Kaneka Group Responsible Care Report

Transcription

1 Group Responsible Care Report April 1, 26 March 31, 27

2 Group Responsible Care Report 27 CONTENTS Message 2 Group Outline 3 Basic Policies & Management System Corporate Philosophy and Basic Policies for Responsible Care Promotion and Management of Responsible Care Focused Targets, Outcome and Evaluation of Our Responsible Care Environmental Protection Efforts Material Balance in Production Activities Reduction in Discharge of Chemical Substances Prevention of Air and Water Pollution Promotion of Anti-Global Warming and Energy-Saving Measures Promotion of Waste Reduction and Recycling Environmental Accounting Environmental Efficiency Indexes Efforts for Society Providing Safe Products and Information Environmentally-Conscious, Safety-Conscious and Health-Conscious Products and Technologies Symbiotic Relationship with the Community and Society Process Safety & Disaster Prevention and Occupational Safety & Health Nurturing and Utilizing Human Resources and Creating Comfortable Work Environments Efforts in Respect for Human Rights Initiatives of Group Companies 31 Scope of the Report 33 Third Party Verification (Responsible Care Verification) 34 What is Responsible Care? Responsible care is a set of voluntary activities based on the principles of autonomous decision-making and individual responsibility. Companies engaged in the chemical industry make public commitments as part of their management principles to preserve the environment and to ensure health and safety in all stages of the lifecycles of chemical substances, i.e. development, production, manufacturing, usage, final consumption and disposal. These companies must implement measures and make improvements in areas related to safety, health and the environment. The chemical industries in 52 countries around the world are working on Responsible Care activities. In Japan, the Japan Responsible Care Council (JRCC) was established in 1995 and has been an active participant in JRCC since its inception. Responsible Care R Target Areas We report all the items listed in Responsible Care (Environmental protection, Process safety & disaster prevention, Occupational health and safety, Distribution safety, Chemical & product safety, Dialogue with the community). We also report on our efforts on behalf of society in the sections on Efforts in respect for human rights and Nurturing and utilizing human resources and creating comfortable work environments. Target Period We report our efforts and data for our fiscal 26, which is from April 1, 26 to March 31, 27 (some data is also included from the 26 calendar year). We also cover some fiscal 27 activities as well. Target Organizations (See page 33) Third Party Verification (See page 34) This report covers the Responsible Care initiatives of and all 36 Group companies that engage in production activities. Hereinafter, Corporation is referred to as, domestic production companies in the Group as domestic group companies, and overseas production companies as overseas group companies. In June 27, third party Responsible Care verification was obtained from the Responsible Care Verification Center, which performed an objective evaluation on the contents of this report. The copy of that third party verification is available at the end of this report. Reference Guidelines Past Publications and Future Publishing Plan The Environmental Reporting Guidelines (fiscal 23 version) issued by the Ministry of Environment and the Sustainability Reporting Guidelines 26 issued by GRI were referred to in the preparation of this report. published its first Responsible Care Report in 1999 and has since published the report annually. Responsible Care information is also available on our homepage. The next Responsible Care Report is scheduled to be published in June 28. 1

3 Message Performance Polymers, Electronics and Life Science are the three business fields that is focusing its management resources on. Along with our cost reduction efforts and fair-pricing adjustments, they have been driving s profitability by creating new businesses and fueling expansion overseas. However, the Life Science business, one of our pillars of profit, was greatly affected in fiscal 26 by sudden changes in the business environment and impacted our financial results. I believe we will soon be able to overcome this difficulty through people s diligent efforts in reconstructing strategies and reorganizing the workforce in each business segment. Accidents and unethical incidents that jeopardized the environment and safety both in and outside of Japan last year were as frequent as the previous year. Our record of labor and process accidents in fiscal 26 was also not at all satisfactory, something that has concerned our stakeholders. Consequently, I directed not only that serious hazards be thoroughly identified but that comprehensive risk management also be established throughout the Group, with product safety (quality assurance) and environmental issues investigated along with occupational and process hazards. Our Compliance Committee and our Central Committee on Environment, Safety & Human Health were both instructed accordingly. Meanwhile, our efforts since fiscal 25 to acquire Occupational Safety and Health Management System (OSHMS) certification at each of our four plants during fiscal 27 have continued. On the environmental side, global warming has been a hot topic in recent years. Just this year, IPCC, the Intergovernmental Panel on Climate Change, publicized a projection of the greenhouse gas influence on the global climate in the future. In the Japanese chemical industry, applicable technologies for energy conservation and their efficiencies have mostly been identified. Thus, I believe the sector approach, which requires the respective efforts of each industrial field, could generally be applied in Japan. In this regard, the Group will keep step with the objective of the chemical industry as a whole under the guidance of the Japan Chemical Industry Association (JCIA). The Group has made earnest efforts towards Responsible Care and we have pursued upgrading of the PDCA cycle over many years. In the last fiscal year, all four plants achieved zero waste emissions, and we are confident of sustaining this in the future. While respecting each plant s independent effort in realizing zero emissions, we will further strive to systematically minimize the generation of industrial waste by paying more attention to the research and development stage of all our products. Concerning the Environmental Impact Point (EIP) based on the Japan Environmental Policy Index (JEPIX) that we introduced last year, I regard the 71% reduction from the fiscal 21 baseline as an achievement of the comprehensive environmental policy and actions carried out in the whole of the Group, such as complete elimination of ozone-depletion substances and a steady reduction in hazardous air pollutants. Furthermore, we have decided to implement environmental management systems in all domestic group companies by the end of fiscal 28. Especially for relatively small companies, we have created and initiated a plan to encourage them to acquire certification under Eco-Action 21, a program promoted specifically for such small-sized companies. This report is an overview of the Responsible Care activities of the Group for the past year. It would be my utmost pleasure if this report helps you understand even a little bit more about our efforts, and your frank opinions on either this report or on our activities will be highly valued and most appreciated. June 27 Beginning with this year s report, both energy consumption and CO2 emission per unit of production are totaled by converting the weight of each product to that of the standard. The results demonstrate that our past record has been, for the most part, parallel to the JCIA average. We will further augment our endeavor to realize a sustainable society by focusing the abilities of the entire Group on promoting harmony between the environment and the economy. Masami Onishi President, Corporation 2

4 Group Outline Corporate Profile Name Head Office KANEKA CORPORATION Osaka Head Office 3-2-4, Nakanoshima, Kita-ku, Osaka , Japan Phone: Facsimile: Net Sales Corporation Consolidated (Unit: million yen) 5, 464,31 473,17 438, 4, 372,269 4,256 3, 282, , , , ,337 2, 1, Date of Establishment Paid-in Capital Domestic Facilities Research Institutes Tokyo Head Office , Akasaka, Minato-ku, Tokyo , Japan Phone: Facsimile: September 1, ,46 million yen (as of March 31, 27) Sales Office: Nagoya Plants: Takasago (Hyogo Prefecture) Osaka (Osaka Prefecture) Shiga (Shiga Prefecture) Kashima (Ibaraki Prefecture) Life Science Research Laboratories Frontier Materials Development Laboratories Foam Plastics Technology Research Laboratories Foods Research Laboratories Process Technology Laboratories (FY) Net Income Corporation Consolidated (Unit: million yen) 3, 28,99 25, 24,745 24,482 21,853 2, 18,363 15,622 15, 13,373 13,94 13,36 1, 9,898 5, (FY) Number of Employees Corporation Consolidated 1, 8, 7,36 7,43 6,72 6,597 6,649 6, Overseas Facilities U.S.A., Belgium, Singapore, Malaysia, Australia, China, and others 4, 2, 3,5 2,943 3,31 3,134 3,24 Group 73 subsidiaries (37 domestic and 15 overseas consolidated subsidiaries) Consolidated Sales by Business Segment (FY26) (FY) Synthetic Fibers and Others 5.3% Electronic Products 1.9% Life Science Products 8.5% Foodstuffs Products 23.4% Net Sales billion yen Chemicals 19.7% Functional Plastics 17.1% Expandable Plastics and Products 15.1% Consolidated Sales by Area (FY26) Others 6% Europe 29% Overseas Sales billion yen Asia 4% North America 25% 3

5 Chemicals PVC resins PVC compounds (flexible applications and rigid applications) Caustic soda, Chlorinated products Specialty PVC resins Functional Plastics MBS resins Modified silicone polymers Weather-resistant acrylic film Business Overview The business of the Group is the manufacture and sales of a broad range of items, including chemicals, functional plastics, expandable plastic products, foodstuffs products, medical supplies and equipment, electronic materials and synthetic fibers. We provide highly specialized products in the diverse fields of clothing, food, housing and medicine. will continue to emphasize the investment of management resources in performance polymers, electronics, and life sciences, the important strategic fields in which we can exercise our technological expertise. We will also focus on research and development in domains that are important for future growth as we seek to build a solid enterprise constitution that has high earning capabilities. Expandable Plastics and Products Foodstuffs Products Life Science Products Extruded polystyrene foam boards Expandable polystyrene Polyolefin foam by beads method Polystyrene foam sheets PVC sash windows Margarine and shortening Quality fats for confectionery Bakery yeast Spices Pharmaceutical bulk Pharmaceutical intermediates Functional foodstuffs Medical devices Electronic Products Ultra heat-resistant polyimide film Optical films Bonded magnetic materials Magnet wires Solar cells Synthetic Fibers and Others Modacrylic fibers Protein fibers 4

6 Basic Policies & Management System Corporate Philosophy and Basic Policies for Responsible Care Corporate Philosophy Using innovative technologies, we strive to create a broad spectrum of life-enhancing products and services that work in harmony with people, society and environment. Basic Policies for Corporate Activities 1. We contribute to society and social needs and pursue the growth of our company simultaneously, through the development and supply of products and services useful and valuable for industries and the public. 2. We conduct our activities in accordance with all applicable laws and governmental regulations and also with applicable social and ethical standards. 3. We communicate properly and as appropriate with our investors and with the public. 4. We strive to produce safe products, and to anticipate, meet and comply with all applicable environmental standards. 5. We deal fairly in business and trade, and embrace the precepts of free and fair competition. 6. We strive to maintain a safe and motivated workplace, respect individuals of all origins and respect the rights of employees. 7. We take appropriate measures against unlawful and unethical conduct. We have established an Ethical Code of Conduct based on our Basic Policies for Corporate Activities. This code provides fundamental guidelines that every employee should adhere to in the execution of their duties. Basic Policies for Responsible Care Our corporate philosophy is Using innovative technologies, we strive to create a broad spectrum of life-enhancing products and services that work in harmony with people, society and environment. Based on this philosophy, we are contributing and will contribute for the sustainable development of society and the realization of an affluent society. As a member of society, we note the influence of corporate activities upon the global environment and people s living environment. In the entire product lifecycle, starting with product development, the purchase of raw materials, manufacturing, distribution, utilization, consumption, and up to disposal, we strive to protect the environment through resource conservation and reduction of environmental impact and to ensure process safety and disaster prevention, occupational safety and health, product safety and reduction of waste materials. Specifically, there are six policies for corporate activities as follows. 1. Protect the Natural Ecosystem and Reduce Environmental Impact Focusing on the impact of corporate activities on the global environment and the ecosystem, we endeavor to reduce environmental impact and promote resource conservation and energy saving throughout the lifecycle of products. 4. Reduce Waste and Promote the Recycling of Plastics We reduce waste associated with manufacturing and its processes. We actively develop technologies for the adequate disposal or recycling of plastic waste concerning our products in cooperation with relevant industries, and endeavor to dispose of and recycle waste in a proper manner. 2. Offer Safe Products and Information We endeavor to offer products that are safe to distribute and use, and provide adequate information on the products such as instructions on how to use and handle products correctly. 3. Develop Products and Technologies in Consideration of the Environment and Safety Upon the development of new products, we give consideration to the environment and safety throughout the lifecycle of the products to the greatest extent possible, and endeavor to develop products and technologies with low environmental impact. 5. Enhance Process Safety, Disaster-prevention and Occupational Safety and Health Safety and disaster prevention constitute the foundations of the local community s trust, and occupational health and safety are issues that need to be fulfilled by chemical companies. We persistently strive to make improvements in these areas. 6. Win Public Confidence From the management to every employee, all our members shall act in compliance with laws, regulations, standards, etc. relating to environment and safety both at home and abroad. Our approach to Responsible Care as such shall be publicized accurately to the public, in hope of rightfully gaining public recognition and confidence. 5

