2 0 1 4ANNUAL REPORTFiscal Year ended March 31, 2015

* Disclaimer:

Please note that the consolidated financial statements presented in English are a translated summary of

audited consolidated financial statements presented in Japanese. Translations of the consolidated financial

statements and the related information have NOT been audited by PricewaterhouseCoopers Aarata, the

Company’s accounting auditor. The Company provides this translation for reference and convenience

purposes only, without any warranty as to its accuracy or otherwise. In the event of any discrepancy

between the translation and the Japanese original, the latter shall prevail. In no event shall the Company be

liable for damages of any nature, including but not limited to, direct, indirect, special, punitive,

consequential or incidental damages arising from or in connection with this translation. The final decision

and responsibility for investments rests solely with the reader of this document.

* Forward-Looking Statements:

The performance forecast provided in this document is prepared by the management based on currently

available information and various hypotheses and ideas including significant risks or uncertainties. Please

be aware that the actual performance may turn out to be different from the forecast as a result of various

contributing factors. Factors affecting the performance include, among others, aggravation of the economic

situation, fluctuation of the exchange rate, change of regulatory, statutory, and administrative requirements,

delayed launch of new products, pressures from the product strategies of competitive companies, and

decline of the sales potential of existing products.

* Published: October 31, 2015

Table of Contents

Page Contents

1 I. Message from the President

3 II. Financial Highlights

4 III. Corporate Philosophy and Management Policy

5 IV. Corporate Outlook

7 V. Principal Subsidiaries

8 VI. Business Report

13 VII. Research and Development Activities

13 VIII. Measures Relating to the Environment and Quality

14 IX. Dividend Policy

15 X. Medium-term Management Strategy

17 XI. Risk Factors Relating to the Group and its Business etc.

20 XII. Corporate Governance Information

29 XIII. Directors and Executive Officers

32 XIV. Consolidated Financial Highlights

33 XV. Consolidated Financial Statements

41 XVI. Segment Information

46 XVII. Notes to Consolidated Financial Statement

56 XVIII. Stock Information

57 XIX. History

60 XX. Corporate Data

1

I. Message from the President

The Miraca Group provides products and services to the health

care sector primarily focusing on clinical diagnostics and

laboratory testing under our corporate philosophy. We contribute

to creating a healthy and prosperous society and promoting global

healthcare by providing innovative and value-added products and

services.

The environment surrounding healthcare has changed significantly

in recent years. Necessity to control medical costs are rising in

most developed countries as aging population progresses, and our

business climate continues to remain challenging. On the other

hand, advances in medical technology have opened the door to

new tests and methods such as companion diagnostics which

significantly improve the quality of medical care and expand

demand for our products and services. Moreover, clinical testing is

expected to grow in emerging countries as their medical needs increase at a fast pace.

These circumstances have notably changed the context of clinical testing in medical care. Clinical testing is

anticipated on enhancement of quality and efficiency in medical care. Today, clinical testing plays an important

role not only in diagnosis of disease and determination of therapeutic efficacy but also disease prevention.

We will continue our journey to become a true global life science company. Each business will accelerate the

business expansion in line with our customer needs, and will continue to make robust investment in the R&D as

well as structural reform to improve operational efficiency.

Next, I will profile our financial results for FY2014 (April 1, 2014 to March 31, 2015).

With respect to the Japanese economy during the consolidated fiscal year under review, share prices gained and

business conditions rebounded against a backdrop of intensifying corporate activity across a wide range of

sectors. This positive momentum was attributable to a combination of factors, which included an upswing in

corporate performance primarily among exporters thanks to the weakening yen, improvement in consumer

spending over the second half of the year after having softened previously due to the consumption tax hike

initiated in April 2014, and a diminishing rate of price increases due to falling crude oil prices. Meanwhile, the

business environment surrounding the healthcare industry appears to have stabilized from the second half of the

year, despite a brief period where medical institutions and patients were adversely affected by April’s

consumption tax hike and revised reimbursement fees for medical services. Nevertheless, calls for curbing

medical expenditures and streamlining healthcare services are likely to escalate given the future outlook of a

growing population of elderly people and increasing fees for medical treatment. Particularly in the field of

laboratory testing, competition in Japan continues to intensify and pressure from customers to reduce fees

2

persists. We must transform into a company that is able to reform its structure of operations to survive in a

climate of lower prices and create new added value.

Amid this environment, in the consolidated fiscal year under review Miraca Group generated a lower rate of

growth than initially forecasted, but still secured gains in revenues and income, with net sales up by 0.6% and

operating income up by 1.1% from the previous fiscal year.

In the in vitro diagnostics business, net sales remained on par with previous year levels in a situation where an

increase in overseas sales substantially offset a decrease in domestic sales. Overseas sales increased under

factors such as firm growth in supplying raw materials and Lumipulse products overseas as well as the positive

effect of currency exchange due to the weakening yen, while sales in Japan decreased substantially due to a

negative effect from factors that included recoiling demand following on the earlier pre-tax-hike surge in

spending, along with moves to halt sales of low-margin products. Operating income marked a substantial

increase of 14.5% due to better profitability from domestic operations and increased sales overseas.

The clinical laboratory testing business generated a slight increase in net sales, in a similar situation where

growth in overseas sales absorbed a downturn in sales domestically, which partially stemmed from the adverse

effect of price decline. However, operating income decreased by 6.7% because the gain in overseas income

wasn’t substantial enough to offset the domestic downturn in earnings resulting from lower sales.

The healthcare related businesses overall generated higher net sales but lower operating income, up 1.2% and

down 10.8%, respectively, under a situation where although the sterilizing business maintained higher revenues

and earnings, the clinical trials support business underperformed with sales and operating income lower by 5.0%

and 37.5%, respectively.

Although FY2014 was the initial year of the 4th Medium-term Business Plan (FY2014 through FY2017), major

challenges remain with respect to achieving future growth, particularly given performance this year where results

from our overseas operations ended up covering the slump domestically. While we aim to once again focus on

returning to a growth trajectory with domestic net sales in FY2015, the second year of the medium-term business

plan, we also intend to take steps toward further enhancing our competitive strengths and streamlining operations

taking advantage of introducing new IT system in the clinical laboratory testing business, in conjunction with

efforts to transform our structure of operations to address changes in the business environment.

Everyone on our management team is prepared to do his or her utmost to ensure that we make further progress

toward generating growth, and as such we look forward to the continued steadfast support and cooperation of our

shareholders going forward.

Hiromasa Suzuki, Ph.D.

President & CEO

Miraca Holdings Inc.

3

II. Financial Highlights

Notes: Each fiscal period is as follows; FY2010 is a one-year period ended on March 31, 2011. FY2011 is a one-year period ended on March 31, 2012. FY2012 is a one-year period ended on March 31, 2013. FY2013 is a one-year period ended on March 31, 2014. FY2014 is a one-year period ended on March 31, 2015.

165,736 175,388

192,211 203,371 204,667

0

50,000

100,000

150,000

200,000

250,000

FY2010 FY2011 FY2012 FY2013 FY2014

Net Sales(Million yen)

21,326 23,216

25,598 26,727 27,012

0

5,000

10,000

15,000

20,000

25,000

30,000

FY2010 FY2011 FY2012 FY2013 FY2014

Operating Income(Million yen)

5,320

6,167 6,087 6,244 6,140

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY2010 FY2011 FY2012 FY2013 FY2014

Number of Permanent Employees(Person)

4,521 4,924 5,077

5,412 5,384

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FY2010 FY2011 FY2012 FY2013 FY2014

R&D Expenses(Million yen)

9,477

8,153 7,698

11,660

14,916

0

3,000

6,000

9,000

12,000

15,000

FY2010 FY2011 FY2012 FY2013 FY2014

Capital Expenditure(Million yen)

10,010 10,755 11,010 10,899 11,203

0

3,000

6,000

9,000

12,000

15,000

FY2010 FY2011 FY2012 FY2013 FY2014

Depreciation & Amortization(Million yen)

4

III. Corporate Philosophy and Management Policy

Corporate Philosophy

Miraca Group contributes to creating a healthy and prosperous society and promoting global healthcare

through the provision of novel, value-added products and services.

Management Policy

1. We place top priority on meeting our customers’ needs and providing them with highly reliable products,

information and services.

2. We strive to protect the environment and maintain good relationships with local communities.

3. We encourage our employees to develop their individual talents and expertise by providing a challenging

and rewarding workplace environment that ensures equal employment opportunities and fair performance

evaluations.

4. We endeavor to live up to the trust of our shareholders through soundness and integrity of management.

5

IV. Corporate Outlook

Miraca Group (the “Group”), which consists of the pure holding company Miraca Holdings Inc. (the

“Company”), Fujirebio Inc., SRL Inc., and their respective subsidiaries and affiliated companies, engages in the

manufacture and sales of clinical diagnostic products, clinical laboratory testing services and businesses related

to healthcare.

A description of Miraca Group’s areas of business and the position of the respective companies in those areas of

business are as follows.

[In Vitro Diagnostics]

In Japan, Fujirebio Inc. engages in the manufacture and sales of in vitro diagnostic reagents and assay

instruments, and makes sales to medical institutions, clinical laboratory testing companies, and other such

enterprises through its network of domestic and overseas distributors and the Company’s subsidiaries.

Globally (excluding Japan), Fujirebio Diagnostics, Inc. mainly sells raw materials such as cancer-associated

antigens and antibodies to diagnostics companies in various countries worldwide. Fujirebio America, Inc. is a

holding company that controls all of the stocks of Fujirebio Diagnostics, Inc. Meanwhile, Fujirebio Europe

N.V. develops and manufactures diagnostic products for the areas such as infectious diseases and genetic

disorders. It also receives supplies of products from Fujirebio Inc., and sells worldwide through marketing

subsidiaries located mainly in Europe.

TFB, Inc. was merged with Fujirebio Inc. on April 1, 2014.

[Clinical Laboratory Testing]

In Japan, SRL, Inc. contracts with medical institutions, primarily large hospitals, in providing clinical

laboratory testing services with focus on esoteric testing segment. SRL also offers general testing and esoteric

testing services to local small- and medium-sized hospitals and clinics. Japan Clinical Laboratories, Inc.,

HOKUSHIN Clinical Laboratory, Inc. and GUNMA Clinical-Laboratory Information Center Inc. perform

general testing and esoteric testing services under contract from regional small- and medium-sized hospitals

and clinics.

In the U.S., Miraca Life Sciences, Inc. provides anatomic pathology testing services and other related services

nationwide, while CDx Holdings, Inc. acts as a holding company that possesses all of the stock of Miraca

Life Sciences, Inc. Baylor Miraca Genetics Laboratories, LLC is an equity-method affiliate that provides

genetic testing services primarily in the U.S. Meanwhile, Miraca USA, Inc. is a holding company that

controls all of the stock of CDx Holdings, Inc. and a portion of the stock of Baylor Miraca Genetics

Laboratories, LLC.

On February 2, 2015, through its U.S. intermediate holding company Miraca USA, Inc., the Company

completed the acquisition from Baylor College of Medicine (the “BCM,” President & CEO: Dr. Paul

Klotman, headquarters: TX, USA) of a 60% stake in clinical laboratory genetic testing company Baylor

Miraca Genetics Laboratories, LLC, which was established upon the transfer by BCM of the business of

Medical Genetics Laboratories, a business unit that engages in the clinical laboratory testing business related

to genetics testing in BCM.

6

[Healthcare Related]

Sterilizing business

NIHON STERY CO., LTD. provides services that mainly involve retrieving used medical and surgical

instruments from large hospitals, cleaning, disinfecting and sterilizing them, and supplying sterilized

instruments to respective medical departments.

Clinical trials support business

SRL Medisearch Inc. handles clinical trial testing under contract and provides support services for

pharmaceutical research and development.

In addition to the aforementioned, in the healthcare related area we provide support for establishing and

managing clinics and engage in rental and sales of nursing-care equipment and supplies.

While the Group as described above engages in core business in the realm of clinical testing, each Group

company operates organically maintaining complementary relationships.

