---

Burcon NutraScience Corporation

Consolidated Financial Statements March 31, 2016, 2015
and 2014(Prepared in Canadian dollars)

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June 27, 2016



Independent Auditor’s Report

To the Shareholders ofBurcon NutraScience  Corporation



We have audited  the accompanying consolidated financial statements of Burcon NutraScience  Corporation and its subsidiary, which comprise the consolidated balance sheets  as at March 31, 2016 and March 31, 2015 and the consolidated statements of  operations and comprehensive loss, changes in shareholders’ equity, and cash  flows for each of the three years in the period ended March 31, 2016, and the  related notes, which comprise a summary of significant accounting policies and  other explanatory information.

Management’s responsibility for the consolidated financial statements
  Management is responsible for the  preparation and fair presentation of these consolidated financial statements in  accordance with International  Financial Reporting Standards as issued by the International Accounting  Standards Board and for such internal control as management  determines is necessary to enable the preparation of consolidated financial  statements that are free from material misstatement, whether due to fraud or  error.

Auditor’s responsibility
  Our  responsibility is to express an opinion on these consolidated financial  statements based on our audits. We conducted our audits in accordance with  Canadian generally accepted auditing standards and the standards of the Public  Company Accounting Oversight Board (United States). Those standards require that  we plan and perform the audit to obtain reasonable assurance about whether the  consolidated financial statements are free from material misstatement. Canadian  generally accepted auditing standards also require that we comply with ethical  requirements.

An  audit involves performing procedures to obtain audit evidence, on a test basis, about  the amounts and disclosures in the consolidated financial statements. The  procedures selected depend on the auditor’s judgment, including the assessment  of the risks of material misstatement of the consolidated financial statements,  whether due to fraud or error. We were not engaged to perform an audit of the  company’s internal control over financial reporting. Our audits included  consideration of internal control over financial reporting as a basis for  designing audit procedures that are appropriate in the circumstances, but not  for the purpose of expressing an opinion on the effectiveness of the company’s  internal control over financial reporting. Accordingly, we express no such  opinion. An audit also includes evaluating the appropriateness of accounting  principles and policies used and the reasonableness of accounting estimates  made by management, as well as evaluating the overall presentation of the  consolidated financial statements.

We  believe that the audit evidence we have obtained in our audits is sufficient  and appropriate to provide a basis for our audit opinion.

| |                                                                                                       
| | ------------------------------------------------------------------------------------------------------
| | PricewaterhouseCoopers LLP                                                                            
| | PricewaterhouseCoopers Place, 250 Howe Street,  Suite 700, Vancouver, British Columbia, Canada V6C 3S7
| | T: +1 604 806 7000, F: +1  604 806 7806, www.pwc.com/ca                                               
| |                                                                                                       
| | “PwC” refers to PricewaterhouseCoopers  LLP, an Ontario limited liability partnership.                

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Opinion
  In our opinion,  the consolidated financial statements present fairly, in all material respects,  the financial position of Burcon NutraScience Corporation and its subsidiary as  at March 31, 2016 and March 31, 2015 and their financial performance and their  cash flows for each of the three years in the period ended March 31, 2016 in  accordance with International  Financial Reporting Standards as issued by the International Accounting  Standards Board.

Emphasis of matter
  Without  qualifying our opinion, we draw attention to note 1 in the consolidated  financial statements which discloses matters and conditions that indicate the  existence of a material uncertainty that casts substantial doubt about Burcon  NutraScience Corporation’s ability to continue as a going concern.



(signed)  “PricewaterhouseCoopers LLP”

Chartered Professional Accountants

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BURCON NUTRASCIENCE CORPORATIONCONSOLIDATED BALANCE
SHEETS As at March 31, 2016 and 2015

|(Prepared in Canadian dollars)                     |  |             |   |  |             |  
|-------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                   |  | 2016        |   |  | 2015        |  
|                                                   |  | **$**       |   |  | **$**       |  
|ASSETS                                             |  |             |   |  |             |  
|Current assets                                     |  |             |   |  |             |  
|Cash and cash equivalents                          |  | 2,479,862   |   |  | 2,400,965   |  
|Short-term investments                             |  | -           |   |  | 1,266,600   |  
|Amounts receivable (notes 10 and 12)               |  | 152,143     |   |  | 145,524     |  
|Prepaid expenses                                   |  | 171,209     |   |  | 148,429     |  
|Derivative
      asset (note 6)                    |  | -           |   |  | 70,152      |  
|                                                   |  | 2,803,214   |   |  | 4,031,670   |  
|Property and equipment
      (note 4)              |  | 514,203     |   |  | 564,185     |  
|Deferred financing costs (note 15)                 |  | 58,376      |   |  | 93,518      |  
|Deferred development
      costs (note 5)          |  | 222,343     |   |  | 755,967     |  
|Goodwill                                           |  | 1,254,930   |   |  | 1,254,930   |  
|                                                   |  |             |   |  |             |  
|                                                   |  | 4,853,066   |   |  | 6,700,270   |  
|                                                   |  |             |   |  |             |  
|LIABILITIES                                        |  |             |   |  |             |  
|Current liabilities                                |  |             |   |  |             |  
|Accounts payable and accrued liabilities (note 10) |  | 701,748     |   |  | 705,302     |  
|Derivative
      liability (note 6)                |  | -           |   |  | 70,152      |  
|                                                   |  | 701,748     |   |  | 775,454     |  
|Deferred revenue                                   |  | 39,097      |   |  | 132,930     |  
|                                                   |  | 740,845     |   |  | 908,384     |  
|                                                   |  |             |   |  |             |  
|SHAREHOLDERS' EQUITY (NOTE 6)                      |  |             |   |  |             |  
|                                                   |  |             |   |  |             |  
|Capital stock                                      |  | 64,936,947  |   |  | 60,964,605  |  
|Contributed surplus                                |  | 6,487,975   |   |  | 6,259,626   |  
|Options                                            |  | 9,779,276   |   |  | 9,190,098   |  
|Warrants                                           |  | 458,187     |   |  | 357,945     |  
|Deficit                                            |  | (77,550,164 | ) |  | (70,980,388 | )
|                                                   |  | 4,112,221   |   |  | 5,791,886   |  
|                                                   |  |             |   |  |             |  
|                                                   |  | 4,853,066   |   |  | 6,700,270   |  

Going concern (note 1) Subsequent events (note 15)

Approved by the Board of Directors on June 15, 2016

|(signed) "Douglas
      Gilpin" |  | (signed) Peter H. Kappel
|------------------------------- |  | ------------------------
|Director                        |  | Director                

The accompanying notes are an integral part of these
consolidated financial statements.

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BURCON NUTRASCIENCE CORPORATIONCONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSFor the years ended March
31, 2016, 2015 and 2014

|(Prepared in Canadian dollars)                    |  |            |   |  |            |   |  |            |  
|------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                  |  | 2016       |   |  | 2015       |   |  | 2014       |  
|                                                  |  | **$**      |   |  | **$**      |   |  | **$**      |  
|                                                  |  |            |   |  |            |   |  |            |  
|REVENUE                                           |  |            |   |  |            |   |  |            |  
|Royalty income (note 2(a))                        |  | 106,390    |   |  | 105,387    |   |  | 94,724     |  
|                                                  |  |            |   |  |            |   |  |            |  
|EXPENSES                                          |  |            |   |  |            |   |  |            |  
|General and
      administrative (notes 7 and 10) |  | 4,237,968  |   |  | 4,458,694  |   |  | 3,954,026  |  
|Research and development (note 8)                 |  | 2,653,585  |   |  | 2,535,761  |   |  | 2,393,649  |  
|                                                  |  | 6,891,553  |   |  | 6,994,455  |   |  | 6,347,675  |  
|                                                  |  |            |   |  |            |   |  |            |  
|LOSS FROM OPERATIONS                              |  | (6,785,163 | ) |  | (6,889,068 | ) |  | (6,252,951 | )
|                                                  |  |            |   |  |            |   |  |            |  
|FOREIGN EXCHANGE GAIN                             |  | 62,230     |   |  | 118,642    |   |  | -          |  
|                                                  |  |            |   |  |            |   |  |            |  
|INTEREST AND OTHER INCOME (notes 10 and 12)       |  | 153,157    |   |  | 191,002    |   |  | 291,406    |  
|                                                  |  |            |   |  |            |   |  |            |  
|LOSS AND COMPREHENSIVE LOSS FOR THE YEAR          |  | (6,569,776 | ) |  | (6,579,424 | ) |  | (5,961,545 | )
|                                                  |  |            |   |  |            |   |  |            |  
|BASIC AND DILUTED LOSS PER SHARE (note 9)         |  | (0.18      | ) |  | (0.20      | ) |  | (0.19      | )

The accompanying notes are an integral part of these
consolidated financial statements.