7 Promotion and Management of Responsible Care We have various company rules at including Environment Safety and Health Management Rules, Product Safety Management Rules, Quality Assurance Rules, Distribution Management Rules, and Equipment Management Rules. We prepare policies, systems, plans, auditing and inspection regimes, evaluations, education and training, emergency response procedures and other measures in keeping with these rules in order to advance s RC activities. Additionally, we are incorporating management systems, including ISO141 for environmental protection, ISO91 for product quality, and a Japan Industrial Safety & Health Association (JISHA) system for occupational safety and health. Basic Policies & Management System Promotional Organizations has been a member of the Japan Responsible Care Council since it was established by the Japan Chemical Industry Association in We have established the RC promotion structure shown below to fulfill our duties related to the six facets of Responsible Care, which are Environmental Protection, Process Safety and Disaster Prevention, Occupational Safety and Health, Chemicals and Product Safety, Distribution Safety, and Dialogue with Society. President Central Committee on Environment, Safety & Human Health Earth Environment Committee Compliance Committee Production Technology Division Quality Assurance Department Environmental Protection & Safety Department Quality Assurance Promoters Conference Responsible Care Promoters Conference Environment, Health & Safety Leaders Conference Environmental Protection Efforts Takasago Plant Environment, Safety and Health Group Osaka Plant Environment, Safety and Health Team Shiga Plant Environment, Safety and Health Team Kashima Plant Environment, Safety and Quality Assurance Group The Central Committee on Environment, Safety & Human Health and the Earth Environment Committee, organizations under the direct control of the president, determine policies and measures related to Responsible Care (RC) and manage their progress. The Compliance Committee deliberates and decides compliance action plans for the entire company, and uses inspections to verify that our RC activities sustain and enhance our observance of laws and regulations and our level of ethics. Furthermore, the Environmental Protection & Safety Department and the Quality Assurance Department lead the coordinated implementation of work related to RC in order to appropriately manage risks related to environmental safety, chemical and product safety, quality assurance and other issues for the entire Group. The Environmental Protection & Safety Department also holds a Responsible Care Promoters Conference comprised of people in charge of RC in each part of the company in order to promote the unified advancement of RC implementation throughout. The Environment, Health & Safety Leaders Conference focuses on activities at s four production bases, and discusses and shares information about important issues. The Quality Assurance Promoters Conference, comprised of leaders from business divisions and plants, discusses important issues related to quality assurance for the entire company and shares the most recent information about topics such as domestic and foreign laws and regulations. Furthermore, in order to thoroughly realize policies and measures at domestic group companies, we began the Conference for Heads of Environment, Health & Safety Departments of Affiliated Companies in fiscal 26. The Quality Assurance Department leads the promotion of activities for Chemicals and Product Safety under RC, as well as for overall quality assurance. Central Committee on Environment, Safety & Human Health Efforts for Society Initiatives of Group Companies 6

8 Basic Policies & Management System Audits and Inspection executes a variety of internal audits in implementing the PDCA cycle, such as those audits carried out by the heads of each plant related to safety, audits related to Responsible Care, and audits based on ISO141, ISO91, OSHMS and other standards. At group companies, top leaders are also conducting internal safety auditing, and those companies that have acquired certifications for specific standards conduct internal auditing based on those standards. In order to make our inspections more comprehensive ( Comprehensive Inspection ), we have added product safety (quality assurance) and compliance items to the environmental protection and occupational safety categories in the safety inspections conducted by the Chair of the Central Committee on Environment, Safety & Human Health. Comprehensive inspections are conducted on the status of efforts and their results at four plants and at group companies. In fiscal 26, we conducted inspections with an emphasis on Seiri, Seiton and Seiso, the 3S fundamentals for safety (loosely translatable as tidying-up, organizing and cleaning ), and risk assessment (RA) promotion at our 4 plants, 8 overseas group companies, 17 domestic group companies and their 19 plants. As a result of these inspections, we confirmed that our group companies as a whole had achieved remarkable improvements in 3S. We further recognized numerous risks that were identified and assessed at all plants and most group companies. In the future, our tasks include focusing on serious risks, concentrating on thorough risk identification and comprehensive risk assessment, and developing specific risk reduction measures. In addition to comprehensive inspections, we implemented inspections focused on specific items and special inspections when serious problems have occurred at one plant and five domestic and overseas group companies. With the implementation of our current comprehensive inspections, as safety activities have become more thorough, latent problems have also become more difficult to identify. For this reason, before we conduct each comprehensive inspection, we decided to clarify the important issues of the workplace that is to be inspected by implementing preliminary inspections under the leadership of the administrative office in order to investigate and classify problem points and conditions. Comprehensive inspection at the Kashima Plant Comprehensive inspection at Singapore Co., (Pte) Ltd. Comprehensive inspection at Tochigi Corporation Comprehensive inspection at the Takasago Plant RC Education At, we implement education about RC for all employees at each workplace and in every rank and position. The Conference for Heads of Environment, Health & Safety Departments of Affiliated Companies is primarily held for discussion among the promoters of environmental protection and safety at group companies (see page 6). It also serves as a valuable opportunity for education towards our RC efforts. RC Education at Corporation Education Opportunities Introduction course for new recruits Training for employees in their third year of employment Education for rotated employees Education for general employees Environmental protection & safety basic course for newly promoted supervisors Training for assistant managers and supervisors Environment and safety management training for newly promoted managers Education for internal ISO auditors Training to enhance the skills of internal auditors Provided by The Environmental Protection & Safety Department at four plants The Environmental Protection & Safety Department at four plants Each receiving department Each department The Environmental Protection & Safety Department The Environmental Protection & Safety Department The Environmental Protection & Safety Department at four plants The Environmental Protection & Safety Department Four plants Quality Assurance Department Environment and safety management training 7

9 Focused Targets, Outcome and Evaluation of Our Responsible Care Item Reduce Discharge of Chemical Substances Reduce Industrial Waste Prevention of Global Warming Process Safety and Disaster Prevention Occupational Safety and Health Distribution Safety Chemical Substance and Product Safety (Quality Assurance) Communication with Society Audit by Management Targets for FY26 Reduce discharge of chemical substances subject to the PRTR Law by 82% from FY23 to 24 tons. Reduce VOC discharge 35% from FY2 baseline level to 3,55 tons. FY26 Reduce the final landfill disposal amount 97% compared to FY1996 to 386 tons. In addition, achieve zero waste emissions* at every plant by the end of FY26. * Defined as reducing the final landfill disposal rate to less than.5% of the total waste emissions amount. Confirm the observance of laws and regulations using our newly implemented Waste Information Management System. Keep the CO2 emissions per unit of sales at the same level as FY199. Improve energy use per unit of production by 1% compared to the previous fiscal year. Further promote modal shift to improve on the results of the previous year. Plan and conduct comprehensive disaster prevention drills at all plants. Strengthen the safety activities of group companies and cooperating companies (experiential education, basic behavior manuals, internal auditing). Start operation of OSHMS. Implement education about mental health for the executive staff of group companies. Prepare and implement a support program for people who have taken time off for mental health reasons to help them return to the workplace. Revise employment standards for people who might be susceptible to cerebral or cardiovascular disease. Continue to revise Yellow Cards and Container Yellow Cards, and fully enforce carrying a Yellow Card. Continue emergency response training for transportation. Establish risk management in group companies and reduce quality-related risks. Respond appropriately to domestic and overseas regulations for chemical substance management. In coordination with related divisions, implement risk assessment for new businesses and new products (Product Safety Examination Committee and preliminary examinations at the development stage). Issue an RC report that emphasizes the degree of environmental improvement and efforts for society and post it on the web site. Issue site reports at each plant. Report on the status of our community dialogue efforts, performance data and related information. Continue to implement audits and inspections at s 4 plants, 17 domestic group companies and 7 overseas group companies. Outcome in FY26 Reduced discharge of chemical substances subject to the PRTR Law by 87% from FY23 to 152 tons. Reduced VOC discharge 39% from FY2 baseline level to 3,312 tons. Reduced the final landfill disposal amount 98% compared to FY1996 to 282 tons and achieved zero waste emissions. Prevented the occurrence of any violations of laws or regulations using the Waste Information Management System. The CO2 emissions per unit of sales index was 14, failing to achieve the goal by 3%. Energy use per unit of production was 1.3% worse than the previous year. Modal shift increased 12% over the previous fiscal year to 2,993 tons, reducing CO2 emissions by 258 tons. Conducted comprehensive disaster prevention drills in all plants in line with the plan. Implemented auditing by plant heads at cooperating companies. Conducted experiential education activities, created basic behavior manuals, held deliberations at the Conference for Heads of EH&S Departments of Affiliated Companies and made other efforts to strengthen occupational safety and health at affiliated companies. Started application of OSHMS at all plants. Implemented mental health example study for executive staff, including executives from group companies. Operated a program that considered the individual conditions of people with mental health issues to support their return to the workplace. Created new employment standards for people who might be susceptible to cerebral or cardiovascular disease. Issued one new Yellow Card, and conducted checks together with transport companies on drivers to enforce Yellow Card carrying. Conducted emergency drills at the time of transportation, including transport companies and emergency dispatching call out drills in the local regions. Guided risk assessments at group companies, identified risks at each company, and implemented measures to reduce them. Created REACH action plan. Started to prepare revised MSDS according to the Revised Industrial Safety and Health Law (compliant with GHS). Held the Product Safety Examination Committee twelve times, including preliminary examinations in the medical appliances and food product fields where assurance of product safety is important. Evaluated the degree of environment improvement using JEPIX, issued an RC report that included numerical data on our efforts for society and other improvements, and published it on the web site. Issued site reports at each plant. Takasago Plant (Hyogo district) and Kashima Plant (Kashima district) presented at community dialogue events. Implemented inspections at s 4 plants, 17 domestic group companies (19 plants) and 8 overseas group companies. Evaluation FY27 Targets for FY27 Work on the voluntary plan to reduce VOC discharge below. Reduce VOC discharge amount to 3,297 tons. Reduce the final landfill disposal amount 98.8% compared to FY1996 to 141 tons. Sustain the observance of laws and regulations using the Waste Information Management System. Keep the CO2 emissions per unit of sales at the same level as FY199. Improve the energy use per unit of production by 1% compared to the previous year. Promote further expansion of modal shift and achieve improved results compared to the previous year. Plan and conduct comprehensive disaster prevention drills at all plants. Implement regular internal auditing at the management level by group companies. In addition to the Conference for Heads of EH&S Departments of Affiliated Companies, implement a committee for manufacturing leaders and cultivate their ability to increase safety in the workplace. Acquire OSHMS certification at all plants in FY27. Place clinical psychologists and take other measures to increase abilities to respond to mental health issues. Continue to revise Yellow Cards and Container Yellow Cards, and fully enforce carrying a Yellow Card. Continue emergency response training for transportation. Reduce risks to quality by also implementing validation for generalpurpose products. Continuously work to meet the requirements of chemical substance management regulations (principal items comply with REACH and GHS). Strengthen risk assessment related to new businesses and new product development. Issue an RC report that includes the six Responsible Care items and the topics, Efforts in respect for human rights and Nurturing and utilizing human resources and creating comfortable work environments, and publish it on the web site. Issue site reports at each plant. Participate actively in community dialogue. Continue to implement audits and inspections ( s 4 plants, 13 domestic group companies, 2 overseas group companies (3 plants)). Long-term target Reduce FY28 VOC discharge by 37% from FY2 to 3,47 tons, and FY21 VOC discharge by 48% to 2,829 tons. Reduce the final landfill disposal rate by the end of FY28 to less than.2% of waste emissions. Continue risk reduction activities through application of the Waste Information Management System, local inspections, and evaluations of waste disposal businesses. Improve CO2 emissions per unit of sales by 1% in FY21 versus FY199. Continue to improve the energy use per unit of production by 1% compared to the previous fiscal year. Continue to promote modal shift. Plan and conduct comprehensive disaster prevention drills at all plants. Continue to strengthen the safety activities of group companies and cooperating companies. Implement OSHMS and continuously improve occupational safety and health. Continuously improve the level of employee mental health. Continue to revise Yellow Cards and Container Yellow Cards, and fully enforce carrying a Yellow Card. Continue emergency response training for transportation. Reduce risks to quality by establishing risk management in every part of the Group. Implement thorough management of chemical substances (compliance with new regulations). Strengthen the functions of the Product Safety Examination Committee by enhancing the advisory board and implementing multifaceted examinations. Enhance content about, Efforts for society and Environmental protection efforts in the RC report. Continue to publish the RC report on the web site. Continue to issue site reports at each plant. Participate actively in community dialogue. Continue to implement audits and inspections. Listed page Initiatives of Group Companies Efforts for Society Environmental Protection Efforts Basic Policies & Management System Evaluation: Significantly surpassed targets Achieved/almost achieved targets Underperformed targets Significantly underperformed targets 8