7

V. Principal Subsidiaries

Company name Address Capital stock Voting rights or

ownership (%)

Relationship with Miraca Holdings

No. of

concurrently

serving

directors

Financial

assistance

Business

transactions

Leasing of

fixed assets

In Vitro Diagnostics

Fujirebio Inc. Shinjuku-ku,

Tokyo

Millions of yen

4,252 100.00 3 Yes Yes Yes

Fujirebio America, Inc. USA

Thousands of

US$

–

100.00

(100.00) 2 None None None

Fujirebio Diagnostics, Inc. USA

Thousands of

US$

0

100.00

(100.00) 1 None None None

Fujirebio Diagnostics AB Sweden

Thousands of

SEK

641

100.00

(100.00) – None None None

Fujirebio Europe N.V. Belgium

Thousands of

EUR

64,398

100.00

(100.00) 2 None Yes Yes

GENimmune N.V. Belgium

Thousands of

EUR

11,670

100.00

(100.00) – None None None

Fujirebio Taiwan Inc. Taiwan

Thousands of

NT$

119,900

100.00

(100.00) – None None None

Clinical Laboratory Testing

SRL, Inc. Shinjuku-ku,

Tokyo

Millions of yen

11,027 100.00 5 None Yes Yes

Japan Clinical Laboratories,

Inc.

Kumiyama-cho,

Kuse-gun, Kyoto

Millions of yen

80

100.00

(100.00) 1 None None Yes

HOKUSHIN Clinical

Laboratory, Inc.

Nagano-shi,

Nagano

Millions of yen

130

100.00

(100.00) – None None Yes

GUNMA

Clinical-Laboratory

Information Center, Inc.

Maebashi-shi,

Gunma

Millions of yen

10

100.00

(100.00) – None None None

Miraca USA, Inc. USA

Thousands of

US$

0

100.00 2 Yes Yes None

CDx Holdings, Inc. USA

Thousands of

US$

0

100.00

(100.00) 1 None None None

Miraca Life Sciences, Inc. USA

Thousands of

US$

0

100.00

(100.00) 1 None None None

Miraca Life Sciences

Holdings, Inc. USA

Thousands of

US$

0

100.00

(100.00) 1 None None None

Lakewood Pathology

Associates, Inc. USA

Thousands of

US$

0

100.00

(100.00) 1 None None None

Healthcare Related

NIHON STERY CO., LTD. Chiyoda-ku,

Tokyo

Millions of yen

240

100.00

(100.00) – None Yes Yes

SRL Medisearch Inc. Shinjuku-ku,

Tokyo

Millions of yen

150

100.00

(100.00) – None Yes Yes

Care’x Inc. Chiyoda-ku,

Tokyo

Millions of yen

450

100.00

(100.00) – None None Yes

17 other companies

8

VI. Business Report

1. Matters regarding current status of corporate group

(1) Business progress and its results

In the fiscal year ended March 31, 2015, the global economy overall held to a modest growth trajectory with

recovery unfolding in the U.S. economy, despite a continued slowdown in growth of emerging nations.

In Japan, despite improvement in corporate earnings primarily among overseas demand-driven companies,

economic recovery lagged overall as only a slight rebound in personal consumption was seen in the wake

of the previous drop in spending due to Japan’s consumption tax hike.

In the clinical diagnostics and laboratory testing sector, the business environment continues to pose

challenges, reflecting persisting downward pressure on prices and intensifying competition with sector

peer companies.

Under such circumstances, the Group has been proactively implementing various management initiatives

in order to achieve further growth.

On the basis of these results, net sales for the fiscal year under review were 204,667 million yen (up 0.6%

from the previous fiscal year). Despite a downturn in revenues in the clinical laboratory testing business in

Japan due in part to decline in testing price, revenues increased as a consequence of factors that included

the weakening yen and the October 2013 move to take an ownership stake in U.S.-based pathology testing

service provider Lakewood Pathology Associates, Inc. (d/b/a PLUS Diagnostics), thereby making it a

Group subsidiary. With respect to income, gains were fueled by the increase in revenue along with a

positive impact brought about by changes to the product mix in the in vitro diagnostics business. As a

result, operating income was 27,012 million yen (up 1.1% from the previous fiscal year), ordinary income

was 26,566 million yen (down 2.0% from the previous fiscal year), and net income was 16,002 million yen

(up 4.4% from the previous fiscal year).

On February 2, 2015, through its U.S. intermediate holding company Miraca USA, Inc., the Company

completed the acquisition from Baylor College of Medicine (the “BCM,” President & CEO: Dr. Paul

Klotman, headquarters: Texas, USA) of a 60% stake in clinical laboratory genetic testing company Baylor

Miraca Genetics Laboratories, LLC, which was established upon the transfer by BCM of the business of

Medical Genetics Laboratories, a business unit that engages in the clinical laboratory testing business

related to genetics testing in BCM. The joint venture, Baylor Miraca Genetics Laboratories, LLC, became

an equity-method affiliate of the Company.

An overview of each business segment is as follows.

(millions of yen) Year-on-Year Change

Net Sales 204,667 0.6%

Operating Income 27,012 1.1%

Ordinary Income 26,566 (2.0%)

Net Income 16,002 4.4%

9

[In Vitro Diagnostics]

Net sales remained roughly on par with previous fiscal year

results due to an increase in overseas sales and the effect of the

weakening yen, despite a phase of adjustment in product

inventories for distribution due to consumption tax hike in Japan.

Meanwhile, income increased mainly due to a positive impact

from changes to the product mix.

As a result, net sales amounted to 43,455 million yen (down

0.0% from the previous fiscal year), and operating income was

10,423 million yen (up 14.5% from the previous fiscal year).

[Clinical Laboratory Testing]

Revenues increased as a result largely of having made

Lakewood Pathology Associates, Inc. (d/b/a PLUS Diagnostics)

in the U.S. a subsidiary in October 2013, despite a downturn in

prices for laboratory testing and other such factors causing

lower revenues from operations in Japan. Income decreased as a

consequence of the earnings gains achieved by subsidiaries in

the U.S. failing to make up for lower earnings in Japan mainly

attributable to the downturn in prices for testing performed by

domestic businesses.

As a result, net sales were 132,853 million yen (up 0.7% from the previous fiscal year), and operating

income was 13,488 million yen (down 6.7% from the previous fiscal year).

[Healthcare Related]

In the sterilizing business, net sales were 16,976 million yen (up

7.5% from the previous fiscal year) as a result of our continuous

efforts to acquire new customers.

In the clinical trials support business, net sales were 5,225

million yen (down 5.0% from the previous fiscal year). The

lower figure was a consequence of delays faced in launching

some trials despite our ongoing efforts to win new business.

As a result, net sales of the healthcare related business were

28,358 million yen (up 1.2% from the previous fiscal year) and

operating income was 2,930 million yen (down 10.8% from the previous fiscal year).

26,879

28,013 28,358

2,927 3,284

2,930

FY2012 FY2013 FY2014

Healthcare Related

Net sales Operating income (Million yen)

124,236 131,890 132,853

13,312 14,464

13,488

FY2012 FY2013 FY2014

Clinical Laboratory Testing

Net sales Operating income (Million yen)

41,095

43,467 43,455

9,372 9,10610,423

FY2012 FY2013 FY2014

In Vitro Diagnostics

Net sales Operating income (Million yen)

10

2. Analysis of financial position, operating results and cash flow

(1) Analysis of operating results for the fiscal year ended March 31, 2015

1) Net sales

Net sales increased by 1,296 million yen year on year to 204,667 million yen.

The increase is attributable to the weakening yen and our move to make U.S.-based pathology testing

services provider Lakewood Pathology Associates, Inc. (d/b/a PLUS Diagnostics) a subsidiary in

October 2013, despite a downturn in revenues in the clinical laboratory testing business in Japan due in

part to decline in testing price.

2) Cost of sales, selling, general and administrative expenses

Cost of sales amounted to 124,272 million yen and the cost-to-sales ratio was 60.7%, thereby increasing

year on year by 3,592 million yen and 1.4 percentage points, respectively.

Selling, general and administrative expenses (SG&A) were 53,382 million yen and SG&A as a

percentage of net sales was 26.1%, thereby decreasing year on year by 2,581 million yen and 1.5

percentage points, respectively.

Research & development expenses were 5,384 million yen and R&D as a percentage of net sales was

2.6%, thereby decreasing year on year by 28 million yen and 0.1 percentage point, respectively. Going

forward, we will continue to effectively carry out R&D, taking consolidated corporate earnings into

account.

3) Operating income

Operating income was 27,012 million yen and operating income as a percentage of net sales was 13.2%,

thereby increasing year on year by 285 million yen and 0.1 percentage point, respectively.

4) Non-operating income, non-operating expenses

Non-operating income increased by 296 million yen year on year to 1,349 million yen largely due to

foreign exchange gains and dividend income of insurance.

Non-operating expenses increased by 1,135 million yen year on year to 1,796 million yen largely due to

higher advisory fees and interest expenses.

5) Extraordinary income, extraordinary losses

Extraordinary income increased by 1,572 million yen year on year to 1,642 million yen largely due to

gains on sales of non-current assets.

Extraordinary losses increased by 2,819 million yen year on year to 3,877 million yen largely due to

impairment losses and business structure improvement expenses.

6) Net income

Net income increased by 679 million yen year on year to 16,002 million yen due to a 34.2% effective

tax rate after application of tax-effect accounting.

(2) Analysis of financial position and liquidity

1) Assets, liabilities and net assets

Total assets as of the end of the fiscal year under review increased by 20,044 million yen from the end

11

of the previous fiscal year to 262,203 million yen. This was largely attributable to respective increases

in investment securities of 14,820 million yen, goodwill of 3,681 million yen, other intangible assets of

2,380 million yen, customer-related intangible assets of 2,311 million yen, construction in progress of

2,089 million yen, cash and deposits of 1,616 million yen, notes and accounts receivable – trade of

1,609 million yen, and other current assets of 1,067 million yen, which were partially offset by a

decrease in securities of 10,000 million yen.

Total liabilities increased by 5,540 million yen from the end of the previous fiscal year to 90,351

million yen. This is largely attributable to respective increases in long-term loans payable of 4,150

million yen, other current liabilities of 2,182 million yen, and the current portion of long-term loans

payable of 1,750 million yen, which were partially offset by a decrease in net defined benefit liability of

2,322 million yen.

Total net assets increased by 14,503 million yen from the end of the previous fiscal year to 171,851

million yen. This is largely attributable to net income amounting to 16,002 million yen along with an

increase in foreign currency translation adjustment of 12,408 million yen, and partially offset by

purchase of treasury shares amounting to 10,016 million yen and payment of dividends amounting to

5,226 million yen. Consequently, the equity ratio increased by 0.6% from the end of the previous fiscal

year to 65.5%.

2) Cash flows

Cash and cash equivalents (the “cash”) at the end of the fiscal year under review decreased by 8,382

million yen from the end of the previous fiscal year to 27,288 million yen.

Cash flows and factors affecting cash flows are discussed below.

Cash flows from operating activities

Net cash provided by operating activities during the fiscal year under review amounted to 29,261

million yen, up 1.9% from the previous fiscal year. The main contributing factors included income

before income taxes and minority interests of 24,331 million yen, and the non-cash expense items,

depreciation of 11,203 million yen, amortization of goodwill of 4,039 million yen and impairment

loss of 2,596 million yen, against income taxes paid of 12,015 million yen.

Cash flows from investing activities

Net cash used in investing activities during the fiscal year under review amounted to 27,874

million yen, up 62.5% from the previous fiscal year. The main contributing factors included

purchase of investment securities of 15,967 million yen, purchase of property, plant and equipment

of 7,122 million yen and purchase of intangible assets of 6,829 million yen, against proceeds from

sales of property, plant and equipment of 2,370 million yen.

Cash flows from financing activities

Net cash used in financing activities during the fiscal year under review amounted to 9,980 million

yen, up 2.9% from the previous fiscal year. The main contributing factors included proceeds from

long-term loans payable of 10,150 million yen, against payments of money held in trust for

purchase of treasury shares of 10,018 million yen, cash dividends paid of 5,220 million yen, and

repayments of long-term loans payable of 4,250 million yen.

12

3) Funding requirements

We appropriate funds for M&As, R&D, capital expenditure, working capital, redemption of bonds,

repayment of loans payable, payment of interest pertaining to such redemptions and repayments,

dividend payments, payment of corporate income tax and other such purposes. We believe that we will

be able to procure funds as needed for the Group to achieve growth, through ongoing efforts to maintain

the Group’s financial health and by generating suitable cash flows from our operating activities. During

the fiscal year under review, the Group procured 10,000 million yen as long-term loans payable through

financial institutions for use in funding acquisition of equity in Baylor Miraca Genetics Laboratories,

LLC.