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BURCON NUTRASCIENCE CORPORATIONCONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYFor the years ended March
31, 2016, 2015 and 2014

(Prepared in Canadian dollars)Number offully paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Totalcommon
    
    
    Capital
    
    
    **Contributed**
    
    
    
    
    
    
    
    
    
    
    
    shareholders'shares
    
    
    stock
    
    
    surplus
    
    
    Options
    
    
    **Warrants**
    
    
    Deficit
    
    
    equity**$**
    
    
    **$**
    
    
    **$**
    
    
    **$**
    
    
    **$**
    
    
    **$**Balance, March 31,
      2013
    
    31,624,693
    
    
    54,005,703
    
    
    5,065,951
    
    
    9,064,232
    
    
    49,453
    
    
    (58,439,419
    )
    
    9,745,920Loss and comprehensive loss
      for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (5,961,545
    )
    
    (5,961,545
    )Options expired / cancelled
    
    -
    
    
    -
    
    
    1,070,172
    
    
    (1,070,172
    )
    
    -
    
    
    -
    
    
    -Stock-based compensation
    
    -
    
    
    -
    
    
    -
    
    
    538,640
    
    
    -
    
    
    -
    
    
    538,640Balance, March 31,
      2014
    
    31,624,693
    
    
    54,005,703
    
    
    6,136,123
    
    
    8,532,700
    
    
    49,453
    
    
    (64,400,964
    )
    
    4,323,015Loss and comprehensive loss
      for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (6,579,424
    )
    
    (6,579,424
    )Rights offering
    
    1,860,276
    
    
    5,245,978
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    5,245,978Private placement
    
    660,000
    
    
    1,970,185
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    1,970,185Share issue costs
    
    -
    
    
    (257,261
    )
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (257,261
    )Warrants issued
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    357,945
    
    
    -
    
    
    357,945Options expired / cancelled
    
    -
    
    
    -
    
    
    74,050
    
    
    (74,050
    )
    
    -
    
    
    -
    
    
    -Warrants expired
    
    -
    
    
    -
    
    
    49,453
    
    
    -
    
    
    (49,453
    )
    
    -
    
    
    -Stock-based compensation
    
    -
    
    
    -
    
    
    -
    
    
    731,448
    
    
    -
    
    
    -
    
    
    731,448Balance, March 31, 2015
    
    34,144,969
    
    
    60,964,605
    
    
    6,259,626
    
    
    9,190,098
    
    
    357,945
    
    
    (70,980,388
    )
    
    5,791,886Loss and comprehensive loss for the year
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (6,569,776
    )
    
    (6,569,776
    )Rights offering
    
    1,552,044
    
    
    3,507,620
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    3,507,620Share issue costs
    
    -
    
    
    (154,095
    )
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (154,095
    )Options exercised
    
    15,108
    
    
    96,775
    
    
    -
    
    
    (96,775
    )
    
    -
    
    
    -
    
    
    -Options expired / cancelled
    
    -
    
    
    -
    
    
    228,349
    
    
    (228,349
    )
    
    -
    
    
    -
    
    
    -Warrants issued
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    279,817
    
    
    -
    
    
    279,817Warrant adjustment
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    7,118
    
    
    -
    
    
    7,118Warrants exercised
    
    120,629
    
    
    522,042
    
    
    -
    
    
    -
    
    
    (186,693
    )
    
    -
    
    
    335,349Stock-based compensation
    
    -
    
    
    -
    
    
    -
    
    
    914,302
    
    
    -
    
    
    -
    
    
    914,302Balance, March 31, 2016
    
    35,832,750
    
    
    64,936,947
    
    
    6,487,975
    
    
    9,779,276
    
    
    458,187
    
    
    (77,550,164
    )
    
    4,112,221


The accompanying notes are an integral part of these
consolidated financial statements.

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BURCON NUTRASCIENCE CORPORATIONCONSOLIDATED
STATEMENTS OF CASH FLOWSFor the years ended March 31, 2016, 2015 and
2014

|(Prepared in Canadian dollars)                                  |  |            |   |  |            |   |  |            |  
|--------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                                |  | 2016       |   |  | 2015       |   |  | 2014       |  
|                                                                |  | **$**      |   |  | **$**      |   |  | **$**      |  
|CASH FLOWS FROM OPERATING
      ACTIVITIES                      |  |            |   |  |            |   |  |            |  
|Loss for the year                                               |  | (6,569,776 | ) |  | (6,579,424 | ) |  | (5,961,545 | )
|Items not affecting cash                                        |  |            |   |  |            |   |  |            |  
|Amortization of deferred
      development costs                |  | 533,624    |   |  | 533,625    |   |  | 533,625    |  
|Amortization of
      property and equipment                    |  | 126,348    |   |  | 150,329    |   |  | 150,570    |  
|Amortization of deferred revenue                                |  | (93,833    | ) |  | (93,833    | ) |  | (93,833    | )
|Unrealized
      foreign exchange gain                          |  | (44,238    | ) |  | (118,642   | ) |  | -          |  
|Warrants issued for financing                                   |  | 286,935    |   |  | 357,945    |   |  | -          |  
|Loss on disposal
      of property and equipment                |  | 863        |   |  | -          |   |  | -          |  
|Stock-based compensation expense                                |  | 914,302    |   |  | 731,448    |   |  | 538,640    |  
|                                                                |  | (4,845,775 | ) |  | (5,018,552 | ) |  | (4,832,543 | )
|Changes in non-cash working capital items                       |  |            |   |  |            |   |  |            |  
|Amounts
      receivable                                        |  | (6,619     | ) |  | (4,583     | ) |  | (106,417   | )
|Prepaid expenses                                                |  | (22,780    | ) |  | 16,961     |   |  | (11,847    | )
|Accounts payable and accrued liabilities                        |  | (8,401     | ) |  | 186,431    |   |  | (1,414     | )
|                                                                |  | (4,883,575 | ) |  | (4,819,743 | ) |  | (4,952,221 | )
|                                                                |  |            |   |  |            |   |  |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                            |  |            |   |  |            |   |  |            |  
|Decrease (increase) in
      short-term investments             |  | 1,371,200  |   |  | (1,257,600 | ) |  | 2,085,746  |  
|Acquisition of property and equipment                           |  | (59,825    | ) |  | (48,932    | ) |  | (254,765   | )
|                                                                |  | 1,311,375  |   |  | (1,306,532 | ) |  | 1,830,981  |  
|                                                                |  |            |   |  |            |   |  |            |  
|CASH FLOWS FROM FINANCING
      ACTIVITIES                      |  |            |   |  |            |   |  |            |  
|Deferred financing costs                                        |  | -          |   |  | (24,640    | ) |  | (88,813    | )
|Issue of capital stock                                          |  | 3,842,969  |   |  | 7,216,163  |   |  | -          |  
|Share issue costs                                               |  | (131,510   | ) |  | (166,391   | ) |  | -          |  
|                                                                |  | 3,711,459  |   |  | 7,025,132  |   |  | (88,813    | )
|FOREIGN EXCHANGE (LOSS) GAIN ON CASH AND CASH
      EQUIVALENTS |  | (60,362    | ) |  | 109,641    |   |  | -          |  
|                                                                |  |            |   |  |            |   |  |            |  
|INCREASE (DECREASE) IN CASH AND CASH
      EQUIVALENTS          |  | 78,897     |   |  | 1,008,498  |   |  | (3,210,053 | )
|                                                                |  |            |   |  |            |   |  |            |  
|CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                   |  | 2,400,965  |   |  | 1,392,467  |   |  | 4,602,520  |  
|                                                                |  |            |   |  |            |   |  |            |  
|CASH AND CASH EQUIVALENTS - END OF YEAR                         |  | 2,479,862  |   |  | 2,400,965  |   |  | 1,392,467  |  
|                                                                |  |            |   |  |            |   |  |            |  
|INTEREST RECEIVED                                               |  | 25,723     |   |  | 50,981     |   |  | 49,700     |  

The accompanying notes are an integral part of these
consolidated financial statements.

