ANNUAL REPORT 2013
For the year ended March 31, 2013

JSR Corporation (formerly Japan Synthetic Rubber Co., Ltd.) was established in December 1957 withthe aim of producing synthetic rubbers domestically in accordance with the Special Measures Law for the
Synthetic Rubber Manufacturing Industry.
Since the early days, the Company has remained in leading positions in the area of petrochemicalmaterials, such as synthetic rubbers, emulsions, and plastics, and maintained the top market position
domestically.
Throughout its growth process, JSR has always focused on expanding its operations and stabilizing its
business foundation. We have concentrated our efforts on applying polymer technologies, learned throughour petrochemical business, to materials for the fast-growing information and communications sectors. Today,
we provide numerous materials for use in displays and semiconductor devices, as well as optical materials,
and we hold high market shares.
In order to leverage our core businesses in petrochemical products and fine chemical materials andfurther broaden our operations, we have identified three fields as Strategic Businesses slated for sustainablegrowth: precision materials and processing, environment and energy, and biomedical materials (life sciences).
Our corporate mission is “Materials Innovation—We create value through materials to enrich society, people,
and the environment.”

Forward-Looking Statements
Statements regarding the company’s future plans, strategies, projected performance and outlook are based on information available
at the time of writing. Readers are cautioned that economic trends in JSR’s target markets and other risks and factors beyond thecompany’s control could cause actual results to differ materially from those projected by management.

Contents
		03

		 BUSINESS
02

Consolidated Financial Highlights

03 To Our Shareholders
08 Feature Story
10

At a Glance

12

JSR’s Advancing Operations

The JSR Group will create
value through innovative
materials to contribute tosociety and advance its
business operations.

		 13 Petrochemical Products Business08
Materials Development
Drives Life Sciences
Business Expansion

		 15 Fine Chemicals and Other Products Business		 GOVERNANCE
18

Corporate Governance System

24

The JSR Group’s Essential Elements

26

Corporate Social Responsibility

28 Global R&D, Production, and Marketing
		 Operations
30

JSR Global Network

		 FINANCIAL
32

Ten-Year Summary

34

Management’s Discussion and Analysis

38

Risk Information

40

Consolidated Financial Statements

46

Notes to Consolidated Financial Statements

62

Independent Auditor’s Report

		 DATA
63

Corporate Data64

Directors, Corporate Auditors, and Officers

27
JSR holds seminars for
institutional investors
and business analysts.

Consolidated Financial Highlights

Net Sales

Operating Income

Net Income per Share¥

371.5 billion¥

35.2 billion¥(+6.2%)(–2.1%)(+15.2%)

Net Assets

ROE

Equity Ratio¥

315.7 billion

10.3%

63.9%

(+11.8%)(+0.6 point)(–1.3 point)

126.13Highlights of Fiscal 2013
In fiscal 2013, ended March 31, 2013, consolidated net sales amounted
to ¥371.5 billion, up 6.2% from the previous year. Operating income
declined 2.1%, to ¥35.2 billion, and net income rose 14.7%, to ¥30.3
billion.
In Core Businesses, including petrochemicals, semiconductor materials,
and flat panel display materials, we posted year-on-year increases
in sales, however, the operating income was sluggish due to weak
conditions in our target markets.
Sales from Strategic Businesses grew to around 2.5 times the figure of
fiscal 2011.
The Company declared a year-end dividend of ¥17.00 per share,bringing total annual dividends to ¥34.00 per share.

02

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

To Our Shareholders

MITSUNOBU KOSHIBA, Representative Director and President

The JSR Group will create value through innovative materials
to contribute to society and advance its business operations.
Progress of Mid-Term Business Plan (“JSR20i3”)
The JSR Group’s medium-to-long-term goal is to evolve into its envisioned position inyear 2020 based on various analyses of the predicted business environment through to2030. As part of realizing this vision, we have formulated our mid-term business plan,
titled “JSR20i3.” We refer to the three-year period of the plan—from April 2011 toMarch 2014—as the “activation toward growth” period, during which we have been
implementing multiple business strategies. In fiscal 2013, ended March 31, 2013, thesecond year of the plan, we feel that we made steady progress toward realizing our
medium-to-long-term vision.
To achieve dramatic future progress under the mid-term business plan, we haveidentified two major objectives: “become the top global player with highly competitive products in core businesses” and “transform our business structure from two earning bases (Petrochemical Products Business and Fine Chemicals and Other Products
Business) to three (Strategic Businesses).” Our core businesses are elastomers—in which
we been involved since our foundation—as well as semiconductor materials and flat
panel display (FPD) materials. We have fostered these businesses to capture large market shares, reflecting the high acclaim we have earned for our technological prowess.
We have also continued to make concentrated investments in next-growing businesses identified under the mid-term business plan, and such efforts are gradually
producing results. These are what we call our Strategic Businesses. In particular, they
JSR Corporation Annual Report 201303

Net Sales(¥ billions)Operating Income

Petrochemicals

500

Fine Chemicals and Other Products(¥ billions)

Petrochemicals

50

43.0

415.0
400

310.2

340.7

349.9

371.5

30

200

20

100

10

FY2010

‘11

‘12

‘13

39.1

40

300

0

‘14 (Plan)

Fine Chemicals and Other Products

0

36.0

35.2

‘12

‘13

20.2

FY2010‘11‘14 (Plan)

are the biomedical materials business and the lithium-ion capacitor (LIC) business,
which is related to the environment and energy. As part of our “activation toward
growth” initiatives, we are making a full-fledged effort to foster our Strategic Businesses so that they become our third core business.

Fiscal 2013 Performance
Fiscal 2013 was the second year of “JSR20i3.” For the year, the JSR Group posted a 6.2%
increase in consolidated net sales, to ¥371.5 billion—the highest level since the global
financial crisis. The main factor boosting revenue was growth in our Elastomers Business and in our Strategic Businesses. Despite a languishing industry, our Elastomers
Business generated increased sales, with a significant contribution from our solution
polymerization styrene-butadiene rubber (S-SBR) business. Among Strategic Businesses, we posted increased sales of ARTON™ retardation film for mobile applications.
Operating income slipped 2.1%, to ¥35.2 billion. This was mainly the result of deteriorating conditions in the Elastomers Business during the year, which caused spread
margins to shrink. In addition, we incurred expenses for scheduled major preventative
maintenance at our main plant. We also made proactive capital expenditures in bothcore and strategic businesses, which pushed up fixed costs. Moreover, we posted loss
due to actuarial differences for employees’ severance and retirement benefits andfixed costs of the Kashima Plant, which was posted as extraordinaly loss in previous
fiscal year due to the Great East Japan Earthquake.

Future Growth Scenario
In its growth scenario aimed at the year 2020, the JSR Group is concentrating on specific items for each of the businesses described below.

In the Petrochemical Products Business, which includes elastomers, our two key
strategies are to (1) achieve the top global position with highly competitive products,and (2) step up reforms of our earnings and cost structures. With respect to the tirelabeling systems in various countries, JSR is seeking to become the No. 1 global player

04

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

Progress of the S-SBR Business

Recovery of JSR’s Share of ArF Market

The S-SBR business has been sharply expanding due to capacity
expansion to keep pace with the increase in demand.

・JSR expects its share to recover to record levels in the 2x generation
ArF market.
・Full-scale production of 2x generation ArF will start in FY 2014.

VolumeSales

22%

Change in sales of S-SBR(relative to 2007 as 100%)

Sales CAGR(FY 2011 to FY 2013)300%

40% or More

JSR’s share by ArF/node
100%

JSR’ s share of the 2x generation ArF market

200%
100%
0%

‘08

‘09

‘10

‘11

‘12

‘13

‘14E

0%

9X-7X

6X-5X

4X-3X

2X-

(Source: Prepared by JSR based on several market data.)in S-SBR products for fuel-efficient tires, for which demand is growing. In November
2011, the capacity expansion of the S-SBR Plant in Yokkaichi was successfully completed, resulting in the increase in a year-to-year sales of S-SBR this fiscal year. The
current capacity of S-SBR is 60,000 tons per year at Yokkaichi and 30,000 tons per year
at Styron Europe GmbH (formerly Dow Europe). Going forward, a new Phase I S-SBR
plant in Thailand, which is a joint venture with Bangkok Synthetics Co., Ltd. and commence production in this coming fall, will produce 50,000 tons per year of S-SBR and
the Phase 2 expansion is being planned. Another S-SBR plant is being explored outside of Asia and may be built depending upon the market demand. We are particularly strong in third- and forth generation high performance S-SBR, for which barriers
to entry are high. Taking advantage of our industry-leading performance and quality, JSR will move more forward aggressively to capture the growth of demand thanother competitors.
Meanwhile, in the commodity areas, our strategy is to reduce volatilities of thebusiness in terms of revenue and profit by introducing price formula incorporating
the costs of naphtha and monomers in most of our sale transactions, which, in turn,customers entertain.

In the Semiconductor Materials Business, we are on the way to capturing a market
share of 40% or more for 20nm-generation ArF (argon fluoride) photoresists, which
are becoming mainstream. Anticipating an increase in fabrication processes using
20nm ArF photoresists, we will target business expansion in excess of the market
growth rate by expanding and upgrading our lithography materials portfolio, including not only ArF photoresists but also peripheral materials. We also expect new advances in shrinking technologies, and in response we will deploy the latest technologies in order to achieve further market share expansion.

In the FPD Materials Business, the market is polarizing in two directions—commodity and high-performance devices—and we will respond comprehensively. In materials
for large-scale television panels, we will address globalization, centering on Asia, by
JSR Corporation Annual Report 201305

Display Materials

Progress of Strategic Businesses as a Whole

Accelerating the expansion of FPD business by broadening the productportfolio for small- and medium-sized panels with high growth potential

Sales significantly grew in FY 2013, increasing 2.5 times over FY 2011.
Sales growth will accelerate from FY 2014 centering on the LIC andLife Science businesses.

Product Portfolio

Functional coating materials

Hard coating materials, Antifouling coating
materials, Reflective rate adjustment
coating materials

Touch panel
Adhesive agent
Polarizing plate
LCD cellLight guiding plate

Vertical Integration

Materials Used

ITO film, Conductive ink Pattern
forming materials

Growth Driver

Sales Growthof Strategic
Businesses

×1.5

LIC and Life
Sciences

×2.5

Retardation film
Alignment film, Insulator, Protective coating,Spacer, Color pigmented resist, Black resist

PrecisionMaterials andProcessing(base cargo)

Cross-linked particles ink

Backlight

LED materials

CMOS sensor

Resin for lens, LCD applied materials,
Black resist

FY2011FY2012FY2013

FY2014

localizing operations as much as possible in South Korea and Taiwan and maximizing
cost efficiency. For high-performance materials for mobile devices, we will also target
substantial growth. Here, we will implement a “vertical integration strategy” encompassing not only in-cell products but also state-of-the-art technologies for out-of-cellmaterials, while expanding and upgrading our product lineup.

In Strategic Businesses, we are fostering and investing in fields with the aim ofachieving major growth and creating additional mainstay businesses for the future.
Among these, we are concentrating on life sciences and environment and energy,
focusing particular attention on biomedical materials and lithium-ion capacitors (LICs),
which we have identified as growth drivers.

Outlook – Expanding Global Strategies
In fiscal 2014, ending March 31, 2014, the JSR Group anticipates moderate growth ineach of its major target markets, including automobiles, tires, semiconductor devices,and FPDs, and will target expansion in excess of market growth in each of our businesses. For the year, which is the final year of our mid-term business plan, “JSR20i3,”
we aim to expand our topline performance and forecast an 11.7% increase in consolidated net sales, to ¥415.0 billion, a record-high figure. We also project a 22.1% jumpin operating income, to ¥43.0 billion. These forecasts assume an exchange rate of¥95.0 per U.S. dollar and a naphtha price of ¥63,000 per kiloliter.
Domestic sales currently account for 53% of the JSR Group’s net sales, with overseas sales representing the remaining 47%. Leveraging JSR’s world-leading technologies and competitive products, we will accelerate development of our businesses
globally and build an overwhelming global business portfolio.

Profit Appropriation
The Company regards business growth over the long term as its top priority. To generate sustainable long-term growth, we strive to increase competitiveness by developing new businesses through the reinforcement of research and development activities.

06

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

FINANCIAL
31-62

CORPORATE DATA
63-64

With respect to profit appropriation, our basic policy is to return profits to shareholders in a prudent manner, including through purchases of treasury stock, in line withour consolidated performance, while paying continuous, stable cash dividends. Ourdecisions on dividend amounts are based on consideration of a balance between appropriating profits and retaining earnings necessary for future business advancement.
We allocate retained earnings to R&D activities linked to future growth businesses, aswell as to strategic investments. The Company works hard to return profits to shareholders by enhancing corporate value and through the dividends and purchase oftreasury stock.

Enhancing Corporate ValueJSR constantly focuses on the soundness and transparency of its corporate constitution so that it adheres to its corporate mission and continues to achieve sustainablegrowth and enrich people’s lives through the provision of superior materials andproducts in various fields.
We are constantly improving our system of corporate governance. The Board of
Directors, the Company’s highest body with decision-making authority, is operated byinternal directors and outside ones. We also have a corporate auditor system, including outside auditors.
Seeking to enhance both corporate and shareholder value, JSR will work tostrengthen the value of its Elastomers Business and Fine Chemicals and Other Products Businesses, while reinforcing its R&D and marketing capabilities in its Strategic
Businesses, including by forming effective business alliances.
The JSR Group’s Essential Elements consists of its Corporate Mission (“significanceof existence”), Management Policies (evaluation standards), and Course of Action(individual work styles). We will work to ensure that all members of the JSR Group
recognize the Essential Elements and embrace their objectives and values, and behave
accordingly.
We are committed to passing our benevolent corporate culture, built up since ourfoundation, to the next generation. At the same time, we will strive to ensure thatmanagement can respond swiftly to changes in the times, environment, and value
perceptions with a sense of urgency. As an innovation-driven company that createsvalue through materials, we will endeavor to earn the confidence of society andstakeholders.
Going forward, the JSR Group will target enhanced corporate value and seek to gain
the understanding of its management policies. In these ways, we will work to meetthe expectations of shareholders and all other stakeholders.

MITSUNOBU KOSHIBA
Representative Director and President
JSR Corporation Annual Report 201307

Feature Story

Materials Drives Life Sciences
Business Expansion
Amid advances in novel biologics, the JSR Group contributes to progress
and growth in life science through its materials-related technologies.

JSR Life Sciences’ products

In recent years, the medical field has seen a shift from “treatment” to “prevention” and “prognosis” as well as a trend away from standard treatment
methods to personalized therapies. In pharmaceuticals development, aswell, there has been a shift from conventional low-molecular compounds
to biologics (biopharmaceuticals), such as antibody drugs.
The JSR Group has responded to these trends by developing optimum
materials, such as research reagents used in drug development and process chemicals for enhancing the efficiency of manufacturing processes.
Today, JSR Life Sciences Corporation, established in April 2012, heads a
global network with facilities in Japan, Europe, the United States, China,
and South Korea. Under this structure, the JSR Group’s operations aim tocontribute to advances in pharmaceuticals. In addition to our existing synthetic rubber and medical polymer businesses, which supply the medical
devices field, we now develop and manufacture materials used in diagnostic and biologics production.

IVD and Life Science Research

Research laboratory at Medical& Biological Laboratories

08

Since 1980, JSR has used bead manufacturing technologies to develop its own
diagnostic reagent materials business. We now supply the diagnostic drug
industry with various kinds of polymer beads as raw materials, such as latex
beads, magnetic beads, and antifouling materials, and we have the top market share in Japan. In 2011, we established a joint-venture company in China

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

FINANCIAL
31-62

CORPORATE DATA
63-64

to spearhead business advancement initiatives targeting China and emerging
nations.
In March 2013, JSR acquired a stake in Medical & Biological Laboratories
Co., Ltd. (MBL), in line with its business expansion strategy. MBL’s activities
focus on the development of reagents used in research in the fields of immunology, molecular biology, and cellular biology, as well as drugs used in clinical testing. In addition to these activities, MBL has boosted its involvement
in oncology and infectious disease treatment through its work on genetic
testing, antibody drugs, and cell therapy. Going forward, we plan to combine
our bead-related expertise with MBL’s technological prowess to develop newmaterials and reagents for the translational research market. Through this collaboration, we intend to accelerate business expansion in the United States,
Europe, and China.

Bioprocess Materials

Beads used in bioprocessmaterial products

JSR Life Sciences Corporation

Until recently, the development of drugs in the pharmaceuticals industry centered on low-molecular-weight compounds using organic synthesis. Recently,
however, medicines, namely biologics made of antibodies or therapeutic proteins, have come to assume relatively large importance. Biologics are madeby genetically engineered bacteria, animals, and plant cells. JSR supplies thepharmaceuticals industry products that contribute to the production of highpurity drugs, as well as improvement of production process efficiency.
In addition to developing proprietary materials, we will establish a firm
presence in this field and capture a solid market share by introducing newtechnologies via M&A activities. In 2012, JSR entered into a strategic partnership with Austria-based company BIA Separations. Specializing in separation
biochromatography and biomolecule purification processes, BIA Separations
develops and manufactures monolithic chromatographic columns used torefine viruses and vaccines. In 2013, we signed a strategic partnership agreement with Swiss company ChromaCon® AG, which has developed continuous
chromatographic process technology that enhances purification efficiency. The
integration of these process technologies and JSR’s expertise in biomedical
materials is expected to deliver benefits to several sectors within the medical
industry.
For the JSR Group, the biomedical materials business presents exciting
challenges. We believe that our accumulated applied technologies in polymer
chemistry and clean manufacturing technologies can deliver huge benefits as
a new approach to product development within the pharmaceuticals industry.

JSR Corporation Annual Report 201309

At a Glance

Petrochemical Products Business
Elastomers

Sales of Elastomers

The Elastomers Business consists of synthetic rubbers
used in tires and various other automobile
components, as well as thermoplastic elastomers usedin shoe soles, and latex used for the surface-processingof paper.

(¥ billions)

195.8

200
150
100
50
0

Plastics

FY 2009 10

The Plastics Business centers on ABS resins, whichhave a wide range of applications, including in
automobile components, home electronic appliances,and computers.

11

12

13

Sales of Plastics(¥ billions)
80
60

51.8

40
20
0
FY 2009 10

Fine Chemicals and Other Products Business

11

12

13

Semiconductor Materials
The Semiconductor Materials Business encompasses a
broad array of products used by semiconductor
manufacturers around the world. These include
photoresists used in semiconductor device fabrication,
device integration materials, multilayered materials,
and CMP materials.

