CORPORATE REPORT

2021

Contents

Automotive

JSP technologies offer awide range of performance
benefits to automobile manufacturers, from enhancing
collision safety performance
to reducing vehicle weight andimproving fuel efficiency. JSP
supplies leading automakers
with automotive componentsthat take full advantage ofthe unique capabilities ofhigh-performance foamed
products, highlighted by ourrevolutionary lightweight andshock-absorbent P-BLOCK/
ARPRO (expanded polypropylene) material.

Construction

JSP insulation materials
contribute to creating comfortable home living environments
by providing exceptional
insulation performance forheat and cold retention andwater shedding. Our core
expanded polystyrene product
MIRAFOAM is widely used inhomes, apartment and officebuildings, and other large
structures.

Civil engineering

JSP products help ensure thesafety of social infrastructure
as key components in road
construction, soft-ground stabilization, landslide prevention,and other civil engineering
applications. Our STYRODIABLOCK products combining
expanded polystyrene andlightweight mortar wall surfacing materials enable fast andeasy wall construction. The
blocks, which are lightweight,
easy to work with, and highly
resistant to corrosion, makethe most of the unique characteristics of foamed materials toprovide new value in the civilengineering field.

Packaging

JSP develops and provides
packaging solutions for safe
transport of items ranging
from household electronics
to precision equipment andfragile items. Our MIRAMAT
series of low-density expanded polyethylene products
provides exceptional cost andperformance advantages fromits combination of extreme
versatility, high durability, andreusability. 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 shippingand storage periods.

Food packaging

JSP food packaging materials play an integral role infood safety. Our STYRENE
PAPER expanded polystyrene
sheet is used as insulation
in hot and cold containers topreserve the freshness of fish,
meat, and vegetables duringtransport. We are constantly
developing products offeringboth high performance andconvenience to meet evolving
lifestyle needs and foodpreferences.

Message from the Management

03

Financial Highlights

09

Review by Business Segment

10

Our History

11

Our Value Creation Process

13

ESG Initiatives

15

Financial Statements

27

Stock Information

32

Global Network

33

Corporate Data

34

Change for Growth
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 fulladvantage of the potential of foamed products for virtually
every field of industry, where they contribute to developing
industry and enriching people’s lives around the world.

Corporate Philosophy

Management Philosophy

Creatively and Actively
Contribute to Society
We have cultivated our business activities inline with our deep respect for the natural environment and design each of our products
from the earliest 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 products that “break the mold” of existing
concepts, proposing products and materials
that meet current and future market needs,
and supplying customers from a worldwide
network of production bases.

Inspire customers andconsumers
Deliver satisfaction toshareholders and thecommunity
Be excited about our work

Editorial Policy

This report has been compiled so as toprovide our shareholders, investors andother stakeholders with an understandingof the process toward achievement of
JSP’s medium- to long-term vision. In addition to the financial information detailed
in our previous annual reports, including
our business results and management
plans, we are publishing non-financial
information, including our medium- to longterm business strategy and ESG (environmental, society and governance) data.

Reporting Period

Fiscal 2020:
April 1, 2020–March 31, 2021
(partially includes activities carriedout from April 2021)

Forward-looking Statements

This corporate report includes forward-looking statements related to JSP
Corporation’s business plans, strategies,
and results. These statements represent
judgments of JSP based on information
available as of March 31, 2021. As such,these statements are subject to risks anduncertainties. Please understand that
actual performance may differ from theseforward-looking statements.

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04

Message from the Management

A new management structure to generate
new ideas and bold changes
to realize our visionOn— Message from the Chairman —June 29, 2021, former JSP president

Yukio Sakai became Company chairman
and Tomohiko Okubo was appointed as the
new president. The COVID-19 pandemic haspresented challenges, but we remain steadfastly
committed and fully determined to become“A Global Company for Global Society.”

Review of the medium-term business plan,“Deeper & Higher 2020”

worktime, and protecting the environment.
We faced a severe business environment in theplan’s final year of fiscal 2020 as the worldwide COVID
pandemic caused a widespread economic slowdown.
While taking measures to protect against the virus, we
focused our business efforts on cultivating new demand,developing and selling high-value-added products, andrationalizing production of existing products. The severe
conditions led to net sales falling 9.4% year on year as
demand faltered, but operating income rose 2.0% on
increased sales of high-value-added products, reduced
SG&A expenses due to the travel constraints, and the lower fixed costs that resulted from our efforts to rationalize
production processes. The pandemic and several otherfactors combined to strongly impact our performance, andour results eventually fell well short of our targets.
This led us to shift our efforts for promoting the
growth strategy to prioritizing investment in four engines
for business growth—automotive components, building
and home insulation materials, flat panel display (FPD)
protection materials, and new business domains. In theautomobile industry, the ongoing trend toward lighter vehicles supported an increase in the quantity of P-BLOCK/
ARPRO units per vehicle, but the worldwide slowdown in
automobile manufacturing during the year dampened our
results. Sales volume to the housing industry of our MIRAFOAM LAMBDA and pre-cut thermal insulation materials
were growing prior to the pandemic, but the pace slowed

Since becoming president in 2016, my goal as a chief
executive has been to make JSP a company where
every one of our people is enthusiastic about their work.
Products have a lifecycle, and even outstanding products
eventually become obsolete, but a company can continue
growing as long as it has people that can create the valuethat society needs.
We opened fiscal 2018 by announcing a new
management strategy to “Deliver with WOW!” and ourcommitment to share our employees’ enthusiasm with ourcustomers and all of our stakeholders. We also introduced
the long-term vision, “VISION 2027,” of what we want JSP
to be as a company in the long term and how we would
be contributing to society. We then broke down that
long-term vision into medium-term business plans withmilestones to reach every three years toward realizing
our vision.
The first step was the medium-term plan “Deeper& Higher 2020” with the core elements of promoting the
growth strategy, promoting the differentiation strategy,
and fortifying the management base. The plan had
specific quantitative performance targets for net salesof ¥138 billion and operating income of ¥11 billion, each
representing 20.8% growth from fiscal 2017. The plan also
had qualitative goals of improving our quality management
and customer satisfaction, preventing accidents and lost

Net sales

Operating income

Dividend payout ratio

Years ended March 31

Years ended March 31

Years ended March 31（%）(Millions of yen)

(Millions of yen)

120,000

10,000

50

8,000

40

102,668

100,000
80,000

6,000

5,185

60,00040,00020,000Tomohiko Okubo
President, Representative Director

Yukio Sakai

Chairman, Representative Director

0

2017

2018

2019

2020

2021

30

4,000

20

2,000

10

0

2017

2018

2019

2020

2021

49.4

0

2017

2018

2019

2020

2021

05

06

with the slowdown in housing construction starts in fiscal
2020. The market for industrial materials expanded during
the year, and the sales volume of our MIRAMAT ACE
surface protection materials for flat panel displays steadily
increased. We were aiming to generate ¥3 billion revenue
from new businesses during the year, but this also failed tomaterialize in the adverse conditions. The pandemic andthe changes in society changed the business environment
dramatically from what we envisioned when forming theprevious medium-term business plan; nevertheless,I believe we made solid strides that will put us on track tofulfill the goals of the new medium-term business plan.
To promote the differentiation strategy, we worked on
creating highly competitive products by further cultivating
our existing businesses to develop our advantages andby working more closely with users to respond to theiractual product and service needs. Efforts to differentiate
our services began to bear fruit for our four engines
for business growth, particularly in the sales growth of
our pre-cut products designed to reduce the customer
workload, which we use as a feature of building and homeinsulation materials where the quality of standard products
does not provide a significant advantage.
We fortified the management base with the aim of
becoming a company needed by society by strengthening
our human resources, fostered a corporate culture basedon health and safety and environmental preservation, andstrengthened corporate governance.
In the pandemic conditions, the Information Systems
Department played a central role in improving ourbusiness process efficiency during the year by setting up
the framework for remote work and online conferencing
as well as a structure to accommodate work conditions forboth during and after the pandemic. We now hold online
meetings every day, and I also realize that we are sharing

information more smoothly within the Group.
In the meantime during the year, in October 2020,
one of our consolidated subsidiaries in Europe wasinvolved in an incident that resulted in a significant loss offunds. As we reported in a press release in April 2021, we
responded by taking specific steps to strengthen governance across the entire Group to prevent the situationfrom happening again.

