MATERIALSINNOVATION
Annual Report 2023
From April 2022 to March 2023

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, 2023 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－

Consolidated Financial Statements and Notes
1. Consolidated Financial Statements(1) Consolidated Statement of Financial Position

Note

As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

AssetsCurrent assets
Cash and cash equivalents
8
Trade and other receivables
9, 34
Inventories
11
Other financial assets
10, 34
Other current assets
13
Subtotal
Assets related to disposal group
12classified as held for sale
Total current assets
Non-current assets
Property, plant and equipment 14, 15, 17
Goodwill
16, 17
Other intangible assets
16, 17
Investments accounted for18
using equity method
Retirement benefit asset
22
Other financial assets
10, 34
Other non-current assets
13
Deferred tax assets
19
Total non-current assets
Total assets－

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

72,64078,825
118,437
2,657
26,716299,275

543,998
590,315886,970
19,899200,072
2,241,254

191,298－－

437,002299,275

2,241,254

159,539
117,640
24,571

169,621
147,874
34,202

1,270,286
1,107,419
256,137

2,984

2,479

18,566

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

5,674
33,157
3,438
20,240416,684
715,959

42,489248,30925,745
151,576
3,120,528
5,361,782

2

－

Note

As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables
21, 34Contract liabilities
Bonds and borrowings
20, 34
Income taxes payable
Provisions
23
Other financial liabilities
20, 34
Other current liabilities
24
Subtotal
Liabilities related to disposalgroup classified as held for sale 12
Total current liabilities
Non-current liabilities
Contract liabilities
Bonds and borrowings
20, 34Retirement benefit liability
22
Provisions
23
Other financial liabilities
20, 34
Other non-current liabilities
24
Deferred tax liabilities
19
Total non-current liabilities
Total liabilities
EquityEquity attributable to ownersof parent
Share capital
Capital surplus
Retained earnings
Treasury shares
Other components of equity
Total equity attributable toowners of parent
Non-controlling interests
Total equity
Total liabilities and equity

25
25
25
25
25

－

3

63,54812,824
69,17013,479
2,718
3,489
7,461
172,689

79,62722,40762,510
3,046
1,474
3,243
9,454
181,761596,323
167,809468,134
22,808
11,03924,28670,798
1,361,198

115,576－－-

288,265

181,761

11,582
48,737
10,278
8,033
17,7954,809
5,133
106,366
394,631

5,062
95,683
10,485
7,423
23,514
4,373
6,724
153,263
335,024

1,361,198
37,908716,566
78,51855,590176,092
32,75050,356
1,147,780
2,508,97823,37011,799333,335(18,874)
26,381

23,3706,637
288,919(2,109)38,709175,019
49,705
2,163,702(15,796)
289,887

376,011355,526

2,662,518

38,728414,739809,371

25,409380,935
715,959

190,2852,852,804
5,361,782－

(2) Consolidated Statement of Profit or Loss

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of
U.S. dollars

340,997(214,937)
126,060(87,330)
10,819(5,952)408,880(265,792)
143,088(109,847)
7,071(11,029)

3,062,084(1,990,506)
1,071,578(822,637)
52,958(82,598)

18

163

87

651

6
6, 30
6, 30
6
19

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

29,3703,523(3,047)
29,846(13,427)
16,419219,951
26,382(22,821)
223,512(100,554)
122,958

12

2,289

－

－

39,44016,419122,958

37,3032,136
39,44015,784634
16,419118,208
4,750
122,958

75.56
75.56
－
75.47
75.47
－

U.S. dollars
0.57
0.57
－
0.57
0.57
－

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

6, 27

28
17, 2917, 29

Discontinued operations
Profit from discontinued operations
ProfitProfit attributable to:
Owners of parent
Non-controlling interests
Total
Earnings per share
Basic earnings per share
Continuing operations
Discontinued operations
Diluted earnings per share
Continuing operations
Discontinued operations

Yen

Yen
173.49162.52
10.97
173.26162.30
10.96

32
32
32
32

－

4

－

(3) Consolidated Statement of Comprehensive Income

Note

ProfitOther 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, 2022

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Fiscal year ended
March 31, 2023

39,44016,419Thousands of
U.S. dollars
122,958

31

1,141

(118)

(883)

31

281

734

5,497

31

(2)

－

－

31

34

5

36

31

17,573

12,035

90,133

31

640

414

3,103

19,665

13,071

97,886

59,10529,489220,844

56,124
2,981
59,10528,4791,010
29,489213,2817,563
220,844

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

－

5

－

(4) Consolidated Statement of Changes in Equity
Fiscal year ended March 31, 2022
(Millions of yen)
Equity attributable to owners of parent
Note

Balance at April 1, 2021
ProfitOther comprehensive
incomeTotal comprehensive income
Share-based paymenttransactions
Dividends

Share capital

CapitalsurplusRetainedearnings

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

15,348333,995
37,30336,741
2,136

370,736
39,44018,821

18,821

845

19,665-

18,821

56,124

2,981

59,105

248

(32)

441

-

-

37,303226
26

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.
Balance at March 31, 2022

Noncontrolling Total equity
interests

Other
componentsof equity(13,975)

25

(17)

Total

(13,975)
79

7,663(1,127)(15,102)

63

63

-

-

(7,663)

34

441

34

133

167

-

-

(92)

(671)

(671)

(6)

(573)

-

237

(6,884)327(7,788)(14,108)(994)(15,102)

23,37011,799333,335(18,874)

26,381

376,01138,728414,739

Fiscal year ended March 31, 2023
(Millions of yen)
Equity attributable to owners of parent
Note

Balance at April 1, 2022

Share capital

CapitalsurplusRetainedearnings

TreasurysharesOther
componentsof equity

23,37011,799333,335(18,874)

26,381

ProfitOther comprehensive
incomeTotal comprehensive income
Share-based paymenttransactions
Dividends
Purchase and disposal oftreasury shares
Transfer from othercomponents of equity toretained earnings
Proceeds from sale of sharesof subsidiaries
Changes in non-controlinginterests
Other
Total transactions withowners, etc.
Balance at March 31, 2023

Total
376,01138,728414,739

15,784634

16,41912,695

12,695376

13,071－

12,69528,4791,010

29,489

371

(0)

779

15,784－

15,784－408

26(14,793)

25

(549)

(45,913)

Noncontrolling Total equity
interests(14,793)
16,394477(477)(5,021)

111
28

779
(800)

(15,593)(30,067)(30,067)－－－(13,518)(13,518)(4,911)(11)(4,922)28

28－(5,162)(60,200)

16,765(367)(48,964)(14,329)(63,294)

23,3706,637

288,919(2,109)38,709355,526

25,409380,935－

6－

Fiscal year ended March 31, 2023
(Thousands of U.S. dollars)
Equity attributable to owners of parent

Share capital

CapitalsurplusRetainedearnings

TreasurysharesOther
componentsof equity

175,019

88,3662,496,331(141,350)

197,563

Note

Balance at April 1, 2022
ProfitTotal

2,815,930

290,035

3,105,965

118,208

4,750

122,958

95,073

95,073

2,813

97,886-

95,073

213,2817,563

220,844

2,777

(2)

5,831

118,208

Other comprehensive income
Total comprehensive income
Share-based paymenttransactions
Dividends
Purchase and disposal oftreasury shares--

118,208

3,056
26(110,782)

25(4,111)(343,839)

Transfer from othercomponents of equity toretained earnings

122,776(3,575)(37,606)

829

Other
Total transactions withowners, etc.
Balance at March 31, 2023

(110,782)

3,575

Proceeds from sale ofshares of subsidiaries
Changes in non-controlinginterests

Noncontrolling Total equity
interests

210

5,831
(5,992)(116,774)(225,174)(225,174)---(101,236)(101,236)(36,777)(85)(36,861)

210

210

-

(38,660)(450,837)

125,554(2,749)(366,692)(107,313)(474,005)

175,019

49,705

2,163,702(15,796)

289,887

2,662,518

190,2852,852,804－7－

(5) Consolidated Statement of Cash Flows
Note

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Cash flows from operating activities
Profit before tax
Profit before tax from discontinued operations
Depreciation and amortization
Interest and dividend income
Interest expenses
Share of loss (profit) of investments accounted
for using equity method
Impairment losses

45,521Thousands of
U.S. dollars

29,846－

223,512－28,425

212,870(1,782)
2,535

(785)
3,047

(5,880)22,821

(163)

(87)

(651)

3,371
22,482

12

Fiscal year ended
March 31, 2023

5,650

7,801

58,423(7,467)(12,532)(3,429)2,274(25,681)
17,033(46,454)
10,066(4,761)(5,895)(35,657)(44,149)

Other
Dividends received

8,884
1,801

(563)
474

(4,216)3,546Interest received
Interest paid

367
(2,300)349(3,420)2,617(25,615)

Income taxes refund (paid)
Net cash provided by (used in) operating
activities
Cash flows from investing activities(11,706)(24,005)(179,775)

18,271

29,270219,200

Net decrease in time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of investments

397(47,614)(1,211)(31,202)(9,067)(233,672)

778

2,445

18,312(1,652)(1,745)(13,070)

17,203

1,124

8,417

7

(47,348)(23,116)(173,113)

12－

51,160383,135

(45)

－

－

15,224(471)－－(1,792)(13,423)

811
(400)

16
276

117
2,066

(63,117)(4,046)(30,298)

39,338(13,183)(98,730)

10,003(15,338)

9,995(9,543)74,850(71,465)

7,863－

26,76824,872200,461
186,269(4)(13,972)(30,137)(14,791)(225,695)(110,766)(1,127)(781)(5,845)－(4,922)(36,861)

160

－

－

(4,348)(3,744)(28,035)

Loss (gain) on step acquisition
Decrease (increase) in trade and other receivables

177

Decrease (increase) in inventories
Increase in trade and other payables

Proceeds from sale of investments
Purchase of shares of subsidiaries resulting inchange in scope of consolidation
Proceeds from sale of shares of subsidiaries
resulting in change in scope of consolidation
Payments for sales of shares of subsidiaries
resulting in change in scope of consolidation
Proceeds from sale of investments in associates
Payments for loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Net increase in commercial papers
Repayments of long-term borrowings
Proceeds from long-term borrowings
Proceeds from issuance of bonds
Purchase of treasury shares
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
not resulting in change in scope of consolidation
Repayments of lease liabilities

20
20
20
20
20
25
26
7

20
－

8

－

OtherNet 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 12
sale
Cash and cash equivalents at end of period
8

－

9

－

419

262

1,966

22,994(15,203)(113,852)(1,534)

628

4,700

(23,386)
85,377

10,64945,56779,750341,251(16,424)

16,424

122,997

45,56772,640543,998

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 “(6) 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, 2023, which was ¥133.53 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 Eric Johnson, the Company’s representative
director, CEO and president, and Ken-ichi Emoto, the Company’s CFO, on June 19, 2023.
(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

－

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

－

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: 4 to 8 years• Tools, furniture, and fixtures: 3 to 10 years7) Intangible assets
－

12

－

(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• Customer-related intangible assets: 17 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: 5-10 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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13

－

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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(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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－

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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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.

