Asahi Kasei Report 2018
Creating for Tomorrow
Contents
03 To our Stakeholders
46 CSR
04
History of Providing Solutions
for the Challenges of Society
06 At a Glance
08 Message from the President
16
Basic Concept of “Cs for Tomorrow 2018”
Medium-Term Management Initiative
18
Interview with the CFO
20 Financial and Non-Financial Highlights
22 Directors
24 Corporate Governance
28 Outside Directors Dialogue
31 Specific Measures to Heighten Compliance
34 R&D and Human Resources
40 Operating Segments: Material
42 Operating Segments: Homes
44 Operating Segments: Health Care
48 CSR Fundamentals
• Responsible Care
• Respect for Employee Individuality
• Corporate Citizenship
Financial Section
58 Management’s Discussion and Analysis
64 Risk Analysis
66 Consolidated Financial Statements
Corporate Information
98 Major Subsidiaries and Affiliates
101 Company Information
101
Investors Information
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.
Organizational scope
The scope of the report is Asahi Kasei Corp. and its consolidated
subsidiaries, except with respect to Responsible Care, in which
case the scope is operations in Japan that implement 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 September 2018.
Period under review
The period under review is fiscal 2017 (April 2017 to March 2018).
Some qualitative information pertaining to April to September
2018 has also been included.
Guidelines consulted
The Global Reporting Initiative’s Sustainability Reporting Guidelines
G4, ISO 26000, and other guidelines were consulted during the
preparation of this report.
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.
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.
Asahi Kasei Report 2018
01
Group
Mission
We, the Asahi Kasei Group,
contribute to life and living for
people around the world.
Group
Vision
Group
Values
Providing new value to society by enabling “living in health and
comfort” and “harmony with the natural environment.”
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
02
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03
To Our Stakeholders
Our business environment is changing at a
very rapid pace. The so-called fourth industrial
revolution is transforming our lives with digital
technology such as IoT, AI, and Big Data.
Meanwhile, sensitivity toward social and envi-
ronmental issues continues to rise around the
world, exemplified by the agenda for sustain-
able development goals (SDGs) adopted by the
UN in 2015.
Asahi Kasei has continued to create new
value in accordance with our Group Mission of
contributing to life and living for people around
the world by always adapting to the changing
needs of the times through our diverse business
operations. We believe the current period of
rapid change presents great opportunities for
us to provide innovative solutions which meet
emerging needs.
With our Cs for Tomorrow 2018 (CT2018)
management initiative for the three-year period
from fiscal 2016 to 2018, we are building the
foundation to create a portfolio of high profit-
ability and high value-added businesses by fiscal
2025, ten years from the start of the initiative.
We have made solid progress, and in fiscal
2017, the second year of CT2018, sales in each
business were robust, especially in Chemicals
where improved market prices for acrylonitrile
bolstered performance. As a result, we marked
record highs in net sales, operating income,
ordinary income, and net income attributable to
owners of the parent.
In fiscal 2018, the final year of CT2018, we are
continuing to make proactive investments for
growth while addressing environmental, social,
and governance (ESG) issues in accordance with
our Group Mission, Group Vision, and Group
Values.
I would be pleased if you find this Asahi Kasei
Report to be informative with its description of
financial and non-financial performance focused
on fiscal 2017, together with our longer-term
strategies and actions. We continue to value
proactive communication with our stakeholders
as part of a commitment to appropriate and
highly transparent disclosure.
September 2018
Hideki Kobori
President
Asahi Kasei Report 2018
03
02
Asahi Kasei Report 2018
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.
Founder:
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™ cupro fiber, part of a
diverse range of business operations
that included chemical fertilizer and
viscose rayon. As industry modernized
and the economy of Japan achieved self-
sustainable growth, our operations made
important contributions to the stability of
people’s lives.
From 1950
In 1957 we began production of 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
● Post-war recovery and
modernization of industry
● Interbellum economic downturn and
● Period of high economic growth
● Stable economic growth
● Economic bubble
World War II
04
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05
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. The current management initiative
“Cs for Tomorrow 2018” is 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
Pharmaceuticals just 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–
2017
Celgard™ Li-ion battery separator of Polypore
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.,
a major manufacturing base for photosensitive
dry film
Critical Care
Others
Fibers
Others
Fibers
Health Care
Construction
Materials
Health Care
Construction
Materials
Fiscal 2000
Net sales
¥1,269.4 billion
Fiscal 2017
Net sales
¥2,042.2 billion
Homes
Chemicals
Electronics
Increased comfort and
convenience
● Two decades of meager growth
after collapse of bubble
● Effect of global economic crisis
Homes
Chemicals
Electronics
Heightened environmental consciousness,
evolution of ICT
● Reduced dependence on fossil fuels, greater use of renewables
● The fourth industrial revolution by IoT, AI, Big Data, etc.
04
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At a Glance
The Asahi Kasei Group operates business in the
three sectors of Material, Homes, and Health Care.
The “Cs for Tomorrow 2018” medium-term man-
agement initiative is focused on raising corporate
value through optimal allocation of management
resources across the three sectors.
Fiscal 2017 net sales and operating income
New record highs in both net sales and operating income
Business sector
Material
P. 40
Health Care
14.6 %
FY2017
Net sales
¥2,042.2 billion
Homes
31.7 %
Material
53.7 %
Homes
P. 42
Health Care
P. 44
Health Care
17.5 %
Homes
28.5 %
Material
54.0 %
FY2017
Operating
income
¥198.5 billion
Note: Percentages shown exclude “Others” category and
“corporate expenses and eliminations.”
06
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FY2017 results
Business units
Major products
¥1,087.7 billion
● Asahi Kasei Corp.
Fibers & Textiles SBU
Petrochemicals SBU
Performance Polymers SBU
Performance Materials SBU
Consumables SBU
Separators SBU
¥121.9 billion
● Asahi Kasei Microdevices Corp.
Electronic Devices
Hipore™ lithium-ion battery
(LIB) separator
S-SBR for fuel-efficient tires
Acrylonitrile plant
Lamous™ microfiber suede
● Asahi Kasei Homes Corp.
Homes
● Asahi Kasei Construction
Materials Corp.
Construction Materials
¥641.0 billion
¥64.4 billion
Hebel Haus™
Atlas™ condominiums
Neoma Foam™ phenolic foam
insulation panels
● Asahi Kasei Pharma Corp.
Pharmaceuticals
¥296.3 billion
● Asahi Kasei Medical Co., Ltd.
Medical Care
Pharmaceutical products
Planova™ virus removal
filter
¥39.5 billion
● ZOLL Medical Corporation
Acute Critical Care
ZOLL AED Plus™ automated
external defibrillator
LifeVest™ wearable defibrillator
06
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Net salesOperating incomeNet salesOperating incomeNet salesOperating income Message from the President
We will provide new value that contributes
to solutions for society’s challenges while
accelerating business growth aimed at
creating a portfolio of high profitability
and high value-added businesses.
Hideki Kobori
President, Asahi Kasei
Review of fiscal 2017 and progress of Cs for Tomorrow 2018
We are generally making solid progress in our three-year medium-term management initiative
“Cs for Tomorrow 2018” (CT2018). In fiscal 2017, the second year, each segment recorded firm
sales. Chemicals operations in particular where buoyed by rising market prices for acrylonitrile.
As a result, net sales exceeded ¥2 trillion for the first time, while operating income, ordinary
income, and net income attributable to owners of the parent all hit record highs. Our operating
income target for fiscal 2018 was reached a year early.
CT2018 sets forth the objective of creating a portfolio of high-profitability and high-value
added businesses by fiscal 2025, 10 years from the start of the initiative, with the three-years
from fiscal 2016 to 2018 being the period to build our foundations for the next phase. While it’s
important to achieve financial targets, what’s even more essential is to continuously heighten
our corporate value from the longer perspective.
08
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09
In fiscal 2018, as the final year of the three-year period, we are focusing on what can be done
now—for proactive investments such as M&A and expanded manufacturing infrastructure, to
enhance business with the latest ICT, for thorough risk management and compliance, and to
create new business in concert with outside entities including through CVC—while we make
the most of our strengths by building further connections among our diversified businesses,
human resources, and technologies. This will also be the year to advance discussions on the
strategic direction to take in the next medium-term management initiative.
We raised our annual dividend for fiscal 2017 to ¥34 per share, a ¥10 increase from a year
ago, reflecting our favorable performance. Under CT2018 we are targeting a total return ratio of
35% in fiscal 2018.
New records for net sales, operating income, and net income in FY2017
Cs for Tomorrow 2018
(CT2018)
(¥ billion, except where noted)
FY2015
FY2016
FY2017
FY2018
forecast
(As of May
2018)
FY2018
target
(As of April
2016)
FY2025
outlook
(As of April
2016)
Net sales
1,940.9
1,883.0
2,042.2
2,155.0
2,200.0
3,000.0
Operating income
Operating margin
165.2
8.5%
159.2
8.5%
198.5
9.7%
190.0
8.8%
180.0
8.2%
280.0
9.3%
Net income attributable
to owners of the parent
91.8
115.0
170.2
140.0
110.0
Net income per
shareholders’ equity (ROE)
Net income per
shareholders’ equity and
interest-bearing debt
Dividends per share (¥)
8.6%
10.5%
14.0%
9.0%
10.0%
7.1%
20
7.6%
24
9.7%
34
7.0%
8.0%
34
35.0%
Payout ratio*
30.4%
29.1%
27.9%
33.9%
¥/US$ Exchange rate
120
108
111
105
110
* FY2018 target figure for payout ratio is total return ratio including share buybacks.
Proactive investments for growth
We plan to adopt strategic long-term investments totaling ¥700 billion over the three-year
period of CT2018. In the first two years we adopted decisions on about half of that amount,
¥340 billion. The value of long-term investments per year rose from some ¥100 billion under the
previous medium-term management initiative to ¥170 billion, a 70% increase. Such proactive
investments will contribute to future earnings growth.
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Message from the President
Value of long-term investments per year
(on decision-adopted basis)
Primary investment
(start-up from FY2018 onward)
(¥ billion)
200
100
70%
increase
0
For Tomorrow 2015
FY2011–2015*
(average)
Cs for Tomorrow 2018
FY2016–2017
(average)
* Excluding acquisition of ZOLL and Polypore.
LIB separator
Approx. 500 million m2/y (+80%) capacity increase
start-up: FY2018–2020
S-SBR for fuel-efficient tires
Approx. 30,000 t/y (+30%) capacity increase
start-up: FY2018
LamousTM microfiber suede
Approx. 3 million m2/y (+50%) capacity increase
start-up: FY2019
LeonaTM nylon 66 filament
Approx. 5,000 t/y (+15%) capacity increase
start-up: FY2019
PlanovaTM virus removal filters
Approx. 40,000 m2/y (+40%) capacity increase
start-up: FY2019
With long-term investment plans exceeding ¥200 billion for organic growth in fiscal 2018,
we are on track to reach the ¥700 billion total under CT2018.
During the previous medium-term initiative, we made two large acquisitions which have
each contributed significantly to the growth of the Asahi Kasei Group. After we acquired ZOLL
in fiscal 2012, its already high growth accelerated further, reaching an average of 15% over the
past ten years. And Polypore, which we acquired in fiscal 2015, has enabled significant synergy
through integration with our established battery separator business. In fiscal 2017, separator
operations turned profitable after amortization of goodwill and other intangible assets associ-
ated with the acquisition. We will continue to pursue such acquisitions as an effective way to
drive further growth.
While we expected there would be synergy with our established health care businesses,
ZOLL’s field of acute critical care was new for Asahi Kasei at the time of the acquisition. In con-
trast, the Polypore acquisition served to reinforce our operations in a field in which we already
had a world-leading position with the Hipore™ lithium-ion battery (LIB) separator, where the
market was poised to grow dramatically.
M&A is an effective way to strengthen competitiveness in existing fields, to expand into
related fields, or to gain complementary technology. We will continue to study further M&A
opportunities which can contribute to business growth and greater corporate value.
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Our strengths are evinced at times of dramatic change
The business environment is rapidly changing year by year with the advance of digital technol-
ogy such as IoT, AI, and Big Data—what is being called the fourth industrial revolution. We
consider a time of change to be a time of opportunity. With our diverse range of businesses
and wide variety of technologies, we are in an excellent position to leverage change to our
advantage through innovation and new business creation.
Throughout the 96 years since our founding, Asahi Kasei has always stood out for our ability
to continually evolve our business portfolio in accordance with changes in the industrial struc-
ture and social environment over time. I think the key to such successful adaptation is having a
constant lodestar to guide the way.
Though our operations have been radically transformed over the decades, our Group
Mission of “contributing to life and living for people around the world” remains unchanged. We
have always created new value by providing solutions to challenges faced by society, and all of
our personnel share a sincere commitment to continue to do so.
Among the various Cs we are emphasizing in CT2018, “connection” is foremost. We are
aiming to create new value by building new connections among our three different sectors of
Material, Homes, and Health Care. Furthermore, we actively seek to develop connections with
outside entities as well.
We have a diverse range of technologies, human resources, and market channels. This gives
us numerous opportunities to create new value by transforming our business portfolio to meet
emerging needs in a dramatically changing environment. I consider this to be our greatest
strength. The next few years will be pivotal. We must keep abreast of current trends as we
develop world-leading businesses which make valuable contributions to society.
Sustainable growth supported by various human resources
For us to achieve sustainable growth and thrive in world markets, outstanding human resources
are essential. When planning a strategy for growth, we also need to consider how to retain and
nurture the people who will execute the business. We are therefore placing greater emphasis
on linkage between business strategy and personnel strategy.
We are refounding our systems to nurture professional personnel with a high degree of
expertise in certain fields and managerial personnel who can demonstrate effective leadership,
in addition to the personnel who support operations at each workplace. In fiscal 2017 we
revised our Group Masters program to nurture specialists and provide them with greater
engagement.
See p. 38 for more about the Group Masters program
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Message from the President
The management team is currently advancing discussions on what is needed of next-
generation leaders and how to best nurture them. We are considering what kind of training and
experience the next generation of leaders will need and how to rotate them through various
positions of responsibility as we formulate the optimum framework.
As our operations continue to globalize, more and more employees are hired locally. We
need to discern whether it’s best to have them continue working in the same location or if it
may be valuable to give them opportunities to gain experience in other regions of the world. It’s
important for us to remain flexible in this regard.
It was very stimulating that our acquisitions of ZOLL and Polypore brought many new
people into the Asahi Kasei Group. M&A is meaningful in that it enables us to gain exceptional
human resources, not only as a means to obtain a business and save time. Many of them have
rich experience and skills that are different from our own. We achieve business growth by
welcoming them as our colleagues, sharing our Group Mission with them, and giving them
opportunities to fully utilize their abilities. It’s mutually stimulating for people from different
countries and different companies with different cultures and different values to work together
toward a common goal. Connections among such different personnel can open new possibili-
ties and spark innovation.
What really left an impression on me when we acquired ZOLL was how much time the
management of foreign companies devote to M&A. It might be especially so in the field of
healthcare, but they clearly regard business development as essential for dynamic growth. Their
growth strategy is predicated on executing M&A, and a good deal of attention is focused on
studying potential deals. This style of business development was eye-opening for me.
Materiality for business from the perspective of ESG
The fourth industrial revolution of digital transformation is not the only major change in our
operating environment. Concern for social and environmental issues has been intensifying
considerably. Environmental, social, and governance (ESG) aspects of management are placed
under ever greater scrutiny. In 2015, the United Nations adopted the agenda for sustainable
development goals (SDGs), advocating targets to be achieved such as eradicating poverty,
protecting the environment, and attaining peaceful prosperity.
This is not a novel concept to us. We have long held a Group Vision of providing value to
society by enabling “living in health and comfort” and “harmony with the natural environment,”
based on our Group Mission as I described. We therefore welcome the fresh attention on doing
business responsibly.
Reviewing the issues we have addressed and those to focus on moving forward, we orga-
nized the following matrix to map our matters of materiality by importance. All the items shown
in the illustration are important for our company. Items in the matrix are arranged vertically by
importance for stakeholders and horizontally by importance for the Asahi Kasei Group. The four
matters of corporate governance, compliance/sincerity, human rights, and safety/quality are
shown separately to indicate their significance as indispensable prerequisites for doing business.
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The map shows five items in the “extremely important” region of each axis. We consider
three of them—the global environment, health and longevity, and comfortable life—as matters
to be achieved through our business activities. We have many businesses that contribute to
solutions for society: Regarding the global environment, for example, we have LIB separators for
electric vehicles and solution-polymerized styrene-butadiene rubber (S-SBR) for fuel-efficient
tires. We’re also launching a new business for our alkaline water electrolysis system to produce
hydrogen from renewable energy, with plant demonstrations in progress. Likewise, our Health
Care sector contributes to health and longevity while our Homes sector contributes to comfort-
able life.
Having identified our tasks, now it is vital for us to mobilize the entire Asahi Kasei Group to
achieve progress. We will work to optimize our systems of implementing actions and evaluating
results, including third-party verification, and apply a continuous cycle of improvement to ensure
that we fulfil our mission to create new value. We will continue to meet the needs of society by
maintaining a productive dialogue with our stakeholders to incorporate various perspectives.
Materiality of the Asahi Kasei Group
■ Harmony with the environment ■ Living in health and comfort ■ Basic activity
Extremely
important
l
s
r
e
d
o
h
e
k
a
t
s
r
o
f
e
c
n
a
t
r
o
p
m
I
■ Greenhouse gas
■ Wastewater
■ Industrial waste
■ Global environment
■ Health and longevity
■ Comfortable life
Business
contribution to
■ Supply chain
management
■ Communication
with stakeholders
■ Biodiversity
■ Social contribution
■ Human resources
■ Diversity
■ Risk management
Important
Importance for the Asahi Kasei Group
Extremely
important
Highest priority for mapping above
■ Governance
■ Human rights
■ Compliance/sincerity
■ Safety/quality
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Message from the President
Alkaline water electrolysis system to produce green hydrogen
from renewable energy
Asahi Kasei developed an alkaline water electrolysis system for the large-scale
production of green hydrogen by leveraging our world-leading technology of
chlor-alkali electrolysis.
In April 2018, we began trial operation of an alkaline water electrolysis plant
producing green hydrogen from solar power jointly with IHI Corp. in Soma,
Fukushima, Japan. In May, we
launched a demonstration project for
the system in Herten, North Rhine-
Westphalia, Germany, using simulated
electric power from wind energy.
Hydrogen is not only expected to be
used for fuel-cell powered buses and
trains, it can be used to make green
methane and green methanol by
reacting with carbon dioxide.
The demonstration plant in Herten, Germany
Corporate governance strengthening the integrity
and transparency of management
Adopted in 2015, Japan’s Corporate Governance Code was revised this year. Attitudes toward
corporate governance among Japanese companies have changed greatly in recent years. The
biggest change is a stronger emphasis on the importance of bringing outside perspectives to
bear in management.
As integrity and transparency in management have become more important than ever, we
are expected to consider the impact of our business activities and sustainability from various
perspectives including diversity of gender, nationality, and background. While our Head Office
is located in Japan and a large proportion of our employees are Japanese, we are making efforts
to raise the diversity of our management team. Though we currently have several non-Japanese
Executive Officers and a woman on the Board of Directors, this is a work in progress and we will
continue to seek further diversity for sound management. At the same time, we are working to
reinforce our systems to bring greater transparency and appropriate information disclosure.
Regarding the effectiveness of the Board of Directors, we have active discussions based
on an annual questionnaire for each Director. We obtain many candid opinions contributing
to a vibrant discourse on how the board should be and what we can do to further improve its
function.
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I sense that the role of Outside Directors is evolving as well. They are not passively observing,
but actively raising questions and opinions which contribute to corporate management as
outsiders. I find this to be very meaningful and effective from the standpoint of governance.
Outside Directors have stimulated more lively discussion of business strategy, and exhibit a very
deep sense of involvement in formulating our longer-term strategy.
Taking up challenges—the spirit of Asahi Kasei
I mentioned Asahi Kasei’s history of unceasingly taking up challenges to create new value. This
doesn’t only mean launching new businesses. It also means finding new value in our existing
businesses. Our personnel are good at coming up with new ideas and finding new ways to do
things in line with emerging changes in society around us. This exemplifies how we discover
new ways to add value in every business.
Our Group Values are “sincerity,” “challenge,” and “creativity.” We have nurtured the spirit of
pursuing challenges among our personnel from generation to generation. An important part
of my role as President is to constantly encourage our people to take up challenges on their
own initiative and fully develop their own abilities in each field. I also instruct supervisors to find
opportunities for their subordinates to pursue challenges in their daily tasks, and to support
them in doing so. By facing our tasks with sincerity and striving to create new value for society,
the culture of welcoming challenges repeatedly takes root in a new generation and passes on in
an unbroken line to the future. We strive to instill these values in all of our personnel around the
world, who put the spirit of our company into practice. I believe that this is the ultimate basis of
our enduring success.
Thinking of my own experience, I was given many opportunities to take up challenges. On
such occasions, I reminded myself of the company’s spirit of creating new value. As President,
now my task is to lead the management to achieve further growth by capturing the opportuni-
ties presented by the changes in the world around us. I want to leverage this occasion by
giving as many personnel as possible the experience of creating new value for our company to
provide to society.
It is in this way that the Asahi Kasei Group will always carry on evolving with the times,
achieving growth by building connections among diverse businesses, personnel, and technolo-
gies, “Creating for Tomorrow” with ongoing contributions to life and living for people around
the world.
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Basic Concept of “Cs for Tomorrow 2018” Medium-Term Management Initiative
Providing solutions to two important challenges faced by society
with diversified businesses
Society of clean environmental energy
Society of healthy/comfortable
longevity with peace of mind
Advancing toward 2025
Creating a portfolio of high-profitability and
high value-added businesses
Net sales (left scale)
Operating income (right scale)
Net sales
¥2,155 billion
Operating income ¥190 billion
(¥ billion)
3,000
2,000
1,000
0
'10
'11
'12
'13
'14
'15
'16
'17
'18
Forecast
'18
Target* Outlook*
'25
(¥ billion)
300
200
100
0
(FY)
¥3 trillion
Net sales
Operating income ¥280 billion
¥2,200 billion
Net sales
Operating income ¥180 billion
* Premised on exchange rates of
¥110/US$ and ¥120/€
Focus of “Cs for Tomorrow 2018”
Building the base for the next phase with connections
among diverse businesses and diverse human resources
Group Slogan
Creating for Tomorrow
Create new markets through connections
New stage of growth
Practice three Cs
Compliance
Thorough compliance based on the “three actuals”2
2 Actual place, actual thing, and actual fact
External
(cid:127) CVC1, joint R&D
(cid:127) M&A
(cid:127) Alliances
1 Corporate venture capital
Connect
Internal
(cid:127) Group-wide
(cid:127) People and
businesses
Communication
Open communication that fosters mutual understanding
and trust
Technology
(cid:127) Technology and
business combinations
Geography
(cid:127) Accelerating globalization
Challenge
Relishing new challenges to advance and evolve
Basic
strategy
Pursuit of growth
and profitability
Creation of
new businesses
Acceleration of
globalization
16
Asahi Kasei Report 2018
Asahi Kasei Report 2018
17
Future path toward 2025 for each sector
Material
• 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
(¥ billion)
2,000
Net sales (left scale)
Operating income (right scale)
(¥ billion)
500
1,650.0
1,000
977.9
1,087.7
1,175.0
1,250.0
121.9
115.0
88.5
0
'16
'17
'18
Forecast
'18
Target
'25
Outlook
250
0
(FY)
(¥ billion)
1,000
Net sales (left scale)
Operating income (right scale)
1,000.0
(¥ billion)
200
Homes
• 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
500
0
619.0
641.0
657.0
700.0
64.1
64.4
65.5
'16
'17
'18
Forecast
'18
Target
'25
Outlook
100
0
(FY)
(¥ billion)
800
Net sales (left scale)
Operating income (right scale)
(¥ billion)
160
Health Care
• Increase overseas sales; operating
income to reach 1/3 of Asahi Kasei
Group total
• Pharmaceuticals: global expansion
• Medical devices: grow by further
utilizing and strengthening global
platform
400
0
600.0
370.0
80
270.1
31.9
296.3
39.5
303.0
37.5
'16
'17
'18
Forecast
'18
Target
'25
Outlook
0
(FY)
16
Asahi Kasei Report 2018
Asahi Kasei Report 2018
17
Interview with the CFO
We will raise cash flow generation and
proactively invest for growth to enable
sustainable increase in corporate value
and stable shareholder returns
Yutaka Shibata
Director, Primary Executive Officer
Financial strategy to achieve fiscal 2015 goals
Under Cs for Tomorrow 2018 (CT2018) we are working to
By proactive investment in growth fields, we can achieve
create a portfolio of high-profitability and high value-added
sustainable business expansion to enable stable returns to
businesses as we aim to reach net sales of ¥3 trillion
our shareholders.
and operating income of ¥280 billion in fiscal 2025. The
With funds essentially raised through bank borrowings,
three-year period through fiscal 2018 is positioned as
we flexibly evaluate various methods to obtain stable
the time to build the base for the next phase of growth.
financing at low cost in accordance with financial circum-
We are expanding competitive businesses and creating
stances. We also utilize group finance in Japan and overseas
new added value in all three sectors of Material, Homes,
for capital efficiency. Recording strong results in fiscal 2017,
and Health Care to increase the generation of cash flow
we repaid borrowings and lowered our D/E ratio to 0.23 by
enabling both investments for growth and shareholder
fiscal year-end. Leveraging our sound financial condition
returns in an appropriate balance. While expanding
we will proactively invest for further growth toward our
established businesses with increased production capacity,
goals in fiscal 2025.
we are actively evaluating opportunities for strategic M&A.
Shareholder returns policy
Asahi Kasei’s basic policy for shareholder returns is to aim
for stable dividends and continuous dividend increases.
Based on this policy we have raised dividends in line with
earnings growth. Our results in fiscal 2017 were generally
favorable, with petrochemicals operations in particular
benefitting from high market prices and a weaker yen,
and positive impacts from sales of investment securities
and from the US tax reform. Net sales exceeded ¥2 trillion
for the first time, and each income category reached new
highs. We raised our annual dividend by ¥10 to ¥34 per
share reflecting such robust results. Our CT2018 target is
a total return ratio of 35% in fiscal 2018, and we plan to
continue to raise dividends as earnings increase.
(¥)
40
20
0
Dividends per share and payout ratio
34
27.9
30.4
20
29.1
24
25.1
19
23.5
17
'13
'14
'15
'16
'17
Dividends per share (left scale)
Payout ratio (right scale)
(%)
40
20
0
(FY)
18
Asahi Kasei Report 2018
Asahi Kasei Report 2018
19
Progress in financial strategy of CT2018
We expect to generate ¥600–700 billion of operating cash
nearly half that figure in the first two years. In fiscal 2018 we
flow during the three years of CT2018. With firm perfor-
plan to formalize over ¥200 billion of long-term investment
mance in the first two years, we have generated over ¥400
focused on established businesses. At the same time we
billion of operating cash flow and are on track to reach our
are actively evaluating strategic M&A opportunities that can
target.
contribute to further growth for the future. Decisions will
We plan to adopt decisions on ¥700 billion of long-term
be made in light of our financial condition.
investments during the three-year period, and reached
Progress on long-term investment (on decision-adopted basis)
Major investments
Material
Automotive
Environment/energy
Healthcare/hygiene
Homes
Acceleration of
new business creation
Environment/energy
Health Care
Acceleration of
globalization
FY2018 plan
(including M&A, etc.)
