Corporate Governance Report
Last Update: December 17, 2021

JSR Corporation.

President & Representative Director, COO
Nobuo Kawahashi
Contact: Yoshiko Takeda
Securities Code: 4185
https://www.jsr.co.jp/jsr_e/
The corporate governance of JSR Corporation (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Profile and Other Basic
Information
1. Basic Views
It is the JSR Group's goal to make steady progress in realizing its corporate mission (Materials Innovation: We
create value through materials to enrich society, people and the environment). This shall be done through efficientand transparent business management, by sustaining sound and healthy business practices. The Group will also
continuously strive to create new corporate value with the hope of becoming an attractive corporation that can earn
the trust of and satisfy the interests of all our stakeholders.
As a company with audit & supervisory board members, JSR principally monitors and oversees the execution ofduties by directors and the management through its Board of Directors and audit & supervisory board members.
The Company continuously has strengthened the function of management supervision, improved efficiency indecision making and business duties execution, and enhanced the transparency and soundness of its business
management to raise corporate value over the medium to long-term. To that end, it has implemented measures,such as introduction of an officer system, appointment of outside directors and audit & supervisory board members
who are independent from the Company and have extensive business experience and expertise, establishment of
the Remuneration Advisory Committee and the Nomination Advisory Committee each of which majority members
are independent outside directors and the chair of which is a lead independent outside director respectively, andthe introduction of three types of performance-based remuneration for directors other than outside directors
covering short, medium and long term.
JSR has three (3) audit & supervisory board members, of which two (2) are independent outside audit &supervisory board members with extensive experience and expertise (currently one is a lawyer and the other is acertified public accountant qualified as a certified public tax accountant as well) and thereby has strengthened theirfunctions in monitoring and overseeing management. Additionally, the Company has strived to ensure and improvethe effectiveness of internal control by systematically conducting internal audits through an organization(“Corporate Audit Department”) specialized in internal audit which is independent from business divisions andreporting directly to the CEO (Chief Executive Officer) and the president, by strengthening collaboration between
the Corporate Audit Department and audit & supervisory board members and by instituting a reporting system
whereby important issues are reported by directors and employees to the audit & supervisory board members when
deemed necessary.
JSR will continue focusing on the enhancement of corporate governance as an important management challenge.

-1-[Reasons for Non-compliance with the Principles of the Corporate Governance Code]JSR has complied with all of the Principles of the Corporate Governance Code[Disclosure Based on the Principles of the Corporate Governance Code]UpdatedAll principles are based on the Corporate Governance Code as revised in June 2021.
[Principle 1-4] Cross-shareholdings(1) Policies for holding listed shares as cross-shareholdings
1) JSR holds listed shares as cross-shareholdings* only after comprehensively reviewing the rationality ofholding such shares in the light of business management strategies and economics of such shareholdings
while it has been reducing cross-shareholdings when holding such shares has become irrational.
2) The Board of Directors periodically reviews the status and the policies for holding individual crossshareholdings by taking such factors into consideration as the purpose of holding, potential risk andexpected return, and cost of capital required for holding such individual shares.
Number of issues of cross holding shares of listed companies held by the Company and number ofissues of which shares increased or decreased during the fiscal year are as follows;

Total number of issues
Number of issues of which shares
increased during the fiscal year
Number of issues of which shares
decreased during the year

FY ending
Mar 2020

FY ending
Mar 2021

19

18

1

1

10

6

(2) Policies for exercising voting rights
When exercising voting rights of cross-shareholdings, JSR comprehensively determines to vote for or against
their proposals after reviewing whether or not their corporate governance system and proposals willcontribute to the improvement of their corporate value over the medium and long-term.
*Cross-shareholding: There are cases where listed companies hold the shares of other listed companies
for reasons other than pure investment purposes, for example, to strengthen business relationships.
Cross-shareholdings here include not only mutual shareholdings but also unilateral ones.
[Principle 1-7] Transactions with related parties(1) In accordance with the Companies Act and JSR’s “Regulations of the Board of Directors”, JSR has obtained
the Board of Directors’ prior approval for competitive and conflict-of-interest transactions and reported
important facts regarding such transactions to the Board of Directors after completion.
(2) In accordance with applicable laws and regulations, JSR has disclosed the outline of transactions with relatedparties in notes to consolidated financial statements of the Securities Report and notes to non-consolidated
financial statements of the ordinary general meeting of shareholders.
(3) JSR has been determining the terms and conditions for the transactions with major shareholders bynegotiating prices considering market conditions in the same way as it deals with third parties.
[Supplementary Principle 2-4-1] Ensuring diversity in the appointment of core personnel-2-Please refer to “3. Measures to Ensure Due Respect for Stakeholders” of “III. Implementation of Measures for
Shareholders and Other Stakeholders” of this Corporate Governance Report for details on JSR’s efforts to ensure
diversity in the appointment of core personnel.
[Principle 2-6] Corporate Pension Funds as Asset Owners(1) With regard to management of JSR Pension Fund (the “Fund”), the Fund appoints general manager ofFinance Department of JSR as its managing officer responsible for management of the Fund as well as
receives appropriate advices from an outside advisor highly specialized in this field. Asset Management
Committee of the Fund, consisting of members of Finance Department including officer in charge andmembers of the Fund including its chief director, each of whom having sufficient knowledge and expertisein pension fund management, periodically monitors and discloses the status of fund management to thebeneficiaries of the Fund and the minutes of the committee meeting.
(2) There is no concern over the conflicts of the interest between the Company and the beneficiaries of the Fundbecause;1) the board of the representatives of the Fund, a half of which consists of leading members of the labor
union representing the beneficiaries, makes material decisions on asset management, based on the
deliberations of Asset Management Committee, and2) the leading members of the labor union periodically participate in the audit of fund management acting
as auditing officers.
[Principle 3-1 (i)] Disclosure of corporate mission and business plan
(1) JSR sets its corporate mission as follows:
Materials Innovation: We create value through materials to enrich society, people and the environment.
(2) JSR has, for the purpose of achieving its corporate mission, established group-wide management policies
consisting of two basic components; “Fundamental Pillars of Management” representing general policies for
ensuring sustainable growth and “Responsibility to Our Stakeholders” representing JSR’s commitment as agood corporate citizen.
For details of the corporate mission and management policies, "the JSR Group’s Essential Elements",
please visit the following site:
https://www.jsr.co.jp/jsr_e/company/mission.html(3) In FY ending March 2021, the announcement of the new med-term business plan had been postponed dueto the worldwide spread of the COVID-19, but after that the Company formulated and disclosed a new medterm management policy. The vision of the policy is to create value for all stakeholders with the aim ofachieving sustainable growth and to create a resilient organization that adapts to all environmental changes.
The policy positions the Semiconductor Business and the Life Sciences Businesses as strategic growth
drivers and aims to achieve ROE of at least 10% and core operating income of at least JPY 60 billion by FY
ending March 2025.
For details of the Medium-Term Management Policy, please refer to:https://ssl4.eir-parts.net/doc/4185/ir_material_for_fiscal_ym5/97981/00.pdf[Principle 3-1 (ii)] JSR’s basic approach towards and policy on corporate governance(1) Basic policy
1) It is the JSR Group's goal to make steady progress in realizing its corporate mission (Materials
Innovation: We create value through materials to enrich society, people and the environment). This shallbe done through efficient and transparent business management, by sustaining sound and healthybusiness practices. The Group will also continuously strive to create new corporate values with the hope

-3-

2)

of becoming an attractive corporation that can earn the trust of and satisfy the interests of all our
stakeholders.
The Company therefore has been and will continue focusing on the enhancement of corporate
governance as an important management challenge.

(2) Corporate governance structure1) As a company with audit & supervisory board members, JSR principally monitors and oversees theexecution of duties by directors and the management through its Board of Directors and audit &supervisory board members.
2) JSR has continuously strengthened the function of management supervision, improved efficiency indecision making and execution of business duties, and enhanced the transparency and soundness ofbusiness management through the introduction of an officer system and the appointment of outside
directors and audit & supervisory board members, who are independent from the Company and haveextensive business experience and a high level of expertise.
3) The Board of Directors established JSR’s corporate mission and makes important decisions including
those of the Company’s business strategies.
4) The Board of Directors developed an environment where management can take appropriate risks anddemonstrate entrepreneurship through the introduction of a performance-based director remuneration
framework.
5) The Board of Directors supervises directors and management through the assessment of businessperformance and appointment of directors.
6) The current Board of Directors consists of nine (9) directors, four (4) of whom are independent outside
directors with vast experience and extensive expertise in management of corporations and businesses.
In the future, the Company will elect 1/3 (one third) or more independent outside directors with similar
expertise in order to increase corporate value and oversee business management. Koichi Kawasaki, who
is a Director and Executive Managing Officer, serves as the board’s chairperson.
7) The current Audit & Supervisory Board consists of three (3) audit & supervisory board members, two(2) of whom are independent outside audit & supervisory board members with extensive andsophisticated expertise (one is a lawyer and the other is a certified public accountant qualified as acertified public tax accountant as well). In the future, the Company will elect two independent outside
audit & supervisory board members with vast experience and extensive and sophisticated expertise insuch fields as law, accounting, and etc., to effectively audit the execution of duties by directors and the
management.
8) JSR established the Remuneration Advisory Committee of which majority members are independent
outside directors and the chair of which is Yuzuru Matsuda, who is the lead independent outside director,
in order to ensure the objectivity and transparency of its directors’ remuneration framework. The
committee deliberates the basic policy of remuneration, the remuneration structure, the mechanism ofa performance-based remuneration, the setting of targets, and assessment of performance, and submits
its findings to the Board of Directors.
9) JSR set basic policies on remuneration of directors as follows: the remuneration framework should
increase corporate value over the medium and long-term, attract diverse and superior personnel, belinked to short-term, medium-term and long-term business performance, have management andshareholders share profits, and ensure high transparency. Remuneration for directors consists of a fixedbasic remuneration, an annual bonus linked to the attainment level of business performance in eachfiscal year, a performance-related stock remuneration to be granted after the applicable period (hereinafterreferred to as “Performance Share Units”), and restricted stock shares as remuneration designed tofacilitate earlier sharing of corporate values between directors and the shareholders of the Company. In
light of their roles, remuneration for outside directors and audit and supervisory board members consistsof basic remuneration only.
10) JSR established the Nomination Advisory Committee of which majority members are independent
outside directors and the chair of which is Yuzuru Matsuda, who is the lead independent outside director,-4-

to ensure the transparency of the policy and procedures of nominating candidates for directors. The
committee deliberates criteria for the size (number of people) and diversity in terms of breadth ofknowledge, experience, capability, gender, international consciousness, work history, age, and otherfactors necessary for the Board of Directors as well as criteria and procedures for nominating and/or
identifying candidates for future appointment as CEO and/or the president, directors, officers withdirectorship status (including senior officers), and audit & supervisory board members, and submits its
findings to the Board of Directors.
In order to ensure transparency of the deliberation, the committee takes such necessary measures as
discussion solely among outside independent directors for the agenda relating toappointment/reappointment or dismissal of CEO and/or the president. The committee, through its active
involvement in the selection process, systematically develops and selects candidates for the successor
to CEO and/or the president in an objective and transparent manner by providing the pool of candidates
with necessary training and coaching.
(3) Relationship with stakeholders
1) JSR established “Responsibility to Our Stakeholders” (responsibility to customers, business partners,
employees, society, and shareholders) as one of the important pillars of its management policies in order
to express its commitment to its stakeholders.
2) JSR appropriately responded to issues related to sustainability, such as social and environmental issues
and also promoted measures to secure diversity including those for encouraging greater participation of
female employees.
For details of JSR’s Sustainability report, please visit the following site:
https://www.jsr.co.jp/jsr_e/sustainability/index.shtml
3) To fulfill its commitment to its stakeholders as stated in its “Responsibility to Our Stakeholders”, theJSR Group established “the JSR Group Principles of Corporate Ethics” as a code of conduct for its
directors and employees and endeavored to ensure the code is thoroughly communicated to, andunderstood and observed by all directors and employees.
https://www.jsr.co.jp/jsr_e/sustainability/2021/governance/compliance.shtml(4) Securing the rights and equal and equitable treatment of shareholders
1) JSR has continued to develop an environment where shareholders can appropriately exercise theirvoting rights at the ordinary general meeting of shareholders.
2) JSR will continue to implement the following measures: holding an ordinary general meeting ofshareholders earlier than other companies (in the middle of June each year); disclosing the contents of
the notice of convocation via internet prior to the date of dispatching such materials; introducing anelectronic voting platform via the Internet, etc.; participating in the electronic voting platform for
institutional investors; enhancing contents of the convocation notice; and translating the convocation
notice into English, etc.
For details of materials prepared for its ordinary general meeting of shareholders, please visit thefollowing site: https://www.jsr.co.jp/jsr_e/ir/library/shareholder.html
3) JSR will explain its basic idea on its capital policies to shareholders. Especially in the case of thosepolicies that may undermine the interests of existing shareholders, such as introducing takeover defense
measures, MBO, and increase in capital stock, etc., the Company is determined to sufficiently examine
their necessity and rationality and to take appropriate procedures to ensure sufficient explanation toshareholders.
4) JSR holds listed shares as cross-shareholdings only after comprehensively reviewing the rationality ofholding such shares in the lights of business management strategies and economics of suchshareholdings while it has been reducing cross-shareholdings when holding such shares has become
irrational. The Board of Directors periodically reviews the status and the policies for holding individualcross-shareholdings by taking such factors into consideration as the purpose of holding, potential risk
and expected return, and cost of capital required for holding such individual shares. When exercising-5-

