Annual Report 2017 PDF

Asahi Kasei Report 2017
Group Mission We, the Asahi Kasei Group,

contribute to life and living for people
around the world.
Group Providing new value to society by enabling “living in health and

Vision comfort” and “harmony with the natural environment.”
Sincerity—Being sincere with everyone.

Group
Values
Challenge—Boldly taking challenges, continuously seeking change.
Creativity—Creating new value through unity and synergy.
Group
Slogan Creating for Tomorrow
Editorial policy Organizational scope

For greater ease of understanding among our stakeholders, since fiscal The scope of the report is Asahi Kasei Corp. and its consolidated subsidiar-
2014 we are integrating information regarding our business strategy and ies, except with respect to Responsible Care, in which case the scope is
financial performance, which had been published in our Annual Report, operations in Japan that implement the Asahi Kasei Group’s Responsible
with information regarding our CSR activities, which had been published Care program. Asahi Kasei’s three operating segments are Material, Homes,
in our CSR Report, in a single Asahi Kasei Report. We hope that the Asahi and Health Care. Unless otherwise specified, the titles and positions of
Kasei Report will help you gain a clear perception of the Asahi Kasei Group’s corporate officers and other personnel as shown in this report are current
efforts toward sustainability in society in addition to our management as of October 2017.
strategy, business conditions, and management configuration.
Guidelines consulted
Period under review The Global Reporting Initiative’s Sustainability Reporting Guidelines G4,
The period under review is fiscal 2016 (April 2016 to March 2017). Some ISO 26000, and other guidelines were consulted during the preparation of
qualitative information pertaining to April to September 2017 has also this report.
been included.
Disclaimer
In this report, the TM symbol indicates a trademark or registered trademark The forecasts and estimates shown in this report are dependent on a variety of
of Asahi Kasei Corporation, affiliated companies, or third parties granting assumptions and economic conditions. Plans and figures depicting the future
rights to Asahi Kasei Corporation or affiliated companies. do not imply a guarantee of actual outcome.
Contents 2 Message from the President
Management Overview
14 Interview with the CFO
16 History of Providing Solutions for the Challenges of Society
18 Feature 1: P
rocess of Creating Value in the Asahi Kasei Group
20 Feature 2: V
alue Provided by the Asahi Kasei Group
24 Directors
26 Corporate Governance
30 Specific Measures to Heighten Compliance
33 Feature 3: Global Executives Interviews
Review of Operations
38 Financial and Non-Financial Highlights
40 At a Glance
42 Material
44 Homes
46 Health Care
48 Feature 4: Research & Development
CSR
52 CSR
54 CSR Fundamentals
• Responsible Care
• Respect for Employee Individuality
• Corporate Citizenship
Financial Section
64 Management’s Discussion and Analysis
70 Risk Analysis
72 Consolidated Financial Statements
Corporate Information
104 Major Subsidiaries and Affiliates
107 Company Information
107 Investors Information
Asahi Kasei Report 2017 1

Message from the President
We, the Asahi Kasei Group, contribute to life and living

for people around the world.
“Improve human culture.” These words of Shitagau Noguchi, the founder of Asahi Kasei, manifested the
company’s mission of meeting shortages of daily necessities at the time our business began nearly a
century ago. Ever since then, we have continuously adapted to meet the changing needs of the times,
with business in fields ranging from fibers and chemicals to homes, health care, and electronic devices.
Though the content of our operations has evolved, our aspiration to help the people of the world enjoy
a better life remains unchanged. Our current Group Mission is to contribute to life and living for people
around the world, and we operate in accordance with our Group Vision of providing new value to society
by enabling “living in health and comfort” and “harmony with the natural environment.”
The world around us is dramatically different than it was a century ago. We now have many chal-
lenges to be solved as indicated by the Sustainable Development Goals (SDGs) adopted by the United
Nations in 2015. Our aim is to contribute to society’s solutions to such challenges by leveraging the
strengths we gain by having an unparalleled diversity of business operations, technologies, and human
resources. In doing so, we will provide value to the world in a way that only Asahi Kasei can.
We are now advancing our medium-term management initiative “Cs for Tomorrow 2018” that aims
to provide solutions to two important challenges faced by society for “clean environmental energy”
and “healthy/comfortable longevity with peace of mind.” Our management environment has changed
significantly in just the past year, including heightened environmental awareness as evinced by the Paris
Accord taking effect and the spread of electric vehicles, changing global market frameworks, and the
rapid advance of new technologies for IoT, AI, etc. Nevertheless, we see no need to change our basic con-
cept. While the importance of the two challenges faced by society remains unchanged, there is a greater
urgency for us to build connections among our diverse businesses and diverse human resources as we
build the base for the next phase. In fiscal 2016, the first year of Cs for Tomorrow 2018, the realignment of
our business sectors proceeded smoothly and we achieved solid business performance. We will further
accelerate the execution of Cs for Tomorrow 2018 as we work to create a portfolio of high-profitability
and high value-added businesses in fiscal 2025.
The Asahi Kasei Report 2017 showcases our proactive efforts under Cs for Tomorrow 2018 to
“contribute to life and living for people around the world,” as illustrated in special features such as “Value
Provided by the Asahi Kasei Group” and “Global Executives Interviews.” I hope this report will help you
gain a greater understanding of Asahi Kasei.
September 2017
Hideki Kobori
President
2 Asahi Kasei Report 2017

Performance in fiscal 2016 exceeding our original forecast

During fiscal 2016, the outlook for the global economy remained obscure with increased political
uncertainty related to the withdrawal of the UK from the EU and increased concern regarding the
economic policy of the new US administration, as well as concern of economic slowdown in emerg-
ing economies. Meanwhile, the Japanese economy continued on a path of gradual recovery with
strong corporate performance while consumer spending became firm as the employment situation
and income environment improved.
With our transformation to an operating holding company configuration in fiscal 2016, we
reconfigured our operations into the three business sectors of Material, Homes, and Health Care.
Thanks to careful preparation, the transition went smoothly. While our performance was generally
firm, net sales, operating income, and ordinary income each declined from the previous year due
to the impact of the strong yen, decreased pharmaceutical reimbursement prices, and full-year
amortization of goodwill associated with our acquisition of Polypore International. Operating income
was nevertheless the second highest ever and net income attributable to owners of the parent (net
income) reached a new record high with gain on sale of investment securities and decreased income
taxes. Owing to exceptional efforts in each business to expand sales expansion and reduce costs,
operating income, ordinary income, and net income all exceeded our original expectations. All in
all, fiscal 2016 was a good step forward as the first year of our Cs for Tomorrow 2018 medium-term
management initiative.
Forecasting higher shipment volumes in each business, we expect fiscal 2017 results to further
improve with net sales reaching ¥1.99 trillion and operating income reaching ¥165 billion.

The first year of our Cs for Tomorrow 2018
medium-term management initiative saw steady
progress. Net income reached a new record high.
In addition to transitioning to an operating holding company configuration and realigning our business
sectors in fiscal 2016, we also took several actions to enhance connections such as reconfiguring our R&D
organization, launching Asahi Kasei Europe, and establishing our Automotive Marketing Department.
To heighten awareness for compliance we established a Risk Management & Compliance Committee.
FY2018 Target FY2025 Outlook
Net sales and operating income Net sales ¥2.2 trillion Net sales ¥3.0 trillion
¥180.0 billion 280.0 billion
Operating Operating
Net sales (left scale) income income ¥
Operating income (right scale)
(¥ billion) (¥ billion)
3,500 FY2016 Result FY2017 Forecast 350
3,000 Net sales ¥1.9 trillion Net sales ¥2.0 trillion 300
¥159.2 billion ¥165.0 billion

Operating Operating
2,500 income income 250
2,000 200
1,500 150
1,000 100
500 50
0 0
'11 '12 '13 '14 '15 '16 '17 '18 '25 (FY)
* Formulated assuming exchange rates of ¥110/$ and ¥120/€

Long-term investments
During the five-year period of the previous medium-term management initiative “For Tomorrow
2015,” we adopted decisions on ¥1 trillion of long-term investment to strengthen our existing
businesses and create new businesses for the future, including large-scale acquisitions of ZOLL and
Polypore. Cs for Tomorrow 2018 provides for some ¥700 billion in long-term investments over the
three-year period.
Decisions were adopted for about ¥150 billion of investment in fiscal 2016. In the Material sector,
these included an expansion of production capacity for HiporeTM lithium-ion battery (LIB) separator,
construction of an R&D facility for new composite materials such as cellulose nanobeads and cellulose
nanofiber, and the establishment of joint ventures for engineering resin with China National Bluestar
(Group) Co., Ltd. In the Homes sector, these included forming capital alliances with Mori-Gumi Co.,
Ltd., and Chuo Build Industry Co., Ltd., and establishment of a new production base for steel-frame
members. In the Health Care sector, decisions were adopted to augment the product pipeline.
In fiscal 2017, investments in the Material sector are mainly planned in the environment/energy,
automotive, and healthcare/hygiene fields. Investments planned in the Homes sector are focused
on alliances to extend business outside Japan. Investments in the Health Care sector are planned to
accelerate globalization and to reinforce manufacturing facilities. Overall investments are projected
to be some ¥200 billion, exceeding the level of fiscal 2016.
We will also continue to study M&A in all three sectors of Material, Homes, and Health Care, focus-
ing on proactive investments in accordance with our growth strategy. We are not only considering
large acquisitions on the scale of ZOLL or Polypore, but also medium or small-scale acquisitions if
they would further strengthen our established businesses or bring new prospects for future business
growth.
Long-term investment expenditures
FY2016
Approx. ¥150 billion
¥700 billion
over
3-year period
FY2017 (planned)
Approx. ¥200 billion

Growth in each sector
Material
With the environment/energy, automotive, and healthcare/hygiene designated as areas of focus,
we executed several actions for each of them in fiscal 2016.
● Expanded supply capacity of lithium-ion battery (LIB) separator

Environment/energy ● Advanced verification of DRC process for DPC*
● Reinforced business configuration (the US and Vietnam)

Automotive ● Expanded capacity for S-SBR for fuel-efficient tires (Singapore)
● Expanded capacity for filament for airbags
● Expanded capacity for nonwoven fabric for facial masks

Healthcare/hygiene ● Expanded capacity for spunbond for diapers
● Started sales of UVC LEDs for disinfection
* A process for polycarbonate intermediate without using phosgene (poisonous gas) and not requiring ethylene oxide as feedstock.
In the field of the environment/energy, decisions were made to expand production capacity for
HiporeTM wet-process LIB separator at two lines in Moriyama, Shiga, Japan. While demand for
separators remains stable in consumer electronics applications, demand in automotive applica-
tions is projected to grow by some 30% per year. Having both HiporeTM wet-process separator
and CelgardTM dry-process separator enables us to meet a wide range of market requirements
in automotive applications. We are planning to raise capacity for wet-process separator to 610
million m2/year in the first half of fiscal 2019, when electric vehicle (EV) demand is projected to
ramp up. After acquiring Polypore in 2015, we also raised production capacity for dry-process
separator in the US—capacity is now 250 million m2/year. Combining both wet process and dry
process, we plan to raise our total LIB separator capacity to 1.1 billion m2/year in 2020, solidifying
our position as the world’s leader with reliable supply of high-quality products.
In the automotive field, our Automotive Marketing Department is taking the lead in sector-
wide marketing activity to build strategic relationships with vehicle manufacturers and their
suppliers. In May 2017 we unveiled our first concept car, AKXYTM (more information on page 12).
We are leveraging this drivable car to create new opportunities to communicate with people in
the industry about the future of the automobile.
In the healthcare/hygiene field, we are developing new markets for materials for pharmaceu-
ticals and medical devices. We also established Healthcare Material Business Development as a
dedicated organization for new business creation.

Homes
We enhanced our homes business in the three areas of medium-rise homes, overseas business,
and homes for seniors. For construction materials, in the environment/energy field, we announced
the development and sale of Neoma ZeusTM which features world-leading insulation performance.
In the area of medium-rise homes, we enhanced our condominium business by incorporat-
ing the expertise of Mori-Gumi Co., Ltd., through a business and capital alliance, and started sale
of the Hebel BuildingTM System which employs higher quality and higher precision construction
of medium-rise homes by systematic manufacturing. In addition, we enriched the product lineup
to meet various needs in urban areas such as buildings that integrate homes with rental units or
shops. Regarding homes for seniors, we offer Hebel VillageTM apartment buildings with features
designed for active seniors who are able to live independently. For overseas operations, we
completed our first project, a condominium in Zhonghe, New Taipei, Taiwan.
We will continue to advance measures to further strengthen our businesses with comprehen-
sive products, construction, and services, and to expand the breadth of our value chain.
Health Care
We are growing the Health Care sector to be the third major pillar of the Asahi Kasei Group after
Material and Homes.
For pharmaceuticals, we reinforced our lineup in the field of orthopedics with the launch of
Reclast® osteoporosis drug which is administered once per year. To accelerate global expansion,
we are advancing a global clinical study of RecomodulinTM anticoagulant.
For medical devices, we expanded capacity in Oita, Japan, for PlanovaTM BioEX virus removal
filters used in the manufacture of biotherapeutics.
Critical care continues to be the driver of growth for the Health Care sector, with ZOLL
averaging 15% annual growth since we acquired it in 2012 and operating income turning
positive three years later even after amortization of goodwill. The LifeVestTM wearable defibrillator,
our flagship product, is gaining market penetration in Germany, France, and Japan, in addition
to its main market in the US. We are working to expand indications for the Thermogard SystemTM
intravascular temperature management system to include acute myocardial infarction, and aim-
ing for market leadership in the automated external defibrillator (AED) market with the launch of
our new AED3TM product. We will continue to expand our range of operations in the field of acute
critical care, including through proactive acquisitions to augment the product lineup.
For the Health Care sector overall, we are investing to expand business in North America
using our CVC (Corporate Venture Capital) Office in Boston, Massachusetts. Additionally, we
periodically hold meetings of our Health Care Council consisting of members from Asahi Kasei
Corp., Asahi Kasei Pharma, Asahi Kasei Medical, and ZOLL to discuss marketing activities and other
matters of strategy to expand the sector.

Creating new businesses in the Material sector
Our transition to an operating holding company configuration enhanced connections among
technologies and human resources, enabling the acceleration of new business creation.
One area is new business creation connecting fiber, resin, and processing technology. For
example, we are developing a new kind of textile composite in a process where polyamide (PA) 66
fiber and continuous glass fiber (GF) are commingled into a yarn which is woven to form the base
material for molding, which is followed by injection of PA66 resin in a hybrid molding process. This
provides a high degree of flexibility in design together with outstanding strength. Such attributes
make this a promising material as a weight-saving substitute for metal in automotive structural
parts. Another example is cellulose nanofiber (CNF) composite being developed for automotive
applications by combining cellulose with synthetic resin. Unlike carbon fiber composite, this material
is made with thermoplastic which enables separation and recyclability for reduced environmental
burden. Combining the knowledge on cellulose gained through the BembergTM business of fibers
and textiles with the polymer composition and processing technology gained in the chemicals busi-
ness, CNF composite is an outstanding illustration of how connections between different businesses
can lead to new developments.
Another area of new business is the UVC LED, developed by connecting internal technology with
outside resources. The UVC LED combines technology for high-quality single-crystal AlN (aluminum
nitride) substrate developed by Crystal IS, Inc., which became our subsidiary in 2011 after an initial
CVC investment, with the compound semiconductor technology built up through our electronics
business. Featuring high sterilization efficiency, small size, and low power consumption, the KlaranTM
UVC LED product commercialized in May 2016 is gaining attention as a safer and more environmen-
tally friendly substitute for mercury lamps as a UV light source.
The last one is the development of an alkaline water electrolysis system. This system developed
under consignment from the New Energy and Industrial Technology Development Organization
(NEDO) produces hydrogen from renewable energy at low cost. A large-scale validation electrolyzer
installed in Yokohama, Japan, has operated for over 10,000 hours to demonstrate the stability of
the process. With a world-leading energy conversion efficiency into hydrogen of 90%, it is able to
produce 2,000 m3 of hydrogen per hour consuming just 10,000 kW of electricity under ordinary tem-
perature and ordinary pressure. This is the same amount of hydrogen that a fuel cell vehicle would
consume over a two-year period. The hydrogen can also be reacted with CO2 to produce methanol
or methane for use as green fuel. We now plan to install a demonstration plant for this system in
Germany, which is phasing out nuclear power by 2022.
Acceleration of globalization
The basic policy for globalization under the Cs for Tomorrow 2018 medium-term management initia-
tive is to focus on strategies suited to each region.
The region of Asia is positioned not only as a manufacturing base but also as a growth market.
We are proactively developing our businesses premised on production and consumption within the
region. Notable actions include:
● Establishment of joint ventures for XyronTM modified polyphenylene ether (China)
● Start of photopolymers plant (China)
● Capacity expansion of S-SBR for fuel-efficient tires (Singapore)
● Capacity expansion of spunbond nonwovens for diaper applications (Thailand)
● Sale of condominiums (Taiwan)

North America is positioned as a region of continuing growth and the origin of innovation. We
are working to expand automotive and healthcare-related businesses, and to acquire leading-edge
technologies through CVC. Notable actions include:
● Reinforcing our CVC activities in the environment, energy, and healthcare fields
● Advancing clinical testing of RecomodulinTM anticoagulant
● Business expansion for LifeVestTM wearable defibrillator
● Reinforcing the separator business
● Operation of second plant for plastic compounds
Europe is positioned as the origin of environmental standards and regulations. We are working
to expand through reinforced marketing activities centered on automotive-related business. Notable
actions include:
● Launch of an Engineering Plastics Technical Center
● Advancing the alkaline water electrolysis development project
● Start of Asahi Kasei Europe GmbH
Building the base for sustainable growth

Cs for Tomorrow 2018 is directed toward the establishment of a portfolio of high-profitability and
high value-added businesses in fiscal 2025, with the three-year period from fiscal 2016 to 2018
focused on building the base for the next phase.
(1) Obtaining thorough compliance

Following the disclosure of data irregularities regarding the installation of precast concrete piles in
October 2015, our subsidiary Asahi Kasei Construction Materials Corp. is taking measures to prevent
recurrence by renewing its management system, performing training of site agents, and disseminat-
ing compliance policy.
We also established Risk Management & Compliance in January 2016 as the central hub to aggre-
gate all risk management and compliance-related information. We integrated our Risk Management
Committee and Corporate Ethics Committee into a newly established Risk Management &
Compliance Committee chaired by the President of Asahi Kasei Corp. to monitor the compliance
system and identify risks throughout the Asahi Kasei Group.
Through such actions, we are further strengthening our compliance system and implementing
thorough measures based on the “three actuals” of the actual place, the actual thing, and the actual
fact, reinforcing our foundations as a company that society can continue to trust and rely on.
Top down Enacting compliance policy; thorough identification

(management perspective) of risks from birds-eye view (continuous)
● Preparing and applying Asahi Kasei Group Code of Conduct
● Heightening awareness for risk management and compliance through organizational lines
● Enhancing organization (establishment of Risk Management & Compliance Committee)
Thorough compliance
The “three actuals” of actual place, actual thing, and actual fact
● Reinspection for latent risks in each business
● Assigning priority to risks
● Studying and implementing countermeasures in accordance with priority
Bottom up Inspection for risks;

(on-site perspective) implementation of measures (continuous)

(2) Laying the foundation to heighten business activities
We will utilize IT to achieve dramatic improvements in the productivity of our manufacturing
and production processes. We have selected model plants and are now beginning trials of actual
application to incorporate new technologies such as IoT and Big Data. We are also utilizing IT to
deliver high added value in the businesses themselves. The LifeVestTM and plant diagnostics are key
examples of businesses that utilize ICT (information and communication technology)—the latter
based on technology refined for over 40 years and recently launched as a remote diagnostic service
to monitor vibrations for diagnosis of the condition of plants and transportation equipment. We
are also strengthening our IT infrastructure for enhanced tools and databases that support business
operations, and we continue to reinforce cybersecurity.
(3) Linkage between management strategy and HR strategy

We are working to create value by leveraging our diversified business platforms and diverse human
resources, and the key is human resources. In order to develop a group of high value-added person-
nel, we will foster and strengthen our personnel and organizations.
Diverse human resources
Vitality and growth of personnel and organizations

● Group of high value-added personnel
● Mechanisms for growth in daily work
● Satisfaction and fulfillment by each employee
Unity and linkage between management strategy

and HR strategy
Business growth
Actualizing vision
Diversified business platforms
We will maintain thorough compliance, heightened business activity, and strengthened linkage
between HR strategy and long-term growth strategy as the base of operations. Building on these, we
will advance our basic strategies of “pursuit of growth and profitability,” “creation of new businesses,”
and “acceleration of globalization,” contributing to a “society of clean environmental energy” and a
“society of healthy/comfortable longevity with peace of mind.”

Drivable concept car AKXYTM

In May 2017 we unveiled our first concept car, developed jointly with electric vehicle
manufacturer GLM Co., Ltd., to showcase our capabilities in the automotive field. It is a
drivable car featuring 27 automotive solutions from Asahi Kasei. AKXYTM will help us to
actively promote our automotive-related products and technologies as we advance construc-
tive discussions with vehicle manufacturers and their suppliers about the future of the car.
Creating the future of automobiles together with customers

The automotive industry is undergoing dramatic changes, with trends for more diverse automobile
usage as well as the move toward electric drive. Asahi Kasei has a long track record of supplying vari-
ous products to the automotive industry, including fibers, chemicals, devices, and battery materials.
Now we must move beyond being just a supplier of materials. We need to be able to contribute
more fully to the automotive supply chain. By leveraging our comprehensive strengths in products,
technology, and quality, we can work together with customers in the automotive industry to create
new value for the future. We are now working to reinforce the presence of our Material sector in the
automotive industry in accordance with this objective.
The AKXYTM concept car was created to represent our aspiration to work more closely with
automotive customers, contributing to the greater safety, comfort, and environmental performance
of vehicles of the future. We partnered with GLM to leverage their electric vehicle platform in the
development of a drivable concept car equipped with a wide range of Asahi Kasei components and
systems. GLM is a young company full of energy and new ideas. They are highly oriented toward the
future, and it was very stimulating to work with them.
By having vehicle manufacturers and their suppliers experience AKXYTM, we can deepen relation-
ships with customers in the automotive industry and open the door to their adoption of many of our
leading-edge products moving forward.
To be a material concierge that

Tsuneyoshi Tatsuoka
can provide automotive solutions Outside Director
It was very ambitious of Asahi Kasei, a material manufacturer, to create

a drivable concept car. The three broad trends in the automotive
industry today are weight reduction by substituting plastic for metal,
diversification of motive power sources with the rise of electric and
fuel-cell vehicles, and intensified application of electronic and control
systems throughout the vehicle. How can a material manufacturer adapt to these trends? The
company would need to enhance its ability to provide one-stop solutions through technical sales
as well as to be a development partner having connections with vehicle manufacturers and their
suppliers. Asahi Kasei is exceptional among Japanese material manufacturers in that it has a wide
variety of products including electronic devices such as sensors. Although it gives the company
many potential opportunities, this alone is not enough to ensure success in global competition. I see
the creation of AKXYTM as an indication of the company’s keen awareness of the need for further R&D
and applications development for automotive-related products.

Origin of the name and logo
Deriving from Asahi Kasei X (multiplied by)
You (the customer), the name indicates our
intention to create new value for the future 1. Head lamp cover Organic/inorganic hybrid coating agent 6. Body paint raw material Asahi Kasei Aluminium PasteTM
together with the automotive industry. The 2. Lamp extension XyronTM modified polyphenylene ether 7. B ody paint additive DuranateTM HDI (hexamethylene
blue flame motif represents the transition to 3. Tire raw material TufdeneTM solution-polymerized diisocyanate)-based polyisocyanate
styrene butadiene rubber 8. Tail lamp cover DelpetTM polymethyl methacrylate
complete combustion, indicating our full-
4. Tire cord LeonaTM nylon 66 filament yarn
fledged effort beyond mere passion, which 5. Fender liner P reciseTM spunbond synthetic
would be represented by red. continuous-filament nonwoven
Cockpit 16. A-pillar T uftecTM hydrogenated styrenic 19. Connector/cable tie LeonaTM polyamide resin
9. WGFTM film base reflective polarizer thermoplastic elastomer 20. Speaker cover EsterlloyTM ABS-based alloy resin
10. Defroster sensor 17. Interior decoration Multicore POFTM plastic optical fiber 21. Seat surface CubitTM 3D knitting fabric
Systems 18. Floor mat F loor mat with polytrimethylene 22. Headrest MEFTM moldable polyethylene foam
11. Vital-sign sensing technology terephthalate fiber 23. Seat skin LamousTM microfiber artificial suede
12. Stand-alone voice command 24. Seat skin lining EltasTM spunbond synthetic
13. Hands-free communication continuous-filament nonwoven
14. In-car communication 25. Inside door handle TenacTM metallic-colored & low-
15. CO2 sensor VOC grade polyacetal resin
26. Cup holders SunForceTM modified polyphenylene
ether foam beads
27. LIB separator HiporeTM lithium-ion battery separator

Interview with the CFO
Executing strategies aimed

at future growth to increase
our corporate value; promoting
proactive investments for growth
and a robust capital policy
Shuichi Sakamoto
Director
Senior Executive Officer
Q What is your basic financial strategy?
We are focused on consistent generation of cash flow, with an appropriate balance between
A investment for growth and shareholder returns.
The Asahi Kasei Group aims to consistently expand cash flow Under our “Cs for Tomorrow 2018” (CT2018) management
in two basic ways. One is by enhancing profitability through initiative, we will generate cash flow not only by implementing
enhanced product performance, greater cost competitiveness, three basic strategies of “pursuit of growth and profitability,”
and business structure improvement, and the other is by “creation of new businesses,” and “acceleration of globaliza-
improving capital efficiency through intragroup financing and tion,” and by further raising competitiveness of established
appropriate control of inventory levels. To obtain stable and businesses, but also by creating new added value in each
low-cost financing, we employ various fund-raising methods sector. Cash flow generated through these efforts provides
such as borrowing from banks, issuing bonds, and issuing further resources to invest for growth as well as to return to
commercial paper flexibly and dynamically in accordance with shareholders. We are careful to maintain an appropriate bal-
our financial circumstances. ance between the two.
Primary financial metrics

FY2012 FY2013 FY2014 FY2015 FY2016
Dividends per share ¥14 ¥17 ¥19 ¥20 ¥24

Payout ratio 36.4% 23.5% 25.1% 30.4% 29.1%
Net income per share (EPS) ¥38.43 ¥72.48 ¥75.62 ¥65.69 ¥82.34
Net income per total assets (ROA) 3.3% 5.5% 5.4% 4.3% 5.1%
Net income per shareholders’ equity (ROE) 7.1% 11.7% 10.6% 8.6% 10.5%
Net income per net sales (ROS) 3.2% 5.3% 5.3% 4.7% 6.1%
Total asset turnover ratio 1.04 1.02 1.01 0.92 0.84
Financial leverage 2.1 2.2 2.0 2.0 2.0
Net income per shareholders’ equity and
5.7% 7.7% 7.5% 7.1% 7.6%
interest-bearing debt (ROIC)
D/E ratio 0.47 0.33 0.25 0.43 0.35

Q How is your progress toward the CT2018 financial targets?
A In fiscal 2016 we made a favorable start toward our fiscal 2018 targets.
Our aim is to build a portfolio of high value-added businesses Fiscal 2017 will be a pivotal year as the middle year of the
with high profitability in 2025. The 3-year period of CT2018 is 3-year period. Though the operating environment changes
focused on building the base toward that goal, and our targets incessantly, we find no need to change the basic approach laid
for fiscal 2018 are ¥2.2 trillion in net sales and ¥180.0 billion in out in CT2018. We will further advance our strategies toward
operating income. the achievement of our objectives while each individual
We had expected fiscal 2016 to be a challenging year business adapts appropriately to change. We are targeting net
with reduced reimbursement prices for pharmaceuticals, the sales of ¥1,990.0 billion and operating income of ¥165.0 billion
impact of the higher yen, and increased retirement expenses. in fiscal 2017. While working to expand operating income by
But thanks to efforts in each business to expand sales and emphasizing profitability in each business, we will continue
reduce costs, we achieved results above the forecast. We even to review our strategic shareholdings in accordance with the
exceeded our fiscal 2018 targets of 8.2% for operating margin, corporate governance code.
¥110.0 billion for net income, 9.0% for ROE, and 7.0% for ROIC.
In all, we made a good start in fiscal 2016 as the first year of the
3-year management initiative.
Please tell us your perspective on funding for strategic investment, and shareholder returns
Q including stock buybacks.
A We will steadily advance our growth strategy as we aim for greater shareholder returns.
We plan to adopt and execute strategic investments totaling return ratio of 35% in fiscal 2018, including share buybacks
¥700 billion over the 3-year period of CT2018. We adopted performed flexibly. Our fiscal 2016 dividend was raised by ¥4
decisions on ¥150 billion of this in fiscal 2016, and another to ¥24 per share, and we will remain focused on shareholder
¥200 billion is slated for adoption in fiscal 2017. We are steadily returns in accordance with our basic policy.
advancing measures to heighten the competitive advantages
of our existing businesses and to expand production capacity
for businesses operating on a global scale and for businesses
with potential to garner new demand in the Japanese market. Dividends per share and payout ratio
Although that leaves about half of the ¥700 billion for fiscal (¥) (%)
2018, we are currently studying investments for non-linear 30 50
growth measures including M&A to proactively expand

businesses. 24
35.1 36.4
Our funding policy to support these initiatives is to rely 20
19
on borrowings in principle, while maintaining a D/E ratio of
17 29.1
around 0.5. We will strive to maintain stable and low-cost 15
30.4 25
14 14
financing, sustaining a sound financial position, as we advance 23.5
25.1
our strategic investments.