10 Environmental Protection Efforts Material Balance in Production Activities Input of Energy and Resources Main Raw Materials* Discharge, Recycling and Productization of Various Substances Products* Takasago Plant 1,283, tons/year Overseas group companies 228, tons/year * Includes only those raw materials that can be calculated in or converted to tons Osaka Plant Shiga Plant Kashima Plant To the Atmosphere CO2 1,154, tons-co2/year Domestic group companies 149, tons-co2/year Overseas group companies 167, tons-co2/year Energy (Crude oil equivalent) SOx Domestic group companies Overseas group companies 52.3 tons/year 96.5 tons/year.2 tons/year 491,651 kl/year To Water Systems Domestic group companies 73,335 kl/year Domestic group companies Overseas group companies 95,387 kl/year 26 Overseas group companies COD Domestic group companies Overseas group companies tons/year 11.5 tons/year 38.7 tons/year Water 1 SS Domestic group companies Overseas group companies tons/year 8.9 tons/year 25.7 tons/year 22,94, m 3 /year As Waste Domestic group companies 5,31, m 3 /year Overseas group companies 5,41, m 3 /year Final landfills Domestic group companies Overseas group companies 282 tons/year 72 tons/year 5,66 tons/year 9

11 1,628, tons/year Overseas group companies 226, tons/year * Includes only those products that can be calculated in or converted to tons tons/year Domestic group companies 7.8 tons/year Overseas group companies 93. tons/year NOx Soot and dust Domestic group companies Overseas group companies PRTR Law-designated substances Domestic group companies 38.7 tons/year 5. tons/year 27.5 tons/year tons/year 18.8 tons/year Environmental Management Systems Environmental management is the process of a business setting policies and goals related to the environment and voluntarily striving to achieve them. An environmental management system is comprised of the structures and procedures used for these efforts. By fiscal 28, we will create and advance plans to achieve certification for environmental management systems at every domestic Group company. Large group companies plan to acquire ISO141 certification, while small- and medium-size group companies seek to realize the standards of Eco-Action 21, a program that is promoted by the Ministry of the Environment. In fiscal 26, five domestic group companies began efforts to acquire Eco-Action 21 certification. One has already received certification, and two are in the process of applying for registration examinations. We also expect one company to acquire ISO141 certification during fiscal 27, and six others to acquire Eco-Action 21 certification. Acquisition of ISO 141 Certification by and Group Companies Business Establishments and Group Companies Specification No. Registration Date Registration No. Shiga Plant Osaka Plant Kashima Plant Takasago Plant Tochigi Corporation Osaka Synthetic Chemical Laboratories, Inc. Tatsuta Chemical Co., Ltd. JIS Q141 ('4) March 1998 JIS Q141 ('4) April 1999 JIS Q141 ('4) April 1999 JIS Q141 ('4) January 2 JIS Q141 ('4) April 21 JIS Q141 ('4) January 22 JIS Q141 ('4) April 24 JCQA-E-15 JCQA-E-53 JCQA-E-54 JCQA-E-15 JCQA-E-256 JCQA-E-343 JCQA-E-553 Belgium N.V. ISO 141 ('4) October EMS2b Electec Sdn. Bhd. ISO 141 ('4) April 24 k Basic Policies & Management System Environmental Protection Efforts PRTR Law-designated substances Domestic group companies 6.3 tons/year. tons/year Nitrogen Domestic group companies Overseas group companies tons/year.9 tons/year 1.9 tons/year Phosphorus 3.7 tons/year Domestic group companies.3 tons/year Overseas group companies. tons/year External recycling 49,862 tons/year Domestic group companies 4,839 tons/year Overseas group companies 1,661 tons/year External reduction 19,626 tons/year Domestic group companies 3,832 tons/year Overseas group companies 3,8 tons/year Environmental Compliance We regularly and continuously confirm the status of our compliance with laws and regulations, agreements with local governments and other rules related to the environment through ISO141 internal audits, Responsible Care internal audits, comprehensive inspections and other efforts. In fiscal 26, we did not receive any penalties, warnings or directives from national, prefectural, or municipal governments related to air, discharged water, odor, noise pollution or other issues. There was one complaint related to the environment from people living near one of our plants. The cause of that complaint was noise created by a belt that had slipped because the pulley on an exhaust fan was out of alignment. After repairing it and confirming that it no longer caused noise, we restarted operation of the exhaust fan. As a measure to prevent recurrence of this problem, we have increased the frequency of exhaust fan inspections from twice per year to once per month in order to identify problems earlier. Efforts for Society Initiatives of Group Companies 1

12 Environmental Protection Efforts Reduction in Discharge of Chemical Substances PRTR Total volume of discharge reduced by 87% from FY23 In fiscal 26, we strove to reduce total emissions of chemical substances subject to the Pollutant Release and Transfer Register (PRTR) Law, or PRTR chemicals, by 82% compared to fiscal 23, to a total of 24 tons. As a result, we were able to completely replace chloromethane with non-prtr chemicals such as dimethyl ether and butane, and successfully achieved the target by reducing PRTR chemical emissions by 87% compared to fiscal 23, or by 49% compared to the previous year, to a total of 152 tons. In fiscal 27, we will further strengthen management of PRTR chemicals to reduce their total emissions by 88% compared to fiscal 23, in accordance with our Voluntary Plan to Reduce VOC Discharge (see page 12 for details). The total amount of PRTR chemicals emitted by domestic group companies was 19 tons, or a 79% reduction from fiscal 24 and 1% from fiscal 25. We will continue to take great care not to increase emissions of PRTR chemicals. In regard to the transfer amount of PRTR chemicals, we were able to achieve a 23% reduction compared to the previous fiscal year as a result of such efforts as selling separated used organic solvents to recycling companies. Amount of Chemical Substances Subject to PRTR Law That Are Discharged and Transferred by (FY26) (Unit: kg) Ordinance Designated Number Chemical Substances Emission to atmosphere Drainage into public water Discharge into soil Emission Waste taken to landfill sites Total Reference <FY25> Transfer Amount Total 1 Substances Discharged in Large Volumes 77 Chloroethylene 145 Dichloromethane 172 N,N-Dimethylformamide 177 Styrene 32 Methyl methacrylate 116 1,2-Dichloroethane 74 Chloroethane 268 1,3-butadiene 12 Vinyl acetate 7 Acrylonitrile Total of Remaining 37 Substances Grand Total of All 47 Substances* 36,21 19,5 18, 12,72 11,87 11, 1, 7,5 6,9 2, ,47 19,51 18,55 12,766 11,872 11, 1, 7,52 6,9 3,87 <39,44> <18,443> <4,45> <12,749> <11,13> <6,7> <9,5> <5,2> <5,7> <3,358> 4 533,2 591,7 1, ,1 44 9,347 4,491 13,839 <182,886> 683, ,517 6,32 151,819 <299,331> 1,812,998 * Note: handles 47 of the 354 substances subject to registration by the PRTR Law. Amount of Chemical Substances Subject to PRTR Law That Are Discharged and Transferred by s Domestic Group Companies (FY26) (Unit: kg) Ordinance Designated Number Chemical Substances Emission to atmosphere Drainage into public water Discharge into soil Emission Waste taken to landfill sites Total Reference <FY25> Transfer Amount Total 1 Substances Discharged in Large Volumes 227 Toluene 172 N,N-Dimethylformamide 63 Xylene 4 Ethylbenzene 145 Dichloromethane 85 HCFC Phenol 272 Bis (2-ethylhexyl) phthalate 95 Chloroform 12 Acetonitrile Total of Remaining 15 Substances Grand Total of All 25 Substances 48, 26,5 21, 8,2 1,6 1,3 1, , 26,5 21, 8,2 1,6 1,3 1, <65,> <21,> <26,> <3,3> <2> < > < > <62> <95> <73> 26, 24, 23, 2,1 94 2, 5, <3,983> 17,975 18,781 18,781 <121,126> 353,615 11

13 Voluntary Plan to Reduce VOC Discharge 39% reduction achieved compared to FY2 began efforts to suppress emissions of volatile organic compounds (VOC)* in fiscal 26 according to our Voluntary Plan to Reduce VOC Discharge. That plan sets fiscal 2, when we emitted 5,436 tons of VOC into the atmosphere, as the benchmark year. The first goal of this plan, and the interim target, is to reduce emissions by about 37% compared to that year to a total emission amount of 3,47 tons by fiscal 28. The second goal of the plan is to reduce emissions by 48% to a total emission amount of 2,829 tons in fiscal 21, which is the final year of the plan. This goal greatly exceeds the target set by the national government of a 3% reduction from fiscal 2 levels. In fiscal 26, by reducing the amount of discharge of substances subject to the PRTR law, and through other efforts as well, our total emission amount was 3,312 tons, a 39% reduction from the benchmark year. Not only did we surpass our fiscal 26 goal of 3,55 tons, we also reached our goal for fiscal 28 (the interim target) two years early (FY) (FY) (FY) We will strive to reduce VOC emissions even further in fiscal 27, with 3,297 tons as our goal. * All organic compounds that are emitted into the atmosphere or dispersed as gas are classified as volatile organic compounds (VOC), with the exceptions of methane and certain fluorocarbons that do not cause the formation of suspended particulate matter or photochemical oxidants. VOCs are not necessarily toxic. VOC Voluntary Reduction Plan (Unit: tons) 6, 5,436 5, 4,496 4, 3, 3,69 3,312 Voluntary Management Plan Continuing the reduction of hazardous air pollutants When the Air Pollution Law was amended in 1996, created a voluntary management plan in which a voluntary emissions reduction was planned for six hazardous air pollutants (HAPs), chloroethylene, 1,2-dichloroethane, chloroform, acrylonitrile, 1,3- butadiene and dichloromethane, and we have worked to achieve that goal ever since then. Gas chromatographs in our plants are monitoring the concentration of those HAPs around the clock, thus enabling us to respond immediately to any abnormality. We made efforts in fiscal 26 to reduce HAPs as part of the Voluntary Plan to Reduce VOC Discharge that was renewed for the year. However, the total emissions of those six substances above increased 5.7%, or 77.3 tons, from fiscal 25 level, as a result of Takasago Plant Osaka Plant Shiga Plant Kashima Plant 2, 1, (FY) (FY) , ,47 more frequent maintenance work. We will continue our efforts from a medium- and long-term point of view by investigating how to enhance efficiency in pollution abatement equipment and devices in fiscal 27 and enabling that to contribute to further reducing emissions in fiscal 28 and thereafter. Chloroethylene Emisson 1,2-Dichloroethane Emisson Dichloromethane Emisson (Unit: tons) (Unit: tons) (Unit: tons) Acrylonitrile Emisson 1,3-Butadiene Emisson (Unit: tons) (Unit: tons) (Unit: tons) Final year target 2, Benchmark Target Interim year target Chloroform Emisson (FY) Gas chromatography equipment (FY) Initiatives of Group Companies Efforts for Society Environmental Protection Efforts Basic Policies & Management System 12

14 Environmental Protection Efforts Prevention of Air and Water Pollution Prevention of Air and Water Pollution is working to prevent both air and water pollution that leads to the deterioration of the environment, and we comply with legal emission limits and other limits agreed upon with local governments concerning air and water pollution. In May 26, in addition to regular auditing, our Head Office Environmental Protection & Safety Department conducted audits on items related to the Air Pollution Control Law at s four plants and confirmed that legal regulatory limits and limits agreed on with local governments are being observed. Our domestic group companies are, for the most part, improving in the areas of air and water quality, and we will continue our efforts to further reduce the environmental burden as part of the application of our environmental management system. s 4 plants Domestic group companies Overseas group companies SOx Emission (Unit: tons) NOx Emission (Unit: tons) Soot and Dust Emission (Unit: tons) , (FY) (FY) (FY) Amount of Water Used Wastewater Discharged (Unit: million m 3 ) (Unit: million m 3 ) COD in Wastewater (Chemical Oxygen Demand) (Unit: tons) (FY) (FY) (FY) Note: The BOD value is deemed the COD value at some domestic group companies which do not measure COD. Nitrogen in Wastewater Phosphorus in Wastewater SS in Wastewater (Suspended Solids) (Unit: tons) (Unit: tons) (Unit: tons) (FY) (FY) (FY)