voting rights of cross-shareholdings, the Company comprehensively determines to vote for or against
their proposals after reviewing whether or not their corporate governance system and proposals willcontribute to the improvement of their corporate value over the medium and long-term.
(5) Capital policy
1) While prioritizing growth investment to continuously create corporate value, JSR has been aiming at
providing appropriate returns to shareholders, including combination of dividends and treasury stockacquisitions, by taking into account its business performance and medium and long-term capitalrequirements.
2) JSR has been managing its businesses bearing the cost of capital in mind by using the cost of capital as
reference for decisions for investment and evaluation of the businesses and by introducing ROI target
as a reference to determine performance-linked remuneration to the directors other than outside
directors and to the officers of the Company. The Company has been and will be continuously
endeavoring to improve capital efficiency indices, such as ROE and ROIC.
(6) Dialogue with shareholders
1) JSR has been promoting constructive dialogue with shareholders in the following manner.
a JSR appoints an officer in charge of IR. CEO, the president or the officer in charge of IR explains
business performance, financial positions, and the details and progress of the mid-term businessplan at the quarterly analyst meeting and mid-term business plan explanatory annual meeting for
institutional investors.
b Every year, CEO, the president or the officer in charge of IR holds interviews with institutional
investors in Japan and overseas to explain the above matters. In addition, the Company establishes
opportunities for directors, including independent outside directors, to engage in dialogue asnecessary.
c Opinions and questions that JSR receives from investors through the above-mentioned dialogues
are periodically fed back to management.
2) In dialogues with shareholders, JSR has strived to appropriately treat insider information.
(7) Information disclosure policy
1) JSR established its information disclosure policy and prepared organizations and systems for
information disclosure. The Company has strived to ensure prompt, accurate, active and fair disclosureof information by establishing a company-wide cooperative framework to improve the quality of
information disclosure.
2) With the aim of actively providing company information to shareholders and investors, JSR has been
posting such information on its website as corporation information including business performance,
financial position, and details of main businesses, sustainability promotion activity including CSR
information such as efforts to conserve the environment and responsible care (RC), and research anddevelopment (R&D) activities.
[Principle 3-1 (iii)] Policy and procedures to decide remuneration for management and directors
JSR established the Remuneration Advisory Committee of which majority members are independent outside
directors and the chair of which is Yuzuru Matsuda, who is the lead independent outside director, to ensure theobjectivity and transparency of its directors’ remuneration framework. The Remuneration Advisory Committee
deliberates the basic policy of remuneration, the remuneration structure, the mechanism of a performance-based
remuneration, the targets, and assessment of performance, and submits its findings to the Board of Directors.
For details, please refer to II. 1. [Director Remuneration] Disclosure of Policy on Determining Remuneration
Amounts and Calculation Methods on page 20 of this Corporate Governance Report in English.
[Principle 3-1 (iv)] Policy and procedures for electing/dismissing members of management and nominating
candidates for director and audit & supervisory board member-6-(1) Nomination Advisory Committee
1) JSR established the Nomination Advisory Committee of which majority members are independent
outside directors and the chair of which is Yuzuru Matsuda, who is the independent outside director, toensure the transparency of the policy and procedures of nominating candidates for directors, audit &supervisory board member and officers with directorship status (including senior officers). At thecommittee, any of the members is not eligible for voting in the agenda in which such member has special
interest.
2) The committee deliberates criteria for the size (number of people) and diversity in breadth ofknowledge, experience, capability, gender, international consciousness, work history, age, and otherfactors necessary for the Board of Directors; criteria and procedures for the nomination, and candidates
for future appointment as CEO and/or president, directors, officers with directorship status (including
senior officers), and audit & supervisory board members; and submits its findings to the Board of
Directors.
3) The committee systematically develops and selects candidates for the successor to CEO and/or thepresident in an objective and transparent manner by providing the pool of candidates with necessary
training and coaching to enhance skills and leadership and by actively participating in selection process
through interviews etc.
4) CEO and/or the president submit to the committee an annual report on management activities including
a broad range of strategic ones. Based on the report, the committee assesses the business result andperformance of CEO and/or the president and advises the Board of Directors whether or not
improvement in management quality is necessary.
5) The committee will deliberate and report to the Board of Directors in a timely fashion when thecommittee judges there arises a reason that necessitates dismissal of directors including CEO. In orderto ensure transparency of the deliberation, the committee takes necessary measures as deliberation
solely among outside independent directors for the agenda relating to appointment/reappointment or
dismissal of CEO.
6) Upon receipt of the aforementioned annual management activities report and based on the businessresult and performance evaluation of CEO and/or the president as well as business circumstances andeconomic outlook, etc., the committee annually deliberates and judges appropriateness of theappointment, dismissal of CEO and/or the president and terms of office.
(2) Criteria for nominating candidates for directors
When nominating candidates for directors, JSR makes it a rule to secure the breadth of knowledge,
experience, capability, diversity, and size (number of people)―as well as the appropriate balance among
those attributes―that the Board of Directors requires to make important management decisions andoversee the execution of duties in appropriate and timely fashion, and it nominates persons who arementally and physically sound and have an exceptional personality and personal magnetism, and highprinciples and ethical view. For the knowledge, experience, and capability essential for the Board of
Directors, JSR has identified specific elements based on the medium- to long-term management policies
and strategies, and presents them in the form of a Skills Matrix. Please refer to “[Supplemental Principle
4-11-1] Concept of balance of knowledge/experience/capability, diversity and size of the Board of
Directors as a whole” below for details on this Skills Matrix.
(3) Criteria for nominating candidates for audit & supervisory board member
1) From the perspective of ensuring the transparency and soundness of business management throughauditing the process of directors’ decision making and execution of duties in accordance with laws andregulations, such as the Companies Act, the articles of incorporation and internal rules, JSR nominates
persons with vast experience and extensive and sophisticated expertise necessary for audit (including
one person with sufficient knowledge of finance and accounting) among those who are mentally andphysically sound and have an exceptional personality and popularity, and high principles and ethical
view.

-7-

2)

Regarding candidates for outside audit & supervisory board members, in particular, JSR nominates persons who have independence and extensive experience and knowledge of laws and accounting.

[Principle 3-1 (v)] Reasons for nominating individual candidates for director and audit & supervisoryboard member
For details of the reasons for nominating individual candidates for outside directors and audit & supervisoryboard members, please refer to the materials for the ordinary general meeting of shareholders and [Directors]
and [Audit & Supervisory Board Member] of “1. Organizational Composition and Operation” in “II. Business
Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution ofBusiness, and Oversight in Management” of this Corporate Governance Report.
JSR has been disclosing the reasons for nominating candidates for inside directors and audit & supervisory board
members in the reference materials attached to the notice of convocation of ordinary general meeting ofshareholders.
[Supplementary Principle 3-1-3] Sustainability initiatives, investment in human capital and intellectual
property

JSR has overhauled its long-held sustainability initiatives in 2020, and took its first step toward a new type ofsustainability management in which environmental considerations, solutions to social issues, and governanceinitiatives are integrated with business. In other words, JSR has further augmented its existing CSR activities into
activities to promote sustainability (co-creation between the company and society), and has organized andimplemented priority management themes that take sustainability into account. These activities will take morethan just the conventional ESG perspective, as they will also make a contribution toward achieving the United
Nations’ Sustainable Development Goals (SDGs).
In June 2020, JSR established the Sustainability Promotion Committee (SPC) as an advisory body to the Boardof Directors. Its job is to promote sustainability management. Four committees were established under the SPC:
the Sustainability Planning Committee; the Environment, Safety and Quality Committee; the Risk Management
Committee, and the Corporate Ethics Committee. The SPC oversees and guides the activities of these fourcommittees, and endeavors to strengthen and promote management through regularly scheduled meetings held
four times a year as well as extraordinary meetings.
JSR uses this structure as the basis for engaging in comprehensive deliberations and decisions when formulating
business strategies and making investments and loans (including investments in human capital and intellectual
property). These deliberations and decisions are conducted based on the “JSR Group Management Policies,” the“JSR Group Course of Action’s 4Cs,” and other related policies as well as on key matters relating to social andenvironmental issues. In this way, JSR will continue to strengthen its governance with respect to social andenvironmental issues.
In 2021, JSR announced a new set of five-year medium-term Management Policy that will end in the fiscal year
ending March 2025. In its management going forward, JSR will use these policies as a guide in establishing aresilient organization for adapting to a dynamically changing environment. To achieve this, JSR will ensure thepenetration of five “Foundations” throughout its organization as a form of corporate cultural reform. Thesefoundations are centered on the concept of Sustainability in the sense of “creating value for all stakeholders” andinclude deepening the Company’s Innovative Culture, promoting Digitalization, expanding Globalization(including responses to geopolitical risks), and strengthening Operational Excellence to support these efforts. The
Company will also specify JSR Group’s materiality in terms of both business activities and management
infrastructure, and incorporate it into the priority items, approaches, and numerical targets of each. JSR will
establish the main activity items here as key KPIs in the medium-term Management Policy.
Climate change should now be seen as a climate crisis. The Company recognizes climate change as an importantmanagement issue and aims to help bring about a “society that keeps average temperature rise to 1.5 degrees
Celsius,” as indicated by the Paris Agreement. As proactive steps toward bringing about a decarbonized societyin accordance with the Paris Agreement’s long-term goals, JSR is strengthening its governance structure,
analyzing the impact of climate change on its business, and promoting initiatives for seizing climate change as
an opportunity for growth and responding appropriately to risks. In October 2020, JSR announced its support for-8-the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) that was establishedby the Financial Stability Board (FSB). JSR further declared its commitment to Net Zero by 2050 in March 2021.
The interim results of scenario analyses concerning opportunities and physical risks resulting from climate change
were disclosed in the Sustainability Report 2021. JSR will continue to enhance its information disclosure andpromote sustainability management by applying the TCFD’s recommendations as a benchmark for verifying theappropriateness of its climate change response. In addition, JSR compiles and discloses (with reviews) data on
environmental, social, and governance issues as “ESG Data” on its website. It also discloses the progress of its
sustainability initiatives.
Please refer to the “JSR Report 2021,” “Sustainability Report 2021,” and JSR’s website for details on its“sustainability management” initiatives, related policies, and investments in human capital and intellectual
property.
JSR Report 2021
https://www.jsr.co.jp/jsr_e/ir/library/annual_csr_report.html
Sustainability Report 2021
https://www.jsr.co.jp/jsr_e/sustainability/
Investments in human capital
https://www.jsr.co.jp/jsr_e/sustainability/2021/society/labor_environment.shtml
https://www.jsr.co.jp/jsr_e/sustainability/2021/society/workstyle_innovation.shtml
https://www.jsr.co.jp/jsr_e/sustainability/2021/society/diversity.shtml
Investments in intellectual property
https://www.jsr.co.jp/jsr_e/rd/[Supplementary Principle 4-1-1] Scope of the authorization for management(1) The Board of Directors shall make decisions on issues, in addition to those treated as a prerogative of theBoard of Directors by laws and regulations and the articles of incorporation, of the following important onesprescribed in “JSR’s Regulations of the Board of Directors”.
1) Issues related to an ordinary general meeting of shareholders
2) Issues related to directors and officers
3) Issues related to financial results4) Issues related to stocks and corporate bonds5) Issues related to fundamental management initiatives, management policies, and business plans
6) Issues related to important operations (according to the amount criteria, etc.)(2) For the issues other than the above, the Company delegates decision making authorities to persons listed
below in accordance with its “Regulations on Decision Making Authority” depending upon nature andimportance thereof;1) Decision by CEO or the president after deliberation at the Executive Committee.
2) Decision by CEO or the president
3) Decision by an officer in charge
4) Decision by a head in charge of business department[Principle 4-9] Criteria for judging the independence of independent outside directors
JSR has set its original criteria for judging the independence of independent outside directors and audit &supervisory board members. For details, please refer to “Matters relating to Independent Directors/Audit &Supervisory Board Member” in [Independent Directors/Audit & Supervisory Board Member] of “1.
Organizational Composition and Operation” in “II. Business Management Organization and Other Corporate-9-Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management” of thisCorporate Governance Report.
[Supplementary Principle 4-10-1] Concept with respect to the independence of committee composition,authority, and roles
The Company established the Nomination Advisory Committee and the Remuneration Advisory Committee as
voluntarily established advisory bodies of the Board of Directors. Please refer to “[Principle 3-1 (iv)] Policy andprocedures for electing/dismissing members of management and nominating candidates for director and audit &supervisory board member” for details.
[Supplementary Principle 4-11-1] Concept of balance of knowledge/experience/capability, diversity, andsize of the Board of Directors as a whole
With the aim of overseeing important management decision making and the execution of duties in appropriate
and timely fashion in order to increase corporate value over medium and long-term, JSR considers it importantthat the Board of Directors as a whole effectively utilize the skills possessed by internal and outside directors,
including their abundant knowledge, experience and capabilities in the fields of corporate management andbusiness operations, research and development, manufacturing, manufacturing technology, intellectual property,
human resources, finance and accounting, governance, legal affairs, compliance, and risk management, andensure that skills, size (number of people) and the appropriate balance between them that the Board of Directors
requires are available at any given time.
Skills Matrix for Directors and Audit & Supervisory Board Members
Directors
Name

1
2
3
4
5
6
7
8
9

Mr. Eric Johnson
Mr. Nobuo Kawahashi
Mr. Koichi Kawasaki
Mr. Hideki Miyazaki
Ms. Mika Nakayama
Mr. Yuzuru Matsuda
Mr. Shiro Sugata
Mr. Tadayuki Seki
Mr. David Robert Hale

Independent Outside Director
Independent Outside Director
Independent Outside Director
Independent Outside Director

Audit & Supervisory Board Members
1 Mr. Tomoaki Iwabuchi
2 Ms. Hisako Kato
Independent Outside A&SB member
Independent Outside A&SB member
3 Ms. Junko Kai

Years
Expertise and experience in core
Corporate
Legal affairs/
inSales & Manufacturing/R&D/ Finance &business domain
management
compliance/
Sustainability Globalization
marketing Intellectual property accounting
officeexperiencerisk management
Digital Solutions Life Sciences
2
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
5
✔
5
✔
✔
✔
3
✔
✔
✔
✔
✔
✔
1
✔
6
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
5
✔
✔
✔
✔
4
✔
0
✔
✔
✔
✔
✔

1
7
0

✔
✔

✔
✔
✔

✔
✔
✔

✔
※Yeas in office is as of June 17, 2021

In order to cope with the drastic changes in business circumstances such as globalization, advance in Information
Technologies and digitalization, the Company appointed, upon resolutions of AGM and the Board of Directors,
the first non-Japanese CEO stationed in the US and responsible for global business management of the Company
and the COO and President stationed in Japan and supporting the CEO in FY ending March 2020. At the AGM
held on June 17, 2020, a proposal for the election of a female director from within the Company was approved,
and at the AGM held on June 17, 2021, a proposal for the election of a foreign-registered outside director, who
has been engaged in global management, business transformation and expansion as a partner of an investmentcompany that invests over the long term, and as a director of an investee company, was approved.
JSR will continue to ensure the knowledge, experience, capability, and diversity that are essential for the Boardof Directors and maintain its optimum size but not exceeding 12 people in accordance with the deliberation to bemade by the Nomination Advisory Committee and with its business strategies in the future. Please refer to“[Principle 3-1 (iv)] Policy and procedures for electing/dismissing members of management and nominating
candidates for director and audit & supervisory board member” above for details on JSR’s policy and procedures
concerning the appointment of directors.

- 10 -

[Supplementary Principle 4-11-2] Positions concurrently held by directors and audit & supervisory board
members(1) Outside directors and audit & supervisory board members had a high attendance rate (100%) at Board of
Directors and Audit & Supervisory Board meetings and spared sufficient time to perform their roles andduties since they understood the schedule of the Board of Directors and the Audit & Supervisory Board
meetings before assuming their office and received notice of the meeting well in advance after assuming
their office.
(2) Regarding the positions concurrently held by the directors and audit & supervisory board members, pleaserefer to business report and reference materials attached to the notice of convocation of ordinary general
meeting of shareholders as well as “Outside Directors’ Relationship with the Company (2)” in [Directors] of“1. Organizational Composition and Operation” in “II. Business Management Organization and Other
Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight inManagement” of this Corporate Governance Report..
[Supplementary Principle 4-11-3] Analysis and evaluation on the effectiveness of the Board of Directors
The Board of Directors of the Company has been conducting an evaluation of its effectiveness in order tomaximize corporate value of the Company by enhancing its effectiveness. The following is the summary of theresults of the board effectiveness evaluation in FY ending March 2021.
1. Overview of Evaluation Results
1) Evaluation process
We have conducted a questionnaire survey targeting our company’s nine directors (including three
independent outside directors) as well as three audit & supervisory board members (including two
independent outside auditors). We have evaluated and analyzed the results of the evaluation by setting up
discussion sessions at the Board of Directors meetings several times to discuss the results of thequestionnaire as well as the comments expressed in the questionnaire. To improve objectivity in the FY
ending March 2021 evaluation process, we have hired a third party that has expertise in the fields ofinterviewing the Representative Director / CEO and the Representative Director / COO, analyzing andevaluating the results of the questionnaire as well as reporting those results to the Board of Directors.
2) Conclusion
We have reached the conclusion that “our company’s Board of Directors is functioning effectively.”3) Primary reasons why we have come to the conclusion that our company’s Board of Directors is functioning
effectively
・Our company’s Board of Directors comprises inside and outside directors as well as audit & supervisoryboard members. The board has the right composition in terms of diversity (e.g. nationality, gender, etc.).
The Board of Directors is functioning as a meeting structure to encourage discussions on improving the
mid-to long-term corporate value as well as the supervision of operations execution while the members of
the board are making use of their experiences and knowledge respectively.
・To run the Board of Directors, significant management challenges, risks, etc. are brought up for discussion
in a timely manner, and sufficient information is provided to outside board members prior to board
meetings so that they can participate in free and lively discussions that will take place during the board
meetings.
・The Nomination Advisory Committee and the Remuneration Advisory Committee have the adequate
composition respectively, and the members of these committees adequately report the results of their
discussions to the board after having sufficient discussions while ensuring independence and objectivity.
By doing so, these two committees reinforce the supervisory functions of the Board of Directors.
・The Board of Directors considers that communicating with investors and shareholders is their significant
role and responsibility. The board strives to reflect capital market expectations in the company’s
operations as well as the performance of their duties and to maximize corporate value by having
discussions on the status of their activities every quarter and talking directly with shareholders andinvestors.