Strategic Businesses

10

JSR Corporation Annual Report 2013

150

123.9

100

0

The FPD Materials Business consists of many materials
that make up color LCD displays, which are used insuch items as LCD televisions, smartphones, andtablet devices.

Biomedical Materials(Life Sciences)(¥ billions)200

50

Flat Panel Display (FPD) Materials

Precision Materials
and Processing

Sales of Fine Chemicals
and Other Products

Environment andEnergyFY 2009 10

11

12

13

BUSINESS
02-17

Elastomers Business

GOVERNANCE
18-30

CORPORATE DATA
63-64

Elastomers

General-Purpose Synthetic Rubbers
Solution Styrene-Butadinede Rubber(S-SBR), SBR, Polybutadiene Rubber (BR)Special-Purpose Synthetic Rubbers
Nitride Rubber (NBR)
Butyl Rubber (IIR)
Ethylene-Propylene Rubber (EPM/EPDM)
Thermoplastic Elastomers (TPEs)
Syndiotactic 1, 2-Polybutadiene “JSR RBTM”
Hydrogenated Polymer “JSR DYNARONTM”
Styrene-Butadiene Thermoplastic Elastomers “JSR TRTM”
Styrene-Isoprene Thermoplastic Elastomers “JSR SISTM,” etc.
Emulsion Products
Paper Coating Latex
SB Latex
Acrylic Emulsions, etc.

Plastics

Acrylonitrile-Butadiene-Styrene (ABS) Plastics
Acrylonitrile-Ethylene-Propylene-Styrene (AES) Plastics
Bioplastics

Semiconductor Materials

Lithography Materials (Photoresists, multilayer materials, etc.)
CMP (Chemical Mechanical Planarization) Materials(CMP slurries and pads)
Interconnect Materials (spin-on low-k materials)
Packaging Materials(Thick-film photoresists, photosensitive insulation materials, etc.)

FPD Materials

LCD Materials (Alignment films, protective coatings, color pigment
dispersed resists, photosensitive spacers, etc.)
Anti-Reflective Coatings, New FPD Materials (OLED, etc.)

52.7%¥195.8 billion(+8.2%)
Plastics Business

13.9%

FINANCIAL
31-62¥51.8 billion(+1.0%)
Fine Chemicals andOther Products Business

33.4%¥123.9 billion(+5.1%)

Strategic Businesses and Others
Precision Materials and Processing BusinessHeat-Resistant Transparent Resin “ARTONTM”,
ARTONTM Optical Films
Transparent Conductive Films “ELARTTM”, etc.
Environment and Energy Business
Lithium-ion Capacitors Cells and Modules
Biomedical Materials (Life Sciences)
Size Standard Particles
Particles for Clinical Diagnostics
Research Agents
Magnetic Particles, etc.
Performance Chemicals
High-Functional Dispersant “DYNAFLOWTM”
Organic/Inorganic Hybrid Coating Materials “GLASCATM”
Battery Materials
Thermal Management Materials
Optical Materials
UV Curing Optical Fiber Coatings, etc.

JSR Corporation Annual Report 201311

JSR’s Advancing Operations

Growth Scenario toward 2020

In order to achieve its goals for 2020, the JSR Group has formed a
growth scenario for its business advancement. Under this scenario,
we are focusing on five businesses in which we have distinguished,differentiated technologies.
These encompass three businesses earmarked for sustained
future growth—elastomers (Petrochemical Products segment)
and semiconductor materials and FPD materials (Fine Chemicals
segment)—as well as two strategic businesses in which we will
pursue renewed growth opportunities: biomedical materials andlithium-ion capacitors. By focusing on these five businesses, we will
strive to achieve more consistent business advancement than in thepast.

Five Key Business toward Year 2020

Sustainable
GrowthSeeking
GrowthOpportunities

12

Elastomers Business• Expansion of the top line ­—• S-SBR global development• Lower the break-even point

Semiconductor
Materials Business• Expansion of the top line ­—• Promoting the expansion of
top-line 20nm-generation products

FPD Materials
Business• Broaden product portfolio devices• Promote transformation to local sites

Biomedical Materials
Business
LIC Business

JSR Corporation Annual Report 2013

• Sales growth will accelerate fromfiscal 2014 centering on the LIC andbiomedical materials businesses

BUSINESS
02-17

GOVERNANCE
18-30

FINANCIAL
31-62

CORPORATE DATA
63-64

Petrochemical Products BusinessPetrochemical Products: Elastomers
The Elastomers segment has been a mainstay
business since the foundation of JSR. Internally,
the segment is segregated into three categories:
A, B, and C.
Category A
Category A, which includes solution polymerization styrene-butadiene rubber (S-SBR) and butyl
rubber, consists of products that are technologically competitive in the global as well as domestic
markets. As a segment that contributes greatly
to the Group’s revenue and earnings, it is a corebusiness in which we continue to actively invest
with the aim of achieving further growth.
At present, global demand for S-SBR is risingat the annual rate of around 12%. Nevertheless, the JSR Group achieved a 35% year-on-yearincrease in S-SBR sales in the year under review.
Demand for fuel-efficient tires is expected to
grow in line with the strengthening of fuel economy regulations and the widespread adoptionof tire fuel-efficiency labeling systems in Europe

and elsewhere. JSR aims to become the leadingworld supplier of S-SBR—a material that continues to enjoy escalating demand.
Looking ahead, our production operation in
Thailand, JSR BST Elastomer Co., Ltd., is scheduled to commence production in the autumn of2013. Owing to advanced marketing activities toattract customers, we expect a high utilization
rate when the plant begins operation. Going forward, we are considering a second stage of investment in S-SBR production in Thailand. Dependingon the supply situation, we will also examine thepossibility of a production base thereafter.
Other manufacturers will be in a position to
produce S-SBR from 2014 onwards. Under thesecircumstances, JSR plans to further lock in demand by producing and supplying mid-range tohigh-end S-SBR ahead of its rivals. We are able todo this thanks to our technological and production capabilities in high-quality third-generationand fourth-generation S-SBR, a niche that newparticipants would find difficult to penetrate.
The future performance of the raw material butadiene must also be viewed within the
JSR Corporation Annual Report 201313

context of trends in the global petrochemicalindustry. The recent shale gas revolution is altering the structure of the petrochemical industry,
and is expected to tighten supplies of butadiene.
Against this backdrop, the JSR Group will continue strengthening its position by striving to securestable supplies of this competitive product.
Category B
This category consists of products that are uniqueto JSR. Developed through the application of proprietary technologies, our offerings include materials used in the environment and energy-saving
fields, such as heat storage, latent heat, and heatshield materials. Products in this category areearmarked to become diversified and strategic
businesses. Going forward, JSR will focus on expanding this category through the developmentof unique products.
Category C
This category consists of general-purpose synthetic rubber, which encompasses commoditized
products that face intense competition in the
global environment.
JSR has made significant gains in its generalpurpose synthetic rubber business, which is asource of stable earnings, by undertaking rigorous cost structural reforms and improving its
pricing formulas. As a result, we have been able
to enhance profitability and reduce the breakeven point from 80% to 70%. Increased utilization rates have also been a significant factor in
the improved performance in this category. Going forward, we will aim to improve efficiency tolower the break-even point.

14

JSR Corporation Annual Report 2013

How do tires enhance fuel efficiency?
1. Tire distortion is the enemy of fuel efficiency
Energy loss arising from distortion of running ties resultsfrom rolling resistance.
2. Reducing energy loss from tire distortion
The key point is to lower the amount of heat generated
from friction among rubber molecules and among
reinforcing agents, as well as between rubber molecules
and reinforcing agents.
3. Secret to synthetic rubber molecules
Simplifying the process of bonding reinforcing agents tosynthetic rubber molecule extremities prevents agglutination
among reinforcing agents, and the resulting dispersion
reduces friction-induced heat generation.
4. JSR’s technological strength
JSR’s S-SBR excels due to a technology that strengthens thebonding between rubber molecules and reinforcing agents.
The result is highly energy-efficient tires that are being
widely adopted in the market.

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

Fine Chemicals and Other Products Business

Semiconductor Materials
Ongoing shrinking technologies in the semiconductor market points to firm market growth for
JSR’s photoresists. Based the market data, weforecast an annual growth rate in this market ofaround 5.8% through to the year ending March2017.
In the past, information technology has connected us to the Internet and networks using mainlycomputers, smartphones, and tablet PCs. But
future technical advances are expected to create
an Internet of Things (IOT), in which televisions,cameras, audio devices, and other objects become
interconnected. Here at JSR, we believe that the
IOT will serve as a driver for future growth in thesemiconductor market.
Although JSR held a 40% market share for 90–
70nm ArF photoresists, it then failed to keep pacewhen the next generation appeared. However, asa result of development targeting an even newer
generation, we are in a favorable business position, with a market share of more than 40% for

the 20nm generation of photoresists. Going forward, we will continue developing platforms withthe aim of boosting market share in the 15nm
and sub-15nm photoresist markets.
JSR is steadily increasing sales of lithographymaterials, including ArF photoresists, KrF (krypton
fluoride) photoresists, and TCX topcoat materials for immersion exposure, as well as spin-on
glass (SOG), an intermediate material. To this end,
we are pursuing increased quality control andenhanced manufacturing technologies. In orderto manufacture and supply photoresists for the
20nm and sub-20nm generations, we put our effort into total defect control from the raw material stage through to the finished product stage.
Therefore, we are selectively investing in R&D andmanufacturing facilities at our Yokkaichi Plant.
Through these and other measures, for the period through March 2017 JSR is targeting annual
sales growth of around 10%, which is double themarket growth rate.

JSR Corporation Annual Report 201315

Flat Panel Display (FPD) Materials
Amid increasing market polarization in the FPD
materials sector, stemming from the proliferation of large televisions and high-performance
mobile devices, JSR is well placed to meet market
demand thanks to its strong technologies, product line-up, and its organization in both productsegments.
Today, there is increasing proliferation and commoditization of large panel displays, mainly for
televisions, with demand centered on manufacturers in South Korea and Taiwan. Consequently, weare shifting our operations, from product development to manufacturing, to those regions and aggressively pursuing cost efficiencies. Under these
conditions, we are targeting annual sales growthof 6%, or double the market growth rate.
Smartphones, tablet PCs, and similar devices
that use small and medium-sized panels are becoming increasingly sophisticated. At the sametime, the materials used for these panels, such as
LCD materials, thin retardation ARTON film, andindium tin oxide (ITO) film for touch panels, need
to be high-performance, resulting in high value.
Our forecast is also for 25% annual growth insales of materials used in these panels. In order for
us to achieve that, we are promoting a “vertical
integration strategy” in order to expand our product portfolio in line with the need for enhanced
performance and higher added value. JSR’s diverse
product portfolio covers the different kinds of materials required by high-performance panels.

Strategic Businesses and Other BusinessIn fiscal 2013, ended March 31, 2013, sales from
Strategic Businesses reached around 2.5 times
the amount recorded in fiscal 2011. This growthis expected to continue, with a fiscal 2014 forecast of 1.5 times that for fiscal 2013.
We intend to accelerate the growth of our strategic businesses, centering on precision materials
and processing, biomedical materials (life sciences), and lithium-ion capacitors. In order to achieve
growth, we also recognize the importance ofDisplay Materials
Striving to secure the leading position in the FPD materials industry by closely following market demands, which are
divided into those for commodity and those for high quality.
Materials for Small- to Medium-Sized Panels
125%

75%

25%

50%

Growth of sales fromFY 2013 to FY 201425%

FY 2013

FY 2014

1
ExpandingProfitability

2

16

Other

ITO

100%

Protective
coating

ARTON

75%

NIR

50%

OPSTAR

100%

0%

Materials for Large-Sized Panels
125%

LCD
materials

25%

CIS

0%

6%

JSR Corporation Annual Report 2013

Insulator
Color pigmented
resistGrowth of sales fromFY 2013 to FY 2014

FY 2013Competing on the performance ofhigh value added products
Vertical integration throughbroadening of product portfolio

Spacer

FY 2014

Alignment film

1

Thoroughly localizing operations in Asia

2

Maximizing cost efficiency

Maintaining
Profitability

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adopting an expansion strategy that considers
M&A activities and capital alliances as ways tointroduce outside technologies. In line with thisstrategy, in March 2013 JSR established a capitalalliance with Medical & Biological Laboratories.
Biomedical Materials (Life Sciences)
Under our growth strategy for the period throughyear 2020, we will expand the life sciences segment through the development and supply ofmaterials that contribute to the translational research market. Development methods in the drug
discovery field have recently seen a shift fromlow-molecular-weight pharmaceuticals to mainly
polymer drugs. JSR has seized the opportunity
provided by this shift to establish a business that
supplies high-performance biomedical materials.
Lithium-Ion Capacitors
Group subsidiary JM Energy Corporation develops and supplies laminated cells, flat prismatic

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can-type cells, and modules for use in different
kinds of cells. In the year ended March 2013, thatcompany took steps to reaffirm the safety of its
products. This was because, although LICs are
structurally safer than lithium-ion batteries, fundamentally they are unsafe products. For this reason, we concentrated on establishing foolproof
manufacturing technology. Our success in lowering the internal resistance in the course of thisprocess resulted in high-performance products
comparable to electric double-layer capacitors.
As a result, in the year under review we developed a capacitor that boasts not only considerably lower internal resistance compared withcapacitors made by other manufacturers, but also
a significant increase in durability, enabling acycle performance in excess of one million times.
Going forward, we will take full advantage of theinterest in our products shown by a wide variety
of sectors, including the automobile industry, toexpand the range of LIC applications.
High Voltage andFloor-standing TypeULTIMO ®

Low Voltage andFloor-standing Type

Voltage Sag
Compensator

Large Scale Wind Power
Generator (Generation)

Railway, Tram

Small ScaleWind Power
Generator(Generation)
Generation)

High Voltage andMovable Type

MedicalAppliance*1
Automated Guided Vehicle*2

Low Voltage andMovable Type
Small Scale
Construction Machinery

EV Strong-HV

Large Scale
Construction
MachineryBus, Truck

Mild-HV ISS
Automobile*1 Courtesy of Konica Minolta Inc.
*2 Courtesy of Okamura Corp.

JSR Corporation Annual Report 201317

Corporate Governance System

Enhancing Trust and Achieving Sustained GrowthMaterials Innovation—We create value through materials to enrichpeople’s lives and contribute to society and the environment
By putting this corporate mission into action, we at JSR endeavor to further enhance corporate value while
maintaining management efficiency, transparency, and soundness to ensure a sustainable future. JSR is constantly improving its system of corporate governance with the aim of obtaining the trust of shareholders and allother stakeholders and building an appealing corporate constitution.
As of June 21, 2013, the Board of Directors has seven members—three outside directors and four internal
directors. (In the year under review, there were three outside directors and five internal directors.) In addition,
the Board of Corporate Auditors has three members, including two outside corporate auditors (decreased one
member from the year under review). In this way, we are able to raise the transparency and soundness of operations. At the same time, we undertake ongoing reassessments aimed at further strengthening managementmonitoring and supervision.
In October 2012, JSR constituted the Compensation Advisory Committee, which includes outside directors, with the aims of establishing the monitoring system for more objective and transparent compensation for
Directors and Officers, and of discussing issues related to the compensation. The new committee deliberates
on such items as basic compensation policy and structure and the annual bonus payment system, and submits
a report to the Board of Directors. Compensation for corporate auditors is decided under deliberation at theBoard of Corporate Auditors.
As of June 21, 2013

Shareholders’ Meeting
Appointment/
Dismissal

Appointment/
Dismissal

ReportBoard ofCorporate
Auditors

Appointment/
Dismissal

ReportFinancial
AuditsAuditsBoard of Directors

Independent
Auditors

ReportAppointment/
Dismissal
ReportCompensation
Advisory Committee

Oversight/
Supervision

Cooperation
Appointment/
Dismissal
ReportRepresentative
Directorand President

Cooperation

ReportOversight/
Supervision

Executive
Committee

Corporate Ethics
Committee

Business Issues
Committee

Responsible Care
Committee

Officers
Committee

CSR Committee

Risk Management
Committee
Social Contribution
Committee

Internal Audit
Department

18

Internal Audits

JSR Corporation Annual Report 2013

Officers
Business Operations

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n Officer System
JSR has introduced an officer system to separate Company-

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General Meetings of Shareholders.
To ensure fairness and transparency, the Company ap-

wide management monitoring by directors and businesspoints independent attorney and certified public account-

execution by officers. The system accelerates decision-

ant as outside corporate auditors.

making and business execution by directors and officers,
respectively, and also strengthens the supervisory functionn Internal Control Systemof directors and clarifies roles and responsibilities.

In accordance with The Companies Act of Japan, the JSRGroup has established a basic policy governing its internaln Audit System

control system. Guided by this policy, the Company works

Under the Company’s audit system, business execution

to strengthen and augment its internal controls. The Inter-audits and account audits make significant contributions to

nal Audit Department systematically audits business execu-

fair, transparent, and timely management. Business auditstion and compliance systems in each division and Group

cover the execution of duties by directors, and accountcompany, and confirms that rigorous legal compliance isaudits cover financial statements submitted at Ordinary

observed throughout the Group.

Board of Directors
The Board of directors discusses and makes decisions on

exchanges of opinions at Board meetings. By introducing

important business matters, and also supervises direc-

independent and neutral outside directors with extensive

tors and officers’ execution of business duties. The Board

business experience, we seek to reinforce the appropriate-

holds meetings once monthly, in principle. It also includes

ness of judgments made by management and monitor thethree outside directors who, together with three corporate

legality of their execution of duties.

auditors (including two outside ones) engage in robust

Executive Committee
The Executive Committee holds extensive discussions on

This committee is made up of the president, officers

items concerning fundamental management initiatives,with directorship status, and officers appointed by the pres-management policies, and management plans, along withident, and responds to important business execution with

important matters concerning the execution of businessthe aim to expedite decision making and improve the ef-

activities at each department. The committee thus gives

ficiency of such operations. As a rule, this committee meets

direction concerning these issues. As required, certain items

once a week, and is chaired by the president. The standing

submitted to this committee are passed on to the Board ofcorporate auditor also attends these committee meetings.

Directors for further discussion.

Business Issues Committee
The Business Issues Committee engages in broad-ranging

are reflected in deliberations of the Board of Directors anddebate about items related to fundamental management

the Executive Committee. The Business Issues Committee,

strategies and policies, basic policies behind specific pro-which meets once a week, consists of the president, offic-

jects, and changes to business strategies. It also sharesers with directorship status, and officers appointed by the

information to ensure a common understanding of suchpresident.

matters and discusses company directions. Its findings
JSR Corporation Annual Report 201319

Officers Committee
This committee is held in order to share information fromnications. This committee consists of the president, senior

all departments concerning the execution of businessofficers, officers and a standing corporate auditor, except

activities, to ensure members’ thorough understanding ofoverseas representatives. As a rule, this committee meets

important business matters and to enhance their commu-

twice a month and is chaired by the president.

