ANNUAL REPORT 2009
For the year ended March 31, 2009

Profile
JSR Corporation (formerly ‘Japan Synthetic Rubber Co., Ltd.’) was established in 1957 with the aim to commence
the domestic production of synthetic rubber. Since then, JSR has continued to expand its business to manufacture
emulsions and plastics. JSR further expanded in its operations by utilizing the group’s own polymer technologies tointroduce products such as semiconductor materials, display materials and optical materials. As such, the developments of these materials in the fields of information and electronics have been a focal point, leading to innovativechanges to the company’s business structure.
Currently, JSR Corporation’s four-year Midterm Business Plan “JUMP2010” (which began in fiscal 2008) is being implemented. “JUMP2010” are ideal goals set for JSR to achieve by 2010; taking a big “jump” towards expediting thechanges made to business and the structure, and aiming to take further leaps. In addition to further enhancing global
competitiveness with existing projects, JSR will continue to provide our “innovative materials” and “high-precision
processing technology and products” to newly-emerging fields in environment, energy, biotechnology and medicare,
as well as in the areas of information and electronics, which are expected to continue to grow in the future.

Contents
1 ■ Corporate Philosophy, Management Policies & Corporate Slogan
2 ■ Consolidated Financial Highlights
4 ■ At a Glance
6 ■ To Our Shareholders
8 ■ Interview with the President
12 ■ Review of Operations / Fine Chemicals and Other ProductsReview of Operations / Petrochemical Materials
14
14 ■ Elastomers
16 ■ Emulsions
17 ■ Plastics
18 ■ Research and Development, Intellectual Property
21 ■ The JSR Corporate Social Responsibility Report
22 ■ Corporate Governance and Compliance
25 ■ Financial Section
48 ■ Independent Auditors’ Report
49 ■ Company Network
50 ■ Corporate Data
51 ■ Investor Information

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 the company‘s control could cause actual results to differ materially from those projected by the management.

■ Corpora te Philosophy“To provide new materials,
and through their value strive to contributeto the realization of an affluent human society(people, society, and the environment).”■ M anagement Policies• Persistently challenge “revolution”, constantly “evolve” globally,and strive to be a technology oriented company.
• Pursue efficient, transparent and wholesome management and strive
to be a company trusted by stakeholders.
• Practice Responsible Care for the future of the world.

■ Corpora te Slogan

In commemoration of the 50th anniversary of its foundation, JSR has made its corporate slogan. “Withchemistry, we can.” appeals our technological strengths to make possible by chemistry what appears to
be impossible and shows our corporate vision to pursue cutting-edge technologies to create newvalues, provide solutions to our customers and society, and keep meeting challenges for the future.
The corporate slogan shows the scope of our business domains in a clearer way and supplements
our corporate philosophy “Materials Innovation”. Under the new corporate slogan, we endeavor toenhance our corporate brand.

ANNUAL REPORT 20091

Consolida te d Financial Highlights

Fiscal Years ended March 31
FY2000FY2001

FY2002

FY2003

Millions of Yen
FY2004

Results for the year
Net sales
Net Sales(Billions of Yen)400

¥ 231,823¥ 220,058¥ 247,139¥ 275,071

212,860

222,400

211,246

226,345

242,452

Operating income

6,632

9,423

8,812

20,79432,619

355

591

411

431

397

(1,265)

(946)

(757)

(750)

(693)

2,545

9,332

7,915

17,85530,378Interest and dividend income

300

Interest expenses

200

Income before income taxes
and minority interests

100
0¥ 219,492

Costs and expenses

FY’05 FY’06 FY’07 FY’08 FY’09

Net income

2,243

5,678

4,728

10,991

19,353

Capital expenditures

12,317

10,936

13,265

16,04817,156

Depreciation

17,884

17,59916,507

16,48914,970Total assets

293,477

283,859

270,054281,874

308,581Long-term debt due after one year

24,76024,222

22,93424,20813,920169,186

155,476

135,477

139,682

146,280

Year-end financial position

Operating Income / Operating Margin(Billions of Yen)(%)

Total liabilities

80

16

Equity121,198

124,684

131,752

139,447

159,49760

12

Current ratio (times)

1.3

1.4

1.5

1.6

1.6

Return on assets (%)

0.8

2.0

1.8

3.9

6.3

40

8

20

4

0

0

FY’05 FY’06 FY’07 FY’08 FY’09
Operating Income (Left)
Operating Margin (Right)

Return on equity (%)

1.9

4.6

3.6

7.9

12.9

Equity ratio (%)

41.3

43.9

48.8

49.5

51.7

75.12

Per share of common stock (Yen and U.S. Dollars)
Net income

8.67

22.20

18.48

42.46

Cash dividends

6.00

6.00

6.00

7.00

9.00

473.80487.42514.93544.94623.14EquityNet Income(Billions of Yen)

Note: U.S. dollar amounts are translated from yen, for convenience only, at therate of ¥98.23=$1, the exchange rate prevailing at March 31, 2009.

2003–2004

40

▼

30

HOP

20

JSRevolution

10
0

FY’05 FY’06 FY’07 FY’08 FY’09

The period for establishing a solid foundationin order to promote
structural reform andachieve growth.

Net Sales:¥275.1 billion
Operating Income:¥32.6 billion

2

JSR Corporation

FY2005

FY2006

FY2007

FY2008FY2009Thousands of
U.S. Dollars
FY2009¥ 305,368¥ 338,160¥ 365,831¥ 406,968¥ 352,503$3,588,547

260,035

284,803

310,588346,958

322,155

3,279,603

45,33353,35755,24360,01030,348308,944

519

635

1,030

1,309

1,230

12,519

(475)

(420)

(399)

(256)

(271)

(2,757)43,47149,03853,44054,86720,803211,780

27,56430,55533,65536,994

13,981

142,331

18,13423,36122,09429,076

19,081

194,254

15,245

16,20618,133

21,18024,833

252,806

325,031

381,097

408,949

416,951

339,498

3,456,152

13,857

1,607

2,745

1,525

1,500

15,270139,249

164,389

168,963

159,288

97,512992,690

182,476

212,751

235,186

252,539

240,896

2,452,376

Shareholders’ Equity / ROE(Billions of Yen)

(%)

300

18

200

12

100

6

0

0

FY’05 FY’06 FY’07 FY’08 FY’09
Shareholders’ Equity (Left)
ROE (Right)

Total Assets / ROA(Billions of Yen)

(%)

500

15
12

1.8

1.7

1.8

1.9

2.5

400

8.7

8.7

8.2

14.8

4.1

300

9

5.7

200

6

71.0

100

3

15.5

16.1

55.8

56.1

15.0
57.5

15.2
60.6

0

FY’05 FY’06 FY’07 FY’08 FY’09
Total Assets (Left)
ROA (Right)

107.54119.63133.10147.26

56.36

14.00

20.00

24.00

32.00

32.00

0.33

717.13

836.31

932.47

1,009.27

986.33

10.04

0.57

R&D Expenses / Capital Expenditures(Billions of Yen)

JUMP

20

▼
▼
▼

2008–2011▼▼

2005–2007

JSRevolution II

JUMP2010

The period for creating operationalfoundations for next-stage growthbusiness and increasing profits forexisting business.

The period for accelerating reform
and innovation to achieve a jump
forward while continuing growth.

STEP

30

10

0

FY’05 FY’06 FY’07 FY’08 FY’09
R&D Expenses

Capital Expenditures

Revised in April 2009
Net Sales:¥365.8 billion
Operating Income:¥55.2 billion

Net Sales:
Over ¥360 billion yen
Operating Margin:
10% or higher

ANNUAL REPORT 200930

A t a Glance

Segment

Proportionof SalesFine Chemicals andOther Products
Information electronics materials,
mainly for semiconductors and flat
panel displays, are the largest component of this segment.

41.5%

Petrochemicals(Billions of Yen)

(Billions of Yen)

(%)

250

50

50

200

40

40

150

30

30

100

20

20

50

10

10

0

0

FY’05 FY’06 FY’07 FY’08 FY’09

FY’05 FY’06 FY’07 FY’08 FY’09

0

Operating Income* (Left)
Operating Margin (Right)* Operating income includes company-wide costs
for fundamental research and development.

Elastomers
The main products in this segment
are synthetic rubber and thermoplastic elastomers (TPE). JSR is oneof the world’s largest manufacturers of synthetic rubber.

Operating Income /Operating Margin

Net Sales

33.4%(Billions of Yen)

(Billions of Yen)

(%)

150

12

12

100

8

8

50

4

4

0

FY’05 FY’06 FY’07 FY’08 FY’09

0

FY’05 FY’06 FY’07 FY’08 FY’09

0

Operating Income (Left)
Operating Margin (Right)

Emulsions(Billions of Yen)

(Billions of Yen)

(%)

30

3

12

Emulsions are liquids in which
synthetic rubber or synthetic resin
have been dispersed in water, suchas acrylic emulsions and paper
coating latex (PCL).

20

2

8

10

1

4

6.7%

0

0

FY’05 FY’06 FY’07 FY’08 FY’09

0

Operating Income (Left)
Operating Margin (Right)

Plastics
The major product in this segment
is ABS plastics, a material withwell-balanced properties that isused in many applications worldwide.

FY’05 FY’06 FY’07 FY’08 FY’09

18.4%(Billions of Yen)

(Billions of Yen)

80

4

8

60

3

6

40

2

4

20

1

2

0

FY’05 FY’06 FY’07 FY’08 FY’09

0

FY’05 FY’06 FY’07 FY’08 FY’09(%)

0

Operating Income (Left)
Operating Margin (Right)

1st Tier Products
Elastomer

Semiconductor materials

Styrene-butadiene rubber (SBR) and other JSR general-

JSR’s semiconductor materials are developed

purpose synthetic rubbers are used in many applications
across industries due to their advanced technology.

based on its many years of polymer chemistry inpetrochemical business. In particular, JSR lithogra-

JSR products are top class in the Japanese market. The

Base tread:BR

largest application is automobile tires, and JSR is making

Sidewall:BRa large contribution to increasing the performance ofInner liner:IIR

meet diverse global needs for high quality andChafer:BR, SBR

performance products in the trend of miniatur-these products through the development of solution
polymerization SBR (S-SBR) for high performanceenergy efficiency tires.

4

Tread:SBR, BR

JSR Corporation

phy materials including photoresists are recognized as global top class products. JSR products

ization and high integration in semiconductors.

Products

Applications

Semiconductor Materials•Lithography materials (photoresists, multilayer materials and others) •CMP materials(CMP slurries and pads) •Interconnect materials (spin-on low-k materials) •Packaging
materials (thick photoresists, photosensitive insulation materials and others)
Flat Panel Display (FPD) Materials•LCD materials (alignment films, protective coatings, color pigment dispersed resists,
photosensitive spacer and others) •PDP materials (dielectric layer of dry film, dry film forelectrode formation, and others) •Optical films (ARTON® films)
Optical Materials•Opto-functional materials (anti-reflective coatings, UV curing optical fiber coatings,
heat-resistant transparent resin ARTON®)

Semiconductor Materials•Process materials for semiconductor manufacturing
FPD Materials•Process materials for liquid crystal displays panels•Process materials for plasma display panels
Optical Materials•Anti-reflection for display surface, organic / inorganic hybrid hardcoat, prism lens, adhesive for optical discs, etc. •Optical fiber
coating materials, three-dimensional free form fabrications•Optical lens, retardation films, light guiding plates, etc.

General-Purpose Synthetic Rubbers•Styrene-butadiene rubber (SBR) •Poly-butadiene rubber (BR)Special Purpose Synthetic Rubbers•Acrylonitrile-butadiene rubber (NBR) •Butyl rubber (IIR) •Ethylene-propylene rubber(EPM/EPDM)
Thermoplastic Elastomer (TPE)•Syndiotactic 1,2-Poly-Butadiene “JSR RB®” •Hydrogenated polymer “DYNARON®”•Styrene-butadiene block copolymer “JSR TR” •Styrene-isoprene block copolymer“JSR SIS®”

General-Purpose Synthetic Rubbers•Automobile tires
Special-Purpose Synthetic Rubbers•Automobile parts, industrial rubbers, etc.
Thermoplastic Elastomer (TPE)•Various shoe soles, injection molding items•Hot melt adhesives, hot melt binders

Emulsion Products•Paper coating latex (PCL) •SB latex •Acrylic emulsion
Performance Chemicals•High-functional dispersant “DYNAFLOW®” •Organic/inorganic hybrid coating material“GLASCA®” •Standard particles •Particles for clinical diagnostic •Research reagents

Emulsion Products•Carpet backings, various binders•Coating paper for printing purposes•Floor polish, paint, binders, adhesives
Performance Chemicals•Anti-staining coating materials•Exterior coatings, various functional coating materials.

•Acrylonitrile-butadiene-styrene (ABS) plastics•Acrylonitrile-ethylene-propylene-styrene (AES) plastics•Automotive parts, electrical appliances, office automationequipment, etc.
•Automotive parts, electrical appliances, house-buliding
materials, etc.

Multi-layered LSI

Liquid crystal display (LCD) materials

Interconnect materials•Low-k materials

JSR’s Liquid Crystal Display (LCD) materi-

CMP materials•Slurries•Pads

als contribute toward the high-definitionof LCD television sets. Furthermore, LCD
materials are recognized in the market as
the cutting-edge

technology originallydeveloped by the Company. JSR createsTransistor

Lithography materials•Photoresists•Multilayer materials

value for innovations in FPD technology
through development and commercialization by its proprietary polymer technology.

Anti-reflective
coatings
Retardation films
Color pigment
dispersed resists
Photosensitive
spacers
Protective coatings
Alignment films

ANNUAL REPORT 20095

To Our Sh a reholders

MITSUNOBU KOSHIBAYOSHINORI YOSHIDA

Representative Director and President

Representative Director and Chairman

We have been steadily increasing our business size and profitability from fiscal 2002 to 2008. However, thebusiness environment has rapidly deteriorated since October 2008 due to the severe recession caused by the
global financial crisis. In this situation, the Company would like to re-emphasize the importance of a business
management style that gives precedence to rapid decision making which enables us to overcome the toughand unpredictable business environment and start on a new growth path upon an economic upturn.
Here, we would like to report our business operations of fiscal 2009.
A fiscal year ended March 31. (ie. For the case of fiscal 2002, the fiscal year started on April 1, 2001 and ended on March 31, 2002.)

Fiscal 2009 Business Environment and Earnings

6

into a grave recession on an unprecedented scale.

In the first half of fiscal 2009, Japan’s economy grew more uncer-

Our main customers, including automobile, automobile tire,

tain not only from the sharp rise in crude oil price, but also due topaper, semiconductor and flat panel display (FPD) manufacturers,

slackening export growth and a downturn in gross domestic prod-

saw a rapid drop in global demand. Resultantly, they had nouct as well. Furthermore, in the second half, the global financial

choice but to implement large-scale production adjustments.

crisis caused a worldwide stock market slump as well as the yen’s

Under these circumstances, during the first half of fiscal 2009,

accelerated appreciation. This has seriously affected the real econ-

our petrochemical sector weathered steep hikes in the major raw

omy, which has been indicated by the world economy’s fastmaterials price, mainly caused by the rise in the prices of crude oil.

deceleration. As a result, these events have pushed the economy

In addition, production adjustments at the ethylene production

JSR Corporation

plants in the petrochemical complex, further limit the availability

mid-term business plan, “JUMP2010,” which started in fiscalof raw materials in the first half of fiscal 2009. Within this unfor-2008. The basic strategy remains unchanged, namely, seeking togiving environment, the sector endeavored to revise prices in“create a group of next-stage growth businesses and expand

order to improve profitability and ensure the supply of major raw

earnings at the petrochemical and the fine chemicals and othermaterials in a bid to stabilize earnings. Also the fine chemicals andproducts businesses.” Furthermore, we will thoroughly reduceother products sector, which posit information electronics materi-costs and improve business competitiveness by implementing

als as its main business, continued to provide advanced materials

restructuring measures in the petrochemical sector as well as theand promoted global marketing in a bid to expand its operations

fine chemicals and other products business sector, especially, thefurther. As the business environment quickly deteriorated in thesemiconductor and flat panel display materials divisions. As forsecond half, the both of business sector united to take emergency

next-stage growth businesses, we will enhance the promotional

measures in order to maintain earnings. Although these measuressystem and resource allocation to accelerate commercialization.

were mainly taken to reduce fixed costs, earnings, nevertheless,

We will do our utmost to achieve the goals by implementing thesedeclined substantially from the plunge in sales caused by the rapid

measures promptly to get back on a growth path as soon as thedrop in demand.

market environment recovers.

As a result, sales and profit were down in fiscal 2009, net sales
decreased 13.4% to 352.5 billion, operating income was down

As a member of the chemical industry, we believe that our corpo-

49.4% to ¥30.3 billion, current income decreased 44.5% to ¥31.1

rate responsibility is to “enable sustainable development.” Underbillion, and current net income decreased 62.2% to ¥13.9 billion.

this belief, the Group will further enhance efforts to contribute to
the development of society by striving to fulfill its corporate social

Dividends

responsibility, giving due considerations to the environment andOur basic dividend payout policy calls for the maintenance of asafety and promoting fair business operations.

stable dividend over the long-term and the distribution of profits

Lastly, we appointed a new representative director and presi-

contingent upon consolidated earnings growth. The dividenddent on April 1, 2009, thereby launching a new management

amount for fiscal 2009 was ¥32 per share, unchanged from theregime. Under the corporate slogan of “With chemistry, we

previous year, consisting of ¥16 in midterm dividend and ¥16 incan.” we aim to continue creating new values, provide solutions

term-end dividend.

to society and further grow and develop as a company.
To our shareholders, we ask for your continued cooperation

Future Outlook and Operation Policies

and support.

In fiscal 2010, the Japanese economy is expected to see contracting
demand due to the prolonged global economic slump and spillover
effects of deteriorating corporate earnings and personal spendings.
The economic situation will remain tough after the unprecedented
recession in fiscal 2009. Particularly, demand will stay slack in our
main customers, including automobile, automobile tire, paper,

YOSHINORI YOSHIDAMITSUNOBU KOSHIBA

semiconductor and flat panel display manufacturers. It is projected

Representative Director
and Chairman

Representative Director
and President

to take time for the demand in these industries to recover.
Under this situation, we have substantially revised numericaltargets and the action plans for the second half of its four-year

ANNUAL REPORT 20097

Inter view with the Pres ident

Fiscal 2009 marked the mid-point of the four year
mid-term business plan “JUMP2010.” We asked
Mitsunobu Koshiba, who became President on April
1, 2009 on his thoughts regarding policies hereafter.