Our basic policy for shareholder returns is to strive for
stable dividends and increased dividends through continuous
earnings growth while maintaining an appropriate internal
0 0
reserve to perform well-balanced investment for growth and '11 '12 '13 '14 '15 '16 (FY)
return to shareholders. Under CT2018 we are targeting a total Dividends per share (left scale) Payout ratio (right scale)

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.
From 1970
Founder:
Shitagau Noguchi
From 1922 From 1950 In 1972 we entered the homes business

with the launch of the Hebel Haus™, and
In 1957 we began production of polysty- in 1974 we entered the medical device
Shitagau Noguchi, the founder of Asahi
rene, and in 1959 entered the synthetic business with hollow-fiber membrane
Kasei, succeeded in Japan’s first industrial
fiber business. These were followed by artificial kidneys. Our entry into the elec-
production of ammonia by chemical
the three new businesses of nylon fiber, tronics business began with our launch of
synthesis in Nobeoka, Miyazaki, in 1923
synthetic rubber, and construction mate- Hall elements (magnetic sensors) in 1980
using technology licensed from Italy. The
rials. In 1968 we began construction of a and start of LSI manufacture in 1987.
ammonia was used in the production of
petrochemical complex in the Mizushima Our products continued to help make
Bemberg™ regenerated cellulose fiber,
area of Kurashiki, Okayama, Japan, paving life more comfortable and convenient as
part of a diverse range of business opera-
the way for our full-scale development of society’s needs diversified.
tions that included chemical fertilizer and
petrochemical operations. Our products
viscose rayon. As industry modernized
during this period supported improve-
and the economy of Japan achieved self-
ments in the quality of life during Japan’s
sustainable growth, our operations made
high-growth period.
important contributions to the stability of
people’s lives.
The first Hebel Haus™ (Kamata model home park)
Saran Wrap™ launched in Japan in 1960

Part of the ammonia plant completed in 1923
(Nobeoka, Miyazaki, Japan)
Hollow-fiber membrane LSIs

artificial kidneys
Naphtha cracker (Kurashiki, Okayama, Japan)
The Bemberg™ plant which started operation in Others

1931 (Nobeoka, Miyazaki, Japan) Foods and
Fermentation Chemistry Fibers
Foods Construction
Fibers Materials
Portfolio transformation Chemicals Homes
Fiscal 1980
Fiscal 1960 Net sales

Fiscal 1940 Net sales ¥ 800.1 billion
¥
Net sales
56 million
¥ 44.9 billion
Chemicals
Establishing the basis Sufficiency of daily necessities, improvement in quality of homes,

for modern life development of public infrastructure
• Development of chemical industry and • Post-war recovery and • Stable economic growth
modern agriculture modernization of industry • Economic bubble
• Interbellum economic downturn and • Period of high economic growth
World War II

We are Creating for
Tomorrow, providing
From 2010 new value to society
Under the “For Tomorrow 2015” manage-
ment initiative which began in 2011, we by enabling living in
proactively expanded our operations
health and comfort
From 1990
through major acquisitions. In 2012 we
entered the acute critical care business
by acquiring ZOLL Medical Corporation, and harmony with the
In 1992 we acquired Toyo Jozo Co., Ltd.
to reinforce pharmaceutical operations.
and in 2015 we acquired battery separa-
tor manufacturer Polypore International, natural environment
From 1999, we executed a program to LP. The current management initiative
heighten selectivity and focus in opera- “Cs for Tomorrow 2018” is focused on
tions, divesting our food business and expanding operations by heightening
closing some fiber businesses, achieving the combined strength of the Asahi Kasei
selective diversification. From 2000 Group.
onward, we also established many over-
seas operations, mainly in Asia, laying the
foundation for global management.
1922–
2016
The LifeVest™ wearable defibrillator
Pharmaceuticals just after the Toyo Jozo merger
Celgard™ Li-ion battery separator of Polypore
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.,

a major manufacturing base for photosensitive Others
dry film Critical Care Fibers
Health Care
Others Construction
Fibers Materials
Health Care Fiscal 2016
Electronics
Net sales
Construction
Materials
Fiscal 2000
Net sales
¥ 1,883.0 billion
¥ 1,269.4 billion
Homes Chemicals
Homes Chemicals
Electronics
Increased comfort and Heightened environmental consciousness

convenience
• Two decades of meager growth • Changing values after the Great East Japan Earthquake
after collapse of bubble • Emergence from period of slow economic growth
• Effect of global economic crisis

Feature 1: Process of Creating Value in the Asahi Kasei Group
Creating for Tomorrow

The
community
The Community The
employee outreach environment
Employee Environmental
fulfillment protection
The Sustainable Increase The

customer shareholder
Customer
in Corporate Value Shareholder
satisfaction returns
The The local
supplier economy
Fair business Local economic
Society of clean dealings participation Society of healthy/comfortable
environmental energy longevity with peace of mind
Business
operations
Pursuit of Creation of
new businesses Acceleration of
growth and
globalization
profitability
“Cs for Tomorrow 2018”

strategic management initiative
CSR in Action
CSR Fundamentals
Compliance, Responsible Care, Corporate Citizenship,
Respect for Employee Individuality
Group Mission
Contributing to life and living for people around the world

The Asahi Kasei Group constantly aims to increase corporate value
Creating for Tomorrow

The commitment of the Asahi Kasei Group: To do all that we can in every era to help the people of the world make
the most of life and attain fulfillment in living. Since our founding, we have always been deeply committed to
contributing to the development of society, boldly anticipating the emergence of new needs. This is what we mean
by “Creating for Tomorrow.”
Providing We contribute to solutions to two important challenges faced by society, “clean environmental
value energy” and “healthy/comfortable longevity,” through our diversified businesses.
▶P.20
The
Value Provided environment Healthcare
by the Asahi Kasei Shift to sustainable society; Expansion of
Group Management tightening environmental global healthcare markets IT
Greater importance of regulations Spread of IoT and
transparency and CSR other IT advances
Society of clean Society of healthy/comfortable

environmental energy longevity with peace of mind
Energy Food
Increasing energy demand;
diversification of supply
Demographic Social Growing food demand
change economy
Increasing world population; Increasing globalization;
aging population in growing geopolitical risks
developed countries
Business Focused on the three basic strategies of “pursuit of growth and profitability,” ”creation of
activity new businesses,” and “acceleration of globalization,” we are strengthening high value-added
businesses to create new value for people in the world.
▶P.42
Operating Segments
Pursuit of growth Creation of new Acceleration of

Basic strategy
and profitability businesses globalization
Focus of CT 2018
Building the base for the next phase with connections
among diverse businesses and diverse human resources
Advancing toward Creating a portfolio of high-profitability,

2025 high value-added businesses

Feature 2: Value Provided by the Asahi Kasei Group
Our Group Vision is to provide new value to society by enabling “living in health and comfort” and “harmony with the natural
environment” in accordance with our Group Mission of contributing to life and living for people around the world. The Hall
element is a notable example of a product that illustrates how Asahi Kasei has created value from the past to the present, and
how we will continue to create value in the future.
Hall element
The Hall element is a highly sensitive magnetic sensor

made with a thin film of semiconductor material.
The Hall element works by utilizing the Hall effect, in
which magnetic fields cause change in voltage. With
high sensitivity, Hall elements from Asahi Kasei can
detect magnetic flux density and orientation. A broad
range of applications include contactless switches in
combination with magnets, angle sensors, and current sensors. Geomagnetic
sensors using Hall elements have also been commercialized, and are widely used
in smartphones. Asahi Kasei started mass production of Hall elements in 1975
and met various evolving needs of society over the following four decades by
continuously developing new applications to create new value.
Applications
Electric motors
The Hall element contributed to the commercializa-
tion of ultra-small brushless DC motors. Advantages Computers
include longer service life by eliminating the friction
and wear of brushes, suppression of electromag-
netic noise, higher drive efficiency, and lower
Appliances
power consumption. Applications have included
electronic products such as VCRs and computers, VCRs
appliances such as refrigerators and washing
machines, and automotive components.
CD drive
Development of Hall element

Components
starts for collision sensor Electric motor
(originally part of airbag system) using Hall element
1970 1975 1980 1985 1990

Thin-film technology Hall IC
Hall element
breakthrough timeline Launch of development Entry to LSI business, advancing to next stage

80%
global share
of cumulative
production
volume
(FY2016)
Smartphones
Energy-efficient
appliances
Vehicle
components
Electronic compass
The electronic compass was devel-
Rotating axis oped by combining Hall elements,
LSIs to amplify the sensor signals,
and signal-processing software
algorithms.
Power window
CPU
cooling fan
DVD player
1995 2000 2005 2010 2015

Rotational angle sensor Electronic compass
Generating new demand Magnetic convergence plate technology

Feature 2: Value Provided by the Asahi Kasei Group
Notable Example of Value Creation—The Electronic Compass
Our invention of the electronic compass was achieved by combining technology for magnetic sensors to measure
geomagnetism with our LSI and software technology. The electronic compass significantly enhanced the functional-
ity of mobile phones and smartphones, enriching the experience of map applications such as pedestrian navigation
systems and contributing to their widespread popularity.
About the electronic compass The outset
The electronic compass, a semiconductor device Around 2000, when GPS was
that determines azimuth by measuring geomagne- becoming a standard feature in
tism, is widely utilized for map applications installed mobile phones, we anticipated
in smartphones such as pedestrian navigation that there would be demand for
systems. Asahi Kasei developed the electronic com- pedestrian navigation systems
pass by combining our technology for magnetic similar to vehicle navigation
sensors, LSI technology to amplify the sensor signals, systems. Unlike vehicle speed,
and signal-processing software algorithms. Asahi however, walking is too slow to
Kasei has earned a dominant share of the global enable the direction of movement
electronic compass market. to be determined from GPS. Realizing that an
Magnetic North Pole Geographic North Pole electronic compass would be required to determine
Horizontal =
component Standard of azimuth azimuth by measuring geomagnetism, we initiated
Vertical its development.
Geomagnetism
component
Equator
Asahi Kasei’s advantage for development Competitive strength
Our development of the electronic compass was While other companies

not oriented as an effort to find a new outlet for a focused on the develop-
succession of our technologies starting from sensors ment of sensors with high
and followed by LSIs. Rather, we first identified sensitivity, which was costly
a market need and then took stock of our range and time-consuming, Asahi
of existing technologies, including sensors, LSIs, Kasei already had an estab-
other constituent technologies, and manufacturing lished mass-production
technology, and considered how to apply them in infrastructure for magnetic sensors as well as signal-
the development. We also leveraged our established amplifying technology and distribution channels in
business connections to ascertain customer needs its LSI business. Instead of aiming for high sensitivity,
from the early stages of development, and made we sought to swiftly make an available product
many proposals. In addition to the advantage that provided utility to users. Our combination
gained from each of these aspects, our true strength of technologies for sensors, LSIs, and algorithms
was the ability to combine all of them together in a enabled us to provide a solution to customers at low
new business model culminating in the electronic cost in a short time.
compass.

Creating Value for the Future
Hall elements are poised for expanded use in the automobile field due to emerging trends for intensified application
of electronic and control systems throughout the vehicle. The technology for Hall elements has also enabled the
creation of infrared sensors which will meet growing demand in new fields such as human detecting sensors and gas
sensors.
For automobiles Infrared sensor
In addition to conven- The infrared sensor was developed using thin-film

tional applications in semiconductor technology cultivated in the
motor control for power magnetic sensor business. It can be used to detect
steering, power win- human presence in homes and other indoor
dows, and air conditioner environments. It also has great potential for use as
fans, demand for sensors a gas sensor in systems to heat and cool buildings.
in the power train is Especially in high-rise office buildings and in well-
expected to grow in line sealed homes, the efficiency of heating and cooling
with engine downsizing is highly dependent on the amount of outside air
and an increasing number of gears in the transmis- drawn in. By measuring indoor CO2 concentration,
sion for improved fuel efficiency and compliance a gas sensor can enable the minimum necessary
with environmental regulations. The development ventilation while maintaining a comfortable indoor
and spread of autonomous vehicle technology temperature, resulting in a significantly reduced
around the world will provide further impetus to energy requirement.
strong demand growth for sensors in vehicles.
Hall elements contributing to reduced CO2 emissions
Under the “Cs for Tomorrow 2018” medium-term management initia-

tive, Asahi Kasei aims to contribute to solutions for “clean environmental
energy” through our diverse businesses. As magnetic sensors, Hall
elements play an important role in saving energy. Electric motors are
used in every kind of home appliance. By accurately detecting rotation
position and speed, magnetic sensors enable the motors to run with the
minimum amount of electricity, resulting in reduction of CO2 emission
from power generation.
We certified Hall ICs and Hall elements for air conditioner DC motors
as global warming conscious products in accordance with our original
guidelines. Our business activities with these products will make an
ongoing contribution to the environment.

Directors
2. President & Representative Director

1. Chairman & Director Ichiro Itoh Presidential Executive Officer Hideki Kobori
After many years of experience in the fibers business, he held several After many years of experience in the electronics business, including as
leadership positions including executive officer for planning, accounting, President & Representative Director of Asahi Kasei Microdevices Corp., he
and finance, and vice-presidential executive officer. He has been Chairman oversaw strategy, accounting, finance, and internal control. He assumed
& Director since April 2010. He possesses a wealth of experience and a the role of President of Asahi Kasei in April 2016. He possesses a wealth of
broad range of knowledge on the Asahi Kasei Group’s businesses and experience and a broad range of knowledge on the Asahi Kasei Group’s
corporate management. businesses and corporate management.
5. Director 6. D
irector
Lead Executive Officer Nobuyuki Kakizawa Lead Executive Officer Soichiro Hashizume
After many years of experience in the housing businesses, he held After many years of experience in human resources, he held several
several leadership positions including Assistant Senior General Manager leadership positions including President of PTT Asahi Chemical Company
of Accounting and Finance at Asahi Kasei Corp. and General Manager of Limited. He has been responsible for human resources development and
General Affairs at Asahi Kasei Homes Corp. He became General Manager the planning and execution of personnel and labor measures of the Asahi
of General Affairs in April 2013 with responsibility for formulating and Kasei Group since April 2013. He possesses a wealth of experience and a
executing measures for risk management and compliance of the Asahi broad range of knowledge on human resources.
Kasei Group. He possesses a wealth of experience and a broad range of
knowledge on risk management and compliance.
9. Outside Director Tsuneyoshi Tatsuoka
With his wealth of experience and broad range of insight into 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 oversee- 9 8 7 1 2 3 4 5 6
ing business execution.

3. Representative Director 4. D
irector
Vice-Presidential Executive Officer Masafumi Nakao Senior Executive Officer Shuichi Sakamoto
After many years of experience in R&D and new business development in After many years of experience in the petrochemical business, he
the electronics business, he held several leadership roles including General became General Manager of Corporate Strategy in November 2014 with
Manager of the R&D Center and executive officer for quality assurance at responsibility for formulating and executing the management strategy
Asahi Kasei Microdevices Corp. Since April 2012, he has overseen R&D of and business strategies of the Asahi Kasei Group. Since April 2016, he has
the Asahi Kasei Group. He possesses a wealth of experience and a broad overseen accounting, finance, and IT. He possesses a wealth of experience
range of knowledge on R&D. and a broad range of knowledge on the Asahi Kasei Group’s businesses and
corporate management.
7. Outside Director Norio Ichino 8. Outside Director Masumi Shiraishi
With his wealth of business management experience and broad range of With her wealth of experience and broad range of insight into economics
insight as a corporate executive, including as President of Tokyo Gas Co., and society, including as a professor at Kansai University, she fulfills her role
Ltd., he fulfills his role as Outside Director in deciding on important matters as Outside Director in deciding on important matters of the Asahi Kasei
of the Asahi Kasei Group as well as overseeing business execution. Group as well as overseeing business execution.

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 28, 2017)
Shareholders Meeting
Election Election
Audit Oversight
Board of Corporate Auditors Board of Directors

(5 Corporate Auditors, including (9 Directors, including
3 Independent Outside Corporate Auditors) 3 Independent Outside Directors)
Cooperation Audit Nomination

Advisory Committee
Independent Auditors Remuneration
Advisory Committee
Audit Oversight
Execution of operations
Management Council
President Risk Management & Compliance Committee

Compliance Hotline
Responsible Care Committee
Internal Audit Department
Group staff functions
Core Operating Companies, Strategic Business Units
3 Corporate Governance System
Oversight and audit the Group, and oversees execution of operations by Directors and
The Board of Directors, which consists of nine Directors including Executive Officers.
three independent Outside Directors (one-third), makes decisions The newly established Nomination Advisory Committee and
on matters requiring a Board of Directors resolution in accordance Remuneration Advisory Committee under the Board of Directors
with laws or the Articles of Incorporation, makes decisions on consist primarily of Outside Directors who provide active involve-
important matters for Asahi Kasei Corp. and other companies of ment in the consideration of matters such as: optimal makeup

and size of the Board of Directors, policy regarding nomination Furthermore, the Internal Audit Department conducts
of candidates for Directors and Corporate Auditors, criteria on internal audits based on the audit plan. Results of internal audits
the independence of Outside Directors and Outside Corporate performed by each group staff function are aggregated by the
Auditors, remuneration policy and system for Directors, and evalu- Internal Audit Department and reported to the Board of Directors.
ation of individual Directors to determine remuneration based on
performance. Execution of operation
The Board of Corporate Auditors consists of five Corporate We have adopted an Executive Officer system to enable faster
Auditors including three independent Outside Corporate Auditors business execution, and clearly define responsibilities; Directors
(a majority). In accordance with the audit policy stipulated by the fulfill decision-making and oversight functions, and Executive
Board of Corporate Auditors, each Corporate Auditor oversees Officers fulfill execution of operations.
execution of duties by Directors by attending the Board of The Decision-making and Approval Authority Regulations
Directors meetings and examining the state of operations. To of the Asahi Kasei Group stipulate detailed criteria for decision-
enhance functions of the Board of Corporate Auditors and to making with regard to matters concerning the management
facilitate smooth cooperation among Corporate Auditors from plan, investments and loans, funding and financial management,
inside the company and Outside Corporate Auditors, a Corporate organization and management system, research and develop-
Auditors Office is staffed with full-time employees. ment, and production technology, and delegate authority from
PricewaterhouseCoopers Aarata LLC performs financial audits the Board of Directors to the Management Council, strategic
based on the Companies Act and the Financial Instruments and business units, and core operating companies.
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.
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 based from any position of officer of the Asahi Kasei Group, with the
on the remuneration system approved in advance by the Board of number of shares to be granted being determined in accordance
Directors, within the limits approved at a shareholders meeting. with each Director’s rank.
Fixed base remuneration provides specific amounts in Remuneration for Outside Directors, however, is comprised
accordance with the rank of each Director. Performance-linked solely of fixed base remuneration.
remuneration is based on consolidated financial results and indi- We determine the level of remuneration based on research
vidual performance evaluation. Performance is comprehensively data provided by external specialized agencies, etc.
evaluated in consideration of the degree of achievement of In order to further improve objectivity and transparency of
individually established objectives, achievements, contributions Directors’ remuneration, we have established a Remuneration
to financial performance, and the degree of contributions, in Advisory Committee, which consists primarily of Outside Directors,
addition to management benchmarks such as net sales, operating who participate in discussions about the Directors’ remuneration
income, and ROA. system and operation thereof, and provide advice to the Board of
The stock-based remuneration system is designed to reward Directors.

Corporate Governance
6 Independence Standards and Qualification for Outside Directors and Outside Corporate Auditors
In determining that Outside Directors and Outside Corporate 5. C

ompany which receives donation or aid (¥10 million or more
Auditors are independent, we ensure that they do not correspond in a year) from the Asahi Kasei Group or person who executes
to any of the following and whether they are capable of perform- businesses thereof
ing duties from a fair and neutral standpoint. 6. M
ain shareholder of the Asahi Kasei Group (person or com-
1. Person who currently executes or has executed businesses of pany who directly or indirectly owns 10% or more of all voting
the Asahi Kasei Group (executive directors, executive officers, rights in Asahi Kasei) or person who executes businesses
employees, etc.) over the last 10 years thereof
2. Company or person who executes businesses thereof whose 7. P
erson who executes businesses of a company which elects
major business partner is the Asahi Kasei Group (company with Directors, Corporate Auditors, or employees of the Asahi Kasei
more than 2% of its annual consolidated net sales from the Group as its own Directors or Corporate Auditors
Asahi Kasei Group) 8. Independent Auditors of the Asahi Kasei Group or any staff
3. Major business partner of the Asahi Kasei Group (when thereof
payments by this partner to the Asahi Kasei Group account for 9. P erson who fell into any of the categories 2 through 8 above
more than 2% of our annual consolidated net sales or when over the last three years
we borrow money from such partner amounting to more than 10. Person who has a close relative (spouse, relative within the sec-
2% of our consolidated total assets) or person who executes ond degree of kinship, and those who share living expenses)
businesses thereof who falls under any of the categories 1 through 8 above,
4. Person who receives money or other financial gain (¥10 million provided that “person who executes businesses thereof” in
or more in a year) from the Asahi Kasei Group as an individual 1, 2, 3, 5, 6, and 7 above shall be replaced with “important
other than remuneration as a Director or Corporate Auditor of person who executes businesses thereof (executive directors,
Asahi Kasei executive officers, etc.)”
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 17 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 in accordance with 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.

Corporate
Governance
Feature The effectiveness of our Board of Directors is regularly evaluated after each fiscal year, and results of
evaluation are disclosed.
1. Measures implemented in fiscal 2016
The Board of Directors implemented the following measures in of Directors to contribute to greater business performance and
fiscal 2016 based on evaluation of the previous fiscal year. corporate value of Asahi Kasei over the longer term. For the
purposes above, we proposed the introduction of a stock-based
1) Change of agendas for Board of Directors meetings remuneration system at the 126th Ordinary General Meeting of
In order to enhance the supervisory functions of the Board of Shareholders, and approval was received. To ensure objectivity
Directors, the agendas for Board of Directors meetings were and transparency, the proposal for adopting the system was
reviewed in order to place greater focus on discussions of corpo- deliberated at the Remuneration Advisory Committee consisting
rate governance, risk management, and compliance. After several primarily of Outside Directors.
discussions at the meetings, the new Asahi Kasei Group Code of
Conduct was established and became available on the Asahi Kasei 3) Enhanced provision of information to Outside
website in April 2017. Directors and Outside Corporate Auditors
As part of our effort to expand the provision of information to
2) Proposal for adoption of a stock-based remuneration Outside Directors and Outside Corporate Auditors, we held tours
system of our sites for Outside Directors and Outside Corporate Auditors
By more clearly linking remuneration of Directors and Asahi Kasei’s to help them gain a deeper understanding of our operations. In
shareholder value, a new system was proposed to reinforce the addition to holding such site visits on an annual basis, we provide
common interest between Directors and shareholders, including regular explanations by people responsible for each business unit
both the benefits and risks associated with variations in the in order for Outside Directors and Outside Corporate Auditors to
share price. The system is designed to enhance the motivation keep abreast of the current business situation and issues.
2. Moving forward
Through the measures described above, we believe that we have capital markets.
enhanced the supervisory functions of the Board of Directors. There is an increasing need for the Asahi Kasei Group to
Based on deliberations of the effectiveness of the Board of conduct management from a global perspective through large-
Directors during fiscal 2016, we will continue and expand these scale M&A and overseas business development, and the business
efforts in the future. We also plan to develop discussions during environment is rapidly changing. In line with such changes in
fiscal 2017 on the longer-term direction of management strate- the environment, we recognize the need to flexibly adapt the
gies, the progress of the medium-term management initiative, membership and the structure of the Board of Directors in the
and IR activities, as well as the opinions of investors and trends of future.
Greater diversity of Directors is needed for growth over the longer term
I feel that the current operation of the Board of Directors is generally appropriate. Outside
Directors have diverse backgrounds, including in corporate management, industrial
policy, and academia, and independence is maintained. Directors are given ample time
to consider proposals in accordance with their content, and the frequency of Board
meetings is appropriate. Discussions among Directors are uninhibited and lively, and
frank opinions are exchanged.
Nevertheless, viewed from a longer-term perspective, there are outstanding issues
concerning the composition of Directors. If we are to have a broader range of business
strategies, including for future M&A and global development, I think we need to bring in
more people having backgrounds in technology, women from within the company, and
younger people as Directors. I believe this is important for the longer-term development Masumi Shiraishi
of Asahi Kasei, and I will continue to clearly express my thoughts on the matter. Outside Director

Specific Measures to Heighten Compliance
“Compliance,” “Communication,” and “Challenge” are identified as areas of emphasis under our Cs for Tomorrow 2018
management initiative. To heighten awareness for compliance among personnel, we are focusing on the “three actuals”
of the actual place, actual thing, and actual fact. We believe that 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.
Actions during the past year
Enhanced framework for risk management and compliance
Enactment of Asahi Kasei Group Basic Regulation for Risk Establishment and composition of Risk Management &
Management & Compliance Compliance Committee
We newly enacted the Asahi Kasei Group Basic Regulation for Risk Our previous Corporate Ethics Committee and Risk Management
Management & Compliance to clearly specify basic systems and Committee were combined into a new Risk Management &
organizations for the central aggregation and administration of all Compliance Committee chaired by the President of Asahi Kasei
matters related to risk management and compliance. Corp. The new committee monitors the management of risks and
the state of compliance throughout the Asahi Kasei Group.
Outline of Asahi Kasei Group Basic Regulation
for Risk Management & Compliance Framework for risk management & compliance
1. Purpose of the regulation Board of Directors,

Management Council
2. Definition of terms for risk management & compliance
Reporting
3. Scope of application of the regulation
Deliberation/decision
4. Framework for risk management & compliance
(Secretariat)
1) Designation of Executive Officer for Risk Management & Risk Management & Risk Management & Compliance,
Compliance Committee General Affairs
Compliance (Risk Management &
Compliance Oversight Department)
2) Establishment and composition of Risk Management &
Compliance Committee Coordination
3) Establishment of Risk Management & Compliance Administrative departments

Oversight Department/Risk Management & Compliance (Risk Management &
Compliance Promotion Departments)
Promotion Departments
4) Role of Presidents of SBUs and core operating companies Instructions/reports
5) Designation and role of Risk Management & Compliance Business units
Supervisors/Risk Management & Compliance Managers
Strategic Business Units Core Operating Companies
5. The Asahi Kasei Group Code of Conduct
6. Crisis response
7. Internal reporting system Subsidiaries (worldwide) Subsidiaries (worldwide)

Formulation of compliance policy, heightening awareness
Establishment of new Asahi Kasei Group Code of Conduct Efforts for heightened awareness at each workplace
For greater ease of understanding among our personnel around Each workplace in Japan is holding training sessions to review the
the world, we fundamentally reviewed the content of our former content of the Asahi Kasei Group Code of Conduct. To support
“Corporate Ethics—Basic Policy and Code of Conduct” and adopted the consistent and effective implementation of these training
a new “Asahi Kasei Group Code of Conduct” which is applied sessions, we prepared several case studies for employees to easily
throughout all companies of the Asahi Kasei Group. In fiscal 2017 we understand how elements of the code of conduct relate to real-
distributed a booklet on the new code of conduct to all employees world situations, as well as a supplementary reader that explains
in Japan, and disclosed the code of conduct on our public website. the content of the code of conduct, with cartoon illustrations.
(Measures to gain understanding and familiarity with the Asahi Kasei
Group Code of Conduct among subsidiaries and affiliates located
outside Japan are scheduled to be performed henceforth.)
Outline of the Asahi Kasei Group Code of Conduct Case studies
1. E nsuring Safety, Environmental Protection, and High 1. Reporting, informing, and/or discussing as fundamental to
Quality to Contribute to Life and Living ensuring thorough safety
(1) Maintaining Thorough Safety in All Aspects 2. What is the first thing you think of when putting priority on
(2) P
rovision of Safe and High-Quality Products and Services that the safety and health of customers?
Customers Can Rely On 3. Health management at the workplace
(3) T horough Management of Workplace Safety, Ensuring Safe 4. Environmental standards that were acceptable in the past, but...
and Comfortable Workplace Environments 5. Dealing with sudden media inquiries
(4) E nvironmental Protection and Harmony with Local 6. 1) Even if good data is obtained...
Communities 2) Although sales are important...
7. Even when the company doesn’t give you instructions...
2. Maintaining Sincere Relationships with Various Related
Parties around Us 8. At social gatherings of industry associations...
(5) Timely and Appropriate Disclosure of Information to Society 9. 1) What is optimal procurement?
2) Offers of gifts from suppliers
(6) Appropriate Descriptions to Customers, Provision of Safe and
Reliable Products and Services 10. When enthusiastic instruction may seem dehumanizing...
(7) H
ealthy Relationships with Customers and Government 11. Beware of overdependence on certain individuals!
Officials 12. 1) Discretion when speaking in the elevator!
(8) Fair Relationships with Competitors 2) Caution when writing in blogs or SNS
(9) O
ptimized Procurement and Healthy and Appropriate 13. 1) Be wary of e-mail from unknown parties!
Relationships with Suppliers 2) Carelessness with customer information
(10) Respect for Human Rights and Diversity 14. Carelessness with technological information
15. Conduct with integrity (part 1)
3. Utilizing Management Assets Conduct with integrity (part 2)
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
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/about_compliance_01.pdf

Specific Measures to Heighten Compliance
Cartoon illustrations of
case study examples
Measures for risk management
Reviews to identify latent risks in each business unit Protection of personal information: In conformity with the May
Managers responsible for risk management and compliance are 2017 amendment of Japan’s Act on the Protection of Personal
designated in each SBU, core operating company, and subsidiary, Information, we revised the Asahi Kasei Group Regulation for
and work to assess and analyze their related risks and to plan and Management of Personal Information as necessary. Related depart-
implement measures to mitigate serious risks. Through the Risk ments were informed of the changes and new measures required.
Management & Compliance Committee, we confirm and follow-
up on the state of risk management in each business unit. Prevention of insider trading: In March 2017, an employee of
a subsidiary was fined by Japan’s Financial Services Agency for
Measures applied throughout the Asahi Kasei Group insider trading. Taking this matter very seriously, we revised the
Prevention of bribery: To prevent the occurrence of any act Asahi Kasei Group Regulation for Prevention of Insider Trading to
which would constitute bribery, we newly enacted Asahi Kasei prevent any recurrence. Since July 2017, the revised regulation
Group Policies for Prevention of Bribery, including basic policies to requires advance notification of share trading by employees,
prohibit bribery and clear procedures to follow to reduce bribery- and prohibits share trading by employees prior to earnings
related risks. announcements.

Feature 3: Global Executives Interviews
Asahi Kasei acquired acute critical care device manufacturer ZOLL in 2012 and battery separator man-
ufacturer Polypore in 2015 for a combined total of some $4.4 billion. While ZOLL retained its manage-
ment team after the acquisition, new leadership was installed at Polypore. In these interviews, leaders
of the two companies share their thoughts on the PMI process and other management challenges.
How do you evaluate the post-merger integration (PMI) pro-

ZOLL cess between Asahi Kasei and ZOLL?
The process of PMI went smoothly, I think mostly because of the flexibility that Asahi Kasei
showed. ZOLL and Asahi Kasei have very different kinds of business, so we had to learn a lot
about one another’s ways of working. Asahi Kasei’s PMI team really allowed the ZOLL people
to help define what would work for ZOLL in the long term for continuous growth. It’s a good
example of what I found to be the Japanese way of making a plan after first scrutinizing condi-
tions; different from the American way of taking action first and thinking about it later.
Compensation was another area where Asahi Kasei showed flexibility. Knowing there
are big differences between the American and Japanese systems, Asahi Kasei contracted an
American compensation consulting firm to analyze what kind of incentives would be best
for ZOLL. The firm concluded that in order to achieve retention, ZOLL people should be
compensated in a different manner. But I told Asahi Kasei it wasn’t necessary. ZOLL already had
an effective compensation system that kept people satisfied, with a low turnover rate. Asahi
Richard Packer Kasei flexibly adopted our opinion and trusted us more than the consulting firm, and the result
Chairman, Board Director, was excellent.
ZOLL Medical Corporation
Primary Executive Officer, When it comes to flexibility, I believe we owe a lot to the leadership of Fujiwara-san, the
Asahi Kasei Corp. President of Asahi Kasei at the time. He and I had many discussions about how to integrate our
companies. He always said that the key to success would be to retain the ZOLL people, since
Asahi Kasei couldn’t grow the business without them. I really appreciate his vision, giving us
flexibility to manage the business after the merger as well.

Did you find any shortcomings of Asahi Kasei?
In my view, some top management people may not really want to take bold actions for
growth. They tend to seek stability. I believe that seeking growth provides greater potential to
increase business opportunities, and ZOLL is always doing so. Like most American companies,
we don’t want to just be stable. The younger people in Asahi Kasei understand the need for
growth and are eager for it, but some of the senior people don’t give me that impression. I’m
not saying we should always take high risks aiming for high rewards. The point is striking a
balance between risk and reward. It’s good to gain a degree of stability by having diversified
operations, but we can’t expect any growth at all without taking any risk.
Why do you think some senior people place too much

emphasis on stability?
It may because of the Japanese system of lifetime employment and seniority. This functioned
very well during the period of high growth until the 1990s. But past success can be an
impediment to change. In effect, younger people are prevented from getting into positions
of responsibility early in their career. If people don’t join the management ranks until they are
near retirement, it’s natural that they would tend to value stability. They don’t want to hurt
Packer together with Taketsugu Fujiwara, the business during their tenure, and they can’t expect to stay long enough to follow through
President of Asahi Kasei at the time of the
acquisition in 2012 on something new. If people joined the management ranks at a younger age, knowing they
had 10 or 20 years ahead of them, they would be more ambitious in taking risks to expand
their business. When I took responsibility for ZOLL, I was the youngest of the top executives;
others were more than 10 years older than I. I looked for ways to grow the business, knowing
the risks entailed, but I knew I had years ahead of me to make it work if I made a mistake. In
the United States, we have a way to fast-track young personnel, moving younger people into
management earlier and giving them responsibility for growing their business. I know this may
cause friction because some people are skipped over, and some younger people receive more
compensation than their seniors. But I believe that it is important to utilize talented young
people this way. A diversity in age is also beneficial because the more experienced people can
serve as mentors to the younger leaders, and they can reinforce one another effectively.