FY2016
Approx. ¥150 billion
CT2018
FY2016–2018
¥700 billion
in total
FY2017
Approx. ¥190 billion
Major investments
Material
Capacity expansion for
battery separator
Construction of new R&D
facility (fibers)
Capital and business alliance
with Chuo Build Industry
Co., Ltd.
Establishment of Kanto-area
site for steel-frame members
Homes
Capital and business alliance
with Mori-Gumi Co., Ltd.
Health Care
Augmenting product
pipeline (pharmaceuticals)
Major investments
Material
Capacity expansion for battery separator
Capacity expansion for S-SBR for fuel-efficient tires
Capacity expansion for LamousTM microfiber suede
Capacity expansion for LeonaTM nylon 66 filament
Acquisition of Senseair AB, a Swedish manufacturer of
gas sensor modules
Homes
Capital alliance with
McDonald Jones Homes Pty
Ltd in Australia
Health Care
Capacity expansion of
spinning for PlanovaTM virus
removal filters
Primary financial metrics
Net cash provided by operating activities (¥ billion)
Net cash used in investing activities (¥ billion)
Free cash flows (¥ billion)
Net income per share (EPS)
Net income per total assets (ROA)
Net income per shareholders’ equity (ROE)
Net income per net sales (ROS)
Total asset turnover ratio
Financial leverage
Net income per shareholders’ equity and
interest-bearing debt (ROIC)
D/E ratio
FY2013
FY2014
FY2015
FY2016
FY2017
244.2
(103.8)
140.4
¥72.48
5.5%
11.7%
5.3%
1.02
2.2
7.7%
0.33
137.6
(100.5)
37.1
¥75.62
5.4%
10.6%
5.3%
1.01
2.0
7.5%
0.25
216.2
(285.3)
(69.1)
¥65.69
4.3%
8.6%
4.7%
0.92
2.0
7.1%
0.43
169.0
(89.9)
79.0
¥82.34
5.1%
10.5%
6.1%
0.84
2.0
7.6%
0.35
249.9
(110.3)
139.6
¥121.93
7.4%
14.0%
8.3%
0.89
1.9
9.7%
0.23
18
Asahi Kasei Report 2018
Asahi Kasei Report 2018
19
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
Net wortha
Net worth per share, yen
Net worth/total assets, %
Number of employees
2018
¥2,042,216
1,274,548
767,668
198,475
212,544
218,333
170,248
177,717
121.93
101,331
95,415
85,695
34.00
2018
¥2,316,137
359,687
562,048
380,489
1,287,387
922.11
55.6
34,670
2017
¥1,882,991
1,226,633
656,358
159,229
160,633
157,388
115,000
138,979
82.34
90,573
91,387
79,566
24.00
2017
¥2,254,500
346,682
556,881
340,302
1,151,344
824.36
51.1
33,720
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
2016
¥2,211,729
336,743
555,989
305,140
1,041,901
745.94
47.1
32,821
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
2015
¥2,014,531
339,677
502,507
334,368
1,082,654
775.05
53.7
30,313
a Net assets less non-controlling interests.
b In the year ended March 31, 2012, the accounting policy for naphtha resale was changed to exclude naphtha resale amount from net sales. This change is applied retroactively
from the year ended March 31, 2008, through the year ended March 31, 2011.
Net sales1
Operating income1,2
2014
¥1,897,766
1,289,054
2013
¥1,666,640
1,181,429
485,211
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
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
256,248
418,354
220,773
663,566
474.59
46.5
25,016
91,960
95,125
82,302
53,712
117,515
38.43
113,785
80,050
71,120
14.00
309,677
461,581
263,704
812,080
581.05
45.1
28,363
Millions of yen, except where noted
2010b
¥1,392,212
1,021,803
370,409
2009b
¥1,521,178
1,127,213
393,965
2008b
¥1,663,778
1,176,441
57,622
56,367
46,056
25,286
—
18.08
83,990
86,166
62,924
10.00
251,084
447,497
226,331
633,343
452.91
46.3
25,085
34,959
32,500
19,031
4,745
—
3.39
126,725
79,436
60,849
10.00
273,539
441,271
218,477
603,846
431.77
43.8
24,244
487,337
127,656
120,456
105,599
69,945
—
50.01
82,911
73,983
56,170
13.00
272,372
424,193
234,873
666,244
476.39
46.7
23,854
2014
2013
2012
2011
2010
2009
2008
¥1,915,089
¥1,800,170
¥1,410,568
¥1,425,879
¥1,368,892
¥1,379,337
¥1,425,367
608,712
143,347
142,865
163,860
101,296
146,102
72.48
92,397
86,052
71,101
17.00
328,540
480,535
285,735
912,699
653.15
47.7
29,127
1,897.8
1,986.4
1,940.9
1,883.0
2,042.2
(¥ billion)
2,000
1,500
1,000
500
0
'13
'14
'15
Fibers
Health Care
Chemicals
Critical Care
Electronics
Others
Homes
'16
Construction Materials
'17
(FY)
165.2
159.2
198.5
157.9
143.3
(¥ billion)
250
200
150
100
50
0
-50
'13
'14
'15
Fibers
Health Care
Corporate expenses and eliminations, amortization of goodwill, etc.
Chemicals
Critical Care
Electronics
Others
Homes
'16
Construction Materials
'17
Net income attributable to owners of the parent, ROE
Interest-bearing debt, D/E ratio
(¥ billion)
180
150
120
90
60
30
0
101.3
105.7
11.7
10.6
91.8
8.6
115.0
10.5
170.2
14.0
(%)
24
20
16
12
8
4
0
(¥ billion)
500
400
300
200
100
0
449.7
402.8
303.9
269.0
301.7
0.33
0.25
0.43
0.35
0.23
'14
Net income attributable to owners of the parent (left scale)
'15
'13
'16
'17
ROE (right scale)
(FY)
'14
Interest-bearing debt (left scale)
'13
'15
'16
D/E ratio (right scale)
'17
(FY)
1.0
0.8
0.6
0.4
0.2
0
(FY)
1 Some businesses were transferred between categories in FY2016 and FY2017;
figures are shown according to the new classification thenceforth.
2 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, amortization of goodwill, etc.”
20
Asahi Kasei Report 2018
Asahi Kasei Report 2018
21
Income before income taxes
Net income attributable to owners of the parent
For the years ended March 31
Net sales
Domestic sales
Overseas sales
Operating income
Ordinary income
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
Net wortha
Net worth per share, yen
Net worth/total assets, %
Number of employees
a Net assets less non-controlling interests.
2018
¥2,042,216
1,274,548
2017
¥1,882,991
1,226,633
2016
¥1,940,914
1,261,203
2015
¥1,986,405
1,313,128
767,668
198,475
212,544
218,333
170,248
177,717
121.93
101,331
95,415
85,695
34.00
359,687
562,048
380,489
922.11
55.6
34,670
656,358
159,229
160,633
157,388
115,000
138,979
82.34
90,573
91,387
79,566
24.00
346,682
556,881
340,302
824.36
51.1
33,720
679,711
165,203
161,370
146,389
91,754
(11,925)
65.69
99,000
93,811
81,118
20.00
336,743
555,989
305,140
1,041,901
745.94
47.1
32,821
673,277
157,933
166,543
158,440
105,652
214,484
75.62
89,108
86,058
75,540
19.00
339,677
502,507
334,368
1,082,654
775.05
53.7
30,313
2018
2017
2016
2015
¥2,316,137
¥2,254,500
¥2,211,729
¥2,014,531
1,287,387
1,151,344
b In the year ended March 31, 2012, the accounting policy for naphtha resale was changed to exclude naphtha resale amount from net sales. This change is applied retroactively
from the year ended March 31, 2008, through the year ended March 31, 2011.
20
Asahi Kasei Report 2018
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
2014
¥1,915,089
328,540
480,535
285,735
912,699
653.15
47.7
29,127
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
2013
¥1,800,170
309,677
461,581
263,704
812,080
581.05
45.1
28,363
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
Millions of yen, except where noted
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
Environmental and safety investment
Greenhouse gas emissions from production processes
(¥ billion)
(million tons CO2 equivalent)
7.88
6.28
5.38
5.20
3.90
8
6
4
2
0
5
4
3
2
1
0
4.17
4.06
3.84
3.03
3.20
'13
Environmental investment
'14
'15
'16
'17
(FY)
Safety investment
'13
Carbon dioxide
Sulfur hexafluoride
'14
Nitrous oxide
'15
Methane
'16
'17
(FY)
HFCs
PFCs
Number of women working as managers3
Employees using parental leave4
410
454
500
534
575
600
500
400
300
200
100
0
600
500
400
300
200
100
0
468
457
556
582
566
'14/6
'15/6
'16/6
'17/6
'18/6
3 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
'13
Men
'14
'15
'16
'17
(FY)
4 Results 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).
Asahi Kasei Report 2018
21
Directors
After many years of experience in the electronics
business, including as President & Representative
Director of Asahi Kasei Microdevices Corp., he
oversaw the Asahi Kasei Group’s overall strategy,
accounting, finance, and internal control. He
assumed the role of President of Asahi Kasei in
April 2016. 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 businesses,
he held several leadership positions including Assistant
Senior 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 for-
mulating 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.
With his wealth of experience and broad range of
insight into corporate management, including as
Director 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.
1. President &
Representative Director
Presidential Executive
Officer
Hideki Kobori
5. Director
Senior Executive Officer
Nobuyuki Kakizawa
9. Outside Director
Tsuyoshi Okamoto
22
Asahi Kasei Report 2018
2. Representative Director
Vice-Presidential
Executive Officer
Masafumi Nakao
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 experi-
ence and a broad range of knowledge on R&D.
6. Director
Lead Executive Officer
Soichiro Hashizume
After many years of experience in human
resources, he held several leadership positions
including President of PTT Asahi Chemical
Company Limited. He has been responsible for
human resources development and the planning
and execution of personnel and labor measures
of the Asahi Kasei Group since April 2013. He pos-
sesses a wealth of experience and a broad range
of knowledge on human resources.
9
8
7
3
4
5
6
1
2
Asahi Kasei Report 2018
23
3. Director
Primary Executive Officer
Yutaka Shibata
7. Outside Director
Masumi Shiraishi
After many years of experience in legal affairs and
corporate planning, including as General Manager
of Corporate Strategy, Asahi Kasei Medical President
& Representative Director, and Asahi Kasei Pharma
President & Representative Director, he became
responsible for the Asahi Kasei Group’s strategy,
accounting, finance, and IT in April 2018. He pos-
sesses a wealth of experience and a broad range of
knowledge on the Asahi Kasei Group’s businesses
and corporate management.
With her wealth of experience and broad range of
insight into economics and society, including as a
professor at Kansai University, she fulfills her role
as Outside Director in deciding on important mat-
ters of the Asahi Kasei Group as well as overseeing
business execution.
4. Director
Senior Executive Officer
Shuichi Sakamoto
8. Outside Director
Tsuneyoshi Tatsuoka
After many years of experience in the petrochemical
business, including as General Manager of the
Performance Plastics Division and General Manager
of the Acrylonitrile Division at Asahi Kasei Chemicals,
he oversaw the Asahi Kasei Group’s strategy,
accounting, finance, and IT, and in April 2018 became
responsible for the Health Care business sector. He
possesses a wealth of experience and a broad range
of knowledge on the Asahi Kasei Group’s businesses
and corporate management.
With his wealth of experience and broad range
of insight into industrial 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.
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23
Corporate Governance
1
Basic Views on Corporate Governance
The Group Vision of Asahi Kasei is to provide new value to society
the longer term by promoting innovation and creating synergy
and solve social issues by enabling “living in health and comfort”
through integration of various businesses. We continue to pursue
and “harmony with the natural environment” under the Group
the optimal corporate governance as a framework to make
Mission of “contributing to life and living for people around
transparent, fair, timely, and resolute decisions in accordance with
the world.” With this as a base, we aim to contribute to society,
changes in the business environment.
achieve sustainable growth, and enhance corporate value over
2
Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management (as of June 27, 2018)
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
Risk Management & Compliance Committee
Compliance Hotline
Responsible Care Committee
Internal Audit Department
Group staff functions
Core Operating Companies, Strategic Business Units
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25
3
Corporate Governance System
Oversight and audit
Furthermore, the Internal Audit Department conducts
The Board of Directors, which consists of nine Directors including
internal audits based on the audit plan. Results of internal audits
three independent Outside Directors (one-third), makes decisions
performed by each group staff function are aggregated by the
on matters requiring a Board of Directors resolution in accordance
Internal Audit Department and reported to the Board of Directors.
with laws or the Articles of Incorporation, makes decisions on
important matters for Asahi Kasei Corp. and other companies of
Execution of operation
the Group, and oversees execution of operations by Directors and
We have adopted an Executive Officer system to enable faster
Executive Officers.
business execution, and clearly define responsibilities; Directors
The Nomination Advisory Committee and Remuneration
fulfill decision-making and oversight functions, and Executive
Advisory Committee under the Board of Directors consist primarily
Officers fulfill execution of operations.
of Outside Directors who provide advice in the consideration
The Decision-making and Approval Authority Regulations
of matters such as: optimal makeup and size of the Board of
of the Asahi Kasei Group stipulate detailed criteria for decision-
Directors, policy regarding nomination of candidates for Directors
making with regard to matters concerning the management
and Corporate Auditors, criteria on the independence of Outside
plan, investments and loans, funding and financial management,
Directors and Outside Corporate Auditors, remuneration policy
organization and corporate regulations, research and develop-
and system for Directors, and evaluation of individual Directors to
ment, and production technology, and delegate authority from
determine remuneration based on performance.
the Board of Directors to the Management Council, strategic
The Board of Corporate Auditors consists of five Corporate
business units, and core operating companies.
Auditors including three independent Outside Corporate Auditors
(a majority). In accordance with the audit policy stipulated by the
Risk management and compliance, etc.
Board of Corporate Auditors, each Corporate Auditor oversees
We have a Risk Management & Compliance Committee which
execution of duties by Directors by attending the Board of
determines policy and deliberates on matters related to risk
Directors meetings and examining the state of operations. To
management and compliance. We also have a Responsible Care
enhance functions of the Board of Corporate Auditors and to
Committee which deliberates on measures to prevent accidents
facilitate smooth cooperation among Corporate Auditors from
involving environmental protection, quality assurance, operational
inside the company and Outside Corporate Auditors, a Corporate
safety, workplace safety and hygiene, and health maintenance,
Auditors Office is staffed with full-time employees.
and to prevent recurrence.
PricewaterhouseCoopers Aarata LLC performs financial audits
based on the Companies Act and the Financial Instruments and
Exchange Act.
4
Policy and Procedure to Nominate Candidates for Directors
In selecting candidates for Directors, we appoint persons with
were corporate executives, academic experts, or public officials.
deep insight and excellent skills suitable for the role. For Directors
To further heighten objectivity and transparency in appointing
from inside the company, we select those with expertise, experi-
candidates for Directors, we established a Nomination Advisory
ence and skills required in the respective field. On the other hand,
Committee which consists primarily of Outside Directors who
Outside Directors are expected to supervise the management
take part in discussions of the makeup and size of the Board of
from an objective standpoint based on their deep insights and
Directors and policies for nomination of Directors and Corporate
rich experience. Therefore we select from among people who
Auditors, and provide advice to the Board of Directors.
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25
Corporate Governance
5
Policy and Procedure to Determine Remuneration of Directors
Directors’ remuneration consists of fixed base remuneration,
current effort with compensation reflecting future share prices
performance-linked remuneration, and stock-based remuneration.
by granting the shares at the time of each individual’s retirement
The monetary amount and number of stocks are determined
from any position of officer of the Asahi Kasei Group, with the
based on the remuneration system approved in advance by the
number of shares to be granted being determined in accordance
Board of Directors, within the limits approved at a shareholders
with each Director’s rank. Remuneration for Outside Directors,
meeting.
however, is comprised solely of fixed base remuneration.
Fixed base remuneration provides specific amounts in accor-
We determine the level of remuneration based on research
dance with the rank of each Director. Performance-linked remu-
data provided by external specialized agencies, etc.
neration is based on consolidated financial results and individual
In order to further improve objectivity and transparency of
performance evaluation. Performance is comprehensively evalu-
Directors’ remuneration, we have established a Remuneration
ated in consideration of the degree of achievement of individually
Advisory Committee, which consists primarily of Outside Directors,
established objectives, achievements, contributions to financial
who participate in discussions about the Directors’ remuneration
performance, and the degree of contributions, in addition to man-
system and operation thereof, and provide advice to the Board of
agement benchmarks such as net sales, operating income, and
Directors.
ROA. The stock-based remuneration system is designed to reward
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 correspond
to any of the following and whether they are capable of perform-
ing duties from a fair and neutral standpoint.
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)
3. Major business partner of the Asahi Kasei Group (when
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
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
5. Company which receives donation or aid (¥10 million 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 com-
pany 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 Auditors of the Asahi Kasei Group or any staff
thereof
9. Person who fell into any of the categories 2 through 8 above
over the last three years
10. Person who has a close relative (spouse, relative within the sec-
ond 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 (executive directors,
executive officers, etc.)”
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27
7
Audits
In accordance with the audit policy adopted by the Board of
performance of the audit in accordance with its audit plan,
Corporate Auditors, each Corporate Auditor attends meetings
comprising 19 certified public accountants and 34 other specialist
of the Board of Directors and audits Directors in the discharge of
accountants.
their duties through examination of business performance. The
The Internal Audit Dept., the Board of Corporate Auditors, and
Corporate Auditors Office provides staff to support Corporate
the Corporate Auditors of core operating companies and other
Auditors in their duties.
subsidiaries regularly meet to confirm the effectiveness of internal
PricewaterhouseCoopers Aarata LLC is contracted as the
governance systems for legal compliance and risk management.
Independent Auditors to perform financial audits according to
The Board of Corporate Auditors provides counsel to the
the Companies Act and Financial Instruments and Exchange Act.
Independent Auditors of the consolidated financial audit of Asahi
The Independent Auditors form a team of assistants for
Kasei each quarter and each fiscal year.
Evaluation of the Effectiveness of the Board of Directors
The effectiveness of our Board of Directors is regularly evaluated after each fiscal year, and results of evaluation are disclosed.
Measures implemented in fiscal 2017
The Board of Directors implemented the following measures in fiscal 2017 based on evaluation of the previous fiscal year.
Enhanced provision of information to Outside Directors and Outside Corporate Auditors
As part of our effort to expand the provision of information to Outside Directors and Outside Corporate Auditors, we contin-
ued to provide them with tours of our production sites and R&D facilities. To help them gain a deeper understanding of our
diverse operations, we also provide them with regular explanations by people responsible for the business units and invite
them to attend various events held inside and outside the company.
Sharing information on IR activities and opinions of investors
In addition to reporting a summary of IR activities, the responsible Executive Officer has begun to regularly report and share
opinions of investors with the Board of Directors.
Moving forward
We will continue to extend efforts to enrich information provision for Outside Directors and Outside Corporate Auditors, and
work to enrich deliberations at Board of Directors meetings through the timely input of perspectives of investors. Based on
deliberations of the effectiveness of the Board of Directors during fiscal 2017, we will continue and expand these efforts in
the future. In fiscal 2018, we plan to develop discussions among attendees of Board of Directors meetings including Outside
Directors and Outside Corporate Auditors on the longer-term direction of management strategies for the next medium-term
management initiative which will start in fiscal 2019.
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27
Outside Directors Dialogue
Outstanding people are transforming Asahi Kasei
Outside Directors Tsuneyoshi Tatsuoka and Masumi Shiraishi
discuss the way for Asahi Kasei to raise corporate value
Corporate governance at Asahi Kasei
Tatsuoka When Japan’s Corporate Governance Code was
applied to listed companies in 2015, Asahi Kasei had already
focused efforts on strengthening corporate governance for some
time. During the two years that I’ve been an Outside Director,
The Board of Directors has serious discussions on M&A in
various fields of business; we consider how a company could
add value, and how a business could contribute to earnings.
Management decisions are made with a clear focus on raising
corporate value. Information disclosure is proactive. All three
Outside Directors are independent, and there is a good balance
various governance issues were raised in the course of evaluating
among each of our areas of specialty.
the effectiveness of the Board of Directors, as well as through
meetings between Corporate Auditors and Outside Directors.
Each issue was given serious consideration and improvements
were proposed in turn.
Still, there are concerns. Asahi Kasei has an extremely broad
range of operations, and sites located across the world. So there
must be more than a few unseen risks. As business continues
to expand, more deliberate effort will be needed to reveal such
Corporate governance is a continuing process; there’s never
unseen risks.
a point where you can say “It’s finished.” Issues to be addressed
are constantly changing as the management climate evolves. We
must maintain a keen sense of the importance of measures to
further strengthen corporate governance.
Shiraishi Yes, but Asahi Kasei did update its governance
configuration in accordance with the principles of the Corporate
Governance Code when it was introduced.
Tsuneyoshi Tatsuoka
Outside Director
April 1980:
Joined Ministry of International Trade
and Industry
January 2010: Councilor, Cabinet Secretariat
August 2011: Deputy Vice-Minister of Economy,
Trade and Industry
Vice-Minister of Economy,
Trade and Industry
Retired from Ministry of Economy,
Trade and Industry
Outside Director, Asahi Kasei Corp.
(position held at present)
June 2013:
June 2016:
July 2015:
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29
Impression of the Board of Directors
Tatsuoka I appreciate the various measures devised to foster
high-quality discussions. As you mention, Asahi Kasei has a very
wide range of businesses. The important thing is how the Board
of Directors looks at each one. We don’t delve into the details of
individual measures taken. Rather, we grasp the essence of each
matter and have high-level discussions from a broad point of
view.
I also feel that management speed has increased to keep pace
with a rapidly changing world. We need to appropriately judge
when to step on the accelerator and when to apply the brakes.
If we’re too cautious and keep stepping on the brakes, we will
miss out on opportunities for growth. As someone who has spent
many years focused on the growth of the Japanese economy, I
fully recognize the importance of this. At Board of Directors meet-
ings, I always try to offer opinions on how the company can make
is no information gap between the Outside Directors and the
Directors from inside the company. Several times a year we also
have on-site visits to learn about the different businesses, and we
also attend conferences where R&D results are presented. I find
such events to be very informative.
I also think Chairman Itoh (now Honorary Chairman) was very
skillful at leading the board meetings. Among the board mem-
bers, he was the most knowledgeable of Asahi Kasei’s history.
He often interspersed the discussion with historical perspective,
which was engaging for us as Outside Directors. He also adeptly
made the discussion mesh among Outside Directors and the
Directors from inside the company. I think Itoh-san’s leadership
raised the quality of discussions for the Board of Directors.
Tatsuoka Yes, and now that President Kobori is chairing the
meetings, I feel that high-quality discourse is maintained. He is
able to guide the discussion to weave together both inside and
the most of opportunities in every situation.
outside perspectives.
Shiraishi You mention the measures to raise the quality
of discussions by the Board of Directors. I’m impressed by
how thorough these are. For example, we are briefed on the
background and main issues related to items on the agenda prior
to board meetings. It’s an effective means of ensuring that there
Outsider’s perspective on Asahi Kasei’s strengths
Tatsuoka I feel that Asahi Kasei’s true strength lies in having a
firm corporate philosophy that is shared by all personnel. Long
before ESG became prevalent, Asahi Kasei already had a Group
Mission of “contributing to life and living for people around the
world,” and a Group Slogan of “Creating for Tomorrow.” These
are clear and concise expressions of the spirit of the company
which permeates throughout, and is brought to life in business
operations. Another strength is the trove of technology that
provides the seeds of new business, which is how the company
continues creating for tomorrow.
Masumi Shiraishi
Outside Director
May 1989: Joined NLI Research Institute
April 2001: Head Researcher, NLI Research Institute
April 2002: Assistant Professor, Department of
Economics, Toyo University
April 2006: Professor, Department of Economics,
Toyo University
April 2007: Professor, Faculty of Policy Studies, Kansai
University (position held at present)
June 2013: Outside Director, Asahi Kasei Corp.
(position held at present)
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29
Outside Directors Dialogue
Shiraishi I see the source of Asahi Kasei’s strength as having so
many positive thinkers, working in a flat organizational structure.
People communicate with ease. Even under challenging circum-
stances, they earnestly share their views on actions that will help
their business advance toward a brighter future.
What Asahi Kasei needs for global growth
Shiraishi Since we can’t expect robust growth in the Japanese
market, the company will need to raise the pace of globalization.
Connecting with many partners whose operations complement
We said the company has a wide range of businesses, but at
Asahi Kasei’s established businesses, while retaining and foster-
a time of dramatic changes in the world about us, this diversity of
ing various innovative personnel, will be essential.
operations is itself a strength, isn’t it?
Completing “Cs for Tomorrow 2018”
Shiraishi The company achieved its income targets a year
ahead of schedule. I think that attests to Asahi Kasei’s outstand-
ing management and employees. Now in the final fiscal year,
it will be vital to gain solid earnings from the investments and
acquisitions made thus far.
I also think further globalization of business will require
greater diversity in the Board of Directors over the longer term.
We should consider having more Directors with a technological
background, female Directors not only from outside the com-
pany but also from within, and non-Japanese Directors as well.
Tatsuoka I agree that people will be an important key. Digital
transformation including AI and IoT is bringing very rapid
changes to the world, and material industries may be profoundly
I also feel the company should do a better job of drawing
affected. More and more, Asahi Kasei will need personnel with
attention to performance characteristics that go beyond busi-
high IT literacy, personnel who understand different cultures for
ness results. Though Asahi Kasei is very active in areas related to
overseas business, and personnel who can make the needed
ESG, many aspects are not widely known. Greater recognition
connections for success moving forward.
can be gained by using key performance indicators to enable
easier understanding.
Tatsuoka The company is well on track to achieve solid finan-
cial performance with its medium-term management initiative,
centered on businesses that provide new value to society by
enabling “living in health and comfort” and “harmony with the
natural environment” in accordance with its Group Vision.
Asahi Kasei is aiming at high targets for fiscal 2025, ¥3 trillion
in net sales and ¥280 billion in operating income. While advanc-
ing discussions on the next medium-term initiative with an eye
toward those targets, fiscal 2018 is also a year to study concrete
measures to prepare for various forthcoming changes.
