To our Shareholders

Internet disclosure related to the
Notice of the 14th Ordinary General Meeting of Shareholders

June 5, 2018
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

Non-consolidated financial statements
Statement of changes in shareholders' equity and notes to non-consolidated 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 Members of the Board of 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. / 2017 1st Series
Stock option 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 Optionof CYBERDYNE, INC.
(July 28, 2015)2016 1st Series Stock Optionof CYBERDYNE, INC.
(May 24, 2016)2017 1st Series Stock Option of
CYBERDYNE, INC.
(July 25, 2017)

78 units

46 units

105 units

Common Share
Common Share(100 Common Shares constitute 1 share unit) (100 Common Shares constitute 1 share unit)
7,800 shares
4,600 shares

Common Share(100 Common Shares constitute 1 share unit)
10,500 shares

Amount to be paid in to obtain
the Stock Option

gratisgratisgratisAmount to be paid in upon
exercise of the Stock Option¥180,600 per unit(¥1,806 per share)¥306,000 per unit(¥3,060 per share)¥178,800 per unit(¥1,788 per share)

Exercise period

From July 29, 2017
to July 28, 2025

From May 25, 2018
to May 24, 2026

From July 26, 2019
to July 25, 2027

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

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

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

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

Allottee

1 external consultant

1 external consultant

1 external consultant(Note)
Conditions on exercise of the Stock Option are stated below.
- If a Stock Option Holder shall be deemed to have waived his/her Stock Options, the Stock Option Holder may not exercise his/her Stock Option.

2¥1,788¥894

(2) 2016 2nd Series Stock Options of CYBERDYNE, INC.
Name
(Date of resolution)2016 2nd Series Stock Options of CYBERDYNE,
INC. (July 26, 2016)

Number of the Stock Option

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 per each Stock Option

Amount to be paid in upon
exercising the Stock Options¥235,500 per unit(¥2,355 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
Increase of stated capital per share

Conditions on exercise of theStock Options
Allottee¥2,357¥1,179(Refer to the note below)
Members of the Board of Directors, Members of the Audit and Supervisory Board and employees of theCompany and its subsidiaries.

(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 ¥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 Systems to ensure the appropriateness of business operations and implementation
status of the system
1. System to ensure the appropriateness of business operations
The Company resolved the system to ensure the appropriateness of business operations of the Members of the Board of
Directors in compliance with laws, regulations and Articles of Incorporation and the structure to ensure theappropriateness of other business as below at the Board of Directors' Meeting.
(i) Systems to ensure that Members of the Board of Directors and employees of CYBERDYNE, INC. (the "Company") andits subsidiaries (collectively referred to as the "Group") perform their duties in accordance with laws, regulations andthe Articles of Incorporation
The Company shall establish compliance-related internal regulations embodying the Company Code of Conduct, for theGroup's Members of the Board of Directors and employees to ensure adherence to laws, regulations, the Articles ofIncorporation and the internal regulations.
A designated Member of the Board of Directors of the Company shall have cross-organizational control over theGroup's compliance initiatives. The designated Members of the Board of Directors shall disseminate the spirit ofcompliance to Members of the Board of Directors and employees of the Group to identify and solve problems.
The Company shall establish the Affiliated Company Management Policy and, in conformity with that, appoint
Members of the Board of Directors and, if necessary, Members of Audit and Supervisory Board of subsidiaries, approvetheir important matters and take up part of their administrative works. Consequently the Company shall ensure theappropriateness of the affiliated companies' work pursuant to the Affiliated Company Management Policy.
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 the Affiliated Company
Management Policy to check the compliance status with laws, regulations, the Articles of Incorporation, and internal
regulations and monitor the overall risk management status. Results of the internal audits shall be reported to theCompany CEO, the Audit and Supervisory Board, and the Board of Directors.
The Company shall establish and operate the Hotline System Policy as a means for employees to directly provide
information about legally suspicious behaviors. The method of providing information by means of oral communication,e-mail, chat and the opinion 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's Members of the Board of
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 media.
This information shall always be accessible by Members of the Board of Directors and Members of Audit andSupervisory Board.
(iii) Policies, procedures and other systems of the Company and the Group to manage the risk of losses
In order to strengthen the risk management structure of the Group, the designated Member of the Board of Directors shall
put a relevant operating unit in charge of each risk category and each operating unit in charge is to define risk scopes andprofiles, and create self evaluation policies and guidelines. The Member of the Board of Directors in charge of finance shallmonitor risks across the organization and address companywide risks. When a new risk arises, the Company CEO shallquickly appoint a Member of the Board of Directors or Head of an operating unit in charge of handling such risks.
(iv) System of the Group to ensure the efficient execution of duties by Members of the Board of Directors of the Company
and the GroupAs a system to ensure the efficient execution of duties by Members of the Board of Directors, The Board of Directors
shall meet once a month and extraordinary meetings of the Board of Directors shall be conducted whenever necessary.
Regarding the execution status of matters resolved by the meeting of the Board of Directors, each in-charge Member of theBoard of Directors or Head of an operating unit shall report on a regular basis and Audit and Supervisory Board shallperform audits.
The Company shall establish medium-term business policies and, if necessary, update them to cope with the changes
in the business environment. The status of business performance in that regard shall be reported to the Board of
Directors' Meeting whenever necessary.
The Company shall also establish the Affiliated Company Management Policy in order to manage the subsidiaries under
the related units of the Company so that Members of the Board of Directors of the subsidiaries can execute their duties
efficiently.
(v) System to ensure reporting on the performance of duties by subsidiaries' Member of the Board of Directors to theCompany
The Company shall establish the Affiliated Company Management Policy and the subsidiaries shall report to the Company's
units in charge of managing them where 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.

