Asahi Kasei Report 2016
Creating for Tomorrow
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
Editorial policy
For greater ease of understanding among our stakeholders, since fiscal
2014 we are integrating information regarding our business strategy and
financial 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 the Asahi
Kasei 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 configuration.
Period under review
The period under review is fiscal 2015 (April 2015 to March 2016). Some
qualitative information pertaining to April to September 2016 has also
been included.
Organizational scope
The scope of the report is Asahi Kasei Corp. and its consolidated subsidiar-
ies, except with respect to Responsible Care, in which case the scope is
operations in Japan that implement the Asahi Kasei Group’s Responsible
Care program. Asahi Kasei’s three operating segments are Material, Homes,
and Health Care. Unless otherwise specified, the titles and positions of
corporate officers and other personnel as shown in this report are current
as of October 2016.
Guidelines consulted
The Global Reporting Initiative’s Sustainability Reporting Guidelines G4,
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 figures depicting the future
do not imply a guarantee of actual outcome.
Contents
2 Report on Manipulation of Precast
Concrete Pile Installation Data by Subsidiary
Asahi Kasei Construction Materials
CSR
50 CSR
3 To Our Stakeholders
Management Overview
4 Directors
6 Feature:
New Medium-Term Management Initiative
“Cs for Tomorrow 2018”
12 History of Providing Solutions
for the Challenges of Society
14 Message from the President
22 Interview with the CFO
24 Interview with the Chairman of the Board
26 Interview with an Outside Director
28 Corporate Governance
Review of Operations
34 Financial and Non-Financial Highlights
36 At a Glance
38 Material
40 Homes
42 Health Care
44 Review of “For Tomorrow 2015”
46 Interview with the Executive Officer for R&D
52 CSR Fundamentals
• Responsible Care
• Respect for Employee Individuality
• Corporate Citizenship
60 Connecting Business Operations
with Contribution to Society
• BembergTM
• Condominium Redevelopment
• AEDs
Financial Section
68 Management’s Discussion and Analysis
74 Risk Analysis
76 Consolidated Financial Statements
Corporate Information
110 Major Subsidiaries and Affiliates
112 Company Information
113 Investors Information
Asahi Kasei Report 2016
1
Report on Manipulation of Precast Concrete Pile Installation Data
by Subsidiary Asahi Kasei Construction Materials
We deeply apologize that subsidiary Asahi Kasei Construction Materials Corp.
manipulated a portion of data for the installation of precast concrete piles. To ensure
against any similar situation occurring again, we have investigated the causes and
implemented preventative measures.
On January 8, 2016, an interim report was received from the independent commis-
sion which was established to investigate the matter. On February 9, 2016, our internal
fact-finding committee issued its interim report. Causes of data manipulation and
measures to prevent recurrence were identified as follows:
■ Causes of data manipulation
i) Circumstances conducive to occurrence of lack of data
ii) Absence of clear measures to deal with lack of data
iii) Poor recognition of importance of installation data among site agents, etc.
iv) Issues related to management of the pile business at Asahi Kasei Construction
Materials
■ Measures to prevent recurrence
i) Sound acquisition and handling of installation data
ii) Formulation of rules to deal with lack of data
iii) Establishment of a proper management system
iv) Performing training of site agents and other workers
v) Measures to deal with organizational, personnel, and awareness problems
at Asahi Kasei Construction Materials
Taking this matter with the utmost gravity, we are working to reinforce compliance
throughout all operations based on the “three actuals” of the actual place, the actual
thing, and the actual fact. On January 1, 2016, Corporate ESH & QA was reorganized
to place greater emphasis on quality assurance. Furthermore, Risk Management &
Compliance was newly established as a central corporate organ to aggregate informa-
tion related to risks and compliance.
The Asahi Kasei Group is committed to restoring the trust of society and our customers
by thoroughly applying measures to prevent recurrence.
2
Asahi Kasei Report 2016
To Our Stakeholders
Thank you for reading the Asahi Kasei Report 2016. In 2014 we
integrated the description of financial information, which had
been published in our Annual Report, with the description of
our CSR activities, which had been published in our CSR Report,
in a single Asahi Kasei Report for greater ease of understanding
by our various stakeholders. We hope that the Asahi Kasei
Report will enhance your understanding of the Asahi Kasei
Group’s management strategy, business operations, and
financial performance, as well as our contribution to the
sustainability of society.
From fiscal 2011 to 2015, the Asahi Kasei Group executed
its “For Tomorrow 2015” strategic management initiative to
expand world-leading businesses and create new value for
society. While expanding capacity for globally competitive
products, we further diversified and strengthened our
operations through large-scale acquisitions of ZOLL Medical
Corporation in the field of acute critical care and Polypore
International, LP in the field of battery separators.
In fiscal 2016 we began a new three-year strategic
management initiative “Cs for Tomorrow 2018.” The three-year
period is focused on building the base for the next phase,
creating a portfolio of high-profitability and high value-added
businesses in fiscal 2025. We aim to contribute to a “society
of clean environmental energy” and a “society of healthy/
comfortable longevity with peace of mind” by leveraging our
diverse business operations. To facilitate greater efficiency and
strategic allocation of management resources, in April 2016
we transitioned from a holding company configuration to an
operating holding company configuration through the merger
of three core operating companies with Asahi Kasei Corp., and
reconfigured our operations into the three business sectors of
Material, Homes, and Health Care.
Throughout these efforts, we will maintain proactive
communication with our stakeholders to ensure transparency
through appropriate information disclosure. I would like to
thank you for your continuous support.
September 2016
Hideki Kobori
President
Asahi Kasei Report 2016
3
Directors
1. Chairman & Director
Ichiro Itoh
2. President & Representative Director
Presidential Executive Officer
Hideki Kobori
After many years of experience in the fibers business, he held
several leadership positions including executive officer for planning,
accounting, and finance, and vice-presidential executive officer. He
has been Chairman & Director since April 2010. He possesses a wealth
of experience and a broad range of knowledge on the Asahi Kasei
Group’s businesses and corporate management.
After many years of experience in the electronics business, including
as President & Representative Director of Asahi Kasei Microdevices
Corp., he oversaw strategy, accounting, finance, and internal control.
He assumed the role of President of Asahi Kasei in April 2016. He pos-
sesses a wealth of experience and a broad range of knowledge on the
Asahi Kasei Group’s businesses and corporate management.
5. Director
Senior Executive Officer
Shuichi Sakamoto
6. Director
Lead Executive Officer
Nobuyuki Kakizawa
After many years of experience in the petrochemicals business, he
became General Manager of Corporate Strategy in November 2014
with responsibility for formulating and executing the management
strategy and business strategies of the Asahi Kasei Group. Since April
2016, he has overseen accounting, finance, and IT. He possesses a
wealth of experience and a broad range of knowledge on the Asahi
Kasei Group’s businesses and corporate management.
After many years of experience in the housing business, he held
several leadership positions including General Manager of Accounting
and Finance at Asahi Kasei Corp. and General Manager of General
Affairs at Asahi Kasei Homes Corp. He became General Manager of
General Affairs in April 2013 with responsibility for formulating and
executing measures for risk management and compliance of the Asahi
Kasei Group. He possesses a wealth of experience and a broad range
of knowledge on risk management and compliance.
9. Outside Director
Tsuneyoshi Tatsuoka
With his wealth of experience and broad range of insight into indus-
trial and economic policy, including as administrative vice-minister
of the Ministry of Economy, Trade and Industry, he fulfills his role as
Outside Director in deciding on important matters of the Asahi Kasei
Group as well as overseeing business execution.
4
9
8
7
1
2
3
4
5
6
Asahi Kasei Report 2016 3. Representative Director
Vice-Presidential Executive Officer
Yuji Kobayashi
4. Director
Primary Executive Officer
Masafumi Nakao
After many years of experience in the petrochemicals business, he
became President & Representative Director of Asahi Kasei Chemicals
Corp. From April 2014, he oversaw the Chemicals & Fibers business
sector. He possesses a wealth of experience and a broad range
of knowledge on business in the Material sector and corporate
management.
After many years of experience in R&D and new business development
in the electronics business, he held several leadership roles including
General Manager of the R&D Center and executive officer for quality
assurance at Asahi Kasei Microdevices Corp. Since April 2012, he has
overseen R&D of the Asahi Kasei Group. He possesses a wealth of
experience and a broad range of knowledge on R&D.
7. Outside Director
Norio Ichino
8. Outside Director
Masumi Shiraishi
With his wealth of business management experience and broad range
of insight as a corporate executive, including as President of Tokyo Gas
Co., Ltd., he fulfills his role as Outside Director in deciding on important
matters of the Asahi Kasei Group as well as overseeing business
execution.
With her wealth of experience and broad range of insight into eco-
nomics and society as a university professor at Kansai University, she
fulfills her role as Outside Director in deciding on important matters of
the Asahi Kasei Group as well as overseeing business execution.
Asahi Kasei Report 2016
5
Feature: New Medium-Term Management Initiative
Cs for Tomorrow 2
Building the base for the next phase with various Cs
There are five “Cs” that represent important aspects of Cs for Tomorrow 2018 (CT2018) as we advance toward our objectives. The
first “C” is from our Group Slogan, Creating for Tomorrow. The second “C” is for Connections. We aim to build new connections in
various aspects (external, internal, geography, technology) to facilitate the creation of new markets. The third to fifth “Cs” are for
Compliance, Communication, and Challenge—key facets of our endeavor to restore trust and drive further growth.
Group slogan
Creating for Tomorrow
Create new markets through connections
Restore trust based on three Cs
New stage of growth
External
(cid:127) CVC*, joint R&D
(cid:127) M&A
(cid:127) Alliances
Connect
Internal
(cid:127) Group-wide
(cid:127) People and
businesses
Technology
(cid:127) Technology and business combinations
Geography
(cid:127) Accelerating globalization
* CVC = Corporate Venture Capital
Compliance
Thorough compliance based
on the “three actuals”
Communication
Open communication that fosters mutual
understanding and trust
Challenge
Relishing new challenges to advance
and evolve
6
Asahi Kasei Report 2016
for Tomorrow 2018
Throughout the history of the Asahi Kasei Group, we have continuously realigned our business portfolio
to meet the changing needs of the times, and proactively branched into new fields to create new value for society.
Since 2003, under the configuration of Asahi Kasei Corp. as a holding company, three medium-term management
initiatives successfully steered us towards specific milestones. Ishin-05 (FY2003–2005) promoted “selective diversification”
and “creation of cash flow,” and Growth Action—2010 (FY2006–2010) focused on “business portfolio realignment
for expansion and growth” and “strategic investment.” Under the previous initiative For Tomorrow 2015 (FY2011–2015)
with its focus on “expansion of world-leading businesses” and “creation of new value for society,”
we achieved our highest operating income ever in fiscal 2015.
CT2018 (FY2016–2018) is focused on building the base for the next phase. At the beginning of fiscal 2016,
Asahi Kasei transitioned to an operating holding company configuration, with realigned business sectors.
The new medium-term management initiative is directed toward creating a portfolio of high value-added businesses
with high profitability in fiscal 2025.
Providing solutions to two important challenges faced
by society with our diversified business
In the midst of rapid changes in the economic environment and social structure, we are
working to contribute to the realization of a society of clean environmental energy and a
society of healthy/comfortable longevity with peace of mind through our diverse products,
technologies, and services.
The
environment
Shift to sustainable society;
tightening environmental
regulations
Healthcare
Expansion of
global healthcare markets
Management
Greater importance of
transparency and CSR
IT
Spread of IoT and
other IT advances
Society of
clean environmental energy
Society of healthy/comfortable
longevity with peace of mind
Energy
Increasing energy demand;
diversification of supply
Demographic
change
Increasing world population;
aging population in
developed countries
Social
economy
Increasing globalization;
growing geopolitical risks
Food
Growing food demand
Asahi Kasei Report 2016
7
Feature: New Medium-Term Management Initiative
Financial targets
In fiscal 2015, we achieved net sales of ¥1,940.9 billion and operating income of ¥165.2 billion, a new record high
in operating income for the third consecutive year. Our goal in fiscal 2025 is to achieve net sales of ¥3 trillion and
operating income of ¥280 billion. The three year period of CT2018 is positioned as a time for building the base for
the next phase by making connections among our diverse businesses and diverse human resources, with fiscal
2018 targets of ¥2.2 trillion in net sales and ¥180 billion in operating income.
Net sales
Operating
income
¥3 trillion
¥280 billion
(¥ billion)
300
Net sales and operating income
Net sales (left scale)
Operating income (right scale)
Net sales
Operating
income
¥2.2 trillion
¥180 billion
(¥ billion)
3,000
2,500
2,000
1,500
1,000
500
0
'10
'11
'12
'13
'14
'15
'16
'17
'18
'25
* Formulated assuming exchange rates of ¥110/$ and ¥120/€
Main performance metrics
(¥ billion, except where noted)
Net sales
Operating income
Operating margin
Net income attributable
to owners of the parent
EBITDA1
Net income per share (¥)
Total return ratio
Net income per shareholders’
equity (ROE)
Net income per shareholders’
equity and interest-bearing
debt (ROIC)
D/E ratio
Exchange rate (¥/$)
FY2003
1,253.5
FY2010
1,555.9
FY2015
1,940.9
FY2015–2018
(annual growth)
FY2018
(target)
4.3%
2,200.0
60.9
4.9%
27.7
125.3
19.6
30.6%
6.4%
5.0%
0.62
113
122.9
7.9%
60.3
207.8
43.1
25.5%
9.3%
7.9%
0.38
86
165.2
8.5%
91.8
274.8
65.7
30.4%
8.6%
7.1%
0.43
120
180.0
8.2%
110.0
300.0
78.0
35.0%
9.0%
7.0%
0.50
110
1 Operating income, depreciation, and amortization (tangible, intangible, and goodwill).
FY2016–2018 investment plan: ¥700 billion
8
Asahi Kasei Report 2016
250
200
150
100
50
0
(FY)
FY2025
(outlook)
3,000.0
280.0
9.3%
10.0%
8.0%
0.50
110
Basic strategy of Cs for Tomorrow 2018
1
2
Basic
strategy
1. Pursuit of growth
and profitability
2. Creation of new
businesses
3. Acceleration of
globalization
CT2018 is focused on the three basic strategies of “pursuit of
growth and profitability,” “creation of new businesses,” and
“acceleration of globalization,” which are implemented across
the Asahi Kasei Group. The three sectors of Material, Homes,
and Health Care will each expand operations by leveraging
their respective strengths, while the Asahi Kasei Group as a
whole will solidify the base for further growth by leveraging
our combined strength.
Pursuit of growth and profitability
Each individual business works to generate greater cash flow by raising competitiveness. Within each sector, we will
create new added value through combinations and integration among the different businesses. For the creation of
new businesses, management resources are connected across the different sectors.
Each business sector also has a specific role to play. The Material sector aims for enhanced profitability through
connections among businesses within the sector,
optimization of the business portfolio, and height-
ened competitiveness. The Homes sector focuses
on continuous stable growth by strengthening
established businesses with comprehensive prod-
ucts, construction, and services that meet the needs
of society, while expanding the value chain through
business development. The Health Care sector aims
for high growth by reinforcing its global business
platform while strengthening the profitability of
domestic businesses.
Creation of new businesses
The greatest strength of Asahi Kasei lies in our
combination of various technologies, cultivated
throughout our history of diversification, that
enable the creation of new value for society. We are
enhancing our ability to create new businesses by
connecting our technologies, business models, and
human resources internally, as well as by connect-
ing externally through joint R&D, business alliances,
corporate venture capital (CVC), and M&A.
Material
Enhanced
profitability
Homes
Continuous stable
growth
Health Care
High growth
Each business: generate cash flow by raising competitiveness
Within each sector: create added value through combinations and integration
Group-wide: create new businesses by connecting resources
Various
technologies
(cid:127) Materials, devices
(cid:127) Production technology
(cid:127) Systems
(cid:127) Analysis, simulation etc.
Strengths of
Asahi Kasei
Diverse business
operations
(cid:127) Fibers
(cid:127) Chemicals
(cid:127) Electronics
(cid:127) Homes
(cid:127) Construction Materials
(cid:127) Health Care
(cid:127) Critical Care
Open innovation
Joint R&D
Technology
Business models
Connect
M&A
CVC
Diverse human resources
Asahi Kasei Report 2016
9
Feature: New Medium-Term Management Initiative
Acceleration of globalization
3 Under the previous medium-term management initiative For Tomorrow 2015, we newly constructed or expanded
several production facilities for globally competitive products in Japan and overseas. From fiscal 2016 onward,
those capital investments will bear fruit by contributing to earnings. We are also advancing with clearer strategies
in each region for our businesses to develop more efficiently and profitably on a global scale.
Europe
mature markets; origin of standards and regulations
(cid:127) Enhance marketing functions in
automotive/healthcare-related businesses
North America
continuing growth; origin of innovation
(cid:127) Expand automotive/healthcare-related businesses
(cid:127) Obtain leading-edge technology by utilizing CVC
Globalization
(cid:127) Develop business through M&A;
create new business models
(cid:127) Adapt to new trade arrangements such as TPP
Asia
transitioning from manufacturing base to growth market
(cid:127) Raise competitiveness of manufacturing
(cid:127) Serve markets in China and ASEAN
Japan
continuing growth; origin of innovation
(cid:127) Lead R&D and create new businesses
(cid:127) Heighten technology at “mother factories”
Financial and capital strategy
Execute strategy to raise corporate value while performing return to shareholders.
Operating cash flow
Total investment
Target for total return ratio
Funding policy
We expect that a total of
¥600–700 billion in operating
cash flow will be generated
over the 3-year period
by enhancing the com-
petitiveness of established
businesses and creating new
added value in each sector.
We plan to invest a total of
some ¥700 billion over the
3-year period to proactively
advance M&A and other
new investment in addition
to investment to maintain
and expand established
businesses.
We will flexibly perform share
buybacks in addition to stable
and continuous dividend
increases with a target for
total return ratio of 35% in
fiscal 2018.
In principal we will raise funds
through borrowings while
maintaining a D/E ratio of
around 0.5.
10
Asahi Kasei Report 2016
Future path for each sector toward fiscal 2025
In our vision of creating a portfolio of high-profitability and high value-added businesses in fiscal 2025, the three years
under the current management initiative are positioned as a time to build the base for the next phase. Each sector’s
path forward is shown below.
Material sector
• Seek greater profitability by
expanding in performance products
• Solidify No. 1 position of battery
separator business
• Use combined strength to
cultivate new markets for materials
Homes sector
• Secure stable earnings by raising
market share for established
businesses
• Advance new businesses focused
on medium-rise homes, seniors,
and overseas markets
• Create distinctive added value
through connections with other
sectors in Asahi Kasei
Health Care sector
• Increase overseas sales;
operating income to reach 1/3 of
Asahi Kasei Group total
• Pharmaceuticals:
RecomodulinTM as the growth
driver for global expansion
• Medical devices:
grow by further utilizing and
strengthening global platform
(¥ billion)
2,000
1,500
1,000
500
0
(¥ billion)
1,000
750
500
250
0
(¥ billion)
800
600
400
200
0
Membranes,
coating materials,
etc.
Automotive,
battery-related,
healthcare
Performance
products
Earnings
base
'15
'18
'25
(FY)
Overseas, seniors
Const. Mat.
Real estate,
remodeling
Order-built
'15
'18
'25
(FY)
Overseas
Japan
'15
'18
'25
(FY)
Asahi Kasei Report 2016
11
History of Providing Solutions for the Challenges of Society
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.
Shitagau Noguchi
From 1922
Shitagau Noguchi, the founder of Asahi
Kasei, succeeded in Japan’s first 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 fiber,
part of a diverse range of business opera-
tions 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 polysty-
rene, and in 1959 entered the synthetic
fiber business. These were followed by
the three new businesses of nylon fiber,
synthetic rubber, and construction mate-
rials. 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 improve-
ments in the quality of life during Japan’s
high-growth period.
Part of the ammonia plant completed in 1923
(Nobeoka, Miyazaki, Japan)
Saran Wrap™ launched in Japan in 1960
The Bemberg™ plant which started operation in
1931 (Nobeoka, Miyazaki, Japan)
Naphtha cracker (Kurashiki, Okayama, Japan)
Portfolio transformation
Chemicals
Fiscal 1940
Net sales
¥56 million
Foods
Fibers
Fiscal 1960
Net sales
¥44.9 billion
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-fiber membrane
artificial kidneys. Our entry into the elec-
tronics 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 diversified.
The first Hebel Haus™ (Kamata model home park)
Hollow-fiber membrane
artificial kidneys
LSIs
Others
Fibers
Foods and
Fermentation Chemistry
Construction
Materials
Homes
Fiscal 1980
Net sales
¥800.1 billion
Chemicals
Establishing the basis
for modern life
Sufficiency of daily necessities, improvement in quality of homes,
development of public infrastructure
• Development of chemical industry and
modern agriculture
• Interbellum economic downturn and
World War II
• Post-war recovery and
modernization of industry
• Period of high economic growth
• Stable economic growth
• Economic bubble
12
Asahi Kasei Report 2016
From 2010
Under the “For Tomorrow 2015” manage-
ment initiative which began in 2011, we
proactively expanded our operations
through major acquisitions. In 2012 we
entered the acute critical care business
by acquiring ZOLL Medical Corporation,
and in 2015 we acquired battery separa-
tor manufacturer Polypore International,
LP. In 2016 we launched a new three-year
management initiative “Cs for Tomorrow
2018” focused on expanding operations
by heightening the combined strength of
the Asahi Kasei Group.
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 opera-
tions, divesting our food business and
closing some fiber businesses, achieving
selective diversification. From 2000
onward, we also established many over-
seas operations, mainly in Asia, laying the
foundation for global management.
The LifeVest™ wearable defibrillator
Pharmaceutical products after the Toyo Jozo merger
We are Creating for
Tomorrow, providing
new value to society
by enabling living in
health and comfort
and harmony with the
natural environment
1922–
2015
Celgard™ Li-ion battery separator of Polypore
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.,
a major manufacturing base for photosensitive
dry film
Others
Fibers
Health Care
Electronics
Construction
Materials
Fiscal 2000
Net sales
¥1,269.4 billion
Critical Care
Fibers
Others
Health Care
Electronics
Construction
Materials
Fiscal 2015
Net sales
¥1,940.9 billion
Homes
Chemicals
Homes
Chemicals
Increased comfort and
convenience
• Two decades of meager growth
after collapse of bubble
• Effect of global economic crisis
Heightened environmental consciousness
• Changing values after the Great East Japan Earthquake
• Emergence from period of slow economic growth
Asahi Kasei Report 2016
13
Message from the President
Taking bold steps forward
toward our next milestones
under “Cs for Tomorrow 2018”
We enjoyed strong results in fiscal 2015,
setting a new record high for operating
income, owing to the success of our
strategic investments and M&As executed
over the past years. We are further
strengthening our base of operations to
create a portfolio of high-profitability and
high value-added businesses in fiscal 2025.
Hideki Kobori
President
14
Asahi Kasei Report 2016
Back to basics as we continue to forge ahead
When I became President of Asahi Kasei this April, I reflected on my early experience. My first job
when I joined the company was as a salesperson for an engineering resin that we had just commer-
cialized, and then I was involved in ramping up our LSI business. When a business is young, you are
always cultivating new customers and developing new products; there are constant challenges. Ever
since then, I always bear in mind the importance of being alert to forthcoming changes and building
valuable relationships with customers and other parties. My sense is that this is what the Asahi Kasei
Group has always done to successfully diversify, and what we must continue to do now more than
ever as we forge ahead.
Last fall, regrettably, we disclosed the occurrence of data irregularities regarding the installa-
tion of precast concrete piles by subsidiary Asahi Kasei Construction Materials Corp. We sincerely
apologize to our shareholders, investors, and other stakeholders who placed their trust in us. We
are focused on achieving thorough compliance based on the “three actuals” of the actual place, the
actual thing, and the actual fact as we work to restore the trust of all stakeholders.
Connecting diverse businesses and human resources
For over nine decades since our founding in 1922, we have continued to proactively diversify and
adapt the Asahi Kasei Group’s operating portfolio in accordance with changes in the operating
environment, in the economy, and in society at large. With businesses that increasingly span the
globe, it becomes difficult to steer a clear path in a world of constant change. It is especially under
such circumstances that we must leverage our diverse businesses and human resources to build a
portfolio of high-profitability and high value-added businesses to ensure our stable and sustainable
development for the future.
In accordance with our Group Mission of contributing to life and living for people around the world,
we will create unmatched value in each field with innovative technologies and products that will be
appreciated by our customers as we strive for further global reach. We are working to build the base
for the next phase through our new medium-term management initiative starting from fiscal 2016.
Asahi Kasei Report 2016
15
Message from the President
New record-high operating income in fiscal 2015 with past efforts bearing fruit
Under the previous medium-term management initiative “For Tomorrow 2015” which ended in fiscal
2015, the Asahi Kasei Group targeted net sales of ¥2 trillion and operating income of ¥160 billion. A
number of actions were executed in accordance with the two strategic pillars of “expansion of world-
leading businesses” and “creation of new value for society,” including some ¥1 trillion of strategic
investment for growth.
In the expansion of world-leading businesses, we increased production capacity for highly
competitive products including S-SBR for fuel-efficient tires, spunbond nonwovens, and Roica™
spandex. In the creation of new value for society, we acquired ZOLL Medical Corporation, a leading
US manufacturer of acute critical care devices and systems, marking our full-scale entry into this field.
We also acquired Polypore International, LP to reinforce our battery separator business by adding
new product lines. Furthermore, we acquired the US-based venture company Crystal IS, Inc. with
which we jointly developed UVC LEDs, and began commercial production for disinfection applica-
tions. ZOLL’s operations grew remarkably during this period, yielding positive consolidated operating
income even after amortization of goodwill, etc. With Polypore, the post-merger integration process
is making good progress, and we are currently advancing the development of new products leverag-
ing synergies between our two companies.
In domestic petrochemicals operations, our naphtha cracker in Mizushima, which began
operation in 1972, was unified with the adjacent naphtha cracker of Mitsubishi Chemical Corp. Joint
operation began in April 2016, and we improved the earnings structure of derivative products.
Those efforts bore fruit in fiscal 2015, with ¥1,940.9 billion in consolidated net sales and ¥165.2
billion in operating income. Although net sales were slightly below the target, operating income
reached a new record high for the third year in a row. Over the five-year period of the initiative, net
sales grew by some ¥400 billion and operating income grew by some ¥40 billion. With solid growth
in health care operations, we attained a more balanced structure among our three business sectors
of Material, Homes, and Health Care.
Connection as the key element of “Cs for Tomorrow 2018”
In April 2016, we launched a new medium-term management initiative, “Cs for Tomorrow 2018,”
targeting consolidated net sales of ¥2.2 trillion and operating income of ¥180 billion in fiscal 2018.
We are fostering innovation through our broad spectrum of businesses focused on contributing to
the realization of a “society of clean environmental energy” and a “society of healthy/comfortable
longevity with peace of mind.”
Our aim is to create a portfolio of high-profitability and high value-added businesses over the
next decade. Basic strategies under the new initiative ending in fiscal 2018 are “pursuit of growth and
profitability,” “creation of new businesses,” and “acceleration of globalization.” We will build the base
for the next phase by enhancing connections among our diverse businesses and diverse human
resources.
“Connection,” an important aspect of the new initiative, is a key concept in the electronics
industry, where I worked for a long time. We will look to build new connections in many ways under
the new initiative, both externally through joint R&D, M&A, and business alliances, and internally
among our different businesses, different technologies, and different regions of operation. I believe
such connections will open up new possibilities for further growth.
16
Asahi Kasei Report 2016
Transformation to an operating holding company
On April 1, 2016, Asahi Kasei Corp. became an operating holding company through the absorption
of three of its core operating companies, Asahi Kasei Fibers Corp., Asahi Kasei Chemicals Corp., and
Asahi Kasei E-materials Corp. The Asahi Kasei Group now operates in the three business sectors of
Material, Homes, and Health Care.
The holding company configuration adopted in October 2003 enabled each of our businesses
to swiftly adapt to changes in their respective operating environments, with greater clarity of
responsibility and authority for business management. The greater autonomy and independence of
each business led to business expansion and increased profits. Comparing financial results of fiscal
2015 with those of fiscal 2003, net sales increased by a factor of 1.5 and operating income tripled. A
stronger financial constitution was obtained with the operating margin rising from 4.9% to 8.5% and
ROE rising from 6.4% to 8.6%. And yet, some downsides were also recognized; interactions among
different businesses in terms of human resources, technology, and R&D had diminished, and some
administrative functions overlapped.
Under our new configuration we are
aiming even higher, targeting net sales of ¥3
trillion and operating income of ¥280 billion
in fiscal 2025. Achieving this will require more
interaction among personnel and technolo-
gies to create synergies among different busi-
nesses and unleash the collective strength
of the Asahi Kasei Group. Especially in the
Material sector, we are placing greater strate-
gic focus on automotive-related businesses.
Previously, each business unit approached the
same customers independently. Now we will
work together as a group to formulate com-
mon strategies for marketing and technology
tailored to each major customer and each
region, enabling one-stop service for greater
efficiency.
Emphasizing the creation of new businesses to enhance growth
We essentially achieved our targets under the previous initiative and set the stage for further growth
under the new initiative. One objective of the new initiative is to reinforce in-house R&D for new
business creation. We are now working to enhance connections among various technologies and
businesses, and to further leverage M&A, joint R&D, and corporate venture capital (CVC) to facilitate
the creation of businesses. Throughout the history of Asahi Kasei, we have repeatedly transformed
our business portfolio and provided new value to society to meet the changing needs of the times.
In each case, this was made possible through our strengths in R&D and our willingness to take on
challenges. Having realigned our corporate structure in April 2016 to further enhance collaboration
among different businesses, we will be better able to discern business potential as we forge ahead
with the creation of new businesses.
Asahi Kasei Report 2016
17
Message from the President
Expansion in the automotive field with coordinated marketing across
different business units
The automotive industry is changing dramatically with the motorization of emerging countries,
the ascendance of eco cars such as hybrid, electric, and fuel-cell vehicles, and the evolution of
automated driving technologies based on IT. This area is now the focus of intense interest among
material manufacturers offering various leading-edge materials. Though our Material sector has a
rich range of products for the automotive industry, our different business units have been interacting
separately with the same customers. This inhibited our ability to gain a complete picture of customer
needs and market information. Our new configuration will make our business activities more efficient
and effective as an integrated whole, with a comprehensive approach to marketing and technology
development for key customers. Our newly established Automotive Marketing Department will
coordinate these efforts throughout the Material sector, ensuring swift and effective action. Particular
emphasis will be placed on achieving growth in Europe, where many environmental and technology
trends originate. Asahi Kasei Europe GmbH, newly established in Dusseldorf, Germany, will serve as a
base for marketing in Europe.
Reinforcing our world-leading position
Our August 2015 acquisition of Polypore reinforced our world-leading position in the field of
battery separators. By combining the Celgard™ dry-process products with our Hipore™ wet-process
products, we have significantly expanded our lithium-ion battery (LIB) separator product portfolio,
enabling us to meet a wider variety of customer needs. Daramic™ lead-acid battery separator also has
excellent growth potential with the motorization of emerging countries and the increasing adoption
of idling stop-start systems around the world.
The Asahi Kasei Group’s total LIB separator capacity, combining both wet and dry processes, is
now 550 million m2/year. We are currently adding a new production line at the Hipore™ manufactur-
ing plant located in Moriyama, Shiga, Japan,
that will raise this to 610 million m2/year in
2018. To keep pace with forecasted growth
in demand, we plan to continue to raise our
total LIB separator capacity to 1,100 million
m2/year by 2020.
We will continue to leverage our compre-
hensive battery separator lineup of Hipore™,
Celgard™, and Daramic™, heightening syner-
gies among our manufacturing technologies,
processing technologies, and marketing
functions.
18
Asahi Kasei Report 2016
¥700 billion of strategic investment budgeted over three years
While we performed some ¥1 trillion of strategic investment over the five-year period of the previous
initiative, including investment to expand existing businesses and large-scale M&A, we plan to
allocate ¥700 billion to strategic investment during the three-year period of the new initiative. While
over ¥100 billion was allocated to existing businesses each year during the previous initiative, in the
new initiative we plan to divide strategic investment roughly evenly between measures to expand
existing businesses and non-linear growth measures such as M&A. Investment to expand existing
businesses will be focused on competitive products such as performance polymers and compounds
for automotive applications, fiber materials enjoying strong demand, and especially LIB separator. LIB
separator for consumer electronics applications continues to perform well, and that for automotive
applications is forecasted to grow significantly. As for M&A, we will focus on acquiring technologies
that are at an early stage of development. We would like to have as many growth drivers as possible.
We will also look at M&A as a way to enhance our services and customer support systems, enabling
us to extend business models for fuller service provision.
Strategic path toward our vision for the future in each sector
We are advancing strategic actions toward the achievement of our vision for each business sector in
fiscal 2025.
(¥ billion)
Net sales (a)
Material
Operating income (b)
Operating margin (b/a)
Net sales (a)
Homes
Operating income (b)
FY2015
1,004.4
79.2
7.9%
632.4
71.0
Operating margin (b/a)
11.2%
FY15–18 increase,
growth rate
FY2018
target
FY18–25 increase,
growth rate
FY2025
outlook
1,250.0
100.0
8.0%
700.0
70.0
10.0%
+0.1 pt
(1.0)
1,650.0
140.0
8.5%
1,000.0
+0.5 pt
+30.0
100.0
10.0%
Net sales (a)
285.4
+9.0%/year
370.0
+7.2%/year
600.0
Health Care
Operating income (b)
36.2
Operating margin (b/a)
12.7%
50.0
13.5%
80.0
13.3%
Note: Totals of net sales and operating income targets and outlooks shown here do not match those shown on page 8.
Material sector
There are three main elements of our policy for future business expansion toward fiscal 2025 in the
Material sector. The first is to enhance profitability by expanding operations in performance products. The
second is to reinforce the world-leading position of our battery separator business. And the third is to use
our combined strength to cultivate new markets for materials. In line with these, the three-year period
of the new initiative will focus on enhancing profitability by strengthening established businesses while
advancing measures for the future that span across the sector. Advancing toward fiscal 2025, we will
solidify the earnings base of our petrochemicals and consumables businesses focused on the domestic
Japanese market as well as that of our steadily growing fibers business, while expanding businesses with
automotive materials, battery materials, and new materials for healthcare and hygiene applications.
Asahi Kasei Report 2016
19
Message from the President
Homes sector
In addition to securing stable earnings by raising market share for established businesses in the Homes
sector toward fiscal 2025, we will advance new businesses focused on medium-rise homes, seniors,
and overseas markets, and work to create distinctive added value through connections with our other
business sectors. The three-year period of the new initiative will focus on securing stable earnings in
our main businesses and seeking stable growth by expanding in real estate, remodeling, and insula-
tion materials. We are also working to expand through a capital alliance with a construction company
and through joint projects with companies in Taiwan.
Health Care sector
Toward fiscal 2025, this sector will work to expand its overseas sales and raise its operating income
to one-third of the consolidated total. Pharmaceuticals operations will globally expand with
Recomodulin™ anticoagulant as a growth driver. Medical devices operations will grow further by utiliz-
ing and reinforcing ZOLL’s global operating platform. While reinforcing the global platform during the
three-year period of the new initiative, we will further expand in overseas markets, especially the US
where higher growth is forecasted, by accumulating information on early-stage R&D utilizing CVC, etc.