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15) Provisions
Provisions are recognized if the Group has a present legal or constructive obligation as a result of a past eventthat 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 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 in equity. The plan was terminated in June2017 (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.
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Step 1: Identify the contract with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
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;
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• 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.
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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(5) 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 “(17) 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 “(19) Income Taxes.”

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(6) 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 has three reportable segments. The Digital Solutions Business manufactures and sells
semiconductor materials, display materials, and products related to edge computing , etc. The Life Sciences
Business provides bioprocess materials, diagnostics, and drug discovery and development services. The
Plastics Business manufactures and sells ABS and other resins for automobiles office equipment, andamusement applications.
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.

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－

22－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, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
The Reportable Segment
DigitalLife Sciences
Solutions
Revenue from

Other
[Note 1]

Plastics

Total

AmountRecorded in the
Adjustment
Consolidated[Note 2]Financial
Statements

165,030

72,45290,606

12,910340,9970340,997

39,002

3,168

5,323

987

48,480(5,174)43,306

241,824

210,371

75,996

11,528539,719

269,652

809,371

Depreciation andamortization

9,394

8,021

2,753

627

20,795

1,687

22,482

Impairment losses

3,228

-

-

-

3,228

-

3,228

Capitalexpenditures

17,192

19,6922,816

260

39,9601,891

41,851

external customers
Segment profit (loss)(core operating
profit)[Note 3]
Segment assets
Other items

Note 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 (5,174) million yen contains company-wide profits
and losses not allocated to the reportable segments. Adjustments to segment assets are corporate assets
not allocated to each reportable segment and assets from discontinued operations. Corporate assets
mainly include investment of surplus funds (deposits, cash equivalents, and securities (debt instrument
assets)) and long-term 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.

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Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
The Reportable Segment
DigitalLife Sciences
Solutions
Revenue from

Other
[Note 1]

Plastics

Total

AmountRecorded in the
Adjustment
Consolidated[Note 2]Financial
Statements

170,439

126,478

95,802

16,162408,880-

408,880(core operating profit)[Note 3]

27,790

8,450

1,853

441

38,534(4,510)34,025

Segment assets

267,733

269,688

76,71318,504

632,639

83,320715,959

Depreciation andamortization

11,475

11,7202,800

807

26,802

1,623

28,425

Impairment losses

7,801

-

-

-

7,801

-

7,801

20,154

15,873

3,253

4,546

43,826392

44,218external customers
Segment profit (loss)

Other items

Capitalexpenditures

Note 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 (4,510) million yen contains company-wide profits
and losses not allocated to the reportable segments. The adjustment amount 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 long-term
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.

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Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Thousands of U.S. dollars)
The Reportable Segment
Adjustment[Note 2]

AmountRecorded in theConsolidated
Financial
Statements

3,062,084-

3,062,084

3,304

288,582(33,773)

254,809574,504

138,578

4,737,804

623,978

5,361,782

87,771

20,972

6,043

200,719

12,151

212,870

58,423---58,423-58,423150,930

118,874

24,36034,048328,2122,936

331,148

Other[Note 1]

Total

717,455

121,034

63,28013,8802,005,043

2,019,679

85,933

Impairment losses
Capitalexpenditures

Revenue fromexternal customers
Segment profit (loss)(core operating profit)

DigitalLife Sciences
Solutions

Plastics

1,276,410

947,184

208,117[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 $(33,773) thousand contains company-wide profits andlosses not allocated to the reportable segments. The adjustment amount 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.

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Adjustments to reconcile segment profit to profit before tax are as follows.

Segment profit

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

Fiscal year ended March 31,
2023(April 1, 2022 to March 31,
2023)

Fiscal year ended March 31,
2023(April 1, 2022 to March 31,
2023)

Millions of yen

Millions of yen

Thousands of U.S. dollars

43.30634,025

254,809

Reversal of impairment
loss

1,348

-

-

Profit from sales of sharesof affiliated companies

332

-

-

Business restructuring
expenses [Note]-(9,002)(67,413)Gain on step acquisitions

-

3,429

25,681

Loss on sales of fixed
assets-(222)(1,662)(1,411)

-

-

-

1,020

7,637

Loss on valuation of
investments in subsidiaries
Gain on sales ofsubsidiaries' stock

186

120

899

Operating profit

Others

43,76029,370219,951

Finance income

3,415

3,523

26,382Finance costs(1,655)(3,047)(22,821)

Profit before tax

45,521

29,846

223,512Note : Business restructuring expenses of 8,219 million yen ($61,550 thousand), mainly for restructuring of thesemiconductor materials business, and 600 million yen ($4,491 thousand), mainly for restructuring of"other businesses," are included in "Other operating expenses. This includes impairment losses on fixed
assets of 7,801 million yen ($58,423 thousand). Please refer to "29. Other operating revenues andexpenses" for the breakdown of other operating expenses.

－

26

－

3) Information on Products and Services
Information on products and services is omitted, since similar information is stated in (1) Outline 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,
2022

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Japan
China

110,688

154,641

1,158,103

65,757
61,25372,016
76,771

539,324
574,931103,300

105,452

789,726

340,997

408,880

3,062,084

U.S.
Other regions
Total

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

Property, Plant and Equipment
As of March 31, 2022

As of March 31, 2023

As of March 31, 2023

Millions of yen

Millions of yen

Thousands of
U.S. dollars

Japan80,86378,891

U.S.

55,492
23,18365,50025,230

Other regions
Total

159,539

169,621590,811490,530
188,946
1,270,286

Note: The presentation of non-current assets has been restricted to property, plant, and equipment to avoid unreasonablepreparation costs5) 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

－

(7) Business Combination and Acquisition of Non-controlling Interest
1) Business Combination
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 oxide
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 oxide resists
2) 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 Acquisition
100.0%
4) Method of Acquiring Control
Acquisition of Shares for Cash
5) Purpose of Business Combination
Inpria has been working on the development of metal oxide 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 oxide resists is superior to conventional resists in terms ofpattern 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 futuretechnology, to its photoresist product portfolio, which is one of its strengths, and aims to seamlessly
provide value as an advanced materials company that supports the further shrinking in the technologies of
its customers.
(2) Fair value of Consideration Paid, Assets Acquired, and Liabilities Assumed at the Date of Acquisition
AmountMillions of yen
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

9,447
46,654
56,101

1,043
151
151
357
8,218
9
9,929

Current liabilities
Trade and other payables
Other current liabilities
Non-current liabilities

572
76

Deferred tax liabilities

2,219
－

28

－

Other non-current liabilities
Total liabilities assumed

9
2,877

Goodwill

49,049*The item allocated to other intangible assets are technology assets of ¥8,218 million. The fair value of theintangible assets were calculated using the excess earnings method valuation model. Measurements with thevaluation 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, was completed
because the identifiable assets and liabilities on the date of the business combination were identified.
The valuation gain recognized as a result of the remeasurement of equity interests held by the Company
immediately prior to the date of acquisition at its fair value on the date of acquisition of control was ¥7,467
million and is accounted for in the “Other operating income” line item in the consolidated statement of profit orloss. Acquisition-related costs pertaining to the business combination were ¥123 million. 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 adeductible for tax purposes.
(3) Effect of Business Combination on Cash Flows
AmountMillions of yen
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

46,654
1,043
45,611(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 at the beginning of
the current fiscal year is insignificant.

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Wholly Owned Subsidiary through Acquisition of Shares of JSR Electronic Materials Korea Co., Ltd.)(1) Outline of Business Combination
On January 10, 2023, the company acquired an additional 60.0% stake in JSR Electronic Materials Korea Co.,
Ltd. ("JEMK"), a distributor of semiconductor materials, making it a wholly owned subsidiary of the company.
1) Name and Business of the Acquired Company
Name: JSR Electronic Materials Korea Co., Ltd.
Business: Sales agency business for semiconductor materials, etc.
2) Date of Acquisition
January 10, 2023
3) Percentage of Voting Rights Acquired
Percentage of Voting Rights Held Immediately before the Date of Acquisition 40.0%
Percentage of Voting Rights Additionally Acquired on the Date of Acquisition 60.0%
Percentage of Voting Rights at Date of Acquisition 100%4) Method of Acquiring Control
Acquisition of Shares for Cash
－

29

－

5) Purpose of Business Combination
Established in 2014, JEMK has been contributing to the growth and expansion of the company's
semiconductor business in South Korea. As our customers continue to develop advanced technologies,
including metal oxide resists from Inpria Corporation, which was acquired by the company in October
2021, it is becoming increasingly important for us to develop our business in a better and closer
relationship with our customers. The company has decided to make JEMK a wholly-owned subsidiary of
its company in order to improve customer satisfaction and speed up service delivery through integrated
group operations, and to further strengthen our global cooperation in the semiconductor materials business.

－

30

－

(2) Fair value of Consideration Paid, Assets Acquired, and Liabilities Assumed at the Date of Acquisition
AmountFair value of equity interests held immediately prior to the acquisition date

3,468

Thousands of
U.S. dollars
25,972

Fair value of consideration paid

5,275

39,502

Total

8,743

65,474

Cash and cash equivalents

798

5,977

Inventories

3,574

26,762

Trade and other receivables

1,018

7,624

Other current assets

816

6,112

Property, plant and equipment

31

232

Other intangible assets *6,539

48,967

Other financial assets

662

4,959

Other non-current assets

76

569

13,514

101,203

Trade and other payables

4,309

32,266

Other financial liabilities

1,735

12,990

Deferred tax liabilities

1,437

10,759Total liability assumed

7,480

56,016

Goodwill

2,709

20,287

Millions of yen

Current Assets

Non-current assets

Acquired assets

Current liabilities

Non-current liabilities*The item allocated to other intangible assets are Customer-related intangible assets of 6,530 million yen($ 48,906 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 etc.
The valuation gain recognized by our company as a result of remeasuring the equity interest held immediately
prior to the acquisition date at fair value as of the date of acquisition of control is 3,429 million yen ($25,681
thousand) and is included in "Other operating income" in the consolidated statements of income. In addition,acquisition 26 million yen ($197 thousand) related costs related to the business combination are yen and theamount incurred in the current fiscal year is expensed in "Selling, general and administrative expenses" in the
consolidated statements of income.
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
AmountMillions of yen

Thousands of
U.S. dollars

Cash and cash equivalents paid for acquisition

5,275

39,502

Cash and cash equivalents held by the acquired company at the time of acquisition

798

5,977

Purchase of shares of subsidiaries resulting in change in scope of consolidation

4,477

33,525－31－

(4) Impact on our Group's performance
The impact on sales revenue and net income from JEMK included in the consolidated statements of income,and on sales revenue and net income if the business combination is assumed to have taken place at the
beginning of the fiscal year is immaterial.
(Acquisition of Indivumed Services GmbH & Co. KG)(1) Outline of Business Combination
On March 31, 2023, Crown Bioscience International (“Crown Bioscience”), a JSR Life Sciences Company,
acquired a 100.0% stake in Indivumed Services GmbH& Co. KG (" Indivumed Services"), a provider ofbiospecimens, biobanks and clinical services, making it a wholly owned subsidiary of our company.
1) Name and Business of the Acquired Company
Name: Indivumed Services GmbH & Co. KG
Business: Biospecimens, biobank and clinical services business, etc.
2) Date of Acquisition
March 31, 2023
3) Percentage of Voting Rights Acquired
100.0%
4) Method of Acquiring Control
Acquisition of Shares for Cash
5) Purpose of Business Combination
The Company has decided to make Indivumed Services a wholly-owned subsidiary of Crown Biosciencein order to further accelerate drug discovery and create solutions to meet customer needs by bringing avariety of synergistic service platforms to Crown Bioscience's drug discovery and development services,
enabling the acquisition of high-quality biospecimens, biobanks and access to fresh patient samples.