15 Promotion of Anti-Global Warming and Energy-Saving Measures The emission of carbon dioxide (CO2) from energy use in production activities amounted to 1,154, tons in fiscal 26, a 3% increase from the previous year. The reason for this is that even though we replaced heavy oil and other energy sources with natural gas, which is low in carbon, the amount of our production also increased. As a result of this energy use, the index for our CO2 emissions per unit of production 1 became 11 in fiscal 26, making it 2% worse than the previous year. At, we believe in the importance of raising environmental efficiency in all business activities, and we are endeavoring to reduce CO2 emissions per sales amount. Specifically, we have set a goal to make our CO2 emissions per unit of sales 2 9% of the fiscal 199 (benchmark year) level by the 21 fiscal year. In fiscal 26, our CO2 emissions per unit of sales index increased to 14 from 11 in the previous year. Our CO2 emissions per unit of sales thus worsened about 3%. In consideration of this, we will be taking an even more active approach towards environmental efficiency in reducing CO2 emissions as we continue to work to achieve our goals. In fiscal 26, the index for our energy use per unit of production 3 was Therefore, we have already achieved the target set by the Japan Chemical Industry Association in their Voluntary Action Plan on the Environment, which is to strive to reduce energy use per unit of production to 9% of the 199 level by 21. However, our result was 1.3% worse in comparison to the previous year. Even though we saved about 5,4 kiloliters (crude oil equivalent, 1.1% of the amount of energy used in the previous year) mainly through increased thermal efficiency, relatively increased production with high energy consumption (primarily caused by changes in market conditions) impacted the results. will continue to work actively to reduce energy use per unit of production by 1% from the previous year. Note: Beginning with this report, the denominator in the formula for energy use per unit of production was changed from a simple production total to a standardized production amount total in which the production amount of each product is converted to be represented by the standard product based on energy consumption. (Unit: Overseas group companies CO2 emissions per unit of production index 1, tons-co2) (FY) (Benchmark year) 1: CO2 emissions per unit of production: CO2 emissions (tons) production (tons) Index: Above figure indexed against the benchmark 199 figure pegged at (FY) (Benchmark year) 2: CO2 emissions per unit of sales: CO2 emissions (tons) sales (million yen) Index: Above figure indexed against the benchmark 199 figure pegged at (FY) (Benchmark year) 3: Energy use per unit of production: Energy required for production (crude oil equivalent in kiloliters) production (tons) Index: Above figure indexed against the benchmark 199 figure pegged at 1 Energy Conservation in the Logistics Section Initiative to reduce CO2 emission by modal shift For years has endeavored to streamline distribution and reduce its environmental impact by, for example, promoting changes in modes of transportation or modal shift, using larger vehicles, shipping from optimal production bases, and exporting from the nearest ports. In fiscal 26, we transported a total of 2,993 tons of synthetic resins, oils and fats by rail, a 12% increase compared to the Reduction in CO2 Emissions CO2 Emissions per Unit of Sales Index Promotion of Energy-Saving Measures CO2 Emissions from Energy Consumption and CO2 Emissions per Unit of Production Index s 4 plants Domestic group companies s 4 plants Domestic group companies Overseas group companies Energy use per unit of production (conversion method) previous year, resulting in a 258-ton reduction in CO2 emissions compared to if they had been transported by truck, and a 12% decrease compared to the previous year. In the future, we will continue to promote modal shift and transport streamlining in order to reduce CO2 emissions in distribution. 9 (Target) Energy Consumption (crude oil equivalent) and Energy Use per Unit of Production (conversion method) (Unit: 1, kl) Initiatives of Group Companies Efforts for Society Environmental Protection Efforts Basic Policies & Management System 14

16 Environmental Protection Efforts Promotion of Waste Reduction and Recycling Reduction of Industrial Waste Disposed of in Landfills 98% reduction compared to fiscal 1996 and achievement of zero waste emissions at all plants We are making efforts to reduce the amount of final landfill through recycling of waste materials along with reducing the amount of waste itself. We have endeavored to fulfill a goal set in fiscal 24 to achieve zero emission of industrial waste (i.e. the amount of final landfill disposal is less than.5% of the total amount of industrial waste generated) at all plants by the end of fiscal 26, and we successfully achieved that goal through such efforts as separating GRP (glass fiber reinforced plastics) strictly from non-grp in plastic waste for recycling purposes, and ascertaining reliable recycling companies that purchase waste plastics. In reducing our final landfill disposal volume to 282 tons in fiscal 26, a 98% reduction compared to the fiscal 1996 level, we actually surpassed our goal of 386 tons, which was a 97% reduction from that 1996 level. In addition, at 15, tons, our waste generation for fiscal 26 was 22% less than the previous year. The main reasons for this were decreased production of certain items and the promotion of waste conversion into resources with value. We will continue our efforts to reduce waste generation in this way. Our domestic group companies greatly reduced their final landfill disposal amount total from the previous year to 72 tons, a 64% reduction. The main reason for this reduction was that we were able to sell waste, formerly disposed of in landfills, as recyclables by determining the companies that will take it. And our domestic group companies will continue to use environmental management systems and promote efforts to reduce final landfill disposal amounts. Changes in the Amount of Waste Taken to Final Landfill Sites (Unit: thousand tons) s 4 plants Domestic group companies Overseas group companies (FY) Amount of Industrial Waste Generated and Amount of Industrial Waste Recycled Industrial waste generated by s 4 plants Industrial waste recycled by s 4 plants Industrial waste recycled by domestic group companies (Unit: thousand tons) (FY) Breakdown of Industrial Waste and its Disposal by s 4 Plants (FY26 results) Internal Weight reduction (incineration) 33,677 tons <32.1%> External Amount of waste recycled 52,538 tons <5.%> Weight reduction 18,444 tons <17.6%> Amount of waste generation 14,94 tons <1%> Amount outsourced 71,263 tons <67.9%> Amount of internal landfill ton <%> Final landfill 282 tons <.3%> Proper Disposal of Industrial Waste Regular visits are made to contractors for confirmation In order to confirm that waste that has consigned to other companies is managed properly, we rate disposal contractors and regularly visit them according to the rating result. In fiscal 26, we visited 51 companies, and inspected them using checklists. We have also implemented a Waste Information Management System to manage information about waste data and disposal contractors, and we are using this system s functions for tracking the authorization renewal periods of those contractors and the management of manifestos to observe laws and regulations related to industrial waste. 15 Software for proper waste disposal management

17 Promotion of Recycling Research and development efforts for disposal technology and the use of recycled materials We established a Recycling Promotion Group at in order to actively promote the recycling of waste plastics. This group handles requests from customers who use products and want to recycle their used products, as well as the recycling of plastic waste generated in s production processes. The Recycling, including two domestic group companies, received wide-area certification from the Ministry of the Environment for recycling, which entitles all of our four plants manufacturing Kanelite Foam to collect waste materials from this product, generated at secondary processing businesses, building sites and other locations throughout Japan. They then reuse the collected waste as a raw material. Overall, we collected and processed about 16 tons of waste material during the 26 fiscal year, a great increase from 1 tons in 25. In the future, we expect to increase both the processed amount and the number of collection sources. We are also contributing to the effective use of the world s limited resources by advancing material recycling of refrigerator tray waste in accordance with the Home Appliance Recycling Law and polystyrene waste materials generated at recycling centers. Furthermore, Hokkaido Co., Ltd. received Hokkaido Recycled Product Accreditation for some grades of material. At the Group, we purchase and use recycled raw materials so that we can utilize resources effectively and contribute to sustainable growth. Specifically, we use recycled polystyrene, PET resin, and polyvinyl chloride resin as raw materials. In fiscal 26, the amount of recycled materials that we used totaled 17,89 tons. In the future, we will continue to increase that amount and promote the effective use of resources. Asbestos regulations became stricter with the amendment to the Enforcement Order of the Industrial Safety and Health Law that came into force in September 26. Now, any product with more than a.1% asbestos content (previously 1%) is defined as an asbestos product. again analyzed sprayed materials and similar items that were suspected of containing asbestos and confirmed that these building materials contained.1% or less asbestos and were not, Promotion Group also develops processing technologies and introduces suitable processing equipment to their clients. They are also expanding application of their recycling technology to other company s products. Recycling of Kanelite Foam (Extruded Polystyrene Foam) Waste Reprocessing of scraps and waste Responses to Asbestos Issue Effective Use of Resources Amount of Recycled Material Used Confirm That Asbestos Content Is.1% or Less, and Continue Health Checks FY Tons 18,359 17,97 17,89 Kanelite Foam product therefore, asbestos products. We continue to promote medical examinations for retired workers who may have been exposed to asbestos, as well as other retired and current employees who desire them. At present, three people received acknowledgment of workrelated illness from asbestos and five people have been issued Personal Health Records. All of these people are retired. Initiatives of Group Companies Efforts for Society Environmental Protection Efforts Basic Policies & Management System 16

18 Environmental Protection Efforts Environmental Accounting Along with our countermeasures against environmental impact from production activities, is also focusing on research and development that contributes to environmental protection and conservation. Since fiscal 2, we have identified environmental conservation costs (investments and expenditures) at Corporation, and in fiscal 22 we began calculating the environmental protection effects (in units of physical quantity) and economic effects (in monetary units) associated with our environmental protection and conservation measures. In fiscal 26, we then began calculations on a consolidated basis that includes domestic group companies in regard to the environmental conservation costs and economic effects associated with those environmental protection and conservation measures. Results of Environmental Accounting for FY26 Period of Analysis: FY26 (April 26 March 27) Method of Analysis: Analyzed based on the Environmental Accounting Guidelines 25 issued by the Ministry of the Environment and other references. (Partly modified in view of s environmental accounting policies.) Environmental conservation costs: Investment and expenditure were totaled separately. Economic effects associated with environmental protection and conservation measures: Items such as deemed effects, windfall effects, etc. are not included. Environmental Conservation Cost (Monetary Units) Unit: million yen FY25 FY26 Classifications Major Efforts Corporation Corporation Consolidated basis Investment Expenditure Investment Expenditure Investment Expenditure Cost within business area 359 4, , ,274 (1) Pollution prevention cost (2) Global environmental conservation cost (3) Resource circulation cost Air and water pollution prevention Prevention of global warming (energy-saving) measures, etc. Waste processing, recycling, reduction 2,592 2,127 2,883 2,46 3,2 2,253 Upstream/downstream cost Recycling, collection and processing of products, etc Management activities cost Research and development cost Social activities cost Environmental education for employees, environmental impact monitoring/measurement, etc. Research/development of products contributing to environmental conservation, etc. Greening, conservation of scenic beauty, disclosure of environmental information, etc , , , Environmental damage cost Environmental conservation dues (SOx dues) Total 359 7, , ,952 Note: Totals for FY25 include only Corporation, while the totals for FY26 include twenty-three domestic group companies. Research and development investments and global environmental conservation expenditures are not included in these totals. Environmental Protection Effects (Physical Quantity Units) Classifications Measures Items Unit FY25 FY26 SOx emission tons Difference 6.8 Additional Information P.13 Pollution prevention Reduction of hazardous air and water pollutants NOx emission COD tons tons P.13 P.13 PRTR chemical emission tons P.11 Global environmental conservation Reduction of greenhouse gas emission Energy conservation CO2 emission Amount converted based on crude oil tons kl 1,117, 493, 1,154, 492, 37, 1, P.14 P.14 Resource circulation Reduction of final landfill External recycling Amount landfilled Amount recycled tons tons , , ,923 P.15 P.15 Note: These totals are only for Corporation. About Our FY26 Results s environmental conservation costs for resource circulation and research and development were about 25 million yen less than the previous year, while pollution prevention costs increased about 29 million yen due to strengthened air pollution prevention, etc. Total environmental conservation costs increased 13 million yen compared to the previous year. In terms of environmental protection effects (physical quantity unit), compared with the previous year, PRTR chemical emissions were cut in half, and final landfill disposal amounts were greatly reduced through our efforts to achieve zero waste emission. Economic Effects Associated with Environmental Conservation Measures (Monetary Units) Measures Revenue by recycling Cost reduction by resource conservation and improvement in unit per volume Waste disposal cost reduction by recycling Cost reduction by energy conservation Total FY25 Corporation ,6 Unit: million yen FY26 Corporation Consolidated basis Note: Totals for FY25 include only Corporation, while the totals for FY26 include twenty-three domestic group companies. 17