Changes in the business environment
The Group’s business environment and society havechanged dramatically and in ways that were unpredictable
when we formed the medium-term business plan.
Uncertainty about the future outlook for the global
economy increased due to the COVID-19 pandemic, US–
China trade friction, and soaring raw material prices. In
addition, the focus on plastic pollution in the oceans andother environmental issues led to growing movements toeliminate plastics and create recycling-based economies.
The pandemic enhanced the urgency to advance thedigital transformation of our businesses to prepare for the“new normal” conditions in society after the pandemic aswell as to adapt to new work styles for the new values.
As we responded to the rapidly changing businessenvironment, we strengthened our conviction that newideas and bold changes are critical elements of our medium-term business plan, which is serving as a milestone of
our progress to fulfilling our long-term vision.
Newly appointed president Tomohiko Okubo andI fully agree on this point. I will use what I have learned
through my experience, and he will bring the global management perspective and expertise from his experience
working overseas to fully implement the medium-termbusiness plan.

Realizing our vision with new
ideas and bold corporate change— Message from the President —We will share the “WOW!” with
our stakeholders and advance
growth strategies that contributeto a sustainable society.

The medium-term business plan,“Change for Growth”
The new medium-term business plan, “Change for Growth,”
for the three years of fiscal 2021 to 2023 marks the second
stage toward fulfilling our long-term vision, “VISION 2027.”
It is clear that the basic strategies of the previous
medium-term business plan to promote the differentiation
strategy, advance the growth strategy, and fortify the
management base have not sufficiently established thegrowth trajectory needed for sustaining business growth.
We believe that the major changes that society is trying
to bring about provide an opportunity for us to reconsider
how we will respond to the changes, our values, and oursocial responsibility as a manufacturer.
For the new medium-term business plan, we asked
ourselves: What can we do so that JSP will continue
growing in the future, and how can we differentiate theCompany? We also confirmed the two core principles ofincreasing the value we provide, not just economic value
but also social value, by solving customer and social
issues and fortifying our management foundation forincreasing that value. While continuing the strategies for
growth and differentiation, the plan adds a transformation
strategy that will shift the Company to a highly cyclicalbusiness model and make the organization more dynamic
and efficient.

Combining economic value andsocial value
The United Nations Sustainable Development Goals(SDGs) and the COP21 Paris Agreement international
treaty on climate change, both of which were announced

in 2016, called for corporations to actively contribute tosolving social issues and to support a sustainable society. Climate change is becoming an increasingly criticalissue, and we at JSP must incorporate sustainability
deeper into our management and step up our efforts toaddress social issues.
These are core principles of the new medium-termbusiness plan, as we seek to bring about a corporatetransformation by linking increasing corporate value tocreating social value and working to create a sustainable society.
strategy•TheGrowth
growth strategy centers on the four engines forbusiness growth, where we will continue consolidating
management resources and improving management
efficiency through selection and concentration whilepursuing steady and continuous growth through a balanceof offensive and defensive strategies.
For the automotive components as one of growthengines, we will introduce next-generation componentsfeaturing low energy consumption and high recyclability
as well as components designed specifically for electricvehicles. In building and home insulation materials, we will
broaden the marketing of our high-performance insulation
products and augment the added value of our pre-cut
products. In FPD protection materials, we will develop
new demand and construct next-generation production
systems that include support for business continuity
planning. In new business domains, we will focus oncommercializing elements of our existing businesses thatshow potential, while pursuing M&A.

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08

strategy•AsDifferentiation
our corporate philosophy of “Creatively and Actively
Contribute to Society” shows, our company exists not justto sell products and make money, but to provide our customers with products that meet the needs and address theissues of society. We apply this philosophy of differentiating our products through quality and performance while
increasing customer satisfaction by continually enhancing
the uniqueness and competitiveness of our services toprovide value that meets in precise processing, design,
and responses to the customer’s needs.
the management base
•ToFortifying
fortify the management base, we will focus on
improving human resources development, augmenting
occupational safety and environmental protection,and strengthening corporate governance. We will also
respond to the accelerating trend of corporate digitaltransformation by strengthening our information systemfoundation. In addition, we will work to foster the cultureof a rewarding workplace. We believe that improving thevitality and abilities of each person working at JSP is theprimary source for increasing corporate value and fundamental to delivering benefits to all stakeholders.
Strengthening the information system foundation
will be done not only by using digital technology to makeour business processes more efficient, but also by incorporating automation and labor-saving equipment into ourlogistics and production processes and by training andsecuring professional human resources.
We believe that fostering the culture of a rewarding
workplace is important to achieving the SDGs, particularly
for promoting gender equality and decent work. We arepreparing various personnel programs, measures toprovide stable employment for elderly individuals, andvarious means to support a healthy work-life balance.
Improving human resources development is a coremanagement issue, and we plan to enhance our training
system as a way to further strengthen the organization. We
will also increase labor productivity by shortening production processes and automating production lines, which
will shorten working hours, eliminate labor shortages, andimprove the added value in our products and services.
In addition, in April 2021 we created the Sustainability Promotion Department in the Corporate Planning
Division at our head office to more actively promotesustainability management. The department is tasked
with identifying materialities as important issues for theCompany by examining risks and opportunities that thebusiness environment poses to our financial health as wellas the risks and opportunities that our business activities
pose to society and the environment.
Specific areas the department is looking at are themass production of next-generation products that meet

“VISION 2027” Key Elements

energy- and resource-conservation requirements andconcept proposals for environment-friendly products andmaterials. The department will also examine action plansfor virtually zero greenhouse gas emissions, introducing
life cycle assessments (LCAs) of our products and services, responding to climate change, using digitalization
to improve production efficiency, and advancing theCompany’s digital transformation. We believe that each ofthese areas will help contribute to the sustaining growth of
our Group and society.

Fortify and expand
existing businesses

Fortify the
management base

Fiscal 2018–2020

Medium-term business plan, “Deeper & Higher 2020”

To our stakeholders
The new medium-term business plan, “Change for
Growth,” for the three years to fiscal 2023 sets quantitative
targets for net sales of ¥120.0 billion (up 17% from fiscal
2020), operating income of ¥7.7 billion (up 49%), and ROAof 5.6% or higher. The plan’s qualitative objectives are toraise customer satisfaction, link SDGs initiatives to contributing to society and boosting job satisfaction, establish a
strategic and efficient corporate organization, and use risk
assessments and other measures to prevent lost worktime
due to accidents. By improving our corporate value andsocial value, we aim to become “A Global Company for
Global Society.”
We are dedicated to maintaining open dialogue
with shareholders, investors, customers, employees,
and all stakeholders to continue earning their trust andmeeting their expectations. We look forward to yourcontinued support.

