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Annual Review 2015
Year ended March 31, 2015

ABOUT JSP
JSP was established in 1962 as a manufacturerof foamed plastics, and today it continues todevelop universally useful products and unique
technologies in this field. Exhibiting distinctly
effective and dynamic material properties, JSP
products deliver economic and environmental
value. A true global supplier, we help our customers increase their profitability through theinnovative use of our products.

BUSINESSSEGMENTSSPECIAL FEATURE:
New Products Debuted04				Centralization of MIRAFOAMTM Operations
		
ARPRO® Supports Radical Design
REVIEW OF OPERATIONS
06 	Bead Business07	Notes to Consolidated
Financial Statements

20		
Global Network
21		
Corporate Data

Copyright 2015, JSP Corporation.
All rights reserved.

Forward-Looking Statements
This annual review includes forward-looking statements
related to JSP Corporation’s plans, strategies, and business results. These statements 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.

Thousands of
U.S. dollars1

2015

2014

2013

2012

2011

2015

¥116,923¥112,128¥96,038¥93,397¥91,971$972,985

Net sales
Operating income

5,667

5,909

4,575

5,296

7,552

47,161

Ordinary income

6,044

6,509

4,927

5,536

7,874

50,303

Income before income taxes

6,000

6,536

4,752

5,176

7,470

49,936

Net income

4,039

4,404

3,324

3,100

4,881

33,618

Total assets

116,717

108,420

95,56589,07289,152

971,273

CIVIL ENGINEERING 

Total net assets

70,35262,37553,43147,362

46,481

585,440

JSP products are supplied for civil engineering
purposes such as drainage underlayment, lightweight embankment, anti-vibration panels, retaining walls, etc. The structural and semi-structural
nature of our products combined with key attributes such as thermal insulation, water resistance,and porosity enables traditional materials to be
replaced with more-resilient materials.

Shareholders’ equity

65,30757,85349,83844,721

43,843

543,461

Yen

U.S. dollars1

Consolidated Statements of Income

13

Millions of yen

JSP products are employed as a construction
material for insulating, waterproofing, and preventing moisture condensation in building walls, roofs,
and tatami mats. Furthermore, we are developing
external insulation construction methods thatallow air to flow naturally for a more comfortableliving environment.

11
Consolidated Statements of		Changes In Net Assets
	Consolidated Statements ofCash Flows perating income fell 4.1% year on year as a result of the time lag in the settlement of selling price adjustmentsO
following the rise of fuel and raw material prices.

For the Year:

Extrusion Business

12In the Extrusion segment, sales in the food packaging and the civil engineering segments increased, while sales
in the packaging and the construction segments fell in response to a recent hike in Japan’s consumption tax rate.
Overall, sales in the Extrusion business rose 0.8% year on year.

CONSTRUCTION 

FINANCIAL SECTION
08 Consolidated Balance Sheets10

In the Bead segment, global sales of ARPRO®/P-BLOCK™ increased mainly due to the growing demand forautomotive applications, together with the effect from the depreciation of the yen. Although sales of STYRODIA®
decreased due to a fall in demand from fisheries industries, profits improved following an adjustment to its retailprice. Overall, sales in the Bead business rose 4.9% year on year.

MAJOR
FACTORSJSP products significantly reduce vehicle weightand increase passenger and occupant safety as
automotive components. Lightweight, structurallystrong with excellent energy absorption andthermal and acoustic insulation properties, ourproducts enable the production of thousands ofautomotive components across brands, continents, and vehicle-types.

01		
Financial Highlights
Letter from the President

JSP Corporation and Consolidated Subsidiaries
Years ended March 31

AUTOMOTIVE CONTENTS
02

FINANCIAL HIGHLIGHTSAt Year-End:Per Share Information:
Net income2¥   135.50¥   147.73¥   111.49¥   103.98¥   161.25$ 1.13

Cash dividends

30.00

30.00

30.00

30.00

30.00

0.25

Total net assets

2,190.61

1,940.48

1,671.55

1,499.89

1,470.44

18.23

Notes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥120.17=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.

PACKAGING 
JSP products are used as packaging materials
for household electronics and IT-related equipmentin addition to agricultural usage. These highperformance products feature excellent shock
resistance and energy absorbance. JSP sheet,board, and bead products provide a diverse
range of lightweight and environmentally
responsible packaging solutions using molding
and fabrication techniques.

Net Sales

Operating Income and
Net Income

Total Assets

Billions of yen

Billions of yen

Billions of yen

120

8

120

90

6

90

60

4

60

30

2

30

FOOD PACKAGING 
JSP products are designed to wrap or containfood, meeting high requirements to protect temperature variation, humidity, and mechanicalshock. Our products enable many types of foodpackaging solutions, barrier protection (against
ingress of oxygen water vapor, dust), extensionof products’ shelf life, and convenience of foodpackaging. Our discrete food packaging includes
tray, box, container, and sheet solutions.

