•4559

Securities Code

63rd

Business Report
From April 1st, 2016 to March 31st, 2017

Contents
To Our Shareholders……………………………………………… P.1
Summary of Our Business Operations (Consolidated)………… P.3
Status of Research and Development…………………………… P.5
Research and Development Pipeline…………………………… P.6
Status of Production and Distribution /Outlook for Fiscal Year 2017…………………………………… P.7
Special Offers to Our Shareholders……………………………… P.8
Topics……………………………………………………………… P.9
Financial Statements (Consolidated)………………………… P.11
Company Information………………………………………… P.13
Share Information……………………………………………… P.14
Shareholder MemoTo Our Shareholders

We, Zeria Pharmaceutical Co., Ltd. (“Zeria”)
would like to express our thanks for yourparticular support.
We are pleased to report the business resultsof fiscal year 2016 (63rd business
operations) for the period from April 1st,
2016 to March 31st, 2017.

1

Chairman and CEO

President and COO

Sachiaki Ibe

Mitsuhiro IbeDuring the fiscal year under review, the Japanese economy is proceeding with moderate recovery based on
background of improvements in the environment for employment and income. However, the outlook was increasingly
unclear regarding the effect of political and economic trends overseas on future prospects for financial markets,
including stock and currency exchange markets, and on corporate earnings. This was the result of lower growth rates
across emerging markets, particularly China, the UK leaving the EU, the rise of protectionism represented by the startof the Trump administration, and increased political tension on the Korean peninsula.
For the pharmaceutical industry, among ethical pharmaceuticals, the government's revision of the drug price systemand promotion of the utilization of generic brand pharmaceuticals, which are initiatives to curtail healthcare
expenditures, have been accelerated strongly compared with previous years, and competition in OTC drugs market isgetting harder. As a consequence, both ethical pharmaceuticals and OTC drugs remain in such severe situation.
Under such circumstances, the Zeria Group has proactively invested resources on business during the fiscal year underreview, the final year of the 8th Mid-Term Management Plan (3 year term starting from fiscal year 2014 to fiscal year2016), to ensure the strong growth of the Ethical Pharmaceuticals and the Consumer Healthcare businesses, whichhave long been regarded as the inseparable “two wheels of a cart” of the Group, while actively expanding overseas
business.
As a result of these activities, net sales for the fiscal year under review were 64,849 million yen (up 3.8% from theprevious fiscal year). Operating profit was 4,541 million yen (down 0.5%), ordinary profit was 4,438 million yen (down
0.3%) and profit attributable to owners of parent was 3,544 million yen (up 0.9%).
In fiscal year 2016, the overseas sales to net sales ratio was 24.6%, compared with 20.0% in the previous fiscal year.
Operating profit ( ) / Ordinary profit (Profit attributable to owners of parent (Net sales(Unit: ¥million)(Unit: ¥million)

6,000

80,00060,000)/)61,01262,47564,8494,565 4,450
4,000

4,541 4,438

3,513

3,544

Fiscal Year 2015

Fiscal Year 2016

2,770
2,678
2,557

40,0002,000
20,000

0

0

Fiscal Year 2014

Fiscal Year 2015

Fiscal Year 2016

Fiscal Year 20142

Summary of Our Business Operations (Consolidated)

Ethical Pharmaceuticals BusinessNet sales¥

34,430 million

up 1.6% from the previous fiscal year

Net sales of major products

Asacol53.2%

Entocort

Consumer
Healthcare
Business(Net sales composition ratio)

PromacAcofideAcinonOther

AsacolEntocort
PromacAcofideAcinon¥16.65 billion¥4.35 billion¥2.56 billion¥2.49 billion¥2.22 billion

Consolidated net sales in Ethical Pharmaceuticals Business(Unit: ¥million)
40,00035,00033,75933,902

