Editorial policies About the media to report our CSR …...Editorial policies For the purpose of gaining the stakeholders’ understanding about the CSR measures of the Showa Denko

［Digest ］

Contact desk

Public Relations Office SHOWA DENKO K.K.Tel: +81-3-5470-3235URL: http://www.sdk.co.jp/english/ MAIL: [email protected]

SRI indexes adopting Showa Denko

We adopted eco-friendly paper and printing. We adopted universal design.

As of January 2014

We picked up CSR efforts with high importance (materiality) both for the Showa Denko Group and internal and external

stakeholders and gave consideration to “identity of Showa Denko” and “simplicity” during creation.

Editorial pol icies

For the purpose of gaining the stakeholders’ understanding about the CSR measures of the Showa Denko Group, we designed the

reports so that the disclosed information is easier to read and intelligible as much as possible, based on the opinions and requests of

the stakeholders. We provide information through the following e-reports so that the media can be selected by the purpose of reading.

About the media to report our CSR information

SHOWA DENKO CSR Report 2014

[Digest] (this Report)

This report mainly covers the relationship

between the mid-term business plan,

PEGASUS Phase II, and CSR, employees’

efforts in the value chain, and main topics

during the year. This report can be read as

a digest of the report on the Web[Full

Report] (HTML).


on the Web [Full Report] (HTML)

The CSR measures of the Showa Denko

Group are disclosed on our Web site. As

well as focusing on the comprehensibility

referr ing to var ious guidel ines, we

disseminate information with an improved

quickness on the activities performed

during the period.


on the Web [Full Report] (PDF)

The information comprehensively disclosed

on the Web [Full Report] (PDF), is issued in

PDF as an annual report. We take into

consideration the readability, such as the

layout at the time of printing, and each

chapter can also be printed individually.


Introduction of businesses of the Group

Research and development

Business Sites

Company name: Showa Denko K.K.

Head office location:13-9, Shiba Daimon 1-chome,Minato-ku, Tokyo 105-8518, Japan

Number of consolidated subsidiaries: 42

Total number of employees: 10,234

Consolidated business results: Sales:848.1 billion yen

Operating income:26.0 billion yen

　　　　　 Net income:9.1 billion yen

An Overview of the Showa Denko Group (as of December 2013)

For information on main Group companies in Japan,please go to the following 2

1

http://www.sdk.co.jp/english/about/network/group.html

1 2 3 4

3

4

Head Office Nagoya Branch Osaka Branch

1 2Business Development Center

Institute for Advanced and Core Technology

Analysis & Physical Properties Center

Safety Evaluation Center

Process Solutions Center

Business Development Center

Institute for Polymers and Chemicals

Kitakata Plant

Higashinagahara Plant

Oyama Plant

Oyama Plant (Nasu)

Isesaki Plant

Chichibu Plant

Kawasaki Plant

Yokohama Plant

Chiba Plant

Omachi Plant

Shiojiri Plant

Tatsuno Plant

Sakai Plant

Hikone Plant

Tokuyama Plant

Oita Complex

Fukuoka Branch 5

5

Kawasaki Office

Sites in Japan

2 1

America

EuropeChina,Taiwan,Korea

SE.Asia

East AsiaShanghai Showa Chemicals Co., Ltd.

Shanghai Showa Highpolymer Co., Ltd.

Shanghai Showa Electronics Materials Co., Ltd.

Shodex China Co., Ltd.

Shanghai Showa Highpolymer Trading Co., Ltd.

Zhejiag Quzhou Juhua Showa Electoronic Chemical Materials Co., Ltd.

Lianyungang Zaoling Abrasives Co., Ltd.

Showa Denko Sichuan Carbon Inc.

Showa Denko (Dalian) Co., Ltd.

Showa Denko Aluminum (Nantong) Co., Ltd.

Ganzhou Zhaori Rare Earth New Materials Co., Ltd.

Baotou Showa Rare Earth Hi-tech New Material Co., Ltd.

Showa Denko (Shanghai) Co., Ltd.

Showa Specialty Gas (Taiwan.) Co., Ltd.

Taiwan Showa Chemicals Manufacturing Co., Ltd.

Showa Denko HD Trace corp.

Taiwan Showa Denko Electronics Co.,Ltd.

Korea Showa Chemicals Co.

Overseas SitesEuropeF2 Chemicals Limited

SHOTIC Europa Industria de Aluminio Lda.

