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TronoxA s a h i K a s e i R e p o r t 2 0 1 4 Asahi Kasei Report 2014 Creating for Tomorrow 2014旭化成_e表紙_1002入稿校了.indd 2 2014旭化成_e表紙_1002入稿校了.indd 2 2014/10/20 8:41 2014/10/20 8:41 Group Mission We, the Asahi Kasei Group, contribute to life and living for people around the world. Group Vision Providing new value to society by enabling “living in health and comfort” and “harmony with the natural environment.” Group Values Sincerity—Being sincere with everyone. Challenge—Boldly taking challenges, continuously seeking change. Creativity—Creating new value through unity and synergy. Group Slogan Creating for Tomorrow *2014旭化成_e本文_1002入稿校了.indd C2 *2014旭化成_e本文_1002入稿校了.indd C2 2014/10/20 8:39 2014/10/20 8:39 Editorial policy Contents For greater ease of understanding among our stakeholders, beginning in fi scal 2014 we are integrating information regarding our business strategy and fi nancial performance, which had been published in our Annual Report, with information regarding our CSR activities, which had been published in our CSR Report, in a single Asahi Kasei Report. We hope that this report will help you gain a clear perception of the Asahi Kasei Group’s efforts toward sustainability in society in addition to our management strategy, business conditions, and management confi guration. We will continue to strive for clear and appropriate information disclosure that facilitates communication with our stakeholders. Period under review The period under review is fi scal 2013 (April 2013 – March 2014). Some qualitative information pertaining to April to July 2014 has also been included. Organizational scope The scope of the report is Asahi Kasei Corp. and its consolidated subsidiaries, except with respect to Responsible Care, in which case the scope is operations in Japan that implement Asahi Kasei Group’s Responsible Care program. Asahi Kasei has nine core operating companies, with seven operating segments in fi scal 2013 corresponding to our main fi elds of business and an “others” category for the remainder of operations. Unless otherwise specifi ed, the titles and positions of corporate offi cers and other personnel as shown in this report are current as of September 2014. Guidelines consulted The Global Reporting Initiative’s Sustainability Reporting Guidelines 3.1, ISO 26000, and other guidelines were consulted during the preparation of this report. Disclaimer The forecasts and estimates shown in this report are dependent on a variety of assumptions and economic conditions. Plans and fi gures depicting the future do not imply a guarantee of actual outcome. 2 3 4 8 9 To our Stakeholders Asahi Kasei Group Management and CSR Feature 1 Challenge and Creativity to Produce Value for Society Consolidated Performance Indexes Interview with the President 16 Enhanced Sector Management and Business Expansion through Combined Strength 17 At a Glance 18 Operating Segments 18 Chemicals 20 Fibers 22 Homes 32 34 38 40 48 50 54 55 24 Construction Materials 26 Electronics 28 Health Care 30 Critical Care Research & Development Feature 2: Roundtable discussion Achieving Results through Synergy Respect for Employee Individuality Responsible Care Corporate Citizenship Corporate Governance Directors, Corporate Auditors, Executive Offi cers Financial Section 56 Consolidated Eleven-Year Summary 58 Management’s Discussion and Analysis 64 Risk Analysis 66 Consolidated Financial Statements 72 Notes to Consolidated Financial Statements 96 Major Subsidiaries and Affi liates 98 99 Company Information Investors Information *2014旭化成_e本文_1002入稿校了.indd 1 *2014旭化成_e本文_1002入稿校了.indd 1 2014/10/20 8:39 2014/10/20 8:39 Asahi Kasei Report 2014 1 To Our Stakeholders Thank you for reading the Asahi Kasei Report 2014. In consider our business activities themselves to be the ultimate accordance with our Group Mission of contributing to life expression of our corporate social responsibility, which we and living for people around the world, and our Group Vision advance through a two-pronged effort of CSR Fundamentals of enabling living in health and comfort and harmony with that support our operations and CSR in Action that is the natural environment, we continue to increase corporate manifested through our operations. Beginning this year we value through our diverse business operations. integrated the description of our management strategy, The Asahi Kasei Group is now executing “For Tomorrow business operations, and fi nancial performance, which had 2015,” a fi ve-year strategic management initiative ending in been published in our Annual Report, with the description of fi scal 2015, to expand and grow in our four business sectors our CSR activities, which had been published in our CSR of Chemicals & Fibers, Homes & Construction Materials, Report, in a single Asahi Kasei Report for greater ease of Electronics, and Health Care. In fi scal 2014 we enhanced our understanding by our various stakeholders. governance confi guration to have a Representative Director Although our operating climate continues to change of the holding company with responsibility for each of the dramatically, we will continue to grow by acting with business sectors. This not only enables swifter decision- sincerity, taking challenges, and creating new value with our making in each sector, but also facilitates deeper synergy Group Mission and Group Vision as our unchanging guide. among the sectors with a greater sense of unity in management. Under the new confi guration, we are aiming September 2014 for even greater earnings growth as we complete our current plans, while accelerating innovation and preparing our next steps beginning in fi scal 2016. The Asahi Kasei Group is committed to contributing to the sustainability of society by creating new products and services that benefi t life and living for people around the world, continuously increasing corporate value, and providing solutions to various environmental and social challenges. We Toshio Asano President 2 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 2 *2014旭化成_e本文_1002入稿校了.indd 2 2014/10/20 8:39 2014/10/20 8:39 Asahi Kasei Group Management and CSR We believe that corporate social responsibility (CSR) is achieved by addressing a wide range of social challenges through the advancement of our diversifi ed businesses based on our Group Mission of contributing to life and living for people around the world. Under our “For Tomorrow 2015” management initiative, we are now expanding operations that provide new value to society by enabling living in health and comfort and harmony with the natural environment in accordance with our Group Vision. Living in health and comfort Creating for Tomorrow The community Community outreach The employee Employee fulfillment The environment Environmental protection The customer Customer satisfaction Sustainable Increase in Corporate Value The supplier Fair business dealings The local economy Local economic participation The shareholder Shareholder returns Business operations Expansion of world-leading businesses “For Tomorrow 2015” strategic management initiative CSR in Action Creation of new value for society CSR Fundamentals Compliance, Responsible Care, Corporate Citizenship, Respect for Employee Individuality Group Mission Contributing to life and living for people around the world Harmony with the natural environment CSR Fundamentals CSR in Action Based on a clear understanding of the effects of our operations on the global environment and local communities, our efforts and actions related to CSR are focused on four CSR Fundamentals: Compliance, Responsible Care, Corporate Citizenship, and Respect for Employee Individuality. We believe that CSR is achieved by raising corporate value for our various stakeholders through our business operations in accordance with our Group Mission of contributing to life and living for people around the world. Structure and organization for CSR In April 2014, we simplifi ed our structure by eliminating the CSR Council as the overarching organ for the committees under our CSR framework. Under the direct supervision of the holding company President, each committee now functions more effi ciently and decisively. We also limited the framework to cross- organizational activities. Although the Market Compliance Committee and Export Control Committee have as a result been removed from the diagram at right, they continue to perform their functions in the ordinary course of duties at relevant organizations. President of holding company Corporate Ethics Committee (cid:115)(cid:0)(cid:48)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:34)(cid:65)(cid:83)(cid:73)(cid:67)(cid:0)(cid:48)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:35)(cid:79)(cid:68)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0)(cid:35)(cid:79)(cid:78)(cid:68)(cid:85)(cid:67)(cid:84)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:67)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:69)(cid:84)(cid:72)(cid:73)(cid:67)(cid:83) (cid:115)(cid:0)(cid:33)(cid:68)(cid:86)(cid:65)(cid:78)(cid:67)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:69)(cid:84)(cid:72)(cid:73)(cid:67)(cid:83)(cid:0)(cid:69)(cid:68)(cid:85)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:72)(cid:79)(cid:84)(cid:76)(cid:73)(cid:78)(cid:69) Responsible Care Committee (cid:115)(cid:0)(cid:36)(cid:69)(cid:76)(cid:73)(cid:66)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:82)(cid:69)(cid:83)(cid:85)(cid:76)(cid:84)(cid:83)(cid:0)(cid:73)(cid:78)(cid:0)(cid:82)(cid:69)(cid:71)(cid:65)(cid:82)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:69)(cid:78)(cid:86)(cid:73)(cid:82)(cid:79)(cid:78)(cid:77)(cid:69)(cid:78)(cid:84)(cid:65)(cid:76)(cid:0)(cid:80)(cid:82)(cid:79)(cid:84)(cid:69)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:0) (cid:0)(cid:0)(cid:0)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:0)(cid:83)(cid:65)(cid:70)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:65)(cid:76)(cid:0)(cid:83)(cid:65)(cid:70)(cid:69)(cid:84)(cid:89)(cid:12)(cid:0)(cid:69)(cid:84)(cid:67)(cid:14) Global Environment Committee (cid:115)(cid:0)(cid:36)(cid:69)(cid:76)(cid:73)(cid:66)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:65)(cid:68)(cid:79)(cid:80)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:71)(cid:82)(cid:79)(cid:85)(cid:80)(cid:13)(cid:87)(cid:73)(cid:68)(cid:69)(cid:0)(cid:77)(cid:69)(cid:65)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:69)(cid:82)(cid:0)(cid:71)(cid:76)(cid:79)(cid:66)(cid:65)(cid:76)(cid:0)(cid:87)(cid:65)(cid:82)(cid:77)(cid:73)(cid:78)(cid:71) Risk Management Committee (cid:115)(cid:0)(cid:38)(cid:79)(cid:82)(cid:77)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:77)(cid:69)(cid:65)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:0)(cid:84)(cid:79)(cid:0)(cid:82)(cid:69)(cid:83)(cid:80)(cid:79)(cid:78)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:65)(cid:67)(cid:84)(cid:85)(cid:65)(cid:76)(cid:0)(cid:79)(cid:82)(cid:0)(cid:80)(cid:79)(cid:84)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:0)(cid:67)(cid:82)(cid:73)(cid:83)(cid:69)(cid:83) Community Fellowship Committee (cid:115)(cid:0)(cid:38)(cid:79)(cid:82)(cid:77)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:89)(cid:12)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:83)(cid:12)(cid:0)(cid:65)(cid:78)(cid:68)(cid:0)(cid:67)(cid:79)(cid:85)(cid:82)(cid:83)(cid:69)(cid:83)(cid:0)(cid:79)(cid:70)(cid:0)(cid:65)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:73)(cid:78)(cid:0)(cid:82)(cid:69)(cid:71)(cid:65)(cid:82)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0)(cid:67)(cid:79)(cid:77)(cid:77)(cid:85)(cid:78)(cid:73)(cid:84)(cid:89)(cid:0) (cid:0)(cid:0)(cid:0)(cid:70)(cid:69)(cid:76)(cid:76)(cid:79)(cid:87)(cid:83)(cid:72)(cid:73)(cid:80)(cid:0)(cid:65)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) (as of July 1, 2014) Asahi Kasei Report 2014 3 *2014旭化成_e本文_1002入稿校了.indd 3 *2014旭化成_e本文_1002入稿校了.indd 3 2014/10/20 8:39 2014/10/20 8:39 Feature 1: Challenge and Creativity to Produce Value for Society Portfolio realignment meeting changing needs in every age The Asahi Kasei Group has consistently grown through proactive transformation of its business portfolio to meet the evolving needs of every age. We have constantly provided products and services that form solutions to various environmental and social challenges. As society undergoes further changes, we will continue to contribute to life and living for people around the world by Creating for Tomorrow. From 1922 Shitagau Noguchi Shitagau Noguchi, the founder of Asahi Kasei, succeeded in Japan’s fi rst industrial production of ammonia by chemical synthesis in Nobeoka, Miyazaki, in 1923 using technology licensed from Italy. The ammonia was used in the production of Bemberg™ regenerated cellulose fi ber, part of a diverse range of business operations that included chemical fertilizer and viscose rayon. As industry modernized and the economy of Japan achieved self-sustainable growth, our operations made important contributions to the stability of people’s lives. From 1950 In 1957 we began production of polystyrene, and in 1959 entered the synthetic fi ber business. These were followed by the three new businesses of nylon fi ber, synthetic rubber, and construction materials. In 1968 we began construction of a petrochemical complex in the Mizushima area of Kurashiki, Okayama, Japan, paving the way for our full- scale development of petrochemical operations. Our products during this period supported improvements in the quality of life during Japan’s high-growth period. From 1970 In 1972 we entered the homes business with the launch of the Hebel Haus™, and in 1974 we entered the medical device business with hollow-fi ber membrane artifi cial kidneys. Our entry to the electronics business began with our launch of Hall elements (magnetic sensors) in 1980 and start of LSI manufacture in 1987. Our products continued to help make life more comfortable and convenient as society’s needs diversifi ed. The fi rst Hebel Haus™ (Kamata model home park) Part of the ammonia plant completed in 1923 (Nobeoka, Miyazaki, Japan) Saran Wrap™ launched in Japan in 1960 Naphtha cracker (Kurashiki, Okayama, Japan) Hollow-fi ber membrane artifi cial kidneys LSIs The Bemberg™ plant which started operation in 1931 (Nobeoka, Miyazaki, Japan) Portfolio transformation Fiscal 1940 Net sales ¥56 million Fiscal 1960 Net sales ¥44.9 billion Fibers Chemicals Foods Fiscal 1980 Net sales ¥800.1 billion Fibers Chemicals Homes Construction Materials Foods and fermentation chemistry Backdrop in Japanese society and economy Establishing the basis for modern life Suffi ciency of daily necessities, improvement in quality of homes, development of public infrastructure (cid:129) Development of chemical industry and (cid:129) Post-war recovery and modernization of industry (cid:129) Stable economic growth modern agriculture (cid:129) Interbellum economic downturn and World War II 4 Asahi Kasei Report 2014 (cid:129) Period of high economic growth (cid:129) Economic bubble *2014旭化成_e本文_1002入稿校了.indd 4 *2014旭化成_e本文_1002入稿校了.indd 4 2014/10/20 8:39 2014/10/20 8:39 From 2010 In 2011 we launched our “For Tomorrow 2015” management initiative focused on the two business strategies of expanding world-leading businesses and creating new value for society. In 2012 we entered the acute critical care business by acquiring ZOLL Medical Corporation. We continue to proactively expand and develop operations. From 1990 In 1992 we acquired Toyo Jozo Co., Ltd. to reinforce pharmaceutical operations. From 1999, we executed a program to heighten selectivity and focus in operations, divesting our food business and closing some fi ber businesses, achieving selective diversifi cation. From 2000 onward, we also established many overseas operations, mainly in Asia, establishing the foundation for global management. We are Creating for Tomorrow, providing new value to society by enabling living in health and comfort and harmony with the natural environment Pharmaceutical products after the Toyo Jozo merger Propane-process acrylonitrile (AN) plant in Thailand Asahi Kasei Electronics Materials (Suzhou) Co., Ltd., a major manufacturing base for photosensitive dry fi lm The LifeVest™ wearable defi brillator Fiscal 2000 Net sales ¥1,269.4 billion Fiscal 2013 Net sales ¥1,897.8 billion Fibers Chemicals Homes Construction Materials Fibers Chemicals Homes Construction Materials Electronics Health Care Others Electronics Health Care Critical Care Others Increased comfort and convenience Heightened environmental consciousness (cid:129) Two decades of meager growth after collapse of bubble (cid:129) Changing values after the Great East Japan Earthquake (cid:129) Effect of global economic crisis (cid:129) Emergence from period of slow economic growth Asahi Kasei Report 2014 5 *2014旭化成_e本文_1002入稿校了.indd 5 *2014旭化成_e本文_1002入稿校了.indd 5 2014/10/20 8:40 2014/10/20 8:40 Feature 1: Challenge and Creativity to Produce Value for Society Continuing to create solutions to social challenges The Asahi Kasei Group continues to create new value for society by meeting needs in the three fi elds of the Environment & Energy, Residential Living, and Health Care. Providing value to society today Social challenge Asahi Kasei solution Environment & Energy • Global warming • Resources and energy Synthetic rubber Solution-polymerized styrene- butadiene rubber (S-SBR) for tires that provide greater fuel effi ciency while maintaining superior safety Hipore™ Lithium-ion battery separator that contributed to the spread of cell phones and other mobile electronics Neoma™ Phenolic foam insulation panels that provide the world’s highest level of thermal insulation performance S-SBR Hipore™ Residential Living • Declining birthrate and aging population • Diversifi cation of residential needs Hebel Haus™ “Long Life Homes” that enable long- term comfort with superior resistance to earthquakes and fi re Two-generation and three-story homes Various lifestyle proposals for comfort in urban living Hebel Haus™ Health Care • Meeting unmet medical needs • Therapy for the elderly Teribone™ Osteoporosis therapy that facilitates bone formation Teribone™ LifeVest™ The world’s fi rst wearable defi brillator 6 Asahi Kasei Report 2014 LifeVest™ *2014旭化成_e本文_1002入稿校了.indd 6 *2014旭化成_e本文_1002入稿校了.indd 6 2014/10/20 8:40 2014/10/20 8:40 Creating new value for tomorrow Developing a variety of solutions to preserve resources and the environment, securing the energy we need for life and economic activity, reducing consumption, reducing CO2 emissions, and diversifying energy sources Ultraviolet light- emitting diodes (UV LEDs) Development of UV LEDs that conserve energy and provide superior disinfection performance Lithium ion capacitors (LICs) Development of LICs that provide power storage with quick charging and discharging for higher effi ciency Phosphorus adsorbent Water electrolysis Development of a high-speed phosphorus adsorbent and phosphorus recovery systems that can help overcome water resource problems Development of technology to extract pure hydrogen as a renewable source of energy UV LED LIC Making new proposals for residential confi gurations and lifestyles that enable active living as the birthrate declines and the population ages, and lives become more diverse Homes for seniors Proposals that meet the residential needs of the senior generation At-home therapy Research on at-home dialysis systems, monitoring systems, etc. HH2015 demonstration home for new business research Contributing to greater health and comfort with products and services for advanced therapy as long-term needs for health care rise with increasing populations in developing countries and aging populations in developed countries Electronic stethoscope system Cell therapy and regenerative medicine Development of an electronic stethoscope system utilizing our speech recognition algorithm technology Development of equipment to culture and process cells, providing cells to hospitals for use in regenerative medicine *2014旭化成_e本文_1002入稿校了.indd 7 *2014旭化成_e本文_1002入稿校了.indd 7 2014/10/20 8:40 2014/10/20 8:40 Asahi Kasei Report 2014 7 Consolidated Performance Indexes Asahi Kasei Corporation and consolidated subsidiaries Net sales1 (¥ billion) 2,000 1,555.9 1,573.2 1,666.6 1,392.2 1,500 1,000 500 0 1,897.8 Others Critical Care2 Health Care Electronics Construction Materials Homes Fibers Chemicals Operating income (¥ billion) 122.9 104.3 92.0 57.6 200 150 100 50 0 (50) ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 FY Net income, ROE (¥ billion) 9.3 60.3 8.1 7.1 55.8 53.7 120 100 80 60 40 20 0 4.1 25.3 Net income (left scale) ROE (right scale) (%) 12 10 11.7 101.3 8 6 4 2 0 Total assets, ROA (¥ billion) 2,000 1,915.1 1,800.2 1,368.9 1,425.9 1,410.6 5.5 4.3 3.9 3.3 1.8 1,500 1,000 500 0 ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 Net worth3, net worth/total assets Interest-bearing debt, D/E ratio (¥ billion) 1,000 633.3 663.6 46.3 46.5 706.8 50.1 912.7 812.1 45.1 47.7 800 600 400 200 0 ’09 ’10 ’11 ’12 ’13 Free cash fl ows (¥ billion) Net worth (left scale) Net worth/ total assets (right scale) (%) 70 60 50 40 30 20 FY (end) 150 100 50 0 (50) (100) (150) (200) 69.1 69.3 51.8 140.4 (152.5) 0.33 303.9 0.3 (¥ billion) 0.47 381.4 0.42 0.38 264.6 253.9 0.26 184.1 500 400 300 200 100 0 ’09 ’10 ’11 ’12 ’13 Net income per share (¥) 80 60 40 20 0 72.48 43.11 39.89 38.43 18.08 143.3 Corporate expenses and eliminations Others Critical Care2 Health Care Electronics Construction Materials Homes Fibers Chemicals Total assets (left scale) ROA (right scale) Interest-bearing debt (left scale) D/E ratio (right scale) (%) 8 6 4 2 0 FY (end) (%) 0.5 0.4 0.2 0.1 0 FY (end) ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 FY Environmental and safety investment (¥ billion) Greenhouse gas emissions from production processes (million tons CO2 equivalent) 11.98 Environmental investment Safety investment 7.54 8.07 5.59 4.26 12 10 8 6 4 2 0 6 5 4 3 2 1 0 5.65 5.26 5.05 4.11 4.17 Sulfur hexafluoride PFCs HFCs Methane Nitrous oxide Carbon dioxide ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 FY 1 Beginning with fi scal year 2011, the accounting policy for naphtha resale in the Chemicals segment was changed. This change is applied retroactively to net sales for fi scal 2009 and 2010. 2 The Critical Care segment, in which results of ZOLL Medical Corporation are reported, was added in fi scal 2012. Critical Care segment results were included beginning on April 27, 2012. 3 Net assets less minority interests. 8 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 8 *2014旭化成_e本文_1002入稿校了.indd 8 2014/10/20 8:40 2014/10/20 8:40 Interview with the President In fi scal 2013 we achieved our best fi nancial performance ever. We’re aiming for further growth in fi scal 2014. By advancing the business strategy under our medium-term management initiative “For Tomorrow 2015,” the Asahi Kasei Group achieved record-high consolidated results in fi scal 2013. Fiscal 2014 will be a year of further growth, as we reap the fruit of the strategic investments which we made during the past three years. We will continue to accelerate our growth strategy as we approach completion of our fi ve-year plan. Toshio Asano President Q1. What kind of company would you like Asahi Kasei to be? Q2. How is your progress under “For Tomorrow 2015”? Q3. What is the status of your strategic investment? Q4. What is your strategy for Health Care? Q5. What was behind the change in your governance confi guration? Q6. How do you view R&D? Q7. What is your policy on return to shareholders? Brief Profi le March 1975 April 1975 June 2001 October 2003 April 2008 April 2010 April 2011 April 2014 June 2014 B.S., Pharmaceutical Sciences, University of Tokyo Joined Asahi Kasei General Manager, Institute for Life Science Research, Asahi Kasei Corp. Executive Offi cer, Asahi Kasei Pharma Corp. Director and Senior Executive Offi cer, Asahi Kasei Pharma Corp. (executive for R&D) President and Representative Director, Presidential Executive Offi cer, Asahi Kasei Pharma Corp. President and Representative Director, Presidential Executive Offi cer, Asahi Kasei Pharma Corp. Executive Offi cer, Asahi Kasei Corp. Presidential Executive Offi cer, Asahi Kasei Corp. President and Representative Director, Presidential Executive Offi cer, Asahi Kasei Corp. Asahi Kasei Report 2014 9 *2014旭化成_e本文_1002入稿校了.indd 9 *2014旭化成_e本文_1002入稿校了.indd 9 2014/10/20 8:40 2014/10/20 8:40 Q1 What kind of company would you like Asahi Kasei to be? A1 I want us to be a company that contributes even more to life and living for people around the world through innovation. Our Group Vision is to provide new value to society by enabling living in health and comfort and harmony with the natural environment based on our Group Mission of contributing to life and living for people around the world. I believe we can achieve these objectives through innovation. Consider each of our business sectors. In Chemicals & Fibers, the shale gas revolution is dramatically changing the feedstock supply chain that has been based on petroleum for the past century. In Homes & Construction Materials, while we have thus far supplied products that met the needs of society, demands are becoming increasingly diverse. In Electronics, although the rise of information technology has already brought remarkable changes, further technological advances promise to transform our lives even more. In Health Care, aging populations in developed countries and growing populations in developing countries will pose various challenges that necessitate new solutions. Changes afoot in every one of these fi elds provide many opportunities for us to contribute to society through innovation. Innovation does not only mean technological development; it but can also happen in other ways, such as marketing. Anything is possible when all of our personnel pull together as one. By combining the accumulated technology and information from different businesses together—both within the Asahi Kasei Group and with other companies—we can obtain many new synergies. This will spark innovation that contributes to the people of the world, which is our mission. I think this is how we will foster new businesses for the future of Asahi Kasei. 10 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 10 *2014旭化成_e本文_1002入稿校了.indd 10 2014/10/20 8:40 2014/10/20 8:40 Q2 A2 How is your progress under “For Tomorrow 2015”? Our strategic initiative is progressing on track. We are aiming for further earnings growth in fi scal 2014 by reaping the fruit of the strategic investments made thus far. Our “For Tomorrow 2015” management initiative is making good progress. As we approach the fi nal year of the plan, we are advancing our business strategies to obtain our objectives. Under our fi rst business strategy of expanding world-leading businesses, we started up several new facilities during 2012 and 2013. These included acrylonitrile (AN) plants in Thailand and Korea, a plant for solution-polymerized styrene-butadiene rubber (S-SBR) for fuel-effi cient tires in Singapore, a spunbond plant in Thailand, and new lines for Hipore™ lithium- ion battery separators in Hyuga, Miyazaki, Japan. In June 2014 we started up a new production facility for Bemberg™ regenerated cellulose fi ber in Nobeoka, Miyazaki, Japan. Full-fl edged operation of these new facilities will enable expanded earnings in fi scal 2014. Under our second business strategy of creating new value for society, we accelerated the expansion of established businesses and the creation of new Net sales under “For Tomorrow 2015” businesses. In the fi eld of the environment and energy, we are advancing the development of lithium ion capacitors (LICs) at our joint venture with FDK Corp. We are also nearing the commercialization of ultraviolet light-emitting diodes (UV LEDs) based on aluminum nitride (AlN) substrates. We are now constructing a pilot line in Fuji, Shizuoka, Japan, and plan to begin product shipments in fi scal 2014. In fi scal 2014 our homes business faces increased costs for materials and construction work, and our pharmaceuticals business will be impacted by reduced reimbursement prices and higher R&D expenses. Our chemicals business, on the other hand, will benefi t from improved market prices and increased volume with the full operation of new plants. We are forecasting consolidated net sales of ¥2,016 billion and operating income of ¥150 billion, well on the path to our fi scal 2015 targets under “For Tomorrow 2015.” 1,573.2 1,666.6 1,897.8 2,016.0 2,000.0 (¥ billion) 2,000 1,500 1,000 500 0 ’11 ’12 ’13 ’14 latest forecast ’15 target FY Operating income under “For Tomorrow 2015” (¥ billion) 200 150 100 50 0 143.3 150.0 160.0 104.3 92.0 ’11 ’12 ’13 ’14 latest forecast ’15 target FY Asahi Kasei Report 2014 11 *2014旭化成_e本文_1002入稿校了.indd 11 *2014旭化成_e本文_1002入稿校了.indd 11 2014/10/20 8:40 2014/10/20 8:40 Q3 What is the status of your strategic investment? A3 From fi scal 2014 onward, we will continue to make strategic investments for further growth. investment is undiminished. We are studying investment opportunities to heighten growth in all four of our business sectors. Our plan provides for ¥1 trillion in strategic investment over the 5-year period of “For Tomorrow 2015.” In addition to investments in established businesses, we made several investments in new operations and M&A in high-growth fi elds, including the acquisition of Crystal IS, Inc., a US venture developing UV LEDs, and the acquisition of ZOLL, a leading manufacturer of acute critical care devices. We still have ¥250 billion to invest in new operations and M&A through the end of fi scal 2015. Our appetite for further proactive Strategic investment for growth (decision-adopted basis) Concept for ¥1 trillion of investment during “For Tomorrow 2015” (total for 5 years) Decisions adopted in FY 2011– FY 2013 Decisions adopted in FY 2011– FY 2013 (cid:115) Acquisition of Crystal IS (cid:115)(cid:0)(cid:33)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:58)(cid:47)(cid:44)(cid:44) (cid:115)(cid:0)(cid:35)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:73)(cid:78)(cid:73)(cid:84)(cid:73)(cid:65)(cid:76)(cid:0)(cid:80)(cid:82)(cid:79)(cid:68)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0) (cid:80)(cid:76)(cid:65)(cid:78)(cid:84)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:53)(cid:54)(cid:0)(cid:44)(cid:37)(cid:36)(cid:83) (cid:115)(cid:0)(cid:37)(cid:83)(cid:84)(cid:65)(cid:66)(cid:76)(cid:73)(cid:83)(cid:72)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:79)(cid:70)(cid:0)(cid:74)(cid:79)(cid:73)(cid:78)(cid:84)(cid:0)(cid:86)(cid:69)(cid:78)(cid:84)(cid:85)(cid:82)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0) (cid:76)(cid:73)(cid:84)(cid:72)(cid:73)(cid:85)(cid:77)(cid:0)(cid:73)(cid:79)(cid:78)(cid:0)(cid:67)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:79)(cid:82)(cid:83)(cid:0)(cid:8)(cid:44)(cid:41)(cid:35)(cid:83)(cid:9) Total approx. ¥200 billion Further growth (new operations, M&A) ¥250 billion Non-linear growth measures (FY 2011–FY 2013) FY 2011 FY 2012 FY 2013 FY 2014 plan Decisions adopted in FY 2011 (cid:115)(cid:0)(cid:35)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:51)(cid:13)(cid:51)(cid:34)(cid:50)(cid:0)(cid:73)(cid:78)(cid:0)(cid:51)(cid:73)(cid:78)(cid:71)(cid:65)(cid:80)(cid:79)(cid:82)(cid:69) (cid:115)(cid:0)(cid:35)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:65)(cid:67)(cid:69)(cid:84)(cid:79)(cid:78)(cid:73)(cid:84)(cid:82)(cid:73)(cid:76)(cid:69)(cid:0)(cid:73)(cid:78)(cid:0) Korea (cid:115)(cid:0)(cid:35)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:73)(cid:78)(cid:83)(cid:85)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:80)(cid:65)(cid:78)(cid:69)(cid:76)(cid:83) (cid:115)(cid:0)(cid:50)(cid:69)(cid:83)(cid:69)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:88)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:80)(cid:72)(cid:65)(cid:82)(cid:77)(cid:65)(cid:67)(cid:69)(cid:85)(cid:84)(cid:73)(cid:67)(cid:65)(cid:76)(cid:83) Decisions adopted in FY 2012 (cid:115)(cid:0)(cid:33)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)(cid:0)(cid:82)(cid:73)(cid:71)(cid:72)(cid:84)(cid:83)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:79)(cid:86)(cid:69)(cid:82)(cid:65)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:0) (cid:66)(cid:76)(cid:65)(cid:68)(cid:68)(cid:69)(cid:82)(cid:0)(cid:84)(cid:72)(cid:69)(cid:82)(cid:65)(cid:80)(cid:69)(cid:85)(cid:84)(cid:73)(cid:67)(cid:0)(cid:68)(cid:82)(cid:85)(cid:71) (cid:115)(cid:0)(cid:35)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:34)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:71)(cid:152) (cid:115)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:83)(cid:69)(cid:65)(cid:83)(cid:0)(cid:69)(cid:88)(cid:80)(cid:65)(cid:78)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:40)(cid:73)(cid:80)(cid:79)(cid:82)(cid:69)(cid:152) Decisions adopted in FY 2013 (cid:115)(cid:0)(cid:33)(cid:67)(cid:81)(cid:85)(cid:73)(cid:83)(cid:73)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:70)(cid:85)(cid:76)(cid:76)(cid:0)(cid:79)(cid:87)(cid:78)(cid:69)(cid:82)(cid:83)(cid:72)(cid:73)(cid:80)(cid:0)(cid:79)(cid:70)(cid:0)(cid:52)(cid:69)(cid:78)(cid:65)(cid:67)(cid:152)(cid:0) (cid:42)(cid:54)(cid:0)(cid:73)(cid:78)(cid:0)(cid:35)(cid:72)(cid:73)(cid:78)(cid:65) (cid:115)(cid:0)(cid:35)(cid:65)(cid:80)(cid:65)(cid:67)(cid:73)(cid:84)(cid:89)(cid:0)(cid:73)(cid:78)(cid:67)(cid:82)(cid:69)(cid:65)(cid:83)(cid:69)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0)(cid:80)(cid:79)(cid:76)(cid:89)(cid:67)(cid:65)(cid:82)(cid:66)(cid:79)(cid:78)(cid:65)(cid:84)(cid:69)(cid:68)(cid:73)(cid:79)(cid:76)(cid:0) (cid:8)(cid:78)(cid:69)(cid:87)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:84)(cid:0)(cid:73)(cid:78)(cid:0)(cid:35)(cid:72)(cid:73)(cid:78)(cid:65)(cid:9) (cid:115)(cid:0)(cid:47)(cid:86)(cid:69)(cid:82)(cid:83)(cid:69)(cid:65)(cid:83)(cid:0)(cid:69)(cid:88)(cid:80)(cid:65)(cid:78)(cid:83)(cid:73)(cid:79)(cid:78)(cid:0)(cid:79)(cid:70)(cid:0)(cid:40)(cid:73)(cid:80)(cid:79)(cid:82)(cid:69)(cid:152) ¥450 billion Investment in existing businesses ¥550 billion FY 2014 budget approx. ¥120 billion 12 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 12 *2014旭化成_e本文_1002入稿校了.indd 12 2014/10/20 8:40 2014/10/20 8:40 Q4 A4 What is your strategy for Health Care? We will expand each business in this sector while pursuing synergies among them, growing Health Care into a third major pillar of operations alongside chemicals and homes. We are strengthening Health Care as a growth engine which will form our third major pillar of operations alongside chemicals and homes. In pharmaceuticals we are accelerating both post- marketing developments and new drug discovery. We will continue to expand business for the Teribone™ osteoporosis drug, and are now performing global clinical development of Recomodulin™ recombinant thrombomodulin in the US and some 20 other countries, advancing toward approval in overseas markets. Expansion of Health Care sector ¥79.8 billion ¥152.5 billion ¥52.1 billion ¥133.5 billion Critical Care Health Care Pharmaceuticals / medical devices Net sales ¥119.5 billion ’11 ’12 ’13 ’15 forecast ’20 target FY In blood-purifi cation devices we are expanding worldwide by focusing on the specifi c needs of each country and region, and we are accelerating the expansion of our bioprocess business centered on Planova™ virus removal fi lters. In acute critical care, we obtained approval in Japan for ZOLL’s main products, including the high- growth LifeVest™ wearable defi brillator, Thermogard™ intravascular temperature management system, and X Series™ defi brillator for emergency medical services. The acute critical care business continues to grow steadily, and in fi scal 2014 we forecast positive consolidated operating income even after amortization of goodwill, etc., related to our acquisition of ZOLL. Our Health Care Council, comprising representatives of Asahi Kasei Pharma, Asahi Kasei Medical, ZOLL, and the holding company, is sharing technology, know-how, and product information to identify new synergies within the Health Care sector. From a longer-term perspective, we are performing R&D at the holding company for cell therapy, medical IT, and related fi elds in our Healthcare R&D Center, part of Corporate Research & Development, and at-home therapy is being studied as part of our Residential Synergy Initiative. Asahi Kasei Report 2014 13 *2014旭化成_e本文_1002入稿校了.indd 13 *2014旭化成_e本文_1002入稿校了.indd 13 2014/10/20 8:40 2014/10/20 8:40 Q5 What was behind the change in your governance confi guration? A5 Having a Representative Director responsible for each of our business sectors will enable swifter, more closely coordinated management. Q6 A6 Enhanced governance confi guration Chemicals & Fibers y g r e n y S Electronics Synergy Synergy Homes & Construction Materials y g r e n y S Health Care Increasing earnings Accelerating innovation In fi scal 2014 we adopted an enhanced governance confi guration having a holding company Representative Director with responsibility for each of our four business sectors: Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care. Management decisions that concern the Asahi Kasei Group overall and other important strategic matters are now determined through discussion among the four Representative Directors, each of whom is an experienced specialist in their respective business sectors. The new confi guration enables greater speed and agility by drawing on our collective expertise, and also facilitates deeper synergy among the different sectors with a stronger sense of unity in the Asahi Kasei Group. How do you view R&D? While emphasizing R&D in the core operating companies, we reorganized the holding company R&D confi guration to accelerate commercialization and advance longer-term projects. efforts to be commercialized by core operating companies. R&D for UV LEDs and LICs are advanced as “Group Synergy” projects, and an Energy & Environment R&D Center, Residential Synergy Initiative, and Healthcare R&D Center were established within Corporate Research & Development to carry out exploratory and basic research from a medium- to long-term perspective. The most important R&D is that which directly connects to the businesses of the core operating companies. This includes not only short-term efforts focused on quick results, but also ongoing efforts to develop new products and technology for the future. When we launched the “For Tomorrow 2015” management initiative, we established “For Tomorrow” projects to create new businesses that extend across different business units in the three strategic fi elds of the environment & energy, residential living, and health care. After three years of progress, the “For Tomorrow” projects were replaced by “Group Synergy” projects in fi scal 2014. Research subjects were divided between longer-term efforts at the holding company and 14 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 14 *2014旭化成_e本文_1002入稿校了.indd 14 2014/10/20 8:40 2014/10/20 8:40 Reorganized R&D confi guration New fields CVC Office Energy & Environment R&D Center Residential Synergy Initiative Healthcare R&D Center “Group Synergy” projects New fields “For Tomorrow” projects Advanced research laboratories Core operating company R&D Peripheral to established business Peripheral to established business Core operating company R&D Near-term Future Near-term Degree of certainty of market growth Future From FY 2011 “For Tomorrow” projects (cid:115)(cid:0)(cid:37)(cid:78)(cid:86)(cid:73)(cid:82)(cid:79)(cid:78)(cid:77)(cid:69)(cid:78)(cid:84)(cid:0)(cid:6)(cid:0)(cid:37)(cid:78)(cid:69)(cid:82)(cid:71)(cid:89) (cid:115)(cid:0)(cid:50)(cid:69)(cid:83)(cid:73)(cid:68)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:0)(cid:44)(cid:73)(cid:86)(cid:73)(cid:78)(cid:71) (cid:115)(cid:0)(cid:40)(cid:69)(cid:65)(cid:76)(cid:84)(cid:72)(cid:0)(cid:35)(cid:65)(cid:82)(cid:69) From FY 2014 (cid:115)(cid:0)(cid:104)(cid:46)(cid:69)(cid:87)(cid:0)(cid:34)(cid:85)(cid:83)(cid:73)(cid:78)(cid:69)(cid:83)(cid:83)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:118)(cid:0)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:68)(cid:0)(cid:84)(cid:79)(cid:0) (cid:104)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:0)(cid:50)(cid:69)(cid:83)(cid:69)(cid:65)(cid:82)(cid:67)(cid:72)(cid:0)(cid:6)(cid:0)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:118) (cid:115)(cid:0)(cid:104)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:0)(cid:51)(cid:89)(cid:78)(cid:69)(cid:82)(cid:71)(cid:89)(cid:118)(cid:0)(cid:80)(cid:82)(cid:79)(cid:74)(cid:69)(cid:67)(cid:84)(cid:83) (cid:115)(cid:0)(cid:50)(cid:6)(cid:36)(cid:0)(cid:65)(cid:84)(cid:0)(cid:67)(cid:79)(cid:82)(cid:69)(cid:0)(cid:79)(cid:80)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:73)(cid:69)(cid:83) Q7 What is your policy on return to shareholders? A7 We strive to continuously increase dividends through continuous earnings growth, with a payout ratio of 30% as our basic standard. Our basic policy is to strive to continuously increase dividends with a payout ratio of 30% as our basic standard, through continuous earnings growth while maintaining an appropriate cash reserve based on consolidated fi nancial results. Our cash reserve will be used as a source of funds required to achieve future earnings growth by expanding operations, both through investments in established businesses and through strategic investments, including M&A, and new business development expenditures in the environment & energy, residential living, and health care as fi elds of strategic focus. In accordance with this policy and considering our recording of extraordinary income, the annual dividend for fi scal 2013 was increased by ¥3 per share from the previous year to ¥17 per share. We plan to maintain this dividend for fi scal 2014 refl ecting forecasted consolidated fi nancial results. We will continue to strive for greater corporate value by executing our “For Tomorrow 2015” strategy, providing appropriate returns to our shareholders. Dividends per share, payout ratio (¥) 20 17 17 15 55.3 14 14 10 10 11 36.4 35.1 25.5 23.5 26.4 5 0 ’09 ’10 ’11 ’12 ’13 ’14 plan Dividends per share (left scale) Payout ratio (right scale) (%) 80 60 40 20 0 FY Asahi Kasei Report 2014 15 *2014旭化成_e本文_1002入稿校了.indd 15 *2014旭化成_e本文_1002入稿校了.indd 15 2014/10/20 8:40 2014/10/20 8:40 Enhanced Sector Management and Business Expansion through Combined Strength The Asahi Kasei Group operates in the four business sectors of Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care under the organization of a holding company and core operating companies. In fi scal 2014 we enhanced our governance confi guration by installing four holding company Representative Directors, each with responsibility for one of the business sectors, facilitating swifter management judgment and advancement of business strategy, with deeper coordination to achieve greater synergy among the business sectors. Hideki Kobori Representative Director Primary Executive Offi cer Responsibility for Electronics business sector Masahito Hirai Representative Director Vice-Presidential Executive Offi cer Responsibility for Homes & Construction Materials business sector Toshio Asano President & Representative Director Presidential Executive Offi cer Responsibility for Health Care business sector Yuji Kobayashi Representative Director Primary Executive Offi cer Responsibility for Chemicals & Fibers business sector Holding company Asahi Kasei Corporation Core operating companies Chemicals & Fibers business sector Homes & Construction Materials business sector Electronics business sector Health Care business sector Asahi Kasei Chemicals Asahi Kasei Homes Asahi Kasei Microdevices Asahi Kasei Pharma Asahi Kasei Fibers Asahi Kasei Construction Materials Asahi Kasei E-materials Asahi Kasei Medical ZOLL Medical 16 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 16 *2014旭化成_e本文_1002入稿校了.indd 16 2014/10/20 8:40 2014/10/20 8:40 At a Glance Segment1 Chemicals Fiscal 2013 sales composition, operating income composition2 Sales composition Operating income composition 41.7 % 24.5 % Net sales (¥ billion) 800 680.1 684.6 600 400 200 0 Operating income, operating margin 791.6 (¥ billion) 50 40 30 20 10 0 44.5 6.5 (%) 10 8 6 4 2 0 FY 38.9 4.9 ’13 22.9 3.3 ’12 ’11 ’12 ’13 FY ’11 Fibers Sales composition (¥ billion) 150 Operating income composition 6.4 % 5.4 % 100 50 0 110.8 109.6 120.9 ’11 ’12 ’13 FY Operating income (left scale) Operating margin (right scale) (¥ billion) 10 8 6 4 2 0 3.1 2.8 ’11 4.0 3.6 ’12 (%) 10 8 6 4 2 0 FY 8.6 7.1 ’13 Operating income (left scale) Operating margin (right scale) Homes Sales composition Operating income composition 28.2 % 39.7 % Construction Materials Sales composition Operating income composition 2.9 % 3.5 % Electronics Sales composition Health Care Operating income composition 7.6 % 9.0 % Sales composition Operating income composition 8.0 % 19.1 % Critical Care3 Sales composition Operating income composition 4.2 % -2.2 % Others Sales composition Operating income composition 1.0 % 1.1 % (¥ billion) 600 452.0 486.2 400 200 0 534.4 (¥ billion) 80 60 40 20 0 46.3 10.3 54.3 11.2 63.0 11.8 ’11 ’12 ’13 FY ’11 ’12 ’13 (%) 20 15 10 5 0 FY 46.1 51.5 55.0 (¥ billion) 60 40 20 0 ’11 ’12 ’13 FY (¥ billion) 150 146.1 131.1 145.0 100 50 0 (¥ billion) 200 ’11 ’12 ’13 FY 119.5 133.5 152.5 150 100 50 0 ’11 ’12 ’13 FY Operating income (left scale) Operating margin (right scale) (¥ billion) 6 4 2 0 1.8 4.0 ’11 5.5 10.0 4.0 7.7 ’12 ’13 (%) 15 10 5 0 FY Operating income (left scale) Operating margin (right scale) (¥ billion) 15 12 9 6 3 0 6.4 4.4 ’11 2.8 2.2 ’12 (%) 15 12 9 6 3 0 FY 14.2 9.8 ’13 Operating income (left scale) Operating margin (right scale) (¥ billion) 40 30 20 10 0 8.8 7.4 ’11 15.9 11.9 ’12 (%) 40 30 20 10 0 FY 30.3 19.9 ’13 Operating income (left scale) Operating margin (right scale) (¥ billion) 80 79.8 (¥ billion) 0 52.1 60 40 20 0 (2) (4) (6) (3.7) (3.5) ’11 ’12 ’13 FY ’11 ’12 ’13 FY (¥ billion) 20 18.6 18.0 18.5 15 10 5 0 ’11 ’12 ’13 FY Operating loss (¥ billion) 4 3 2 1 0 3.0 16.0 ’11 (%) 40 30 20 10 0 FY 2.2 12.2 ’12 1.7 9.2 ’13 Operating income (left scale) Operating margin (right scale) 1 Please refer to pp. 59–61 for information on performance by segment. 