34,43030,00025,00020,0000

Fiscal Year 2014 Fiscal Year 2015 Fiscal Year 20163

In the Ethical Pharmaceuticals business, according to basis ofcompliance with promotion codes, Zeria sought to improve thequality of its medical representatives (MRs), and took steps toupgrade its medical information activities.
As for the main product Asacol ®, a therapeutic agent for
ulcerative colitis, sales struggled in Japan following the impactof the revision of NHI drug prices in April 2016, and the impactof generic brands. Overseas, however, sales grew satisfactorily
primarily due to expansion in the U.K. Furthermore, in regard
to the inflammatory bowel disease therapeutic agent,
Entocort ®, whose global rights excluding the united states
were acquired from AstraZeneca by Tillotts Pharma AG, awholly owned subsidiary of Zeria, the succession of thoserights for the manufacture and sale of Entocort® in principal
countries such as in Europe and Canada was completed by theend of the fiscal year under review, and sales are currently
expanding satisfactorily. Also, Entocort® was put on sale inJapan in November 2016 under the name of Zentacort® as atherapeutic agent for Crohn's disease, and we are working toquickly achieve market penetration. As for Acofide ®, thetherapeutic agent for functional dyspepsia, although thedevelopment of the market is behind schedule, we are working
to promote development by raising awareness of both disease
and treatment methods in medical institutions.
As a result of these, net sales in the business amounted to34,430 million yen (up 1.6% from the previous fiscal year).

Consumer Healthcare BusinessNet sales¥

In the Consumer Healthcare business, on the progress of thesuper-aged society, Zeria worked to develop markets through30,277 million

the supply of products which support self-medication for theup 6.5% from the previous fiscal year

further enhancement of product awareness and continuing
Hepalyse range

46.8%(Net sales composition ratio)

As for the main product range, Hepalyse ® range, intensive
advertising activities such as TV advertisements resulted in

Net sales of major products

EthicalPharmaceuticals
Business

consumer.

Chondroitin range

sales growth. In this range, Hepalyse® W Premium (a soft drink)for convenience stores that was launched in March 2016
contributed significantly to sales. Also, we strengthened the
product line-up with the launch in October 2016 of Hepalyse®

WithOne range

KING PLUS (second-class OTC drug) and Hepalyse® KING EX

Other(second-class OTC drug) as top-of-the-line mini drinks for drug
stores. Regarding Chondroitin product range, overwhelming

Hepalyse range¥12.58 billion

Chondroitin range¥7.11 billion

WithOne range¥1.59 billion

market share has been maintained firmly as a result of sales
activities that promoted its effectiveness, safety and highquality as a range of pharmaceuticals and clearly distinguishedit from health foods.
As a result, net sales in the business amounted to 30,277

Consolidated net sales in Consumer Healthcare Businessmillion yen (up 6.5% from the previous fiscal year).

(Unit: ¥million)
35,00030,00027,09528,41930,27725,00020,000

OTC drugs

15,0000

Fiscal Year 2014 Fiscal Year 2015 Fiscal Year 2016

Hepalyse® W series

4Status of Research and Development

In the Research and Development division, Zeria is

Zeria is conducting a Phase III trial for Z-213, a treatment

actively promoting overseas clinical trials of its own

for iron deficiency anemia and in-licensed drug fromoriginal drugs. At the same time, Zeria acquires in-

Vifor (International) AG, Switzerland.

licensed drugs that have gained global success andIn the area of Consumer Healthcare products, as well as

develops them for the Japanese market.

pushing ahead with the development of European

As part of its efforts to strengthen its new drug pipeline

herbal medicines, Zeria also launched new products one

in the priority gastrointestinal field, Zeria jointly

after the other.

conducted a Phase III trial with Kyowa Hakko Kirin Co.,

Meanwhile, Tillotts Pharma AG is developing therapeuticLtd. for additional dosages and administration of Z-206

drugs for lower gastrointestinal disease primarily in(Asacol ) targeting ulcerative colitis, and submitted an

Europe.

application for its approval in July 2016. Zeria obtained

Tillotts Pharma AG completed a Phase III trial for

approval for it in May 2017. Regarding development of

improved formulation of mesalazine (TP05), using new

Asacol® in China, Zeria also submitted an application fortechnologies, targeting ulcerative colitis and submitted

its approval in May 2013 following the completion of aan application for approval in Europe in January 2017.

Phase III trial.