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31
Specific Measures to Heighten Compliance
“Compliance,” “Communication,” and “Challenge” are identified as areas of emphasis to solidify the foundation for
future growth under our Cs for Tomorrow 2018 management initiative. To heighten awareness for compliance among
personnel, we are focusing on the “three actuals”—the trust of society is earned by having employees go to the actual
place in person, see the actual thing with their own eyes, and know the actual facts.
Basic principles
The Asahi Kasei Group takes compliance seriously, and fully adheres to laws and regulations that are applicable to each business and
function, as well as internal company rules. Each employee is also expected to uphold high ethical standards and respect social norms
throughout the course of business activities, acting with sincerity in accordance with our Group Values based on our Group Mission.
Internal framework
Asahi Kasei Group Basic Regulation for Risk Management & Compliance
The Asahi Kasei Group Basic Regulation for Risk Management & Compliance specifies basic systems and organizations for the central
aggregation and administration of all matters related to risk management and compliance.
Outline of Asahi Kasei Group Basic Regulation for Risk Management & Compliance
1. Purpose of the regulation 2. Definition of terms for risk management & compliance
3. Scope of application of the regulation
4. Framework for risk management & compliance
1) Designation of Executive Officer for Risk Management & Compliance
2) Establishment and composition of Risk Management & Compliance Committee
3) Establishment of Risk Management & Compliance Oversight Department and Risk Management & Compliance Promotion Departments
4) Role of Presidents of SBUs and core operating companies
5) Designation and role of Risk Management & Compliance Supervisors and Risk Management & Compliance Managers
5. The Asahi Kasei Group Code of Conduct 6. Crisis response 7. Compliance hotline (internal reporting system)
Risk Management & Compliance Committee
Our Risk Management & Compliance Committee is chaired by the President of Asahi Kasei Corp. with the Presidents of each Strategic
Business Unit and Core Operating Company serving as committee members. The committee determines policy and deliberates on
matters related to risk management and compliance, and monitors the management of risks and the state of compliance throughout the
Asahi Kasei Group. Results of the committee’s deliberations, etc., are reported to the Board of Directors.
Main subjects on the committee’s agenda
1) Summary of activities and results based on annual plans for risk
management and compliance
2) Progress of education and training regarding the Asahi Kasei
Group Code of Conduct
3) Reports of compliance violations and measures taken in response
4) State of operation of the compliance hotline
5) Disciplinary measures imposed on employees
Framework for risk management & compliance
Board of Directors,
Management Council
Deliberation/decision
Reporting
Risk Management &
Compliance Committee
(Secretariat)
Risk Management & Compliance,
General Affairs
(Risk Management &
Compliance Oversight Department)
Coordination
Administrative departments
(Risk Management &
Compliance Promotion Departments)
Business units
Instructions/reports
Strategic Business Units
Core Operating Companies
Subsidiaries (worldwide)
Subsidiaries (worldwide)
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31
Specific Measures to Heighten Compliance
Asahi Kasei Group Code of Conduct
A-Spirit March/April 2017
In April 2017, we fundamentally reviewed the content of our former “Corporate Ethics—Basic Policy and Code of Conduct” and adopted a
new “Asahi Kasei Group Code of Conduct” which is applied throughout all companies of the Asahi Kasei Group for greater ease of under-
standing among our personnel around the world. The new code of conduct was distributed as a booklet to all employees in Japan. It was
translated into various languages for international employees, and measures are advancing to gain understanding among subsidiaries and
affiliates located outside Japan. The code of conduct is also made available to the public on our website.
Launch of New Asahi Kasei Group Code of Conduct
Outline of the Asahi Kasei Group Code of Conduct
Compliance is positioned as one of the top management priorities under the “Cs for Tomorrow
2018” medium-term management initiative. As a part of the program to reinforce compliance, our
1. Ensuring Safety, Environmental Protection, and High Quality to Contribute to Life and Living
(1) Maintaining Thorough Safety in All Aspects (2) Provision of Safe and High-Quality Products and Services that Customers Can Rely On
(3) Thorough Management of Workplace Safety, Ensuring Safe and Comfortable Workplace Environments
(4) Environmental Protection and Harmony with Local Communities
Group Code of Conduct effective April 1, 2017.
Corporate Ethics—Basic Policy and Code of Conduct was reviewed and replaced with a new Asahi Kasei
The occurrence of manipulation of precast concrete pile installation data by a subsidiary raised the
2. Maintaining Sincere Relationships with Various Related Parties around Us
(5) Timely and Appropriate Disclosure of Information to Society
(6) Appropriate Descriptions to Customers, Provision of Safe and Reliable Products and Services
(7) Healthy Relationships with Customers and Government Officials (8) Fair Relationships with Competitors
(9) Optimized Procurement and Healthy and Appropriate Relationships with Suppliers (10) Respect for Human Rights and Diversity
exigency of a review of our compliance system. Furthermore, as the number of personnel working
outside of Japan has grown to about 1/3 of the total, it became necessary to review our compliance
system from a more international perspective. The new Asahi Kasei Group Code of Conduct has been
3. Utilizing Management Assets Appropriately and Effectively
(11) Performing Work with Integrity and Responsibility (12) Compliance with Accounting and Tax Rules, Protecting Company Property
(13) Protecting and Managing Information (14) Protecting and Respecting Intellectual Property Rights
(15) Compliance with Laws and Regulations, Practicing Corporate Ethics
formulated to apply universally around the world, with simple and easy to understand supplemental
explanations being prepared in accordance with the requirements in each country.
Asahi Kasei Group Code of Conduct
1.
What the Asahi Kasei Group Code of
Conduct means to you
Heightened employee awareness
For a corporate citizen, compliance is not limited
Discussions were held at workplaces in Japan based on case studies
to laws and regulations. It also extends to internal
regarding each section of the Asahi Kasei Group Code of Conduct.
company rules and conformity with social norms.
Posters on the code of conduct were hung in each workplace, and
As a member of the Asahi Kasei Group, each of us is
expected to act with sincerity and uphold high ethical
a business-card sized summary was distributed to employees in
standards as we work to fulfill our Group Mission in
Japan enabling easy reference at any time.
accordance with our Group Values.
The Asahi Kasei Group Code of Conduct is a practical
guide and standard for ethical conduct throughout
Material for workplace discussions
the day-to-day work of each and every member of the
Asahi Kasei Group. Please take a moment to review the
Group Mission and Group Values as well.
Group Mission
Compliance hotline
We, the Asahi Kasei Group, contribute to life and living for people
around the world.
The Asahi Kasei Group began employing a Compliance Hotline
This is the Asahi Kasei Group’s unchanging reason for being. What we never cease
in April 2005 to ensure that any possible ethical lapses which
to strive for, though the needs of society change throughout the ages. It is in our
employees may encounter or observe are dealt with swiftly and
very nature, deriving from a sincere regard for the people of the world.
appropriately. In fiscal 2015, the system was expanded to enable
suppliers and their employees to report or consult.
Group Values
Sincerity—Being sincere with everyone.
Challenge—Boldly taking challenges, continuously seeking change.
Creativity—Creating new value through unity and synergy.
Reports and responses
During fiscal 2017 there were 47 reports and consultations made
These are the shared values that must be held by the people who work in the Asahi
Kasei Group. They define our fundamental approach in the process of pursuing our
through the hotline system. None of them regarded significant
Group Mission, held in common among our diverse range of personnel.
matters which would affect the performance of operations.
Some 70% of the reports and consultations concerned
personal relationships among workplace colleagues. After fact-
checking, cautions were issued to relevant personnel as necessary,
and monitoring to confirm improvement was performed.
2.
3.
私
た
ち
の
行
動
規
範
！
What is expected of officers and employees of the Asahi Kasei Group
Trust is built by the consistent effort of all officers and employees of the Asahi Kasei Group to perform their work with integrity based on
the Asahi Kasei Group Code of Conduct. Please read the Asahi Kasei Group Code of Conduct and become familiar with how it applies to
your work. In case of any doubt or uncertainty when deciding on a course of action, refer to it together with relevant internal company
Workplace poster
rules as well as applicable laws and regulations.
Portable summary
「コンプライアンスホットライン」
（内部通報制度）を知っていますか？
コンプライアンスホットライン（内部通報制度）とはなんですか？
コンプライアンス違反に関する情報をできるかぎり早期に発見し、法令違反や不正・不祥事等を未然に防
ここが気になる！
Aさん
旭化成行動規範 A2 ポスター
旭化成行動規範 定期券サイズ 外面
Overview of the Asahi Kasei Group Code of Conduct
それでも判断に迷う場合は、
表紙のセルフチェック項目を確認してください。
適法で、誠実な行動といえるだろうか？
判断に迷う場合
誠実な行動の実践において、判断に迷うこと
があった場合は、まずは「グループ行動規範」
の各項目や、関 連する法 令や社 内ルールを
確認してください。
旭化成グループ行動規範
私たちの行動は、
それでも、さらに判断に迷う場合は、「グループ
行動規範に関する相談先」に記載する先へ
相談を行ってください。
旭化成グループの理念やバリュー（価値観）
の精神にかなっているだろうか？
広く社会やメディア･当局･お客様･取引先
85mm
85mm
読
み
込
も
う
、
実
践
し
よ
う
！
The Asahi Kasei Group Code of Conduct was formulated to match the characteristics of the Asahi Kasei Group with business based on
manufacturing, while the codes of conduct of major global companies were consulted as reference on global perspectives.
旭化 成グループは、内部通 報制度を導入・
運用しています。詳細は、「日本国内における
コンプライアンスホットライン（内部通報制度）
について」を確認してください。
制度改定の背景について
2000年代初頭に企業不祥事が企業内部からの通報で発覚したことを契機に、「公益通報者保護法」と「公益通報者保護法に関する民間事業者向けガイドラ
イン」が制定され、これに合わせて旭化成グループも05年に内部通報制度を導入しました。16年12月にガイドラインが改訂されたことを受け、今般、制度を見
直しました。
家族や友人にも胸を張って、恥ずかしく
などに自信を持って説明できるだろうか？
内部通報制度について
ない行動だと説明できるだろうか？
社内標準Webホームページ ➡
「コンプライアンスホットライン」
告することを制度化しました。監査役会が調査にあたる場合もあります。
※ セクシュアル・ハラスメントや雇用機会均等法に関する相談・通
※ 規程や運用の詳細についても掲載しています。
報などは人事部ダイバーシティ推進室で対応します。
コンプラさん
是正・解決
12
※ 上記のイメージは代表的な対応例です。詳細なフロー図は左記のイントラネット上の
「コンプライアンスホットライン」でご確認ください
11
Bさん
Announcement of amendment
The system and operation of our
Compliance Hotline was partially
amended in accordance with
guidelines issued by Japan’s
Consumer Affairs Agency in
December 2016. The amendment
was announced in the internal
magazine and on the corporate intranet.
Dさん
Gさん
Cさん
Eさん
Fさん
ぎ、旭化成グループが社会やお客さまからの信頼を確保するための制度です。
このたび、旭化成グループではコンプライアンスホットラインを改正しました。
誰が利用することができるのですか？
社員、契約社員、派遣社員、パート、アルバイトなど、旭化成グループで働く全ての従業員が対象です。
どんなことを通報できるのですか？
グループ内で起きている法令違反や、行動規範・就業規則等の社内規程に違反する行為です。それを見聞
きしたときや、職場や上司との相談では解決できないときに利用してください。なお、私利のみを目的にし
たり、他人を陥れることを目的として利用することはできません。
どうやって利用することができるのですか？
コンプラさん
コンプラさん
コンプラさん
制度について改めてご紹介します。
通報から是正までの流れのイメージ
取締役 兼 上席執行役員
（ 総 務・法 務、 リスク・
コンプライアンス担当）
柿澤 信行さん
通報者
通報
イントラネット上の「コンプライアンスホットライン」、弁護士事務所への封書の郵送、どちらの方法でも
かまいません。スムーズな調査のため、できる限り実名での通報をお願いします。
コンプライアンスに沿った行動を実践することは
旭化成グループで働く私たちの責務です。小堀社長
社内イントラ
弁護士事務所
受け付けた通報はどのように取り扱われるのですか？
内部通報事務局が、必要な場合は調査・対応チームを作って調査します。調査の結果、違法行為等が認め
皆さんが日々の業務の中で判断に迷うことがあっ
られれば然るべき対応をとります。実名で通報された方には調査結果や対応についてご連絡します。
コンプラさん
が言われている通り、利益とコンプライアンスが相
反する場合は迷わずコンプライアンスを優先してく
ださい。
コンプラさん
に出会った場合の連絡先として、コンプライアンス
た場合や、コンプライアンスに違反するような事柄
ホットライン（内部通報制度）を設けています。
この制度はコンプライアンスを推進するための重
要な仕組みです。
皆さん、制度の内容を充分に理解し、活用してくだ
コンプラさん
さい。
連絡
事務局
リスク・コンプライアンス
担当役員
調査・対応チーム
（必要に応じて編成）
調査・事実確認
コンプライアンス違反
発生部場・個人
通報したら周りに知られてしまうことはないのでしょうか？
実名で通報された方のお名前は、厳秘扱いとして、事務局限りとしています。通報内容は事務局、調査・対応
チームなど必要最低限の範囲にとどめています。なお、通報者に不利益な取り扱いをすることはありません。
従来の制度と何が変わっているのですか？
2015年から、購買や設備工事等の発注に関するお取引先とその従業員の皆さまからも通報ができるよ
うにしています。また、今回から、重大なコンプライアンス違反の場合等について、旭化成の監査役会に報
コンプライアンス
ホットラインはこちらです！
行動規範をいつでも確認できるようにコンパクトにまとめた
（2017年10月発行）
お名前
携帯カードを皆さんに配布しています。
The Asahi Kasei Group Code of Conduct consists of three parts.
（財布や定期入れに入る２つ折りのカードサイズです）
1
Ensuring safety, environmental
protection, and high quality to
contribute to life and living
Part 1 concerns ensuring all aspects of safety
in our business activities, and how we should
meet society’s expectations and requirements
for safety, the environment, and quality (sections
1–4)
Asahi Kasei Report 2018
32
107mm
107mm
2
Maintaining sincere
relationships with various
related parties around us
Part 2 concerns building and maintaining sin-
cere relationships with various related parties
such as the general public, customers, share-
holders, investors, suppliers, competitors, and
employees (sections 5–10)
The Asahi Kasei Group Code of Conduct is available at the following address.
www.asahi-kasei.co.jp/asahi/en/csr/compliance/about_compliance/pdf/code_of_conduct.pdf
3
Utilizing management assets
appropriately and effectively
Part 3 concerns the proper management and
effective use of all management assets (sections
11–15)
7
Asahi Kasei Report 2018
33
Measures for risk management
We provide clear guidelines for risk management and emergency response in accordance with the Asahi Kasei Group Basic Regulation for
Risk Management & Compliance.
Reviews to identify latent risks in each business unit
Managers responsible for risk management and compliance are designated in each SBU, core operating company, and subsidiary. They
work to thoroughly identify, assess, and analyze their related risks, and to plan and implement measures to mitigate serious risks. Through
the Risk Management & Compliance Committee, we confirm and follow-up on the state of risk management in each business unit.
Crisis response system
Due to accidents, incidents, or problems, if Asahi Kasei Group operations are significantly damaged or would cause serious adverse effects
on the general public, we have a system to establish a group emergency response headquarters which works with the relevant divisions
and departments to ensure that the proper response is taken.
Measures applied throughout the Asahi Kasei Group
Prevention of bribery
The Asahi Kasei Group considers bribery to be an important risk factor which could seriously jeopardize our corporate reputation. Applied
throughout all operations, the Asahi Kasei Group Policies for Prevention of Bribery clarify basic policies to prohibit bribery and procedures
to follow to avoid bribery-related risks. Education and training on the prevention of bribery are provided to personnel worldwide, includ-
ing e-learning and workshops.
The Asahi Kasei Group Policies for Prevention of Bribery are available at the following address.
www.asahi-kasei.co.jp/asahi/en/csr/compliance/about_compliance/pdf/about_compliance_02.pdf
Information security
Recognizing the importance of countermeasures to protect against information security risks, we established the Asahi Kasei Group
Information Security Policy and aim to ensure and further improve information security. A range of information security measures is sys-
tematically applied for protection against sophisticated cyberattacks such as targeted threats. Our internal company rules were amended,
employee education and training including e-learning and e-mail drills performed, and monitoring functions reinforced with the adoption
of a high-level monitoring system.
The Asahi Kasei Group Information Security Policy is available at the following address.
www.asahi-kasei.co.jp/asahi/en/csr/compliance/about_compliance/
Protection of personal information
Asahi Kasei is committed to the proper handling and use of personal information, in accordance with the Asahi Kasei Group Regulation for
Management of Personal Information. An information security handbook which describes our rules for handling information is distributed
to all employees, and education is performed via e-learning.
We revised the Asahi Kasei Group Regulation for Management of Personal Information in accordance with an amendment to Japan’s
Act on the Protection of Personal Information which became effective in May 2017. Additionally, to comply with the EU General Data
Protection Regulation (GDPR) which became effective in May 2018, we established new Asahi Kasei Group Bylaws for Management of
Personal Information for GDPR and prepared the necessary standards and systems.
Prevention of insider trading
In March 2017, an employee of a subsidiary was fined by Japan’s Financial Services Agency for insider trading. Taking this matter very
seriously, we revised the Asahi Kasei Group Regulation for Prevention of Insider Trading to prevent any recurrence. Measures were swiftly
applied to gain understanding and awareness among personnel regarding the revised regulation and related internal rules. Management
of share-trading by officers and employees has been enhanced under the new rules, and a wide-ranging program of education and train-
ing is ongoing.
32
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33
R&D and Human Resources
Enhancing the system to create
new businesses and strengthen
established businesses
Masafumi Nakao
Representative Director, Vice-Presidential Executive Officer; Executive Officer for R&D
Strategy of New Business Creation
One of our basic strategies under the “Cs for
Tomorrow 2018” medium-term management
initiative is “creation of new businesses.” Having
various technologies and diverse business
operations, the Asahi Kasei Group is striving to
create new value through combinations among
core technologies, multifaceted business models,
and diverse human resources. The areas of “clean
environmental energy” and “healthy/comfortable
longevity with peace of mind” are targeted in R&D
to create new businesses that provide solutions to
challenges faced by society.
Aims and approach for new business creation
Our main areas of
focus to address
social issues
Foster and acquire
core technology
Acquire technology seeds
Apply technology laterally
Society of clean
environmental
energy
Society of
healthy/
comfortable
longevity with
peace of mind
CVC
Coordination/
combination
Strengths of
Asahi Kasei
Utilize market
channels
Enhance and fully
utilize business platforms
Heighten
added value
Business models
Solutions
M&A
The Asahi Kasei Group will create new businesses by leveraging our
strengths in technology and operations from a 3-axis perspective.
The first axis is to enhance and fully utilize our market channels.
By utilizing the various market channels and platforms of each
business area throughout the Asahi Kasei Group, we will develop
a broad range of new businesses. The second axis is to foster and
acquire core technology. While performing in-house R&D, we will
actively apply new external technologies to enhance our core
technologies. The third axis is to heighten added value. In addition
to just supplying substances, which had been our main approach
particularly in material businesses, we will place greater emphasis
on building new business models around services and solutions.
Approach for new business creation viewed by market axis and technology axis
Established mature markets
Established growth markets
New markets
Potential future markets
until FY2018
until FY2025
1. Coordinate with strategic business units and core operating
companies
Maximizing value of established businesses
• Brand strength/market channels • Cost competitiveness • Services
2. Utilize information technology, study new business models
Creating added value from new perspectives
• Higher added value from solutions
3. Coordinate with strategic
business units and core
operating companies
• Marketing
• Full utilization of Asahi Kasei
Group technologies and business
platforms
• Acquiring missing parts (CVC)
/
s
t
n
e
m
e
v
o
r
p
m
i
s
n
o
i
t
a
n
b
m
o
c
i
i
l
/
s
e
g
o
o
n
h
c
e
t
g
n
i
t
s
i
x
E
l
d
e
p
o
e
v
e
d
y
l
w
e
N
i
l
s
e
g
o
o
n
h
c
e
t
4. Review programs, examine originality and differentiation
B-to-C in Health Care and Homes sectors
• Better therapy
• Comfortable residential living
B-to-B in Material sector
• Disregarding mature markets
• Pursuing originality and differentiation in growth markets
5. Focus on strong points and
accelerate
• Accelerating R&D
• Acquiring technology seeds/
sprouts by CVC
• New business models
6. Basic/exploratory research in
collaboration with universities
and government research organs
Long-term perspective
• Develop/acquire leading-edge
technology
• Collaboration with outside
research institutions
34
Asahi Kasei Report 2018
Asahi Kasei Report 2018
35
We perform longer-term group-wide corporate R&D projects where we identify business areas with a high degree of
novelty and markets having high growth potential. R&D for further enhancement of existing businesses is focused on
ways to build on our strengths.
To attain our ideal for Asahi Kasei in 2025, we have reformed our training and systems of education and support to
strengthen the two mainstays of management skills and specialist abilities.
R&D at the Asahi Kasei Group
The strength of the Asahi Kasei Group is the ability to create
new businesses based on our wide range of technologies and
to manage diverse fields of operation. Throughout our history of
diversification, we have leveraged a wide variety of technologies
cultivated in chemicals operations to establish a number of core
technologies. Since our founding, we have constantly performed
R&D to meet the world’s needs and created new businesses based
on technology. While our business environment and the structure
of society are rapidly changing, we will continue to strive for the
creation of new value.
R&D organization
We reconfigured our R&D organization at the time of our transi-
tion to an operating holding company structure in April 2016
to enhance coordination among different departments within
the company. Under “Cs for Tomorrow 2018,” we are leveraging
our strengths in various technologies and diversified operations
from a 3-axis perspective of “foster and acquire core technology,”
“heighten added value,” and “utilize market channels” to accelerate
R&D, while enhancing external connections through CVC (corpo-
rate venture capital) and joint research to create new business.
Asahi Kasei Corporation
Corporate Research & Development
• Technology Policy Center
• CVC Office
• Corporate IP
• Analysis & Simulation Center
• R&D Center
• Healthcare R&D Center
• Synergistic Solution Initiative
• Yamashita Laboratory
• Chemistry & Chemical Process Laboratory
• Fibers & Textiles Technology Center
• Performance Polymers Technology Center
• Performance Materials Technology Center
Corporate Production Technology
• Maintenance Technology Center
• Engineering Center
• Production Technology Center
Clean Energy Project
UVC Project
Material
Homes
Health Care
Asahi Kasei
(operating function)
• Fibers & Textiles
• Petrochemicals
• Performance Polymers
• Performance Materials
• Consumables
• Separators
Asahi Kasei
Microdevices
• Research & Development
Center
Asahi Kasei Homes
• Technology Div.
• New Business
Development Dept.
• Housing R&D Center
• Lifestyle R&D Laboratory
Asahi Kasei
Construction Materials
• Products & Marketing
Development Dept.
• Materials Technology Dept.
Asahi Kasei Pharma
• Clinical Development Center
• Pharmaceutical Research Center
Asahi Kasei Medical
• Medical Products
Development Div.
ZOLL Medical
• R&D departments
34
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Asahi Kasei Report 2018
35
R&D and Human Resources
Main R&D bases around the world
With R&D bases located around the world, we are able to meet a
wide variety of needs in each market.
R&D sites overseas
Dormagen, Germany
Engineering Plastics
Technical Center
Europe R&D Center
Shanghai, China
Engineering Plastics Technical Center
Guangzhou, China
Engineering Plastics Technical Center
Waltham, Massachusetts
Asahi Kasei Pharma America
Chelmsford,
Massachusetts
ZOLL, CVC
Menlo Park,
California
CVC
Owensboro, Kentucky
Polypore
Vietnam
Computer Aided Engineering
(CAE)
Charlotte, North Carolina
Polypore
R&D sites in Japan
Core R&D sites
Kawasaki, Ohito, Fuji,
Moriyama, Mizushima,
Nobeoka, etc.
Albany,
New York
Crystal IS: UVC LED
R&D expenses
Each SBU performs R&D both to reinvigorate and enhance existing
businesses and to create new businesses for the future.
Critical Care
15.1%
Corporate expenses
18.1%
Annual R&D expenses
(¥ billion)
90
Breakdown of
R&D expenses
(FY2017)
¥85.7 billion
Fibers
3.4%
Chemicals
20.8%
Health Care
25.0%
Construction
Materials
1.2%
Homes 3.2%
Electronics 13.3%
36
Asahi Kasei Report 2018
85.7
81.1
79.6
75.5
71.1 71.1
66.3
’11
’12
’13
’14
’15
’16
’17
(FY)
80
70
60
0
Asahi Kasei Report 2018
37
Core technologies that support Asahi Kasei products
Compound semiconductor/LSI
● Application-specific IC ● Electronic compass
● IR sensor/gas sensor ● Magnetic sensor
Catalyst/process
● Cyclohexanol ● AN/MMA
● CreolexTM metallocene polyethylene
● SunfineTM ultrahigh molecular
weight polyethylene
Catalysis/
inorganic
synthesis
Compound
semicon-
ductors
Software
algorithms
Homes/construction materials
● Hebel HausTM unit homes
● Hebel MaisonTM apartment buildings
● HebelTM autoclaved aerated concrete
● Neoma FoamTM phenolic foam insulation
Foam
insulation
Polymers/processing
● Performance polymers:
LeonaTM, XyronTM, TenacTM, etc.
● Synthetic rubber:
TuftecTM/TufpreneTM, etc.
● SB latex/Dura-PhotoTM
● AsacleanTM
● Saran WrapTM cling film
● Photosensitive resins:
SunfortTM, PimelTM, APRTM/AFPTM
● NovacureTM latent hardener
Chemical
process
Polymer design/
polymerization/
processing
Core
Technologies
Anti-quake/
construction methods/
anti-fire/durability
Bio
pharmaceuticals
Functional
polymer
Polymeri-
zation/
spinning/
cellulose
Fibers
● Spunbond
nonwovens
● BemlieseTM
● LamousTM
● RoicaTM
● LeonaTM filament
● BembergTM
Biological
information
processing
Virus
removal/
blood puri-
fication
Health Care
● Prescription drugs: TeriboneTM, RecomodulinTM, etc.
● Acute critical care devices: AEDs, LifeVestTM, etc.
● Blood purification:
Artificial kidneys (APSTM),
therapeutic apheresis devices
● PlanovaTM virus removal filters
Phase
separation/
electro-
chemistry
Membranes/separation
● MicrozaTM
● Ion-exchange membranes
● HiporeTM
IP Strategy
To facilitate the creation of new businesses as an important man-
agement task in the Asahi Kasei Group, the management strategy,
IP strategy, and R&D strategy of each operation are integrated
as one. IP activities directly contribute to the management of
operations by acquiring IP rights from R&D results to gain business
advantage, enabling the creation of new businesses, and securing
the profitability of existing businesses.
The business units take the lead in formulating an IP strategy
that matches the characteristics of each operation. Emphasis is
placed on the quality of individual patents as well as the quantity
of patents. Strategic licensing is performed when it is deemed an
effective means to heighten the contribution of IP rights to our
own business operations.
