OSAKA SODA REPORT 2017

October 2017

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

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

83,14991,621

101,365

2012 2013 2014

102,125

2015

93,509

2016

（Millions of yen）

（FY）

50

40

30

20

10

07.00 7.00 8.00

27.41 28.7632.75

2012 2013 2014

10.00

34.23

2015

11.00

41.01

2016

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

（FY）

（Yen）

9

8

7

6

0

7.97.6

7.77.5

（％）

2012 2013 2014 2015

8.6

2016（FY）

800

600

400

200

0

40

30

20

10

0

25.4 27.2 27.4596 570 579

27.5601

2012 2013 2014 2015

28.7642

2016

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

（FY）

8,000

6,000

4,000

2,000

0

2,888 3,0293,450 3,606※

5,025 5,2415,747

6,443

4,538 4,7515,172

6,439

2012 2013 2014 2015

4,320※

6,586

6,536

2016

（Millions of yen）

（FY）

Operating incomeOrdinary incomeNet income

120,000

90,000

60,000

30,000

0

55

50

45

40

0

38,246 41,61547,704

76,80484,326

100,89349.7

49.347.3

48,296

97,027

49.8

（％）

2012 2013 2014 2015

52,725

51.9

2016

101,503

（Millions of yen）

（FY）

Total assets Net assets Shareholder'sequity ratio

150

100

50

0

117109 109 111

2012 2013 2014 2015

120

2016

（1,000kL）

（FY）

100

90

80

0

84

8991

93

（％）

2012 2013 2014 2015

93

2016（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 2016 (April 1, 2016 – March 31, 2017)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.

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.

Table of Contents

● Financial highlights (consolidated)/ Non-financial highlights

● To our stakeholders

● Business transformation

● Business characteristics

● Medium-term management plan

CSR Initiatives● Corporate governance

● Compliance system

● Responsible care

● Environmental conservation activities

● Quality assurance

● Occupational safety & health/ Process safety & disaster prevention　

● Logistics safety

● Dialogue with society　

Data Section● Main financial data (consolidated) 　

● Environmental and safety data

● Corporate information/ Stock information

P02

P03P05P07P08

P09P10P10P12

P15P16

P17P17

P18P19P22

Financial highlights (consolidated)/Non-financial highlights

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

03 04

We pursue the potential of chemicals to create new value that can meet the challenges of industry and society.

Tamotsu SatoChairman & CEOOSAKA SODA CO., LTD.

Kenshi TeradaPresident ＆ COOOSAKA SODA CO., LTD.

03

Reducing Environmental

Impact

HumanResource

DevelopmentEnvironmentally

Conscious Products

Dialoguewith thePublic

Contributing to the development of industry with passion and high aspirations handed down since the days of our foundingHaving become the first in Japan to succeed in the development of industrial-scale production of caustic soda using electrolysis, Osaka Soda was founded by members of Osaka's business circle in 1915. Passion and aspirations for high standards in attempting and accomplishing the establishment of technology to support Japan's industrial development lay behind the founding of Osaka Soda. After its founding, Osaka Soda set a path as a pioneer in the domestic production of caustic soda by supporting many industries through the chlor-alkali business, including the stable supply of 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 built a foundation for innovative product development stimulated by our expansion into the functional chemical products business, which includes synthetic resins and synthetic rubber, which use allyl chloride and epichlorohydrin as raw materials, consolidating our leading global market share in a niche field. We also leverage our strengths to offer high value-added products in the pharmaceuticals business, primarily

in pharmaceutical purification materials and active pharmaceutical ingredients and their intermediates. The OSAKA SODA Group has inherited this“passion for innovative product development”and has expanded our business by developing technology that values creativity in addition to contributing to the development of diverse industries.

Venturing to solve challenges for industry and society by creating new valueWe have set out“Be a company growing by business expansion of specialty chemicals”as our Group Vision, and we have expanded our functional chemical and healthcare-related business to promote a transformation into a business structure centered on new business fields, particularly biotechnology, energy, and the environment. Under NEXT FRONTIER-100, the Medium-term Management Plan currently underway, we have“New products and new business creation,”“Overseas business expansion,”and“Nurturing of the healthcare-related business”as the growth engines for implementing the plan, and we are giving priority to expanding and strengthening our business in these areas. In April 2017, we launched RACRESTERTM, an acrylic rubber

with outstanding heat insulation performance, and, going forward, we intend to continue giving the world new products developed leveraging the innovative product development technology that we have cultivated since the founding of the OSAKA SODA Group. The OSAKA SODA Group will engage in innovative product development that helps the advancement of industry and society in the future by pursuing the potential of chemicals and constantly venturing into new business fields.

Initiatives to support the improvement of corporate valueAs an enterprise friendly to both people and the environment, we actively promote initiatives aimed at being in harmony with the global environment and local communities and a relationship of trust with local communities, 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 effectively 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, reducing industrial waste, recycling, and other initiatives. 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 energy saving tires, and the development of a resource recycling system. 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, process safety and disaster 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 aspire to be a corporate group that contributes to realizing an affluent society by developing innovative products. 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 2017

To our stakeholders

05 06

With our technologies for developing innovative products, we have responded to the needs of the times, which are constantly changing due to the development of society and industry, to create new value.