In addition, being co-developed with Cancer Prevention®

As for Zeria’s own original drug Z-338 (Acofide ), it isPharmaceuticals, Inc. (USA), Tillotts Pharma AG is

conducting a Phase III trial in patients with functional

conducting a Phase III trial in Europe and the USA for adyspepsia in Europe.

therapeutic agent (TP09) targeting familial adenomatous

Zeria acquired approval for the manufacture and sale ofpolyposis.

Zentacort , a therapeutic agent for Crohn’s disease, inAs a result of these activities, research and development

September 2016 and began sales in November 2016.

expenses for the fiscal year under review decreased from

In addition, Zeria is conducting a global Phase III clinicalthe results of the previous fiscal year to 8,458 million yentrial for Z-100 which is targeting for cure of cervical(down 1.4% from the previous fiscal year).

®

®

cancer, in the Asian region including Japan.
As for Z-360, Zeria is implementing a global Phase II
clinical trial in the Asian region including Japan inpatients with pancreatic cancer.
5Research and Development Pipeline● Status of Pipeline of New Drugs
I. Domestic(As of June 16, 2017)

1) Gastrointestinal fieldStage
Approval

Development Code/Development
Indications
Generic Name
Zeria
Z-206/Mesalazine
Ulcerative colitis(Asacol® additional dosage and administration) (Co-development with Kyowa Hakko Kirin)

Phase II
Z-360
(Asia Global Development)

Zeria

Classification

Pancreatic cancer

SourcepH-dependent controlled-releaseformulation

Original(Tillotts Pharma AG)

Gastrin CCK2 receptor antagonist

Original

2) Other fields
Stage

Development Code/
Generic Name

Phase III
Z-100
(Asia Global Development)
Phase III

Development
Zeria

Z-213/Ferric carboxymaltose Zeria

Indications

Classification

SourceCervical cancer

Immunomodulator

Original

Iron deficiency anemia

Intravenous iron replacement

In-licensed

Products developed and launched
Development Code/Development
Generic Name
Budesonide
November 29, 2016
AstraZeneca(Product name: Zentacort®)
Launch Date

Indications

Classification

Crohn’s disease

Glucocorticoid

Notes
In-licensed

II. Overseas
Stage
NDA filed(China)Phase III(Europe)Phase III
(Asia)
NDA filed(Europe)Phase III(Europe, USA)

Development Code/
Generic Name

Development

Indications

Classification

Z-206/Mesalazine

Co-development
Ulcerative colitis
of Zeria and Tillotts Pharma

Z-338/Acotiamide

Zeria

Functional dyspepsia

Z-100

Zeria

TP05/Mesalazine

Tillotts Pharma

TP09/CPP-1X·Sulindac

Phase II completed
Z-338/Acotiamide(North America)
Phase II
Z-360
(Asia)

SourcepH-dependent controlled-releaseformulation
Upper gastrointestinal motility
modulator

Original(Tillotts Pharma AG)

Cervical cancer

Immunomodulator

Original

Ulcerative colitis

OPTICORE formulation

Original(Tillotts Pharma AG)

Tillotts Pharma
Familial adenomatous(Co-development with Cancer
polyposis
Prevention Pharmaceuticals)

Polyamine biosynthesis suppression

In-licensed

Zeria

Functional dyspepsia

Upper gastrointestinal motility
modulator

Original

Zeria

Pancreatic cancer

Gastrin CCK2 receptor antagonist

Original

Original

Reference

Phase I Clinical Trials

Phase II Clinical Trials

Phase III Clinical Trials

After confirmation of the efficacy and safety by animalstudies, “drug candidates” are tested on a small groupof healthy subjects. These trials aim for determination of
not only safety, but also how long it takes for the bodythrough an absorption of the drug and the degree towhich the body excrete the drug.

After safety has been confirmed by Phase I
clinical trials, the efficacy and safety of the “drugcandidate,” as well as the appropriate methodof use such as dosage and administration
method, are tested on a small number ofpatients against placebo*.

By administering to a large number of patients, the efficacy, safety andmethod of use of the “drug candidate” are studied as a final stage. During
this phase, the “drug candidate” is tested against other drugs on themarket or placebo*. In many cases, stringent testing methods called
double-blind trials are performed.

* Placebo: A fake drug that does not contain the active ingredient, but which is indistinguishable from the “drug candidate” by outer appearance or taste, etc.