2 Not including corporate expenses and eliminations. 3 The Critical Care segment, in which results of ZOLL Medical Corporation are reported, was added in fi scal 2012. Critical Care segment results were included beginning on April 27, 2012. Asahi Kasei Report 2014 17 *2014旭化成_e本文_1002入稿校了.indd 17 *2014旭化成_e本文_1002入稿校了.indd 17 2014/10/20 8:40 2014/10/20 8:40 Operating Segments Chemicals Yuji Kobayashi President, Asahi Kasei Chemicals We are pursuing global growth opportunities and realigning our operating portfolio in line with the changing management climate, with a focus on enabling “living in health and comfort” and “harmony with the natural environment” through the creation of new businesses and new technologies. Financial Highlights (¥ billion) Fiscal year Net sales Overseas sales ratio Operating income Operating margin R&D expenditure R&D expenditure as % of net sales Capital expenditure Depreciation and amortization 2011 680.1 41.3% 44.5 6.5% 16.2 2.4% 39.1 29.6 2012 684.6 42.4% 22.9 3.3% 15.9 2.3% 47.3 30.0 2013 791.6 44.8% 38.9 4.9% 15.2 1.9% 30.8 31.1 Major Projects under Construction (cid:129) Capacity expansion for S-SBR in Singapore (cid:129) Capacity expansion for Duranate™ HDI-based polyisocianate in China (cid:129) New polycarbonatediol (PCD) plant in China “For Tomorrow 2015” Strategies Through fl exible investment of management resources, we are building a business portfolio that will meet society’s future needs. 1. Aiming for leading position in globally competitive businesses (cid:129) AN: Securing stable earnings with an optimum production confi guration based on the competitiveness of each plant and demand in each region (cid:129) S-SBR: Proactive capacity expansion to meet strong demand growth in the fuel-effi cient tire market 2. Business expansion in growing markets, particularly in Asia (cid:129) Performance plastics: Expanding established position in Asian markets through enhanced application development capability and global production infrastructure (cid:129) Water treatment/membrane business: Further reinforcing membrane business, expanding operations in China (cid:129) Duranate™ HDI-based polyisocyanate: Expanding business in the rapidly growing Chinese market (cid:129) Health care materials: Major expansion of Ceolus™ microcrystalline cellulose in emerging markets, reinforcement of acetonitrile supply infrastructure 3. Creation of new businesses and business fi elds as next strategic pillars (cid:129) Establishment and expansion of new businesses in promising markets 4. Optimization of petrochemical operations in Japan for stable Major businesses/products profi tability Chemicals and derivative products Nitric acid, caustic soda, acrylonitrile (AN), styrene, adipic acid, methyl methacrylate (MMA), acrylic resin Polymer products Stylac™-AS styrene-acrylonitrile, Stylac™-ABS acrylonitrile-butadiene- styrene, Tenac™ polyacetal, Xyron™ modifi ed polyphenylene ether (mPPE), Leona™ nylon 66, Suntec™ polyethylene (PE), synthetic rubber and elastomer, polystyrene Specialty products 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 fi lm, Ziploc™ storage bags, Frosch™ detergent, plastic fi lm, sheet, and foam 18 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 18 *2014旭化成_e本文_1002入稿校了.indd 18 2014/10/20 8:40 2014/10/20 8:40 Electrolysis plant Synthetic rubber for fuel-effi cient tires (S-SBR) Ion-exchange membranes and electrolysis systems Saran Wrap™ cling fi lm S-SBR is enjoying rapid demand growth as a material for fuel-effi cient tires. Leveraging our continuous polymerization process and technology to enable both safety and lower fuel consumption, we will capture global demand growth by proactively expanding production capacity in Singapore and other overseas locations. Asahi Kasei is the world’s only manufacturer of both ion- exchange membranes and electrolysis systems, which are used to produce caustic soda and chlorine by electrolyzing brine. With advantages over the conventional process including lower energy consumption and elimination of the need to use harmful mercury, our world-leading membrane-process technology has been adopted at over 120 plants in 24 countries around the world. Originally used to protect ammunition from moisture, polyvinylidene chloride fi lm was reborn in the mid-20th century as Saran Wrap™ cling fi lm for wrapping food at home. It features outstanding barrier performance, moisture retention, and transparency. A new box design was launched in Japan in June 2014. Highlights Opening ceremony for new S-SBR plant in Singapore An opening ceremony for a new S-SBR plant in Singapore was Opening ceremony for new acetonitrile plant in Korea An opening ceremony for a new acetonitrile plant at Korean held in July 2013. Especially in Asia, demand for S-SBR for fuel- subsidiary Tongsuh Petrochemical was held in March 2014. effi cient tires is expected to grow rapidly with tightening Acetonitrile is mainly used as a solvent in the manufacture of environmental regulations and increasing production of tires in line active pharmaceutical ingredients and pharmaceutical with greater motorization in emerging countries. To meet further intermediates, with other notable uses including as an analytical growth, a second line at the new plant is currently under reagent and in the fi eld of agrichemicals. The start-up of the new construction with start-up scheduled for the fi rst half of 2015, and plant provides Asahi Kasei Chemicals with a second production the addition of other overseas plants is also being studied. base for acetonitrile in addition to its plant in Kawasaki, Kanagawa, Japan, enhancing its ability to assure reliable supply as Asia’s leading supplier, and enabling it to meet growing demand for acetonitrile in line with the expanding pharmaceutical industry in India and other countries. S-SBR plant in Singapore The opening ceremony CSR Topics S-SBR (synthetic rubber for fuel-effi cient tires) (cid:129) Material for tread of fuel-effi cient tires (cid:129) Manufacturing value-added products with advanced performance through continuous polymerization process utilizing unique technology (cid:129) Expanding overseas to meet growing demand due to labeling requirements fuel- efficiency continuous polymerization abrasion resistance good wet grip batch polymerization handling stability Four essential characteristics of fuel-effi cient tires Asahi Kasei Report 2014 19 *2014旭化成_e本文_1002入稿校了.indd 19 *2014旭化成_e本文_1002入稿校了.indd 19 2014/10/20 8:40 2014/10/20 8:40 Financial Highlights (¥ billion) Fiscal year Net sales Overseas sales ratio Operating income Operating margin R&D expenditure R&D expenditure as % of net sales Capital expenditure Depreciation and amortization 2011 110.8 31.9% 3.1 2.8% 2.8 2.6% 5.7 6.4 2012 109.6 35.2% 4.0 3.6% 2.8 2.6% 6.8 6.1 2013 120.9 39.9% 8.6 7.1% 3.1 2.6% 8.0 5.9 Major Projects under Construction (cid:129) Capacity expansion for Bemberg™ cupro fi ber in Nobeoka, Miyazaki, Japan (commercial operation started in June 2014) “For Tomorrow 2015” Strategies Enhancing the stable profi t base in our unique established businesses with expansion and growth in world-leading fi elds, in accordance with the two perspectives of “harmony with the natural environment” and “living in health and comfort.” Creating new businesses and markets by enhancing basic and applied technologies with technology collaboration both inside and outside the company. 1. Bemberg™ cupro fi ber (cid:129) Expansion in global markets for functional apparel, traditional garments, and especially in Europe and China, linings and outerwear (cid:129) Production processes innovation 2. Roica™ elastic polyurethane fi lament (cid:129) Establishment of the world-leading brand in fi elds where we have superiority in quality and function, in collaboration with customers (cid:129) Securing a presence in growing Asian markets and globally, with the plant in Thailand as a key manufacturing base 3. Nonwovens (cid:129) Spunbond: Earnings growth in Asia with polypropylene spunbond for hygienic products produced at a new plant in Thailand, expansion of original differentiated products such as Precisé™ (cid:129) Bemliese™ cupro cellulosic nonwoven: Expansion in facial masks, securing stable earnings in the IT and medical fi elds in Asia (cid:129) Lamous™ artifi cial suede: Steady expansion in Japanese, European, and US markets for automotive interior applications, development of new applications in industrial fi elds (cid:129) Eutec™ oil-water separation fi lter: Establishing niche market leadership in oil-water separation, expansion in fi elds peripheral to microfi ltration 4. Leona™ nylon 66 fi lament (cid:129) Expansion in air-bag applications (cid:129) Stable earnings in tire cord applications Fibers Toshio Takanashi President, Asahi Kasei Fibers Together with our customers, we are contributing to life and living for people around the world by securing the presence of our unique technologies and high-performance products with growth potential in world-leading fi elds. Major businesses/products Bemberg™ cupro fi ber, Roica™ elastic polyurethane fi lament, Eltas™ spunbond, Lamous™ artifi cial suede, and other nonwovens, Leona™ nylon 66 fi lament 20 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 20 *2014旭化成_e本文_1002入稿校了.indd 20 2014/10/20 8:40 2014/10/20 8:40 An Indian sari made with Bemberg™ Bemberg™ cupro fi ber Nonwovens Bemberg™ is a regenerated cellulose fi ber made from cotton linter, the short fi bers on cotton seeds. The world’s only manufacturer, we have been producing Bemberg™ for over 80 years. Featuring a silk-like smooth feel and attractive luster, it is used in applications ranging from high- quality suit linings to outerwear, innerwear, sportswear, and beddings. The use of Bemberg™ for traditional garments is growing in India and Pakistan. We have wide range of highly functional nonwoven products made with advanced and innovative production technology. Demand for Eltas™ spunbond is rising in diapers and other hygienic product applications, most notably in Asia. Precisé™ is a multifunctional nonwoven fabric with high barrier effi ciency used in electronic applications. Bemliese™ is the world’s only 100% cellulose continuous-fi lament nonwoven. Lamous™ artifi cial suede is used for upholstery and automotive interiors. Highlights Expansion of spunbond business in Thailand An opening ceremony for a new spunbond plant in Thailand was Completion of new production facility for Bemberg™ The construction of a new production facility for Bemberg™ cupro held in February 2013. To meet growing demand in the fi eld of fi ber in Nobeoka, Miyazaki, Japan, was completed and commercial hygienic products such as disposable diapers in Asian countries, in operation began in June 2014, increasing production capacity by May 2014 we made a decision to expand the new plant. A second approximately 10%. Bemberg™ is increasingly used for functional production line is scheduled to begin commercial operation in innerwear and Indian traditional garments, and demand is forecasted November 2015. This will further expand our presence in Asian to continue growing especially in emerging countries. We will markets with swift response to customer needs and stable supply continue to expand production capacity and enhance the production to hygienic product manufacturers from Japan and other countries infrastructure in order to strengthen the Bemberg™ supply that are expanding operations in Asia. confi guration in line with additional growth in the global market. The opening ceremony The new production facility CSR Topics Bemberg™ cupro fi ber Bemberg™ is regenerated cellulose fi ber made from cotton linter. Being naturally biodegradable, it is harmless to the environment. With a soft and smooth feel, its function of absorbing and releasing moisture provides year-around comfort, feeling cool to wear in warm weather and warm to wear in cool weather. Cotton linter Asahi Kasei Report 2014 21 *2014旭化成_e本文_1002入稿校了.indd 21 *2014旭化成_e本文_1002入稿校了.indd 21 2014/10/20 8:40 2014/10/20 8:40 Financial Highlights Fiscal year Net sales Overseas sales ratio Operating income Operating margin R&D expenditure R&D expenditure as % of net sales Capital expenditure Depreciation and amortization 2011 452.0 — 46.3 2012 486.2 — 54.3 (¥ billion) 2013 534.4 — 63.0 10.3% 11.2% 11.8% 2.1 0.5% 6.3 4.8 2.2 0.5% 9.5 5.3 2.2 0.4% 8.7 5.9 “For Tomorrow 2015” Strategies Our focus is on enhancing three-story houses and other products which incorporate innovative lifestyle proposals in order to secure the leading position in the urban homes market. We aim to provide comfortable living to as many customers as possible, as quickly as possible, based on our commitment to providing fulfi llment in living in a mature urban setting. 1. Order-built homes (houses and apartment buildings) (cid:129) Establishment of the leading brand for urban homes with new residential lifestyle proposals that meet emerging social needs (cid:129) Promotion of community-specifi c proposals to increase market share, and reinforcing marketing capabilities in selected urban areas of Japan (cid:129) Expansion of multi-dwelling homes business 2. Real estate (cid:129) Reinforcing condominium business based on obtaining accord among owners regarding exchange of equivalent value and the rebuilding of older condominiums (cid:129) Maximizing utilization of land value through brokerage-related operations (cid:129) Heightening capability to secure tenants for rental units 3. Expansion of housing-related operations (cid:129) Expansion of remodeling and renovation work (cid:129) Enhancement of the energy-conservation product lineup Homes Eisuke Ikeda President, Asahi Kasei Homes We are focused on expansion by securing a high market share in urban areas with products that provide security and comfort. Housing-related operations will be developed as a unique array of businesses that build and leverage new strengths in residential-related services. Major businesses/products Order-built homes operations (unit homes and apartment buildings) Hebel Haus™ unit homes, Hebel Maison™ apartments Real estate–related operations Management of Hebel Maison™ rental units, Atlas™ condominiums, Hebel Town™ housing developments, brokerage of used Hebel Haus™ homes Remodeling Exterior wall refurbishing, reroofi ng, redesign, interior renovation, solar panel installation Financial and other services Mortgage fi nancing, etc. 22 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 22 *2014旭化成_e本文_1002入稿校了.indd 22 2014/10/20 8:40 2014/10/20 8:40 Hebel Haus™ Hebel Maison™ Hebel Haus™, Hebel Maison™ Our “Long Life Homes” provide long-lasting safety, security, and comfort for over 60 years, through a combination of Hebel™ autoclaved aerated concrete (AAC) panels with our original steel-frame structural systems. We offer order-built homes featuring outstanding strength and durability which can withstand earthquake, fi re, and typhoon. Highlights Hebel Haus™ FREX RESIDENCE The Hebel Haus™ FREX RESIDENCE series of two-story houses was launched in May 2013. Built with a heavy steel-frame structural system previously employed in three- and four-story houses, FREX RESIDENCE features added fl exibility in designing broad open spaces. With its massive horizontal line formed of Hebel™ AAC panels, elegant fl at roof, and protruding canopy, it presents a truly stately appearance. NEXT Hebel Haus™ NEXT Hebel Haus™ series was launched in November 2013. It features an original steel-frame structural system with added reinforcement which enables an intermediate fl oor to be placed between the fi rst and second fl oors. The intermediate fl oor is 80 cm lower than the second fl oor, providing added fl exibility in design and high-level utilization of land area. Atlas™ condominiums Our residential development business is centered on Atlas™ series condominium buildings, with a focus on exchange of equivalent value and replacing older housing complexes in urban areas with new condominiums together with comprehensive plans for urban renewal. The exceptional negotiating skills we have accumulated through experience in the order-built homes business has proved to be effective as we advance the process of consensus-building and planning, providing full support for customers from the fi rst step of consideration through fi nal completion. Net Sales (Asahi Kasei Homes consolidated) (¥ billion) 600 534.4 1.9 52.6 85.8 486.2 1.9 46.3 70.6 452.0 88.7 23.7 551.0 1.5 58.0 92.5 339.6 367.3 394.1 399.0 Others Remodeling Real estate– related Order-built homes Others Pre-built homes Order-built homes 389.7 409.2 75.3 32.1 79.3 27.8 282.3 302.1 500 400 300 200 100 0 ’09 ’10 ’11 ’12* ’13 ’14 plan FY * Product categories are revised from FY 2012. A portion of sales previously included in pre-built homes is now included in order-built homes. Otherwise, sales in the previous pre-built homes category are now included in real estate–related. Orders Received (¥ billion) 500 412.4 421.3 406.0 354.5 371.9 306.9 400 300 200 100 0 ’09 ’10 ’11 ’12 ’13 ’14 plan FY CSR Topics “Long Life Homes” Featuring long-term durability for lasting comfort, Hebel Haus™ unit homes provide exceptional security even in the event of a disaster. Backed by a full range of after-sale services including an original 60-year maintenance and inspection system, Hebel Haus™ homes enable long-lasting comfort, satisfaction and asset value retention. Asahi Kasei Report 2014 23 *2014旭化成_e本文_1002入稿校了.indd 23 *2014旭化成_e本文_1002入稿校了.indd 23 2014/10/20 8:40 2014/10/20 8:40 Financial Highlights (¥ billion) Fiscal year Net sales Overseas sales ratio Operating income Operating margin R&D expenditure R&D expenditure as % of net sales Capital expenditure Depreciation and amortization 2011 46.1 — 1.8 4.0% 1.1 2.4% 1.6 2.4 2012 51.5 — 4.0 7.8% 1.0 1.9% 2.2 2.3 2013 55.0 — 5.5 10.0% 0.9 1.6% 6.4 2.2 “For Tomorrow 2015” Strategies Pursuing business expansion in fi elds of competitive superiority while transforming the business to be more solution oriented. We are focusing management resources on businesses where we can exert our strengths in markets which are growing in step with ongoing changes, such as heightening environmental awareness and a society- wide transformation to longer-lasting, more sustainable infrastructure. We are also advancing a transformation of business to achieve a shift from simply selling products to a more solution-oriented confi guration encompassing peripheral fi elds and including systems and combination products based on the customer’s perspective. 1. AAC-related Enhancing cost competitiveness with measures to gain further effi ciency and maintain stable profi tability. Strengthening business for Hebel Powerboard™ AAC panels for wood-frame houses by extending peripheral operations, including with broader lineup of specialty coatings for greater durability and longer service life. Leveraging our superior technology to strengthen the exterior renovation business targeting the extensive number of houses built with our AAC panels. 2. Insulation materials Expanding business centered on our two phenolic foam insulation panel products, Neoma™ and Jupii™, whose competitiveness is further increasing with the growing adoption of next-generation standards for insulation performance in energy-effi cient homes. 3. Foundation systems Expanding business by further development of fi elds that make the most of our product features, including mobile phone masts, transportation infrastructure, and seismic retrofi tting, centered on competitive Eazet™ and ATT Column™ small-diameter steel-pipe piling systems. 4. Structural materials Increasing sales of BasePack™ column base attachment systems by raising awareness of its superior earthquake resistance. Expanding the overall structural materials business by reinforcing the product lineup with both new products and new variations of current products. Construction Materials Tomihiro Maeda President, Asahi Kasei Construction Materials We are focused on the development and provision of products that provide safety, security, and comfort, based on constant innovation in our core areas of AAC-related products, insulation materials, foundation systems, and structural components. Major businesses/products Hebel™ and Hebel Powerboard™ autoclaved aerated concrete (AAC) panels, Neoma™ and Jupii™ phenolic foam insulation panels, Eazet™, ATT Column™, and other piling systems, BasePack™ column base attachment systems 24 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 24 *2014旭化成_e本文_1002入稿校了.indd 24 2014/10/20 8:40 2014/10/20 8:40 Hebel™ autoclaved aerated concrete (AAC) panels Neoma™ phenolic foam insulation panels Featuring light weight which enables easy installation as well as excellent durability, thermal insulation, and fl ame resistance, Hebel™ panels are used in various applications ranging from unit homes to skyscrapers. Hebel™ panels have maintained the leading position in Japan since their market launch in 1967, with continuous R&D and quality improvements. Neoma™ phenolic foam insulation panels featuring world-leading insulation performance are used not only in construction applications but also for insulation in transportation vehicles. Further demand growth is expected due to the Japanese government’s announcement of a roadmap toward mandatory energy conservation standards for homes. Highlights Completion of new production line for Neoma™ phenolic foam insulation panels In March 2014, an opening ceremony was held for a new production line for Neoma™ phenolic foam insulation panels in Sashima, Ibaraki, Japan. The market for high-performance insulation panels is anticipated to grow dramatically against a background of heightened demand for energy conservation and better insulated homes, with renewed consumer interest in “smart” and “zero- energy” homes after the Great East Japan Earthquake, as well as the Japanese government’s roadmap toward mandatory energy conservation standards for homes in 2020. Adoption of Eazet™ screw-tip piles for platform barriers The Eazet™ piling system was adopted by East Japan Railway Co. in a project to install platform barriers at Yamanote Line stations beginning in 2008. Eazet™ met the demanding conditions for platform reinforcement work within railroad stations, including constrained spaces, high safety standards, and the need to complete work within narrow time frames. Adoption of Eazet™ began in 2009 at Meguro Station, and has proceeded at a pace of 3 to 4 stations per year since then. After installation on the Yamanote Line is completed in 2014, Eazet™ is expected to be adopted for similar installations on other lines and by other railway companies in the Tokyo area and around Japan. The new production line Installing Eazet™ CSR Topics Neoma™ phenolic foam insulation panels With its world’s top-class insulation performance, Neoma™ is used in various applications, mainly for exterior insulation of wood-frame houses. Made from phenolic resin, Neoma™ features outstanding fl ame resistance. Although it will become charred and scorched when exposed to fl ame, Neoma™ itself does not burn. Its insulation performance is maintained over the long term, for comfortable and energy-conserving homes. Wood-frame houses with Neoma™ Asahi Kasei Report 2014 25 *2014旭化成_e本文_1002入稿校了.indd 25 *2014旭化成_e本文_1002入稿校了.indd 25 2014/10/20 8:40 2014/10/20 8:40 Financial Highlights Fiscal year Net sales Overseas sales ratio Operating income Operating margin R&D expenditure 2011 146.1 50.8% 6.4 4.4% 19.2 2012 131.1 57.1% 2.8 2.1% 17.6 (¥ billion) 2013 145.0 62.4% 14.2 9.8% 16.4 R&D expenditure as % of net sales 13.1% 13.4% 11.3% Capital expenditure Depreciation and amortization 13.4 21.0 17.0 15.0 14.6 14.3 “For Tomorrow 2015” Strategies Electronic devices We are continuing to develop and supply category-leading products to the global electronic devices market, with a strategic product lineup that makes the most of our unique strength in having both silicon semiconductor technology and compound semiconductor technology. We are advancing business expansion through the development of new electronic devices such as infrared sensors and current sensors with the potential to establish market leadership in their respective categories, as exemplifi ed in our electronic compass which has a dominant market share as an essential component of portable devices. In each application we are developing new high-quality products that keenly match customer’s needs, further building relationships of mutual trust and reliance, in a wide range of fi elds including infrastructure, industrial, and automotive, in addition to consumer electronics. Electronic materials We are expanding business and enhancing supply capabilities for our leading businesses such as semiconductor process materials and circuit board materials, with a focus on high-performance, green electronic materials that reduce environmental burdens. For Hipore™ LIB separator, by leveraging our superior technology and marketing platform gained as the market leader in consumer electronics applications, we will proactively increase production capacity and develop new membranes that match individual customer needs to expand sales in rapidly emerging automotive applications. We will also continue expanding production capacity for Sunfort™ photosensitive dry fi lm in China to meet growing demand, in accordance with our focus on expanding business in growth markets based on our technological advantage. Electronics Shinsuke Kido President, Asahi Kasei Microdevices With original mixed-signal LSIs such as our electronic compass for portable appliances, and sensing devices such as magnetic sensors, current sensors, and infrared sensors that make the most of our unique technology, we are building our position as a leading supplier of electronic components, continuing to develop and supply category-leading products to the global market, and expanding business as an electronic device manufacturer that customers throughout the world can rely on. Shigeki Takayama President, Asahi Kasei E-materials We contribute to life and living for people around the world by providing high-performance materials for energy and electronics, and related materials that enable energy conservation, including Hipore™ Li-ion battery (LIB) separator for mobile electronics and electric vehicles, photosensitive dry fi lm for printed wiring boards, and other products produced with our exceptional chemical technology and product development capability. Major businesses/products Electronic devices Mixed-signal LSIs, Hall elements Electronic materials Hipore™ Li-ion battery separator, photomask pellicles, APR™ photosensitive resin and printing plate making systems, Pimel™ photosensitive polyimide/PBO precursor, Sunfort™ photosensitive dry fi lm, glass fabric for printed wiring boards 26 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 26 *2014旭化成_e本文_1002入稿校了.indd 26 2014/10/20 8:40 2014/10/20 8:40 LSIs Hipore™ LIB separator Our semiconductors are defi ned by high-value added features for the next generation, such as low-energy consumption, high speed, and high precision. Working as a bridge between the analog information of the natural world and the digital information of electronic systems, mixed- signal LSIs are widely used for smartphones, mobile devices, in-car navigation systems, and other electronics devices. We are also advancing development of new products combining magnetic sensors and LSIs, such as the electronic compass. A fl at microporous sheet of polyolefi n, Hipore™ is the world’s leading separator membrane for LIBs used in smartphones, tablet PCs, and other electronic applications. Available pore sizes range from 0.05 µm to 0.5 µm. Demand is forecasted to increase notably in electric vehicle applications. Ongoing technological innovation and product development are advancing as part of our commitment as the market leader to maintain stable product supply in accordance with emerging market needs. Highlights Start-up of new line for Hipore™ A new production line was added to our plant for Hipore™ in Hyuga, Miyazaki, Japan, with commercial operation beginning in July 2013. The new line has a capacity of 50 million m2 per year, the world’s highest for a single line, raising our total production capacity for Hipore™ to 250 million m2 per year including our plant in Moriyama, Shiga, Japan. Launch of AK09911C 3-axis electronic compass for portable appliances The AK09911C, a new 3-axis electronic compass for portable appliances, was launched in October 2013. It features a package size of 1.2 mm × 1.2 mm × 1.5 mm, which in terms of area makes it the world’s smallest at the time of its launch. This reduced size enables further miniaturization of portable appliances. The electronic compass is used for electronic map applications such as pedestrian navigation systems to rotate the map to match the direction the users are facing. In April 2014, Asahi Kasei Group Fellow Masaya Yamashita was awarded The Commendation for Science and Technology by the Minister of Education, Culture, Sports, Science and Technology (Development Category) in recognition of his development of the electronic compass and the function of automatically compensating for magnetic offset. CSR Topics Hipore™ Li-ion battery separator Hipore™ is the world’s leading LIB separator, a microporous membrane that insulates the electrodes electrically while allowing lithium ions to pass through. Notable demand growth for Hipore™ is forecasted in automotive applications in accordance with heightening environmental awareness, and we continue to focus on technological developments for Hipore™ as a high-performance and eco-friendly material. A close-up of Hipore™ Asahi Kasei Report 2014 27 *2014旭化成_e本文_1002入稿校了.indd 27 *2014旭化成_e本文_1002入稿校了.indd 27 2014/10/20 8:40 2014/10/20 8:40 Financial Highlights (¥ billion) Fiscal year Net sales Overseas sales ratio Operating income Operating margin R&D expenditure 2011 119.5 23.9% 8.8 7.4% 17.5 2012 133.5 21.4% 2013 152.5 23.1% 15.9 30.3 11.9% 19.9% 20.0 19.7 Health Care R&D expenditure as % of net sales 14.6% 15.0% 12.9% Capital expenditure Depreciation and amortization 10.7 11.5 14.3 10.5 9.5 10.0 “For Tomorrow 2015” Strategies Pharmaceutical-related We are growing business with our new high-selling drugs as major pillars of earnings, and focusing on the development of novel drugs in the fi elds of orthopedics and urology for worldwide markets. 1. Japanese operations We will continue to increase earnings by advancing the growth of Recomodulin™ and Teribone™ as high-selling drugs. R&D-related investments will be increased to further reinforce the new drug pipeline, and clinical development will be accelerated. In our main therapeutic fi eld of orthopedics, we are advancing the development of drugs related to locomotive syndrome, including drugs for osteoporosis and rheumatoid arthritis, in order to build a world- leading position in this area. In diagnostics, we are working to expand use of the Lucica™ GA-L glycated albumin assay kit, while advancing the development of infectious disease diagnostic kits. 2. Overseas operations We are entering a new phase as a specialized global pharmaceutical company through the advancement of the clinical development of Recomodulin™ worldwide, as well as reinforcement of our capabilities for clinical development and marketing in East Asia. In diagnostics, we are reinforcing efforts to obtain approval for Lucica™ GA-L overseas. Kazuyoshi Hori President, Asahi Kasei Pharma We are focused on the discovery and development of new drugs in the fi elds of orthopedics and urology for the worldwide market, as a specialized global pharmaceutical company. In our diagnostic reagent business, we are concentrating management resources on products with growth potential. Yutaka Shibata President, Asahi Kasei Medical We are advancing as a leading company in blood- related healthcare through the creation, establishment, and improvement of therapies, with both innovative therapeutic devices and products which enhance safety in the production of pharmaceuticals, developed by a combination of our core technologies of fi ltration and adsorption with broad insight in science, mechanical engineering, and pharmacology. Major businesses/products Pharmaceutical-related Teribone™, Recomodulin™, Elcitonin™, Flivas™, Toledomin™, Bredinin™, and other pharmaceuticals, Lucica™ GA-L glycated albumin assay kit, L-series enriched liquid diets Medical device–related APS™ polysulfone-membrane artifi cial kidneys (dialyzers), therapeutic apheresis devices, Planova™ virus removal fi lters, Sepacell™ leukocyte reduction fi lters 28 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 28 *2014旭化成_e本文_1002入稿校了.indd 28 2014/10/20 8:40 2014/10/20 8:40 Teribone™ osteoporosis drug APS™ polysulfone-membrane artifi cial kidneys Teribone™ is a human parathyroid hormone preparation that facilitates bone formation, for the indication of osteoporosis with high risk of fracture. With weekly subcutaneous injections, Teribone™ decreases the risk of developing new vertebral fracture. APS™ polysulfone-membrane artifi cial kidneys, sold in over 70 countries, are used for the clinical purifi cation of blood as a substitute for normal kidney function. We are advancing further product development to meet the different needs of various patients, while expanding local production in cooperation with other companies. Medical device–related Leveraging our technological strengths in membrane separation and selective absorption, we are expanding our dialysis-related business and developing new applications that meet therapeutic needs as we reinforce our global presence. 1. Blood purifi cation We are committed to contributing to the effi ciency of treatment at medical institutions as a global leader in blood purifi cation. We are strengthening our hemodialysis business by developing safe and reliable new technologies and products that enable improved quality of life for patients and meet the needs of medical professionals. For therapeutic apheresis devices that enable new possibilities for the treatment of intractable diseases and for the prevention of illnesses, we are enhancing our manufacturing process technology and heightening competitiveness as we continue to grow as the world leader in this fi eld. 2. Blood transfusion We will continue to meet expanding global needs for our world leading Sepacell™ leukocyte reduction fi lters by enhancing the product lineup and reinforcing our supply capability. 3. Bioprocess products As the manufacturer of Planova™, a hollow-fi ber membrane fi lter that is the world’s leading virus removal fi lter for enhancing safety in the production of biotherapeutics, we will maintain the stable supply of high-quality products to meet growing demand. Highlights Completion of the second manufacturing facility at the Nagoya Pharmaceuticals Plant In February 2014, Asahi Kasei Pharma completed the construction of the second manufacturing facility at its Nagoya Pharmaceuticals Plant in Miyoshi, Aichi, Japan. The new facility is used to manufacture Asahi Kasei Pharma’s fl agship products Teribone™ osteoporosis drug and Recomodulin™ anticoagulant. The second manufacturing facility at the Nagoya Pharmaceuticals Plant Receipt of the 60th Okochi Memorial Technology Prize Asahi Kasei Medical received the 60th Okochi Memorial Technology Prize in March 2014, for the development of production technology for virus removal fi lters and establishment of a market for them. This prize was awarded in recognition of the contribution to enhanced safety in the manufacture of biotherapeutic products through the establishment of production technology for Planova™ virus removal fi lters and obtaining their widespread use by manufacturers of plasma derivatives and biopharmaceuticals worldwide. CSR Topics Teribone™ osteoporosis drug Teribone™ is a human parathyroid hormone preparation that facilitates bone formation with weekly subcutaneous injections. The effi cacy in inhibiting fracture is obtained by increasing bone strength with both improved bone quality and increased bone density. In Japan, the number of osteoporosis patients is increasing as the population ages. Since osteoporosis carries an increased risk of a fracture which results in confi nement to bed, the implementation of effective measures against osteoporosis is an important social issue. Asahi Kasei Pharma believes that, with its effi cacy in inhibiting fracture, Teribone™ will make a signifi cant contribution to the treatment of osteoporosis. Asahi Kasei Report 2014 29 *2014旭化成_e本文_1002入稿校了.indd 29 *2014旭化成_e本文_1002入稿校了.indd 29 2014/10/20 8:40 2014/10/20 8:40 Financial Highlights (¥ billion) Fiscal year Net sales Overseas sales ratio Operating income (loss) Operating margin R&D expenditure R&D expenditure as % of net sales Capital expenditure Depreciation and amortization 2012* 52.1 99.5% (3.7) — 3.9 7.5% 5.4 6.9 2013 79.8 99.3% (3.5) — 6.2 7.8% 8.7 10.0 Results for fi scal 2012 were included beginning on April 27, 2012. “For Tomorrow 2015” Strategies In order to expand from a focus primarily on resuscitation to the broader acute critical care market, we have two key areas of concentration over the next several years. 