Board of Corporate Auditors
This board meets every month as stipulated in the regula-

Executive Committee and other important committees totions governing this body. The corporate auditors receive

monitor how important decisions are reached and business

reports on important matters, hold discussions, and makeactivities are executed. The auditors also receive reports

decisions.

from the independent auditors, directors, and others.

In accordance with standards for audits by corporate
auditors, the auditors attend meetings of the Board ofThrough these activities, the Board of Corporate Auditors
holds deliberations in order to form auditing opinions.

Directors, and the standing corporate auditor attends

CSR Committee
The CSR Committee was established to ensure that JSR

The JSR Group Principles of Corporate Ethics have been

fulfills its responsibilities to society and complies with laws

prepared to provide a code of conduct for executives andand regulations. Under the CSR Committee, four commit-

employees. It is also prepared in Traditional Chinese, Thai,

tees were established: the Corporate Ethics Committee, theand Korean, in addition to English and Simplified Chinese,

Responsible Care Committee, the Risk Management Com-so that Group employees all over the world can become

mittee, and the Social Contribution Committee. The CSR

better acquainted with the Principles. As for the reporting

Committee integrates and guides the activities of the above

system, along with the internal hotline linked to the Corpo-

four committees and meets four times each year alongrate Ethics Committee and the external hotline linked to anwith special meetings as necessary to further strengthen

external attorney, JSR introduced a hotline that is linked to

the Company’s CSR efforts.

a specialized external agency and is also available in Eng-

The CSR Committee is chaired by the officer respon-

lish, Chinese, Korean and Thai.

sible for CSR and consists of officers, senior officers, andofficers. Bureaus of the four committees listed above also

Responsible Care Committee

attend meetings of the CSR Committee. The Committee

JSR conducts a Responsible Care program to fulfill its

clarifies the Company’s stance toward CSR and works to

obligations to achieve sustainable development. The Re-

strengthen CSR efforts at JSR.

sponsible Care Committee was established under the CSR
Committee to ensure that Responsible Care activities are

Corporate Ethics Committee

conducted effectively across the entire company. The com-

The Corporate Ethics Committee, chaired by the officer,

mittee is chaired by the managing officer for safety andin charge of general affairs, was established under theenvironmental affairs, demonstrating Responsible CareCSR Committee to implement corporate ethics standards

position as a core component of JSR’s management.

and prevent improper actions throughout the JSR Group.

20

JSR Corporation Annual Report 2013This committee approves Responsible Care plans, evalu-

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ates and verifies results of activities, and helps to maintaincrises that do occur on its business activities. To this end,

and upgrade JSR’s programs to eliminate accidents, reduce

the Company established the Risk Management Commit-

environmental impact, manage chemical substances, andtee under the CSR Committee, with the officer responsible

ensure safety of products. Details and results of Responsible

for Corporate Planning as chair. The Committee decides

Care activities are disclosed through the CSR Report andpolicies and plans in response to crises, both present andResponsible Care Reports prepared by individual plants.

potential, and promotes continuous improvement.

The CSR Report is audited by a third party to improve thereliability and transparency of the data. Through theseSocial Contribution Committee

activities, the committee is dedicated to winning greater

The Social Contribution Committee was established undertrust from customers and addressing any concerns among

the CSR Committee and is chaired by the officer responsi-

residents in the neighborhoods of JSR’s facilities.

ble for Corporate Communications. JSR has been involved

To make the information widely available, the CSR Re-

in many activities that contribute to society at the local

port is posted on the JSR website (http://www.jsr.co.jp/jsr_

level. JSR will expand its activities to cover the whole society

e/csr/index.shtml).

and provide more active approaches. The Social Contribution Committee studies the formulation of new programs

Risk Management Committee

and pursues initiatives according to its “Basic Approach to

JSR places strong management priority on preventing seri-

Social Contribution,” published in January 2009.

ous crises from occurring and on minimizing the impact of

Status of Internal Audit, Audits by Corporate Auditors and Financial Audits
JSR has adopted the corporate auditor system. There are

more, the corporate auditors and financial accountants ex-

three corporate auditors, including two from outside thechange information and opinions as necessary in the course

JSR Group. These auditors are staffed by one individual.

of each fiscal year. The internal audit has been conductedAudits are performed as described in the section concern-by the Internal Audit Department as a specialized internal

ing the Board of Corporate Auditors.

auditing unit. The corporate auditors receive reports on the

The corporate auditors work closely with the independ-

audit plan and audit results from the Internal Audit Depart-ent auditors. The corporate auditors receive reports on thement regularly, exchange opinions, and enhance the audit-

financial accountant’s audit plan and audit results. Further-ing system.

Remuneration
The remuneration of the Company’s directors consists of aby resolution at the Ordinary General Meeting of Share-

basic salary, a bonus based on consolidated performance

holders. Total remuneration paid in fiscal 2013 was ¥311

for the year, and stock options that serve as a long-term

million, paid to seven directors, included three outside

incentive. The level of remuneration is commensurate withdirectors and director who retired during fiscal 2013.

the Company’s business results and is compared with those

Corporate auditors are paid a basic fixed salary that isof other companies in the same industry and of similar size.

not performance-based. In fiscal 2013, total salaries paid to

The total limit for monthly salaries is decided by resolution

corporate auditors amounted to ¥45 million, including ¥29

at the Ordinary General Meeting of Shareholders. Perfor-

million paid to internal corporate auditors and ¥16 million

mance-based bonuses and stock options are also approved

to outside corporate auditors.

JSR Corporation Annual Report 201321

Outside Directors
The Company has appointed three outside directors in order

will ensure more appropriate management decision-making

to further reinforce the monitoring function of the Boardand reinforce our ability to monitor the legality of businessof Directors. By welcoming outside directors with extensive

execution.

experience and highly impartial, neutral perspectives, weTakuya Goto
Takuya Goto served as Representative Director and President, and Chairman, Board of
Directors of Kao Corporation. Mr. Goto has
extensive experience in the management ofKao, a prominent international consumer
products and chemical company. He hashelped strengthen corporate governance bydeploying this experience to ensure reasonable judgments by management fromexternal, independent and neutral perspectives, as well as management transparency
and soundness. For this reason, Mr. Goto has
been named an outside director, as he was in
the previous year.

Major activities in the year underreview
Mr. Goto participated in all 17 meetings ofthe Board of Directors held during the year
under review, at which he contributed amply
to fair and reasonable management decisions
and transparent and sound management byaddressing the Board as appropriate concerning matters under discussion. Mr. Gotobrought to the Board an independent outside
perspective based on his extensive experiencein the management of a company that operates an international business in consumer
products and industrial-use chemicals.

Michio Kariya

Kazunori Yagi

Michio Kariya currently serves as Representa-

Kazunori Yagi is Director and Executive

tive Director and Chairman of the Board ofManaging Officer of Yokogawa Electric Cor-

Nikon Corporation. Mr. Kariya has extensive

poration, and also serves as advisor to thatexperience in the management of Nikon, acompany. Mr. Yagi has extensive experience

globally renowned optical equipment com-in the management of Yokogawa Electric,pany. He has helped strengthen corporate

a globally renowned producer of control

governance by deploying this experience tosystems and measurement instruments. JSR

ensure reasonable judgments by manage-

anticipates that Mr. Yagi will help strengthen

ment from external, independent and neutral

corporate governance by deploying this expe-

perspectives, as well as management trans-rience to ensure reasonable judgments byparency and soundness. For this reason, Mr.

management from external, independent andKariya has been named an outside director,

neutral perspectives, as well as management

as he was in the previous year.

transparency and soundness. For this reason,
Mr. Yagi has been named an outside director.

Major activities in the year underreview
Mr. Kariya participated in 16 of the 17 meet-

Major activities in the year underreviewings of the Board of Directors held during the

Mr. Yagi attended 12 of the 13 meetings ofyear under review, at which he contributed

the Board of Directors held after his appoint-

amply to fair and reasonable management

ment in the year under review, at which hedecisions and transparent and sound man-contributed amply to fair and reasonableagement by addressing the Board as appro-

management decisions and transparent andpriate concerning matters under discussion.

sound management by addressing the Board

Mr. Kariya brought to the Board an inde-

as appropriate concerning matters underpendent outside perspective based on his

discussion. Mr. Yagi brought to the Board an

extensive experience in the management of a

independent outside perspective based oncompany that operates an international busi-

his extensive experience in the management

ness in optical machinery and equipment.

of a company that operates an international
business in control systems and measurement
instruments.

22

JSR Corporation Annual Report 2013

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Outside Corporate Auditors
To ensure the fairness and transparency of management,

ests in the Company. They are called upon to ensure thethe Company appoints one standing corporate auditor, assound governance of the Company while drawing on theirwell as two outside corporate auditors. The outside corpo-

respective careers.

rate auditors have no personal, financial, or business inter-

Kenji Ito

Hiroichi Uekusa

Kenji Ito does not concurrently hold theHiroichi Uekusa does not concurrently holdposition of director in another company.

the position of director in another company.

Mr. Ito contributes to ensuring reason-

Mr. Uekusa contributes to ensuring reason-

able judgments by management, as well as

able judgments by management, as well as

management transparency and soundness

management transparency and soundness byby auditing the Company from a position ofauditing the Company from a position of in-independence while drawing on the exten-

dependence while drawing on the extensive

sive expertise and a wealth of experience inknowledge and experience in legal mattersfinance and accounting he possesses as ahe possesses as an attorney.

certified public accountant.

Major activities in the year under
Major activities in the year underreview

review

Mr. Uekusa attended all 17 meetings of the

Mr. Ito attended all 17 meetings of theBoard of Directors and all 16 meetings ofBoard of Directors and all 16 meetings ofthe Board of Corporate Auditors held during

the Board of Corporate Auditors held during

the year under review. He contributed amply

the year under review. He contributed amply

to the auditing of the Company and to fairto the auditing of the Company and to fairand reasonable management decisions andand reasonable management decisions andtransparent and sound management by ad-transparent and sound management by ad-

dressing the Board of Directors and Board ofdressing the Board of Directors and Board of

Corporate Auditors as appropriate concern-

Corporate Auditors as appropriate concern-

ing matters under discussion. Mr. Uekusa

ing matters under discussion. Mr. Ito brought

brought to both boards an independent

to both boards an independent outside

outside perspective based on his extensive

perspective based on his extensive experience

experience as an attorney at law and his

as a certified pubic accountant and his expert

expert knowledge in a broad range of legal

knowledge of financial and accounting mat-matters.

ters.

JSR Corporation Annual Report 2013

23

The JSR Group’s Essential Elements

The JSR Group’s Essential Elements consists of its Corporate Mission (“significance of existence”), Management Policies (evaluation standards), and Course of Action (individual work styles). In this process, it isimportant that we act with integrity as a good corporate citizen and live up to the trust that our stakeholders place in us. Our Group CSR represents the initiatives we employ to successfully achieve our mission, and as such we view CSR as a key management issue.

Corporate Mission

Materials Innovation
We create value through materials to enrich society, people and the environment
The corporate mission of the JSR Group clearly identifies the company’s raison d’etre. By supplying materials that are
indispensable to human societies, JSR aims to be trusted.

Management Policies
The JSR Group has established management policies as aframework for decision-making and activities, and to set
standards to serve as the basis for the decisions of each
JSR team member. As group-wide management policies forsustainable growth, it consists of two basic components—
fundamental pillars of management, and responsibility to
our stakeholders—both of which represent JSR’s commitment as a good corporate citizen.

Fundamental Pillars of Management

Continuous creation of businesses
As society evolves, so does the demand for specialized materials and advanced products. JSR continuously
evolves to anticipate and respond to changing marketing needs and, in doing so, achieve dynamic growth.

Enhancement of corporate culture
As society evolves, so will our organization. JSR will build on its existing positive corporate culture to create an organization and management style with the vitality to keep evolving.

Increase in corporate value
JSR will position itself to increase our overall corporate value by creating businesses through materials withfocuses on customer satisfaction and the fulfillment of employees.

Responsibility to Our Stakeholders
Responsibility to our customers / business partners
When interacting with our business partners and customers, the JSR Group will:n Constantly evolve to meet the demand for new materialsn Always strive to increase customer satisfaction
n Act in good faith and maintain fair and equitable business relationsn Continue to be socially and environmentally conscious throughout the supply chain

24

JSR Corporation Annual Report 2013

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Responsibility to our employees
All employees should expect:n To be evaluated and rewarded based on fair standardsn Continuous opportunities to grow by challenging themselvesn Acceptance of the diversity of fellow colleagues and to be provided a place where all employees canwork together as a teamResponsibility to society
All members of the JSR Group will honor our responsibility to both the local and global communities through:n Responsible and respectful business practices (Responsible Care) that consider the environment and safety
n Support of environmental conservation by providing eco-friendly productsn Reduction of our environmental impact throughout the entire product lifecyclen Active contribution to conserving biodiversity throughout its business activities and the entire product lifecycle
Responsibility to shareholders
Group will maintain its responsibility to its shareholders by:n Aiming to increase corporate value by creating business opportunities through materials
n Constantly enhancing its management efficiencies
n Inspiring trust by being highly transparent and conducting sound corporate management practices

Course of Action (4Cs)

Collaboration

Challenge

Communication

All employees of JSR Group shouldshare a common, global focus anddesire to succeed. Employees should
feel confident to autonomously takeon new challenges, learning fromsuccesses while viewing setbacks
as opportunities to learn, grow andimprove.

All employees should feel comfortable
and confident maintaining open linesof bi-directional communication at alllevels within the JSR Group. Employees
should strive for organizational transparency through direct conversations
as the best means to share value andachieve common goals, especially inthe face of growth and diversification.

Employees will work together in thespirit of cooperation valuing common, corporate goals over internal or
departmental barriers. Employees will
also be encouraged to actively collaborate with external resources andnot be bound to conventional ideas.

Cultivation
All employees will cultivate an environment that supports bi-directional
communication between managers
and subordinates and provides opportunities to develop together as
individuals and as members of productive, supportive teams.

Corporate Slogan

With chemistry, we can.
JSR is determined to keep providing solutions that benefit not only customers but also
the broader society. The company’s slogan highlights the word “chemistry” to succinctly convey its corporate identity and business positioning, and also expresses theconfidence JSR professionals feel in the face of every challenge.
JSR Corporation Annual Report 201325

Corporate Social Responsibility

The JSR Group’s mission is to create new levels of value in various fields throughmaterials that enrich people’s lives and contribute to society and the environment. These activities underpin the Group’s corporate social responsibility (CSR)
and are a key management priority.
Photography by Dan Agulian

CSR Advancement Structure
JSR promotes CSR through a system of committees and a
CSR Department established to reinforce CSR-related initiatives. There are four committees that function under thesupervision of the CSR Committee: the Corporate Ethics
Committee, which implements corporate ethics standards
and works to prevent improper actions throughout theGroup; the Responsible Care Committee, which works torealize a sustainable society through the implementationof initiatives that safeguard the environment, health, andsafety; the Risk Management Committee, which seeks tofurther strengthen the Group’s risk management system;and the Social Contribution Committee, which devises andpromotes activities to help the Group make a contribution
to society.

Intel Corporation awarded JSR the SCQI Award forthree consecutive years

identified as having a particular problem, we dispatch
procurement staff to work together with that partner onfinding an appropriate solution.

Responsibility to Our Stakeholders
The JSR’s Group’s Essential Elements include values to beshared among all JSR employees to enable them to act
responsibly and with confidence towards all stakeholders.
For JSR, the term “stakeholder” refers to all customers andbusiness partners, employees, society, and shareholders.
Responsibility to Customers and Business Partners
n World-leading semiconductor manufacturer Intel Corporation awarded JSR its most prestigious SupplierContinuous Quality Improvement (SCQI) Award for threeconsecutive years. The award recognizes extraordinarycommitment to quality and exceptional performance
toward Intel’s goals. JSR provides Intel with lithographymaterials, packaging materials, and CMP materials.

n JSR works hard to promote CSR activities in its supply
chains. For example, our procurement policy includes
questionnaires on environmental and social aspects forour business partners to fill out. If a business partner is

26

JSR Corporation Annual Report 2013

Responsibility to Our Employeesn JSR conducts an Employee Awareness Survey once every
three years. In the process, we have identified two interesting characteristics. One is a corporate culture of“discipline” that has been passed down through theyears, which we will continue to preserve into the future.
The other is a corporate culture with an inherent weaksense of “freedom,” which we will need to improve. In
response, we have established guiding principles that
include the keywords “Challenge, Communication, Collaboration, and Cultivation,” also known as the “FourCs.” The aim is to encourage managers and junior staff
to work together for their mutual benefit.
n JSR also focuses on employee diversity so that employees
can develop their true potential and to enable the Groupto continue growing from strength to strength as a corporate member of the global community. We implementa program of activities that promote diversity in order tofoster a dynamic work environment in which employees

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from diverse backgrounds are able to fully demonstrate
their abilities. Going forward, we will maintain andstrengthen our rich work force by making effective useof female employees and fully utilizing our global humanresources.
Responsibility to Societyn Taking advantage of our various business activities, werun programs aimed at stimulating children’s interest inchemistry and sharing the importance, possibilities, andenjoyment that comes from manufacturing, as well as
raising awareness about the importance of materials.
Working in cooperation with boards of education inlocations where we have manufacturing plants, we send
employees to elementary and junior high schools to conduct science classes on a regular basis.
n Since fiscal 2009, JSR has held annual activities at all
business divisions and Group companies for the purposeof identifying a wide range of risks, such as those related
to explosions, fire, large-scale earthquakes, and pandemics. Once a risk has been identified, it is assessed and anaction plan is devised. A serious risk is treated as a major
company-wide risk, and the task of managing and mitigating that risk is given to the Risk Management Committee and CSR Committee. In addition to holding annual crisis management exercises, we conduct reviews inorder to make further improvements to risk management
systems.
Responsibility to Shareholders
n JSR works constantly to maintain and enhance management transparency, efficiency, and soundness and raise

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corporate value so that it is attractive to shareholders.
nWe strive to conduct investor relations (IR) activities tailored to the needs of shareholders and all other investors,
as well as disseminate information regarding management and corporate policies promptly and accurately.
nJSR undertakes a range of measures to maintain close
communication with shareholders and to ensure thesmooth exercising of shareholders’ voting rights. These
include holding early Ordinary General Meetings ofShareholders, sending early invitations to such meetings,
adopting a system for exercising voting rights via theInternet, and offering institutional investors access to anelectronic voting platform.
nWe strive to provide opportunities for communicatingwith shareholders and all other investors. In addition to
conducting quarterly result briefings, we hold seminars
for institutional investors and business analysts thatshareholders may attend, and we also host technology
seminars.
nIn April 2009, the JSR Group became a participant in
the United Nations Global Compact. Amid growing calls
for corporate social responsibility, the Global Compact
enables companies that operate on a worldwide level todeclare their commitment to observing the Compact’s
ten principles. The principles include human rights, labor,
the environment, and anti-corruption. Having declared its
participation in the Global Compact and its commitment
to act responsibly as a member of the international community, the JSR Group will work even harder to actively
fulfill its social responsibilities.

