MATERIALSINNOVATIONJSR REPORT 2022

FINANCIAL SECTION

Financial Section
Financial Section
1. Preparation Policy of the Consolidated Financial Statements
The consolidated financial statements of the Company are prepared in accordance with International Financial
Reporting Standards (hereinafter “IFRS”) pursuant to the provisions of Article 93 of the Regulation on
Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ministry of Finance OrderNo. 28 of 1976; hereinafter the “Regulation on Consolidated Financial Statements”).
2. Audit Certification
In accordance with the provisions of Article 193-2, paragraph 1 of the Financial Instruments and Exchange Act
of Japan, the consolidated financial statements for the fiscal year ended March 31, 2022 were audited by KPMG
AZSA LLC.
3. Special Efforts to Ensure the Appropriateness of Consolidated Financial Statements, etc., and Development of a
System for Fair Preparation of Consolidated Financial Statements, etc. in Accordance with IFRS
(1) The Company has implemented special efforts to ensure the appropriateness of consolidated financial
statements, etc. Specifically, the Company has become a member of the Financial Accounting Standards
Foundation and obtains information including the latest accounting standards in order to develop a systemthat enables it to properly understand the contents of accounting standards, etc. or respond appropriately tochanges in accounting standards, etc. In addition, the Company’s staff members have attended seminars,
lectures and other events held by the Accounting Standards Board of Japan.
(2)

For the adoption of IFRS, the Company keeps up with the latest accounting standards by obtaining press
releases and standards published by the International Accounting Standards Board as needed. To prepare
appropriate consolidated financial statements under IFRS, the Company has developed accounting
policies, etc. of the Group in accordance with IFRS and performs accounting procedures based on thesepolicies.

－

1－

JSR Corporation Annual Report 20221

Consolidated Financial Statements and Notes
Consolidatedof Financial Position
1. Consolidated Statement
Financial Statements
JSR Corporation
and Consolidated
Subsidiaries(1) Consolidated
Statementof Financial Position
Years ended March 31, 2021 and 2022

Note

AssetsCurrent assets
Cash and cash equivalents
9
Trade and other receivables
10，35
Inventories
12
Other financial assets
11，35
Other current assets
14
Subtotal
Assets related to disposal group
13classified as held for sale
Total current assets
Non-current assets
15，16，
Property, plant and equipment
18
Goodwill
17，18
Other intangible assets
17，18
Investments accounted for
19
using equity method
Retirement benefit asset
23
Other financial assets
11，35
Other non-current assets
14
Deferred tax assets
20
Total non-current assets
Total assets

As of March 31, As of March 31,
2021
2022

Millions ofyenMillions of
yen

As of March 31,
2022

Thousands of
U.S. dollars

85,377125,292
104,862
1,933
11,815329,279

45,567
76,106104,934
1,289
17,807245,704

2,007,547-

191,298

1,563,022

329,279

437,0023,570,569

170,428

159,539

1,303,527

58,63315,014

117,640
24,571

961,190
200,763

21,015

2,984

24,381

4,905
49,751
3,598
20,150343,494
672,773

5,192
31,4082,830
28,205372,369
809,371

42,426
256,619－2－

372,312621,836
857,374
10,529145,496

23,120230,453
3,042,479
6,613,048

JSR Corporation Annual Report 20222

Consolidated Statement of Financial Position
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2021 and 2022

Note

Liabilities and equity
Liabilities
Current liabilities
Trade and other
22，35
payablesContract liabilities
Bonds and borrowings 21，35
Income taxes payable
Provisions
24
Other financial
21，35
liabilities
Other current liabilities 25
Subtotal
Liabilities related todisposal group
13classified as held forsale
Total current liabilities
Non-current liabilities
Contract liabilities
Bonds and borrowings 21，35
Retirement benefit
23
liability
Provisions
24
Other financial
21，35
liabilities
Other
non-current
25
liabilities
Deferred tax liabilities 20
Total
non-current
liabilities
Total liabilities
EquityEquity attributable toowners of parent
Share capital
Capital surplus
Retained earnings
Treasury shares
Other components ofequityTotal equity attributableto owners of parent
Non-controlling interests
Total equity
Total liabilities and equity

26
26
26
26
26

As of March 31,
2021

As of March 31, 2022

As of March 31, 2022

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

100,797

63,548519,228

9,368
37,872
4,866
1,837

12,824
69,17013,4792,718

104,780

3,874

3,489

28,508

10,196
168,810

7,461
172,689

60,9601,410,976-

115,576

944,325

168,810288,265

2,355,300

7,861
81,406

11,582
48,737

94,631
398,214

16,434

10,27883,974-

8,033

65,635

19,314

17,795

145,397

5,136

4,809

39,290

3,077

5,133

41,936133,227

106,366

869,077

302,036

394,6313,224,377

23,37011,562302,916(19,202)

190,950
96,4092,723,549(154,215)

15,34823,37011,799333,335(18,874)
26,381

215,545

333,995

376,0113,072,237

36,741
370,736
672,773

38,728414,739809,371

316,434

565,162
110,132
22,205

3,388,671
6,613,048

JSR Corporation Annual Report 20223

Consolidated Statement of Profit or LossJSR Corporation and Consolidated Subsidiaries(2) Consolidated
Years ended
March 31, 2021Statementand 2022 of Profit or Loss

Note

Continuing operations
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Other operating income
Other operating expenses
Share of profit (loss) of investments
accounted for using equity method
Operating profit
Finance income
Finance costs
Profit before tax
Income tax expense
Profit from continuing operations

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Thousands of
U.S. dollars

7，28

29
18，30
18，30
7
7，31
7，31
7
20

13

Profit (loss)
Profit (loss) attributable to:
Owners of parent
Non-controlling interests
Total
Earnings (loss) per share
Basic earnings (loss) per share
Continuing operations
Discontinued operations
Diluted earnings (loss) per share
Continuing operations
Discontinued operations

340,997(214,937)
126,060(87,330)
10,819(5,952)
163

1,332

34,233822(1,744)33,310(7,990)25,321

43,7603,415(1,655)45,521(8,370)37,151

357,546(79,851)

2,289

18,703(54,530)

39,440322,245(55,155)625(54,530)

37,3032,136
39,440304,789(669)

19

Discontinued operations
Profit (loss) from discontinued operations

312,000(198,192)
113,808(75,205)
1,601(5,302)

Yen(256.73)108.65(365.38)(256.34)
108.47(364.81)

33
33
33
33

－

4

Yen

173.49162.52
10.97
173.26162.3010.96

2,786,154(1,756,168)
1,029,986(713,537)
88,398(48,633)

27,904(13,518)
371,931(68,389)
303,542

17,456322,245
U.S. dollars
1.42
1.33
0.09
1.42
1.33
0.09

－

JSR Corporation Annual Report 20224

Consolidated Statement of Comprehensive Income
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2021 and 2022

(3) Consolidated Statement of Comprehensive Income

Note

Profit (loss)
Other comprehensive income
Items that will not be reclassified to
profit or loss
Net change in fair value of equity
instruments designated as measured atfair value through othercomprehensive income
Remeasurements of defined benefit
plans
Share of other comprehensive incomeof investments accounted for using
equity method
Items that may be reclassified to profit
or loss
Effective portion of cash flow hedges
Exchange differences on translationof foreign operations
Share of other comprehensive incomeof investments accounted for using
equity method
Total other comprehensive income, net oftax
Total comprehensive income

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Thousands of
U.S. dollars(54,530)

39,440

32

5,101

1,141

9,320

32

1,438

281

2,295

32

68

(2)

(20)

32

28

34

274

32

6,167

17,573

143,580

32

65

640

5,228

12,867

19,665

160,678(41,663)

59,105482,923(43,458)
1,795(41,663)

56,124
2,981
59,105458,565

Comprehensive income attributable to:
Owners of parent
Non-controlling interests
Total

－

5

322,245

24,358482,923－

JSR Corporation Annual Report 20225

Consolidated Statement of Changes in Equity
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2021 and 2022

(4) Consolidated Statement of Changes in Equity
Fiscal year ended March 31, 2021
(Millions of yen)
Equity attributable to owners of parent
Note

Restated balance atApril 1, 2020
Profit(loss)
Other comprehensive
income23,37018,242-

Total comprehensive income
Share-based paymenttransactions
Dividends

Share capital

CapitalsurplusPurchase and disposal oftreasury shares
Transfer from othercomponents of equity toretained earnings
Proceeds from sale ofshares of subsidiaries
Changes in non-controlinginterests-

23,370

Balance at March 31, 2021

(19,547)(12,888)(541)(6,679)(11,031)

11,562302,916

Fiscal year ended March 31, 2022

Total

Noncontrollinginterests

5,626

396,793

40,619437,412625

11,697(55,155)(54,530)

Other
components ofequity-11,697

266

(9)

80

11,697

1,170(43,458)

1,795(12,888)

(479)

251

62

2,399

(6,656)

Total transactions withowners, etc.

369,102(55,155)

(18)

Other

Treasuryshares(55,155)(6)

27

Retainedearnings

346

12,867(41,663)251(13,368)62(2,399)

-

-

-

-

(27)
460

(6,682)(5,198)
5(11,881)(1,975)(19,339)(5,673)(25,012)

15,348(19,202)

Total equity(82)

333,995

36,741(77)

370,736(Millions of yen)
Equity attributable to owners of parent
Note

Balance at April 1, 2021

Share capital

CapitalsurplusRetainedearnings

Treasuryshares23,37011,562302,916(19,202)37,303

ProfitOther comprehensive
income-Total comprehensive income
Share-based paymenttransactions
Dividends

Balance at March 31, 2022

37,303(13,975)

27

Purchase and disposal oftreasury shares
Transfer from othercomponents of equity toretained earnings
Proceeds from sale ofshares of subsidiaries
Changes in non-controlinginterests
Other
Total transactions withowners, etc.

226
(17)

-

237

23,37011,799(6,884)

333,335－

6

333,995

36,741

370,736

37,3032,136

39,44018,821

845

19,665-

18,821

56,124

2,981

59,105

248

(32)

441

79

34
(573)

15,348

Total equity

Total

Noncontrollinginterests

18,821

7,663

(6)

Other
components ofequity327(18,874)(13,975)63441(1,127)-(15,102)63-(7,663)

34
-

-

(92)

(671)

(671)

(7,788)26,381(14,108)
376,011

133

(994)

38,728167(15,102)414,739－

JSR Corporation Annual Report 20226

Consolidated Statement of Changes in Equity
JSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2021 and 2022

Fiscal year ended March 31, 2022
(Thousands of U.S. dollars)
Equity attributable to owners of parent
Note

Balance at April 1, 2021

Balance at March 31, 2022

Other
components ofequityTotal equity

Total

Noncontrollinginterests

190,950

94,472

2,475,005(156,890)

125,404

2,728,940

300,200

3,029,140-

304,789--

304,789

17,456322,245--

153,777

153,777

6,901

160,678
482,923

Other comprehensive income

Share-based paymenttransactions
Dividends
Purchase and disposal oftreasury shares
Transfer from othercomponents of equity toretained earnings
Proceeds from sale ofshares of subsidiaries
Changes in noncontroling interests
Other
Total transactions withowners, etc.

TreasurysharesShare capital

Profit-Total comprehensive income

Retainedearnings

Capitalsurplus-304,789-

153,777

458,565

24,358

1,843

-

2,026

(265)

3,603

-

3,603

(114,182)(9,209)(123,391)

514

-

514

-

-

-

275

1,086

1,361

-

-

-

(114,182)

27

(135)

649
62,615(62,615)275(45)(4,678)-(755)(5,479)-(5,479)-1,937(56,245)

2,674(63,635)(115,269)(8,123)(123,392)

190,950

96,4092,723,549(154,215)

215,545

3,072,237

316,434

3,388,671－

7－

JSR Corporation Annual Report 20227

Consolidated Statement of Cash FlowsJSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2021 and 2022

(5) Consolidated Statement of Cash Flows
Note

Cash flows from operating activities
Profit before tax
Profit (loss) before tax from discontinued
operations
Depreciation and amortization

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

13Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted
for using equity method
Impairment losses
Loss (gain) on step acquisition
Decrease (increase) in inventories
Increase in trade and other payables
Other
Dividends received
Interest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Net decrease in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of investments
Proceeds from sale of investments
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Payments for sales of shares of subsidiaries
resulting in change in scope of consolidation
Proceeds from sale of shares of subsidiaries
resulting in change in scope of consolidation
Proceeds from sale of investments in associates

8

Dividends paid
Dividends paid to non-controlling interests
Purchase of shares of subsidiaries not resulting inchange in scope of consolidation
Proceeds from sale of investments in subsidiaries

27,541

29,47722,482

183,688

(903)
1,743

(1,782)
2,535(14,561)

79,575

5,650

46,163

27(102,394)

15,0011,076
201(379,558)
82,244

8,884
1,801
367

72,586
14,7182,995(2,300)－(18,792)

18,271

149,285(11,706)－(95,645)

2,145

397

3,243
(389,036)

284(47,614)

778

6,358

(1,606)2,016(1,652)
17,203(13,498)
140,560(386,862)－(47,348)

(368)

498

(45)

－

－

－

15,224

124,385

(567)
627

(471)
811

(3,847)
6,626(52,687)(400)(63,117)(515,705)

39,338321,414

10,003

81,734(125,317)(3,266)(11,428)
11,32034,836(15,338)
7,863
－

(3)
(12,887)(4)(13,972)(114,158)(9,209)

－

－

160

1,305

(11,717)－8(46,454)
10,066(55,205)(464)－(61,012)(7,467)(2,424)
－

21
21
21

(1,332)(12,532)

(878)

21

(163)

20,713(13,009)
9,807
11,772－

Net cash provided by (used in) investing activities

Proceeds from long-term borrowings
Proceeds from issuance of bonds
Purchase of treasury shares

3,371

70,403Other

Net increase in commercial papers
Repayments of long-term borrowings(95,740)(5,393)

Payments for loans receivableCollection of loans receivable

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

371,931(1,605)
958

Income taxes refund

U.S. dollars

45,521－

Decrease (increase) in trade and other receivables

Thousands of

33,310

4,132
18

Fiscal year ended
March 31, 2022

(1,127)64,249－(36)－

JSR Corporation Annual Report 20228

Consolidated Statement of Cash FlowsJSR Corporation and Consolidated Subsidiaries
Years ended March 31, 2021 and 2022

not resulting in change in scope of consolidation
Repayments of lease liabilities
21
Other
Net cash provided by (used in) financing
activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents included in assets
associated with disposal groups classified as held for 13
sale
Cash and cash equivalents at end of period
9(3,264)327(4,348)419(35,524)
3,421

22,994

187,878

1,432(1,534)(12,533)

4,297

23,44561,931(23,386)
85,377(191,074)
697,578－(16,424)(134,193)

85,377－

945,567372,312－JSR Corporation Annual Report 2022

9

Notes of Consolidated Financial Statements
2. Notes of Consolidated Financial Statements(1) Reporting Entity
JSR Corporation (the “Company”) is incorporated in Japan. The consolidated financial statements comprise thefinancial statements of the Company and its subsidiaries (collectively, the “Group”) together with the Group’s
attributable share of the results of associates and joint ventures. The Group is primarily engaged in the Digital
Solutions Business, the Life Sciences Business and the Plastics Business as well as businesses related to these.
The products of these businesses are wide ranging. See the note “(7) Segment Information” for further details.
(2) Basis of Preparation
1) Compliance with Accounting Standards
The Group meets the requirements of a “specified company” set forth in Article 1-2 of the “Ordinance on
Consolidated Financial Statements.” Accordingly, the Group prepares consolidated financial statements inaccordance with IFRS pursuant to the provisions of Article 93 of the said Ordinance.
2) Basis for Measurement
The Group’s consolidated financial statements, with the exception of assets pertaining to post-employment
benefit plans, financial instruments measured at fair value, etc., stated on “(4) Significant Accounting Policies,”
are prepared on a historical cost model.
3) Presentation Currency and Units
The Group’s consolidated financial statements are presented in Japanese yen, the currency of the primaryeconomic environment in which the Company performs business activities (the “functional currency”), withamounts rounded to the nearest million yen.
The translation of the amounts in Japanese yen into US dollars is included solely for the convenience of readers
outside Japan, using the prevailing exchange rate on March 31, 2022, which was ¥108.83 to $1.00. The amounts
translated should not be construed as representations that the amounts in Japanese yen have been, could havebeen, or could in the future be, converted into US dollars at this or any other rates of exchange.
4) Authorization of Consolidated Financial Statements
The consolidated financial statements have been authorized by Nobuo Kawahashi, the Company’s
representative director and president and COO, and Ken-ichi Emoto, the Company’s CFO, on June 17, 2022.
(3) Explanation of New Standards and Interpretations Not Applied
The major new or revised standards and interpretations published prior to the date of authorization of theconsolidated financial statements have no significant impact.
(4) Significant Accounting Policies
The significant accounting policies that have been applied to the consolidated financial statements are as follows
and are identical to those applied to all periods stated in the consolidated financial statements.
1) Basis of Consolidation(i) Subsidiaries
Subsidiaries refer to all entities controlled by the Group. The Group is deemed to have control over an entity
if it has exposure or rights to variable returns from its involvement in the entity and has the ability to use its
power over an entity to affect such returns. The financial statements of subsidiaries are included in theGroup’s consolidated financial statements from the date the Company gains control until the date it loses
control of the subsidiary.
In cases where the accounting policies applied by a subsidiary are different from those applied by the Group,
adjustments are made to the subsidiary’s financial statements, if necessary. All intergroup balances of
payables and receivables, internal transactions and unrealized gains or losses arising from transactions
within the Group are eliminated in preparing the consolidated financial statements.
When the Company retains control when there has been partial disposal of ownership interest in a
subsidiary, the partial disposal is accounted for as an equity transaction. Any difference between the amountby which the non-controlling interests are adjusted and the fair value of the consideration paid or received is－

10 －JSR Corporation Annual Report 2022

10

Notes of Consolidated Financial Statements

recognized directly in equity attributable to Owners of the parent company.
If the Company loses control over the subsidiary, gains or losses derived from such loss are recognized as
profit or loss.
When the fiscal year-end of a subsidiary is different from the end of the reporting period of the Group, theCompany uses financial statements of the subsidiary based on the provisional accounting as of the end of thereporting period of the Group.
(ii) Associates
Associates are entities over which the Group has significant influence but does not have control over thefinancial and operating policies. The equity method is applied to all associates from the date on which theGroup acquires significant influence to the date on which it loses the significant influence.
Goodwill recognized on acquisition (less accumulated impairment losses) is included in investments inassociates.
In cases where the accounting policies applied by an associate are different from those applied by the Group,
adjustments are made to the associate’s financial statements, if necessary.
(iii) Joint Ventures
A joint venture is an entity jointly controlled by two or more parties including the Group under thecontractually agreed sharing of control over economic activities of the joint venture, which exists only when
decisions for strategic financial and operating decisions related to relevant activities require unanimous
consent of the parties sharing control.
Joint ventures of the Group are accounted for using the equity method.
In cases where the accounting policies applied by a joint venture are different from those applied by theGroup, adjustments are made to the joint venture’s financial statements, if necessary.
2) Business Combinations
The Group takes in account business combinations using the acquisition method.
The aggregate of the consideration paid for a business combination measured at fair value on the acquisition
date and the amount of non-controlling interests in the acquired entity are taken as the acquisition costs basedon the acquisition method.
Non-controlling interests are measured at equivalent amount for the fair price of the acquired entity’s identifiable
net assets and liabilities in proportion to the share of the non-controlling interest.
Ancillary costs incurred relating to business combination such as brokerage fees, attorney’s fees, due diligencecosts, other professional fees, consulting fees, as well as other acquisition-related costs are recognized as
expenses in the periods in which such costs are incurred.
If the initial accounting for the business combination has not been completed by the closing date of the reporting
period in which the business combination took place, such incomplete items are measured at provisional amounts
based on the best estimate.
If the new information obtained during the measurement period, which lasts for a year from the acquisition date,affects the measurement of the amount recognized on the acquisition date, the provisional amount recognized on
the acquisition date is retrospectively revised.
In the event that the aggregate amount of fair value of the consideration paid in relation to the businesscombination, the amount of non-controlling interests in the acquired entity, and the fair value of equity interestson the control commencement date in the acquired entity previously held by the acquiring entity exceeds the
net value of identifiable assets and liabilities at the acquisition date, the excess amount is recognized as goodwill.

