[Translation]

Annual Securities Report(The 15th Business Term)
From April 1, 2018 to March 31, 2019

CYBERDYNE, INC.

This is an English translation of part of the Annual Securities Report (有価証券報告書).
Of the pages of Annual Securities Report translated in this document, "Part I Informationon the Company V. Consolidated Financial Statements and Other Information 1.
Consolidated Financial Statements" were audited by Deloitte Touche Tohmatsu LLC.
Annual Securities Report was filed to the Director of the Kanto Local Finance Bureau
via Electronic Disclosure for Investor's NETwork ("EDINET") pursuant to the Financial
Instruments and Exchange Act of Japan.

I. Consolidated financial statements and Notes to consolidated financial statements
1. Consolidated financial statements(i) Consolidated statement of financial position
As of March 31, 2019
Note

2018

2019

Millions of yen

Millions of yen

AssetsCurrent assets
Cash and cash equivalents

7,30

10,8208,796

Trade and other receivables

8,30

385

257

Other financial assets

9,30

20,00420,505Inventories

10

565

901

Other current assets

11

Total current assets

32

169

31,80730,627

Non-current assets
Operating lease assets

12,16

401

463

Property, plant and equipment

12

11,339

11,624

Intangible assets

13

90

70

Investments accounted for using equity method

14

474

456

Other financial assets

9,30

2,406

2,431

Other non-current assets

11

81

74

14,791

15,11846,59845,746

Total non-current assets
Total assets

- 1 -

Note

2018

2019

Millions of yen

Millions of yen

Liabilities and equity
Liabilities
Current liabilities
Trade and other payables

17,31

274

284

Other current liabilities

19

386

370

659

654

－

544

Total current liabilities
Non-current liabilities
Third-party interests in CEJ Fund

28,31

Provisions

18

91

91

Deferred tax liabilities

15

145

254

Other non-current liabilities

19

Total non-current liabilities
Total liabilities

29

－

265

889

925

1,543

EquityShare capital

20

26,744

26,745

Capital surplus

20

26,49526,494

Treasury shares

20

(0)

(0)

Other components of equity

29,30

(65)

(1,048)Retained earnings

20(7,476)(7,972)

45,69844,217(24)(15)

45,674

44,203

46,59845,746

Total equity attributable to owners of the parent
Non-controlling interests
Total equity
Total liabilities and equity- 2 -(ii) 【Consolidated statement of profit or loss and consolidated statement of comprehensive income】【Consolidated statement of profit or loss】
Year ended March 31, 2019
Note
Revenue
Cost of sales

2018

2019

Millions of yen

Millions of yen

6,22

1,728

1,709

10,16,23

(523)

(481)

1,204

1,227

(834)

(998)

(1,390)(1,454)(2,223)(2,453)Gross profit
Selling, general and administrative expenses
Research and development expenses
Other selling, general and administrative expenses

16,23
16,23,
29,32

Total selling, general and administrative expenses
Other income

24

364

406

Other expenses

24

(4)

(11)

Operating profit (loss)

(659)

(830)

Finance income

25,30

13

239

Finance costs

25

(6)

(15)

Gains related to CEJ Fund

31

－

61

14

(21)

(24)

(672)

(569)

Share of profit (loss) of investments accounted for using
equity method
Profit (loss) before tax
Income tax expense

15

Profit (loss)

(6)

(74)

(678)

(643)

(673)

(632)

Profit (loss) attributable to
Owners of parent

(5)

(11)

(678)

(643)

Basic earnings (loss) per share (yen)(3.13)(2.94)

Diluted earnings (loss) per share (yen)(3.13)(2.94)

Non-controlling interests
Profit (loss)
Earnings (loss) per share

27

- 3 -

【Consolidated statement of comprehensive income】
Year ended March 31, 2019
Note

2018

2019

Millions of yen
Profit (loss)

Millions of yen
(678)

(643)

(394)

(858)

(394)

(858)

(12)

14

(12)

14

Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value through othercomprehensive income

26,30

Total of items that will not be reclassified to profit orloss
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign
operations

26

Total of items that may be reclassified to profit or loss
Total other comprehensive income, net of tax
Comprehensive income

(406)

(845)

(1,084)(1,487)(1,076)(1,480)Comprehensive income attributable to
Owners of parent
Non-controlling interests

(8)

(7)

Comprehensive income(1,084)(1,487)- 4 -(iii) 【Consolidated statement of changes in equity】
Year ended March 31, 2019
Equity attributable to owners of parent
Other components of equity

Note

Share capital

Capital surplus

Treasury shares

Financialassetsmeasured atfair value
through othercomprehensive
incomeExchangedifferences ontranslation offoreign
operations

Share
acquisitionrightsMillions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2017

26,744

26,495

(0)

417

2

12

Profit (loss)

－

－

－

－

－

－

Other comprehensive income

－

－

－

(394)

(9)

－

－

－

－

(394)

(9)

－

－

－

－

－

－

7

－

－

－

(100)

－

－

－

－

－

－

－

－

－

(100)

－

7

Total comprehensive income
Share-based payment transactions

29

Transfer from other components ofequity to retained earnings
Equity transaction with noncontrolling interest－－

March 31, 2018

26,744

26,495

(0)

(77)

(7)

19

Profit (loss)

－

－

－

－

－

－

Other comprehensive income

－

－

－

(858)

10

－

－

－

－

(858)

10

－

1

(2)

－

－

－

－

－

－

－

(135)

－

－

－

－

－

－

－

－

1

(2)

－

(135)

－

－

26,74526,494(0)(1,071)

3

19

Total transactions with owners

Total comprehensive income
Issuance of new shares

20

Transfer from other components ofequity to retained earnings
Equity transaction with noncontrolling interest
Total transactions with owners
March 31, 2019

Equity attributable to owners of parent
Other
components ofequityRetainedearnings

Total

Non-controllinginterests

Total equity

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

March 31, 2017

432

(6,903)

46,768(31)

46,737

Profit (loss)

－

(673)

(673)

(5)

(678)

Other comprehensive income

(403)

－

(403)

(3)

(406)

(403)

(673)

(1,076)(8)(1,084)

7

－

7

－

7

(100)

100

－

－

－

－

－

－

15

15

(93)

100

7

15

21

March 31, 2018

(65)

(7,476)45,698(24)

45,674

Profit (loss)

－

(632)

(632)

(11)

(643)

Other comprehensive income

(848)

－

(848)

4

(845)

(848)

(632)

(1,480)(7)(1,487)

－

－

(1)

－

(1)

(135)

135

－

－

－

－

－

－

17

17

Note

Total comprehensive income
Share-based payment transactions

29

Transfer from other components ofequity to retained earnings
Equity transaction with noncontrolling interest
Transfer from other componentsof equity to retained earnings

Total comprehensive income
Issuance of new shares
Transfer from other components ofequity to retained earnings
Equity transaction with noncontrolling interest

20

Total

- 5 -

Equity attributable to owners of parent
Other
components ofequityNote

Transfer from other componentsof equity to retained earnings
March 31, 2019

Retainedearnings

Total

Non-controllinginterests

Total equity

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

(135)

135

(1)

17

16

(1,048)(7,972)

44,217(15)

44,203

Total

- 6 -

(iv) 【Consolidated statement of cash flows】
Year ended March 31, 2019
Note

2018

2019

Millions of yen

Millions of yen

Cash flows from operating activities
Profit (loss) before tax(672)

Depreciation and amortization

399

436

Finance income

(13)

(239)

Finance costs

615

Gains on CEJ Fund

－

(61)

21

24

(38)

(336)

Decrease (increase) in trade and other receivables

(6)

128

Increase (decrease) in trade and other payables

85

24

Other

157

(138)

(62)

(716)

Interest received

10

17Interest paid

(1)

(0)

Income taxes paid

－

－

－

(76)

(53)

(775)

Purchase of investments(43,000)(28,000)

Proceeds of redemption of investments

43,00030,000Share of loss (profit) of investments accounted for using
equity method
Decrease (increase) in inventories

Subtotal

Payments for administrative expenses etc. related to CEJFundNet cash provided by (used in) operating activities(569)

Cash flows from investing activities

Payments into time deposits
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sale of investment securities
Purchase of investments accounted for using equity
methodOther
Net cash provided by (used in) investing activities－(2,500)(1,077)

(789)

(48)

(7)

(1,563)

(618)

700

－

(495)

(5)

0

2

(2,484)(1,917)

－

680

－

4

Cash flows from financing activities
Contributions into CEJ Fund from third-party investors
Proceeds from stock issuance to non-controllinginterests
Other

(23)

(14)

Net cash provided by (used in) financing activities

(23)

670

2

(3)

(2,558)(2,025)

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 fiscal year7

13,378

10,820Cash and cash equivalents at end of year

7

10,820

8,796

- 7 -

【Notes to consolidated financial statements】
1．Nature of operationsCYBERDYNE, INC. (the "Company") is a company domiciled in Tsukuba, Ibaraki, Japan. Location of the Company's
headquarters as well as its main offices are disclosed on the Company website, (https://www.cyberdyne.jp/english). The
accompanying consolidated financial statements comprise the Company, its group companies (with the Company,
collectively referred to as the "Group"), associates as well as jointly controlled entities and the fiscal year is from April 1
to March 31.
The Group utilizes Cybernics to work on the entire process from basic research of innovative technologies to theirsocial implementation, which could contribute to overcome various problems that modern society faces. At the same time,
the Group will continue its endeavors to create new industries and nurture human resources, in order to induce upward
spiral of innovation and to shape the future. The Group operates under a single segment of business related to robotics andit is detailed in "6. Segment information".

