Corporate Report

2020

Year ended March 31, 2020

P
S
J
T
U
O
B
A

GLOBAL SUPPLIER OF
FOAMED PRODUCTS
JSP is a market leader in the engineered foamed products industry
and has been pioneering foamed products since its founding in
1962. We develop products that take full advantage of the potentialof foamed products for virtually every field of industry, where they
contribute to developing industry and enriching people’s lives
around the world.

Automotive

JSP technologies offer a wide range of performance benefits to automobile
manufacturers, from enhancing collision safety performance to reducing
vehicle weight and improving fuel efficiency. JSP supplies leading automakers
with automotive components that take full advantage of the unique capabilities
of high-performance foamed products, highlighted by our revolutionary
lightweight and shock-absorbent ARPRO (Expanded Poly Propylene) material.

Construction

JSP insulation materials contribute to creating comfortable home living
environments by providing exceptional insulation performance for heat andcold retention and water shedding. Our core expanded polystyrene product
MIRAFOAM is widely used in homes, apartment and office buildings, and otherlarge structures and by commercial operators with refrigerated warehouses.

Civil engineering

JSP products help ensure the safety of social infrastructure as key components
in road construction, soft-ground stabilization, landslide prevention, and othercivil engineering applications. Our STYRODIA BLOCK products combining
expandable polystyrene and lightweight mortar wall surfacing materials enable
fast and easy wall construction. The blocks, which are lightweight, easy to workwith, and highly resistant to corrosion, make the most of the unique characteristics
of foamed materials to provide new value in the civil engineering field.

CONTENTSCORPORATEPHILOSOPHY

Creatively and Actively
Contribute to Society
We have cultivated our business activities in linewith our deep respect for the natural environment and design each of our products from theearliest R&D stages to have minimal impact on
the environment.
JSP is creating new value for customers worldwide through engineered foamed products utilizing our leading capabilities developing productsthat “break the mold” of existing concepts,
proposing products and materials that meetcurrent and future market needs, and supplying
customers from a worldwide network of production bases.

Food packaging

JSP food packaging materials play an integral role in food safety. Our
STYRENE PAPER expanded polystyrene sheet is used as insulation in hot
and cold containers to preserve the freshness of fish, meat, and vegetables
during transport. We are constantly developing products offering both highperformance and convenience to meet the evolving lifestyle needs and foodpreferences.

01

01

Value Creation Stories
Our history

03

Our value creation process

05

Operational Review
The year in brief07

Our Strategy
Message from the president

09

ESG Initiatives
Environmental and social activities in Japan in 201913

Corporate governance

19

Financial Statements
Consolidated balance sheets

23

Consolidated statements of income

25

Consolidated statements of changes in net assets

26

Consolidated statements of cash flows

27

Stock information

28

Global network

29

Corporate data

30

Editorial Policy
MANAGEMENTPHILOSOPHY

Packaging

JSP develops and provides packaging solutions for safe transport of items ranging
from household electronics to precision equipment and fragile items. Our MIRAMAT
series of low-density expanded polyethylene products provides exceptional
cost and performance advantages from its combination of extreme versatility,
high durability, and reusability. These attributes have made MIRAMAT a leading
packaging material in the distribution field, particularly for use as long-lasting andreliable cushioning for items requiring extended shipping and storage periods.

About JSP

This report has been compiled so as to provide our shareholders, investors and other stakeholders with an understanding of
the process toward achievement of JSP’s medium to long-term
vision.In addition to the financial information detailed in ourprevious annual reports, including our business results andmanagement plans, from this fiscal year we are also publishing non-financial information, including our medium to longterm business strategy and ESG (environmental, social andgovernance) data.

Report Period● Inspire customers and consumers● Deliver satisfaction to shareholders
and the community● Be excited about our work

April 1, 2019 – March 31, 2020
(partially includes activities carried out from April 2020)

Forward-Looking Statements

This annual review includes forward-looking statements related to
JSP Corporation’s plans, strategies, and business results. Thesestatements represent judgments of JSP based on information
available at the time of writing. As such, these statements are
subject to risks and uncertainties. Please understand that actual
performance may differ from these forward-looking statements.

02

VALUE CREATION STORIESOur history
We have been using our foaming technologies to contribute tosociety since 1962. Below is a timeline of our growth.

Establishment Period 1962–1982

Growth Period 1985–2003

Expansion Period

JSP was founded in 1962 as a specialized
manufacturer of foamed materials. From its
original polystyrene paper products, JSP expanded its technologies from polystyrene paper
products to including the groundbreaking MIRAMAT, the world’s first expanded polyethylene
sheet, and ARPRO, the world’s first expanded
polypropylene beads. The further additions of
MIRABOARD and MIRAFOAM rounded out thecore products in JSP’s current lineup.

JSP launched its global expansion with shipments of ARPRO first to the United States
and then to Europe and Asia. As businesssteadily expanded, the Company enteredan extended growth phase and was listedon the Second Section of the Tokyo Stock
Exchange. The 2003 integration of Mitsubishi
Chemical Foam Plastic and the addition of
the expandable polystyrene (EPS) businessestablished the Company’s technology andmanagement foundation as a specializedmaker of foamed products.

The steady business growth pushed sales above¥100 billion, and JSP shares were moved to
the First Section of the Tokyo Stock Exchange.
As use of ARPRO as an automotive material
rapidly increased, the Company began actively
expanding its worldwide network of manufacturing facilities, and vastly broadened its global
product range with the launch of operations in
Brazil. At the same time, manufacturing facilities
in Japan were completely overhauled to fortify theCompany’s competitive advantage. JSP is also
constructing recycling centers and reducing theenvironmental footprint of its operations to do its
part to preserve the environment.

1962

Japan Styrene Paper Hiratsuka plant
started operations in 1963

1970

1980

Osaka Office opened,
Hiratsuka Plant operation
started

1972
1971

1962

Japan Styrene Paper Co., Ltd.
established

Kanuma No.1 Plant
operation started
Fukuoka Office opened

Hokkaido Styrene Paper
Co., Ltd. established

1977

Kyushu Styrene Paper
Co., Ltd. establishedCompany namechanged to JSP
Corporation

Nagoya Office opened

03

Shares listed on
the Second Sectionof the Tokyo Stock
Exchange
Kanuma ResearchCenter opened

1989

1970

What washappeningin society

Science andTechnology Director
General’s Award
received for P-BLOCK

1973

First Oil Shock

1979

Second Oil Shock1980

Iran-Iraq War

1991

Japan
Economic
Bubble Ends
Gulf War

2020

2005

Share listing
moved to theFirst Sectionof theTokyo Stock
Exchange

1990
1988

Kansai Plant new factory built to
produce energy efficient MIRAFOAM

2010

Yokkaichi
Plant
operation
started

1979

Sapporo, Sendai,
Hiroshima Offices opened

2000
1991

Kanuma No.2
Plant operation
startedShinguu Styrene
Paper Co., Ltd.
established

1963

1990

1980

1973

Business grew as ARPRO became
widely used in automotive interiors

2004–2020

2014

JSP made consolidated
subsidiary of Mitsubishi
Gas Chemical througha capital and businessalliance
Kyushu Plant operation
started2003
1994

Kanuma No.3 Plant
operation started

1999

Kanuma No.4 Plant
operation started

New JSP era launchedwith integration of
JSP and Mitsubishi
Chemical Foam Plastic

2008

Recycle Center
operation started

2019

Kansai Plant new
factory operation
started2012

50th Anniversary
Recycling promotion systemand the Environmental Safety
Council established

2002

Corporate companies
system introduced

2008

Financial Crisis

2015

The UN adopts
the Sustainable
Development Goals

2020

COVID-19
Pandemic

The Paris Agreement
adopted at COP21

04

VALUE CREATION STORIESOur value creation process
JSP’s mission is to use its business to contribute to society byproviding value in the form of preserving resources and energy
and increasing convenience in social activities. Management
aims to fulfill that mission by becoming a “true global
corporation” creating value for society.
OUTCOMES