Japanese Patent
Applications
3.4%
3.6%
5.6%
②
①
13.3%
③
6.6%
②
Total
887
①
37.2%
Overseas Patent
Applications
0.4%
0.0%
①
②
8.2%
Japanese Trademark
Applications
2.2%
5.5%
30.3%
8.7%
③
8.7%
②
Total
230*
22.1%
14.4%
②
10.5%
①
7.7%
②
③
0.0%
Total
181
0.0%
1.1%
①
3.2%
Overseas Trademark
Applications
14.9%
7.4%
②
③
Total
94
①
36.2%
①
51.9%
①
59.7%
②
37.2%
36
Asahi Kasei Report 2018
Asahi Kasei Report 2018
37
■ Holding company ■ Material (①: Chemicals ②: Fibers ③: Electronics) ■ Homes (①: Homes ②: Construction Materials) ■ Health Care (Pharmaceuticals, Medical Care)
(From January 1 to December 31, 2017)
* Overseas applications for a single patent family are counted as one.
R&D and Human Resources
Renewed Group Masters program
—Fostering highly specialized personnel—
In fiscal 2017, our Group Masters program was renewed for greater emphasis on creation of new businesses and
strengthening of established businesses. The new program aims to foster highly specialized personnel by providing
advanced training and enhanced status.
Substance of revision
The program was reclassified from three into five designations.
Before revision
After revision
Roles
Group Fellow
(status equivalent to
Managing Executive or
Senior Managing Executive)
Executive Fellow
(status equivalent to Executive Officer)
Person who newly developed or
considerably expanded a field of
technology
Principal Expert
(status equivalent to
Managing Executive or
Senior Managing Executive)
Person who takes the lead in a field of
technology
Senior Fellow
(status equivalent to Managing Executive,
Senior Managing Executive,
or Executive Officer)
Person whose term as Executive Fellow or
Principal Expert expires after retirement
age but who is expected to continue
the roles shown at right
1. Actively participating in
and contributing to new
business creation and
strengthening operations
by cultivating and
enhancing their skills and
abilities as a leading
specialist.
2. Fostering younger
personnel in the relevant
areas.
Senior Group Expert
Lead Expert
Person ranked below Principal Expert (candidate to be Principal Expert)
Group Expert
Expert
Person ranked below Lead Expert (candidate to be Lead Expert)
Actively participating in
and contributing to
new business creation and
strengthening operations
by cultivating and
enhancing their skills
and abilities.
While we had developed a system called Group Masters to
foster high-level specialists in a hierarchical structure with Group
Fellow as the highest rank, its function was not sufficiently effec-
tive. We therefore renewed the Group Masters system for greater
effectiveness to support the growth of operations while nurturing
specialist employees.
To achieve sustainable growth in a rapidly changing business
environment, the biggest key is human resources that can bring
success and growth globally. In fiscal 2017 we renewed our Group
Masters system for the first time in ten years, sharpening the
focus on development of highly specialized personnel who are
expected to be at the core of business expansion.
Global companies achieving high growth have many highly
specialized human resources in various fields, and fully utilize their
abilities for business development. In Japan, however, companies
tend to focus more on generalized ability, so even technical
personnel who could thrive as specialists often pursue a career in
managerial positions. This means their individual strengths may
not be fully utilized.
38
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Asahi Kasei Report 2018
39
Purpose
Placing greater emphasis on the participation and contribution of high-level specialists for the
creation of new businesses and strengthening of established businesses
Identification of
core technology fields
Core technology fields are designated as areas of sector-wide technologies to be reinforced,
and technological personnel leading each area are appointed as Group Masters.
We identified 11 domains as sector-wide core technology fields organized based on
sources of our group competitiveness for the achievement of business expansion and busi-
ness creation in five to ten years. These are accumulated core technologies, manufacturing
technologies, know-how, business platforms, various market channels, and business models.
The core technology fields are reviewed every year.
Core technology fields (starting with the Material sector in fiscal 2017)
1) Fibers
(polymerization, spinning, cellulose)
2) Membranes, separation
3) Electrochemistry (electrolysis, battery)
4) Polymers, processing
(polymer design, polymerization,
processing, performance polymers)
6) Compound semiconductors
7) Software, algorithms
8) Evaluation, analysis technology
(computer simulation, materials
informatics)
9) Process development, construction
technology
5) Catalysts, chemical processes
10) Product design, advanced control
(inorganic synthesis)
11) Equipment technology
Before revision
After revision
Specific technologies for each business
Specific technologies for each business
Specialist fields of technology for each business
Specialist fields of technology for each business
Core technology fields
Core technology fields for the whole sector
(starting with the Material sector in fiscal 2017—11 fields)
Application to
non-technical areas
Non-technical areas and job categories were identified for fostering specialist personnel, and
leaders in each area were appointed as Group Masters.
Succession planning
Programs to nurture successors to Group Masters in each area were developed, with linkage
between business promotion and human resources development.
Enhanced status
Rank and remuneration of Group Masters were enhanced in order to make the program more
appealing, and as an effective way to attract needed personnel from outside.
Transition period
The renewed program was applied to the Material sector (Asahi Kasei Corp. and Asahi Kasei
Microdevices Corp.) in fiscal 2017 prior to other sectors. It is being extended to the Homes and
Health Care sectors (Asahi Kasei Pharma Corp., Asahi Kasei Medical Co., Ltd., Asahi Kasei Homes
Corp., and Asahi Kasei Construction Materials Corp.) in fiscal 2018.
38
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39
Operating Segments
Material
Hideki Kobori
Executive Officer
for Material business sector
President & Representative Director,
Presidential Executive Officer,
Asahi Kasei Corp.
Main products
■ Bemberg™ cupro fiber
■ Roica™ premium stretch fiber
■ Spunbond nonwovens
■ Bemliese™ continuous-filament
cellulose nonwoven
■ Lamous™ microfiber suede
■ Leona™ nylon 66 filament
■ Acrylonitrile (AN)
■ Styrene
■ Polyethylene (PE)
■ 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
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 unrivaled technologies.
■ Sales composition
■ Operating income
Net sales & operating income
1,087.7
121.9
(¥ billion)
140
1,175.0
115.0
53.7%
composition
54.0%
Fiscal
2017
(¥ billion)
1,200
900
600
300
0
Not including “Others” category and
corporate expenses and eliminations.
'17
'18
forecast
Net sales (left scale)
Operating income (right scale)
105
70
35
0
(FY)
Highlights
GRS certification of Bemberg™ cupro fiber
With concern for sustainability rising around the world, we acquired Global Recycled
Standard (GRS*) certification for Bemberg™ cupro fiber in March 2017 (Certification No.
CU848689). A regenerated fiber being made from cotton linter, the short fibers on cotton
seeds, Bemberg™ is used in a wide range of applications from high-quality suit linings to
outerwear, innerwear, bedclothes, and sportswear. The GRS certification of Bemberg™
recognizes the sustainability of its manufacture from cotton linter, which is not conven-
tionally used as fiber, for 100% of its material, with strict control of chemical substances in
the production process and an established system of traceability. This is the second GRS
certification for our products, following that for Roica™ EF premium stretch fiber in 2016
(Certification No. CU839905 in Japan and CU831661 in Europe).
Cotton bolls and seeds covered in linter
* GRS is a certification that confirms the amount of recycled inputs and their traceability, issued by Textile Exchange,
a global non-profit organization focused on accelerating sustainable practices in the textile industry.
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41
Fibers and Textiles
◆ Performance in fiscal 2017 was firm, particularly for nonwovens, as sales increased and operating income
increased slightly
◆ Business will continue to expand by leveraging the investments made for growth
Lamous™ microfiber suede for automotive interiors led the
growth of shipments, and sales increased while operating income
increased slightly in fiscal 2017.
Sales growth continues for Bemberg™ cupro fiber as
material for ethnic garments in India and Pakistan, Bemliese™
continuous-filament cellulose nonwoven for facial masks, and
Leona™ nylon 66 filament for air bags. Increasing demand is
forecasted for each product, and global business expansion will
leverage the investments made for growth.
Chemicals
◆ Sales and operating income increased in fiscal 2017 with higher market prices for AN and firm performance
in high value-added businesses
◆ We will continue to expand operations in S-SBR for fuel-efficient tires and engineering plastics for vehicle
weight reduction as part of our focus on the automotive field
Chemicals posted increased sales and operating income in fiscal
2017 with higher market prices for acrylonitrile (AN) and other
petrochemicals, improved terms of trade for solution-polymerized
styrene-butadiene rubber (S-SBR), and firm sales of engineering
plastics.
In our expansion of high value-added businesses, emphasis is
placed on the automotive field including S-SBR for fuel-efficient
tires and engineering plastics to replace metal for vehicle weight
reduction. European marketing activities are being proactively
advanced through our subsidiary Asahi Kasei Europe.
Tire labeling requirements in various countries are bolstering
demand for S-SBR which enhances tire performance through our
unique polymer design technology. An expansion of capacity in
Singapore is scheduled for start-up in January 2019. We are also
strengthening our overseas compounding facilities and technical
centers for engineering plastics.
Electronics
◆ Sales and operating income increased with firm shipments of each product in fiscal 2017
◆ We are expanding capacity for LIB separators and developing new business for gas sensors
Shipments increased by a wide margin, particularly for lithium-ion
battery (LIB) separators, contributing to higher sales and operating
income for separators in fiscal 2017. Separator operations turned
profitable even after amortization of goodwill and other intangible
assets associated with our acquisition of Polypore International in
fiscal 2015. We will continue to expand capacity for LIB separators
to meet rapidly growing demand in automotive applications.
Sales and operating income for electronic devices increased
in fiscal 2017 with firm shipments of camera module devices and
of magnetic sensors for household appliances. We are developing
a new business for CO2 sensors with Senseair AB, a Swedish
manufacturer of gas sensor modules which we acquired in April
2018.
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Asahi Kasei Report 2018
Asahi Kasei Report 2018
41
Operating Segments
Homes
Fumitoshi Kawabata
Executive Officer
for Homes business sector
Senior Executive Officer, Asahi Kasei Corp.
President & Representative Director,
Asahi Kasei Homes Corp.
We set the stage for a rich and fulfilling lifestyle with our homes business that
provides high-quality products and services for Long Life Homes which earn high cus-
tomer satisfaction that lasts for more than half a century, and with our construction
materials business that provides innovative and original high value-added products.
■ Sales composition
■ Operating income
Net sales & operating income
31.7%
composition
28.5%
Fiscal
2017
(¥ billion)
800
600
400
200
0
641.0
64.4
657.0
65.5
'17
'18
forecast
(¥ billion)
100
75
50
25
0
(FY)
Not including “Others” category and
corporate expenses and eliminations.
Net sales (left scale)
Operating income (right scale)
Main products
Highlights
■ Hebel Haus™ unit homes
■ Hebel Maison™ apartment buildings
■ Atlas™ condominiums
■ Hebel Rooms™ apartment rental
network
■ Remodeling
■ Hebel™ AAC panels
■ Neoma Foam™ and Neoma Zeus™
phenolic foam insulation panels
■ Foundation systems
■ Structural systems and components
Mixed-use redevelopment at Kusatsu Station, Shiga, Japan
Asahi Kasei Realty & Residence Corp. held a ground-
breaking ceremony in October 2017 for an urban
redevelopment project at JR Kusatsu Station in Shiga,
Japan, as a member of the redevelopment consortium
for the Kitanakanishi and Sakae district.
This is the fourth project of large-scale redevelopment
for a safe and comfortable urban environment in the area
around Kusatsu Station. Focused on “creating a thriving
promenade,” we are constructing a multifunctional
complex that combines rich commercial facilities together
with residential units, including serviced apartments for
seniors as well as standard condominiums for sale.
Illustration
This project will play a key role in the revitalization of the city center by providing a
thriving and efficient setting for young families to live with comfort and convenience,
while enabling seniors to reside with security and peace of mind.
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43
Homes
◆ Sales grew with increased unit prices in fiscal 2017, but operating income was flat due to increased SG&A
expenses
◆ We will continue to provide high added value in order-built homes, expand the real estate and remodeling
businesses, and develop new businesses
In fiscal 2017, sales grew but operating income was flat. While unit
prices rose, especially for Hebel Maison™ apartment buildings,
SG&A expenses increased.
Although Japan has a declining birth rate and aging
population, demand for high-quality homes in urban markets is
unabated. We will continue to provide order-built homes with
high added value corresponding to customer needs. In May 2017
we adopted a new insulation system in all 2-story unit homes
which exceeds the performance standard for Net Zero Energy
House designated by the Japanese government.
As we expand the real estate and remodeling businesses, we
will also continue to develop new businesses such as medium-rise
buildings of 5–8 stories, apartments for seniors, and overseas
business through a capital alliance with McDonald Jones Homes
Pty Ltd of Australia.
Construction Materials
Hebel Maison™
◆ Sales increased with firm shipments of insulation material, but operating income decreased in fiscal 2017
with higher feedstock costs
◆ We will continue to expand business by providing high-performance insulation material that contributes to
saving energy in homes
Sales increased but operating income decreased in fiscal 2017.
Shipments of Neoma Foam™ phenolic foam insulation panels
were firm, but feedstock costs rose.
In January 2018 we launched Neoma Zeus™ featuring world-
leading insulation performance. We are developing non-housing
applications for the product in addition to the main application in
homes. As consciousness for saving energy continues to rise, we
will provide high-quality insulation material that meets customer
needs.
Neoma Zeus™
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Asahi Kasei Report 2018
Asahi Kasei Report 2018
43
Operating Segments
Health Care
Shuichi Sakamoto
Executive Officer
for Health Care business sector (joint)
Director, Senior Executive Officer,
Asahi Kasei Corp.
Chairman & Director,
Asahi Kasei Pharma Corp.
Chairman & 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
44
Asahi Kasei Report 2018
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 puri-
fication devices for chronic and acute renal failure, and various intractable diseases;
and products for the manufacturing process of biopharmaceuticals and other new
drugs. Our products in the field of acute critical care including AEDs, defibrillators for
professional use, and intravascular temperature management systems help to save
people’s lives.
■ Sales composition
■ Operating income
Net sales & operating income
14.6%
composition
17.5%
(¥ billion)
300
296.3
303.0
(¥ billion)
60
39.5
37.5
200
100
0
'17
'18
forecast
Net sales (left scale)
Operating income (right scale)
40
20
0
(FY)
Fiscal
2017
Not including “Others” category and
corporate expenses and eliminations.
Highlights
Approval to extend treatment duration for Teribone™ osteoporosis drug
In May 2017, Asahi Kasei Pharma obtained
approval for an extension of the maximum
duration of treatment for the osteoporosis drug
Teribone™ 56.5 μg subcutaneous injection
from 72 weeks to 24 months.
Sold in Japan since November 2011,
Teribone™ is used for the treatment of osteo-
porosis with high risk of fracture. Administered
once a week, it facilitates bone formation by
activating osteoblasts, which inhibits fracture through increased bone strength with both
improved bone quality and increased bone mass.
We believe that the extension of the maximum duration of treatment for Teribone™
will further enhance the treatment of osteoporosis.
Teribone™
Asahi Kasei Report 2018
45
Pharmaceuticals and Medical Care
◆ In fiscal 2017, although sales and operating income from pharmaceuticals decreased due to competition from
generics, sales and operating income from medical care increased with firm performance of each business
◆ Reinforcement of the global business platform and strengthening of domestic profitability will contribute to
growth of the Health Care sector
Shipments of Teribone™ osteoporosis drug increased but Flivas™
agent for treatment of benign prostatic hyperplasia in particular
was impacted by competition from generics, and sales and oper-
ating income from pharmaceuticals decreased. We are expanding
the pharmaceutical product lineup by launching Reclast™ for
osteoporosis and Kevzara™ for rheumatoid arthritis to enhance
profitability in the field of orthopedics in Japan.
For medical care, both sales and operating income increased
due to firm performance of each business and the weaker yen.
We will further expand sales of Planova™ virus removal filters and
continuously develop the dialysis business in China.
Pharmaceuticals
Medical care products
Acute Critical Care
◆ Sales and operating income in fiscal 2017 increased due to significant growth in shipments of defibrillators
for professional use
◆ High growth will be sustained through expansion of business for temperature management systems as well
as the mainstay LifeVest™ wearable defibrillator and defibrillators for professional use
Both sales and operating income from acute critical care grew
thanks to considerably increased shipments of defibrillators for
professional use and firm performance of the LifeVest™ business.
With a focus on the US, we will expand our market share in
defibrillators for professional use while gaining further market
penetration for LifeVest™. We will also advance clinical develop-
ment of the Thermogard System™ intravascular temperature
management system in the area of acute myocardial infarction.
Proactive expansion in acute critical care will drive the growth of
the Health Care sector as the third major pillar of the Asahi Kasei
Group after the Material and Homes sectors.
LifeVest™ wearable defibrillator
AED Plus™ automated
external defibrillator
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Asahi Kasei Report 2018
Asahi Kasei Report 2018
45
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
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
Area of focus
Key subjects under CT2018
Goals
Compliance
P. 31
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
P. 48
Acceleration of
Acceleration of
globalization
globalization
“Cs for Tomorrow 2018”
strategic management initiative
CSR in Action
CSR Fundamentals
Compliance, Responsible Care, Corporate Citizenship,
Respect for Employee Individuality
Respect for Employee
Individuality
P. 52
Corporate Citizenship
Group Mission
Contributing to life and living for people around the world
P. 54
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
• 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
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Asahi Kasei Report 2018
Asahi Kasei Report 2018
47
Our four CSR Fundamentals of Compliance,
Responsible Care, Corporate Citizenship, and
Respect for Employee Individuality are applied
throughout the Asahi Kasei Group.
CSR Fundamentals
Area of focus
Key subjects under CT2018
Goals
Compliance
Responsible Care
Respect for Employee
Individuality
Corporate Citizenship
P. 31
P. 48
P. 52
P. 54
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
• 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.
46
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Asahi Kasei Report 2018
47
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 the global environment; operational safety; workplace safety, hygiene, and
health; quality assurance (including product safety); managing chemical substances; and community outreach.
Message from the
Executive for RC
Masafumi Nakao
Representative Director, Vice-
Presidential Executive Officer
Asahi Kasei Corp.
Asahi Kasei adopted an operating holding company configuration in fiscal 2016 and started the
three-year medium-term management initiative “Cs for Tomorrow 2018” (CT2018). We are not only
implementing various measures to achieve our business targets and build the base for the next
phase towards fiscal 2025, but also contributing 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 upon. 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.
We give the utmost consideration to environmental protection, quality assurance, operational safety, work-
place 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 manage-
ment systems is obtained for the RC Management System of the
Asahi Kasei Group. We have obtained ISO 14001 environmental
management system certification for environmental protection and
ISO 9001 quality management system certification for product safety.
An Occupational Health and 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.
48
Asahi Kasei Report 2018
Asahi Kasei Report 2018
49
For more information, please refer to the Asahi Kasei Group website.
www.asahi-kasei.co.jp/asahi/en/csr
RC objectives and results
Review RC framework (including quality assurance)
FY2017 RC Objectives
FY2017 Results
Studied reorganization, studied reinforcement of human resources
Attainment
Enhance RC compliance
Provided guidance and support through audits and site inspections
★★★
★★★Complete ★★Satisfactory ★Unsatisfactory
FY2018 RC Objectives
Establish a culture of environmental, quality, and safety awareness:
· Nurture customs for compliance
· Advance measures for handover to the next generation
Confirmed progress in preventing abnormal reactions and
securing interlock functions
★★★
Ongoing confirmation of implementation at RC Audits, etc.
★★★ Control changes to equipment and operating conditions
Progressed on schedule
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RC training course continually reviewed
Group discussions enhanced
Follow-up until all members pass test
Strengthened communication and coordination with superiors
RC at affiliates enhanced through instructions and support
by core operating companies
RC reports of core operating companies and plant complex sites
were utilized in community outreach
No polluting accidents or serious incidents,
20 incidents (2 other than freon leaks)
Goal reached with final disposal rate of 0.2%
Goal reached with recycling rate of 99%
50% reduction from FY2005 level
LCA/CO2 contribution ratio of 11.7
Water resource contribution ratio of 9.3
Release of PRTR-specified substances and emission of VOCs
reduced by 92% and 87%, respectively, from FY2000 level
Moriyama Works won the JCIA RC Jury’s Special Award; Kotou Area
Biodiversity Network, including Shiga Plant of Asahi Kasei Jyuko Co.,
Ltd., and Moriyama Works, won the Shiga Biodiversity Award 2017
Implemented CSR procurement
No serious industrial accidents
Review performed at time of on-site confirmation
for preventing abnormal reactions
Further advance RC education and training
(gaining fuller understanding)
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 90%
Prevention of global warming:
· Reduce GHG emissions in Japan by 34.8% from FY2005 level
· LCA/CO2 contribution ratio1 of 8.5
Protect water resources:
· Water resource contribution ratio2 of 8.8
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 changes to equipment and operating conditions
Enhance earthquake response system:
· Review earthquake preparedness
(emergency facilities, disaster response supplies)
· Advance seismic retrofitting for specific and non-specific buildings
Monitor for items in need of replacement and uninspected items,
implement remediation
Retrofitting plan added for certain non-specific buildings due to
change of building use
Information shared with Corporate Production Technology;
ongoing review with new perspectives
—
—
No serious workplace injuries
0.28 (2.3 overseas)
0.005
No serious workplace injuries:
· Achieve frequency rate3 of 0.1 or less
· Achieve severity rate4 of 0.005 or less
Prevent all accidents in “caught in/between machinery” category:
· Perform sound risk assessment for mechanical equipment
· Thorough standards of behavior for safety
Avoid workplace injuries related to chemical substances:
· 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:
· Thorough standards of behavior for safety related to stairways and walking
· Program to prevent traffic accidents resulting in harm to self or others
while commuting or traveling for sales
Prevent serious injuries related to on-site contractors and equipment work: No serious injuries
· Improve the level of safety management guidance related to on-site
contractors and equipment work
Promote health maintenance and improvement among personnel:
Advanced risk assessment for mechanical equipment, but one
lost-workday injury in “caught in machinery” category in May 2018
Advanced risk assessment for chemical substances and
management of workplace environment
No lost-workday injury
· 7 lost-workday injuries due to falls related to stairways and walking
· 1 Injury due to traffic accidents resulting in harm to self or others
while commuting or traveling for sales
No injury in “caught in machinery” category
9 lost-workday injuries
· Promote the prevention of and countermeasures
to lifestyle-related diseases
· Company-wide measures for preventing falls
Promote countermeasures to mental health issues and
enhance support system:
· Implement company-wide stress survey, utilize its results,
and perform follow-up
Improve the health management system:
· Resolve critical tasks at each site with lateral extension
· Establish the health management system at affiliates and
independent plants
Enhance quality assurance:
· 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 JIPS5 activities
· Promote JAMP6 tools
Proportion of employees with health warning signs decreased
slightly, obesity increased slightly, and ratio of employees who
smoke unchanged
Physical fitness tests performed as part of fall prevention program,
follow-up implemented
Stress survey and follow-up implemented
Held internal interviews and provided instructions on health
management activities
Expanded scope of affiliates and independent plants supported by
specialist industrial physicians
No product safety incidents
Compliance maintained and system enhanced
Secretariat activities to promote JIPS; continued risk assessment
and public disclosure of safety documents
Provided and received information via MSDSplus and AIS,
transitioned to new JAMP scheme chemSHERPA
n
i
g
n
i
v
i
L
d
n
a
h
t
l
a
e
h
t Number of people our health care business contributed to:
r
o
f
m
o
c
· Maintain FY2015 level
Number of residents in Hebel Haus™ homes:
· 10% increase from FY2015 level
7% decrease from FY2015 level
2.9% increase from FY2015 level
★★
Enhance foundations for safety
★★★ Establish activities for compliance
★★★ Promote global-oriented RC
★
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 FY2020 GHG emissions in Japan by 35% from FY2005 level
Achieve LCA/CO2 contribution ratio of 11.3
★★★ Protect water resources:
★★★
· Water resource contribution ratio of 9.3
Control emissions of chemical substances:
· Control emissions of PRTR-specified substances
· Control emissions of air and water pollutants
★★★ Promote “Town Woods” program and actions for 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
★★★
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
Maintain zero serious logistic incidents
No serious workplace injuries:
· Achieve frequency rate of 0.1 or less (1.0 or less overseas)
· Achieve severity rate of 0.005 or less
Prevent all accidents in “caught in/between machinery” category:
· Perform sound risk assessment for mechanical equipment
· Thorough standards of behavior for safety
Avoid workplace injuries related to chemical substances:
· 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:
· Thorough standards of behavior for safety related to stairways and walking
· Program to prevent traffic accidents resulting in harm to self or others
while commuting or traveling for sales
Prevent serious injuries related to on-site contractors and equipment work:
· Improve the level of safety management guidance related to on-site
contractors and equipment work
Promote health maintenance and improvement among personnel:
· Promote the prevention of and countermeasures to
lifestyle-related diseases
· Reduce the rate of absence due to illness or injury
· Reduce the rate of lifestyle-related diseases
Enhance mental health support system:
· Reduce the rate of absence due to mental health
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:
· Maintain FY2015 level
Number of residents in Hebel Haus™ homes:
· 10% increase from FY2015 level
48
Asahi Kasei Report 2018
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 2018
49
Responsible Care
The global environment
As stated in our Group Vision of “harmony with the natural environment,” we consider environmental preservation to be one of our
most important tasks. Our major focuses are on 1) measures for climate change, 2) preservation of biodiversity, and 3) promotion
of a recycling-oriented society. Regarding measures for climate change, we are currently formulating new targets for 2030 building
on our previously established targets for 2020. We make efforts to reduce the impact of our business activities on biodiversity and
launched a new group-wide program called “Town Woods.” To contribute to the establishment of a recycling-oriented society, we
continue to reduce final disposal of industrial waste as well as increase the rate of resource recycling. As a chemical company, we are
also working to promote safe handling of chemical substances and actively provide the related information.
Highlights
Climate-change and water-conservation efforts ranked “A–” by CDP
Our efforts with respect to climate change and water conservation
were given an evaluation of “A–” by the CDP* in fiscal 2017.
* Formerly the Carbon Disclosure Project, CDP is an NPO based in the UK which
researches and evaluates how companies and cities are working to address
environmental issues related to climate change, water, forests, etc., and provides
the information and results to investors. It began as a project to disclose companies’
environmental strategy and performance in response to demand from institutional
investors. The CDP is now one of the most trusted evaluation organizations among
investors. It issues evaluations on an 8-rank scale of A, A–, B, B–, C, C–, D, and D–.
Operational safety
Launch of the “Town Woods” program
Planting modules called “Town Woods Pots” are being used to
enhance green spaces at operating sites across the Asahi Kasei Group.
This program contributes to biodiversity preservation while heighten-
ing understanding and awareness of the value of biodiversity among
personnel.
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 abnormal
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. As
with the previous year, there were no serious operational accidents
inside or outside Japan during fiscal 2017.