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Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

|1. | Going concern
|-- | -------------

Burcon NutraScience Corporation
(Burcon or the Company) is incorporated in the Yukon Territory, Canada and
its common shares are listed and publicly traded on the Toronto Stock Exchange
and the NASDAQ Stock Exchange. The registered address of Burcon is Suite 200,
Financial Plaza, 204 Lambert Street, Whitehorse, Yukon and the address of its
principal office is 1946 West Broadway, Vancouver, British Columbia.

These consolidated financial statements
have been prepared on a going concern basis, which assumes that the Company will
be able to continue its operations for the foreseeable future and will be able
to realize its assets and discharge its liabilities in the normal course of
business.

As at March 31, 2016, the Company had
minimal revenues from its technology, had an accumulated deficit of $77,550,164
(2015 - $70,980,388). During the year ended March 31, 2016, the Company incurred
a loss of $6,569,776 (2015 - $6,579,424; 2014 - $5,961,545) and had negative
cash flow from operations of $4,883,575 (2015 - $4,819,743; 2014 - $4,952,221).
The Company has relied on equity financings, private placements, rights
offerings and other equity transactions to provide the financing necessary to
undertake its research and development activities. As at March 31, 2016, the
Company had cash and cash equivalents of $2,479,862 (2015 - $2,400,965) and
short-term investments of $nil (2015 - $1,266,600). These conditions indicate
existence of a material uncertainty that casts substantial doubt about the
ability of the Company to meet its obligations as they become due and,
accordingly, its ability to continue as a going concern.

The Companys ability to continue as a
going concern is dependent upon the Company raising additional capital. On May
12, 2016, the Company completed a convertible note financing for $2,000,000,
with net proceeds of approximately $1,934,000 (note 15). Although the Company
expects to receive royalty revenues from its license and production agreement
(Soy Agreement) with Archer Daniels Midland Company (ADM) from the sales of
CLARISOY, the amount of royalty revenues cannot be ascertained at this time.
Burcon expects the amount of royalty revenues from the sales of CLARISOY will
not reach its full potential until such time production is expanded to one or
more full-scale commercial facilities.

These consolidated financial statements
do not reflect the adjustments to the carrying values of assets and liabilities,
the reported revenues and expenses, and the balance sheet classifications that
would be necessary if the Company were unable to realize its assets and settle
its liabilities as a going concern in the normal course of operations. Such
adjustments could be material.

1

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Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

|2. | Nature of operations
|-- | --------------------

Burcon and its subsidiary are research
and development companies that are developing plant protein extraction and
purification technology in the field of functional, renewable plant proteins.
The Company and its subsidiary have developed CLARISOY, a soy protein; and are
developing Peazazz®, a pea protein, and Puratein®,
Supertein® and Nutratein®, three canola protein isolates.

| | a) | CLARISOY
| | -- | ---------

On March 4, 2011, Burcon signed the
20-year Soy Agreement with ADM to license its CLARISOY technology to ADM on an
exclusive basis to produce, market and sell CLARISOY soy protein worldwide. The
terms of the Soy Agreement include: (a) the license to ADM of all intellectual
property, including know-how and trade secrets, concerning the manufacture and
use of CLARISOY, (b) payments to Burcon on a quarterly basis that began upon
certain approval by the Environmental Protection Agency and continued until the
first bona fide arms length sale of soy products manufactured in the Semi-works
Production facility was made, (c) the engineering and design of an initial
commercial CLARISOY production plant to be completed by ADM and (d) a royalty
structure that incorporates financial incentives for ADM to expand sales
globally. ADM will make royalty payments to Burcon on the sales of CLARISOY
under the Soy Agreement. Maintaining the CLARISOY soy protein patent portfolio
during the term of the Soy Agreement is the responsibility of Burcon. Since
March 4, 2011, Burcon has filed additional patent applications to seek important
commercial protection for the production and use of CLARISOY. ADM has elected
to include these applications to the license and, if granted, could lengthen the
royalty term under the Soy Agreement to at least the year 2035. In December
2012, ADM notified Burcon of the first bona fide arms length sale of CLARISOY
soy protein. Pursuant to the Soy Agreement, the initial license fee payments
ceased at the end of the quarter that immediately precedes the quarter in which
the first bona fide arms length sale of CLARISOY manufactured in the
semi-works production facility occurs. Accordingly, commencing with the quarter
ended December 31, 2012, Burcon earned a percentage of net revenues from the
sale of CLARISOY manufactured from the semi-works production facility. In March
2014, ADM provided written notice to Burcon that it intends to expand the
commercial production of CLARISOY soy protein such that its production capacity
meets the required obligations under the Soy Agreement to retain its exclusive
license for CLARISOY. If ADM does not fulfill certain obligations under the Soy
Agreement, Burcon will have the option to convert the exclusive license to a
non-exclusive license.

| | b) | Peazazz®
| | -- | --------

Burcon has developed a novel pea
protein isolate that it has branded Peazazz®. In June 2013, Burcon
announced that it had completed the construction of a Peazazz®
semi-works production facility located in Winnipeg, Manitoba. Burcon has been
using the semi-works production facility to provide market development
quantities (tonnage amounts) to customers for product and market development
activities.

Burcon has executed a number of
material transfer agreements with potential partners and customers, and has been
in discussions with a select group of potential partners to discuss the
commercialization of Peazazz®and is considering various options,
including building full-scale production facilities through a variety of partnerships.

2

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Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

| | c) | Puratein®, Supertein®and
      Nutratein®
| | -- | -----------------------------------------

Burcon is developing three canola
protein isolate products, Puratein®, Supertein® and
Nutratein®. In 2008, Puratein® and Supertein®
achieved US self-affirmed GRAS (Generally Recognized As Safe) status, and the
US Food and Drug Administration formally acknowledged receipt of Burcons GRAS
notification for Puratein® and Supertein® in 2010.

|3. | Significant accounting
policies
|-- | -------------------------------

Basis of presentation

These consolidated financial statements
are prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) and
interpretations issued by the IFRS Interpretations Committee (IFRIC).

The Company has consistently applied
the same accounting policies throughout all periods presented. The board of
directors approved these financial statements on June 15, 2016.

Principles of consolidation

These consolidated financial statements
include the accounts of the Company and its subsidiary, Burcon NutraScience (MB)
Corp. A subsidiary is an entity in which the Company has control, directly or
indirectly. Under IFRS 10, an investor controls an investee if and only if the
investor has power over the investee, exposure, or rights, to variable returns
from its involvement with the investee, and the ability to use its power over
the investee to affect the amount of the investor's returns. All material
intercompany transactions and balances have been eliminated on consolidation.

Details of the Companys subsidiary at
March 31, 2016 are as follows:

| | Name                           | Place of         | Interest | Principal activity      
| | ------------------------------ | ---------------- | -------- | ------------------------
| |                                | incorporation    | %        |                         
| |                                |                  |          |                         
| | Burcon NutraScience (MB) Corp. | Manitoba, Canada | 100      | Research and development

Revenue recognition

The Company recognizes revenue when the
amount of revenue can be reliably measured, and it is probable that future
economic benefits will flow to the Company. The Company may earn revenues from
licensing agreements under which third parties are granted rights to use the
Companys technologies.

If the substantive rights to the
technologies are retained by the Company, or the Company has remaining
performance obligations under the licensing agreements, and as such not all of
the risks and rewards have been transferred to
the licensee, the Company recognizes amounts received or receivable as royalties
when earned on an accrual basis.

3

---

Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

At the point when all of the risks and
rewards associated with the use of the technologies have, in substance, been
relinquished under the licensing agreements, the Company recognizes the fair
value of future payments expected to be received as proceeds from the sale of
the technologies in the consolidated statements of operations and comprehensive
loss.

