Please note that the following is an English translation of the original Japanese version, prepared
only for the convenience of shareholders residing outside Japan. In the case of any discrepancy
between the translation and the Japanese original, the latter shall prevail.
TAKEDA PHARMACEUTICAL COMPANY LIMITED (“TAKEDA”) HEREBY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THIS TRANSLATION, WHETHER
EXPRESS OR IMPLIED INCLUDING, BUT WITHOUT LIMITATION TO, ANY REPRESENTATIONS OR
WARRANTIES WITH RESPECT TO ACCURACY, RELIABILITY OR COMPLETENESS OF THIS
TRANSLATION. IN NO EVENT SHALL TAKEDA BE LIABLE FOR ANY DAMAGES OF ANY KIND OR
NATURE INCLUDING, BUT WITHOUT LIMITATION TO, DIRECT, INDIRECT, SPECIAL, PUNITIVE,CONSEQUENTIAL OR INCIDENTAL DAMAGES ARISING FROM OR IN CONNECTION WITH THIS
TRANSLATION.

Other items which are provided electronically
1. Notes to the Consolidated Financial Statements………………………………1

2. Notes to the Unconsolidated Financial Statements ………………………………22

Takeda Pharmaceutical Company Limited (the “Company”)-1-

CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements[Notes for Items that Form the Basis of Preparing Consolidated Financial Statements]

1. Accounting Standards of Consolidated Financial Statements
The consolidated financial statements are prepared in accordance with International Financial ReportingStandards ("IFRS"), in compliance with Article 120, Paragraph 1 of the Regulation on Corporate Accounting. In
compliance with the second sentence of the same paragraph, certain disclosures required under IFRS areomitted.
2. Scope of Consolidation(1) Number of consolidated subsidiaries:

169

Names of major consolidated subsidiaries:
Takeda Pharmaceuticals U.S.A., Inc., Dyax Corp., Baxalta US Inc., Biolife Plasma Services LP, Shire
Human Genetic Therapies, Inc., Takeda Manufacturing U.S.A., Inc., Takeda Pharmaceuticals International
AG, Takeda GmbH, Shire Pharmaceuticals International Unlimited Company, Shire Ireland Finance Trading
Limited, Takeda Canada Inc., Takeda (China) International Trading Co., Ltd.
(2) Increase and decrease of consolidated subsidiaries:
Increase :5 (due to acquisitions and establishment)

Decrease :16 (due to merger, liquidation and divestiture)

3. Application of the Equity Method(1) Number of associates accounted for using the equity method: 16(2) Increase and decrease of associates accounted for using the equity method:
Increase :4 (mainly due to a change in the ownership ratio)

Decrease :5 (mainly due to a change in the ownership ratio)

4. Material Accounting Policies(1) Valuation Standards and Methods for Major Assets (excluding Financial Instruments)
1) Property, Plant and Equipment
Property, plant and equipment are measured using the cost model and is stated at cost less accumulated
depreciation and accumulated impairment loss. Acquisition cost includes mainly the costs directly
attributable to the acquisition and the initial estimated dismantlement, removal, and restoration costs
associated with the asset.
2) Goodwill
Goodwill arising from business combinations is stated at its cost less accumulated impairment losses.
Goodwill is not amortized. Goodwill is allocated to cash-generating units or groups of cash-generating units
based on expected synergies and tested for impairment annually and whenever there is any indication of
impairment. Impairment losses on goodwill are recognized in the consolidated statements of profit or loss
and no subsequent reversal will be made.
3) Intangible Assets
Intangible assets are measured by using the cost model and are stated at cost less accumulated
amortization and accumulated impairment losses.
Takeda enters into collaboration and in-license agreements with third parties for products and compounds
for research and development projects. Payments for collaboration agreements generally take the form ofsubsequent development milestone payments. Payments for in-license agreements generally take the formof up-front payments and subsequent development milestone payments.
Up-front payments for in-license agreements are capitalized upon commencement of the in-license
agreements, and development milestone payments are capitalized when the milestone is achieved.

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If and when Takeda obtains approval for the commercial application of a product in development, therelated in-process research and development assets will be reclassified to intangible assets associatedwith marketed products and amortized over its estimated useful life from marketing approval.
4) Impairment of Non-financial Assets
Takeda assesses whether there is any indication of impairment for non-financial assets at the end of eachreporting period, excluding inventories, deferred tax assets, assets held for sale, and assets arising from
employee benefits.
If any such indication exists, or in cases in which an impairment test is required to be performed each year,
the recoverable amount of the asset is estimated. In cases in which the recoverable amount cannot be
estimated for each asset, they are estimated at the cash-generating unit level.
The recoverable amount of an asset or a cash-generating unit is determined at the higher of its fair valueless cost of disposal, or its value in use. In determining the value in use, the estimated future cash flows
are discounted to their present value using a discount rate that reflects the time value of money and therisks specific to the asset.
If the carrying amount of the asset or cash-generating unit exceeds the recoverable amount, impairment
loss is recognized in profit or loss and the carrying amount is reduced to the recoverable amount.
An asset or a cash-generating unit other than goodwill, for which impairment losses were recognized inprior years, is assessed at the end of the reporting period to determine whether there is any indication thatthe impairment loss recognized in prior periods may no longer exist or may have decreased. If any such
indication exists, the recoverable amount of the asset or cash-generating unit is estimated. In cases inwhich the recoverable amount exceeds the carrying amount of the asset or cash-generating unit, theimpairment loss is reversed up to the lower of the estimated recoverable amount or the carrying amountthat would have been determined if no impairment loss had been recognized in prior years. The reversal of
impairment loss is immediately recognized in profit or loss.
5) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories isdetermined mainly using the weighted-average cost formula. The cost of inventories includes purchasecosts, costs of conversion, and other costs incurred in bringing the inventories to the present location andcondition. Net realizable value is the estimated selling price in the ordinary course of business less theestimated costs of completion and the estimated costs necessary to make the sale.
(2) Depreciation and Amortization Methods of Assets
1) Property, Plant and Equipment
Except for assets that are not subject to depreciation, such as land and construction in progress, assets
are depreciated mainly using the straight-line method over the estimated useful life of the asset. Right-ofuse assets are depreciated using the straight-line method over the shorter of the lease term or theestimated useful life unless it is reasonably certain that Takeda will obtain ownership by the end of thelease term. The depreciation of these assets begins when they are available for use.
The estimated useful life of major asset items is as follows:
Buildings and structures
3 to 50 years
Machinery and vehicles
2 to 20 years
Tools, furniture and fixtures 2 to 20 years
2) Intangible Assets
An intangible asset associated with a product (an intangible asset associated with a marketed product) isamortized on a straight-line basis over the estimated useful life, which is based on expected patent life,
and/or other factors depending on the expected economic benefits of the asset, ranging from 3 to 20 years.
Software is amortized on a straight-line basis over the expected useful life. The useful life used for thispurpose is 3 to 10 years.
(3) Valuation Standards and Methods for Financial Instruments
1) Financial Assets(i) Initial Recognition and Measurement•

Investments in debt instruments measured at amortized cost: Assets such as trade and otherreceivables that are held within a business model whose objective is to hold financial assets in order
to collect contractual cash flows and whose contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding aremeasured at amortized cost. Trade receivables are initially recognized at their invoiced amounts,-3-

including any related sales taxes less adjustments for estimated deductions such as impairment loss
allowance and cash discounts.
•

Investments in debt instruments measured at fair value through other comprehensive income("FVTOCI"): Assets that are held within a business model objective whose objective is achieved byboth collecting contractual cash flows and selling financial assets whose contractual terms give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amountoutstanding are measured at FVTOCI.

•

Investments in debt Instruments measured at fair value through net profit or loss ("FVTPL"): Assetsthat do not meet the criteria for amortized cost or FVTOCI are measured at FVTPL.

•

Equity instruments measured at FVTOCI: On initial recognition, Takeda makes an irrevocable FVTOCI
election (on an instrument-by-instrument basis) to present the subsequent changes in the fair value ofequity instruments in other comprehensive income for certain equity instruments held for the long term
for strategic purposes. At the reporting date, Takeda designates all of its equity instruments asfinancial assets measured at FVTOCI.

(ii) Subsequent Measurement and Derecognition•

Investments in debt Instruments measured at amortized cost: These assets are subsequently
measured at amortized cost using the effective interest method. The amortized cost is reduced by
impairment losses. Interest income, foreign exchange gains and losses and impairment arerecognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

•

Investments in debt instruments measured at FVTOCI: These assets are subsequently measured atfair value. Interest income calculated using the effective interest method, foreign exchange gains andlosses and impairment are recognized in profit or loss. Other net gains and losses arising fromchanges in fair value are recognized in other comprehensive income. Upon derecognition of theinvestments, the gains and losses accumulated in other comprehensive income related to theinvestments are reclassified to profit or loss.

•

Investments in debt instruments measured at FVTPL: These assets are subsequently measured atfair value, and a gain or loss on debt instruments that is subsequently measured at FVTPL isrecognized in net profit or loss.

•

Equity Instruments measured at FVTOCI: These assets are subsequently measured at fair value.
Dividends are recognized as income in profit or loss unless the dividend clearly represents a recoveryof part of the cost of the investment. Other net gains and losses are recognized in othercomprehensive income and are never reclassified to profit or loss. Upon derecognition of theinvestments, the amounts in other comprehensive income related to the investments are reclassified
within equity to retained earnings.

(iii) Impairment
Loss allowances for trade receivables are established using an Expected Credit Loss ("ECL") model. The
provisions are based on a forward-looking ECL, which includes possible default events on the tradereceivables over the entire holding period of the trade receivables. Takeda has elected to measureprovisions for trade receivables, contract assets, and lease receivables at an amount equal to lifetime
ECL. Takeda uses a provisions matrix based on historical loss rates adjusted for forward looking
information to calculate ECL. These provisions represent the difference between the contractual amountof the trade receivables, contract assets, and the lease receivables in the consolidated statements offinancial position and the estimated collectible net amount.
2) Financial Liabilities(i) Initial Recognition and Measurement
Financial liabilities are recognized in the consolidated statements of financial position when Takeda
becomes a party to the contract of financial instruments. Financial liabilities are classified, at initialrecognition, as financial liabilities measured at FVTPL, bonds and loans, or payables.
Financial liabilities, except for those measured at FVTPL, are initially measured at fair value lesstransaction costs that are directly attributable to the issuance.
(ii) Subsequent Measurement•

Financial liabilities measured at FVTPL: Financial liabilities measured at FVTPL are subsequently
measured at fair value, and any gains or losses arising on re-measurement are recognized in profit orloss. Financial liabilities measured at FVTPL include derivatives and the financial liabilities associatedwith contingent consideration arrangements .