BUSINESS MODELINPUTS

Business Domains
Financial foundation

Total assets: ¥128,445 million

Bead Business

Extrusion BusinessContributing to Comfortable Living
Environments

Net assets: ¥84,646 million
Human resources foundation

Number of employees• Parent company: 775

OUTPUT• Group-wide: 3,154

Global Supply System

For our shareholders

Energy resources

2,278 tons of waste products
incinerated and recycled to produce
19,221 tons of steam power**Data for fiscal 2017

• Dividend per share: ¥25.0

Long-Term Vision 2027

FoamedProducts• Dividend payout ratio: 69.7%
Key Elements

Fortify and expand
existing businesses

Advancing Technological Innovation

Expand thebusiness domain

For our communities
Fortify the
management base

• Decrease in waste landfill
discharge: 84%*
*Versus fiscal 2014

Contributing to Industrial Vitality

Corporate Philosophy

Creatively and Actively
Contribute to SocietyManagement Philosophy

Responsible Care Policy

Environmental protection

Chemical and product safety

Safety and disaster preparation

Logistics safety

Occupational health and safety

Community dialogue

Enhancing Food Safety

Reducing Environmental Burden

Corporate Governance

05

06

O P E R AT I O N A L R E V I E W

The year in brief JSP Corporation and Consolidated Subsidiaries—Year ended March 31, 2020
Thousands of
U.S. dollars1

Millions of yen

2020

2019

2018

2017

2016

2020

¥113,375
5,083
5,210
4,811
3,638

¥116,133
5,479
5,835
6,047
4,309

¥114,284
9,105
9,217
9,488
6,853

¥109,048
9,612
10,033
10,013
7,301¥114,904
9,278
9,101
8,752
5,914

$1,041,762
46,70547,872
44,20633,428

128,445
84,646
81,375

129,229
84,141
80,239125,728
84,10579,524

113,151
76,77872,532

115,136
72,497
67,8901,180,235
777,781
747,725

Bead Business

Extrusion Business

For the Year:Net sales
Operating income
Ordinary income
Income before income taxes
Net income attributable to owners of the parent

Bead
Business

59.7%

Percentage
of total sales

Extrusion
Business

35.1%

At Year-End:Total assets
Total net assets
Shareholders’ equity

U.S. dollars1

Yen

Per Share Information¥ 122.07
50.00
2,729.87

Net income2
Cash dividends
Total net assets¥ 144.57
50.00
2,691.76¥ 229.91
50.00
2,667.72¥ 244.94
50.00
2,433.10¥ 198.40
40.00
2,277.32$ 1.12
		0.45
		25.08

5.4 5.0

Sales were impacted by sluggish demand in the automobile
markets in North and SouthAmerica, Europe and Asia, theU.S.-China trade friction, andweak demand in other sectors.
Overall sales in Japan fell before previous-year levels due tothe COVID-19 pandemic in thesecond half of the fiscal year.

Operating income declined
year on year despite price revisions to offset higher shipping costs amid diminisheddemand and higher fixed costs
associated with constructing
production systems geared to
new demand.

The extraordinary loss was
mainly due to the revised business plan of a U.S. subsidiaryfor electron beam cross-linked
expanded polyethylene sheet
and impairment of a portion of
the related fixed assets.

YoY

Amounts in millions of yen¥67,771¥68,449-1.0%

Net sales

3,783

3,782

+0.0%

Operating income

2020

2019

YoY

¥39,795¥41,388

-3.8%

2,293

2,468

-7.1%

Food packaging/containers
Overall sales declined on lower sales of daily consumable products, centered on STYRENE PAPER expanded
polystyrene sheets for food containers, and reduced sales
in the food tray segment and for MIRABOARD used inadvertising displays.

Expandable polystyrene
Sales increased for expandable bead products, centered on
STYRODIA expandable polystyrene, and functional products, but declined overall on reduced sales to the marine andagricultural industries.

Industrial packaging materials
Overall sales declined on reduced sales of industrial
packaging materials and industrial materials, whichcenters on MIRAMAT expanded polyethylene sheet usedin flat panel displays. Sales also decreased for generalpurpose items in sales of high value-added products to
China and South Korea.

2019–15.6%

2019

Expanded polypropylene
Sales volume remained at the level of the previous fiscal
year as increased use in automotive parts and expanded
applications offset the impact from deteriorating market conditions in the automobile and other industries. Sales revenue
declined largely due to price revisions.

2018

–7.2%

2017

–2.4%

(Billions of yen)

2016

2020

Net income

attributable to owners of the parent

2020

125 129 128

3.6

2019

2018

2017

2016

2019

2020

2018

2017

Operating income

4.3(Billions of yen)(Billions of yen)

07

2016

2020

2019

2018

2017

2016

Net sales

115 113

7.3 6.8

5.9

Operating income

Sales declined as strong sales of high value-added
products were more than offset by the deteriorating
market conditions and weak demand in some industries.
Profits also decreased from the reduced sales and higher
fixed costs from constructing production systems for highvalue-added products.

2020

9.2 9.6 9.1

Amounts in millions of yen

Net sales

Notes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=U.S.$1.
2. Net income per share is computed based on the weighted-average number of shares of common stock outstanding during each year.

114 109 114 116 113

Sales declined from reduced demand in some fields andproduct price revisions. Profits were flat year on year as
solid sales of high value-added products and cost cuts
offset higher fixed costs from constructing production
systems geared to new demand.

Total assets(Billions of yen)

– 0.6%

Home and building insulation materials andcivil engineering materials
Sales increased on strong demand for MIRAFOAM
expanded polystyrene extruded board and other construction and civil engineering materials. Solid constructionindustry demand for high-performance thermal insulationand pre-cut products fueled demand amid slow new homeconstruction starts.

08

S T R A T E G Y
O U RMessage from the president

Yukio Sakai

President,
Representative Director

09

First, I would like to express our
deepest sympathy to everyone affected by the coronavirus and extend
our heartfelt condolences to thefamilies and friends of those whohave suffered.
The Japanese government responded to the COVID-19 pandemic
by issuing an emergency declarationin April and requiring companies
to reduce opportunities for contact
among people. The JSP Group
implemented measures to enable ouroperations to continue while providing a safe work environment for our
employees. Measures to control the
spread of the virus included initiating
telework and staggered work hours,
avoiding the Three Cs of closed-in
spaces, crowds, and close contact,and promoting thorough hand washing and disinfection.
We also took steps to ensure our
global supply chain continued operating smoothly by staying in close touchwith our production bases throughremote meetings. Although supplychain disruption was a distinct risk,
our prior efforts to decentralize our
production bases, use multiple supply
and delivery companies, and secure
ample inventory levels gave us asolid footing for weathering the risk.
Nevertheless, the speed that supply
and demand contracted worldwide
was completely unanticipated, and we
frankly were taken aback at the scaleof the impact. We have made significant progress fortifying our structure
against fluctuations in the external
environment, but the impact from thepandemic has made us keenly awarethat we need to do more.
Following this experience, we
are fully reviewing our supply chain
and will lower our break-even point tomake the Company more resilient toa sharp drop in demand by reducing
fixed costs and improving productivity, such as by integrating IT into
our factory operations. As always,
enhancing the value in our products
will be paramount. We will focus
even more intently on reforming our
product portfolio by inserting highperformance products to replace
general-purpose products and products with diminished market value.

ing demand in the first half of fiscal
2021. However, we expect to gradually establish a business recovery
track in the second half supported
by economic stimulus measures invarious countries, improving supply
channel functions, and a return ofdemand from the automobile andother industries.
At this point, the outlook forthe global economy remains highly
uncertain, and an unexpectedly
prolonged impact from the pandemic could again hold our earnings
performance below our plan. No
matter the external circumstances,
we will implement the cost cuts andportfolio reform mentioned above
to minimize any potential earnings
decline and to position ourselves toquickly regain a growth trajectorywhen demand returns.