Business transformation

1913: Established Japan's first manufacturing method for caustic soda using electrolysis

1978:Commenced manufacture of allyl ether

1979:Started production of epichlorohydrin rubber

1961:Opening of Research Center

1962:Started production of diallyl phthalate (DAP) resin

1971:Built Mizushima PlantCommenced integrated production of AC and EP

1916:Built Kokura Plant

1931:Built Amagasaki Plant

1952:Built Matsuyama Plant

1992:Started production of silica gel for liquid chromatography

2007:Commenced manufacture of modified silica gel

1999:Commenced manufacture of active pharmaceutical ingredients (APIs) and their intermediates

1913- 1990s-1960s-Contributing to industrial development as a pioneer of electrolysis technology Expanding into the organic chemicals field to create new value added through unique chemical technologies Entered pharmaceuticals business

We established Japan's first continuous industrial production method for caustic soda using electrolysis based on proprietary technology in 1913, and the company was founded in 1915. This manufacturing method supported the dawn of Japan's chemical industry, including the technology licensing in Japan and the East Asia region. The caustic soda manufactured using electrolysis was of a higher quality compared with other methods of manufacture, and it enjoyed a good reputation in the textile industry, which was becoming a core Japanese industry at the time. We also continued to open up markets mainly for chlor-alkali products, which are indispensable in many industries, including sterilization of the water supply in tandem with the development of social infrastructure, paper and pulp, dyes, chemical additives, and pharmaceuticals. In order to respond to the growth in demand accompanying the development of these industries, we aimed at stable supply by following the Kokura Plant with the construction of the Amagasaki Plant and the Matsuyama Plant.

In 1961, we opened the Research Center with the aim of expanding into the organic chemical field. We carried out research and development aspiring to innovative product development using allyl chloride (AC) and epichlorohydrin (EP) synthesized through chlorination of propylene as raw materials. In 1971, we expanded into the Mizushima chemical complex and built a system for integrated production of AC and EP. In the development of derivatives manufactured using AC and EP as raw materials, we also succeeded in developing highly efficient proprietary manufacturing methods, such as the establishment of an innovative method of manufacture for DAP resin that used allyl group polymerization technology, the development of industrial-scale

Our History

Products and Applications

Chlor-Alkali

• Bleach for paper, pulp and textiles• Sterilization of water supply• Neutralization and waste water treatment agents, etc.

Allyl Chloride（AC）Epichlorohydrin（EP）

• Semi-conductors• laminated boards• Coatings for ships and automobiles, etc.• Agricultural chemicals, etc.

Pharmaceutical purification materials（Silica Gel for Liquid Chromatography）

Active pharmaceutical ingredients (APIs) and their intermediates

Electrodes

• Manufacture of chlor-alkali• Steel plated sheets for consumer electronics, etc.

Allyl Ethers• Silane coupling agents• High-grade metal coatings, etc.

Synthetic resin（Diallyl Phthalates

(DAP) Resin）• UV inks• Hot stamping• Electronic components, etc.

Synthetic rubber（Epichlorohydrin Rubber）• Heat-resistant and oil-resistant hoses for automobiles• Rubber rolls for OA equipment, etc.

production for epichlorohydrin rubber through the development of high activity polymerization catalysts, and the development of mass production of allyl ethers through the development of an etherification reaction process. These successes made it possible for us to create competitive derivatives and build a niche range of products boasting top shares of the global market. Meanwhile, we expanded into the electrode business applying the technology and know-how cultivated since our founding in the manufacture of chlor-alkali. Our high-durability electrodes created using our proprietary precision firing technology for noble metal oxides are now at work in a wide range of fields from production lines for industrial-use galvanized steel sheet and production facilities for copper foil used in lithium ion batteries to consumer-use alkali ion water purifiers.

Having grown our business centered on AC and EP derivatives, we expanded into new business fields by combining our core technologies with new technologies such as biotechnology and nanotechnology. We developed silica gel for liquid chromatography with nanometer-controlled pore diameter, applying inorganic synthesis that has been our core technology since the company's founding. Moreover, by making companies such as SANYO FINE CO., LTD., which is involved in the manufacture of pharmaceuticals and intermediates, into subsidiaries, we combined the newly acquired biotechnologies, such as genetic modification and microbial culturing, with our proprietary organic synthesis technologies, established processes for the synthesis of optically active pharmaceutical intermediates for antibiotics and antiviral drugs and expanded our pharmaceuticals business. At present, we are responding to the development needs of the pharmaceutical industry over the past few years and putting our efforts into the fields of biopharmaceuticals and generic drugs as well.

1980s:Developed electrode business

The Daiso electrolytic cell

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.

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

NEXT FRONTIER-100

RADOPARTM,a new allyl resin

RACRESTERTM, an acrylic rubber

07 08

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

Expand with a focus on global niche top products

Make the healthcare-related business into a third core business

Energy and environmentNew product launches

Synthetic resin and synthetic rubber

Silica Gel for Liquid Chromatography

Silica gel for liquid chromatography

Electronic materials

Allyl ethers

Active Pharmaceutical Ingredients and Intermediates

Active Pharmaceutical Ingredients and Intermediates

● Solid polymer electrolytes for lithium batteries● Aqueous binders● Rare metal recovery technology

● Synthetic resin: provide technical support for expanded sales of high-sensitivity UV ink applications　　　　　　　● Synthetic rubber: expand compound business and strengthen overseas sales of acrylic rubber

● Strengthen technology support for business partners in Asia● Obtain new projects in Europe, the U.S., and India

● Develop new grades● Open up new pharmaceuticals purification field● Expand the column and equipment business

● Next-generation substrate forming technology● Ultra-fine particulate conductive materials

● Expand Asian market share● Introduce new grades

● Expand sales of imported generic active ingredients

● Gain new projects by leveraging specialized reaction equipment● Gain development projects by introducing high pharmacological activity facilities

Health Care● New active pharmaceutical ingredients and intermediates● Bio-materials for cosmetics● Purified materials for biopolymers

A room for high pharmacological activity

Business characteristics

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.