Showa Denko Europe GmbH

Petrochemicals● Petrochemicals Division (Olefins Department, Organic Chemicals Department)The Petrochemicals Sector is producing and selling cracker products, such as ethylene andpropylene, and organic chemicals derived from them, including acetyls and allyl alcohol.

Chemicals● Industrial Gases Division ● Basic Chemicals Division (Ammonia & Derivatives Department, Soda & Derivatives Department) ● Electronic Chemicals Division, ● Functional Chemicals Division (Functional Polymers Department, Specialty Chemicals Department)

The Chemicals Sector provides industrial gases and chemicals, high-performance chemicals,elastomers, high-purity gases and chemicals for the semiconductor industry, and resin composites.

Inorganics● Ceramics Division ● Carbons Division

The Inorganics Sector provides ceramics products such as alumina, abrasive, refractory andgraphite electorodes for elecronic steel making furnaces, fine carbon products.

Aluminum● Aluminum Rolled Products Division ● Aluminum Specialty Components Division● Aluminum Can Division

The Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum.

Electronics● HD Division ● Electronics Materials DivisionThe Electronics Sector provides HD media, compound semiconductors such as ultra highbrightLEDs and rare earth magnetic alloys.

Advanced Battery Materials DepartmentThe Advanced Battery Materials Department (ABM) provides lithium-ion battery components.In response to the progress of technical innovation in this area, ABM is working hard to speedily develop cutting-edge products.

The Showa Denko Group has focused its research and development resources on two domains, “Energy/Environment” and “Electronics,” based on our medium-term consolidated business plan “PEGASUS,” and promotes research and development that emphasize marketing and the strategy to integrate inorganic and organic elements.For the research organization, while each division exercise leadership in enhancing the existing businesses, we concentrate engineers in specific fields into the Business Development Center and have laboratories to control the application fields of the existing business and next-generation themes (Institute for Polymers and Chemicals, Institute for Advanced and Core Technology), common support centers (Analysis & Physical Properties Center, Safety Evaluation Center), and commercialization projects.

Main topics of researchPetrochemicals: Heat-resistant transparent film for mobile display

Chemical goods: Multifunctional thiol, a variety of intermediates, cosmetic materials

Electronics: Next-generation hard disk

Aluminum: Bed leaving sensor

Advanced battery materials: Materials and components for lithium-ion battery, catalyst for fuel cell electrodes

Other topics: Printed electronics, SiC epi-wafer for power devices, development of a variety of functional components for plant factory

North AmericaShowa Denko Carbon, Inc.

Showa Aluminum Corporation of America

Showa Denko America, Inc.

Southeast AsiaShowa Specialty Gas Singapore (Pte.) Ltd.

SHOTIC (Singapore) Pte Ltd.

Showa Denko HD Singapore Pte Ltd.

Showa Denko Singapore (Pte)Ltd.

P.T. Showa Esterindo Indonesia

P.T. Indonesia Chemical Alumina

Eternal Showa Highpolymer Co., Ltd.

Showa Denko Rare-Earth Vietnam Co., Ltd.

Hanacans JSC

Showa Aluminum Manufacturing Philippines Corporation

Showa Denko HD (Malaysia) Sdn.Bhd.

SHOTIC MALAYSIA SDN. BHD.

01 SHOWA DENKO CSR Report 2014 02SHOWA DENKO CSR Report 2014

PhaseⅡ

■ Business Performance of the Showa Denko Group in 2013

In 2013, the Japanese economy made a mild recovery as

consumer spending recovered and corporate earnings

improved due to the rise in stock prices, a correction to the

appreciating yen and other improvements as a result of

economic measures implemented by the Abe administration

that included monetary easing and aggressive public

spending.

Under these circumstances, the business performance of our

Group in 2013 resulted in sales of 848,071 million yen, an

increase of 14.6% from the previous year, due mainly to

higher sales in the Petrochemicals segment. While the

Petrochemicals, Aluminum, and Chemicals segments

recorded higher operating income, that in the Electronics and

Inorganics segments decreased, and resulted in operating

income of 25,953 million yen, a decrease of 7.7%. Ordinary

income was 23,488 million yen, an increase of 0.2% due

partly to foreign currency translation adjustments. Net income

fell 3.2%, to 9,065 million yen. The year-end dividend was

three yen per stock, unchanged from the previous year.

