To maintain and deepen the trust in us by all shareholders and stakeholders well into the future, the Group recognizes that ensuring the soundness and legality of business management and increasing efficiency is one of the highest priority issues of business, and to this end, we are working to enhance and strengthen our corporate governance system.
To provide shareholders, institutional investors, security analysts, and individual investors with a better understanding of the Hodogaya Chemical Group, we engage in extensive communication activities and strive to disclose information in a fair and timely manner. We have been making our Financial Statement, Annual Securities Report, and various IR materials available from the“ IR” section on our website, and we post our Summary of Quarterly Consolidated Financial Results in English starting in FY2017 and the Notice of the Annual General Meeting of Shareholders in English starting from the Annual General Meeting of Shareholders held in June 2018.
We do the following to encourage two-way communication with our shareholders.
Hodogaya Chemical introduced an electronic voting system (through which shareholders can exercise their right to vote either by scanning a QR code or online) for the General Meetings of Shareholders as of June, 2020 for increased convenience. It allows shareholders to exercise their rights in written form, with a smart device, or over the internet.
Smart devices proved particularly popular in the new electronic voting system, and they were used by many individual shareholders. This resulted in an increase in the ratio of shareholders exercising their right to vote year after year.
In addition, since the Ordinary General Meeting of Shareholders held in June 2020, we have been working to further improve the environment for exercising voting rights by introducing an electronic voting platform for institutional investors.
The Hodogaya Chemical Group aims to achieve a high ROE, a management target under the Group’s Mid-term Management Plan SPEED 25/30, with an emphasis on growth investments, interest-bearing debt control, and shareholder returns. At the same time, we will practice value creation management in line with highly strategic balance sheet management.
Taking into consideration the Group’s net interest-bearing debt, shareholders’ equity, and shareholders’ equity ratio in FY2022, Hodogaya Chemical’s financial health and security currently stands at a high level. We will therefore pursue efforts to further bolster profitability, as well as those to enhance the ability to generate cash that coincides with greater profitability. We will create new value by selecting investment areas with our sights set on the coming future, engaging in the required degree of risk-taking, and executing appropriate resource allocations in a timely manner. Similarly, we aim to connect the outcomes of these efforts to greater corporate value in the future.
In addition, we remain conscious of our shareholders’ equity as a risk buffer that allows us to invest in future growth while simultaneously promoting the policy of upgrading and expanding shareholder returns. As far as the return of profits to shareholders is concerned, we will work to provide shareholder returns in a stable, continuous manner, while reducing shortterm performance volatility. Similarly, we will execute returns with an awareness of the Dividend on Equity Ratio (DOE). Our goal is to firmly maintain a balance between the three aspects of growth investments, interest-bearing debt control, and shareholder returns as part of our efforts to engage in highly efficient operations in a bid to realize a high ROE. In order to achieve this goal, we also recognize the importance of implementing financial and capital strategies in an ongoing manner that enable consistent growth in earnings per share (EPS).
Our basic policy is to maintain an appropriate balance between allocating profits earned as internal reserves for purposes such as investment to contribute to the growth of the Group, and returning profit to shareholders.
Specifically, we will effectively use our internal reserves to strengthen our mid- to long-term competitive edge through strategic investments to expand our core businesses, R&D efforts leading to the creation of new businesses and products, and to fund projects that could contribute to cost reductions, energy-saving and environmental solutions. Meanwhile, we determine fair returns to shareholders in a stable and continuous manner, taking into full consideration such factors as the business results, future expansion of business, and unforeseen risks, while paying particular attention to the ratio of dividend on equity (DOE).
Based on the above policy, the annual dividend for the fiscal year ended March 2023 has been increased to 65 JPY per share.
Moreover, in aims of increasing the dividend for three consecutive fiscal periods, the Company plans to raise the dividend to 75 JPY for the year ending March 31, 2024 (as disclosed in the financial summary for the year ended March 31, 2023).
In order to secure and enhance the corporate value of Hodogaya Chemical and common interests of our shareholders, since receiving approval at the 156th Annual General Meeting of Shareholders in 2014 for the introduction of our plan for countermeasures against large-scale acquisitions of Hodogaya Chemical shares (takeover defense measures), we have implemented a review of the details of said measures every three years when it is time for renewal. Renewal of the takeover defense measures was again approved at the 165th Annual General Meeting of Shareholders in 2023.
Corporate Planning Department
Ayumu Motegi
The role of the department responsible for IR activities is to provide appropriate information to shareholders and investors at the appropriate time in order to ensure correct understanding of the company.
In order to make it easier for shareholders to participate, we have taken actions such as holding the General Meeting of Shareholders on days that are easier to schedule and introducing an online voting system.
We hold individual meetings with institutional investors and analysts. I create materials and provide information on the company as is suitable in response to requests for IR interviews after the end of a quarter.
In the future, I want to help shareholders and investors have a better understanding of Hodogaya Chemical Group.