- 11 -

4) Important points that we should take note of in the results of the evaluation
The board members made comments, proposals, or pointed out problems on almost all the evaluation items
when answering open-ended questions in the questionnaire. The following are the key points that they havemade in this year’s survey.
(Excellent points)(1) Outside directors account for more than a third of the board. The director from a different country andthe female director are members of the board. The composition of our Board of Directors is adequate interms of the balance between knowledge, experience, and capability as well as diversity.
(2) The board members have a common understanding of the significant management challenges (implement
growth strategies, carry out structural reforms, etc.) and business environment risks (trends in environmental
problems, geopolitical risks, etc.) and are having sufficient discussions on those challenges and risks at board
meetings.
(3) Outside directors and audit & supervisory board members have a collaboration system in place outside
the Board of Directors. They communicate with each other and prepare for discussions that will take place
during board meetings.
(Points that require improvement)(1) To further promote digital transformation across the entire JSR Group, we need a person who has
expertise in the IT and digital fields. It is preferable to appoint someone who has management experience inthe relevant fields as outside director. It is also preferable for us to continue discussions on the compositionof the board, for example changing its composition so that the board will have more outside directors (= ahigher percentage of outside directors).
(2) To further deepen discussions in board meetings, we need to reinforce our support system for outside
directors by giving them more opportunities for training, education, and provision of information on JSRGroup’s businesses.
(3) It is desirable that the Remuneration Advisory Committee continuously review and revise theremuneration system from a global standpoint.
(4) Since the Board of Directors deeply realizes the importance of sustainability management, they need tofurther discuss specifically what types of activities they should promote to support the sustainability
management.
2. Future activities
The Board of Directors will discuss the following significant challenges that they have confirmed while
evaluating the effectiveness of the board as well as the changes in external environment (environmental
problems and geopolitical risks such as the US-China relations, etc.) that have an impact on the challenges. The
board will also monitor the progress of the activities that have been implemented to address these challenges
while also identifying the changes in roles and qualities necessary for the Board of Directors, and continuously
reviewing and revising the composition of the board and its discussion topics.
(Significant management challenges)(1) Establish a resilient business structure and reinforce the management system so that the company can
respond to changes in business environment.
(2) Implement growth strategies for the company’s core businesses, the semiconductor and life sciencesbusinesses.
(3) Carry out the structural reforms of the elastomer business.
(4) Address challenges to achieve sustainable business growth (e.g. carbon neutrality).
(5) Continue to invest in innovations including digital transformation.
[Supplementary Principle 4-14-2] Policy for training directors and audit & supervisory board members- 12 -

(1) JSR provides newly elected officers—future candidates for directors—with opportunities to participate inoutside seminars for newly elected directors.
(2) JSR provides newly elected outside directors and audit & supervisory board members with opportunities toparticipate in the introduction education and factory and research institute tours to deepen theirunderstanding of the Company and its businesses.
(3) When a Board of Directors meeting is held, JSR regularly picks up key issues closely related to its businesses
as “A Specific Theme for Review and Discussion” and thereby provides an opportunity to exchange opinions
on such themes. This opportunity helps directors and audit & supervisory board members not only deepen
their understanding of the Company’s business challenges but also promote communication between board
members.
(4) JSR holds regular seminars by outside lecturers prior to the ordinary general meeting of shareholders toreview the status of corporate governance in general and legal reforms.
[Principle 5-1] Policy on constructive dialogue with shareholders
JSR has implemented the following measures to promote constructive dialogue with shareholders and investors.
(1) An officer, who is responsible for Finance Department and Corporate Communications Department, takes
charge of IR activities and the Finance Department and the Corporate Communications Department jointly
assist dialogue with investors.
(2) JSR holds an analyst meeting every quarter and a mid-term business plan explanatory meeting every fiscal
year. In such meetings, CEO, the president or an officer in charge of IR explains business performance,
financial position, details and progress of the mid-term business plan to analysts.
(3) Every year, CEO, the president or an officer in charge of IR holds interviews with major institutional
investors in Japan and overseas to explain the details and progress of the mid-term business plan. In addition,
the Company establishes opportunities for directors, including independent outside directors, to engage indialogue as necessary.
(4) JSR has been endeavoring to provide investors with the Company information on its website such as,
financial statement, that on mid-term business plans and progress thereof and on details of businessperformance of main businesses, as well as that on sustainability promotion activity including responsible
care or efforts to conserve the environment, and that on R&D activities.
(5) Opinions and questions that JSR receives from investors through the above-mentioned dialogues are fed
back to management as IR activities reports.
(6) In dialogues with shareholders, JSR has appropriately treated insider information (setting a silent period
from the start of a new fiscal year to the day of announcing business results, establishing regulations forpreventing insider trading, and conducting employee education seminars).

2.

Capital Structure
Foreign Shareholding Ratio

More than 30%- 13 -

[Status of Major Shareholders]

UpdatedName / Company Name

29,112,500
20,886,500

Percentage
(%)
13.54
9.71

12,104,900
9,883,253
6,525,160
6,166,244
3,716,586
3,709,356
3,631,110
3,325,064

5.63
4.60
3.03
2.87
1.73
1.72
1.69
1.55

Number of Shares Owned

The Master Trust Bank of Japan, Ltd. (trust account)
SSBTC CLIENT OMNIBUS ACCOUNT BRITISH VIRGINISLANDS/ U.K.
Custody Bank of Japan, Ltd. (trust account)
GOLDMAN SACHS & CO． REG
Bridgestone Corporation
MSCO CUSTOMER SECURITIES
Nippon Life Insurance Company
ML PRO SEGREGATION ACCOUNT
Meiji Yasuda Life Insurance Company
Mizuho Bank, Ltd.

Controlling Shareholder (except for Parent
none
Company)
Parent Company
Supplementary Explanation

none

UpdatedShareholding percentage is calculated by using 215,075,310 shares as a denominator which arrives from total
issued shares (226,126,145) less treasury shares (11,050,835).

3.

Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange (“TSE”)
First Section

Fiscal Year-End

MarchType of Business

Chemicals

Number of Employees (consolidated) as of theMore than 1000
End of the Previous Fiscal YearSales (consolidated) as of the End of the From ¥100 billion to less than ¥1 trillion /Previous Fiscal Year
Number of Consolidated Subsidiaries as of the From 50 to less than 100
End of the Previous Fiscal Year

4.

Policy on Measures to Protect Minority Shareholders in Conducting Transactions with
Controlling Shareholder
n.a.

5.

Other Special Circumstances which may have Material Impact on Corporate Governancen.a.

- 14 -

II Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management
1.

Organizational Composition and Operation
Organization Form

Company with Audit & Supervisory Board[Directors]
Maximum Number of Directors Stipulated in
12
Articles of Incorporation
Term of Office Stipulated in Articles of
1
Incorporation
Chairperson of the Board

Other Director

Number of Directors

9

Number of Outside Directors

4

Number of Independent Directors

4Outside Directors’ Relationship with the Company (1)NameAttribute

Relationship with the Company*
a
b
c
d
e
f
g

h
△
△
△

Yuzuru Matsuda
From another company
Shiro Sugata
From another company
Tadayuki Seki
From another company
David Robert Hale From another company* Categories for “Relationship with the Company”* ”○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past
* “●” when a close relative of the director presently falls or has recently fallen under the category;“▲”when a close relative of the director fell under the category in the past
a
b
c
d
e
f
g
h
i

i

j

k

Executive of the Company or its subsidiaries
Non-executive director or executive of a parent company of the Company
Executive of a fellow subsidiary company of the Company
A party whose major client or supplier is the Company or an executive thereof
Major client or supplier of the listed company or an executive thereof
Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as a director/audit & supervisory board member
Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal
entity)Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (thedirector himself/herself only)
Executive of a company, between which and the Company outside directors/audit & supervisory board member
are mutually appointed (the director himself/herself only)- 15 -

jk

Executive of a company or organization that receives a donation from the Company (the director himself/herself
only)
Others
Outside Directors’ Relationship with the Company (2)Name
YuzuruMatsudaShiro Sugata

Designation as
Supplementary Explanation of
Independent
the RelationshipDirector
Independent(1) Mr.
Matsudameets
theDirector
independence standards set forthby Tokyo Stock Exchange andthe “Criteria for judging
independenceofoutsidedirectors and audit & supervisoryboard members”, as set forth in“Matters relating to Independent
Directors/Audit & Supervisory
Board Member” in this report.
Accordingly, JSR has determined
there is no risk of conflict ofinterest
withgeneralshareholders and has designatedhim as an independent director.
(2) There are some ongoingtransactions
involving
thecollection of royalty between thegroup companies of Kyowa
Hakko Kirin, Co., Ltd. (currently
known as Kyowa Kirin Co., Ltd.
and where Mr. Matsuda served as
President and Chief Operating
Officer) and those of JSR
Corporation. The value of suchtransactions amounts to less than
0.1% of JSR’s consolidated net
sales for the business year endingin March 2021.
Independent
Director(1) Mr.
Sugatameets
theindependence standards set forthby Tokyo Stock Exchange andthe “Criteria for judging
independenceofoutsidedirectors and audit & supervisoryboard members”, as set forth in“Matters relating to Independent
Directors/Audit & Supervisory
Board Member” in this report.
Accordingly, JSR has determined
there is no risk of conflict of- 16 -

Reasons of Appointment
Mr. Matsuda served as the President
and Chief Operating Officer of
KYOWA HAKKO KOGYO CO., LTD
and Kyowa Hakko Kirin, Co., Ltd(currently known as Kyowa Kirin Co.,
Ltd.) as well as an Advisor to Kyowa
Hakko Kirin.
He has vast experience in corporate
management for global companies
especially in the field of medical
products and biochemical. He also
possesses the independent perspective
as outside personnel.
He has utilized his experiences andindependent viewpoints to help theCompany in making crucial decisions,to supervise the performance of duty at
the Board of Directors level, and tostrengthen the Company’s faircorporate
governancethroughenhancement of fair and reasonablebusiness judgment and transparent andsoundmanagement,
therebycontinually contributing further to theenhancement of JSR Group’s corporate
value.
He is, therefore, appointed again as an
outside director in the expectation that
he will continue to make similar
contribution.
Mr. Sugata served as the Representative
Director and President of USHIO INC.,
and the Corporate Advisor of thecompany. He also served as Vice
Chairman, Executive Director at theJapan Association of Corporate
Executives.
He has vast experience in the corporate
management of global companies
especially in the field of opticalapplication products and industrial
machineries and also has experienceTadayuki
Seki

Independent
Director

interest
withgeneralshareholders and has designatedhim as an independent director.
(2) There are some ongoingtransactions involving the salesof heat resistant transparent
resins and entrustment of repairof devices between the groupcompanies of USHIO INC.
(where Mr. Sugata served as
Representative Director andPresident,
andCorporate
Advisor) and those of JSR
Corporation. The values of suchtransaction in the current
business year ending in March
2021 amounted to less than 0.1%
of JSR Group’s consolidated
revenue and less than 0.1% of
those of USHIO INC. for theprevious business year ending inMarch 2020.

obtained through activities in thebusiness community, and possesses theperspectives as independent outside
personnel.
He has utilized his experiences andindependent viewpoints to help theCompany in making crucial decisions,to supervise the performance of duty at
the Board of Directors level, and tostrengthen the Company’s faircorporate
governancethroughenhancement of fair and reasonablebusiness judgment and transparent andsoundmanagement,
therebycontinually contributing further to theenhancement of JSR Group’s corporate
value.
He is therefore appointed again as an
outside director in the expectation that
he will continue to make similar
contribution.

(1) Mr. Seki meets the independence
standards set forth by Tokyo
Stock Exchange and the “Criteria
for judging independence ofoutside directors and audit &supervisory board members”, as
set forth in “Matters relating to
Independent Directors/Audit &Supervisory Board Member” inthis report. Accordingly, JSR has
determined there is no risk of
conflict of interest with generalshareholders and has designatedhim as an Independent director.
(2) There have been some ongoingtransactions involving the sales
and purchase of plastics between
the group companies of ITOCHU
Corporation (where Mr. Seki
servedas
Representative
Director and Executive Vice
President) and those of JSR
Corporation. The values of suchtransaction in the business year
ending in March 2021 amounted
to less than 0.5% of JSR Group’s
consolidated net sales and less

Mr. Seki served as the Representative
Director and Executive Vice President
at ITOCHU Corporation. He has vast
experienceinthecorporate
management of a general trading
company which operates a global
trading business and possesses theperspectives of independent outside
personnel.
He has utilized his experiences andindependent viewpoints to help theCompany in making crucial decisions,to supervise the performance of duty at
the Board of Directors level, and tostrengthen the Company’s faircorporate
governancethroughenhancement of fair and reasonablebusiness judgment and transparent andsoundmanagement,
therebycontinually contributing further to theenhancement of JSR Group’s corporate
value.
He is therefore appointed again as an
outside director in the expectation that
he will continue to make similar
contribution.

- 17 -

than 0.1% of those of ITOCHU
Corporation, respectively, for theprevious business year ending inMarch 2020.

David Robert Independent
Hale
Director(1) Mr. Hale meets the independence
standards set forth by Tokyo
Stock Exchange and the “Criteria
for judging independence ofoutside directors and audit &supervisory board members”, as
set forth in “Matters relating to
Independent Directors/Audit &Supervisory Board Member” inthis report. Accordingly, JSR has
determined there is no risk of
conflict of interest with generalshareholders and has designatedhim as an Independent director.
(2) ValueAct Capital Management,
L.P ("VAC"), where Mr. Haleserves as a partner, and theCompany have no businessdealings.

Mr. Hale is a partner of ValueAct
Capital Management, L.P ("VAC"), a
global investment firm which controls
ValueAct Capital Master Fund, L.P.
("VAC Funds"), a shareholder of theCompany. He has served on the Boardof Directors of several of VAC's
portfolio companies, and has extensive
experience helping companies manage,transform and grow their businesses.
He is expected to contribute his
experiences,international
understanding and outside andindependent viewpoints to help theCompany in making crucial decisions,to supervise the performance of duty at
the BOD level, and to strengthen the
Company’s fair corporate governancethrough enhancement of fair andreasonable business judgment andtransparent and sound management,
thereby continually contributing further
to the enhancement of JSR Group’s
corporate value. He is, therefore,
appointed as an outside director.

Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or Established
Remuneration Committee
Committee’s Name, Composition, and Attributes of Chairperson

Committee’s Name

Committee Corresponding to Committee
Corresponding
Nomination Committee
Remuneration Committee
Nomination Advisory Committee
Remuneration Advisory Committee

All Committee Members

66

Full-time Members

6

6

Inside Directors

22

Outside Directors

44Outside Experts

0

0

Other

0

0

- 18 -

toChairperson
Supplementary Explanation

Outside director

Outside director

Updated(1) Nomination Advisory Committee
1) JSR established the Nomination Advisory Committee of which majority members are outside directors
and the chair of which is a lead independent outside director in order to ensure the transparency of thepolicy and procedures of nominating candidates for directors and audit & supervisory board members.
For JSR’s policy and procedures for nominating candidates for director and audit & supervisory board
member, please refer to “[Principle 3-1 (iv)] Policy and procedures for electing/dismissing members ofmanagement and nominating candidates for director and audit & supervisory board member” under “1.
Basic Views” of “I. Basic Views on Corporate Governance, Capital Structure, Corporate Profile andOther Basic Information” of this Corporate Governance Report.
2) Composition of the Committee
In total 6 members consisting of 4 independent outside directors and 2 inside directors. Yuzuru Matsuda,
who is the lead independent outside director, serves as the chairperson.
3) Numbers, months, and attendance of the meeting in FY ending March 2021
The committee held in total 3 meetings in FY ending March 2021 (in April and July 2020 and in January2021), and all of the members including the chairman attended all of the meetings(2) Remuneration Advisory Committee
1) JSR has established the Remuneration Advisory Committee of which majority members are outside
directors and the chair of which is a lead independent outside director in order to ensure the objectivity
and transparency of its directors’ remuneration framework.
2) The committee deliberates the basic policy of remuneration, the remuneration structure, the mechanismof performance-based remuneration, the setting of targets, and the assessment of performance, andsubmits its findings to the Board of Directors.
3) Composition of the committee
In total 6 members consisting of 4 independent outside directors and 2 inside directors with attendanceof a third-party consultant as observer. Yuzuru Matsuda, who is the lead independent outside director,
serves as the chairperson.
4) Numbers, months, and attendance of the meeting in FY ending March 2021
In total 7 meetings were held in FY ending March 2021 (in April, June September, November, December
2020 and in February and March 2021), and all of the members including the chairman attended all of
the meetings.

[Audit & Supervisory Board Member]
Establishment of Audit & Supervisory Board

Established

Maximum Number of Audit & Supervisory Board
5
Member Stipulated in Articles of Incorporation
Number of Audit & Supervisory Board Member

3

Cooperation among audit & supervisory board member, independent auditors and Internal Audit Departments
Audit & supervisory board members receive audit plans and reports on the implementation of audits from theindependent auditors, exchange opinions on accounting matters as necessary, and discuss them, and then judge- 19 -

the appropriateness of the audit results obtained by the independent auditors. In addition, audit & supervisoryboard members confirm the balance of inventory and securities in cooperation with independent auditors.
Furthermore, audit & supervisory board members receive internal audit plans and reports of internal audit results
as they arise from the Corporate Audit Department, which is independent from other business divisions andreports directly to CEO and the president, strengthen cooperation with the Corporate Audit Department by
frequently exchanging opinions, and establish a framework that facilitates directors and employees reporting toaudit & supervisory board members in a timely and appropriate manner. Consequently, audit & supervisory board
members audit the execution of duties by directors and enforcement of internal control with a high degree ofeffectiveness.
The Corporate Audit Department, which is JSR’s Internal Auditing Office, regularly presents internal audit plans
and reports of internal audit results to the Board of Directors and Audit & Supervisory Board and exchanges
opinions with them, thereby strengthening cooperation between the Board of Directors and the Audit &Supervisory Board and the Internal Auditing Office.
Appointment of Outside Audit & Supervisory Appointed
Board Member
Number of Outside Audit & Supervisory Board 2
MemberNumber of Independent Audit & Supervisory 2
Board Member
Outside Audit & Supervisory Board Member’s Relationship with the Company (1)NameAttribute

Relationship with the Company*
a
b
c
d
e
f
g h

i

j

Hisako Kato
CPA & Tax Accountant
Junko Kai
Lawyer* Categories for “Relationship with the Company”* ”○” when the director presently falls or has recently fallen under the category;“△” when the director fell under the category in the past
* “●” when a close relative of the director presently falls or has recently fallen under the category;“▲”when a close relative of the director fell under the category in the past
a
b
c
d
e
f
g
h
i
j
k
l
m

k

l

m

Executive of the Company or its subsidiaryNon-executive director or accounting advisor of the Company or its subsidiaries
Non-executive director or executive of a parent company of the Company
Audit & supervisory board member of a parent company of the Company
Executive of a fellow subsidiary company of the Company
A party whose major client or supplier is the Company or an executive thereof
Major client or supplier of the Company or an executive thereof
Consultant, accountant or legal professional who receives a large amount of monetary consideration or otherproperty from the Company besides compensation as an audit & supervisory board member
Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal
entity)Executive of a client or supplier company of the Company (which does not correspond to any of f, g, or h) (theaudit & supervisory board member himself/herself only)
Executive of a company, between which and the Company outside directors/ audit & supervisory board member
are mutually appointed (the audit & supervisory board member himself/herself only)
Executive of a company or organization that receives a donation from the Company (the audit & supervisoryboard member himself/herself only)
Others- 20 -

Outside Audit & Supervisory Board Member’s Relationship with the Company (2)Name

Hisako Kato

Junko Kai

Designation as
Independent
Supplementary Explanation of
Audit&
the RelationshipSupervisory
Board Member
Independent(1) Ms.
Kato
meets
the
Audit
&
independence standards set
Supervisory
forth by Tokyo Stock
Exchange and the “Criteria
Board Member
for judging independence ofoutside directors and audit &supervisory board members”,
as set forth in “Mattersrelating
toIndependent
Directors/Audit&
Supervisory Board Member”
in this report. Accordingly,
JSR has determined there isno risk of conflict of interest
with general shareholders andhas designated her as anindependent director.
(2) No conflict of interest exists
between the Company andeitherHisakoKato
Accounting Office where Ms.
Hisako Kato has importantconcurrent positions.
Independent(1) Ms.
Kai
meets
the
Audit
&
independence standards set
Supervisory
forth by Tokyo Stock
Exchange and the “Criteria
Board Member
for judging independence ofoutside directors and audit &supervisory board members”,
as set forth in “Mattersrelating
toIndependent
Directors/Audit&
Supervisory Board Member”
in this report. Accordingly,
JSR has determined there isno risk of conflict of interest
with general shareholders andhas designated her as an
Independent Director.
(2) No conflict of interest exists
between the Company andHamani, Takahashi and Kai
Low Office where Ms. Kai- 21 -

Reasons of Appointment

Ms. Kato has range of professional
knowledge and vast experience on
financing and accounting matters as a
Certified Public Accountant both in Japanand US and a Certified Tax Accountant by
providing necessary and appropriate
advices. She has been utilizing her vast
experience, knowledge, and sophisticatedexpertise as well as her viewpoint as anindependent outsider to audit the Directors’decision-making and execution of duties aswell as to enhance fair and reasonable
judgment for, and accountable and soundmanagement of, the businesses of theCompany.
Therefore, she was appointed again toserve as an outside audit & supervisoryboard member during the term of her
office.

Ms. Kai has a vast legal expertise andexperience as a lawyer. She is expected tocontribute her vast experience, knowledge,
and sophisticated expertise, as well as her
viewpoint as an independent outsider, toaudit the directors’ decision-making andexecution of duties, as well as to enhancefair and reasonable judgment for, andaccountable and sound management of, thebusinesses of the Company.
Therefore, she was appointed to serve as an
outside audit & supervisory board member.

has important
positions.

concurrent[Independent Directors/Audit & Supervisory Board Member]
Number of Independent Directors/Audit & 4 independent directors and 2 independent audit&
Supervisory Board Members
supervisory board members in total 6
Matters relating to Independent Directors/Audit & Supervisory Board Member
1.

JSR appoints all of the qualified outside directors and audit & supervisory board members as independent
directors and audit & supervisory board members.

2.

Criteria for judging independence of outside directors and audit & supervisory board members
JSR has set criteria for judging the independence of outside directors and audit & supervisory board members(hereinafter collectively or independently referred to as “outside officers” or “outside officer”). If an outside
officer (including a candidate) falls under any of the following categories, the Company judges such person
does not have sufficient independence.
(1) Executive (*1) of JSR or its consolidated subsidiary (JSR Group) or ex-executive(2) Major shareholder of JSR (any shareholder who directly or indirectly holds 10% or more of the voting
rights)(3) Executive of a company, etc. that falls under any of the following
1) Major shareholder of JSR
2) Major business partner of the JSR Group (*2)3) Major creditor of the JSR Group (*3)4) Company, etc. in which the JSR Group holds 10% or more of the voting rights(4) Certified Public Accountant who belongs to an accounting firm that serves as the JSR Group
Independent Auditor(5) Expert, such as a consultant, accountant, lawyer, judicial scrivener, or patent agent, etc., who receivesa large amount (*4) of monetary consideration or other property benefits from the JSR Group(6) Person who receives a large amount of donations from the JSR Group (*5)(7) Executive of a company, between which and JSR outside directors/audit & supervisory board members
are mutually appointed (*6)(8) Person with a close relative (*7) who falls under any of the above paragraphs from (1) to (7) (limited toan important person (*8) excluding paragraphs (4) and (5))(9) Person who fell under any of the above paragraphs from (2) to (8) in the past five years(10) Person who is deemed to have special reasons that would cause a conflict of interest with JSR,
notwithstanding the provisions of the preceding paragraphs.
(*1) Executive refers to a director (excluding either an outside director or non-executive director), an
officer, an executive officer and an employee.
(*2) Major business partner refers to a company whose annual transactions with the JSR Groupexceed 2% of the consolidated sales of JSR or such company.
(*3) Major creditor refers to a financial institution or other major creditor which is relied upon by the
JSR Group to such an extent that it is indispensable and irreplaceable to financing of the JSR Group.
(*4) A large amount refers to: 10 million yen or more per year in case such expert is an individual;
and 2% or more of annual total revenue of such organization in case such expert is an organization suchas an enterprise or association. However, when a consideration for services directly offered by such
expert exceeds 10 million yen, even if the amount does not exceed 2% of consolidated total assets of
JSR or such financial institution, such amount is considered to be a large amount.
(*5) Person who receives a large amount of donations refers to a person who receives donations of
10 million yen or more per year from the JSR Group.

- 22 -

(*6) Mutually appointed relationship refers to a relationship in which an executive of the JSR Group
serves as an outside officer of a company and an executive of such company serves as outside officer
of JSR.
(*7) Close relative refers to a spouse and a relative within the second degree of consanguinity.
(*8) Important person refers to an executive including a director, officer, executive officer and aperson in the position of general manager or higher or an executive who has authority equivalent tothose persons.
3.

Agreement for limiting liabilities
In accordance with the provisions of Paragraph 1 Article 427 of the Companies Act, the Company has enteredinto an agreement with its outside directors and all of audit & supervisory board members to limit liability
under the provisions of Paragraph 1 Article 423 of the Companies Act. Regardless of the amount of liability,
the maximum amount liable under the agreement in question shall be limited to that set by applicable laws
and regulations; provided that such outside director and audit & supervisory board member (whether outside
or not) must have acted in good faith and without gross negligence in performing his/her duties.

[Incentives]
Incentive Policies for Directors

Performance-based Remunerations and others

Supplementary Explanation
With the aim of increasing corporate value over the short, medium, and long-term, remuneration for directors of
the Company consists of a) basic remuneration as a fixed remuneration, b) annual bonuses linked to the annual
business performance of the Company, c) restricted stock shares as remuneration for directors designed to sharevalues between directors and the shareholders, and d) performance-related stock remuneration granted after theapplicable period aims to provide incentives for directors to ensure steady implementation of management andbusiness restructuring plans and sustainable improvement in corporate value and to further enhance value sharing
with shareholders.
Recipients of Stock Options
Supplementary Explanation[Director Remuneration]
Disclosure of Individual Directors’ Remuneration

Details are individually disclosed in the annual securities
report for a director whose remuneration etc. in aggregate
exceeds JPY 100 million.

Supplementary Explanation- 23 -

1. Amount of Remuneration for Directors and Audit & Supervisory Board Members(for FY ending March 2021)
Audit & Supervisory Board
Director
MemberClassification
NumberAmountNumberAmount(JPY million(JPY million(people)(people)/year)/year)
Basic Remuneration (for outside
9
289
4
50
directors or outside audit & supervisory
(3)
(43)
(2)
(22)
board members)
Annual Bonuses to Directors for this6
182
fiscal term
(-)
(-)
(-)
(-)
(ditto)Mid-term Performance-linked Bonuses(ditto)

6
(-)

0
(-)

(-)

(-)

Restricted Stock Shares as
Remuneration to Directors(ditto)

6
(-)

124
(-)

(-)

(-)

Total
(ditto)

9
(3)

595
(43)

4
(2)

50
(22)

(Notes)1. The numbers of the Directors and Audit & Supervisory Board Members and the amount of remunerations thereto
in the table above include one (1) Audit & Supervisory Board Member who retired during the current fiscal year.
2. The above figures do not include the salaries for the employee portion of the Directors who concurrently serve as
employees.
3. The above figures are rounded to JPY1 million.
4. The amount of Restricted Stock Shares in the table above is calculated based on the closing price of common
stock of the Company on the Tokyo Stock Exchange on the business day immediately preceding the date of theresolution of the Board of Directors held on July 8, 2019, at ¥1,706 per share, and the closing price of common
stock of the Company on the Tokyo Stock Exchange on the business day immediately preceding the date of theresolution of the Board of Directors held on July 13, 2020, at ¥2,110 per share.
2. Consolidated Remuneration Amount for individual director
The Company discloses in its Securities Report details of the remunerations individually paid to its directors or audit& supervisory board members if the total amount was JPY 100 million.
The following table shows individual remuneration disclosed in its Security Report for FY ending March 2021

Name

Mr. Eric
JohnsonMr. Nobuo
Kawahashi

Total amountofconsolidated
remuneration,
etc.
(JPY million)

311

Amount by type of consolidated remuneration (JPY
million)Position

Rep.
Director
CEO
President

Rep
135 Director
President

Mid-term
Basic
Annual Performancelinked
Remuneration Bonuses
BonusesCompany

Restricted
Stock Shares(non-monetary
remuneration)

JSR
Corporation

56

60

-

33

JSR North
America
Holdings,
Inc.

69

60

-

33

JSR
Corporation

80

34

-

21

- 24 -

Mr.
Mitsunobu

Rep.
104 Director

Chairperson

Koshiba

JSR
Corporation

83

-

-

21

1.The amount of remuneration for Mr. Eric Johnson, director is based on the cost-sharing agreement between
JSR Corporation and JSR North America Holdings, Inc.
2.Basic Remuneration for Mr. Eric Johnson, Director includes the amount equivalent to fringe benefits andpartial reimbursement of income tax relating thereto.
3. The remuneration paid in US dollar are calculated in Japanese yen (JPY) by using exchange rate at 106.06
yen/$ as an average for FY ending March 2021 (average of closing rate at Tokyo Foreign Exchange Market)

3. Annual Bonuses
Performance evaluation reference consists of consolidated annual revenue and core operating income on 50/50
basis and respective targets, results and payout ratio thereof are described in the tables below. Consolidated
Revenue and Consolidated Operating Income in the tables below are expressed in JPY billion.
(1) Consolidated Business Results(2) Results of Life Science Business

Performance Evaluation Reference
TargetResultPayoutRatio

Consolidated
Revenue

420.0

446.6

151.9%

Consolidated
Core
Operatingincome19.5

26.0

143.2%

Performance Evaluation Reference
TargetResultCoefficient

Consolidated
Revenue

58.0

55.2

0.87

ConsolidatedCore Operating
income

5.5

3.5

0.86

(Note) The annual bonus of the CEO is calculated bymultiplying the performance-linked portion of the entire
company by the performance evaluation of the life sciencebusiness.