19 Trend in Environment-Related Investment In fiscal 26, s investments related to the environment included increased air pollution prevention equipment and other atmosphere-related efforts accounting for 51% of the total. Other large categories of investment include areas related to the work environment at 14% and industrial waste at 13%. The seven-year cumulative total of investment related to the environment since fiscal 2 has reached about 6.1 billion yen. Amongst our investments, air quality (43%) has been the largest category, followed by water quality (25%) and industrial waste (13%). Cumulative Environment-Related Investments (Unit: million yen) 7, 6, 5, 4, 3, 2, 1, , , , , ,146 5,55 6,94 Environmental Efficiency Indexes Various environmental impacts result from our production activities at. Nevertheless, we are endeavoring to reduce these burdens and contribute to the realization of a sustainable society. Using the JEPIX 1 method, our total environmental impact points (EIP) from various environmental impacts have decreased every year, but in fiscal 26, we experienced a 1.8% increase from the previous year caused by increased emissions of hazardous air pollutants (see page 12). s environmental efficiency 2 has improved steadily each year as well, but our increased EIP in fiscal 26 resulted in a level about the same as the previous year. We will s Environmental Impact Points (EIP) and Environmental Efficiency Environmental Efficiency Greenhouse gases Ozone-depleting substances (1 million EIP) Hazardous air pollutants Photochemical oxidants Breakdown of Environment-Related Investments (FY26) Others 2% Work environment 14% Industrial waste 13% Vibration % Noise 1% Dust 8% Odor 4% FY2 FY26 (7 years) Breakdown of Environment-Related Investments Others 6% Work environment 9% Industrial waste 13% Vibration % Noise 1% Dust 2% Odor 1% s Environmental Efficiency NOx SPM1 (FY) BOD discharge into rivers COD discharge into coastal waters, etc. Environmental Efficiency continue to strive to reduce the environment impact of items with high EIP scores and raise environmental efficiency. 1: With the JEPIX (Japan Environmental Policy Index) method, an eco-factor coefficient is calculated for each environmental impact substance from the ratio of the annual emissions amount targeted by the Japanese national environment policy to the actual amount of annual emissions (distance to goal). The eco-factor is then multiplied by each environmental impact, and a simple index called an Environmental Impact Point (EIP) is determined. The eco-factors are calculated by the JEPIX Project and are made publicly available. ( 2: Seeking sustainable growth, calculates this as a measure to judge our efforts to minimize environmental impacts while maximizing value. The formula is: sales (1 million yen) total environment impact (1 million EIP). (Yen/EIP) Environment-related investments 589 million yen Environment-related investments 6,94 million yen Nitrogen discharge into coastal waters, etc. Phosphorous discharge into coastal waters, etc Water quality 7% Air quality 51% Water quality 25% Air quality 43% Landfill waste Environmental Efficiency Initiatives of Group Companies Efforts for Society Environmental Protection Efforts Basic Policies & Management System (FY) (FY) 18

20 Efforts for Society Providing Safe Products and Information promotes product safety and quality assurance activities to ensure the safety and quality of products and services, while keeping in mind the aim to secure the satisfaction and trust of consumers and clients. Efforts for Product Safety conducts safety risk assessments not only for finished products, but also at every stage from their development to manufacture in order to confirm the safety of their raw materials, byproducts and waste. We hold a Product Safety Examination Committee chaired by the Director in charge of environmental safety and quality assurance when new products are to be brought to market. That committee also employs an advisory board of outside experts and conducts multifaceted examinations to assure safety. In fiscal 26, we convened the Product Safety Examination Committee for products in the medical appliance and food product fields. The committee scrutinized these products from multiple perspectives for potential hazards, verified their safety and deliberated on whether the products could be brought to market. They also verified through investigation and other measures whether key issues were covered reliably during examination. As part of our management of chemical substances, we provide material safety data sheets (MSDS), technical documentation, catalogs and other information to assure that our customers use products appropriately. From fiscal 26, as regulations similar to the RoHS directive in Europe are beginning to be investigated in Asia, we have begun sharing this information and making it known throughout the Group. The amended Industrial Safety and Health Law, which was brought in line with GHS*, was put into effect in December 1, 26. While making that content known throughout the Group as a whole, we are reviewing the requirements for labels and MSDS for all products that we handle. In order to advance smooth pre-registration and following registration for the new EU chemical substance regulations (REACH) that went into effect on June 1, 27, we are undertaking preliminary research on substances handled by the Group that may be subject to REACH registration and we will begin implementing specific actions in the next fiscal year. * GHS (Globally Harmonized System of Classification and Labeling of Chemicals): In this system adapted by the United Nations in July 23, the hazards of chemical products are classified according to fixed standards, and are indicated using pictograms to make them easy to understand. These results are reflected in labeling and MSDS to help serve to prevent accidents and secure human health and the environment. MSDS Quality Assurance Activities and Quality Risk Management In order to provide a stable supply of products that appropriately meet customer quality demands, we have established a Quality Assurance Committee in our business divisions, chaired by the head of that division, and a Quality Control Committee at each plant, chaired by the head of that plant. The Quality Assurance Committee decides policies related to quality assurance, such as customer satisfaction, while the Quality Control Committees convene to promote systematic quality control activities specific to each plant and their thorough implementation. Furthermore, a Quality Assurance Promoters Conference for the entire company is held regularly to promote information sharing among business divisions and plants. For our main products, we have acquired either ISO91, the international standard for quality management systems, or ISO13485 certification, the international standard that includes additional requirements for medical equipment. Furthermore, for products related to medical applications, including supplies and equipment, we have created systems for reliable compliance with the Japanese Pharmaceutical Affairs Law, US FDA regulations, European directives, and other laws and regulations and their amendments. From fiscal 25, we have expanded the coverage of our comprehensive inspections, which are headed by the Chair of the Central Committee on Environment, Safety & Human Health, to include all production bases in Japan and abroad in order to implement thorough quality accident prevention throughout the Group. In our 26 fiscal year, we also conducted an additional inspection for Group food product plants. These inspections were focused on the management of the expiration dates of raw materials to verify on the spot that the Group s rule requiring raw materials to be discarded after that date was being fastidiously observed. Naturally, Group food product plants not only comply with the Food Sanitation Law and other relevant laws and regulations, but we are regularly audited based on ISO91, AIB 1, HACCP and other standards by a number of external organizations. Although our quality management activities are also checked through internal auditing by business divisions and inspections by the Central Committee on Environment, Safety & Human Health, the extra inspection discovered that visual management of materials required further improvement, including displaying the expiration dates in visible places on all raw materials in order to further reduce the risk of their use after those dates. In fiscal 26, we started several model workplaces on a trial basis towards introducing approaches to the validation 2 of products besides medical supplies and equipment and other items that are already subject to the GMP manufacturing and quality management rules. Our goal is to reduce risk and to reconfirm, for example, that the management of change is being conducted appropriately, and that 19

21 production conditions and management methods are validated by data and a scientific basis. We also plan to further strengthen the management of change in fiscal 27. 1: AIB auditing: The food product safety auditing of the American Institute of Baking (AIB) is based on America s good manufacturing practices (GMP) and other guidelines, and emphasizes the effectiveness of Hazard Analysis and Critical Control Points (HACCP). Group food product plants have been audited in this way since 22. 2: Validation: Establishing documented evidence that provides a high degree of assurance that a specific process will continuously produce a product meeting its pre-determined specifications and quality attributes. (Source: Guideline on General Principles of Process Validation: FDA, 1987) AIB certificate of achievement Basic Policies & Management System ISO91 Certified Division/Group Company Registered Date 6/1994 6/1994 2/1995 4/2 5/23 7/23 8/23 6/24 5/26 4/27 1/ /1999 8/2 2/24 6/21 6/22 3/24 5/24 1/1999 5/24 11/1991 6/1993 5/1999 6/21 6/21 5/22 6/22 Performance Polymers Division Liquid Polymers Division Electrical & Electronic Materials Division Kanelite Division PVC & Chemicals Division Eperan Division Foods Division Kanepearl Division New Business Development Department Solar Energy Division Tochigi Corporation Showa Kaseikogyo Co., Ltd. Sanwa Kaseikogyo Co., Ltd. Kanto Styrene Co., Ltd. Kitaura Jushi Kogyo Co., Ltd. Tatsuta Chemical Co., Ltd. Hokkaido Kane Pearl Co., Ltd. Sun Spice Co., Ltd. Osaka Synthetic Chemical Laboratories, Inc. Taiyo Yushi Co., Ltd. Belgium N.V. Texas Corp. Division/Company Major Product Included Group Company Registry Org. Registry No. (Malaysia) Sdn. Bhd. Electec Sdn. Bhd. Eperan Sdn. Bhd. Paste Polymers Sdn. Bhd. ISO13485 Certified Division/Group Company Registered Date MBS MS Polymer Apical, Elmec Kanelite Super E Caustic soda, Liquid chlorine Eperan, EperanPP Margarine, Yeast Kane Pearl Highly heat-resistant and light-resistant transparent plastics Photovoltaic modules Magnet roller, Vinyl pipe Plastic compound Eperan, EperanPP Styrene foam products Styrene foam products Plastic film, Plastic sheet Kane Pearl Spices, Processed foods Pharmaceutical intermediates, Industrial organic chemicals Margarine, shortening MBS, Eperan, EperanPP, MS Polymer Apical MBS, Eperan, EperanPP MBS Wire coils, Litz wire Eperan, EperanPP Vinyl chloride paste resin Hokkaido Co., Ltd. Kyushu Kanelite Co., Ltd. Food Co., Ltd. Tokyo Food Co., Ltd. Nagashimashokuhin Co., Ltd. Solar-tech Co., Ltd. LRQA LRQA LRQA JCQA JCQA JCQA JQA JCQA DNV, DCJ JQA LRQA JET-QA JMA-QA JACO JACO BVQI Japan LRQA JQA JCQA JASCRC AIB VINCOTTE UL Inc. ABS QE SIRIM QAS SIRIM QAS SIRIM QAS SIRIM QAS SIRIM QAS JCQA-673 JCQA-1263 JCQA-1292 JQA-QMA1274 JCQA AQ -KOB-RvA/JAB JQA-QMA JET-243 JMAQA-729 QC3J233 QC1J JQA-QMA11351 JCQA-444 JASAQM c A6972 AR2321 AR2322 AR2598 AR269 Division/Company Major Product Included Group Company Registry Org. Registry No. Environmental Protection Efforts Efforts for Society Initiatives of Group Companies 1/1995 Medical Equipment Division Lixelle, Liposorber TÜV Q1Z 3 8 4/21 Medix Co., Ltd. (Kanagawa Office) Medical equipment TÜV Q1Z 4 4 2

22 Efforts for Society Environmentally-Conscious, Safety-Conscious and Health-Conscious Products and Technologies Excel Window PVC sashes that realize both energy conservation and comfort Excel Window products are highly airtight sashes comprised of PVC plastic frame material, which insulates and is resistant to the elements, and doubleglazing to provide excellent insulation, soundproofing, and condensation prevention. Assuming the heat loss of ordinary aluminum sashes and single-pane glass windows to be 1%, aluminum sashes with double-glazing lose 71.4%, while plastic sashes with Low-E double-glazing lose only 35.7% (Source: Japan Construction Material & Housing Equipment Industries Federation). In other words, windows with plastic sashes and Low-E double-glazing lose only one third of the heat of windows with aluminum sashes and single-pane glass. The Japanese Ministry of the Environment has recognized this insulation capacity and is providing various support to advance its use with the goal of promoting it as a global warming countermeasure. Kanelite Foam Extruded polystyrene foam that contributes to energy conservation and environmental protection Kanelite Foam is an extruded polystyrene foam insulation board made by melting and mixing polystyrene plastics, adding a hydrocarbon-based foaming agent, and forming with extrusion foam molding. On top of its superior insulation performance, this foam absorbs almost no water or humidity, so it is especially suitable as an insulation material for houses and as a core material for tatami mats, and it contributes to household and building energy conservation. Moreover, since fluorocarbons are not used in the foaming agent, the emissions of global warming gases are greatly reduced at every stage from product manufacture to disposal, further contributing to global warming prevention. Furthermore, among our efforts to contribute to the effective utilization of the world s limited resources, we are able to promote waste material collection and reuse since we have acquired wide-area certification from the Ministry of the Environment for the re-collection of our used products. As a result of these efforts, Kanelite Foam is listed as an insulation material that meets the procurement requirements of the Green Purchasing Law. Thin-film Photovoltaic Modules Contributing to global warming prevention s amorphous silicon photovoltaic modules are resource-conserving products that have a.3-micrometer silicon layer and use only about 1/6 the silicon of crystal photovoltaic modules. produces hybrid photovoltaic modules that layer this amorphous silicon with thin-film multi-crystal silicon. In 27, we began selling a new product that improves conversion efficiency for sunlight to electric power from 1% to 12%. Advantages of these products are that they use less resources compared to crystal silicon photovoltaic modules, and that the energy use amount necessary for production is low. Furthermore, photovoltaic modules use solder that contains no lead, making it a product with a low environmental impact. 21