Review of the first half of “JUMP 2010”

Q
A

FY2008FY2009Initial Plan

FY2009How would you summarize the performance at thisNet sales¥407 billion¥437 billion¥352.5 billion

point on looking back on the two years in the first

Operating income¥60 billion¥61 billion¥30.3 billion

half of “JUMP 2010”?

Operating margin

14.7%

14.0%

8.6%

ROE

15.2%

14.0%

5.7%

Fiscal 2009 marked the second year of the four year midterm business plan from fiscal 2008 to fiscal 2011, and was

positioned as the year to place us on the path for growth acceleration in the latter half of two years; however, due to effects of thefinancial crisis, demand and business environment suddenly worsened starting in October 2008. During the first half of fiscal 2009,
our petrochemical division weathered steep hikes in the major raw
materials price, mainly caused by the sharp rise in the prices ofcrude oil. In addition, production adjustments at the ethylene center started to restrict procurement of raw materials in the first halfA

industry’s situation?

Overall sales were down toward the fiscal year’s second half
for markets representing JSR’s main customers, which are:of fiscal 2009. As the whole business environment quickly deterio-synthetic rubbers, semiconductors, and Liquid Crystal Display

rated in the second half, both petrochemical business sector and(LCD) panels. Compared to its peak sales in fiscal 2008, a 30-40%

fine chemicals and other products business sector united to takedecline is projected in fiscal 2010, and a further fall of at least 20-

emergency measures in order to maintain earnings.

30% below the initial market forecast is assumed. Also, short

Despite their efforts, they did not achieve their initial goals. Net

term recovery is viewed as difficult for all of them, creating a large

sales dropped 19% over the initially planned, which is similar to fis-gap between the initially forecasted market sizes over the next

cal 2007 level, and operating income fell 50% over the initially

few years. Thus we must make revisions in our previous growthplanned. Thus, we are forced to revise our initially assumed growthscenario which assumed market expansion, and look to the future

path, and must rapidly advance cost optimization to match theof our business operations.

sales scale of the new scenario for the two years in the second halfof the mid-term business plan “JUMP2010.”

8Q

How would you define the current

JSR Corporation

Demand Trend of Main Customers
Consumption of Synthetic Rubber

Global Semiconductor Market(Millions of ton)

(Billions of dollars)(Billions of dollars)

15

400

120

(Y/Y) -3.4%

LCD Market(Y/Y) -4.1%

-26%

150

(Y/Y) +1.0%

300

10

2

(Millions of m )

-25%

80

100

40

50

0

0

(CY) ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13(CY) ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13

0

-36%
200

5
100

0

(CY) ’06

’07

’08

’09

’10

’11

As of February 2009
As of February 2007

As of March 2009
As of February 2007
Referrence: Gartner, “Semiconductor Forecast Worldwide: Forecast Database,”(February 28, 2007, March 23 2009) (Calculated by JSR. Solar cell
excluded from the projection as of March, 2009.)
The Gartner Report(s) described herein, (the “Gartner Report(s)”) represent(s)data, research opinion or viewpoints published, as part of a syndicatedsubscription service, by Gartner, Inc. (“Gartner” ), and are not representationsof fact. Each Gartner Report speaks as of its original publication date (and not
as of the date of this Prospectus) and the opinionsexpressed in the Gartner
Report(s) are subject to change without notice.

Reference: ”Japan rubber yearbook”

Management & Business Operation Policy

QA

As of March 2009 (Left)
As of January 2007 (Left)
Area (Right)
Reference: DisplaySearch

In the initial plan, we had targets of ¥500 billion net sales,¥75 billion operating income, and ROE of over 14% in fiscal

You said earlier you made revisions to the original

2011. Giving consideration to the present business conditions, wetarget of “JUMP 2010”. Please tell us the newly

set the new targets of ¥360 billion net sales, ¥36 billion operating

established earnings targets for the second half ofincome, and ROE of 10%. We aim to make fiscal 2009 the bot-

“JUMP 2010.”

tom of our drive to a regrowth trend.

FY2008FY2009FY2010Plan

FY2011Plan

FY2011
Initial Plan

Net sales¥407billion¥352.5 billion¥290 billion¥360 billion¥500 billion

Operating income¥60billion¥30.3 billion¥15 billion¥36 billion¥75 billion

Operating margin

14.7%

8.6%

5.2%

10% or more

15% or more

ROE

15.2%

5.7%

4.1%

10% or more

14% or more

Q
A

What initiatives are you emphasizing to achieve

tomer and other petrochemical businesses and fine chemicals“JUMP 2010” targets?

(semiconductor materials, FPD materials and optical materials) as
our core businesses. Our next-stage growth business (precision
processing, performance chemicals, environment and energy and

We implement the optimization of business costs to match

medicare related materials) are defined as our strategic business.

our sales level as the common issue throughout the compa-

Policies for each business area will be set and actions will be taken

ny. In addition, issues remain such as the establishment of an opti-

in accordance.

mal production infrastructure for our petrochemicals business.

Thorough cost cutting measures and a restructured competi-

Furthermore, we need to search for ways to respond to the com-

tiveness that can perform under risk scenario settings will be ourmoditization of products as well as the downward price pressures

goal for these core businesses. In our strategic businesses, we will

for our fine chemicals and other products business.

also work to launch new products and strengthen required

In this environment, JSR will arrange its portfolio with the elas-

resource allocations, to accelerate startup of business.

ANNUAL REPORT 2009

9

Q
A

You said that optimizing business costs is an issue

The whole petrochemical industry map may be changed due tocommon to your core businesses. What measures

the restructuring of the ethylene production plants in complex

are you taking to achieve this?

and many start-ups in Middle East, causing the tight supply anddemand balance of butadiene. JSR needs to be ready for theseWe put our efforts to align our business costs to our revisedchanges. In order for us to maximize and maintain stable earn-

growth scenario, and build a business structure which canings without having raw material concerns, we will work to diver-respond to even lower demand. We have focused on variable costsify raw material sources by establishing procurement routes fromreductions such as process improvements and higher yields in the

Asia or securing local source through overseas production

framework of the Cost-Reduction Plan “E-100 Projects”and costarrangement, such as the capacity right arrangement with DOW

reduction of ¥13 billion (estimated) was achieved in the first half ofEurope GmbH.

JUMP2010. Our initial target was ¥28 billion, but as a result of

In fine chemicals and other products, global demand contrac-

recalculating our assumed sales conditions in line with the businesstion and slow growth have become remarkable, indicated by theenvironment, we expect cost reduction of ¥8 billion for the second

downward revisions in market forecasts for electronics, especiallyhalf of JUMP2010, resulting in cumulative cost reduction results ofsemiconductor markets. Also, progressive commoditization and¥21 billion through fiscal 2011 comparing to fiscal 2007. Also, as

competition with expansion in the markets for display panels for

new earnings countermeasures, we will execute fixed cost reduc-flat TV accelerates decline in unit prices of products.

tions such as streamlining manufacturing staff, cutting R&D costs

Fortunately, JSR has several top tier products in semiconductor

for existing products, and holding down other manageable costs,

materials and display materials and global manufacturing infra-

to cut ¥8 billion in total. Therefore, these will total over ¥16 billion

structure, which supply high quality products. By utilizing thoseof cost reductions for the second half of JUMP2010. We will also

competitive advantages, JSR will introduce cutting-edge products

give thoughts to merging production bases and reorganizing pro-to markets quickly when demand recovers.

duction lines as measures to build long term competitiveness.

For both businesses, streamlining of cost structure to meetcurrent demand and enhancing competitiveness under therevised scenario.

Cost-Reduction Plan “E-100 Projects”+ Earnings Countermeasures(Billions of yen)
30

Earnings countermeasures(fixed costs) ≥ ¥8 billion
vs. FY2009

20

Petrochemicals ¥8 billion
vs. FY2007
10

Fine chem.&other ¥13 billion
vs. FY2007
0

FY2008Petrochemicals

A

stage growth businesses initially announced for “JUMP2010”? What are your business plans hereafter?

In the first two years of JUMP2010, some products areeach making solid progresses, such as areas in optical films,

lithium ion capacitors, electrolyte membranes for fuel cells and so

FY2009 FY2011 Target

Earnings Countermeasures

Q

What progress was made in the first two years for next-

Fine Chemicals & Other

forth. In regards to the manufacturing, JM energy Corporation,
JSR’s group company, completed its commercial scale production
plant for lithium ion capacitors in November 2008. Also, JSR

Q
AWhat is required to rebuild competitiveness in eachcompleted facility for commercial-scale production of electrolyte

core business?

membranes for fuel cells in the Yokkaichi plant. In order for us toareas as strategic businesses, which expect big leap of growth,

In petrochemical business, we keep our basic strategy ofwhich are precision processing and materials, environment andstrengthening our competitiveness by supplying technicallyenergy, medicare related materials, performance chemicals anddifferentiated and high-value-added products, such as S-SBR forhigh performance energy efficient tires, to meet society needs,
especially for blooming up concerns about global environment.

10

accelerate the promotions, as mentioned earlier, we defined 5

JSR Corporation

information and electronic materials.
Looking at overall speed of market expansion, we see a lag
over our initial assumptions. But originally this business has been

conceived with a long term perspective towards 2020.
Therefore, we will first build up these clustered product lines

Consolidated R&D Costs

with an aim ¥30 billion in sales in fiscal 2011.

R&D

Marketing

Mass
CommercialiProduction
zation

21.9%

30.0%

Trigger ofGrowth market•Hybrid Cars
•Fuel Cell Cars
•Electric Cars

Optical Filter

Performance
Chemicals

Antibody conjugated magnetic beads
Binder Materials for Electrodes ofLithium-ion Batteries

Pressure sensitive Conductive
Information
LED related
Rubber Connectors
materials
and Electronic
Materials
OLED related materials New type of alignment films
Lithium-ion
Solar cell
Environment
Capacitors
related materials
andElectrolyte Membranes for Fuel Cells
EnergyBlocking agents for in-vitro
diagnostic and life science
Chromatography media
for antibody purification

Medicare

Already announced

A

FY2010¥19.0 billion

Sheet/Films for Touch Panels

Precision
Processing

Q

FY2009¥21.3 billion

Strategic Business•Highperformance
tough panels•Displays for
Automotive

Core Business

Conclusions•Life science
application•In vitro
diagnostics

New

Are capital investment and R&D costs announced in“JUMP 2010” proceeding as initially planned?

Q
A

Lastly, please describe JSR’s basic strategy once more.

First, we’re assuming business operations in an extremely
harsh environment, but there is no change in our basic

strategy of earnings maintenance and expansion in core businesses, with nurturing and commercialization of strategic businesses.

For capital investments, we are working on large scale con-

JSR will continue to provide our “innovative materials” andtraction and freezing in response to changed business“high-precision processing technology and products” to newly-

results. For strategic businesses on the other hand, we set a sepa-

emerging fields in environment, energy, biotechnology andrate total budget of ¥10 billion in fiscal 2010-2011, flexibly mov-medicare, as well as in the areas of information and electronics,

ing forward with capital investments.

which are expected to continue in its expansion, for further
enhancing global competitiveness with existing projects.

Consolidated Capital Investment Plan*

When the economy is back on track, JSR strives to make this*Investment decision-making basis(Billions of yen)40

possible with its quick and responsive practices.

Separate budget for strategic businesses(¥100 billion cumulative FY2010-11)20

0FY2008FY2009FY2010 Plan

¥20 billion cut from original plan (¥130
Strategic Business

Fine Chemicals & OtherFY2011¥110 billion)
Petrochemicals

We are also moving towards shrinking R&D cost overall in fiscal
2010. We are further raising the amount and percentage of thisR&D allocated to strategic businesses, working to boost development of new products and speed of commercialization.

ANNUAL REPORT 200911

Review of Opera tions /Fine Chemicals an d O ther Pro ducts

The Fine Chemicals and Other
Products of JSR mainly consist of
materials for semiconductors,
flat panel displays (FPDs), andoptical materials. These businesslines are seeing steady expansions of argon fluoride (ArF)
photoresists and multilayermaterials used for semiconductors, as well as alignment films
and color pigment-dispersed
resists used for liquid crystal display panels (LCD).

Net Sales and Operating Income(Billions of Yen)

200

50

160

40

120

30

80

20

40

10

0

FY’05 FY’06 FY’07 FY’08 FY’09
Net Sales (Left)
Operating Income (Right)** Operating income includes company-wide costs
for fundamental research and development.

Proportionof Sales

41.5%

12

JSR Corporation

0

Fiscal 2009 Business Performance:

to the global recession also resulted in

Semiconductor Materials

large inventory adjustments in demand

In the semiconductor materials divi-

industries. From these large drops insion, we saw large growth in sales ofdemand, especially sales in Japan andmultilayer materials due to growing

Taiwan resulted in lower net sales

demand and sales with the launch of

year-on-year.

ArF immersion exposure. Despite thesemeasures, photoresists —the main

Optical Materials

product— were impacted by the large

For the optical fiber coating materials

fall in demand starting the second half—the mainstream product— net sales

due to production adjustments at our

decreased year-on-year due to thecustomers side; slump in business withdrop in demand in exports for opticalsome of our major customers, resulted

fiber in addition to cut-backs in invest-

in lower net sales year-on-year. JSR

ments for the domestic optical fiber

opened its Singapore representative

cables starting from the second half.

office in September, 2008 as a busi-

Anti-reflective coating materials andness base for advanced materials with aprotective coating materials werefocus on semiconductors in Southeast

increasingly adopted by the high-Asia. Through this initiative, the com-value-added sector paralleling thepany is working to be even more com-trend in thin screen TVs to become

petitive in the most advanced

more high-definition. Furthermore,materials sector.

despite the rapid fall in demand during the second half, net sales grew

Flat Panel Display Materials

year-on-year. Although progress was

In flat panel display (FPD) materials,

seen in sales for ARTON® resin (heat-sales of LCD materials were initiallyresistant transparent resin), and in thesteady with growing monitors of per-precision processing sector, lower net

sonal computers (PC) and LCD TV mar-sales year-on-year was recorded due

kets. Nevertheless, demand began toto intense competition between com-decline especially for PCs starting thepetitors in the optical film industry andmiddle of the first half, and businessfrom the drop in demand starting thewas affected by falling prices due tosecond half.

lower LCD panel production and theworsening supply/demand environ-

Earnings:

ment. Moving into the second half,Prices came under increasing down-

further slowdown in consumption due

ward pressure due to falling prices forJSR ArF resists and multilayer materials are used in
cutting edge semiconductor production.

JSR LCD materials are used in high definition TVs.

major demand industry products.

¥146,385 million, with operating

implemented. To execute these tasks,

Under such circumstances, JSR worked

income declining 53.7% year-on-year

the Company is promoting the Cost-

to boost sales of differentiated prod-to ¥20,496 million.

Reduction Plan “E-100 Projects”,
rebuilding the manufacturing unit toucts and promoted the Cost-Reduction
Plan “E-100 Projects”, while taking

Fiscal 2010 Business Strategy:

cut fixed costs, and making thoroughurgent measures concerning earnings

For the current fiscal year, negative

cost reductions in the sales, manage-

in the second half targeting further

growth is expected largely due to thement, and research units, thereby

cost reductions in the entire group.

major economic downturn that startedaligning and optimizing business costs

Despite these efforts, the decline infrom the second half of fiscal 2009,for our market scale. JSR is also working

sales volume due to the rapid fall inwhich has caused the inevitable large

to expand and enhance its business bydemand had a large impact, resulting

scale production adjustments in impor-utilizing its overseas bases in Korea,

in a large profit decline year-on-year.

tant customers such as semiconductors

Taiwan and Singapore, pushing to growAs a result, the fine chemicals andand FPDs. Under such conditions,sales in Asian emerging markets, andother products consolidated net sales

measures to cut costs and reinforce

using cutting-edge technologies to cre-declined 19.6% year-on-year toour business competitiveness will be

ate new materials in peripheral sectors.

JSR Global Operations for Fine Chemicals Business

JSR Micro NV

JSR Micro Inc.

JSR Taiwan
OfficeJSR Singapore Office

JSR Micro Korea
Co., Ltd.

JSR Micro Taiwan
Co., Ltd.

JSR (Yokkaichi plant)•Manufacturing Site
•Branch Office
JSR Corp. Headquarters

JSR Micro Kyusyu
Co., Ltd.

ANNUAL REPORT 200913

Review of Opera tions / Petrochemical M a ter ials

Elastomers

Since its foundation, JSR has
offered a wide range of elastomer products for the world
market including: general-purpose synthetic rubbers such as
styrene-butadiene rubber (SBR)
developed for automobile tires;and special-purpose synthetic
rubbers such as acrylonitrilebutadiene rubber (NBR), butyl
rubber (IIR), and ethylene-propylene rubber (EPR). JSR also offers
thermoplastic elastomer materials (TPEs), which have uniquecharacteristics that consists bothelements of rubber and thermoplastic resins.

Net Sales and Operating Income(Billions of Yen)

150

15

100

10

50

5

0

FY’05 FY’06 FY’07 FY’08 FY’09
Net Sales (Left)
Operating Income (Right)

Proportionof Sales

33.4%

14

JSR Corporation

Fiscal 2009 Business Performance:
Synthetic Rubber
In the domestic general purpose synthetic rubber business such as SBR andpolybutadiene rubber (BR) was impacted by raw material restrictions due toethylene center production adjustments
in fiscal 2009, in addition to the rapid
drop in demand accompanying production adjustments of automobile tires.
Despite efforts to revise prices in
response to higher raw materials prices
in the first half, sales volume and net
sales decreased year-on-year.
Similarly, for high-performance specialpurpose rubber, efforts were made torevise prices of NBR, EPR and IIR in
response to higher raw materials prices
in the first half. However, the rapid fall in
automobile production starting the second half resulted in lower year-on-yearsales volume and net sales. In exports,
general-purpose rubber and high-performance special-purpose rubber werealso affected by the rapid dropped in
production of both automobiles andautomobile tires, resulting in lower yearon-year sales volume and net sales.