Workplace safety, hygiene, and health
The effort to prevent workplace accidents is integrated in a com-
prehensive OHSMS* program that combines conventional safety
initiatives—such as tidiness/orderliness/cleanliness, reporting of
near-accidents and potential hazards, hazard prediction analysis,
safety patrols, and case studies—with risk assessments and a
prevention-oriented plan-do-check-act (PDCA) system.
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.
Occurrence of workplace injuries
Incidence of
lost-workday injury
by event category,
FY2017 in Japan
Total 15 cases
Incidence of
lost-workday injury
by event category,
FY2007–2016 in Japan
Total 123 cases
Fall on same level..................................53%
Traffic accident........................................27%
Caught in/between machinery.......6%
Fall from height .........................................7%
Kickback/overexertion...........................7%
Traffic accident........................................23%
Fall on same level..................................22%
Kickback/overexertion........................12%
Caught in/between machinery....11%
Fall from height ......................................10%
Contact with high temperature
substance/object......................................6%
Caught in something else...................4%
Hit by flying/falling object ..................2%
Contact with harmful substance ....2%
Collision..........................................................2%
Others ..............................................................6%
50
Asahi Kasei Report 2018
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51
For more information, please refer to the Asahi Kasei Group website.
www.asahi-ksaei.co.jp/asahi/en/csr
Health maintenance
The Asahi Kasei Group implements various activities to help employ-
ees maintain and advance their mental and physical well-being in
accordance with its health management guidelines, including screen-
ing for lifestyle-related diseases and mental health checkups.
Intranet-based electronic diagnosis to survey workplace stress
Based on an electronic survey of workplace stress performed since
fiscal 2012, industrial medical staff follow-up on individual employees
and each department analyzes survey results to improve the
workplace environment.
Quality assurance
Upon our transition to an operating holding company configuration in April 2016, we established a new Asahi Kasei Group Quality
Policy and Group Quality Assurance Bylaws. At the same time, Corporate ESH & QA was reorganized, including the establishment of
a new Quality Assurance Group to coordinate the reinforcement of quality assurance activities throughout the Asahi Kasei Group,
ensuring the provision of safe and reliable products to our customers. In addition to its role as the central hub for the provision
and sharing of QA-related information throughout all operations, the Quality Assurance Group holds QA Forums with lectures by
eminent professors in the field of quality control to augment the training of QA personnel. In fiscal 2017, 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 sup-
port. 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.
Managing chemical substances
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 of strategic business units
and core operating companies to perform. The bylaws define the
central role of quality assurance managers in activities to enhance
quality assurance, and are applied in concert with our product safety
guidelines. All business units of the Asahi Kasei Group apply these
uniform bylaws and guidelines to assure the quality of products and
services.
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 sub-
stances begins with R&D, which is guided throughout every stage by
a commitment to developing products and processes 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 development of
systems to manage chemical substance information as well as revision
of the list of applicable substances. In fiscal 2017 we continued to
convey relevant information throughout the supply chain to help
establish JAMP as a widely used tool.
Since fiscal 2016, we have used a tool for information transmission
compatible with chemSHERPA, a scheme by the Ministry of Economy,
Trade and Industry. We are working to smoothly transition from JAMP
to chemSHERPA during the two-year period starting in fiscal 2016.
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.
50
Asahi Kasei Report 2018
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51
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 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 fulfill-
ing 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 at key career stages beginning with hiring
and extending through promotion to managerial positions. Other
individual training programs such as for global management are
implemented according to business need. Each core operating com-
pany 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 rec-
ognize employees who have developed and exercised extraordinary
expertise and skills that hold universal value, and to facilitate their
application throughout the Group. As of April 2018, 122 Group
Masters are designated, those whose rank and remuneration are
commensurate with Senior General Manager, General Manager, and
Valuing human rights and diversity
Basic policy
Human Resources leads the effort to ensure that there will be no
discrimination 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.
To prevent any harassment or discrimination, we implement
training on corporate ethics to employees at each level—new hires,
assistant managers, and managers. Ethics training is also implemented
by business unit and by geographical area.
Section Manager, respectively number 10, 46, and 66.
To accelerate the creation of new businesses as a basic strategy
of the “Cs for Tomorrow 2018” management initiative, we revised the
system in fiscal 2017 for greater emphasis on the development and
growth of engineers and technical personnel. The program is focused
on reinforcing the specialized technical abilities of such personnel
who will drive the creation of new businesses and the enhancement
of established businesses.
Development of global human resources
To accelerate the expansion of world-leading businesses in
accordance with the medium-term management initiative “Cs for
Tomorrow 2018” 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 philoso-
phy, intercultural communication, and management training.
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 capable personnel who
will successfully execute our strategy on a global scale.
We continue to hire university graduates of foreign nationality
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 briefing sessions and student
internships, as part of an ongoing effort to attract talent.
In April 2018, 418 new graduates were hired: 325 men and 93
women. In addition, 153 persons were hired in mid-career between
April 2017 and March 2018.
52
Asahi Kasei Report 2018
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53
For more information, please refer to the Asahi Kasei Group website.
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 proac-
tively 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 575 in June 2018. To support female personnel in their careers, we
provide a mentoring program, hold seminars on returning to work
after maternity leave, and publish diversity-related articles in our
internal magazine.
Number of women as managers*
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 2.13% (543.5 persons) as of June 1, 2018.
We continue recruitment activities to increase the employment of
persons with disabilities at Group companies other than Asahi Kasei
Ability.
410
454
600
500
400
300
200
100
0
500
534
575
Rate of employment of persons with disabilities
at applicable Group companies*
2.19
2.12
2.13
2.08
2.05
(%)
2.2
2.1
2.0
1.9
’14/6
’15/6
’16/6
’17/6
’18/6
’14/6
’15/6
’16/6
’17/6
’18/6
* 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., and Asahi Kasei E-materials Corp. are
included through June 2015).
* Results as of June 1 each year at applicable Group companies. Calculation based on
total employment of 25,463.5 persons in the 21 applicable companies. As of June 1,
2018, the number of persons with disabilities employed by Asahi Kasei Ability Corp.
stood at 351.5 of the total 543.5 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 2017, parental leave was utilized
by 566 personnel. This included 330 men, 42% of those who were
qualified, and 236 women.
Employees using parental leave*
Women
Men
316
316
330
235 233
226 231
240
266
236
330
220
110
0
’13
’14
’15
’16
’17
(FY)
* 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 through June 2015).
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 concurrently with a “flex-time” system for
flexible working hours.
Leave to accompany spouse overseas
As globalization continues to advance, an increasing number of per-
sonnel 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 2017,
20 personnel utilized this provision.
Platinum Kurumin certification mark
In 2016, we received the Platinum Kurumin
certification mark from the Ministry of Health,
Labor 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
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.
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53
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 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.
we held a briefing on the Material sector as well as individual meet-
ings. In addition, 70 meetings were held overseas. We also provide a
wide variety of information for investors on our website.
IR meetings with institutional investors and
securities analysts
In fiscal 2017, Investor Relations (IR) held 191 meetings with institu-
tional investors and securities analysts in Japan, including quarterly
results briefings and an annual management briefing with the
President. To deepen understanding of Asahi Kasei among investors,
Seminars for individual investors
To provide individual investors with a better understanding of the
operations of the Asahi Kasei Group, two seminars were held in fiscal
2017. We will continue to provide accurate and timely information to
individual investors through direct communications, the corporate
website, and articles published in magazines for individual investors.
54
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55
For more information, please refer to the Asahi Kasei Group website.
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 suppli-
ers 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 associations. 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 community 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 contribution activities
into monetary value by a method set forth in its annual Survey of
Expenditure for Corporate Philanthropic Activities. In fiscal 2016, this
was ¥3,953 million.
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, with a total of 2,058 students
of 61 schools participating in fiscal 2017. In August 2017, 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 the National Museum of Emerging Science and
Innovation (Miraikan).
Coexistence with the Environment
We participate in afforestation projects in Japan, exhibit at
environmental-related events, and work to raise understanding of
environmental issues.
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.
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55
56
Asahi Kasei Report 2018
Financial Section
Contents
58 Management’s Discussion and Analysis
64 Risk Analysis
66 Consolidated Financial Statements
66 Consolidated Balance Sheets
68 Consolidated Statements of Income
69 Consolidated Statements of Comprehensive Income
70 Consolidated Statements of Changes in Net Assets
71 Consolidated Statements of Cash Flows
72 Notes to Consolidated Financial Statements
72 1. Major policies for preparing the consolidated financial statements
72 2. Significant accounting policies
73 3. Changes in significant accounting policies
74 4. Notes to Consolidated Balance Sheets
75 5. Notes to Consolidated Statements of Income
77 6. Notes to Consolidated Statements of Comprehensive Income
77 7. Notes to Consolidated Statements of Changes in Net Assets
79 8. Notes to Consolidated Statements of Cash Flows
79 9. Leases
80 10. Financial instruments
83 11. Marketable securities and investment securities
84 12. Derivative financial instruments
87 13. Provision for retirement benefits
89 14. Taxes
90 15. Asset retirement obligations
91 16. Business segment information
94 17. Information on related parties
94 18. Per share information
95 19. Subsequent events
95 20. Borrowings
96 21. Supplementary schedule of asset retirement obligations
96 22. Others
97 Independent Auditor’s Report
Asahi Kasei Report 2018
57
Management’s Discussion and Analysis
Fiscal year 2017 (April 1, 2017 – March 31, 2018)
Operating Environment
The global economy was generally favorable during fiscal
2017, although there were concerns of risks related to the US
Trump administration’s trade policy and the North Korean situ-
ation. Gradual recovery of the Japanese economy continued,
supported by export growth, recovering capital investment,
and firm consumer spending.
Overview of Consolidated Results
Net sales, operating income
Consolidated net sales for the fiscal year increased by ¥159.2
billion from a year ago to ¥2,042.2 billion. Overseas sales
increased by ¥111.3 billion to ¥767.7 billion, largely in the
Material segment, and increased by 2.7 percentage points as
a portion of consolidated net sales to 37.6%. Domestic sales
increased by ¥47.9 billion to ¥1,274.5 billion, largely in the
Material and Homes segments.
Operating income increased by ¥39.2 billion to ¥198.5
billion. As a percentage of net sales, cost of sales decreased
by 0.6 percentage points to 68.2%. Selling, general and
administrative (SG&A) expenses increased by ¥23.1 billion, but
decreased as a portion of net sales by 0.6 percentage points to
22.1%. Operating margin increased by 1.3 percentage points
to 9.7%.
Non-operating income and expenses, ordinary income
Net non-operating income was ¥14.1 billion, a ¥12.7 billion
increase from the ¥1.4 billion of a year earlier, with a notable
increase in equity in earnings of affiliates. Ordinary income
increased by ¥51.9 billion to ¥212.5 billion.
Extraordinary income and loss
The net extraordinary income of ¥5.8 billion was a ¥9.0 billion
improvement from the net extraordinary loss of ¥3.2 billion a
year earlier. Extraordinary loss of ¥9.9 billion included ¥1.5 bil-
lion in business structure improvement expenses, a ¥6.3 billion
loss on disposal of noncurrent assets, and a ¥2.2 impairment
loss. Extraordinary income of ¥15.7 billion included a ¥15.2
billion gain on sales of investment securities.
Net income attributable to owners of the parent
With ordinary income of ¥212.5 billion and net extraordinary
income of ¥5.8 billion, income before income taxes was ¥218.3
billion. Income tax expense was ¥46.1 billion (current income
taxes of ¥63.2 billion less deferred income taxes of ¥17.1 bil-
lion). Net income attributable to non-controlling interests was
¥1.9 billion. As a result, net income attributable to owners of
the parent increased by ¥55.2 billion to ¥170.2 billion, and net
income per share increased by ¥39.59 to ¥121.93.
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)
2,500
(%)
50
(¥ billion)
200
(%)
20
(¥ billion)
500
(%)
50
(¥ billion)
200
2,000
1,500
1,000
500
0
’13
’14
’15
’16
’17
Net sales (left scale)
Overseas sales ratio (right scale)
58
Asahi Kasei Report 2018
40
30
20
10
0
(FY)
150
100
50
0
’13
’14
’15
’16
’17
Operating income (left scale)
Operating margin (right scale)
400
300
200
100
0
15
10
5
0
(FY)
’13
’14
’15
’16
’17
SG&A (left scale)
SG&A ratio (right scale)
40
30
20
10
0
(FY)
150
100
50
0
’13
’14
’15
’16
’17
(¥)
200
150
100
50
0
(FY)
Net income attributable to owners of
the parent (left scale)
Net income per share (right scale)
Asahi Kasei Report 2018
59
Results by Operating Segment
The Asahi Kasei Group’s operations are described by major
business classification: three reportable segments of Material,
Homes, and Health Care, together with an “Others” category.
Beginning with the first quarter of fiscal 2017, the Energy
Division, which was formerly included in Others, is reclassified
into the Material segment. The figures for the year-ago period
have been recalculated in accordance with the new classifica-
tion for comparison purposes.
Material
Sales increased by ¥109.8 billion from a year ago to ¥1,087.7
billion, and operating income increased by ¥33.4 billion from a
year ago to ¥121.9 billion.
Although fibers & textiles operations were impacted
by higher feedstock costs, sales increased and operating
income slightly increased with firm performance centered on
Lamous™ microfiber suede for automotive interiors.
Among chemical operations, in petrochemicals, sales and
operating income increased with improved market prices
for acrylonitrile. Sales and operating income in performance
polymers increased with improved terms of trade for synthetic
rubber for fuel-efficient tires and greater shipments of
engineering plastics for automotive parts. Sales and operating
income in performance materials and consumables increased
with greater shipments of ion-exchange membranes and
electronic materials, and firm sales of Saran Wrap™ cling film.
Among electronics operations, sales and operating income
in separators grew with considerably increased shipments of
each battery separator product, centered on Li-ion battery
separator. Sales and operating income in electronic devices
increased with firm sales of camera module devices for
smartphones and magnetic sensors for household appliances.
Homes
Sales increased by ¥22.0 billion from a year ago to ¥641.0
billion, and operating income increased by ¥0.3 billion from a
year ago to ¥64.4 billion.
Sales grew but operating income was flat in homes opera-
tions as unit prices increased centered on Hebel Maison™
apartment buildings, while labor costs and advertising
expenses increased. Although the value of orders for unit
homes decreased, the overall value of orders for order-built
homes increased by 1.2% with growing orders for apartment
buildings. Sales and operating income in real estate, remodel-
ing, and other operations increased with firm performance
of rental management in real estate, and performance in
remodeling on par with the previous year.
Sales increased but operating income decreased in con-
struction materials operations as shipments of Neoma Foam™
phenolic foam insulation panels were firm, while higher
feedstock costs had an impact.
Fibers Business
Operating Income Increases/Decreases
Chemicals Business
Operating Income Increases/Decreases
Electronics Business
Operating Income Increases/Decreases
Sales
prices1
+1.4
Foreign
exchange2
+0.2
Sales
volume
+2.7
12.1
Operating
costs and
others
–3.8
11.7
(¥ billion)
20
15
10
5
0
Foreign
exchange2
+7.6
Sales
prices1
+47.4
Sales volume
+8.7
74.4
100.1
Operating
costs and
others
–37.9
(¥ billion)
150
120
90
60
30
0
(¥ billion)
10
9.7
Sales
volume
+4.9
Sales
prices1
–4.0
Operating
costs and
others
+4.8
Foreign
exchange2
+1.5
2.5
8
6
4
2
0
’16
’17
(FY)
’16
’17
(FY)
’16
’17
(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
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
58
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59
Management’s Discussion and Analysis
Health Care
Sales increased by ¥26.1 billion from a year ago to ¥296.3
billion, and operating income increased by ¥7.5 billion from a
year ago to ¥39.5 billion.
Shipments of Teribone™ osteoporosis drug increased, but
sales and operating income in pharmaceutical operations
decreased with lower shipments centering on Flivas™ agent
for treatment of benign prostatic hyperplasia due to competi-
tion from generics.
Sales and operating income in medical devices operations
increased with an effect of the weaker yen and firm perfor-
mance of each business.
Sales and operating income in critical care operations
grew with considerably increased shipments of defibrillators
for professional use and firm performance of the LifeVest™
wearable defibrillator business.
Others
Sales increased by ¥1.2 billion from a year ago to ¥17.3 billion,
and operating income decreased by ¥0.1 billion from a year
ago to ¥1.9 billion.
Homes Business
Operating Income Increases/Decreases
Construction Materials Business
Operating Income Increases/Decreases
Health Care Business
Operating Income Increases/Decreases
(¥ billion)
80
60
59.5
Sales
prices
+2.3
Operating
costs and
others
–4.2
Sales
volume
+2.6
40
20
0
(¥ billion)
6.0
Sales volume
+1.5
(¥ billion)
20
(¥ billion)
20
19.7
Sales
volume
–0.5
Sales
prices1
+0.5
Foreign
exchange2
+0.1
17.1
Operating
costs and
others
+2.4
60.2
4.5
4.5
3.0
1.5
0
Sales
prices
–0.2
4.0
Operating
costs and
others
–1.8
15
10
5
0
15
10
5
0
’16
’17
(FY)
’16
’17
(FY)
’16
’17
(FY)
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
60
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61
Noncurrent liabilities decreased by ¥69.7 billion to ¥421.8
billion with a ¥49.4 billion decrease in long-term loans pay-
able and a ¥14.1 billion decrease in deferred tax liabilities.
Interest-bearing debt decreased by ¥101.1 billion to
¥301.7 billion.
Net assets increased by ¥137.1 billion from ¥1,168.1 billion
to ¥1,305.2 billion. While dividend payments were ¥39.1
billion, net income attributable to owners of the parent was
¥170.2 billion.
As a result, net worth per share increased by ¥97.75 to
¥922.11, net worth to total assets increased from 51.1% to
55.6%, and debt-to-equity ratio decreased by 0.12 points
to 0.23.
Liquidity and Capital Resources
Financial position
Total assets at fiscal year end were ¥2,316.1 billion, ¥61.6 billion
higher than a year earlier, with cash and deposits, and notes
and accounts receivable–trade, increasing as an effect of
growing sales and the closing date falling on a weekend.
Current assets increased by ¥64.4 billion to ¥959.0 billion,
mainly as notes and accounts receivable–trade increased by
¥38.6 billion and inventories increased by ¥13.0 billion.
Noncurrent assets decreased by ¥2.8 billion to ¥1,357.2
billion, notably with a ¥48.2 billion decrease in intangible
assets while there was a ¥30.7 billion increase in investment
securities.
Current liabilities decreased by ¥5.7 billion to ¥589.1 billion,
mainly with a ¥36.0 billion decrease in commercial paper and a
¥20.0 billion decrease in the current portion of bonds payable,
while there was a ¥23.9 billion increase in notes and accounts
payable–trade and a ¥13.5 billion increase in income taxes
payable.
Critical Care Business
Operating Income Increases/Decreases
Others
Operating Income Increases/Decreases
Total Assets, Net Worth
1.9
Sales
volume
–0.1
Operating
costs and
others
0
(¥ billion)
30
25
20
15
10
5
0
14.8
Foreign
exchange2
+1.2
Sales
volume
+11.2
Sales
prices1
+0.1
(¥ billion)
2.0
2.0
19.8
Operating
costs and
others
–7.5
1.5
1.0
0.5
0
(¥ billion)
2,500
2,000
1,500
1,000
500
0
’16
’17
(FY)
’16
’17
(FY)
’13
’14
’15
’16
’17
(FY)
1 Excluding impact of foreign exchange
2 Impact of foreign exchange on sales prices
Total assets
Net worth
60
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61
Management’s Discussion and Analysis
Capital expenditure
Capital expenditure (capex) was primarily focused on 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.
The following table of capex by operating segment shows
totals of property, plant and equipment and intangible assets
(other than goodwill), excluding consumption tax.
Totals for the year
(¥ million)
Compared to
previous year (%)
Material
Homes
Health Care
Others
Combined
Corporate assets and
eliminations
59,814
18,431
12,186
1,226
91,657
9,673
Consolidated
101,331
113.2
151.8
78.1
103.4
112.1
110.1
111.9
Note: Beginning with the first quarter of fiscal 2017, the Energy Division, which was
formerly included in Others, is reclassified into the Material segment. The
figures for the year-ago period have been recalculated in accordance with the
new classification for comparison purposes.
A total of ¥101.3 billion was invested during the fiscal year
for the expansion of businesses with competitive superiority,
particularly in the Material segment, as well as for modification
and rationalization.
Notable capex by operating segment was as follows.
Material
Expansion of production capacity for
Hipore™ lithium-ion battery separator,
expansion of production capacity
for synthetic rubber for fuel-efficient
tires, rationalization, labor-saving, and
maintenance.
Homes
Health Care
Others
Corporate assets
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
’13
’14
’15
’16
’17
(FY)
’13
’14
’15
’16
’17
1.0
0.8
0.6
0.4
0.2
0
(FY)
(¥ billion)
120
90
60
30
0
’13
’14
’15
’16
’17
(FY)
Interest-bearing debt (left scale)
D/E ratio (right scale)
Capex
Depreciation and amortization
62
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63
Cash flows
Free cash flows (net cash provided by operating activities less
net cash used in investing activities) were a positive ¥139.6 bil-
lion, as cash provided, principally from income before income
taxes and from depreciation and amortization, exceeded
cash used, principally for purchase of property, plant and
equipment, and for payment of income taxes. Cash flows from
financing activities were a net ¥134.4 billion used, including
for cash dividends paid. As a result, cash and cash equivalents
at fiscal year end were ¥148.6 billion, ¥4.5 billion higher than a
year earlier.
Cash flows from operating activities
Cash used included ¥49.5 billion for income taxes paid and a
¥39.0 increase in notes and accounts receivable–trade. Income
before income taxes provided ¥218.3 billion, and depreciation
and amortization provided ¥95.4 billion. Net cash provided by
operating activities was ¥249.9 billion, ¥80.9 billion higher than
a year earlier.
Cash flows from investing activities
Cash provided included ¥30.6 billion from collection of loans
receivable and ¥17.8 billion in proceeds from sales of invest-
ment securities. Cash used included ¥82.9 billion for purchase
of property, plant and equipment, ¥45.3 billion in payments of
loans receivable, ¥13.4 billion for purchase of intangible assets,
and ¥11.6 billion for purchase of investment securities. Net
cash used in investing activities was ¥110.3 billion, ¥20.4 billion
higher than a year earlier.
Cash flows from financing activities
Cash provided included ¥15.4 billion in proceeds from long-
term loans payable. Cash used included ¥39.1 billion in cash
dividends paid, a ¥36.0 billion decrease in commercial paper, a
¥28.9 billion decrease in short-term loans payable, ¥23.5 billion
for repayment of long-term loans payable, and ¥20.0 billion for
redemption of bonds. Net cash used in financing activities was
¥134.4 billion, ¥60.5 billion higher than a year earlier.
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)
200
100
0
(100)
(200)
(300)
’13
’14
’15
’16
’17
(FY)
’13
’14
’15
’16
’17
(FY)
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
62
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63
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 27, 2018, 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.
64
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65
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.
64
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65
Consolidated Financial Statements
Consolidated Balance Sheets
Asahi Kasei Corporation and Consolidated Subsidiaries
March 31, 2018 and 2017
ASSETS
Current assets:
Cash and deposits (Notes 8 and 10)
Notes and accounts receivable—trade
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 (Notes 4 (b), (d))
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles (Notes 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
Other
Subtotal
Investments and other assets:
Investment securities (Notes 4 (a), (b), 10 and 11)
Long-term loans receivable (Note 10)
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.
66
Asahi Kasei Report 2018
Millions of yen
Thousands of
U.S. dollars (Note 1)
2018
2017
2018
¥ 156,318
¥ 145,289
$ 1,471,228
341,396
169,948
109,486
80,253
20,032
83,956
(2,411)
958,978
517,562
(285,760)
231,802
1,399,081
(1,200,504)
198,577
62,938
11,698
(10,901)
798
50,502
153,002
(135,571)
17,431
562,048
252,724
161,898
414,621
314,830
27,793
6,727
31,406
(266)
380,489
1,357,158
302,751
159,395
116,481
70,806
20,279
81,816
(2,272)
894,545
508,713
(278,122)
230,590
1,376,029
(1,176,686)
199,343
62,391
12,367
(11,381)
986
45,958
150,073
(132,460)
17,613
556,881
285,622
177,149
462,772
284,137
18,918
9,309
28,154
(215)
340,302
1,359,955
3,213,139
1,599,511
1,030,456
755,322
188,536
790,174
(22,692)
9,025,675
4,871,172
(2,689,506)
2,181,666
13,167,821
(11,298,861)
1,868,960
592,358
110,099
(102,598)
7,511
475,313
1,440,019
(1,275,962)
164,056
5,289,864
2,378,579
1,523,746
3,902,315
2,963,106
261,581
63,313
295,586
(2,504)
3,581,073
12,773,252
¥ 2,316,137
¥ 2,254,500
$ 21,798,936
Asahi Kasei Report 2018
67
LIABILITIES AND NET ASSETS
Liabilities:
Current liabilities:
Notes and accounts payable—trade (Note 10)
Short-term loans payable (Notes 4 (b), 10 and 20)
Commercial paper (Notes 10 and 20)
Current portion of bonds payable (Notes 10 and 20)
Lease obligations (Notes 9, 10 and 20)
Accrued expenses
Income taxes payable (Note 10)
Advances received
Provision for grant of shares
Provision for periodic repairs
Provision for product warranties
Provision for removal cost of property, plant and equipment
Asset retirement obligations (Note 15)
Other
Total current liabilities
Noncurrent liabilities:
Bonds payable (Notes 10 and 20)
Long-term loans payable (Notes 4 (b), 10 and 20)
Lease obligations (Notes 9, 10 and 20)
Deferred tax liabilities (Note 14)
Provision for grant of shares
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 15)
Long-term guarantee deposits (Note 10)
Other
Total noncurrent liabilities
Total liabilities
Net assets:
Shareholders’ equity:
Capital stock
Authorized—4,000,000,000 shares
Issued and outstanding—1,402,616,332 shares
Capital surplus
Retained earnings (Note 7 (b) (ii))
Treasury stock
(2018—6,491,617 shares, 2017—5,958,904 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)
2018
2017
2018
¥ 171,413
118,018
20,000
—
199
105,787
29,714
70,142
28
3,185
2,730
2,425
557
64,948
589,146
20,000
143,176
352
45,622
172
3,263
2,699
—
170,634
3,282
20,658
11,917
421,776
1,010,922
¥ 147,543
113,475
56,000
20,000
305
100,419
16,202
72,882
—
5,003
2,461
1,800
572
58,217
594,880
20,000
192,584
467
59,759
—
165
4,390
2,162
178,368
3,436
20,479
9,695
491,506
1,086,385
$ 1,613,299
1,110,758
188,235
—
1,873
995,642
279,661
660,160
264
29,976
25,694
22,824
5,242
611,275
5,544,904
188,235
1,347,539
3,313
429,384
1,619
30,711
25,402
—
1,605,967
30,889
194,428
112,160
3,969,656
9,514,560
103,389
79,440
981,934
(3,930)
103,389
79,443
850,532
(3,242)
973,073
747,671
9,241,732
(36,988)
1,160,833
1,030,122
10,925,487
121,128
92
28,676
(23,343)
126,553
17,827
1,305,214
113,475
55
40,831
(33,140)
121,222
16,771
1,168,115
1,140,028
866
269,892
(219,699)
1,191,087
167,784
12,284,367
¥2,316,137
¥2,254,500
$21,798,936
66
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67
Consolidated Statements of Income
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2017
Net sales (Note 16)
Cost of sales (Note 5 (b))
Gross profit
Selling, general and administrative expenses (Note 5 (a))
Operating income (Note 16)
Non-operating income:
Interest income
Dividends income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses:
Interest expense
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income:
Gain on sales of investment securities
Gain on sales of noncurrent assets (Note 5 (c))
Total extraordinary income
Extraordinary loss:
Loss on valuation of investment securities
Loss on disposal of noncurrent assets (Note 5 (d))
Impairment loss (Note 5 (e))
Business structure improvement expenses (Notes 5 (e), (f ))
Business integration expense
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.