Expand thebusiness domain

Fiscal 2021–2023

Medium-term business plan, “Change for Growth”
The basic policy of the previous medium-term management plan to promote the differentiation strategy,advance the growth strategy, and fortify the management base is still in progress, and we believe theprogress that has been made is inadequate. We need new ideas and bold changes, and the new mediumterm management plan therefore sets a three-year course for advancing a transformation strategy.

Transformation Strategy

Basic Strategies
Broaden the value we provide for both
economic value and social value to ourcustomers and for addressing social issues

1

1

Shift to a highly cyclical business model2

Make the organization more dynamic
and efficient

Fortify the management base2

Targets
Quantitative Goals

Qualitative Goals

Fiscal 2020
(Results)

Fiscal 2023
(Goals)¥102.7¥120.0Operating income

¥5.2

¥7.7

Operating income margin (%)

5.1%

6.4%

Amounts in billions of yen

Net sales

Improve customer satisfaction by consciously
increasing efforts to “Deliver with WOW!”
Link SDGs initiatives not only to improving
profitability but also to contributing to society
and boosting job satisfaction
Establish a strategic and efficient corporate
organization
Use risk assessments and other measures toprevent lost worktime due to accidents

Growth Strategy
Four Growth Engines

Automotive components

Building and homeinsulation materials

FPD protection materials

New business domains

vs. 2019 volume

vs. 2019 volume

vs. 2019 volume

New business sales

23% increase

12% increase

20% increase

Vehicle weight reduction andelectrification are tailwinds

Growing demand forenergy-efficient housing

Supply next-generation
products that meet needs forenergy saving and recycling

Expanding demandfor high-performanceinsulation materials

Growing demand for
LCD/organic EL panels,
personal computers
Increasing overseas
business development

Fiscal 2024–2026“VISION 2027”“A Global Company for Global Society”¥3.0 billion

M&A activity
Active commercializationof currently potential
business themes

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10

Financial Highlights

Review by Business Segment

JSP Corporation and Consolidated Subsidiaries
Years ended March 31

JSP Corporation and Consolidated Subsidiaries
Years ended March 31

Thousands of
U.S. dollars1

Millions of yen

For the Year:

2021

2020

2019

2018

2017

2021

Net sales¥102,668¥113,375¥116,133¥114,284¥109,048$927,449

Operating income

5,185

5,083

5,479

9,105

9,612

46,842

Ordinary income

5,519

5,210

5,835

9,217

10,03349,862

Income before income taxes

4,197

4,811

6,047

9,488

10,01337,918Net income attributable to owners of the parent

3,017

3,638

4,309

6,853

7,301

27,257

Total assets

129,053

128,445

129,229

125,728

113,151

1,165,794

Total net assets

85,561

84,646

84,141

84,10576,778772,910

Shareholders’ equity

85,191

83,665

81,53378,70073,488769,573

Bead BusinessAmounts in millions of yen

Net sales

58.3%
Percentageof net sales

At Year-End:Per Share Information:

Yen

Net income2¥ 122.07¥ 144.57¥ 229.91¥ 244.94$ 0.91

Cash dividends

50.00

50.00

50.00

50.00

50.00

0.45

Total net assets

2,767.26

2,729.87

2,691.76

2,667.72

2,433.10

24.99

Operating income(Billions of yen)(Billions of yen)

116 113109 114102

9.6

Net income

Total assets(Billions of yen)(Billions of yen)

attributable to owners of the parent

7.3 6.9

9.1

113
5.5 5.1 5.2

4.3

3.6

125 129 128 129

3.02017 2018 2019 2020 2021

2017 2018 2019 2020 2021

2017 2018 2019 2020 2021

2017 2018 2019 2020 2021

–9.4%

+2.0%

–17.1%+0.5%

In fiscal 2020, the Group
cultivated new demand andincreased sales of high-value-added products, but net
sales fell 9.4% year on year
due to the COVID-19 pandemic
conditions.

Despite the decline in sales,
the Group successfullyincreased operating income
through aggressive measuresthat included boosting salesof high-value-added products,
pursuing lower raw material
prices to reflect changes in the
demand environment for raw
materials, and reducing fixed
costs by reorganizing production operations.

Net income attributable toowners of the parent decreased by 17.1% year on year
owing to the withdrawal fromthe electron beam cross-linked
expanded polyethylene sheetbusiness in the United States,
and an extraordinary loss at aGroup company in Europe due
to a loss of funds caused by afraudulent third party.

YoY¥59,893¥67,771–11.6%

3,550

3,783

–6.1%

Bead Business net sales and operating income declined in fiscal 2020, as
the business was strongly impacted by the drop in demand particularly fromthe worldwide reduction in automobile production during the pandemic.

P-BLOCK/ARPROThe JSP Group manufactures and sells P-BLOCK/ARPRO all over
the world. Demand declined markedly in Asia in the first quarterand in North and South America and Europe in the second quarterdue to the lock-down conditions during the pandemic. Demand
started gradually returning in the third quarter, although the level ofdemand varies by region.

STYRODIA

Extrusion BusinessNotes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥110.70=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.

Net sales

2020

JSP manufactures and sells STYRODIA primarily in Japan. Demand
declined from the Japanese fisheries and agriculture fields in fiscal
2020 during the pandemic conditions. During the year, we introduced
high-value and upgraded products.

U.S. dollars1¥ 101.22

Operating income*

2021

36.6%
Percentageof net sales

Amounts in millions of yen

2021

2020

YoY

Net sales¥37,595¥39,795

–5.5%

2,576

2,293

+12.3%

Operating income*

The Extrusion Business recorded a decline in net sales in fiscal 2020, due
to reduced demand during the pandemic, but generated an increase inprofit by reorganizing its production operations and reducing fixed costs.
Improving demand in the second half more than covered the decline indemand in the first half.

STYRENE PAPER and MIRABOARD

The stay-at-home conditions in the first half supported strong
growth in demand for STYRENE PAPER expanded polystyrene
sheets for food containers, and sales rose significantly,
particularly for take-out and supermarket use. Sales declined for
MIRABOARD, which is used in advertising displays, due to the
reduction in exhibitions and other events.

MIRAMAT, etc.

Demand for industrial-use materials was sluggish in the first halfowing to reduced demand from manufacturing industries, particularly
in Japan and China. In the second half, however, growing demandfor information technology supported a strong rebound in demandfor industrial packaging materials, particularly for MIRAMAT ACE
expanded polyethylene sheet used in flat panel displays.

MIRAFOAM and STYRODIA BLOCK

Overall sales declined as the sluggish sales of thermal insulation
products owing to the reduction in housing starts during the pandemic
more than offset the brisk sales and increased sales volume of civilengineering materials for large construction projects.
* Total for segment operating income are prior to adjustments.

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Our History
We have been using our foaming technologies tocontribute to society since 1962.
Below is a timeline of our growth.

1962–1984

1985–2003

2004–2020

Establishment Period

Growth Period

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 include the groundbreaking MIRAMAT®, the world’s
first expanded polyethylene sheet, and P-BLOCK/ARPRO®, theworld’s first expanded polypropylene beads. The further additionsof MIRABOARD® and MIRAFOAM® rounded out the core products in
JSP’s current lineup.

JSP launched its global expansion with shipments of P-BLOCK/
ARPRO® first to the United States and then to Europe and Asia. As
business steadily expanded, the Company entered an extended
growth phase and was listed on the Second Section of the Tokyo
Stock Exchange. The 2003 integration of Mitsubishi Chemical
Foam Plastic and the addition of the expandable polystyrene (EPS)
business established the Company’s technology and managementfoundation as a specialized maker 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 P-BLOCK/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 operationsin Brazil. At the same time, manufacturing facilities in Japan
were completely overhauled to fortify the Company’s competitive
advantage. JSP is also constructing recycling centers andreducing the environmental footprint of its operations to do its partto preserve the environment.