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•

Other financial liabilities, including bonds and loans: Other financial liabilities are measured atamortized cost mainly using the effective interest method.

(iii) Derecognition
Takeda derecognizes a financial liability only when the obligation specified in the contract is discharged,
canceled, or expires. On derecognition of a financial liability, the difference between the carrying amountand the consideration paid or payable is recognized in profit or loss.
3) Derivatives
Takeda hedges the risks arising mainly from its exposure to fluctuations in foreign currency exchange rates
and interest rates using derivatives such as foreign exchange forward contracts, currency options, interest
rate swaps, cross currency interest rate swaps and interest rate future. In addition, Takeda hedges the risks
arising from its exposure to fluctuations in prices of renewable energy using forward contracts. Takeda
does not enter into derivative transactions for trading or speculative purposes. Derivatives are measured at
FVTPL unless the derivative contracts are designated as hedging instruments. The gains and losses onderivatives that are not designed as hedging instruments are recognized in profit or loss.
4) Hedge Accounting
For foreign currency exposure as a result of translation risk, Takeda designates certain non-derivatives,
such as foreign currency denominated debt and certain derivatives such as foreign currency forwards, as
net investment hedges of foreign operations. For foreign currency exposure due to foreign currency
denominated transactions, Takeda designates certain derivatives, such as foreign currency forwards,
currency options and cross currency interest rate swaps, as cash flow hedges of forecasted transactions.
For interest risk exposure, Takeda designates derivatives such as interest and cross currency interest rate
swaps and forward rate agreements, as cash flow hedges of forecasted transactions. Within thedesignation documentation at inception, Takeda documents the risk management objective, nature of therisk being hedged, and relationship between hedging instruments and hedged risk based on the strategy
for undertaking the hedging relationships. At inception and on a quarterly basis, Takeda also assesses
whether the hedging instruments are highly effective in offsetting changes in the hedged transactions or net
investment.
•

Cash flow hedges: the effective portion of changes in the fair value of derivatives designated andqualifying as cash flow hedges is recognized in other comprehensive income. The gain or loss relating
to the ineffective portion is recognized immediately in profit or loss. The cumulative gain or loss thatwas previously recognized in other comprehensive income is reclassified to profit or loss in the same
period when the cash flows of the hedged items are recognized in profit or loss and in the same line
item in the consolidated statements of profit or loss. The currency basis spread and the time value ofthe foreign currency options are accounted for and presented as hedging cost under othercomponents of equity separately from cash flow hedges.

•

Net investment hedges in foreign operations: the gain or loss on hedging instruments in foreign
operations is recognized in other comprehensive income. At the time of disposal of the foreign
operations, the cumulative gain or loss recognized in other comprehensive income is reclassified to
profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised,or when the hedge no longer qualifies for hedge accounting.
(4) Provisions
Takeda recognizes rebates and return reserves if Takeda receives consideration from a customer andexpects to refund some or all of that consideration to the customer.
In addition, Takeda recognizes provisions when Takeda has present legal or constructive obligations as aresult of past events, it is probable that outflows of resources embodying economic benefits will be required
to settle the obligations and reliable estimates can be made of the amount of the obligations.
Takeda’s provisions consist primarily of rebates and return reserves, as well as provisions for litigation andrestructuring.
1) Rebates and Return Reserves
Takeda has recognized a provision related mainly to sales rebates and returns for products andmerchandises, including for U.S. government health programs such as the U.S. Medicaid Drug Rebate
Program, the U.S. Medicare Part-D Rebate Program and the U.S. Commercial Managed Care Program.
2) Provisions for Litigation
Provisions for litigation are recorded, after taking appropriate legal and other specialist advice, where an
outflow of resources is considered probable and a reliable estimate can be made of the likely outcome of-5-the dispute. For certain product liability claims, Takeda will record a provision where there is sufficienthistory of claims made and settlements to make a reliable estimate of the provision required to coverunasserted claims.
3) Provisions for Restructuring
Takeda establishes a provision for restructuring costs when it has developed a detailed formal plan for the
restructuring and, through an execution of the plan or an announcement of its main features to thoseaffected by it, a valid expectation has been raised in those affected by the plan that the plan will be
implemented. Takeda records the provision and associated expenses based on estimated costs
associated with the plan.
(5) Post-Employment Benefit
Takeda sponsors lump-sum payments on retirement, pensions and other plans such as post- retirement
medical care as post- employment benefit plans. They are classified into defined benefit plans and defined
contribution plans, depending on the characteristics of the plans.
1) Defined Benefit Plans
Takeda uses the projected unit credit method to determine the present value, the related current service
cost, and the past service cost by each defined benefit obligation. The discount rate is determined byreference to market yields on high quality corporate bonds at the end of the reporting period. The net
defined benefit liabilities (assets) in the consolidated statements of financial position are calculated bydeducting the fair value of the plan assets from the present value of the defined benefit obligations. If thedefined benefit plan has a surplus, the net defined benefit asset is limited to the present value of any future
economic benefits available in the form of refunds from the plan or reductions in future contributions to theplan. Past service cost defined as the change in the present value of the defined benefit obligation resulting
from a plan amendment or curtailment is recognized in profit or loss upon occurrence of the planamendment or curtailment.
Re-measurement of net defined benefit plans is recognized in full as other comprehensive income andtransferred to retained earnings in the period in which they are recognized.
2) Defined contribution plans
The costs for defined contribution plans are recognized as expenses when the employees render the
related service.
(6) Revenue and expenses(Revenue recognition)
Takeda’s revenue is primarily related to the sale of pharmaceutical products and is generally recognizedwhen control of the products is passed to the customer in an amount that reflects the consideration towhich Takeda expects to be entitled in exchange for those products. Control is generally transferred at the
point in time of shipment to or receipt of the products by the customer, or when the services are performed.
The amount of revenue to be recognized is based on the consideration Takeda expects to receive in
exchange for its goods or services. If a contract contains more than one contractual promise to a customer(performance obligation), the consideration is allocated based on the standalone selling price of eachperformance obligation. The consideration Takeda receives in exchange for its goods or services may be
fixed or variable. Variable consideration is only recognized to the extent it is highly probable that asignificant reversal will not occur.
Takeda’s gross sales are subject to various deductions, which are primarily composed of rebates anddiscounts to retail customers, government agencies, wholesalers, health insurance companies andmanaged healthcare organizations. These deductions represent estimates of the related obligations,requiring the use of judgment when estimating the effect of these sales deductions on gross sales for areporting period. These adjustments are deducted from gross sales to arrive at net sales. Takeda monitors
the obligation for these deductions on at least a quarterly basis and records adjustments when rebate
trends, rebate programs and contract terms, legislative changes, or other significant events indicate that achange in the obligation is appropriate. Historically, adjustments to rebate accruals have not been material
to net earnings. The United States (the “U.S.”) market has the most complex arrangements related torevenue deductions.
The following summarizes the nature of the most significant adjustments to revenue:•

U.S. Medicaid: The U.S. Medicaid Drug Rebate Program is administered by state governments usingstate and federal funds to provide assistance to certain qualifying individuals and families, who cannot
finance their own medical expenses. Calculating the rebates to be paid related to this program
involves interpreting relevant regulations, which are subject to challenge or change in interpretative
guidance by government authorities. Provisions for Medicaid rebates are estimated based upon
identifying the products subject to a rebate, historical experience, patient demand, product pricing and-6-the mix of contracts and specific terms in the individual state agreements. The provisions for Medicaid
rebates are recorded in the same period that the corresponding revenues are recognized; however,the Medicaid rebates are not fully paid until subsequent periods. There is often a time lag of several
months between Takeda recording the revenue deductions and Takeda’s final accounting for Medicaid
rebates. These expected product specific assumptions relate to estimating which of Takeda’s revenue
transactions will ultimately be subject to the U.S. Medicaid program.
•

U.S. Medicare: The U.S. Federal Medicare Program, which funds healthcare benefits to individualsage 65 or older and certain disabilities, provides prescription drug benefits under Part D section of the
program. This benefit is provided and administrated through private prescription drug plans.
Provisions for Medicare Part D rebates are calculated based on the terms of individual plan
agreements, patient demand, product pricing and the mix of contracts. The provisions for Medicare
Part D rebates are recorded in the same period that the corresponding revenues are recognized;
however, the Medicare Part D rebates are not fully paid until subsequent periods. There is often a time
lag of several months between Takeda recording the revenue deductions and Takeda’s final
accounting for Medicare Part D rebates. These expected product specific assumptions relate toestimating which of the Takeda’s revenue transactions will ultimately be subject to the U.S. Medicare
program.

•Customer rebates: Customer rebates including commercial managed care in the U.S. are offered topurchasing organizations, health insurance companies, managed healthcare organizations, and otherdirect and indirect customers to sustain and increase market share, and to ensure patient access to
Takeda’s products. Since rebates are contractually agreed upon, the related provisions are estimatedbased on the terms of the individual agreements, historical experience, and patient demand. The
provisions for commercial managed care rebates in the U.S. are recorded in the same period that thecorresponding revenues are recognized; however, commercial managed care rebates in the U.S. are
not fully paid until subsequent periods. There is often a time lag of several months between Takeda
recording the revenue deductions and Takeda’s final accounting for commercial managed carerebates in the U.S. These expected product specific assumptions relate to estimating which of
Takeda’s revenue transactions will ultimately be subject to the commercial managed care in the U.S.

•

Wholesaler chargebacks: Takeda has arrangements with certain indirect customers whereby thecustomer is able to buy products from wholesalers at reduced prices. A chargeback represents thedifference between the invoice price to the wholesaler and the indirect customer’s contractual
discounted price. Provisions for estimating chargebacks are calculated based on the terms of eachagreement, historical experience and product demand. Takeda has a legally enforceable right to set
off the trade receivables and chargebacks and it intends either to settle them on a net basis or to
realize the asset and settle the liability simultaneously. Thus the provision for chargebacks arerecorded as a deduction from trade receivables on the consolidated statements of financial position.

•

Return reserves: When Takeda sells a product providing a customer with the right to return, Takeda
records a provision for estimated sales returns based on its sales return policy and historical return
rates. Takeda estimates the proportion of recorded revenue that will result in a return by considering
relevant factors, including past product returns activity, the estimated level of inventory in the
distribution channel and the shelf life of products.

