OSAKA SODA REPORT 2016 · specialty chemicals 1. Earning power Strengthen high-value added specialty chemicals 2. Growth potential Engage in businesses that can compete in markets

December 2016

OSAKA SODA CO., LTD.Administration Division

1-12-18, Awaza, Nishi-ku, Osaka 550-0011, JapanTelephone: +81-6-6110-1560

　　　　　　　　 Facsimile : +81-6-6110-1603

http://www.osaka-soda.co.jp

OSAKA SODA REPORT 2016

02

Net Sales

Earnings per Share/ Dividend per Share (Annual)

Return on Equity (ROE)

Production Volume/CO2 Emissions

Operating Income/Ordinary Income/Net Income

Total Assets/Net Assets/Shareholder's Equity Ratio

Energy Consumption (Crude Oil Equivalent)

Recycling and Reuse Rate

120,000

100,000

80,000

60,000

40,000

20,000

0

82,489 83,14991,621

101,365

2011 2012 2013 2014

102,125

2015

（Millions of yen）

（FY）

50

40

30

20

10

07.00 7.00 7.00 8.00

18.41

27.41 28.7632.75

2011 2012 2013 2014

10.00

34.23

2015

Earnings per share (EPS)Dividend per share (annual)

（FY）

（Yen）

8

7

6

0

5.7

7.97.6

7.77.5

（％）

2011 2012 2013 2014 2015（FY）

800

600

400

200

0

400

300

200

100

0

23.025.4 27.2 27.4

638596 570 579

27.5601

2011 2012 2013 2014 2015

Production volume CO2 emissions（1,000t） （1,000t）

（FY）

8,000

6,000

4,000

2,000

0

1,940

2,888 3,0293,450 3,606※

4,2465,025 5,241

5,7476,443

4,0824,538 4,751

5,172

6,439

2011 2012 2013 2014 2015

（Millions of yen）

（FY）

Operating incomeOrdinary incomeNet income

100,000

75,000

50,000

25,000

0

55

50

45

40

0

34,843 38,246 41,61547,704

67,67776,804

84,326100,893

51.4

49.7 49.3

47.348,296

97,027

49.8

（％）

2011 2012 2013 2014 2015

（Millions of yen）

（FY）

Total assets Net assets Shareholder'sequity ratio

150

100

50

0

124 117109 109 111

2011 2012 2013 2014 2015

（1,000kL）

（FY）

100

90

80

0

84 84

8991

93

2011 2012 2013 2014 2015

（％）

（FY）

Something Better with Chemicals for Society and the Future

The OSAKA SODA Group was founded with the establishment of unique electrolysis technology in 1915, and since then has contributed to the development of Japan's chemical industry as a pioneer in the alkali industry. Throughout the more than 100-year history of our Group, we have responded to the ever-changing needs of the day and expanded our scope of business in the fields of basic chemical products, functional chemical products, electrodes, fine chemicals, healthcare, biotechnology, and the environment. We have now set “Be a company growing by business expansion of specialty chemicals” as our Group Vision as we aim for corporate growth. The Group will create new value and contribute to the realization of a more affluent society through its business activities.

Editorial Policy:This OSAKA SODA Report comprehensively covers the strengths of the Group's business, growth strategy, performance, environmental preservation, quality assurance and other information with the objective of reporting the overall picture of our environmental safety efforts and business activities to all of our stakeholders in a way that is easy to understand. Through this report, we look forward to an even deeper understanding of the Group's business activities, which will pave the way to future initiatives aimed at the realization of a sustainable society.

Reporting Period: Fiscal 2015 (April 1, 2015 – March 31, 2016)Data on industrial accidents is collated on a calendar year basis.

Reporting Entities:　OSAKA SODA CO., LTD. and our subsidiariesFinancial data is on a consolidated basis. Environmental data covers all sites of OSAKA SODA CO., LTD., the Mizushima Plant of OKAYAMA CHEMICAL CO., LTD., and the Matsuyama Plant of SANYO FINE CO., LTD.