1. Rapidly expand today’s businesses • Dramatically increase the LifeVest™ salesforce to bring this one-of-a- kind product to more patients globally • Accelerate the clinical trial program for Intravascular Temperature Management (IVTM™) in an effort to expand the approved indications for use worldwide, including in Japan where this type of technology was the fi rst to receive regulatory approval in 2012 • Extend the reach of our core defi brillator and data segments to include signifi cantly more international customers • Having achieved approval in Japan for all major products, rapidly build our commercial operations to penetrate the market 2. Leverage ZOLL’s strength in resuscitation to capture the broader acute critical care market • Identify products, technologies and services that are synergistic with our existing resuscitation platform, including those that can predict or monitor symptoms of acute fatal risks, or treat such high-risk patients • Expand geographically, with greater focus on areas outside the US and Europe Critical Care Richard A. Packer CEO, ZOLL Medical Corporation ZOLL became a member of the Asahi Kasei Group in April 2012. While sales continue to grow in the U.S. as our principal market, we are building a global presence in the fi eld of acute critical care by expanding our reach throughout Europe and Asia. We are focused on business expansion in Japan through our subsidiary Asahi Kasei ZOLL Medical, established in 2012. Major businesses/products Defi brillators R Series™, X Series™ and other defi brillators; AED Plus™ and AED Pro™ automated external defi brillators Wearable defi brillator LifeVest™ Automated CPR AutoPulse™ Temperature management system Intravascular Temperature Management (IVTM™): Thermogard XP™ Data solutions RescueNet™ Software 30 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 30 *2014旭化成_e本文_1002入稿校了.indd 30 2014/10/20 8:40 2014/10/20 8:40 LifeVest™ wearable defi brillator Intravascular Temperature Management (IVTM™)—Thermogard XP™ It is worn by patients at risk of sudden cardiac arrest (SCA), which is responsible for more than 350,000 deaths every year in the US alone. Over 100,000 patients have used LifeVest™ in the US, Europe, and Japan to date. A system to adjust body temperature using intravascular catheters, it is used at leading medical centers. It enables effective management of body temperature with reduced workload for nursing staff. Clinical studies to expand indications for use are planned. Highlights Approval in Japan for manufacturing and marketing of the X Series™ defi brillator for emergency medical and hospital use In November 2013, Asahi Kasei ZOLL Medical received approval to manufacture and market the X Series™ defi brillator from Japan’s Ministry of Health, Labor and Welfare, and is advancing sales in Japan. The X Series™, a portable defi brillator that includes monitoring functions, is suited for use in a wide range of circumstances at the scene of an emergency, during patient transport, and within medical facilities. It features light weight and a compact form without compromising high functionality and large display size. ZOLL Foundation established In November 2013, ZOLL established the ZOLL Foundation, an independent entity organized for scientifi c and educational purposes. The ZOLL Foundation will provide grants to support research, education, and public awareness related to improving resuscitation practices, preventing patient deterioration associated with cardiac arrest and morbidity, and enhancing the care of acute patients to reduce mortality and morbidity. The Foundation website has a full description of the Foundation, the process for submitting grant applications, and will provide a report on awarded grants. The ZOLL Foundation website www.zollfoundation.org CSR Topics LifeVest™ wearable defi brillator LifeVest™ wearable defi brillator provides protection for patients at risk of SCA by constantly monitoring the patient’s heart and, if a life-threatening heart rhythm is detected, delivering a treatment shock to restore normal heart rhythm. The LifeVest™ has one set of electrodes to measure electrocardiogram data, and another set of electrodes to deliver the treatment shock. As the detection of life-threatening heart rhythm and delivery of the defi brillation shock are performed automatically, a patient’s life can be saved without the assistance of any other person. Furthermore, as the LifeVest™ is wearable, its use can be easily initiated or discontinued in accordance with changes in the patient’s condition, enabling use to be limited to the period when a patient is at high risk of SCA. *2014旭化成_e本文_1002入稿校了.indd 31 *2014旭化成_e本文_1002入稿校了.indd 31 2014/10/20 8:40 2014/10/20 8:40 Asahi Kasei Report 2014 31 Research & Development The holding company and core operating companies of the Asahi Kasei Group each have their own R&D organization, with R&D at the holding company focused on the creation of new businesses that will drive the future growth of the Asahi Kasei Group, and R&D at the core operating companies focused on heightening existing operations and expanding in peripheral areas. In fi scal 2014, the “For Tomorrow” projects established for the creation of new businesses were replaced by “Group Synergy” projects to advance commercialization, with Corporate Research & Development carrying out R&D from a medium- to long-term perspective. Breakdown of R&D expenses R&D expenses Others 0.1% Critical Care 8.7% Corporate expenses 10.5% Health Care 27.7% FY 2013 ¥71.1 billion Electronics 23.1% Construction Materials 1.5% Chemicals 21.3% Fibers 4.4% Homes 3.1% (¥ billion) 80 60 40 20 0 62.9 62.3 66.3 71.1 71.1 ’09 ’10 ’11 ’12 ’13 FY R&D strategies Holding Company Group-wide strategic projects in the fi elds of the environment & energy, residential living, and health care are established in the holding company, with proactive investment of resources for R&D and the creation of new businesses, including M&A and alliances with other companies. In the environment & energy, we are advancing the development of high-effi ciency, long-life ultraviolet light emitting diodes (UV LEDs) using high-quality aluminum nitride (AlN) substrates, and the lithium ion capacitor (LIC) as a next-generation energy storage device. In residential living, we are advancing the development of new lifestyle proposals through the “HH2015” demonstration house which incorporates the latest products and services related to the environment and home health care. In health care, we are advancing R&D in the fi eld of cell therapy and regenerative medicine, including cell processing equipment for cancer treatment. In addition, we are working on creating new businesses through synergy between our established health care businesses and the acute critical care businesses of ZOLL. Chemicals Throughout the Chemicals segment, R&D focused on the environment, resources, and energy is advanced to create new value for society through the enhancement of our established core technologies and the acquisition of new technologies. In chemicals and derivative products, we are advancing the verifi cation of two new process technologies to enable feedstock diversifi cation: the “E-fl ex” process for highly effi cient production of propylene using C2 fractions or bioethanol as feedstock, and the “BB-fl ex” process to produce butadiene from butene, with studies on their commercialization in progress. Industrial technology to produce diphenyl carbonate from carbon dioxide feedstock has been completed, and studies on its commercialization are in progress. 32 Asahi Kasei Report 2014 In polymer products, we are advancing the development of a number of innovative products including polyamide with ultra- high heat resistance, high rigidity, and excellent moldability using novel molecular design; S-SBR for next-generation fuel-effi cient tires; and AZP™ as a new optical polymer featuring zero birefringence achieved through novel molecular design. We are also heightening our own advanced computer aided engineering technology, and accelerating the development of new business and overseas expansion in performance polymers. Projects in specialty products include the development of LED encapsulants based on our silicone modifi cation technology, and the development of low-cost, safe, and low-waste processes to manufacture active pharmaceutical ingredients (APIs) through a combination of our organic synthesis technology and process technology, with studies for commercialization advancing. In the fi eld of membrane separation we have developed a phosphorus adsorbent with a porous structure to enable the world’s fastest selective, high-level removal and high-purity recovery of phosphorus from treated water, and trials at large-scale water treatment facilities have been completed. Fibers In cooperation with other companies within the Asahi Kasei Group as well as with outside companies, we are enriching and enhancing our R&D functions to achieve results more quickly. While developing products with new value marked by originality, we are advancing manufacturing process innovation for Bemberg™ cupro, Roica™ polyurethane, various nonwovens, and Leona™ nylon 66. In addition, the commercialization of new cellulose materials and the development of new functional textiles and novel nonwovens are advancing in accordance with the concepts of “living in health and comfort” and “harmony with the natural environment.” *2014旭化成_e本文_1002入稿校了.indd 32 *2014旭化成_e本文_1002入稿校了.indd 32 2014/10/20 8:40 2014/10/20 8:40 Pharmaceutical Product Pipeline (as of May 2014) Code name, form, generic name Classifi cations Indication Remarks AK-156, injection, zoledronic acid Bisphosphonate Osteoporosis New effi cacy, new dose; once-yearly administration AK-160, injection Collagenase clostridium histolyticum Dupuytren’s contracture New biologic AT-877, oral, fasudil hydrochloride hydrate Rho-kinase inhibitor Pulmonary arterial hypertension Additional indication, new dosage form HC-58, injection, elcatonin Calcitonin Shoulder-hand syndrome Additional indication ART-123, injection, recombinant thrombomodulin alpha Recombinant human thrombomodulin Sepsis with coagulopathy New biologic AK106 Anti-infl ammatory Rheumatoid arthritis New chemical entity Origin Licensed Licensed In-house In-house In-house In-house Phase III Phase II Phase III (overseas) Phase II (overseas) Homes R&D is focused on enhancing core technologies. Shelter technology brings greater safety and security through earthquake resistance, seismic damping, base isolation, and fi re resistance; greater long-term usability through physical durability/evaluation, systematic maintenance, and 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 modifi cations, 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 effi ciency and environmental compatibility in homes optimized for health and comfort. Construction Materials R&D guided by our vision of “the development and provision of products that provide safety, security, and comfort” is focused on heightening basic technology in our four businesses of AAC, phenolic foam insulation materials, high-function foundation systems, and steel-frame structural materials. We are also proactively advancing R&D to establish new solution-oriented businesses by creating services and products in fi elds peripheral to existing businesses, such as remodeling services for exterior AAC walls and non-construction applications for steel-pipe piling systems. Electronics With a wealth of design assets and an organically integrated organization of design engineers, we develop unique electronic devices in a timely fashion to keep pace with the rapid technology innovation of the electronics industry. Advanced development of high-performance products is based on both compound semiconductor process technology gained through development of high-sensitivity magnetic sensors and mixed-signal LSI technology. Development of new electronic materials which contribute to energy and resource conservation, reduced environmental burdens, and living in health and comfort is advancing based on our core technologies for polymer design and synthesis, membrane formation, and precision surface processing. Environment and energy–related materials such as high- performance lithium-ion battery materials for both portable electronics and automotive applications, and materials for solar cells are currently under development, as are new materials which correspond to leading technological trends for fi ner patterning in both semiconductors and printed wiring boards. Health Care In pharmaceuticals, we are focused on contributing to “living in health and comfort” by addressing unmet medical needs which are increasing together with maturing markets and the aging population, particularly in the fi elds of orthopedics and urology. We are not only searching for new subjects for R&D, but also pursuing continuous proprietary technological innovation and enhanced collaboration with world-leading technologies. In medical devices and related systems, we are utilizing our comprehensive strength to advance R&D to provide products, technology, and services that extend the potential of medical treatment as well as heighten medical standards. We are further advancing technological developments in established fi elds of hemodialysis, therapeutic apheresis, leukocyte reduction, and virus removal, while also focusing on next-generation fi elds of research including regenerative medicine utilizing autohemotherapy. Critical Care With sudden cardiac arrest still a major cause of death around the world, the importance of research and development in both the resuscitation and acute critical care areas cannot be underestimated. New therapies, technologies, and solutions that are designed to improve patient care are paramount to reducing the hundreds of thousands of lives senselessly lost each year. Whether assisting lay rescuers or clinicians to deliver high-quality chest compressions, delivering a necessary defi brillating shock that doesn’t require bystander intervention, or cooling the body to preserve heart and brain tissue, the research and development efforts in the Critical Care segment are undeniably lifesaving. Integration of medical devices that work together to get the job done rely on a backbone supported by data solutions. The combination of hardware or capital equipment with supporting software, which enables consistent performance, enhances functionality, and helps to document progress and outcomes, is what makes the work of this segment universally important. Asahi Kasei Report 2014 33 *2014旭化成_e本文_1002入稿校了.indd 33 *2014旭化成_e本文_1002入稿校了.indd 33 2014/10/20 8:40 2014/10/20 8:40 Feature 2: Roundtable discussion Achieving results through synergy Four female researchers, one from each of our four business sectors, discuss ways of research, working as a woman, and support for working while raising children Ryoko Takao Team Leader Laboratory for Pharmacology, Musculoskeletal Disorders Asahi Kasei Pharma M.S., Pharmacology. Joined Asahi Kasei in 1992. Worked on evaluating the effi cacy and elucidating the mechanism of an osteoporosis drug. In 2011 the Teribone™ osteoporosis drug, which she worked on since joining the company, was approved. Currently working as the leader of a team focused on investigation of new osteoporosis therapies and research for post-marketing developments. In a family of three with her husband and 8th grade daughter. Eiko Tanaka Performance Coating Materials R&D Dept. Asahi Kasei Chemicals M.S., Bioagricultural Sciences. Joined Asahi Kasei in 2011. Working on R&D for polycarbonate diol (PCD), a material for paint and synthetic leather. Mainly focused on analysis to achieve greater productivity at the PCD plant. Currently involved as a researcher in the start-up of a new plant in China. Naomi Morito Researcher Housing R&D Center Asahi Kasei Homes Master of Engineering. Joined Asahi Kasei in 2002. Worked on research in fi bers before transferring to Asahi Kasei Homes. Currently working on R&D related to Hebel Haus™ heating and ventilation. Performing experiments and verifi cations regarding the thermal environment and conditions of air circulation in residential spaces; creating proposals focused on health, comfort, and environmental friendliness. Yoko Tanizaki General Manager Electronic Materials Technology Development Dept. Asahi Kasei E-materials B.S., Synthetic Chemistry. Joined Asahi Kasei in 1986. Worked on development of new grades of Sunfort™ photosensitive dry fi lm and Pimel™ photosensitive polyimide precursor, and provided technical support to customers. Currently serving in a leadership position with responsibility for development of electronic materials technology. In a family of three with her husband and 7th grade son. Attitude as a researcher Tanaka: Corporate research requires experimental results to be reproducible. We also need to be swift. It’s important to provide good things to our customers as quickly as possible. I think that’s a big difference from university research. At university, my motivation for research was curiosity to elucidate phenomena with chemistry. Now I’m always focused on how to provide good products that meet the needs of our customers. It’s important to meet deadlines, and prioritize things. Takao: Pharmaceutical research aims to provide research results to patients in the form of medicine. Developing a drug is a long process that takes years. Teribone™, which I was involved in, took over twenty years before it was available to patients. Tanaka: How do you stay motivated over such a long period of research? Takao: We just steadily perform each experiment, moving from one stage to the next. As a leader, I have to look ahead to the next hurdle, and discuss with the team how we can overcome it. I try to stay focused on the quality of our research. We do a lot of joint research with universities. It’s a win-win situation where the university researchers get to satisfy their scientifi c curiosity, and we get the quality results we need as a corporation. I also think it stimulates the imagination of our younger researchers to observe the depth of research at universities. Morito: My research closely affects the lives of our customers who live in Hebel Haus™ homes. In addition to carefully verifying experimental data, I think it’s important to consider 34 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 34 *2014旭化成_e本文_1002入稿校了.indd 34 2014/10/20 8:40 2014/10/20 8:40 Working as a researcher, working as a woman in the Asahi Kasei Group the perspective of the residents when making proposals. And since my research results are conveyed to the customers through the salespeople, I have to describe things in a way that the salespeople can clearly understand. If I used the specialist words and phrases that we researchers use among ourselves, the salespeople would be overwhelmed. I’m always thinking about how to describe things in a way that is easily understood. This is probably because of my own experience. When I fi rst transferred to Asahi Kasei Homes after researching fi bers, I was dumbfounded by the technical jargon in this fi eld. Asahi Kasei Fibers and Asahi Kasei Homes. It was a good experience that provided many examples of solutions from fi bers that matched needs in homes. It’s exciting to discover new things. I’m doing research focused on comfort. Both fi bers and homes are concerned with comfort. It would be great if we could establish technology to evaluate comfort in its entirety. The Asahi Kasei Group is now seeking synergy. If we had more opportunities for casual interaction, and not just offi cial interaction, I think we could achieve even more synergy in our R&D departments. Tanizaki: In contrast to a consumer-oriented business like that, my customers are other manufacturers. Their requirements are becoming more and more demanding. While achieving the necessary performance characteristics, we also need to balance the cost, development period, and timing of product launch. Interaction among personnel within the Asahi Kasei Group, and “synergy” Tanizaki: Since the Asahi Kasei Group has four business sectors, I think we should do more to leverage internal connections. I try to maintain active interaction with researchers in fi elds related to mine. It’s easy for the R&D organizations of different businesses to become secluded. But when you’re hitting a dead end, it’s often possible to fi nd a breakthrough by talking to someone in a different fi eld. Greater interaction among different sectors will increase the likelihood that you will know someone who can help when you get stuck. I think it’s a great advantage to be able to discuss things with researchers from different core operating companies. Tanaka: There is a networking initiative among young researchers of the Asahi Kasei Group. Even if it doesn’t bear fruit immediately, I think having various acquaintances will be useful across the course of one’s career. Takao: Various training sessions are held by rank and function, which provides periodic opportunities to make connections across different fi elds. It should be possible to make use of such connections. Within health care, there has also been personnel interchange between Asahi Kasei Pharma and Asahi Kasei Medical. I hope we will have more interaction with ZOLL as well. Morito: I once took part in a collaboration project between Advantages of being a female researcher, satisfaction in research Takao: In both daily life and in the research lab, I think women are better at coming up with incisive little ideas. For example, I know a woman researcher who, upon learning about the technical collaboration between Asahi Kasei Homes and Asahi Kasei Medical in the HH2015 demonstration house, thought “Why not develop a system in the home to enable consultation with a pediatrician?” But when working in research there’s a tendency to take costs and profi ts too lightly. We need to be good at fi nancial numbers, too. For me, in long-term research as a team with each individual working in a professional manner, the greatest satisfaction is when we obtain reliable data that enable clear judgment. It really was a great feeling when Teribone™ was approved after a twenty-year effort. We were not only congratulated within the company, but researchers at other companies said “Good work!” when we met at scientifi c conferences. There is a camaraderie among researchers, even those working for different companies, because we have all experienced similar challenges. It’s a special feeling when even your competitors offer a kind comment like that. Tanaka: I’m only in my fourth year, and still have many experiences to look forward to, but the most rewarding moment for me so far was when a production process I experimented on and studied was adopted in a commercial plant. The process I worked on provided greater productivity, enabling us to overcome a slight supply shortage without expanding the plant. It felt great to know that this directly contributed to increased profi ts. Morito: Since my research focuses on the residential environment, I feel a close connection between my work and my daily life. Sometimes I can’t help thinking about my Asahi Kasei Report 2014 35 *2014旭化成_e本文_1002入稿校了.indd 35 *2014旭化成_e本文_1002入稿校了.indd 35 2014/10/20 8:40 2014/10/20 8:40 research when I’m at home. Sometimes I even try little experiments! I have applied my personal experience to my research on hanging laundry to dry inside a room. I’d like to continue to apply a woman’s perspective to my research work. It’s rewarding to know that the results of my research are provided directly to Hebel Haus™ customers. Tanizaki: I think the feeling I get from knowing that a product I developed is being used around the world is something that only a researcher can understand. Another satisfying experience I had was when I traveled alone to a customer’s facility to help start up a production line. It gave me the chance to apply my technical knowledge without anybody’s help. My most memorable experience, though, has to be a diffi cult customer complaint we got when I was section chief in technical service. A solution required close coordination among sales, production, QA, and R&D. In the end the customer was satisfi ed, and we maintained our supply relationship. Everybody involved with the product pulled together and worked with a single purpose to solve that problem. We were all relying on each other. That case really showed me what great teamwork can do, and gave me a deeper appreciation of the value of the trust that customers place in us. As General Manager, I try to constantly keep these lessons in mind, and instill them in my people. An atmosphere that allows different ways of working, maintaining a career while raising children Tanaka: I think it must be diffi cult to keep working as a researcher when you have a small child. If you reduce your working hours, it must be hard to continue research. What’s it really like? Takao: For me, the hardest thing was to come to a compromise with myself that I couldn’t do everything. One part of me wanted to keep trying harder and harder in order to do everything by myself. But I learned that it’s better not to try too hard, and instead let yourself ask other people for help. Once I realized that, things became better for me, and better for my daughter, too. Every day is still trial and error, but I think my daughter is more understanding than anyone else. First of all I think we need to change preconceptions about how women should be, how mothers should be. When I had my daughter, I only took maternity leave. I didn’t take any parental leave afterward. The workplace atmosphere at that time was not conducive to taking parental leave. Nowadays, there are various provisions and benefi ts available, and it’s considered normal for a woman to return to work after having a child. Ideally, one can effi ciently achieve results while adjusting the pace of work. 36 Asahi Kasei Report 2014 Tanizaki: To accommodate diverse working styles, I think male personnel also need to make adjustments. Many years ago, my supervisor told me “We don’t discriminate against women, but we do make distinctions.” I took this to mean that they would provide a fair workplace while giving due consideration to our needs, which I thought was reasonable. When I was pregnant, I hesitated to tell the overseas customer whose account I was responsible for. I was afraid they would resent being inconvenienced by my leave of absence. But when I met them later after returning to work, they were very supportive. I think we do tend to try to do too much as working mothers, but when raising a child it’s okay to slow down a little. It takes persistence to fi nd the best way. Tanaka: I always feel it’s regrettable when I see women researchers quit working when they get married or when they have a child. I’m afraid if this happens too often, our male colleagues and supervisors will get the impression that women won’t continue working for long. Women need to have a certain will to keep working, I think it requires determination and resolve. Tanizaki: In my case, each time I rose up another rank, the scope of my work broadened and broadened. It’s not easy to take on more responsibility, but it also deepened my sense of satisfaction. Everyone has different individual circumstances when it comes to raising children or caring for elderly family members. Different people value work differently. But our company provides an environment that makes it possible for *2014旭化成_e本文_1002入稿校了.indd 36 *2014旭化成_e本文_1002入稿校了.indd 36 2014/10/20 8:40 2014/10/20 8:40 Takao: “Sincerity” is listed fi rst among our Group Values, and I feel that we are organizationally very thorough about compliance. I think that “Challenge” means we not only respect personnel who try new things, but also encourage them to do so. Tanizaki: I feel that we are an enterprise that manufactures things with sincerity. And not content with the status quo, the company has continued to uphold “Creativity” as part of its culture. Prospects for the future as a researcher Tanaka: My task at hand is to help start up a new plant, and I’m completely focused on this now. As a next step, I want to develop new chemical products with higher added value. I feel that Asahi Kasei is an appealing place to do research because we operate in various different business fi elds. Someday I hope that my research will enable the launch of a whole new business. It would be fantastic to be able to create the kind of new product that opens a whole new avenue of business for the company. Working in the fi eld of chemicals, I feel that there are endless possibilities. I will continue to hold this ambition in the years ahead. Tanizaki: As I am now in a position of responsibility for R&D in electronic materials, I need to keep looking toward future business needs even as I continually try to provide the best possible research environment for the personnel I supervise. By drawing together the respective strengths of each member, and continuing to take on new challenges, I believe we can accomplish both the expansion of our established operations and the launch of new operations. I want to achieve technology management that benefi ts the people of the world. Morito: I’m now focused on the thermal environment in homes. I study effective ways of heating and how to utilize wind. Ultimately my results are useful for residents. Surveys of Hebel Haus™ owners indicate increasing satisfaction with the comfort of the homes in the summer and winter. It’s encouraging to feel that I have contributed to this improvement. As I continue to go deeper into my current subject of research, I am always looking for new approaches. I want to continue to help people achieve greater comfort in their homes. Takao: I always feel invigorated when I look at new experimental data. I try to share this feeling with my colleagues and subordinates, encouraging new discoveries. Our efforts every day are bolstered by the sense of purpose to create drugs that contribute to the health of people around the world. Asahi Kasei Report 2014 37 women to continue working. I hope more women will choose to do so, believing in their own possibilities. Tanaka: After hearing about your experiences, I think I could continue working as a researcher even if I get married and have children. Morito: Asahi Kasei Homes still has few female researchers, but I hope the number of women in leadership positions will increase. What kind of company is Asahi Kasei? Morito: I think we have an atmosphere of easy communication irrespective of gender or position in the hierarchy. People aren’t called by their titles, but by their names. Personal connections are highly valued. Collaboration among different business sectors can be diffi cult sometimes, but I think it’s extraordinary that they launch initiatives like the Residential Living for Tomorrow project to advance synergy by utilizing the diverse strengths of the Asahi Kasei Group to address the needs of society. Tanaka: You get to meet many different people, which is stimulating. We have many different kinds of people in the research department where I work, and diversity is appreciated. To be able to talk to people in different research fi elds, people with different ways of thinking, helps to broaden one’s own horizons. I think the way that people listen to ideas from young researchers is another positive aspect of the organization. *2014旭化成_e本文_1002入稿校了.indd 37 *2014旭化成_e本文_1002入稿校了.indd 37 2014/10/20 8:40 2014/10/20 8:40 Respect for employee individuality The Asahi Kasei Group considers fulfi lling and satisfying working conditions and workplace culture, in which personnel feel motivated to achieve and take pride in their career, to be key to business performance. Our human resources policies are focused on the maintenance and reinforcement of a corporate culture emphasizing Asahi Kasei characteristics, the personal growth of each employee, and the creation and expansion of business through superior people and organizations, based on the understanding that the exceptional power of our people and organizations is the source of our competitive strength. Human Resources Principles The Human Resources Principles of the Asahi Kasei Group are a distillation of the values and beliefs held in common by all employees, a key aspect of a corporate culture where personal growth and corporate development are mutually reinforcing. Corporate Commitment Basic Expectations Expectations of Leaders The basic commitment to human resources is to provide the venue for a dynamic and fulfi lling career as a part of a lively and growing corporate group. • Enterprise and growth through challenge and change • Integrity and responsibility in action • Respect for diversity • Building the team, heightening performance and achievement • Going beyond conventional boundaries, in thought and action • Contributing to mutual development and growth Human resource development Group Masters The Asahi Kasei Group employs a “Group Masters” program to recognize employees who have developed and exercised extraordinary expertise and skills that hold universal value, and to facilitate their application throughout the Group. As of April 2014, 110 Group Masters are designated: two as Group Fellows, 28 as Senior Group Experts, and 80 as Group Experts, with rank and remuneration commensurate with division general manager, department general manager, and section manager, respectively. Development of global human resources To support the expansion of world-leading businesses under our medium-term management initiative “For Tomorrow 2015” from the perspective of human resources, we are implementing Valuing human rights and diversity Basic policy Corporate HR & Labor Relations leads the effort to ensure that there will be no discrimination on the basis of gender, nationality, age, or otherwise, to maintain a lively workplace culture which enables personnel to perform at their best, to advance employment of persons with disability, and to rehire personnel after mandatory retirement. Fiscal 2014 hiring In April 2014, 288 new graduates were hired: 228 men and 60 women. In addition, 80 persons were hired in mid-career between April 2013 and March 2014. Expansion of opportunities for women We established a dedicated corporate organ to promote equal opportunity, and have proactively increased the proportion of women hired and expanded the distribution of job assignments for women. In 1993, only fi ve employees at the rank of manager or above were women. This has risen to 410 in June 2014, and the variety of posts where women are assigned continues to expand. 38 Asahi Kasei Report 2014 measures such as internship programs for young personnel, expanding overseas study programs, appointing new personnel and managers at overseas subsidiaries and affi liates, and holding “One Asahi Kasei Area Meet” training sessions for managers at overseas subsidiaries in Europe, the US, and China. Development of engineers and technical specialists Under “For Tomorrow 2015,” we are accelerating the creation of new businesses which provide new value for society. Engineers and technical specialists in R&D and manufacturing are essential human resources for successful business development, and therefore we are reinforcing measures to create better, more vibrant workplaces for them as well as examining programs that provide a wide range of career opportunities to enable their personal and professional growth. Number of women as managers* 317 344 281 410 370 500 400 300 200 100 0 ‘10/6 ‘11/6 ‘12/6 ‘13/6 ‘14/6 * Results as of June 30 each year for personnel employed by Asahi Kasei Corp., Asahi Kasei Chemicals Corp., Asahi Kasei Fibers Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Microdevices Corp., Asahi Kasei E-materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. Preventing harassment Sexual harassment is clearly prohibited in the Asahi Kasei Group by our Corporate Ethics – Code of Conduct and by our corporate employment regulations. Prevention is reinforced through training at each level of promotion in rank, and through periodic *2014旭化成_e本文_1002入稿校了.indd 38 *2014旭化成_e本文_1002入稿校了.indd 38 2014/10/20 8:40 2014/10/20 8:40 For more information, please refer to the Asahi Kasei Group CSR Website. CSR http://www.asahi-kasei.co.jp/asahi/en/csr/ company-wide training within each core operating company for conformance with corporate ethics. A central point of contact is established for consultation about related issues and concerns in the Asahi Kasei Group. Employment of persons with disabilities Asahi Kasei Ability Corp. was established in 1985 for the employment of disabled persons, performing a wide range of services for the Asahi Kasei Group, including data entry, digitizing documents, website design, printing of business cards, document printing and binding, dispatch of sample products, cleaning, copying, and planter box gardening. Balancing work and family life Basic policy We provide various forms of support for personnel to work with security and vitality in accordance with their individual circumstances and values from the perspective of balancing work and family life. Parental leave Our parental leave is available through the fi scal year in which the child turns three years old. In fi scal 2013, 468 personnel utilized parental leave. This is included 233 men, 40% of those who were qualifi ed, and 235 women. Employees using parental leave* 250 157 226 179 240 190 242 235 233 212 300 200 100 0 ‘09 ‘10 ‘11 ‘12 ‘13 FY Women Men * Results for personnel employed by Asahi Kasei Corp., Asahi Kasei Chemicals Corp., Asahi Kasei Fibers Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Microdevices Corp., Asahi Kasei E-materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. Main provisions to support balance in work and family life Rate of employment of disabled persons at applicable Group companies* 1.97 1.94 1.98 2.12 2.08 2.00 (%) 2.2 2.1 2.0 1.9 1.8 1.7 ‘10/6 ‘11/6 ‘12/6 ‘13/6 ‘14/6 Asahi Kasei Group Legal minimum * Results as of June 1 each year at applicable Group companies. Calculation based on total employment of 23,579.5 persons in the 17 applicable companies. As of June 1, 2014, the number of disabled persons employed by Asahi Kasei Ability Corp. stood at 308.5 of the total 491.5 disabled employees. Calculated in accordance with the Act on Employment Promotion etc. of Persons with Disabilities. Support for family care Our personnel are allowed to take leave of up to one year for the purpose of attending to any family member who requires care. Enhanced provisions for days off and fl exible working hours are also available to help personnel continue working while providing care for family members. In fi scal 2013, seven personnel utilized leave of absence for family care. Leave of absence to accompany spouse on overseas assignment As globalization continues to advance, an increasing number of personnel have a spouse who is transferred to an overseas assignment. In fi scal 2013 we adopted a provision for such personnel to take a leave of absence to accompany their spouses living overseas. Employee survey Management and labor work in concert to resolve people-related issues based on mutual understanding and awareness. We regularly perform a survey of employees to gauge improvements to previously identifi ed problems and track changes in employee perceptions over time. Survey results are also utilized in the evaluation of various measures and the consideration of new measures. e v a e l / f f o e m T i s r e h t O Pregnancy Delivery Child-rearing One year old Two years old Three years old Entry to elementary school End of third grade Family care Time off for morning sickness 42 days Maternity leave 56 days Plus 14 days off before/after delivery Up to April 1 after child reaches three years of age Expanded application of unused paid days off to care for family members (up to 40 days) Parental leave Leave of absence for family care (one year in total) Time off for family care Time off for family illness Shortened working hours for child-rearing Women only Financial assistance for employing babysitters/caretakers “Kids Support” shortened working hours for child-rearing Shortened working hours for family care (one year in total) Flexible working hours for family care Asahi Kasei Report 2014 39 *2014旭化成_e本文_1002入稿校了.indd 39 *2014旭化成_e本文_1002入稿校了.indd 39 2014/10/20 8:40 2014/10/20 8:40 Responsible Care Safety is a fundamental prerequisite for the continuation of operations as a corporate member of society. To ensure that every aspect of safety is maintained, the Asahi Kasei Group implements a Responsible Care (RC) program comprising the six pillars of operational safety, workplace safety and hygiene, environmental protection, health maintenance, product safety, and community outreach. Message from the Executive for Technology The spirit of RC is autonomy, responsibility, and open disclosure. At the Asahi Kasei Group, we go beyond mere compliance with laws and regulations as we operate our businesses with due consideration for all matters related to the environment, health, and safety. In fi scal 2013, we established our Global Environment Action Committee to further deepen and expedite our efforts to achieve a low-carbon and recycling-oriented society, to protect water resources, and to coexist in harmony with nature. We are integrating global environmental measures together with business activities to fulfi ll our social responsibility in accordance with our Group Vision of enabling harmony with the natural environment. In addition, we advanced a wide range of RC efforts including training and education at all organizational levels. In certain areas where we can perform better, we are redoubling our efforts to raise results in line with our commitment to prevent accidents and disasters, maintain product safety, and promote employee health, for complete achievement of all RC objectives. Hiroshi Kobayashi Director Senior Executive Offi cer Asahi Kasei Corp. Responsible Care at Asahi Kasei RC 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 fi rm producing and handling chemical products, together with measures to gain greater public trust through disclosure and communication. RC was conceived in Canada in 1985, and was strengthened on a global scale with the establishment of the International Council of Chemical Associations (ICCA) in 1990. In 1995, the chemical industry in Japan began implementing RC with the establishment of the Japan Responsible Care Council (JRCC*). Asahi Kasei was among the founding members of the JRCC, and played a leading role in the expansion and development of RC in Japan. RC at the Asahi Kasei Group is not limited to chemicals-related operations but encompass operations in all fi elds, including fi bers, homes, construction materials, electronics, and health care. * JRCC: Operated as the Japan Chemical Industry Association’s RC Committee since April 2011. Responsible Care at the Asahi Kasei Group Asahi Kasei Group RC Principles Environmental Protection Community Outreach Fibers Chemicals Operational Safety Electronics Asahi Kasei Group Health Care Product Safety Construction Materials Homes Health Maintenance Workplace Safety and Hygiene Throughout the product life cycle from R&D to disposal, utmost consideration is given to environmental preservation, product safety, operational safety, and workplace hygiene and health as preeminent management tasks in all operations worldwide. • Environmental preservation is achieved by ameliorating the environmental burden of operations while giving full consideration to the environment in the development of new technologies and products. • Efforts are made to design and develop products which contribute to the sustainability of the global environment, and to disseminate such products worldwide. • Product safety is ensured by evaluating the safety of products and providing safety information. • The safety of personnel and members of the community is secured through endeavors to maintain stable operation and improve technologies for safety and disaster prevention. • Workplace accidents are prevented through improvements to the workplace environment and plant modifi cations to achieve inherent safety. • Maintenance and promotion of employee health is supported by efforts to achieve a comfortable workplace environment. In addition to maintaining legal compliance, continuous improvement is pursued through attainment of self-imposed targets based on results of risk assessment. Public understanding and trust is gained through proactive communication and information disclosure. July 7, 2014 RC Management System The effi ciency and effectiveness of Asahi Kasei Group RC is maintained in accordance with our Group RC Management Guidelines and other internal standards, with the President of the holding company serving as chair of our RC Committee. Continuous reevaluation and improvement are systematically pursued with “plan-do-check-act” (PDCA) cycles—for the Asahi Kasei Group as a whole, within each core operating company and Region*, and within individual plants and facilities. Certifi ed compliance with internationally standardized management systems is obtained for the RC Management System of the Asahi Kasei Group. We have obtained ISO 14001 environmental management system certifi cation for environmental protection and ISO 9001 quality management system certifi cation for product safety. An Occupational Health & Safety Management System (OHSMS) is adopted for workplace safety, hygiene, and health. * A site or group of sites consisting of several plants and facilities of various core operating companies. Each Region General Manager is responsible for the unifi ed implementation of RC in the respective Region. 