Upfront payments and similar
non-refundable payments received under these agreements are initially recognized
as deferred revenue. Subsequently, if the Company recognizes royalty revenue,
the amounts deferred are recognized as revenue on a straight-line basis over the
estimated period royalties are expected to be earned commencing in the period
royalties are first recognized as revenue. Otherwise, the deferred amounts are
recognized as sale proceeds at the date of sale of the technologies. In December
2012, the Company commenced recognizing the previously deferred initial license
fee payments for CLARISOY as revenue on a straight-line basis consistent with
the period over which deferred development costs (note 5) are being amortized.

License agreements may consist of
multiple elements and provide for varying consideration terms, such as upfront
payments and milestone or similar payments. Revenue arrangements with multiple
elements are reviewed in order to determine whether the multiple elements can be
divided into separate units of accounting. If separable, the consideration
received is allocated among the separate units of accounting based on their
respective fair values, and the applicable revenue recognition criteria are
applied to each of the separate units. Otherwise, the applicable revenue
recognition criteria are applied to the revenue arrangement as a single unit.

Business combinations

The Company accounts for business
combinations using the acquisition method of accounting. The cost of an
acquisition is measured as the cash paid and the fair value of other assets
given, equity instruments issued and liabilities incurred or assumed at the
acquisition date. All acquired identifiable assets, liabilities and contingent
liabilities are recognized at fair value at the acquisition date. Any excess of
the cost of an acquisition over the net fair value of the identifiable assets,
liabilities and contingent liabilities acquired is recognized as goodwill. If
the cost of an acquisition is less than the fair value of the net assets of the
acquired entity, the difference is recognized directly in the consolidated
statements of operations and comprehensive loss. Acquisition-related costs are
expensed as incurred.

Accounting estimates

The preparation of consolidated
financial statements in accordance with IFRS requires management to apply
judgment when making estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements, the reported
amount of revenue and expenses during the reporting period, and disclosures made
in the accompanying notes to the financial statements. Actual results may differ
from those estimates.

The significant areas where
managements judgment is applied are in determining the fair value of
stock-based compensation (see note 6 for assumptions used by management),
determining whether all criteria for deferring development
costs are met, determining the point when amortization of deferred development
costs and deferred revenue commences and the expense allocation to deferred
development costs, as well as the recoverable amount of the deferred development
costs and goodwill.

4

---

Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

Cash and cash equivalents

Cash and cash equivalents consist of
cash on deposit with banks and highly liquid short-term interest bearing
securities with maturities at the date of purchase of three months or less.

Short-term investments

Short-term investments comprise highly
liquid short-term interest bearing securities with maturities at their purchase
dates of greater than three months but not more than one year.

Financial instruments

Financial assets and liabilities are
recognized when the Company becomes a party to the contractual provisions of the
instrument. Financial assets are derecognized when the rights to receive cash
flows from the assets have expired or have been transferred and the Company has
transferred substantially all risks and rewards of ownership. Financial assets
and liabilities are offset and the net amount is reported in the consolidated
balance sheets when there is a legally enforceable right to offset the
recognized amounts and there is an intention to settle on a net basis, or
realize the asset and settle the liability simultaneously.

At initial recognition, the Company
classifies its financial instruments in one of the following categories: fair
value through profit or loss, held-to-maturity investments, loans and
receivables, available-for-sale investments or other financial liabilities.

A financial asset or liability is
classified as fair value through profit or loss if acquired principally for the
purpose of selling or repurchasing in the short term. Derivatives are also
included in this category unless they are designated as hedges. Financial
instruments in this category are recognized initially and subsequently at fair
value. Transaction costs are expensed in the consolidated statements of
operations and comprehensive loss. Gains and losses arising from changes in fair
value are presented in the consolidated statements of operations and
comprehensive loss within other gains and losses in the period in which they
arise.

Held-to-maturity investments and loans
and receivables are initially recognized at the amount expected to be received,
less, when material, a discount to reduce the amount to fair value.
Subsequently, held-to-maturity investments and loans and receivables are
measured at amortized cost using the effective interest method less a provision
for impairment. The Company classifies its cash and cash equivalents and
short-term investments as loans and receivables.

Available-for-sale investments are
recognized initially at fair value plus transaction costs and are subsequently
carried at fair value. Gains or losses arising from changes in fair value are
recognized in other comprehensive loss.

5

---

Burcon NutraScience Corporation Notes to
Consolidated Financial StatementsMarch 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

Other financial liabilities are
initially recognized at the amount required to be paid, less, when material, a
discount to reduce the payables to fair value. Subsequently, other financial
liabilities are measured at amortized cost using the effective interest
method.

At each reporting date, the Company
assesses whether there is objective evidence that a financial asset is impaired.
If such evidence exists, the Company recognizes an impairment loss, as follows:

Financial assets carried at amortized
cost: The impairment loss is the difference between the amortized cost of the
loan or receivable and the present value of the estimated future cash flows,
discounted using the instruments original effective interest rate. The carrying
amount of the asset is reduced by this amount which is recognized in the
consolidated statements of operations and comprehensive loss. Impairment losses
on financial assets carried at amortized cost are reversed in subsequent periods
if the amount of the loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognized.

Available-for-sale financial assets:
The impairment loss is the difference between the original cost of the asset and
its fair value at the measurement date, less any impairment losses previously
recognized in the consolidated statements of operations and comprehensive loss.
This amount represents the cumulative loss in accumulated other comprehensive
loss that is reclassified to net loss. Impairment losses on available-for-sale
equity instruments are not reversed.

Transaction costs of an equity
transaction are accounted for as a deduction from equity to the extent that they
are incremental costs directly attributable to the equity transaction that
otherwise would have been avoided. Qualifying transaction costs incurred prior
to the Companys year-end in anticipation of an issuance of equity instruments
subsequent to the Companys year-end are deferred on the consolidated balance
sheets until the equity instruments are issued.

Property and equipment

Property and equipment are recorded at
cost less accumulated amortization. The Company provides for amortization using
the declining balance method at the following annual rates:

| | Equipment          | 20%
| | ------------------ | ---
| | Computer equipment | 30%

Impairment of long-lived assets

The Company tests property and
equipment for impairment whenever events or circumstances indicate that the
carrying value of an asset or group of assets may not be recoverable. Intangible
assets that are not being amortized are tested annually for impairment and also
if the Company identifies indicators of impairment. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows (cash-generating units). The evaluation is
based on the higher of the assets fair value less costs of disposal and its
value in use, which is the present value of future cash flows expected to be
derived from the asset in its current state. An impairment loss is recognized in
the period it is determined to the extent that the carrying value exceeds the
higher of fair value less costs to sell and value in use of the asset or group
of assets.

6

---

Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

Research and development costs

Research costs are expensed in the
period incurred. Development costs are also expensed in the period incurred
unless the related process is clearly defined and the costs attributable thereto
can be reliably measured; the technical feasibility of the process has been
established so that it will be available for use or sale; management has
indicated its intention to produce and market, or use, the process; an ability
to use or sell the process exists; the process will generate probable future
economic benefits; and adequate resources exist, or are expected to be
available, to complete the development and to use or sell the process.

The deferred development costs are
amortized on a straight-line basis over their estimated useful lives commencing
on the date the technology is available for use.

Goodwill

Goodwill represents the excess at the
date of acquisition of the cost of the acquired business over the fair values
attributed to the underlying net tangible assets and the identifiable intangible
assets. Goodwill is not amortized.

On at least an annual basis, or when
circumstances indicate the carrying value of goodwill may not be recoverable,
the Company subjects goodwill to an impairment test. For impairment testing
purposes, the carrying value of goodwill is allocated to the group of assets
that realize the benefits of the acquisition. The impairment assessment is
performed by comparing the carrying value of the group of assets, including the
allocated carrying value of goodwill, to the higher of its fair value less costs
to sell and its value in use, which is the present value of future cash flows
expected to be derived from the group of assets in their current state. If the
carrying amount of the group of assets exceeds the recoverable amount, an
impairment loss is charged to operations in the period such impairment is
identified, allocated first to reducing the carrying amount of the goodwill
allocated to the group, and then to the other assets of the group.