- 8 -2．Basis of presentation
1. Conformance of consolidated financial statements with IFRS and matters regarding the first-time adoption
As the Group meets the requirement of "Specified Company Applying Designated International Reporting Standards"
pursuant to Article 1-2 of the "Ordinance on terminology, forms and preparation methods of consolidated financial
statements" (Ordinance of the Ministry of Finance No. 28 of 1976, referred to as the "Ordinance"), the consolidated
financial statements of the Group have been prepared in accordance with International Financial Reporting Standards("IFRS") as permitted by the provisions of Article 93 of the Ordinance.
The consolidated financial statements under review have been approved by Yoshiyuki Sankai, President and CEO of
the Company as well as Shinji Uga, Director and Head of the Corporate Department of the Company on June 24, 2019.
2. Basis of measurement
As detailed in Note "3. Significant accounting policies", consolidated financial statements of the Group have been
prepared on a historical cost basis, except for specific financial instruments and others measured at fair value.
3. Functional currency and presentation currency
The consolidated financial statements of the Group are presented in Japanese yen, which is the Company's functional
currency, rounded to the nearest million yen.
4. Early adoption of new accounting standards
The Group has applied the following accounting standards from the fiscal year ending March 31, 2019. The effect ofapplying these accounting standards on the Group's condensed consolidated financial statements is not material.
IFRSs
IAS 28IFRS 2IFRIC 22Nature of the new standards or amendments

Investments in Associates andRevised accounting process upon holding any investment throughJoint Ventures

venture capitals towards affiliates or jointly controlled entity

Share-based Payment

Revised classification and measurement of share-based paymenttransactions

Foreign Currency Transactions

Revised exchange rate at which assets, expenses or revenues

and Advance Consideration

denominated in foreign currencies are initially recognized- 9 -3．Significant accounting policies
1. Basis of consolidation(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it has exposure, or rights, tovariable returns from involvement with an investee and has the ability to affect those returns through its power overthe investee.
The financial statements of subsidiaries are included in the consolidated financial statements of the Group fromthe date the Group gains control until the date it loses control of the subsidiary.
Some of the subsidiaries has a close date of December 31. Due to the relationship with other shareholders andagreements of contract, it is impossible to practically unify the closing date for these subsidiaries. As such, thesesubsidiaries are subject to provisional settlements of accounts on March 31, and the Group utilizes these accounts for
its consolidated financial statements.
All intergroup balances, transactions, income and expenses and unrealized gains and losses arising from intergrouptransactions are eliminated in preparing the consolidated financial statements.
Comprehensive income of subsidiaries is attributed to owners of the parent and to the non-controlling interests
even if this results in the non-controlling interests having a deficit balance.
A change in the Group's ownership interest in a subsidiary, without a loss of control, is accounted for as an equity
transaction. Any difference between the amount by which the non-controlling interests are adjusted and the fair valueof the consideration paid or received is recognized directly in equity attributable to the owners of the parent.
In case of a change in the Group's ownership interest in a subsidiary, resulting a loss of control, profit or losses
arising from the loss of control is recognized as net loss.
(ii) Associates
An associate is defined as an entity over which the Group has significant influence on financial and operating policy
decision but does not have control over the entity.
The Group is presumed to have significant influence over another entity when it holds at least 20%, but no morethan 50% of the voting rights of that entity.
Investments in associates are accounted for by equity method from the date the Group gains significant influence
until the date it loses that influence.
Amount equivalent to the Group's share of the affiliates' loss is recognized as a loss until the amount exceeds theinvestment, and losses in excess of the investment are recognized only to the extent that the Group has incurred legal
or constructive options or made payment on behalf of the associate.
Any excess of the cost of acquisition over identifiable assets, liabilities and contingent liabilities of the associates
at the date of acquisition are recognized as goodwill and it shall be included in the carrying value of the investment.
As the relevant goodwill is not recognized separately, it shall not be tested for impairment on individual basis.
However, if there is objective evidence on possibility of impaired investment, the Group shall test its investment toassociates for impairment by recognizing the investment as single asset in net amounts.
(iii) Joint venture
Joint venture is an entity jointly controlled by two or more parties including the Group under the contractually agreed
share of control of an arrangement over economic activity of the joint venture, which exist only when decision forstrategic, financial and operating decisions related to relevant activities require unanimous consent of the parties
sharing control. A joint venture of the Group is accounted for using the equity method.
Some of the joint venture has a close date of December 31. Due to the relationship with other shareholders andagreements of contract, it is impossible to practically unify the closing date for the said joint venture. As such, theGroup makes adjustments to important transaction and event during the period, in order to reflect the impact ofchanges caused by the difference of close dates.

- 10 -

2. Business combinations
Business combinations are accounted for using the acquisition method. The consideration of an acquisition is measured
as the aggregate of the acquisition-date fair value of the assets transferred, liabilities assumed, and equity securities
issued by the Group to the former owners of the acquiree in exchange for control of acquiree. Any excess of theconsideration over the net fair value of identifiable assets acquired and liabilities assumed at the acquisition date isrecognized as goodwill in the consolidated statement of financial position. Conversely, any deficit is immediately
recognized as income in the consolidated statement of income.
Costs associated with business combinations, such as advisory fees, attorney fees and due diligence costs, areexpensed as incurred.
If the initial accounting for a business combination is incomplete by the end of the fiscal year in which the
combination occurs, provisional amounts of incomplete items are measured, which are adjusted during the measurement
period within one year from the date of acquisition. During the measurement period, the Group shall retrospectively
adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts andcircumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts
recognized as of that date. If this new information causes new recognition on assets and liabilities, it will be recognized
as additional assets and liabilities. Measurement period could last no longer than one year from the date of acquisition.
The additional acquisition of non-controlling interests is accounted for as an equity transaction, and therefore no
goodwill is recognized with respect to such transaction.
Identifiable assets and liabilities of the acquiree in business combinations are measured at their acquisition-date fairvalue, with the following exceptions:・Deferred tax assets and liabilities and assets or liabilities related to employee benefit arrangements
・Share-based payment transactions of the acquire・Non-current assets and disposal groups that are classified as held for sale in accordance with IFRS 5 “Non-current
assets held for sale and discontinued operations”
In a business combination achieved in stages, the Group re-measures its previously held equity interest at theiracquisition-date fair value and recognizes resulting gain or loss, if any, in new profit or loss.
3. Foreign currency transaction(i) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each company of the Group at the spot
exchange rate at the date of the transaction, or an exchange rate that approximates the spot rate.
Foreign currency monetary items are translated into the functional currency using the rates at the end of reporting
period.
Non-monetary items that are measured at fair value in foreign currencies are translated into the functional currency
using the exchange rates at the date when the fair value was measured.
Exchange differences arising from such translations and settlements are recognized in profit or loss. However,exchange differences arising from financial assets measured at fair value through other comprehensive income arerecognized in other comprehensive income.
(ii) Financial statements of foreign operations
Assets and liabilities of foreign operations are translated at the rate at the end of each reporting period. Income andexpenses are translated at the average exchange rates for the period, provided that there were no significant
fluctuations in the exchange rates during the period. Exchange differences arising from translation of the financial
statements of foreign operations are recognized in other comprehensive income. On the disposal of a foreign
operation, the cumulative amount of exchange differences relating to that foreign operation is reclassified fromequity to profit or loss when the gain or loss on disposal is recognized.

- 11 -

4. Financial instruments(i) Financial assets(1) Initial recognition and measurement
The Group classifies the financial assets it holds as financial assets measured at fair value through profit or loss,
financial assets measured at fair value through other comprehensive income or financial assets measured atamortized cost. This classification is determined at initial recognition.
The Group recognizes and derecognize all financial assets on trade date where the purchase or sale of afinancial asset under a contract whose terms require delivery of the financial asset within the timeframe
established by the market concerned, and are initially measured at fair value, plus transaction costs except for
those financial assets classified at fair value through profit or loss, which are initially measured at fair value.
Financial assets held by the Group are measured at amortized cost if both of the following conditions are met.
・The financial asset is held in a business model whose objective is to hold financial assets in order to collectcontractual cash flows
・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 amount outstanding.
Equity instruments that are not measured through amortized cost are classified as equity instruments measured
at fair value.
Excluding equity instruments measured at fair value through profit or loss that is held for trading, for eachindividual equity items, the Group designates whether it shall be measured at fair value through profit and loss or,whether it shall be measured at fair value through comprehensive income. This designation is continuously used
after the initial designation.
(2) Subsequent measurement
Measurement of financial assets after initial recognition is performed according to the classification of financial
asset as follows:(a) Financial assets measured at amortized cost
The carrying amounts of financial assets measured at amortized cost are recognized using the effective interest
method.
(b) Financial assets measured at fair value
These financial assets are measured at fair value after initial recognition, and changes in their fair value arerecognized in profit or loss.
However, for financial assets designated as financial assets measured at fair value through comprehensive
profit, the Group recognizes changes in their fair value as other comprehensive income.
Dividends from equity instruments measured at fair value through other comprehensive income arerecognized as financial income in profit or loss.
(3) Derecognition of financial assets
The Group derecognizes financial assets only when the contractual rights to the cash flows from the financial
assets expire, or when the Group transfers financial assets. In cases where the Group continue to possessownership over the transferred asset, it shall be recognized as liability related to the asset within the range ofownership held, so long as this ownership continues to remain in effect.
(4) Impairment of financial assets
With respect to impairment of financial assets measured at amortized cost, the Group recognizes allowance for
doubtful accounts for expected credit losses on such financial assets.
At each reporting date, the Group assesses whether the credit risks on the financial assets have increased
significantly since initial recognition.
If credit risk on a financial instrument has not increased significantly since initial recognition, the allowance for
doubtful accounts for that financial instrument is measured at an amount equal to the 12-month expected credit
losses. If credit risk in a financial instrument has increased significantly since initial recognition, the allowance for
doubtful accounts is measured in an amount equal to the lifetime expected credit losses.

- 12 -

The Group determines if credit risk has increased significantly by evaluating changes in default risk withreference to factors including downgrading of internal credit ratings, the decline of counterparty results anddelinquency information.
Furthermore, if the credit risk is determined to be low as of the closing date, the Group shall assess that credit
risk on a financial instrument has not increased significantly since the initial recognition.
However, the allowance for doubtful accounts on trade receivables and others is always measured in an amountequal to the lifetime expected credit losses.
The expected credit losses of financial assets are estimated in a way that reflects the following:
・An unbiased and probability-weighted amount determined by evaluating a range of possible outcomes
・The time value of money
・Reasonable and supportable information about past events, current conditions and forecasts of economic
conditions that is available without undue cost or effort at the reporting date
The amounts of these measurements are recognized in profit or loss.
If an event that reduces an impairment loss occurs after the impairment loss has been recognized, theimpairment loss will be reversed to the extent of the decrease and credit to profit or loss.
(ii) Financial liabilities(1) Initial recognition and measurement
The Group classifies financial liabilities as either financial liabilities measured at fair value through profit or loss,
or financial liabilities measured at amortized cost. This classification is determined at initial recognition.
All financial liabilities are measured at fair value. However, financial liabilities measured at amortized cost aremeasured in the full amount after deducting directly attributable transaction costs from the fair value.
(2) Subsequent measurement
Measurement of financial liabilities after initial recognition is performed as follows, according to the classificationof the financial liabilities.
Financial liabilities measured at amortized cost are subsequently measured at amortized cost using the effective
interest method.
Amortization using the effective interest method and gains and losses on derecognition are recognized in profit
or loss for the period.
(3) Derecognition of financial liabilities
The Group derecognizes financial liabilities when they are extinguished (i.e., when the obligation specified in thecontract discharged or cancelled or expires).
(iii) Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount is presented in the consolidated statement offinancial position only when the Group currently has a legally enforceable right to set off the recognized amount andintends either to settle on a net basis or realize the assets and settle the liabilities simultaneously.
(iv) Fair value of financial instruments
For financial instruments measured at fair value, their fair values are classified into Level 1 through Level 3 based on
the observability of inputs used for the measurement and their materiality.
Level 1: Quoted prices in active markets for identical assets or liabilities (unadjusted)
Level 2: Fair value determined using observable prices other than Level 1 for the asset or liability directly or
indirectly
Level 3: Fair value determined using the valuation technique including unobservable inputs for the asset or liability- 13 -

5. Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, demand deposits and short-term investments that are highly liquid
and readily convertible to known amounts of cash subject to an insignificant risk of changes in value, and that mature or
become due within three months from the date of acquisition.
Cash and cash equivalents include certificates of deposit and joint-managed money trust.
6. Inventories
Inventories are measured at the lower of cost and net realizable value. Cost of finished goods as well as work in process
are calculated using specific identification method and purchase cost. Merchandise and raw materials are calculatedusing moving average method. These include processing cost and all other costs incurred in bringing the inventories totheir existing location. Net realize value is estimated selling price in the ordinary course of business less the estimatedcosts of completion and the estimated costs necessary to make the sale.
7. Property, plant and equipment
Property, plant and equipment are carried at cost less any accumulated depreciation and impairment losses.
The cost of an item of property, plant and equipment comprises any costs directly attributable to acquisition of theasset and the initial estimate of the costs of dismantling and removing the item and restring the site on which it islocated.
Depreciation of assets other than land and construction in progress is calculated on a straight-line basis over theestimated useful lives of the assets. The estimated useful lives of major asset items are as follows:
Buildings and structures:

3 to 38 years

Operating lease assets

5 years

Tools, furniture and fixtures:

2 to 20 years

The estimated useful lives, residual value and depreciation method are reviewed at each fiscal year end, and any
revisions are applied prospectively as changes in accounting estimates.
8. Intangible assets(i) Intangible assets
Intangible assets acquired separately are measured using acquisition cost at the initial recognition.
After initial recognition, with the exception of intangible assets with indefinite useful life, intangible assets areamortized on a straight-basis over their estimated useful lives and are presented at acquisition cost reduced by theaccumulated depreciation and the accumulated impairment loss.
Expenditures related to internal generated intangible assets are recognized as expenses when incurred, with the
exception of development expenses that meet the criteria for capitalization.
The Group has no intangible assets with indefinite useful lives. The estimated useful lives of major intangible
assets are as follows:
Software5 years

Patents

8 years

The estimated useful lives, residual values and amortization method are reviewed at each fiscal year end, and any
revisions are applied prospectively as changes in accounting estimates.
(ii) Research and development expenses
Research expenditures are expensed as incurred. Development expenditures are capitalized only if they can bemeasured reliably, future economic benefits are probably, and the Group intends to, and has sufficient resources to,complete development and to use or sell assets.

- 14 -

9. Leases
The Group classifies a lease that transfers substantially all the risks and rewards incidental to ownership of an asset as afinance lease and a lease other than a finance lease as an operating lease.
Leases as lessee
Lease payments under operating leases are recognized as an expense on a straight-line basis over the lease term.
Variable lease payments are recognized as expenses for the incurred period.
Leases as lessor
Income from operating leases is recognized on a straight-line basis over the lease term. Furthermore, operating leases by
the Group such as HAL are presented in the Group's consolidated statements of financial positions as operating leaseassets. Please refer to Note "3. Significant accounting policies, 7. Property, plant and equipment" for further details.
With regards to finance lease transaction as manufacturer or distributor, income from financial leases is recognized inaccordance with the accounting policy the Group follows for sales of goods. Please refer to Note "22. Revenue".
10. Impairment of non-financial assets
Non-financial assets excluding inventories are assessed at the end of each reporting period to determine whether there is
any indication of impairment. If there is an indication of impairment, the recoverable amount of the asset is estimated.
A cash-generating unit, which is a unit for conducting impairment testing, is the smallest group of assets thatgenerates cash inflows that are generally independent of cash flows of other assets or groups of assets. The recoverable
amount of an asset or a cash-generating unit is the greater of its value in use or its fair value less cost to sell. Value in
use is the present value of the future cash flow deemed to generate from assets or cash generating unit.
If there is any indication of a reversal of impairment loss recognized in prior year at the end date of each reporting
period, recoverable amount of assets or cash generating unit shall be estimated. In case where recoverable amounts
exceeds the carrying amount of assets or cash generating units, the Group shall reverse the impairment loss at the
maximum of amount calculated by deducting the depreciation and amortization needed from the carrying amount of
unrecognized impairment loss in the prior year.
11. Employee Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are recognized as an expense when
the related services are rendered. For bonuses, when there is a present legal or constructive obligation to make paymentsof bonuses, and a reliable estimate of the obligation can be made, the estimated amount to be paid is accounted for as aliability.
Paid leave expenses are recognized as expenses when labor that grants an employee with additional rights to paid leave
are incurred.
12. Share-based payment(i) Stock options
The Company has a stock option scheme accounted for as an equity-settled share-based payment scheme. Equity-settled
share-based payment scheme is estimated at fair value of the date of allotment, taking estimated number of subscription
rights to share that is likely to be vested into the account. It is recognized as an expense in the consolidated statement of
profit or loss from the date of allotment through the vesting period and the same amount as an increase in asset in the
consolidated statement of profit and loss. Fair value of the allotted option is calculated mainly by Black-Scholes Model,
taking the conditions of the option into the account. Furthermore, the conditions of stock options are reviewed on
regular basis and estimate of subscription rights to share are adjusted where necessary.
(ii) Restriction share payment
The Group has adopted a restricted share payment scheme as an equity-settled share-based payment scheme for its
employees, etc.
Consideration received for services rendered is measured at fair value of the grant date recognized as an expense bystraight-line method over a certain period from the grant date, and the equal amount is recognized as an increase incapital.

- 15 -

13. Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of a past event, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a
reliable estimate can be made of the amount of obligation. Where time value of money is material, a provision ismeasured by its present value to which estimated future cash flows are discounted using a pre-tax discount rate thatreflects the risks specific to the provision. Interest cost associated with the passage of time is recognized as financecosts.
14. Revenue
The Group recognizes revenue based on the following five-step model, excluding revenue from dividend and interest
income based on IFRS 9 "Financial Instruments".
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the entity satisfies a performance obligation
Details on recognition of revenue are stated in Note "22. Revenue".
15. Government grants
Government grants are measured and recognized at fair value, when there is reasonable assurance that the Group willcomply with the conditions attaching to them and that the grants will be received. Group fulfills the incidental condition
for grants and receives reasonable assurance that the grants are scheduled for delivery.
For government grants related to expenses items, related costs that will be compensated by grants are recognized over
the recognized term as revenue on regular basis. Grants related to assets is calculated by deducting the amount ofrelevant grants from the acquisition cost of assets.

- 16 -

16. Income taxes
Income taxes consist of current income taxes and deferred income taxes. Income taxes are recognized as income or
expenses and included in profit or loss, except for taxes related to business combinations and taxes related to items thatare recognized directly in equity or in other comprehensive income.
Current income taxes are recognized in the amount of the expected taxes payable to or receivable from the taxation
authorities. Calculation of the amount of tax is based on the tax rates and tax laws enacted or substantively enacted by
the end of the reporting period in countries.
Deferred tax assets and liabilities are recognized for temporary differences between the carrying amounts of assets or
liabilities at the end of the reporting period and its tax base, and for tax loss carryforwards and tax credits.
Deferred tax assets and liabilities are recognized for the following temporary differences:
・Taxable temporary differences arising from initial recognition of goodwill
・Temporary differences arising from initial recognition of assets and liabilities from transactions that are notbusiness combinations and affect neither accounting income nor taxable income
・Taxable temporary differences associated with investments in subsidiaries and associates where the timing of thereversal of the temporary differences will not reverse in the foreseeable future or where it is no longer probablethat sufficient tax profit subject to taxable temporary difference will be available.
・Taxable temporary differences associated with investments in subsidiaries and associates where the timing of thereversal of the temporary differences can be controlled and it is probable that the temporary differences will notreverse in the foreseeable future.
The carrying amount of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be
recovered. Unrecognized deferred tax assets are reassessed at each reporting period and are recognized to the extent thatit has become probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rate that are expected to apply to the period when the assets
are realized or the liabilities are settled, based on the tax rates and tax laws enacted or substantively enacted by the endof 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 they relate to income taxes levied by the same tax authority, or on different
taxable entities that intend either to settle current tax assets and liabilities on a net basis, or to realize the assets and settle
the liabilities simultaneously.
17. Earnings per share
Basic earnings per share are calculated by dividing profit (loss) attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during the period, adjusted for treasury shares held. Diluted earnings per
share are calculated by adjusting the effects of all dilutive potential ordinary shares.
18. Equity and other capital(i) Common shares
Common shares issued by the Company are recognized in share capital and capital surplus at their issue price. Shareissuance costs are deducted from the issue price.
(ii) Treasury shares
When a treasury share is acquired, consideration received including direct transaction cost is recognized as deducted
items from equity. When a treasury share is sold or re-issued, consideration received is recognized as increase incapital. Surplus and deficit generated by this transaction are presented as capital surplus.

- 17 -

19. Significant accounting policy related to Cybernic Excellence Japan Fund 1 Investment Limited Partnership(i) Consolidation of Cybernic Excellence Japan Fund 1 Investment Limited Partnership by the Company
The Company has consolidated Cybernic Excellence Japan Fund 1 Investment Limited Partnership(“CEJ Fund”) due to the following reasons.
The Company practically makes decisions on investment of CEJ Fund through the Company's consolidated
subsidiary CEJ Capital, Inc., which is an unlimited liability partner or General Partner "GP" of CEJ Fund, andthus the Company has the control over CEJ Fund.
As an GP, CEJ Capital, Inc. receives a completion bonus as a GP while the Company receives the potion ofretuns on investment attributable to a Limited Partner ("LP")of CEJ Fund. Since the Company has an influenceon those returns through its power over CEJ Fund, the Company has the control based on IFRS 10"Consolidated Financial Statements".
Considerations for fund managemenet and completion bonuses, etc. paid to CEJ Capital, Inc. as a GP fromCEJ Fund are eliminated on the consolidated basis as intercompany transactions.
(ii) Investment by CEJ FundFor equity financial assets measured at fair value, with the exception of equity financial assets held for trading
purposes that must be measured at fair value through profit or loss, the Group classifies each individual equity
financial assets either into those measured at fair value through profit or into those measured at fair value
through other comprehensive income, and continuously applies the same measurement.
(iii) Contribution from Limited Partners (“LP”) to CEJ FundCEJ Fund issues capital calls to its LP ("Capital Call")a) Contribution from LPs other than the Company
CEJ Fund's investment limited partnership agreement specifies that CEJ Fund has a predetermined finite
life (up to 12 years from the effective date) and that the contributions to the fund from LPs other than the
Company (hereinafter, "Third-Party Investors") shall be rewarded by distributions or refunded.
Accordingly, they are recorded as "Third-party interests in CEJ Fund" under liabilities in the consolidated
statemenet of financial position and classified to "financial liabilities measured at amortized cost." theCarrying amount of the financial liabilities represents the amount that would be attributed to the ThirdParty Investors in accordance with the limited partnership agreement on the assumption that the fund was
liquidated at the end of each quarter.
The “Third-party interests in CEJ Fund” fluctuate due to the performance results of CEJ Fund in
addition to contributions from Third-Party Investors in response to its capital calls and distributions andrepayments to the Third-Party Investors. The fluctuations due to the performance results of CEJ Fund areincluded in “Gains (or losses) related to CEJ Fund” on the consolidated statement of income. “Gains (orlosses”) related to CEJ Fund” also include the costs of establishing and managing CEJ Fund.
Contribution from Third-Party Investors are presented as "Contribution to CEJ Fund from Third-Party
Investors" under cash flows from financing activities on the consolidated statement of cash flows.
Distributions and refunds to the Third-Party Investors are presented as "Amount distributed and refunded
to Third-Party Investors" under cash flows from financing activities.
b) Contribution from the Company
Contributions from the Company to CEJ Fund as a LP is eliminated on consolidation basis.

