Consolidated Financial Statements
ONO PHARMACEUTICAL CO., LTD.
and Subsidiaries
Year Ended March 31, 2024with Independent Auditor’s ReportConsolidated Financial Statements
Year Ended March 31, 2024

Contents
Independent Auditor’s Report .......................................................................................... 1
Consolidated Statement of Financial Position.................................................................. 6
Consolidated Statement of Income................................................................................... 8
Consolidated Statement of Comprehensive Income ........................................................ 9
Consolidated Statement of Changes in Equity ............................................................... 10
Consolidated Statement of Cash Flows .......................................................................... 11
Notes to Consolidated Financial Statements .........................................................................12

Deloitte Touche Tohmatsu LLC
Yodoyabashi Mitsui Building
4-1-1 Imabashi, Chuo-ku
Osaka 541-0042
Japan
Tel: +81 (6) 4560 6000
Fax: +81 (6) 4560 6001
www.deloitte.com/jp/en

INDEPENDENT AUDITOR'S REPORTTo the Board of Directors of
ONO PHARMACEUTICAL CO., LTD.:<Audit of Consolidated Financial Statements>
OpinionWe have audited the consolidated financial statements of ONO PHARMACEUTICAL CO., LTD. and its
subsidiaries (the "Group"), which comprise the consolidated statement of financial position as of March
31, 2024, and the consolidated statement of income, consolidated statement of comprehensive income,consolidated statement of changes in equity and consolidated statement of cash flows for the year thenended, and notes to the consolidated financial statements, including material accounting policy
information, all expressed in Japanese yen.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as of March 31, 2024, and its consolidated
financial performance and its consolidated cash flows for the year then ended in accordance with IFRS
Accounting Standards.
Convenience Translation
Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in
our opinion, such translation has been made in accordance with the basis stated in Note 2 to theconsolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience ofreaders outside Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Auditof the Consolidated Financial Statements section of our report. We are independent of the Group inaccordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled ourother ethical responsibilities as auditors. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
As discussed in Note 38 to the consolidated financial statements, ONO PHARMACEUTICAL CO., LTD.
(the "Company") and Deciphera Pharmaceuticals, Inc. ("Deciphera") entered into a definitive merger
agreement through a tender offer followed by a merger of a wholly owned subsidiary of the Company
with Deciphera, with Deciphera surviving as a wholly owned subsidiary of the Company (the"Acquisition"). The Acquisition was completed under the agreement on June 11, 2024 (New York City
Time), making Deciphera a wholly owned subsidiary of the Company. Our opinion is not modified in
respect of this matter.

Member of
Deloitte Touche Tohmatsu Limited

Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in thecontext of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Evaluation of the intangible assets related to Patents and licenses
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description
As described in Note 14 "Intangible Assets" to theconsolidated financial statements, the intangible
assets recorded in the consolidated statement offinancial position (¥57,288 million) included¥49,746 million of Patents and licenses (in-process
research and development costs acquired separately
and sales licenses), which accounted for 5.4% of total
assets.

To address the key audit matter, we performed
the following audit procedures, among others:(1) Evaluation of controls• We evaluated the design and operating
effectiveness of internal controls overthe process to calculate the value in useof the intangible assets.

As described in Note 3 "Material Accounting policies"
section (8) to the consolidated financial statements, (2) Substantive procedures to test the value in
the Group performed impairment tests for in-process
use of intangible assets
research and development costs acquired separately
and sales licenses that show indications of impairment• We inquired with management about theas of the fiscal year ended March 31, 2024. As areasonableness of the projected sales
result, the Group recorded impairment losses ofquantities used to estimate future cash
¥3,700 million which for in-process research andflows. We also read the external surveys
development costs acquired separately, andthat management used to determine the¥11,134 million which for sales licenses.
rationale of the assumptions used in theestimates.
The value in use, which was used for the impairment
test, was calculated by determining the discounted• We performed a retrospective
present value of estimated future cash flows. The
comparison between the estimatedestimated future cash flows involve management
sales developed in the previous fiscal
assumptions, such as forecasted sales quantities andyear and the corresponding actual
discount rate. These assumptions have a significant
results to test the sales forecasts usedeffect on the value in use and involve highto estimate the future cash flows of theuncertainties.
sales licenses, which are included aspart of intangible assets related to
Therefore, we identified the evaluation of intangible
Patents and licenses.
assets related to Patents and licenses as a key audit
matter.
• We evaluated the reasonableness of thecalculation method and the range of the
discount rate applied by management.

-2-

Appropriateness of revenue recognition of the royalty and others
How the Key Audit Matter Was
Addressed in the Audit

Key Audit Matter Description

As described in Note 25 "Revenue" to the consolidated To address the key audit matter, we performed
financial statements, the Group recorded royalty andthe following audit procedures, among others:
others of ¥185,693 million as revenue.
(1) Evaluation of controls
Revenue classified as royalty and others is mainly
revenue from the license contract related to rights to• We evaluated the design and operating
develop or sell products (up-front payment, milestoneeffectiveness of internal controls overrevenue and royalty revenue).
the process to accurately record theroyalty and others.
The amount includes a lump-sum income of¥17,032 million associated with the settlement of(2) Substantive procedure for the royalty andpatent litigation.
othersAs described in Note 3 "Material Accounting policies"
section (12) to the consolidated financial statements,
when performance obligations are satisfied at a point
in time, up-front payments are recognized as revenue
when development rights or selling rights, etc. are
granted. Furthermore, milestone revenue is recognized
as revenue when milestones specified in the contract
are achieved. Since the royalty revenue is calculated
based on the revenue, etc., of the other parties in thecontract, revenue is recognized mainly in accordancewith the occurrence of the sales of the other parties in
the contract.
Furthermore, the lump-sum income from thesettlement of the patent litigation is recognized at thetime of contract conclusion.
Revenue from goods and products within the Group's
revenue is recorded mainly through the automatedbusiness processes in the sales management system,
while royalty and others are calculated and recorded
through the unautomated operations and controls.
Therefore, we needed to increase our focus on theappropriateness of royalty and others. In addition,royalty and others are important to investors andshareholders in evaluating the Group's performance
because of their financial importance.

• For the major contracts in which revenue
is recognized in accordance with theoccurrence of the sales of the otherparties in the contract, we developed theauditor's expectation using publicly
announced revenue figures by the otherparties in the contracts and contractual
royalty rates. We then compared therecorded revenue to the auditor's
expectation.
• We performed confirmation proceduresfor the major other parties in the contractof the annual transaction amounts andthe accounts receivable balance at year
end related to major royalty revenue.
• For the lump-sum income from thesettlement of the patent litigation of the
fiscal year ended March 31, 2024, we
evaluated the consistency between
contents of the contract and theperformance obligations recognized by
the Group to examine theappropriateness of revenue recognition.

Therefore, we identified the appropriateness ofrevenue recognition related to royalty and others as a
key audit matter.
Other Information
Other information comprises the information included in the Group's disclosure documents
accompanying the audited consolidated financial statements, but does not include the consolidated
financial statements and our auditor's report thereon.
We determined that no such information existed and therefore, we did not perform any work thereon.

-3-

Responsibilities of Management and Audit & Supervisory Board Members and the Audit &Supervisory Board for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's
ability to continue as a going concern, disclosing, as applicable, matters related to going concern inaccordance with IFRS Accounting Standards and using the going concern basis of accounting unlessmanagement either intends to liquidate the Group or to cease operations, or has no realistic alternative
but to do so.
Audit & Supervisory Board members and the Audit & Supervisory Board are responsible for overseeing
the Directors' execution of duties relating to the design and operating effectiveness of the controls overthe Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor'sreport that includes our opinion. Reasonable assurance is a high level of assurance, but is not aguarantee that an audit conducted in accordance with auditing standards generally accepted in Japan
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks. The
procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain, when performing risk assessment procedures, an understanding of internal control relevant tothe audit in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Group's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Group's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However, future events or conditions may cause the Group to cease to continue as agoing concern.
• Evaluate whether the overall presentation and disclosures of the consolidated financial statements arein accordance with IFRS Accounting Standards, as well as the overall presentation, structure andcontent of the consolidated financial statements, including the disclosures, and whether the
consolidated financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.

-4-• Obtain sufficient appropriate audit evidence regarding the financial information of the entities orbusiness activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remainsolely responsible for our audit opinion.
We communicate with Audit & Supervisory Board members and the Audit & Supervisory Board
regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide Audit & Supervisory Board members and the Audit & Supervisory Board with astatement that we have complied with relevant ethical requirements regarding independence, andcommunicate with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with Audit & Supervisory Board members and the Audit & Supervisory
Board, we determine those matters that were of most significance in the audit of the consolidated
financial statements of the current period and are therefore the key audit matters. We describe thesematters in our auditor's report unless law or regulation precludes public disclosure about the matter orwhen, in extremely rare circumstances, we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
<Fee-Related Information>
Fees for audit and other services for the year ended March 31, 2024, which were charged by us and our
network firms to ONO PHARMACEUTICAL CO., LTD. and its subsidiaries were ¥149 million and¥140 million, respectively.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is required
to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Deloitte Touche Tohmatsu LLC
August 1, 2024-5-

Consolidated Statement of Financial Position
Year Ended March 31, 2024

AssetsCurrent assets:
Cash and cash
equivalents
Trade and otherreceivables
Marketable securities
Other financial assets
Inventories
Other current assets
Total current assets
Non-current assets:
Property, plant, andequipment
Intangible assets
Investment securities
Investments inassociates
Other financial assets
Deferred tax assets
Other non-current
assetsTotal non-current
assetsTotal assets

Notes

Millions of Yen
March 31,
March 31,
2023
2024

Thousands of
U.S. Dollars(Note 2 (5))
March 31,
2024

7, 32

¥ 96,135¥ 166,141$ 1,100,269

8, 32
9, 32
10, 32
12
11, 19114,39620
68,13444,814
21,602
345,101

136,066－
38,454
48,62924,306
413,596

901,101－
254,660
322,046
160,969
2,739,045

13, 20
14
9, 32

108,420
69,134
123,308

104,752
57,288
121,147

693,721379,388
802,296

10, 32
16

115
197,441
35,604

115
173,11340,863763
1,146,441
270,614

11

3,314

2,795

18,510537,336

500,072

3,311,734¥ 882,437¥ 913,668$ 6,050,779-6-

Liabilities and Equity
Current liabilities:
Trade and other payables
Lease liabilities
Other financial liabilities
Income taxes payable
Other current liabilities
Total current liabilities
Non-current liabilities:
Lease liabilities
Other financial liabilities
Retirement benefit
liabilities
Deferred tax liabilities
Other non-current
liabilities
Total non-current
liabilities
Total liabilities
Equity:Share capital
Capital reserves
Treasury shares
Other components ofequityRetained earnings
Equity attributable toowners of the Company
Non-controlling interests
Total equity
Total liabilities and equity

Notes

Millions of Yen
March 31,
March 31,
2023
2024

17, 32
20
18, 32Thousands of
U.S. Dollars(Note 2 (5))
March 31,2024

¥ 66,794
2,490
661
34,575
18,409122,929¥ 60,691
2,310
2,273
22,093
16,257
103,624$ 401,925
15,296
15,052
146,314
107,663686,25020
18, 32

6,678
0

6,552
0

43,393
2

22
16

3,350
983

3,294
1,013

21,812
6,710

21

684

580

3,841

11,695
134,625

11,439115,063

75,758762,008

23
23
23

17,35817,080(54,161)

17,35817,458(63,233)

114,955
115,617(418,765)

23
2351,701
709,890

53,194
768,183

352,2815,087,306

741,869
5,944
747,812¥ 882,437

792,961
5,644
798,604¥ 913,668

5,251,395
37,376
5,288,771$ 6,050,779

21

-7-

Consolidated Statement of Income
Year Ended March 31, 2024

Revenue
Cost of sales
Gross profit
Selling, general, andadministrative expenses
Research and development costs
Other income
Other expenses
Operating profit
Finance income
Finance costs
Share of profit (loss) frominvestments in associates
Profit before tax
Income tax expense
Profit for the year

Notes
6, 25

26

(89,486)(95,344)734(11,065)
141,963(100,270)(112,174)
1,176(4,343)
159,935(664,039)(742,876)
7,786(28,760)
1,059,174

29
29

2,478
(913)

4,027
(229)

26,667(1,516)15

4143,532(30,619)
112,9131
163,734(35,694)
128,0405
1,084,330(236,385)
847,945

112,723190¥ 112,913

127,97762¥ 128,040

847,533412$ 847,945¥ 266.61
266.57

U.S. Dollars(Note 2 (5))
$ 1.77
1.77

28
28

16

Profit for the year
attributable to:
Owners of the Company
Non-controlling interests
Profit for the year

Earnings per share:
Basic earnings per share
Diluted earnings per share

Millions of Yen
For the year ended For the year ended
March 31, 2023
March 31, 2024
¥ 447,187¥ 502,672(110,062)(127,126)
337,124
375,547

Thousands of
U.S. Dollars(Note 2 (5))
For the year ended
March 31, 2024
$ 3,328,956(841,892)
2,487,064

Yen
31
31

¥ 230.85
230.79-8-

Consolidated Statement of Comprehensive Income
Year Ended March 31, 2024

Notes
Profit for the year
Other comprehensive income:Items that will not bereclassified to profit or loss:
Net gain (loss) on financial
assets measured at fair value
through other comprehensive
incomeRemeasurement of defined
benefit plans
Share of net gain (loss) on
financial assets measured atfair value through othercomprehensive income ofinvestments in associates
Total of items that will not bereclassified to profit or loss
Items that may be reclassified
subsequently to profit or loss:
Exchange differences ontranslation of foreign
operations
Net fair value gain (loss) on
cash flow hedge
Total of items that may bereclassified subsequently to
profit or loss
Total other comprehensive
incomeTotal comprehensive income
for the year
Comprehensive income
for the year attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income
for the year

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥ 112,913¥ 128,040

Thousands of
U.S. Dollars(Note 2 (5))
For the year ended
March 31, 2024
$ 847,945

30, 32

2,518

8,109

53,700

30

(114)

23

155

15, 30

2

(4)

(27)

2,406

8,128

53,828

30

472

2,124

14,066

30

－

(402)

(2,661)

472

1,722

11,405

2,878

9,850

65,233

115,791

137,890913,178

115,608
182

137,803
87912,601578¥ 115,791¥ 137,890$ 913,178-9-

Consolidated Statement of Changes in Equity
Year Ended March 31, 2024
Millions of Yen
Equity attributable to owners of the Company

Notes
Balance at April 1, 2022
Profit for the year
Other comprehensive income
Total comprehensive income forthe year
Purchase of treasury shares
Retirement of treasury shares
Disposal of treasury shares
Cash dividends
Share-based payments
Transfer from retained earnings
to capital reserves
Transfer from other componentsof equity to retained earnings
Total transactions with theownersBalance at March 31, 2023
Profit for the year
Other comprehensive income
Total comprehensive income
for the year
Purchase of treasury shares
Retirement of treasury shares
Disposal of treasury shares
Cash dividends
Share-based payments
Changes in ownership interest in
subsidiaries
Transfer from retained earnings
to capital reserves
Transfer from other componentsof equity to retained earnings
Total transactions with theownersBalance at March 31, 2024

SharecapitalCapitalreserves

TreasurysharesOther
componentsof equity¥ 17,358¥ 17,241¥ (74,683)¥ 51,236

Equityattributable toowners of theCompany

Noncontrollinginterests

Total equity¥ 644,754
112,723¥ 655,906
112,723
2,886¥ 5,768190(8)¥ 661,674
112,913
2,878

112,723

115,608(2)－－(29,786)
142

182

115,791(2)－－(29,792)
142

Retainedearnings

2,886

30
－
23
23
23
24
33

－
(20,356)
(168)

－
(2)
20,356
168

2,886(29,786)
142
20,221(20,221)－－(2,421)

2,421

－

－

(2,421)¥ 51,701(47,586)¥ 709,890
127,977(29,646)¥ 741,869
127,9779,825(6)¥ 5,94462
25(29,653)¥ 747,812
128,040
9,850

127,97787

44

137,803(50,010)－86(37,208)44

137,890(50,010)－86(37,217)
44

378

378

(378)

23
－
¥ 17,358(161)¥ 17,080

20,522¥ (54,161)

9,825

30
–
23
23
23
24
33

(6)

–
(40,852)(1)–(50,010)40,852
86

9,825(37,208)

40,808(8,332)

23

(9)

－

(40,808)

－

－

8,332

－

－

–

378

(9,072)(8,332)(69,684)(86,711)(387)(87,098)¥ 17,358¥ 17,458¥(63,233)¥ 53,194¥ 768,183¥ 792,961¥ 5,644¥ 798,604

Equityattributable toowners of theCompany

Noncontrollinginterests

Total equity$ 4,701,260
847,533$ 4,913,037
847,533
65,068$ 39,362
412
166$4,952,398
847,945
65,233

847,533578

291

912,601(331,194)–
566(246,411)
291

913,178(331,194)–
566(246,469)
291

2,505

2,505

Thousands of U.S. Dollars (Note 2 (5))
Equity attributable to owners of the Company

Notes
Balance at March 31, 2023
Profit for the year
Other comprehensive income
Total comprehensive income forthe year
Purchase of treasury shares
Retirement of treasury shares
Disposal of treasury shares
Cash dividends
Share-based payments
Changes in ownership interest in
subsidiaries
Transfer from retained earnings
to capital reserves
Transfer from other componentsof equity to retained earnings
Total transactions with theownersBalance at March 31, 2024

SharecapitalCapitalreserves

TreasurysharesOther
componentsof equity$ 114,955$ 113,112$ (358,683)$ 342,393

Retainedearnings

65,068

30
–
23
23
23
24
33

–
(270,541)(4)–(331,194)270,541571

65,068(246,411)

270,255
23–$ 114,955

2,505$ 115,617(60,082)$ (418,765)- 10 -(58)(2,505)–(270,255)––(55,179)

55,179––(55,179)$ 352,281(461,486)$ 5,087,306(574,242)$ 5,251,395(2,564)$ 37,376(576,806)$ 5,288,771

Consolidated Statement of Cash Flows
Year Ended March 31, 2024

Notes

Millions of Yen
For the year
For the year
ended
ended
March 31, 2023
March 31, 2024

Cash flows from operating activities
Profit before tax
Depreciation and amortization
Impairment losses
Interest and dividend income
Interest expense(Increase) decrease in inventories(Increase) decrease in trade and other receivables
Increase (decrease) in trade and other payables
Increase (decrease) in retirement benefit
liabilities(Increase) decrease in retirement benefit assets
Increase (decrease) in accrued consumption tax
Other
SubtotalInterest received
Dividends received
Interest paid
Income taxes paid
Net cash provided by (used in) operating
activities
Cash flows from investing activities
Purchases of property, plant, and equipment
Proceeds from sales of property, plant, andequipment
Purchases of intangible assets
Purchases of investments
Proceeds from sales and redemption of
investments
Payments into time deposits
Proceeds from withdrawal of time deposits
Other
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Dividends paid
Dividends paid to non-controlling interests
Repayments of lease liabilities
Purchases of treasury shares
Net cash provided by (used in) financing
activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the year
Effects of exchange rate changes on cash andcash equivalents
Cash and cash equivalents at the end of the year¥7

- 11 -

Thousands of
U.S. Dollars(Note 2 (5))
For the year
ended
March 31, 2024

¥143,532
17,451
1,498(2,402)74(2,945)(14,513)
13,090¥163,734
18,14014,885(3,574)92(3,420)(19,782)(1,835)$1,084,330
120,133
98,578(23,669)608(22,647)(131,004)(12,153)

214
27
5,564
2,347
163,935
53
2,334
(74)
(6,637)
159,610(22)－(3,899)197
164,517
221
2,445
(92)
(56,431)
110,660(146)－(25,819)
1,306
1,089,517
1,461
16,190(608)(373,713)
732,846(5,340)(4,020)(26,623)

6(9,157)(2,432)903(16,809)(3,399)5,978(111,315)(22,511)

7,864(138,159)
47,996(1,037)(100,259)

17,689(33,332)
88,332(1,287)48,077

117,144(220,744)
584,982(8,520)318,392(29,742)(6)(2,733)(1)(32,484)(37,183)(9)(2,645)(50,010)(89,848)(246,246)(58)(17,520)(331,194)(595,018)

26,86868,889456,220

69,112

96,135

636,657

155
96,135

1,116
166,141

7,392$ 1,100,269¥

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
1.