Major events
What washappening in society

1963 Osaka Office opened, Hiratsuka Plant
operation started

1990 Shares listed on the Second Sectionof the Tokyo Stock Exchange
Kanuma Research Center opened

1971 Kanuma No. 1 Plant operation started
Fukuoka Office opened

1991 Yokkaichi Plant operation started

1972 Sapporo, Sendai, Hiroshima offices
opened1977 Kyushu Styrene Paper Co., Ltd.
established1979 Hokkaido Styrene Paper Co., Ltd.
established1980 Kanuma No. 2 Plant operation started

2008 Recycle Center operation started

1989 Company name changed to JSP
Corporation

1970 Nagoya Office opened

1973
First Oil Shock1994 Kanuma No. 3 Plant operation started
1999 Kanuma No. 4 Plant operation started
2002 Inner companies system introduced

1979
Second Oil Shock1980
Iran-Iraq War

2003 New JSP era launched withintegration of JSP and Mitsubishi
Chemical Foam Plastic

What washappening in society

2005 Share listing moved to the First
Section of the Tokyo Stock Exchange

1988 Science and Technology Director
General’s Award received for
P-BLOCK

1962 Japan Styrene Paper Co., Ltd.
founded1973 Shinguu Styrene Paper Co., Ltd.
established

What washappening in society

2012 50th anniversary
Recycling promotion system and theEnvironmental and Safety Council
established
1991
Japan Economic
Bubble ends
Gulf War2014 JSP made a consolidated subsidiaryof Mitsubishi Gas Chemical through acapital and business alliance
Kitakyushu Plant operation started
2019 Kansai Plant new factory operation
started

2008
Lehman Shock2015
Sustainable
Development Goals
Paris Climate
Agreement
2020
COVID-19 pandemic

13

14

Our Value Creation Process
JSP’s mission is to use its business to contribute to society
by providing value in the form of preserving resources andenergy and increasing convenience in social activities.
Management aims to fulfill that mission by becoming a“true global company” creating value for society.

INPUTS

BUSINESS MODELOUTPUT

Financial foundation
Total assets¥128,445 million
Net assets¥84,646 million

Bead Business

Extrusion BusinessNet sales

3,074

Manufacturing base
Number of manufacturing bases

11 plants(JSP plants)

23 plants(Including JSP andGroup company plants)

Corporate Philosophy

Creatively and Actively
Contribute to SocietyManagement Philosophy

Global Supply System

Long-term vision, “VISION 2027”

Group

Net income

Foam plastic

Responsible Care policy

782

Overseas¥102,668 million

Operating income

ParentDomestic

Contributing to
comfortable living
environments

Consolidated results

Human resources
foundation
Number of employees

OUTCOMES

Fiscal year to March 31, 2021

Business domains

Fiscal year to March 31, 2020

Enhancingfood safety¥5,185 million

attributable to owners of the parent¥3,017 million

ROE (return on equity)

3.7%
Advancingtechnologicalinnovation

Key Elements
Fortify andexpand existing
businesses

For our shareholders

Expand thebusinessdomainFortify the
management
base

Dividend per share¥50.0

Dividend payout ratio

49.4%

Reducing theenvironmental burden

Resources
Office recycling volume3,419 tons
Contributing toindustrial vitality

Environmental
protection

Safety anddisasterprevention

Occupational
health andsafetyChemicaland productsafetyLogistics
safetyCorporate GovernanceCommunity
dialogue15

16

What's New

ESG Initiatives

1.

Using JSP’s unique abilities
to achieve sustaining growth
The business environment has been changing
rapidly in recent years due to the COVID-19
pandemic, growing awareness of plastic pollution
in the oceans and other social issues, andincreasing interest in achieving the SDGs. At JSP,
we view this as a turning point where society is
beginning to shift to a recycling-based economy,
and consider it an opportunity to reassess ourapproach and values as a manufacturer ofmaterials used by society. Following our corporate
philosophy to “creatively and actively contribute tosociety,” we will continue to expand our businessby fortifying our management system andorganizational structure, continuing to develop
our Responsible Care activities, and engaging
in sustainability management to contribute tocreating a sustainable society.

New Sustainability Promotion Department
We recognize the urgent need to promote aggressive initiatives to address social
issues and the importance of making this a management priority in order for JSP
to continue growing in our changing society.
In April 2021, we created the Sustainability Promotion Department in the
Corporate Planning Division to coordinate with relevant departments to develop
and advance new sustainability initiatives linked to our management strategy.

New System in Fiscal 2021
Corporate Planning DivisionCorporate Planning Department

2.

Public and Investor Relations Department

Transferred from the General & Personnel Affairs Division

Sustainability Promotion Department

New

SDGs Workshop
At JSP, we believe that all employees should consciously work toward achieving
the SDGs. In March 2021, we held an SDGs Workshop to accelerate the creationof new businesses that will contribute to solving social issues. The workshop wasattended by 10 people, including representatives from the Corporate Planning
Department, Public and Investor Relations Department, and General Technology
Division. Through active exchange of opinions by participants after deepening
the knowledge of SDGs Compass, they were able to increase their motivation for
SDGs and cultivate flexible creativity. The Sustainability Promotion Department
will continue to lead efforts to promote correct understanding of the SDGs and toraise awareness throughout the Group.

17

18

ESG Initiatives

Environment and Society (Initiatives in Japan)
JSP Responsible Care Management

Community
Dialogue

The Rising Spiral of Responsible Care Activities
The JSP Group promotes Responsible
Care activities as an aspect of fulfillingits corporate philosophy.

Environmental
Protection

What is Responsible Care
Corporate
Philosophy

Logistics
SafetyChemical and
Product
SafetySafety andDisasterPrevention

Occupational
Health and
SafetyResponsible Care is the chemical
manufacturing industry’s environmental,
health, safety and security performance
initiative. JSP began reporting its activities
related to safety and society in fiscal 2013,
the year after becoming a member of the
Responsible Care Committee establishedby the Japan Chemical Industry
Association.

Responsible Care Audits
The persons in charge of environment and safety andmembers of the relevant department conduct annual
Responsible Care Audits at the business sites to assess
based on standardized criteria whether the PDCA cycle
is being carried out properly.
In fiscal 2020, on-site audits were conducted at 12
business sites, including research laboratories. Using
predetermined checklists created for the specific activity
being carried out at each business site, auditors verified
the status of management documents and legal compliance, observed the worksite, and discussed areas ofconcern and priorities specific to each site.

Responsible Care Policy
JSP is an internationally competitive
firm dedicated to safety andprotecting the environment andconducts business activities that
fulfill the expectations and earn thetrust of all stakeholders.

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

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

Continuous
Improvement

We apply the PDCA cycle to the six categories at thefoundation of our Responsible Care activities: environmental protection, safety and disaster prevention, occupational health and safety, chemical and product safety,
logistics safety, and community dialogue. The first step isto create the medium-term plan for Responsible Care activities and to produce individual Responsible Care Action Plans for each workplace consisting of a plan (P) andactions (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 Environment Safety Meeting toreview the steps being taken and outline new actions (A)for improvement that will further advance the rising spiraltoward our objectives.

Check
Do

Plan
Plan

Do

Check

Act

Make a Responsible
Care Action Plan for eachbusiness site based on
the JSP Environmental
and Safety Policy and the
medium-term plan

Assess the status of
Responsible Care

Structure for Responsible Care
JSP Corporation’s structure for Responsible Care isorganized with the Environmental and Safety Council as
the highest decision-making body for quality assurance
issues. Chaired by the president, 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- andlong-term plans.
JSP also convenes a Responsible Care Meetingwith the aim of promoting information exchange about
the JSP Group’s Responsible Care activities.
The Company also seeks to promote Responsible
Care activities throughout the Group through the Environmental Safety Promotion Committee and the Environmental Safety Status Survey for JSP Group and affiliatedcompanies.