Transparent, fair, and timely decision-making
We aim to provide solutions to society by creating synergies among our various businesses, and
to achieve sustainable growth and enhance corporate value over the medium to long term. As a
part of this effort, we believe that it is important to have a corporate governance framework that
ensures transparent, fair, and timely decisions. In fiscal 2015, we established a Nomination Advisory
Committee and a Remuneration Advisory Committee to obtain the active participation of Outside
Directors in the process of considering the optimal makeup and size of the Board of Directors,
policies for nominating candidates and the remuneration system for Directors and Corporate Auditors,
and system to evaluate Directors for performance-based remuneration, etc. We also began analyzing,
evaluating, and disclosing results of the effectiveness of the Board of Directors, and established
a system to monitor its effectiveness on a regular basis. We will continue to review our system of
corporate governance to ensure that it remains optimal for highly transparent management.
Enhancing corporate value by providing solutions to society through our
business activities
With a clear understanding of the effects of our operations on the global environment and
local communities, our efforts and actions related to CSR are based on four CSR Fundamentals:
Compliance, Responsible Care, Corporate Citizenship, and Respect for Employee Individuality. We
consider CSR in Action, on the other hand, to be the creation of value for society by providing solu-
tions through our business operations to fulfill our Group Mission of contributing to life and living for
people around the world, ultimately resulting in increased corporate value for all of our stakeholders.
We see CSR Fundamentals as prerequisite for the sustainable development of our corporation as
a trustworthy member of society, and although we will continue to realign our business portfolio in
line with evolving needs of the times, we will retain the four CSR Fundamentals as an unchanging
core. Meanwhile, CSR in Action is advanced by providing solutions to society through our business
operations in accordance with the business strategies of our medium-term management initiative.
With the basic strategies “pursuit of growth and profitability,” “creation of new businesses,” and
“acceleration of globalization,” we will create new value for society.
20
Asahi Kasei Report 2016
Creating for Tomorrow
The
The
employee
employee
Employee
fulfillment
The
The
community
community
Community
outreach
The
The
environment
environment
Environmental
protection
The
The
customer
customer
Customer
satisfaction
Society of clean
environmental energy
Pursuit of
Pursuit of
growth and
growth and
profitability
profitability
Sustainable Increase
in Corporate Value
The
The
supplier
supplier
Fair business
dealings
The local
The local
economy
economy
Local economic
participation
The
The
shareholder
shareholder
Shareholder
returns
Society of healthy/comfortable
longevity with peace of mind
Business
operations
Creation of
Creation of
new businesses
new businesses
Acceleration of
Acceleration of
globalization
globalization
CSR Fundamentals
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.
CSR in Action
We believe that CSR is achieved by raising corporate
value for our various stakeholders through our
business operations in accordance with our Group
Mission of contributing to life and living for people
around the world.
Structure and organization for CSR
In order to promote separate important activities
regarding CSR more efficiently and decisively, we
have five committees under the direct supervision of
the Asahi Kasei President as follows:
“Cs for Tomorrow 2018”
strategic management initiative
CSR in Action
Asahi Kasei
President
CSR Fundamentals
Compliance, Responsible Care, Corporate Citizenship,
Respect for Employee Individuality
Group Mission
Contributing to life and living for people around the world
Note: In September 2016, the Corporate Ethics Committee and Risk Management Committee were integrated
into a Risk Management & Compliance Committee chaired by the Asahi Kasei President.
Corporate Ethics Committee
• Preparation of Basic Policy and Code of
Conduct for corporate ethics
• Advancement of ethics education and
operation of compliance hotline
Responsible Care Committee
• Deliberation of plans and results in regard
to environmental protection, product
safety, operational safety, etc.
Global Environment Committee
• Deliberation and adoption of group-wide
measures to counter global warming
Risk Management Committee
• Formulation of plans and measures to
respond to actual or potential crises
Community Fellowship Committee
• Formulation of policy, plans, and courses
of action in regard to community
fellowship activities
(as of April 1, 2016)
Human resource development and sustainable growth
The Asahi Kasei Group will celebrate its 100th anniversary in 2022. Our founder, Shitagau Noguchi,
began ammonia synthesis in Nobeoka, Miyazaki, Japan, with an ambition of helping to solve global
food supply issues and eliminate strife from the world. Since then, Asahi Kasei has always worked to
solve challenges faced by society through our business activities. The major milestone of our 100th
anniversary is a reminder that we need to be prepared for further changes in the coming century.
It is crucial to develop human resources who will be ready for this. While valuing our personnel, we
will reallocate people to areas of focus, systematically rotate them, and develop talent as our busi-
ness portfolio evolves. It is also important to maintain an environment that fosters personnel who
demonstrate outstanding specialist skill. We need to make sure we are not only rewarding people
based on management ability, but also valuing specialists who excel in other areas. By building new
connections among our diverse businesses and diverse personnel, we will further strengthen the
Asahi Kasei Group for the future.
Asahi Kasei Report 2016
21
Interview with the CFO
Executing strategies aimed
at future growth to increase
our corporate value; promoting
proactive investments for growth
and a robust capital policy
Shuichi Sakamoto
Director
Senior Executive Officer
Q What is your basic financial strategy under “Cs for Tomorrow 2018”?
A We are focused on consistent generation of cash flow, with an appropriate balance between
investment for growth and shareholder returns.
The Asahi Kasei Group aims to consistently expand cash flow
in two basic ways. One is by enhancing profitability through
greater cost competitiveness, enhanced product performance,
and business structure improvement, and the other is by
improving capital efficiency through intragroup financing and
appropriate control of inventory levels. To obtain stable and
low-cost financing, we employ various fund-raising methods
such as borrowing from banks, issuing bonds, and issuing
commercial paper flexibly and dynamically in accordance with
our financial circumstances.
Under our “Cs for Tomorrow 2018” (CT2018) management
initiative, we will generate cash flow not only by implementing
three basic strategies of “pursuit of growth and profitability,”
“creation of new businesses,” and “acceleration of globaliza-
tion,” and by further raising competitiveness of established
businesses, but also by creating new added value in each
sector. Cash flow generated through these efforts provides
further resources to invest for growth as well as to return to
shareholders. We are careful to maintain an appropriate bal-
ance between the two.
We expect the total operating cash flow during the three-
year period of CT2018 to be ¥600–700 billion, which is to be
assigned for strategic investments and shareholder returns. The
total amount of investment for growth will be ¥700 billion for
three years, and we will strive to continuously increase share-
holder returns with a total return ratio of 35% in fiscal 2018.
Primary financial metrics
Dividends per share
Payout ratio
Net income per share (EPS)
Net income per total assets (ROA)
Net income per shareholders’ equity (ROE)
Net income per shareholders’ equity and
interest-bearing debt (ROIC)
D/E ratio
FY2011
FY2012
FY2013
FY2014
FY2015
¥14
35.1%
¥39.89
3.9%
8.1%
6.9%
0.26
¥14
36.4%
¥38.43
3.3%
7.1%
5.7%
0.47
¥17
23.5%
¥72.48
5.5%
11.7%
7.7%
0.33
¥19
25.1%
¥75.62
5.4%
10.6%
7.5%
0.25
¥20
30.4%
¥65.69
4.3%
8.6%
7.1%
0.43
22
Asahi Kasei Report 2016
Q What is the thinking behind your “Cs for Tomorrow 2018” financial targets?
A
The 3-year period to fiscal 2018 is a time to build a solid foundation toward our vision of
becoming a collection of high-profitability, and high value-added businesses in fiscal 2025.
The targets for the previous medium-term management
initiative were ¥2 trillion in net sales, ¥160 billion in operating
income, return on equity (ROE) of at least 10%, and return on
invested capital (ROIC) of at least 7%, which were achieved gen-
erally as planned. We reached a new high in operating income
for the third consecutive year. These results are attributable to
the previously implemented measures which steadily bore fruit.
The economic environment in fiscal 2015 was favorable for
us in terms of the exchange rate and feedstock costs. However,
entering fiscal 2016, the business environment has become
increasingly challenging with continued appreciation of the
yen. In our vision of creating a portfolio of high-profitability
and high value-added businesses in fiscal 2025, the three years
under the current management initiative are positioned as the
time to build the base for the next phase with connections
among diverse businesses and diverse human resources.
Given that, our financial targets for fiscal 2025 are ¥3 trillion
in net sales and ¥280 billion in operating income. Those for
fiscal 2018 are ¥2.2 trillion in net sales and ¥180 billion in
operating income. The figures for fiscal 2018 are calculated
on the assumption that the exchange rate will be ¥110 per
dollar, which is 10 yen lower than the level of fiscal 2015. If
the exchange outlook had remained steady, we would have
assumed the same operating margin as in fiscal 2015, but
we had to make some adjustments prior to announcing our
targets in light of the recent exchange rate trends. The basic
idea of strengthening our highly profitable businesses, and
raising their share of our total portfolio, remains consistent
with our previous management initiatives.
Our fiscal 2018 target for net income attributable to
owners of the parent is ¥110 billion, with net income per
share reaching nearly ¥80. We will expand operating income
while focusing on greater profitability, and review strategic
shareholdings in accordance with the Corporate Governance
Code. Our other performance targets include ROE of 9%,
ROIC of 7%, and a D/E ratio of 0.5. We will continue to work to
further increase earnings by executing our business strategies
while reinforcing our financial strength.
Q Please tell us your perspective on funding for strategic investment,
and shareholder returns including share buybacks.
A
Under CT2018, we will further increase strategic investments and aim for greater
shareholder returns.
We made a total of ¥1 trillion in investments during the 5-year
period of the previous medium-term management initiative
which ended in fiscal 2015, investing slightly more than
¥100 billion in existing businesses each year. In CT2018, the
total investment during the 3 years is planned to be about
¥700 billion, with slightly more than half being used to carry
out initiatives to reinforce existing businesses. In addition
to heightening the competitive advantages of our existing
businesses, we will expand production capacity for businesses
operating on a global scale and for businesses capable of cap-
turing new markets in Japan. The remainder of the strategic
investment, slightly less than half, will be used for non-linear
growth measures similar to those in the previous initiative,
including M&A to proactively expand businesses.
Our funding policy to support these initiatives will be to
rely on borrowings in principle, while maintaining a D/E ratio
of around 0.5. We will strive to maintain stable and low-cost
financing, as well as a sound financial position, as we advance
our strategic investments.
Our policy for shareholder returns in the previous initiative
was to strive to continuously increase dividends through
continuous earnings growth, with a payout ratio of 30% as our
basic standard. We now have a target for a total return ratio of
35% in fiscal 2018. In addition to maintaining stable dividends
and continuously raising them, we will flexibly perform share
buybacks to achieve this return ratio.
Dividends per share and payout ratio
(¥)
20
15
10
5
0
36.4
17
35.1
14
14
20
19
30.4
25.5
11
25.1
23.5
‘10
‘11
‘12
‘13
‘14
‘15
Dividends per share (left scale)
Payout ratio (right scale)
(%)
40
30
20
10
0
(FY)
Asahi Kasei Report 2016
23
Interview with the Chairman of the Board
A Board of Directors that
engenders sustainable growth
Ichiro Itoh
Chairman & Director
Fiscal 2015 marked a new beginning for corporate governance in Japan with the adoption of the
Corporate Governance Code and Stewardship Code. As Chairman of the Board, Ichiro Itoh describes the
characteristics of corporate governance at Asahi Kasei and tasks ahead for the Board of Directors in an
atmosphere of heightening attention to corporate governance issues.
Q What are the characteristics of corporate governance at Asahi Kasei?
A We were early to bring in Outside Directors, and have an objective and
rational governance configuration.
Japan’s Corporate Governance Code issued in fiscal 2015 calls
for more than one Outside Director and evaluation of the
effectiveness of the Board of Directors. In fact we were one
of the first companies to have 2 Outside Directors as early
as 2007. Since then we increased the proportion of Outside
Directors, and now one-third of our Directors, 3 out of 9, are
Outside Directors. I think there are two major benefits of
having Outside Directors. The first is the broader perspective
brought to discussions in the Board of Directors. Our Outside
Directors have experience in corporate management,
academic research, and industrial policy, and one of them is
our first female Director. They contribute opinions and advice
from a different perspective than Directors from inside the
company. This yields deeper discussions, and ensures that
we reach objective, rational, and reasonable conclusions. The
second benefit of having Outside Directors on the Board is
a heightened sense of constantly being observed from an
outside perspective. This engenders an objective and balanced
perspective, which has a positive effect on business execution.
Another characteristic of our corporate governance is that
in fiscal 2015 we established two advisory committees within
the Board of Directors. The Nomination Advisory Committee
in particular will ensure objective and rational selection of can-
didates for election to the Board of Directors. The Nomination
Advisory Committee is comprised of 2 Directors from inside
the company and 3 Outside Directors. As Outside Directors
form a majority, this prevents internal company logic from
prevailing. If the company’s management is deemed to be off
track, the committee can respond by deselecting Directors
from candidacy for reelection.
This year, in accordance with the Corporate Governance
Code, we began evaluation of the effectiveness of the Board
of Directors. We performed a survey of Directors, discussed
the results, and published a summary in this year’s Corporate
Governance Report. By continuing this process, any deficiency
found in the workings of the Board of Directors will be imme-
diately rectified. This mechanism will help ensure that we are
constantly maintaining the effectiveness of the Board of Directors.
24
Asahi Kasei Report 2016
Q How do you evaluate the current makeup of the Board of Directors?
A We will study how to further raise diversity.
We currently have 9 Directors. Before we adopted an Executive
Officer system in 2003, we had 30 Directors. This was reduced
to 7. In 2005 we amended our Articles of Incorporation to limit
the maximum size to 12 Directors. With too many people, it
becomes hard to have a deep discussion. I think 12 is a reason-
able maximum number.
Regarding the proportion of Outside Directors, I feel that
the current proportion of one-third is appropriate to ensure
effective and objective decisions. As the Asahi Kasei Group’s
operations continue to grow, we may feel that 9 Directors
is not enough. If we increase the number, I think we should
maintain at least one third Outside Directors.
Diversity is another issue we must consider. Our overseas
sales in fiscal 2015 were 35% of the total, and 51.9% if you
exclude the domestic homes business. To bring a global per-
spective to important decisions and management oversight,
we need to consider the selection of a foreigner as Director. We
also hope to nurture a female candidate to be Director from
within the company, though this will take a little more time.
At this year’s annual general meeting of shareholders,
we received over 96% approval for our candidates to the
Board of Directors. The main shareholder advisory firms all
recommended approval. I take this as an indication of a
general consensus that the Board structure we proposed was
considered appropriate. We will continue to strive to maintain
a Board structure that is deemed to be appropriate.
Q What are your expectations for the new President?
A
I anticipate that he will be resolute in management, and advance the creation of new businesses.
The world is undergoing dramatic changes. Consider the
UK’s decision to withdraw from the EU, the US presidential
election, and the economic slowdown in China and other
emerging countries, to name just a few political and economic
issues. There are many challenges to globally managing our
company and achieving sustainable growth under these
circumstances. We need not only courage to make decisions,
but also courage to correct ourselves and courage to close a
business if necessary. The President of the company needs to
be resolute in all of these ways. I also look forward to new busi-
nesses and new products being created. During the previous
medium-term management initiative, we complemented our
own new business creation with M&A. But in line with Asahi
Kasei’s heritage of taking on challenges, I think we should put
more effort into creating new business on our own with an
entrepreneurial spirit.
Q Is there anything that you think the Board of Directors should discuss more deeply?
A We will place greater focus on monitoring the progress of management plans.
The Board of Directors discusses medium-term management
plans and other aspects of growth strategy. In addition to
reviewing the financial results, from now on I intend to place
greater focus on monitoring the state of progress of execution
of management plans. It is the Board of Directors which
approves plans and budgets, so I think the Board of Directors
should also follow up to confirm progress of achievement. As
Chairman of the Board of Directors, I will work to ensure that
the Board works effectively for the sustainable growth of the
Asahi Kasei Group.
Asahi Kasei Report 2016
25
Interview with an Outside Director
A medium-to-long term perspective
for raising corporate value
Norio Ichino
Outside Director
Career summary
April 1964: Joined Tokyo Gas Co., Ltd.
June 1996: Director, Tokyo Gas Co., Ltd.
June 2003: President and Representative Director, Tokyo Gas Co., Ltd.
April 2006: Director and Vice Chairman of the Board, Tokyo Gas Co., Ltd.
April 2007: Director and Chairman of the Board, Tokyo Gas Co., Ltd.
April 2010: Director and Executive Advisor, Tokyo Gas Co., Ltd.
June 2010: Executive Advisor, Tokyo Gas Co., Ltd.
June 2011: Outside Director, Asahi Kasei Corp.*
April 2014: Special Advisor, Tokyo Gas Co., Ltd.*
* Position held at present.
Shareholders and investors are paying greater attention to the roles and responsibilities of Outside
Directors in the Board of Directors. Norio Ichino shares his perspective on how the function of the Board
of Directors can be further improved, as well as his own role on the Board of Directors, considering the
future outlook for the Asahi Kasei Group.
Q How do you evaluate Asahi Kasei’s Board of Directors?
A
There are very active discussions, with objectivity and fairness maintained.
Under the leadership of Chairman Itoh, each Director’s opin-
ions are brought forward. The Corporate Auditors also freely
express their opinions, and there are always active discussions.
Matters pending approval have always been thoroughly
discussed at the Management Council before being brought
to the Board of Directors, and my impression is that the final
decisions are made appropriately. I also feel that 9 Directors is
an appropriate number. Considering that 3 of the 9 Directors
are Outside Directors and 3 of the 5 Corporate Auditors are
Outside Corporate Auditors, over 40% of the total are outsid-
ers. I feel that this configuration ensures an objective and fair
perspective.
Q Do you see any areas where the effectiveness of the Board of Directors could be improved?
A
There should be more measures to nurture candidates for leadership positions and
greater diversity.
I think there are 2 areas where there is room for improvement.
The first would be to use the Board of Directors to nurture
candidates for leadership positions. Considering the broad
scope and large scale of the Asahi Kasei Group’s operations, a
leader needs to have considerable knowledge and judgment.
In addition to the specialist knowledge gained through experi-
ence as President of a strategic business unit or core operating
company, a birds-eye view of the overall Asahi Kasei Group
requires a balanced perspective on which fields to concentrate
investment in, a sense of how to achieve sustainable growth,
26
Asahi Kasei Report 2016
and a strong awareness of compliance-related issues, to name
a few. The Board of Directors is the ideal venue for fostering
such perspectives. Considering the future growth of opera-
tions, I think the number of Directors could be increased by 1
or 2 people.
The second area would be to consider the selection of for-
eigners and women as candidates to be Director. Asahi Kasei
needs to further globalize. The Board of Directors also needs to
be made more global. This is not so simple, because a foreign
candidate to the Board of Directors must understand and
appreciate the Asahi Kasei Group’s vision and values. Currently
the company has 3 foreign Executive Officers. I think we
should consider them as possible candidates to be Director. I
also think we should consider female candidates from inside
the company to be Director, not only for diversity but also
to further raise the effectiveness of the Board of Directors by
bringing in a broader perspective.
Q How do you see your own role in helping to further raise Asahi Kasei’s corporate value?
A
I work to oversee the company’s management from a medium-to-long term perspective.
For the oversight of the company’s management as an
Outside Director, I offer opinions on corporate governance
and express the perspective of the consumer based on my
experience as a chief executive. When we are making the final
decision on a matter, I am careful to consider whether it has
been studied from a medium-to-long term perspective. It’s
natural that people working on the front lines of business tend
to focus on the short term, since they are working hard every
day to achieve results. I see my role as offering advice from
a medium-to-long term perspective, to help businesses add
even greater value. When we were considering the Polypore
acquisition in 2015, I offered opinions based on a medium-to-
long term perspective. Polypore’s battery separator products
were expected to be used in electric vehicles. I straightfor-
wardly asked, “Is the electric vehicle’s time really coming? Will
it be the electric vehicle or the fuel-cell vehicle? What positive
impact can we expect in 10 years?” After thorough discussion
we determined that there were significant merits in both the
short term and the long term, and that it would also contrib-
ute to the development of global human resources, and so we
approved the acquisition.
I sense that the role of a Director is becoming more and
more important. I will continue to deepen my understand-
ing of the operations and vision of the Asahi Kasei Group,
fulfilling my role of management oversight with a sense of
responsibility.
Q How do you see the data manipulation issue at Asahi Kasei Construction Materials Corp.?
A
It’s time to get back to basics and thoroughly apply the “three actuals.”
I think one cause of the data manipulation was poor manage-
ment of on-site workers by Asahi Kasei Construction Materials.
When work is entrusted to contractors and subcontractors
without proper oversight, people become careless and
management becomes lenient. To prevent that, there needs
to be a system where supervisors oversee the work from day
to day with a sense of responsibility, and they need to make
this a regular practice. Furthermore, we need to share Asahi
Kasei’s vision and values with contractors and subcontractors,
so that they can feel a sense of satisfaction in working within
this corporate culture. If that had been the case, I don’t think
this kind of problem would have occurred.
The Asahi Kasei Group is now working to prevent recur-
rence by thoroughly applying the “three actuals” set forth by
President Kobori. Indeed, the “three actuals” are originally a
part of Asahi Kasei’s heritage. When the company entered a
completely new field of business such as housing, they built
the business into a success by focusing on the actual site and
putting the customer first. I hope that all employees will take
a moment to consider the principles of their actions, and feel
a sense of pride and responsibility in their work. The Board
of Directors will thoroughly apply the lessons from this issue
as we work to heighten the company’s risk management
functions.
Asahi Kasei Report 2016
27
Corporate Governance
1
Basic Views on Corporate Governance
The Group Vision of Asahi Kasei is to provide new value to
society and solve social issues by enabling “living in health and
comfort” and “harmony with the natural environment” under
the Group Mission of “contributing to life and living for people
around the world.” With this as a base, we aim to contribute to
society, achieve sustainable growth, and enhance corporate
value over the medium to long term by promoting innovation
and creating synergy through integration of various busi-
nesses. We continue to pursue optimal corporate governance
as a framework to make transparent, fair, timely, and resolute
decisions in accordance with changes in the business
environment.
2
Business Management Organization and Other Corporate Governance Systems regarding
Decision-Making, Execution of Business, and Oversight in Management (as of June 28, 2016)
Shareholders Meeting
○ Audit
Election
Election
○ Oversight
Board of Corporate Auditors
(5 Corporate Auditors, including
3 Independent Outside Corporate Auditors)
Board of Directors
(9 Directors, including
3 Independent Outside Directors)
Cooperation
Audit
Independent Auditors
○ Execution of operations
Audit
Management Council
President
Nomination
Advisory Committee
Remuneration
Advisory Committee
Oversight
Corporate Ethics Committee
Compliance Hotline
Responsible Care Committee
Risk Management Committee
Internal Audit Department
Group staff functions
Core Operating Companies, Strategic Business Units
Note: In September 2016, the Corporate Ethics Committee and Risk Management Committee were replaced with a Risk Management & Compliance Committee
chaired by the President of Asahi Kasei.
28
Asahi Kasei Report 2016
Evolution of Asahi Kasei’s corporate governance system
FY
Board of Directors
Board of Corporate Auditors
Others
• Changed term of office of Directors
to 1 year (previously 2 years)
• Changed maximum number of
Directors to 15 (previously 45)
• 2 Outside Corporate Auditors out of
• Transformed to a holding company
• Changed number of Directors to 7
4 Corporate Auditors
configuration
(previously 30)
• Adopted Executive Officer system
• Established Strategic Management
Council (currently Management
Council)
• 2 Outside Directors out of 11
Directors (previously 8 Directors all
from inside)
• Extended term of office of Corporate
• Launched “Ishin-05” medium-term
Auditors from 3 years to 4 years
management initiative
• Launched “Growth Action—2010”
medium-term management initiative
2003
2006
2007
2008
• 3 Outside Directors out of 10 Directors
• Adopted takeover defense measures
2011
2014
2015
2016
• Launched “For Tomorrow 2015”
medium-term management initiative
• Renewed takeover defense measures
• Reduced number of Directors from
10 to 9, raising the proportion of
Outside Directors to 1/3
• Increased number of Outside
Corporate Auditors from 2 to 3,
making Outside Corporate Auditors
a majority
• Withdrew takeover defense measures
• Discontinued system of retirement
bonuses for Directors and Corporate
Auditors
• Established Nomination Advisory
Committee and Remuneration
Advisory Committee
• Held regular meetings between
Outside Directors and Independent
Auditors
• Held regular meetings between
Outside Directors and Corporate
Auditors
• Established policies for nomination of
candidates for Director and Corporate
Auditor, criteria on the independence
of Outside Directors and Outside
Corporate Auditors, and policy
regarding strategic shareholdings
and exercise of voting rights thereof
• Clarified policy regarding prohibition
of disadvantageous treatment due to
reporting to Corporate Auditors and
policy regarding bearing expenses of
Corporate Auditors with amendment
of basic policy for internal control
• Transformed to an operating holding
company configuration
• Launched “Cs for Tomorrow 2018”
medium-term management initiative
Asahi Kasei Report 2016
29
Corporate Governance
3
Corporate Governance System
◻ Oversight and audit
The Board of Directors, which consists of nine Directors includ-
ing three independent Outside Directors (one-third), makes
decisions on matters requiring a Board of Directors resolution
in accordance with laws or the Articles of Incorporation, makes
decisions on important matters for Asahi Kasei Corp. (the
Company) and other companies of the Group, and oversees
execution of operations by Directors and Executive Officers.
The newly established Nomination Advisory Committee
and Remuneration Advisory Committee under the Board
of Directors consist of a majority of Outside Directors who
provide active involvement in the consideration of matters
such as: optimal makeup and size of the Board of Directors,
policy regarding nomination of candidates for Directors and
Corporate Auditors, criteria on the independence of Outside
Directors and Outside Corporate Auditors, remuneration policy
and system for Directors, and evaluation of individual Directors
to determine remuneration based on performance.
The Board of Corporate Auditors consists of five Corporate
Auditors including three independent Outside Corporate
Auditors (a majority). In accordance with the audit policy
stipulated by the Board of Corporate Auditors, each Corporate
Auditor oversees execution of duties by Directors by attending
the Board of Directors meetings and examining the state of
operations. To enhance functions of the Board of Corporate
Auditors and to facilitate smooth cooperation among
Corporate Auditors from inside the company and Outside
Corporate Auditors, a Corporate Auditors Office is staffed with
full-time employees.
PricewaterhouseCoopers Aarata LLC performs financial
audits based on the Companies Act and the Financial
Instruments and Exchange Act.
Furthermore, the Internal Audit Department conducts
internal audits based on the audit plan. Results of internal
audits performed by each staff function are aggregated by
the Internal Audit Department and reported to the Board of
Directors.
◻ Execution of operation
We have adopted an Executive Officer system to enable faster
business execution, and clearly define responsibilities; Directors
fulfill decision-making and oversight functions, and Executive
Officers fulfill execution of operations.
The Decision-Making and Approval Authority Regulations
of the Group stipulate detailed criteria for decision-making
with regard to matters concerning the management plan,
investments and loans, funding and financial management, the
organization and management system, research and develop-
ment, and production technology, and delegate authority from
the Board of Directors to the Management Council, strategic
business units, and core operating companies.
4
Policy and Procedure to Nominate Candidates for Directors
In selecting candidates for Directors, we appoint persons
with deep insight and excellent skills suitable for the role.
For Directors from inside the company, we select those with
expertise, experience and skills required in the respective field.
On the other hand, Outside Directors are expected to supervise
the management from an objective standpoint based on their
deep insights and rich experience. Therefore we select from
among people who were corporate executives, academic
experts, or public officials.
To further heighten objectivity and transparency in
appointing candidates for Directors, we established a
Nomination Advisory Committee which consists of a majority
of Outside Directors who take part in discussions on the
makeup and size of the Board of Directors and policies for
nomination of Directors and Corporate Auditors, and provide
advice to the Board of Directors.
30
Asahi Kasei Report 2016
5
Policy and Procedure to Determine Remuneration of Directors
Directors’ remuneration, within the remuneration limit
approved at a shareholders meeting, is determined based on
the remuneration system approved in advance by the Board
of Directors, and it consists of the fixed base remuneration
determined by rank of each Director and the performance-
linked remuneration determined based on consolidated and
non-consolidated financial results. Performance is evaluated
considering the degree of achievement of individually
established objectives, achievements, contributions to financial
performance, and the degree of contributions, in addition to
management benchmarks including but not limited to net
sales, operating income, and ROA. We determine the level of
remuneration based on research data provided by external
specialized agencies, etc. In order to further improve the
objectivity and transparency of Directors’ remuneration, we
have established a Remuneration Advisory Committee, which
consists of a majority of Outside Directors, who participate
in discussions about the Directors’ remuneration system and
operation thereof, and provide advice to the Board of Directors.
6
Independence Standards and Qualification for Outside Directors and Outside Corporate Auditors
In determining that Outside Directors and Outside Corporate
Auditors are independent, we ensure that they do not cor-
respond to any of the following and whether they are capable
of performing duties from a fair and neutral standpoint.
5. Company which receives donation or aid (10 million yen or
more in a year) from the Asahi Kasei Group or person who
executes businesses thereof
6. Main shareholder of the Asahi Kasei Group (person or
1. Person who currently executes or has executed businesses
of the Asahi Kasei Group (executive directors, executive
officers, employees, etc.) over the last 10 years
2. Company or person who executes businesses thereof
whose major business partner is the Asahi Kasei Group
(company with more than 2% of its annual consolidated
net sales from the Asahi Kasei Group)
company who directly or indirectly owns 10% or more of
all voting rights in Asahi Kasei) or person who executes
businesses thereof
7. Person who executes businesses of a company which elects
Directors, Corporate Auditors, or employees of the Asahi
Kasei Group as its own Directors or Corporate Auditors
8. Independent Auditor of the Asahi Kasei Group or any staff
thereof
3. Major business partner of the Asahi Kasei Group (when
9. Person who fell into any of the categories 2 through 8
payments by this partner to the Asahi Kasei Group account
for more than 2% of our annual consolidated net sales or
when we borrow money from such partner amounting to
more than 2% of our consolidated total assets) or person
who executes businesses thereof
4. Person who receives money or other financial gain (10
million yen or more in a year) from the Asahi Kasei Group
as an individual other than remuneration as a Director or
Corporate Auditor of Asahi Kasei
above over the last three years
10. Person who has a close relative (spouse, relative within
the second degree of kinship, and those who share living
expenses) who falls under any of the categories 1 through
8 above, provided that “person who executes businesses
thereof” in 1, 2, 3, 5, 6, and 7 above shall be replaced with
“important person who executes businesses thereof (execu-
tive directors and executive officers, etc.)”
Asahi Kasei Report 2016
31
Corporate Governance
7
Audits
In accordance with the audit policy adopted by the Board of
Corporate Auditors, each Corporate Auditor attends meetings
of the Board of Directors and audits Directors in the discharge
of their duties through examination of business performance.
The Corporate Auditors Office provides staff to support
Corporate Auditors in their duties.
PricewaterhouseCoopers Aarata LLC is contracted as the
Independent Auditors to perform financial audits in accor-
dance with the Companies Act and Financial Instruments and
Exchange Act.
The Independent Auditors form a team of assistants for
performance of the audit in accordance with its audit plan. The
team mainly comprises certified public accountants and junior
accountants, and also includes certified information systems
accountants and other specialist accountants.
The Internal Audit Dept., the Board of Corporate Auditors,
and the Corporate Auditors of core operating companies and
other subsidiaries regularly meet to confirm the effectiveness
of internal governance systems for legal compliance and risk
management. The Board of Corporate Auditors provides coun-
sel to the Independent Auditors of the consolidated financial
audit of Asahi Kasei each quarter and each fiscal year.
The Internal Audit Dept. (15 personnel as of March 31,
2016) is a corporate organ under the direct authority of the
President of Asahi Kasei. 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.
8
Compliance
◻ Corporate ethics
Our Corporate Ethics—Basic Policy and Code of Conduct
(enacted in August 1998, revised in April 2016) 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 is based
on our Group Mission, Group Vision, and Group Values.
◻ 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 (revised in
April 2016) which covers issues related to personal information
protection, is monitored by the Corporate Ethics Committee.
9
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.
◻ Basic policy
With our Group Mission of “contributing to life and living for
people around the world,” we hold “ensuring transparency”
as 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.
10
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 1988. 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 preven-
tion of sexual harassment, the state of compliance with laws
and regulations including personal information protection law,
and operation of the Compliance Hotline.
32
Asahi Kasei Report 2016
11
Risk Management
The Asahi Kasei Group has a Risk Management Committee to
enhance the risk management system to prevent operational
crises and to minimize the effects of any crisis which may
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 capabil-
ity and effectiveness for risk management and emergency
response throughout the Asahi Kasei Group.
In fiscal 2014, we reinforced familiarity with the emergency
contact system to employ in the event of a disaster at each
major operating location. We also held a series of internal
meetings and interviews to confirm that the management of
personal information is implemented properly to prevent any
inappropriate disclosure. Additionally, in May 2015 we adopted
a system to efficiently confirm the well-being of personnel
stationed overseas and travelling on business overseas if an
emergency situation should occur where they are located.
12
Establishment of Risk Management & Compliance
The expansion of our global businesses through several M&As,
including ZOLL in 2012 and Polypore International in 2015, and
the occurrence of manipulation of precast concrete pile instal-
lation data by subsidiary Asahi Kasei Construction Materials,
have raised the exigency of a review of our compliance system.
To reinforce the company-wide configuration, we
established Risk Management & Compliance in January 2016
as the central hub to aggregate all risk management and
compliance-related information. To further enhance the
organization, managers responsible for risk management
and compliance were designated in each strategic business
unit and core operating company; they will lead the effort to
achieve thorough compliance and perform a review to identify
latent risks within each organization. We will formulate specific
methods to strengthen compliance and obtain thorough risk
management in accordance with the following policies.
Compliance
Risk management
◻ Basic policy: Formulate and disseminate Code of
Conduct for all employees in Japan and overseas
◻ Basic policy: Understand risks by business and establish
a crisis response system
1) Adopt global standardized Corporate Ethics—Basic Policy
1) Identify risks in each business and each affiliated company
and Code of Conduct
2) Formulate countermeasures to identified risks; monitor
2) Formulate and implement compliance education
and periodically review
programs
3) Establish and maintain a crisis response system
3) Monitor the dissemination of the above 1) and 2) among
employees
For more information regarding corporate governance, please refer to the Asahi Kasei Group website.
http://www.asahi-kasei.co.jp/asahi/en/aboutasahi/governance/
Asahi Kasei Report 2016
33
Financial and Non-Financial Highlights
For the years ended March 31
Net sales
Domestic sales
Overseas sales
Operating income
Ordinary income
Income before income taxes
Net income attributable to owners of the parent
Comprehensive income
Net income per share, yen
Capital expenditure
Depreciation and amortization
R&D expenditures
Cash dividends per share, yen
As of March 31
Total assets
Inventories
Property, plant and equipment
Investments and other assets
2016
¥1,940,914
1,261,203
679,711
165,203
161,370
146,389
91,754
(11,925)
65.69
99,000
93,811
81,118
20.00
2015
¥1,986,405
1,313,128
673,277
157,933
166,543
158,440
105,652
214,484
75.62
89,108
86,058
75,540
19.00
2014
¥1,897,766
1,289,054
608,712
143,347
142,865
163,860
101,296
146,102
72.48
92,397
86,052
71,101
17.00
2013
¥1,666,640
1,181,429
485,211
91,960
95,125
82,302
53,712
117,515
38.43
113,785
80,050
71,120
14.00
2016
2015
2014
2013
Net wortha
Net worth per share, yen
Net worth/total assets, %
Number of employees
a Net assets less non-controlling interests; shareholders’ equity shown for the year ended March 31, 2006.
b In the year ended March 31, 2012, the accounting policy for naphtha resale was changed to exclude the naphtha resale amount from net sales. This change is applied retroactively
¥2,211,729
336,743
555,989
305,140
1,041,901
745.94
47.1
32,821
¥2,014,531
339,677
502,507
334,368
1,082,654
775.05
53.7
30,313
¥1,915,089
328,540
480,535
285,735
912,699
653.15
47.7
29,127
¥1,800,170
309,677
461,581
263,704
812,080
581.05
45.1
28,363
from the year ended March 31, 2008, through the year ended March 31, 2011.