Reporting Entity

ONO PHARMACEUTICAL CO., LTD. (the “Company”) is a company incorporated inJapan. The addresses of its registered head office and principal business locations aredisclosed on the Company’s website (URL https://www.ono-pharma.com/en).
The consolidated financial statements of the Company comprise the financial statementsof the Company and its subsidiaries (collectively, the “Group”) and equity interests inassociates of the Group. The Group manufactures and sells medical and generalpharmaceutical products, etc. The business descriptions and principal activities of theGroup are described in “6. Segment Information.”
2.

Basis of Preparation(1) Statements of Compliance with International Financial Reporting Standards (IFRS)
Accounting Standards
Pursuant to the provision of Article 93 of the Ordinance on Terminology, Forms, andPreparation Methods of Consolidated Financial Statements, the Company qualifies
as a “Specified Company of the Designated International Accounting Standards”
prescribed in Article 1-2 of the Ordinance, and the consolidated financial statementsof the Group have been prepared in accordance with IFRS Accounting Standards.
(2) Basis of Measurement
Except for the financial instruments and others described in “3. Material Accounting
Policies,” the consolidated financial statements are prepared on a historical cost basis.
(3) Functional Currency and Presentation Currency
The consolidated financial statements of the Group are presented in Japanese yen,which is the Company’s functional currency. All financial information presented inJapanese yen has been rounded to the nearest million yen, except where otherwise
indicated.

- 12 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(4) Changes in Accounting Policies
The Group has applied the following standards from the fiscal year ended March 31,
2024.
IFRS Accounting Standards

Subject of new standard / amendment
Clarification of accounting treatment for deferred taxes on leases

IAS 12

Income Taxes
and decommissioning obligations
An amendment requiring companies to disclose their exposure tocorporate income taxes arising from enacted or substantively

IAS 12

Income Taxes

enacted tax systems in order to implement the Pillar Two Model
Rules published by the Organisation for Economic Co-operation
and Development (OECD).

Application of the above standards does not have a significant impact on the Group’s
consolidated financial statements.
(5) U.S. Dollar Amounts
The accompanying consolidated financial statements are stated in Japanese yen. The
translations of Japanese yen amounts into U.S. dollar amounts are included solely forthe convenience of readers outside of Japan using the rate of ¥151 to $1, theapproximate rate of exchange at March 31, 2024. Such translations should not be
construed as representations that the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate. Amounts of less than one thousand U.S. dollars
have been rounded to the nearest one thousand U.S. dollars in the presentation of theaccompanying consolidated financial statements. As a result, the totals in U.S. dollars
do not necessarily agree with the sum of the individual amounts.

- 13 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
3.

Material Accounting Policies

The material accounting policies have been applied consistently to all periods presented
in the consolidated financial statements, unless otherwise stated.
(1) Basis of Consolidation① Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity
when it has power over the entity, is exposed to, or has rights to variable returns
from its involvement with the entity, and has the ability to affect those returns
through its power over the entity.
Even if the Group does not have a majority of voting rights, it concludes that it
has power over the investee when the voting rights are sufficient to give it thepractical ability to direct the relevant activities of the investee unilaterally.
Consolidation of a subsidiary begins on the date the Group obtains control overthe subsidiary and continues through the date the Group loses control of thesubsidiary. Changes in ownership interest in a subsidiary without a loss ofcontrol are accounted for as equity transactions, and a difference between theamount by which the non-controlling interests are adjusted and the fair value ofthe consideration paid or received is recognized directly in equity as equity
attributable to owners of the Company.
In cases where the accounting policies applied by a subsidiary are different fromthose applied by the Group, adjustments are made to the subsidiary’s financial
statements, if necessary.
All intercompany receivables, payables, and transactions of the Group andunrealized profit and loss from intercompany transactions are eliminated in
preparing the consolidated financial statements.

- 14 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

② Associates
An associate refers to an entity over which the Group does not have control but
has significant influence over the financial and operating policies of the entity.
Significant influence is the power to participate in the financial and operating
policy decisions of the investee, but does not have control over those policies.
Investments in associates are initially recognized at cost and accounted for by
the equity method of accounting in the consolidated statement of financial
position from the date when the Group obtains significant influence until the datethe Group loses its significant influence. In cases where the accounting policies
applied by an associate are different from those applied by the Group,
adjustments are made to the associate’s financial statements, if necessary.
③ Business Combinations
Business combinations are accounted for using the acquisition method.
The Group measures the consideration for an acquisition as the sum of theconsideration transferred in a business combination, the amount of any noncontrolling interest and in a business combination achieved in stages, theacquisition-date fair value of the acquirer’s previously held equity interest in theacquisition. The consideration transferred is measured at fair value at theacquisition date. The non-controlling interest is measured at fair value or basedon the appropriate share of the acquiree’s identifiable net assets.
The Group recognizes goodwill as any excess of the consideration for acquisition
over the net amount of the identifiable assets acquired and the liabilities assumed
at the acquisition date. If the net amount of the identifiable assets and liabilitiesof the acquiree exceeds the consideration for acquisition, the acquirer recognizes
the excess amount as profit or loss on the acquisition date.
Acquisition-related costs are recognized in profit or loss as incurred.

- 15 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(2) Foreign Currencies
The consolidated financial statements of the Group are presented in Japanese yen,which is the Company’s functional currency. Each entity of the Group applies its ownfunctional currency and measures its transactions using its functional currency.
Foreign currency transactions are translated into the functional currency using spot
exchange rates or approximate rates prevailing at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into
the functional currency using spot exchange rates as of the closing date. Exchange
differences arising from such translations and settlements are recognized in profit orloss. However, exchange differences arising from financial assets measured throughother comprehensive income and cash flow hedges are recognized in othercomprehensive income.
Assets and liabilities of foreign operations are translated into the presentation
currency using spot exchange rates as of the closing date, while income and expenses
are translated into the presentation currency at the average exchange rate for theperiod. The resulting exchange differences are recognized in other comprehensive
income. In cases where foreign operations are disposed of, the cumulative amount oftranslation differences related to the foreign operations is recognized as profit or loss
in the period of disposition.

- 16 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(3) Financial Instruments① Financial Assets(i) Initial Recognition and Measurement
Trade receivables, etc., are initially recognized on the date when they are
incurred. All other financial assets are initially recognized on the contract datewhen the Group becomes a party to the contractual provisions of the financial
instruments. Financial assets are classified as either financial assets measured atfair value or financial assets measured at amortized cost.
All regular-way purchases or sales of financial assets are recognized orderecognized on a settlement date basis. Regular-way purchases or sales refer topurchases or sales of financial assets that require delivery of assets within thetimeframe generally established by regulation or convention in the marketplace.
At initial recognition, all financial assets, except for those measured at fair value
through profit or loss (FVPL), are measured at fair value plus transaction costs
that are directly attributable to the financial assets. Transaction costs of financial
assets measured through profit or loss are recognized in profit or loss.
(ⅱ) Classification and Subsequent Measurement(a) Financial Assets Measured at Amortized Cost
Financial assets are classified as financial assets measured at amortized cost if
both of the following conditions are met:
・ The financial asset is held within a business model whose objective is tohold financial assets in order to collect contractual cash flows.
・ The contractual terms of the financial asset give rise on specified dates tocash flows that are solely payments of principal and interest on the principal
amount outstanding.

- 17 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

After initial recognition, the carrying amounts of the financial assets measured
at amortized cost are calculated using the effective interest method. Amortization
using the effective interest method and gains or losses arising in the case of
derecognition are recognized in profit or loss.
(b) Debt instruments measured at fair value through other comprehensive
income (FVOCI)
Financial assets are classified as debt instruments measured at FVOCI if both of
the following conditions are met:
・ The financial asset is held within a business model whose objective isachieved by both collecting contractual cash flows and selling financial
assets.
・ The contractual terms of the financial asset give rise on specified dates tocash flows that are solely payments of principal and interest on the principal
amount outstanding.
(c) Equity instruments measured at FVOCI
After initial recognition, equity instruments designated to be measured at FVOCI
are measured at fair value, and any changes in fair value are included in net gain
(loss) on financial assets measured at FVOCI in other components of equity.
When such financial assets are derecognized, the accumulated othercomprehensive income is immediately transferred to retained earnings.
Meanwhile, dividends from such financial assets are recognized as profit when
the shareholder’s right to receive payment is established.
(d) Financial assets measured at FVPL
Financial assets, except for financial assets measured at amortized cost, debt
instruments measured at FVOCI, and equity instruments measured at FVOCI
stated above, are classified as financial assets measured at FVPL.
After initial recognition, financial assets measured at FVPL are measured at fairvalue, and any changes in fair value are recognized in profit or loss.

- 18 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(ⅲ) Derecognition of Financial Assets
The Group derecognizes a financial asset when the contractual right to receive
cash flows from the asset expires or is transferred, or when it transfers
substantially all the risks and rewards of ownership of the asset.
(ⅳ) Impairment of Financial Assets
At the end of each fiscal year, the Group evaluates whether the credit risk on
financial instruments has increased significantly since initial recognition. With
respect to impairment of financial assets measured at amortized cost, the Group
recognizes an allowance for expected credit losses on such financial assets. If
credit risk on a financial instrument has not increased significantly since initialrecognition, the allowance for such financial instrument is measured at an
amount equal to the 12-month expected credit losses. If credit risk on a financial
instrument has increased significantly since initial recognition, the allowance forsuch financial instrument is measured at an amount equal to the lifetime expectedcredit losses. The determination of whether credit risk has significantly increased
is based on the changes in default risk. The assessment of whether there is achange in default risk takes into account information that is reasonably available
to the Group and supportable as well as past due information. When the credit
risk on a financial asset is considered low at the end of the fiscal year, the Group
determines that the credit risk on the financial asset has not increased
significantly since initial recognition. Expected credit losses are measured basedon the discounted present value of the differences between the contractual cash
flows and the cash flows expected to be received. However, with regard to tradereceivables, etc., the allowance is always measured at an amount equal to thelifetime expected credit losses, regardless of whether or not there has been asignificant increase in credit risk since initial recognition. The amount of
expected credit losses or reversal is recognized in profit or loss.

- 19 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

② Financial Liabilities(i) Initial Recognition and Subsequent Measurement
The Group holds financial liabilities that are measured at amortized cost.
Financial liabilities measured at amortized cost are initially measured at fairvalue minus directly attributable transaction costs. After initial recognition, thecarrying amounts of financial liabilities measured at amortized cost arecalculated using the effective interest method. Gains or losses arising fromamortization using the effective interest method and derecognition arerecognized as profit or loss in the consolidated statement of income.
(ii) Derecognition of Financial Liabilities
Financial liabilities are derecognized when the Group’s contractual obligations
are discharged, canceled, or expired.
③ Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amounts arepresented in the consolidated statement of financial position when, and only
when, the Group currently has a legally enforceable right to offset the recognizedamounts and intends either to settle on a net basis or to realize the asset and settle
the liability simultaneously.

④ Derivatives
The Group enters into forward foreign exchange contracts as derivatives toaddress the risk of foreign exchange rate fluctuations. Forward foreign exchange
contracts are initially measured at fair value when the contract is entered into
and are subsequently remeasured at their fair value. Changes in fair value of
foreign exchange contracts are recognized as profit or loss in the consolidated
statement of income. However, gains and losses on hedging instruments relating
to the effective portion of cash flow hedges are recognized as othercomprehensive income in the consolidated statement of comprehensive income.
- 20 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

⑤ Hedge Accounting
The Group designates forward foreign exchange contracts that are derivatives inrespect of addressing the risk of foreign exchange rate fluctuation as hedging
instruments for cash flow hedges. At the inception of the hedge relationship, theGroup documents the relationship between hedging instruments and hedged
items in accordance with the strategy for undertaking hedge transactions. In
addition, at the inception of the hedge and during the life of the hedge, the Group
documents whether the hedging instruments are highly effective in offsettingchanges in cash flows of the underlying hedged items attributable to the hedged
risk.
Cash flow hedge accounting is as follows:
The effective portion of changes in fair value of derivatives that are designatedand qualify as cash flow hedges is recognized in other comprehensive income
and accumulated in other components of equity. The ineffective portion of gains
or losses on the hedging instruments is recognized immediately in profit or loss.
Amounts recognized in other comprehensive income and accumulated in equity
are reclassified to profit or loss in the periods when the hedged item affects profit
or loss in the same line as the recognized hedged item. However, in cases where
the hedged forecast transaction results in the recognition of a non-financial asset
or liability, the gains and losses previously recognized in other comprehensive
income and accumulated in equity are transferred from equity and included in
the initial measurement of the cost of the non-financial asset or liability.
Hedge accounting is discontinued when a hedging instrument expires, is sold,terminated, or exercised, or no longer qualifies for hedge accounting. Any gainor loss recognized in other comprehensive income and accumulated in equity
remains in equity and is reclassified to profit or loss when the forecast transaction
is ultimately recognized in profit or loss. When a forecast transaction is no longer
expected to occur, the gain or loss accumulated in equity is recognized
immediately in profit or loss.

- 21 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

⑥ Fair Value of Financial Instruments
The fair values of financial instruments traded on active financial markets as ofeach reporting date are based on quoted prices in the markets or dealer prices.
The fair values of financial instruments for which no active markets exist arecalculated by using appropriate valuation techniques.
(4) Cash and Cash Equivalents
Cash and cash equivalents are composed of cash on hand, bank deposits drawable atany time, and short-term investments with maturities of three months or less from theacquisition date, which are readily convertible to cash and are subject to insignificant
risk of changes in value.
(5) The Standard for Measurement and the Value of Inventories
Inventory costs include raw materials, direct labor, and other direct costs, as well as
relevant overhead expenses.
Inventories are measured at the lower of cost or net realizable value. Cost is mainly
determined using the weighted-average method. Net realizable value is determinedbased on the estimated selling price in the ordinary course of business, less estimatedcosts of completion and costs necessary to make the sale.

(6) Property, Plant, and Equipment (Except for Right-of-Use Assets)
The Group applies the cost model for subsequent measurement of property, plant,
and equipment and records them at cost less any accumulated depreciation andaccumulated impairment losses.
The cost of property, plant, and equipment comprises costs directly attributable to theacquisition of the assets and initial estimations of asset retirement obligations.
Depreciation of property, plant, and equipment commences when the assets areavailable for use.
- 22 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Property, plant, and equipment are depreciated by the straight-line method over theirestimated useful lives. The estimated useful lives of major asset items are as follows:
Buildings and structures:
Machinery and vehicles:
Tools, furniture, and fixtures:

15－50 years
4－15 years
2－20 years

The estimated useful lives and depreciation method, etc., are reviewed at the end ofeach reporting period, and any changes are treated as changes in accounting estimatesand applied prospectively.
(7) Impairment of Property, Plant, and Equipment
For property, plant, and equipment, the Group determines whether there is any
indication of impairment on each asset at the end of each reporting period. If any
indication of impairment exists, the recoverable amount of an asset or a cashgenerating unit to which the asset belongs is estimated.
The recoverable amount is computed at the higher of the fair value less costs to sellor value in use of the asset or cash-generating unit. If the carrying amount of an asset
or a cash-generating unit exceeds its recoverable amount, the carrying amount of theasset or cash-generating unit is reduced to its recoverable amount and impairment
loss is recognized.
The value in use is computed by discounting the estimated future cash flows to theirpresent value using a pretax discount rate that reflects the time value of money andthe risks inherent to the asset, etc. For the calculation of an asset’s fair value less costs
to sell, an appropriate valuation model is used based on available fair value indices.