6

Status of Production and Distribution / Outlook for Fiscal Year 2017

● Status of Production and Distribution● Outlook for Fiscal Year 2017

In Zeria’s Production and Distribution division, operation isproceeding with the securing of quality set as top priority. In
departments related to Production, we are focusing on the
securing of even higher quality while reducing the cost of goods. In
departments related to Distribution, meanwhile, Zeria outsourced
logistic operations, and further improvement in operational
efficiency and cost reductions are being achieved as a result.
Furthermore, following renovation work at the Saitama Plant in
the previous fiscal year, in order to achieve stable supply of drink
products whose demand is expected to rise, Zeria has been carryingout renovation work at the Tsukuba Plant aiming to increase
production capacity in the fiscal year under review. This renovation
was completed in March 2017 and operation has begun.

Regarding outlook for the consolidated results of fiscal year 2017(ending March 31, 2018), Zeria forecasts that it will secure increases
in both sales and profits, with net sales of 68.0 billion yen (up 4.9%
from the previous fiscal year), operating profit of 5.0 billion yen (up10.1%), ordinary profit of 5.0 billion yen (up 12.7%), and profit
attributable to owners of parent of 3.8 billion yen (up 7.2%).

● Close-up
A refresh of New Hepalyse ® Drink and
Hepalyse® Hi
We launched new products witha refreshed formula for New
Hepalyse® Drink and Hepalyse® Hi.
Hepalyse® Drink II
Hepalyse ® Drink II, a nutrient
tonic for physical fatigue andexhaustion, is a refresh of New
Hepalyse® Drink. In addition to ingredients such as liverhydrolysate and diisopropylamine dichloroacetate that assist
the functions of the liver and digestive system, we added
lycium fruit and astragalus root to the formula. Hepalyse®
Drink II improves the functions of the digestive system fromwithin the body, relieves physical fatigue, and more.
Hepalyse® Hi PLUS
Hepalyse® Hi PLUS is a refresh of Hepalyse® Hi. In addition
to ingredients supporting the liver and digestive system
function, such as liver hydrolysate and diisopropylamine
dichloroacetate, it has six types of natural medicinal
ingredients providing effective relief from physicalfatigue and exhaustion, including cuscuta chinensis andepimedium grandiflorum, which are effective for antifatigue and work as a pick-me-up. We recommend thisproduct to people who experience prolonged fatigue.

7

Net sales
In the Ethical Pharmaceuticals business, Zeria expects an increasein sales resulting from overseas sales growth of Asacol® which is atherapeutic agent for ulcerative colitis, contribution of Entocort®
which is a therapeutic agent for inflammatory bowel disease, andthe development of buildup of the domestic market for Acofide®
which is a therapeutic agent for functional dyspepsia, despite
continuing difficult conditions. In the Consumer Healthcare
business, Zeria expects increases in sales due to sales growth ofmain products including the Hepalyse® product range.
ProfitDespite expectations that research and development expenses willcontinue to be high because of the progress in clinical trials being
conducted in and outside Japan, and advertising expenses will be
increased, Zeria forecasts higher operating profit, ordinary profit
and profit attributable to owners of parent compared with the fiscal
year under review, due to increased sales of main products.

63rd Term¥64,849 million

64th Term (Forecast)¥68,000 million

Net Sales(

Operating Profit

down 0.5%
up 10.1%( fromthe previous fiscal year ) ( from the previous fiscal year )Ordinary Profit(

Profit Attributableto Owners of Parent

up 3.8%from the previous fiscal year

) (¥4,541 million¥4,438 million
down 0.3%
from the previous fiscal year

¥3,544 million

up 4.9%from the previous fiscal year)

¥5,000 million) (¥5,000 million
up 12.7%
from the previous fiscal year

¥3,800 million)

up 0.9%up 7.2%( fromthe previous fiscal year ) ( from the previous fiscal year )Special Offers to Our Shareholders

Zeria offers a hospitality program toits shareholders in recognition of
their constant support.
Shareholders who own 1,000 or more of Zeria's
shares can choose from one of the six options A to F.
Shareholders who own 100 or more but less than
1,000 of Zeria's shares receive option G.
Zeria hopes its shareholders will try the gift products
for better understanding of its wide-ranging productstructure.
OptionA
OptionSoft drinks, Designated quasi-drug, Food for specified health uses

D

Chondroitin-Content Intensive Nighttime Essence

2 bottles of ZZ:CC® ADSORB ESSENCE (30g)* ‌This product is available at the Zeria
online store
http://www.zeriaonline.com/.

