
31,811
2,430
1,082
122,667
4,058
126,725
Note: Corporate operating expenses included in "Corporate expenses and eliminations" for the year ended March 31, 2009, amounted to ¥11,908 million.
Corporate assets such as surplus funds (cash and deposits), long-term-investment funds (investment securities etc.), and land etc. included in "Corporate assets and eliminations" for the
year ended March 31, 2009 amounted to ¥455,318 million.
(b) Geographic areas
Total sales and assets of consolidated subsidiaries located in countries or regions outside of Japan as of and for the years ended March
31, 2010 and 2009, were not significant.
(c) Overseas sales
Overseas sales for the years ended March 31, 2010 and 2009, were as follows:
Millions of yen
Thousands of U.S. dollars
2010
2009
East Asia
Others
Total
East Asia
Others
Total
East Asia
2010
Others
Total
Overseas sales
¥237,271 ¥133,138 ¥ 370,409 ¥233,219 ¥160,746 ¥ 393,965 $2,551,301 $1,431,589 $ 3,982,890
—
— 1,433,595
Consolidated net sales
Percentage of consolidated
net sales (%)
Notes: 1. Geographical distance is considered in the classification of country or area.
2. Major countries or areas included in each category are as follows;
East Asia: China, Korea, and Taiwan
Others: Southeast Asia (except East Asia), U.S.A., Europe, and others.
3. Overseas sales represent the sales of the Company to countries and areas outside of Japan.
16.6%
25.8%
9.3%
15.0%
—
— 1,553,108
—
— 15,414,999
10.3%
25.4%
17. Reconciliation of the differences between basic and diluted net income per share:
Reconciliation of the differences between basic and diluted net income per share for the years ended March 31, 2010 and 2009, was as
follows:
Basic net assets per share
Basic net income per share
(a) Net assets per share
Total net assets
Amount deducted from total net assets
Of which, minority interest
Net assets allocated to capital stock
Yen
U.S. dollars
2010
¥ 452.91
¥ 18.08
2009
¥ 431.77
¥ 3.39
2010
$4.87
$0.19
Millions of yen
2010
2009
Thousands of
U.S. dollars
2010
¥ 644,688
¥ 611,351
$ 6,932,131
11,346
11,346
7,504
7,504
121,997
121,997
¥ 633,343
¥ 603,846
$ 6,810,134
Number of shares of capital stock outstanding at fiscal year end used in calculation
of net assets per share (thousand)
1,398,388
1,398,546
1,398,388
(b) Net income per share
Net income
Amount not allocated to capital stock
Net income allocated to capital stock
Millions of yen
2010
2009
Thousands of
U.S. dollars
2010
¥
25,286
¥
4,745
$ 271,897
—
—
—
¥
25,286
¥
4,745
$ 271,897
Weighted-average number of shares of capital stock (thousand)
1,398,463
1,398,428
1,398,463
As the Company had no dilutive securities at March 31, 2010 and 2009, the Company does not disclose diluted net income for the
years ended March 31, 2010 and 2009.
68
Financial Section
18. Borrowings:
(a) Bonds payable at March 31, 2010 and 2009, comprised the following:
Unsecured 1.02% yen bonds due to 2009
Unsecured 1.46% yen bonds due to 2019
Unsecured 1.90% Euro yen bonds due to 2013
Notes: 1. Current portion of bonds payable is recorded under current liabilities on the consolidated balance sheets.
2. In the case of floating interest rates, the rate at the end of March is shown.
3. The aggregate annual maturities of long-term debt after March 31, 2010, are as follows:
Year ending March 31
2011
2012
2013
2014
2015 and thereafter
(b) Loans payable at March 31, 2010 and 2009, are comprised of the following:
Millions of yen
2010
¥ —
20,000
5,000
¥ 25,000
2009
¥ 20,000
—
5,000
¥ 25,000
Millions of yen
¥ —
—
—
5,000
20,000
¥ 25,000
Millions of yen
Short-term loans payable with interest rate 0.84%
Current portion of long-term loans payable with interest rate 1.31%
Current portion of lease obligations with interest rate 2.61%
2010
¥ 77,763
16,199
1,123
Long-term loans payable (except portion due within one year) with interest rate 1.18%
121,921
Lease obligations (except portion due within one year) with interest rate 2.68%
Commercial papers with interest rate 0.11%
3,593
19,000
2009
¥ 78,373
22,413
489
132,474
1,845
55,000
Notes: 1. Interest rates shown are weighted average interest rates for the balance outstanding at the end of March.