－

32

－

(2) Fair value of Consideration Paid, Assets Acquired, and Liabilities Assumed at the Date of Acquisition
AmountMillions of yen

Thousands of
U.S. dollars

Cash18,765140,532

Contingent consideration

5,217

39,069Total Fair value of consideration paid

23,982

179,600

Cash and cash equivalents

126

944

Inventories

5,214

39,045Trade and other receivables

378

2,830

Other current assets

53

395

Property, plant and equipment

314

2,350

Other intangible assets

8

62

6,092

45,626

Trade and other payables

146

1,093

Other financial liabilities

334

2,504

Total liability assumed

480

3,597

Goodwill

18,370137,571

Current Assets

Non-current assets

Acquired assets

Current liabilities

At the end of the current fiscal year, the amounts of items, such as goodwill accrued, assets accepted andliabilities assumed on the date of the business combination have been provisionally accounted for because theidentification of identifiable assets and liabilities on the date of the business combination is under scrutiny andthe allocation of acquisition costs has not been completed.
Acquisition-related costs related to the business combination were 566 million yen ($4,239 thousand), and theamount incurred during the current fiscal year is expensed in in the “Selling, general and administrative” line
item in the consolidated statements of income.
Goodwill is primarily composed of expected future earning power. The goodwill cannot be reported as adeductible for tax purposes.
(3) Contingent Consideration
Contingent consideration is a payment agreement that fluctuates according to the level of achievement ofcertain indicators, such as sales after the business combination and the number of biological samples
acquired, and our group estimates the attainability and recognizes the amount of 5,217 million yen ($39,069
thousand) as unpaid acquisition consideration. The amount is calculated based on the level of achievementof each target indicator. The maximum amount of contingent consideration is 8,743 million yen ($65,478
thousand). The fair value hierarchy of contingent consideration is Level 3.

－

33

－

(4) Effect of Business Combination on Cash Flows
Amount18,765

Thousands of
U.S. dollars
140,542126

944

18,639139,587

Millions of yen
Cash and cash equivalents paid for 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(5) Impact on our group's performance
The impact on sales revenue and net income generated from Individualized Services included in the
consolidated statements of income, and on sales revenue and net income assuming the business combination
is implemented at the beginning of the fiscal year is immaterial.
2) Acquisition of Non-controlling Interest
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Not Applicable
Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
On February 13, 2023, the company acquired an additional 10.0% shares in KBI Biopharma, Inc., microbial
and mammalian, clinical and commercial biopharmaceutical contract development and manufacturingservices, to make KBI Biopharma, Inc. a wholly owned subsidiary of the company.
As the consideration for additional acquisition, cash of ¥ 4,922 million ($36,861 thousand) was paid to thenon-controlling-interest shareholders, and the Group accounted for ¥ 5,021 million ($37,606 thousand) as thedecreasing capital surplus ,which is the difference between the consideration for the additional acquisition and¥ (99) million ($(744) thousand) which is the total amount of non-controlling interest reduced because of theadditional acquisition, the exchange differences on translation of foreign operations and valuation difference
on available-for-sale securities.

－

34

－

(8) 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 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of
U.S. dollars

45,563

72,635543,9624

5

3645,56772,640543,998(9) 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.
As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

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

68,67470,421

527,377

7,158
274
76,106

8,292
112
78,82562,099839
590,315－35－

(10) Other financial assets
1) Breakdown of Other financial assets
The breakdown of other financial assets is as follows:
As of March 31,2022

As of March 31,
2023

Millions of yen

Millions of yen

-

78

582

Investments (equity financial assets)

30,26931,632

236,890

Term deposits
Other

1,060
1,366

2,285
1,819

17,114
13,622

32,69635,814

268,208

1,289
31,4082,657
33,157

19,899248,30932,69635,814

268,208

Derivative asset

Total
Current assets
Non-current assets
Total

As of March 31,
2023
Thousands of U.S.
dollars

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. Term 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, 2022

As of March 31, 2023

As of March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Carbon, Inc.

5,782

6,309

47,245

Optorun Co., Ltd.

4,863

5,114

38,301

Cambridge Quantum Computing

3,382

3,690

27,637

Vedanta Biosciences Inc

2,724

2,972

22,260

2,146

1,509

11,302

Other

9,598

9,081

68,009Total

28,49528,676

214,754OSAKA ORGANIC CHEMICALINDUSTRY LTD.

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

Dividends received

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

1,232
－

434
36

－

3,250

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, 2022

Fiscal year ended March 31,2023

Fiscal year ended March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Fair Value
17,203

Accumulated
gains or losses

Accumulated
gains or losses

Fair Value

7,523

1,124

(226)

Fair Value
8,417

Accumulated
gains or losses(1,692)For 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.

(11) Inventories
Inventories consist of the following items.

Finished goods and merchandiseWork in process
Raw materials and supplies
Total

As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of
U.S. dollars

60,6692,233

62,437
2,629

467,589
19,68742,03253,371

399,694

104,934

118,437

886,970

The amount of valuation losses on inventories recognized as expenses was ¥ 814 million as of March 31, 2022
and ¥ 466 million ($ 3,492 thousand) as of March 31, 2023. 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 ¥ 178,766 million as of March 31, 2022 and ¥ 204,695 million($ 1,532,948 thousand) as of March 31, 2023.

－

37

－

(12) 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.
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 share transfer has been completed on April 1, 2022.
The following are the assets and liabilities related to disposal groups classified as held for sale.
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

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

16,424--

Trade and other receivables

66,318--Inventories

50,115

-

-

364

-

-

Other current assets

3,145

-

-

Property, plant and equipment

46,466--

Other intangible assets

1,740

-

-

1,528

-

-

3,920

-

-

70

-

-

1,208

-

-

191,298--

Trade and other payables

51,238--

Bonds and borrowings (Current)

21,500--

Income taxes payable

333

-

-

Other financial
liabilities (Current)

807

-

-

Other financial assets (Current)

Investments accounted for using
equity method
Other financial assets (Noncurrent)
Other non-current assets
Deferred tax assets
Total assets
Liabilities associated with disposalgroups classified as held for sale

－

38

－

Other current liabilities

2,115

-

-

Bonds and borrowings (NonCurrent)

28,838--Retirement benefit liability

5,765

-

-

Other financial liabilities(Non-Current)

4,336

-

-

Other non-current liabilities

644

-

-

0

-

-

115,576--

Deferred tax liabilities
Total liabilities*Other components of equity related to the assets and liabilities associated with the disposal group held forsale at the end of the previous consolidated fiscal year were ¥669 million, net of tax.
2)Discontinued Operations
As described in “1) Disposal Groups Classified as Held for Sale”, the Elastomers 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, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

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

189,318(185,947)
3,371(1,082)
2,289

-

-

Cost of sales and expenses for the previous consolidated fiscal year include a loss of ¥1,495 million 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 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, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars－

39－

Cash flows from operating activities

12,261--

Cash flows from investing activities*

8,088

50,880381,035

Cash flows from financing activities
Effect of exchange rate changes oncash and cash equivalents
Total

1,205

-

-

1,107

-

-

22,66150,880381,035

Note: On April 1, 2022, the Elastomers Business in the company was transferred to Japan Synthetic Rubber Spinoff Preparation Co., Ltd., which was established on May 12, 2021 as a subsidiary of the company, through anabsorption-type company split.
Based on the share transfer agreement with ENEOS Corporation entered into on May 11, 2021, the transfer of allshares of the said successor company to ENEOS Corporation has been completed.
The relationship between consideration received for the transfer of shares and income and expenditure of thetransfer is as follows:
Millions of yen

Thousands of U.S. dollars

Consideration received

68,473

512,789

Cash and cash equivalents of transferred
subsidiaries(17,593)(131,754)

Proceeds from sale of shares of subsidiaries
resulting in change in scope of
consolidation

50,880381,035(13) Other Assets
The breakdown of other assets is as shown below.
As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

Excise tax receivable
Income taxes receivable

9,154
2,357

7,719
10,68957,80580,048Prepaid expenses
Other

2,237
4,059

2,892
5,416

21,65940,559Total

17,807

26,716200,072

182

224

1,678

2,648

3,214

24,067

2,830

3,438

25,745

Other current assets

Other non-current assets
Long-term prepaid expenses
Other
Total

－

40

－

(14) 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 “(17) Impairment on Non-financial
Assets.”Changes in carrying amounts(Millions of yen)
Buildings
andstructures

MachineryandvehiclesTools,
fixturesandfittings

April 1, 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

Acquisition by businesscombination

Reversal of impairment
lossesLand

Constructionin progress

Other

Total

Sales 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

11,970

Other

2,593

(27)

(10)

-

(517)

-

2,040

March 31, 2022

64,38336,521

9,948

15,09833,452

135

159,539

Acquisition

2,600

5,252

884

826

30,071936

40,570

7

317

21

-

-

-

345

Depreciation(8,747)(10,485)(4,300)

(127)

-

-

(23,659)

Impairment loss
Sales and disposals(3,245)(1,214)(4,416)
(185)

(112)
(530)

-

(29)
(74)

(77)

(7,801)(2,079)Transfer

29,846

7,675

4,507

-

(41,974)

(54)

-

1,432

1,227

185

204

4,098

17

7,162

Other

(1,930)

(341)

14

205

(2,403)-(4,455)

March 31, 2023

83,13335,565

10,617

16,20623,143957

169,621

Buildings andstructures

Machineryand vehicles

Tools,
fixturesand fittings

Land

Constructionin progress

Other

Total

482,163
19,469273,507
39,33674,502
6,623

113,071
6,186

250,523
225,203

1,012
7,010

1,194,778
303,826

55

2,373

154

-

-

-

2,582

Depreciation(65,509)(78,520)(32,200)