- 18 -

4．Significant accounting estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRS requires management to makeestimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income,expenses and related disclosures. Due to uncertain nature of estimates, in some cases actual results may vary from initial
estimates.
The estimates and their underlying assumptions are reviewed by management on an ongoing basis. The effects ofrevisions to accounting estimates and assumptions are recognized in the period when the estimates are revised and in
future periods.
Estimates and assumptions that significantly affect the amounts recognized in the Group's consolidated financial
statements are as follows:・Matters concerning financial instruments (Notes "3. Significant accounting policies, 4. Financial instruments", Notes"3. Significant accounting policies, 19. Significant accounting policy related to Cybernic Excellence Japan Fund 1
Investment Limited Partnership," Notes "9. Other financial assets", "30. Financial instruments" as well as "31. CEJ
Fund”)
・Impairment of non-financial assets (Note "3. Significant accounting policies, 10. Impairment of non-financial assets")
・Useful lives of property, plant and equipment, estimation of residual value (Note "3. Significant accounting policies, 7.
Property, plant and equipment" as well as Note "12. Property, plant and equipment")
・Collectability of deferred tax assets (Note "15. Income taxes")
・Recognition of revenue (Note "3. Significant accounting policies, 14. Revenue", Note "22. Revenue")・Measurement of share-based payments (Note "29. Share-based payment")
・Equity interests in CEJ
・Estimated measurement of equity attributable to the Third-Party Investors in CEJ Funds（Note "3. Significant
accounting policies, 19. Significant accounting policy related to Cybernic Excellence Japan Fund 1 Investment Limited
Partnership)- 19 -

5．New standards and interpretations not yet adopted
Certain new accounting standards and interpretations or amendments have been published by the date of authorization
for issuance of the consolidated financial statements that are not mandatory for the reporting period and have not been
early adopted by the Group.

IFRSs
IFRS 16

LeasesMandatory
adoption on or
afterJanuary 1, 2019

Date ofadoption by
the Group
Fiscal year

Revised lease definition, accounting

ending Marchtreatment and disclosure

Nature of the new standards oramendments

31,2020

With regard to lease contracts that were previously classified as operating leases by the lessee and recorded as expenses atthe point of lease payment under the previous accounting policy of IAS 17 (Lease), following the adoption of IFRS 16,
right-to-use assets and leased obligations corresponding the lease terms are recorded in the consolidated statement offinancial position at the beginning of lease contracts and expenses relating to them are recognized over the lease term.
Upon adopting this IFRS, the Group has two options; to apply it retrospectively to each prior reporting period presented
or to recognize the cumulative effect of adoption at the date of initial application. The Group plans to choose to recognize
the cumulative effect of adoption at the date of initial application. Furthermore, following the adoption of this IFRS, theGroup anticipates as uts nahir effect an increase of ¥363 million in total assets and ¥363 million in total liabilities on the
consolidated statement of financial position for fiscal year ending March 31, 2020. The effect of adopting this standard is
not material.

- 20 -

6．Segment information
1. Summary of reportable segments
The Group's reportable segments are the components of the Group for which discrete financial information is available
and which are regularly reviewed by the Board of Directors in deciding how to allocate resources and in assessing theirperformance.
Since the Group operates under a single segment of business related to robotics, segment information is omitted.
2. Revenue and results of reportable segments
Since the Group operates under a single segment, segment information is omitted.
3. Information about Products and Services
Since revenue of a single classification of products and services to outside clients exceed 90% of revenue in thestatement of profit or loss, segment information by product and service is omitted.
Note "22. Revenue" presents the details of revenue.
4. Geographical information
Revenue to customers and non-current assets by region consist of the following:
Revenue to customers
2018

2019

Millions of yen
JapanMillions of yen
1,564

1,450

US

－

43

EMEA

164

146

APAC

－

70

Total

1,728

1,709

(Note) Revenue is classified by country or region based on the location of customers.
Non-current assets
Since the amount of non-current assets located in Japan exceeds 90% of the amount of non-current assets in the
consolidated financial position, non-current assets information by geographical area is omitted.
5. Information about major customers
Information about major customers has been omitted as the revenue from each customer is less than 10% of the Group's
revenue.

- 21 -

7．Cash and cash equivalents
Cash and cash equivalents consist of the following:
2018

2019

Millions of yen

Millions of yen

Cash and cash equivalents
Cash and deposits

6,820

5,296

Short-term investments

4,000

3,500

10,820

8,796

Total

The balance of cash and cash equivalents presented in the consolidated statement of financial position is equal to thebalance of cash equivalents presented in the consolidated statement of cash flows.

- 22 -

8．Trade and other receivables
Trade and other receivables consist of the following:
2018

2019

Millions of yen

Millions of yen

Accounts receivable-trade

363

242

Accounts receivable-other24

17

Allowance for doubtful accounts

(2)

(1)

385

257

Total

Trade and other receivables are classified into the financial assets measured at amortized cost.

- 23 -

9．Other financial assets
1. Other financial assets
Other financial assets consist of the following:
2018

2019

Millions of yen

Millions of yen

Other financial assets
Financial assets measured at amortized cost：
Bonds

20,00018,000Time deposits

－

2,500

Leasehold and guarantee deposits

62

61

Other

4

5

Equity securities

－

1,611

Convertible bonds

298

337

7

6

Financial assets measured at fair value through profit or loss：

Other
Financial assets measured at fair value through other comprehensive
income：

2,039

416

22,41022,936

Current assets

20,00420,505

Non-current assets

2,406

2,431

22,41022,936Equity securities
Total

Total
2. Financial assets measured at fair value through other comprehensive income

Names and fair values of major financial assets measured at fair value through other comprehensive income are as
follows:

Shares2018

2019

Millions of yen

Millions of yen

Non-marketable equity securities
Works Applications Co., Ltd.

783－

WHILL, Inc.

212

352

1,044

64

2,039

416

Other
Total

Equity securities are held mainly for strengthening relationships with investees. As such, the shares are designated to befinancial assets measured at fair value through other comprehensive income.
There is no dividend income recognized as financial assets measured at fair value through other comprehensive
income for the fiscal years ended March 31, 2018 and 2019.

- 24 -

10．Inventories
Inventories consist of the following:
2018

2019

Millions of yen

Millions of yen

Merchandise and finished goods

86

Work in process

1225

Raw materials

467

725

565

901

Total

150

The amount of inventories recognized as expenses and included in the cost of sales for the fiscal years ended March 31,2018 and 2019 were ¥307 million and ¥266 million, respectively.
Write-down of inventories recognized as expenses and included in the cost of sales for the fiscal years ended March
31, 2018 and 2019 were ¥20 million and ¥39 million, respectively.

- 25 -

11．Other assets
Other assets consist of the following:
2018

2019

Millions of yen

Millions of yen

Other current assets
Prepaid expenses

32

113

Consumption taxes receivable

0

36

－

20

32

169

81

74

81

74

Other
Total
Other non-current assets
Long-term prepaid expenses
Total- 26 -

12．Property, plant and equipment
Change in property, plant and equipment
The following tables present changes in acquisition costs, accumulated depreciation and impairment losses, andcarrying amounts of property, plant and equipment.
(Millions of yen)
Property, plant and equipment

March 31, 2017

798

3,119

1,803

Tools,
furnitureandfixtures883

Additions

26

－

13

254

5

779

1,051

1,077

Sales and

－

－

－

(94)

(2)

－

(95)

(95)

－

－

(1)

(4)

(0)

－

(5)

(5)

－

(1)

－

(1)

－

－

(2)

(2)

March 31, 2018

824

3,118

1,814

1,038

265

6,783

13,018

13,842

Additions

221

400

11

150

6

－

567

789

Sales and

－

－

－

(47)

(5)

－

(51)

(51)

Reclassification

－

6,288

－

－

－

(6,288)－－Exchange

－

－

1

(5)

0

－

(4)

(4)

－

(3)

(4)

－

－

－

(7)

(7)

1,046

9,803

1,822

1,136

266

495

13,522

14,568Acquisition costs

Operating leaseassetsLand

Buildings
andstructures

Construction
inprogress

Subtotal

261

6,004

12,06812,867

Other

Total

disposals
Exchangedifferences ontranslation offoreign
operations
Other

disposalsdifferences ontranslation offoreign
operations
Other
March 31, 2019- 27 -

(Millions of yen)
Property, plant and equipment
Operatinglease assets

Land

Buildings
andstructures

March 31, 2017

(318)

－

(662)

Tools,
furnitureandfixtures(585)

Depreciation

(105)

－

(91)

Sales and－－－Accumulated
depreciation andimpairment losses

Other

Construction
inprogress

Subtotal

Total

(219)

－

(1,465)(1,783)

(164)

(14)

－

(269)

(374)

－

55

0

－

55

55

－

0

0

0

－

0

0

－

－

0

－

0

－

0

0

March 31, 2018

(423)

－

(753)

(693)

(233)

－

(1,679)(2,102)

Depreciation

(159)

－

(88)

(149)

(14)

－

(250)

(410)

Sales and

－

－

－

32

1

－

33

33

－

－

(0)

(0)

(0)

－

(0)

(0)

－

－

(2)

－

－

－

(2)

(2)

(583)

－

(842)

(810)

(245)

－

(1,897)(2,480)disposals
Exchangedifferences ontranslation offoreign
operations
Other

disposals
Exchangedifferences ontranslation offoreign
operations
Other
March 31, 2019

（Note）Depreciation of property, plant and equipment is included in cost of sales, research and development expenses
and other selling, general and administrative expenses in the consolidated statement of income.
(Millions of yen)

Property, plant and equipment

April 1, 2017

480

3,119

1,140

Tools,
furnitureandfixtures
298

42

6,004

10,603

11,083

March 31, 2018

401

3,118

1,061

345

32

6,783

11,33911,740March 31, 2019

463

9,803

979

327

21

495

11,62412,087

Carrying amounts

Operatinglease assets

Land

Buildings
andstructures- 28 -

Other

Construction
inprogress

Subtotal

Total

13．Intangible assets
The following tables present changes in acquisition costs, accumulated amortization and impairment losses, andcarrying amounts of intangible assets.
(Millions of yen)
Intangible assets
Acquisition costs