2. The aggregate annual maturities of Long-term loans payable and lease obligations (except portion due within one year) after March 31, 2010, are as follows:
¥ 239,600
¥ 290,594
Thousands of
U.S. dollars
2010
$ 53,763
215,054
53,763
$ 268,817
Thousands of
U.S. dollars
$
—
—
—
53,763
215,054
$ 268,817
Thousands of
U.S. dollars
2010
$ 836,162
174,186
12,080
1,310,982
38,631
204,301
$ 2,576,341
Year ending March 31
2012
2013
2014
2015 and thereafter
Long-term loans payable
Lease obligations
Millions of yen
¥ 28,256
30,192
23,646
3,720
Thousands of
U.S. dollars
$ 308,823
324,650
254,257
40,005
Millions of yen
¥ 1,160
1,181
983
266
Thousands of
U.S. dollars
$ 12,477
12,695
10,571
2,855
3. The timing of repayments for the loan payables from Japan Science and Technology Agency have yet to be determined as they begin after the development success is certified.
Thus, the related aggregate annual maturities for these long-term loans payable after March 31, 2010 are not included in the above.
Loan Payables from Japan Science and Technology Agency are excluded in the presentation of maturity and repayment as its repayment term is uncertain that repayment begins after
the day of development success.
Asahi Kasei Annual Report 2010
69
70
Major Subsidiaries and Affiliates
As of April 1, 2010
Company
Main products/business line
Paid-in capital
(million)
Equity
interest (%)
Chemicals Segment
Asahi Kasei Chemicals Corp.*
Sanyo Petrochemical Co., Ltd.*
Asahi Kasei Pax Corp.*
Asahi Kasei Home Products Corp.*
Asahi Kasei Metals Ltd.
Asahi Kasei Finechem Co., Ltd.*
Asahi Kasei Geotechnologies Co., Ltd.
Asahi SKB Co., Ltd.
Asahi Kasei Clean Chemical Co., Ltd.
Asahi Kasei Technoplus Co., Ltd.*
Japan Elastomer Co., Ltd.*
Sundic Inc.
Wacker Asahikasei Silicone Co., Ltd.
Okayama Chemical Co., Ltd.
Kayaku Japan Co., Ltd.
PS Japan Corp.*
Asahikasei Plastics (America) Inc.*
Asahi Kasei Plastics North America, Inc.*
Sun Plastech Inc.*
Tong Suh Petrochemical Corp., Ltd.*
Asahi Kasei Chemicals Korea Co., Ltd.
Asahikasei Plastics (Shanghai) Co., Ltd.
Asahikasei (Suzhou) Plastics Compound Co., Ltd.
Asahi-DuPont POM (Zhangjiagang) Co., Ltd.
Asahi Kasei Performance Chemicals Corp.*
Asahi Kasei Microza (Hangzhou) Co., Ltd.*
Asahi Kasei Plastics (Hong Kong) Co., Ltd.
Asahi Kasei Plastics Singapore Pte. Ltd.*
Polyxylenol Singapore Pte. Ltd.*
PTT Asahi Chemical Co., Ltd.
Asahikasei Plastics (Thailand) Co., Ltd.
PT Nippisun Indonesia
Asahi Kasei Plastics Europe SA/NV*
Homes Segment
Asahi Kasei Homes Corp.*
Asahi Kasei Jyuko Co., Ltd.*
Asahi Kasei Mortgage Corp.*
Asahi Kasei Reform Co., Ltd.*
Asahi Kasei Real Estate, Ltd.*
Asahi Kasei Home Construction Corp.