■ We started PEGASUS Phase II

In January 2014, we started “PEGASUS Phase II,” which covers the later

phase (2014-2015) of the medium-term consolidated business plan

PEGASUS. PEGASUS sets “Energy/Environment” and “Electronics” as two

major business domains, and our Group promotes business with the aim

of “contributing towards creating a society where af�uence and

sustainability are harmonized” by developing and providing products

unique to our Group in these business domains. During the Phase I

(2011-2013), the �rst half of the PEGASUS, our business income largely

fell short of the initial target in a severe business environment that

included a record appreciation of the yen, increase in energy costs,

stagnation in advanced countries and a slowdown of growth in emerging

countries.

For the Phase II, we established new numerical plans to achieve

sales of 950 billion yen, operating income of 50 billion yen, net

income of 25 billion yen, and an ROA (return on assets) of 5.0%

in 2015, and we will promote business activities based on these

plans.

While continuing to strengthen the hard disk media and graphite

electrode businesses as our core businesses, we have newly

positioned the four businesses of aluminum cans, high-purity

aluminum foil, semiconductor-processing high-purity gases, and

functional chemicals, which are unique and internationally

competitive, as “Growth” businesses, and will make efforts to

achieve growth and global expansion of our Group.

■ To become a company contributing to the sound growth of society

The Showa Denko Group established the “Responsible Care

Action Guidelines” in 1995, and signed the “Responsible Care

Global Charter” in 2005. Responsible Care refers to “activities by

companies that handle chemical substances to voluntarily

secure the environment, safety and health, as well as to increase

trust from society and engage in communications in all

processes from development to manufacturing, use and

disposal of chemical products.” Chemical companies worldwide

are engaged in these activities. The Showa Denko Group is also

proceeding with the strengthening of our Responsible Care

program as the core of our business activities.

In 2005, we established the CSR Committee, and has been

promoting various measures including the “reinforcement of the

corporate governance system and compliance framework,”

“improvement of customer satisfaction,” “establishment of a

straightforward and transparent information disclosure system,”

“creation of the employee-friendly working environment” in order

to realize the Vision of our Group. We will continue to be a

business Group that is highly trusted by its stakeholders.

We will remain a business Group that is trusted by all

stakeholders by providing products and services that exceed

customer expectation and conducting business activities that

contribute to the sustainability of international society. This report

describes all activities of our Group in a manner that is as easy

to understand as possible. We hope that you will read this report

and provide us with your honest, straightforward opinions.

Business portfolio in Phase Ⅱ

Hideo IchikawaPresident and Chief Excutive Officer

Showa Denko K.K.

・SiC epi-wafer for power devices

New Growth

Growth

Base(Stable)

Base(Growth)

・Inorganic functional materials ・LEDs ・Shotic TM ・Rare earths

・Basic chemicals/Industrial gases ・LBP cylinders ・Petrochemicals

・Semiconductor-processing high-purity gases

・High-purity aluminum foil

・HD media

・Graphite electrodes・Functional chemicals ・Aluminum cans・Fuel cell catalysts

・LIB materials

TOP MESSAGE

We reviewed our initial business portfolio and reorganized it into “Base(Stable),” “Base(Growth)” “growth,” and “New Growth” at Phase II.


Topics f rom 2013 to 2014

In 2013, the sales was 848.1 billion yen against the target

of 1 trillion yen, and the operating profit was 26 billion yen

against the target of 80 billion yen in comparison with the initial

targets of the five-year medium-term business plan “PEGASUS”

from 2011, which we formulated in the latter half of 2010. We failed

to achieve the goals especially because changing environmental

factors such as supply and demand situation and material costs

largely affected the graphite electrode and rare earth businesses, in

addition to drastic changes in macro economy.

On the other hand, we conducted business structure reform.

In 2014, PEGASUS Phase II, the second half of our five-year consolidated business

plan PEGASUS, was started.

We interviewed our President Hideo Ichikawa, to find out how the business of the

Show Denko Group are involved in and contribute to society.

Please look back 2013 and Phase I (2011 － 2013).

PEGASUS Phase II Launched We contribute toward creating a society whereaffluence and sustainability are harmonized.

Special edition 1 Interview with CEO

For example, we can now constantly make certain profits in the

hard disk (HD) business through production and inventory

management precisely in line with the demand trend. In the

graphite electrode (GE) business, we acquired a Chinese local

graphite electrode manufacturer last year to expand the

business to general-purpose products for the emerging market.