Financial Highlights (consolidated)/Non-Financial Highlights

Table of Contents

● Financial Highlights (consolidated)/ Non-Financial Highlights

● To our stakeholders

● Business transformation

● Business characteristics

● Medium-term management plan

● Corporate governance

● Compliance system

● Responsible care

● Environmental conservation activities

● Quality assurance

● Corporate information / Stock information

P02

P03P05P07P08P09P10P10P12

P13P14

MissionStatement

To realize an affluent society bydeveloping innovative products throughour aspirations for high standards

CorporateSlogan

Something Better with Chemicals

GroupVision

Be a company growing by business expansion ofspecialty chemicals1. Earning power Strengthen high-value added specialty chemicals2. Growth potential Engage in businesses that can compete in markets with a high growth potential3. Technology Develop original technologies with the frontier spirit4. Strategic investments Promote strategic investments based on stable financial base5. A corporate culture that embraces challenges Develop human capital with courage, passion, creativity, and energy

Japanese Subsidiaries・DAISO CHEMICAL CO., LTD.・DAISO ENGINEERING CO., LTD.・SANYO FINE CO., LTD.・JMR CO., LTD.・DS LOGISTICS CO., LTD.・OKAYAMA CHEMICAL CO., LTD.・DS WELLFOODS CO., LTD.＊　　　　　　　　　　　　＊Non-consolidated

Overseas Subsidiaries・DAISO CHEMICAL(Shanghai) CO., LTD.・TAIWAN DAISO CHEMICAL CO., LTD.・DAISO Fine Chem USA, Inc.・DAISO Fine Chem GmbH・DAISO CHEMICAL(THAILAND) CO., LTD.

※ Forecast for net income attributable to shareholders of the parent company

03 04

We aspire to remain a company that contributes tothe world with unique and innovative technological capabilities.

To our stakeholders

Supporting the development of industry through developing innovative productsWe used unique technology to develop a method for manufacturing caustic soda through electrolysis, then the most advanced technology in the world, and founded the Company in 1915. Through this, we set a path for domestic production of caustic soda, supporting the dawn of many industries by stably supplying raw materials to the paper manufacturing and textile industries, which at that time were becoming the key industries of the nation. Since that time, we have expanded our business into basic chemical products that include chlor-alkali, allyl chloride and epichlorohydrin based on the electrolysis business. We have also advanced into functional chemical products such as synthetic resins and synthetic rubber, as well as healthcare-related products, such as active pharmaceutical ingredients and their intermediates and purification materials. The OSAKA SODA Group has always promoted technological development that values innovation in order to respond flexibly to the development of industry and the changing times. The products produced out of this have gained leading shares of the global market in niche sectors and have grown to play active roles in diverse industries, including the fields of automobiles, office automation, ink, and pharmaceuticals.

Aiming for a more affluent world by deepening global niche technologiesUnder our in-progress NEXT FRONTIER-100 medium-

term management plan, we are working to expand our business with a focus on global niche products with the aim of achieving our Group Vision, which is “Be a company growing by business expansion of specialty chemicals.” We have positioned creating new products and businesses, expanding the global business and cultivating the healthcare-related business as the top priorities among the basic policies of NEXT FRONTIER-100, and it is our goal to provide high value added products in even more fields. In particular, we are concentrating our efforts on developing new materials based on our unique technologies for the energy and environment sectors. We aspire to contribute to the creation of a sustainable society through technological innovation.

Initiatives to support the improvement of corporate valueAs “an enterprise friendly to both people and the environment,” we actively promote initiatives aimed at harmony with the global environment and local community, including responsible care activities as well as constant improvements to our corporate governance and compliance frameworks and human resource development. In particular, in addition to reducing CO2 emissions by using the hydrogen generated from soda electrolysis as energy, we are striving to reduce the environmental impact caused by our production activities, including promoting energy conservation and reducing industrial waste.

As a company engaged in manufacturing and handling chemical substances, we are also contributing to environmental conservation by providing environmentally conscious products and technologies, including the manufacture of CABRUSTM, an additive for low fuel consumption tires, and the development of resource recycling systems. Moreover, not only do we take part in responsible care activities that include product safety and quality assurance, customer response, chemical substance management, occupational safety and health and accident prevention, and logistics safety, but we also strive to deepen mutual communication with local communities to enable us to contribute to sustainable societies. By maintaining and improving the initiatives featured in this report, we not only aspire to be a corporate group trusted by the community but also one that is expected to grow. In order to achieve that, we will work to meet the expectations of diverse stakeholders, including shareholders and local communities, and improve corporate value by continuing to pursue challenges as a company with true energy and innovative capability. I ask you all for your continued support and encouragement.

October 2016Tamotsu SatoRepresentative Director,Chief Executive OfficerOSAKA SODA CO., LTD.

