The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)

Consolidated Financial Statements for the Year Ended March 31, 2018
FY2018 (April 1, 2017 - March 31, 2018) [UNAUDITED]May 11, 2018
Takara Bio Inc.
Tokyo Stock Exchange (1st section)4974
http://www.takara-bio.co.jp
Koichi Nakao, President
Shuichiro Matsuzaki, Executive Vice President
Tel. (077) 565-6970
Scheduled date of general shareholders’ meeting:June 22, 2018
Scheduled date of starting delivery of dividends:
June 28, 2018
Notes: 1. The accompanying financial statements have been prepared in accordance with accounting principles andpractices generally accepted in Japan.
2. Amounts are rounded down to the nearest million yen.
Company name:
Stock exchange listings:
Code number:
URL:
Company representative:
Contact:

1. Results for the year ended March 31, 2018 (Apr. 1, 2017 – Mar. 31, 2018)(1) Operating results(Percentages indicate changes from the same period of the previous fiscal year.)Year ended Mar. 31, 2018
(Millions of yen)(%)
32,312
3,555
3,861
2,335

Net sales
Operating income
Ordinary income
Net income (loss) attributable to owners of theparent
Net income per share (in yen)
Fully diluted net income per share (in yen)
Return on equity
Ordinary income to total assets ratio
Operating income to net sales ratio
Note: Comprehensive income
Reference: Income (loss) from equity method
investment

10.0
11.0
7.9
72.6

19.39
-

2,455
-

Year ended Mar. 31, 2017(%)

(Millions of yen)
29,375
3,202
3,579
1,352

(1.2)
20.1
8.4
1.4

11.24
3.8
5.7
11.0
(- %)

92
-

2.3
5.4
10.9
(85.8%)(2) Financial position
As of Mar. 31, 2018
(Millions of yen)

As of Mar. 31, 2017
(Millions of yen)

68,854
61,95989.8
513.6661,852

67,14359,98589.2
497.32
59,884

Year ended Mar. 31, 2018
(Millions of yen)

Year ended Mar. 31, 2017
(Millions of yen)

3,935
(14,755)(1,205)
10,051

3,584
13,493(280)
22,200Total assets
Net assets
Equity ratio (%)
Net assets per share (in yen)
(Reference) Equity(3) Cash flow

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents, end of year－

1 －

2. Dividends
Annual dividends per share in yen
Year ended Mar. 31,
Year ending Mar. 31,
20182019 (Forecast)
0.00
0.00
0.00
4.00
4.50
6.00
4.00
4.50
6.00
481
541
35.6
23.2
23.3
0.8
0.9

Year ended Mar. 31,
2017First quarter end
Second quarter end
Third quarter end
Year end
AnnualTotal dividend (Millions of yen)
Payout ratio (%)
Dividend on equity (%)

3. Forecast for the year ending March 31, 2019 (Apr. 1, 2018 – Mar. 31, 2019)(Percentages indicated changes from the same period of the previous fiscal year.)Six months ending
Sep. 30, 2018
Net sales
Operating income
Ordinary income
Net income attributable to owners of the parent
Net income attributable to owners of the parent
per share (in yen)

(Millions of yen)
17,755
2,500
2,557
1,646
13.68

－

2 －

Year ending Mar. 31, 2019
(%)
25.7
263.1
233.8
444.1

(Millions of yen)
36,800
5,000
5,200
3,100
25.74

(%)
13.9
40.6
34.6
32.8

The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)
4. Others(1) Changes in subsidiaries during the period(Changes in specified subsidiaries resulting in change of scope) ： Yes
Newly included: 2 (Name) Rubicon Genomics, Inc., WaferGen Bio-systems, Inc.
Excluded: 2 (Name) Rubicon Genomics, Inc., WaferGen Bio-systems, Inc.
Note: For details, please see 3. Consolidated Financial Statements and Important Notes (5) Notes toConsolidated Financial Statements (Changes in Subsidiaries during the Period) on page 10 of the attacheddocument.
(2) Changes in accounting policies, changes in accounting estimates, and retrospective restatement
1) Changes based on revisions of accounting standard： No
2) Changes other than ones based on revisions of accounting standard： No
3) Changes in accounting estimates： No4) Restatement： No(3) Number of outstanding shares (common stock)1) Number of outstanding shares at year end (Treasury stocks are included)
120,415,600
As of March 31, 2018
As of March 31, 2017
120,415,600
2) Number of treasury stocks at year end
As of March 31, 2018
As of March 31, 2017
3) Average number of outstanding shares
120,415,600
As of March 31, 2018
120,415,600
As of March 31, 2017
These financial statements are not subject to auditing.
Comment regarding appropriate use of earnings forecasts and other special notes
Forward-looking statements contained in this document are determined by the Takara Bio Group based on information
currently available to the Group and include a number of uncertainties. Actual results could differ from these forecasts
due to changes in conditions that occur in the future. For information regarding the above, please refer to 1. Financial
Results Overview (4) Future Outlook, on page 3 of the attached document.
The Group will hold a briefing for institutional investors and analysts on May 15, 2018. The material handed out at thisbriefing and a review of questions and answers will be posted on our website.