You said growth creates opportunities. What is needed for
Asahi Kasei to grow more?
I think growth provides opportunities and solves various problems. Having worked at Asahi
Kasei for five years, I really appreciate our corporate culture, I know we have outstanding
people, and I understand how much they care about the company. Also, I have seen that we
can be very flexible. So I think we already have the foundation for further success, but that
alone is not enough. We need to build on that foundation by utilizing not only people of
various ages but also local people in various locations. By flexibly utilizing a more diverse range
of people, Asahi Kasei can build on its strengths toward further growth. I believe this can also
establish Asahi Kasei’s competitive advantage ahead of other Japanese companies in the midst
of globalization. In that sense, utilizing diversity of personnel becomes all the more important.
Looking back on the 25 years I’ve been involved in the management of ZOLL, we have
always utilized people of various nationalities. We leverage local people in the management
of our operations around the world. For example, a German person runs our business in
Germany, and a British person runs our British business. We deliberately involve local people in
the management at each location rather than sending an American person, and it has worked
well for us. Unfortunately, we have not been as successful with diversity of gender, as we do
not have enough women in high executive positions. We need to do better in this area.
Finally, could you tell us about the mission of the acute critical
care business?
I remember when I first met people from Asahi Kasei. They were fascinated by the mission
of ZOLL. Here was this medical equipment that could save a life in danger, and a company
that saw its mission as saving lives by providing the right products. On the other hand, I was
fascinated by the fact that Asahi Kasei, a 100-year-old company with $20 billion in sales mainly
in chemicals, had a mission of contributing to healthy living and longevity. You would rarely
The LifeVest™ wearable defibrillator see that attitude in an American company. Asahi Kasei sincerely held protecting life to be one
of its core values, which aligned perfectly with ZOLL’s aims. Our relationship was cemented by
sharing the same mission. Since the merger, ZOLL’s growth has accelerated and our products
save many more lives than before. Together with Asahi Kasei, ZOLL will continue to expand as
we fulfill our unchanging mission of saving lives.
The ZOLL AED Plus™ automated external

defibrillator

What is the key to expanding your business?

Polypore
The operating environment for Polypore is changing very rapidly. As electric drive vehicles
become more widespread, battery performance is improving tremendously. Performance
requirements for battery separators are constantly on the rise. We need to meet these changes
while maintaining high quality and stable supply. The key is adapting to rapid change. The
management team must clearly discern the changes, and swiftly act accordingly.
What measures have you taken to adapt to changes?
During the post-merger integration (PMI) process, we overhauled the management team.
After the acquisition, a new kind of leadership was required for Polypore. Previously, skillful
explanation was required in order to raise funds from the capital markets. As part of Asahi
Kasei, however, this became unnecessary. Rather, swift actions toward growth while integrat-
Shigeki Takayama
ing our businesses together and adapting to rapid changes became essential. The previous
CEO, Polypore International, LP
Senior Executive Officer, management team was ill suited to the new tasks. The eight members of the current team
Asahi Kasei Corp. are a diverse group, including three women and several nationalities—Japanese, American,
German, and Chinese. This team is nimble enough to adapt our strategy on a monthly basis,
yet adhere firmly to a long-term growth perspective. It is also able to gain the understanding
of personnel as we busily work toward further growth.
How do you evaluate the support you’ve received from

Asahi Kasei?
The battery separator business is probably the most dynamically changing business in Asahi
Kasei. The company understands that. Investment decisions are made swiftly and flexibly with
Celgard™ lithium-ion battery separator
sufficient consideration for economics and safety. A delay in judgment would be devastating
for this business. I am extremely grateful that Asahi Kasei acts promptly and appropriately to
respond to changes in the operating environment and meet customer needs.
How do you keep personnel motivated in such a rapidly

changing operating environment?
Maintaining employee motivation is absolutely vital. Among brain scientists, there is a theory
that people naturally fear change, and to maintain a balance people also need an equivalent
degree of stability. I feel that the company’s vision can serve as the needed source of stability.
While people work hard every day on new developments and quality improvements to meet
customer needs, the company’s vision remains an unchanging beacon to continuously strive
Takayama gives his first briefing to Polypore and toward. For example, consider Elon Musk, the CEO of Tesla. He is also CEO of SpaceX, which
Celgard employees after the acquisition
develops rockets. His vision is for the rockets to be used to move 50,000 people to Mars in
the near future. I understand that a sense of urgency regarding the world’s energy issues and
a grand vision are what motivate his employees. Polypore is also involved in solutions to the
world’s energy challenges. I would like to craft a clear vision that enables all our employees to
share the same aim.
I also think it’s important to enjoy change. Sometimes it’s necessary to go beyond
your own boundaries. In the United States, there tends to be clear recognition of personal

performance, and so boundaries of responsibility are clearly delineated. At Asahi Kasei, though,
people often work beyond their boundaries. This is one aspect of taking on challenges, which
is one of our Group Values. Motivation for work comes not only from monetary remuneration.
Even in the United States, “fun” is recently seen as an important factor. If the company encour-
ages people to proactively reach beyond their own area, we can foster a culture that values
fun. I hope we can get Polypore personnel to begin doing this, and our management team is
now advancing discussions on how to do so.
Globalization requires appropriate response to various

changes. What do you consider to be important points?
The first is to have high-level administrative functions such as legal, HR, and IT. Polypore
operates globally, with manufacturing sites around the world. They have rich knowledge and
experience in various regions. I think the Asahi Kasei Group would benefit from leveraging
such functions. For instance, if one of our businesses is going into a region where Polypore is
already operating, Polypore’s knowledge of legal procedures, HR systems, and IT infrastructure
At the opening ceremony of a new plant for can be very helpful. Also, we have 10 group companies in the United States including ZOLL
Daramic™ in Gujarat, India
and Polypore. Polypore has a highly advanced IT infrastructure which could be used to support
other operations as well.
The second important point is hiring outstanding local personnel in each location. For
example, when we built a new Daramic™ plant in India, an excellent local employee led the
project for us. Everything went very smoothly. The local managers and engineers we’ve hired
in each location are fluent in English and help us think hard about the business. Retaining
highly capable local personnel is extremely important. Polypore has a global HR network, and
is able to contact appropriate outside people as required. It would be valuable for the Asahi
Kasei Group to make use of this function.
Thirdly is outstanding communication. I have a telephone conference with around 100
global leaders every three months. In these quarterly conferences, I discuss the state of busi-
Daramic™ lead-acid battery separator
ness, progress on achieving our budget, and what our challenges are. The participants have
various nationalities and different native languages, so we try to make sure the documents
are written in plain English. We are also careful about the sequence of the documents to be
discussed. Arranging each conference requires careful coordination so as to avoid a time
that falls on a holiday for any of the participants. We have a very capable communications
team that arranges the conferences and prepares the documents. Effective communication
is essential for smooth decision-making among our global leaders, and to advance the overall
management of a global organization.
What is the significance of your business?
Our business makes an important contribution to solutions to the world’s fossil-fuel challenges.
We have the potential to reshape the history of energy. It is a wonderful business that employ-
ees can tell their families about with pride. I’d like to channel this into motivation to work
diligently for the growth of the business. Put simply, our product is a polyolefin film. But as
part of a battery, it is an essential component that ensures safety and performance. More and
more electric drive vehicles are on the road. Soon there will be a million, then two million. Our
product plays a vital role in ensuring the safety of those vehicles. We can never compromise
on the safety and quality of our products. We will continue to contribute to a society of clean
environmental energy, providing safety that no competitor can match as we create new value
for society.

Financial and Non-Financial Highlights
For the years ended March 31 2017 2016 2015 2014

Net sales ¥1,882,991 ¥1,940,914 ¥1,986,405 ¥1,897,766
Domestic sales 1,226,633 1,261,203 1,313,128 1,289,054
Overseas sales 656,358 679,711 673,277 608,712
Operating income 159,229 165,203 157,933 143,347
Ordinary income 160,633 161,370 166,543 142,865
Income before income taxes 157,388 146,389 158,440 163,860
Net income attributable to owners of the parent 115,000 91,754 105,652 101,296
Comprehensive income 138,979 (11,925) 214,484 146,102
Net income per share, yen 82.34 65.69 75.62 72.48
Capital expenditure 90,573 99,000 89,108 92,397
Depreciation and amortization 91,387 93,811 86,058 86,052
R&D expenditures 79,566 81,118 75,540 71,101
Cash dividends per share, yen 24.00 20.00 19.00 17.00
As of March 31 2017 2016 2015 2014

Total assets ¥2,254,500 ¥2,211,729 ¥2,014,531 ¥1,915,089
Inventories 346,682 336,743 339,677 328,540
Property, plant and equipment 556,881 555,989 502,507 480,535
Investments and other assets 340,302 305,140 334,368 285,735
Net wortha 1,151,344 1,041,901 1,082,654 912,699
Net worth per share, yen 824.36 745.94 775.05 653.15
Net worth/total assets, % 51.1 47.1 53.7 47.7
Number of employees 33,720 32,821 30,313 29,127
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 income2

2,000
1,897.8 1,986.4 1,940.9 1,883.0 250
1,666.6 200 165.2 159.2
157.9
1,500 143.3
150
1,000
92.0
100
50
500
0
0 -50
'12 '13 '14 '15 '16 (FY) '12 '13 '14 '15 '16 (FY)
Fibers Chemicals Electronics Homes Construction Materials Fibers Chemicals Electronics Homes Construction Materials
Health Care Critical Care Others Health Care Critical Care Others Corporate expenses and eliminations, etc.
Net income attributable to owners of the parent, ROE Interest-bearing debt, D/E ratio
(¥ billion) (%) (¥ billion)
120 115.0 24 500 1.0
105.7 449.7
100 101.3 20 402.8
91.8 400 381.4 0.8
80 16
300 303.9 0.6
60 12
269.0
53.7
10.5 200 0.4
40 11.7 8
10.6 0.47 0.43 0.35
7.1 8.6 100 0.33 0.2
20 4 0.25
0 0 0 0
'12 '13 '14 '15 '16 (FY) '12 '13 '14 '15 '16 (FY)
Net income attributable to owners of the parent (left scale) ROE (right scale) Interest-bearing debt (left scale) D/E ratio (right scale)
1
In FY2016, the four segments of Chemicals & Fibers, Homes & Construction 2
mortization of goodwill, etc., related to acquisition of ZOLL and Polypore are
A
Materials, Electronics, and Health Care were changed to the three segments of excluded from Critical Care and Electronics, respectively, and included in
Material, Homes, and Health Care. Some businesses were reclassified among “Corporate expenses and eliminations, etc.”
segments at the same time. For comparison, FY2015 results have been recalculated
according to the new classifications.
Millions of yen, except where noted
2013 2012 2011b 2010b 2009b 2008b 2007

¥1,666,640 ¥1,573,230 ¥1,555,945 ¥1,392,212 ¥1,521,178 ¥1,663,778 ¥1,623,791
1,181,429 1,151,705 1,106,656 1,021,803 1,127,213 1,176,441 1,195,751
485,211 421,525 449,289 370,409 393,965 487,337 428,040
91,960 104,258 122,927 57,622 34,959 127,656 127,801
95,125 107,567 118,219 56,367 32,500 120,456 126,507
82,302 94,866 98,342 46,056 19,031 105,599 114,883
53,712 55,766 60,288 25,286 4,745 69,945 68,575
117,515 62,561 45,088 — — — —
38.43 39.89 43.11 18.08 3.39 50.01 49.00
113,785 85,124 66,014 83,990 126,725 82,911 84,413
80,050 78,440 84,092 86,166 79,436 73,983 71,646
71,120 66,269 62,320 62,924 60,849 56,170 52,426
14.00 14.00 11.00 10.00 10.00 13.00 12.00
2013 2012 2011 2010 2009 2008 2007

¥1,800,170 ¥1,410,568 ¥1,425,879 ¥1,368,892 ¥1,379,337 ¥1,425,367 ¥1,459,922
309,677 279,206 256,248 251,084 273,539 272,372 240,006
461,581 416,119 418,354 447,497 441,271 424,193 426,959
263,704 227,489 220,773 226,331 218,477 234,873 281,502
812,080 706,846 663,566 633,343 603,846 666,244 645,655
581.05 505.72 474.59 452.91 431.77 476.39 461.50
45.1 50.1 46.5 46.3 43.8 46.7 44.2
28,363 25,409 25,016 25,085 24,244 23,854 23,715
Environmental and safety investment Greenhouse gas emissions from production processes
(¥ billion) (million tons CO2 equivalent)
8 7.88 5
4 4.11 4.17 4.06

6 3.84
5.20 5.38
3 3.03
4 3.80 3.90
2
2
1
0 0
'12 '13 '14 '15 '16 (FY) '12 '13 '14 '15 '16 (FY)
Environmental investment Safety investment Carbon dioxide Nitrous oxide Methane HFCs PFCs
Sulfur hexafluoride
Number of women working as managers3 Employees using parental leave4
600 600 582

534 556
500 500 500
468
454 454 457
400 410 400
370
300 300
200 200
100 100
0 0
'13/6 '14/6 '15/6 '16/6 '17/6 '12 '13 '14 '15 '16 (FY)
Women Men
3
esults as of June 30 each year for personnel employed by Asahi Kasei Corp.,
R 4
esults for personnel employed by Asahi Kasei Corp., Asahi Kasei Microdevices
R
Asahi Kasei Microdevices Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei
Materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. (Asahi Pharma Corp., and Asahi Kasei Medical Co., Ltd. (Asahi Kasei Chemicals Corp., Asahi
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., and Asahi Kasei E-materials Corp. Kasei Fibers Corp., and Asahi Kasei E-materials Corp. included in FY2015 and earlier).
included in FY2015 and earlier).
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- Business sector
agement initiative is focused on raising corporate
value through optimal allocation of management
resources across the three sectors.
Material
FY2017 net sales and operating income*
Net sales and operating income are forecasted to increase in all

three sectors.
Health Care
Homes
14.8 %
Material
52.4 %
FY2017
Homes
Net sales
32.8 %
(planned)
¥1,990 billion
Health Care
18.7 %
Material
47.4 % Health Care

FY2017
Operating income
Homes (planned)
33.9 % ¥165 billion
* Original forecast announced on May 11, 2017.

Note: Percentages shown exclude “Others” category and “corporate expenses and
eliminations.”

FY2017 forecast Business units Major products
● Asahi Kasei Corp.

● Asahi Kasei Microdevices Corp.
Net sales
¥ 1,033.0 billion
Fibers & Textiles SBU Hipore™ lithium-ion battery
(LIB) separator
Membrane-process
ion-exchange plant
Petrochemicals SBU
Performance Polymers SBU
Operating income
Performance Materials SBU
¥ 90.0 billion
Consumables SBU
Separators SBU
Asahi Kasei Microdevices
Corp. (electronic devices)
Lamous™ microfiber suede
Acrylonitrile plant
● Asahi Kasei Homes Corp.

● Asahi Kasei Construction
Net sales Materials Corp.
¥ 647.0 billion
Homes Hebel Haus™ Atlas™ condominiums
Construction Materials
Operating income
¥ 64.5 billion
Neoma Foam™ phenolic foam

Hebel Building™ System insulation panels
● Asahi Kasei Pharma Corp.

● Asahi Kasei Medical Co., Ltd.
Net sales ● ZOLL Medical Corporation
¥ 291.0 billion
Pharmaceuticals Pharmaceutical products
Planova™ virus removal
filter
Medical Care
Acute Critical Care
Operating income
¥ 35.5 billion
ZOLL AED Plus™ LifeVest™ wearable defibrillator

automated external
defibrillator

Operating Segments
Material
From unique fiber materials to petrochemicals and synthetic resins, and from
consumables 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

composition
52.3 % 46.8 %
1,200 120
1,033.0
977.9
900 88.5 90.0 90
600 60
Fiscal
2016 300 30
Hideki Kobori
0 0
Executive Officer '16 '17* (FY)
for Material business sector (forecast)
Net sales (left scale) Operating income (right scale)
President & Representative Director, Not including “Others” category and
Presidential Executive Officer, corporate expenses and eliminations. * Beginning with FY2017, the Energy Division, which was
Asahi Kasei Corp. formerly included in Others, is reclassified into the Material
segment. FY2016 figures are recalculated in accordance
with the new classification.
Main products Highlights

■ Bemberg™ cupro fiber
■ Roica™ premium stretch fiber
■ Spunbond nonwovens • Launch of Klaran™ UVC LEDs for
■ Leona™ nylon 66 filament
disinfection
■ Acrylonitrile (AN)
■ Styrene With light emission in the vicinity of 265 nm—the
■ Polyethylene (PE)
wavelength most effective for disinfection—and
■ Engineering plastics
featuring high output with a small footprint,
Klaran™ affords unprecedented flexibility in the
■ Synthetic rubber
design of disinfection products and systems. A
■ Microza™ hollow-fiber filtration
wide range of applications is expected to include
membranes
healthcare, home electronics, and various other
■ Ion-exchange membranes
fields where UVC disinfection of water, air, and
■ Ceolus™ microcrystalline cellulose
surfaces had previously been impractical.
■ Saran Wrap™ cling film
■ Sunfort™ photosensitive dry film
■ Hipore™ and Celgard™ Li-ion battery
• Capacity expansion for Hipore™
separators LIB separator
■ Daramic™ lead-acid battery separator With increasing demand for hybrid-electric and all-
■ Mixed-signal LSIs electric vehicles worldwide, the lithium-ion battery
■ Hall elements (LIB) market is forecasted to grow substantially in
automotive applications, in addition to applica-
tions for consumer electronics. Capacity expansion
at the plant in Moriyama, Shiga, will further
reinforce our capability to provide stable supply to
meet rising global demand for LIB separators.

Fibers and Textiles
Q Please tell us about your proactive investments for growth and the earnings contribution of each business,
as well as the outlook for fiscal 2017.
Sales and operating income decreased in fiscal 2016 with the impact of the stronger yen. We aim to
A increase sales and operating income in fiscal 2017 by leveraging the investments we made for growth.
Although shipments were firm in fiscal 2016, sales and operating capacity—for Bemliese™ continuous-filament cellulose nonwoven
income decreased with the impact of the stronger yen. Demand to meet growing demand in facial masks, and for Leona™ nylon 66
for Bemberg™ cupro fiber continues to grow as material for filament to meet growing demand in air bags—are contributing
ethnic garments in India and Pakistan as well as functional to increased earnings.
innerwear. Sales of Lamous™ microfiber suede are expanding in We forecast firm demand for each product in fiscal 2017, with
automotive interior applications. Recent expansions of production recent capacity expansions expected to enable further growth.
Chemicals
Q You reported lower sales but increased operating income for the Chemicals business in fiscal 2016. What is
the current situation and future outlook for petrochemicals, synthetic rubber, and engineering plastics?
Sales decreased and operating income increased in fiscal 2016 as the stronger yen impacted
A each product category and terms of trade for acrylonitrile (AN) improved. We forecast increased
shipments of each product in 2017 while a scheduled maintenance turnaround of the naphtha
cracker will have a negative impact, resulting in higher sales and lower operating income.
Petrochemicals sales decreased in fiscal 2016 with lower ship- but lower operating income as an effect of a maintenance turn-
ments of styrene following the strengthening of petrochemical around scheduled at the naphtha cracker of Asahi Kasei Mitsubishi
operations in Japan, but operating income increased with Chemical Ethylene Corp. in Mizushima, Okayama, Japan.
improved terms of trade for AN. In performance polymers, In July 2017 we decided to increase production capacity
sales increased with growing shipments of synthetic rubber for of our plant in Singapore for synthetic rubber for fuel-efficient
fuel-efficient tires and engineering plastics, but operating income tires to meet rapidly growing demand against a background of
decreased due to the impact of the stronger yen. greater motorization in emerging markets and more stringent
We forecast higher sales in fiscal 2017 with further growth in environmental regulations around the world.
synthetic rubber for fuel-efficient tires and engineering plastics,
Electronics
Q How did separators and electronic devices perform in fiscal 2016, and what is your outlook moving
forward?
Sales grew with strong shipments of each product in fiscal 2016, but operating income decreased as an
A effect of the stronger yen and amortization of goodwill related to the acquisition of Polypore. We forecast
higher sales and operating income in fiscal 2017 with further shipment growth for each product.
Fiscal 2016 separators sales increased with greater shipments We plan to make further proactive expansions of our LIB separator
across the board and a full-year contribution from Polypore which supply infrastructure, raising our capacity to 1.1 billion m2/year
we acquired in the second quarter of fiscal 2015, but operating by 2020. Both sales and operating income for electronic devices
income decreased with the impact of the stronger yen and amor- increased in fiscal 2016, despite the impact of the stronger yen,
tization of goodwill related to the Polypore acquisition. We have with growing shipments of audio devices for smartphones.
decided to increase production capacity for Hipore™ lithium-ion We forecast higher sales and operating income in fiscal 2017
battery (LIB) separator to meet brisk demand growth in automo- with increased shipments of both separators and electronic
tive applications, including hybrid-electric and all-electric vehicles. devices.

Operating Segments
Homes
With our homes business that provides high-quality products and services for
Long Life Homes that maintain high customer satisfaction that lasts more than
half a century, and our construction materials business that provides innovative
and original high value-added products, we set the stage for a rich and fulfilling
lifestyle.

composition
33.2 % 35.5 %
800 100
619.0 647.0
600 75
64.1 64.5
400 50
Fiscal
2016 200 25
Fumitoshi Kawabata
Executive Officer 0 0
for Homes business sector '16 '17
(forecast)
Senior Executive Officer, Asahi Kasei Corp.
President & Representative Director, Not including “Others” category and Net sales (left scale) Operating income (right scale)
Asahi Kasei Homes Corp. corporate expenses and eliminations.
Main products Highlights

■ Hebel Haus™ unit homes
■ Hebel Maison™ apartment buildings
■ Atlas™ condominiums
■ Hebel Rooms™ apartment rental
• Launch of Hebel Building™ System
network Asahi Kasei Homes launched the sale of its Hebel
■ Remodeling Building™ System enabling higher quality, higher
■ Mortgage financing precision construction of medium-rise buildings by
■ Hebel™ AAC panels
using systematic manufacturing techniques, devel-
■ Neoma Foam™ phenolic foam
oped mainly targeting 4–6 story buildings with space
insulation panels for commercial use on upper floors. By leveraging
■ Foundation systems
the company’s core technology for heavy-frame steel
■ Structural systems and components
structures as well as the manufacturing and construc-
tion systems of the Hebel Haus Frex™, the new system
enables the construction of buildings up to 8 stories
while maintaining high quality and precision. It also
affords exceptional flexibility in design, with ceiling
height ranging from 2.8 to 3.5 m, suitable for com-
mercial purposes.
• Launch of Comfortable Space Laboratory™

Asahi Kasei Construction Materials launched its Comfortable Space Laboratory™ in Sakai,
Ibaraki, Japan, as a facility to exhibit and allow visitors to experience the outstanding
thermal insulation performance of Neoma Foam™ panels. The laboratory will serve as
a venue to raise public awareness on the importance of the thermal environment and
insulation performance, as well as the quality of Neoma Foam™ products.

Homes
Q How did your homes business perform in fiscal 2016, and how is the trend for home orders?
Both sales and operating income decreased in fiscal 2016 with lower deliveries of order-built homes. After
A the full resumption of advertising, however, orders recovered to the same level as in the previous year.
Deliveries of Hebel Haus™ unit homes and Hebel Maison™

apartment buildings decreased reflecting a decline in orders
received in fiscal 2015, and advertising expenses increased. Labor
costs increased for remodeling operations, while real estate
Medium-rise built with the Hebel
operations grew in line with an increased number of rental units Building™ System
under management. For homes overall, both sales and operating
income decreased.
After the full resumption of advertising in May 2016, home
orders recovered to the previous year’s level and increased by
+0.1% for the full year. To gain further growth in orders, we held
an “Outdoor Living Fair” to showcase how the rooftop of Hebel
Haus™ homes can be filled with enjoyable greenery and nature
even while generating electricity. We also expanded the market-
ing area for Hebel Maison™ apartment buildings with features that
enrich the living environment for tenants with dogs and cats.
Hebel Maison Boriki™
Construction Materials
Q Please tell us about the situation in fiscal 2016, and prospects for the future.
Both sales and operating income decreased in fiscal 2016 with lower shipments of autoclaved
A aerated concrete (AAC) panels and foundation systems. Although feedstock costs are expected to
increase, fiscal 2017 operating income is forecasted to be even with the previous year thanks to
increased shipments of Neoma Foam™ high-performance foam insulation panels.
Fiscal 2016 shipments of Neoma Foam™ grew mainly for use in

wood-frame houses, but shipments of foundation systems and
Hebel™ AAC panels declined. Both sales and operating income
decreased for construction materials overall.
Neoma Foam™ phenolic foam
Although demand related to construction projects in insulation panels
preparation for the Tokyo Olympics and Paralympics is anticipated
to begin materializing around the middle of fiscal 2017, the
business environment for construction materials is expected to be
challenging with stagnating demand related to construction of
rental homes and rising transportation costs. We forecast sales to
increase and net income to be on the same level as the previous Comfortable Space
year with shipment growth mainly in Neoma Foam™ insulation Laboratory™
panels.

Operating Segments
Health Care
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 purification devices for chronic and acute renal failure, and various
intractable diseases; and products for the manufacturing process of biophar-
maceuticals and other new drugs. Our life-saving products in the field of acute
critical care include AEDs, defibrillators for professional use, and intravascular
temperature management systems.
composition
14.5 % 17.7 %
300 291.0 60
Yutaka Shibata 270.1
Executive Officer
for Health Care business sector (joint) 200 40
35.5
Primary Executive Officer, Asahi Kasei Corp. 31.9
President & Representative Director, Fiscal
Asahi Kasei Pharma Corp.
2016 100 20
0 0
'16 '17
(forecast)
Not including “Others” category and Net sales (left scale) Operating income (right scale)
corporate expenses and eliminations.
Highlights
Richard Packer • Japanese approval of Reclast® for

intravenous infusion 5 mg*
Executive Officer
for Health Care business sector (joint) Asahi Kasei Pharma obtained approval for the sale of
Primary Executive Officer, Asahi Kasei Corp. Reclast® for intravenous (i.v.) infusion 5 mg in Japan
Chairman & Board Director, for the treatment of osteoporosis. Reclast® is an
osteoporosis drug capable of a year-long treatment
with intravenous administration one time each year.
* Reclast® is a bisphosphonate developed by Novartis Pharma
AG and was first approved in 2007 in the US and EU followed
Main products by approval in over 115 countries worldwide. Reclast® is a
trademark of Novartis Pharma AG.
■ Teribone™ osteoporosis drug
■ Recomodulin™ anticoagulant • New spinning plant for
■ APS™ polysulfone-membrane Planova™ BioEX filters
dialyzers
■ Therapeutic apheresis devices Asahi Kasei Medical constructed a new plant
■ Planova™ virus removal filters for the spinning of hollow-fiber membranes for
■ Defibrillators for professional use
Planova™ BioEX virus removal filters at its Planova
Oita Plant in Oita, Japan. Incorporating hydro-
■ LifeVest™ wearable defibrillator
philic polyvinylidene fluoride (PVDF) hollow-fiber
■ AED Plus™ automated external
defibrillator membranes, Planova™ BioEX virus removal filters are used in the production process for
■ Thermogard System™ temperature
biotherapeutic products such as biopharmaceuticals and plasma derivatives. The hollow-
management system fiber membranes produced at the new spinning plant will be used in the assembly of
Planova™ BioEX filters at plants in Oita and Nobeoka.

Pharmaceuticals and Medical Care
Q Please tell us about fiscal 2016 results and the fiscal 2017 forecast for the pharmaceuticals and medical care
businesses.
Net sales and operating income decreased in fiscal 2016 with reduced reimbursement prices and
A competition from generics. We are forecasting both sales and operating income to increase in fiscal
2017 with increased shipments of Teribone™ osteoporosis drug and Planova™ virus removal filters.
Although shipments of Teribone™ osteoporosis drug and

Recomodulin™ thrombomodulin increased, fiscal 2016 sales and
operating income from pharmaceuticals decreased with the impact
of reduced reimbursement prices, including repricing of Teribone™ Medical care products
for market expansion, and the impact of competition from generics
on Flivas™ agent for treatment of benign prostatic hyperplasia.
Although shipments of Planova™ virus removal filters increased,
sales and operating income from medical care decreased with the
impact of the stronger yen and the impact of reduced reimburse-
ment prices for dialysis-related products in Japan.
In fiscal 2017, in pharmaceuticals operations we expect
increased R&D expenses related to the development of an auto-
injection formulation of Teribone™ and a further impact on Flivas™
due to competition from generics, but increased shipments of
Teribone™ following approval to extend the maximum duration
of treatment. In medical care operations we expect firm sales
centering on Planova™. Increased sales and operating income are
forecasted for pharmaceuticals and medical care as a whole. Pharmaceuticals
Acute Critical Care

Q The acute critical care operation continues to grow. Please tell us about fiscal 2016 results and the fiscal
2017 forecast.
A Fiscal 2016 saw continued growth in operating income. We forecast further growth in fiscal 2017.
The acute critical care business continued to expand well in fiscal

2016. Although sales showed a decline when translated into
consolidated accounts due to the impact of the stronger yen,
both sales and operating income increased on a US-dollar basis. LifeVest™ wearable defibrillator
The LifeVest™ wearable defibrillator business continued to expand

well, especially in the US, and sales of other products such as defi-
brillators and related accessories also increased. Operating income
grew in both Japanese-yen and US-dollar terms despite increased
SG&A expenses associated with an ongoing increase in personnel
to reinforce sales activities. Sales on a US-dollar basis have grown
at an average of 15% per year for the past 10 years.
The trend in fiscal 2017 will be largely unchanged, with con-
tinuous growth expected. Although we anticipate higher SG&A ZOLL AED Plus™
automated external
expenses with reinforced sales activities, we forecast higher net defibrillator
sales and operating income centering on the LifeVest™ business.