0

Thermoplastic Elastomer (TPE)For TPEs, such as butadiene and styrenebutadiene thermoplastic elastomer, JSR
strove to revise prices responding tohigher raw materials in the domestic
market during the first half. Nevertheless,starting the second half, demand fell
due to production declines in main
demand industries such as automobiles.
Starting the second half, exports suffered as demand fell rapidly for butadiene thermoplastic elastomer (RB) in

Europe and Central & South America.
As a result, lower year-on-year sales volume and net sales were recorded bothfor the domestic and export markets.

Production:
The capacity rights to receive 30,000
tons a year of solution polymerized
styrene butadiene rubber (S-SBR), equivalent to 50% of Dow Europe GmbH’s
new production line was obtained andits commercial production started in
March 2009. This is in response to medium term expansion in demand for S-SBR
for energy conserving and high performance tires, and the measures taken to
diversify our raw materials procurement
sources. By strengthening the supply system of high quality products, JSR willcontinue to expand globally using Japanand Europe as its bases.

Earning:
JSR promoted expanded sales of highvalue added products while making
cost reduction efforts through the
Cost-Reduction Plan “E-100 Projects”.
Along with price revision efforts in thefirst half in response to higher raw
materials prices, in the second half,
urgent measures concerning earnings
were taken in the entire group targeting further cost reductions. Despite
these efforts, decreased sales volume
due to the rapid fall in demand had alarge impact, and profits fell far below
the previous period. As a result, net
sales in the elastomer segment declined
8.6% year-on-year to ¥117,855 million, with operating income declining
28.1% year-on-year to ¥8,026 million.

JSR’s products support to improve the performanceof tires.

Fiscal 2010 Business Strategy:
JSR will continue with our basic businessstrategy for entire petrochemical business sector, working to maintain andexpand earnings by utilizing originality
and technical superiority, expanding
sales of high-value-added products,
along with productivity enhancements
and cost reductions through innovativetechnology. In short term, it seems thatdemand recovery will take time for thefollowing main demand industries inJapan: automobiles, auto tires, andpaper manufacturing, JSR puts its
efforts into the promotion of the Cost-

Reduction Plan “E-100 Projects”, alongwith drastic cost structure reforms
such as cutting fixed costs and dramatic productivity enhancements including
integration of production lines.
For further global expansion of thesales, JSR will focus on high-value-added
products, such as S-SBR for energy conserving and high performance tire,
which is expected sustainable growthover the medium term. JSR will utilize
production bases in Japan and Europe,
where it obtained the capacity right of
50% of Dow Europe GmbH’s new production line that started its commercial

JSR TPE products are used in the soles of shoes.

production in March 2009.
In regards to the raw material supply
management, restrictions of main raw
materials such as butadiene due to reorganization of the petrochemical industries centering ethylene centers may be
expected. JSR will work on diversify the
procurement of raw materials from Asia.
Also, local procurement for diversified
raw material sources through overseas
production arrangement, such as thecapacity right arrangement with DOWEurope GmbH, will be secured.

Production Profile
Products
Styrene-butadiene rubber (SBR)
Acrylonitrile-butadiene rubber (NBR)

typical general–purpose synthetic rubber; for tires, conveyor belts, hoses, footwear

Application / Features

High styrene rubber (HSR)a high degree of hardness with low specific gravity; for hardboard, tiles,
ebonite, footwear

Polybutadiene rubber (BR)general-purpose synthetic rubber; low in heat buildup, high in resilience;for tires and golf balls

highly oil–resistant; for industrial rubber parts

Production Capacity of Plant

Yokkaichi—255,000 tons/year

Chiba—72,000 tons/year

Solution polymerization styrenebutadiene rubber (S-SBR)
Hydrogenated polymer (DYNARON®)
and others

specialty SBR for fuel-efficient and high-performance tires

Polyisoprene rubber (IR)physical properties duplicate those of natural rubber; for tires, belts, footwear

Kashima—41,000 tons/year(Manufactured by KRATON JSR
Elastomers K.K.)

Ethylene-propylene rubber (EPR)

specialty synthetic rubber; excellent weatherability and heat resistance;
for automotive parts, window frames, electrical cables, industrial goods

Kashima—36,000 tons/year

a plastic with rubberlike properties for shoe soles, plastic modifiers, etc.

Chiba—24,000 tons/year

used as adhesives, plastics modifiers, footwear

Kashima—45,000 tons/year(Manufactured by KRATON JSR
Elastomers K.K.)

Butadiene

material for petrochemical products

Yokkaichi—148,000 tons/year
Chiba—130,000 tons/year(Manufactured by Tobu
Butadiene Co., Ltd.)
Kashima—120,000 tons/year

Isoprenematerial for petrochemical products

Kashima—36,000 tons/year

Butadiene thermoplastic elastomer(JSR RB®)
Styrene thermoplastic elastomer(SBS, JSR SIS®)

used as a compatible blending agents, resin modifier, adhesives, etc.

Yokkaichi—45,000 tons/year

ANNUAL REPORT 200915

Review of Ope ra tions / Pet ro ch emical M a te r ials

Emuls ions
JSR’s PCL (paper coating latex) is widely used tobeautify papers more.

A material with special functions
based on emulsion polymerization technology developed
through the process of manufacturing synthetic rubber. A main
emulsion product is paper coating latex (PCL), which has the top
share in the domestic market.
With powerful adhesiveness andexcellent suitability for printing,
PCL is used for a wide range ofcoated paper products. Styrenebutadiene latex is also developed
as various types of adhesive, suchas the carpet backings.

Net Sales and Operating Income

Fiscal 2009 Business Performance:

Reduction Plan “E-100 Projects”. In

In the first half, usage in volume forthe first half, prices revision efforts

paper coating latex (PCL) —the main

were also made in response to higher

product— increased by consecutively

raw materials prices, and in the second

putting new lines of coated paper

half, urgent measures concerning

manufacturers into operation. Notwith-earnings were taken in the entire

standing these undertakings, the sub-group targeting further cost reduc-stantial drop in demand for coatedtions. Despite these efforts, decreased

paper from the second half resulted insales volume due to the rapid fall inthe decrease in sales volume and net

demand had a substantial impact, andsales year-on-year. Similarly for acrylic

profits fell far below the previous peri-

emulsions, the drop in demand in

od. As a result, in the emulsion seg-adhesives area —mainly for use inment, net sales declined 13.2%

building materials and automobiles—

year-on-year to ¥23,432 million, with

contributed to the decline in sales vol-operating income declining 66.5%

ume and net sales year-on-year.

year-on-year to ¥516 million.

Earning:

Fiscal 2010 Business Strategy:

Cost reduction efforts were madePlease refer to page 15, “Fiscal 2010

through the promotion of the Cost-

Business Strategy”.

(Billions of Yen)

30

3

20

2

10

1

Production Profile
0

FY’05 FY’06 FY’07 FY’08 FY’09
Net Sales (Left)
Operating Income (Right)

Proportionof Sales

6.7%

16

JSR Corporation0

Products

Application / Features

Production Capacity of Plant

Latex

for paper coating, carpet backing,tire cord dipping, adhesive agents,
ABS plastics

Yokkaichi—120,000 tons/year

Review of Ope ra tions / Pet ro ch emical M a te r ials

Plas tics
ABS plastic products are being used for automotive parts.

JSR is operating its plastics businessunder Techno Polymer Co., Ltd.
Techno Polymer offers various
acrylonitrile-butadien-styrene(ABS) plastic products that customers seek. The company’s ABS
products are noted for uniqueness, based on the combined characteristics of various polymers. The
company provides ABS productswith consistent quality, backed by
its worldwide bases of sales andtechnical services.

Net Sales and Operating Income(Billions of Yen)

80

8

60

6

40

4

20

2

0

FY’05 FY’06 FY’07 FY’08 FY’09
Net Sales (Left)
Operating Income (Right)

Proportionof Sales18.4%

0

Fiscal 2009 Business Performance:
In the domestic market, sales during
the first half were steady for heatresistant ABS plastics and weatherproof
acrylonitrile-ethylene-propylene-styrene(AES) as well as acrylonitrile-styreneacrylate (ASA) plastics for automotive
uses. From the second half, the sharp
drop in demand for automobiles, building materials and consumer electronics
due to the impact of declining automobile production and housing starts,
resulted in lower year-on-year sales volume and net sales. Although exports
were similarly affected by the rapid
drop in demand during the second
half, the growing sales in the entertainment sector resulted in sales volume
and net sales that were slightly higher
year-on-year. Nevertheless, this did not
make up for the decline in the domestic market and plastics segment’s sales
volume and sales fell year-on-year.
Furthermore, as of March 31, 2009, a
joint venture was dissolved between
Mitsubishi Chemical Corporation regarding Techno Polymer. By acquiring theentire 40% share held by Mitsubishi
Chemical Corporation, Techno Polymer

effectively became a fully owned subsidiary of JSR. With this arrangement
JSR will strive for even faster decision
making and effective use of businessresources, working for a stronger plastics business in JSR.

Earning:
Cost reduction efforts through the CostReduction Plan “E-100 Projects” were
promoted, along with prices revision
efforts in response to higher raw materials prices. Additionally, in the second half,
urgent measures concerning earnings
were taken in the entire group targeting
further cost reductions. Notwithstanding
these undertakings, decreased sales volume due to the rapid fall in demand
had a large impact, and profits fell far
below the previous period. As a result,net sales of the plastics segment
declined 5.8% year-on-year to ¥64,829
million, with operating income declining
56.6% year-on-year to ¥1,308 million.

Fiscal 2010 Business Strategy:
Please refer to page 15, “Fiscal 2010
Business Strategy”.

Production Profile
Products
Acrylonitrilebutadienestyrene plastics(ABS)
Acrylonitrileethylenepropylenestyrene plastics(AES)
Acrylonitrilestyrene-plastics(AS)

Application / Features

Production Capacity of Plant

excellent impact resistance; forautomotive parts, electrical appliances, office automation equipment, miscellaneous goods
same mechanical properties as ABS
plastics; superior weatherability;
for automotive parts

Yokkaichi—280,000 tons/year(Manufactured by Techno Polymer
Co., Ltd.)transparent plastics; applications
similar to those of ABS plastics

ANNUAL REPORT 200917

Research an d Development, Intellectual Property
1. Core Technologies and the JSR Business Model
Expertise in polymerization gained from the manufacture of synthetic rubber and other petrochemical products represents thecore technology of JSR. Leveraging this know-how, JSR has
grown by responding quickly and accurately to the technologicaldemands of customers concerning information electronics materials. Next generation businesses as well will be rooted in theeven more effective use of this core technology. Through thisprocess, JSR is dedicated to developing new materials along withnew business domains.
Growth at JSR is driven by the following three business models:(1) Global Leadership
Information electronics materials products pose unique challenges. Most become outdated rather quickly and no single
product makes a significant contribution to sales. For this reason, it is imperative to secure powerful market positions worldwide. This strength provides quick access to information on
next-generation technological breakthroughs that can be used
for new research projects. With this in mind, JSR early on began
establishing a global presence, supplying products to prominentcompanies in many countries.

(2) De Facto Standards
By transforming diverse user needs into products suitable formany applications, JSR strives to create products that become thede facto standard in their respective categories. Success in theinformation electronics materials business requires this de facto
standard approach. Building ties rooted in trust with the mostadvanced users in a targeted category is the most effectivemeans of establishing a de facto standard. JSR and these partners
can then jointly develop innovative products and quickly bringthem to the market.
(3) Clusters
Cluster refers to a business made up of many niche markets,
each with annual sales of a few billion yen. JSR gathers a numberof interrelated products to create a single business unit. The
image is similar to how many grapes combine to make one
bunch. Taking this approach raises the efficiency of research,
manufacturing and sales. To generate more benefits, JSR is moving quickly to build more clusters.
JSR is confident that adherence to these three business models will
give the company a solid base for growth for many years to come.

2. R&D and Intellectual Property Organization and R&D Alliances(1) R&D and Intellectual Property Organization

Performance Polymer
Research Laboratories

Display Materials
Research Laboratories
Yokkaichi
Research Center
Fine Electronic Materials
Research Laboratories

Precision Process
Technology Center

Polymer Materials Lab.

Rubber for tires, specialty rubber, functional elastomer,
thermoplastic elastomer, etc.

Performance Chemicals Lab.

Latex for paper coating, functional emulsions etc.

Microfabrication Processmaterials Lab.

CMP materials (slurries, pads), etc.

LCD Materials 1st Lab.

Protective coatings and color pigment dispersed resists for
LCDs, etc.

LCD Materials 2nd Lab.

Alignment film for LCD, etc.

Semiconductor Materials Lab. Photoresist for semiconductors, etc.
Packaging andAssembly Materials Lab.

Thick photoresists, photo sensitive insulation materials
for LSI, etc.

Performance Polymers Laboratories

ARTON®, optical materials for films, etc.

Research Fellow Laboratories (Yokkaichi)

Functional materials for LIB, Insulation materials for LED, etc.

Fine Chemical Process Laboratories

Review possibilities to industrialize new raw materials andproducts in the fine material / product area.

Material Characterization& Analysis Laboratories

Physical properties, analysis, characterization, CAC, etc.

Precision Process
Research Laboratories

Process Research Lab.

Research on film converting technology, etc.

Process Materials Lab.

Converting products on optical films, ARTON® film, etc.

Precision Process High Performance Film Depertment

18

As of June 16, 2009

Manufacturing technology and manufacturing of films

Tsukuba Research Laboratories

Optical fiber coating, Radiation curing materials,
particles for diagnosis, Low-k films for LSI, etc.

Research Fellow Laboratories (Tsukuba)

Materials for fuel cells, etc.

Research and Development Department

R&D strategic initiatives and administration.

Intellectual Property Department

Business related to intellectual property rights.

JSR Corporation

(2) R&D Alliances
JSR establishes R&D alliances as required to achieve strategic
objectives. Most alliances are with customers conducting busi-

ual licensing and cross-licensing agreements. The goal is preserving the continuity of business activities and the freedom of R&D
programs. JSR also assesses and manages potential risks in its

nesses that use leading-edge technologies.

intellectual property portfolio.

3. Summary of R&D Segments and Intellectual Property

d. A global perspective

JSR aims to build and enhance intellectual property (IP) networks
in all its R&D segments by creating IP, such as patents,
knowhow, designs, and trademarks, as well as by acquiring and

JSR will secure a competitive edge in its businesses by devising a
global intellectual property strategy that covers not only patents,
but also trademarks and brands. In addition, JSR is upgrading theskills of its Intellectual Property Department and strengthening
ties with patent offices in other countries. This will allow JSR toutilizing IP on a global scale. By strategically utilizing these networks, JSR aims to attain a predominant position over competitors
in its businesses.
One priority is information electronics materials and other businesses outside the petrochemicals field. The goal is to acquire IP
that can support global expansion. In this regard, JSR is focusing
not only on Europe and North America, but also on Asia, chiefly
South Korea, Taiwan and China, as a source of IP to build andexpand its IP network.
Another theme is creating IP in fields where JSR aims to create
new businesses that use sophisticated technologies.

4. Policy for Acquisition andManagement of Intellectual Property(1) Strategy for Intellectual Property
JSR uses intellectual policy based on an intellectual property strategy that is made up of the following four components.
a. Participation in the creation of intellectual property
JSR takes part in 3C analysis of intellectual property and technological information beginning at the stage of searching for R&D
themes. The results of this analysis are incorporated in R&D activities. Furthermore, by being selective in its intellectual property
rights applications, JSR will enhance consistency between its
technological development and patent application strategies.
b. Acquisition of intellectual property
JSR always seeks to secure the broadest possible rights to its R&D
achievements. The aim is to acquire “usable rights” that can contribute to industry-wide progress and be licensed to other com-acquire and utilize intellectual property rights according to thecircumstances of each country and region.
(2) Framework for Using Intellectual Property
JSR’s framework for using intellectual property is distinguished by
two elements: a system closely linked to R&D laboratories, which
identifies ideas that should be patented, and a centralized management system for intellectual property.
JSR’s Intellectual Property Department assigns staff members towork at the Yokkaichi Area and Tsukuba Area. By maintaining
close ties with R&D activities, this approach allows the department to help create intellectual property and quickly submit wellprepared patent applications.
In addition, JSR and its group companies use an organizedapproach to effectively use their intellectual property and obtainworldwide patents. All matters concerning intellectual property
are managed by the JSR head office to keep this information confidential and prevent leaks of technological information.

R&D Organization
Yokkaichi Area

Tsukuba Area

Precision Process
Technolgy Center

Tsukuba
Research Lab.
R&D
Dept.

Yokkaichi
Research Center

Research Fellow Lab.
(Tsukuba)

panies. Portfolio management of intellectual property is
conducted in accordance with potential earnings and the degreeof innovation. Clearances are received for the use of patents in
JSR products and JSR acquires strategic patents that have thepotential of becoming more valuable in the future.

Assigned to
Yokkaichi AreaIntellectual
Property Dept.
centralized
management()

Assigned to
Tsukuba Areac. Use of intellectual property rights
JSR makes effective use of its own patent rights and utilizes theintellectual property of other companies by entering into individ-

ANNUAL REPORT 200919

JSR has an intellectual property award and bonus system toincrease motivation to come up with new ideas and follow
through with inventions. The system distributes payments in linewith JSR’s workplace invention system when patent applications
are submitted, when a patent is registered and when a patent
generates earnings.

(3) Acquisition Policy of Intellectual Property
JSR will continue acquisition of intellectual property aggressively especially in new technology field for glowing market allover the world based on a mid-term business plan. The expenses
will be concentrated in acquiring strong and competitive
intellectual properties.

5. Contribution of Patents
The following table summarizes patents held by JSR:
Petrochemicals

As ofFine Chemicals andOther Products

OthersTotal

08.3.31

09.3.3108.3.31

09.3.3108.3.31

09.3.3108.3.31

09.3.31

Patents (Japan)

428

428

1,103

1,269

67

73

1,598

1,770

Patents (Overseas)

493

512

1,721

1,955

36

34

2,250

2,501

The following graph shows the number of patents acquired by JSR in each fiscal year.
It shows that JSR is continuing acquisition of patents as is expanding its business globally.