From 1913～Company founding and establishment of

corporate platform

From 1960～

Entry into organic chemicals business

From 1970～

Construction of AC / EP chain

From 1990～

Taking on the challenge of new business domains (expansion into healthcare, energy and environment sectors)

100

80

60

40

20

0

（Billions of yen）

Basic Chemical Products Functional Chemical Products Healthcare

Other

Salt

Electricity

Caustic Soda

Chlorine Gas

Sodium Hypochlorite

Diallyl Phthalate (DAP) Resin

Electrodes

Material Recycling

Allyl Ethers

Hydrogen Gas

Caustic Potash

Sodium Chlorate Sodium Chlorite

Propylene

Chlor-Alkali

AC / EP Derivatives

Polysulfide Silane Coupling Agent

Silica Gel for Liquid Chromatography

Decorative Laminated Material

Optically Active Compounds

Active Pharmaceutical Ingredientsand their Intermediates

Health Food Ingredients

Net sales

ElectrolysisTechnology

（AC）

（EP）Hydrochloric Acid

Allyl Chloride

AC / EP Chain: Foundation ofInnovative Product Development

2015100th

anniversary ofestablishment

2014Net sales￥100 billion

Epichlorohydrin

Epichlorohydrin Rubber

：Global Niche Top (GNT) products

05 06

Developing innovative products.The needs of society and industry change constantly, and we respond to those needs, creating new value.

Business transformation

1915Established OSAKA SODA CO., LTD. in Osaka forthe manufacture and sale of caustic soda

1913Established fi rst-in-Japan manufacturing method for caustic soda using electrolysis based on original technology

1961Opened Research CenterStarted production of allyl chloride

1962Started production of diallyl phthalate(DAP) resin

1978Started production of allyl ethers

1979Started production ofepichlorohydrin rubber

1971Opened Mizushima PlantStarted production of epichlorohydrin

1917Opened Kokura Plant

1931Opened Amagasaki Plant

1949Listed on the First Section of the Osaka Stock Exchange

1952Opened Matsuyama Plant

1953Listed on the First Section of the Tokyo Stock Exchange

1988Changed the company name toDAISO CO., LTD.

1990Opened Düsseldorf Representative Offi ce

1992Started production of CABRUSTM,a Polysulfi de Silane Coupling AgentStarted production of silica gel for liquid chromatography

2001Established JMR CO., LTD.

2005Established DAISO CHEMICAL (Shanghai) CO., LTD.

2006Established TAIWAN DAISO CHEMICAL CO., LTD.Established DAISO Fine Chem USA, Inc.

2008Established DAISO Fine Chem GmbHAcquired all the shares of SANYO FINE CO., LTD.

2014Selected among Global Niche Top Companies Selection 100 by Ministry of Economy, Trade and Industry for diallyl phthalate (DAP) resin

2012Established DAISO CHEMICAL (THAILAND) CO., LTD.

2015Changed the company name to OSAKA SODA CO., LTD.

07 08

Business characteristics Medium-term management plan：NEXT FRONTIER-100（FY2014 ～ FY2018）

Since April 2014, we have been working on our five-year medium-term management plan, with fiscal 2018 as its final year, which sets, “Be a company growing by business expansion of specialty chemicals” as the Group Vision.

Our Company has achieved quality and cost optimization through full in-house production from basic chemical products to functional chemicals making use of the electrolysis business. In particular, the highly original products which we manufacture using AC and EP as raw materials have acquired No. 1 shares in the global market. Through our pursuit of a competitive edge in the electrolysis business, our basic chemical products deliver competitiveness both in terms of cost and quality as raw materials for our functional chemical products. Meanwhile, demand for our functional chemical products is expanding due to active development of applications into fields with high growth potential, thus contributing to the expansion of our basic chemical products business. In this way, we have built a business model that seeks growth through synergies between both the basic chemicals products and the functional chemicals products businesses.

Overview of our NEXT FRONTIER-100 medium-term management plan

Stage1（FY2014～FY2015）

Stage2（FY2016～FY2018）

GroupVision

Be a company growing by business expansion of specialty chemicals

Net Sales: ￥130 billion, Ordinary Income: ￥10 billion, ROE: 10% or higher

Group Vision

Fiscal 2018 goals

Basic policy

1 New products and new business creation

2 Overseas business expansion

3 Nurturing of the healthcare-related business

4 Restructuring and reinforcement of existing businesses

5 Promotion of strategic investment and reform of systems

Fiscal 2018 goals

1

2

3

New products and new business creation

Overseas business expansion

Nurturing of the healthcare-related business

Promote development of new products and new businesses centered on application themes for original technologies