0

11

12

13

14

15

0

11

12

13

14

15

0

11

12

13

14

15

Operating income
Net income

JSP ANNUAL REVIEW 201501

LETTER FROM THE PRESIDENT

Taking JSP to
the Next Stage,

Medium-Term Management Plan: “Deepen & Grow 2017” (FY2015–2017)

Basic Policy

Raw
Materials

Technologies

Markets

Numerical Targets
for Fiscal Year 2017
NET SALES 

Promoting theDifferentiation Strategy

with Strong Passion and Determination

DEEPEN¥135,000 million(including ¥10,000 million from new products)

OPERATING MARGIN 

Promoting the
Growth Strategy

GROW
Sustainable
Growth

6.5% or more

* ROE: Approx. 8%; Equity ratio: Approx. 59%(Reference)In the previous three-year medium-term management plan,

Concerning expanding business activities globally, to“Deepen & Grow,” which came to a conclusion in the fiscal

support our core ARPRO /P-BLOCK™ business, we estab-year ended March 31, 2015, we adopted “deepen” andlished new plants in Brazil, China, and Japan and increased“grow” as key words of the plan’s management vision, while

production capacity throughout Asia, Europe, and North

undertake efforts to make our existing businesses more prof-

we adopted the business policies of strengthening current

America. The continuing market penetration of ARPRO®/itable. To this end, we will develop new value-added grades,business activities, expanding business activities globally, and

P-BLOCK™ and diversification of its applications also

create new technologies, and explore new applications forby focusing our commitment to “Deepen & Grow 2017.”

creating entirely new business activities. Guided by this visioncontributed to keeping business strong in each region. In

ARPRO /P-BLOCK™ by keeping up with evolving market

With strong passion and determination, we will drive JSP to

and these policies, we advanced business activities over the

addition, we made a full-scale entry into new business fields

demand as well as concentrating management resources

the next stage.

period covered by the plan.

by constructing our new expanded polyethylene (PE) sheet

effectively in g
­ rowing fields.

In fiscal 2014, the final year of the plan, we were unfortunately unable to reach our projected operating income target®

foam plant in North America. Through these efforts, we
succeeded in further expanding our robust global network.

due to the influence of such factors as the depreciation of the

As for creating entirely new business activities, various

yen and a rise in fuel and raw material prices. However, with

development themes have been discussed and reviewed,

the collective effort of our employees, I feel we were able toand some of these will move on to the next stage.

endeavor to further expand business operations under theseplaces “commercialization” as its core theme. We will there-

strategies going forward.

fore strive to commercialize new products that will take JSP

In order to promote the differentiation strategy, we will®

In order to drive the growth strategy, we will support sus-

­business that is growing substantially. In addition to the previincreasing production capacity, we aim to first stabilize andimplies, the plan aims to move the previous plan ahead to thethen strengthen our global business foundation by establish-

introduced new high-value-added products to the market thatnext stage. The basic policy of the plan is founded on theing a ­second core business. In addition, we will enhanceutilize our proprietary technologies. In addition, we reorganizedpromotion of two strategies—the differentiation strategy andinternal c­ ontrols in each region.

manufacturing facilities in order to enhance competitiveness,the growth strategy. Through well-balanced management

increase production capacity, and optimize logistics.

based on “concentration in core competencies,” we will

02

JSP ANNUAL REVIEW 2015

July 2015

Our ARPRO®/P-BLOCK™ business is a promising coreous plan’s objectives of expanding our business bases andIn pursuit of strengthening current business activities, we

We are dedicated to meeting the needs of our customers

by creating new products.

In April 2015, we started the current three-year medium-

Company going forward.

of raw materials, technologies, and markets.

tainable growth by further expanding operations globally andterm management plan, “Deepen & Grow 2017.” As its nameachieve results that create a solid foundation for theto the next stage by clarifying our competitive edge in terms

Kozo Tsukamoto
President, Representative Director

As for creating new products, shifting from the major
theme of our previous plan, “discovery,” the current plan

JSP ANNUAL REVIEW 201503

SPECIAL FEATURE

JAPANNEW PRODUCTS DEBUTEDat EXHIBITIONEMEA

ARPRO® SUPPORTS RADICALLIGHTWEIGHT DOOR PANELIn December 2014, JSP participated in the exhibition “Eco-Products 2014

Driving sustainability, performance, and weight reduction, our ARPRO®/P-Block™ product has delivered a uniquein JAPAN,” held at the Tokyo Big Sight exhibition center in Japan. In thisfirst in automotive interior design by enabling a new application for the door panels of the BMW i8.

exhibition, we displayed focusing on products of our first public release or of

Reducing weight by approximately 22% while improving crash performance, ARPRO® enabled the develop-

innovative technologies rather than that of our conventional product line.

ment of a complete new door panel carrier for the BMW i8. The upward swinging doors on the i8 are a visualWe made first public release of MIRAWOOMO and MIRAFLARE ,highlight and emphasize the sporty characteristics of the car. The innovative door structure required a strong,®

®

which are our first venture into materials for garments. These are lightweight

yet lightweight material to ensure that the doors met all of Tier-1, Magna’s demands for performance and aesthe-polyethylene fibers made by special processing, and they are expected to betics; the solution was ARPRO®.

applied in various fields with their high-insulating properties and durability.
Our exhibition booth also showcased a variety of environment-conscious
new products, with characteristics such as lightweight, plant derived, or
maintenance free:

The ability of ARPRO® to reduce weight, reduce tooling investment by 50%, and provide insulation of the door
panel, along with integration of the cable channels and switches, has proven fundamental to the use of a scissor
door design for the first time in a series-production vehicle.
ARPRO® has been widely used in previous BMW• LACTIF®: a plant-derived, polylatic acid-based and heat-resistant resin for extrusion foammodels including structural applications such as X5/X6• BOTLUM™: a product with woody texture made of recycled PET bottles

seat benches and the 5 Series seat back. Due to its• MIRAPARE™: lightweight and washable pallets

design flexibility and the ability to produce complex 3D• GAS-SOSSY™: a resin material with barrier properties, which is used for barrier containers,

shapes, our part in the BMW i8 project has now led onsuch as gasoline tanks.

to other exciting developments that will drive vehicle

We were pleased to have this opportunity to make better understanding of attendees on our new foam

production advances in the near future.

plastic products, which are useful for daily life.