Act

Implement the Responsible
Care Action PlanThe Environmental and
Safety Council determines
counteractions for theissue points identified in
the Responsible Care Audit(creating a rising spiral toward
the Company’s vision)

President
Environmental and 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

19

20
ESG Initiatives—Environment and Society (Initiatives in Japan)

Environmental Protection

Chemical and Product Safety

Reducing Greenhouse Gas Emissions

Chemical Substance Risk Assessment

The JSP Group reduced its greenhouse gas emissions by 6.2% (4,600 tons CO2)
in fiscal 2020 from the previous year, and has lowered emissions by roughly
20.8% since fiscal 2013. The reduction is largely due to the solar power generation equipment installed at the Kanuma No. 2 Plant in the previous fiscal year. We
plan to continue using green energy in the future.
Our foam materials also help reduce greenhouse gas emissions in unseen
ways, such as by improving automobile fuel efficiency and home cooling andheating efficiency when used as a heat insulation material.

* The JISHA method is a control banding method, a further developed and improved version of the web system of
the Ministry of Health, Labour and Welfare. The JISHA method is a qualitative and simple method of determining
risk using a matrix of a substance’s chemical and physical properties, the volume handled, working time, and theworking environment.

Greenhouse gas (GHG) emissions
GHG emissions (t-CO2)
100,000

GHG emissions volume versus FY2013 (%)

88.377,53080,000100

84.4
74,161

79.2
75

69,56160,000

50

0

0

FY

2018

2019

JSP’s medium-term plan for Responsible Care for fiscal 2018 to fiscal 2020 set a
standard to steadily implement risk assessment of chemical substances, and theCompany accordingly routinely conducted assessing the risk associated with thechemical 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.

2020

Reducing Energy Consumption
In fiscal 2020, energy consumption per production unit compared to the previous
fiscal year deteriorated to 102.3%, as calculated by the energy usage contribution rate*. As such, we did not achieve our goal to improve from the previous
fiscal year and the five-year average energy consumption per production unit
became 100.1%, which did not fulfill our target to improve the annual average byat least 1%. In 2021, we will continue to implement the PDCA cycle to our energy
conservation activities at each business site while continuing to introduce green
energy sources.
* The contribution rate method measures energy use per ton for each product line and calculates it as a percentage of
the Company’s overall energy consumption per ton. The percentage is then compared to the same line’s percentage inthe previous fiscal year.

Reducing Water Consumption
The production processes at our manufacturing sites have water recirculation
systems that fully reuse water. We examined and repaired water leaks at all factories in fiscal 2020, with the result that water usage decreased from the previous
fiscal year.

Reducing Landfill Waste Volume
As part of the fiscal 2020 medium-term plan for Responsible Care, the Company
systematically implemented measures to reduce waste produced at its businesssites to continue reducing waste delivered to landfill sites (and maintain the volume below that of fiscal 2017). These efforts held the volume delivered to landfills
level with the previous fiscal year.

Product Safety Management
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 uponcustomer request.
* JIS Q 17025 certification is general requirements for the competence of testing and calibration laboratories.

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

Safety and Disaster Prevention
Prevention of Factory Fire Due to Static Electricity
Static electricity is a common part of everyday lives, but the sparks that it can makehave the potential to start a fire if they come in contact with a flammable substance.
Preventing static electric sparks is essential in our plants because the manufacturing processes for foam plastic products can easily generate static electricity and because some of our products contain flammable gases in their foaming
agents. Our manufacturing sites are fully equipped with grounding wires and use
static eliminators and mist humidification to reduce the electrostatic charge in our
products and prevent potential ignition.

21

22
ESG Initiatives—Environment and Society (Initiatives in Japan)

Logistics Safety

Community Dialogue

Achieving a Modal Shift

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.

We are advancing a modal shift away from truck-based logistics to railways andferries that emit less CO2 as we seek 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 infiscal 2018 due to infrastructure damage from the heavy rains in western Japan
were steadily restored and reopened in fiscal 2019.

Together with Shareholders and Investors
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 a corporate report along with other materials and information.
We also seek to raise corporate awareness by implementing the most effective media plan for corporate branding by focusing our information, press releases, advertisements, and other communications on industry trade journals andspecialized magazines.

Together with Employees
The Company has introduced a flex-time system so that employees can realize
an appropriate work-life balance which matches their individual lifestyle. We
will continue seeking to create a work environment where employees can work
flexibly and that accommodates various work styles and changes in the internaland external employment environment. While fully promoting the motivation andindividual growth of employees, we will seek to ensure an efficient and balanced
level of diversity.

Occupational Health and Safety
Measures for Zero Lost-Time Injuries

Together with Suppliers

The JSP Group implements measures aimed at achieving zero worker time lost
due to injuries. In fiscal 2020, we applied the JSP Group Safety Management
Standards and took additional steps to increase worksite safety. These measures
reduced the number of work accidents. We will continue providing thorough safety education training to workers and bolstering essential safety measures.

Number of work stoppages

Procurement of our products is transparent and fair and available to all suppliersof any nationality, company size, or business experience. We also seek to provide“optimal procurement” by being prepared to acquire alternative materials andensuring a stable supply while endeavoring to always offer fair prices based on
current market prices and trends in prices of related materials. We will continue
to deepen our partnerships with our client companies and conduct purchasing
activities with the aim of continuing to develop mutual corporate activities.

Together with Communities

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

12
4
6

0

2

FY

2018

2019

2020

0

FY

2018

2019

2020

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

JSP business sites and Group companies participate in various activities that contribute to local communities. Although activities werelimited in fiscal 2020 due to the COVID-19 pandemic, we endeavored
to remain active to the extent possible.
We continued our annual blood donation drive in Kanuma City,
Tochigi Prefecture, holding events in March and November 2020
instead of the usual months of June and November. Our efforts tocommunicate to employees about our social activities, such as
through announcements and the Company’s intranet system, led to alarge number of employees participating in the event for the first time.
Over 100 employees took time out from their work to donate blood
when buses from the Japanese Red Cross Society visited four of ouroffice sites in the Kanuma area.
We are continuing to take a cautious approach to our social
activities as the pandemic lingers in fiscal 2021. Although at this time
we cannot hold our annual tours for elementary school students andhave had to postpone many of our regular activities, we intend to use
the internet and other ways to continue our social activities.

A blood donation bus at the Kanuma
No. 2 Plant

23

24

ESG Initiatives

Corporate Governance

As of July 1, 2021

Corporate Governance Structure

Status of Corporate GovernanceCorporate Governance Structure

Outline of the Corporate Governance Structure

General Meeting of Shareholders
Appointment/Dismissal

Appointment/Dismissal

ReportBoard of Directors

Audit & Supervisory Board

11 directors(3 outside directors)

Consult
Selection
andRemovalSupervision

Appointment/Dismissal

Audit 4 Audit & Supervisory Board members
Report(2 outside Audit & Supervisory
Board members)

Accounting
AuditorCooperation

ReportAudit

President &Representative Director

Term of office stipulated in the Articles
of Incorporation……………………………………………… 1 year
Chair of the Board of Directors……………………… President

Cooperation

ReportExecutive Officers
Meeting

Report Report

Internal Audit
Dept.
Audit

Business
Divisions

Audit

Number of directors stipulated in the Articles
of Incorporation………………………………………………… 16

Number of directors……………………………………………… 1

Directives andSupervision

Management
Committee

Company with an Audit & Supervisory Board

Directors

Nomination Advisory Board
Remuneration Advisory Board
Consult

Organizational structure

Risk andCompliance
Committee

Guidance andSupervision

Administrative
Divisions

Number of outside directors…………………………………… 3

Auditors
Number of Audit & Supervisory Board members
stipulated in the Articles of Incorporation……………………… 4
Number of Audit & Supervisory Board members……………… 4
Number of Outside Audit & Supervisory Board members…… 2

Number of independent executive officers ……… 5
Cooperation

Group Companies

ReportOutside directors………………………………………………… 3
Outside Audit & Supervisory Board members………………… 2

Note: We have set up an external whistle-blowing
desk for group companies.