－

3 －The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)
Contents of the attached document
1. Business Results Overview …………………………………………………………………………………………………...
(1) Overview of Financial Results for the Year Ended March 31, 2018………………………………………………………
(2) Overview of Financial Position for the Year Ended March 31, 2018……………………………………………………..
(3) Overview of Cash Flows for the Year Ended March 31, 2018…………………………………………………………….
(4) Future Outlook ……………………………………………………………………………………………………………
2. Basic Concept on Selection of Accounting Standards ……………………………………………………………………….
3. Consolidated Financial Statements and Important Notes …………………………………………………………………….
(1) Consolidated Balance Sheets ……………………………………………………………………………………………..
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ………………………….
(Consolidated Statements of Income) …………………………………………………………………………………...
(Consolidated Statements of Comprehensive Income) ………………………………………………………………….
(3) Consolidated Statements of Changes in Net Assets……………………………………………………………………….
(4) Consolidated Statements of Cash Flows ………………………………………………………………………………….
(5) Notes to Consolidated Financial Statements ……………………………………………………………………………...
(Notes on Premise of Going Concern) ………………………………………………………………………………….
(Changes in Subsidiaries during the Period)…………………………………………………………………………….
(Business combination-related events) ………………………………………………………………………………….
(Segment Information) ………………………………………………………………………………………………….
(Per Share Information) …………………………………………………………………………………………………
(Significant Subsequent Events) ………………………………………………………………………………………..
4. Supplementary Information …………………………………………………………………………………………………..
(1) Trends in Key Management Indicators……………………………………………………………………………………
(2) Comparative Consolidated Statement of Income …………………………………………………………………………
(3) Comparative Statement of Income Relating to Consolidated Earnings Forecasts ……………………………………….

－

1 －

2
3
3
3
3
3
4
4
6
6
7
8
9
10
10
10
10
13
15
16
16
16
17
18

1. Financial Results Overview(1) Overview of Financial Results for the Year Ended March 31, 2018
In the fiscal year under review, ended March 31, 2018, the Japanese economy continued to maintain a moderate recovery as
corporate earnings and employment and income situations improved. In contrast, although the global economy including the U.S.
showed a sign of recovery, the future of the global economy continues to be unpredictable due to the upsurge in uncertainty
regarding such issues as policy trends in the U.S. and global geopolitical risk.
Under these circumstances and based on the newly established three-year Takara Bio’s Medium-Term Management Plan FY2020,
the Takara Bio Group (the Group) promoted strategies of three core business segments: the Bioindustry Business, the Gene Therapy
Business, and the Agribio Business and strengthened business bases which support them to enhance the Group’s standing as a
global and industrial company for regenerative medical products and, further, promoted initiatives aimed at achieving prodigious
growth.
As a result, overall net sales increased 10% year on year to ¥32,312 million, on contributions from newly consolidated subsidiaries
and from sales for contracted services greatly exceeding those of the same period of the previous fiscal year. Cost of sales increased
9.9% year on year to ¥13,657 million, and gross profit increased 10% year on year to ¥18,655 million due to the increase in net
sales. Selling, general and administrative (SG&A) expensed increased 9.8% year on year to ¥15,099 due to the increase in personnel
costs of newly consolidated subsidiaries and amortization of goodwill, but the Group recorded operating income up 11.0% year on
year to ¥3,555 million.
As regards non-operating income and expenses, ordinary income increased 7.9% to ¥3,861 despite a decline in interest income.
Regarding extraordinary income and losses, income before income taxes and minority interests increased 19.8% year on year to¥3,361 million, and net income attributable to owners of the parent increased 72.6% year on year to ¥2,335 due to the eliminationof income taxes in accordance with the Group’s appropriation of deferred tax assets.
The statuses of Group business segments are as follows.