- 23 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

An impairment loss recognized in prior years is assessed as to whether there is any
indication that the impairment loss for an asset or a cash-generating unit may havedecreased or may no longer exist. If any such indication exists, the recoverable
amount of the asset or cash-generating unit is estimated. In cases where therecoverable amount exceeds the carrying amount of the asset or cash-generating unit,
impairment losses are reversed up to the lower of the estimated recoverable amountor the carrying amount, net of accumulated depreciation that would have been
determined if no impairment losses had been recognized in prior years.
(8) Intangible Assets①

Intangible Assets Acquired Separately
The Group applies the cost model for the measurement of intangible assets andstates them at cost less any accumulated amortization and accumulated
impairment losses. However, intangible assets with indefinite useful lives
acquired separately are stated at cost less any accumulated impairment losses.
Amortization for intangible assets commences when the related assets areavailable for use. Except for intangible assets with indefinite useful lives or thatare not yet available for use, each intangible asset is amortized by the straightline method over its estimated useful life. The estimated useful lives of major
intangible asset items are as follows:
Sales licenses:
Software:8－17 years
3－8 years

The estimated useful lives used in calculating the amortization of sales licenses
are determined by considering the effective period of the patents and others.
The estimated useful lives and amortization method are reviewed at the end ofeach reporting period, and any changes are treated as changes in accounting
estimates and applied prospectively.

- 24 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024②

Internally Generated Intangible Assets (Research and Development Costs
Internally Generated)
Costs arising from development (or from the development phase of an internal
project) shall be recognized as an asset if, and only if, all of the following havebeen demonstrated:(i) the technical feasibility of completing the intangible asset so that it will beavailable for use or sale(ii) the intention to complete the intangible asset and use or sell it(iii) the ability to use or sell the intangible asset(iv) how the intangible asset will generate probable future economic benefits(v) the availability of adequate technical, financial, and other resources tocomplete the development and to use or sell the intangible asset(vi) the ability to measure reliably the expenditure attributable to the intangible
asset during its development
Due to the risks and uncertainties related to the approval and development
activity of pharmaceutical drugs, the Group determines that the recognition
criteria for capitalization as intangible assets are considered not to have been met
unless it obtains marketing approval from the relevant regulatory authorities.
Internally generated development expenses arising before marketing approvalhas been obtained are expensed under “Research and development costs” asincurred.

③

Impairment of Intangible Assets
For intangible assets, the Group determines whether there is any indication of
impairment on each asset at the end of each reporting period. If any indicationof impairment exists, each asset is tested for impairment. In addition, intangible
assets with indefinite useful lives or intangible assets not yet available for use
are tested for impairment at a certain time each fiscal year, regardless of whether
there is any indication of impairment.

- 25 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Impairment tests are performed by calculating the recoverable amount of eachintangible asset and comparing the recoverable amount with its carrying amount.
In cases where a recoverable amount of an individual asset cannot be estimated,
the recoverable amount of the cash-generating unit to which the asset belongs isestimated.
The recoverable amount of an asset or a cash-generating unit is measured at thehigher of its fair value less costs to sell or its value in use. The value in use iscomputed by discounting the estimated future cash flows to the present value.
The value in use is calculated by using management assumptions such as
forecasted sales quantities and discount rate.
The discount rate used is a pre-tax rate that reflects the time value of money andthe risks inherent to the asset using unadjusted estimates of future cash flows.
(9) Right-of-use Assets
For leases as a lessee, the Group measures right-of-use assets at cost and leaseliabilities at the present value of the lease payments that are not paid at thecommencement date of the lease.
Right-of-use assets are depreciated by using the straight-line method from thecommencement date to the earlier of the end of the useful life of the right-of-use asset
or the end of the lease term.
Lease payments are allocated to finance costs and repayments of lease liabilities
based on the effective interest method. The finance costs are recognized in the
consolidated statement of income.
However, the Group has elected not to recognize right-of-use assets and leaseliabilities for leases of intangible assets, leases for which the underlying asset is of
low value (“low-value leases”), and short-term leases within 12 months. Lease
payments associated with low-value leases and short-term leases are recognized as
an expense on either a straight-line basis over the lease term or another systematic
basis.
- 26 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(10) Employee Benefits
The Group participates in both defined benefit and defined contribution plans as
employee retirement benefit plans.
① Defined Benefit Plans
For the Group’s defined benefit plans, the cost of providing retirement benefits
is measured by the projected unit credit method, with actuarial valuations being
carried out at the end of each reporting period. Remeasurements comprisingactuarial gains and losses, the effect of any changes in the asset ceiling, and thereturn on plan assets (excluding net interest) are recognized through othercomprehensive income in the period in which they are incurred and immediatelyreflected in the consolidated statement of financial position. Remeasurements
recognized in other comprehensive income are immediately reclassified toretained earnings and will not be reclassified to profit or loss. Past service costs
are recognized in profit or loss in the period in which revisions to the plansoccurred. Net interest is calculated by applying the discount rate at the beginningof the reporting period to the net defined benefit liability or asset and presented
as “finance income” or “finance costs.” Defined benefit expenses are classified
into the following components:
・ Service costs (current service costs, past service costs, and others)
・ Net interest expense or income
・ Remeasurements
The retirement benefit assets or liabilities recognized in the consolidated
statement of financial position represent the actual surplus or deficit in theGroup’s defined benefit plans. Any surplus resulting from this calculation islimited to the present value of available future economic benefits in the form ofrefunds from the plan or reductions in future contributions to the plan.
② Defined Contribution Plans
Contributions paid for defined contribution plans are expensed in the period inwhich the employees provide the related service.
- 27 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(11) Provisions
The Group recognizes provisions when it has a present obligation (legal orconstructive) as a result of a past event, it is probable that it will be required to settle
the obligation, and a reliable estimate can be made.
Where the time value of money is material, a provision is measured at the present
value of estimated expenditures required to settle the obligation. The present value iscomputed using a pretax discount rate that reflects the time value of money and therisks inherent to the liabilities.
(12) Revenue
Revenue, excluding interest and dividend income, etc., is recognized by applying
the following five steps:
Step 1: Identify the contract with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation- 28 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

① Sale of Merchandise
For the sale of merchandise, revenue is recognized at the point when it is delivered
since material risks and economic value associated with ownership of themerchandise are transferred to customers at the time of its delivery, and customers
acquire control over it, and thereby, the Group’s performance obligations are
considered to be satisfied.
The revenue arising from sale of merchandise is calculated by deducting theamount of rebates and discounts based on the number and amount of sales fromthe consideration in the sales contract, and the consideration to be refunded tocustomers and the amounts to be collected on behalf of third parties arerecognized as a refund liability. The most likely amount method based oncontractual conditions and past results is used to estimate rebates, etc. Revenue isrecognized only to the extent that it is highly probable that there will not be asignificant reversal of revenue previously recognized.
Consideration related to sale of merchandise is mainly received within one year
from the delivery of merchandise to customers. This does not include significant
financing components.
② Royalty Revenue, etc.
Royalty revenue is consideration for license contracts, etc., calculated on the basisof revenue, etc., of the other parties in the contract, and it is recognized as revenue
according to the sales of the other parties in the contract.
License revenue is up-front payment and milestone revenue received underlicense contracts, etc., related to development or rights to develop or sell products,
etc., executed between the Group and third parties. For license contracts, etc.,
performance obligations under the contract are considered to be satisfied at thetime of granting development or selling rights, etc., for up-front payment andmilestone revenue, and at this point, the up-front payment and milestone revenue
are recognized as revenue. When performance obligations are satisfied over acertain period of time, the consideration is recognized as contract liabilities, andup-front payment and milestone revenue are recognized as revenue over a certain
period of time, such as the estimated development period according to the methodof measuring the degree of progress regarding satisfaction of the performanceobligations determined for each individual contract.
Milestone revenue is recognized as revenue, considering the probability that there
will be a significant reversal of revenue previously recognized, from the time thatmilestones specified in the contract are achieved.
In cases where transactions for royalty revenue, etc. include significant financing
components, revenue is measured at present value based on the effective interest
rate. However, in cases where the revenue is expected to be received within one
year from the vesting under the contract, adjustments for significant financing
components are not made.
- 29 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(13) Income Taxes
Income tax expense represents the sum of current tax expense and deferred tax
expense.
Current tax expense is measured at the expected amount of a refund or payment oftaxes from/to the taxation authorities. The Group’s income taxes are calculated using
tax rates and tax laws that have been enacted or substantively enacted by the end of
the reporting period. Current tax expense is recognized as an expense, except for thetaxes attributable to items recognized directly either in other comprehensive income
or equity.
Deferred tax expense is calculated based on temporary differences between the
carrying amounts of assets and liabilities for accounting purposes and their tax basis
as of the closing date. Deferred income tax assets are recognized to the extent it isprobable that taxable profits will be available against which the deductible temporary
differences and the carryforward of unused tax credits and tax losses can be utilized.
Deferred tax liabilities are principally recognized for all taxable temporary
differences.
Deferred tax assets or deferred tax liabilities are not recognized for the following
temporary differences:
・ Deductible temporary differences associated with investments in subsidiaries
and associates where it is probable that the temporary differences will not reversein the foreseeable future or it is not probable that taxable profits will be available
against which the temporary differences can be used.
・ Taxable temporary differences associated with investments in subsidiaries andassociates where the timing of the reversal of the temporary differences can becontrolled and it is probable that the temporary differences will not reverse in
the foreseeable future.
・ There are temporary differences arising from the initial recognition of assets andliabilities which occur through transactions that affect neither accounting profit- 30 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
nor taxable profit for tax purposes and does not give rise to equal taxable anddeductible temporary differences, except for business combinations.
Furthermore, the Group has applied the exceptions to recognition and disclosure
about deferred tax assets and deferred tax liabilities for income taxes arising from tax
systems enacted or substantively enacted to implement the Pillar Two model rules
published by the Organization for Economic Cooperation and Development (OECD).
Deferred tax assets and deferred tax liabilities are calculated using tax rates that are
estimated for the year in which these assets are realized or these liabilities are settled,based on tax rates that have been enacted or substantively enacted by the closing date.
In addition, the Company and some subsidiaries in Japan have applied the JapaneseGroup Relief System.
(14) Treasury Shares
Treasury shares are recognized at cost and deducted from equity. Neither gain nor
loss is recognized on the purchase, sale, or retirement of the treasury shares. Any
difference between the carrying amount and proceeds on sales is treated as capitalreserve.
(15) Earnings per Share
Basic earnings per share are calculated by dividing profit and loss for the year
attributable to owners of the Company by the weighted-average number of ordinary
shares outstanding during the year, adjusted by the number of treasury shares for theperiod. Diluted earnings per share are calculated by adjusting the effects of all
dilutive potential ordinary shares.
(16) Share-based Payments
1. Restricted Stock-based Remuneration
The Company has a Restricted Stock-based Remuneration as an incentive plan for the
Eligible Board of Directors and its corporate officers (hereinafter referred to as the“Eligible Board of Directors, etc”) in the form of the Tenure-based Restricted Stockbased Remuneration and the Performance-linked Restricted Stock-based- 31 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Remuneration.
1) Tenure-based Restricted Stock-based Remuneration
Remuneration under the Tenure-based Restricted Stock-based Remuneration ismeasured by reference to the fair value of the ordinary shares of the Company to be
granted, and recognized as expenses over the vesting period of the remuneration withan equal amount recognized as increases in equity.
2) Performance-Linked Restricted Stock-based Remuneration
The portion of the Performance-linked Restricted Stock-based Remuneration that is a
cash-settled share-based payment transaction is recognized as expenses over thevesting period and the same amount is recognized as increases in liability. The portionof the remuneration that constitutes an equity-settled share-based payment transaction
is measured by reference to the fair value of the ordinary share of the Company to be
granted, and recognized as expenses over the vesting period with equal amountrecognized as increases in equity.
4.

Significant Accounting Estimates and Critical Judgment Involving Estimations

The Group’s consolidated financial statements include management estimates andassumptions for measurements of income and expense, and assets and liabilities. Theseestimates and assumptions are based on management’s best judgment along withhistorical experience and other various factors that are believed to be reasonable under
the circumstances as of the closing date. However, there is a possibility that theseestimates and assumptions may differ from actual results in the future due to their nature.

The estimates and underlying assumptions are continually reevaluated by management.
The effects of revisions to the accounting estimates and assumptions are recognized in
the period of the revision and future periods.
The information related to the judgments and estimates made in the process of applying
accounting policies and accounting estimates and assumptions that have a significant
effect on the amounts recognized in the Group’s consolidated financial statements is asfollows:- 32 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(1) Impairment of intangible assets (patents and licences, etc.)(Note 3(8)③, Note 14)① Amounts recorded in the consolidated financial statement for the fiscal years
ended March 31, 2023 and 2024 are as follows:
Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Intangible assets(patents and licences, etc.)¥ 61,449¥

49,746

Thousands of
U.S. Dollars
For the year ended
March 31, 2024$

329,443② Information on significant accounting estimates for the identified item:
For intangible assets, the Group determines whether there is any indicationof impairment on each asset at the end of each reporting period. If any
indication of impairment exists, each asset is tested for impairment. In
addition, intangible assets with indefinite useful life or intangible assets not
yet available for use are tested for impairment at a certain time each fiscal
year, regardless of whether there is any indication of impairment.
Impairment tests are performed by calculating the recoverable amount ofeach intangible asset and comparing the recoverable amount with its carrying
amount. In cases where a recoverable amount of an individual asset cannot
be estimated, the recoverable amount of the cash-generating unit to which
the asset belongs is estimated.
The recoverable amount of an asset or a cash-generating unit is measured at
the higher of its fair value less costs to sell or its value in use. The value in
use is computed by discounting the estimated future cash flows to the present
value. The value in use is calculated by using management assumptions suchas forecasted sales quantities and discount rate.
The discount rate used is a pretax rate that reflects the time value of money
and the risks inherent to the asset using unadjusted estimates of future cash
flows.
There is a possibility that future events could change the assumptions usedin the impairment test and therefore affect the Group’s future financial
performance.

- 33 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(2) Recoverability of deferred tax assets (Note 3(13), 16)① Amounts recorded in the consolidated financial statement for the fiscal years
ended March 31, 2023 and 2024 are as follows:

Deferred tax assets

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥ 35,604¥ 40,863

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$ 270,614② Information on significant accounting estimates for the identified item:
Regarding tax effects of temporary differences between the carrying amountsof assets and liabilities for accounting purposes and their tax basis, the Group
recognizes deferred tax assets using the effective statutory tax rate applied tothe temporary differences to the extent that the Group expects that taxable
profit will be available against which the deferred tax assets can be recovered.
The Group determines the possibility of taxable income based on reasonableestimates of the timing and amount of future taxable income that will be
generated based on business plans, etc.

(3) Actuarial assumptions of defined benefit obligations (Note 3(10), 22)① Amounts recorded in the consolidated financial statement for the fiscal year
ended March 31, 2024 are as follows:

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Retirement benefit
liabilities

②

¥

3,350

¥

3,294

Thousands of
U.S. Dollars
For the year ended
March 31, 2024$

21,812

Information on significant accounting estimates for the identified item:
The Group has several retirement benefit plans, including defined benefit
plans.
The present value of the defined benefit obligation and related service costs
are calculated based on actuarial assumptions. Actuarial assumptions- 34 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
involve estimates and judgments about variables such as discount rates andnet interest.
The Group has received advice from external pension actuaries with respect
to the appropriateness of the actuarial assumptions including these variables.
While actuarial assumptions are based on management's best estimates andjudgment, they might be affected by the consequences of future uncertain
economic conditions. If they need to be revised, the changes could
significantly impact the amounts recognized in the consolidated financial
statements.
5.

Standards and Interpretations Issued but Not Yet Applied

The Group has not elected early application of new or revised standards andinterpretations that have been issued before the approval date disclosed in “37. Approvalof Consolidated Financial Statements” on March 31, 2024. New or revised standards andinterpretations that have been issued before the approval of consolidated financial
statements and may affect the Group are as follows：
IFRS Accounting

Mandatory application

To be applied

Subject of new standard /Standards(from the year beginning)by the Groupamendment

January 1, 2027

Fiscal year

・Improvement of comparability of

andending March

income statements

Disclosure

31, 2028

・Improvement of transparency of

IFRS 18

Presentationin Financial

management-defined performance

Statements

measures (MPMs)
・More useful grouping of
information in financial statements

The impact of the application of IFRS 18 on the Group’s consolidated financial
statements is under consideration.

- 35 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

6.

Segment Information(1) Reportable Segments
Based on the Group’s corporate philosophy, “Dedicated to the Fight against Disease
and Pain,” in order to fulfill medical needs that have not yet been met, the Group isdedicated to developing innovative new pharmaceutical drugs for patients andfocuses its operating resources on a single segment of the pharmaceutical business(research and development, purchasing, manufacturing, and sales). Accordingly,
segment information is omitted herein.
(2) Details of Revenue
Details of revenue are as follows:

Revenue of goods and products
Royalty and others
Total

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥ 295,045¥ 316,979
152,141
185,693¥ 502,672¥ 447,187

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$ 2,099,199
1,229,757$ 3,328,956(3) Revenue by Geographic Area
Details of revenue by geographic area are as follows:
Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Japan
Americas
Europe
Asia
Total

¥

288,155
142,791
4,616
11,625¥¥447,187¥

308,229
158,933
21,926
13,585
502,672

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$ 2,041,248
1,052,534
145,207
89,967$ 3,328,956

Note: Revenue by geographic area is presented on the basis of the location ofcustomers.

- 36 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(4) Major Customers
Details of revenue from major customers are as follows:
Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024

7.