40 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 40 *2014旭化成_e本文_1002入稿校了.indd 40 2014/10/20 8:40 2014/10/20 8:40 For more information, please refer to the Asahi Kasei Group CSR Website. CSR http://www.asahi-kasei.co.jp/asahi/en/csr/ RC objectives and results ★★★Complete ★★Satisfactory ★Unsatisfactory FY 2013 RC Objectives FY 2013 Results Attainment FY 2014 RC Objectives Enhance RC compliance Improved RC compliance Advance RC education and training Enhance RC at affi liates Enhance dialog with the public RC training course for section managers and assistant chiefs revised Supplement for assistant chiefs created Follow-up enhanced Expanded range of affi liates implementing RC RC at affi liates enhanced through instructions and support by core operating companies RC reports of 4 core operating companies and 8 plant complex sites were used in community outreach ★★ ★★ ★★★ ★★★ Review RC framework Enhance RC compliance Advance RC education and training Enhance RC at affi liates Enhance dialog with the public Avoid all polluting accidents and minor incidents No polluting accidents, two intermediate incidents Promote recycling-oriented society: • Final disposal of 0.3% or less of generated industrial waste Goal not reached with fi nal disposal rate of 0.5% • Recycling rate of at least 85% Goal reached with recycling rate of 91% Curtail greenhouse gas (GHG) emissions: • Reduce CO2 emissions in Japan by 3.0% from FY 2005 level 23.5% reduction from FY 2005 level • No increase of global CO2 emissions 15.3% reduction from FY 2010 level • Reduce GHG emissions in Japan by 4.5% from FY 2005 level 29.2% reduction from FY 2005 level • LCA/CO2 contribution ratio1 of 4.7 LCA/CO2 contribution ratio of 7.0 Environmental protection Protect water resources: • Water resource contribution ratio2 of 1.8 Water resource contribution ratio of 6.6 Control emissions of chemical substances: • Control emissions of PRTR-specifi ed substances • Control emissions of air and water pollutants Release of PRTR-specifi ed substances and emission of VOCs reduced by 90% and 87%, respectively, from FY 2000 level ★★★ Preserve biodiversity when procuring biological resources Investigated impact of our business activities on biodiversity, including use of new materials; no problem found Advance CSR procurement Avoid all industrial accidents Implemented CSR procurement No industrial accidents Control changes to equipment and operating conditions Some inadequacy in control was confi rmed after approval for change Operational safety Enhance risk assessment, prevent abnormal reactions, confi rm interlock functions on-site Monitor for hazards of fi re, explosion, and leaks; implement remediation Enhance emergency response systems Monitor for items in need of replacement and uninspected items, implement remediation: • Implement seismic retrofi tting for specifi c buildings as planned for FY 2013 • Completion of the evaluation of seismic capacity for non-specifi c buildings and implement retrofi tting as planned for FY 2013 Avoid all workplace injuries: • Achieve frequency rate3 of 0.1 or less • Achieve severity rate4 of 0.005 or less Deepen utilization of OHSMS: On-site confi rmation related to preventing abnormal reactions and securing interlock functions indicated no major problems (39 departments) Review performed at time of on-site confi rmation for preventing abnormal reactions Confi rmed enhanced disaster response capabilities (two disaster response trucks deployed in Mizushima) Completed according to the plan Evaluation completed on schedule 0.40 0.013 • Reduce latent risks at workplaces Review of risk assessment confi rmed at audit • Enhance internal audits Improvement confi rmed at audit with reference to internal audit records ★★★ • Make the effects of OHSMS more visible Confi rmed at audit with reference to risk level changes • Ensure thorough compliance with safe working standards Compliance records confi rmed at audit Workplace safety and hygiene Health maintenance Product safety and management of chemical substances Living in health and comfort Avoid all accidents in “caught in/between” category: • No lost-time injury due to “caught in/between” accidents Enhance safety management guidance of on-site contractors: • Enhance safety management structure as the contracting manufacturer • Enhance safety management of on-site contractors Reinforce management of safety on equipment work: One lost time injury (one in FY 2012); continued comprehensive equipment inspection at plants Satisfactory improvement confi rmed in audit with reference to check sheets at each site Self-evaluation results and safety management guidance at each site confi rmed at audit • Enhance implementation of safety management standards Confi rmed issues at audit with reference to work management records Promote health maintenance and improvement among personnel: • Promote the prevention of and countermeasures to lifestyle- related diseases • Prevent falls Promote countermeasures to mental health issues and enhance support system Proportion of personnel health warning signs generally unchanged, BMI and ratio of employees who smoke gradually decreasing Fall prevention measures tested and manual prepared Stress survey and follow-up implemented Develop the health management system Specialist industrial physicians supporting independent plants and smaller offi ces Start of guidance using video conferencing systems, etc. Avoid serious product safety incidents No product safety incidents Enhance management of chemical substances: • Promote compliance with laws and regulations on management of chemical substances in Japan and overseas Compliance maintained and system enhanced • Encourage JIPS activities • Promote JAMP tools Continued risk assessment and public disclosure of safety documents Provided and received information via MSDSplus and AIS, cooperated with dissemination of JAMP-IT Number of people our health care business contributed to: • 18% increase over FY 2010 24% increase over FY 2010 Number of residents in Hebel Haus™ homes: • 12% increase over FY 2010 12% increase over FY 2010 ★★ Avoid all polluting accidents and minor incidents Promote recycling-oriented society: • Maintain rate of fi nal disposal at 0.3% of generated industrial waste or less • Maintain recycling rate of at least 85% Curtail GHG emissions: • Reduce CO2 emissions in Japan by 12% from FY 2005 level • Reduce CO2 emissions in Japan and overseas by 2% from FY 2010 level • Reduce GHG emissions in Japan by 14% from FY 2005 level • Achieve LCA/CO2 contribution ratio of 5.9 Protect water resources: • Water resource contribution ratio of 5.6 Control emissions of chemical substances: • Control emissions of PRTR specifi ed substances • Control emissions of air and water pollutants Preserve biodiversity when procuring biological resources Advance CSR procurement ★★★ Avoid all industrial accidents Continue to monitor for hazards of fi re, explosion, and leaks: • Ongoing review to prevent abnormal reactions and confi rm interlock functions Review earthquake response and enhance emergency response systems Control changes to equipment and operating conditions Enhance risk assessment Monitor for items in need of replacement and uninspected items, implement remediation: • Advance seismic retrofi tting of specifi c and non-specifi c buildings Avoid all workplace injuries: • Achieve frequency rate of 0.1 or less • Achieve severity rate of 0.005 or less Deepen utilization of OHSMS: • Reduce latent risks at workplaces • Enhance internal audits • Make the effects of OHSMS more visible • Ensure thorough compliance with safe working standards Avoid all accidents in “caught in/between” category: • No lost-time injury due to ”caught in/ between” accidents Enhance safety management guidance of on-site contractors: • Enhance safety management structure as the contracting manufacturer • Enhance safety management of on-site contractors Reinforce management of safety on equipment work: • Enhance implementation of safety management standards Promote health maintenance and improvement among personnel: • Promote the prevention of and counter- measures to lifestyle-related diseases • Prevent falls Promote countermeasures to mental health issues and enhance support system • Stress survey and follow-up implemented Develop the health management system • Resolve critical tasks in each region with lateral extension • Establish the health management system ★★ ★★★ ★★★ ★★★ ★★★ ★★ ★★★ ★★★ ★★★ ★★★ ★ ★ ★★★ ★★ ★★★ ★★★ ★★★ at affi liates and independent plants ★★★ Avoid serious product safety incidents Enhance management of chemical substances: • Promote compliance with laws and ★★★ regulations on management of chemical substances in Japan and overseas • Encourage JIPS activities • Promote JAMP tools ★★★ ★★★ Number of people our health care business contributed to: • 24% increase over FY 2010 Number of residents in Hebel Haus™ homes: • 16% increase over FY 2010 1 LCA is used to determine the amount of reduction in CO2 emissions enabled by Asahi Kasei products and technologies in comparison with conventional products and technologies. The ratio is calculated by dividing this amount by the global CO2 emissions of the entire Asahi Group. 2 The water resource contribution ratio is calculated by adding up the total quantity of water clarifi ed and recycled using Asahi Kasei fi ltration technology and dividing this by the quantity of the Asahi Kasei Group’s water intake. 3 Number of accidental deaths and injuries resulting in the loss of one or more workdays, per million man-hours worked. 4 Lost workdays, severity-weighted, per thousand man-hours worked. Asahi Kasei Report 2014 41 *2014旭化成_e本文_1002入稿校了.indd 41 *2014旭化成_e本文_1002入稿校了.indd 41 2014/10/20 8:40 2014/10/20 8:40 Environmental protection The Asahi Kasei Group’s environmental protection measures include efforts for the achievement of a low-carbon society, the establishment of a recycling-oriented society, and the preservation of biodiversity. As our operations involve the use of large volumes of chemical substances, we implement measures under our ISO14001 environmental management system to prevent pollution-causing accidents. Quantitative indicators and targets to curtail global warming In June 2012, we established our Global Environment Committee to oversee an expanded scope of activities related to global warming. At its second meeting, the Global Environment The Asahi Kasei Group’s global environmental policy Committee formulated policy on environmental initiatives that apply to the entire Asahi Kasei Group. Quantitative indicators and targets were revised in order to clearly visualize and confi rm ongoing progress of these environmental initiatives. 1. Contributing to a low-carbon society (1) Sharing the international goal of cutting worldwide greenhouse gas emissions in half by the year 2050, the Asahi Kasei Group will establish targets for reduction of emissions from its business activities by 2020. (2) The Asahi Kasei Group will contribute to the establishment of a low- carbon society by providing the world with products, technologies, and services that enable reduced greenhouse-gas emissions through our proprietary technology. (3) The Asahi Kasei Group will monitor and clearly visualize the amount of CO2 emissions from its supply chain. 2. Preserving water resources The Asahi Kasei Group will help preserve water resources around the world through its domestic and international water supply fi ltration membrane module business and industrial water recycling service business. The Asahi Kasei Group will measure the quantity of its water intake while striving to maintain and improve the effi ciency of its water usage. 3. Promoting a recycling-oriented society The Asahi Kasei Group will promote the reduction of environmental impacts and the effi cient utilization of resources and energy throughout the entire life cycle in its business activities in order to contribute to a recycling-oriented society. Specifi cally, we will raise the percentage of reduction, reuse, and recycling (3Rs), and increase the usage of resources and energy with lower environmental impacts as well as renewable resources and energy. 4. Achieving harmony with nature The Asahi Kasei Group will monitor and carefully manage its business activities to preserve natural capital, maintain consciousness of biodiversity, and ensure the environmental impacts of its business activities are within acceptable ranges. First, we will study the current situation pertaining to our use of land and biological resources. 5. Overseas locations (factories) The Asahi Kasei Group will create systematic monitoring items that will enable environmental management practices equivalent to those at its factories in Japan. 6. Supply chain The Asahi Kasei Group will proactively collaborate with members of its supply chain to undertake the abovementioned activities. Contributing to a low-carbon society As a participant in the Commitment to a Low Carbon Society launched in April 2013 by the Japan Chemical Industry Association and Nippon Keidanren, the Asahi Kasei Group is implementing activities in line with this commitment. We will also pursue activities under global indicators and targets set for our overseas manufacturing sites as well. In July 2014 we established a Global Environment Action Committee and changed the membership of the Global Environment Committee from the Presidents of the core operating companies to the Executives for the Environment. The Asahi Kasei Group’s activities for building a low- carbon society 1. Reducing greenhouse gas (GHG) emissions of the Asahi Kasei Group (1) CO2 and GHG emissions in Japan (2) Global CO2 emissions (3) Scope 3 emissions* 2. Helping reduce CO2 emissions throughout the entire lifecycle of products 3. Making international contributions 4. Developing innovative new technologies * Scope 3 emissions: Greenhouse gases emitted indirectly by a company throughout its supply chain. The Asahi Kasei Group’s environmental initiative framework Quantitative indicators and targets of environmental initiatives 1. Contributing to a low-carbon society Reducing CO2 emissions (cid:129) Reduce CO2 emissions in Japan to 30% below the FY 2005 level by FY 2020 (cid:129) Hold total CO2 emissions in Japan and overseas in FY 2020 to 5% below the FY 2010 level GHG emissions (cid:129) Reduce GHG emissions in Japan to 35% below the FY 2005 level by FY 2020 LCA/CO2 contribution ratio* (cid:129) Achieve ratio of 10.0 by FY 2020 (7.0 in FY 2013 and 3.2 in FY 2010) * LCA is used to determine the amount of reduction in CO2 emissions enabled by Asahi Kasei products and technologies in comparison with conventional products and technologies. The ratio is calculated by dividing this amount by the global CO2 emissions of the entire Asahi Group. 2. Preserving water resources Water resource contribution ratio* (cid:129) Achieve ratio of 7.0 in FY 2015 (1.2 in FY 2011) * The water resource contribution ratio is calculated by adding up the total quantity of water clarifi ed and recycled using Asahi Kasei fi ltration technology and dividing this by the quantity of the Asahi Kasei Group’s water intake. Global Environment Committee This committee deliberates and adopts group-wide environmental measures. It is chaired by the holding company Executive for RC, vice-chaired by the General Manager of Corporate Research & Development, and has the Executives for the Environment of the core operating companies as members. It meets twice per year. Global Environment Action Committee This committee is chaired by the General Manager of Corporate ESH & QA, and has the RC Promoters of the core operating companies and Corporate Research & Development as members. Based on decisions of the Global Environment Committee, it develops concrete measures. It meets twice per year. LCA Committee This committee consists of the chair from the holding company and members from the core operating companies and from Corporate Research & Development. It promotes LCA throughout the Asahi Kasei Group and performs LCA for the Group’s products and technologies, including those under development. It meets fi ve to six times per year, and reports results of its activities to the Global Environment Committee. 42 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 42 *2014旭化成_e本文_1002入稿校了.indd 42 2014/10/20 8:40 2014/10/20 8:40 Reducing GHG emissions from production processes The Asahi Kasei Group’s GHG emissions from production processes in fi scal 2013 were equivalent to 4.17 million tons of CO2, which represents a reduction of 29.2% compared to the 5.92 million tons from our baseline year of fi scal 2005. Signifi cant factors that contributed to this reduction include the suspension of ammonia and benzene production, and the start of biomass power generation. Compared to the emissions level in 1990, the index year set under the Kyoto Protocol, we continue to maintain a reduction of GHG emissions by more than 50%, most notably through the development of technology for thermal decomposition nitrous oxide (N2O) byproduct. GHG emissions from production processes (Million tons CO2 equivalent) 15 12 12.06 Baseline emissions 5.92 5.65 5.26 5.05 4.11 4.17 9 6 3 0 This reduction can be attributed to the launch and growing sales of Hebel Haus™ products with power generation, effi ciency, and conservation functions which reduced Category 11 emissions (use of sold products), and to the reduced use of fossil resources and fossil fuels which reduced Category 12 emissions (end-of-life disposal of sold products). Life cycle assessment of reduced CO2 emission Although CO2 is generated during the manufacture of materials and intermediate products in the Asahi Kasei Group, there are also many examples of products which contribute to reduced CO2 emissions during use. LCA calculation takes such contribution into account and determines the amount of CO2 reduction achieved over the product life cycle. By expanding sales of such products and commercializing new products and technologies that enable signifi cant reduction of CO2 emission based on LCA, we contribute to the overall reduction of greenhouse gas emission throughout the supply chain. Global warming conscious products In April 2012, we formulated guidelines on global warming conscious products. Having formulated a similar set of guidelines in 2003 for eco-friendly products, the Asahi Kasei Group decided to formulate a new set of guidelines for global warming conscious products given recent demand both in Japan and overseas. ‘09 ‘10 ‘11 ‘12 ‘13 FY In accordance with these guidelines, we have certifi ed the ‘05 Baseline 1990 Index set at Kyoto Protocol CO2 N2O CH4 HFCs PFCs SF6 Scope 3 emissions The domestic Japanese portion of Scope 3 emissions over time has been calculated for all operations except Asahi Kasei Pharma, yielding data on 99% of such emissions for the entire Asahi Kasei Group. Our Scope 3 emissions have steadily declined from fi scal 2005 to fi scal 2013, with some fl uctuation due to the global fi nancial crisis, and in fi scal 2013 they were some 22% lower than in fi scal 2005. Scope 3 emissions in Japan (Million tons CO2 equivalent) 8 7.20 7.22 7.00 6.82 6.90 6.70 6.03 5.91 5.63 22% 7 6 5 4 3 2 1 0 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 FY Purchased products and services Capital goods Fuel and energy related activities not included in Scope 1 or Scope 2 Upstream transport/distribution Waste emitted from businesses Business travel Employees’ commuting Upstream leased assets Use of sold products End-of-life disposal of sold products products in the following chart as global warming conscious products. List of global warming conscious products Rank Product name A Hall ICs and Hall elements for DC motors used in air conditioners A A A A Ion-exchange membrane electrolysis system for caustic soda Synthetic rubber for fuel-effi cient tires Phosgene-free polycarbonate production process Fusion™ 3D woven fabric for energy saving humidifi er fi lters B Hebel Haus™ with power generating, effi ciency, and conservation functions B Hebel Haus™ with next-generation insulation B Sunfort™ photosensitive dry fi lm B Hipore™ lithium-ion battery separator for electric and hybrid electric vehicles B Asaclean™ plastic molding machine purging agent C Neoma™ foam insulation panels for homes Rank A: LCA/CO2 reduction of at least 500,000 t-CO2/y Rank B: LCA/CO2 reduction of at least 100,000 t-CO2/y Rank C: LCA/CO2 reduction of at least 10,000 t-CO2/y Asahi Kasei Report 2014 43 *2014旭化成_e本文_1002入稿校了.indd 43 *2014旭化成_e本文_1002入稿校了.indd 43 2014/10/20 8:40 2014/10/20 8:40 Overview of environmental impacts The diagram below describes the environmental impacts of business activities at Asahi Kasei Group plants. As in our Group Vision of “harmony with the natural environment,” the Asahi Kasei Group considers environmental preservation as one of the most important tasks. Our major focuses are on 1) prevention of global warming, 2) promotion of a recycling-oriented society, 3) management of chemical substances, and 4) preservation of biodiversity. For prevention of global warming, we have established new indexes and targets to curtail greenhouse gas emissions to be achieved by fi scal 2020. Regarding promotion of a recycling-oriented society, we achieved zero emissions of industrial wastes in fi scal 2010 and are working to maintain this. Furthermore, as a chemical company, we are working to promote safe handling of chemical substances and actively provide safety information. We are also making efforts to reduce the impact of our business activities on biodiversity. Asahi Kasei Group Main Environmental Impacts (FY 2013) Water 271 million m3 Asahi Kasei Group plants Energy 5.3×1016 J Including hydroelectric power (converted in accordance with Japan’s Act on the Rational Use of Energy) INPUT Materials Including 3.98 million tons PRTR-specified substances OUTPUT Atmospheric emissions 6,600 tons SSOx: 3,700 tons NOx: Soot and dust: 150 tons PRTR-specified substances: 400 tons 1,300 tons Regulated VOCs: Greenhouse gas emissions: 4.11 million tons CO2 equivalent Release to soil PRTR-specified substances: 0 tons Industrial waste Effluent water Effluent waste: 267,000 tons Of which, landfilled: 1,200 tons Volume: COD of effluent: Nitrogen: Phosphorus: PRTR-specified substances: 210 million m3 800 tons 6,000 tons 26 tons 86 tons Products Preservation of biodiversity Basic policy To ensure the sustainable utilization of living resources, due consideration is given to reducing the impact of our business activities on biodiversity, and we have established guidelines for the preservation of biodiversity. Based on this guideline, the Asahi Kasei Group began examining the impact of our business activities on biodiversity. In order to promote business activity with due concern for biodiversity, we are working to raise awareness among personnel by various means including our RC education program. Notable actions in fi scal 2013 Through the examination of the impact of our business activities on biodiversity, we came to realize the extreme importance of biological resources and ecosystem services for our operations. In any case of ecosystem services being newly used or a change in use of biological resources, we confi rm that no problem will be caused. Our plants and offi ces are undertaking a variety of initiatives to preserve biodiversity in each location. Nobeoka: In Nobeoka, we are studying the impact of forest thinning as part of the Nobeoka City Satoyama Preservation Initiative. Our study is focused on the impact on the forest environment of our use of forest thinnings as biomass fuel for power generation, depending on the method of thinning. In fi scal 2012 we studied the forest prior to thinning, and in fi scal 2013 we performed thinning and studied the forest immediately afterward. In fi scal 2014 we will evaluate effect on the forest one year after thinning. Fuji: In Fuji, we created a local biotope called the Asahi Woods of Life at our plant and laboratory complex, recreating the ecosystem of the local area. Many of our employees and local residents participate in biodiversity-related activities such as planting trees, planting and harvesting rice, and watching fi refl ies. 44 Asahi Kasei Report 2014 Moriyama: In Moriyama, we are working to remove foreign species and protect native species of fi sh based on a vision of being the world’s best factory site located near freshwater fi sh, as part of a program to protect the natural water environment of Lake Biwa. When effl uent water fl ow was suspended during a plant shut-down for maintenance in fi scal 2013, we removed some 1,400 fi sh of foreign species, totaling 95 kg. We also initiated a program to utilize green space within the plant grounds as a place for personnel to relax and enjoy the natural biodiversity of the area. Promoting a recycling-oriented society The Asahi Kasei Group is working to reduce the amount of industrial waste for fi nal disposal through the “3-Rs” of reduction, reuse, and recycling in order to help build a recycling-oriented society. In fi scal 2013, we adopted more challenging targets of a fi nal disposal rate of 0.3% or less and a recycling rate of 85% or more of the total amount of industrial waste generated. Although we achieved a recycling rate of 91%, we missed our target fi nal disposal rate by achieving 0.5%, the same as the previous year. We are working to gain further improvements through increased separation and greater selectivity in disposal contractors. Waste containing PCBs* is stored under strict control in stainless steel vessels. Plans for disposal are advancing, including for waste with minimal amounts of PCBs. We enhanced our management of off-site treatment of industrial waste by expanding the use of electronic manifests. We also performed periodic on-site inspections of consigned fi rms to ensure that proper disposal is performed in accordance with sound systems of control. * PCBs (polychlorinated biphenyls) are persistent and pose a risk to the living environment and human health. Their manufacture and use is essentially prohibited in Japan. *2014旭化成_e本文_1002入稿校了.indd 44 *2014旭化成_e本文_1002入稿校了.indd 44 2014/10/20 8:40 2014/10/20 8:40 Flow of industrial waste, FY 2013* (thousand tons) On-site treatment Off-site treatment Waste generated 267.0 (100%) Recycling 105.4 (39.5%) Volume reduction by incineration, dehydration, etc 18.2 (6.8%) On-site landfill 0.0 (0.0%) Effluent waste 142.7 (53.4%) Recycling 136.5 (51.1%) Volume reduction by incineration, dehydration, etc 4.9 (1.8%) Final disposal 1.2 (0.5%) * Excluding industrial waste generated at the construction sites of Asahi Kasei Homes. 1 PRTR: Pollutant release and transfer register. Under the PRTR Law, releases to the environment and off-site transfers of specifi c hazardous chemical substances must be monitored and recorded for each production facility and operating site. Results are reported to the government, which publishes aggregate results. 2 VOC: Volatile organic compound. Although the term generally applies to any organic compound which is in gaseous state at the time of release, regulations for the control of their release exclude methane and some fl uorocarbons which do not form oxidants. Reduction of chemical substances The Asahi Kasei Group makes an effort to reduce the release of chemical substances. These chemicals include substances specifi ed in the Air Pollution Control Act, Water Pollution Control Act, and the PRTR1 Law, and other substances which we have voluntarily designated for reduction. Priority for reduction is based on the degree of hazardousness and amount of release. Release of PRTR-specifi ed substances and VOC2 emission were reduced by 90% and 87%, respectively from fi scal 2000. Product safety To ensure the provision of products that the customer can use safely and reliably, the Asahi Kasei Group constantly strives to improve product safety and product quality, while maintaining consistent production control. In fi scal 2013, we once again met our target of no serious product safety incidents. Prevention of product safety incidents Consumer satisfaction and safety Products sold by the Asahi Kasei Group range from industrial materials to consumer products. Many of the materials we sell are used in products which are purchased by ordinary consumers. Consumer satisfaction is therefore the ultimate measure of our success in the provision of safe, high-quality products. We strive to maintain product quality and safety through continual attention to production control to ensure that the products used by consumers are completely free of safety defects. Product safety guidelines Group-wide product safety guidelines have been prepared to secure product safety and prevent the occurrence of product safety incidents. The guidelines specify matters to be controlled throughout the process from material purchase through use and disposal. The guidelines are centered on risk assessment during the development stage to ensure product safety prior to marketing. Specifi c product safety measures for individual products are applied by each core operating company in accordance with the guidelines. Managing chemical substances To ensure the safety of products and production processes in the Asahi Kasei Group, we maintain awareness of the properties of the chemical substances we use, and manage them strictly and appropriately throughout each phase from materials procurement to production, use, and disposal. Outline of efforts for product safety and chemical substance management The Asahi Kasei Group routinely performs employee education on product liability, chemical product safety, and equipment safety, along with risk assessment. We examine the substance of complaints about our products and apply lessons learned to our quality assurance systems (QMS and GMP) as part of the continuing effort to ensure product safety and avoid complaints. With regard to the safety of chemical products, the Global Harmonized System of Classifi cation and Labeling of Chemicals (GHS) has been introduced in Japan in accordance with a United Nations advisory. We have revised our SDSs for compatibility with GHS and have labeled our chemical products to make safety information more visible. In addition to their useful properties, many of our products are potentially hazardous if handled improperly. We therefore provide a range of information for safe use and handling of our products, continuously review the safety of our products, and strive to ensure that the safety information that we provide is easy to understand and apply. Asahi Kasei Report 2014 45 *2014旭化成_e本文_1002入稿校了.indd 45 *2014旭化成_e本文_1002入稿校了.indd 45 2014/10/20 8:40 2014/10/20 8:40 Operational safety To achieve safe operations, it is essential to build highly safe plants based on process hazard assessment prior to construction, to perform sound plant maintenance, and to operate facilities in a stable and safe manner. The Asahi Kasei Group avoids industrial accidents through risk assessments prior to the construction of new plants, periodic inspections of existing plants performed by auditors specialized in fi re and explosion prevention, process reviews from the perspective of preventing abnormal reactions and ensuring interlock functions, and process reviews corresponding to the age of facilities. In fi scal 2013, we completed a program of on-site confi rmation from the perspective of preventing abnormal reactions and ensuring interlock functions. There were no industrial accidents during fi scal 2013. Management of operational safety Our ongoing, autonomous program to ensure operational safety includes safety assessment and hazard identifi cation in accordance with a basic safety management policy, and specifi c plans are implemented on both annual and multi-year cycles. Safe, stable plant operation Given our diverse range of operations that include Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care, the Asahi Kasei Group has plants with a wide variety of different characteristics. No single approach to safety would be appropriate for all plants. We employ a systematic process to tailor the safety effort to each plant’s specifi c requirements. This includes the use of PDCA cycles to ensure the appropriateness of the maintenance standards for each individual unit of equipment. In addition, safety information and know-how are shared across the Asahi Kasei Group through group-wide plant engineering conferences with four specialist panels: Formulation of optimum systematic maintenance programs, establishment of standards and criteria, formulation of training systems for maintenance engineers, and sharing engineering information. Training for operational safety At our petrochemical sites in Mizushima and Kawasaki, the Asahi Operation Academy (AOA) serves as the training center to cultivate the skills necessary to operate petrochemical plants. AOA teaches the principles and structures of equipment, heightening the ability to identify the cause of equipment failure and to respond it. Miniature plants and simulators are used at AOA to provide hands-on experience with controls and instrumentation. Workplace safety and hygiene The effort to prevent workplace accidents is integrated in a comprehensive OHSMS* program that combines conventional safety initiatives—such as tidiness/orderliness/cleanliness, reporting of near-accidents and potential hazards, hazard prediction analysis, safety patrols, and case studies—with risk assessments and a prevention-oriented plan-do-check-act (PDCA) system. * Occupational Health and Safety Management System. A standardized management system used to confi rm that continuous improvement is being applied to measures to minimize the risks of workplace injuries and to prevent the emergence of future risks. Occurrence of workplace injuries Of the 20 workplace injuries that occurred during fi scal 2013, 10% fell into the “caught in/between” category, which can easily result in severe injury. Although the proportion is lower than the 22%, average of fi scal 2003 to 2012, we continue to strive to reduce accidents in the “caught in/between” category by eliminating sources of danger and enhancing safeguards. In fi scal 2012, we began an ongoing program of comprehensive plant inspections that incorporates fresh perspectives from outside experts and from our personnel of different sites and different core operating companies. We also formulated a set of guidelines on machinery safety in accordance with ISO12100* and in fi scal 2014 began machinery risk assessments by designers in the case of building new equipment or modifying existing equipment, with deliberation among related parties as part of the equipment inspection. The four categories of fall on the same level, fall from Incidence of workplace injury by event category, FY 2013 in Japan Incidence of workplace injury by event category, FY 2003–2012 in Japan Caught in/between machinery 5% Caught in something else 5% Traffic accident 14% Fall on same level 10% Others Hit by flying/ falling object 8% 2% Total 20 cases Fall from height 10% Kickback/overexertion 10% Fire 5% Contact with high-temperature substance/object 4% Explosion or rupture 4% Total 111 cases Caught in/ between machinery 20% Caught in something else 3% Fall on same level 19% Fall from height 13% Kickback/overexertion 13% Traffic accident 40% Hit by flying/falling object 10% Contact with high-temperature substance/object 5% 46 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 46 *2014旭化成_e本文_1002入稿校了.indd 46 2014/10/20 8:40 2014/10/20 8:40 height, kickback/overexertion, and traffi c accident accounted for 70% of all workplace injuries in fi scal 2013. To prevent these common accidents that could occur even in non-factory workplaces such as sales offi ces or headquarters, we are promoting safety activities in all workplaces and renewing our emphasis on a culture of safety. * ISO12100 specifi es principles for achieving safety in machinery design and principles of risk assessment and risk reduction. Frequency rate* Severity rate* (%) 1.2 1.0 0.8 0.6 0.4 0.2 0.0 0.99 0.98 0.72 0.72 0.22 0.21 1.05 0.88 0.36 0.94 0.82 0.40 1.0 0.85 0.16 (%) 0.20 0.16 0.12 0.08 0.04 0.00 0.169 0.153 0.12 0.12 0.08 0.10 0.10 0.13 0.08 0.09 0.05 0.008 0.005 0.04 0.013 ‘13 FY ‘09 ‘10 ‘11 ‘12 ‘13 FY ‘09 ‘10 ‘11 ‘12 Asahi Kasei Group Chemical industry, Japan Manufacturing industries, Japan Asahi Kasei Group Chemical industry, Japan Manufacturing industries, Japan Note: Fiscal years for the Asahi Kasei Group, calendar years for the chemical industry and manufacturing industries in Japan. Notes: 1. Fiscal years for the Asahi Kasei Group, calendar years for the chemical industry * Frequency rate: Number of accidental deaths and injuries resulting in the loss of one or more workdays, per million man-hours worked. Our goal of 0.1 or less is extremely ambitious. At a plant with 100 workers, it would mean only one worker in 50 years suffered from a workplace injury which resulted in a day off. and manufacturing industries in Japan. 