JAPAN

OPERATIONS STARTED at the
KANUMA MIRAFOAM™ PLANTMIRAFOAM™, an extruded board made of expanded polystyrene, iswidely used as thermal insulation material in houses and buildings and asa civil engineering material. In recent years, the market for the producthas been expanding with the growing demand for energy saving materials
in Japan. It is also expected that the demand for MIRAFOAM™ will further
increase due to Japan’s mandatory energy-conservation standards thatwill come into effect in 2020 and construction of facilities for the 2020
Tokyo Olympics.
To meet the expected growth in demand, we decided to centralize
its manufacturing, secondary processing, storage, and shipping activities, which had previously been spread across several locations in the
Kanuma area. This centralization of the operations enabled us to establish a more efficient product supply system and a manufacturing
framework for functional and value-added products. Operations at the
new Kanuma MIRAFOAM™ plant started in January 2015.

04

JSP ANNUAL REVIEW 2015

JSP ANNUAL REVIEW 201505

REVIEW OF OPERATIONSBEAD BUSINESSEXTRUSION BUSINESSPERCENTAGE OF TOTAL SALESPERCENTAGE OF TOTAL SALES

60.2 %

ARPRO®/P-BLOCK™

34.1 %MIRAMAT®

SALES*

70,340million

39,915million¥¥* Sales amount represents sales to external customers only.

FOAMCORE™

SALES** Sales amount represents sales to external customers only.

STYRODIA®

STYRENE PAPER™

BUSINESS OUTLINE MIRAFOAM™

BUSINESS OUTLINE 

ARPRO®/P-BLOCK™ (expanded polypropylene), now being manu-

America increased. In South America, sales decreased as slowing

Sales of MIRAMAT® (expanded polyethylene sheet used as anof advertising channels, such as the growing use of digital media.

factured and sold worldwide, is used in automotive parts, sucheconomic growth brought down automobile sales volume. In Europe,industrial packaging material), which is used mainly for the trans-

As for MIRAFOAM™ (extruded board made of expanded

as bumper cores, interior auto parts, and seat cores, and as ansales increased as the economic recovery raised demand for

portation of substrates for LCD TVs and other digital home­polystyrene; a key material for construction and civil engineering

insulation and cushioning material for housing facilities, a cushion-

automotive parts. In China and other Asian countries, sales overall

appliances, decreased due to the post-consumption tax hikematerials), sales were down in the construction sector because of

ing and packaging material in returnable containers for transporting

increased because of a continuation of strong growth in sales offalloff in demand that reduced demand for large appliances anda decline in construction starts of houses and condominiums fol-

IT equipment, a cushioning and packaging material for home

automobiles and home appliances as well as an expansion ofother consumer durables. Sales of CAPLON™ (air-bubble poly-lowing the April 2014 consumption tax hike. However, sales wereappliances, and an impact protection material for artificial sports

new demand. Demand for STYRODIA® (expandable polystyrene

ethylene cushioning material) increased due to new applications

higher in the civil engineering sector as demand increased nation-

surfaces. Sales overall were strong, on expanded uses in newbeads) was firm in the construction and the civil engineeringfor packaging materials for automotive parts. Sales of P-BOARD™

wide, including demand associated with reconstruction activity

automotive parts and higher demand for home appliance packaging

sectors and the home appliance sector. But demand in the fisheries(expanded polypropylene sheet), which is used mainly for trans-

following the Great East Japan Earthquake

and cushioning. In Japan, there were new applications for mini-and the agriculture sectors, the primary markets for this material,

portation containers for automotive parts and home appliances,of March 2011.

vehicles and insulation materials in equipment used in houses.

was weak mainly because of unfavorable weather. Although sales

decreased in response to the sluggishness in the automobile andAs a result, Extrusion segment sales increased 0.8%, toHowever, sales overall declined because of lower demand for beads

decreased, growth in sales of functional grades of STYRODIA ,the home appliance markets in Japan. Sales of STYRENE PAPER™

¥39,915 million, and operating income decreased 30.0%, toused by automobile, housing equipment, and IT home applianceproduct price revisions, and measures to reduce all cost categories(expanded polystyrene sheet used in food packaging), which is¥1,348 million. Sales were higher in the food packaging

manufacturers, as they reduced inventories following the April

resulted in higher earnings. Sales of FOAMCORE™ (a hybrid molded

used in many applications, such as for instant noodles packages,

material and the civil engineering sectors but lower in the2014 consumption tax hike. Earnings were negatively impacted

product used as a ceiling material for prefabricated bathroom

lunch boxes, and trays used by large retailers, increased thanks

industrial packaging material and the construction sectors.

by the decline in sales as well as the higher cost of raw materials,

units) decreased because of the downturn in housing starts.

to continued strong demand along with measures to increase

Delays in revising prices to reflect the higher cost of raw materials,

sales of new products and target new applications. Sales ofenergy, and distribution were one reason for the decline in

MIRABOARD™ (expanded polystyrene board used in advertisingsegment earnings.

fuel, and energy. In North America, local-currency sales decreased
as automobile sales volume dropped briefly because of a record
cold wave. But after translating sales into yen, sales in North

06

JSP ANNUAL REVIEW 2015®

As a result, Bead segment sales increased 4.9%, to ¥70,340
million, and operating income increased 6.8%, to ¥4,854 million.