Health Care Segment
Asahi Kasei Pharma Corp.*
Asahi Kasei Kuraray Medical Co., Ltd.*
Asahi Kasei Medical Co., Ltd.*
Asahikasei Aime Co., Ltd.*
Med-Tech Inc.*
Asahi Kasei Bioprocess, Inc.*
Asahi Kasei Medical America Inc.
Asahi Kasei Medical Trading (Korea) Co., Ltd.*
Asahi Kasei Medical (Hangzhou) Co., Ltd.*
Asahi Kasei Medical Trading (Hangzhou) Co., Ltd.*
* Consolidated subsidiary
** Including capital reserve
Chemicals
Benzene, ethylene
Packaging products and solutions
Cling film, other household products
Aluminum paste
Specialty chemicals
Sale of civil engineering materials
Shotgun cartridges
Water treatment equipment, environmental chemicals
Processing of plastic and fiber
Synthetic rubber
Biaxially oriented polystyrene sheet
Silicone
Caustic soda, chlorine
Industrial explosives
Polystyrene
Compounded performance resin operations
Coloring and compounding of performance resin
Sale of purging compound
Acrylonitrile, sodium cyanide
Sale of adipic acid
Sale of performance resin
Coloring and compounding of performance resin
Polyacetal
High-performance HDI-based polyisocyanate
Industrial membranes and systems
Sale of performance resin
Performance resin
PPE powder
Acrylonitrile, methyl methacrylate
Coloring and compounding of performance resin
Coloring and compounding of styrenic resin
Sale of compounded performance resin
3,000
2,000
490
250
250
175
132
100
100
160
1,000
1,050
1,050
1,000
60
5,000
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
US$
US$
US$
1.0
W 50,642
1,500
W
18
CNY
50
CNY
32.0
US$
149
CNY
49
CNY
2.6
US$
46.0
US$
35.0
US$
12,400
B
140
B
6.3
US$
A
5.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.4
75.0
50.0
50.0
50.0
50.0
62.1
17.8** 100.0
21.7** 100.0
100.0
100.0
100.0
100.0
51.0
50.0
100.0
100.0
100.0
100.0
70.0
48.5
100.0
25.7
100.0
Housing
Steel frames
Financial services
Home maintenance and remodeling
Home leasing, real estate brokerage
Construction of homes
Pharmaceuticals
Hemodialyzers, therapeutic apheresis devices
Medical devices, medical systems
Contact lenses
Medical devices
Bioprocess equipment and systems
Sale of medical devices, medical systems
Sale of medical devices, medical systems
Hemodialyzers
Sale of hemodialyzers
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
US$
US$
W
CNY
CNY
3,250
2,820
1,000
250
200
100
3,000
800
200
480
140
30.0
0.5
1,000
163
2.4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
93.0
100.0
100.0
68.3
100.0
93.0
100.0
93.0
100.0
Asahi Kasei Annual Report 2010
71
Company
Main products/business line
Asahi Kasei Medical Trading (Taiwan) Co. Ltd.*
Asahi Kasei Medical Europe GmbH*
Sale of medical devices, medical systems
Sale of medical devices, medical systems
Asahi Kasei Planova Europe SA/NV*
(renamed Asahi Kasei Bioprocess Europe SA/NV on July 1, 2010)
Sale of virus removal filters
Asahi Pharma Spain, SL
Fibers Segment
Asahi Kasei Fibers Corp.*
Kyokuyo Sangyo Co., Ltd.*
Pharmaceuticals
Fiber, textiles
Processing of fiber, textiles
DuPont-Asahi Flash Spun Products Co., Ltd.
Flash spun
Asahi Kasei Spandex America, Inc.*
Hangzhou Asahikasei Spandex Co., Ltd.*
Spandex
Spandex
Hangzhou Asahikasei Textiles Co., Ltd.*
Warp-knit spandex textiles
Formosa Asahi Spandex Co., Ltd.