Feature 4: Research & Development
New business creation with

R&D leveraging diversification
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

Our main areas of
Tomorrow 2018” medium-term management focus to address Foster and acquire
core technology
initiative is “creation of new businesses.” Having social issues
Acquire technology seeds
various technologies and diverse business
Apply technology laterally Heighten
operations, the Asahi Kasei Group is striving to added value
Society of clean
create new value through combinations among environmental CVC Business models
energy Strengths of
core technologies, multifaceted business Coordination/ Solutions
Asahi Kasei
models, and diverse human resources. The areas combination
Society of
of “clean environmental energy” and “healthy/ healthy/ Utilize market M&A
comfortable longevity with peace of mind” are comfortable channels
longevity with
targeted in R&D to create new businesses that peace of mind Enhance and fully
utilize business platforms
provide solutions to challenges faced by society.
■ Aims and approach for new business creation

The Asahi Kasei Group will create new businesses by leverag- performing in-house R&D, we will actively apply new external
ing our strengths in technology and operations from a 3-axis technologies to enhance our core technologies. The third
perspective. The first axis is to enhance and fully utilize our axis is to heighten added value. In addition to just supplying
market channels. By utilizing the various market channels and substances, which had been our main approach particularly in
platforms of each business area throughout the Asahi Kasei material businesses, we will place greater emphasis on build-
Group, we will develop a broad range of new businesses. The ing new business models around services and solutions.
second axis is to foster and acquire core technology. While
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
Existing technologies/
1. C oordinate with strategic business units and core operating 3. C oordinate with strategic
companies business units and core
Maximizing value of established businesses operating companies
improvements/
• B rand strength/market channels • C

ost competitiveness • Services •M arketing
combinations
• F ull utilization of Asahi Kasei

2. U
tilize information technology, study new business models Group technologies and business
platforms
Creating added value from new perspectives cquiring missing parts (CVC)
•A
igher added value from solutions
•H
4. R eview programs, examine originality and differentiation 5. F ocus on strong points and 6. B asic/exploratory research in
accelerate collaboration with universities
Newly developed
B-to-C in Health Care and Homes sectors

• B etter therapy ccelerating R&D
•A and government research organs
cquiring technology seeds/
technologies
• Comfortable residential living •A Long-term perspective

sprouts by CVC evelop/acquire leading-edge
•D
B-to-B in Material sector ew business models
•N technology
isregarding mature markets
•D ollaboration with outside research
•C
• Pursuing originality and differentiation in growth markets institutions

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. We aim to
create new businesses by leveraging our diversification through seamless connections between
projects as well as through proactive collaboration utilizing outside resources including CVC.
R&D at the Asahi Kasei Group
The strength of the Asahi Kasei Group is the ability to create a number of core technologies. Since our founding, we have
new businesses based on our wide range of technologies constantly performed R&D to meet the world’s needs and cre-
and to manage diverse fields of operation. Throughout our ated new businesses based on technology. While our business
history of diversification, we have leveraged a wide variety of environment and the structure of society are rapidly changing,
technologies cultivated in chemicals operations to establish we will continue to strive for the creation of new value.
■ R&D organization
We reviewed our R&D organization at the time of our transi- in coordination with the R&D sections of each SBU. Under
tion to an operating holding company configuration in April the new configuration, R&D with a longer perspective is
2016. Material-related R&D is now combined together under seamlessly connected with product development peripheral
Corporate Research & Development, with efforts advancing to established businesses.
Asahi Kasei Corporation
Corporate Research & • Healthcare R&D Center Corporate Production

Development • Synergistic Solution Initiative Technology
• Technology Policy Center • Yamashita Laboratory • Maintenance Technology Center
• CVC Office • Chemistry & Chemical Process Laboratory • Engineering Center
• Corporate IP • Fibers & Textiles Technology Center • Production Technology Center
• Analysis & Simulation Center • Performance Polymers Technology Center
• R&D Center • Performance Materials Technology Center
Clean Energy Project UVC Project Residential Living Project
Material Homes Health Care

Asahi Kasei Asahi Kasei Homes Asahi Kasei Pharma
(operating function) • T echnology Div. •C linical Development Center
• F ibers & Textiles • N ew Business • P harmaceutical Research Center
• P etrochemicals Development Dept.
• P erformance Polymers • H ousing R&D Center
• P erformance Materials • L ifestyle R&D Laboratory Asahi Kasei Medical
• C onsumables •M
edical Products
• S eparators Development Div.
Asahi Kasei
Asahi Kasei Construction Materials
ZOLL Medical
Microdevices •P roducts & Marketing
Development Dept. • R &D departments
•R
esearch &
• M aterials Technology Dept.
Development Center

Feature 4: Research & Development
■ 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.
North America:
Acquiring new technology (CVC);
R&D sites overseas Healthcare-related R&D; new business creation
Waltham, Massachusetts
Asahi Kasei Pharma America
Asia, ASEAN:
Technical Center located in close
proximity to market demand Chelmsford,
Massachusetts
Dormagen, Germany ZOLL, CVC
Engineering Plastics
Technical Center
Shanghai, China Menlo Park,
Engineering Plastics Technical Center California
CVC
Guangzhou, China
Owensboro, Kentucky
Engineering Plastics Technical Center
Polypore
Albany,
Vietnam New York
Crystal IS: UVC LED
Computer Aided Engineering Charlotte, North Carolina
(CAE) Polypore
R&D sites in Japan

Core R&D sites
Kawasaki, Ohito, Fuji,
Moriyama, Mizushima,
Nobeoka, etc.
■ 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 Corporate expenses Annual R&D expenses

14.3% 17.1% (¥ billion)
90
Breakdown of Fibers 81.1

79.6
3.7%
80
R&D expenses
75.5
Health Care
24.8%
¥ 79.6 billion
(FY 2016) Chemicals
70
71.1 71.1
66.3
21.4% 62.3
Construction 60
Materials
1.0%
Homes 3.3% Electronics 14.5% 0
’10 ’11 ’12 ’13 ’14 ’15 ’16 (FY)

■ Core technologies that support Asahi Kasei products
Compound semiconductor/LSI
● Application-specific IC ● Electronic compass
● IR sensor/gas sensor ● Magnetic sensor
Homes/construction materials
Catalyst/process Compound ● Hebel HausTM unit homes
Software
● Cyclohexanol ● AN/MMA semicon- algorithms ● Hebel MaisonTM apartment buildings
● CreolexTM metallocene polyethylene Catalysis/ ductors
● HebelTM autoclaved aerated concrete
inorganic Foam
● SunfineTM ultrahigh molecular insulation ● Neoma FoamTM phenolic foam insulation
synthesis
weight polyethylene
Chemical Anti-quake/
process construction methods/
anti-fire/durability
Core
Polymers/processing Polymer design/
polymerization/ Technologies Bio
● Performance polymers:
pharmaceuticals
LeonaTM, XyronTM, TenacTM, etc. processing
● Synthetic rubber:
TuftecTM/TufpreneTM, etc.
Functional Biological Health Care
● SB latex/Dura-PhotoTM polymer information ● Prescription drugs: TeriboneTM, RecomodulinTM, etc.
● AsacleanTM
Polymeri- Virus processing ● Acute critical care devices: AEDs, LifeVestTM, etc.
● Saran WrapTM cling film zation/ removal/
Phase ● Blood purification:
● Photosensitive resins: spinning/ separation/ blood puri- Artificial kidneys (APSTM),
SunfortTM, PimelTM, APRTM/AFPTM cellulose electro- fication therapeutic apheresis devices
● NovacureTM latent hardener Fibers chemistry
● PlanovaTM virus removal filters
● Spunbond
nonwovens Membranes/separation
● BemlieseTM ● MicrozaTM
● LamousTM ● Ion-exchange membranes
● RoicaTM ● HiporeTM
● LeonaTM filament
● BembergTM
IP Strategy
To facilitate the creation of new businesses as an important The business units take the lead in formulating an IP
management task in the Asahi Kasei Group, the management strategy that matches the characteristics of each operation.
strategy, IP strategy, and R&D strategy of each operation are Emphasis is placed on the quality of individual patents as well
integrated as one. IP activities directly contribute to the man- as the quantity of patents. Strategic licensing is performed
agement of operations by acquiring IP rights from R&D results when it is deemed an effective means to heighten the contri-
to gain business advantage, enabling the creation of new bution of IP rights to our own business operations.
businesses, and securing the profitability of existing businesses.
Japanese Patent Overseas Patent Japanese Trademark Overseas Trademark

Applications Applications Applications Applications
1.6% 5.4% 8.9% 12.2% 7.2% 5.7% 10.0% 1.2%
4.4% b 2.0%
a 34.19% 1.4% a b 4.9%
15.7%
a 4.9%
11.8% 10.9% c 20.7% b
c c
2.9%
Total Total Total b
c
3.7% b Total
5.5% b 834 4.1% b 147* 140 0.7% 81 a 75.3%
a
60.5%
a a
37.2% 47.1%
■ Holding company ■ Material (a: Chemicals b: Fibers c: Electronics) ■ Homes (a: Homes b: Construction Materials) ■ Health Care (Pharmaceuticals, Medical Care) ■ Others
(From January 1 to December 31, 2016)
* Overseas applications for a single patent family are counted as one.

CSR
Medium-Term Management Initiative and CSR Fundamentals
The Asahi Kasei Group is focused on providing solutions to various challenges faced by society in accordance
with our Group Mission of contributing to life and living for people around the world.
Under our Cs for Tomorrow 2018 management initiative which began in fiscal 2016, we are emphasizing
business operations that contribute to a “society of clean environmental energy” and
a “society of healthy/comfortable longevity with peace of mind” based on four CSR Fundamentals:
Compliance, Responsible Care, Corporate Citizenship, and Respect for Employee Individuality.
Position of CSR Fundamentals
Creating for Tomorrow Area of focus
The
The
community
Community The Compliance
employee outreach environment
Employee Environmental
fulfillment protection
The Sustainable Increase The

customer
in Corporate Value shareholder P. 30
Customer Shareholder
satisfaction returns
The The local
supplier economy
Fair business Local economic
Society of clean
dealings participation
Society of healthy/comfortable
Responsible Care
environmental energy Business longevity with peace of mind
operations
Creation of
Pursuit of new businesses
P. 54
Acceleration of
growth and
globalization
profitability
“Cs for Tomorrow 2018” Respect for

strategic management initiative
CSR in Action
Employee Individuality
CSR Fundamentals P. 58
Compliance, Responsible Care, Corporate Citizenship,
Corporate Citizenship
Group Mission
Contributing to life and living for people around the world P. 60

Our four CSR Fundamentals of Compliance,
Responsible Care, Corporate Citizenship, and
Respect for Employee Individuality are applied
throughout the Asahi Kasei Group.
CSR Fundamentals
Key subjects under CT2018 Goals
I dentification of • Gain trust through not only thorough

compliance-related issues compliance with laws and regulations, but
also consideration of generally accepted
nriching the risk compliance
E social norms
system •U
nderstand risks in management, and
establish a system to mitigate them and
enable sustainable development
Environmental protection • Contribute to establishment of a recycling-

oriented society
Operational safety
• Enrich system for risk assessment
Workplace safety and hygiene • Zero workplace injuries
Health maintenance •M aintain and promote employees’ health
Product safety • Enrich RC compliance
• Minimize risks from chemicals
Managing chemical substances
issemination of
D • Employee engagement in challenging and
Human Resources Principles fulfilling work in global business operations
Developing human resources •W

orkplace environment that respects
(global human resources) diversity and work-life balance, enabling
employees to perform to their full potential
Valuing human rights and diversity
Platinum Kurumin certification for
Balancing work and family life outstanding support for the devel-
opment of the next generation.
Stakeholder dialog • Maintain good relationships with

stakeholders
• Customers
• Investors •U
tilize our resources to provide solutions to
challenges faced by society
• Suppliers
• Public outreach
Community fellowship

Responsible Care
CSR Fundamentals Safety is a fundamental prerequisite for the continuation of operations as a corporate member of
society. To ensure that every aspect of safety is maintained, the Asahi Kasei Group implements a
Responsible Care (RC) program comprising the six pillars of operational safety, workplace safety and
hygiene, environmental protection, health maintenance, product safety, and community outreach.
Message from the Asahi Kasei adopted an operating holding company configuration in fiscal 2016 and started
Executive for RC 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,
Masafumi Nakao reinforcing R&D to provide solutions to global warming and other environmental issues, in
Representative Director, Vice-
Presidential Executive Officer order to raise our corporate value for our various stakeholders.
Asahi Kasei Corp.
Responsible Care at Asahi Kasei

RC represents the commitment and initiative to secure and improve safety and environmental protection at every step of
the product life cycle through the individual determination and responsibility of each 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 encompass operations in all fields, including
homes, health care, fibers, electronics, construction materials.
* JRCC: Operated as the Japan Chemical Industry Association’s RC Committee since April 2011.
Asahi Kasei Group RC Principles We give the utmost consideration to environmental protection, quality assurance, operational safety, workplace
safety and hygiene, and health maintenance, throughout the product life cycle from R&D to disposal, as
RC at the Asahi Kasei Group is preeminent management tasks in all operations.
•W e give full consideration to the global environment, and make efforts to reduce the environmental
guided by the following principles: burden of all operations.
In April 2016, a statement •W e continuously provide safe products and services with the quality that gives customers a sense of
security and satisfaction.
regarding quality assurance was •W e strive for stable and safe operation while preventing workplace accidents and securing the safety of
added, and the six elements were personnel and members of the community.
•W e strive for a comfortable workplace environment, and support the maintenance and promotion of
condensed into four. 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 Certified compliance with internationally standardized

The management system of Asahi Kasei Group RC is management systems is obtained for the RC Management
maintained in accordance with our Group RC Management System of the Asahi Kasei Group. We have obtained ISO 14001
Guidelines and other internal standards. The RC Committee, a environmental management system certification for environ-
corporate organ under the direct authority of the President of mental protection and ISO 9001 quality management system
Asahi Kasei, deliberates RC plans and results and ensures that certification for product safety. An Occupational Health &
continuous reevaluation and improvement are systematically Safety Management System (OHSMS) is adopted for workplace
pursued with “plan-do-check-act” (PDCA) cycles—for the Asahi safety, hygiene, and health.
Kasei Group as a whole, within each core operating company * A site or group of sites consisting of several plants and facilities of various core
and Region*, and within individual plants and facilities. operating companies. Each Region General Manager is responsible for the unified
implementation of RC in the respective Region.

For more information, please refer to the Asahi Kasei Group CSR website.
http://www.asahi-kasei.co.jp/asahi/en/csr/
RC objectives and results ★★★Complete ★★Satisfactory ★Unsatisfactory

FY2016 RC Objectives FY2016 Results Attainment FY2017 RC Objectives
Preparation for follow-up on RC compliance at overseas companies Review RC framework (including quality assurance)
Enhance RC compliance ★★
(start in FY2017 using external organizations such as ERM) Enhance RC compliance
RC training course partially revised
RC compliance
Advance RC education and training for section managers and Group discussions enhanced ★★ Further advance RC education and training
assistant chiefs Follow-up until all members pass test (gaining fuller understanding)
Communication and coordination with superiors
RC at affiliates enhanced through instructions and support
Enhance RC at affiliates ★★★ Enhance RC at affiliates
by core operating companies
RC reports of 2 core operating companies and
Enhance dialog with the public 8 plant complex sites were used in community outreach
★★★ Continue to enhance dialog with the public
No polluting accidents or serious incidents,
Avoid all polluting accidents and minor incidents ★ Avoid all polluting accidents and minor incidents
27 incidents (2 other than freon leaks)
Promote recycling-oriented society: Promote recycling-oriented society:
· Final disposal of 0.3% or less of generated industrial waste Goal reached with final disposal rate of 0.3% ★★★ · Maintain rate of final disposal at 0.3% or less of generated industrial waste
· Recycling rate of at least 90% Goal reached with recycling rate of 98% · Maintain recycling rate of at least 90%
Environmental protection
Prevention of global warming: Prevention of global warming:

· Reduce CO2 emissions in Japan by 28.2% from FY2005 level 45% reduction from FY2005 level · Reduce CO2 emissions in Japan by 28.7% from FY2005 level
· Reduce global CO2 emissions by 5% from FY2010 level 29.6% reduction from FY2010 level ★★★ · Reduce global CO2 emissions by 5% from FY2010 level
· Reduce GHG emissions in Japan by 34.8% from FY2005 level 48.6% reduction from FY2005 level · Reduce GHG emissions in Japan by 34.8% from FY2005 level
· LCA/CO2 contribution ratio1 of 8.3 LCA/CO2 contribution ratio of 10.3 · Achieve LCA/CO2 contribution ratio of 8.5
Protect water resources: Protect water resources:
★★★
· Water resource contribution ratio2 of 8.3 Water resource contribution ratio of 8.5 · Water resource contribution ratio of 8.8
Control emissions of chemical substances: Control emissions of chemical substances:
· Control emissions of PRTR-specified substances Release of PRTR-specified substances and emission of VOCs ★★★ · Control emissions of PRTR specified substances
· Control emissions of air and water pollutants reduced by 92% and 87%, respectively, from FY2000 level · Control emissions of air and water pollutants
Continuously advanced actions in Nobeoka, Moriyama, and Fuji;
Preserve biodiversity when procuring biological resources ★★★ Promote preservation of biodiversity at each site
started new program at Asahi Kasei Jyuko Co., Ltd. in FY2016
Advance CSR procurement Implemented CSR procurement ★★★ Advance CSR procurement
No serious industrial accidents,
Avoid all industrial accidents ★★★ Continue to avoid all industrial accidents
3 incidents including minor industrial accidents and slight injuries
Continuously monitor for hazards of fire, explosion, and leaks; Review performed at time of on-site confirmation Enhance risk assessment:
★★★
perform training of managers for preventing abnormal reactions · Continuously monitor for hazards of fire, explosion, and leaks
Operational safety
· Continue ongoing review to prevent abnormal reactions and

Confirmed progress in preventing abnormal reactions and confirm interlock functions
Prevent abnormal reactions, confirm interlock functions on-site ★★★
securing interlock functions
· Enhance pre-investment safety assessment system
Control changes to equipment and operating conditions Ongoing confirmation of implementation at RC Audits, etc. ★★★ Control changes to equipment and operating conditions
Review earthquake response and enhance emergency response systems: Enhance earthquake response system:
· Confirm seismic resistance of high-pressure gas facilities and Completed according to the plan ★★★ · Review earthquake preparedness
formulate plans (emergency facilities, disaster response supplies)
· Implement seismic retrofitting for specific and non-specific buildings Delay in some retrofitting for FY2016 ★★ · Advance seismic retrofitting of specific and non-specific buildings
Monitor for items in need of replacement and uninspected items, Information shared with Corporate Production Technology; ★★★ Monitor for items in need of replacement and uninspected items,
implement remediation ongoing review with new perspectives implement remediation
Avoid all workplace injuries: No serious workplace injuries:
· Achieve frequency rate3 of 0.1 or less 0.38 ★ · Achieve frequency rate of 0.1 or less (1.0 or less overseas)
· Achieve severity rate4 of 0.005 or less Over 0.005 (tentative) · Achieve severity rate of 0.005 or less
Deepen utilization of OHSMS:
Risk assessment level confirmed at audit and ★★
· Enhance risk assessment for workplace tasks improvements applied as necessary
Avoid all accidents in “caught in/between machinery” category Prevent all accidents in “caught in/between machinery” category:
(no lost-workday injury):
Workplace safety and hygiene
Advanced risk assessment for mechanical equipment, but one ★ · Perform sound risk assessment for mechanical equipment
· Perform sound risk assessment for mechanical equipment lost-workday injury in “caught in machinery” category occurred
in irregular work in February 2017 · Through standards of behavior for safety
Avoid chemical burn, poisoning, fire, explosion, etc.
Avoid workplace injuries related to chemical substances:
related to chemical substances (no lost-workday injury):
★★
· Perform sound risk assessment for chemical substances Advanced risk assessment for chemical substances and manage- · Perform sound risk assessment for chemical substances
· Perform sound management of workplace environment ment of workplace environment, but 1 lost-workday injury occurred · Perform sound management of workplace environment
Prevent injuries during working hours unrelated to operating procedures Prevent injuries during working hours unrelated to operating procedures
and during commuting: and during commuting:
· Prevent lost-workday injury related to stairways · 4 lost-workday injuries due to falls related to stairways and walking ★★ · Thorough standards of behavior for safety related to stairways and walking
· Prevent traffic accidents resulting in harm to self or others · I
njuries due to traffic accidents resulting in harm to self or others · Program to prevent traffic accidents resulting in harm to self or others
while commuting or traveling for sales while commuting or traveling for sales decreased from 4 to 2 while commuting or traveling for sales
Enhance safety management guidance of on-site contractors: Prevent serious injuries related to on-site contractors and equipment work:
★★ · Improve the level of safety management guidance related to on-site
· No serious accident of on-site contractors No serious injuries, but injury from forklift tip-over
contractors and equipment work
Reinforce management of safety on equipment work:
★★
· Zero severe injuries related to equipment work No serious injuries, but injury in “caught in machinery” category
Promote health maintenance and improvement among personnel: Promote health maintenance and improvement among personnel:
· Promote the prevention of and countermeasures to lifestyle-related Proportion of employees with health warning signs and obesity · Promote the prevention of and countermeasures to lifestyle-related
diseases increased slightly; ratio of employees who smoke decreased ★★★ diseases
Physical fitness tests performed as part of fall prevention program,
Health maintenance
· Prevent falls · Prevent falls

follow-up implemented
Promote countermeasures to mental health issues and Promote countermeasures to mental health issues and
enhance support system: enhance support system:
★★★
· Implement company-wide stress survey, utilize its results, Stress survey and follow-up implemented · Implement company-wide stress survey, utilize its results,
and perform follow-up and perform follow-up
Develop the health management system: Improve the health management system:
Held internal interviews and provided instructions
· Resolve critical tasks at each site with lateral extension ★★★ · Resolve critical tasks at each site with lateral extension
on health management activities
· Establish the health management system at affiliates and Expanded scope of affiliates and independent plants supported · Establish the health management system at affiliates and
independent plants by specialist industrial physicians independent plants
Ongoing zero lost-workday injuries related to serious product safety
health and management of chemical
No product safety incidents ★★★ Maintain zero serious product safety incidents
incidents (review the definition)
Product safety and
Enhance management of chemical substances: Enhance management of chemical substances:

substances
· P romote compliance with laws and regulations on management of · P romote compliance with laws and regulations on management of
Compliance maintained and system enhanced ★★
chemical substances in Japan and overseas chemical substances in Japan and overseas
Secretariat activities to promote JIPS; continued risk assessment
· Encourage JIPS5 activities and public disclosure of safety documents · Encourage JIPS activities
★★
Provided and received information via MSDSplus and AIS,
· Promote JAMP6 tools used new JAMP scheme chemSHERPA · Expand use of JAMP (chemSHERPA)
Number of people our health care business contributed to: Number of people our health care business contributed to:
Living in
★
comfort
· Maintain the same level as FY2015 level 14% decrease from FY2015 level · FY2018 objective: maintain FY2015 level
Number of residents in Hebel HausTM homes: Number of residents in Hebel HausTM homes:
★★
· 3.3% increase from FY2015 level 2.9% increase from FY2015 level · FY2018 objective: 10% increase from FY2015 level
1
L CA 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.

Responsible Care
Environmental protection
As in our Group Vision of “harmony with the natural environment,” the Asahi Kasei Group considers environmental
preservation as one of the most important tasks. Our major focuses are on 1) prevention of global warming, 2) promotion of
a recycling-oriented society, 3) management of chemical substances, and 4) preservation of biodiversity. For prevention of
global warming, we have established new indicators and targets to curtail greenhouse gas emissions to be achieved by fiscal
2020. Regarding promotion of a recycling-oriented society, we continue to reduce our rate of final disposal and increase our
rate of recycling. Furthermore, as a chemical company, we are working to promote safe handling of chemical substances and
actively provide safety information. We are also making efforts to reduce the impact of our business activities on biodiversity.
Highlights smallhead stickleback were recognized with an Environmental

■ Climate-change effort ranked “A–” by CDP* for two Action Promotion Award at the 9th Biotope Award ceremony
consecutive years held by the Japan Biotope Association.
Our effort with respect to climate change was given an evalua- * Formerly the Carbon Disclosure Project, CDP is an NPO based in the UK which
tion of “A–” by the CDP* in fiscal 2015 and 2016. 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’
■ Moriyama Works receives Environmental Action Promotion environmental strategy and performance in response to demand from institutional
Award investors. The CDP is now one of the most trusted evaluation organizations among
investors. It issues evaluations on a 9-rank scale of A, A–, B, B–, C, C–, D, D–, and F.
Actions in Moriyama for the conservation of endangered
Operational safety
To achieve safe operations, it is essential to build highly safe plants based on process hazard assessment prior to construction,
to perform sound plant maintenance, and to operate facilities in a stable and safe manner. The Asahi Kasei Group avoids
operational accidents through risk assessments prior to the construction of new plants, periodic inspections of existing plants
performed by auditors specialized in fire and explosion prevention, process reviews from the perspective of preventing
abnormal reactions and ensuring interlock functions, and process reviews corresponding to the age of facilities.
In fiscal 2013, we completed a program of on-site confirmation are implementing education and training for managers and
to identify hazards from the perspective of preventing abnor- operators to enable them to properly identify the cause and
mal reactions and ensuring interlock functions. From fiscal take appropriate action if problems occur, including problems
2013 onwards, we have been preparing technical documents that have not been previously encountered. There were no
on items with a high degree of hazard and on accidents and serious operational accidents inside or outside Japan during
problems which occurred in the past. From fiscal 2015, we fiscal 2016.
Workplace safety and hygiene

The effort to prevent workplace accidents is integrated in a Occurrence of workplace injuries
comprehensive OHSMS* program that combines conven-
tional safety initiatives—such as tidiness/orderliness/
cleanliness, reporting of near-accidents and potential Incidence of lost-workday Incidence of lost-workday
hazards, hazard prediction analysis, safety patrols, and case injury by event category, injury by event category,
FY2016 in Japan FY2006–2015 in Japan
studies—with risk assessments and a prevention-oriented
Total Total
plan-do-check-act (PDCA) system. 18 cases 122 cases
Integration of workplace safety initiatives
Conventional safety initiatives Risk assessments PDCA management system Fall on same level 22% Traffic accident 24%
Kickback/overexertion 17% Fall on same level 20%
Traffic accident 11% Fall from height 13%
OHSMS Contact with high-temperature Caught in/between machinery 12%
substance/object 11% Kickback/overexertion 12%
Caught in something else 11% Contact with high temperature
Caught in/between machinery 6% substance/object 5%
* Occupational Health and Safety Management System. A standardized system used
Hit by flying/falling object 6% Caught in something else 3%
to confirm that continuous improvement is being applied to measures to minimize Collision 6% Hit by flying/falling object 2%
the risks of workplace injuries and to prevent the emergence of future risks. Contact with harmful substances 6% Collision 2%
Others 4% Others 7%

For more information, please refer to the Asahi Kasei Group CSR website.
http://www.asahi-kasei.co.jp/asahi/en/csr/
Health maintenance
The Asahi Kasei Group implements various activities to help employees maintain and advance their mental and physical well-being
in accordance with its health management guidelines, including screening for lifestyle-related diseases and mental health checkups.
Enhanced health management framework industrial physicians and health nurses, are being performed in
During fiscal 2016, interviews to monitor the effectiveness of accordance with the Industrial Safety and Health Law and our
the health management centers were performed at 7 sites. health management guidelines. Further guidance and support
The series of interviews were launched in fiscal 2014 to confirm is being provided as necessary.
whether the activities at each site, including the duties of our
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 fiscal 2016, we once again
met our target of no serious product safety incidents.
Asahi Kasei Group Quality Policy ■ Effort to maintain zero serious product safety incidents
As part of the effort to prevent serious product safety
The Asahi Kasei Group creates and provides products
incidents, we established new quality assurance bylaws that
and services with the quality to meet the needs of
customers and society and ensure safety and security. stipulate quality assurance activities for RC administrators to
perform. The bylaws newly define the central role of quality
Reinforcing the quality assurance system: assurance managers in activities to enhance quality assurance,
maintaining zero serious product safety incidents and are applied in concert with our product safety guidelines
■ Consumer satisfaction and safety to secure product safety and prevent the occurrence of serious
Products and services provided by the Asahi Kasei Group product safety incidents.
include materials, products, installations, various services, and All business units of the Asahi Kasei Group apply these uni-
after-sale support. We believe that providing products and form bylaws and guidelines to assure the quality of products
services that satisfy our customers is our ultimate mission. We and services.
constantly strive to enhance our systems for quality assurance,
including product safety.
Managing chemical substances

To ensure the safety of products and production processes in the Asahi Kasei Group, we maintain awareness of the properties
of the chemical substances we use, and manage them strictly and appropriately throughout each phase from materials
procurement to production (including intermediates), use, and disposal.
The Asahi Kasei Group’s effort development of systems to manage chemical substance infor-
Strict management and control of chemical substances is a mation as well as revision of the list of applicable substances.
key element in the effort to ensure environmental protection, We also convey relevant information throughout the supply
operational safety, workplace safety and hygiene, health main- chain to help establish JAMP as a widely used tool.
tenance, and product safety. Chemical substances are man- In fiscal 2016, we started to use a tool of information
aged at each stage from development to use and disposal. transmission compatible with chemSHERPA, a new scheme by
The management of chemical substances begins with R&D, the Ministry of Economy, Trade and Industry. We are working
which is guided throughout every stage by a commitment to smoothly transition from JAMP to chemSHERPA during the
to developing products and processes characterized by safe, two-year period starting in fiscal 2016.
environmentally sound production, handling, and use. As a major upstream company, we will continue to work
with the JAMP Office toward the greater adoption of the
Industry-wide initiatives JAMP-IT platform as a means of information sharing.
Joint Article Management Program (JAMP)
As an active member of JAMP, we participate in the

CSR Fundamentals 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 • Enterprise and growth through challenge • Building the team, heightening
is to provide the venue for a dynamic and and change performance and achievement
fulfilling career as a part of a lively and • Integrity and responsibility in action • Going beyond conventional boundaries,
growing corporate group. • Respect for diversity in thought and action
• Contributing to mutual development
and growth
Human resource development 58 as Group Experts, with rank and remuneration commensurate
A wide range of training programs with general manager and section manager, respectively.
Employees are given a wide range of training to develop the skills To accelerate the creation of new businesses as a basic strategy of the
needed to successfully advance their careers. A regular program “Cs for Tomorrow 2018” management initiative, we revised the system in
of training is applied at key career stages beginning with hiring fiscal 2017 for greater emphasis on the development and growth of engi-
and extending through promotion to managerial positions. Other neers and technical personnel. The program is focused on reinforcing the
individual training programs such as for global management are specialized technical abilities of such personnel who will drive the creation
implemented according to business need. Each core operating of new businesses and the enhancement of established businesses.
company also implements training programs to support the devel-
opment of employee skills required for its specific field of business. Development of global human resources
To accelerate the expansion of world-leading businesses in
Group Masters accordance with the medium-term management initiative “Cs for
The Asahi Kasei Group employs a “Group Masters” program Tomorrow 2018” from the perspective of human resources, we are
to recognize employees who have developed and exercised implementing measures such as internship programs for young
extraordinary expertise and skills that hold universal value, and to personnel, and holding training sessions for personnel at overseas
facilitate their application throughout the Group. As of May 2017, subsidiaries on subjects such as dissemination of corporate phi-
88 Group Masters are designated: 30 as Senior Group Experts and losophy, intercultural communication, and management training.
Valuing human rights and diversity

Basic policy society by enabling living in health and comfort and harmony
Human Resources leads the effort to ensure that there will be no with the natural environment. We strive to hire motivated and
discrimination to maintain a lively workplace culture which enables capable personnel who will successfully execute our strategy
personnel to perform at their best, to advance employment of persons on a global scale.
with disability, and to rehire personnel after mandatory retirement. We continue to hire university graduates of foreign nationality
To prevent any harassment or discrimination, we implement every year, and the overall makeup of our personnel is becoming
training on corporate ethics to employees at each level—new more global. We are also strengthening our ties to universities
hires, assistant managers, and managers. Ethics training is also both in Japan and overseas, through career briefing sessions and
implemented by business unit and by geographical area. student internships, as part of an ongoing effort to attract talent.
In April 2017, 379 new graduates were hired: 296 men and
Hiring 83 women. In addition, 108 persons were hired in mid-career
The Asahi Kasei Group is working to create new value for between April 2016 and March 2017.