(3) Non-financial evaluation of annual bonus to CEO and President (10%)
Based on the content of the business report presented by CEO and President, the Remuneration Advisory
Committee of the Company deliberated on the progress of company-wide business structure reform (Petrochemicaland display materials businesses) and reported to the Board of Directors the result of its evaluation, which
determined that the non-financial evaluation portion of the annual bonus to CEO and President shall be paid at a
rate of 100%, after consultation with members of Remuneration Committee, who are an Independent Outside
Directors.
(4) Portion related to individual performance of Executive Managing Officers, Managing Officers and Senior
officers (20 ~ 30%)
In order to evaluate the status of business execution comprehensively, the Representative Director and CEO (EricJohnson) and the Representative Director, President and COO (Nobuo Kawahashi), who were delegated by the
Board of Directors, made decisions by reflecting the results of the five-point evaluation. However, in order to ensurethat the delegated authority is properly exercised, the Remuneration advisory committee deliberates in advance on
the pattern of payment amounts for each evaluation of such performance-linked portion, and the Board of Directors
determines the standard amount for such portion.

- 25 -

4.

Mid-term Performance-linked bonuses
The Company paid to its directors excluding outside directors Mid-term Performance-linked bonuses for a 3year evaluation period. Performance evaluation reference is the most recent 3years’ average of ROE and the target,
actual results and payout ratio thereof are shown in the table below. The bonuses for the 3-year evaluation period
beginning in FY ending March 2019 will not be paid because the consolidated average ROE for the 3-year periodused as a performance evaluation reference fell below 6% as shown below.

Changes in Consolidated annual ROE ratio
FY Mar2017

FY Mar2018

FY Mar2019

FY Mar
2020

FY Mar
2021

8.4%

8.8%

7.8%

5.7%

-15.1%

Range of Payout Ratio corresponding to theactual ROE of the most recent 3years’
average
Actual
less
6%
12%
ROE
than
or
8%
10%
or
average
6%
more
more
Payout
100%
0%
50%
50%
150%
Ratio
(target)Payout Ratio is 50% when actual ROE average is between
6% and 8% and is calculated proportionately in accordancewith the above table when actual ROE average is between
8% and 12%.

3-Year Average of Consolidated annual ROE
Fiscal Years
PayoutTargetActualFrom - toRatio
FY Mar 2017 10%
8.3%
53.8%
FY Mar 2019
FY Mar 201810%
7.4%
50%
FY Mar 2020
FY Mar 201910%-0.5%
0%FY Mar 2021

Policy on Determining Remuneration Amounts
Establishedand Calculation Methods
Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods(1) Principles on remuneration for directors and audit & supervisory board members
1) In order to maintain the competitive advantages of JSR Group as a global company, the Company has
established principles on remuneration for directors and audit & supervisory board members whichenables the Company to develop and recruit internationally competitive and diverse human resources
capable of managing the businesses, and to provide short, mid, and long term incentives for its directorsthat are aligned with the benefit of its shareholders, and to encourage and motivate is management,
while maintaining the transparency and accountability, to achieve accomplishment of the management
strategies and business strategies of the Company. Remuneration framework should:
a attract, secure, and reward diverse and excellent personnel regardless of nationality for the purposeof further enhancing and improving its competitive advantages and global management;b encourage the management to demonstrate healthy entrepreneurial spirits by motivating them toachieve the objectives of business strategies aiming at continuous growth; andc promote medium to long term improvement in corporate value by sharing the benefit between
management and shareholders via the reinforcement of stock ownership during his/her term ofoffice as directors.
(2) Remuneration Governance1) Procedures for determining remuneration, etc.

- 26 -

In relation to remuneration for the directors, the Board of Directors (referred to as “BOD” in this section)
deliberates and determines the policies of remuneration for directors, remuneration framework, and amount of
remuneration for individual directors.
In order to ensure independence and objectivity during deliberation and decision-making processes at the BOD
mentioned above and to enhance monitoring function and accountability of the BOD, the Company established
the Remuneration Advisory Committee as an advisory body for the BOD.
2) Items for deliberation and reports by the Remuneration Advisory Committee
The Remuneration Advisory Committee, upon an inquiry from the BOD, deliberates the remunerationof the eligible persons and related items as listed below and reports the result to the BOD, or provides
the Audit & Supervisory Board with advices.

Eligible persons for remuneration:
Inside directors (including representative directors and executive directors), outside directors, audit& supervisory board members, officers, executive advisors, senior advisors, chairman emeritus andother important employees

3)

Items for deliberation
Establishment of the remuneration policies, designing the remuneration framework, setting
performance targets, reviewing rationale of incentive remunerations, appropriateness of the level andcomposition of the remunerations, and determination of the amount of remuneration of each position
based on the remuneration framework and others
Composition of the Remuneration Advisory Committee and attributes of Chairperson
The Remuneration Advisory Committee consists of at least 3 committee members, and more than halfof the members shall be independent outside directors, of which chairperson shall be elected fromIndependent outside directors by resolution of the BOD in order to ensure independence, objectivity,
and accountability as well as effectiveness of the Remuneration Advisory Committee.
In addition, a third-party consultant, specialist in this field, and staff members for the committee also
attend the Remuneration Advisory Committee meetings as observers.

(3) Remuneration framework of the Company
1) Remuneration Structure
In the past, our company's executive compensation consisted of basic compensation as fixedcompensation, annual bonuses that are linked to the level of company-wide performance in a single
year, medium-term performance-linked bonuses that are linked to the level of company-wide
performance in the medium term, and compensation for the granting of restricted shares to promote thesharing of value with shareholders at an early stage. In FY ending March 2022, however, the mediumterm performance-linked bonuses will be abolished and a performance-linked stock compensation plan
(Performance share units:) will be introduced. With respect to medium-term performance-linked
bonuses, except for bonuses for which the Performance Evaluation Period has already started, no money
will be paid based on based on the provisions of the remuneration in the future.
In addition, regarding remuneration for granting restricted shares, the period for lifting the restriction
on transfer and the maximum amount and the maximum number of shares are revised. The purpose of
these revisions of executive compensation is as follows. Remuneration for Outside Directors and Audit& Supervisory Board Members is only basic remuneration in light of their roles.
<Reason for the revision>
・The directors of the Company will be given an incentive to steadily implement the Medium-Term
Management Plan ending in FY ending 2025 and business structure reforms, and to achieve sustainableenhancement of corporate value. At the same time, the directors will further share value withshareholders.
・In order to raise awareness among our company's directors about creating value for all stakeholders
in order to achieve sustainable growth from a longer-term perspective.

- 27 -

・Aiming to become a truly global company, we aim to create an appropriate level and structure of
remuneration to secure excellent management personnel regardless of nationality.

[After revision] after June 17, 2021
Type of
Remuneration

Time of Payment
or Granting

Summary of AGM Approval

Fixed Salary

The maximum amount for directors is JPY 60
million per month (inclusive of JPY 10 million permonth for outside directors).
（74th AGM on June 18, 2019）
The maximum amount of basic remuneration foraudit & supervisory board members is JPY 10
million per month.
(60th AGM on June 17, 2005）

Basic
Remuneration

Monthly
PaymentAnnual Bonus

Payment at a
fixed time every
year

The maximum annual amount for directors excluding
outside directors is JPY432 million（74th AGM on June 18, 2019）

Performance
share unit

In principle,
units shall be
granted in FY
2021, and sharesand money shallbe provided in alump sum after
the end of the
Performance
Evaluation
Period.

Performance
LinkedRemuneration

Maximum amount of monetary compensation
claims and total amount of money:
Number of fixed share units 800,000 x share price atdelivery for target period
 Maximum number of shares to be granted:
400,000 shares for target period（76th AGM June 17,2021）
Up to 400 million yen per year and up to 400,000
shares per year The lifting of the transfer restriction is a period of
up to 3 ~ 30 years determined in advance by the
Board of Directors. In addition, if resignation, etc.
occurs for justifiable reasons determined by the
Board of Directors during the transfer restriction
period.
（76th AGM June 17,2021）


Remuneration
for granting
Restricted Stock
Shares2)

Payment at a
fixed time every
year

Appropriateness of the remuneration level of the Company
When considering the abovementioned remuneration structure and composition thereof, theRemuneration Advisory Committee verifies the appropriateness of the level of remuneration throughannual benchmarking study by using the remuneration database possessed by a third-party consultant
specialized in remuneration for executives and by comparing with the companies whose size, type, andline of business are similar to those of the Company.
In addition, when determining the composition of performance-linked remunerations and other
remuneration for the director who is responsible for overseeing and managing the Company’s
international businesses, the Remuneration Advisory Committee verifies the appropriateness of
remuneration level for such director through another annual benchmarking study using a method similar
to the one described above and using the survey data on remuneration prevailing in the region wheresuch director are responsible for as well as considering each director’s job responsibilities and themagnitude of impact on management of the JSR Group.

- 28 -

3)

Remuneration composition for directors (excluding outside directors)
The Company has a policy to increase the portion of performance-linked remuneration for directors
who assume heavier responsibilities for corporate management. Based on this policy, the Company
determines the level of remuneration for directors depending on their responsibilities and title
considering the latent risks involved in achieving performance targets while increasing the portion of
performance-linked remuneration for senior directors.
The table below shows each remuneration composition when basic remuneration is set at 100 and thestandard amount of the performance-linked remuneration is set when a target has been achieved 100%.

Basic
remunerationDirectors(excluding
OutsideDirectors)

Performance-linked remuneration
Annualbonus

Performance
Share Unit
(Per fiscal
year)

Restricted
Stock Shares

Basicremuneration vs.
performancelinked
remuneration

CEO

100

100

200

200

100：500

President

100

30

About 38

About 38

100：105

Concurrently serve
as Executive
Managing Officer /100
25
About 23
About 23
100：70Managing Officer/
Senior Officer* Each of Executive Managing Officers, Managing Officers and Senior Officers who hold concurrent
positions as directors receives an allowance separately from the remunerations described in the table
above.

(4) Outline of each remuneration and its determination method
1)

Basic remunerationaBased on the deliberations and recommendations of the Compensation Advisory Committee, thebasic compensation of directors is determined by resolution of the Board of Directors in accordancewith their positions.
b The amount of remuneration for audit & supervisory board members is determined throughconsultation with audit & supervisory board members.

2)

Annual bonuses
a The Company uses consolidated sales revenue (= a source of its corporate activities) andconsolidated core operating profit (= shows the quality of its core business activities) as theperformance evaluation indices for annual bonuses linked to the performance of the Company fora single fiscal year (50:50 ratio). The company has been engaged in structural reforms to achieve
medium- to long-term growth and increase in corporate value, and since fiscal 2020, consolidated
core operating profit has been used in place of operating profit, after deduction of losses and othernonrecurring losses arising from structural reforms.
b The Company calculates a payout ratio according to the level of achievement relative to its goal
within the range of 0 – 200%. As for the performance goal, it is finalized at a Board of Directors
meeting after the Remuneration Advisory Committee has verified its adequacy. At the end of a
fiscal year, the Remuneration Advisory Committee calculates and evaluates the amount of
payment, and the Board of Directors determines the standard amount of the payment for eachposition.
c The level of achievement relative to its performance goal is deliberated after being finalized basedon annual management activities report that the CEO and President have submitted to the- 29 -

de

3)

Remuneration Advisory Committee. In order to calculate and evaluate the amount of performancelinked remuneration, the Remuneration Advisory Committee deliberates on whether theCompany’s operating results have been largely affected by events that cannot be foreseen when
the Company has set each target performance value based on the annual management activities
report. The Remuneration Advisory Committee reports the need of qualitative adjustment of thelevel of achievement to the Board of Directors if necessary.
For the CEO and the President, in addition to the company-wide performance-linked portion
described in (b) above (90%), a non-financial evaluation portion (10%) has been established forthe progress of company-wide sustainability management initiatives, and the performance-linked
portion will be determined in accordance with b above. At the end of a fiscal year, the non-financial
evaluation portion is deliberated by the Remuneration Advisory Committee, and the amount of
payment for the non-financial evaluation portion is determined by the Board of Directors within
the range of 0% to 200%, reflecting the evaluation results.
The annual bonuses for directors concurrently serving as Executive Managing Officer, Managing
Officer and Senior Officer consist of the part linked to the performance of the entire company (7080%) and the other part linked to the individual performance (20-30%). The part linked to theperformance of the entire company is determined according to the calculation method described in② above. As for the part linked to the individual performance, the Remuneration Advisory
Committee deliberates the pattern of payment amount by evaluation in advance, and the Board of
Directors determines its standard amount. The CEO and President finalize the result of 5 levels of
evaluation for the part linked to the individual performance, which has already been deliberated
and confirmed by the Remuneration Advisory Committee. The amount of payment linked to theindividual performance is determined within the rage of 0%-200% by reflecting the result of theevaluation.

Performance Share Unita This Performance Share Unit is a share-based compensation plan that provides a number of sharesof the Company common stock (Hereinafter, "the Company stock") and monies in a lump sum.
The number of shares is calculated based on the degree of achievement of performance targets
during the 4 fiscal years from FY ending March 2022 through FY ending March 2025 (Hereinafter,"Performance Evaluation Period") that is consistent with the company's medium-term management
plan, and the length of service during the period from the conclusion of this General Meeting of
Shareholders to the General Meeting of Shareholders for the last fiscal year of the Performance
Evaluation Period (Hereinafter, "Target Period").
b The number of the Company Shares to be delivered and the amount of money to be paid to each
Eligible Director shall be determined by a resolution of the Board of Directors based on
deliberations and reports by the Remuneration Advisory Committee, by multiplying the number ofstandard share units to be granted according to the position of each Eligible Director by thepayment rate(Rates fluctuate between 0% and 200%) according to the degree of achievement of
performance against the consolidated performance indicators(Average consolidated ROE for FY
ending March 2024 and FY ending March 2025) set in the first year of the Performance Evaluation
Period.
In principle, 50% of the number obtained (Hereinafter, "Fixed Reference Number of Share Units")by multiplying the basic number of our company stock units to be allotted to each Eligible Director
by the payment rate determined after the end of the Performance Evaluation Period will be paid asmonetary compensation claims to deliver our company stock, and the rest will be paid in money tobe appropriated for tax payment
c The monetary compensation claim and the total amount of the money shall be theamountobtained by multiplying the Fixed Reference Number of Share Units by the closing price of theCompany shares on the Tokyo Stock Exchange on the business day immediately preceding the dayof the resolution of the Board of Directors concerning the issuance of shares or disposition of- 30 -

treasury shares relating to the allotment of the company shares after the end of the Performance
Evaluation Period (Hereinafter, "Stock Price at the time of granting").
d

The specific calculation formula is as follows.
(A)Number of the company Shares to be Delivered to Each Eligible Director
Base number of stock units x Pay-out rate x 50%(B) Amount of money to be paid to each Eligible Director{(Base number of share units x pay-out rate- number of the company shares according to (A) above)}x Stock price at delivery(C)Monetary compensation claims and total amount of money to be paid to each Eligible Director
Number of fixed stock units（※１）x stock price at delivery※１ Base number of stock units x Pay-out rateeDuring the Performance Evaluation Period covering the 4 years from FY ending March 2022 to2025, the Board of Directors determined, based on the report of the Remuneration Advisory
Committee, that the average consolidated ROE for FY ending March 2024 and 2025 should be
10%, as the company aims to achieve a consolidated ROE of 10% or more in its medium-term
management plan.
Range of consolidated ROE results and unit payout ratios during the Performance Evaluation Period
from FY ending March 2022 to 2025
ROE

Less than
6%6% or more

8%

10%

12%

14% or
more

Unit
100%
payout
0%
50%
50%
150%
200%
（Target）
ratios※ Payout ratios between 6% and 8% ROE are 50%; payout ratios between 8% and14% ROE are prorated

4)

Remuneration for granting restricted Sharesa For the purpose of promoting the sharing of value with shareholders by holding shares of theCompany, the Company pays remuneration for granting restricted shares every year. Each year,
Eligible Directors are granted monetary compensation claims to grant restricted shares, andEligible Directors receive issuance or grant of the company shares by paying all of the monetarycompensation claims as assets contributed in kind.
b Based on the deliberations and reports of the Compensation Advisory Committee, the number ofshares to be allotted to Eligible Directors is determined by dividing the base amount determinedaccording to the position by the resolution of the Board of Directors by the simple average closing
price for one month prior to the grant of shares of the Company on the Tokyo Stock Exchange. The
amount to be paid in per share shall be the closing price on the Tokyo Stock Exchange on thebusiness day immediately preceding the date of resolution by the Board of Directors, and shall not
be particularly favorable to directors who receive the common shares of the company under thePlan.
c The transfer restriction shall be lifted during a period of 3 to 30 years previously determinedby the Board of Directors, and in the case of resignation, etc. due to justifiable reasons determinedby the Board of Directors as treatment at the time of resignation during the transfer restriction
period, the transfer restriction shall be lifted. Restricted shares are structured in such a way thatthey are linked to corporate value, although there are no conditions regarding performance.

