To our Shareholders

Internet disclosure related to the
Notice of the 13 t h Ordinary General Meeting of Shareholders

June 7, 2017
CYBERDYNE,INC.

Table of Contents

Business Report
II Matters regarding the Company shares
3. Matters regarding stock acquisition rights……………………………………………………………2

VII System to ensure the properness of the business and actual operation of the system… 3
Consolidated financial statements
Consolidated statement of changes in shareholders' equity and notes to consolidated financial statements……7

Financial statements
Statement of changes in shareholders' equity and notes to financial statements………………………………14

The matters mentioned above are deemed to have been provided to all shareholders through disclosure via the internet on the
Company website (http://www.cyberdyne.jp/english/company/IR.html) pursuant to the provisions of laws and regulations andArticle 22 of the Company's Articles of Incorporation.

1

Business report
II Matters regarding the Company shares
3. Matters regarding the Stock Acquisition Rights(i) Status of the Stock Acquisition Rights issued to the CYBERDYNE's Directors as remuneration for the performance of their duties
No items to report(ii) Status of the Stock Acquisition Rights issued to the CYBERDYNE's employees as remuneration for the performance of their duties
No items to report(iii) Other important matters regarding the Stock Acquisition Rights(1) 2015 1st Series Stock Options of CYBERDYNE, INC. / 2016 1st Series Stock Options of CYBERDYNE, INC.
Name
(Date of resolution)
Number of the Stock Option
Class and number of shares
covered by the Stock Option

2015 1st Series Stock Option of
CYBERDYNE, INC.
(July 28, 2015)2016 1st Series Stock Option of
CYBERDYNE, INC.
(May 24, 2016)

78 units

46 units

Common Share (100 Common Shares constitute 1 share unit)
7,800 shares

Common Share (100 Common Shares constitute 1 share unit)
4,600 shares

Amount to be paid in to obtain
the Stock Option

gratisgratisAmount to be paid in upon
exercise of the Stock Option

180,600 yen per unit
(1,806 yen per share)

306,000 yen per unit
(3,060 yen per share)

Exercise period

From July 29, 2017
to July 28, 2025

From May 25, 2018
to May 24, 2026

Issue price per share
1,806 yen
Increase of stated capital per share 903 yen

Issue price per share
3,060 yen
Increase of stated capital per share 1,530 yen

Conditions on exercise of theStock Options(Refer to the note below)(Refer to the note below)

Allottee

1 external consultant

1 external consultant

Issue price of shares upon exerciseof the Stock Options and increaseof stated capial per share(Note)
Conditions on exercise of the Stock Option are stated below- If a Stock Option Holder has waived his/her Stock Options, the Stock Option Holder may not exercise his/her Stock Option2(2) 2016 2nd Series Stock Options of CYBERDYNE, INC.
Name
(Date of resolution)2016 2nd Series Stock Options of CYBERDYNE, INC.
(July 26, 2015)

Number of the Stock Optiosn

477 units

Class and number of shares
covered by the Stock Options

Common Share (100 Common Shares constitute 1 share unit)
47,700 shares

Amount to be paid in to obtain
the Stock Options

200 yen per each Stock Option

Amount to be paid in upon
exercising the Stock Options

235,500 yen per unit
(2,355 yen per share)

Exercise period

From July 1, 2017 to August 24, 2021

Issue price of shares upon exerciseof the Stock Options and increaseof stated capial per share

Issue price per share
2,357 yen
Increase of stated capital per share 1,179 yen

Conditions on exercise of theStock Options
Allottee(Refer to the note below)
Directors, Audit and Supervisory Board Members and employee of the Company and its subsidiary companies(Note)
Stock Options can be exercised only if they meet the conditions set forth in (a) and (b) below as of the fiscal year ended
March 31, 2017 or the fiscal year ending March 31, 2018, from the first day of the month following the filing date of the
securities report of the period in which these conditions are first met.
(a) Sales exceeds JPY 3,000 Million(b) Ordinary income* becomes profitable* Income/loss before income tax without extraordinary income/loss, also called “Pretax income” or “Ordinary profit”