Number of Patents Acquired in each Fiscal Year
Patents

600
500
400
300
200
100
0

2004
Total

20

2005
Domestic

2006

2007

2008

2009
(Fiscal)Overseas

6. Policy Regarding Intellectual Property Portfolio

7. Information Regarding Risk

JSR follows a policy of retaining rights to intellectual property
that can be used to give its products a competitive edge. Other
intellectual property having potential applications is retained or, if
necessary, provided to other companies through licensing agreements. JSR does not keep rights to intellectual property that has

There are no risks involving JSR’s patents or licensing agreements that could have a material impact on cash flows.
Furthermore, in its business operations, JSR exercises careregarding the patents and rights of other companies, quickly
conducting investigations where necessary and strictly comply-

no potential applications.

ing with all laws.

JSR Corporation

The JSR Corporate Social Respons ibility Repor t
Fiscal 2009 Accomplishments Concerning
Key Themes and Goals
JSR believes it to be the group‘s role to actively contribute to thewelfare of society through its primary business. For matters concerning the promotion of Corporate Social Responsibility (CSR), JSR
has the following 4 committees under the CSR Committee from
June, 2008 to further strengthen its activities, and they are: theCorporate Ethics Committee, the Responsible Care Committee, theRisk Management Committee and the Social Contribution
Committee. Fiscal 2009 major accomplishments are listed below.
For details, please refer to the JSR CSR Report.

JSR has advanced measures concentrated on energy saving. Insteadof maintaining our previous target for reducing energy unit consumption, JSR has set a new target for reducing the absolute amount of
CO2 emissions (Reducing emissions in fiscal 2013 by 6% comparedwith fiscal 1991). During fiscal 2009, we have succeeded in reducing the yearly rate of energy unit consumption by 1% in comparison with the average of the period from fiscal 2000 to fiscal 2008.
• A photovoltaic power generation system has been installed in a
newly built welfare facility at the Yokkaichi plant. With the introduction of this system, emissions of carbon dioxide are expected
to be cut by 54 tons annually.

1. Consider Safety and the Environment
when Developing Products

5. Ensure Safety and Protect the Environment
in International Operations• JSR takes a positive approach in producing eco-friendly products in order to offer new materials that satisfy customers’ environmental and safety-related concerns. Regarding one of theseproducts, JSR has completed a facility for commercial-scale production of high quality, highly adaptable hydrocarbon electrolyte
films for fuel cells at its Yokkaichi Plant.
• Life Cycle Inventory (LCI) data for representative products ofour synthetic rubbers are registered on the database of the Japan
Environmental Management Association for Industry.
• All annual productions/imports of more than one ton of chemical products are required to come with safety test data according to the European
regulations concerning “Registration, Evaluation, Authorization
and Restriction of Chemicals (REACH).” JSR has registered a totalof 125 materials for preliminary registration as of November 30, 2008.

• Chairman Yoshida signed the “Responsible Care Global Charter,”which was established in October 2008 by the ICCA in order for theworld chemical industry to enhance greater Responsible Care activities. JSR promised further contribution to improve world health,safety and environmental conservation.
• JSR has continued to cooperate with the program of the International
Center for Environmental Technology Transfer (ICETT) for accepting individuals from abroad to receive training in Japan (classroom training inenvironmental and safety management technologies, and related
response technologies; observation tours of production facilities).
• In fiscal 2009, an environmental and safety audit was carriedout at one company. In the future, JSR is planning to increase thelevel of environmental and safety measures at our overseas group
enterprises while lending our support to those activities.

2. Provide Safety and Environmental Information
Related to Products

6. Ensure Employee Health and Safety

JSR operates a Material Safety Data Sheets (MSDS) electronic data
management system to provide accurate information on prototypes to our customers and to ensure thorough MSDS as well.

3. Ensure the Safety of the Public andProtect the Environment• There were no accidents in fiscal 2009 to which the obligation to reportto the government applied under the Law on the Prevention of Disasters
in Petroleum Industrial Complexes and Other Petroleum Facilities.
• “Crisis Management Training”simulating a massive accident
was conducted in order to strengthen our abilities to respond tocrises when they occur.
• There were no environmental complaints in fiscal 2009. Facilities
to incinerate synthetic rubber drying exhaust have been installedat the Yokkaichi, Kashima and Chiba plants. This resulted in
reducing both foul odor and volatile organic compounds (VOC)
emission levels. In addition, at the Yokkaichi plant, a ground flareincinerator has been installed as a noise and light blocking countermeasure since fiscal 2009, and has shown good results.

4. Reduce the Environmental Impact• With regard to reducing the amount of carbon dioxide emissions,• To provide better mental health activities, JSR started a “Human FrontierCounseling Room” so our employees can undergo counseling at anytime.
Furthermore, the “MTOP (Mental Toughness Orientation Program)”
was implemented as a self-management tool for employees to periodically use in order to understand the state of their mental health.
• A set of measures has been developed in preparation for a
new-type influenza outbreak.

7. Make All Employees Aware of their Responsibilities• JSR, as a company with global activities, announced on April 1,
2009, that it would participate in “The United Nations Global
Compact,” in order to take responsible actions in the international
community. Following this announcement, the JSR group is continuing to further strengthen global CSR activities.
• To increase awareness about CSR among employees, JSR has
utilized information sessions at each sites, Responsible Care (RC)caravans, company newsletters, and CSR handbook.
• To promote corporate ethics activities, JSR renews the principlesof JSR corporate ethics and established a multilingual hotline inaddition to the existing Japanese one.
• To engage in thorough compliance efforts, JSR verified andimproved the status of compliance of the whole group, including
overseas locations.

ANNUAL REPORT 200921

Corpora te Governance an d ComplianceFundamental Position Regarding
Corporate Governance

1. Board of Directors

JSR is dedicated to translating into actions its corporate philosophy:
Materials Innovation—Supplying new materials and using the value
generated to help create a better world (for people, society andassociated with the execution of business operations. As a rule,the directors hold monthly meetings that are chaired by JSR’s
chairman. In addition, the corporate auditors, including external
auditors, attend meetings of the Board of Directors and state
opinions as required.

the environment). JSR’s goal is to constantly generate corporate
value by sustaining the efficiency, transparency and soundness of
its operations, while functioning as an exciting company thatearns the trust of and satisfies all stakeholders.
JSR has adopted the corporate auditor system. There are five corporate auditors, including three from outside the JSR Group. By fully
utilizing the functions of this system, JSR intends to conduct business operations in a manner that is fair, transparent and speedy.
Since fiscal 2006, JSR has also used the executive officer system
to separate the management decision-making and supervisionfunction and business execution function. This makes it possible
to reach management and business execution decisions faster aswell as to speed up business operations. Another purpose of thisseparation is to reinforce supervisory functions. Authority andresponsibility are clearly established concerning the directors’ roleof dealing with company-wide management issues and the executive officers’ role of executing business operations.
JSR has established a Corporate Social Responsibility (CSR)
Committee in response to the high priority that society now places on
the effectiveness of corporate governance. This committee clearly
defines the company’s stance regarding compliance activities, ensuresstrict legal compliance and preserves a sound relationship with society.
In addition, in accordance with the Corporation Law of Japan,
JSR’s Board of Directors decided in May 2006 on a basic policy toestablish a sound internal control system and the company is working to strengthen and improve internal controls. In order to ensure
the effectiveness of internal controls, the Internal Audit Department
will carry out systematic audits of the execution of operations andcompliance in each department of the company and in companies

2. Executive Committee
In order to ensure further study into items requiring management
decision-making as well as efficient business operation, the missions of the Executive Committee and the Strategic Issues
Committee were consolidated into that of the Executive
Committee in October 2008, effectively ending the Strategic Issues
Committee, while establishing the Officers committee as stated in
the following paragraph. The Executive Committee holds extensive
discussions on items concerning fundamental management initiatives, management policies, and management plans, along with
important matters concerning the execution of business activities
at each department. The committee thus gives direction concerning those issues. As required, certain items submitted to this committee are passed on to the Board of Directors for further study.
This committee is made up of all the directors and, concerning
items to be debated and reported, of full time corporate auditors
as well. As a rule, this committee meets every Monday except thethird Monday of the month, and is chaired by the president.

3. Officers Committee
This committee was established in October 2008 in order to hearreports from all departments concerning the execution of business activities, to ensure members’ thorough understanding ofimportant business matters and to enhance their communications. This committee consists of all the directors, senior officers,
officers and full time corporate auditors, except overseas repre-

throughout the Group. Based on the results of these audits, JSR isrefining the framework for confirming legal compliance across thecompany and making further improvements.

sentatives. As a rule, this committee meets every third Monday ofthe month and is chaired by the president.

The internal control system is also designed to ensure the fairness of financial reports. Project teams are formed to conduct

4. Board of Auditors

activities in this regard throughout JSR. The framework of the system has been completed and the actual activities along with thesystem started in April 2008 to establish the complete system.

Management Organization for Management
Decision-Making, Business Execution and Supervision and Other Corporate Governance Systems
JSR uses the following management systems to conduct operations
in a fair and transparent manner.

22

As of June 16, 2009, there were nine directors. They are charged
with studying and reaching decisions concerning important items

JSR Corporation

With five members, including three external auditors, this board
meets every month as stipulated in the regulations governing thisbody. The corporate auditors receive reports on important matters,
hold discussions and reach decisions. In accordance with standards
for audits by corporate auditors, the auditors attend meetings ofthe Board of Directors, Executive Committee and other important
committees to monitor how important decisions are reached andbusiness activities are executed. The auditors also receive reports
from the independent financial accountants, directors and others.
Through these activities, the Board of Auditors holds discussions inorder to form auditing opinions.

5. CSR Committee
The CSR Committee was established to ensure that JSR fulfills its
responsibilities to society and complies with laws and regulations.
To further strengthen the company’s CSR efforts, in June 2008 JSR
established the Risk Management Committee to further bolster thecompany’s risk management framework, and the Social
Contribution Committee to promote activities that contribute tosociety. These two committees, along with the Corporate Ethics

parties to improve the reliability and transparency of the data.
Through these activities, the committee is dedicated to earning
greater trust from customers and preventing any concerns
among residents in the neighborhoods of JSR facilities.
Since fiscal 2007, JSR has elevated the position of its CSR
report by revamping it to include more information on CSR activities, based on JSR’s fundamental stance regarding the three coreelements of CSR: the economy, the environment and the communi-

Committee and Responsible Care Committee, were placed under
the CSR Committee.
The CSR Committee integrates and guides the activities of theabove four committees and meets four times each year along withty. To make the information widely available, these reports are posted on the JSR website (http://www.jsr.co.jp/jsr_e/csr/index.shtml).

special meetings as necessary. The Committee is chaired by the
executive managing director responsible for CSR, with an executive
managing director, three managing directors and two directors.

In the event of a large crisis, JSR considers actions to limit the
impact on operations to be a critical management task. In this

8. Risk Management Committee

Bureaus of the four committees listed above also attend meetingsof the CSR Committee. The Committee clarifies the company’s
stance toward CSR and works to strengthen CSR efforts at JSR.

light the company established the Risk Management Committee
in June 2008, under the CSR Committee with the executive managing director responsible for CSR as a committee chair. The
Committee decides policies and plans in response to crises, both

6. Corporate Ethics Committee

present and potential, and promotes crisis management trainingthat simulates the occurrence of large scale disasters.

The Corporate Ethics Committee chaired by the managing director
for general affairs was established to implement corporate ethics

9. Social Contribution Committee

standards and prevent improper actions throughout the JSRGroup. The JSR Group Principles of Corporate Ethics have been
prepared to provide a code of conduct for the executives and theemployees. The committee oversees corporate ethics throughout

JSR is involved in many activities that contribute to society, centered on activities at the local level. To further bolster the company’s activities in these areas, JSR established the Social
Contribution Committee in June 2008, under the CSR

the Group as well as provides guidance regarding specific items.
Along with the existing system for submitting reports to thiscommittee, JSR has added a new external reporting channel thatuses an outside attorney who provides advice from an objective

Committee with the executive managing director responsible
for CSR as committee chair. The Committee examines andimplements new programs by addressing how JSR should contribute to solve society’s issues in the good use of the compa-

stance. This provides a means for individuals to receive advice andtake actions at an early stage of a potential ethics problem.

ny’s unique characteristics.

7. Responsible Care Committee
JSR conducts a Responsible Care program to fulfill its obligations
to achieve sustainable development. The Responsible Care
Committee was established to ensure that Responsible Care
activities are conducted effectively across the entire company.
The committee is chaired by the director for safety environment
affairs, demonstrating Responsible Care’s position as a core component of JSR’s management.
This committee approves Responsible Care plans, evaluatesand verifies results of activities, and helps to maintain andupgrade JSR’s programs to eliminate accidents, reduce environmental impact and handle chemicals responsibly. Details andresults of Responsible Care activities are disclosed throughResponsible Care reports prepared by individual plants as well as
for the company as a whole. These reports are audited by third

10. Status of Internal Audits, Audits by Corporate
Auditors and Financial Audits
JSR has adopted the corporate auditor system. There are currently corporate auditors, including from outside the JSR Group.
These auditors have a staff of one individual. Audits are performed as described in item 4 concerning the Board of Auditors.
The corporate auditors work closely with the independent
financial accountant. The corporate auditors receive reports on
the financial accountant’s audit plan and audit results.
Furthermore, the corporate auditors and financial accountants
exchange information and opinions as necessary in the course ofeach fiscal year.
JSR has established the Internal Audit Department as a specialized internal auditing unit in order to reinforce all auditing functions associated with ensuring that internal controls arefunctioning in accordance with applicable laws and regulations.

ANNUAL REPORT 200923

11. Names and Affiliations of Accountants at
Independent Financial Accounting Firm
Assigned to Audit JSR
The certified public accountants assigned by the independent
financial accounting firm to audit JSR are Teruo Iida, Shinnosuke
Yamada and Masayuki Kawanishi. All three individuals are
employed by KPMG AZSA & Co. These individuals are assisted bythree certified public accountants among others.

managers of JSR and group companies.
Also, to get a firm grasp of the status of corporate ethics
throughout the entire JSR group, the company held a corporate
ethics awareness survey for all employees (August-September2007). This survey followed on from surveys held in fiscal 2005
and 2006. Survey results were fed back to all members of theGroup (April 2008) and are useful in corporate ethics initiatives at
each Group company. Through the survey results together withGroup-wide education and dissemination efforts JSR is working

12. Consulting Attorneys

to raise corporate ethics levels throughout the Group.

To receive consultations from attorneys, JSR uses the services of
the Tokyo Aoyama Aoki Koma Law Office, Shinpo Law Office andattorney Kiyotaka Ishikawa. JSR asks for advice from these offices

3. A risk management drill was conducted by the JSR head officeand plants to strengthen the risk management framework. Thisdrill confirmed that JSR can respond properly to an accident, fireor damage from a natural disaster at a plant. Drills cover thehead office Disaster Response Headquarters, the disaster
response departments at plants, corporate communications units

and person as required.

Actions during Past Fiscal Year to
Improve Corporate Governance
1. JSR revamped its Sustainability Report, which is centered on
the company’s stance regarding the three core elements of
CSR —economy, environment and community— by enhancing
information on CSR activities and renaming it the JSR CSR Reportand other components of the JSR organization (February 2008).
JSR is working to further implement accident and disaster prevention measures and further strengthen its disaster responsemanagement framework.

since fiscal 2007.
The report data undergoes third-party checks to heighten
transparency and reliability.

4. JSR conducts environmental and safety audits at all of its plants,

2. To promote corporate ethics activities, JSR renews the princi-

tic group companies and one overseas group company.

ples of JSR corporate ethics (September 2008) and established amultilingual hotline in addition to the existing Japanese one.
The company held ethics training for executives conducted by

5. To engage in thorough compliance efforts, JSR verified andoutside experts (November 2008) and such training for domestic

research facilities and manufacturing subsidiaries in Japan. In fiscal
2006, these audits were extended to include JSR Group companies
outside Japan. In fiscal 2009, audits were conducted at 11 domes-

improved the status of compliance of the whole group, including
overseas locations.

Shareholders’ Meeting
Appointment/
Dismissal

Reports

Board of Auditors

Supervision/
Reports

5 Corporate Auditors(including 3 external auditors)
Information

Appointment/
Dismissal

Reports

Board of Directors

Reports

Officers
Committee

Appointment/
Dismissal

JSR Corporation

Internal
auditsIndependent Financial
Accountants

Reports
Corporate Ethics
Committee

Representative
Directors

Responsible Care
Committee
CSR Committee

Executive Officers
10 Officers

24

Financialaudits

9 Directors

Executive
Committee

Internal Audit
Department

As of June 16, 2009

Appointment/
Dismissal

Business Operations

Risk Management
Committee
Social Contribution
Committee

Financial Section

26 ■ Management’s Discussion and Analysis
30 ■ Consolidated Balance Sheets
32 ■ Consolidated Statements of Income
33 ■ Consolidated Statements of Changes in Net Assets
34 ■ Consolidated Statements of Cash Flows
35 ■ Notes to Consolidated Financial Statements
48 ■ Independent Auditors’ ReportManagement’s Discussion and Analysis
Business Results for fiscal 2009
During the fiscal 2009 (April 1, 2008 to March 31, 2009), theJapanese economy continued to see mounting uncertainty amidst
concerns over sharp rises in crude oil prices in the first half of theyear, as well as a slow down in export growth, and gross domestic
product turning negative. In the second half, the global financial crisis led to lower stock prices throughout the world and an
appreciation of the yen. This had a large impact on the real economy, indicated by the rapidly decelerating world economy, resulting inan unprecedentedly severe economic recession.
In our main customers, which are the automobiles, automobile
tires, paper, semiconductors and flat panel display (FPD) sectors,
global demand has fallen quickly since the second half, inevitably
resulting in large production adjustments.
Under these circumstances, JSR Group’s petrochemicals businessweathered steep hikes in the major raw materials price, mainly causedby the sharp rise in the prices of crude oil. In addition, production
adjustments at the ethylene production plants at the petrochemicalcomplex, further limit availability of raw materials in the first half of fiscal 2009. We endeavored to revise the prices of our products as well
as secure our main raw materials to maintain profit margins with theaim of stabilizing earnings. In the fine chemicals and other products
business, which mainly comprises information electronics materials,
we continued to deliver cutting-edge materials as we focused on our
growth in the global market. The business environment rapidly deteriorated in the second half, and resultantly both the petrochemicals
business and fine chemicals and other products business took urgent
measures for earnings focused on cutting fixed costs, aimed at maintaining earnings. Despite these efforts, the rapid and large decline indemand resulted in a large drop in sales, with a large decline in earnings.
As a result, net sales decreased 13.4% to ¥352,502 million, operating
income declined 49.4% to ¥30,347 million, ordinary income decreased
44.5% to ¥31,111 million, and net income fell 62.2% to ¥13,981 million.