Net sales
Operating income1
1,573.2
1,666.6
1,897.8
1,986.4
1,940.9
(¥ billion)
2,000
1,500
1,000
500
0
143.3
157.9
165.2
104.3
92.0
(¥ billion)
200
150
100
50
0
–50
'11
'12
'13
'14
'15
(FY)
'11
'12
'13
'14
'15
(FY)
Chemicals
Health Care
Fibers
Critical Care
Homes
Others
Construction Materials
Electronics
Chemicals
Health Care
Fibers
Critical Care
Homes
Others
Construction Materials
Corporate expenses and eliminations, etc.
Electronics
Net income attributable to owners of the parent, ROE
Interest-bearing debt, D/E ratio
(¥ billion)
120
100
80
60
40
20
0
101.3
105.7
91.8
55.8
53.7
8.1
7.1
11.7
10.6
8.6
(%)
24
20
16
12
8
4
0
(¥ billion)
500
400
300
200
100
0
381.4
303.9
269.0
184.1
0.26
0.47
0.33
0.25
449.7
0.43
'12
Net income attributable to owners of the parent (left scale)
'13
'11
'14
'15
ROE (right scale)
(FY)
'12
Interest-bearing debt (left scale)
'11
'13
'14
D/E ratio (right scale)
'15
1 Amortization of goodwill, etc., related to acquisition of ZOLL and Polypore are
excluded from Critical Care and Electronics, respectively, and included in
“Corporate expenses and eliminations, etc.”
1.0
0.8
0.6
0.4
0.2
0
(FY)
34
Asahi Kasei Report 2016
2012
¥1,573,230
1,151,705
421,525
104,258
107,567
94,866
55,766
62,561
39.89
85,124
78,440
66,269
14.00
2012
¥1,410,568
279,206
416,119
227,489
706,846
505.72
50.1
25,409
2011b
¥1,555,945
1,106,656
449,289
122,927
118,219
98,342
60,288
45,088
43.11
66,014
84,092
62,320
11.00
2011
¥1,425,879
256,248
418,354
220,773
663,566
474.59
46.5
25,016
2010b
¥1,392,212
1,021,803
370,409
57,622
56,367
46,056
25,286
—
18.08
83,990
86,166
62,924
10.00
2010
¥1,368,892
251,084
447,497
226,331
633,343
452.91
46.3
25,085
2009b
¥1,521,178
1,127,213
393,965
34,959
32,500
19,031
4,745
—
3.39
126,725
79,436
60,849
10.00
2009
¥1,379,337
273,539
441,271
218,477
603,846
431.77
43.8
24,244
2008b
¥1,663,778
1,176,441
487,337
127,656
120,456
105,599
69,945
—
50.01
82,911
73,983
56,170
13.00
2008
¥1,425,367
272,372
424,193
234,873
666,244
476.39
46.7
23,854
Millions of yen, except where noted
2007
¥1,623,791
1,195,751
428,040
127,801
126,507
114,883
68,575
—
49.00
84,413
71,646
52,426
12.00
2007
¥1,459,922
240,006
426,959
281,502
645,655
461.50
44.2
23,715
2006
¥1,498,620
1,125,454
373,166
108,726
104,166
94,481
59,668
—
42.46
66,310
69,399
51,467
10.00
2006
¥1,376,044
214,062
414,368
284,390
594,211
424.34
43.2
23,030
Environmental and safety investment
Greenhouse gas emissions from production processes
(¥ billion)
(million tons CO2 equivalent)
7.88
5.20
4.26
3.80
3.90
8
6
4
2
0
6
5
4
3
2
1
0
5.05
4.11
4.17
4.06
3.84
'11
Environmental investment
'12
'13
'14
'15
(FY)
Safety investment
'11
Carbon dioxide
Sulfur hexafluoride
'12
Nitrous oxide
'13
Methane
'14
'15
(FY)
HFCs
PFCs
Number of women working as managers2
Employees using parental leave3
410
454
500
344
370
500
400
300
200
100
0
600
500
400
300
200
100
0
430
454
468
457
556
'12/6
'13/6
'14/6
'15/6
'16/6
2 Results as of June 30 each year for personnel employed by Asahi Kasei Corp.,
Asahi Kasei Microdevices Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction
Materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. (Asahi
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., and Asahi Kasei E-materials Corp.
included in FY2015 and earlier).
Women
'11
Men
'12
'13
'14
'15
(FY)
3 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.
Asahi Kasei Report 2016
35
At a Glance
Beginning with fiscal 2016, the Asahi Kasei Group
has adopted an operating holding company
configuration and reorganized its business portfolio
into the three business sectors of Material, Homes,
and Health Care. The new medium-term manage-
ment initiative, Cs for Tomorrow 2018, is focused on
increasing corporate value through optimal alloca-
tion of management resources into three sectors.
Health Care
14.9 %
17.4 %
Material
52.0 %
42.8 %
FY2016
(planned)
Homes
33.1 %
39.8 %
Note: Percentages shown exclude “Others” category and corporate expenses
and eliminations.
Material
• Fibers & Textiles SBU
• Petrochemicals SBU
• Performance Polymers SBU
• Performance Materials SBU
• Separators SBU
• Consumables SBU
• Asahi Kasei Microdevices Corp.
(electronic devices)
FY2016 forecast
Net sales
¥ 980.0 billion
Operating income
¥ 70.0 billion
FY2015
FY2016
Asahi Kasei Fibers Corp.
Asahi Kasei Chemicals Corp.
Asahi Kasei Corp.
Asahi Kasei E-materials Corp.
Asahi Kasei
Microdevices Corp.
Asahi Kasei
Microdevices Corp.
Chemicals & Fibers
Homes & Construction Materials
Net sales and operating income
912.5
954.6
835.6
Net sales
(¥ billion)
1,000
800
600
400
200
0
Net sales
(¥ billion)
700
600
500
400
300
200
100
0
589.4
603.8
632.4
'13
'14
'15
(FY)
'13
'14
'15
(FY)
64.6
68.9
Operating income
(¥ billion)
70
60
50
40
30
20
10
0
47.4
Operating income
(¥ billion)
80
68.5
63.0
71.0
60
40
20
0
'13
'14
'15
(FY)
'13
'14
'15
(FY)
In fiscal 2016, the former Chemicals & Fibers segment and the former Electronics segment are combined as a Material segment, and the former Homes &
Construction Materials segment is renamed as a Homes segment; the Health Care segment remains unchanged. As a result, the former 4 segments are
36
Asahi Kasei Report 2016
Material ■ Net sales ■ Operating incomeHomes ■ Net sales ■ Operating incomeHealth Care ■ Net sales ■ Operating income Homes
• Homes
• Construction materials
Health Care
• Pharmaceuticals
• Medical Care
• Acute Critical Care
FY2016 forecast
Net sales
¥ 624.0 billion
Operating income
¥ 65.0 billion
FY2016 forecast
Net sales
¥ 280.0 billion
Operating income
¥ 28.5 billion
FY2015
FY2016
FY2015
FY2016
Asahi Kasei Homes Corp.
Asahi Kasei Homes Corp.
Asahi Kasei Pharma Corp.
Asahi Kasei Pharma Corp.
Asahi Kasei Construction
Materials Corp.
Asahi Kasei Construction
Materials Corp.
Asahi Kasei Medical Co., Ltd.
Asahi Kasei Medical Co., Ltd.
ZOLL Medical Corporation
ZOLL Medical Corporation
by segment
Electronics
Health Care
145.0
150.4
174.5
Net sales
(¥ billion)
200
150
100
50
0
232.4
257.1
285.4
Net sales
(¥ billion)
300
250
200
150
100
50
0
'13
'14
'15
(FY)
'13
'14
'15
(FY)
Operating income
(¥ billion)
15
14.2
14.3
Operating income
(¥ billion)
40
36.2
10
5
0
6.9
30.8
26.7
30
20
10
0
'13
'14
'15
(FY)
'13
'14
'15
(FY)
revised into the 3 segments of Material, Homes, and Health Care. Concurrently with the segment revision, some operations are reclassified among different
business categories. Fiscal 2015 results shown in the new segment classifications have been recalculated for comparison purposes.
Asahi Kasei Report 2016
37
Operating Segments
Material
Yuji Kobayashi
Executive Officer
for Material business sector
Representative Director & Vice-Presidential
Executive Officer, Asahi Kasei Corp.
Main products
■ Bemberg™ cupro fiber
■ Roica™ spandex
■ Spunbond nonwovens
■ Leona™ nylon 66 filament
■ Acrylonitrile
■ Styrene
■ Polyethylene
■ Engineering plastics
■ Synthetic rubber
■ Microza™ hollow-fiber filtration
membranes
■ Ion-exchange membranes
■ Ceolus™ microcrystalline cellulose
■ Saran Wrap™ cling film
■ Sunfort™ photosensitive dry film
■ Hipore™ and Celgard™ Li-ion battery
separators
■ Daramic™ lead-acid battery separator
■ Mixed-signal LSIs
■ Hall elements
38
Asahi Kasei Report 2016
From unique fiber materials to petrochemicals and synthetic resins, and from con-
sumables such as Saran Wrap™ cling film to battery separators and electronic devices
such as LSIs and sensors, our high value-added product portfolio is expanding on a
global scale, contributing to a better future through unrivalled technologies.
■ Sales composition
■ Operating income
Net sales & operating income
52.3 %
composition
42.5 %
Fiscal 2015
(¥ billion)
1,200
900
600
300
0
1,004.4
980.0
79.2
70.0
'15
'16
(forecast)
(¥ billion)
120
90
60
30
0
(FY)
Not including “Others” category and corporate
expenses and eliminations.
Net sales (left scale)
Operating income (right scale)
Highlights
Asahi Kasei Europe began operating
in Germany
Asahi Kasei Europe GmbH began operating on April 1,
2016, in Dusseldorf, Germany, as a base for the further
expansion of material business in Europe mainly
focusing on automotive-related applications. Asahi Kasei
Europe also functions as a regional headquarters for all
operations of Asahi Kasei in Europe, working to maximize
earnings in the European market.
Asahi Kasei Europe’s office building
Capacity expansion for Hipore™
LIB separator
With increasing demand for hybrid-electric and
all-electric vehicles worldwide, the lithium-ion
battery (LIB) market is forecasted to grow sub-
stantially in automotive applications, in addition
to applications for consumer electronics. This
capacity expansion at its plant in Moriyama,
Shiga, will further reinforce Asahi Kasei’s capability
to provide stable supply to meet rising global
demand for LIB separators.
Hipore™ LIB separator
Fibers and Textiles
Q
A
Please tell us about the situation of each business, and outlook for fiscal 2016.
In fiscal 2015, we set a new record high in operating income for the second consecutive year. We forecast
that business will continue to perform well in fiscal 2016, but with an impact from the stronger yen.
In fiscal 2015, the fibers business achieved its highest net
sales and operating income since the adoption of a holding
company configuration in 2003. Feedstock costs declined for
each product, the weaker yen contributed to performance,
and shipments of Lamous™ artificial suede for automotive
upholstery and Roica™ elastic polyurethane filament (spandex)
increased. The growth of overseas subsidiaries also contrib-
uted to increased operating income.
In fiscal 2016, the operating climate is expected to be
challenging with a stronger yen and a slowdown in the
Chinese economy. We expect that the plants for our main
products will continue to operate at full capacity. Capacity
expansions made under the previous medium-term initiative,
including polypropylene (PP) spunbond and Roica™ spandex
in Thailand, and Leona™ nylon 66 filament for airbags in
Miyazaki, Japan, in June 2016, will contribute to earnings.
Chemicals
Q
A
While feedstock costs fluctuate considerably, what is the situation of the main businesses and
outlook for fiscal 2016?
Lower sales in fiscal 2015 were mainly due to a significant decline in market prices for
petrochemical products. In fiscal 2016 we expect an impact from a stronger yen.
In fiscal 2015, while feedstock costs for petrochemical
products declined with lower oil and naphtha prices, petro-
chemicals had lower net sales and operating income than
in the previous year, due to deteriorated market prices most
notably for acrylonitrile. In performance polymers, terms of
trade improved due to lower feedstock costs, and sales of
engineering plastics and synthetic rubber for fuel-efficient
tires were firm, resulting in higher net sales and operating
income than in the previous year. In specialty products, the
effect of the weaker yen was most notable for ion-exchange
membranes, and shipments of Saran Wrap™ cling film
increased, resulting in higher net sales and operating income
than in the previous year.
In fiscal 2016, we forecast increased shipments of
synthetic rubber for fuel-efficient tires and consumable
products such as Saran Wrap™ cling film. On the other hand,
we expect a stronger yen to impact each business, and terms
of trade centering on performance polymers to deteriorate.
Shipments of styrene will decrease due to structural realign-
ment of our domestic petrochemicals business.
Electronics
Q
A
Please recap fiscal 2015 and give your outlook for fiscal 2016.
While there is an impact from amortization of goodwill and other intangible assets, etc., related
to the acquisition of Polypore, shipments of battery separators are expected to grow.
In fiscal 2015, electronic devices operations benefited from
the weaker yen and sales of devices for smartphones such
as audio LSIs and devices for camera modules were firm, but
shipments of electronic compasses declined, resulting in
lower net sales and operating income than in the previous
year. In electronic materials operations, production and
sale of general purpose epoxy resin were terminated, but
the weaker yen contributed to performance, and sales of
Hipore™ LIB separator were firm, resulting in lower net sales
and higher operating income compared to the previous year.
Beginning with Q2 2015, results of Polypore International,
LP and its consolidated subsidiaries are included in the
electronics business.
In fiscal 2016, we forecast moderate growth continuing
in the consumer electronics market, while automotive appli-
cations for electronic devices grow with advanced electronic
functions in vehicles, and demand for LIB separators in
electric vehicle applications continues to grow. Shipments
are forecasted to increase for audio LSIs, devices for camera
modules, and battery separators such as Hipore™.
Asahi Kasei Report 2016
39
Operating Segments
Homes
Eisuke Ikeda
Executive Officer
for Homes business sector
Primary Executive Officer, Asahi Kasei Corp.
President & Representative Director,
Asahi Kasei Homes Corp.
Main products
■ Hebel Haus™ unit homes
■ Hebel Maison™ apartment buildings
■ Atlas™ condominiums
■ Hebel Rooms™ apartment rental
network
■ Remodeling
■ Mortgage financing
■ Hebel™ AAC panels
■ Neoma™ phenolic foam insulation
panels
■ Foundation systems
■ Structural systems and components
40
Asahi Kasei Report 2016
With our homes business that provides high-quality products and services for Long
Life Homes that maintain high customer satisfaction that lasts more than half a cen-
tury, and our construction materials business that provides innovative and original
high value-added products, we set the stage for a rich and fulfilling lifestyle.
■ Sales composition
■ Operating income
32.9 %
composition
38.1 %
Fiscal 2015
Net sales & operating income
(¥ billion)
800
600
400
200
0
(¥ billion)
100
75
50
25
0
(FY)
632.4
71.0
624.0
65.0
'15
'16
(forecast)
Not including “Others” category and corporate
expenses and eliminations.
Net sales (left scale)
Operating income (right scale)
Highlights
Development of condominiums
in Taiwan
Asahi Kasei Homes began its first overseas hous-
ing project, a condominium development in
the Zhonghe District of New Taipei City, Taiwan.
With growing needs to redevelop older housing
forecasted, Taiwan is a promising potential
market for Asahi Kasei Homes to leverage its
know-how for reconciling complex relation-
ships between different ownership rights to
create proposals that are acceptable to various
interested parties.
Illustration of condominium planned in Taiwan
Alliance with Mori-Gumi Co., Ltd.
Asahi Kasei Homes has concluded an agreement with construction company Mori-Gumi
on a capital and business alliance including the sharing of know-how in the fields of
construction of mid-to-high-rise homes and condominiums, and large-scale repair and
renovation of existing condominiums. To create synergies between the two companies
more smoothly and efficiently, Asahi Kasei Homes acquired 30.2% of the stock of
Mori-Gumi.
Homes
Q
A
How did your order-built homes and other peripheral businesses perform in fiscal 2015, and how
was the trend for home orders?
Homes operations achieved record highs in net sales and operating income in fiscal 2015. With
resumption of advertising this May, we look forward to receiving increased orders.
Having received record-high orders in fiscal 2014, our
order-built homes business continued to make full use of its
construction capability to increase deliveries in fiscal 2015,
especially of Hebel Maison™ apartment buildings, enabling
sales growth. SG&A expenses such as promotional expenses
decreased due to curtailed advertising from the second half
of the last fiscal year.
The performance of peripheral businesses was firm. The
rental management business in real estate operations grew
in line with increased deliveries of Hebel Maison™ apartment
buildings, and deliveries of large-scale condominiums
included Atlas Chofu. Among remodeling operations, reroof-
ing, repainting, and equipment installation performed well.
As a result, consolidated net sales and operating income for
homes operations renewed its record highs.
Orders decreased by 5.9% from the previous year. In the
first half, we proactively implemented marketing strategies
including a campaign for celebrating the 40th anniversary
of our two-generation homes that maintain leadership in
urban markets. In the latter half, curtailed advertising had
Construction Materials
an impact on orders centering on apartment buildings.
Although unit-homes operations saw decreased customer
traffic, the decline in orders was relatively modest thanks to
an effective approach to customers at model home parks,
etc. Resumption of advertising in May 2016 will help return
orders to a growth trajectory.
Hebel Haus™ Cut & Gable
Atlas Chofu
Q
A
Please tell us about the situation of fiscal 2015, and prospects for the future.
Although there is concern that the pile installation data manipulation incident may affect the
foundation systems business, other businesses are expected to remain strong.
In fiscal 2015, while Japan’s overall total floor space of new
construction and number of housing starts were largely
unchanged from the previous year, the foundation systems
business posted lower net sales and operating income
due to the pile installation data incident that came to light
during the second half of the fiscal year. Meanwhile, thermal
insulation business performed well as an effect of reinforced
marketing. Due to factors such as lower input costs, the
overall construction materials businesses posted lower net
sales and higher operating income from a year ago.
In fiscal 2016, the autoclaved aerated concrete (AAC)
business is focused on capturing demand in major urban
areas while raising productivity. In insulation materials
business we are forecasting higher net sales and operating
income with strong demand in homes with high-spec
insulation, while further reinforcing marketing in residential
markets and expanding sales in non-residential markets.
While there is concern of an impact from the pile installation
data incident on the foundation systems business, we will
continue to revitalize our foundation systems business
through efforts including thorough compliance.
Neoma™ phenolic foam
insulation panel
Plant for Neoma™ panels
Asahi Kasei Report 2016
41
Operating Segments
Health Care
Yutaka Shibata
Executive Officer for Health Care
business sector (joint)
Primary Executive Officer, Asahi Kasei Corp.
President & Representative Director,
Asahi Kasei Medical Co., Ltd.
Richard Packer
Executive Officer for Health Care
business sector (joint)
Primary Executive Officer, Asahi Kasei Corp.
Chairman & Board Director,
ZOLL Medical Corporation
Main products
■ Teribone™ osteoporosis drug
■ Recomodulin™ anticoagulant
■ APS™ polysulfone-membrane dialyzers
■ Therapeutic apheresis devices
■ Planova™ virus removal filters
■ Defibrillators for professional use
■ LifeVest™ wearable defibrillator
■ AED Plus™ automated external
defibrillator
■ Thermogard System™ temperature
management system
42
Asahi Kasei Report 2016
We contribute to advanced medical care around the world with world-class drugs in
the fields of orthopedics, critical/intensive care, and the immune system; blood purifica-
tion devices for chronic and acute renal failure, and various intractable diseases; and
products for the manufacturing process of biopharmaceuticals and other new drugs.
Our life-saving products in the field of acute critical care include AEDs, defibrillators for
professional use, and intravascular temperature management systems.
■ Sales composition
■ Operating income
Net sales & operating income
14.8 %
composition
19.4 %
(¥ billion)
300
285.4
280.0
(¥ billion)
60
Fiscal 2015
200
100
0
36.2
28.5
'15
'16
(forecast)
40
20
0
(FY)
Not including “Others” category and corporate
expenses and eliminations.
Net sales (left scale)
Operating income (right scale)
Highlights
Strategic collaboration with Orion Corporation
Asahi Kasei Pharma entered a global strategic collaboration with Orion Corporation of
Finland for the discovery, development, and commercialization of new pain manage-
ment therapies. Four discovery phase candidates, two being provided by each company,
are subject to joint development. Each company has the right to exclusively license the
other’s development-ready programs, with all development costs to be shared by both
companies.
Sale of Teribone™ in Korea
Asahi Kasei Pharma’s licensing partner, Dong-A
ST Co., Ltd., began the sale of Teribone™ osteo-
porosis drug for the treatment of osteoporosis
in postmenopausal women at high risk of bone
fracture. Through Dong-A ST’s effort to quickly
facilitate its widespread use, Teribone™ will
make a significant contribution to the treatment
of osteoporosis in Korea.
Teribone™ osteoporosis drug
Pharmaceuticals and Medical Care
Q
A
Please tell us the fiscal 2016 outlook for the pharmaceuticals and medical care businesses
considering the impact of reduced reimbursement prices.
Lower net sales and operating income are forecasted. Pharmaceuticals will be impacted from
reduced reimbursement prices and competition from generics. Medical care will be impacted
by a stronger yen and reduced reimbursement prices.
In fiscal 2015, although sales of Teribone™ and Recomodulin™
were firm, the pharmaceuticals operation had lower net
sales and operating income than the previous year due to
a significant decrease in shipments of Flivas™ as a result of
competition from generics. Ongoing efforts to enhance the
pharmaceutical product pipeline included the September
2015 filing of an application for approval to manufacture and
market AK156 (zoledronic acid) for the treatment of osteopo-
rosis in Japan, and the conclusion of joint R&D agreements
with other companies. The medical care operation had higher
net sales and operating income than the previous year due
to increased shipments of dialysis products and Planova™,
reaching the highest operating income for this business since
the adoption of a holding company configuration.
Pharmaceuticals and medical care operations are
forecasted to have lower net sales and operating income in
fiscal 2016. In pharmaceuticals, reduced reimbursement prices
will impact Teribone™, which is subject to repricing for market
expansion, as well as other pharmaceutical products, while
Flivas™ will continue to be impacted by competition from
Acute Critical Care
generics. Shipments of Teribone™ and Recomodulin™ are
expected to increase, but the net sales and operating income
from pharmaceuticals operation are expected to decrease. In
medical care, shipments of Planova™ are expected to increase,
but net sales and operating income are expected to decrease
due to a stronger yen and reduced reimbursement prices.
Medical care products
Pharmaceuticals
Q
A
The acute critical care operation has been growing steadily. Please tell us its outlook.
We plan to continue to increase selling, general and administrative expenses for reinforced
sales activity, and forecast that operations will continue to expand centering on the LifeVest™
wearable defibrillator.
Fiscal 2015 saw continued growth in the acute critical care
businesses. The LifeVest™ wearable defibrillator business
continued to expand well, especially in the US. Sales of other
products such as defibrillators and related accessories also
increased centering on the North American hospital market
and overseas markets. In September 2015, ZOLL acquired
Kyma Medical Technologies, Ltd. of Israel, a company devel-
oping technologies to measure early signs of congestive
heart failure, enabling ZOLL to broaden its product offerings
with additional technologies designed to improve outcomes
for heart failure patients.
The trend in fiscal 2016 will be largely unchanged, with
continued growth expected. Selling, general and administra-
tive expenses are expected to grow with reinforced sales
activities, but we aim to increase net sales and operating
income mainly with the expansion of defibrillator businesses
centering on LifeVest™.
LifeVest™ wearable defibrillator
ZOLL AED Plus™ automated external defibrillator
Asahi Kasei Report 2016
43
Review of “For Tomorrow 2015” (FT2015)
Record-high operating results, more balanced sector structure
Under the basic strategies of “expansion of
world-leading businesses” and “creation of
new value for society,” we achieved record-
high operating income in the final year of
FT2015. During the five-year period of the
initiative, we further diversified with strategic
actions including our two largest acquisitions.
Here is a summary by fiscal year.
Net sales
Operating income
FY2011
FY2015
Chemicals & Fibers
Homes &
Construction Materials
Electronics
Health Care
Fiscal 2011
Launch of FT2015—group-wide effort to create
value for society, with our group slogan “Creating
for Tomorrow”
The global economy significantly worsened due to the sovereign
debt crisis in Europe and a slowdown in exports to emerging
countries. Japan’s economic circumstances remained challenging
with the effects of the Great East Japan Earthquake, the persistent
strength of the yen, and high feedstock and fuel costs. This oper-
ating environment was especially challenging for our chemicals
business, while our housing business achieved record-high
operating income.
Net sales ¥1,573.2 billion
Ordinary
income
¥107.6 billion
Operating income
¥104.3 billion
Net income attributable
to owners of the parent
¥55.8 billion
Highlights
Nov: Launch of Teribone™ osteoporosis
drug in Japan
Asahi Kasei Pharma launched the sale of a 56.5 µg
subcutaneous injection formulation of Teribone™
for treatment of osteoporosis with high risk
of fracture, which has been increasing as the
population ages. When administered once a week,
Teribone™ can increase bone strength with both
improved bone quality and increased bone mass,
making a significant contribution to the treatment
of osteoporosis.
Dec: Acquisition of Crystal IS, Inc.
Crystal IS, a US-based venture focused on the
development of deep ultraviolet light emitting
diodes (UVC LEDs), became a wholly owned
subsidiary of Asahi Kasei.
Fiscal 2012
Solid steps for future growth following the basic
strategies of FT2015
The global economy generally remained challenging with an
economic downturn in Europe and slowing demand in China and
other emerging economies. For the Japanese economy, expecta-
tions of recovery rose with domestic demand underpinned by firm
consumer spending and with conditions for exports improving.
While our global businesses such as chemicals and electronics
faced difficult conditions, our domestic businesses performed
well; our homes businesses achieved record-high operating
income for the second consecutive year, and our pharmaceuticals
business enjoyed growing sales of new drugs.
Net sales ¥1,666.6 billion
Ordinary
income
¥95.1 billion
Operating income
Net income attributable
to owners of the parent
¥92.0 billion
¥53.7 billion
Highlights
Apr: Acquisition of ZOLL Medical
Corporation
Asahi Kasei acquired ZOLL, a major US manufac-
turer of acute critical care devices and systems, for
$2.2 billion, marking our full-scale entry into the
field.
Aug: Launch of new Hebel Haus™ series
Asahi Kasei Homes Corp. launched a new series of
Hebel Haus™ products with features for families
living with their parents and a single sibling.
44
Asahi Kasei Report 2016
Fiscal 2013
Net sales, operating income, ordinary income, and
net income all reaching record highs
The global economy gradually recovered with growth in the US and
improvement in Europe, but the management climate was obscured
by slower growth in China and other emerging economies. The
Japanese economy recovered with a correction of the overvalued
yen and a wealth effect from higher stock prices resulting in
improved corporate earnings and revived consumer spending, but
instability in the global economy remained a concern. Record-high
results were achieved as our domestic businesses such as homes
and pharmaceuticals performed well while our chemicals and elec-
tronics businesses recovered due to improved export conditions.
Net sales ¥1,897.8 billion
Ordinary
income
¥142.9 billion
Operating income
¥143.3 billion
Net income attributable
to owners of the parent ¥101.3 billion
Highlights
Apr: Start of new S-SBR plant in Singapore
A new plant for S-SBR for fuel-efficient, high-
performance tires started operation in Singapore.
Developed with our original technology, our S-SBR
is the optimal material for achieving a high-level
balance of tire performance characteristics includ-
ing good wet grip and fuel efficiency as well as
abrasion resistance and handling stability.
Jul: Approval in Japan for LifeVest™
wearable defibrillator
Approval for manufacturing and marketing of the
LifeVest™ wearable defibrillator was received in
Japan. It provides protection for patients at risk of
sudden cardiac arrest, automatically delivering a
treatment shock to restore normal heart rhythm
when a life-threatening heart rhythm is detected.
Fiscal 2014
Second year of record-high net sales, operating
income, ordinary income, and net income
While the US economy continued to recover, and slower growth
was seen in China and other emerging countries, political instabil-
ity in certain regions raised geopolitical risks. Consumer spending
in Japan softened early in the fiscal year due to the consumption
tax increase, but the Japanese economy gradually recovered later
in the fiscal year with the weaker yen and lower oil prices leading
to improved corporate performance. While construction materials
and pharmaceuticals had lower sales volumes, performance in
chemicals and critical care was strong, contributing to record-high
results for the second consecutive year.
Net sales ¥1,986.4 billion
Ordinary
income
¥166.5 billion
Operating income
¥157.9 billion
Net income attributable
to owners of the parent ¥105.7 billion
Highlights
May: Start of new production facility
for Bemberg™ cupro fiber
Our new production facility for Bemberg™ cupro
fiber started operation to meet growing demand
in the fields of functional innerwear and ethnic
garments in emerging markets.
Feb: Announcement of acquisition of
Polypore International
We announced an agreement to acquire Polypore
International to expand our battery separator
business with high growth potential and reinforce
operations in the field of the environment and
energy.
Fiscal 2015
Final year of FT2015—third consecutive year of
record-high operating income
While slower growth persisted in China, the US and Europe were
on a path of gradual recovery with increased consumer spending.
The Japanese economy saw steady consumer spending along with
firm corporate performance, but uncertainty remained regarding
the risk of further downturn in emerging economies and apprecia-
tion of the yen from the latter half of the period. Our consolidated
net sales decreased from a year ago with lower market prices for
petrochemical products in chemicals operations. Operating income
increased with firm performance in homes and critical care opera-
tions, setting a new record high for the third consecutive year.
Net sales ¥1,940.9 billion
Ordinary
income
¥161.4 billion
Operating income
¥165.2 billion
Net income attributable
to owners of the parent
¥91.8 billion
Highlights
Sep: Capacity increase for Hipore™ LIB
separator
We announced an expansion of our plant in
Moriyama, Shiga, Japan, for Hipore™ Li-ion battery
(LIB) separator to meet growing demand not only
in consumer electronics such as smartphones and
tablet PCs, but also in hybrid electric vehicles, all
electric vehicles, and other automotive applications.
Feb: Closing of our naphtha cracker
in Mizushima
Our naphtha cracker in Mizushima was unified
with the adjacent naphtha cracker of Mitsubishi
Chemical Corp. Joint operation of the unified
naphtha cracker began in April 2016.
Asahi Kasei Report 2016
45
Interview with the Executive Officer for R&D
SPECIAL FEATURE
Creating new high value
added businesses across
the Asahi Kasei Group
Evolution of new business
creation
academia, M&A, etc. In any case, we still
need our own outstanding researchers
who are capable of discerning which
outside technologies we need, and to
adapt them to suit our purposes. Having
Watabe Asahi Kasei has grown to be one
many such researchers is one of our
of Japan’s leading diversified manufactur-
ers. Tell us about your company’s heritage
of R&D.
strengths, together with our various core
technologies and business platforms
established in our diversified operations.
Nakao There are bound to be various
These enable us to access markets from
challenges along the way from the start
various angles.
of research to final commercialization.
Looking at the past decade, yes, it
I think we have a heritage of working
has taken time for our in-house R&D to
persistently to overcome the challenges
bear fruit, especially in materials. But we
to successfully advance R&D ahead of our
have made good progress with superior
competitors. Take Planova™ virus removal
new technologies which have excellent
filters for biopharmaceutical manufacture,
prospects for commercialization.
for example, or ion-exchange membrane
Watabe Asahi Kasei became an
technology for chlor-alkali production. In
operating holding company in April
both cases, the early period of develop-
2016. Did the previous holding company
ment was very tough going. But our
configuration impede the creation of new
researchers kept pressing ahead with the
businesses?
support of management that believed
Nakao We adopted the configuration
in the potential of these projects. In the
of a holding company with core operating
end we were able to create very healthy
companies 13 years ago. Since then, we
businesses.
Watabe My impression is that your
improved management efficiency with
a focus on greater cash flow as well as
in-house R&D did not sufficiently create
independence and autonomy for each
new businesses in the past decade. What
operation. This clearly brought enhanced
do you think about this?
earnings and financial strength. In other
Nakao I don’t think this is an issue just
words, we improved our ability to reap
for us; many companies have a similar
a harvest from seeds sown in the past.
challenge. Competition is becoming
Nevertheless, we came to recognize that
more intense with the rise of emerging
the previous configuration made it dif-
countries, and conventional ways of
ficult for us to fully coordinate among our
creating new business may no longer be
different businesses. This was true both
effective. Even as we continue in-house
for long-term R&D and for leveraging our
R&D, we also need to be more flexible and
diverse market channels across the Asahi
venturesome to obtain new technologies
Kasei Group. To overcome this shortcom-
externally, through collaboration with
ing, in April 2016 we consolidated our
Masafumi Nakao
Director, Primary Executive Officer;
Executive Officer for R&D
April 1978 Joined Asahi Kasei
April 2004 President, Representative Director,
Asahi Kasei Electronics Co., Ltd.
April 2006 General Manager of Research & Develop-
ment Center, Asahi Kasei EMD Corp.
April 2009 Director, Executive Officer,
Asahi Kasei Microdevices Corp.
April 2012 Lead Executive Officer,
General Manager of New Business
Development, Asahi Kasei Corp.
June 2012 Director, Lead Executive Officer,
General Manager of New Business
Development, Asahi Kasei Corp.
April 2014 Lead Executive Officer, General
Manager of Corporate Research &
Development, Asahi Kasei Corp.
April 2015 Senior Executive Officer, General
Manager of Corporate Research &
Development, Asahi Kasei Corp.
April 2016 Primary Executive Officer, Asahi Kasei Corp.
June 2016 Director, Primary Executive Officer,
Asahi Kasei Corp.
46
Asahi Kasei Report 2016
Mr. Takato Watabe, a securities analyst who covers Asahi Kasei at
Morgan Stanley MUFG Securities, asks about the creation of new
businesses as a basic strategy of the new “Cs for Tomorrow 2018”
medium-term management initiative.
material-related operations within Asahi
“farming” type of approach, cultivating
Kasei Corp., which transformed into an
a market and fostering a business based
operating holding company. Whereas
on our seeds of technology. Being able
future-oriented R&D at the holding com-
to combine the best aspects of each
pany had been performed separately from
approach is a significant strength for us.
the R&D within established businesses at
Each of the companies we acquired
each core operating company, we now
have an R&D organization that combines
during the previous medium-term
management initiative, namely ZOLL,
material-related R&D together under
Polypore, and Crystal IS, have very strong
Corporate Research & Development, in
market access. We will continue to look
coordination with the R&D sections of
for ways to more fully utilize their market
each strategic business unit (SBU). Under
channels in various other businesses. In
the new configuration, R&D with a longer
health care, for example, we are working
perspective is seamlessly connected
to achieve a higher degree of utilization
with product development peripheral to
of ZOLL’s business platform in the US,
established businesses.
the most advanced market for medical
Watabe In addition to changing your
technology.
R&D configuration, your company has
Watabe These are examples of “connec-
become more actively engaged in M&A,
tions” as mentioned in the new manage-
creating synergy with ZOLL and Polypore.
ment initiative, aren’t they?
What is your perspective?
Nakao Yes. We gain many fresh insights
Nakao Since our Polypore acquisition
by bringing different managerial perspec-
is still fairly recent, let me talk about ZOLL.
tives together. This yields much richer and
After we acquired them in 2012, we set up
deeper management discussions.
a Health Care Council comprised of ZOLL,
Asahi Kasei Corp., Asahi Kasei Pharma, and
Asahi Kasei Medical. The council meets
regularly to share information on each
business, to discuss how to create new
business, and to discuss what we need
3-axis perspective for
new business creation
to do over the longer term to build the
Watabe How do you plan to create new
Health Care sector into the third major
businesses under “Cs for Tomorrow 2018”?
pillar of the Asahi Kasei Group.