VII System to ensure the properness of the business and actual operation of the system
1. System to ensure the properness of the business
The resolution passed at the Board of Directors with regard to the system to ensure that the Directors’ implementation ofbusiness is conducted in compliance with laws, regulations and the Articles of Incorporation, as well as the structure to ensurethat the business is conducted in an appropriate manner is stated as below.
(i) System to ensure that the Directors and employees of CYBERDYNE (the "Company") and its subsidiaries (collectively
referred to as the "Group) perform their duties in accordance with laws, regulations and the Article of Incorporation
A code of conduct that embodies the Company Code of Conduct and other compliance-related rules shall be established for
Directors and employees to ensure adherence to laws, regulations, the Articles of Incorporation and internal regulations. The
designated Director of the Company shall have crossorganizational control over compliance initiatives and be responsible forbuilding, maintaining and updating compliancesystems. The designated Director shall disseminate the spirit of compliance toDirectors and employees of the Group to identify and solve problem.
The Company shall also establish the Affiliated Company Management Policy and in its respect, assign Directors (ifnecessary, an Audit and Supervisory Board Member) of the notable subsidiaries. Also by making it necessary for thesubsidiaries to obtain approval from the Company with regard to important matters and the Company corporate sector to
conduct certain parts of the management work, the Affiliated Company Management Policy shall ensure the appropriatenessof theirwork.
3The Company shall establish the Internal Audit Office who will work directly under the Company CEO. The Internal
Audit Office shall conduct internal audits in accordance with the Internal Audit Policy and Affiliated Company
Management Policy to check the compliance status with laws, the Articles of Incorporation, internal regulations and risk
management. Results of the internal audits shall be reported to the Company CEO, the Audit and Supervisory Board, andBoard of Directors.
The Hotline System Policy shall be established and operated as a means for employees to directly provide information
about legally suspicious behavior. The method of providing information by means of oral communication, email, chat andopinion boxes shall be the subject of the compliance hotline protocol.
(ii) System to store and manage information related to the execution of duties by the Company Directors
The Company shall establish the Document Management Policy which states the method of storing and managing
information related to the execution of duties. Pursuant to the law and this protocol, the information related to the executionof duties shall be recorded and stored in paper or electronic format.
This information shall always be accessible by Directors and Audit and Supervisory Board Members.
(iii) Rules and other systems of the Group to manage the risk of losses
In order to strengthen the risk management structure of the Group, a designated director shall put a relevant operating unit
in charge for each risk category and each operating unit in charge is to create risk scopes, risk profiles, self evaluation
policies and guidelines. Director in charge of finance shall monitor risks across the organization and address companywide
risks.
When a new risk arises, the Company CEO shall quickly appoint Director or head of operating unit in charge of handlingsuch risks.
(iv) System of the Group to ensure the efficient execution of duties by Directors
As a system to ensure the efficient execution of duties by Directors, The Board of Directors shall meet once a month andprovisional meetings of the Board of Directors shall be conducted whenever necessary.
Regarding the execution status of matters resolved by the meeting of Board of Directors, the designated Director or headof operating unit shall report on a regular basis and Audit and Supervisory Board shall perform audits.
Medium-term business policies shall be established and updated if necessary to cope with the changes in the operating
environment. The status of operation shall be reported to the meeting of Board of Directors whenever necesary.
The Company shall also establish the Affiliated Company Management Policy in order to manage the subsidiaries
under the related sector of the Company so that Directors of the subsidiaries can execute their duties efficiently.
(v) System to ensure reporting on the subsidiary directors’ performance of duties to the Company
The Company shall establish the Affiliated Company Management Policy and the subsidiaries must report to theCompany’s sector in charge of managing subsidiaries whenever necessary with regard to the status of their duties.
(vi) Matters regarding employees who assist Audit and Supervisory Board with the fulfillment of its duties
When the Audit and Supervisory Board requests assignment of staff to assist with its duties, the Board of
Directors may designate the appropriate employees who shall serve as assistant employees or as employees who
also hold a post as an assistant upon consulting with Audit and Supervisory Board.
During the assistance period, the authority over the designated employees shall be delegated to the Audit andSupervisory Board, and the employees shall not be subject to the chain of command of the directors. Any
performance evaluation and changes in the relevant personnel providing assistance shall require the consent of
the Audit and Supervisory Board.
4