Income taxes

The Company uses the balance sheet
liability method of accounting for income taxes. Under this method, current
income taxes are recognized for the estimated income taxes payable for the
current period. Deferred income tax assets and liabilities are recognized in the
current period for temporary differences between the tax and accounting bases of
assets and liabilities as well as for the benefit of losses available to be
carried forward to future years for tax purposes. Deferred income tax assets and
liabilities are measured using substantively enacted tax rates and laws expected
to apply in the years in which those temporary differences are expected to be
recovered or settled. Deferred income tax assets are recognized to the extent
they are considered probable to be realized.

Government assistance

The Company carries out research and
development in Canada that is eligible for Scientific Research and Experimental
Development (SR&ED) Investment Tax Credits (ITC) at both the federal and
provincial level. The Company has recognized the refundable portion of ITC at
the provincial level but has not recognized the benefits of ITC at the federal
level because realization of these benefits is not probable at this time. The
Companys determination of ITC involves uncertainty with respect to managements
interpretation of complex tax regulations. The ITC claims are subject to review
and acceptance by the Canada Revenue Agency prior to collection.

7

---

Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

Stock-based compensation

The Company accounts for stock-based
compensation granted to employees using the fair value method calculated using
the Black-Scholes option pricing model. Stock-based compensation granted to
non-employees is measured at the fair value of the goods and services received
unless the fair value cannot be measured reliably, in which case the amount is
measured using the fair value of the options granted. For options granted to
employees and those providing similar services, including officers and
directors, the compensation cost is measured at the fair value of the equity
instrument granted at the date of grant and is expensed to operations over the
awards vesting period. When stock options are exercised, capital stock is
credited by the sum of the consideration paid and by the related portion
previously recorded in options. Additional information related to the stock
option plan and the assumptions used in the Black-Scholes option pricing model
are provided in note 6.

Provisions

Provisions are recognized where a legal
or constructive obligation has been incurred as a result of past events, it is
probable that an outflow of resources embodying economic benefit will be
required to settle the obligation, and a reliable estimate of the amount of the
obligation can be made. Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation. The Company has
recognized no provisions in these consolidated financial statements.

Earnings (loss) per share

Basic earnings (loss) per share is
computed by dividing the net earnings (loss) for the period available to common
shareholders by the weighted average number of common shares outstanding during
the period. The Company applies the treasury stock method to calculate diluted
earnings (loss) per share. Diluted earnings (loss) per share excludes all
dilutive potential common shares if their effect is anti-dilutive.

Foreign currency translation

| | a) | Functional and presentation
currency
| | -- | ------------------------------------

Items included in the financial
statements of each consolidated entity are measured using the currency of the
primary economic environment in which the entity operates (the functional
currency). These consolidated financial statements are presented in Canadian
dollars, which is the Companys and its subsidiarys functional currency.

| | b) | Transactions and balances
| | -- | -------------------------

Foreign currency transactions are
translated into the functional currency using the exchange rates prevailing at
the date of the transactions. Generally, foreign exchange gains and losses
resulting from the settlement of foreign currency transactions and from the
translation at period-end exchange rates of monetary assets and liabilities
denominated in currencies other than an operations functional currency are
recognized in the consolidated statements of operations and comprehensive
loss.

8

---

Burcon NutraScience Corporation Notes to
Consolidated Financial Statements March 31, 2016, 2015 and 2014(Prepared in Canadian dollars)

Accounting standards issued and not
yet effective

IFRS 16 - Leases

In January 2016, the IASB issued IFRS
16, Leases, which requires, among other things, leases to recognize leases
traditionally recorded as operating leases in the same manner as a financing
lease. The required adoption date is January 1, 2019, with early adoption
permitted.

IFRS 15 - Revenue from Contracts
with Customers

This new standard on revenue
recognition supersedes International Accounting Standards (IAS) 18, Revenue,
IAS 11, Construction Contracts, and related interpretations. IFRS 15 is
effective for annual periods beginning on or after January 1, 2018, with early
adoption permitted.

IFRS 9 - Financial Instruments -
Classification and Measurement

The final version of IFRS 9 was issued
in July 2014 and includes (i) a third measurement category for financial assets,
and (ii) a single forward looking expected loss impairment model.

IFRS 9 is effective for annual periods
beginning on or after January 1, 2018.

Amendments to IFRS 7 - Financial
Instruments: Disclosures

IFRS 7 is amended to require additional
disclosures on transition from IAS 39 to IFRS 9. The Amendment of IFRS 7 is
effective on adoption of IFRS 9.

The Company is currently assessing the
impact of IFRS 15 and IFRS 16 and the expected date of adoption. The Company
does not expect any material impact from the adoption of the other standards.

9

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

|4. | Property and equipment
|-- | ----------------------

| |                                                  |  |           |  |  | Computer  |   |  |           |  
| | ------------------------------------------------ |  | --------- |  |  | --------- | - |  | --------- | -
| |                                                  |  | Equipment |  |  | equipment |   |  | Total     |  
| |                                                  |  | **$**     |  |  | **$**     |   |  | **$**     |  
| |                                                  |  |           |  |  |           |   |  |           |  
| | Cost at March 31, 2015                           |  | 3,572,009 |  |  | 79,254    |   |  | 3,651,263 |  
| | Current period additions                         |  | 67,910    |  |  | 9,319     |   |  | 77,229    |  
| | Current period disposals                         |  | -         |  |  | (5,468    | ) |  | (5,468    | )
| | Cost at March 31, 2016                           |  | 3,639,919 |  |  | 83,105    |   |  | 3,723,024 |  
| |                                                  |  |           |  |  |           |   |  |           |  
| | Accumulated amortization at March 31, 2015       |  | 3,025,813 |  |  | 61,265    |   |  | 3,087,078 |  
| | Current period amortization                      |  | 119,759   |  |  | 6,589     |   |  | 126,348   |  
| | Current period disposals                         |  | -         |  |  | (4,605    | ) |  | (4,605    | )
| | Accumulated amortization at
      March 31, 2016 |  | 3,145,572 |  |  | 63,249    |   |  | 3,208,821 |  
| |                                                  |  |           |  |  |           |   |  |           |  
| | Net book value at March 31,
      2016           |  | 494,347   |  |  | 19,856    |   |  | 514,203   |  

| |                                                  |  |           |  |  | Computer  |  |  |           | 
| | ------------------------------------------------ |  | --------- |  |  | --------- |  |  | --------- | 
| |                                                  |  | Equipment |  |  | equipment |  |  | Total     | 
| |                                                  |  | **$**     |  |  | **$**     |  |  | **$**     | 
| |                                                  |  |           |  |  |           |  |  |           | 
| | Cost at March 31, 2014                           |  | 3,530,343 |  |  | 70,521    |  |  | 3,600,864 | 
| | Current period additions                         |  | 41,666    |  |  | 8,733     |  |  | 50,399    | 
| | Cost at March 31, 2015                           |  | 3,572,009 |  |  | 79,254    |  |  | 3,651,263 | 
| |                                                  |  |           |  |  |           |  |  |           | 
| | Accumulated amortization at
      March 31, 2014 |  | 2,881,324 |  |  | 55,425    |  |  | 2,936,749 | 
| | Current period amortization                      |  | 144,489   |  |  | 5,840     |  |  | 150,329   | 
| | Accumulated amortization at
      March 31, 2015 |  | 3,025,813 |  |  | 61,265    |  |  | 3,087,078 | 
| |                                                  |  |           |  |  |           |  |  |           | 
| | Net book value at March 31,
      2015           |  | 546,196   |  |  | 17,989    |  |  | 564,185   | 

10

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

|5. | Deferred development costs
|-- | --------------------------

On March 4, 2011, concurrent with
signing the Soy Agreement, the Company commenced deferring development costs
related to CLARISOY. The Company ceased deferring development costs related to
CLARISOY on June 30, 2012 and commenced amortizing these costs over 50 months
on a straight-line basis.

| |                                                     |  | $         | 
| | --------------------------------------------------- |  | --------- | 
| | Cost at March 31, 2016                              |  | 2,223,435 | 
| |                                                     |  |           | 
| | Amortization and impairment
      at March 31, 2015 |  | 1,467,468 | 
| | Current period amortization                         |  | 533,624   | 
| | Amortization and impairment
      at March 31, 2016 |  | 2,001,092 | 
| |                                                     |  |           | 
| | Net book value at March 31,
      2016              |  | 222,343   | 
| |                                                     |  |           | 
| | Cost at March 31, 2015                              |  | 2,223,435 | 
| |                                                     |  |           | 
| | Amortization and impairment
      at March 31, 2014 |  | 933,843   | 
| | Current period amortization                         |  | 533,625   | 
| | Amortization and impairment
      at March 31, 2015 |  | 1,467,468 | 
| |                                                     |  |           | 
| | Net book value at March 31,
      2015              |  | 755,967   | 

|6. | Shareholders equity
|-- | --------------------

| | a) | Capital stock
| | -- | -------------

Authorized
          Unlimited number of
common shares without par value

On April 30, 2015, the Company
completed an offering of shares by way of a rights offering for 1,552,044 common
shares, gross proceeds to Burcon of $3,507,620, and net proceeds of
approximately $3,350,000. Burcon issued to each shareholder one right (the
Right) for each common share held by such shareholder. Every 22 Rights
entitled the holder thereof to purchase one common share in the Company at a
price of $2.26 per common share.