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 sheet plating for consumer electronics' housing, 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

Overview of the AC / EP Chain

No. 1in Japan

No. 1in Japan

No. 1in Japan

No. 1in Japan

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

Fiscal 2018 goals

1 New products and new business creation

Ratio of newproduct sales

20%

2 Overseas business expansion

Ratio ofoverseas sales

25%

3 Nurturing of the healthcare-related business

Net sales

￥10billion

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● OSAKA SODA will make eff orts for continuous improvement of environmental, health, and safety performance across the entire product lifecycle from product development through to disposal as well as facility, process, and technology-related security, and will publish the results of such eff orts.● Management will show strong leadership and strive to ensure the environment, health, and safety in Japan and overseas.● In addition to complying with the laws and regulations of individual countries and with international rules, OSAKA SODA will strive to raise the level of its voluntary initiatives.● Through Responsible Care, OSAKA SODA will contribute to improving quality of life and realizing a sustainable society to enhance public trust.

Responsible Care Policies１．Environmental Preservation

（１）We will promote environmental conservation and give consideration toharmony with protection of the global environment.

（２）We will make eff orts to reduce our impact on the surroundingenvironment including the atmosphere and water resources.

（３）We will promote energy and resource conservation, and make eff ortsto reduce waste and promote their eff ective use.

２．Process Safety & Disaster Prevention（１）We will make eff orts to prevent major accidents and disasters with the

mindset that “everything begins with safety.”（２）We will strictly follow our crisis management procedures during

emergency situations.（３）We will be thorough in our management of high pressure gases,

hazardous materials, poisons and highly toxic substances.（４）We will promote security management of facilities and equipment.

３．Occupational Safety & Health（１）We will reduce potential hazards and strive to eliminate workplace

accidents.（２）We will make eff orts to establish a pleasant workplace environment.（３）We will make eff orts to maintain and improve health.

４．Distribution Safety（１）We will strictly comply with legal and other requirements to ensure

safety in the transport of products.（２）We will promote comprehensive safety in all our logistics operations

and reduce risks in the transport and distribution of our products.５．Chemical & Product Safety and Quality Assurance

（１）We will strive to eliminate quality problems, and provide products that will satisfy our customers.

（２）We will undertake appropriate chemical management and comply with the respective regulations in each country.

（３）We will take measures so our business partners will be able to safely handle chemicals.

６．Dialogue with the Public（１）We will bear in mind the concerns of regulatory authorities and people

in the communities where we operate, disclose necessary information, and make eff orts to engage in dialogue.

（２）We will continue dialogue and interaction with members of the local communities and activities that contribute to society.

We will communicate our Basic Policy on implementing our Responsible Care related activities to all employees within the company and to the general public.

09 10

Corporate Governance

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

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 seven 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, 2017)

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.

Compliance System

Responsible Care: RC

【Organizational Structure of Responsible Care】

RC CommitteeRC Promotion Conference

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

11 12

Targets and Results of Responsible Care Activities

Targets for Fiscal 2017

Targets for Fiscal 2016 Results for Fiscal 2016 Long-term Targets

EnvironmentalPreservation

Process Safety & Disaster Prevention

Occupational Safety &Health

DistributionSafety

Chemical & ProductSafety and Quality Assurance

Dialoguewith Society

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

・To 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 lower.

・To make eff orts to reduce CO2 emissions in line with chemical industry's“ Commitment to a Low-Carbon Society”

・To promote ongoing measures to prevent serious accidents and disasters

・To eliminate work accidents (to introduce non-technical education and training with the aim of no accidents with lost worktime)

・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

・Energy intensity went up about 1% due to changes in the product mix and an increase in non-manufacturing power consumption due to the establishment of new facilities.

・The external landfi ll rate for industrial waste was 6.8%, reaching the target.

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

・There were no accidents with lost worktime in fi scal 2016, so the target was achieved.

・Despite implementation of measures to eliminate accidents, there were 11 distribution accidents (10 in the previous year), so the measures had no perceivable eff ect.

・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 &Disaster Prevention

Occupational Safety & Health

Distribution Safety

Dialogue with Society

Chemical & Product Safety andQuality Assurance

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 strive to prevent serious accidents and disasters based on the concept that “everything begins with safety.”To continuously promote measures to prevent serious accidents and strengthen our response in emergencies

To reduce potential risks and strive to eliminate work accidents (to introduce non-technical education and training with the aim of no accidents with lost worktime)

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

To carry out RC implementation reporting and reporting to public agenciesTo engage in dialogue and interaction with the local community and continually engage in social contribution activities

To eliminate quality issues and provide products that satisfy customersTo ensure stringent compliance with laws targeting chemical products

Material Balance of Production Activities

The chemical industry 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 7% in fi scal 2016, compared to fi scal 2015, but water consumption increased by 2%. 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 2016 is shown below (data excludes Mizushima Plant of OKAYAMA CHEMICAL CO., LTD.).