Because the amounts are estimated, they may not fully reflect the final outcome, and the amounts are
subject to change dependent upon, amongst other things, expected product specific assumptions used inestimating which of Takeda’s revenue transactions will ultimately be subject to the respective programs.
Takeda generally receives payments from customers within 90 days after the point in time when goods aredelivered to the customers. Takeda usually performs those transactions as a principal, but Takeda also
sells products on behalf of others in which case revenue is recognized at an amount of sales commissionthat Takeda expects to be entitled as an agent.
Takeda also generates revenue in the form of royalty payments, upfront payments, and milestone
payments from the out-licensing and sale of intellectual property (“IP”). Royalty revenue earned through alicense is recognized when the underlying sales have occurred. Revenue from upfront payment is generally
recognized when Takeda provides a right to use IP. Revenue from milestone payments is recognized at the
point in time when it is highly probable that the respective milestone event criteria is met, and a significant
reversal in the amount of revenue recognized will not occur. Revenue from other services such as R&D ofcompounds that are out-licensed is recognized over the service period.
Takeda generally receives payments from customers within 60 days after entering into out-licensing
contracts or confirmation by customers that conditions for the milestone payments are met. Takeda
licenses its own intellectual property rights to customers and performs those transactions as a principal.
Takeda also provides other services as a principal or an agent.

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Takeda identifies a contract modification in case of a change in the scope or price (or both) of a contract. If
a contract modification is not accounted for as a separate contract, both of the revenue recognized before
and after contract modification is presented in the same categories of the disaggregation of revenue
information.
(7) Other Significant Accounting Policies for the Consolidated Financial Statements(Stated Amount)
All amounts shown are rounded to the nearest million Japanese Yen ("JPY").
[Notes for Changes in Accounting Policies]
During the year ended March 31, 2024, Takeda has adopted the following new accounting standards andinterpretations:(The Adoption of IAS 12 Income Taxes)
On May 23, 2023, amendments to IAS 12 Income Taxes (“IAS12”) were issued to clarify requirements relating to
the International Tax Reform - Pillar Two model rules. As required by the amended IAS12, Takeda adopted
immediately and retrospectively the exception to neither recognize nor disclose information about deferred tax
assets and liabilities related to Pillar Two model rules. The amended IAS12 requirements to provide new
disclosures regarding the exposure of Pillar Two model rules to the consolidated financial statements have been
incorporated starting from the fiscal year ended March 31, 2024. Takeda has performed an assessment of its
potential exposure to Pillar Two income taxes based on the most recent tax filings, country-by-country reportingand financial statements for the constituent entities in the group. Based on this assessment, Takeda expects thatthe top-up tax related to Pillar Two will only arise in a limited number of jurisdictions and the amount of additional
tax charge will not be material.
[Notes for Accounting Estimates and Assumptions]
The items which were recorded on the consolidated financial statements as of this fiscal year end using
accounting estimates or assumptions and could have a material impact on the consolidated financial statements
as of March 31, 2025 are described below.
Provisions for Contractual and Statutory Rebates Payable under Commercial Healthcare Provider Contracts andU.S. State and Federal Government Health Programs JPY 253,832 million.
In order to estimate provisions for contractual and statutory rebates payable under Commercial healthcare
provider contracts and U.S. state and Federal government health programs such as U.S. Medicaid as well as
U.S. commercial managed care programs, expected product specific assumptions are used in estimating whichof Takeda’s revenue transactions will ultimately be subject to the respective programs. The change in the
product specific assumptions could have a significant impact on the amount of provisions to be recorded on the
consolidated financial statements as of March 31, 2025.
Goodwill JPY 5,410,067 million, Intangible Assets JPY 4,274,682 million
Goodwill and Intangible assets are generally considered impaired when their balance sheet carrying amountexceeds their estimated recoverable amount. The recoverable amount of an intangible asset is estimated foreach individual asset or at the larger cash generating unit (CGU) level when cash is generated in combination
with other assets. Takeda's cash generating units or group of cash generating units are identified based on thesmallest identifiable group of assets that generate independent cash inflows. Goodwill is tested for impairment at
the single operating segment level (one CGU), which is the level at which goodwill is monitored for internalmanagement purpose. The estimation of the recoverable value requires us to make a number of assumptions
including:• amount and timing of projected future cash flows;• behavior of competitors (launch of competing products, marketing initiatives, etc.);• probability of obtaining regulatory approvals;• future tax rates;• terminal growth rate; and• discount rate.
The significant assumptions used in estimating the amount and timing of future cash flows are the probability oftechnical and regulatory success related to in-process research and development (IPR&D) projects and thesales forecast of the products. The sales forecast related to certain products is one of the significant
assumptions used in estimating the recoverable amount of goodwill. Events that may result in a change in the-8-assumptions include IPR&D projects that are not successfully developed, fail during development, areabandoned or subject to significant delay or do not receive the relevant regulatory approvals, and/or lower sales
projections of certain commercially marketed products typically due to launch of newly competing products, andsupply constraints. If these events were to occur, Takeda may not recover the value of the initial or subsequent
R&D investments made subsequent to acquisition of the asset project nor realize the future cash flows that
Takeda has estimated. These events could have a significant impact on the amount of goodwill and intangible
assets to be recorded on the consolidated financial statements as of March 31, 2025.
Provision for Litigation JPY 22,342 million
The factors Takeda considers in developing the provision for litigation and other contingent liability amounts
include the merits and jurisdiction of the litigation, the nature and the number of other similar current and past
litigation cases, the nature of the product and the current assessment of the science subject to the litigation, andthe likelihood of settlement and current state of settlement discussions, if any. In addition, Takeda records aprovision for product liability claims incurred, but not filed, to the extent Takeda can formulate a reasonableestimate of their costs based primarily on historical claims experience and data regarding product usage. In
cases Takeda may become involved in significant legal proceedings for which it is not possible to make areliable estimate of the expected financial effect, if any, which may result from ultimate resolution of theproceedings, no provision is recognized for such cases. The estimates of these provisions and contingent
liabilities are dependent upon the outcome of litigation proceedings, investigations and possible settlement
negotiations, and therefore could have a significant impact on the amount of provisions to be recorded on the
consolidated financial statements as of March 31, 2025.
Income Taxes Payable JPY 109,906 million, Deferred Tax Assets JPY 393,865 million
Takeda prepares and files the tax returns based on an interpretation of tax laws and regulations, and records
estimates based on these judgments and interpretations. In the normal course of business, Takeda’s tax returns
are subject to examination by various tax authorities, which may result in additional tax, interest or penalty
assessment by these authorities. Inherent uncertainties exist in estimates of many uncertain tax positions due tochanges in tax law resulting from legislation, regulation, and/or as concluded through the various jurisdictions’tax court systems. When Takeda concludes that it is not probable that a tax authority will accept an uncertain tax
position, Takeda recognizes the best estimate of the expenditure required to settle a tax uncertainty. The amountof unrecognized tax benefits is adjusted for changes in facts and circumstances. For example, adjustments
could result from significant amendments to existing tax law, the issuance of regulations or interpretations by the
tax authorities, new information obtained during a tax examination, or resolution of a tax examination. These
adjustment could have a significant impact on the amount of income tax payable to be recorded on the
consolidated financial statements as of March 31, 2025.
Takeda also assesses deferred tax assets to determine the realizable amount at the end of each period. In
assessing the recoverability of deferred tax assets, Takeda considers the scheduled reversal of taxable
temporary differences, projected future taxable profits, and tax planning strategies. Future taxable profits
according to profitability are estimated based on Takeda’s business plan. The change in judgment upondetermining the revenue forecast related to certain products used for Takeda’s business plan could have asignificant impact on the amount of the deferred tax assets to be recorded on the consolidated financial
statements as of March 31, 2025.
Provisions for Restructuring JPY 12,102 million
Takeda incurs restructuring costs associated with planned initiatives to reduce the costs. Takeda’s mostsignificant restructuring costs are severance payments. Takeda establishes a provision for restructuring costs
when it has developed a detailed formal plan for the restructuring and, through an execution of the plan or anannouncement of its main features to those affected by it, a valid expectation has been raised in those affectedby the plan that the plan will be implemented. The recognition of restructuring provision requires estimates
including timing of payments and the number of individuals impacted by the restructuring. As a result of theseestimates, the actual restructuring costs may differ from the estimates, and therefore the difference, if any, could
have a significant impact on the amount of the provisions to be recorded on the consolidated financial
statements as of March 31, 2025.
[Additional Information]
In March 2024, the Board of Directors approved the issuance of subordinated JPY Hybrid Bonds (“the 2nd Hybrid
Bonds”) with a maturity of up to 60 years in the form of a public offering in Japan. The proceeds of the 2nd Hybrid
Bonds will be used to replace the 1st Hybrid Bonds of JPY 500 billion that were issued on June 6, 2019, with any
shortfall on the replacement value being delivered by the proceeds of appropriately approved Hybrid Loans-9-containing similar terms to the 2nd Hybrid Bonds. The 2nd Hybrid Bonds are expected to be priced and issued in
mid-2024 subject to market conditions and investor demand.
[Notes on Consolidated Statement of Profit or Loss]

Amortization and Impairment Losses on Intangible Assets Associated with Products
The impairment losses were JPY 130,592 million, which primarily include JPY 73,979 million impairment
charges for ALOFISEL (for complex Crohn's perianal fistulas) following topline results of phase 3 ADMIRE-CD II
trial and JPY 28,477 million impairment charges for EXKIVITY (for the treatment of non-small cell lung cancer)
following a decision to initiate a voluntary withdrawal globally, and impairment charges for certain assets related
to in-process R&D assets including those related to TAK-007 and modakafusp alfa (TAK-573) in Oncology as
results of decisions to terminate those programs. These impairment charges were partially offset by a reversal of
impairment loss in an amount of JPY 35,686 million related to the approval of EOHILIA, therapy eosinophilicesophagitis (EoE), by U.S. Food and Drug Administration (FDA) in February 2024.
Other Operating Expenses
Other operating expenses were JPY 206,527 million, which included the restructuring expenses of JPY 81,358
million, additional losses recorded for the supply agreement litigation with AbbVie, Inc. ("AbbVie") of JPY 26,405
million in the fiscal year ended March 31, 2024 and loss from changes in the fair value of financial assets andliabilities associated with contingent consideration arrangements primarily from XIIDRA and EOHILIA of JPY
20,755 million.
Income Tax Benefit
Takeda recorded income tax benefit of JPY 91,406 million. Shire received a tax assessment from the Irish
Revenue Commissioners (“Irish Revenue”) on November 28, 2018 for EUR 398 million. This assessment relates
to the tax treatment of the USD 1,635 million break fee Shire received from AbbVie in connection with theterminated offer to acquire Shire made by AbbVie in 2014. Shire was acquired by Takeda in January 2019.
Takeda appealed the assessment to the Tax Appeals Commission (“TAC”) and the appeal was heard by the TAC
in late 2020. On July 30, 2021, Takeda received a ruling on the matter from the TAC, with the TAC ruling in favorof the Irish Revenue and recorded an income taxes payable for the case. Subsequently, on October 17, 2023,
Takeda agreed with the Irish Revenue to settle the tax assessment for EUR 130 million including interest andwithout penalties, as a full and final settlement of all liabilities in relation to the receipt of the break fee. As aresult, Takeda reversed its income taxes payable in excess of the settlement amount of EUR 130 million andrecorded JPY 63,547 million reduction to tax expenses for the fiscal year ended March 31, 2024. Takeda madea payment in the settlement in the fiscal year ended March 31, 2024. The tax reduction described above andR&D and Orphan Drug Credits were offset by the tax charges from legal entity restructuring.
[Notes on Consolidated Statement of Financial Position]
1. Accumulated Depreciation on Assets (including Accumulated Impairment Losses)
Property, plant and equipment