2. The severity rate increased in fi scal 2011 because of one fatal “caught in machinery” accident and in fi scal 2012 because of one “fall on same level” accident that caused lasting injury (Level 2 Disability). * Lost workdays, severity-weighted, per thousand man-hours worked. Health maintenance The Asahi Kasei Group implements various activities to help employees maintain and advance their mental and physical well-being in accordance with its health management guidelines, including screening for lifestyle-related diseases and mental health checkups. Enhanced health management framework In fi scal 2013 we enhanced the health maintenance system for independent plants and smaller offi ces by establishing a framework for them to receive the support of specialist industrial physicians as necessary in the main regions. We also began providing health guidance to salespeople stationed throughout Japan and to personnel stationed overseas using video conferencing systems, etc. Health maintenance and promotion for employees The Asahi Kasei Group has provided personnel with health guidance and exercise guidance by outside experts and health maintenance staff in each location. In April 2013, with a revision of the standards applied to indicate health warning signs based on the results of annual checkups, we reevaluated past results to identify trends based on the new standards. This indicated that the proportion of employees with health warning signs is remaining generally unchanged, while BMI and the ratio of employees who smoke are gradually decreasing. Beginning in fi scal 2013 our employee health insurance association revised its specifi ed health guidance in accordance with the Act of Assurance of Medical Care for Elderly People, utilizing a health improvement program that enables exercise guidance to be selected in addition to health guidance. Mental health and care The Asahi Kasei Group is working to improve the workplace environment by enhancing its four complimentary approaches to care in accordance with its mental health care guidelines. For self-care by individual employees and care by industrial medical staff, in fi scal 2013 we began full implementation of an intranet- based electronic diagnosis system developed by Fujitsu Software Technologies Ltd. The system has been used to survey stress at 20 locations, with appropriate follow-up implemented. Ongoing stress surveys will be performed annually at each location. In addition to surveying the stress level of individual employees, this system analyzes workplace stress to help improve the workplace environment as part of our effort for care by line of authority. Ratio of employees with health warning signs 60 50 40 30 20 59 59 42.2 29 24 ‘11 42.3 27 24 ‘12 59 42.4 27 24 ‘13 FY Average age Ratio of employees with health warning signs (%) BMI Ratio of employees who smoke (%) Asahi Kasei Report 2014 47 *2014旭化成_e本文_1002入稿校了.indd 47 *2014旭化成_e本文_1002入稿校了.indd 47 2014/10/20 8:40 2014/10/20 8:40 Corporate citizenship We are committed to advancing in harmony with society from a global perspective through fair information disclosure and the proactive employment of management resources for corporate responsibility and citizenship. Stakeholder dialog Different corporate organs hold responsibility for fair and open dialog with each of our different groups of stakeholders. Stakeholders Customers Shareholders, investors Suppliers Local communities Corporate Communications at Asahi Kasei Corp. Communications sections at core operating companies Marketing and sales departments, consumer contact offices Investor Relations at Asahi Kasei Corp. 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(cid:84)(cid:69)(cid:76)(cid:69)(cid:80)(cid:72)(cid:79)(cid:78)(cid:69)(cid:12)(cid:0)(cid:87)(cid:69)(cid:66)(cid:83)(cid:73)(cid:84)(cid:69)(cid:12)(cid:0) (cid:69)(cid:84)(cid:67)(cid:14) (cid:115)(cid:0)(cid:41)(cid:83)(cid:83)(cid:85)(cid:73)(cid:78)(cid:71)(cid:0)(cid:78)(cid:69)(cid:87)(cid:83)(cid:0)(cid:82)(cid:69)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:83) (cid:115)(cid:0)(cid:40)(cid:79)(cid:76)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:78)(cid:69)(cid:87)(cid:83)(cid:0) (cid:67)(cid:79)(cid:78)(cid:70)(cid:69)(cid:82)(cid:69)(cid:78)(cid:67)(cid:69)(cid:83) (cid:115)(cid:0)(cid:41)(cid:83)(cid:83)(cid:85)(cid:73)(cid:78)(cid:71)(cid:0)(cid:68)(cid:79)(cid:67)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:0)(cid:70)(cid:79)(cid:82)(cid:0) (cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69) (cid:115)(cid:0)(cid:55)(cid:69)(cid:66)(cid:83)(cid:73)(cid:84)(cid:69)(cid:0)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:0)(cid:79)(cid:70)(cid:0) (cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78) (cid:115)(cid:0)(cid:50)(cid:69)(cid:83)(cid:80)(cid:79)(cid:78)(cid:68)(cid:73)(cid:78)(cid:71)(cid:0)(cid:84)(cid:79)(cid:0) (cid:35)(cid:51)(cid:50)(cid:13)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:0) (cid:81)(cid:85)(cid:69)(cid:83)(cid:84)(cid:73)(cid:79)(cid:78)(cid:78)(cid:65)(cid:73)(cid:82)(cid:69)(cid:83) (cid:115)(cid:0)(cid:48)(cid:82)(cid:79)(cid:77)(cid:79)(cid:84)(cid:73)(cid:78)(cid:71)(cid:0)(cid:83)(cid:79)(cid:67)(cid:73)(cid:65)(cid:76)(cid:0) (cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:0)(cid:65)(cid:67)(cid:84)(cid:73)(cid:86)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83) Asahi Kasei Group Customer relations For materials, intermediates, and devices, communication with our customers is handled by sales departments and R&D departments. For consumer products such as Saran Wrap™ and Frosch™, pharmaceuticals, and Hebel Haus™, communication with our customers is handled by the customer support center of each product. Principled supplier relationships A relationship of mutual trust with our suppliers is fostered through fair and principled purchasing practices based on regulatory compliance and respect for the environment and human rights. The Asahi Kasei Group Purchasing and Procurement Policy Purchasing departments throughout the Asahi Kasei Group regard suppliers as important partners and work to build relationships with them based on sincerity in accordance with our Group Philosophy. To this end, we are placing greater emphasis on CSR in accordance with our Procurement Policy which was revised in fi scal 2011. The Asahi Kasei Group Purchasing and Procurement Policy—Basic Policy 1 Compliance 2 Fairness and impartiality 3 Open door principle 4 CSR-focused procurement We uphold all laws relevant to purchasing transactions as well as the Asahi Kasei Group’s internal regulations. Selection of bids and conclusion of contracts are performed in a fair and impartial manner. We provide fair opportunities to any potential supplier, both domestic and overseas. We perform purchasing in close coordination with our group-wide activities for CSR. 5 Partnership We strive to deepen mutual understanding and build relationships of trust with our suppliers. 48 Asahi Kasei Report 2014 Focus on CSR in purchasing and procurement In fi scal 2013, Asahi Kasei Group asked major suppliers of materials and construction services to participate in a CSR survey. Items covered included CSR promotion systems, compliance, environmental safety, risk management, product safety, human rights and labor, and information security management. The survey helped to promote understanding of our efforts for CSR, and we are encouraging suppliers to consider CSR issues in their dealings with the Asahi Kasei Group. Supplier relations at production sites Safety seminars are periodically held at our principal production sites to discuss accident prevention and exchange information with suppliers. Safety seminar in Kawasaki, Kanagawa *2014旭化成_e本文_1002入稿校了.indd 48 *2014旭化成_e本文_1002入稿校了.indd 48 2014/10/20 8:40 2014/10/20 8:40 For more information, please refer to the Asahi Kasei Group CSR Website. CSR http://www.asahi-kasei.co.jp/asahi/en/csr/ Public outreach We work to honor and respect the local culture of each community where our operations are based, and to maintain effective dialog and communication with community members. Openness to the community Measures for community dialog and interaction include regularly held forums and meetings with representatives of local governments and members of local residents associations, and the hosting a variety of events. We also offer plant tours to provide better understanding of our operations and the measures we implement for the environment and safety. In the Nobeoka/Hyuga region of Miyazaki, Japan, we have advanced a comprehensive review of the vulnerability of operations to possible earthquakes and tsunamis, and in fi scal 2013 we constructed two evacuation towers to enable people to quickly reach a safe height in the event of a tsunami. The evacuation towers are available for use not only by our personnel, but also by nearby community members. Neighborhood clean-up (Izunokuni, Shizuoka) Local residents at a cherry blossom event (Suzuka, Mie) Community dialog meeting (Kurashiki, Okayama) Plant tour (Moriyama, Shiga) Evacuation tower (Nobeoka, Miyazaki) Community fellowship The Asahi Kasei Group is involved in a wide range of community-focused activities in accordance with its Basic Framework focused on the three themes of Nurturing the Next Generation, Coexistence with the Environment, and Promotion of Culture, Art, and Sports, under our Community Fellowship Policy. Community Fellowship Policy 1 2 3 Effective utilization of our human resources and technologies to advance community fellowship based on the unique characteristics of the Asahi Kasei Group. Striving for meaningful community fellowship actions with a constant awareness of our objectives and effectiveness. Supporting and nurturing participation in community fellowship by employees, encouraging volunteerism and individual initiative. Basic Framework Nurturing the Next Generation Coexistence with the Environment Promotion of Culture, Art, and Sports Community fellowship activities Nurturing the Next Generation To promote understanding and heighten interest in science and technology among elementary, junior high, and high school students, we visit schools and host visits by students to factories to give explanations and demonstrations of science and technology and on environmental issues. We also support career development with occupational lectures and problem-solving training. In fi scal 2013, a total of some 3,100 students of 90 schools participated. The Asahi Kasei Group provides sponsorship for chemistry experiment shows and other science-related events that give children an opportunity to learn about science and chemistry in a fun way. We also sponsor educational events organized by newspaper companies that provide opportunities for children to learn about science and the environment. Coexistence with the Environment In addition to our afforestation activities in Miyazaki and Shizuoka, Japan, since June 2011 we have participated in an afforestation project in the Horqin Desert of Inner Mongolia, China. In fi scal 2013, trees were planted on April 18. Promotion of Culture, Art, and Sports The Asahi Kasei Himuka Cultural Foundation was established in 1985 to enrich the environment of day-to-day life and culture in Miyazaki Prefecture, with a wide range of cultural activities being held. We also contribute to community fellowship through our corporate distance running and judo teams. Science class (Fuji, Shizuoka) Children’s chemistry experiment show (Chiyoda-ku, Tokyo) Japan Student Science Award (Koto-ku, Tokyo) Tree planting (Inner Mongolia, China) Judo lesson for students (Nobeoka, Miyazaki) Asahi Kasei Report 2014 49 *2014旭化成_e本文_1002入稿校了.indd 49 *2014旭化成_e本文_1002入稿校了.indd 49 2014/10/20 8:40 2014/10/20 8:40 Corporate Governance Basic Concept for Corporate Governance We believe that constant effort to increase the effi ciency 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 infl uence 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 an Internal Audit Dept. 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 Confi guration (as of June 27, 2014) Holding company Board of Corporate Auditors Shareholders Board of Directors Group Advisory Committee Chairman President Internal Audit Dept. Strategic Management Council Group staff functions (cid:115)(cid:0)(cid:51)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:73)(cid:67)(cid:0)(cid:80)(cid:76)(cid:65)(cid:78)(cid:78)(cid:73)(cid:78)(cid:71)(cid:0)(cid:6)(cid:0)(cid:65)(cid:78)(cid:65)(cid:76)(cid:89)(cid:83)(cid:73)(cid:83) (cid:115)(cid:0)(cid:35)(cid:79)(cid:77)(cid:80)(cid:76)(cid:73)(cid:65)(cid:78)(cid:67)(cid:69)(cid:0)(cid:6)(cid:0)(cid:82)(cid:73)(cid:83)(cid:75)(cid:0)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84) (cid:115)(cid:0)(cid:50)(cid:69)(cid:83)(cid:79)(cid:85)(cid:82)(cid:67)(cid:69)(cid:83)(cid:0)(cid:65)(cid:68)(cid:77)(cid:73)(cid:78)(cid:73)(cid:83)(cid:84)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78) Corporate Research & Development Core operating companies Asahi Kasei Chemicals Asahi Kasei Fibers Asahi Kasei Homes Chemicals Fibers, textiles Housing Asahi Kasei Construction Materials Construction materials Asahi Kasei Microdevices Asahi Kasei E-materials Asahi Kasei Pharma Asahi Kasei Medical ZOLL Medical Electronic devices Electronic materials Pharmaceuticals Medical devices and systems Critical care devices and systems Chemicals & Fibers business sector Homes & Construction Materials business sector Electronics business sector Health Care business sector 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. 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. 50 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 50 *2014旭化成_e本文_1002入稿校了.indd 50 2014/10/20 8:40 2014/10/20 8:40 Board of Corporate Auditors Comprises fi ve Corporate Auditors, three 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. We employ an Executive Offi cer system, under which we have nine Directors, including three Outside Directors, and thirteen Executive Offi cers, including fi ve who concurrently serve as Director, as well as a Corporate Auditor system, under which we have fi ve Corporate Auditors, including three Outside Corporate 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 nine 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 benefi t of the overall management of the Asahi Kasei Group. 4) The Internal Audit Dept. 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 the Internal Audit Dept., so that all information regarding results of internal audits in the Asahi Kasei Group are centralized at the Internal Audit Dept. Outside Directors and Corporate Auditors Auditors (as of June 27, 2014). 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 indemnifi cation 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. 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 Offi ce has multiple dedicated personnel who, independently from Directors, support the Corporate Auditors in their duties. 6) PricewaterhouseCoopers Aarata performs fi nancial 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, 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 confi guration and a company with a Board of Corporate Auditors. We have three Outside Directors and three Outside Corporate Auditors. The function of Outside Directors is to confi rm that management decisions are made appropriately from an independent perspective based on their wealth of experience and broad range of insight. The function of Outside Corporate Auditors is to audit based on their wealth of experience, broad range of insight, and specialized knowledge of corporate law, fi nance, and accounting. Although we do not have specifi c standards for judging the independence of Outside Directors and Corporate Auditors, in the selection of candidates for election as Outside Director and Outside Corporate Auditor, we investigate their independence in accordance with the standards for “Independent Director/ Auditor” established by relevant fi nancial instruments exchanges to confi rm if they have ever been employed by the company, ever been an important counterparty, and ever been employed by an important counterparty, and furthermore if they have ever received a large amount of money or other property from the company. We then make a comprehensive judgment as to whether or not any confl ict with the interests of ordinary shareholders would arise. The relevant fi nancial instruments exchanges have been notifi ed that all of our Outside Directors and Outside Corporate Auditors are designated as Independent Director/Auditor. Asahi Kasei Report 2014 51 *2014旭化成_e本文_1002入稿校了.indd 51 *2014旭化成_e本文_1002入稿校了.indd 51 2014/10/20 8:40 2014/10/20 8:40 Audits The Internal Audit Dept. (16 personnel as of March 31, 2014) is a corporate organ under the direct authority of the President of the holding company. Each year, the Internal Audit Dept. 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 Offi ce provides staff to support Corporate Auditors in their duties. PricewaterhouseCoopers Aarata is contracted as the Independent Auditors to perform fi nancial audits in accordance with the Companies Act and Financial Instruments and Exchange Act. Partners of the Independent Auditors designated to perform Withdrawal of Shareholder Rights Plan The Company adopted measures to respond to large acquisitions of shares (takeover defense measures) based on a resolution at the 117th Ordinary General Meeting of Shareholders held on June 27, 2008, and after partial revision the takeover defense measures were renewed through a resolution at the 120th Ordinary General Meeting of Shareholders held on June 29, 2011 (the revised takeover defense measures hereinafter referred to as the Shareholder Rights Plan). Subsequently, the Company has concentrated on achieving its “For Tomorrow 2015” strategic management initiative in order to increase corporate value and the common interest of shareholders, and the Company is striving to enhance corporate governance including by increasing the number of Outside Corporate Auditors. Under these circumstances, with the duration of the Shareholder Rights Plan approaching its end, and with the Company’s operating climate having changed since the time of the renewal of the Shareholder Rights Plan, the Company carefully considered the necessity of the Shareholder Rights Plan. The Company determined that the importance of continuation of Compliance the audit for fi scal 2012 were Mr. Keiichi Ohtsuka, Mr. Takahiro Nakazawa, and Mr. Taisuke Shiino. The Independent Auditors form a team of assistants for performance of the audit in accordance with its audit plan. The team mainly comprises certifi ed public accountants and junior accountants, and also includes certifi ed information systems accountants and other specialist accountants. The Internal Audit Dept., the Board of Corporate Auditors, and the Corporate Auditors of core operating companies and other subsidiaries regularly meet to confi rm 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 fi nancial audit of Asahi Kasei each quarter and each fi scal year. the Shareholder Rights Plan has declined in relative terms for the further enhancement of the corporate value of the Asahi Kasei Group, and on May 9, 2014, the Company’s Board of Directors adopted a resolution not to renew the Shareholder Rights Plan but to withdraw it at the close of the 123rd Ordinary General Meeting of Shareholders. Irrespective of whether or not the Shareholder Rights Plan exists, the Company will continue to strive to secure and enhance corporate value and the common interest of shareholders from a medium-to-long term perspective. Even after the withdrawal of the Shareholder Rights Plan, with respect to parties who would make large acquisitions of the Company’s shares, the Company will seek to obtain information as necessary and suffi cient for all shareholders to make an appropriate judgment regarding such large acquisitions of shares, disclose the opinion of the Company’s Board of Directors, work to secure a time period for all shareholders to consider the matter, and otherwise take appropriate measures within the scope permitted by the Financial Instruments and Exchange Act, the Companies Act, and other relevant laws and ordinances. 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. 52 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 52 *2014旭化成_e本文_1002入稿校了.indd 52 2014/10/20 8:40 2014/10/20 8:40 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. • With our Group Mission of “contributing to life and living for people around the world,” we hold “progressing in concert with society, and honoring the laws and standards of society as a good corporate 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. • 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 The Asahi Kasei Group has a Risk Management Committee 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, which were established by the Board of Directors in March 2007 (effective April 1, 2007), provide clear guidelines to heighten the capability and effectiveness for risk management and emergency response throughout the Asahi Kasei Group. As part of the effort for preparedness for the possibility of a major earthquake in the Greater Tokyo Metropolitan area, we held drills of the initial actions of our emergency response headquarters four times during fi scal 2013. We also advanced preparations for an alternative emergency response headquarters to use if it becomes impossible to use the head offi ce in Tokyo, including by specifying the functions and duties of the alternative emergency response headquarters. To enhance the ability of local operating sites to deal with emergencies, we held media training workshops including mock press conferences. In addition, we began studying the adoption of a system to effi ciently confi rm the well-being of personnel stationed overseas and travelling on business overseas in the event of an emergency. *2014旭化成_e本文_1002入稿校了.indd 53 *2014旭化成_e本文_1002入稿校了.indd 53 2014/10/20 8:40 2014/10/20 8:40 Asahi Kasei Report 2014 53 Directors, Corporate Auditors, Executive Offi cers (As of June 27, 2014) Ichiro Itoh Chairman & Director Toshio Asano President & Representative Director Presidential Executive Offi cer Masahito Hirai Representative Director Vice-Presidential Executive Offi cer Yuji Kobayashi Representative Director Primary Executive Offi cer Hideki Kobori Representative Director Primary Executive Offi cer Hiroshi Kobayashi Director Senior Executive Offi cer Norio Ichino Outside Director Masumi Shiraishi Outside Director Kenyu Adachi Outside Director Toshiyuki Kawasaki Corporate Auditor Kazuo Tezuka Outside Corporate Auditor Katsuhiko Yamazoe Senior Executive Offi cer Naoki Okada Executive Offi cer Hajime Nagahara Corporate Auditor Koji Kobayashi Outside Corporate Auditor Shinichiro Nei Lead Executive Offi cer Atsushi Nakamura Executive Offi cer Akio Makabe Outside Corporate Auditor Masafumi Nakao Lead Executive Offi cer Shigehiro Horimoto Executive Offi cer Hiroshi Sawayama Lead Executive Offi cer Yoshihiro Wada Lead Executive Offi cer 54 Asahi Kasei Report 2014 *2014旭化成_e本文_1002入稿校了.indd 54 *2014旭化成_e本文_1002入稿校了.indd 54 2014/10/20 8:40 2014/10/20 8:40 Financial Section Contents 56 58 64 66 Consolidated Eleven-Year Summary Management’s Discussion and Analysis Risk Analysis Consolidated Financial Statements 66 Consolidated Balance Sheets 68 Consolidated Statements of Income 69 Consolidated Statements of Comprehensive Income 70 Consolidated Statements of Changes in Net Assets 71 Consolidated Statements of Cash Flows 72 Notes to Consolidated Financial Statements 72 1. Major policies for preparing the consolidated fi nancial statements 72 2. Signifi cant accounting policies 73 3. Changes in signifi cant accounting policies 73 4. Notes to Consolidated Balance Sheets 74 5. Notes to Consolidated Statements of Income 76 6. Notes to Consolidated Statements of Comprehensive Income 77 7. Notes to Consolidated Statements of Changes in Net Assets 78 8. Note to Consolidated Statements of Cash Flows 79 9. Leases 80 10. Financial instruments 83 11. Marketable securities and investment securities 84 12. Derivative fi nancial instruments 86 13. Provision for retirement benefi ts 88 14. Taxes 89 15. Asset retirement obligations 90 16. Business segment information 92 17. Information on related parties 93 18. Per share information 93 19. Subsequent events 94 20. Borrowings Asahi Kasei Report 2014 55 2014旭化成_efs_1002入稿校了.indd 55 2014旭化成_efs_1002入稿校了.indd 55 2014/10/20 8:45 2014/10/20 8:45 Consolidated Eleven-Year Summary Asahi Kasei Corporation and Consolidated Subsidiaries For the years ended March 31 Net salesa Chemicals Life & Living Fibers Homes Construction Materials Electronics Health Care Critical Care Others Domestic sales Overseas sales Operating income Ordinary income Income before income taxes Net income Comprehensive income Net income per share, yen Capital expenditure Depreciation and amortization R&D expenditures Cash dividends per share, yen 2014 2013c 2012 2011d, e 2010d, f ¥1,897,766 ¥1,666,640 ¥1,573,230 ¥1,555,945 ¥1,392,212 791,615 684,582 680,112 699,801 580,709 — 120,890 534,377 55,003 144,995 152,546 79,840 18,499 — 109,613 486,182 51,504 131,148 133,450 52,131 18,031 — 110,849 451,965 46,146 146,113 119,483 — 18,562 — 108,761 409,224 47,418 158,337 116,387 — 16,017 — 101,201 389,728 47,024 142,700 113,207 — 17,642 1,289,054 1,181,429 1,151,705 1,106,656 1,021,803 608,712 143,347 142,865 163,860 101,296 146,102 72.48 92,397 86,052 71,101 17.00 485,211 91,960 95,125 82,302 53,712 117,515 38.43 113,785 80,050 71,120 14.00 421,525 104,258 107,567 94,866 55,766 62,561 39.89 85,124 78,440 66,269 14.00 449,289 122,927 118,219 98,342 60,288 45,088 43.11 66,014 84,092 62,320 11.00 370,409 57,622 56,367 46,056 25,286 — 18.08 83,990 86,166 62,924 10.00 As of March 31 Total assets Inventories Property, plant and equipment Investments and other assets Net worthb Net worth per share, yen Net worth/total assets, % Number of employees 2014 2013 2012 2011 2010 ¥1,915,089 ¥1,800,170 ¥1,410,568 ¥1,425,879 ¥1,368,892 328,540 480,535 285,735 912,699 653.15 47.7 29,127 309,677 461,581 263,704 812,080 581.05 45.1 28,363 279,206 416,119 227,489 706,846 505.72 50.1 25,409 256,248 418,354 220,773 663,566 474.59 46.5 25,016 251,084 447,497 226,331 633,343 452.91 46.3 25,085 a.Beginning with the year ended March 31, 2014, the sequence of segments has been changed to correspond with the classifi cation of our four business sectors: Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care. b. Net assets less minority interests. Through the year ended March 31, 2006, fi gures for shareholders’ equity shown. c. Beginning with the year ended March 31, 2013, Critical Care was added as a new segment in which results of ZOLL Medical Corporation of the US are reported. Critical Care segment results were included beginning on April 27, 2012. d. Beginning with the year ended March 31, 2012, the accounting policy for naphtha resale in the Chemicals segment was changed. This change is applied retroactively to net sales for the years ended March 31, 2008, through March 31, 2011. e. In the year ended March 31, 2011, the Services, Engineering and Others segment was replaced with the Others category. f. In the year ended March 31, 2010, the following segment name changes and intersegment transfers were made. For comparison purposes, results for the year ended March 31, 2009, are recalculated to refl ect these intersegment transfers. (cid:129) The Pharma segment was renamed the Health Care segment, and the Electronics Materials & Devices segment was renamed the Electronics segment. Figures under the previous classifi cations are shown on the same line. (cid:129) Electronic materials operations were transferred from the Chemicals segment and from corporate expenses to the Electronics segment. (cid:129) Leona™ nylon 66 fi lament operations were transferred from the Chemicals segment to the Fibers segment. g. In the year ended March 31, 2008, the Life & Living segment was combined with the Chemicals segment. h. In the year ended March 31, 2006, Leona™ nylon 66 fi lament operations were transferred from the Fibers segment to the Chemicals segment. 56 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 56 2014旭化成_efs_1002入稿校了.indd 56 2014/10/20 8:45 2014/10/20 8:45 Millions of yen, except where noted 2009d, f 2009d 2008d, g 2007 2006h 2005 2004 ¥1,521,178 ¥1,521,178 ¥1,663,778 ¥1,623,791 ¥1,498,620 ¥1,377,697 ¥1,253,534 657,393 709,556 846,224 — 116,405 409,882 60,927 129,655 119,619 — 27,297 — 102,176 409,882 60,927 91,721 119,619 — 27,297 — 114,072 386,227 55,732 113,267 111,232 — 37,024 752,632 52,558 106,639 405,695 60,818 112,094 104,474 — 28,881 660,402 51,942 89,704 404,539 56,512 102,859 105,842 — 26,821 557,439 59,149 104,261 375,755 59,908 93,025 103,933 — 24,228 453,707 59,813 101,514 361,273 60,622 82,484 105,965 — 28,156 1,127,213 1,127,213 1,176,441 1,195,751 1,125,454 1,067,893 1,011,366 393,965 393,965 34,959 32,500 19,031 4,745 — 3.39 34,959 32,500 19,031 4,745 — 3.39 126,725 126,725 79,436 60,849 10.00 79,436 60,849 10.00 487,337 127,656 120,456 105,599 69,945 — 50.01 82,911 73,983 56,170 13.00 428,040 127,801 126,507 114,883 68,575 — 49.00 84,413 71,646 52,426 12.00 373,166 108,726 104,166 94,481 59,668 — 42.46 66,310 69,399 51,467 10.00 309,804 115,809 112,876 91,141 56,454 — 40.16 68,479 71,531 50,715 8.00 242,168 60,932 53,643 54,820 27,672 — 19.62 86,387 64,408 48,420 6.00 2009 2009 2008 2007 2006 2005 2004 ¥1,379,337 ¥1,379,337 ¥1,425,367 ¥1,459,922 ¥1,376,044 ¥1,270,057 ¥1,249,206 273,539 441,271 218,477 603,846 431.77 43.8 24,244 273,539 441,271 218,477 603,846 431.77 43.8 24,244 272,372 424,193 234,873 666,244 476.39 46.7 23,854 240,006 426,959 281,502 645,655 461.50 44.2 23,715 214,062 414,368 284,390 594,211 424.34 43.2 23,030 202,521 419,969 223,958 511,726 365.43 40.3 23,820 181,609 428,302 226,825 450,451 321.41 36.1 25,011 2014旭化成_efs_1002入稿校了.indd 57 2014旭化成_efs_1002入稿校了.indd 57 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 57 Management’s Discussion and Analysis Fiscal year 2013 (April 1, 2013 – March 31, 2014) Operating Environment The global economy during the fi scal year was on a path of Non-operating income and expenses, ordinary income Net non-operating expenses were ¥0.5 billion, a ¥3.6 billion gradual recovery with continuing growth in the US and signs decline from the ¥3.2 billion net non-operating income of a of improvement in Europe, but the management climate was year earlier. Equity in losses of affi liates increased, and foreign obscured by slower growth in China and other emerging exchange gains decreased. As a result, ordinary income economies. Although the Japanese economy was on a path of increased by ¥47.7 billion (50.2%) to ¥142.9 billion. recovery with a correction of the overvalued yen and a wealth effect from higher stock prices resulting in improved corporate earnings and revived consumer spending, the effect of Extraordinary income and loss Extraordinary income of ¥55.5 billion included ¥53.5 billion in instability in the global economy remained a concern. income from compensation for damage. Extraordinary loss of Overview of Consolidated Results Net sales, operating income Consolidated net sales for the fi scal year increased by ¥231.1 billion (13.9%) to ¥1,897.8 billion. Overseas sales increased by ¥123.5 billion (25.5%) to ¥608.7 billion, largely in the ¥34.5 billion included ¥22.5 billion in business structure improvement expenses and ¥5.6 billion in loss on disposal of noncurrent assets. The net extraordinary income of ¥21.0 billion was a ¥33.8 billion improvement from a year ago. Net income With ordinary income of ¥142.9 billion and net extraordinary Chemicals segment, and increased by 3.0 percentage points as income of ¥21.0 billion, income before income taxes and a portion of consolidated net sales from 29.1% to 32.1%. Domestic sales increased by ¥107.6 billion (9.1%) to ¥1,289.1 minority interests was ¥163.9 billion. Income tax expense was ¥61.8 billion (current income taxes of ¥68.2 billion less billion with strong performance in the Homes segment. deferred income taxes of ¥6.4 billion). Minority interests in Operating income increased by ¥51.4 billion (55.9%) to income of consolidated subsidiaries were ¥0.8 billion. As a ¥143.3 billion. As a percentage of net sales, cost of sales result, net income increased by ¥47.6 billion (88.6%) to decreased by 1.4 percentage points to 73.0%. SG&A ¥101.3 billion, and net income per share increased by ¥34.05 increased by ¥33.5 billion, but decreased as a portion of net to ¥72.48 from the ¥38.43 of the previous year. sales by 0.7 percentage points to 19.4% due to the increase in net sales. Operating margin increased by 2.0 percentage points to 7.6%. Net Sales, Overseas Sales Ratio Operating Income, Operating Margin SG&A, SG&A Ratio Net Income, Net Income per Share (¥ billion) 2,000 (%) 40 (¥ billion) 150 (%) 15 (¥ billion) 400 (%) 40 (¥ billion) 100 1,500 1,000 500 0 ’09 ’10 ’11 ’12 ’13 120 90 60 30 0 30 20 10 0 FY 12 9 6 3 0 300 200 100 0 ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 30 75 20 50 10 25 0 0 FY ’09 ’10 ’11 ’12 ’13 Net sales (left scale) Operating income (left scale) SG&A (left scale) Net income (left scale) Overseas sales ratio (right scale) Operating margin (right scale) SG&A ratio (right scale) Net income per share (right scale) 58 Asahi Kasei Report 2014 (¥) 80 60 40 20 0 FY 2014旭化成_efs_1002入稿校了.indd 58 2014旭化成_efs_1002入稿校了.indd 58 2014/10/20 8:45 2014/10/20 8:45 Results by Operating Segment with the effect of the depreciation of the yen, most notably for ion-exchange membranes, and fi rm shipments of coating The Asahi Kasei Group’s operations are described by major materials and of functional chemicals for pharmaceutical business classifi cation: seven reportable segments of manufacture. Chemicals, Fibers, Homes, Construction Materials, Health Care, and Critical Care, together with an “Others” category. Beginning with fi scal 2013, the sequence of reportable Fibers Sales increased by ¥11.3 billion (10.3%) from a year ago to segments has been changed to correspond with the ¥120.9 billion, and operating income increased by ¥4.5 billion classifi cation of our four business sectors: Chemicals & Fibers, (112.5%) to ¥8.6 billion. Homes & Construction Materials, Electronics, and Health Care. Although the cost of various feedstocks rose, operating In the Critical Care segment, results for the year-ago period income in Fibers increased with the effect of the weaker yen were included beginning on April 27, 2012, while results were and fi rm shipments of nonwovens such as Lamous™ artifi cial subject to consolidation throughout the entire period suede for automotive upholstery and of Roica™ elastic beginning with fi scal 2013. polyurethane fi lament. Chemicals Sales increased by ¥107.0 billion (15.6%) from a year ago to Homes Sales increased by ¥48.2 billion (9.9%) from a year ago to ¥791.6 billion, and operating income increased by ¥16.0 ¥534.4 billion, and operating income increased by ¥8.7 billion billion (69.6%) to ¥38.9 billion. (16.1%) to ¥63.0 billion. Orders for order-built homes Chemicals and derivative products operations were increased by ¥8.9 billion (2.2%) to ¥421.3 billion. impacted by low market prices for acrylonitrile and high In order-built homes operations, deliveries of both Hebel feedstock prices, but operating income increased with the Haus™ unit homes and Hebel Maison™ apartment buildings effect of the depreciation of the yen and improved market increased based on strong orders in the previous fi scal year. prices for styrene monomer. Polymer products operations were Operating income rose in real estate operations, with fi rm impacted by high feedstock prices for polyethylene and other rental management, and in remodeling operations, which products, but operating income increased with the effect of enjoyed strong orders for exterior wall painting work. the depreciation of the yen and fi rm shipments of engineering plastics and of synthetic rubber for fuel-effi cient tires. Operating income in specialty products operations increased Chemicals segment operating income increases/decreases Fibers segment operating income increases/decreases Homes segment operating income increases/decreases (¥ billion) 80 Foreign exchange2 +49.5 (¥ billion) 12 Foreign exchange2 +6.0 (¥ billion) 75.0 60 40 20 Sales volume +3.7 Sales prices1 +0.2 22.9 38.9 Operating costs and others -37.4 0 ’12 1 Excluding impact of foreign exchange 2 Impact of foreign exchange on sales prices 8.6 Operating costs and others -3.4 Sales prices1 +1.0 Sales volume +0.9 4.0 10 8 6 4 2 0 54.3 62.5 50.0 37.5 25.0 12.5 ’13 FY ’12 ’13 FY Sales prices +7.5 Sales volume +9.5 63.0 Operating costs and others -8.3 0 ’12 ’13 FY Asahi Kasei Report 2014 59 2014旭化成_efs_1002入稿校了.indd 59 2014旭化成_efs_1002入稿校了.indd 59 2014/10/20 8:45 2014/10/20 8:45 Construction Materials Sales increased by ¥3.5 billion (6.8%) from a year ago to ¥152.5 billion, and operating income increased by ¥14.3 billion (90.0%) to ¥30.3 billion. ¥55.0 billion, and operating income increased by ¥1.5 billion Although pharmaceuticals operations were impacted by (39.0%) to ¥5.5 billion. higher selling, general and administrative expenses such as In autoclaved aerated concrete (AAC) operations, sales of R&D expenses, operating income grew with increased Hebel™ AAC panels increased. In insulation materials, shipments of Teribone™ osteoporosis drug and shipments of Neoma™ high-performance phenolic foam Recomodulin™ recombinant thrombomodulin. In devices- panels increased. In foundation systems, orders for Eazet™ related operations, operating income increased with the effect and ATT Column™ piling systems for small-scale construction of the depreciation of the yen, increased sales of dialysis expanded with the development of new applications. Sales of products and of therapeutic apheresis devices, and increased structural materials increased. shipments of Planova™ virus removal fi lters. Electronics Sales increased by ¥13.8 billion (10.6%) from a year ago to Critical Care Sales increased by ¥27.7 billion (53.2%) from a year ago to ¥145.0 billion, and operating income increased ¥11.4 billion ¥79.8 billion, gross operating income* increased by ¥2.2 (404.1%) to ¥14.2 billion. billion (29.4%) to ¥9.5 billion, and the consolidated operating Although electronic devices operations were impacted by loss decreased by ¥0.1 billion to ¥3.5 billion. The effect of reduced sales prices in each product category, operating amortization of goodwill and other intangible assets, etc., income increased with the effect of the depreciation of the related to acquisition of ZOLL Medical Corporation increased yen and increased shipments of electronic compasses and magnetic sensors for smartphones and other mobile by ¥2.0 billion to ¥13.0 billion. LifeVest™ wearable defi brillator operations expanded applications. Although electronic materials operations were smoothly, and sales of other products such as defi brillators for impacted by reduced sales prices, especially for Hipore™ Li-ion use by medical professionals increased, but selling, general battery separator, operating income increased with the effect and administrative expenses grew with reinforced sales activity. of the depreciation of the yen and increased sales of high-end The increase in sales and the operating loss were enlarged by products in each product category. the difference in the period subject to consolidation. Health Care Sales increased by ¥19.1 billion (14.3%) from a year ago to * Operating income before amortization of goodwill and other intangible assets, etc., related to acquisition of ZOLL by Asahi Kasei. Construction Materials segment operating income increases/decreases Electronics segment operating income increases/decreases Health Care segment operating income increases/decreases (¥ billion) 6 4.0 5 4 3 2 1 0 (¥ billion) 16 5.5 Sales prices +0.5 Sales volume +1.1 Operating costs and others -0.1 Foreign exchange2 +15.4 14.2 Sales volume +6.3 Operating costs and others +0.5 Sales prices1 -10.8 (¥ billion) 35 Foreign exchange2 +5.8 Sales volume +11.9 Sales prices1 -0.1 30.3 Operating costs and others 3.3 15.9 30 25 20 15 10 5 0 ’13 FY ’12 ’13 FY 8 0 2.8 (8) ’12 ’12 ’13 FY 1 Excluding impact of foreign exchange 2 Impact of foreign exchange on sales prices 60 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 60 2014旭化成_efs_1002入稿校了.indd 