Financing costs related to the rights
offering of $93,518 incurred up to March 31, 2015 were recorded as deferred
financing costs and transferred to share issue costs upon the completion of the
financing on April 30, 2015. Burcon incurred additional share issue costs
related to the rights offering of $60,577, subsequent to March 31, 2015.

11

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

Subject to certain conditions, three
corporate shareholders (the Guarantors), including ITC Corp. (note 10), had
each agreed to provide a standby guarantee (the Standby Commitment) to
purchase such common shares that were available to be purchased, but not
otherwise subscribed for, that would have resulted in a minimum of 1,552,044
common shares being issued under the rights offering. As the rights offering was
over-subscribed, the Guarantors were not required to fulfill their respective
obligations under the Standby Commitment.

As consideration for the Standby
Commitment, the Guarantors received share purchase warrants (Standby Warrants)
entitling the Guarantors to acquire up to 388,011 common shares at an exercise
price of $2.26 per common share that will be exercisable up to April 30, 2017.
In accordance with the policies of the TSX, the issuance of the Standby Warrants
to the Guarantors was subject to shareholder approval, which was granted at
Burcon's annual general meeting on September 3, 2015. The Standby Commitment
Agreement originally gave rise to a financial asset and liability, which had
been initially recorded at fair value as a derivative asset and liability of
$70,152, respectively, with the change in fair value to be recorded through
profit or loss. As noted above, the Guarantors were not required to fulfill
their respective obligations under the Standby Commitment, and therefore the
derivative asset of $70,152 was recognized as a financing expense in the first
quarter. Burcon has estimated the value of the Standby Warrants to be $279,817
using the Black-Scholes option pricing model and has recorded the amount by
which the fair value of the Standby Warrants exceeded the value of the
derivative liability as financing expense (note 7) in the second quarter of
fiscal 2016.

On January 22, 2015, Burcon completed
a private placement of 660,000 common shares at a price of US$2.50 per share for
gross proceeds of US$1,650,000, or CA$1,970,185 and net proceeds of
approximately $1,946,000. Burcon is maintaining a portion of these funds in a US dollar bank
account and, therefore, the funds are subject to the risk of foreign currency
fluctuations.

On April 2, 2014, the Company
completed an offering of shares by way of a rights offering (the 2014 Rights
Offering) for 1,860,276 common shares at $2.82 per common share for gross
proceeds of $5,245,978, and net proceeds of approximately $5.0 million. Pursuant
to the terms of the warrant certificates issued to the guarantors of the 2014
Rights Offering, the exercise price and number of shares purchasable must be
adjusted upon the occurrence of certain events, including future rights
offerings by the Company. Upon completion of the rights offering on April 30,
2015, the warrants from the 2014 Rights Offering were adjusted effectively
immediately after the record date of the rights offering, being April 2, 2015.
The original number of warrants issued to acquire up to 232,534 common shares
was adjusted to 235,880 and the original exercise price of $2.82 per share was
adjusted to $2.78 per share. The Company has recorded $7,118 during the first
quarter for this adjustment. In March 2016, ITC exercised its warrants to
acquire 120,629 common shares and the balance of the warrants to acquire 115,251
common shares expired unexercised on April 2, 2016.

| | b) | Contributed surplus
| | -- | -------------------

Contributed surplus comprises the
value ascribed to expired warrants and options and forfeited vested options,
previously categorized in either warrants or options, as applicable, within
shareholders equity.

12

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

| | c) | Options
| | -- | -------

The Company has a stock option plan in
which all directors, officers, employees and consultants of the Company and its
subsidiary are eligible to participate.

At March 31, 2016, 2,975,579 (2015 -
2,512,167) options to purchase common stock are outstanding from the stock
option plan. These options, when vested under the terms of the plan, are
exercisable at prices ranging between $2.33 and $9.60 per common share. An
additional 607,696 (2015 - 902,329) options may be granted in future years under
this plan. Unless otherwise determined by the board of directors, the options
have a term of 10 years from the date of grant. The vesting terms are determined
at the discretion of the board of directors at the time of grant. All grants are
recognized using graded vesting, with each vesting tranche being valued
separately, and the fair value of each tranche recognized over its respective
vesting period.

| |                                       |  |           |   |  | 2016           |  |  |           |   |  | 2015           | 
| | ------------------------------------- |  | --------- | - |  | -------------- |  |  | --------- | - |  | -------------- | 
| |                                       |  |           |   |  | Weighted       |  |  |           |   |  | Weighted       | 
| |                                       |  | Number of |   |  | average        |  |  | Number of |   |  | average        | 
| |                                       |  | options   |   |  | exercise price |  |  | options   |   |  | exercise price | 
| |                                       |  |           |   |  | **$**          |  |  |           |   |  | **$**          | 
| |                                       |  |           |   |  |                |  |  |           |   |  |                | 
| | Outstanding - Beginning of
      year |  | 2,512,167 |   |  | 5.66           |  |  | 1,986,161 |   |  | 6.50           | 
| | Granted                               |  | 614,954   |   |  | 2.36           |  |  | 616,006   |   |  | 2.86           | 
| | Exercised                             |  | (64,462   | ) |  | 2.54           |  |  | -         |   |  | -              | 
| | Forfeited / Expired / Cancelled       |  | (87,080   | ) |  | 4.33           |  |  | (90,000   | ) |  | 5.03           | 
| |                                       |  |           |   |  |                |  |  |           |   |  |                | 
| | Outstanding - End of year             |  | 2,975,579 |   |  | 5.08           |  |  | 2,512,167 |   |  | 5.66           | 

The following table summarizes
information about stock options outstanding and exercisable at March 31, 2016:

Options outstanding
    
    
    Options exercisableWeightedNumber
    
    
    average
    
    
    
    
    
    Numberoutstanding
    
    
    remaining
    
    
    Weighted
    
    
    exercisable at
    
    
    WeightedRange of
    
    at March 31,
    
    
    contractual
    
    
    average
    
    
    March 31,
    
    
    averageexercise prices
    
    2016
    
    
    life
    
    
    exercise price
    
    
    2016
    
    
    exercise price$
    
    
    
    
    (years)
    
    
    **$**
    
    
    
    
    
    **$**2.33 to 4.16
    
    1,923,079
    
    
    8.38
    
    
    2.84
    
    
    1,109,788
    
    
    3.056.78 to 9.60
    
    1,052,500
    
    
    4.01
    
    
    9.19
    
    
    1,052,500
    
    
    9.192,975,579
    
    
    
    
    
    
    
    
    2,162,288


13

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

The fair value of each option is
estimated as at the date of grant or other measurement date using the
Black-Scholes option pricing model and the following weighted average
assumptions:

| |                                            |  | 2016  |  |  | 2015  |  |  | 2014  | 
| | ------------------------------------------ |  | ----- |  |  | ----- |  |  | ----- | 
| |                                            |  |       |  |  |       |  |  |       | 
| | Dividend yield                             |  | 0.0%  |  |  | 0.0%  |  |  | 0.0%  | 
| | Expected volatility                        |  | 53.3% |  |  | 52.1% |  |  | 51.7% | 
| | Risk-free interest rate                    |  | 1.4%  |  |  | 1.8%  |  |  | 2.3%  | 
| | Expected forfeiture                        |  | 9.4%  |  |  | 10.2% |  |  | 10.7% | 
| | Expected average option life
      (years) |  | 7.8   |  |  | 7.7   |  |  | 8.1   | 

The expected volatility and expected
forfeitures are based on historical volatility and forfeitures. The risk-free
rate of return is the yield on a zero-coupon Canadian treasury bill of a term
consistent with the expected average option term. The expected average option
term is the average expected period to exercise, based on the historical
activity patterns for each individually vesting tranche.