－

11

－
JSR Corporation Annual Report 2022

11

Notes of Consolidated Financial Statements

If, on the other hand, such aggregate amount does not exceed the net value of identifiable assets and liabilities
at the acquisition date, the difference is recognized in profit or loss. Additional acquisitions of non-controllinginterests after the controlling acquisition are accounted for as capital transactions and are not recognized as
goodwill from the original transaction.
3) Foreign Currency Translation(i) Functional Currency and Presentation Currency
The Group’s consolidated financial statements are presented in Japanese yen, which is the Company’sfunctional currency. The Group’s foreign operations generally use the local currency as their functional
currency, but if any currency other than the local currency is primarily used in the economic environment inwhich the entity operates, such currency is used as the entity’s functional currency.
(ii) Foreign Currency Transactions
Foreign currency transactions, meaning transactions conducted in a currency other than the respective entity’sfunctional currency, are translated into the functional currency either by using the exchange rates prevailingat the date of the transaction or using an average rate when there are no material fluctuations in exchange rates.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rates prevailing at the reporting date, and exchange differences are recognized in profit or loss
in principle.
(iii) Foreign Operations
The assets and liabilities (including goodwill arising from acquisitions and adjustments of fair value) of foreign
operations that use a currency other than Japanese yen as their functional currency are translated into Japanese
yen at the exchange rates prevailing at the reporting date. The revenues and expenses of foreign operations aretranslated into Japanese yen at the average rates of exchange over the reporting period, unless there arematerial fluctuations in exchange rates. Exchange differences arising from such translations in foreign
operations’ financial statements are recognized in other comprehensive income, and are included andaccounted for in other components of equity.
4) Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hand, deposits that can be withdrawn as needed, and short-term
investments that are easily converted into cash with minimal risk of changes in value.
5) Inventories
Inventories are measured at the lower of cost or net realizable value. Cost of inventories is calculated based on
the weighted-average cost formula. Net realizable value is the estimated selling price of inventories in theordinary course of business, less the estimated costs of completion and estimated selling expenses. Inventories
and work in process manufactured by the Company include the amounts of manufacturing overhead
appropriately allocated based on the ordinary operating rate.
6) Property, Plant and Equipment （Excluding Right-of-use Assets）
The cost model has been adopted, and all property, plant and equipment are measured at cost less any
accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to theacquisition of the assets, and the present value of the estimated costs of removal of the assets and site restoration.
Furthermore, borrowing costs that satisfy certain conditions directly attributable to the acquisition, construction,etc., of the assets are recognized as part of the cost of the assets.
Depreciation expenses are recognized using the straight-line method over the estimated useful life of each asset
to depreciate the cost less the residual value of the asset. The estimated useful lives, residual values, anddepreciation methods are reviewed at the end of the reporting period. In the event of the modification inestimates, impacts therefrom are recognized in the accounting period in which the estimates were modified andin the future accounting periods.
The estimated useful lives of major assets are as follows:• Buildings and structures: 10 to 50 years• Machinery, equipment, and vehicles: 5 to 25 years• Tools, furniture, and fixtures: 3 to 10 years

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Notes of Consolidated Financial Statements

7) Intangible assets(i) R&D expenses
Research-related expenditures are recognized as expenses when they are incurred. Development-related
expenditures are capitalized as intangible assets only when all of the following conditions are satisfied: theamount for such expenditures can be reliably measured; the products or the processes to be developed
therefrom are technically and commercially viable; there is a high probability of generating future economic
benefits; and the Group intends to complete the development and use the process or the products therefrom aswell as sufficient resources to make them feasible. All other expenditures are recognized as expenses when
they are incurred.
(ii) Goodwill
The measurement of goodwill at initial recognition is stated in “2) Business combinations.” The Group does
not amortize goodwill, but tests for impairment every fiscal year. Impairment of goodwill is stated in “8)Impairment of non-financial assets.” Impairment losses of goodwill are recognized as profit or loss and notreversed subsequently.
After the initial recognition, goodwill is presented at cost less accumulated impairment losses.
(iii) Intangible Assets Acquired as a Result of a Business Combination
Cost of intangible assets acquired as a result of a business combination is measured at fair value on theacquisition date.
Intangible assets acquired as a result of a business combination are accounted after initial recognition at costless any accumulated amortization and accumulated impairment losses, which are amortized using the straightline method over the estimated useful life of each asset.
The estimated useful life of major assets is as follows:• Technology-based intangible assets: 5-15 years(iv) Intangible Assets Acquired Individually
Other intangible assets acquired individually inclusive of software, etc., are accounted at cost less any
accumulated amortization and accumulated impairment losses, which are amortized using the straight-line
method over the estimated useful life of each asset.
The estimated useful life of a major asset is as follows:• Software: 5 years8) Impairment of Non-financial Assets
The Group assesses its non-financial assets, excluding inventories and deferred tax assets at the end of eachreporting period to identify any indications of a potential inability to recover the carrying amount due to changes
in such assets or circumstances. If any such indication exists, impairment testing is conducted.
If the carrying amount of an asset exceeds its recoverable amount, the difference is recognized as impairment
loss.
The recoverable amount of an asset is the higher of the fair value less costs of disposal and the value in use. In
calculating the value in use, the estimated future cash flows from the asset are discounted to the present value
using a discount rate that reflects the time value of money and the inherent risks of the asset. For the purposesof determining impairment, assets are grouped into an individual asset or the smallest asset group (cashgenerating unit) generating cash inflows that are largely independent of the cash flows of other assets.
Goodwill is tested for impairment once a year periodically, regardless of whether any indications of impairment
exist, and the cost at the time of acquisition less any accumulated impairment losses is recognized as the carrying
amount.
In the case of property, plant and equipment and intangible assets, excluding goodwill, for which impairment
losses have been recognized in prior years, an assessment is conducted at the end of each reporting period todetermine if there are any possibilities of reversal of such impairment losses.
－

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Notes of Consolidated Financial Statements

9) Financial Instruments(9.1) Financial Assets(i) Initial Recognition and Measurement
The Group initially recognizes financial assets on the date when it becomes a party to the contract on thefinancial instruments concerned. Financial assets bought or sold by ordinary methods are initially recognizedon the transaction date. Financial assets are subsequently classified into those measured at amortized cost or
those measured at fair value.
Financial assets measured at fair value through profit or loss are initially measured at fair value. Financial
assets measured at fair value through other comprehensive income and financial assets measured atamortized cost are initially measured at fair value plus transaction costs that are directly attributable to theacquisition of the financial asset. Additionally, trade receivables that do not include significant financing
components are initially measured at the transaction price.
(a) Financial assets measured at amortized cost
Financial assets are classified as those measured at amortized cost only when both of the following
conditions are satisfied; the asset is held within a business model whose objective is to hold assets inorder to collect contractual cash flows; and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amountoutstanding.
(b) Financial assets measured at fair value
Financial assets are classified as those measured at fair value if they fail to meet either of the two
requirements given above.
Of these assets, financial assets that generate, on specified dates, cash flows that are solely payments
of principal and interest on the principal amount outstanding and are held within a business model
whose objective is achieved both by collecting contractual cash flows and by selling the assets areclassified as debt financial assets measured at fair value through other comprehensive income.
Moreover, for certain equity financial assets, the Group has made an irrevocable election to present
subsequent changes in fair value in other comprehensive income and to classify these assets as equity
financial assets measured at fair value through other comprehensive income.
Financial assets such as derivative assets, other than the above assets, are classified as financial assets
measured at fair value through profit or loss.
(ii) Subsequent Measurement
After initial recognition, financial assets are measured according to their classification as follows:(a) Financial assets measured at amortized cost
Measured at amortized cost using the effective interest method(b) Financial assets measured at fair value
Measured at fair value on the reporting date
Any changes in the fair value of financial assets are recognized in profit or loss or in othercomprehensive income according to their respective classification of the financial asset. Dividends
received from designated equity instruments measured at fair value through other comprehensive
income are recognized in profit or loss. If the fair value of the equity instrument depreciates materiallyor if the equity instrument is disposed of, any accumulated other comprehensive income or loss isreclassified to retained earnings.
(iii) Derecognition
Financial assets are derecognized when the contractual rights to the cash flows from the investment expire
or when the contractual rights to the cash flows from the investment are assigned and substantially all therisks and rewards of the Group’s ownership of such financial assets are transferred.
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Notes of Consolidated Financial Statements(9.2) Financial Liabilities(i) Initial Recognition and Measurement
The Group initially recognizes financial liabilities on the contract date. Financial liabilities are initiallymeasured at fair value less transaction costs that are directly attributable to the acquisition of the financial
liability.
(ii) Subsequent Measurement
After initial recognition, financial liabilities are measured according to their classification as follows:(a) Financial liabilities measured at amortized cost
Measured at amortized cost using the effective interest method(b) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss, which include those designatedfinancial liabilities measured at fair value through profit or loss, are measured at fair value.
(iii) Derecognition
Financial liabilities are derecognized when contractual obligations are discharged, cancelled, or expired.
(9.3) Offsetting Financial Instruments
Financial assets and liabilities are offset if and only if: there is a legally enforceable right to set off therecognized amount of financial assets against the recognized amount of financial liabilities; there is the intent
either to settle on a net basis or to realize assets and settle liabilities simultaneously.
10) Impairment of Financial Assets
The Group estimates expected credit losses as of the reporting date for financial assets measured at amortized
cost.
If the credit risk has not increased materially from initial recognition, the 12-month expected credit loss isrecognized as a loss allowance. In the case of trade receivables that do not include significant financial
components, however, the loss allowance is always measured at lifetime expected credit loss. If the credit risk
has increased materially from initial recognition, the lifetime expected credit loss is recognized as a loss
allowance. Judgment as to whether or not a material increase in credit risk has occurred from the initialrecognition is based on the degree of changes in default risk. When the Group judges whether or not there arematerial changes in default risk, it reviews the information on the past due status as well as the following factors;• External credit grades of the financial asset• Internal credit grades• Results of operations of the borrower• Financial assistance from the parent company, etc. of the borrower
Expected credit losses are measured as weighted average of the present value of the difference between allcontractual cash flows that are due to the entity in accordance with the contract and all cash flows that theentity expects to receive, weighted by respective risks of default occurring. The Group treats any financial
asset as a credit-impaired financial asset in cases where the financial asset is considered to have defaulted,
including cases where the financial asset is significantly past due even after enforcement activities for the
performance of obligations are taken and where the debtor files legal proceedings for bankruptcy, corporate
reorganization, civil rehabilitation or special liquidation. The Group presents the financial assets measured atamortized cost at the net amount that the loss allowance is deducted from the carrying amount in the
consolidated statement of financial position and recognizes the loss as profit or loss.
When the Group has no reasonable expectations of recovering all or part of a financial asset, the carrying amountof the asset is directly written off by that amount.
11) Derivatives and Hedge Accounting
Derivatives are initially recognized at fair value at the date on which the derivative contract is entered into andare subsequently remeasured at their fair value at the end of each reporting period after initial recognition. The
method of recognizing the resulting gain or loss depends on whether or not the derivative is designated as ahedging instrument, and if so, the nature of the item being hedged.
－

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Notes of Consolidated Financial Statements

The Group designates certain derivatives as hedging instruments of cash flow hedges (hedges of a particularrisk associated with a recognized asset or liability, or a highly probable forecast transaction), and certain
foreign currency borrowings as hedging instruments of net investment in foreign operations.
The Group documents, at the start of the transaction, the relationship between hedging instruments and hedged
items as well as the objectives and strategies for managing risk regarding the execution of their hedging
transactions. Furthermore, the Group documents at the start of the hedge, and on a continuing basis,
assessments of whether or not the derivatives used in the hedging transaction are effective in offsetting changes
in the hedged items’ cash flow.
Hedge effectiveness is assessed on a continuing basis, and a hedge is deemed effective when it satisfies all of
the following conditions: an economic relationship exists between hedged items and hedging instruments; theeffect of credit risk is not such that it materially dominates value changes arising from the economic
relationship; and the hedge ratio of the hedging relationship is equivalent to the ratio arising from the volumeof hedging instruments and hedged items that are actually being hedged.
The effective portions of change in the fair values of derivatives designated as hedging instruments of cash
flow hedges and satisfying the conditions thereof are recognized in other comprehensive income. Gains orlosses arising from ineffective portions are recognized immediately as profit or loss. Accumulated gains orlosses recognized through other comprehensive income are reclassified to profit or loss in the period when the
cash flow originating from the hedged items has an effect on profit or loss.
When hedge accounting conditions are no longer satisfied due to forfeit, sale, etc., of hedging instruments,
hedge accounting will no longer be applied prospectively. When hedged future cash flow is expected to occur
again, the accumulated gains or losses recognized in other comprehensive income will continue to be recognized as other components of equity. In cases where forecast transactions are no longer expected to occur,
the accumulated gains or losses recognized in other comprehensive income are reclassified immediately to
profit or loss.
With regard to certain foreign currency borrowings that are retained for the purpose of hedging exposure to
exchange rate fluctuation risks for net investments in foreign operations, the portion of foreign exchange
differences deemed effective as a hedge is recognized in other comprehensive income as hedges of net
investment in foreign operations. Of exchange differences in the hedging instruments, any ineffective portionof the hedge or any portion of the hedge not subject to the assessment of hedge effectiveness is recognized in
profit or loss.
Through net investment hedges, the cumulative amount of gain or loss recognized in other comprehensive
income is reclassified to profit or loss on the disposal of foreign operations.
12) Leases
At inception of a contract, the Group assesses whether the contract is, or contains, a lease based on whether
the contract conveys the right to control the use of an identified asset for a period of time in exchange forconsideration. The Group elects not to recognize right-of-use assets and lease liabilities for short-term leases
within 12 months and leases of low-value assets.
Apart from short-term leases or leases of low-value assets, the group records right-of-use assets and leaseliabilities in the consolidated statement of profit or loss at the lease commencement date when a contract is,or contains a lease. The lease payments associated with short-term leases and leases of low-value assets arerecognized as an expense on a straight-line basis over the lease term.
Right-of-use assets are measured under the cost model and are stated at cost less accumulated depreciation
and accumulated impairment losses.
The cost of right-of-use assets is initially measured based on the initial measurement amount of the leaseliability adjusted for any initial direct costs incurred or any lease payments made at or before thecommencement date, plus any costs to restore the underlying asset or the site at which it is located and otherrelated costs required in the lease contract. Right-of-use assets are depreciated over the lease term on astraight-line basis. Right-of-use assets are recorded in Property, plant and equipment on the current
Consolidated Statement of Financial Position. Lease liability is measured at the present value of unpaid lease
payments at the calculated interest rate of the lease or when the calculated interest rate cannot be easily－

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Notes of Consolidated Financial Statements

calculated, discounted by the incremental borrowing rate. Generally, the Group uses the incremental
borrowing rate as the discount rate. Lease payments are apportioned between finance costs and repaymentsof lease liability under the effective interest rate method. Finance costs are recognized in the consolidated
statement of profit or loss.
13) Employee Benefits(i) Short-term Employee Benefits
Short-term employee benefits are recognized as an expense in the period in which the employee renders therelated service without discounting. Bonus payments are recognized as liabilities in the amount estimated tobe paid based on the applicable bonus payment system when there is a legal or constructive obligation to pay
and the obligation can be estimated reliably.
(ii) Long-Term Employee Benefits
The Group has adopted defined contribution plans and defined benefit plans as post-employment benefit plansfor employees.
Liabilities (assets) recognized in connection to defined benefit pension plans are calculated at the present valueof defined benefit obligations under such plans at the end of the reporting period less the fair value of the plan
assets. An independent specialist calculates the defined benefit obligations for each reporting period using the
projected unit credit method. Any amount recognized as assets from this calculation is limited to the present
value of any future economic benefit available in the form of refunds from the plans or reductions in futurecontributions to the plans when there is a possibility for the assets to generate these to the Group. Calculationsof the present value of economic benefits take into consideration the minimum funding requirement. The
present value of defined benefit obligations is calculated by discounting the estimated future cash flows inreference to market yields on high-quality corporate bonds that pay benefits and with maturities similar to theestimated timing of payment of the obligations.
Changes due to remeasurements of net defined benefit liabilities (assets) that were recognized in othercomprehensive income in the period they occurred are immediately reclassified from other comprehensive
income to retained earnings.
Defined contribution plans are post-employment benefit plans under which an employer pays fixed
contributions to an independent entity and has no legal or constructive obligation to pay further contributions.
Contribution obligations under the defined contribution plans are recognized as an expense in the period inwhich the employee renders the related service.
(ⅲ) Termination benefits
The Group pays termination benefits when the Group ends an employee's employment before the normal
retirement date, or when the employee accepts an offer of benefits in exchange for the termination of
employment. The group recognise a liability and expense for termination benefits at the earlier of thefollowing dates: (a) when the group cannot withdraw the offer of those benefits; and (b) when the group
recognises costs for a restructuring that involves the payment of termination benefits.
14) Non-current Assets Held for Sale and Discontinued Operations
A non-current asset or disposal group is classified as held for sale if its carrying amount will be recovered
principally through a sale transaction rather than through continued use.
The conditions for classifying an asset or disposal group as held for sale are that it must be available for
immediate sale in its present condition and the sale must be highly probable. The classification is also limited towhen management of the Group is committed to executing the sale plan and the sale is generally expected tocomplete within one year. After classification as held for sale, an asset or disposal group is measured at the lowerof the carrying amount and the fair value less costs to sell, and is not depreciated or amortized.
A discontinued operation includes a component of the Group that either has been disposed of or is classified asheld for sale, represents a line of business or geographical area of the Group, and is recognized when there is aplan to dispose of that line of business or geographical area.
15) Provisions
Provisions are recognized if the Group has a present legal or constructive obligation as a result of a past event－

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Notes of Consolidated Financial Statementsthat can be estimated reliably and it is probable that an outflow of resources will be required to settle theobligation.
When the time value of money is significant, the estimated future cash flow is discounted by the present value
using a before-tax discount rate that reflects the time value of money and inherent risks of the liability. Transferbacks of the discounted amount over time are recognized as finance costs.
16) Share Capital
The issue price of equity instruments issued by the Company is recognized in share capital and capital surplus,and direct issue costs (net of tax effects) are deducted from capital surplus.
On the purchase of treasury shares, costs net of tax effects including direct transaction costs are recognized as
an equity deduction. On the sale of treasury shares, including disposal of treasury shares with the exercise ofstock options, the balance of disposals is recognized as capital surplus. Common shares are classified to equity.
17) Share-based Remuneration Plans(i) Stock Options
The Group operated an equity-settled share-based remuneration plan where the Group received services fromdirectors, executive officers, and employees as well as paid equity instruments (options) as consideration
thereof until June 2018
The fair value on the date the option was granted under the plan is recognized as an expense over the option’s
vesting period and the same amount is recorded as an increase in equity. The plan was terminated in June 2018(however, of share acquisition rights as share-based stock options that were already granted to directors, etc.,
those share acquisition rights which have not been exercised will be continued).
(ii) Restricted Share-based Remuneration Plan
The Company has adopted the restricted share-based remuneration plan for its directors and others as aperformance-linked remuneration plan and applied the accounting treatment for equity-settled share-basedplans under this plan.
Fair value of the share-based remuneration is determined using the fair value of ordinary shares on the grant
date. The fair value is recognized as an expense over the share’s vesting period, and the same amount isrecorded as an increase in equity.
(iii) Performance Share Unit Remuneration Plan
The Company has adopted a Performance Share Unit Remuneration plan for directors and executive officersof the Company and officers of certain subsidiaries of the Company, under which the number of shares to bedelivered and the amount of individual cash payments are adjusted according to the attainment level ofpredetermined performance targets, and applied cash-settled share-based payment transactions and equitysettled share-based payment transactions under this plan.
Expenses related to the cash-settled payment transactions are recognized over the applicable period and thesame amounts are recognized as an increase in liabilities.
Expenses related to the equity-settled payment transactions are calculated using the fair value of common
stock at the grant date and are recognized over the applicable period and the same amounts are recognized as
an increase in equity.
18) Revenue Recognition
The Group recognizes revenue by applying the following five steps, apart from interest and dividend income
accounted for in accordance with IFRS 9 — Financial Instruments.
Step 1: Identify the contract with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
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Notes of Consolidated Financial Statements

Step 4: Allocate the transaction price to performance obligations.
Step 5: Recognize revenue when (or as) the Group satisfies a performance obligation.
In case of sales contracts with customers for products and merchandise, the Group recognizes the sale as revenue
when the products and merchandise are delivered to the customer, considering that control of the products andmerchandise is transferred to the customer and the performance obligation is fulfilled. For rendering of services,
the Group recognizes revenue over time with fulfillment of performance obligation based on the contract
between the Group and the customer.
19) Government Grants
Government grants are recognized when there is reasonable assurance that the Group will comply with theconditions attached to the grant and that the grant will be received. Government grants are recognized in profit
or loss on a systematic basis over the period the associated costs, which the grant is intended to compensate, arerecognized as expenses.
For government grants associated with acquiring assets, the amounts of the grants are deducted directly whencalculating the carrying amounts of the assets. Grants are recognized in profit or loss over the useful lives of thedepreciated assets as changes in depreciation expense.
20) Finance Income and Finance Cost
Finance income comprises interest received, dividends received, etc. Interest received is recognized when it
incurred using the effective interest method. Dividends received are recognized when the Group’s rights toreceive dividends have been established; there is a high probability that the economic benefits associated withthe dividends will flow into the Group; the amounts can be measured reliably.
Finance cost comprises interest paid, etc.
With respect to an asset that necessarily takes a substantial period of time to get ready for its intended use or
sale, borrowing costs that are directly attributable to the acquisition, construction or manufacture of the asset
form part of the cost of that asset. All other borrowing costs are recognized as an expense in the period in which
they are incurred.
21) Income Taxes
Income taxes comprise current taxes and deferred taxes. They are recognized in profit or loss, with the exceptionof income taxes associated with items recognized in other comprehensive income or items that are directly
recognized in equity.
(i) Current Taxes
The Group recognizes current taxes based on taxable profits for the reporting period. Current tax amounts
are calculated using the tax rates that are in force or substantially in force on the final day of the reporting
period. Income taxes receivable and payable are measured at the estimated refund from or payment to thetax authorities.
(ii) Deferred Taxes
The Group recognizes deferred taxes using the asset and liability approach for temporary differences
between the amounts of assets and liabilities for accounting purposes and their tax bases. In principle,
deferred tax liabilities are all recognized in taxable temporary differences, and deferred tax assets arerecognized only to the extent it is probable that there will be taxable profits against which deductible
temporary differences, tax losses, etc., may be utilized. Deferred tax assets and liabilities, however, are notrecognized for the following temporary differences:• Taxable temporary differences arising from initial recognition of goodwill;• Temporary differences arising from initial recognition of assets or liabilities in transactions (excluding
business combinations) that do not affect taxable profits (tax losses) in profit or loss for accounting
purposes; and• Taxable temporary differences pertaining to investments in subsidiaries and associates where the timingof the reversal of the temporary differences can be controlled by the Group and it is probable that thetemporary differences will not reverse in the foreseeable future.
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Notes of Consolidated Financial Statements

Deferred tax assets pertaining to deductible temporary differences associated with investments in
subsidiaries and associates are recognized only to the extent that the temporary difference will reverse in theforeseeable future and that it is probable that there will be adequate taxable profits against which benefits
from the temporary difference can be utilized.
Deferred tax assets and liabilities are calculated at the tax rates expected to apply to the period when theassociated deferred tax assets will be realized or the period when the deferred tax liabilities will be settled,based on the tax rates that are in force or substantially in force at the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when the deferred tax assets and liabilities are associated with theincome taxes levied on the same taxable entity, or the equivalent or different taxable entity intended to besettled on a net basis, by the same tax authority.
22) Earnings per Share
Basic quarterly earnings per share are calculated by dividing profit for the quarter attributable to ordinary
shareholders by the weighted-average number of common shares outstanding during the reporting period.
Diluted quarterly earnings per share are calculated through adjustments for the effect of all potentially dilutive
common shares.

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Notes of Consolidated Financial Statements(5) Changes in Presentation(Changes due to the classification of the Elastomers Business as a discontinued operations)
In this fiscal year, the Group has decided to transfer the Eastomers Business to the newly established Japan
Synthetic Rubber Spin-off Preparation Co., Ltd., a subsidiary of the Company, through an absorption-typecompany split, and to transfer all its shares to ENEOS Corporation. The Company concluded a share transfer
agreement with ENEOS Corporation on May 11, 2021.
Accordingly, the Group has classified the Elastomers Business as discontinued operations from the fiscal year
ended March 31, 2022. As a result, the consolidated statement of profit or loss, the consolidated statement ofcash flows and related notes to the consolidated financial statements for the previous fiscal year have been
partially reclassified to conform to the presentation for the current fiscal year.
(6) Significant Accounting Estimates and Judgments Involving Estimates
In the preparation of consolidated financial statements, management is required to make judgments, estimates,
and assumptions.
The estimates and the underlying assumptions are reviewed on an ongoing basis, and the effects of the review
are recognized in the period in which the review was conducted and in future periods.
Actual results may differ from these estimates.
Estimates and judgments that have significant effects on amounts recognized in the Group’s consolidated
financial statements are as follows. These assumptions have been determined based on management’s best
estimates and judgments. However, the assumptions may be affected by results of uncertain changes in
economic conditions in the future and amendment or promulgation of related laws and regulations, and if a
review is necessary, this may have significant effects on amounts recognized in consolidated financial
statements in the following fiscal years.
1) Impairment of Non-Financial Assets
In the calculation of recoverable amount in impairment test, certain assumptions have been made for future
cash flows, discount rate reflecting risks inherent to the asset, long-term growth rate and others. Details of
the method for calculating recoverable amount, etc. are provided in the note “(18) Impairment of NonFinancial Assets.”