4) Interest-bearing liabilities

Interest bearing liabilities amounted to 34,395 million yen at the end of the fiscal year under review.

This mainly consists of 12,150 million yen in long-term loans payable, 10,000 million yen in bonds

payable, 6,000 million yen in the current portion of long-term loans payable and 4,135 million yen in

long-term lease obligations.

3. Overview of capital expenditures

During the fiscal year under review, the Group incurred capital expenditure of 14,916 million yen to support

ongoing capital investment geared toward strengthening and streamlining its business foundations while also

investing funds to heighten labor efficiency and rationalize operations. The Group’s capital expenditure also

included purchases of property, plant and equipment, as well as software and other systems-related

investment.

In the in vitro diagnostics business, capital investment amounted to 2,798 million yen, with such funds put to

use in areas such as upgrading research facilities and also constructing and overhauling manufacturing

facilities.

In the clinical laboratory testing business, capital investment amounted to 10,502 million yen, with such

funds put to use in areas that include investing for newly contracted facilities in in-hospital laboratories

management business and establishing information systems for testing facilities.

In the healthcare related business and the company overall (combined), capital investment amounted to 1,615

million yen.

During the fiscal year under review, there were no material transactions related to the retirement or sale etc. of

facilities.

13

VII. Research and Development Activities

The Group is working to develop new technologies and improve existing ones through efforts that include

mutual exchanges of information and joint R&D between Group companies, and also active engagement in joint

R&D with private enterprises, research institutions and other entities outside of the Group.

In the in vitro diagnostics business, we have been actively pursuing development and addressing regulatory

affairs matters for the global sales of our Lumipulse products. For the fiscal year ended March 31, 2015, we

launched the following test reagents; 6 analytes of Lumipulse reagents for the hepatitis B virus and the

Lumipulse E2-III in Europe, the Lumipulse PIVKA-II and the Lumipulse TP-N in Taiwan, and the Lumipulse

Progesterone-N, the Lumipulse whole PTH, the Lumipulse free PSA, and the AU-Synchron HbA1c in Japan

In Japan and Europe, we also launched the Lumipulse G600 II, an automated small assay instruments tailored to

small- and medium-sized hospitals. Research & development expenses in the in vitro diagnostics business

amounted to 4,914 million yen for the fiscal year.

In the clinical laboratory testing business, we have been providing new services such as AICS (AminoIndex

Cancer Screening) testing and companion diagnostics in the area of cancer treatment, while also forging ahead

with medium- to long-term plans for technological development of next-generation test platforms for genome

analysis using next-generation sequencers, genetic analysis of circulating tumor cells, and epigenome analysis.

Research & development expenses in the clinical laboratory testing business amounted to 469 million yen for the

fiscal year.

Accordingly, total research & development expenses for the Group for the fiscal year under review amounted to

5,384 million yen.

VIII. Measures Relating to the Environment and Quality

The Group is committed to doing its utmost efforts to preserve and improve the environment. The Group is

working towards coexistence with the natural environment and its local communities. To foster the growth of its

relationship with its customers, the Group has made efforts to attain ISO 14001 certification. It has also run a

host of environmental programs and campaigns.

Fujirebio Inc. has achieved ISO 9001, ISO 13485 and CE mark certification as well as the improvement of its

quality management system, in terms of quality control.

Meanwhile, SRL, Inc. has been certified the clinical laboratory accreditation from the Japan Accreditation

Board (JAB) (ISO 15189) and the College of American Pathologists (CAP). In order to provide higher level of

services that give a sense of security to customers, SRL implements ongoing improvements in its quality control

practices.

14

IX. Dividend Policy

The Company regards the return of profits to shareholders as a key management priority. As such, we maintain a

basic policy of paying consistent dividends on an ongoing basis, with emphasis on the consolidated dividend

payout ratio while also considering the Company’s overall medium- to long-term performance and its financial

outlook.

The Company’s basic policy on paying dividends of surplus is to make such payment twice each fiscal year in

the form of an interim dividend and a year-end dividend. Moreover, the Company’s Articles of Incorporation

stipulate that the Company may, by resolution of the Board of Directors, pay out dividends of surplus pursuant to

Article 459, Paragraph 1 of the Companies Act.

The Company’s internal reserves will be channeled to business investment geared toward mid- to long-term

growth, mainly with the aim of R&D and strengthening and upgrading the foundations of our business.

The total dividend for the fiscal year under review is 92 yen per share, which consists of a year-end dividend of

46 yen per share as approved by the Board of Directors at its meeting held on May 22, 2015, combined with an

interim dividend of 46 yen per share.

Dividends for the fiscal year under review are as follows.

Resolution date Total dividend payments

(millions of yen)

Dividends per share

(yen)

October 31, 2014

at the Board of Directors meeting 2,702 46

May 22, 2015

at the Board of Directors meeting 2,616 46

15

X. Medium-term Management Strategy

In May 2014, the Company set a future ten-year vision with the aim of further strengthening our domestic and

international competitive power as well as to accelerate the expansion of our overseas business.

The Ten-Year Vision of the Miraca Group

• Consolidated Net Sales: approximately 500 billion yen

• Ratio of Net Sales Overseas: approximately 50%

This ten-year vision is envisioned to be accomplished by the combination of organic growth of each existing

business division and strategic acquisitions of companies or assets.

In May 2014, the Company established the 4th Medium-term Business Plan of the Group as the phase of

establishment of robust business foundations toward this ten-year vision. The Group will take following

direction in order to realize sustainable organic growth in the market: (1) expansion through competitive

execution; (2) creation of new products and services; and (3) full scale entry into the global market.

The outline of the 4th Medium-term Business Plan is as follows:

i) In Vitro Diagnostics

• Geographical Expansion of Lumipulse Business

The Group aims to accelerate market development of Lumipulse business in the European and Asian

markets by achieving product differentiation through markers such as Vitamin D. In addition, the Group

plans to enter the U.S. market, the biggest market globally, in the near future. Through these strategies,

the Group intends to improve profitability of its overseas Lumipulse business.

• Establishment of Global Business Foundations

The Group plans to improve foundation to support sustainable growth through establishing a global

framework to promote management, operation (purchasing, production and logistics) and R&D.

• Expansion of Domestic Market Share of Lumipulse Business

The Group intends to expand Lumipulse product lineup and strengthen sales promotion to expand

domestic market share.

• New Business Development

In prospect of future entry into the non-immunology market, the Group plans to strengthen business

development in new business areas and to promote selection and concentration of the existing products

satisfying the market needs.

ii) Clinical Laboratory Testing

• Penetration into the Domestic GP (General Practitioner) Market

To provide clinical testing services that better meet our customers’ needs, the Group continues to

16

strengthen sales force and execute strategic restructuring of laboratory functions (geographical

decentralization). As the result of such effort, the Group aims to further increase market share in the

broader general practitioner market.

• Enhancement of Competitiveness by Introduction of Next-Generation IT System

To enhance convenience of our service to medical institutions and the customers, the Group is

introducing Next-Generation IT System (scheduled to be in full-scale operation in FY2015). We are

convinced that this will significantly improve the efficiency of sample collection and reception,

standardization of testing process, as well as reporting speed and traceability.

• Development of New Testing Services

The Group will make continued effort to outpace competitors in introducing advanced testing services,

such as companion diagnostics (CoDx) and genomic analysis. In addition, the Group will aggressively

seek new business development opportunity with such new testing services.

• Growth of Overseas Business

Miraca Life Sciences, Inc. in the U.S. aims to establish the leading position as a specialized anatomical

pathology testing laboratory in the U.S., through enhancement of competitiveness by scale expansion in

parallel with improvement of its cost structure. Furthermore, in the emerging countries, the Group

intends to promote geographical expansion of clinical laboratory testing business by making a full-scale

entry into the Asian markets based on our know-how cultivated in Japan and the U.S.

iii) Healthcare Related

As to our sterilizing business, the Group aims to promote geographical expansion and further sales growth

by increasing peripheral service lineup. As to our clinical trial support business, the Group will make

continued effort to expand market share by strengthening the domestic sales activities, as well as, to focus

on acquisition of global clinical trial orders and development of a new market.

iv) Strategic Acquisitions

Following the 3rd Medium-term Business Plan, the Group positions strategic acquisitions as priority

measure for mid-long term growth. The Group intends to utilize the cash flow to be generated by business

growth and improvement of profitability of each existing business segment as a means to promote strategic

acquisitions for further enhancement of competitiveness and business growth, with maintaining a healthy

financial condition.

v) Positive Capital Return Program to Shareholders

The Company aims to make capital return, including dividends mainly, to shareholders positively, with

increasing internal reserves necessary for future changes of business environment and investment for

future growth opportunities including strategic acquisitions and R&D. Based on the fundamental policy

“To increase dividend continuously and stably,” the Company intends to continue a consolidated dividend

payout ratio more than 30%.

17

XI. Risk Factors Relating to the Group and its Business etc. (As of June 30, 2015)

(1) Risk associated with research and development

The Group focuses on efficient and speedy research and development of new products as well as new

technologies. However, in some cases, we are forced to terminate research and development because it fails

to meet the standards on efficacy and safety required for drug approval along the way. As a result, the Group

may not be able to recover the costs incurred, or forced to re-examine the research and development policy.

(2) Risk associated with intellectual property rights

The Group’s products are protected by multiple patents on their materials and manufacturing processes for a

specified period of time. The Group strictly manages the intellectual property rights including patent rights

and always pays close attention to a possible infringement of these rights by others. But when the intellectual

property rights the Group owns are infringed by a third party, the expected revenue may be lost. Also, if the

Group’s product infringes other company’s intellectual property right, the Group may be asked for

compensation.

(3) Impact of changes in market environment

Amid the continuous drastic reform of the healthcare system in Japan, the Group’s business environment is

getting tougher combined with the market competition with other companies. Such changes in the market

environment may affect the market price and have an influence on the Group’s operating results and financial

condition.

(4) Risk associated with legal regulations and others

The Group is subject to the Pharmaceutical and Medical Device Law and the related laws and regulations in

Japan and to legal regulations imposed by FDA and others overseas. When such laws and regulations are

revised or strengthened in the future, it may lead to a restriction on the Group’s business activities or an

increase in business operation costs.

(5) Risk associated with overseas business and exchange fluctuations

The Group has business operations not only in Japan but also overseas such as North America and Europe.

Accordingly, the share of overseas sales in the Company’s consolidated net sales as well as the share of

overseas assets in the consolidated total assets is increasing, leading to increased exposure to exchange rate

fluctuations.

The Company takes certain measures such as forward exchange contracts to mitigate the risk of exchange

fluctuations, but these measures do not avoid the entire risk. So the Company’s operating results, assets and

liabilities, and net assets may be negatively affected by exchange fluctuations.

In addition, when a recession, changes in the political situation, changes in laws or regulations, changes in the

tax system, terrorism or conflicts, spread of infectious diseases or a disaster arise in the countries where the

18

Company has business operations, the Company’s operating results may be negatively affected.

(6) Risk associated with corporate acquisition (M&As), etc.

As one of the strategies for growth, the Group considers and implements M&As in the areas relevant to the

existing businesses, at home and abroad, and aims to improve the corporate value through it.

In implementing M&As, the Group conducts sufficient research and review in advance on the profitability

and investment collectability, but the business acquired may fail to achieve the initial target due to sudden

changes in the business environment or unexpected circumstances after the M&A. In such cases, the Group’s

operating results and financial condition may be negatively affected.

(7) Risk associated with accuracy management

Accuracy management is the most important matter for the Group to maintain the accuracy of testing results.

The Group’s major business companies in clinical laboratory testing business regularly participate in surveys

conducted by public institutions such as the Japan Medical Association and conduct thorough accuracy

management. In addition, the Group focuses on establishing an internal accuracy management system by

obtaining the service mark certification issued by the Association for Promotion of Health Care Service and

ISO 15189 certification.

However, testing accuracy may be lower when appropriate testing could not be conducted due to unforeseen

circumstances, and this may lead to a loss of the Company’s credibility. Consequently, this may affect the

Group’s operating results.