(vii) System for Directors and employees of the Company to report to the Audit and Supervisory Board, and asystem for Directors and employees of the subsidiaries, or the Company’s personnel who received reports
from Directors and employees of the subsidiaries, to report to the Audit and Supervisory Board of the Company
The Directors and employees of the Company as well as the Directors and employees of the subsidiaries shallreport any significant matters that is against the law or the Articles of Incorporation and matters that areconsidered dishonest acts and matters that may have a significant impact on the Company, to the Audit andSupervisory Board Member immediately. In addition, if the Audit and Supervisory Board Member asks for areport from the directors or employees pursuant to the law, Auditing Standards or Auditor’s Meeting Rules
established by the Audit and Supervisory Board, the directors or employees in concern shall report promptly. In
order to improve comprehensiveness of the report regarding any significant matters which are against the law or
the Articles of Incorporation, matters that are considered dishonest acts, and matters that may have a significant
impact on the Company, Directors and employees of the Company as well as Directors and employees of thesubsidiaries shall conduct a hearing and gather information from the reports stated in this item, items stated inInternal Audits, hotlines and Acounting Auditors.
Pursuant to the Hotline System Policy, if matters that may violate the law or corporate compliance in theGroup are found, they shall be reported to the Board of Directors by the director in charge of compliance.
Furthermore, the contents reported and the results shall be reported to full-time Audit and Supervisory Board
Member.
The Internal Audit Office of the Company shall report the status of the internal audit to Audit and Supervisory
Board Members. Furthermore, the director in charge of compliance shall report the status regarding complianceto Audit and Supervisory Board when necessary.
(vLii) 6\VWHPWRHQVXUHWKDWWKHSHUVRQZKRPDGHUHSRUWVWR$XGLWDQG6XSHUYLVRU\%RDUG0HPEHUZLOOQRWEHSXWLQ
DGLVDGYDQWDJHRXVSRVLWLRQThe Company shall not conduct any treatment that puts a person in a disadvantageous position because of theirreports made to the Audit and Supervisory Board Member.
(ix) Matters regarding the Company policy of processing auditing fees
If Audit and Supervisory Board Member requests a payment required in accordance with the execution of their
duty in advance or to be reimbursed, with the exception of cases where such a payment is recognized to becompletely unnecessary for the execution of their duty, it shall be paid promptly upon request.
(x) Other systems to ensure the effective execution of audits by Audit and Supervisory Board Member of the Company
The Directors and employees of the Company and the subsidiaries shall comply with hearing or visiting audits
and other methods of investigation by Audit and Supervisory Board Member in order to secure theeffectiveness of the audits.
The Company shall provide enough opportunities for Audit and Supervisory Board Member to exchange
opinion with Directors, Accounting Auditors and any other personnel required to appropriately execute the duty
as an auditor.
5

The Company shall also provide enough opportunities for Audit and Supervisory Board Member to coordinate
with other Audit and Supervisory Board Members and to gather information from employees of the subsidiaries.

2. The status of operation of the system to ensure appropriate execution of duties
The Group shall work to maintain the aforementioned system and its operation. Notable actions conductedwithin this fiscal year which are thought to be important with regard to internal control are stated below.
(i) Corporate Compliance System
All members of the Group shall work to comply with the law in accordance with the policies regarding thecompliance system, such as the Company Code of Conduct. Furthermore, in order to detect or avoid
violation of compliance at the earliest opportunity, the Hotline System Policy and its method of utilization
shall be notified to related personnel in a thorough fashion.
(ii) Risk Management System
For the Group, the director in charge of risk management shall determine the operating unit in charge ofeach risk category, monitor the risk status and respond accordingly. Furthermore, the status of this risk
management is subject to Internal Audits and audits conducted by Audit and Supervisory Board
Member.
(iii) Effectiveness of the execution of duty by the directors
For the Group, the Board of Directors shall meet once a month with provisional Board of Directors
meetings conducted whenever necessary, in order to check the reports of business execution (including
reports from subsidiaries), progress of business plans for the fiscal year (including plans for
subsidiaries), and so on.

6This is an English translation of financial statements as well as notes to financial statements,
originally in Japanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.

Consolidated financial statements
Consolidated statements of changes in shareholders' equity (from April 1, 2016 to March 31, 2017)(Unit: Thousands of yen)

Shareholders' equity
Capital stock
Balance at beginning of year

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

16,511,767

16,447,767(6,433,015)(204)

26,526,314

Issuance of new shares

10,232,113

10,232,113－－

20,464,227

Net loss attributable to
CYBERDYNE,INC.