RECYCLE

OUTPUT

INPUT

Water18,954 thousand t

Energy consumption(crude oil equivalent)120 thousand kl

Raw materials274 thousand t

Production of goods642 thousand t

Packingused for shipment*

209t

Packingvoluntarily collected

93t

OUTPUT

CO2290 thousand t

SOX0.1t

NOX19t

Ash dust0.8t

COD236t

Nitrogen77t

Phosphorus7.9t

Wastewater28,701 thousand t

Waste

PRTR

Total 27,308tLandfilled 1,847t

Released 64.2tTransferred 105.0t

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

ISO 14001 Certifi cation

Environmental conservation activities

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

Initiatives to Reduce Industrial Waste Detailed data P21

13 14

Energy Conservation Initiatives

Initiatives to Prevent Atmospheric and Water Pollution

Developing Environmentally-Friendly Products

In fiscal 2016, production volume increased by 7% from the previous fiscal year while energy consumption increased by 8%. Energy intensity was the same as the previous fiscal year, which is partly attributable to efforts directed at the appropriate operation of facilities.

Our four main plants (Kokura, Amagasaki, Matsuyama, and Mizushima), the Mizushima Plant of OKAYAMA CHEMICAL CO., LTD., and the Matsuyama Plant of SANYO FINE CO., LTD. engage in production activities in the Seto Inland Sea and nearby waters, making wastewater management a key theme for preserving the beautiful environment of the Seto Inland Sea. We have also concluded agreements on pollution prevention and environmental preservation with the local area, and we not only strive to comply with environment-related laws but also to prevent and reduce atmospheric and water pollution. The environmental impact of our wastewater is primarily attributable to the emissions from processes for organic products, etc. (organic products, plastics, pharmaceutical intermediates, etc.), and we take steps to reduce this impact.

We continued our initiatives to reduce energy consumption by updating facilities, improving systems, and conserving power. However, energy consumption increased by 8% from the previous fiscal year due to an increase in production volume, a rise in energy intensity associated with the growth in the high value added product ratio, and an increase in non-manufacturing energy consumption with the establishment of new facilities and other factors.

In conjunction with the growth in production volume, which included an increase in production of high value added products, the emission and transfer of subject substances increased by 25% from the previous fiscal year.

Emissions of atmospheric pollutants fell by 23% from the previous fiscal year. This was due to a reduction in nitrogen oxide (NOx) which accounts for over 90% of atmospheric pollutants.

Chemical oxygen demand (COD), which accounts for the majority of water pollutants, increased in conjunction with the growth in production volume. As a result, total emissions increased by 10%.

The hydrogen generated by soda electrolysis is a clean energy that does not emit CO2, and we are striving to reduce CO2 emissions by recovering the thermal energy currently generated by two hydrogen boilers as one of our replacement energy strategies using hydrogen. In addition, we installed low CO2 emission city gas boilers at the Amagasaki Plant in fiscal 2006. Since fiscal 2007, a total of three boilers have reduced heavy oil consumption by a crude oil equivalent of approximately 4,000kL/year and CO2 emissions by approximately 15,000t/year.

In fiscal 2016, we implemented Cool Biz activities with the aim of enhancing consideration for the environment and work efficiency.Participating worksites: All Osaka Soda worksites, affiliated companiesPeriod of activities: Sunday, May 1, 2016 – Monday, October 31, 2016Activity details: No neckties and jackets, indoor temperature management (setting: 28℃ )

We promoted the following eco-commuting activities.

(1) Car pooling(2) Avoidance of congestion with staggered hours(3) Changes in means of transport(3) Promotion of environmentally-friendly driving

Hydrogen boiler at the Amagasaki Plant

Hydrogen boiler at the Matsuyama Plant

City gas boiler at the Amagasaki Plant

The Basic Act on Establishing a Sound Material-Cycle Society was established in 2000, and a range of recycling laws were enacted. We are reducing waste through a system to recover hydrochloric acid and steam with hydrochloric acid production equipment that uses the organochlorine compounds that are the by-products of manufacturing processes and incinerators for liquid waste for the reutilization of resources and energy. In addition, we also turn the organic sludge generated by wastewater processing into fertilizer as well as separating, collecting, and recycling garbage.

CABRUSTM*1, a modifier for low fuel consumption tires which we manufacture and sell, is a polysulfide silane coupling agent used as an additive for energy saving tires. CABRUSTM aids the coupling of rubber and silica, which do not normally have an affinity for each other. The rotational resistance*2 of the tire is reduced and thereby fuel consumption is improved. Tires that include silica using CABRUSTM consume less fuel and can reduce CO2 emissions and have become popular in Europe, contributing to the preservation of the global environment.*1: CABRUSTM consists of Coupling Agent for Bonding RUbber and Silica.*2: Rotational resistance: heat generation of tires by vibration and friction against the ground while running

We are leveraging our proprietary technologies, including mercury extraction, to develop and supply a range of recycling systems. Furthermore, we are also promoting the creation of products with an awareness of recycling from the product development stage.　● Equipment for extracting mercury from exhaust gas and wastewater　● Glass recovery and recycling technology for used fluorescent light tubes　● Technology for volume reduction and recycling of waste plastics　● Technology for reusing and recycling waste liquid from etching

JMR CO., LTD., a member of the OSAKA SODA Group, is aiming to contribute to a material-cycle society through its processing business for used fluorescent light tubes and mercury lamps based on our mercury processing technology. After cutting, crushing, and washing used fluorescent light tubes, JMR recovers and recycles the glass, fluorescent agent, metals, and mercury. It has contracts with approximately 3,000 companies in the Kinki and Chubu regions and processes about 4 million tubes/year (40W straight-tube fluorescent light tubes equivalents).