Fiscal 2020 performanceand fiscal 2021 outlook
In the harsh business environment,
sales and profits ended up below
our initial plan for fiscal 2020. The
U.S.–China trade friction eroded
sales of protective materials for flat
panel display, and strikes at major
automobile manufacturers in the
U.S. and other countries impacted
sales of automotive components.
In Japan, the rapid spread of COVID-19 just before the start of the
fiscal year disrupted supply chains.
We expect the coronavirus
pandemic to continue suppress-

Medium-Term Vision

DEEPER & HIGHER 2020

Response to the coronavirus
pandemic

Basic Policy

Progress with the Deeper &Higher 2020 medium-termbusiness plan
Fiscal 2021 is the final year of our
Deeper & Higher 2020 medium-termbusiness plan, which is the first step
toward fulfilling our long-term Vision
2027. Although we got off to a toughstart, we steadily executed our threebasic policy to promote our differentiation and growth strategies and tofortify the management base. We are
now positioned to move ahead to our
second medium-term business plan.
Promoting the Differentiation
Strategy means identifying ourcustomers’ true needs and offering
products that will make them say,
“Wow!” Although difficult to quantify,
the customer satisfaction surveys that
we use to obtain a concrete image of

We continue to
steadfastly advanceour growth strategy
even under theuncertain outlook.

Deeper & Higher
Promote the Differentiation Strategy• Further cultivate existing business and uncover advantages• Pursue true customer needs by being closer to users• Link marketing activities with customer needs

Promote the Growth Strategy• Concentrate management resources into four growth engines• Drive sustainable growth with a fine balance between being aggressive and defensive

Fortify the Management Base

• Foster involvement of all employees through human resource development• Foster a corporate culture based on health and safety and environmental preservation• Strengthen corporate governance

10

S T R A T E G Y
O U R

We remain fully committed
to our vision to “Deliverwith WOW!” to establish
sustaining growth andraise our corporate value.

I am proud of thecontributions
JSP is making tobenefit society.

11

customer expectations and level oftrust are showing a growing appreciation of our efforts to uncover customer needs. I believe this shows that
we are gradually establishing JSP asa company that listens, which is thebrand image we are aiming for.
Promoting the Growth Strategy
primarily involves expanding ourbusiness domain, which we haveaggressively pursued in the past
two years by investing in increasing production capacity in the threeareas we have set as the engines forbusiness growth: automotive components, building and home insulation materials, and flat panel display
protective materials. The investment
programs are nearly complete, andwe are positioned to grow as demand
returns. New business domains is ourfourth growth engine. We are starting to see promising developments in
those areas.
We cannot rely exclusively on
growth engines to become a company that is resilient to external conditions. Establishing steady growthrequires a balanced approach ofoffensive and defensive measures,
which means also focusing on fortifying safety measures and improving the productivity of our existing
businesses.
Fortifying the Management Basewill primarily entail strengthening
our human resources, which is a key
element to establishing sustaining
growth. Products themselves may
grow old and lose their value overtime, but people who create new
products and product functions arealways valuable. We will continue
actively investing to cultivate ourhuman resources and create comfortable workplaces. Our efforts atworkstyle reform include examining more extensive use of telework,
which has become an important partof our steps to prevent the spread of
the coronavirus. We are also countering the declining numbers of highly
skilled veteran professionals at our
manufacturing sites by creating new
systems for them to pass down theirexpertise to younger workers.
At the same time, we will continue to enhance our corporate
governance, health and safety, andenvironmental preservation activities,
which are areas of ongoing importance for management.

ESG measures andcontributing to sustainability
In recent years, society has been
increasingly evaluating companies
from the perspectives of environmental, social, and governance (ESG)and how a company contributes tosolutions for social issues through its
main business.
I am proud of the contributions
JSP is making to benefit society.
JSP exploits the unique characteristics of plastic to provide the superior
products that society needs, while
also developing manufacturing

processes that use less energy andfewer resources.
Plastic pollution in the oceans
caused by improper handling ofplastic waste has become a serious
problem, and we are directing abundant resources to finding a solution.
I do not believe that abandoning theuse of all plastic is the answer. Plastic
originally gained widespread for its
durability and because it is lighter
than metal and consumes less energy over its useful lifetime. There
are already well-established recycling
systems for plastic automobile parts,
construction materials, and in manyother industries. The area where therecycling structure is less developed
and consistent is for product packaging, plastic bags, and other items
that are closer and more visible toconsumers. In short, I believe theproblem is not with the plastic itself,
but in how we handle and process
the plastic after we benefit from its
usefulness.
Based on this understanding,the JSP Group is actively working to
reduce and effectively use the plastic
waste generated in our production
processes. We are also an eager
participant in the Japanese Ministryof the Environment’s “Plastic Smart”

action plan, where we are sharing
our 3R (reduce, reuse, recycle) tohelp other companies across Japanuse plastic efficiently. We have also
started looking beyond the currently
pressing issue of plastic pollution andexploring ways to use bio-based raw
materials.

To our shareholders andinvestors
Countries around the world are fighting to end to the spread of COVID-19.
While we are all learning to live withthe coronavirus in midst, we also
must look forward to how the world
will be after the pandemic. Our world
will not be the same, and could be avastly different place.
While the current conditions
preclude any certainty in the future
outlook for business conditions, we
remain fully committed to our vision
to “Deliver with WOW!” to establish
sustaining growth and raise ourcorporate value. I am determined
to forge ahead through the current
challenges and lead the JSP Group
until we can again share the prosperity of business growth with our
stakeholders.

12I N I T I A T I V E S
E S GEnvironmental and social activities in Japan in 2019

JSP’s Responsible Care Management

The Rising Spiral of Responsible Care Activities

The JSP Group promotes responsible care activities as an aspect of fulfilling its Corporate Philosophy.

We apply the PDCA cycle to the six categories at the foundation of our responsible care activities: environmental protection,
safety and disaster preparation, occupational health and safety,
chemical and product safety, logistics safety, and community
dialogue. The first step is to create the Medium-term Plan forresponsible care activities and to produce individual Responsible Care Action Plans for each workplace consisting of a plan(P) and actions (D) that will drive them toward fulfilling their objectives. The next step is conducting a Responsible Care Audit
to check (C) the status of the actions and evaluate the progress
made toward reaching the objective. Management examines
the results of the Responsible Care Audit and convenes an Environmental Safety Conference to review the steps being taken
and outline new actions (A) for improvement that will further
advance the rising spiral toward our objectives.

Responsible Care Policy
JSP is an internationally competitive firm dedicated to safety and protecting theenvironment and conducts business activities that fulfill the expectations andearn the trust of all stakeholders.

Safety Policy
Safe and stable operations are the foundation of business activities, and JSP
is constantly implementing measures to prevent accidents and disasters. We
comply with all laws, regulations, and standards related to employee health andsafety, accident prevention, and product safety. We also are always improving
our health and safety management and accident prevention system, and conducting companywide activities for health and safety and accident prevention.

Responsible Care Audits

Environmental Policy
JSP’s business activities are designed to protect the environment and our
products are environmentally friendly. We comply with all laws, regulations,and standards related to environmental protection. We continually update ourenvironmental management systems and seek to improve our environmental
performance.

Community
Dialogue

Environmental
Protection

The person in charge of environment and safety and membersof the relevant department conduct annual Responsible Care
Audits at the business sites to assess based on standardized
criteria if the PDCA cycle is being carried out properly.
In fiscal 2019, on-site audits were conducted at 12 business sites, including research laboratories. Using predetermined checklists created for the specific activity being carriedout at each business site, auditors verified the status ofmanagement documents and legal compliance, observed theworksite, and discussed areas of concern and priorities specificto each site.