Bioindustry Business
Given the ever-widening activities of biotechnology R&D, the Group has positioned the the Bioindustry Business as its corebusiness, which mainly develops and provides products and services supporting such R&D activities.
In the fiscal year under review, sales by product category saw sales of scientific instruments decline year-on-year, but sales ofresearch reagents and contracted services increase year on year.
As a result of the above, sales to external customers for this business increased 11.3% year on year to ¥29,568, and gross profit
increased 10.7% year on year to ¥17,553. Selling, general and administrative (SG&A) expensed increased 12.7% year on year to¥10,870 due to the increase in personnel costs of newly consolidated subsidiaries and amortization of goodwill, but group recorded
operating income up 7.5% year on year to ¥6,683 million.
Gene Therapy Business
The business focuses on the early commercialization of gene therapies for disease such as cancer. These therapies utilize original
Takara Bio technologies such as the RetroNectin Method, a high efficiency gene transduction method; the RetroNectin
expansion-culture system, a highly efficient lymphocyte propagation technology; as well as siTCR.
In the fiscal year under review, ¥500 million in licensing fees for development and sales related to the oncolytic virus HF10 was
generated.
As a result, net sales to external customers for this business were ¥500 million (Year on year ratio 100%), and gross profit wasalso ¥500 million. SG&A expenses decreased 3.0% year on year to ¥1,822 million due to decrease R&D expenses. Accordingly,
operating loss increased to ¥1,322 million, compared with ¥1,380 million in the same period of previous fiscal year.
AgriBio BusinessThis business uses its unique leading-edge biotechnology to identify the scientific basis of foodstuffs. Based on this evidence, it
develops, manufactures, and sells functional food ingredients. The AgriBio Business focuses on rolling out products related to
Gagome kombu (kelp)-derived “Fucoidan,” agar-derived agaro-oligosaccharide, Ashitaba (Angelica herb)-derived “Chalcone,”the herb (Peucedanum japonicum)-derived "Isosamidin," yam(Dioscorea esculenta)-derived “Yamsgenin”, and mushroom.
In the fiscal year under review, net sales of mushroom-related products increased year on year, and net sales of functioinal
foods-related products declined year on year.
Consequently, net sales to external customers for this business decreased 2.5% year on year to ¥2,243 million, and gross profit
increased 1.4% to ¥601 million due to a decline of cost percentage from change of product composition and others. SG&A
－ 2 －The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)
expenses increased 1.1% year on year to ¥494 million, and the operating income increased 2.7% year on year to ¥107 million.
(2) Overview of Financial Position for the Year Ended March 31, 2018
At the end of the fiscal year under review, ended March 31, 2018, total assets were ¥68,854 million, an increase of ¥1,710
million compared with that at the end of the previous fiscal year. This increase primarily resulted from a decrease of ¥10,540
million in cash and deposits despite an increase of ¥11,862 million in intangible assets.
Total liabilities were ¥6,894 million, a decrease of ¥263 million compared with that at the end of the previous fiscal year. This
increase primarily resulted from a decrease of ¥153million in accounts payable-other amount and a decrease of ¥91 million inprovision for bonus.
Total net assets stood at ¥61,959 million, an increase of ¥1,973 million compared with that at the end of the previous fiscal
year. The main factors were an increase of ¥1,853 million in retained earnings.
(3) Overview of Cash Flows for the Year Ended March 31, 2018
Net cash provided by operating activities was ¥3,935 million, up by ¥351 million compared with the previous fiscal year. Thiswas primarily due to an increase of ¥555 million in payments due to the increase in income before taxes and minority interests.
Net cash provided by investing activities was ¥14,755 million, a transition from revenue to expenditure compared with theprevious fiscal year, with expenses increasing by ¥28,249 million. This was primarily due to a ¥12,396 million increase inpurchase of shares of subsidiaries resulting in change in scope of consolidation, and the elimination of ¥10,679 million fromproceeds from sales and redemption of securities.
Net cash used in financing activities was ¥1,205 million, a ¥925 million increase compared with the previous fiscal year. Thiswas primarily because of a ¥547 million increase in redemption of bonds, and a ¥264 million increase in cash dividends paid.
As a result of the above, cash and cash equivalents at fiscal year-end, including the effect of exchange rate change on cash andcash equivalents, stood at ¥10,051 million, down ¥12,149 million from the previous fiscal year-end.
(4) Future Outlook
The Group established and initiated the three-year Takara Bio Medium-Term Management Plan FY2020 (“Medium-Term
Management Plan”), which began in the fiscal year under review and lasts until FY2020. The Group aims to steadily implement
the strategies outlined in the Medium-Term Management Plan, enhance its standing as a global and industrial company forregenerative medical products, and achieve prodigious growth.
In the year ending March 31, 2019, the second year of the plan, the Group is forecasting net sales of ¥36,800 million,
operating income of ¥5,000 million, ordinary income of ¥5,200 million and net income attributable to owners of the parent of¥3,100 million with licensing fees for development and sales related to NY-ESO-1 siTCRTM and CD19 CAR gene therapy
products. Also, the Group revises up the operating income targets in final fiscal year of the plan, considering the agreement forthe development and sales and other change factors.
For a comparison of results with the year ended March 31, 2018, refer to “(3) Comparative Statement of Income Relating toConsolidated Earnings Forecasts” under “3. Supplementary Information” on page 19. For details on the Medium-Term Management
Plan revised, refer to “Announcement on revision of Takara Bio Medium-Term Management Plan FY2020” released today, May
11, 2018.

2. Basic Concept on Selection of Accounting Standards
The Group drafts consolidated financial statements based on Japanese standards taking into consideration comparability between
fiscal periods as well as comparability among companies.
The Group’s policy regarding the application of International Financial Reporting Standards is to apply them as appropriate after
taking into consideration domestic and international circumstances.

－

3 －3. Consolidated Financial Statements and Important Notes(1) Consolidated Balance Sheets(Millions of yen)
Fiscal Year under Review(Apr. 1, 2017 –Mar. 31, 2018)

Previous Fiscal Year
(Apr. 1, 2016 –Mar. 31, 2017)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net
Construction in progress
Total Property, plant and equipment
Intangible assets
Goodwill
Technology assets
Other
Total intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Net defined benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets－

4 －28,078
7,455
2,000
4,032
459
970
252
745
(30)
43,964

17,537
8,031
2,000
4,484
334
1,192
515
978
(42)
35,032

12,699(5,032)
7,667
6,866(4,517)
2,349
6,174(3,946)
2,228
7,297
23
(22)
0
34
19,577

12,825(5,611)
7,214
7,561(5,360)2,201
7,080(4,613)
2,466
6,588
16
(16)
－
63
18,534

1,213
－
1,087
2,301

8,259
4,670
1,223
14,163

856
26
40
387
(11)
1,299
23,17867,143

800
139
95
87
－
1,123
33,821
68,854

The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)(Millions of yen)
Fiscal Year under Review(Apr. 1, 2017 –Mar. 31, 2018)

Previous Fiscal Year
(Apr. 1, 2016 –Mar. 31, 2017)
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term bank loans
Accounts payable-otherAccrued income taxes
Provision for bonuses
Other
Total current liabilities
Noncurrent liabilities
Long-term debt
Deferred tax liabilities
Net defined benefit liability
Other
Total noncurrent liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Total shareholders' equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Noncontrolling interests
Total net assets
Total liabilities and net assets

－

5 －

1,944
47
2,058
375
425
1,174
6,025

1,875
－
1,905
431
333
1,199
5,745

82
210
622
215
1,131
7,157

－
183
659
307
1,149
6,894

14,96532,893
10,43258,291

14,96532,893
12,28560,144

2,023
(429)
1,593
100
59,985
67,143

2,042
(334)
1,707
106
61,95968,854

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)Previous Fiscal Year
(Apr. 1, 2016 –Mar. 31, 2017)(Millions of yen)
Fiscal Year under Review(Apr. 1, 2017 –Mar. 31, 2018)

