[Translation: Please note that the following purports to be a translation from the Japanese original Notice of Convocation of the Annual General Meeting of Shareholders 2013 of Chugai Pharmaceutical Co., Ltd. prepared for the convenience of holders outside Japan with voting rights. However, in the case of any discrepancy between the translation and the Japanese original, the latter shall prevail.] ITEMS DISCLOSED ON INTERNET CONCERNING NOTICE OF CONVOCATION OF THE ANNUAL GENERAL MEETING OF SHAREHOLDERS FOR THE BUSINESS TERM ENDED DECEMBER 31, 2012 Notes to Consolidated Financial Statements Notes to Non-Consolidated Financial Statements Notes to the Consolidated Financial Statements and the Notes to the Non-Consolidated Financial Statements have been provided to our holders by posting the same on our website (http://www.chugai-pharm.co.jp/hc/ir) in accordance with the related legislation and Article 15 of the Articles of Incorporation of the Company. CHUGAI PHARMACEUTICAL CO., LTD. 1
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Notes to the Basis of Preparing Consolidated Financial Statements 1. Scope of consolidation (1) Number of consolidated subsidiaries: 18 companies Names of major subsidiaries: Chugai Pharma Marketing Ltd., and Chugai Pharma Manufacturing Co., Ltd. During the consolidated fiscal year under review, Forerunner Pharma Research Co., Ltd. has been included in the scope of consolidation because it increased value in materiality, and Chugai Pharmabody Research Pte. Ltd. has also been included in the scope of consolidation since it was newly established. (2) Number of non-consolidated subsidiaries: 1 company Name of non-consolidated subsidiary: PharmaLogicals Research Pte. Ltd. (Reason for excluding from the scope of consolidation) The above one company has been excluded from the scope of consolidation, because it had little value in their materiality. 2. Application of equity method (1) Number of non-consolidated subsidiaries and affiliates accounted for by the equity method: None (2) Names of non-consolidated subsidiaries and affiliates not accounted for by the equity method: PharmaLogicals Research Pte. Ltd., and C&C Research Laboratories (Reason for not applying the equity method) Investments in a non-consolidated subsidiary, PharmaLogicals Research Pte. Ltd., and an affiliate, C&C Research Laboratories, have been carried at cost and the effect of their net income and retained earnings on the Consolidated Financial Statements of the Company had little value in their materiality. 3. Treatment for the difference in fiscal period The closing date of all subsidiaries is in agreement with the Company s closing date. 4. Significant accounting policies (1) Basis and method for valuation of securities Securities are valued mainly by the methods stated below. Held-to-maturity securities Other securities Securities with market value Held-to-maturity securities are stated by the amortized cost method (straight-line method). Securities with market value are stated at fair value at the closing date for the fiscal year, and changes in fair value are recorded as a separate component of holders equity at an amount net of tax, and the moving average method is used to calculate the original cost. Securities without market value Securities without market value are stated at cost determined by the moving average method. (2) Basis and method for valuation of derivatives Derivatives are revalued by the market value method. 2
(3) Basis and method for valuation of inventories Inventories held for regular sale Inventories held for regular sale are stated at cost determined principally by the average method. (The value indicated in the Balance Sheet is based on a write-down due to decline in profitability.) (4) Basis and method for valuation of noncurrent assets Depreciation is calculated by the methods stated below. Property, plant and equipment (excluding lease assets) Depreciation of property, plant and equipment is calculated primarily by the declining-balance method. Intangible assets (excluding lease assets) Amortization of intangible assets is calculated primarily by the straight-line method. Amortization of software for internal use is calculated based on its usable period (five years). Lease assets Depreciation for finance leases is calculated by depreciating the purchase value of such assets to zero using the straight-line method over the applicable useful lives of such assets. Finance lease transactions for which ownership is not transferred to the lessee, and for which the lease period began on or before December 31, 2008, the previous accounting standards apply and the accounting treatment follows the method applicable to ordinary rental transactions. (5) Accounting for important reserves Reserve for doubtful accounts Reserve for bonuses to employees Reserve for bonuses to directors In order to prepare for losses of bad credits such as account receivables or loans and for revaluation losses on financial instruments, except valuation losses on securities, the reserve for doubtful accounts is provided for at an uncollectable amount based on the historical percentage of credit losses for general credits, and is provided for at an amount that is estimated individually considering the possibilities of collection for bad credits that are highly possible to loss and the possibilities of future loss on financial instruments. The reserve for bonuses to employees is presented at an estimated amount of the liability for bonuses incurred for the fiscal year. The reserve for bonuses to directors is presented at an estimated amount of the 3