Chemical and
Product Safety

13

Corporate
Philosophy

Safety and Disaster
Preparation

Occupational
Health and Safety

Check
Do

Act
Plan
Plan

Make a Responsible Care
Action Plan for each businesssite based on the JSP Environmental and Safety Policy
and the Medium-term Plan

Check

Assess the status of responsible care

Do

Implement the Responsible
Care Action PlanAct

The Environmental Safety
Council determines counteractions for the issues identified in the Responsible Care
Audit (creating a rising spiraltoward the company’s vision)

President

Structure for Responsible Care
Logistics Safety

Continu
Improve ous
ment

JSP Corporation’s structure for responsible care is organizedwith the Environmental Safety Council as the highest decisionmaking body for quality assurance issues. Chaired by thepresident, the committee deliberates and decides corporate
policies related to responsible care and conducts responsible
care audits, which it uses to update internal regulations and to
set targets for internal initiatives and the company’s medium
and long-term plans.
JSP and JSP Group companies share information to enhance their responsible care activities through Environmental
Safety Group Leader Meetings at all JSP business sites andthrough the Group’s Environmental Safety Promotion Council
and Environmental Safety Status Surveys.

Environmental Safety Council
Responsible Care Audit

General Technology Division(Responsible Care Promotion Office)Hokkaido Plant
Kanuma OfficeEnvironmental Safety
Status Survey

Kanuma Research Center

Responsible Care Meeting

Kashima Plant

JSP Group Environmental
Safety Promotion Committee

Yokkaichi No. 1 Plant
Yokkaichi Research Center
Yokkaichi No. 2 Plant
Kansai Plant
Kitakyushu Plant
Kyushu Plant

14

I N I T I A T I V E S
E S GENVIRONMENTAL PROTECTION

Reducing Greenhouse Gas Emissions
Greenhouse gas (GHG) emissions
GHG emissions (t-CO2)

GHG emissions volume versus FY2005 (%)

79.8

100,000

80,97980,00076.4
77,53080

73.1
74,161

60

60,000

0

40

FY

2017

0

2019

2018

Oil-equivalent energy consumption volume
Oil-equivalent energy consumption volume (kl)Production volume (t)40,000200,000

36,82536,69036,48835,000175,000

162,709

163,007

157,31430,0000

150,000

FY

2017

2018

2019

0

The JSP Group reduced its greenhouse gas emissions by
3.3% (3,369 tons CO2) in fiscal 2019 from the previous year,
and has lowered emissions by roughly 26.9% since fiscal
2005. Key factors in the reduction were the 0.6% (202kl)
decrease in energy consumption for the year and the efficient power generation from fossil fuels by electric powercompanies. In addition, the Kanuma No. 2 Plant completed
the installation of solar power generation equipment during
the year and is planning a major shift to clean energy.
Our foam materials also help reduce greenhouse gas
emissions in unseen ways, such as by improving automobile fuel efficiency and home cooling and heating efficiency
when used as a heat insulation material.

Reducing Landfill Waste Volume

Volume of company waste delivered to landfills

The Company systematically implemented measures
to rescue waste produced at its business sites to fulfill
the fiscal 2019 target of the medium-term plan for responsible care to keep waste delivered to landfill sites
below the volume of fiscal 2017. Our widespread efforts
to reduce waste helped us successfully minimize waste
production, even though China halted imports of waste
plastics during the year.

120

(t)

104

80

41

40

0

FY 2015

2016

17

13

2017

2018

22
2019

CHEMICAL AND PRODUCT SAFETY

Reducing Energy Consumption

Chemical Substance Risk Assessment

Products Safety Management

In fiscal 2019, energy consumption per production unit
compared to the previous fiscal year deteriorated to101.2%. As such, we did not achieve our goal to improvefrom the previous fiscal year. We also did not fulfill ourtarget to increase the average unit by 1% or more, as theaverage change in consumption per unit over the past five
years rose to 99.8%. We plan to aggressively apply the
PDCA cycle at all of our operating sites in fiscal 2020 while
also bringing the solar power system at the Kanuma No. 2
Plant fully on line.

JSP’s medium-term plan for responsible care for fiscal 2018
to fiscal 2020 sets a standard to steadily implement risk
assessment of chemical substances, and the company isaccordingly routinely conducting assessing the risk associated with the chemical substances it uses.
At the Kyushu Plant, we have adopted the chemical
substance risk assessment method promoted by the Japan
Industrial Safety & Health Association (JISHA)*. The JISHA
method is a simple but detailed test of risk that can be
conducted right at the worksite.

RoHS compliance
JSP complies with the European Union Directive on the
Restriction of Hazardous Substances (RoHS 2) by regularly
performing testing at JIS Q 17025-certified* inspection
laboratories for our products and disclosing the results
upon customer request.

* The contribution rate method measures energy use per unit for eachproduct line and calculates it as a percentage of the Company’s overall
energy consumption per unit. The percentage is then compared to thesame line’s percentage in the previous fiscal year.

*The JISHA method is a control banding method, a further developed andimproved version of the web system of the Ministry of Health, Labourand Welfare. The JISHA method is a qualitative and simple method ofdetermining risk using a matrix of a substance’s chemical and physicalproperties, the volume handled, working time, and the working environment.

Reducing Water Consumption* JIS Q 17025 certification is general requirements for the competence oftesting and calibration laboratories.

Safety data sheets based on GHS
As required by law, we provide safety information for
applicable products through safety data sheets (SDSs).
Although not required by law, we also provide SDS for ourother products based on the international rules of the Globally Harmonized System of Classification and Labeling ofChemicals (GHS).

The production processes at our manufacturing sites havewater recirculation systems that fully reuse water. In fiscal
2019, we increased the number of plants with roof sprinkler
systems used to cool the buildings during periods of severe
heat; however, we were able to decrease the total amountof water used compared to the previous fiscal year byimplementing various water conservation measures.

15

16

I N I T I A T I V E S
E S GCOMMUNITY DIALOGUESAFETY AND DISASTER PREPARATION

Prevention of Factory Fire Due to Static Electricity
Static electricity is a common part of everyday lives, but the
sparks that it can make have the potential to start a fire if
they come in contact with a flammable substance.
Preventing static electric sparks is essential in ourplants because the manufacturing processes for foam

plastic products can easily generate static electricity andbecause some of our products contain flammable gasesin their foaming agents. Our manufacturing sites are fully
equipped with grounding wires and use static eliminatorsand mist humidification to reduce the electrostatic charge
in our products and prevent potential ignition.

Together with Our Customers
We encourage customer feedback and actively work to increase customer satisfaction. The Company’s clear Quality
Policy strictly defines quality and designates responsibility
and authorization to specific individuals to facilitate quality
monitoring and correction. The quality management systems at all of our manufacturing sites are based on international standards and are ISO 9001 certified.

LOGISTICS SAFETY
Together with Shareholders and Investors
Achieving a Modal Shift

The JSP Group seeks to provide full information for our
stakeholders to understand our operations and management objectives. The Group issues quarterly reports,
securities reports, and timely disclosure materials, actively
discloses information on its corporate website, and publishes biannual shareholder communications and an annual
review along with other materials and information.
We also seek to raise corporate awareness byimplementing the most effective media plan for corporate
branding by focusing our information, press releases, advertisements, and other communications on industry trade
journals and specialized magazines.

We are advancing a modal shift away from truck-based
logistics to railways and ferries that emit less CO 2 as weseek to realize logistics operations that are environmentally sound, energy efficient, and reliable.
This modal shift will also allow us to maintain safe
and stable delivery supply in the event of a natural disaster that disrupts the road system. Roads closed in fiscal
2018 due to infrastructure damage from the heavy rains inwestern Japan are steadily being restored and reopened
in fiscal 2019.

and trends in prices of related materials.
We will continue to deepen our partnerships with ourclient companies and conduct purchasing activities with theaim of continuing to develop mutual corporate activities.