(8) Risk associated with handling information and information systems

The Group holds an enormous volume of confidential information on patients and their testing data, and it is

one of the important management issues to ensure its security and establish a compliance structure with the

Personal Information Protection Act. As part of this effort, SRL, Inc. obtained the PrivacyMark certification

in February 2005. SRL also obtained ISMS and ISO/IEC 27001 certification as security measures for

information systems.

However, if personal information is leaked due to criminal acts, cyber-attack, computer virus, information

system malfunction, human error or any other negative development, the Group’s credibility may fall, and

this may affect the operating results of the Group.

Moreover, the Group utilizes information systems for conducting business. Although the Group strives to

ensure stable operations of such information systems, if a scenario occurs such as large-scale service

suspension, invoicing error, delay in testing report, or loss of data as a consequence of software or hardware

malfunction, human error, disaster, criminal acts, cyber-attack, computer virus, terrorism or any other such

negative development, the Group may lose credibility with respect to its products or services, and this may

affect the operating results of the Group.

19

(9) Risk associated with application of accounting of impairment assets

The Group owns non-current assets consisting of property, plant and equipment and intangible assets

including goodwill.

If the values of these assets fall or if the expected future cash flow cannot be attained, the Group is required to

book impairment loss, and this may negatively affect the operating results and financial condition of the

Group.

(10) Effects of suspension or restriction of business activities due to disaster, accident, etc.

If the Group’s operations are obstructed because its various places of business or medical institutions, which

are the Group’s customers, are struck by a natural disaster such as a large-scale typhoon or earthquake, this

may affect the Group’s operating results. Furthermore, if there is an incident such as an industrial accident or

accident with equipment, causing a restriction or suspension of business activities or similar event, this may

also affect operating results.

20

XII. Corporate Governance Information (As of June 24, 2015)

1. Status of corporate governance

(1) Corporate governance system

a. Overview of corporate governance system and reason for its adoption

The Company fully recognizes the importance of strong and thorough corporate governance, and is

committed to the establishment of a governance structure that encourages greater transparency and

accelerates proper decision-making at all levels of oversight, management and operation.

Therefore, the Company adopted the “Company with Committees” corporate governance system (currently

the “Company with Three Committees”) under the Companies Act on June 27, 2005 and moved to a pure

holding company structure that controls the Group on July 1, 2005.

The Company chose to adopt Company with Three Committees with the aim of achieving clear separation of

oversight and executive functions giving executive officers the authority to make decisions with greater speed

and provide more effective management for the operation of the Group companies. In addition, in accordance

with the Companies Act and the committee system, the Company has established three committees: the

Nominating, Audit and Compensation Committees.

The Board of Directors’ meetings are held at least once a month, and board members receive reports from

each committee and from the executive officers regarding information on current corporate operations and

target management achievements. The Board is thus able to provide timely, comprehensive and pertinent

corporate oversight. Among the ten (10) members of the Board of Directors, the Company appoints seven (7)

as outside directors, each of whom is recognized as a leader in his or her respective field.

b. Status of establishment of the system of internal controls

Based on the following basic policy, the Company has established the system of internal controls.

1) Basic management policy

The Company’s basic policy for corporate management consists of the following corporate philosophy and

management policy.

<Corporate philosophy>

Miraca Group contributes to create a healthy and prosperous society and promotes global healthcare

through the provision of novel, value-added products and services.

<Management policy>

a) We place top priority on meeting our customers’ needs and providing them with highly reliable

products, information and services.

b) We strive to protect the environment and maintain good relationships with local communities.

c) We encourage our employees to develop their individual talents and expertise by providing a

challenging and rewarding workplace environment that ensures equal employment opportunities and

fair performance evaluations.

d) We endeavor to live up to the trust of shareholders through soundness and integrity of management.

2) Code of Conduct

The Company, as a corporate group, has established the Miraca Group Code of Conduct so that all officers

21

and employees of the Group can embody the high ethical standards that they are expected to meet in the

performance of their duties, and ensure that the officers and employees practice it in daily corporate

activities.

3) Matters regarding directors and employees who are assigned to support duties of the Audit Committee

The Company shall establish the Secretariat of the Audit Committee as an organization under the Audit

Committee. Employees who are assigned to support the duties of the Audit Committee belong to the

Secretariat of the Audit Committee.

4) Matters regarding independence of directors and employees in 3) from executive officers

• Employees of the Secretariat of the Audit Committee shall follow instructions of members of the Audit

committee.

• For appointment and reassignment of the employees, treatment such as employee evaluation and transfer

and budget allocation, the Secretariat of the Audit Committee shall give explanations to the Audit

Committee in advance and obtain prior approval.

5) System of reporting from executive officers and employees to the Audit Committee and other systems of

reporting to the Audit Committee

The Audit Committee may have people other than members participate in a meeting as necessary, and ask

them to report on the following items, in addition to items stipulated by laws and regulations.

a) Overview of activities of departments involved in internal control of the Group

b) The Group’s significant accounting policy, accounting standards and changes thereof

c) Details of important disclosure documents

d) Other matters to be reported as stipulated by the Company’s internal rules

6) Other systems to ensure effective audit by the Audit Committee

• Members of the Audit Committee have authorities stipulated in the following items.

a) Authority to request other directors, executive officers, managers and other employees to report

matters regarding execution of their duties

b) Authority to examine the status of the Company’s business operations and assets

c) Authority to request the Company’s subsidiaries or consolidated subsidiaries to report business

operations or to examine the status of business operations and assets of the Company’s subsidiaries

or consolidated subsidiaries as necessary in order to exercise authorities of the Audit Committee

d) Other authorities regarding audit deemed necessary by the Audit Committee within the scope of laws

and regulations

• Directors, executive officers and employees who participate in a meeting of the Audit Committee by a

request from the Committee are required to explain matters requested by the Committee.

• A committee member appointed by the Audit Committee may participate in important meetings of the

Company including the Group companies as necessary.

7) System to ensure appropriate execution of business operations of the stock company and the corporate

group consisting of its parent company and subsidiaries

• To ensure appropriate execution of business operations of the Company’s subsidiaries by conducting

operation and management of the subsidiaries based on the management rules of the subsidiaries and

affiliates as well as the agreement on responsibilities and authorities of the officers of the subsidiaries.

22

• To establish a management structure based on the following rules and ensure appropriate execution of

business operations of the corporate group.

a) The Company and major business subsidiaries shall be covered.

b) The purpose shall be to comply with laws and regulations pertaining to effectiveness and efficiency

of business operations, credibility of financial reporting and business activities.

c) Based on the Risk Management Rules, risk management of the corporate group shall be promoted.

d) A flow chart of major business processes shall be created including those of business subsidiaries to

standardize business operations and conduct adequate risk management.

e) The Internal Audit Department shall conduct an audit on the system of internal controls.

• The Internal Audit Departments of the Group companies shall report and exchange opinions on a regular

basis and hold an audit liaison conference regularly in order to enhance cooperation between the Audit

Committee and auditors of the Group companies.

8) System for storage and management of information on execution of duties by executive officers

Each executive officer shall appropriately store and manage documents and other relevant information

regarding execution of their duties in accordance with the Rules for Management of Documents for

Execution of Duties.

9) Rules for management of risk of loss and other system

Based on the “Risk Management Rules” and “Rules for the Risk Management Committee,” a risk

management system shall be established, and the Risk Management Committee shall promote it to manage

the risk of loss.

10) System to ensure efficient execution of duties by executive officers

• Each executive officer executes duties based on the Rules of Duties of Executive Officers.

• Each executive officer holds discussions and makes a report as necessary at the Board of Executive

Officers’ meeting based on the Rules for the Board of Executive Officers.

11) System to ensure compliance of execution of duties by executive officers and employees with laws and

regulations and the Articles of Incorporation

• While the ethical standards that all the members of the Company are expected to meet were codified in

the Miraca Group Code of Conduct, the Code of Conduct Committee implements necessary measures

based on the Rules for Management of the Code of Conduct Committee to ensure compliance of

execution of duties by executive officers and employees with laws and regulations, the Articles of

Incorporation and the Miraca Group Code of Conduct.

• The Code of Conduct Committee detects illegal activities of the Company at an early stage and

establishes and operates an internal reporting system in order to respond to it.

• The Internal Audit Department conducts internal audits based on the Rules for Internal Audit.

c. Status of the establishment of risk management system

Based on the “Risk Management Rules” and “Rules for the Risk Management Committee,” a Risk

Management Committee has been established. The Company systematically identifies and analyzes risks

posed by corporate activities throughout the entire Group, and where necessary, the Company takes

appropriate responses. At the level of each organizational unit, the risks posed by the major business

23

processes shall be identified, responses shall be taken, and the status shall be reported to the Risk

Management Committee. In addition to this, these risks and associated responses shall become evaluation

targets of the internal control evaluations regularly conducted by the Internal Audit Department.

Furthermore, if an unexpected event occurs, a taskforce shall be established based on the Crisis Response

Rules, and swift response shall be taken.

(2) Status of internal audit and audit by the Audit Committee

The Internal Audit Department (fourteen (14) members of the Company’s Internal Audit Department control the

Internal Audit Departments of each business company) conducts internal audits and assesses internal control

independently on a regular basis based on the Rules for Internal Audit in order to ensure legality, accuracy and

efficiency of management and business operations. The Department reports the audit results and status of

follow-up to the Board of Directors and the Audit Committee through the responsible executive officer.

The Audit Committee consists of four (4) committee members and one (1) secretariat. Each member participates

in major meetings of the Board of Executive Officers, the Disclosure Committee and Risk Management

Committee, holds a regular liaison conference with the Internal Audit Department and the Board of Corporate

Auditors of the relevant business companies and directly conducts audits on the execution of duties as necessary,

and the results are regularly reported to the Board of Directors. The Audit Committee exchanges ideas regularly

with Accounting Auditor by requesting them to explain and report the initial audit plan, status of audits during

the term and results of the year-end audit.

As for internal control, the Company’s Internal Control Management Department (six (6) members) controls the

Internal Control Management Departments of each business company and promotes establishment and

operation of internal control of the Group. The Department also undergoes regular assessment of internal control

by the Internal Audit Department and holds a regular liaison conference, whose details are reported to the Audit

Committee by the Secretariat of the Audit Committee.

(3) Status of accounting audit

Certified public accountants who performed the accounting audit of the Company are Mr. Masahiro Yamada,

Mr. Hiroyuki Sawayama and Mr. Taisuke Shiino. They all belong to PricewaterhouseCoopers Aarata and

perform accounting audits based on mutual collaboration between audits by the Audit Committee and

accounting audits. Assistants for the audit of the financial statements of the Company are six (6) certified public

accountants, two (2) associate members of the Japanese Institute of Certified Public Accountants, and eight (8)

others.

(4) Outside directors

Seven (7) of the Company’s directors are outside directors.

Outside Director Nobumichi Hattori is a professor teaching international corporate strategy at a graduate school

who can give advice to the management of the Company as an independent expert from the viewpoint of

management strategy and business strategy. Considering the above, Mr. Hattori is appropriate as outside director

of the Company.

Outside Director Yasunori Kaneko has expertise and experience as a doctor and his insight into advanced

24

technology in the medical field, which he has cultivated overseas for many years, is an essential factor for the

management of the Company. Considering the above, Mr. Kaneko is appropriate as outside director of the

Company.

Outside Director Hisatsugu Nonaka was involved in the management of Toshiba Corporation for many years

and has considerable experience and broad knowledge as a corporate manager. As his advice based on such

insight is valuable to the Company, Mr. Nonaka is appropriate as outside director of the Company.

Outside Director Naoki Iguchi has long been engaged in public administration in Japan in the fields of insurance,

pension and medical service and he has abundant experience and extensive knowledge on which he can

capitalize in the management of the Company. His advice based on such insight is valuable to the Company’s

medical services. Considering the above, Mr. Iguchi is appropriate as outside director of the Company.

Outside Director Miyuki Ishiguro is a partner of Nagashima Ohno & Tsunematsu, who is expected to provide

advice to the management of the Company as an independent expert on corporate and business law. Considering

the above, Ms. Ishiguro is appropriate as outside director of the Company.

Outside Director Ryoji Itoh is a professor teaching policy and media studies at a university graduate school, and

has knowledge based on his extensive experience as a management consultant as well as a corporate manager.