SoftwarePatents

Other

Total

March 31, 2017

84

20

7

111

Additions

45

－

4

48

Sales and disposals

(2)

－

－

(2)

Exchange differences on translation of foreign operations

0

－

0

0

March 31, 2018

127

20

12

158

Additions

10

－

1

11

Sales and disposals

(1)

－

－

(1)

Exchange differences on translation of foreign operations

(0)

－

(0)

(0)

Other

－

－

(4)

(4)

March 31, 2019

136

20

9

165
(Millions of yen)

Intangible assets
Accumulated amortization and impairment losses

SoftwarePatents

Other

Total

March 31, 2017

(36)

(8)

(1)

(45)

Amortization

(22)

(2)

(1)

(25)

Sales and disposals

2

－

－

2

Exchange differences on translation of foreign operations

(0)

－

(0)

(0)

March 31, 2018

(56)

(11)

(2)

(69)

Amortization

(24)

(2)

(0)

(26)

Sales and disposals

－

－

－

－

Exchange differences on translation of foreign operations

0

－

0

0

(79)

(13)

(2)

(95)

March 31, 2019

(Note) Amortization of intangible assets is included in cost of sales, research and development expenses and otherselling, general and administrative expenses in the consolidated statement of income.
(Millions of yen)
Intangible assets
Carrying amounts

SoftwarePatents

Other

Total

April 1, 2017

48

11

6

66

March 31, 2018

71

9

10

90

March 31, 2019

57

6

7

70

- 29 -

14．Investments accounted for using equity method
Investments in associates are accounted for using equity method in the Group's consolidated financial statements. There
are no associates or joint venture that are individually material for the Group.
1. Investments in associates
The carrying amount of investments in associates that are not individually material is as follows:
2018

2019

Millions of yen
Investments accounted for using equity method

Millions of yen
190

180

Changes in the Group's share of profit and other comprehensive income of associates that are not individuallymaterial are as follows:
2018

2019

Millions of yen
The Group's share of profit

Millions of yen
(11)

(15)

The Group's share of other comprehensive income－－

The Group's share of comprehensive income

(11)

(15)

2. Investments in joint venture
The carrying amount of investments in joint venture that are not individually material is as follows:
2018

2019

Millions of yen

Millions of yen

Investments accounted for using equity method

284

275

Changes in the Group's share of profit and other comprehensive income of joint venture that are not individuallymaterial are as follows:
2018

2019

Millions of yen

Millions of yen

The Group's share of profit

(10)

(9)

The Group's share of other comprehensive income－－

The Group's share of comprehensive income

(10)

(9)

- 30 -

15．Income taxes
1. Deferred tax assets and liabilities
Derails of major causes of occurrence and changes in deferred tax assets and liabilities consist of the following:
Fiscal year ended March 31, 2018
(Millions of yen)
April 1, 2017

Recognizedin profit or
loss

－

－

Recognizedin othercomprehensi
ve income
－

210

0

Property, plant and equipment

64

Other

1
275

Deferred tax assets

Other

March
31,2018

－

－

(2)

(127)

81

(0)

－

－

64

(0)

－

－

1

(0)

(2)

(127)

145

Deferred tax liabilities
Financial assets measured at fair value throughother comprehensive income

Total(Note) Due to sale of part of financial assets measured at fair value through other comprehensive income, temporary
differences were resolved and transferred to retained earnings.
Fiscal year ended March 31, 2019
(Millions of yen)
April 1, 2018

Recognizedin profit or
loss

－

－

Recognizedin othercomprehensi
ve income
－

81

68

Property, plant and equipment

64

Other

1
145

Deferred tax assets

Other

March
31,2019

－

－

45

－

193

(3)

－

－

61

(0)

－

－

1

64

45

－

254

Deferred tax liabilities
Financial assets measured at fair value throughother comprehensive income

Total

Deductible temporary differences and unused tax losses for which no deferred tax asset is recognized are as follows:
2018

2019

Millions of yen
Unused tax losses
Deductible temporary differences
Total

Millions of yen

5,580

5,300

1,234

2,323

6,814

7,623

(Note)The amount of unused tax losses and deductible temporary differences is described as income basis amount.
Unused tax losses for which no deferred tax asset is recognized will expire as follows:
2018

2019

Millions of yen

Millions of yen

Expires within 1 year

764

600

Expires between 1 and 2 years

600

516

Expires between 2 and 3 years

516

455

Expires between 3 and 4 years

455

559

3,246

3,171

5,580

5,300

Expire after 4 years
Total- 31 -

The aggregate amounts of taxable temporary differences associated with investments in subsidiaries and associates forwhich deferred tax liabilities were not recognized at March 31, 2018 and March 2019 were not material, respectively.
The Group did not recognize deferred tax liabilities for these temporary differences because it was able to control thetiming of the reversal of these temporary differences, and it was probable that the temporary difference will not reversein the foreseeable future.
2. Income tax expense
Income tax expense consists of the following:
2018

2019

Millions of yen

Millions of yen

Current taxes

6

8

Deferred taxes

(0)

66

6

74

Total
3. Reconciliation of effective tax rate

The details of difference between the effective statutory tax rate and the Group's average tax rate consist of thefollowing:
2018

2019

%

%

Effective statutory tax rate

30.69

30.46

Non-deductible expenses(0.15)(0.67)

Differences in overseas tax rates

0.63

0.35

Unrecognized differed tax asset(35.66)(70.36)

3.14

4.16

－

23.95

Share of profit (loss) of investments accounted for using
equity method
Gains (losses) related to CEJ Fund
Other

0.46

(0.85)

Average actual tax rate

(0.89)(12.96)

Income tax, inhabitant tax and business tax are the main components of income tax expense imposed on the Group,and the effective statutory tax rate based on those taxes was 30.69% for the year ended March 31, 2018 and 30.46% for
the year ended March 31, 2019.

- 32 -

16．Leases
1. Operating leases (as lessee)
As a lessee the Group possesses operating lease contract of assets including land and buildings. The Group has nocovenants such as restrictions on renewable option, purchase option, escalation clauses and lease contracts.
Amount of lease payment that is included in "cost of sales", "research and development expenses" as well as "otherselling, general and administrative expenses" of consolidated statement of profit and loss at March 31, 2018 and March
31, 2019 were ¥66 million and ¥61million, respectively. Furthermore, this amount of lease payment includes variable
lease payment that links with revenue etc. and at March 31, 2018 and March 31, 2019, amount of variable lease
payments included was ¥6 million and ¥5 million, respectively.
2. Operating leases (as lessor)
As a lessor, the Group leases products such as HAL. The Group has no covenants such as restrictions on renewable
option, purchase option, escalation clauses and lease contracts.
The total of future minimum lease payment under non-cancellable operating lease contracts consists of the following:
2018

2019

Millions of yen
Not later than 1 year

Millions of yen
520

More than 1 year, 5 years or less
total

780

146

493

666

1,273

3. Finance lease (as lessor)
In cases where the Group acts as a lessor of right-of-use for devices such as HAL, if the lease transfers substantially all
the risks and reward of ownership to the lessee, the Group classifies such lease as financial lease.
As the Group manufactures devices such as HAL, the Group recognizes the revenue from the asset as asset
transferred at a point of time in the same way the Group recognizes regular purchase transactions. Due to theaforementioned reason, there is no gross investment in a lease as well as minimum lease payment based on financelease contract does not occur and related statement is omitted.

- 33 -

17．Trade and other payables
Trade and other payables consist of the following:
2018

2019

Millions of yen

Millions of yen

Accounts payable-trade53

41

Accounts payable-other

204

240

Other

17

4

274

284

Current liabilities

274

284

Non-current liabilities

－

－

274

284

Total

Total

Trade and other payables are classified into the financial liabilities measured at amortized cost.

- 34 -

18．Provisions
Changes in provisions consist of following:
Asset retirement
obligations
Millions of yen
As of April 1, 201791

Interest expense on discount provision－

Decrease (other)(0)

As of March 31, 2018

91

Interest expense on discount provision－

Decrease (other)(0)

As of March 31, 201991

Asset retirement obligations are provided based on or pursuant to reasonably estimated future expenditures using
historical experience and other factors when the Group has a legal or contractual obligation associated with theretirement of buildings and land etc.
Provisions consist of the following:
2018

2019

Millions of yen
Current liabilities
Non-current liabilities
Total- 35 -

Millions of yen
－

－

91

91

91

91

19．Other liabilities
Other liabilities consist of the following:
2018

2019

Millions of yen

Millions of yen

Other current liabilities
Advances received

85

95

Accrued bonuses

21

4

Obligation for unused paid leave

21

23

Accrued expenses

23

18

Accrued consumption taxes

424

Deposits received

15

14

Other tax liabilities

169

189

Other

11

22

386

370

29

－

29

－

Total
Other non-current liabilities
Long-term accounts payable-otherTotal- 36 -

20．Share capital and other equity items
1. Total numbers of authorized shares and issued shares
Total numbers of authorized shares and issued shares are as follows.
2018

2019

(Shares)(Shares)Number of authorized shares :(Note 1)
Common Shares

618,300,000

618,300,000

Class B Shares

77,700,000

77,700,000

Total

696,000,000

696,000,000

137,347,609

137,347,609－

98,200137,347,609

137,445,809

77,700,000

77,700,000－－

77,700,000

77,700,000

Numbers of issued shares:
Common Shares:
Beginning balance
Change during the year (Note 2)
Ending balance
Class B Shares:
Beginning balance
Change during the year
Ending balance(Note 1) Information concerning authorized shares is as follows:(i) Information concerning the scheme of Common Shares and Class B shares is set out below as defined by theCompany's Articles of Incorporation.
(1) Dividends of surplus and distribution of residual assets
Common Shareholders and Class B Shareholders will receive the same amount of distribution of surplus per sharein the same rank.
(2) Voting rights
Common Shareholders and Class B Shareholders are both eligible to exercise their voting rights for all items
resolved at the Meeting of Shareholders.
(3) Restriction on the transfer of Class B Shares
Approval of the Board of Directors is required upon transfer of Class B Share. However, if Class B Shares aretransferred to Class B Shareholders, it will be deemed that the Board of Directors approved the transfer according
to Article 136 or Article 137, Paragraph 1 of the Companies Act.
(4) Cases where resolution of the Meeting of Class Shareholders are not required
Upon conducting acts stated in the items of Article 322, Paragraph 1 of the Companies Act, unless statedotherwise by related law or the Company's Articles of Incorporation, resolution of General Meeting of Class
Shareholders for Common Shares shall not be required.
(5) Conversion of Common Shares at the option of the shareholders.
Holders of Class B Shares may request that the Company acquire Class B Shares held by such shareholders, inwhole or in part, at any time. In exchange for the acquisition of one Class B Share, one Common Share shall bedelivered to such shareholders.
(6) Compulsory conversion
a. Upon occurrence of any event described below, all outstanding Class B Shares shall be acquired, either at thedate stated below or any date before if designated by the Board of Director. In these cases, in exchange for theacquisition of one Class B Share, one Common Share shall be delivered to such shareholders.
(a-1) A resolution at the General meeting of Shareholders (or the Board of Directors of the Company if aresolution at the General Meeting of Shareholders is not required) for (a) a merger of the Company into
any other corporation, (b) share exchange by which the Company becomes a wholly-owned subsidiary of
another corporation or (c) share transfer that is effected jointly with any other corporation is passed, andthe day before the effective date of such merger, share exchange or share transfer has occurred.