－－(789,332)－(789,332)

Changes of items during year

Net changes in items
other than shareholders'equityTotal changes of items
during year

－

－

－

－

－

10,232,113

10,232,113(789,332)－

19,674,895

Balance at end of year

26,743,881

26,679,881(7,222,347)(204)

46,201,209

Other comprehensive income

Total net assets

536,847－

27,063,934

－

－

－

20,464,227

－

－

－

－

(789,332)

8,966

2,730

11,696(524,378)－(512,682)

8,966

2,730

11,696(524,378)－

19,162,212

8,966

3,502

12,46812,468－46,226,147

Foreign currencytranslation
adjustment

Total othercomprehensive
income

－

772

772

Issuance of new shares－－

Net loss attributable to
CYBERDYNE,INC.

－

Balance at beginning of year

StockacquisitionrightsNon-controllinginterests

Valuation difference
on available-for-salesecurities

Changes of items during year

Net changes in items
other than shareholders'equityTotal changes of items
during year
Balance at end of year
(Rounded down to the closest thousands of yen)7

Notes to consolidated financial statements(Important items that form the basis for preparing "consolidated financial statements)
1. Scope of consolidation(i) Numbers of consolidated subsidiaries and names of major consolidated subsidiaries
Number of consolidated subsidiaries: 5 companies
Names of major consolidated subsidiaries:‌ uzuka Robo Care Center Co., Ltd., Shonan Robo Care Center Co., Ltd., Oita Robo Care Center Co., Ltd.,S
Cyberdyne Care Robotics GmbH, CYBERDYNE USA Inc.
Out of the subsidiaries mentioned above, as CYBERDYNE USA Inc. was newly established during the fiscal
year ended March 31, 2017 and it was included within the range of consolidation.
(ii) Names of major non-consolidated subsidiaries etc.

Reasons for excluding from the scope of consolidation:
The five non-consolidated subsidiaries are all small and immaterial when measured in impact of total
amounts of assets, net sales, net income (based on the Company’s ownership percentage), and retained earnings(based on the Company’s ownership percentage) of those companies on consolidated financial statements. They
have therefore been excluded from the scope of consolidation.
2. Matters regarding account processing standards(i) Evaluation standards and methods for important assets(1) Evaluation standards and methods for securitiesa) bonds held to maturity: amortized cost method (straight-line method)b) other securities (non-marketable securities): moving average cost method(2) Evaluation standards and methods for inventoriesa) finished goods, work in process : specific cost methodb) raw materials and merchandises : moving average cost methodc) supplies : last purchase price method
Iinventories whose profitability has declined are recorded with reduced book values accordingly.

8

(ii) Depreciation methods of non-current assets(1) Property, plant and equipment
Declining-balance method is adopted. However, for buildings (excluding accessories), property, plant andequipment obtained after April 1 2016, assets for rent, as well as part of tools, furniture and fixtures, straightline method is adopted. The useful lives for major assets are as follows.
Buildings
3 – 38 years
Assets for rent
5 years
Machinery and equipment
7 years
Vehicles2 – 6 years
Tools, furniture and fixtures 2 – 20 years(2) Intangible assets
Straight-line method was adopted.Software for internal use is amortized using the straight-line method overthe estimated useful lives (within five years)
SoftwarePatent rights

3 – 5 years
8 years(iii) Basis for recording important provisions allowance for doubtful receivables
Allowance for doubtful accounts
To provide for losses incurred through bad debts, the amount of potential loss is calculated by using thehistorical loss ratio in case of non-classified loans/receivables. Potential losses for classified loans/receivables
are individually assessed.
(iv) Other material information regarding the preparation of consolidated financial statements(1) Basis for evaluating foreign-currency-denominated important assets and liabilities in Japanese yen
Foreign-currency-denominated money claims and liabilities are converted into Japanese yen at the spot
exchange rates in effect at the consolidated balance sheet date, and the exchange differences are scored as
profits/losses. Assets and liabilities of subsidiaries outside of Japan are translated into Japanese yen at the spot
exchange rates in effect on the balance sheet date; their earnings and expenses are translated into Japanese yenat the average rate during the period; and the exchange differences are included in foreign currency translation
adjustment under net assets.
Foreign-currency-denominated securities (other securities) are converted into Japanese yen at the spot
exchange rates in effect at the consolidated balance sheet date, and exchange differences are calculated bymoving-average method.
(2) Accounting treatment of consumption taxes, etc.
Consumption taxes and local consumption taxes are excluded from the transaction accounts.
(3) Treatment method of deferred assets
New share issuance costs are recognized as expenses when disbursed.
9