We have learned a lot from ZOLL,
Nakao In the new initiative, we are
focused on contributing to the realization
which is adept at a “hunting” type
of a “society of clean environmental
of approach that is common among
energy” and a “society of healthy/
American and European companies.
comfortable longevity with peace of
They identify a target, and then set up a
mind.” We will create new businesses by
business model to capture a market. Asahi
leveraging our strengths in technology
Kasei has traditionally succeeded with a
and operations from a 3-axis perspective.
Takato Watabe
Managing Director
Equity Research
Morgan Stanley MUFG Securities Co., Ltd.
Joined Daiwa Institute of Research in 1990.
After working at Merrill Lynch Securities,
Deutsche Securities, SMBC Nikko Securities, etc.,
assumed current position at Morgan Stanley
MUFG Securities in February 2014.
Asahi Kasei Report 2016
47
Interview with Executive Officer for R&D
SPECIAL FEATURE
The first axis is to fully utilize our market
Nakao In the field of the environment
channels. By utilizing the various market
& energy, we have been working on R&D
with various services.
Watabe Can you tell us more about your
channels that we have throughout
in anticipation of hydrogen becoming
movement toward solution-oriented
the Asahi Kasei Group, we can identify
a mainstream source of energy. At
business?
emerging market needs and develop new
the COP21 meeting in 2015, the Paris
Nakao ICT (information and com-
businesses accordingly. The second axis
Agreement was adopted as an inter-
munication technology) is changing
is to heighten added value. In addition
national framework to mitigate global
the world, and having a huge impact
to just supplying substances, which had
warming from 2020. The agreement aims
on business. A good illustration of this
been our main approach particularly in
to limit global warming to less than 2°C.
would be the business models of ZOLL.
material businesses, we will place greater
In effect this means that greenhouse gas
ZOLL began as a pioneer in defibrillators,
emphasis on building new business mod-
emissions from human activity would
and became a world leader with their
els around services and solutions. ZOLL
eventually need to be reduced to a net
core technology of resuscitation. They
has done this with its LifeVest™ business,
zero. This is an enormous challenge for
extended their business to cover the
and we will look for ways to do something
mankind, as our lives are highly depen-
whole Chain of Survival—the steps in
similar in other businesses as well. The
dent on energy from fossil fuels. But this is
the lifesaving process advocated by the
third axis is to foster and acquire core
also a huge opportunity for our company.
American Heart Association—offering
technology. While performing in-house
Hydrogen is a source of energy with no
solutions that address each step in the
R&D, we may identify an area that falls
greenhouse gas emissions. Hydrogen can
chain. ZOLL extensively utilizes ICT in their
short. In that case, we will seek an external
be produced by alkaline water electrolysis
business models. One example is the
technology that complements our own
using renewable energy such as sunlight
LifeVest™ wearable defibrillator, which is
to expedite commercialization. Our key
or wind, and then stored to be used as a
worn on a temporary basis by patients at
fields of focus to create new businesses
source of zero-emission energy. This is an
risk of sudden cardiac arrest. It continu-
and to raise the profitability of established
excellent opportunity for us. We are in a
ously monitors the patient’s heart and, if a
businesses are the environment & energy,
position to lead the world in the field of
life-threatening heart rhythm is detected,
automotive, and health care. We will
alkaline water electrolysis, by leveraging
it automatically delivers a treatment shock
leverage our strength in residential living
our world-leading ion-exchange mem-
to restore a normal rhythm. At the same
to gain synergy with new developments
brane technology. Ultimately, we hope to
time, it uses ICT to alert the physician of
in the fields of the environment & energy
not only provide materials, components,
the patient’s condition. ZOLL has many
and health care.
and systems for hydrogen production, but
other products and services that utilize
Watabe Could you give us an example of
also to expand the scope of our business
ICT. In many countries, they offer solutions
R&D in your areas of focus?
to include the provision of total solutions
that allow physicians to remotely monitor
Creation of
new businesses
Foster and acquire
core technology
Acquire technology seeds
Apply technology laterally
CVC
Coordination/
combination
Strengths of
Asahi Kasei
Utilize market
channels
Enhance and fully
utilize business platforms
Heighten
added value
Business models
Solutions
M&A
48
Asahi Kasei Report 2016
a patient’s heart, systems to manage
expenditure was 4.2% of sales. When
perspectives to identify emerging market
the dispatch of emergency services,
we look at our individual businesses,
needs. We also have various unique
and systems to connect patient data
each of them is generally in line with
core technologies that can facilitate the
between medical providers and insurance
the average for their respective industry.
creation of new businesses. The new
companies, to name a few.
However, we are flexible when it comes
corporate configuration that began in
Watabe Considering ZOLL and your
to concentrating resources on a strategic
April enables more seamless collaboration
other acquisitions, it looks like the ability
project as necessary. We view this in the
between corporate R&D and the R&D of
to discern potential is the key to success.
same way as strategic investment or
each business unit. We are already making
Nakao This is especially true of our
M&A. Sometimes we will invest more to
progress, and I look forward to achieving
acquisition of Crystal IS in the field of UVC
strengthen a certain area. So there will be
LEDs. These use compound semiconduc-
some fluctuation; we don’t just aim for a
tor technology, an area where we have
certain percentage.
many years of experience. LEDs for
lighting use compound semiconductor
technology as well, but since this field is
crowded with many players competing
fiercely, it is not attractive to us despite its
large market size. We decided to develop
A seamless R&D
configuration
concrete results.
Watabe We talked about your heritage
of innovation, diverse businesses, capable
researchers, and the ability to discern
promising opportunities over the medium
to long term. Stakeholders have high
expectations that your new configuration
will enhance your ability to create new
businesses through better connections
UVC LEDs, where the technical hurdles
Watabe What is the mission of corporate
among various businesses, with busi-
are higher. Although the timing of market
R&D towards 2025, and how does it coor-
ness retaining the independence and
uptake is uncertain, we see great growth
dinate with R&D in each business unit?
autonomy fostered under the previous
potential in various application areas for
Nakao We are focused on creating
configuration. I am looking forward to
disinfection and sterilization, replacing
distinctive new businesses with high
seeing your operations grow through
power-hungry and hazardous mercury
added value. We don’t want to play catch-
advanced innovation.
lamps. Together with Crystal IS, we are
up, but to create new markets ourselves.
determined to overcome the technical
We want these to be transformational
challenges in development, and lead the
for our business portfolio. The key is our
world in cultivating new markets.
ability to discern the potential of a new
Watabe How do you look at R&D expen-
business. By enhancing coordination with
diture for the creation of new businesses?
each business unit, we will leverage our
Nakao In fiscal 2015 our R&D
broad range of operations and diverse
R&D expenditures
87.0
81.1
75.5
71.1
71.1
66.3
62.3
(¥ billion)
90
80
70
60
0
’10
’11
’12
’13
’14
’15
’16
(planned)
(FY)
Asahi Kasei Report 2016
49
CSR
Medium-Term Management Initiative and CSR Fundamentals
The Asahi Kasei Group is focused on providing solutions to various challenges faced by society in accordance
with our Group Mission of contributing to life and living for people around the world.
Under our Cs for Tomorrow 2018 management initiative which began in fiscal 2016, we are emphasizing
business operations that contribute to a “society of clean environmental energy” and
a “society of healthy/comfortable longevity with peace of mind” based on four CSR Fundamentals:
Compliance, Responsible Care, Corporate Citizenship, and Respect for Employee Individuality.
Position of CSR Fundamentals
Creating for Tomorrow
Area of focus
The
The
employee
employee
Employee
fulfillment
The
The
community
community
Community
outreach
The
The
environment
environment
Environmental
protection
The
The
customer
customer
Customer
satisfaction
Sustainable Increase
in Corporate Value
The
The
supplier
supplier
Fair business
dealings
The local
The local
economy
economy
Local economic
participation
The
The
shareholder
shareholder
Shareholder
returns
Compliance
P. 32
Responsible Care
Society of clean
environmental energy
Pursuit of
Pursuit of
growth and
growth and
profitability
profitability
Business
operations
Creation of
Creation of
new businesses
new businesses
Society of healthy/comfortable
longevity with peace of mind
Acceleration of
Acceleration of
globalization
globalization
P. 52
“Cs for Tomorrow 2018”
strategic management initiative
CSR in Action
Respect for
Employee Individuality
CSR Fundamentals
Compliance, Responsible Care, Corporate Citizenship,
Respect for Employee Individuality
P. 56
Corporate Citizenship
Group Mission
Contributing to life and living for people around the world
P. 58
50
Asahi Kasei Report 2016
Our four CSR Fundamentals of Compliance,
Responsible Care, Corporate Citizenship, and
Respect for Employee Individuality are applied
throughout the Asahi Kasei Group.
CSR Fundamentals
Key subjects under CT2018
Goals
Identification of
compliance-related issues
Enriching the risk compliance
system
Environmental protection
Operational safety
Workplace safety and hygiene
Health maintenance
Product safety
Managing chemical substances
Dissemination of
Human Resources Principles
Developing human resources
(global human resources)
Valuing human rights and diversity
Balancing work and family life
Stakeholder dialog
• Customers
• Investors
• Suppliers
• Public outreach
Community fellowship
• Gain trust through not only thorough
compliance with laws and regulations, but
also consideration of generally accepted
social norms
• Understand risks in management, and
establish a system to mitigate them and
enable sustainable development
• Contribute to establishment of a recycling-
oriented society
• Enrich system for risk assessment
• Zero workplace injuries
• Maintain and promote employees’ health
• Enrich RC compliance
• Minimize risks from chemicals
• Employee engagement in challenging and
fulfilling work in global business operations
• Workplace environment that respects
diversity and work-life balance, enabling
employees to perform to their full potential
• Maintain good relationships with
stakeholders
• Utilize our resources to provide solutions to
challenges faced by society
Platinum Kurumin certification for
outstanding support for the devel-
opment of the next generation.
Asahi Kasei Report 2016
51
Responsible Care
CSR Fundamentals
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 RC
Masafumi Nakao
Director, Primary Executive Officer
Asahi Kasei Corp.
Asahi Kasei adopted an operating holding company configuration in fiscal 2016 at the start of
the three-year medium-term management initiative “Cs for Tomorrow 2018” (CT2018). During
fiscal 2016, we will not only implement various measures to achieve our business targets and
build the base for the next phase towards fiscal 2025, but also contribute to society through
our business operations. The operating climate is changing greatly with growing awareness for
global environmental issues and corporate responsibility as a social entity. At the Asahi Kasei
Group, in accordance with our Group Mission of contributing to life and living for people around
the world, we will give due consideration to the environment, safety, and health throughout
the full life cycle from R&D to manufacturing, product supply, and disposal, while focusing on
the three fundamental “actuals” of the actual place, actual thing, and actual fact, as we ensure
the stable provision of product quality that our customers can depend on. While working to
achieve our annual RC objectives, we will also advance RC activities from a broader perspective,
reinforcing R&D to provide solutions to global warming and other environmental issues, in
order to raise our corporate value for our various stakeholders.
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 firm 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 encompasses operations in all fields,
including homes, health care, fibers, electronics, and construction materials.
* JRCC: Operated as the Japan Chemical Industry Association’s RC Committee since April 2011.
Asahi Kasei Group RC Principles
RC at the Asahi Kasei Group is
guided by the following principles:
In April 2016, a statement
regarding quality assurance was
added, and the six elements were
condensed into four.
We give the utmost consideration to environmental protection, quality assurance, operational safety, workplace
safety and hygiene, and health maintenance, throughout the product life cycle from R&D to disposal, as
preeminent management tasks in all operations.
• We give full consideration to the global environment, and make efforts to reduce the environmental
burden of all operations.
• We continuously provide safe products and services with the quality that gives customers a sense of
security and satisfaction.
• We strive for stable and safe operation while preventing workplace accidents and securing the safety of
personnel and members of the community.
• We strive for a comfortable workplace environment, and support the maintenance and promotion of
employee health.
In addition to maintaining legal compliance, we set self-imposed targets for continuous improvement, while
performing proactive information disclosure and communication to gain public understanding and trust.
Revised on April 1, 2016
RC Management System
The management system of Asahi Kasei Group RC is
maintained in accordance with our Group RC Management
Guidelines and other internal standards. The RC Committee, a
corporate organ under the direct authority of the President of
Asahi Kasei, deliberates RC plans and results and ensures that
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.
Certified 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 certification for environ-
mental protection and ISO 9001 quality management system
certification 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 unified
implementation of RC in the respective Region.
52
Asahi Kasei Report 2016
RC objectives and results
★★★Complete ★★Satisfactory ★Unsatisfactory
FY2015 RC Objectives
FY2015 Results
Attainment
FY2016 RC Objectives
For more information, please refer to the Asahi Kasei Group CSR website.
http://www.asahi-kasei.co.jp/asahi/en/csr/
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Enhance RC compliance
Advance RC education and training
Enhance RC at affiliates
Enhance dialog with the public
Avoid all polluting accidents and minor incidents
Promote recycling-oriented society:
· Final disposal of 0.3% or less of generated industrial waste
· Recycling rate of at least 89%
Prevention of global warming:
· Reduce CO2 emissions in Japan by 25% from FY2005 level
· Reduce CO2 emissions in Japan and overseas by 5% from FY2010 level
· Reduce GHG emissions in Japan by 32% from FY2005 level
· LCA/CO2 contribution ratio1 of 7.9
Protect water resources:
· Water resource contribution ratio2 of 7.0
Control emissions of chemical substances:
· Control emissions of PRTR-specified substances
· Control emissions of air and water pollutants
Preserve biodiversity when procuring biological resources
Advance CSR procurement
Avoid all industrial accidents
Continuously monitor for hazards of fire, explosion, and leaks; perform
training of managers
Emergence of pile installation data issue at Asahi Kasei
Construction Materials; lessons applied in review of RC system
RC training course for section managers and assistant chiefs revised
Group discussions enhanced
Follow-up enhanced
RC at affiliates enhanced through instructions and support by core
operating companies
RC reports of 2 core operating companies and 8 plant complex sites
were used in community outreach
No polluting accidents, 5 intermediate incidents (including 4 freon leaks)
Goal reached with final disposal rate of 0.2%
Goal reached with recycling rate of 98%
28% reduction from FY2005 level
17% reduction from FY2010 level
35% reduction from FY2005 level
LCA/CO2 contribution ratio of 7.7
Water resource contribution ratio of 8.0
Release of PRTR-specified substances and emission of VOCs
reduced by 91% and 87%, respectively, from FY2000 level
Investigated impact of our business activities on biodiversity,
including use of new materials; no problem found
Implemented CSR procurement
No industrial accidents, 4 incidents
Review performed at time of on-site confirmation for preventing
abnormal reactions
Prevent abnormal reactions, confirm interlock functions on-site
Confirmed progress in preventing abnormal reactions and securing
interlock functions
★
Review RC framework (including quality assurance)
Enhance RC compliance
★★
Advance RC education and training
★★★ Enhance RC at affiliates
★★★ Continue to enhance dialog with the public
★
★★★
★★
★★★
★★★
Avoid all polluting accidents and minor incidents
Promote recycling-oriented society:
· Maintain rate of final disposal at 0.3% or less of generated industrial waste
· Maintain recycling rate of at least 90%
Prevention of global warming:
· Reduce CO2 emissions in Japan by 28% from FY2005 level
· Reduce CO2 emissions in Japan and overseas by 5% from FY2010 level
· Reduce GHG emissions in Japan by 35% from FY2005 level
· Achieve LCA/CO2 contribution ratio of 8.1
Protect water resources:
· Water resource contribution ratio of 8.3
Control emissions of chemical substances:
· Control emissions of PRTR specified substances
· Control emissions of air and water pollutants
★★★ Promote preservation of biodiversity at each site
★★★ Advance CSR procurement
★★
★★★
★★★
Continue to avoid all industrial accidents
Enhance risk assessment:
· Continuously monitor for hazards of fire, explosion, and leaks
· Continue ongoing review to prevent abnormal reactions and confirm
interlock functions
· Enhance pre-investment safety assessment system
Control confirmed at RC Audits, etc.
★★★ Control changes to equipment and operating conditions
Control changes to equipment and operating conditions
Review earthquake response and enhance emergency response systems:
· Confirm seismic resistance of high-pressure gas facilities and formulate
plans
· Implement seismic retrofitting for specific and non-specific buildings
Monitor for items in need of replacement and uninspected items,
implement remediation
Avoid all workplace injuries:
· Achieve frequency rate3 of 0.1 or less
· Achieve severity rate4 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 machinery” category:
· No lost-workday injury due to “caught in/between machinery” accidents
Avoid fire, explosion, chemical burn, poisoning, etc. related to chemical
substances:
Completed according to the plan
Delay in some retrofitting for FY2016
Ongoing review with new perspectives
0.28
0.004
Improvement in reducing latent risk confirmed at audit
Improvement confirmed at audit with reference to internal audit records
Improvement of risk level confirmed at audit
Compliance confirmed at audit
Zero lost-workday injuries; contributive effect from mechanical
equipment improvement and risk assessment
· Zero lost-workday injuries related to chemical substances
1 injury
Prevent injuries during working hours unrelated to operating procedures
and during commuting:
· Prevent lost-workday injury related to stairways
3 injuries
Enhance safety management guidance of on-site contractors:
· Enhance safety management structure as the contracting manufacturer Status and continuous improvement confirmed at audit
· 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 countermeasures to lifestyle-related
diseases
· Prevent falls
Promote countermeasures to mental health issues and enhance support
system:
· Implement company-wide stress survey, utilize its results,
and perform follow-up
Develop the health management system:
· Resolve critical tasks at each site with lateral extension
· Establish the health management system at affiliates and independent
plants
d
n
a
y
t
e
f
a
s
t
c
u
d
o
r
P
f
o
t
n
e
m
e
g
a
n
a
m
e
c
n
a
t
s
b
u
s
l
a
c
i
m
e
h
c
s 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 JIPS5 activities
· Promote JAMP6 tools
Safety management guidance at each site and continuous
improvement confirmed
Progress confirmed at audit; 1 lasting injury from equipment work
Proportion of personnel with health warning signs and ratio of
employees who smoke generally unchanged; slight increase in
employees with obesity
Physical fitness tests performed as part of fall prevention program,
follow-up implemented
Stress survey and follow-up implemented
Held internal meetings and interviews on health management activities
Specialist industrial physicians supporting affiliates and
independent plants
No product safety incidents
Compliance maintained and system enhanced
Continued risk assessment and public disclosure of safety documents
Provided and received information via MSDSplus and AIS,
participated in verification of new JAMP-IT tools
n
i
g
n
i
v
i
L
d
n
a
h
t
l
a
e
h
t
r
o
f
m
o
c
Number of people our health care business contributed to:
· 40% increase from FY2010 level
Number of residents in Hebel Haus™ homes:
· 20% increase from FY2010 level
1% increase from FY2010 level
20% increase from FY2010 level
★★
★★★
★★★
★
★
★★★
★★
★★★
Enhance earthquake response system:
· Review earthquake preparedness
(emergency facilities, disaster response supplies)
★★
· Advance seismic retrofitting of specific and non-specific buildings
★★★ Monitor for items in need of replacement and uninspected items,
implement remediation
Avoid all workplace injuries:
· Achieve frequency rate of 0.1 or less
· Achieve severity rate of 0.005 or less
Deepen utilization of OHSMS:
· Enhance risk assessment for workplace tasks
Avoid all accidents in “caught in/between machinery” category
(zero lost-workday injuries):
· Perform sound risk assessment for mechanical equipment
Avoid chemical injury, poisoning, fire, explosion, etc. related to chemical
substances (zero lost-workday injuries):
· Perform sound risk assessment for chemical substances
· Perform sound management of workplace environment
Prevent injuries during working hours unrelated to operating procedures
and during commuting:
· Prevent lost-workday injury related to stairways and walking
· Prevent traffic accidents resulting in harm to self or others
while commuting or traveling for sales
Enhance safety management guidance of on-site contractors:
· No serious accident of on-site contractors
Reinforce management of safety on equipment work:
· No serious accident of equipment workers
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:
· Implement company-wide stress survey, utilize its results,
and perform follow-up
Develop the health management system:
· Resolve critical tasks at each site with lateral extension
· Establish the health management system at affiliates and independent
plants
★★★ Maintain zero 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:
· FY2018 objective: maintain FY2015 level
Number of residents in Hebel Haus™ homes:
· FY2018 objective: 10% increase from FY2015 level
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 Kasei Group.
2 The water resource contribution ratio is calculated by adding up the total quantity of water clarified and recycled using Asahi Kasei filtration 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.
5 Japan Initiative of Product Stewardship: A chemical industry initiative promoted by the Japan Chemical Industry Association to minimize chemical risks through voluntary risk assessment and management.
6 Joint Article Management Promotion-consortium.
Asahi Kasei Report 2016
53
Responsible Care
Environmental protection
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 indicators and targets to curtail greenhouse gas emissions to be achieved by fiscal
2020 and fiscal 2030. Regarding promotion of a recycling-oriented society, we continue to reduce our rate of final disposal
and increase our rate of recycling. 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.
The Asahi Kasei Group’s quantitative indicators and targets to curtail global warming (building a low-carbon society)
Reduction in CO2 emissions
Reduction in GHG emissions
Clean power generation
LCA/CO2 contribution ratio
• Reduce CO2 emissions in Japan
to 30% below the FY2005 level by
FY2020
• Reduce CO2 emissions in Japan
and overseas to 5% below the
FY2010 level by FY2020
• Reduce GHG emissions in Japan
to 35% below the FY2005 level
by FY2020
• Reduce GHG emissions in Japan
to 10% below the FY2013 level
by FY2030
• New coal-fired power plants must meet certain
criteria (criteria disclosed on our website)
• Maintain use of biomass fuel at 60% or more
by energy content in mixed combustion at the
biomass power plant in Nobeoka
• Achieve a ratio of 10.0 in
FY2020 (3.2 in FY2010)
• Achieve a ratio of 15.0 in
FY2030
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
operational accidents through risk assessments prior to the construction of new plants, periodic inspections of existing plants
performed by auditors specialized in fire 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 fiscal 2013, we completed a program of on-site confirmation
to identify hazards from the perspective of preventing abnor-
mal reactions and ensuring interlock functions. From fiscal
2013 onwards, we have been preparing technical documents
on items with a high degree of hazard and on accidents and
problems which occurred in the past. From fiscal 2015, we
are implementing education and training for managers and
operators to enable them to properly identify the cause and
take appropriate action if problems occur, including problems
that have not been previously encountered. There were no
operational accidents during fiscal 2015.
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/orderli-
ness/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.
Integration of workplace safety initiatives
Conventional safety initiatives
Risk assessments
PDCA management system
OHSMS
* Occupational Health and Safety Management System. A standardized system used
to confirm that continuous improvement is being applied to measures to minimize
the risks of workplace injuries and to prevent the emergence of future risks.
54
Asahi Kasei Report 2016
Occurrence of workplace injuries
Incidence of lost-workday
injury by event category,
FY2015 in Japan
Total
15 cases
Incidence of lost-workday
injury by event category,
FY2005–2014 in Japan
Total
117 cases
Fall on same level
Fall from height
Kickback/overexertion
Contact with harmful
substance
Others
Traffic accident
33%
13%
13%
7%
7%
27%
Caught in/between machinery
Caught in something else
Fall on same level
Fall from height
Kickback/overexertion
Fire
Explosion or rupture
Contact with high-temperature
substance/object
Hit by flying/falling object
Others
Traffic accident
15%
3%
19%
13%
12%
1%
2%
5%
3%
5%
23%
For more information, please refer to the Asahi Kasei Group CSR website.
http://www.asahi-kasei.co.jp/asahi/en/csr/
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
During fiscal 2015, interviews to monitor the effectiveness
of the health management centers were performed at 7
sites. The series of interviews launched in fiscal 2014 confirm
whether the activities at each site, including the duties of our
industrial physicians and health nurses, are being performed in
accordance with the Industrial Safety and Health Law and our
health management guidelines. Further guidance and support
is being provided as necessary.
Quality assurance
Upon our transition to an operating holding company configuration in April 2016, Corporate ESH & QA was reorganized,
including the establishment of a new Quality Assurance Group, to place greater emphasis on quality assurance to deliver safe
and reliable products to our customers. In fiscal 2015, we once again met our target of no serious product safety incidents.
Asahi Kasei Group Quality Policy
The Asahi Kasei Group creates and provides products
and services with the quality to meet the needs of
customers and society and ensure safety and security.
Reinforcing the quality assurance system:
maintaining zero serious product safety incidents
Consumer satisfaction and safety
Products and services provided by the Asahi Kasei Group
include materials, products, installations, various services, and
after-sales support. We believe that providing products and
services that satisfy our customers is our ultimate mission. We
constantly strive to enhance our systems for quality assurance,
including product safety.
Effort to maintain zero serious product safety incidents
As part of the effort to prevent serious product safety
incidents, we established new quality assurance bylaws that
stipulate quality assurance activities for RC administrators to
perform. The bylaws newly define the central role of quality
assurance managers in activities to enhance quality assurance,
and are applied in concert with our product safety guidelines
to secure product safety and prevent the occurrence of serious
product safety incidents.
All business units of the Asahi Kasei Group apply these uni-
form bylaws and guidelines to assure the quality of products
and services.
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 (including intermediates), use, and disposal.
The Asahi Kasei Group’s effort
Strict management and control of chemical substances is a
key element in the effort to ensure environmental protection,
operational safety, workplace safety and hygiene, health
maintenance, and product safety. Chemical substances
are managed at each stage from development to use and
disposal. The management of chemical substances begins
with R&D, which is guided throughout every stage by a com-
mitment to developing products and process characterized by
safe, environmentally sound production, handling, and use.
Industry-wide initiatives
Joint Article Management Program (JAMP)
As an active member of JAMP, we participate in the develop-
ment of systems to manage chemical substance information
as well as revision of the list of applicable substances. As an
upstream company, we also convey relevant information
throughout the supply chain to help establish JAMP as a
widely used tool.
In fiscal 2015, we continued to provide JAMP Tools via the
JAMP-IT platform to convey relevant information on hazard-
ous chemicals and share information externally. As a major
upstream company, we will continue to work with the JAMP
Office toward the greater adoption of the JAMP-IT platform as
a means of information sharing. We also took part in verifica-
tion of information transmission tools for a new scheme called
“chemSHERPA” promoted by the Ministry of Economy, Trade
and Industry, and actively participated in detailed discussions
about the new tools and the list of chemical substances. We
are also working on the transition process from the current
JAMP scheme to chemSHERPA which will be performed over
two years from fiscal 2016.
Asahi Kasei Report 2016
55
CSR Fundamentals
Respect for Employee Individuality
The Asahi Kasei Group considers fulfilling and satisfying working conditions and
workplace culture, in which personnel feel motivated to achieve and take pride in their
career, to be a 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
fulfilling 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
A wide range of training programs
Employees are given a wide range of training to develop the skills
needed to successfully advance their careers. A regular program
of training is applied throughout the Asahi Kasei Group at key
career stages—upon hiring, promotion to manager, promotion
to department general manager, promotion to division general
manager, and appointment to an executive position. From fiscal
2016 we are placing greater emphasis on “Management by
Objectives” training to enhance the management skills of section
managers and general managers. Other individual training
programs such as for global management are implemented
according to business need. Each core operating company also
implements training programs to support the development of
employee skills required for its specific field of business.
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 May
2016, 86 Group Masters are designated: 1 as a Group Fellow,
23 as Senior Group Experts, and 62 as Group Experts, with
rank and remuneration commensurate with senior general
manager, general manager, and section manager, respectively.
Development of global human resources
To support the expansion of world-leading businesses from
the perspective of human resources, we are implementing
measures such as internship programs for young personnel,
and holding training sessions for personnel at overseas
subsidiaries on subjects such as dissemination of corporate
philosophy and intercultural communication.
Valuing human rights and diversity
Basic policy
Human Resources 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.
Hiring
The Asahi Kasei Group is working to create new value for
society by enabling living in health and comfort and harmony
with the natural environment. We strive to hire motivated and
56
Asahi Kasei Report 2016
capable personnel who will successfully execute our strategy
on a global scale.
We continue to hire university graduates of foreign nation-
ality every year, and the overall makeup of our personnel is
becoming more global. We are also strengthening our ties to
universities both in Japan and overseas, through career brief-
ing sessions and student internships, as part of an ongoing
effort to attract talent.
In April 2016, 351 new graduates were hired: 272 men and
79 women. In addition, 71 persons were hired in mid-career
between April 2015 and March 2016.
For more information, please refer to the Asahi Kasei Group CSR website.
http://www.asahi-kasei.co.jp/asahi/en/csr/
Expansion of opportunities for women
In 1993, we established a dedicated corporate organ (now
Diversity Promotion Group) to promote equal opportunity,
and have proactively increased the proportion of women hired
and expanded the distribution of job assignments for women.
While only five employees at the rank of manager or above were
women in 1993, this has risen to 500 in June 2016. In fiscal 2016,
we also formulated an action plan and targets in accordance
with the Act to Advance Women’s Success in Their Working Life.
Number of women as managers*
500
500
454
410
344
370
400
300
200
100
0
Employment of persons with disabilities
Asahi Kasei Ability Corp. was established in 1985 for the
employment of persons with disabilities, performing a wide
range of services for the Asahi Kasei Group. The employment
rate at applicable companies of the Asahi Kasei Group was
2.12% (529.0 persons) as of June 1, 2016, exceeding the legal
requirement.
Rate of employment of persons with disabilities
at applicable Group companies*
Asahi Kasei Group
Legal minimum
2.12
2.08
2.05
1.98
2.12
2.00
(%)
2.2
2.1
2.0
1.9
1.8
1.7
’12/6
’13/6
’14/6
’15/6
’16/6
’12/6
’13/6
’14/6
’15/6
’16/6
* Results as of June 30 each year for personnel employed by Asahi Kasei Corp.,
Asahi Kasei Microdevices Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction
Materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. (Asahi
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., Asahi Kasei E-materials Corp. are
included up to June 30, 2015).
* Results as of June 1 each year at applicable Group companies. Calculation based on
total employment of 25,000.5 persons in the 21 applicable companies. As of June 1,
2016, the number of persons with disabilities employed by Asahi Kasei Ability Corp.
stood at 334.0 of the total 529.0 employees with disabilities. Calculated in accor-
dance with the Act on Employment Promotion etc. of Persons with Disabilities.
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 fiscal year in which
the child turns three years old. In fiscal 2015, 556 personnel
utilized parental leave. This is included 316 men, which is 40%
of those who were qualified, and 240 women.
Employees using parental leave*
Women
Men
240
242
212
190
235 233
226 231
240
316
330
220
110
0
’11
’12
’13
’14
’15
(FY)
* 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.
Shortened working hours for child care
Personnel are able to utilize shortened working hours to care
for preschoolers, with the working day shortened by up to 2
hours until the child enters elementary school. In September
2007, a provision called “Kids Support” was added to enable
personnel with children in the first and second grades to work
shortened hours as well. These provisions may be used con-
currently with a “flex-time” system for flexible working hours.
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 fiscal 2013 we adopted a provision for such
personnel to take a leave of absence to accompany their
spouses living overseas. In fiscal 2015, 10 personnel utilized
this provision.
Platinum Kurumin certification mark
In 2016, we received the Platinum Kurumin
certification mark from the Ministry of Health,
Labour and Welfare.* Platinum Kurumin
certification is awarded in recognition of
proactive support for the development of
the next generation which is superior to the
previously received Kurumin certification.
* Certification received for Asahi Kasei Corp., Asahi Kasei Homes Corp., Asahi Kasei
Microdevices Corp., Asahi Kasei Pharma Corp., Asahi Kasei Medical Co., Ltd., and
Asahi Kasei Ability Corp. Asahi Kasei Ability Corp. is the first company in Miyazaki
prefecture to receive Platinum Kurumin certification.
Asahi Kasei Report 2016
57
Corporate Citizenship
CSR Fundamentals
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.
• Issuing news releases
• Holding news
conferences
• Issuing documents for
information disclosure
• Website disclosure of
information
• Responding to CSR-
related questionnaires
• Promoting for social
contribution activities
• Issuing news releases
• Holding news
conferences
• Website disclosure of
information
• Face-to-face discussion
by marketing and sales
personnel
• Taking inquiries via
telephone, website, etc.
• Meeting with
securities analysts and
institutional investors
• Seminars for Individual
investors
• Website disclosure of
information
• Taking inquiries via
telephone, website, etc.
Purchasing and logistics
sections, environment
and safety sections at
production sites
General affairs and
administration sections
at production sites
• Safety discussion
forums
• Information exchange
forums
• Periodic community
dialog meetings
• Community outreach
initiatives
Customer relations
Investor Relations
Principled supplier
relationships
Public outreach
Asahi Kasei Group
Customer relations
We believe that it is by maintaining customer satisfaction that our products and services contribute to society.
For materials, intermediates, and devices, communication with our customers is handled by the sales and technical
support departments of each business unit. For end products and housing, communication with our customers is
handled by the customer support center of each product.
Investor Relations
We strive to disclose information in a timely and fair manner to enable our domestic and
international investors to gain an accurate understanding of the Asahi Kasei Group.
Shareholder distribution
Information on shareholder distribution is available in the
Corporate Citizenship section of our CSR website.
IR meetings with institutional investors and securities analysts
Investor Relations (IR) regularly holds meetings with institu-
tional investors and securities analysts in Japan and overseas,
including quarterly results briefings and an annual manage-
ment briefing with the President.
In fiscal 2015, business briefings were held with the aim of
deepening understanding among institutional investors and
securities analysts regarding key businesses of Asahi Kasei. We
also provide a wide variety of information for investors on our
website.
Seminars for individual investors
We hold various seminars to provide individual investors with
a better understanding of the operations of the Asahi Kasei
Group. We will continue to provide accurate and timely infor-
mation to individual investors through direct communications,
the corporate website, and articles published in magazines for
individual investors.
58
Asahi Kasei Report 2016
For more information, please refer to the Asahi Kasei Group CSR website.
http://www.asahi-kasei.co.jp/asahi/en/csr/
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.
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.
Each year we conduct a survey of suppliers to help foster
greater awareness of the importance of CSR issues.
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.
Many of our major plants offer plant tours to provide the local
community with a better understanding of our operations
and the measures we implement for the environment and
safety. Measures for community dialog and interaction include
regularly held forums and meetings with representatives of
local governments and members of local residents associa-
tions. We also open our gymnasiums, sports fields, parking lots,
and other facilities for public use and enjoyment, and host a
variety of events.
Community fellowship
The Community Fellowship Committee is organized under direct supervision of the President
of Asahi Kasei. Its roles include formulation of overall policy, plans, and courses of action in
regard to community fellowship activities. The Committee also monitors and reviews com-
munity fellowship activities at each site and at each affiliated company of the Asahi Kasei Group. Under our Community
Fellowship Policy, we are involved in a wide range of community-focused activities in accordance with the three themes
of Nurturing the Next Generation, Coexistence with the Environment, and Promotion of Culture, Art, and Sports.
We participate in the One-Percent Club of the Keidanren
(Japan Business Federation), and convert our social contribu-
tion activities into monetary value by a method set forth in
its annual Survey of Expenditure for Corporate Philanthropic
Activities. In fiscal 2014, this was ¥1.299 billion.
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 host visits by junior
high and high school students to our corporate head office. Such
activities were held 94 times in fiscal 2015, with a total of some
2,650 students of 91 schools participating. In August 2015, we
held a laboratory tour for female high school students, together
with informal discussion with our researchers, as part of our effort
to foster interest in careers in science and technology among
young women. We also sponsor educational events including
science competitions and environmental education programs
organized by newspaper companies, exhibit at science and
chemistry events, and have a partnership with National Museum
of Emerging Science and Innovation (Miraikan).