Thousands of
U.S. Dollars
For the year ended
March 31, 2024

Bristol-Myers Squibb Company
and the group¥ 100,176¥

108,082$

715,776

MEDIPAL HOLDINGSCORPORATION and the group¥

68,436¥72,714$

481,552SUZUKEN CO., LTD.
and the group¥

58,693¥65,218$431,909

Merck & Co., Inc. and the group¥45,176¥53,038$351,248

Alfresa Holdings Corporationand the group¥46,423¥50,451$

334,111

Cash and Cash Equivalents

Details of cash and cash equivalents are as follows:

Millions of Yen
March 31, 2023
March 31, 2024
(Cash and cash equivalents)
Cash and deposits
Cash and cash equivalents in the
consolidated statement of financial
position
Cash and cash equivalents in the
consolidated statement of cash flows

Thousands of
U.S. Dollars
March 31, 2024¥

96,135¥

166,141$ 1,100,269¥

96,135¥

166,141$ 1,100,269¥

96,135¥

166,141$ 1,100,269- 37 -

Notes to Consolidated Financial Statements
Year Ended March 31, 20248.

Trade and Other Receivables

Details of trade and other receivables are as follows:

Millions of Yen
March 31, 2023
March 31, 2024
Notes receivable
Trade accounts receivable
Other accounts receivable
Allowance for doubtful accounts
Total

Thousands of
U.S. Dollars
March 31, 2024¥

755
108,364
5,281
(5)

¥

1,429
129,012
5,630
(5)

$

9,462
854,386
37,284(32)¥

114,396¥

136,066$

901,101

Notes: 1. Credit risk management is described in “32. Financial Instruments.”
2. Trade and other receivables with collection periods longer than 12 months were
not included for the fiscal year ended March 31, 2023, whereas the amount was¥11,003 million ($72,866 thousand) for the fiscal year ended March 31, 2024.

- 38 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
9.

Marketable Securities and Investment Securities(1) Details
Details of marketable securities and investment securities are as follows:

Marketablesecurities

Investment
securities

Classification
Financial assets measured
at amortized cost
Total
Financial assets measured
at FVOCI
Financial assets measured
at FVPL
Financial assets measured
at amortized cost
Total

Thousands of
U.S. Dollars
March 31,2024

Millions of Yen
March 31,
March 31,
2023
2024
20
20

¥
¥

－
－

$
$

－
－

Bonds

¥
¥

Stock

¥ 119,707¥ 114,160$ 756,026

Other

3,441

6,767

44,815

Bonds

160¥ 123,308

220¥ 121,147

1,456$ 802,296

Note: Stocks under the category of equity instruments are designated as financial
assets measured at FVOCI because they are held to strengthen business
relationships and for the purpose of increasing medium to long-term corporate
value.

- 39 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(2) Major Holdings of Issues and Fair Value
Major holdings of issues and the fair value of the financial assets measured at FVOCI
include the following:
For the fiscal year ended March 31, 2023
Description

Millions of Yen

DAIKIN INDUSTRIES, LTD.

¥ 20,119NISSIN FOODS HOLDINGS CO., LTD.

11,936

Nissan Chemical Corporation

8,077

Yakult Honsha Co.,Ltd.

7,775

Santen Pharmaceutical Co., Ltd.

7,595

Astellas Pharma Inc.

6,235

T&D Holdings, Inc.

5,556

Kikkoman Corporation

4,833

Kurita Water Industries Ltd.

4,380

SHIMADZU CORPORATION

3,805

For the fiscal year ended March 31, 2024
Description

Millions of Yen

Thousands of
U.S. Dollars

DAIKIN INDUSTRIES, LTD.

¥ 12,090$ 80,067

Santen Pharmaceutical Co., Ltd.

9,533

63,133NISSIN FOODS HOLDINGS CO., LTD.

7,749

51,318

Nissan Chemical Corporation

7,720

51,123

Kikkoman Corporation

7,059

46,747

T&D Holdings, Inc.

6,596

43,685Astellas Pharma Inc.

5,442

36,042

Kurita Water Industries Ltd.

4,569

30,261

Yakult Honsha Co.,Ltd.

4,157

27,530SHIMADZU CORPORATION

3,887

25,744- 40 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(3) Dividends Received
Dividends received from the financial assets measured at FVOCI are as follows:
Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Stock held at year-end
Stock disposed during the year

¥ 2,24389¥ 2,333

Total

Thousands of
U.S. Dollars
For the year ended
March 31, 2024

¥ 2,164279¥ 2,443$14,332
1,847$16,179(4) Financial Assets Measured at FVOCI Disposed During the Year
Fair value at the date of sale of financial assets measured at FVOCI that were
disposed during the year and cumulative (pretax) gains or losses are as follows:

Stock

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Fair value
Cumulative
Fair value
Cumulativeat the dategains orat the dategains orof salelossesof salelossesThousands of
U.S. Dollars
For the year ended
March 31, 2024
Fair value
Cumulativeat the dategains orof salelosses¥ 7,804$ 117,012¥ 3,628¥ 17,669¥ 11,970$ 79,273

Notes: 1. The Group sold the investments as a result of a reconsideration of its
business relationships.
2. Cumulative gains or losses (after tax) that the Group transferred from othercomponents of equity to retained earnings are ¥2,535 million and ¥8,309
million ($55,024 thousand) for the years ended March 31, 2023 and 2024,
respectively.

- 41 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
10.

Other Financial Assets

Details of other financial assets are as follows:

Classification(Current assets)
Time deposits

Millions of Yen
March 31, 2023
March 31, 2024

Financial assets
measured atamortized cost
Total

(Non-current assets)
Financial assets
Long-termmeasured attime deposits
amortized cost
Insurance
Financial assets
reserve fundmeasured at FVPL
Total

11.

Thousands of
U.S. Dollars
March 31, 2024¥¥

68,134
68,134¥¥38,45438,454$ 254,660$ 254,660¥

190,000¥

165,000$ 1,092,715

¥

7,441
197,441¥

8,113
173,11353,726$ 1,146,441

Other Assets

Details of other current assets and other non-current assets are as follows:

Millions of Yen
March 31, 2023
March 31, 2024
(Other current assets)
Prepaid expenses
Advance payments
Others
Total(Other non-current assets)
Lease deposits
Long-term prepaid expenses
Others
Total

¥

¥
¥

¥

- 42 -

Thousands of
U.S. Dollars
March 31, 2024

10,465
3,276
7,861
21,602¥ 14,699
1,375
8,233
¥ 24,306$

97,342
9,107
54,520¥ 160,969

820
686
1,808
3,314

¥

802
469
1,524

$

5,313
3,106
10,091¥ 2,795$

18,510Notes to Consolidated Financial Statements
Year Ended March 31, 2024
12.

Inventories

Details of inventories are as follows:

Millions of Yen
March 31, 2023
March 31, 2024
Merchandise and finished goods¥

22,276¥

3,742
18,79544,814Work in process
Raw materials and supplies
Total

¥

24,953Thousands of
U.S. Dollars
March 31, 2024$

5,667
18,009¥48,629165,251
37,530119,265$

322,046

Note: Inventories recognized as expenses for the years ended March 31, 2023 and 2024,
amounted to ¥57,015 million and ¥62,008 million ($410,648 thousand),
respectively. In addition, the write-downs of inventories recognized as an expense
for the years ended March 31, 2023 and 2024, were ¥588 million and ¥856 million($5,671 thousand), respectively.

- 43 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
13.

Property, Plant, and Equipment(1) Schedule of Movements
The movements in the cost, accumulated depreciation, accumulated impairment
losses and carrying amount of property, plant, and equipment are as follows:
Cost
Millions of Yen
Buildings andstructures

Machinery andvehiclesTools,
furniture, andfixtures

Construction inprogress¥ 31,168
538
－
(294)

¥ 120,175
4,428
449(1,365)¥ 30,263
129
179
(296)

¥ 29,313
2,320
206(1,495)¥ 2,001
422
(833)
－

¥ 212,919
7,837－(3,450)

－
(457)

262
(1,249)

－
－

18
(0)

3
(93)

284
(1,799)¥ 30,955¥ 122,700¥ 30,274¥ 30,361¥ 1,500¥ 215,790

159
0
(216)

3,419
248
(1,764)

470
669
(576)

1,528
279
(1,473)819(1,197)
(38)

6,396
－
(4,067)

－
－

698
－

－
－

56
－

0
(117)

754
(117)

¥ 30,899¥125,301¥ 30,836

968¥218,756

Land
Balance atApril 1, 2022
Acquisition
Transfer
Sale or disposal
Exchange differenceson translation offoreign operations
Other
Balance at
March 31, 2023
Acquisition
Transfer
Sale or disposal
Exchange differenceson translation offoreign operations
Other
Balance at
March 31, 2024¥

30,751¥

Total

Thousands of U.S. Dollars
Buildings andstructures

Machinery andvehiclesTools,
furniture, andfixtures

Construction inprogress$ 205,003
1,055
3(1,434)$ 812,583
22,645
1,644(11,681)$ 200,489
3,113
4,430
(3,817)$ 201,067
10,121
1,848(9,755)$ 9,934
5,424(7,925)(250)$ 1,429,075
42,358－(26,936)

－

4,621

－

370

2

4,992

－

－

－

－

(772)

(772)

$ 204,627$ 829,811$ 204,215$ 203,651$ 6,413$ 1,448,717

Land
Balance at
March 31, 2023
Acquisition
Transfer
Sale or disposal
Exchange differenceson translation offoreign operations
Other
Balance at
March 31, 2024

- 44 -

Total

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Accumulated depreciation and accumulated impairment losses
Millions of Yen
Buildings andstructures

Machinery andvehiclesTools,
furniture, andfixtures

Construction inprogress¥ (831)
(275)
(35)
111

¥ (62,819)(5,753)
(461)
1,089

¥ (18,088)(1,568)－251¥ (19,049)(2,188)
(1)
1,432

¥ －
－
－
－

¥(100,787)(9,784)
(498)
2,883

－
35

(46)
834

－
－

(7)
－

－
－

(54)
870

¥ (996)¥ (67,156)¥ (19,405)¥ (19,813)¥ －¥ (107,370)

(251)
－
98

(5,951)(6)
1,616(1,562)－560(2,311)
(8)
1,436

－
(38)
38

(10,075)
(51)
3,749

－
－

(224)
－

－
－

(33)
－

－
－

(257)
－

¥ (1,148)¥ (71,721)¥ (20,407)¥ (20,729)¥ －¥ (114,004)

Land
Balance atApril 1, 2022
Depreciation
Impairment losses
Sale or disposal
Exchange differenceson translation offoreign operations
Other
Balance at
March 31, 2023
Depreciation
Impairment losses
Sale or disposal
Exchange differenceson translation offoreign operations
Other
Balance at
March 31, 2024

Total

Thousands of U.S. Dollars
Buildings andstructures

Machinery andvehiclesTools,
furniture, andfixtures$ (6,594)(1,661)－652$ (444,744)(39,412)(39)
10,702$ (128,510)(10,344)－
3,711$ (131,214)(15,305)
(51)
9,511

－

(1,483)－－－$ (7,603)$ (474,976)

Land
Balance at
March 31, 2023
Depreciation
Impairment losses
Sale or disposal
Exchange differenceson translation offoreign operations
Other
Balance at
March 31, 2024

- 45 -

Construction inprogress

Total

–
－
(250)
250

$ (711,062)(66,721)(339)
24,826(216)－(1,699)

－

－

－

－

$ (135,143)$ (137,275)–$ (754,996)$$

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Carrying amountMillions of Yen

Balance atApril 1, 2022
Balance at
March 31, 2023
Balance at
March 31, 2024

Land

Buildings andstructures

Machinery andvehiclesTools,
furniture, andfixtures

Construction inprogress

Total¥ 30,337¥ 57,355¥ 12,174¥ 10,264¥ 2,001¥ 112,131

29,96055,544

10,86910,5481,500

108,420

29,75153,58010,43010,023968

104,752

Thousands of U.S. Dollars

Balance at
March 31, 2024

Land

Buildings andstructures

Machinery andvehiclesTools,
furniture, andfixtures

Construction inprogress

Total$ 197,024$ 354,836$ 69,072$ 66,376$ 6,413$ 693,721

Notes: 1. Depreciation of property, plant, and equipment is included in “Cost of
sales”, “Selling, general, and administrative expenses”, and “Research anddevelopment costs” in the consolidated statement of income.
2. The amounts of right-of-use assets are included in each item of property,
plant, and equipment. The carrying amount of each right-of-use asset isdescribed in “20. Leases.”
3. Commitments related to property, plant, and equipment purchases aredescribed in “36. Commitments for Expenditure.”(2) Impairment Losses
Property, plant, and equipment are grouped into the smallest cash-generating unit(s)generating largely independent cash inflows.
The Group recognized impairment losses for property, plant, and equipment of ¥498
million and ¥51 million ($339 thousand) for the years ended March 31, 2023 and2024, respectively, which are included in “Other expenses” in the consolidated
statement of income.
Impairment losses recognized for the years ended March 31, 2023 and 2024,
represent reductions in the carrying amounts of assets to be disposed of and idle
assets not expected to be used in the future to their recoverable amounts. The
recoverable amounts were measured at fair value less costs to sell. The recoverable
amounts of assets to be disposed of were considered to be zero.

- 46 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
14.

Intangible Assets(1) Schedule of Movements
The movements in the cost, accumulated amortization, and accumulated
impairment losses and carrying amount of intangible assets are as follows:
Cost
Millions of Yen
Patents andlicenses
Balance at April 1, 2022
Acquisition
Transfer
DisposalExchange differences ontranslation of foreign operations
Other
Balance at March 31, 2023
Acquisition
Transfer
DisposalExchange differences ontranslation of foreign operations
Other
Balance at March 31, 2024¥

Software

Others87,31911,902－－¥ 15,107
785
933(1,375)－－

4－

99,220¥ 15,454

9,555
－
－

1,051
625
(1,154)－－10－¥ 108,775¥ 15,986

¥

¥

¥

¥

Total

1,370
940
(933)
(6)

¥ 103,796
13,626－(1,381)

－
(280)

4
(280)

1,090

¥ 115,765

772
(625)
(113)

11,377－(1,266)

－
(95)

10
(95)

1,029

¥ 125,790

Thousands of U.S. Dollars
Patents andlicenses
Balance at March 31, 2023
Acquisition
Transfer
DisposalExchange differences ontranslation of foreign operations
Other
Balance at March 31, 2024

$ 657,089
63,278－－－

Software

Others$ 102,343
6,959
4,140
(7,641)
65$ 7,221
5,110(4,140)
(746)
－

Total
$ 766,653
75,347－(8,387)
65

－

－

(631)

(631)

$ 720,367$ 105,866$ 6,814$ 833,047- 47 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Accumulated amortization and accumulated impairment losses
Millions of Yen
Patents andlicenses
Balance at April 1, 2022
Amortization
Disposal
Impairment losses
Exchange differences ontranslation of foreign operations
Other
Balance at March 31, 2023
Amortization
Disposal
Impairment losses
Exchange differences ontranslation of foreign operations
Other
Balance at March 31, 2024

Software

OthersTotal¥ (30,617)(6,155)－(1,000)¥ (8,051)(1,510)1,100－¥ (394)(1)－－¥ (39,062)(7,667)1,100(1,000)

－
－

(2)
－

－
－

(2)
－

¥ (37,771)¥ (8,464)¥ (396)¥ (46,631)(6,424)－(14,834)(1,640)
1,008
－

(1)
27
－

(8,065)
1,035(14,834)

－

(8)

－

(8)

－

–

－

－

¥ (59,030)¥ (9,103)¥ (370)¥ (68,502)

Thousands of U.S. Dollars
Patents andlicenses
Balance at March 31, 2023
Amortization
Disposal
Impairment losses
Exchange differences ontranslation of foreign operations
Other
Balance at March 31, 2024

Software

OthersTotal$ (250,141)(42,545)－(98,238)$ (56,051)(10,858)
6,675－$ (2,622)
(9)
181
－

$ (308,813)(53,412)6,856(98,238)

－

(51)

－

(51)

－

－

－

－

$ (390,924)$ (60,284)$ (2,450)$ (453,659)- 48 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Carrying amountMillions of Yen

Balance at April 1, 2022
Balance at March 31, 2023
Balance at March 31, 2024

Patents andlicenses¥ 56,702¥ 61,449¥ 49,746

Software¥ 7,056¥ 6,990¥ 6,883

Others
¥ 976
¥ 695
¥ 659

Total
¥ 64,734¥ 69,134¥ 57,288

Thousands of U.S. Dollars

Balance at March 31, 2024

Patents andlicenses$ 329,443

Software$ 45,582

Others$ 4,364

Total$ 379,388

Notes: 1. Amortization of intangible assets is included in “Cost of sales”, “Selling,
general, and administrative expenses”, and “Research and development
costs” in the consolidated statement of income.
2. Among the intangible assets above, intangible assets that are still notavailable for use amounted to ¥17,191 million and ¥13,461 million($89,149 thousand) as of March 31, 2023 and 2024, respectively. Thesemainly consist of separately acquired in-process research and development
costs recorded in “Patents and licenses,” which are still in research anddevelopment phases, and accordingly, they are not in a condition foravailable for use until the phase where marketing approvals have beenobtained from the related authorities and they are finally made into
products.
3. Commitments related to intangible asset purchases are described in “36.
Commitments for Expenditure.