- 37 -

(a-2) As a consequence of a tender offer, the offeror holds three-quarters or more of the total number of theCompany's outstanding shares and 90 days have passed after the tender offer report regarding such tender
offer was filed.
"Hold", "offeror" and "tender offer report" means hold, offeror and tender offer report defined in
Chapter II-2, Section 1 of the Financial Instruments and Exchange Act. In addition, "tender offer" means
tender offer defined in Article 27-3 Paragraph 1 of the Financial Instruments and Exchange Act.
(a-3) Consent (a "Shareholders' Consent") is obtained for the acquisition by the Company of all of theCompany's outstanding Class B Shares in exchange for the same number of Common Shares in aconfirmation process (the "Shareholders' Confirmation Process") and 90 days have passed since then.
Under the Company's Article of Incorporation, the Shareholders' Confirmation Process must be
implemented (a) before the conclusion of the General Ordinary Meetings of the Shareholders for the last
fiscal year which ends within one year from the time of retirement of Yoshiyuki Sankai, the President andCEO of the Company, from a member of the Board of Directors and (b) before the conclusion of theGeneral Ordinary Meeting of the Shareholders for the last fiscal year which ends within five years fromthe time of the last Shareholders' Confirmation Process. Under the Company's Article of Incorporation, thequorum for a Shareholders' Consent is one-third of the total number of voting rights of the shareholders
who are entitled to exercise their voting rights (100 shares constitute one unit of both Common Shares andClass B Shares for the calculation. Same calculation shall be applied for the entire item a-3) and theconsent of at least two-thirds of the voting rights represented in the Shareholders' Confirmation Process isrequired for a Shareholders' Consent.
b. Pursuant to the Company's Articles of Incorporation, Class B Shares set forth below shall be acquired from theholders of such Class B Shares in exchange for one Common Share per Class B Share if:(b-1) the Company is requested to approve the acquisition of Class B Shares by any person other than theholders of Class B Shares, Class B Shares with respect to which approval for the acquisition was requested
based on Article 136 or Article 137 of the Companies Act; and(b-2) a holder of the Class B Shares died, and 90 days have passed without succession or transfer to any otherholder of the Class B Shares, all Class B Shares held by such departed shareholder.
(7) Share split and share consolidation etc.
a. When the Company splits or consolidate its Common Shares or Class B Share, the Company shall split orconsolidate its other share type at the same ratio, simultaneously.
b. When the Company allocates subscribed shares to Common Shareholders or Class B Shareholders, theCompany shall allocate shares to the shareholders of another share type at the same ratio, simultaneously.
c. When the Company allocates stock acquisition rights to Common Shareholders or Class B Shareholders, theCompany shall allocate stock acquisition rights to shareholders of another share type at the same ratio,
simultaneously.
d. When the Company distributes shares for free to Common Shareholders or Class B Shareholders, the Company
shall distribute shares for free to shareholders of another share type at the same ratio, simultaneously.
e. When the Company distributes stock acquisition rights for free to Common Shareholders or Class B
Shareholders, the Company shall distribute stock acquisition rights for free to shareholders of another share typeat the same ratio, simultaneously.
f. When the Company transfers its shares (excluding cases where the share transfer is conducted together withother companies), the Company shall substitute the shares held by shareholders with the shares of the newcompany set up after the transfer, granting shareholders same numbers of shares and same class of shares at thesame ratio.
g. When the Company plans to change its calculation of share units stated in the Articles of Incorporation, it shallbe executed at the same timing and same ratio.

- 38 -

(ii) Class B Shares differ from Common Shares in traded units. Common Shares are traded in units of 100 shares, andClass B Shares are traded in units of 10 shares. This scheme that grants 10 times as many voting rights to Class B
Share was adopted to has been adopted to concentrate the voting rights to Yoshiyuki Sankai and the foundations ofwhich Yoshiyuki Sankai serves as Representative Director (hereinafter referred to collectively as "the Foundation"),so that the Group's innovative technologies can be used solely for peaceful purpose and avoid being used for nonpeaceful purposes such as lethal weaponry in the military industry (the scheme involving the Company's Class B
Shares is hereafter referred to as "Scheme").
Furthermore, the Group has a vision for the future to create a human-assistive industry- a new industrial field thatwill support people by solving issues directly faced by aging and declining birthrate. To realize this vision, the Group
must coordinate business management with R&D of Cybernic Technology. Yoshiyuki Sankai created the Group's
Cybernic Technologies and continues to be a central figure in Cybernic research. He is also a business leader who
seeks to make this innovative technology widely available for the benefit of the society. For the Group to increase
corporate value (i.e., common interest of shareholders), Yoshiyuki Sankai must be a stable leadership figure in the
management of the Company in the future. This scheme has been adopted to ensure he remains so.
(iii) In order to preserve continuity of this Scheme, Yoshiyuki Sankai plans on transferring part of the Class B Shares heholds as of this submission date to the Foundation at no cost. Furthermore, there are no plans for the Foundations torelease the Class B Shares in their possession.
As a shareholder of Class B Shares, the Foundations established guidelines on the exercise of their voting rights,
to prevent the Group's technologies from being used to harm people or to create military weapons, damaging theGroup's corporate value.
The Foundations will exercise its voting rights related to the Class B Shares they hold against resolutions in the
General Meetings of Shareholders and General Meeting of Class Shareholders in the cases stated below.
Furthermore, a resolution of the board meeting of the Foundations will be required to alter these guidelines, and thechange will be announced by a method determined by the Foundations:(1) if in resolutions for the dismissal or appointment of Directors will lead to the misuse of the Group's innovativetechnology or damage the Group's corporate value(2) for all other resolutions, if the passing of the resolution leads to the prevention of peaceful utilization of theGroup's innovative technologies or damage to the Group's corporate value(Note 2) The following is the main reason of an increase in issued Common Shares in the consolidated fiscal year ended
March 31, 2019.
Increase due to issuance of new shares for restricted share payment for the Company's employees
98,200 shares
2. Treasury shares
The changes in treasury shares are as follows
Number of shares

AmountSharesMillions of yen

As of April 1, 2017
Change during the year
As of March 31, 2018
Change during the year
As of March 31, 2019

138

0

－

－

138

0

－

－

138

0

3. Capital surplus
The Companies Act stipulates that over half of the capital contributed from the issue of shares must be included inshare capital and that the remainder must be included in the legal capital surplus. Moreover, legal capital surplus may
be included in share capital by resolution of the General Meeting of Shareholders.
4. Retained earnings
The Companies Act stipulates that an amount equal to one-tenth of dividends must be appropriated as legal capitalsurplus or as legal retained earnings until the total of the aggregate amount of legal capital surplus and legal retained
earnings equals a quarter of share capital. Legal retained earnings may be appropriated to reduce a deficit, and also
may be reversed by resolution of the General Meeting of Shareholders.
- 39 -

21．Dividends
Dividends paid are as follows:
Fiscal year ended March 31, 2018
There are no items to report.
Fiscal year ended March 31, 2019
There are no items to report.

Dividends with an effective date after the fiscal year ended are as follows:
Fiscal year ended March 31, 2018
There are no items to report.

Fiscal year ended March 31, 2019
There are no items to report.

- 40 -

22．Revenue
1. Disaggregation of revenue
Details of disaggregation of revenue are set forth below.
2018

2019

Millions of yen

Millions of yen

Timing of revenue recognition
Service transferred over time

1,061

1,167

354

214

Asset transferred at a point of time

312

328

1,728

1,709

Service transferred at a point of time
Total

(Note) Since the Group operates under a single segment of business related to robotics, segment information on revenue
is omitted.
Service transferred over time
Service transferred over time includes rental income based on the individual rental contract and maintenance income
based on the maintenance contract in relation to finance lease income where the Group acts as a lessor of right-of-use
asset.
The Group recognizes rental income as income generated throughout the rental period after the customer acceptanceof the relevant product, by either of the following method. Pay-per-use model based on times of product usage in therelevant month and base fee model based on fixed monthly price.
The Group recognizes maintenance income as performance obligation satisfied over time. The Company records thisrevenue during this contract period based on average amount during the period.
Asset transferred at a point of time
Asset transferred at a point of time includes revenue from sales of commodities and products based on sales contract.
The Group mainly determines that performance obligation of sales of commodities as well as products are satisfied at
the point of customer acceptance the relevant product. The Group receives most of the payment within one month fromthe point of satisfying the performance obligation. With regards to transaction price, there is no significance in theamount of sales revenue that includes variable consideration. Furthermore, there are no significant financial components
in the amount of promised consideration.
Furthermore, if the Group acts as a lessor of right-of-use of its devices such as HAL, the Group classifies the relevant
lease as finance lease. Finance lease income is processed in the same way as cases where the Group acts as a lessor of
manufacturer or distributor of sales of goods. The Group determines that performance obligation is satisfied at the pointof customer acceptance and the revenue is recognized at a point of time.
Service transferred at a point of time
Service transferred at a point of time includes revenue from offering Cybernic Treatment and training service at
Cybernic Treatment Center and Robocare Centers, to end users (such as patients).
The Group determines that performance obligation of Cybernic Treatment as well as training services are satisfied at
the point of completion of such services.

- 41 -

2. Changes in the contract
Receivables and contract liabilities from contracts with customers are as follows:
Receivables
Accounts receivable

Contract liabilities
Advances received

Millions of yen

Millions of yen

April 1, 2017

247

16

March 31, 2018

363

8

March 31, 2019

242

56

(Note) The balance of advances received at the beginning of April 1, 2017 and 2018 was fully recognized as revenue
and the amount was ¥12 million and ¥8 million respectively. Furthermore, the amount of revenue recognized
during the fiscal year ended March 31, 2018 and 2019, from performance obligations satisfied in previous
periods were not material.
3. Timing of performance obligations satisfaction
Recognition of revenue arising from maintenance contract that occur incidental to sales of commodities are as follows:
2018

2019

Millions of yen

Millions of yen

Not later than 1 year

216

153

More than 1 year, 5 years or less

475

319

690

472

Total

- 42 -

23．Selling, general and administrative expenses
Other selling, general and administrative expenses consist of the following:
2018

2019

Millions of yen

Millions of yen

Personnel expenses

410

414

Taxes and dues

256

291

Commission expenses

213

195

Depreciation

139

142

Other
Total

371

412

1,390

1,454

Personnel expenses included in cost of sales, research and development and other selling, general and administrative
expenses in the consolidated statement of profit or loss were ¥836 million as of March 31, 2018 and ¥776 million as ofMarch 31, 2019.