Coexistence with the Environment
In addition to our afforestation activities in Miyazaki and
Shizuoka, we participate in an afforestation project in the
Horqin Desert of Inner Mongolia, China. We also exhibit at
environmental-related events, and work to raise understand-
ing of environmental issues.
Disaster relief
We participate in a Disaster Relief Market featuring produce of
the areas affected by the Great East Japan Earthquake.
Following the Kumamoto earthquakes in 2016, we
donated ¥50 million to the Kumamoto prefectural govern-
ment to support people in affected areas. We also decided
to donate 100,000 rolls of Saran Wrap™ cling film to support
people living in evacuation shelters.
Promotion of Culture, Art, and Sports
Members of our corporate distance running and judo teams
have competed in the Olympics a total of some 50 times. In
Nobeoka, Miyazaki, where the teams are based, we host a
major track event, and hold running and judo lessons for the
local youth. 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.
Asahi Kasei Report 2016
59
Connecting Business Operations with Contribution to Society
CONNECTION
1
Bemberg™
Participation in Business Call to Action led
by United Nations Development Programme:
For sustainable development of India’s fiber industry
Young women keep their eyes fixed on saris and dupattas that are woven from Asahi
Kasei’s Bemberg™ cupro regenerated cellulose fiber. They are pleasantly soft, drape
comfortably on the skin, and have colorful patterns. This is a university classroom in India
where students are studying fashion. Bemberg™ is the subject of the lecture.
Bemberg™ is the brand name for cupro. It is a regenerated cellulose fiber made from
cotton linter—the short downy fibers on cotton seeds—featuring a luxurious silky feel,
moisture absorption/release, and superior comfort. Being made from material of natural
origin, it is an environmentally compatible fiber. Indian saris and other ethnic garments
are traditionally made from silk. But silk is difficult to handle, and quite expensive. Asahi
Kasei realized that Bemberg™ would be a good alternative to silk for saris and dupattas,
and began selling it in India 40 years ago. Today, saris and other ethnic garments made of
Bemberg™ are worn by many women.
In developing the Bemberg™ business in India, Asahi Kasei became involved both
directly and indirectly in the value chain from raw material to finished fabric. In order
to empower the local residents through their active participation in business activities,
Asahi Kasei has worked to help them develop skills, secure stable income, and create new
business opportunities. Asahi Kasei also focuses on fostering young talent that will lead
the future of India’s fiber industry and fashion industry, providing support for university
education to develop the potential of the next generation.
In May 2015, Asahi Kasei joined the Business Call to Action (BCtA)1 led by the United
Nations Development Programme2, and has been promoting inclusive business with
Bemberg™ fiber. “Although corporate growth and profitability are important, in today’s
society a company can no longer act as a single entity seeking only its own benefits. To
pursue sustainable development, a company also needs to promote initiatives that facili-
tate the well-being of local residents as well as the development of the community. That
is the key to sustainable development of a business,” says Takehiro Kamiyama, General
Manager of Bemberg Sales Dept. 2 in Asahi Kasei’s Fibers & Textiles SBU.
Day by day, Asahi Kasei’s Bemberg™ business is helping India’s fiber industry achieve
sustainable development, while contributing to the local community.
1 Business Call to Action (BCtA):
BCtA is a unique multilateral alliance by four donor governments and the United Nations Development
Programme (UNDP) which hosts the secretariat. BCtA challenges companies to advance core business
activities that are inclusive of poor populations and contribute to the achievement of the Sustainable
Development Goals (SDGs). Worldwide, 137 companies, from SMEs to multinationals, have responded to
the BCtA by making commitments to improve the lives and livelihoods of millions through commercially-
viable business ventures that engage low-income people as consumers, producers, suppliers, and
distributors of goods and services.
2 United Nations Development Programme (UNDP):
UNDP was founded in 1966 as one of the United Nation’s subsidiary bodies
under the UN General Assembly and the UN Economic and Social Council.
Headquartered in New York, UNDP provides development assistance in
nearly 170 countries with focuses on sustainable development; democratic
governance and peacebuilding; and climate and disaster resilience.
60
Asahi Kasei Report 2016
1
Highlight
Bemberg™ business initiatives in India
We currently procure from India some
one-third of the cotton linter used for the
production of cupro yarn. To support local
producers, we loan equipment to collect
cotton linter free of charge, and have
engineers stationed in India to provide the
local workers with training and technical
instructions for improving productivity.
Cotton linter imported to Japan is pro-
cessed into cupro yarn, which is exported
to India and sold to weavers. We also
provide continuing technical guidance on
weaving and dyeing in the fabric produc-
tion process in India.
We also focus on the education of young
people and students who will lead the
next generation of India’s fiber industry
and fashion industry, and contribute to
human resource development by support-
ing the enhancement of skills at several
Indian universities.
2
3
Sales of Bemberg™ in India
(tons)
4,437
Robust
growth
515
2000
2015
6
1976
Demand for ethnic garments in India
(million garments)
2,029
1,720
1,596
1,729
1,798
1,918
Saris
76
72
88
98
103
109
Dupattas
2007
2008
2009
2010
2011
2012
1 Education at a fashion university 2 Providing technical guidance for inspecting collected linter 3 Providing technical guidance for dyeing fabric
Female Indian students studying Bemberg™ business in Japan
Two female students majoring in Textile Design at India’s National Institute of Design
(NID), one undergraduate and one graduate student, came to Japan as interns of Asahi
Kasei for six weeks from June 2016. The internship covered a wide range of subjects,
including the production of Bemberg™ and examples of its use in its fabric. Professor
Srivastava Aarti of NID, who accompanied the students, said, “Bemberg™ is a wonderful
alternative to silk, it’s cool and has a soft feel. As a textile designer myself, I really want to
use this material.”
The interns visit Asahi Kasei’s Bemberg™ lining showroom
in Tokyo
Asahi Kasei Report 2016
61
Connecting Business Operations with Contribution to Society
CONNECTION
2
Condominium
Redevelopment
Providing a solution to the social issue of aging condominiums
by persistently maintaining sincerity with the residents
Several elderly women chat enjoyably in the 1st floor lobby of the newly built condo-
minium. Some men are reading in the residents’ library. The symbolic tree stretches its
branches across the courtyard, slowly passing the time.
This is the Atlas Ikejiri Residence, completed in 2014 by Asahi Kasei Realty & Residence
Corp. to replace the Ikejiri Danchi housing complex located here in Tokyo’s Setagaya
Ward. Ikejiri Danchi included shops and offices in addition to residential units, and
featured excellent transport access, but the aging structure had inadequate earthquake
resistance. Although talk about rebuilding it began as early as 1993, concrete plans failed
to materialize for many years due to the complex relationship of ownership and lease
rights among the various residents and tenants. The structure continued to age further
with no resolution in sight until Asahi Kasei came to carefully listen to the assorted views
of each party, and successfully craft a proposal for rebuilding that was deemed accept-
able among the many concerned parties.
Aging condominiums are a challenging social issue for Japanese society. The supply
of residential units in multi-dwelling structures swelled from the 1970s—including both
commercially developed condominiums and publicly operated housing complexes—and
condominium life became common in major urban areas. There are now over 6 million
condominium units in Japan, and some 14 million people, over 1/10 of the population,
live in condominiums. But over 1 million of these units are in buildings that do not meet
the latest earthquake-resistance standards, and in many cases the older buildings are
deteriorating beyond their age due to inadequate maintenance.
While rebuilding such older structures would greatly contribute to the safety and
security of the community, there are difficult challenges to overcome. Many residents and
other parties with fractional ownership rights are retirees who are unable or unwilling to
make a large investment in a project to rebuild. Although amendments to relevant laws
and regulations have made it easier in principle to obtain agreement to rebuild, progress
has been generally slow. To craft a complex proposal that meets the various needs of
the many interested parties is a time-consuming process that requires persistence.
Many developers simply decided that there would not be a sufficient financial return
to justify such effort.
Asahi Kasei began tackling this challenge 15 years ago, leveraging the experience
and know-how gained in its housing business to sincerely appreciate the needs of
each concerned party, and to craft an acceptable proposal. Having successfully
completed many such condominium redevelopment projects, the company is
contributing to a comfortable life with peace of mind for a large number of
people, with residential environments featuring not only outstanding
earthquake resistance but also barrier-free functionality and many shared
facilities to foster a greater sense of community among residents.
62
Asahi Kasei Report 2016
1
Highlight
Notable housing complex redevelopments by Asahi Kasei Realty & Residence Corp.
Dojunkai Edogawa Apartment Complex, redeveloped as Atlas Edogawa
Apartment Complex (Shinjuku Ward, Tokyo)
Achieved a redevelopment which had been in planning for 30 years
Suwacho Housing Complex, redeveloped as Atlas Suwacho Residence
(Shinjuku Ward, Tokyo)
The first successful redevelopment under the amended law
Kokuryo Housing Complex, redeveloped as Atlas Kokuryo (Chofu City, Tokyo)
The first redevelopment to remove the legal designation of a housing complex
Ikejiri Danchi, redeveloped as Atlas Ikejiri Residence (Setagaya Ward, Tokyo)
Successful redevelopment overcoming coexistence of ownership rights and
lease rights
Chofu Fuijimicho Housing Complex, redeveloped as Atlas Chofu (Chofu City, Tokyo)
Redevelopment removing the legal designation of a housing complex and
repositioning a public road
d e v e l o p e d
e
R
2
Condominiums in Japan (thousand units)
Redevelopment
demand
5,057
1,061
227227227
6,233
Total
Number built under
former earthquake-
resistance standard
53
118118118
103103103
Newly
built
1968
1981
2007
2015
Condominiums in Tokyo
constructed at least 40
years earlier (thousand units)
428428428
126126126
Source: Land Statistical Survey by Ministry
of Internal Affairs and Communications/
Housing Starts Statistics by Tokyo
Metropolitan Government Bureau of
Urban Development
126126126
262626
100100100
26
545454
545454
246246246
545454
192192192
302302302
2003
2008
2013
2018
2023
at least 50
years earlier
40–49 years
earlier
1 Atlas Ikejiri Residence 2 The former Ikejiri Danchi
Condominium Redevelopment Research Center
The Condominium Redevelopment Research Center of Asahi Kasei Realty & Residence Corp. serves as the central base for know-how to
flexibly apply to individual projects. Mr. Yugo Ohki, who spent many years in the condominium redevelopment business puts it this way,
“Redeveloping a condominium requires a detailed understanding of each individual resident’s feelings, their wants, and their needs. Many
people have fractional ownership of the structure, and they all have different individual circumstances. I apply my years of experience to come
up with a proposal that various different parties can accept. By replacing an old worn-out building with a new one, we contribute to the safety
and security of the community, which creates value for society.”
Asahi Kasei Report 2016
63
Connecting Business Operations with Contribution to Society
CONNECTION
3
AEDs
Aiming to reduce deaths from sudden cardiac arrest,
teaching the youth the importance of life-saving action
Elementary school students gathered around a manikin on the floor are practicing
cardiopulmonary resuscitation (CPR) and learning how to use an automated external
defibrillator (AED). “Push harder!” “It’s not easy.” “I did it!” Employees of Asahi Kasei ZOLL
Medical Corp. are helping to teach the children how to save a life using an AED, and what
to do until the ambulance arrives. “What would you do if one of your friends collapsed
while playing?” The students are prompted to consider this seriously, realizing that it
could really happen.
AEDs became available for use by the general public in Japan in 2004, but most
people would not be confident in using one if they suddenly needed to. In 2011, an
elementary school girl in Saitama prefecture became the victim of sudden cardiac arrest.
Even though the school had an AED, nobody used it. This tragic case prompted various
initiatives to raise general awareness and confidence in AED use. In 2014, Asahi Kasei
ZOLL Medical Corp. began to help educate elementary school students about AEDs using
hands-on demonstrations together while distributing an easy-to-understand booklet.
Ms. Sumie Ikeda of Asahi Kasei ZOLL Medical Corp. says, “Although AEDs are available
in many public places in Japan, they are actually used only very seldom. This booklet
helps make AEDs familiar to kids at an early age, so they can be prepared to use one if
the need arises later in life. To really help save more lives means not only making AEDs
available in more places, but also raising familiarity and confidence with AEDs among
the general public. When sudden cardiac arrest strikes, every second matters. We want
people to be able to act without hesitation when needed.”
In addition to helping to educate the youth about AEDs, Asahi Kasei ZOLL Medical
Corp. also loans AEDs free of charge at marathons and other events, and holds training
sessions and demonstrations in connection with them. Through such efforts, the com-
pany continues to strive to help reduce deaths from sudden cardiac arrest.
Highlight
64
Asahi Kasei Report 2016
Support for marathons and other events
ZOLL Foundation
Asahi Kasei ZOLL Medical
Corp. loans AEDs free
of charge and holds
training sessions and
demonstrations at
several marathons and
other events throughout
Japan.
AEDs loaned free of charge in fiscal 2015
• May 2015 Gifu Seiryu Half-Marathon Race,
75 AEDs
• May 2015 Tohoku Rokkon Festival, 15 AEDs
• Nov 2015 Ibigawa Marathon, 78 AEDs
• Feb 2016
Nobeoka Nishinippon Marathon,
8 AEDs
• Mar 2016 Itabashi City Marathon, 50 AEDs
• Mar 2016 Kagoshima Marathon, 60 AEDs
ZOLL Medical Corporation, parent company of Asahi Kasei ZOLL Medical
Corp., established the ZOLL Foundation in December 2013 as an
independent entity organized for scientific and educational purposes.
The ZOLL Foundation provides 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. In fiscal 2015, grants were provided to the University of
Pittsburgh, the University of Pennsylvania, and the University of Toronto.
Public accessibility of AEDs in Japan
(AED units)
636,007
Increasing
accessibility
395,823
137,569
7,361
2004
2007
2011
2014
Lives saved with AEDs in Japan (cases)
Source: FY2015 Edition Fire and Disaster
White Paper by Ministry of Internal
Affairs and Communications, Situation
of Emergency Care and Rescue
People who witnessed
cardiogenic cardiopul-
monary arrest in public
17,882
20,769
23,296
25,255
46
2005
429
2008
738
1,030
Cases of general
public using AEDs
2011
2014
Asahi Kasei Report 2016
65
AED booklet for elementary school students
The booklet was produced to be easy to
understand by the intended audience
of elementary students. Professor Taku
Iwami of Kyoto University served as chief
editor. While being easy to understand,
the booklet retains detailed accuracy. It is
informative for adults as well as students.
• What to do if someone suddenly collapses
• How to call an ambulance
• How to perform CPR
• How to use an AED
• How AEDs work and where they are
66
Asahi Kasei Report 2016
Financial Section
Contents
68 Management’s Discussion and Analysis
74 Risk Analysis
76 Consolidated Financial Statements
76 Consolidated Balance Sheets
78 Consolidated Statements of Income
79 Consolidated Statements of Comprehensive Income
80 Consolidated Statements of Changes in Net Assets
81 Consolidated Statements of Cash Flows
82 Notes to Consolidated Financial Statements
82 1. Major policies for preparing the consolidated financial statements
82 2. Significant accounting policies
83 3. Changes in significant accounting policies
84 4. Notes to Consolidated Balance Sheets
85 5. Notes to Consolidated Statements of Income
87 6. Notes to Consolidated Statements of Comprehensive Income
87 7. Notes to Consolidated Statements of Changes in Net Assets
89 8. Notes to Consolidated Statements of Cash Flows
89 9. Leases
90 10. Financial instruments
93 11. Marketable securities and investment securities
94 12. Derivative financial instruments
97 13. Provision for retirement benefits
99 14. Taxes
100 15. Business combinations
102 16. Asset retirement obligations
102 17. Business segment information
105 18. Information on related parties
106 19. Per share information
107 20. Subsequent events
108 21. Borrowings
109 Independent Auditor’s Report
Asahi Kasei Report 2016
67
Management’s Discussion and Analysis
Fiscal year 2015 (April 1, 2015 – March 31, 2016)
Operating Environment
Although slower growth persisted in China, and other emerg-
ing economies continued to slow down during fiscal 2015,
the global economy overall was on a path of gradual recovery
with increased consumer spending together with improved
employment in the US, and signs of recovery in private
consumption in Europe. The Japanese economy saw steady
consumer spending along with firm corporate performance
and capital expenditure, but uncertainty remained regarding
the risk of further downturn in emerging economies and
appreciation of the yen from the latter half of the period.
Overview of Consolidated Results
Net sales, operating income
Consolidated net sales for the fiscal year decreased by ¥45.5
billion (2.3%) to ¥1,940.9 billion. Overseas sales increased by
¥6.4 billion (1.0%) to ¥679.7 billion, largely in the Health Care
segment, and increased by 1.1 percentage points as a portion
of consolidated net sales from 33.9% to 35.0%. Domestic sales
decreased by ¥51.9 billion (4.0%) to ¥1,261.2 billion with lower
market prices in chemicals operations in the Chemicals &
Fibers segment.
Operating income increased by ¥7.3 billion (4.6%) to
¥165.2 billion. As a percentage of net sales, cost of sales
decreased by 2.7 percentage points to 69.8%. Selling, general
and administrative (SG&A) expenses increased by ¥31.9 billion
despite the decrease in net sales, increasing as a portion of
net sales by 2.1 percentage points to 21.7%. Operating margin
increased by 0.6 percentage points to 8.5%.
Non-operating income and expenses, ordinary income
Net non-operating expenses were ¥3.8 billion, a ¥12.4 billion
decline from the ¥8.6 billion net non-operating income of a
year earlier. Foreign exchange gain transitioned to foreign
exchange loss, and equity in earnings of affiliates transitioned
to equity in losses of affiliates. As a result, ordinary income
decreased by ¥5.2 billion (3.1%) to ¥161.4 billion.
Extraordinary income and loss
Extraordinary loss of ¥24.2 billion included ¥5.3 billion in loss
on discontinuation of joint sales agreement, ¥5.2 billion in
loss on disposal of noncurrent assets, ¥3.6 billion in business
structure improvement expenses, ¥3.5 billion in impairment
loss, ¥2.0 billion in special retirement expenses and other, ¥1.5
billion in business integration expense, and ¥1.5 billion in loss
on piling business. The net extraordinary loss of ¥15.0 billion
was ¥6.9 billion greater than a year ago.
Net income attributable to owners of the parent
With ordinary income of ¥161.4 billion and net extraordinary
loss of ¥15.0 billion, income before income taxes was ¥146.4
billion. Income tax expense was ¥53.0 billion (current income
taxes of ¥55.4 billion less deferred income taxes of ¥2.4 billion).
Net income attributable to non-controlling interests was ¥1.7
billion. As a result, net income attributable to owners of the
parent decreased by ¥13.9 billion (13.2%) to ¥91.8 billion, and
net income per share decreased by ¥9.93 to ¥65.69 from the
¥75.62 of the previous year.
Net Sales,
Overseas Sales Ratio
Operating Income,
Operating Margin
SG&A, SG&A Ratio
Net Income Attributable to
Owners of the Parent,
Net Income per Share
(¥ billion)
2,000
(%)
40
(¥ billion)
200
(%)
20
(¥ billion)
500
(%)
50
(¥ billion)
120
1,500
1,000
500
0
’11
’12
’13
’14
’15
Net sales (left scale)
Overseas sales ratio (right scale)
68
Asahi Kasei Report 2016
30
150
20
100
10
50
0
(FY)
0
’11
’12
’13
’14
’15
Operating income (left scale)
Operating margin (right scale)
400
300
200
100
0
15
10
5
0
(FY)
’11
’12
’13
’14
’15
SG&A (left scale)
SG&A ratio (right scale)
(¥)
100
75
50
25
0
(FY)
40
30
20
10
0
(FY)
90
60
30
0
’11
’12
’13
’14
’15
Net income attributable to owners of
the parent (left scale)
Net income per share (right scale)
Homes & Construction Materials
Sales increased by ¥28.6 billion (4.7%) from a year ago to
¥632.4 billion, and operating income increased by ¥8.0 billion
(12.6%) from a year ago to ¥71.0 billion.
Among homes operations, in order-built homes, deliveries
of Hebel Maison™ apartment buildings increased, and SG&A
expenses such as promotional expenses decreased. In real
estate, management of rental units was firm. In remodeling,
orders increased centering on renovation work and equip-
ment installation.
In construction materials operations, shipments decreased
for foundation systems. Feedstock costs declined. Sales of
Neoma™ high-performance phenolic foam insulation panels
were firm.
Results by Operating Segment
The Asahi Kasei Group’s operations are described by major
business classification: four reportable segments of Chemicals
& Fibers, Homes & Construction Materials, Electronics, and
Health Care, together with an “Others” category. Results of
Polypore International, LP* and its consolidated subsidiaries
(collectively “Polypore”), acquired on August 26, 2015 (US
Eastern time), are included in the Electronics segment.
* Polypore International, Inc. changed to Polypore International, LP on March 31, 2016.
Chemicals & Fibers
Sales decreased by ¥119.0 billion (12.5%) from a year ago to
¥835.6 billion, and operating income increased by ¥4.3 billion
(6.7%) from a year ago to ¥68.9 billion.
Among chemicals operations, feedstock costs for petro-
chemical products declined with lower oil and naphtha prices,
but market prices deteriorated most notably for acrylonitrile.
In performance polymers, terms of trade improved due to
lower feedstock costs, and sales of engineering plastics and
synthetic rubber for fuel-efficient tires were firm. In specialty
products, the effect of the weaker yen was most notable for
ion-exchange membranes, and shipment of Saran Wrap™ cling
film increased.
In fibers operations, feedstock costs declined for each
product, the weaker yen contributed to performance, and
shipments of Lamous™ artificial suede for automotive uphol-
stery and Roica™ elastic polyurethane filament increased.
Chemicals Business
Operating Income Increases/Decreases
Fibers Business
Operating Income Increases/Decreases
Homes Business
Operating Income Increases/Decreases
(¥ billion)
60
40
20
0
(20)
(40)
(60)
54.2
Sales volume
–2.6
Operating
costs and
others
+97.1
55.3
Sales
prices1
–111.8
Foreign
exchange2
+18.4
(¥ billion)
15
12
9
6
3
0
(¥ billion)
80
13.7
Sales
volume
+1.9
60
59.2
Operating
costs and
others
+0.3
Sales
prices
+4.0
65.4
10.5
Sales
volume
+1.3
Sales
prices1
–2.3
Foreign
exchange2
+1.3
Operating
costs and
others
+2.9
40
20
0
’14
’15
(FY)
’14
’15
(FY)
’14
’15
(FY)
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
Asahi Kasei Report 2016
69
In critical care operations, the LifeVest™ wearable defibril-
lator business continues to expand consistently, and sales of
other products such as defibrillators and related accessories
increased, but SG&A expenses grew with reinforced sales
activity.
Others
Sales decreased by ¥7.4 billion (36.4%) from a year ago to ¥13.0
billion, and operating income decreased by ¥0.4 billion (41.7%)
from a year ago to ¥0.6 billion.
Management’s Discussion and Analysis
Electronics
Sales increased by ¥24.1 billion (16.0%) from a year ago to
¥174.5 billion, and operating income decreased by ¥7.4 billion
(51.8%) from a year ago to ¥6.9 billion.
Electronic devices operations benefited from the weaker
yen, and sales of devices for smartphones such as audio LSIs
and devices for camera modules were firm, but shipments of
electronic compasses declined.
In electronic materials operations, production and sale of
general purpose epoxy resin were terminated, but the weaker
yen contributed to performance, and sales of Hipore™ Li-ion
battery separator were firm.
The effect on operating income from amortization of
goodwill and other intangible assets, etc., related to the
acquisition of Polypore was ¥9.8 billion.
Health Care
Sales increased by ¥28.3 billion (11.0%) from a year ago to
¥285.4 billion, and operating income increased by ¥5.4 billion
(17.5%) from a year ago to ¥36.2 billion.
In pharmaceuticals operations, sales of Teribone™ osteopo-
rosis drug and Recomodulin™ recombinant thrombomodulin
were firm, while shipments of Flivas™ agent for treatment of
benign prostatic hyperplasia decreased due to competition
from generics.
In medical devices operations, shipments increased for
dialysis products and Planova™ virus removal filters.
Construction Materials Business
Operating Income Increases/Decreases
Electronics Business
Operating Income Increases/Decreases
Health Care Business
Operating Income Increases/Decreases
Operating costs
and others
+2.6
5.8
4.1
Sales prices
+0.1
Sales volume
–1.0
(¥ billion)
6.0
4.5
3.0
1.5
0
(¥ billion)
20
Sales
volume
+4.9
Sales
prices1
–6.8
Operating
costs and others
–12.1
(¥ billion)
30
15
14.3
10
5
0
Foreign
exchange2
+6.7
6.9
24
18
12
6
0
26.7
Sales
volume
–1.1
Sales
prices1
–1.8
Operating costs
and others
0
24.3
Foreign
exchange2
+0.5
’14
’15
(FY)
’14
’15
(FY)
’14
’15
(FY)
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
70
Asahi Kasei Report 2016
Net assets decreased by ¥40.3 billion (3.7%) from ¥1,097.7
billion to ¥1,057.4 billion. Net income attributable to owners
of the parent was ¥91.8 billion and dividend payments were
¥27.9 billion, while foreign currency translation adjustment
decreased by ¥51.1 billion, remeasurements of defined benefit
plans decreased by ¥33.6 billion, and net unrealized gain on
other securities decreased by ¥21.3 billion. As a result, net
worth per share decreased by ¥29.11 to ¥745.94, net worth to
total assets decreased from 53.7% to 47.1%, and the D/E ratio
increased by 0.18 points to 0.43.
Liquidity and Capital Resources
Financial position
Total assets at fiscal year end were ¥2,211.7 billion, ¥197.2
billion (9.8%) higher than a year earlier.
Current assets decreased by ¥35.6 billion (4.0%) to ¥856.0
billion, mainly as notes and accounts receivable–trade
decreased by ¥45.5 billion, while cash and deposits increased
by ¥22.2 billion.
Noncurrent assets increased by ¥232.8 billion (20.7%)
to ¥1,355.7 billion, notably with a ¥208.5 billion increase in
intangible assets and a ¥53.5 billion increase in property, plant
and equipment, while there was a ¥44.8 billion decrease in
investment securities.
Current liabilities increased by ¥218.2 billion (43.0%) to
¥725.7 billion, mainly as a result of a ¥217.6 billion increase
in short-term loans payable and a ¥22.5 billion increase in
income taxes payable, while there was a ¥25.2 billion decrease
in notes and accounts payable–trade.
Although long-term loans payable decreased by ¥35.8
billion, noncurrent liabilities increased by ¥19.3 billion (4.7%)
to ¥428.7 billion with a ¥44.3 billion increase in net defined
benefit liability.
Interest-bearing debt increased by ¥180.7 billion (67.2%) to
¥449.7 billion.
Critical Care Business
Operating Income Increases/Decreases
Others
Operating Income Increases/Decreases
Total Assets, Net Worth
(¥ billion)
20
(¥ billion)
2.0
Sales
prices1
+0.1
Foreign
exchange2
–1.0
Operating
costs and
others
–6.1
11.9
Operating
costs and
others
–1.3
0.9
Sales
volume
+0.9
0.6
1.5
1.0
0.5
0
15
10
5
0
Sales
volume
+14.8
4.1
’14
(¥ billion)
2,500
2,000
1,500
1,000
500
0
’15
(FY)
’14
’15
(FY)
’11
’12
’13
’14
’15
(FY)
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
Total assets
Net worth
Asahi Kasei Report 2016
71
Management’s Discussion and Analysis
Capital Expenditure
Notable capex by operating segment was as follows.
Capital expenditure (capex) was primarily for new and
expanded production plant and equipment in long-term
growth fields. Investments were also made for rationalization,
labor-saving, maintenance, and IT systems to bring greater
product reliability and cost reductions.
Capex by operating segment shown below is for property,
plant and equipment and intangible assets (other than
goodwill), combined, excluding consumption tax.
A total of ¥99.0 billion was invested during the fiscal year
for the expansion of businesses with competitive superiority,
particularly in the Chemicals & Fibers segment, as well as for
modification and rationalization.
Totals for the year
(¥ million)
Compared to
previous year (%)
Chemicals & Fibers
Homes & Construction
Materials
Electronics
Health Care
Others
Combined
Corporate assets and
eliminations
Consolidated
43,669
11,947
16,708
19,382
1,513
93,220
5,780
99,000
104.7
110.0
144.0
116.8
109.0
113.5
83.3
111.1
Chemicals &
Fibers
Homes &
Construction
Materials
Electronics
Health Care
Others
Corporate assets
Construction of a new production line for
hexamethylene diisocyanate (HDI)-based
polyisocyanate, construction of a new
plant for synthetic rubber for fuel-efficient
high-performance tires, construction of a
new production line for spunbond non-
wovens, construction of a new production
line for Roica™ elastic polyurethane
filament, construction of a new plant for
plastic compounds, rationalization, labor-
saving, and maintenance
Rationalization, labor-saving, and
maintenance
Rationalization, labor-saving, and
maintenance
Rationalization, labor-saving, and
maintenance
Rationalization, labor-saving, and
maintenance
R&D equipment, IT systems, 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)
500
400
300
200
100
0
’11
’12
’13
’14
’15
(FY)
’11
’12
’13
’14
’15
1.0
0.8
0.6
0.4
0.2
0
(FY)
(¥ billion)
120
90
60
30
0
’11
’12
’13
’14
’15
(FY)
Interest-bearing debt (left scale)
D/E ratio (right scale)
Capex
Depreciation and amortization
72
Asahi Kasei Report 2016
Cash Flows
Free cash flows* were a negative ¥69.1 billion, as cash used,
principally for purchase of shares in subsidiaries resulting in
change in scope of consolidation and purchase of property,
plant and equipment, exceeded cash provided principally
from income before income taxes and from depreciation and
amortization. Cash flows from financing activities were a net
¥101.4 billion provided, principally due to an increase in short-
term loans payable. As a result, cash and cash equivalents at
fiscal year end were ¥145.3 billion, ¥33.0 billion more than a
year earlier.
Cash flows from operating activities
Cash used included ¥60.4 billion for income taxes paid and a
¥24.1 billion decrease in notes and accounts payable–trade.
Income before income taxes provided ¥146.4 billion, deprecia-
tion and amortization provided ¥93.8 billion, and decrease in
notes and accounts receivable–trade provided ¥48.5 billion.
Net cash provided by operating activities was ¥216.2 billion,
¥78.6 billion more than a year earlier.
Cash flows from investing activities
Cash used included ¥193.7 billion for purchase of shares in
subsidiaries resulting in change in scope of consolidation,
including the acquisition of Polypore, and ¥85.2 billion for
purchase of property, plant and equipment for continuing
expansion of competitively superior operations and enhance-
ment of overall competitiveness. Net cash used in investing
activities was ¥285.3 billion, ¥184.8 billion more than a year
earlier.
Cash flows from financing activities
Cash used included ¥91.8 billion to repay long-term loans
payable. Cash provided included a ¥213.4 billion increase
in short-term loans payable mainly to finance the Polypore
acquisition. Net cash provided by financing activities was
¥101.4 billion, ¥175.4 billion more than a year earlier.
* Total of net cash provided by (used in) operating activities and net cash provided
by (used in) investment activities.
Financial Policy
We aim to increase free cash flows with increased earnings
through enhanced cost efficiency, greater product competi-
tiveness, and business structure improvements, and with
greater capital efficiency through utilization of group finance
and maintenance of optimum inventory levels.
A wide range of fund-raising methods including bank
borrowings, bonds, and commercial paper will be utilized
dynamically in accordance with the financial circumstances
of the Asahi Kasei Group in order to obtain stable financing at
low cost.
These resources will be used to fund strategic investments
under the “Cs for Tomorrow 2018” strategic management
initiative focused on the pursuit of growth and profitability,
creation of new businesses, and acceleration of globalization,
as well as dividends for shareholders.
Advancing these measures will enable us to further
enhance corporate value and provide an appropriate return to
shareholders while maintaining discipline for a sound financial
constitution.
Free Cash Flows
(¥ billion)
160
Cash Flows
(¥ billion)
300
120
80
40
0
(40)
(80)
(120)
(160)
200
100
0
(100)
(200)
(300)
’11
’12
’13
’14
’15
(FY)
’11
’12
’13
’14
’15
(FY)
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Asahi Kasei Report 2016
73
Risk Analysis
Operating risks and non-operating risks which may materially influence investor decisions are described below. The manage-
ment 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 evalua-
tions as of June 28, 2016, it does not include risks which could not be foreseen.
Profitability of electronics-related businesses
The electronics industry is characterized by sharp market
cycles. The profitability of electronics-related businesses may
decline significantly in a relatively short time, thereby affect-
ing our consolidated performance and financial condition.
Because products in this field rapidly become obsolete, the
timely development and commercialization of leading-edge
devices and materials is required. New product development
may be delayed, or demand fluctuations may exceed expecta-
tions, thereby affecting our consolidated performance and
financial condition.
Pharmaceutical, medical device, and critical care device
businesses
Pharmaceutical, medical device, and critical care device busi-
nesses may be significantly affected by government measures
regarding health care or other changes in government policy
in various countries. Unforeseeable side effects or complica-
tions may emerge, significantly affecting these businesses.
Product approval may be withdrawn as a result of reexamina-
tion, and competition may intensify as a result of the market
entry of generics. For products under development, regulatory
approval may be prolonged or fail to be obtained, market
demand may be lower than expected, and reimbursement
prices may be lower than expected. Such scenarios may affect
our consolidated performance and financial condition.
Crude oil and naphtha prices
Operating costs in operations based on petrochemicals are
affected by prices for crude oil and naphtha. If crude oil and
naphtha prices rise, selling prices for products derived from
these feedstocks must be increased in a timely manner to
maintain sufficient price spreads. Price spreads may diminish,
thereby affecting our consolidated performance and financial
condition.
Exchange rate fluctuation
The value of items denominated in currencies other than the
yen is affected by the rate of exchange at the time of conver-
sion to yen. Although measures such as currency exchange
hedges are utilized to minimize the short-term effects of
exchange rate fluctuations, such fluctuations may exceed the
foreseeable range over the short to long term, thereby affect-
ing our consolidated performance and financial condition.
Overseas operations
Overseas operations may face a variety of risks which cannot be
foreseen, including the existence or emergence of economi-
cally unfavorable circumstances due to legal and regulatory
changes, vulnerability of infrastructure, difficulty in hiring/retain-
ing qualified employees, or other factors, and social or political
instability due to terrorism, war, or other factors. Overseas
operations may be impaired by such scenarios, thereby affect-
ing our consolidated performance and business plans.
Housing-related tax policy, interest rate fluctuation
Operations in the Homes segment are affected by Japanese
tax policies as they relate to home acquisition and by
fluctuations in Japanese interest rates. Changes in Japanese
tax policy, including consumption taxes, or fluctuations in
Japanese interest rates may result in diminished housing
demand, thereby affecting our consolidated performance and
financial condition.
74
Asahi Kasei Report 2016
Industrial accidents and natural disasters
The occurrence of a significant industrial accident or natural
disaster at a plant or elsewhere may result in a loss of public
trust, the emergence of costs associated with accident
response, including compensation, and 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
financial condition.
Business and capital alliances
Acquisitions, business alliances, and capital alliances may
bear lower results or less synergy than anticipated due to
deterioration of the operating environment, thereby affecting
our consolidated performance and financial 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 performance and financial
condition.
Intellectual property, product liability, and legal regulation
An unfavorable ruling may emerge in a dispute relating to
intellectual property, a product defect resulting in a large-scale
recall and compensation whose costs exceed insurance
coverage may emerge, and detrimental legal and regulatory
changes may emerge in any country where we operate.
Such scenarios may affect our consolidated performance and
financial condition.
Business counterparties
The occurrence of misconduct or unforeseeable credit impair-
ment, etc., may necessitate additional losses or allowances
to be recorded in financial accounts, thereby affecting our
consolidated performance and financial condition.