The Company believes that he is an expert whose knowledge can be used in the management of the Company.

Considering the above, Mr. Ito is appropriate as outside director of the Company.

Outside Director Kozo Takaoka has been involved in the management of Nestlé Japan Ltd. for many years, and

has considerable experience and broad knowledge of management and marketing. As his advice based on such

insight is valuable to the Company, Mr. Takaoka is appropriate as outside director of the Company.

There are no conflicts of interest between the seven (7) outside directors above and the Company. There are no

personnel exchange, capital ties, transactions or conflicts of interests between Skyline Ventures, Inc., for which

Mr. Yasunori Kaneko serves as Managing Director, Planetplan, Inc., for which Mr. Ryoji Itoh serves as

Managing Director, or Nestlé Japan Ltd. for which Mr. Kozo Takaoka serves as President & CEO, and the

Company.

The Company purchases some products, etc. from Toshiba Corporation, for which Outside Director Hisatsugu

Nonaka served as Director, Representative Executive Officer & Corporate Senior Executive Vice President until

June 2009. However, as the purchasing amount is less than one percent of the Company’s net sales, the

Company judges that these transactions do not affect the independence of Mr. Nonaka as outside director.

Although the Company has not stipulated criteria or policies regarding the independence of outside directors, the

Company refers to the criteria for independence stipulated by Tokyo Stock Exchange, Inc. when appointing

candidates for election in order to secure outside directors who have objectiveness and neutrality.

As mentioned above, the Company values objectiveness, neutrality and expertise of outside directors, and elects

outside directors from the viewpoint of their fair recognition of the role the Company plays in society,

supervision on the appropriateness of execution of duties by the corporate manager without placing

disproportionate emphasis on interests of the corporate manager and certain interested parties as well as

utilization of broad knowledge and experiences for the Company’s management. The abovementioned directors

are expected to play an independent role from the Company’s management in terms of governance.

Seven (7) outside directors receive reports and state their opinions as necessary in connection with internal

audits, internal control assessments, audits by the Audit Committee and audits by Accounting Auditor through

25

the Board of Directors. Four (4) of them, as members of the Audit Committee, hold a regular liaison conference

with the Internal Audit Department, and the Board of Corporate Auditors and auditors of the relevant

subsidiaries.

(5) Compensation for executive officers and directors

a. Amounts of compensation for executive officers and directors, amounts of compensation by compensation

type, and numbers of executive officers and directors eligible

Classification

Amount of

Compensation

(millions of yen)

Amount of compensation by type

(millions of yen) Numbers of

executive

officers and

directors eligible Fixed

compensation

Performance

-based

compensation

Stock options

Executive Officer 267 182 61 24 8

Outside Director 77 77 – – 7

Notes: 1. The Company does not pay directors’ compensation to directors serving concurrently as executive officers.

2. The sum of compensation for two (2) representative executive officers for the fiscal year included in the

compensation stated in the above table is 99 million yen.

3. Eight (8) executive officers including representative executive officers, who serve concurrently as officers of

business corporations, have received 69 million yen as officers’ compensation of such business corporations

in addition to the compensation stated in the above table.

b. Policy regarding determination of amounts of compensation or calculation method thereof, and means of

making such determinations

The Compensation Committee has established the following policies for determining compensation for

respective directors and executive officers of the Company and determines the amounts and other conditions

of compensation, etc. for respective directors and executive officers in accordance with these policies.

1) Compensation system

Compensation for directors and executive officers of the Company will be paid mainly in the form of

fixed-amount compensation based on official responsibilities in consideration of the scope and degree of

responsibility for group management and other aspects, and will not be paid in the form of retirement

benefits at the time of retirement. The amount of performance-based compensation will be changed

depending on business results, with net sales, ordinary income, cash flow and other figures employed as

criteria for determining results.

Directors serving concurrently as executive officers will receive compensation as executive officers.

2) Directors’ compensation

Directors’ compensation will be determined as nil, or as a combination of fixed-amount compensation,

performance-based compensation and stock options in consideration of the duties of the respective

directors. Reasonable upper limit will be set for the amount of payment in light of the economic situation,

the Company’s conditions and the duties of the respective directors.

The Company will pay compensation to outside directors, based on the frequency and hours of their

26

supervision activities, in addition to the combination of prescribed fixed-amount compensation and stock

options.

3) Executive officers’ compensation

Executive officers’ compensation will be determined in combination of fixed-amount compensation,

performance-based compensation and stock options in consideration of the duties of the respective

executive officers. Reasonable upper limit will be set for the amount of payment in light of the economic

situation, the Company’s conditions and the duties of the respective executive officers.

(6) Matters regarding limited liability agreements

The Company amended the Articles of Incorporation at the 56th Ordinary General Meeting of Shareholders

held on June 27, 2006, thereby establishing provisions regarding limited liability agreements with outside

directors.

An outline of the limited liability agreements entered into by the Company with all outside directors under the

Articles of Incorporation is as follows:

• Limited liability agreements with outside directors

After execution of this agreement, the outside director shall, in the case of having performed his/her duties in

good faith and without gross negligence with respect to the responsibility prescribed in Article 423,

Paragraph 1 of the Companies Act, assume liability for damages up to the higher of 2 million yen or the

minimum liability amount prescribed by law.

(7) Number of directors

The Articles of Incorporation stipulate that the Company may have no more than 10 directors.

(8) Requirements for resolutions to elect directors

The Company stipulates in its Articles of Incorporation that resolutions for election of directors are to be

adopted by a majority of the voting rights of the shareholders present at a general meeting of shareholders

where the shareholders holding at least one-third (1/3) of the voting rights of the shareholders who are entitled

to exercise their voting rights are present, and not by cumulative voting.

(9) Decision-making body for dividends of surplus

The Company stipulates in its Articles of Incorporation that matters involving dividends of surplus as

prescribed in the items of Article 459, Paragraph 1 of the Companies Act may be determined by resolution of

the Board of Directors, and that matters prescribed in the items of Article 459, Paragraph 1 of the Companies

Act may not be determined by resolutions made at general meetings of shareholders. The purpose of this is to

ensure flexibility with respect to capital policy and the return of profits to shareholders.

(10) Exemptions of directors and executive officers from liabilities

The Company stipulates in its Articles of Incorporation that pursuant to Article 426, Paragraph 1 of the

Companies Act, the Board of Directors may resolve to exempt directors (including former directors) and

executive officers (including former executive officers) from liabilities for their acts set forth in Article 423,

27

Paragraph 1 of the Companies Act, within the limits stipulated by laws and regulations. The purpose of this is to

create an environment in which directors and executive officers are able to fully demonstrate their abilities and

fulfil the roles expected of them when carrying out their job duties.

(11) Requirements for special resolutions of general meetings of shareholders

The Company stipulates in its Articles of Incorporation that resolutions of general meetings of shareholders

provided for in Article 309, Paragraph 2 of the Companies Act are to be adopted by at least a two-thirds (2/3)

majority of the voting rights of the shareholders present at the meeting where the shareholders holding at least

one-third (1/3) of the voting rights of the shareholders who are entitled to exercise their voting rights are present.

The purpose of this is to ensure smooth operation of general meetings of shareholders.

(12) Status of shareholdings

Number of investment stocks held for purposes other than pure investment and total carrying amount

a. Filing company 1 stock 12 million yen

b. Consolidated subsidiaries

Fujirebio Inc. 17 stocks 1,046 million yen

SRL, Inc. 16 stocks 403 million yen

28

2. Audit fees

(1) Audit fees paid to auditing certified public accountants

Classification

Fiscal year ended March 31, 2014 Fiscal year ended March 31, 2015

Fees for audit attestation

services

(millions of yen)

Fees for non-audit

services

(millions of yen)

Fees for audit attestation

services

(millions of yen)

Fees for non-audit

services

(millions of yen)

Filing company 40 – 40 –

Consolidated

subsidiaries 35 – 34 –

Total 75 – 74 –

(2) Other significant fees

Fiscal year ended March 31, 2014

The Company’s consolidated subsidiaries Miraca USA, Inc. and Miraca Life Sciences, Inc. have paid 112

million yen in fees to PricewaterhouseCoopers Co., Ltd. which belongs to the same network as the

Company’s auditing certified public accountants.

Fiscal year ended March 31, 2015

The Company’s consolidated subsidiaries Fujirebio America, Inc., Fujirebio Diagnostics, Inc., Miraca USA,

Inc., and Miraca Life Sciences, Inc. have paid 153 million yen in fees to PricewaterhouseCoopers Co., Ltd.

which belongs to the same network as the Company’s auditing certified public accountants.

(3) Non-audit services provided to the filing company by the auditing certified public accountants

Fiscal year ended March 31, 2014: Not applicable.

Fiscal year ended March 31, 2015: Not applicable.

(4) Policy on determining audit fees

Not applicable.

29

XIII. Directors and Executive Officers

1. Directors (As of June 24, 2015)

Position

in the

Company

Name Significant Concurrent Positions of Other Companies

Director Hiromasa Suzuki Chairman & Director, Fujirebio Inc.

Director, SRL, Inc.

Director Shinji Ogawa President & CEO, SRL, Inc.

Director Takeshi Koyama President & CEO, Fujirebio Inc.

Director Nobumichi Hattori Director, Fast Retailing Co., Ltd.

Chaired Professor at Graduate School of International

Corporate Strategy, Hitotsubashi University

Visiting Professor at Graduate School of Finance, Accounting

and Law, Waseda University

Statutory Auditor, Frontier Management Inc.

Director Yasunori Kaneko Managing Director, Skyline Ventures, Inc. (USA)

Director Hisatsugu Nonaka Audit & Supervisory Board Member, Nomura Research

Institute, Ltd.

Director Naoki Iguchi Professor, Graduate School of Public Health, Teikyo University

Director Miyuki Ishiguro Partner, Nagashima Ohno & Tsunematsu

Director Ryoji Itoh Project Professor at Graduate School of Media and

Governance, Keio University

Managing Director, Planetplan, Inc.

Professor (part-time), BBT University

Director, SATO HOLDINGS CORPORATION

Director Kozo Takaoka Representative Director, President & CEO, Nestlé Japan Ltd.

30

Notes: 1. Mr. Nobumichi Hattori, Mr. Yasunori Kaneko, Mr. Hisatsugu Nonaka, Mr. Naoki Iguchi, Ms. Miyuki Ishiguro,

Mr. Ryoji Itoh and Mr. Kozo Takaoka are outside directors prescribed in Article 2, Item 15 of the Companies

Act.

2. The Company has designated Mr. Nobumichi Hattori, Mr. Yasunori Kaneko, Mr. Hisatsugu Nonaka, Mr. Naoki

Iguchi, Mr. Ryoji Itoh and Mr. Kozo Takaoka as independent directors as stipulated by the Tokyo Stock

Exchange and has notified the Exchange accordingly.

3. The Company has the following committees:

Nominating Committee Chairman Ryoji Itoh

Members Hiromasa Suzuki

Nobumichi Hattori

Yasunori Kaneko

Hisatsugu Nonaka

Audit Committee Chairman Hisatsugu Nonaka

Members Yasunori Kaneko

Naoki Iguchi

Miyuki Ishiguro

Compensation Committee Chairman Naoki Iguchi

Members Hiromasa Suzuki

Miyuki Ishiguro

Ryoji Itoh

Kozo Takaoka

31

2. Executive Officers (As of June 24, 2015)

Position in

the Company Name Duties

Significant Concurrent Positions

of Other Companies

Representative

Executive

Officer

Hiromasa Suzuki President and CEO Refer to “1. Directors” hereinabove

Representative

Executive

Officer

Shinji Ogawa Senior Executive Officer,

Assistant to CEO

Refer to “1. Directors” hereinabove

Executive

Officer

Hiromitsu Tazawa Senior Executive Officer,

Legal Affairs and CSR

Chairman, SRL, Inc.