Ratings from Outside Organizations
JSR’s CSR activities are rated highly by overseas anddomestic investment-related organizations.
In fiscal 2013, the JSR Group was selected for inclusion in the following Social Responsibility Indices.
n FTSE4Good Index Seriesn Ethibel Pioneer & Excellence Labeln Morningstar’s MS-SRI Index

Analysts meeting

JSR’s fiscal 2012 Ordinary General
Meeting of Shareholders

JSR Corporation Annual Report 201327

Global R&D, Production, and Marketing Operations

Contribution of Patents
		

FY2009FY2010FY2011FY2012FY2013

Japan						Fine Chemicals and Other Products
1,269
1,465
1,685
1,972
2,331
Petrochemical Products
428
374
377
387
358
Others
73
75
67
79
89
		
1,770
1,914
2,129
2,438
2,778
Overseas						Fine Chemicals and Other Products
512
492
489
507
523
Petrochemical Products
1,955
2,164
2,365
2,516
2,741
Others
34
39
36
33
34
		
2,501
2,695
2,890
3,056
3,298
Total
4,271
4,609
5,019
5,494
6,076

Global R&D Strategy

supporting existing businesses. To achieve this goal, these“Successful research and development activities are the cor-centers and laboratories work closely with related divisions

nerstone of JSR Corporation.” Guided by this belief, JSR has

to set research themes that anticipate the needs of thetackled the challenges of expanding technology domains,market and maintain a flexible research organization that

ranging from core polymer technology to photochemis-

responds quickly to the circumstances of users. JSR also

try, inorganic chemistry, and precision chemistry. Since its

conducts consignment research, joint research and consor-

founding, the JSR Group has contributed to the advance-

tium projects, working with clients, universities, researchment of society through the creation of groundbreaking

institutions, and others, both in Japan and overseas, withmaterials. The Group possesses unique, world-renowned

the goal of identifying the latest technology and knowl-

strengths in R&D, and currently holds around 6,000 pat-edge and incorporating it in the Company’s R&D at the firstents.

opportunity.

JSR’s R&D centers and laboratories are responsible

JSR’s domestic R&D organization consists of several

for supporting the creation of new businesses, as well as

facilities, of which the Yokkaichi Research Center forms the28

JSR Corporation Annual Report 2013

BUSINESS
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GOVERNANCE
18-30

FINANCIAL
31-62

CORPORATE DATA
63-64

core. Others include the Precision Processing Technology

Global Structure of Fine Chemicals and Other

Center, Tsukuba Research Laboratories, and the JSR Func-

Products Businesstional Materials Research Center.

In South Korea and Taiwan, which have the largest world

Overseas, we have established research facilities inmarkets for FPDs, JSR Micro Korea Co., Ltd. and JSR Micro

Taiwan and South Korea, where there is a concentration of

Taiwan Co., Ltd. hold important positions. Both companies

flat panel display (FPD) production bases.

have expanded the scale of production and the items theyWith numerous products that represent the world

handle in order to meet demand from the rapidly expand-

standards in their fields, JSR will strive to solidify its position

ing FPD market. To enhance and accelerate their future

as a global comprehensive materials supplier.

responses to customers, they are building new researchlaboratories.

Global Structure of Petrochemical Products Business

Meanwhile, many LCD panel manufacturers are plan-

For some years, the Petrochemical Products Business, whichning to build new production facilities in China. They

engages mainly in synthetic rubbers and plastic products,

include local companies, as well as major corporations fromhas been building a global manufacturing and sales net-

Japan, South Korea, and Taiwan. To address the needs

work. The Group has sales operations in major centers inof those customers, the JSR Group is working to provide

China and Southeast Asia to closely monitor the needs oftechnical services and build a product development system

local customers in the automobile and electronics indus-

in China.

tries.

In the semiconductor materials business, Silicon Valley

We are also upgrading operations that manufacture

based JSR Micro, Inc. and JSR Micro N.V. in Belgium manu-

synthetic rubber used in automobile parts and fuel-efficient

facture, provide technical support and sells cutting-edgetires, which have enjoyed growing demand in recent years.

ArF photoresists. It has also introduced exposure equip-

In addition to producing synthetic rubber for fuel-efficient

ment comparable with that of client companies in order totires at the Yokkaichi Plant in Japan, we also make this

support R&D on leading-edge products.

product in collaboration with Styron Europe GmbH (for-In the life sciences field, we established JSR Life Sciences

merly Dow Europe). In June 2011, we decided to establish

Corporation in Japan and J&W Beijing Biotech Co., Ltd. in

JSR BST Elastomer Co., Ltd. in collaboration with Bangkok

China. The latter is a joint venture company with a local

Synthetics Co., Ltd., a local business partner in Thailand.

company. In the summer of 2012, the joint venture will

The new company is currently building Thailand’s first S-

start manufacturing and selling products to promote the

SBR manufacturing plant, due to commence operations inlife sciences businesses of JSR Group companies in Europe

autumn 2013. It will start with a capacity of 50,000 tons

and North America, with the aim of building a global busi-

per year, with plans for expansion to 100,000 tons.

ness structure and expediting the Group’s responsiveness to

For other synthetic rubber products, Elastomix (Thailand)market movements.

Co., Ltd. engages in the stable production and supply of
CMB, a raw material used in synthetic rubber parts, for local automakers and parts manufacturers.

JSR Corporation Annual Report 2013

29

1
15

A
6
5
17 12
20 16

8
13
18

9

19 11
3
6

14 10 7

JSR Corporation (Japan)

2

B
4

C

JSR Global Network
HEAD OFFICEJSR Corporation
1-9-2, Higashi-Shinbashi, Minato-ku,
Tokyo 105-8640, Japan

BRANCH OFFICES
Nagoya Branch
A Wallisellen Branch(Switzerland)
B Taiwan Office
C Singapore Branch

PLANTS
Yokkaichi Plant
100 Kawajiri-cho Yokkaichi, Mie 510-8552, Japan
Chiba Plant
5, Chigusakaigan, Ichihara, Chiba 229-0108, Japan
Kashima Plant
34-1, Tohwada, Kamisu, Ibaraki 314-0102, Japan

Styron Europe GmbH
(formerly Dow Europe GmbH)
Schkopau, Germany*A production plant of synthetic
rubbers where JSR owns a capacity
right of 30,000 tons/year.

JAPAN● Fine Chemicals and Other

Products Business

JSR MICROTECH INC.
Production and sales of printed circuitboards and IC testing fixtures.
D-MEC LTD.
Commissioned generation of 3D models,sales of solid modeling systems andoptically-hardened resins,and commissioned analysis by CAE.

JM Energy Corporation
Design, development, product andsales of lithium-ion capacitors.

KRATON JSR ELASTOMERS K.K.(*)
Production, purchase, and sales ofthermoplastic rubbers.

JSR ENGINEERING CO., LTD.
Engineering and consultation for chemicalengineering equipment.

Tri Chemical Laboratories, Inc.(*)
Production and sales of precursors forsemiconductors.

Emulsion Technology Co., Ltd.
Compounding and sales of crude latex.

JSR Business Service Co., Ltd.
Undertaking of general affairs, accounting,payroll calculation, welfare, computer
system design, programing and system
operation and maintenance.

JSR Life Sciences Corporation
Production and sales of life sciences
related materials.

JSR Micro Kyushu Co., Ltd.
Production of photoresists forsemiconductors and materials forflat panel displays.

Medical & Biological
Laboratories Co., Ltd.
R&D, manufacturing and sales ofdiagnostic and research reagents.

JSR Optech Tsukuba Co., Ltd.
Production of UV curing type opticalfiber coating materials.

● Elastomers Business
ELASTOMIX CO., LTD.
Compounding of crude rubbers andsales of compounded products.

JAPAN FINE COATINGS Co., Ltd.(*)
Sales of coating materials forfiber-optic cables reinforced byultraviolet or electron
radiation and for other apparatus.

Japan Butyl Co., Ltd.(*)
Production and sales of butyl rubbers.

● Plastics BusinessTechno Polymer Co., Ltd.
Production, sales and R&D of ABS resin.
JAPAN COLORING CO., LTD.
Coloring of synthetic resin and salesof colored products.
● Business in Other Fields
JSR Trading CO., LTD.
Exports and imports, purchase and sales ofthe following: various chemicals, machinery,equipment, physical distribution materials,
living necessities, foodstuffs, beverages,
real estate.

Nichigo Kogyo Co., Ltd.
Product packaging and undertaking of civilengineering and general construction.
JN System Partners Co., Ltd.
Computer system design, programing,
system operation and maintenance.

JSR LOGISTICS CO., LTD.
Freight forwarding, warehousing,delivery management.

OVERSEAS● Fine Chemicals and Other

Products Business

1 JSR Micro N.V.

Development, production and sales ofsemiconductor materials.
2 JSR Micro, Inc.

Development, production and sales ofsemiconductor materials.
3 JSR Micro Korea Co., Ltd.

Development, production and sales ofmaterials for flat panel displays andothers.
4 JSR Micro Taiwan Co., Ltd.

Development, production and sales ofmaterials for flat panel displays.
5 JSR (Shanghai) Co., Ltd.

Sales and marketing of JSR products.

6 J&W Beijing Biotech Co., Ltd.
Development, manufacturing and saleof latex reagents intermediates andchemiluminescent reagents intermediates.

● Elastomers Business
6 Kumho Polychem Co., Ltd.(*)
Production and sales of EPRs.
7 ELASTOMIX (THAILAND) CO., LTD.

Compounding of crude rubbers andsales of compounded products.

8 ELASTOMIX (FOSHAN) CO., LTD.
Compounding of crude rubbers andsales of compounded products.
9 Tianjin Kuo Cheng Rubber

Industry Co., Ltd.(*)
Compounding of crude rubbers and salesof compounded products.

10 JSR BST Elastomer Co., Ltd.
Sales and Manufacturing of S-SBR (Solution
Polymerization Styrene-Butadiene Rubber)

16 Techno Polymer (Shanghai) Co., Ltd.

11 JSR Trading, Inc.
Sales of synthetic rubber.

17 Techno Polymer Shanghai

12 JSR Trading (Shanghai) Co., Ltd.

Exports and imports, purchasing
and sales of various chemicals,
machinery, and equipment.

● Plastics Business
13 TECHNO POLYMER HONG KONG CO., LTD.
Sales and technical services of synthetic resinsin Hong Kong and neighboring regions.
14 Techno Polymer (Thailand) Co., Ltd.
Sales and technical services of synthetic
resins in ASEAN region.
15 Techno Europe N.V.

Sales and technical services of synthetic
Resins30

JSR Corporation Annual Report 2013

Sales and technical services of synthetic
resins in China.

Technical Development Co., Ltd.
Production and processing of plastics,
technical services related to plastics in China.

18 Techno Polymer Guangzhou Co., Ltd.

Sales and technical services of synthetic
resin in Guangzhou and neighboring regions.

19 TECHNO POLYMER AMERICA, INC.

Sales of plastics and technical services related
to plastics in North America.

20 Shanghai Rainbow Color Plastics

Co., Ltd.
Coloring of synthetic resins and sales ofcolored products.
(*) Equity method affiliate

BUSINESS
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CORPORATE DATA
63-64

FINANCIAL
31-62

Financial Section
Ten-Year Summary .................................................................32
Management's Discussion and Analysis .................................. 34
Risk Information .................................................................... 38
Consolidated Financial Statements:
Consolidated Balance Sheets .......................................... 40
Consolidated Statements of Income .................................. 42
Consolidated Statements of Comprehensive Income .......... 43
Consolidated Statements of Changes in Net Assets ........... 44
Consolidated Statements of Cash Flows ............................ 45
Notes to Consolidated Financial Statements ...................... 46
Independent Auditors’ Report............................................ 62

JSR Corporation Annual Report 201331

Ten-Year Summary
Fiscal year means year ended March 31														FY2004
FY2005
FY2006
FY2007For the fiscal year													Net sales¥275,071¥305,368¥338,160¥365,831

Costs and expenses

242,452

260,035

284,803

310,588

Operating income

32,61945,33353,35755,243

Interest and dividend income

397

519

635

1,030

Interest expenses

(693)

(475)

(420)

(399)

Income before income taxes and minority interests

30,37843,47149,03853,440Net income

19,35327,56430,55533,655

Capital expenditures

17,15618,13423,36122,094

Depreciation

14,97015,245

16,20618,133													At fiscal year-end
Total assets

308,581

325,031

381,097

408,949

13,92013,857

1,607

2,745

Total liabilities

146,280

139,249

164,389

168,963

Equity159,497

182,476

212,751

235,186

Current ratio (times)

1.6

1.8

1.7

1.8

Return on assets (%)

6.3

8.7

8.7

8.2

Return on equity (%)

12.9

16.1

15.5

15.0

Equity ratio (%)

51.7

56.1

55.8

57.5

Long-term debt due after one year													Per share data (Yen and U.S. dollars)													Net income

75.12

107.54119.63133.10Cash dividends

9.00

14.00

20.00

24.00

623.14717.13

836.31935.47

EquityNote: U.S. dollar amounts are translated, for convenience only, at ¥94.05 = US$1.00, the rate prevailing on March 31, 2013.												

32JSR Corporation Annual Report 2013

BUSINESS
02-17

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FINANCIAL
31-62

CORPORATE DATA
63-64

Millions of yen

Thousands of

U.S. dollars												FY2008FY2009FY2010FY2011FY2012FY2013
FY2013													¥406,968¥352,503¥310,184¥340,666¥349,947¥371,487$3,949,890

346,958

322,155

289,954

301,571

313,982

336,2813,575,555

60,01030,34820,23039,09535,96435,206374,335

1,309

1,230

568

626

634

809

8,601

(256)

(271)

(172)

(146)

(147)

(126)

(1,335)54,86720,803

19,45840,674

41,24542,847455,577

36,994

13,981

13,64527,571

26,40730,278321,937

29,076

19,081

17,707

11,801

19,72827,608

293,547

21,18024,83322,38019,245

17,784

19,145203,563													416,951

339,498

373,566

390,591

430,693482,935

5,134,877

1,525

1,500

1,500

1,028

500

6,626

70,448159,288

97,512

122,865

126,475

148,335

167,202

1,777,795

252,539

240,896

249,440

262,679

280,955

308,641

3,281,670

1.9

2.5

2.3

2.4

2.3

2.3

—

8.9

4.1

3.7

7.1

6.4

6.6

—

15.2

5.7

5.6

10.8

9.7

10.3

—

60.6

71.0

66.8

67.3

65.2

63.9

—

																										147.26

56.36

55.87

113.07109.46126.13

1.34

32.00

32.00

26.00

32.00

32.00

34.00

0.36

1,009.27

986.33

1,021.31

1,088.87

1,164.63

1,299.77

13.82												JSR Corporation Annual Report 201333

Management’s Discussion and Analysis

Analysis of Operating Results
Overview of FY2013, ended March 31, 2013
With respect to the JSR Group’s major customers’ industries, automobile production in North America remained robust due to strong demand and that in Japan grew steadily
due to recovery from the Great East Japan Earthquake.
However, car output in Europe was sluggish because of
economic slowdown. Automobile tire production as awhole increased only slightly as a result of weak demand
for replacement tires reflecting downturn in the global
economy despite steady tire shipments for new cars. Meanwhile, the semiconductor market remained flat, because
strong shipments for smartphone and multifunctional
mobile terminal applications failed to make up for sluggish
shipments for personal computer applications. Productionof flat panel displays (FPDs) increased from a year earlier,
thanks to strong demand for small and medium-sized panels for mobile equipment.
Amid these circumstances, the JSR Group, in the Pet-rochemical Products Business, has expanded production
capacity of products with technological advantages andhas endeavored to increase their sales globally. The Group,in the Fine Chemicals and Other Products Business, has
focused its efforts on cutting-edge semiconductor technology and materials and promoted sales expansion of materials used for displays of mobile equipment centering onelectronic materials used for IT applications. In addition toexisting bottom-up style cost reduction measures for variable costs and expenses, the Group has vigorously promoted “E-100 plus,” a project to improve its cost structureby improving productivities and enhancing efficiencies fromthe broader and innovative standpoint of business divisions
and the entire company.
In fiscal 2013, we reported net sales of ¥371.5 billion(up 6.2% year-on-year), operating income of ¥35.2 billion(down 2.1%), and net income of ¥30.3 billion (up 14.7%).

Segment Sales/Operating Income(¥ millions)Fine Chemicals and Other Products Business
Operating income
Elastomers Business
Operating income
Plastics Business
Operating income
Net Sales
Operating income

Net Sales/Net Income

FY2009

10

11

12

13

¥137,396
20,082150,085
8,951
65,022
1,315
352,503¥ 30,348¥126,286
19,859136,086
372
47,812(1)
310,184¥ 20,230¥127,515
21,793160,854
14,73952,297
2,563
340,666¥ 39,095¥117,876
14,468
180,835
19,35851,2362,138
349,947¥ 35,964¥123,931
14,321
195,797
17,92351,7592,962
371,487¥ 35,206

Operating Income/Operating Income Margin(¥ billions)

Total Assets/ROA(¥ billions)
50

500

(%)
15

50

(¥ billions)

(%)
10

500
¥482.9 bill.

400¥371.5 bill.

12

400

9

300

20

6

200

4

10

10

3

100

2

0

0

0

0

40

40

300

30

200

20

100

0

FY2009

10

11

12

13

Net sales
Net income

348¥35.2 bill.

¥30.3 bill.
30

9.4%

FY200910

11

Operating income
Operating income margin

12

13

6.6%

FY200910

11

Total assets
ROA

JSR Corporation Annual Report 2013

Shareholders' Equity/ROE

R&D Expenses/

Shareholder Return /

12

13

6

0

BUSINESS
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GOVERNANCE
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CORPORATE DATA
63-64

FINANCIAL
31-62

Review of Operations

As a result, the Elastomers Business segment posted
operating income of ¥17.9 billion (down 7.4%) on sales of¥195.8 billion (up 8.3%).