- 31 -

5)

Introduction of stock holding guidelines
In order to share value with shareholders on a sustainable basis, the Company established stock holding
guidelines for the CEO (Representative Director) and the President (Representative Director). As ageneral rule, during the term of office as Director, the Company introduced guidelines with the aim ofcontinuing to hold shares of our company equivalent to the standard amount based on the position atmarket value. The base amount shall be five times the annual basic remuneration for the CEO and thesame amount as the annual basic remuneration for the President.

6)

Establishment of Malus-Clawback clause
In order to prevent the remuneration system for officers of our company from being an incentive
remuneration that encourages excessive risk-taking and to ensure the soundness of the remuneration
system for officers, in FY ending March 2022, the Company will establish a clause (so-called MalusClawback clause) under which all or part of the incentive remuneration will be returned or confiscatedat the discretion of the Board of Directors after deliberation by the Remuneration Advisory Committee,
regardless of whether or not it is before or after the payment or issuance of the remuneration in the eventof certain circumstances, such as retroactive revision of financial statements due to illegal acts or
improper accounting. This provision applies to annual bonuses in 2021, restricted stock andperformance share units granted in the same year, and medium-term performance-linked bonuses paidin all subsequent periods.

[Supporting System for Outside Directors and/or Audit & Supervisory Board Member]
The company secretary explains items on the agenda to outside directors before a regular or extraordinary Boardof Directors meeting as well as to outside audit & supervisory board members. Prior to the Remuneration
Advisory Committee meeting, the Secretariat of the Committee explains the content of proposals to outside
directors who are members of the Committee.
JSR appoints a dedicated member of staff as an assistant to audit & supervisory board members including outside
members and has such assistant support audits and collect and transmit information. The company secretaryexplains to audit and supervisory board members items on the agenda before a regular or extra ordinary Board of
Directors meeting. In addition, the standing audit & supervisory board member provides outside audit &supervisory board members with information on the Company as necessary as well as with reports on importantmatters and on the progress and results of the audits at the Audit and Supervisory Board meetings.

[Status of Persons retired from office of President & Representative Director, etc.]
Names, etc. of Senior Advisors, Advisor, etc. who was the President or Representative Director, etc.
Date of
Working
Retirement from Term of
Name
Title/Positions Job description
arrangements /office ofOfficeconditions etc.
President
To provide advices
when asked but not
Mr. Tatsuo Special
Part time withinvolvedinanyJune 29, 1993
1 yearremuneration
AsakuraAdvisormanagement decisionsof the Company
To do outside activities
Mr.
such as in industry
Full time with
Chairmangroup and to provide
June 17, 2021
1 yearMitsunobu
remuneration
Emeritus
information asked by
Koshibamanagement personnel,- 32 -

but not involved in any
management decisionsof the Company

Total Number of Senior Advisor, Advisor, etc. who was President &Two (2) persons
Representative Advisor
Other matters
Existence of internal regulations relating to Advisors, and involvement of Board of Directors and/or Nomination
Advisory Committee in the event of revision of the regulation and/or the appointment of such advisors; Yes

2.

Matters on Functions of Business Execution, Auditing, Oversight, Nomination andRemuneration Decisions (Overview of Current Corporate Governance System) Updated

As a company with audit & supervisory board members, JSR principally monitors and oversees the execution ofduties through its Board of Directors and audit & supervisory board members.
The Company continuously has strengthened the function of management supervision, improved efficiency indecision making and execution of business duties, and enhanced the transparency and soundness of its business
management through the introduction of an officer system and the appointment of outside directors and audit &supervisory board members, who are independent from the Company and have extensive business experienceand a high level of expertise.
JSR has registered at Tokyo Stock Exchange four (4) independent directors out of nine (9) in total and two (2)independent audit & supervisory board members out of three (3) in total, who have been greatly contributing toenhance rationality, legitimacy and transparency of management decisions by offering advice and opinions froma neutral standpoint independent from the Company utilizing extensive business experience and high level ofexpertise.
In addition, the Company has been endeavoring to enhance the transparency of business management by actively
disclosing information and aggressively conducting IR activities for investors in a timely and appropriate manner.
Furthermore, JSR has provided shareholders with opportunities to express their trust and evaluations to the Boardof Directors by way of electing directors at its annual general meeting of shareholders. At the same time, theCompany has endeavored to make its annual general meeting of shareholders easy to attend and participate byholding the meeting and dispatching convocation notice thereof earlier than other companies, and participatingin the electronic voting platform.
(1) Board of Directors
The Board of directors consists of nine (9) directors four (4) of whom are independent outside directors withindependence and extensive experience of business and management) and holds meetings once monthly, inprinciple. The Board discusses and makes decisions on important business matters, including the directionof the Company’s business strategy, and also supervises directors’ and officers’ execution of their businessduties. Koichi Kawasaki, who is a Director and Executive Managing Officer, serves as the board’s
chairperson.
In addition, all three (3) audit & supervisory board members including two (2) independent outside audit &supervisory board members regularly attend the Board of Directors meetings to state their opinions. In total
17 meetings were held in fiscal year 2020 ending in March 2021, of which attendance ratio was 100% (allof the members of directors and audit and supervisory board members attended all of the meetings).
JSR has established the Remuneration Advisory Committee and Nomination Advisory Committee as anadvisory organization to Board of Directors. For the details of the committees, please refer the- 33 -

“Supplementary Explanation” of “Voluntary Establishment of Committee” under [Directors] of “1.
Organizational Composition and Operation” in “II. Business Management Organization and Other Corporate
Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management” ofthis Corporate Governance Report.
(2) Executive Committee
The Executive Committee holds extensive discussions on items relating to fundamental management
initiatives, management policies and management plans, along with important matters concerning theexecution of business activities at each department. The committee thus gives direction in relation to theseissues or receives reporting. As required, certain items submitted to this committee are passed on to theBoard of Directors for further discussion.
This committee is made up of CEO, the president, officers with directorship status, and officers or General
Managers appointed by the chair, and responds to important business execution with the aim of expediting
decision making and improving the efficiency of such operations. As a rule, this committee meets once aweek, and is chaired by CEO or the president. The standing audit & supervisory board member also attends
these committee meetings.
(3) Business Issues Committee
The Business Issues Committee engages in broad-ranging debate about items related to fundamental
management strategies and policies, basic policies behind specific projects, and changes to businessstrategies. It also shares information to ensure a common understanding of such matters and discusses thecompany’s direction. Its findings are reflected in deliberations of the Board of Directors and the Executive
Committee. The Business Issues Committee, which meets once a month in principle, consists of CEO, thepresident and officers with directorship status, and is chaired by CEO or the president.
(4) Officers Committee
This committee consists of CEO, the president and all officers and aims to ensure members’ thoroughunderstanding of business conditions and important business matters. This committee is chaired by CEO or
the president and the standing audit & supervisory board member is also present.
(5) Audit & Supervisory Board and audit & supervisory board members
The Audit & Supervisory Board, consisting of three (3) audit & supervisory board members and holding
meetings once monthly in principle as stipulated in the Regulations of the Audit & Supervisory Board,
receives reports on important matters, holds discussions, and makes decisions. The two (2) outside audit &supervisory board members are independent ones, a lawyer and a certified public accountant qualified as acertified public tax accountant, and conduct audits from a standpoint independent from the Company and byusing their professional expertise.
In accordance with standards for audits by audit & supervisory board members, the audit & supervisoryboard members attend meetings of the Board of Directors, and other important meetings including Executive
Committee meetings to monitor how important decisions are reached and business activities are executed.
The audit & supervisory board members also receive reports from the independent auditors, directors, andemployees. Through these activities, audit & supervisory board members hold deliberations in order to form
auditing opinions.
(6) Outline of Audit by audit & supervisory board members, Internal Audit, and Independent Auditors
1) Audit by audit & supervisory board members
The details of audit by audit & supervisory board members are stated as in the above (5) Audit &Supervisory Board and audit & supervisory board members.
2) Internal Audit- 34 -

3)

JSR has established the Corporate Audit Department to improve the effectiveness of the JSR Group’s
internal control system. In accordance with the internal audit plan, the Corporate Audit Department
regularly conducts internal audits such as compliance audits and business operation audits at its
divisions and departments as well as its Group companies both in Japan and overseas and reports theaudit results to CEO or the president, related departments, and the standing audit & supervisory board
member and also regularly reports internal audit plans and reports of internal audit results to the Boardof Directors and Audit & Supervisory Board.
Independent Auditors
a JSR’s independent auditor is KPMG AZSA LLC.
b Three (3) certified public accountants, Tomoyuki Inoue, Iwao Hirano, and Yukihiro Kase,
conducted the accounting audit. The professional staff included four (4) certified public
accountants, etc.
c The audit & supervisory board members work closely with the independent auditors. The audit &supervisory board members interview the independent auditors about the audit plan and receive
reports on the audit results. Furthermore, the audit & supervisory board members and independent
auditors exchange information and opinions as necessary in the course of each fiscal year.
d In FY ending March 2021, JSR paid remuneration to KPMG AZSA LLC, its independent auditors,
as follows:
Amount of remuneration for services stipulated in Article 2 Paragraph 1 of the Certified Public
Accountants Act: JPY 81 million

Total remuneration to be paid by JSR and its subsidiaries: JPY 112 million(7) Sustainability Promotion Committee
In order to establish good relationships with various stakeholders and to become a company that istrustworthy and indispensable, the JSR Group has established the "Sustainability Promotion Committee"(SPC) with the purpose of shifting its focus from CSR (Corporate Social Responsibility) activities to“Sustainability activities” that contribute to all stakeholders by creating value through corporate activities,
and with the aim of promoting such activities.
The SPC is a body that deliberates and coordinates policies on sustainability activities and other mattersconcerning sustainability with attention to domestic and international developments related to ESG and the
SDGs. The Company sets up the following four committees under the SPC: the Sustainability Planning
Committee, the Environment, Safety and Quality Committee, the Risk Management Committee, and the
Corporate Ethics Committee. The SPC integrates and guides the activities of the above four committees andmeets four times each year along with special meetings as necessary to further strengthen the managementof Company. In principle, the SPC submits quarterly reports on its activities to the Board of Directors. It ismonitored and supervised by the Board of Directors.
The Sustainability Promotion Committee, is chaired by the President of the Company and consists of officers
responsible for manufacturing, manufacturing technology, environment & safety, R&D, human resources
development, accounting & financing, corporate planning, corporate communication, legal, general affairs,
procurement, logistics, quality assurance, elastomers businesses, plastics businesses, digital solution
businesses, and life sciences businesses, as well as the representatives of the four committees above, isoperated in a manner that covers every functional departments and every business divisions of the JSRGroup.
(7)-1 Sustainability Planning Committee
The Group believes it must further promote sustainability initiatives in response to changes in theenvironment and continue to provide value to all stakeholders. This thinking was the basis for its
establishment of the Sustainability Planning Committee, which is chaired by the officer in charge of
Sustainability Promotion. The Committee discusses and promotes sustainable corporate activities, such as- 35 -

organizing CSV (Creating Shared Value) activities in cooperation with business divisions and responding to
global warming countermeasures and efforts to build a recycling society. As a particularly noteworthy
activity, the Committee is planning, developing, and promoting responses to the recommendations of the
Task Force on Climate-related Financial Disclosures (TCFD), for which JSR announced its support in
October 2020. Based on the JSR Group’s “Basic Approach towards Social Contribution”, the Committee
has examined new activities and advanced social contribution activities.
(7)-2 Environment, Safety and Quality Committee
Based upon the belief of the JSR Group that the Company is responsible for making sustainable development
possible, the Group has been pursuing activities relating to environment, safety, and quality with responsible
care activities at its core. Recognizing that environment, safety, and quality as essential issues that forms thebasis of business management, the Group has established the Environment, Safety and Quality Committee,
in which the officer in charge of Safety and Environment Affairs, and Quality Assurance serves as thechairperson, to effectively promote the group-wide activities for environment, safety, and quality.
The Committee has approved plans regarding responsible care activities in the field of Environment, Safety
and Quality, assessed and verified the results of the activities, strived to eradicate accidents and disasters,
reduce loads on the environment, and maintain and improve the level of chemical goods management andproduct safety.
The JSR Group has been endeavoring to earn the trust of its customers and give a sense of ease to local
people by disclosing the details of its activities and results in its Sustainability report of the Company. The
Group has also made efforts to enhance the reliability and transparency of the Sustainability report througha third-party verification. important.
(7)-3 Risk Management Committee
The JSR Group regards preventing a serious crisis from occurring and minimizing influence on its businessactivities if a serious crisis occurs as an important issue for business management. Therefore, the Group has
stipulated the Risk Management Policies and established the Risk Management Committee, in which theofficer in charge of Corporate Planning serves as the chairperson. The Risk Management Committee hascontinuously improved the Group’s policy and plans to deal with a crisis or a potential crisis.
(7)-4 Corporate Ethics Committee
JSR and the JSR Group have provided the JSR Group Principles of Corporate Ethics as a code of conduct toaccomplish responsibilities to stakeholders, one of the management policies to promote the realization of thecorporate mission. The Group has established the Corporate Ethics Committee, in which the officer in chargeof General Affairs serves as the chairperson, to conduct and advance our corporate ethics efforts.
The Corporate Ethics Committee has been endeavoring to ensure all parties understand its action guidelines
to be obeyed in daily corporate activities in the JSR Group. It has also confirmed regularly that all officers
and employees comply with the guidelines and continuously improved them. In addition, the Group has
introduced hotlines as part of its whistleblower system: an internal hotline for employees (calls aretransferred to the Corporate Ethics Committee), two external hotlines for employees (calls are transferred toeither lawyers or a third party who are specialized in such services and can respond in English, Chinese,
Korean, and Thai) and an external hotline for business partners.
(8) Corporate lawyer
The JSR Group may seek necessary legal advices during the course of management of the company orproceeding with day to day businesses from relevant law offices.
The following are the activities made in FY ending March 2021 for enhancement of corporate governance of the
JSR Group.