Executive

Officer

Takeshi Koyama Managing Executive

Officer,

Global IVD

Refer to “1. Directors” hereinabove

Executive

Officer

Hiroaki Kimura IR, General Affairs, and

Information Technology

Executive

Officer

Naoki Kitamura Finance and Corporate

Strategy

Executive

Officer

Shigeto Ohtsuki Human Resources and

Internal Control

32

XIV. Consolidated Financial Highlights

FY2010 FY2011 FY2012 FY2013 FY2014

Y/Y

Variance (%)

FY2015

(Forecast)

<Key Items of Statement of Income>

Net sales (millions of yen) 165,736 175,388 192,211 203,371 204,667 0.6%

210,000

Operating income (millions of yen) 21,326 23,216 25,598 26,727 27,012 1.1%

27,700

Ordinary income (millions of yen) 21,598 22,669 25,739 27,118 26,566 -2.0%

26,950

Net income (millions of yen) 11,174 12,311 14,871 15,322 16,002 4.4%

16,900

Net income per share (yen) 191.93 211.33 254.92 261.48 274.82 –

297.07

Net income per share (diluted) (yen) 191.75 210.99 254.39 260.80 274.32 –

–

<Key Items of Balance Sheet>

Total assets (millions of yen) 149,082 207,868 220,912 242,159 262,203 –

–

Net assets (millions of yen) 102,797 114,523 137,335 157,348 171,851 –

–

Net assets per share (yen) 1,759.48 1,958.36 2,344.33 2,677.30 3,016.78 –

–

<Key Indicators, etc.>

Dividend payout ratio (%) 32.3 33.1 31.4 32.9 33.5 –

37.0

Return on equity (%) 11.3 11.4 11.8 10.4 9.7 –

–

Return on asset (%) 15.1 12.7 12.0 11.7 10.5 –

–

Equity ratio (%) 68.7 54.9 62.0 64.9 65.5 –

–

Number of consolidated subsidiaries 33 37 38 38 36 –

–

Notes:

* Each fiscal period is as follows;

FY2010 is a one-year period ended on March 31, 2011. FY2011 is a one-year period ended on March 31, 2012.

FY2012 is a one-year period ended on March 31, 2013. FY2013 is a one-year period ended on March 31, 2014.

FY2014 is a one-year period ended on March 31, 2015. FY2015 is a one-year period ending on March 31, 2016.

* Figures are rounded to the appropriate unit in principle unless stated.

165.7 175.4

192.2 203.4 204.7 210.0

21.3 23.2

25.6 26.7 27.0 27.7

0

5

10

15

20

25

30

35

0

40

80

120

160

200

240

Net sales (Left scale) Operating income (Right scale)

(Billion yen) (Billion yen)

12.9

13.2

13.3 13.1

13.2 13.2 13.0

12.9

13.4 13.3

13.0 12.8

9

12

15

Operating income to net sales

Ordinary income to net sales

32.3 33.1

31.4 32.9 33.5

37.0

20

25

30

35

40Dividend payout ratio(%)

(%)

191.93

211.33

254.92 261.48 274.82

297.07

100

150

200

250

300EPS(Yen)

FY2010 FY2011 FY2013FY2012 FY2014 FY2015(Forecast)

FY2010 FY2011 FY2013FY2012 FY2014 FY2015(Forecast)

FY2010 FY2011 FY2013FY2012 FY2014 FY2015(Forecast)

FY2010 FY2011 FY2013FY2012 FY2014 FY2015(Forecast)

* Figures are rounded to the nearest hundred million.

33

XV. Consolidated Financial Statements

1. Consolidated Balance Sheet

(Millions of yen)

As of March 31, 2014 As of March 31, 2015

Assets

Current assets

Cash and deposits 25,683 27,300

Notes and accounts receivable - trade 37,125 38,734

Lease investment assets 666 622

Securities 10,000 –

Merchandise and finished goods 4,508 4,790

Work in process 5,019 5,026

Raw materials and supplies 4,754 5,096

Deferred tax assets 2,705 3,050

Other 6,801 7,868

Allowance for doubtful accounts (2,088) (2,413)

Total current assets 95,175 90,075

Non-current assets

Property, plant and equipment

Buildings and structures 52,864 53,588

Accumulated depreciation (35,200) (35,785)

Buildings and structures, net 17,663 17,803

Machinery, equipment and vehicles 13,658 14,568

Accumulated depreciation (11,226) (11,900)

Machinery, equipment and vehicles, net 2,431 2,668

Tools, furniture and fixtures 40,817 41,402

Accumulated depreciation (35,207) (36,223)

Tools, furniture and fixtures, net 5,610 5,179

Land 9,421 8,920

Leased assets 9,769 9,956

Accumulated depreciation (5,253) (5,303)

Leased assets, net 4,516 4,653

Construction in progress 1,223 3,313

Total property, plant and equipment 40,867 42,537

Intangible assets

Goodwill 55,746 59,428

Customer-related intangible assets 29,155 31,467

Software 2,926 2,416

Leased assets 247 197

Other 8,097 10,478

Total intangible assets 96,174 103,989

Investments and other assets

Investment securities 3,049 17,869

Deferred tax assets 2,987 3,321

Other 3,918 4,426

Allowance for doubtful accounts (12) (17)

Total investments and other assets 9,942 25,600

Total non-current assets 146,984 172,127

Total assets 242,159 262,203

34

(Millions of yen)

As of March 31, 2014 As of March 31, 2015

Liabilities

Current liabilities

Notes and accounts payable - trade 11,327 10,374

Electronically recorded obligations - operating – 1,437

Current portion of bonds 25 –

Current portion of long-term loans payable 4,250 6,000

Lease obligations 873 749

Accounts payable - other 6,538 5,868

Income taxes payable 5,258 4,075

Deferred tax liabilities 74 47

Provision for bonuses 4,303 4,638

Other 7,504 9,687

Total current liabilities 40,155 42,879

Non-current liabilities

Bonds payable 10,000 10,000

Long-term loans payable 8,000 12,150

Lease obligations 3,800 4,135

Deferred tax liabilities 10,877 10,729

Net defined benefit liability 6,667 4,345

Asset retirement obligations 658 887

Other 4,652 5,223

Total non-current liabilities 44,655 47,471

Total liabilities 84,810 90,351

Net assets

Shareholders’ equity

Capital stock 8,433 8,666

Capital surplus 24,155 24,388

Retained earnings 102,727 105,224

Treasury shares (541) (1,209)

Total shareholders’ equity 134,775 137,071

Accumulated other comprehensive income

Valuation difference on available-for-sale securities 1,075 606

Foreign currency translation adjustment 21,790 34,198

Remeasurements of defined benefit plans (535) (251)

Total accumulated other comprehensive income 22,330 34,553

Subscription rights to shares 242 227

Total net assets 157,348 171,851

Total liabilities and net assets 242,159 262,203

35

2. Consolidated Statement of Income and

Consolidated Statement of Comprehensive Income

(Consolidated Statement of Income) (Millions of yen)

Fiscal year ended

March 31, 2014

Fiscal year ended

March 31, 2015

Net sales 203,371 204,667

Cost of sales 120,680 124,272

Gross profit 82,690 80,395

Selling, general and administrative expenses 55,963 53,382

Operating income 26,727 27,012

Non-operating income

Interest income 32 21

Dividend income 42 47

Dividend income of insurance 114 148

Rent income 49 50

Fiduciary obligation fee 79 69

Foreign exchange gains 205 777

Settlement received 283 –

Other 243 234

Total non-operating income 1,052 1,349

Non-operating expenses

Interest expenses 514 589

Rent expenses 49 52

Share of loss of entities accounted for using equity

method 53 286

Advisory fee – 770

Other 43 96

Total non-operating expenses 661 1,796

Ordinary income 27,118 26,566

Extraordinary income

Gain on sales of non-current assets 53 1,477

Gain on reversal of subscription rights to shares 11 9

Other 4 155

Total extraordinary income 70 1,642

Extraordinary losses

Loss on retirement of non-current assets 197 116

Business structure improvement expenses 640 932

Impairment loss 193 2,596

Other 25 231

Total extraordinary losses 1,058 3,877

Income before income taxes and minority interests 26,130 24,331

Income taxes - current 10,534 10,603

Income taxes - deferred 274 (2,273)

Total income taxes 10,808 8,329

Income before minority interests 15,322 16,002

Net income 15,322 16,002

36

(Consolidated Statement of Comprehensive Income)

(Millions of yen)

Fiscal year ended

March 31, 2014

Fiscal year ended

March 31, 2015

Income before minority interests 15,322 16,002

Other comprehensive income

Valuation difference on available-for-sale securities 192 (469)

Foreign currency translation adjustment 9,392 12,408

Remeasurements of defined benefit plans, net of tax – 283

Total other comprehensive income 9,584 12,222

Comprehensive income 24,907 28,224

(Comprehensive income attributable to)

Comprehensive income attributable to owners of parent 24,907 28,224

37

3. Consolidated Statement of Changes in Equity

Fiscal year ended March 31, 2014

(Millions of yen)

Shareholders’ equity

Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’

equity

Balance at beginning of current

period 8,058 23,780 92,438 (523) 123,754

Cumulative effects of

changes in accounting

policies

–

Restated balance 8,058 23,780 92,438 (523) 123,754

Changes of items during period

Issuance of new shares -

exercise of subscription rights to shares

374 374 749

Dividends of surplus (5,033) (5,033)

Net income 15,322 15,322

Purchase of treasury shares (17) (17)

Retirement of treasury

shares –

Net changes of items other

than shareholders’ equity

Total changes of items during

period 374 374 10,289 (17) 11,020

Balance at end of current

period 8,433 24,155 102,727 (541) 134,775

Accumulated other comprehensive income

Subscription

rights to shares Total net assets

Valuation

difference on

available-for-sale

securities

Foreign currency

translation

adjustment

Remeasurements

of defined benefit

plans

Total accumulated

other

comprehensive

income

Balance at beginning of current

period 883 12,398 – 13,281 299 137,335

Cumulative effects of

changes in accounting

policies

–

Restated balance 883 12,398 – 13,281 299 137,335

Changes of items during period

Issuance of new shares -

exercise of subscription

rights to shares

749

Dividends of surplus (5,033)

Net income 15,322

Purchase of treasury shares (17)

Retirement of treasury

shares –

Net changes of items other

than shareholders’ equity 192 9,392 (535) 9,049 (57) 8,992

Total changes of items during

period 192 9,392 (535) 9,049 (57) 20,012

Balance at end of current

period 1,075 21,790 (535) 22,330 242 157,348

38

Fiscal year ended March 31, 2015

(Millions of yen)

Shareholders’ equity

Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’

equity

Balance at beginning of current

period 8,433 24,155 102,727 (541) 134,775

Cumulative effects of

changes in accounting policies

1,068 1,068

Restated balance 8,433 24,155 103,796 (541) 135,843

Changes of items during period

Issuance of new shares -

exercise of subscription

rights to shares

233 233 467

Dividends of surplus (5,226) (5,226)

Net income 16,002 16,002

Purchase of treasury shares (10,016) (10,016)

Retirement of treasury

shares (0) (9,348) 9,348 –

Net changes of items other

than shareholders’ equity

Total changes of items during

period 233 233 1,427 (667) 1,227

Balance at end of current

period 8,666 24,388 105,224 (1,209) 137,071

Accumulated other comprehensive income

Subscription

rights to shares Total net assets

Valuation

difference on

available-for-sale

securities

Foreign currency

translation

adjustment

Remeasurements

of defined benefit

plans

Total accumulated

other

comprehensive

income

Balance at beginning of current

period 1,075 21,790 (535) 22,330 242 157,348

Cumulative effects of

changes in accounting

policies

1,068

Restated balance 1,075 21,790 (535) 22,330 242 158,417

Changes of items during period

Issuance of new shares -

exercise of subscription

rights to shares

467

Dividends of surplus (5,226)

Net income 16,002

Purchase of treasury shares (10,016)

Retirement of treasury

shares –

Net changes of items other

than shareholders’ equity (469) 12,408 283 12,222 (15) 12,207

Total changes of items during

period (469) 12,408 283 12,222 (15) 13,434

Balance at end of current

period 606 34,198 (251) 34,553 227 171,851

39

4. Consolidated Statement of Cash Flows

(Millions of yen)

Fiscal year ended

March 31, 2014

Fiscal year ended

March 31, 2015

Cash flows from operating activities

Income before income taxes and minority interests 26,130 24,331

Depreciation 10,899 11,203

Impairment loss 193 2,596

Loss (gain) on sales of non-current assets (49) (1,474)

Amortization of goodwill 3,689 4,039

Increase (decrease) in provision for bonuses (977) 266

Increase (decrease) in net defined benefit liability (91) (206)