liability for bonuses incurred for the fiscal year. Reserve for sales rebates Reserve for employees retirement benefits Reserve for directors retirement benefits In order to prepare for any expenditure on sales rebates during the fiscal year under review, the reserve for such rebates is computed based on the sales amount and included in this reserve. The reserve for employees retirement benefits is stated based on the estimate liabilities for retirement benefits and pension assets as of the balance sheet date. Prior service cost is being amortized as incurred by the declining-balance method over 10 years, which is shorter than the average remaining years of service of the eligible employees. The actuarial gain and loss are amortized mainly by the declining-balance method over 10 years, which is shorter than the average period of the remaining years of service of the eligible employees and are amortized from the following year in which the gain or loss is recognized. The reserve for directors retirement benefits is recorded at an amount based on management s estimate, which would be required to be paid if all directors resigned as of the balance sheet date on the basis of the Company s internal regulations. While the Company abolished the Directors retirement benefits system, it posted an amount corresponding to the period the Directors spent in office prior to the abolition of the system. Provision for environmental measures The provision for environmental measures is recorded based on the estimated amount of expenditure for environmental measures as of the balance sheet date. (6) Foreign currency translation The revenue and expense accounts of the foreign consolidated subsidiaries are translated into yen at the rates of exchange in effect at the balance sheet date, and, except for the components of net assets, the balance sheet accounts are also translated at the rates of exchange in effect at the balance sheet date. The components of net assets are translated at their historical rates. Translation differences are presented as translation adjustments and minority interests in net assets of the accompanying consolidated financial statements. (7) Important hedge accounting methods Hedge accounting methods Deferred hedge accounting is adopted. 4
Hedging instruments and hedged items Hedging instruments: Forward exchange contracts Hedged items: Foreign currency denominated monetary receivables and payables Hedging policy Hedging transactions in respect of foreign currency denominated transactions are carried out under the Internal Management Rules for the purpose of hedging the cash flows fluctuation risk associated with foreign exchange fluctuations. Methods for evaluating hedge effectiveness Hedge effectiveness is evaluated by comparing the cumulative market fluctuations of the hedged items and hedging instruments and determined based on their fluctuation amounts, etc., for the period from the start of hedging to the time of evaluation of effectiveness. (8) Accounting for consumption tax Income and expenses for the Company and its domestic subsidiaries are recorded at net of consumption taxes. [Changes in Important Accounting Policies] 1. Method for accounting for forward exchange contracts in respect of foreign currency denominated forecasted transactions Forward exchange contracts in respect of foreign currency denominated forecasted transactions were previously accounted for by the market value method, recording valuation difference in profit or loss. In view of the significant exchange rate fluctuations in recent years, along with increases in the Company s foreign currency denominated transactions, the Company has realigned the internal Risk Management Regulations concerning forward exchange contracts, and has applied hedge accounting for part of the forward exchange contracts changing to deferred hedge accounting beginning with the consolidated fiscal year under review, in an effort to reflect hedge effectiveness onto the financial statements for more appropriate periodic accounting of profit and loss. Such a change in the accounting policies was the result of realignment of the internal Risk Management Regulations concerning forward exchange contracts beginning with the consolidated fiscal year under review. Therefore, it has no impact on the previous fiscal year. As a result of this change, operating income for the fiscal year under review was reduced by 345 million, and recurring profit and income before income taxes and minority interests was reduced by 39 million, respectively, from the amounts they would have been without applying such accounting policies. 2. Change in the depreciation methods Following the amendments to the Corporation Tax Act, the Company and its domestic consolidated subsidiaries, beginning with the consolidated fiscal year under review, have changed their depreciation methods based on the amended Corporation Tax Act, in respect of property, plant and equipment other than buildings (excluding accompanying facilities) acquired on or after April 1, 2012. As a result of this change, operating income, recurring profit and income before income taxes and minority interests for the fiscal year under review were increased by 233 million, respectively, from the amounts they would have been under the previous methods. [Additional Information] (Application of Accounting Standards for Accounting Changes and Error Corrections) The Company has applied the Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No.24, issued on December 4, 2009) and the Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No.24, issued on December 4, 2009) for accounting changes and corrections of prior period errors which are made on and after the beginning of the consolidated fiscal year under review. 5