(Changes in accounting policy)
Following the revision of the Corporation Tax Act, the Group applied the "Practical Solution on Accounting for Changes in
Depreciation Method related to the 2016 Tax Law Changes (PITF No.32 of June 17, 2016)," to the consolidated fiscal year
ended March 31, 2017. Accordingly, the depreciation method of structures and facilities attached to buildings acquired on
and after April 1, 2016 was changed from declining-balance method to straight-line method. The impact on the consolidated
financial statements of the year ended March 31, 2017 is minimal.
(Additional informations)
Beginning from the fiscal year under review, the Group has applied changes in pursuant to the "Implementation
Guidance on Recoverability of Deferred Tax Assets"（Implementa tion Guidance of Corporate AccountingStandards, No. 26, March 28, 2016 ）(Notes to consolidated balance sheet)
1. Assets pledged as collateral
The following asset is pledged as collateral
Buildings

Total

280,000 thousands of yen
280,000 thousands of yen

While there is a revolving mortgage related to the banking transaction, there is no secured liabilities.
2. Accumulated depreciation deducted directly from the assets
Property, plant and equipment

1,975,508 thousands of yen

Amount stated above includes accumulated impairment losses
3. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
631,457 thousands of yen
144,555 thousands of yen
189,458 thousands of yen
95,744 thousands of yen
14,174 thousands of yen
4. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions with, in order toefficiently fund ongoing operations. Balance of unexecuted loans of the overdraft agreements as of the end of thisconsolidated fiscal year is written below.

Balance

900,000 thousands of yen
900,000 thousands of yen
10(Notes to statements of changes in equity)
1. Total numbers of issued shares as well as type of the issued shares within the consolidated fiscal year under review
Number of shares issued
As of April 1, 2016

Increase

Number of shares issued
As of March 31, 2017

Decrease

Issued shares
Common Shares

125,576,000

11,771,609－

Class B Shares

77,700,000－－

77,700,000

203,276,000

11,771,609－

215,047,609

Total

137,347,609(Outline of changes in the number of issued shares)
11,771,609 Shares(Notes related to financial instruments)
1. Matters related to the status of financial instruments(1) Company policy for financial instruments
The Group obtains financing by borrowings from banks or other financial institutions such as through the issuance of bonds
based on its capital financing plan. Cash surpluses, if any, are invested only in low risk financial assets. The Company does notintend to engage in derivative transactions.
(2) Nature and extent of risks arising from financial instruments
Receivables, such as trade accounts and other, are exposed to customer credit risk.
Payment terms of payables, such as trade accounts, are less than a month.
Marketable and investment securities, which mainly consist of stocks, held-to-maturity bonds and money trust, areexposed to credit risk of the issuers.
(3) Risk management for financial instruments
The Group manages its credit risk from receivables on the basis of internal guidelines, which include monitoring of
payment terms and balances of major customers by each business administration department to identify the default
risk of customers at an early stage.
With regard to marketable securities and investment securities, the Group regularly monitors the financial
conditions and other parameters of the issuers of these securities.
(4) Supplemental explanation related to fair values of financial instruments
Fair values of financial instruments are based on quoted prices in active markets. If a quoted price is not available,another rational valuation technique is used instead. Since various assumptions and factors are reflected inestimating the fair value, different assumptions and factors could result in different fair value.

112. Matters related to the fair value of financial instruments
Balance sheet amounts and fair values of financial instruments and their differences as of March 31, 2017 are as follows(Unit: Thousands of yen)Amounts included in the
consolidated balance sheet

Fair value

Differences(i) Cash and bank balances

10,375,733

10,375,733－(ii) Accounts receivable - trade247,451

247,451－

23,000,000

23,000,000－

125,233

125,233－(iii) Securities(iv) Accounts receivable - other

33,748,418

33,748,418－(i) Accounts payable - trade

20,75820,758－(ii) Income taxes payable

151,632

151,632－

Total liability

172,391

172,391－

Total assets（Note）(1) Method of calculating the fair value of the financial instruments
Assetsa) cash and bank balances, b) accounts receivable- trade, c) securities, d) accounts receivable- other
The valuation of carrying values are used for the items above, as the carrying values approximate fair value because of their short maturities.
Liabilitiesa) accounts payable - trade, b) income taxes payable
The valuation of carrying values are used for the items above, as the carrying values approximate fair value because of their short maturities.
(2) Carrying amount of financial instruments whose fair value cannot be reliably determined(Unit: Thousands of yen)
Items