60 2014/10/20 8:45 2014/10/20 8:45 Others Sales in “Others” increased by ¥0.5 billion (2.6%) from a year Net assets increased by ¥101.3 billion (12.3%) from ¥824.5 billion to ¥925.8 billion. Net income was ¥101.3 ago to ¥18.5 billion, and operating income decreased by ¥0.5 billion, foreign currency translation adjustments increased by billion (20.5%) to ¥1.7 billion. Liquidity and Capital Resources ¥30.3 billion, and net unrealized gain on other securities increased by ¥13.0 billion, while negative ¥25.1 billion was recorded as remeasurements of defi ned benefi t plans, and dividend payments were ¥19.6 billion. As a result, net worth Financial position Total assets at fi scal year end were ¥1,915.1 billion, ¥114.9 per share increased by ¥72.09 to ¥653.15, net worth/total assets increased from 45.1% to 47.7%, and debt-to-equity billion (6.4%) higher than a year earlier. ratio decreased by 0.14 points to 0.33. Current assets increased by ¥70.9 billion (8.7%) to ¥890.4 billion, mainly as cash and deposits increased by ¥42.0 billion, inventories increased by ¥18.9 billion, and notes and accounts receivable–trade increased by ¥10.5 billion. Noncurrent assets increased by ¥44.0 billion (4.5%) to ¥1,024.7 billion, notably with a ¥19.0 billion increase in property, plant and equipment and a ¥13.5 billion increase in investment securities largely due to higher fair market value. While income taxes payable increased by ¥34.5 billion, current liabilities decreased by ¥26.1 billion (4.3%) to ¥576.8 billion, mainly as a result of a ¥60.0 billion decrease in commercial paper and a ¥9.4 billion decrease in short-term loans payable. Noncurrent liabilities increased by ¥39.7 billion (10.6%) to ¥412.5 billion, largely as ¥107.8 billion in provision for retirement benefi ts was replaced by ¥143.5 billion in net defi ned benefi t liability due to a new accounting standard. Interest-bearing debt decreased by ¥77.6 billion (20.3%) to ¥303.9 billion. Critical Care segment operating income increases/decreases Others operating income increases/decreases Sales volume +8.1 Foreign exchange2 +0.1 Sales prices1 -0.4 (¥ billion) 2.5 Sales volume +0.1 2.2 2.0 1.5 1.0 0.5 1.7 Operating costs and others -0.6 (¥ billion) 5.0 2.5 0 (2.5) (5.0) (3.7) ’12 Operating costs and others -7.7 (3.5) ’13 FY 0 ’12 1 Excluding impact of foreign exchange 2 Impact of foreign exchange on sales prices Total Assets, Net Worth (¥ billion) 2,000 1,500 1,000 500 0 ’13 FY ’09 ’10 ’11 ’12 ’13 FY Total assets Net worth Asahi Kasei Report 2014 61 2014旭化成_efs_1002入稿校了.indd 61 2014旭化成_efs_1002入稿校了.indd 61 2014/10/20 8:45 2014/10/20 8:45 Capital expenditure Capital expenditure (capex) was primarily for new and expanded production plant and equipment in long-term growth fi elds. Investments were also made for rationalization, labor-saving, maintenance, and IT systems to bring greater product reliability and cost reductions. Notable capex by operating segment was as follows. Chemicals Construction of facilities for solution-polymerized styrene- butadiene rubber (S-SBR) in Singapore, construction of Capex by operating segment shown below is for facilities for acetonitrile in Korea, rationalization, labor-saving, property, plant and equipment and intangible assets (other and maintenance. than goodwill), combined, excluding consumption tax. A total of ¥92.4 billion was invested during the fi scal year for the expansion of businesses with competitive superiority, particularly in the Chemicals and Electronics segments, as well as for modifi cation and rationalization. Fibers Rationalization, labor-saving, and maintenance. Homes Rationalization, labor-saving, and maintenance. Chemicals Fibers Homes Construction Materials Electronics Health Care Critical Care Others Combined Corporate assets and eliminations Consolidated Totals for the year (¥ million) Compared to previous year (%) 30,754 8,008 8,666 6,371 14,583 9,457 8,697 1,395 87,930 4,466 92,397 63.0 117.2 91.0 291.5 85.7 66.2 160.6 122.4 84.8 44.2 81.2 Construction Materials Capacity expansion for Neoma™ high-performance phenolic foam insulation panels, rationalization, labor-saving, and maintenance. Electronics Construction of facilities for Sunfort™ photosensitive dry fi lm in Changshu, China, capacity expansion for Hipore™ Li-ion battery separator, rationalization, labor-saving, and maintenance. Health Care Construction of new research complex in the Pharmaceuticals Research Center, construction of second manufacturing facility at the Nagoya Pharmaceuticals Plant, rationalization, labor- saving, and maintenance. Critical Care Rationalization, labor-saving, and maintenance. Others Rationalization, labor-saving, and maintenance. Net Worth to Total Assets Interest-Bearing Debt, D/E Ratio Capex, Depreciation and Amortization (%) 60 50 40 30 20 10 0 (¥ billion) 400 0.8 (¥ billion) 120 300 200 100 0 ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 0.6 90 0.4 60 0.2 30 0.0 FY 0 ’09 ’10 ’11 ’12 ’13 FY Interest-bearing debt (left scale) Capex D/E ratio (right scale) Depreciation and amortization 62 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 62 2014旭化成_efs_1002入稿校了.indd 62 2014/10/20 8:45 2014/10/20 8:45 Corporate assets R&D equipment, IT systems, and maintenance. payments. Net cash used in fi nancing activities was ¥105.1 billion, ¥271.3 billion more than a year earlier. Cash fl ows Free cash fl ows* were a positive ¥140.4 billion, as cash generated, principally from income before income taxes and minority interests and from depreciation and amortization, exceeded cash used, * Total of net cash provided by (used in) operating activities and net cash provided by (used in) investment activities. Financial Policy principally for purchase of property, plant and equipment, purchase We aim to increase free cash fl ows with increased earnings of intangible assets, and purchase of investment securities. Cash through enhanced cost effi ciency, greater product fl ows from fi nancing activities were a net ¥105.1 billion used, competitiveness, and business structure improvements, and principally due to redemptions of commercial paper. As a result, with greater capital effi ciency through utilization of group cash and cash equivalents at fi scal year end were ¥143.1 billion, fi nance and maintenance of optimum inventory levels. ¥39.1 billion more than a year earlier. A wide range of fund-raising methods including bank borrowings, bonds, and commercial paper will be utilized Cash fl ows from operating activities Cash used included ¥29.5 billion for income taxes paid and a dynamically in accordance with the fi nancial circumstances of the Asahi Kasei Group in order to obtain stable fi nancing at ¥17.8 billion decrease in notes and accounts payable–trade. low cost. Income before income taxes and minority interests generated These resources will be used to fund strategic ¥163.9 billion and depreciation and amortization generated investments under the “For Tomorrow 2015” strategic ¥86.1 billion. Net cash provided by operating activities was ¥244.2 billion, ¥118.1 billion more than a year earlier. Cash fl ows from investing activities Cash used included ¥80.9 billion for purchase of property, plant management initiative focused on the expansion of world- leading businesses and the creation of new value for society by expanding operations in the fi elds of the environment & energy, residential living, and health care, as well as dividends for shareholders. and equipment for continuing expansion of competitively Advancing these measures will enable us to further superior operations and enhancement of overall competitiveness, enhance corporate value and provide an appropriate return to ¥15.6 billion for purchase of intangible assets, and ¥2.7 billion for shareholders while maintaining discipline for a sound fi nancial purchase of investment securities. Net cash used in investing activities was ¥103.8 billion, ¥174.8 billion less than a year earlier. constitution. Cash fl ows from fi nancing activities Cash used included ¥82.4 billion to reduce loans payable, bonds payable, and commercial paper and ¥19.6 billion for dividend Free Cash Flows (¥ billion) Cash Flows (¥ billion) 160 120 80 40 0 (40) (80) (120) (160) 300 200 100 0 (100) (200) (300) ’09 ’10 ’11 ’12 ’13 FY ’09 ’10 ’11 ’12 ’13 FY Net cash provided by operating activities Net cash used in investing activities Net cash provided by (used in) financing activities Asahi Kasei Report 2014 63 2014旭化成_efs_1002入稿校了.indd 63 2014旭化成_efs_1002入稿校了.indd 63 2014/10/20 8:45 2014/10/20 8:45 Risk Analysis Operating risks and non-operating risks which may materially infl uence 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 fl uctuation Operating costs in operations based on petrochemicals are Operations in the Homes segment are affected by Japanese affected by prices for crude oil and naphtha. If crude oil tax policies as they relate to home acquisition and by and naphtha prices rise, selling prices for products derived fl uctuations in Japanese interest rates. Changes in Japanese from these feedstocks must be increased in a timely tax policy, including consumption taxes, or fl uctuations in manner to maintain suffi cient price spreads. Price spreads Japanese interest rates may result in diminished housing may diminish, thereby affecting our consolidated demand, thereby affecting our consolidated performance performance and fi nancial condition. and fi nancial condition. Exchange rate fl uctuation Profi tability 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 profi tability of electronics-related businesses carried in these accounts is affected by the rate of may decline signifi cantly in a relatively short time, thereby exchange at the time of conversion to yen. Although affecting our consolidated performance and fi nancial measures such as currency exchange hedges are utilized to condition. Because products in this fi eld rapidly become minimize the short-term effects of exchange rate obsolete, the timely development and commercialization of fl uctuations, such fl uctuations 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 fi nancial condition. fl uctuations may exceed expectations, thereby affecting our consolidated performance and fi nancial condition. Overseas operations Pharmaceutical, medical device, and acute critical care Overseas operations may face a variety of risks which device businesses cannot be foreseen, including the existence or emergence of economically unfavorable circumstances due to legal Pharmaceutical, medical device, and acute critical care and regulatory changes, vulnerability of infrastructure, device businesses may be signifi cantly affected by diffi culty in hiring/retaining qualifi ed employees, or other government measures regarding health care or other factors, and social or political instability due to terrorism, changes in government policy in various countries. war, or other factors. Overseas operations may be impaired Unforeseeable side effects or complications may emerge, by such scenarios, thereby affecting our consolidated signifi cantly affecting these businesses. Product approval performance and business plans. may be withdrawn as a result of reexamination, and 64 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 64 2014旭化成_efs_1002入稿校了.indd 64 2014/10/20 8:45 2014/10/20 8:45 competition may intensify as a result of the market entry of Business and capital alliances generics. For products under development, regulatory approval may be prolonged or fail to be obtained, market Acquisitions, business alliances, and capital alliances may demand may be lower than expected, and reimbursement bear lower results or less synergy than anticipated due to prices may be lower than expected. Such scenarios may deterioration of the operating environment, thereby affect our consolidated performance and fi nancial affecting our consolidated performance and fi nancial condition. condition. Poor performance at companies in which we have invested may require the recording of an impairment loss for goodwill, etc., thereby affecting our consolidated Industrial accidents and natural disasters performance and fi nancial condition. The occurrence of a signifi cant 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 opportunity loss due to plant shutdown caused by damage to plant facilities, supply chain disruptions which impede raw materials procurement, etc., thereby affecting our consolidated performance and fi nancial 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 fi nancial condition. Irrecoverable credits Credits extended to customers may become irrecoverable to an unforeseeable extent, necessitating additional losses or allowances to be recorded in fi nancial accounts, and thereby affecting our consolidated performance and fi nancial condition. 2014旭化成_efs_1002入稿校了.indd 65 2014旭化成_efs_1002入稿校了.indd 65 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 65 Consolidated Financial Statements Consolidated Balance Sheets Asahi Kasei Corporation and Consolidated Subsidiaries March 31, 2014 and 2013 ASSETS Current assets: Cash and deposits (Notes 8 and 10) Notes and accounts receivable–trade (Note 4(e)) Short-term investment securities (Notes 8, 10 and 11) Merchandise and fi nished 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 4(b), (d)) Accumulated depreciation Buildings and structures, net Millions of yen Thousands of U.S. dollars (Note 1) 2014 2013 2014 ¥151,474 316,705 — 151,156 112,243 65,141 27,469 68,106 (1,894) ¥109,513 306,222 124 145,470 100,513 63,695 21,945 73,619 (1,631) $1,472,337 3,078,392 — 1,469,246 1,091,009 633,175 267,000 661,995 (18,410) 890,401 819,469 8,654,753 453,498 (250,633) 202,866 428,616 (241,191) 187,425 4,408,029 (2,436,168) 1,971,870 Machinery, equipment and vehicles (Note 4(b), (d)) 1,290,526 1,236,111 12,543,993 Accumulated depreciation (1,127,452) (1,082,480) (10,958,904) Machinery, equipment and vehicles, net 163,074 153,631 1,585,089 Land (Note 4(d)) Lease assets (Note 9) Accumulated depreciation Lease assets, net Construction in progress Other (Note 4(d)) Accumulated depreciation Other, net Subtotal Intangible assets Goodwill Other Subtotal Investments and other assets Investment securities (Notes 4(a), (b), 10 and 11) Long-term loans receivable (Note 10) Net defi ned benefi t asset (Note 13) Deferred tax assets (Note 14) Other Allowance for doubtful accounts Subtotal 58,067 13,567 (9,095) 4,472 35,216 137,897 (121,056) 16,841 480,535 58,176 13,980 (7,173) 6,806 41,482 129,716 (115,656) 14,060 461,581 564,415 131,872 (88,404) 43,468 342,302 1,340,367 (1,176,672) 163,696 4,670,830 137,679 120,740 258,419 134,303 121,114 255,417 1,338,248 1,173,600 2,511,849 238,419 9,173 2,369 16,278 19,751 (256) 224,903 5,248 — 8,487 25,311 (245) 2,317,448 89,162 23,027 158,223 191,981 (2,488) 285,735 263,704 2,777,362 Total noncurrent assets 1,024,689 980,702 9,960,041 Total assets The accompanying notes are an integral part of these statements. 66 Asahi Kasei Report 2014 ¥1,915,089 ¥1,800,170 $18,614,784 2014旭化成_efs_1002入稿校了.indd 66 2014旭化成_efs_1002入稿校了.indd 66 2014/10/20 8:45 2014/10/20 8:45 LIABILITIES AND NET ASSETS Liabilities: Current liabilities: Notes and accounts payable–trade (Notes 4(e) and 10) Short-term loans payable (Notes 4(b), 10 and 20) Commercial paper (Notes 10 and 20) Current portion of bonds payable (Notes 10 and 20) Lease obligations (Notes 9, 10 and 20) Accrued expenses Income taxes payable (Note 10) Advances received Provision for periodic repairs Provision for product warranties Provision for removal cost of property, plant and equipment Asset retirement obligations (Note 15) Other (Note 4(e)) Total current liabilities Noncurrent liabilities: Bonds payable (Notes 10 and 20) Long-term loans payable (Notes 4(b), 10 and 20) Lease obligations (Notes 9, 10 and 20) Deferred tax liabilities (Note 14) Provision for retirement benefi ts (Note 13) Provision for directors’ retirement benefi ts Provision for periodic repairs Provision for removal cost of property, plant and equipment Net defi ned benefi t liability (Note 13) Asset retirement obligations (Note 15) Long-term guarantee deposits (Note 10) Other Total noncurrent liabilities Total liabilities Net assets: Shareholders’ equity Capital stock Authorized—4,000,000,000 shares Issued and outstanding—1,402,616,332 shares Capital surplus Retained earnings (Note 7(b)(ii)) Treasury stock (2014—5,230,736 shares, 2013—5,016,645 shares) Total shareholders’ equity Accumulated other comprehensive income Net unrealized gain on other securities Deferred gains or losses on hedges Foreign currency translation adjustments Remeasurements of defi ned benefi t plans Total accumulated other comprehensive income Minority interests Total net assets Commitments and contingent liabilities (Notes 4(c) and 9) Total liabilities and net assets The accompanying notes are an integral part of these statements. Millions of yen Thousands of U.S. dollars (Note 1) 2014 2013 2014 ¥159,925 103,605 10,000 ¥172,630 113,043 70,000 — 1,784 93,313 48,520 80,164 7,964 2,503 2,893 806 65,305 576,782 40,000 146,037 2,445 43,441 — 818 173 9,526 143,523 3,244 18,899 4,434 412,541 989,323 103,389 79,404 635,403 (2,591) 815,605 75,626 (171) 46,734 (25,094) 97,095 13,067 925,766 5,000 2,415 91,646 13,978 61,953 2,359 2,143 1,910 722 65,064 602,864 40,000 146,929 4,051 39,985 107,776 767 4,255 2,960 — 2,834 18,396 4,902 372,855 975,719 103,389 79,403 553,557 (2,431) 733,918 62,622 (900) 16,440 — 78,162 12,371 824,451 $1,554,481 1,007,047 97,201 — 17,341 907,008 471,617 779,199 77,411 24,329 28,120 7,834 634,769 5,606,357 388,802 1,419,489 23,766 422,249 — 7,951 1,682 92,593 1,395,052 31,532 183,699 43,099 4,009,924 9,616,281 1,004,948 771,812 6,176,157 (25,185) 7,927,731 735,089 (1,662) 454,257 (243,915) 943,769 127,012 8,998,503 ¥1,915,089 ¥1,800,170 $18,614,784 Asahi Kasei Report 2014 67 2014旭化成_efs_1002入稿校了.indd 67 2014旭化成_efs_1002入稿校了.indd 67 2014/10/20 8:45 2014/10/20 8:45 Millions of yen Thousands of U.S. dollars (Note 1) 2014 2013 2014 ¥1,897,766 ¥1,666,640 $18,446,404 1,385,704 1,239,452 13,469,129 512,062 368,715 143,347 1,183 3,681 425 1,132 4,157 427,188 335,228 91,960 1,301 2,949 4,285 1,661 3,623 4,977,274 3,583,933 1,393,342 11,499 35,780 4,131 11,003 40,406 10,578 13,821 102,819 3,375 1,756 1,366 4,563 11,060 142,865 330 1,672 53,532 55,534 1,223 5,575 441 — 22,546 4,753 34,539 163,860 68,166 (6,399) 61,767 102,093 796 3,339 166 2,190 4,961 10,656 95,125 81 247 — 328 511 4,011 2,069 206 6,355 — 13,151 82,302 27,873 526 28,399 53,903 191 32,805 17,068 13,278 44,353 107,504 1,388,657 3,208 16,252 520,334 539,794 11,888 54,189 4,287 — 219,149 46,199 335,721 1,592,729 662,578 (62,199) 600,379 992,350 7,737 ¥101,296 ¥53,712 $984,603 Consolidated Statements of Income Asahi Kasei Corporation and Consolidated Subsidiaries Years Ended March 31, 2014 and 2013 Net sales (Note 16) Cost of sales (Note 5(b)) Gross profi t Selling, general and administrative expenses (Note 5(a)) Operating income (Note 16) Non-operating income: Interest income Dividends income Foreign exchange gains Insurance income Other Total non-operating income Non-operating expenses: Interest expense Equity in losses of affi liates Costs associated with idle portion of facilities Other Total non-operating expenses Ordinary income Extraordinary income: Gain on sales of investment securities Gain on sales of noncurrent assets (Note 5(c)) Income from compensation for damage (Note 5(d)) Total extraordinary income Extraordinary loss: Loss on valuation of investment securities Loss on disposal of noncurrent assets (Note 5(e)) Impairment loss (Note 5(f)) Environmental expenses (Note 5(g)) Business structure improvement expenses (Note 5(h)) Loss on discontinuation of development project (Note 5(i)) Total extraordinary loss Income before income taxes and minority interests Income taxes (Note 14) — current — deferred Total income taxes Income before minority interests Minority interests in income Net income The accompanying notes are an integral part of these statements. 68 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 68 2014旭化成_efs_1002入稿校了.indd 68 2014/10/20 8:45 2014/10/20 8:45 Consolidated Statements of Comprehensive Income Asahi Kasei Corporation and Consolidated Subsidiaries Years Ended March 31, 2014 and 2013 Income before minority interests Other comprehensive income Net increase in unrealized gain on other securities Deferred gains or losses on hedges Foreign currency translation adjustment Share of other comprehensive income of affi liates accounted for using equity method Total other comprehensive income (Note 6) Comprehensive income (Note 6) Comprehensive income attributable to: Owners of the Parent Minority interests The accompanying notes are an integral part of these statements. Millions of yen 2014 ¥102,093 12,952 729 29,095 1,233 44,009 146,102 144,956 ¥1,145 2013 ¥53,903 22,383 786 34,595 5,848 63,612 117,515 116,505 ¥1,010 Thousands of U.S. dollars (Note 1) 2014 $992,350 125,894 7,086 282,805 11,985 427,770 1,420,121 1,408,981 $11,129 2014旭化成_efs_1002入稿校了.indd 69 2014旭化成_efs_1002入稿校了.indd 69 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 69 Consolidated Statements of Changes in Net Assets Asahi Kasei Corporation and Consolidated Subsidiaries Years Ended March 31, 2014 and 2013 Shareholders’ equity Accumulated other comprehensive income Millions of yen Capital stock Capital surplus Retained earnings (Note 7(b)) Treasury stock Total shareholders’ equity Net unrealized gain on other securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasure- ments of defi ned benefi t plans Total accumulated other comprehensive income Minority interests Total net assets Balance at March 31, 2013 ¥103,389 ¥79,403 ¥553,557 ¥(2,431) ¥733,918 ¥62,622 ¥(900) ¥16,440 ¥— ¥78,162 ¥12,371 ¥824,451 Changes during the fi scal 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 Effect of change in the reporting period of consolidated subsidiaries and affi liates Net changes of items other than shareholders’ equity Total changes of items during the period (19,566) 101,296 1 1,323 (1,208) (19,566) 101,296 (162) (162) 2 3 1,323 (1,208) — — (19,566) 101,296 (162) 3 1,323 (1,208) — — 1 81,845 (160) 81,687 13,004 729 30,294 (25,094) 18,932 696 101,315 13,004 729 30,294 (25,094) 18,932 696 19,628 Balance at March 31, 2014 ¥103,389 ¥79,404 ¥635,403 ¥(2,591) ¥815,605 ¥75,626 ¥(171) ¥46,734 ¥(25,094) ¥97,095 ¥13,067 ¥925,766 Shareholders’ equity Accumulated other comprehensive income Millions of yen Capital stock Capital surplus Retained earnings (Note 7(b)) Treasury stock Total shareholders’ equity Net unrealized gain on other securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasure- ments of defi ned benefi t plans Total accumulated other comprehensive income Minority interests Total net assets Balance at March 31, 2012 ¥103,389 ¥79,404 ¥516,401 ¥(2,388) ¥696,805 ¥40,148 ¥(1,734) ¥(28,374) ¥— ¥10,040 ¥12,439 ¥719,285 Changes during the fi scal 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 Effect of change in the reporting period of consolidated subsidiaries and affi liates Net changes of items other than shareholders’ equity Total changes of items during the period (19,567) 53,712 (8) — (0) (49) 6 (19,567) 53,712 (49) 6 (8) — 3,020 3,020 (19,567) 53,712 (49) 6 (8) — 3,020 — (0) 37,156 (43) 37,113 22,474 834 44,814 22,474 834 44,814 — — 68,122 (68) 68,054 68,122 (68) 105,167 Balance at March 31, 2013 ¥103,389 ¥79,403 ¥553,557 ¥(2,431) ¥733,918 ¥62,622 ¥(900) ¥16,440 ¥— ¥78,162 ¥12,371 ¥824,451 Shareholders’ equity Accumulated other comprehensive income Thousands of U.S. dollars (Note 1) Capital stock Capital surplus Retained earnings (Note 7(b)) Treasury stock Total shareholders’ equity Net unrealized gain on other securities Deferred gains or losses on hedges Foreign currency translation adjustment Remeasure- ments of defi ned benefi t plans Total accumulated other comprehensive income Minority interests Total net assets Balance at March 31, 2013 $1,004,948 $771,802 $5,380,608 $(23,629) $7,133,729 $608,690 $(8,748) $159,798 $— $759,740 $120,247 $8,013,715 Changes during the fi scal 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 Effect of change in the reporting period of consolidated subsidiaries and affi liates Net changes of items other than shareholders’ equity Total changes of items during the period (190,183) 984,603 (190,183) 984,603 10 (1,575) (1,575) 19 29 12,860 (11,742) 12,860 (11,742) — — (190,183) 984,603 (1,575) 29 12,860 (11,742) — — 10 795,538 (1,555) 794,003 126,400 7,086 294,460 (243,915) 184,020 6,765 984,788 126,400 7,086 294,460 (243,915) 184,020 6,765 190,785 Balance at March 31, 2014 $1,004,948 $771,812 $6,176,157 $(25,185) $7,927,731 $735,089 $(1,662) $454,257 $(243,915) $943,769 $127,012 $8,998,503 The accompanying notes are an integral part of these statements. 70 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 70 2014旭化成_efs_1002入稿校了.indd 70 2014/10/20 8:45 2014/10/20 8:45 Consolidated Statements of Cash Flows Asahi Kasei Corporation and Consolidated Subsidiaries Years Ended March 31, 2014 and 2013 Cash fl ows from operating activities: Income before income taxes and minority interests Depreciation and amortization Impairment loss Amortization of goodwill Amortization of negative goodwill Increase (decrease) in provision for periodic repairs Increase (decrease) in provision for product warranties Increase (decrease) in provision for removal cost of property, plant and equipment Increase in provision for retirement benefi ts Decrease in net defi ned benefi t liability Interest and dividend income Interest expense Equity in losses of affi liates 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 Income from compensation for damage Increase in notes and accounts receivable–trade Increase in inventories (Decrease) increase in notes and accounts payable–trade Increase (decrease) in accrued expenses Increase in advances received Other, net Subtotal Interest and dividend income, received Interest expense paid Proceeds from compensation for damage Income taxes paid Net cash provided by operating activities Cash fl ows from investing activities: Payments into time deposits Proceeds from withdrawal of time deposits 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 Purchase of shares in subsidiaries resulting in change in scope of consolidation (Note 8(b)) Additional purchase of investments in consolidated subsidiaries Payments for transfer of business Payments of loans receivable Collection of loans receivable Other, net Net cash used in investing activities Cash fl ows from fi nancing activities: Increase in short-term loans payable Decrease in short-term loans payable Proceeds from issuance of commercial paper Redemptions of commercial paper Proceeds from long-term loans payable Repayment of long-term loans payable Proceeds from issuance of bonds payable Redemption of bonds Repayments of lease obligations Purchase of treasury stock Proceeds from disposal of treasury stock Cash dividends paid Cash dividends paid to minority shareholders Other, net Net cash (used in) provided by fi nancing activities Effect of exchange rate change on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Increase in cash and cash equivalents resulting from changes in scope of consolidation Effect of change in the reporting period of consolidated subsidiaries and affi liates Cash and cash equivalents at end of year (Note 8(a)) The accompanying notes are an integral part of these statements. Millions of yen Thousands of U.S. dollars (Note 1) 2014 2013 2014 ¥163,860 86,052 441 8,823 (231) 1,519 343 7,549 — (1,648) (4,864) 3,375 1,756 (330) 1,223 (1,672) 5,575 (53,532) (4,082) (12,377) (17,831) 476 17,811 15,549 217,786 5,818 (3,447) 53,532 (29,538) 244,152 (7,526) 5,685 (80,933) 2,588 (15,576) (2,695) 1,018 (1,697) (152) — (10,517) 7,433 (1,382) (103,753) 85,603 (81,924) 85,000 (145,000) 13,362 (34,426) — (5,000) (2,521) (165) 3 (19,566) (589) 152 (105,070) 3,305 38,633 104,008 498 — ¥143,139 ¥82,302 80,050 2,069 6,989 (231) (1,408) (171) (1,152) 1,469 — (4,251) 3,339 166 (81) 511 (247) 4,011 — (21,385) (21,758) 21,423 (6,783) 10,090 (8,893) 146,059 5,744 (3,556) — (22,240) 126,008 (5,977) 13,820 (88,194) 548 (15,789) (3,161) 650 (174,472) (1,333) (282) (11,476) 9,417 (2,267) (278,518) 282,368 (248,073) 203,000 (148,000) 114,083 (34,185) 20,000 — (2,539) (50) 6 (19,567) (667) (131) 166,244 (853) 12,881 96,351 102 (5,327) ¥104,008 $1,592,729 836,431 4,287 85,760 (2,245) 14,765 3,334 73,377 — (16,019) (47,278) 32,805 17,068 (3,208) 11,888 (16,252) 54,189 (520,334) (39,677) (120,305) (173,318) 4,627 173,124 151,137 2,116,893 56,551 (33,505) 520,334 (287,111) 2,373,173 (73,153) 55,259 (786,674) 25,156 (151,400) (26,196) 9,895 (16,495) (1,477) — (102,226) 72,249 (13,433) (1,008,486) 832,066 (796,306) 826,205 (1,409,409) 129,879 (334,623) — (48,600) (24,504) (1,604) 29 (190,183) (5,725) 1,477 (1,021,287) 32,125 375,515 1,010,964 4,841 — $1,391,320 Asahi Kasei Report 2014 71 2014旭化成_efs_1002入稿校了.indd 71 2014旭化成_efs_1002入稿校了.indd 71 2014/10/20 8:45 2014/10/20 8:45 Notes to Consolidated Financial Statements Asahi Kasei Corporation and Consolidated Subsidiaries 1. Major policies for preparing the consolidated fi nancial statements The consolidated fi nancial statements, which are fi led 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 con- solidated fi nancial statements are a translation of those fi led with the prime minister of Japan and incorporate certain modifi cations to enhance foreign readers’ understanding of the consolidated fi nancial statements. In addition, the notes to the consolidated fi nancial state- ments include certain fi nancial information which is not required under the disclosure regulations in Japan, but is presented herein as additional information. The U.S. dollar amounts presented in the consolidated fi nancial 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 accor- dance with generally accepted translation procedures, the approxi- mate current exchange rate of ¥102.88=US$1 prevailing on March 31, 2014, has been used. Consolidation and investments in affi liated companies The consolidated fi nancial statements consist of the accounts of the parent company and 131 subsidiaries (126 subsidiaries at March 31, 2013, hereinafter collectively referred to as the “Company”) which, with minor exceptions due to immateriality, are all majority and wholly owned companies, including 9 core operating companies (Asahi Kasei 2. Signifi cant accounting policies (a) Cash and cash equivalents For cash fl ow 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 therefore present an insignifi cant 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 realizable value. Residential lots and dwell- ings for sale are stated at specifi cally identifi ed costs. (c) Noncurrent assets and depreciation/amortization Property, plant and equipment (except for lease assets) are stated at cost. Signifi cant 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 depreci- ated using the straight-line method, at rates based on estimated use- ful lives of the assets, principally ranging from 5 to 60 years for buildings and from 4 to 22 years for machinery and equipment and vehicles. Intangible fi xed assets (except for lease assets), including software for internal use, are mainly 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 5 years. Lease assets (fi nancing lease transactions without title transfer) are depreciated/amortized on a straight-line basis over the period of the lease with no residual value. For fi nancing 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 fi nancing leases being charged to income as incurred. (d) Signifi cant allowances i) Allowance for doubtful accounts Estimates of the unrecoverable portion of receivables, generally based on historical rates and for specifi c receivables of particular concern based on individual estimates of recoverability, are recog- nized as allowance for doubtful accounts. ii) Provision for periodic repairs The portion of foreseeable periodic repair expenses deemed to 72 Asahi Kasei Report 2014 Chemicals Corp., Asahi Kasei Fibers Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Microdevices Corp., Asahi Kasei E-materials Corp., Asahi Kasei Pharma Corp., Asahi Kasei Medical Co., Ltd., and ZOLL Medical Corporation), and Tong Suh Petrochemical Corp. Ltd. (Korea). Material inter-company transactions and accounts have been eliminated. Investments in unconsolidated subsidiaries and 20% to 50% owned companies in which the Company exercises signifi cant infl u- ence are accounted for, with minor exceptions due to immateriality, using the equity method of accounting. There were 40 such unconsoli- dated subsidiaries and 20% to 50% owned companies to which the equity method is applied at March 31, 2014 (43 at March 31, 2013), including Asahi Kasei EIC Solutions Corp., Asahi Kasei Geotechnologies Co., Ltd., and Asahi Organic Chemicals Industry Co., Ltd. Asahi Kasei Spandex America, Inc’s result is reported in the consoli- dated fi nancial statements using a fi scal year ending December 31. Material differences in inter-company transactions and accounts aris- ing from the use of different fi scal year-ends are appropriately adjust- ed for through consolidation procedures. All assets and liabilities of acquired companies are measured at their fair value and any difference between the net assets and the cost of investment is recognized as goodwill or negative goodwill. Goodwill, and negative goodwill incurred through business combi- nations which took place before April 1, 2010, are amortized using the straight-line method over a reasonable period during which their effects would last, with the exception of minor amounts which are charged to income as incurred. correspond to normal wear and tear of plant and equipment as of the closing date of the fi scal year is recognized as provision for periodic repairs. iii) Provision for product warranties Estimates of product warranty expenses based on historical rates are recognized as provision for product warranties. iv) Provision for removal cost of property, plant and equipment Provision for removal cost of property, plant and equipment is recorded based on estimated future removal cost of property, plant and equipment at the end of each fi scal year. v) Provision for directors’ retirement benefi ts Provision is made for lump-sum indemnities to directors and cor- porate auditors equal to the estimated liability calculated under the internal rules of the Company. (e) Accounting for retirement benefi ts i) Method of attributing expected retirement benefi ts In calculating retirement benefi ts obligations, the Company applies the method of attributing expected retirement benefi ts to the period up to fi scal year ended March 31, 2014, as straight-line basis. ii) Accounting for actuarial gains/losses and prior service costs Prior service costs are amortized on a straight-line basis over a cer- tain period (mainly 10 years) within the average remaining service period of employees at the time of occurence. Actuarial gains/losses are amortized on a straight-line basis over a certain period (mainly 10 years) from the following fi scal year of their accrual within the average remaining service period of employees at the time of accrual. (f) Signifi cant revenue and expense recognition i) Construction activities that are realizable as of fi scal year end The percentage-of-completion method (progress of work is esti- mated using the percentage of costs incurred to the total project- ed costs) is applied. ii) Other construction activities The completed-contract method is used. 2014旭化成_efs_1002入稿校了.indd 72 2014旭化成_efs_1002入稿校了.indd 72 2014/10/20 8:45 2014/10/20 8:45 (g) Financial instruments hedged assets and liabilities. i) Securities Securities are classifi ed into four categories: trading securities, held-to-maturity debt securities, equity securities of unconsolidat- ed subsidiaries and affi liates, and other securities. At March 31, 2014 and 2013, the Company did not have trading securities or held-to-maturity debt securities. Equity securities of unconsolidated subsidiaries and affi liates are accounted for, with minor exceptions due to immateriality, 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, net of income taxes, being included as a component of net assets. Other securities whose fair values are not readily determinable are stated at cost. In cases where any signifi cant 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 aver- age cost method and are refl ected in the consolidated income statements. ii) Derivative fi nancial instruments All derivatives are stated at fair value. Gains or losses arising from changes in fair value are recognized in the period in which they arise, except for derivatives that are designated as hedging instru- ments. Gains or losses arising from changes in fair value of these qualifying hedges are deferred as “Deferred gains or losses on hedges” until being offset against gains or losses of the underlying (h) Taxes Accrued income taxes are stated at the estimated amount of payables 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. The Company has elected to fi le its return under the consolidated tax fi ling system in Japan. The consumption tax system in Japan is designed so that all goods and services are taxed at a fl at rate of 5% unless otherwise specifi ed. Assets, liabilities, and profi t and loss accounts are stated net of consumption tax. (i) 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 to income for the period. Assets and liabilities of foreign subsidiaries are translated into Japanese yen at fi scal year-end exchange rates, and income and expenses of same are translated into Japanese yen at the average exchange rate for the fi scal year. Shareholders’ equity of foreign sub- sidiaries 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 adjustments in the consolidated 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 compo- nent of net assets in the consolidated balance sheets. 3. Changes in signifi cant accounting policies (a) Changes in accounting policies Accounting Standards Board of Japan (ASBJ) Statement No. 26 ”Accounting Standard for Retirement Benefi ts” and ASBJ Guidance No. 25 ”Guidance on Accounting Standard for Retirement Benefi ts” are applied from March 31, 2014 (except the provisions of Article 35 of the “Accounting Standard for Retirement Benefi ts” and Article 67 of the “Guidance on Accounting Standard for Retirement Benefi ts”). As an effect of this change, net defi ned benefi t liability is now record- ed as the amount of retirement benefi t obligations less the fair value of plan assets. Unrecognized actuarial gains/losses and unrecognized prior service costs are recorded in net defi ned benefi t liability and net defi ned benefi t asset. In accordance with the interim measures stipulated in Article 37 of the “Accounting Standard for Retirement Benefi ts,” the effect of this change as of March 31, 2014, is recorded as remeasurements of defi ned benefi t plans under accumulated other comprehensive income. As of March 31, 2014, net defi ned benefi t asset is ¥2,369 million (US$23,027 thousand) and net defi ned benefi t liability is ¥143,523 million (US$1,395,052 thousand).Total accumulated other comprehen- sive income decreased by ¥25,094 million (US$243,915 thousand), and net assets per share decreased by ¥17.96 (US$0.17). (b) Accounting standards issued but not yet applied Accounting standard for retirement benefi ts: The ASBJ issued ASBJ Statement No. 26 “Accounting Standard for Retirement Benefi ts” and ASBJ Guidance No. 25 “Guidance on Accounting Standard for Retirement Benefi ts,” replacing the “Accounting Standard for Retirement Benefi ts” that had been issued by the Business Accounting Council in 1998 and other related guid- ance. Under these revised accounting standards, the accounting treat- ment of unrecognized actuarial gains/losses and prior service costs, the calculation method for present value of retirement benefi t obligations and current service costs, and the method of disclosure were revised. These revisions were made to enhance fi nancial reporting and in con- sideration of the international convergence of accounting standards. 