23 IB Dragons Contributing to the reduction of earthquake disasters Tatsuta Chemical s IB Dragons sheets, which prevent furniture and other objects from falling over during earthquakes, use s SIBSTAR, a thermoplastic elastomer with outstanding vibration-damping performance. In addition to that superior performance, these sheets also do not damage the objects and floors that they are affixed to and can be easily removed after use. Highly valued in the marketplace for its excellent features, this product is used not only in household applications but also to prevent semiconductor manufacturing equipment and other small- and medium-sized machinery and equipment from moving sideways when earthquakes strike. This product is expected to be used in a variety of ways to reduce risks from earthquake disasters. Basic Policies & Management System Protex Mixing this fiber with others to create flame retardant cloths Protex fibers themselves are naturally flame retardant and, unlike fibers made flame retardant by post-processing, Protex materials can be washed any number of times without losing that flame retardant character. This material can also be blended with any type of fiber to create flame retardant cloth without changing the other fiber s texture or touch. This ability is used to make children s pajamas, curtains, airplane blankets, sheets and other products in Japan, Europe, America and other countries around the world, meeting their fire prevention standards and helping protect people in their daily lives. Environmental Protection Efforts Nova SVL5G Margarine that is free of food additives Nova SVL5G is a margarine for kneading into bread dough. We use select butter, sweetened condensed milk and other ingredients in this margarine, so that soft, well-textured bread with good flavor and full volume can be baked. This also has the function of keeping bread from becoming stale (postponing the hardening of the bread that occurs over time). The main feature of this margarine, however, is that it does not use emulsifiers, artificial flavoring, artificial colorings or other food additives, making it a product that meets consumer needs for safety and security. Although the safety of food additives has been verified, and the Japanese government permits their use, the number of consumers preferring food products with fewer additives is still high. Nova SVL5G is a product that meets that demand. Efforts for Society Coenzyme Q1 Dietary supplement material made from yeast Coenzyme Q1 is used as an ingredient for medicines and dietary supplements. Unlike drugs that are used under the supervision of doctors, customers take responsibility for using dietary supplements. Hence, we believe it is the responsibility of the producer to ensure product safety and to actively offer information to customers. has conducted clinical safety tests on healthy individuals, and confirmed that there is no problem even if such individuals ingest 9 mg of Coenzyme Q1 per day. We enforce a high level of quality management in the production of Coenzyme Q1 from yeast. This is a very safe product with a production record of about 3 years. Initiatives of Group Companies 22

24 Efforts for Society Symbiotic Relationship with the Community and Society Interaction with Local Communities All four plants continuously make efforts to interact with their local communities, including offering plant tours, holding summer festivals with the participation of community residents, and cleaning the neighborhoods around the plant, as well as opening playgrounds, a pool and other amenities to local communities. In addition, we are contributing to community disaster prevention and safety through participation in comprehensive drills for community disaster prevention and installation of automated external defibrillators (AED) and first-aid supplies. In recognition for these efforts, our Osaka Plant was certified by the Settsu City Fire Department Headquarters as a citizen s lifesaving support station. Plant tour for high school students (Kashima Plant) Cleaning around the plant (Shiga Plant) Active Participation in Community Dialogues The Japan Responsible Care Council holds community dialogues with local residents and members of government and participates in them actively. Our efforts in fiscal 26 included explaining part of the activities of s Takasago Plant in the Hyogo region on February 1, 27 through a presentation entitled Efforts for Process Safety, Disaster Prevention and Environmental Protection, and the participants asked lively questions. We also reported on the plastic recycling efforts of s Kashima Plant in a community dialogue on February 23, 27 in the Kashima district. Another community dialogue was held in the Osaka district on March 7, 27, with acting as an advisory company for this meeting in support of the coordinating companies. Residents participating in our summer festival (Takasago Plant) Certification as a citizen s lifesaving support station (Osaka Plant) Comprehensive drill for community disaster prevention (Osaka Plant) Settsu Citizen s Environment Festival Numerous citizens participated in the Settsu Citizen s Environment Festival on November 19, 26, which was cosponsored by Settsu City and citizen groups, and our Osaka Plant presented such topics as photovoltaic modules and plastic recycling. We believe that we raised the understanding of citizens about part of s efforts towards global environmental protection. Community dialogue in the Kashima region Community dialogue in the Hyogo region Support for the Next Generation Settsu Citizen s Environment Festival Chemistry Makes Our Dreams Come True We participate in the Chemistry Makes Our Dreams Come True campaign promoted by the Japan Chemical Industry Association. On February 2, 27, we invited third grade children from a nearby elementary school to visit our Takasago Plant so that they could experience the excitement of chemistry in things familiar to them. We had them do hands-on activities, including making plastic erasers and cakes. The children enjoyed themselves greatly, saying, It was interesting and I want to come again. School Visits We willingly cooperate in the science education of nearby elementary, middle and high schools. In fiscal 26, we visited an elementary school near our Osaka Plant and gave lessons to about 9 fourth-graders in three classes with the goal of deepening their understanding of the importance of environmental protection and the role of photovoltaic modules as a source of clean energy. They were surprised by the experience of using charcoal batteries, wind power generation and photovoltaic modules to turn motors, and startled by photographs of problems caused by global warming. We believe that the idea of working to protect the environment beginning with the things that they can do themselves took root in their minds through these classes. 23

25 Super Science High Schools The Ministry of Education, Culture, Sports, Science and Technology started Super Science High Schools with the goal of cultivating talented human resources for the future in the fields of science and technology. We cooperated with this program and sent lecturers to these schools. On July 14, 26, we gave a lecture on global warming, the potential for clean energy development, and related topics at the Wakon Hyakunen Hall of the Hyogo Prefectural Toyooka High School in Toyooka City, which is also where Solar-tech Co., Ltd. is located. Sixty students participated, including 4 first-year students of the general science course and 2 secondyear students who also desired to attend. Then, on August 11, they came to Solar-tech Co., Ltd. and performed a measurement experiment on the power generation performance of photovoltaic modules. Through these events, we believe that we advanced the understanding of the importance of environmental protection as well as of photovoltaic modules, helping to achieve the goal of the program to cultivate the capacities of future researchers. Exhibit at the 26 JPCA Show participated in the 36th International Electronic Circuits Exhibition, which is sponsored by the Japan Electronics Packaging and Circuits Association, with the theme, Responding to Evolving Needs. We displayed different grades of our Apical ultra-heat-resistant polyimide film, from general-purpose to the most recent, and received great interest from show attendees. Try-yaru Week Public Relations Exhibit at BioJapan 26 Try-yaru Week is an original activity conducted by Hyogo Prefecture in which second-year junior high school students leave school for one week to learn through experience in a workplace, interact with the community, and participate in volunteer activities. supports this program every year, and on November 6, 26, ten students from a nearby junior high school came to the Takasago Plant and experienced work in a chemical plant as part of their hands-on learning about society. Super Science High School At BioJapan 26, Japan s largest general biotechnology show, we displayed high function yeasts, Coenzyme Q1 and the biodegradable polymer PHBH, and presented the fermentation biotechnology that we have developed. Try-yaru Week Exhibit at WCPEC Held once every three years, the 4th World Conference on Photovoltaic Energy Conversion (WCPEC), an influential solar power generation conference, was held this time on the island of Hawaii in the USA. We participated in and exhibited at this conference as a leading manufacturer of environmentally-friendly, thin-film photovoltaic modules. Our exhibit of technology received much interest. Efforts for Society Basic Policies & Management System Environmental Protection Efforts Training of Chinese Employees For five months from December 25 until April 26, eight Chinese employees from HiHua Fiber Co., Ltd. (China), one of s overseas group companies, came to our Osaka Plant to learn manufacturing technology and knowledge. On top of this training, they and employees were able to share each other s cultures and customs for better mutual understanding. Initiatives of Group Companies 24

26 Efforts for Society Process Safety & Disaster Prevention and Occupational Safety & Health Basic Safety Policies Safety is an important element that forms our management foundation, and is the basis of all corporate activities. Safety is the foundation of local and worldwide communities confidence in. Safety is based on our belief that All accidents can be prevented. Safety is the responsibility of every employee in accordance with his/her duties. Safety must be maintained continuously. Efforts in Process Safety & Disaster Prevention Aiming for Zero Process Disasters In keeping with the principle that safety and stable operation are the foundations of manufacturing businesses, for many years we have sought and worked to achieve zero process accidents at. In April 26, however, an accident resulting in an explosion and fire occurred at our Takasago Plant. Fortunately, there was no human injury, but we caused grave concern to the community, the government, and our other stakeholders. In the future, we will strengthen our efforts in regard to risk assessment of potential process accidents, and we will endeavor to uncover latent risks and promptly make any and all corrections necessary to prevent accidents. In his address at the beginning of 27, our president directed us on the importance of safety and emphasized the necessity for building the deep awareness in every employee on the importance of maintaining zero process accidents. Risk Assessment Taking the above accident as an opportunity to undertake reform at the Takasago Plant, the entire organization is working on risk assessment related to explosions and fires. We are also implementing Process Safety Analysis that will, without omission, uncover risks (danger) of fire and explosion in all processes, equipment, and operations, and that will then evaluate, examine, and execute measures to minimize that danger. Furthermore, we are currently working on risk assessments throughout the entire Group, including our group companies both in Japan and abroad, which should serve to prevent accidents and disasters. Addition of the Most Advanced Fire Engine with Aerial Water Pumping Capability Following the acquisition of a first-class chemical fire engine at the Takasago Plant in 25, we added the most advanced fire engine with an articulated arm and platform in August 26. If, for example, there is a fire in an elevated tank, this new fire engine can reach it with a large quantity of water, and it can also be connected to the chemical fire engine to spray a large quantity of foam. And, through computer operation, the arm of this unit can be automatically extended to shorten operation time. With the acquisition of this new fire engine, we expect that, if there is ever an emergency, we will have a very effective defense when used in conjunction with our firstclass chemical fire engine. Disaster Prevention Drills We implemented comprehensive disaster prevention drills at every plant in fiscal 26 as shown below. In addition, we are also conducting disaster prevention drills and training in handling fire extinguishers at our group companies. Comprehensive Disaster Prevention Drills (FY26) Plant Date No. of Participants Takasago Plant Osaka Plant Shiga Plant Kashima Plant December 2, 26 March 19, 27 March 29, 27 November 21, 26 Approx. 1, Approx. 3 Approx. 13 Approx. 12 Program Details A drill was carried out for a scenario in which a lower shindo* 6 epicentral earthquake occurred, causing tank piping to crack and a dangerous substance to leak. Static electricity ignited the leaked substance and started a fire, while a worker suffered a heart attack. A drill was carried out for a scenario in which an upper shindo* 5 earthquake occurred, causing flammable gas to ignite and a fire to spread. Human injuries and damaged equipment were inspected and contacts were made both within the company and with relevant outside organizations, and the self-defense group took emergency measures. A drill was carried out for a scenario in which a lower shindo* 6 earthquake occurred and everyone was evacuated to refuge sites. The earthquake caused a leak in a hazardous material tank, and measures were taken to treat the discharge and prevent emission into Lake Biwa. While treating the leak, a fire broke out and spread. All self-defense groups took emergency measures in this drill, including reporting, fire fighting, victim rescue, and working with relevant organizations. In this training scenario, an earthquake of more than 15 Gal caused a leak in an LPG tank output line in the plant s western area. The protection and disaster prevention group reported to firefighting and other public organizations, and the disaster countermeasure headquarters was transferred from the plant s eastern area and reestablished in that western area. * Shindo is the Japanese scale for the intensity of an earthquake as felt at a particular location. Fire engine with aerial water pumping capability (Takasago Plant) Elevated water discharge and foam spraying at fire drill (Takasago Plant) 25

27 Disaster Prevention in the Local Community We cooperate with fire department headquarters, fire brigades, other enterprises and all other groups involved in fire-fighting in the cities of Takasago, Settsu, Otsu and Kamisu where we have plants, jointly implementing various drills with these organizations. Every year, we also participate actively in the fire brigade s New Year ceremony and fire hydrant handling competitions. In the 26 fiscal year, our daily disaster prevention activities were recognized by Takasago City, which honored our Takasago Plant with the Outstanding Volunteer Fire Group Member Commendation and the Takasago Fire Prevention Association Special Merit Commendation. Our Osaka Plant as well was recognized by Settsu City and awarded the Settsu City Fire Department Chief Certificate of Appreciation. Takasago Plant Shiga Plant Basic Policies & Management System Our Osaka Plant Awarded the Nuclear and Industrial Safety Agency Director s Commendation for High Pressure Gas Process Safety s Osaka Plant was commended as an Outstanding Manufacturing Plant at 26 Nuclear and Industrial Safety Agency Director s Commendation for High Pressure Gas Process Safety Ceremony. This award was recognition of their daily process safety activities in high-pressure gas manufacturing and for the fact that they have never had an accident since they began high-pressure gas manufacturing in 1952, and was a real encouragement to them to be even more determined to continue to maintain an accident-free record. The Osaka Plant also received the Osaka Prefecture High Pressure Gas Safety Association Chairman s Commendation. Kashima Plant Yellow Cards Emergency Response Information Kept in Vehicles In preparation for possible accidents involving chemical substances during road transport and in accordance with the guidelines of the Japan Chemical Industry Association, we prepare Yellow Cards that contain emergency contact information and instructions that people involved in transportation and such authorities as fire departments and police should follow, and we require drivers to place them in their vehicles. If an accident should occur, Yellow Cards could be the only information available nearby about prompt and appropriate measures, so we work with contracted transportation companies to regularly verify that these cards are properly placed in their vehicles. Environmental Protection Efforts Commendation ceremony Certificate of commendation Consciousness-Raising Training on Explosions Ignited by Static Electricity Static electricity, which cannot be seen and is very troublesome, is one cause of process accidents. In order to make employees aware that static electricity can cause accidents, we are implementing hands-on consciousness-raising training in regard to explosions ignited by static electricity. Specifically, we want them to experience how static electricity can cause gas and dust explosions. To also make them aware of the importance of preventing electrical discharge from the human body, we use a Van de Graaff generator to let trainees emit sparks from their bodies so that they can experience how painful and frightening it is. Through this hands-on training, participants reconfirm first-hand the danger of static electricity. Checking possession of a Yellow Card Emergency Response Training for Potential Disasters during Transportation Striving to Improve Practical Response Capabilities Once a disaster occurs during transportation, not only knowledge but also the practical ability to take correct and appropriate action is required. plants always keep disaster prevention equipment on-hand and make preparations for disasters. We regularly conduct emergency response training jointly with contracted transportation companies to improve our practical response capabilities. Also, our Takasago Plant participates in the emergency mobilization training that the Regional High Pressure Gas Disaster Prevention Council of Hyogo Prefecture conducts as part of a mutual support system for transportation disasters. Efforts for Society Initiatives of Group Companies Emergency response training 26