Notes to the Consolidated Balance Sheets 1. Accumulated depreciation of property, plant and equipment 186,570 million 2. Contingent liabilities Guarantees of (housing) loans of employees 216 million 3. Commitment line contract The Company maintains commitment line contracts with nine financial institutions in order to allow the efficient procurement of working capital. The balances of loans, etc. in the balance sheet date was as follows: Total commitments Commitments used Commitments unused 40,000 million 40,000 million Notes to the Consolidated Statements of Income The components of revenues were as follows: Sales of merchandise and finished goods 375,234 million Other operating income 15,985 million Notes to the Consolidated Statement of Changes in Net Assets 1. Type and number of outstanding s as of December 31, 2012 559,685,889 s Type and number of treasury s as of December 31, 2012 15,440,438 s 2. Dividends paid to holders during the fiscal year under review Approval March 28, 2012 Annual general meeting of holders July 26, 2012 Board of directors meeting Type of s Amount (Millions of Yen) Per Share (Yen) 10,883 20 10,884 20 Date of record December 31, 2011 June 30, 2012 Effective date March 29, 2012 August 31, 2012 3. Dividends which record date within current fiscal year but to be effective after current fiscal year Expected approval March 27, 2013 Annual general meeting of holders Type of s Amount (Millions of Yen) 10,884 Type of distribution Retained earnings Per Share (Yen) 20 Date of record December 31, 2012 Effective date March 28, 2013 6
4. Number of s to be issued or transferred upon the exercise of new (new that are exercisable) at the end of the fiscal year under review New Date of approval for issuance Type of s to be issued upon the exercise of the new Number of s to be issued upon the exercise of the new (s) Date of approval for issuance Type of s to be issued upon the exercise of the new Number of s to be issued upon the exercise of the new (s) First new ( July 25, 2003 Second new ( March 25, 2004 Third new ( March 23, 2005 Fourth new ( March 23, 2006 Fifth new ( March 23, 2007 Sixth new ( March 25, 2009 2009 new (Stock compensa tion- type April 24, 2009 75,200 206,900 245,200 333,000 344,000 327,000 59,400 Seventh new ( April 23, 2010 2010 new (Stock compensa tion- type April 23, 2010 Eighth new ( (Note) May 27, 2011 2011 new (Stock compensa tion- type May 27, 2011 Ninth new ( (Note) April 24, 2012 2012 new (Stock compensa tion- type April 24, 2012 323,000 64,700 324,000 78,000 333,000 81,700 (Note) The Company has entered into new warrant allocation contracts with the holders of the, under which the holders can not exercise their new during the first two years or so after the date of approval for issuance regardless of the exercise period, although the exercise period has commenced. 7
Notes to Financial Instruments 1. Status of financial instruments held by the Group (1) Policy for financial instruments The Group is investing its temporary surplus fund primarily in safe and highly liquid financial assets. Derivative transactions are used for avoiding the risks as described hereunder, and not for speculative purposes which are against the corporate policy. (2) Nature and extent of risks arising from financial instruments Trade receivables such as trade notes and accounts receivable are exposed to customer credit risk, while trade receivables denominated in foreign currencies are exposed to exchange fluctuation risk. Marketable securities and investment securities primarily comprising bonds, etc. held as investment of surplus fund, along with s of the companies in business relation with the Group, are exposed to the risk of market price fluctuations. Of trade payables such as trade notes and accounts payable, those denominated in foreign currencies are exposed to exchange fluctuation risk. Derivative transactions conducted by the Group are restricted to forward exchange contracts with the purpose to hedge exchange fluctuation risk in respect of foreign currency denominated receivables and payables. For details including hedging instruments, hedged items, hedging policy, methods for evaluating hedge effectiveness, please refer to the aforementioned Notes to the Basis of Preparing Consolidated Financial Statements, 4. Significant accounting policies, (7) Important hedge accounting methods. (3) Risk management for financial instruments 1) Credit risk management (risks associated with the defaults of clients) As part of the Company s credit risk management, regarding the trade receivables, sales administration departments are regularly monitoring the financial position of main clients by checking payment term and credit balance for each client according to the accounting rules, to ensure early identification and mitigation of the potential bad debt associated with the deterioration of their financial position. Derivative transactions are restricted to those with high credit rating financial institutions, in an effort to mitigate the counterparty risks. 