- 49 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(2) Individually Significant Intangible Assets① Details and Carrying Amounts
Details of significant intangible assets and their carrying amounts are as follows:

Item

Patents and licenses

Details
In-process research anddevelopment costs
acquired separately
Sales licenses
Total

Millions of Yen
March 31,
March 31,
2023
2024

¥ 16,876
44,573¥ 61,449¥ 13,176
36,570¥ 49,746

Thousands of
U.S. Dollars
March 31,2024$

87,257242,186$ 329,443

Note: Major items of in-process research and development costs acquired
separately and sales licenses consisting of lump-sum payments for
introductions and milestone payments to licensors are as follows:
March 31, 2023
In-process research anddevelopment costs
acquired separately

Sales licenses

ONO-7912(CPI-613)/Devimistat
ONO-7913/Magrolimab
ONO-2017/Cenobamate
RBN-2397
itolizumab
ONO-7018
FORXIGAKYPROLISPARSABIV
BRAFTOVI, MEKTOVICORALANONGENTYS
ADLUMIZJOYCLU- 50 -March 31, 2024
ONO-7913/Magrolimab
ONO-2017/Cenobamate
itolizumab
ONO-7018

FORXIGAKYPROLIS
BRAFTOVI, MEKTOVICORALANONGENTYS

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
② Remaining Amortization Period
The average remaining amortization periods of significant intangible assets are
as follows:
Item
Patents and licenses

Details
Sales licenses (years)

March 31, 2023
7.2

March 31, 2024
6.4

(3) Impairment Losses
For intangible assets, the Group determines whether there is any indication of
impairment on each asset at the end of each reporting period. If any indication of
impairment exists, each asset is tested for impairment. In addition, intangible assets
with indefinite useful lives or intangible assets not yet available for use are tested for
impairment at a certain time each fiscal year, regardless of whether there is any
indication of impairment.
Impairment tests are performed by calculating the recoverable amount of eachintangible asset and comparing the recoverable amount with its carrying amount. In
cases where a recoverable amount of an individual asset cannot be estimated, therecoverable amount of the cash-generating unit to which the asset belongs isestimated.
The recoverable amount of an asset or a cash-generating unit is measured at thehigher of its fair value less costs to sell or its value in use. The value in use iscomputed by discounting the estimated future cash flows to the present value. The
value in use is calculated by using management assumptions such as forecasted sales
quantities and discount rate.
The discount rate used is a pretax rate that reflects the time value of money and therisks inherent to the asset using unadjusted estimates of future cash flows.
The Group’s discount rate used in calculating the value in use is calculated based on
the weighted-average cost of capital, and the pre-tax discount rate is from 7.2% to12.2% for the year ended March 31, 2023 and from 5.5% to 11.1% for the year ended
March 31, 2024, respectively.

- 51 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
As a result of impairment testing, the Group recognized impairment losses of ¥1,000
million for sales licenses for the fiscal year ended March 31, 2023, and ¥11,134
million ($24,503 thousand) for sales licenses (mainly Joyclu intra-articular injection
and Parsabiv intravenous injection) and ¥3,700 million ($73,735 thousand) for inprocess research and development costs for the fiscal year ended March 31, 2024,
respectively. Impairment losses on sales licenses present reductions in the carrying
amounts to the recoverable amounts due to decreased profitability, and therecoverable amounts are calculated based on value in use of the licenses. Impairment
losses on in-process research and development costs are recognized due to thediscontinuation of new drug development. Impairment losses on sales licenses areincluded in “Cost of sales” in the consolidated statement of income and impairment
losses on in-process research and development costs are included in “Research anddevelopment costs”, respectively.
15.

Investments in Associates

Aggregate financial information of equity-method investees is summarized as follows:
Millions of Yen
For the year ended For the year ended
March 31, 2023
March 31, 2024
Profit (loss) from continuing operations attributable to
the Group
Other comprehensive income attributable to the Group
Total comprehensive income attributable to the Group

¥
¥

4
2
6

Note: There are no quoted stock prices available for associates.

- 52 -

¥
¥

1
(4)
(3)

Thousands of
U.S. Dollars
For the year ended
March 31, 2024

$

5
(27)
$ (23)

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

16.

Income Taxes(1) Deferred Income Taxes
Amounts of deferred tax assets and deferred tax liabilities at each consolidated fiscal year
end are as follows:
Thousands of
U.S. Dollars

Millions of Yen
Deferred tax assets

March 31, 2023

March 31, 2024¥

35,604983¥

40,863
1,013$

270,614
6,710¥

34,622¥39,850$263,904

Deferred tax liabilities
Net

March 31, 2024

Details and movements of deferred tax assets and deferred tax liabilities by major sources
are as follows:- 53 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

For the year ended March 31, 2023
Millions of Yen

Balance at
March 31, 2022
Deferred tax assets
Accrued bonuses
Accruedenterprise tax
Expenses forresearch anddevelopment
commissions
and others
Investment
securities
Property, plant,
and equipment
Intangible assets
Retirement
benefitliabilities
Other accounts
payableLease liabilities
Others
Total
Deferred tax
liabilities
Property, plant,
and equipment
Intangible assets
Investment
securities
Right-of-use assets
Others
Total
Net

¥

Changes in
Accounting
Policies

1,785¥

Balance atApril 1, 2022

－

¥

1,785

Recognized in
profit or loss¥

46

Recognizedin othercomprehensive
income¥－Balance at
March 31, 2023
¥

1,832

256

－

256

1,912

－

2,168

34,720－34,7202,210－

36,930

－

－

－

33

9

41

2,258
324

－
－

2,258
324

13
383

－
－

2,271
707

2,871

－

2,871

71

50

2,992

3,471
－
7,540
¥ 53,226

¥

－
2,196
(37)
2,159

3,471
2,196
7,503
55,385

2,887
63
2,173
9,791

－
－
－
59

6,359
2,259
9,677
¥ 65,235

¥

¥

－
－

¥

88
－
－
88
147

(23,498)(2,204)(1)¥ (30,613)¥ 34,622(4,248)(1,352)(23,561)－－¥ (29,161)¥
24,064－－－(2,159)－¥ (2,159)¥－- 54 -¥¥¥ (4,248)(1,352)¥

77613(23,561)(2,159)－¥ (31,320)¥ 24,064

(25)
(45)
(1)
¥
619
¥ 10,410

¥

¥

¥
¥

(4,171)(739)

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

For the year ended March 31, 2024

Balance atApril 1, 2023
Deferred tax assets
Accrued bonuses
Accrued enterprise tax
Expenses for research and development
commissions and others
Investment securities
Property, plant, and equipment
Intangible assets
Retirement benefit liabilities
Other accounts payable
Lease liabilities
Others
Total
Deferred tax liabilities
Property, plant, and equipment
Intangible assets
Investment securities
Right-of-use assets
Others
Total
Net

¥

1,832
2,168

¥

36,930

¥

41
2,271
707
2,992
6,359
2,259
9,677
65,235¥(4,171)(739)(23,498)(2,204)(1)¥ (30,613)¥ 34,622

Balance atApril 1, 2023
Deferred tax assets
Accrued bonuses
Accrued enterprise tax
Expenses for research and development
commissions and others
Investment securities
Property, plant, and equipment
Intangible assets
Retirement benefit liabilities
Other accounts payable
Lease liabilities
Others
Total
Deferred tax liabilities
Property, plant, and equipment
Intangible assets
Investment securities
Right-of-use assets
Others
Total
Net

Millions of Yen
Recognizedin other
Recognized incomprehensive
profit or loss
income$12,13014,360

179
(639)

2,553
0
(156)
4,373
(8)
(2,290)(114)
266¥ 4,163

¥

¥

¥

¥
¥

(95)
735
14
153
1
808
4,971

－
－

¥

1,182
(4,232)$

244,570273
15,041
4,681
19,812
42,11014,95964,084$ 432,020

16,905
3(1,033)
28,958(53)(15,168)
(755)
1,761
$ 27,569

$

$

$

$

(27,621)(4,894)(155,615)(14,597)(9)$ (202,736)$ 229,283- 55 -

$
$

(632)
4,870
92
1,010
9
5,349
32,917

$
$

2,010
1,529
39,483

(7)
－
－
(10)
－
－
177
160

35
2,115
5,079
2,973
4,068
2,145
10,12069,557

Thousands of U.S. Dollars
Recognizedin other
Recognized incomprehensive
profit or loss
income
$

¥

－

－
－
98
－
－
98
257

¥
¥

Balance at
March 31, 2024¥¥

(4,266)(4)(23,386)(2,052)－(29,708)
39,850¥¥

Balance at
March 31, 2024––$

13,312
10,128

–
(48)
–
–
(68)
–
–
1,173
1,057

261,475229
14,00833,63919,691
26,942
14,20467,017$ 460,645

–
–
646
–
–
646
1,703

$

(28,253)(24)(154,877)(13,587)－$ (196,741)$
263,904

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
Notes: 1. The differences between deferred tax expense and the amount recognizedin profit or loss are exchange differences on translation of foreign
operations and others.
2. The effective statutory tax rate used to calculate deferred tax assets anddeferred tax liabilities as of March 31, 2023 and 2024 in Japan is 30.6%.
3. Taxable temporary differences associated with investments in subsidiaries,
for which deferred tax liabilities were not recognized, amounted to¥7,580 million and ¥11,099 million ($73,500 thousand) as of March 31,
2023 and 2024, respectively. This is because the Group is able to control
the timing of the reversal of the temporary differences, and it is certain thatthe temporary differences will not reverse in the foreseeable future.
4. As described in “Note 2, Basis of Preparation (4) Changes in Accounting
Policies”, the Group has applied IAS 12 “Income Taxes” (revised May2021) from the year ended March 31, 2024. This change in accounting
policy has been applied retrospectively to related accounts for the year
ended March 31, 2023.

- 56 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

The amount of deductible temporary differences, and unused tax losses for which
no deferred tax assets is recognized in the statement of financial position is asfollows. Deductible temporary differences and unused tax losses are on a tax basis.

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Deductible temporary
differences
Unused tax losses *
Total

¥ －
－
¥ －

¥
¥

18
412
430

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$

118
2,730
$ 2,848*Note: The scheduled expiration of unused tax losses for which no deferred tax assets is
recognized is as follows;First year
Second year
Third year
Fourth year
Fifth year
No expiration date
Total

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥
－
¥
－
－
－
－
－
－
－
－
412
－
－
¥
412
¥
－

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$
－
－
－
－
2,730
－
$
2,730

(2) Income Tax Expense
Details of income tax expense are as follows:

Current tax expense
Deferred tax expense
Total

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥ 41,020¥ 40,447(10,401)(4,753)¥ 35,694¥ 30,619

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$ 267,862(31,477)$ 236,385

Notes: 1. The Group is subject to corporate tax, inhabitant tax, and enterprise tax in Japan,
which in the aggregate resulted in an applicable tax rate for current tax expenseof 30.6% for the years ended March 31, 2023 and 2024. Overseas subsidiaries
use the income tax rates of the countries in which they are located.
2. The Group is assessing exposure to corporate income taxes arising from enacted
or substantively enacted tax systems in order to implement the Pillar Two Model- 57 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
Rules published by the Organization for Economic Co-operation andDevelopment (OECD). The exposure to Pillar Two income taxes is immaterial.
(3) Reconciliation of Applicable Tax Rates and Average Actual Tax Rates
Details of the differences between the applicable tax rates and average actual tax rates
are as follows:

Applicable tax rates
Permanent non-deductible items
Non-taxable dividends
Tax credit for research and development, etc.
Effect of assessment of recoverability ofdeferred tax assets
OthersAverage actual tax rates

For the year ended
March 31, 2023
30.6%
0.4
(0.1)
(10.2)For the year ended
March 31, 2024
30.6%
0.1
(0.1)
(10.0)

－
0.6
21.3%

0.3
0.9
21.8%

Note: The applicable tax rates used to reconcile the applicable tax rates and average
actual tax rates are the Company’s effective statutory tax rates.

- 58 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
17.

Trade and Other Payables

Details of trade and other payables are as follows:
Thousands of
U.S. Dollars

Millions of Yen
March 31, 2023

Notes payable
Trade accounts payable
Other accounts payable
Refund liabilities

March 31, 2024

461
7,572
54,573
4,188

¥

501
10,24044,499
5,450

$

3,317
67,817
294,696
36,094¥ 66,794¥

60,691$

401,925

¥

Total

18.

March 31, 2024

Other Financial Liabilities

Details of other financial liabilities are as follows:
Thousands of
U.S. Dollars

Millions of Yen
March 31, 2023

March 31, 2024

March 31, 2024

¥

¥

$

Current liabilities
Dividends payable
Deposits received
Other
Total
Non-current liabilities
Other
Total

19.

134
362
166
¥ 661

134
551
1,588
¥ 2,273887
3,649
10,516$15,052

¥

0

¥

0

$

2

¥

0

¥

0

$

2

Assets Pledged as Collateral

Assets pledged as collateral are as follows:
Thousands of
U.S. Dollars

Millions of Yen
Other current assets

March 31, 2023

March 31, 2024

¥

¥

6,500

7,500

March 31, 2024
$ 49,669

Note: These were pledged as collateral for the deferred payment arrangements of customs
duties and consumption taxes related to import transactions based on the Customs
Act of Japan and the Consumption Tax Act of Japan.

- 59 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

20.

Leases(1) Right-of-use assets
Right-of-use assets are included in “Property, plant, and equipment” in the
consolidated statement of financial position.
The main areas of leases that the Group has entered into are for offices, parking
lots, and cars. Certain lease contracts include renewal options. The lease contracts
do not include purchase options, variable lease payments, or escalation clauses.
There are no restrictions, such as additional borrowings and additional lease
contracts, in the contracts.
Information on leases that the Group has entered into as a lessee is as follows:
Millions of Yen

Balance atApril 1, 2022
Acquisition
Depreciation
Other
Balance at
March 31, 2023
Acquisition
Depreciation
Other
Balance at
March 31, 2024

Tools,
furniture, andfixtures

Land

Buildings andstructures

Machinery andvehicles¥ 1,510
177
(267)
(183)

¥ 5,762
3,165(2,068)(65)¥ 1,158
－
(403)
(44)

¥

52
1
(24)
0

¥

8,482
3,343
(2,762)(292)¥ 1,237
154
(241)
(118)

¥ 6,794
1,880(2,246)
276

¥

711
248
(378)
(6)

¥

30
0
(24)
0

¥

8,772
2,282
(2,889)
153

¥

¥

¥

576

¥

6

¥

8,317

1,032

6,704

Total

Thousands of U.S. Dollars

Balance at
March 31, 2023
Acquisition
Depreciation
Other
Balance at
March 31, 2024

Tools,
furniture, andfixtures

Land

Buildings andstructures

Machinery andvehicles$ 8,193
1,019(1,594)(781)$ 44,996
12,448(14,874)
1,827$ 4,709
1,645(2,505)
(37)

$

196
1
(162)
2

$ 58,094
15,113(19,135)
1,010

$

$

$

$

37

$

6,836

44,397- 60 -

3,812

Total

55,082

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(2) Lease liabilities
The maturity analysis of lease liabilities of the Group is described in “32. Financial
Instruments (4) Liquidity Risk Management.”(3) Profit or loss related to right-of-use assets
The amount recognized in profit or loss is as follows:
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023

Depreciation forright-of-use assets¥

For the year ended
March 31, 2024

2,762

¥

For the year ended
March 31, 2024

2,889

$

19,135

Note: The interest expenses on lease liabilities are described in “29. Finance Income
and Finance Costs.”(4) Amount recognized in the consolidated statement of cash flows
The amount recognized in the consolidated statement of cash flows is as follows:
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023

Total cash outflow
for leases

For the year ended
March 31, 2024

¥ 4,014¥- 61 -

3,980

For the year ended
March 31, 2024$

26,356

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
21.

Other Liabilities

Details of other current liabilities and other non-current liabilities are as follows:
Thousands of
U.S. Dollars

Millions of Yen
March 31, 2023
Other current liabilities
Accrued consumption taxes
Accrued salary and bonus
Accrued compensated vacation
Accrued expenses

Total

March 31, 2024

¥

6,321
6,483
3,500
1,743
362

¥

2,425
7,354
4,171
1,968
339

$ 16,057
48,702
27,621
13,035
2,248¥

18,409¥16,257$ 107,663

¥

534
151
684

¥

532
48
580

Others
Total
Other non-current liabilities
Compensated long-service
benefit obligations
OthersMarch 31, 2024¥

- 62 -

¥

$
$

3,524
318
3,841

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

22.

Retirement Benefits

The Group has defined benefit corporate pension plans and lump-sum payment plans for
its defined benefit schemes. Effective October 1, 2004, the Company introduced a new
defined benefit corporate pension plan combining the defined benefit corporate pension
plan (formerly additional pensions under employees’ pension fund plan) and a taxqualified pension plan, and granted employees the option to select a defined contribution
plan for certain lump-sum payment plans. In addition, the Company has set up a
retirement benefit trust in order to supplement funding deficits in benefit obligations.
Further, four overseas subsidiaries have defined contribution plans. Two domestic
subsidiaries participate in corporate pension fund plans (multiemployer pension plans) inaddition to lump-sum payment plans.
The Group calculates the present value of defined benefit obligations and related service
costs based on actuarial assumptions. The actuarial assumptions require estimates andjudgments on variables, such as discount rates and net interest, etc. With advice
obtained from external pension actuaries with respect to the appropriateness of theactuarial assumptions including the variables, the actuarial assumptions are determinedbased on the best estimates and judgments made by management; however, changes in
uncertain future economic conditions may have a material impact on the future
performance of the Group.

- 63 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(1)

Defined Benefit Plans① Defined Benefit Plan Liabilities and Assets
Details of defined benefit plan liabilities and assets in the consolidated statementof financial position are as follows:
Thousands of
U.S. Dollars

Millions of Yen
Funded typeDefined benefit obligations
Fair value of plan assets (including
retirement benefit trust)March 31, 2023

March 31, 2024¥¥

47,964

46,462

March 31, 2024$

307,693(49,998)
4,580(52,909)
8,938(350,388)
59,192

2,546

2,491

16,497

Defined benefit obligations

804

803

5,316

Subtotal
Net defined benefit liabilities(assets)
Retirement benefit liabilities statedin the consolidated statement offinancial position

804

803

5,316

Effect of asset ceiling
Subtotal
Unfunded type

¥

3,350

¥

3,294

$

21,812

¥

3,350

¥

3,294

$

21,812- 64 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

② Obligations under Defined Benefit Plans
Movements in the defined benefit obligations are as follows:
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023
Opening balance of defined benefit obligations
Service cost
Interest expense
Remeasurements
Actuarial losses (gains) due to changes infinancial assumptions
Others¥¥(3,682)49

Benefits paid
Closing balance of defined benefit obligations

51,4502,323
460

For the year ended
March 31, 2024¥

(1,831)
48,76848,7682,171659

For the year ended
March 31, 2024$

(2,805)472¥(2,002)47,264

322,968
14,381
4,366(18,573)
3,126$(13,259)
313,009

Notes: 1. The weighted-average payment years for the defined benefit
obligations were 14.8 years and 14.0 years as of March 31, 2023 and2024, respectively.
2. Remeasurements of defined benefit plans are the differences between
the actuarial assumptions used for the calculation of “Defined benefit
liabilities” and actual amount, and the impact of changes in actuarial
assumptions.