Status of Business Execution
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 11 directors, including three outside directors. The Board of Directors meets, in principle, on amonthly basis to deliberate and make decisions on items
as stipulated by law and internal company regulations
and on items important to the management of the Company and to supervise the execution of business activities. The Management Committee serves to supplement
the function of the Board of Directors. The meetings,
attended by the representative directors and senior
executives, are held, in principle, on a monthly basis toconduct preliminary discussions on important management issues. The Company additionally uses an executive officer structure as a system for executing business
operations. The Executive Officers Meeting maintains astructure of 20 directors and executive officers. It meets,in principle, twice a month to deliberate on items important to the management of the Company and to achieve
efficient execution of business.
Regarding the compliance structure, the Risk andCompliance 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 and provides support for management decisions to ensure that the Board of Directors
assumes appropriate levels of risk.

Status of Audits

Basic Policy on Corporate Governance
JSP places top priority on realizing sustaining businessgrowth and enhancing corporate value following ourcorporate philosophy to “creatively and actively contribute to society” and with the objective of fulfilling our
promise to be an internationally competitive company
that emphasizes safety and environmental awareness.
We aim for the management of our Company to earn thetrust 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 tofulfilling this objective.

Basic Policy
1. The Company has adopted the Company with an Audit& Supervisory Board framework in which the Boardof Directors makes decisions on important issues for
the Company and seeks to provide an environment
enabling management to make sound decisions tocarry out the decisions of the Board of Directors.
2. The Company respects the rights and viewpoints of all
stakeholders and seeks to maintain appropriate andcooperative relations.
3. The Company provides appropriate information
disclosure and seeks to ensure transparency for all
stakeholders.
4. As a Company with an Audit & Supervisory Board, theCompany appoints independent outside directors andauditors and ensures sound management practices
by carrying out management monitoring.
5. The Company engages in constructive dialogue
with shareholders.

■ Audits by Audit & Supervisory Board members
The Audit & Supervisory Board comprises four Audit &Supervisory Board members, and has a wide range ofexperienced personnel, including highly independent
outside Audit & Supervisory Board members, those whohave knowledge of finance and accounting and those
who are familiar with the chemical industry.

They carry out audits in line with our management.
The Audit & Supervisory Board members attend meetingsof the Board of Directors and important company meetings and hold monthly 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,
reports are received from the Audit Group as appropriate
concerning the results of these audits, and opinions areexchanged in order to strengthen mutual cooperation.
■ Internal audits
The Internal Audit Department comprises seven auditors
conducting regular audits of the Company and groupcompanies and seeks to enhance the effectivenessof internal controls. In addition to the functions of theInternal Audit Group, the Company assigns a “process
owner” to each business division to strengthen 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 Audit & Supervisory Board
members each time with the aim of facilitating dialogue
and further strengthening mutual collaboration.
■ Accounting audit
I n accordance with the Financial Instruments andExchange Act and the Companies Act, the Company
has contracted with Deloitte Touche Tohmatsu LLC to
perform accounting audits. There is no special interest
between the Company or business executives and thelimited liability audit corporation.

Improving the Effectiveness and Transparency of the Board of Directors
Evaluation of the Effectiveness of the Boardof Directors
The Company issues questionnaires to directors on anannual basis and uses the questionnaires as a basis
for assessing the effectiveness of the Board of Directors. The Board of Directors analyzes and evaluates
the results of the questionnaires based on the opin-

ions of the independent outside directors and outside
auditors.
To evaluate the Board of Directors’ effectivenessin fiscal 2020, questionnaires were distributed to allof the directors and auditors covering the following
items, and the results were discussed at a Board of
Directors meeting.

25

26
ESG Initiatives—Corporate Governance

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
the Board of Directors
4. Matters concerning deliberations by the Board of
Directors
5. Matters concerning support for directors and auditors
6. Risk management
7. Management and business strategy
8. Strategic shareholdings, compensation scheme,
advisory committees
9. Dialogues with shareholders and others
For this evaluation of the effectiveness of the Boardof 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. Discussion continued about the corporate strategies and other topics raised in fiscal 2019,
and the non-financial information used for performancemonitoring was reverified and improved. We are continuing to discuss the appropriate governance for overseas
subsidiaries. Items identified in the fiscal 2020 questionnaire were the need for discussion about medium- andlong-term plans and the provision of information for theoutside officers.
We will continue to improve the effectiveness of
the Board of Directors through continuous efforts on theissues that emerged.

Director and Audit & Supervisory Board
Member Remuneration
Remuneration for directors (excluding part-time directors) is configured as base compensation and reservetype remuneration to be paid upon retirement.
Base compensation comprises fixed compensation, short-term performance-linked compensation, andexecutive shareholder association-contributed compensation. Fixed compensation and executive shareholder
association-contributed compensation, which form partof base compensation, are defined according to job
position and responsibility.
Compensation for part-time directors and Audit &Supervisory Board members comprises base compensation in the form of fixed compensation. With regard
to short-term performance-linked compensation, whichforms part of base compensation, a performance ratio
is calculated for the applicable period in relation to thereference values of the target indicators specified by the
Board of Directors (consolidated net sales, consolidated
operating income, consolidated operating income margin, consolidated net income attributable to owners of
the parent). A coefficient defined in accordance with theperformance ratio is reduced by one, corresponding to

fixed compensation, and this is applied to fixed compensation. The resulting amount is reduced by the amount ofshareholder association-contributed compensation foreach job position to determine the amount of short-term
performance-linked compensation.
Reserve-type remuneration to be paid upon retirement is provided as medium-term performance-linked
compensation. A performance achievement ratio is calculated in relation to the fiscal year-end cumulative amountof the applicable indicators during the consolidated
medium-term management plan, versus the applicableindicators covering the same period during the previous
consolidated medium-term management plan, and acoefficient determined in accordance with this performance achievement ratio is applied to the base reserveamount for the fiscal year to determine the amount ofreserve-type remuneration to be paid upon retirement.
With regard to the amount of remuneration for eachdirector, the Company president drafts a remuneration
proposal for the current fiscal year within the limit determined by a resolution passed at the General Meetingof Shareholders, in accordance with the Company’s
Executive Remuneration Regulations, and in consideration of the business environment, operating conditions,the Company earnings, the Company’s financial status,
and the contribution to be provided by each individual.
The remuneration proposal drafted by the President isconsulted by the Remuneration Advisory Board, which
is made up of the representative director and outside
directors and is chaired by a leading outside director.
The Remuneration Advisory Board then reports thedeliberated remuneration proposal to the President. The
President, on the authorization of the Board of Directors,
determines the remuneration amount for each director.
Remuneration for Audit & Supervisory Board member is set based on negotiations and in consideration of
the contribution to be provided by each individual.