Elastomers Business Segment

In fiscal 2013, we increased production capacity for soluPlastics Business Segmenttion polymerization styrene-butadiene rubber (S-SBR), a difIn the first half of fiscal 2013, shipments for automobile
ferentiated product among synthetic rubbers, at our Yokkaapplications in Japan and overseas including reconstruction
ichi Plant, because demand for fuel-efficient tires expanded
demand after the disaster remained steady, but in the secaround the world due to the introduction of the tire laond half, shipments fell from a year earlier due to a stall inbeling system. We took full advantages of the enhanced
demand for Asian countries including China and a decline
capacity at our Yokkaichi Plant to increase shipments of Sin shipments for amusement machines applications as well
SBR and saw its growth rate substantially exceed that ofas a negative reaction after the end of the government’s
global demand for S-SBR. To keep pace with further growsubsidy program for eco-friendly cars in Japan. Meanwhile,ing demand, we started construction of an S-SBR plant at
we saw net sales and operating income increase from
JSR BST Elastomer Co., Ltd. (JBE), a joint-venture company
Net
Sales/Net
IncomeOperating
Income/Total
Assets/ROA
fiscal 2012, because of ourefforts
to revise selling prices
in Thailand.
Operating Income Margininaccordancewithachangeinrawmaterial prices and to(%)
The
segment’s
break-evenpoint
improved
greatly,(¥ billions)(¥ billions)(¥ billions)
(%)
15
50
500
50
500
reduce costs further. In addition, we decided to¥482.9
establish
a10
because we promoted a project to improve our cost strucbill.
subsidiary in Belgium
in 400April 2013 to cope with growing 8
turethat included reducing both fixedand variable
costs,
1240
400
40¥371.5 bill.
¥35.2 bill.
demand in Europe.
streamlining and improving productivity, and also tried to¥30.3 bill.
6.6%
9.4%
30
300
30
300 Business segment posted oper- 6
As a result, 9the Plastics
raise
profitability by revising selling prices
to copewith aating income of ¥3.0 billion (up 38.6%) on sales of ¥51.8
change in raw material prices.
6
20
200
20
200
4
billion (up 1.0%).
Despite such improvements and the increase in ship3
100
10 East Japan100
10 the Great2
ments
associated with recovery from
Fine Chemicals and Other Products Business
Earthquake, the segment as a whole was in a difficult earn0
0
0
0
0
0
ings environment
becausedemand for
petro-10
FY2009 101112 of sluggish
13
FY200911 Segment
1213
FY2009 1011
12
13
Net sales
Operating income
Total assets
In the semiconductor materials
business, demand forchemicalproducts and a decline in selling prices causedby
Net income
Operating income margin
ROA
smartphone and multifunctional mobile terminal applicathe global economic slowdown.

R&D Expenses/
Capital Expenditures

Shareholders' Equity/ROE(¥ billions)

(%)
28

350

Shareholder Return /Dividend Payout Ratio(¥ billions)(¥ billions)
30

20

(%)
80

15

60

¥27.6 bill.
¥300.6 bill.

300
250

24
20

200

25
¥19.7 bill.

20¥6.0 bill.

16
10

15
150
10.3%

8

50

4

FY200910

11

Shareholders' equity
ROE

12

13

27.0%
10

100

0

40

12

0

5

20

5

0

¥8.1 bill.

FY200910

11

R&D expenses
Capital expenditures

12

13

0

FY2009

10

11

12

13

0

Dividend
Share buyback
Dividend payout ratio

JSR Corporation Annual Report 201335

tions remained strong and sales of materials for cuttingedge applications increased. Meanwhile, demand for personal computer and memory applications continued to be
weak and the burden of investment in cutting-edge fields
increased. Consequently, ales remained flat, but operating
income decreased from a year earlier.
In the FPD materials business, sales and operating income were almost the same as those of the previous year,
because the capacity utilization of main liquid crystal panel(LCD) manufacturers, which remained low in the first halfof fiscal 2013, recovered from the middle of the year anddemand for smartphone and multifunctional mobile terminal applications continued to be steady, just like in thesemiconductor materials business.
In the strategic businesses and other products, sales
increased 2.5 times between fiscal 2011 and fiscal 2013.
Especially, in the precision materials and processing field,
sales of heat-resistant transparent “ARTONTM” for retardation film grew substantially from a year earlier becauseof strong demand for smartphone and multifunctional
mobile terminal applications. In addition, sales of transparent conductive indium tin oxide (ITO) film for touch panel
application came into full swing. In the environment andenergy field, we marketed lithium-ion capacitors (LIC), an
electricity storage device, with upgraded functionality anddurability and the number of positive evaluations by customers steadily increased. In the biomedical materials field,
we focused on three areas: in vitro diagnostics reagents,
bioprocess materials and medical polymers. In the in vitro
diagnostics reagents area, in addition to manufacturing
and sales in Japan, J & W Beijing Biotech Co., Ltd., a jointventure company established in China, started marketing in
October 2012.
As a result, the Fine Chemicals and Other Products Business segment posted operating income of ¥14.3 billion(down 1.0%) on sales of ¥123.9 billion (up 5.1%).

36

JSR Corporation Annual Report 2013

Business Outlook for FY2014
We forecast that the JSR Group’s major customers’ industries—automobile, tire, semiconductor and flat panel
display—will grow moderately.
In the Elastomers Business, demand for S-SBR for fuelefficient tires is expected to expand because of the introduction of the labeling system especially in Europe andSouth Korea. We will strive to expand global sales andensure earnings, including the contribution from a new SSBR plant at JBE in Thailand.
In the Fine Chemicals and Other Products Business, wewill endeavor to increase market share and sales of lithography materials using our technological advantages, since
the production of cutting edge 20nm-generation logics islikely to move into high gear in the semiconductor market from fiscal 2014. In the FPD industry, we will ensurebusiness opportunities without fail by marketing, as well
as existing LCD internal cell materials, new products thatincorporate precision materials and processing technology,
since the market of small-and-medium-sized panels for
smartphones and multifunctional mobile terminals is expected to continue expanding along with the sophisticationof the products.
In addition to expanding the top line of the Petrochemicals Business and the Fine Chemicals and Other Products
Business, we will strive to increase profitability by further
promoting “E-100 plus,” a project to improve earning
power.
For fiscal 2014, we forecast consolidated net sales of¥415.0 billion (up 11.7% year-on-year), operating incomeof ¥43.0 billion (up 22.1%), and net income of ¥31.5 billion (up 4.0%). These forecasts assume an exchange rate of¥95.0 per U.S. dollar and a naphtha price of ¥63,000 per
kiloliter.

BUSINESS
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18-30

FINANCIAL
31-62

CORPORATE DATA
63-64

Analysis of Financial Position
At March 31, 2013, total assets amounted to ¥482.9 billion, up ¥52.2 billion from a year earlier.
Current assets totaled ¥320.4 billion, up ¥28.0 billion,
due to an increase in cash and deposits, short-term investment securities and inventories.
Noncurrent assets totaled ¥162.5 billion, up ¥24.2 billion, due to an increase in property, plant and equipment
associated with the construction of a plant in Thailand
and a rise in investment securities related to investments
in companies in Japan and overseas and changes in valua-tions of securities.
Total liabilities amounted to ¥167.2 billion, up ¥18.9
billion from a year earlier, due to an increase in notes andaccounts payable-trade and long-term loans payable.
Shareholders’ equity increased by ¥16.3 billion to¥300.6 billion. Net assets amounted to ¥315.7 billion, up¥33.4 billion from a year earlier because of a rise in accumulated other comprehensive income and minority interests.

Analysis of Cash FlowsAt March 31, 2013, cash and cash equivalents (“funds”)
stood at ¥53.8 billion, down ¥13.4 billion from a year earlier.
Net cash provided by operating activities amounted to¥47.7 billion, up ¥18.7 billion from the previous year. Main
factors included income before income taxes and minority
interests of ¥42.8 billion, depreciation and amortization of¥19.2 billion and an increase in notes and accounts payables of ¥11.7 billion.
Net cash used in investing activities totaled ¥58.7 bil-lion, up ¥37.6 billion from the previous year. Major factors
were ¥27.9 billion in payments for purchase of noncurrent
assets, ¥26.0 billion in payments for purchase of securitiesand ¥4.5 billion in payments for purchase of shares in affiliates.
Net cash used in financing activities was ¥10.2 billion,up ¥2.5 billion from the previous year. This was mainly due
to ¥8.0 billion in cash dividends paid and ¥6.0 billion inpurchase of treasury stock, despite ¥5.4 billion in proceedsfrom long-term loans payable.

Profit Appropriation
With respect to profit appropriation, the Company regards
business growth over the long term as its top priority.
To generate sustainable long-term growth, we strive toincrease competitiveness by developing new businesses
through the reinforcement of research and development
activities.
Following this basic policy, we will appropriate profits
in line with our consolidated performance while paying
continuous, stable cash dividends based on comprehensive
consideration of a balance between appropriating profits
and retaining earnings necessary for future business advancement.

We allocate retained earnings to R&D activities linked
to future growth businesses, as well as to strategic investments. The Company works hard to return profits toshareholders by enhancing corporate value.
As already announced, based on this policy, we havedecided to pay a year-end dividend of ¥17.00 per share,
the same amount as the interim dividend. Including theinterim dividend already paid, the total annual dividend forfiscal 2013 will be ¥34.00 per share.
With regard to the dividend for the next fiscal year
(fiscal 2014), we plan to pay ¥38.00 annually (the interim
dividend of ¥19.00 and the year-end dividend of ¥19.00)
by taking into account the business outlook.

JSR Corporation Annual Report 2013

37

Risk Information
The JSR Group is exposed to the following risks that may impact on operating results, financial position, cash flows andother aspects of performance. Forward-looking statementsin this discussion are based on JSR’s judgments as of March
31, 2013. Risks at JSR include, but are not limited to, the following items:(1) Changes in Demand due to Economic Trends

In the major industries where the JSR Group’s products are
sold such as automobiles and electronics, demand is influenced by the economic climate in a country or region. An
economic slowdown could reduce demand in an industry
and adversely affect the JSR Group’s operating results.
(2) Higher Prices for Crude Oil, Naphtha and Other
Major Raw Materials

Higher prices for crude oil and naphtha, or changes in themarkets for JSR’s major raw materials, could raise prices ofraw materials and adversely affect the JSR Group’s operating results, especially in the Petrochemical Products sector ofelastomers, emulsions and plastics.
(3) Fluctuation in Exchange Rates

As the JSR Group undertakes product exports in foreign
currencies and imports goods such as raw materials, theCompany takes measures to reduce risks such as entering into forward exchange contracts; however, fluctuationin exchange rates could give rise to adverse outcomes. In
addition, operating results of consolidated subsidiaries andequity method affiliates located overseas are converted
into Japanese yen amounts for the purposes of preparing
the consolidated financial statements. However, due to the
yen’s appreciation, the JSR Group’s business results could be
adversely affected.
(4) Procurement of Raw Materials

The JSR Group works to ensure a stable supply of raw
materials by procuring materials from a number of sources.
However, an interruption to the supply of raw materials due

38

JSR Corporation Annual Report 2013

to an accident, bankruptcy or quality problem at a supplier could adversely affect production activities and the JSRGroup’s operating results.
(5) Development of New Products

Rapid technological progress is constantly taking place in theelectronics industry, which is the primary source of demand
for semiconductor manufacturing materials, FPD materials
and optical materials, the major products of the JSR Group’s
fine chemicals and other products business. JSR is constantly
working on developing state-of-the-art materials in line withthis progress. However, unforeseen changes in the industry
or market could prevent the timely development of new
products and adversely affect the JSR Group’s operating
results.
(6) R&D Involving Next-Stage Growth Businesses

The JSR Group makes substantial investments in R&D tocreate next-stage growth businesses. However, there is no
guarantee that these R&D activities will always yield worthwhile results. Depending on R&D results, there could be an
adverse effect on the JSR Group’s operating results.
(7) Protection of Intellectual Property

Protection of intellectual property is extremely important for
the JSR Group’s business activities. JSR has established a system for protecting its intellectual property and takes various
actions as required. However, a dispute about intellectual
property with another company or an infringement on JSR’s
intellectual property by another company could adversely
affect the JSR Group’s operating results.
(8) Product Quality Assurance and Product Liability

The JSR Group has a product quality assurance systemand product liability insurance. However, damage or injury
caused by a product manufactured by the JSR Group could
adversely affect the JSR Group’s operating results.
(9) Natural Disasters and Accidents

To minimize the negative effect on its business activities ofany disruption to manufacturing activities, all JSR GroupBUSINESS
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GOVERNANCE
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manufacturing facilities have established countermeasures
based on the identification of all potential sources of a crisisand conducts periodic inspections of facilities. The groupalso works constantly on safety measures with regard toearthquakes and other natural disasters. However, a major
natural disaster or accident that damages a production facility or disrupts manufacturing could adversely affect the JSRGroup’s operating results.
JSR’s main production facility, the Yokkaichi Plant,houses private power generation equipment, and theKashima Plant is able to access electric power from shared
power generation facilities when necessary. In the eventthat electric power shortages become severe due to natural
disasters and the like, however, the JSR Group’s operating
results could be affected.
(10) Environmental Issues

Positioning environmental protection as an important element of its operations, the JSR Group complies with all laws
and regulations concerning the environment. The group also
takes actions aimed at reducing its environmental impact,
lowering and eliminating waste materials, and cutting energy and resource consumption. The group has taken manyactions to prevent the external release of all types of chemicals.
However, in the event that a spill occurs or that environmental regulations become stricter, the group’s businessactivities could be restricted, the group may have to pay
compensation and other expenses, or the group may have to
make substantial capital expenditures. Any of these events
could adversely affect the JSR Group’s operating results.

CORPORATE DATA
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FINANCIAL
31-62

in recruiting and retaining employees; an adverse impact on
business activities due to an inadequate social infrastructure;and the impact of wars, terrorism and other social instability.
Any of these events could adversely affect the JSR Group’s
operating results.
(12) Laws and Regulations

In the countries where it operates, the JSR Group is subject to various laws and regulations involving business andinvestment permits, export and import activities, trade, labor
relations, intellectual property, taxes, foreign exchange andother items. The group has established a clear compliancepolicy in order to ensure strict observance of laws and regulations as well as ethical standards. In the event that a law or
regulation is violated, or a law or regulation becomes stricter
or is significantly altered, there could be limitations to thegroup’s business activities or additional compliance costs.
Any of these events could adversely affect the JSR Group’s
operating results.
(13) Litigation

In conjunction with its business activities in Japan and overseas, the JSR Group may be sued or be involved in otherlitigation concerning a dispute with a supplier, customer orother external party. The outcome of significant litigation
could adversely affect the JSR Group’s operating results.

(11) Overseas Operations

The JSR Group is aggressively expanding operations on a
global scale, conducting manufacturing, sales and otheractivities in countries and regions in the United States, Europe, Asia and other parts of the world. Overseas operations
are exposed to a number of risks that include, but are notlimited to, an unfavorable political environment or economic
trends; labor disputes and other problems due to differences in labor laws and other working conditions; difficulty

JSR Corporation Annual Report 201339

Consolidated Balance Sheets
JSR Corporation and Consolidated Subsidiaries
March 31, 2012 and 2013						
						
					
Millions of yen

ASSETS

Thousands of
U.S. dollars(Note 1)

2012

2013

2013

¥ 20,490¥ 32,190$ 342,269

Notes and accounts receivable — trade, net (Notes 4, 5 and 20)

89,19491,512

973,010

Short-term investment securities (Notes 3, 5 and 6)

69,496

79,412

844,365

Inventories

64,947

74,687794,122

Accounts receivable — other (Note 20)

24,95328,883

307,102

Deferred tax assets (Note 9)

3,670

4,191

44,560		Current assets:
Cash and deposits (Notes 3 and 5)

19,674

9,544

101,473

292,424

320,419

3,406,901

Buildings and structures, net

27,514

27,824

295,845

Machinery, equipment and vehicles, net

27,39925,801

274,328

Land			

18,453

18,685

198,676

Construction in progress

4,075

15,540165,234

Other, net		

3,063

5,355

56,93580,504

93,205

991,018

5,167

6,309

67,084

37,12950,532537,286

Other (Notes 3, 5 and 16)
		Total current assets

Noncurrent assets:
Property, plant and equipment (Notes 7, 10, 11 and 19):		Total property, plant and equipment

Intangible assets
Investments and other assets
Investment securities (Notes 5 and 6)
Deferred tax assets (Note 9)

3,841

1,807

19,212Other, net (Notes 4, 16 and 19)

11,628

10,663

113,376		Total investments and other assets

52,59863,002669,874		Total noncurrent assets

138,269

162,516

1,727,976

		Total assets (Note 19)¥430,693¥482,935$5,134,877

See accompanying notes.

40

JSR Corporation Annual Report 2013

BUSINESS
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CORPORATE DATA
63-64

FINANCIAL
31-62						
						
					
Millions of yen

LIABILITIES AND NET ASSETS

Thousands of
U.S. dollars(Note 1)

2012

2013

2013

Current liabilities:¥ 83,077¥ 97,226$1,033,765

Short-term loans payable (Notes 5 and 7)

15,184

14,211

151,098

Income taxes payable (Note 9)

6,331

6,888

73,239Other (Notes 9, 12 and 16)

25,28623,522250,098

129,878

141,847

1,508,200

500

6,626

70,448Provision for retirement benefits (Note 8)

13,967

15,211

161,737

Provision for environmental measures

2,701

2,101

22,339Notes and accounts payable — trade (Notes 5 and 20)

		Total current liabilities

Noncurrent liabilities:
Long-term loans payable (Notes 5, 7)

1,290

1,417

15,071		Total noncurrent liabilities

18,45825,355269,595

		Total liabilities

148,336

167,202

1,777,795

23,32023,320247,955

Other (Notes 9 and 16)

Contingent liabilities (Note 17)
Net assets (Note 14)
Shareholders’ equity
Common stock:		

Authorized — 696,061,000 shares		Issued		— 255,885,166 shares in 2012				237,973,205 shares in 2013

Capital surplus

25,17925,179267,724

Retained earnings

263,100

253,0092,690,158(27,321)(930)(9,899)Unrealized gains on securities, net of taxes

4,218

8,470

90,060Foreign currency translation adjustment(7,541)(407)(4,328)Treasury stock			

14,645,692 shares in 2012 and 515,440 shares in 2013

Accumulated other comprehensive income (Note 13)

Subscription rights to shares (Note 15)

656

728

7,744

Minority interests

746

6,364

67,668

			Total net assets

282,357

315,733

3,357,082

					¥430,693¥482,935$5,134,877

See accompanying notes.