For more information, please refer to the Asahi Kasei Group website.
http://www.asahi-kasei.co.jp/asahi/en/csr
Expansion of opportunities for women Employment of persons with disabilities

In 1993, we established a dedicated corporate organ (now Asahi Kasei Ability Corp. was established in 1985 for the employ-
Diversity Promotion Group) to promote equal opportunity, ment of persons with disabilities, performing a wide range of ser-
and have proactively increased the proportion of women hired vices for the Asahi Kasei Group. The employment rate at applicable
and expanded the distribution of job assignments for women. companies of the Asahi Kasei Group was 2.19% (550.0 persons) as of
While only five employees at the rank of manager or above were June 1, 2017, exceeding the legal requirement. We continue recruit-
women in 1993, this has risen to 534 in June 2017. To support ment activities to further increase the employment of persons with
female personnel in their careers, we provide a mentoring pro- disabilities at group companies other than Asahi Kasei Ability.
gram, hold seminars on returning to work after maternity leave, Rate of employment of persons with disabilities
and publish diversity-related articles in our internal magazine. at applicable Group companies*
Number of women as managers* (%)
Asahi Kasei Group Legal minimum
600 2.2 2.19

534 2.12 2.12
500 500 2.08
2.1
454 2.05
400 410
370 2.0
300 2.00
1.9
200
100 1.8
0 1.7
’13/6 ’14/6 ’15/6 ’16/6 ’17/6 ’13/6 ’14/6 ’15/6 ’16/6 ’17/6
* Results as of June 30 each year for personnel employed by Asahi Kasei Corp., * Results as of June 1 each year at applicable Group companies. Calculation based on
Asahi Kasei Microdevices Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction total employment of 25,073 persons in the 21 applicable companies. As of June 1,
Materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. (Asahi 2017, the number of persons with disabilities employed by Asahi Kasei Ability Corp.
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., Asahi Kasei E-materials Corp. are stood at 333 of the total 550 employees with disabilities. Calculated in accordance
included through June 2015). with the Act on Employment Promotion etc. of Persons with Disabilities.
Balancing work and family life

Basic policy Shortened working hours for child care
We provide various forms of support for personnel to work Personnel are able to utilize shortened working hours to care
with security and vitality in accordance with their individual for preschoolers, with the working day shortened by up to 2
circumstances and values from the perspective of balancing hours until the child enters elementary school. In September
work and family life. 2007, a provision called “Kids Support” was added to enable
personnel with children in the first and second grades to work
Parental leave shortened hours as well. These provisions may be used con-
Our parental leave is available through the fiscal year in which currently with a “flex-time” system for flexible working hours.
the child turns three years old. In fiscal 2016, parental leave
was utilized by 582 personnel. This included 316 men, 43% of Leave to accompany spouse overseas
those who were qualified, and 266 women. As globalization continues to advance, an increasing number
of personnel have a spouse who is transferred to an overseas
Employees using parental leave* assignment. In fiscal 2013 we adopted a provision for such
Women Men
330
personnel to take a leave of absence to accompany their
316 316
spouses living overseas. In fiscal 2016, 16 personnel utilized
266
242 235 233 240 this provision.
220 226 231
212
Platinum Kurumin certification mark

110
In 2016, we received the Platinum Kurumin
certification mark from the Ministry of Health,
0
’12 ’13 ’14 ’15 ’16 (FY)
Labor and Welfare.* Platinum Kurumin
certification is awarded in recognition of
* Results as of June 30 each year for personnel employed by Asahi Kasei Corp.,
proactive support for the development of
Asahi Kasei Microdevices Corp., Asahi Kasei Homes Corp., Asahi Kasei Construction
Materials Corp., Asahi Kasei Pharma Corp., and Asahi Kasei Medical Co., Ltd. (Asahi
the next generation which is superior to the
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., and Asahi Kasei E-materials Corp. previously received Kurumin certification.
included through June 2015). * Certification received for Asahi Kasei Corp., Asahi Kasei Homes Corp., Asahi Kasei
Microdevices Corp., Asahi Kasei Pharma Corp., Asahi Kasei Medical Co., Ltd., and
Asahi Kasei Ability Corp. Asahi Kasei Ability Corp. is the first company in Miyazaki
Prefecture to receive Platinum Kurumin certification.

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
Purchasing and logistics

Corporate Communications sections Marketing and sales General affairs and
Investor Relations sections, environment
Communications at Asahi at core operating departments, administration sections
at Asahi Kasei Corp. and safety sections at
Kasei Corp. companies consumer contact offices at production sites
production sites
• Issuing news releases • Issuing news releases • Face-to-face discussion • Meeting with • Safety discussion • Periodic community
• Holding news • Holding news by marketing and sales securities analysts and forums dialog meetings
conferences conferences personnel institutional investors • Information exchange •C ommunity outreach
• Issuing documents for • Website disclosure of • Taking inquiries via • Seminars for Individual forums initiatives
information disclosure information telephone, website, etc. investors
• Website disclosure of • Website disclosure of
information information
• Responding to CSR- • Taking inquiries via
related questionnaires telephone, website, etc.
• Promoting social
contribution activities
Customer relations Investor Relations Principled supplier Public outreach
relationships
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 were held overseas. We also provide a wide variety of informa-
Information on shareholder distribution is available in the tion for investors on our website.
Corporate Citizenship section of our CSR website.
Seminars for individual investors
IR meetings with institutional investors and To provide individual investors with a better understanding
securities analysts of the operations of the Asahi Kasei Group, 5 seminars were
In fiscal 2016, Investor Relations (IR) held 210 meetings with held in fiscal 2016. We will continue to provide accurate and
institutional investors and securities analysts in Japan, includ- timely information to individual investors through direct com-
ing quarterly results briefings and an annual management munications, the corporate website, and articles published in
briefing with the President. To deepen understanding of Asahi magazines for individual investors.
Kasei among investors, we held a briefing on the Material
sector as well as individual meetings. In addition, 79 meetings

For more information, please refer to the Asahi Kasei Group website.
http://www.asahi-kasei.co.jp/asahi/en/csr
Principled supplier relationships

A relationship of mutual trust with our suppliers is fostered through fair and principled purchasing
practices based on regulatory compliance and respect for the environment and human rights.
Purchasing departments throughout the Asahi Kasei Group emphasis on CSR in accordance with our Procurement Policy.
regard suppliers as important partners and work to build Each year we conduct a survey of suppliers to help foster
relationships with them based on sincerity in accordance with greater awareness of the importance of CSR issues.
our Group Philosophy. To this end, we are placing greater
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 local governments and members of local residents associa-
community with a better understanding of our operations tions. We also open our gymnasiums, sports fields, parking lots,
and the measures we implement for the environment and and other facilities for public use and enjoyment, and host a
safety. Measures for community dialog and interaction include variety of events.
regularly held forums and meetings with representatives of
Community fellowship
The Community Fellowship Committee is organized under direct supervision of the President
of Asahi Kasei. Its roles include formulation of overall policy, plans, and courses of action in
regard to community fellowship activities. The Committee also monitors and reviews com-
munity fellowship activities at each site and at each affiliated company of the Asahi Kasei Group. Under our Community
Fellowship Policy, we are involved in a wide range of community-focused activities in accordance with the three themes
of Nurturing the Next Generation, Coexistence with the Environment, and Promotion of Culture, Art, and Sports.
We participate in the One-Percent Club of the Keidanren Coexistence with the Environment
(Japan Business Federation), and convert our social contribu- In addition to our afforestation activities in Miyazaki and
tion activities into monetary value by a method set forth in Shizuoka, we participate in an afforestation project in the
its annual Survey of Expenditure for Corporate Philanthropic Horqin Desert of Inner Mongolia, China. We also exhibit at
Activities. In fiscal 2015, this was ¥1.133 billion. environmental-related events, and work to raise understand-
ing of environmental issues.
Nurturing the Next Generation
To promote understanding and heighten interest in science Disaster relief
and technology among elementary, junior high, and high We participate in a Disaster Relief Market featuring produce
school students, we visit schools and host visits by students to of the areas affected by the Great East Japan Earthquake. We
factories to give explanations and demonstrations of science and also supported the relief effort in areas affected by the July
technology and on environmental issues. We also support career 2017 flooding in northern Kyushu by making donations of ¥5
development with occupational lectures and host visits by junior million each to the government of Oita Prefecture and to the
high and high school students to our corporate head office. Such Community Chest of Fukuoka.
activities were held 81 times in fiscal 2016, with a total of some
3,408 students of 83 schools participating. In August 2016, we Promotion of Culture, Art, and Sports
held a laboratory tour for female high school students, together Members of our corporate distance running and judo teams
with informal discussion with our researchers, as part of our effort have competed in the Olympics a total of some 50 times. In
to foster interest in careers in science and technology among Nobeoka, Miyazaki, where the teams are based, we host a
young women. We also sponsor educational events including major track event, and hold running and judo lessons for the
science competitions and environmental education programs local youth. The Asahi Kasei Himuka Cultural Foundation was
organized by newspaper companies, exhibit at science and established in 1985 to enrich the environment of day-to-day
chemistry events, and have a partnership with the National life and culture in Miyazaki Prefecture, with a wide range of
Museum of Emerging Science and Innovation (Miraikan). cultural activities being held.

Financial Section
Contents
64 Management’s Discussion and Analysis

70 Risk Analysis
72 Consolidated Financial Statements
72 Consolidated Balance Sheets
74 Consolidated Statements of Income
75 Consolidated Statements of Comprehensive Income
76 Consolidated Statements of Changes in Net Assets
77 Consolidated Statements of Cash Flows
78 Notes to Consolidated Financial Statements
78 1. Major policies for preparing the consolidated financial statements
78 2. Significant accounting policies
79 3. Changes in significant accounting policies
80 4. Notes to Consolidated Balance Sheets
81 5. Notes to Consolidated Statements of Income
83 6. Notes to Consolidated Statements of Comprehensive Income
83 7. Notes to Consolidated Statements of Changes in Net Assets
85 8. Notes to Consolidated Statements of Cash Flows
85 9. Leases
86 10. Financial instruments
89 11. Marketable securities and investment securities
90 12. Derivative financial instruments
93 13. Provision for retirement benefits
95 14. Taxes
96 15. Business combinations
97 16. Asset retirement obligations
97 17. Business segment information
100 18. Information on related parties
101 19. Per share information
102 20. Borrowings
102 21. Others
103 Independent Auditor’s Report

Management’s Discussion and Analysis
Fiscal year 2016 (April 1, 2016 – March 31, 2017)
Operating Environment Non-operating income and expenses, ordinary income

Net non-operating income was ¥1.4 billion, a ¥5.2 billion
During fiscal 2016, the outlook for the global economy improvement from the ¥3.8 billion net non-operating
remained obscure with increased political uncertainty related expenses of a year earlier. Foreign exchange loss transitioned
to the withdrawal of the UK from the EU and increased con- to foreign exchange gain, and equity in losses of affiliates
cern regarding the economic policy of the new US administra- decreased. As a result, ordinary income decreased by ¥0.7
tion, as well as concern of economic slowdown in emerging billion (0.5%) to ¥160.6 billion.
economies. Meanwhile, the Japanese economy continued on
a path of gradual recovery with strong corporate performance Extraordinary income and loss
while consumer spending became firm as the employment Extraordinary income of ¥10.1 billion included ¥9.9 billion
situation and income environment improved. in gain on sales of investment securities. Extraordinary loss
of ¥13.3 billion included ¥6.2 billion in business structure
Overview of Consolidated Results improvement expenses, ¥4.9 billion in loss on disposal of
Net sales, operating income noncurrent assets, ¥1.5 in impairment loss, and ¥0.7 billion in
Consolidated net sales for the fiscal year decreased by ¥57.9 business integration expense. The net extraordinary loss of
billion (3.0%) to ¥1,883.0 billion. Overseas sales decreased by ¥3.2 billion was ¥11.7 billion lower than a year ago.
¥23.4 billion (3.4%) to ¥656.4 billion, largely in the Material
segment, and decreased by 0.2 percentage points as a portion Net income attributable to owners of the parent
of consolidated net sales from 35.0% to 34.9%. Domestic sales With ordinary income of ¥160.6 billion and net extraordinary
decreased by ¥34.6 billion (2.7%) to ¥1,226.6 billion with lower loss of ¥3.2 billion, income before income taxes was ¥157.4
deliveries of order-built homes in the Homes segment and billion. Income tax expense was ¥40.7 billion (current income
lower reimbursement prices for pharmaceuticals in the Health taxes of ¥49.0 billion less deferred income taxes of ¥8.3 billion).
Care segment. Net income attributable to non-controlling interests was ¥1.7
Operating income decreased by ¥6.0 billion (3.6%) to billion. As a result, net income attributable to owners of the
¥159.2 billion. As a percentage of net sales, cost of sales parent increased by ¥23.2 billion (25.3%) to ¥115.0 billion, and
decreased by 1.0 percentage points to 68.8%. Selling, general net income per share increased by ¥16.65 to ¥82.34 from the
and administrative (SG&A) expenses increased by ¥6.5 billion ¥65.69 of the previous year.
despite the decrease in net sales, increasing as a portion of
net sales by 1.0 percentage points to 22.7%. Operating margin
decreased by 0.1 percentage points to 8.5%.
Net Income Attributable to

Net Sales, Operating Income, Owners of the Parent,
Overseas Sales Ratio Operating Margin SG&A, SG&A Ratio Net Income per Share
(¥ billion) (%) (¥ billion) (%) (¥ billion) (%) (¥ billion) (¥)
2,000 40 200 20 500 50 120 100
400 40
1,500 30 150 15 90 75
300 30
1,000 20 100 10 60 50
200 20
500 10 50 5 30 25
100 10
0 0 0 0 0 0 0 0
’12 ’13 ’14 ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY)
Net sales (left scale) Operating income (left scale) SG&A (left scale) Net income attributable to owners of
Overseas sales ratio (right scale) Operating margin (right scale) SG&A ratio (right scale) the parent (left scale)
Net income per share (right scale)

Results by Operating Segment Among electronics operations, shipments of each battery
separator product increased. While results of Polypore, consoli-
In April 2016, the Asahi Kasei Group reorganized its business dated from the second quarter of fiscal 2015, were included,
portfolio together with the beginning of a new strategic amortization of goodwill, etc., was recorded for the full year,
management initiative. The previous four reportable segments and the stronger yen had an impact. In electronic devices,
of Chemicals & Fibers, Homes & Construction Materials, shipments of audio devices for smartphones increased but the
Electronics, and Health Care, together with an “Others” cat- stronger yen had an impact.
egory, have been changed to the three reportable segments
of Material, Homes, and Health Care, together with an “Others” Homes
category. The figures for the year-ago period have been recal- Sales decreased by ¥13.5 billion (2.1%) from a year ago to
culated in accordance with the new segment configuration for ¥619.0 billion, and operating income decreased by ¥6.9 billion
comparison purposes. (9.7%) from a year ago to ¥64.1 billion.
Among homes operations, in order-built homes, deliveries
Material of Hebel Haus™ unit homes and Hebel Maison™ apartment
Sales decreased by ¥31.3 billion (3.1%) from a year ago to buildings decreased as an effect of orders received during
¥973.2 billion, and operating income increased by ¥5.3 billion the previous period, while SG&A expenses such as advertising
(6.6%) from a year ago to ¥84.5 billion. expenses increased. In remodeling, SG&A expenses such as
In fibers & textiles, shipments of Bemberg™ cupro fiber, labor costs increased, but in real estate, management of rental
Lamous™ artificial suede, and Leona™ nylon 66 filament units was firm.
increased, but selling prices declined due to competition, and In construction materials operations, sales of Neoma™
each product in fibers & textiles operations was impacted by phenolic foam insulation panels were firm, while shipments
the stronger yen. of autoclaved aerated concrete (AAC) and foundation systems
Among chemical operations, in petrochemicals, shipments decreased.
of styrene decreased following the strengthening of petro-
chemical operations in Japan, while terms of trade improved
for acrylonitrile. Shipments of synthetic rubber for fuel-efficient
tires and engineering plastics increased, but each product in
performance polymers was impacted by the stronger yen.
In performance materials and consumables, ion-exchange
membranes were impacted by the stronger yen, but sales of
electronic materials and Saran Wrap™ cling film were firm.
Fibers Business Chemicals Business Electronics Business

Operating Income Increases/Decreases Operating Income Increases/Decreases Operating Income Increases/Decreases
(¥ billion) (¥ billion) (¥ billion)
20 80 Operating 15
costs and
others
Sales Sales +39.1 70.4 Sales Sales
volume prices1 Sales volume volume prices1
+2.2 –3.0 +5.0 12 +7.7 –6.2
15 60 60.9
Foreign
13.9 exchange2
–2.8
Sales 9
11.7 prices1
–12.6
10 40
Operating Foreign
costs and exchange2
6 –4.6
others
+1.4 Foreign Operating
exchange2 4.4 costs and
5 20 –22.2 others
3 +1.1 2.5
0 0 0
’15 ’16 (FY) ’15 ’16 (FY) ’15 ’16 (FY)
1
Excluding impact of foreign exchange 1
Excluding impact of foreign exchange 1
Excluding impact of foreign exchange
2
Impact of foreign exchange on sales prices 2
Impact of foreign exchange on sales prices 2
Impact of foreign exchange on sales prices

Health Care Others

Sales decreased by ¥15.3 billion (5.4%) from a year ago to Sales increased by ¥2.1 billion (11.2%) from a year ago to ¥20.7
¥270.1 billion, and operating income decreased by ¥4.3 billion billion, and operating income increased by ¥2.3 billion (59.8%)
(11.9%) from a year ago to ¥31.9 billion. from a year ago to ¥6.0 billion.
Shipments of Teribone™ osteoporosis drug and
Recomodulin™ recombinant thrombomodulin increased,
but pharmaceuticals operations were impacted by reduced
reimbursement prices, and Flivas™ agent for treatment of
benign prostatic hyperplasia was impacted by competition
from generics.
Shipments of Planova™ virus removal filters increased, but
medical devices operations were impacted by the stronger
yen and, in Japan, by reduced reimbursement prices for
dialysis-related products.
In critical care operations, on a local-currency basis, the
LifeVest™ wearable defibrillator business continued to expand
well, and sales of other products such as defibrillators and
related accessories increased, but SG&A expenses grew with
reinforced sales activity. The higher exchange value of the yen
had an impact on the translation of results into consolidated
accounts.
Homes Business Construction Materials Business Health Care Business

Operating Income Increases/Decreases Operating Income Increases/Decreases Operating Income Increases/Decreases
Sales volume
80 6.0 5.8 –0.9 30
Operating Sales Sales
Sales Sales costs and Sales
prices volume prices1
volume prices others Operating +1.2 –7.5
65.4 –1.5 +1.9 –6.4 –0.5 costs and
24 24.3
others
60 59.5 4.5 0 4.5
Foreign
exchange2
18 –3.6 17.1
40 3.0
Operating
12 costs and
others
+2.6
20 1.5
6
0 0 0
’15 ’16 (FY) ’15 ’16 (FY) ’15 ’16 (FY)
1
Excluding impact of foreign exchange
2
Impact of foreign exchange on sales prices

Liquidity and Capital Resources Net assets increased by ¥110.7 billion (10.5%) from
¥1,057.4 billion to ¥1,168.1 billion. While dividend payments
Financial position were ¥27.9 billion, net income attributable to owners of the
Total assets at fiscal year end were ¥2,254.5 billion, ¥42.8 billion parent was ¥115.0 billion.
(1.9%) higher than a year earlier. As a result, net worth per share increased by ¥78.42 to
Current assets increased by ¥38.5 billion (4.5%) to ¥894.5 ¥824.36, net worth to total assets increased from 47.1% to
billion, mainly as notes and accounts receivable–trade 51.1%, and debt-to-equity ratio decreased by 0.08 points to
increased by ¥22.7 billion and inventories increased by ¥9.9 0.35.
billion.
Noncurrent assets increased by ¥4.2 billion (0.3%) to
¥1,360.0 billion, notably with a ¥39.5 billion increase in invest-
ment securities while there was a ¥31.8 billion decrease in
intangible assets.
Current liabilities decreased by ¥130.8 billion (18.0%) to
¥594.9 billion, mainly as a result of a ¥200.1 billion decrease
in short-term loans payable and a ¥16.5 billion decrease in
income taxes payable, while there was a ¥56.0 billion increase
in commercial paper.
Although bonds payable decreased by ¥20.0 billion, non-
current liabilities increased by ¥62.8 billion (14.7%) to ¥491.5
billion with a ¥98.0 billion increase in long-term loans payable.
Interest-bearing debt decreased by ¥46.8 billion (10.4%) to
¥402.8 billion.
Critical Care Business Others

Operating Income Increases/Decreases Operating Income Increases/Decreases Total Assets, Net Worth
20 6.0 Sales 6.0 2,500
Operating volume
Sales costs and
volume Foreign +1.9
others
+5.8 exchange2 –4.8 Operating
Sales –0 costs and
prices1 others 2,000
15 +1.9 14.8 4.5 +0.4
3.8 1,500
11.9
10 3.0
1,000
5 1.5
500
0 0 0
’15 ’16 (FY) ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY)
1
Excluding impact of foreign exchange Total assets
2
Impact of foreign exchange on sales prices Net worth

Capital Expenditure Notable capex by operating segment was as follows.
Capital expenditure (capex) was primarily for new and Material Construction of a new production line
for Hipore™ lithium-ion battery separator,
expanded production plant and equipment in long-term construction of a new production facility
growth fields. Investments were also made for rationalization, for Bemliese™ continuous-filament
labor-saving, maintenance, and IT systems to bring greater cellulose nonwoven, rationalization, labor-
product reliability and cost reductions. saving, and maintenance.
The following table of capex by operating segment shows Homes Rationalization, labor-saving, and
maintenance.
totals of property, plant and equipment and intangible assets
(other than goodwill), excluding consumption tax. Health Care Construction of a new manufacturing
facility for the active ingredient of
A total of ¥90.6 billion was invested during the fiscal year Recomodulin™ thrombomodulin agent,
for the expansion of businesses with competitive superiority, construction of a new plant for the
particularly in the Material segment, as well as for modification spinning of hollow-fiber membranes for
and rationalization. Planova™ BioEX virus removal filters, ratio-
nalization, labor-saving, and maintenance.
Totals for the year Compared to
(¥ million) previous year (%) Others Rationalization, labor-saving, and
maintenance.
Material 47,205 82.5
Corporate assets R&D equipment, IT systems, and
Homes 12,139 101.6 maintenance.
Health Care 15,604 80.5
Others 6,836 145.3
Combined 81,783 87.7
Corporate assets and
8,790 152.1
eliminations
Consolidated 90,573 91.5
Interest-Bearing Debt, Capex, Depreciation and

Net Worth to Total Assets D/E Ratio Amortization
(%) (¥ billion) (¥ billion)
60 500 1.0 120
50
400 0.8
90
40
300 0.6
30 60
200 0.4
20
30
100 0.2
10
0 0 0 0
’12 ’13 ’14 ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY)
Interest-bearing debt (left scale) Capex

D/E ratio (right scale) Depreciation and amortization

Cash Flows Cash flows from financing activities
Cash provided included ¥138.8 billion in proceeds from long-
Free cash flows* were a positive ¥79.0 billion, as cash provided, term loans payable, and a ¥56.0 increase in commercial paper.
principally from income before income taxes and from depre- Cash used included a ¥193.8 billion decrease in short-term
ciation and amortization, exceeded cash used, principally for loans payable, ¥45.5 billion for repayment of long-term loans
purchase of property, plant and equipment, and for payment payable, and ¥27.9 billion in cash dividends paid. Net cash
of income taxes. Cash flows from financing activities were a used in financing activities was ¥74.0 billion, ¥175.3 billion
net ¥74.0 billion used, principally due to a decrease in short- more than a year earlier.
term loans payable. As a result, cash and cash equivalents at
* Total of net cash provided by (used in) operating activities and net cash provided
fiscal year end were ¥144.1 billion, ¥1.2 billion less than a year by (used in) investment activities.
earlier.
Financial Policy
Cash flows from operating activities
Cash used included ¥61.4 billion for income taxes paid and a We aim to increase free cash flows with increased earnings
¥20.8 increase in notes and accounts receivable–trade. Income through enhanced cost efficiency, greater product competi-
before income taxes provided ¥157.4 billion, and depreciation tiveness, and business structure improvements, and with
and amortization provided ¥91.4 billion. Net cash provided by greater capital efficiency through utilization of group finance
operating activities was ¥169.0 billion, ¥47.3 billion less than a and maintenance of optimum inventory levels.
year earlier. A wide range of fund-raising methods including bank
borrowings, bonds, and commercial paper will be utilized
Cash flows from investing activities dynamically in accordance with the financial circumstances
Cash provided included ¥12.0 billion in proceeds from sales of the Asahi Kasei Group in order to obtain stable financing at
of investment securities. Cash used included ¥83.0 billion for low cost.
purchase of property, plant and equipment, ¥9.8 billion for These resources will be used to fund strategic investments
purchase of investment securities, and ¥8.8 billion for purchase under the “Cs for Tomorrow 2018” strategic management
of intangible assets. Net cash used in investing activities was initiative focused on the pursuit of growth and profitability,
¥89.9 billion, ¥195.4 billion less than a year earlier. 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 Cash Flows

160 300
120
200
80
100
40
0 0
(40)
(100)
(80)
(200)
(120)
(160) (300)
’12 ’13 ’14 ’15 ’16 (FY) ’12 ’13 ’14 ’15 ’16 (FY)
Net cash provided by operating activities

Net cash used in investing activities
Net cash provided by (used in) financing activities

Risk Analysis
Operating risks and non-operating risks which may materially influence investor decisions are described below. The manage-
ment maintains awareness of the possibility that these scenarios may emerge and, to the fullest possible extent, implements
measures to avoid their emergence and to minimize their impact on corporate performance in the event that they do emerge.
The description of risks given here includes elements which may emerge in the future, but as it is based on current evalua-
tions as of June 28, 2017, it does not include risks which could not be foreseen.
Crude oil and naphtha prices Profitability of electronics-related businesses

Operating costs in operations based on petrochemicals are The electronics industry is characterized by sharp market
affected by prices for crude oil and naphtha. If crude oil and cycles. The profitability of electronics-related businesses may
naphtha prices rise, selling prices for products derived from decline significantly in a relatively short time, thereby affect-
these feedstocks must be increased in a timely manner to ing our consolidated performance and financial condition.
maintain sufficient price spreads. Price spreads may diminish, Because products in this field rapidly become obsolete, the
thereby affecting our consolidated performance and financial timely development and commercialization of leading-edge
condition. devices and materials is required. New product development
may be delayed, or demand fluctuations may exceed expecta-
Exchange rate fluctuation tions, thereby affecting our consolidated performance and
The value of items denominated in currencies other than the financial condition.
yen is affected by the rate of exchange at the time of conver-
sion to yen. Although measures such as currency exchange Pharmaceutical, medical device, and critical care device
hedges are utilized to minimize the short-term effects of businesses
exchange rate fluctuations, such fluctuations may exceed the Pharmaceutical, medical device, and critical care device busi-
foreseeable range over the short to long term, thereby affect- nesses may be significantly affected by government measures
ing our consolidated performance and financial condition. regarding health care or other changes in government policy
in various countries. Unforeseeable side effects or complica-
Overseas operations tions may emerge, significantly affecting these businesses.
Overseas operations may face a variety of risks which cannot be Product approval may be withdrawn as a result of reexamina-
foreseen, including the existence or emergence of economi- tion, and competition may intensify as a result of the market
cally unfavorable circumstances due to legal and regulatory entry of generics. For products under development, regulatory
changes, vulnerability of infrastructure, difficulty in hiring/retain- approval may be prolonged or fail to be obtained, market
ing qualified employees, or other factors, and social or political demand may be lower than expected, and reimbursement
instability due to terrorism, war, or other factors. Overseas prices may be lower than expected. Such scenarios may affect
operations may be impaired by such scenarios, thereby affect- our consolidated performance and financial condition.
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.

Industrial accidents and natural disasters Business and capital alliances
The occurrence of a significant industrial accident or natural Acquisitions, business alliances, and capital alliances may
disaster at a plant or elsewhere may result in a loss of public bear lower results or less synergy than anticipated due to
trust, the emergence of costs associated with accident deterioration of the operating environment, thereby affecting
response, including compensation, and opportunity loss due our consolidated performance and financial condition. Poor
to plant shutdown caused by damage to plant facilities, supply performance at companies in which we have invested may
chain disruptions which impede raw materials procurement, require the recording of an impairment loss for goodwill, etc.,
etc., thereby affecting our consolidated performance and thereby affecting our consolidated performance and financial
financial condition. 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.

Consolidated Financial Statements
Consolidated Balance Sheets
Asahi Kasei Corporation and Consolidated Subsidiaries
March 31, 2017 and 2016
Thousands of
Millions of yen U.S. dollars (Note 1)
ASSETS 2017 2016 2017

Current assets:
Cash and deposits (Notes 8 and 10) ¥ 145,289 ¥ 146,054 $ 1,295,026
Notes and accounts receivable—trade 302,751 280,095 2,698,556
Short-term investment securities (Notes 8, 10 and 11) — 1,534 —
Merchandise and finished goods 159,395 159,441 1,420,759
Work in process 116,481 108,684 1,038,248
Raw materials and supplies 70,806 68,618 631,126
Deferred tax assets (Note 14) 20,279 18,133 180,756
Other 81,816 75,324 729,263
Allowance for doubtful accounts (2,272) (1,865) (20,251)
Total current assets 894,545 856,018 7,973,482
Noncurrent assets:
Property, plant and equipment:
Buildings and structures (Notes 4 (b), (d)) 508,713 495,817 4,534,388
Accumulated depreciation (278,122) (268,635) (2,479,027)
Buildings and structures, net 230,590 227,183 2,055,353
Machinery, equipment and vehicles (Notes 4 (b), (d)) 1,376,029 1,348,103 12,265,166
Accumulated depreciation (1,176,686) (1,149,544) (10,488,332)
Machinery, equipment and vehicles, net 199,343 198,559 1,776,834
Land (Note 4 (d)) 62,391 61,046 556,119
Lease assets (Note 9) 12,367 12,928 110,233
Accumulated depreciation (11,381) (11,183) (101,444)
Lease assets, net 986 1,745 8,789
Construction in progress 45,958 49,240 409,644
Other (Note 4 (d)) 150,073 147,286 1,337,668
Accumulated depreciation (132,460) (129,072) (1,180,676)
Other, net 17,613 18,215 156,993
Subtotal 556,881 555,989 4,963,731
Intangible assets:
Goodwill 285,622 305,112 2,545,878
Other 177,149 189,470 1,579,009
Subtotal 462,772 494,582 4,124,895
Investments and other assets:

Investment securities (Notes 4 (a), (b), 10 and 11) 284,137 244,598 2,532,641
Long-term loans receivable (Note 10) 18,918 16,353 168,625
Deferred tax assets (Note 14) 9,309 20,098 82,975
Other 28,154 24,280 250,949
Allowance for doubtful accounts (215) (189) (1,916)
Subtotal 340,302 305,140 3,033,265
Total noncurrent assets 1,359,955 1,355,711 12,121,891
Total assets ¥ 2,254,500 ¥ 2,211,729 $ 20,095,374
The accompanying notes are an integral part of these statements.