Results by Business Sector
Petrochemicals
Net sales in the elastomers division declined 8.6% from the previous year to ¥117,855 million, and operating income fell 28.1% toOperating Income & Operating Margin

Net Sales & Net Income(Billions of Yen)

(Billions of Yen)

400
300

406.9
338.1
305.3

365.8

40

352.5
36.9

33.6

30
20
13.9

100

FY’05
Net Sales (Left)

26

JSR Corporation

FY’06

(%)

80
15.8

FY’07

Net Income (Right)

FY’08

FY’09

40

16

14.7
15.1

60
53.3

200

0

(Billions of Yen)

14.8

30.5

27.5

¥8,026 million.
In the domestic synthetic rubber business, general-purpose synthetic rubbers such as styrene-butadiene rubber (SBR) andpolybutadiene rubber (BR) were impacted by limited availability of
raw materials due to ethylene center production adjustments, andthey faced the rapid drop in demand accompanying production
adjustments of automobile tires. Sales volume and net sales werelower than the previous year despite efforts to revise prices in
response to higher raw materials prices in the first half. For highperformance special-purpose rubber, efforts were made to revise
prices of acrylonitrile-butadiene rubber (NBR), thylene-propylene
rubber (EPR) and butyl rubber (IIR) in response to higher raw materials prices in the first half. Notwithstanding these undertakings, therapid fall in automobile production starting the second half resulted
in lower year-on-year sales volume and net sales. In exports, bothgeneral-purpose rubber and high-performance special-purpose rubber were affected by the rapid fall in production of automobiles andautomobile tires, resulting in lower sales volume and net sales.
JSR strove to revise domestic prices in the first half for thermoplastic
elastomers (TPEs) such as butadiene and styrene-butadiene block
copolymers, but starting the second half, demand fell due to production
declines in our main customers such as automobiles. Also in exports,
starting the second half, demand fell rapidly for butadiene thermoplastic elastomer (RB) in Europe and Latin America, thus the domestic
market and exports both saw lower sales volume and net sales.
As for production capacity, in order to cope with the mediumterm growing demand for solution polymerized styrene butadiene
rubber (S-SBR) for energy-efficient and high performance tires
and to diversify our raw materials procurement sources, wesecured the capacity rights of 30,000 tons for 50% of new production line of S-SBR, which began commercial production in
March 2009, from Dow Europe GmbH. We are determined toenhance the foundation of supplying high-quality products andfurther expand our businesses on global basis by utilizing production facilities both in Japan and Europe.
For earnings, we endeavored to increase sales of high-value-added
products while making cost reduction efforts through the CostReduction Plan “E-100 Projects.” Along with price revision efforts inthe first half in response to higher raw materials prices, in the second

12

60.0

55.2

8.6

45.3

8
30.3

10

20

0

0

4

FY’05

FY’06

Operating Income (Left)

FY’07

FY’08

FY’09

Operating Margin (Right)

0half, urgent measures for earnings were taken in the entire grouptargeting further cost reductions. Even with our concerted efforts,
decreased sales volume due to the rapid fall in demand had a large
impact, and profits fell far below the previous year.
In the emulsion division, net sales declined 13.2% to ¥23,432
million, and operating income declined 66.5% to ¥516 million.
As for paper coating latex (PCL), which is the main product inthe emulsion division, coated paper manufacturers put new lines
into operation one after another and usage volume grew in thefirst half, but starting the second half, the large drop in demandfor coated paper reduced sales volume and net sales below theprevious period. In acrylic emulsions, demand in the adhesives area
mainly for building materials and automobile uses fell starting inthe second half, resulting in acrylic emulsion sales volume and net
sales lower than the previous year.
For earnings, cost reduction efforts were made through the
Cost-Reduction Plan “E-100 Projects.” In the first half, price revision efforts were also made in response to higher raw materials
prices, and in the second half, urgent measures for earnings weretaken in the entire group targeting further cost reductions. Our
attempts could not prevent the decrease in sales volume as the
rapid fall in demand had a large impact, and profits fell far below
the previous period.
Net sales of the plastics division declined 5.8% to ¥64,829 million, and operating income declined 56.6% to ¥1,308 million.
In the domestic market, the first half saw favorable sales ofheat-resistant Acrylonitrile-butadiene-styrene (ABS) plastics andweatherproof Acrylonitrile-ethylene-propylene-styrene (AES) plastics and Acrylonitrile-styrene-acrylate (ASA) plastics for automotive
uses. Starting the second half, however, due to the impact of
declining automobile production and housing starts, demand forautomobiles, building materials and consumer electronics fell rapidly, with lower year-on-year sales volume and net sales. Exports
were affected by a rapid drop in demand starting the second half,
but growing sales in the entertainment sector resulted in sales
volume and net sales slightly higher than the previous year.
Unfortunately, this did not make up for the decline in Japan, so
the plastics division’s sales volume and sales were lower than theprevious year. On March 31, 2009, we terminated the businessTotal Assets & ROA
500

300

14.8
408.9

381.0

416.9

325.0
8.7

8.7

(%)

(Billions of Yen)

15

300

9
6

100
FY’06

Total Assets (Left)

15.5
212.7

200

15.0
239.9

15.2
257.6
241.9

12

182.4

8.2
4.1

FY’05

(%)

18
16.1

12

339.4

200

0

Fine Chemicals and Other Products
In the semiconductor materials division, lithography-related sales rose
sharply, thanks to increased demand for multi-layer materials necessary for argon fluoride (ArF) immersion lithography. Despite the initial
positive signs, photoresists (our main products) were impacted by thelarge fall in demand starting the second half due to production
adjustments at our customers and slumping business with some ofour major customers, resulting in lower net sales year-on-year. In
September 2008, we opened our Singapore representative office as abusiness base in Southeast Asia for advanced materials, especiallysemiconductor materials. Through this initiative, we are working tobe even more competitive in the most advanced materials sector.
In flat panel display materials, sales of liquid crystal display (LCD)
materials were initially steady with growing PC and LCD TV markets, but demand began to decline starting the middle of the first
half, especially for PCs, and sales were affected by falling prices due
to lower LCD panel production and the worsening supply/demandenvironment. Moving into the second half, further slowdown in
consumption due to the global recession also resulted in large
inventory adjustments in demand industries. These factors broughtlarge drops in demand, especially in Japan and Taiwan, resulting inlower net sales year-on-year.
In optical materials, optical fiber coating materials, the mainstream product of this division, saw lower domestic investment in

Shareholders‘ Equity & ROE(Billions of Yen)

400

partnership concerning a joint venture with Mitsubishi Chemical
Corporation, our joint investor in Techno Polymer Co., Ltd., whichis the core company of the plastics division. We acquired theentire 40% share held by Mitsubishi, making Techno Polymer afully owned subsidiary. With this we will strive for even faster
decision making and effective use of business resources, working
for a stronger plastics business in JSR.
For earnings, cost reduction efforts were made through the
Cost-Reduction Plan “E-100 Projects,” as well as efforts to revise
prices of our products in response to higher raw materials prices.
In the second half, urgent measures for earnings were taken in
the entire group targeting further cost reductions. However,decreased sales volume due to the rapid fall in demand had alarge impact, and profits fell far below the previous period.

FY’07
ROA (Right)

FY’08

FY’09

100

5.7

6

3
0

0

FY’05

FY’06

Shareholders‘ Equity (Left)

FY’07

FY’08

FY’09

0

ROE (Right)

ANNUAL REPORT 200927

fiber optic cable, and although optical fiber for exports was favorable in the first half, demand started to fall in the second half,
resulting in lower net sales year-on-year. Anti-reflective coating
materials and protective coatings materials saw more new adoption
in the high-value-added sector of higher definition flat panel TVs,
therefore, despite the rapid fall in demand during the second half,
net sales increased over the previous year. For ARTON®, a heat-resistant transparent resin, there was progress in resin sales and in the
precision process sector, but optical film manufacturers, the primaryusers of the product, saw harsher competition and slower demandin the second half, resulted in lower net sales year-on-year.
In earnings, prices came under increasing downward pressure
due to falling prices for major demand industry products. Under
such circumstances, we worked to boost sales of differentiatedproducts and promoted the Cost-Reduction Plan “E-100 Projects”
while taking urgent measures for earnings in the second half targeting further cost reductions in the entire group. But the decline insales volume due to the rapid fall in demand had a large impact,
resulting in a large profit decline year-on-year.
As a result of the above, net sales of fine chemicals and otherproducts declined 19.6% to ¥146,385 million, and operating
income declined 53.7% to ¥20,496 million.

Outlook
The Japanese economy in fiscal 2010 is likely to remain challenging
following fiscal 2009, which faced an unprecedented depression,
because we expect demand contraction in the wake of the dampened global economy and because worsened corporate earnings
have a full impact on personal spendings. Demand, particularly in
our main customers, namely, the automobile, tires, paper, semiconductors, and flat panel display industries, will remain sluggish, andrecovery is expected to take time.
Under these circumstances, based on the results of the two years
in the first half of “JUMP 2010,” the mid-term business plan for aperiod of four years beginning in fiscal 2008, the JSR Group largely
revised its numeric targets and action plan for the last two years starting from fiscal 2010. There is no change in our basic strategy of, “bycreating a group of next-stage growth businesses, and increase inearnings in the fine chemicals and other products business as well

the petrochemical products business.” In the petrochemicals sector
and in the fine chemicals and other products sector, especially, thesemiconductor materials business and flat panel display (FPD) materials business, JSR will work on thorough cost reductions andrebuilding business competitiveness. For next-stage growth businesses, JSR will strengthen its promotion system and resource allocationto accelerate their commercialization. By expediting these measures,
JSR will put all its power toward achieving targets on a growth pathagain when the market environment recovers.
Consequently, for fiscal 2010, it is projected to be a consolidated net
sales of ¥290.0 billion (down 17.7% from the previous year), operating
income of ¥15.0 billion (down 50.5%), ordinary income of ¥16 billion (down 48.6%), and net income of ¥10.0 billion (down 28.5%).
The above projections assume a yen exchange rate of 95 to thedollar and a naphtha price of ¥35,000 per kiloliter.

R&D Expenditures
R&D expenditures in fiscal 2009 amounted to ¥21,352 million as we
made substantial investments in the fine chemicals and other products sector and in next-stage growth businesses. Despite of the factthat we are faced with a situation to contract the entire budget for
fiscal 2010, the Company will speed up development and commercialization by increasing the amount of resource allocation as well as
its ratio to the strategic business.

Capital Expenditures
Capital expenditures amounted to ¥25,143 million in fiscal 2009. In
particular, a new production line is completed for S-SBR, of which we
acquired 50% capacity rights from Dow Europe GmbH. In the finechemicals and other products sector, we enhanced R&D facilities andproduction capacity in response to cutting-edge technologies insemiconductor materials and next-stage businesses. The Company
will reduce or freeze its capital expenditures for this year contingent
upon the earnings. Regarding the strategic business, we will execute
capital expenditures flexibly.

R&D Expenses & Capital Expenditures

Shareholder Return & Payout Ratio(Billions of Yen)

(Billions of yen)

30

18

29.0
23.3

20
18.1
16.4

16.5

17.7

6

10
0
0

FY’05
R&D Expenses

28

JSR Corporation

FY’06

FY’07

FY’08

Capital Expenditures

FY’09

40

5.4

19.0
13.0
2.7
3.6

FY’05

Dividend
14(Yen/Share)
Dividend (Left)

8.0

16.7
5.1

7.9
21.7

18.0

6.1

(%)

60

6.0

12

21.3

22.0
19.6

63.5
56.8
8.6

20

FY’06

FY’07

FY’08

FY’09

20

24

32

32

Shareholder Return (Left)

FY’10(Plan)
26

Payout Ratio (Right)

0

RISKSThe JSR Group is exposed to the following risks that may impact
its operating results, financial position, cash flows and otheraspects of performance. Forward-looking statements in this discussion are based on JSR’s judgment as of March 31, 2009.
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,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 JSRGroup’s operating results.
(2) Higher Prices for Crude Oil, Naphtha andOther Major Raw Materials
Higher prices for crude oil and naphtha, or changes in the markets
for JSR’s major raw materials, could raise prices of raw materials
and adversely affect the JSR Group’s operating results, especially inthe petrochemicals sector of elastomers, emulsions and plastics.
(3) Procurement of Raw Materials
The JSR Group works on ensuring a stable supply of raw materials
by procuring materials from a number of sources. However, aninterruption to the supply of raw materials due to an accident,
bankruptcy or quality problem at a supplier could adversely affectproduction activities and the JSR Group’s operating results.
(4) Development of New Products
Rapid technological progress is constantly taking place in theelectronics industry, which is the primary source of demand forsemiconductor manufacturing materials, FPD materials and optical materials, the major products of the JSR Group’s finechemicals and other products business. JSR is constantly working
on developing state-of-the-art materials in line with this 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.
(5) R&D Involving Next-Stage Growth Businesses
The JSR Group makes substantial investments in R&D to createnext-stage growth businesses. However, there is no guaranteethat 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.
(6) Protection of Intellectual Property
Protection of intellectual property is extremely important for the JSRGroup’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 anothercompany could adversely affect the JSR Group’s operating results.
(7) Product Quality Assurance and Product Liability
The JSR Group has a product quality assurance system and 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.

(8) Natural Disasters and Accidents
To minimize the negative effect on its business activities of any
disruption of manufacturing activities, all JSR Group manufacturing facilities have established countermeasures based on theidentification of all potential sources of a crisis and conduct periodic inspections of facilities. The group also works constantly on
safety measures with regard to earthquakes and other natural disasters. However, a major natural disaster or accident thatdamages a production facility or disrupts manufacturing could
adversely affect the JSR Group’s operating results.
(9) 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 many actions to prevent theexternal release of chemicals of all types.
However, in the event that a spill occurs or that environmental
regulations become more strict, the group’s business activities
could be restricted, the group may have to pay compensation andother expenses, or the group may have to make substantial capital expenditures. Any of these events could adversely affect the
JSR Group’s operating results.
(10) Overseas Operations
The JSR Group is aggressively expanding operations on a global
scale, conducting manufacturing, sales and other activities in countries and regions of the United States, Europe, Asia and other partsof the world. Overseas operations are exposed to a number of risks
that include, but are not limited to, an unfavorable political environment or economic trends; labor disputes and other problems due todifferences in labor laws and other working conditions; difficulty inrecruiting and retaining employees; an adverse impact on businessactivities 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.
(11) Laws and Regulations
In the countries where it operates, the JSR Group is subject to various
laws and regulations involving business and investment permits,
export and import activities, trade, labor relations, intellectual property, taxes, foreign exchange and other items. The group has establisheda clear compliance policy 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 more strict or issignificantly altered, there could be limitations on the group’s businessactivities or additional compliance costs. Any of these events could
adversely affect the JSR Group’s operating results.
(12) Litigation
In conjunction with its business activities in Japan and overseas,
the JSR Group may be sued or be involved in other litigation concerning a dispute with a supplier, customer or other external
party. The outcome of significant litigation could adversely affect
the JSR Group’s operating results.

ANNUAL REPORT 200929

Consolidated Balance Sheets
JSR Corporation
March 31, 2008 and 2009
Thousands of
U.S. dollars(Note 1)Millions of yen

ASSETS

2008

2009

2009

Current assets:
Cash (Note 3)¥

16,537¥

16,910$172,145

Notes and accounts receivable—trade (Note 4)

86,95452,782537,332

Marketable securities (Notes 3 and 5)

46,836

21,492

218,797

Inventories

72,31776,955

783,420

Other current assets (Notes 8 and 12)

36,00622,324

227,260

Total current assets

258,650

190,463

1,938,954

Buildings and structures

31,40729,290298,177

Machinery, equipment and vehicles

41,29532,591

331,780

Land

16,77816,870171,740

Construction in progress

8,142

4,097

41,709Other tangible assets

7,910

8,629

87,845105,532

91,477931,251

6,466

6,723

68,442

Investment securities (Note 5)

35,65624,159245,939

Longterm loans receivable

1,480

4,928

50,167

Deferred tax assets (Note 8)

3,906

8,703

88,602Other assets (Notes 4 and 12)

5,261

13,045

132,797

46,30350,835517,505

339,498$ 3,456,152

Property, plant and equipment (Notes 6 and 9):

Intangible assets

Investments and other non-current assets:¥
See accompanying notes.