Together with Communities
JSP Group companies conduct activities at each of theirbusiness sites to contribute to their local communities.
The Kanuma Office in Tochigi Prefecture has conductedblood drives in its community for many years. The office
responded to the reports that the COVID-19 pandemic was
reducing blood reserves by conducting three blood drives
in fiscal 2019, during which 133 employees donated blood.
The Kansai Plant in Hyogo Prefecture signed a disasterprevention agreement with the city of Tatsuno to use its
new plant as a temporary shelter and supply insulationmaterials and food containers produced at the plant tothe community in the event of a disaster. Subsidiary JSP
Molding participates in community educational program
offering tours of environmentally friendly companies to local
elementary schoolchildren. In fiscal 2019, schoolchildren
visited the Tochigi Plant No. 1 and learned about its environmentally friendly products.

Together with Employees

OCCUPATIONAL HEALTH AND SAFETY

Measures for Zero Lost-Time Injuries
The JSP Group implements measures aimed at achieving zero worker time lost due to injuries. In fiscal 2019, weapplied the JSP Group Safety Management Standards andtook additional steps to increase worksite safety; however,the number of industrial accidents increased, including accidents with undetermined causes. We will continue providing
comprehensive safety education and practice for workers
and fully implementing our fundamental safety measures.

Number of work stoppages

Work stoppage frequency*
JSP Corporation
JSP Group companies (Consolidated)
JSP Group companies (Non-consolidated)

JSP Corporation
JSP Group companies (Consolidated)
JSP Group companies (Non-consolidated)
6

Procurement of our products is transparent and fair andavailable to all customers of any nationality, company size,or business experience. We also seek to provide “optimal
procurement” by being prepared to acquire alternative materials and ensuring a stable supply while also endeavoringto always offer fair prices based on current market prices

4
6

2
0

FY

2017

2018

2019

0

Elementary schoolchildren taking our tour.

Together with Suppliers

(%)

12

In July 2019, we initiated a flextime system to better accommodate the personal lifestyles of our employees and createa system to help our employees more easily balance theirwork and private time.
The system has given us a new awareness of how
time is used in the workplace as workers are using theirtime at work more efficiently, the volume of overtime work
has decreased, and workers are balancing their work andprivate time.
We will continue offering a work environment supporting work flexibility for employees.

FY

2017

2018

2019

* Number of casualties due to work accidents per one million actual working hours

17

18

I N I T I A T I V E S
E S GCorporate governance

As of July 6, 2020

Basic Policy on Corporate Governance
JSP places top priority on realizing sustained business growthand enhancing corporate value following our corporate philosophy to “creatively and actively contribute to society” and withthe objective of fulfilling our promise to be an internationallycompetitive company that emphasizes safety and environmental awareness. We aim for the management of our Company toearn the trust of and fulfill the expectations of all stakeholders.
We believe that effectively functioning corporate governanceand constant effort to maintain and improve management efficiency, transparency, and soundness are essential to fulfilling
this objective.

holders and seeks to maintain appropriate and cooperative
relations.
3. The Company provides appropriate information disclosureand seeks to ensure transparency for all stakeholders.
4. As a Company with a Board of Company Auditors, the Company appoints independent outside directors and auditors tomonitor the Company’s management activities and ensure
sound management practices.
5. The Company engages in constructive dialogue withshareholders.

Corporate Governance Structure

Basic Policy

1. Status of Business Execution

1. The Company has adopted the Company with a Board ofCompany Auditors framework in which the Board of Directors
makes decisions on important issues for the Company andseeks to provide an environment enabling management tomake sound decisions to carry out the decisions of the Boardof Directors.
2. The Company respects the rights and viewpoints of all stake-As stipulated in the Articles of Incorporation, the Company
maintains a Board of Directors and Board of Auditors comprising up to 16 directors. The Company maintains a structure of 10
directors, including two outside directors. The Board of Directors
meets, in principle, on a monthly basis to deliberate and makedecisions on items as stipulated by law and internal company
regulations and on items important to the management of the

Corporate governance structure

Outline of the corporate governance structure

General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

ReportBoard of Directors
10 Directors(2 Outside Directors)

Selection andRemovalSupervision

Consult

Appointment/Dismissal

Audit

ReportBoard of Auditors
4 Auditors(2 Outside Auditors)

Cooperation

Accounting
Auditor
Audit

Nomination Advisory Board
Remuneration Advisory Board
Consult

Report• Number of Directors: 10
Cooperation

ReportDirectors Meeting

ReportInternal
Audit Dept.
Audit

Business
Divisions• Number of Directors stipulated in the Articles of Incorporation: 16• Chair of the Board of Directors: President

Representative Director

Management
Committee

Directors• Term of office stipulated in the Articles of Incorporation: 1 year

Audit

Directives andSupervision

Organizational structure
Company with auditors

ReportRisk andCompliance
Committee

Guidance andSupervision

Administrative
Divisions• Number of Outside Directors: 2
Auditors• Number of Auditors stipulated in the Articles of Incorporation: 4• Number of Auditors: 4• Number of Outside Auditors: 2
Number of Independent Executive Officers: 4• Outside Directors: 2

ReportCooperation

Group Companies

19* We have set up an external reporting desk fordomestic group companies.

• Outside Auditors: 2

Company and to supervise the execution of business activities.
The Management Meetings serve as a supplementary function
to the Board of Directors. The meetings, attended by the representative director, managing executives, and personnel in higher
positions, are held, in principle, on a monthly basis to conduct
preliminary discussions on important management issues. The
Company additionally uses an executive director structure as asystem for executing business operations. The Directors Meeting maintains a structure of 19 directors, comprising directors
and executive officers. It meets, in principle, twice a month todeliberate on items important to the management of the Company and to achieve efficient execution of business.
Regarding the compliance structure, the Risk and Compliance Committee, chaired by the Director, Executive Officer,
and General Manager of the General & Personnel Affairs
Division, meets, in principle, on a monthly basis. The Committee manages compliance and risk across the JSP Group andprovides support for management decisions to ensure that theBoard of Directors assumes appropriate levels of risk.

2. Status of Audits(1) Audits by auditors

The Board of Auditors comprises four auditors, including two
outside auditors. The four auditors carry out audits of the Company’s business operations informed by the input from the highly independent outside auditors. All of the auditors are highly
knowledgeable about financial and accounting operations andhave abundant experience in various aspects of the accounting
process, including as auditors in the chemicals industry.
The auditors and outside auditors attend meetings of theBoard of Directors and important company meetings and holdmonthly auditor meetings in which they conduct discussions
with managers in charge of specific operations to supplement
and guide their detailed audits of the legality and appropriateness of the business operations and the financial standing of
the companies in the JSP Group. The auditors also regularly
and when deemed necessary solicit the advice of accounting
auditors regarding specific accounting issues.
With regard to matters related to internal audits, as described above, reports are received from the Audit Group as
appropriate concerning the results of these audits, and opinions
are exchanged in order to strengthen mutual cooperation.

(2) Internal audits

The Internal Audit Department comprises five auditors conducting regular audits of the Company and group companies
and seeks to enhance the effectiveness of internal controls. In
addition to the functions of the Internal Audit Group, the company assigns a Process Owner to each business division tostrengthen the monitoring of each business process.
The Internal Audit Department also conducts internal audits in line with the internal audit plan for each year and reports

the results to each auditor with the aim of facilitating dialogue
and further strengthening mutual collaboration.

(3) Auditing of accounts

In accordance with the Financial Instruments and Exchange
Act and the Companies Act, the Company has contracted with
Deloitte Touche Tohmatsu LLC to perform accounting audits.
The Company does not have an interest in the auditing corporation or the executive members of the auditing organization.