displays and folding boxes) decreased due to the diversification

JSP ANNUAL REVIEW 2015

07

CONSOLIDATED BALANCE SHEETSJSP Corporation and Consolidated Subsidiaries
As of March 31

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
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Tangible assets
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  Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets  Investment securities   Long-term loans receivable   Deferred tax assets  Other   Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets

Total assets

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 15,314
30,762
2,513
7
7,127
1,030
4,422
878
718
1,819
(489)
64,106¥ 10,197
31,307
919
43
6,890
1,007
4,329
785
948
3,254
(427)
59,255$ 127,440
255,995
20,91759
59,3158,573
36,803
7,314
5,981
15,145(4,077)533,465

36,317(20,740)(18)
15,557
72,522(56,920)(101)
15,50014,438
94
(44)
49
2,040
9,877
(8,937)940
48,527
1,014

32,160(19,422)(18)
12,71967,301(53,911)(287)
13,103
14,194
133
(69)
63
3,806
9,237
(8,381)855
44,743
1,102

302,214(172,592)(156)
129,466
603,496(473,664)(847)
128,985
120,148
787
(371)
416
16,97982,199(74,371)
7,828
403,821
8,441

1,882
45
313
837
(9)
3,069
52,611

1,682
34
730
898
(26)
3,319
49,164

15,665
381
2,609
6,968
(77)
25,546437,808¥116,717¥108,420$ 971,273

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
Deferred tax liabilities
Provision for bonuses
Notes payable–facilities
Electronically recorded obligations–facilities
Accounts payable–facilities
Other
Total current liabilities

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

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
Minority interests
Total net assets
Total liabilities and net assets

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 10,189
1,181
7,757
5,578
20
3,139
342
477
21
1,065
22
41
1,395
2,229
33,460¥ 11,277
1,116
6,620
4,872
20
2,917
903
91
8
1,210
14
73
1,071
2,205
32,404$ 84,788
9,829
64,554
46,424
172
26,128
2,848
3,972
175
8,864
185
342
11,61018,551
278,443

10,987
16
1,068
118
19
217
478
12,90546,365

10,376
36
644
191
14
1,907
468
13,63946,04491,433
140
8,889
983
159
1,807
3,980
107,390385,833

10,12813,40540,253(1,378)62,40910,12813,40536,621(1,374)58,78084,286
111,554334,968(11,468)
519,340

269
2,348
281
2,898
5,044
70,352¥116,717

179
(596)
(509)
(926)
4,522
62,375¥108,420

2,240
19,541
2,339
24,121
41,979585,440$971,273

The accompanying notes are an integral part of these statements.

08

JSP ANNUAL REVIEW 2015

JSP ANNUAL REVIEW 201509

CONSOLIDATED STATEMENTS OF INCOMECONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETSJSP Corporation and Consolidated Subsidiaries
Years ended March 31

JSP Corporation and Consolidated Subsidiaries
Years ended March 31

2015

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
Foreign exchange gains
Equity in earnings of affiliates
Other
Total non-operating income
Non-operating expenses
Interest expenses
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 retirement of noncurrent assets
Loss on sales of noncurrent assets
Loss on valuation of investment securities
Office transfer expenses
Total extraordinary losses
Income before income taxes
Income taxes–current
Income taxes–deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income
The accompanying notes are an integral part of these statements.

Millions of yen

Thousands of
U.S. dollars(Note 1)

2014

2015

¥116,923
88,24028,683¥112,128
83,88828,240$972,985
734,296
238,689

7,605
15,41023,015
5,667

7,426
14,904
22,331
5,909

63,290128,239
191,528
47,161

240
21
55
13
3
323
658

209
22
61
250
3
390
937

1,999
181
463
112
31
2,694
5,480

191
89
280
6,044

219
116
336
6,509

1,590
747
2,337
50,303

9
30
40

55
66
122

82
252
334

38
1
40
3
84
6,000
1,321
329
1,651
4,349
309
¥  4,039

60
34
—
—
95
6,536
1,985
(85)
1,900
4,636
231
¥  4,404

319
14
341
27
701
49,936
10,9992,740
13,73936,196
2,578$ 33,618

Millions of yen
2015
Shareholders’ equity

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

Capital stock

Capital surplus

Retained earnings

Treasury stock¥10,128¥13,405¥(1,374)

10,12813,405¥36,621486
37,107

Total
shareholders’ equity(1,374)¥58,780486
59,266

(3)

(894)
4,039
(3)

(3)
¥(1,378)

3,142¥62,409

(894)
4,039

—
¥10,128—¥13,405

3,145¥40,253

Valuation and translation adjustments

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
Purchase of treasury stockNet changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Valuationdifference on
available-for-salesecurities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total valuationand translation
adjustments

Minority
interests¥179¥ (596)¥(509)¥ (926)¥4,522

179

(596)

(509)

(926)

4,522

¥62,375486
62,862522
522¥5,044

(894)
4,039
(3)
4,347
7,490
¥70,352

90
90
¥269

2,944
2,944
¥2,348

790
790
¥ 281

3,825
3,825
¥2,898

Net assets

Thousands of U.S. dollars (Note 1)
2015
Shareholders’ equity

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
Purchase of treasury stockNet changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Capital stock

Capital surplus

Retained earnings

Treasury stock$84,286$111,554$(11,441)

84,286

111,5540$304,746
4,047
308,793

Total
shareholders’ equity(11,441)$489,144
4,047
493,191(26)(7,443)33,618(26)(26)$(11,468)

26,149$519,340(7,443)33,618—$84,286—$111,554

26,175$334,968

Valuation and translation adjustments

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
Purchase of treasury stockNet changes of items other than shareholders’ equity
Total changes of items during the period
Balance, end of period

Valuationdifference on
available-for-salesecurities

Foreigncurrencytranslation
adjustment

Remeasurementsof defined
benefit plans

Total valuationand translation
adjustments

Minority
interests$1,490$ (4,964)$(4,238)$ (7,712)$37,630

1,490(4,964)(4,238)(7,712)

37,630$519,063
4,047
523,110

4,349
4,349
$41,979(7,443)33,618(26)
36,18262,331$585,440

750
750$2,24024,50524,505$19,541

6,577
6,577
$ 2,339

31,83331,833$24,121

Net assets

The accompanying notes are an integral part of these statements.