30

JSR Corporation

416,951¥

Thousands of
U.S. dollars(Note 1)Millions of yen

LIABILITIES AND NET ASSETS

2008

2009

2009

Current liabilities:
Notes and accounts payable—trade¥

Short-term loans payable and current portion of long-term debt (Note 6)

83,445
16,808¥39,636$

403,497

14,340145,981

Other current liabilities (Notes 8 and 12)

37,46322,194225,945

Total current liabilities

137,716

76,170775,423

Employees retirement benefits (Note 7)

14,67914,821150,879

Allowance for environmental expenses

3,294

3,205

32,624

Other long-term liabilities (Notes 6, 8 and 12)

3,599

3,316

33,764

Total long-term liabilities

21,572

21,342

217,267

Long-term liabilities:

Contingent liabilities (Note 14)
Net assets (Note 10)
Shareholders’ equity
Common stock:
Authorized — 696,061,000 shares
Issued— 255,885,166 shares in 2008 and 2009

23,32023,320237,404

Capital surplus

25,17925,179256,331

Retained earnings

212,503

218,5152,224,526(13,623)(22,217)(226,173)

Less treasury stock, at cost
5,666,693 shares in 2008 and 11,648,666shares in 2009
Valuation and translation adjustments
Unrealized gains on securities, net of taxes

4,807

645

6,568

Foreign currency translation adjustments

353(4,546)(46,280)

Subscription rights to shares (Note 11)

194

311

3,162

Minority interests

4,930

779

7,924

Total net assets

257,663

241,986

2,463,462

339,498$ 3,456,152¥

416,951¥

ANNUAL REPORT 200931

Consolidated Statements of Income
JSR Corporation
Years ended March 31, 2007, 2008 and 2009
Thousands of
U.S. dollars(Note 1)Millions of yen

2007

Net sales (Note 16)

¥

2008

365,831¥2009

406,968¥2009

352,503$ 3,588,547

Costs and expenses (Notes 15 and 16):
Cost of sales

252,752

284,431

263,018

2,677,578

Selling, general and administrative expenses

57,83662,527

59,137602,025

310,588346,958

322,155

3,279,603

55,24360,01030,348308,944

Interest and dividend income

1,030

1,309

1,230

12,519Interest expenses

(399)

(256)

(271)

(2,757)——

Operating income (Note 16)
Other income (expenses):

Loss on disposal of inventories(2,791)(1,799)Gain (loss) on sale and disposal of property, plant and equipment(617)(1,574)

399

4,062

Foreign exchange gains (losses)

352(2,036)(993)(10,110)Equity in earnings of affiliated companies

1,439

1,249

1,150

11,706

Gain on sales of investment securities

282

377

—

—

Depreciation expenses of idle assets

(393)

(740)

(1,091)(11,109)

Impairment loss of fixed assets (Note 9)——(6,042)(61,512)

Loss on devaluation of investment securities——(1,887)(19,211)

Loss on devaluation of inventories——(1,686)(17,162)

Loss on disposal of asbestos

(461)

—

—

—

Loss on allowance for environmental expenses

(201)

—

—

—

Other — net(44)(1,673)(354)(3,590)(1,803)(5,143)(9,545)(97,164)

53,44054,86720,803211,780

Current

20,127

18,112

6,217

63,291

Deferred(1,136)

(776)

(76)

(776)

18,991

17,336

6,141

62,51534,44937,531

14,662

149,265

(794)

(537)

(681)

(6,934)

Income before income taxes and minority interests
Income taxes (Note 8):

Minority interests in net income of consolidated subsidiaries
Net income¥

33,655¥36,994¥

13,981$

U.S. dollars(Note 1)

Yen

2007

142,331

2008

2009

2009

Per share of common stock:
Net income

133.10¥147.26

¥

56.36

$

0.57

Diluted net income

133.06147.19

56.31

0.57

Cash dividends applicable to the year

24.00

32.00

32.00

0.33

See accompanying notes.

32¥

JSR Corporation

Consolidated Statements of Changes in Net Assets
JSR Corporation
Years ended March 31, 2007, 2008 and 2009
Millions of yen
Number ofshares ofcommon stock(thousands)

Balance at March 31, 2006
Net income
Increase of treasury stock
Disposal of treasury stock
Cash dividends paid
Bonuses to directors
Net changes other thanshareholders’ equity
Balance at March 31, 2007
Net income
Increase of treasury stock
Disposal of treasury stock
Cash dividends paid
Decrease resulting from increasein consolidated subsidiaries
Increase resulting from increase inaffiliated companies byequity method
Net changes other thanshareholders’ equity
Balance at March 31, 2008
Net income
Increase of treasury stock
Disposal of treasury stock
Cash dividends paid
Net changes other thanshareholders’ equity
Balance at March 31, 2009

255,885

Commonstock¥

23,320 ¥CapitalsurplusRetainedearnings

Unrealized
gains onTreasury stock securities,
net of taxes
at cost25,179 ¥ 155,434 ¥Foreigncurrencytranslation
adjustments

Subscription
rightsto shares

Minority
interests(2,898) ¥11,151 ¥

565 ¥

— ¥

3,957

—

—

—

33,655

—

—

—

—

—

—

—

—

—

(5,412)

—

—

—

—

—

—

—

(10)

10

—

—

—

—

—

—

—

(5,569)

—

—

—

—

—

—

—

—

(136)

—

—

—

—

—

—

—

—

—

—

(1,064)

961

70

773

255,885

23,32025,179183,374(8,300)10,087

1,526

70

4,730

—

—

—

36,994

—

—

—

—

—

—

—

—

—

(5,328)

—

—

—

—

—

—

—

(5)

5

—

—

—

—

—

—

—

(7,044)

—

—

—

—

—

—

—

—

(1,048)

—

—

—

—

—

—

—

—

232

—

—

—

—

—

—

—

—

—

—

(5,280)(1,173)124

200

255,885

23,32025,179212,503(13,623)

4,807

353

194

4,930

—

—

—

13,981

—

—

—

—

—

—

—

—

—

(8,611)

—

—

—

—

—

—

—

(10)

17

—

—

—

—

—

—

—

(7,959)

—

—

—

—

—

—

—

—

—

—

(4,162)(4,899)117(4,151)(4,546) ¥

311 ¥

779

50,186

255,885¥

23,320 ¥25,179 ¥ 218,515 ¥(22,217) ¥645 ¥Thousands of U.S. dollars (Note 1)

Balance at March 31, 2008
Net income
Increase of treasury stock
Disposal of treasury stock
Cash dividends paid
Net changes other thanshareholders’ equity
Balance at March 31, 2009

$ 237,404 $ 256,331 $2,163,324 $ (138,686) $—255,885—

48,933 $3,588 $

1,974 $

142,331

—

—

—

—

—

—

—

—

(87,668)

—

—

—

—

—

—

(103)

181

—

—

—

—

—

—

(81,026)

—

—

—

—

—

—

—

—

—

(42,365)(49,868)

1,188(42,262)

3,162 $

7,924

$ 237,404 $ 256,331 $2,224,526 $ (226,173) $6,568 $ (46,280) $See accompanying notes.

ANNUAL REPORT 200933

Consolidated Statements of Cash FlowsJSR Corporation
Years ended March 31, 2007, 2008 and 2009
Thousands of
U.S. dollars(Note 1)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 dividend income
Interest expenses
Equity in earnings of affiliated companies
Loss (gain) on sales and disposal of property, plant and equipment
Impairment loss of fixed assets
Loss on devaluation of investment securities
Loss (gain) on sales of investment securities
Changes in operating assets and liabilities—net:
Increase (decrease) in allowance for environmental expenses
Decrease (increase) in notes and accounts receivable — trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable — trade
Other
Total
Interest and dividends received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchase of property, plant and equipment and intangible assets
Payments for purchase of investment of subsidiaries and affiliates
Proceeds from sales of property, plant and equipment and intangible assets
Payments for purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Payments for 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 debt
Proceeds from long-term debt
Redemption of bonds
Cash dividends paid
Cash dividends paid to minority shareholders
Purchase of treasury stock
Other — net
Net cash used in financing activities
Effect of exchange rate changes 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)
See accompanying notes.

34

JSR Corporation

2007

2008

2009

2009

¥ 53,440¥ 54,867¥ 20,803$ 211,780

18,133(1,030)399(1,439)
617
—
—
(282)

21,180(1,309)256(1,249)
1,574
—
—
(377)

24,833(1,230)271(1,150)
—
6,042
1,887
(399)

252,806(12,519)
2,757(11,706)—
61,512
19,211(4,062)200(14,548)(6,685)8,814
6,820
64,4392,907(411)(20,463)
46,472—
5,379(5,693)(2,352)(79)
72,1972,530(254)(20,583)
53,890—30,235(7,105)(38,012)
11,21747,392
2,592(276)(15,787)
33,921—
307,797(72,330)(386,970)
114,187
482,463
26,391(2,810)(160,722)
345,322(26,218)—347(1,767)563—(4,166)
1,972(1,094)(30,363)(27,122)(491)—(1,653)601
500(2,683)
1,576(2,968)(32,240)(22,736)(6,384)
408
(636)
8
2,000
(5,802)
2,880(6,203)(36,465)(231,458)(64,993)
4,151(6,472)
81
20,360(59,067)
29,320(63,142)(371,220)(1,945)(2,306)
1,558(10,000)(5,566)(106)(5,412)
0(23,777)478(7,190)60,846

(222)
(476)
—
—
(7,033)(341)(5,329)0(13,401)
(819)
7,430
53,656(1,162)(1,234)——(7,974)(167)(8,612)(3)(19,152)(2,903)(24,599)
61,725(11,831)(12,566)——(81,177)(1,699)(87,668)(32)(194,973)(29,556)(250,427)
628,370—¥ 53,656

639¥ 61,725—¥ 37,126—$ 377,943

Notes to Consolidated Financial Statements
JSR Corporation
Years ended March 31, 2007, 2008 and 2009

1. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements of JSR
Corporation (the “Company”) and its consolidated subsidiaries
have been prepared in accordance with the provisions set forth in
the Japanese Securities and Exchange Law and its related
accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are
different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards.
The accounts of the Company’s overseas subsidiaries and affiliates are based on their accounting records maintained in conformity with generally accepted accounting principles prevailingin the respective countries of domicile and make necessary
amendments for consolidated financial statements. The accompanying consolidated financial statements have been restructured
and translated into English (with some expanded descriptions
and the inclusion of consolidated statement of changes in net
assets for 2006) from the consolidated financial statements of
the Company prepared in accordance with Japanese GAAP and
filed with the appropriate Local Finance Bureau of the Ministry of
Finance as required by the Japanese Securities and Exchange Law.
Some supplementary information included in the statutory
Japanese language consolidated financial statements, but notrequired for fair presentation, is not presented in the accompanying consolidated financial statements.
The translations of the Japanese yen amounts into U.S. dollars
are included solely for the convenience of readers outside Japan,
using the prevailing exchange rate at March 31, 2009, which was
98.23 to U.S.$1.00. The convenience translations should not be
construed as representations that the Japanese yen 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.

2. Summary of Significant Accounting Policies(a) Consolidation — The accompanying consolidated financial
statements include the accounts of the Company and its 28 significant
subsidiaries in 2008 and 2009 (26 significant subsidiaries in 2007).
All significant intercompany accounts and transactions havebeen eliminated in consolidation.
JSR Micro Taiwan Co., Ltd. and Elastomix (Foshan) Co., Ltd. havebeen consolidated since 2008 due to the principle of materiality.
(b) Equity method— Investments in affiliated companies (all of
those 20% to 50% owned and certain others 15% to 20% owned)
were accounted for by the equity method. Unconsolidated subsidiaries and the other affiliated companies are stated at cost since
their net income and retained earnings in the aggregate are notmaterial compared to consolidated net income and retained
earnings, respectively.
(c) Cash and cash equivalents — In preparing the consolidated
statements of cash flows, cash on hand, readily available deposits
and short-term highly liquid investments with maturities notexceeding three months at the time of purchase are considered
to be cash and cash equivalents.
(d) Marketable securities and investment securities — The
Company and its consolidated subsidiaries (the “Companies”)
had no trading securities or held-to-maturity debt securities.

Equity securities issued by subsidiaries and affiliated companies,
which are not consolidated or accounted for using the equity
method, are stated at moving-average cost. Available-for-salesecurities with available fair market values are stated at fair market value and unrealized gains and losses on these securities arereported, net of applicable income taxes, as a separate component of net assets. Realized gains and losses on sale of such securities are computed using moving-average cost. Available-for-salesecurities with no available fair market values are stated at moving-average cost or amortized cost.
(e) Inventories — Inventories are stated at cost, which is determined mainly based on the average method (for the value statedon the balance sheet, book value is written down to reflect thelower profitability ).
(i) The accounting change
Effective April 1, 2008, the Company and domestic consolidated subsidiaries adopted “Accounting Standard for Measurementof Inventories”(Statement No.9 by ASBJ on July 5, 2006). As aresult of this change, Operating income and Income before
income taxes and minority interests decreased by ¥2,859
million ($29,106 thousand), ¥1,934 million ($19,690 thousand) for the year ended March 31, 2009 respectively.
(f) Property, plant and equipment, and depreciation —Property, plant and equipment are stated at cost. Depreciation iscomputed using the declining-balance method at rates based on
their estimated useful lives except for buildings acquired after March
31, 1998, which are depreciated based on the straight-line method.
(i) The accounting change
Effective April 1, 2007, the Company and domestic consolidated subsidiaries changed the depreciation method for property, plant and equipment acquired on or after April 1, 2007
in accordance with the revised Corporation Tax Law of Japan.
As a result of this change, income before income taxes andminority interests decreased by ¥851 million for the year
ended March 31, 2008 from the corresponding amounts
which would have been recorded under the previous method.
(ii) Additional information
Effective April 1, 2008, the Company and its domestic consolidated subsidiaries reviewed the economic useful life todepreciate machinery and equipment, responding to therevision of the Corporation Tax Law of Japan. The impact of
this change did not have a material effect on net income.
Effective from the year ended March 31, 2008, the property, plant and equipment acquired before April 1, 2007 forwhich the allowable limit on the depreciable amount has beenreached are to be depreciated evenly over five years from thefollowing fiscal year. As a result of this change, income before
income taxes and minority interests decreased by ¥1,429 million for the year ended March 31, 2008.
(g) Intangible assets — Goodwill is amortized over five years
using the straight-line method.
Software for its own use is amortized over the estimated usefullife (five years) using the straight-line method.
(h) Lease assets —(i) The accounting change
Effective April 1, 2008, the Company and domestic consolidated

ANNUAL REPORT 200935

subsidiaries adopted “Accounting Standard for Lease
Transactions” (Statement No.13 by ASBJ on March 30, 2007) and
the Guidance on Accounting Standard for Lease Transactions(Implementation Guidance No.16 by ASBJ on March 30, 2007).
The method of accounting for finance leases that do nottransfer ownership of leased property to the lessee changed
from treating such leases as rental transactions to treatment assale/purchase transactions, recognizing them as lease assets.
Under the existing accounting standards, finance leases,
commenced prior to April 1,2008, which do not transfer
ownership of leased property to the lessee are permitted tobe accounted for in the same manner as operating leases if
certain “as if capitalized” information is disclosed in a noteto the lessee's financial statements.
The impacts of this change did not have a material effecton net income.
(i) Allowance for doubtful accounts — Allowance for doubtful
accounts is provided in amounts sufficient to cover possible losses
on collection. Allowance for doubtful accounts consists of theestimated uncollectible amount with respect to specific items,
and the amount calculated using the actual percentage of collection losses in the past with respect to other items.
(j) Severance and retirement benefits — Employees of theCompanies are entitled, under most circumstances, to lump-sum
severance payments or pension payments upon reaching the
mandatory retirement age, or earlier in the case of voluntary or
involuntary termination, based on the compensation at the timeof severance and years of service.
The Companies provided allowances and expenses for employees’ severance and retirement benefits at year-end based on theestimated amounts of projected benefits obligation and the fairvalue of the pension assets.
The prior service costs are recognized as expenses using thestraight-line method over three years, which falls within the estimated average remaining service lives, commencing with the following
period. Actuarial differences of the Company are recognized as
expenses at once in the following period, and some of consolidated
subsidiaries use the straight-line method over ten years within theestimated average remaining service lives, commencing with thefollowing period.
(K) Allowance for environmental expenses — An allowancefor expenses is provided bases on estimated costs for the disposalof Polychlorinated biphenyl (PCB) as mandated by the Law
Concerning Special Measures Against PCB Waste.
(l) Income taxes — The Companies provide for income taxes
applicable to all items included in the consolidated statements ofincome regardless of when such taxes are payable. Income taxes
based on temporary differences between tax and financial reporting
purposes are reflected as deferred income taxes in the consolidated
financial statements using the asset and liability method.
(m) Derivative and hedging activities — The Companies use
derivative financial instruments to manage their exposures to fluctuations in foreign exchange and interest rates. Foreign exchange
forward contracts, foreign currency swaps and interest rate swaps
are utilized by the Companies to reduce foreign currency
exchange and interest rate risks. The Companies do not enter into

36

JSR Corporation

derivatives for trading purposes or speculative purposes.
Derivative financial instruments and foreign currency transactions are classified and accounted for as follows:(i) All derivatives are recognized as either assets or liabilities andmeasured at fair value, and gains or losses on these derivative transactions are recognized in the consolidated statements of income.
(ii) For derivatives used for hedging purposes, if derivatives qualify for hedge accounting because of high correlation andeffectiveness between the hedging instruments and thehedged items, gains or losses on these derivatives aredeferred until maturity of the hedged transactions.
The interest rate swaps that qualify for hedge accounting andmeet specific matching criteria are not remeasured at market value,
but the differential paid or received under the swap agreements is
recognized and included in interest expense or income as incurred.
(n) Foreign currency transactions — The Companies translate
assets and liabilities denominated in foreign currencies into
Japanese yen at exchange rates prevailing at the balance sheet
dates. Resulting exchange gains or losses are credited or charged
to income as incurred.
(o) Translation of foreign currency financial statements —Financial statements of overseas subsidiaries are translated into
Japanese yen using the respective year-end rate for assets and liabilities, the average rate for revenues and expenses, and the historical rates for shareholders’ equity accounts. Foreign currencytranslation adjustments are contained in valuation and translation
adjustments and minority interests.
(p) Amounts per share of common stock — The computationof net income per share of common stock is based on the average number of shares outstanding during each fiscal year.
Treasury stock has been excluded in the calculation of amounts
per share of common stock.
Cash dividends per share represent actual amounts applicableto the respective years.
(q) Practical solution on unification of accounting policies
applied to foreign subsidiaries for consolidated financial
statements —(i) The accounting change
Effective April 1, 2008, the Company adopts “Practical
Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial Statements”(ASBJ Practical Issues Task Force No. 18 issued on May 17,2006). According to this rule, the Company made necessary
adjustments for significant differences between Japanese
GAAP and IFRS or U.S.GAAP. The adoption of this rule did
not have a material effect on net income.
(r) Accounting standard for statement of changes in net
assets — Effective for the year ended March 31, 2007, theCompanies adopted newly “Accounting Standard for Statement of
Changes in Net Assets” (Statement No.6 by ASBJ on December 27,2005), and “Implementation Guidance for the Accounting Standard
for Statement of Changes in Net Assets (Implementation Guidance
No.9 by ASBJ on December 27, 2005).
Accordingly, the Company prepared the statement of changes in
net assets for the year ended March 31, 2007. In addition, theThe adoption of these accounting standards did not have a material effect on net income.

Company voluntarily prepared the consolidated statement ofchanges in net assets for 2006 in accordance with these accounting
standards. Previously, the consolidated statements of shareholders'equity were prepared for the purpose of inclusion in the consolidated
financial statements although such statements were not required
under Japanese GAAP.

(t) Reclassifications — Certain prior years amounts have been
reclassified and restated to conform to the current year presentation.
Also, as described in Note 2 (s), in lieu of the consolidated statementof shareholders' equity for the year ended March 31, 2006, which was
prepared on a voluntary basis for inclusion in the 2006 consolidated
financial statements, the Company prepared the consolidated statements of changes in the net assets for the year ended March 31, 2006.
These reclassifications and restatements had no effect on previously reported results of operations or retained earnings.