4. Notes to Consolidated Balance Sheets The Company will apply the revised accounting standards for cal- culation method for present value of retirement benefi t obligations and current service costs from the beginning of the fi scal year ending March 31, 2015. As an effect of the adoption of the accounting standard and guid- ance, retained earnings will decrease by ¥15,621 million at the beg- ging of the fi scal year ending March 31, 2015. The effects of the adoption on income for the fi scal year ending March 31, 2015 will be immaterial. Accounting standards for business combinations: The ASBJ issued ASBJ Statement No. 21 “Revised Accounting Standard for Business Combinations,” ASBJ Statement No. 22 “Revised Accounting Standard for Consolidated Financial Statements,” ASBJ Statement No. 7 “Revised Accounting Standard for Business Divestitures,” ASBJ Statement No. 2 “Revised Accounting Standard for Earnings Per Share,” ASBJ Guidance No. 10 “Revised Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures,” and ASBJ Guidance No. 4 “Revised Guidance on Accounting Standard for Earnings Per Share.” Under these revised accounting standards, various accounting treatments were revised regarding changes in ownership interest in a subsidiary when control over the subsidiary is retained. Revisions apply to treatment of the change in ownership interest and treatment of costs related to acquisition of increased ownership interest. The pre- sentation method of net income was amended, “minority interests” were changed to “non-controlling interests,” and transitional provi- sions for accounting treatments were defi ned. The Company will apply the revised accounting standards and guidance from the beginning of the fi scal year ending March 31, 2016. The transitional accounting will be applied from business com- binations performed on or after the beginning of the fi scal year end- ing March 31, 2016. The effects of the adoption of the revised accounting standards and guidance are currently under assessment at the time of prepara- tion of the accompanying consolidated fi nancial statements. (a) Investment securities Among investment securities, shares of unconsolidated subsidiaries and affi liates as of March 31, 2014 and 2013, amounted to ¥68,399 million (US$664,843 thousand) and ¥73,807 million, respectively. Included in those amounts are investments in joint ventures of ¥33,878 million (US$329,296 thousand) and ¥37,669 million, respectively. Asahi Kasei Report 2014 73 2014旭化成_efs_1002入稿校了.indd 73 2014旭化成_efs_1002入稿校了.indd 73 2014/10/20 8:45 2014/10/20 8:45 (b) Pledged assets and secured debt A summary of assets pledged as collateral and secured debt as of March 31, 2014 and 2013, is shown below: Pledged assets Buildings and structures Machinery, equipment and vehicles Secured debt Short-term loans payable Long-term loans payable Millions of yen 2014 ¥163 2 ¥166 ¥3 208 ¥211 2013 ¥183 4 ¥187 ¥6 309 ¥315 Thousands of U.S. dollars 2014 $1,584 19 $1,614 $29 2,022 $2,051 Besides the above, investment securities pledged to suppliers as transaction guarantees at March 31, 2014 and 2013, were ¥53 million (US$515 thousand) and ¥44 million, respectively. (c) Contingent liabilities Contingent liabilities at March 31, 2014 and 2013, arising in the ordinary course of business were as follows: Loans guaranteed Commitment for guarantees Letters of awareness Completion guarantees Notes discounted Millions of yen 2014 ¥41,789 — 134 16,416 — ¥58,339 2013 ¥37,542 486 236 17,341 11 ¥55,616 Thousands of U.S. dollars 2014 $406,192 — 1,302 159,565 — $567,059 The parent company and certain of its subsidiaries and affi liates are defendants in several pending lawsuits. However, based upon the infor- mation currently available to both the Company and its legal counsel, management of the Company believes that any damages from such law- suits will not have a material impact to the Company’s consolidated fi nancial statements. (d) Deferred gain on property, plant and equipment deducted for tax purposes The accumulated reduced-value entries, which is directly deducted from property, plant and equipment, as of March 31, 2014 and 2013, were ¥9,511 million (US$92,448 thousand) and ¥9,349 million, respectively. The breakdown of reduced-value entries as of March 31, 2014 and 2013, was as follows: Buildings and structures Machinery, equipment and vehicles Land Other Millions of yen 2014 ¥3,491 5,677 188 155 ¥9,511 2013 ¥3,298 5,664 230 157 ¥9,349 Thousands of U.S. dollars 2014 $33,933 55,181 1,827 1,507 $92,448 (e) Notes maturing on March 31, 2014 Although fi nancial institutions in Japan were closed on March 31, 2013, and notes maturing on that date were actually settled on the following business day, April 1, 2013, such notes were accounted for as if settled on March 31, 2013. The breakdown of those notes at March 31, 2013, was as follows: Notes and accounts receivable–trade Notes and accounts payable–trade Other current liabilities 5. Notes to Consolidated Statements of Income (a) Selling, general and administrative expenses Major components of selling, general and administrative expenses were as follows: Freight and storage Salaries and benefi ts Research and development* Millions of yen 2014 ¥— — ¥— 2013 ¥3,117 1,793 ¥529 Millions of yen 2014 ¥35,277 134,442 ¥53,390 2013 ¥32,832 119,917 ¥53,364 Thousands of U.S. dollars 2014 $— — $— Thousands of U.S. dollars 2014 $342,895 1,306,785 $518,954 * The aggregate amounts of research and development expenses included in manufacturing costs and selling, general and administrative expenses for the years ended March 31, 2014 and 2013, were ¥71,101 million (US$691,106 thousand) and ¥71,120 million, respectively. 74 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 74 2014旭化成_efs_1002入稿校了.indd 74 2014/10/20 8:45 2014/10/20 8:45 (b) Loss on valuation of inventories Inventories held for sale in the ordinary course of business are stated at the lower of cost or net realizable value. Loss on valuation of inventories for the years ended March 31, 2014 and 2013, was as follows: (c) Gain on sales of noncurrent assets Major components of gain on sales of noncurrent assets for the years ended March 31, 2014 and 2013, were as follows: Millions of yen 2014 ¥994 2013 ¥173 Land Machinery Other Millions of yen 2014 ¥1,477 184 ¥11 2013 ¥107 45 ¥94 Thousands of U.S. dollars 2014 $9,662 Thousands of U.S. dollars 2014 $14,357 1,788 $107 (d) Income from compensation for damage With regard to litigation in the US by the Company’s subsidiary Asahi Kasei Pharma Corp. against Actelion Ltd. of Switzerland and its affi liated companies and executives in relation to a license agreement for fasudil, a rho-kinase inhibitor discovered and owned by Asahi Kasei Pharma Corp., the California Superior Court entered a judgment in November 2011 ordering the defendants to pay US$415.7 million in recognition of the petition of Asahi Kasei Pharma Corp. The judgment was fi nalized in March 2014, and Asahi Kasei Pharma Corp. received US$523.2 million including the legal interest rate etc. from the date of judgment to the date of payment. As a result, a total of ¥53,532 million (US$523.2 million) was recorded as income from compensation for damage under extraordinary income in the consolidated statements of income for the fi scal year ended March 31, 2014. (e) Loss on disposal of noncurrent assets Loss on disposal of noncurrent assets for the years ended March 31, 2014 and 2013, was primarily 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. (f) Impairment loss Major components of impairment loss for the years ended March 31, 2014 and 2013, were as follows: Use Asset class Location 2014 2013 2014 Millions of yen Thousands of U.S. dollars Production facility for petrochemicals, and goodwill related to the petrochemical business Production facility for pharmaceutical products Production facility for plastic raw materials Idle assets Machinery and equipment, goodwill, etc. Construction in progress, etc. Machinery and equipment, etc. Land and Buildings, etc. Kurashiki, Okayama Miyoshi, Aichi Kawasaki, Kanagawa Oita, etc. Patents for light shaping diffuser, etc. Patents Fuji, Shizuoka Production facility for textiles Production facility for semiconductors Production facility for polystyrene Production facility for fi ne-pattern devices Machinery and equipment, etc. Machinery and equipment, etc. Machinery and equipment, etc. Machinery and equipment, etc. Amakusa, Kumamoto Tateyama, Chiba Ichihara, Chiba Hyuga, Miyazaki Production facility for electrolytic cell frame Buildings, etc. Nobeoka, Miyazaki ¥6,776 ¥ — $65,863 Item on the Consolidated Statements of Income Business structure improvement expenses 2,601 878 367 — — — — — — — — 512 486 413 270 242 166 159 25,282 Loss on discontinuation of development project 8,534 Business structure improvement expenses 3,567 Impairment loss — Impairment loss — Impairment loss — — Business structure improvement expenses Business structure improvement expenses — Impairment loss — Business structure improvement expenses and Impairment loss Others Machinery and equipment, structures, etc. Nakhon Ratchasima, Thailand, etc. ¥ 127 ¥453 $ 1,234 Impairment loss Grouping of operating assets is based on managerial accounting categories, with consideration given to production process, geographic loca- tion, and domain of authority for making investment decisions. Idle assets are recorded separately in each fi xed assets class. With respect to buildings, etc. under idle assets, patents for light shaping diffuser, etc., and part of others, the book value was reduced to the recoverable amount due to disappearance of prospects for future use, and with respect to production facilities as shown in the above table and part of others, the book value was reduced to the recoverable amount due to diminished profi tability. The recoverable amount is stated as value for future usage, which is calculated based on discounted future cash fl ows with applicable discount rate of 6% as of March 31, 2014 and 2013. For idle land of which the market value has signifi cantly decreased in 2013, the book value was 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. Among the extraordinary losses under others, ¥122 million (US$ 1,186 thousand) and ¥53 million (US$ 564 thousand), were recorded under business structure improve- ment expenses for the years ended March 2014 and 2013, respectively. Asahi Kasei Report 2014 75 2014旭化成_efs_1002入稿校了.indd 75 2014旭化成_efs_1002入稿校了.indd 75 2014/10/20 8:45 2014/10/20 8:45 (g) Environmental expenses Environmental expenses for the years ended March 31, 2013, were mainly for decontamination of idle land, etc. (h) Loss on disaster Major components of loss on disaster were as follows: Impairment of fi xed assets Additional payment of retirement benefi ts due to application of early retirement, etc. Loss on disposal and devaluation of inventory and others (i) Loss on discontinuation of development project Loss on discontinuation of development project was as follows: Impairment of fi xed assets Loss on disposal and devaluation of inventory and others Compensation expenses, etc. Millions of yen 2014 ¥7,707 449 14,390 ¥22,546 2013 ¥634 2,812 2,910 ¥6,355 Millions of yen 2014 ¥2,601 1,480 673 ¥4,754 2013 ¥— — — ¥— Thousands of U.S. dollars 2014 $74,913 4,364 139,872 $219,149 Thousands of U.S. dollars 2014 $25,282 14,386 6,542 $46,209 6. Notes to Consolidated Statements of Comprehensive Income Recycling adjustment and tax effects on other comprehensive income for the years ended March 31, 2014 and 2013, were as follows: Net unrealized gain on other securities Changes during the fi scal year Recycling adjustment Pre-tax effect Tax effect Net increase in unrealized gain on other securities Deferred gains or losses on hedges Changes during the fi scal year Recycling adjustment Adjustment of assets acquisition costs Pre-tax effect Tax effect Deferred gains or losses on hedges Foreign currency translation adjustment Changes during the fi scal year Pre-tax effect Tax effect Foreign currency translation adjustment Share of other comprehensive income of affi liates accounted for using equity method Changes during the fi scal year Recycling adjustment Share of other comprehensive income of affi liates accounted for using equity method Total other comprehensive income Millions of yen 2014 2013 ¥19,995 (23) 19,972 (7,020) 12,952 (932) 2,055 — 1,122 (394) 729 29,001 29,001 94 29,095 1,232 1 1,233 ¥44,009 ¥34,229 486 34,715 (12,332) 22,383 (2,449) 125 3,321 997 (211) 786 34,495 34,495 100 34,595 5,847 2 5,848 ¥63,612 Thousands of U.S. dollars 2014 $194,353 (224) 194,129 (68,235) 125,894 (9,059) 19,975 — 10,906 (3,830) 7,086 281,892 281,892 914 282,805 11,975 10 11,985 $427,770 76 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 76 2014旭化成_efs_1002入稿校了.indd 76 2014/10/20 8:45 2014/10/20 8:45 7. Notes to Consolidated Statements of Changes in Net Assets For the year ended March 31, 2014 (a) Class and total number of issued and outstanding shares and treasury stock Issued and outstanding shares Common stock Total Treasury stock Common stock (Notes 1 & 2) Total Number of shares as of March 31, 2013 Increase in number of shares during the fi scal year Decrease in number of shares during the fi scal year Number of shares as of March 31, 2014 Thousands of shares 1,402,616 1,402,616 5,017 5,017 — — 219 219 — — 5 5 1,402,616 1,402,616 5,231 5,231 Notes: 1. The increase of 219 thousand shares in common stock of treasury stock was due to purchase of shares in quantities of less than one share unit. 2. The decrease of 5 thousand shares in common 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 9, 2013. Dividends for common stock Total dividends Dividend per share Date of record Payment date ¥9,783 million (US$95,091 thousand) ¥7.00 (US$0.07) March 31, 2013 June 5, 2013 2) The following was resolved by the Board of Directors on October 31, 2013. Dividends for common stock Total dividends Dividend per share Date of record Payment date ¥9,783 million (US$95,091 thousand) ¥7.00 (US$0.07) September 30, 2013 December 2, 2013 ii) Dividends for which the date of record falls within the fi scal year under review but the payment date occurs in the following fi scal year The following was resolved by the Board of Directors on May 9, 2014. Dividends for common stock Total dividends Source of dividends Dividend per share Date of record Payment date ¥13,974 million (US$135,828 thousand) Retained earnings ¥10.00 (US$0.10)* March 31, 2014 June 5, 2014 * Including ¥8.00 (US$0.08) ordinary dividend and ¥2.00 (US$0.02) special dividend For the year ended March 31, 2013 (a) Class and total number of issued and outstanding shares and treasury stock Issued and outstanding shares Common stock Total Treasury stock Common stock (Notes 1 & 2) Total Number of shares as of March 31, 2012 Increase in number of shares during the fi scal year Decrease in number of shares during the fi scal year Number of shares as of March 31, 2013 Thousands of shares 1,402,616 1,402,616 4,926 4,926 — — 103 103 — — 12 12 1,402,616 1,402,616 5,017 5,017 Notes: 1. The increase of 103 thousand shares in common stock of treasury stock was due to purchase of shares in quantities of less than one share unit. 2. The decrease of 12 thousand shares in common stock of treasury stock was due to sale of shares in quantities of less than one share unit. 2014旭化成_efs_1002入稿校了.indd 77 2014旭化成_efs_1002入稿校了.indd 77 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 77 (b) Dividends i) Cash dividends paid 1) The following was resolved by the Board of Directors on May 9, 2012. Dividends for common stock Total dividends Dividend per share Date of record Payment date ¥9,784 million ¥7.00 March 31, 2012 June 6, 2012 2) The following was resolved by the Board of Directors on November 1, 2012. Dividends for common stock Total dividends Dividend per share Date of record Payment date ¥9,784 million ¥7.00 September 30, 2012 December 3, 2012 ii) Dividends for which the date of record falls within the fi scal year under review but the payment date occurs in the following fi scal year The following was resolved by the Board of Directors on May 9, 2013. Dividends for common stock Total dividends Source of dividends Dividend per share Date of record Payment date ¥9,783 million Retained earnings ¥7.00 March 31, 2013 June 5, 2013 8. Note to Consolidated Statements of Cash Flows (a) Cash and cash equivalents Reconciliation of cash and cash equivalents on the consolidated statements of cash fl ows to the amounts disclosed on the consolidated balance sheets at March 31, 2014 and 2013, was as follows: Cash and deposits Time deposits with deposit term of over 3 months Money market funds and others included in short-term investment securities Cash and cash equivalents Millions of yen 2014 ¥151,474 (8,335) — ¥143,139 2013 ¥109,513 (5,629) 124 ¥104,008 Thousands of U.S. dollars 2014 $1,472,337 (81,017) — $1,391,320 (b) Assets and liabilities of newly consolidated subsidiaries through acquisition of shares For the year ended March 31, 2014 There was no applicable acquisition. For the year ended March 31, 2013 Assets and liabilities of acquired companies (ZOLL Medical Corporation and its subsidiaries) and net cash outfl ow for such acquisition were as follows: Millions of yen 2013 ¥26,833 75,336 113,439 (7,998) (26,910) 180,700 (6,351) ¥174,349 Current assets Noncurrent assets Goodwill Current liabilities Noncurrent liabilities Acquisition cost of shares Cash and cash equivalents Net cash used for acquisition 78 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 78 2014旭化成_efs_1002入稿校了.indd 78 2014/10/20 8:45 2014/10/20 8:45 9. Leases (a) Financing lease transactions Financing 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 fi xed assets: Software ii) Depreciation of lease assets: As stated in Note 2. Signifi cant accounting policies (c) Noncurrent assets and depreciation/amortization. The fi nancing lease transactions with- out title transfer which occurred prior to March 31, 2008, were accounted for on a basis similar to an operating lease. If such lease transac- tions accounted for as an operating lease had been accounted for as a fi nancing lease, the cost and related accumulated amortization, computed using the straight-line method over the term of the lease, at March 31, 2014 and 2013, would have been as follows: Machinery, equipment and vehicles Property, plant and equipment, other Intangible fi xed assets, other Machinery, equipment and vehicles Property, plant and equipment, other Intangible fi xed assets, other Machinery, equipment and vehicles Property, plant and equipment, other Intangible fi xed assets, other Millions of yen 2014 Accumulated depreciation/ amortization ¥77 5 — ¥82 Millions of yen 2013 Accumulated depreciation/ amortization ¥82 86 33 ¥201 Thousands of U.S. dollars 2014 Accumulated depreciation/ amortization $748 49 — $797 Net amount ¥26 0 — ¥26 Net amount ¥37 7 5 ¥49 Net amount $253 0 — $253 Cost ¥103 5 — ¥108 Cost ¥119 94 38 ¥250 Cost $1,001 49 — $1,050 The future lease payments under the Company’s fi nancing leases at March 31, 2014 and 2013, including amounts representing interest, were as follows: Due within one year Due after one year Millions of yen 2014 ¥10 15 ¥26 2013 ¥23 26 ¥49 Thousands of U.S. dollars 2014 $97 146 $253 Lease charges were ¥22 million (US$214 thousand) and ¥64 million for the years ended March 31, 2014 and 2013, respectively. The amortiza- tion amounts of the leased assets, computed using the straight-line method over the term of the leases and no residual value, were ¥22 million (US$214 thousand) and ¥64 million for the years ended March 31, 2014 and 2013, respectively. No impairment loss is allocated to the leased assets. (b) Operating lease transactions Future lease payments for the non-cancelable portion of the Company’s operating leases at March 31, 2014 and 2013, were as follows: Due within one year Due after one year Millions of yen 2014 ¥5,095 9,387 ¥14,482 2013 ¥5,036 3,426 ¥8,462 Thousands of U.S. dollars 2014 $49,524 91,242 $140,766 Asahi Kasei Report 2014 79 2014旭化成_efs_1002入稿校了.indd 79 2014旭化成_efs_1002入稿校了.indd 79 2014/10/20 8:45 2014/10/20 8:45 10. Financial instruments (a) Overview of fi nancial instruments i) Policy related to fi nancial instruments The Company raises long-term funds as required mainly for its planned capital expenditures by borrowing from banks, borrowing from life insurance companies, issuing bonds, etc. A portion of the surplus funds is invested only in highly stable fi nancial assets. Short-term working funds are raised by bank borrowings, issuance of commercial paper, etc. Derivative transactions are mainly entered into for the purpose of reducing risks related to assets and liabilities which are exposed to risks of fl uctuations of exchange rate and interest rate. Derivatives are not traded for speculative purposes. ii) Components of fi nancial instruments, their risks and risk management structure 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 fi elds, operating receivables are not excessively concentrated on specifi c customers, but the parent company and each consolidated subsidiary monitors and manages the credit condition for each customer. Investment securities are exposed to the risk of fl uctuations in market price, but they are mainly equity securities of companies with which the Company has business relationships. These securi- ties are held for the purpose of maintaining the business relation- ships. Fair value is periodically evaluated, and the fi nancial condition of the issuing company is monitored. As operating liabilities, notes and accounts payable–trade gen- erally have a payment term of 1 year or less. Variable interest-rate borrowings are exposed to the risk of interest-rate fl uctuations, but derivatives (interest-rate and curren- cy swaps, interest-rate swaps) are used as hedges to fi x interest expenses for a portion of long-term variable interest-rate borrow- ings. Operating receivables and operating liabilities include those denominated in currencies other than Japanese yen, and are thus exposed to the risk of exchange-rate fl uctuations. In order to mini- mize the effects of short-term exchange-rate fl uctuations, the Company hedges with derivative transactions (forward exchange contracts), in principle, within the range of the underlying receiv- ables and liabilities amount. Derivative transactions are exposed to the credit risk of trans- acting fi nancial institutions, but the credit condition of those fi nancial institutions is reviewed through periodic monitoring. Such transactions are performed and managed in accordance with the Company’s internal regulations which stipulate the related authori- ty, procedures, limits, etc. Borrowings are exposed to liquidity risk, but the parent compa- ny specifi es 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 com- mitment-line agreements with transacting fi nancial institutions to manage such risk. Loan securitization in the housing business is exposed to the risk of interest-rate fl uctuations between the time of origination of housing loans and the time of execution of their securitization, but derivative transactions (interest-rate swaps) are entered into to reduce such risk. iii) Supplementary explanation of fair value of fi nancial instruments The fair value of fi nancial instruments is based on their quoted market price, if available. In the case where no quoted market price is available, a reasonably estimated fair value is used. As variable factors are incorporated in its estimation, fair value may change due to the adoption of different assumptions, conditions, etc. Amount of contract regarding derivative transactions in Note 12 “Derivative fi nancial instruments” is not itself an indication of the market risk of the derivative transactions. (b) Fair value of fi nancial instruments Amounts carried on the consolidated balance sheets, their fair values, and the differences between them as of March 31, 2014 and 2013, were as shown below. Financial instruments whose fair values are deemed extremely diffi cult to determine are not included in this table (See Notes 2) and 3) below). Cash and deposits Notes and accounts receivable–trade Allowance for doubtful accounts (*1) Investment securities Other securities Long-term loans receivable 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 deposits Total liabilities Carrying amount ¥151,474 316,705 (1,751) 314,955 163,193 9,766 639,388 159,925 84,776 10,000 48,520 40,000 164,867 4,229 6,654 518,971 Millions of yen 2014 Fair value ¥151,474 314,955 163,193 9,770 639,392 159,925 84,776 10,000 48,520 41,278 166,661 4,233 6,632 522,025 Derivative fi nancial instruments (*2) ¥(1,161) ¥(1,161) 80 Asahi Kasei Report 2014 Difference ¥— — — 4 4 — — — — (1,278) (1,794) (4) 22 (3,054) ¥— 2014旭化成_efs_1002入稿校了.indd 80 2014旭化成_efs_1002入稿校了.indd 80 2014/10/20 8:45 2014/10/20 8:45 Cash and deposits Notes and accounts receivable–trade Allowance for doubtful accounts (*1) Investment securities Other securities Long-term loans receivable 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 deposits Total liabilities Carrying amount ¥109,513 306,222 (1,538) 304,684 144,149 6,103 564,449 172,630 78,725 70,000 13,978 45,000 181,248 6,466 6,335 574,382 Millions of yen 2013 Fair value ¥109,513 304,684 144,149 6,124 564,470 172,630 78,725 70,000 13,978 46,458 184,293 6,489 6,323 578,896 Derivative fi nancial instruments (*2) ¥(1,787) ¥(1,787) Cash and deposits Notes and accounts receivable–trade Allowance for doubtful accounts (*1) Investment securities Other securities Long-term loans receivable 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 deposits Total liabilities Thousands of U.S. dollars 2014 Fair value $1472,337 3,061,382 1,586,246 94,965 6,214,930 1,554,481 824,028 97,201 471,617 401,225 1,619,955 41,145 64,463 5,074,115 Carrying amount $1472,337 3,078,392 (17,020) 3,061,382 1,586,246 94,926 6,214,891 1,554,481 824,028 97,201 471,617 388,802 1,602,517 41,106 64,677 5,044,430 Derivative fi nancial instruments (*2) $(11,285) $(11,285) Difference ¥— — — 21 21 — — — — (1,458) (3,045) (23) 13 (4,514) ¥— Difference $— — — 39 39 — — — — (12,422) (17,438) (39) 214 (29,685) $— (*1) This reduction represents specifi c allowance for doubtful accounts related to notes and accounts receivable–trade. (*2) The amounts represent net amount of assets and liabilities resulting from derivative transactions. In the case of a net liability, the amount is shown in parentheses. Note 1) Method to determine the estimated fair value of fi nancial instruments; securities and derivative fi nancial 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. paper, income taxes payable As their fair values approximate book value due to their short maturity, the corresponding book value amounts are used as fair value. 2) Bonds payable Fair value of the bonds payable issued by the parent company is based on the quoted market price if available. For those without quoted market price that are subject to special treatment for interest-rate swaps, fair value is based on the present value by totaling the amount of principal and interest, together with related interest-rate swaps, discounted by the interest rate that would apply if equivalent bonds were newly issued. 2) Investment securities 3) Long-term loans payable The stock exchange prices are used to determine fair value of these traded stocks. Refer to the Note 11 “Marketable securities and investment securities” for information on securities classifi ed by holding purpose. 3) Long-term loans receivable The carrying amounts shown include long-term loans receivable scheduled for repayment within one year. Their fair values are determined based on the present value of principal and interest, discounted using current assumed rates for similar long-term loans receivable. For long-term loans receivable bearing variable interest rates, as they are deemed to refl ect market interest rates within a short term, book values are used as fair value. ii) Liabilities 1) Notes and accounts payable–trade, short-term loans payable, commercial The carrying amounts shown include long-term loans payable that are scheduled for repayment within one year of March 31, 2014 and 2013, amounting to ¥18,830 million (US$183,029 thousand) and ¥34,319 million, respectively. Their fair values are based on present value of principal and interest discounted using the current assumed rates for similar long-term loans payable. For long-term loans payable bearing variable interest rates, fair value of those subject to special treatment of interest-rate swaps is based on present value by totaling the amount of principal and interest, together with related interest-rate swaps, discounted by the interest rate that would apply if equivalent long-term loans were newly entered. For other long-term loans payable, book value is used as fair value as they are deemed to refl ect market interest rates within a short term. Asahi Kasei Report 2014 81 2014旭化成_efs_1002入稿校了.indd 81 2014旭化成_efs_1002入稿校了.indd 81 2014/10/20 8:45 2014/10/20 8:45 4) Lease obligations The carrying amounts shown are the total amount of lease obligations under current liabilities and lease obligations under noncurrent liabilities. Present value, calculated by discounting the total amount of principal and interest using the presumed interest rate that would apply if lease transactions were newly made, is used as the fair value. 5) Long-term guarantee deposits In cases where the deposit period can be estimated, the fair value of long-term guarantee deposits is determined using a discounted cash fl ow over that period. iii) Derivative transactions Refer to Note 12 “Derivative fi nancial instruments.” Note 2) Note 3) Note 4) For equity investments in nonpublic companies, with a carrying amount as of March 31, 2014 and 2013, amounting to ¥75,226 million (US$731,201 thousand) and ¥80,878 million, respectively, fair value is not included in investment securities, as no quoted market price is available and it is deemed extremely diffi cult to determine fair value due to the impossibility of estimating future cash fl ows. For long-term guarantee deposits, the fair value of a portion having a carrying amount as of March 31, 2014 and 2013, amounting to ¥12,245 million (US$119,022 thousand) and ¥12,060 million, respectively, is not included as no quoted market price is available and it is deemed extremely diffi cult to determine fair value due to the impossibility of estimating future cash fl ows. For monetary credits and securities with maturity, amounts scheduled for redemption subsequent to the closing date are as follows. Cash and deposits Notes and accounts receivable–trade Long-term loans receivable Cash and deposits Notes and accounts receivable–trade Long-term loans receivable Cash and deposits Notes and accounts receivable–trade Long-term loans receivable Millions of yen 2014 Due within one year Due after one year, within fi ve years Due after fi ve years, within ten years Due after more than ten years ¥151,474 316,705 593 ¥468,773 ¥— — 8,969 ¥8,969 ¥— — 205 ¥205 ¥— — — ¥— Millions of yen 2013 Due within one year Due after one year, within fi ve years Due after fi ve years, within ten years Due after more than ten years ¥109,513 306,222 854 ¥416,589 ¥— — 5,181 ¥5,181 ¥— — 67 ¥67 ¥— — — ¥— Thousands of U.S. dollars 2014 Due within one year Due after one year, within fi ve years Due after fi ve years, within ten years Due after more than ten years $1,472,337 3,078,392 5,764 $4,556,503 $— — 87,179 $87,179 $— — 1,993 $1,993 $— — — $— Note 5) For bonds payable, long-term loans payable, lease obligations, and other interest-bearing debt, amounts scheduled for repayment subsequent to the closing date are as follows. Millions of yen 2014 Short-term loans payable Commercial paper Bonds payable Long-term loans payable Lease obligations ¥84,776 — — — — ¥— ¥10,000 — — — — ¥— ¥— — — 20,000 — ¥20,000 ¥18,830 31,457 39,143 17,975 45,009 ¥12,453 ¥1,784 1,367 848 168 21 ¥40 Millions of yen 2013 Short-term loans payable Commercial paper Bonds payable Long-term loans payable Lease obligations ¥78,725 — — — — ¥— ¥70,000 — — — — ¥— ¥5,000 — — — 20,000 ¥20,000 ¥34,319 18,747 30,217 27,470 16,288 ¥54,208 ¥2,415 1,778 1,342 800 119 ¥13 Total ¥115,390 32,824 39,991 38,144 45,030 ¥32,493 Total ¥190,458 20,525 31,559 28,269 36,407 ¥74,220 Year ending March 31 2015 2016 2017 2018 2019 2020 and thereafter Year ending March 31 2014 2015 2016 2017 2018 2019 and thereafter 82 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 82 2014旭化成_efs_1002入稿校了.indd 82 2014/10/20 8:45 2014/10/20 8:45 Year ending March 31 2015 2016 2017 2018 2019 2020 and thereafter Thousands of U.S. dollars 2014 Short-term loans payable $824,028 — — — — $— Commercial paper Bonds payable Long-term loans payable Lease obligations $97,201 — — — — $— $— — — 194,401 — $194,401 $183,029 305,764 380,472 174,718 437,490 $121,044 $17,341 13,287 8,243 1,633 204 $389 Total $1,121,598 319,051 388,715 370,762 437,694 $315,834 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 classi- fi ed as other securities for which fair values are available at March 31, 2014 and 2013, were as follows: Securities with unrealized gains: Equity securities Securities with unrealized losses: Equity securities Carrying amount Millions of yen 2014 Cost Unrealized gains (losses) ¥151,902 ¥34,203 ¥117,698 11,291 ¥163,193 12,020 ¥46,223 (729) ¥116,970 Note) For equity investment in nonpublic companies, with a carrying amount of ¥75,226 million, fair value is not included in short-term investment securities or in investment securities, as no quoted market price is available and it is deemed extremely diffi cult to determine fair value. Securities with unrealized gains: Equity securities Securities with unrealized losses: Equity securities Carrying amount Millions of yen 2013 Cost Unrealized gains (losses) ¥133,234 ¥34,656 ¥98,578 10,915 ¥144,149 12,489 ¥47,145 (1,573) ¥97,005 Note) For equity investment in nonpublic companies, with a carrying amount of ¥80,878 million, fair value is not included in short-term investment securities or in investment securities, as no quoted market price is available and it is deemed extremely diffi cult to determine fair value. Securities with unrealized gains: Equity securities Securities with unrealized losses: Equity securities Thousands of U.S. dollars 2014 Carrying amount Cost Unrealized gains (losses) $1,476,497 $332,455 $1,144,032 109,749 $1,586,246 116,835 $449,290 (7,086) $1,136,956 Note) For equity investment in nonpublic companies, with a carrying amount of US$731,201 thousand, fair value is not included in short-term investment securities or in investment securities, as no quoted market price is available and it is deemed extremely diffi cult to determine fair value. (b) Realized gains and losses on the sale of other securities The realized gains and losses on the sale of other securities during the years ended March 31, 2014 and 2013, were as follows: Selling amount Gain on sales of securities Loss on sales of securities Millions of yen 2014 ¥990 330 ¥— 2013 ¥617 81 ¥— Thousands of U.S. dollars 2014 $9,623 3,208 $— (c) Loss on other devaluation of investment securities whose fair values are readily determinable Loss on other devaluation of investment securities whose fair values are readily determinable for the years ended March 31, 2014 and 2013, was ¥1,223 million (US$11,888 thousand) and ¥511 million, respectively. Asahi Kasei Report 2014 83 2014旭化成_efs_1002入稿校了.indd 83 2014旭化成_efs_1002入稿校了.indd 83 2014/10/20 8:45 2014/10/20 8:45 12. Derivative fi nancial instruments (a) Derivative fi nancial instruments for which hedge accounting is not applied i) Foreign exchange forward contracts Classifi cation Items Amount of contract Amount of contract over 1 year Fair value Profi t (loss) from valuation Millions of yen 2014 Foreign exchange forward contracts Selling Off-market transactions U.S. dollar Euro Thai baht Buying U.S. dollar ¥19,904 6,114 1,157 3,501 ¥30,676 ¥— — — 166 ¥166 ¥(267) (80) (26) (661) ¥(1,035) ¥(267) (80) (26) (661) ¥(1,035) Millions of yen 2013 Classifi cation Items Amount of contract Amount of contract over 1 year Fair value Profi t (loss) from valuation Foreign exchange forward contracts Selling Off-market transactions U.S. dollar Euro Thai baht Buying U.S. dollar ¥16,869 5,627 744 1,828 ¥25,068 ¥— — — — ¥— ¥(498) (36) (71) (10) ¥(615) ¥(498) (36) (71) (10) ¥(615) Thousands of U.S. dollars 2014 Classifi cation Items Amount of contract Amount of contract over 1 year Fair value Profi t (loss) from valuation Foreign exchange forward contracts Selling Off-market transactions U.S. dollar Euro Thai baht Buying U.S. dollar $193,468 59,428 11,246 34,030 $298,182 $— — — 1,614 $1,614 $(2,595) (778) (253) (6,425) $(10,060) $(2,595) (778) (253) (6,425) $(10,060) (b) Derivative fi nancial instruments for which hedge accounting is applied i) Foreign exchange forward contracts Classifi cation Items Hedged assets/liabilities Amount of contract Millions of yen 2014 Amount of contract over 1 year Foreign exchange forward contracts Selling Principle- based accounting U.S. dollar Euro Buying U.S. dollar Thai baht Accounts receivable–trade Accounts receivable–trade Accounts payable–trade Accounts payable–trade ¥3,887 109 1,149 65 ¥5,210 ¥— — — — ¥— Fair value ¥(139) (1) 13 (0) ¥(126) 84 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 84 2014旭化成_efs_1002入稿校了.indd 84 2014/10/20 8:45 2014/10/20 8:45 Classifi cation Items Hedged assets/liabilities Amount of contract Millions of yen 2013 Amount of contract over 1 year Foreign exchange forward contracts Selling Principle- based accounting U.S. dollar Euro Buying U.S. dollar Thai baht Accounts receivable–trade Accounts receivable–trade Accounts payable–trade Accounts payable–trade ¥8,870 145 827 — ¥9,841 ¥382 — — — ¥382 Classifi cation Items Hedged assets/liabilities Amount of contract Thousands of U.S. dollars 2014 Amount of contract over 1 year Foreign exchange forward contracts Selling Principle- based accounting U.S. dollar Euro Buying U.S. dollar Thai baht Accounts receivable–trade Accounts receivable–trade Accounts payable–trade Accounts payable–trade $37,782 1,059 11,168 632 $50,642 $— — — $— ii) Interest-rate swaps, and interest-rate and currency swaps Fair value ¥(1,200) (1) 29 — ¥(1,172) Fair value $(1,351) (10) 126 (0) $(1,225) Classifi cation Special treatment for interest-rate swaps Special treatment for interest-rate and currency swaps Classifi cation Special treatment for interest-rate swaps Special treatment for interest-rate and currency swaps Items Hedged assets/liabilities Amount of contract Millions of yen 2014 Amount of contract over 1 year Fair value Long-term loans payable ¥88,580 ¥76,317 Interest-rate swaps Pay fi xed/receive fl oating Interest-rate and currency swaps U.S. dollar receive fi xed/ Japanese yen pay fl oating Bonds payable U.S. dollar receive fl oating/ Thai baht pay fi xed Long-term loans payable — 321 ¥88,901 — — ¥76,317 Millions of yen 2013 Amount of contract over 1 year Items Hedged assets/liabilities Amount of contract Interest-rate swaps Pay fi xed/receive fl oating Interest-rate and currency swaps U.S. dollar receive fi xed/ Long-term loans payable ¥96,306 ¥84,756 Japanese yen pay fl oating Bonds payable U.S. dollar receive fl oating/ Thai baht pay fi xed Long-term loans payable 5,000 650 — 325 ¥101,956 ¥85,081 (*) — (*) — Fair value (*) (*) (*) — 2014旭化成_efs_1002入稿校了.indd 85 2014旭化成_efs_1002入稿校了.indd 85 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 85 Classifi cation Special treatment for interest-rate swaps Special treatment for interest-rate and currency swaps Items Hedged assets/liabilities Amount of contract Thousands of U.S. dollars 2014 Amount of contract over 1 year Fair value Interest-rate swaps Pay fi xed/receive fl oating Interest-rate and currency swaps U.S. dollar receive fi xed/ Long-term loans payable $861,003 $741,806 (*) Japanese yen pay fl oating Bonds payable — U.S. dollar receive fl oating/ Thai baht pay fi xed Long-term loans payable 3,120 — — $864,123 $741,806 — (*) — (*) Fair value of interest-rate swaps and interest currency swaps, for which special treatment is applied, is included in fair value of the corresponding long-term loans payable and bonds payable for which hedge accounting is applied. 