- 43 -

24．Other income and other expenses
Other income consists of the following:
2018

2019

Millions of yen

Millions of yen

Grants14

13Consigned research income

292

364

Foreign exchange gain

11

－

Other

47

29

364

406

Total
Other expenses consist of the following:
2018

2019

Millions of yen

Millions of yen

Foreign exchange loss

－

10

Other

4

1

4

11

Total

- 44 -

25．Financial income
Financial income consists of the following:
2018

2019

Millions of yen

Millions of yen

Interest income:13

19

Financial assets measured at fair value through profit or loss

Financial assets measured at amortized cost

－

220

Total

13

239

- 45 -

26．Other comprehensive income
Amount incurred during the fiscal year, reclassifications to profit or loss and tax effects including non-controllinginterests for each item of other comprehensive income are as follows:
2018

2019

Millions of yen

Millions of yen

Items that will not be reclassified to profit or loss
Financial assets measured at fair value through othercomprehensive income
Gains (losses) arising for the year

(523)

(815)

Tax effects

129

(43)

After tax effects

(394)

(858)

(12)

14

Reclassifications－－

Before tax

(12)

14

Tax effects－－

Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Gains (losses) arising for the year

After tax effects
Total- 46 -

(12)

14

(406)

(845)

27．Earnings per share
1. The basis for calculating basic earnings per share
2018
Loss attributable to owners of parent

2019
(673)

(632)

－

－

(673)

(632)

215,047,471

215,054,735(3.13)(2.94)(Millions of yen)Amount not available for common shareholders and shareholders
equivalent to common shareholders(Millions of yen)
Loss used to calculate basic earnings per share(Millions of yen)
Average number of common shares and shares equivalent tocommon shares during the period (Shares)
Basic earnings (loss) per share (Yen)
2. The basis for calculating diluted earnings per share
2018
Loss used to calculate basic earnings per share

(673)

(632)

－

－

(673)

(632)

215,047,471

215,054,735－－

215,047,471

215,054,735(3.13)(2.94)(Millions of yen)
Adjustments to loss (Millions of yen)
Loss used to calculate diluted earnings per share(Millions of yen)
Average number of common shares and shares equivalent tocommon shares during the period (Shares)
Adjustment *Note
Average number of diluted common shares and shares equivalent tocommon shares during the period (Shares)

2019

Diluted earnings (loss) per share (Yen)(Note) Summary of potential shares not included in the calculation of diluted earnings per share as it does not havedilutive effects
2018

2019

SharesShares2015 1st Series Stock Option of CYBERDYNE, INC.

(Common share)

7,800(Common share)

7,800

2016 1st Series Stock Option of CYBERDYNE, INC.

(Common share)

4,600(Common share)

4,600

2017 1st Series Stock Option of CYBERDYNE, INC.

(Common share) 10,500- 47 -(Common share) 10,500

28．Cash flow information
Changes in liabilities arising from financing activities are as follows:
Fiscal year ended March 31, 2018
There are no changes with significant cash flows.
Fiscal year ended March 31, 2019

Third-party interests in CEJ FundTotal

- 48 -

April 1, 2018changeswith cashflowschanges
without cash
fllowsMarch 31,2019

Millions ofMillions ofMillions ofMillions of

yen

yen

yen

yen

－

680

(136)

544

－

680

(136)

544

29．Share-based payments
1. Outline of share-based payments
As share-based remuneration, the Company has adopted a share-based payment (stock option) scheme as well as a
restricted share payment scheme, both of which are accounted for using a means of equity settlement.
Stock options are granted to external consultants for the purpose of boosting their motivation and morale towards thegrowth of the Company's corporate value. Stock options are issued based on the approval at the Company's General
Meeting of Shareholders and by the resolutions of the Board of Directors of the Company. Exercise period of the stockacquisition rights is stipulated in the allotment contract and if the stock acquisition rights are not exercised by theirholder during this period, they will lose their effect.
Restricted shares are granted to the Company's employees for the purpose of boosting their motivation and morale
towards the growth of the Company's corporate value. These shares are issued by the resoulution of the Board of
Directors of the Company.
Outlines of the Company stock options issued are as follows:
Class and number ofshares covered by the

Alotteestock option
2015 1st Series Stock
Option of CYBERDYNE,
INC. (Note 1)

Date of

Exercise

Conditions for determination

allotment

periodof rights

Common Share(100 Common Shares

1 external

August 12,

July 28,

Conditions on determination of

constitute 1 share unit)

consultant

2015

2025

rights are not attached (Note 2)

May 24,

Conditions on determination of2026

rights are not attached (Note 2)

7,800 shares2016 1st Series Stock
Option of CYBERDYNE,
INC.

Common Share(100 Common Shares

1 external

constitute 1 share unit)

consultant

June 8, 2016

4,600 shares2017 1st Series Stock
Option of CYBERDYNE,
INC.

Common Share(100 Common Shares

1 external

August 8,

July 25,

Conditions on determination of

constitute 1 share unit)

consultant

2017

2027

rights are not attached (Note 2)

10,500 shares(Notes)1. This stock acquisition right was determined before the date of transition to IFRS (April 1, 2016). As such, IFRS 2"Share-based Payment" has not been applied.
2. This stock acquisition right has no conditions for determination of rights attached. As such, related expenses areprocessed at once when the rights are allotted.

- 49 -

2. Number of stock options and weighted average exercise price
2018

2019

Weighted average
exercise price
Yen

Number of shares
SharesNumber of shares
Shares

Weighted average
exercise price
Yen

Beginning balance of outstanding

60,1002,338

22,9002,050

Granted

10,500

1,788

－

－

－

－

－

－

(47,700)

2,355

－

－

－

－

－

－

Ending balance of outstanding

22,9002,050

22,9002,050

Ending balance of exercisable

7,800

1,806

12,4002,271

Exercised
ExpiredExpired at maturity(Notes)
1. As of March 31, 2018 and 2019, exercise price of stock options that is not yet exercised are between ¥1,788 to¥3,060 and ¥1,788 to ¥3,060, respectively.
2. As of March 31, 2018 and 2019, weighted average remaining contractual life of stock options that is not yet exercisedare 7 years and 7 years, respectively.
3. The assumption used to measure the fair value of stock options weighted average fair value of the stock options allottedin the fiscal year, are measured through Black-Scholes Model using the following assumptions
Fiscal year ended March 31, 20182017 1st Series Stock Option of
CYBERDYNE, INC.
The weighted-average fair value at the measurement date (Yen)64,104

Stock price at the grant date (Yen)

1,490

Exercise price (Yen)

1,788

Volatility of stock price (%) (Note 1)

52.50

Estimated residual period (Years) (Note 2)

5.96

Estimated dividend (%) (Note 3)－

Risk-free interest rate (%) (Note 4)(0.04)(Notes)
1. Volatility of stock price calculated based on the following conditions:(i) Period for collecting stock price information: 3.38 years(ii) Frequency of price monitoring: Daily(iii) Irregular information: None(iv) Discontinuous changes in corporate status: None
2. Allotment date: August 8, 2017
Exercise period: From July 26, 2019 to July 25, 2027
3. Calculated based on most recent dividend payment
4. Interest rate converted security asset yield into continuous compound interest method
Fiscal year ended March 31, 2019
There are no items to report.

- 50 -

4. Shares with restrictions on transfer as remuneration for the Company employees
The Group has introduced a restricted share payment scheme under which it provides remuneration for its employees,
by way of shares that have restriction of transfer until the rights are vested, and accounts for this scheme using a meansof equity settlement. Under this scheme, the transfer of shares becomes possible whehn the requirements of the service
conditions are met. In principle, the vsting period is five years.
The fair value of such shares are measured based on observable market prices.
In the fiscal year ended March 31, 2019, expenses related to restricted shares as remuneration for the Company's
employees were ¥1 million and the number of shares granted was 98,200 shares. These expenses were recorded asother selling, general and administrative expenses in the consolidated statement of income.

2019
Grant date

March 5 2019

Number of shares granted (Shares)

98,200Fair value at the grant date (Yen)670- 51 -

30．Financial instruments
1. Capital management
The Group is a company centered on research and development of innovative devices. It promotes clinical research,
verification and endeavors to obtain approvals from various regulators, in order to introduce the Group's product into
the market and services, which will realize sustainable growth. In line with these challenges, the Group manages its
financial instruments to maximize its corporate value.
There are no capital restrictions that affect the Group.
2. Risk management for financial instruments
In the process of its operation, the Group is exposed to various financial risks such as, credit risk, liquidity risk andexchange rate risk. In order to mitigate these financial risks, the Group selects financial instruments with very low risk.
For financing, the Group either borrows from the bank or issue bonds. Furthermore, all equity instruments held by theGroup are non-marketable securities and it is not affected by the risk of stock market.
On derivative transaction, the Group has a policy not to conduct any speculative transactions.
(i) Credit risk management
Credit risk is the risk that a counterparty to financial assets held by the Group is unable to fulfil its contractual
obligations, resulting in a financial loss for the Group.
(1) Trade and other receivables
Accounts receivable-trade expose the Group to customer credit risk. The Group manages that risk with aninternal audit process for investigating and approving customer credit on initial transaction. Furthermore,according to Customer Credit Management protocol, the Group also manages due dates and outstandingbalances by customer, in order to mitigate any concerns about collection due to deterioration in their financial
positions and other reasons.
Accounts receivables-other expose the Group to business partner credit risk, but these receivables are almost
entirely settled in the short term.
(2) Short-term investments
Short-term investments are recognized in cash and cash equivalents and other financial assets. They are highly
safe and liquid financial instruments that include negotiable deposit and jointly-managed money trust.
The carrying amount after impairment of financial assets in the consolidated statement of financial position
represents the Group's maximum exposure to the credit risk of financial assets. The Group is not exposed toexcessive credit risk associated with a particular customer that requires exceptional management.
The Group recognizes allowance for doubtful accounts for trade receivables and other financial assets measured
at amortized cost by estimating future credit losses in consideration of recoverability and significant increases incredit risk. The Group determines if credit risk has increased significantly by evaluating changes in default risk withreference to factors including the decline of counterparty results, and delinquency information.
Accounts receivable-trade are particularly important financial assets for the Group. The Group collectively
measures expected credit losses of the financial assets for the entire period to recognize the allowance for doubtful
accounts. In the following situations, that would adversely affect future cash flows, however, the Group measures
expected credit losses individually by treating each receivable as a credit-impaired financial asset:
・Where the customer has serious financial difficulties
・Where the customer defaults or becomes delinquent in accounts receivable payments despite repeated demands forpayment
・Where it is more likely that the customer will go into bankruptcy or face a situation that forces it to reconstruct its
business
The Group directly writes down the carrying amount if it does not reasonably expect to recover all or part of the
trade receivables, following an internal process of investigation and approval.
The Group is not exposed to excessive credit risk associated with a particular customer that requires exceptional
management. Furthermore, the customers of the Group are highly creditworthy, and the credit risk is limited. As thecustomer of the Group are highly credit worthy, there are very few delinquents in accounts receivables and impact
towards impairments in accounts receivable-trade and allowance for doubtful accounts are insignificant.
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The Group always sets its limit of allowance for doubtful accounts towards trade receivables that does not include
important financial elements at the amount of expected credit losses for the entire period.
The carrying amount of trade receivables that approximate collectively measured expected credit losses of thefinancial assets for the entire period to recognize the allowance for doubtful accounts as of March 31, 2018 and2019 are ¥363 million and ¥242 million, respectively.
Changes in the related allowance for doubtful accounts are as follows:
2018