2) Recoverability of Deferred Tax Assets
For the recognition of deferred tax assets, the amount is determined, assuming the probability that there
will be taxable profits, by estimating the timing when taxable profits that can be obtained in the future areavailable and the amount of these profits based on the business plan. The relevant content and amount ofdeferred tax assets are provided in the note “(20) Income Taxes.”

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Notes of Consolidated Financial Statements(7) Segment Information
1) Overview of Reportable Segments
JSR Group’s reportable segments are based on its business segments for which separate financial information
is available and which the Board of Directors determines are the basis that are subject to regular reviews for
decisions on the allocation of managerial resources and the evaluation of business results.
The Group has established divisions by product at its head office. Each division formulates comprehensive
domestic and overseas strategies for its products and conducts business activities according to the strategies.
Core Group companies also take the initiative in working out comprehensive domestic and overseas strategies
and conduct business activities according to the strategies. Thus, JSR Group’s businesses consist of businesssegments by product based on divisions and core Group companies.
The Group had four reportable segments: the Digital Solutions Business, which is engaged mainly in the
manufacture and sale of semiconductor materials, display materials, and products related to edge computing;the Life Sciences Business; the Elastomers Business, which is engaged mainly in the manufacture and sale ofgeneral-purpose synthetic rubber products for automobile tires, functional special synthetic rubber for
automobile components, thermoplastic elastomers for modifying plastics, and synthetic rubber latex forcoated paper; and the Plastics Business, which is engaged mainly in the manufacture and sale of ABS andother resins for automobiles, office equipment, and amusement applications.
As of the current fiscal year , the Group has three reportable segments: the Digital Solutions Business, theLife Sciences Business, and the Plastics Business.
This change is the result of JSR’s decision to transfer part of the Eastomers Business to the newly establishedJapan Synthetic Rubber Spin-off Preparation Co., Ltd., a subsidiary of the Company, through an absorptiontype company split, and to transfer all its shares to ENEOS Corporation. With the conclusion of a sharetransfer agreement with
ENEOS Corporation dated May 11, 2021, JSR has classified the Elastomers Business as discontinued
operations. The part of the Elastomers Business not transfered to Japan Synthetic Rubber Spin-off
Preparation Co., Ltd. has been reclassified to the Other segment because of the decrease
in its monetary importance.
The Digital Solutions Business is a reportable segment comprising multiple segments based on the nature of
the products and services, the nature of production processes, and similarity in markets and other economic
characteristics.
The accounting methods for reportable segments are the same as the methods adopted for the preparation of
consolidated financial statements.
The Group has classified the Elastomers Business as discontinued operations from the current fiscal year, andsegment information presents only amounts for continuing operations excluding the Elastomers Business.

Main Products in Each Business Segment
Business segments

Main productsLife Sciences
Business<Semiconductor Materials> Lithography materials (photoresists, multilayer materials);mounting materials; Cleaning Solution; CMP materials; etc.
<Display Materials> Materials for color LCDs; functional coating materials; etc.
<Edge Computing Materials> Heat-resistant transparent resins and functional films; photofabrication and photo molding systems; etc.
Diagnostic and research reagents and similar materials; bio-process materials; drug
discovery and development services, etc.

Plastics Business

Synthetic resins including ABS resins, AES resins, AS resins, and ASA resins

Digital Solutions
Business－

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Notes of Consolidated Financial Statements

2) Segment Revenues, Profits or Losses, Assets and Other Material Items
The following information pertains to the Group’s reportable segments.
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)(Millions of yen)
The Reportable Segment
DigitalLife Sciences
Solutions

Other[Note 1]

Plastics

Total

AmountRecorded in
AdjustmenthetConsolidated[Note 2]Financial
Statements

Revenue fromexternal customers

151,420

55,197

79,123

26,259311,9990

312,000

Segment profit (loss)(core operating
profit)[Note 3]

34,568

3,510

4,430

1,627

44,13537,902

Segment assets

164,777

158,393

76,56910,778410,516(6,233)

262,256

672,773

7,525

6,236

2,631

748

17,1401,934

19,074

1,408

940

13,542

18,566

Other items
Depreciation andamortization
Impairment losses
Capitalexpenditures

2,348
3,511

645

36,264

2,348
3,923

40,188Note 1: The Other segment is a business segment not contained in the reportable segments. It includes thepurchase and sale of chemicals and other businesses.
Note 2: The segment profit (loss)downward adjustment of ¥(6,233) million contains company-wide profits andlosses not allocated to the reportable segments. The adjustment amounts in the segment assets line arecorporate assets not allocated to any reportable segment. Corporate assets mainly include investment of
surplus funds (deposits, cash equivalents, and securities (debt instrument assets)) and longterm
investment funds (securities (equity instrument assets)) by the parent company.
Note 3: The segment profit (loss) is presented as core operating profit after deducting non-recurring profit (loss)
arising from business restructuring and other non-recurring factors from operating profit.

－

23

－

JSR Corporation Annual Report 2022

23

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)

Adjustment[Note 2]

AmountRecorded intheConsolidated
Financial
Statements

The Reportable Segment
DigitalLife Sciences
Solutions
Revenue from external

Other[Note 1]

Plastics

Total

165,030

72,45290,606

12,910340,9970340,997

39,002

3,168

5,323

987

48,48043,306

241,824

210,371

75,996

11,528539,719(5,174)

269,652

809,371

9,394

8,021

2,753

627

20,795

1,687

22,482

Impairment losses

3,228

－

－

－

3,228

－

3,228

Capital expenditures

17,192

19,6922,816

260

39,9601,891

41,851

customers

Segment profit (loss)(core operating profit)[Note 3]
Segment assets
Other items
Depreciation andamortization

Note 1: The Other segment is a business segment not contained in the reportable segments. It includes the purchaseand sale of chemicals and other businesses.
Note 2: The segment profit (loss) downward adjustment of ¥(5,174) million contains company-wide profits andlosses not allocated to the reportable segments. The adjustment amounts in the segment assets line are asset
from corporation and discontinued operation not allocated to any reportable segment. Corporate assets
mainly include investment of surplus funds (deposits, cash equivalents, and securities (debt instrument
assets)) and longterm investment funds (securities (equity instrument assets)) by the parent company.
Note 3: The segment profit (loss) is presented as core operating profit after deducting non-recurring profit (loss)
arising from business restructuring and other non-recurring factors from operating profit.

－

24

－

JSR Corporation Annual Report 2022

24

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Thousands of U.S. dollars)
Adjustment[Note 2]

AmountRecorded intheConsolidated
Financial
Statements

2,786,154

0

2,786,154

8,063

396,110(42,272)

353,838

620,936

94,194

4,409,830

2,203,218

6,613,048

65,53522,493

5,123

169,906

13,782

183,688

26,379---26,379-26,379140,468

160,896

23,0082,125

326,497

15,454

341,950

The Reportable Segment
Other[Note 1]

Total

740,305

105,480

25,88643,492

1,975,844

1,718,856

Depreciation andamortization

76,756

Impairment losses
Capitalexpenditures

DigitalLife Sciences
Solutions

Plastics

Revenue fromexternal customers

1,348,395

591,973

Segment profit (loss)(core operating profit)[Note 3]

318,668

Segment assets
Other items

Note 1: The Other segment is a business segment not contained in the reportable segments. It includes the purchaseand sale of chemicals and other businesses.
Note 2: The segment profit (loss) downward adjustment of $(42,272) thousand contains company-wide profits andlosses not allocated to the reportable segments. The adjustment amounts in the segment assets line are asset
from corporation and discontinued operation not allocated to any reportable segment. Corporate assets
mainly include investment of surplus funds (deposits, cash equivalents, and securities (debt instrument
assets)) and longterm investment funds (securities (equity instrument assets)) by the parent company.
Note 3: The segment profit (loss) is presented as core operating profit after deducting non-recurring profit (loss)
arising from business restructuring and other non-recurring factors from operating profit.

－

25

－

JSR Corporation Annual Report 2022

25

Notes of Consolidated Financial Statements

Adjustments to reconcile segment profit to profit before tax are as follows.
Fiscal year ended March 31,
2021(April 1, 2020 to March 31,
2021)

Fiscal year ended March 31,
2022(April 1, 2021 to March 31,
2022)

Fiscal year ended March 31,
2022(April 1, 2021 to March 31,
2022)

Millions of yen

Millions of yen

Thousands of U.S. dollars

37,90243,306353,838-

1,348

11,010

-

332

2,711

(3,508)--(1,411)(11,531)

-

-

-

186

1,518

Operating profit

34,233

43,760357,546

Finance income

822

3,415

27,904(1,744)(1,655)(13,518)

Segment profit
Reversal of impairment
loss
Profit from sales of sharesof affiliated companies
Business restructuring
expenses
Loss on valuation of-

investments in subsidiaries
Special retirement benefits
OthersFinance costs
Profit before tax(160)

33,310－45,521

26

371,931－
JSR Corporation Annual Report 2022

26

Notes of Consolidated Financial Statements

3) Information on Products and Services
Information on products and services is stated on “1) Overview of reportable segments.”
4) Information by Region
The following is a breakdown of revenue and non-current assets by region.
Revenue from External Customers
Fiscal year ended March 31,
2021

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Japan
China
U.S.
Other regions
Total

108,248
55,459110,688
65,757904,385
537,270

55,21393,07961,253103,300

500,473844,026

312,000

340,997

2,786,154

Note: Revenue is divided into countries or regions based on the locations of customers.

Property, Plant and Equipment

Japan
U.S.
Other regions
Total

As of March 31, 2021

As of March 31, 2022

As of March 31, 2022

Millions of yen

Millions of yen

Thousands of
U.S. dollars

92,71840,319660,702453,405

80,86355,49237,391

23,183

189,419

170,428

159,539

1,303,527

Note: We confine items presented to property, plant and equipment considering cost of the preparation.

5) Information on Major Customers
Information on major customers is omitted, since no single external customer accounts for more than 10 percentof the Group’s revenue in terms of revenue through transactions with a single external customer.

－ - 27 -－JSR Corporation Annual Report 2022

27

Notes of Consolidated Financial Statements(8) Business Combination and Acquisition of Non-controlling Interest
1) Business Combination
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
Not Applicable
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Wholly Owned Subsidiary through Acquisition of Shares of Inpria Corporation)(1) Outline of the Business Combination
On October 29, 2021, the Company acquired an additional 78.7% stake in Inpria Corporation(Location: Oregon, USA; CEO: Andrew Grenville, “Inpria”) which develops and manufactures metal
based EUV resists, making it a wholly owned subsidiary of the Company.
① Name and Business of the Acquired Company
Name

Inpria Corporation

Business
Development and manufacturing of metal based EUV resists② Date of Acquisition
October 29, 2021
③ Percentage of Voting Rights Acquired
Percentage of Voting Rights Held Immediately before the Date of Acquisition 21.3%
Percentage of Voting Rights Additionally Acquired on the Date of Acquisition 78.7%
Percentage of Voting Rights at Date of Acquisition④ Method of Acquiring Control

100.0%

Acquisition of Shares for Cash
⑤ Purpose of Business Combination
Inpria has been working on the development of metal based EUV resists since its establishment in 2007.
Its main product, which is composed primarily of tin oxide, has achieved the world's highest resolution
using EUV exposure systems. In addition, the metal-based resist is superior to conventional resists interms of pattern transfer performance during dry etching and is highly suitable for semiconductor mass
production processes. With the completion of this acquisition, JSR will add metal resists, a promising
future technology, to its photoresist product portfolio, which is one of its strengths, and aims toseamlessly provide value as an advanced materials company that supports the further shrinking in thetechnologies of its customers.
(2) Fair value of Consideration Paid, Assets Acquired, and Liabilities Assumed at the Date of Acquisition

Fair value of equity interests held immediately prior to the acquisition
date
Cash
Total Fair value of consideration paid
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Non-current assets
Property, plant and equipment
Other intangible assets *Other non-current assets
Acquired assets－ - 28 -－AmountAmountMillions of yen

Thousands of
U.S. dollars

9,447

77,18846,654
56,101

381,191
458,379

1,043
151
151

8,521
1,237
1,233

357
8,218
9
9,929

2,915
67,14971
81,126JSR Corporation Annual Report 2022

28

Notes of Consolidated Financial Statements

Current liabilities
Trade and other payables
Other current liabilities
Non-current liabilities
Deferred tax liabilities
Other non-current liabilities
Total liabilities assumed

572
76

4,674
624

2,219
9
2,877

18,13075
23,503

Goodwill

49,049400,756*The item allocated to other intangible assets are technology assets of ¥8,218 million ($67,149
thousand). The fair value of the intangible assets were calculated using the excess earnings method
valuation model. Measurements with the valuation model are based on such assumptions as future sales
and technology obsolescence rates.
As of March 31, 2022, the allocation of the purchase price, for the amount of goodwill incurred and theamounts of assets acquired and liabilities assumed on the date of the business combination, wascompleted because the identifiable assets and liabilities on the date of the business combination wereidentified.
The valuation gain recognized as a result of the remeasurement of equity interests held by theCompany immediately prior to the date of acquisition at its fair value on the date of acquisition ofcontrol was ¥7,467 million ($61,012 thousand) and is accounted for in the “Other operating income”
line item in the consolidated statement of profit or loss. Acquisition-related costs pertaining to thebusiness combination were ¥123 million ($997 thousand). The amount incurred in the fiscal year ended
March 31, 2022 is accounted for as an expense in the “Selling, general and administrative expenses”
line item in the consolidated statement of profit or loss.
Goodwill is primarily composed of expected future earning power. The goodwill cannot be reported
as a deductible for tax purposes.

(3) Effect of Business Combination on Cash Flows

Cash and cash equivalents paid for the acquisition
Cash and cash equivalents held by the acquired company at the time ofacquisition
Purchase of shares of subsidiaries resulting in change in scope of
consolidation

AmountAmountMillions of yen

Thousands of
U.S. dollars

46,654

381,191

1,043

8,521

45,611

372,669(4) Impact on the Group's Performance
The impact on revenue and profit arising from Inpria included in the consolidated statement of profit
or loss and the impact on revenue and profit assuming that the business combination was carried out atthe beginning of the current fiscal year is insignificant.

－- 29 - －JSR Corporation Annual Report 2022

29

Notes of Consolidated Financial Statements2) Acquisition of Non-controlling Interest
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
From October 28, 2020 till January 15, 2021 to improve the enterprise value, the Group additionallyacquired 40.18% shares in MEDICAL & BIOLOGICAL LABORATORIES CO., LTD. from noncontrolling-interest shareholders hold, and as a result, the voting rights ratio increased to 100% from50.82%.
As the consideration for additionall acquisition, the cash of ¥ 11,415 million was paid to the noncontrolling-interest shareholders, and the group accounted for ¥ 6,398 million as the decreasing capitalsurplus ,which is the difference between the consideration for the additional acquisition and ¥ 5,016
million which is the total amount of Non-controlling interest reduced because of the additional acquisition
and the exchange differences on translation of foreign operations.
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Not Applicable(9) Cash and Cash Equivalents
Cash and cash equivalents for each fiscal year are as follows.
Cash and cash equivalents comprise cash, short-term deposits (not later than three months) and short-term
investments (e.g. securities redeemable not later than three months from the date of acquisition).
Cash and cash equivalents on the indicated dates consisted of the following items.
The total amount of cash and cash equivalents corresponds to cash and cash equivalents at the end of the period
in the consolidated statement of cash flows.

Cash and cash
equivalents
Cash and deposit
Short-term investment
Total

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Thousands of
U.S. dollars

73,372
12,00545,563
4372,27536

85,37745,567372,312(10) Trade and Other Receivables
Trade and other receivables are classified as financial assets measured at amortized cost.
Trade and other receivables include the following items.

－

30

－

JSR Corporation Annual Report 2022

30

Notes of Consolidated Financial Statements

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Trade receivables
Notes and account receivabletrade
Other receivables
Account receivables-other
Other
Total

108,615

68,674561,111

16,410267
125,292

7,158
274
76,10658,4852,239
621,836

JSR Corporation Annual Report 2022

31

Notes of Consolidated Financial Statements(11) Other financial assets
1) Breakdown of Other financial assets
The breakdown of other financial assets is as follows:
As of March 31,
2021

As of March 31,
2022

Millions of yen

Millions of yen

As of March 31,
2022

1

-

Thousands of U.S.
dollars-

Investments (equity financial assets)

46,18630,269247,319

Term deposits

1,412

1,060

Other

4,086

1,366

8,664
11,164

51,68432,696

267,148

1,933
49,751

1,289
31,408

10,529256,619

51,68432,696

267,148

Derivative asset

Total
Current assets
Non-current assets
Total

Derivative assets are classified as financial assets measured at fair value through profit or loss. Investments(equity financial assets) are classified as financial assets measured at fair value through other comprehensive
income, or those through profit or loss. Time deposits are classified as financial assets measured at amortized
cost.
2) Financial Assets Measured at Fair Value through Other Comprehensive Income
Major stocks classified as financial assets measured at fair value through other comprehensive income and theirfair values are as follows:

Name of Stock

As of March 31, 2021

As of March 31, 2022

As of March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Carbon, Inc.

5,230

5,782

47,245

Optorun Co., Ltd.

6,336

4,863

39,730Cambridge Quantum Computing

3,060

3,382

27,637

Vedanta Biosciences Inc

1,882

2,724

22,260

2,597

2,146

17,530BRIDGESTONE Corporation

8,856

-

-

Mitsubishi Chemical Holdings
Corporation

1,330

-

-

835

-

-

Other

12,254

9,598

78,421

Total

42,38028,495

232,821OSAKA ORGANIC CHEMICALINDUSTRY LTD.

Tosoh Corporation

Amounts of dividends received recognized related to financial assets measured at fair value through othercomprehensive income are as follows:

－

32 －

JSR Corporation Annual Report 2022

32

Notes of Consolidated Financial Statements

Dividends received

Fiscal year ended March 31,
2021

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

701

－

1,232

10,06933 －JSR Corporation Annual Report 2022

33

Notes of Consolidated Financial Statements

3) Derecognition of Financial Assets Measured at Fair Value through Other Comprehensive Income
The Group has derecognized certain financial assets measured at fair value through other comprehensive income
by disposing of such assets for the purpose of improving the asset efficiency. Fair value and accumulated gains
or losses (net of tax) recognized as other comprehensive income at the time of disposal in each fiscal year are as
follows:
Fiscal year ended March 31, 2021

Fiscal year ended March 31,2022

Fiscal year ended March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Fair Value

Accumulated
gains or losses

2,016

Fair Value

808

Accumulated
gains or losses

17,203

7,523

Fair Value
140,560

Accumulated
gains or losses
61,464For financial assets measured at fair value through other comprehensive income, accumulated gains or losses
recognized as other comprehensive income are transferred to retained earnings when the assets are derecognized.

(12) Inventories
Inventories consist of the following items.

Finished goods and merchandiseWork in process
Raw materials and supplies
Total

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Thousands of
U.S. dollars

61,39460,669

3,156

2,233

495,699
18,24740,312

42,032

343,428

104,862

104,934

857,374

The amount of valuation losses on inventories recognized as expenses is not applicable in the previous fiscal year.
There was 814 million ($6,655 thousand) as of March 31, 2022. The write-off amount is included in “cost of sales”
in the consolidated statement of profit or loss.
The amount included in cost of sales was ¥172,554 million as of March 31, 2021 and ¥178,766 million($1,460,629 thousand) as of March 31, 2022.

－

34 －

JSR Corporation Annual Report 2022

34

Notes of Consolidated Financial Statements(13) Notes on Disposal Groups Classified as Held for Sale and Discontinued Operations
The Group classifies as discontinued operations those business segments that have been disposed of or areclassified as held for sale.
1) Disposal Groups Classified as Held for Sale
(The Separation of the Elastomers Business and Transfer of Shares to the Successor Company)
At the Board of Directors meeting held on May 11, 2021, the Company decided to transfer the Eastomers
Business to the newly established Japan Synthetic Rubber Spin-off Preparation Co., Ltd., a subsidiary of theCompany, through an absorption-type company split, and to transfer all its shares to ENEOS Corporation.
The Company concluded a share transfer agreement with ENEOS Corporation on the same date. The sharetransfer was executed as scheduled on April 1, 2022.
As a result of the transfer decision, the assets and liabilities of the Elastomers Business have been classified
as disposal groups classified as held for sale and the Elastomers Business has been classified as discontinued
operations from the fiscal year ended March 31, 2022.
The following are the assets and liabilities related to disposal groups classified as held for sale.
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Fiscal year ended
March 31, 2022
Thousands of U.S.
dollars

Assets associated with disposalgroups classified as held for sale
Cash and cash equivalents-

16,424

134,193

Trade and other receivables-

66,318541,862

Inventories-

50,115

409,474

Other financial assets (Current)

-

364

2,976

Other current assets

-

3,145

25,698Property, plant and equipment-

46,466379,655

Other intangible assets

-

1,740

14,214-

1,528

12,484-3,920

32,027

Other non-current assets

-

70

568

Deferred tax assets

-

1,208

9,873

Total assets-

191,298

1,563,022

Trade and other payables-

51,238418,644

Bonds and borrowings (Current)-

21,500175,670

Income taxes payable

-

333

2,720

Other financial
liabilities (Current)

-

807

6,597

Investments accounted for using
equity method
Other financial assets (Noncurrent)

Liabilities associated with disposalgroups classified as held for sale

－

35

－

JSR Corporation Annual Report 2022

35

Notes of Consolidated Financial Statements

Other current liabilities

-

2,115

17,277

Bonds and borrowings (NonCurrent)-

28,838

235,626

Retirement benefit liability

-

5,765

47,101Other financial liabilities(Non-Current)

-

4,336

35,430

Other non-current liabilities

-

644

5,258

Deferred tax liabilities

-

0

2

Total liabilities-

115,576

944,325*Other components of equity related to the assets and liabilities associated with the disposal group held forsale at the end of the current fiscal year were ¥669 million ($ 5,466 thousand), net of tax.
2)Discontinued Operations
As described in “1) Disposal Groups Classified as Held for Sale”, the Elastomer Business is classified as
discontinued operations.

(i) Profit or Loss from Discontinued Operations
The following are the profit or loss from discontinued operations.
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Revenue
Cost of sales and expenses
Profit (loss) before tax from discontinued
operations
Income tax expenses
Profit (loss) from discontinued operations

Fiscal year ended
March 31, 2022

134,609(230,350)

189,318(185,947)

Thousands of U.S.
dollars
1,546,842
1,519,301(95,740)

3,371

27,541

15,890(79,851)(1,082)
2,289(8,838)18,703

Cost of sales and expenses for the current fiscal year include a loss of ¥1,495 million ($12,213 thousand) that wasrecognized by measuring the assets or disposal groups comprising discontinued operations at fair value less costs tosell. The fair value is calculated primarily on the basis of the business value to be transferred. The fair value
hierarchy is classified as Level 3.
For basic and diluted earnings (loss) per share related to discontinued operations, please refer to the consolidated
statement of profit or loss.
(ii) Cash Flows Arising from Discontinued Operations
The following are cash flows from discontinued operations.
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S.