29,375
12,422
16,95232,312
13,657
18,655

854
(1)
3,082
236
135
4,101
5,341
13,749
3,202

729
11
3,675
164
177
4,653
5,687
15,099
3,555

108
226
－
36
73
445

77
197
5
88
32
402

2
44
10
9
1
68
3,579

19
－
28
45
2
96
3,861

2
2

0
0

108
667
775
2,805
1,492
(43)
1,449
1,356

55
446
501
3,361
1,155
(132)
1,023
2,338

3

3

1,352

2,335

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Promotion expenses
Provision of allowance for doubtful accounts
Employees' salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Research and development expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Subsidy income
Foreign exchange gains
Rent of Real estate
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Real estate leasing expense
Dormant fixed asset cost
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of noncurrent assets
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of noncurrent assets
Impairment loss
Total extraordinary losses
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net income
Net income (loss) attributable to the noncontrollinginterest
Net income attributable to owners of the parent－

6 －The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)(Consolidated Statements of Comprehensive Income)(Millions of yen)Previous Fiscal Year
(Apr. 1, 2016 –Mar. 31, 2017)

Fiscal Year under Review(Apr. 1, 2017 –Mar. 31, 2018)

1,356

2,338

(1,091)(172)(1,264)
92

21
95
117
2,455

94
(2)

2,449
5

Net income
Other comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Noncontrolling interest－

7 －(3) Consolidated Statements of Changes in Net Assets
Previous Fiscal Year (Apr. 1, 2016 – Mar. 31, 2017)(Millions of Yen)
Shareholders' equity

Capital stock
Balance at the
beginning of current
periodChanges of items during
the period
Dividends fromsurplus14,965

Capitalsurplus32,893

Net income
Net changes of items
other thanshareholders' equity
Total changes of items
during the period
Balance at the end ofcurrent period

Retainedearnings

Accumulated other comprehensive income
Total
Total
Foreign currency Remeasurements accumulatedshareholders'translationof defined
otherequityadjustment
benefit planscomprehensive
income
3,109

(257)

2,852

Minority
interests

Total
net assets

102

60,1109,295

57,155

(216)

(216)

(216)

1,352

1,352

1,352
(1,086)(172)(1,258)(2)(1,260)

－

－

1,136

1,136

(1,086)(172)(1,258)

(2)

(124)

14,96532,893

10,43258,291

2,023

(429)

1,593

100

59,985

Fiscal Year under Review (Apr. 1, 2017 – Mar. 31, 2018)(Millions of Yen)
Shareholders' equity

Capital stock
Balance at the
beginning of current
periodChanges of items during
the period
Dividends fromsurplus14,965

Capitalsurplus32,893

Net income
Capital increase(decrease) ofconsolidated
subsidiaries
Net changes of items
other thanshareholders' equity
Total changes of items
during the period
Balance at the end ofcurrent period

Retainedearnings

Accumulated other comprehensive income
Total
Total
Foreign currency Remeasurements accumulatedshareholders'translationof defined
otherequityadjustment
benefit planscomprehensive
income
(429)

1,593

Total
net assets

100

59,985

10,43258,291

(481)

(481)

(481)

2,335

2,335

2,335

(0)

2,023

Minority
interests

(0)

0

－

19

95

114

5

120

－

(0)

1,853

1,853

19

95

114

5

1,973

14,96532,893

12,28560,144

2,042

(334)

1,707

106

61,959－8 －The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)(4) Consolidated Statements of Cash Flows(Millions of Yen)

Previous Fiscal Year
(Apr. 1, 2016 –Mar. 31, 2017)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests
Depreciation and amortization
Impairment loss
Depreciation and amortization on other
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Interest income
Interest expenses
Loss (gain) on sales and retirement of non-current
assetsDecrease (increase) in notes and accounts receivabletrade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payabletrade
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Income taxes paid for prior periods
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Payments for time deposits
Proceeds from time deposits
Purchases of marketable securities
Proceeds from sales and redemption of securities
Purchase of property, plant and equipment andintangible assets
Proceeds from sales of property, plant and equipment
and intangible assets
Purchase of other depreciable assets
Purchase of shares of subsidiaries accompanying
changes in the scope of consolidation
Other, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Increase (decrease) in short-term bank loans, net
Repayments of long-term debt
Redemption of bonds
Cash dividends paid
Repayments of lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period－

9 －Fiscal Year under Review(Apr. 1, 2017 –Mar. 31, 2018)

2,805
1,722
667
165
162
(9)
218
135
(108)
2

3,361
2,568
446
160
489
0
(276)
35
(77)
19

105

54

(720)

(246)

(594)

(301)

288

(341)

403
(164)
5,079
99
(2)
(1,419)
(172)
3,584

(675)
(197)
5,020
94
(3)
(1,175)－
3,935(5,776)
13,392(7,026)
14,679(12,383)
10,860(4,000)4,000(1,443)(1,499)

14

465

(74)

(93)

－

(12,396)(272)
13,493291(14,755)

(14)
(47)
－
(216)
(1)
(280)

－
(130)
(547)
(480)
(46)
(1,205)

(166)

(123)