OptionE

Three-product Quality Moisturizer Set

OptionHigh-purity chondroitin with natural ions to moisturize and give

IONA Three-product Basic Skincare Set

Set of aluminum can drinks and Hepalyse® W

B

Health drink

OptionCosmetics and health products

C

OptionF

2 bottles of Chondrobe®
Concentrate, JUNKOU®

firmness to aging skin

IONA R Two-productSpecial Care Set* ‌This product is available at the Zeria
online store
http://www.zeriaonline.com/.

Set of ChondroMax® and Aposty®

OptionG

Drink containing liver extract and turmeric extract

10 bottles of Hepalyse® W

8Topics

Zentacort® Capsule 3 mg, a therapeutic agent for Crohn's disease, is launched
On November 29, 2016, Zeria launched Zentacort® Capsule 3 mg,a therapeutic agent for Crohn's disease.
Crohn's disease is a chronic inflammatory bowel disease of
unknown cause. Symptoms include abdominal pain, diarrhea,
bloody stool, and weight loss. This illness can cause inflammation
and ulcers on any part of the digestive tract, from the mouth tothe anus, but symptoms occur most frequently from the end of
the small intestine to the large intestine.
Zentacort® is sold as Entocort® in over 40 nations around theworld. It's made with budesonide, which is recommended inoverseas guidelines as the first choice for treating Crohn's disease.
In Japan, AstraZeneca received a development request from the
Ministry of Health, Labour and Welfare, and began developmentin December 2010. In July 2015, Tillotts Pharma AG, a subsidiaryof Zeria in Switzerland, acquired the global rights to Entocort®,
excluding the United States, from AstraZeneca Subsequently, Zeria
submitted an application for approval to manufacture and sell
Entocort® in October 2015, and began sales on November 29, 2016.
Zentacort® is an enteric-coated sustained-release product designed
to release its active ingredient, budesonide, in the small intestineand near the colon, and is effective in treating the mild tomoderate symptoms of Crohn's disease during its active period.
Budesonide, a locally-acting glucocorticoid, has a high first-passmetabolism after absorption and fewer systemic side effects than
traditional glucocorticoids.
Zeria believes that by selling Zentacort® Capsule 3 mg it can
provide a new option for treating Crohn's disease.
9Hepalyse® KING PLUS and Hepalyse® KING EX are launched
On October 1, 2016, Zeria launched two mini drinks that are nutrient tonics for physical fatigue and exhaustion, Hepalyse®
KING PLUS (second-class OTC drug) and Hepalyse® KING EX (second-class OTC drug).

In its range of Hepalyse® brand OTC drugs, Zeria has been selling Hepalyse® PLUS II tablets, and the mini drinks Hepalyse®
Drink II, Hepalyse® Hi PLUS, and Hepalyse® KING. These products have become immensely popular.
Hepalyse® KING PLUS and Hepalyse® KING EX are new top-of-the-line products in the Hepalyse® KING series that contain
increased liver hydrolysate, natural medicinal ingredients to fortify the stomach and increase vigor, and royal jelly. These
products support people who suffer from fatigue.

Character of Hepalyse® KING PLUS
In addition to containing 300 mg of liver hydrolysate,
the most among the Hepalyse ® drink series, Hepalyse ®
KING PLUS has natural medicinal ingredients to fortify thestomach, such as double the amount of ginger of Hepalyse®
King and the new ingredient cinnamon bark. These
ingredients fortify weakened livers and digestive system andprovide effective relief from physical fatigue and exhaustion.

Character of Hepalyse® KING EX
Hepalyse® KING EX is the topmost product in the Hepalyse®
drink series. In addition to containing 300 mg of liverhydrolysate, it contains various natural medicinal ingredients that are effective for anti-fatigue and work as a pick-me-up/
metabolic stimulant, such as eleutherococcus senticosus rhizome, royal jelly, and more. Hepalyse® KING EX relieves fatigue,
etc., caused by a weakened liver as well as persistent exhaustion.