- 36 -

(1) The JSR Group has been issuing “The JSR Group Sustainability Report” annually both in Japanese and in
English and thereby promoting unified Sustainability activities among both domestic and overseas groupcompanies. The Group has obtained third-party opinion on important issues to ensure accountabilities andreliabilities of the contents in the JSR Group Sustainability Report.
For details of JSR’s Sustainability report, please visit the following site:
https://www.jsr.co.jp/jsr_e/sustainability/2021/outside/index.shtml(2) In order to further enhance activities relating to corporate ethics, JSR has established “the JSR Group
Principles of Corporate Ethics” as its code of conduct to be globally relied upon. The Company has
distributed the brochures thereof written in Japanese, traditional and simplified Chinese, Korean and Thai to
its employees of the JSR Group on global basis. As for education on the JSR Group Principles of Corporate
Ethics, the Company provided educational sessions for newly appointed managers, new recruits, or on
similar occasions as well as e-learning for all employees of JSR Group companies in Japan. In addition, theglobal JSR Group companies have been carrying out an annual survey to monitor its employees’ awarenessand behaviors relating to corporate ethics on global basis, and the results and findings of which are examined
and used for improvement in corporate culture and corporate ethics.
(3) As a part of program ensuring business continuity upon disasters, in December 2020, the Company, with thecooperation of outside expert organizations, conducted a review and identified areas for improvement inresponse to the COVID-19 BCP actions from January to June 2020. The Company received an evaluationthat appropriate and timely measures were taken in general. In addition, crisis management training was
conducted at each plant and research center in anticipation of a disaster occurring at each site after measuresagainst COVID-19 infection were taken. The Company is committed to enhance risk management systemthat prevents accidents and crisis and ensures continuity of business upon occurrence of crisis.
In FY ending March 2021, in response to expansion of COVID-19, the Company established the BCP(Business Continuity Plan) Task Force in February 2020, chaired by the president. The company, as amember of the material industry that supports essential industries worldwide, has implemented suchnecessary actions as enacting a standard of conduct to maintain operations at the Group's main production,
research, and development sites in Japan, Asia, Europe, and America, and other various measures, supplying
and mandatory use of personal protective equipment, curtailment of outside visitors, sharing of information
with employees worldwide, and established a remote work systems at each site. The details of the BCP Task
Force's actions are also being shared with outside directors and auditors.
While respecting the cultural differences and individuality of JSR business bases around the world, the JSRGroup is committed to risk management and business continuity by quick and comprehensive information
management and appropriate actions at the BCP Task Force.
(4) The Company has been promoting since 2009 unique risk management activities under the Risk
Management Committee by regularly identifying and evaluating the potential risks and studying countermeasures thereto at every business department in both domestic and overseas inclusive of Group companies.
As for the risk which potentially represents material adverse effect on business continuity, the Company has
been, under the supervision of Sustainability Promotion Committee and Risk Management Committee,
endeavoring to minimize the impact of such risks.
(5) The Company has been systematically performing environment and safety audit at manufacturing plant andlaboratory of the Company as well as domestic and overseas group companies with manufacturing facilities.
Starting from the FY ending March 2016, the Company has changed programs for audit such as items,
duration, departments for audit based upon the rolls of departments in charge for carrying out auditing andthose of departments receiving such audit and improved the effectiveness of audit by holding dialogues with
its employees and discussion on major challenges of the each business premises, in order to achieve further- 37 -

understanding on the effectiveness of PDCA on such audits and the details of activities to improve safety
awareness made at each of its business premises.
(6) The Company has made and distributed a brochure “Compliance Handbook” to employees of the JSR Group
companies both in Japan and overseas, in order to strengthen its activities to ensure compliance with laws
and regulations. The Company has established and has been performing the procedures to regularly checkand improve conformity of business activities with the relevant laws and regulation at the global JSR Groupregularly on annual basis. In addition, the Company focuses on ensuring conformity of laws and regulationsof particularly importance in the execution of operations, for example, by establishing a special measure for
special occasion(7) In order to prevent insider trading, the Company has established an internal rule, “Rules for preventing theemployees of JSR Group from insider trading”, and every year provided different positions of employeeswith education for preventing insider trading. This internal rule requires employees of JSR Group to submit
a prior notice before selling shares of the Company, which is subject to review by the officer in charge ofCompliance. In FY ending March 2021, the Company held educational session to new recruits by using
lecture materials prepared by TSE and internal rules on regulations against internal trading.

3.

Reasons for Adoption of Current Corporate Governance System
JSR is a company with audit & supervisory board members. The Company believes that its corporate governanceworks effectively due to the following reasons:
The Company pursues its basic policies and enhances the structures for corporate governance as stated in“[Principle 3-1 (ii)] JSR’s basic approach towards and policy on corporate governance” in “Disclosure Based on
the Principles of the Corporate Governance Code” under “1. Basic Views” of “I. Basic Views on Corporate
Governance, Capital Structure, Corporate Profile and Other Basic Information” of this Corporate Governance
Report while also steadily executing its various commitments to shareholders and other stakeholders.

- 38 -

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights

Early Notification of General
Shareholder Meeting

Scheduling AGMs Avoiding thePeak Day
Allowing Electronic Exercise of
Voting Rights

Participation in Electronic Voting
Platform
Providing Convocation Notice inEnglishOther

2.

IR Activities

UpdatedPreparation and Publication ofDisclosure Policy
Regular Investor Briefings for
Individual Investors

Regular Investor Briefings forAnalystsandInstitutional
Investors

Supplementary Explanations
JSR dispatched the convocation notice and meeting materials for ordinary
general meeting of shareholders on May 28, 2021, 20 days prior to the date of
the meeting. In addition, the Company disclosed via internet the contents ofthe convocation notice and meeting material 8 days prior to the date ofdispatching such materials.
Ordinary general meeting of shareholders for FY ending March 2021 was heldon June 17, 2021.
JSR has allowed its shareholders to exercise voting rights by electronic means
since 2004. In addition, JSR has adopted an online voting system using
smartphones to provide individual shareholders with convenience forexercising voting rights since 2020.
JSR has been participating in the Electronic voting Platform for institutional
investors since 2006.
JSR provides the convocation notice of an ordinary general meeting ofshareholders both in Japanese and English on its website, the above-mentioned
electronic voting platform, and website prepared by TSE.
As for convocation notice and other documents prepared for its ordinary
general meeting of shareholders, JSR has endeavored to enhance the contents
by providing information on its products and mid-term business plan in
addition to those required by law and to make the documents easy tounderstand by using color graphics and pictures. (Available only in Japanese
at present)
The Company makes efforts to provide presents its business report by audio
visual presentation as well as presentation by CEO or the president on its midterm business plan at its ordinary general meeting of shareholders and theintroduction of the Company’s products by exhibition prior to the meeting as
well. However, at the 76th ordinary general meeting of shareholders held in
June 2021, the Company sent a video message from Mr. Eric Johnson,
Representative Director and CEO to shareholders. The Company also livebroadcasted the meeting, of which notice was sent to the registeredshareholders of the Company.

Supplementary Explanations
JSR formulated its disclosure policy to further enhance the reliability of its
disclosures and discloses the policy in its web site.
JSR explains the outline and latest performance of the Company by updating
the contents of its website and by posting IR movies presented and explainedby CEO or the president himself at the web site of the Company. In FY ending
March 2021, explanatory meetings for individual investors by the officer incharge of IR was not held due to the COVID-19.
JSR holds analyst meetings for analysts and institutional investors four times ayear (the year-end, interim, and first and third quarters).
JSR holds a meeting to explain its mid-term business plan once a year. In themeeting, CEO, the president explains to a lot of analysts and institutional
investors.

- 39 -

Regular Investor Briefings for Every year, the CEO, the president and/or an officer in charge of IR goes toOverseas Investors
investors in North America, Europe, and Asia to hold explanatory meetings. In
2020 and 2021, the meetings were held online amid travel restrictions broughtby the COVID-19 pandemic.
Posting of IR Materials on IR materials posted on the Company’s website include: business performance,
WebsiteIR information video (in which CEO or the president appears), presentationmaterials, securities reports, interim reports, the mid-term business plan,
integrated reports and Sustainability reports.
The Company issues integrated report "JSR Report". JSR Report contains
financial information including management strategies and non-financial
information including matters relating to the environment and society, withreference to the disclosure framework of the International Integrated Reporting
Council (IIRC) and the Ministry of Economy, Trade and Industry's Guidance
for Collaborative Value Creation.
Please refer to the following URL to understand IR of JSR
https://www.jsr.co.jp/jsr_e/ir/
Establishment of Department Mr. Hideki Miyazaki, director and Managing Officer is the officer in charge
and/or Manager in Charge of IR for IR and Ms. Yoshiko Takeda, General Manager, Corporate Communication
Department, is responsible for communication related to IR with support from
Finance Department for regular IR activities.
Other
In FY ending March 2006, JSR formulated its disclosure policy to enhance thereliability of its disclosures.

3.

Measures to Ensure Due Respect for Stakeholders Updated
Supplementary Explanations
Stipulation of Internal Rules for As stated in “(3) Relationship with stakeholders” of “[Principle 3-1 (ii)] JSR’s
Respecting the Position of basic approach towards and policy on corporate governance” under [Disclosure
Stakeholders
Based on the Principles of the Corporate Governance Code] in “1. Basic
Views” of “I. Basic Views on Corporate Governance, Capital Structure,
Corporate Profile and Other Basic Information” of this Corporate Governance
Report.
Implementation ofCreating value through materials to enrich society, people and the environment
Environmental Activities,
is the JSR Group’s corporate mission and the significance of its existence. JSR
Sustainability Activities etc.
considers it is important to behave faithfully as a good corporate citizen andmeet the expectations of our stakeholders in such a process. Since the code of
conduct to achieve the above targets is the JSR Group’s Sustainability Activity,
the Company places it as an important issue of business management. Four
committees (Corporate Ethics Committee, Environment, Safety and Quality
Committee, Risk Management Committee, and Sustainability Planning
Committee) centering on the Sustainability Promotion Committee have
responded to new themes associated with the requirements of a society that
increasingly becomes sophisticated. Furthermore, as a member of the chemicalindustry, the Company has promoted Responsible Care—a voluntary initiative
to improve safety, health, and environmental performance—and disclosed
information by posting the details and results of its activities on JSR Group’s
Sustainability report.
Development of Policies on JSR stipulated its Disclosure Policy in FY ending March 2006 to enhance theInformation
Provision
to reliability of information disclosure further. The Company has been
Stakeholders
endeavoring to ensure prompt, accurate, active and fair information disclosure
by preparing organizations and systems for information disclosure to establish- 40 -

Othera company-wide cooperative framework with the aim of improving the qualityof information disclosure.
JSR believes that understanding and accepting diverse human resources
regardless of gender, nationality, business background, and their diverse values
will lead to the generation of unique inspiration and innovation. The Company
sets promoting value creation through diversity as a managerial target. To
achieve the above targets, it established the Diversity Development Office in2015 as a body dedicated to promoting Diversity, Equity & Inclusion (DE&I)
and is currently implementing pertinent initiatives accordingly.
Among diversity development, active support for female employees is one of
the key management issues.
As one of measures to support female employees, the Company has proceededwith systematic personnel programs to increase female career manageress tobe, to support non-career female employees to cultivate business skills and toencourage female employees with strong motivation to switch from non-career
to career positions.
Furthermore, in order to show management’s strong determination and ask all
employees for their understanding on and cooperation for active support for
female employees, the Company sets the percentage of female to the total
number of college graduates recruited in the normal recruiting period and the
proportion of female employees in managerial positions as its immediate
numerical target. In terms of systems, the Company has taken measures tosupport employees in a variety of ways of working, such as easing therequirements for working at home, which started with the support of balancing
child-rearing and nursing care, and changing the system to what can be flexibly
applied for each job or department. As a result of the flexible operation ofsystems and the expansion of IT infrastructure, remote work has also
progressed in measures against COVID-19 centered on the head office. Taking
this opportunity, the Company is working to create a corporate culture in which
new ways of working are accepted and utilized.
The Company, by setting up Global Human Resources Team in FY ending
March 2016, has prepared an organization to engage in management of global
human resources and has been coping with various issues and requirements
arising from the different stages of globalization of the businesses. Throughpreparation for the program for cultivating next generation personnel for global
management and strengthening the collaboration among personnel
departments of JSR group companies both in Japan and overseas, the Company
has examined the possibilities of promoting local staff to executive position ofoverseas group companies and has endeavored to intensify the collaborationand communication among personnel departments both in Japan and overseas.
In addition, as a part of acceleration of globalization within the Company, theCompany has increased the number of non-Japanese employees, has been
dispatching Japanese employees to overseas laboratories as trainees and has
been accepting long term trainees from overseas group companies.
Furthermore, the Company is promoting not only women but also many midcareer hires and foreign nationals to core positions, including as managers andexecutives, where they are thriving. Because promotions and appointments tomanagement and executive positions are made based on ability andperformance, without distinctions for women, mid-career hires, and foreign
nationals, the Company does not set any voluntary and measurable targets for- 41 -

the promotion of foreign employees and mid-career hires to managerial
positions. Nonetheless, the Company will continue working to ensure diversity
in its appointment of core personnel by, among other actions, supporting
employees’ autonomous career development and fostering career awareness.
As for employment of handicapped personnel, the ratio of employment as ofMarch 2021 was 2.34% while the laws and regulations require 2.3%. The
Company allocates appropriate work places and types of jobs for each of themafter consultation of state of handicaps and the areas where they are good at.
The limited number of the handicapped persons is working at the departments
handling dangerous materials such as manufacturing and R&D at present,
however, the Company has been endeavoring to widen the work places while
securing the safety. In addition, with the aim of contributing to a society wheremore people with disabilities can work as members of the Company and play
active roles together, the Company has started efforts to strengthen
employment of people with disabilities through the use of rental farms forcompanies.
For details on the Company’s policy for hiring and appointing diverse humanresources as well as numerical targets and achievements in the area of
promoting women's participation, please see the “Diversity, Equity andInclusion” section of JSR Corporation’s Sustainability Report(https://www.jsr.co.jp/jsr_e/sustainability/2021/society/diversity.shtml). For
information on the Company’s policies related to human resources
development and improving the organizational environment as well as details
concerning the implementation of those policies, please see the “Labor
Environment”
sectionof
thesamereport(https://www.jsr.co.jp/jsr_e/sustainability/2021/society/labor_environment.sht
ml). [Supplementary Principle 2-4-1]- 42 -

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development

Updated(1) Basic policies for management“JSR Group” (which hereinafter means JSR group companies consisting of the Company and those whoseparent company under the Corporation Law is the Company) holds and relies on the following Corporate
Mission and Management Policies for managing and conducting its businesses.
Corporate Mission :Materials Innovation :We create value through materials to enrich society, people, and the environment.
Management Policies:
Fundamental Pillars of Management
 Continuous Creation of Businesses Enhancement of Corporate Culture Increase in Corporate Value
Responsibility to Our Stakeholders
 Responsibility to Our Customers /Business Partners
 Responsibility to Our Employees
 Responsibility to Society Responsibility to its Shareholders(2) Structures to ensure that execution of duties of directors and employees of JSR Group complies with thelaws and ordinances and the Articles of Incorporation
1) Under the rules of the Board of Directors and other relevant rules, the Board of Directors of theCompany inclusive of independent outside directors monitors and directs the execution of duties of
directors and officers (including, executive managing officers, managing officers and senior officers inthis section for Internal Control System) of the Company, as well as makes decisions on importantmanagement matters of the Company and on fundamental management matters of JSR Group.
As for supervising the execution of duties of the directors and employees of the “Group Companies”(which hereinafter means companies that which belong to JSR Group but other than the Company), an
officer in charge of Group Companies as specified under “the Code of Group Companies Management”
is responsible for such monitoring and direction respectively.
2) The Company has established the Sustainability Promotion Committee chaired by the President andconsisting of four committees such as the Sustainability Planning Committee, the Environment, Safety
and Quality Committee, the Risk Management Committee, and the Corporate Ethics Committee, which
directs and supervises the activities to ensure and promote Sustainability Activity of JSR Group
including compliance with laws, ordinances and other rules.
3) The Company has established “JSR Group Principles of Corporate Ethics” as a code of conduct for the
directors and employees of JSR Group, which are rules with penalty clauses to ensure its effectivenessand which JSR Group endeavors to make thoroughly understood and penetrated among their respective
directors and employees by continual education and promotion under the supervision of the Corporate
Ethics Committee.
4) The Company has, in accordance with the Financial Instruments and Exchange Law, established andbeen managing and maintaining the internal control system to ensure appropriateness of financial reportof JSR Group.
5) The Company has established an organization specialized in internal auditing independent from thebusiness execution divisions (“Internal Auditing Office”) in order to monitor and internally audit theeffectiveness of the internal control system of JSR Group.