JSR Corporation Annual Report 201341

Consolidated Statements of Income
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2013						
						
					
Millions of yen		Thousands of
U.S. dollars(Note 1)

2012

2013

2013

¥349,947¥371,487$3,949,890

260,487
53,496
313,983
35,964

279,162
57,119336,281
35,206

2,968,229
607,326
3,575,555
374,335

Other income (expenses):
Interest income
Dividends income
Interest expenses
Foreign exchange gains
Equity in earnings of affiliated companies
Depreciation
Gain on sales of investment securities (Note 6)
Gain on sales of noncurrent assets (Note 10)
Loss on abandonment of inventories
Impairment loss (Notes 11 and 19)
Loss on abandonment of noncurrent assets
Loss on disaster (Note 12)
Other, net		
					
Income before income taxes and minority interests

247
386
(147)
360
4,730
(262)
—
4,288
(534)
(1,920)(1,182)
(816)
131
5,281
41,245

370
439
(126)
2,976
4,732
(141)
214
—
(742)
—
—
—
(81)
7,641
42,847

3,936
4,665(1,335)31,64050,311(1,501)
2,279—(7,888)———(865)
81,242455,577

Income taxes (Note 9):
Current		
Deferred							
Income before minority interests

12,2992,489
14,78826,457

12,948(392)
12,55630,291

137,672(4,166)
133,506
322,071		Net sales (Notes 19 and 20)
Costs and expenses (Note 19):
Cost of sales
Selling, general and administrative expenses					Operating income (Note 19)

(50)
(13)
Minority interests in net income of consolidated subsidiaries
Net income		¥ 26,407¥ 30,278							

(134)
$ 321,937						Yen					U.S. dollars(Note 1)				Per share of common stock:
Net income
Diluted net income
Cash dividends applicable to the year
See accompanying notes.

42

JSR Corporation Annual Report 2013

2012

2013

¥ 109.46
109.2732.00¥ 126.13
125.86
34.00

2013

$

1.34
1.34
0.36

BUSINESS
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CORPORATE DATA
63-64

FINANCIAL
31-62

Consolidated Statements of Comprehensive Income
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2013						
						
					
Millions of yen		Thousands of
U.S. dollars(Note 1)

2012

2013

2013

¥26,457¥30,291$322,071

Unrealized gains on securities, net of taxes

654

4,274

45,443Foreign currency translation adjustment

(619)

5,755

61,200accounted for using equity method

(454)

2,046

21,753

Other comprehensive income (Note 13)(419)

12,075

128,396¥26,038¥42,366$450,467¥25,997¥41,484$441,088

41

882

9,379

		

Income Before Minority Interests
Other Comprehensive Income

Share of other comprehensive income of associates		Comprehensive Income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests									See accompanying notes.

JSR Corporation Annual Report 201343

Consolidated Statements of Changes in Net Assets
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2013

Millions of yen
Number ofshares ofcommon stock(thousands)

Commonstock

CapitalsurplusRetainedearnings

Treasurystock

255,885¥23,320¥25,179¥244,413¥(27,320)¥3,606¥(6,519)

¥545

¥892

Net income		

—

—

—

26,407

—

—

—

—

—

Purchase of treasury stock

—

—

—

—

(1)

—

—

—

—

Dividends from surplus

—

—

—

(7,720)

—

—

—

—

—

			
shareholders’ equity

—

—

—

—

—

612

(1,022)

111

(146)

Total changes of items during the period

—

—

—

18,687(1)612(1,022)

111

(146)

255,885¥23,320¥25,179¥263,100¥(27,321)¥4,218¥(7,541)

¥656

¥746

Dividends from surplus

—

—

—

(7,961)

—

—

—

—

—

Net income		

—

—

—

30,278

—

—

—

—

—

Purchase of treasury stock

—

—

—

—

(6,001)

—

—

—

—

Disposal of treasury stock

—

—

—

(4)

39

—

—

—

—

(17,912)——(32,353)

32,353

—

—

—

—

—

—

—

(51)

—

—

—

—

—

5,618

Balance at April 1, 2011

Unrealized
gains onsecurities,
net of taxes

Foreigncurrency
Subscription
translationrightsadjustments
to shares

Minority
interests

Changes of items during the period

Net changes of items other than

Balance at March 31, 2012
Changes of items during the period

Retirement of treasury stock
Change of scope of consolidation
Net changes of items other than			 shareholders’ equity

—

—

—

—

—

4,252

7,134

72

Total changes of items during the period(17,912)——(10,091)

26,391

4,252

7,134

72

5,618

Balance at March 31, 2013

237,973¥23,320¥25,179¥253,009(930)¥8,470¥ (407)¥728¥6,364

					Balance at April 1, 2012¥

Thousands of U.S. dollars (Note 1)
255,885 $247,955$267,724 $2,797,458 $(290,500)$44,847$(80,186)$6,974$ 7,933

Changes of items during the period
Dividends from surplus

—

—

—

(84,647)

—

—

—

—

—

Net income		

—

—

—

321,937

—

—

—

—

—

Purchase of treasury stock

—

—

—

—

(63,803)

—

—

—

—

Disposal of treasury stock

—

—

—

(46)

410

—

—

—

—

(17,912)——(343,994)

343,994

—

—

—

—

—

—

—

(550)

—

—

—

—

—

—

—

—

—

—

45,21375,858770

59,735

Total changes of items during the period(17,912)——

107,300

280,601

45,21375,858770

59,735

Balance at March 31, 2013

237,973 $247,955(9,899)$90,060$ (4,328)$7,744$67,668

Retirement of treasury stock
Change of scope of consolidation
Net changes of items other than			 shareholders’ equity

See accompanying notes.

44

JSR Corporation Annual Report 2013

$267,724 $2,690,158 $BUSINESS
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CORPORATE DATA
63-64

FINANCIAL
31-62

Consolidated Statements of Cash FlowsJSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2013						
						
					
Millions of yen				

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes andminority interests to cash provided by operating activities:
		 Depreciation and amortization
		 Interest and dividends income
		Interest expenses
		 Equity in earnings of affiliates
		 Gain on sales of noncurrent assets
		 Loss on abandonment of noncurrent asset
		 Impairment loss
		 Loss on disaster
		 Changes in operating assets and liabilities — net:
			 Decrease (increase) in notes and accounts receivable — trade			 Decrease (increase) in inventories
			 Increase (decrease) in notes and accounts payable — trade		Other, net
				Subtotal
			 Interest and dividends income received
			Interest expenses paid
			Income taxes paid				 Net cash provided by operating activities
Cash flows from investing activities:
Decrease (increase) in time deposits
Decrease (increase) in short-term investment securities
Purchase of noncurrent assets
Proceeds from sales of noncurrent assets
Purchase of investment securities
Purchase of stocks of subsidiaries and affiliates
Payments of loans receivableCollection of loans receivable
Other, net						 Net cash used in investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Repayment of long-term loans payable
Proceeds from long-term loans payable
Proceeds from stock issuance to minority shareholders
Purchase of treasury stock
Cash dividends paid
Cash dividends paid to minority shareholders
Other, net		
			 Net cash used in financing activities
			 Effect of exchange rate change on cash and cash equivalents
			 Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation
Cash and cash equivalents at end of year (Note 3)

Thousands of
U.S. dollars(Note 1)

2012

2013

2013

¥41,245¥ 42,847$ 455,577

17,784(634)
147(4,730)(4,288)
1,182
1,920
816

19,232(809)
126(4,732)————

204,491(8,601)
1,335(50,311)————(16,250)(7,629)18,510(6,274)
41,7992,219(146)(14,891)
28,981

203(7,952)
11,688(2,885)57,7182,566(124)(12,440)
47,7202,157(84,551)
124,278(30,678)
613,697
27,285(1,324)(132,272)
507,386

8,491(12,000)(16,564)
4,401
(319)
(4,851)(2,538)2,277(27)(21,130)

1,000(26,000)(27,869)—(2,092)(4,500)(2,007)
2,914(143)(58,697)

10,633(276,449)(296,323)—(22,247)(47,847)(21,345)
30,985(1,510)(624,103)

107
(56)
—
—
(1)
(7,721)(10)(13)(7,694)(421)(264)
67,462(1,113)(1,000)5,417
540(6,001)(7,961)(19)(23)(10,160)
1,773(19,364)
67,198(11,833)(10,633)
57,595
5,745(63,803)(84,643)
(199)
(248)
(108,019)
18,850(205,886)
714,495—¥67,198

5,984¥ 53,818

63,621$ 572,230

See accompanying notes.
JSR Corporation Annual Report 201345

Notes to Consolidated Financial Statements
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2012 and 2013

1. Basis of Consolidated Financial Statementsfrom JSR AMERICA, INC.

The accompanying consolidated financial statements of JSR(b) Equity method — Investments in affiliated companies (allCorporation (the “Company”) and its consolidated subsidiariesof those 20% to 50% owned and certain others 15% to 20%

have been prepared in accordance with the provisions set forth

owned) were accounted for by the equity method (6 affiliatedin the Japanese Financial Instruments and Exchange Law and its

companies in 2012 and 2013). Unconsolidated subsidiaries andrelated accounting regulations, and in conformity with accounting

the other affiliated companies are stated at cost since their net

principles generally accepted in Japan (“Japanese GAAP”), which

income and retained earnings in the aggregate are not material

are different in certain respects as to application and disclosure re-compared to consolidated net income and retained earnings,

quirements of International Financial Reporting Standards.		

respectively.

The accounts of the Company’s overseas subsidiaries and affili-(c) Cash and cash equivalents — In preparing the consolidated

ates are based on their accounting records maintained in conform-

statements of cash flows, cash on hand, readily available depos-

ity with generally accepted accounting principles prevailing in theits and short-term highly liquid investments with maturities notrespective countries of domicile and make necessary amendments

exceeding three months at the time of purchase are considered tofor consolidated financial statements required by Practical Issues

be cash and cash equivalents.

Task Force No.18 issued by ASBJ. The accompanying consolidated(d) Short-term securities and investment securities — The

financial statements have been restructured and translated into

Company and its consolidated subsidiaries (the “Companies”) had

English (with some expanded descriptions) from the consolidated

no trading securities or held-to-maturity debt securities. Equity

financial statements of the Company prepared in accordance withsecurities issued by subsidiaries and affiliated companies, which

Japanese GAAP and filed with the appropriate Local Finance Bu-

are not consolidated or accounted for using the equity method,reau of the Ministry of Finance as required by the Japanese Finan-

are stated at moving-average cost. Available-for-sale securities

cial Instruments and Exchange Law. Some supplementary infor-with available fair market values are stated at fair market value

mation included in the statutory Japanese language consolidated

and unrealized gains and losses on these securities are reported,financial statements, but not required for fair presentation, is not

net of applicable income taxes, as a separate component of net

presented in the accompanying consolidated financial statements.

assets via the Consolidated Statements of Comprehensive income.

The translations of the Japanese yen amounts into U.S. dollars

Realized gains and losses on sale of such securities are computed

are included solely for the convenience of readers outside Japan,

using moving-average cost. Available-for-sale securities with nousing the prevailing exchange rate at March 31, 2013, which wasavailable fair market values are stated at moving-average cost or¥94.05 to U.S.$1.00. The convenience translations should not beamortized cost.

construed as representations that the Japanese yen amounts have(e) Inventories — Inventories are stated at cost, which is deter-

been, could have been, or could in the future be, converted into

mined mainly based on the average method (for the value stated

U.S. dollars at this or any other rate of exchange.

on the balance sheet, book value is written down to reflect the

2. Summary of Significant Accounting Policies(f) Property, plant and equipment, and depreciation —(a) Consolidation — The accompanying consolidated financial

Property, plant and equipment are stated at cost. Depreciation

statements include the accounts of the Company and its sig-

is computed using the declining-balance method at rates basednificant subsidiaries (28 and 30 subsidiaries in 2012 and 2013,

on their estimated useful lives except for buildings acquired after

respectively).

March 31, 1998, which are depreciated based on the straight-line

lower profitability).

All significant intercompany accounts and transactions havebeen eliminated in consolidation.

method.
(i) The accounting change

JSR BST Elastomer Co., Ltd. and JSR Life Sciences Corporation

Effective April 1, 2012, due to a revision of the corporate tax law

have been consolidated since 2013 due to increase of materiality.

in Japan, the Company and its domestic consolidated subsidiaries

Effective August 1, 2011, JSR Trading, Inc. has been renamed

have applied a depreciation method based on the revised law for46

JSR Corporation Annual Report 2013

BUSINESS
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tangible assets purchased on or after April 1, 2012.

CORPORATE DATA
63-64

FINANCIAL
31-62

are utilized by the Companies to reduce foreign currency ex-

The impact of this change on operating income, ordinary in-change and interest rate risks. The Companies do not enter into

come and income before income taxes for FY 2013 is immaterial.

derivatives for trading purposes or speculative purposes. Derivative(g) Intangible assets — Goodwill is amortized by the straight-line

financial instruments and foreign currency transactions are classi-

method over the estimated useful lives up to twenty years.

fied and accounted for as follows:

Software for its own use is amortized over the estimated useful(i) All derivatives are recognized as either assets or liabilities andlife (five years) using the straight-line method.

measured at fair value, and gains or losses on these derivative(h) Leased assets — Assets of finance leases are depreciated overtransactions are recognized in the consolidated statements of

the lease term using the straight-line method that residual value isincome.

zero.

(ii) The interest rate swaps that qualify for hedge accounting(i) Allowance for doubtful accounts — Allowance for doubtful

and meet specific matching criteria are not remeasured at mar-accounts is provided in amounts sufficient to cover possible losses

ket value, but the differential paid or received under the swap

on collection. Allowance for doubtful accounts consists of the esti-

agreements is recognized and included in interest expense ormated uncollectible amount with respect to specific items, and theincome as incurred.

amount calculated using the actual percentage of collection losses(n) Foreign currency transactions — The Companies trans-in the past with respect to other items.

late assets and liabilities denominated in foreign currencies into(j) Provision for retirement benefits — Employees of theJapanese yen at exchange rates prevailing at the balance sheet

Companies are entitled, under most circumstances, to lump-dates. Resulting exchange gains or losses are credited or charged

sum severance payments or pension payments upon reaching theto income as incurred.

mandatory retirement age, or earlier in the case of voluntary or(o) Translation of foreign currency financial statements —involuntary termination, based on the compensation at the time

Financial statements of overseas subsidiaries are translated intoof severance and years of service.

Japanese yen using the respective year-end rate for assets and

The Companies provided provision and expenses for employ-liabilities, the average rate for revenues and expenses, and theees’ severance and retirement benefits at year-end based on thehistorical rates for shareholders’ equity accounts. Foreign currency

estimated amounts of projected benefits obligation and the fairtranslation adjustments are contained in accumulated other com-value of the pension assets.
Actuarial differences are recognized as expenses at once in theprehensive income and minority interests.
(p) Amounts per share of common stock — The computation

following period.

of net income per share of common stock is based on the average(k) Provision for environmental measures — A provision for

number of shares outstanding during each fiscal year. Treasury

environmental measures is provided based on estimated costs forstock has been excluded in the calculation of amounts per sharethe disposal of polychlorinated biphenyl (PCB) as mandated by theof common stock.

Law Concerning Special Measures Against PCB Waste.

Cash dividends per share represent actual amounts applicable(l) Income taxes — The Companies provide for income taxes

to the respective years.

applicable to all items included in the consolidated statements of(q) Reclassifications — Certain prior year amounts have been

income regardless of when such taxes are payable. Income taxes

reclassified and restated to conform to the current year presenta-

based on temporary differences between tax and financial report-tion.

ing purposes are reflected as deferred income taxes in the consoli-

These reclassifications and restatements had no effect on

dated financial statements using the asset and liability method.

previously reported results of operations or retained earnings.

(m) Derivative and hedging activities — The Companies use(r) Accounting Standards for Accounting Changes and Error

derivative financial instruments to manage their exposures to fluc-

Corrections — The Companies adopted “Accounting Standard

tuations in foreign exchange and interest rates. Foreign exchange

for Accounting Changes and Error Corrections”(Statement No.24

forward contracts, foreign currency swaps and interest rate swaps

by ASBJ on December 4, 2009) and “Guidance on AccountingStandard for Accounting Changes and Error Corrections (Guidance

JSR Corporation Annual Report 201347

No.24 by ASBJ on December 4, 2009) for accounting changesii) Treatment in the consolidated statements of income and theand corrections of prior period errors which are made from thestatements of comprehensive income

fiscal year beginning on April 1, 2011.

The revised accounting standard would not change how to(s) New Acounting Pronouncements —recognized actuarial gains and losses and past service costs

Accounting Standard for Retirement Benefits

in profit or loss. Those amounts would be recognized in prof-“Accounting Standard for Retirement Benefits”(Statement No.26

it or loss over a certain period no longer than the expected

by ASBJ on May 17, 2012) and “Guidance on Accounting Stand-average remaining working lives of the employees. However,ard for Retirement Benefits”(Guidance No.25 by ASBJ on May 17,

actuarial gains and losses and past service costs that arose2012) have been issued.

in the current period and are yet to be recognized in profit

Major changes are as follows:or loss shall be included in other comprehensive income andi) Treatment in the consolidated balance sheets

actuarial gains and losses and past service costs that were

Under the current requirements, actuarial gains and losees

recognized in other comprehensive income in prior periods

and past service costs that are yet to be recognized in profit

and then recognized in profit or loss in the current period

or loss are not recognized in the balance sheet, and theshall be treated as reclassification adjustments.

difference between retirement benefit obligations and planThis accounting standard and the guidance are effective fromassets(hereinafter, “deficit or surplus”), adjusted by suchthe end of fiscal years beginning on or after April 1, 2013. How-

unrecognized amounts, are recognized as a liability or asset.

ever, no retrospective application of this accounting standard to

Under the revised accounting standard, actuarial gains andconsolidated financial statements in prior periods is required.

losses and past service costs that are yet to be recognized in

The Companies expected to apply the revised accounting

profit or loss shall be recognized within equity (accumulated

standard from the fiscal year ending March 31, 2014 and is in theother comprehensive income), after adjusting for tax effects,

process of measuring the effects of applying the revised account-and the deficit or surplus shall be recognized as a liability or

ing standard.

asset.

3. Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2012 and 2013 consisted of the following:													Millions of yen						Thousands of
U.S. dollars

		
2012
2013
2013

Cash and deposits		
Short-term investment securities		
Time deposits over three months		Current assets: Other		Cash and cash equivalents		

¥ 20,490
69,496(36,281)
13,493¥ 67,198¥ 32,190
79,412(61,282)
3,498¥ 53,818$ 342,269
844,365(651,600)
37,196$ 572,230

4. Allowance for doubtful accounts
Allowance for doubtful accounts as of March 31, 2012 and 2013 were as follows:													Millions of yen		

Allowance for doubtful accounts		
2012
2013

Current asset : Notes and accounts receivable — trade		Investments and other assets : Other 		48

JSR Corporation Annual Report 2013¥(719)(323)¥(460)(356)

Thousands of
U.S. dollars

2013$(4,895)(3,784)

BUSINESS
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GOVERNANCE
18-30

5. Fair Value of Financial Instruments
The following is a summary of the amount on consolidated balance sheet, fair value and the difference between these two items
by major financial instruments as of March 31, 2012 and 2013.