(s) Stock options — Effective from the year ended March 31,
2007, the Company adopted newly “Accounting Standard for
Share-based Compensation” (Statement No.8 by ASBJ on December
27, 2005) and “Guidance on Accounting Standard for Share-based
Compensation” (Implementation Guidance No.11 by the ASBJ on
May 31, 2006).

3. Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2007, 2008 and 2009 consisted of the following:Thousands of
U.S. dollars

Millions of Yen

CashMarketable securities
Time deposits over three months
Cash and cash equivalents

2007

2008

2009

2009

¥ 14,586
39,418(348)¥ 53,656¥ 16,537
46,484(1,296)¥ 61,725¥ 16,910
21,492(1,277)¥ 37,125$ 172,145
218,797(12,999)$ 377,943

4. Allowance for doubtful accounts
Allowance for doubtful accounts of March 31, 2008 and 2009 were as follows:
Thousands of
U.S. dollars

Millions of Yen

Allowance for doubtful accounts
Current asset : Notes and accounts receivable—trade
Investments and other non-current assets:Other assets

2008

¥

(114)
(241)

2009

¥

2009

(554)
(148)

$ (5,638)(1,506)

5. Marketable Securities and Investment Securities(1) The following tables summarize the acquisition cost, book value and fair value of available-for-sale securities with available fair value
as of March 31, 2008 and 2009:(a) Securities with book value exceeding acquisition cost
Millions of Yen

Acquisition cost

Equity securities

¥

9,904

2008
Book value

Difference¥¥

19,272

9,368

Millions of Yen

Acquisition cost

Equity securities

¥

8,069

2009
Book value

Difference¥ 11,323¥

3,254

Thousands of U.S. dollars

Equity securities

Acquisition cost2009
Book value

Difference$ 82,147$ 115,274$ 33,127

ANNUAL REPORT 200937

(b) Securities with book value not exceeding acquisition cost
Millions of Yen

Acquisition cost

Equity securities

¥

3,428

2008
Book value

Difference¥¥ (1,189)

2,239

Millions of Yen

Acquisition cost

Equity securities

¥

6,040

2009
Book value

Difference¥¥ (2,114)

3,926

Thousands of U.S. dollars

Equity securities

Acquisition cost2009
Book value

Difference$ 61,492$ 39,965$ (21,527)(2) The following tables summarize the book value of available-for-sale securities with no available fair value as of March 31, 2008 and 2009:
Thousands of
U.S. dollars

Millions of Yen

2008

Non-listed equity securities
Commercial paper
Preferred subscription certificate
Certificate of deposit
Other
Total

¥

3,108
33,984
2,000
9,500
3,352
¥ 51,944

2009

2009

1,066
7,492
—
10,0004,000¥ 22,558$ 10,850
76,274—
101,80240,721$ 229,647¥(3) Redemption schedule of available-for-sale securities with fixed maturities are as follows:
Over oneyears
withinfive years

Withinone yearMarch 31, 2008:
March 31, 2009:¥ 46,484¥ 21,492¥¥

Over oneyears
withinfive years

Withinone yearMarch 31, 2009:$218,797

—
—

$

—

Millions of Yen
Over fiveyears
withinten years

¥
¥

—
—

Over ten
years

¥
¥

Thousands of U.S. dollars
Over fiveyears
withinten years

$

—

—
—

Total

¥ 46,484¥ 21,492

Over ten
years

$

—

Total

$218,797(4) Total sales of available-for-sale securities sold and the related gains and losses for the years ended March 31, 2007, 2008 and 2009
are as follows:
Thousands of
U.S. dollars

Millions of Yen

2007

Total sales
Gain
Loss

38

JSR Corporation

¥

563
282
—

2008

¥

493
377
—

2009

¥

8
—
2

2009

$

81
—
24

6. Short-Term Loans Payable and Long-Term Debt
Short-term loans payable represent primarily overdrafts from banks bearing interest at 1.4% and 1.2% per annum (weighted averageinterest rate) at March 31, 2008 and 2009, respectively.
Long-term debt at March 31, 2008 and 2009 consisted of the following:Thousands of
U.S. dollars

Millions of Yen

2008

2009

2009

1
2,739
2,740
(1,215)¥ 1,525

1
1,503
1,504
(4)
¥ 1,500

10
15,302
15,312(42)$ 15,270

—
—
—

18
(5)
13

189
(55)
134

Loans principally from banks and insurance companies due through2014 with interest rates 1.2% in 2008 and 2009:
SecuredUnsecuredLess amount due within one year

Lease liabilityLess amount due within one year

¥

¥

$

At March 31, 2009, property, plant and equipment, at book value of ¥10,912 million ($111,092 thousand) were pledged as collateralfor secured loans.
The annual maturities of long-term debt at March 31, 2009 were as follows:Year ending March 31,

Millions of Yen
Long-term loans
Lease liability
payable

2010
2011
2012
2013
2014
2015 and thereafter

¥

4

5
4
4
4
1

$

18

$15,312

¥

500
1,000

¥ 1,504¥

Thousands of U.S. dollars
Long-term loans
Lease liability
payable

42

$

55
42
42
42
8

$

189

5,090
10,1807. Employees’ Severance and Retirement Benefits
Employees’ retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2008 and 2009
consisted of the following:Thousands of
U.S. dollars

Millions of Yen

Projected benefit obligation
Less fair value of pension assets
Unfunded retirement benefit liabilities
Unrecognized prior service costs
Unrecognized actuarial differences
Net retirement benefit liabilities
Prepaid pension costs
Employees’ retirement benefits

2008

2009

2009

¥ 49,067(35,038)
14,02961(536)
13,554(1,125)¥ 14,679¥ 49,493(33,268)
16,225—(1,693)
14,532(289)¥ 14,821$ 503,853(338,678)
165,175—(17,241)
147,934(2,945)$ 150,879

ANNUAL REPORT 200939

Included in the consolidated statements of income for the years ended March 31, 2007, 2008 and 2009 were severance and retirement benefit expenses consisting of the following:Thousands of
U.S. dollars

Millions of Yen

Service costs—benefits earned during the year
Interest cost on projected benefits obligation
Expected return on plan assets
Amortization of prior service costs
Amortization of actuarial differences
Severance and retirement benefit expenses

2007

2008

2009

2009

¥ 1,729
878
(341)
(61)
(525)
¥ 1,680¥ 1,789
896
(445)
(61)
(51)
¥ 2,128¥ 2,292
877
(368)
(61)
417
¥ 3,157$23,334
8,931(3,752)(623)
4,248$32,138

The discount rates used by the Companies for the years ended
March 31, 2008 and 2009 are mainly 2.0% and 2.1%, respectively.
The rates of expected return on plan assets used by the Companies
for the years ended March 31, 2008 and 2009 are mainly 1.3% and1.1%, respectively. The estimated amount of all retirement benefits
to be paid at the future retirement date is allocated equally to eachservice year using the estimated number of total service years.

8. Income Taxes
Income taxes in the accompanying consolidated statements of income comprise corporation, enterprise and inhabitants’ taxes. The aggregated normal effective tax rate was approximately 40.7%.
The following table summarizes the significant differences between the statutory tax rate and the Companies’ effective tax rates for financial statement purposes for the years ended March 31, 2007, 2008 and 2009:
Statutory tax rate
Lower tax rates for foreign consolidated subsidiaries
Tax credit on research and development costs
Equity in earnings of affiliated companies
Valuation allowance
Other
Effective tax rate

2007

2008

2009

40.7%
(1.9)
(2.3)
(1.1)
0.6
(0.5)
35.5%

40.7%
(5.0)
(3.2)
(0.9)
(0.4)
0.4
31.6%

40.7%
(5.5)
(4.4)
(2.2)
3.0
(2.1)
29.5%

Significant components of the Companies’ deferred tax assets and liabilities as of March 31, 2008 and 2009 were as follows:
Thousands of
U.S. dollars

Millions of Yen

2008

Deferred tax assets:
Excess retirement benefits
Impairment loss of fixed assets
Excess bonuses accrued
Provision for environmental expenses
Unrealized gain on sale of property, plant and equipment
Unrealized gain on sale of inventories
Other
Sub-total
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Deferred gain on sale of fixed assets
Net unrealized holding gains on securities
Other
Total deferred tax liabilities
Net deferred tax assets

40

JSR Corporation

¥

¥

2009

2009

5,436
—
1,711
1,337
1,130
1,135
4,516
15,265(92)
15,173

¥

5,845
2,452
1,630
1,303
1,094
769
3,012
16,105(709)
15,396$ 59,501
24,95916,596
13,262
11,133
7,833
30,673
163,957(7,223)
156,734

2,656
3,315
1,199
7,170
8,003

2,963
447
902
4,312
¥ 11,084

30,1624,554
9,186
43,902$112,832

9. Impairment of Fixed Assets
The Companies recognized impairment losses on the following group of fixed assets for the year ended March 31, 2009.

Use

Facility for a heat-resistanttransparent resin
Facility for plastic products

Thousands of
U.S. dollars

Millions of Yen
Machinery,
Tools,
Buildings andequipment and furniture andstructures
vehiclesfixtures

Location

Ichihara City, Chiba Prefecture
Yokkaichi City, Mie Prefecture
Satte City, Saitama Prefecture

¥

455
781
256

¥ 1,950
1,921
245

¥

101
236
97

amountamount¥ 2,506
2,938
598$ 25,514
29,908
6,090

The companies have grouped their fixed assets into business units. Fixed assets that are idle or not being used for business activities
are assessed individually. The book value of machinery and equipment etc. was written down to its recoverable value.

10. 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 theprice of the new shares as additional paid-in capital, which isincluded in capital surplus.
Under the Japanese Corporate Law (“the Law”), in the casewhere a dividend distribution of surplus is made, the smaller of anamount equal to 10% of the dividends or the excess, if any, of 25%of common stock over the total of additional paid-in capital andlegal earnings reserve must be set aside as additional paid-in capitalor legal earnings reserve. Legal earnings reserve is included inretained earnings in the accompanying consolidated balance sheets.
Under Japanese Commercial Code (“the Code”), companies
were required to set aside an amount equal to at least 10% of theaggregate amount of cash dividends and other cash appropriations
as legal earnings reserve until the total of legal earnings reserve
and additional paid-in capital equaled 25% of common stock.
Under the Code, legal earnings reserve and additional paid-in
capital could be used to eliminate or reduce a deficit by a resolutionof the shareholders' meeting or could be capitalized by a resolutionof the Board of Directors. Under the Law, both of these appropriations generally require a resolution of the shareholders' meeting.
Additional paid-in capital and legal earnings reserve may not
be distributed as dividends. Under the Code, however, on condition that the total amount of legal earnings reserve and additional paid-in capital remained equal to or exceeded 25% ofcommon stock, they were available for distribution by the resolution of the shareholders' meeting. Under the Law, all additional
paid-in capital and all legal earnings reserve may be transferred
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 Japaneselaws and regulations.
At the annual shareholders meeting held on June 16, 2009,
the shareholders resolved cash dividends amounting to ¥3,908
million ($39,782 thousand). Such appropriations have not been
accrued in the consolidated financial statements as of March 31,
2009. Such appropriations are recognized in the period in which
they are resolved.

11. 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

June 16, 2006

June 15, 2007

June 13, 2008

The maximum number of shares to be issued
Exercisable period of the stock options

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

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

73,900 shares
From July 16, 2008
to July 15, 2028

39,100 shares
1$0.01

48,500 shares
1$0.01

73,900 shares
1$0.01

Stock subscription rights which have been vested
Outstanding as of March 31, 2008
Exercise price per share

ANNUAL REPORT 200941

12. 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 raterisks of trade receivables and payables denominated in foreign
currency. Foreign currency swap transactions are made in orderto 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 hedge instruments and the hedge items.
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 theCompanies represent major financial institutions that havehigh creditworthiness, 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.
(2) Quantitative disclosure about
The following contract amounts are only nominal or notionalamounts of derivatives, and do not necessarily indicate the magnitude of market risk associated with the derivative transactions.
Contract amounts, market values and recognized gains or losseson the derivative transactions, except those accounted for using
hedge accounting, at March 31, 2008 and 2009 were as follows:(a) Related to currencies
Millions of Yen
Contract amountMarch 31, 2008:
Items not traded on exchanges
Foreign exchange forward contracts
Selling: U.S. Dollars
Euro
Buying: U.S. Dollars
Euro
Swiss Franc
Foreign currency swaps
receiving Japanese Yen paying, Korea wonreceiving Japanese Yen paying, Taiwan dollar
Total
March 31, 2009:
Items not traded on exchanges
Foreign exchange forward contracts
Selling: U.S. Dollars
Euro
Buying: U.S. Dollars
Euro
Swiss Franc
Foreign currency swaps
receiving Japanese Yen paying, Korea wonreceiving Japanese Yen paying, Taiwan dollar
Total

42

JSR Corporation

Recognized
gains or losses

Over one year

Market value¥ 3,504
104
310
165
71

¥

—
—
—
—
—

¥ 3,332
106
293
165
73

4,315
5,739
¥
—

3,065
5,739
¥
—

(311)
137
—

¥ 5,041
415
38
51
5

¥

—
—
—
—
—

¥ 5,161
407
37
54
6

¥

3,065
5,739
¥
—

—
3,594
¥
—

804
1,066
¥
—

804
1,066
¥ 1,761

¥

¥

¥

172
(2)
(17)
(0)
2
(311)
137
(19)

(120)
8
(1)
3
1

Thousands of U.S. dollars
Over one year

Market value

Recognized
gains or losses$51,322
4,226
382
521
52

$

—
—
—
—
—

$52,543
4,138
375
550
57

$(1,221)
88
(7)
29
5

31,20458,420$——36,584$—

8,188
10,853$—

8,188
10,853$17,935

Contract amountMarch 31, 2009:
Items not traded on exchanges
Foreign exchange forward contracts
Selling: U.S. Dollars
Euro
Buying: U.S. Dollars
Euro
Swiss Franc
Foreign currency swaps
receiving Japanese Yen paying, Korea wonreceiving Japanese Yen paying, Taiwan dollar
TotalMarket values are calculated using foreign exchange forward rates.
(b)Related to interests
Interest rate swap contracts, for which hedge accounting is adopted, are excluded from being an object of disclosure.

13. Information for Certain Lease Payments
As described in Note 1.(h), under the existing accounting standards, finance leases, commenced prior to April 1, 2008, which do not transfer
ownership of leased property to the lessee are accounted for in the same manner of operating leases:(1) Equivalent amounts of purchase price, accumulated depreciation and book value of leased properties were as follows (including theinterest portion thereon):Thousands of
U.S. dollars

Millions of Yen

Machinery, equipment and vehicles:
Purchase price equivalent
Accumulated depreciation equivalentBook value equivalent
Tools, furniture and fixtures:
Purchase price equivalent
Accumulated depreciation equivalentBook value equivalent
Total:
Purchase price equivalent
Accumulated depreciation equivalentBook value equivalent

2008

2009

2009

¥

¥

37
20
17

$ 378
207
$ 171

¥ 660
506
¥ 154

¥ 101
60
¥
41

$1,030
606
$ 424

¥ 702
523
¥ 179

¥ 138
80
¥
58

$ 1,408
813
$ 595

¥

42
17
25

¥

(2) Lease commitments (including the interest portion thereon):Thousands of
U.S. dollars

Millions of Yen

Due within one year
Due over one year

2008

2009

2009

¥ 120
59
¥ 179

¥

$ 257
338
$ 595

¥

25
33
58

(3) Lease expenses and depreciation equivalent:Thousands of
U.S. dollars

Millions of Yen

Lease expenses
Depreciation equivalent

2007

2008

2009

2009

¥ 145
145

¥ 147
147

¥ 119
119

$ 1,209
1,209

Depreciation equivalent is computed using the straight-line method over the term of each lease with no residual value.
There is no impairment loss on finance leases.
ANNUAL REPORT 200943

14. Contingent Liabilities

15. Research and Development Expenses

At March 31, 2009, the Company and certain consolidated subsidiaries were contingently liable as guarantors for loans of employees and others in the amount of ¥77 million ($790 thousand).

Research and development expenses of the Companies for theyears ended March 31, 2007, 2008 and 2009 were ¥17,390 million, ¥19,118 million and ¥21,061 million ($214,405 thousand),
respectively, which are included in selling, general and administrative expenses or manufacturing costs.