We have also steadily accumulated constitutional enhancement

measures to reform the structure of aluminum business and

to narrow down the development topics, for continuous

reinforcement of our businesses in the whole Group.

The modern society faces a variety of social challenges such

as global environment and energy problems, water and food

shortage due to increase in population, nursing care and medical

treatment issues. As a solution provider, the Showa Denko Group aim

to realize “ a company contributing to the sound growth of society ” as

defined in our corporate vision, by providing many products,

technologies and services that solve these challenges to the

international society.

We have technical basis in a wide range of fields, which are organics

inorganics, and metals, and have provided innovative products that

integrate these fields to the society. We now conduct business

activities in a wide range of fields including petrochemicals, chemicals,

electronics, inorganics, and aluminum, and our various products play

active roles in many different scenes and support our life.

We promote research and development in line with our mission to help

the modern society solve social challenges and continue to create

products required by the society. We focus on the fields where we

have an edge on, such as SiC epitaxial wafer for power devices and

lithium ion battery materials, and realize their commercialization to

contribute toward creating a society where affluence and sustainability

are harmonized, which Pegasus is intended for.

We e s t a b l i s h e d a

subs id ia ry, Showa

Denko Sichuan Carbon,

by acquiring Sinosteel

S ichuan Carbon, a

Chinese integrated

graph i te e lect rode

manufacturing company.

Q

A

A

A

In the latter-half of PEGASUS, Phase II, we changed the

business portfolio to incorporate large changes in the

economic structure and environment during the Phase I period (2011 －

2013).

We continue to position both the HD and graphite electrode businesses

as the core businesses at Phase II. In addition to them, we will

strengthen four businesses of aluminum cans, high-purity aluminum foil,

semiconductor-processing high-purity gases, and functional chemicals

by positioning them as “Growth” businesses. All of these businesses are

unique businesses where the Showa Denko Group has an edge and

can expect market expansion mainly in Asia, which is growing rapidly.

We started PEGASUS Phase II in 2014.

Numeric Targets

Net sales

Operating income

Net income

ROA(％)*

848.1

26.0

9.1

2.7

2013Results

2014Plan

2015Plan

880.0

32.0

14.0

3.2

950.0

50.0

25.0

5.0

(Billions of yen)

*Return on assets

Q

Aluminum canIn May 2014, we acquired a V ietnamese

a luminum can company. We wi l l fur ther

strengthen our competitiveness in Vietnam.

（Hanacans）

High-purity aluminum foilI n Oc tobe r 2013 , we opened the f i na l

processing site for high-purity aluminum foil in

Nantong, China, and started mass production.

（Showa Denko Aluminum(Nantong) Co., Ltd.）

High-purity gas for semiconductorIn January 2014, we increased the annual

production capacity for high-purity ammonia at our production subsidiary in China from 1,000 t to 2,000 t.（Zhej iang Quzhou Juhua Showa Electoronic Chemical Materials Co., Ltd.）

utilizing recycled material made from used

plastics

Environment-conscious ammonia “ECOANNTM”

This material has good properties at large current and the properties do not deteriorate even after repeated charging and discharging.

What contribution do you think we can make to solve social challenges?Q

We established the mass production technology for 6” epitaxial wafer, which wil l be the mainstream in the future, while improving the quality of the mainstream 4” epitaxial wafer.

Carbon anode material “SCMGTM”

SiC epitaxial wafer forpower devices

Products of Research and Development

is used in electronic devices, home appliances, electric vehicles, and the new energy field.

High-purity aluminum foil foraluminum electrolytic capacitor

w h i c h s u p p o r t s t h e infrastructure of advanced information-oriented society

Hard disk,

which contributes to resource

and energy saving

Graphite electrode,


MaterialProcurement

CSR procurement effortsin the Purchasing & SCM

Department

R＆D

Contribute to energy-savingthrough development

of high-purity aluminum foil

Manufacturing / Sales

Environmental efforts at Isesaki Plant

When usedby customers

PFC decompositionsystems effectively used

in customers' plants

Recycling / Disposal

Practicing recycling of aluminum can as a

business

Here we organized the Showa Denko Group's main CSR activities in line with all processes (value

chain) from procurement of feedstock and materials to recycling and disposal. Our group

contributes to the sustainable development of society by implementing CSR across the entire value

chain. Here we would like to introduce examples of specific CSR activities in each stage of our

value chain, with actual cases in four business fields defined as “Four Growth Businesses” in the

Phase II of our Group's medium term consolidated business plan PEGASUS that started this year.

