Environmentally
responsible

GlobalnetworkDevelopment
capability

JSP’s
Strengths
Material anddesign proposal
capability
Supplycapability

Automotive

JSP technologies offer a wide range of performance benefits to automobile manufacturers, from enhancing collisionsafety performance to reducing vehicle weight and improving
fuel efficiency. JSP supplies leading automakers with automotive components that take full advantage of the uniquecapabilities of high-performance plastics, highlighted by ourrevolutionary lightweight and shock-absorbent ARPRO ® (Expanded Poly Propylene) material.

Construction

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

Civil engineering

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

Packaging

JSP develops and provides packaging solutions for safe
transport of items ranging from household electronics toprecision equipment and ceramics. Our MIRANET® seriesof low-density expanded polyethylene products provides
exceptional cost and performance advantages from its combination of extreme versatility, high durability, and reusability.
These attributes have made MIRANET® a leading packaging
material in the distribution field, particularly for use as longlasting and reliable cushioning for items requiring extended
shipping and storage periods.

Financial Highlights

Contents

JSP Corporation and Consolidated Subsidiaries—Years ended March 31

2

Financial Highlights

3

Message from the President

5

Review of Operations

7

Spotlight

1

JSP Annual Review 2017

2017

2016

2015

2014

2013

2017

9

Corporate GovernanceFor the Year:

11

Consolidated Balance Sheets

	Net sales¥109,048¥114,904¥116,923¥112,128¥96,038$971,993

13

Consolidated Statements of Income

Operating income

9,612

9,278

5,667

5,909

4,575

85,67614

Consolidated Statements of Changes in Net Assets

Ordinary income

10,033

9,101

6,044

6,509

4,927

89,42815

Consolidated Statements of Cash Flows

	Income before income taxes

10,013

8,752

6,000

6,536

4,752

89,25016

Notes to Consolidated Financial Statements

	Net income attributable to owners of the parent

7,301

5,914

4,039

4,404

3,324

65,07723

Global Network

24

Corporate Data

At Year-End:Total assets

113,151

115,136

116,717

108,420

95,565

1,008,565

Total net assets

76,77872,49770,35262,37553,431

684,356

Shareholders’ equity

72,532

67,89065,30757,85349,838646,510Global supplierof foamed plastic

JSP is a leader of the foamed plastic industry and has been
pioneering foamed plastic materials and products since its
founding in 1962.
We develop products that take full advantage of the potentialof plastic and for virtually every field of industry, where they
contribute to developing industry and enriching people’s
lives around the world.
We have cultivated our business activities in line 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 throughfoamed plastics 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.

Per Share Information:¥  244.94¥ 198.40¥ 135.50¥ 147.73¥ 111.49$ 2.18Cash dividends

50.00

40.00

30.00

30.00

30.00

0.45

Total net assets

2,433.10

2,277.32

2,190.61

1,940.48

1,671.55

21.69

	Net income2

Notes: 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥112.19=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

Operating income /Net income attributable toowners of the parent(Billions of yen)

112

116

114

96

109

Copyright 2017, JSP Corporation. All rights reserved.

Operating income
Net income attributable toowners of the parent

5.9
4.5

2013

2014

2015

Operating
IncomeForward-Looking Statements

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

Net sales

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 ofwriting. As such, these statements are subject to risks and uncertainties.
Please understand that actual performance may differ from these forwardlooking statements.

U.S. dollars1

Yen

2016

2017

Net Income
attributable toowners of the parent

3.3

2013

4.4

2014

5.6

9.2

9.6
7.3

95

108

116

115

113

2015

2016

2017

5.9

4.0

2015

2016

2017

2013

2014

–5.1%

Net sales declined 5.1% year on year. Sales volume expanded on efforts to generate new demand
and to develop and market high value-added products along with concentrated investment ingrowth fields and regions boosted sales volume, but the net sales result declined primarily due toprice revisions for core products and a weaker foreign exchange rate from the strong yen.

+3.6%

Operating income rose 3.6% year on year, building on the record level of the previous fiscal
year to reach another record high. In Japan, sales were strong for high-value-added products
and the margin spread of raw material costs and sales prices recovered. Operations overseas
also posted strong sales of high-value-added products while raw material prices remained low.
The strong sales in Japan and globally overcame the foreign exchange impact as the company
reached new heights in operating income.

Food packaging

JSP food packaging materials play an integral role in foodsafety. 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 and convenience to meet the evolving lifestyle needs and food preferences.

Thousands of
U.S. dollars1

Millions of yen+23.5%Net income attributable to owners of the parent company rose 23.5% year on year. Net income
attributable to owners of parent benefitted substantially from the markedly lower non-operating
expenses versus the previous fiscal year as it recorded a foreign exchange gain rather thanloss and without the restructuring charges that were the majority of extraordinary losses in theprevious year.

JSP Annual Review 20172

Message from the President

Second straight yearof record-high profits
as we establish JSP as a high-profit company

Yukio Sakai

Medium-Term Management Plan  (FY2015–2017)

President, Representative Director“Deepen & Grow 2017”
Basic Policy

Numerical Targets for Fiscal Year 2017

Promoting the Differentiation Strategy
Promoting the Growth Strategy
Deepen = Dig deep into our current businesses
Extendour uniqueadvantages

N et sales¥135,000 million
including ¥10,000 million from new products

O perating
M argin
ReferenceRawmaterials

Technologies

Markets

ROE

Approx.

Equity ratio

Approx.

6.5 % or more
8%59 %Grow = Sustaining growth

Looking back on my first year as Company President
Corporate Philosophy

Creatively and Actively
Contribute to Society

1. Ensuring safe and stable manufacturing operations
2. Deepening understanding of our corporate principles
3. Creating open and comfortable worksites
4. Formulating strategies that galvanize employees

Management Policy

	The reason I made ensuring safe and stablemanufacturing operations my first directive is because
in the manufacturing industry safety is always the firstand foremost priority. Safe operating activities are thefoundation of our corporate activities and ensuring thesafe conditions for our employees and stakeholders is our
corporate duty to society. At every opportunity over the past
year, I have stressed that safety is our overriding priority

Growth-oriented

3

When I was appointed President in June of last year, I
outlined four themes that would guide my administration.