Manipulation of data for installation of foundation piles
It has become clear that consolidated subsidiary Asahi Kasei
Construction Materials Corp. submitted incorrect data in pile
installation reports for the precast concrete piles which it
installed as secondary subcontractor for the construction of a
condominium complex in Yokohama, Kanagawa, Japan, and a
portion of the similar pile installation work performed over the
past 10 years. On January 13, 2016, Asahi Kasei Construction
Materials Corp. received instructions in accordance with
Paragraph 1 of Article 28 of the Construction Business Act,
an order to suspend business in accordance with Paragraph
3 of Article 28 of the Construction Business Act, and a
recommendation in accordance with Paragraph 1 of Article
41 of the Construction Business Act from the Kanto Regional
Development Bureau of the Ministry of Land, Infrastructure,
Transport and Tourism. This matter may result in diminished
trust which could cause a decline in sales, etc., thereby affect-
ing our consolidated performance and financial condition.
Asahi Kasei Report 2016
75
Consolidated Financial Statements
Consolidated Balance Sheets
Asahi Kasei Corporation and Consolidated Subsidiaries
March 31, 2016 and 2015
ASSETS
Current assets:
Cash and deposits (Notes 8 and 10)
Notes and accounts receivable—trade
Short-term investment securities (Notes 8, 10 and 11)
Merchandise and finished goods
Work in process
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
Machinery, equipment and vehicles (Note 4 (b), (d))
Accumulated depreciation
Machinery, equipment and vehicles, net
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 (Note 15 (e))
Other
Subtotal
Investments and other assets
Investment securities (Notes 4 (a), (b), 10 and 11)
Long-term loans receivable (Note 10)
Net defined benefit asset (Note 13)
Deferred tax assets (Note 14)
Other
Allowance for doubtful accounts
Subtotal
Total noncurrent assets
Total assets
The accompanying notes are an integral part of these statements.
76
Asahi Kasei Report 2016
Millions of yen
Thousands of
U.S. dollars (Note 1)
2016
2015
2016
¥ 146,054
¥ 123,821
$ 1,296,874
280,095
1,534
159,441
108,684
68,618
18,133
75,324
(1,865)
856,018
495,817
(268,635)
227,183
1,348,103
(1,149,544)
198,559
61,046
12,928
(11,183)
1,745
49,240
147,286
(129,072)
18,215
555,989
305,112
189,470
494,582
244,598
16,353
—
20,098
24,280
(189)
305,140
1,355,711
325,568
1,802
161,554
112,813
65,311
21,707
80,520
(1,517)
891,579
471,033
(261,352)
209,681
1,345,790
(1,170,771)
175,019
59,287
13,054
(10,232)
2,822
37,566
143,593
(125,461)
18,133
502,507
153,835
132,241
286,076
289,393
9,952
2,929
11,351
21,016
(273)
334,368
1,122,952
¥ 2,211,729
¥ 2,014,531
2,487,080
13,621
1,415,743
965,051
609,288
161,010
668,833
(16,560)
7,600,941
4,402,566
(2,385,322)
2,017,253
11,970,369
(10,207,281)
1,763,088
542,053
114,793
(99,299)
15,495
437,223
1,307,814
(1,146,084)
161,739
4,936,858
2,709,217
1,682,383
4,391,600
2,171,888
145,205
—
178,459
215,592
(1,678)
2,709,465
12,037,924
$ 19,638,865
LIABILITIES AND NET ASSETS
Liabilities:
Current liabilities:
Notes and accounts payable—trade (Note 10)
Short-term loans payable (Notes 4 (b), 10 and 21)
Lease obligations (Notes 9, 10 and 21)
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 16)
Other
Total current liabilities
Noncurrent liabilities:
Bonds payable (Notes 10 and 21)
Long-term loans payable (Notes 4 (b), 10 and 21)
Lease obligations (Notes 9, 10 and 21)
Deferred tax liabilities (Note 14)
Provision for periodic repairs
Provision for removal cost of property, plant and equipment
Provision for loss on litigation
Net defined benefit liability (Note 13)
Asset retirement obligations (Note 16)
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
(2016—5,861,678 shares, 2015—5,742,862 shares)
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gain on other securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling 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)
2016
2015
2016
¥ 126,653
313,587
919
98,717
32,735
74,667
3,908
2,355
2,130
568
69,423
725,662
40,000
94,632
537
64,930
558
7,228
2,171
186,300
3,480
20,131
8,702
428,669
1,154,330
103,389
79,410
763,076
(3,150)
¥ 151,867
96,015
1,383
101,164
10,203
74,675
2,396
2,562
2,832
533
63,817
507,449
40,000
130,400
1,219
57,943
1,248
7,865
2,316
142,035
3,506
19,146
3,683
409,360
916,809
103,389
79,408
699,259
(3,041)
$ 1,124,605
2,784,470
8,160
876,549
290,668
662,999
34,701
20,911
18,913
5,044
616,436
6,443,456
355,177
840,277
4,768
576,541
4,955
64,180
19,277
1,654,235
30,900
178,752
77,269
3,806,331
10,249,778
918,034
705,115
6,775,670
(27,970)
942,724
879,014
8,370,840
92,280
(179)
48,429
(41,353)
99,177
15,498
1,057,399
113,562
(1,697)
99,531
(7,757)
203,639
15,068
1,097,722
819,393
(1,589)
430,021
(367,191)
880,634
137,613
9,389,087
¥2,211,729
¥2,014,531
$19,638,865
Asahi Kasei Report 2016
77
Consolidated Statements of Income
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2016 and 2015
Net sales (Note 17)
Cost of sales (Note 5 (b))
Gross profit
Selling, general and administrative expenses (Note 5 (a))
Operating income (Note 17)
Non-operating income:
Interest income
Dividends income
Equity in earnings of affiliates
Foreign exchange gain
Other
Total non-operating income
Non-operating expenses:
Interest expense
Equity in losses of affiliates
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income:
Gain on sales of investment securities
Gain on sales of noncurrent assets (Note 5 (c))
Total extraordinary income
Extraordinary loss:
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on disposal of noncurrent assets (Note 5 (d))
Impairment loss (Note 5 (e))
Business structure improvement expenses (Note 5 (e), (f ))
Litigation settlement
Loss on piling business (Note 5 (g))
Business integration expense
Special retirement expenses and other
Loss on discontinuation of joint sales agreement (Note 5 (e), (h))
Total extraordinary loss
Income before income taxes
Income taxes (Note 14) — current
— deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent
The accompanying notes are an integral part of these statements.
78
Asahi Kasei Report 2016
Millions of yen
2016
¥1,940,914
1,354,698
586,216
421,013
165,203
2015
¥1,986,405
1,439,344
547,061
389,128
157,933
Thousands of
U.S. dollars (Note 1)
2016
$17,234,186
12,028,929
5,205,257
3,738,350
1,466,906
1,417
4,757
—
—
5,148
11,322
3,611
854
3,679
7,010
15,154
161,370
8,275
917
9,192
—
363
5,214
3,493
3,606
1,201
1,456
1,547
2,027
5,266
24,173
146,389
55,419
(2,441)
52,978
93,412
1,658
1,389
3,923
1,738
5,197
5,041
17,288
3,056
—
—
5,622
8,678
166,543
2,756
382
3,137
112
1,136
4,728
1,255
4,010
—
—
—
—
—
11,241
158,440
44,059
7,483
51,542
106,898
1,246
12,582
42,239
—
—
45,711
100,533
32,064
7,583
32,667
62,245
134,559
1,432,872
73,477
8,142
81,620
—
3,223
46,297
31,016
32,019
10,664
12,928
13,736
17,999
46,759
214,642
1,299,849
492,088
(21,675)
470,414
829,444
14,722
¥ 91,754
¥ 105,652
$ 814,722
Consolidated Statements of Comprehensive Income
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2016 and 2015
Net income
Other comprehensive income
Net (decrease) increase in unrealized gain on other securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of affiliates accounted for
using equity method
Total other comprehensive income (Note 6)
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests
The accompanying notes are an integral part of these statements.
Millions of yen
2016
¥ 93,412
2015
¥106,898
(21,098)
1,519
(48,860)
(33,331)
(3,567)
(105,337)
¥ (11,925)
¥ (12,708)
783
37,947
(1,526)
48,945
17,096
5,125
107,587
¥214,484
¥212,159
2,326
Thousands of
U.S. dollars (Note 1)
2016
$ 829,444
(187,338)
13,488
(433,848)
(295,960)
(31,673)
(935,331)
$(105,887)
$(112,840)
6,953
Asahi Kasei Report 2016
79
Consolidated Statements of Changes in Net Assets
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2016 and 2015
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
defined
benefit plans
Total
accumulated
other
comprehensive
income
Non-
controlling
interests
Total
net assets
Balance at March 31, 2015
¥103,389
¥79,408 ¥699,259
¥(3,041) ¥879,014
¥113,562
¥(1,697)
¥ 99,531
¥ (7,757) ¥ 203,639
¥15,068 ¥1,097,722
Cumulative effect of changes
in accounting policies
—
—
Restated balance
103,389
79,408
699,259
(3,041)
879,014
113,562
(1,697)
99,531
(7,757)
203,639
15,068
1,097,722
Changes during the fiscal year
Dividends from surplus
Net income attributable
to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of equity method
Net changes of items other than
shareholders’ equity
Total changes of items
during the period
(27,937)
91,754
2
(27,937)
91,754
(113)
6
(113)
4
(27,937)
91,754
(113)
6
—
2
63,817
(109)
63,710
(21,282)
1,519
(51,102)
(33,596)
(104,462)
430
(40,323)
(21,282)
1,519
(51,102)
(33,596)
(104,462)
430
(104,032)
Balance at March 31, 2016
¥103,389
¥79,410 ¥763,076
¥(3,150) ¥942,724
¥ 92,280
¥ (179)
¥ 48,429
¥(41,353) ¥ 99,177
¥15,498 ¥1,057,399
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
defined
benefit plans
Total
accumulated
other
comprehensive
income
Non-
controlling
interests
Total
net assets
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
Cumulative effect of changes
in accounting policies
(15,741)
(15,741)
(15,741)
Restated balance
103,389
79,404
619,662
(2,591)
799,863
75,626
(171)
46,734
(25,094)
97,095
13,067
910,025
Changes during the fiscal year
Dividends from surplus
Net income attributable
to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of equity method
Net changes of items other than
shareholders’ equity
Total changes of items
during the period
(26,547)
105,652
296
197
3
(26,547)
105,652
(455)
8
296
197
(455)
5
(26,547)
105,652
(455)
8
296
197
—
3
79,597
(450)
79,151
37,937
(1,526)
52,797
17,338
106,545
2,002
187,697
37,937
(1,526)
52,797
17,338
106,545
2,002
108,546
Balance at March 31, 2015
¥103,389
¥79,408
¥699,259
¥(3,041)
¥879,014
¥113,562
¥(1,697)
¥99,531
¥ (7,757)
¥203,639
¥15,068 ¥1,097,722
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
defined
benefit plans
Total
accumulated
other
comprehensive
income
Non-
controlling
interests
Total
net assets
Balance at March 31, 2015
$918,034
$705,097 $6,209,013
$(27,002) $7,805,132
$1,008,364
$(15,068) $ 883,777 $ (68,878) $1,808,196
$133,795 $9,747,132
Cumulative effect of changes
in accounting policies
—
—
Restated balance
918,034
705,097
6,209,013
(27,002) 7,805,132
1,008,364
(15,068)
883,777
(68,878) 1,808,196
133,795
9,747,132
Changes during the fiscal year
Dividends from surplus
Net income attributable
to owners of the parent
Purchase of treasury stock
Disposal of treasury stock
Change of scope of consolidation
Change of scope of equity method
Net changes of items other than
shareholders’ equity
Total changes of items
during the period
(248,064)
(248,064)
814,722
814,722
18
(1,003)
(1,003)
36
53
(248,064)
814,722
(1,003)
53
—
18
566,658
(968)
565,708
(188,972)
13,488
(453,756)
(298,313)
(927,562)
3,818
(358,045)
(188,972)
13,488
(453,756)
(298,313)
(927,562)
3,818
(923,744)
Balance at March 31, 2016
$918,034
$705,115 $6,775,670
$(27,970) $8,370,840
$ 819,393
$ (1,589) $ 430,021 $(367,191) $ 880,634
$137,613 $9,389,087
The accompanying notes are an integral part of these statements.
80
Asahi Kasei Report 2016
Consolidated Statements of Cash Flows
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2016 and 2015
Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Amortization of negative goodwill
Increase (decrease) in provision for periodic repairs
(Decrease) increase in provision for product warranties
Decrease in provision for removal cost of property, plant and equipment
Decrease in net defined benefit liability
Interest and dividend income
Interest expense
Equity in (earnings) losses of affiliates
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
Decrease in notes and accounts receivable—trade
Increase (decrease) in inventories
Decrease in notes and accounts payable—trade
(Decrease) increase in accrued expenses
Increase (decrease) in advances received
Other, net
Subtotal
Interest and dividend income, received
Interest expense paid
Income taxes paid
Net cash provided by operating activities
Cash flows 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
Payments for transfer of business
Payments of loans receivable
Collection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term loans payable
Decrease in commercial paper
Proceeds from long-term loans payable
Repayment of long-term loans payable
Repayments of lease obligations
Purchase of treasury stock
Proceeds from disposal of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from changes
in scope of consolidation
Cash and cash equivalents at end of year (Note 8)
The accompanying notes are an integral part of these statements.
Millions of yen
Thousands of
U.S. dollars (Note 1)
2016
2015
2016
¥ 146,389
93,811
3,493
15,821
(159)
824
(193)
(1,339)
(9,227)
(6,173)
3,611
854
(8,275)
363
(917)
5,214
48,513
12,901
(24,104)
(3,980)
120
(4,863)
272,687
7,558
(3,596)
(60,431)
216,218
(6,360)
17,364
(85,184)
774
(10,330)
(7,017)
10,197
(193,680)
(200)
(11,131)
2,520
(2,241)
(285,287)
213,417
—
9,445
(91,760)
(1,411)
(113)
6
(27,937)
(653)
371
101,365
(5,560)
26,736
112,297
¥ 158,440
86,058
1,255
9,320
(159)
(4,496)
22
(1,723)
(2,300)
(5,312)
3,056
(1,738)
(2,644)
1,136
(382)
4,728
717
(3,610)
(13,559)
5,662
(6,553)
(8,587)
219,331
6,761
(3,081)
(85,415)
137,597
(17,182)
13,436
(82,990)
944
(10,661)
(1,349)
5,341
(2,808)
(3,763)
(5,296)
6,295
(2,438)
(100,470)
(24,324)
(10,000)
10,950
(21,064)
(1,830)
(462)
8
(26,547)
(745)
(2)
(74,016)
5,467
(31,423)
143,139
$ 1,299,849
832,987
31,016
140,481
(1,412)
7,317
(1,714)
(11,890)
(81,930)
(54,813)
32,064
7,583
(73,477)
3,223
(8,142)
46,297
430,767
114,553
(214,029)
(35,340)
1,066
(43,181)
2,421,302
67,111
(31,930)
(536,592)
1,919,890
(56,473)
154,182
(756,384)
6,873
(91,724)
(62,307)
90,543
(1,719,766)
(1,776)
(98,837)
22,376
(19,899)
(2,533,182)
1,895,019
—
83,866
(814,775)
(12,529)
(1,003)
53
(248,064)
(5,798)
3,294
900,062
(49,370)
237,400
997,132
6,273
¥ 145,307
581
¥ 112,297
55,701
$ 1,290,242
Asahi Kasei Report 2016
81
Notes to Consolidated Financial Statements
Asahi Kasei Corporation and Consolidated Subsidiaries
1. Major policies for preparing the consolidated financial statements
The consolidated financial statements, which are filed with the prime
minister of Japan as required by the Financial Instruments and Exchange
Act in Japan, are prepared in accordance with accounting principles
generally accepted in Japan, which are different in certain respects from
the application and disclosure requirements of International Financial
Reporting Standards. The accompanying consolidated financial state-
ments are a translation of those filed with the prime minister of Japan and
incorporate certain modifications to enhance foreign readers’ understand-
ing of the consolidated financial statements. In addition, the notes to the
consolidated financial statements include certain financial information
which is not required under the disclosure regulations in Japan, but is
presented herein as additional information.
The U.S. dollar amounts presented in the consolidated financial
statements are included solely for the convenience of readers. These
translations should not be construed as representations that the Japanese
yen amounts actually represent, or have been or could be converted into
U.S. dollars. As the amounts shown in U.S. dollars are for convenience
only, and are not intended to be computed in accordance with generally
accepted translation procedures, the approximate current exchange rate
of ¥112.62=US$1 prevailing on March 31, 2016, has been used.
Consolidation and investments in affiliated companies
The consolidated financial statements consist of the accounts of the
parent company and 174 subsidiaries (140 subsidiaries at March 31,
2015, hereinafter collectively referred to as the “Company”) which, with
minor exceptions due to immateriality, are all majority and wholly owned
companies, including 10 core operating companies (Asahi Kasei Chemicals
2. Significant accounting policies
(a) Cash and cash equivalents
For cash flow statement purposes, cash and cash equivalents include
all highly liquid investments, generally with original maturities of three
months or less, which are readily convertible to known amounts of cash,
and therefore present an insignificant risk of changes in value due to
changes in interest rates.
(b) Inventories
Inventories held for sale in the ordinary course of business are stated at the
lower of cost or net realizable value. Residential lots and dwellings for sale
are stated at specifically identified costs.
(c) Noncurrent assets and depreciation/amortization
Property, plant and equipment (except for lease assets) are stated at cost.
Significant renewals and improvements are capitalized at cost, while
maintenance and repairs are charged to income as incurred. Depreciation
is provided for under the declining-balance method for property, plant
and equipment, except for buildings which are depreciated using the
straight-line method, at rates based on estimated useful lives of the assets,
principally ranging from 5 to 60 years for buildings and from 4 to 22 years
for machinery and equipment and vehicles.
Intangible fixed 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 (financing lease transactions without title transfer) are
depreciated/amortized on a straight-line basis over the period of the lease
with no residual value. For financing lease transactions without title trans-
fer whose transaction date is before March 31, 2008, the previous method
of accounting for lease transactions continues to be applied, with periodic
lease charges for financing leases being charged to income as incurred.
(d) Significant allowances
i) Allowance for doubtful accounts
Estimates of the unrecoverable portion of receivables, generally based
on historical rates and for specific receivables of particular concern based
on individual estimates of recoverability, are recognized as allowance for
doubtful accounts.
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.,
ZOLL Medical Corporation and Polypore International, LP), 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 significant influence are
accounted for, with minor exceptions due to immateriality, using the
equity method of accounting. There were 31 such unconsolidated subsid-
iaries and 20% to 50% owned companies to which the equity method is
applied at March 31, 2016 (37 at March 31, 2015), including Asahi Kasei EIC
Solutions Corp., Asahi Kasei Geotechnologies Co., Ltd. and Asahi Organic
Chemicals Industry Co., Ltd.
Certain subsidiaries’ results are reported in the consolidated financial
statements using a fiscal year ending December 31. Material differences in
inter-company transactions and accounts arising from the use of different
fiscal year-ends are appropriately adjusted for through consolidation
procedures.
All assets and liabilities of 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 combinations 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.
ii) Provision for periodic repairs
The portion of foreseeable periodic repair expenses deemed to cor-
respond to normal wear and tear of plant and equipment as of the closing
date of the fiscal 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 fiscal year.
v) Provision for loss on litigation
Provision for loss on litigation is recorded for estimated losses related to
pending litigation.
(e) Accounting for retirement benefits
i) Method of attributing expected retirement benefits to each
period
In calculating retirement benefit obligations, the Company applies a
method of attributing expected retirement benefits to each period based
on a benefit formula basis.
ii) Accounting for actuarial gains/losses and prior service costs
Actuarial gains/losses are amortized using the straight-line method from
the fiscal year following their accrual over a certain period (mainly 10
years) within the average remaining service period of employees at the
time of accrual. Prior service costs are amortized using the straight-line
method over a certain period (mainly 10 years) within the average remain-
ing service period of employees at the time of accrual.
iii) Adoption of the simplified method
In calculating expected defined benefit liability and periodic retirement
benefit expenses, certain consolidated subsidiaries have adopted the sim-
plified method. Under this method, the expected defined benefit liability
is recorded at the severance payment amount to be required should all
employees retire voluntarily at fiscal year end.
82
Asahi Kasei Report 2016
(f) Significant revenue and expense recognition
i) Construction activities that are realizable as of fiscal year end
The percentage-of-completion method (progress of work is estimated using
the percentage of costs incurred to the total projected costs) is applied.
ii) Other construction activities
The completed-contract method is used.
(g) Financial instruments
i) Securities
Securities are classified into four categories: trading securities, held-to-
maturity debt securities, equity securities of unconsolidated subsidiaries and
affiliates, and other securities. At March 31, 2016 and 2015, the Company did
not have trading securities or held-to-maturity debt securities.
Equity securities of unconsolidated subsidiaries and affiliates are
accounted for, with minor exceptions due to 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 significant
decline in the realizable value is assessed to be other than temporary, the
cost of other securities is devalued by the impaired amount and is charged
to income. Realized gains and losses are determined using the average cost
method and are reflected in the consolidated income statements.
ii) Derivative financial 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 instruments. Gains or losses
3. Changes in significant accounting policies
(a) Changes in accounting policies
The revisions of the “Accounting Standard for Business Combinations”
(Accounting Standards Board of Japan (ASBJ) Statement No. 21), the
“Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22), and the “Accounting Standard for Business Divestitures”
(ASBJ Statement No. 7) have been applied from the fiscal year ended
March 31, 2016. Accordingly, differences resulting from changes in
ownership interest in a subsidiary as long as control over the subsidiary is
retained are recorded as capital surplus, and costs related to acquisition
of increased ownership interest are recognized as expenses during the
period in which they arise. Also, with regard to business combinations
performed on or after the beginning of the fiscal year ended March 31,
2016, the revised allocation of acquisition costs arising from the settlement
of provisional accounting treatment are retrospectively reflected as if the
accounting for the business combination had been completed at the
acquisition date. The presentation of “net income” was amended, and the
title of “minority interests” was changed to “non-controlling interests.” The
consolidated financial statements for the previous fiscal year have been
reclassified to reflect these changes in presentation.
In accordance with the transitional treatment set forth in Article 58-2
(4) of the “Accounting Standard for Business Combinations,” Article 44-5
(4) of the “Accounting Standard for Consolidated Financial Statements,”
and Article 57-4 (4) of the “Accounting Standard for Business Divestitures,”
the revised standards above have been applied from the beginning of the
fiscal year ended March 31, 2016. As a result, operating income, ordinary
income, and income before income taxes decreased respectively by
¥2,185 million in the fiscal year ended March 31, 2016.
In the consolidated statements of cash flows for the fiscal year ended
March 31, 2016, cash flows from purchases or sales of shares of subsidiaries
that do not result in changes in scope of consolidation are included
in cash flows from financing activities, while cash flows from expenses
related to purchases of shares of subsidiaries that result in changes in
scope of consolidation and expenses related to purchases or sales of
shares of subsidiaries that do not result in changes in scope of consolida-
tion are included in cash flows from operating activities. The effect on
per-share information is shown in the relevant parts.
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 hedged assets and liabilities.
(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 file its return under the consolidated
tax filing system in Japan. Transactions subject to consumption taxes are
recorded at amounts net of consumption taxes.
(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 fiscal year-end exchange rates, and income and expenses of same
are translated into Japanese yen at the average exchange rate for the
fiscal year. Shareholders’ equity of foreign subsidiaries 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 rec-
ognized as foreign currency translation adjustments in the consolidated
balance sheets. A portion of the foreign currency translation adjustment
is allocated to non-controlling interests and the Company’s portion is
presented as a separate component of net assets in the consolidated
balance sheets.
(b) Accounting standards issued but not yet applied
The ASBJ issued ASBJ Guidance No. 26 “Implementation Guidance on
Recoverability of Deferred Tax Assets.” This guidance basically continues
to apply the framework adopted in the Audit Committee’s Report No. 66
entitled “Auditing Treatment for Judgment of Recoverability of Deferred
Tax Assets,” which provided the criteria for classification of entities into
five categories to determine the estimated amount of deferred tax assets.
However, this guidance provides certain necessary revisions as follows:
1) Treatment of entities not included in any category.
2) Requirements for classification in category 2 and in category 3.
3) Treatment of future deductible temporary differences that entities in
category 2 cannot schedule.
4) Treatment of the reasonable estimable period of future taxable
income before additions or deductions of temporary differences for
entities in category 3.
5) Treatment of entities fulfilling the requirements of category 4 which
are also applicable to category 2 or category 3.
The Company will apply the revised guidance from the beginning of
the fiscal year ending March 31, 2017. The effects of the adoption of the
guidance on the consolidated financial statements will be immaterial.
(c) Changes in presentation
Consolidated statements of income
In the fiscal year ended March 31, 2016, “costs associated with idle
portion of facilities” and “donations,” both of which had previously been
reported separately, became 10% or less of total non-operating income
respectively, and are included in “other” under non-operating expenses.
The consolidated statements of income for the fiscal year ended March 31,
2015, have been reclassified accordingly, resulting in “costs associated with
idle portion of facilities” of ¥1,168 million and “donations” of ¥869 million
being included in “other” under non-operating expenses.
Asahi Kasei Report 2016
83
4. Notes to Consolidated Balance Sheets
(a) Investment securities
Among investment securities, shares of unconsolidated subsidiaries and affiliates as of March 31, 2016 and 2015, amounted to ¥55,786 million (US$495,347
thousand) and ¥69,210 million, respectively. Included in those amounts are investments in joint ventures of ¥27,003 million (US$ 239,771 thousand) and
¥33,912 million, respectively.
(b) Pledged assets and secured debt
A summary of assets pledged as collateral and secured debt as of March 31, 2016 and 2015, is shown below:
Pledged assets
Buildings and structures
Machinery, equipment and vehicles
Total pledged assets
Secured debt
Short-term loans payable
Long-term loans payable
Total secured debt
Millions of yen
Thousands of U.S. dollars
2016
¥118
1
¥120
¥ 1
77
¥ 78
2015
¥130
2
¥132
¥ 2
135
¥137
2016
$1,048
9
$1,066
$ 9
684
$ 693
Besides the above, investment securities pledged to suppliers as transaction guarantees at March 31, 2016 and 2015, were ¥54 million (US$479
thousand) and ¥64 million, respectively.
(c) Contingent liabilities
Asahi Kasei Construction Materials Corp., a consolidated subsidiary of Asahi Kasei Corp., submitted incorrect data within their pile installation report for
the precast concrete piles installed as a secondary subcontractor for the construction of a condominium complex in Yokohama, Kanagawa, Japan. There
was manipulation of ammeter data obtained when boring holes for installation and manipulation of flowmeter data for the injection of cement milk for
consolidation of pile tips.
Asahi Kasei Corp. established a task force and fact-finding committee as well as an independent commission to aid in the investigation process, and on
October 22, 2015, Asahi Kasei Construction Materials Corp. reported its record of similar pile installation work over the past 10 years to Japan’s Ministry of
Land, Infrastructure, Transport and Tourism (MLIT).
On November 24, 2015, Asahi Kasei Construction Materials Corp. completed all possible investigation of whether or not there was manipulation of
data installation of precast concrete piles, and reported the results to the MLIT. Out of the 3,052 projects subject to investigation, manipulation of data was
identified in 360 projects.
On January 13, 2016, Asahi Kasei Construction Materials Corp. received instructions in accordance with Article 28, Paragraph 1 of the Construction
Business Act, an order which suspended operations in accordance with Article 28, Paragraph 3 of the Construction Business Act, and a recommendation in
accordance with Article 41, Paragraph 1 of the Construction Business Act from the Kanto Regional Development Bureau of the MLIT.
Regarding those projects where manipulation of data was identified, Asahi Kasei Construction Materials will cooperate with the contractors and the
owners of the buildings in efforts to confirm safety based on instructions from the MLIT. Where the Specific Administrative Agency has confirmed safety, the
Specific Administrative Agency will issue a report to the MLIT.
As a result of this matter, Asahi Kasei Corp. has recorded an extraordinary loss of approximately ¥1,456 million in the year ended March 31, 2016, as “loss
on piling business” for expenses related to the investigation, etc., of the manipulation of data.
Although there is potential for further effects on the consolidated results of Asahi Kasei Corp. which may emerge from the recording of an additional
reserve, etc., no such effect is reflected in the consolidated financial statements for the year ended March 31, 2016, due to the difficulty of judgment in the
rational estimate of the amount of financial impact from this matter as of the time of preparation of the consolidated financial statements.
Contingent liabilities at March 31, 2016 and 2015, arising in the ordinary course of business were as follows:
Loans guaranteed
Letters of awareness
Completion guarantees
Total
Millions of yen
Thousands of U.S. dollars
2016
¥36,808
—
11,989
¥48,797
2015
¥38,664
—
16,250
¥54,914
2016
$326,834
—
106,455
$433,289
The parent company and certain of its subsidiaries and affiliates are defendants in several pending lawsuits. However, based upon the information
currently available to both the Company and its legal counsel, management of the Company believes that any damages from such lawsuits will not have a
material impact to the Company’s consolidated financial statements.
84
Asahi Kasei Report 2016
(d) Deferred gain on property, plant and equipment deducted for tax purposes
The accumulated reduced-value entries, which are directly deducted from property, plant and equipment, as of March 31, 2016 and 2015, were ¥9,684
million (US$85,988 thousand) and ¥9,176 million, respectively. The breakdown of reduced-value entries as of March 31, 2016 and 2015, was as follows:
Buildings and structures
Machinery, equipment and vehicles
Land
Other
Total
Millions of yen
Thousands of U.S. dollars
2016
¥3,407
5,937
167
173
¥9,684
2015
¥3,442
5,394
167
173
¥9,176
2016
$30,252
52,717
1,483
1,536
$85,988
5. Notes to Consolidated Statements of Income
(a) Selling, general and administrative expenses
Major components of selling, general and administrative expenses for the years ended March 31, 2016 and 2015 were as follows:
Salaries and benefits
Research and development*
Freight and storage
Millions of yen
Thousands of U.S. dollars
2016
¥160,091
60,990
36,794
2015
¥148,306
57,896
36,091
2016
$1,421,515
541,556
326,709
* The aggregate amounts of research and development expenses included in manufacturing costs and selling, general and administrative expenses for the years ended March 31, 2016 and 2015, were ¥81,118
million (US$720,281 thousand) and ¥75,540 million, respectively.
(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, 2016 and 2015, were as follows:
Millions of yen
Thousands of U.S. dollars
2016
¥1,427
2015
¥2,142
2016
$12,671
(c) Gain on sales of noncurrent assets
Major components of gain on sales of noncurrent assets for the years ended March 31, 2016 and 2015, were as follows:
Land
Machinery
Other
Millions of yen
Thousands of U.S. dollars
2016
¥777
93
47
2015
¥176
184
21
2016
$6,899
826
417
(d) Loss on disposal of noncurrent assets
Loss on disposal of noncurrent assets for the years ended March 31, 2016 and 2015, 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.
Asahi Kasei Report 2016
85
(e) Impairment losses
Major components of impairment losses for the years ended March 31, 2016 and 2015, were as follows:
Millions of yen
Thousands of
U.S. dollars
Use
Asset class
Location
2016
2015
2016
Sales rights
Buildings, etc.
Buildings, etc.
Production facility for performance
paper
Production facility for petrochemicals
Joint sales rights of pharmaceutical
products
Underground uranium storage facility
Idle assets
Production facility for semiconductors Machinery and
equipment, etc.
Machinery and
equipment, etc.
Machinery and
equipment, etc.
Machinery and
equipment, etc.
Machinery and
equipment, etc.
Machinery and
equipment
Machinery and
equipment, etc.
Production facility for plastic raw
materials
Facility for wastewater recycling
Production facility for semiconductors
Others
Chiyoda-ku, Tokyo
Hyuga, Miyazaki
Fuji, Shizuoka, etc.
¥3,942
1,850
817
—
—
¥621
Nobeoka, Miyazaki
Gobo, Wakayama
Kurashiki, Okayama
Goshogawara,
Aomori
Ulsan, Korea
Jiangsu, China
Fuji, Shizuoka, Oita,
etc.
550
142
—
—
—
—
600
—
—
455
268
217
145
172
Item on the Consolidated
Statements of Income
Loss on discontinuation of
joint sales agreement
Impairment losses
Impairment losses
Impairment losses
Business structure improvement
expenses
Business structure improvement
expenses
Impairment losses
Impairment losses
Impairment losses
$35,003
16,427
7,254
4,884
1,261
—
—
—
—
5,328
Impairment losses and business
structure improvement expenses
Grouping of operating assets is based on managerial accounting categories, with consideration given to production process, geographic location, and
domain of authority for making investment decisions. Idle assets are recorded separately in each fixed assets class.
With respect to underground uranium storage facility, the book value was reduced to the recoverable amount due to disappearance of prospects for
future profit, and with respect to joint sales rights of pharmaceutical products, idle assets 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 facility for semiconductors, production facility for performance
paper and part of others, the book value was reduced to the recoverable amount due to diminished profitability. The recoverable amount is stated as value
for future usage, which is calculated based on discounted future cash flows within applicable discount rate of 6% as of March 31, 2016 and 2015.
Among the extraordinary losses under others, ¥324 million (US$2,877 thousand) and ¥168 million were recorded under business structure improvement
expenses for the years ended March 2016 and 2015, respectively.
(f) Business structure improvement expenses
Major components of business structure improvement expenses for the years ended March 31, 2016 and 2015, were as follows:
Impairment of fixed assets
Additional payment of retirement benefits due to application of early retirement, etc.
Loss on disposal and devaluation of inventory and others
Total
Millions of yen
Thousands of U.S. dollars
2016
¥ 466
110
3,029
¥3,606
2015
¥ 623
—
3,387
¥4,010
2016
$ 4,138
977
26,896
$32,019
(g) Loss on piling business
Asahi Kasei Construction Materials Corp., a consolidated subsidiary of Asahi Kasei Corp., submitted incorrect data within their pile installation report for
the precast concrete piles installed as a secondary subcontractor for the construction of a condominium complex in Yokohama, Kanagawa, Japan. There
was manipulation of ammeter data obtained when boring holes for installation, and manipulation of flowmeter data for the injection of cement milk for
consolidation of pile tips. As a result of this matter, Asahi Kasei Corp. has recorded an extraordinary loss in the year ended March 31, 2016, as “loss on piling
business” for expenses related to the investigation, etc., of the manipulation of such data.