Expand with a focus on global niche top products

Nurture healthcare-related business into a third pillar of profit

Ratio of newproduct sales

20%

Ratio ofoverseas sales

25%

Net sales

￥10billion

Energy and environment

Synthetic resin and Synthetic rubber

Silica Gel for Liquid Chromatography

Silica Gel for Liquid Chromatography

Health food ingredients

Life science

Allyl Ethers

APIs and their intermediates

Sterilization and disinfection agents

● New heat resistant rubber● Resins for plastic UV ink● Materials for power storage devices

● Synthetic resin: develop demand for UV ink in European, US and Asian markets● Synthetic rubber: promote response to expansion of demand in emerging countries and shift to local procurement

● Gain market share in Europe, US and Asia for pharmaceutical purification applications● Expand business through introduction of new grades and expansion into peripheral materials

● Develop new grades● Open up new pharmaceuticals purification field● Enter the column business

● Strengthen product planning

● Pharmaceutical purification materials● New APIs and their intermediates● Sterilization and disinfection products● Health food ingredients

● Expand share of use in silane coupling agents in the European and US markets

● Expand into generic pharmaceuticals● Acquire new active pharmaceutical ingredients and their intermediates by introducing specialized reaction equipment● Strengthen investigational drugs business

● Sterilization agents for large-scale facilities

The AC / EP chain is arguably the foundation of our innovative product development. Many of the products we manufacture using AC and EP deliver outstanding performance in physical properties including electrical insulation, semi-conductivity, heat resistance, oil resistance, and reactivity, and are not easily replaced with other materials. Their manufacture also requires specialized technologies and knowledge, making entry into the field difficult for competitors. As a result, our products have cemented No. 1 market share positions in Japan and overseas despite being niche products, securing stable demand and maintaining high value added.

Niche top products

Pursue top global competitivenessPursue top global competitiveness Active expansion intohigh-growth fieldsActive expansion intohigh-growth fields

Promotion of the Global NicheTop strategy

Diallyl Phthalate ResinEpichlorohydrin RubberAllyl Ethers

Functional Chemical ProductsFocus on structural reform to

enhance profitability

Electrolysis Business (caustic soda, chlorine, etc.)Allyl Chloride (AC)Epichlorohydrin (EP)

Basic Chemical Products

AC / EP Chain

Expand scale of business

Strengthen competitiveness

Diallyl Phthalate Resin

Polysulfide Silane Coupling Agent (CABRUSTM)

Epichlorohydrin Rubber

Electrodes

Allyl Ethers

Epichlorohydrin

Silica Gel for Liquid Chromatography

Sodium ChlorateSodium Chlorite

•UV inks•Hot stamping•Electronic components

•Low fuel consumption tires

•Heat-resistant and oil-resistant hoses for automobiles•Rubber rolls for OA equipment

•Thin steel plated sheets for the housing of consumer electronics, etc.

•Silane coupling agents•High-grade metal coatings•Carbon fiber reinforcement

•Semi-conductors, laminated boards, anti-rust coatings

•Precision analytical instruments•Purification materials for pharmaceutical products

•Bleach for paper, pulp and textiles

No. 1in the world

No. 1in the world

No. 1in the world

No. 1in the world

NEXT FRONTIER-100

Silica gel for pharmaceutical purificationHigh polymer gel electrolytes

Overview of the AC / EP Chain

No. 1in Japan

No. 1in Japan

No. 1in Japan

No. 1in Japan

What Is Responsible Care?Responsible Care (RC) is a voluntary management initiative taken by companies engaged in the manufacture or handling of chemical substances for implementing improvements and procedures in support of health, safety and environmental protection. Through this initiative, management policies are adopted to protect the environment and uphold safety over the entire product life cycle of chemical substances from development to manufacture, distribution, use, fi nal consumption, and disposal. This approach is based on the principles of self-direction and acceptance of responsibility. In April 2003, the Representative Director, Chief Executive Offi cer, the most senior member of the management team, made a declaration of the Company’s basic policy on Responsible Care.

Basic Approach of Responsible Care● While strictly complying with relevant laws and regulations, OSAKA SODA shall make continuous progress

with voluntary management initiatives by setting voluntary criteria related to integrated safety management of chemical substances in keeping with the spirit of Responsible Care.

● We shall develop and maintain this management system. All directors and employees shall act with purpose and address targets indicated by our policies.

● We shall expand our public communication eff orts and strive to gain further public trust.● We shall provide training and education for practical application and better understanding of our policies.