Spandex
Asahi Chemical (HK) Ltd.*
Promotion and marketing of fiber and textiles
Thai Asahi Kasei Spandex Co., Ltd.*
Asahi Kasei Spandex Europe GmbH*
Spandex
Spandex
Asahi Kasei Fibers Italy SRL*
Sale of spandex and cupro cellulosic fiber
Asahi Kasei Fibers Deutschland GmbH
Sale of artficial suede
Electronics Segment
Asahi Kasei Microdevices Corp.*
Asahi Kasei E-materials Corp.*
Asahi Kasei Epoxy Co., Ltd.*
Asahi Kasei Microsystems Co., Ltd.*
Asahi-Schwebel Co., Ltd.*
Asahi Kasei Electronics Co., Ltd.*
Electronic devices
Electronic materials
Epoxy resin
LSIs
Glass fabric
Hall elements
Asahi Kasei Toko Power Devices Corp.*
Power management semiconductors
AKM Semiconductor, Inc.*
Sale of LSIs
Asahi Kasei Microdevices Korea Corp.
Marketing of electronic devices
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.*
Dry film photoresist
Asahi Kasei Microdevices (Shanghai) Co., Ltd.
Marketing of electronic devices
Asahi Kasei Microdevices Taiwan Corp.
Marketing of electronic devices
Asahi Kasei EMD Taiwan Corp.
Asahi Kasei Wah Lee Hi-Tech Corp.*
Asahi-Schwebel (Taiwan) Co., Ltd.*
Sale of pellicles
Dry film photoresist
Glass fabric
Asahi Kasei Microdevices Europe SAS
Marketing of electronic devices
Asahi Photoproducts (Europe) SA/NV*
Sale of photopolymer, printing plate making systems
Asahi Photoproducts (UK) Ltd.*
Sale of photopolymer, printing plate making systems
Construction Materials Segment
Asahi Kasei Construction Materials Corp.*
Construction materials
Asahi Kasei Foundation Systems Corp.*
Installation of piles
Asahi Kasei Extech Corp.*
Exterior wall panel installation
Others (formerly Services, Engineering and Others segment)
Asahi Research Center Co., Ltd.*
Information and analysis
Asahi Kasei Engineering Co., Ltd.*
Plant, equipment, process engineering
Asahi Kasei Trading Co., Ltd.*
Sun Trading Co., Ltd.*
Asahi Kasei Amidas Co., Ltd.*
AJS Inc.
Sale of Asahi Kasei products
Sale of Asahi Kasei products
Employment agency, consulting
Computer software, IT systems
Asahi Organic Chemicals Industry Co., Ltd.
Synthetic resin, fabricated plastic products
Asahi Kasei America, Inc.*
Business support services
Asahi Kasei Business Management (Shanghai) Co., Ltd. Business support services
* Consolidated subsidiary
** Including capital reserve
Paid-in capital
(million)
Equity
interest (%)
NT$
A
A
A
¥
¥
¥
US$
CNY
CNY
NT$
HK$
B
A
A
A
¥
¥
¥
¥
¥
¥
¥
US$
W
CNY
CNY
NT$
NT$
NT$
NT$
A
A
£
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
US$
US$
5
0.2
0.5
100.0
93.0
100.0
0.1
100.0
3,000
80
450
100.0
100.0
50.0
32.3** 100.0
132
78
802
65
1,350
100.0
82.5
50.0
100.0
60.0
19.6** 100.0
3.0
0.3
100.0
100.0
3,000
3,000
300
50
50
50
100
2.9
820
181
14
10
1
49
326
0.4
3.4
0.3
3,000
200
50
1,000
400
98
94
80
800
5,000
0.1
3.0
100.0
100.0
100.0
100.0
100.0
100.0
80.0
100.0
100.0
100.0
100.0
100.0
100.0
80.6
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
49.0
30.1
100.0
100.0
72
Corporate Profile
As of March 31, 2010
Company Name
Asahi Kasei Corporation
Date of Establishment
May 21, 1931
Paid-in Capital
¥103,388,521,767
Employees
25,085 (consolidated)
780 (non-consolidated)
Asahi Kasei Group Offices
Asahi Kasei Corporation
Core Operating Companies
Tokyo Head Office
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3000
Fax: +81-3-3296-3161
Osaka Head Office
3-3-23 Nakanoshima, Kita-ku
Osaka 530-8205 Japan
Phone: +81-6-7636-3111
Fax: +81-6-7636-3077
Beijing Office
Room 1407
New China Insurance Tower
No.12 Jian Guo Men Wai Avenue
Chao Yang District
Beijing 100022 China
Phone: +86-10-6569-3939
Fax: +86-10-6569-3938
Asahi Kasei Business Management
(Shanghai) Co., Ltd.