- 65 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

③ Plan Assets
Movements in the fair value of plan assets are as follows:
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023

Opening balance of fair value of plan assets
Interest income
Remeasurements
Return on plan assets
Contributions from employers¥

49,429453

Benefits paid¥

Closing balance of fair value of plan assets

For the year ended
March 31, 2024¥

For the year ended
March 31, 2024

49,998
692

(151)
1,675
(1,408)

1,994
1,703
(1,479)49,998¥ 52,909$

331,115
4,580
13,208
11,279(9,794)$350,388

Note: The Group expects to make contributions of ¥1,710 million ($11,323
thousand) to the defined benefit corporate pension plans in the following
consolidated fiscal year.
The fair value of plan assets classified by nature of assets and risks is as follows:
Thousands ofMillions of Yen

U.S. Dollars

March 31, 2023
Assetswith
activemarketpricesAssetswithout
activemarketpricesMarch 31, 2024

Total

Assetswith
activemarketpricesAssetswithout
activemarketprices¥March 31, 2024

Total

Assetswith
activemarketpricesAssetswithout
activemarketprices$

Total

Equity instruments－¥ 3,963$ 26,246－

3,719

24,627

－
－

3,872
1,736

3,872
1,736

－

32,67732,677¥ 3,310 ¥
2,905

－
－

¥ 3,310
2,905¥ 3,963
3,719

Overseas debt instruments

－
－

2,721
1,614

2,721
1,614

Life insurance general accounts－

32,20732,207

Domestic equity instruments
Overseas equity instruments
Debt instruments
Domestic debt instruments

Others
Total

－

7,242

7,242

－

6,941

6,941

－
－
－
－

¥ 6,215¥ 43,784¥ 49,998¥ 7,682¥ 45,227¥ 52,909$ 50,873- 66 -－－$ 26,246
24,62725,646
11,49425,646
11,494

216,407

216,40745,96845,968$ 299,515$ 350,388

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

The Group’s operating policy for plan assets is as follows:
The Group’s basic policy for plan asset management aims to secure necessary
long-term returns within a tolerable risk level in order to ensure future paymentof pension benefits and lump-sum payments stipulated in the terms of defined
benefit corporate pension plans.
A target rate of return is set aiming to exceed the rate of return necessary for
maintaining sound operations of the defined benefit corporate pension plans overthe future, specifically higher than the expected rate of return for pension
financing.
In order to meet this return target, the asset portfolio is verified by both theCompany and the investment management institutions to be in conformity withthe basic policy. In addition, the composition of the asset portfolio is reviewed
as necessary.
The basic policy is subject to change in accordance with changes in the Group’s
status and systems or operating environment surrounding the Group.

- 67 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
④ Effect of Asset Ceiling
When the defined benefit plan has a surplus, the defined benefit asset islimited to the asset ceiling, which is the present value of future economic
benefits available in the form of refunds from the defined benefit plan or
reductions in future contributions to the plan.
Movements in the effect of the asset ceiling are as follows.
Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Effect at the
beginning of theyear
Limit of interest
incomeRemeasurement ofdefined benefit plan
Change in effectof asset ceiling
Effect at the end of
the year

⑤

¥

¥

924

¥

4,580

Thousands of
U.S. Dollars

For the year ended
March 31, 2024$

30,330

9

65

431

3,647

4,293

28,431

4,580

¥

8,938

$

59,192

Profit and Loss on Defined Benefit Plans
Profit and loss on defined benefit plans for each fiscal year recognized in the
consolidated statement of income are as follows:

Service costs
Net interest
Expenses recognizedin the consolidated
statement of income

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024¥
2,323
¥ 2,171
16
33

¥

2,339

¥

2,204

Thousands of
U.S. Dollars

For the year ended
March 31, 2024
$ 14,381
216$

14,597

Note: Among the above expenses, service costs are included in “Cost of sales,”“Selling, general, and administrative expenses,” and “Research anddevelopment costs,” and net interest is included in “Finance income” or“Finance costs.”- 68 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Significant Actuarial Assumptions⑥

Significant actuarial assumptions are as follows:

Discount rate (%)
Expected rate of salary increase (%)
Expected average remaining lives ofcurrent pensioners at age 60 at fiscal
year end (years)
Expected average remaining lives,
from age 60, of future pensioners at
age 40 at fiscal year end (years)

March 31, 2023
1.4
2.7

March 31, 2024
1.8
2.7

26.7

26.8

28.2

28.4

Sensitivity Analysis⑦

The sensitivity analysis represents the effects of changes in significant actuarial
assumptions on the present value of the defined benefit obligations. The effects
of any changes in assumptions on the defined benefit obligations are as follows:
Thousands of U.S.
Dollars

Millions of Yen

March 31, 2023

March 31, 2024

March 31, 2024

Changes inprincipal
assumptions

Increase

Decrease

Increase

Decrease

Increase

Decrease

Discount rate

0.5%
increase/decrease¥ (3,416)¥ 3,693¥ (3,128)¥ 3,367$ (20,714)$ 22,300

Expected
averageremaining lives

1 yearincrease/decrease

842

(796)

749

(710)

4,958

(4,699)Defined benefit
obligations

Note: The analysis is based on the assumption that other factors remain constant.

- 69 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(2) Multiemployer Pension Plans
Two domestic consolidated subsidiaries have joined corporate pension fund plans(multiemployer pension plan). This plan is integrated-type defined benefit plan, andtherefore, the amount of pension assets corresponding to the contributions made byeach company cannot be determined reasonably. Thus, the amount of thecontribution is recognized as postemployment expenses in the same manner as
defined contribution plans.
(3) Defined Contribution Plans
The Group recognized ¥3,286 million and ¥3,457 million ($22,893 thousand) as
expenses for defined contribution plans for the years ended March 31, 2023 and 2024,
respectively.

- 70 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

23.

Share Capital and Other Equity Items(1) Share Capital and Capital Reserves
Changes in the number of authorized shares and issued shares, share capital, andcapital reserves are as follows:
Millions of Yen
Number of
authorized shares(Shares)Number ofissued shares(Shares)

Share capital

Capital reserves

Balance at April 1, 2022
Increase (decrease)
Balance at March 31, 2023
Increase (decrease)1,500,000,000–

528,341,400(10,916,200)¥ 17,358–¥ 17,241(161)

1,500,000,000–

517,425,200(18,732,400)¥ 17,358–¥ 17,080
378

Balance at March 31, 2024

1,500,000,000

498,692,800¥ 17,358¥ 17,458

Thousands of U.S. Dollars

Share capital

Capital reserves

Balance at March 31, 2023
Increase (decrease)$ 114,955–$ 113,112
2,505

Balance at March 31, 2024

$ 114,955$ 115,617

Notes: 1. All shares issued by the Company are fully paid-up ordinary shares with nopar value.
2. Decrease in the number of issued shares for the fiscal years ended March
31, 2023 and 2024 is due to retirement of treasury shares.

- 71 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(2) Treasury Shares
Changes in the number and amount of treasury shares are as follows:

Balance at April 1, 2022
Increase (decrease)
Balance at March 31, 2023
Increase (decrease)
Balance at March 31, 2024

Number of shares(Shares)
40,096,713(11,005,495)
29,091,218(45,872)
29,045,346

Balance at March 31, 2023
Increase (decrease)
Balance at March 31, 2024

Notes: 1.

Amount(Millions of Yen)
¥ 74,683(20,522)¥ 54,161
9,072¥ 63,233

Amount(Thousands of U.S.
Dollars)$ 358,683
60,082$ 418,765

Decrease in the number and amount of treasury shares for the year ended
March 31, 2023 is due to increases in purchases of fractional unit shares,
retirement of treasury shares, and disposal of treasury shares for restricted

stock-based remunerations.
2. Decrease in the number and amount of treasury shares for the year ended
March 31, 2024 is due to increases in purchases of treasury shares under
Article 156 of the Companies Act, applied by the reading of terms
pursuant to the provisions of Paragraph 3, Article 165 of the Companies
Act and fractional unit shares, retirement of treasury shares, and disposalof treasury shares for restricted stock-based remunerations.
3. Treasury shares held by associates as of March 31, 2023 and 2024, are¥34 million and ¥34 million ($222 thousand), respectively.

- 72 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(3) Other Components of Equity
Changes in other components of equity are as follows:

Balance at April 1, 2022
Increase (decrease)
Other comprehensive income
Transfer to retained earnings
Balance at March 31, 2023
Increase (decrease)
Other comprehensive income
Transfer to retained earnings
Balance at March 31, 2024

Balance at March 31, 2023
Increase (decrease)
Other comprehensive income
Transfer to retained earnings
Balance at March 31, 2024

Exchangedifferences ontranslation offoreign operations¥ 1,701

Net fair value gain
(loss) on cash
flow hedge¥ －Millions of Yen
Net gain (loss) on
financial assets
measured at
FVOCI¥ 49,535

472－¥ 2,173

－
－
¥ －

2,528
(2,535)¥ 49,529

2,124－¥ 4,297(402)－¥(402)

8,080(8,309)¥ 49,300

Exchangedifferences ontranslation offoreign operations$ 14,389
14,066–$ 28,454

Remeasurement ofdefined benefit
plans
¥
–

¥

(114)
114
－

2,886
(2,421)¥ 51,701

¥

23
(23)
－

9,825
(8,332)¥ 53,194

Thousands of U.S. Dollars
Net gain (loss)
Net fair value gain on financial assets Remeasurement of(loss) on cash
measured atdefined benefit
flow hedge
FVOCI
plans
$
–
$ 328,004$–(2,661)–$ (2,661)

53,507(55,024)$ 326,488

$

155
(155)
–

Notes: 1. Exchange differences on translation of foreign operations are thedifferences arising from consolidating the financial statements of overseas
subsidiaries, which were prepared in foreign currencies.
2. Net fair value gain (loss) on derivatives under cash flow hedge is theeffective portion of fair value change in derivative transactions, which aredesignated as cash flow hedges and meet their specific criteria.
3. Changes in fair value of financial assets measured through othercomprehensive income are valuation differences in fair value of financial
assets measured through other comprehensive income.
4. Remeasurement of defined benefit plans is recognized in “Other
comprehensive income” when it is incurred and immediately transferredfrom “Other components of equity” to “Retained earnings.”- 73 -

Total¥ 51,236

Total$ 342,393
65,068(55,179)$ 352,281

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
24.

Dividends(1) Dividends Paid
Dividends paid are as follows:
For the year ended March 31, 2023
Date of resolution

Share type

General shareholders’ meeting heldon June 23, 2022
Board of Directors' meeting held on
October 31, 2022

OrdinarysharesOrdinarysharesTotal dividends(Millions of Yen)

Dividends
per share(Yen)¥ 13,671¥ 28.0¥ 16,115¥ 33.0Record date

Effective
date

March 31,2022
September 30,
2022

June 24,2022
December 1,
2022

For the year ended March 31, 2024

Date of resolution
General shareholders’meeting held on
June 22,2023
Board of Directors'
meeting held on
November 1, 2023

Total
dividends(Millions ofYen)

Dividends
per share
(Yen)

Total
dividends(Thousands of
U.S. Dollars)

Dividends
per share(U.S. Dollars)

Ordinaryshares¥ 18,068¥ 37.0$ 119,658

Ordinaryshares¥ 19,140¥ 40.0$ 126,753

Share type

Record date

Effectivedate$ 0.25

March 31,2023

June 23,2023$ 0.26

September 30,
2023

December 1,
2023(2) Dividends Whose Effective Date is in the Following Fiscal Year
Dividends whose record date is in the current fiscal year and whose effective date isin the following fiscal year are as follows:
For the year ended March 31, 2023
Date of resolution
General shareholders’ meeting held on
June 22, 2023

Total dividends(Millions of Yen)

Dividends per
share
(Yen)

¥ 18,068¥ 37.0Total
dividends(Millions ofYen)

Dividends
per share
(Yen)

Total
dividends(Thousands of
U.S. Dollars)

Dividends
per share(U.S.
Dollars)¥ 18,786¥ 40.0$ 124,410$ 0.26

Share type
Ordinary
SharesRecord date
March 31,2023

Effective
date
June 23,2023

For the year ended March 31, 2024

Date of resolution
General shareholders’meeting held on June 20,
2024

Share type
Ordinaryshares- 74 -

Record date

Effective
date

March 31,2024

June 23,2024

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

25

Revenue(1) Disaggregation of revenue
The Group disaggregated revenue by type of goods or services and by geographicarea.
① Details of revenue by type of goods or services
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023
Revenue of goods andproducts
Royalty and others
Opdivo Intravenous
Infusion
Keytruda® from Merck& Co., Inc.
Lump-sum income from
AstraZeneca UK Limited
OthersSubtotal
Total

For the year ended
March 31, 2024

For the year ended
March 31, 2024

¥ 295,045¥ 316,979$ 2,099,199

89,587

97,933

648,562

45,17653,038351,248－
17,37917,032
17,690112,793
117,154

152,141

185,693

1,229,757¥ 447,187¥ 502,672$ 3,328,956

Note: The Company and Bristol Myers Squibb (New Jersey, USA: “BMS”) signed
an agreement with AstraZeneca UK Limited and MedImmune Ltd.
(Cambridge, UK) and certain of their affiliates to completely and globally
settle the infringement lawsuits and disputes over the PD-L1 and CTLA-4
antibody patents owned by the Company and BMS on 24 July, 2023. The
Company recorded the lump-sum income of approximately ¥17,032 million($112,793 thousand) associated with the settlement of the litigation in“Royalty and others” for the year ended 31 March, 2024.
② Details of revenue by geographic area
Details of revenue by geographic area are included in “6. Segment Information(3) Revenue by Geographic Area”.

- 75 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(2) Contract balances
Receivables and contract liabilities from contracts with customers are as follows:
Thousands of
U.S. Dollars

Millions of Yen
April 1, 2022
Receivables fromcontracts with customers
Trade accounts
receivable
Notes receivable
Total

March 31, 2023

March 31, 2024

March 31, 2024¥

92,701
928¥

108,364755¥ 129,012
1,429$ 854,386
9,462¥

93,630¥109,119¥ 130,441$ 863,849

Notes: 1. There were no material contract liabilities.
2. Revenue recognized relating to performance obligations satisfied inprevious periods were ¥142,522 million and ¥160,714 million ($1,064,334
thousand) for the years ended March 31, 2023 and 2024, respectively, andmainly represents royalty revenue.
(3) Transaction price allocated to the remaining performance obligations
There was no transaction price allocated to the remaining performance obligations.
(4) Assets recognized from the costs to obtain or fulfil a contract with a customer
There were no costs to obtain or fulfil a contract with a customer that should berecognized as assets.
26. Selling, General, and Administrative Expenses
Details of major selling, general, and administrative expenses are as follows:
Thousands of U.S.
Dollars

Millions of Yen

Business planning expenses
Sales promotion expenses
Employee benefit expenses
Depreciation and amortization
Business consignment expenses

For the year ended
March 31, 2023

For the year ended
March 31, 2024

¥

¥

3,356
17,83730,1282,843
11,195- 76 -

3,694
24,01931,876
2,881
11,138For the year ended
March 31, 2024$

24,464
159,068
211,101
19,08073,764

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

27.

Employee Benefit Expenses

Details of the Group’s employee benefit expenses are as follows:
Millions of Yen

Salary and bonus
Retirement benefit expenses(defined benefit plans)
Retirement benefit expenses(multiemployer pension plans)
Retirement benefit expenses(defined contribution plans)
Legal welfare expenses
Welfare expenses
Other employee benefit expenses
Total

Thousands of U.S. Dollars

For the year ended
March 31, 2023

For the year ended
March 31, 2024

¥ 40,840¥ 43,558

2,323

2,171

21

22

3,286
2,427
2,001
4,609

3,457
2,640
2,459
5,365

¥ 55,508¥ 59,672

For the year ended
March 31, 2024$

288,463
14,381
148
22,893
17,481
16,28435,530$395,178

Notes: 1. Employee benefit expenses are included in “Cost of sales”, “Selling, general,and administrative expenses,” and “Research and development costs” in the
consolidated statement of income.
2. The employee benefit expenses above include remuneration of key
management personnel. Remuneration of key management personnel is
described in “35. Related Parties.”- 77 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

28.

Other Income and Other Expenses

Details of other income and other expenses are as follows:
Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Other income
Gain on sale of non-current assets
Insurance proceeds
Refunded consumption taxes
Subsidy income
Others
Total
Other expenses
Impairment losses
Loss on disposal of non-current assets
Donations
Litigation costs, etc.
Others
Total

Thousands of U.S. Dollars
For the year ended
March 31, 2024

1
284
－
163
286
734

¥

41
247
459
142
287
¥ 1,176

$

498
95
2,796
7,652
25
¥ 11,065

¥

$

¥

¥
¥

51
159
3,614
333
186
¥ 4,343

$

269
1,633
3,038
943
1,904
7,786

339
1,051
23,9362,205
1,229$ 28,760

Notes: 1. The Company recorded a lump-sum payment in “litigation costs, etc.”
associated with the settlement of litigation on patents with Dana-Farber Cancer
Institute, Inc., for the year ended March 31, 2023.
2. The company recorded a donation to Ono Pharma Oncology, Immunology,
Neurology Research Foundation in “Donations” for the years ended March 31, 2023,
and 2024.

