Otsuka : Consolidated Financial Statements for the fiscal year ended December 31, 2021

Consolidated Financial Statements

for the fiscal year ended December 31, 2021

Otsuka Holdings Co., Ltd.

Financial Information

1. Basis of Preparation of Consolidated Financial Statements

The consolidated financial statements of Otsuka Holdings Co., Ltd. (hereinafter referred to as the "Company") are prepared in accordance with International Financial Reporting Standards (hereinafter referred to as "IFRS") pursuant to the provision of Article 93 of the Ordinance on Terminology, Forms, and Preparation Methods of Consolidated Financial Statements (Ordinance of the Ministry of Finance No. 28 of 1976; hereinafter referred to as the "Ordinance on Consolidated Financial Statements").

2. Audit Certification

In accordance with the provision of Article 193-2, paragraph (1) of the Financial Instruments and Exchange Act, the consolidated financial statements for the fiscal year ended December 31, 2021 were audited by KPMG AZSA LLC.

3. Special Effort to Ensure the Appropriateness of Consolidated Financial Statements and Others, and

Development of a System for Preparing Consolidated Financial Statements Appropriately in Accordance with IFRS

The Company has been making special effort to ensure the appropriateness of consolidated financial statements and others, and developing a system for preparing consolidated financial statements and others appropriately in accordance with IFRS. The details are as follows:

• (1) In order to develop a system that ensures a proper understanding of the contents of accounting standards, etc. and an adequate response to changes in accounting standards and others, the Company has joined the Financial Accounting Standards Foundation, regularly provides internal training, subscribes to professional journals published by the Japanese Institute of Certified Public Accountants, attends seminars hosted by the Financial Accounting Standards Foundation and auditing firms, etc., and makes other efforts.

• (2) With regard to application of IFRS, the Company keeps up on accounting standards by obtaining press releases and standards published by the International Accounting Standards Board. In addition, the Company has developed the group's accounting policies and accounting guidelines in accordance with IFRS and practices accounting procedures based on these policies and guidelines to prepare appropriate consolidated financial statements in accordance with IFRS.

1.

Consolidated Financial Statements (1) Consolidated Financial Statements

(i) Consolidated Statements of Financial Position

Assets

Current assets

Cash and cash equivalents Trade and other receivables Inventories

Income taxes receivable Other financial assets Other current assets

Subtotal Assets held for sale Total current assets Non-current assets

Property, plant and equipment Goodwill

Intangible assets

Investments accounted for using the equity method Other financial assets

Deferred tax assets Other non-current assets Total non-current assets Total assets

FY2020

Note

(As of December 31, 2020)

(Millions of yen)

FY2021

(As of December 31, 2021)

• 6, 33

  356,851 410,684

• 7, 33 8

379,107 380,191

173,827 180,350

3,283 8,543

9, 33 10

44,920 20,074

44,488 48,036

11

1,002,479 1,247 1,003,727

1,047,880 1,508 1,049,389

12, 20

462,131 487,089

13

262,914 295,735

13

457,192 522,662

15

208,146 227,790

9, 33

187,221 173,956

16

21,531 31,936

10, 23

24,941 32,355

1,624,079 2,627,807

1,771,526 2,820,915

(Millions of yen)FY2020

Note

(As of December 31, 2020)

FY2021

(As of December 31, 2021)Liabilities and equity

Liabilities

Current liabilities

Trade and other payables Bonds and borrowings Lease liabilities

Other financial liabilities Income taxes payable Provisions

Contract liabilities Other current liabilities

Subtotal

Liabilities directly associated with assets held for sale

Total current liabilities

Non-current liabilities

Bonds and borrowings

Lease liabilities

Other financial liabilities

Net defined benefit liabilities

Provisions

Contract liabilities

Deferred tax liabilities

Other non-current liabilities

Total non-current liabilities

Total liabilities

Equity

Equity attributable to owners of the Company

Share capital

Capital surplus Treasury shares Retained earnings

Other components of equity

Total equity attributable to owners of the Company

Non-controlling interests

Total equity

Total liabilities and equity

17, 33

164,950 170,103

18, 33 20

28,690 32,877

15,511 17,096

19, 33

1,987 1,988

14,744 10,490

22 25 21

- 9,542

12,644 12,458

177,350 213,302

11

415,878 334 416,213

467,859 50 467,910

• 18, 33

  124,564 102,754

  20

  57,314 59,726

• 19, 33

16,737 24,815

23

16,724 14,075

22

904 1,358

25

69,164 57,771

16

25,457 27,560

21

17,294 19,753

328,161 744,374

307,815 775,725

24

81,690 81,690

24

506,295 506,724

24

(45,781)

24

1,402,644

24

(92,474)

1,852,375

31,057

1,883,432

2,627,807

(45,572)

1,482,197

(14,046)

2,010,994

34,195

2,045,189

2,820,915

(ii) Consolidated Statements of Income

(Millions of yen)FY2020 (Fiscal year ended December 31, 2020)

FY2021

Note

(Fiscal year ended December 31, 2021)

Revenue Cost of sales Gross profit

5, 25 26

1,422,826

1,498,276

(439,749) 983,076

(495,030) 1,003,245

Selling, general and administrative expenses

Share of profit of investments accounted for using the equity method

Research and development expenses Impairment losses

Other income Other expenses Operating profit

22, 26

(562,434)

(622,326)

15

13,087

8,508

26

(216,841) (232,299)

14

(26,110) (6,479)

28

27

11,436 (3,631)

11,348 (7,499)

198,582 154,497

Finance income Finance expenses Profit before tax Income tax expenses Profit for the yearAttributable to:

Owners of the Company Non-controlling interestsEarnings per share:

Basic earnings per share (Yen) Diluted earnings per share (Yen)

29 29

3,661 13,981

16

(12,256) 189,988 (38,254) 151,733

(4,840) 163,638 (34,429) 129,209

31 31

148,137 125,463

3,596 3,745

273.15 231.32

272.35 231.15