10

JSP ANNUAL REVIEW 2015

JSP ANNUAL REVIEW 201511

CONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JSP Corporation and Consolidated Subsidiaries
Years ended March 31

Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
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
Increase (decrease) in notes and accounts payable–trade
Decrease (increase) in inventories
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends income received
Interest 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
Purchase of investments in subsidiaries
Proceeds from acquisition of shares of subsidiaries resulting in change in scopeof consolidation
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
Cash dividends paid to minority shareholders
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
The accompanying notes are an integral part of these statements.

12

JSP ANNUAL REVIEW 2015

Millions of yen

Thousands of
U.S. dollars(Note 1)

2015

2014

2015

¥ 6,000
5,327
(11)
(165)
229
(69)
30
(30)
40
(261)
191
85
(3)
235
(1,549)
166
398
(123)
10,491262(194)(2,269)8,289¥ 6,536
4,865
118
151
204
9
39
(66)
—
(231)
219
73
(3)
(1,436)
(440)
(959)
(5)
(463)
8,611
236
(221)
(1,424)7,200$ 49,936
44,331(92)(1,377)
1,910
(576)
251
(250)
341
(2,180)
1,590
709
(31)
1,960
(12,891)
1,382
3,315
(1,026)87,302
2,181(1,616)(18,889)
68,978(7,575)
206
(7)
(125)
63
(2,598)(34)(8,735)
156
(8)
(7)
149
1,775
—

(63,043)
1,719(60)(1,042)532(21,627)
(289)

—
2,042
(8,029)215(1,975)(8,430)—16,993(66,817)956
6,600(5,282)
(3)
(894)
(198)
(21)
1,156
504
1,920
6,972
¥ 8,893

40
6,900(5,639)
(2)
(894)
(172)
(41)
190
995
(42)
7,015
¥ 6,972

7,957
54,922(43,959)(26)(7,443)(1,650)
(176)
9,625
4,196
15,98358,025$ 74,007

1. BASIS OF PRESENTATION OF CONSOLIDATEDFINANCIAL STATEMENTS
The accompanying consolidated financial statements have been
prepared from the financial statements filed with the Ministry of
Finance as required by the Japanese Financial Instruments andExchange Act, in accordance with accounting principles andpractices generally accepted in Japan. The accompanying consolidated financial statements include the accounts of JSP
Corporation (the “Company”), and its domestic and foreign subsidiaries that are more than 50% owned. Significant intercompany balances and transactions have been eliminated inconsolidation. Investments in affiliates more than 15% owned areaccounted for under the equity method of accounting.
In addition, the accompanying notes include certain information that is not required under generally accepted accounting
principles and practices in Japan, but is presented herein as
additional information. The accompanying consolidated financial
statements have also been presented in U.S. dollars by translating all yen amounts for the year ended March 31, 2015 using an
exchange rate of ¥120.17 to U.S. $ 1.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. Investment Securities
Domestic Consolidated Companies
Other Investment Securities
Securities for which market prices are available are stated at fairmarket value using the quoted market price as of the last day of
the fiscal year. Valuation differences are directly charged or
credited to shareholders’ equity; the cost of securities is calculated according to the moving average method.
Securities for which market prices are not readily available arestated at cost, as determined by the moving average method.
Foreign Consolidated Companies
Marketable securities owned by foreign consolidated companies
are accounted for under International Financial ReportingStandards or U.S. GAAP.

2. Inventories
Domestic Consolidated Companies
Inventories owned by domestic consolidated companies arestated mainly at cost according to the moving average method(book value written down for inventories with impaired
profitability).
Foreign Consolidated Companies
Inventories owned by foreign consolidated companies are statedmainly under first-in first-out accounting based on the lower-ofcost-or-market method.

3. Depreciation and Amortization
Property, Plant and Equipment (excluding leased assets)
Buildings (excluding attached structures) acquired by domestic
consolidated companies prior to March 31, 1998 are depreciated according to the former declining balance method under

the Corporation Tax Law of Japan (the “Tax Law”). Buildings
acquired between April 1, 1998 and March 31, 2007 are depreciated according to the former straight-line method under the
Tax Law. Buildings acquired on or after April 1, 2007 are depreciated according to the straight-line method under the Tax Law.
Tangible noncurrent assets (other than buildings) acquired bydomestic consolidated companies prior to March 31, 2007 aredepreciated mainly according to the former declining balancemethod under the Tax Law. Tangible noncurrent assets acquiredon or after April 1, 2007 are depreciated mainly according to thedeclining balance method under the Tax Law.
Useful lives and residual values are determined according tostandards prescribed by the Tax Law.
Tangible noncurrent assets acquired by foreign consolidated
companies are depreciated according to the straight-line method.
Changes in accounting policies that are difficult to distinguishfrom changes in accounting estimates.
In line with changes in corporate taxation in Japan, from thefiscal year ended March 31, 2013 the Company and its domestic
consolidated companies have adopted a depreciation method
based on the revised the Tax Law for property, plant and equipment acquired on or after April 1, 2012.
The change is not expected to have a material effect on theoperating income, ordinary income, or net income before income
taxes for the consolidated fiscal year under review.
Intangible Noncurrent Assets (excluding leased assets)
Intangible noncurrent assets acquired by domestic consolidated
companies are amortized according to the straight-line method.
Useful lives and residual values are determined according tostandards prescribed by the Tax Law.