Amounts included in the consolidated balance sheet

Shares of subsidiaries and asociates

10,896

Investments in capital of subsidiaries and affiliates

2,957

Investment securities

1,360,838

The above items do not have a market price, and its fair value is therefore cannot be reliably determined. As such the items are excluded from "assets"

12

(Notes to per- share data)
1. Net assets per share …………………………………………………………………………214.90 yen(Note)Net assets per share are calculated ased on the following
Total net assets

46,226,147 thousands of yen

Amount deducted from total net assets

12,468 thousands of yen

Net assets at end of year pertaining to Common Shares and shares equivalent to Common Shares 46,213,678 thousands of yen
Number of Common Shares and shares equivalent to Common
Shares that is used in calculation of net assets per share

215,047,471 shares

2. Net loss per share……………………………………………………………………………3.69 yen(Note)Net loss per share are calculated ased on the following
789,332 thousands of yen

Total net loss
Net loss attributable to CYBERDYNE-

Net loss attributable to common shares and shares equivalent to Common Shares
Average number of Common Shares and sharesequivalent to Common Shares during the period

789,332 thousands of yen
213,822,256 shares

Although there were dilutive shares, diluted net income per share is not disclosed because the Company posted a net loss per share.

13

Financial statements
Statement of changes in shareholders' equity (from April 1, 2016 to March 31, 2017)(Unit: Thousands of yen)
Shareholders' equity
Capital surplus
Capital stock

Balance at beginning of year

Legal capitalsurplusRetained earnings

Total capitalsurplus

Legal retained
earnings

Other retained
earnings
Retained earnings
brought forward

Total retained
earnings

16,511,767

16,447,767

16,447,767

30(6,363,224)(6,363,194)

10,232,113

10,232,113

10,232,113

－

－

－

－

－

－

－

(707,418)(707,418)

Change of items during year
Issuance of new shares
Net loss
Net changes in items otherthan shareholders' equity

－

－

－

－

－

－

Total changes of items
during year

10,232,113

10,232,113

10,232,113－(707,418)(707,418)

Balance at end of year

26,743,881

26,679,881

26,679,881

30(7,070,642)(7,070,612)

Shareholders' equity

Valuation and translation adjustments
Valuation
Total valuationdifference onand translation
available-for-saleadjustments
securities

StockacquisitionrightsTotal net assets

Treasury shares

Total shareholders'equity(204)

26,596,135－－

536,847

27,132,982

Issuance of new shares－

20,464,227

－

－

－

20,464,227

Net loss－(707,418)－－－(707,418)

－

－

8,966

8,966

(524,378)(515,412)

Total changes of items
during year－

19,756,809

8,966

8,966

(524,378)

19,241,396

Balance at end of year

(204)

46,352,944

8,966

8,966

12,46846,374,379

Balance at beginning of year
Change of items during year

Net changes in items otherthan shareholders' equity(Rounded down to the closest thousands of yen)14

Notes to financial statements(Important items that form the basis for preparing "financial statements)
1. Evaluation standards and methods for important assets(i) Evaluation standards and methods for securitiesa) bonds held to maturity: amortized cost method (straight-line method)b) other securities (non-marketable securities): moving average cost methodc) shares of subsidiaries and affiliates as well as investments in capital of subsidiaries and affiliates: moving average cost method(ii) Evaluation standards and methods for inventoriesa) finished goods, work in process : specific cost methodb) raw materials and merchandises : moving average cost methodc) supplies : last purchase price method
Iinventories whose profitability has declined are recorded with reduced book values accordingly.
2. Depreciation methods of non-current assets(i) Property, plant and equipment
Declining-balance method is adopted. However, for buildings (excluding accessories), property, plant andequipment obtained after April 1 2016, assets for rent, as well as part of tools, furniture and fixtures, straightline method is adopted. The useful lives for major assets are as follows.
Buildings
3 – 38 years
Structure
10-20 years
Machinery and equipment
7 years
Vehicles2 – 6 years
Tools, furniture and fixtures 2 – 20 years
Assets for rent
5 years(ii) Intangible assets
Straight-line method was adopted.Software for internal use is amortized using the straight-line method overthe estimated useful lives (within five years)
SoftwarePatent rights