JSP Annual Review 2017

not just at our manufacturing plants but at our headquarters
and all our business sites as well as for each and every oneof our employees from the staff to directors. Moreover, thesafety activities are a means to achieving our greater goalsof zero accidents in our activities and stable supply to ourcustomers.
My second key theme of deepening understanding of
our corporate principles corresponds precisely to the JSP
corporate philosophy to creatively and actively contributeto society. We are not selling products to make a profit; weare earning profit because customers value JSP products.
This means we approach our business not as the makerof products but from the point of view of the customer, theactual users of our products. In my view, we are doing justthat and we are doing it successfully. Nevertheless, I know
we can still benefit greatly from developing that awarenesseven deeper.
	Communication is essential to realizing the third
theme of creating open and comfortable worksites. I havevisited every JSP plant and worksite and attended all of the
Quality Control Report meetings in the past year to ensure
I have a first-hand understanding of our worksites. It has
been inspiring to see the full capabilities of JSP production
strength, and I have renewed conviction that we can dowonderful things when we bring our strengths together. I
will continue to encourage open communication and plan
to do even more to create work environments that make iteasy and natural for all employees to share opinions andideas to make our operations better.
Our fourth theme of formulating strategies thatgalvanize employees will soon be realized when we
unveil the next medium-term business plan to move JSP
decisively closer to our ideal.

Record profits in fiscal year 2016
Aiming to further establish JSP as a high-profit
company in fiscal year 2017
We had a record year for profits in fiscal year 2016. Despite
net sales slipping 5.1% year on year to ¥109,048 million, we
built on the record profit levels of the previous fiscal year
to post new highs in each profit category with growth inoperating income of 3.6% to ¥9,612 million, ordinary incomeof 10.2% to ¥10,033 million, and net income attributable toowners of the parent of 23.5% to ¥7,301 million. The main
driver for profits was the strong sales of our high-valueadded products along, which were further supported by
improving profit margins from lower raw material costs.
	Fiscal year 2017 is the final year of the current
medium-term management plan. Although we continue toface considerable challenges from the fluctuations in raw
material prices and foreign exchange rates since the plan
was launched, we remain unwavering in our fundamental

commitment to become an organization with a highly
profitable business structure.
	We focus our operations in Japan on marketingproducts differentiated by our proprietary technologies,
including thermal resistant food containers, highly thermal
insulating materials for building and home construction,
cushioning packing material for shipping LCD-TV panels,
and seat core materials for automobiles.
	In our global businesses, we expect sustaining rapid
sales growth supported by continued progress broadening
the applications for our seat core materials and otherautomobile components in Europe and the United States.
We also see sales increasing in China from the growing
market for automobiles and rising demand for lighter
vehicles. We expect our overall sales volume to continue
expanding, but anticipate profits to decline moderately fromthe previous fiscal year due to higher raw material costs.

Looking ahead to JSP in 10 years
We plan to introduce the next medium-term business planin the second half of 2017. Our reference point for framing
the plan’s strategies will be our vision for the company wewant JSP to be 10 years from now. When that image iscrystal clear, we will frame specific strategies to make thevision a reality.
Even before we start, we are certain of two things.
First, we will continue building one of our core strengths—
the trust we have earned with our customers—and make
JSP the first company customers turn to for solutions.
Second, we will create and develop a second core productto complement our established success with ARPRO ®.
	We will also continue reinforcing the sustainabilityof our business. We are constantly working to ensure aneffectively functioning and proactive corporate governanceto continue boosting corporate value, maintaining comprehensive environmental and safety management, fortifying
internal controls for full risk and compliance management,
and creating a stronger corporate structure to cultivate ourhuman resources.
All of us at JSP are grateful for the ongoing support of ourshareholders and stakeholders. We look forward to yourcontinued support and guidance as we endeavor to make
JSP the best company we can be.

Yukio Sakai

President, Representative Director

JSP Annual Review 20174

Review of Operations

Bead
Business
Bead Business sales volume
expanded healthily. Sales andincome results ultimately declined
from the product price revisions
and decreased overseas
business revenue due to theweaker foreign exchange ratefrom the strong yen.

Sales by region

Sales by productNorth America

Asia

North America sales volume grew
on increased demand for our automotive components and increased
sales in new fields. Sales declined,
however, due to the price revisions
and strong yen.

Asia sales volume grew on increased demand from the automotive industry, particularly in China,
Southeast Asia, and India. Sales
declined, however, due to the pricerevisions and strong yen.

MIRAMAT®

MIR AMAT ® is our expanded polyethylene sheet used
as an industrial packaging material for shipping LCDTV panel and consumer electronics. MIRAMAT ® sales
increased on solid sales of high-value-added products.

CAPLON™

Extrusion
Business
Extrusion Business profits
increased despite the impact
on sales from price revisions
as the company boosted salesof high-value-added products
and enhanced profitability by
cutting manufacturing costs andimproving margin spreads.

Decreased demand led to lower sales of our CAPLON™
air-bubble polyethylene cushioning material.

Percentage
of total sales

59.9
Sales
70,865

2016

Operatingincome7,436

Percentage
of total sales

%

7.8%

65,354¥ million

South America sales declined asdeteriorating business conditionsin Brazil led to a drop in automobile
production unit volume and thestrong yen.

EuropeEurope sales volume grew substantially on increased demand forour automotive components andother factors. The sales result was
ultimately down owing to the pricerevisions and strong yen.

ARPRO®

STYRODIA®

0.8%¥ million

Sales volume for our expandable polystyrene STYRODIA ®
beads increased in the home appliance and functional
products sectors while remaining flat in the construction
materials and civil engineering sectors. Sales declined,
however, from reduced product prices and weaker demandin the fisheries and agricultural sectors due to unseasonable weather.

FOAMCORE™
2016

5

2017

JSP Annual Review 2017

STYRENE PAPER™
Sales declined for our STYRENE PAPER™ expanded
polystyrene sheet as the impacts from lower sales forfood tray applications and reduced prices more than offset solid sales for microwaveable containers and instantnoodle bowls.