10

Financial Statements (Consolidated)

Consolidated Balance Sheets (Summary)
Term
Item

(Unit: ¥million*)

Previous Fiscal Year Current Fiscal Year(As of March 31, 2016)(As of March 31, 2017)

AssetsItem

Previous Fiscal Year Current Fiscal Year(As of March 31, 2016)(As of March 31, 2017)

48,24545,178

Liabilities

39,69538,764

Cash and Deposits

12,3439,250

Notes and Accounts Payable-Trade

2,041

2,272

Notes and Accounts Receivable-Trade

14,763

16,620

Short-Term Loans Payable

39,03733,061Inventories

8,013

8,608

Other

7,166

9,843

744

718

6,865

5,674

3,869

3,599

Long-Term Loans Payable

4,653

2,884

(39)

(33)

Net Defined Benefit Liability

643

757

79,48275,592

Asset Retirement Obligations

75

54

Property, Plant andEquipment

23,27424,154

1,492

1,978

Buildings and Structures

8,428

8,252

55,11050,853

Machinery, Equipment
and Vehicles

2,635

3,764

11,671

11,69856,45457,928Land

Capital Stock

6,593

6,593

Construction in Progress

143

58

Capital Surplus

12,055

11,685

Other

394

379

Retained Earnings

37,81039,654

Intangible Assets

35,78333,884(4)(5)

Investments and Other Assets

20,424

17,553

7,280

5,423

Investment Securities

12,471

9,206

879

231

Deferred Tax Assets

13

31

4,212

2,520

7,113

7,686

Accumulated Other Comprehensive
IncomeValuation Difference on Availablefor-Sale Securities
Foreign Currency Translation
Adjustment
Remeasurements of Defined
Benefit Plans

2,188

2,670

Other

870

670

Non-Controlling Interests

332

152

Allowance for Doubtful Accounts

(43)

(41)

Total Net Assets

64,06763,504

119,178

114,357

119,178

114,357

Current Assets

Deferred Tax Assets
Other
Allowance for Doubtful Accounts
Noncurrent Assets

Net Defined Benefit Asset

Total Assets

11

Term

Current Liabilities

Noncurrent Liabilities

Other
Total Liabilities
Net Assets
Shareholders’ Equity

Treasury Stock

Total Liabilities and Net Assets

Unit: ¥million rounded down to nearest million

Consolidated Statements of Income (Summary)(Unit: ¥million*)

Consolidated Statements of Cash Flows (Summary)Previous Fiscal Year Current Fiscal Year

Term
Item

(From April 1, 2015
to March 31, 2016)(From April 1, 2016
to March 31, 2017)62,475
17,93044,54462
58
44,54839,982
4,565
352
467
4,450
1,091
280
5,262
602
1,127
3,532
18
3,513

64,84918,16846,68058
48
46,69142,149
4,541
337
440
4,438
810
327
4,920
600
744
3,575
31
3,544

Net Sales
Cost of Sales
Gross Profit
Reversal of Provision for Sales Returns
Provision for Sales Returns
Gross Profit-Net
Selling, General and Administrative Expenses
Operating profit
Non-Operating Income
Non-Operating Expenses
Ordinary profit
Extraordinary Income
Extraordinary Loss
Profit before Income Taxes
Income Taxes-Current
Income Taxes-Deferred
Net Profit
Profit Attributable to Non-Controlling Interests
Profit Attributable to Owners of Parent

Term
Item

(Unit: ¥million*)

Previous Fiscal Year Current Fiscal Year
(From April 1, 2015
to March 31, 2016)(From April 1, 2016
to March 31, 2017)

Net Cash Provided by (Used in)Operating Activities

5,694

7,238

Net Cash Provided by (Used in)Investing Activities(32,709)(703)

Net Cash Provided by (Used in)
Financing Activities

22,416(8,982)

Effect of Exchange Rate Change
on Cash and Cash Equivalents(1,070)(644)

Net Increase (Decrease) in
Cash and Cash Equivalents(5,669)(3,092)