Evaluation of the Effectiveness of the Boardof Directors
The Company issues questionnaires to directors on an annual
basis and uses the questionnaires as a basis for assessing theeffectiveness of the Board of Directors. The Board of Directors
analyzes and evaluates the results of the questionnaires andincorporates the views of the independent outside directors andoutside auditors.
To evaluate the Board of Directors’ effectiveness in fiscal 2019, questionnaires were distributed to all of the directors
and auditors covering the following items, and the results werediscussed at a Board of Directors meeting.
1. Matters concerning the effectiveness of the Board of Directors overall
2. Matters concerning the composition of the Board of Directors
3. Matters concerning the administrative performance of theBoard of Directors
4. Matters concerning deliberations by the Board of Directors
5. Matters concerning support for directors and auditors
6. Risk management
7. Performance monitoring
8. Evaluations and compensation for management
9. Dialogues with shareholders and others
For this evaluation of the effectiveness of the Board of
Directors, we again requested an external organization to collect, compile, and analyze the questionnaires in order to obtain
unrestrained opinions and to ensure objective analysis.
Based on the results of the questionnaire and discussion
at the Board of Directors meeting, the Board was deemedlargely effective. We are continuing to take steps to respondto issues raised in the fiscal 2018 questionnaire, including
the need to use non-financial information in the monitoringof earnings performance and to hold constructive dialogue
with shareholders. Issued identified in fiscal 2019 were theappropriateness of discussions about corporate strategy andother matters, a need to reverify indicators used to monitor
earnings performance, and the governance status of overseas
subsidiaries.
We will continue to improve the effectiveness of the20I N I T I A T I V E S
E S GBoard of Directors through continuous efforts on the issues
that emerged.

Director and Auditor Remuneration
Remuneration for Directors (excluding non-executive directors)
is configured as base compensation and reserve-type remuneration to be paid upon retirement.
Base compensation comprises fixed compensation,short-term performance-linked compensation, and executive
shareholder association-contributed compensation. Fixedcompensation and executive shareholder association contributed compensation, which form part of base compensation, aredefined according to job position and responsibility.
Compensation for non-executive directors and auditors
comprises base compensation in the form of fixed compensation. With regard to short-term performance-linked compensation, which forms part of base compensation, a performance
ratio is calculated for the applicable period in relation to the reference values of the target indicators specified by the Board of
Directors (consolidated sales, consolidated operating income,consolidated operating margin, consolidated net income attributable to owners of parent). A coefficient defined in accordancewith the performance ratio is reduced by 1, corresponding to
fixed compensation, and this is applied to fixed compensation.
The resulting amount is reduced by the amount of shareholder
association-contributed compensation for each job position
to determine the amount of short-term performance-linked
compensation.
Reserve-type remuneration to be paid upon retirement isprovided as medium-term performance-linked compensation.
A performance achievement ratio is calculated in relation to thefiscal year-end cumulative amount of the applicable indicators
during the consolidated medium-term management plan, versus the applicable indicators covering the same period during

Director and auditor remuneration totals for fiscal year 2019
NumberTotal Remuneration

Director

15

247

Of which Outside Director

3

16

Auditor

4

42

Of which Outside Auditor

2

24

Total

19

289

Position(Millions of yen)

Remuneration amounts and other payments to individual executives are omitted
because no individual was paid a total amount exceeding 100 million yen.

21

the previous consolidated medium-term management plan, anda coefficient determined in accordance with this performanceachievement ratio is applied to the base reserve amount for the
fiscal year to determine the amount of reserve-type remuneration to be paid upon retirement.
With regard to the amount of remuneration for each director, the Company President drafts a remuneration proposal forthe current fiscal year within the limit determined by a resolution
passed at the General Meeting of Shareholders, in accordancewith the Company’s Executive Remuneration Regulations,and in consideration of the business environment, operating
conditions, Company earnings, the Company’s financial status,
and the contribution to be provided by each individual. The
remuneration proposal drafted by the President is consideredby the Remuneration Advisory Board, which is made up of therepresentative director and outside directors, and is chairedby a lead outside director. The Remuneration Advisory Board
then reports to the President concerning its deliberations on the
remuneration proposal. The President, on the authorization of
the Board of Directors, determines the remuneration amount foreach director.
Remuneration for auditors is set based on negotiations
and in consideration of the contribution to be provided byeach individual.

Storage and Management of Information Pertaining
to the Execution of Duties by Directors
Based on document management regulations, the Company
records and preserves information on the execution of duties
by directors on documents or electromagnetic media. Directors
and auditors can view these at all times, according to document
management regulations. In addition, matters regarding which
information must be disclosed as stipulated by law or the regulations of stock exchanges, etc., are promptly disclosed basedon our information disclosure regulations.

Risk Management System
The Risk and Compliance Committee was established to manage the risks of the JSP Group across the organization. In addition to identifying and analyzing risks, the committee has alsoestablished rules related to risk management and strengthened
the risk management system.
Regarding unforeseen circumstances such as a fire orother calamity, the department in charge of crisis management
is to follow the rules and instructions established for emergency response.

System for the Execution of Duties by Directors

Internal Control
Compliance
The Group has established the JSP Group Guidelines for
Corporate Behavior and JSP Group Code of Conduct towhich the Company and its subsidiaries adhere in compliance with laws, regulations, and social ethics as a premisefor corporate activities.
Our Risk Compliance Committee oversees complianceacross the JSP Group, and is responsible for matters including
the education and training of executives and employees of the
JSP Group on compliance.
We have also set up a compliance consultation desk sothat JSP Group executives and employees can report anyquestionable acts that may not be in compliance with laws andregulations. The Risk Compliance Committee reports to theBoard of Auditors on the details of any reported situation, whichis then investigated. Measures are then taken to prevent a
recurrence. It is prohibited to treat a whistleblower unfavorably
due to their reporting of noncompliance, and executives andemployees of the Group are thoroughly educated to that effect.
Regarding the status of compliance, the auditors of theCompany and the Internal Audit Department cooperate to
conduct audits.

The Company’s Board of Directors, in principle, holds monthly
meetings and makes decisions on basic management policies,
matters stipulated by law, and other important matters related
to management. The Company also has a Management Committee composed of the representative director and executive
officers that meets to deliberate on important management
matters in advance of Board of Directors meetings. We haveadopted a system of executive officers and separate businessheadquarters, and delegate the authority for execution andresponsibility for performance to improve the efficiency of business execution. Important individual management tasks related
to business execution are, in principle, decided at the Directors
Meeting held twice a month.
The Company formulates management plans on a consolidated basis, carries out group business management, andprovides guidance for group companies to achieve targets. The
group companies are organized under separate business headquarters, and are under the direct supervision of the particularbusiness headquarters to which the business execution belongs.

System to Ensure the Appropriateness of
Operations in the Corporate Groupto ensure the appropriateness of operations.
In addition, to ensure autonomy in the management of theCompany, we have entered into a basic agreement with ourparent company on capital and business alliances, and transactions with the parent company are conducted with terms andconditions equivalent to those between independent parties. In
such ways we strive to ensure the appropriateness operations.

Systems for Effective Auditing■ System relating to the assistance of auditors

Auditors are allowed to request the allocation of employees toassist them in carrying out audits as necessary. Employees
who receive instructions from an auditor that are necessary forcarrying out an audit shall not take orders from directors or others regarding the instructions. In addition, the Board of Auditors
must be consulted with regard to matters related to the transfer,
evaluation, or disciplining of assisting employees.

■ System for reporting to auditors

Directors and employees shall report to the Board of Auditors
matters that seriously affect the JSP Group, in addition to legal
matters and the implementation status of internal audits within
the JSP Group.
Auditors attend the Board of Directors’ meetings and otherimportant meetings of the Company and group companies andwork to gather information on important matters concerning
management in the Group.