Sales by product
Our expanded polypropylene ARPRO ® products are used
for automotive applications, including bumper cores,
interiors, and seat cores, and as material used in homeconstruction and for packaging for electronic products,
cushioning for household electric appliances, and groundsurface cushioning for sports facilities. ARPRO ® productsales grew on new products offering expanded applications in automobiles and targeting new fields.

2017

7,376

South America

Sales declined for our hybrid molded FOAMCORE™ products, which are mainly used as a ceiling material for prefabricated bathroom units.

34.8

0.9%

Sales
MIRABOARD™

%

38,28937,9292016

2017

Sales of our MIRABOARD™ expanded polystyrene board
used for advertising displays and collapsible boxes declined amid weak demand.

¥ million

MIRAFOAM™
O ve r a l l s a l e s r o s e f o r o u r ex p a n d e d p o l y st y r e n e
MIR AFOAM™ extruded board products for construction
and civil engineering applications. Sales were strong in
the construction sector for pre-cut products and thermal
insulation and grew in the civil engineering sector on demand related to reconstruction the Tohoku region.

Operatingincome

10.5%

2,755

3,045

2016

2017

¥ million

JSP Annual Review 20176

Spotlight

ARPRO®

Increasing applications
for automobiles
Widerange ofapplications

Plant
Asia

Increasing annual production
capacity in China to

24,000 tons

JSP created ARPRO®, the world’s first uncrosslinked expanded foam
polypropylene material, offering six properties that enhance automobile
performance: lightweight, energy absorption, thermal insulation, chemicallyinert, recyclable, and acoustic absorption. Automakers worldwide seeking to
produce lighter weight vehicles to meet tighter fuel efficiency and environmental
regulations are increasingly using ARPRO® throughout their vehicles. Originallyused as a bumper core material, ARPRO® is now in demand for applications
ranging from car interior materials to rear seat cores.

Sun visor

Wuxi Plant

Chongqing Plant
India Plant

Door pad

Front duct

Medium-term plan

Rear bumper

Rear seat
Floor spacer
Tibia pad

Yokkaichi No. 2 Plant
Taiwan Plant
Dongguan Plant
Thailand Plant
Operations started in March 2016

ARPRO® products have been chiefly used by automakers in North
America and Europe, but an increasing number of Japanese automakers
are using ARPRO® in rear seat cores. JSP is responding to the growing
domestic demand by constructing a new Yokkaichi No. 2 Plant in Mie
Prefecture. Construction is scheduled for completion in December 2018.
In Japan, ARPRO® is marketed under the brand name P-BLOCK®.

China

The Wuhan Plant commenced production of ARPRO® in May 2017 tomeet the growing demand accompanying the ongoing brisk automobile
production in China and fortify the ARPRO® supply structure for thecentral and southwest regions of the country. The Wuhan Plant iscurrently operating at an annual production capacity of 3,000 tons, and
JSP plans to double annual output in the near future.

Molding plant
constructed at
Yokkaichi to meetgrowing demand

EuropeRaising production
capacity by

40%

ARPRO®  sales volume

150

Japan

Wuhan Plant operations
started, JSP’s fifth
plant in China

Floor duct

ARPRO® is used by virtually every automaker aroundthe world for its high quality and JSP’s detailed technicalsupport and services specifically catered to individual
client needs. Demand for ARPRO® has expanded
even faster than the rapid 60% growth in automobile
production in the past 15 years.

200

South Korea Plants

Singapore Plant

Toolbox

Front bumper

Changchun Plant

Operations started in
December 2016

Wuhan Plant

Operations started in April 2017

Headrest

Growing
sales
volumeJSP is expanding production capacity at all of its plants to keep pacewith the rapidly growing demand.

France Plant
Czech Plant

Expansion under construction

2002 = 100

Automobile production volume
100
2002

7

2003

JSP Annual Review 2017

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

JSP Annual Review 20178

Corporate Governance
As of June 29, 2017

Basic Policy on Corporate Governance
JSP places top priority on realizing sustained businessgrowth and enhancing corporate value following ourcorporate philosophy to “creatively and actively contributeto society” and with the objective of fulfilling our promise
to be an internationally competitive company that emphasizes safety and environmental awareness. We aim forthe management of our Company to earn the trust of andfulfill the expectations of all stakeholders. We believe that
effectively functioning corporate governance and constanteffort to maintain and improve management efficiency,transparency, and soundness are essential to fulfilling thisobjective.
Basic Policy
1.	The Company has adopted the Company with a Boardof Company Auditors framework in which the Board of
Directors makes decisions on important issues for theCompany and seeks to provide an environment enabling
management to make sound decisions to carry out thedecisions of the Board of Directors.
2.	The Company respects the rights and viewpoints of all
stakeholders and seeks to maintain appropriate andcooperative relations.

Corporate Governance Structure Diagram

Appointment/Dismissal

Appointment/Dismissal
ReportBoard of Directors
12 Directors(2 Outside Directors)

Audit

Selection and RemovalSupervision

Board of Auditors
4 Auditors(2 Outside Auditors)

Cooperation

Accounting
Auditor
Audit

Audit

Management
Committee

Cooperation
ReportDirectors Meeting

As stipulated in the Articles of Incorporation, the Company
maintains a Board of Directors and Board of Auditors
comprising up to 16 directors and up to four auditors.
	As of June 29, 2017, the Company maintains astructure of 12 directors and four auditors. The Board of
Directors meets, in principle, on a monthly basis to deliberate and make decisions on items as stipulated by law
and internal company regulations and on items importantto the management of the Company and to supervise
the execution of business activities. The Management
Meetings serve as a supplementary function to the Board

Guidance andSupervision

Organizational structure
Company with auditors
Directors
	Number of Directors stipulated in the Articles of Incorporation: 16
Term of office stipulated in the Articles of Incorporation: 1 year
Chair of the Board of Directors: President
	Number of Outside Directors: 2

ReportInternal Control
Department
Audit Office
Audit

1. Status of Business Execution

	Number of Directors: 12

Representative Director
Directives andSupervisionCorporate Governance Structure

Outline of the Corporate Governance Structure

General Meeting of Shareholders
Appointment/Dismissal

3.	The Company provides appropriate information
disclosure and seeks to ensure transparency for all
stakeholders.
4.	As a Company with a Board of Company Auditors, theCompany appoints independent outside directors andauditors to monitor the Company’s management activities and ensure sound management practices.
5.	The Company engages in constructive dialogue withshareholders.