Responsible Care Policies１．Environmental Preservation

（１）Promoting environmental preservation by ensuring harmony withthe natural environment

（２）Taking steps to reduce environmental impacts during the developmentof products and processes while promoting conservation of energy andresources

（３）Communicating to maintain harmony with the local community whileseeking conservation and improvement of the living environment

２．Process Safety and Disaster Prevention（１）Prevention of accidents and disasters（２）Maintaining a crisis management system（３）Implementing thorough management of high-pressure gases and

hazardous materials and the like（４）Implementing process safety controls for facilities and equipment

３．Occupational Safety and Health（１）Eliminating work accidents（２）Enhancing and improving the work environment（３）Taking steps to maintain and promote good health

４．Distribution Safety（１）Ensuring the safety of product transport by strictly complying with legal

and other requirements（２）Reducing safety risks during the product transport and distribution stages

５．Quality Assurance and Chemical & Product Safety（１）Providing customers with excellent products according to our

mission statement（２）Ensuring product safety, quality assurance, and the safety of the chemicals

we handle based on appropriate Responsible Care, quality andenvironmental management systems

（３）Reducing costs while placing a priority on quality６．Dialogue with the Public

（１）Reporting our Responsible Care activities and other initiatives torelevant groups and organizations.

（２）Proactively engaging in dialogues and activities with local communities.After implementing our RC activities, we offi cially announced this policyboth inside and outside the company.

09 10

【Organizational Structure of Responsible Care】

RC CommitteeRC Promotion Conference

（２）Ensuring product safety, quality assurance, and the safety of the chemicals

RC CommitteeRC Promotion Conference

Review of plan and incorporationof changes in the plan for thesubsequent fiscal year accordingto the RC action report and

legal requirements

RC Internal AuditISO Internal AuditRC Internal AuditISO Internal Audit

Audit and report on RC actionstatus

CEO

RC CommitteeChairman: Director Responsible for RCMembers: Divisional managers, general manager of labor unionOffice: RC & Quality Assurance Department

Plant RC Committee(Occupational Safety & Health and ProcessSafety & Disaster Prevention Committee)Chairman: General Manager of workplace

RC Internal AuditISO Internal Audit

Serious Accident PreventionFollow-up

RC PromotionConference

Reports

Reports& Proposes

Instructs

Instructs& Promotes

Reports

Checks

We are continuously improving our RC activities ̶ including OccupationalSafety & Health and Process Safety & Disaster Prevention ̶ by adoptingthe PDCA cycle.

RC CommitteePlant RC Committee

Chairman: General Manager of workplace

We are continuously improving our RC activities ̶ including OccSafety & Health and Process Safety & Disaster Prevention ̶ by athe PDCA cycle.

RC CommitteePlant RC Committee

RC targets and measures for thefiscal year and adoption of the RC

action planAdoption of the RC action plan

at workplaces

Plants

We are continuously improving our RC activities ̶ including OccupationalSafety & Health and Process Safety & Disaster Prevention ̶ by adopting

PlantsActivities based on the RCaction plan and campaigns toprevent serious accidents

ACTIONCHECK

PLAN DO

The Company has established the Compliance Committee under the direct supervision of the Representative Director, Chief Executive Offi cer to create and maintain the compliance system. We have also established the Information Management Committee, the Fair Trade Management Committee, and the Trade Committee as expert committees to set up a system to handle specialist legal

issues. In addition, for the further enhancement of the compliance structure, we have set up a system to engage the services of lawyers as outside committee members for the Compliance Committee and the expert committees, whereby we seek legal opinions in an appropriate manner.

Corporate Governance

Compliance System

General Shareholders’ Meeting

Board of Directors

AccountingAuditor Representative Director,

Chief Executive Officer

Divisions Affiliated Companies

Board of Auditors

Internal Auditing Department

Management Committee

Compliance Committee(Internal Whistleblowing Helpdesk)

RC Committee

Quality Assurance Committee

Responsible Care: RC

Corporate governance/Compliance system/Responsible care

Basic ApproachOSAKA SODA considers it important to create and maintain an organizational structure that can be agile in responding to the management environment and a fair management system focused on shareholders. Moreover, as a company with a board of corporate auditors, we have introduced a management system that enables appropriate supervision and monitoring alongside good decision making by the directors and implementation of operations by the executive offi cers. By doing this, we are working to enhance our corporate governance and improve its eff ectiveness.

Board of DirectorsThe Board of Directors is composed of six directors, two of whom are outside directors. As a rule, it meets once a month to deliberate on important matters as well as discuss the progress of business performance and actions to be taken in accordance with the rules of procedure for the Board of Directors. In addition, we have made the term of offi ce for directors one year and introduced an executive offi cer system that allocates the management decision-making and the executive oversight functions to the Board of Directors and the implementation of operations to the executive offi cers. Our aim is effi cient corporate management and clarifi cation of responsibility.