OSAKA SODA and DAISO ENGINEERING CO., LTD. developed the LegioClean, a chlorine dioxide generating device, and Jia De Clean, a sodium hypochlorite generating device, which can sterilize water for tap water as well as for pools and hot spas on site. A special feature is that these devices can kill legionella and other bacteria that are the biggest problem in closed loop baths, and we have proposed them as sterilizing devices for hot spa facilities and pools, water cooling towers and health care and food-related facilities.

Utilizing our basic technology, DAISO CHEMICAL CO., LTD. and Obayashi Corporation co-developed New DaiRock, a processing agent that prevents the dispersal of sprayed asbestos dust. New DaiRock is anaqueous inorganic processing agent containing silicate as its main ingredient and features outstanding permeability into asbestos without containing VOCs such as organic solvents.

Energy Consumptionincreased by 8%

Facility for recovery of valuable materials through thermal decomposition of wastewater (Matsuyama Plant)

Initiatives to Reduce Energy Consumption Detailed data P19

Use of Clean Energy

Cool Biz Activities Activities to Promote Eco-Commuting

Management of Substances Subject to PRTR Law

Emission and transfer of substances subject to PRTR Law increased by 25%

Emissions of atmospheric pollutants

fell by 23%

Initiatives to Prevent Atmospheric Pollution

Initiatives to PreventWater Pollution

Emissions of water pollutants increased

by 10%

CABRUSTM: tire modifier for energy saving tires that contribute to reducing automobile CO2 emissions

Applying Our Technology to Resource Recycling

Environmental Preservation Facilities and Fluorescent Light Tube Recycling Business Utilizing DAISO MRTM Mercury Absorber

Making Water Safe and Clean Completely Removing Asbestos

Environmental conservation activities

▲ Glass ▲ Fluorescent agent ▲ Metals ▲ Mercury

A tire that includes silica using CABRUSTM

Amagasaki Plant of JMR CO., LTD.

Chlorine dioxide generating device Spraying New DaiRock

Detailed data P19

Detailed data P20Detailed data P20

We regard occupational safety and health and process safety and disaster prevention as an important part of our RC activities.

Matsuyama Plant RC Promotion Conference

RC Committee

RC Promotion Conference (includes Safety and Health Conference)

Plant RC Committee (includes Safety and Health and Process Safety and Disaster Prevention Committee)

Workplace Meeting

Held twice a year

Held twice a year

Held monthly

Held monthly

Promotion of Activities

15 16

Activities

Each worksite took part in local disaster prevention drills as well as holding comprehensive disaster prevention drills and reporting and communication drills on site.

Each plant and the Research Center foster hazard prediction (KY) trainers through external courses, which are reflected in workplace KY activities.

We provide education on mental health care through external instructors and videos at all of our worksites, the Mizushima Plant of OKAYAMA CHEMICAL CO., LTD., and the Matsuyama Plant of SANYO FINE CO., LTD. in our efforts to maintain and improve mental health.

Each worksite sets a target for acquisition of qualifications and provides encouragement. As a result, the number of employees who possess a major qualification increased by 75 from the previous fiscal year.

We hold the periodic RC Committee (includes the Safety and Health and Process Safety and Disaster Prevention Committee) and continuously implement serious accident prevention and KY activities in striving to prevent disasters, but there was one lost worktime accident in fiscal 2016.

Headquarters Kokura Plant Amagasaki Plant Matsuyama Plant Mizushima Plant Fukui Plant, SANYO FINE CO., LTD.

In order to promote serious accident prevention measures in fiscal 2016, we set out the slogan “Danger lurks in familiar work: Point and Call, Confirm Safety” as ZA 2016 and worked to eliminate work disasters and accidents. Our four plants, the Research Center, the Mizushima Plant of OKAYAMA CHEMICAL CO., LTD., and the Matsuyama Plant of SANYO FINE CO., LTD. have been working continuously for 13 years on measures to prevent serious accidents, repeatedly implementing the PDCA cycle with the aim of improving their results. We implement follow up for these activities every October to check on the status of progress.

Promoting ZA (Zero Accident) and Serious Accident Prevention Measures

Fostering Hazard Prediction (KY) Trainers

Mental Health Care

Initiatives for Acquisition of Qualifications

Possession of major qualificationsTotal number of qualified employees

(total)

1,566(up 75 from previous fiscal year)

Disaster Prevention Drills

Preventing Accidents with Lost Worktime

Occupational safety & health/Process safety &disaster prevention

Quality Assurance Initiatives

Product Safety and Chemical Substance Management Initiatives

Quality assurance

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

Detailed data P21

Detailed data P21

InternshipsCommunity Interaction

Yellow Cards and GHS Labels

Holding Transportation Subcommittee and Emergency Response Drills

93,509

6,586

6,536

4,320＊

41.01

500.50

11.00

101,503

52,725

51.9

21,839

0.4

8.6

6.6

12.1

4,302

2,932

1,684

8,490

（3,145）

（3,506）

20,523

497

111,773,837

55,551

2016（FY） 2012 2013 2014 2015

17 18

Initiatives for Logistics Safety

Dialogue with Society

● Each plant held a Transportation Subcommittee periodically and strived to ensure safe transportation by　 freight companies and drivers.● The relevant people at plants and freight companies held joint emergency response drills and reporting and 　communication drills.