ReportRisk
Compliance
Committee

Auditors
	Number of Auditors stipulated in the Articles of Incorporation: 4
	Number of Auditors: 4
	Number of Outside Auditors: 2
Number of Independent Executive Officers

Business
Divisions

4

Administrative
Divisions
ReportCooperation

Group Companies

9

JSP Annual Review 2017

		Outside Directors: 2

		Outside Auditors: 2

of Directors. The meetings, attended by representative
directors, managing executives, and personnel in higher
positions, are held to conduct preliminary discussions onimportant management issues. The Company additionallyuses an executive director structure as a system forexecuting business operations and seeks to enhance theefficiency of business execution by delegating executive
power and accountability.
Evaluation of the Effectiveness of the Board of Directors
The Company issues questionnaires to directors on anannual basis and uses the questionnaires as a basis forassessing the effectiveness of the Board of Directors.
The Board of Directors analyzes and evaluates the resultsof the questionnaires and incorporates the views of the
independent outside directors and outside auditors.
	In fiscal year 2016, the questionnaire was distributed
to the individual that served as directors and auditors in
the previous fiscal year. The results of the questionnaires
provided a basis for improving a portion of the duties
conduced by the Board of Directors.
2. Status of Audits(1) Audits by auditors
The Board of Auditors comprises four auditors, including
two outside auditors. The four auditors carry out auditsof the Company’s business operations informed by the
input from the highly independent outside auditors. All of
the auditors are highly knowledgeable about financial andaccounting operations and have abundant experience invarious aspects of the accounting process, including as
auditors in the chemicals industry.
	The auditors and outside auditors attend meetings ofthe Board of Directors and important company meetingsand 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 thefinancial standing of the companies in the JSP Group.
The auditors also regularly and when deemed necessary
solicit the advice of accounting auditors regarding specificaccounting issues.
(2) Internal audits
The Audit Office of the Internal Auditing Division comprises
five auditors conducting regular audits of the Company andgroup companies and seeks to enhance the effectivenessof internal controls. In addition to the functions of the Audit
Office, the company assigns a Process Owner to eachbusiness division to strengthen the monitoring of eachbusiness process.
	The Audit Office also conducts internal audits in linewith the internal audit plan for each year and reports theresults to each auditor with the aim of facilitating dialogue
and further strengthening mutual collaboration.
(3) Auditing of accounts
In accordance with the Financial Instruments andExchange Act and the Companies Act, the Company has
contracted with Deloitte Touche Tohmatsu LLC to perform
accounting audits. The Company does not have an interestin the auditing corporation or the executive members of theauditing organization.

Director and Auditor Remuneration
Remuneration for Directors (excluding non-executive
directors) is configured as base compensation and reservetype remuneration to be paid upon retirement, a portion ofwhich (as stock based compensation) is deposited in the
Company’s executive shareholder association. Remuneration for non-executive directors and auditors is configured
as base compensation and fixed compensation. The
aggregate amount of remuneration is set within the limit
determined by a resolution passed at the General Meetingof Shareholders.
	The Company President, as authorized by the Boardof Directors, sets the amount of remuneration for eachdirector based on the recommendations of the Remuneration Advisory Board and in consideration of the businessenvironment, operating conditions, Company earnings,
the Company’s financial status, and the contribution to beprovided by each individual. Remuneration for auditors
is set based on negotiations and in consideration of thecontribution to be provided by each individual.

Director and Auditor Remuneration Totals for Fiscal Year 2016
NumberTotal Remuneration

Director

13322

Of which Outside Director

2

14

Auditor

6

41

Of which Outside Auditor

3

22

Total

19

363

Position(Millions of yen)

1. The above table includes one Director and two Auditors (including one Outside
Auditor) appointed at the close of the Ordinary General Meeting of Shareholders
convened on June 29, 2016.
2. At the close of the Ordinary General Meeting of Shareholders convened on June29, 2016, the Company abolished the system of providing a bonus to retiring
directors and adopted the reserve-type remuneration to be paid upon retirement.
The amount of the remuneration and other payments include the provision ofallowance for director bonuses maintained prior to the abolishment of the systemproviding a bonus to retiring directors and the current account maintained for the
reserve-type remuneration to be paid upon retirement.
3. Remuneration amounts and other payments to individual executives are omitted
because no individual was paid a total amount exceeding 100 million yen.

JSP Annual Review 201710

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

Thousands of
U.S. dollars (Note1)

Millions of yen

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
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
		 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

2017

2016

2017

¥   13,436
29,785
2,765
139
6,310
779
4,398
603
825
1,374
(209)
60,208¥ 16,003
30,046
2,909
121
6,534
891
4,044
566
820
1,032
(298)
62,672$   119,761
265,487
24,645
1,238
56,243
6,943
39,201
5,374
7,353
12,247(1,862)536,661

37,446(21,880)(15)
15,55074,303(58,870)(142)
15,28914,451
29
(15)
14
2,406
10,122(8,826)
1,295
49,008977

37,333(21,434)(13)
15,88673,864(58,393)(151)
15,31914,476
92
(62)
30
1,630
9,866
(8,796)
1,069
48,413934

333,773(195,026)(133)
138,604
662,296(524,734)(1,265)
136,277
128,808
258
(133)
124
21,44590,221(78,670)
11,542436,830
8,708

1,650
47
341
1,471
(554)
2,957
52,943

1,833
39
257
1,336
(350)
3,116
52,464

14,707
418
3,039
13,111(4,938)26,357
471,904¥113,151¥115,136$1,008,565

Thousands of
U.S. dollars (Note1)