Thousands of
LIABILITIES AND NET ASSETS 2017 2016 2017

Liabilities:
Current liabilities:
Notes and accounts payable—trade (Note 10) ¥ 147,543 ¥ 126,653 $ 1,315,117
Short-term loans payable (Notes 4 (b), 10 and 20) 113,475 313,587 1,011,454
Commercial paper (Notes 10 and 20) 56,000 — 499,153
Current portion of bonds payable (Notes 10 and 20) 20,000 — 178,269
Lease obligations (Notes 9, 10 and 20) 305 919 2,719
Accrued expenses 100,419 98,717 895,080
Income taxes payable (Note 10) 16,202 32,735 144,416
Advances received 72,882 74,667 649,630
Provision for periodic repairs 5,003 3,908 44,594
Provision for product warranties 2,461 2,355 21,936
Provision for removal cost of property, plant and equipment 1,800 2,130 16,044
Asset retirement obligations (Note 16) 572 568 5,098
Other 58,217 69,423 518,914
Total current liabilities 594,880 725,662 5,302,433
Noncurrent liabilities:
Bonds payable (Notes 10 and 20) 20,000 40,000 178,269
Long-term loans payable (Notes 4 (b), 10 and 20) 192,584 94,632 1,716,588
Lease obligations (Notes 9, 10 and 20) 467 537 4,163
Deferred tax liabilities (Note 14) 59,759 64,930 532,659
Provision for periodic repairs 165 558 1,471
Provision for removal cost of property, plant and equipment 4,390 7,228 39,130
Provision for loss on litigation 2,162 2,171 19,271
Net defined benefit liability (Note 13) 178,368 186,300 1,589,874
Asset retirement obligations (Note 16) 3,436 3,480 30,627
Long-term guarantee deposits (Note 10) 20,479 20,131 182,539
Other 9,695 8,702 86,416
Total noncurrent liabilities 491,506 428,669 4,381,014
Total liabilities 1,086,385 1,154,330 9,683,439
Net assets:
Shareholders’ equity:
Capital stock
Authorized—4,000,000,000 shares
Issued and outstanding—1,402,616,332 shares 103,389 103,389 921,553
Capital surplus 79,443 79,410 708,111
Retained earnings (Note 7 (b) (ii)) 850,532 763,076 7,581,175
Treasury stock (3,242) (3,150) (28,897)
(2017—5,958,904 shares, 2016—5,861,678 shares)
Total shareholders’ equity 1,030,122 942,724 9,181,941
Accumulated other comprehensive income:
Net unrealized gain on other securities 113,475 92,280 1,011,454
Deferred gains or losses on hedges 55 (179) 490
Foreign currency translation adjustment 40,831 48,429 363,945
Remeasurements of defined benefit plans (33,140) (41,353) (295,392)
Total accumulated other comprehensive income 121,222 99,177 1,080,506
Non-controlling interests 16,771 15,498 149,487
Total net assets 1,168,115 1,057,399 10,411,935
Commitments and contingent liabilities (Notes 4 (c) and 9)
Total liabilities and net assets ¥2,254,500 ¥2,211,729 $20,095,374

Consolidated Statements of Income
Years Ended March 31, 2017 and 2016
Thousands of
2017 2016 2017

Net sales (Note 17) ¥1,882,991 ¥1,940,914 $16,783,947
Cost of sales (Note 5 (b)) 1,296,255 1,354,698 11,554,105
Gross profit 586,736 586,216 5,229,842
Selling, general and administrative expenses (Note 5 (a)) 427,506 421,013 3,810,554
Operating income (Note 17) 159,229 165,203 1,419,280
Non-operating income:
Interest income 1,425 1,417 12,702
Dividends income 5,170 4,757 46,083
Equity in earnings of affiliates 4,899 — 43,667
Other 3,854 5,148 34,352
Total non-operating income 15,347 11,322 136,795
Non-operating expenses:
Interest expense 4,435 3,611 39,531
Equity in losses of affiliates — 854 —
Foreign exchange loss 1,228 3,679 10,946
Donations 3,930 851 35,030
Other 4,351 6,159 38,782
Total non-operating expenses 13,944 15,154 124,289
Ordinary income 160,633 161,370 1,431,794
Extraordinary income:
Gain on sales of investment securities 9,918 8,275 88,404
Gain on sales of noncurrent assets (Note 5 (c)) 165 917 1,471
Total extraordinary income 10,083 9,192 89,874
Extraordinary loss:
Loss on valuation of investment securities 101 363 900
Loss on disposal of noncurrent assets (Note 5 (d)) 4,863 5,214 43,346
Impairment loss (Note 5 (e)) 1,484 3,493 13,228
Business structure improvement expenses (Notes 5 (e), (f )) 6,189 3,606 55,165
Litigation settlement — 1,201 —
Loss on piling business (Note 5 (g)) — 1,456 —
Business integration expense 690 1,547 6,150
Special retirement expenses and other — 2,027 —
Loss on discontinuation of joint sales agreement (Notes 5 (e), (h)) — 5,266 —
Total extraordinary loss 13,328 24,173 118,798
Income before income taxes 157,388 146,389 1,402,870
Income taxes (Note 14) — current 49,017 55,419 436,911
— deferred (8,293) (2,441) (73,919)
Total income taxes 40,724 52,978 362,991
Net income 116,663 93,412 1,039,870
Net income attributable to non-controlling interests 1,663 1,658 14,823
Net income attributable to owners of the parent ¥ 115,000 ¥ 91,754 $ 1,025,047

Consolidated Statements of Comprehensive Income
Thousands of
2017 2016 2017

Net income ¥116,663 ¥ 93,412 $1,039,870
Other comprehensive income:
Net increase (decrease) in unrealized gain on other securities 21,177 (21,098) 188,760
Deferred gains or losses on hedges 234 1,519 2,086
Foreign currency translation adjustment (8,020) (48,860) (71,486)
Remeasurements of defined benefit plans 8,114 (33,331) 72,324
Share of other comprehensive income of affiliates accounted
for using equity method 810 (3,567) 7,220
Total other comprehensive income (Note 6) 22,315 (105,337) 198,904
Comprehensive income ¥138,979 ¥ (11,925) $1,238,782
Comprehensive income attributable to:
Owners of the parent ¥137,045 ¥ (12,708) $1,221,544
Non-controlling interests 1,934 783 17,239

Consolidated Statements of Changes in Net Assets
Millions of yen
Shareholders’ equity Accumulated other comprehensive income
Total
Net Deferred Foreign Remeasure- accumulated
Retained Total unrealized gains or currency ments of other Non-
Capital Capital earnings Treasury shareholders’ gain on losses on translation defined comprehensive controlling Total
stock surplus (Note 7 (b)) stock equity other securities hedges adjustment benefit plans income interests net assets
Balance at March 31, 2016 ¥103,389 ¥79,410 ¥763,076 ¥(3,150) ¥ 942,724 ¥ 92,280 ¥(179) ¥48,429 ¥(41,353) ¥ 99,177 ¥15,498 ¥1,057,399
Cumulative effect of changes
in accounting policies 10 10 10
Restated balance 103,389 79,410 763,086 (3,150) 942,734 92,280 (179) 48,429 (41,353) 99,177 15,498 1,057,409
Changes during the fiscal year:
Dividends from surplus (27,935) (27,935) (27,935)
Net income attributable
to owners of the parent 115,000 115,000 115,000
Purchase of treasury stock (93) (93) (93)
Disposal of treasury stock 0 1 1 1
Change of scope of consolidation 418 418 418
Change of scope of equity method (37) (37) (37)
Capital increase of
consolidated subsidiaries 33 33 33
Net changes of items other than
shareholders’ equity 21,195 234 (7,597) 8,213 22,045 1,273 23,318
Total changes of items
during the period — 33 87,446 (92) 87,388 21,195 234 (7,597) 8,213 22,045 1,273 110,705
Balance at March 31, 2017 ¥103,389 ¥79,443 ¥850,532 ¥(3,242) ¥1,030,122 ¥113,475 ¥ 55 ¥40,831 ¥(33,140) ¥121,222 ¥16,771 ¥1,168,115
Millions of yen
Total
Balance at March 31, 2015 ¥103,389 ¥79,408 ¥699,259 ¥(3,041) ¥879,014 ¥113,562 ¥(1,697) ¥ 99,531 ¥ (7,757) ¥ 203,639 ¥15,068 ¥1,097,722
in accounting policies — —
Restated balance 103,389 79,408 699,259 (3,041) 879,014 113,562 (1,697) 99,531 (7,757) 203,639 15,068 1,097,722
to owners of the parent 91,754 91,754 91,754
Change of scope of consolidation — —
Capital increase of
consolidated subsidiaries — —
Change of scope of equity method — —
shareholders' equity (21,282) 1,519 (51,102) (33,596) (104,462) 430 (104,032)
during the period — 2 63,817 (109) 63,710 (21,282) 1,519 (51,102) (33,596) (104,462) 430 (40,323)
Balance at March 31, 2016 ¥103,389 ¥79,410 ¥763,076 ¥(3,150) ¥942,724 ¥ 92,280 ¥ (179) ¥ 48,429 ¥(41,353) ¥ 99,177 ¥15,498 ¥1,057,399
Thousands of U.S. dollars (Note 1)

Total
Balance at March 31, 2016 $921,553 $707,817 $6,801,640 $(28,077) $8,402,924 $ 822,533 $(1,596) $431,669 $(368,598) $ 884,009 $138,141 $ 9,425,074
in accounting policies 89 89 89
Restated balance 921,553 707,817 6,801,729 (28,077) 8,403,013 822,533 (1,596) 431,669 (368,598) 884,009 138,141 9,425,163
to owners of the parent 1,025,047 1,025,047 1,025,047
Change of scope of consolidation 3,726 3,726 3,726
Change of scope of equity method (330) (330) (330)
Capital increase of
consolidated subsidiaries 294 294 294
shareholders' equity 188,921 2,086 (67,715) 73,206 196,497 11,347 207,844
during the period — 294 779,446 (820) 778,929 188,921 2,086 (67,715) 73,206 196,497 11,347 986,764
Balance at March 31, 2017 $921,553 $708,111 $7,581,175 $(28,897) $9,181,941 $1,011,454 $ 490 $363,945 $(295,392) $1,080,506 $149,487 $10,411,935

Consolidated Statements of Cash Flows
Thousands of
2017 2016 2017

Cash flows from operating activities:
Income before income taxes ¥ 157,388 ¥ 146,389 $ 1,402,870
Depreciation and amortization 91,387 93,811 814,573
Impairment loss 1,484 3,493 13,228
Amortization of goodwill 17,806 15,821 158,713
Amortization of negative goodwill (159) (159) (1,417)
Increase in provision for periodic repairs 703 824 6,266
Increase (decrease) in provision for product warranties 108 (193) 963
Decrease in provision for removal cost of property, plant and equipment (3,168) (1,339) (28,238)
Decrease in net defined benefit liability (8,150) (9,227) (72,645)
Interest and dividend income (6,595) (6,173) (58,784)
Interest expense 4,435 3,611 39,531
Equity in (earnings) losses of affiliates (4,899) 854 (43,667)
Gain on sales of investment securities (9,918) (8,275) (88,404)
Loss on valuation of investment securities 101 363 900
Gain on sale of property, plant and equipment (165) (917) (1,471)
Loss on disposal of noncurrent assets 4,863 5,214 43,346
(Increase) decrease in notes and accounts receivable—trade (20,756) 48,513 (185,008)
(Increase) decrease in inventories (9,840) 12,901 (87,708)
Increase (decrease) in notes and accounts payable—trade 18,619 (24,104) 165,960
Increase (decrease) in accrued expenses 2,467 (3,980) 21,989
(Decrease) increase in advances received (1,886) 120 (16,811)
Other, net (6,721) (4,863) (59,907)
Subtotal 227,105 272,687 2,024,289
Interest and dividend income received 7,733 7,558 68,928
Interest expense paid (4,428) (3,596) (39,469)
Income taxes paid (61,444) (60,431) (547,678)
Net cash provided by operating activities 168,965 216,218 1,506,061
Cash flows from investing activities:
Payments into time deposits (4,105) (6,360) (36,590)
Proceeds from withdrawal of time deposits 5,232 17,364 46,635
Purchase of property, plant and equipment (82,983) (85,184) (739,665)
Proceeds from sales of property, plant and equipment 3,178 774 28,327
Purchase of intangible assets (8,810) (10,330) (78,527)
Purchase of investment securities (9,846) (7,017) (87,762)
Proceeds from sales of investment securities 12,018 10,197 107,122
Purchase of shares in subsidiaries resulting in change in scope of consolidation — (193,680) —
Payments for transfer of business — (200) —
Payments of loans receivable (5,218) (11,131) (46,510)
Collection of loans receivable 2,169 2,520 19,333
Other, net (1,553) (2,241) (13,843)
Net cash used in investing activities (89,920) (285,287) (801,497)
Cash flows from financing activities:
(Decrease) increase in short-term loans payable (193,760) 213,417 (1,727,070)
Increase in commercial paper 56,000 — 499,153
Proceeds from long-term loans payable 138,812 9,445 1,237,294
Repayment of long-term loans payable (45,513) (91,760) (405,678)
Repayments of lease obligations (965) (1,411) (8,601)
Proceeds from disposal of treasury stock 1 6 9
Cash dividends paid (27,935) (27,937) (248,997)
Cash dividends paid to non-controlling interests (712) (653) (6,346)
Other, net 207 371 1,845
Net cash (used in) provided by financing activities (73,959) 101,365 (659,230)
Effect of exchange rate change on cash and cash equivalents (6,759) (5,560) (60,246)
Net (decrease) increase in cash and cash equivalents (1,673) 26,736 (14,912)
Cash and cash equivalents at beginning of year 145,307 112,297 1,295,187
Increase in cash and cash equivalents resulting from changes
in scope of consolidation 443 6,273 3,949
Cash and cash equivalents at end of year (Note 8) ¥ 144,077 ¥ 145,307 $ 1,284,223

Notes to Consolidated Financial Statements
1. Major policies for preparing the consolidated financial statements

The consolidated financial statements, which are filed with the prime companies, including 6 core operating companies (Asahi Kasei Homes
minister of Japan as required by the Financial Instruments and Exchange Corp., Asahi Kasei Construction Materials Corp., Asahi Kasei Microdevices
Act in Japan, are prepared in accordance with accounting principles Corp., Asahi Kasei Pharma Corp., Asahi Kasei Medical Co., Ltd., and
generally accepted in Japan, which are different in certain respects from ZOLL Medical Corporation), Polypore International, LP, and Tongsuh
the application and disclosure requirements of International Financial Petrochemical Corp. Ltd. (Korea). Material inter-company transactions and
Reporting Standards. The accompanying consolidated financial state- accounts have been eliminated.
ments are a translation of those filed with the prime minister of Japan and Investments in unconsolidated subsidiaries and 20% to 50% owned
incorporate certain modifications to enhance foreign readers’ understand- companies in which the Company exercises significant influence are
ing of the consolidated financial statements. In addition, the notes to the accounted for, with minor exceptions due to immateriality, using the
consolidated financial statements include certain financial information equity method of accounting. There were 32 such unconsolidated subsid-
which is not required under the disclosure regulations in Japan, but is iaries and 20% to 50% owned companies to which the equity method is
presented herein as additional information. applied at March 31, 2017 (31 at March 31, 2016), including Asahi Kasei EIC
The U.S. dollar amounts presented in the consolidated financial Solutions Corp. and Asahi Yukizai Corporation.
statements are included solely for the convenience of readers. These Certain subsidiaries’ results are reported in the consolidated financial
translations should not be construed as representations that the Japanese statements using a fiscal year ending December 31. Material differences in
yen amounts actually represent, have been, or could be converted into inter-company transactions and accounts arising from the use of different
U.S. dollars. As the amounts shown in U.S. dollars are for convenience fiscal year-ends are appropriately adjusted for through consolidation
only, and are not intended to be computed in accordance with generally procedures.
accepted translation procedures, the approximate current exchange rate All assets and liabilities of acquired companies are measured at their
of ¥112.19=US$1 prevailing on March 31, 2017, has been used. fair value and any difference between the net assets and the cost of
Consolidation and investments in affiliated companies investment is recognized as goodwill or negative goodwill. Goodwill, and
The consolidated financial statements consist of the accounts of the negative goodwill incurred through business combinations which took
parent company and 171 subsidiaries (174 subsidiaries at March 31, place before April 1, 2010, are amortized using the straight-line method
2016, hereinafter collectively referred to as the “Company”) which, with over a reasonable period during which their effects would last, with the
minor exceptions due to immateriality, are all majority or wholly owned exception of minor amounts which are charged to income as incurred.
2. Significant accounting policies

(a) Cash and cash equivalents ii) Provision for periodic repairs
For cash flow statement purposes, cash and cash equivalents include The portion of foreseeable periodic repair expenses deemed to cor-
all highly liquid investments, generally with original maturities of three respond to normal wear and tear of plant and equipment as of the closing
months or less, which are readily convertible to known amounts of cash, date of the fiscal year is recognized as provision for periodic repairs.
and therefore present an insignificant risk of changes in value due to iii) Provision for product warranties
changes in interest rates. Estimates of product warranty expenses based on historical rates are
(b) Inventories recognized as provision for product warranties.
Inventories held for sale in the ordinary course of business are stated at the iv) Provision for removal cost of property, plant and equipment
lower of cost or net realizable value. Residential lots and dwellings for sale Provision for removal cost of property, plant and equipment is recorded
are stated at specifically identified costs. based on estimated future removal cost of property, plant and equipment
(c) Noncurrent assets and depreciation/amortization at the end of each fiscal year.
Property, plant and equipment (except for lease assets) are stated at cost. v) Provision for loss on litigation
Significant renewals and improvements are capitalized at cost, while Provision for loss on litigation is recorded for estimated losses related to
maintenance and repairs are charged to income as incurred. Depreciation pending litigation.
is provided for under the declining-balance method for property, plant
(e) Accounting for retirement benefits
and equipment, except for buildings and building accessories acquired on
or after April 1, 2016 which are depreciated using the straight-line method, i) Method of attributing expected retirement benefits to each
at rates based on estimated useful lives of the assets, principally ranging period
from 5 to 60 years for buildings and from 4 to 22 years for machinery and In calculating retirement benefit obligations, the Company applies a
equipment and vehicles. method of attributing expected retirement benefits to each period based
Intangible fixed assets (except for lease assets), including software for on a benefit formula basis.
internal use, are mainly amortized using the straight-line method over the ii) Accounting for actuarial gains/losses and prior service costs
estimated useful lives of the assets. The estimated useful life of software for Actuarial gains/losses are amortized using the straight-line method from
internal use is mainly 5 years. the fiscal year following their accrual over a certain period (mainly 10
Lease assets (financing lease transactions without title transfer) are years) within the average remaining service period of employees at the
depreciated/amortized on a straight-line basis over the period of the lease time of accrual. Prior service costs are amortized using the straight-line
with no residual value. For financing lease transactions without title trans- method over a certain period (mainly 10 years) within the average remain-
fer whose transaction date is before March 31, 2008, the previous method ing service period of employees at the time of accrual.
of accounting for lease transactions continues to be applied, with periodic
iii) Adoption of the simplified method
lease charges for financing leases being charged to income as incurred.
In calculating expected defined benefit liability and periodic retirement
(d) Significant allowances benefit expenses, certain consolidated subsidiaries have adopted the sim-
i) Allowance for doubtful accounts plified method. Under this method, the expected defined benefit liability
Estimates of the unrecoverable portion of receivables, generally based is recorded at the severance payment amount to be required should all
on historical rates and for specific receivables of particular concern based employees retire voluntarily at fiscal year end.
on individual estimates of recoverability, are recognized as allowance for
doubtful accounts.

(f) Significant revenue and expense recognition derivatives that are designated as hedging instruments. Gains or losses
i) Construction activities that are realizable as of fiscal year end arising from changes in fair value of these qualifying hedges are deferred
The percentage-of-completion method (progress of work is estimated using as “Deferred gains or losses on hedges” until being offset against gains or
the percentage of costs incurred to the total projected costs) is applied. losses of the underlying hedged assets and liabilities.
ii) Other construction activities (h) Taxes

The completed-contract method is used. Accrued income taxes are stated at the estimated amount of payables
for corporation, enterprise, and inhabitant taxes. The asset and liability
(g) Financial instruments approach is used to recognize deferred tax assets and liabilities for the
i) Securities expected future tax consequences of temporary differences between the
Securities are classified into four categories: trading securities, held-to- carrying amounts and the tax bases of assets and liabilities.
maturity debt securities, equity securities of unconsolidated subsidiaries and The Company has elected to file its return under the consolidated
affiliates, and other securities. At March 31, 2017 and 2016, the Company did tax filing system in Japan. Transactions subject to consumption taxes are
not have trading securities or held-to-maturity debt securities. recorded at amounts net of consumption taxes.
Equity securities of unconsolidated subsidiaries and affiliates are (i) Translation of foreign currencies
accounted for, with minor exceptions due to immateriality, using the Foreign currency receivables and payables are translated into Japanese
equity method of accounting. yen at the exchange rates prevailing at the balance sheet date. Resulting
Other securities whose fair values are readily determinable are carried gains and losses are charged to income for the period.
at fair value with net unrealized gains or losses, net of income taxes, Assets and liabilities of foreign subsidiaries are translated into Japanese
being included as a component of net assets. Other securities whose yen at fiscal year-end exchange rates, and income and expenses of same
fair values are not readily determinable are stated at cost. In cases where are translated into Japanese yen at the average exchange rate for the
any significant decline in the realizable value is assessed to be other than fiscal year. Shareholders’ equity of foreign subsidiaries is translated into
temporary, the cost of other securities is devalued by the impaired amount Japanese yen at the historical exchange rates. The translation differences
and is charged to income. Realized gains and losses are determined using in Japanese yen amounts arising from the use of different rates are rec-
the average cost method and are reflected in the consolidated income ognized as foreign currency translation adjustments in the consolidated
statements. balance sheets. A portion of the foreign currency translation adjustment
ii) Derivative financial instruments is allocated to non-controlling interests and the Company’s portion is
All derivatives are stated at fair value. Gains or losses arising from changes presented as a separate component of net assets in the consolidated
in fair value are recognized in the period in which they arise, except for balance sheets.
3. Changes in significant accounting policies

(a) Changes in accounting policies (b) Changes in presentation
i) A
pplication of revised implementation guidance on Consolidated statements of income
recoverability of deferred tax assets In the fiscal year ended March 31, 2017, donations, which had previously
The Accounting Standards Board of Japan (ASBJ) issued revised Guidance been included in others under non-operating expenses, exceeded 10% of
No. 26 “Implementation Guidance on Recoverability of Deferred Tax total non-operating expenses, and is reported separately. The consolidated
Assets.” This revised guidance is applied from the fiscal year ended March statements of income for the fiscal year ended March 31, 2016, have been
31, 2017. Accordingly, the method of accounting related to recoverability adjusted accordingly, resulting in others under non-operating expenses
of deferred tax assets has been partially amended. being ¥851 million lower than previously reported, reflecting the separa-
In accordance with the transitional accounting provisions set forth tion of the same amount as donations.
in Article 49, Paragraph 4, of the revised Guidance No. 26, the difference
between the amount of deferred tax assets at the beginning of the
fiscal year ended March 31, 2017, as calculated in accordance with the
applicable provisions of Article 49, Paragraph 3, Items 1 through 3, of the
revised Guidance No. 26, and the amount of deferred tax assets at the end
of the fiscal year ended March 31, 2016, is added to retained earnings at
the beginning of the fiscal year ended March 31, 2017.
The effect of this change on deferred tax assets (investments and other
assets) and retained earnings at the beginning of the fiscal year ended
March 31, 2017, is immaterial.
ii) Application of practical solution on a change in depreciation
method due to Tax Reform 2016
The ASBJ issued Practical Issues Task Force (PITF) No. 32 “Practical Solution
on a change in depreciation method due to Tax Reform 2016.” This
practical solution is applied from the fiscal year ended March 31, 2017.
Accordingly, the method of depreciation of buildings and accompanying
facilities and of structures has changed from the declining-balance
method to the straight-line method.
The effect of this change on operating income, ordinary income, and
income before income taxes during the fiscal year ended March 31, 2017,
is immaterial.

4. Notes to Consolidated Balance Sheets
(a) Investment securities
Among investment securities, shares of unconsolidated subsidiaries and affiliates as of March 31, 2017 and 2016, amounted to ¥65,725 million (US$585,837
thousand) and ¥55,786 million, respectively. Included in those amounts are investments in joint ventures of ¥33,686 million (US$300,258 thousand) and
¥27,003 million, respectively.
(b) Pledged assets and secured debt
A summary of assets pledged as collateral and secured debt as of March 31, 2017 and 2016, is shown below:
Millions of yen Thousands of U.S. dollars
2017 2016 2017

Pledged assets:
Buildings and structures ¥106 ¥118 $945
Machinery, equipment and vehicles 1 1 9
Total pledged assets ¥107 ¥120 $954
Secured debt:
Short-term loans payable ¥ 0 ¥ 1 $ 0
Long-term loans payable 28 77 250
Total secured debt ¥ 29 ¥ 78 $258
Besides the above, investment securities pledged to suppliers as transaction guarantees at March 31, 2017 and 2016, were ¥61 million (US$544
thousand) and ¥54 million, respectively.
(c) Contingent liabilities
In October 2015 Asahi Kasei Corp. disclosed that Asahi Kasei Construction Materials Corp., a consolidated subsidiary of Asahi Kasei Corp., which performed
pile installation work as a secondary subcontractor for the construction of a condominium complex in Yokohama, Kanagawa, Japan, submitted incorrect
data in the pile installation report for the precast concrete piles installed for this project. There was manipulation of ammeter data and flowmeter data for
the installation of piles.
Asahi Kasei Corp. established a task force and an internal fact-finding committee as well as an independent commission to advance an investigation,
and on October 22, 2015, Asahi Kasei Construction Materials Corp. reported its record of similar pile installation work over the past 10 years to Japan’s
Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
On November 24, 2015, Asahi Kasei Construction Materials Corp. completed all possible investigation of whether or not there was manipulation of data
regarding the installation of precast concrete piles, and reported the results to the MLIT. Out of the 3,052 projects subject to investigation, manipulation of
data was found for 360 projects.
Regarding projects where manipulation of data was found, Asahi Kasei Construction Materials is cooperating with the prime contractors and the owners
of the buildings in efforts to confirm safety based on instructions from the MLIT. Regarding projects where a Specific Administrative Agency has confirmed
safety, the Specific Administrative Agency has issued a report to the MLIT. (At a meeting of the House of Councillors Committee on Land and Transport held
on April 5, 2016, it was reported that the safety of 357 of the 360 projects had been confirmed.)
Although there is a possibility that an effect on the consolidated results of Asahi Kasei Corp. may emerge such as the recording of an additional reserve,
etc., no such effect is reflected in the consolidated financial statements due to the difficulty of making a rational estimate of the amount of financial impact
from this matter as of the time of preparation of the consolidated financial statements.
Contingent liabilities at March 31, 2017 and 2016, arising in the ordinary course of business were as follows:
2017 2016 2017

Loans guaranteed ¥35,774 ¥36,808 $318,870
Letters of awareness — — —
Completion guarantees 10,185 11,989 90,783
Total ¥45,959 ¥48,797 $409,653
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, 2017 and 2016, were ¥9,572
million (US$85,320 thousand) and ¥9,684 million, respectively. The breakdown of reduced-value entries as of March 31, 2017 and 2016, was as follows:
2017 2016 2017

Buildings and structures ¥3,394 ¥3,407 $30,252
Machinery, equipment and vehicles 5,865 5,937 52,277
Land 167 167 1,489
Other 146 173 1,301
Total ¥9,572 ¥9,684 $85,320
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, 2017 and 2016, were as follows:
2017 2016 2017

Salaries and benefits ¥165,337 ¥160,091 $1,473,723
Research and development* 59,476 60,990 530,136
Freight and storage 37,450 36,794 333,809
* The aggregate amounts of research and development expenses included in manufacturing costs and selling, general and administrative expenses for the years ended March 31, 2017 and 2016, were ¥79,566
million (US$709,208 thousand) and ¥81,118 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, 2017 and 2016, were as follows:
2017 2016 2017

¥(152) ¥1,427 $(1,355)
(c) Gain on sales of noncurrent assets

Major components of gain on sales of noncurrent assets for the years ended March 31, 2017 and 2016, were as follows:
2017 2016 2017

Land ¥146 ¥777 $1,301
Machinery 14 93 125
Other 4 47 36
(d) Loss on disposal of noncurrent assets

Loss on disposal of noncurrent assets for the years ended March 31, 2017 and 2016, was primarily loss on abandonment and sale of buildings, machinery and
equipment, etc. The abandonment and sale of buildings, machinery and equipment, etc. was performed under a single, all-inclusive contract for each facility.