● We submit our Responsible Care Implementation Report to the Responsible Care Committee of the Japan Chemical Industry Association 　 (JCIA) every year. ● We also receive and report on requests for inspections from government agencies and organizations.● Our business sites report periodically to prefectures and municipalities in accordance with laws and regulations and environmental　 conservation agreements.● Relationships with local communities are becoming increasingly important for corporations. We take part in local responsible care briefing 　sessions.● As part of our environmental conservation activities, we actively participate in a range of local activities, such as cleanup activities, 　 to deepen community interaction.

As part of our social contribution activities, all of our worksites are involved in local cleanup activities, interaction with the community, and hosting interns among other activities.

Based on 5S (Seiri (Sort), Seiton (Systematize), Seiso (Sweep), Seiketsu (Standardize), Shitsuke (Self-Discipline) activities, we not only conduct onsite cleanups but also carry out periodic cleanup activities around each worksite.

In fiscal 2016, we conducted seven plant tours at the Kokura Plant, 32 at the Amagasaki Plant, 13 at the Matusyama Plant, 21 at the Mizushima Plant, five at the Mizushima Plant of OKAYAMA CHEMICAL CO., LTD. These tours provided an outline of our production activities and introduced our production facilities to local high school and university students.

In fiscal 2016, we provided studentswith technical guidance and practical work experience in response torequests from educational institutions.

Kokura Plant: 5 days in July, 3 internsAmagasaki Plant: 5 days in August and September, 5 internsMatsuyama Plant: 5 days in October, 5 interns

● We have prepared “yellow cards” for products that correspond to toxic substances, 　 deleterious substances, and hazardous materials, have provided education, reporting, 　and communication drills for drivers aimed at ensuring safety during transportation and an 　 appropriate response in an emergency. ● In order to ensure safety during the mixed transport and storage of products in drums and 　oil drums, we affixed “GHS labels” (container yellow cards) that show emergency measures, 　 the guideline number and the UN number to product containers

Under our freight company commendation program, we recognize outstanding drivers who have made significant contributions to reducing logistics accidents. In fiscal 2016, we recognized 13 drivers.

Transportation Subcommittee leak drill

Yellow card GHS label

Kokura PlantHeadquarters Amagasaki Plant

Matsuyama Plant Mizushima Plant Fukui Plant of SANYO FINE CO., LTD.

Plant tours Internships

Business PerformanceNet sales (millions of yen)

Operating income (millions of yen)

Ordinary income (millions of yen)

Profit (millions of yen)

Per share Data

Net income per share (EPS) (Yen)

Book-value per share (BPS) (Yen)

Dividend per share (Annual) (Yen)

Assets / Liabilities

Total assets (millions of yen)

Net assets (millions of yen)

Capital ratio (%)

Interest-bearing liabilities (millions of yen)

Interest-bearing liability ratio (Debt/equity ratio) (times)

Financial Indicators

Return on Equity (ROE) (%)

Return on Assets (ROA) (%)

Price-Earnings Ratio (PE ratio) (times)

Capex (millions of yen)

Depreciation expenses (millions of yen)

R&D expenditures (millions of yen)

Cash Flow

Cash flows from operating activities (millions of yen)

Cash flows from investing activities (millions of yen)

Cash flows from financing activities (millions of yen)

Cash and cash equivalents at end of period (millions of yen)

Share Data (fiscal year-end)

Closing price (Yen)

No. of issued shares (shares)

Market capitalization (millions of yen)

83,149

4,538

5,025

2,888

27.41

362.74

7.00

76,804

38,246

49.7

14,015

0.4

7.9

7.0

10.4

7,030

2,363

1,367

4,711

（5,182）

430

5,934

285

111,771,671

31,854

91,621

4,751

5,241

3,029

28.76

394.99

7.00

84,326

41,615

49.3

19,990

0.5

7.6

6.5

12.7

5,832

2,510

1,411

5,177

（8,336）

5,233

8,197

365

111,771,671

40,796

101,365

5,172

5,747

3,450

102,125

6,443

6,439

3,606＊

32.75

452.78

8.00

34.23

458.43

10.00

100,893

47,704

47.3

26,760

0.6

97,027

48,296

49.8

24,280

0.5

7.7

6.2

12.8

2,015

2,811

1,469

7.5

6.5

12.0

2,861

2,892

1,485

7,460

（1,853）

5,954

20,095

5,031

（2,535）

（3,433）

19,036

420

111,771,671

46,944

411

111,771,671

45,938

Logistics Safety Commendations

Dialogue with the Public

Social Contribution Activities

Local cleanup

Logistics safety/Dialogue with society Main financial data (consolidated)

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

Kokura area: 2 drivers, Amagasaki area: 5 drivers, Matsuyama area: 1 driver, Mizushima area: 5 drivers