CSR Activities That Targetthe Entire Value Chain

Special edition 2

Showa Denko is conducting CSR procurement.

By sharing the “Showa Denko Group CSR Procure-

ment Guidelines” with suppliers (partners) and

asking them to comply with these guidelines, CSR

procurement by our group aims to improve the

corporate value of both our group and suppliers. We

have self-evaluation, CSR visit, and follow-up activi-

ties to check if our partners follow the Guidelines.

Last year, we expanded these activities from Showa

Denko to our domestic group companies and

started asking their partners to engage in CSR

procurement. In addition, we created English and

Chinese versions of the CSR Procurement Guide-

lines and published them on our website. However,

we have not yet supported non-Japanese

languages for self-evaluation. Our future challenge is

expanding CSR procurement to overseas partners.

Increasing energy demand across the world may lead to the depletion

of oil and other resources. The Showa Denko Group conducts

material procurement, giving considerations to social challenges.

MaterialProcurement

When usedby customers

Efforts in the Procurement&SCM Departmentat the headquarters of Showa Denko K.K.Ochi Shinichi, Purchasing&SCM Department

Aluminum electrolytic capacitors are incorporated in many electrical appliances around us such as TVs, air conditioners, and power modules for cars and solar power generation, and contribute to energy conservation. After processing, high-purity aluminum foil is used as electrode foil, the main material for aluminum electrolytic capacitors.The aluminum electrolytic capacitor has a layered structure where anode foil, made by processing high-purity aluminum foil, electrolytic paper, and

cathode foil are layered over each other. The feature of this capacitor provides low-cost large capacitance.By utilizing our unique Corjunal (CJ) method for aluminum purification and employing integrated aluminum foil manufacturing processes from melting, casting to foliating, we engage in product development that provides customers with higher quality, higher purity aluminum foil ideal for electrolytic etching.

The Showa Denko Group develops materials and parts

considering how final products contribute to the solution

of social challenges.

Self-check sheet

Exhaust gas treatment facility

Aluminum electrolytic capacitor

PFC decomposition system “HB-3000”

We received 3R METI Minister Award

Showa Denko works to solve social issues when our products are used in customer processes. Here is an introduction to Showa Denko Group's products that contribute to reducing greenhouse gas emissions in the customer's manufacturing process.

R＆D

Efforts in the Development Department, Showa Denko Sakai Aluminum K.K.Shintaro Nakagawa, Takanori Sugimoto, Hideki Nishimori (from left)　Development Department, Production and Engineering Control Division, Sakai Plant

Isesaki Plant develops and produces plastic

materials used in a wide range of industries and

applications including building materials,

automobiles and information devices. As

restrictions on environment and chemical

substances are becoming more rigorous, more

environment-conscious production is required.

We reduced emissions of hazardous materials,

achieved zero emission and also made other

achievements at this Plant.

At Isesaki Plant, we are reviewing our traditional

preconceptions and rules and reducing a variety

of environmental loads with an aim that all the

workers create a plant that they can proudly

introduce to their family members. In addition,

they organize plant tours and participate in

cleanup activities around the plant to realize a

plant open to the local community.

The Showa Denko Group considers reduction in waste and environmental load, resource saving, energy saving and other social challenges during production and makes efforts to realize plants open to local communities.

Manufacturing

Efforts at Isesaki Plant, Showa Denko K.K.Kazuyuki Hirabayashi, Environment & Safety Group, Isesaki Plant

Aluminum can recycling is a recycling activity that has spread widely throughout Japan. Not only are the collected used aluminum cans used to manufacture new aluminum cans, they are also reused as car parts, deoxidation material for steel making and other purposes.By recycling aluminum cans, we can save energy by 97% compared with the case when creating aluminum metal from new bauxite.The energy saved is almost the same as the

electricity consumed by households across Japan in 14 days (according to a survey by the Japan Aluminum Can Recycling Association in 2013).Last year, we received the Minister of Economy, Trade and Industry（METI) Award from the 3R Suishinkyogikai (Reduce, Reuse and Recycle Promotion Council) for our aluminum can recycling activities that we have continued for more than 40 years. With the receiving of this award, our entire group will further promote these activities.

Considering a social challenge “Reduce, Reuse, and

Recycle,” the Showa Denko Group creates products with

designs easy to be classified and collected after their

lifetime paying close attention to recyclability.