(e) Impairment loss
Major components of impairment losses for the years ended March 31, 2017 and 2016, were as follows:
Thousands of
Millions of yen U.S. dollars
Item on the Consolidated
Use Asset class Location 2017 2016 2017 Statements of Income
Joint sales rights of Loss on discontinuation of
pharmaceutical products Sales rights Chiyoda-ku, Tokyo ¥ — ¥3,942 $ — joint sales agreement
Underground uranium storage facility Buildings, etc. Hyuga, Miyazaki — 1,850 — Impairment losses
Idle assets Buildings, etc. Fuji, Shizuoka, etc. — 817 — Impairment losses
Production facility Machinery and
for semiconductors equipment, etc. Nobeoka, Miyazaki — 550 — Impairment losses
Production facility Machinery and Business structure improvement
for performance paper equipment, etc. Gobo, Wakayama — 142 — expenses
Production facility Machinery and Business structure improvement
for electronic devices equipment, etc. Hyuga, Miyazaki 1,210 — 10,785 expenses
Office assets Buildings, etc. Chiyoda-ku, Tokyo,
etc. 1,208 — 10,767 Impairment losses
Production facility for synthetic resin Machinery and Business structure improvement
equipment, etc. Sodegaura, Chiba 1,131 — 10,081 expenses
Dormitory for employees Buildings, etc. Izunokuni, Shizuoka 125 — 1,114 Impairment losses
Others Machinery and Impairment losses and business
equipment, etc. Fuji, Shizuoka, etc. 265 600 2,362 structure improvement expenses
Grouping of operating assets is based on managerial accounting categories, with consideration given to production process, geographic location, and
domain of authority for making investment decisions. Idle assets are recorded separately in each fixed assets class.
With respect to production facility for electronic devices, production facility for synthetic resin, and part of others, the book value was reduced to the
recoverable amount due to diminished profitability, and with respect to dormitory for employees and part of others, the book value was reduced to the
recoverable amount due to disappearance of prospects for future use. The recoverable amount is stated as value for future usage, which is calculated
based on discounted future cash flows within the applicable discount rate of 6% as of March 31, 2017 and 2016.
With respect to office assets, the entire book value is eliminated due to disappearance of prospects for future use.
Among the extraordinary losses under others, ¥115 million (US$1,025 thousand) and ¥324 million were recorded under business structure improvement
expenses for the years ended March 2017 and 2016, respectively.
(f) Business structure improvement expenses
Major components of business structure improvement expenses for the years ended March 31, 2017 and 2016, were as follows:
2017 2016 2017

Impairment of fixed assets ¥2,456 ¥ 466 $21,891
Additional payment of retirement benefits due to application of early retirement, etc. — 110 —
Loss on disposal and devaluation of inventory and others 3,734 3,029 33,283
Total ¥6,189 ¥3,606 $55,165
(g) Loss on piling business

Asahi Kasei Construction Materials Corp., a consolidated subsidiary of Asahi Kasei Corp., submitted incorrect data within their pile installation report for
the precast concrete piles installed as a secondary subcontractor for the construction of a condominium complex in Yokohama, Kanagawa, Japan. There
was manipulation of ammeter data obtained when boring holes for installation, and manipulation of flowmeter data for the injection of cement milk for
consolidation of pile tips. As a result of this matter, Asahi Kasei Corp. has recorded an extraordinary loss in the year ended March 31, 2016, as “loss on piling
business” for expenses related to the investigation, etc., of the manipulation of such data.
(h) Loss on discontinuation of joint sales agreement
2017 2016 2017

Impairment losses ¥— ¥3,942 $—
Cancellation fee — 1,303 —
Other — 22 —
Total ¥— ¥5,266 $—

6. Notes to Consolidated Statements of Comprehensive Income
Recycling adjustment and tax effects on other comprehensive income for the years ended March 31, 2017 and 2016, were as follows:
2017 2016 2017

Net unrealized gain on other securities:
Changes during the fiscal year ¥ 40,337 ¥ (26,559) $ 359,542
Recycling adjustment (9,858) (7,879) (87,869)
Pre-tax effect 30,479 (34,438) 271,673
Tax effect (9,302) 13,341 (82,913)
Net unrealized gain on other securities 21,177 (21,098) 188,760
Deferred gains or losses on hedges:
Changes during the fiscal year 380 (5,649) 3,387
Recycling adjustment (170) 1,976 (1,515)
Adjustment on the acquisition cost of assets — 5,718 —
Pre-tax effect 210 2.045 1,872
Tax effect 24 (527) 214
Deferred gains or losses on hedges 234 1,519 2,086
Foreign currency translation adjustment:
Changes during the fiscal year (8,073) (49,549) (71,958)
Recycling adjustment — 1,028 —
Pre-tax effect (8,073) (48,522) (71,958)
Tax effect 53 (338) 472
Foreign currency translation adjustment (8,020) (48,860) (71,486)
Remeasurements of defined benefit plans:
Changes during the fiscal year (74) (50,607) (660)
Recycling adjustment 10,901 3,397 97,166
Pre-tax effect 10,827 (47,210) 96,506
Tax effect (2,713) 13,880 (24,182)
Remeasurements of defined benefit plans 8,114 (33,331) 72,324
Share of other comprehensive income of affiliates accounted for using equity method:
Changes during the fiscal year 866 (3,363) 7,719
Recycling adjustment (55) (204) (490)
Share of other comprehensive income of affiliates accounted for using equity method 810 (3,567) 7,220
Total other comprehensive income ¥ 22,315 ¥(105,337) $ 198,904
7. Notes to Consolidated Statements of Changes in Net Assets

For the year ended March 31, 2017
(a) Class and total number of issued and outstanding shares and treasury stock
Thousands of shares
Number of shares Increase in number of shares Decrease in number of shares Number of shares
as of March 31, 2016 during the fiscal year during the fiscal year as of March 31, 2017
Issued and outstanding shares
Common stock 1,402,616 — — 1,402,616
Total 1,402,616 — — 1,402,616
Treasury stock
Common stock (Notes 1 & 2) 5,862 99 2 5,959
Total 5,862 99 2 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 ¥13,968 million (US$124,503 thousand)
Dividend per share ¥10.00 (US$0.09)
Date of record March 31, 2016
Payment date June 6, 2016
2) The following was resolved by the Board of Directors on November 1, 2016.
Date of record September 30, 2016
Payment date 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.
Source of dividends Retained earnings
For the year ended March 31, 2016
(a) Class and total number of issued and outstanding shares and treasury stock
Thousands of shares
Number of shares Increase in number of shares Decrease in number of shares Number of shares
as of March 31, 2015 during the fiscal year during the fiscal year as of March 31, 2016
Issued and outstanding shares
Common stock 1,402,616 — — 1,402,616
Total 1,402,616 — — 1,402,616
Treasury stock
Common stock (Notes 1 & 2) 5,743 125 7 5,862
Total 5,743 125 7 5,862
Notes: 1. The increase of 125 thousand shares in common stock of treasury stock was due to the purchase of shares in quantities of less than one share unit.
2. The decrease of 7 thousand shares in common stock of treasury stock was due to the sale of shares in quantities of less than one share unit.
(b) Dividends
i) Cash dividends paid
1) The following was resolved by the Board of Directors on May 12, 2015.
Total dividends ¥13,969 million
Dividend per share ¥10.00
2) The following was resolved by the Board of Directors on November 6, 2015.
Date of record September 30, 2015
Payment date December 1, 2015
ii) Dividends for which the date of record falls within the fiscal year under review but the payment date occurs in the following fiscal year
The following was resolved by the Board of Directors on May 11, 2016.
Source of dividends Retained earnings

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, 2017 and 2016, was as follows:
2017 2016 2017

Cash and deposits ¥145,289 ¥146,054 $1,295,026
Time deposits with deposit term of over 3 months (1,212) (2,281) (10,803)
Money market funds included in short-term investment securities — 1,534 —
Cash and cash equivalents ¥144,077 ¥145,307 $1,284,223
9. Leases
(a) Financing lease transactions
Financing lease transactions without title transfer
i) Components of lease assets are as follows:
1) Property, plant and equipment: Mainly model homes (buildings and structures) for housing business.
2) Intangible fixed assets: Software
ii) Depreciation of lease assets:
As stated in Note 2 “Significant accounting policies (c) Noncurrent assets and depreciation/amortization,” the financing lease transactions without title
transfer which occurred prior to March 31, 2008, are accounted for on a basis similar to an operating lease. For such leases, information for the cost and
related accumulated amortization, computed using the straight-line method over the term of the lease assuming such lease transactions accounted for as
an operating lease had been accounted for as a financing lease, is required to be disclosed. However, such disclosure is omitted due to immateriality.
(b) Operating lease transactions
Future lease payments for the non-cancelable portion of the Company’s operating leases at March 31, 2017 and 2016, were as follows:
2017 2016 2017

Due within one year ¥ 5,753 ¥ 5,414 $ 51,279
Due after one year 33,899 5,255 302,157
Total ¥39,652 ¥10,668 $353,436

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, 2017 and 2016, 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).
Millions of yen
2017
Carrying amount Fair value Difference
Cash and deposits ¥145,289 ¥145,289 ¥ —
Notes and accounts receivable—trade 302,751
Allowance for doubtful accounts (*1) (2,078)
300,672 300,672 —
Short-term investment securities and investment securities:
Investments in affiliates 14,529 9,558 (4,971)
Other securities 211,694 211,694 —
Long-term loans receivable 19,371 19,366 (5)
Total assets 691,554 686,579 (4,976)
Notes and accounts payable—trade 147,543 147,543 —
Short-term loans payable 88,965 88,965 —
Commercial paper 56,000 56,000 —
Income taxes payable 16,202 16,202 —
Bonds payable 40,000 40,646 (646)
Long-term loans payable 217,094 216,145 949
Lease obligations 773 765 8
Long-term guarantee deposits 8,299 8,344 (45)
Total liabilities 574,876 574,610 266
Derivative financial instruments (*2) ¥ (249) ¥ (249) ¥ —

Millions of yen
2016
Cash and deposits ¥146,054 ¥146,054 ¥ —
Notes and accounts receivable—trade 280,095
278,396 278,396 —
Investments in affiliates 10,890 5,985 (4,905)
Other securities 183,672 183,672 —
Total assets 635,618 630,711 (4,908)
Notes and accounts payable—trade 126,653 126,653 —
Income taxes payable 32,735 32,735 —
Bonds payable 40,000 40,650 (650)
Long-term loans payable 134,801 137,008 (2,207)
Lease obligations 1,456 1,465 (9)
Total liabilities 617,096 620,017 (2,921)
Derivative financial instruments (*2) ¥ 354 ¥ 354 ¥ —
Thousands of U.S. dollars
2017
Cash and deposits $1,295,026 $1,295,026 $ —
Notes and accounts receivable—trade 2,698,556
2,680,025 2,680,025 —
Investment in affiliates 129,504 85,195 (44,309)
Other securities 1,886,924 1,886,924 —
Total assets 6,164,132 6,119,788 (44,353)
Notes and accounts payable—trade 1,315,117 1,315,117 —
Commercial paper 499,153 499,153 —
Income taxes payable 144.416 144,416 —
Bonds payable 356,538 362,296 (5,758)
Long-term loans payable 1,935,057 1,926,598 8,459
Lease obligations 6,890 6,819 71
Total liabilities 5,124,129 5,121,758 2,371
Derivative financial instruments (*2) $ (2,219) $ (2,219) $ —
(*1) This reduction represents specific allowance for doubtful accounts related to notes and ii) Liabilities
accounts receivable—trade. 1) N otes and accounts payable–trade; short-term loans payable; commercial paper; income taxes
(*2) The amounts represent net amount of assets and liabilities resulting from derivative transac- payable
tions. In the case of a net liability, the amount is shown in parentheses. As their fair values approximate book value due to their short maturity, the corresponding book
Note 1) M ethod to determine the estimated fair value of financial instruments; securities and value amounts are used as fair value.
derivative financial instruments 2) Bonds payable
i) Assets Fair value of the bonds payable issued by the parent company is based on the quoted market
1) Cash and deposits, notes and accounts receivable—trade price if available. For those without a quoted market price that are subject to special treatment
As their fair value approximates book value due to their short maturity, the corresponding book for interest-rate swaps, fair value is based on the present value by totaling the amount of
value amount is used as fair value. principal and interest, together with related interest-rate swaps, discounted by the interest rate
2) Short-term investment securities and investment securities that would apply if equivalent bonds were newly issued.
The stock exchange prices are used to determine fair value of traded stocks, and the correspond- 3) Long-term loans payable
ing book value amount is used as fair value of money market funds, because their fair value The carrying amounts shown include long-term loans payable that are scheduled for repayment
approximates book value. Refer to Note 11 “Marketable securities and investment securities” for within one year of March 31, 2017 and 2016, amounting to ¥24,510 million (US$218,469 thou-
information on securities classified by holding purpose. sand) and ¥40,169 million, respectively. Their fair values are based on present value of principal
3) Long-term loans receivable and interest discounted using the current assumed rates for similar long-term loans payable.
The carrying amounts shown include long-term loans receivable scheduled for repayment For long-term loans payable bearing variable interest rates, fair value of those subject to special
within one year. Their fair values are determined based on the present value of principal and treatment of interest rate-swaps is based on present value by totaling the amount of principal
interest, discounted using current assumed rates for similar long-term loans receivable. For and interest, together with related interest-rate swaps, discounted by the interest rate that would
long-term loans receivable bearing variable interest rates, as they are deemed to reflect market apply if equivalent long-term loans were newly entered. For other long-term loans payable, book
interest rates within a short term, book values are used as fair value. value is used as fair value as they are deemed to reflect market interest rates within a short term.

4) Lease obligations securities, as no quoted market price is available and it is deemed extremely difficult to
The carrying amounts shown are the total amount of lease obligations under current liabilities determine fair value due to the impossibility of estimating future cash flows.
and lease obligations under noncurrent liabilities. Present value, calculated by discounting the Note 3) F or investment securities, with a carrying amount as of March 31, 2017 and 2016, amount-
total amount of principal and interest using the presumed interest rate that would apply if lease ing to ¥3,127 million (US$27,872 thousand) and ¥3,117 million, respectively, fair value is
transactions were newly made, is used as the fair value. not included in short-term investment securities and investment securities, as no quoted
5) Long-term guarantee deposits market price is available and it is deemed extremely difficult to determine fair value due to
In cases where the deposit period can be estimated, the fair value of long-term guarantee the impossibility of estimating future cash flows.
deposits is determined using a discounted cash flow over that period. Note 4) F or long-term guarantee deposits, the fair value of a portion having a carrying amount as
iii) Derivative transactions of March 31, 2017 and 2016, amounting to ¥12,180 million (US$108,566 thousand) and
Refer to Note 12 “Derivative financial instruments.” ¥12,098 million, respectively, is not included as no quoted market price is available and it
Note 2) For equity investments in nonpublic companies, with a carrying amount as of March 31, is deemed extremely difficult to determine fair value due to the impossibility of estimating
2017 and 2016, amounting to ¥54,787 million (US$488,341 thousand) and ¥48,453 million, future cash flows.
respectively, fair value is not included in short-term investment securities and investment
Note 5) For monetary credits and securities with maturity, the amounts scheduled for redemption subsequent to the closing date are as follows:
Millions of yen
2017
Due after one year, Due after five years, Due after more than
Due within one year within five years within ten years ten years
Cash and deposits ¥145,289 ¥ — ¥— ¥—
Notes and accounts receivable—trade 302,751 — — —
Long-term loans receivable 453 18,912 5 —
Total ¥448,493 ¥18,912 ¥ 5 ¥—
Millions of yen
2016
Cash and deposits ¥146,054 ¥ — ¥— ¥—
Notes and accounts receivable—trade 280,095 — — —
Long-term loans receivable 254 16,353 — —
Total ¥426,402 ¥16,353 ¥— ¥—
2017
Cash and deposits $1,295,026 $ — $— $—
Notes and accounts receivable—trade 2,698,556 — — —
Long-term loans receivable 4,038 168,571 45 —
Total $3,997,620 $168,571 $45 $—
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:
Millions of yen
2017
Short-term loans Long-term loans
Year ending March 31 payable Commercial paper Bonds payable payable Lease obligations Total
2018 ¥88,965 ¥56,000 ¥20,000 ¥24,510 ¥305 ¥189,780
2019 — — — 59,796 186 59,982
2020 — — 20,000 21,279 143 41,422
2021 — — — 22,900 112 23,012
2022 — — — 32,790 26 32,816
2023 and thereafter — — — 55,819 — 55,819
Millions of yen
2016
2017 ¥273,418 ¥— ¥ — ¥40,169 ¥919 ¥314,506
2018 — — 20,000 18,941 280 39,221
2019 — — — 49,616 118 49,734
2020 — — 20,000 12,028 83 32,111
2021 — — — 4,436 55 4,491
2022 and thereafter — — — 9,611 1 9,612

2017
2018 $792,985 $499,153 $178,269 $218,469 $2,719 $1,691,595
2019 — — — 532,989 1,658 534,647
2020 — — 178,269 189,669 1,275 369,213
2021 — — — 204,118 998 205,116
2022 — — — 292,272 232 292,504
2023 and thereafter — — — 497,540 — 497,540
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, 2017 and 2016, were as follows:
Millions of yen
2017
Carrying Unrealized gains
amount Cost (losses)
Securities with unrealized gains:
Equity securities ¥200,280 ¥35,723 ¥164,557
Others — — —
Subtotal 200,280 35,723 164,557
Securities with unrealized losses:
Equity securities 11,414 12,690 (1,277)
Others — — —
Subtotal 11,414 12,690 (1,277)
Total ¥211,694 ¥48,414 ¥163,280
Millions of yen
2016
Equity securities ¥172,068 ¥36,960 ¥135,107
Others — — —
Subtotal 172,068 36,960 135,107
Others 1,534 1,534 —
Subtotal 11,604 13,973 (2,369)
Total ¥183,672 ¥50,934 ¥132,738
2017
Equity securities $1,785,186 $318,415 $1,466,771
Others — — —
Subtotal 1,785,186 318,415 1,466,771
Others — — —
Subtotal 101,738 113,112 (11,382)
Total $1,886,924 $431,536 $1,455,388

(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, 2017 and 2016, were as follows:
2017 2016 2017

Selling amount ¥12,087 ¥10,396 $107,737
Gain on sales of securities 9,918 8,275 88,404
Loss on sales of securities — — —
(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, 2017, was ¥101 million (US$900
thousand), which is for other securities, and for the year ended March 31, 2016, ¥924 million, which is the sum of ¥796 million for equity securities of
unconsolidated subsidiaries and affiliates, and ¥127 million for other securities. Among the loss on other devaluation of investment securities for the year
ended March 31, 2016, ¥561 million was recorded under business structure improvement expenses.
12. Derivative financial instruments

(a) Derivative financial instruments for which hedge accounting is not applied
i) Foreign exchange forward contracts
Millions of yen
2017
Amount of contract Profit (loss) from
Classification Items Amount of contract over 1 year Fair value valuation
Off-market transactions Foreign exchange forward contracts:
Selling:
U.S. dollar ¥24,981 ¥— ¥ 100 ¥ 100
Euro 9,289 — (9) (9)
Thai baht 879 — 11 11
Singapore dollar 11 — (0) (0)
British pound 52 — 0 0
Buying:
U.S. dollar 1,827 — (376) (376)
Euro 45,868 — (48) (48)
Thai baht 4 — (0) 0
Total ¥82,911 ¥— ¥(322) ¥(322)
Millions of yen
2016
Selling:
U.S. dollar ¥21,694 ¥ — ¥698 ¥698
Euro 6,137 — 16 16
Thai baht 1,115 — (0) (0)
Singapore dollar 396 — 40 40
British pound — — — —
Buying:
U.S. dollar 2,679 728 (148) (148)
Euro 0 — (0) (0)
Thai baht 9 — (0) (0)
Total ¥32,030 ¥728 ¥605 ¥605

2017
Selling:
U.S. dollar $222,667 $— $ 891 $ 891
Euro 82,797 — (80) (80)
Thai baht 7,835 — 98 98
Singapore dollar 98 — (0) (0)
British pound 463 — 0 0
Buying:
U.S. dollar 16,285 — (3,351) (3,351)
Euro 408,842 — (428) (428)
Thai baht 36 — 0 0
Total $739,023 $— $(2,870) $(2,870)
(b) Derivative financial instruments for which hedge accounting is applied

i) Foreign exchange forward contracts
Millions of yen
2017
Amount of contract
Classification Items Hedged assets/liabilities Amount of contract over 1 year Fair value
Principle-based accounting Foreign exchange forward contracts:
Selling:
U.S. dollar Accounts receivable—trade ¥ 619 ¥— ¥36
Euro Accounts receivable—trade 109 — 1
Thai baht Accounts receivable—trade 11 — (0)
Singapore dollar Accounts receivable—trade — — —
Buying:
U.S. dollar Accounts payable—trade 1,445 — 32
Euro Accounts payable—trade 2 — (0)
Thai baht Accounts payable—trade 106 — 6
Singapore dollar Accounts payable—trade — — —
Total ¥2,292 ¥— ¥74
Millions of yen
2016
Amount of contract
Selling:
U.S. dollar Accounts receivable—trade ¥2,953 ¥— ¥(170)
Euro Accounts receivable—trade 111 — (2)
Thai baht Accounts receivable—trade — — —
Singapore dollar Accounts receivable—trade 289 — (12)
Buying:
U.S. dollar Accounts payable—trade 2,018 — (62)
Thai baht Accounts payable—trade 177 — (6)
Singapore dollar Accounts payable—trade 29 — 1
Total ¥5,596 ¥— ¥(251)

2017
Amount of contract
Selling:
U.S. dollar Accounts receivable—trade $ 5,517 $— $321
Euro Accounts receivable—trade 972 — 9
Thai baht Accounts receivable—trade 98 — (0)
Singapore dollar Accounts receivable—trade — — —
Buying:
U.S. dollar Accounts payable—trade 12,880 — 285
Thai baht Accounts payable—trade 945 — 53
Singapore dollar Accounts payable—trade — — —
Total $20,430 $— $660
ii) Interest-rate swaps, and interest-rate and currency swaps

Millions of yen
2017
Amount of contract
Special treatment Interest-rate swaps
for interest-rate swaps Pay fixed/receive floating Long-term loans payable ¥165,889 ¥139,918 (*)
Special treatment Interest-rate and currency swaps
for interest-rate U.S. dollar receive floating/
and currency swaps Thai baht pay fixed Long-term loans payable 324 162 (*)
Total ¥166,213 ¥140,080 ¥—
Millions of yen
2016
Amount of contract
for interest-rate swaps Pay fixed/receive floating Long-term loans payable ¥76,871 ¥64,084 (*)
and currency swaps Thai baht pay fixed Long-term loans payable 477 318 (*)
Total ¥77,349 ¥64,403 ¥—
2017
Amount of contract
for interest-rate swaps Pay fixed/receive floating Long-term loans payable $1,478,643 $1,247,152 (*)
and currency swaps Thai baht pay fixed Long-term loans payable 2,888 1,444 (*)
Total $1,481,531 $1,248,596 $—
(*) 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.

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, 2017 and 2016, were as follows:
2017 2016 2017

Beginning balance of the projected benefit obligations ¥398,588 ¥352,813 $3,552,794
Service cost 15,581 13,604 138,880
Interest cost 677 3,439 6,034
Actuarial gains/losses 2,133 44,020 19,012
Payment of retirement benefits (19,016) (18,549) (169,498)
Other (*) 169 3,260 1,506
Ending balance of the projected benefit obligations ¥398,132 ¥398,588 $3,548,730
(*) ¥3,101 million was recorded under Increase from changes in scope of consolidation for the years ended March 2016.
Reconciliations of beginning and ending balances of plan assets for the fiscal years ended March 31, 2017 and 2016, were as follows:
2017 2016 2017

Beginning balance of plan assets ¥212,288 ¥213,707 $1,892,219
Expected return 5,265 5,311 46,929
Actuarial gains/losses 2,056 (6,598) 18,326
Contributions 9,799 10,200 87,343
Payment of retirement benefits (9,532) (10,146) (84,963)
Other (110) (186) (980)
Ending balance of plan assets ¥219,765 ¥212,288 $1,958,864
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, 2017 and 2016, were as follows:
2017 2016 2017

Projected benefit obligations of funded plans ¥ 256,082 ¥ 255,432 $ 2,282,574
Plan assets (219,765) (212,288) (1,958,864)
Subtotal 36,318 43,145 323,719
Projected benefit obligations of unfunded plans 142,050 143,155 1,266,156
Net of liability and asset that have been recorded in the consolidated balance sheets ¥ 178,368 ¥ 186,300 $ 1,589,874
Net defined benefit liability ¥ 178,368 ¥ 186,300 $ 1,589,874

Net of liability and asset that have been recorded in the consolidated balance sheets ¥ 178,368 ¥ 186,300 $ 1,589,874
Periodic retirement benefit expenses for employees and the breakdown of items for the years ended March 31, 2017 and 2016, were as follows:
2017 2016 2017

Service cost (net of employee contributions) ¥13,952 ¥11,967 $124,360
Interest cost 677 3,439 6,034
Expected return on plan assets (5,265) (5,311) (46,929)
Amortization of actuarial gains/losses 10,763 3,266 95,935
Amortization of prior service costs 142 142 1,266
Additional retirement benefits and other 506 452 4,510
Retirement benefit expenses of defined benefit plans ¥20,775 ¥13,956 $185,177

The components of other comprehensive income on defined benefit plans for the fiscal years ended March 31, 2017 and 2016, were as follows:
2017 2016 2017

Prior service costs ¥ 142 ¥ 142 $ 1,266
Actuarial gains/losses 10,685 (47,352) 95,240
Total ¥10,827 ¥(47,210) $96,506
Accumulated other comprehensive income on defined benefit plans at March 31, 2017 and 2016, was as follows:
2017 2016 2017

Unrecognized prior service costs ¥ 219 ¥ 361 $ 1,952
Unrecognized actuarial gains/losses 47,783 58,468 425,911
Total ¥48,002 ¥58,829 $427,863
Share by major classifications for plan assets at March 31, 2017 and 2016, was as follows:
2017 2016
Bonds 37% 36%
Stock 24 21
Alternative investments 16 16
Life insurance 14 14
Cash and deposits 8 10
Other 1 3
Total 100% 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, 2017 and 2016, were as follows:
2017 2016
Discount rate Mainly 0.1% Mainly 0.1%
The long-term rate of expected return on plan assets Mainly 2.5% Mainly 2.5%
Expected rate of increase in salary 2.3–7.1% 2.3–7.1%
Required payments to defined contribution plans at March 31, 2017, amounted to ¥1,874 million (US$16,704 thousand), and at March 31, 2016,
amounted to ¥1,416 million.

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, 2017 and 2016, were as follows:
2017 2016 2017

Deferred tax assets:
Net defined benefit liability ¥ 55,324 ¥ 57,150 $ 493,128
Accrued bonuses 7,687 7,682 68,518
Tax loss carry forwards 6,870 8,105 61,235
Foreign tax credit carry forwards 5,560 5,319 49,559
Unrealized gain on noncurrent assets and others 3,843 4,004 34,254
Impairment losses 3,397 4,332 30,279
Loss on disposal of noncurrent assets 3,383 4,198 30,154
Depreciation 2,781 2,696 24,788
Unrealized loss on investment securities 1,765 2,073 15,732
Provision for periodic repairs 1,456 1,283 12,978
Provision for product warranties 1,338 1,168 11,926
Accrued enterprise tax 1,247 2,074 11,115
Devaluation of inventories 1,092 1,057 9,733
Allowance for doubtful accounts 979 821 8,726
Asset retirement obligations 610 813 5,437
Other 11,251 10,197 100,285
Subtotal deferred tax assets 108,583 112,969 967,849
Less: Valuation allowance (10,054) (16,294) (89,616)
Total deferred tax assets 98,528 96,676 878,224
Deferred tax liabilities:

Unrealized gain on other securities (51,508) (42,075) (459,114)
Identified intangible assets during business combination (50,049) (53,707) (446,109)
Depreciation—overseas subsidiaries (13,405) (13,158) (119,485)
Deferred gain on property, plant and equipment (8,388) (9,037) (74,766)
Other (5,388) (5,519) (48,026)
Total deferred tax liabilities (128,738) (123,496) (1,147,500)
Net deferred tax assets (liabilities) ¥ (30,210) ¥ (26,820) $ (269,275)
Net deferred tax assets (liabilities) at March 31, 2017 and 2016, were included in the following line items on the consolidated balance sheets.
2017 2016 2017

Current assets—deferred tax assets ¥ 20,279 ¥ 18,133 $ 180,756
Noncurrent assets—deferred tax assets 9,309 20,098 82,975
Current liabilities—other (39) (120) (348)
Noncurrent liabilities—deferred tax liabilities (59,759) (64,930) (532,659)
In the fiscal year ended March 31, 2017, environmental expenses, experiment and research expenses, deferred gains or losses on hedges, and acceler-
ated depreciation, which had previously been reported separately, are included in other due to immateriality. Accordingly, the figures for other for the fiscal
year ended March 31, 2016, includes ¥238 million in environmental expenses, ¥198 million in experiment and research expenses, ¥19 in deferred gains or
losses on hedges, and ¥(137) million in accelerated depreciation.

Reconciliation of the differences between the statutory tax rate and the effective income tax rate for the years ended March 31, 2017 and 2016, was as follows:
2017 2016
Statutory tax rate 30.9% 33.1%
Increase (reduction) in taxes resulting from:
Non-deductible expenses and non-taxable income 1.1 1.1
Equalization of inhabitants taxes 0.3 0.3
R&D expenses deductible from income taxes (3.7) (4.6)
Amortization of goodwill and negative goodwill 3.5 3.5
Equity in (losses) earnings of unconsolidated subsidiaries and affiliates (1.0) 0.2
Undistributed earnings (losses) of foreign subsidiaries 0.2 (0.1)
Difference of tax rates for foreign subsidiaries (1.2) (1.0)
Valuation allowance (3.9) 0.7
Decrease in deferred tax assets due to the change in statutory tax rate — 1.9
Other (0.2) 1.1
Effective income tax rate 25.9% 36.2%
Revision of deferred tax assets and liabilities due to change in corporate tax rate, etc.
The “Act for Partial Revision of the Act for Partial Revision of the Act for Consumption Tax for Drastic Reform of the Taxation System to Ensure Stable
Financial Resources for Social Security” (Act No. 85 of 2016) and the “Act for Partial Revision of the Act for Partial Revision of the Act for Local Tax and Local
Allocation Tax for Drastic Reform of the Taxation System to Ensure Stable Financial Resources for Social Security” (Act No. 86 of 2016) were issued on
November 18, 2016. Accordingly, the statutory effective tax rate applied to the calculation of deferred tax assets and deferred tax liabilities for the fiscal year
ended March 31, 2017, was changed from that applied to said calculation for the fiscal year ended March 31, 2016. The impact of this change is immaterial.
15. Business combinations

Transactions under common control, etc.
Merger by absorption of consolidated subsidiaries
(a) Outline of the transaction
i) Name and nature of business of merged companies
Surviving company
Name Asahi Kasei Corp.
Nature of business Diversified chemicals operations
Absorbed companies
Name Asahi Kasei Chemicals Corp. Asahi Kasei Fibers Corp. Asahi Kasei E-materials Corp.
Nature of business Manufacture and Manufacture and Manufacture and
sale of chemical products sale of fiber products sale of electronic materials
ii) Date of merger

April 1, 2016
iii) Statutory form of merger
Absorption-type merger with Asahi Kasei Corp. as the surviving company
iv) Name of surviving company
Asahi Kasei Corp.
v) Other items related to outline of the transaction
With the start of the Asahi Kasei Group’s new medium-term management initiative in fiscal 2016, the operating portfolio was realigned into three busi-
ness sectors of Material (currently the Chemicals & Fibers segment and the Electronics segment), Homes (currently the Homes & Construction Materials
segment), and Health Care. Within each business sector, portfolio-based management will be thoroughly implemented with optimum allocation of
management resources, and further growth will be pursued by creating synergy among the sectors. Together with this change, in order to obtain efficient
management and mutual coordination within the Material business sector and achieve greater corporate value, the decision was made to merge Asahi
Kasei Chemicals Corp., Asahi Kasei Fibers Corp., and Asahi Kasei E-materials Corp. with the Company.
(b) Outline of the accounting treatment implemented
The transaction was treated as a transaction under common control in accordance with the Accounting Standards Board of Japan (ASBJ) Statement
No. 21 “Accounting Standard for Business Combinations” and ASBJ Guidance No. 10 “Guidance on Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures.”

16. Asset retirement obligations
(a) Outline of asset retirement obligations
Due to commitments pertaining to restoration to original state before vacating in accordance with land lease agreements such as for offices, and due to
commitments to dismantle leased buildings upon termination of lease period, etc., in accordance with lease agreements for model home parks, relevant
asset retirement obligations are recorded in the consolidated balance sheets.
In accordance with building lease agreements such as for the head offices, commitments pertaining to restoration to original state before vacating
are recognized as asset retirement obligations. However, instead of recording them as aforementioned asset retirement obligations under liabilities, the
amount of lease deposit that cannot ultimately be expected to be collected was estimated in a reasonable manner, and of that, the amount corresponding
to the fiscal year ended March 31, 2017, 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, 2017 and 2016
2017 2016 2017

Balance at beginning of year ¥4,047 ¥4,039 $36,073
Increase due to asset retirement obligations accrued 37 200 330
Adjustment due to passage of time 136 133 1,212
Decrease due to fulfillment of asset retirement obligations (125) (193) (1,114)
Decrease due to foreign exchange fluctuation (88) (131) (784)
Balance at end of year ¥4,007 ¥4,047 $35,716
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, 2017 and 2016, were as follows:
2017 2016 2017

Balance at beginning of year ¥1,733 ¥1,650 $15,447
Increase due to new lease agreements 79 126 704
Decrease due to the cancelation of existing lease agreements (46) (43) (410)
Balance at end of year ¥1,766 ¥1,733 $15,741
17. Business segment information

(a) Overview of reportable segments Electronics business
The Company’s business segments are based on organizational units The Company manufactures, processes, and sells battery separator prod-
for which separate financial information is available, and the Board of ucts (such as lithium-ion battery separator and lead-acid battery separator)
Directors carries out periodic review to allocate management resources and electronic devices (such as mixed-signal LSIs and Hall elements).
and evaluate business performance. Homes segment
The Company is organized under an operating holding company Homes business
configuration with the operating holding company and core operating The Company constructs unit homes and apartment buildings, and
companies performing operations in three business sectors. The operating operates real estate businesses, remodeling businesses, and financial and
holding company and each core operating company lays out strategy and other services.
develops business activities in Japan and abroad. Construction Materials business
With the start of a new medium-term management initiative in April The Company manufactures and sells autoclaved aerated concrete (AAC)
2016, the Company realigned its business portfolio. As a result, beginning panels, insulation panels, foundation systems, and structural components.
with the first quarter of the year ended March 31, 2017, the Company’s
Health Care segment
operations were reclassified from the four reportable segments “Chemicals
Pharmaceuticals business
& Fibers,” “Homes & Construction Materials,” “Electronics,” and “Health Care,”
The Company manufactures and sells pharmaceuticals and diagnostic
together with an “Others” category, to the three reportable segments of
reagents.
“Material,” “Homes,” and “Health Care,” together with an “Others” category.
Medical Care business
Main products of the three reportable segments are as follows:
The Company manufactures and sells artificial kidneys, therapeutic
Material segment apheresis devices, and virus removal filters.
Fibers business Critical Care business
The Company manufactures, processes, and sells elastic polyurethane The Company manufactures and sells defibrillators and temperature
filament, cupro fiber, nonwoven fabrics, and nylon 66 filament. management systems.
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).