Millions of yen
2018
¥2,042,216
1,393,111
649,105
450,630
198,475
2017
¥1,882,991
1,296,255
586,736
427,506
159,229
Thousands of
U.S. dollars (Note 1)
2018
$19,220,856
13,111,633
6,109,224
4,241,224
1,868,000
2,078
6,626
13,137
5,961
27,802
4,594
2,971
6,169
13,733
212,544
15,164
534
15,698
31
6,261
2,158
1,460
—
9,908
218,333
63,239
(17,095)
46,143
172,190
1,941
1,425
5,170
4,899
3,854
15,347
4,435
1,228
8,281
13,944
160,633
9,918
165
10,083
101
4,863
1,484
6,189
690
13,328
157,388
49,017
(8,293)
40,724
116,663
1,663
19,558
62,362
123,642
56,104
261,666
43,238
27,962
58,061
129,252
2,000,414
142,720
5,026
147,746
292
58,927
20,311
13,741
—
93,252
2,054,899
595,191
(160,894)
434,287
1,620,612
18,268
¥ 170,248
¥ 115,000
$ 1,602,334
68
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69
Consolidated Statements of Comprehensive Income
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2017
Net income
Other comprehensive income:
Net 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
2018
¥172,190
2017
¥116,663
7,651
37
(12,252)
9,735
356
5,528
¥177,717
¥175,557
2,160
21,177
234
(8,020)
8,114
810
22,315
¥138,979
¥137,045
1,934
Thousands of
U.S. dollars (Note 1)
2018
$1,620,612
72,009
348
(115,313)
91,624
3,351
52,028
$1,672,631
$1,652,301
20,329
68
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69
Consolidated Statements of Changes in Net Assets
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2017
Shareholders’ equity
Accumulated other comprehensive income
Millions of yen
Capital
stock
¥103,389
Capital
surplus
¥79,443
Retained
earnings
(Note 7 (b))
¥850,532
Total
shareholders’
equity
Treasury
stock
¥(3,242) ¥1,030,122
Net
unrealized
gain on
other securities
¥113,475
Deferred
gains or
losses on
hedges
¥55
Foreign
currency
translation
adjustment
¥ 40,831
Remeasure-
ments of
defined
benefit plans
¥(33,140)
Total
accumulated
other
comprehensive
income
¥121,222
Non-
controlling
interests
¥16,771
Total
net assets
¥1,168,115
103,389
79,443
850,532
(3,242)
(39,106)
170,248
259
(688)
1
1
(4)
—
1,030,122
(39,106)
170,248
(688)
2
259
—
(4)
113,475
55
40,831
(33,140)
121,222
16,771
—
1,168,115
(39,106)
170,248
(688)
2
259
—
(4)
—
¥103,389
(3)
¥79,440
131,402
¥981,934
(687)
130,712
¥(3,930) ¥1,160,833
7,653
¥121,128
37
¥92
(12,155)
¥ 28,676
9,797
¥(23,343)
5,331
¥126,553
1,057
¥17,827
137,100
¥1,305,214
7,653
37
(12,155)
9,797
5,331
1,057
6,388
Shareholders’ equity
Accumulated other comprehensive income
Millions of yen
Capital
stock
¥103,389
Capital
surplus
¥79,410
Retained
earnings
(Note 7 (b))
¥763,076
Treasury
stock
¥(3,150)
Total
shareholders’
equity
¥ 942,724
Net
unrealized
gain on
other securities
¥ 92,280
Deferred
gains or
losses on
hedges
¥(179)
Foreign
currency
translation
adjustment
¥48,429
Remeasure-
ments of
defined
benefit plans
¥(41,353)
Total
accumulated
other
comprehensive
income
¥ 99,177
Non-
controlling
interests
¥15,498
92,280
(179)
48,429
(41,353)
99,177
15,498
103,389
79,410
0
33
10
763,086
(27,935)
115,000
418
(37)
(3,150)
(93)
1
10
942,734
(27,935)
115,000
(93)
1
418
(37)
33
Total
net assets
¥1,057,399
10
1,057,409
(27,935)
115,000
(93)
1
418
(37)
33
—
¥103,389
33
¥79,443
87,446
¥850,532
(92)
¥(3,242)
87,388
¥1,030,122
21,195
¥113,475
234
¥ 55
(7,597)
¥40,831
8,213
¥(33,140)
22,045
¥121,222
1,273
¥16,771
110,705
¥1,168,115
21,195
234
(7,597)
8,213
22,045
1,273
23,318
Shareholders’ equity
Accumulated other comprehensive income
Thousands of U.S. dollars (Note 1)
Capital
stock
$973,073
Capital
surplus
$747,699
Retained
earnings
(Note 7 (b))
$8,005,007
Total
shareholders’
equity
Treasury
stock
$(30,513) $ 9,695,266
Net
unrealized
gain on
other securities
$1,068,000
Deferred
gains or
losses on
hedges
$518
Foreign
currency
translation
adjustment
$ 384,292
Remeasure-
ments of
defined
benefit plans
$(311,906)
Total
accumulated
other
comprehensive
income
$1,140,913
Non-
controlling
interests
$157,845
1,068,000
518
384,292
(311,906)
1,140,913
157,845
973,073
747,699
8,005,007
(30,513)
(368,056)
1,602,334
2,438
(6,475)
9
9
(38)
—
9,695,266
(368,056)
1,602,334
(6,475)
19
2,438
—
(38)
Total
net assets
$10,994,024
—
10,994,024
(368,056)
1,602,334
(6,475)
19
2,438
—
(38)
—
$973,073
(28)
$747,671
1,236,725
$9,241,732
(6,466)
1,230,231
$(36,988) $10,925,487
72,028
$1,140,028
348
$866
(114,400)
$ 269,892
92,207
$(219,699)
50,174
$1,191,087
9,948
$167,784
1,290,353
$12,284,367
72,028
348
(114,400)
92,207
50,174
9,948
60,122
Balance at March 31, 2017
Cumulative effect of changes
in accounting policies
Restated balance
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
Capital increase of
consolidated subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items
during the period
Balance at March 31, 2018
Balance at March 31, 2016
Cumulative effect of changes
in accounting policies
Restated balance
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
Capital increase of
consolidated subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items
during the period
Balance at March 31, 2017
Balance at March 31, 2017
Cumulative effect of changes
in accounting policies
Restated balance
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
Capital increase of
consolidated subsidiaries
Net changes of items other than
shareholders’ equity
Total changes of items
during the period
Balance at March 31, 2018
The accompanying notes are an integral part of these statements.
70
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71
Consolidated Statements of Cash Flows
Asahi Kasei Corporation and Consolidated Subsidiaries
Years Ended March 31, 2018 and 2017
Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Impairment loss
Amortization of goodwill
Amortization of negative goodwill
Increase in provision for grant of shares
Increase in provision for periodic repairs
Increase in provision for product warranties
Decrease in provision for removal cost of property, plant and equipment
Decrease in provision for loss on litigation
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
Increase in notes and accounts receivable—trade
Increase in inventories
Increase in notes and accounts payable—trade
Increase in accrued expenses
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
Payments of loans receivable
Collection of loans receivable
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Decrease in short-term loans payable
(Decrease) increase in commercial paper
Proceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of bonds
Repayments of lease obligations
Purchase of treasury stock
Proceeds from disposal of treasury stock
Cash dividends paid
Cash dividends paid to non-controlling interests
Other, net
Net cash (used in) provided by 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)
2018
2017
2018
¥ 218,333
95,415
2,158
18,048
(159)
200
1,280
280
(1,066)
(2,137)
(4,875)
(8,704)
4,594
(13,137)
(15,164)
31
(534)
6,261
(38,986)
(11,815)
23,020
6,014
(2,463)
17,259
293,851
10,267
(4,736)
(49,492)
249,891
(9,508)
3,012
(82,909)
1,601
(13,363)
(11,564)
17,774
(45,261)
30,568
(645)
(110,294)
(28,935)
(36,000)
15,395
(23,532)
(20,000)
(389)
(688)
2
(39,106)
(1,141)
(18)
(134,412)
(937)
4,247
144,077
¥ 157,388
91,387
1,484
17,806
(159)
—
703
108
(3,168)
—
(8,150)
(6,595)
4,435
(4,899)
(9,918)
101
(165)
4,863
(20,756)
(9,840)
18,619
2,467
(1,886)
(6,721)
227,105
7,733
(4,428)
(61,444)
168,965
(4,105)
5,232
(82,983)
3,178
(8,810)
(9,846)
12,018
(5,218)
2,169
(1,553)
(89,920)
(193,760)
56,000
138,812
(45,513)
—
(965)
(93)
1
(27,935)
(712)
207
(73,959)
(6,759)
(1,673)
145,307
$ 2,054,899
898,024
20,311
169,864
(1,496)
1,882
12,047
2,635
(10,033)
(20,113)
(45,882)
(81,920)
43,238
(123,642)
(142,720)
292
(5,026)
58,927
(366,927)
(111,200)
216,659
56,602
(23,181)
162,438
2,765,656
96,631
(44,574)
(465,807)
2,351,915
(89,487)
28,348
(780,320)
15,068
(125,769)
(108,838)
167,285
(425,986)
287,699
(6,071)
(1,038,061)
(272,329)
(338,824)
144,894
(221,478)
(188,235)
(3,661)
(6,475)
19
(368,056)
(10,739)
(169)
(1,265,054)
(8,819)
39,972
1,356,019
272
¥ 148,596
443
¥ 144,077
2,560
$ 1,398,551
Asahi Kasei Report 2018
71
70
Asahi Kasei Report 2018
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, 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 ¥106.25=US$1 prevailing on March 31, 2018, has been used.
Consolidation and investments in affiliated companies
The consolidated financial statements consist of the accounts of the
parent company and 171 subsidiaries (171 subsidiaries at March 31,
2017, hereinafter collectively referred to as the “Company”) which, with
minor exceptions due to immateriality, are all majority or wholly owned
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 and building accessories acquired on
or after April 1, 2016 which are depreciated using the straight-line method,
at rates based on estimated useful lives of the assets, principally ranging
from 7 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.
(d) Significant allowances
i) Allowance for doubtful accounts
Estimates of the unrecoverable portion of receivables, generally based
on historical rates and for specific receivables of particular concern based
on individual estimates of recoverability, are recognized as allowance for
doubtful accounts.
ii) Provision for 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
companies, including 6 core operating companies (Asahi Kasei Homes
Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Microdevices
Corp., Asahi Kasei Pharma Corp., Asahi Kasei Medical Co., Ltd., and
ZOLL Medical Corporation), Polypore International, LP, and Tongsuh
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 54 such unconsolidated subsid-
iaries and 20% to 50% owned companies to which the equity method is
applied at March 31, 2018 (32 at March 31, 2017), including Asahi Kasei EIC
Solutions Corp. and Asahi Yukizai Corporation.
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.
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.
vi) Provision for grant of shares
To record the grant of shares to Directors, etc., in accordance with Share
Grant Regulations, the provision for grant of shares is recorded based on
an estimate of grant of shares liabilities as of March 31, 2018.
(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.
72
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73
(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, 2018 and 2017, 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
3. Changes in significant accounting policies
(a) Accounting Standards issued but not yet applied
i) Implementation Guidance on Tax Effected Accounting and
Implementation Guidance on Recoverability of Deferred Tax Assets
The Accounting Standards Board of Japan (ASBJ) issued ASBJ Guidance
No. 28 “Implementation Guidance on Tax Effected Accounting” and
ASBJ Guidance No. 26 (revised 2018) “Implementation Guidance on
Recoverability of Deferred Tax Assets.” Treatment of taxable temporary
differences associated with investments in subsidiaries in the non-
consolidated financial statements was revised, and treatment of recover-
ability of deferred tax assets for companies corresponding to Category 1
was clarified. The Company will apply the guidance from the beginning
of the fiscal year ending March 31, 2019. The effects on the consolidated
financial statements are currently being assessed.
ii) Accounting Standard for Revenue Recognition and Implementation
Guidance on Accounting Standard for Revenue Recognition
The ASBJ issued ASBJ Statement No. 29 “Accounting Standard for Revenue
Recognition” and ASBJ Guidance No. 30 “Implementation Guidance on
Accounting Standard for Revenue Recognition.” This is a comprehensive
standard related to revenue recognition, with the following five steps to
be applied for recognition of revenue:
Step 1: Identify the contract with customers
Step 2: Identify the separate performance obligations
Step 3: Determine the transaction price of the contract
Step 4: Allocate the transaction price to each of the separate perfor-
mance obligations
Step 5: Recognize the revenue as each performance obligation is
satisfied
The Company will apply the standard and guidance from the beginning
of the fiscal year ending March 31, 2022. At the time of the preparation of
the consolidated financial statements, the effects are being assessed.
(b) Changes in presentation
Consolidated statements of income
In the fiscal year ended March 31, 2018, donations, which had previously
been reported separately, became 10% or less of total non-operating
expenses, and were included in others under non-operating expenses.
derivatives that are designated as hedging instruments. Gains or losses
arising from changes in fair value of these qualifying hedges are deferred
as “Deferred gains or losses on hedges” 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 recognized 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.
The consolidated statements of income for the fiscal year ended March 31,
2017 have been reclassified accordingly, resulting in donations of ¥3,930
million being included in other under non-operating expenses.
(c) Additional information
Accounting treatment related to the trust for granting shares to
Directors, etc.
As approved by the Company’s Board of Directors on April 21, 2017, and
at the 126th Ordinary General Meeting of Shareholders held on June
28, 2017, a stock-based remuneration system was introduced for the
Company’s Directors (excluding Outside Directors), Executive Officers of
the Company, and Executive Officers of core operating companies of the
Asahi Kasei Group who hold a certain rank (collectively “Directors, etc.”),
to more clearly link remuneration of Directors, etc., and the Company’s
shareholder value, thereby reinforcing the common interest between
Directors, etc., and shareholders, including both the benefits of share price
increases and the risk associated with share price decreases.
The system is a stock-based incentive system in which a trust, estab-
lished and funded by the Company, acquires shares of the Company, and
the Company grants the shares to eligible Directors, etc., in accordance
with Share Grant Regulations adopted by the Board of Directors. The
Company confers on each Director, etc., a certain number of points as
specified in accordance with their individual rank, etc., and at the time of
their retirement a number of shares equal to the number of accumulated
points are granted to Directors, etc., or sold by the trust and granted to
Directors, etc., in the form of cash. Voting rights associated with the shares
of the Company held in the trust are not exercisable.
Accounting treatment of shares of the Company held by the trust
is performed in accordance with PITF No. 30 “Practical Solution on
Transactions of Delivering the Company’s Own Stock to Employees etc.
through Trusts” issued by the ASBJ. The Company records its own stocks
held by the trust as treasury stock under net assets in the consolidated
balance sheets, at book value excluding associated costs incurred by the
trust, using the gross method which identifies the Company with the trust.
As of March 31, 2018, there were 464 thousand shares of such treasury
stock, with a book value of ¥601 million.
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4. Notes to Consolidated Balance Sheets
(a) Investment securities
Among investment securities, shares of unconsolidated subsidiaries and affiliates as of March 31, 2018 and 2017, amounted to ¥83,487 million (US$785,760
thousand) and ¥65,725 million, respectively. Included in those amounts are investments in joint ventures of ¥43,168 million (US$406,287 thousand) and
¥33,686 million, respectively.
(b) Pledged assets and secured debt
A summary of assets pledged as collateral and secured debt as of March 31, 2018 and 2017, 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
2018
2017
2018
¥—
—
¥—
¥—
—
¥—
¥106
1
¥107
¥ 0
28
¥ 29
$—
—
$—
$—
—
$—
Besides the above, investment securities pledged to suppliers as transaction guarantees at March 31, 2018 and 2017, were ¥72 million (US$678
thousand) and ¥61 million, respectively.
(c) Contingent liabilities
Contingent liabilities at March 31, 2018 and 2017, 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
2018
¥39,457
—
—
¥39,457
2017
¥35,774
—
10,185
¥45,959
2018
$371,360
—
—
$371,360
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.
(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, 2018 and 2017, were ¥9,999
million (US$94,108 thousand) and ¥9,572 million, respectively. The breakdown of reduced-value entries as of March 31, 2018 and 2017, was as follows:
Buildings and structures
Machinery, equipment and vehicles
Land
Other
Total
Millions of yen
Thousands of U.S. dollars
2018
¥3,320
6,366
167
146
¥9,999
2017
¥3,394
5,865
167
146
¥9,572
2018
$31,247
59,915
1,572
1,374
$94,108
(e) Notes maturing on March 31, 2018
Although financial institutions in Japan were closed on March 31, 2018, and notes maturing on that date were actually settled on the following business
day, April 2, 2018, those were accounted for as if settled on March 31, 2018.
The breakdown of those notes at March 31, 2018 was as follows:
Notes and accounts receivable—trade
Notes and accounts payable—trade
Millions of yen
Thousands of U.S. dollars
2018
¥2,501
1,301
2017
¥—
—
2018
$23,539
12,245
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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, 2018 and 2017, were as follows:
Salaries and benefits
Research and development*
Freight and storage
Millions of yen
Thousands of U.S. dollars
2018
¥174,659
61,998
38,568
2017
¥165,337
59,476
37,450
2018
$1,643,849
583,511
362,993
* The aggregate amounts of research and development expenses included in manufacturing costs and selling, general and administrative expenses for the years ended March 31, 2018 and 2017, were ¥85,695
million (US$806,541 thousand) and ¥79,566 million, respectively.
(b) Gain or 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. (Gain) loss on valuation of inventories for
the years ended March 31, 2018 and 2017, were as follows:
Millions of yen
Thousands of U.S. dollars
2018
¥(224)
2017
¥(152)
2018
$(2,108)
(c) Gain on sales of noncurrent assets
Major components of gain on sales of noncurrent assets for the years ended March 31, 2018 and 2017, were as follows:
Land
Machinery
Other
Millions of yen
Thousands of U.S. dollars
2018
¥466
48
20
2017
¥146
14
4
2018
$4,386
452
188
(d) Loss on disposal of noncurrent assets
Loss on disposal of noncurrent assets for the years ended March 31, 2018 and 2017, was primarily loss on abandonment and sale of buildings, machinery and
equipment, etc. The abandonment and sale of buildings, machinery and equipment, etc. were performed under a single, all-inclusive contract for each facility.
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(e) Impairment loss
Major components of impairment losses for the years ended March 31, 2018 and 2017, were as follows:
Use
Asset class
Location
Production facility
for electronic devices
Office assets
Production facility
for synthetic resin
Dormitory for employees
Others
Machinery and
equipment, etc.
Buildings, etc.
Machinery and
equipment, etc.
Buildings, etc.
Machinery and
equipment, etc.
Hyuga, Miyazaki
Chiyoda-ku, Tokyo,
etc.
Sodegaura, Chiba
Izunokuni, Shizuoka
Fuji, Shizuoka, etc.
Goodwill related to
new electronic device business
Goodwill
—
Facility for storage of waste
Buildings, etc.
Equipment for dry-heat treatment
of nonwovens
Buildings, etc.
Kawasaki, Kanagawa,
etc.
Nobeoka, Miyazaki,
etc.
Others
Buildings, etc.
Moriyama, Shiga, etc.
Millions of yen
Thousands of
U.S. dollars
2018
¥ —
2017
2018
¥1,210
$ —
Item on the Consolidated
Statements of Income
Business structure improvement
expenses
—
—
—
—
997
557
284
381
1,208
1,131
125
265
—
—
—
—
— Impairment losses
—
Business structure improvement
expenses
— Impairment losses
—
Impairment losses and business
structure improvement expenses
9,834
Impairment losses
5,242
Impairment losses
2,673
Impairment losses
3,586
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.
The book value of goodwill related to new electronic device business was reduced to the recoverable amount due to diminished profitability, the book
value of the facility for storage of waste was reduced to the recoverable amount due to a determination of a lack of future profitability, and the book value
of equipment for dry-heat treatment of nonwovens was reduced to the recoverable amount due to the disappearance of prospects for future use. The
recoverable amount is stated as the value for future usage, which is calculated based on discounted future cash flows within the applicable discount rate of
6% as of March 31, 2018 and 2017.
Among the extraordinary losses under Others, ¥62 million (US$584 thousand) and ¥115 million were recorded under business structure improvement
expenses for the years ended March 2018 and 2017, respectively.
(f) Business structure improvement expenses
Major components of business structure improvement expenses for the years ended March 31, 2018 and 2017, were as follows:
Impairment of fixed assets
Loss on disposal and devaluation of inventory and others
Total
Millions of yen
Thousands of U.S. dollars
2018
¥ 62
1,398
¥1,460
2017
¥2,456
3,734
¥6,189
2018
$ 584
13,158
$13,741
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6. Notes to Consolidated Statements of Comprehensive Income
Recycling adjustment and tax effects on other comprehensive income for the years ended March 31, 2018 and 2017, were as follows:
Millions of yen
Thousands of U.S. dollars
2018
2017
2018
Net unrealized gain on other securities:
Changes during the fiscal year
Recycling adjustment
Pre-tax effect
Tax effect
Net unrealized gain on other securities
Deferred gains or losses on hedges:
Changes during the fiscal year
Recycling adjustment
Pre-tax effect
Tax effect
Deferred gains or losses on hedges
Foreign currency translation adjustment:
Changes during the fiscal year
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
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
7. Notes to Consolidated Statements of Changes in Net Assets
For the year ended March 31, 2018
(a) Class and total number of issued and outstanding shares and treasury stock
¥ 26,084
(15,068)
11,016
(3,364)
7,651
71
(74)
(3)
40
37
(12,088)
(12,088)
(164)
(12,252)
2,844
11,302
14,145
(4,410)
9,735
356
—
356
¥ 5,528
¥40,337
(9,858)
30,479
(9,302)
21,177
380
(170)
210
24
234
(8,073)
(8,073)
53
(8,020)
(74)
10,901
10,827
(2,713)
8,114
866
(55)
810
¥22,315
$ 245,496
(141,816)
103,680
(31,661)
72,009
668
(696)
(28)
376
348
(113,769)
(113,769)
(1,544)
(115,313)
26,767
106,372
133,129
(41,506)
91,624
3,351
—
3,351
$ 52,028
Issued and outstanding shares
Common stock
Total
Treasury stock
Common stock (Notes 1, 2 & 3)
Total
Number of shares
as of March 31, 2017
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, 2018
Thousands of shares
1,402,616
1,402,616
5,959
5,959
—
—
534
534
—
—
1
1
1,402,616
1,402,616
6,492
6,492
Notes: 1. The increase of 534 thousand shares in common stock of treasury stock was primarily attributable the purchase of 464 thousand shares by the trust for granting shares to Directors, etc., and the
purchase of 70 thousand shares in quantities of less than one share unit.
2. The decrease of 1 thousand shares in common stock of treasury stock was due to the sale of shares in quantities of less than one share unit.
3. The number of shares of treasury stock as of March 31, 2018, includes 464 thousand shares held by the trust for granting shares to Directors, etc.
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(b) Dividends
i) Cash dividends paid
1) The following was resolved by the Board of Directors on May 11, 2017.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥19,553 million (US$184,028 thousand)
¥14.00 (US$0.13)
March 31, 2017
June 6, 2017
2) The following was resolved by the Board of Directors on November 1, 2017.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥19,552 million (US$184,019 thousand)
¥14.00 (US$0.13)
September 30, 2017
December 1, 2017
Note: Total dividends includes ¥6 million (US$56 thousand) for shares held by the trust for granting shares to Directors, etc.
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, 2018.
Dividends for common stock
Total dividends
Source of dividends
Dividend per share
Date of record
Payment date
¥27,932 million (US$262,889 thousand)
Retained earnings
¥20.00 (US$0.19)
March 31, 2018
June 5, 2018
Note: Total dividends includes ¥9 million (US$85 thousand) for shares held by the trust for granting shares to Directors, etc.
For the year ended March 31, 2017
(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, 2016
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, 2017
Thousands of shares
1,402,616
1,402,616
5,862
5,862
—
—
99
99
—
—
2
2
1,402,616
1,402,616
5,959
5,959
Notes: 1. The increase of 99 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 2 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 11, 2016.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥13,968 million
¥10.00
March 31, 2016
June 6, 2016
2) The following was resolved by the Board of Directors on November 1, 2016.
Dividends for common stock
Total dividends
Dividend per share
Date of record
Payment date
¥13,967 million
¥10.00
September 30, 2016
December 1, 2016
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, 2017.
Dividends for common stock
Total dividends
Source of dividends
Dividend per share
Date of record
Payment date
¥19,553 million
Retained earnings
¥14.00
March 31, 2017
June 6, 2017
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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, 2018 and 2017, was as follows:
Cash and deposits
Time deposits with deposit term of over 3 months
Cash and cash equivalents
9. Leases
(a) Financing lease transactions
Financing lease transactions without title transfer
Millions of yen
Thousands of U.S. dollars
2018
¥156,318
(7,722)
¥148,596
2017
¥145,289
(1,212)
¥144,077
2018
$1,471,228
(72,678)
$1,398,551
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.”
(b) Operating lease transactions
Future lease payments for the non-cancelable portion of the Company’s operating leases at March 31, 2018 and 2017, were as follows:
Due within one year
Due after one year
Total
Millions of yen
Thousands of U.S. dollars
2018
¥ 8,677
25,987
¥34,664
2017
¥ 5,753
33,899
¥39,652
2018
$ 81,666
244,584
$326,249
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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, 2018 and 2017, were as shown below.
Financial instruments whose fair values are deemed extremely difficult to determine are not included in this table (See Notes 2), 3) and 4) below).