Increase (decrease) in allowance for doubtful accounts (390) 35

Interest and dividend income (75) (68)

Share of (profit) loss of entities accounted for using

equity method 53 286

Interest expenses 514 589

Foreign exchange losses (gains) (119) (923)

Decrease (increase) in notes and accounts receivable -

trade (234) (958)

Decrease (increase) in inventories 134 (374)

Increase (decrease) in notes and accounts payable - trade 180 411

Increase (decrease) in accrued consumption taxes (85) 2,013

Increase (decrease) in other current liabilities (276) (960)

Other, net 89 1,016

Subtotal 39,585 41,823

Interest and dividend income received 75 66

Interest expenses paid (532) (613)

Income taxes paid (10,404) (12,015)

Net cash provided by (used in) operating activities 28,723 29,261

Cash flows from investing activities

Purchase of property, plant and equipment (6,314) (7,122)

Purchase of intangible assets (3,207) (6,829)

Proceeds from sales of property, plant and equipment 152 2,370

Purchase of investment securities – (15,967)

Proceeds from sales of investment securities 22 520

Payments of loans receivable (10) (989)

Purchase of shares of subsidiaries resulting in change in

scope of consolidation (7,964) –

Other, net 168 142

Net cash provided by (used in) investing activities (17,153) (27,874)

Cash flows from financing activities

Proceeds from long-term loans payable – 10,150

Repayments of long-term loans payable (4,042) (4,250)

Repayments of finance lease obligations (965) (937)

Cash dividends paid (5,027) (5,220)

Redemption of bonds (230) (25)

Proceeds from issuance of common shares 632 393

Payments of money held in trust for purchase of treasury

shares – (10,018)

Proceeds from money held in trust for purchase of

treasury shares – 13

Other, net (67) (85)

Net cash provided by (used in) financing activities (9,699) (9,980)

40

(Millions of yen)

Fiscal year ended

March 31, 2014

Fiscal year ended

March 31, 2015

Effect of exchange rate change on cash and cash equivalents 947 211

Net increase (decrease) in cash and cash equivalents 2,817 (8,382)

Cash and cash equivalents at beginning of period 32,854 35,671

Cash and cash equivalents at end of period 35,671 27,288

41

XVI. Segment Information

Information on amounts of net sales, operating income or losses, assets, liabilities and other items by

reportable segments

Fiscal year ended March 31, 2014

(Millions of yen)

Reportable segments

Adjustment

Amount

recorded in the

consolidated

financial

statements

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related Total

Net sales

External sales 43,467 131,890 28,013 203,371 – 203,371

Intersegment sales or transfers 3,622 1,827 339 5,789 (5,789) –

Total 47,090 133,717 28,352 209,160 (5,789) 203,371

Segment operating income 9,106 14,464 3,284 26,855 (128) 26,727

Segment assets 62,652 167,044 13,113 242,810 (651) 242,159

Others

Depreciation 2,397 7,217 1,180 10,794 104 10,899

Amortization of goodwill 604 2,874 210 3,689 – 3,689

Investments in entities

accounted for using equity

method

– 210 – 210 – 210

Increase in property, plant and

equipment, and intangible

assets

2,400 7,462 1,401 11,264 395 11,660

Fiscal year ended March 31, 2015

(Millions of yen)

Reportable segments

Adjustment

Amount

recorded in the

consolidated

financial

statements

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related Total

Net sales

External sales 43,455 132,853 28,358 204,667 – 204,667

Intersegment sales or transfers 3,644 1,781 154 5,580 (5,580) –

Total 47,099 134,635 28,513 210,248 (5,580) 204,667

Segment operating income 10,423 13,488 2,930 26,842 170 27,012

Segment assets 61,788 192,251 12,815 266,855 (4,652) 262,203

Others

Depreciation 2,538 7,243 1,259 11,041 161 11,203

Amortization of goodwill 614 3,214 210 4,039 – 4,039

Investments in entities

accounted for using equity

method

– 16,127 – 16,127 – 16,127

Increase in property, plant and

equipment, and intangible

assets

2,798 10,502 1,557 14,858 57 14,916

42

[Related information]

Fiscal year ended March 31, 2014

1. Information by products and services

The information is omitted because the same information is disclosed as segment information.

2. Information by geographic areas

(1) Net sales

(Millions of yen)

Japan USA Europe Other Total

160,661 29,849 9,253 3,606 203,371

(Notes) 1. Net sales are classified into countries or regions based on customers’ location.

2. Major countries or regions included in categories other than Japan are as follows:

(1) USA ............... United States of America

(2) Europe ............ Belgium, France, Italy, Spain, Germany and others

(3) Other .............. Taiwan, other Asian regions and others

(2) Property, plant and equipment

(Millions of yen)

Japan USA Europe Other Total

29,854 8,986 1,731 294 40,867

(Note) Major countries or regions included in categories other than Japan are as follows:

(1) USA ................. United States of America

(2) Europe.............. Belgium, France, Italy, Spain, Germany and others

(3) Other ................ Taiwan, other Asian regions and others

Fiscal year ended March 31, 2015

1. Information by products and services

The information is omitted because the same information is disclosed as segment information.

2. Information by geographic areas

(1) Net sales

(Millions of yen)

Japan USA Europe Other Total

156,043 34,515 9,875 4,233 204,667

(Notes) 1. Net sales are classified into countries or regions based on customers’ location.

2. Major countries or regions included in categories other than Japan are as follows:

(1) USA ............... United States of America

(2) Europe ............ Belgium, France, Italy, Spain, Germany and others

(3) Other .............. Taiwan, other Asian regions and others

43

(2) Property, plant and equipment

(Millions of yen)

Japan USA Europe Other Total

30,371 10,284 1,554 327 42,537

(Note) Major countries or regions included in categories other than Japan are as follows:

(1) USA ................. United States of America

(2) Europe.............. Belgium, France, Italy, Spain, Germany and others

(3) Other ................ Taiwan, other Asian regions and others

44

[Information about impairment loss on non-current assets by reportable segments]

Fiscal year ended March 31, 2014

(Millions of yen)

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related

Elimination or

Corporate Total

Impairment loss 42 130 21 – 193

Fiscal year ended March 31, 2015

(Millions of yen)

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related

Elimination or

Corporate Total

Impairment loss 1,003 1,592 – – 2,596

[Information about amortization and unamortized balance of goodwill by reportable segments]

Fiscal year ended March 31, 2014

(Millions of yen)

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related

Elimination or

Corporate Total

Amortization of

goodwill during

the current period

604 3,003 210 – 3,818

Balance at end of

current period 3,903 50,796 1,175 – 55,875

Amortization and unamortized balance of negative goodwill that arose from business combinations

conducted prior to April 1, 2010 are as follows:

(Millions of yen)

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related

Elimination or

Corporate Total

Amortization of

goodwill during

the current period

– 128 – – 128

Balance at end of

current period – 128 – – 128

Fiscal year ended March 31, 2015

(Millions of yen)

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related

Elimination or

Corporate Total

Amortization of

goodwill during

the current period

614 3,343 210 – 4,167

Balance at end of

current period 3,036 55,426 965 – 59,428

45

Amortization and unamortized balance of negative goodwill that arose from business combinations

conducted prior to April 1, 2010 are as follows:

(Millions of yen)

In Vitro

Diagnostics

Clinical

Laboratory

Testing

Healthcare

Related

Elimination or

Corporate Total

Amortization of

goodwill during

the current period

– 128 – – 128

Balance at end of

current period – – – – –

[Information about gains recognized on negative goodwill by reportable segments]

Fiscal year ended March 31, 2014

There was no significant gain recognized on negative goodwill.

Fiscal year ended March 31, 2015

Not applicable.

46

XVII. Notes to Consolidated Financial Statements

1. Notes on Significant Matters Forming the Basis for the Preparation of Consolidated

Financial Statements, etc.

(1) Matters regarding scope of consolidation

1) Number of consolidated subsidiaries: 36

Names of major consolidated subsidiaries:

Fujirebio Inc., SRL, Inc., Miraca USA, Inc. (USA), Miraca Life Sciences, Inc. (USA), Fujirebio

America, Inc. (USA), Fujirebio Diagnostics, Inc. (USA), Fujirebio Europe N.V. (Belgium), Japan

Clinical Laboratories, Inc., NIHON STERY CO., LTD., SRL Medisearch Inc.

(Exclusion) 2

TFB, Inc. (due to merger), and Human Health Promotion, Inc. (due to liquidation)

2) Names of major non-consolidated subsidiaries, etc.:

SRL (Beijing), Inc. and one company

(Reason for exclusion from the scope of consolidation)

These non-consolidated subsidiaries are small in scale, and their total assets, net sales, net

income (amount corresponding to the share), retained earnings (amount corresponding to the

share), etc. do not have a significant impact on the consolidated financial statements. As a result,

they have been excluded from the scope of consolidation.

3) Names of other companies of which the majority of voting rights are held by the Company in its own

calculation and that are not subsidiaries of the Company, etc.:

Baylor Miraca Genetics Laboratories, LLC (USA)

(Reason why this company is not a subsidiary)

The Company holds the majority of voting rights of Baylor Miraca Genetics Laboratories, LLC

(BMGL) through Miraca USA, Inc., a consolidated subsidiary of the Company, in its own

calculation. However, since Baylor College of Medicine (BCM) as well as the Company has

approval authority for an annual business plan, which is considered to be involvement in

important decision-making of BMGL, under the Membership Interest Purchase Agreement

between that company and BCM, the Company deems that BMGL is an associated company

accounted for using equity method, rather than a subsidiary.

(2) Matters regarding application of equity-method

1) Number of associated companies under the equity method: 2

Baylor Miraca Genetics Laboratories, LLC, and Asmo Clinical Pharmacology Laboratories Ltd.

2) Unconsolidated subsidiaries (SRL (Beijing), Inc. and one company) and affiliates (FUJI-SC BIO, INC.

and three companies) have not been accounted for using the equity method, because their net income

and loss and retained earnings (amount corresponding to the owned interest) have no material effect on

the consolidated financial statements.

47

(3) Matters regarding accounting periods of consolidated subsidiaries

The balance sheet dates of the consolidated subsidiaries are same with the consolidated balance sheet date.

(4) Matters regarding accounting standards

1) Standards and methods for valuation of significant assets

a. Securities

Available-for sale securities

Marketable securities Marketable securities are stated at fair value based on the market price,

etc. on the balance sheet date (valuation differences are directly

reflected in net assets, and cost of sales is calculated using the

moving-average method).

Non-marketable securities Non-marketable securities are principally valued at cost determined by

the moving-average method.

Investments in investment partnerships (those which are deemed to be

securities under Article 2, Paragraph 2 of the Financial Instruments

and Exchange Act) are stated by incorporating the net amount of the

interests, based on the latest financial statements available according to

the reporting date set forth in the partnership agreement.

b. Derivatives Derivatives are stated at fair value.

c. Inventories

(Domestic consolidated subsidiaries)

Merchandise, raw materials and supplies

Merchandise, raw materials and supplies are principally stated at cost determined by the

moving-average method. (The balance sheet amounts are determined by the method of writing

down the book value to reflect a decline in the profitability of the assets.)

Finished goods and work in process

Finished goods and work in process are principally stated at cost determined by weighted

average method (The balance sheet amounts are determined by writing down the book value

according to a decrease in profitability).

(Foreign consolidated subsidiaries)

Merchandise, finished goods, work in process, raw materials and supplies

These inventories are mainly stated at the lower of cost or market, with cost determined by the

first-in, first-out method.

2) Depreciation methods for significant depreciable assets

a. Property, plant and equipment (except for leased assets)

In principle, the Company and domestic consolidated subsidiaries adopt the declining balance

method, and foreign consolidated subsidiaries use the straight-line method.

However, the Company and domestic consolidated subsidiaries use the straight-line method for

buildings (excluding accompanying facilities) acquired on or after April 1, 1998.

Fujirebio Inc., a domestic consolidated subsidiary, adopts the straight-line method for testing

48

equipment for equipment system leasing, etc., which is included in tools, furniture and fixtures.

Principal useful lives are as follows:

Buildings and structures 3 to 50 years

Machinery, equipment and vehicles 2 to 15 years

Tools, furniture and fixtures 2 to 20 years

b. Intangible assets (except for leased assets)

The straight-line method is adopted.