(h) Loss on discontinuation of joint sales agreement
Millions of yen
Thousands of U.S. dollars
2016
¥3,942
1,303
22
¥5,266
2015
¥—
—
—
¥—
2016
$35,003
11,570
195
$46,759
Impairment losses
Cancellation fee
Other
Total
86
Asahi Kasei Report 2016
6. Notes to Consolidated Statements of Comprehensive Income
Recycling adjustment and tax effects on other comprehensive income for the years ended March 31, 2016 and 2015, were as follows:
Millions of yen
Thousands of U.S. dollars
2016
2015
2016
Net unrealized gain on other securities
Changes during the fiscal 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 fiscal year
Recycling adjustment
Adjustment on the acquisition cost of assets
Pre-tax effect
Tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment
Changes during the fiscal year
Recycling adjustment
Pre-tax effect
Tax effect
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Changes during the fiscal year
Recycling adjustment
Pre-tax effect
Tax effect
Remeasurements of defined benefit plans
¥ (26,559)
(7,879)
(34,438)
13,341
(21,098)
¥ 53,024
(2,689)
50,335
(12,389)
37,947
(5,649)
1,976
5,718
2,045
(527)
1,519
(49,549)
1,028
(48,522)
(338)
(48,860)
(50,607)
3,397
(47,210)
13,880
(33,331)
(2,037)
72
—
(1,965)
438
(1,526)
48,829
(24)
48,805
140
48,945
20,168
5,516
25,685
(8,588)
17,096
Share of other comprehensive income of affiliates accounted for using equity method
Changes during the fiscal year
Recycling adjustment
Share of other comprehensive income of affiliates accounted for using equity method
Total other comprehensive income
(3,363)
(204)
(3,567)
¥(105,337)
5,174
(49)
5,125
¥107,587
$(235,828)
(69,961)
(305,789)
118,460
(187,338)
(50,160)
17,546
50,773
18,158
(4,679)
13,488
(439,966)
9,128
(430,847)
(3,001)
433,848
(449,361)
30,163
(419,197)
123,246
(295,960)
(29,861)
(1,811)
(31,673)
$(935,331)
7. Notes to Consolidated Statements of Changes in Net Assets
For the year ended March 31, 2016
(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, 2015
Increase in number of shares
during the fiscal year
Decrease in number of shares
during the fiscal year
Number of shares
as of March 31, 2016
Thousands of shares
1,402,616
1,402,616
5,743
5,743
—
—
125
125
—
—
7
7
1,402,616
1,402,616
5,862
5,862
Notes: 1. The increase of 125 thousand shares in common stock of treasury stock was due to the purchase of shares in quantities of less than one share unit.
2. The decrease of 7 thousand shares in common stock of treasury stock was due to the sale of shares in quantities of less than one share unit.
Asahi Kasei Report 2016
87
(b) Dividends
i) Cash dividends paid
1) The following was resolved by the Board of Directors on May 12, 2015.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥13,969 million (US$124,037 thousand)
¥10.00 (US$0.09)
March 31, 2015
June 4, 2015
2) The following was resolved by the Board of Directors on November 6, 2015.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥13,968 million (US$124,028 thousand)
¥10.00 (US$0.09)
September 30, 2015
December 1, 2015
ii) Dividends for which the date of record falls within the fiscal year under review but the payment date occurs in the following fiscal year
The following was resolved by the Board of Directors on May 11, 2016.
Dividends for common stock
Total dividends
Source of dividends
Dividend per share
Date of record
Payment date
¥13,968 million (US$124,028 thousand)
Retained earnings
¥10.00 (US$0.09)
March 31, 2016
June 6, 2016
For the year ended March 31, 2015
(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, 2014
Increase in number of shares
during the fiscal year
Decrease in number of shares
during the fiscal year
Number of shares
as of March 31, 2015
Thousands of shares
1,402,616
1,402,616
5,231
5,231
—
—
522
522
—
—
10
10
1,402,616
1,402,616
5,743
5,743
Notes: 1. The increase of 522 thousand shares in common stock of treasury stock was due to the purchase of shares in quantities of less than one share unit.
2. The decrease of 10 thousand shares in common stock of treasury stock was due to the 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, 2014.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
* Including ¥8.00 ordinary dividend and ¥2.00 special dividend
¥13,974 million
¥10.00*
March 31, 2014
June 5, 2014
2) The following was resolved by the Board of Directors on November 5, 2014.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥12,573 million
¥9.00
September 30, 2014
December 1, 2014
ii) Dividends for which the date of record falls within the fiscal year under review but the payment date occurs in the following fiscal year
The following was resolved by the Board of Directors on May 12, 2015.
Dividends for common stock
Total dividends
Source of dividends
Dividend per share
Date of record
Payment date
¥13,969 million
Retained earnings
¥10.00
March 31, 2015
June 4, 2015
88
Asahi Kasei Report 2016
8. Notes to Consolidated Statements of Cash Flows
(a) Cash and cash equivalents
Reconciliation of cash and cash equivalents on the consolidated statements of cash flows to the amounts disclosed on the consolidated balance sheets at
March 31, 2016 and 2015, was as follows:
Cash and deposits
Time deposits with deposit term of over 3 months
Money market funds included in short-term investment securities
Cash and cash equivalents
Millions of yen
Thousands of U.S. dollars
2016
¥146,054
(2,281)
1,534
¥145,307
2015
¥123,821
(13,326)
1,802
¥112,297
2016
$1,296,874
(20,254)
13,621
$1,290,242
(b) Assets and liabilities of newly consolidated subsidiaries through acquisition of shares
Assets and liabilities of acquired companies (Polypore International, LP and its 22 consolidated subsidiaries) and net cash outflow for such acquisition is as
follows:
Current assets
Noncurrent assets
Goodwill
Current liabilities
Noncurrent liabilities
Non-controlling interests
Acquisition cost of shares
Cash and cash equivalents
Net cash used for acquisition
Millions of yen
Thousands of U.S. dollars
¥ 42,963
140,091
183,553
(56,555)
(99,826)
(184)
210,043
(20,759)
189,284
$ 381,486
1,243,926
1,629,844
(502,175)
(886,397)
(1,634)
1,865,059
(184,328)
1,680,732
Assets and liabilities of acquired company (Kyma Medical Technologies Ltd.) and net cash outflow for such acquisition is as follows:
Current assets
Noncurrent assets
Goodwill
Current liabilities
Noncurrent liabilities
Acquisition cost of shares
Account payables included in the acquisition price
Cash and cash equivalents
Net cash used for acquisition
9. Leases
(a) Financing lease transactions
Financing lease transactions without title transfer
Millions of yen
Thousands of U.S. dollars
¥ 185
1,313
3,406
(33)
(241)
4,631
(63)
(170)
4,397
$ 1,643
11,659
30,243
(293)
(2,140)
41,121
(559)
(1,510)
39,043
i) Components of lease assets are as follows:
1) Property, plant and equipment: Mainly model homes (buildings and structures) for housing business.
2) Intangible fixed assets: Software
ii) Depreciation of lease assets:
As stated in Note 2 “Significant accounting policies (c) Noncurrent assets and depreciation/amortization,” the financing lease transactions without title
transfer which occurred prior to March 31, 2008, are accounted for on a basis similar to an operating lease. For such leases, information for the cost and
related accumulated amortization, computed using the straight-line method over the term of the lease assuming such lease transactions accounted for as
an operating lease had been accounted for as a financing lease, is required to be disclosed. However, such disclosure is omitted due to immateriality.
(b) Operating lease transactions
Future lease payments for the non-cancelable portion of the Company’s operating leases at March 31, 2016 and 2015, were as follows:
Due within one year
Due after one year
Total
Millions of yen
Thousands of U.S. dollars
2016
¥ 5,414
5,255
¥10,668
2015
¥ 4,986
7,313
¥12,300
2016
$48,073
46,661
$94,726
Asahi Kasei Report 2016
89
10. Financial instruments
(a) Overview of financial instruments
i) Policy related to financial 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 financial 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 fluctuations of exchange rate and interest rate. Derivatives are not traded for speculative purposes.
ii) Components of financial 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 fields, operating receivables are not excessively concentrated on specific customers, but the parent company and each consolidated subsidiary
monitor and manage the credit condition of each customer.
Investment securities are exposed to the risk of fluctuations in market price, but they are mainly equity securities of companies with which the Company
has business relationships. These securities are held for the purpose of maintaining the business relationships. Fair value is periodically evaluated, and the
financial condition of the issuing company is monitored.
As operating liabilities, notes and accounts payable—trade generally have a payment term of 1 year or less.
Variable interest-rate borrowings are exposed to the risk of interest-rate fluctuations, but derivatives (interest-rate and currency swaps, interest-rate
swaps) are used as hedges to fix interest expenses for a portion of long-term variable interest-rate borrowings.
Operating receivables and operating liabilities include those denominated in currencies other than Japanese yen, and are thus exposed to the risk of
exchange-rate fluctuations. In order to minimize the effects of short-term exchange-rate fluctuations, the Company hedges with derivative transactions
(forward exchange contracts), in principle, within the range of the underlying receivables and liabilities amount.
Derivative transactions are exposed to the credit risk of transacting financial institutions, but the credit condition of those financial institutions is
reviewed through periodical monitoring. Such transactions are performed and managed in accordance with the Company’s internal regulations which
stipulate the related authority, procedures, limits, etc.
Borrowings are exposed to liquidity risk, but the parent company specifies standards for required on-hand funds based on the Company’s funding plans,
prepares and revises plans for cash receipts and disbursements as appropriate, and enters into commitment-line agreements with transacting financial
institutions to manage such risk.
Loan securitization in the housing business is exposed to the risk of interest-rate fluctuations 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 in order to reduce such risk.
iii) Supplementary explanation of fair value of financial instruments
The fair value of financial 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, condi-
tions, etc. The stated amount of contracts regarding derivative transactions included in Note 12 “Derivative financial instruments” is not itself an indication of
the market risk of the derivative transactions.
(b) Fair value of financial instruments
Amounts carried on the consolidated balance sheets, their fair values, and the differences between them as of March 31, 2016 and 2015, were as shown below.
Financial instruments whose fair values are deemed extremely difficult to determine are not included in this table (See Notes 2) and 3) below).
Millions of yen
2016
Fair value
¥146,054
Difference
¥ —
278,396
—
Carrying amount
¥146,054
280,095
(1,699)
278,396
10,890
183,672
16,607
¥635,618
¥126,653
273,418
32,735
40,000
134,801
1,456
8,032
¥617,096
¥ 354
5,985
183,672
16,604
¥630,711
¥126,653
273,418
32,735
40,650
137,008
1,465
8,088
¥620,017
¥ 354
(4,905)
—
(3)
¥(4,908)
¥ —
—
—
(650)
(2,207)
(9)
(55)
¥(2,921)
¥ —
Cash and deposits
Notes and accounts receivable—trade
Allowance for doubtful accounts (*1)
Short-term investment securities and investment securities
Investments in affiliates
Other securities
Long-term loans receivable
Total assets
Notes and accounts payable—trade
Short-term loans payable
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposits
Total liabilities
Derivative financial instruments (*2)
90
Asahi Kasei Report 2016
Cash and deposits
Notes and accounts receivable—trade
Allowance for doubtful accounts (*1)
Short-term investment securities and investment securities
Investment in affiliates
Other securities
Long-term loans receivable
Total assets
Notes and accounts payable—trade
Short-term loans payable
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposits
Total liabilities
Derivative financial instruments (*2)
Cash and deposits
Notes and accounts receivable—trade
Allowance for doubtful accounts (*1)
Short-term investment securities and investment securities
Investment in affiliates
Other securities
Long-term loans receivable
Total assets
Notes and accounts payable—trade
Short-term loans payable
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposits
Total liabilities
Derivative financial instruments (*2)
Millions of yen
2015
Fair value
¥123,821
Difference
¥ —
324,199
—
7,562
215,200
10,751
¥681,533
¥151,867
62,648
10,203
41,190
165,733
2,605
6,925
¥441,171
¥ (2,356)
Thousands of U.S. dollars
2016
Fair value
$1,296,874
(3,659)
—
(8)
¥(3,667)
¥ —
—
—
(1,190)
(1,966)
(2)
12
¥(3,146)
¥ —
Difference
$ —
2,471,994
—
53,143
1,630,900
147,434
$5,600,346
$1,124,605
2,427,793
290,668
360,948
1,216,551
13,008
71,817
$5,505,390
$ 3,143
(43,554)
—
(27)
$(43,580)
$ —
—
—
(5,772)
(19,597)
(80)
(488)
$(25,937)
$ —
Carrying amount
¥123,821
325,568
(1,369)
324,199
11,221
215,200
10,758
¥685,200
¥151,867
62,648
10,203
40,000
163,767
2,603
6,937
¥438,025
¥ (2,356)
Carrying amount
$1,296,874
2,487,080
(15,086)
2,471,994
96,697
1,630,900
147,460
$5,643,918
$1,124,605
2,427,793
290,668
355,177
1,196,954
12,928
71,319
$5,479,453
$ 3,143
(*1) This reduction represents specific allowance for doubtful accounts related to notes and
accounts receivable—trade.
(*2) The amounts represent net amount of assets and liabilities resulting from derivative transac-
tions. In the case of a net liability, the amount is shown in parentheses.
Note 1) Method to determine the estimated fair value of financial instruments; securities and
ii) Liabilities
1) Notes and Accounts payable—trade; short-term loans payable; commercial 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.
derivative financial instruments
i) Assets
1) Cash and deposits, notes and accounts receivable—trade
As their fair value approximates book value due to their short maturity, the corresponding book
value amount is used as fair value.
2) Short-term investment securities and investment securities
The stock exchange prices are used to determine fair value of traded stocks, and the correspond-
ing book value amount is used as fair value of money market funds, because their fair value
approximates book value. Refer to Note 11 “Marketable securities and investment securities” for
information on securities classified 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 reflect market
interest rates within a short term, book values 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 a 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.
3) Long-term loans payable
The carrying amounts shown include long-term loans payable that are scheduled for repayment
within one year of March 31, 2016 and 2015, amounting to ¥40,169 million (US$356,677 thou-
sand) and ¥33,367 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 reflect market interest rates within a short term.
Asahi Kasei Report 2016
91
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 flow over that period.
iii) Derivative transactions
Refer to Note 12 “Derivative financial instruments.”
Note 2) For equity investments in nonpublic companies, with a carrying amount as of March 31,
2016 and 2015, amounting to ¥48,453 million (US$430,233 thousand) and ¥61,594 million,
respectively, fair value is not included in short-term investment securities and investment
securities, as no quoted market price is available and it is deemed extremely difficult to
determine fair value due to the impossibility of estimating future cash flows.
Note 3) For investment securities, with a carrying amount as of March 31, 2016 and 2015, amount-
ing to ¥3,117 million (US$27,677 thousand) and ¥3,180 million, respectively, fair value is
not included in short-term investment securities and investment securities, as no quoted
market price is available and it is deemed extremely difficult to determine fair value due to
the impossibility of estimating future cash flows.
Note 4) For long-term guarantee deposits, the fair value of a portion having a carrying amount as
of March 31, 2016 and 2015, amounting to ¥12,098 million (US$107,423 thousand) and
¥12,209 million, respectively, is not included as no quoted market price is available and it
is deemed extremely difficult to determine fair value due to the impossibility of estimating
future cash flows.
Note 5) For monetary credits and securities with maturity, the amounts scheduled for redemption subsequent to the closing date are as follows:
Cash and deposits
Notes and accounts receivable—trade
Long-term loans receivable
Total
Cash and deposits
Notes and accounts receivable—trade
Long-term loans receivable
Total
Cash and deposits
Notes and accounts receivable—trade
Long-term loans receivable
Total
Millions of yen
2016
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
¥146,054
280,095
254
¥426,402
¥ —
—
16,353
¥16,353
¥—
—
—
¥—
¥—
—
—
¥—
Millions of yen
2015
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
¥123,821
325,568
806
¥450,196
¥ —
—
9,952
¥9,952
¥—
—
—
¥—
¥—
—
—
¥—
Thousands of U.S. dollars
2016
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
$1,296,874
2,487,080
2,255
$3,786,201
$ —
—
145,205
$145,205
$—
—
—
$—
$—
—
—
$—
Note 6) For bonds payable, long-term loans payable, lease obligations, and other interest-bearing debt, the amounts scheduled for repayment subsequent to the closing date are as follows.
Short-term loans
payable
Bonds payable
¥273,418
—
—
—
—
—
¥ —
20,000
—
20,000
—
—
Short-term loans
payable
Bonds payable
¥62,648
—
—
—
—
—
¥ —
—
20,000
—
20,000
—
Millions of yen
2016
Long-term loans
payable
¥40,169
18,941
49,616
12,028
4,436
9,611
Millions of yen
2015
Long-term loans
payable
¥33,367
41,046
20,566
49,468
11,208
8,112
Lease obligations
Total
¥919
280
118
83
55
1
Lease obligations
¥1,383
908
227
59
22
2
¥314,506
39,221
49,734
32,111
4,491
9,612
Total
¥97,398
41,954
40,793
49,527
31,230
8,114
Year ending March 31
2017
2018
2019
2020
2021
2022 and thereafter
Year ending March 31
2016
2017
2018
2019
2020
2021 and thereafter
92
Asahi Kasei Report 2016
Year ending March 31
2017
2018
2019
2020
2021
2022 and thereafter
Short-term loans
payable
Bonds payable
$2,427,793
—
—
—
—
—
$ —
177,588
—
177,588
—
—
Thousands of U.S. dollars
2016
Long-term loans
payable
$356,677
168,185
440,561
106,802
39,389
85,340
Lease obligations
Total
$8,160
2,486
1,048
737
488
9
$2,792,630
348,260
441,609
285,127
39,877
85,349
11. Marketable securities and investment securities
(a) Other securities with available fair value
The aggregate cost, carrying amount which was identical to fair value, and gross unrealized gains and losses of debt and equity securities classified as other
securities for which fair values were available at March 31, 2016 and 2015, were as follows:
Securities with unrealized gains:
Equity securities
Others
Subtotal
Securities with unrealized losses:
Equity securities
Others
Subtotal
Total
Securities with unrealized gains:
Equity securities
Others
Subtotal
Securities with unrealized losses:
Equity securities
Others
Subtotal
Total
Securities with unrealized gains:
Equity securities
Others
Subtotal
Securities with unrealized losses:
Equity securities
Others
Subtotal
Total
Millions of yen
2016
Cost
¥36,960
—
36,960
12,439
1,534
13,973
¥50,934
Millions of yen
2015
Cost
¥39,063
—
39,063
7,060
1,802
8,862
¥47,925
Thousands of U.S. dollars
2016
Cost
$328,183
—
328,183
110,451
13,621
124,072
$452,264
Unrealized gains
(losses)
¥135,107
—
135,107
(2,369)
—
(2,369)
¥132,738
Unrealized gains
(losses)
¥167,450
—
167,450
(176)
—
(176)
¥167,274
Unrealized gains
(losses)
$1,199,671
—
1,199,671
(21,035)
—
(21,035)
$1,178,636
Carrying
amount
¥172,068
—
172,068
10,070
1,534
11,604
¥183,672
Carrying
amount
¥206,513
—
206,513
6,884
1,802
8,686
¥215,200
Carrying
amount
$1,527,864
—
1,527,864
89,416
13,621
103,037
$1,630,900
Asahi Kasei Report 2016
93
(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, 2016 and 2015, were as follows:
Selling amount
Gain on sales of securities
Loss on sales of securities
Millions of yen
Thousands of U.S. dollars
2016
¥10,396
8,275
—
2015
¥3,005
2,756
—
2016
$92,310
73,477
—
(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 year ended March 31, 2016, was ¥924 million (US$8,205
thousand), which is the sum of ¥796 million (US$7,068 thousand) for equity securities of unconsolidated subsidiaries and affiliates, and ¥127 million
(US$1,128 thousand) for other securities, and for the year ended March 31, 2015, ¥1,656 million, which is the sum of ¥1,649 million for equity securities of
unconsolidated subsidiaries and affiliates, and ¥7 million for other securities. Among the loss on other devaluation of investment securities for the year
ended March 31, 2016, ¥561 million (US$4,981 thousand) was recorded under business structure improvement expenses.
12. Derivative financial instruments
(a) Derivative financial instruments for which hedge accounting is not applied
i) Foreign exchange forward contracts
Classification
Items
Amount of contract
Off-market transactions
Foreign exchange forward contracts
Millions of yen
2016
Amount of contract
over 1 year
Fair value
Profit (loss) from
valuation
Selling
U.S. dollar
Euro
Thai baht
Singapore dollar
Buying
U.S. dollar
Euro
Thai baht
Total
¥21,694
6,137
1,115
396
2,679
0
9
¥32,030
¥ —
—
—
—
728
—
—
¥728
¥ 698
16
(0)
40
(148)
(0)
(0)
¥ 605
¥ 698
16
(0)
40
(148)
(0)
(0)
¥ 605
Classification
Items
Amount of contract
Off-market transactions
Foreign exchange forward contracts
Millions of yen
2015
Amount of contract
over 1 year
Fair value
Profit (loss) from
valuation
Selling
U.S. dollar
Euro
Thai baht
Singapore dollar
Buying
U.S. dollar
Euro
Thai baht
Total
¥21,592
6,486
988
—
2,672
—
—
¥31,738
¥ —
—
—
—
260
—
—
¥260
¥(332)
135
(27)
—
(263)
—
—
¥(486)
¥(332)
135
(27)
—
(263)
—
—
¥(486)
94
Asahi Kasei Report 2016
Classification
Items
Amount of contract
Off-market transactions
Foreign exchange forward contracts
Thousands of U.S. dollars
2016
Amount of contract
over 1 year
Fair value
Profit (loss) from
valuation
Selling
U.S. dollar
Euro
Thai baht
Singapore dollar
Buying
U.S. dollar
Euro
Thai baht
Total
$192,630
54,493
9,901
3,516
23,788
0
80
$284,408
$ —
—
—
—
6,464
—
—
$6,464
$ 6,198
142
(0)
355
(1,314)
(0)
(0)
$ 5,372
(b) Derivative financial instruments for which hedge accounting is applied
i) Foreign exchange forward contracts
Classification
Items
Hedged assets/liabilities
Amount of contract
Principle-based accounting
Foreign exchange forward contracts
Millions of yen
2016
Amount of contract
over 1 year
Selling
U.S. dollar
Euro
Singapore dollar
Buying
U.S. dollar
Euro
Thai baht
Singapore dollar
U.S. dollar
Total
Accounts receivable—trade
Accounts receivable—trade
Accounts receivable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Investment securities
¥2,953
111
289
2,018
21
177
29
—
¥5,596
¥—
—
—
—
—
—
—
—
¥—
Classification
Items
Hedged assets/liabilities
Amount of contract
Principle-based accounting
Foreign exchange forward contracts
Millions of yen
2015
Amount of contract
over 1 year
Selling
U.S. dollar
Euro
Buying
U.S. dollar
Thai baht
U.S. dollar
Total
Accounts receivable—trade
Accounts receivable—trade
Accounts payable—trade
Accounts payable—trade
Investment securities
¥ 2,039
—
1,791
55
195,205
¥199,089
¥—
—
—
—
—
¥—
$ 6,198
142
(0)
355
(1,314)
(0)
(0)
$ 5,372
Fair value
¥(170)
(2)
(12)
(62)
(0)
(6)
1
—
¥(251)
Fair value
¥ 43
—
79
2
(1,995)
¥(1,870)
Asahi Kasei Report 2016
95
Classification
Items
Hedged assets/liabilities
Amount of contract
Principle-based accounting
Foreign exchange forward contracts
Thousands of U.S. dollars
2016
Amount of contract
over 1 year
Selling
U.S. dollar
Euro
Singapore dollar
Buying
U.S. dollar
Euro
Thai baht
Singapore dollar
U.S. dollar
Total
Accounts receivable—trade
Accounts receivable—trade
Accounts receivable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Investment securities
$26,221
986
2,566
17,919
186
1,572
258
—
$49,689
$—
—
—
—
—
—
—
—
$—
ii) Interest-rate swaps, and interest-rate and currency swaps
Classification
Items
Hedged assets/liabilities
Amount of contract
Millions of yen
2016
Amount of contract
over 1 year
Special treatment
for interest-rate swaps
Special treatment
for interest-rate
and currency swaps
Interest-rate swaps
Pay fixed/receive floating
Interest-rate and currency swaps
U.S. dollar receive floating/
Thai baht pay fixed
Total
Long-term loans payable
¥76,871
¥64,084
Long-term loans payable
477
¥77,349
318
¥64,403
Millions of yen
Fair value
$(1,510)
(18)
(107)
(551)
(0)
(53)
9
—
$(2,229)
Fair value
(*)
(*)
¥—
Classification
Items
Hedged assets/liabilities
Amount of contract
2015
Amount of contract
over 1 year
Fair value
Special treatment
for interest-rate swaps
Special treatment
for interest-rate
and currency swaps
Interest-rate swaps
Pay fixed/receive floating
Interest-rate and currency swaps
U.S. dollar receive floating/
Thai baht pay fixed
Total
Long-term loans payable
¥90,425
¥77,122
Long-term loans payable
—
¥90,425
—
¥77,122
Classification
Items
Hedged assets/liabilities
Amount of contract
Thousands of U.S. dollars
2016
Amount of contract
over 1 year
Special treatment
for interest-rate swaps
Special treatment
for interest-rate
and currency swaps
Interest-rate swaps
Pay fixed/receive floating
Interest-rate and currency swaps
U.S. dollar receive floating/
Thai baht pay fixed
Total
Long-term loans payable
$682,570
$569,029
Long-term loans payable
4,235
$686,814
2,824
$571,861
(*)
—
¥—
Fair value
(*)
—
$—
(*) Fair value of interest-rate swaps and interest-rate and currency swaps, for which special treatment is applied, is included in fair value of the corresponding long-term loans payable for which hedge account-
ing is applied.
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Asahi Kasei Report 2016
13. Provision for retirement benefits
Upon terminating employment, employees of the parent company and its major subsidiaries in Japan are entitled, under most circumstances, to lump-sum
severance indemnities and/or pension payments determined by reference mainly to their current basic rate of pay and length of service. Additional benefits
may be granted to employees depending on the conditions under which termination of employment occurs. Certain foreign subsidiaries have defined
benefit pension plans or defined contribution plans.
The obligation for these severance indemnity benefits is provided for through accruals, contributory funded defined benefit pension plans, contributory
funded defined benefit enterprise pension plans, and non-contributory funded tax-qualified pension plans.
Certain consolidated subsidiaries adopt the simplified method in calculating expected defined benefit liability.
Reconciliations of beginning and ending balances of projected benefit obligations for the fiscal years ended March 31, 2016 and 2015, were as follows:
Millions of yen
Thousands of U.S. dollars
Beginning balance of the projected benefit obligations
Cumulative effect of changes in accounting polices
Restated balance
Service cost
Interest cost
Actuarial gains/losses
Payment of retirement benefits
Increase from changes in scope of consolidation
Other
Ending balance of the projected benefit obligations
2016
¥352,813
—
352,813
13,604
3,439
44,020
(18,549)
3,101
160
¥398,588
2015
¥329,869
23,336
353,205
13,624
3,431
(191)
(17,558)
—
302
¥352,813
2016
$3,132,774
—
3,132,774
120,796
30,536
390,872
(164,704)
27,535
1,421
$3,539,229
Reconciliations of beginning and ending balances of plan assets for the fiscal years ended March 31, 2016 and 2015, were as follows:
Beginning balance of plan assets
Expected return
Actuarial gains/losses
Contributions
Payment of retirement benefits
Other
Ending balance of plan assets
Millions of yen
Thousands of U.S. dollars
2016
¥213,707
5,311
(6,598)
10,200
(10,146)
(186)
¥212,288
2015
¥188,715
4,717
19,977
10,015
(9,915)
198
¥213,707
2016
$1,897,594
47,159
(58,586)
90,570
(90,091)
(1,652)
$1,884,994
Reconciliations of ending balance of projected benefit obligations and the plan assets, and of net defined benefit liability and net defined benefit asset,
as recorded in the consolidated balance sheet at March 31, 2016 and 2015, were as follows:
Projected benefit obligations of funded plans
Plan assets
Subtotal
Projected benefit obligations of unfunded plans
Net of liability and asset that have been recorded in the consolidated balance sheet
Net defined benefit liability
Net defined benefit asset
Net of liability and asset that have been recorded in the consolidated balance sheet
Millions of yen
Thousands of U.S. dollars
2016
¥ 255,432
(212,288)
43,145
143,155
¥ 186,300
¥ 186,300
—
¥ 186,300
2015
¥ 219,775
(213,707)
6,068
133,038
¥ 139,106
¥ 142,035
(2,929)
¥ 139,106
2016
$ 2,268,087
(1,884,994)
383,102
1,271,133
$ 1,654,235
$ 1,654,235
—
$ 1,654,235
Periodic retirement benefit expenses for employees and the breakdown of items for the years ended March 31, 2016 and 2015, were as follows:
Service cost (net of employee contributions)
Interest cost
Expected return on plan assets
Amortization of actuarial gains/losses
Amortization of prior service costs
Additional retirement benefits and other
Retirement benefit expenses of defined benefit plans
Millions of yen
Thousands of U.S. dollars
2016
¥11,967
3,439
(5,311)
3,266
142
452
¥13,956
2015
¥12,037
3,431
(4,717)
5,375
142
992
¥17,259
2016
$106,260
30,536
(47,159)
29,000
1,261
4,013
$123,921
Asahi Kasei Report 2016
97
The components of other comprehensive income on defined benefit plans for the fiscal years ended March 31, 2016 and 2015, were as follows:
Prior service costs
Actuarial gains/losses
Total
Millions of yen
Thousands of U.S. dollars
2016
¥ 142
(47,352)
¥(47,210)
2015
¥ 142
25,543
¥25,685
2016
$ 1,261
(420,458)
$(419,197)
Accumulated other comprehensive income on defined benefit plans at March 31, 2016 and 2015, was follows:
Unrecognized prior service costs
Unrecognized actuarial gains/losses
Total
Share by major classifications for plan assets at March 31, 2016 and 2015, was as follows:
Millions of yen
Thousands of U.S. dollars
2016
¥ 361
58,468
¥58,829
2015
¥ 503
11,116
¥11,619
2016
$ 3,205
519,162
$522,367
Bond
Stock
Alternative investments
Life insurance
Cash and deposits
Other
Total
2016
36%
21
16
14
10
3
100%
2015
43%
24
16
12
4
1
100%
Note: Alternative investments include mainly investments in real estate and hedge funds.
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 at March 31, 2016 and 2015, were as follows:
Discount rate
The long-term rate of expected return on plan assets
Expected rate of increase in salary
2016
Mainly 0.1%
Mainly 2.5%
2.3–7.1%
2015
Mainly 0.9%
Mainly 2.5%
2.3–7.3%
Required payments to defined contribution plans at March 31, 2016, amounted to ¥1,416 million (US$12,573 thousand), and at March 31, 2015,
amounted to ¥774 million.
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Asahi Kasei Report 2016
14. Taxes
Income taxes applicable to the parent company and subsidiaries in Japan include (1) corporation tax, (2) enterprise tax, and (3) inhabitants tax.
Significant components of deferred tax assets and liabilities at March 31, 2016 and 2015, were as follows:
Millions of yen
Thousands of U.S. dollars
2016
2015
2016
Deferred tax assets:
Net defined benefit liability
Tax loss carry forwards
Accrued bonuses
Foreign tax credit carry forwards
Impairment losses
Loss on disposal of noncurrent assets
Unrealized gain on noncurrent assets and others
Depreciation
Accrued enterprise tax
Unrealized loss on investment securities
Provision for periodic repairs
Provision for product warranties
Devaluation of inventories
Allowance for doubtful accounts
Asset retirement obligations
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:
Identified intangible assets during business combination
Unrealized gain on other securities
Depreciation—overseas subsidiaries
Deferred gain on property, plant and equipment
Accelerated depreciation
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)
¥ 57,150
8,105
7,682
5,319
4,332
4,198
4,004
2,696
2,074
2,073
1,283
1,168
1,057
821
813
238
198
19
9,742
112,969
(16,294)
96,676
(53,707)
(42,075)
(13,158)
(9,037)
(137)
(5,382)
(123,496)
¥ (26,820)
¥ 44,782
15,474
8,125
189
4,180
4,071
4,481
2,968
1,537
2,553
1,198
1,261
1,217
758
918
313
115
678
10,934
105,753
(19,314)
86,439
(34,704)
(55,582)
(5,149)
(9,406)
(203)
(6,287)
(111,330)
¥ (24,891)
$ 507,459
71,968
68,212
47,230
38,466
37,276
35,553
23,939
18,416
18,407
11,392
10,371
9,386
7,290
7,219
2,113
1,758
169
86,503
1,003,099
(144,681)
858,427
(476,887)
(373,601)
(116,835)
(80,243)
(1,216)
(47,789)
(1,096,573)
$ (238,146)
Net deferred tax assets (liabilities) at March 31, 2016 and 2015, were included in the following line items on the consolidated balance sheets.
Current assets—deferred tax assets
Noncurrent assets—deferred tax assets
Current liabilities—other
Noncurrent liabilities—deferred tax liabilities
Millions of yen
Thousands of U.S. dollars
2016
¥ 18,133
20,098
(120)
(64,930)
2015
¥ 21,707
11,351
(7)
(57,943)
2016
$ 161,010
178,459
(1,066)
(576,541)
In the fiscal year ended March 31, 2016, the foreign tax credit carry forwards, which had previously been included in other, are reported separately due
to their materiality. The figure shown as other for the fiscal year ended March 31, 2015, has been restated accordingly.
Asahi Kasei Report 2016
99
Reconciliation of the differences between the statutory tax rate and the effective income tax rate for the years ended March 31, 2016 and 2015, 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 affiliates
Undistributed earnings of foreign subsidiaries
Difference of tax rates for foreign subsidiaries
Valuation allowance
Decrease in deferred tax assets due to the change in statutory tax rate
Other
Effective income tax rate
2016
33.1%
1.1
0.3
(4.6)
3.5
0.2
(0.1)
(1.0)
0.7
1.9
1.1
36.2%
2015
35.6%
0.7
0.3
(4.2)
2.1
(0.4)
0.4
(2.7)
(1.6)
3.2
(0.8)
32.5%
The “Act for partial Revision of the Income Tax Act etc.” (Act No. 15 of 2016) and “Act for Partial Revision of the Local Tax Act, etc.” (Act No. 13 of 2016)
were issued on March 29, 2016, and applied from the fiscal year beginning on or after April 1, 2016.
In accordance with this change, the statutory effective tax rate applied in calculating deferred tax assets and liabilities was changed from 32.3% to the
tax rate as follows depending on the expected timing of reversal for each temporary difference:
Expected timing of reversal
April 1, 2016, through March 31, 2018
April 1, 2018, onward
As a result of this change, deferred tax assets (after netting deferred tax liabilities) decreased by ¥1,114 million (US$9,892 thousand), income taxes—
Tax rate
30.9%
30.6%
deferred increased by ¥2,687 million (US$23,859 thousand), net unrealized gain on other securities increased by ¥2,265 million (US$20,111 thousand),
deferred gains or losses on hedges increased by ¥2 million (US$18 thousand), and remeasurements of defined benefit plans increased by ¥694 million
(US$6,162 thousand) in the consolidated financial statements for the fiscal year ended March 31, 2016.
15. Business combinations
Business combinations accounted for by the purchase method were as
follows:
1. Polypore International, Inc.
(a) Outline of business combination
i) Name of counterparty
Polypore International, Inc.
ii) Nature of the businesses
Development, manufacture, and sale of polymer membranes
iii) Main reasons for the acquisition
a. To develop more innovative products for use in various fields in the
battery separator business which can expect further growth through
joint R&D, mutual technology provision, etc. between the Company and
Polypore International, Inc.
b. To further accelerate the globalization of the Company’s Hipore™
business by utilizing global product supply and marketing network of
Polypore International, Inc.
c. To enter the lead-acid battery separator business which can provide
long-term stable earnings contribution by supplying Daramic™ brand
products of Polypore International, Inc. Also, to enable the provision
of a broader range of products and technologies in the lithium-ion
battery separator business where future growth is expected, including in
automotive applications, by supplying Celgard™ brand products.
iv) The acquisition date
August 26, 2015
v) Statutory form of business combination
Transfer of shares for cash as consideration
vi) Name of company after transaction
Polypore International, LP (Changed on March 31, 2016, due to conversion
to limited partnership)
vii) Acquired voting right
Voting right before the acquisition
Voting right after the acquisition
0%
100%
viii) Basic means of materializing the acquisition
Stock purchase for cash as consideration by a special purpose subsidiary of
the Company.