2) Market risk management (foreign currency exchange and interest rate fluctuation risks) The Company is hedging exchange fluctuation risks of foreign currency denominated receivables and payables primarily by using forward exchange contracts. Holdings of marketable securities and investment securities are monitored based on regular identification of their fair values as well as financial position of the issuing entities (business partners), in which those other than held-to-maturity securities in particular are subject to continuous review in terms of the viability of their holdings, in consideration of the market conditions along with the Company s business relationship with the business partners. Derivative transactions are conducted under the management system defined by the internal rules, in which transactions status including the transaction balances as well as valuation profit or loss are identified on a monthly basis. Incidentally, consolidated subsidiaries do not engage in derivative transactions. 3) Liquidity risk management on fund raising (risk in which the Company being unable to repay within the due date) The Company is managing its liquidity risks by cash management plan prepared and updated as appropriate by Finance & Accounting Dept. based on the reporting from each department. 8
(4) Supplementary explanation concerning fair values, etc. of financial instruments Fair values of financial instruments comprise values determined based on market prices and values determined reasonably when there is no market price. Since variable factors are incorporated in computing the relevant fair values, such fair values may vary depending on the different assumptions. The contract amount, etc. with respect to derivative transactions do not indicate the amounts of market risk exposed to derivative transactions. 2. Fair values of financial instruments Carrying amount, fair value and unrealized gain/loss of the financial instruments as of December 31, 2012 are as follows. Financial instruments whose fair values are not readily determinable are excluded from the following table: (See Note 2) (Millions of Yen) Carrying Unrealized Fair value amount gain (loss) (1) Cash and deposits 110,935 110,935 (2) Trade notes and accounts receivable 119,995 119,995 (3) Marketable securities and investment securities 106,734 106,734 Total assets 337,666 337,666 Trade notes and accounts payable 41,725 41,725 Total liabilities 41,725 41,725 Derivative transactions (*) 1,701 1,701 (*) Receivables and payables incurred by derivative transactions are presented as net amounts. (Notes) 1. Calculation method of fair values of financial instruments and matters concerning marketable securities and derivative transactions Assets: (1) Cash and deposits and (2) Trade notes and accounts receivable These assets are recorded using book values because fair values approximate book values because of their short-term maturities. (3) Marketable securities and investment securities The fair values of these s, etc. are determined using the quoted price at the exchange. Bonds are determined using the quoted price at the exchange or that obtained from the financial institutions. Liabilities: Trade notes and accounts payable These liabilities are recorded using book values because fair values approximate book values because of their short-term maturities. Derivative transactions: Their fair values are calculated based on the quoted price obtained from the financial institutions. 2. Financial instruments whose fair values are not readily determinable (Millions of Yen) Category Carrying amount Unlisted equity securities 461 These items are not included in (3) Marketable securities and investment securities, because there is no market price, and it is very difficult to identify fair values. 9
3. Redemption schedule of monetary assets and securities with contractual maturities (Millions of Yen) Within one year One to five years Five to ten years Over ten years Cash and deposits 110,935 Trade notes and accounts 119,995 receivable Marketable securities and investment securities: Of which, securities with contractual maturities: Bonds (1) Corporate bonds 1,000 (2) Others 5,000 Others 95,000 Total 331,931 Notes to the Per Share Information 1. Net assets per 896.02 2. Net income per 88.58 10
NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies 1. Basis and method for valuation of securities Held-to-maturity securities Investments in subsidiaries and affiliates Other securities Securities with market value Held-to-maturity securities are stated by the amortized cost method (straight-line method). Investments in subsidiaries and affiliates are stated at cost determined by the moving average method. Securities with market value are stated at fair value at the closing date for the fiscal year, and changes in fair value are recorded as a separate component of net assets at an amount net of tax, and the moving average method is used to calculate the original cost. Securities without market value Securities without market value are stated at cost determined by the moving average method. 2. Basis and method for valuation of derivatives Derivatives are revalued by the market value method. 3. Basis and method for valuation of inventories Inventories held for regular sale Inventories held for regular sale are stated at cost determined principally by the average method. (The value indicated in the Balance Sheet is based on a write-down due to decline in profitability.) 4. Accounting for deferred assets Expenses of new issued are accounted for as the full amount at the time of the expenditure. 5. Basis and method for valuation of noncurrent assets Property, plant and equipment (excluding lease assets) Depreciation of property, plant and equipment is calculated primarily by the declining-balance method. Intangible assets (excluding lease assets) Amortization of intangible assets is calculated primarily by the straight-line method. Amortization of software for internal use is calculated based on its usable period (five years). Lease assets Depreciation for finance leases is calculated by depreciating the purchase value of such assets to zero using the straight-line method over the applicable useful lives of such assets. Finance lease transactions for which ownership is not transferred to the lessee, and for which the lease period began on or before December 31, 2008, the previous accounting standards apply and the accounting treatment follows the method applicable to ordinary rental transactions. 6. Accounting for reserves Reserve for doubtful accounts In order to prepare for losses of bad credits such as account receivables or loans and for revaluation losses on financial instruments, 11