3 – 5 years
8 years(iii) Long-term prepaid expenses
The straight-line method is adopted.
15

3. Basis for recording provision and allowance for doubtful receivables
Allowance for doubtful accounts
To provide for losses incurred through bad debts, the amount of potential loss is calculated by using thehistorical loss ratio in case of non-classified loans/receivables. Potential losses for classified loans/receivables
are individually assessed.
4. Other material information regarding the preparation of financial statements(i) Basis for evaluating foreign-currency-denominated important assets and liabilities in Japanese yen
Foreign-currency-denominated money claims and liabilities are converted into Japanese yen at the spot
exchange rates in effect at the balance sheet date, and the exchange differences are scored as profits/losses.
Furthermore, Foreign-currency-denominated securities (other securities) are converted into Japanese yen at
the spot exchange rates and the valuation difference is included in the net assets as valuation difference on
available-for-sale securities.
(ii) Accounting treatment of consumption taxes, etc.
Consumption taxes and local consumption taxes are excluded from the transaction accounts.
(iii) Treatment method of deferred assets
New share issuance costs are recognized as expenses when disbursed.
(Changes in accounting policy)
Following the revision of the Corporation Tax Act, the Group applied the "Practical Solution on Accounting for Changes in
Depreciation Method related to the 2016 Tax Law Changes (PITF No.32 of June 17, 2016)," to the fiscal year ended March
31, 2017. Accordingly, the depreciation method of structures and facilities attached to buildings acquired on and after April
1, 2016 was changed from declining-balance method to straight-line method. The impact on the financial statements of theyear ended March 31, 2017 is minimal.
(Additional information)
Beginning from the fiscal year under review, the Group has applied changes in pursuant to the "Implementation
Guidance on Recoverability of Deferred Tax Assets"（Implementa tion Guidance of Corporate AccountingStandards, No. 26, March 28, 2016 ）(Notes to balance sheet)
1. Assets pledged as collateral
The following asset is pledged as collateral
Buildings

Total

280,000 thousands of yen
280,000 thousands of yen

While there is a revolving mortgage related to the banking transaction, there is no secured liabilities.
16

2. Accumulated depreciation deducted directly from the assets
Property, plant and equipment

1,967,773 thousands of yen

Amount stated above includes accumulated impairment losses
3. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
Buildings
Machinery & equipment
Tools, furniture & fixtures
Land
Software‌631,457 thousands of yen
144,555 thousands of yen
189,458 thousands of yen
95,744 thousands of yen
14,174 thousands of yen

4. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions with, in order toefficiently fund ongoing operations. Balance of unexecuted loans of the overdraft agreements as of the end of thisfiscal year is written below.
Maximum limit of overdraft accountBalance of unexecuted loans
Balance

900,000 thousand s of yen
900,000 thousand s of yen

Short-term money claims

231,708 thousands of yen

Short-term money liabilities

3,945 thousands of yen(Notes to statement of income)Net sales
Other operating transaction
Transaction amount other than business transactions

108,737 thousands of yen
5,381 thousands of yen
9,013 thousands of yen

17(Notes to statement of changes in shareholders' equity)
Number of treasury shares as of the end of business year ended March 31, 2017
Common Share 138 Shares(Notes to tax effect accounting)
The deferred tax liabilities are mainly due to retirement costs for asset retirement obligations.
(Notes to per- share data)
1. Net assets per share …………………………………………………………………………215.59 yen(Note)Net assets per share are calculated ased on the following
46,374,379 thousands of yen

Total net assets
Amount deducted from total net assets

12,468 thousands of yen

Net assets at end of year pertaining to Common Shares and shares equivalent to Common Shares 46,361,910 thousands of yen
Number of Common Shares and shares equivalent to Common
Shares that is used in calculation of net assets per share

215,047,471 shares

2. Net loss per share……………………………………………………………………………3.31 yen(Note)Net loss per share are calculated ased on the following
707,418 thousands of yen

Total net loss
Net loss attributable to CYBERDYNE-

Net loss attributable to common shares and shares equivalent to Common Shares
Average number of Common Shares and sharesequivalent to Common Shares during the period

707,418 thousands of yen
213,822,256 shares

Although there were dilutive shares, diluted net income per share is not disclosed because the Company posted a net loss per share.

This is an English translation of financial statements as well as notes to financial statements,
originally in Japanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.

18