28 Efforts for Society Process Safety & Disaster Prevention and Occupational Safety & Health Efforts in Occupational Safety & Health Striving to Eliminate Accidents Seeking to achieve zero occupational accidents, plants have been promoting occupational safety and health activities that show due consideration for the characteristics of each individual workplace. However, in 26, there were still two accidents at that resulted in lost time while another did not require any time off. There were also three accidents at cooperating companies, one of which ended up involving lost time (a fatal case resulting due to organic solvent poisoning) while the two others did not. Taking this tragic accident as a serious lesson, our president directed s four plants and all group companies in Japan and abroad to enhance strict management of operations in confined spaces and environments where organic solvents are present. We have also conducted simultaneous inspections and put the utmost effort into the prevention of a similar accident. On April 1, 26, we put the Occupational Safety and Health Management System (OSHMS) in practice at all plants, and we place risk assessment as being most important for the achievement of zero occupational accidents. Furthermore, we plan to acquire OSHMS certification at every plant in fiscal 27. In order to raise the occupational safety and health level of the Group, we implement comprehensive inspections for all group companies in Japan and abroad in which each company is visited every other year. In fiscal 26, we emphasized the 3S fundamentals for safety, which stand for Seiri, Seiton and Seiso (loosely translatable as tidying-up, organizing and cleaning ), as well as compliance and the establishment of risk management as the key inspection issues. In addition to s 4 plants, we conducted inspections at 19 plants of 17 domestic group companies and 8 companies abroad and confirmed that every company is making diligent efforts regarding the key inspection points. No. of Employee Accidents With/Without Lost Time (No. of employees) 2 Accidents without lost time Accidents with lost time No. of Contractor Employee Accidents With/Without Lost Time (No. of employees) 1 Accidents without lost time Accidents with lost time (FY) (FY) Frequency Rate 1 of Lost Time and Accident Severity Rate 2 for Employees of and Related Companies Calendar year Frequency rate Severity rate Entire Group ( and related companies in Japan and abroad) : Frequency Rate: No. of accidents Total No. of working hours 1,, 2: Severity Rate: No. of days lost Total No. of working hours 1, Frequency Rate of Lost time and Accident Severity Rate of Contractor Employee Entire Group Corporation Group Companies ( and related companies in Japan and abroad) Corporation Group Companies Calendar year Frequency rate Severity rate Efforts at Singapore Co., (Pte) Ltd. Singapore is undertaking the same zero accident activities as in Japan. Kicked off on August 5, 25, every employee is involved in expanding safety activities. They also publish a zero accident newspaper to raise safety awareness and have embarked on risk assessment activities as well. Zero accident newspaper at Singapore Co., (Pte) Ltd. 27

29 Efforts at Tochigi Corporation Tochigi implements kiken yochi (risk locating) training (KYT) using videos. Potential dangers during work are envisioned and every aspect of the production of these videos, from scenariowriting to direction, performance, filming and editing, is handled by company workers themselves. The employees find both enjoyment and motivation in conducting the various aspects of editing, including the addition of sound effects, and KYT activities are invigorated as a result. In addition, by creating and performing themselves, hazard identification and review have become easier for employees. Over 5 types of videos have been created and they are shown continuously in the break room as well as being used for discussions. Efforts will continue towards zero occupational accidents through KYT and the use of videos. Efforts for Mental Health recognizes that care on the part of management and supervisors is important for mental health, so we began case study training for managers in 26, and some 15 people participated. Participants discuss situations that they might encounter, such as the importance of the early detection of problems and how to deal with employees on leave of absence. Continuing from fiscal 25, about 45 non-managerial employees, including temporary personnel, received conversation practice training for the improvement of communication skills. In fiscal 27, we plan to continue case study training for managers at as well as at domestic group companies. Environmental Protection Efforts Basic Policies & Management System Mental health education Experience-based Learning to Raise Sensitivity to Danger In recent years, many people who have never experienced injury or other incident have joined our companies, and they have few opportunities to sense directly how fearful and catastrophic workplace disasters can be. Therefore, we implement experiencebased learning with the goal of enabling them to associate their imitative experiences with their behavior to avoid injury, along with making them aware of the numerous dangers latent in the workplace. In experience-based learning, we create conditions that imitate the occurrence of accidents, and have participants directly experience the corresponding fright in order to increase their sensitivity to danger. In fiscal 26, 627 and group company employees received training in this program at our Takasago Plant. Our Kashima plant also involves young workers, who have little workplace experience, in experience-based learning, using the plant itself as well as outside facilities. In fiscal 26, about 1 people participated in classes with five themes, including the hazards of flammable gases and liquids. Participants offered various thoughts, including, for example, I d like to understand the dangers of combustion and explosion so I can work more safely. Observation of an object pulled into a belt Hands-on lesson with splashed liquids Efforts for Society Initiatives of Group Companies Feeling static electricity 28

30 Efforts for Society Nurturing and Utilizing Human Resources and Creating Comfortable Work Environments At, we believe that people are the greatest resource in business and that the growth of our employees leads to the growth of our companies. Human Resource Cultivation believes that the three elements shown in the diagram at right are necessary in order to allow people to grow and that we can stimulate human development by suitably combining them. Specifically, prepares various educational programs and materials that employees can choose from to satisfy their motivation for self-development, such as educational training (both for employees in general and for experts), a voluntary career development support system (incentives for qualification acquisition, correspondence courses, and a video library), etc. OJT OFF JT Human development SD Offsite job training: training courses and other capability development opportunities that occur away from the workplace (OFF-JT) On-the-job-training: development of capabilities through work (OJT) Self-development: independent development of capabilities using in-house systems (SD) Support for Independent Career Formation and Life Design Support Programs for Career and Life Development We are implementing two educational programs, the My Plan 4 program for employees in their early 4s and the My Plan 5 program for employees in their early 5s. These programs help participants design their own careers and life plans by presenting them with information on s welfare system and having them review their career history. As a part of this program, we provide a Refreshment Holiday System for all employees in their early 4s and early 5s. For employees nearing retirement, My Plan 6 is designed to fuel their motivation as they prepare to challenge a new stage in their lives, providing information about retirement allowances, pensions and related items. Since these programs were revised in fiscal 26, the learning sessions have covered 234 participants. Technology Promotion Scholarship Fund offers support for our employees who actively seek to learn and raise their work expertise. For example, we provide employees who meet examination standards the opportunities for overseas study and visits to overseas enterprises or research institutions. We also commend employees for outstanding research results every year. In fiscal 26, two researchers studied abroad at universities in the USA and the UK, and six manufacturing personnel visited Chinese enterprises. In addition, we also presented commendations for excellence in research achievements. Efforts to Support a Balance between Work and Home Childcare As well as childcare support systems established by law, we have incorporated a system that allows the use of a combination of our shorter working hours system, flextime work system, and no overtime system. In fiscal 26, we expanded the reduced work time allowances from employees who are raising children up to the age of 3 to employees who are raising children that have not yet entered elementary school. Furthermore, our childcare leave time system was greatly revised, and it now unconditionally applies until the child is 18 months old. In fiscal 26, 6 people used our shorter working hours system and 13 used our childcare leave system. In the future, we will continue to work actively to create an environment that allows employees to balance work and childcare. Family Care s family care leave system exceeds legal requirements, making possible a total of one year of leave, along with providing a family care relief allowance for six months during that leave. Employees who do not opt for family care leave can also use our flex work and other systems for adaptable work hours. Two people utilized the family care system in fiscal 26. Reemployment System Starting in fiscal 26, we have newly started a Senior Reemployment System and a Senior Appointment System for people who have reached retirement age. This is not only in response to the Revised Law Concerning Stabilization of Employment of Older Persons, but to ensure that we can keep our core human resources. By implementing a system that allows a choice of full-time work or part-time work, we can achieve the transmission of the technical expertise of our veteran staff, while allowing diverse ways of working that meet their individual life designs. 29

31 Efforts in Respect for Human Rights Fundamental Approach Beginning with healthy and safe workplace environments, respects the characters and personalities of employees, and encourages them to develop and demonstrate their capabilities in their work. Basic Policies & Management System Human Rights Education Protection of Personal Information conducts the following education and awareness programs regarding respect for human rights when people are hired or promoted. Anti-Sexual Harassment Measures makes it clear in our Rules of Employment and Compliance Guidebook that sexual harassment is socially unacceptable and a problem for the entire company that infringes on individual employees rights and harms the work environment. In order to maintain a sexual harassment-free workplace, employees receive education when they are hired or promoted and are reminded regularly by awareness-raising messages through our intranet. Each head office and plant also provides consultation services as a preventive measure, which will also assist in prompt action should a case of sexual harassment arise. As the demand for the appropriate handling of personal information on customers and employees continues to grow, we created an Information Security Guidebook in fiscal 26 with specific examples that show the importance of information security, personal information protection, and precautions in computer use, and we distributed this guide to all domestic Group employees. We also implement information security education during new personnel training and in training for employees who have been promoted. We also implement the same type of education for midcareer hirees, among other efforts to continuously raise the level of personal information protection and information security. Environmental Protection Efforts Participation in External Training Courses We send employees to outside human rights training courses and conferences sponsored by local governments and others in order to raise our awareness towards human rights. Education for Managers In training that is provided at the time of promotion to a managerial position, we invite experts in human rights education, and we create curriculums that help each trainee become well aware of their responsibilities as a manager and, for example, develop a counseling mindset through role-playing. As encouragement for us in continuing our efforts in this program, many of the managers expressed their thoughts after the training that the instruction was very specific and they could apply what they had learned to their workplace instantly. Hiring of Handicapped Persons Always respectful of the concept of normalization, the idea that it is normal for everyone to work and live together, promotes hiring the handicapped according to a systematic plan, in which we are striving to employ and keep them as employees by identifying potential workplaces and providing appropriate consultation services. As a result of our effort in the 26 fiscal year, s employment rate of the handicapped reached 1.8%, which is the statutory rate. We will continue to make even further efforts to increase the employment rate of the handicapped as well as help them to develop their capabilities and adapt themselves to workplace environments by, for example, having the person in charge be qualified as a Vocational Life Consultant for the Disabled at each plant that employs five or more handicapped persons. Efforts for Society Initiatives of Group Companies 3