JSP ANNUAL REVIEW 201513

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Software used for internal purposes is amortized according
to the straight-line method over the useful life for Company
purposes (five years).
Foreign consolidated companies amortize intangible noncurrent assets according to the straight-line method.
Leased Assets
Domestic Consolidated Companies
Assets subject to financing lease transactions entered into bydomestic consolidated companies in which asset ownership is
not transferred to the lessee are depreciated according to thestraight-line method. The lease term is considered to be theuseful life of the asset; residual value is assumed to be zero.
Foreign Consolidated Companies
Assets subject to financing lease transactions entered into byforeign consolidated companies are depreciated according toInternational Financial Reporting Standards or U.S. GAAP.

4. Significant Allowances and Provisions
Allowance for Doubtful Accounts
Domestic consolidated companies reserve against losses due touncollectible debt using actual loss ratios for general receivables.
For accounts questionable as to collectability and under claim ofbankruptcy, domestic consolidated companies reserve against
uncollectible amounts according to the likelihood of collectability
in each case.
Foreign consolidated companies reserve against losses due
to uncollectible debt according to management’s considerationof individual accounts.
Provision for Bonuses
The Company and its consolidated companies reserve an estimated amount of future payments for employee bonuses basedon a calculation of the exact amount to be payable for thecurrent consolidated fiscal year.
Provision for Loss on Business Liquidation
Certain of the domestic consolidated companies has recorded a
provision for estimated losses in connection with the liquidationof a Company business.
Provision for Loss on Disaster
The Company and certain of its domestic consolidated companies have recorded an estimated amount of expected costs likely
to be incurred during the next fiscal year, in removing and/or restoration expenses for assets damaged in the Great East Japan
Earthquake of March 11, 2011.

14

JSP ANNUAL REVIEW 2015

Provision for Employees’ Retirement Benefits
Domestic consolidated companies reserve an estimated amountfor employee retirement benefits based on the benefit formulabasis and related pension assets for the current consolidated
fiscal year.
Prior service cost is charged to expense as it occurs according to the straight-line method based on a certain number ofyears (generally 14 years) representing the average remaining
years of employment.
Any actuarial differences are charged to the expense
accounts of the following consolidated fiscal year according to
the straight-line method based on a certain number of years(generally 14 years) representing the average remaining years of
employment.
Certain consolidated companies apply the simplified method
for calculating net retirement benefit liability and retirement benefit cost.
Foreign consolidated companies record reserves for
employee retirement benefits according to International Financial
Reporting Standards or U.S. GAAP.
Provision for Directors’ Retirement Benefits
The Company and certain of its domestic consolidated
companies reserve an amount for director retirement benefits
based on corporate bylaws. The amount reserved is equivalent
to the amount payable as of the end of the current consolidated
fiscal year.
Provision for Corporate Officers’ Retirement Benefits
The Company reserves an amount for executive officer retirement benefits based on corporate bylaws. The amount reserved
is equivalent to the amount payable as of the end of the current
consolidated fiscal year.

5. Foreign Currency Translation
Domestic consolidated companies translate rights andobligations denominated in foreign currencies into Japanese yen
according to the spot rate as of the last day of the consolidated
fiscal period. Translation differences are recorded as income or
expense. Assets and liabilities of foreign consolidated companies
are translated into Japanese yen according to the spot rate as ofthe last day of the fiscal period of the subsidiary in question.
Income and expense accounts are translated into Japanese yen
according to the average rate during the period, and translationdifferences are included in the foreign currency translation
adjustment and minority interests of the net assets section of theconsolidated balance sheet.

6. Major Hedge Accounts
Hedge Accounting
Accounting for hedges using the deferred treatment method.
However, special treatment is applied for interest rate swaps
meeting certain special conditions.

7. Amortization of Goodwill and
Negative Goodwill
Goodwill is amortized over periods in which said goodwill is considered to provide benefits, within ten years, under the straightline method. Negative goodwill occurring prior to March 31,
2010 is amortized over five years under the straight-line method.

Hedge Methods and Transactions
Hedge method: Interest rate swap transaction
Hedge transactions: Interest rates on borrowings

8. Scope of Cash included in theConsolidated Statement of Cash Flows

Hedge Policy
Company policy is not to enter into speculative transactions.
Derivatives are used to reduce the risk of interest rate fluctuations on debt, according to Company management rules.

“Cash” stated in the consolidated statement of cash flows
includes cash on hand, demand deposits, and other short-term
investments that are highly liquid, easily convertible to cash,
redeemable within three months of acquisition, and not subject
to material risk of fluctuation in value.

Evaluation of Hedge Effectiveness
Effectiveness is assessed by confirming whether there is a highcorrelation among the rate fluctuation of the hedged transaction,
cash flows, and the hedge method in question.