Millions of yen

LIABILITIES AND NET ASSETS

2017

2016

2017

Current liabilities
	Notes and accounts payable–trade
	Electronically recorded obligations–operating
Short-term loans payable
Current portion of long-term loans payable	Lease obligations
Asset retirement obligations
Accounts payable–other	Income taxes payable
Accrued consumption taxes
Provision for bonuses
Provision for business structure improvement
	Electronically recorded obligations–facilities
Accounts payable–facilities
Other
Total current liabilities¥   9,298
1,470
5,989
3,861
14
2,688
899
421
1,581
132
38
841
2,429
29,667¥ 8,520
1,509
6,201
4,961
13
8
2,805
1,807
599
1,479
121
76
1,336
2,452
31,894$    82,877
13,10253,382
34,414
124
23,9598,013
3,752
14,092
1,176
338
7,496
21,650264,435

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

4,756
22
151
697
16
10
134
915
6,705
36,373

8,415
7
148
642
185
133
30
549
632
10,744
42,63842,392
196
1,345
6,212
142
89
1,194
8,155
59,764324,208

10,12813,40551,336(1,382)73,488

10,12813,40545,267(1,380)67,42090,275
119,484
457,580(12,318)
655,031239(1,694)
499
(955)
4,245
76,778¥113,151

252
68
148
469
4,607
72,497¥115,136

2,130(15,099)
4,447(8,512)
37,837684,356$1,008,565

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

The accompanying notes are an integral part of these statements.

11

JSP Annual Review 2017

JSP Annual Review 201712

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
Years ended March 31

		
2017

2016

2017

¥109,048¥114,904$971,993

75,182

81,035670,131

33,86533,869301,853

Selling expenses

7,682

7,966

68,473General and administrative expenses

16,57016,624

147,695

Total selling, general and administrative expenses

24,252

24,590216,168

9,612

9,278

85,676

170

245

1,515

Dividends income

26

29

231

Rent income

78

83

695

Foreign exchange gains

41

-

365

	Equity in earnings of affiliates

6

10

53

318

292

2,834

642

661

5,722

111

155

989

Net sales
Cost of sales
Gross profit  
Selling, general and administrative expenses

		 Operating income
Non-operating income
	Interest income

Other
		 Total non-operating income
Non-operating expenses
	Interest expenses
Foreign exchange loss
Other
		 Total non-operating expenses
Ordinary income  

-

493

-

109

190

970

221

839

1,969

10,033

9,101

89,428Extraordinary income
Gain on sales of noncurrent assets

32

14

285

Gain on sales of investment securities

20

-

178

-

301

-

53

315

472

	Loss on retirement of noncurrent assets

69

94

615

	Loss on sales of noncurrent assets

4

8

35

	Impairment loss

-

21

-

-

541

-

73

664

650

10,013

8,752

89,250

Income taxes–current  

2,592

3,176

23,103

Income taxes–deferred

(66)

(456)

(588)

Total income taxes

2,525

2,720

22,506

Net income

7,487

6,031

66,735

Net income attributable to non-controlling interests

185

117

1,648

Net income attributable to owners of the parent¥    7,301¥ 5,914$    65,077

Subsidy income
		 Total extraordinary income
Extraordinary loss

Business structure improvement expenses
		 Total extraordinary losses
		 Income before income taxes

The accompanying notes are an integral part of these statements.

Millions of yen
2017
Shareholders’ equity

Thousands of
U.S. dollars (Note1)

Millions of yen

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

Capital surplus

Retained earnings¥10,128¥13,405¥45,267¥(1,380)

10,12813,40545,267(1,380)(1,341)
7,301¥10,128¥13,405

Total shareholders’equity¥67,420
67,420(1,341)
7,301
(2)
109

(2)

109

Valuation difference
on available-for-salesecurities

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

Treasury stock

Capital stock

6,069¥51,336(2)¥(1,382)

6,067¥73,488

Valuation and translation adjustments
Foreign currency Remeasurementsof defined benefit
translationplans
adjustment

Total valuationand translation
adjustments

Minority
interests

68

¥148

¥ 469

¥4,607

68

148

469

4,607

¥72,497
72,497(361)(361)¥4,245(1,341)
7,301
(2)
109
(1,786)
4,280¥76,778

¥

¥252
252

350
350
¥499

(1,763)(1,763)¥(1,694)

(13)
(13)
¥239

(1,425)(1,425)¥(955)Net assets

Thousands of U.S. dollars (Note1)
2017
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 attributable to owners of the parent
Purchase of treasury stock
Change of scope of consolidation
	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$90,275$119,484$403,485$(12,300)

90,275

119,484

403,485(12,300)(11,952)
65,077

Valuation difference
on available-for-salesecurities

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

(17)

971
$119,484$90,275$2,246
2,246

(115)
(115)
$2,130Total shareholders’equity54,095$457,580(17)$(12,318)$600,953
600,944(11,952)
65,086(17)971
54,077$655,040

Valuation and translation adjustments
Foreign currency Remeasurementsof defined benefit
translationplans
adjustment

Total valuationand translation
adjustments

Minority
interests

606$1,319$4,180$41,064

606

1,319

4,180

41,064$642,017
642,017(3,217)(3,217)$37,837(11,952)
651,086(17)
971(15,919)
38,149$692,877$(15,714)(15,714)$(15,099)

3,119
3,119
$4,447(12,701)(12,701)$(8,512)

Net assets

The accompanying notes are an integral part of these statements.