JPY 1,220,701 million

Investment property

JPY 13,689 million

2. Impairment Loss Allowance Directly Deducted from Trade and Other Receivables
Trade and other receivables

JPY 8,376 million

3. Contingent Liabilities
Litigation
Takeda is involved in various legal and administrative proceedings. The most significant matters aredescribed below.
Takeda may become involved in significant legal proceedings for which it is not possible to make areliable estimate of the expected financial effect, if any, which may result from ultimate resolution of theproceedings. In these cases, appropriate disclosures about such cases would be included in this note,
but no provision would be made for the cases.
With respect to each of the legal proceedings described below, other than those for which a provision
has been made, Takeda is unable to make a reliable estimate of the expected financial effect at thisstage. This is due to a number of factors, including, but not limited to, the stage of proceedings, theentitlement of parties to appeal a decision, if any, and lack of clarity as to the merits of theories of liability,
the merits of Takeda’s defenses, the amount and recoverability of damages and/or governing law.
- 10 -

Takeda does not believe that information about the amount sought by the plaintiffs, if that is known, is,by itself, meaningful in every instance with respect to the outcome of those legal proceedings.
Legal expenses incurred and charges related to legal claims are recorded in selling, general andadministrative expenses. Provisions are recorded, after taking appropriate legal and other specialist
advice, where an outflow of resources is considered probable and a reliable estimate can be made ofthe likely outcome of the dispute. The factors Takeda considers in developing a provision include themerits and jurisdiction of the litigation, the nature and the number of other similar current and past
litigation, the nature of the product and the current assessment of the science subject to the litigation,and the likelihood of settlement and current state of settlement discussions, if any. As of March 31, 2024,
Takeda’s aggregate provisions for legal and other disputes were JPY 22,342 million. The ultimate
liability for legal claims may vary from the amounts provided and is dependent upon the outcome of
litigation proceedings, investigations and possible settlement negotiations. Unless otherwise statedbelow, Takeda is unable to predict the outcome or duration of these matters at this time.
Takeda’s position could change over time, and, therefore, there can be no assurance that any losses
that result from the outcome of any legal proceedings will not exceed, by a material amount, the amountof the provisions reported in these consolidated financial statements. Matters that were previously
disclosed may no longer be reported because, as a result of rulings in the case, settlements, changes inour business or other developments, in our judgment, they are no longer material to our financial
condition or operating results.
Product Liability and Related Claims
Pre-clinical and clinical trials are conducted during the development of potential products to determine
the safety and efficacy of products for use by humans following approval by regulatory bodies.
Notwithstanding these efforts, when drugs and vaccines are introduced into the marketplace,unanticipated safety issues may become, or be claimed by some to be, evident. Takeda is currently adefendant in a number of product liability lawsuits related to its products. For the product liability
lawsuits and related claims, other than those for which a provision has been made, Takeda is unable to
make a reliable estimate of the expected financial effect at this stage.
Takeda’s principal pending legal and other proceedings are disclosed below. The outcomes of theseproceedings are not always predictable and can be affected by various factors. For those legal andother proceedings for which it is considered at least reasonably possible that a loss has been incurred,
Takeda discloses the possible loss or range of possible loss in excess of the recorded loss contingency
provision, if any, where such excess is both material and estimable.
ACTOS Economic Loss Cases
Takeda has been named in ACTOS-related lawsuits brought by plaintiffs who do not assert any claims
for personal injuries. Instead plaintiffs claim they suffered an economic loss by paying for ACTOS
prescriptions that allegedly would not have been written had Takeda provided additional information
about the alleged risks of bladder cancer associated with ACTOS in its US product label. A putativeclass of third party payors and consumers brought suit against Takeda in the U.S. District Court for theCentral District of California.
Proton Pump Inhibitor (“PPI”) Product Liability Claims
As of March 31, 2024, more than 6,100 product liability lawsuits related to the use of PREVACID and
DEXILANT have been filed against Takeda in U.S. federal and state courts. Most of these cases are
pending in U.S. federal court and are consolidated for pre-trial proceedings in a multi-district litigation infederal court in New Jersey. The plaintiffs in these cases allege they developed kidney injuries or, insome cases, gastric cancer as a result of taking PREVACID and/or DEXILANT, and that Takeda failed toadequately warn them of these potential risks. Similar cases were filed against other manufacturers of
drugs in the same PPI class as Takeda’s products, including AstraZeneca plc (“AstraZeneca”), Procter &Gamble Company (“Procter & Gamble”) and Pfizer Inc. (“Pfizer”). Outside the U.S., one proposed classaction is pending in Canada (Saskatchewan). The defendants include Takeda, AstraZeneca, Janssen
Pharmaceutical Companies (“Janssen”) and several generic manufacturers.
In April 2024, Takeda has reached an agreement in principle to resolve the U.S. cases for a nonmaterial amount. The settlement has no material impact on Takeda’s consolidated statements of profit orloss.
Intellectual property
Intellectual property claims include challenges to the validity and enforceability of Takeda’s patents on
various products or processes as well as assertions of non-infringement of those patents. A loss in any- 11 -

of these cases could result in loss of patent protection for the product at issue. The consequences ofany such loss could be a significant decrease in sales of that product and could materially affect future
results of operations for Takeda.
TRINTELLIX
Takeda has received notices from sixteen generic pharmaceutical companies that they have submitted
ANDAs with paragraph IV certifications seeking to sell generic versions of TRINTELLIX. Takeda filed
patent infringement lawsuits against the ANDA filers in federal court in Delaware. Lawsuits against ten
ANDA filers were resolved before trial. A trial took place from January 15 to January 28, 2021 with six
ANDA filers, including Alembic Pharmaceuticals Limited and Alembic Pharmaceuticals, Inc., Lupin
Limited and Lupin Pharmaceuticals, Inc. (“Lupin”), Macleods Pharmaceuticals Ltd., SigmapharmLaboratories, LLC, Sandoz, Inc., and Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited.
The Court issued its decision on September 30, 2021 and found that US Patent 7,144,884, which
covers vortioxetine (the active ingredient in Trintellix), is valid. For the rest of the asserted patent, only
US Patent 9,101,626, which covers processes for synthesizing vortioxetine, was found to be infringed
by Lupin. Other patents (including crystalline form and certain method of use patents) were found to bevalid but not infringed by any of the defendants.
Takeda filed a notice of appeal on November 24, 2021. Lupin filed a notice of appeal on November 29,
2021 and other defendants filed a notice of appeal on December 8, 2021. Oral argument at the Federal
Circuit took place on September 8, 2023. On December 7, 2023, the Federal Circuit Court affirmed the
district court decision that the method of use patents are valid but not infringed and the process patent isinfringed by Lupin. Takeda did not appeal to the Supreme Court (petition for the Supreme Court to granta writ of certiorari). Lupin did not appeal to the Supreme Court by the deadline of March 6. The impact of
this decision was not material to Takeda’s consolidated statements of profit or loss.
Other
In addition to the individual cases described above, there are no other patent litigations that have amaterial impact on Takeda’s consolidated financial statements as of and for the year ended March 31,
2024.
Sales, Marketing, and Regulation
Takeda has other litigations related to its products and its activities, the most significant of which aredescribe below.
ACTOS Antitrust Litigation
In December 2013, the first of two antitrust class action lawsuits was filed against Takeda in the U.S.
District Court for the Southern District of New York by a putative class of patients who were prescribed
ACTOS. The second class action was filed against Takeda in the same court in April 2015 by a putativeclass of wholesalers that purchased ACTOS from Takeda. In both actions, plaintiffs allege, inter alia, that
Takeda improperly characterized certain patents for ACTOS in the FDA Orange Book, which they claim
imposed requirements on generic companies that filed Abbreviated New Drug Applications and, in turn,resulted in delayed market entry for generic forms of ACTOS. In October 2019, the District Court denied
Takeda’s motion to dismiss. Takeda subsequently sought an interlocutory appeal of the District Court’s
decision, which was denied.
INTUNIV Antitrust Litigation
In January 2017, an antitrust class action was filed against Shire plc, Shire LLC, and Shire U.S. Inc.
(collectively, “Shire”) in the U.S. District Court for the District of Massachusetts. The plaintiffs, a putativeclass of wholesalers, allege that Shire’s settlement in 2013 of patent litigation claims against Actavis
Elizabeth LLC related to its generic formulation of INTUNIV constituted an anticompetitive “reverse
payment.”
In May 2024, Takeda has reached an agreement-in-principle to resolve the matter on a class basis for
an amount that is immaterial. The final settlement, once consummated, will be subject to court approval.
The settlement has no material impact on Takeda’s consolidated statements of profit or loss.
AMITIZA Antitrust Litigation
In August 2021, an antitrust class action was filed against Takeda Pharmaceuticals U.S.A., Inc.
(“Takeda”) in the U.S. District Court for the District of Massachusetts. The plaintiffs, a putative class ofwholesalers, allege that a settlement that Takeda and Sucampo Pharmaceuticals, Inc. entered into in2014 with Par Pharmaceutical, Inc. (“Par”) to resolve patent litigation claims related to Par’s genericformulation of AMITIZA were anticompetitive. In December 2023 and in January 2024, additional- 12 -

complaints were filed in the U.S. District Court for the District of Massachusetts by a health insurer
plaintiff as well as by individual retail pharmacies plaintiffs.