9. Accounting for Consumption Taxes
Accounting for consumption taxes using the tax-exclusion
method.

3. SECURITIESSecurities as of March 31, 2015.
Millions of yen

2015Classification

Cost

Book Value

Difference

Stock

¥579

¥   947¥367

Subtotal

579

947

367

Stock

119

110

(8)

Subtotal

119

110

(8)

Total

¥698

¥1,057¥358

Securities with value on consolidated balance sheet greater than acquisition cost

Securities with value on consolidated balance sheet not exceeding acquisition cost

Notes: 1. The market value for unlisted stocks, ¥824 million, on the consolidated balance sheets is extremely difficult to discern. Accordingly, such is not included in the table above.
2. “Cost” in the table above reflects book value after recording impairment losses.

4. LONG-TERM LOANS PAYABLE
Amounts payable for fiscal years ending March 31.
Millions of yen

Long-term loans payable

2015

2016

2017

2018

2019

¥5,578¥4,442¥3,325¥2,291¥929

JSP ANNUAL REVIEW 201515

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. TAX-EFFECT ACCOUNTING

2. Defined Benefit Plan
Millions of yen

2015

Deferred tax assets
Provision for bonuses
Allowance for doubtful accounts
Depreciation
Accrued enterprise taxes and accrued business office taxes
Net defined benefit liability
Provision for directors’ retirement benefits
Provision for corporate officers’ retirement benefits
Loss on valuation of stocks of affiliates
Loss on valuation of investment securities
Loss on valuation of golf club memberships
Loss carryforward
Valuation differences on assets received in merger
Other
Subtotal
Less: valuation allowances
Total deferred tax assets¥  295
82
18
15
194
35
5
52
31
21
482
5
465
1,707
(391)
¥1,316

Deferred tax liabilities
PPE, Insufficient accelerated depreciation
Unrealized gains (losses) on marketable securities, net
Valuation differences on assets received in merger
Other
Total deferred tax liabilities¥  73892
86455¥1,373Net deferred tax assets¥  (56)%2015

Reconciliation of difference between statutory tax rate andeffective income tax rate
Normal effective statutory tax rate
(Adjustments)
Entertainment and other non-deductible expenses
Dividends and other non-taxable income
Per-capita taxation
Special deduction for R&D
Gain in equity in affiliates
Difference in tax rate on income of consolidated subsidiaries
Income taxes for prior periods
Valuation allowances
Other
Actual effective income tax rate(1) Changes to balance of retirement benefit obligation at beginning and end of term
Millions of yen

Retirement benefit obligation at beginning of term
Cumulative effects of changes in accounting policies
Restated balance, beginning of period
Increase from newly consolidated subsidiary
Service costs
Interest expense
Actuarial differences
Retirement benefits paid
Other
Retirement benefit obligation at end of term

¥8,478
(741)
7,736
—
467
87
63
(373)
37
¥8,019(2) Changes to balance of pension assets at beginning and end of term
Millions of yen

Pension assets at beginning of term
Increase from newly consolidated subsidiary
Anticipated profits
Actuarial differences
Employer contributions
Retirement benefits paid
Other
Pension assets at end of term

¥6,903
—
83
1,100
422
(373)
29
¥8,166(3) Changes to balance of net defined benefit liability at beginning and end of term
due to application of the simplified accounting method
Millions of yen

35.7
1.9
(1.2)
0.6
(0.8)
(9.5)
0.3
0.5
0.7
(0.7)
27.5

Net defined benefit liability at beginning of term
Retirement benefits expense
Retirement benefits paid
Contributions to system
Net defined benefit liability at end of term

¥332
43
(11)
—
¥364

(4) Changes to balance of retirement benefit obligation and pension assets at end of term andnet defined benefit liability and assets as recorded on the consolidated balance sheet
Millions of yen

Funded system retirement benefit obligation
Pension assets¥ 8,019(8,166)(147)

6. EMPLOYEE RETIREMENT BENEFITS
1. Overview of Retirement Plan
Domestic consolidated companies have adopted a defined benefit plan for employees. At the time of retirement, employees may be
given severance pay in some circumstances.
Certain foreign consolidated companies have adopted a defined contribution plan for employee retirement benefits.

16

JSP ANNUAL REVIEW 2015

Non-funded system retirement benefit obligation
Net liabilities and assets as recorded on the consolidated balance sheet
Net defined benefit liability
Net defined benefit assets
Net liabilities and assets as recorded on the consolidated balance sheet

364
217
217
—
¥   217

Note: Includes application of simplified accounting method

JSP ANNUAL REVIEW 201517

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(5) Retirement benefit expenses and breakdown of amounts
Millions of yen

Service costs
Interest expense
Anticipated profits
Appropriated expenses for actuarial differences
Appropriated expenses for past service costs
Retirement benefit expenses using the simplified method
Retirement benefit expenses related to the defined benefit system

¥467
87
(83)
119
24
43
¥659

Required contributions to the JSP and consolidated subsidiaries defined contribution plans were ¥193 million.
(Stock and option)
Nothing is applicable.

7. SEGMENT INFORMATION
1. Reporting Segments(6) Adjustments for retirement benefit
Millions of yen

Past service costs
Actuarial differencesTotal¥   24
1,167¥1,192(7) Remeasurements of defined benefit plans
Breakdown of items recorded under changes related to remeasurements of defined benefit plans (Before deduction of taxes)
Millions of yen

Unrecognized past service costs
Unrecognized actuarial differences
Total

3. Defined Contribution System¥ (39)
456¥417

Reporting segments are those segments comprising theCompany group for which separate financial information can beobtained. The Company’s board of directors periodically reviews
these segments to determine the allocation of Company
resources and to assess performance.
The Company has adopted a business division structure.
Each business division is responsible for comprehensive strategy
related to domestic and international products handled therein,
as well as for their business activities.