Cash and Cash Equivalents
at Beginning of Year

17,88012,21012,2109,118

Cash and Cash Equivalents
at End of Year

Unit: ¥million rounded down to nearest million

Unit: ¥million rounded down to nearest million

Consolidated Statements of Changes in Net Assets (Summary) (From April 1, 2016 to March 31, 2017)
Shareholders’ Equity

Balance at the Beginning of Current Period

CapitalStock

CapitalSurplusRetained
Earnings

Treasury
Stock

6,593

12,05537,810(4)(Unit: ¥million*)

Accumulated Other Comprehensive Income
NonValuation
Foreign
Total
Remeasurements Total Accumulated Controlling Total Net
Other
AssetsShareholders’ Difference on Currencyof DefinedInterests
Available-forTranslation
Comprehensive
EquityBenefit Plans
Sale Securities Adjustment
Income56,454

879

4,212

2,188

7,280

332

64,067

Changes of Items during the Period
Dividends from Surplus(1,699)(1,699)(1,699)Profit Attributable to Owners of Parent

3,544

3,544

3,544

(0)

(0)

(370)

(370)

(0)

Purchase of Treasury Stock
Change in Ownership Interestof Parent due to Transactions
with Non-Controlling Interests(370)

Net Changes of Items Other
than Shareholders’ Equity(647)(1,691)482(1,856)(179)(2,036)

Total Changes of Items during the Period

-

(370)

1,844

(0)

1,473

(647)

(1,691)482(1,856)

(179)

(562)

Balance at the End of Current Period

6,593

11,68539,654(5)

57,928

231

2,520

2,670

5,423

152

63,504

Unit: ¥million rounded down to nearest million

12Company Information (As of March 31, 2017)■ Company Outline■ Place of Business

Established:

December 1955

Paid-in Capital:¥6,593,398,500

Number of Employees:

1,767 (Consolidated)

Business Activities:

1. ‌Manufacaturing, sales, import andexport of pharmaceuticals, quasidrugs and reagents.
2. ‌Manufacturing, sales, import andexport of cosmetics, health foods,
soft drinks, hygienic goods andmedical devices.

• Headquarters• Sapporo Branch• Sendai Branch• Tokyo Branch• Tokyo 3rd Sales Office• Kanagawa 1st and 2nd Sales Office• Saitama Sales Office• Chiba Sales Office• Kita Kanto Sales Office• Koshinetsu Sales Office• Nagoya Branch• Shizuoka Sales Office• Osaka Branch• Osaka 2nd Sales Office• Kobe Sales Office■ Directors and Audit & Supervisory Board Members

13• Keiji Sales Office• Hokuriku Sales Office• Chugoku & Shikoku Branch• Okayama Sales Office• Takamatsu Sales Office• Fukuoka Branch• Central Research Laboratories• Saitama Plant• Tsukuba Plant• Tokyo Distribution Center• Sapporo Distribution Center• Saitama Distribution Center• Osaka Distribution Center• Kyushu Distribution Center

Chairman and CEO

Sachiaki Ibe

President and COO

Mitsuhiro Ibe

Executive Vice President

Hirokazu EndoManaging Director

Makoto Kishimoto

Director

Akira Ohno

■ Number of Consolidated Subsidiaries: 13

Director

Tetsuo Komori

Director

Hiroki Kato

Director

Yoshihiro Hiraga

Director

Katsuyuki Ishii

Director

Toshiaki Kawagoe

Director

Mitsuyuki Yoshijima

Audit & Supervisory Board Member

Koujirou Takami

Audit & Supervisory Board Member

Shigeya Furuhata

Audit & Supervisory Board Member (Outside)

Yukiko Naka

Audit & Supervisory Board Member (Outside)

Hiroshi Wakabayashi• Tillotts Pharma AG (Switzerland)• ZPD A/S (Denmark)• Zeria Healthway Co., Ltd.
• Tillotts Pharma AB (Sweden)• Tillotts Pharma Ltd. (Ireland)• Tillotts Pharma UK Ltd. (United Kingdom)• Tillotts Pharma Czech s.r.o. (Czech Republic)• Tillotts Pharma Spain S.L.U. (Spain)• Tillotts Pharma GmbH (Germany)• Tillotts Pharma France SAS (France)• IONA INTERNATIONAL CORPORATION• Zevice Co., Ltd.
• Pharmaceutical Joint Stock Company of February 3rd (Vietnam)