Cash and deposits
Notes and accounts receivable—trade
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
Commercial paper
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposits
Total liabilities
Derivative financial instruments (*)
Millions of yen
2018
Fair value
¥156,318
341,396
16,471
221,708
28,445
764,338
171,413
58,898
20,000
29,714
20,420
199,485
551
8,726
509,207
¥ 1,257
Carrying amount
¥156,318
341,396
15,353
221,708
28,442
763,217
171,413
58,898
20,000
29,714
20,000
202,296
551
8,696
511,568
¥ 1,257
Difference
¥ —
—
1,118
—
3
1,121
—
—
—
—
(420)
2,811
(0)
(30)
2,361
¥ —
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Cash and deposits
Notes and accounts receivable—trade
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
Commercial paper
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposits
Total liabilities
Derivative financial instruments (*)
Cash and deposits
Notes and accounts receivable—trade
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
Commercial paper
Income taxes payable
Bonds payable
Long-term loans payable
Lease obligations
Long-term guarantee deposits
Total liabilities
Derivative financial instruments (*)
Millions of yen
2017
Fair value
¥145,289
302,751
9,558
211,694
19,366
688,657
147,543
88,965
56,000
16,202
40,646
216,145
765
8,344
574,610
¥ (249)
Thousands of U.S. dollars
2018
Fair value
$1,471,228
3,213,139
155,021
2,086,664
267,718
7,193,769
1,613,299
554,334
188,235
279,661
192,188
1,877,506
5,186
82,127
4,792,536
$ 11,831
Carrying amount
¥145,289
302,751
14,529
211,694
19,371
693,633
147,543
88,965
56,000
16,202
40,000
217,094
773
8,299
574,876
¥ (249)
Carrying amount
$1,471,228
3,213,139
144,499
2,086,664
267,689
7,183,219
1,613,299
554,334
188,235
279,661
188,235
1,903,962
5,186
81,845
4,814,758
$ 11,831
Difference
¥ —
—
(4,971)
—
(5)
(4,976)
—
—
—
—
(646)
949
8
(45)
266
¥ —
Difference
$ —
—
10,522
—
28
10,551
—
—
—
—
(3,953)
26,456
(0)
(282)
22,221
$ —
(*) The amounts represent net amount of assets and liabilities resulting from derivative transactions.
2) Bonds payable
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
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. 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.
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.
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, 2018 and 2017, amounting to ¥59,120 million (US$556,424 thou-
sand) and ¥24,510 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.
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.
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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,
2018 and 2017, amounting to ¥74,668 million (US$702,758 thousand) and ¥54,787 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, 2018 and 2017, amount-
ing to ¥3,101 million (US$29,186 thousand) and ¥3,127 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, 2018 and 2017, amounting to ¥11,962 million (US$112,584 thousand) and
¥12,180 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
2018
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
¥156,318
341,396
5,431
¥503,145
¥ —
—
22,676
¥22,676
¥ —
—
335
¥335
¥—
—
—
¥—
Millions of yen
2017
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
¥145,289
302,751
453
¥448,493
¥ —
—
18,912
¥18,912
¥—
—
5
¥ 5
¥—
—
—
¥—
Thousands of U.S. dollars
2018
Due within one year
Due after one year,
within five years
Due after five years,
within ten years
Due after more than
ten years
$1,471,228
3,213,139
51,115
$4,735,482
$ —
—
213,421
$213,421
$ —
—
3,153
$3,153
$—
—
—
$—
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:
Year ending March 31
2019
2020
2021
2022
2023
2024 and thereafter
Year ending March 31
2018
2019
2020
2021
2022
2023 and thereafter
Millions of yen
2018
Short-term loans
payable
Commercial paper
Bonds payable
Long-term loans
payable
Lease obligations
Total
¥58,898
—
—
—
—
—
¥20,000
—
—
—
—
—
¥ —
20,000
—
—
—
—
¥59,120
21,794
23,371
28,981
28,043
40,988
Millions of yen
2017
¥199
162
128
54
8
—
¥138,217
41,956
23,499
29,034
28,051
40,988
Short-term loans
payable
Commercial paper
Bonds payable
Long-term loans
payable
Lease obligations
Total
¥88,965
—
—
—
—
—
¥56,000
—
—
—
—
—
¥20,000
—
20,000
—
—
—
¥24,510
59,796
21,279
22,900
32,790
55,819
¥305
186
143
112
26
—
¥189,780
59,982
41,422
23,012
32,816
55,819
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Thousands of U.S. dollars
2018
Year ending March 31
2019
2020
2021
2022
2023
2024 and thereafter
Short-term loans
payable
Commercial paper
Bonds payable
Long-term loans
payable
Lease obligations
Total
$554,334
—
—
—
—
—
$188,235
—
—
—
—
—
$ —
188,235
—
—
—
—
$556,424
205,120
219,962
272,762
263,934
385,769
$1,873
1,525
1,205
508
75
—
$1,300,866
394,880
221,167
273,261
264,009
385,769
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, 2018 and 2017, were as follows:
Securities with unrealized gains:
Equity securities
Subtotal
Securities with unrealized losses:
Equity securities
Subtotal
Total
Securities with unrealized gains:
Equity securities
Subtotal
Securities with unrealized losses:
Equity securities
Subtotal
Total
Securities with unrealized gains:
Equity securities
Subtotal
Securities with unrealized losses:
Equity securities
Subtotal
Total
Millions of yen
2018
Cost
¥35,703
35,703
13,240
13,240
¥48,943
Millions of yen
2017
Cost
¥35,723
35,723
12,690
12,690
¥48,414
Thousands of U.S. dollars
2018
Cost
$336,028
336,028
124,612
124,612
$460,640
Unrealized gains
(losses)
¥173,872
173,872
(1,108)
(1,108)
¥172,765
Unrealized gains
(losses)
¥164,557
164,557
(1,277)
(1,277)
¥163,280
Unrealized gains
(losses)
$1,636,442
1,636,442
(10,428)
(10,428)
$1,626,024
Carrying
amount
¥209,576
209,576
12,133
12,133
¥221,708
Carrying
amount
¥200,280
200,280
11,414
11,414
¥211,694
Carrying
amount
$1,972,480
1,972,480
114,193
114,193
$2,086,664
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(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, 2018 and 2017, were as follows:
Selling amount
Gain on sales of securities
Loss on sales of securities
Millions of yen
Thousands of U.S. dollars
2018
¥18,088
15,164
—
2017
¥12,087
9,918
—
2018
$170,240
142,720
—
(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, 2018, was ¥31 million (US$292
thousand), which is the sum of ¥28 million (US$264 thousand) for equity securities of unconsolidated subsidiaries and affiliates and ¥3 million (US$28
thousand) for other securities, and for the year ended March 31, 2017, ¥101 million, which is for other securities.
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
2018
Amount of contract
over 1 year
Fair value
Profit (loss) from
valuation
Selling:
U.S. dollar
Euro
Thai baht
Singapore dollar
British pound
Buying:
U.S. dollar
Euro
Thai baht
Total
¥ 52,155
9,720
1,867
—
27
5,438
50,269
5
¥119,481
¥—
—
—
—
—
—
—
—
¥—
¥1,514
158
4
—
0
(84)
(335)
(0)
¥1,257
¥1,514
158
4
—
0
(84)
(335)
(0)
¥1,257
Classification
Items
Amount of contract
Off-market transactions
Foreign exchange forward contracts:
Millions of yen
2017
Amount of contract
over 1 year
Fair value
Profit (loss) from
valuation
Selling:
U.S. dollar
Euro
Thai baht
Singapore dollar
British pound
Buying:
U.S. dollar
Euro
Thai baht
Total
¥24,981
9,289
879
11
52
1,827
45,868
4
¥82,911
¥—
—
—
—
—
—
—
—
¥—
¥ 100
(9)
11
(0)
0
(376)
(48)
0
¥(322)
¥ 100
(9)
11
(0)
0
(376)
(48)
0
¥(322)
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Classification
Items
Amount of contract
Off-market transactions
Foreign exchange forward contracts:
Thousands of U.S. dollars
2018
Amount of contract
over 1 year
Fair value
Profit (loss) from
valuation
Selling:
U.S. dollar
Euro
Thai baht
Singapore dollar
British pound
Buying:
U.S. dollar
Euro
Thai baht
Total
$ 490,871
91,482
17,572
—
254
51,181
473,120
47
$1,124,527
$—
—
—
—
—
—
—
—
$—
$14,249
1,487
38
—
0
(791)
(3,153)
(0)
$11,831
(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
2018
Amount of contract
over 1 year
Selling:
U.S. dollar
Euro
Thai baht
Buying:
U.S. dollar
Euro
Thai baht
Swedish krona
Total
Accounts receivable—trade
Accounts receivable—trade
Accounts receivable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Investment securities
¥ 5,966
721
—
359
—
3
5,198
¥12,246
¥—
—
—
—
—
—
—
¥—
Classification
Items
Hedged assets/liabilities
Amount of contract
Principle-based accounting
Foreign exchange forward contracts:
Millions of yen
2017
Amount of contract
over 1 year
Selling:
U.S. dollar
Euro
Thai baht
Buying:
U.S. dollar
Euro
Thai baht
Swedish krona
Total
Accounts receivable—trade
Accounts receivable—trade
Accounts receivable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Investment securities
¥ 619
109
11
1,445
2
106
—
¥2,292
¥—
—
—
—
—
—
—
¥—
$14,249
1,487
38
—
0
(791)
(3,153)
(0)
$11,831
Fair value
¥ 180
17
—
(10)
—
0
(186)
¥ 0
Fair value
¥36
1
(0)
32
(0)
6
—
¥74
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Classification
Items
Hedged assets/liabilities
Amount of contract
Principle-based accounting
Foreign exchange forward contracts:
Thousands of U.S. dollars
2018
Amount of contract
over 1 year
Selling:
U.S. dollar
Euro
Thai baht
Buying:
U.S. dollar
Euro
Thai baht
Swedish krona
Total
Accounts receivable—trade
Accounts receivable—trade
Accounts receivable—trade
Accounts payable—trade
Accounts payable—trade
Accounts payable—trade
Investment securities
$ 56,151
6,786
—
3,379
—
28
48,922
$115,256
$—
—
—
—
—
—
—
$—
ii) Interest-rate swaps, and interest-rate and currency swaps
Classification
Items
Hedged assets/liabilities
Amount of contract
Millions of yen
2018
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
¥139,261
¥93,633
Long-term loans payable
170
¥139,431
—
¥93,633
Millions of yen
Fair value
$ 1,694
160
—
(94)
—
0
(1,751)
$ 0
Fair value
(*)
(*)
¥—
Classification
Items
Hedged assets/liabilities
Amount of contract
2017
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
¥165,889
¥139,918
Long-term loans payable
324
¥166,213
162
¥140,080
Classification
Items
Hedged assets/liabilities
Amount of contract
Thousands of U.S. dollars
2018
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
$1,310,692
$881,252
Long-term loans payable
1,600
$1,312,292
—
$881,252
(*)
(*)
¥—
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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13. Provision for retirement benefits
Upon terminating employment, employees of the parent company and its subsidiaries 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 and/or defined contribu-
tion plans. Additional benefits may be granted to employees depending on the conditions under which termination of employment occurs. 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, 2018 and 2017, were as follows:
Beginning balance of the projected benefit obligations
Service cost
Interest cost
Actuarial gains/losses
Payment of retirement benefits
Other
Ending balance of the projected benefit obligations
Millions of yen
Thousands of U.S. dollars
2018
¥398,132
14,922
695
1,213
(14,620)
513
¥400,855
2017
¥398,588
15,581
677
2,133
(19,016)
169
¥398,132
2018
$3,747,125
140,442
6,541
11,416
(137,600)
4,828
$3,772,753
Reconciliations of beginning and ending balances of plan assets for the fiscal years ended March 31, 2018 and 2017, 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
2018
¥219,765
5,461
4,064
9,513
(8,571)
(11)
¥230,220
2017
¥212,288
5,265
2,056
9,799
(9,532)
(110)
¥219,765
2018
$2,068,376
51,398
38,249
89,534
(80,668)
(104)
$2,166,776
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, 2018 and 2017, 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 sheets
Net defined benefit liability
Net of liability and asset that have been recorded in the consolidated balance sheets
Millions of yen
Thousands of U.S. dollars
2018
¥ 257,710
(230,220)
27,489
143,145
¥ 170,634
¥ 170,634
¥ 170,634
2017
¥ 256,082
(219,765)
36,318
142,050
¥ 178,368
¥ 178,368
¥ 178,368
2018
$ 2,425,506
(2,166,776)
258,720
1,347,247
$ 1,605,967
$ 1,605,967
$ 1,605,967
Periodic retirement benefit expenses for employees and the breakdown of items for the years ended March 31, 2018 and 2017, 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
2018
¥13,301
695
(5,461)
11,196
141
636
¥20,509
2017
¥13,952
677
(5,265)
10,763
142
506
¥20,775
2018
$125,186
6,541
(51,398)
105,374
1,327
5,986
$193,026
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The components of other comprehensive income on defined benefit plans for the fiscal years ended March 31, 2018 and 2017, were as follows:
Prior service costs
Actuarial gains/losses
Total
Millions of yen
Thousands of U.S. dollars
2018
¥ 141
14,004
¥14,145
2017
¥ 142
10,685
¥10,827
2018
$ 1,327
131,802
$133,129
Accumulated other comprehensive income on defined benefit plans at March 31, 2018 and 2017, was as follows:
Unrecognized prior service costs
Unrecognized actuarial gains/losses
Total
Share by major classifications for plan assets at March 31, 2018 and 2017, was as follows:
Millions of yen
Thousands of U.S. dollars
2018
¥ 78
33,779
¥33,857
2017
¥ 219
47,783
¥48,002
2018
$ 734
317,920
$318,654
Bonds
Stock
Alternative investments
Life insurance
Cash and deposits
Other
Total
2018
37%
25
16
13
8
2
100%
2017
37%
24
16
14
8
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, 2018 and 2017, were as follows:
Discount rate
The long-term rate of expected return on plan assets
Expected rate of increase in salary
2018
Mainly 0.1%
Mainly 2.5%
2.0–6.5%
2017
Mainly 0.1%
Mainly 2.5%
2.3–7.1%
Required payments to defined contribution plans at March 31, 2018, amounted to ¥1,807 million (US$17,007 thousand), and at March 31, 2017,
amounted to ¥1,874 million.
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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, 2018 and 2017, were as follows:
Deferred tax assets:
Net defined benefit liability
Accrued bonuses
Foreign tax credit carry forwards
Unrealized gain on noncurrent assets and others
Impairment losses
Loss on disposal of noncurrent assets
Other
Subtotal deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on other securities
Identified intangible assets during business combination
Deferred gain on property, plant and equipment
Depreciation—overseas subsidiaries
Other
Total deferred tax liabilities
Net deferred tax assets (liabilities)
Millions of yen
Thousands of U.S. dollars
2018
2017
2018
¥ 52,147
7,734
6,069
3,931
3,414
3,268
22,951
99,515
(10,865)
88,651
(54,229)
(29,925)
(8,383)
(8,077)
(6,899)
(107,514)
¥ (18,864)
¥ 55,324
7,687
5,560
3,843
3,397
3,383
29,389
108,583
(10,054)
98,528
(51,508)
(50,049)
(8,388)
(13,405)
(5,388)
(128,738)
¥ (30,210)
$ 490,795
72,791
57,120
36,998
32,132
30,758
216,009
936,612
(102,259)
834,362
(510,391)
(281,647)
(78,899)
(76,019)
(64,932)
(1,011,896)
$ (177,544)
Net deferred tax assets (liabilities) at March 31, 2018 and 2017, 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
2018
¥ 20,032
6,727
—
(45,622)
2017
¥ 20,279
9,309
(39)
(59,759)
2018
$ 188,536
63,313
—
(429,384)
In the fiscal year ended March 31, 2018, tax loss carry forwards, depreciation, unrealized loss on investment securities, provision for periodic repairs, pro-
vision for product warranties, accrued enterprise tax, devaluation of inventories, allowance for doubtful accounts, and asset retirement obligations, which
had previously been reported separately, are included in Current liabilities—other due to immateriality. The figures for Current liabilities—other for the fiscal
year ended March 31, 2017, include ¥6,870 million in tax loss carry forwards, ¥2,781 million in depreciation, ¥1,765 million in unrealized loss on investment
securities, ¥1,456 million in provision for periodic repairs, ¥1,338 million in provision for product warranties, ¥1,247 million in accrued enterprise tax, ¥1,092
million in devaluation of inventories,¥979 million on allowance for doubtful accounts, and ¥610 million in asset retirement obligations.
Reconciliation of the differences between the statutory tax rate and the effective income tax rate for the years ended March 31, 2018 and 2017, was as follows:
Statutory tax rate
Increase (reduction) in taxes resulting from:
Non-deductible expenses and non-taxable income
R&D expenses deductible from income taxes
Amortization of goodwill and negative goodwill
Equity in (losses) earnings of unconsolidated subsidiaries and affiliates
Undistributed earnings (losses) of foreign subsidiaries
Difference of tax rates for foreign subsidiaries
Items related to U.S. tax reform
Other
Effective income tax rate
2018
30.9%
0.3
(2.9)
2.5
(1.9)
0.4
(0.4)
(7.9)
0.1
21.1%
2017
30.9%
1.1
(3.7)
3.5
(1.0)
0.2
(1.2)
—
(3.9)
25.9%
Note: In the fiscal year ended March 31, 2018, equalization of inhabitants taxes and valuation allowance, which had previously been reported separately, are included in Other due to immateriality. The figure
for Other rate reconciliation items for the fiscal year ended March 31, 2017, includes a 0.3% effect of equalization of inhabitants taxes and a (3.9)% effect of valuation allowance.
Revision of deferred tax assets and liabilities due to change in corporate tax rate, etc.
The U.S. Tax Cuts and Jobs Reform Act enacted on December 22, 2017, reduced the corporate tax rate applied to U.S. consolidated subsidiaries from
35% to 21% effective January 1, 2018. As a result, deferred tax liabilities (net of deferred tax assets) and deferred income taxes for the fiscal year ended March
31, 2018, each decreased by ¥19,027 million (US$179,078 thousand).
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15. Asset retirement obligations
(a) Outline of asset retirement obligations
Due to commitments pertaining to restoration to original state before vacating in accordance with land lease agreements such as for 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, 2018, 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 5.4%.
(c) (Decrease) increase in the total amount of asset retirement obligations in the fiscal years ended March 31, 2018 and 2017
Balance at beginning of year
Increase due to asset retirement obligations accrued
Adjustment due to passage of time
Decrease due to fulfillment of asset retirement obligations
Decrease due to accounting estimates
Increase (decrease) due to foreign exchange fluctuation
Balance at end of year
Millions of yen
Thousands of U.S. dollars
2018
¥4,007
164
198
(82)
(505)
56
¥3,838
2017
¥4,047
37
136
(125)
—
(88)
¥4,007
2018
$37,713
1,544
1,864
(772)
(4,753)
527
$36,122
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, 2018 and 2017, were as follows:
Balance at beginning of year
Increase due to new lease agreements
Decrease due to the cancelation of existing lease agreements
Balance at end of year
Millions of yen
Thousands of U.S. dollars
2018
¥1,766
80
(6)
¥1,840
2017
¥1,733
79
(46)
¥1,766
2018
$16,621
753
(56)
$17,318
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(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.
16. 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 an operating holding company
configuration with the operating holding company and core operating
companies performing operations in three business sectors. The operating
holding company and each core operating company lays out strategy and
develops business activities in Japan and abroad.
Beginning with the first quarter of the fiscal year ended March 31, 2018,
the Energy Division, which was formerly included in Others, was reclassi-
fied into the Material segment. The figures for the prior period have been
recalculated in accordance with the new classification for comparison
purposes.
Main products of the three reportable segments are as follows:
Material segment
Fibers business
The Company manufactures, processes, and sells elastic polyurethane
filament, cupro fiber, nonwoven fabrics, and nylon 66 filament.
Chemicals business
The Company manufactures, processes, and sells petrochemical products
(such as acrylonitrile, styrene, polyethylene, and polystyrene), performance
polymer products (such as engineering plastics and synthetic rubber), and
performance material and consumable products (such as coating materi-
als, microcrystalline cellulose, explosives, explosion-bonded metal clad,
hollow-fiber filtration membranes, ion-exchange membranes, electronic
materials, food wrapping film, and plastic films, sheets, and foams).
Electronics business
The Company manufactures, processes, and sells battery separator prod-
ucts (such as lithium-ion battery separator and lead-acid battery separator)
and electronic devices (such as mixed-signal LSIs and Hall elements).
Homes segment
Homes business
The Company constructs unit homes and apartment buildings, and
operates real estate businesses, remodeling businesses, and financial and
other services.
Construction Materials business
The Company manufactures and sells autoclaved aerated concrete (AAC)
panels, insulation panels, foundation systems, and structural components.
Health Care segment
Pharmaceuticals business
The Company manufactures and sells pharmaceuticals and diagnostic
reagents.
Medical Care business
The Company manufactures and sells artificial kidneys, therapeutic
apheresis devices, and virus removal filters.
Critical Care business
The Company manufactures and sells defibrillators and temperature
management systems.
Others
The Company performs plant and environmental engineering, research
and analysis, employment agency/staffing operations, etc.
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(c) Information concerning net sales, income or loss, assets, and other items for each reportable segment
Sales:
External customers
Intersegment
Total
Operating income
Assets
Other items:
Millions of yen
2018
Material
Homes
Health Care
Subtotal
Others (Note 1)
Total
¥1,087,720
5,014
1,092,734
121,925
1,332,202
¥640,988
39
641,026
64,357
483,342
¥296,258
34
296,292
39,464
450,846
¥2,024,966
5,086
2,030,052
225,746
2,266,390
¥17,251
27,557
44,807
1,870
78,427
¥2,042,216
32,643
2,074,860
227,616
2,344,817
Depreciation and amortization (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and equipment,
and intangible assets
56,002
8,961
9,506
—
19,340
8,821
84,848
17,782
1,665
266
86,513
18,048
45,020
12,318
450
57,788
17,172
74,961
59,814
18,431
12,186
90,431
1,226
91,657
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.
Sales:
External customers
Intersegment
Total
Operating income
Assets
Other items:
Depreciation and amortization (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and equipment,
and intangible assets
Millions of yen
2017
Material
Homes
Health Care
Subtotal
Others (Note 1)
Total
¥ 977,892
5,687
983,579
88,495
1,268,258
54,188
8,766
35,055
¥618,964
1,761
620,725
64,100
455,242
9,411
—
4,796
¥270,120
34
270,154
31,921
459,251
18,187
8,780
¥1,866,976
7,482
1,874,458
184,516
2,182,752
81,787
17,546
¥16,015
25,682
41,698
2,018
72,199
1,285
260
111
39,962
17,873
52,893
12,139
15,604
80,635
1,149
¥1,882,991
33,165
1,916,156
186,534
2,254,950
83,072
17,806
57,835
81,783
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.
Sales:
External customers
Intersegment
Total
Operating income
Assets
Other items:
Thousands of U.S. dollars
2018
Material
Homes
Health Care
Subtotal
Others (Note 1)
Total
$10,237,365
47,191
10,284,555
1,147,529
12,538,372
$6,032,828
367
6,033,186
605,713
4,549,101
$2,788,311
320
2,788,631
371,426
4,243,256
$19,058,504
47,868
19,106,372
2,124,668
21,330,729
$162,362
259,360
421,713
17,600
738,136
$19,220,856
307,228
19,528,094
2,142,268
22,068,866
Depreciation and amortization (Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and equipment,
and intangible assets
527,078
84,339
89,468
—
182,024
83,021
798,569
167,360
15,671
2,504
814,240
169,864
423,718
115,934
4,235
543,887
161,619
705,515
562,955
173,468
114,692
851,115
11,539
862,654
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.
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(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
2018
¥2,030,052
44,807
(32,643)
¥2,042,216
2017
¥1,874,458
41,698
(33,165)
¥1,882,991
2018
$19,106,372
421,713
(307,228)
$19,220,856
Millions of yen
Thousands of U.S. dollars
2018
¥225,746
1,870
381
(29,522)
¥198,475
2017
¥184,516
2,018
220
(27,525)
¥159,229
2018
$2,124,668
17,600
3,586
(277,854)
$1,868,000
* 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
2018
¥2,266,390
78,427
(512,163)
483,482
¥2,316,137
2017
¥2,182,752
72,199
(476,300)
475,850
¥2,254,500
2018
$21,330,729
738,136
(4,820,358)
4,550,419
$21,798,936
* 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
Other items
2018
2017
2018
2018
2017
2018
2018
2017
2018
2018
2017
2018
Depreciation and amortization
(Note 2)
Amortization of goodwill
Investments in affiliates accounted
for using equity method
Increase in property, plant and
equipment, and intangible assets
¥84,848
17,782
¥81,787
17,546
$798,569
167,360
¥ 1,665
266
¥ 1,285
260
$ 15,671
2,504
¥8,901
—
¥8,315
—
$83,774
—
¥ 95,415
18,048
¥91,387
17,806
$898,024
169,864
57,788
39,962
543,887
17,172
17,873
161,619
—
—
—
74,961
57,835
705,515
90,431
80,635
851,115
1,226
1,149
11,539
9,673
8,790
91,040
101,331
90,573
953,704
Notes: 1. Adjustments include elimination of intersegment transactions and corporate expenses, etc.
2. Amortization of goodwill is not included.
(e) Related information
i) Information on products and services
Please refer to (c) Information concerning net sales, income or loss, assets, and other items for each reportable segment.
ii) Geographic information
1) Net sales
Japan
United
States
2018
China
Other
regions
Millions of yen
Total
Japan
2017
China
United
States
Other
regions
Total
Japan
Thousands of U.S. dollars
2018
China
United
States
Other
regions
Total
¥1,274,548 ¥191,765
¥183,425
¥392,477 ¥2,042,216 ¥1,226,633
¥164,241
¥165,481
¥326,637
¥1,882,991
$11,995,746 $1,804,847
$1,726,353
$3,693,901
$19,220,856
2) Property, plant and equipment.
Millions of yen
2018
Japan
United
States
Other
regions
Total
Japan
¥384,076
¥85,003
¥92,969
¥562,048
¥371,654
2017
United
States
¥86,780
Other
regions
¥98,447
Thousands of U.S. dollars
2018
Total
Japan
United
States
Other
regions
Total
¥556,881
$3,614,833
$800,028
$875,002
$5,289,864
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.
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17. Information on related parties
Related party transactions
(a) Transactions between the company submitting the consolidated financial statements and related parties
i) Unconsolidated subsidiaries, affiliates, etc. of the company submitting the consolidated financial statements
For the year ended March 31, 2018: None
For the year ended March 31, 2017:
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
Amount name
Balance at end of year
An affiliated company
PTT Asahi Chemical Co., Ltd.