■ Other systems

The Board of Auditors regularly provides private interview
opportunities for business managers and others, and holds
regular meetings with the representative director and auditing
firms to exchange ideas.
A dedicated budget is allocated every year for expenses
arising from the execution of duties by auditors.

Approach and System for Excluding Anti-social
ForcesUnder the JSP Group Code of Conduct, the Company stipulates that the JSP Group will be resolutely committed to having
no association whatsoever with anti-social activities or forces inorder to exclude them from the Company’s activities.
The General Affairs Department works closely with outside
expert agencies such as attorneys and police, collects andmanages information, and has developed a system to inform
relevant departments as necessary.

The Company requires group companies to get preliminary approval for important management issues or reportthem to the Company. Our Internal Audit Department
regularly conducts business audits of Group companies

22

F I N A N C I A L S TAT E M E N T S

Consolidated balance sheets
JSP Corporation and Consolidated Subsidiaries—As of March 31

Thousands of
U.S. dollars*Millions of yen

ASSETS

2020

2019

2020

Current assets
Cash and deposits
Notes and accounts receivable–trade
Electronically recorded monetary claims–operating
Short-term investment securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Accounts receivable–other
Other
Allowance for doubtful accounts
			Total current assets¥ 13,466
27,484
4,187
14
7,163
984
5,212
584
1,531
(52)
60,575¥ 14,842
30,630
4,218
23
7,611
1,198
5,611
587
2,177
(72)
66,830$ 123,735
252,544
38,476130
65,821
9,041
47,897
5,368
14,069(479)
556,606

43,960(24,630)(11)
19,31879,055(59,546)(244)
19,264
14,714
1,243
(209)
1,033
6,586
9,705
(8,399)(2)
1,304
62,222
1,370

43,159(23,361)(12)
19,78574,297(57,406)(80)
16,81014,639
16
(7)
8
3,720
9,381
(8,062)
1,319
56,284
1,729

403,934(226,318)(104)
177,511
726,411(547,151)(2,244)177,014135,201
11,422(1,923)
9,498
60,52389,182(77,176)(19)
11,986
571,737
12,590

1,460
174
974
744
1,435
(512)
4,277
67,869¥128,445

1,431
139
1,174
714
1,330
(404)
4,385
62,399¥129,229

13,421
1,604
8,951
6,844
13,186(4,707)39,301
623,629$1,180,235

Noncurrent assets
Property, plant and equipment
Buildings and structures		Accumulated depreciation
		 Accumulated impairment loss
		 Buildings and structures, net
		 Machinery, equipment and vehicles
		Accumulated depreciation
		 Accumulated impairment loss
		 Machinery, equipment and vehicles, net
Land
Lease assets
		Accumulated depreciation
		 Lease assets, net
Construction in progress
Other		Accumulated depreciation
		 Accumulated impairment loss
		Other, net
			Total property, plant and equipment
Intangible assets
Investments and other assets
		 Investment securities
		 Long-term loans receivable
Net defined benefit asset
		 Deferred tax assets
		Other
		 Allowance for doubtful accounts
			Total investments and other assets
			 Total noncurrent assets
			Total assets

Thousands of
U.S. dollars*Millions of yen

LIABILITIES AND NET ASSETS

2020

2019

2020

Current liabilities
Notes and accounts payable–trade
Electronically recorded obligations–operating
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accounts payable–other
Income taxes payable
Accrued consumption taxes
Provision for bonuses
Provision for business structure improvement
Electronically recorded obligations–facilities
Accounts payable–facilities
Asset retirement obligation
Other
			Total current liabilities¥ 8,772
1,983
8,494
3,681
199
2,737
622
412
1,321
157
1,268
0
1,960
31,611¥ 11,183
2,202
7,497
3,921
8
2,995
544
99
1,449
19
77
1,862
2,482
34,344$ 80,609
18,22178,053
33,8301,828
25,1495,721
3,787
12,144
1,448
11,653
4
18,017
290,470

Noncurrent liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Provision for directors’ retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
			Total noncurrent liabilities
			Total liabilities

8,642
690
982
2
574
191
1,103
12,186
43,798

7,969
6
881
13
568
176
1,128
10,74445,08879,409
6,346
9,028
20
5,274
1,759
10,143111,981402,452

10,12813,40561,518(1,387)
83,665

10,12813,441
59,370(1,386)81,55393,068123,177565,271(12,745)768,772268(3,255)696(2,290)3,270
84,646¥128,445

233(2,505)958(1,313)
3,901
84,141¥129,229

2,469(29,912)
6,398(21,043)
30,054
777,782$1,180,235

Net assets
Shareholders’ equity
		Capital stock		Capital surplus
		Retained earnings
		Treasury stock			Total shareholders’ equity
Valuation and translation adjustments
		 Valuation difference on available-for-sale securities
		 Foreign currency translation adjustment
		 Remeasurements of defined benefit plans
			Total valuation and translation adjustments
Non-controlling interest
			Total net assets
			Total liabilities and net assets* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=U.S.$1.

23

24

F I N A N C I A L S TAT E M E N T S

Consolidated statements of income

Consolidated statements of changes in net assets

JSP Corporation and Consolidated Subsidiaries—Years ended March 31

JSP Corporation and Consolidated Subsidiaries—Year ended March 31, 2020
Thousands of
U.S. dollars*Millions of yen

2020

2019

2020

¥113,375¥116,133$1,041,766

Cost of sales

83,20885,286

764,571

Gross profit

30,16730,846277,194

Net sales

Selling, general and administrative expenses
Selling expenses

8,290

8,080

76,175General and administrative expenses

16,793

17,286

154,309

Total selling, general and administrative expenses

25,08325,366

230,484

5,083

5,479

46,710		Operating income

Balance, beginning of period
Cumulative effects of changes in accounting policies
Restated balance, beginning of period
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury stock
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Non-operating income
Interest income

212

209

1,954

Dividends income

15

27

140

Rent income

75

75

693

Equity in earnings of affiliates

10

5

93

254

379

2,339

568

695

5,221

Other
		 Total non-operating income
Non-operating expenses
Interest expenses

201

148

1,849

Foreign exchange loss

134

95

1,237

Other

105

95

967

441

340

4,055

5,210

5,835

47,875

		 Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets

13

29

121

Gain on sales of investment securities

32

411

296

45

440

418

5

6

47

Loss on retirement of noncurrent assets

50

143

464

Impairment loss

381

-

3,508

6

78

59

		 Total extraordinary income
Extraordinary loss
Loss on sales of noncurrent assets

Loss on valuation of investment securities
		 Total extraordinary losses

444

228

4,080

		Income before income taxes

4,811

6,047

44,213

Income taxes–current

1,383

1,481

12,712

Income taxes–deferred

173

391

1,591

		 Total income taxes

1,556

1,872

14,303

Net income

3,255

4,174

29,909Net income attributable to non-controlling interests

(383)

(134)

(3,525)

		 Net income attributable to owners of the parent¥3,638¥ 4,309$33,435* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=U.S.$1.