(b) The period of acquiree’s results included in the consolidated
financial statements
From August 26, 2015, to March 31, 2016
(c) Cost of acquisition and details
Stock purchase price
Purchase price
Millions of yen
Thousands of U.S. dollars
¥210,043
¥210,043
$1,865,059
$1,865,059
(d) Major acquisition related costs
Advisory fees and others
¥2,185 million (US$19,402 thousand)
(e) The amount of goodwill, measurement principle, amortization
method and useful life
i) Amount of goodwill
¥183,553 million (US$1,629,844 thousand)
ii) Measurement principle
Goodwill is measured as the excess of the purchase price over the fair
value of identifiable assets acquired and liabilities assumed.
iii) Amortization method and useful life
Straight-line method over 20 years
(f) Details of assets acquired and liabilities assumed as of the
acquisition date
Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities
Millions of yen
Thousands of U.S. dollars
¥ 42,963
140,091
¥183,054
¥ 56,555
99,826
¥156,380
$ 381,486
1,243,926
$1,625,413
$ 502,175
886,397
$1,388,563
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Asahi Kasei Report 2016
(g) Amount of identifiable intangible assets other than goodwill, its
(e) The amount of goodwill, measurement principle, amortization
details and major weighted average useful life
method and useful life
i) Purchase price allocated to intangible assets and its major items
Millions of yen
Thousands of U.S. dollars
i) Amount of goodwill
¥3,406 million (US$30,243 thousand)
ii) Measurement principle
Goodwill is measured as the excess of the purchase price over the fair
value of identifiable assets acquired and liabilities assumed.
iii) Amortization method and useful life
Straight-line method over 20 years
(f) Details of assets acquired and liabilities assumed as of the
acquisition date
Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities
Millions of yen
Thousands of U.S. dollars
¥ 185
1,313
¥1,498
¥ 33
241
¥ 274
$ 1,643
11,659
$13,301
$ 293
2,140
$ 2,433
(g) Nature of contingent consideration stipulated in the share
purchase agreement and its accounting treatment in the
subsequent period
i) Nature of contingent consideration
The payment amount of contingent consideration depends on the degree
of achievement of a specified performance metric after the acquisition date.
ii) Accounting treatment in the subsequent period
The Company will recognize the variable portion of contingent consider-
ation in accordance with accounting standards generally accepted in the
United States.
(h) Amount of identifiable intangible assets other than goodwill, its
details and major weighted average useful life
i) Purchase price allocated to intangible assets and its major items
Millions of yen
Thousands of U.S. dollars
In-process R&D
¥1,271
$11,286
ii) Major weighted average useful life
In-process R&D
15 years
(i) Pro forma effects on the consolidated statements of income
assuming the business combination had occurred at the
beginning of the fiscal year, and its measurement
Information is omitted due to immateriality. This note is not audited.
Customer-related assets
Trademarks
Technology-related assets
In-process R&D
¥57,982
10,770
9,317
2,533
ii) Major weighted average useful life
Customer-related assets
Trademarks
Technology-related assets
In-process R&D
Total
$514,846
95,631
82,730
22,492
20 years
20 years
15 years
20 years
19 years
(h) Pro forma effects on the consolidated statements of income
assuming the business combination had occurred at the
beginning of the fiscal year, and its measurement
Information is omitted due to immateriality. This note is not audited.
2. Kyma Medical Technologies Ltd.
(a) Outline of business combination
i) Name of acquiree
Kyma Medical Technologies Ltd.
ii) Nature of the businesses
Development of technology for monitoring of cardiac patients
iii) Main reasons for the acquisition
a. To add technology to measure early signs of congestive heart failure.
b. To further enrich the remote cardiac monitoring technology of
ZOLL Medical Corporation using the technology of Kyma Medical
Technologies Ltd., with a future expectation that combination with
technology of Kyma Medical Technologies Ltd. may enable perfor-
mance enhancement of the LifeVest™ of ZOLL Medical Corporation.
c. To use the marketing channels of ZOLL Medical Corporation to achieve
greater market penetration of technology of Kyma Medical Technologies
Ltd.
iv) The acquisition date
September 16, 2015
v) Statutory form of business combination
Stock purchase for cash as consideration
vi) Name of company after transaction
Kyma Medical Technologies Ltd.
vii) Acquired voting right
Voting right before the acquisition
Voting right after the acquisition
0%
100%
viii) Basic means of materializing the acquisition
Stock purchase for cash as consideration by a consolidated subsidiary of
the Company.
(b) The period of acquiree’s results included in the consolidated
financial statements
From September 16, 2015, to March 31, 2016
(c) Cost of acquisition and details
Stock purchase price
Purchase price
Millions of yen
Thousands of U.S. dollars
¥4,631
¥4,631
$41,121
$41,121
Note: Stock purchase price includes ¥1,270 million (US$11,277 thousand) of contingent consider-
ation (fair value).
(d) Major acquisition related costs
Advisory fees and others
¥117 million (US$1,039 thousand)
Asahi Kasei Report 2016
101
16. 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 offices, 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 offices, commitments pertaining to restoration to original state before vacating
are recognized as asset retirement obligations. However, instead of recording them as aforementioned asset retirement obligations under liabilities, 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 fiscal year ended March 31, 2016, 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, inflation rate of 0.0% to 4.1%, and discount
rate of 0.0% to 6.4%.
(c) Increase (decrease) in the total amount of asset retirement obligations in the fiscal years ended March 31, 2016 and 2015
Balance at beginning of year
Increase due to asset retirement obligations accrued
Adjustment due to passage of time
Increase due to accounting estimates*
Decrease due to fulfillment of asset retirement obligations
Increase (decrease) due to foreign exchange fluctuation
Balance at end of year
Millions of yen
Thousands of U.S. dollars
2016
¥4,039
200
133
—
(193)
(131)
¥4,047
2015
¥4,050
332
123
18
(513)
29
¥4,039
2016
$35,864
1,776
1,181
—
(1,714)
(1,163)
$35,935
* 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 fiscal years ended March 31, 2016 and 2015, 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
17. Business segment information
(a) Overview of reportable segments
The Company’s business segments are based on organizational units
for which separate financial information is available, and the Board of
Directors carries out periodic review to allocate management resources
and evaluate business performance.
The Company is organized under a holding company configuration
with core operating companies performing operations in four business
fields. Each core operating company lays out strategy and develops busi-
ness activities in Japan and abroad.
The Company consists of four segments identified by business
fields, including “Chemicals & Fibers,” “Homes & Construction Materials,”
“Electronics,” and “Health Care.”
Main products of the four reportable segments are as follows:
Chemicals & Fibers segment
Chemicals business
The Company manufactures, processes, and sells petrochemical products
(such as nitric acid, caustic soda, acrylonitrile, styrene, methyl methacrylate
(MMA), acrylic resin, Suntec™ polyethylene, and polystyrene), performance
polymer products (such as Stylac™-AS styrene-acrylonitrile, Stylac™-ABS
acrylonitrile-butadiene-styrene, Tenac™ polyacetal, Xyron™ modified poly-
phenylene ether (mPPE), adipic acid, Leona™ polyamide 66, and synthetic
rubber), and specialty products (such as coating materials, latex, Ceolus™
microcrystalline cellulose, explosives, explosion-bonded metal clad,
Microza™ UF and MF membranes and systems, ion-exchange membranes
and electrolysis systems, Saran Wrap™ cling film, Ziploc™ storage bags, and
plastic films, sheets, and foams).
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Asahi Kasei Report 2016
Millions of yen
Thousands of U.S. dollars
2016
¥1,650
126
(43)
¥1,733
2015
¥1,652
14
(17)
¥1,650
2016
$14,651
1,119
(382)
$15,388
Fibers business
The Company manufactures, processes, and sells Roica™ elastic polyure-
thane filament, Bemberg™ cupro fiber, nonwoven fabrics (such as Eltas™
spunbond and Lamous™ artificial suede), and Leona™ nylon 66 filament.
Homes & Construction Materials segment
Homes business
The Company constructs Hebel Haus™ unit homes and Hebel Maison™
apartments, and operates real estate businesses (such as management of
Hebel Maison™ rental units, Atlas™ condominiums, Hebel Town™ housing
developments, and brokerage of used Hebel Haus™ homes), remodeling
businesses (such as exterior wall refurbishing, reroofing, redesign, interior
renovation, and solar panel installation), and financial and other services
(such as mortgage financing, etc.).
Construction Materials business
The Company manufactures and sells Hebel™ and Hebel Powerboard™
autoclaved aerated concrete (AAC) panels, Neoma™ and Jupii™ phenolic
foam insulation panels, Eazet™, ATT Column™, and other piling systems,
and BasePack™ column base attachment systems.
Electronics segment
Electronics business
The Company manufactures and sells mixed-signal LSIs, Hall elements,
Hipore™ and Celgard™ Li-ion battery separators, Daramic™ lead-acid
battery separator, photomask pellicles, APR™ photosensitive resin and
printing plate making systems, Pimel™ photosensitive polyimide precursor,
Sunfort™ photosensitive dry film, and glass fabric for printed wiring boards.
Health Care segment
Health Care business
The Company manufactures and sells pharmaceuticals (such as Teribone™, Recomodulin™, Elcitonin™, Flivas™, Toledomin™, and Bredinin™), Lucica™ GA-L
assay kits, L-series enriched liquid diets, APS™ polysulfone-membrane artificial kidneys, therapeutic apheresis devices, Planova™ virus removal filters, and
Sepacell™ leukocyte reduction filters.
Critical Care business
The Company manufactures and sells defibrillators for medical professionals, LifeVest™ wearable defibrillators, ZOLL AED Plus™ automated external defibril-
lators, and IVTM—Thermogard XP™ intravascular temperature management systems.
(b) Methods to determine net sales, income or loss, assets, and other items by reportable business segment
Profit 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
2016
Sales:
External customers
Intersegment
Total
Operating income
Assets
Other items
Depreciation (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and
equipment, and intangible assets
Chemicals &
Fibers
Homes &
Construction
Materials
Electronics
Health Care
Subtotal
Others (Note 1)
Total
¥835,582
12,341
847,922
68,948
737,604
37,435
517
31,802
¥632,418
53
632,472
71,000
449,289
¥174,477
367
174,844
6,889
563,680
¥285,404
48
285,452
36,235
474,265
¥1,927,882
12,809
1,940,691
183,072
2,224,838
¥13,032
23,728
36,761
553
62,613
¥1,940,914
36,538
1,977,452
183,625
2,287,451
9,529
—
17,275
5,369
21,539
9,646
85,778
15,533
1,251
288
87,030
15,821
—
333
—
32,135
17,398
49,534
43,669
11,947
16,708
19,382
91,706
1,513
93,220
Notes: 1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffing operations.
2. Amortization of goodwill is not included.
Chemicals &
Fibers
Homes &
Construction
Materials
¥954,623
18,216
972,838
64,624
810,787
35,655
484
46,243
¥603,786
68
603,853
63,037
414,028
9,430
—
—
Millions of yen
2015
Electronics
Health Care
Subtotal
Others (Note 1)
Total
¥150,388
544
150,932
14,300
179,102
13,874
17
304
¥257,133
41
257,174
30,845
501,990
20,104
8,555
¥1,965,929
18,868
1,984,798
172,806
1,905,906
79,064
9,056
¥20,476
22,283
42,760
949
62,874
1,094
264
—
46,547
17,013
¥1,986,405
41,152
2,027,557
173,755
1,968,780
80,158
9,320
63,560
82,165
Sales:
External customers
Intersegment
Total
Operating income
Assets
Other items
Depreciation (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and
equipment, and intangible assets
41,718
10,864
11,600
16,595
80,776
1,389
Notes: 1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffing operations.
2. Amortization of goodwill is not included.
Asahi Kasei Report 2016
103
Thousands of U.S. dollars
2016
Chemicals &
Fibers
$7,419,481
109,581
7,529,053
612,218
6,549,494
332,401
4,591
282,383
Homes &
Construction
Materials
$5,615,503
471
5,615,983
630,439
3,989,425
Electronics
Health Care
Subtotal
Others (Note 1)
Total
$1,549,254
3,259
1,552,513
61,170
5,005,150
$2,534,221
426
2,534,647
321,746
4,211,197
$17,118,469
113,736
17,232,206
1,625,573
19,755,265
$115,717
210,691
326,416
4,910
555,967
$17,234,186
324,436
17,558,622
1,630,483
20,311,232
84,612
—
153,392
47,674
191,254
85,651
761,659
137,924
11,108
2,557
772,776
140,481
—
2,957
—
285,340
154,484
439,833
387,755
106,082
148,357
172,101
814,296
13,435
827,739
Sales:
External customers
Intersegment
Total
Operating income
Assets
Other items
Depreciation (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and
equipment, and intangible assets
Notes: 1. The “Others” category includes plant engineering and environmental engineering, research and analysis, and employment agency/staffing operations.
2. Amortization of goodwill is not included.
(d) Reconciliation of differences between total amounts of reportable segments and amounts appearing in the consolidated financial
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
Thousands of U.S. dollars
2016
¥1,940,691
36,761
(36,538)
¥1,940,914
2015
¥1,984,798
42,760
(41,152)
¥1,986,405
2016
$17,232,206
326,416
(324,436)
$17,234,186
Millions of yen
Thousands of U.S. dollars
2016
¥183,072
553
170
(18,592)
¥165,203
2015
¥172,806
949
1,087
(16,910)
¥157,933
2016
$1,625,573
4,910
1,510
(165,086)
$1,466,906
* Corporate expenses, etc. include corporate revenue, basic research expense, and group management expense, etc. which are not allocated to reporting segments.
Assets
Total of reporting segments
Assets in “Others” category
Elimination of intersegment transactions
Corporate assets*
Total assets on consolidated balance sheets
Millions of yen
Thousands of U.S. dollars
2016
¥2,224,838
62,613
(320,251)
244,529
¥2,211,729
2015
¥1,905,906
62,874
(249,428)
295,179
¥2,014,531
2016
$19,755,265
555,967
(2,843,642)
2,171,275
$19,638,865
* 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
financial 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
2016
¥85,778
15,533
2015
¥79,064
9,056
2016
$761,659
137,924
2016
¥ 1,251
288
2015
¥ 1,094
264
2016
$ 11,108
2,557
2016
¥6,782
—
2015
¥5,900
—
2016
$60,220
—
2016
¥93,811
15,821
2015
¥86,058
9,320
2016
$832,987
140,481
32,135
46,547
285,340
17,398
17,013
154,484
—
—
—
49,534
63,560
439,833
91,706
80,776
814,296
1,513
1,389
13,435
5,780
6,943
51,323
99,000
89,108
879,062
Other items
Depreciation (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and
equipment, and intangible assets
Notes: 1. Adjustments include elimination of intersegment transactions and corporate expenses, etc.
2. Amortization of goodwill is not included.
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Asahi Kasei Report 2016
(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
Millions of yen
2016
2015
Thousands of U.S. dollars
2016
Japan
China
Other regions
Total
Japan
China
Other regions
Total
Japan
China
Other regions
Total
¥1,261,203
¥185,241
¥494,470
¥1,940,914
¥1,313,128
¥194,007
¥479,271
¥1,986,405
$11,198,748 $1,644,832
$4,390,606 $17,234,186
2) Property, plant and equipment.
Millions of yen
Thousands of U.S. dollars
2016
United States Other regions
Japan
Total
Japan
2015
United States Other regions
Total
Japan
2016
United States Other regions
Total
¥361,825
¥91,425
¥102,739
¥555,989
¥361,130
¥30,814
¥110,563
¥502,507
$3,212,795
$811,801
$912,262
$4,936,858
(Change in presentation method)
“United States” was included within “Other” in the fiscal year ended March 31, 2015, but from the fiscal year ended March 31, 2016 it has been presented
as an independent category since the value of tangible fixed assets in the United States exceeded 10% of the tangible fixed assets on the consolidated
balance sheets. Figures for the fiscal year ended March 31, 2015 have been restated accordingly.
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.
18. Information on related parties
Related party transactions
Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties
(a) Subsidiaries, affiliates, etc. of the company submitting the consolidated financial statements
Type of related party
Name of company
Location
Paid-in capital
Business line
Share of voting rights held by the company (of which, indirectly held)
Relationship with the related party
Nature of transaction
Transaction amount
An affiliated company
PTT Asahi Chemical Co., Ltd.
Rayong, Thailand
14,246 million Thai baht
Chemicals
48.5% (48.5%)
Debt guarantee
Guarantee for completion of manufacturing facilities
¥11,989 million (US$106,455 thousand) in the year ended March 31, 2016,
¥16,250 million in the year ended March 31, 2015
—
—
Amount name
Balance at end of year
Asahi Kasei Report 2016
105
(b) Directors, Corporate Auditors, major shareholders, etc. of the company submitting the consolidated financial statements
Type of related party
Name of company
Location
Paid-in capital
Business line
Share of voting rights held by the company
Relationship with the related party
Nature of transaction
Transaction amount
Account recorded
Balance at end of year
Type of related party
Name of company
Location
Paid-in capital
Business line
Share of voting rights held by the related party
Relationship with the related party
Nature of transaction
Transaction amount
Account recorded
Balance at end of year
A company in which close relative(s) of a Director or Corporate Auditor of the Company hold(s)
a majority of voting rights
Miwa-Syouji Co., Ltd.
Nobeoka, Miyazaki, Japan
¥65 million (US$577 thousand)
Wholesale trade
0.0%
Purchasing consumable goods
Purchasing consumable goods
¥225 million (US$1,998 thousand) in the year ended March 31, 2016,
¥228 million in the year ended March 31, 2015
Accrued expenses
¥23 million (US$204 thousand) in the year ended March 31, 2016, ¥43 million as of March 31, 2015
A company in which close relative(s) of a Director or Corporate Auditor of the Company hold(s)
a majority of voting rights
Miwa Vinyl Co., Ltd.
Nobeoka, Miyazaki, Japan
¥10 million (US$89 thousand)
Manufacture and sale of plastic packaging material
0.0%
Purchasing consumable goods and raw materials
Purchasing consumable goods and raw materials
¥45 million (US$400 thousand) in the year ended March 31, 2016,
¥49 million in the year ended March 31, 2015
Accrued expenses and notes and accounts payable—trade
¥3 million (US$27 thousand) in the year ended March 31, 2016, ¥2 million as of March 31, 2015
Notes: 1. Transaction amounts are shown net of consumption taxes, while balances at end of year include consumption taxes.
2. Transaction terms and the policy of deciding transaction terms: Ordinary transaction terms are applied to the purchase of products.
19. Per share information
Basic and diluted net assets per share and net income per share for the years ended March 31, 2016 and 2015, 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, non-controlling interests
Net assets allocated to capital stock
Number of shares of capital stock outstanding at fiscal year end used in calculation of
net assets per share (thousand)
(b) Basis for calculation of net income per share
Net income attributable to owners of the parent
Amount not attributable to common stock shareholders
Net income attributable to common stock owners of the parent
Weighted-average number of shares of capital stock (thousand)
Yen
2016
¥745.94
¥ 65.69
2015
¥775.05
¥ 75.62
U.S. dollars
2016
$6.62
$0.58
Millions of yen
Thousands of U.S. dollars
2016
¥1,057,399
15,498
(15,498)
¥1,041,901
2015
¥1,097,722
15,068
(15,068)
¥1,082,654
2016
$ 9,389,087
137,613
(137,613)
$ 9,251,474
1,396,755
1,396,873
12,402,371
Millions of yen
Thousands of U.S. dollars
2016
¥ 91,754
—
¥ 91,754
1,396,812
2015
¥ 105,652
—
¥ 105,652
1,397,094
2015
$ 814,722
—
$ 814,722
12,402,877
Notes: 1. As the Company had no dilutive securities at March 31, 2016 and 2015, the Company does not disclose diluted net income per share for the years ended March 31, 2016 and 2015.
2. As stated in Note 3. a, the revised accounting standards for business combination and consolidated financial statements are applied. As a result, basic EPS for the year ended March 31, 2016,
decreased by ¥0.94 (US$0.008).
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Asahi Kasei Report 2016
20. Subsequent events
1. Merger through absorption of subsidiaries
On April 1, 2016, Asahi Kasei Chemicals Corp., Asahi Kasei Fibers Corp., and Asahi Kasei E-materials Corp., consolidated subsidiaries of the Company, were
merged through absorption with the Company.
(a) Outline of the transaction
i) Name and nature of business of merging companies
Surviving company
Name
Nature of business
Absorbed companies
Name
Nature of business
ii) Date of merger
April 1, 2016
Asahi Kasei Corp.
Diversified chemicals operations
Asahi Kasei Chemicals Corp.
Manufacture and
sale of chemical products
Asahi Kasei Fibers Corp.
Manufacture and
sale of fiber products
Asahi Kasei E-materials Corp.
Manufacture and
sale of electronic materials
iii) Statutory form of merger
Absorption-type merger with Asahi Kasei Corp. as the surviving company
iv) Name of surviving company
Asahi Kasei Corp.
v) Other items related to outline of the transaction
With the start of the Asahi Kasei Group’s new medium-term management initiative in fiscal 2016, the operating portfolio was realigned into three busi-
ness sectors of Material (currently the Chemicals & Fibers segment and the Electronics segment), Homes (currently the Homes & Construction Materials
segment), and Health Care. Within each business sector, portfolio-based management will be thoroughly implemented with optimum allocation of
management resources, and further growth will be pursued by creating synergy among the sectors. Together with this change, in order to obtain efficient
management and mutual coordination within the Material business sector and achieve greater corporate value, the decision was made to merge Asahi
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., and Asahi Kasei E-materials Corp. with the Company.
(b) Outline of the accounting treatment implemented
The transaction was treated as a transaction under common control in accordance with the Accounting Standards Board of Japan (ASBJ) Statement
No. 21 “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10 “Guidance on Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures.”
2. Change in segment classifications
In the year ended March 31, 2016, the Company had four reportable segments of Chemicals & Fibers, Homes & Construction Materials, Electronics, and
Health Care based on its four business sectors. Beginning with the year ending March 31, 2017, these are changed to the three reportable segments of
Material, Homes, and Health Care based on three business sectors.
Recalculated segment information concerning net sales and operating income for each reportable segment for the year ended March 31, 2016, based
on the new segmentation is as follows:
Reportable segments
Millions of yen
Material
Homes
Health Care
Subtotal
Others
Total
Adjustments
Amounts from
consolidated
financial
statements
Sales:
External customers
Intersegment
Total
Operating income
Sales:
External customers
Intersegment
Total
Operating income
¥1,004,438
3,761
1,008,198
79,209
¥632,418
53
632,472
71,000
¥285,404
48
285,452
36,235
¥1,922,261
3,862
1,926,123
186,444
¥18,653
41,854
60,508
3,781
¥1,940,914
45,716
1,986,630
190,225
¥ —
(45,716)
(45,716)
(25,022)
¥1,940,914
—
1,940,914
165,203
Reportable segments
Thousands of U.S. dollars
Material
Homes
Health Care
Subtotal
Others
Total
Adjustments
Amounts from
consolidated
financial
statements
$8,918,824
33,395
8,952,211
703,330
$5,615,503
471
5,615,983
630,439
$2,534,221
426
2,534,647
321,746
$17,068,558
34,292
17,102,850
1,655,514
$165,628
371,639
537,276
33,573
$17,234,186
405,931
17,640,117
1,689,087
$ — $17,234,186
—
(405,931)
17,234,186
(405,931)
1,466,906
(222,181)
Notes: The “Others” category includes electricity supply, plant engineering and environmental engineering, research and analysis, and employment agency/staffing operations.
Asahi Kasei Report 2016
107
21. Borrowings
(a) Bonds payable at March 31, 2016 and 2015, comprised the following:
Unsecured 1.46% yen bonds due in 2019
Unsecured 0.30% yen bonds due in 2017
Total
Notes: 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, 2016, are as follows:
Year ending March 31
2017
2018
2019
2020
2021
2022 and thereafter
Total
Millions of yen
Thousands of U.S. dollars
2016
¥20,000
20,000
¥40,000
2015
¥20,000
20,000
¥40,000
2016
$177,588
177,588
$355,177
Millions of yen
Thousands of U.S. dollars
¥ —
20,000
—
20,000
—
—
¥40,000
$ —
177,588
—
177,588
—
—
$355,177
(b) Loans payable at March 31, 2016 and 2015, comprised the following:
Short-term loans payable with an interest rate of 0.36%
Current portion of long-term loans payable with an interest rate of 0.77%
Current portion of lease obligations with an interest rate of 1.40%
Long-term loans payable (except portion due within one year) with an interest rate of 1.00%
Lease obligations (except portion due within one year) with an interest rate of 1.82%
Total
Notes: 1. Interest rates shown are weighted average interest rates for the balance outstanding at March 31, 2016.
Millions of yen
Thousands of U.S. dollars
2016
¥273,418
40,169
919
94,632
537
¥409,675
2015
¥ 62,648
33,367
1,383
130,400
1,219
¥229,018
2016
$2,427,793
356,677
8,160
840,277
4,768
$3,637,675
2. The aggregate annual maturities of long-term loans payable and lease obligations (except portion due within one year) after March 31, 2017, are as follows:
Year ending March 31
2018
2019
2020
2021
2022 and thereafter
Long-term loans payable
Lease obligations
Millions of yen
Thousands of U.S. dollars
Millions of yen
Thousands of U.S. dollars
¥18,941
49,616
12,028
4,436
9,611
$168,185
440,561
106,802
39,389
85,340
¥280
118
83
55
1
$2,486
1,048
737
488
9
108
Asahi Kasei Report 2016
Asahi Kasei Report 2016
109
Major Subsidiaries and Affiliates
(As of April 1, 2016)
Main products/business line
Company
Material Segment
Packaging products and solutions
Asahi Kasei Pax Corp.*
Specialty chemicals
Asahi Kasei Finechem Co., Ltd.*
Cling film, other household products
Asahi Kasei Home Products Corp.*
Aluminum paste
Asahi Kasei Metals Ltd.*
Sale of civil engineering materials
Asahi Kasei Geotechnologies Co., Ltd.
Shotgun cartridges
Asahi SKB Co., Ltd.
Water treatment equipment, environmental chemicals
Asahi Kasei Clean Chemical Co., Ltd.
Processed plastic products
Asahi Kasei Technoplus Co., Ltd.*
Synthetic rubber
Japan Elastomer Co., Ltd.*
Polystyrene
PS Japan Corp.*
Biaxially oriented polystyrene sheet
Sundic Inc.
Silicone
Wacker Asahikasei Silicone Co., Ltd.
Industrial explosives
Kayaku Japan Co., Ltd.
Coloring and compounding of performance resin
Asahi Kasei Plastics North America, Inc.*
Compounded performance resin operations
Asahikasei Plastics (America) Inc.*
Sale of purging compound
Sun Plastech Inc.*
Acrylonitrile, sodium cyanide
Tongsuh Petrochemical Corp., Ltd.*
Sale of adipic acid
Asahi Kasei Chemicals Korea Co., Ltd.
High-performance HDI-based polyisocyanate
Asahi Kasei Performance Chemicals Corp.*
Polyacetal
Asahi Kasei POM (Zhangjiagang) Co., Ltd.*
Industrial filtration membranes and systems
Asahi Kasei Microza (Hangzhou) Co., Ltd.*
Sale of performance resin
Asahikasei Plastics (Shanghai) Co., Ltd.
Sale of performance resin
Asahi Kasei Plastics (Guangzhou) Co., Ltd.
Sale of performance resin
Asahi Kasei Plastics (Hong Kong) Co., Ltd.
Coloring and compounding of performance resin
Asahikasei (Suzhou) Plastics Compound Co., Ltd.
Synthetic rubber
Asahi Kasei Synthetic Rubber Singapore Pte. Ltd.*
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.
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 fibers
Asahi Kasei Fibers (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 fiber and nonwovens
Asahi Kasei Fibers Italia SRL*
Epoxy resin
Asahi Kasei Epoxy Co., Ltd.*
LSIs
Asahi Kasei Microsystems Co., Ltd.*
Glass fabric
Asahi-Schwebel Co., Ltd.*
Hall elements
Asahi Kasei Electronics Co., Ltd.*
Fine pattern coils
Asahi Kasei FP Corp.*
Energy and electronic materials
Asahi Kasei E-materials Korea Inc.*
Sale of LSIs
AKM Semiconductor, Inc.*
Electronic devices marketing and technical support
Asahi Kasei Microdevices Korea Corp.
LSI design
AKM Technology Corp.
Electronic devices and printed wiring boards
Asahi Kasei Technosystem Co., Ltd.
Photosensitive dry film
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.*
Asahi Kasei Electronics Materials (Changshu) Co., Ltd.* Photosensitive dry film
Asahi Kasei Microdevices (Shanghai) Co., Ltd.
Electronic devices marketing and technical support
Paid-in capital
(million)
Equity
interest (%)
490
¥
325
¥
250
¥
250
¥
132
¥
100
¥
100
¥
160
¥
1,000
¥
5,000
¥
1,500
¥
1,050
¥
60
¥
21.7**
US$
31.9**
US$
1
US$
KRW 237,642
KRW 1,500
285
CNY
265
CNY
69
CNY
18
CNY
10
CNY
2.6
US$
50
CNY
160
US$
46
US$
35
US$
140
THB
THB 14,246
450
¥
154
CNY
78
CNY
1,003
NT$
65
HK$
1,185
THB
1,350
THB
23.8**
€
3
€
300
¥
50
¥
50
¥
50
¥
¥
10
KRW 7,962
2.9
US$
820
KRW
30
¥
40
¥
181
CNY
143
CNY
14
CNY
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
100.0
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
50.0
100.0
92.5
50.0
100.0
89.5
60.0
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
* Consolidated subsidiary
** Including capital reserve
110
Asahi Kasei Report 2016
Company
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.*
Polypore International, LP*
Asahi Kasei Microdevices Corp.*
Homes Segment
Asahi Kasei Homes Corp.*
Asahi Kasei Realty & Residence Corp.*
Asahi Kasei Jyuko Co., Ltd.*
Asahi Kasei Mortgage Corp.*
Asahi Kasei Reform Co., Ltd.*
Asahi Kasei Home Construction Corp.*
Asahi Kasei Jyuko Vietnam Corp.*
Asahi Kasei Construction Materials Corp.*
Asahi Kasei Foundation Systems Corp.*
Asahi Kasei Extech Corp.*
Health Care Segment
Asahi Kasei Pharma Corp.*
Asahi Kasei Medical Co., Ltd.*
Asahi Kasei Pharma America Corp.*
Med-Tech Inc.*
Asahi Kasei Bioprocess America. 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 Bioprocess Singapore Pte. Ltd.*
Asahi Kasei Medical Trading Ltd. Sti.*
Asahi Kasei Medical MT Corp.
ZOLL Medical Corporation*
Asahi Kasei ZOLL Medical Corp.*
Others
Asahi Kasei Europe GmbH*
Asahi Research Center Co., Ltd.*
Asahi Kasei Engineering Corp.*
Asahi Kasei Advance Corp.*
Asahi Kasei Amidas Co., Ltd.*
AJS Inc.
Asahi Yukizai Corp.
Asahi Kasei America, Inc.*
Asahi Kasei Holdings US, Inc.*
Crystal IS, Inc.*
Asahi Kasei (China) Co., Ltd.*
Asahi Kasei India Pvt. Ltd.
Asahi Kasei Energy Storage Materials, Inc.*
* Consolidated subsidiary
** Including capital reserve
Main products/business line
Electronic devices marketing and technical support
Sale of pellicles
Photosensitive dry film
Glass fabric
Electronic devices marketing and technical support
Sale of photopolymer, printing-plate making systems
Sale of photopolymer, printing-plate making systems
Battery separators
Electronic devices
Paid-in capital
(million)
NT$
NT$
NT$
NT$
€
€
£
US$
¥
10
1
49
326
3.0
3.4
0.3
2,233**
3,000
Equity
interest (%)
100.0
100.0
80.6
51.0
100.0
100.0
100.0
100.0
100.0
Housing
¥
Real estate development, brokerage, and related business ¥
¥
Steel frames
¥
Financial services
¥
Home maintenance and remodeling
¥
Construction of homes
US$
Steel-frame members
¥
Construction materials
¥
Installation of piles
¥
Exterior wall panel installation
3,250
3,200
2,820
1,000
250
100
13.9**
3,000
200
50
Pharmaceuticals
Medical devices, bioprocess products
Clinical trials for new drugs, sale of pharmaceuticals
Medical devices
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 filters
Sale of bioprocess products
Sale of medical devices, medical systems
Medical devices, bioprocess products
Acute critical care devices and systems
Sale of acute critical care devices in Japan
3,000
3,000
¥
¥
49**
US$
140
¥
30
US$
US$
0.5
KRW 1,000
165
CNY
5
NT$
17.8
€
0.5
€
SG$
0.3
0.01
YTL
¥
10
1,723**
US$
230
¥
€
Business support services, sale of performance resin
¥
Information and analysis
¥
Plant, equipment, process engineering
¥
Sale of Asahi Kasei products
¥
Employment agency, consulting
¥
Computer software, IT systems
¥
Synthetic resin, fabricated plastic products
US$
Business support services
US$
Holding company of ZOLL
Development of aluminum nitride substrates and UV LEDs US$
CNY
Investment and business support services
INR
Business support services
US$
Holding company of Polypore International, LP
7.9
1,000
400
500
80
800
5,000
0.1
1,723**
31.9**
275
45
2,256**
100.0
100.0
100.0
100.0
100.0
100.0
78.00
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
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
49.0
30.6
100.0
100.0
100.0
100.0
100.0
100.0
Asahi Kasei Report 2016
111
Company Information
■ Corporate Profile (as of March 31, 2016)
Company Name
Asahi Kasei Corporation
Date of Establishment
May 21, 1931
Paid-in Capital
¥103,389 million
Employees
32,821 (consolidated)
1,178 (non-consolidated)
■ Asahi Kasei Group Offices
Asahi Kasei Corporation
Tokyo Head Office
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3000
Fax: +81-3-3296-3161
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 Office
Room 1407
New China Insurance Tower
No. 12 Jian Guo Men Wai Avenue
Chao Yang District
Beijing 100022 China
Phone: +86-10-6569-3939
Fax: +86-10-6569-3938
Asahi Kasei America, Inc.
800 Third Avenue, 30th Floor
New York, NY 10022 USA
Phone: +1-212-371-9900
Fax: +1-212-371-9050
Asahi Kasei Europe GmbH
Am Seestern 4, 40547
Düsseldorf, Germany
Phone: +49-211-8822-030
Fax: +49-211-8822-0333
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
112
Asahi Kasei Report 2016
Core Operating Companies
Asahi Kasei Microdevices
1-105 Kanda Jinbocho, Chiyoda-ku
Tokyo 101-8101 Japan
Phone: +81-3-3296-3911
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 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
Investors Information
(As of March 31, 2016)
Stock Listing
Stock Code
Tokyo
3407
Authorized Shares
4,000,000,000
Outstanding Shares
1,402,616,332
Transfer Agent
Sumitomo Mitsui Trust Bank, Ltd.
Independent Auditors
PricewaterhouseCoopers Aarata LLC
Number of Shareholders 90,122
Largest Shareholders
Nippon Life Insurance Co.
The Master Trust Bank of Japan, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. (trust account)
Sumitomo Mitsui Banking Corp.
Asahi Kasei Group Employee Stockholding Assn.
Japan Trustee Services Bank, Ltd. (trust account 9)
Mizuho Bank, Ltd.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Mizuho Trust & Banking Co., Ltd.
Retirement Benefit Trust (Mizuho Bank account)
Sumitomo Life Insurance Co.
* Percentage of equity ownership after exclusion of treasury stock.
% of equity*
5.23
5.04
3.94
2.53
2.47
2.08
1.45
1.45
1.42
1.40
In this report, the TM symbol indicates a trademark or registered trademark of Asahi Kasei Corporation,
affiliated companies, or third parties granting rights to Asahi Kasei Corporation or affiliated companies.
Asahi Kasei IR Website
Asahi Kasei’s financial results and other materials for investors
are available in our IR website.
http://www.asahi-kasei.co.jp/asahi/en/ir
Asahi Kasei Report 2016
113
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
2016.11