32 Initiatives of Group Companies Hokkaido Co., Ltd. <Major products> Extruded polystyrene foam, PVC sashes <Address> 13-1 Enami, Eniwa City, Hokkaido Since Hokkaido Co., Ltd. was founded in 1973, two products have become the foundation of our business and are widely used by consumers in Hokkaido. Our Kanelite Foam is a polystyrene foam board that provides excellent insulation and waterproofing features that are indispensable for resisting the harsh winters of the region, and our Excel PVC sash windows have superior air-tight and insulation properties that are strong against wind, snow, freezing and condensation. At Hokkaido, we are focusing on the assurance of environmental protection and occupational safety. For environmental protection, we seek the recycling of waste products. With Kanelite Foam, in particular, we start with the recycling of defective and non-standard products and also recycle used fish containers, trays and similar foam polystyrene items collected from the community, and we have received Hokkaido Recycled Product Accreditation from the prefectural government. Furthermore, our recycling record has earned us a commendation from the Japan Expanded Polystyrene Recycling Association. For our Excel Window sashes, off-grade products are disassembled, broken apart, and pulverized, and all trimmings are pulverized as well. This is then resold as a valuable material. We are also implementing thorough categorized collection of non-industrial waste, and are also trying to convert this into valuable materials. We are converting to lighting apparatuses that conserve energy, turning off lights in areas where it is unnecessary, stopping car engines instead of idling, eliminating the unnecessary operation of machinery and equipment, managing summer and winter temperatures, and making other efforts to maximize our energy conservation. In addition, we are also working to acquire Eco-Action 21 certification through these types of activities. Towards occupational safety, we are promoting 5S and near-miss reporting in order to continue realizing operation that is free of accidents and disasters. Food Co., Ltd. <Major products> Margarine, fat spread, butter cream, flour paste, yogurt, processed cheese foods <Address> Takatsukadai, Nishi-ku, Kobe Food Co., Ltd., located in the Seishin Industrial Park in Nishi-ku, Kobe, is the production base for providing the processed oil and fat products, including margarine, custard cream, chocolate cream, cheese and yogurt, of s food product business to Western Japan. Founded in 1961, our company is noted for producing the largest amount of sheet margarine for baking pastries in the nation. In recent years, scandals at numerous food product manufacturers have caused much attention to be focused on food product safety and security. Under such circumstances, Food acquired ISO91 certification in 23 and we receive food product safety audits by the American Institute of Baking (AIB) every year as a part of our efforts to create a safe and reliable production workplace. Led by our safety and health committee, we are advancing near-miss reporting and KYT activities in order to eliminate occupational accidents. The number of complaints and claims has dropped rapidly, and we have succeeded in achieving zero accidents. In this manner, we have established rules to guarantee food safety and reliability and have installed equipment for safety. In the future, we will seek to further eliminate problems caused by teamwork failure, lack of product knowledge, and other human errors, and even work to raise communication among employees to a more vigorous level. Through employee education, we will seek to raise the level of safety and security awareness and to achieve zero complaints and claims and zero accidents and disasters as we steadily produce reliable and safe products. Kanto Styrene Co., Ltd. <Major products> Polystyrene foam containers, housing and building materials, insulation materials for residential equipment, buffering materials for home appliances <Address> Yana, Oyama City, Tochigi Pref. Kanto Styrene Co., Ltd., founded in April 1966, is now in its 42nd year. At present, we have two bases the Head Office and Oyama Plant in Oyama City (Tochigi Prefecture) and the Ojima Plant in Ota City (Gunma Prefecture) where we undertake the manufacture and sales of molded styrene foam products. Our three principal sales fields are housing and architectural materials, including insulation materials for residential equipment, buffering materials for LCD TVs and other home appliances, and chilled transportation containers for food product companies. In February 24, we acquired the international standard ISO91 quality management certification, and our 74 executives and employees cooperatively conduct our business activities in keeping with our corporate principle, which is to contribute to society by providing products and services that are leaders in their times. We place efforts on environmental protection as one of our most important management issues and, in April 2, we established concrete environmental objectives. As we seek to become a plant that harmonizes with the environment to coexist with nature, both of our plants have received intermediate disposal approval for industrial waste products. We have also established a collection and recycling facility for used molded styrene foam products, called Epsy Plaza, contributing to increasing the recycling rate. Furthermore, we are currently working to acquire Eco-Action 21 certification. Regarding occupational safety and health, we are cooperatively conducting continuous improvement activities with the other 32 companies in the same industrial park community in order to seek zero occupational accidents. We are also undertaking activities to build cooperation and solidarity with the local community and society. As a member of the Group, our entire company will continue to work to confirm thorough compliance and intensify risk assessment activities. 31

33 Showa Kaseikogyo Co., Ltd. Showa Kaseikogyo Co., Ltd., established in 1956, became a group company in Among other products, we manufacture polyvinyl chloride compounds and olefin polymer compounds for electrical wire insulation, and hold the largest share of the polyvinyl chloride compound market in Japan. Lead stabilizers had conventionally been used in the polyvinyl chloride compounds in electrical wire insulation, but the influence of the recent RoHS Directive and other rules has strengthened demands for compounds that do not contain lead. In response, we have been developing lead-free products and are steadily taking actions such as the separation of production lines. We also produce polyvinyl chloride compounds for medical uses. The plant for producing these Belgium N.V. Belgium N.V. has grown steadily larger since it was founded in 197 in the Antwerp province of Belgium, an area that is famous worldwide as a region with numerous chemical enterprises. To conduct business in Europe, where there is strong concern about the environment and safety, Responsible Care efforts are indispensable, so we are undertaking the following types of activities. For the environment and safety, we have joined the active efforts of Europe as a whole to reduce greenhouse gases. We reduced CO2 emissions by about 7,7 metric tons in the two years from 25 to 26 by replacing old equipment, improving the efficiency of plant operation and other measures. In order to meet the strict European chemical substance <Major products> Soft and hard polyvinyl chloride compounds, polyolefin compounds <Address> Komatsudai, Hanyu City, Saitama Pref. <Major products> MBS resin, foam polyolefin resin, modified silicone resin <Headquarters> Brussels <Plant> Westerlo-Oevel products is isolated from others, and we are otherwise attentive to product inspections as we strive to assure safety. Regarding occupational safety and health activities, we make efforts to improve the environment of workplaces that handle lead compounds, implementing work environment measurements and health checks, and we have been able to maintain trouble-free conditions. We are also focusing on safety education with the goal of realizing 1 days without occupational accidents. Believing that a safe workplace begins with a neat workplace, every week we conduct a 5S patrol, and we seek to realize workplace environments where employees can undertake their work with ease. For environmental protection, we are planning to acquire ISO141 certification in the fall of 27 and are advancing related work. At present, we are working to achieve energy conservation in product distribution by optimizing production locations and taking other measures. In the future, we will endeavor to further improve our conservation of energy and resources. regulations for product safety, which are exemplified by the REACH regulations, we cooperate with industry organizations, Japanese chemical enterprises operating in Europe, and others, in order to gather accurate information. At the same time, we also work closely with the Head Office in the operation of a product safety promotion system. Regarding occupational safety, members of our top management regularly patrol workplaces and, by providing thorough safety training for employees, as of the end of May 27 we have completed 1363 days without a lost-time accident. We are continuing these efforts to remain accident-free. Furthermore, we established a compliance committee in 25 and we also regularly check the status of our compliance with environmental safety regulations. We are deeply aware that we cannot achieve growth or development in Europe without sincere attention to protecting the environment, and we will focus even more of our efforts on the reduction of greenhouse gases and on compliance with the RoHS and EuP directives, REACH regulations, and the other strict European environmental rules. Basic Policies & Management System Environmental Protection Efforts Efforts for Society HiHua Fiber Co., Ltd. <Major products> Protein fiber <Location> Qingdao Economic and Technical Development Area, Shandong, China HiHua Fiber Co., Ltd. was established in September 23 in the Qingdao Economic & Technical Development Area in China, and began production of protein fibers in June 25. Qingdao, the city where we are located, is both the center of economic activity in Shandong Province and one of China s famous cities for resorts and tourism. As the host of yacht races of the 28 Beijing Olympics, it is also the only other city in China to host events, and it is thus focusing on environmental problems. The main raw material for protein fiber, which is what we produce, comes from biological sources, so sufficient countermeasures are necessary regarding wastewater treatment, odors, and other issues. However, since we are the very first to make this product as a business, there is no model of a similar plant anywhere in the world, let alone within the Group. Therefore, we are forced to handle these matters using our own devices. Facing these conditions and regulatory values that are extremely strict, particularly for wastewater, which we discharge directly into the ocean, we have so far consistently cleared the national regulatory values as well as maintained odors at a level that presents no problems. Having only been established recently, up to this point we have directed all our strength on meeting the regulated environmental values, but we are planning to focus on cutting the amounts of utilities that we use in the future in order to further reduce the environmental impact. We will also put greater energy into maintaining a record free from accidents and disasters, which is the foundation of the manufacturing business. Initiatives of Group Companies 32

34 Scope of the Report ( Corporation and all 36 group manufacturing companies) KANEKA CORPORATION Osaka Head Office/Tokyo Head Office/ Nagoya Sales Office Takasago Plant Manufacturing of caustic soda, vinyl chloride monomer, PVC resins, EPS resins, MBS resins, modified silicon polymers, acrylic synthetic fibers, pharmaceutical bulk/intermediates, functional food ingredients, bakery yeast, margarine, shortening Osaka Plant Manufacturing of extruded polystyrene foam boards, polystyrene foam sheet, molded items of expanded polyolefin by beads method, soft PVC compounds, PET resin for molding purposes, medical equipment (blood plasma and blood purification devices), heat resistant PVC resins Shiga Plant Manufacturing of ultra heat-resistant polyimide film, optical film Kashima Plant Manufacturing of PVC resins, EPS resins, extruded polystyrene foam boards, expanded polyolefin by beads method, end-reactive polyisobutylene oligomer Domestic group companies (26 companies) Showa Kaseikogyo Co., Ltd. (Hanyu City, Saitama) Manufacturing and sales of PVC and polyolefin compounds Tatsuta Chemical Co., Ltd. (Taito-ku, Tokyo) Molding and sales of PVC and PP resin Sanwa Kaseikogyo Co., Ltd. (Mooka City, Tochigi) Processing and sales of plastic products Hokkaido Kane Pearl Co., Ltd. (Eniwa City, Hokkaido) Manufacturing and sales of plastic products Shibetsu Kasei Co., Ltd. (Shibetsu-gun, Hokkaido) Manufacturing of plastic products Monbetsu Kasei Co., Ltd. (Monbetsu City, Hokkaido) Manufacturing of plastic products Koto Co., Ltd. (Kayabe-gun, Hokkaido) Manufacturing of plastic products Tsukasa Co., Ltd. (Kamikita-gun, Aomori) Manufacturing of plastic products Miyagi Jushi Corp. (Osaki City, Miyagi) Manufacturing of plastic products Kitaura Jushi Kogyo Co., Ltd. (Fukaya City, Saitama) Manufacturing of plastic products Kanto Styrene Co., Ltd. (Oyama City, Tochigi) Manufacturing and sales of plastic products Toyo Styrol Co., Ltd. (Yokkaichi City, Mie) Manufacturing of plastic products Cosmo Kasei Co., Ltd. (Kitamuro-gun, Mie) Manufacturing of plastic products Hanepack Co., Ltd. (Kanzaki City, Saga) Manufacturing of plastic products Sunpolymer Corp. (Hasuda City, Saitama) Manufacturing and sales of plastic products Kyushu Kanelite Co., Ltd. (Chikugo City, Fukuoka) Manufacturing of plastic products Hokkaido Co., Ltd. (Eniwa City, Hokkaido) Manufacturing and sales of plastic products Tokyo Food Co., Ltd. (Iruma-gun, Saitama) Manufacturing of oil and fats Food Co., Ltd. (Kobe City, Hyogo) Manufacturing of oil and fats Taiyo Yushi Co., Ltd. (Yokohama City, Kanagawa) Manufacturing and sales of oil and fats Nagashimashokuhin Co., Ltd. (Kuwana City, Mie) Manufacturing of foodstuffs and frozen dough Sun Spice Co., Ltd. (Yodogawa-ku, Osaka) Manufacturing and sales of spices Medix Co., Ltd. (Kita-ku, Osaka) Manufacturing and sales of medical devices Osaka Synthetic Chemical Laboratories, Inc. (Nishinomiya City, Hyogo) Manufacturing and sales of raw materials for pharmaceuticals and pharmaceutical intermediates, and food additives Tochigi Corporation (Mooka City, Tochigi) Manufacturing and sales of plastic products and electrical materials Solar-tech Co., Ltd. (Toyooka City, Hyogo) Manufacturing of solar cells Overseas group companies (1 companies) Belgium N.V. Manufacturing and sales of specialty resins and plastic products Texas Corp. Manufacturing and sales of specialty resins, plastic products and electrical materials Nutrients L.P. (U.S.A.) Manufacturing and sales of functional food Singapore Co., (Pte) Ltd. Manufacturing and sales of pharmaceutical intermediates (Malaysia) Sdn. Bhd. Manufacturing and sales of specialty resins Electec Sdn. Bhd. (Malaysia) Manufacturing and sales of magnet wires Eperan Sdn. Bhd. (Malaysia) Manufacturing and sales of plastic products Paste Polymers Sdn. Bhd. (Malaysia) Manufacturing and sales of paste resin Eperan (Suzhou) Co., Ltd. (China) Manufacturing and sales of plastic products HiHua Fiber Co., Ltd. (China) Manufacturing and sales of protein fibers 33

35 Third Party Verification (Responsible Care Verification) 34