25

Balance, beginning of period
Cumulative effects of changes in accounting policies
Restated balance, beginning of period
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury stock
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Balance, beginning of period
Cumulative effects of changes in accounting policies
Restated balance, beginning of period
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury stock
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Capital stock

Capital surplus¥10,128¥13,441¥59,370(¥1,386)

10,12813,441

59,370(1,386)

Treasury stock(1,490)3,638(35)¥13,405¥10,128
Valuation difference
on available-for-salesecurities¥233

Total shareholders’ equity¥81,553
81,553(1,490)
3,638
0
(35)
2,112
¥83,665

0

(35)
2,148
¥61,518

0(¥1,387)

Valuation and translation adjustments
Foreign currency Remeasurementsof defined benefit
translationplans
adjustment(¥2,505)¥958

Total valuationand translation
adjustments(¥1,313)¥3,901(2,505)958(1,313)

3,901¥84,141
84,141(631)(631)¥3,270(1,490)
3,638
0
(35)
(1,607)504¥84,646

233

(749)
(749)
(¥3,255)

35
35
¥268

(261)
(261)
¥696

(976)
(976)
(¥2,290)

Minority
interests

Capital stockThousands of U.S. dollars*
Shareholders’ equity
Capital surplus
Retained earnings$93,068$123,508$545,531($12,743)

93,068

123,508

545,531(12,743)

Treasury stock(13,695)
33,435$93,068(330)$123,177

19,740$565,271

Net assets

Total shareholders’ equity

(2)

(330)

Valuation difference
on available-for-salesecurities

Balance, beginning of period
Cumulative effects of changes in accounting policies
Restated balance, beginning of period
Changes of items during the period:
Dividends from surplus
Net income attributable to owners of the parent
Purchase of treasury stock
Capital increase of consolidated subsidiaries
Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Millions of yen
Shareholders’ equity
Retained earnings(2)($12,745)

Valuation and translation adjustments
Foreign currency Remeasurementsof defined benefit
translationplans
adjustment

Total valuationand translation
adjustments

Minority
interests$749,364
749,364(13,695)
33,435(2)(330)
19,407$768,772

Net assets$2,145($23,022)$8,804($12,072)$35,854

2,145(23,022)8,804(12,072)

35,854$773,146
773,146(5,799)(5,799)$30,054(13,695)
33,435(2)(330)(14,771)
4,636$777,782

324
324$2,469(6,889)(6,889)($29,912)(2,406)(2,406)$6,398(8,971)(8,971)($21,043)* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=U.S.$1.

26

F I N A N C I A L S TAT E M E N T S

Consolidated statements of cash flows

As of March 31, 2020

Thousands of
U.S. dollars*Millions of yen

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Impairment loss
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for directors’ retirement benefits
Loss (gain) on sales and retirement of noncurrent assets
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Interest and dividends income
Interest expenses
Foreign exchange losses (gains)
Equity in (earnings) losses of affiliates
Decrease (increase) in notes and accounts receivable–trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable–trade
Increase (decrease) in accrued consumption taxes
Other, net
		Subtotal
Interest and dividends income received
Interest expenses paid
Business structure improvement expenses paid
Income taxes paid
		 Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of noncurrent assets
Proceeds from sales of noncurrent assets
Payments for retirement of noncurrent assets
Purchase of investment securities
Proceeds from sales of investment securities
Net decrease (increase) in time deposits
Other, net
		Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Dividends paid for non-controlling interests
Proceeds from changes in ownership interests in subsidiaries that do not		 result in change in scope of consolidation
Other, net
		 Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥108.83=U.S.$1.

27

Stock information

JSP Corporation and Consolidated Subsidiaries—Years ended March 31

2020

2019

2020

¥4,811
6,427
381
94
(119)
(67)
(10)
42
(32)
6
(227)
201
71
(10)
2,853
906
(2,475)315(452)
12,717
230
(204)
(2)
(1,255)
11,484¥ 6,047
5,601
(32)
(18)
(105)
1
120
(411)
78
(236)
148
116
(5)
(1,075)(1,438)
330
7
(150)
8,978
237
(150)
(1,673)
7,391$44,21359,061
3,508
868(1,099)
(620)
(100)
391
(296)
59
(2,094)
1,849
660
(93)
26,2208,333(22,743)
2,894(4,157)
116,854
2,114(1,877)(26)(11,537)
105,527(12,200)
63
(120)
(6)
39
(230)
49
(12,406)(10,896)
102
(74)
(11)
571
51
(111)
(10,368)(112,109)581(1,105)(62)358(2,118)454(114,000)

1,021
4,600
(4,158)0(1,490)
(182)

1,150
6,500
(4,233)(1)(1,490)
(202)

9,386
42,267(38,209)(2)(13,695)(1,680)

66
(214)
(358)
(217)
(1,498)
9,082¥7,584

(14)
1,708
(456)
(1,724)
10,807¥ 9,082606(1,966)(3,293)(1,998)(13,764)
83,454$69,689

Listing market

First Section of the Tokyo Stock Exchange

Securities code

7942

Share trading unit

100 shares

Total number ofauthorized shares

46,000,000

Fiscal year

April 1 – March 31

Distribution of shares by shareholder type
Financial instruments business
operators, other corporations

10.90%
11.99%

Individuals, other57.98%

Foreign individuals

19.13%

Major shareholders

Financial institutions

Shares held

Voting right ratio

Mitsubishi Gas Chemical Company, Inc.

16,02053.74

Japan Trustee Services Bank, Ltd.

2,019

6.77

JSP Client Stock Ownership Plan

1,136

3.81

J.P. MORGAN BANK LUXEMBOURG S.A. 380578

711

2.38

The Master Trust Bank of Japan, Ltd.

677

2.27

(thousands)

NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LENDING
15 PCT TREATY ACCOUNT

(%)

					
374
1.25

JP MORGAN CHASE BANK 385166

306

1.02

JSP Employee Stock Ownership Plan

291

0.97

UBS AG LONDON A/C SEGREGATED CLIENT ACCOUNT

257

0.86

Nippon Life Insurance Company

241

0.80

Notes: 1. The above list of major shareholders does not include treasury stock held by the company (1,604,000 shares).
2. The shareholding ratio does not include treasury stock.
3. Among the above shares held, the number of shares pertaining to trust business is as follows: Japan Trustee Services Bank, Ltd.
2,019,000 shares; The Master Trust Bank of Japan, Ltd. 677,000 shares.

Number of shareholders

As of March 31

30,00028,99825,00020,00023,165
19,11418,182

18,374

2016

2017

2018

15,00010,000
5,000
0

2019

2020

28

Global network

Corporate data

As of March 31, 2020

As of March 31, 2020

Head office
Shin Nisseki Bldg., 4-2, 3-chome Marunouchi,
Chiyoda-ku, Tokyo 100-0005, Japan

North America
U.S.A.
JSP International Group Ltd.

FoundedJanuary 1962

MexicoJSP International De Mexico
S.A.de C.V.

South America
BrazilEuropeAsia

FranceKorea

JSP International SARLKOSPA Corporation

Czech

TaiwanJSP International s.r.o.

Taiwan JSP Chemical Co., Ltd.

Germany

Singapore(Innovation Center)

JSP Foam Products PTE. Ltd.
ThailandJSP Foam Products (Thailand) Co., Ltd.
China
JSP Advanced Materials (Wuxi) Co., Ltd.*JSP Plastics (Shanghai) Co., Ltd.
Kunshan JSP Seihoku Packaging Material Co., Ltd.

JSP Brasil Industria De
Plasticos Ltda.

Hokkaido

2

Kanuma3

Kashima

4

Tokyo Head Office

5

Yokkaichi

6

Kansai7

Kitakyushu

8

KyushuPaid-in capital¥10,128.610 million
Number of shareholders
28,998Stock exchange listing
Tokyo (First Section: 7942)
Fiscal year-end
March 31
Investor relations contact
Public and Investor Relations Department
Tel: +81-3-6212-6302

Japan
1

President, representative director
Yukio Sakai

1

Number of employees
3,074
Major affiliates
36 in total

2
4 3
6

Information disclosure

5

7
8

JSP Advanced Materials (Dongguan) Co., Ltd.*JSP Plastics (Wuhan) Co., Ltd.
JSP website https://www.jsp.com* As of 2020, JSP Plastics (Wuxi) Co., Ltd. and JSP Plastics (Dongguan) Co., Ltd. have changed their names to
JSP Advanced Materials (Wuxi) Co., Ltd. and JSP Advanced Materials (Dongguan) Co., Ltd. respectively.

29

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