16,631
5,568
22,200(12,149)
22,20010,051

(5) Notes to Consolidated Financial Statements(Notes on Premise of Going Concern)
No items to report.
(Changes in Subsidiaries during the period)
Takara Bio USA Holdings Inc. acquiring shares of Rubicon Genomics, Inc., Rubicon Genomics, Inc was included in the scopeof consolidation for the three months ended June 30, 2017 as a specified subsidiary. However, as Rubicon Genomics, Inc. wasextinguished due to an absorption-type merger in which consolidated subsidiary Takara Bio USA, Inc. was the surviving
company, this entity has been excluded from the scope of consolidation for the three months ended June 30, 2017.
Also, due to the wholly owned subsidiary Takara Bio USA Holdings Inc. acquiring shares of WaferGen Bio-systems, Inc.,
WaferGen Bio-systems, Inc., its subsidiary WaferGen Biosystems Europe S.a.r.l., and WaferGen, Inc. were included in the scopeof consolidation for the three months ended June 30, 2017. However, as WaferGen Bio-systems, Inc. and WeferGen, Inc. wereextinguished due to an absorption-type merger in which consolidated subsidiary Takara Bio USA, Inc. was the surviving
company, and due to WaferGen Biosystems Europe S.a.r.l. being insignificant as a defunct company, these entities has been
excluded from the scope of consolidation for the six months ended September 30, 2017. Note that during this period, WaferGen
Bio-systems, Inc. qualified as a specified subsidiary of the Company.
(Business combination-related events)(Business combination due to Acquisition)
1. Acquisition of Rubicon Genomics, Inc.
The Group made the decision at the board of directors’ meeting held on December 15, 2016 pursuant to which wholly
owned subsidiary Takara Bio USA Holdings, Inc. (TBUSH) would acquire the shares of Rubicon Genomics, Inc.
(“Rubicon”) and make it a subsidiary. Based on this, TBUSH acquired shares of Rubicon Genomics, Inc. on January 17,2017 (US local time)(1) Outline of the business combination
1) Name to be acquired company and business description
Name to be acquired company
Rubicon Genomics, Inc.
Business description
Manufacture and sales of research reagents
2) Primary reason for the business combination
The Group is concentrating on developing the next-generation sequencing reagent kits that are used in a wide range offields from basic research to industrial applications. By welcoming Rubicon into the Group, Rubicon’s sample
preparation technology for ultra-low DNA sequence analysis complements the Group’s sample preparation technology
for ultra-low RNA sequence analysis, allowing the Group to provide a wide range of products and services in the fieldof ultra-low nucleic acid analysis. Additionally, the Group will be able to provide products and services in a wide rangeof fields from basic research to industrial applications by adding WaferGen Bio-systems, Inc.’s pre-processing system(instruments) for next generation sequence analysis.
3) Date of business combination
January 17, 2017 (US local time)4) Legal form of business combination
Acquisition of shares5) Name of the acquired company after the combination
Rubicon Genomics, Inc.
Rubicon merged with Takara Bio USA, Inc., a wholly owned subsidiary TBUSH as of March 31, 2017 (US local time)6) Ration of voting rights acquired
100%7) Basis for determining the acquiring company
Share acquisition in consideration for cash.
(2) Period of acquired company’s performance stated on the consolidated financial statements
From January 17, 2017 to December 31, 2017(3) Acquisition costs of the acquired company and related details of each class of consideration for acquisition are as
follows:(Thousands of U.S. Dollars)

Consideration for acquisition

Cash

Acquisition costs$74,426$74,426－

10 －The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)(4) Description and amount of major acquisition-related costs(Thousands of U.S. Dollars)

Advisory fees and commissions
Cash$2,934(5) Amount of goodwill, reason of occurrence, and method/period of amortization
1)

Amount of goodwill:2)

Reason of occurrence
It has been occurred primarily due to perspective on excess earning possibilities expected from business development(Thousands of U.S. Dollars)$44,328

3)

in the future.
Method and term of amortization

Equivalent amortization over 20 years(6) Major description and amount of assets received on the date of business combination and liability owed.
(Thousands of U.S. Dollars)

Current assets$4,837

Non-current assets
Total assets$77,880$82,717

Current liabilities
Non-current liabilities$3,429$4,861

Total liabilities$8,290(7) Amount divided to non-current assets other than goodwill and related details of each major class and period ofweighted average amortization of each entire and major class.
Period of weighted average amortization
Class
Technology assets

amount$32,100(Thousands of U.S. Dollars)

Period of weighted average amortization
7 years

Customers-related assets$600
9 years(8) Estimated amount and calculation method of influence on consolidated statement of income in the fiscal year, in case ofassuming completion of business combination at the first day of consolidated fiscal year.
(Thousands of U.S. Dollars)

Net sales
Operating income$555($1,310)

Ordinary income
Income before income taxes and minority interest($1,317)($9,932)

Net income attributable to owners of parent
Net income per share($9,932)($0.08)(Calculation method for estimated amount)
Estimated amount of influence is the amount difference between net sales/profit and loss information stated on
consolidated statements of income and net sales/profit and loss information calculated when assuming completion ofbusiness combination at the first day of consolidated fiscal year.
There notes are not subject to audit certification.
2.

Acquisition of WaferGen Bio-systems, Inc.
The Group made the decision at the board of directors’ meeting held on May 13, 2016 pursuant to which wholly owned
subsidiary Takara Bio USA Holdings, Inc (“TBUSH”). would acquire the shares of WaferGen Bio-systems, Inc.
(“WaferGen”) and TBUSH entered into a merger agreement with WaferGen on the same day. Based on the agreement,
TBUSH completed the acquisition on February 28, 2017 (US local time)(1) Outline of the business combination
1)

2)

Name to be acquired company and business description
Name to be acquired company
WaferGen Bio-systems, Inc.
Business description
Manufacture and sales of research reagents and equipment
Primary reason for the business combination
The Group supplies research reagents, scientific instruments, and contract services to biotechnology researchers.
Specifically, the Group focuses on development of reagent kits for next generation sequencers and reagent kits using
SMART technology which efficiently amplifies genes from ultra low of RNA samples under the brand name of－