- 78 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
29.

Finance Income and Finance Costs

Details of finance income and finance costs are as follows:
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023
(Finance income)Interest income
Financial assets measured at amortized cost
Financial assets measured at FVPLDividend income
Financial assets measured at FVOCIExchange gains
Others
Total(Finance costs)
Interest expenses
Financial liabilities measured at amortized cost
Lease liabilities
Losses on marketable securities
Financial assets measured at FVPLNet interest on employee benefits
Exchange losses
OthersTotal

For the year ended
March 31, 2024

For the year ended
March 31, 202470－

¥ 1,119
12

$

2,333
－
76
¥ 2,478

2,443
347
105
¥ 4,027

16,1792,299
699$ 26,667

¥

¥

$

¥

0
73

46
16
723
54
¥ 913

- 79 -

¥

0
92
92
33
－
13
229

$

7,411
79

2
606
608
216
－
83
1,516

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

30.

Other Comprehensive Income

Amounts incurred for the current year, reclassification adjustments to profit or loss, andtax effects (including non-controlling interests) for each item of “Other comprehensive
income” are as follows:
For the year ended March 31, 2023
Millions of Yen
Amountincurred
Items that will not be reclassified to
profit or loss
Net gain (loss) on financial assets
measured at FVOCI
Remeasurement of defined benefit
plans
Share of net gain (loss) on financial
assets measured at FVOCI of
associates
Total
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translationof foreign operations
Net fair value gain (loss) on cash
flow hedges
Total

Total other comprehensive income¥¥

Reclassification
adjustments

3,624

¥

－

Before tax effects

¥

3,624

Tax effects¥

Net of tax amount(1,106)¥ 2,518

(164)

－

(164)

50

(114)

3
3,463

－
－

3
3,463

(1)
(1,057)

2
2,406

472

－

472

－

472

(438)
33
3,497

438
438
438

－
472
¥ 3,935－－¥ (1,057)－472¥ 2,878¥

For the year ended March 31, 2024
Millions of Yen
Amountincurred
Items that will not be reclassified to
profit or loss
Net gain (loss) on financial assets
measured at FVOCI
Remeasurement of defined benefit
plans
Share of net gain (loss) on financial
assets measured at FVOCI of
associates
Total
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translationof foreign operations
Net fair value gain (loss) on cash
flow hedges
Total

Total other comprehensive income¥¥

Reclassification
adjustments

11,689¥－Before tax effects¥

Tax effects

11,689¥(3,580)

Net of tax amount

¥

8,109

34

－

34

(10)

23

(6)
11,717－－(6)
11,7172(3,589)

(4)
8,128

2,124

－

2,124

－

2,124

(9,222)(7,098)
4,619

8,643
8,643
8,643

(579)
1,545
13,262177
177¥ (3,412)

(402)
1,722
9,850

¥

- 80 -¥¥

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
Thousands of U.S. Dollars
Amountincurred
Items that will not be reclassified to
profit or loss
Net gain (loss) on financial assets
measured at FVOCI
Remeasurement of defined
benefit plans
Share of net gain (loss) on
financial assets measured at
FVOCI of associates
Total
Items that may be reclassified
subsequently to profit or loss
Exchange differences ontranslation of foreign operations
Net fair value gain (loss) on cash
flow hedges
Total

Total other comprehensive income$

Reclassification
adjustments

77,410$–

Before tax effects$

Tax effects

77,410$ (23,710)

Net of tax amount$

53,700

224

–

224

(68)

155

(39)
77,595––(39)
77,595

12(23,766)(27)
53,82814,066–

14,066–

14,066(61,073)(47,007)$ 30,588

57,23957,23957,239(3,834)
10,23287,8261,173
1,173$ (22,593)(2,661)
11,405$ 65,233$- 81 -$

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

31.

Earnings per Share(1) Basic Earnings per Share① Basic earnings per share are as follows:Yen
For the year ended
March 31, 2023

For the year ended
March 31, 2024

¥ 230.85¥ 266.61

Basic earnings per share

U.S. Dollars
For the year ended
March 31, 2024
$1.77

② Basis of Calculation of Basic Earnings per Share
The basis of calculating of basic earnings per share is as follows:
Thousands of U.S.
Dollars

Millions of Yen
For the year ended
March 31, 2023
Profit for the year attributable toowners of the Company
Weighted-average number ofordinary shares outstanding(thousands of shares)¥

112,723

488,300- 82 -For the year ended
March 31, 2024¥

127,977

480,009

For the year ended
March 31, 2024$

847,533

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(2) Diluted Earnings per Share① Diluted earnings per share are as follows:
Yen

Diluted earnings per share

For the year ended
March 31, 2023
¥ 230.79

For the year ended
March 31, 2024
¥ 266.57

U.S. Dollars
For the year ended
March 31, 2024
$ 1.77② Basis of Calculation of Diluted Earnings per Share
The basis of calculating diluted earnings per share is as follows:
Thousands of U.S.
Dollars

Millions of Yen

Profit for the year attributable toowners of the Company
Adjustment to profit for the year
attributable to owners of theCompany
Profit for the year used in calculating
diluted earnings per share
Weighted-average number ofordinary shares outstanding(thousands of shares)
Increased number of ordinary sharesby share acquisition rights(thousands of shares)
Increased number of ordinary sharesby restricted stock-based
remuneration system (thousands ofshares)
Weighted-average number of diluted
ordinary shares outstanding(thousands of shares)

For the year ended
March 31, 2023

For the year ended
March 31, 2024

For the year ended
March 31, 2024

¥ 112,723¥ 127,977$ 847,533

(15)

(13)

(83)

112,708

127,965

847,450

488,300

480,009

21

－

30

30

488,353

480,039- 83 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

32.

Financial Instruments(1) Equity Management
The Group manages its equity in view of maintaining the confidence of investors,
creditors, and the market, securing a firm capital base for continued future growth,and implementing strategic investments necessary to maximize corporate value while
distributing consistent dividend payments.
The Group’s capital management focuses on net debt where cash and cash
equivalents are deducted from interest-bearing debt and equity (attributable toowners of the Company and non-controlling interests). The Group considers methodsof capital distribution to shareholders based on an evaluation of the medium-term
strategic plan, including business performance, future research and development of
new medicines, partnerships with bio-ventures, and the introduction of pipelines tocomplement research and development risk. This evaluation will exert influence on
decision-making regarding the level of dividend payments and the Group’s market
purchase of treasury shares.
(2) Financial Risk Management
The Group is constantly exposed in its operating activities to various financial risks,
including credit, liquidity, market, and others (e.g., foreign exchange and pricefluctuation). In order to avoid or mitigate these risks, the Group manages risks
according to certain basic policies. The Group policy is not to enter into derivativeor equity transactions for speculative purposes, but to operate funds primarily
through debt instruments such as safe government bonds, etc., while also partiallyemploying financial assets with guaranteed liquidity to meet short-term capitalrequirements. For derivative transactions, the Group enters into foreign exchange
contracts to mitigate the foreign exchange risk associated with settling payments inforeign currencies. Such transactions are controlled by the Accounting Departmentof the Company.

- 84 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(3) Credit Risk Management
Credit risks are risks that result in financial losses incurred by the Group when acustomer goes into default for contractual obligations. When full or partial collectionof trade receivables, etc., is considered impossible, or extremely difficult, it isdeemed to be in default.
The Group’s trade receivables are exposed to the credit risk of its customers. In
addition, like other pharmaceutical companies, the Group is exposed to concentrated
credit risk from a small number of wholesale companies through which it sells its
products. In cases where any of these wholesale companies face financial difficulties,
there is a possibility that this may have a severe and disadvantageous influence on
the Group’s financial performance.
The Group’s revenue mainly consists of royalty revenue and sales of products
through a small number of wholesalers, and the total revenue from the top five groupcompanies (including the Company and the group company) accounts for about 70%
of “Revenue” in the consolidated statement of income. Trade receivables from the
top five group companies as of March 31, 2023 and 2024 were ¥86,297 million and¥73,319 million ($485,559 thousand), respectively.
In order to mitigate monetary damage caused by the default of such counterparties,
the Group, in principle, determines credit limits and trade terms and conditions basedon the credit management policy. In addition, in order to minimize the amount of
uncollectable receivables, the Group manages due dates and balances by transaction,and executes continuous credit evaluation by receiving credit updates for its main
counterparties from third party rating agencies. With regard to trade receivables, etc.,that do not contain significant financing components, the allowance is always
measured at an amount equal to the lifetime expected credit losses, regardless ofwhether or not there has been a significant increase in credit risk since initialrecognition, and the Group has never recorded a significant bad debt loss on its tradereceivables in the past.

- 85 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

The Group is also exposed to issuer credit risk for bonds held to make use of surplus
funds and shares held for political purposes. In addition, the Group is exposed tocredit risk of the financial institutions that are the counterparties in derivativetransactions used to mitigate the foreign exchange risk associated with settling
payments in foreign currencies. As the Group operates funds primarily throughsecure debt instruments and executes transactions with highly rated financial
institutions in order to prevent the emergence of credit risk in advance, credit risk islow.
The carrying amounts of financial assets after impairment presented in the
consolidated statement of financial position represent the Group’s maximum
exposure to financial asset credit risk.
At the end of each fiscal year, the Group evaluates whether the credit risk on financial
instruments has increased significantly since the initial recognition, and with respect
to impairment of financial assets measured at amortized cost, the Group recognizes
an allowance for expected credit losses on such financial assets.
The movements in allowance for doubtful accounts are as follows:

Millions of Yen
For the year ended
March 31, 2023
Balance at the beginning of
the year
Increase
Decrease (utilization)
Decrease (other)
Balance at the end of the year

¥

¥

5
0
－
－
5

Millions of Yen
For the year ended
March 31, 2024
¥

¥

5
0
－
(0)
5

Thousands of U.S.
Dollars
For the year ended
March 31, 2024
$

32
0
－
(1)
$ 32

(4) Liquidity Risk Management
The Group is exposed to the liquidity risk of not being able to fulfill its payment
obligations at present or in the future due to an inability to source sufficient cash.
The Group, in particular the Accounting Department, maintains appropriate reserves
and manages liquidity risk through monitoring of the Group’s cash flow forecasts
and results. As the Group has sufficient cash and cash equivalents and other highly
liquid assets and secures stable cash inflows from operating activities, this risk is low.

- 86 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Financial liabilities by maturity are as follows:
March 31, 2023

Trade and other payables
Lease liabilities
Other financial liabilities

Carrying amount¥ 66,794
9,168
662

Millions of Yen
Contractual cashflows
One year or less
¥ 66,794¥ 66,794
9,505
2,580
662
661

More than one
year
¥
－
6,924
0

Carrying amountMillions of Yen
Contractual cashflows
One year or lessMore than one
year

March 31, 2024

Trade and other payables
Lease liabilities
Other financial liabilities

Trade and other payables
Lease liabilities
Other financial liabilities¥ 60,691
8,862
2,273

Carrying amount$ 401,925
58,68915,054¥ 60,691
9,146
2,273

¥ 60,691
2,393
2,273

Thousands of U.S. Dollars
Contractual cashflows
One year or less$ 401,925$ 401,925
60,56915,845
15,054
15,052- 87 -

¥

－
6,753
0

More than one
year$－
44,7252

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(5) Market Risk Management① Foreign Exchange Risk
1) Foreign Exchange Risk Management
The Group engages in business activities internationally and receives royalties
or makes payment of expense in foreign currencies. Therefore, the Group is
exposed to risks such as decrease in revenue, increase in cost price anddevelopment cost, and foreign exchange losses through fluctuations in foreignexchange rates. This risk primarily arises from currencies such as the U.S. dollar,
Euro, and British pound. In order to mitigate this risk, the Group enters into
hedging instruments for a fixed portion of foreign currency-denominatedtransactions through forward foreign exchange contracts in accordance with themarket risk management policy.
2) Details of Forward Foreign Exchange Contracts by Currency
Details of forward foreign exchange contracts by currency are as follows:
March 31, 2023
Contractual
amountFair value(Millions of(Millions
U.S. Dollars)of Yen)March 31, 2024
Contractual
amountFair value(Millions of(Millions
U.S. Dollars)of Yen)March 31, 2024
Fair value(Thousands of
U.S. Dollars)(Sell)
U.S. Dollar- Cash flow hedge
included in the above

$

52
52

¥

(166)
(166)

- 88 -$385¥ (1,588)

385(1,588)$(10,516)(10,516)

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

3) Foreign Exchange Sensitivity Analysis
At the end of each fiscal year, the amount of impact on equity and profit or loss
in the case of the yen depreciating by 10% against the U.S. dollar, Euro, andBritish pound is as follows:
Millions of Yen
March 31, 2023

U.S. Dollar
Euro
British pound

March 31, 2024

Thousands of U.S. Dollars
March 31, 2024

EquityProfit or(loss)

EquityProfit or(loss)

EquityProfit or(loss)

¥ 967
–
183

¥ (639)(23)(8)¥ (3,572)－
236¥ 1,599(72)(11)$ (23,656)–
1,560$10,587(476)(72)

Note: The analysis is based on the assumption that other variable factors remain
constant.
② Price Fluctuation Risk
The Group is exposed to the risk of share price fluctuations that arise from equity
instruments.
These equity instruments are basically held for the purpose of business strategy
and not for short-term trading purposes. In addition, the Group periodicallyreviews the fair value of the instruments and the financial condition of issuers
and the like, and takes into account the relationship with that company andreconsiders the composition of holdings in the Company as necessary.
In case when the share price of equity instruments held by the Group increases
or decreases by 10% at year-end, accumulated other comprehensive income (netof-tax) would increase or decrease by ¥8,308 million and ¥7,923 million($ 52,468 thousand) as of March 31, 2023 and 2024, respectively, as a result ofchanges in fair value of the equity instruments designated as financial assets
measured at FVOCI.

- 89 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(6) Hedge Accounting① Hedging instruments
Details of hedging instruments designated as cash flow hedge are as follows.
The carrying amounts (i.e. fair value) of the assets of hedging instruments areincluded in “Other financial assets,” and the carrying amounts (i.e. fair value) of
the liabilities of hedging instrument are included in “Other financial liabilities.”
For the year ended March 31, 2023
Change in fair value of thehedging instrument used as

Notional

the basis for recognizing

amountCarrying amount (Fair value)(Millionshedge ineffectivenessType of

Risk

Hedgingof U.S.

AssetsLiabilities

hedgeclassification

instrument

Dollars)(Millions of Yen)

(Millions of Yen)

Millions of Yen

Cash
flow
hedge

Foreigncurrencyrisk

Forwardexchange
contract

$ 52

¥–

¥ 166

¥ (460)Note: The average foreign exchange rate in foreign exchange contracts is¥130.34 per U.S. dollar.
For the year ended March 31, 2024
Change in fair value of thehedging instrument used as
the basis for recognizing

Notional
Carrying amount (Fair value)amounthedge ineffectiveness(Millions

AssetsLiabilities

AssetsLiabilities

Thousands

Type of

Risk

Hedgingof U.S.

(Millions(Millions(Thousands of(Thousands ofMillionsof U.S.

hedge

classification

instrument

Dollars)of Yen)of Yen)U.S. Dollars)

U.S. Dollars)of YenDollars

Foreigncurrency risk

Forwardexchange
contract

$ 385

¥–

¥1,588$–$ 10,516¥ (9,251)$ (61,266)

Cash
flow
hedge

Note: The average foreign exchange rate in foreign exchange contracts is¥142.88 per U.S. dollar.

- 90 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
② Hedged items
For the year ended March 31, 2023

Type of hedge

Change in value of thehedged item used as the basis
for recognizing hedge
ineffectivenessMillions of Yen

Balance in cash flow hedge
reserve for continuing hedges
Millions of Yen

¥ 438

¥–

Cash flowhedge

For the year ended March 31, 2024

Type of hedge
Cash flow
hedge

Change in value of thehedged item used as the basis
for recognizing hedge
ineffectivenessThousands
Millions ofof U.S.
Yen
Dollars¥ 8,643$ 57,239

Balance in cash flow hedge
reserve for continuing hedges
Thousands
Millions ofof U.S.
Yen
Dollars¥ 579- 91 -$ 3,834

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
③ Amounts that affected the consolidated statement of comprehensive income inassociation with cash flow hedges
For the year ended March 31, 2023

Type of hedge

Risk
classification

Cash flowhedge

Foreigncurrency risk

Hedging
instrument
Forwardexchange
contract

Gains or losses on hedges
recognized in othercomprehensive income

Amount transferred fromcash flow hedge reserve to
profit (loss)

Millions of Yen

Millions of Yen¥ (438)¥ (438)

Gains or losses on hedges
recognized in othercomprehensive income
Thousands
Millions ofof U.S.
Yen
Dollars

Amount transferred fromcash flow hedge reserve to
profit (loss)
Thousands
Millions ofof U.S.
Yen
Dollars¥ (9,222)¥ (8,643)

Line item in
profit or loss
affected by
the transfer
Revenue,etc.

For the year ended March 31, 2024

Type of hedge

Risk
classification

Cash flowhedge

Foreigncurrency risk

Hedging
instrument
Forwardexchange
contract$ (61,073)$ (57,239)

Note: The figures represent amounts before tax effect adjustments.
The hedge ineffectiveness is immaterial. Also, there is no cash flow hedge
reserve arising from hedging relationships for which hedge accounting is nolonger applied.

- 92 -

Line item in
profit or loss
affected by
the transfer
Revenue,etc.