The weighted average fair value of the
options granted during the year ended March 31, 2016 was $1.34 (2015 - $1.61;
2014 - $1.44) per option.

Included in research and development
expenses is $303,830 (2015 - $245,754; 2014 - $146,189) (note 8) of stock-based
compensation and included in general and administrative expenses (salaries and
benefits) is $610,472 (2015 - $485,694; 2014 - $392,451) (note 7) of a
combination of stock-based compensation and costs settled by way of stock
options.

|7. | General and
administrative
|-- | --------------------------

| |                                          |  | 2016      |  |  | 2015      |  |  | 2014      | 
| | ---------------------------------------- |  | --------- |  |  | --------- |  |  | --------- | 
| |                                          |  | $         |  |  | $         |  |  | $         | 
| |                                          |  |           |  |  |           |  |  |           | 
| | Professional fees                        |  | 1,776,877 |  |  | 2,055,550 |  |  | 1,926,656 | 
| | Salaries and benefits (note 6)           |  | 1,611,200 |  |  | 1,389,090 |  |  | 1,284,988 | 
| | Financing expense (notes 6
      and 10) |  | 300,345   |  |  | 413,662   |  |  | -         | 
| | Office supplies and services (note 10)   |  | 182,737   |  |  | 165,690   |  |  | 164,095   | 
| | Investor relations                       |  | 149,053   |  |  | 222,171   |  |  | 354,061   | 
| | Other                                    |  | 125,487   |  |  | 119,258   |  |  | 105,961   | 
| | Travel and meals                         |  | 74,515    |  |  | 61,256    |  |  | 82,782    | 
| | Management fees (note 10)                |  | 14,890    |  |  | 29,068    |  |  | 32,365    | 
| | Amortization of property and equipment   |  | 2,864     |  |  | 2,949     |  |  | 3,118     | 
| |                                          |  |           |  |  |           |  |  |           | 
| |                                          |  | 4,237,968 |  |  | 4,458,694 |  |  | 3,954,026 | 

14

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

|8. | Research and
development
|-- | ------------------------

| |                                            |  | 2016      |  |  | 2015      |  |  | 2014      | 
| | ------------------------------------------ |  | --------- |  |  | --------- |  |  | --------- | 
| |                                            |  | **$**     |  |  | **$**     |  |  | **$**     | 
| |                                            |  |           |  |  |           |  |  |           | 
| | Salaries and benefits (note
      6)       |  | 1,434,501 |  |  | 1,385,537 |  |  | 1,236,243 | 
| | Amortization of deferred development costs |  | 533,624   |  |  | 533,625   |  |  | 533,625   | 
| | Laboratory operation                       |  | 378,203   |  |  | 307,826   |  |  | 300,565   | 
| | Amortization of property and equipment     |  | 123,484   |  |  | 147,380   |  |  | 147,452   | 
| | Rent                                       |  | 90,767    |  |  | 88,442    |  |  | 85,497    | 
| | Analyses and testing                       |  | 73,161    |  |  | 64,564    |  |  | 69,891    | 
| | Travel and meals                           |  | 19,845    |  |  | 8,387     |  |  | 20,376    | 
| |                                            |  |           |  |  |           |  |  |           | 
| |                                            |  | 2,653,585 |  |  | 2,535,761 |  |  | 2,393,649 | 

|9. | Basic and diluted loss per
share
|-- | --------------------------------

The following table sets forth the
computation of basic and diluted loss per share:

| |                                                                                       |  | 2016       |   |  | 2015       |   |  | 2014       |  
| | ------------------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                                                       |  | **$**      |   |  | **$**      |   |  | **$**      |  
| | Loss for the year, being loss attributable to common shareholders - basic and diluted |  | 6,569,776  |   |  | 6,579,424  |   |  | 5,961,545  |  
| |                                                                                       |  |            |   |  |            |   |  |            |  
| |                                                                                       |  | Shares     |   |  | Shares     |   |  | Shares     |  
| |                                                                                       |  |            |   |  |            |   |  |            |  
| | Weighted average common shares - basic and diluted                                    |  | 35,581,414 |   |  | 33,604,639 |   |  | 31,624,693 |  
| |                                                                                       |  |            |   |  |            |   |  |            |  
| | Basic and diluted loss per share                                                      |  | (0.18      | ) |  | (0.20      | ) |  | (0.19      | )

For the years ended March 31, 2016,
2015 and 2014, the Company excluded all potential common share equivalents from
the diluted loss per share calculation as they were anti-dilutive.

|10. | Related party transactions
|--- | --------------------------

The Company engaged a company that is
controlled by an entity that has significant influence over Burcon for the
following related party transactions:

Included in general and administrative
expenses (office supplies and services) for the year ended March 31, 2016 is
$74,667 (2015 - $70,224; 2014 - $63,721) for office space rental, services, and
equipment rental.

15

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

For the year ended March 31, 2016,
included in general and administrative expenses (management fees) and (financing
expense) are $14,890 (2015 - $29,068; 2014 - $32,365) and $nil (2015 - $593;
2014 - $nil), respectively, for services provided to the Company. At March 31,
2016, $130 (2015 - $1,715) of this amount is included in accounts payable and
accrued liabilities. For the year ended March 31, 2016, included in interest and
other income is $16,702 (2015 - $21,812; 2014 - $12,895) for management services
provided by the Company. At March 31, 2016, $658 (2015 - $818), of this amount
is included in amounts receivable. Included in deferred financing costs are fees
of $nil (2015 - $2,235; 2014 - $2,550) and included in share issue costs are
fees of $1,410 (2015 - $615; 2014 - $nil) for administrative services provided
directly for financings, of which $nil is included in accounts payable and
accrued liabilities as of March 31, 2016 (2015 - $1,913).

During the year, the Company issued
warrants to ITC Corporation Limited related to the rights offering (note 6(a))
and estimated the fair value to be $143,099. Of this amount $107,223,
representing the amount by which the fair value of the Standby Warrants exceeded
the value of the derivative liability, was recorded as financing expense during
the year. During the year ended March 31, 2015, the Company issued warrants to
ITC related to the 2014 Rights Offering and recorded the estimated fair value of
$183,053 as financing expense. An additional amount of $3,640 was recorded as
financing expense during fiscal 2016 pursuant to the terms of the warrant
certificates issued to the guarantors of the 2014 Rights Offering. ITC exercised
its warrants from the 2014 Rights Offering to acquire 120,629 common shares in
March 2016.

|11. | Key management
compensation
|--- | ---------------------------

Key management includes the Companys
CEO and COO. Remuneration of directors and key management personnel comprises:

| |                     |  | 2016    |  |  | 2015    |  |  | 2014    | 
| | ------------------- |  | ------- |  |  | ------- |  |  | ------- | 
| |                     |  | $       |  |  | $       |  |  | $       | 
| | Short-term benefits |  | 379,693 |  |  | 362,227 |  |  | 367,743 | 
| | Option-based awards |  | 388,325 |  |  | 302,742 |  |  | 247,191 | 
| |                     |  |         |  |  |         |  |  |         | 
| |                     |  | 768,018 |  |  | 664,969 |  |  | 614,934 | 

Short-term benefits comprise salaries,
director fees and employment benefits. Option-based awards represent the cost to
the group of senior management and directors participation in the incentive
stock option plan, as measured by the fair value of instruments granted
accounted for in accordance with IFRS 2, Share-based Payment. For details
of these plans refer to note 6 to the consolidated financial statements.