11 －Clontech®. Currently, the Group is developing reagents optimized for automatic analysis devices targeted for use in
the clinical field.
WaferGen provides devices and reagent kits for single-cell analysis, and their unique massively-parallel qPCR device
for small amount samples, to biotechnology companies, pharmaceutical companies and clinical laboratories.
The Group expects synergies and increased sales of device and single-cell reagent kits from the combination of3)

WaferGen technology including single-cell analysis and molecular biotechnology of the Group.
Date of business combination4)

February 28, 2017 (US local time)
Legal form of business combination

5)

Acquisition of shares
Name of the acquired company after the combination
WaferGen Bio-systems, Inc.
WaferGen. merged with Takara Bio USA, Inc., a wholly owned subsidiary TBUSH as of May 31, 2017 (US local time)

6)

Ration of voting rights acquired
100%

7)

Basis for determining the acquiring company
Share acquisition in consideration for cash.

(2) Period of acquired company’s performance involved in the consolidated statements
From March 1, 2016 to December 31, 2017(3) Acquisition costs of the acquired company and related details of each class of consideration for acquisition are as
follows:(Thousands of U.S. Dollars)

Consideration for AcquisitionCash$37,545

Acquisition costs(4) Description and amount of major acquisition-related costs$37,545(Thousands of U.S. Dollars)

Advisory fees and commissions

Cash$3,855(5) Amount of goodwill, reason of occurrence, and method/period of amortization
1) Amount of goodwill:(Thousands of U.S. Dollars)$22,6822)

Reason of occurrence
It has been occurred primarily due to perspective on excess earning possibilities expected from business developmentin the future.

3)

Method and term of amortization
Equivalent amortization over 20 years(6) Major description and amount of assets received on the date of business combination and liability owed.
(Thousands of U.S. Dollars)

Current assets
Non-current assets$4,669$46,080

Total assets
Current liabilities$50,749$8,257

Non-current liabilities
Total liabilities$4,946$13,204(7) Amount divided to non-current assets other than goodwill and related details of each major class and period ofweighted average amortization of each entire and major class.
Period of weighted average amortization
Class
amountPeriod of weighted average amortization

Technology assets
Customers-related assets

8 years
9 years(Thousands of U.S. Dollars)$15,200
$300

－

12 －

The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)(8) Estimated amount and calculation method of influence on consolidated statement of income in the fiscal year, in case ofassuming completion of business combination at the first day of consolidated fiscal year.
(Thousands of U.S. Dollars)

Net sales$537

Operating income
Ordinary income($7,476)($7,555)

Income before income taxes and minority interest
Net income attributable to owners of parent($7,555)($7,557)

Net income per share(Calculation method for estimated amount)($0.06)

Estimated amount of influence is the amount difference between net sales/profit and loss information stated on
consolidated statements of income and net sales/profit and loss information calculated when assuming completion ofbusiness combination at the first day of consolidated fiscal year.
There notes are not subject to audit certification.
(Segment Information)
1. Outline of Reportable Segments
The Group’s reportable segments are components of the Group for which separate financial information is available that isevaluated regularly by the Board of Directors to determine allocation of management resources and assess performance.
The Group has established business divisions by product and service. Each division drafts comprehensive strategies forthe products and service including Japanese and overseas subsidiaries and implements them in their business activities.
Accordingly, the Group is comprised of segments by products and services based on these business divisions and has
defined three reportable segments. These three reportable segments are Bioindustry, Gene Therapy, and AgriBio.
The primary products of each segment are presented in the following table.
Reportable segment
Bioindustry
Gene Therapy

AgriBioPrimary products
Research reagents (genetic, cellular and protein engineering reagents), scientific instruments,
contracted services and compensation for gene related patents, etc.
Licensing fees for development and sales relating to the gene therapy products
Functional foods (products related to Gagome kombu [kelp]-derived “Fucoidan," agar-derived
agaro-oligosaccharide, Ashitaba [Angelica herb]-derived “Chalcone,” the herb [Peucedanum
japonicum]-derived “Isosamidin,” yam-derived “Yamsgenin,” and products related tomushroom “Terpene”); functional food R&D contracting; compensation for patents, etc.,
relating to functional foods; mushroom cultivation (honshimeji mushrooms, hatakeshimeji
mushrooms, brown beech mushrooms, and cultivation medium activators) and compensation
for patents relating to mushrooms

2. Calculation Method for Net Sales, Income or Loss, Assets, Liabilities, and Other Items of Each Reportable Segment
The accounting treatment of reportable business segments is in accordance with the accounting policies adopted for thecreation of consolidated financial statements.
The figures for the income of reportable segments are based on operating income.
Corporate income is based on the prevailing market price.

－

13 －

3. Net sales, Income (Loss), Assets, Liabilities, and Other Items by Reportable Segment
Previous Fiscal Year (From Apr. 1, 2016, to Mar. 31, 2017)

Bioindustry

Gene
Therapy

26,573
－

500
－

2,301

26,573500

Segment income (loss)

6,218(1,380)

Segment assets

51,017

3,663

Other items
Depreciation and amortization

1,165

331
－

101
－

Net sales
External customers
Corporate
Total

AgriBio

Adjustment(Note: 1)

Total(Millions of yen)Amountrecognized inconsolidated
financialstatements(Note: 2)

29,375

－

5

5

(5)

29,375－2,307

29,380(5)

29,375104

4,942(1,739)