(949)

-

-

(177,178)

Impairment loss
Sales and disposals(24,300)(9,092)(33,074)(1,382)(835)(3,970)

-

(214)
(552)

(575)

(58,423)(15,571)

Transfer

223,518

57,47433,753-(314,339)

(407)

-

Assets associated withdisposal group classified asheld for saleExchange differences offoreign operations

Acquisition by businesscombination

Exchange differences offoreign operations(Thousands of U.S. dollars)

March 31, 2022
Acquisition
Acquisition bybusiness
combination

－

41

－

Exchange differencesof foreign operations
Other
March 31, 2023

10,725

9,186

1,384

1,526

30,692

125

53,639(14,452)
622,578(2,555)
266,345

104
79,512

1,534
121,368(17,995)
173,318

7,166(33,364)
1,270,286

Acquisition Cost
(Millions of yen)March 31, 2022
March 31, 2023

Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

140,435
166,329

160,389
166,043

61,96965,787

16,90818,161

Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

1,245,633

1,243,489

492,679

136,006

Constructionin progress

Other

Total

33,452
23,172

135
957

413,289
440,449(Thousands of U.S. dollars)

March 31, 2023

Constructionin progress

Other

Total

173,532

7,166

3,298,506

Accumulated Depreciation and Impairment(Millions of yen)
Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land

March 31, 2022

76,052

123,867

52,021March 31, 2023

83,197130,478

55,170

Buildings
andstructures

MachineryandvehiclesTools,
fixturesand fittings

Land623,056

977,144

413,167

14,639Constructionin progress

Other

Total

1,810

-

-

253,751

1,955

29

-

270,828(Thousands of U.S. dollars)

March 31, 2023

Constructionin progress
214

Other

Total
-

2,028,220(Note) 1. Depreciation expenses of property, plant and equipment are recorded as “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.
2. Impairment loss is recorded as “other operating expenses” and “Profit 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 from discontinued operations" inthe 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 “(20) Borrowings and bonds (including Other financial liabilities).”
6. Right-of-use asset included in carrying amounts of property, plant and equipment is stated in “(15) Lease.”

－

42

－

(15) 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, 2022 (from April1, 2021 to March 31, 2022)(Millions of yen)
Buildings andMachinery

Tools, fixtures

structuresand 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 position or"Cost of sales" and "Selling, general and administrative expenses" in the consolidated statement of profit or loss.

Fiscal year ended March 31, 2023 (from April 1, 2022 to March 31, 2023)(Millions of yen)
Buildings andstructures

Machineryand vehicles

Tools, fixturesand fittings

Land

Total

Carrying amount

16,419

2,056

48

778

19,302

Depreciation(3,614)

(34)

(12)

(127)

(3,787)(Note) 1. Increase amount of right-of-use asset is ¥ 2,650 million.
2. Depreciation of right-of-use assets is included in "Inventories" in the consolidated statement of the financial position or"Cost of sales" and "Selling, general and administrative expenses" in the consolidated statement of profit or loss.

(Thousands of U.S. dollars)
Buildings andstructures

Machineryand vehicles

Tools, fixturesand fittings

Land

Total

Carrying amount

122,962

15,400361

5,826

144,550

Depreciation(27,069)

(253)

(87)

(949)

(28,357)(Note) 1. Increase amount of right-of-use asset is $ 19,848 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.

－

43

－

2) Finance Costs Related to Lease
Finance costs related to leases are as follows:
Fiscal year ended March 31, 2022(from April 1, 2021 to March 31, 2022)
Millions of yen
Finance costs related to leases

631

Expenses relating to short-term leases

401

Expenditures relating to leases of low-value assets

542

Variable lease payments

34
4,348

The amount of cash outflow related to leases

Fiscal year ended March 31, 2023(from April 1, 2022 to March 31, 2023)
Millions of yen

Thousands of U.S.
dollars

Finance costs related to leases

434

3,253

Expenses relating to short-term leases

328

2,457

Expenditures relating to leases of low-value assets

472

3,534

Variable lease payments

68

508

3,744

28,035The amount of cash outflow related to leases(Note) 1. Finance costs related to leases are included in "Finance costs" and "Profit 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 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 “(34) Financial Instruments, 2) Financial
Risks, (iii) Liquidity Risks.”

－

44

－

(16) 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 “(17) Impairment on Nonfinancial Assets.”
Changes in Carrying Amounts(Millions of yen)
Other intangible asset
Goodwill
Software

Other

Total

April 1, 2021
Acquisition

58,633
-

8,755
5,335

6,258
540

15,014
5,875

Acquisition by businesscombination

50,172

1

8,646

8,646

Amortization
Impairment loss-

(1,245)(2,250)(1,273)-(2,518)(2,250)

Reversal of impairment losses
Sales and disposals

-

84
(58)

34
(2)

118
(60)

Transfer to other property, plantand equipment

-

9

(9)

-

Assets associated with disposalgroup classified as held for sale

-

(742)

(998)

(1,740)Exchange differences of foreign
operations

8,835

129

794

923

-

288

274

562

March 31, 2022
Acquisition

117,640-

10,307716

14,264
4,516

24,571
5,232

Acquisition by businesscombination

21,256

16

6,530

6,547

Amortization
Sales and disposals(830)(2,567)(43)(2,199)(25)(4,766)(68)

Transfer to other property, plantand equipment

-

365

(365)

-

Exchange differences of foreign
operations

9,808

73

749

822

-

1,022

842

1,864

147,874

9,889

24,31334,202

Other

Other
March 31, 2023

－

45

－

(Thousands of U.S. dollars)
Other intangible asset
Goodwill
SoftwareMarch 31, 2022
Acquisition
Acquisition by businesscombination
Amortization
Sales and disposals
Transfer to other property, plantand equipment

Total

881,001-

77,191
5,362

106,823
33,822

184,014
39,184

159,182

122

48,90649,029-(19,226)(16,467)(35,693)(6,217)

(321)

(188)

(509)

-

2,733

(2,733)-73,454

550

5,607

6,156

-

7,651

6,306

13,956

1,107,419

74,061

182,076

256,137

Exchange differences of foreign
operations
Other
March 31, 2023

Other

Acquisition Cost
(Millions of yen)
Other intangible asset

Goodwill
March 31, 2022
March 31, 2023

Software117,640
147,874

Other

30,12333,906

Total
33,452
42,21963,574
76,125(Thousands of U.S. dollars)
Other intangible asset

Goodwill
SoftwareMarch 31, 2023

1,107,419

253,919

Other

Total

316,179

570,098

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

Goodwill

Software

Other

Total

March 31, 2022-

19,815

19,18839,003

March 31, 2023-

24,016

17,90741,923(Thousands of U.S. dollars)
Other intangible asset

Goodwill
March 31, 2023

Software-

179,858

Other
134,103

Total
313,961(Note) 1. Amortization expenses of other intangible assets are recorded as “cost of sales” and “selling, general and administrative
expenses”.
2. Impairment losses are included in “profit 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 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.
－

46

－

(17) 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, 2022 and 2023 are as follows:

Property, plant and equipment
Buildings and structures
Machinery and vehicles
Tools, fixtures and fittings
Construction in progress
Total

Fiscal year ended March 31,
2022
Millions of yen

Fiscal year ended March 31,
2023
Millions of yen

Fiscal year ended March 31,
2023
Thousands of U.S. dollars

1,236
1,934
59
3,228

3,245
4,416
112
29
7,801

24,30033,074835
214
58,423In the previous 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 was recorded as an impairment loss in "Other operating
expenses."In the current fiscal year, due to a significant decline in the revenue outlook in the wake of the deterioration of the
U.S. business environment in the cleaning solutions business, the book value of the assets of the U.S. plant was
reduced to the recoverable amount (value in use). The reduction amount of ¥7,801 million($58,423 thousand) wasrecorded as an impairment loss in "Other operating expenses."

－

47

－

2) Reversal of impairment losses
In the previous fiscal year, among business assets for which impairment losses were recognized inprevious years in the Display Materials Business, the carrying amount of assets that are expected tobe sold has been reversed to their recoverable amount, and the reversal of impairment losses (¥1,348
million) of ¥1,109 million for Buildings and structures, ¥212 million for Machinery and vehicles, ¥16
million for tools, fixtures and fittings, and ¥10 million for software has been recorded. The reversal of
the impairment loss is included in "Other operating income" in the consolidated statement of profit orloss.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 isclassified 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 Oxide
Resists for EUV that happened in previous fiscal year acquisition of Inpria Corporation. The carrying
amount of goodwill allocated to cash-generating units (or groups of cash-generating units) is asfollows:
Cash-generating units(groups of cash-generating units)

Segment

As of March 31,2022

As of March
31, 2023

As of March 31,
2023

Millions ofyenMillions ofyen

Thousands of
U.S. dollars

Plastics
business

Plastics

2,598

2,598

19,460Life Sciencesbusiness

In-vitro Diagnostics andResearch Reagents

3,641

3,641

27,267

5,763

6,287

47,086

9,864

10,87781,459Drug Discovery andDevelopment Services(note)

42,04264,204

480,822

DigitalSolutions

Metal Oxide Resists
Lithography Materials

44,208
8,694

48,14912,116

360,588
90,737

Business

Other

Contract Development andManufacturing for
Biomedicine
Contract of the Services forDevelopment and Generationof Cell-lines

Total

830

-

-

117,640

147,874

1,107,421(Note).
In the current fiscal year, the fair value of the identifiable assets as of the date of the businesscombination has not been determined and the allocation of acquisition costs has not been completed,so a portion of goodwill (Drug Discovery and Development Services ¥18,370 million ($137,571
thousand)) is calculated on a provisional basis based on reasonable information available at the end of
the current fiscal year.
Of 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.
－

48

－

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%

9.9%

5 years

1.0%

7.3%

5 years

2.0%

14.9%

5 years

2.0%

13.7%

5 years

2.0%

15.7%

5 years

2.0%

10.2%

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 oxide resists are measured at fair value less costs of disposal. Such fairvalue is calculated by discounting to present value, at a pre-tax discount rate (pre-tax weighted average
cost of capital) of 15.2%, the estimated future cash flows based on a business plan approved by the
management of the company that has been prepared to reflect Inpria's past experience, external
information and future sales generated from Inpria's metal oxide resists technology. The estimatedperiod of cash flows is based on the validity of the patents on technology assets held by Inpria.
Terminal growth rate is 2.2%. The fair value hier archy 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.