2019

Millions of yen

Millions of yen

Beginning balance

1

2

Increase during the year

2

1

－

－

Decrease during the year due to settlement for
intended purposes
Decrease during the year due to reversal

(1)

(2)

Other changes－－

Ending balance21(ii) Liquidity risk management
Liquidity risk is the risk that an entity is unable to make a payment by its due date in performing its repayment
obligations for financial liabilities that become due.
The Corporate Unit of the Group renews the funding plans where necessary and maintains the level of liquidity on
hand above certain level, in order to manage liquidity risk.
The Group prepares appropriate funds for repayment, secures credit line from the financial institute where necessary,
constantly monitors the plans of cash flows and its performance in order to manage liquidity risk.
Financial liabilities by maturity date consist of the following:
Fiscal year ended March 31, 2018
Carrying amountContract amountNot later than 1 year

Later than 1 year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Non-derivative financial liabilities
274

274

274

－

274

274

274

－

Carrying amountContract amountNot later than 1 year

Later than 1 year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Trade and other payables
Total
Fiscal year ended March 31, 2019Non-derivative financial liabilities
Trade and other payables

284

Third-party interests in CEJ Fund

544

Total

828

284
(Note)

284

－

544

－

544

828

284

544

(Note) The amount of equity attributable to the Third-Party Investors on the assumption that the fund was liquidated asof March 31, 2019

- 53 -

Total amounts of commitment lines and their usage are as follows:
2018

2019

Millions of yen

Millions of yen

Total commitment lines

900

900

Drawn

－

－

900

900

Undrawn(iii) Exchange rate risk management

The Group also operates outside Japan, and therefore is exposed to the risks of exchange rate fluctuations associatedwith transactions conducted in foreign currencies etc.
As the impact of changes in exchange rate is insignificant, related information is omitted.
Furthermore, translation of the financial statements of the subsidiaries operating outside of Japan affects theamount of other comprehensive income. However, the Group does not regard this impact to be material.
3. Fair value of financial instruments
For financial instruments measured at fair value, their fair values are classified into Level 1 through Level 3 based on
the observability of inputs used for the measurement and their materiality.
Level 1: Quoted prices in active markets for identical assets or liabilities (unadjusted)
Level 2: Fair value determined using observable prices other than Level 1 for the asset or liability directly or indirectly
Level 3: Fair value determined using the valuation technique including unobservable inputs for the asset or liability(i) Measurement methods of the fair value
The Group adopts the following measurement methods for the main financial instruments measured at fair value:(Cash and cash equivalents, trade and other receivables, other financial assets (current), trade and other payables)
Carrying amounts approximate fair values because these are settled in the short-term.
(Other financial assets (non-current))
Fair value of non-marketable equity securities included in other financial assets is measured by appropriate
measurement methods such as measurement using recently available data.
Fair value of leasehold and guarantee deposits is measured by present value obtained through discounting yield tomaturity of long term bonds with high security by planned schedule of redemption.
(Other financial liabilities (non-current)
Carrying amounts approximate fair value of long-term installment accounts payable included in other financial
liabilities (non-current) because these are settled in the short-term.
(Third-party interests in CEJ Fund)The amount of the Third-party interests in CEJ Fund is the carrying amount of equity attributable to the Third-Party
Investors assuming that the fund was liquidated at the end of each quarter. Since the fair value of the equity is nearly
equal to the carrying amount, it is represented by the carrying amount.

- 54 -

(ii) Financial instruments measured at amortized cost
The following tables present the measurement techniques for measuring the fair value of major financial
instruments measured at amortized cost. Financial instruments for which carrying amounts are a reasonableapproximation of fair value or financial instruments that are not material are not included in the tables.
(Millions of yen)
2017
Carrying
amount2018
Fair value

Carrying
amountFair value

Financial assets：
Financial assets measured at amortized cost
Leasehold and guarantee deposits

62

72

61

70

Total

62

72

61

70

(Notes)(i) The fair value of leasehold and guarantee deposits is classified into Level 2.
(ii) There were no significant transfers between Level 1, Level 2 and Level 3 during the year ended March 31, 2018 andMarch 31, 2019.

- 55 -

(iii) Financial instruments measured at fair value
The carrying amount and fair value of financial instruments measured at fair value are as follows:
Fiscal year ended March 31, 2018
Fair value

Carrying amount
Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

305

－

－

305

305

2,039

－

－

2,039

2,039

2,344

－

－

2,344

2,344

Financial assets:
Financial assets measured at fairvalue through profit or loss
Other financial assets
Financial assets measured at fairvalue through other comprehensive
incomeOther financial assets
Total

Fiscal year ended March 31, 2019
Fair value
Carrying amount
Level 1

Level 2

Level 3

Total

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,954

－

－

1,954

1,954

416

－

－

416

416

2,370

－

－

2,370

2,370

Financial assets:
Financial assets measured at fairvalue through profit or loss
Other financial assets
Financial assets measured at fairvalue through other comprehensive
incomeOther financial assets
Total

Transfers between levels of the fair value hierarchy shall be recognized at the date of the event or change incircumstances that caused the transfer.
There were no significant transfers between Level 1, Level 2 and Level 3 during the year ended March 31, 2018 andMarch 31, 2019.

(iv) Assessment procedures
Assessment of financial instruments classified as Level 3 is measured by the responsible person in the Corporate
Unit. Responsible person conducts assessment and analysis of the assessment based on the Group's accounting
policies and procedures that is approved by the head of Corporate Unit. Results of assessment are than reviewed andapproved by the Head of Corporate Unit.
(v) Quantitative information with regards to financial instruments classified as Level 3
Fair value of financial asset classified as Level 3 is measured by responsible person in the Corporate unit, eachquarter using recently available data according to the Group accounting policy. Any changes in fair value andreasons are reported to the department manager, and to the President and CEO as necessary. Upon measurement of
the fair value, inputs are reasonably estimated, and most suitable valuation model is selected based on the nature of
the asset. Determination of the suitable valuation model will be verified by the appropriate internal approval process,in order to ensure the validity.

- 56 -

Financial instruments classified as Level 3 are not subject to transfer between the fair value hierarchy levels.
(vi) Changes in financial instruments classified as Level 3 during the period
Changes in financial instruments classified as Level 3 are as follows:
2018

2019

Millions of yen

Millions of yen

Beginning balance

2,008

2,344

Total gains and losses
Profit or loss (Notes 1)

(4)

220

(523)

(815)

Purchases

1,563

620

Sales

(700)

－

Ending balance

2,344

2,370

(4)

220

Other comprehensive income (Note 2)

Changes of unrealized profit related topossessed assets posted at the end of reported
period (Note 1)(Notes)1. Gains and losses included in finance income or finance costs in the consolidated statement of profit or loss
2. Gains and losses included in financial assets measured at fair value through other comprehensive income in the
consolidated statement of comprehensive income.

- 57 -

31. CEJ Fund
Gains (losses) related to CEJ Fund consists of the following:
2019
Millions of yen
Gains (losses) related to CEJ Fund
Changes in Third-party interests in CEJ Fund

136

Management expenses, etc.

(76)
61

Total
Changes in Third-party interests in CEJ Fund are as follows:
Third-party interests
Millions of yen
Balance as of April 1, 2018－

Capital contribution from Third-Party Investors

680

Changes in Third-party interests in CEJ Fund

(136)
544

Balance as of March 31, 2019

- 58 -

32．Related parties
1. Principal subsidiaries and associates etc.
Please refer to "Appendix 1" for Principal subsidiaries and associates etc.
Information on transactions and balance of receivables or payables between the Group and related parties are omitted
as this information is not material.
2. Primary executive management compensation
Primary executive management compensation consists of the following:
2018

2019

Millions of yen

Millions of yen

Basic remuneration:
Directors(Excluding Outside Members of Board of Directors)

33

33

－

－

13

13

46

46

Members of the Audit and Supervisory Board(Excluding Outside Members of the Audit andSupervisory Board)
Outside Members of the Board of Directors
Outside Members of the Audit and Supervisory Board
Total

33. Subsequent events
There are no items to report.

- 59 -

(Unaudited)[Appendix 1](Principal subsidiaries and associates etc.)
Principal subsidiaries and associates etc. are as follows:
Name

Place ofincorporation andoperation

CapitalPrincipal businesses

Voting rights(%)（Subsidiaries）

Cyberdyne Care
Robotics GmbHCYBERDYNE USA Inc.

CYBERDYNE & BROOKS,Inc.

Suzuka RoboCare Center Co.,Ltd.
Shonan RoboCare Center Co.,
Ltd.
Oita RoboCare Center Co.,
Ltd.

Functional improvement/regeneration
Germany€ 25,000 treatment service with HAL and sales of

75.1

HAL

USA

US$ 100,000

USA

US$ 300,000

Management and acceleration of theCompany's business in the U.S.

100.0

Functional improvement/regeneration
treatment service with HAL and sales of

66.7

HAL

Japan

¥3 million

Training service business with HAL

100.0

Japan

¥3 million

Training service business with HAL

100.0

Japan

¥3 million

Training service business with HAL

100.0

Management and operation of Cybernic
CEJ Capital, Inc.

Japan

¥10 million Excellence Japan Fund 1 Investment Limited

60.0

Partnership
Cybernic Excellence Japan
Fund 1 Investment Limited

Japan¥990 million

Partnership

Investment fund-related business aimed atcreating the new Cybernic Industry

30.91
Note (0.61)

Other 5 companies(Associates accounted by theequity method)CYBERDYNE Omni
Networks, INC.

Shisei Datum Ltd.

Communication business and distribution ofJapan¥160 million

communication devices on IoH/IoT in the

49.0

field of Cybernic and other related services.
Japan¥100 million

Design/development and manufacture of
medical electric blood pressure monitor(Note) The figure in the bracket for voting rights indicates the parcentage of shares held indirectly.

- 60 -

31.6