4

During the assistance period, the authority over the designated employees shall be delegated to the Audit and Supervisory
Board, and the employees shall not be subject to the chain of command of the directors. Any performance evaluation andchanges in the relevant personnel providing assistance shall require the consent of the Audit and Supervisory Board.
(vii) System for Members of the Board of Directors and employees of the Company to report to the Audit and Supervisory
Board, and a system for Members of the Board of Directors and employees of the subsidiaries, or the Company’s
personnel who received reports from Members of the Board of Directors and employees of the subsidiaries, to report to
the Audit and Supervisory Board of the Company
The Members of the Board of Directors and employees of the Company as well as the Members of the Board of Directors andemployees of the subsidiaries shall report any significant matters that is against the law or the Articles of Incorporation andmatters that are considered dishonest acts and matters that may have a significant impact on the Company, to the Members of
the Audit and Supervisory Board immediately. In addition, if a Member of the Audit and Supervisory Board asks for a reportfrom the Members of the Board of Directors or employees of the Group pursuant to the law, Auditing Standards or Auditor’s
Meeting Rules established by the Audit and Supervisory Board, the relevant Members of the Board of 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 asignificant impact on the Company, Members of the Board of Directors and employees of the Company as well as Members of
the Board of Directors and employees of the subsidiaries shall endeavor to conduct hearing and gather information from thereports stated in this clause and matters stated in Internal Audits, hotlines and Accounting Audits.
Pursuant to the Hotline System Policy, if matters that may violate the law or corporate compliance in the Group are found,they shall be reported to the Board of Directors by the Designated Member of the Board of Director in charge ofcompliance. Furthermore, the contents reported and the research results shall be reported to the full-time Member of the
Audit and Supervisory Board.
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 compliance to Audit andSupervisory Board when necessary.
(vLii) 6\VWHPWRHQVXUHWKDWWKHSHUVRQZKRPDGHUHSRUWVWRa Member of Audidt and Supervisory Board Member will not be
put in a GLVDGYDQWDJHRXVSRVLWLRQThe Company shall not conduct any treatment that puts a person in a disadvantageous position because of his/her report
made to a Audit and Supervisory Board Member.
(ix) Matters regarding the Company policy of processing auditing fees
If Member of the Audit and Supervisory Board 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 be completely
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 Members of the Audit and Supervisory Board of the Company
Members of the Board of Directors and employees of the Company and the subsidiaries shall comply with hearing orvisitation and other methods of examination by Members of the Audit and Supervisory Board in order to secure theeffectiveness of the audits.
The Company shall provide enough opportunities for Members of the Audit and Supervisory Board to exchange
opinions with Members of the Board of Directors, Accounting Auditors and any other personnel required toappropriately execute the duty as auditors.
Upon request of Members of the Audit and Supervisory Board, the Company shall also provide enough opportunities for
Members of the Audit and Supervisory Board to coordinate with the subsidiaries' Members of the Audit and Supervisory
Board and to gather information from employees of the subsidiaries.
52. Implementation status of the systems to ensure appropriateness of business operations
The Group established and implemented the aforementioned systems. Notable actions conducted within 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 endeavor to be compliant with the laws and regulations in execution of their duties inaccordance with internal policies, such as the Company Code of Conduct based on the aforementioned compliancesystems. Furthermore, in order to detect or avoid violation of compliance at the earliest opportunity, the Hotline
System Policy and its method of utilization are notified to related personnel in a thorough fashion.
(ii) Risk Management System
For the Group, the designated Member of the Board of Directors of the Company in charge of risk management
determines the operating unit in charge of each 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 Members of the
Audit and Supervisory Board.
(iii) Effeciency of the execution of duty by Members of the Board of 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 ofbusiness performance for the fiscal year (including performance of 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, 2017 to March 31, 2018)(Unit: Thousands of yen)