Recycling

Efforts in the Showa Aluminum Can Recycling Center Corp.Masayuki Ohyama, Planning Promotion Department

PFC gases are used in the dry etching process

when manufacturing semiconductors and LCD

panels. However, because PFC gases are

greenhouse gases, residual gases (exhaust

gases) must be treated after use.

Showa Denko manufactures PFC decomposition

systems to treat these exhaust gases.

The global warming potential of PFC gases is

several thousand or several tens of thousand

times higher than that of CO2. Our PFC

decomposition systems are used in Japan and

around the world, eliminating around 9.4 million

tons of exhaust gas in CO2 equivalents annually.

Because environmental affairs are global

scale issues, we will further focus on overseas

expansion.

Efforts in the Electronic Chemicals Division, Showa Denko K.K.Yuji Hayasaka, Junichi Torisu(from left)Specialty Gases Equipment Group, Electronic Chemicals Division

For more information, check our Web site.

01

02

03

04

05


The Showa Denko Group is engaged in diversity management

with the following key phrases: “Make the most of the potential

of yourself.” and “Make the most of the potential of others.”

We started the following efforts in 2013.

❶ Set diversity promotion as one of our management strategies.

❷ Creation of a promotional framework

❸ Set a numerical target for increasing the number of female 　 managers (ratio) to 40 (5%) by the end of 2020.　❹ We have decided to take part in “The Model Projects to 　 Promote Employment of Mentally Handicapped People in 2014” 　 sponsored by the Ministry of Health, Labour and Welfare

In order to create a workplace where diverse people can

make the most of themselves, we employ handicapped

persons and encourage them to continuously play active roles.

Highlights of CSR Activities

Labor Practices1 Human Rights, Corporate Ethics and Compliance2

Promotion of diversity strategy

The Showa Denko Group aims to contr ibute to local

development by contributing to the society through provision of

products and services and making social contribution utilizing

resources specific to our group (technologies, human resources

and facilities) in various regions.

We are actively engaged in activities such as classes-on-demand

at local elementary and junior high schools, plant tours,

internship, environmental preservation activities in cooperation

with local residents, and aluminum can recycling activities in

order to enhance communication with local communities.

We had a campaign to promote active work by female workers for five

years between 2008 and 2012, aiming to be a company where

workers can shine regardless of gender.

We established the following four pillars of (1) Active hiring and

assignment of female workers, (2) Support for career design and skill

development, (3) Formation of management and corporate cultures

that respect diversity and (4) Creation of an environment that allows

various work styles. After implementing a variety of measures, we

achieved increases in the percentage of female workers (9.6% in

Japan only (+3.4% compared with that in 2007), 10.3% Japan -

consolidated (+0.6% compared with that in 2007) and the number of

female managers (15 female managers in Japan only (there were 7

female managers as of the end of 2007), both as of the end of 2013.

Intern collecting and deliveringinternal mail (right)

■ Percentage of handicapped employees

2.5

2.0

1.5

0

●Showa Denko △Legal requirement（％）

(Year/month)2008/6 2009/6 2010/6 2011/6 2012/6 2013/6

2.0％

2.34％

2.34 as ofJune 2013%

7 at the endof 2007

At the end of 2013

9.6 Domestic,SDK only%Percentage of

female employees

Number of female managers

Increased 15　　　　　at the end of 2013▶

▶

10.3 Domestic,consolidated%▶

18.6 Global, consolidated%▶

We set the target for the end of 2020 as

　　　　40 female managers (5% of all managers).

Employing handicapped persons

Hiring and developing female employees

Our Code of Conduct and Its Practical Guide

The Showa Denko Group adopted respect for human rights

and conformance to social justice and corporate ethics as the

basic attitude to be a company that contributes to the society

as specified in our management philosophy.

We established and are

sincerely implementing “Our

Code of Conduct and Its

Practical Guide” as the

guidelines for employees to

think and act in materializing

the corporate philosophy.

（）

“Our Code of Conduct,” which specifies our action guidelines,

clarifies the policies related to the respect for all human rights

including prohibition of various types of discrimination in and

outside the company and human rights throughout the supply

chain. We conduct enlightenment activities to improve

employees’ awareness of human rights, address workplace

harassment, help female and foreign employees play active

roles, promote employment of handicapped persons, promote

CSR procurement and make other efforts based on these

policies at each plant and affiliated company.