Room 2321
Shanghai Central Plaza
381 Huaihai Zhong Road
Shanghai 200020 China
Phone: +86-21-6391-6111
Fax: +86-21-6391-6686
Asahi Kasei America, Inc.
535 Madison Avenue, 33rd Floor
New York, NY 10022 USA
Phone: +1-212-371-9900
Fax: +1-212-371-9050
Asahi Kasei Chemicals
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3200
Asahi Kasei Homes
1-24-1 Nishi-shinjuku, Shinjuku-ku
Tokyo 160-8345 Japan
Phone: +81-3-3344-7111
Asahi Kasei Pharma
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3600
Asahi Kasei Kuraray Medical
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3750
Asahi Kasei Medical
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3750
Asahi Kasei Fibers
3-3-23 Nakanoshima, Kita-ku
Osaka 530-8205 Japan
Phone: +81-6-7636-3500
Asahi Kasei Microdevices
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3911
Asahi Kasei E-materials
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3939
Asahi Kasei Construction Materials
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3500
Asahi Kasei Annual Report 2010
73
Investors Information
As of March 31, 2010
Stock Listings
Stock Code
Tokyo, Osaka, Nagoya, Fukuoka, Sapporo
3407
Authorized Shares
4,000,000,000
Outstanding Shares
1,402,616,332
Transfer Agent
Sumitomo Trust & Banking Co., Ltd.
4-5-33 Kitahama, Chuo-ku
Osaka 541-8639 Japan
Independent Auditors
PricewaterhouseCoopers Aarata
Number of Shareholders
129,231
Largest Shareholders
% of equity*
Master Trust Bank of Japan, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. (trust account)
Nippon Life Insurance Co.
Employees’ Stockholding
Sumitomo Mitsui Banking Corp.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Japan Trustee Services Bank, Ltd. (trust account 9)
Meiji Yasuda Life Insurance Co.
Mizuho Corporate Bank, Ltd.
Sumitomo Life Insurance Co.
* Percentage of equity ownership after exclusion of treasury stock.
6.78
5.65
5.22
3.11
2.53
2.22
1.81
1.49
1.45
1.40
Distribution by Type of Shareholder
Distribution by Number of Shares Held
Japanese financial institutions
48.28%
Foreign investors
22.40%
100,000 or more
79.42%
Japanese individuals and groups
23.64%
Japanese securities companies
1.27%
10,000–99,999
1,000–9,999
7.11%
13.08%
Other Japanese companies
4.41%
Less than 1,000
0.39%
In this annual report, the TM symbol indicates a trademark or registered trademark of Asahi Kasei Corporation,
affiliated companies, or third parties granting rights to Asahi Kasei Corporation or affiliated companies.
A
S
A
H
I
K
A
S
E
I
C
O
R
P
O
R
A
T
O
N
I
A
n
n
u
A
l
R
e
P
o
R
t
2
0
1
0
1-105 Kanda Jinbocho, Chiyoda-ku, tokyo 101-8101 Japan
www.asahi-kasei.co.jp
Corporate Communications
tel: +81-3-3296-3008, Fax: +81-3-3296-3162
Printed in Japan
2010.09