Shareholders' equity
Capital stock
Balance at beginning of year

Capital surplus

Retained earnings

Treasury shares

Total shareholders' equity

26,743,881

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

46,201,209

Net loss attributable to
CYBERDYNE,INC.

－－(591,185)－(591,185)

Increase in retained
earnings due to mergerof non-consolidated
subsidiaries－－(3,585)－(3,585)

－

－

－

－

－

－

－

(594,771)－(594,771)

26,743,881

26,679,881(7,817,118)(204)

45,606,438

Changes of items during year

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

Other comprehensive income

Total net assets

12,468－46,226,147

－

－

－

(591,185)

－

－

－

－

(3,585)(8,288)(11,703)(19,991)

6,635

12,019(1,336)(8,288)(11,703)(19,991)

6,635

12,019(596,107)677(8,200)(7,522)

19,10312,01945,630,039

Foreign currencytranslation
adjustment

Total othercomprehensive
income

8,966

3,502

12,468Net loss attributable to
CYBERDYNE,INC.

－－

Increase in retained
earnings due to mergerof non-consolidated
subsidiaries－

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: 7 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., CEJ Capital Inc., CYBERDYNE & BROOKS, Inc.
Out of the subsidiaries mentioned above, as CEJ Capital Inc. and CYBERDYNE & Brooks, Inc. were newly establishedduring the fiscal year ended March 31, 2018, they were newly included in the scope of consolidation.
(ii) Names of non-consolidated subsidiaries

Reasons for exclusion of those companies from the scope of consolidation:
The four 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. The scope of the equity method(i) Affiliated companies included in the scope of the equity method
Number of affiliated companies included in the scope of the equity method: 2 companies
Names of affiliated companies included in the scope of equity method
CYBERDYNE Omni Networks, INC., Shisei Datum Ltd.
CYBERDYNE Omni Networks, INC. was newly established during the fiscal year ended March 31, 2018 and it was includedin the scope of the equity method.
Furthermore, shares of Shisei Datum Ltd. was obtained during the fiscal year ended March 31, 2018 and Shisei Datum Ltd.
was included in the scope of the equity method.
(ii) Non-consolidated subsidiaries not included in the scope of the equity method
Number of non-consolidated subsidiaries not included in the scope of the equity method: 4 companies
Name of non-consolidated subsidiaries not included in the scope of equity method
CYBERDYNE EU B.V., CYBERDYNE Denmark ApS, Cyberdyne Sweden AB, CYBERDYNE (Europe) GmbH
Reasons for exclusion of those companies from the scope of the equity method
The aforementioned companies were not included in the scope of the equity method because the companies only have aslight effect on the consolidated financial statements and as the companies have no significance as a whole in terms of net
income or loss (amount corresponding to the equity interest) and retained earnings (amount corresponding to the equity
interest), There fore even if they are excluded from the scope of the equity method, impact on the consolidated financial
statements is negligible.
83. 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
Inventories whose profitability has declined are recorded with reduced book values accordingly.
(ii) Depreciation methods of non-current assets(1) Property, plant and equipment
Declining-balance method is adopted. However, for buildings (excluding attached equipments to buildings), attachedequipments to buildings and structures obtained after April 1, 2016, assets for rent, as well as part of tools, furniture andfixtures, the straight-line method is adopted. The useful lives for major assets are as follows.
Buildings and structures
3 – 38 years
Assets for rent
5 years
Machineries and equipments
7 years
Vehicles2 – 6 years
Tools, furniture and fixtures 2 – 20 years(2) Intangible assets
The straight-line method was adopted. Software for internal use is amortized using the straight-line method over theestimated useful lives (within five years)
SoftwarePatent rights