13

JSP Annual Review 2017

JSP Annual Review 201714

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

JSP Corporation and Consolidated Subsidiaries
Years ended March 31

JSP Corporation and Consolidated Subsidiaries

Thousands of
U.S. dollars (Note1)

Millions of yen

Net cash provided by (used in) operating activities
	Income before income taxes
Depreciation and amortization
	Impairment loss
Business structure improvement expenses
	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
	Interest and dividends income
Subsidy 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
		 Subtotal
	Interest and dividends income received
Subsidy income
	Interest expenses paid
Business structure improvement expenses paid	Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of noncurrent assets
Proceeds from sales of noncurrent assets
Payments for retirement of noncurrent assets
Purchase of investment securities
Proceeds from sales of investment securities
	Net decrease (increase) in time deposits
Other, net
		 Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
	Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Dividends paid for non-controlling interests
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
Decrease in cash and cash equivalents resulting from exclusion of subsidiaries
  from consolidation
Cash and cash equivalents at end of period

2017

2016

2017

¥10,013
4,952
129
113
(410)
(152)
40
(20)
(197)
111
(156)
(6)
(719)
1,029
(219)
(112)
84
14,480
229
(138)
(131)
(3,751)
10,688¥ 8,752
4,903
21
541
165
427
337
26
88
(274)
(301)
155
272
(10)
(438)
(1,004)835
101
231
14,828
273
301
(153)
(59)
(1,340)13,849$89,250
44,1391,149
1,007(3,654)(1,354)356(178)(1,755)989(1,390)(53)(6,408)9,171(1,952)(998)
748
129,066
2,041(1,230)(1,167)(33,434)
95,266(6,236)
105
(39)
(5)
170
(168)
(14)
(6,188)(6,341)
117
(16)
(5)
20
219
4
(6,001)(55,584)
935
(347)
(44)
1,515
(1,497)(124)(55,156)(178)
199(4,915)(2)(1,341)(233)(26)(6,497)(354)(2,351)
10,295(1,549)2,600(5,788)
(2)
(894)
(250)
(22)
(5,907)
(531)
1,408
8,893

(1,586)
1,773(43,809)(17)(11,952)(2,076)(231)(57,910)(3,155)(20,823)
91,763

22

(7)

196

¥ 7,965¥10,295$70,995

1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements havebeen prepared from the financial statements filed with the
Ministry of Finance as required by the Japanese Financial
Instruments and Exchange Act, in accordance with accounting principles and practices generally accepted in Japan. The
accompanying consolidated financial statements include theaccounts of JSP Corporation (the “Company”), and its domestic and foreign subsidiaries that are more than 50% owned.
Significant intercompany balances and transactions havebeen eliminated in consolidation. Investments in affiliates morethan 15% owned are accounted for under the equity methodof 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 31,2017 using an exchange rate of ¥112.19 to U.S. $1.

2. Summary of Significant Accounting Policies
1. Valuation Standards and Valuation Method for
Important Assets(1) Investment Securities

Other Investment Securities
Securities for which market prices are available are stated
at fair market value using the quoted market price as of thelast 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 are stated at cost, as determined by the moving averagemethod.
(2) Derivatives
Derivatives are stated at fair market value.
(3) Inventories
Inventories are stated mainly at cost according to the moving
average method (book value written down for inventories with

impaired profitability).

2. Depreciation Methods for Significant Depreciable
Assets(1) Property, Plant and Equipment (excluding leased assets)
Buildings (excluding attached structures) acquired by theCompany and its consolidated companies are depreciatedaccording to the straight-line method under the Tax Law.
	The primary useful lives are as follows:	Buildings and structures 7-50 years
Machinery, equipment and vehicles 4-15 years(2) Intangible Noncurrent Assets (excluding leased assets)
Intangible noncurrent assets acquired by the Company andconsolidated companies are amortized according to thestraight-line method.
	Useful lives and residual values are determined according
to standards prescribed by the Tax Law.
Software used for internal purposes is amortized according to the straight-line method over the useful life for Company
purposes (five years).
(3) Leased Assets
Assets subject to financing lease transactions in which asset
ownership is not transferred to the lessee are depreciatedaccording to the straight-line method. The lease term isconsidered to be the useful life of the asset; residual value isassumed to be zero.

3. Significant Allowances and Provisions(1) Allowance for Doubtful Accounts
The Company and its consolidated companies reserve against
losses due to uncollectible debt using actual loss ratios forgeneral receivables. For accounts questionable as to collectability and under claim of bankruptcy, The Company and its
consolidated companies reserve against uncollectible amounts
according to the likelihood of collectability in each case.
(2) Provision for Bonuses
The Company and its consolidated companies reserve an
estimated amount of future payments for employee bonuses
based on a calculation of the exact amount to be payable forthe current consolidated fiscal year.

The accompanying notes are an integral part of these statements.

15

JSP Annual Review 2017

JSP Annual Review 201716

Notes to Consolidated Financial Statements(3) Provision for Director Retirement Benefits
The Company reserves an amount for company and certain
subsidiary 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.
(4) Provision for Corporate Officer Retirement Benefits
The Company reserves an amount for corporate officer
retirement benefits based on corporate bylaws. The amountreserved is equivalent to the amount payable as of the end of
the current consolidated fiscal year.
(5) Business Structure Improvement Expenses
The Company maintains a reasonable estimated amount as areserve against losses in the event of closures or other incidents associated with its production bases or other tangible
assets.

4. Provision for Employee Retirement Benefits
The Company and its consolidated companies maintain aprovision for liabilities associated with employee retirement
benefits equivalent to the estimated retirement benefit obligation payable at the end of the current consolidated fiscal year
minus the estimated pension assets.
	Retirement benefit obligation is calculated based on
benefit formula standards imputing the estimated retirement
benefit obligation to the end of the current fiscal year.
	Prior service cost is charged to expense as it occurs
according to the straight-line method based on a certain number of years (generally 14 years) representing the averageremaining 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 yearsof employment.
	Unrecognized actuarial differences and unrecognizedprior service costs are adjusted for tax effects and recorded
as the remeasurements of defined benefit plans under theaccumulated other comprehensive income of net assets on
the consolidated balance sheet.
	Certain consolidated companies apply the simplified
method for calculating net retirement benefit liability and retirement benefit cost.

5. Foreign Currency Translation
Domestic consolidated companies translate rights and obligations 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 thespot rate as of the last day of the fiscal period of the subsidiaryin question. Income and expense accounts are translated into
Japanese yen according to the average rate during the period,
and translation differences are included in the foreign currencytranslation adjustment and non-controlling interest of the net
assets section of the consolidated balance sheet.