Rayong, Thailand
13,819 million Thai baht
Chemicals
50.0% (50.0%)
Debt guarantee and seconded executive
Guarantee for completion of manufacturing facilities
¥10,185 million
—
—
(b) Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties
None
18. Per share information
Basic and diluted net assets per share and net income per share for the years ended March 31, 2018 and 2017, 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)
Yen
2018
¥922.11
121.93
2017
¥824.36
82.34
U.S. dollars
2018
$8.68
1.15
Millions of yen
Thousands of U.S. dollars
2018
¥1,305,214
17,827
(17,827)
¥1,287,387
2017
¥1,168,115
16,771
(16,771)
¥1,151,344
2018
$12,284,367
167,784
(167,784)
$12,116,584
1,396,125
1,396,657
1,396,125
Note: Shares held by the trust for granting shares to Directors, etc., numbering 464 thousand at March 31, 2018, are excluded from the number of shares of capital stock outstanding at fiscal year end used in
calculation of net assets per share.
(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)
Millions of yen
Thousands of U.S. dollars
2018
¥ 170,248
—
¥ 170,248
1,396,322
2017
¥ 115,000
—
¥ 115,000
1,396,715
2018
$1,602,334
—
$1,602,334
1,396,322
Notes: 1. As the Company had no dilutive securities at March 31, 2018 and 2017, the Company does not disclose diluted net income per share for the years ended March 31, 2018 and 2017.
2. Shares held by the trust for granting shares to Directors, etc., numbering 290 thousand during the year ended March 31, 2018, are excluded from the weighted-average number of shares of capital
stock used in calculation of net income per share.
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19. Subsequent events
Business combination
(a) Acquisition of Senseair AB
i) Outline of business combination
1) Name and nature of business of counterparty
Name of acquired company: Senseair AB
Nature of business: Manufacture and sale of NDIR gas sensor modules
2) Main reasons for the acquisition
In addition to joint development through which Senseair’s optical path
design technology and manufacturing know-how for gas sensors is
combined with the small, high-quality IR light emitting elements and
detectors based on the core technology for compound semiconductors
of consolidated subsidiary Asahi Kasei Microdevices Corp., the acquisition
will make it possible for the two companies to more deeply integrate their
technological knowledge and market networks, enabling an expansion
of business activities in the market for air, gas, and alcohol sensors, where
rapid growth is forecasted.
3) Acquisition date
April 4, 2018
4) Statutory form of business combination
Stock purchase for cash as consideration
5) Name of company after transaction
Senseair AB
6) Acquired ownership percentage
Ownership percentage before the acquisition: 8.1%
Additional ownership percentage acquired as of the acquisition date: 91.9%
Ownership percentage after the acquisition: 100%
7) Basic means of materializing the acquisition
Stock purchase for cash as consideration by a consolidated subsidiary
ii) Cost of acquisition and details
Stock purchase price: 0.4 billion Swedish krona (cash)
Purchase price: 0.4 billion Swedish krona
iii) Amount of goodwill, measurement principle, amortization
method, and useful life
Not determined at present
(b) Acquisition of Sage Automotive Interiors, Inc.
An agreement regarding the Company’s acquisition of Sage Automotive
Interiors, Inc. (hereinafter “Sage”), a US-based manufacturer of automotive
interior material, for a cash transaction price of approximately $700 million,
was concluded on July 13, 2018, between the Company and Clearlake
Sage Holdings, LLC, the 100% owner of Sage.
Expected effects of the acquisition include:
• Enhanced access to vehicle manufacturers and Tier-1 suppliers, in order
to swiftly and accurately ascertain trends and needs in the automotive
industry
• Proposal and provision of comprehensive vehicle interior designs
and solutions leveraging Sage’s design and marketing capabilities in
combination with various Asahi Kasei products and technologies such as
fibers, plastics, and sensors
• Utilizing Sage’s sales, manufacturing, and marketing bases as manage-
ment infrastructure and resources for the global expansion of Asahi
Kasei’s operations
The transaction price of approximately $700 million will change
depending on fluctuation of cash and debt balance, working capital,
etc., at the time of closing. The total acquisition price including Sage’s
net interest-bearing debt is $1.06 billion. Closing of the transaction is
conditional upon performing the required procedures in accordance with
each relevant country’s antitrust regulations, and obtaining approval from
the relevant authorities.
Corporate profile of Sage Automotive Interiors, Inc.
Location:
CEO:
Operations:
Greenville, South Carolina, USA
Dirk R. Pieper
Development, manufacture, and sale of fabrics as
automotive interior material
Paid-in capital: $82.5 million (consolidated, as of December 31, 2017)
2009 (spinoff from fiber and chemical manufacturer
Establishment:
Milliken & Company)
Production sites: United States, Italy, Poland, Romania, Brazil, China
Employees:
Ownership:
Three-year trend of assets and sales:
Approximately 2,200 (consolidated, as of March 31, 2018)
100% by Clearlake Sage Holdings, LLC
Total assets ($ million)
Net sales ($ million)
2015
426.8
359.3
2016
474.0
415.6
2017
504.7
474.9
20. Borrowings
(a) Bonds payable at March 31, 2018 and 2017, 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, 2018, are as follows:
Millions of yen
Thousands of U.S. dollars
2018
¥20,000
—
¥20,000
2017
¥20,000
20,000
¥40,000
2018
$188,235
—
$188,235
Year ending March 31
2019
2020
2021
2022
2023
2024 and thereafter
Total
Millions of yen
Thousands of U.S. dollars
¥ —
20,000
—
—
—
—
¥20,000
$ —
188,235
—
—
—
—
$188,235
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(b) Loans payable at March 31, 2018 and 2017, comprised the following:
Short-term loans payable with an interest rate of 0.90%
Current portion of long-term loans payable with an interest rate of 1.56%
Current portion of lease obligations with an interest rate of 1.44%
Long-term loans payable (except portion due within one year) with an interest rate of 1.06%
Lease obligations (except portion due within one year) with an interest rate of 1.48%
Commercial papers (portion due within one year) with an interest rate of (0.02)%
Total
Notes: 1. Interest rates shown are weighted average interest rates for the balance outstanding at March 31, 2018.
Millions of yen
Thousands of U.S. dollars
2018
¥ 58,898
59,120
199
143,176
352
20,000
¥281,746
2017
¥ 88,965
24,510
305
192,584
467
56,000
¥362,832
2018
$ 554,334
556,424
1,873
1,347,539
3,313
188,235
$2,651,727
2. The aggregate annual maturities of long-term loans payable and lease obligations (except portion due within one year) after March 31, 2018, are as follows:
Year ending March 31
2019
2020
2021
2022
2023 and thereafter
Long-term loans payable
Lease obligations
Millions of yen
Thousands of U.S. dollars
Millions of yen
Thousands of U.S. dollars
¥21,794
23,371
28,981
28,043
40,988
$205,120
219,962
272,762
263,934
385,769
¥162
128
54
8
—
$1,525
1,205
508
75
—
21. Supplementary schedule of asset retirement obligations
Because the amounts of asset retirement obligations on April 1, 2017, and March 31, 2018, were not more than 1% of the combined totals of liabilities and
net assets on the respective dates, preparation of a supplementary schedule of asset retirement obligations is omitted in accordance with Article 92-2 of the
Ordinance on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements.
22. Others
Litigation
(a) Litigation related to defibrillator products
On June 18, 2010, Koninklijke Philips Electronics N.V. and Philips Electronics North America Corporation (hereinafter collectively “Philips”) sued ZOLL Medical
Corporation (hereinafter “ZOLL”), a subsidiary of the Company, in the United States District Court for the District of Massachusetts, alleging that several
patents owned by Philips are infringed by certain ZOLL defibrillator products. On July 12, 2010, ZOLL sued Philips in the same court alleging that several
ZOLL patents are infringed by certain Philips defibrillator products. The two cases were consolidated and bifurcated into an initial liability portion and a later
damages portion. The liability portion was tried to a jury in December 2013, and the court entered an interlocutory judgment that ZOLL and Philips each
infringe certain of the other’s patent rights. Following the conclusion of the appeal process relating to the interlocutory judgment, the United States District
Court for the District of Massachusetts began a jury trial for the damages portion on July 24, 2017, and a verdict regarding damages of both parties was
issued on August 3, 2017, with the content shown below. On September 21, 2017, a judgment of first instance was rendered with the same content.
i. Damages to be paid to ZOLL by Philips
ii. Damages to be paid to Philips by ZOLL
US$3.3 million
US$10.4 million
Philips had been seeking damages of US$217 million in this lawsuit.
Subsequently, ZOLL and Philips agreed to settle this litigation and other litigation between them, and a settlement agreement was concluded on
December 21, 2017.
(b) Litigation related to pile installation
On November 28, 2017, Mitsui Fudosan Residential Co., Ltd. filed suit (hereinafter “First Lawsuit”) in the Tokyo District Court against the three companies
of Sumitomo Mitsui Construction Co., Ltd., Hitachi High-Technologies Corporation, and Asahi Kasei Construction Materials Corporation, a subsidiary of
the Company, seeking compensation for damages of approximately ¥45.9 billion (subsequently changed to approximately ¥51.0 billion) related to the
cost of rebuilding a condominium complex in Yokohama City due to concerns of unsound installation of a portion of foundation piles; Sumitomo Mitsui
Construction being the prime contractor for construction of said condominium complex, Hitachi High-Technologies the primary subcontractor for pile
installation, and Asahi Kasei Construction Materials the secondary subcontractor for pile installation. Asahi Kasei Construction Materials holds that there is no
basis for Mitsui Fudosan Residential’s claim, and will make this argument during the proceedings of the First Lawsuit.
Related to the First Lawsuit, on April 27, 2018, Sumitomo Mitsui Construction filed suit (hereinafter “Second Lawsuit”) against Hitachi High-Technologies
and Asahi Kasei Construction Materials seeking compensation for any damages it may incur in the First Lawsuit. Regarding this Second Lawsuit, the date of
service of complaint to Asahi Kasei Construction Materials was May 14, 2018. Asahi Kasei Construction Materials holds that there is no basis for Sumitomo
Mitsui Construction’s claim, and will make this argument during the proceedings of the Second Lawsuit.
Related to the First Lawsuit and Second Lawsuit, on May 25, 2018, Hitachi High-Technologies filed suit (hereinafter “Third Lawsuit”) against Asahi Kasei
Construction Materials seeking compensation for any damages it may incur in the First Lawsuit or Second Lawsuit. Asahi Kasei Construction Materials holds
that there is no basis for Hitachi High-Technologies’s claim, and will make this argument during the proceedings of the Third Lawsuit.
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Major Subsidiaries and Affiliates
(As of April 1, 2018)
Company
Material Segment
Asahi Kasei Fibers Nobeoka Co., Ltd.*
Asahi Kasei Leona Filament Co., Ltd.*
Asahi Cord Co., Ltd.*
Kyokujitsu Textile Mills Co., Ltd.*
DuPont-Asahi Flash Spun Products Co., Ltd.
Asahiozu Corp.
Kyuasa Co., Ltd.*
Fuji Seisen Co., Ltd.*
Merci Co., Ltd.*
Hangzhou Asahikasei Textiles Co., Ltd.*
Hangzhou Asahikasei Spandex Co., Ltd.*
Asahi Kasei Advance (Shanghai) Co., Ltd.*
Formosa Asahi Spandex Co., Ltd.
Thai Asahi Kasei Spandex Co., Ltd.*
Asahi Kasei Advance Thailand Co., Ltd.*
Asahi Kasei Spunbond (Thailand) Co., Ltd.*
Asahi Kasei Spandex Europe GmbH*
Asahi Kasei NS Energy Corp.*
Asahi Kasei New Port Terminal Co., Ltd.*
Asahi Kasei Mitsubishi Chemical Ethylene Corp.
Okayama Butadiene Co., Ltd.
PS Japan Corp.*
Tongsuh Petrochemical Corp., Ltd.*
PTT Asahi Chemical Co., Ltd.
Asahikasei Color Tech Co., Ltd.*
Asahi Kasei Technoplus Co., Ltd.*
Wacker Asahikasei Silicone Co., Ltd.
Kakuichi Rubber Industry Co., Ltd.
Japan Elastomer Co., Ltd.*
Nobeoka Plastic Processing Co., Ltd.*
Asahi Kasei Plastics (Hong Kong) Co., Ltd.*
Asahi Kasei Plastics (Guangzhou) Co., Ltd.*
Asahikasei (Suzhou) Plastics Compound Co., Ltd.
Asahikasei Plastics (Shanghai) Co., Ltd.*
Asahi Kasei POM (Zhangjiagang) Co., Ltd.*
Asahikasei Plastics (Thailand) Co., Ltd.*
Asahi Kasei Plastics Singapore Pte. Ltd.*
Asahi Kasei Synthetic Rubber Singapore Pte. Ltd.*
Asahikasei Plastics (America) Inc.*
Asahi Kasei Plastics North America, Inc.*
Asahi Kasei Plastics Mexico S.A. de C.V.*
Asahi Kasei Epoxy Co., Ltd.*
Asahi Kasei Finechem Co., Ltd.*
Asahi Kasei Metals Ltd.*
Asahi SKB Co., Ltd.*
Asahi Chemitech Co., Ltd.*
ASTOM Corp.
Kayaku Japan Co., Ltd.
Asahi Kasei EMS Co., Ltd.*
Asahi-Schwebel Co., Ltd.*
Asahi Kasei Performance Chemicals Corp.*
* Consolidated subsidiary ** Including capital reserve
Major products/business line
Paid-in capital
(million)
Equity
interest (%)
Production and processing of chemical fibers
Production, packaging, and storage of nylon 66 fiber
Processing of tire cord, etc.
Woven fabrics
Processing and sale of flash spun nonwovens
Processing of nonwovens
Legwear and innerwear
Dyeing and finishing of yarns and fabrics
Sale of linings and interlinings
Warp-knit spandex textiles
Spandex
Processing and sale of fibers and textiles
Spandex
Spandex
Processed yarn
Spunbond nonwovens
Spandex
Electricity and steam
Receiving and storage of fuel and feedstocks
Basic petrochemicals supplied to parent companies
Butadiene
Polystyrene
Acrylonitrile, sodium cyanide, acrylamide, EDTA
Acrylonitrile, methyl methacrylate, etc.
Plastic coloring & compounding
Processed plastic products
Silicone
Processing and sale of natural and synthetic rubber
Synthetic rubber
Plastic compounding
Sale of performance resin
Sale of performance resin
Coloring and compounding of performance resin
Sale of performance resin
Polyacetal
Coloring and compounding of performance resin
Performance resin
Synthetic rubber
Compounded performance resin operations
Coloring and compounding of performance resin
Sale of performance plastic compounds
Epoxy curing agent
Specialty chemicals, contract manufacturing of
pharmaceutical ingredients
Aluminum paste
Explosive devices
Resin anchors
Hydrocarbon ion-exchange membranes and
electrodialysis systems
Industrial explosives
Electronic materials and devices
Glass fabric
HDI-based polyisocyanate, polycarbonatediol
50
11
50
99
450
20
90
50
10
78
154
11
1,003
1,350
134
1,835
¥
¥
¥
¥
¥
¥
¥
¥
¥
CNY
CNY
CNY
NT$
THB
THB
THB
28**
€
10
¥
100
¥
2,000
¥
490
¥
¥
5,000
KRW 237,642
13,819
THB
110
¥
160
¥
1,050
¥
10
¥
1,000
¥
10
¥
2.6
US$
10
CNY
50
CNY
18
CNY
265
CNY
140
THB
46.0
US$
184
US$
18**
US$
22
US$
2
US$
300
¥
325
¥
¥
¥
¥
¥
¥
¥
¥
CNY
250
100
10
450
60
10
50
291
100.0
100.0
100.0
100.0
50.0
50.0
94.0
78.7
100.0
92.5
100.0
100.0
50.0
60.0
100.0
84.3
100.0
61.0
100.0
50.0
50.0
62.1
100.0
50.0
100.0
99.0
50.0
50.0
75.0
100.0
100.0
100.0
51.0
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
45.0
50.0
100.0
100.0
100.0
98
Asahi Kasei Report 2018
Asahi Kasei Report 2018
99
Company
Asahi Kasei Microza (Hangzhou) Co., Ltd.*
Asahi Kasei Electronics Materials (Changshu) Co., Ltd.*
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.*
Asahi Kasei Wah Lee Hi-Tech Corp.*
Asahi-Schwebel (Taiwan) Co., Ltd.*
Asahi Photoproducts (UK) Ltd.*
Asahi Photoproducts (Europe) SA/NV*
Asahi Kasei Pax Corp.*
Asahi Kasei Home Products Corp.*
Sun Plastech Inc.*
Sundic Inc.
Asahi Kasei E-materials Korea Inc.*
Celgard Korea, Ltd.*
Polypore International, LP*
Celgard, LLC*
Daramic, LLC*
Daramic Battery Separator India Pvt. Ltd.*
Daramic S.A.S.*
Daramic (Thailand) Ltd.*
Polypore (Shanghai) Membrane Products Co., Ltd.*
Daramic Tianjin PE Separator Co., Ltd.*
Polypore K.K.*
Daramic Separadores de Baterias Ltda.*
Daramic Xiangyang Battery Separator Co., Ltd.*
Asahi Kasei Electronics Co., Ltd.*
Asahi Kasei Microsystems Co., Ltd.*
Asahi Kasei Microdevices Korea Corp.*
Asahi Kasei Microdevices (Shanghai) Co., Ltd.*
Asahi Kasei Microdevices Europe GmbH*
AKM Semiconductor, Inc.*
AKM Technology Corp.*
Major products/business line
Industrial filtration membranes and systems
Photosensitive dry film
Photosensitive dry film
Photosensitive dry film
Glass fabric
Sale of photopolymer, printing-plate making systems
Sale of photopolymer, printing-plate making systems
Packaging products and solutions
Cling film, other household products
Sale of purging compound
Biaxially oriented polystyrene sheet
Lithium-ion battery separator
Lithium-ion battery separator
Battery separators
Lithium-ion battery separator
Lead-acid battery separator
Lead-acid battery separator
Lead-acid battery separator
Lead-acid battery separator
Lithium-ion battery separator
Lead-acid battery separator
Lithium-ion and lead-acid battery separator
Lead-acid battery separator
Lead-acid battery separator
Hall elements
LSIs
Electronic devices marketing and technical support
Electronic devices marketing and technical support
Electronic devices marketing and technical support
Sale of LSIs
Design of LSIs
2,233
Paid-in capital
(million)
70
CNY
306
CNY
181
CNY
49
NT$
326
NT$
0.3
£
3
€
490
¥
250
¥
1
US$
¥
1,500
KRW 18,900
KRW 26,200**
US$
US$
US$
Rs
€
THB
CNY
CNY
¥
BRL
CNY
¥
¥
KRW
CNY
€
US$
¥
22**
12**
463.3**
73**
2,317**
10**
75**
16**
0.3
97
50
50
820
13.7
0.4
2.9
30
Homes Segment
Asahi Kasei Jyuko Co., Ltd.*
Asahi Kasei Home Construction Corp.*
Asahi Kasei Chintai Support Corp.*
Asahi Kasei Fudousan Community Corp.*
Asahi Kasei Realty & Residence Corp.*
Asahi Kasei Reform Co., Ltd.*
Asahi Kasei Remodeling Corp.*
Asahi Kasei Homes Financial Corp.*
Asahi Kasei Lifeline Corp.*
Asahi Kasei Sekkei Corp.*
AJEX Corp.*
AR Construction Corp.*
Asahi Kasei Jyuko Vietnam Corp.*
McDonald Jones Homes Pty Ltd
Asahi Kasei Foundation Systems Corp.*
Asahi Kasei Extech Corp.*
Iwakuni Sun Products Co., Ltd.*
Sakai Kako Co., Ltd.*
Hozumi Kako Co., Ltd.*
* Consolidated subsidiary ** Including capital reserve
Steel frames
Construction of homes
Rental home agency
Condominium management
Real estate development, brokerage, and
related business
Home maintenance and remodeling
Remodeling and maintenance work
Financial services
Plumbing and wiring work
Building design and supervision
External work
Remodeling work
Steel-frame members
Contracted home construction and
marketing of parceled lots
Installation of piles
Exterior wall panel installation
Construction materials processing
Construction materials processing
Construction materials processing
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
US$
AU$
¥
¥
¥
¥
¥
2,820
100
50
200
3,200
250
250
1,000
100
30
100
100
16.8
60.0
200
50
30
10
10
Equity
interest (%)
100.0
100.0
100.0
80.6
51.0
100.0
100.0
100.0
100.0
100.0
50.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
65.0
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
80.4
40.0
100.0
100.0
100.0
100.0
100.0
98
Asahi Kasei Report 2018
Asahi Kasei Report 2018
99
Major products/business line
Paid-in capital
(million)
Equity
interest (%)
Medical devices, bioprocess products
Medical devices
Hemodialyzers; sale of medical devices
Medical devices
Sale of medical devices, medical systems
Bioprocess equipment and systems
Sale of medical devices, medical systems
Sale of virus removal filters
Clinical trials for new drugs
Acute critical care devices and systems
Holding company for wearable defibrillator business
IT solutions for acute critical care
Intravascular temperature management systems
¥
10
¥
140
CNY
165
30.6
CNY
KRW 1,000
30
US$
18
€
0.5
€
US$
122**
US$
US$
US$
US$
1,723
10
1
23
Sale of Asahi Kasei products
Employment agency, consulting
Plant, equipment, process engineering
Real estate rental
IT-related business
Company housing, recreational facilities
Electrical, IT, and control engineering
Synthetic resin, fabricated plastic products
Printing, bookbinding, and office work
Insurance agency, cellular phone sales, bowling alley
Information and analysis
Cable TV
Travel agency
Machinery installation
Environmental measurement and verification
Computer software, IT systems
Investment and business support services
Business support services
Development of aluminum nitride
substrates and UVC LEDs
Business support services
Business support services, sale of performance resin
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
¥
CNY
Rs
US$
US$
€
500
80
400
160
400
20
100
5,000
40
30
1,000
414
30
100
20
800
2,214
45
44**
0.1
16**
100.0
100.0
100.0
100.0
100.0
84.8
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
30.6
100.0
100.0
100.0
50.0
34.0
100.0
100.0
49.0
100.0
100.0
100.0
Major Subsidiaries and Affiliates
Company
Health Care Segment
Asahi Kasei Medical MT Corp.*
Med-Tech Inc.*
Asahi Kasei Medical (Hangzhou) Co., Ltd.*
GLT Medical Co., Ltd.
Asahi Kasei Medical Trading (Korea) Co., Ltd.*
Asahi Kasei Bioprocess America, Inc.*
Asahi Kasei Medical Europe GmbH*
Asahi Kasei Bioprocess Europe SA/NV*
Asahi Kasei Pharma America Corp.*
ZOLL Medical Corporation*
ZOLL LifeVest Holdings LLC*
ZOLL Data Systems, Inc.*
ZOLL Circulation, Inc.*
Others
Asahi Kasei Advance Corp.*
Asahi Kasei Amidas Co., Ltd.*
Asahi Kasei Engineering Corp.*
Asahi Kasei Office One Co., Ltd.*
Asahi Kasei Networks Corp.
Asahi Kasei Benefits Management Corp.*
Asahi Kasei EIC Solutions Corp.
Asahi Yukizai Corp.
Asahi Kasei Ability Corp.
New Asahi Services Co., Ltd.*
Asahi Research Center Co., Ltd.*
Cable Media Waiwai Co., Ltd.*
ELORTO Corp.
Koyo Machinery Works Co., Ltd.*
Toyo Kensa Center Co., Ltd.
AJS Inc.
Asahi Kasei (China) Co., Ltd.*
Asahi Kasei India Pvt. Ltd.
Crystal IS, Inc.*
Asahi Kasei America, Inc.*
Asahi Kasei Europe GmbH*
* Consolidated subsidiary ** Including capital reserve
100
Asahi Kasei Report 2018
Company Information/Investors Information
(as of March 31, 2018)
■ Corporate Profile
Asahi Kasei IR Website
Company Name
Asahi Kasei Corporation
Date of Establishment
May 21, 1931
Paid-in Capital
¥103,389 million
Employees
34,670 (consolidated)
7,520 (non-consolidated)
■ Asahi Kasei Group Offices (as of September 1, 2018)
Asahi Kasei Corporation
Tokyo Head Office
Asahi Kasei’s financial results and other materials
for investors are available in our IR website.
www.asahi-kasei.co.jp/asahi/en/ir
Core Operating Companies
Asahi Kasei Microdevices
Hibiya Mitsui Tower
1-1-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006 Japan
Phone: +81-(0)3-6699-3000 Fax: +81-(0)3-6699-3161
Hibiya Mitsui Tower
1-1-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006 Japan
Phone: +81-(0)3-6699-3933
Asahi Kasei (China) Co., Ltd.
Asahi Kasei Homes
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
1-24-1 Nishi-shinjuku, Shinjuku-ku, Tokyo 160-8345 Japan
Phone: +81-(0)3-3344-7111
From January 2019:
1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan
Asahi Kasei Construction Materials
1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan
Phone: +81-(0)3-3296-3500
Asahi Kasei Pharma
Hibiya Mitsui Tower
1-1-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006 Japan
Phone: +81-(0)3-6699-3600
Asahi Kasei Europe GmbH
Asahi Kasei Medical
Am Seestern 4, 40547 Düsseldorf, Germany
Phone: +49-211-8822-030 Fax: +49-211-8822-0333
Asahi Kasei India Pvt. Ltd.
The Capital 1502B, Plot C-70, G-Block,
Bandra Kurla Complex, Bandra (East), Mumbai 400051 India
Phone: +91-22-6710-3962
Hibiya Mitsui Tower
1-1-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006 Japan
Phone: +81-(0)3-6699-3750
ZOLL Medical Corporation
269 Mill Rd., Chelmsford, MA 01824-4105 USA
Phone: +1-978-421-9655
■ Investors Information
Stock Listing
Stock Code
Authorized Shares
Outstanding Shares
Transfer Agent
Independent Auditors
Number of Shareholders
Tokyo
3407
4,000,000,000
1,402,616,332
Sumitomo Mitsui Trust Bank, Ltd.
PricewaterhouseCoopers Aarata LLC
85,302
Largest Shareholders
JP Morgan Chase Bank 380055
The Master Trust Bank of Japan, Ltd. (trust account)
Japan Trustee Services Bank, Ltd. (trust account)
Nippon Life Insurance Company
Sumitomo Mitsui Banking Corp.
Asahi Kasei Group Employee Stockholding Assn.
Japan Trustee Services Bank, Ltd. (trust account 9)
Japan Trustee Services Bank, Ltd. (trust account 5)
State Street Bank West Client – Treaty 505234
State Street Bank and Trust Company
* Percentage of equity ownership after exclusion of treasury stock.
% of equity*
9.05
5.69
4.37
4.18
2.54
2.33
1.82
1.79
1.71
1.56
Asahi Kasei Report 2018
101
Hibiya Mitsui Tower
1-1-2 Yurakucho, Chiyoda-ku, Tokyo 100-0006 Japan
www.asahi-kasei.co.jp/asahi/en/
Corporate Communications
Tel: +81-(0)3-6699-3008, Fax: +81-(0)3-6699-3187
Printed in Japan
2018.10