Director and Audit & Supervisory Board member
remuneration totals for fiscal 2020
Position

Total
Number Remuneration(Millions of yen)

Director

12¥237

Of which, outside director

3

16

Audit & Supervisory Board member

543

Of which, outside Audit & Supervisory Board member

2

24

Total

17

¥280

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

Internal Control
Basic Policy on the Internal Control System
The internal control system and risk management system were constructed following the basic policy on
maintaining an internal control system based on the
Companies Act and the Ordinance for Enforcement of
the Companies Act. The basic policy is to revise theinternal control system as needed to ensure the system is functioning at its most effective. In addition, in
accordance with the section on “internal control related to financial reporting” of the Financial Instruments
and Exchange Act, the Internal Audit Department hasestablished a system for continuous evaluation of thereporting mechanism and for immediate correction or
improvement of any inadequacies.

Operation Status of the Internal Control System■ Compliance status
The Company promotes compliance awareness bymaking the JSP Guidelines for Corporate Activities and
JSP Code of Conduct openly available on the corporate
intranet for viewing by Group officers and employees.
The Personnel Affairs Department conducts activities
to promote awareness and organizes training sessions
geared to specific levels of employment to explain the
ethics guidelines at employee training sessions.
As a measure to prevent misconduct, we havealso set up whistle-blowing and consultation desks both
inside the Company and via an independent organization
to make it easy for employees to communicate concerns.
The status of whistle-blowing is reported to the Board of
Directors and the situation status is monitored.
■ Risk management operating status
The Company maintains specific rules related to risk,
including Risk and Compliance Regulations, Risk
Assessment Guidelines, and Crisis Management Regulations, mandating the Crisis Management Department
to convene risk interviews and conduct ongoing examinations to identify, assess, and respond to risks. We arealso taking steps to accelerate risk reduction by identifying risks warranting priority measures and by having
the Risk and Compliance Committee regularly verify the
implementation status of countermeasures.
Regarding the incident of fraudulent fund outflow by
a Group company in Europe following false instructions
by a malicious third party in late October to early November 2020, the JSP Group recognized that risk management was needed for the victimized company as well as
the Group as a whole and is taking steps to improve andstrengthen the risk management system.

■ Status of Board of Directors execution of duties
The Company’s Board of Directors Regulations andDetailed Regulations on Matters to Be Discussed for
the Board of Directors Discussion Agenda stipulate thematters to be submitted for discussion by the Board tofacilitate the appropriate and efficient execution of Boardof Directors duties. Matters of particular importance forcompany management are discussed in advance at theManagement Committee to improve efficiency and deepen the Board’s deliberations. To further improve the efficiency of business execution, decision-making authority
over other matters is delegated in accordance with the
Executive Officers Meeting Regulations and Administrative Authorities Regulations.
■ Status of Group internal control
Affiliated Companies Management Regulations stipulatethat Group companies are required to obtain pre-approval or report on important management matters. The
Internal Audit Department conducts business auditsof Group companies and verifies the effectiveness ofinternal controls. In addition, Group company Audit &Supervisory Board members hold information exchange
meetings to report on and confirm the status of businessexecution at the Group companies.
Transactions with the parent company are examined
to verify that the transactions are conducted similarly
to those with independent parties, and the transaction
status is reported to the Board of Directors, which has thepower to approve the continuation of the transactions.
■ Status of audits by the Audit & Supervisory Board
Audit & Supervisory Board members attend Board of
Directors meetings and important internal meetings andconvene monthly auditor meetings where they exchange
opinions with representative directors and interview business managers to ensure the legality of Group business
operations and the adequacy of the Group audits. The
Audit & Supervisory Board also receives direct reports
related to audits on a regular basis and as needed fromaccounting auditors. The Internal Audit Department
reports the results of each of its internal audits to the
Audit & Supervisory Board to enable it to exchange
opinions and strengthen mutual cooperation. In addition, each corporate auditor assigns one staff member
to serve as an assistant, and the Company covers all
expenses from the execution of duties of the auditors.

27

28

Financial Statements

Consolidated Balance Sheets
JSP Corporation and Consolidated Subsidiaries—As of March 31

Thousands of
U.S. dollars*Millions of yen

2021
ASSETS
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
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* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥110.70=US$1.

2020

2021

¥ 17,400
27,150
3,954
269
6,598
912
4,549
440
1,272
(94)
62,456¥ 13,466
27,484
4,187
14
7,163
984
5,212
584
1,531
(52)
60,575$ 157,182
245,263
35,7262,436
59,607
8,246
41,101
3,983
11,496(850)
564,195

45,760(25,896)(8)
19,85580,462(62,112)(431)
17,91914,620
1,431
(394)
1,036
5,874
9,772
(8,495)(2)
1,274
60,5801,177

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

413,374(233,937)(75)
179,361
726,854(561,085)(3,894)
161,875
132,076
12,929(3,565)9,364
53,06388,276(76,745)(18)
11,512547,253
10,638

1,770
113
1,396
707
1,325
(475)
4,838
66,597¥129,053

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

15,994
1,021
12,615
6,393
11,975(4,292)
43,707
601,599$1,165,794

Thousands of
U.S. dollars*Millions of yen

2021

2020

2021

LIABILITIES AND NET ASSETS
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
Electronically recorded obligations–facilities
Accounts payable–facilities
Asset retirement obligation
Other
Total current liabilities¥ 8,406
1,796
7,500
4,172
216
2,802
707
704
1,549
43
1,156
0
2,219
31,275¥ 8,772
1,983
8,494
3,681
199
2,737
622
412
1,321
157
1,268
0
1,960
31,611$ 75,938
16,22467,757
37,694
1,953
25,313
6,391
6,361
13,995397
10,4502
20,048282,528

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

8,680
702
931
4
780
251
865
12,21643,492

8,642
690
982
2
574
191
1,103
12,186
43,79878,410
6,347
8,415
37
7,048
2,273
7,822
110,355
392,884

10,12813,40563,045(1,387)
85,191

10,12813,40561,518(1,387)
83,66591,496
121,097569,516(12,536)
769,573527(4,182)952(2,703)
3,072
85,561

268(3,255)696(2,290)3,270
84,646

4,768(37,786)
8,600(24,417)27,754
772,910¥129,053¥128,445$1,165,794

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

29

30

Financial Statements

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, 2021

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
General and administrative expenses
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Rent income
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Gain on sales of investment securities
Total extraordinary income
Extraordinary loss
Loss on sales of noncurrent assets
Loss on retirement of noncurrent assets
Impairment loss
Loss on valuation of investment securities
Loss on liquidation of subsidiaries
Loss from money transfer scam at subsidiary
Total extraordinary losses
Income before income taxes
Income taxes–current
Income taxes–deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of the parent* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥110.70=US$1.