6. Major Hedge Accounts(1) Hedge Accounting
Accounting for hedges using the deferred treatment method.
However, special treatment is applied for interest rate swaps
meeting certain special conditions.
(2) Hedge Method and Transactions
Hedge method: Interest rate swap transaction
Hedge transactions: Interest rates on borrowings(3) 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.
(4) Evaluation of Hedge Effectiveness
Effectiveness is assessed by confirming a high correlation
between the rate fluctuation and cash flows of the hedgedtransaction, and those of the hedge method in question.
	Interest rate swap transactions qualifying for special treatment are not assessed for effectiveness.

term investments that are highly liquid, easily convertible tocash, redeemable within three months of acquisition, and not
subject to material risk of fluctuation in value.

Abolishment of Retirement Benefit System for Directors
and Executive Officers
The Company resolved at the Board of Directors meeting
convened on April 11, 2016 to abolish the retirement benefit
system for directors and executive officers as of the closingof the 58th Annual Meeting of Shareholders on June 29, 2016
and to make a final payment of retirement benefits upon theabolishment of the system.
	The final payment of retirement benefits upon the abolishment of the system was also resolved at the Meeting.
	Accordingly, the amount of ¥137 million for the outstanding final payment of retirement benefits has been reversed
from the provision for director retirement benefits and theprovision for corporate officer retirement benefits and recorded
as other under the noncurrent liabilities.

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

Supplemental Information
Application of Guidance on Recoverability of Deferred
Tax Assets
The Company has adopted the Implementation Guidance on
Recoverability of Deferred Tax Assets (Accounting Standards
Board of Japan (ASBJ) Guidance No. 26, issued March 28,2016) effective from the current fiscal year.

3. Securities
Securities as of March 31, 2017.

Millions of yen

2017Book ValueClassification

Difference

Securities with value on consolidated balance sheet greater than acquisition cost
Stock		 Subtotal¥   873
873

¥560
560

¥312
312

Securities with value on consolidated balance sheet not exceeding acquisition cost
Stock		 Subtotal
		 Total

139
139¥1,013

139
139
¥700

¥312

Notes: 1. The market value for unlisted stocks, ¥550 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.

7. Amortization of Goodwill and Negative Goodwill
Goodwill is amortized using the straight-line method overperiods, up to 10 years, in which said goodwill is considered toprovide benefits.

Cost

Long-term loans payable

Millions of yen

2017

2018

2019

2020

2021

¥2,878¥1,516

¥360

¥310

-

8. Scope of Cash included in the Consolidated
Statement of Cash Flows“Cash” stated in the consolidated statement of cash flows
includes cash on hand, demand deposits, and other short-

17

JSP Annual Review 2017

JSP Annual Review 201718

Notes to Consolidated Financial Statements

2. Defined Benefit Plan

5. Tax-Effect Accounting
Millions of yen

2017
Deferred tax assets
Provision for bonuses
Allowance for doubtful accounts
Depreciation
Accrued enterprise taxes and accrued business office taxes
	Unrealized profit on inventories
	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
Other
Subtotal
	Less: valuation allowances
Total deferred tax assets¥   435
101
25
72
129
52
3
36
39
20
550
589
2,059
(460)
¥1,599Deferred 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¥   74473
77
233¥1,129

	Net deferred tax assets¥   469%

2017
Reconciliation of difference between statutory tax rate and effective 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
Tax incentives for investment in overseas consolidated subsidiaries
Difference in tax rate on income of consolidated subsidiaries
Adjustment of deferred tax assets at end of period due to change in tax rates
	Valuation allowances
Other
Actual effective income tax rate

30.9
1.0
(0.0)
0.3
(1.4)
(2.5)
(2.5)
(0.1)
(0.5)
25.2

(1) Changes to balance of retirement benefit obligation at beginning and end of term
Millions of yen¥7,992
478
89
(1)
(351)
(32)
¥8,174Retirement benefit obligation at beginning of term
Service costs
	Interest expense
Actuarial differences
Retirement benefits paid
Other
Retirement benefit obligation at end of term(2) Changes to balance of pension assets at beginning and end of term

Millions of yen¥7,845
116
393
454
(348)
(19)
¥8,441

Pension assets at beginning of term
Anticipated profits
Actuarial differences	Employer contributions
Retirement benefits paid
Other
Pension assets at end of term(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

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

¥403
50
(52)
¥401

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

Funded system retirement benefit obligation
Pension assets
	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¥8,174(8,441)
(267)
401
134
505
(370)
¥   134

Note: Includes application of simplified accounting method(5) Retirement benefit expenses and breakdown of amounts

6. Employee Retirement Benefits
1. Overview of Retirement Plan
The Company and its domestic consolidated companies
provide a defined benefit corporate pension plan and a
lump-sum retirement benefit system based on regulations
for retirement allowance for employees. In certain circumstances, employees may also be granted severance pay

19

JSP Annual Review 2017

Millions of yen

when leaving the company.
Some domestic consolidated subsidiaries use the simplified method to calculate the net defined benefit liability andretirement benefit obligation.
Some overseas consolidated subsidiaries use a lumpsum retirement benefit system or defined contribution plan for
employee retirement benefits.

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

¥478
89
(116)
83
24
50
¥610

Note: In addition to the above, costs incurred during the previous consolidated fiscal year under review associated with the closure of factories of overseas consolidated subsidiaries are recorded
under extraordinary losses as “restructuring charges” of ¥307 million as provision for special retirement benefits and ¥62 million for special retirement benefits.

JSP Annual Review 201720

Notes to Consolidated Financial Statements(6) Adjustments for retirement benefit
Millions of yen

¥  24
478
¥502

Past service costs
Actuarial differences
Total(7) Remeasurements of defined benefit plans
Breakdown of items recorded under changes related to remeasurements of defined benefit plans (Before deduction of taxes)

fied 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 accounting methods used for the presentation of thereporting business segments conform with the accounting
methods used for the Consolidated Financial Statements.
	Intersegment sales are based on transaction prices withthird parties.