(b) Methods to determine net sales, income or loss, assets, and other items by reportable business segment
Profit by reportable business segment is stated on an operating income basis. Intersegment net sales and transfers are based on the values of transactions
undertaken between third parties.
(c) Information concerning net sales, income or loss, assets, and other items for each reportable segment
Millions of yen
2017
Material Homes Health Care Subtotal Others (Note 1) Total
Sales:
External customers ¥ 973,169 ¥618,964 ¥270,120 ¥1,862,252 ¥ 20,738 ¥1,882,991
Intersegment 4,174 1,761 34 5,969 30,384 36,352
Total 977,342 620,725 270,154 1,868,221 51,122 1,919,343
Operating income 84,472 64,100 31,921 180,493 6,041 186,534
Assets 1,231,592 455,242 459,251 2,146,086 109,178 2,255,264
Other items:
Depreciation and amortization (Note 2) 50,836 9,411 18,187 78,435 4,637 83,072
Amortization of goodwill 8,766 — 8,780 17,546 260 17,806
Investments in affiliates accounted
for using equity method 35,055 4,796 111 39,962 17,873 57,835
Increase in property, plant and equipment,
and intangible assets 47,205 12,139 15,604 74,947 6,836 81,783
Notes: 1. The “Others” category includes electricity supply, plant engineering and environmental engineering, research and analysis, and employment agency/staffing operations.
2. Amortization of goodwill is not included.
Millions of yen
2016
Sales:
External customers ¥1,004,438 ¥632,418 ¥285,404 ¥1,922,261 ¥ 18,653 ¥1,940,914
Intersegment 3,761 53 48 3,862 41,854 45,716
Total 1,008,198 632,472 285,452 1,926,123 60,508 1,986,630
Operating income 79,209 71,000 36,235 186,444 3,781 190,225
Assets 1,224,287 449,289 474,265 2,147,842 101,418 2,249,260
Other items:
Amortization of goodwill 5,887 — 9,646 15,533 288 15,821
for using equity method 31,993 — — 31,993 17,541 49,534
2017
Sales:
External customers $ 8,674,294 $5,517,105 $2,407,701 $16,599,091 $184,847 $16,783,947
Intersegment 37,205 15,697 303 53,204 270,826 324,022
Total 8,711,489 5,532,801 2,408,004 16,652,295 455,673 17,107,969
Operating income 752,937 571,352 284,526 1,608,815 53,846 1,662,662
Assets 10,977,734 4,057,777 4,093,511 19,129,031 973,153 20,102,184
Other items:
Amortization of goodwill 78,135 — 78,260 156,395 2,317 158,713
for using equity method 312,461 42,749 989 356,199 159,310 515,509

(d) Reconciliation of differences between total amounts of reportable segments and amounts appearing in the consolidated financial
statements (adjustment of difference)
Sales 2017 2016 2017

Total of reporting segments ¥1,868,221 ¥1,926,123 $16,652,295
Net sales in “Others” category 51,122 60,508 455,673
Elimination of intersegment transactions (36,352) (45,716) (324,022)
Net sales on consolidated statements of income ¥1,882,991 ¥1,940,914 $16,783,947
Operating income 2017 2016 2017

Total of reporting segments ¥180,493 ¥186,444 $1,608,815
Operating income in “Others” category 6,041 3,781 53,846
Elimination of intersegment transactions 220 149 1,961
Corporate expenses, etc.* (27,525) (25,171) (245,343)
Operating income on consolidated statements of income ¥159,229 ¥165,203 $1,419,280
* Corporate expenses, etc. include corporate revenue, basic research expense, and group management expense, etc. which are not allocated to reporting segments.
Assets 2017 2016 2017

Total of reporting segments ¥2,146,086 ¥2,147,842 $19,129,031
Assets in “Others” category 109,178 101,418 973,153
Elimination of intersegment transactions (304,452) (318,969) (2,713,718)
Corporate assets* 303,688 281,439 2,706,908
Total assets on consolidated balance sheets ¥2,254,500 ¥2,211,729 $20,095,374
* Corporate assets include assets of the parent company—surplus operating funds (cash and deposits), long-term investment capital (investment securities, etc.), and land, etc.
Amounts from consolidated

Total of reportable segments Others Adjustments (Note 1) financial statements
Thousands of Thousands of Thousands of Thousands of
Millions of yen U.S. dollars Millions of yen U.S. dollars Millions of yen U.S. dollars Millions of yen U.S. dollars
Other items 2017 2016 2017 2017 2016 2017 2017 2016 2017 2017 2016 2017
Depreciation and amortization
(Note 2) ¥78,435 ¥82,406 $699,126 ¥ 4,637 ¥ 4,624 $ 41,332 ¥8,315 ¥6,782 $74,115 ¥91,387 ¥93,811 $814,573
Amortization of goodwill 17,546 15,533 156,395 260 288 2,317 — — — 17,806 15,821 158,713
for using equity method 39,962 31,993 356,199 17,873 17,541 159,310 — — — 57,835 49,534 515,509
Increase in property, plant and
equipment, and intangible assets 74,947 88,514 668,036 6,836 4,706 60,932 8,790 5,780 78,349 90,573 99,000 807,318
Notes: 1. Adjustments include elimination of intersegment transactions and corporate expenses, etc.
(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
2017 2016 2017

Japan China Other regions Total Japan China Other regions Total Japan China Other regions Total
¥1,226,633 ¥165,481 ¥490,877 ¥1,882,991 ¥1,261,203 ¥185,241 ¥494,470 ¥1,940,914 $10,933,532 $1,475,007 $4,375,408 $16,783,947
2) Property, plant and equipment.

2017 2016 2017

Japan United States Other regions Total Japan United States Other regions Total Japan United States Other regions Total
¥371,654 ¥86,780 ¥98,447 ¥556,881 ¥361,825 ¥91,425 ¥102,739 ¥555,989 $3,312,719 $773,509 $877,502 $4,963,731
3) Information by major customer

Information by major customer is not shown because no customer accounts for 10% or more of net sales on the consolidated statements of income.

18. Information on related parties
Related party transactions
(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, 2017:
Type of related party An affiliated company
Name of company PTT Asahi Chemical Co., Ltd.
Location Rayong, Thailand
Paid-in capital 13,819 million Thai baht
Business line Chemicals
Share of voting rights held by the company (of which, indirectly held) 50.0% (50.0%)
Relationship with the related party Debt guarantee and seconded executive
Nature of transaction Guarantee for completion of manufacturing facilities
Transaction amount ¥10,185 million (US$90,783 thousand)
Amount name —
Balance at end of year —
For the year ended March 31, 2016: None
(b) Transactions between consolidated subsidiaries of the company submitting the consolidated financial statements and related parties
i) Unconsolidated subsidiaries, affiliates, etc. of the company submitting the consolidated financial statements

Type of related party An affiliated company
Name of company PTT Asahi Chemical Co., Ltd.
Location Rayong, Thailand
Paid-in capital 14,246 million Thai baht in the year ended March 31, 2016
Business line Chemicals
Share of voting rights held by the company (of which, indirectly held) 48.5% (48.5%) in the year ended March 31, 2016
Relationship with the related party Debt guarantee
Nature of transaction Guarantee for completion of manufacturing facilities
Transaction amount ¥11,989 million
Amount name —
Balance at end of year —
ii) Directors, Corporate Auditors, major shareholders, etc. of the company submitting the consolidated financial statements

Type of related party A company in which close relative(s) of a Director or A company in which close relative(s) of a Director or
Corporate Auditor of the Company hold(s) a majority Corporate Auditor of the Company hold(s) a majority
of voting rights of voting rights
Name of company Miwa-Syouji Co., Ltd. Miwa Vinyl Co., Ltd.
Location Nobeoka, Miyazaki, Japan Nobeoka, Miyazaki, Japan
Paid-in capital ¥65 million ¥10 million
Business line Wholesale trade Manufacture and sale of plastic packaging material
Share of voting rights held by the company 0.0% 0.0%
Relationship with the related party Purchasing consumable goods Purchasing consumable goods and raw materials
Nature of transaction Purchasing consumable goods Purchasing consumable goods and raw materials
Transaction amount ¥225 million ¥45 million
Account recorded Accrued expenses Accrued expenses and notes and accounts
payable—trade
Balance at end of year ¥23 million ¥3 million
Notes: 1. Transaction amounts are shown net of consumption taxes, while balances at end of year include consumption taxes.
2. Transaction terms and the policy of deciding transaction terms: Ordinary transaction terms are applied to the purchase of products.

19. Per share information
Basic and diluted net assets per share and net income per share for the years ended March 31, 2017 and 2016, were as follows:
Yen U.S. dollars
2017 2016 2017

Basic net assets per share ¥824.36 ¥745.94 $7.35
Basic net income per share 82.34 65.69 0.73
(a) Basis for calculation of net assets per share

2017 2016 2017

Total net assets ¥1,168,115 ¥1,057,399 $10,411,935
Amount deducted from total net assets 16,771 15,498 149,487
of which, non-controlling interests (16,771) (15,498) (149,487)
Net assets allocated to capital stock ¥1,151,344 ¥1,041,901 $10,262,448
Number of shares of capital stock outstanding at fiscal year end used in calculation of
net assets per share (thousand) 1,396,657 1,396,755 1,396,657
(b) Basis for calculation of net income per share

2017 2016 2017

Net income attributable to owners of the parent ¥ 115,000 ¥ 91,754 $1,025,047
Amount not attributable to common stock shareholders — — —
Net income attributable to common stock owners of the parent ¥ 115,000 ¥ 91,754 $1,025,047
Weighted-average number of shares of capital stock (thousand) 1,396,715 1,396,812 1,396,715
Note: As the Company had no dilutive securities at March 31, 2017 and 2016, the Company does not disclose diluted net income per share for the years ended March 31, 2017 and 2016.

20. Borrowings
(a) Bonds payable at March 31, 2017 and 2016, comprised the following:
2017 2016 2017

Unsecured 1.46% yen bonds due in 2019 ¥20,000 ¥20,000 $178,269
Unsecured 0.30% yen bonds due in 2017 20,000 20,000 178,269
Total ¥40,000 ¥40,000 $356,538
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, 2017, are as follows:
Year ending March 31 Millions of yen Thousands of U.S. dollars
2018 ¥20,000 $178,269
2019 — —
2020 20,000 178,269
2021 — —
2022 — —
2023 and thereafter — —
Total ¥40,000 $356,538
(b) Loans payable at March 31, 2017 and 2016, comprised the following:
2017 2016 2017

Short-term loans payable with an interest rate of 0.90% ¥ 88,965 ¥273,418 $ 792,985
Current portion of long-term loans payable with an interest rate of 1.56% 24,510 40,169 218,469
Current portion of lease obligations with an interest rate of 1.44% 305 919 2,718
Long-term loans payable (except portion due within one year) with an interest rate of 1.06% 192,584 94,632 1,716,588
Lease obligations (except portion due within one year) with an interest rate of 1.48% 467 537 4,163
Commercial papers (portion due within one year) with an interest rate of (0.02)% 56,000 — 499,153
Total ¥362,832 ¥409,675 $3,234,085
Notes: 1. Interest rates shown are weighted average interest rates for the balance outstanding at March 31, 2017.
2. The aggregate annual maturities of long-term loans payable and lease obligations (except portion due within one year) after March 31, 2017, are as follows:
Long-term loans payable Lease obligations
Year ending March 31 Millions of yen Thousands of U.S. dollars Millions of yen Thousands of U.S. dollars
2018 ¥59,796 $532,989 ¥186 $1,658
2019 21,279 189,670 143 1,275
2020 22,900 204,118 112 998
2021 32,790 292,272 26 232
2022 and thereafter 55,819 497,540 — —
21. Others
Litigation
On June 18, 2010, Koninklijke Philips Electronics N.V. and Philips Electronics North America Corporation (hereinafter collectively “Philips”) sued our subsidiary,
ZOLL Medical Corporation (hereinafter “ZOLL”), 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 por-
tion. 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. On August 18, 2016, 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. The Company and ZOLL consider the allegations
of Philips to be baseless, and will vigorously contest this litigation.

Major Subsidiaries and Affiliates
(As of April 1, 2017)
Paid-in capital Equity

Company Major products/business line (million) interest (%)
Material Segment
Asahi Kasei Fibers Nobeoka Co., Ltd.* Processing of fibers ¥ 50 100.0
Asahi Kasei Leona Filament Co., Ltd.* Packaging, packing, and storage of fiber products ¥ 11 100.0
Asahi Cord Co., Ltd.* Processing of tire cord, etc. ¥ 50 100.0
Kyokujitsu Textile Mills Co., Ltd.* Woven fabrics ¥ 99 100.0
Asahiozu Corp. Processing of nonwovens ¥ 20 50.0
Kyuasa Co., Ltd.* Stockings and innerwear ¥ 90 94.0
Fuji Seisen Co., Ltd.* Dyeing and finishing of yarns and fabrics ¥ 50 78.7
Merci Co., Ltd.* Sale of linings and interlinings ¥ 10 100.0
Hangzhou Asahikasei Textiles Co., Ltd.* Warp-knit spandex textiles CNY 78 93.0
Hangzhou Asahikasei Spandex Co., Ltd.* Spandex CNY 154 100.0
Asahi Kasei Advance (Shanghai) Co., Ltd. Processing and sale of fibers and textiles CNY 11 100.0
Formosa Asahi Spandex Co., Ltd. Spandex NT$ 1,003 50.0
Thai Asahi Kasei Spandex Co., Ltd.* Spandex THB 1,350 60.0
Asahi Kasei Spunbond (Thailand) Co., Ltd.* Spunbond nonwovens THB 1,835 84.3
Asahi Kasei Spandex Europe GmbH* Spandex € 28.4 100.0
Asahi Kasei Mitsubishi Chemical Ethylene Corp. Basic petrochemicals ¥ 2,000 50.0
PS Japan Corp.* Polystyrene ¥ 5,000 62.1
Okayama Butadiene Co., Ltd. Butadiene ¥ 490 50.0
Tongsuh Petrochemical Corp., Ltd.* Acrylonitrile, sodium cyanide, acrylamide, EDTA KRW 237,642 100.0
PTT Asahi Chemical Co., Ltd. Acrylonitrile, methyl methacrylate THB 13,818 50.0
Asahikasei Color Tech Co., Ltd.* Plastic coloring & compounding ¥ 110 100.0
Asahi Kasei Technoplus Co., Ltd.* Processed plastic products ¥ 160 99.0
Wacker Asahikasei Silicone Co., Ltd. Silicone ¥ 1,050 50.0
Kakuichi Rubber Industry Co., Ltd. Manufacturing ¥ 10 50.0
Japan Elastomer Co., Ltd.* Synthetic rubber ¥ 1,000 75.0
Nobeoka Plastic Processing Co., Ltd.* Plastic compounding ¥ 10 100.0
Asahi Kasei Plastics (Guangzhou) Co., Ltd.* Sale of performance resin CNY 10 100.0
Asahikasei (Suzhou) Plastics Compound Co., Ltd. Coloring and compounding of performance resin CNY 50 51.0
Asahikasei Plastics (Shanghai) Co., Ltd.* Sale of performance resin CNY 18 100.0
Asahi Kasei POM (Zhangjiagang) Co., Ltd.* Polyacetal CNY 265 100.0
Asahikasei Plastics (Thailand) Co., Ltd.* Coloring and compounding of performance resin THB 140 100.0
Asahi Kasei Plastics Singapore Pte. Ltd.* Performance resin US$ 46.0 100.0
Asahi Kasei Synthetic Rubber Singapore Pte. Ltd.* Synthetic rubber US$ 160 100.0
Asahikasei Plastics (America) Inc.* Compounded performance resin operations US$ 32 100.0
Asahi Kasei Plastics North America, Inc.* Coloring and compounding of performance resin US$ 22 100.0
Asahi Kasei Plastics Mexico S.A. de C.V.* Sale of performance plastic compounds US$ 2 100.0
Asahi Kasei Epoxy Co., Ltd.* Epoxy resin ¥ 300 100.0
Asahi Kasei Finechem Co., Ltd.* Specialty chemicals ¥ 325 100.0
Asahi Kasei Metals Ltd.* Aluminum paste ¥ 250 100.0
Asahi Kasei EMS Co., Ltd.* Electronic materials and devices ¥ 10 100.0
Asahi SKB Co., Ltd.* Defense explosives ¥ 100 100.0
Asahi Chemitech Co., Ltd.* Resin anchors, detonator housings/leads ¥ 10 100.0
Asahi-Schwebel Co., Ltd.* Glass fabric ¥ 50 100.0
Kayaku Japan Co., Ltd. Industrial explosives ¥ 60 50.0
Asahi Kasei Performance Chemicals Corp.* High-performance HDI-based polyisocyanate CNY 285 100.0
Asahi Kasei Microza (Hangzhou) Co., Ltd.* Industrial filtration membranes and systems CNY 70 100.0
* Consolidated subsidiary

Asahi Kasei Electronics Materials (Changshu) Co., Ltd.* Photosensitive dry film CNY 305 100.0
Asahi Kasei Electronics Materials (Suzhou) Co., Ltd.* Photosensitive dry film CNY 181 100.0
Asahi Kasei Wah Lee Hi-Tech Corp.* Photosensitive dry film NT$ 49 80.6
Asahi-Schwebel (Taiwan) Co., Ltd.* Glass fabric NT$ 326 51.0
Asahi Photoproducts (UK) Ltd.* Sale of photopolymer, printing-plate making systems £ 0.3 100.0
Asahi Photoproducts (Europe) SA/NV* Sale of photopolymer, printing-plate making systems € 3 100.0
Asahi Kasei Pax Corp.* Packaging products and solutions ¥ 490 100.0
Asahi Kasei Home Products Corp.* Cling film, other household products ¥ 250 100.0
Sun Plastech Inc.* Sale of purging compound US$ 1.0 100.0
Sundic Inc. Biaxially oriented polystyrene sheet ¥ 1,500 50.0
Asahi Kasei E-materials Korea Inc.* Energy and electronic materials KRW 1,890 100.0
Celgard Korea, Ltd.* Lithium-ion battery separator KRW 25,920 100.0
Polypore International, LP* Battery separators US$ 2,233 100.0
Celgard, LLC* Lithium-ion battery separator US$ 22 100.0
Daramic, LLC* Lead-acid battery separator US$ 12 100.0
Daramic Battery Separator India Pvt. Ltd.* Lead-acid battery separator INR 0.3 100.0
Daramic S.A.S.* Lead-acid battery separator € 73 100.0
Daramic (Thailand) Ltd.* Lead-acid battery separator THB 2,317 100.0
Polypore (Shanghai) Membrane Products Co., Ltd.* Lithium-ion battery separator CNY 7 100.0
Daramic Tianjin PE Separator Co., Ltd.* Lead-acid battery separator CNY 149 100.0
Polypore K.K.* Lithium-ion and lead-acid battery separator ¥ 16 100.0
Daramic Separadores de Baterias Ltda.* Lead-acid battery separator BRL 0.3 100.0
Daramic Xiangyang Battery Separator Co., Ltd.* Lead-acid battery separator CNY 194 65.0
Asahi Kasei Electronics Co., Ltd.* Hall elements ¥ 50 100.0
Asahi Kasei Microsystems Co., Ltd.* LSIs ¥ 50 100.0
Asahi Kasei Microdevices Korea Corp. Electronic devices marketing and technical support KRW 820 100.0
AKM Semiconductor, Inc.* Sale of LSIs US$ 2.9 100.0
Homes Segment
Asahi Kasei Jyuko Co., Ltd.* Steel frames ¥ 2,820 100.0
Asahi Kasei Home Construction Corp.* Construction of homes ¥ 100 100.0
Asahi Kasei Chintai Support Corp.* Rental home agency ¥ 50 100.0
Asahi Kasei Fudousan Community Corp.* Condominium management ¥ 200 100.0
Asahi Kasei Realty & Residence Corp.* Real estate development, brokerage, and related business ¥ 3,200 100.0
Asahi Kasei Reform Co., Ltd.* Home maintenance and remodeling ¥ 250 100.0
Asahi Kasei Mortgage Corp.* Financial services ¥ 1,000 100.0
Asahi Kasei Lifeline Corp.* Plumbing and wiring work ¥ 100 100.0
Asahi Kasei Sekkei Corp.* Building design and supervision ¥ 30 100.0
AJEX Corp.* External work ¥ 100.0 100.0
Asahi Kasei Jyuko Vietnam Corp.* Steel-frame members US$ 13.9 80.0
Asahi Kasei Foundation Systems Corp.* Installation of piles ¥ 200 100.0
Asahi Kasei Extech Corp.* Exterior wall panel installation ¥ 50 100.0
Iwakuni Sun Products Co., Ltd.* Construction materials processing ¥ 30 100.0
Sakai Kako Co., Ltd.* Construction materials processing ¥ 10 100.0
Hozumi Kako Co., Ltd.* Construction materials processing ¥ 10.0 100.0

Major Subsidiaries and Affiliates

Health Care Segment
Asahi Kasei Medical MT Corp.* Medical devices, bioprocess products ¥ 10 100.0
Med-Tech Inc.* Medical devices ¥ 140 100.0
Asahi Kasei Medical (Hangzhou) Co., Ltd.* Hemodialyzers; sale of medical devices CNY 165 100.0
GLT Medical Co., Ltd. Medical devices CNY 24.7 81.0
Asahi Kasei Medical Trading (Korea) Co., Ltd.* Sale of medical devices, medical systems KRW 1,000 100.0
Asahi Kasei Medical America Inc.* Sale of medical devices, medical systems US$ 0.5 100.0
Asahi Kasei Bioprocess America, Inc.* Bioprocess equipment and systems US$ 30 100.0
Asahi Kasei Medical Europe GmbH* Sale of medical devices, medical systems € 18 100.0
Asahi Kasei Bioprocess Europe SA/NV* Sale of virus removal filters € 0.5 100.0
Asahi Kasei Pharma America Corp.* Clinical trials for new drugs US$ 49 100.0
ZOLL Medical Corporation* Acute critical care devices and systems US$ 1,723 100.0
ZOLL LifeVest Holdings LLC* Holding company for wearable defibrillator business US$ 10 100.0
ZOLL Data Systems, Inc.* IT solutions for acute critical care US$ 1 100.0
ZOLL Circulation, Inc.* Intravascular temperature management systems US$ 23 100.0
Others
Asahi Kasei Advance Corp.* Sale of Asahi Kasei products ¥ 500 100.0
Asahi Kasei Amidas Co., Ltd.* Employment agency, consulting ¥ 80 100.0
Asahi Kasei NS Energy Corp.* Electricity and steam ¥ 10 61.0
Asahi Kasei Engineering Corp.* Plant, equipment, process engineering ¥ 400 100.0
Asahi Kasei Office One Co., Ltd.* Real estate rental ¥ 160 100.0
Asahi Kasei New Port Terminal Co., Ltd.* Receiving and storage of fuel and feedstocks ¥ 100 100.0
Asahi Kasei Networks Corp. IT-related business ¥ 400 100.0
Asahi Kasei Benefits Management Corp.* Company housing, recreational facilities ¥ 20 100.0
Asahi Kasei AS Tech Co., Ltd. Processing of polyethylene pipe ¥ 10 100.0
Asahi Kasei EIC Solutions Corp. Electrical, IT, and control engineering ¥ 100 100.0
Asahi Yukizai Corp. Synthetic resin, fabricated plastic products ¥ 5,000 29.5
Asahi Kasei Ability Corp. Printing, bookbinding, and office work ¥ 40 100.0
New Asahi Services Co., Ltd.* Insurance agency, cellular phone sales, bowling alley ¥ 30 100.0
Asahi Research Center Co., Ltd.* Information and analysis ¥ 1,000 100.0
Cable Media Waiwai Co., Ltd.* Cable TV ¥ 414 50.0
ELORTO Corp. Travel agency ¥ 30 34.0
AJS Inc. Computer software, IT systems ¥ 800 49.0
Koyo Machinery Works Co., Ltd.* Machinery installation ¥ 100 100.0
Asahi Kasei (China) Co., Ltd.* Investment and business support services CNY 2,214 100.0
Asahi Kasei Advance (Thailand) Co., Ltd.* Processed yarn THB 134 100.0
Asahi Kasei India Pvt. Ltd. Business support services Rs 45 100.0
Crystal IS, Inc.* Development of aluminum nitride substrates and UV LEDs US$ 40 100.0
Asahi Kasei America, Inc.* Business support services US$ 0.1 100.0
Asahi Kasei Europe GmbH* Business support services, sale of performance resin € 1 100.0

Company Information/Investors Information
(as of March 31, 2017)
■ Corporate Profile Asahi Kasei IR Website

Company Name Asahi Kasei Corporation
Date of Establishment May 21, 1931 Asahi Kasei’s financial results and other materials
Paid-in Capital ¥103,389 million for investors are available in our IR website.
Employees 33,720 (consolidated) http://www.asahi-kasei.co.jp/asahi/en/ir
7,356 (non-consolidated)
■ Asahi Kasei Group Offices

Asahi Kasei Corporation Core Operating Companies
Tokyo Head Office Asahi Kasei Microdevices
1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan 1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan
Phone: +81-3-3296-3000 Fax: +81-3-3296-3161 Phone: +81-3-3296-3911
Asahi Kasei (China) Co., Ltd. Asahi Kasei Homes
8/F, One ICC, Shanghai International Commerce Centre 1-24-1 Nishi-shinjuku, Shinjuku-ku, Tokyo 160-8345 Japan
No. 999 Huai Hai Zhong Road, Shanghai 200031 China Phone: +81-3-3344-7111
Phone: +86-21-6391-6111 Fax: +86-21-6391-6686
Asahi Kasei Construction Materials
Beijing Office 1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan
Room 1407 New China Insurance Tower Phone: +81-3-3296-3500
No. 12 Jian Guo Men Wai Avenue
Asahi Kasei Pharma
Chao Yang District, Beijing 100022 China
1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan
Phone: +86-10-6569-3939 Fax: +86-10-6569-3938
Phone: +81-3-3296-3600
Asahi Kasei America, Inc.
Asahi Kasei Medical
800 Third Avenue, 30th Floor, New York, NY 10022 USA
1-105 Kanda Jinbocho, Chiyoda-ku, Tokyo 101-8101 Japan
Phone: +1-212-371-9900 Fax: +1-212-371-9050
Phone: +81-3-3296-3750
Asahi Kasei Europe GmbH
Am Seestern 4, 40547 Düsseldorf, Germany
269 Mill Rd., Chelmsford, MA 01824-4105 USA
Phone: +49-211-8822-030 Fax: +49-211-8822-0333
Phone: +1-978-421-9655
Asahi Kasei India Pvt. Ltd.
The Capital 801C, Plot No. C70, G Block,
Bandra Kurla Complex, Bandra (East), Mumbai 400051 India
Phone: +91-22-6710-3962
■ Investors Information
Stock Listing Tokyo Largest Shareholders % of equity*
Stock Code 3407
JP Morgan Chase Bank 380055 6.28
Authorized Shares 4,000,000,000
The Master Trust Bank of Japan, Ltd. (trust account) 5.19
Outstanding Shares 1,402,616,332
Transfer Agent Sumitomo Mitsui Trust Bank, Ltd. Nippon Life Insurance Co. 4.68
Independent Auditors PricewaterhouseCoopers Aarata LLC Japan Trustee Services Bank, Ltd. (trust account) 3.68
Number of Shareholders 76,784 Sumitomo Mitsui Banking Corp. 2.52
Asahi Kasei Group Employee Stockholding Assn. 2.44
Japan Trustee Services Bank, Ltd. (trust account 9) 2.03
Japan Trustee Services Bank, Ltd. (trust account 5) 1.71
Mizuho Bank, Ltd. 1.45
Tokio Marine & Nichido Fire Insurance Co., Ltd. 1.43
* Percentage of equity ownership after exclusion of treasury stock.

1-105 Kanda Jinbocho, Chiyoda-ku,
Tokyo 101-8101 Japan Corporate Communications
www.asahi-kasei.co.jp/asahi/en Tel: +81-3-3296-3008, Fax: +81-3-3296-3162 Printed in Japan
2017.12

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Asahi Kasei Report 2017

Group Mission We, the Asahi Kasei Group,

Group Providing new value to society by enabling “living in health and

Sincerity—Being sincere with everyone.

Editorial policy Organizational scope

Asahi Kasei Report 2017 1

We, the Asahi Kasei Group, contribute to life and living

2 Asahi Kasei Report 2017

Performance in fiscal 2016 exceeding our original forecast

4 Asahi Kasei Report 2017

FY2018 Target FY2025 Outlook

¥159.2 billion ¥165.0 billion

* Formulated assuming exchange rates of ¥110/$ and ¥120/€

Asahi Kasei Report 2017 5

Long-term investment expenditures

6 Asahi Kasei Report 2017

● Expanded supply capacity of lithium-ion battery (LIB) separator

● Reinforced business configuration (the US and Vietnam)

● Expanded capacity for nonwoven fabric for facial masks

Asahi Kasei Report 2017 7

8 Asahi Kasei Report 2017

● Start of photopolymers plant (China)

● Capacity expansion of S-SBR for fuel-efficient tires (Singapore)

● Capacity expansion of spunbond nonwovens for diaper applications (Thailand)

● Sale of condominiums (Taiwan)

Asahi Kasei Report 2017 9

● Advancing clinical testing of RecomodulinTM anticoagulant

● Business expansion for LifeVestTM wearable defibrillator

● Reinforcing the separator business

● Operation of second plant for plastic compounds

● Advancing the alkaline water electrolysis development project

● Start of Asahi Kasei Europe GmbH

Building the base for sustainable growth

(1) Obtaining thorough compliance

Top down Enacting compliance policy; thorough identification

Bottom up Inspection for risks;

10 Asahi Kasei Report 2017

(3) Linkage between management strategy and HR strategy

Diverse human resources

Vitality and growth of personnel and organizations

Unity and linkage between management strategy

Asahi Kasei Report 2017 11

Drivable concept car AKXYTM

Creating the future of automobiles together with customers

To be a material concierge that

It was very ambitious of Asahi Kasei, a material manufacturer, to create

12 Asahi Kasei Report 2017

Asahi Kasei Report 2017 13

Executing strategies aimed

Q What is your basic financial strategy?

Primary financial metrics

Dividends per share ¥14 ¥17 ¥19 ¥20 ¥24

14 Asahi Kasei Report 2017

2018, we are currently studying investments for non-linear 30 50

growth measures including M&A to proactively expand

our strategic investments.

Asahi Kasei Report 2017 15

From 1922 From 1950 In 1972 we entered the homes business

The first Hebel Haus™ (Kamata model home park)

2. President & Representative Director

3) Establishment of Risk Management & Compliance Administrative departments