3,202

2,625

57,306

9,837

67,143

1,598

123
－

1,722

Amortization of goodwill
162
162
162
Increase in total fixed assets,
property, plant and equipment
1,036
562
18
1,616
32
1,648
and intangible assets
Notes: 1. The adjustment for segment income was a loss of ¥1,739 million comprising of the Company not allocated toreportable segments. Expenses of the Company primarily consist of general and administrative expenses and R&D
expenses not attributed to reportable segments.
2. Segment income (loss) has been adjusted to the operating income of consolidated financial statements.
Fiscal Year under Review (From Apr. 1, 2017, to Mar. 31, 2018)

Bioindustry

Gene
Therapy

AgriBio

29,568
－

500
－

2,243
7

32,3127(7)32,312－

29,568500

2,251

32,320(7)

32,312

Segment income (loss)

6,683(1,322)

107

5,467

(1,912)

3,555

Segment assets

52,185

2,594

2,165

56,946

11,907

68,854

Total

Adjustment(Note: 1)(Millions of yen)Amountrecognized inconsolidated
financialstatements(Note: 2)

Net sales
External customers
Corporate
Total－

Other items
Depreciation and amortization
2,049
300
90
2,441
127
2,568
－
－
－
Amortization of goodwill
489
489
489
Increase in total fixed assets,
property, plant and equipment
1,302
118
32
1,453
85
1,539
and intangible assets
Notes: 1. The adjustment for segment income was a loss of ¥1,912 million comprising of the Company not allocated toreportable segments. Expenses of the Company primarily consist of general and administrative expenses and R&D
expenses not attributed to reportable segments.
2. Segment income (loss) has been adjusted to the operating income of consolidated financial statements.

－

14 －

The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)
4.

Information about impairment loss for non-current assets
Previous fiscal year (From Apr. 1, 2016, to Mar. 31, 2017)
Bioindustry
Impairment loss

Gene Therapy

AgriBio－

384－

Reconciliations

Consolidated

283

667

Notes: The amount of “Reconciliations” is impairment loss of corporate assets which does not belong to the reportablesegments.
Fiscal year under review (From Apr. 1, 2017, to Mar. 31, 2018)
Impairment loss

Bioindustry

Gene Therapy－－

AgriBio Reconciliations－

Consolidated

446

446

Notes: The amount of “Reconciliations” is impairment loss of corporate assets which does not belong to the reportablesegments.
(Per Share Information)
Previous fiscal year
(From Apr. 1, 2016, to Mar. 31, 2017)

Fiscal year under review(From Apr. 1, 2017, to Mar. 31, 2018)¥497.32

Net assets per share¥513.66¥11.24¥19.39Net income per share
Notes: 1. Fully diluted net income per share is not presented since there were no potential shares.
2. The basis of calculation of net income per share is as follows.
Previous fiscal year
Fiscal year under review(From Apr. 1, 2016, to(From Apr. 1, 2017, toMar. 31, 2017)
Mar. 31, 2018)
Net income per share
Net income attributable to owners of the parent(¥ million)
Amount not attributable to common shareholders(¥ million)
Net income attributable to owners of the parent inaccordance with the common stock (¥ million)
Average number of shares outstanding during the term
(1,000 shares)

－

15 －

1,352

2,335

－

－

1,352

2,335

120,415

120,415(Significant Subsequent Events)(Execution of Significant agreement)
The Group entered into an agreement with Otsuka Pharmaceutical Co., Ltd (“Otsuka”) for domestic co-development and exclusive
sales of NY-ESO-1 siTCRTM gene therapy product (Development code: TBI-1301, TBI-1301-A) and CD19 CAR gene therapy product(TBI-1501) as of April 9, 2018.
Under the agreement, both companies will aim cooperatively for the early manufacture and sales approval of two therapeutic products
in Japan. The Group is responsible for manufacturing and quality control of the two therapeutic products, investigational products, while
Otsuka is responsible for clinical trials, other clinical studies, regulatory submissions for manufacture and sales approval, and safety
data collection of the products. After acquisition for manufacture and sales approval, the Group and Otsuka are exclusively responsible
for manufacturing and selling in Japan, respectively. There are no limitation on the target indications in the agreement. Otsuka also holds
a right of first refusal for nine Asian countries outside Japan.
The Group will receive certain upfront and milestone payments from Otsuka depending on the achievement of certain development
based on the execution of the agreement. The Group will supply Otsuka with the products under certain financial condition. As for
NY-ESO-1 siTCRTM gene therapy product, The Group will receive milestone payments upon the achievement of target sales in addition
to the running royalty on Net Sales. Above up front and milestone payments will be up to a maximum total amount of around 6.3 billionyen.

4. Supplementary Information(1) Trends in Key Management Indicators
1) Cash Flow
(Millions of yen)
TermPrevious fiscal year
(From Apr. 1, 2016, to Mar. 31, 2017)

Fiscal year under review(From Apr. 1, 2017, to Mar. 31, 2018)

3,584

3,935

13,493(14,755)(280)(1,205)

Net cash provided by (used in) operating
activities
Net cash provided by (used in) investing
activities
Net cash provided by (used in) financing
activities
2) Net Sales by Region

Equivalent Period of Previous Fiscal Year (from Apr. 1, 2016 to Mar. 31, 2017)(Millions of yen)
Japan

U.S.

14,561

China
6,063

Asia, excluding
China

4,754

Europe

1,406

Other

2,336

Total
253

29,375Period under Review (from Apr. 1, 2017 to Mar. 31, 2018)(Millions of yen)
Japan

U.S.