Millions of yen

¥  10
707
¥717

Unrecognized past service costs
Unrecognized actuarial differences
Total

3. Sales and Income (Loss) by Reporting Segment
Millions of yen
Reporting Segments(8) Items related to pension assets

1. Breakdown of main items
Allocation of main pension asset items comprising the total is as follows:
%

52
34
7
4
3
100

EquityBonds
General accounts
Cash and deposit
Other
Total

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.
(9) Items related to actuarial calculations
Main components used in actuarial calculations (weighted average)

Year ended March 31, 2016
Sales
	External customers
	Intersegment sales/transfers
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
	Investment in equity-method affiliates
	Increase in tangible and intangible fixed assets

Extrusion

Bead

Subtotal

Other(Note 1)

Total

¥38,289831¥39,121¥ 2,755¥39,216¥70,865359¥71,225¥ 7,436¥72,607¥109,155
1,191¥110,346¥ 10,192¥111,824¥5,749223¥5,973¥ 17¥3,798¥ 1,397¥ 2,136¥ 3,432¥
16¥ 203¥ 3,949¥ 4,829¥16¥ 203¥ 6,058¥

3. Defined Contribution System
Amounts contributed to the defined contribution plans of cer-Primarily 1.163
Primarily 1.500
tain consolidated subsidiaries were ¥229 million in the previous consolidated fiscal year and ¥187 million in the consolidated fiscal year under review.

7. Segment Information

21

1. Reporting Business Segments(2) Products and services associated with the reporting
business segments(1) Method of determining reporting business segments
Reporting segments are those segments comprising theCompany group for which separate financial information canbe obtained. The Company’s board of directors periodicallyreviews these segments to determine the allocation of Company resources and to assess performance.

The Company has adopted a business division structure. Eachbusiness 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 thebasic products making up that segment, and have been classi-

JSP Annual Review 2017

Consolidated(Note 3)

¥114,904
1,415¥116,319¥ 10,210¥115,622¥(1,415)¥(1,415)¥ (931)¥ (485)¥114,904¥114,904¥ 9,278¥115,136¥ 4,857¥
16¥ 203¥ 6,132¥¥ 4,887¥
16¥
203¥ 6,180¥30
47

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. Adjustments were as follows.
(1) The ¥931 million adjustment to segment loss consists of ¥928 million in companywide expenses not allocated to a reporting segment and ¥2 million in intersegment eliminations.
The majority of these expenses are costs for research and development and common operating expenses not attributable to a reporting segment.
(2) The ¥485 million adjustment to segment assets consists of ¥321 million in companywide assets not allocated to a reporting segment and ¥807 million in intersegment eliminations.
The majority of these assets are assets for research and development not attributable to a reporting segment.
(3) The ¥30 million adjustment to segment depreciation and amortization is associated with company assets not allocated to a reporting segment.
(4) The ¥47 million adjustment in increase in tangible and intangible noncurrent assets are company assets not allocated to a reporting segment.
3. Segment income is reconciled with operating income on the consolidated statements of income.

Millions of yen%

Discount rate
Expected long-term investment return rate 1.0%

¥

28
47

Adjustment(Note 2)

Reporting Segments

Year ended March 31, 2017
Sales
	External customers
	Intersegment sales/transfers
Total sales
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Amortization of goodwill
	Investment in equity-method affiliates
	Increase in tangible and intangible fixed assets

Extrusion

Bead

Subtotal

Other(Note 1)

Total

Adjustment(Note 2)

Consolidated(Note 3)¥37,929819¥38,749¥  3,045¥37,459¥65,354409¥65,763¥  7,376¥72,593¥103,284
1,229¥104,513¥  10,422¥110,052¥5,764207¥5,971¥   148¥3,565¥109,048
1,436¥110,485¥  10,570¥113,618¥(1,436)¥(1,436)¥   (958)¥   (466)¥109,048¥109,048¥    9,612¥113,151¥  1,621¥  1,439¥  3,137¥       14¥     211
¥  4,481¥    4,758¥14¥       211¥    5,921¥     29¥     18¥    4,788¥         14¥       211¥    5,939¥    149¥      48

¥    4,937¥         14¥       211¥    5,987

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. Adjustments were as follows.
(1) The ¥958 million of adjustment under segment loss consists of ¥963 million in companywide expenses not allocated to a reporting segment and ¥5 million in intersegment eliminations.
The majority of these expenses are costs for research and development not attributable to a reporting segment.
(2) The ¥466 million adjustment to segment assets consists of ¥369 million in companywide assets not allocated to a reporting segment and ¥836 million in intersegment eliminations.
The majority of these assets are assets for research and development not attributable to a reporting segment.
(3) The ¥149 million adjustment to segment depreciation and amortization is associated with company assets not allocated to a reporting segment.
(4) The ¥48 million adjustment in increase in tangible and intangible noncurrent assets is associated with company assets not allocated to a reporting segment.
3. Segment income is reconciled with operating income on the consolidated statements of income.

JSP Annual Review 201722

Global Network

Corporate Data

(As of March 31, 2017)(As of March 31, 2017)

JSP Corporation

Europe

Asia

Japan

North America

South America
BrazilFranceSouth Korea

U.S.A.

Czech Republic

TaiwanMexicoSingapore

Head Office

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

President, Representative Director

Yukio Sakai

FoundedJanuary 1962

Paid-In Capital¥10,128.610 million

Number of Shareholders

18,182

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

Major Shareholders
Shares held
(thousands)

Voting right ratio(%)

Mitsubishi Gas Chemical Company, Inc.

16,02053.74

Japan Trustee Services Bank, Ltd.

2,652

8.89

JSP Client Stock Ownership Plan

1,021

3.42

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

999

3.35

The Master Trust Bank of Japan, Ltd.

574

1.92

KanumaJP MORGAN CHASE BANK 385166

343

1.15

Kashima

JSP Employee Stock Ownership Plan

321

1.08

Tokyo Head Office

Nippon Life Insurance Company

243

0.81

MSIP CLIENT SECURITIES

203

0.68

CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW

186

0.62

Shareholders

ThailandChina

Hokkaido

Yokkaichi
Kansai
Kitakyushu
KyushuNotes: 1. The above list of major shareholders does not include treasury stock held by the company (1,602,000 shares).
2. The shareholding ratio does not include treasury stock.

23

JSP Annual Review 2017

JSP Annual Review 201724