Management CommitteeComposed mainly of directors, the Management Committee is an advisory body for the Representative Director. The Committee deliberates important issues in the performance of the duties of the directors, forming a structure under which decision making by the Representative Director is understood and implemented accurately.

Board of AuditorsThere are three auditors, two of whom are outside auditors. The auditors attend meetings of the Board of Directors in addition to actively participating in important internal company meetings, enabling them to supervise the execution of duties by the directors adequately.

Outside Directors and Outside AuditorsThe Company has appointed two outside directors and two outside auditors with the aim that they will perform the role of advising and supervising the Company’s management from an external perspective with an independent standpoint. Both of the outside directors have a wealth of experience as managers and extensive insight into the business world and one of them has worked as an outside auditor at the Company. They were appointed as outside directors in order to refl ect their experiences in the Company’s management. Both of the outside directors have been designated as independent offi cers. One of the two outside auditors has many years of experience in fi nancial institutions with a wealth of knowledge concerning fi nance and other areas and has been appointed as an outside auditor in order to refl ect this experience and knowledge in the auditing and supervision of the Company. As an attorney-at-law, the other outside auditor is well versed in corporate law with a considerable degree of legal knowledge concerning fi nance and accounting and has been appointed as an outside auditor and designated as an independent offi cer to refl ect this knowledge in the auditing and supervision of the Company.

Under our Group mission statement, which is “To realize an affl uent society by developing innovative products through our aspirations for high standards,” the OSAKA SODA Group's CSR entails striving to be able to contribute to a sustainable society through chemicals. Moreover, we not only engage in fair business activities based on our corporate governance and compliance frameworks but, as an enterprise that manufactures and handles chemical products, we also promote responsible care activities to implement CSR initiatives that take into account the concerns of diverse stakeholders. Our responsible care activities include environmental preservation, process safety and disaster prevention, occupational health and safety, and dialogue with the public. By introducing these activities in this report, we aim to enhance understanding of the OSAKA SODA Group and communication.

Corporate Governance System (as of June 29, 2016)

Targets and Results of Responsible Care Activities Material Balance of Production Activities

11 12

The chemical industry has adopted the goal of achieving an average energy consumption rate of 80% compared to the fi scal 1990 level for the period from fi scal 2008 to 2012; moreover, it has also voluntarily adopted environmental preservation activities on a global scale. And from fi scal 2013, the new plan “Commitment to a Low-Carbon Society” (from fi scal 2013 to 2020) has started. OSAKA SODA is taking steps to reduce its environmental impacts through initiatives to conserve energy, reduce wastes, and prevent global warming while strictly complying with legal and other requirements; moreover, we respond to emergencies in our business operations as one of our RC activities. Our three mainline plants (Amagasaki, Matsuyama and Mizushima) and affi liated companies have received ISO 14001 certifi cation, the international standard for environmental management systems, and are continuously adopting improvements.

Our production volume increased by 5% in fi scal 2015, compared to fi scal 2014, but water consumption increased by 11%. This was mainly because the product mix changed. Atmospheric emissions were the same as in the previous fi scal year with the appropriate operation of a boiler powered by alternative forms of energy such as hydrogen and city gas. The material balance resulting from our production activities during fi scal 2015 is shown below (data excludes Mizushima Plant of OKAYAMA CHEMICAL CO., LTD.).

RECYCLE

OUTPUT

INPUT

Water18,585 thousand t

Energy consumption(crude oil equivalent)111 thousand kl

Raw materials265 thousand t

Production of goods601 thousand t

Packingused for shipment*

200t

Packingvoluntarily collected

66t

OUTPUT

CO2275 thousand t

SOX0.35t

NOX24t

Ash dust1.37t

COD215t

Nitrogen69t

Phosphorus7t

Wastewater26,396 thousand t

Waste

PRTR

Total 24,529tLandfilled 1,679t

Released 41.2tTransferred 94.5t

*Packing used for shipment represents the weight ofthe paper bags, plastic bags, and polyester containersused as packaging materials for our products.

Targets for Fiscal 2016ISO 14001 Certifi cation

Environmental conservation activities

Targets for Fiscal 2015 Results for Fiscal 2015 Long-term Targets

EnvironmentalPreservation

Process SafetyandDisaster Prevention

Occupational Safetyand Health

DistributionSafety

Quality Assuranceand Chemical& Product Safety

Dialoguewith Society

・To ensure proper operation of environmental impact reduction equipment and to improve the recycling rate

・To reduce CO2 emissions and energy consumption to 80% or less of the fi scal 1990 level

・To promote ongoing measures to prevent serious accidents and disasters

・To eliminate work accidents

・To maintain safe transport and eliminate in-plant truck loading accidents

・To ensure stringent compliance with laws targeting chemical products

・To publish an RC activity report and submit it to the government and topromote communication with society

・CO2 emissions were100.8% comparedto the fi scal 1990 level.