FINANCIAL
31-62

CORPORATE DATA
63-64

Financial instruments which fair value is extremely difficult to estimate is excluded from the following table.
					

					

Millions of yen
Book value

Fair value

Difference

March 31, 2012:(1) Cash and deposits(2) Notes and accounts receivable — trade(3) Short-term investment securities and investment securities(4) Current assets — other (short-term loans receivable)
Total assets(5) Notes and accounts payable — trade(6) Short-term loans payable(7) Long-term loans payable
Total liabilities¥ 20,490
89,91388,54813,493¥212,444
83,077
15,184500¥ 98,761¥ 20,490
89,91388,481
13,493¥212,377
83,077
15,184500¥ 98,761¥

March 31, 2013:(1) Cash and deposits(2) Notes and accounts receivable — trade3) Short-term investment securities and investment securities(4) Current assets — other (short-term loans receivable)
Total assets(5) Notes and accounts payable — trade(6) Short-term loans payable(7) Long-term loans payable
Total liabilities¥ 32,190
91,972
109,2503,498¥236,910
97,226
14,211
6,626¥118,063¥ 32,190
91,972
110,865
3,498¥238,525
97,226
14,211
6,623¥118,060

					
March 31, 2013:(1) Cash and deposits(2) Notes and accounts receivable — trade(3) Short-term investment securities and investment securities(4) Current assets — other (short-term loans receivable)
Total assets(5) Notes and accounts payable — trade(6) Short-term loans payable(7) Long-term loans payable
Total liabilities
1. Method to determine the estimated fair values of financial
instruments and other matters related to securities andderivative transactions(1) Cash and cash equivalents, and time deposits
The carrying values of cash and cash equivalents, and time
deposits approximate fair value because of their short maturities.

¥

¥

—
—
(67)
—
(67)
—
—
—
—

¥

—
—
1,615
—
¥1,615
—
—
(3)
¥
(3)

Thousands of U.S. dollars$ 342,269
977,905
1,161,609
37,196$2,518,979
1,033,765
151,098
70,448$1,255,311$ 342,269
977,905
1,178,780
37,196$2,536,150
1,033,765
151,098
70,418$1,255,281$——
17,171—$17,171
—
—
(30)
$
(30)

(2) Notes and accounts receivable―trade
The carrying values of notes and accounts receivable―tradeapproximate fair value because of their short maturities(3) Short-term investment securities and investment securities
The fair value of securities and investment securities aremeasured at the quoted market price of the stock exchange
for the equity instruments. Negotiable deposit, commercial
paper and cash in trust approximate fair value.
JSR Corporation Annual Report 201349

(4) Current assets―other (short-term loans receivable)
The carrying values of short-term loans receivable approximate fair value because of their short maturities(5) Notes and accounts payable―trade
The carrying values of notes and accounts payable―tradeapproximate fair values because of their short maturities.
(6) Short-term loans payable
Short-term loans payable approximate fair value.
(7) Long-term loans payable
The fair value of long-term loans payable is measured at thepresent value by discounting expected repayments of principal and interest in the remaining period using an assumed
interest rate on an equivalent new loan.
The fair value of long-term loans payable subject to a
special accounting method for interest rate swaps which
qualify for hedge accounting meet specific matching criteria
is measured at the present value by discounting expected
repayments of principal and interest together with the interest rate swaps in the remaining period using an assumed
interest rate on an equivalent new loan.

2. Financial instruments for which it is extremely difficult to estimate the fair values were as follows:																										Thousands of					Millions of yen		
U.S. dollars

				

		
2012
2013
2013

Non-listed equity securities		

¥20,694¥18,077$220,042

3. Redemptions schedule of monetary claims and securities with fixed maturities are as follows:
Millions of yen
					

					
					
					

Due
withinone yearMarch 31, 2012:(1) Cash and deposits¥ 9,581(2) Notes and accounts receivable-trade
89,913(3) Short-term investment securities and investment securities				 Available-for-sale securities with fixed maturities
					
Other
69,496(4) Current assets — other (short-term loans receivable)
13,493
				Total		
¥182,483
March 31, 2013:(1) Cash and deposits¥ 8,583(2) Notes and accounts receivable — trade
91,972(3) Short-term investment securities and investment securities				 Available-for-sale securities with fixed maturities					 Other
79,412(4) Current assets — other (short-term loans receivable)
3,498				 Total		¥183,465

Due after
one year
and within
five years

Due after
five years
and within
ten years

Dueover ten
years

¥200
—

¥—
—

¥—
—

¥

—
—
¥200

—
—
¥—

—
—
¥—

69,496
13,493¥182,683

¥200
—

¥—
—

¥—
—

¥

—
—
¥200

—
—
¥—

—
—
¥—

79,412
3,498¥183,665

Total

9,781
89,913

8,783
91,972Thousands of U.S. dollars

March 31, 2013:(1) Cash and deposits$ 91,259(2) Notes and accounts receivable — trade977,905(3) Short-term investment securities and investment securities				 Available-for-sale securities with fixed maturities					 Other
844,365(4) Current assets — other (short-term loans receivable)
37,196				 Total		
$1,950,725
4. See Note 7 for scheduled repayments of long term debt.

50

JSR Corporation Annual Report 2013

$2,127
—

$—
—

$—
—

$

93,386
977,905——$2,127

—
—
$—

—
—
$—

844,365
37,196$1,952,852

BUSINESS
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GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

6. Short-term investment securities and Investment Securities(1) The following tables summarize the acquisition cost and book value of available-for-sale securities with available fair value as ofMarch 31, 2012 and 2013:(a) Securities with book value exceeding acquisition cost					Millions of yen

					
					

Equity securities

2012
Acquisition cost

Book value

Difference¥ 9,122¥16,119¥ 6,997

					Millions of yen
2013

					
					

Equity securities

Acquisition cost

Book value

Difference¥ 9,026¥22,517¥13,491					Thousands of U.S. dollars
2013

					
					

Equity securities

Acquisition cost

Book value

Difference$95,970$239,418$143,448(b) Securities with book value not exceeding acquisition cost					Millions of yen

					
					

Equity securities

2012
Acquisition cost

Book value¥ 2,809¥2,437					Equity securities

2013
Book value

Difference¥ 2,782¥ 2,338¥ (444)

Thousands of U.S. dollars
2013

					

Equity securities(372)

Acquisition cost

					
					

¥

Millions of yen

					
					

Difference

Acquisition cost

Book value$29,584$240,860

Difference$(4,724)(2) Total sales of available-for-sale securities sold and the related gains and losses for the years ended March 31, 2012 and 2013 are as
follows:
					
					

				

			
Millions of yen		

Thousands of
U.S. dollars

		
2012
2013
2013

Total sales		

¥29

¥341

$ 3,623

Gain				

10

223

2,375

Loss				

—

(9)

(95)

JSR Corporation Annual Report 2013

51

7. Short-Term Loans Payable and Long-Term Loans Payable
Short-term loans payable represent primarily overdrafts from banks bearing interest at 0.8% and 0.7% per annum (weighted average interest rate) at March 31, 2012 and 2013, respectively.
Long-term loans payable at March 31, 2012 and 2013 consisted of the following:		
					
					

				

			
Millions of yen		

Thousands of
U.S. dollars

		
2012
2013
2013

Loans principally from banks and insurance companies due through2019 with interest rates 0.9% and 1.7% per annum			(weighted average interest rate) in 2012 and 2013, respectively:
		 Secured			
		 Unsecured										Less amount due within one year									

¥

1
1,506
1,507
(1,007)
¥ 500

¥

1
6,625
6,626
—
¥6,626$

11
70,43770,448—$70,448

At March 31, 2013, property, plant and equipment, at book value of ¥7,008 million ($74,521 thousand) were pledged as collateralfor secured loans.
The annual maturities of long-term debt at March 31, 2013 were as follows:

Millions of yen

Thousands of U.S. dollars

Year ending March 31,

Long-term loans
payableLong-term loans
payable2014				2015				2016				2017				2018				2019 and thereafter
					

—
¥ 716
1,225
1,725
1,225
1,735
¥6,626—$ 7,615
13,026
18,34313,026
18,438$70,448

52

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

8. Employees’ Severance and Retirement Benefits
Provision for retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2012 and 2013 consisted of the following:													Millions of yen								

Projected benefit obligation
Less fair value of pension assets
Unfunded retirement benefit liabilities
Unrecognized actuarial differences
Net retirement benefit liabilities
Provion for retirement benefits

Thousands of
U.S. dollars

2012

2013

2013

¥49,994(34,768)
15,226(1,259)13,967¥13,967¥50,080(35,310)
14,770441
15,211¥15,211$532,480(375,439)
157,041
4,696
161,737$161,737

Included in the consolidated statements of income for the years ended March 31, 2012 and 2013 were retirement benefit expenses
consisting of the following:															Millions of yen

					Service costs-benefits earned during the year		Interest cost on projected benefits obligation		
Expected return on plan assets		
Amortization of actuarial differences		
Retirement benefit expenses		

Thousands of
U.S. dollars

2012

2013

2013

¥1,984
940
(278)
(125)
¥2,521¥1,849
810
(234)
1,259
¥3,684$19,658
8,615(2,490)13,386$39,169

The discount rates used by the Companies for the years ended
March 31, 2012 and 2013 are mainly 1.8% and 1.6%, respectively. The rates of expected return on plan assets used by theCompanies for the years ended March 31, 2012 and 2013 aremainly 0.9% and 0.7%, respectively. The estimated amount of
all retirement benefits to be paid at the future retirement date isallocated equally to each service year using the estimated numberof total service years.

9. Income Taxes

Consequently, the statutory income tax rate utilized for deferred tax assets and liabilities expected to be settled or realized
in the period from April 1, 2012 to March 31, 2015 is 38.0% andfor periods subsequent to March 31, 2015 is 35.6%.
The following table summarizes the significant differences
between the statutory income tax rate and the Companies’ effective tax rates for financial statement purposes for the years ended
March 31, 2012 and 2013:

Income taxes in the accompanying consolidated statements ofincome comprise corporation, enterprise and inhabitants’ taxes.
The statutory income tax rate was approximately 38.0%.
Amendments to the Japanese tax regulations were enacted
into law on December 2, 2011. As a result of these amendments,
the statutory income tax rate will be reduced from 40.7% to38.0% effective from the year beginning April 1, 2012, and to35.6% effective from the year beginning April 1, 2015, thereafter.

							

2012

2013

Statutory income tax rate		
Equity in earnings of affiliated companies		
Tax credit on research and development costs		
Lower tax rates for foreign consolidated subsidiaries		
Valuation allowance		
Effect of enacted changes in tax laws and rates on Japanese tax		
Other				Effective tax rate		

40.7%
(4.7)
(3.4)
(2.2)
2.7
2.2
0.6
35.9%

38.0%
(4.2)
(3.5)
(4.3)
2.4
—
0.9
29.3%

JSR Corporation Annual Report 201353

Significant components of the Companies’ deferred tax assets and liabilities as of March 31, 2012 and 2013 were as follows:													Millions of yen								

Thousands of
U.S. dollars

2012

2013

2013

Deferred tax assets:
Provision for retirement benefits
Loss carried forward
Accured bonuses
Impairment loss
Unrealized gain on sale of inventories
Unrealized gain on sale of noncurrent assets
Provision for environmental measures
Other					Sub-total		
Valuation allowance
Total deferred tax assets¥ 4,925
2,162
1,527
1,543
825
842
962
3,336
16,122(2,983)
13,139¥ 5,402
2,956
1,518
1,267
1,179
916
748
3,644
17,630(3,911)
13,719$ 57,440
31,435
16,137
13,474
12,535
9,742
7,954
38,733
187,450(41,579)
145,871

Deferred tax liabilities:
Unrealized gains on securities
Deferred gain on sales of noncurrent assets
Other			Total deferred tax liabilities
Net deferred tax assets(2,358)(3,163)(909)(6,430)¥ 6,709(4,712)(3,060)(1,290)(9,062)¥ 4,657(50,097)(32,539)(13,716)(96,352)$ 49,519

10. Gain on Sales of Noncurrent Assets
Gain on sales of noncurrent assets for the year ended March 31, 2012 and 2013 was as follows:															Millions of yen

					Land					Thousands of
U.S. dollars

2012

2013

2013

¥4,288¥—$—

11. Impairment loss of Noncurrent Assets
The Companies recognized impairment losses on the following group of noncurrent assets for the year ended March 31, 2012 and 2013.
												Millions of yen

					
2012
				
				
Use
Location
Land

Assets for fine chemical business
Manufacturing facilities for elastomers

Hidaka City, Saitama Prefecture
Yokkaichi City, Mie Prefecture¥1,141—

Buildings andstructures

¥225
104

Machinery, 		equipment and		
vehicles
Other

¥ —
448

¥—
2

Total

¥1,366554

The Companies did not recognize impairement loss of noncurrent assets for the year ended March 31, 2013.
The Companies have grouped their noncurrernt assets intobusiness units. Noncurrent assets that are idle or not being used
for business activities are assessed individually. The book value of
noncurrent asset was written down to its recoverable value.

12. Loss on Disasterhad been inactive by Great East Japan Earthquake.
For the year ended March 31, 2013, the Companies did notrecognize loss on disaster.

Loss on disaster for the year ended March 31, 2012, mainly included expenses relevant to facilities (mainly at Kashima Plant) that54

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

13. Comprehensive Income
Amounts reclassified to net income in the current period that were recognized in other comprehensive income in the current or previous
periods and tax effects for each component of other comprehensive income were as follows:																			Millions of yen			

Thousands of
U.S. dollars							

2012

2013

2013

Unrealized gains in securities:
		Occurrence amount		Recycling				
Total			

¥518
21
¥539

¥ 6,832(205)¥ 6,627$ 72,649(2,182)$ 70,467

Foreign currency translation adjustments
		Occurrence amount		
Total			

¥(619)¥(619)¥ 5,756¥ 5,756$ 61,200$ 61,200¥ 2,046¥ 2,046$ 21,753$ 21,753¥14,429¥ (2,354)¥12,075$153,420$ (25,024)$128,396

Share of other comprehensive income of associates accounted for using equity method		Occurrence amount¥(454)
		
Total			
¥(454)
Total other comprehensive income before tax¥(534)Tax effect			
¥ 115
Other comprehensive income, net of tax¥(419)All tax effect of other comprehensive income arise from unrealized gains on securities.

14. Net Assets
Under the Japanese laws and regulations, the entire amount paid
for new shares is required to be designated as common stock.
However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price ofthe new shares as additional paid-in capital, which is included incapital surplus.
Under the Japanese Corporate Law (“the Law”), in the casewhere a dividend distribution of surplus is made, the smaller ofan amount equal to 10% of the dividends or the excess, if any, of
25% of common stock over the total of additional paid-in capitaland legal earnings reserve must be set aside as additional paid-in
capital or legal earnings reserve. Legal earnings reserve is included
in retained earnings in the accompanying consolidated balance
sheets.

Additional paid-in capital and all legal earnings reserve may betransferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends. The maximum
amount that the Company can distribute as dividends is calculated
based on the non-consolidated financial statements of the Company in accordance with the Japanese laws and regulations.
At the annual shareholders meeting held on June 21, 2013,
the shareholders resolved cash dividends amounting to ¥4,037
million ($42,922 thousand). Such appropriations have not been
accrued in the consolidated financial statements as of March 31,
2013. Such appropriations are recognized in the period in which
they are resolved.
On February 4, 2013, the Company retired 17.9 million sharesof treasury stock by the resolution of the Board of Directors at themeeting held on January 28, 2013.

JSR Corporation Annual Report 201355

15. Stock Option Plans
The shareholders of the Company approved the issuance of stock options to the directors and the executive officers of the Company as follows:
Date of resolution of the general shareholders’ meeting
The maximum number of shares to be issued
Exercisable period of stock options
		
Stock subscription rights which have been vested
outstanding as of March 31, 2013
Exercise price per share		June 17, 2005
62,500 shares
From June 18, 2005
to June 17, 2025

June 16, 2006
39,100 shares
From August 2, 2006
to June 16, 2026

June 15, 2007
48,500 shares
From July 11, 2007
to July 10, 2027

37,500 shares
¥1
$0.01

28,000 shares
¥1
$0.01

45,600 shares
¥1
$0.01

Date of resolution of the general shareholders’ meeting
The maximum number of shares to be issued
Exercisable period of stock options
		
Stock subscription rights which have been vested
outstanding as of March 31, 2013
Exercise price per share		June 13, 2008
73,900 shares
From July 16, 2008
to July 15, 2028

June 16, 2009
80,200 shares
From July 15, 2009
to July 14, 2029

June 18, 2010
84,200 shares
From July 14, 2010
to July 13, 2030

69,900 shares
¥1
$0.01

80,200 shares
¥1
$0.01

84,200 shares
¥1
$0.01

Date of resolution of the general shareholders’ meeting
The maximum number of shares to be issued
Exercisable period of stock options
		
Stock subscription rights which have been vested
outstanding as of March 31, 2013
Exercise price per share		June 17, 2011
81,000 shares
From July 13, 2011
to July 12, 2031

June 15, 2012
95,200 shares
From July 11, 2012
to July 10, 2032

81,000 shares
¥1
$0.01

95,200 shares
¥1
$0.01

The compensation cost recognized for these stock options for the years ended March 31, 2012 and 2013 was ¥111 million and ¥107
million ($1,133 thousand) respectively, and was included in selling, general and administrative expenses in the consolidated statements ofincome.

16. Derivative Transactions(1) Qualitative disclosure about derivatives
The Companies enter into foreign exchange forward contracts,
foreign currency swap contracts and interest rate swap contracts as derivative financial instruments. The Companies deal
with foreign exchange forward transactions to hedge exchange
rate risks of trade receivables and payables denominated inforeign currency. Foreign currency swap transactions are madein order to mitigate foreign exchange risks on loans receivable
denominated in foreign currencies. Interest rate swap transactions are made in order to reduce interest rate risks on loans
payable.
The Companies do not enter into derivatives for speculativetransaction purposes. Hedge accounting is used for interest
rate swaps in the case where there is a high degree of correlation between the hedging instruments and the hedged items.
(2) Quantitative disclosure about derivatives
The following contract amounts are only nominal or notionalamounts of derivatives, and do not necessarily indicate themagnitude of market risk associated with the derivative transactions.