－

36

－

JSR Corporation Annual Report 2022

36

Notes of Consolidated Financial Statements(ii) Cash Flows Arising from Discontinued Operations
The following are cash flows from discontinued operations.
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Cash flows from operating activities

21,42912,261

100,178

Cash flows from investing activities(15,054)

8,088

66,087

Cash flows from financing activities
Effect of exchange rate changes oncash and cash equivalents
Total(6,006)

1,205

9,846

(460)

1,107

9,047

(90)

22,661

185,157

Note: Cash flows from investing activities in the previous fiscal year involve expenditures (cash and cash
equivalents of the disposed subsidiary) ¥(1,176) million due to the sale of shares of the subsidiary
accompanying a change in the scope of consolidation.

(14) Other Assets
The breakdown of other assets is as shown below.

Other current assets
Excise tax receivable
Income taxes receivable
Prepaid expenses
Other
Total
Other non-current assets
Long-term prepaid expenses
Other
Total

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

4,276
2,044
3,509
1,987

9,154
2,357
2,237
4,059

74,795
19,25918,27733,165

11,81517,807

145,496

41
3,557

182
2,648

1,488
21,632

3,598

2,830

23,120－37－

JSR Corporation Annual Report 2022

37

Notes of Consolidated Financial Statements(15) Property, Plant and Equipment
Changes in carrying amounts and the balance of acquisition costs and accumulated depreciation of property, plantand equipment are as follows. For information on impairment losses, see “(18) Impairment on Non-financial
Assets.”Changes in carrying amounts(Millions of yen)

Buildings
andstructures

MachineryandvehiclesTools,
fixturesandfittings

April 1, 2020

60,481

71,763

11,99920,27550,999147

Acquisition

8,644

2,670

1,310

44

39,67096

52,434

Depreciation(7,322)(14,349)(4,731)

(243)

-

(29)

(26,675)

Impairment loss

(17,655)(102)(52,226)(298)(2,241)
(89)

0

(988)
(221)

1

(73,110)(709)

21,58540,6483,790

291(66,177)

(137)

-

2,043

3,276

195

64

1,839

(9)

7,408

Sales and disposals
Transfer
Exchange differences offoreign operations

Land

Constructionin progress

Other

Total

215,664

625

(290)

(111)

(1,081)(3,780)52(4,585)

March 31, 2021

68,29951,194

10,122

19,35021,342

120

170,428

Acquisition

3,891

5,023

1,260

98

32,381

128

42,782

-

364

40

-

-

-

405

Depreciation(7,593)(8,160)(3,985)

(131)

-

-

(19,869)

Impairment loss

(1,248)(2,047)

(60)

-

(44)

-

(3,400)

1,422

1,199

58

-

19

1

2,699

Other

Acquisition by businesscombination

Reversal of impairment
lossesSales and disposals

(76)

(817)

(125)

-

-

(32)

(1,050)Transfer

6,400

10,405

4,236-(20,971)(71)-(13,764)(24,671)(1,994)(4,485)(1,532)(21)(46,466)

4,458

4,056

406

266

2,775

10

11,970Assets associated withdisposal group classified asheld for saleExchange differences offoreign operations
Other

2,593

(27)

(10)

-

(517)

-

2,040

March 31, 2022

64,38336,521

9,948

15,09833,452

135

159,539(Thousands of U.S. dollars)
Machinery andvehiclesTools,
fixturesand fittings

Land

558,043

418,288

82,705

158,103

31,79541,044

10,297

803

-

2,977

331

-

(62,040)(66,670)(32,563)(10,200)(16,726)

11,6219,800

Buildings andstructures
March 31,2021
Acquisition

Construct
ion inprogress

Other

Total

981

1,392,497

1,047

349,555

-

-

3,307

(1,071)--(162,344)

(493)

-

(361)

-

(27,780)

473

-

154

7

22,055

174,37
6
264,56
9

Acquisition
by businesscombination
Depreciation
Impairment
loss
Reversal of
impairment
losses－38－

JSR Corporation Annual Report 2022

38

Notes of Consolidated Financial Statements

Sales anddisposals
Transfer

529,219(6,672)60,749

-

1

(263)

(8,578)52,29385,01534,613-(171,344
)

(577)

0

(112,458)(201,574)(16,290)(36,648)(12,516)(169)(379,655)

36,42733,136

3,315

2,176

22,67379

97,804

21,189

(217)

(80)

(0)

(4,226)

0

16,667526,050

298,40281,283

123,363

273,325

1,104

1,303,527

Assetsassociatedwith disposal
groupclassified asheld for saleExchangedifferences offoreign
operations
Other

March 31,
2022

－

39 －

JSR Corporation Annual Report 2022

39

Notes of Consolidated Financial Statements

Acquisition Cost

(Millions of yen)

Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

March 31, 2021

194,226

409,383

70,942

March 31, 2022

140,435

160,389

61,969Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

1,147,442

1,310,473

506,327

138,151

March 31, 2022

Constructionin progress

Other

Total

21,176

21,342

199

717,267

16,90833,452

135

413,289(Thousands of U.S. dollars)
Constructionin progress

Other

Total

273,325

1,104

3,376,823

Accumulated Depreciation and Impairment(Millions of yen)

Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

March 31, 2021

125,927

358,188

60,819March 31, 2022

76,052

123,867

52,021

Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

621,392

1,012,071

425,044

14,788March 31, 2022

Constructionin progress

Other

Total

1,825

0

79

546,839

1,810

-

-

253,751(Thousands of U.S. dollars)
Constructionin progress
-

Other

Total
-

2,073,296(Note) 1. Depreciation expenses of property, plant and equipment are recorded as “inventories” in the consolidated statement offinancial position, or “cost of sales”, “selling, general and administrative expenses” and “Profit (loss) from discontinued
operations” in the consolidated statement of profit or loss.
2. Impairment loss is recorded as “other operating expenses” and “Profit (loss) from discontinued operations” in the
consolidated statement of profit or loss.
3. The reversal of impairment losses is included in "Other operating income " and " Profit (loss) from discontinued
operations" in the consolidated statement of profit or loss.
4. “Other” in the changes of carrying amounts includes transfer to/from “inventories” in the consolidated statement offinancial position, or “cost of sales” and “selling, general and administrative expenses” in the consolidated statement of
profit or loss.
5. Amounts of property, plant and equipment pledged as collateral for liabilities are stated in “(21) Borrowings and bonds (including Other financial liabilities).”
6. Right-of-use asset included in carrying amounts of property, plant and equipment is stated in “(16) Lease.”

－

40

－

JSR Corporation Annual Report 2022

40

Notes of Consolidated Financial Statements(16) Leases
The Group leases Offices, Production equipment, Company cars, Land and Other assets as the lessee.
Certain lease contracts include an extension option. No significant restrictions are imposed by lease
contracts, such as restrictions regarding additional borrowings or leases.
1) Right-of-use Asset
Carrying amount of right-of-use assets and the breakdown of depreciation expenses are as follows:

Fiscal year ended March 31, 2021 (from April1, 2020 to March 31, 2021)(Millions of yen)
Buildings andstructures

Machinery

Tools, fixturesand vehicles

and fittings

Land

Total

Carrying amount

17,000

943

29

1,056

19,028Depreciation(3,154)

(425)

(22)

(243)

(3,844)(Note) 1. Increase amount of right-of-use asset is ¥8,165 million.
2. Depreciation of right-of-use assets is included in "Inventories" in the consolidated statement of the financial position or"Cost of sales," "Selling, general and administrative expenses" and "Profit (loss) from discontinued operations" in the
consolidated statement of profit or loss.

Fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)(Millions of yen)
Buildings andstructures

Machinery

Tools, fixturesand vehicles

and fittings

Land

Total

Carrying amount

17,704

2,016

60

79

19,859Depreciation(3,497)

(118)

(5)

(88)

(3,708)(Note) 1. Increase amount of right-of-use asset is ¥ 2,405 million.
2. Depreciation of right-of-use assets is included in "Inventories" in the consolidated statement of the financial positionor "Cost of sales" and "Selling, general and administrative expenses" in the consolidated statement of profit or loss.

(Thousands of U.S. dollars)
Buildings andstructures

Machinery

Tools, fixturesand vehicles

and fittings

Land

Total

Carrying amount

144,655

16,470488

647

162,260

Depreciation(28,576)

(963)

(42)

(715)

(30,296)(Note) 1. Increase amount of right-of-use asset is $19,648 thousand.
2. Depreciation of right-of-use assets is included in "Inventories" in the consolidated statement of financial position or“Cost of sales" and "Selling, general and administrative expenses" in the consolidated statement of profit or loss.

－

41

－

JSR Corporation Annual Report 2022

41

Notes of Consolidated Financial Statements

2) Finance Costs Related to Lease
Finance costs related to leases are as follows:
Fiscal year ended March 31, 2021(from April 1, 2020 to March 31, 2021)
Millions of yen
Finance costs related to leases

537

Expenses relating to short-term leases

246

Expenditures relating to leases of low-value assets

570

Variable lease payments

40
3,264

The amount of cash outflow related to leases

Fiscal year ended March 31, 2022(from April 1, 2021 to March 31, 2022)
Thousands of U.S.
dollars

Millions of yen
Finance costs related to leases

631

5,158

Expenses relating to short-term leases

401

3,274

Expenditures relating to leases of low-value assets

542

4,425

Variable lease payments

34

278

4,348

35,524

The amount of cash outflow related to leases(Note) 1. Finance costs related to leases are included in "Finance costs" and "Profit (loss) from discontinued operations" inthe consolidated statement of profit or loss.
2. Expenses relating to short-term leases, expenditures relating to leases of low-value assets and variable lease payments
are included in "Cost of sales,""Selling, general and administrative expenses" and "Profit (loss) from discontinued operations" in the consolidated
statement of profit or loss.
3. The amounts of cash outflow related to leases are included in “Repayments of lease liabilities” which include cash
flows from discontinued operations in the consolidated statement of cash flow.

For the information on Maturity analysis for lease liabilities, see “(35) Financial Instruments, 2) Financial
Risks, (iii) Liquidity Risks.”

－

42

－

JSR Corporation Annual Report 2022

42

Notes of Consolidated Financial Statements(17) Goodwill and Other Intangible Assets
Changes in carrying amounts and the balance of acquisition costs and accumulated amortization of goodwill andother intangible assets are as follows. For information of impairment losses, see “(18) Impairment on Nonfinancial Assets.”
Changes in Carrying Amounts(Millions of yen)
Other intangible asset

Goodwill

Software

Other

Total

April 1, 2020
Acquisition

58,283
-

7,220
8,259

8,671
309

15,891
8,567

Amortization
Impairment loss

(688)

(1,334)(3,908)(1,468)(1,869)(2,802)(5,777)

-

(4)
(480)

(201)
480

(205)
-

1,039

59

283

343

Sales and disposals
Transfer to other property, plantand equipment
Exchange differences of foreign
operations
Other

-

(1,056)53(1,003)58,633
-

8,755
5,335

6,258
540

15,014
5,875

50,172

1

8,646

8,646

Amortization-(1,245)(1,273)(2,518)

Impairment loss
Reversal of impairment losses-(2,250)84

34(2,250)118

Sales and disposals

-

(58)

(2)

(60)

-

9

(9)

-

-

(742)

(998)

(1,740)

8,835

129

794

923

March 31, 2021
Acquisition
Acquisition by businesscombination

Transfer to other property, plantand equipment
Assets associated with disposalgroup classified as held for saleExchange differences of foreign
operations
Other
March 31, 2022

-

288

274

562

117,640

10,307

14,264

24,571(Thousands of U.S. dollars)
Other intangible asset
Goodwill
March 31, 2021
Acquisition
Acquisition by businesscombination
Amortization
Impairment loss
Reversal of impairment losses
Sales and disposals
Transfer to other property, plantand equipment
Assets associated with disposalgroup classified as held for sale

Software

Other

Total

479,069-

71,53743,594

51,135
4,412

122,673
48,006

409,936

6

70,64070,646-(10,174)(10,398)(20,571)-(18,383)-(18,383)

-

690
(476)

275
(18)

966
(494)

-

72

(72)

-

-

(6,062)(8,151)(14,214)－43－

JSR Corporation Annual Report 2022

43

Notes of Consolidated Financial Statements

Exchange differences of foreign

72,185

1,055

6,487

7,542

961,190

2,356
84,217

2,236
116,546

4,592
200,763

operations
Other
March 31, 2022

Acquisition Cost

(Millions of yen)
Other intangible asset

Goodwill
March 31, 2021
March 31, 2022

Software

58,633
117,640

Other

30,99930,123

Total
27,61533,45258,61463,574(Thousands of U.S. dollars)
Other intangible asset

Goodwill
March 31, 2022

Software961,190

246,119

Other

Total

273,322

Accumulated Amortization and Impairment(Millions of yen)
Other intangible asset

Goodwill
March 31, 2021
March 31, 2022

519,441

Software-Other

22,243
19,815

Total
21,357
19,18843,60039,003(Thousands of U.S. dollars)
Other intangible asset

Goodwill
March 31, 2022

Software-161,902

Other

Total

156,776

318,678(Note) 1. Amortization expenses of other intangible assets are recorded as “cost of sales”, “selling, general and administrative
expenses” and “profit (loss) from discontinued operations” in the consolidated statement of profit or loss.
2. Impairment losses are included in “Other operating expenses” and “profit (loss) from discontinued operations” in the
consolidated statement of profit or loss.
3. The reversal of impairment losses is included in "Other operating income " and "Net profit (loss) from discontinued
operations" in the consolidated statement of profit or loss.
4. “Other” in the changes of carrying amounts includes transfer to from “cost of sales” and “selling, general andadministrative expenses” in the consolidated statement of profit or loss.

－

44

－

JSR Corporation Annual Report 2022

44

Notes of Consolidated Financial Statements(18) Impairment on Non-Financial Assets
1) Impairment Losses on Property, Plant and Equipment and Intangible Assets Other Than Goodwill
Impairment losses in the fiscal years ended March 31, 2021 and 2022 are as follows:

Property, plant and equipment
Buildings and structures
Machinery and vehicles
Tools, fixtures and fittings
Subtotal
Goodwill and other intangible
asset
Goodwill
Software
Other
Subtotal
Total

Fiscal year ended March 31,
2021
Millions of yen

Fiscal year ended March 31,
2022
Millions of yen

Fiscal year ended March 31,
2022
Thousands of U.S. dollars

1,202
360
32
1,595

1,236
1,934
59
3,228

10,09815,799482
26,379

688
9
56
754
2,348

-

-

3,228

26,379In the previous fiscal year, as part of the business restructuring program, the Company reduced the carrying
amount to the recoverable amount for assets of some operations of the Display Materials Business and the Life
Sciences Business for which the investment amount became unlikely to be recovered. The reduction amounts of¥1,408 million and ¥940 million were recorded as impairment losses under “Other operating expenses.”In the current fiscal year, the carrying amount of assets for which recovery of the investment amount cannot be
expected due to the delay in the start-up of the U.S. plant in the cleaning solutions business was reduced to therecoverable amount (value in use), and ¥3,228 million ($26,379 thousand) was recorded as an impairment loss in"Other operating expenses."
Impairment losses on the non-financial assets of the Elastomer Business recorded in the previous fiscal year(¥77,227 million) and the current fiscal year (¥2,421 million) ($19,785 thousand) have been reclassified to Profit(loss) from discontinued operations.

－

45

－

JSR Corporation Annual Report 2022

45

Notes of Consolidated Financial Statements

2) Reversal of impairment losses
In the current fiscal year, among business assets for which impairment losses wererecognized in previous years in the Display Materials Business, the carrying amount of assets that are
expected to be sold has been reversed to their recoverable amount, and the reversal of impairment
losses (¥1,348 million) ($11,010 thousand) of ¥1,109 million ($9,063 thousand) for Buildings andstructures,¥212 million ($1,734 thousand) for Machinery and vehicles, ¥16 million ($130 thousand) for
tools, fixtures and fittings, and ¥10 million ($84 thousand) for software has been recorded. The
reversal of the impairment loss is included in "Other operating income" in the consolidated
statement of profit or loss.
Recoverable value of Display Materials Business is measured at fair value less costs of disposal. The
fair value is calculated based on the sale price to a third party. The fair value hierarchy is classified as
Level 3.
3) Impairment Test on Goodwill
The goodwill listed on the consolidated statement of financial position is mainly the goodwill related
to drug discovery and development service that happened in the 2018 acquisition of Crown
Bioscience International, and the goodwill related to development and manufacture of Metal resistsfor EUV that happened in this fiscal year acquisition of Inpria Corporation. The carrying amount of
goodwill allocated to cash-generating units (or groups of cash-generating units) is as follows:
Cash-generating units(groups of cash-generating units)

Segment

Plastics
business
Life Sciencesbusiness

DigitalSolutions
Business
Total

As of March 31,
2021

As of March
31, 2022

As of March 31,
2022

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

Plastics

2,598

2,598

21,231In-vitro Diagnostics andResearch Reagents

3,641

3,641

29,751

Contract Development andManufacturing for
Biomedicine

5,213

5,763

47,086

9,528

9,864

80,59236,82342,042

343,507-44,208361,209-

8,694

71,034

830

830

6,782

117,640

961,192

Contract of the Services forDevelopment and Generationof Cell-lines
Drug Discovery andDevelopment Services
Metal based EUV resists
Lithography Materials
Other

58,633Of the above goodwill, major goodwill was tested for impairment as follows. The recoverable amount
was measured as the higher of the value in use or the fair value less costs of disposal.
The value in use was calculated by reflecting the external information such as past experience andmarket growth rate which each cash-generating unit or cash-generating unit groups belong to andinternal information such as equipment capacity, and it was discounting the estimated amount of cash
flows to the present value based on the plan approved by management.
A terminal growth rate used for impairment test of major goodwill, pre-tax discount rate and term toestimate cash flows are as below.

－ 46 －JSR Corporation Annual Report 2022

46

Notes of Consolidated Financial Statements

Measured at the Value in Use

Cash-generating units(groups of cash-generating units)

Terminal growth rate

Pre-tax discount rate

Term to estimate cash flows

0.0%

11.4%

5 years

1.0%

9.5%

5 years

2.0%

13.6%

5 years

2.0%

10.8%

5 years

2.0%

13.5%

5 years

0.0%

9.1%

5 years

Plastics
In-vitro Diagnostics andResearch ReagentsContract Development andManufacturing for
Biomedicine
Contract of the Services forDevelopment and Generationof Cell-lines
Drug Discovery andDevelopment Services
Lithography Materials

Recoverable amount of metal based EUV resists is measured at fair value less costs of disposal. Suchfair value was determined by discounting to present value, at a pre-tax discount rate of 13.1%, and theestimated future cash flows based on the business plan approved by the management of the Company
during the Inpria acquisition process. The fair value hierarchy is classified as Level 3.
As a result of the above calculation, the recoverable amounts well exceed the carrying amount of eachcash-generating units, as for those cash-generating units, the Group considers that the carrying amountwill not exceed the recoverable amount even if there is a change in the key assumptions used in theestimation of the recoverable amounts within a reasonable range.
(19) Investments Accounted for Using the Equity Method
1) Investments in Associates
There are no investments in significant associates.
Carrying ammount of investments in associates that are not individually significant is as follows:
As of March 31, 2021

As of March 31, 2022

As of March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Carrying amount

5,061

2,984

24,381The Group’s share of comprehensive income of associates that are not individually significant is
as follows:
Fiscal year ended March
31, 2021

Fiscal year ended March
31, 2022

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Share of profit(loss)
Share of other comprehensive income

(640)
(22)

72
232

588
1,893

Share of total comprehensive income

(661)

304

2,481

－

47

－

JSR Corporation Annual Report 2022

47

Notes of Consolidated Financial Statements

2) Investments in Joint Ventures
There are no investments in significant joint ventures.
Carrying ammount of investments in joint ventures that are not individually significant is asfollows:
As of March 31, 2021

As of March 31, 2022

As of March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Carrying amount

15,954--The Group’s share of comprehensive income of joint ventures that are not individually significant
is as follows:
Fiscal year ended March
31, 2021

Fiscal year ended March
31, 2022

Millions of yen

Millions of yen(3,492)91

Fiscal year ended
March 31, 2022
Thousands of U.S.
dollars
743

Share of other comprehensive income

155

406

3,316

Share of total comprehensive income(3,337)

497

4,060

Share of profit(loss)

－

48

－

JSR Corporation Annual Report 2022

48

Notes of Consolidated Financial Statements(20) Income Taxes
1) Deferred Tax Assets and Liabilities(i)

Deferred Tax Assets and Liabilities Recognized
The breakdown of deferred tax assets and liabilities by major causes for occurrence in each fiscal
year is as follows:
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)

April 1,
2020

Recognizedthrough
profit(loss)

Recognizedthroughothercomprehensiveincome(Millions of yen)March 31,
2021

Other

Deferred Tax Assets
Inventories

1,100

22

-

-

Accrued bonuses

1,908

(41)

-

-

1,867

Non-current assets

1,324

24,405--25,729Retirement benefit liability

4,355

75

(711)

-

3,719

701

(426)

-

69

344

5,863

829

(185)

(422)

6,086

15,252

24,864

(895)

(353)

38,868Non-current assets(1,551)37--(1,514)

Financial asset measured at fair value
through other comprehensive income(4,931)-(2,241)377(6,794)Retained earnings(1,619)(11,440)--(13,059)

(959)

532

-

-

(427)

(9,060)(10,871)(2,241)

377(21,794)

Unused tax losses
Other
Total

1,122

Deferred Tax Liabilities

Other
Total

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)

Recognizedthrough
profit(loss)

April 1,
2021

Deferred Tax Assets
Inventories
Accrued bonuses
Non-current assets
Retirement benefit liability
Unused tax losses
Other

1,122

151

1,867
25,729

339
419

3,719
344

(310)

Deferred Tax Liabilities
Non-current assets
Financial asset measured at fair value
through other comprehensive income
Retained earnings
Other
Total

-

-

-

(1,514)49(13,059)

3,756
(126)

2,215
2,642

-

(6,794)

(427)

3,679

(21,794)－

49

March 31,
2022

Other

-

(50)

38,868(Millions of yen)

-

(172)

6,086
Total

Recognizedthroughothercomprehensiveincome

-

1,274
2,206
26,148
3,409
172

(797)

7,454

(50)

(797)

40,663

-

-

(248)

3,158

(1,465)-(248)(2,385)772(3,884)(9,303)(2,938)(17,590)－

JSR Corporation Annual Report 2022

49

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Thousands of U.S. dollars)
Recognizedthrough
profit(loss)

Recognizedthroughothercomprehensiveincome

9,171

1,237

-

-

10,40815,254210,224

2,769
3,423

-

-

18,023
213,647

30,387(2,531)--

27,8562,809
49,728(1,404)18,097(410)(6,514)

1,405
60,901

317,573

21,590(410)(6,514)332,239

Non-current assets(12,371)

399

-

-

(11,972)

Financial asset measured at fair value
through other comprehensive income(55,513)-(2,026)25,801(31,738)

April 1,
2021

Deferred Tax Assets
Inventories
Accrued bonuses
Non-current assets
Retirement benefit liability
Unused tax losses
Other
Total
Deferred Tax Liabilities

Retained earnings
Other
Total

March 31,
2022

Other

(106,701)

30,692--(76,009)(3,485)(1,031)-(19,489)(24,006)(178,071)

30,060(2,026)

6,312(143,725)－ 50 －JSR Corporation Annual Report 2022

50

Notes of Consolidated Financial Statements(ii) Temporary Differences, etc. for Which Deferred Tax Assets Have Not Been Recognized
The Group assesses the recoverability of deferred tax assets in each period and recognizes deferred
tax assets taking into account significant uncertainty on the recoverability of its deferred tax assets.
Tax losses carried forward and deductible temporary differences for which deferred tax assets havenot been recognized are as follows:
As of March 31,
2021

As of March 31,
2022

Millions ofyenMillions of yen

11,471

16,531

Deductible temporary differences

1,874

5,631

Total

13,34522,161

Unused tax losses

As of March 31,
2022
Thousands of U.S.
dollars
135,065
46,005
181,070

Expiration schedule of tax losses carried forward for which no deferred tax asset is recognized is
as follows:
As of March 31,
2021

As of March 31,
2022

Millions ofyenMillions of yen

As of March 31,
2022

Thousands of U.S.
dollars

Not later than one year
Later than one year and not later
than five years
Later than five years

-

-

2,259

12,424

9,212

4,106

33,552

Total

11,471

16,531135,065

101,513

The amount of taxable temporary differences pertaining to investments in subsidiaries, etc. forwhich deferred tax liabilities have not been recognized was ¥22,963million as of March 31, 2021
and ¥30,051million ($245,538 thousand) as of March 31, 2022. For these temporary differences,deferred tax liabilities have not been recognized because the Group can control the timing of thereversal of the temporary differences and it is probable that the temporary differences will notreverse in the foreseeable future.
2) Income Tax Expense
The breakdown of income tax expense is as follows:
Fiscal year ended March 31,
2021

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Current tax expenses

6,093

15,773

128,877

Deferred tax expenses(13,993)(6,322)(51,651)(7,900)9,452

77,227

Continuing operations

7,990

8,370

68,389

Discontinued operations(15,890)

1,082

Total

8,838

Deferred tax expenses include tax losses of ¥218 million, which had not been recognized, in theprevious fiscal year. Also, the amounts of benefits arising from temporary differences in past periods
are included in the previous fiscal year and the current fiscal year, which were ¥90 million. There is
no applicable in this fiscal year.