Efforts related to human rights

Local Community and Social Contribution3

We are making a variety of efforts to respect human rights

and improve awareness of compliance.

Education on human rights,

corporate ethics and compliance

Human rights trainingIn January 2014, 300 employees

attended a human rights problem

lecture meeting target ing our

plants and group companies in the

Keihin area.

Legal and intellectual property training weekFrom November 18 to 21, 2013, we had seminars on intellectual property, laws, compliance and other issues as the legal and intellectual property training week.(A scene of basic course on the Antimonopoly Act on November 18)

Training for those in charge of harassment consultation desks40 people attended the training

sessions for those in charge of

harassment consultation desks in

October and November 2013.

Laboratory class-on-demandOn November 29, 2013, we had a laboratory

class-on-demand using LEDs and magnets for third

graders at Kagemori Elementary School(Chichibu

Plant).

Improvement of the environment around the worksitesOn June 22, 2013, many employees participated

in the “Clean Shiojiri” campaign to clean up the

area while taking a walk.(Shiojiri Plant)

Plant tourOn December 17, 2013, we organized SEI's Open House and invited all the students and teachers from a neighborhood high school, "SMAN 1 Pulo Ampel" to our plant.( Showa Esterindo Indonesia)

We will continue this activity after 2013.

We receive internship students at the headquarters area from job

assistance organizations for handicapped people, special-needs schools

and other organizations. In 2013, eight interns experienced work from

October to December. We will continue this activity in the future.

Showa Denko will take part in “The Model Projectsto Promote Employment of Mentally HandicappedPeople in 2014” under the sponsorship of theMinistry of Health, Labour and Welfare.

Topics

With other members in the office on the last day

Percentage ofhandicappedemployees


Financial/Non-Financial Highlights

Operating income (loss)/Ratio of operating incom to sales

Net sales Consolidated sales by segment Net income (loss)

09 10 11 12 13

2,829 2,732 2,6602,496

（kt-CO₂）

0

3,0002,645

09 10 11 12 13

11,564 11,597 11,542

9,89010,234

（Persons）

0

15,000

09 10 11 12 13

1,632

2,390

1,932 1,850

（ t ）

0

3,000

1,000

2,000

5,000

10,00

1,000

2,000

1,087

09 10 11 12 13

20,743 20,670 20,633 20,435

(million yen)

0

10,000

30,000

20,000

09 10 11 12 13

38,666

58,035

38,79442,503

44,370

(million yen)

0

15,000

30,000

45,000

60,000

09 10 11 12 13

924,484 933,162985,771(million yen)

0

250,000

500,000

750,000

1,000,000

09 10 11 12 13

12,706

16,980

9,368 9,065

(million yen)

0

5,000

10,000

15,000

20,000

△37,98109 10 11 12 13

678,204

797,189854,158

739,811

848,071

(million yen)

0

250,000

500,000

750,000

1,000,000

Total assets Capital expenditures R&D expenditures

Discharged amounts of greenhouse gases Final landfill volumes of industrial waste Frequency rate of lost-time injuries Number of employees

2009 2010 2011 2012 2013

For the year

At year-end

Per shareNet income (loss)—primary

Cash dividends (applicable to the period)

Financial data(million yen)

Showa Denko K.K. and consolidated subsidiaries

Net sales

Operating income (loss)

Ratio of operating incom to sales(%)

Ordinary income(loss)

Net income (loss)

Net cash provided by operating activities

Net cash provided by (used in) investing activities

Free cash flow

Net cash provided by (used in) financing activities

Shareholders’ equity ratio (%)

R&D expenditures

Capital expenditures

Depreciation and amortization

Total assets

Return on equity (ROE) (%)

Total net assets

Interest-bearing debt

Debt/equity ratio (Times)