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(7) Fair Value of Financial Instruments① Fair Value Measurements
The methods and assumptions used in measuring the fair values of financial assets andfinancial liabilities are as follows:
Cash and cash equivalents, and trade and other payables
Since these items are settled in a short period of time, the carrying amounts of these
items approximate their fair values.
Trade and other receivables
The fair value of receivables which are settled in a short period of time approximatesthe carrying amounts. For receivables which are settled in a long period of time, thefair value is calculated by discounting future cash flows using an interest rate thattakes into account the period to maturity and credit risk for each receivable segmented
by a certain period of time.
Marketable securities and investment securities
The fair values of marketable securities and investment securities are measured using
quoted market prices. The fair values of unlisted shares are measured through rational
methods, such as the adjusted net assets method and others.
Other financial assets and other financial liabilities
・Insurance reserve fund
The fair value of the insurance reserve fund is measured based on the surrender value
because there are no significant contractual restrictions associated with a refund.
・Forward foreign exchange contracts
The fair values of forward foreign exchange contracts are measured based on quoted
market prices for forward foreign exchange contracts under the same terms andconditions as of the closing date.

- 93 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
・Time deposits
The fair values of time deposits are based on discounted future cash flows using aninterest rate assumed to be applied if similar contracts were to be newly carried out.
・Others
Since other items are settled in a short period of time, the carrying amounts of these
items approximate their fair values.
② Fair Value and Carrying AmountThe carrying amounts and fair values of financial assets and liabilities held by theGroup by account are as follows. The following table does not include financial assets
and liabilities whose carrying amounts and fair values are equivalent.
Millions of Yen
March 31, 2023
March 31, 2024
Carrying
Carrying
amountFair value
amountFair value(Financial assets)
Financial assets measured atamortized cost
- Trade and other receivables- Marketable securities andinvestment securities- Other financial assets

Thousands of U.S. Dollars
March 31, 2024
Carrying
amountFair value¥114,396¥114,396¥ 136,066¥136,008$ 901,101$ 900,716

180
258,134180
258,069220
203,454219
202,768

1,456
1,347,375

1,451
1,342,832③ Fair Value Hierarchy
IFRS 13 Fair Value Measurement requires an entity to categorise the fair valueof financial instruments into Level 1 through Level 3 of the fair value hierarchy
based on the observability of the inputs used in the fair value measurements offinancial instruments.
The fair value hierarchy is as follows:
Level 1: Inputs are unadjusted quoted prices in active markets for identicalassets or liabilities that are available at the measurement date.
Level 2: Inputs are inputs other than quoted market prices included within Level
1 that are observable for assets or liabilities, either directly or indirectly.
Level 3: Inputs are unobservable inputs for assets or liabilities.
- 94 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

1) Financial Assets and Financial Liabilities Measured at Fair Value
The fair values of financial assets and financial liabilities measured at fairvalue in the consolidated statement of financial position, grouped by fairvalue hierarchy are as follows:
Millions of Yen
March 31, 2023
Level 1(Financial assets)
Financial assets measured at
FVPL- Marketable securities andinvestment securities- Other financial assets
Financial assets measured at
FVOCI- Investment securities
Total(Financial liabilities)
Financial liabilities measured at
FVPL- Other financial liabilities
Total

¥

－
－

Level 2

Level 3－－

¥ 3,441
7,441

¥

Total

¥

3,441
7,441

115,958¥ 115,958

¥

－
－

3,750
¥ 14,631¥

119,707
130,589

－
－

¥
¥

166
166

¥
¥

－
－

¥
¥

166
166

¥
¥

Millions of Yen
March 31, 2024
Level 1(Financial assets)
Financial assets measured at
FVPL- Marketable securities andinvestment securities- Other financial assets
Financial assets measured at
FVOCI- Investment securities
Total(Financial liabilities)
Financial liabilities measured at
FVPL- Other financial liabilities
Total

¥

－
－

Level 2

Level 3－－

¥ 6,767
8,113¥

114,160¥ 129,039¥

109,687¥ 109,687

¥

－
－

4,473
¥ 19,353

－
－

¥
¥

1,588
1,588

¥
¥

¥
¥

- 95 -

－
－

Total

¥
¥

6,767
8,113

1,588
1,588

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Thousands of U.S. Dollars
March 31, 2024
Level 2
Level 3

Level 1(Financial assets)
Financial assets measured at
FVPL- Marketable securities andinvestment securities- Other financial assets
Financial assets measured at
FVOCI- Investment securities
Total(Financial liabilities)
Financial liabilities measured at
FVPL- Other financial liabilities
Total

–
–

$

–
–

$

$

44,81553,726

Total$

44,81553,726$

726,402726,402$––$

29,623
128,164$

756,026
854,566

$
$

–
–

$
$

10,516
10,516

$
$

–
–

$
$

10,516
10,516

Note: For the years ended March 31, 2023 and 2024, the Group has nottransferred any financial assets or liabilities between Levels 1, 2, and 3.
2) Financial Assets and Financial Liabilities Measured at Amortized Cost
The fair values of financial assets and financial liabilities measured atamortized cost in the consolidated statement of financial position, groupedby fair value hierarchy are as follows:
Millions of Yen
March 31, 2023
Level 1(Financial assets)
Financial assets measured atamortized cost
- Trade and other receivables- Marketable securities andinvestment securities- Other financial assets
Total

Level 2

¥

－

¥

¥

－
－
－

180
258,069¥ 372,644

114,396

Level 3

Total

¥

－

¥ 114,396

¥

－
－
－

180
258,069¥ 372,644

Level 3

Total

¥

－

¥ 136,008

¥

－
－
－

219
202,768¥ 338,995

Millions of Yen
March 31, 2024
Level 1(Financial assets)
Financial assets measured atamortized cost
- Trade and other receivable- Marketable securities andinvestment securities- Other financial assets
Total

Level 2

¥

－

¥

¥

－
－
－

219
202,768¥ 338,995- 96 -

136,008

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Thousands of U.S. Dollars
March 31, 2024
Level 2
Level 3

Level 1(Financial assets)
Financial assets measured atamortized cost
- Trade and other receivable- Marketable securities andinvestment securities- Other financial assets
Total

Total

$ –

$

900,716

$ –

$

–
–
$ –

1,451
1,342,832$ 2,244,999

–
–
$ –

1,451
1,342,832$ 2,244,999

900,716

Note: For the years ended March 31, 2023 and 2024, the Group has not transferred any
financial assets or liabilities between Levels 1, 2, and 3.

- 97 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

3) Reconciliation of Financial Instruments Measured Using Level 3 Inputs on
a Recurring Basis
Movements of the financial assets measured using Level 3 inputs on arecurring basis from the beginning of the year to the end of the year are as
follows:
Thousands of
U.S. Dollars

Millions of Yen
For the year ended
March 31, 2023

For the year ended
March 31, 2024
¥ 14,631
794
24
769
4,505
(2)
(575)

$ 96,896
5,255
160
5,095
29,836

Settlement¥ 12,041
157
(21)
178
2,972
－
(539)

Balance at the end of the year

¥ 14,631¥ 19,353$128,164

Balance at the beginning of the year
Total gains or losses
Profit (loss)
Other comprehensive income
Purchase
Sale

For the year ended
March 31, 2024

(13)

(3,810)Notes: 1. Profit or loss included in total gains or losses is related to financial
assets measured at FVPL. These gains and losses are included in“Finance income” and “Finance costs,” respectively.
2. Other comprehensive income included in total gains or losses isrelated to financial assets measured at FVOCI. These gains andlosses are included in “Net gain (loss) on financial assets
measured at FVOCI” and “Exchange differences on translation offoreign operations”.
3. There are no applicable financial liabilities measured using Level
3 on a recurring basis.

- 98 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
33. Share-based Payments
The Company has introduced Restricted Stock-based Remuneration Systems as incentive
plans for the Eligible Board of Directors, etc.
(1) Restricted Stock-based Remuneration System① Overview of the system
The remuneration system consists of “Tenure-based Restricted Stock-based
Remuneration”, in which the number of shares to be granted is calculated inproportion to the degree of responsibility for decision-making, and “Performancelinked Restricted Stock-based Remuneration”, in which the number of shares to be
granted is calculated in proportion to the degree of achievement of performancetarget figures (including ESG target figures), which are linked to medium-term
management strategies and management challenges, and the degree of achievementof performance indicators for each fiscal year.
② Number of shares granted during the fiscal year and fair value

Number of shares granted
Tenure-based (shares)
Performance-linked (shares)
Transitional measures (shares)
Fair value

For the year ended
March 31, 2023

For the year ended
March 31, 2024

15,00015,300－30,90075,000－¥ 3,234¥ 2,767

For the year ended
March 31, 2024

Notes: 1. The fair value is calculated on the basis of the closing price of the Company’s
ordinary share on the Tokyo Stock Exchange on the business day immediately
preceding the date of a resolution of the Board of Director’s meeting of theCompany.
2. For the year ended March 31 2023, the Company revised its compensation
system for Eligible Board of Directors, abolishing the previous share option
plan for share-based compensation and introducing this new plan. As atransitional measure, restricted share (75,000 shares) was issued to Eligible
Board of Directors in exchange for the renunciation of all unexercised shareoptions allocated to them (equivalent to 75,000 shares).

- 99 -$ 18

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
(2) Expenses related to share-based payments
Expenses related to share-based payments included in “selling, general, andadministrative expenses” in consolidated statement of income are as follows:

Share options
Restricted stock-based
remuneration system

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥ 10
¥
－

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$ －Equity-settled

132

44

291

Cash-settled

87

101

667

Note: Carring amount of liabilities arising from share-based transactions was ¥87 millionand ¥72 million ($474 thousand) for the fiscal year ended March 31, 2023 and 2024,
respectively.
34.

Non-cash Transactions

Non-cash transactions (investments and financial transactions that do not involve the useof cash and cash equivalents) are as follows:

Additions to right-of-use assets

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
¥
3,343
¥
2,282

- 100 -

Thousands of
U.S. Dollars
For the year ended
March 31, 2024
$ 15,113

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

35.

Related Parties(1) Subsidiaries and Associates
Details of the Group’s subsidiaries and affiliates are as follows:(Consolidated subsidiaries)
Proportion of voting rights held by the Group

Name

Primary business

ONO PHARMA USA, INC. (Note 2)

Pharmaceuticalbusiness

ONO PHARMA UK Ltd.
ONO PHARMA KOREA CO., LTD.
ONO PHARMA TAIWAN CO., LTD.
TOYO Pharmaceutical Co., Ltd.
(Note 3)
BEE BRAND MEDICODENTAL.CO., LTD.
Ono Venture Investment, Inc.
Ono Venture Investment Fund I, L.P.
(Note 2)
Ono Pharma Healthcare Co., Ltd.
Ono Digital health Investment, GK.
Ono Pharma UD Co., Ltd.
michiteku Co., Ltd.
OPhrs Co., Ltd.

Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness
Pharmaceuticalbusiness

March 31, 2023

March 31, 2024

(%)

(%)

100.0

100.0

100.0

100.0

Seoul, South Korea

100.0

100.0

Taipei, Taiwan

100.0

100.0

Chuo-ku, Osaka City

45.5

45.5

80.0 (40.0)

80.0

100.0

100.0

100.0 (1.0)

100.0(1.0)

Chuo-ku, Osaka City

100.0

100.0

Chuo-ku, Tokyo

100.0

100.0

Chuo-ku, Osaka

100.0

100.0

Chuo-ku, Tokyo

100.0

100.0

Chuo-ku, Osaka

–

100.0

Location
Massachusetts, theUnited States ofAmerica
London, United
Kingdom

Higashiyodogawa-ku,
Osaka City
California, the UnitedStates of America
California, the UnitedStates of America

Other 1

(Associates accounted for using equity method)
Proportion of voting rights held by the Group
March 31, 2023

March 31, 2024

Name

Primary business

Location(%)(%)

NAMICOS CORPORATION

Pharmaceuticalbusiness

Chuo-ku, Osaka City

18.8

18.8

- 101 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

Notes: 1. A name in the segment information is written in the primary business column.
2. ONO PHARMA USA, INC. and Ono Venture Investment Fund I, L.P. areapplicable to a specified subsidiary.
3. The Company holds less than 50% of equity in TOYO Pharmaceutical Co., Ltd.,but treats it as a subsidiary because the Company substantially controls it.
4. The percentage of voting rights in parentheses represents the percentage held
indirectly, which is inclusive of the proportion of voting rights held.
5. All of the subsidiaries and associates do not file securities registration
statements or annual securities reports.
6. Each related party’s revenue, excluding internal revenue in the Group, is lessthan 10% of the consolidated revenue.
(2) Transactions with Related Parties
There were no significant transactions and balances of receivables and payables
between the Group and its related parties.
(3) Remuneration of Key Management Personnel
The remuneration of the Group’s key management personnel is as follows:

Millions of Yen
For the year ended
For the year ended
March 31, 2023
March 31, 2024
Base
remuneration
Bonuses
Share options
Restricted stock
remuneration
Total

Thousands of
U.S. Dollars
For the year ended
March 31, 2024

¥ 274
134
10

¥ 257
125
－

$ 1,705
828
－

178
¥ 595

102
¥ 485

677
$ 3,211

Note: Remuneration of key management personnel comprises the remuneration forinternal directors and external directors.

- 102 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024
36. Commitments for Expenditure
Payment commitments after the end of each fiscal year are as follows:
Thousands of
U.S. Dollars

Millions of Yen

Property, plant, andequipment
Intangible assets
Total

March 31, 2023

March 31, 2024

March 31, 2024

¥ 467

¥ 491

$ 3,253

–

–

¥ 467

¥ 491

–

$

3,253

In addition to these payment commitments above, the Group has milestone payments
relating to the success of development projects and achievement of specific sales targets.
Milestone payments that the Group may potentially pay within three years are ¥13,584
million and ¥8,349 million ($55,290 thousand) as of March 31, 2023 and 2024,
respectively.
These milestone payment amounts are undiscounted and include all such potential
payments assuming all projects currently in development are successful and specific sales
targets are achievable.

37.

Approval of Consolidated Financial Statements

The consolidated financial statements for the year ended March 31, 2024, wereapproved by Toichi Takino, President, Representative Director, and Chief Operating
Officer, on August 1, 2024.

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Notes to Consolidated Financial Statements
Year Ended March 31, 2024
38.

Significant Subsequent Events<Definitive agreement to acquire Deciphera Pharmaceutical, Inc. >On April, 2024, the Company and Deciphera Pharmaceuticals, Inc. (“Deciphera”)
entered into a definitive merger agreement through a tender offer followed by amerger of a wholly owned subsidiary of the Company with Deciphera, with
Deciphera surviving as a wholly owned subsidiary of the Company (the“Acquisition”). The Acquisition was completed under the agreement on June 11,2024 (New York City Time), making Deciphera a wholly owned subsidiary of theCompany.

(1) Overview of the acquired company
Company

Deciphera Pharmaceuticals, Inc.

Business description

R&D and commercialization ofpharmaceuticals

Deciphera’s consolidated operating results and consolidated financial position(US-GAAP)
For the year ended December 2023
(Thousand of U.S. dollars)
Consolidated total equity

350,916

Consolidated total assets

473,566

Consolidated revenue

163,356

Consolidated operating loss

(210,958)

Net loss for the year attributable toowners of the company(194,942)(2) Acquisition dateJune 11, 2024 (New York City Time)(3) Percentage of voting equity interest acquired
100%(4) Process of obtaining control of the acquired company
Acquisition of outstanding shares (Approximately $2.4 billion in cash)(5) Main objectives of the Acquisition
The Company, as a global specialty pharma company, is committed to delivering
innovative new drugs to patients around the world. As a part of our medium-term- 104 -

Notes to Consolidated Financial Statements
Year Ended March 31, 2024

management plan, the Company aims to reinforce our pipeline and accelerate
global development, as well as realize direct sales in the United States and Europe.
In addition, the Company has designated oncology, immunological diseases, central
nervous system diseases, and specialty areas with high medical needs as priority
research areas, and we accumulate disease know-how in each area to create new
drugs that will bring innovation to medicine on-site. Through this Acquisition, theCompany is pleased to welcome Deciphera as a partner with commercial
capabilities in the United States and Europe and excellent research anddevelopment capabilities in the field of cancer. This combination will further
enhance the Group’s pipeline and accelerate its globalization.
Deciphera focuses on the discovery, development, and commercialization of
innovative medicines for cancer and has deep expertise in kinase biology.
QINLOCK® (ripretinib), a KIT inhibitor, is approved in over 40 countries andmarketed globally, including in the US, Europe, and China, for the treatment offourth-line gastrointestinal stromal tumor (GIST). Vimseltinib, a CSF-1R inhibitor,
demonstrated statistically significant and clinically meaningful efficacy across all
primary and secondary endpoints in the Phase III MOTION trial in patients withtenosynovial giant cell tumor (TGCT). Data from the MOTION trial will be used tosupport marketing applications in the US and EU in 2024. Deciphera hasestablished highly successful commercial operations in the United States and key
European countries, which could be immediately leveraged for vimseltinib, if
approved.
With this Acquisition, the Group will expand its oncology pipeline with near-term
revenue growth, notably through the immediate addition of QINLOCK® andpotential addition of vimseltinib. Moreover, acquiring Deciphera’s commercial
capabilities in the United States and Europe will strengthen the Group’s global
commercial presence. By leveraging Deciphera’s drug discovery capabilities, theGroup will further accelerate its research and development capabilities in the fieldof oncology.

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Notes to Consolidated Financial Statements
Year Ended March 31, 2024

(6) Process of financing and payment
This acquisition was funded by borrowings from financial institutions in addition to
the Company’s own funds.
Summary of the loan as of the date of submmition is as follows:
Millions of Yen

Short-term loan
Total

March 31, 2024
¥ －¥ －August 1, 2024
¥ 150,000¥ 150,000

Thousands of
U.S. Dollars
August 1, 2024
$ 993,377$ 993,377

Due to the timing of the acquisition, the initial accounting for the businesscombination was not completed by the date of approval of the consolidated financial
statements. Therefore, the fair value of the assets and liabilities acquired and otherdisclosures are not disclosed.

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