－

51

－

JSR Corporation Annual Report 2022

51

Notes of Consolidated Financial Statements

Differences between statutory income tax rates and average effective tax rates can be explained by
the following factors.
Fiscal year ended March 31, 2021

Fiscal year ended March 31, 2022%%

Statutory income tax rate
Retained earnings
Tax credit on experiment and research expenses
Differences in tax rates applied to foreign operations
Special deduction for reconstruction district
Share of loss (profit) of entities accounted for using
the equity method
Other

30.6
(4.3)
0.2
(0.9)

30.6
(5.0)
(3.1)
(2.4)
0.2

0.6

(0.1)

(2.2)

(1.8)

Average effective tax rate

24.0

18.4

－

52

－

JSR Corporation Annual Report 2022

52

Notes of Consolidated Financial Statements(21) Borrowings and bonds (including Other financial liabilities)
1) Financial Liabilities
Borrowings and bonds (including Other financial liabilities) consisted of the following:
As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Averageinterest rates

Millions ofyenMillions ofyen

Thousands of
U.S. dollars%

22,33350,631

413,686

0.55％

Current borrowings
Commercial Papers
Current portion of
non-current
borrowings
Non-current
borrowings
Bonds Payable
Current leaseliabilities
Non-current leaseliabilities
Derivative liabilities
Total
Current liabilities
Non-current
liabilities
Total

Payment
Due--

10,00369,742(0.03％)

15,5398,536

81,734

3.01％

46,537

13,847113,1392.37％

2023-27

34,86934,890285,075

0.28％

2025-30

3,330

2,984

24,383-19,043

16,231

132,618-815

16,904
1,137,281--

142,465

2,069
139,192--

41,74572,659593,670--

100,720

66,533543,611--

142,465

139,192

1,137,281---2023-42

Borrowings and bonds are classified as financial liabilities measured at cost. Derivative liabilities areclassified as financial liabilities measured at fair value through profit or loss.
No restrictive financial covenants have been attached to the Group’s borrowings.
Payment schedules of non-current borrowings and bonds payable are as follows:
Later than one
Later than two
Later than three
Later than four
year and not later years and not later years and not later years and not later
than two years
than three years
than four years
than five years(Millions of yen)
Later than five
years

Total

Non-current
borrowings

5,207

4,358

2,146

2,136

-

13,847

Bonds Payable--

13,000-22,00035,000Later than one
Later than two
Later than three
Later than four
year and not later years and not later years and not later years and not later
than two years
than three years
than four years
than five years(Thousands of U.S. dollars)
Later than five
years

Total

Non-current
borrowings

42,54535,607

17,532

17,454-

113,139

Bonds Payable00106,218

0

179,753285,971－

53－

JSR Corporation Annual Report 2022

53

Notes of Consolidated Financial Statements

2) Pledged Assets
The Company and its consolidated subsidiaries have pledged collateral under standard customary terms instandard borrowing contracts.
Pledged assets are as follows:
As of March 31,2022

As of March 31,
2021

As of March 31,
2022

Millions of yen

Millions of yen

7

7

57

12,814

7,391

60,393

12,821

7,398

60,450

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Current borrowings and current
portion of non-current borrowings

2

-

-

Liabilities associated with disposalgroups classified as held for sale

-

2

245

Non-current portion of noncurrent borrowings

31

30

14

33

32

259

Cash and cash equivalents
Property, plant and equipment
Total

Thousands of U.S.
dollars

Corresponding liabilities are as follows:

Total

Thousands of
U.S. dollars

3) Reconciliation of Liabilities Arising from Financing Activities
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)(Millions of yen)

As of April 1, 2020

Cash flow

Non-cash items
Transfer
Exchange
between nondifferences
current andcurrent

Lease

As of March
31, 2021

Other

Borrowings(non-current)

52,684

10,896-

2,166(19,208)-

46,537

Bonds Payable-

34,836

-

-

-

33

34,86930,043(13,427)-

1,715

19,208333

37,872

18,766(3,264)

6,000

871

-

-

22,373

101,492

29,041

6,000

4,752

-

366

141,650

Borrowings(current)
Lease
liabilities
Total－ 54 －JSR Corporation Annual Report 2022

54

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
Non-cash items
As of April 1, 2021

Borrowings

Cash flow

Transfer
between non-ExchangeLease

differences

current andcurrent

As of March 31,
2022

Other

46,537

7,691

-

3,040

(14,598)(28,822)

13,84734,869

-

-

-

-

22

34,89037,872

24,173-

4,003

14,598(21,479)

59,167-

10,003----

10,003Leaseliabilities

22,373(4,348)

4,441

1,765

-

(25)

19,215

Total

141,650

37,519

4,441

8,808

-

(50,305)

137,123(non-current)
Bonds Payable
Borrowings(current)
Commercial
Papers(Thousands of U.S. dollars)
Non-cash items
As of April 1,

Cash flow

2021

Borrowings

Transfer
between non-ExchangeLease

differences

As of March 31,
2022

Other

current andcurrent

380,235

62,839-24,836(119,278)(235,493)

113,139

Bonds Payable

284,898

-

-

-

-

178

285,075

Borrowings(current)

309,434

197,506-

32,709119,278(175,500)

483,428

Commercial
Papers-81,734----

81,734Lease
liabilities

182,798(35,524)

36,285

14,423-(208)

157,001

Total

1,157,365

306,556

36,28571,968-(411,023)

1,120,377(non-current)(22) Trade and Other Payables
Trade and other payables are classified as financial liabilities measured at amortized cost. The breakdown isshown below.
As of March 31,2022

As of March 31,
2021

As of March 31,
2022

Millions of yen

Millions of yen

73,751

38,749316,599

26,521

24,395

199,324

Thousands of U.S.
dollars

Trade Payable
Notes and accounts payable trade
Other Payable
Accounts payable - other, andaccrued expenses

－ 55

－

JSR Corporation Annual Report 2022

55

Notes of Consolidated Financial Statements

Other
Total

525

405

3,305

100,797

63,548519,228(23) Employee Benefits
1) Outline of Post-Employment Benefit Plans
The Company and certain consolidated subsidiaries have adopted funded and unfunded defined benefit
plans and defined contribution plans, and virtually all employees of these companies are covered bythese plans. In Japan, defined benefit plans under the Defined-benefit Corporate Pension Act, defined
benefit corporate pension plans and lump-sum retirement benefit plans have been operational. The
amount of these benefits is calculated based on certain points, etc. given in accordance with service
years and contribution. These pension plans are exposed to general investment risk, interest rate risk,
inflation risk and others.
Funded defined benefit plans have been operated by a corporate pension fund that is legally separated
from the Group in accordance with laws and regulations including Defined-Benefit Corporate Pension
Act. The board of the corporate pension fund and the pension-managing trustee are required by laws
and regulations to act in the best interests of plan participants, and are responsible for managing plan
assets based on predetermined policies.
The management of plan assets is conducted based on basic asset allocation aimed to ensure stablerevenue in the medium to long term within the limits of tolerable risks, in order to ensure the paymentof pension benefits, etc. at present and in the future. The basic asset allocation is periodically reviewed
in order to respond to changes in the market environment and the funding position from initialassumptions made.
2) Defined Benefit Plans(i) Reconciliation of Defined Benefit Plan Obligations and Plan Assets
The relationship between defined benefit plan obligations and plan assets, and net defined benefit
liabilities and assets recorded in the consolidated statement of financial position is as follows:

Present value of funded retirement
benefit obligation
Fair value of plan assets
SubtotalPresent value of unfunded
retirement benefit obligation
Total Net liability (asset) for
retirement benefit
Amounts on consolidated
statement of financial position
Retirement benefit liability
Retirement benefit asset
Total Net liability (asset) for
retirement benefit

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

38,49535,248288,000(40,114)(38,103)(311,327)(1,619)(2,855)(23,327)

13,1487,940

64,875

11,5295,085

41,54816,434(4,905)

10,278(5,192)

83,974(42,426)

11,5295,085

41,548－56－
JSR Corporation Annual Report 2022

56

Notes of Consolidated Financial Statements(ii) Reconciliation of Present Value of Defined Benefit Plan Obligations
Increase or decrease in the present value of defined benefit plan obligations is as follows:
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

51,12851,643421,953

2,462

2,390

19,528

215

227

1,853

53

1,103

9,013

44

(725)

(5,920)(2,402)(3,600)(29,416)-(7,458)(60,940)

144

(391)

(3,196)

51,643

43,188352,875

Balance of present value of retirement benefit
obligation at the beginning of the fiscal year
Service cost
Interest expense
Remeasurement
Actuarial gains (losses) arising from changes indemographic assumptions
Actuarial gains (losses) arising from changes infinancial assumptions
Benefits paid
Transfer to liabilities associated with disposalgroup classified as held for sale
Other
Balance of present value of retirement benefit
obligation at the end of the fiscal year

Fiscal year ended
March 31, 2022

Thousands of U,S,dollars

The weighted average duration of defined benefit plan obligations was 13.7 years in the fiscal year
ended March 31, 2021 and 13.3 years in the fiscal year ended March 31, 2022.
(iii) Reconciliation of Fair Value of Plan Assets
Increase or decrease in the fair value of plan assets is as follows:
Fiscal year ended March
31, 2021

Fiscal year ended March
31, 2022

Millions of yen

Millions of yen

Balance of fair value of plan assets atthe beginning of the fiscal year
Interest revenue

Fiscal year ended
March 31, 2022
Thousands of U.S.
dollars

37,472

40,114

327,756

312

166

1,356

Remeasurement
Return on plan assets
Contributions paid by the employer
Benefits paid
Transfer to liabilities associated withdisposal group classified as held forsale classified as held for sale
Other
Balance of fair value of plan assets at
the end of the fiscal year

2,436

242

1,976

1,519

1,396

11,406(1,703)(1,901)(15,531)-(1,694)(13,839)

78

(220)

(1,797)

40,114

38,103311,327

Contributions to defined benefit plans are determined by performing an actuarial review
periodically so that balanced budgets can be maintained in the future. In the actuarial review, theGroup reviews assumptions related to the determination of contributions (such as expected rate ofinterest, expected mortality rate and expected withdrawal rate) and verifies the appropriateness ofcontributions determined.
The Group will make contributions of ¥2,668 million ($21,798 thousand) in the fiscal year ending
March 31, 2023.

－

57

－

JSR Corporation Annual Report 2022

57

Notes of Consolidated Financial Statements(iv) Items of Plan Assets
Plan assets consisted of the following items.
As of March 31, 2021

Cash and cash equivalents
Equity instruments
Domestic equity securities
Foreign equity securities
Debt instruments
Domestic bonds
Foreign bonds

Assets forwhich active
marketprices areavailable

Assets forwhich active
marketprices are
not available

Millions of
yen

4,546

As of March 31, 2022
Total

Assets forwhich active
marketprices areavailable

Assets forwhich active
marketprices are
not available

Total

Millions ofMillions ofMillions ofMillions ofMillions of

yen

yen

yen

yen

yen

-

4,546

4,478

-

4,478

1,482
4,005

-

1,482
4,005

1,428
3,857

-

1,428
3,857

9,669
10,632-

9,669
10,632

9,592
10,013-

9,592
10,013

-

688

688

-

414

414

9,090
9,779

9,090
40,11429,369

8,320
8,735

8,320
38,103General accounts of life
insurance
Alternative investments*

30,335*Alternative investments include hedge funds.
Total

As of March 31, 2022

Cash and cash equivalents
Equity instruments
Domestic equity securities
Foreign equity securities
Debt instruments
Domestic bonds
Foreign bonds
General accounts of life
insurance
Alternative investments*
Total

Assets forwhich active
marketprices areavailable

Assets forwhich active
marketprices are
not available

Total

Thousands ofThousands ofThousands of

U.S. dollars

U.S. dollars

U.S. dollars

36,591
11,66731,51578,37181,816-36,591
11,66731,51578,37181,816

-

3,384

3,384

239,959

67,98371,367

67,983311,327*Alternative investments include hedge funds.

(v) Main Component Used for Actuarial Assumption
As of March 31, 2021

As of March 31, 2022%%

Discount rates (weighted average)

0.50

0.63

(vi) Sensitivity Analysis
In the fiscal year ended March 31, 2022, a 0.5% increase (decrease) in the discount rate used in
actuarial calculation would have resulted in a decrease (increase) in the present value of defined
benefit plan obligations by ¥2,830 million ($23,124 thousand). This provisional calculation
assumes that variables other than the assumptions used in the calculation are constant. In reality,
since individual assumptions are affected by changes in economic indicators and conditions at the
－

58

－

JSR Corporation Annual Report 2022

58

Notes of Consolidated Financial Statements

same time, the assumptions are expected to change independently or in a correlated fashion, andthe actual effects of such changes on defined benefit plan obligations may differ from the expected
effects.
3) Defined Contribution Plans
The amount recognized as expenses in relation to defined contribution plans was ¥1,427 million in
the fiscal year ended March 31, 2021 and ¥1,806 million ($14,755 thousand) in the fiscal year ended
March 31, 2022.
4) Employee Benefits Expense
The total amount of employee benefits expense included in “cost of sales” and “selling, general andadministrative expenses” in the consolidated statement of profit or loss in the fiscal year ended March
31, 2021 and the fiscal year ended March 31, 2022 was ¥3,792 million and ¥4,257 million ($34,781
thousand), respectively.

－

59

－

JSR Corporation Annual Report 2022

59

Notes of Consolidated Financial Statements(24) Provisions
Increase or decrease in provisions are the following.
Provision for loss on business

Allowance for dismantling

restructuring

and removal

Millions of yen

Millions of yen

As of April 1, 2021

1,837

-

2,635

8,139

Decrease (used for purposes)(1,860)-

As of March 31, 2022

2,612

8,139

Increase

Provision for loss on business

Allowance for dismantling

restructuring

and removal

Thousands of U.S. dollars

Thousands of U.S. dollars

As of April 1, 2021

15,010-21,531

66,497

Decrease (used for purposes)(15,199)-

As of March 31, 2022

21,34366,497

Increase

Provision for Loss on Business Restructuring
To provide for losses due to business restructuring that are expected to arise for the future, theestimated loss is recorded.
The payment period is within one year from the end of the fiscal year.
Allowance for dismantling and removal
To provide for expenses for the dismantling and removal of manufacturing facilities, etc., that are
expected to arise in the future, an estimated amount of expenses at the end of the current fiscal year isrecorded.
The payment period may change due to a review of future dismantling and removal plans.

Provisions on consolidated statement of financial position consisted of the following:

Current liabilities
Non-Current liabilities
Total

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

1,837

2,718

22,205-

8,033

65,635

1,837

10,751

87,839－60－
JSR Corporation Annual Report 2022

60

Notes of Consolidated Financial Statements(25) Other Liabilities
Other liabilities include the following items.
As of March 31,
2021

As of March 31,
2022

Millions of yen

Millions of yen

As of March 31,
2022
Thousands of U.S.
dollars

Other current liabilities
Unearned revenue

55

-

-

Accrued bonuses

5,254

3,794

30,998

Accrued consumption taxes

1,019

476

3,886

Other

3,867

3,191

26,076

10,196

7,461

60,960

787

127

1,036

4,349

4,682

38,254

5,136

4,809

39,290

Total
Other non-current assets
Provision for environmental
measures
Other
Total

(26) Equity and Other Equity Items
1) Share Capital and Capital Surplus
Capital surplus consists of legal capital surplus and other capital surplus.
The Companies Act of Japan (hereinafter the “Companies Act”) stipulates that at least half of the payment orcontribution at the share issue shall be credited to share capital, and the remaining amount may be recorded aslegal capital surplus included in capital surplus. In addition, under the Companies Act, legal capital surplus may
be credited to share capital by resolution of the general meeting of shareholders.
Increase or decrease in the number of authorized shares and the number of issued shares are as follows:
Number of shares authorized

Number of shares issued

As of April 1, 2020

696,061,000

226,126,145

Increase/Decrease--

As of March 31, 2021

696,061,000

226,126,145

Increase/Decrease--

As of March 31, 2022

696,061,000

226,126,145(Note)All shares issued by the Company are ordinary shares with no rights limitations and without par value and restricted
shares. Issued shares are fully paid.

2) Treasury Shares
The Companies Act stipulates that entities may determine the number of shares to be acquired, the total amountof acquisition price, etc. and acquire treasury shares by resolution of the general meeting of shareholders, to theextent of the distributable amount. Moreover, in the case of acquisition through market transactions or a takeoverbid, treasury shares may be acquired by resolution of the Board of Directors within the requirements prescribedin the Companies Act in accordance with the provisions of the Articles of Incorporation.
Increase or decrease in the number of treasury shares is as follows:
As of April 1, 2020

Number of shares
11,412,308

Increase/Decrease(188,973)

As of March 31, 2021

11,223,335

Increase/Decrease(175,435)

As of March 31, 2022

11,047,900(Note)

Increase or decrease during the period is mainly due to the disposal of treasury stock as the restricted share-based
－

61

－

JSR Corporation Annual Report 2022

61

Notes of Consolidated Financial Statements

remuneration.

3) Retained Earnings
Retained earnings consist of legal retained earnings and other retained earnings.
The Companies Act stipulates that one-tenth of the amount paid as dividends of surplus shall be reserved as legal
capital surplus or legal retained earnings until the sum of legal capital surplus included in capital surplus andlegal retained earnings included in retained earnings reaches one quarter of share capital. Accumulated legal
retained earnings may be appropriated to cover a deficit. It is specified that legal retained earnings may bereversed by resolution of the general meeting of shareholders.

4) Other Components of Equity
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)

As of April
1, 2020
Other
comprehens
ive income
Total
comprehensi
ve income
Share-based
remuneration planTransferfrom othercomponentsof equity toretainedearnings
Changes innoncontrollinginterests
Othermovements
Total
transactions
with owners,
etc.
As of March
31, 2021（Millions of yen）

Net change infinancialassetsmeasured atfair value
through othercomprehensiv
e income

Net change infair value on
cash flow
hedgesExchangedifferenceson translationof foreign
operations

10,849(34)(4,657)

-

(73)

(460)

5,626

5,055

14

5,038

1,590

-

-

11,697

5,055

14

5,038

1,590

-

-

11,697

-

-

-

-

(9)

-

(9)

(808)

-

-

(1,590)--(2,399)

-

-

(27)

-

-

-

(27)

-

-

-

-

-

460

460

(808)

-

(27)

(1,590)(9)

460(1,975)15,096

(20)

354

-

(82)

-

15,348－Remeasurements ofdefinedbenefitplans

62

Restricted
Shares

Other

Total

－

JSR Corporation Annual Report 2022

62

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Net change infinancialassetsmeasured atfair value
through othercomprehensiv
e income
As of April
1, 2021
Other
comprehens
ive income
Total
comprehensi
ve income
Share-based
remuneration planTransferfrom othercomponentsof equity toretainedearnings
Changes innoncontrollinginterests
Othermovements
Total
transactions
with owners,
etc.
As of March
31, 2022

15,096

Net change infair value on
cash flow
hedgesRemeasurements ofdefinedbenefitplans

Exchangedifferenceson translationof foreign
operations（Millions of yen）

Restricted
Shares354-

17

17,523

141

1,140

17

17,523--(7,523)

Other

(82)

-

15,348--18,821

141--

18,821

-

-

(32)

-

(32)

-

-

(141)

-

-

(7,663)

-

-

-

-

-

-

-

-

-

(92)

-

-

-

(92)

(7,523)

-

(92)

(141)

(32)

-

(7,788)

8,713

(2) )

17,784

-

(114)

-

26,381

1,140

(20)

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)

As of April
1, 2021
Other

Total

(Thousands of U.S. dollars)

Net change infinancialassetsmeasured atfair value
through othercomprehensiv
e income

Net change infair value on
cash flow
hedgesExchangedifferenceson translationof foreign
operations

123,340

(160)

2,893

-

(668)

-

125,404

9,316

140

143,170

1,151

-

-

153,777－

Remeasurements ofdefinedbenefitplans

63

Restricted
Shares

Other

Total

－

JSR Corporation Annual Report 2022

63

Notes of Consolidated Financial Statements

comprehens
ive income
Total
comprehensi
ve income
Share-based
remuneration planTransferfrom othercomponentsof equity toretainedearnings
Changes innoncontrollinginterests
Othermovements
Total
transactions
with owners,
etc.
As of March
31, 2022

9,316

140

143,170

1,151

-

-

153,777

-

-

-

-

(265)

-

(265)

(61,464)--(1,151)--(62,615)

-

-

-

-

-

-

0

-

-

(755)

-

-

-

(755)

(61,464)-(755)(1,151)(265)-(63,635)

71,191(20)

145,308

-

(933)

-

215,545(a) Net Change in Financial Assets Measured at Fair Value through Other Comprehensive Income
It represents valuation differences on fair value of equity instruments measured at fair value throughother comprehensive income.
(b) Net Change in Fair Value of Cash Flow Hedges
It represents change in profit or loss on valuation of derivatives as hedging instruments that wererecorded in the statement of comprehensive income on and before the date of cessation of hedge
accounting.
(c) Exchange Differences on Translation of Foreign Operations
They represent translation differences on foreign operations’ financial statements.
(d) Remeasurements of Defined Benefit Liabilities (Assets)
Remeasurements of defined benefit liabilities (assets) are changes in actuarial differences, return onplan assets (excluding the amount included in interest revenue) and the effect of the asset ceiling(excluding the amount included in interest revenue). Actuarial differences are adjustments based on
actual results related to defined benefit plan obligations (differences between actuarial assumptions at
the beginning of the period and actual results) and the effect of changes in actuarial assumptions.
These items are recognized in other comprehensive income when they arise, and immediatelytransferred from other components of equity to retained earnings.
(e) Restricted Shares
Under the restricted share-based remuneration plan, monetary remuneration to be used as contributed
properties for restricted shares is provided. The amount equivalent to fair value of remuneration
determined at the initial recognition is recorded in share capital, and recognized as the amount debitedto other components of equity. Over the vesting period, other components of equity recognized as thedebited amount are deducted at the time when remuneration cost is recognized.
Details of the restricted share-based remuneration plan are provided in the note “(34) Share-based
remuneration.”