13. Provision for retirement benefi ts 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 ser- vice. Additional benefi ts may be granted to employees depending on the conditions under which termination of employment occurs. Certain for- eign subsidiaries have defi ned benefi t pension plans or defi ned contribution plans. The obligation for these severance indemnity benefi ts is provided for through accruals, contributory funded defi ned benefi t pension plans, contributory funded defi ned benefi t enterprise pension plans and non-contributory funded tax-qualifi ed pension plans. For the year ended March 31, 2014 Reconciliation of beginning and ending balances of projected benefi t obligations for the fi scal year 2014, was as follows: Beginning balance of the projected benefi t obligations Service cost Interest cost Accruals of unrecognized actuarial gains/losses Payment of retirement benefi ts Other Ending balance of the projected benefi t obligations Reconciliation of beginning and ending balances of plan assets for the fi scal year 2014, was as follows: Beginning balance of plan assets Expected return Accruals of unrecognized actuarial gains/losses Contributions Payment of retirement benefi ts Other Ending balance of plan assets Millions of yen 2014 ¥331,038 12,352 4,887 1,525 (20,315) 381 ¥329,869 Millions of yen 2014 ¥177,112 4,368 9,237 9,873 (11,971) 97 ¥188,715 Thousands of U.S. dollars 2014 $3,217,710 120,062 47,502 14,823 (197,463) 3,703 $3,206,347 Thousands of U.S. dollars 2014 $1,721,540 42,457 89,784 95,966 (116,359) 943 $1,834,322 Reconciliation of ending balance of projected benefi t obligations and the plan assets, and of net defi ned benefi t liability and net defi ned benefi t asset, as recorded in the consolidated balance sheets at March 31, 2014, was as follows: Projected benefi t obligations of funded plans Plan assets Subtotal Projected benefi t obligations of unfunded plans Net of obligations and assets recorded in the consolidated balance sheets Net defi ned benefi t liability Net defi ned benefi t asset Net of liability and asset recorded in the consolidated balance sheets 86 Asahi Kasei Report 2014 Millions of yen 2014 ¥204,264 (188,715) 15,549 125,605 141,154 143,523 (2,369) ¥141,154 Thousands of U.S. dollars 2014 $1,985,459 (1,834,322) 151,137 1,220,888 1,372,026 1,395,052 (23,027) $1,372,026 2014旭化成_efs_1002入稿校了.indd 86 2014旭化成_efs_1002入稿校了.indd 86 2014/10/20 8:45 2014/10/20 8:45 Periodic retirement benefi t expenses for employees and the breakdown of items for the year ended March 31, 2014, were as follows: Service cost (net of employee contributions) Interest cost Expected return on plan assets Amortization of unrecognized actuarial gains/losses Amortization of unrecognized prior service costs Additional retirement benefi ts Retirement benefi t expenses of defi ned benefi t plans Remeasurements of defi ned benefi t plans at March 31, 2014, were as follows: Unrecognized actuarial gains/losses Unrecognized prior service costs Total Ratio of the major classifi cations for plan assets at March 31, 2014, was as follows: Bonds Stock Life insurance Cash and deposits Other Total Millions of yen 2014 ¥10,713 4,887 (4,368) 6,140 (547) 903 ¥17,728 Millions of yen 2014 ¥644 36,659 ¥37,303 Thousands of U.S. dollars 2014 $104,131 47,502 (42,457) 59,681 (5,317) 8,777 $172,317 Thousands of U.S. dollars 2014 $6,260 356,328 $362,587 2014 41% 27% 13% 3% 16% 100% The current and future allocation of plan assets, and the current and future long-term rate of expected return from the variety of assets that make up the plan assets, are considered in determining the long-term rate of expected return on plan assets. Major actuarial assumptions (weighted average) at March 31, 2014, were as follows: Discount rate The long-term rate of expected return on plan assets Required payment to defi ned contribution plans at March 31, 2014, amounted to ¥578 million (US$5,618 thousand). For the year ended March 31, 2013 Information on provision for retirement benefi ts at March 31, 2013, was as follows: (a) Projected benefi t obligations (b) Fair value of plan assets (c) Unfunded benefi t 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 benefi ts [(f)-(g)] 2014 Mainly 1.4% Mainly 2.5% Millions of yen 2013 ¥(331,038) 177,112 (153,927) 50,634 94 (103,199) 4,577 ¥(107,776) Note: The fi gures in the above table do not include additional benefi t payables amounting to ¥2,747 million at March 31, 2013. The amounts were recorded as part of current liabilities on the consolidated balance sheets at March 31, 2013. Periodic retirement benefi t expenses for employees for the year ended March 31, 2013, included 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 benefi t expenses Millions of yen 2013 ¥9,858 6,116 (3,993) 5,297 (1,403) ¥15,875 Note: In addition to the above costs, additional benefi ts amounting to ¥3,180 million for the year ended March 31, 2013, and contributions to the defi ned contribution plans amounting to ¥414 million for the year ended March 31, 2013, were charged to income. * Not including contributions made by employees. Asahi Kasei Report 2014 87 2014旭化成_efs_1002入稿校了.indd 87 2014旭化成_efs_1002入稿校了.indd 87 2014/10/20 8:45 2014/10/20 8:45 The assumptions used in calculation of the above information were as follows: Discount rate Expected rate of return on plan assets Method of attributing the projected benefi ts to periods of employee service Amortization of unrecognized prior service costs Amortization of unrecognized actuarial gains/losses 2013 Mainly 1.4% Mainly 2.5% Straight-line basis Mainly 10 years Mainly 10 years 14. Taxes Income taxes applicable to the parent company and subsidiaries in Japan include (1) corporation tax, (2) enterprise tax, and (3) inhabitants tax. Signifi cant components of deferred tax assets and liabilities at March 31, 2014 and 2013, were as follows: Deferred tax assets: Provision for retirement benefi ts Net defi ned benefi t liability Tax loss carry forwards Accrued bonuses Loss on disposal of noncurrent assets Impairment loss Unrealized gain on noncurrent assets and others Accrued enterprise tax Depreciation Provision for periodic repairs Unrealized loss on investment securities Provision for product warranties Asset retirement obligations Devaluation of inventories Allowance for doubtful accounts Environmental expenses Experiment and research expenses Deferred gains or losses on hedges Other Subtotal deferred tax assets Less: Valuation allowance Total deferred tax assets Deferred tax liabilities: Unrealized gain on other securities Identifi ed intangible assets during business combination Deferred gain on property, plant and equipment Depreciation—overseas subsidiaries Accelerated depreciation Other Total deferred tax liabilities Millions of yen 2014 2013 ¥ — 50,379 17,045 8,593 6,331 5,096 4,342 4,187 3,403 2,830 2,412 1,284 1,234 1,190 969 409 90 54 9,922 119,771 (24,590) 95,181 (43,469) (30,452) (10,546) (3,849) (299) (6,683) (95,297) ¥38,003 — 21,444 8,027 2,859 3,873 3,825 1,455 3,543 2,710 2,308 1,298 1,315 1,220 990 538 2,825 456 9,736 106,426 (29,072) 77,354 (36,645) (29,763) (10,952) (3,606) (240) (5,749) (86,956) Thousands of U.S. dollars 2014 $ — 489,687 165,678 83,524 61,538 49,533 42,205 40,698 33,077 27,508 23,445 12,481 11,995 11,567 9,419 3,976 875 525 96,442 1,164,182 (239,016) 925,165 (422,521) (295,995) (102,508) (37,413) (2,906) (64,959) (926,293) Net deferred tax assets (liabilities) ¥ (115) ¥(9,602) $ (1,118) Net deferred tax assets (liabilities) at March 31, 2014 and 2013, were included in the following line items on the consolidated balance sheets. Current assets—deferred tax assets Non-current assets—deferred tax assets Current liabilities—other Non-current liabilities—deferred tax liabilities 88 Asahi Kasei Report 2014 Millions of yen 2014 ¥27,469 16,278 (420) ¥(43,441) 2013 ¥21,945 8,487 (49) ¥(39,985) Thousands of U.S. dollars 2014 $267,000 158,223 (4,082) $ (422,249) 2014旭化成_efs_1002入稿校了.indd 88 2014旭化成_efs_1002入稿校了.indd 88 2014/10/20 8:45 2014/10/20 8:45 Reconciliation of the difference between the statutory tax rate and the effective income tax rate for the years ended March 31, 2014 and 2013, was as follows: Statutory tax rate Increase (reduction) in taxes resulting from: Non-deductible expenses and non-taxable income Equalization of inhabitants taxes R&D expenses deductible from income taxes Amortization of goodwill and negative goodwill Equity in earnings (losses) of unconsolidated subsidiaries and affi liates Undistributed earnings of foreign subsidiaries Difference of tax rates for foreign subsidiaries Valuation allowance Decrease in deferred tax asset due to the change in statutory tax rate Other Effective income tax rate 2014 38.0% 2013 38.0% 0.7 0.3 (3.4) 1.9 0.4 0.4 (0.3) (1.2) 0.9 0.7 0.6 (5.5) 2.8 (0.2) 1.0 (1.0) (1.8) — (0.1) 37.7% (0.1) 34.5% The “Act for Partial Revision of the Income Tax Act etc.” (Act. No. 10 of 2014), “Act for Partial Revision of the Local Tax Act, etc.” (Act No. 4 of 2014), and “Local Tax Act on Corporations” (Act No. 11 of 2014) were issued on March 31, 2014, and accordingly the special Japanese recon- struction corporate tax applicable to the Company and its domestic subsidiaries will no longer be applied from the fi scal year beginning on or after April 1, 2014. In accordance with this change, the statutory effective tax rate applied in calculating deferred tax assets and liabilities is changed from 38.0% to 35.6% from the fi scal year beginning on or after April 1, 2014. As a result of this change, net unrealized gain on other securities increased by ¥2 million (US$19 thousand) and deferred gains or losses on hedges decreased by ¥2 million (US$19 thousand) in the consolidated balance sheets as of March 31, 2014, income taxes-deferred increased by ¥1,464 million (US$14,230 thousand) in the consolidated statements of income for the year then ended, and deferred tax assets, (after netting deferred tax liabilities) decreased by ¥1,463 million (US$14,220 thousand) in the consolidated balance sheets as of March 31, 2014. 15. Asset retirement obligations (a) Outline of asset retirement obligations Due to commitments pertaining to restoration to original state before vacating in accordance with land lease agreements such as for offi ces, and due to commitments to dismantle leased buildings upon termination of lease period, etc., in accordance with lease agreements for model home parks, relevant asset retirement obligations are recorded in the consolidated balance sheets. In accordance with building lease agreements such as for the head offi ces, commitments pertaining to restoration to original state before vacating are recognized as asset retirement obligations. However, instead of recording them as the relevant asset retirement obligations under lia- bilities, the amount of lease deposit that cannot ultimately be expected to be collected was estimated in a reasonable manner, and of that, the amount corresponding to the fi scal year ended March 31, 2014, was recorded under operating expenses. (b) Method of calculating the amount of relevant asset retirement obligations The calculation of asset retirement obligations is based on the following: expected term of use of 4 to 55 years, infl ation rate of 0.0% to 4.1%, and discount rate of 0.2% to 5.4%. (c) Increase (decrease) in the total amount of asset retirement obligations in the fi scal years ended March 31, 2014 and 2013. Balance at beginning of year Increase due to asset retirement obligations accrued Adjustment due to passage of time Increase (decrease) due to accounting estimates* Decrease due to fulfi llment of asset retirement obligations Increase (decrease) due to foreign exchange fl uctuation Balance at end of year Millions of yen 2014 ¥3,556 383 112 161 (463) 300 ¥4,050 2013 ¥3,701 126 124 (349) (379) 334 ¥3,556 Thousands of U.S. dollars 2014 $34,565 3,723 1,089 1,565 (4,500) 2,916 $39,366 * Increase or decrease in asset retirement obligations was made as it became clear that the cost of asset retirement will be different than originally estimated at the time of asset acquisition. The amount of lease deposit, which will be written off for a certain percentage at the end of the lease period is charged to expense rather than recorded under asset retirement obligations. Increase (decrease) in those expensed amounts for the fi scal years ended March 31, 2014 and 2013, were as follows: Balance at beginning of year Increase due to new lease agreements Decrease due to the cancelation of existing lease agreements Balance at end of year Millions of yen 2014 ¥1,629 114 (90) ¥1,652 2013 ¥1,643 56 (70) ¥1,629 Thousands of U.S. dollars 2014 $15,834 1,108 (875) $16,058 Asahi Kasei Report 2014 89 2014旭化成_efs_1002入稿校了.indd 89 2014旭化成_efs_1002入稿校了.indd 89 2014/10/20 8:45 2014/10/20 8:45 16. Business segment information (a) Overview of reportable segments The Company is organized under a holding company confi guration with core operating companies performing operations in nine business fi elds. Separate fi nancial information is available in these nine units, and the Board of Directors carries out periodic review to allocate manage- ment resources and evaluate business performance. The nine units are combined into seven reportable segments of Chemicals, Fibers, Homes, Construction Materials, Electronics, Health Care, and Critical Care through application of Paragraph 13 of “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information.” Beginning with the fi scal year ended March 31, 2014, the disclosure sequence of reportable segments has been changed to correspond with the classifi cation of the Company’s four business sectors: Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care. In the “Critical Care” segment, results for the prior period from April 27, 2012, to March 31, 2013, were disclosed, while results throughout the entire period of the fi scal year ended March 31, 2014 were subject to consolidation. Main products of the seven reportable segments are as follows: Chemicals The Company produces, processes, and sells chemicals and derivative products (such as nitric acid, caustic soda, acrylonitrile, styrene, adipic acid, methyl methacrylate (MMA), and acrylic resin), polymer products (such as Stylac™-AS styrene-acrylonitrile, Stylac™-ABS acrylonitrile- butadiene-styrene, Tenac™ polyacetal, Xyron™ modifi ed polyphenylene ether (m-PPE), Leona™ polyamide 66, Suntec™ polyethylene, synthetic rubber, and polystyrene), and specialty products (such as coating materi- als, 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 fi lm, Ziploc™ storage bags, and plastic fi lms, sheets, and foams). Fibers The Company produces, processes, and sells Roica™ elastic polyure- thane fi lament, Bemberg™ cupro fi ber, nonwoven fabrics (such as Eltas™ spunbond and Lamous™ artifi cial suede), and Leona™ nylon 66 fi lament. Homes The Company constructs Hebel Haus™ unit homes and Hebel Maison™ apartments, and operates real estate business (such as management of Hebel Maison™ rental units, Atlas™ condominiums, Hebel Town™ housing developments, and brokerage of used Hebel Haus™ homes), remodeling business (such as exterior wall refurbishing, reroofi ng, rede- sign, interior renovation, and solar panel installation), and fi nancial and other services (such as mortgage fi nancing, etc.). Construction Materials The Company produces and sells Hebel™ and Hebel Powerboard™ autoclaved aerated concrete (AAC) panels, Neoma™ and Jupii™ phe- nolic foam insulation panels, Eazet™, ATT Column™, and other piling systems, and BasePack™ column base attachment systems. Electronics The Company manufactures and sells mixed-signal LSIs, Hall elements, Hipore™ Li-ion battery separators, photomask pellicles, APR™ photo- sensitive resin and printing plate making systems, Pimel™ photosensi- tive polyimide precursor, Sunfort™ photosensitive dry fi lm, and glass fabric for printed wiring boards. Health Care The Company manufactures and sells pharmaceuticals (such as Recomodulin™, Teribone™, Elcitonin™, Flivas™, Toledomin™, and Bredinin™), Lucica™ GA-L assay kits, L-series enriched liquid diets, APS™ polysulfone-membrane artifi cial kidneys, therapeutic apheresis devices, Planova™ virus removal fi lters, and Sepacell™ leukocyte reduc- tion fi lters. Critical Care The Company manufactures and sells defi brillators for medical profes- sionals, LifeVest™ wearable defi brillators, ZOLL AED Plus™ automated external defi brillators, and IVTM—Thermogard XP™ intravascular tem- perature management systems. (b) Methods to determine net sales, income or loss, assets, and other items by reportable business segment Profi t by reportable business segment is stated on an operating income basis. Intersegment net sales and transfers are based on the values of transactions undertaken between third parties. (c) Information concerning net sales, income or loss, assets, and other items for each reportable segment Millions of yen 2014 Chemicals Fibers Homes Construction Materials Electronics Health Care Critical Care Subtotal Others (Note 1) Total Sales: External customers ¥791,615 ¥120,890 ¥534,377 ¥55,003 ¥144,995 ¥152,546 ¥79,840 ¥1,879,267 ¥18,499 ¥1,897,766 Intersegment Total 33,189 1,869 85 16,758 490 39 — 52,430 23,767 76,197 824,804 122,760 534,462 71,761 145,485 152,585 79,840 1,931,698 42,266 1,973,963 Operating income (loss) 38,879 8,565 62,984 5,506 14,239 30,268 (3,526) 156,916 1,745 158,660 Assets Other items 659,593 119,493 351,621 49,447 174,883 221,003 255,786 1,831,826 62,935 1,894,761 Depreciation (Note 3) 31,086 5,883 5,883 2,186 14,303 10,034 Amortization of goodwill 551 2 15 918 9,983 7,097 79,357 8,583 994 240 80,351 8,823 35,489 5,168 2,954 41 — 43,652 17,948 61,601 — — — — Investments in affi liates accounted for using equity method Increase in property, plant and equipment, and intangible assets ¥30,754 ¥8,008 ¥8,666 ¥6,371 ¥14,583 ¥9,457 ¥8,697 ¥86,536 ¥1,395 ¥87,930 Notes: 1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffi ng operations. 2. Beginning with the fi scal year ended March 31, 2014, the disclosure sequence of reportable segments has been changed to correspond with the classifi cation of the Company’s four business sectors: Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care. 3. Amortization of goodwill is not included. 90 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 90 2014旭化成_efs_1002入稿校了.indd 90 2014/10/20 8:45 2014/10/20 8:45 Millions of yen 2013 Chemicals Fibers Homes Construction Materials Electronics Health Care Critical Care (Notes 2, 3) Subtotal Others (Note 1) Total Sales: External customers ¥684,582 ¥109,613 ¥486,182 ¥51,504 ¥131,148 ¥133,450 ¥52,131 ¥1,648,610 ¥18,031 ¥1,666,640 Intersegment Total 20,678 1,794 215 15,948 420 66 — 39,120 23,967 63,088 705,260 111,406 486,397 67,451 131,569 133,516 52,131 1,687,730 41,998 1,729,728 Operating income (loss) 22,925 4,030 54,266 3,962 2,824 15,932 (3,667) 100,272 2,195 102,467 Assets Other items 650,519 115,584 304,675 46,804 167,723 183,836 240,318 1,709,460 59,240 1,768,700 Depreciation (Note 4) 29,993 6,099 5,266 2,271 15,003 10,493 Amortization of goodwill 436 — 12 1,005 6,933 5,337 76,058 6,790 934 199 76,992 6,989 41,313 4,667 2,489 42 — 48,512 16,643 65,154 — — — — Investments in affi liates accounted for using equity method Increase in property, plant and equipment, and intangible assets ¥47,290 ¥6,833 ¥9,527 ¥2,186 ¥17,011 ¥14,275 ¥5,416 ¥102,538 ¥1,140 ¥103,677 Notes: 1. The “ Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffi ng operations. 2. The “Critical Care” segment is newly added during the fi rst quarter of fi scal 2012, as the result of completion of the acquisition of ZOLL Medical Corporation and its subsidiaries on April 26, 2012 (US Eastern standard time). 3. In the “Critical Care” segment, results for this period were included beginning on April 27, 2012. 4. Amortization of goodwill is not included . Thousands of U.S. dollars 2014 Chemicals Fibers Homes Construction Materials Electronics Health Care Critical Care Subtotal Others (Note 1) Total Sales: External customers $7,694,547 $1,175,058 $5,194,178 $534,633 $1,409,360 $1,482,757 $776,050 $18,266,592 $179,811 $18,446,404 Intersegment Total 322,599 18,167 826 162,889 4,763 379 — 509,623 231,017 740,640 8,017,146 1,193,235 5,195,004 697,521 1,414,123 1,483,136 776,050 18,776,225 410,828 19,187,043 Operating income (loss) 377,906 83,252 612,208 53,519 138,404 294,207 (34,273) 1,525,233 16,962 1,542,185 Assets Other items 6,411,285 1,161,479 3,417,778 480,628 1,699,874 2,148,163 2,486,256 17,805,463 611,732 18,417,195 Depreciation (Note 3) 302,158 57,183 57,183 21,248 139,026 97,531 97,035 771,355 Amortization of goodwill 5,356 19 146 8,923 68,983 83,427 9,662 2,333 781,017 85,760 344,955 50,233 28,713 399 — 424,300 174,456 598,766 — — — — Investments in affi liates accounted for using equity method Increase in property, plant and equipment, and intangible assets $298,931 $77,838 $84,234 $61,927 $141,748 $91,923 $84,535 $841,135 $13,559 $854,685 Notes: 1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffi ng operations. 2. Beginning with the fi scal year ended March 31, 2014, the disclosure sequence of reportable segments has been changed to correspond with the classifi cation of our four business sectors: Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care. 3. Amortization of goodwill is not included. (d) Reconciliation of differences between total amounts of reportable segments and amounts appearing in the consolidated fi nancial statements (adjustment of difference) Sales Total of reporting segments Net sales in “Others” category Elimination of intersegment transactions Net sales on consolidated statements of income Operating income Total of reporting segments Operating income in “Others” category Elimination of intersegment transactions Corporate expenses, etc.* Operating income on consolidated statements of income Millions of yen 2014 2013 ¥1,931,698 42,266 (76,197) ¥1,897,766 ¥1,687,730 41,998 (63,088) ¥1,666,640 Millions of yen 2014 ¥156,916 1,745 388 (15,702) ¥143,347 2013 ¥100,272 2,195 1,469 (11,975) ¥91,960 Thousands of U.S. dollars 2014 $18,776,225 410,828 (740,640) $18,446,404 Thousands of U.S. dollars 2014 $1,525,233 16,962 3,771 (152,624) $1,393,342 * Corporate expenses, etc. include corporate revenue, basic research expense, and group management expense, etc. which are not allocated to reporting segments. Asahi Kasei Report 2014 91 2014旭化成_efs_1002入稿校了.indd 91 2014旭化成_efs_1002入稿校了.indd 91 2014/10/20 8:45 2014/10/20 8:45 Assets Total of reporting segments Assets in “Others” category Elimination of intersegment transactions Corporate assets* Total assets on consolidated balance sheets Millions of yen 2014 2013 ¥1,831,826 62,935 (244,286) 264,613 ¥1,915,089 ¥1,709,460 59,240 (200,347) 231,817 ¥1,800,170 Thousands of U.S. dollars 2014 $17,805,463 611,732 (2,374,475) 2,572,055 $18,614,784 * Corporate assets include assets of the parent company—surplus operating funds (cash and deposits), long-term investment capital (investment securities, etc.), and land, etc. Total of reportable segments Others Adjustments (Note 1) Amounts from consolidated fi nancial statements Millions of yen Thousands of U.S. dollars Millions of yen Thousands of U.S. dollars Millions of yen Thousands of U.S. dollars Millions of yen Thousands of U.S. dollars Other items 2014 2013 2014 2014 2013 2014 2014 2013 2014 2014 2013 2014 Depreciation (Note 2) ¥79,357 ¥76,058 $771,355 ¥994 ¥934 $9,662 ¥5,701 ¥3,058 $55,414 ¥86,052 ¥80,050 $836,431 Amortization of goodwill Investments in affi liates accounted for using the equity method Increase in property, plant and equipment, and intangible assets 8,583 6,790 83,427 240 199 2,333 43,652 48,512 424,300 17,948 16,643 174,456 — — — — — 8,823 6,989 85,760 — 61,601 65,154 598,766 ¥86,536 ¥102,538 $841,135 ¥1,395 ¥1,140 $13,559 ¥4,466 ¥10,108 $43,410 ¥92,397 ¥113,785 $898,105 Notes: 1. Adjustments include elimination of intersegment transactions and corporate expenses, etc. 2. Amortization of goodwill is not included. (e) Related Information i) Information on products and services Please refer to (c) Information concerning net sales, income or loss, assets, and other items for each reportable segment. ii) Geographic information 1) Net sales Japan China 2014 Other regions Total Japan China 2013 Other regions Millions of yen Thousands of U.S. dollars 2014 Total Japan China Other regions Total ¥1,289,054 ¥187,247 ¥421,465 ¥1,897,766 ¥1,181,429 ¥155,570 ¥329,641 ¥1,666,640 $12,529,685 $1,820,052 $4,096,666 $18,446,404 2) Property, plant and equipment Millions of yen Japan 2014 Other regions Total Japan 2013 Other regions Total Japan Thousands of U.S. dollars 2014 Other regions Total ¥363,241 ¥117,295 ¥480,535 ¥369,481 ¥92,100 ¥461,581 $3,530,725 $1,140,115 $4,670,830 3) Information by major customer Information by major customer is not shown because no customer accounts for 10% or more of net sales on the consolidated statements of income. 17. Information on related parties Related party transactions Transactions between consolidated subsidiaries of the company submitting the consolidated fi nancial statements and related parties Subsidiaries, affi liates, etc. of the company submitting the consolidated fi nancial statements. An affi liated company PTT Asahi Chemical Co., Ltd. Rayong, Thailand 14,246 million Thai baht Chemicals Type of related party Name of company Location Paid-in capital Business line Holding ratio of voting rights (of which, indirect holding ratio) 48.5% (48.5%) Debt guarantee Relationship with the related party Guarantee for completion of manufacturing facilities Nature of transaction ¥16,416 million in the year ended March 31, 2014, ¥17,341 million in the year ended March 31, 2013 — — Amount name Balance at end of year Transaction amount 92 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 92 2014旭化成_efs_1002入稿校了.indd 92 2014/10/20 8:45 2014/10/20 8:45 18. Per share information Basic and diluted net assets per share and net income per share for the years ended March 31, 2014 and 2013, were as follows: Basic net assets per share Basic net income per share (a) Basis for calculation of net assets per share Total net assets Amount deducted from total net assets of which, minority interests Net assets allocated to capital stock Yen 2014 ¥653.15 ¥72.48 2013 ¥581.05 ¥38.43 Millions of yen 2014 2013 U.S. dollars 2014 $6.35 $0.70 Thousands of U.S. dollars 2014 ¥925,766 ¥824,451 $8,998,503 13,067 (13,067) 12,371 (12,371) 127,012 (127,012) ¥912,699 ¥812,080 $8,871,491 Number of shares of capital stock outstanding at fi scal year end used in calculation of net assets per share (thousand) 1,397,386 1,397,600 1,397,386 (b) Basis for calculation of net income per share Net income Amount not allocated to capital stock Net income allocated to capital stock Millions of yen 2014 ¥101,296 — 2013 ¥53,712 — Thousands of U.S. dollars 2014 $984,603 — ¥101,296 ¥53,712 $984,603 Weighted-average number of shares of capital stock used in calculation of net income per share (thousand) 1,397,501 1,397,651 1,397,501 As the Company had no dilutive securities at March 31, 2014 and 2013, the Company does not disclose diluted net income per share for the years ended March 31, 2014 and 2013. 19. Subsequent events Until the fi scal year ended March 31, 2014, the business fi elds of the nine core operating companies had been combined into seven reportable segments of Chemicals, Fibers, Homes, Construction Materials, Electronics, Health Care, and Critical Care through application of Paragraph 13 of “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information.” From the fi scal year ending March 31, 2015, the reportable segments will be based on the business areas of the four business sectors: Chemicals & Fibers, Homes & Construction Materials, Electronics, and Health Care, based on a change in the Company’s governance structure. The change in the Company’s governance structure was made in April 2014 to enhance the management foundation in the business fi elds that the Company is focused on, to obtain more transparent governance, and to enable fl exible adaptation to changes in the operating environ- ment. Recalculated segment information concerning net sales and operating income for each reportable segment for the year ended March 31, 2014, based on the new segmentation is as follows: Millions of yen 2014 Chemicals and Fibers Homes and Construction Materials Sales: Electronics Health Care Subtotal Others Total Adjustment Consolidated External customers ¥912,505 ¥589,380 ¥144,995 ¥232,387 ¥1,879,267 ¥18,499 ¥1,897,766 ¥ — ¥1,897,766 Intersegment 17,149 84 490 39 17,762 23,767 41,529 (41,529) — Total 929,655 589,464 145,485 232,425 1,897,029 42,266 1,939,295 (41,529) 1,897,766 Operating income (loss) 47,447 68,517 14,239 26,742 156,945 1,745 158,690 (15,343) 143,347 Note:1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffi ng operations. Thousands of U.S. dollars 2014 Chemicals and Fibers Homes and Construction Materials Sales: Electronics Health Care Subtotal Others Total Adjustment Consolidated External customers $8,869,605 $5,728,810 $1,409,360 $2,258,816 $18,266,592 $179,811 $18,446,404 $ — $18,446,404 Intersegment 166,689 816 4,763 379 172,648 231,017 403,664 (403,664) — Total 9,036,304 5,729,627 1,414,123 2,259,185 18,439,240 410,828 18,850,068 (403,664) 18,446,404 Operating income (loss) 461,188 665,990 138,404 259,934 1,525,515 16,962 1,542,477 (149,135) 1,393,342 Note:1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffi ng operations. Asahi Kasei Report 2014 93 2014旭化成_efs_1002入稿校了.indd 93 2014旭化成_efs_1002入稿校了.indd 93 2014/10/20 8:45 2014/10/20 8:45 20. Borrowings (a) Bonds payable at March 31, 2014 and 2013 Unsecured 1.90% Euro yen bonds due in 2013 (of which, current portion of bonds) Unsecured 1.46% yen bonds due in 2019 Unsecured 0.30% yen bonds due in 2017 Total Note 1) The current portion of bonds payable is recorded under current liabilities on the consolidated balance sheets. 2) The aggregate annual maturities of long-term debt after March 31, 2014, are as follows: Year ending March 31 2015 2016 2017 2018 2019 2020 and thereafter Millions of yen 2014 ¥— 20,000 20,000 ¥40,000 2013 ¥5,000 (¥ —) 20,000 20,000 ¥45,000 Thousands of U.S. dollars 2014 $— 194,401 194,401 $388,802 Millions of yen Thousands of U.S. dollars ¥— — — 20,000 — 20,000 ¥40,000 (b) Loans payable at March 31, 2014 and 2013 Short-term loans payable with interest rate 0.55% Current portion of long-term loans payable with interest rate 0.64% Current portion of lease obligations with interest rate 1.62% Millions of yen 2014 ¥84,776 18,830 1,784 Long-term loans payable (except portion due within one year) with interest rate 0.70% 146,037 Lease obligations (except portion due within one year) with interest rate 1.39% Commercial paper with interest rate 0.08% (due within one year) 2,445 10,000 2013 ¥78,725 34,319 2,415 146,929 4,051 70,000 $— — — 194,401 — 194,401 $388,802 Thousands of U.S. dollars 2014 $824,028 183,029 17,341 1,419,489 23,766 97,201 Note 1) Interest rates shown are weighted average interest rates for the balance outstanding at March 31, 2014. 2) The aggregate annual maturities of long-term loans payable and lease obligations (except portion due within one year) after March 31, 2015, are as follows: Long-term loans payable Lease obligations ¥263,872 ¥336,439 $2,564,852 Year ending March 31 Millions of yen 2016 2017 2018 2019 2020 and thereafter ¥31,457 39,143 17,975 45,009 ¥12,453 Thousands of U.S. dollars $305,764 380,472 174,718 437,490 $121,044 Millions of yen ¥1,367 848 168 21 ¥40 Thousands of U.S. dollars $13,287 8,243 1,633 204 $389 94 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 94 2014旭化成_efs_1002入稿校了.indd 94 2014/10/20 8:45 2014/10/20 8:45 2014旭化成_efs_1002入稿校了.indd 95 2014旭化成_efs_1002入稿校了.indd 95 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 95 Major Subsidiaries and Affi liates As of July 31, 2014 Main products/business line Chemicals Packaging products and solutions Specialty chemicals Cling fi lm, other household products Aluminum paste Sale of civil engineering materials Shotgun cartridges Water treatment equipment, environmental chemicals Processed plastic products Synthetic rubber Polystyrene Biaxially oriented polystyrene sheet Silicone Industrial explosives Coloring and compounding of performance resin Compounded performance resin operations Sale of purging compound Acrylonitrile, sodium cyanide Sale of adipic acid High-performance HDI-based polyisocyanate Polyacetal Industrial fi ltration membranes and systems Sale of performance resin Sale of performance resin Sale of performance resin Company Chemicals & Fibers Segment Asahi Kasei Chemicals Corp.* Asahi Kasei Pax Corp.* Asahi Kasei Finechem Co., Ltd.* Asahi Kasei Home Products Corp.* Asahi Kasei Metals 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.* PS Japan Corp.* Sundic Inc. Wacker Asahikasei Silicone Co., Ltd. Kayaku Japan Co., Ltd. Asahi Kasei Plastics North America, Inc.* Asahikasei Plastics (America) Inc.* Sun Plastech Inc.* Tong Suh Petrochemical Corp., Ltd.* Asahi Kasei Chemicals Korea Co., Ltd. Asahi Kasei Performance Chemicals Corp.* Asahi Kasei POM (Zhangjiagang) Co., Ltd. Asahi Kasei Microza (Hangzhou) Co., Ltd.* Asahikasei Plastics (Shanghai) Co., Ltd. Asahi Kasei Plastics (Guangzhou) Co., Ltd. Asahi Kasei Plastics (Hong Kong) Co., Ltd. Asahikasei (Suzhou) Plastics Compound Co., Ltd. Coloring and compounding of performance resin Asahi Kasei Synthetic Rubber Singapore Pte. Ltd.* Synthetic rubber Performance resin Asahi Kasei Plastics Singapore Pte. Ltd.* PPE powder Polyxylenol Singapore Pte. Ltd.* Coloring and compounding of performance resin Asahikasei Plastics (Thailand) Co., Ltd. Acrylonitrile, methyl methacrylate PTT Asahi Chemical Co., Ltd. Sale of compounded performance resin Asahi Kasei Plastics Europe SA/NV* Fibers, textiles Asahi Kasei Fibers Corp.* Processing of fi bers and textiles Asahi Kasei Intertextiles Corp.* Flash spun products DuPont-Asahi Flash Spun Products Co., Ltd. Spandex Hangzhou Asahikasei Spandex Co., Ltd.* Warp-knit spandex textiles Hangzhou Asahikasei Textiles Co., Ltd.* Spandex Formosa Asahi Spandex Co., Ltd. Promotion and marketing of fi bers Asahi Chemical (HK) Ltd.* Spunbond nonwovens Asahi Kasei Spunbond (Thailand) Co., Ltd.* Spandex Thai Asahi Kasei Spandex Co., Ltd.* Spandex Asahi Kasei Spandex Europe GmbH* Sale of cupro cellulosic fi ber and nonwovens Asahi Kasei Fibers Italy SRL* Homes & Construction Materials Segment Asahi Kasei Homes Corp.* Asahi Kasei Fudousan Residence Corp.* Asahi Kasei Jyuko Co., Ltd.* Asahi Kasei Mortgage Corp.* Asahi Kasei Reform Co., Ltd.* Asahi Kasei Home Construction Corp.* Asahi Kasei Chintai Support Corp.* Asahi Kasei Construction Materials Corp.* Asahi Kasei Foundation Systems Corp.* Asahi Kasei Extech Corp.* Housing ¥ Real estate development, brokerage, and related business ¥ ¥ Steel frames ¥ Financial services ¥ Home maintenance and remodeling ¥ Construction of homes ¥ Apartment rental insurance ¥ Construction materials ¥ Installation of piles ¥ Exterior wall panel installation Paid-in capital (million) Equity interest (%) 3,000 490 325 250 250 132 100 100 160 1,000 5,000 1,500 1,050 60 ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥ US$ US$ 1 US$ KRW 237,642 KRW 1,500 285 CNY 265 CNY 69 CNY 18 CNY 10 CNY 2.6 US$ 50 CNY 125 US$ 46 US$ 35 US$ 140 THB THB 14,246 A 5 3,000 80 450 154 78 1,003 65 1,185 1,350 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 99.4 75.0 62.1 50.0 50.0 50.0 21.7 ** 100.0 17.8 ** 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 51.0 100.0 100.0 70.0 100.0 48.5 100.0 100.0 100.0 50.0 100.0 92.5 50.0 100.0 89.5 60.0 23.8 ** 100.0 100.0 ¥ ¥ ¥ CNY CNY NT$ HK$ THB THB A A 3 3,250 3,200 2,820 1,000 250 100 50 3,000 200 50 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 * Consolidated subsidiary ** Including capital reserve 96 Asahi Kasei Report 2014 2014旭化成_efs_1002入稿校了.indd 96 2014旭化成_efs_1002入稿校了.indd 96 2014/10/20 8:45 2014/10/20 8:45 Paid-in capital (million) Equity interest (%) 3,000 ¥ 3,000 ¥ 300 ¥ 50 ¥ 50 ¥ ¥ 50 KRW 7,962 2.9 US$ 820 KRW 30 ¥ 40 ¥ 181 CNY 143 CNY 14 CNY 10 NT$ 1 NT$ 49 NT$ 326 NT$ A 3.0 A 3.4 0.3 £ 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 80.6 51.0 100.0 100.0 100.0 3,000 3,000 140 100.0 ¥ 100.0 ¥ 100.0 ¥ 49** 100.0 US$ 100.0 30 US$ 100.0 US$ 0.5 100.0 KRW 1,000 100.0 165 CNY 100.0 5 NT$ A 100.0 17.8 A 100.0 0.5 100.0 0.01 1,723 ** 100.0 100.0 100.0 YTL US$ ¥ ¥ 230 10 Electronic devices Electronic materials Epoxy resin LSIs Glass fabric Hall elements Energy and electronic materials Sale of LSIs Electronic devices marketing and technical support LSI design Electronic devices and printed wiring boards Electronic devices marketing and technical support Electronic devices marketing and technical support Sale of pellicles Photosensitive dry fi lm Glass fabric Electronic devices marketing and technical support Sale of photopolymer, printing-plate making systems Sale of photopolymer, printing-plate making systems Pharmaceuticals Medical devices, bioprocess products Medical devices Clinical trials for new drugs Bioprocess equipment and systems Sale of medical devices, medical systems Sale of medical devices, medical systems Hemodialyzers; sale of medical devices Sale of medical devices, medical systems Sale of medical devices, medical systems Sale of virus removal fi lters Sale of medical devices, medical systems Acute critical care devices and systems Sale of acute critical care devices in Japan Medical devices, bioprocess products Main products/business line Company 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.* Asahi Kasei E-materials Korea Inc.* AKM Semiconductor, Inc.* Asahi Kasei Microdevices Korea Corp. AKM Technology Corp. Asahi Kasei Technosystem Co., Ltd. Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.* Photosensitive dry fi lm Asahi Kasei Electronics Materials (Changshu) Co., Ltd.* Photosensitive dry fi lm Asahi Kasei Microdevices (Shanghai) Co., Ltd. Asahi Kasei Microdevices Taiwan Corp. Asahi Kasei EMD Taiwan Corp. Asahi Kasei Wah Lee Hi-Tech Corp.* Asahi-Schwebel (Taiwan) Co., Ltd.* Asahi Kasei Microdevices Europe SAS Asahi Photoproducts (Europe) SA/NV* Asahi Photoproducts (UK) Ltd.* Health Care Segment Asahi Kasei Pharma Corp.* Asahi Kasei Medical Co., Ltd.* Med-Tech Inc.* Asahi Kasei Pharma America Corp.* 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 (Taiwan) Co., Ltd.* Asahi Kasei Medical Europe GmbH* Asahi Kasei Bioprocess Europe SA/NV* Asahi Kasei Medical Trading Ltd. Sti.* ZOLL Medical Corporation* Asahi Kasei ZOLL Medical Corp.* Asahi Kasei Medical MT Corp. Others Asahi Research Center Co., Ltd.* Asahi Kasei Engineering Corp.* Asahi Kasei Trading Co., Ltd.* Asahi Kasei Commerce Co., Ltd.* Asahi Kasei Amidas Co., Ltd.* AJS Inc. Asahi Organic Chemicals Industry Co., Ltd. Asahi Kasei America, Inc.* Asahi Kasei Holdings US, Inc.* Crystal IS, Inc.* Asahi Kasei (China) Co., Ltd.* Asahi Kasei India Pvt. Ltd. ¥ Information and analysis ¥ Plant, equipment, process engineering ¥ Sale of Asahi Kasei products ¥ Sale of Asahi Kasei products ¥ Employment agency, consulting ¥ Computer software, IT systems ¥ Synthetic resin, fabricated plastic products US$ Business support services Holding company of ZOLL US$ Development of aluminum nitride substrates and UV LEDs US$ CNY Investment and business support services INR Business support services 1,000 400 98 94 80 800 5,000 0.1 100.0 100.0 100.0 100.0 100.0 49.0 30.1 100.0 1,723 ** 100.0 31.9** 100.0 100.0 275 100.0 45 * Consolidated subsidiary ** Including capital reserve 2014旭化成_efs_1002入稿校了.indd 97 2014旭化成_efs_1002入稿校了.indd 97 2014/10/20 8:45 2014/10/20 8:45 Asahi Kasei Report 2014 97 Company Information Corporate Profi le (as of March 31, 2014) Company Name Asahi Kasei Corporation Date of Establishment May 21, 1931 Paid-in Capital ¥103,389 million Employees 29,127 (consolidated) 1,205 (non-consolidated) Asahi Kasei Group Offi ces Asahi Kasei Corporation Core Operating Companies Tokyo Head Offi ce 1-105 Kanda Jinbocho, Chiyoda-ku Tokyo 101-8101 Japan Phone: +81-3-3296-3000 Fax: +81-3-3296-3161 Osaka Head Offi ce 3-3-23 Nakanoshima, Kita-ku Osaka 530-8205 Japan Phone: +81-6-7636-3111 Fax: +81-6-7636-3077 Asahi Kasei (China) Co., Ltd. 8/F, One ICC Shanghai International Commerce Centre No. 999 Huai Hai Zhong Road Shanghai 200031 China Phone: +86-21-6391-6111 Fax: +86-21-6391-6686 Beijing Offi ce 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 America, Inc. 800 Third Avenue, 30th Floor New York, NY 10022 USA Phone: +1-212-371-9900 Fax: +1-212-371-9050 Asahi Kasei India Pvt. Ltd. The Capital 801C, Plot No.C70, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051 India Phone: +91-22-6710-3962 98 Asahi Kasei Report 2014 Asahi Kasei Chemicals 1-105 Kanda Jinbocho, Chiyoda-ku Tokyo 101-8101 Japan Phone: +81-3-3296-3200 Asahi Kasei Fibers 3-3-23 Nakanoshima, Kita-ku Osaka 530-8205 Japan Phone: +81-6-7636-3500 Asahi Kasei Homes 1-24-1 Nishi-shinjuku, Shinjuku-ku Tokyo 160-8345 Japan Phone: +81-3-3344-7111 Asahi Kasei Construction Materials 1-105 Kanda Jinbocho, Chiyoda-ku Tokyo 101-8101 Japan Phone: +81-3-3296-3500 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 Pharma 1-105 Kanda Jinbocho, Chiyoda-ku Tokyo 101-8101 Japan Phone: +81-3-3296-3600 Asahi Kasei Medical 1-105 Kanda Jinbocho, Chiyoda-ku Tokyo 101-8101 Japan Phone: +81-3-3296-3750 ZOLL Medical Corporation 269 Mill Rd., Chelmsford, MA 01824-4105 USA Phone: +1-978-421-9655 2014旭化成_efs_1002入稿校了.indd 98 2014旭化成_efs_1002入稿校了.indd 98 2014/10/20 8:45 2014/10/20 8:45 Investors Information (As of March 31, 2014) Stock Listings Stock Code Tokyo 3407 Authorized Shares 4,000,000,000 Outstanding Shares 1,402,616,332 Transfer Agent Sumitomo Mitsui Trust Bank, Ltd. Largest Shareholders Nippon Life Insurance Co. Master Trust Bank of Japan, Ltd. (trust account) Japan Trustee Services Bank, Ltd. (trust account) Asahi Kasei Group Employee Stockholding Assn. Sumitomo Mitsui Banking Corp. Independent Auditors PricewaterhouseCoopers Aarata Mizuho Bank, Ltd. Number of Shareholders 97,906 Tokio Marine & Nichido Fire Insurance Co., Ltd. Sumitomo Life Insurance Co. National Mutual Insurance Federation of Agricultural Cooperatives Meiji Yasuda Life Insurance Co. * Percentage of equity ownership after exclusion of treasury stock. % of equity* 5.22 5.02 3.51 3.12 2.53 2.23 1.45 1.40 1.37 1.32 Distribution by Type of Shareholder Distribution by Number of Shares Held Japanese financial institutions 40.30% Foreign investors 33.88% Japanese individuals and groups 19.33% Other Japanese companies 3.99% Japanese securities companies 2.13% Treasury stock 0.37% Less than 1,000 0.28% 1,000–9,999 10.27% 10,000–99,999 6.14% 100,000 or more 83.31% Stock Chart Share price (¥) 1,000 750 500 250 0 Volume (thousand shares) 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 ’11/10 11 12 ’12/1 2 3 4 5 6 7 8 9 10 11 12 ’13/1 2 3 4 5 6 7 8 9 10 11 12 ’14/1 2 3 In this report, the TM symbol indicates a trademark or registered trademark of Asahi Kasei Corporation, affi liated companies, or third parties granting rights to Asahi Kasei Corporation or affi liated companies. Asahi Kasei Report 2014 99 2014旭化成_e表紙_1002入稿校了.indd 4 2014旭化成_e表紙_1002入稿校了.indd 4 2014/10/20 8:41 2014/10/20 8:41 A s a h i K a s e i R e p o r t 2 0 1 4 1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan www.asahi-kasei.co.jp/asahi/en Corporate Communications Tel: +81-3-3296-3008, Fax: +81-3-3296-3162 Printed in Japan 2014.10 2014旭化成_e表紙_1002入稿校了.indd 1 2014旭化成_e表紙_1002入稿校了.indd 1 2014/10/20 8:41 2014/10/20 8:41
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