Millions of yen

Thousands of
U.S. dollars*Millions of yen

Shareholders’ equity

2021¥102,668
73,942
28,726

2020¥113,375
83,20830,1672021$927,449
667,953
259,496

7,466
16,07423,5405,185

8,290
16,79325,083
5,083

67,444145,209
212,653
46,842

161
47
75
9
394
689

212
15
75
10
254
568

1,457
432
683
90
3,561
6,225

144
128
81
354
5,519

201
134
105
441
5,210

1,306
1,163
734
3,205
49,862

9
–
9

13
32
45

89
–
89

6
97
–
–
242
984
1,332
4,197
1,499
(229)
1,270
2,927
(90)
¥3,017

5
50
381
6
–
–
444
4,811
1,383
173
1,556
3,255
(383)
¥3,638

59
884
―
―
2,192
8,895
12,03337,91813,546(2,070)11,47626,442(814)$27,257

Balance, beginning of period

Capital stock

Capital surplus

Retained earnings¥10,128¥13,405¥61,518

Treasury stock

Total shareholders’equity¥(1,387)¥83,665

Changes of items during the period:
Dividends from surplus(1,490)Net income attributable to owners of the parent

3,017(1,490)
3,017

Purchase of treasury stock

(0)

(0)

Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

–

–

1,526

(0)

1,526

¥10,128¥13,405¥63,045¥(1,387)¥85,191

Non-controllinginterests

Net assets

Valuation and translation adjustments
Valuation
currency Remeasurements Total valuationdifference on Foreigntranslationof defined benefit and translation
available-for-saleadjustmentplans
adjustment
securities

Balance, beginning of period¥268¥(3,255)¥696¥(2,290)¥3,270¥84,646

Changes of items during the period:
Dividends from surplus(1,490)Net income attributable to owners of the parent

3,017
(0)

Purchase of treasury stock
Net changes of items other than shareholders’ equity

259

(927)

255

(412)

(198)

(611)

Total changes of items during the period

259

(927)

255

(412)

(198)

915

Balance, end of period¥527¥(4,182)¥952¥(2,703)¥3,072¥85,561

Thousands of U.S. dollars*
Shareholders’ equity

Balance, beginning of period

Capital stock

Capital surplus

Retained earnings

Treasury stock

Total shareholders’equity$91,496$121,097$555,723$(12,530)$755,785

Changes of items during the period:
Dividends from surplus(13,463)

Net income attributable to owners of the parent

27,257(13,463)
27,257Purchase of treasury stock

(5)

(5)

Net changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period––

13,793(5)

13,787$91,496$121,097$569,516$(12,536)$769,573

Valuation and translation adjustments
Valuation
currency Remeasurements Total valuationdifference on Foreigntranslationof defined benefit and translation
available-for-saleadjustmentplans
adjustment
securities

Balance, beginning of period$2,428$(29,407)$6,290$(20,688)

Non-controllinginterests$29,546

Net assets$764,644

Changes of items during the period:
Dividends from surplus(13,463)

Net income attributable to owners of the parent

27,257(5)Purchase of treasury stock
Net changes of items other than shareholders’ equity

2,340(8,379)2,309(3,729)(1,791)(5,521)

Total changes of items during the period

2,340(8,379)2,309(3,729)(1,791)

8,266

Balance, end of period$4,768$(37,786)$8,600$(24,417)$27,754$772,910* U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥110.70=US$1.

31

32

Financial Statements

Consolidated Statements of Cash Flows

Stock Information

JSP Corporation and Consolidated Subsidiaries—Years ended March 31

2021
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
Loss on liquidation of subsidiaries
Loss from money transfer scam at subsidiary
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
SubtotalInterest and dividends income received
Interest expenses paid
Business structure improvement expenses paid
Loss from money transfer scam at subsidiary
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 ¥110.70=US$1.

As of March 31, 2021

Thousands of
U.S. dollars*Millions of yen

2021

2020

¥4,197
6,608
–
34
224
273
1
94
–
–
(209)
144
84
(9)
242
984
453
1,111
(549)
295
274
14,257
220
(145)
–
(984)
(1,136)
12,211¥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$37,918
59,698
–
309
2,023
2,466
17
855
–
–
(1,890)
1,306
765
(90)
2,192
8,895
4,100
10,036(4,961)
2,666
2,482
128,795
1,991(1,314)–(8,895)(10,262)
110,314(5,668)
54
(18)
(6)
4
440
20
(5,174)(12,200)
63
(120)
(6)
39
(230)
49
(12,406)(51,209)
494
(169)
(60)
36
3,976
185
(46,747)

(916)
4,500
(3,969)(0)(1,490)
(168)

1,021
4,600
(4,158)(0)(1,490)(182)(8,276)40,650(35,854)(5)(13,463)(1,519)

–

66

–

(221)
(2,266)
(76)
4,693
7,584
¥12,278

(214)
(358)
(217)
(1,498)
9,082¥7,584(2,000)(20,471)(693)
42,401
68,512$110,913

Listing market

First Section of the Tokyo Stock Exchange

Distribution of shares by shareholder type

Securities code

7942

Financial institutions

10.20%

Share trading unit 100 shares
Total number of
46,000,000
authorized sharesFiscal year

Financial
instruments
business operators,
other corporations

Foreign companies
and individuals

10.98%

Individuals, other

April 1–March 31

58.69%

20.13%

Major shareholders
Shares held
(thousands)

Voting rightratio (%)

Mitsubishi Gas Chemical Company, Inc.

16,02053.74

Custody Bank of Japan, Ltd.

1,978

6.63

JSP Client Stock Ownership Plan

1,191

3.99

The Master Trust Bank of Japan, Ltd.

631

2.11

RE FUND 107-CLIENT AC (Standing proxy: Citibank, N.A., Tokyo Branch)

407

1.36

UBS AG LONDON A/C IPB SEGREGATED CLIENT ACCOUNT (Standing proxy: Citibank, N.A., Tokyo Branch)

318

1.06

JSP Employee Stock Ownership Plan

299

1.00

MSIP CLIENT SECURITIES (Standing proxy: Morgan Stanley MUFG Securities Co., Ltd.)

250

0.84

Nippon Life Insurance Company

241

0.80

NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON LENDING 15 PCT TREATY ACCOUNT(Standing proxy: The Hongkong and Shanghai Banking Corporation, Tokyo Branch)

212

0.71

Notes: 1. The above list of major shareholders does not include treasury stock held by the company (1,604,700 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: Custody Bank of Japan, Ltd. 1,978,000 shares; The Master Trust
Bank of Japan, Ltd. 631,000 shares.

Number of shareholders

As of March 31

35,00028,99830,00023,16525,00020,00031,44618,182

18,37420172018

15,00010,000
5,000
0

2019

2020

2021

33

34

Global Network

Corporate Data

As of March 31, 2021

As of March 31, 2021

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

President, representative director*
Tomohiko Okubo
1

4
1
1

6

FoundedJanuary 1962

5

1

Paid-in capital

7

1

2

15

11
12
13

14

8

¥10,128 million

6

10
9

2
3
4
5

7
8

Number of shareholders
31,446

Stock exchange listing
Tokyo (First Section: 7942)

3

Fiscal year-end
March 31

Investor relations contact
Public and Investor Relations Department
Tel: +81-3-6212-6306

Number of employees
2,996North America

Europe

Asia

Japan

U.S.A.

FranceSouth Korea

1

Hokkaido

2

Kanuma3

Kashima

4

Tokyo Head Office

5

Yokkaichi

Information disclosure

6

Kansai

JSP websites

7

Kitakyushu

8

Kyushu1

JSP International Group Ltd.

Mexico2

JSP International de México S.A.de C.V.

4

JSP International SARL

Czechia5

JSP International s.r.o.

GermanySouth America
Brazil3

JSP Brasil Industria De Plasticos Ltda.

6(Innovation Center)

7

KOSPA Corporation

Taiwan8

Taiwan JSP Chemical Co., Ltd.

Singapore
9

JSP Foam Products PTE. Ltd.

Thailand10 JSP Foam Products (Thailand) Co., Ltd.

China
11 JSP Advanced Materials (Wuxi) Co., Ltd.
12 JSP Plastics (Shanghai) Co., Ltd.
13 Kunshan JSP Seihoku Packaging Material Co., Ltd.
14 JSP Advanced Materials (Dongguan) Co., Ltd.
15 JSP Advanced Materials (Wuhan) Co., Ltd.

Major affiliates
36 in total* As of June 30, 2021

https://www.co-jsp.co.jp
https://www.jsp.com

https://www.jsp.com

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