－

64

－

JSR Corporation Annual Report 2022

64

Notes of Consolidated Financial Statements

(f)

Other
The Company and the non-controlling interests had entered into an agreement under which theCompany would purchase all of the interest held by the non-controlling interests under certain
conditions. In the previous fiscal year, however, the obligation to purchase these interests was
extinguished, and the carrying amount of the financial liabilities at the time of extinguishment wastransferred to capital surplus.

(27) Dividends
The amounts of dividends paid are as follows:
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
Resolution
Ordinary General
Meeting of
Shareholders on
June 17, 2020
Board of Directors
Meeting on
October 27, 2020

Record date

Effective
date ofdividends

Source ofdividends¥30

March 31,2020

June 18,
2020

Retained
Earnings¥30

September
30, 2020

November27, 2020

Retained
Earnings

Class ofsharesTotal amount ofdividends

Dividends
per share

Ordinary
Shares¥6,441 million

Ordinary
Shares¥6,447 million

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Resolution
Ordinary General
Meeting of
Shareholders on
June 17, 2021
Board of Directors
Meeting on
November 8, 2021

Class ofsharesTotal amount ofdividends

Dividends
per share

Record date

Effective
date ofdividends

Source ofdividends

Ordinary
Shares¥6,447 million($52,677 thousand)¥30($0.25)

March 31,2021

June 18,2021

Retained
Earnings

Ordinary
Shares¥7,528 million($61,505 thousand)¥35 ($0.29)

September 30,
2021

December
8, 2021

Retained
Earnings

Dividends of which record dates belong to the current fiscal year and of which effective dates of dividends fall
after the end of the current fiscal year are as follows:
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
Resolution

Class ofsharesTotal amount ofdividends

Dividends
per share

Recorddate

Effective
date ofdividends

Source ofdividends

Ordinary General
Meeting of
Shareholders on
June 17, 2021

Ordinary
Shares¥6,447 million¥30

March 31,2021

June 18,2021

Retained
Earnings

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Resolution

Class ofsharesTotal amount ofdividends

Dividends
per share

Recorddate

Source ofdividends

Ordinary General
Meeting of
Shareholders on June17, 2022

Effective
date ofdividends

Ordinary
Shares¥7,528 million($61,506 thousand)¥35($0.29)March 31,2022

June 20,2022

Retained
Earnings－ 65 －JSR Corporation Annual Report 2022

65

Notes of Consolidated Financial Statements(28) Revenue(1) Disaggregation of Revenue
Regarding the revenue arising from contracts with the Group’s customers, the breakdown of revenue into
domestic and overseas and its relation to the reportable segments are as follows.
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)

The Reportable
Segments

Digital Solutions
Semiconductor
Materials
Display Materials
Edge Computing
Materials
Life Sciences
Plastics

Overseas
123,268

Total
151,420

19,26975,585

94,855

4,919

42,43647,354

3,964

5,247

9,211

12,36947,817
19,909108,247042,82831,306
6,350
203,752-

55,197
79,123
26,259311,9990108,248

203,752

312,000

Other
Total
Adjustment
Amount Recorded in the Consolidated
Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)

The Reportable
Segments

Digital Solutions
Semiconductor
Materials
Display Materials
Edge Computing
Materials
Life Sciences
Plastics(Millions of yen)Domestic
28,152(Millions of yen)Domestic
29,137

Overseas
135,893

Total
165,030

20,061

90,190110,251

5,136

40,80245,938

3,940

4,901

8,841

16,83753,122
11,591
110,688
055,61537,484
1,319
230,310-72,45290,606
12,910340,9970

110,688

230,310

340,997

Other
Total
Adjustment
Amount Recorded in the Consolidated
Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Thousands of U.S. dollars)
Domestic
Overseas
Total
Digital Solutions
238,070
1,110,325
1,348,395
Semiconductor
163,913736,905
900,818
Materials
Display Materials
41,968333,374
375,342
The Reportable
Segments
Edge Computing
32,18940,046
72,235Materials
454,405
591,973
Life Sciences
137,569
434,042306,263
740,305
Plastics－

66－

JSR Corporation Annual Report 2022

66

Notes of Consolidated Financial Statements

Other
Total
Adjustment
Amount Recorded in the Consolidated
Financial Statements

94,704904,385
010,776
1,881,769-

105,480
2,786,154
0904,385

1,881,769

2,786,154

1) Digital Solutions Business
In Digital Solutions business, the Group manufactures and sells semiconductor materials, display
materials, and products related to edge computing, etc.
For the sales contracts on products and merchandise, the Group recognizes revenue upon delivery
because the control of the products and merchandise is considered to be transferred to the customer andthe performance obligation is satisfied by delivery.
2) Life Sciences Business(i) Manufacturing and sale of in-vitro diagnostics and research reagents, related materials, andbioprocess materials
For the sales contracts on products and merchandise, the Group recognizes revenue upon delivery
because the control of the products and merchandise is considered to be transferred to the customer
and the performance obligation is satisfied by delivery.
(ii) Contract development and manufacturing for bioprocess, etc.
The Group renders services in the contract research and manufacturing businesses related tobioprocess, etc.
For rendering of services, the Group recognizes revenue at over time with fulfillment of
performance obligation based on the contract between the Group and the customer.

3) Plastics Business
In Plastics business, the Group manufactures and sells ABS and other resins for automobiles, officeequipment, and amusement applications, etc.
For the sales contracts on products and merchandise, the Group recognizes revenue upon delivery
because the control of the products and merchandise is considered to be transferred to the customer andthe performance obligation is satisfied by delivery.

(2) Liabilities Arising from Contracts with the Customers
Contract liabilities primarily consist of consideration received from customers before performanceobligations are satisfied for biologics contract development and manufacturing organization (CDMO)
services in the Life Sciences Business. Said contract liabilities are transferred to revenue as thecorresponding performance obligation is satisfied. Among the beginning balance of contract liabilities forthe current fiscal year, the amount of revenue recognized is ¥9,436 million ($77,099 thousand).
The amount of revenue recognized from the performance obligations that were satisfied (or partiallysatisfied) in previous fiscal years is insignificant in the current fiscal year.
－

67

－

JSR Corporation Annual Report 2022

67

Notes of Consolidated Financial Statements(3) Transaction Price Allocated to the Remaining Performance Obligations
The Group applies the practical expedient and omits information on the remaining performanceobligations because there are no significant transactions with initial expected contractual terms exceeding
one year.
There are no significant amounts of consideration from contracts with customers that are not included intransaction prices.
The consideration does not include a significant financing component, since the consideration fortransaction prices is mainly collected within one year from the time of delivery of products andmerchandise to customers or the agreement based on the contract such as milestone achievement.
(4) Assets Recognized from the Costs of Obtaining or Fulfilling Contracts with Customers
There is no significance in the amount of assets recognized from the costs incurred to obtain or fulfill acontract with a customer in the current fiscal year.
The Group applies the practical expedient of recognizing the incremental costs of obtaining a contract as an
expense when incurred if the amortization period of the asset that the Group otherwise would haverecognized is one year or less.

(29) Selling, General and Administrative Expenses
1) Major items in selling, general and administrative expenses are as follows:

Transportation andwarehousing expenses
Salaries and allowances
Retirement benefit
expenses

Fiscal year ended March 31,
2021

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

6,244

7,997

19,501

22,315

182,330

856

702

5,736

19,711

21,839178,438

5,244
619

6,793
570

55,506
4,658
29,23565,336

Experiment andresearch expenses
Depreciation
Supplies expenses
Business consignment
expenses
Other

2,823

3,578

20,20823,535

192,297

Total

75,20587,330713,537

2) Amount of research and development expense included in general and administrative expenses andmanufacturing costs
Fiscal year ended March 31,
2021

Fiscal year ended March 31,
2022

Millions of yen
Research anddevelopment expense

Millions of yen－

Thousands of U.S. dollars
24,40622,178
68

Fiscal year ended March 31,
2022

199,414－

JSR Corporation Annual Report 2022

68

Notes of Consolidated Financial Statements(30) Other Operating Income and Expenses
Other operating income consisted of as follows:
Fiscal year ended
March 31, 2021

Fiscal year ended March
31, 2022

Fiscal year ended March
31, 2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Gain on sales of noncurrent assets

129

19

158

110

171

1,394

-

7,467

61,012-

1,348

11,010

1,361

1,814

14,824

1,601

10,81988,398Rent income
Remeasured gains on
business combinations*
Reversal of impairment
losses
Other
Total*Remeasured gains on business combinations are described in "Notes of Consolidated Financial Statements (8).
Business Combinations and Acquisition of Non-controlling Interest."

Other operating expenses consisted of as follows:
Fiscal year ended March
31, 2021

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Loss on abandonment of

205

91

747

82

12

99

-

3,228

26,379

3,508

-

-

1,506

2,620

21,408

5,302

5,952

48,633

non-current assets
Loss on sales of noncurrent assets
Impairment loss
Business Restructuring
expenses*
Other
Total

*Business Restructuring expenses mainly consisted of costs related to structural reforms in the Display Solutions
Business of ¥2,458 million ($20,084 thousand).

－ 69

－

JSR Corporation Annual Report 2022

69

Notes of Consolidated Financial Statements(31) Financial Income and Costs
Financial income consisted of the following:
Fiscal year ended March
31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended March
31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Interest income
Financial assets measured atamortized cost

112

166

1,358

701

1,232

10,06916,476

Dividend income
Equity financial assets measured
at fair value through othercomprehensive income
Foreign exchange gains
Other
Total

-

2,017

9

-

-

822

3,415

27,904

Financial costs consisted of the following:
Fiscal year ended March
31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended March
31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Interest expenses
Financial liabilities measured at

701

1,160

9,477

Lease liabilities

383

495

4,041

Foreign exchange loss

660

-

-

amortized cost

Other
Total

－

0

-

-

1,744

1,655

13,51870－

JSR Corporation Annual Report 2022

70

Notes of Consolidated Financial Statements(32) Other Comprehensive Income
Changes in items of other comprehensive income are shown below:
Amount incurred and reclassification for profit or loss in items of other comprehensive income, and effects
of income tax are shown below:
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
Amountincurred(Millions of yen)

Reclassificati
onbefore tax

Income tax

Net of tax

7,342

-

7,342

(2,241)

5,101

2,072

-

2,072

(635)

1,438

68

-

68

-

68

9,482

-

9,482

(2,875)

6,607

(10)

37

28

-

28

6,167

-

6,167

-

6,167

65

-

65

-

65

6,223

37

6,260

-

6,260

15,70537

15,742(2,875)

12,867

Other comprehensive income thatwill not be reclassified to profit orloss

Net change in financial assets
measured at fair value throughother comprehensive income
Remeasurements of defined
benefit plans
Share of other comprehensive
income of investments
accounted for using the equity
methodTotal

Items that may be reclassified to
profit or loss
Cash flow hedges

Exchange differences ontranslation of foreign
operations
Share of other comprehensive
income of investments
accounted for using the equity
method
Total
Total

－

71

－

JSR Corporation Annual Report 2022

71

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Amountincurred(Millions of yen)

Reclassificati
onbefore tax

Income tax

Net of tax

1,389

-

1,389

(248)

1,141

405

-

405

(124)

281

(2)

-

(2)

-

(2)

1,791

-

1,791

(372)

1,419

2

32

34

-

34

17,480-17,480-17,573

640

-

640

-

640

18,12232

18,154-

18,246

19,91332

19,945(372)

19,665

Other comprehensive income thatwill not be reclassified to profit orloss

Net change in financial assets
measured at fair value throughother comprehensive income
Remeasurements of defined
benefit plans
Share of other comprehensive
income of investments
accounted for using equity
methodTotal

Items that may be reclassified to
profit or loss
Cash flow hedges

Exchange differences ontranslation of foreign
operations
Share of other comprehensive
income of investments
accounted for using the equity
method
Total
Total

－

72 －

JSR Corporation Annual Report 2022

72

Notes of Consolidated Financial Statements

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Amountincurred

Reclassificati
on(Thousands of U.S. dollars)

before tax

Income tax

Net of tax

Other comprehensive income thatwill not be reclassified to profit orloss

Net change in financial assets
measured at fair value throughother comprehensive income
Remeasurements of defined
benefit plans
Share of other comprehensive
income of investments
accounted for using the equity
methodTotal

Items that may be reclassified to
profit or loss
Cash flow hedges

Exchange differences ontranslation of foreign
operations
Share of other comprehensive
income of investments
accounted for using the equity
methodTotal
Total

11,345-

11,345(2,026)

9,320

3,308

-

3,308

(1,013)

2,295

(20)

-

(20)

-

(20)

14,634-

14,634(3,039)11,595

13

261

274

-

274

142,824-

142,824-

143,580

5,228

-

5,228

-

5,228

148,066

261

148,327-

149,083

162,700

261

162,961(3,039)160,678－73 －JSR Corporation Annual Report 2022

73

Notes of Consolidated Financial Statements(33) Earnings per Share
Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2022

1) Basic earnings (loss) per share¥(256.73)¥173.49$1.42

Continuing operations¥108.65¥162.52$1.33

Discontinued operations¥(365.38)¥10.97$0.09

Profit (loss) attributableto owners of parent¥(55,155) million¥37,303 million$304,789 thousand

Continuing operations
Discontinued operations¥23,341 million¥(78,497) million¥34,944 million¥2,360 million$285,509 thousand$19,279 thousand

214,838

215,016

215,016¥(256.34)¥173.26$1.42¥108.47¥(364.81)¥162.30¥10.96

$1.33
$0.09

331

285

285

215,169

215,301

215,301(Basis of calculation)

Average shares outstanding during the year
(1,000 shares)
2) Diluted earnings (loss) per share
Continuing operations
Discontinued operations(Basis of calculation)
Increase in common shares due to stock
options (1,000 shares)
Average diluted shares outstanding during
the year (1,000 shares)(34) Share-based Remuneration
1) Stock Options(i) Overview of Share-based Remuneration Plan
The Group operated an equity-settled share-based remuneration plan where it received services fromdirectors, executive officers, and employees and paid equity instruments (options) as consideration thereof
until June 2017.
The fair value on the date the option was granted under the plan is recognized as an expense over the option’s
vesting period and the same amount is recorded as an increase of equity. The plan was terminated in June2017 (however, share acquisition rights already granted as share-based stock options to directors, etc. thathave not been exercised will be continued).

(ii) Number and Weighted Average Exercise Prices of Stock Options
Fiscal year ended March 31, 2021

Shares361,000(48,400)
312,600

Weighted
average exercise
price
Yen
1
1
1

312,600

1

Number of shares

Outstanding at the beginning
GrantedExercised
Forfeited
ExpiredOutstanding at the end
Exercisable at the end

Fiscal year ended March 31, 2022

Shares
312,600(49,000)
263,600

Weighted
average
exercise price
Yen
1
1
1

Weighted
average
exercise price
U.S. dollars
0.01
0.01
0.01

263,600

1

0.01

Number of shares

The weighted average share price as of the exercise date of stock options exercised during the period was ¥2,445
and ¥3,505 ($28.64) in the fiscal years ended March 31, 2021 and 2022, respectively.
－

74 －JSR Corporation Annual Report 2022

74

Notes of Consolidated Financial Statements

In the fiscal years ended March 31, 2021 and 2022, the exercise price of unexercised stock options was ¥1 each.
The weighted average remaining contract terms in the fiscal years ended March 31, 2021 and 2022 were 10.2
years and 10.1 years, respectively, for the unexercised balance at the end of the fiscal year, and 10.2 years and10.1 years, respectively, for the exercisable balance at the end of the fiscal year.
2) Restricted Share-based Remuneration Plan
The Group employs the restricted share-based remuneration plan in order to further promote sharing of values
with shareholders and establish a remuneration structure that contributes to sustained improvement in corporate
value in the medium to long term. Under this plan, to grant restricted shares to directors, excluding outside
directors, and executive officers (hereinafter “Eligible Directors, etc.”), the Company is to provide the Eligible
Directors, etc. with claims for monetary remuneration in principle in each period and have them contribute theseclaims in kind as contributed properties to the Company. Accordingly, the Company is to issue or dispose ofordinary shares of the Company to the Eligible Directors, etc. and make them hold the shares.
The Company enters into an agreement with Eligible Directors, etc. for allotment of restricted shares, andEligible Directors, etc. cannot transfer, pledge or dispose of in any other way shares granted under the allotment
agreement at will during a given period of time stipulated in the agreement (hereinafter the “Transfer Restriction
Period”) (hereinafter, the “Transfer Restriction”). The Transfer Restriction is lifted for all shares held by Eligible
Directors, etc. when the Transfer Restriction Period expires, on the condition that the Eligible Directors, etc.
continued to hold a position of directors, executive officers, audit & supervisory board members, employees, or
any other equivalent position of the Company or its subsidiaries during the Transfer Restriction Period. On theother hand, under this structure, shares for which the Transfer Restriction has not been lifted at the time when
the Transfer Restriction Period expires are acquired by the Company without any payment in principle.
Details of restricted shares granted during the period are as follows:
Fiscal year ended March 31, 2022
(from April 1, 2021 to March 31, 2022)
Number of restricted shares granted

144,900 shares

Fair value on the grant date

¥3,485 per share ($28.47 per share)
Calculated on the basis of closing price of ordinary shares of
the Company at the Tokyo Stock Exchange on the business
day proceeding the date when the Board of Directors adopted
a resolution.

Calculation method for fair value measurement

Directors and executive officers of the Company: 30 years
Executives of certain subsidiaries: 3 years

Transfer Restriction Period

3) Performance Share Unit Remuneration Plan
The Company has adopted the performance share unit remuneration plan for directors and executive
officers of the Company and officers of certain subsidiaries of the Company, under which thenumber of shares to be delivered and the amount of individual cash payments are adjusted according
to the attainment level of predetermined performance targets. (hereinafter referred to as” Eligible
Directors, Executive Officers and Subsidiaries Officers”).
The Eligible Directors, Executive Officers and Subsidiaries Officers shall, at the beginning of theperformance evaluation period, be granted the basic number of share units determined by position,
by resolution of the Board of Directors based on the deliberation and report of the Compensation
Advisory Committee of the Company, except for cases of transfer to a competitor which is not
approved by the Company or cases of disciplinary action.
The number of the Company shares to be paid to Eligible Directors, Executive Officers andSubsidiaries Officers and the amount of cash paid shall be determined by multiplying the basenumber of share units by the payment rate (varying from 0% to 200%) corresponding to the degreeof achievement of the target value of the consolidated performance indicator (average consolidated
ROE for fiscal year 2023 and fiscal year 2024) set in fiscal year 2021. Out of the number calculated
－

75

－

JSR Corporation Annual Report 2022

75

Notes of Consolidated Financial Statements

by multiplying the base number of share units for the Company shares granted to each Eligible
Director, Executive Officer and Subsidiaries Officers by the allocation rate determined after the endof the performance evaluation period, 50% is calculated as the number of individual shares to beallocated and the remaining amount is calculated as the amount of individual cash to be paid.
The fair value in the plan is estimated based on the market price of the Company’s shares, which is
not revised in consideration of the estimated dividend. The fair value at the reporting date for the
fiscal year ended March 31, 2022 is ¥3,535 ($28.88).
4) Share-based Remuneration Expense
The breakdown of share-based remuneration expenses in the consolidated statement of profit or loss is asfollows:
The amount of share-based remuneration expense is included in “selling, general and administrative
expenses”.
Fiscal year ended March
31, 2021

Fiscal year ended March
31, 2022

Fiscal year ended March
31, 2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Equity-settled
Remuneration

318

461

3,769

(Performance Share Unit Remuneration

-

172

1,403

-

167

1,366

318

800

6,538

(Restricted

Share-basedPlan)
Cash-settled
Plan)
Equity-settled(Performance Share Unit Remuneration
Plan)
Total

5) Liabilities Arising from Share-based Payment
The liabilities included in “Other current liabilities” in the consolidated statement of the financial position are
as follows:

Fiscal year ended March 31,
2021

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2022

Millions of yen

Thousands of U.S. dollars

Millions of yen
Carrying amount of liabilities

-

－

172

76

1,403

－

JSR Corporation Annual Report 2022

76

Notes of Consolidated Financial Statements(35) Financial Instruments
1) Capital Management Policy
The Group considers it vitally important to improve corporate performance on a long-term basis and achieve
improvement in corporate value in the medium to long term by strengthening its research and development
activities from a long-term viewpoint and enhancing competitiveness through development of new businesses.
For capital efficiency, the Group monitors ROE on a timely basis.
2) Financial Risks
The Group is exposed to financial risks related to operating activities (market risk, credit risk and liquidityrisk), and conducts risk management based on a certain policy to avoid or mitigate effects of the risks. For
fund management, approval of the Company’s Board of Directors is received in principle at the beginning ofeach period. Transactions and risk management during the period are principally conducted based on internalmanagement regulations. The Group uses derivatives to avert risks described below, and as its policy, does not
perform any speculative transaction.
(i) Market Risks(a) Exchange Rate Risks
The Group operates business globally and sells products manufactured by the Company and eachsubsidiary and others abroad. Thus, the Group is exposed to the risk that profit or loss, cash flows, etc. areaffected by fluctuations in exchange rates.
To avoid exchange rate risks, the Group mainly utilizes foreign exchange forward contracts as derivativetransactions for trade receivables and payables denominated in foreign currencies.
The Company’s responsible department manages risks in accordance with the derivative transaction
management regulations that specify authority for transactions, maximum amount, etc. and reportsmonthly trading results to responsible directors.
Details of currency derivatives are as follows:
Derivative Transactions to which Hedge Accounting is Not Applied
As of March 31, 2021
Contracted
AmountU.S. dollar