16. Segment Information
The Companies’ business segments are classified into the following four business segments ranked in order of importance: (1) elastomers business (2) emulsions business, (3) plastics business, and (4) 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, 2007, 2008 and 2009 was as follows:

Elastomers

For 2007:Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets
Depreciation and amortization
Capital expenditures
For 2008:
Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets
Depreciation and amortization
Capital expenditures
For 2009:
Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets
Depreciation and amortization
Impairment loss
Capital expenditures

¥

¥
¥

¥

¥
¥

¥

¥
¥

Emulsions

Plastics

Millions of Yen
Finechemicals
and otherproducts

Total

Elimination
and/orcorporate

Consolidated

116,250 ¥536
104,417
12,369 ¥
129,896 ¥
4,357
5,916

24,362 ¥3,576
26,161
1,777 ¥
25,031 ¥
1,381
1,625

64,614 ¥—60,7493,865 ¥
35,200 ¥
1,523
1,257

160,605 ¥12,966
132,839
40,732 ¥147,999 ¥10,042
12,382365,831 ¥17,078324,166
58,743 ¥338,126 ¥
17,303
21,180— ¥(17,078)(13,578)(3,500) ¥70,823 ¥830
914

365,831—
310,588
55,243408,949
18,13322,094

128,953 ¥537
118,322
11,168 ¥
130,586 ¥
5,075
7,185

26,994 ¥
4,300
29,752
1,542 ¥
24,861 ¥
1,501
1,226

68,845 ¥—
65,832
3,013 ¥
34,375 ¥
1,546
1,835

182,176 ¥
15,358153,247
44,287 ¥160,524 ¥
13,05818,831

406,968 ¥20,195367,153
60,010 ¥350,346 ¥21,18029,077— ¥(20,195)(20,195)— ¥66,605 ¥——406,968—
346,958
60,010416,951
21,18029,077

117,856 ¥522
110,351
8,027 ¥
120,322 ¥
6,001
—
6,205

23,433 ¥4,180
27,096517 ¥
19,313 ¥
1,787
—
2,039

64,829 ¥—63,521
1,308 ¥
30,145 ¥
1,619
598
1,640

146,385 ¥
16,931
142,820
20,496 ¥131,341 ¥
15,4265,444
9,198

352,503 ¥21,633
343,788
30,348 ¥
301,121 ¥
24,833
6,042
19,082— ¥(21,633)(21,633)— ¥38,377 ¥———352,503—
322,155
30,348339,498
24,833
6,042
19,802Thousands of U.S. dollars

For 2009:
Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets
Depreciation and amortization
Impairment loss
Capital expenditures

44

JSR Corporation$ 1,199,791 $
5,313
1,123,391$
81,713 $$ 1,224,900 $
61,090—63,168238,552 $
42,554
275,847
5,259 $
196,610 $18,192—
20,761

659,976 $ 1,490,228 $ 3,588,547 $— $ 3,588,547—
172,364
220,231(220,231)—
646,658 1,453,938 3,499,834(220,231) 3,279,603
13,318 $ 208,654 $ 308,944 $— $ 308,944
306,877 $ 1,337,080 $ 3,065,467 $ 390,685 $ 3,456,152
16,482
157,042
252,806—
252,806
6,090
55,422
61,512—
61,512
16,68993,636
194,254—
194,254

Costs and expenses in elimination and/or corporate that cannot
be allocated to business segments are related mainly to fundamental research and development. Assets in elimination and/or corporate are related mainly to Cash, Marketable Securities andInvestment Securities of the Company. Capital expenditures are recognized on an accrual basis.
Effective from the year ended March 31, 2008, fundamental
research and development costs previously reflected as Costs andexpenses in elimination and/or corporate have been involved in
Costs and expenses in Fine chemicals and other products, as a resultof research and development activities. Those of the Companies forthe years ended March 31, 2007 were ¥3,500 million.
As noted in Note 2. (e) (i) , effective April 1,2008, the Company
and its domestic consolidated subsidiaries adopt the “AccountingStandards for Measurement of Inventories” (Statement No. 9, by
ASBJ ,on July 5, 2006), and use the value method to devaluate abook value to reflect the lower profitability. As a result of thischange, the operating income decreased ¥1,102 million ($11,214

thousand) in Elastomers segment, ¥17 million ($171 thousand) in
Emulsions segment, ¥57 million ($583 thousand) in Plastics segment and ¥1,683 million ($17,138 thousand) in Fine chemicals andother products segment.
As noted in Note 2. (f) (i), effective April 1,2007, the Company
and its domestic consolidated subsidiaries changed depreciation
method. As a result of this change, depreciation expenses
increased ¥178 million in Elastomers segment, ¥41 million in
Emulsions segment, ¥51 million in Plastics segment and ¥581 million in Fine chemicals and other products segment.
Also, effective from the year ended March 31, 2008, the property, plant and equipment acquired before April 1, 2007 for which
the allowable limit on the depreciable amount has been reached
are to be depreciated evenly over five years from the following fiscal year. As a result of this change, depreciation expenses
increased ¥889 million in Elastomers segment, ¥252 million in
Emulsions segment, ¥60 million in Plastics segment and ¥180 million in Fine chemicals and other products segment.

Geographic segment information with respect to net sales, costs and expenses, operating income, and identifiable assets for the years
ended March 31, 2007, 2008 and 2009 was as follows:
Millions of Yen

Japan

Asia

For 2007:Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets¥ 308,459
31,583287,357¥
52,685¥ 299,981¥

For 2008:
Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets¥ 308,758
64,878319,680¥
53,956¥ 296,347¥

For 2009:
Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets¥ 262,324
54,040291,227¥
25,137¥ 257,380

¥

¥
¥

¥
¥

¥
¥

Others36,4471,181
35,366
2,262
18,425¥74,552
67
70,236
4,383
34,874¥71,65572
67,9393,788
28,222

¥

¥
¥

¥
¥

¥
¥

Elimination
and/orCorporate

Total

20,925788
17,917
3,796
19,721¥ 365,831
33,552
340,640¥
58,743¥ 338,127¥

23,6584,423
26,4101,671
19,125¥ 406,968
69,368416,326¥
60,010¥ 350,346¥

18,5244,600
21,701
1,423
15,519¥ 352,503
58,712
380,867¥
30,348¥ 301,121

¥

¥
¥

¥
¥

¥
¥

Consolidated— ¥ 365,831—(33,552)
310,588(30,052)
55,243(3,500) ¥70,822 ¥ 408,949— ¥ 406,968—(69,368)
346,958(69,368)
60,010— ¥66,605 ¥ 416,951— ¥ 352,503—(58,712)322,155(58,712)30,348— ¥38,377 ¥ 339,498

Thousands of U.S. dollars

For 2009:
Sales to outside customers
Inter-segment sales/transfers
Costs and expenses
Operating income
Identifiable assets$ 2,670,512
550,1312,964,746$ 255,897$ 2,620,177$ 729,460
737
691,632$
38,565$ 287,309$ 188,575
46,830220,923$
14,482$ 157,981$ 3,588,547
597,698
3,877,301$ 308,944$ 3,065,467— $ 3,588,547—(597,698)
3,279,603(597,698)$— $ 308,944$ 390,685 $ 3,456,152$

ANNUAL REPORT 200945

The geographical segments consist of Japan, Asia and Others. Effective from the year ended March 31, 2008, the region previously
reflected as Others has been divided into Asia and Others, considering the materiality of the sales of Asia. Main countries and regions
included in each geographical segment were as follows;
Asia : China, Korea, Taiwan, Thailand
Others : United States, Belgium
Overseas sales for the years ended March 31, 2007, 2008 and 2009 were as follows:
Asia

Millions of Yen
North America
OthersTotal

For 2007:
Overseas sales
Consolidated net sales
Percentage of overseas sales to consolidated sales¥ 111,431
—
30.5%

¥

14,089—3.9%¥15,152—
4.1%¥ 140,672
365,83138.5%

For 2008:
Overseas sales
Consolidated net sales
Percentage of overseas sales to consolidated sales¥ 133,837
—
32.9%

¥

15,864—
3.9%¥

16,689—4.1%¥ 166,390
406,968
40.9%

For 2009:
Overseas sales
Consolidated net sales
Percentage of overseas sales to consolidated sales¥ 117,657
—
33.4%

¥

12,078—
3.4%¥

13,811—
3.9%¥ 143,546
352,503
40.7%

Thousands of U.S. dollars

For 2009:
Overseas sales
Consolidated net sales$ 1,197,772—$ 122,955—$ 140,601—$ 1,461,328
3,588,547

Overseas sales are segmented into Asia, North America and Others. Main countries and regions included in each segment were as follows;
Asia : China, Korea, Taiwan, Thailand, Singapore
North America : United States
Others : Europe

46

JSR Corporation

17. Related Parties
Significant transactions and balances with related parties as of and for the years ended March 31, 2007, 2008 and 2009 were as follows:
Thousands of
U.S. dollars

Millions of Yen

2007

2008

2009

2009

¥ 36,542
16,180¥ 38,878
12,855¥ 38,663
9,157$ 393,597
93,225

10,650
5,613
5,604
3,273

12,117
5,435——

10,867
4,219——

110,633
42,954
—
—

—
—

—
—

3,000
3,000

30,54130,541

12,419
5,953
10,196
5,077

13,632
6,507
11,642
5,327

—
—
—
—

—
—
—
—

BRIDGESTONE Corporation (a major shareholder):Sales
Notes and accounts receivable
KRATON JSR Elastomers K.K. (an affiliated company):
Purchases
Notes and accounts payable
Provision of materials for processing
Accounts receivable — other
JM Energy Corporation (an affiliated company):
Loans
Loans receivable
Tobu Butadiene Co., Ltd. (an affiliated company):
Purchases
Notes and accounts payable
Provision of materials for processing
Accounts receivable — other

18. Subsequent Events
At the June 16, 2009 annual meeting, the Companys shareholders approved the following appropriations of retained earnings: Paymentof a year-end cash dividend of ¥16.00 per share aggregating ¥3,908 million ($39,782 thousand).

ANNUAL REPORT 200947

Independent Auditors’ Report

48

JSR Corporation

Comp any Network
HEAD OFFICEJSR Corporation : 1-9-2, Higashi-Shinbashi, Minato-ku, Tokyo 105-8640, Japan

BRANCH OFFICES
Nagoya Branch, Wallisellen Branch, Shanghai Office, Taiwan Office, Singapore Office

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

Business Segment / Company Name / Purpose of Enterprise■ Fine Chemicals Business*Equity method affiliate■ Elastomers Business

JSR MICROTECH INC.
Production and sales of printed circuit boards and IC testing fixtures.

Kyushu Gomu Kako Co., Ltd.
Compounding of crude rubber and sales of compounded products.

D-MEC LTD.
Commissioned generation of 3D models, sales of solid modeling systems
and optically-hardened resins, and commissioned analysis by CAE.

ELASTOMIX CO., LTD.
Compounding of crude rubber and sales of compounded products.

JSR Micro Kyushu Co., Ltd.
Production of photoresists for semiconductors and materials for flat
panel displays.
JSR Optech Tsukuba Co., Ltd.
Production of UV curing type optical fiber coating materials.
JAPAN FINE COATINGS Co., Ltd.*Sales of coating materials for fiber-optic cables reinforced by ultraviolet
or electron radiation and for other apparatus.
JSR Micro N.V.
Production and sales of semiconductor materials.
JSR Micro, Inc.
Production and sales of semiconductor materials.
JSR Micro Korea Co., Ltd.
Design, development, production and sales of materials forflat panel displays and others.
JSR Micro Taiwan Co., Ltd.
Design, development, production and sales of materials for flat panel displays.
JM Energy Corporation
Design, development, product and sales of lithium ion capacitors.
Tri Chemical Laboratories, Inc.*
Production and sales of precursors for semiconductors, optical fiber andcompound semiconductor and others.

■ Business in Other Fields
JSR Trading CO., LTD.
Exports and Imports, purchase and Sales of the following: Various chemicals,
machinery, equipment, physical distribution materials, living necessaries,
foodstuffs, beverages, real estate.
JSR LOGISTICS CO., LTD.
Freight forwarding, warehousing, delivery management.
JSR ENGINEERING CO., LTD.
Engineering and consultation for chemical engineering equipment.
JSR Business Service Co., Ltd.
Non-life insurance agency, purchase, sales and leasing of real estate, undertak
ing of financing, payroll accounting calculation. Development and sales ofcomputer software and hardware.

Japan Butyl Co., Ltd.*
Production and sales of butyl rubber.
KRATON JSR ELASTOMERS K.K.*
Production, purchase, and sales of thermoplastic rubber.
JSR AMERICA, INC.
Sales of synthetic rubber.
Kumho Polychem Co., Ltd.*
Production and sales of EPR.
ELASTOMIX (THAILAND) CO., LTD.
Compounding of crude rubber and sales of compounded products.
ELASTOMIX (FOSHAN) CO., LTD.
Compounding of crude rubber and sales of compounded products.
Tianjin Kuo Cheng Rubber Industry Co., Ltd.*
Compounding of crude rubber and sales of compounded products.

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

■ Plastics BusinessJAPAN COLORING CO., LTD.
Coloring of synthetic resin and sales of colored products.
Techno Polymer Co., Ltd.
Production, sales and R&D of ABS resin.
TECHNO POLYMER HONG KONG CO., LTD.
Sales and technical services of synthetic resin in Hong Kong andneighboring regions.
Techno Polymer (Thailand) Co., Ltd.
Sales and technical services of synthetic resin in ASEAN region.
Techno Polymer (Shanghai) Co., Ltd.
Sales and technical services of synthetic resin in China.
TECHNO POLYMER AMERICA, INC.
Sales of plastics, technical services related to plastics in North America.
Shanghai Rainbow Color Plastics Co., Ltd.
Coloring of synthetic resin and sales of colored products.

Nichigo Kogyo Co., Ltd.
Product packaging, undertaking of civil engineering & general construction.

ANNUAL REPORT 200949

Corporate Data
(A s of June 16, 2009)

Directors and Corporate Auditors
Yoshinori YoshidaCompany NameJSR Corporation

Representative Director and Chairman

Mitsunobu Koshiba
Representative Director and President, Management, Strategic Businesses

Established
December 10, 1957

Tsugio Haruki
Executive Managing Director, CSR, Accounting, Finance,
Corporate Communications

Seiichi Hasegawa
Executive Managing Director, Procurement, Logistics,
Group Companies Coordination, Information Technology

Masaki Hirose
Managing Director, Corporate Planning, Human Resources Development,
General Affairs and Legal

Hozumi SatoManaging Director, Research & Development, Precision Process Technologies

Yasuki Sajima
Managing Director, Fine Chemicals Sector

Kouichi Kawasaki
Director and Senior Officer, Petrochemicals Sector (including Plastics),
Safety Environment Affairs

Hisao Hasegawa
Director and Senior Officer, Manufacturing and Technology,
Product Safety & Quality Assurance

Yoshio Tamaki

Capital¥23,320,165,484

Employees
5,256 (As of March 31, 2009)

Main Products (Businesses)<Petrochemicals>
Elastomers :General-purpose synthetic rubber, special-purpose synthetic rubber,thermoplastic elastomers, and others
Emulsions:
Paper coating latex, general-purpose latex
Plastics:
ABS, AES, AS, ASA plastics

Corporate Auditor (Full-time)

Nobuo Bessho
Corporate Auditor (Full-time)

Kenji Ito
Corporate Auditor<Fine Chemicals and Other Products>
Semiconductor Materials:
Photoresists, CMP materials, packaging and assembly materials,
antireflective coating materials

Hiroichi Uekusa
Corporate Auditor

Nobuko Kato

Display Materials:
Color LCD materials, PDP materials

Corporate Auditor

Officers
Toshiyuki Fujimoto

Optical Materials:
Optical fiber coating materials, functional coating materials,
antireflection treatment, heat-resistant transparent resin and film

Senior Officer, Vice President of JSR Trading Co., Ltd.

Atsushi Kumano
Senior Officer, General Manager of Yokkaichi Research Centerand Display Materials Research Lab.

Shin-ichiro Iwanaga
Senior Officer, General Manager of Tsukuba Research Lab.

Yasuhisa Nagahiro
Senior Officer, Yokkaichi Plant Manager

Yoshiyuki Ohashi
Officer, President of JSR Micro Taiwan Co., Ltd.

Takashi Wakabayashi
Officer, General Manager of Fine Chemicals Business Planning Department

Performance Chemicals:
Functional materials, industrial particles, particles for applicationin clinical diagnosis

Closing Date
JSR’s books are closed on March 31 each year.

Regular General Meeting
The regular general meeting of shareholders is held in June each year.
The 2009 regular general meeting was held on June 16.

Tatsushi Kawai
Officer, Vice President of Kumho Polychem Co., Ltd.

Takashi Ukachi
Officer, President of Japan Fine Coatings Co., Ltd.
and JSR Optech Tsukuba Co., Ltd.

Nobuo Kawahashi
Officer, General Manager of Electronic Materials Division

Takatoshi Nagatomo
Officer, Deputy General Manager of Petorochemical Products Division

Transfer Agent and Register
The Chuo Mitsui Trust and Banking Co., Ltd.

Auditors
KPMG AZSA & Co.

Home Page
URL http://www.jsr.co.jp/jsr_e/index.html

50

JSR Corporation

Investor Informa tion
(A s of M a rch 31, 2009)

Number of Shares Issued

Common Stock Price Range

255,885,166 shares(Tokyo Stock Exchange)

Number of Shareholders

FY200225,491
FY2003Major Shareholders
Percentage Number ofof shares shares held
held (%) (thousands)

Name

Bridgestone Corporation
Japan Trustee Services Bank, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account 4)
The Master Trust Bank of Japan, Ltd.
(Number of Retirement Allowance Trust Sharesof Mitsubishi Chemical Corporation)
The Master Trust Bank of Japan, Ltd. (Trust Account)
Mizuho Corporate Bank, Ltd.
Nippon Life Insurance Company
The Chase Manhattan Bank 385036
Meiji Yasuda Life Insurance Company
Mellon Bank, N.A. as Agent for its Client
Mellon Omnibus US Pension

FY2004
FY20054.40
4.40

40,866
11,28011,278

3.86

9,888

FY2008

3.61
3.48
2.34
1.91

9,247

FY2009

15.97

8,925
5,998

1.57

4,897
4,034

1.50

3,842

FY2006
FY2007

High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low

1st quarter2nd quarter3rd quarter

4th quarter

1,005
685
1,135
856
1,477
1,141
2,520
1,892
2,395
2,000
3,710
2,535
2,985
2,540
2,460
2,000

945
599
1,033
780
2,080
1,429
2,180
1,655
2,635
2,175
2,930
2,280
3,120
2,445
2,180
1,246

910
650
1,238
900
2,540
1,795
2,265
1,790
3,150
2,370
3,170
2,505
3,020
2,465
1,397
795

963
815
1,282
1,109
2,435
2,055
2,255
2,040
3,810
3,040
3,240
2,530
2,875
1,886
1,312
990

’08/10’09/5

Securities Traded Common Stock
Tokyo Stock Exchange
Osaka Securities ExchangeMonthly Stock Price
Composition of Shareholders(Yen)

Shareholders by category

NumberShares held
(thousands)

3,500

Individuals and Others
Foreign Corporation and Individuals
Other Corporations
Financial Institutions
Securities Companies
Total

22,974364

26,207
72,387

3,000

344
139
57
23,87861,35793,4932,440
255,885

Foreign investors

26.77%

Individuals/others

2,000

Financial institutions& securities companies

1,500

37.64%

1,000

By type ofshareholders

11.76%

2,500

500
’07/4

’07/10’08/4

Domestic
corporations

23.83%
1 tangen or more

Less than 1 tangen

4.70%

0.02%

50 tangen or more

3.81%

500 tangen or more

1.91%

By number ofshares held
1,000 tangen or more

89.56%

ANNUAL REPORT 200951

Shiodome Sumitomo Bldg.
1-9-2 Higashi-Shinbashi, Minato-ku, Tokyo
105-8640, Japan
Telephone:03-6218-3517
Facsimile:03-6218-3684

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

Printed in Japan 09-07IM