3 – 5 years
8 years(iii) Criteria for allowances
Allowance for doubtful accounts:
To provide for losses incurred through bad debts, the amount of potential loss in calculated by using the historical loss ratio incase 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 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 on the consolidated balance sheet date, and the exchange differences are scored as profits/losses. Assets andliabilities of subsidiaries outside of Japan are translated into Japanese yen at the spot exchange rates in effect on thebalance sheet date; their earnings and expenses are translated into Japanese yen at the average rate during the period; andthe exchange differences are included in foreign currency translation adjustment and non-controlling interest 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 directedly posted in net assets.
9(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.
(Notes to consolidated balance sheet)
1. Accumulated depreciation deducted directly from the assets
Property, plant and equipment¥ 2,293,782 thousand

Amount stated above includes accumulated impairment losses
2. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
¥ 631,457 thousand¥ 144,555 thousand¥ 189,458 thousand¥ 95,744 thousand¥ 14,174 thousand
3. Overdraft agreement
The Company has entered overdraft agreements with banks that the Company has transactions with, in order to efficiently
fund ongoing operations. Balance of unused line of credit based on the overdraft agreements as of the end of thisconsolidated fiscal year is written below.
Maximum limit of total line of credit
Balance of used line of credit
Balance of unused line of credit¥ 900,000 thousand－¥ 900,000 thousand

10(Notes to consolidated statements of changes in equity)
1. Total number and class of the issued shares within the consolidated fiscal year under review
Number of shares issued
as of April 1, 2017

Increase

Number of shares issued
As of March 31, 2017

Decrease

Issued shares
Common Shares

137,347,609－－

Class B Shares

77,700,000－－

77,700,000－－

215,047,609

Total

215,047,609

137,347,609

2. Number and a class of shares to be issued upon exercise of stock acquisition rights(excluding stock acquisition rights of which the commencement date of exercise period has not yet arrived)
Common Shares: 7,800 Shares(Notes related to financial instruments)
1. Matters related to the status of financial instruments(i) Company policy for financial instruments
The Group invests cash surpluses, if any only in low risk financial assets. The Group obtains financing by the issuance ofbonds and, if necessary, borrowings from banks. The Group does not intend to engage in derivative transactions.
(ii) Nature and extent of risks embedded with financial instruments
The Group is exposed to customer credit risks of receivables such as trade accounts and other.
Payment terms of payables, such as trade accounts, are less than a month.
With regard to marketable and investment securities, which mainly consist of stocks, held-to-maturity bonds and money
trusts, the Group is exposed to credit risk of the issuers.
(iii) Risk management for financial instruments
The Company manages credit risk in accounts receivable-trade based on its Credit Management Policy. The Company
attempts to mitigate default risk of all customers due to deteriorated credit standing by monitoring payment status andexposure balances.
With regard to marketable securities and investment securities, the Company regularly monitors financial conditions andother parameters of the issuers of these securities.
(iv) 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, anotherrational valuation technique is used instead. Since various assumptions and factors are reflected in estimating the fair value,
different assumptions and factors could result in different fair value.

112. Matters related to the fair value of financial instrument
Balance sheet amounts and fair values of financial instrument and their differences as of March 31, 2018 are as follows.
(Unit: Thousands of yen)Amount indicated in the
consolidated balance sheet

Fair value

Differences(i) Cash and bank balances

6,820,464

6,820,464－(ii) Accounts receivable - trade363,222363,222－

23,999,977

23,999,977－

23,991

23,991－(iii) Securities(iv) Accounts receivable - other

31,207,656

31,207,656－(i) Accounts payable - trade

53,03353,033－(ii) Income taxes payable

124,763

124,763－

Total liabilities

177,797

177,797－

Total assets（Notes）(1) Method of calculating the fair value of the financial instrument
Assetsa) cash and bank balances, b) accounts receivable- trade, c) securities, d) accounts receivable- other
The book values are used as the fair values of the items above, as the book values approximate the fair values due to their settlements or
maturities in a short period of time.
a) accounts payable - trade, b) income taxes payable
The book values are used as the fair values of the items above, as the book values approximate the fair values due to their settlements in ashort period of time.
(2) Financial instruments for which fair value determination is extremely difficult(Unit: Thousands of yen)
Items

Amounts indicated in the consolidated balance sheet

Shares of subsidiaries and affiliates

458,011

Investments in capital of subsidiaries and affiliates

2,957

Investment securities

2,314,159

The above items do not have market prices, and determination of their fair values is therefore extremely difficult. As such, the items are excluded from "assets".