except valuation losses on securities, the reserve for doubtful accounts is provided for at an uncollectable amount based on the historical percentage of credit losses for general credits, and is provided for at an amount that is estimated individually considering the possibilities of collection for bad credits that are highly possible to loss and the possibilities of future loss on financial instruments. Reserve for bonuses to employees Reserve for bonuses to directors Reserve for sales rebates The reserve for bonuses to employees is presented at an estimated amount of the liability for bonuses incurred for the fiscal year. The reserve for bonuses to directors is presented at an estimated amount of the liability for bonuses incurred for the fiscal year. In order to prepare for any expenditure on sales rebates, the reserve for such rebates is computed based on the sales amount. Reserve for employees retirement benefits The reserve for employees retirement benefits is stated at the amount required to cover the liabilities as of the balance sheet date, and is based on the Company s estimate, and the estimates of certain of its domestic consolidated subsidiaries of their liabilities for retirement benefits and pension assets as of the balance sheet date. Prior service cost is being amortized as incurred by the declining-balance method over 10 years, which is shorter than the average remaining years of service of the eligible employees. The actuarial gain and loss are amortized by the declining-balance method over 10 years, which is shorter than the average period of the remaining years of service of the eligible employees and are amortized from the following year in which the gain or loss is recognized. Reserve for directors retirement benefits Provision for environmental measures While the Company abolished the Directors retirement benefits system, the Company posted an amount corresponding to the period the Directors spent in office prior to the abolition of the system. The provision for environmental measures is recorded based on the estimated amount of expenditure for environmental measures as of the balance sheet date. 12
7. Hedge accounting methods Hedge accounting methods Deferred hedge accounting is adopted. Hedging instruments and hedged items Hedging instruments: Forward exchange contracts Hedged items: Foreign currency denominated monetary receivables and payables Hedging policy Hedging transactions in respect of foreign currency denominated transactions are carried out under the Internal Management Rules for the purpose of hedging the cash flows fluctuation risk associated with foreign exchange fluctuations. Methods for evaluating hedge effectiveness Hedge effectiveness is evaluated by comparing the cumulative market fluctuations of the hedged items and hedging instruments and determined based on their fluctuation amounts, etc., for the period from the start of hedging to the time of evaluation of effectiveness. 8. Accounting for consumption tax Income and expenses are recorded at net of consumption taxes. [Changes in Important Accounting Policies] 1. Method for accounting for forward exchange contracts in respect of foreign currency denominated forecasted transactions Forward exchange contracts in respect of foreign currency denominated forecasted transactions were previously accounted for by the market value method, recording valuation difference in profit or loss. In view of the significant exchange rate fluctuations in recent years, along with increases in the Company s foreign currency denominated transactions, the Company has realigned the internal Risk Management Regulations concerning forward exchange contracts, and has applied hedge accounting for part of the forward exchange contracts changing to deferred hedge accounting beginning with the fiscal year under review, in an effort to reflect hedge effectiveness onto the financial statements for more appropriate periodic accounting of profit and loss. Such a change in the accounting policies was the result of realignment of the internal Risk Management Regulations concerning forward exchange contracts beginning with the fiscal year under review. Therefore, it has no impact on the previous fiscal year. As a result of this change, operating income for the fiscal year under review was reduced by 345 million, and recurring profit and income before income taxes and minority interests was reduced by 39 million, respectively, from the amounts they would have been without applying such accounting policies. 