COLCRYS Antitrust Litigation
In September 2021, an antitrust class action was filed against Takeda Pharmaceuticals U.S.A., Inc.
(“Takeda”) in the U.S. District Court for the Eastern District of Pennsylvania. The plaintiffs, a putativeclass of wholesalers, allege that settlements that Takeda entered into in 2015 and 2016 to resolve
patent litigation claims against several generic drug manufacturers related to generic formulations of
COLCRYS were anticompetitive. In September 2023, Takeda reached an agreement in principle toresolve the antitrust matter for an amount that is immaterial, which was fully executed in December
2023. The settlement had no material impact on Takeda’s consolidated statements of profit or loss.
In November 2023, a subsequent antitrust class action challenging the same settlements was filed in
the U.S. District Court for the Southern District of New York by plaintiffs seeking to represent a putativeclass of end payors.
AbbVie Supply Agreement Litigation
In November 2020, AbbVie brought suit against Takeda Pharmaceutical Company Limited (“Takeda”) in
Delaware Chancery Court alleging Takeda breached its agreement with AbbVie related to the supply of
LUPRON in the U.S. due to shortages arising from quality issues the U.S. Food & Drug Administration
identified concerning Takeda’s production facility in Hikari, Japan as part of a Form 483 issued in
November 2019 and a Warning Letter issued in June 2020. In the litigation, AbbVie sought bothpreliminary injunctive relief and monetary damages. In September 2021, the court issued an orderdenying AbbVie’s request for injunctive relief. The court subsequently issued a decision finding Takeda
in breach of the supply agreement. In September 2023, the court issued a decision regarding thequantification of AbbVie’s monetary damages and subsequently entered judgment in December 2023. In
accordance with the judgment, Takeda paid USD 505 million, including interest, in March 2024 with a
total financial impact of JPY 26,405 million loss in other operating expenses and JPY 7,141 million in
finance expenses for the interest for the fiscal year ended March 31, 2024.
Investigation of Patient Assistance Programs
In November 2016, the U.S. Department of Justice (“DOJ”) (through the U.S. Attorneys’ Office in
Boston) issued a subpoena to Ariad Pharmaceuticals, Inc. (“Ariad”), which was acquired by Takeda
during the year ended March 31, 2017, seeking information from January 2010 to the present relating to
Ariad’s donations to 501(c) (3) co-payment foundations, financial assistance programs, and free drug
programs available to Medicare beneficiaries and the relationship between these co-payment
foundations and specialty pharmacies, hubs or case management programs. Takeda is cooperating with
the investigation.
In June 2019, the DOJ (through the U.S. Attorney’s Office in Boston) issued a subpoena to Shire
Pharmaceuticals LLC, which was acquired by Takeda during the year ended March 31, 2019 (throughTakeda’s acquisition of Shire plc). The subpoena generally seeks information about Shire’s interactions
with 501(c)(3) organizations that provide financial assistance to Medicare patients taking Shire drugs,
including the hereditary angioedema medications FIRAZYR and CINRYZE. Takeda cooperated with theinvestigation and in December 2023, Takeda reached a settlement for an amount that is immaterial. The
settlement had no material impact on Takeda’s consolidated statements of profit or loss.
Department of Justice Civil Investigative Demands
On February 19, 2020, Takeda received a Civil Investigative Demand (“CID”) from the DOJ (through its
office in Washington, DC). The CID seeks information as part of an investigation of possible off-label
promotion and violations of the Anti-Kickback Statute in connection with the promotion and sale of
TRINTELLIX. Takeda is cooperating with the DOJ’s investigation.
On February 28, 2020, Takeda received a CID from the DOJ (through its office in Washington, DC). The
CID seeks information as part of an investigation of possible kickbacks to a Florida allergy center inconnection with the promotion and sale of Takeda’s subcutaneous IG products, CUVITRU, HYQVIA and
GAMMAGARD. Takeda is cooperating with the DOJ’s investigation.
Brazilian Investigation Related to ELAPRASE and REPLAGALOn November 30, 2021, the Brazilian federal authorities executed a search warrant at Takeda offices in
Brazil. The warrant sought records about information Takeda received from the Brazilian National
Sanitary Surveillance Agency (AVISA) as well as any records related to donations made to charitableorganizations which provide funding to patients who are pursuing claims for reimbursement from the- 13 -

Brazilian government for prescriptions of ELAPRASE and REPLAGAL. Takeda is cooperating with theinvestigation.

[Notes on Consolidated Statement of Changes in Equity]
1. Class and total number of shares issued as of March 31, 2024

Common Stock

1,582,419 thousand shares

2. Dividends(1) Amount of dividends paid
Resolution
Ordinary General Meeting of
Shareholders(June 28, 2023)
Meeting of Board of Directors

Class of
SharesTotal dividends

Dividends
per share

Record date

Effective
date

CommonStock

JPY 140,475 million

JPY 90.00

March 31,2023

June 29,
2023

CommonStock

JPY 148,037 million

JPY 94.00

September
30,2023

December 1,
2023(October 26, 2023)
Total

JPY 288,512 million(2) Dividends declared whose record date falls in the fiscal year ended March 31, 2024 andthe effective date falls in the following fiscal year
Matters with respect to dividends on shares of common stock will be proposed at the Ordinary
General Meeting of Shareholders to be held on June 26, 2024 as follows:(i) Total dividends(ii) Dividends per share(iii) Record date(iv) Effective date
Dividends will be paid from retained earnings.

JPY 148,041 million
JPY 94.00
March 31, 2024
June 27, 2024

3. Class and number of shares underlying stock acquisition rights as of March 31, 2024 (excluding rights

whose exercise period has yet to begin)
Common stock

2,495,700 shares[Per Share Information]
1. Equity attributable to owners of the Company per share
2. Basic earnings per share

JPY 4,635.56
JPY 92.09[Notes on Financial Instruments]
1. Overview of Financial Instruments
Takeda promotes risk management to reduce the financial risks arising from business operations. The principal
risks to which Takeda is exposed include market risk, counterparty credit risk, and liquidity risk caused bychanges in the market environment such as fluctuations in foreign exchange rates, interest rates and market
prices of commodities and other financial holdings. Each of these risks is managed in accordance with
Takeda’s policies.
(1) Market Risk
Major market risks to which Takeda is exposed are 1) foreign currency risk, 2) interest rate risk and 3) pricefluctuation risk. Financial instruments affected by market risk include loans and borrowings, deposits, equity
investments and derivative financial instruments.
1) Foreign Currency Risk
Takeda’s exposure to the risk of changes in foreign exchange rates primarily relates to its operations (whenrevenue or expense is denominated in a foreign currency) and Takeda’s net investments in foreign subsidiaries.
- 14 -

Takeda manages foreign currency risks in a centralized manner using derivative financial instruments. Takeda’s
policy does not permit the use of speculative foreign currency financial instruments or derivatives.
Takeda uses forward exchange contracts, currency swaps, and currency options to hedge individuallysignificant foreign currency transactions. Takeda has also designated loans and bonds denominated in the US
dollar and Euro and certain forward exchange contracts as hedging instruments of net investments in foreign
operations.
2) Interest Rate Risk
Takeda’s exposure to the risk of changes in benchmark interest rates and foreign exchange rate relates to theoutstanding debts with floating interest rates as well as the trade and other receivables due from customers
that Takeda has the option to factor. Takeda uses interest rate swaps, forward interest rate contracts, and crosscurrency interest rate swaps that fix the amount of future payments to manage interest and foreign exchange
rate risks through cash flow hedge strategies.
3) Price Fluctuation Risk Management
Commodity Price Risk
For its business operations, Takeda is exposed to risks from commodity price fluctuations. Takeda manages
this risk primarily by utilizing fixed price contracts but may also use financial instruments to lock in a fixed price.
Market Price Risk
Market pricing and valuations of Takeda’s fixed-income financial assets and liabilities are impacted by changes
in currency rates, interest rates and credit spreads, which are managed as described above. For equity
instruments, Takeda manages the risk of price fluctuations in the instruments by regularly reviewing shareprices and financial positions of the issuers.
(2) Credit Risk
Takeda is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing
activities, including deposits with banks and financial institutions, foreign exchange transactions, and otherfinancial instruments. The maximum exposure to credit risk, without taking into account any collateral held at
the end of the reporting period, is represented by the carrying amount of the financial instruments which is
exposed to credit risk on the consolidated statements of financial position.
1) Customer Credit Risk
Trade and other receivables are exposed to customer credit risk. Takeda monitors the status of overduebalances, reviews outstanding balances for each customer and regularly examines the credibility of major
customers in accordance with Takeda’s policies for credit management to facilitate the early evaluation and the
reduction of potential credit risks. In parallel, Takeda utilizes programs to sell certain trade and otherreceivables due from certain customers to a select group of banks on a non-recourse basis which in turnminimizes the credit risk associated with such customers. If necessary, Takeda obtains rights to collateral or
guarantees on the receivables.
2) Other Counterparty Credit Risk
Cash reserves of Takeda are concentrated mostly with Takeda and entities acting as the cash pool leader in the
United States and Europe. These cash reserves are managed exclusively by investments in highly rated shortterm bank deposits and bonds of highly rated issuers within the investment limits determined by reviewing theinvestment ratings and terms under Takeda’s policies for fund management, resulting in limited credit risk.
Cash reserves, other than those subject to the group cash pooling system, are managed by each consolidated
subsidiary in accordance with Takeda’s fund management policies.
For derivatives, Takeda enters into contracts only with financial counterparties rated investment grade or higher
in order to minimize counterparty risk.
(3) Liquidity Risk
Takeda manages liquidity risk and establishes an adequate management framework for liquidity risk to securestable short-, mid-, and long-term funds and sufficient liquidity for operations. Takeda manages liquidity risk bymonitoring forecasted cash flows and actual cash flows on an ongoing basis. In addition, Takeda hascommitment lines with some counterparty financial institutions to manage liquidity risk. Takeda strives tomaximize the available liquidity with a combination of liquid short-term investments and committed credit lines
with strong rated counterparties. The objective is to maintain levels in excess of project cash needs to mitigate
the risk of contingencies.
(4) Capital Management- 15 -

The capital structure of Takeda consists of shareholders’ equity, bonds and loans, and cash and cash
equivalents. The fundamental principles of Takeda’s capital risk management are to build and maintain asteady financial base for the purpose of maintaining soundness and efficiency of operations and achieving
sustainable growth. According to these principles, Takeda conducts capital investment, profit distribution suchas dividends, and repayment of loans based on steady operating cash flows through the development and saleof competitive products.
Takeda utilizes factoring arrangements for selected trade receivables. Under this program, trade receivables
sold are derecognized when the risks and rewards of ownership have been transferred.
Takeda balances and monitors its capital structure between debt and equity and adheres to a conservative
financial discipline.
2. Fair value of financial instruments(1) Fair Value Measurements
Derivative and non-derivative financial instruments measured at fair value are categorized in the following
three-tier fair value hierarchy that reflects the significance of the inputs in making the measurements. Level 1 isdefined as observable inputs, such as quoted prices in active markets for an identical asset or liability. Level 2
is defined as inputs other than quoted prices in active markets within Level 1 that are directly or indirectly
observable. Level 3 is defined as unobservable inputs.
Level 1
Assets:Financial assets measured at fair value throughprofit or loss
Derivatives
Investment in convertible notes
Investment in debt securities
Financial assets associated with contingent
consideration arrangements
Derivatives for which hedge accounting isappliedFinancial assets measured at fair value through
OCI
Trade and other receivables
Equity instruments