12(Notes to per- share data)
1. Net assets per share …………………………………………………………………………¥212.04(Note)Net assets per share are calculated ased on the following¥45,630,039 thousand

Total net assets¥31,123 thousand

Amount deducted from total net assets
Net assets at end of year pertaining to Common Shares and shares equivalent to Common Shares
Number of Common Shares and shares equivalent to Common
Shares that is used in calculation of net assets per share¥45,598,916 thousand
215,047,471 shares

2. Net loss per share……………………………………………………………………………¥(2.75)(Note)Net loss per share are calculated ased on the following¥(591,185) thousand

Net loss attributable to CYBERDYNE
Amount not available for Common Shareholders and shareholders equivalent to Common Shareholders-

Net loss attributable to common shares and shares equivalent to Common Shares¥(591,185) thousand

Average number of Common Shares and sharesequivalent to Common Shares during the period

215,047,471 shares

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

13

Non-consolidated financial statements
Statement of changes in shareholders' equity (from April 1, 2017 to March 31, 2018)(Unit: Thousands of yen)
Shareholders' equity
Capital surplus
Capital stock

Legal capitalsurplusRetained earnings
Legal retained
earnings

Total capitalsurplus

Other retained
earnings
Retained earnings
brought forward

Total retained
earnings

26,743,881

26,679,881

26,679,881

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

－

－

－

－

(529,186)(529,186)

Net changes in items otherthan shareholders' equity

－

－

－

－

－

－

Total changes of items
during year

－

－

－

－

(529,186)(529,186)

Balance at end of year

26,743,881

26,679,881

26,679,881

30(7,599,828)(7,599,798)

Balance at beginning of year
Change of items during year
Net loss

Shareholders' equity

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

StockacquisitionrightsTotal net assets

Treasury shares

Total shareholders'equity(204)

46,352,944

8,966

8,966

12,46846,374,379－(529,186)－－－(529,186)

Net changes in items otherthan shareholders' equity－－(8,288)(8,288)

6,635(1,652)

Total changes of items
during year－

(529,186)(8,288)(8,288)6,635(530,838)

Balance at end of year

(204)

45,823,758

677

677

19,10345,843,540

Balance at beginning of year
Change of items during year
Net loss(Rounded down to the closest thousands of yen)14

Notes to non-consolidated financial statements(Important items that form the basis for preparing "non-consolidated 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 some of the buildings (excluding accessories), property,
plant and equipment obtained after April 1, 2016, assets for rent, as well as part of tools, furniture andfixtures, straight-line 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 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.
(Notes to non-consolidated balance sheet)
1. Accumulated depreciation deducted directly from the assets
Property, plant and equipment¥ 2,282,301 thousand

Amount stated above includes accumulated impairment losses
2. Reduction entry deducted from the acquisition cost due to government subsidy, etc.
Buildings
Machinery & equipment¥ 631,457 thousand¥ 144,555 thousand¥ 189,458 thousand

Tools, furniture & fixtures
Land
Software‌¥ 95,744 thousand¥ 14,174 thousand16

3. 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–¥ 900,000 thousand

Short-term money claims¥ 216,820 thousand

Short-term money liabilities¥ 26,121 thousand(Notes to non consolidated statement of income)Net sales¥ 56,696 thousand

Other operating transaction¥ 38,758 thousand

Transaction amount other than business transactions¥ 8,546 thousand(Notes to statement of changes in shareholders' equity)
Number of treasury shares as of the end of business year ended March 31, 2018
Common Share138 Shares(Notes to tax effect accounting)
The deferred tax liabilities are mainly due to retirement costs for asset retirement obligations.

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(Notes to per- share data)
1. Net assets per share …………………………………………………………………………¥213.09(Note)Net assets per share are calculated ased on the following¥45,843,540 thousand

Total net assets
Amount deducted from total net assets¥19,103 thousand

Net assets at end of year pertaining to Common Shares and shares equivalent to Common Shares
Number of Common Shares and shares equivalent to Common
Shares that is used in calculation of net assets per share¥45,824,436 thousand
215,047,471 shares

2. Net loss per share……………………………………………………………………………¥(2.46)(Note)Net loss per share are calculated ased on the following
Net loss¥(529,186) thousand

Amout not available for Common Sahreholders and shareholders equivalent to Common Shareholders–

Net loss attributable to common shares and shares equivalent to Common Shares¥(529,186) thousand

Average number of Common Shares and sharesequivalent to Common Shares during the period

215,047,471 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 inJapanese. Japanese original were audited by Deloitte Touche Tohmatsu LLC.

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