2. Change in the depreciation methods Following the amendments to the Corporation Tax Act, the Company, beginning with the fiscal year under review, has changed its depreciation method based on the amended Corporation Tax Act, in respect of property, plant and equipment other than buildings (excluding accompanying facilities) acquired on or after April 1, 2012. As a result of this change, operating income, recurring profit and income before income taxes and minority interests were increased by 183 million, respectively, from the amounts they would have been under the previous methods. [Additional Information] (Application of Accounting Standards for Accounting Changes and Error Corrections) The Company has applied the Accounting Standard for Accounting Changes and Error Corrections (ASBJ Statement No.24, issued on December 4, 2009) and the Guidance on Accounting Standard for Accounting Changes and Error Corrections (ASBJ Guidance No.24, issued on December 4, 2009) for accounting changes and corrections of previous errors which are made on and after the beginning of the fiscal year under review. 13
Notes to the Non-Consolidated Balance Sheets 1. Accumulated depreciation of property, plant and equipment 96,493 million 2. Receivables and payables with affiliates Short-term receivables from affiliated companies Long-term receivables from affiliated companies Short-term debt to affiliated companies 3. Contingent liabilities Guarantees of (housing) loans of employees 36,537 million 1,398 million 8,412 million 216 million 4. Commitment line contract The Company maintains commitment line contracts with nine financial institutions in order to allow the efficient procurement of working capital. The balances of loans, etc. in the balance sheet date was as follows: Total commitments Commitments used Commitments unused 40,000 million 40,000 million Notes to the Non-Consolidated Statements of Income 1. The components of revenues The components of revenues were as follow. Sales of merchandise and finished goods 366,086 million Other operating income 16,012 million 2. Transactions with affiliates Net sales to affiliates Purchase from affiliates Supply of raw materials to affiliates for a fee Non-operating transactions with affiliates 4,801 million 117,976 million 83,046 million 2,551 million Notes to the Non-Consolidated Statement of Changes in Net Assets Type and number of treasury s as of December 31, 2012 15,440,438 s Notes to the Tax Effect Accounting The major components of the deferred tax assets are prepaid expenses for tax purposes and unrecognized reserve for retirement benefits. The major component of the deferred tax liabilities is unrealized gain on securities. Notes to the Leased Noncurrent Assets Other than the noncurrent assets recorded on the balance sheet, certain office equipment is leased under financial leases other than those that are deemed to transfer the ownership of the leased property. 14
Transaction with the Related Parties 1. Subsidiaries and affiliated companies Attribute Name of company Rate of ownership of voting Relationship Transaction Amount of transaction (*) Account Ending balance (*) Subsidiary Chugai Pharma Manufacturing Co., Ltd. Directly owned 100.0% Contract manufacturing of pharmaceuticals Sharing of directors Contract manufacturing of pharmaceuticals Supply of pharmaceutical ingredients for a fee Lending of funds Collection of funds Receipt of interest 103,695 Accounts payable 83,046 Payments receivable 21,000 Short-term 28,400 loans 78 (*): Millions of Yen Notes: 1. Amount of transaction is reported net of consumption taxes, while Ending balance is reported including consumption taxes. 2. Guideline of determination for business conditions (1) Business transactions are determined upon consultation in consideration with market value. (2) Interest rate in funds transaction is reasonably determined in consideration with market interest rate. 2. Subsidiaries of parent company 5,666 34,541 Attribute Name of company Rate of ownership of voting Relationship Transaction Amount of transaction (*) Account Ending balance (*) Purchase of pharmaceutical ingredients 84,271 Accounts payable 31,959 Subsidiary of parent company F. Hoffmann-La Roche Ltd. Purchase of ingredients, etc. Sharing of officers Sales of pharmaceuticals Cost-sharing in joint developments (receivable) 32,707 4,991 Accounts receivable Payments receivable 10,494 5,487 Cost-sharing in joint developments (payable) 5,623 Accrued expenses (*): Millions of Yen Notes: 1. Amount of transaction is reported net of consumption taxes. 2. Guideline of determination for business conditions (1) Business transactions are determined as same as general transaction in consideration with market value. (2) With regard to the cost-sharing in joint developments, conditions of the transactions are determined according to the license agreements with F. Hoffmann-La Roche Ltd. and other factors. 6,134 15
3. Corporate officers and major individual holders, etc. Attribute Name of company Rate of ownership of voting Relationship Transaction Amount of transaction (*) Account Ending balance (*) Corporate officer Osamu Nagayama Directly being owned 0.0% Exercise of options Exercise of options 11 (*): Millions of Yen Note: The above refers to the exercise status in the fiscal year under review of the new issued by the resolutions at the Annual General Meeting of Shareholders of the Company for the Business Term ended December 31, 2002 held on June 25, 2003 and for the Business Term ended December 31, 2003 held on March 25, 2004. The column Amount of transaction refers to the amount calculated by multiplying the number of s granted through the exercise of options in the fiscal year under review with the amount paid. Notes to the Per Share Information 1. Net assets per 843.30 2. Net income per 83.97 16