・Signifi cantly impacted by the increase in the CO2 emission coeffi cient for electric power, the crude oil equivalent per unit ofconsumption (kl/t) was 87.2% of the fi scal 1990 level and 98.4% of the previous fi scal year.

・The achievement rate for implementingmeasures to prevent serious accidentswas approximately 100%.

・Number of work accidents in fi scal 2015: ten (four in the previous year), so a signifi cant increase, but eight were accidents with no lost worktime.

・Distribution accidents increased to nine (two in the previous year) despite implementation of measures to eliminate accidents.

・Appropriate procedures in accordance withREACH in Europe and regulation in other areas and countries about chemical products were carried out.

・Submitted reports to the governmentand to the Japan Chemical IndustryAssociation.

・To reduce environmental impacts during the development of products and processes while promoting conservation of energy and resources

・To seek harmony with the local community while preserving and improving the living environment

・To prevent accidents and disasters

・To maintain a crisis management system

・To implement stringent management of high-pressure gases and hazardous materials and the like

・To implement process safety controls for equipment

・To eliminate work accidents

・To enhance and improve the work environment

・To maintain and promote good health

・To ensure the safety of product transport by strictly complying with legal and other requirements

・To reduce safety risks during the product transport and distribution stages

・To provide our customers with excellent products according to our corporate philosophy

・To give top priority to chemical and product safety under our stringent RC, quality, and environmental management system

・To reduce costs while placing a priority on quality

・To respond appropriately to requests forinvestigations and to provide reports on ourbusiness operations

Environmental Preservation

Process Safety and Disaster Prevention

Occupational Safety and Health

Distribution Safety

Dialogue with Society

Quality Assurance and Chemical& Product Safety

To ensure proper operation of environmental impact reduction equipment, reduce environmental impact and improve the recycling rateTo improve energy consumption rate by 1% a year and reduce CO2 emissions. Also to reduce external landfi ll rate for industrial waste to 7% or lowerTo make eff orts to reduce CO2 emissions in line with chemical industry’s “Commitment to a Low-Carbon Society”

To continually promote measures against serious accidents and prevent accidents and disastersAlso to strengthen responses to emergencies

To eliminate work accidents (To introduce non-technical education and training aimed at zero accidents with lost worktime)

To maintain safe transport and eliminate in-plant truck loading accidents

To publish an RC activity report and submit it to the government and to promote communication with society

To ensure stringent compliance with laws targeting chemical products

Plant Date of Certifi cation Certifi er Registration Number

Amagasaki Plant

Matsuyama Plant (includes Matsuyama Plant of SANYO FINE CO., LTD.)

Mizushima Plant (includes Mizushima Plant of OKAYAMA CHEMICAL CO., LTD.)

DAISO ENGINEERING CO., LTD. (includes JMR CO., LTD.)

May 2001

June 2001

October 2000

May 2005

Japan Quality Assurance Organization

Japan Quality Assurance Organization

Japan Quality Assurance Organization

Japan Quality Assurance Organization

JQA － EM1558

JQA － EM1631

JQA － EM1051

JQA － EM4787

13 14

Quality Assurance Initiatives

Product Safety and Chemical Substance Management Initiatives

Quality assurance

Distribution by number of shareholdersFinancial instrumentsbusiness operators0.50%

Other corporations2.85%

Foreign corporations,etc.1.81%Individuals and others

94.25%

Financial Institutions0.59%

Distribution by number of shares

Financial institutions38.41%

Financial instrumentsbusiness operators0.99%

Other corporations30.39%

Foreign corporations,etc.

7.12%

Individualsand others23.09%

0

5,000

10,000

500

450

400

350

300

2014

321 654 87 9 1110 12 21 3

20162015

321 654 87 9 1110 12

Share price (￥) Trading volume (1,000 shares)

（Month）（Year）

As part of our RC activities, we take initiatives on safety and quality assurance for the chemicals and products in our business activities as well as to respond promptly to customer requirements and to prevent quality problems. Accordingly, our three main plants and an affiliated company have ISO 9001 certification, the international standard for quality management systems. As a part of ISO activities, each workplace conducts a management review to check customer satisfaction levels which are evaluated through the marketing department every six months in our efforts to enhance customer satisfaction through continuous improvements as we strive to provide products that satisfy our customers.