Later than one
year

Millions ofyen

Later than one
year

Fair value

Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen

Forward exchange contracts
Purchase
651
Sell
8,584
Total

Fair value

As of March 31, 2022

Contracted
Amount

9,235

-

16
(462)

2,575
5,533

-

58
(365)

-

(447)

8,108

-

(308)

As of March 31, 2022
Contracted
Later than one
Fair value
Amountyear
Thousands of U.S. Thousands of U.S. Thousands of U.S.
U.S. dollar
dollars
dollars
dollars
Forward exchange contracts
Purchase
21,040471
Sell
45,207(2,985)
Total

66,247-(2,514)－77－

JSR Corporation Annual Report 2022

77

Notes of Consolidated Financial Statements

As of March 31, 2021
Assumedprincipal

Later than one
year

Millions of
yen

As of March 31, 2022
Contracted
AmountFair value

Later than one
year

Fair value

Millions of yen Millions of yen Millions of yen Millions of yen Millions of yen

Currency swap
U.S. dollars
EUR

6,975
6,620

4,982
-

(228)
(33)

28,394-

27,415-(1,483)-

Total

13,595

4,982

(262)

28,394

27,415(1,483)As of March 31, 2022
AssumedLater than one
Fair value
principal
year
Thousands of U.S. Thousands of U.S. Thousands of U.S.
dollars
dollars
dollars
Currency swap
U.S. dollars
EUR

232,000-

224,000-(12,114)-

Total

232,000

224,000(12,114)

Although the Group does not apply hedge accounting to these derivative transactions, it considers that thetransactions effectively offset effects of exchange fluctuations.
Exposure to Exchange Rate Risks
The Group’s exposure of Japanese yen, Korean won and Thai baht as functional currencies against the US dollar,
the major foreign currency, is as follows. These amounts are after deduction of amounts of exchange rate risks
hedged through derivative transactions, etc.
Functional Currency
Japanese yen

As of March 31, 2021
Millions of yen

As of March 31, 2022
Millions of yen

As of March 31, 2022
Thousands of U.S. dollars

1,954

11,31492,446

Korean won

780

1,704

13,924

Thai baht

4,335

3,603

29,442Foreign Exchange Sensitivity Analysis
With regard to foreign currency receivables and payables held by the Group at the end of each fiscal year, effects
of 1% depreciation of the US dollar against each functional currency on profit before tax in the consolidated
statement of profit or loss are as follows. If each currency moves inversely, this will have effects opposite to andat the same amount as the table below. The calculation is based on the assumption that currencies other than thecurrency used do not fluctuate.
Functional Currency

As of March 31, 2021
Millions of yen

As of March 31, 2022
Millions of yen

As of March 31, 2022
Thousands of U.S. dollars

Japanese yen (weak U.S. dollar)

(20)

(113)

(924)

Korean won (weak U.S. dollar)
Thai baht (weak U.S. dollar)

(8)
(43)

(17)
(36)

(139)
(294)

The Group hedges against the risk of exchange rate fluctuations regarding net investment in foreign operations
by using foreign currency borrowings. The Group designates it as hedges of net investment.

－

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JSR Corporation Annual Report 2022

78

Notes of Consolidated Financial Statements(b) Equity Price Risks
Equity instruments held by the Group are principally shares of companies with which the Group has business r
elationships. These shares were acquired to expand businesses mutually and enhance the transaction relationships,
and the Group does not hold the shares for the purpose of short-term trading.
Equity instruments include listed shares and unlisted shares. The Group periodically monitors market value,financial conditions of the issuers (business partners), etc. and reviews the ownership in light of the relationships
with the business partners.
If the share price increases (decreases) by 5% with other changing factors remaining constant, other componentsof equity (net of related tax effects) will increase (decrease) by ¥526million ($4,298thousand) for the fiscal year
ended March 31, 2022 (fiscal year ended March 31, 2021: ¥1,252 million) due to the change in fair value.
(c) Interest Rate Risks
The Group is exposed to interest rate fluctuation risks because it receives variable-rate loans from financial
institutions.
For variable-rate, long-term borrowings involving interest rate fluctuation risks, the Group mitigates the risks by
fixing cash flows using interest rate swap transactions, and applies cash flow hedges.
Exposure to interest rate fluctuation risks for the Group is limited, and effects of interest rate fluctuations are
insignificant.
(ii) Credit Risks
The Group’s trade and other receivables, other financial assets, etc. are exposed to credit risks of customers.
The Group establishes terms of collection and credit limit for transaction partners. In addition, the Group confirms
the credit status periodically by obtaining the latest credit report on transaction partners from external organizations
where necessary and analyzing the report as well as past results of collection and other factors. If it is considered that
there is any change or abnormality in the credit status as a result of the confirmation, measures for protection ofreceivables are taken appropriately, including change in the credit limit, modification of the terms of collection or
obtaining transaction credit insurance.
In the execution of derivative transactions, the Group conducts transactions only with financial institutions with highcredit ratings in principle to mitigate credit risks.
The Group classifies receivables, etc. based on the nature of the credit risk to calculate loss allowance.
In terms of trade receivables that do not include significant financial components, the loss allowance is always
determined as the same amount as lifetime expected credit loss (simplified approach). The amount of expected credit
loss is calculated by classifying receivables, etc. according to the nature of the credit risk of the counterparty andmultiplying the receivables amount by the allowance rate set according to the classification. This allowance rate is
set in view of the probability of future occurrence of credit loss based on external credit reports.
In terms of other receivables, etc., the loss allowance is measured as the same amount as the 12-month expectedcredit loss in principle. The amount of expected credit loss is calculated by multiplying the gross carrying amount by
the allowance rate established as stated above, in accordance with the general approach.
Of other receivables, etc., in terms of assets for which the credit risk has significantly increased from the initialrecognition, including the case where the receivable is past due for payment, and credit-impaired financial assets, theloss allowance is recognized at the same amount as lifetime expected credit loss. In doing so, the amount of expectedcredit loss is determined as the difference between the present value, which is calculated by discounting future
estimated cash flows using the original effective interest rate for the asset, and the gross carrying amount.
The Gross carrying amount and loss allowance of financial assets for which loss allowance is recognized are as
－

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JSR Corporation Annual Report 2022

79

Notes of Consolidated Financial Statements

shown below. Time deposits are excluded from the table below as those are considered to be not exposed to credit
risks.
Trade and other receivables
Grosscarrying
amountAs of March Millions ofyen
31, 2021
As of March Millions ofyen
31, 2022

Measured at 12month expectedcredit losses

Other financial assets

Measured at
lifetime

Measured by

Measured at 12-month

expected credit simplified approach

Measured at lifetime

expected credit losses expected credit losses

losses

16,676-109,332

3,802

168

7,409

-

69,26523

4

Thousandsof U.S.
60,534565,940
192
34
dollars* Financial assets for which loss allowance is measured at the amount equivalent to lifetime expected credit loss are principally
credit-impaired financial assets.
* Credit risk rating:For financial assets for which loss allowance is measured at 12-month expected credit loss, the credit risk rating for expected credit
loss (assets to which the simplified approach is applied also correspond to this) is relatively high compared to financial assets forwhich loss allowance is measured at the amount equivalent to lifetime expected credit loss, and the credit rating of financial assets
falling in the same category is basically the same.

As of March
31, 2022(Millions of yen)
Trade and other receivables
Loss Allowance

Measured at 12month expected

Measured at lifetime

credit losses

lossesexpected credit

As of April 1, 2020-

Other financial assets

Measured bysimplified approach

0

Measured at lifetime

Measured at 12month expectedcredit losses

expected credit
losses

789

0

130

Increase

-

-

299

2

40

Decrease (Utilization)

-

(0)

(118)

-

-

Decrease (Reversal)

-

-

(116)

(1)

(2)

Other

-

-

(67)

(1)

1

As of March 31, 2021

-

-

717

0

168

Increase

-

-

192

-

43

Decrease (Utilization)

-

-

(158)

-

(48)

Decrease (Reversal)

-

-

(217)

-

(69)

Other
Transfer to assets
associated with disposalgroup classified as held
for sale

-

-

58

(0)

(48)

-

-

(23)

-

(43)

As of March 31, 2022

-

-

567

-

4

－

80

－

JSR Corporation Annual Report 2022

80

Notes of Consolidated Financial Statements(Thousands of U.S. dollars)

As of March 31, 2021

-

-

5,856

1

1,374

Increase

-

-

1,567

-

354

-

-

(1,292)-(389)

Decrease (Reversal)--(1,773)

-

(561)

Other

-

-

470

(1)

(389)

Transfer to assets
associated with disposalgroup classified as held
for sale

-

-

(191)

-

(354)

As of March 31, 2022

-

-

4,637

-

34

Decrease (Utilization)* There is no significant change in gross carrying amount that could affect a change in loss allowance.

The maximum exposure for credit risk of financial assets is the carrying amount presented in the
consolidated statement of financial position.
With regard to debt guarantees, the maximum exposure for credit risk is as follows:

Guarantee Obligation

As of March 31,
2021

As of March 31,2022

As of March 31,
2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars---* Loss allowance related to losses that could arise due to performance of a debt guarantee contract has not been recorded.

－

81

－

JSR Corporation Annual Report 2022

81

Notes of Consolidated Financial Statements(iii) Liquidity Risks
Liquidity risks are the risks that the Group cannot execute a payment on the due date. Funds of the Group as awhole are in a position of net cash where funds held exceed borrowings. The Group formulates a financial plan
based on the annual business plan, and then manages liquidity risks by ensuring an appropriate balance between
direct and indirect financing and between short-term and long-term financing to prepare for these risks.
The balance of financial liabilities of the Group by maturity is as follows:
As of March 31,
2021

Carrying
amountNot later
than one

1-2 years

2-3 years

3-4 years(Millions of yen)

Later than 5

4-5 years

years

year

Contractual
cash flows
Total

Trade and otherreceivables

100,797

100,797

-

-

-

-

-

100,797

Borrowings

84,40938,067

8,954

13,70515,033

8,272

1,389

85,421

Bonds payable

34,869

97

97

97

97

13,097

22,33635,820

815

544

-

-

-

-

271

815

22,373

3,800

2,612

2,344

2,122

2,044

11,50824,430243,263

143,305

11,662

16,146

17,252

23,41335,504247,283

Derivative liabilities
Lease liabilities
Total(Millions of yen)
As of March 31,
2022

Carrying
amountNot later
than oneyear

1-2 years

2-3 years

3-4 years

4-5 years

Later than 5
years

Contractual
cash flows
Total

Trade and otherreceivables

63,54863,548

-

-

-

-

-

63,548Commercial papers

10,003

10,003

-

-

-

-

-

10,003

Borrowings

73,01462,920

5,318

4,375

2,148

2,138

-

76,898

Bonds payable

34,890

97

97

97

13,09773

22,16235,623

Derivative liabilities

2,069

505

-

-

-

-

1,564

2,069

Lease liabilities

19,215

3,573

3,034

2,070

1,961

1,879

7,896

20,414

202,740

140,646

8,449

6,542

17,206

4,090

31,622

208,556

Total(Thousands of U.S. dollars)
As of March 31,
2022

Carrying
amountNot later
than one

1-2 years

2-3 years

3-4 years

4-5 years

year

Later than
5 years

Contractual
cash flows
Total

Trade and otherreceivables

519,228

519,228

-

-

-

-

-

519,228

Commercial papers

81,734

81,734

-

-

-

-

-

81,734

Borrowings

596,566

514,092

43,45035,74917,54917,465-628,306

Bonds payable

285,075

791

791

791

107,009600

181,079

291,060---

12,77816,904

Derivative liabilities

16,9044,125-

Lease liabilities

157,001

29,19424,78916,912

16,026

15,35764,517

166,794

1,656,509

1,149,165

69,03053,452

140,583

33,422

258,374

1,704,026

Total

－

82

－

JSR Corporation Annual Report 2022

82

Notes of Consolidated Financial Statements

3) Fair Value of Financial Instruments
The Group classifies financial instruments into the following three levels in the fair value hierarchy
according to the observability of inputs used for fair value measurement in markets:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Directly or indirectly observable inputs that are not included in Level 1
Level 3: Fair value that is determined using a valuation technique including unobservable inputs
Carrying amount and fair value of financial instruments measured at amortized cost are as follows:
As of March 31, 2021

As of March 31, 2022

As of March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Carrying
AmountFair Value

Carrying

Fair Value

AmountCarrying
AmountFair Value

Long-term loans
payable62,07660,874

22,383

21,584

182,881

176,350

Bonds payable

34,86935,47434,89035,413

285,075

289,347

The above figures include balances to be collected within one year or to be repaid and redeemedwithin one year.
Financial instruments for which the carrying amount is reasonably approximate to the fair value
are not included in the table above.
The fair value of long-term borrowings is calculated by discounting the total amount of principal
and interest using the interest rate at which a similar new loan is assumed to be made.
Borrowings are classified as Level 3 in the fair value hierarchy.
The fair value of bonds payable is calculated by discounting future cash flows using the current
market interest rate.
Bonds payable are classified as Level 2 in the fair value hierarchy.
Assets and liabilities measured at fair value by the Group are as follows:

－

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JSR Corporation Annual Report 2022

83

Notes of Consolidated Financial Statements(Millions of yen)
As of March 31, 2021
Level 1

Level 2

Level 3

Total

<Financial Assets>
Financial assets measured at fair value throughprofit or loss
Investments (equity financial assets)

-

-

3,805

3,805

Derivatives

-

1

-

1

25,141-

17,23942,380Financial assets measured at fair value throughother comprehensive income
Investments (equity financial assets)
Financial assets defined as hedging instruments
Derivatives
Total

-

-

-

-

25,141

1

21,044

46,186

-

544

-

544

-

271

-

271

-

815

-

815

<Financial Liabilities>
Financial liabilities measured at fair value
through profit or loss
Derivatives
Financial liabilities measured at fair value
through other comprehensive income
Financial liabilities defined as hedging
instruments
Derivatives
Total

－

84

－

JSR Corporation Annual Report 2022

84

Notes of Consolidated Financial Statements(Millions of yen)
As of March 31, 2022
Level 1

Level 2

Level 3

Total

<Financial Assets>
Financial assets measured at fair value throughprofit or loss
Investments (equity financial assets)

-

-

1,775

1,775

Derivatives

-

-

-

-

10,608-17,88728,495

Financial assets measured at fair value throughother comprehensive income
Investments (equity financial assets)
Financial assets defined as hedging instruments
Derivatives
Total

-

-

-

-

10,608-19,66130,269

-

2,069

-

2,069

-

-

-

-

-

2,069

-

2,069

<Financial Liabilities>
Financial liabilities measured at fair value
through profit or loss
Derivatives
Financial liabilities measured at fair value
through other comprehensive income
Financial liabilities defined as hedging
instruments
Derivatives
Total(Thousands of U.S. dollars)
As of March 31, 2022
Level 1

Level 2

Level 3

Total

<Financial Assets>
Financial assets measured at fair value throughprofit or loss
Investments (equity financial assets)--

14,49914,499Derivatives

-

-

-

-

86,674-

146,147

232,821

Financial assets measured at fair value throughother comprehensive income
Investments (equity financial assets)
Financial assets defined as hedging instruments
Derivatives
Total

-

-

-

-

86,674-

160,645

247,320-

16,904-

16,904

-

-

-

-

-

16,904-

16,904<Financial Liabilities>
Financial liabilities measured at fair value
through profit or loss
Derivatives
Financial liabilities measured at fair value
through other comprehensive income
Financial liabilities defined as hedging
instruments
Derivatives
Total

Transfer between levels in the fair value hierarchy is recognized on the day when the event orchange in circumstances that caused the transfer occurred. In each fiscal year, there was no－ 85－

JSR Corporation Annual Report 2022

85

Notes of Consolidated Financial Statements

significant transfer between Level 1 and Level 2 in the fair value hierarchy.
Changes in financial instruments classified as Level 3 are as follows:
Fiscal year ended March
31, 2021

Fiscal year ended March
31, 2022

Fiscal year ended March
31, 2022(from April 1, 2020 toMarch 31, 2021)(from April 1, 2021 toMarch 31, 2022)(from April 1, 2021 toMarch 31, 2022)

Millions of yen

Millions of yen

Thousands of U.S. dollars

Balance at the beginning

19,94221,098

Total gains and losses

446

(947)

(7,734)(32)(1,393)(11,384)

Profit or loss (Note1)
Other comprehensive income (Note2)

172,383

478

447

3,650

1,644

1,676

13,694

Selling-(1,396)(11,406)

Other

(934)

29

240

-

(799)

(6,532)21,09819,661

160,645

Purchase

Transfer to assets associated withdisposal group classified as held for sale
Balance at the end(Note) 1. Gains and losses included in profit or loss relate to financial assets measured at fair value through profit or loss.
These gains and losses are included in "Operating income," "Operating expenses," "Finance income" and "Finance costs."
2. Gains and losses included in other comprehensive income relate to financial assets measured at fair value through othercomprehensive income as at the reporting date. These gains and losses are included in “net change in financial assets
measured at fair value through other comprehensive income” in the consolidated statement of comprehensive income.

Financial assets and liabilities classified as Level 2 are derivative transactions related to foreignexchange forward contracts, interest rate swaps, etc. Fair value of foreign exchange forward
contracts, interest rate swaps, etc. is calculated based on observable market data such as the interest
rate presented by financial institutions with which the Group has transactions and others.
Financial assets classified as Level 3 are mainly unlisted shares. With regard to valuation of unlisted
shares, principally, the fair value is measured taking into account future profitability or cash flowsof the investees comprehensively. The results are reviewed and approved by a person withappropriate authority. For financial instruments classified as Level 3, an increase or decrease in fairvalue if unobservable inputs are changed to reasonably possible alternative assumptions is not
significant.
4) Hedge Accounting
Effects of hedging instruments designated as hedge on the Group’s consolidated statement offinancial position are as follows:(Millions of yen)
Carrying amount of hedging
instruments

Notional principal

As of March 31, 2021

of hedging
instruments

Asset

Item on the consolidated
statement of financial position

Liability

Cash flow hedges
Interest rate risk
Interest rate swap

2,048

-

38

Other financial liabilities

8,691

-

8,691

Borrowings

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars($ 79 million)
－

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JSR Corporation Annual Report 2022

86

Notes of Consolidated Financial Statements(Millions of yen)
As of March 31, 2022

Carrying amount of hedging
instruments

Notional principalof hedging
instruments

Asset

Item on the consolidated
statement of financial position

Liability

Cash flow hedges
Interest rate risk
Interest rate swap

796

-

5

8,139

-

8,139

Liabilities associated withdisposal group classified asheld for saleHedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars

Liabilities associated withdisposal group classified
as held for sale($ 67 million)(Thousands of US dollars)
As of March 31, 2022

Carrying amount of hedging

Notional principalof hedging
instruments

Item on the consolidated
statement of financial position

instruments
Asset

Liability

Cash flow hedges
Interest rate risk
Interest rate swap

6,500

-

40

Liabilities associated withdisposal group classified
as held for sale

66,500Liabilities associated withdisposal group classified
as held for saleHedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars

66,500

There are no cash flow hedge reserves arising from hedge relationship for which the hedge accounting
was discontinued, and no ineffective portion of hedges recognized in profit or loss.
Effects of hedging instruments designated as cash flow hedges and hedges of net investment on theGroup’s profit or loss and other comprehensive income are as follows:（Millions of yen）
Fiscal year ended March 31,
2021 (April 1, 2020 to March 31,
2021)

Hedging gains(losses)

Transfer from other componentsof equity to profit or loss as Item of transfer to profit or loss
reclassification adjustments as reclassification adjustments(Note)

recognized as othercomprehensive income(Note)Cash flow hedges
Interest rate risk
Interest rate swap

28

(37)

Financial costs

517

-

-

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars(Note) Before tax effect

－ 87

－

JSR Corporation Annual Report 2022

87

Notes of Consolidated Financial Statements（Millions of yen）
Fiscal year ended March 31,
2022 (April 1, 2021 to March 31,
2022)

Hedging gains(losses)

Transfer from other componentsof equity to profit or loss as Item of transfer to profit or loss
reclassification adjustments as reclassification adjustments(Note)

recognized as othercomprehensive income(Note)Cash flow hedges
Interest rate risk
Interest rate swap

34

(32)

Financial costs

(503)

-

-

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars(Note) Before tax effect(Thousands of U.S. dollars)
Fiscal year ended March 31,
2022 (April 1, 2021 to March 31,
2022)

Hedging gains(losses)
recognized as othercomprehensive income(Note)

Transfer from other componentsof equity to profit or loss as Item of transfer to profit or loss
reclassification adjustments as reclassification adjustments(Note)Cash flow hedges
Interest rate risk
Interest rate swap

274

(261)

(4,114)-

Financial costs

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars(Note) Before tax effect

－ 88

-

－

JSR Corporation Annual Report 2022

88

Notes of Consolidated Financial Statements(36) Subsidiaries
The circumstances of the main subsidiaries of the Company is as below.
Name of the company

Address

Percentage of
Voting Rights%

ELASTOMIX CO., LTD.

Yokkaichi, Mie, Japan

98.5

Emulsion Technology, Co., Ltd.

Yokkaichi, Mie, Japan

100.0

Techno-UMG Co., Ltd.

Minato-ku, Tokyo, Japan

51.0

JAPAN COLORING CO., LTD.

Yokkaichi, Mie, Japan

100.0

JSR Trading Co., Ltd.

Minato-ku, Tokyo, Japan

100.0

MEDICAL&
BIOLOGICAL
Minato-ku, Tokyo, JapanLABORATORIES CO., LTD.

100.0

ELASTOMIX(THAILAND)CO.,LTD.

Rayong,Thailand

86.7（65.0)JSR Micro N.V.

Leuven, Belgium

100.0

JSR Micro,Inc.

Sunnyvale, CA U.S.A.

100.0（100.0)Inpria Corporation

Corvallis, Oregon U.S.A.

100.0

JSR Micro Korea Co.,Ltd.

Chungcheongbuk-do, Korea

100.0

JSR Micro Taiwan Co.,Ltd.

Yunlin County, Taiwan

100.0

JSR BST Elastomer Co.,Ltd.

Bangkok,Thailand

51.0

KBI Biopharma,Inc.

Durham,NC, U.S.A

90.0

JSR MOL Synthetic Rubber Ltd.

Budapest, Hungary

51.0

Selexis SA

Geneva, SWITZERLAND

100.0

JSR Micro (Changshu) Co.,Ltd.