Total
Liabilities:
Financial liabilities measured at fair value
through profit or loss
Derivatives
Financial liabilities associated with
contingent consideration arrangements
Other
Derivatives for which hedge accounting isapplied
Total

Level 2

Level 3

million JPY
Total

—
—
—
—

8,511
—
—
—

9,106
13,4591,113
12,293

17,617
13,4591,113
12,293—

102,606—

102,606—
93,962

83,734——88,92583,734
182,887

93,962

194,851

124,896

413,709

—
—

4,677
—

9,106
7,772

13,783
7,772

—
—

—
11,325

1,797
—

1,797
11,325—16,002

18,67534,677(2) Valuation Techniques
The fair value of derivatives classified as Level 2 is measured based on Treasury management systemvaluation models or the Black-Scholes model, whose significant inputs are based on observable market data.
Derivatives classified as Level 3 include those recognized in connection with settlements of cash flows arisingfrom differences between the fixed prices and floating market prices of renewable energy in a virtual powerpurchase agreement and those recognized in an agreement to offset the volatility of such cash flows. The fairvalue of derivatives in Level 3 is measured using the discounted cash flow method. The key assumptions taken
into account include forecasted renewable energy prices and the expected generation of the renewable energy
generating facility.
The fair value of the investment in convertible notes is measured using techniques such as the discounted
cash flow and option pricing models.
- 16 -

The fair value of trade and other receivables, which are due from customers that Takeda has the option tofactor, are measured based on the invoiced amount.
Equity investments and investments in debt instruments are not held for trading. If equity instruments orinvestments in debt instruments are quoted in an active market, the fair value is based on price quotations at
the period-end-date. If equity instruments or investments in debt instruments are not quoted in an active market,
the fair value is calculated utilizing an adjusted book value per share method or EBITDA multiples approachbased on available information as of each period-end-date and comparable companies. The principal input thatis not observable and utilized for the calculation of the fair value of equity instruments and investments in debt
instruments classified as Level 3 is the EBITDA rate used for the EBITDA multiples approach, which ranges
from 5.2 times to 13.0 times.
Financial assets and liabilities associated with contingent consideration arrangements are measured at fairvalue at the time of the divestiture or the acquisition date of business combination. When the contingent
consideration arrangement meets the definition of a financial asset or liability, it is subsequently re-measured atfair value at each closing date. The determination of the fair value is based on models such as scenario-based
methods and discounted cash flows. The key assumptions take into consideration the probability of meeting
each performance target, forecasted revenue projections, and the discount factor. The financial assets
associated with contingent consideration arrangements are recognized mainly in relation to the divestiture of
XIIDRA. The financial liabilities associated with contingent consideration arrangements are discussed in Note
(5) Financial liabilities associated with contingent consideration arrangements.
The fair value of the other financial liabilities is measured using the discounted cash flow model.
(3) Transfers between levels
Takeda recognizes transfers between levels of the fair value hierarchy, at the end of the reporting period during
which the change has occurred. There were transfers from Level 3 to Level 1 recorded in the years ended
March 31, 2024. These transfers resulted from the investments in the companies whose shares werepreviously not listed on an equity or stock exchange and had no recent observable active trades in the shares.
During the years ended March 31, 2024, the companies listed its equity shares on an exchange and are
currently actively traded in the market. As the equity shares have a published price quotation in an active
market, the fair value measurement was transferred from Level 3 to Level 1 on the fair value hierarchy during
the years ended March 31, 2024. There were no other significant transfers between levels of the fair value
hierarchy during the years ended March 31, 2024.
(4) Level 3 fair values
Takeda invests in equity instruments mainly for research collaboration. The following table shows areconciliation from the opening balances to the closing balances for Level 3 financial asset fair values for theperiod ended March 31, 2024. The disclosure related to Level 3 financial liabilities which are financial liabilities
associated with contingent consideration arrangements are included in (5) Financial liabilities associated with
contingent consideration arrangements. There are no significant changes in fair value during the changes incertain assumptions which influence the fair value measurement for Level 3 financial assets.
million JPY
Financial assets
associated with contingent
consideration
arrangements
Equity instruments
As of the beginning of the year
23,806
83,236
Changes recognized as finance income or(702)—
finance expenses
Changes in fair value of financial assets(12,415)—
associated with contingent consideration
due to other elements than time value
Changes in fair value of financial assets
1,604
4,900
measured at fair value through OCI andexchange differences on translation offoreign operations
Purchases
—
1,760
Sales
—
(217)
Transfers to Level 1—(5,008)Acquisition from conversion of convertible
—
4,254
notes
As of the end of the year
12,29388,925- 17 -

(5) Financial liabilities associated with contingent consideration arrangements
Financial liabilities associated with contingent consideration arrangements represent consideration related tobusiness combinations or license agreements that are payable only upon future events such as theachievement of development milestones and sales targets, including pre-existing contingent consideration
arrangements of the companies that are acquired by Takeda. At each reporting date, the fair value of financial
liabilities associated with contingent consideration arrangements is re-measured based on risk-adjusted future
cash flows discounted using an appropriate discount rate.
As of March 31, 2024, the balance primarily relates to pre-existing contingent consideration arrangements from
historical acquisition.
The fair value of financial liabilities associated with contingent consideration arrangements could increase or
decrease due to changes in certain assumptions which underpin the fair value measurements. The
assumptions include probability of milestones being achieved.
The fair value of financial liabilities associated with contingent consideration arrangements are classified as
Level 3 in the fair value hierarchy. The following table shows a reconciliation from the opening balances to theclosing balances for financial liabilities associated with contingent consideration arrangements for the year
ended March 31, 2024. There are no significant changes in fair value during the changes in significant
assumptions which influence the fair value measurement for financial liabilities associated with contingent
consideration arrangements.
million JPY
8,139
8,678
(9,032)(13)
7,772

As of the beginning of the year
Changes in the fair value during the period
Settled and paid during the period
Foreign currency translation differences
As of the end of the year

(6) Financial instruments not measured at fair value
The carrying amount and fair value of financial instruments that are not measured at fair value in the
consolidated statements of financial position are as follows. Fair value information is not provided for financial
instruments, if the carrying amount is a reasonable estimate of fair value due to the relatively short period of
maturity of these instruments.
million JPY
Carrying
amount3,775,879
750,622

Bonds
Long-term loans

Fair value
3,420,668
746,831

Long-term financial liabilities are recognized at their carrying amount. The fair value of bonds is measured atquotes whose significant inputs to the valuation model used are based on observable market data. The fairvalue of loans is measured at the present value of future cash flows discounted using the applicable market
rate on the loans in consideration of the credit risk by each group classified in a specified period. The fair valueof bonds and long-term loans are classified as Level 2 in the fair value hierarchy.
[Revenue Recognition]
1. Disaggregation of revenue information
Takeda’s revenue from contracts with customers is comprised of the following:
Revenue by Type of Good or Service
million JPY
4,163,652
100,110
4,263,762

Sales of pharmaceutical products
Out-licensing and service income
Total- 18 -

Revenue by Business Area and Productmillion JPY
Gastroenterology:
ENTYVIOGATTEX/REVESTIVE

800,919
119,252

TAKECAB/VOCINTI (1)PANTOLOC/CONTROLOC (2)DEXILANTALOFISEL
Others118,526
46,49545,2783,513
82,226

Total Gastroenterology
Rare Diseases:
Rare Hematology:
ADVATEADYNOVATE/ADYNOVIFEIBAVONVENDI
RECOMBINATE
OthersTotal Rare Hematology

1,216,207

122,91166,30840,543
16,18812,05047,298305,297

Rare Genetics and Other:
TAKHZYROELAPRASE
REPLAGALVPRIVLIVTENCITY
Others178,677
91,56173,55351,29519,085
51,232

Total Rare Genetics and Other

465,403(3)

Total Rare Diseases
PDT Immunology:
immunoglobulin
albumin
OthersTotal PDT Immunology (3)770,701
644,587
133,990
39,993
818,570

Oncology:
ADCETRISLEUPLIN/ENANTONE

109,425
107,350NINLAROICLUSIG
ALUNBRIGFRUZAQLAVELCADE
EXKIVITY

87,361
54,70628,524
10,0805,539
3,459

OthersTotal Oncology
Neuroscience:
VYVANSE/ELVANSE
TRINTELLIXADDERALL XR
INTUNIV
Others55,917462,362423,221104,797
41,75633,55523,686- 19 -

million JPY
627,014

Total Neuroscience
Other:AZILVA (1)33,636
FOSRENOL
13,529Others321,743(3)
Total Other
368,908
Total
4,263,762(1) The figures include the amounts of fixed dose combinations and blister packs.
(2) Generic name: pantoprazole(3) Starting from the fiscal year ending March 31, 2025, “Plasma-Derived Therapies” replaces the previous
category of “PDT Immunology”, and includes all plasma-derived products including those previously
categorized within “Rare Diseases” (e.g., FEIBA, CINRYZE). “Vaccines” is presented as a separate key
business area (previously included in “Others”), reflecting the strategic focus on our dengue vaccine,
QDENGA.
If the new categories are applied, revenue from “Rare Diseases" is JPY 688,423 million for the year ended
March 31, 2024, revenue from “Plasma-Derived Therapies” is JPY 903,699 million for the year ended
March 31, 2024, revenue from “Vaccines” is JPY 50,355 million for the year ended March 31, 2024, revenue
from “Others” is JPY 315,701 million for the year ended March 31, 2024.
Revenue by Region
million JPY
451,391

Japan
U.S.
Europe and Canada
Asia (excluding Japan)
Latin America
Russia/CIS
Other

2,195,711
966,835
261,218
198,100
72,594
117,911

Total

4,263,762“Other” includes the Middle East, Oceania and Africa. This disaggregation provides revenue attributable tocountries or regions based on the customer location.
2. Other revenue information
Takeda’s contract balances are as follows:
million JPY
Receivables from contracts with customers
Trade receivables
Contract assets

612,439

Unbilled receivables
Contract liabilities

2,574

Deferred income
Advance payments

8,259
45

Takeda’s contract assets relate to the right to receive consideration where performance was completed basedon the contract, and trade receivables are recognized when the right to receive consideration becomes
unconditional.
Takeda’s contract liabilities primarily relate to out-licensing arrangements or product purchase and supply
agreements where Takeda receives cash consideration prior to the completion of its performance obligations
under the agreements. The revenue recognized during the year ended March 31, 2024 that was included in thecontract liability balance as of the beginning of the year was JPY 5,526 million. The revenue recognized during
the year ended March 31, 2024 from performance obligations satisfied (or partially satisfied) in previous periods
was JPY 80,794 million and primarily relates to royalty income.

- 20 -

Takeda’s transaction price allocated to the remaining performance obligations is as follows:

Total
8,304

million JPY
Duration of the remaining performance obligations
Between one andWithin one year
More than five years
five years
6,119
517
1,668

[Significant Subsequent Events]
Not applicable.