【Energy intensity】＊

19 20

Environment

150

120

90

60

30

0

117109 109

2012 2013 2014 （FY）

111

2015

120

2016

（1,000kL）

30.0

25.0

20.0

15.0

10.0

5.0

0

25.427.2 27.4

2012 2013 2014

27.5

2015

28.7

2016

（Million t）

（FY）

2.00

1.50

1.00

0.50

02012 2013 2014 2015

1.121.31 1.35 1.39

2016

1.57

（1,000 t）

（FY）

1.000

0.800

0.600

0

Energy intensity (Crude Oil Equivalent kL/Production volume t)Energy intensity index (compared with fiscal 1990)

2012 2013 2014 2015

0.614 0.600 0.600 0.591

0.906 0.885 0.886 0.872

2016

0.599

0.884

（FY）

2.000

1.500

1.000

02012 2013 2014 2015

0.9260.996 1.001 1.008

1.335

1.502 1.5071.467

2016

1.051

1.436

（FY）

CO2 emissions intensity (t-CO2/t)CO2 emission index (compared with fiscal 1990)

20.00

15.00

10.00

5.00

02012 2013 2014 2015

13.6015.14

16.54 16.91

2016

16.12

（1,000 t）

（FY）

【Energy consumption (Crude Oil Equivalent)】＊

【CO2 emissions associated with energy consumption】＊

【CO2 emissions from offices and research departments】

【CO2 emissions intensity】＊

【CO2 emissions associated with transportation】

Emissions38.0％

Transferred62.0％

Atmospheric emissions 63.3t/yearEmissions into waterresources 1.0t/yearEmissions into soil 0.0t/yearLandfilled 0.0t/year

800

600

400

200

0

120

110

100

90

0

Inorganic productsOrganic products, etc.

2012 2013 2014 2015

Rate of increase in organic products,etc. (from fiscal 2010)

455

141

429

141

427

152

9595

102 447

158

106

2016

473

169

113（1,000 t） (％)

（FY）

4

3

2

1

02012 2013 2014

1.260.73 0.71

2015

0.35

2016

0.09

（t）

（FY）

50

40

30

20

10

02012 2013 2014

1915

20

2015

24

2016

19

（t）

（FY）

5

4

3

2

1

02012 2013 2014

1.77

2.68 2.70

2015

1.37

2016

0.80

（t）

（FY）

800

600

400

200

02012 2013 2014

596 570 579

2015

601

2016

642

（1,000 t）

（FY）

【Inorganic product production volume/organic product, etc. production volume/rate of increase in organic products, etc.】

【SOx emissions】 【NOx emissions】 【Ash dust emissions】

【Production Volume】

40,000

30,000

20,000

10,000

0

280

210

140

70

0

Emissions

2012 2013 2014

COD load

24,684 25,298 24,859

240222 219

2015

26,396

215

2016

28,701

236

（1,000 t） （t）

（FY）

80

70

60

50

0

20

15

10

5

0

Total nitrogen emissions

2012 2013 2014

Total phosphorous emissions

70

64 63

6 6 6

2015

69

7

2016

77

8

（t） （t）

（FY）

【Emissions/COD load】 【Total nitrogen/total phosphorous emission】

2012 2013 2014 2015 2016

Total emissions and transfers

Emissions

　　　　　　Atmospheric

　　　　　　Water resources

　　　　　　Soil

Transferred

96.4

28.3

27.3

1.0

0.0

68.1

115.4

32.0

31.0

1.0

0.0

83.5

133.6

40.3

39.2

1.1

0.0

93.3

135.7

41.2

40.1

1.0

0.0

94.5

169.2

64.2

63.3

1.0

0.0

105.0

Substance name with CAS No. in square brackets Atmosphericemissions

Emissions intowater resources

Emissions intosoil Total emissions Transferred Total emissions

and transfers

n-Hexane [110-54-3] Toluene [108-88-3]3-Chloropropylene (Allyl chloride) [107-05-1]Trichloroethylene [79001-6]Epichlorohydrin [106-89-8]1,2-Dichloropropane [78-87-5]1,3-Dichloropropene (also known as D-D) [542-75-6]Diallyl phthalate [131-11-3]Dimethylamine [124-40-3]Allyl alcohol [107-18-6]1-Allyloxy-2,3-epoxypropane [106-92-3]Ethylene oxide [75-21-8]1,2,3-Trichloropropane [96-18-4]1,2-Epoxypropane [75-56-9]Chlorodifluoromethane (HCFC-22) [75-45-6]Ferric chloride [7705-08-0]Organotin compoundsTributyl phosphate [126-73-8]Methyl chloride [75-09-2]TotalDioxins [*] (Note)

55.61 0.56 2.91 0.81 1.56 0.06 0.00 0.00 0.11 0.37 0.31 0.12 0.00 0.03 0.81 0.00 0.00 0.00 0.02

63.28 0.54

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.66 0.32 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.98 6.24

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

55.61 0.56 2.91 0.81 1.56 0.06 0.00 0.66 0.41 0.37 0.31 0.12 0.00 0.03 0.81 0.00 0.00 0.00 0.02

64.24 6.78

24.10 66.82 0.00

13.15 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.92

104.99 0.00

79.71 67.38 2.91

13.96 1.56 0.06 0.00 0.66 0.41 0.37 0.31 0.12 0.00 0.03 0.81 0.00 0.00 0.00 0.94

169.23 6.78

Unit: t/year ■ Breakdown of 169.2t/yeaAr emission and transfer of 　substances subject to PRTR Law in fiscal 2016

Unit: t/year

Energy conservation initiatives

Emissions and transfers of substances subject to PRTR Law

Fiscal 2016 transfers of substances subject to PRTR Law

Rate of increase in production volume and organic products, etc.