14,266

China
7,240

Asia, excluding
China

5,524

Europe

1,754

Other

3,257

Total
268

32,312

3) R&D Expenses by Reportable Segment
Term(Millions of yen)
Fiscal year under review(From Apr. 1, 2017, to Mar. 31, 2018)

Previous fiscal year
(From Apr. 1, 2016, to Mar. 31, 2017)

Bioindustry

2,094

2,693

Gene therapy

1,860

1,804

AgriBio29

6

Corporate

116

148

Total

4,101

4,653

－

16 －

The original disclosure in Japanese was released on May 11, 2018 at 15:00 (GMT+8)(2) Comparative consolidated statement of income
Year ended
Mar. 31, 2017

Year ended
Mar. 31, 2018

(Rounded down to one million yen)
Year on year
Year on year
ChangeRatio（Net Sales）
19,436
2,911
3,800
424
26,573
500
842
1,459
2,301
29,37522,207
2,635
4,210
514
29,568
500
693
1,550
2,243
32,312

2,770
(275)
409
90
2,995
－
(148)
90
(58)
2,937

114.3%
90.5%
110.8%
121.3%
111.3%
100.0%
82.3%
106.2%
97.5%
110.0%

29,375
12,422
16,952
13,749
594
89
854
4,101
7,917

32,312
13,657
18,65515,099
643
83
729
4,653
8,750

2,937
1,234
1,702
1,349
48
(5)
(124)
552
833

110.0%
109.9%
110.0%
109.8%
108.1%
93.5%
85.4%
113.5%
110.5%

192
3,202

239
3,555

46
352

124.3%
111.0%

445
68
3,579

402
96
3,861

(42)
27
282

90.4%
139.4%
107.9%

2
775

0
501

(1)
(274)

30.3%
64.6%

2,805
1,449
1,356

3,361
1,023
2,338

555
(426)
981

119.8%
70.6%
172.4%

3
1,352

3
2,335

(0)
982

92.3%
172.6%

1,722

2,568

846

149.2%

162

489

327

301.6%

Fiscal year ended
Mar. 31, 2017
6,218
(1,380)104(1,739)3,202

Fiscal year ended
Mar. 31, 2018
6,683
(1,322)107(1,912)
3,555

Year on year
Change
465
57
2
(172)
352

Year on year
Ratio
107.5%－
102.7%－
111.0%

Research reagents
Scientific instruments
Contracted services
Other
Bioindustry Total
Gene therapy
Functional foods
Mushrooms
AgriBio total
Total Net Sales(Operating Income and Loss)
Net Sales
Cost of sales
Gross profits
SG&A expenses
Transportation expenses
Advertising expenses
Promotion expenses
R&D expenses
Administrative expenses, other
Enterprise taxes (external standards taxation)
Operating income(Non-operating Income and Expenses)
Non-operating income
Non-operating expenses
Ordinary income(Extraordinary Income & Losses)
Extraordinary income
Extraordinary losses
Income before income taxes and minority interests
Income taxes
Net Income
Net income (loss) attributable to non controllinginterests
Net income attributable to owners of the parent
Depreciation and amortization (Property, plant andequipment and intangible assets)
Amortization of goodwill
Profit and loss by business segment (Operating income)Bioindustry
Gene therapy
AgriBio
Corporate
Total

－

17 －

(3) Comparative Statement of Income Relating to Consolidated Earnings Forecasts(Rounded down to one million yen)
Year ended Mar.
31, 2018
Actual（Net Sales）
Research reagents
Scientific instruments
Contracted services
Other
Bioindustry Total
Gene therapy
Functional foods
Mushrooms
AgriBio total
Total Net Sales(Operating Income and Loss)
Net Sales
Cost of sales
Gross profits
SG&A expenses
Transportation expenses
Advertising expenses
Promotion expenses
R&D expenses
Administrative expenses, other
Enterprise taxes (external standards
taxation)
Operating income(Non-operating Income and Expenses)
Non-operating income
Non-operating expenses
Ordinary income(Extraordinary Income & Losses)
Extraordinary income
Extraordinary losses
Income before income taxes and minority
interests
Income taxes
Net Income
Net income (loss) attributable tononcontrolling interests
Net income attributable to owners of theparentYear ending Mar.
31, 2019
Current forecast
for FY2019

Year on year

Year on year

ChangeRatio

22,207
2,635
4,210
514
29,568
500
693
1,550
2,243
32,312

24,071
3,262
5,002
382
32,719
1,860
555
1,664
2,219
36,800

1,864
627
791
(132)
3,150
1,360
(137)
113
(23)
4,487

108.4%
123.8%
118.8%
74.3%
110.7%
372.1%
80.2%
107.3%
98.9%
113.9%

32,312
13,657
18,65515,099
643
83
729
4,653
8,750

36,80015,122
21,677
16,677
758
93
812
5,229
9,513

4,487
1,464
3,022
1,577
115
10
83
576
762

113.9%
110.7%
116.2%
110.5%
117.9%
112.9%
111.5%
112.4%
108.7%

239

269

29

112.4%

3,555

5,000

1,444

140.6%

402
96
3,861

257
57
5,200

(145)
(38)
1,338

64.0%
59.7%
134.6%

0
501

－
555

(0)
53

－
110.7%

3,361

4,644

1,283

138.2%

1,023
2,338

1,529
3,115

506
777

149.5%
133.3%

315

12514.0%

2,335

3,100

764

132.8%

2,568

2,828

259

110.1%

489

510

21

104.3%

Depreciation and amortization (Property,
plant and equipment and intangible assets)
Amortization of goodwill

Profit and loss by business segment (Operating income)Year ended
Mar. 31, 2018

Bioindustry

6,683

Year ending
Mar. 31, 2019
Current forecast
for FY2019
7,523

839

112.6%

Gene therapy(1,322)

(309)

1,013

－

107

98

(8)

92.3%

Corporate(1,912)(2,312)

(400)

－

Total

3,555

5,000

1,444

140.6%

ActualAgriBio－18 －Year on year

Year on year

ChangeRatio