(18) 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, 2022

As of March 31, 2023

As of March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Carrying amount

2,984

2,479

18,566

The Group’s share of comprehensive income of associates that are not individually significant is
as follows:
Fiscal year ended March
31, 2022

Fiscal year ended March
31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Share of profit
Share of other comprehensive income

72
232

87
414

651
3,103

Share of total comprehensive income

304

501

3,754

－

49

－

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, 2022

As of March 31, 2023

Millions of yen

Millions of yen

Carrying amount-

As of March 31, 2023
Thousands of U.S.
dollars--

The Group’s share of comprehensive income of joint ventures that are not individually significant
is as follows:
Fiscal year ended March
31, 2022

Fiscal year ended March
31, 2023

Millions of yen

Millions of yen

Fiscal year ended
March 31, 2023
Thousands of U.S.
dollars

Share of profit

91

-

-

Share of other comprehensive income

406

-

-

Share of total comprehensive income

497

-

-

－

50

－

(19) 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, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
April 1,
2021

Recognizedthrough
profit(loss)

RecognizedthroughothercomprehensiveincomeInventories
Accrued bonuses

1,122
1,867

151
339

-

-

1,274
2,206

Non-current assets
Retirement benefit liability

25,729
3,719

419
(310)

-

-

26,1483,409

Unused tax losses
Other

344
6,086

(172)
2,215

(50)

(797)

172
7,454

38,868

2,642

(50)

(797)

40,663(1,514)49--(1,465)(6,794)

-

(248)

3,158

(3,884)(13,059)

3,756
(126)

-

(2,385)(9,303)(427)(21,794)

3,679

(248)

772

(17,590)

March 31,
2022

Other

Deferred Tax Assets

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

(2,938)

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Recognizedthrough
profit(loss)

April 1,
2022

RecognizedthroughothercomprehensiveincomeMarch 31,
2023

Other

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

1,274

(149)

2,206
26,148(908)(24,043)

3,409
172

(2,046)
10,898

1,124

-

1,297
2,106

-

1,364
11,070

7,454

967

(134)

(164)

8,123

40,663(15,281)

(134)

(164)

25,084(1,465)

(64)

-

-

(1,529)(3,884)

-

(295)

66

(4,114)(9,303)(2,938)

7,973

-

-

(1,330)(253)(1,404)(17,590)

7,656

(295)

4,595
11,568Deferred Tax Liabilities
Non-current assets
Financial asset measured at fair value
through other comprehensive income
Retained earnings
Other
Total

－

51

－

(1,338)

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Thousands of U.S. dollars)
April 1,
2022

Recognizedthrough
profit(loss)

RecognizedthroughothercomprehensiveincomeMarch 31,
2023

Other

Deferred Tax Assets
Inventories
Accrued bonuses

9,539
16,519(1,119)(6,803)

-

-

8,420
9,716

Non-current assets
Retirement benefit liability

195,823
25,532(180,055)(15,320)--

15,76910,211

Unused tax losses
Other

1,288
55,82081,618
7,242(1,000)(1,231)

82,90560,831

304,522(114,438)(1,000)(1,231)

187,852(10,973)

(479)

-

-

(11,452)(29,090)-(2,208)492(30,806)(69,668)

59,707--(9,961)(22,003)(1,896)-(10,515)(34,413)(131,734)

57,333(2,208)(10,022)(86,632)

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

－

52

－

(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 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Unused tax losses
Deductible temporary differences

16,531
5,631

21,827
14,868

163,458
111,347

Total

22,161

36,695274,806

Expiration schedule of tax losses carried forward for which no deferred tax asset is recognized is
as follows:
As of March 31,2022

As of March 31,
2023

Millions of yen

Millions of yen

As of March 31,
2023
Thousands of U.S.
dollars

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

-

-

-

12,424

6,455

48,3404,106

15,372

115,119

Total

16,531

21,827

163,459

The amount of taxable temporary differences pertaining to investments in subsidiaries, etc. forwhich deferred tax liabilities have not been recognized was ¥30,051million as of March 31, 2022
and ¥50,347million ($377,048 thousand) as of March 31, 2023. 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:

Current tax expenses
Deferred tax expenses

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

15,773(6,322)

5,802
7,625

43,44957,106

9,452

13,427

100,554

Continuing operations

8,370

13,427

Discontinued operations

1,082

-

100,554
-

Total

－

53

－

Differences between statutory income tax rates and average effective tax rates can be explained by
the following factors.
Fiscal year ended March 31, 2022

Fiscal year ended March 31, 2023%%

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
Average effective tax rate

－

54

－

30.6

30.6

(5.0)
(3.1)

(0.6)
-

(2.4)
0.2

2.2
2.1

(0.1)

10.4

(1.8)

0.3

18.4

45.0

(20) Borrowings and bonds (including Other financial liabilities)
1) Financial Liabilities
Borrowings and bonds (including Other financial liabilities) consisted of the following:
As of March 31,2022

As of March 31,2023

As of March 31,
2023

Averageinterest rates

Millions ofyenMillions ofyen

Thousands of
U.S. dollars%

Current borrowings

50,63136,780275,441

4.43％

Commercial Papers
Current portion of

10,00319,998

149,765

0.01％

non-current
borrowings

8,536

5,732

42,9282.55％

13,84735,878

268,6901.00％

2024-32

34,89059,805447,8760.39％

2025-32

2,984

3,195

23,924-

16,231

15,647

117,180-

Non-current
borrowings
Bonds Payable
Current leaseliabilities
Non-current leaseliabilities
Derivative liabilities

PaymentDue--2024-42

2,069

2,698

20,206--

Contingent
consideration

-

5,217

39,069

-

-

Total

139,192

184,950

1,385,079--

Current liabilities

72,65965,753

492,421--

Non-current
liabilities

66,533

119,197

892,658

-

-

Total

139,192

184,950

1,385,079--

Borrowings and bonds are classified as financial liabilities measured at cost. Derivative liabilities andContingent consideration are classified 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:(Millions of yen)
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

Later than five
years

Total

Non-current
borrowings

14,778

2,339

3,755

6

15,00035,878

Bonds Payable-

13,000-15,00032,00060,000(Thousands of U.S. dollars)
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

Later than five
years

Total

Non-current
borrowings

110,673

17,52028,11845

112,334

268,690

Bonds Payable-

97,356-112,334

239,647

449,337－55－

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,
2023

Millions of yen

Millions of yen

7

-

-

7,391

7,719

57,808

7,398

7,719

57,808

As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of
U.S. dollars

Liabilities associated with disposalgroups classified as held for sale

2

-

-

Non-current portion of noncurrent borrowings

30

30

225

32

30

225

Cash and cash equivalents
Property, plant and equipment
Total

As of March 31,
2023
Thousands of U.S.
dollars

Corresponding liabilities are as follows:

Total3) Reconciliation of Liabilities Arising from Financing Activities
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)
As of April 1,
Cash flow
2021

Non-cash items
Transfer
Exchange
between nondifferences
current andcurrent

Lease

As of March
31, 2022

Other*

Borrowings(non-current)

46,537

7,691

-

3,040

(14,598)(28,822)

13,847

Bonds Payable

34,869

-

-

-

-

22

34,89037,872

24,173-

4,003

14,598(21,479)

59,167-

10,003----

10,003

22,373(4,348)

4,441

1,765

-

(25)

19,215

141,650

37,519

4,441

8,808

-

(50,305)

137,123

Borrowings(current)
Commercial
PapersLeaseliabilities
Total*Includes transfers to disposal groups held for sale.

－

56

－

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)
Non-cash items
Transfer
Exchange
between nondifferences
current andcurrent

As of April 1,
2022

Cash flow

Borrowings(non-current)

13,847

26,610-1,236(5,815)-35,878

Bonds Payable

34,89024,872

-

-

-

42

59,80559,167(22,569)

-

127

5,815

(28)

42,512

10,003

9,995

-

-

-

-

19,99819,215(3,744)

2,251

1,218

-

(100)

18,842

137,123

35,165

2,251

2,581

-

(86)

177,035

Borrowings(current)
Commercial
PapersLeaseliabilities
Total

Lease

As of March
31, 2023

Other(Thousands of U.S. dollars)
Non-cash items
Transfer
Exchange
betweendifferences
non-current
and current

As of April
1, 2022

Cash flow

Borrowings(non-current)

103,700

199,282-

9,258(43,549)-

268,690

Bonds Payable

261,292

186,269

-

-

-

315

447,876

443,097(169,015)-

951

43,549(212)

318,369

74,91574,850----149,765

143,903(28,035)

16,860

9,124

-

(747)

141,104

1,026,908

263,350

16,86019,332-(645)

1,325,805

Borrowings(current)
Commercial
PapersLeaseliabilities
Total

Lease

－

57

－

As of March
31, 2023

Other(21) 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 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

38,74940,697

304,775

24,39538,605289,108

405

326

2,441

63,54879,627596,323

Thousands of U.S.
dollars

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

(22) 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.

－

58

－

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:
As of March 31,2022

As of March 31,
2023

Millions of yen

Millions of yen

35,24828,983217,055(38,103)(32,415)(242,757)(2,855)(3,432)(25,702)

7,940

8,243

61,731

5,085

4,811

36,02910,278(5,192)

10,485(5,674)78,518(42,489)

5,085

4,811

36,029Present 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

As of March 31,
2023
Thousands of U.S.
dollars

Amounts on consolidated
statement of financial position
Retirement benefit liability
Retirement benefit asset
Total Net liability (asset) for
retirement benefit(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, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of U,S,dollars

51,643

43,188323,436

2,390
227

1,539
213

11,522
1,594

1,103

829

6,205

(725)

(1,846)(13,823)(3,600)(2,308)(17,284)(7,458)(4,890)(36,620)

(391)

502

3,757

43,18837,226

278,786

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

The weighted average duration of defined benefit plan obligations was 13.6 years in the fiscal year
ended March 31, 2022 and 12.9 years in the fiscal year ended March 31, 2023.

－

59

－

(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, 2022

Fiscal year ended March
31, 2023

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, 2023
Thousands of U.S.
dollars

40,114

38,103285,353

166

149

1,117

242

(25)

(188)

1,396
(1,901)940(1,589)7,039(11,902)(1,694)(5,137)(38,472)

(220)

(25)

(190)

38,10332,415

242,757

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

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 ¥1,391 million ($10,417 thousand) in the fiscal year ending
March 31, 2024.
(iv) Items of Plan Assets
Plan assets consisted of the following items.
As of March 31, 2022
Assets forwhich active
marketprices areavailable

Assets forwhich active
marketprices are
not available

Millions of
yen

As of March 31, 2023
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

Cash and cash equivalents
Equity instruments

4,478

-

4,478

3,391

-

3,391

Domestic equity securities
Foreign equity securities
Debt instruments

1,428
3,857

-

1,428
3,857

1,411
3,504

-

1,411
3,504

Domestic bonds
Foreign bonds
General accounts of life
insurance
Alternative investments*

9,592
10,013-

9,592
10,013

8,330
7,889

-

8,330
7,889

-

414

414

-

434

434

8,320
8,735

8,320
38,10324,525

7,457
7,891

7,457
32,41529,369*Alternative investments include hedge funds.
Total

－

60

－

As of March 31, 2023

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

25,393-25,393

10,57026,241-

10,57026,241

62,38059,081-

62,38059,081

-

3,250

3,250

183,664

55,84359,09355,843242,757*Alternative investments include hedge funds.