- 21 -

Notes to the Unconsolidated Financial Statements[Notes for Significant Accounting Policies]
1. Valuation of Significant Assets(1)Valuation of Securities
Shares of subsidiaries and affiliates: Valued at cost using the moving-average method
Available-for-sale securities
Other than non-marketable equity securities:
Valued at market prices on the balance sheet date
(Unrealized gains and losses are included in net assets, andcost of securities sold is calculated using the moving-averagemethod.)Non-marketable equity securities: Valued at cost using the moving-average method(2)Valuation of Derivatives:

Valued at market value(3)Valuation of Inventories
Merchandise and products:

Cost determined by gross average method

Work in process:Raw materials and Supplies:(Balance sheet values are calculated by write-down of thebook value based on decreases in profitability)
Cost determined by gross average method(Balance sheet values are calculated by write-down of thebook value based on decreases in profitability)
Cost determined by gross average method(Balance sheet values are calculated by write-down of thebook value based on decreases in profitability)

2. Depreciation Methods for Significant Non-current Assets(1)Tangible non-current assets (excluding lease assets)
The Company uses the declining-balance method.
However, for buildings (excluding building improvements) acquired on or after April 1, 1998, thestraight-line method is applied.
Estimated useful lives are mainly as follows:
Buildings and structures:
15-50 years
Machinery and equipment:
4-15 years(2)Intangible non-current assets (excluding lease assets)
The Company uses the straight line depreciation method for intangible non-current assets. The
depreciation period is based on the period of availability.
(3)Lease assets
The Company depreciates lease assets related to finance leases with no transfer of ownershiprights over the lease term, with a nil residual value.
3. Significant Reserves(1) With respect to allowance for doubtful receivables, in order to account for potential losses from
uncollectible notes and accounts receivable, the Company recognizes reserve for uncollectible
receivables based on historical loss ratios. Specific claims, including doubtful claims, are individually
evaluated in light of their recoverability, and the allowance for doubtful receivables is recognized at theamount deemed unrecoverable.
(2) Reserve for employees’ bonuses is stated at the estimated amount of bonuses required to be paid toeligible employees at the balance sheet date based on the applicable payments period in order tocover payment of bonuses to employees.
- 22 -

(3) Reserve for bonuses for directors and corporate auditors is stated as the estimated amount to be paidin order to cover payments of bonuses to directors and corporate auditors.
(4) Reserve for retirement benefits is based on the present value of the projected retirement benefit
obligation as of the balance sheet date estimated at the beginning of each fiscal year, less pension
assets under the corporate pension plans measured at fair value in order to cover payments ofretirement benefits to employees. In calculating retirement benefit obligations, the benefit formulabasis is used as the method of attributing expected benefit to periods up to this fiscal year end.
Prior service cost is amortized using the straight-line method over a fixed number of years (five years)
within the average remaining years of service when obligations arise.
Unrecognized net actuarial gains and losses are expensed from the period of occurrence inproportional amounts, on a straight-line basis over the fixed number of years (five years) within the
average remaining years of service in each period when obligations arise.
(5) Reserve for litigation is recorded, after taking appropriate legal and other specialist advice, where an
outflow of resources is considered probable and a reliable estimate can be made for the likely
outcome of the dispute.
(6) Reserve for share-based payments is stated at the estimated amount of share-based obligations as of
the balance sheet date mainly in order to grant the Company's share to directors and employees inaccordance with the share-based payment rules.
(7) Reserve for restructuring costs is primarily reasonably estimated based on costs expected to arise
from the R&D transformation.
4. Revenue and expenses(Revenue recognition)
The Company’s revenue is primarily related to the sale of pharmaceutical products and is generally
recognized when control of the products is passed to the customer in an amount that reflects theconsideration to which the Company expects to be entitled in exchange for those products. Control is
generally transferred at the point in time of shipment to or receipt of the products by the customer, or when
the services are performed. The amount of revenue to be recognized is based on the consideration the
Company expects to receive in exchange for its goods or services. If a contract contains more than one
contractual promise to a customer (performance obligation), the consideration is allocated based on thestandalone selling price of each performance obligation. The consideration the Company receives inexchange for its goods or services may be fixed or variable. Variable consideration is only recognized tothe extent it is highly probable that a significant reversal will not occur.
The Company’s gross sales are subject to various deductions, which are primarily composed of rebatesand discounts to retail customers, government agencies and wholesalers. These deductions represent
estimates of the related obligations, requiring the use of judgment when estimating the effect of thesesales deductions on gross sales for a reporting period. These adjustments are deducted from gross sales
to arrive at net sales. The Company monitors the obligation for these deductions on annually basis andrecords adjustments when rebate trends, contract terms and legislative changes, or other significant
events indicate that a change in the obligation is appropriate. Historically, subsequent changes in sales
rebates and discounts have not been material to net earnings.
The Company generally receives payments from customers within 90 days after the point in time whengoods are delivered to the customers. The Company usually performs those transactions as a principal,
but the Company also sells products on behalf of others in which case revenue is recognized at an
amount of sales commission that the company expects to be entitled as an agent.
The Company also generates revenue in the form of royalty payments, upfront payments, and milestone
payments from the out-licensing and sale of intellectual property (“IP”). Royalty revenue earned through alicense is recognized when the underlying sales have occurred. Revenue from upfront payment isgenerally recognized when the Company provides a right to use IP. Revenue from milestone payments is
recognized at the point in time when it is highly probable that the respective milestone event criteria is met,
and a significant reversal in the amount of revenue recognized will not occur. Revenue from other services
such as R&D of compounds that are out-licensed is recognized over the service period.
The Company generally receives payments from customers within 30 days after entering into out-licensing
contracts or confirmation by customers that conditions for the milestone payments are met. The Company
licenses its own intellectual property rights to customers and performs those transactions as a principal.
The Company also provides other services as a principal or an agent.
- 23 -

The Company identifies a contract modification in case of a change in the scope or price (or both) of acontract.
5. Other Significant Accounting Policies for the Unconsolidated Financial Statements(1) Hedge Accounting
a. Methods of hedge accounting
The Company uses deferred hedging. The allocation treatment is adopted for forward exchangetransactions that meet the requirements for that method and special treatment is adopted for interest
rate swaps that meet the requirements for special treatment.
b. Hedging instruments, hedged items and hedging policies
The Company uses forward exchange contracts and interest rate swaps to hedge a portion of future
cash flow related to income or expense that is linked to short-term variable interest rates. In addition,
the Company uses forward foreign exchange transactions, etc. to hedge a portion of risk of changes
in future cash flow arising from changes in foreign exchanges. Foreign currency risk of theinvestments in foreign operations is managed through the use of foreign-currency-denominated bonds
and borrowings. These hedge transactions are conducted in accordance with established policies
regarding the scope of usage and standards for selection of financial institutions.
c. Method of assessing effectiveness of hedges
Preliminary testing is conducted using statistical methods such as regression analysis, and posttransaction testing is conducted using ratio analysis. The Company omits the assessment if material
terms of the transaction are the same and also the hedging effect is extremely high.
(2) Stated AmountAll amounts shown are rounded to the nearest million Japanese Yen ("JPY") (i.e., a half of a million ormore is rounded up to a full one million and less than a half of a million is disregarded).
[Notes for Accounting Estimates and Assumptions]
The items which were recorded on the financial statements as of March 31, 2024 using accounting estimatesor assumptions and could have a material impact on the financial statements as of March 31, 2025 aredescribed below.
Deferred Tax Assets JPY 123,639 million
The Company recognized deferred tax assets of JPY 123,639 million on the balance sheet as of March 31,
2024. As discussed in the note (Tax Effect Accounting), the amount of deferred tax assets before offsettingwith the deferred tax liabilities is JPY 184,778 million, which is a net of gross deferred tax assets fordeductible temporary differences and net operating loss carryforward of JPY 551,846 million with valuation
allowances of JPY 367,068 million.
These deferred tax assets are recorded to the extent that it is probable that future taxable income will beavailable against which the reversal of deductible temporary differences or utilization of the net operating
losses carryforward will generate a tax benefit for the Company.
The Company also assesses deferred tax assets to determine the realizable amount at the end of eachperiod. In assessing the recoverability of deferred tax assets, The Company considers the scheduled
reversal of taxable temporary differences, projected future taxable profits, and tax planning strategies.
Future taxable profits according to profitability is estimated based on the Company's business plan.
Therefore, the change in judgment upon determining the revenue forecast related to certain products used
for the Company’s business plan could have a material impact on the amount of the deferred tax assets tobe recorded on the financial statements as of March 31, 2024.

[Additional Information]
In March 2024, the Board of Directors approved the issuance of subordinated JPY Hybrid Bonds (“the 2nd
Hybrid Bonds”) with a maturity of up to 60 years in the form of a public offering in Japan. For details of Hybrid
Bonds, please refer to "Notes of Consolidated Financial Statements - Additional Information".

- 24 -

[Notes on Unconsolidated Balance Sheet]
1. Accumulated depreciation on assets:
Tangible non-current assets

JPY 373,676 million

2.Contingent liabilities(Guarantees)
The Company has provided guarantees to the following persons/subsidiaries mainly for
obligations to cover the redemption or repayment of debt, payment of certain obligations
associated with factoring transactions, rental fees based on the real-estate lease contracts
and payment of obligations associated with derivatives.
Employees of Takeda Pharmaceutical Company Limited

JPY

6

millionShire Acquisitions Investments Ireland Designated Activity
Company

JPY
(USD)
JPY
(USD)
JPY
(USD)
JPY

454,733
3,002
199,448
1,317
81,477538
30,041

millionmillionmillionmillionmillionmillionmillionBaxalta Incorporated
Pharma International Insurance Designated Activity
Company
Takeda Pharmaceuticals U.S.A., Inc.

(USD)

198

millionBaxalta Innovations GmbH

JPY
(EUR)

20,445125

millionmillionTakeda Pharmaceuticals America, Inc.