Changshu, Jiangsu Province, China

51.0

Crown Bioscience International

San Diego, CA U.S.A.

100.0

EUV Resist Manufacturing & Qualification
Leuven, Belgium
Center N.V.
－

69.4
(69.4)89－

JSR Corporation Annual Report 2022

89

Notes of Consolidated Financial Statements

Name of the company

Address

Percentage of
Voting Rights

JSR North America Holdings, Inc. Sunnyvale, CA U.S.A.

100.0

JSR Life Sciences, LLC

100.0(100.0)Sunnyvale, CA U.S.A.

The figure in the parentheses in the column of Percentage of Voting Rights is Indirect ownership ratio.
The company acquired all stake in Inpria Corporation in this period and holds 100% voting rights. (As of the end of theprevious consolidated fiscal year ；21.3%)

The number of consolidated subsidiaries as of March 31, 2022 was 64 (64 as of March 31, 2021).
Changes in the consolidated subsidiaries in the current fiscal year are as follows:
The number of companies consolidated by acquisition, establishment, etc.: 3
The number of subsidiaries excluded by liquidation, sales, etc.: 3
The condensed financial information for consolidated subsidiaries for which the Group has recognizedsignificant non-controlling interests are as follows. The condensed financial information shows the amount
before elimination of transactions within the Group.

Techno-UMG Co., Ltd.
(1) Proportion of non-controlling interests and the cumulative amount of non-controlling interests
As of March 31, 2021

As of March 31, 2022

As of March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S. dollars

Proportion of share of
non-controlling interests
The cumulative amount of
non-controlling interests

49%

49%

49%

20,26821,133

172,669(2) Profit or loss allocated to non-controlling interests and dividends paid for non-controlling interests
Fiscal year ended
March 31, 2022
Millions of yen

Fiscal year ended
March 31, 2021
Millions of yen
Profit or loss allocated to
non-controlling interests
Dividends paid for noncontrolling interests

Fiscal year ended
March 31, 2022
Thousands of U.S. dollars

1,475

1,834

14,986

423

1,097

8,965

(3) The condensed financial information
1) Condensed Statement of Financial Position

Current assets
Non-current assets
Total assets

As of March 31, 2021
Millions of yen
43,26623,92867,194－ 90

As of March 31, 2022
As of March 31, 2022
Thousands of U.S. dollars
Millions of yen
42,862350,207
24,091
196,842
66,953547,049－

JSR Corporation Annual Report 2022

90

Notes of Consolidated Financial Statements

Non-current liabilities
Total current liabilities
Total equity
Total liabilities and equity

853
21,48145,712
67,194793
19,53047,424
66,953

6,482
159,568
387,480547,049

2) Condensed Statements of Profit or Loss and Comprehensive Income

Revenue
Profit (loss)
Comprehensive income

Fiscal year ended
Fiscal year ended
March 31, 2022
March 31, 2022
Millions of yen
Thousands of U.S. dollars
78,357640,227
3,970
32,434
3,951
32,278

Fiscal year ended
March 31, 2021
Millions of yen
66,3463,109
3,2493) Condensed Statement of Cash Flows

Cash flows from operating
activities
Cash flows from investing
activities
Cash flows from financing
activities
Net increase (decrease) in cash
and cash equivalents
Cash and cash equivalents at theend of the period

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2022

Millions of yen

Millions of yen

Thousands of U.S.
dollars

10,073(2,815)(863)
6,395
10,376(1,792)(14,643)(2,239)(18,296)(3,499)(28,591)(7,531)(61,530)

2,845

23,248(37) Related Parties
1) Transactions with Joint Venture
Fiscal year ended March 31, 2021 (April 1, 2020 to March 31, 2021)
Attribute

JointventureName of the company

KRATON JSR
ELASTOMERS K. K.

Contents of transactions

Manufacturing consignment ofelastomer products

Millions of yen

Balance at theend of thecurrent fiscal
year
Millions of yen

6,109

2,869

Transaction

amountSupply of raw material gas
2,095(Notes) 1. Transactions with joint venture have been determined through price negotiations in light of market－ 91 －

1,019

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91

Notes of Consolidated Financial Statements

prices and others. In addition, the receivables and payables are settled in cash and consistent with theterms of third party settlements.
2.

There is no outstanding balance of collateral or guarantee. Loss allowance has not been made for thereceivables.

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Attribute

JointventureName of the company

KRATON JSR
ELASTOMERS K. K.

Contents of transactions

Millions of yen

Balance at theend of thecurrent fiscal
year
Millions of yen

10,6084,570

Transaction

amountManufacturing consignment ofelastomer products

Supply of raw material gas
5,173(Notes) 1. Transactions with joint venture have been determined through price negotiations in light of market

2,192

prices and others. In addition, the receivables and payables are settled in cash and consistent with theterms of third party settlements.
2. There is no outstanding balance of collateral or guarantee. Loss allowance has not been made for thereceivables.

Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Attribute

Name of the company

Contents of transactions

Balance at theend of thecurrent fiscal
year

Transaction

amountThousands of
U.S. dollars

Thousands of
U.S. dollars

Jointventure(Notes) 1.

2.
.

KRATON JSR
ELASTOMERS K. K.

Manufacturing consignment of

86,672elastomer products

37,33942,263
17,908Supply of raw material gas
Transactions with joint venture have been determined through price negotiations in light of market
prices and others. In addition, the receivables and payables are settled in cash and consistent with theterms of third party settlements.
There is no outstanding balance of collateral or guarantee. Loss allowance has not been established
for the receivables.

2）Key Management Personnel Compensation

Fiscal year ended
March 31, 2021 (April
1, 2020 to March 31,
2021)

Fiscal year ended
March 31, 2022 (April
1, 2021 to March 31,
2022)

Fiscal year ended
March 31, 2022 (April
1, 2021 to March 31,
2022)

Millions of yen

Millions of yen

Basic compensation

339

335

Thousands of U.S. dollars
2,740

Bonuses
Share-based remuneration

149
124

234
426

1,915
3,482

613

996

8,137

Total

－

92

－

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Notes of Consolidated Financial Statements(38) Commitments
Commitments related to expenditures taking place after the last day of the fiscal year are as follows:
As of March 31,
As of March 31,
As of March 31,
2021
2022
2022
Millions of yen

Millions of yen

Thousands of U.S.
dollars

16,672

12,541

102,471

Acquisition of property, plant andequipment(39) Subsequent Events
Transfer of the Elastomers Business
On April 1, 2022, the Company had Japan Synthetic Rubber Spin-off Preparation Co., Ltd., which wasestablished on May 12, 2021 as a subsidiary of the Company, take over the Elastomers Business through anabsorption-type company split. Based on the share transfer agreement concluded with ENEOS Corporation on
May 11, 2021, the transfer of all shares of the succeeding company to ENEOS Corporation was completed.
The Company classified assets and liabilities of the Elastomers Business as a disposal group classified as held forsale and classified the Elastomers Business as discontinued operations from the current fiscal year.
The impact from this transaction on the consolidated financial statements in the following fiscal year is still underreview.
Purchase of Treasury shares
On April 25, 2022, the Board of Directors of the Company resolved to purchase its treasury shares pursuant to
the provisions of Article 156, which is applicable in accordance with Article 165 (3) of the Corporation Act ofJapan.
(1) Purpose of the purchase
To improve capital efficiency and exercise agile capital policies corresponding to changes in the businessenvironment. Based on the Company’s shareholders return policy, which is approximately 50% of the total
shareholders return ratio while maintaining financial soundness for growth investments, it intends to purchase its
own shares.
(2) Details of the purchase1) Method of the purchase:
Market purchase through a securities company based on a trade contract2)Type of shares to be purchased:
Common shares of the Company
3) Maximum number of shares:
Up to 10,000,000 shares (approximately 4.65% of total number of shares issued , excluding treasury shares)
4) Maximum value of the buyback: Up to 30,000,000,000 yen ($ 245,118 thousand).
(3) Period of purchase: From May 9, 2022 to December 30, 2022 (Japan Standard Time)
－

93

－

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Notes of Consolidated Financial Statements

Important Cancellation of Treasury shares
At the meeting of the Board of Directors held on August 1, 2022, the Company resolved the cancellation oftreasury shares as provided for under Article 178 of the Companies Act to improve capital efficiency and improveshareholder value, and the cancellation of treasury shares was completed on August 15, 2022.
1. The content of the resolutions of the Board of Directors(1) Type of shares cancelled: Common shares of the Company(2) Number of shares cancelled: 17,726,145 shares (7.8% of total number of issued shares before thecancellation)(3) Date of cancellation: August 15, 2022
2. Total number of issued shares after cancellation: 208,400,000 shares (including treasury shares)

Issuance of corporate bonds
Based on the comprehensive resolution on issuance of unsecured bonds at the meeting of the Board of Directors
held on May 9, 2022, the Company determined the issuance conditions on August 26, 2022.
The details are as below.
Name of the bonds

JSR Corporation
Unsecured Bonds (with special pari passu conditions among bonds) series 11

Total amount of bonds¥ 5,000 million

Denomination per bond¥ 100 million

Coupon rate

0.345%

Date of coupon payment

March 1 and September 1, every year

Issue price

100 yen per face value of 100 yen

Date of issuance

September 1, 2022

Method and due date forthe redemption

Collateral
Use of proceeds

1．Redemption amount
100 yen per face value of 100 yen
2．Redemption and maturity date(1) The principal of the bonds will be redeemed in a lump sum on September 1,
2027. (In the case of retirement by purchase, the total amount of the bondspurchased will be deducted.)(2) If the redemption date is a bank holiday, it will be advanced to a previous
business day.
(3) The issuer may repurchase the bonds after the payment date unless otherwise
provided in the laws and ordinances or regulations such as operating rules
regarding to the service of the custody of transfer agency stated in the separate
paragraph.
No collateral or guarantee is pledged, and no assets are specificallyreserved to secure the bonds.
Repayment of borrowings－ 96 －JSR Corporation Annual Report 2022

94

Notes of Consolidated Financial Statements

Name of the bonds

JSR Corporation
Unsecured Bonds (with special pari passu conditions among bonds) series 12

Total amount of bonds¥ 5,000 million

Denomination per bond¥ 100 million

Coupon rate

0.544%

Date of coupon payment

March 1 and September 1, every year

Issue price

100 yen per face value of 100 yen

Date of issuance

September 1, 2022

Method and due date forthe redemption

Collateral
Use of proceeds

1．Redemption amount
100 yen per face value of 100 yen
2．Redemption and maturity date(1) The principal of the bonds will be redeemed in a lump sum on August 31,
2029. (In the case of retirement by purchase, the total amount of the bondspurchased will be deducted.)(2) If the redemption date is a bank holiday, it will be advanced to a previous
business day.
(3) The issuer may repurchase the bonds after the payment date unless otherwise
provided in the laws and ordinances or regulations such as operating rules
regarding to the service of the custody of transfer agency stated in the separate
paragraph.
No collateral or guarantee is pledged, and no assets are specificallyreserved to secure the bonds.
Repayment of borrowings

－

97

－

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Notes of Consolidated Financial Statements

Name of the bonds

JSR Corporation
Unsecured Bonds (with special pari passu conditions among bonds) series 13

Total amount of bonds¥ 15,000 million

Denomination per bond¥ 100 million

Coupon rate

0.619%

Date of coupon payment

March 1 and September 1, every year

Issue price

100 yen per face value of 100 yen

Date of issuance

September 1, 2022

Method and due date forthe redemption

Collateral
Use of proceeds

1．Redemption amount
100 yen per face value of 100 yen
2．Redemption and maturity date(1) The principal of the bonds will be redeemed in a lump sum on September 1,
2032. (In the case of retirement by purchase, the total amount of the bondspurchased will be deducted.)(2) If the redemption date is a bank holiday, it will be advanced to a previous
business day.
(3) The issuer may repurchase the bonds after the payment date unless otherwise
provided in the laws and ordinances or regulations such as operating rules
regarding to the service of the custody of transfer agency stated in the separate
paragraph.
No collateral or guarantee is pledged, and no assets are specificallyreserved to secure the bonds.
Repayment of borrowings

－

98

－

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96Independent Auditor’s Report

Independent auditor’s report
To the Board of Directors of JSR Corporation:
OpinionWe have audited the accompanying consolidated financial statements of JSR Corporation (“theCompany”) and its consolidated subsidiaries (collectively referred to as “the Group”) , which comprisethe consolidated statement of financial position as at March 31, 2022, and the consolidated statements
of profit or loss，comprehensive income, changes in equity and cash flows for the year then ended, andnotes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2022, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRS).
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Consolidated Financial Statements section of our report. We are independent of the Groupin accordance with the ethical requirements that are relevant to our audit of the consolidated financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Emphasis of matter
We draw attention to Note 39 “Subsequent Events” of the consolidated financial statements.
On April 1, 2022, the Company separated its Elastomer business into a standalone company named“Japan Synthetic Rubber Spin-off Preparation Co., Ltd.”, which was established on May 12, 2021 as a
subsidiary of the Company, by an absorption-type company split. Additionally the transfer of all sharesof Japan Synthetic Rubber Spin-off Preparation Co., Ltd.to ENEOS Corporation completed.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
"Appropriateness of the impairment loss on non-financial assets used in the Elastomers business" which
was a key audit matter in the previous fiscal year, is not a key audit matter in this fiscal year as theimpairment loss on non-financial assets used in the business was recognized based on the fair value less

JSR Corporation Annual Report 2022

97Independent Auditor’s Reportcost of disposal in the previous fiscal year and the degree of uncertainty of the estimate for the
impairment loss in the current fiscal year has been relatively reduced.
Appropriateness of management’s evaluation of the consideration for the acquisition of sharesand the valuation of intangible assets identified related to the acquisition of Inpria corporation
The key audit matter

How the matter was addressed in our audit

As described in Note 8, “Business
Combination and Acquisition of Noncontrolling Interest” of the consolidated
financial statements, the Company acquired
additional shares of Inpria Corporation(“Inpria”), which develops and manufactures
metal based EUV resists as semiconductormaterials, on October 29, 2021. Previously
an investment accounted for using the equity
method, Inpria became a wholly owned
subsidiary of the Company on the dateadditional shares were acquired. The
Company recognized a valuation gain of\7,467 million in the consolidated statementof profit or loss, as a result of theremeasurement of its equity interests (21.3%)
held by the Company, immediately prior to
the date of acquisition, at fair value on theacquisition date. The total consideration for
the acquisition was \56,101 million
including the remeasurement at fair value.
The Company also measured an amount for
goodwill as the difference between theconsideration for the acquisition and the net
amount of identifiable assets and liabilities.
As a result, as described in Note 8, “Business
Combination and Acquisition of Noncontrolling Interest” of the consolidated
financial statements, the Company
recognized intangible assets (technology
assets) of \8,218 million and goodwill of\49,049 million on the acquisition date of theshares in the consolidated financial
statements.

The primary procedures we performed to assess
whether management’s evaluation of the consideration
for the acquisition of shares and the valuation of
intangible assets identified related to the acquisition ofInpria was appropriate included the following:•

Assessed the appropriateness of sales priceprojections by comparing them with the prices ofsimilar products set at the start of the sale and thesubsequent price transition; andThe consideration for the acquisition ofshares of Inpria is determined as the fairvalue of Inpria’s shares measured using thediscounted present value of future cash flows
based on the business plan approved by the
management. The Company used an externalvaluation expert to measure the fair value.
However, as the estimates underlying the•Assessed the appropriateness of the sales growth
rates and sales volume projections used in thebusiness plan by comparing them with results
estimated using available external data, such as
forecasts for market sales volume of similar
products and for mass-production schedules foreach nodes.

(1) Internal control testing
We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevant to
the evaluation of the consideration for the acquisitionof shares and the valuation of intangible assets
identified related to the acquisition of Inpria. In thisassessment, we focused our testing on controls relevantto the use of external experts by management inrelation to the selection of experts, the materials to besubmitted to experts and the evaluation of the results ofthe expert's work.
(2) Assessment of the appropriateness of theevaluation of the consideration for theacquisition of shares and the valuation of
intangible assets
In order to assess the appropriateness of key
assumptions used in preparing the business plan, which
formed the basis for the fair value of shares of Inpria
and the fair value of intangible assets (technology
assets), we inquired of management and the personnel
responsible for the digital solutions business about thebasis on which those assumptions were developed. In
addition, we:

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Independent Auditor’s Reportfuture cash flows include assumptions, suchas a sales growth rate, sales prices and sales
volume projections in terms of the market
environment, the future cash flows involved
a high degree of uncertainty, andmanagement’s judgment thereon had asignificant effect on the estimated future cash
flows.
Additionally, identifiable assets acquired
through a business combination are measured
at fair value on the date of acquisition. The
Company measured the fair value of
intangible assets (technology assets) with theassistance of an external valuation expert
using the valuation model (the excess
earnings method) adapted for fair value
measurement. The measurement includes
assumptions that involve management's
judgment regarding future sales (sales priceand sales volume) generated from thetechnology related to metal based EUV
resists and technology obsolescence rates of
the technology held by Inpria. Accordingly,
there was a high degree of uncertainty.

Furthermore, we performed the following proceduresby involving a valuation specialist within our domestic
network firms to assist with our evaluation:•

Assessment of the appropriateness of themeasurement of the fair value and the model used
to estimate the discount rate based on subject
matters relevant to valuation and the requirementsof accounting standards;•

Examination of the consistency between thetechnology obsolescence rate and the remaining
period of the main patent held by Inpria; andAssessment of the appropriateness of input data used
for the calculation of the discount rate throughcomparison with relevant data published by externalorganizations.

In addition, selecting an appropriate
calculation method and input data formeasuring the fair value of shares of Inpria
and the identifiable assets requires a highdegree of expertise in valuation.
We, therefore, determined that ourassessment of the appropriateness ofmanagement’s evaluation of theconsideration for the acquisition of sharesand the valuation of intangible assets
identified related to the acquisition of Inpria
was one of the most significant matters in our
audit of the consolidated financial statements
for the current fiscal year, and accordingly, a
key audit matter.
Appropriateness of management’s judgment as to whether an impairment loss should berecognized on goodwill allocated to the drug discovery and development services business
The key audit matter

How the matter was addressed in our audit

As described in Note 18, “Impairment on
Non-Financial Assets” of the consolidated
financial statement, the Group recognized
goodwill of \42,042 million allocated to thedrug discovery and development services

The primary procedures we performed to assess
whether management’s judgment with respect to therecognition of an impairment loss on goodwill
allocated to the drug discovery and development

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Independent Auditor’s Reportbusiness, which represented 5% of total
assets in the consolidated financial
statements. The goodwill arose when the
Company acquired control of Crown
Bioscience International.
Goodwill is required to be tested for
impairment at least annually or more
frequently whenever it is determined that
there is an impairment indicator. In the
impairment testing, when the recoverable
amount of a group of cash-generating units isless than the carrying amount, the carrying
amount is reduced to the recoverable amount,and the resulting decrease in the carrying
amount is recognized as an impairment loss.
The recoverable amount is the higher of
either the value in use or fair value less costsof disposal.
In the annual impairment testing, no
impairment loss was recognized in thecurrent fiscal year as the value in use of the
drug discovery and development services
business exceeded the carrying amount. The
margin between the value in use and thecarrying amount has increased whencompared to the previous fiscal year further
supporting no impairment loss to berecognized in the current fiscal year.
The value in use was discounted to thepresent value of an estimated amount of
future cash flows based on the five-yearbusiness plan approved by management. The
five-year revenue projection based on thebusiness plan involved a high degree of
uncertainty as the revenue is affected by the
future growth potential of the CRO business
in which the drug discovery and development
services business operates and the capacity ofthe equipment used in the business.
Accordingly, management’s judgment
thereon had a significant effect on theestimated future cash flows.
In addition, selecting appropriate models andinput data for estimating the discount rateservices business was appropriate included thefollowing:(1) Internal control testing
We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevant tomeasuring the value in use used in the impairment
testing on goodwill. In this assessment, we focused our
testing on controls to prevent and/or detect the use of
inappropriate assumptions to estimate the value in use.
(2) Assessment of the reasonableness of theestimated value in use
We inquired of management and the personnel
responsible for the drug discovery and development
services business about the basis on which key
assumptions were developed to assess theappropriateness of those assumptions used in preparing
the business plan, which formed the basis for
estimating future cash flows. We also assessed whether
assumptions used in preparing the business plan wereappropriately selected, by estimating the impact on
future cash flows for the subsequent fiscal years whenthe effects on specific uncertainties were incorporated
into each assumption. In addition, we:•Compared the five-year revenue included in thebusiness plan with available external data related
to the market growth rate; and•Examined the consistency of the capacity of theequipment which is currently held and/or is
expected to be invested in the future with the
projected revenue.

Furthermore, we performed the following proceduresby involving a valuation specialist within our domestic
network firms in assisting our evaluation of the
discount rate:•

Assessment of the appropriateness of the model
used to estimate the discount rate based on subject
matters relevant to valuation and the requirementsof accounting standards; and•Assessment of the appropriateness of input data
through comparison with relevant data publishedby external organizations.

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Independent Auditor’s Reportrequires a high degree of expertise invaluation.
We, therefore, determined that ourassessment of the appropriateness ofmanagement’s judgment as to whether an
impairment loss should be recognized on
goodwill allocated to the drug discovery anddevelopment services business was one of
the most significant matters in our audit of
the consolidated financial statements for thecurrent fiscal year, and accordingly, a key
audit matter.
Other Information
The other information comprises the information included in the Annual Report, but does not include
the consolidated financial statements, the financial statements, and our auditor’s reports thereon.
Management is responsible for the preparation and presentation of the other information. Corporate
auditors and the board of corporate auditors are responsible for overseeing the directors’ performanceof their duties with regard to the design, implementation and maintenance of the reporting process forthe other information.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read theother information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears
to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors
for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines isnecessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with IFRS and using the going concern basis of accounting unless management either
intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’
performance of their duties with regard to the design, implementation and maintenance of the Group’s
financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

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Independent Auditor’s Report

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for one resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or theoverride of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the objective of the audit is not to express an
opinion on the effectiveness of the Group’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting
and based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group tocease to continue as a going concern.



Evaluate whether the presentation and disclosures in the consolidated financial statements are inaccordance with IFRS, the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.

Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.

We communicate with corporate auditors and the board of corporate auditors regarding, among othermatters, the planned scope and timing of the audit, significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we havecomplied with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and whereapplicable, related safeguards.
From the matters communicated with corporate auditors and the board of corporate auditors, we
determine those matters that were of most significance in the audit of the consolidated financial
statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.

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Independent Auditor’s Report

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2022 are presented solely for convenience. Our audit also included the translation of
yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis
described in Note 2 to the consolidated financial statements.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of
the Certified Public Accountants Act of Japan.

Iwao Hirano
Designated Engagement Partner
Certified Public Accountant

Toshiyuki Tamura
Designated Engagement Partner
Certified Public Accountant

Yukihiro Kase
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, Japan
August 29 , 2022

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