(v) Main Component Used for Actuarial Assumption
As of March 31, 2022

As of March 31, 2023%%

Discount rates (weighted average)

0.63

1.08

(vi) Sensitivity Analysis
In the fiscal year ended March 31, 2023, 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 ¥2,051 million ($15,359 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 thesame 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 ¥1,806 million in
the fiscal year ended March 31, 2022 and ¥2,008 million ($15,037 thousand) in the fiscal year ended
March 31, 2023.
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, 2022 and the fiscal year ended March 31, 2023 was ¥4,257 million and ¥3,610 million ($27,036
thousand), respectively.

－

61

－

(23) Provisions
Increase or decrease in provisions are the following.
Provision for loss on businessrestructuring

Allowance for dismantling
and removal

Other

Millions of yen

Millions of yen

Millions of yen

2,612

8,139

-

360

-

31

(2,200)

(45)

-

772

8,093

31

Provision for loss on businessrestructuring

Allowance for dismantling
and removal

Thousands of U.S. dollars

Thousands of U.S. dollars Thousands of U.S. dollars

As of April 1, 2022
Increase
Decrease (used for purposes)
As of March 31, 2023

Other

19,56260,949

-

2,698

-

234

Decrease (used for purposes)(16,475)(339)-

As of March 31, 2023

5,785

60,610234

As of April 1, 2022
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:
As of March 31,2022

As of March 31,
2023

Millions of yen

Millions of yen

2,718

1,474

dollars
11,039Non-Current liabilities

8,033

7,423

55,590Total

10,751

8,897

66,629Current liabilities

－

62

－

As of March 31,
2023
Thousands of U.S.

(24) Other Liabilities
Other liabilities include the following items.

Other current liabilities
Accrued bonuses

As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

3,794

3,835

28,723

Accrued consumption taxes
Other

476
3,191

2,797
2,821

20,947
21,127

Total

7,461

9,454

70,798

127

-

-

4,682

4,373

32,750

4,809

4,373

32,750

Other non-current assets
Provision for environmental
measures
Other
Total

(25) 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, 2021

696,061,000

226,126,145

Increase/Decrease--

As of March 31, 2022
Increase/Decrease

696,061,000-

226,126,145(17,726,145)

As of March 31, 2023

696,061,000

208,400,000(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.
Increase or decrease during the current consolidated fiscal year is due to the cancellation of treasury stock.

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:
Number of shares
As of April 1, 2021
Increase/Decrease

11,223,335(175,435)

As of March 31, 2022
Increase/Decrease

11,047,900(10,233,673)

As of March 31, 2023

814,227(Note)

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

63

－

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

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

Net change infinancialassetsmeasured atfair value
through othercomprehensiv
e income

Net change infair value on
cash flow
hedgesExchangedifferenceson translationof foreign
operations

15,096

(20)

354

-

(82)

15,3481,140

1717,523141-

18,8211,140

17

17,523141-

18,821

-

-

-

-

(32)

(32)

(7,523)

-

-

(141)

-

(7,663)

-

-

-

-

-

-

-

-

(92)

-

-

(92)

(7,523)

-

(92)

(141)

(32)

(7,788)

8,713

(2)

17,784-(114)

26,381－64－

Remeasurements ofdefinedbenefitplans

Restricted
SharesTotal

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)（Millions of yen）

As of April
1, 2022
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, 2023

Net change infinancialassetsmeasured atfair value
through othercomprehensiv
e income

Net change infair value on
cash flow
hedgesExchangedifferenceson translationof foreign
operations

8,713

(2)

17,784-(114)

26,381(12)

2

12,001703-

12,695(12)2

12,001703-

12,695

-

-

-

-

(0)

(0)

226

-

-

(703)

-

(477)

(3)

-

113

-

-

111

-

-

-

-

-

-

223

-

113

(703)

(0)

(367)

8,925

-

29,898-(115)

38,709－65－

Remeasurements ofdefinedbenefitplans

Restricted
SharesTotal

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Thousands of U.S. dollars)

As of April
1, 2022
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, 2023

Net change infinancialassetsmeasured atfair value
through othercomprehensiv
e income

Net change infair value on
cash flow
hedgesExchangedifferenceson translationof foreign
operations

65,252(19)

133,185-(855)

197,563(86)

19

89,873

5,267-

95,073(86)

1989,873

5,267-

95,073

-

-

-

-

(2)

(2)

1,692

-

-

(5,267)-(3,575)

(21)

-

850

-

-

829

-

-

-

-

-

-

1,671

-

850

(5,267)(2)(2,749)66,837-

223,908-(858)

289,887

Remeasurements ofdefinedbenefitplans

Restricted
SharesTotal(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 immediately
－

66

－

transferred 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 “(33) Share-based
remuneration.”

－

67

－

(26) Dividends
The amounts of dividends paid are as follows:
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

Record date

Effective
date ofdividends

Source ofdividends¥30

March 31,2021

June 18,2021

Retained
Earnings¥35

September
30, 2021

December
8, 2021

Retained
Earnings

Class ofsharesTotal amount ofdividends

Dividends
per share

Ordinary
Shares¥6,447 million

Ordinary
Shares¥7,528 million

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
Resolution
Ordinary General
Meeting of
Shareholders on
June 18, 2022
Board of Directors
Meeting on
October 31, 2022

Class ofsharesTotal amount ofdividends

Dividends
per share

Record date

Effective
date ofdividends

Source ofdividends

Ordinary
Shares¥ 7,528 million($ 56,375thousand)¥35($0.26)

March 31,2022

June 20,2022

Retained
Earnings

Ordinary
Shares¥7,265 million($ 54,407thousand)¥35 ($0.26)

September 30,
2022

December
1, 2022

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, 2022 (April 1, 2021 to March 31, 2022)
Resolution

Class ofsharesTotal amount ofdividends

Dividends
per share

Recorddate

Effective
date ofdividends

Source ofdividends

Ordinary General
Meeting of
Shareholders on
June 17, 2022

Ordinary
Shares¥7,528 million¥35

March 31,2022

June 20,2022

Retained
Earnings

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
Resolution

Class ofsharesTotal amount ofdividends

Dividends
per share

Recorddate

Effective
date ofdividends

Source ofdividends

Ordinary General
Meeting of
Shareholders on June
16, 2023

Ordinary
Shares¥7,266 million($ 54,411thousand)¥35($0.26)

March 31,2023

June 19,2023

Retained
Earnings－

68－

(27) 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, 2022 (April 1, 2021 to March 31, 2022)(Millions of yen)

The Reportable
Segments

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

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, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)

The Reportable
Segments

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

Domestic
26,625

Overseas
143,814

Total
170,439

20,421

105,962

126,383

2,785

33,80636,590

3,419

4,046

7,466

54,66057,701
15,656
154,641
154,641

71,818
38,101
506
254,239254,239

126,478
95,802
16,162408,880
408,880

Other
Total
Adjustment
Amount Recorded in the Consolidated
Financial Statements

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Thousands of U.S. dollars)
Domestic
Overseas
Total
199,395
1,077,016
1,276,410
Digital Solutions
Semiconductor
152,934
793,543
946,477
Materials
Display Materials
20,855
253,170274,024
The Reportable
Segments
Edge Computing
25,60630,30355,909Materials
409,345537,839
947,184
Life Sciences
432,119
285,336
717,455
Plastics
Other
117,244
3,790
121,034
Total
1,158,103
1,903,981
3,062,084－

69－

Adjustment
Amount Recorded in the Consolidated
Financial Statements

-

-

-

1,158,103

1,903,981

3,062,084

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 ¥13,987 million ($104,746 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.

(3) Transaction Price Allocated to the Remaining Performance Obligations
－

70

－

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.

－

71

－

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

Transportation andwarehousing expenses
Salaries and allowances

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

7,997

8,878

66,48822,31531,829238,363

Retirement benefit
expenses

702

1,526

11,425Experiment andresearch expenses

21,83923,182

173,608

Depreciation
Supplies expenses

6,793
570

9,287
479

69,548
3,587

Business consignment
expenses

3,578

7,500

56,167

Other

23,535

27,167

203,452

87,330109,847

822,637

Total2) Amount of research and development expense included in general and administrative expenses andmanufacturing costs
Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2023

Millions of yen
Research anddevelopment expense

Millions of yen－

Thousands of U.S. dollars
26,951

24,406

72－

Fiscal year ended March 31,
2023

201,833

(29) Other Operating Income and Expenses
Other operating income consisted of as follows:
Fiscal year ended
March 31, 2022

Fiscal year ended March
31, 2023

Fiscal year ended March
31, 2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Gain on sales of noncurrent assets

19

85

634

171

372

2,788

7,467

3,429

25,681

1,348

-

-

-

1,020

7,637

1,814

2,166

16,21910,8197,071

52,958Rent income
Remeasured gains on
business combinations *1
Reversal of impairment
lossesGain on sale of shares ofsubsidiaries *2
Other
Total

*1 Remeasured gains on business combinations are described in "Notes of Consolidated Financial Statements (7)Business Combinations and Acquisition of Non-controlling Interest."*2 Gain on sale of shares of subsidiaries in fiscal year ended March 31, 2023 is the gain on the transfer of the
Elastomers Business.
Other operating expenses consisted of as follows:
Fiscal year ended March
31, 2022

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Loss on abandonment of
non-current assets

91

163

1,224

Loss on sales of noncurrent assets

12

264

1,976

Impairment loss
Other

3,228
2,620

7,801
2,801

58,423
20,975

Total

5,952

11,02982,598－73－

(30) Financial Income and Costs
Financial income consisted of the following:
Fiscal year ended March
31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended March
31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Interest income
Financial assets measured atamortized cost

166

351

2,629

1,232

434

3,250

2,017

2,738

20,502

3,415

3,523

26,382

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

Financial costs consisted of the following:
Fiscal year ended March
31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended March
31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

Interest expenses
Financial liabilities measured atamortized cost
Lease liabilities
Total

－

1,160

2,613

19,568

495

434

3,253

1,655

3,047

22,82174－

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

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

－

75

－

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Millions of yen)Amountincurred

Reclassificati
onbefore tax

Income tax

Net of tax

177

-

177

(295)

(118)

1,058

-

1,058

(324)

734

-

-

-

-

-

1,235

-

1,235

(619)

616

5

-

5

-

5

12,743(1,020)11,723

312

12,035

414

-

414

-

414

13,162(1,020)12,142

312

12,455

14,397(1,020)13,377(307)

13,071Other 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

－

76

－

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)(Thousands of U.S. dollars)
Amountincurred

Reclassificati
onbefore 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
method
Total

1,325

-

1,325

(2,208)

(883)

7,923

-

7,923

(2,426)

5,497

-

-

-

-

-

9,248

-

9,248

(4,634)