Aomori, Utsunomiya, Kanetsu, Takasaki, Yamaguchi, Yonago,• Other Sales Office Matsuyama, Kochi, Nagasaki, Kumamoto, Oita, Kagoshima, Okinawa

Share Information (As of March 31, 2017)■ Status of Shares■ Distribution of Shares by Shareholder Type(i) Number of authorized shares:

119,860,000 shares(ii) Number of shares outstanding:

53,119,190 shares(iii) Number of shareholders:

15,549■ Major Shareholders
Number of
Shares Held

Percentage
Held (%)

Ibe Corporation

4,741,847

8.9

Japan Trustee Service Bank, Ltd. (Trust Account)

2,569,400

4.8

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,107,050

4.0

Morinaga Milk Industry Co., Ltd.

2,040,215

3.8

Sachiaki Ibe

1,592,967

3.0

Sumitomo Mitsui Banking Corporation

1,406,131

2.6

Mizuho Bank, Ltd.

1,406,053

2.6

Zeria Pharmaceutical Co., Ltd. Employee Stockholding Plan

1,273,129

2.4

Resona Bank, Limited

1,182,385

2.2

991,000

1.9

Name of Shareholder

The Master Trust Bank of Japan, Ltd. (Trust Account)

Financial Instruments Business
468,430 shares(0.88%)

Foreigners
3,901,607 shares(7.34%)

Individual Shareholders
and Others
13,426,839 shares(25.28%)Distribution Ratioof Shares
Total
53,119,190 shares
Other Domestic
Corporations
17,662,108 shares(33.25%)
Financial Institutions
17,660,206 shares (33.25%)(Note) The percentage held is calculated by subtracting treasury stock (totaling 4,192 shares).

■ Share Price and Trading Volume
Share Price (¥)

2,500
2,000

Number of
Shares Traded(1,000 shares)
5,000

1,500

4,000

1,000

3,000
2,000

500

1,000
0

2016
April

May

June

July

AugustSeptember

OctoberNovember

December

2017
January0
February

March

14

Shareholder Memo
Fiscal Year

From April 1st of each year to March 31st of the following year

Ordinary General Meetingof Shareholders

Late June of each year

Record Date

Ordinary General Meeting of Shareholders and end ofterm dividend: March 31 of each year
Interim dividend: September 30 of each year

Transfer Agent

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo

Account Management
Institution for Special Account

Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo

Mailing Address

Stock Transfer Agency Business Planning Department,
Sumitomo Mitsui Trust Bank, Limited
2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
TEL: 0120-782-031 (toll-free)Handling operation is conducted in main branch andall domestic branches of Sumitomo Mitsui Trust Bank,
Limited.

(Inquiry information)● Applications for change of address or for purchase demands offractional shares, etc.
Please send such notifications or applications to the securities company
where your account is held.
For shareholders for whom a special account has been opened because
there is no account held by a securities company, please send such
notifications or applications to Sumitomo Mitsui Trust Bank, Limited, theaccount management institution for the special account.
● Applications for payment of dividends payable

Please send such applications to the transfer agent, Sumitomo Mitsui
Trust Bank, Limited.
● Statement of Dividend Calculation

The “Statement of Dividend Calculation” that is sent to shareholders at
the time of dividends payment serves as your “Payment Notification
Statement,” based on the provisions of the Act on Special Measures
Concerning Taxation. When you file your final tax return, you can use thisdocument as the accompanying documentation.
Shareholders who receive payment of dividends by the dividend warrant
shall also receive the “Statement of Dividend Calculation.” Shareholders
who file final tax returns should store this document in a secure place.

Please refer to latest IR information on our website.
The Company has set up a website for the purpose of providing accurate information on atimely basis. The website contains a broad array of information useful for shareholders andinvestors, from IR information to the latest news.

http://www.zeria.co.jp/english/

Customer Service, Zeria Pharmaceutical Co., Ltd.
10-11 Nihonbashi-kobunacho, Chuo-ku, Tokyo 103-8351
TEL 03-3663-2351 (Main) FAX 03-3663-2352
03-3661-2080
http://www.zeria.co.jp/