933,162

3.6

314,966

342,262

1.09

6.26

3

739,811

28,108

3.8

23,448

9,368

53,310

△40,209

13,101

△20,150

29.2

20,633

42,503

46,232

985,771

3.2

345,811

353,686

1.02

6.06

3

848,071

25,953

3.1

23,488

9,065

63,565

△46,738

16,827

△6,805

30.6

20,435

44,370

39,779

△29.44

3

678,204

△4,983

△0.7

△22,325

△37,981

19,846

△26,595

△6,749

28,402

25.5

20,743

38,666

54,178

958,303

△15.7

286,722

373,911

1.30

8.49

3

797,189

38,723

4.9

30,471

12,706

66,293

△49,074

17,219

△34,494

26.1

20,670

58,035

50,678

924,484

5.2

284,965

351,034

1.23

11.35

3

854,158

47,357

5.5

40,018

16,980

69,437

△38,672

30,765

△17,295

26.8

21,597

38,794

49,413

941,303

6.9

295,745

347,308

1.17

2009 2010 2011 2012 2013

Non-financial data

2,496

2,085

2,645

1,360

2,829

2,752

2,732

2,591

2,660

2,144

9,890

0.14

10,234

0.22

11,564

0.29

11,597

0.14

11,542

0.13

0970 71 10 11 12 130.0

2.5

5.0

7.5

10.0Overseas JapanAll Industries Chemical Industries

Showa Denko Showa Denko Group*3

Environmental dataDischarged amounts of greenhouse gases (kt-CO2) *1 (Showa Denko Group*2)

Final landfill volumes of industrial waste (t) *1 (Showa Denko Group*2)

Social dataNumber of employees on consolidated basis

Frequency rate of lost-time injuries (Showa Denko Group*3)

*1 Aggregate calculation in each fiscal year

*2 For the range of the Showa Denko Group, see page 11.

*3 For the range of the Showa Denko Group, see page 12.

POINT.1In 2013, energetic origin CO2 emissions increased and total of greenhouse effect gases were 2,645kt (an increase by 149kt from the previous year) due to an increase in the production volume and worsening of CO2 emission coefficient in purchased electricity.

POINT.3Even though we conducted risk assess-ment of facilities and work and took risk reduction measures through “Create Safety” activities we have promoted from 2008, the rate of lost-worktime injuries was 0.22 (an increase by 0.08 from the previous year) in 2013 in the Showa Denko Group.

POINT.2In 2013, we reduced inorganic and organic sludge by 725t from the previ-ous year to 1,360t by effect ively reusing them and making other efforts as well as as a result of recoil reduc-tion of the amount increased in the previous year due to a special factor.

235

5,9055,905

4,329

212201

6,4496,101 6,031

5,802

5,1155,496

5,511

4,088

1,120

958,303 941,303

21,597

Showa DenkoShowa Denko Group

POINT.4The rate of foreign employees was 42% in 2013 as a result of business expansion at overseas offices.

09 10 11 12 13△4,983

38,723

△0.7

4.95.5

3.83.1

47,357

28,10825,953

(million yen) Operating income (loss) （%）

0

15,000

30,000

45,000

60,000

0

2

4

6

8Ratio of operating incom to sales

848,071million yen

Petrochemicals

32.3 %Others

19.9 %

Electronics

15.4 %

Chemicals

14.8 %Inorganics

7.4 %

Aluminum

10.2 %

273273


［Digest ］

Contact desk

Public Relations Office SHOWA DENKO K.K.Tel: +81-3-5470-3235URL: http://www.sdk.co.jp/english/ MAIL: [email protected]

SRI indexes adopting Showa Denko

We adopted eco-friendly paper and printing. We adopted universal design.

As of January 2014

We picked up CSR efforts with high importance (materiality) both for the Showa Denko Group and internal and external

stakeholders and gave consideration to “identity of Showa Denko” and “simplicity” during creation.

Editorial pol icies

For the purpose of gaining the stakeholders’ understanding about the CSR measures of the Showa Denko Group, we designed the

reports so that the disclosed information is easier to read and intelligible as much as possible, based on the opinions and requests of

the stakeholders. We provide information through the following e-reports so that the media can be selected by the purpose of reading.

About the media to report our CSR information


[Digest] (this Report)

This report mainly covers the relationship

between the mid-term business plan,

PEGASUS Phase II, and CSR, employees’

efforts in the value chain, and main topics

during the year. This report can be read as

a digest of the report on the Web[Full

Report] (HTML).


on the Web [Full Report] (HTML)

The CSR measures of the Showa Denko

Group are disclosed on our Web site. As

well as focusing on the comprehensibility

referr ing to var ious guidel ines, we

disseminate information with an improved

quickness on the activities performed

during the period.


on the Web [Full Report] (PDF)

The information comprehensively disclosed

on the Web [Full Report] (PDF), is issued in

PDF as an annual report. We take into

consideration the readability, such as the

layout at the time of printing, and each

chapter can also be printed individually.


Documents

Editorial policies About the media to report our CSR …...Editorial policies For the purpose of gaining the stakeholders’ understanding about the CSR measures of the Showa Denko