56

JSR Corporation Annual Report 2013

Significant conditions surrounding hedging instruments are
the same as those for the items hedged, the risks of which will
likely continue to be hedged through hedge transactions.
Foreign exchange forward contracts and foreign currency
swaps that the Companies entered have risks due to fluctuations in foreign exchange rates. Interest rate swap contracts
that the Companies entered have risks due to fluctuations ininterest rates. Due to the fact that counterparties to the Companies represent major financial institutions that have highcreditworthiness, the Companies believe that the overall credit
risk related to its financial instruments is insignificant.
Derivative transactions are executed and controlled basedon the Companies’ internal rules and are approved by the
responsible officials. The balances of such transactions withcounterparties are periodically confirmed.

Contract amounts, market values and recognized gains orlosses on the derivative transactions, except those accounted
for using hedge accounting, at March 31, 2012 and 2013
were as follows:

BUSINESS
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GOVERNANCE
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CORPORATE DATA
63-64

FINANCIAL
31-62(a) Related to currencies					Millions of yen																	Contract amountOver one year
Market value

March 31, 2012:
Items not traded on exchanges
		 Foreign exchange forward contracts
			Selling:				 U.S. Dollars
				Euro			Buying:
				U.S. Dollars
				Euro
				Swiss Franc
				Australian dollar
		 Foreign currency swaps
			 receiving Japanese Yen paying, Taiwan dollar				 Total¥4,467
587

¥

223
59
21
—
1,806
¥ —

¥

—
—

¥ 4,525611¥ (58)
(24)

—
—
—
—

224
63
22
—

1
4
1
—

410
—

410
¥ 334

—
—

					

¥
Millions of yen																	Contract amountOver one year
Market value

March 31, 2013:
Items not traded on exchanges
		 Foreign exchange forward contracts
			Selling:
				U.S. Dollars
				Euro			Buying:
				U.S. Dollars
				Euro
				Swiss Franc
				Australian dollar
		 Foreign currency swaps
			 receiving Japanese Yen paying, Taiwan dollar
			Total¥1,829
605

¥

619
79
19
2
¥¥

—
—

¥¥

					

Recognized
gains or losses——¥ 1,920641¥ (91)
(36)

—
—
—
—

620
78
19
2

1
(1)
0
0

—
—

—
4¥ (127)——¥¥

Thousands of U.S. dollars																	Contract amountOver one year
Market value

March 31, 2013:
Items not traded on exchanges
		 Foreign exchange forward contracts
			Selling:
				U.S. Dollars
				Euro			Buying:
				U.S. Dollars
				Euro
				Swiss Franc
				Australian dollar
		 Foreign currency swaps
			 receiving Japanese Yen paying, Taiwan dollar
				Total

Recognized
gains or losses$19,446
6,437

$

6,581
843
197
17
$

—
—

$

Recognized
gains or losses——$20,4126,824$ (966)
(387)

—
—
—
—

6,590
833
200
17

9
(10)
3
0

—
—

—
$(1,351)——$

Market values are calculated using foreign exchange forward rates.

JSR Corporation Annual Report 201357

(b) Related to interests						

Millions of yen

					Over one year

March 31, 2012:
Special treatment for interest rate swaps
Interest rate swaps (paid floating / received fix)
(Hedged item: Short-term loans payable)
		 Total

Contract amount¥ 1,000¥ 1,000¥¥——						

Millions of yen					Contract amountOver one year

¥ 6,126¥ 6,126¥ 6,126¥ 6,126

March 31, 2013:
Special treatment for interest rate swaps
Interest rate swaps (paid fix / received floating)(Heaged item: Long-term loans payable)
		Total						

					
March 31, 2013:
Special treatment for interest rate swaps
Interest rate swaps (paid fix / received floating)(Heaged item: Long-term loans payable)
		TotalMarket value¥5¥5Market value¥ (120)¥ (120)Thousands of U.S. dollars

Contract amountOver one year

$65,131$65,131$65,131$65,131

Market value$(1,272)$(1,272)

17. Contingent Liabilities
At March 31, 2013, the Company and certain consolidated subsidiaries were contingently liable as guarantors for loans of employees andothers in the amount of ¥11 million ($117 thousand).

18. Research and Development Expenses
Research and development expenses of the Companies for the years ended March 31, 2012 and 2013 were, ¥ 17,373 million and¥19,458 million ($206,894 thousand), respectively, which are included in selling, general and administrative expenses or manufacturingcosts.

58

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

19. Segment Information
The Companies’ business segments are classified into the following three business segments: (1) Elastomers business, (2) Plastics business,and (3) Fine chemicals and other products business.
A summary of net sales, costs and expenses, operating income, identifiable assets, depreciation, impairment loss and capital expenditures by segment of business activities for the years ended March 31, 2012 and 2013 were as follows:					Millions of yen																														
Elastomers
Plastics

Fine			chemicals		and other		
products
Total
Reconciliation

For 2012:
Sales to external customers		
¥180,835
Inter-segment sales/transfers		
4,887
Sales total			185,722
Operating income		¥ 19,358
Identifiable assets		¥181,673
Depreciation and amortization		
8,377
Impairment loss		
554
Capital expenditures		
9,642
Amortization of goodwill		—Goodwill				—¥117,876—
117,876¥ 14,468¥106,706
8,074
1,366
9,051
—
—

¥51,236—
51,236¥ 2,138¥34,146
1,333
—
1,035
44
753

					

For 2013:
Sales to external customers		
Inter-segment sales/transfers		
Sales total			Operating income		
Identifiable assets		
Depreciation and amortization		Impairment loss		Capital expenditures		
Amortization of goodwill		Goodwill				¥349,947
4,887
354,834¥ 35,964¥322,525
17,784
1,920
19,72844753

Consolidated¥—(4,887)(4,887)¥—¥108,168—————¥349,947—
349,947¥ 35,964¥430,693
17,784
1,920
19,72844753¥—(5,039)(5,039)¥—¥107,940—————¥371,487—
371,487¥ 35,206¥482,935
19,145—27,60844708—(53,576)(53,576)$—$1,147,688
—
—
—
—
—

$3,949,890—
3,949,890$ 374,335$5,134,877
203,563—
293,547471
7,532

Millions of yen¥195,797
5,039
200,836¥ 17,923¥214,427
7,714—
14,154——¥51,759—
51,759¥ 2,962¥35,961
1,144
—
855
44
708

									For 2013:
Sales to external customers		 $2,081,841
Inter-segment sales/transfers		
53,576
Sales total			 2,135,417
Operating income		 $ 190,570
Identifiable assets		 $2,279,926
Depreciation and amortization		
82,022
Impairment loss		—Capital expenditures		
150,495
Amortization of goodwill		—Goodwill				—$550,332—
550,332$ 31,499$382,366
12,163
—
9,095
471
7,532

¥123,931—
123,931¥ 14,321¥124,607
10,287—
12,599——¥371,487
5,039
376,526¥ 35,206¥374,995
19,145—27,60844708

Thousands of U.S. dollars$1,317,717—
1,317,717$ 152,266$1,324,897
109,378—
133,957——$3,949,890
53,576
4,003,466$ 374,335$3,987,189
203,563—
293,547
471
7,532

$

Assets in reconciliation are related mainly to Cash, Short-term investment securities and Investment securities of the Company.

JSR Corporation Annual Report 201359

Geographic segment information with respect to net sales for the years ended March 31, 2012 and 2013 were as follows:							

Millions of yen							For 2012:			
For 2013:						¥196,470

Japan¥196,470¥196,966¥153,477

Others¥153,477¥174,521¥349,947								Thousands of U.S. dollars$2,094,267

For 2013:			

Total¥349,947¥371,487$1,855,623$3,949,890

The geographical segments consist of Japan and Others. Japan has been divided as independent segments considering the materialityof the sales. Main countries included in Others segment were as follows;
Korea, China, Taiwan, Thailand, United States, Belgium
Geographic segment information with respect to property, plant and equipment for the years ended March 31, 2012 and 2013 wereas follows:							

							For 2012:			
For 2013:			

Millions of yenJapan¥69,317¥68,247

Thailand¥ 969¥13,725								For 2013:			

$725,658

Others¥10,218¥11,233

Total¥80,504¥93,205

Thousands of U.S. dollars$145,928$119,432$991,018

The geographical segments consist of Japan, Thailand and Others. Japan and Thailand have been divided as independent segments
considering the materiality of the property, plant and equipment. Main countries included in Others segment were as follows;
Korea, China, Taiwan, United States, Belgium
Major customer information with respect to sales for the years ended March 31, 2012 and 2013 were as follows:																				For 2012:			
For 2013:											Segment
Elastomers
Elastomers

			For 2013:			

60

Customer Name
BRIDGESTONE Corporation
BRIDGESTONE Corporation

JSR Corporation Annual Report 2013

BRIDGESTONE Corporation

Elastomers

Millions of yen

Sales¥40,527¥39,890
Thousands of U.S. dollars$424,137

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

20. Related Parties(1) Related party transactions
Significant transactions and balances with related parties as of and for the years ended March 31, 2012 and 2013 were as follows:													Millions of yen		

Thousands of
U.S. dollars										

2012

2013

BRIDGESTONE Corporation (a major shareholder):Sales						Notes and accounts receivable—trade, net		

¥40,090
17,382¥39,522
16,998$420,225
180,731

Tobu Butadiene Co., Ltd. (an affiliated company):
Purchases			
Notes and accounts payable—trade		Supply of raw material gas		
Accounts receivable—other		

11,152
6,251
9,421
5,212

14,393
7,131
11,723
6,884

153,034
75,820124,642
73,193

KRATON JSR Elastomers K.K. (an affiliated company):
Purchases			
Notes and accounts payable—trade		Supply of raw material gas		
Accounts receivable—other		

9,930
5,083
4,015
2,515

10,385
5,573
4,945
3,154

110,423
59,25852,57433,535

Japan Butyl Co., Ltd. (an affiliated company):
Purchases			
Notes and accounts payable—trade		

12,1902,594

13,495
5,457

143,486
58,0192013(2) Significant Affiliates
Condensed financial information for significant affiliate for the years ended March 31, 2012 and 2013 were as follows:													Millions of won												Thousands of
U.S. dollars

2012

2013

Kumho Polychem Co., Ltd.
Total current assets		
w155,672
Total noncurrent assets		 17,382152,975

w162,145
240,129$146,198
216,51373,573
12,16885,693
9,899

77,265
8,926

Total net assets		 6,251222,906

306,682

276,520

Net sales				 9,421403,243
Income berore income taxes		 5,212142,911
Net income			 5,212110,630

430,827
136,237
105,648

388,455
122,838
95,258

Total current liabilities		
Total noncurrent liabilities		

The translations of the Korea won amounts into U.S. dollars areincluded solely for the convenience of readers outside Japan,
using the prevailing exchange rate at March 31, 2013, which was
1,109.08 won to U.S.$1.00. The convenience translations should2013

not be construed as representations that the Korea won amounts
have been, could have been, or could in the future be, converted
into U.S. dollars at this or any other rate of exchange.

21. Subsequent Events
At the June 21, 2013 annual meeting, the Companies’ shareholders approved the following appropriations of retained earnings: Paymentof a year-end cash dividend of ¥17.00 per share aggregating ¥4,037 million ($42,922 thousand).
JSR Corporation Annual Report 201361

Independent Auditors’ Report

62

JSR Corporation Annual Report 2013

BUSINESS
02-17

GOVERNANCE
18-30

CORPORATE DATA
63-64

FINANCIAL
31-62

Corporate Data
(As of March 31, 2013)

JSR Corporation
Established
December 10, 1957
Capital (Common Stock)¥23,320 million ($248 million)
Employees
5,659
Closing date
JSR books are closed on March 31, each year.

Ordinary General Meeting of Shareholders
The annual general meeting of shareholders is held in June eachyear. The 2013 annual general meeting was held on June 21,
2013.
Transfer Agent and Register
The Chuo Mitsui Trust and Banking Co., Ltd.
Auditors
KPMG AZSA & Co.

Shareholders Information (As of March 31, 2013)
Stock Listing
Tokyo Stock Exchange, Osaka Securities Exchange
Number of Shares Issued
237,973,205 shares
Number of Shareholders
20,068

Common stock price range(Yen/share: Tokyo Stock Exchange)

Major Shareholders
Percentage Number ofof shares shares held
held (%) (thousands)

Bridgestone Corporation
Japan Trustee Services Bank, Ltd. (Trust Account)
The Master Trust Bank of Japan, Ltd. (Trust Account)
The Chase Manhattan Bank 385036
The Master Trust Bank of Japan, Ltd. (Trust Account)(Number of Retirement Allowance Trust Shares ofMitsubishi Chemical Corporation)
Mizuho Corporate Bank, Ltd.
Nippon Life Insurance Company
SSBT OD05 OMNIBUS ACCOUNT-TREATY CLIENTSState Street Bank and Trust Company 505225
Meiji Yasuda Life Insurance Company

16.36
5.81
4.85
2.73

38,866
13,79911,535
6,496

2.20
2.15
1.76
1.65
1.61
1.52

5,236
5,125
4,199
3,940
3,839
3,631

* 515,440 shares of treasury stock held by the Company are not included in theabove breakdown of major shareholders.

		High
FY2004Low
High
FY2005Low
High
FY2006Low
High
FY2007Low
High
FY2008Low
High
FY2009Low
High
FY2010Low
High
FY2011Low
High
FY2012Low
High
FY2013
Low

1st Q
1,477
1,141
2,520
1,892
2,395
2,000
3,710
2,535
2,985
2,540
2,460
2,000
1,687
1,162
1,999
1,436
1,724
1,413
1,695
1,255

2nd Q
2,080
1,429
2,180
1,655
2,635
2,175
2,930
2,280
3,120
2,445
2,180
1,246
1,960
1,561
1,666
1,201
1,655
1,221
1,455
1,274

3rd Q
2,540
1,795
2,265
1,790
3,150
2,370
3,170
2,505
3,020
2,465
1,397
795
1,959
1,545
1,543
1,341
1,582
1,218
1,644
1,224

4th Q
2,435
2,055
2,255
2,040
2,810
3,040
3,240
2,530
2,875
1,886
1,312
990
1,974
1,714
1,875
1,183
1,790
1,408
1,994
1,670

Composition of Shareholders
Shareholders											

Shares held
(thousands)

Individuals and others
Foreign corporations and individuals
Other domestic corporations
Financial institutions
Securities companies
Total				16,93484,79853,255
81,142
1,842
237,973

By Type of Shareholders
Foreigninvestors

35.63%

Financial
institutions& securities
companies

34.87%

19,260
414
263
88
43
20,068

2,500

2,000

1,500

By Number of Shares Held
Less than 1
trading unit

0.02%

1,000 trading
units or more

1,000

90.11%

1 tradingunit or more

500

4.19%

0
’09/3

Individuals/ Other domestic
otherscorporations

7.12%

22.38%

50 trading
units or more

3.96%

’09/9

’10/3

’10/9

’11/3

’11/9

’12/3

’12/9

’13/3

JSR Corporation Annual Report 2013

63

500 trading
units or more

1.72%

Directors, Corporate Auditors, and Officers
As of June 21, 2013

Directors and Corporate Auditors
Mitsunobu Koshiba

Takuya Goto

Corporate Auditors:

Representative Director and President

Outside Director

Shoichi Kataoka

Hozumi Sato

Michio Kariya

Representative Director

Outside Director

Yoshinori Yoshida

Kazunori Yagi

Director, Executive Advisor

Outside Director

Standing Corporate Auditor

Kenji Ito
Corporate Auditor (Outside)

Hiroichi Uekusa
Corporate Auditor (Outside)

Hayato Hirano
Director

Officers (* Directors)
Hozumi Sato*

Executive Vice President
Research and Development, Strategic Businesses
Chairman of J&W Beijing Biotech Co., Ltd.

Koichi Kawasaki

Managing Officer
Petrochemicals Sector (including Plastics),
Safety and Environment Affairs,
General Manager of Petrochemical Products Div.,
President of Japan Butyl Co., Ltd.,
President of KRATON JSR ELASTOMERS K. K.

Hisao Hasegawa

Managing Officer
Manufacturing and Technology, Product Safety andQuality Assurance, Procurement, Logistics,
IT Strategy
General Manager of Manufacturing andTechnology Group,
President of Tobu Butadiene, Co., Ltd.

Yasuhisa Nagahiro

Managing Officer
Display Materials Business, Optical Materials
Business

Atsushi Kumano

Senior Officer
Research & Development (deputy),
General Manager of R&D Department

Takatoshi Nagatomo

Eric Johnson

Takeshi Sugimoto

Eiichi Kobayashi

OfficerPresident of JSR BST Elastomer Co., Ltd.

Officer
Electronic Materials Business
General Manager of Electronic Materials Division
and General Manager of Lithography Materials
Department

Tsuyoshi Watanabe

Makoto Doi

Hayato Hirano*

Takao Shimizu

Officer
CSR, Accounting and Finance,
Corporate Communications,
General Manager of Group Companies Coordination
Department

Katsuya Inoue

OfficerBusiness Planning, Fine Chemical Business,
General Manager of Business Planning,
Fine Chemical Business

Fumio Tsutsumi

Senior Officer
President of JSR Micro Korea Co., Ltd.

Kazuyoshi Nakazawa

Kazumasa Yamawaki

Senior Officer
Yokkaichi Plant Manager

64

JSR Corporation Annual Report 2013

Officer
Strategic Businesses, Precision Materials andProcessing and Lithium Ion Capacitors (deputy)
General Manager of Precision Materials andProcess Division, President of JM Energy
Corporation

Officer
Strategic Business, Biomedical Materials(deputy)
Executive Member of MEDICAL & BIOLOGICALLABORATORIES CO., LTD.

Officer
Strategic Businesses, Performance Chemicals (deputy)
General Manager of Performance Chemicals Division
and General Manager of Department II

Nobuo Kawahashi

OfficerPresident of JSR Micro, Inc.

Officer
General Manager of Department for Global
Business Alliance

Officer
Legal, General Affairs
General Manager of Legal Department

Officer
Corporate Planning
General Manager of Corporate Planning Department

Tsutomu Shimokawa

Officer
Yokkaichi Research Center
General Manager of Yokkaichi Research Center,
General Manager of Advanced Materials ResearchLaboratories

Yoshio Shiota

Officer
Human Resources
General Manager of Human Resource Development
Department

BUSINESS
02-17

GOVERNANCE
18-30

FINANCIAL
31-62

CORPORATE DATA
63-64

JSR Corporation Annual Report 201365

JSR Corporation Annual Report 2013

Shiodome Sumitomo Bldg.
1-9-2 Higashi-Shinbashi, Minato-ku,
Tokyo
105-8640, Japan
Telephone: +81-3-6218-3500
Facsimile: +81-3-6218-3682

This annual report was printed with vegetable-based ink on FSC-certified paper

Printed in Japan 2013, 6E500