4,614

36

-

36

-

36

95,431(7,637)

87,794

2,338

90,133

3,103

-

3,103

-

3,103

98,571(7,637)90,934

2,338

93,272

107,819(7,637)100,182(2,296)

97,886

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

－

77

－

(32) Earnings per Share

Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

1) Basic earnings per share¥173.49¥75.56$0.57

Continuing operations
Discontinued operations¥162.52¥10.97¥75.56-$0.57-

to owners of parent
Continuing operations¥37,303 million¥34,944 million¥15,784 million¥15,784 million$118,208 thousand$118,208 thousand

Discontinued operations
Average shares outstanding during the year

¥2,360 million--

215,016

208,907

208,9072) Diluted earnings per share
Continuing operations¥173.26¥162.30¥75.47¥75.47

$0.57
$0.57

Discontinued operations(Basis of calculation)¥10.96

-

-

285

237

237

215,301

209,144

209,144(Basis of calculation)
Profit attributable(1,000 shares)

Increase in common shares due to stock
options (1,000 shares)
Average diluted shares outstanding during
the year (1,000 shares)(33) 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, 2022

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

Weighted
average exercise
price
Yen
1
1
1

263,600

1

Number of shares

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

Fiscal year ended March 31, 2023

Shares263,600(52,300)
211,300

Weighted
average
exercise price
Yen
1
1
1

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

211,300

1

0.01

Number of shares

The weighted average share price as of the exercise date of stock options exercised during the period was ¥3,505
－

78

－

and ¥3,284 ($24.59) in the fiscal years ended March 31, 2022 and 2023, respectively.
In the fiscal years ended March 31, 2022 and 2023, the exercise price of unexercised stock options was ¥1 each.
The weighted average remaining contract terms in the fiscal years ended March 31, 2022 and 2023 were 10.1
years and 8.9 years, respectively, for the unexercised balance at the end of the fiscal year, and 10.1 years and 8.9
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, 2023
(from April 1, 2022 to March 31, 2023)
Number of restricted shares granted

142,100 shares

Fair value on the grant date

¥3,505 per share ($26.25 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

Calculation method for fair value measurementa resolution.
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 base
－

79

－

number 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
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 was ¥3,535 and, the fiscal year ended March 31,2023 was ¥3,531($26.44).
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, 2022

Fiscal year ended March
31, 2023

Millions of yen

Millions of yen

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

Fiscal year ended March
31, 2023
Thousands of U.S.
dollars

461

476

3,563

172

169

1,265

167

219

1,639

800

863

6,467

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:

Carrying amount of liabilities

Fiscal year ended March 31,
2022

Fiscal year ended March 31,
2023

Fiscal year ended March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

172

－

341

80

－

2,550

(34) 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, 2022

U.S. dollar

Later than one
year

Millions ofyenMillions of yen Millions of yen Millions of yen Millions of yen Millions of yen

Forward exchange contracts
Purchase
2,575
Sell
5,533
Total

As of March 31, 2023

Contracted
Amount8,108

Fair value

Fair value

58
(365)

5,240

-

(48)

-

(308)

5,240

-

(48)

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
Sell
39,245(362)
39,245Later than one
year-

As of March 31, 2023

Total

Contracted
Amount

-

(362)

－

81

－

As of March 31, 2022

As of March 31, 2023

Assumedprincipal

Later than one
year

Contracted
AmountMillions ofyenMillions of yen Millions of yen Millions of yen Millions of yen Millions of yen

Fair value

Later than one
year

Fair value

Currency swap
U.S. dollars
EUR

28,394-

27,415-(1,483)-78,2492,332

74,910-(2,360)
(10)

Total

28,394

27,415(1,483)80,58074,910(2,370)

As of March 31, 2023
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
Total

586,000
17,461

561,000-(17,674)(71)

603,461

561,000(17,746)

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

As of March 31, 2022

As of March 31, 2023

As of March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Japanese yen

11,314

6,061

45,394

Korean won

1,704

2,334

17,480Thai baht

3,603

-

-

Foreign 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, 2022
Millions of yen

As of March 31, 2023

As of March 31, 2023
Millions of yen

Thousands of U.S. dollars

Japanese yen (weak U.S. dollar)
Korean won (weak U.S. dollar)

(113)
(17)

(61)
(23)

(454)
(175)

Thai baht (weak U.S. dollar)

(36)

-

-

－

82

－

(b) Equity Price Risks
Equity instruments held by the Group are principally shares of companies with which the Group hasbusiness relationships. These shares were acquired to expand businesses mutually and enhance thetransaction 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 therelationships with the business partners.
If the share price increases (decreases) by 5% with other changing factors remaining constant, othercomponents of equity (net of related tax effects) will increase (decrease) by ¥440 million ($3,293 thousand)for the fiscal year ended March 31, 2023 (fiscal year ended March 31, 2022: ¥526 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 therisks 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 Groupconfirms the credit status periodically by obtaining the latest credit report on transaction partners from externalorganizations 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 of receivables 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 high credit 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 expectedcredit loss is calculated by classifying receivables, etc. according to the nature of the credit risk of thecounterparty and multiplying 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, the loss allowance is recognized at the same amount as lifetime expected credit loss. In doing so, theamount of expected credit loss is determined as the difference between the present value, which is calculatedby discounting future estimated cash flows using the original effective interest rate for the asset, and the gross
－

83

－

carrying amount.
The Gross carrying amount and loss allowance of financial assets for which loss allowance is recognized are
as shown below. Time deposits are excluded from the table below as those are considered to be not exposed tocredit risks.
Trade and other receivables
Grosscarrying
amountAs of March Millions ofyen
31, 2022
As of March Millions ofyen
31, 2023

Other financial assets

Measured at
lifetime

Measured at 12-

Measured bymonth expected
expected credit simplified approachcredit losses
lossesMeasured at 12-month

Measured at lifetime

expected credit losses expected credit losses

7,409

-

69,265

23

4

8,404

-

71,02749

3

Thousandsof U.S.
62,939531,915365
23
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, 2023(Millions of yen)
Trade and other receivables
Loss Allowance

Measured at 12month expected

Measured at lifetime
expected credit

credit losses

lossesOther financial assets

Measured bysimplified approach

Measured at 12month expected

Measured at lifetime
expected credit

credit losses

losses

As of April 1, 2021

-

-

717

Increase

-

-

192

-

43

Decrease (Utilization)

-

-

(158)

-

(48)

Decrease (Reversal)

-

-

(217)

-

(69)

(0)

(48)

0

168

Other

-

-

58

Transfer to assets
associated with disposalgroup classified as held
for sale

-

-

(23)

-

(43)

As of March 31, 2022

-

-

567

-

4

Increase

-

-

227

-

-

Decrease (Utilization)

-

-

(127)

-

(1)

(105)

-

-

Decrease (Reversal)

-

-

Other

-

-

44

-

-

-

3

As of March 31, 2023

-

-

606

As of March 31, 2022

-

-

4,250

-

31

Increase

-

-

1,698

-

-

Decrease (Utilization)

-

-

(953)

-

(8)

Decrease (Reversal)

-

-

(785)

-

-

Other

-

-

329

-

-

(Thousands of U.S. dollars)

－

84

－

As of March 31, 2023

-

-

4,538

-

* 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.

－

85

－

23

(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 theserisks.
The balance of financial liabilities of the Group by maturity is as follows:(Millions of yen)
As of March 31,
2022

Carrying
amountNot later
than oneyear

1-2 years

2-3 years

3-4 years

Later than 5

4-5 years

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(Millions of yen)
As of March 31,
2023

Carrying
amountNot later
4-5 years---

79,627----

19,99814,804

2,342

3,756

6

15,00079,307234

234

13,215211

15,17632,54561,615

2,698

48

-

-

-

-

2,650

2,698

18,842

3,803

2,554

2,307

2,200

1,816

7,831

20,511

259,360

147,109

17,592

17,863

6,167

16,99958,026

263,756

than oneyear

1-2 years

2-3 years

79,627

79,627--

Commercial papers

19,99819,998-Borrowings

78,39043,398

Bonds payable

59,805Derivative liabilities
Lease liabilities

Trade and otherreceivables

Total

Contractual

Later than 5years

3-4 years

cash flows
Total(Thousands of U.S. dollars)
As of March 31,
2023

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

596,323596,323

-

-

-

-

-

596,323

Commercial papers

149,765

149,765

-

-

-

-

-

149,765

Borrowings

587,059

325,009110,870

17,53628,12845

112,334

593,923

Bonds payable

447,876

1,753

1,753

98,964

1,578

113,656

243,727

461,430

Derivative liabilities

20,206

362

-

-

-

-

19,84420,206

Lease liabilities

141,104

28,483

19,123

17,274

16,47813,60158,647

153,607

1,942,333

1,101,696

131,746

133,774

46,184

127,302434,552

1,975,255

Total

－

86

－

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, 2022

As of March 31, 2023

As of March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S. dollars

Carrying
AmountFair Value

Carrying
AmountCarrying
AmountFair Value

Fair Value

Long-term loans
payable22,383

21,584

41,61040,731

311,618

305,029

Bonds payable

34,89035,41359,80560,076447,876

449,909

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:(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

10,608-19,66130,269

-

2,069

-

2,069

-

2,069

-

2,069

Financial assets measured at fair value throughother comprehensive income
Investments (equity financial assets)
Total<Financial Liabilities>
Financial liabilities measured at fair value
through profit or loss
Derivatives
Total
－

87

－

(Millions of yen)
As of March 31, 2023
Level 1

Level 2

Level 3

Total

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

-

-

2,956

2,956

Derivatives

-

78

-

78

8,795

-

19,881

28,676

8,795

78

22,83731,710

-

2,698

-

2,698

Financial assets measured at fair value throughother comprehensive income
Investments (equity financial assets)
Total<Financial Liabilities>
Financial liabilities measured at fair value
through profit or loss
Derivatives
Contingent consideration

-

-

5,217

5,217

Total

-

2,698

5,217

7,915

(Thousands of U.S. dollars)
As of March 31, 2023
Level 1

Level 2

Level 3

Total

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

22,136

22,136

Derivatives

-

582

-

582

65,866-

148,889

214,754

65,866582

171,024

237,472

Derivatives-

20,206-

20,206

Contingent consideration--

39,06939,069Total-

20,20639,06959,274

Financial assets measured at fair value throughother comprehensive income
Investments (equity financial assets)
Total<Financial Liabilities>
Financial liabilities measured at fair value
through profit or loss

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
significant transfer between Level 1 and Level 2 in the fair value hierarchy.