16

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

|12. | Income taxes
|--- | ------------

The recovery of income taxes differs
from the amount obtained by applying the statutory Canadian federal and
provincial income tax rates to loss for the year as follows:

| |                                                                                                                               |  | 2016       |   |  | 2015       |   |  | 2014       |  
| | ----------------------------------------------------------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                                                                                               |  | **$**      |   |  | **$**      |   |  | **$**      |  
| | Recovery of income taxes
      based on the combined statutory income tax
      rate of 26.97% (2015 - 27.08%; 2014 - 27.13%) |  | (1,772,000 | ) |  | (1,782,000 | ) |  | (1,617,000 | )
| | Deferred income tax assets not recognized                                                                                     |  | 1,537,000  |   |  | 1,223,000  |   |  | 1,400,000  |  
| | Non-capital losses expired                                                                                                    |  | -          |   |  | 321,000    |   |  | 153,000    |  
| | Financing costs                                                                                                               |  | (40,000    | ) |  | (67,000    | ) |  | -          |  
| | Adjustment to deferred income
      tax assets for changes in tax rates                                                       |  | -          |   |  | -          |   |  | (74,000    | )
| | Non-deductible items and tax adjustments                                                                                      |  | 275,000    |   |  | 305,000    |   |  | 138,000    |  
| |                                                                                                                               |  |            |   |  |            |   |  |            |  
| | Recovery of income taxes                                                                                                      |  | -          |   |  | -          |   |  | -          |  

As at March 31, 2016, the Company has
non-capital losses of approximately $40,608,000 (2015 - $36,142,000) available
to reduce taxable income in future years. These losses expire as follows:

| |      |  | **$**      | 
| | ---- |  | ---------- | 
| | 2026 |  | 800,000    | 
| | 2027 |  | 1,460,000  | 
| | 2028 |  | 2,093,000  | 
| | 2029 |  | 2,432,000  | 
| | 2030 |  | 3,498,000  | 
| | 2031 |  | 4,358,000  | 
| | 2032 |  | 5,327,000  | 
| | 2033 |  | 4,606,000  | 
| | 2034 |  | 5,507,000  | 
| | 2035 |  | 5,623,000  | 
| | 2036 |  | 4,904,000  | 
| |      |  |            | 
| |      |  | 40,608,000 | 

In addition, the Company has SR&ED
expenditures of approximately $13,014,000 available to carry forward
indefinitely.

ITCs of $4,566,000 may be used to
offset deferred income taxes otherwise payable and expire between 2017 and 2036.

17

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

Included in interest and other income
is $109,720 (2015 - $119,511; 2014 - $228,812) of refundable ITCs, which is
included in amounts receivable at March 31, 2016 (2015 - $119,511; 2014 -
$115,655).

The tax effects of temporary
differences that give rise to deferred income tax assets are as follows:

| |                                              |  | 2016       |   |  | 2015       |  
| | -------------------------------------------- |  | ---------- | - |  | ---------- | -
| |                                              |  | **$**      |   |  | **$**      |  
| |                                              |  |            |   |  |            |  
| | Deferred income tax assets
      (liability) |  |            |   |  |            |  
| | SR&ED expenditures                           |  | 3,495,000  |   |  | 3,242,000  |  
| | Losses from
      operations carried forward |  | 10,922,000 |   |  | 9,712,000  |  
| | Deferred revenue                             |  | 11,000     |   |  | 36,000     |  
| | Deferred
      development costs             |  | (53,000    | ) |  | (181,000   | )
| | Financing costs                              |  | 123,000    |   |  | 144,000    |  
| | Property and equipment                       |  | 74,000     |   |  | 82,000     |  
| |                                              |  |            |   |  |            |  
| | Unrecognized deferred income tax assets      |  | 14,572,000 |   |  | 13,035,000 |  

Management believes the realization of
income tax benefits related to these losses and other potential deferred income
tax assets is uncertain at this time and cannot be viewed as probable.
Accordingly, the Company has not recognized these deferred income tax assets.

|13. | Financial instruments
|--- | ---------------------

Credit risk

The financial instruments that expose
the Company to a concentration of credit risk are cash and cash equivalents,
amounts receivable and short-term investments. The Companys cash and cash
equivalents may comprise interest-bearing savings instruments with Canadian
chartered banks. Short-term investments comprise interest-bearing securities
with Canadian chartered banks with maturities at their purchase dates of greater
than three months but not more than a year. The Company limits its exposure to
credit loss by placing its cash and cash equivalents and short-term investments
with two Canadian chartered banks.

Interest rate risk

All of the Companys financial
instruments are non-interest bearing except for cash and cash equivalents that
earn interest at variable market rates and short-term investments that earn
interest at fixed interest rates. Burcons cash and cash equivalents and
short-term investments are held at two Canadian chartered banks to maximize
interest and to diversify risk. For the year ended March 31, 2016, the weighted
average interest rate earned on the Companys cash and cash equivalents was
0.89% per annum (2015 - 1.22% per annum) and the weighted average interest rate
earned on short-term investments was 0.30% (2015 - 0.30%) per annum. The impact
of a 1% strengthening or weakening of interest rates on the Companys cash and
cash equivalents at March 31, 2016 is estimated to be a $25,000 increase or
decrease in interest income per year.

18

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

Liquidity risk

The Company manages liquidity risk
through the management of its capital structure (note 14). It also manages
liquidity risk by monitoring actual and forecasted cash flows taking into
account current and planned operations. The Companys estimated minimum
contractual undiscounted cash flow requirement for its financial liabilities at
March 31, 2016 is $701,748, all of which is within the next 12 months.

Fair value

The fair value of the derivative asset
and liability was a level 3 fair value and was estimated based the amount of
which the Company can settle its obligation under the standby commitment
agreement in cash (note 6).

The carrying values of cash and cash
equivalents, short-term investments, amounts receivable and accounts payable and
accrued liabilities approximate their fair values due to the short-term natures
of those assets and liabilities.

Currency risk

Certain amounts of the Company's cash
and cash equivalents and all of the Companys short-term
investments are denominated in US dollars. Therefore, the Company is exposed to
risk from changes in foreign exchange rates.

|14. | Capital disclosures
|--- | -------------------

The Company considers its capital to be
its shareholders equity.

The Company manages its capital
structure to have sufficient resources available to meet day-to-day operating
requirements, continue as a going concern and fund its research and development
program. The Company is dependent on non-operating sources of cash, primarily
from issuing equity, to fund its operations and research development programs.
The Company monitors its capital and the expected cash flows required to achieve
its business objectives to determine its future financing needs. It seeks
additional capital when deemed appropriate, but there is no assurance that it
will be able to secure the necessary capital when required. Refer also to note
1.

The Company is not subject to
externally imposed capital requirements and there has been no change with
respect to the overall capital risk management strategy during the year ended
March 31, 2016.

19

---

|Burcon NutraScience Corporation Notes to
Consolidated Financial Statements
|--------------------------------------------------------------------------
|March 31, 2016, 2015 and 2014                                             
|(Prepared in Canadian dollars)                                            

|15. | Subsequent events
|--- | -----------------

Subsequent to March 31, 2016, the
Company issued a convertible note (the Note) to a wholly-owned subsidiary of
ITC Corporation Limited (the Lender) for the principal amount of $2.0 million
(the Principal Amount) with net proceeds of approximately $1.93 million. The
Note bears interest at 8% per annum on the Principal Amount and will be payable
on the earlier of three years from the issue of the Note, the occurrence of an
event of default as set out in the Note, or voluntary prepayment by the Company
(the Maturity Date). The Lender may convert the Principal Amount in whole or
in part at $4.01 per common share at any time commencing on or after July 1,
2016 and up to and including the Maturity Date.

Burcon has the right, before the
Maturity Date, upon written notice to the Lender of not less than thirty days,
to prepay in cash all or any portion of the Principal Amount by paying to the
Lender an amount equal to the Principal Amount to be prepaid multiplied by 110%.
The payment of the Principal Amount and all accrued and unpaid interest thereon
will be subordinated in right of payment to any amount owing in respect of
secured indebtedness of the Company. Subject to the consent of the Lender,
Burcon may pay any interest that is due and payable under the Note through the
issuance of common shares at a conversion price equal to the volume weighted
average trading price of the common shares on the TSX for the five trading days
immediately prior to the date such interest is due and payable. Financing costs
related to this note incurred up to March 31, 2016 have been recorded as
deferred financing costs.

Subsequent to March 31, 2016, the
Company committed to approximately $104,000 of capital expenditures.

20

---