JPY
(USD)

9,048 million
60 million(Litigation)
For details of major litigation matters, please refer to [Notes on Consolidated Statement of
Financial Position] 3. Contingent liabilities, (2) Litigation
Product Liability and Related Claims
ACTOS Economic Loss Cases
Proton Pump Inhibitor (“PPI”) Product Liability Claims
Sales, Marketing, and Regulation
AbbVie Supply Agreement Litigation
3. Receivables from and payables to subsidiaries and affiliates (including those separately presented)
Short-term receivables:
Long-term receivables:
Short-term payables:
Long-term payables:

JPY
JPY
JPY
JPY

222,783 million
170 million
539,671 million
640,763 million- 25 -

[Notes on Unconsolidated Statement of Operations]
1. Transactions with subsidiaries and affiliates
Operating transactions:
Sales
Purchases

JPY
JPY
JPY

Other
Non-operating transactions:Non-operating income
Non-operating expenses
Extraordinary income
Purchases of assets

126,005 million
122,918 million
82,293 million

JPY

305,394 million
50,075 million
138,488 million
639,448 million

Acquisition amount of loans receivable from theCompany as a result of in-kind dividends

JPY

639,448 million

Acquisition amount of loans receivable fromsubsidiaries as a result of in-kind dividends

JPY

159,448 million

JPY
JPY
JPY

Please refer to [Transactions with Related Parties] for the major transactions included above.
2. Research and development costs:

JPY 164,472 million

3. Extraordinary gain
(Gain on restructuring of subsidiaries and affiliates)
The gain on restructuring of subsidiaries and affiliates was recognized mainly the liquidation of subsidiaries
and affiliates in connection with the restructuring of Takeda Group.
4. Extraordinary loss
(Loss on litigation)
The loss on litigation was recognized in connection with the supply agreement litigation with AbbVie, Inc.
[Notes on Unconsolidated Statement of Changes in Net Assets]
1. Class and total number of shares of treasury shares as of March 31, 2024
Common Stock
13,403 thousand shares- 26 -

[Transactions with Related Parties]
Association

Company Name

Ownershipof Voting
RightsRelationship withRelated Party

Nature of theTransaction

Transaction
AmountAccount Item

million JPY
Consolidated
subsidiary

Shire Acquisitions
Investments Ireland
Designated Activity
Company

Consolidated
subsidiary

Baxalta Incorporated

Consolidated
subsidiary

Takeda (China)
Holdings Co., Ltd.

Direct100.0%

Indirect100.0%

Indirect100.0%

Debt guarantee

Debt guarantee

Funding

million JPY

Debt guarantee(Note) 1

454,733 -Guarantee fee(Note) 1

1,368

Debt guarantee(Note) 1

199,448 -Guarantee fee(Note) 1
Inter-company
borrowings(Note) 2
Interest expenses(Note) 2

577
128,574

Other current
liabilities

17,926

Accrued231 interest
expensesLong-term
3,178
loans

Funding

Interest expenses(Note) 2

Consolidated
subsidiary

Takeda Development
Center Americas, Inc.

Indirect100.0%

Handles drug
research anddevelopment onbehalf of theCompany etc.

Research anddevelopment
outsourcing(Note) 2

103,775 Other payable

Inter-company
borrowings(Note) 2

191,811

Consolidated
subsidiary

TakedaPharmaceuticals
U.S.A., Inc.

Shire
Biopharmaceuticals
Holdings

Direct100.0%

Funding

Investment

Consolidated
subsidiary

Shire Ireland FinanceTrading Limited

TakedaPharmaceuticals
International AG

Direct100.0%

Direct100.0%

Funding

Funding

640,763

28,56913,434

Accrued
1,930 interest
expenses

12

576,657 －Interest income(Note) 2

3,532Interest
receivable—

96493,415 －—

74,883 －—Exchange gains
associated with inkind dividends(Note) 3,5

58,088 －—Inter-company
borrowings(Note) 2

781,032

Interest expenses(Note) 2
Consolidated
subsidiary40

Short-term
loansInter-company
loans(Note) 2

Underwriting of
capital increase(Note) 4
Receipt of in-kind
dividends(Note) 3,5—

Short-term
loans

Direct100.0%

Consolidated
subsidiary

954

450

Takeda Financing GK

Direct72.7%
Indirect
27.3%—

Other current
liabilities

Consolidated
subsidiary

Interest expenses(Note) 2

Balance at theend of year

Short-term
loans

4,554

Accrued
1,797 interest
expenses

133

Inter-company
loans(Note) 2

303,201

Short-termloans receivable

Interest income(Note) 2

13,542

Interest
receivable

Receipt of in-kind
dividends(Note) 6
Inter-company
borrowings(Note) 2- 27 -

639,448 －854,951

Short-term
loans

179,261

1,292—

378,029

Association

Company Name

Ownershipof Voting
RightsRelationship withRelated Party

Nature of theTransaction

Transaction
AmountAccount Item

million JPY

Consolidated
subsidiary

Consolidated
subsidiary

Baxalta US Inc.

Indirect100.0%

Shire Limited

Direct100.0%

Funding

Investment

Balance at theend of year
million JPY

Interest expenses(Note) 2

Accrued
7,428 interest
expenses

626

Sales of products(Note) 2

23,676

Accounts
receivable

2,699

Receipt of royalty(Note) 2

54,414Other
receivable

16,436

Acquisition ofownership ofsubsidiary(Note) 7
Receipt of in-kind
dividends(Note) 3, 8
Exchange gains
associated with inkind dividends(Note) 3, 8

639,448 －—80,402 －—80,245 －—Terms and conditions of the transactions and the policy for determining the terms and conditions(Notes)1. Debt guarantee is guarantee for redemption of bonds. Guarantee fees are reasonably determined basedon market rates and in accordance with the agreement through mutual consultation.
2.(1) Interest rates of inter-company borrowings and loans are reasonably determined in consideration ofmarket rates and in accordance with the agreement through mutual consultation.
(2) The transaction price for operating transactions is determined in consideration of market prices and inaccordance with the agreement through mutual consultation.
3. The exchange value of shares of the subsidiary are determined in consideration of the carrying amountof the shares of subsidiary delivered before the transaction. The transaction values of inter-company loan
received as in-kind dividends are determined in consideration of the carrying amount of the intercompany loan before the transaction.
4. This was recognized in association with the contribution of the loans to Shire Ireland Finance Trading
Limited and Takeda Pharmaceuticals U.S.A., Inc. in the course of the capital increase in Takeda
Pharmaceuticals U.S.A., Inc.. As a result, the Company recognized an increase in its investment in
Takeda Pharmaceuticals U.S.A., equal to the amount of loans contributed to Takeda Pharmaceuticals
U.S.A, Inc.
5. This was recognized in association with the loan to Takeda Pharmaceuticals International AG which had
been owned by Shire Biopharmaceuticals Holdings Ireland Limited received in the form of in-kind
dividends in the course of the liquidation of Shire Biopharmaceuticals Holdings Ireland Limited. The
difference between the carrying amount of the shares of the subsidiary held by the Company and theloans to the subsidiary received was recognized as gain on restructuring of subsidiaries and affiliates.
Since the liquidation of Shire Biopharmaceuticals Holdings was completed during the current fiscal year,
the above transaction amount is the transaction amount for the period when the company was a related
party. The ownership of voting rights and other information for the company is based on the status justbefore the company was removed from a related party.
6. This was recognized in association with the in-kind dividends of the loans to the Company which had
been owned by Shire Ireland Finance Trading Limited in the course of capital redemption of Shire
Ireland Finance Trading Limited.

- 28 -

7. This was the acquisition of 100% ownership of Takeda Financing GK which had been wholly owned by
Baxalta US Inc. The purchase price of interests in the subsidiary is determined in consideration of its fairvalue based on factors including financial position and through mutual consultation.
8. This was recognized in association with the loan to Shire Ireland Finance Trading Limited which had
been owned by Shire Limited received in the form of in-kind dividends in the course of the liquidation of
Shire Limited. The difference between the carrying amount of the shares of the subsidiary held by theCompany and the loans to the subsidiary received was recognized as gain on restructuring ofsubsidiaries and affiliates. Since the liquidation of Shire Limited was completed during the current fiscal
year, the above transaction amount is the transaction amount for the period when the company was a
related party. The ownership of voting rights and other information for the company is based on the status
just before the company was removed from a related party.
[Per Share Information]
1. Net assets per share

JPY 2,604.87

2. Net income per share

JPY 216.60[Tax Effect Accounting]
1. Major components of deferred tax assets and deferred tax liabilities:(Million JPY)
(Deferred tax assets)
Reserve for employees’ bonuses
Research and development costs
Inventories
Deferred hedge gains or losses on derivatives under hedge
accounting
Accrued expenses
Reserve for retirement benefits
Reserve for restructuring costs
Tangible non-current assets
Patent rights
Sales rights
Investments in subsidiaries and affiliates
Securities
Net operating loss carryforward (Note)1
Excess interest under Japanese earnings stripping rules
Other
Deferred tax assets - subtotal
Valuation allowance for net operating loss carryforward (Note)1
Valuation allowance for deductible temporary difference
Total valuation allowance
Total deferred tax assets(Deferred tax liabilities)
Prepaid pension costs
Unrealized gain on available-for-sale securities
Reserve for reduction of non-current assets
Bonds
Other
Total deferred tax liabilities
Net deferred tax assets

4,531
14,67722,436
19,452
12,780
2,364
451
4,998
7,368
17,18331,426
4,149
357,82134,303
17,909551,846(318,409)(48,659)(367,068)
184,778(19,854)(4,499)(16,774)(20,011)0(61,139)
123,639(Notes)1.

As part of integration with the Shire, the subsidiaries were liquidated in order to reorganize capitalin subsidiaries. As a result of this liquidation, losses from liquidation of subsidiaries were treated as- 29 -

a tax deductible expense, which resulted in a substantial amount of Net operating loss. Of JPY
357,821 million of Net operating loss carryforwards, JPY 39,413 million was considered as
recoverable based on the estimation of future taxable profit.
2. The deferred tax assets are not recognized for the deductible temporary difference arose from therecognition of the stock of sub-subsidiaries as a dividend in kind at fair value for tax purposes inassociation with liquidation of subsidiaries in the previous fiscal year because they are not expected
to be sold in the foreseeable future. The aggregate amounts of deductible temporary difference forthis investments in subsidiaries and affiliates was JPY 3,007,046 million as of March 31, 2024. The
aggregate amounts of taxable temporary differences for investments in subsidiaries and affiliates forwhich deferred tax liabilities were not recognized was JPY 549,074 million as of March 31, 2024.
2. The effective income tax rate of the Company after application of tax effect accounting differs from the statutory
tax rate for the following reasons:Statutory tax rate
(Adjustments)
Entertainment expenses and other non-deductible tax
expenses

(%)
30.6
0.4

Dividend income and other nontaxable income(69.3)

Changes in valuation allowance(0.6)

Unitary tax on overseas subsidiaries

1.9

Changes in unrecognized deferred tax assets

50.6

Changes in unrecognized deferred tax liabilities

0.3

Deduction for research and development costs(0.1)

Deduction in foreign tax for specified overseas
subsidiaries

(0.2)

Other

(0.2)

Effective tax rate after application of tax effect accounting

13.4[Revenue Recognition]
Information that forms the basis for understanding revenues is described in [Notes for Significant
Accounting Policies] 4. Revenue for income and expenses.

[Significant Subsequent Events]
Not applicable.

- 30 -