Accordingly, the business divisions are comprised of the basic
products making up that segment, and have been classified into
the Extrusion Business and Bead Business reporting segments.
Extrusion foaming technology is the core of the Extrusion
Business, which manufactures and sells polystyrene, polyethylene, and polypropylene sheets and boards. Bead foaming
technology is the basis of the Bead Business, which manufactures and sells foamed polypropylene, foamed polyethylene,
and foamed polystyrene products, etc.

2. Calculation of Net Sales, Profit or Loss, Assets, and Other Items for Reporting Segments
The Company follows the provisions of “Summary of Significant Accounting Policies” in accounting for reporting business segments.
Intersegment sales are based on transaction prices with third parties.

(8) Items related to pension assets
1. Breakdown of main items
Allocation of main pension asset items comprising the total is as follows:%

EquityBonds
General accounts
Cash and deposit
Other
Total

59
28
6
4
3
100

2. Method for determining the expected long-term investment return
	In determining the expected long-term investment return, conservative estimates are made of the assumed interest rate for the
corporate pension, the current and expected distributions of pension assets, and the current and expected long-term return ratefrom the various assets that compose the pension assets.

3. Sales and Income (Loss) by Reporting Segment
Millions of yen

Reporting Segments
Year ended March 31, 2014

Extrusion

Bead

Subtotal

Other(Note 1)

Sales
External customers
Intersegment sales/transfers
Total sales
Segment income (loss)¥39,614822¥40,436¥ 1,926¥67,034
372¥67,406¥ 4,545¥106,648
1,194¥107,842¥  6,471¥5,479232¥5,712¥  (32)

Total

Adjustment(Note 2)

Consolidated(Note 3)¥112,128
1,426¥113,555¥  6,439—¥(1,426)¥(1,426)¥  (530)¥112,128—¥112,128¥  5,909

Notes: 1. “Other” represents a classification for a business segment not included in reporting segments. This segment includes the manufacture and sale of general packaging products.
2. The ¥530 million of adjustment under segment loss consists of ¥532 million in companywide expenses not allocated to each reporting segment and ¥2 million in intersegment eliminations. The majority of these expenses are costs for research and development not attributable to either reporting segment.
3. Segment income is reconciled with operating income on the consolidated statements of income.

Millions of yen

Reporting Segments(9) Items related to actuarial calculations
		 Main components used in actuarial calculations (weighted average)%

Discount rate
Expected long-term investment return rate 1.0%

Primarily 1.163
Primarily 1.163

Year ended March 31, 2015

Extrusion

Bead

Subtotal

Other(Note 1)

Total

Adjustment(Note 2)

Consolidated(Note 3)

Sales
External customers
Intersegment sales/transfers
Total sales
Segment income (loss)¥39,915842¥40,757¥ 1,348¥70,340
368¥70,709¥ 4,854¥110,255
1,210¥111,466¥  6,203¥6,667220¥6,888¥   59¥116,923
1,431¥118,354¥  6,262—¥(1,431)¥(1,431)¥  (595)¥116,923—¥116,923¥  5,667

Notes: 1. “Other” represents a classification for a business segment not included in reporting segments. This segment includes the manufacture and sale of general packaging products.
2. The ¥595 million of adjustment under segment loss consists of ¥596 million in companywide expenses not allocated to each reporting segment and ¥1 million in intersegment eliminations. The majority of these expenses are costs for research and development not attributable to either reporting segment.
3. Segment income is reconciled with operating income on the consolidated statements of income.

18

JSP ANNUAL REVIEW 2015

JSP ANNUAL REVIEW 2015

19

GLOBAL NETWORKCORPORATE DATA

(As of March 31, 2015)(As of March 31, 2015)

JSP CORPORATIONEUROPE

JAPAN

NORTH
AMERICAASIASOUTHAMERICA

Head Office

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

President, Representative Director

Kozo Tsukamoto

FoundedJanuary 1962

Paid-In Capital¥10,128.610 million

Number of Shareholders

12,906

Stock Exchange Listing

Tokyo (First Section: 7942)

Fiscal Year-End

March 31

Investor Relations
Contact

Public and Investor Relations Department
Tel: +81-3-6212-6302

URL

www.jsp.com

EUROPEFranceGermany
Czech Republic

ASIA
China (Wuxi)
China (Kunshan)
China (Dongguan)
China (Chongqing)
China (Wuhan)South Korea
TaiwanSingapore
India
ThailandNORTH
AMERICAUSA (Detroit)
USA (Butler)
USA (Tullahoma)
USA (Jackson)
MexicoSOUTH
AMERICA
Brazil (Santo Antonio De Posse)
Brazil (Campinas)

20

JSP ANNUAL REVIEW 2015

JAPANTokyo Head Office
Hokkaido
KanumaKashima
Yokkaichi
KansaiKyushuKitakyushu

MAJOR SHAREHOLDERS
Shareholders

Shares held (thousands)

Voting right ratio (%)

Mitsubishi Gas Chemical Company, Inc.

16,02051.00

Japan Trustee Services Bank, Ltd.

1,897

6.04

JSP Corporation

1,600

5.09

JSP Client Stock Ownership Plan

1,044

3.32

CMBL S.A. RE MUTUAL FUND

704

2.24

JP MORGAN CHASE BANK 385166

539

1.71

STATE STREET BANK AND TRUSTCOMPANY 505223

512

1.63

The Master Trust Bank of Japan, Ltd.

512

1.63

CBNY-GOVERNMENT OF NORWAY

421

1.34

JSP Employee Stock Ownership Plan

349

1.11

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JSP protects the things andthe people that are
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to you.

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