Atmospheric pollutant emissions

Water pollutant emissions

Environmental and safety data

（FY）

(Note) Unit for dioxins: mg-TEQ/year

＊ Data excludes Mizushima Plant of OKAYAMA CHEMICAL CO., LTD

61.9 8.1 0.6 0.0

16.0 0.0 0.0 0.0 0.4 1.4

11.7 100.0

Emissions (t) Percentage of emissions (%)

Recycling volume (t) Landfilled(t) Percentage of

landfill (%)Category

Name of qualification CategoryNo. of employees

who possess a qualification

21 22

Occupational Safety & Health Process Safety & Disaster Prevention

40,000

30,000

20,000

10,000

0

100

75

50

25

0

Industrial waste emissionsRecycling volume

24,84220,737 20,436

18,154

23,24021,152

2012 2013 2014

Recycling rate

84 8991 93

24,52922,821

2015

93

26,98825,142

2016

(t) (％)

（FY）

4,000

3,000

2,000

1,000

0

3,501

2,0521,859

2012 2013 2014

1,679

2015

1,846

2016

(t)

（FY）

【Industrial waste emissions/recycling volume/recycling rate】＊

【Breakdown of industrial waste (fiscal 2016)】＊

【Landfilled】＊

【Percentage of emissions】＊

2

1

0

No. of accidents with lost worktime

2012 2013 2014

JCIA frequency rate of accidents with lost worktimeFrequency rate of accidents with lost worktime

20162015

（accidents）

（FY）

Sludge8.5%

Waste oil 86.6%

Emissions26,988t

Sludge61.9%

Landfilled1,846t

Waste alkali 0.2%Waste acid0.2%

Waste plastics2.1%

Waste plastics 16.0%

Waste wood 0.5%Waste metal 0.1%Waste glass and ceramics 0.5%

Waste glass and ceramics 0.4%Rubble 1.4%

Rubble 0.5%Ash dust 0.8%

Ash dust 11.7%

Waste oil8.1%Waste acid0.6%

【Percentage of landfill】　

Health OfficerFood Hygiene Officer

Pollution Control Officer

Qualified Person for Energy Management

High Pressure Gas ManufacturingProcess Safety Manager

Boiler Engineer

Hazardous Materials EngineerPoisonous and Deleterious Substances ManagerIndustrial Waste Processing Facility ManagerSpecially Controlled Industrial Waste ManagerHigh Pressure Gas Sales Safety Chief

Chief Electricity Engineer

Electrician

Class 1－

Water Class 1Atmosphere Class 1

－Class A and Class B ChemicalClass A and Class B Machinery

Special levelLevel 1Level 2Class A

－－－－

Class 2Class 3Class 1Class 2

7017

136886288

1974

135282278537

54236

228

36

SludgeWaste oilWaste acidWaste alkaliWaste plasticsWaste paperWaste woodWaste metalWaste glass and ceramicsRubbleAsh dustTotal

2,292 23,369

61 41

571 4

147 21

136 130 216

26,988

8.5 86.6 0.2 0.2 2.1 0.0 0.5 0.1 0.5 0.5 0.8

100.0

1,150 23,220

51 41

278 12

139 19

129 105

0 25,142

1,143 149 11 0

295 0 0 0 7

26 216

1,846

※ Frequency rate = (No. of victims of accidents with lost worktime ÷　 total working hours) x 1,000,000　 Frequency rate of accident victims per 1,000,000 working hours

Initiatives to Reduce Industrial Waste

Possession of major qualifications (as of March 2017) No. of accidents with lost worktime (calendar year total)

Environmental and safety data

＊ Total for 4 OSAKA SODA plants, Research Center, and Matsuyama Plant of SANYO FINE CO., LTD.

2012 2013 2014 2015 2016No. of accidents with lost worktime (accidents)Frequency rate of accidents with lost worktimeJCIA frequency rate of accidents with lost worktime

1

0.83

0.41

1

0.82

0.34

1

0.81

0.33

0

0.00

0.29

1

0.80

0.35

（FY）

Distribution by number of shareholdersFinancial instrumentsbusiness operators0.46%

Other corporations3.10%

Foreign corporations,etc.2.24%Individuals and others

93.56%

Financial Institutions0.65%

Distribution by number of shares

Financial institutions37.68%

Financial instrumentsbusiness operators0.74%

Other corporations30.70%

Foreign corporations,etc.

9.56%

Individualsand others21.32%

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

0

5,000

10,000

550

500

450

400

350

（Month）2015

321 654 87 9 1110 12 21 3

20172016

321 654 87 9 1110 12

（Year）

Corporate information（As of October 1, 2017）

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, 2017）

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 CorporationDAISO Partner Stock Holding Association

4,6994,3844,1133,8423,7443,3933,3483,1882,9332,889

4.464.163.903.643.553.223.173.022.782.74

Shareholding (1,000 shares)

Shareholding Ratio (%)

Note: Shareholding ratio is calculated by deducting treasury stock (6,428,225 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: 111,773,837 sharesNumber of shareholders: 5,450

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 (5.75%) of treasury stock is included in “Individuals and others.”