Plant Date of Certification Certifier Registration NumberAmagasaki Plant

Matsuyama Plant

Mizushima Plant

DAISO ENGINEERING CO., LTD.

March 1996October 1995

June 1994March 2015

Japan Quality Assurance Organization

Japan Quality Assurance Organization

Japan Quality Assurance Organization

Japan Quality Assurance Organization

JQA－ 1181JQA－ 0998JQA－ 0539JQA－ QMA15188

Amagasaki Plant Matsuyama Plant Mizushima Plant DAISO ENGINEERING CO., LTD.

ISO 9001 Certification

We operate a database in order to promptly respond to and correct quality problems such as complaints. By sharing the information in the database, we conduct company-wide horizontal deployment of corrective action to prevent the occurrence of similar quality problems.

Preventing Quality Problems

We have created safety data sheets (SDSs) for our products and published many of them on our website.

OSAKA SODA always makes efforts for substance management of our products and collection of information. We prepare Information Sheets on the Content of Certain Chemical Substances using OSAKA SODA’s own format to supplement our SDSs, as well as MSDSplus*1 from the Joint Article Management Promotion-consortium (JAMP) in order to respond to requests from customers regarding detailed information on the content of chemical substances, including RoHS*2 and SVHC*3 in addition to Japan’s Chemical Substance Control Law*4. We respond promptly to regular list revisions and provide the information to customers.*1 MSDSplus is a basic information transmission sheet for communicating information on the

chemical substances contained in products. It records the names of laws regulating the substances and the existence of substances subject to control.

*2 RoHS is an acronym for Directive on the Restriction of the use of certain Hazardous Substances in electrical and electronic equipment.

*3 SVHC is an acronym for Substances of Very High Concern with carcinogenic and mutagenic effects, reproductive and developmental toxicity and other serious impacts on human health and the environment.

*4 An abbreviated name for Act on the Evaluation of Chemical Substances and Regulation of TheirManufacture, etc.

In preparation for a major earthquake which it is forecast will occur in the near future, OSAKA SODA has formulated a Business Continuity Plan (BCP) for each manufacturing site assuming damage to production facilities at each workplace and based on forecasts for the restoration of utilities including various raw materials, water, and electricity as well as logistics. Moreover, we have also prepared emergency response guidelines at each workplace and made all employees aware of the chain of command in an emergency and the procedures for confirming safety. Furthermore, we have prepared a BCP to prepare for a large-scale influenza epidemic, taking into consideration such matters as securing production personnel by preventing inter-employee infection and a scheme for mutual assistance between workplaces.

Safety Data Sheets (SDSs)

MSDSplus

Safety Data Sheets (SDSs) JAMP MSDSplus

Business Continuity Plan

Corporate Information（As of October 1, 2016）

OSAKA SODA CO., LTD.1-12-18, Awaza, Nishi-ku, Osaka 550-0011, JapanOctober 26, 1915¥10,882 million First Section of Tokyo Stock Exchange (Securities code: 4046)Ernst & Young ShinNihon LLCJune

Company NameHeadquartersEstablishmentCapitalListed onIndependent AuditorAnnual General Shareholders’ Meeting

Stock Information（as of March 31, 2016）

Name of Shareholder

Japan Trustee Services Bank, Ltd．（Trust Account）The Bank of Tokyo-Mitsubishi UFJ, Ltd.The Bank of Fukuoka, Ltd.Sompo Japan Nipponkoa Insurance Inc.THE IYO BANK, Ltd.TEIJIN LIMITEDMizuho Bank, Ltd.Nippon Life Insurance CompanyAsahi Kasei Chemicals CorporationDAISO Partner Stock Holding Association

5,1574,3844,1133,8423,7443,3933,3483,1882,9332,838

4.894.163.90 3.643.553.223.173.022.782.69

Shareholding (1,000 shares)

Shareholding Ratio (%)

Note: Shareholding ratio is calculated by deducting treasury stock (6,419,632 shares) from total number of shares issued.

Stock Information

List of MajorShareholders(top ten)

Total number of shares authorized to be issued: 300,000,000 sharesTotal number of shares issued: 111,771,671 sharesNumber of shareholders: 5,964

Shareholder Registry Administrator

Information of shareholders distribution

Mitsubishi UFJ Trust and Banking Corporation4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo 100-8212, Japan

Share price and trading volume trendsNote: The Company’s shareholding ratio (5.74%) of treasury stock is included in “Individuals and others.”