- 43 -

6)

7)

The Company has established consulting and reporting channel so that any directors and employees of
JSR Group can report directly to the Corporate Ethics Committee of respective Group Companies towhich they belong or of the Company, or through designated external hotlines involving outside
attorneys (which may be done anonymously) when they become aware of internal actions that violate
or are likely to violate the compliance rules. Any report made through external hotlines will be
automatically and simultaneously transferred to and shared by full time audit and supervisory board
member in order to ensure independence of the hotlines from the management. The Company has alsoestablished suppliers’ hotlines so that the suppliers of JSR Group can report the issues relating tocompliance rules to the Company. The Company ensures that, in any case, the person who made suchreports suffers no disadvantageous treatment as a result of such reporting.
The JSR Group’s basic principle against the anti-social forces is to cut off all relationships including
but not limited to any business transactions with such forces. The management and the entire
organization of the Company or, as the case may be, of respective Group Companies shall resolutely
and firmly reject any claims or requirements made by anti-social forces in collaboration with external
entities such as the police forces.

(3) Structures to ensure efficient execution of duties of directors of JSR Group
1) At the Company
a The Board of Directors holds regular meetings on monthly basis in principle and ad hoc basis if
required in order to deliberate and resolve important matters relating to the execution of businesses
and to monitor and direct supervise the execution of duties of directors and officers. Executive
Committee consisting of CEO, the president, executive managing officer, managing officers, andsenior officers and/or officers or General Managers designated by the president and a full time audit
and supervisory board member holds meetings on weekly basis in principle in order to deliberate,
direct and/or receive reports on the matters relating to fundamental management policies,
managerial guidelines, management plans and/or major business issues from business divisions.
The Executive Committee is chaired by CEO or the president. The standing audit & supervisoryboard member also attends the committee meeting.
After review and deliberation by the Executive Committee, major issues will be brought up to theBoard of Directors for resolution while the rest will be determined by CEO or the president. In
addition, Business Issue Committee consisting of CEO, the president, Executive Managing officers
and Managing officers holds meetings on twice a month basis in principle in order to, throughdiscussion and sharing information and views, clarify and determine the direction of the key issues
relating to management principles and fundamental management policies, policies behind theindividual business decisions, or the changes in business strategies well in advance, which will befurther reviewed and discussed at the Board of Directors Meetings or Executive Committee
Meetings.
b The Company has adopted officer system in order to clearly distinguish managerial decisionmaking and monitoring functions from those of business execution and to enhance respectivefunctions. Officers Committee consisting of CEO, the president and all of the officers holds
meetings when appropriate for the purpose of sharing common and thorough understanding on thestatus and major issues relating to the management and performance of the Company.
c By establishing the rules for decision making authorities at the Company and Group Companies,
the JSR Group has specified the bodies and ways for decision making in accordance with theimportance of such decisions in order to ensure the appropriateness and effectiveness of theexecution of the businesses.
d The Company has established “the Code of Group Companies Management” for the managementof Group Companies. An officer in charge of a Group Company is responsible for administrationand management thereof, while other corporate functional departments such as safety,
environmental affairs, accounting, finance, general affairs, legal affairs, and sustainability
promotion provide support and services to Group Companies.

- 44 -

2)

At Group Companies
a At the Group Companies in Japan with the Board of Directors, the Board of Directors regularly
holds meetings, and the executive committee is established in a similar manner to the Company ifnecessary in order to deliberate and decide the important business matters in accordance with therelevant internal rules and regulations.
b At the Group Companies in Japan without the Board of Directors, executive committee of thecompany consisting of the president, other key management personnel, audit & supervisory board
members of the company, and the officer in charge of the relevant Group Company, and/or his/her
staff holds meetings on regular basis and deliberates and decides important business matters inaccordance with the relevant internal rules and regulations.
c At overseas Group Companies, the Board of Directors holds meetings on regular basis anddeliberates and decides important business matters in accordance with the relevant internal rules
and regulations
d The Company has, considering the location of the market and major business premises, establisheda holding company in north America (hereinafter referred to as “NAHQ”) responsible for overseeing
the global Group Companies involved in life sciences business in order to accelerate decision
making processes and enhance internal control of these companies. With regard to the decision
making authority over the above Group Companies, the president of the Company transfers his
authority, which is to decide upon deliberation at the executive committee, to the president of theabove holding company as long as the decision is made upon deliberation at the executive committeeof the above holding company.

3)

The JSR Group has established its mid-term business plan “JSR 20i9” considering possible changes inbusiness environment in the future, of which implementation plans were broken down into corporate
annual targets and budget of JSR Group as a whole. Each of the companies of JSR Group and thebusiness divisions thereof will set up and implement its action plans to achieve the objectives.

4)

The tenure of office of directors of JSR Group is one year so that JSR Group can quickly cope with theever-changing business environment.

(4) Structures for loss and risk management and other rules of JSR Group1) The Company has been continually monitoring the risks associated with the execution and progress ofthe businesses of JSR Group by way of reporting and discussion at the meetings of the Board of
Directors, Executive Committee, Business Issues Committee, Officers Committee, and/or otherimportant meetings as well as controlling budget.
2) As for the major risks other than those described in the preceding paragraph 1) above, Risk Management
Committee of the Company chaired by the officer responsible for Corporate Planning, determines
appropriate countermeasures in relation to the degree of visible or potential risks, as well as enhances
preparation and implementation of the risk management plans of JSR Group made by the relevantCommittees (Corporate Ethics Committee, Environment, Safety and Quality Committee) or byindividual business divisions, or proceeds company-wide risk management activities.
3) In the event of serious crisis of the JSR Group, the “Emergency Headquarters” (“Anti-Disaster
Headquarters” in the case of accidents or disaster) directed by the president of the Company will be set
up in order to proceed necessary crisis management in accordance with the “Risk Control Manual.”(5) Structures for maintenance and management of information relating to execution of duties of directors of theCompany
The Company has, in accordance with the relevant laws and “Rules for Documents and Information
Management”, been properly maintaining the relevant documents and/or those in electromagnetic forms in
relation to the execution of duties of directors and officers such as minutes of meetings of the shareholders,- 45 -

the Board of Directors, Executive Committee, Business Issues Committee, and authorization documents so
as to make such documents easily accessible by the directors and audit & supervisory board members of theCompany.
(6) Structures for reporting the execution of duties by directors and employees of the Group Companies
1) An officer responsible for the relevant Group Company reports business results and financial statementsof the company to Executive Committee and the Board of Directors on regular basis.
2) The Audit & Supervisory Board Member of a Group Company on regular basis reports to audit &supervisory board members and Internal Audit Office of the Company the results of the audit made at
the Group Company.
3) The department in charge of internal audit of NAHQ will perform internal audit of the Group Companies
in life sciences businesses and report its findings to CEO or the President and manager of the Internal
Auditing Office of the Company. The Internal Auditing Office regularly reports the results to the Boardof Directors and Audit & Supervisory Board.
(7) Matters related to audit by audit & supervisory board members
1) Matters related to employees assisting audit & supervisory board members and ensuring his/her
independence
The Company has appointed personnel whose responsibilities are to assist audit & supervisory board
members (“the assistant”). Any personnel decisions on the assistant are subject to prior consultation andapproval by the Audit & Supervisory Board. In addition, solely audit & supervisory board members are
responsible for evaluating the performance of the assistant.
2) Matters related to effectiveness of command by audit & supervisory board members to the assistant
The assistant shall follow instructions and command solely made by audit & supervisory board
members.
3) Structures for directors and employees of the Company, for directors and employees of the Group
Companies or for those who received reports from them to report to audit & supervisory board membersof the Company to receive reports from its directors and employees, or from directors and employeesof the Group Companies, or from those who received reports from directors and employees of the Group
Companies.
a Audit & supervisory board members ensures that they can review major decisions on the executionof duties of directors through participation to the meetings of the Board of Directors, Executive
Committee and Officer Committee and the circulation of authorization documents after approvalby the relevant personnel.
b Such corporate administrative department including general affairs, legal and Sustainability
Promotion as designated by audit & supervisory board members regularly, or upon request, report
to Audit & supervisory Board Members on the progress and operating status of internal control
system such as compliance with rules and regulations and risk management.
c Internal Auditing Office regularly, or upon request, reports the results of internal auditing on JSRGroup to audit & supervisory board members.
d Directors and employees of the Company promptly and effectively report to audit & supervisoryboard members such items, but not limited to, as the fact that might cause material damages to theCompany and/or materially violate the laws and/or articles of incorporation of the Company, or as
specified in advance in accordance with the prior agreement with the audit & supervisory board
members.
e Directors and employees of JSR Group promptly report to audit & supervisory board members
relating to execution of businesses.
4) Structures to ensure that persons who report to audit & supervisory board members do not to suffer
disadvantageous treatment as a result of such report
The JSR Group prohibits disadvantageous treatment its directors and employees solely because they
had reported to audit & supervisory board members.

- 46 -

5)

6)

2.

Matters related to policies related to procedures for advance payment or pay back of audit expenses andhandling audit expenses and others
The Company bears all the expenses incurred in relation to execution of duties of audit & supervisoryboard members unless such expenses are deemed unnecessary
Other structures to ensure effectiveness of auditing by audit & supervisory board members.
The audit & supervisory board members maintain cooperation and communication from time to timewith relevant parties such as Internal Auditing Office, the Independent auditors, audit & supervisoryboard members of Group Companies.
a

Basic Views on Eliminating Anti-Social Forces(1) Basic views on eliminating anti-social forces
The JSR Group’s basic principle against the anti-social forces is to cut off all relationships including but notlimited to any business transactions with such forces. The management and the entire organization of theCompany or, as the case may be, of respective Group Companies shall resolutely and firmly reject any claims
or requirements made by anti-social forces in collaboration with external entities such as the police forces.
The JSR Group has stated in the “Code of Conduct against Antisocial Forces” under the “JSR Group
Principles of Corporate Ethics” that its basic policy, upheld by its top executive and the company as a whole,
is to firmly reject any demand made by anti-social forces. The Group has stipulated its basic policy andspecific countermeasures in normal times and an emergency in the Standards for Response against Antisocial
Forces.
(2) Establishment of structures for eliminating anti-social forces
1) Establishment of the person and the department in charge against anti-social forces
The JSR Group has made the officer in charge the General Affairs Department and the department itself
responsible for coping with anti-social forces through organizational confrontation under his/hersupervision. In head office and each office, the general managers in charge of general affairs will copewith the demand made by anti-social forces, if any.
2) Cooperation with external professional organizations
The department in charge against anti-social forces has been endeavoring to establish good relationships
with external professional organizations including the police regularly and to strengthen its cooperation
with such organizations by frequent consultation.
3) Collection and management of information regarding anti-social forces
The JSR Group’s department in charge against anti-social forces regularly collects information
regarding anti-social forces through the media and actively participates in information exchange
meetings and training seminars sponsored by external professional organizations including the police
to gather and unitarily manage information regarding the activities of anti-social forces, the actual
situation of illegal demands, and policies to cope with anti-social forces, and prepares materials.
4) Preparation of manuals to cope with anti-social forces
The department in charge against anti-social forces has stipulated internal manuals to respond to antisocial forces.
5) Implementation of training activities
The JSR Group educates its employees, mainly personnel in the department in charge against anti-social
forces on how to cope with anti-social forces using educational materials prepared by external
professional organizations including the police.

- 47 -

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation
JSR has not adopted anti-takeover measures.
The Company considers it is important to increase its corporate value by gaining the trust and appreciation fromall stakeholders as an enterprise that has high profitability and can steadily realize safety and its environmental
mission.

2.

Other Matters Concerning Corporate Governance System(1) For the diagram showing the structure of corporate governance of the Company including its internal control
system, please refer to the Attachment: “Corporate Governance Structural Diagram”(2) Outline of timely disclosure system
Here is an outline of JSR’s internal system to disclose company information in a timely manner.
1)

Basic policy for disclosing information
JSR has stipulated its Disclosure Policy as a rule to disclose important company information to investors
in a prompt, accurate, and fair manner. The Company has focused on actively disclosing information
on its business conditions in accordance with related laws and regulations, such as the Financial
Instruments and Exchange Act, and rules regarding timely disclosure provided by the Tokyo Stock
Exchange Inc.
In addition, JSR has strived to disclose information, which does not fall under the TSE’s timely
disclosure rules but is deemed to influence investors’ investment decisions, in a timely and appropriatemanner. Furthermore, the Company has stipulated Rules for Preventing JSR Group’s Employees from
Committing Insider Trading. It has made endeavors to ensure that all directors and employees
understand and comply with basic rules regarding the management of insider information which they
have come to know through conducting their duties and the purchase and sale of stocks by directors andemployees with the aim of preventing insider trading from occurring.

2)

Internal structure for timely disclosurea Decisions madeImportant decisions are made at a Regular Board of Directors’ meeting or the Executive Committee
and as necessary, an Extraordinary Board of Directors’ meeting is held to make prompt decisions.
If important decisions made fall under the TSE’s timely disclosure rules, the Company shalldisclose such information in a prompt manner after obtaining approval at the Board of Directors’
meeting.
JSR shall disclose information on account settlement immediately after having an audit byindependent auditor on its books and obtaining approval at the Board of Directors’ meeting.
b Facts that have occurred
Regarding important facts that have occurred, JSR has established a structure that enables theCompany to gather information and make immediate response and disclose information in an
appropriate manner.
c Risk information
Regarding risk information, JSR has established the Sustainability Promotion Committee, which
is designed to ensure issues related to environment, safety and quality and corporate ethics arecommunicated to, understood, and observed by all parties. The Company has established astructure that enables it to respond to an emergency by preparing an information network to- 48 -

dtransmit information from JSR and JSR Group companies to the Sustainability Promotion
Committee when a crisis occurs.
Disclosure of information
The Corporate Communications Department, which takes the leadership in disclosing information,
has strived to disclose information promptly in cooperation with related departments. In addition,
the Department has put disclosed materials on the Company’s website so that shareholders andinvestors can easily access them any time.

For the diagram of the internal structure for disclosing company information in a timely manner, please refer tothe attached Material 2: Information Disclosure Structural Diagram.

- 49 -

Attachment 1
Corporate Governance Structure Diagram

As of December 17, 2021

General Meeting of Shareholders
Appointment/
Dismissal

Appointment/
Dismissal

ReportAppointment/
Dismissal

Audit

Audit & Supervisory Board

3 audit & supervisory board
members inclusive of
2 independent outside members

Independent
Auditors

Board of Directors

9 directors inclusive of
4 independent outside directors

ReportReportReportReportAccounting
Audit

Collaboration(Information Exchange)

Deliberation
Appointment/
Dismissal

Remuneration Advisory
Committee

ReportCollaboration

Oversight/
Supervision

Representative Director, CEO
Representative Director, President

Appointment/
Dismissal
Oversight/
Supervision

Nomination Advisory
Committee

Sustainability Planning
Committee

ReportReportEnvironment, Safety and Quality
Committee

Executive
Committee
Business Issues
Committee

Sustainability Promotion
Committee

Risk Management
Committee

Officers
Committee

Internal
Audit OfficeInternal
Audit

Corporate Ethics
Committee

24 Officers
Business Operation Units- 50 -

ReportAttachment 2

Information Disclosure Structural Diagram

Sustainability Promotion
Committee

Board of Directors meeting
Representative Director

Executive Committee
meeting

Corporate
Communication
Department

Disclosure

ReportRisk Information

Officer in Charge ofCorporate Communication
ReportReportCorporate
Communication
Department

Divisions in charge
Report- 51 -

Tokyo Stock
Exchange