－

88

－

Changes in financial instruments classified as Level 3 are as follows:
1.Other financial assets classified as Level 3
Fiscal year ended March
31, 2022

Fiscal year ended March
31, 2023

Fiscal year ended March
31, 2023(from April 1, 2021 toMarch 31, 2022)(from April 1, 2022 toMarch 31, 2023)(from April 1, 2022 toMarch 31, 2023)

Millions of yen

Millions of yen

Thousands of U.S. dollars

Balance at the beginning
Total gains and losses
Profit or loss (Note1)

21,09819,661

147,243

(947)

1,268

9,497

(1,393)

133

997

447

1,135

8,500

Purchase

1,676

1,447

10,833

Selling(1,396)

(70)

(524)

Other

29

531

3,975

(799)

-

-

19,661

22,837

171,024

Other comprehensive income (Note2)

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.

2.Other financial liabilities classified as Level 3
Fiscal year ended March 31, 2022
(from April 1, 2021 to March 31,
2022)

Fiscal year ended March 31, 2023
(from April 1, 2022 to March 31,
2023)

Fiscal year ended March 31, 2023
(from April 1, 2022 to March 31,
2023)

Millions of yen

Millions of yen

Thousands of U.S. dollars

Balance at the
beginning---

Increase (Note1)

-

5,217

39,069Balance at the
end

-

5,217

39,069(Note) 1． Details are described in "Notes of Consolidated Financial Statements (7) Business Combinations andAcquisition of Non-controlling Interest."
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. The financial liabilities classified as Level 3 are composed of contingent
considerations arising from business combinations. Contingent considerations are a payment
agreement that varies according to the level of achievement of certain indicators, such as sales after
the business combination and the number of biological samples acquired. The fair value of thecontingent consideration is estimated based on the achievement probability. For financial
instruments classified as Level 3, an increase or decrease in fair value if unobservable inputs arechanged to reasonably possible alternative assumptions is not significant.

－

89

－

4) Hedge Accounting
Effects of hedging instruments designated as hedge on the Group’s consolidated statement offinancial position are as follows:(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
Liabilities associated with
Interest rate swap

796

-

5

8,139

-

8,139

disposal 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)(Millions of yen)
As of March 31, 2023

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

-

-

-

-

-

-

-

-

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars(Thousands of US dollars)
As of March 31, 2023

Carrying amount of hedging

Notional principalof hedging

Item on the consolidated
statement of financial position

instruments

instruments

Asset

Liability

Cash flow hedges
Interest rate risk
Interest rate swap

-

-

-

-

-

-

-

-

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars

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:

－

90

－

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

Hedging gains(losses)
recognized as otherTransfer from other componentsof equity to profit or loss as Item of transfer to profit or loss
reclassification adjustments as reclassification adjustments(Note)

comprehensive 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（Millions of yen）
Fiscal year ended March 31,
2023 (April 1, 2022 to March 31,

Hedging gains(losses)
recognized as other2023)

comprehensive income

Transfer from other components
Item of transfer to profit or lossof equity to profit or loss as
as reclassification adjustments
reclassification adjustments

Cash flow hedges
Interest rate risk
Interest rate swap

-

-

-

-

-

-

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars(Thousands of U.S. dollars)
Fiscal year ended March 31,

Hedging gains(losses)

2023 (April 1, 2022 to March 31,
2023)

recognized as othercomprehensive income

Transfer from other components
Item of transfer to profit or lossof equity to profit or loss as
as reclassification adjustments
reclassification adjustments

Cash flow hedges
Interest rate risk
Interest rate swap

-

-

-

-

-

-

Hedging instruments of net
investment in foreign operations
Exchange rate risk
Borrowings in U.S. dollars

－

91

－

(35) Subsidiaries
The circumstances of the main subsidiaries of the Company is as below.
Name of the company

Percentage of
Voting Rights

Address%
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

MEDICAL&BIOLOGICALLABORATORIES CO., LTD.

Minato-ku, Tokyo, Japan

100.0

JSR Micro N.V.

Leuven, Belgium

100.0

JSR Micro, Inc.

Sunnyvale, CA U.S.A.

100.0(100.0)JSR Electronic Materials Korea Co., Ltd.

Gyeonggi-do, Korea

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

KBI Biopharma, Inc.

Durham, NC, U.S.A

100.0

Selexis SA

Geneva, SWITZERLAND

100.0

JSR Micro (Changshu) Co., Ltd.

Changshu,
JiangsuProvince, China

51.0

Crown Bioscience International

San Diego, CA U.S.A.

100.0(100.0)Indivumed Services GmbH & Co. KG

Hamburg, Germany

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

100.0
(100.0)69.4(69.4)JSR North America Holdings, Inc.

100.0

Sunnyvale, CA U.S.A.

100.0(100.0)The figure in the parentheses in the column of Percentage of Voting Rights is Indirect ownership ratio.
JSR Life Sciences, LLC

Sunnyvale, CA U.S.A.

The number of consolidated subsidiaries as of March 31, 2023 was 56 (64 as of March 31, 2022).
Changes in the consolidated subsidiaries in the current fiscal year are as follows:
The number of companies consolidated by acquisition, establishment, etc.: 6
The number of subsidiaries excluded by liquidation, sales, etc.: 14

－

92

－

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, 2022

As of March 31, 2023

As of March 31, 2023

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%

21,133

21,264

159,243(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
Profit or loss allocated to
non-controlling interests
Dividends paid for noncontrolling interests

Fiscal year ended
March 31, 2023
Millions of yen

Fiscal year ended
March 31, 2023
Thousands of U.S. dollars

1,834

942

7,052

1,097

779

5,836

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

Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total current liabilities
Total equity
Total liabilities and equity

As of March 31, 2022
Millions of yen
42,86224,091
66,953
18,736793
19,53047,424
66,953As of March 31, 2023
As of March 31, 2023
Thousands of U.S. dollars
Millions of yen
43,173323,324
24,008
179,795
67,181
503,119
18,771
140,578
732
5,481
19,503146,059
47,678357,060
67,181
503,1192) Condensed Statements of Profit or Loss and Comprehensive Income

Revenue
Profit (loss)
Comprehensive income

Fiscal year ended
March 31, 2022
Millions of yen
78,357
3,970
3,951
－

93

Fiscal year ended
Fiscal year ended
March 31, 2023
March 31, 2023
Millions of yen
Thousands of U.S. dollars
82,865620,571
1,972
14,768
1,845
13,816－

3) Condensed Statement of Cash Flows
Fiscal year ended
March 31, 2022

Fiscal year ended
March 31, 2023

Fiscal year ended
March 31, 2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

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(1,792)

2,573

19,268(3,499)(2,237)(16,754)(2,239)(1,590)(11,910)(7,531)(1,255)(9,396)

2,845(1,591)

11,912(36) Related Parties
1) Transactions with Joint Venture
Fiscal year ended March 31, 2022 (April 1, 2021 to March 31, 2022)
Attribute

JointventureName of the company

KRATON JSR
ELASTOMERS K. K.

Millions of yen

Balance at theend of thecurrent fiscal
year
Millions of yen

Manufacturing consignment ofelastomer products

10,6084,570

Supply of raw material gas

5,173

2,192

Contents of transactions

Transaction

amount(Notes) 1. 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.
2. There is no outstanding balance of collateral or guarantee. Loss allowance has not been made for thereceivables.

Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
Not Applicable2）Key Management Personnel Compensation
Fiscal year ended
March 31, 2022 (April
1, 2021 to March 31,
2022)

Fiscal year ended
March 31, 2023 (April
1, 2022 to March 31,
2023)

Fiscal year ended
March 31, 2023 (April
1, 2022 to March 31,
2023)

Millions of yen

Millions of yen

Basic compensation

335

405

Thousands of U.S. dollars
3,032

Bonuses
Share-based remuneration

234
426

148
504

1,106
3,772

996

1,056

7,910

Total

－

94

－

(37) Commitments
Commitments related to expenditures taking place after the last day of the fiscal year are as follows:

Acquisition of property, plant andequipment

As of March 31,2022

As of March 31,2023

As of March 31,
2023

Millions of yen

Millions of yen

Thousands of U.S.
dollars

12,541

7,108

53,233(38) Subsequent Events
Not Applicable

－

95

－

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, 2023, 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, 2023, 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.
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 management’s judgment as to whether an impairment loss should berecognized on goodwill allocated to a cash-generating unit for metal oxide resists(CGU)
The key audit matter

How the matter was addressed in our audit

As described in Note 17, “Impairment on
Non-Financial Assets” of the consolidated
financial statement, the Group recognized
goodwill of \48,149 million allocated to
CGU, which represented 7% of total assets inthe consolidated financial statements. The

The primary procedures we performed to assess
whether management’s judgment with respect to therecognition of an impairment loss on goodwill
allocated to the CGU was appropriate included thefollowing:goodwill arose when the Company acquired
control of Inpria Corporation.
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 fair value less costsof disposal of CGU exceeded the carrying
amount.
The fair value less costs of disposal was
discounted to the present value of an
estimated amount of future cash flows basedon the business plan approved bymanagement. The revenue projection basedon the business plan involved a high degreeof uncertainty as the revenue is affected by
future sales (sales price and sales volume)
generated by Inpria Corporation's metaloxide resist technology. Accordingly,
management’s judgment thereon had asignificant effect on the estimated future cash
flows.
In addition, selecting appropriate models andinput data for estimating the discount raterequires 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 CGU was one of themost significant matters in our audit of theconsolidated financial statements for thecurrent fiscal year, and accordingly, a key(1) Internal control testing
We tested the design and operating effectiveness ofcertain of the Company’s internal controls relevant tomeasuring the fair value less costs of disposal 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 fair value less costs of disposal.
(2) Assessment of the reasonableness of theestimated fair value less costs of disposal
We inquired of management and the personnel
responsible for CGU 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:•Assessed the appropriateness of sales priceprojections by comparing them with past prices ofsimilar products set at the start of the sale and thesubsequent price transition; and•Assessed the appropriateness of the sales growth
rates and sales volume projections used in thebusiness plan by comparing them with estimatedsales volume using available external data, such as
forecasts for market sales volume of similar
products and for mass-production schedules.

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.

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 17, “Impairment on
Non-Financial Assets” of the consolidated
financial statement, the Group recognized
goodwill of \64,204 million allocated to thedrug discovery and development services
business, which represented 9% of total
assets in the consolidated financial
statements. The goodwill arose primarily
when the Company acquired control ofCrown Bioscience International.

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
services business was appropriate included thefollowing:

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 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(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 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:thereon had a significant effect on theestimated future cash flows.
In addition, selecting appropriate models andinput data for estimating the discount raterequires a high degree of expertise invaluation.

•

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.

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 disclosure documents that contain or
accompany the audited consolidated financial statements, but does not include the consolidated
financial statements and our auditor’s report thereon.
We do not perform any work on the other information as we determine such information does not exist.
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
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 toinfluence 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.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year
ended March 31, 2023 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

Tatsuo Utsugi
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Tokyo Office, Japan
October 6, 2023
Notes to the Reader of Independent Auditor’s Report:
This is a copy of the Independent Auditor’s Report and the original copies are kept separately by theCompany and KPMG AZSA LLC.