Principal useful lives are as follows:

Customer-related intangible assets 5 to 30 years

Software 3 to 5 years

c. Leased assets

The straight-line method is adopted, where the leasing period is deemed as the useful life and

residual value as zero.

Domestic consolidated subsidiaries account for finance lease transactions that do not transfer

ownership and commenced on or before March 31, 2008, using a method similar to that applicable to

ordinary rental transactions.

d. Long-term prepaid expenses

The Company and domestic consolidated subsidiaries amortize such expenses equally over the

period in which the payment of the expenses affects, while foreign consolidated subsidiaries uses the

straight-line method.

3) Basis for significant provisions

a. Allowance for doubtful accounts

(Domestic consolidated subsidiaries)

Allowance for doubtful accounts is provided for possible losses on the collection of receivables.

The amount of the allowance for general receivables is based on the write-off ratio. As for certain

receivables such as the ones from the debtors whose solvency is in doubt, the recoverability of

each receivable is examined individually and the estimated unrecoverable amounts are recognized

as the allowance.

(Foreign consolidated subsidiaries)

Allowance for doubtful accounts is provided for possible losses on the collection of receivables.

The recoverability of each receivable is examined individually and the estimated unrecoverable

amounts are recognized as the allowance.

b. Provision for bonuses Provision is made to cover payments of bonuses to employees based on

expected bonus payment.

4) Basis for significant revenue and expenses

For revenue on financial lease transactions, net sales and cost of sales are recorded when lease

payments are received.

49

5) Other significant information for preparation of consolidated financial statements

a. Basis for net defined benefit liability

To cover payments of employees’ retirement benefits, net defined benefit liability is recorded at the

amount calculated by deducting plan assets from retirement benefit obligations based on the

estimated amount as of the end of the fiscal year under review.

In calculation of retirement benefit obligations, the benefit formula basis is used for attributing

projected benefits to periods up to the end of the fiscal year under review.

Past service costs are amortized as incurred using the straight-line method over a period which is

shorter than the average remaining service years of the eligible employees (five or 10 years).

Actuarial gains and losses are amortized from the year following the year in which the gains and

losses are recognized by the straight-line method over a period which is shorter than the average

remaining service years of the eligible employees (five or 10 years).

Unrecognized actuarial gains and losses and unrecognized past service costs are recorded as

remeasurements of defined benefit plans presented in accumulated other comprehensive income in

net assets, after tax effects are adjusted.

b. Basis for translation of significant foreign currency assets and liabilities

Monetary receivables and payables denominated in foreign currencies are translated into yen at the

rates of exchange in effect at the balance sheet date, and any difference arising from the translation is

reflected in income and loss.

Assets and liabilities of foreign consolidated subsidiaries are translated into yen at the rates of

exchange in effect at the balance sheet date, and revenue and expenses are translated at the average

rates of exchange in effect during the period. Any difference arising from the translation is included

in foreign currency translation adjustment and minority interests in net assets.

c. Principal hedge accounting method

(1) Hedge accounting method

In principle, deferred hedge accounting is applied.

The allocation method is applied to forward exchange contracts and currency swaps that meet

requirements for that allocation method.

The exceptional accrual method for interest rate swaps is applied to interest rate swaps that meet

the requirements for that accrual method.

(2) Hedging instruments and hedged items

Hedging instruments Hedged items

Forward exchange contracts Foreign currency monetary receivables and payables

Currency swaps Foreign currency monetary receivables and payables

Interest rate swaps Loans payable

(3) Hedging policy

Based on the internal regulations, risks of fluctuations in foreign exchange rates and interest rates

are hedged.

In principle, the Company conducts derivative transactions for hedged items based on actual

50

demand. Derivative transactions are not used for speculative purposes.

(4) Method for assessment of hedge effectiveness

Hedging instruments and hedged items are tested for hedge effectiveness of each individual

transaction. However, the assessment of hedge effectiveness is omitted when the significant terms

of hedging instruments, including principal, interest rates and period, are same as those of hedged

items, because hedge effectiveness is extremely high in such cases.

d. Amortization method and period of goodwill

Goodwill is amortized over a reasonable period not exceeding 20 years on a straight-line basis after

the goodwill for each individual case is assessed. Goodwill or the amount equivalent to goodwill that

subsidiaries and associated companies in the US recorded on or after April 1, 2014 is amortized over

a period not exceeding 10 years on a straight-line basis.

e. Accounting for consumption taxes and local consumptions taxes

Transactions subject to consumption taxes and local consumptions taxes are recorded at amounts

exclusive of consumption taxes and local consumptions taxes.

2. Notes on Changes in Accounting Policies

(Application of the accounting standard for retirement benefits, etc.)

As for the “Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan (ASBJ)

Statement No. 26, May 17, 2012, hereinafter referred to as the “Standard”) and the “Guidance on

Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, March 26, 2015, hereinafter

referred to as the “Guidance”), the provisions stipulated in the main clauses of Paragraph 35 of the

Standard and Paragraph 67 of the Guidance have been applied from the fiscal year ended March 31, 2015.

In line with this application, the calculation method for retirement benefit obligations and past service

costs was reviewed to change the method of attributing projected benefits to periods from straight-line

attribution basis to the benefit formula basis, and the method of determining the discount rate was changed

from the method using the discount rate based on the number of years that approximates the remaining

average service periods of employees to the method using a single weighted-average discount rate that

reflects the estimated periods of retirement benefit payments and the amount for each estimated period of

retirement benefit payments.

The Standards and the Guidance have been adopted in accordance with the treatment of transition

stipulated in Paragraph 37 of the Standard, and the effects of the change of the method of calculating

retirement benefit obligations and past service costs are recognized by adjusting retained earnings.

Consequently, at the beginning of the fiscal year ended March 31, 2015, net defined benefit liability

decreased by 1,660 million yen and retained earnings increased by 1,068 million yen. Operating income,

ordinary income, and income before income taxes and minority interests for the fiscal year ended March

31, 2015, decreased 59 million yen each.

Net assets per share for the fiscal year ended March 31, 2015 increased by 18.79 yen. Net income per

share and diluted net income per share for the fiscal year ended March 31, 2015 decreased by 1.03 yen and

1.02 yen, respectively.

51

(Application of “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for

Consolidated Financial Statements”)

“Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for

Consolidated Financial Statements” (revised Practical Issues Task Force (PITF) No. 18, March 26, 2015)

has been early applied from the fiscal year ended March 31, 2015. In line with this application, the method

of amortizing goodwill or the amount equivalent to goodwill recorded by subsidiaries and associated

companies in the US on or after April 1, 2014 was changed from amortization using the straight-line

method over a reasonable period not exceeding 20 years to amortization using the straight-line method

over a period not exceeding 10 years in accordance with Topic 350 “Intangibles – Goodwill and Other” of

the Financial Accounting Standards Board (FASB) Accounting Standards Codification.

The impact of this application on income or loss for the fiscal year ended March 31, 2015 is insignificant.

3. Additional Information

Adoption of consolidated taxation system

In March 2015, the Company and certain consolidated subsidiaries received the approval of the

Commissioner of the National Tax Agency for the adoption of the consolidated taxation system from the

fiscal year ending March 31, 2016.

In line with this approval, the Company and these consolidated subsidiaries have conducted accounting

treatment based on the adoption of the consolidated taxation system in accordance with “Practical Solution

on Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation System (Part 1)” (PITF

No. 5) and “Practical Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated

Taxation System (Part 2)” (PITF No. 7).

4. Notes on Consolidated Balance Sheet

Accumulated depreciation of property, plant and equipment: 89,212 million yen

5. Notes on Consolidated Statement of Income

(1) Business structure improvement expenses

Business structure improvement expenses represent special retirement allowances for foreign subsidiaries

and others.

(2) Impairment loss

In the fiscal year ended March 31, 2015, the Group recorded impairment loss on the following asset

groups. The major asset groups on which impairment loss was recorded are as follows:

Location Purpose of use Type Impairment loss

(Millions of yen)

SRL, Inc.

(Hachioji, Tokyo)

Software under development for

internal use for the clinical

laboratory testing business

Other intangible assets 1,589

Fujirebio Europe N.V.

(Belgium)

Intangible assets for in vitro

diagnostics business Other intangible assets 1,003

The Group classifies operating assets for business use into groups by business units that are categories

used in management accounting and for which income and expenditure are continuously assessed, while

52

idle assets, assets to be disposed of, etc. are grouped individually.

For software under development for internal use for the clinical laboratory testing business of SRL, Inc.,

the book value was reduced by 1,589 million yen, which is the portion that is not expected to be used in

the future due to a change of the system development plan. The amount of reduction was recorded as

impairment loss.

The fair value of other intangible assets for in vitro diagnostics business of Fujirebio Europe N.V. fell

below the book value as a result of impairment test in accordance with the International Financial

Reporting Standards, because initially estimated revenue was no longer expected. Consequently, a

difference between the book value and the fair value was reduced and the amount of reduction was

recorded as impairment loss. The fair value was principally measured based on the income approach in

accordance with the International Financial Reporting Standards, and the discount rate was 9.08%.

6. Notes on Consolidated Statement of Changes in Equity

(1) Class and total number of shares issued as of March 31, 2015

Common share: 57,137,966 shares

(2) Matters regarding dividends

1) Dividends paid

Resolution Class of shares Total dividends

(millions of yen)

Dividends per

share (yen) Record date Effective date

At the Board of

Directors meeting held

on May 22, 2014

Common share 2,523 43 March 31, 2014 May 30, 2014

At the Board of

Directors meeting held

on October 31, 2014

Common share 2,702 46 September 30, 2014 December 2, 2014

Total ― 5,226 ― ― ―

2) Dividends whose record dates are in the fiscal year ended March 31, 2015 but whose effective dates fall

in the next period

At the Board of Directors meeting held on May 22, 2015, a resolution on matters regarding dividends

on common shares will be made as follows:

a. Total dividends: 2,616 million yen

b. Dividend resource: Retained earnings

c. Dividend per share: 46 yen

d. Record date: March 31, 2015

e. Effective date: June 2, 2015

(3) Class and number of shares underlying subscription rights to shares (excluding subscription rights to

shares of which the first day of exercise period has not yet arrived) as of March 31, 2015

Common share: 240,200 shares

53

7. Notes on Financial Instruments

(1) Matters regarding status of financial instruments

1) Policies on financial instruments

As its policies, the Group manages funds in the form of highly secured financial assets, and raises funds

through loans from banks and other financial institutions and issuance of bonds payable. As for

derivatives, the Group utilizes comprehensive forward exchange contracts and currency swaps for the

purpose of hedging risks of future fluctuations in exchange rates on receivables and payables

denominated in foreign currencies, and interest rate swaps for the purpose of hedging risks of

fluctuations in interest rates on loans payable. Derivative transactions are not used for speculative

purposes.

2) Description of financial instruments and related risks, and risk management system

Notes and accounts receivable – trade, which are operating receivables, are exposed to credit risks of

customers. For these risks, due dates and balances are managed for each customer and information on

credit status of major customers, etc. is obtained periodically in accordance with each group company’s

credit control regulations, detailed rules on management of accounts receivables and other rules.

Securities and investment securities are principally stocks of companies with which the Group has

business relations and are exposed to risks of fluctuations in their market prices. Their fair values

obtained periodically are reported to the Board of Directors.

Notes and accounts payable – trade and electronically recorded obligations – operating, which are

operating payables, mostly become due within five months.

Loans payable and bonds payable are principally financing for investments and business transactions

and mainly carry fixed interest rates.

For derivatives, interest rate swaps are used for the purpose of hedging interest rate fluctuation risks,

and forward exchange contracts and currency swaps are used for the purpose of hedging risks of

fluctuations in exchange rates on receivables and payables denominated in foreign currencies. Since

counterparties with which the Group has derivative transactions are domestic banks with high credit

standing, the Group believes that there are few risks of breach of contracts by these counterparties.

Execution and management of derivative transactions are performed in accordance with the internal

regulations stipulating transaction authorities.

While operating payables, loans payable and bonds payable are exposed to liquidity risks, such risks are

controlled by each group company through formulation of funding plans and other methods.

54

(2) Matters regarding fair values of financial instruments, etc.

The amounts recorded in the consolidated balance sheet, fair values and differences between them as of

March 31, 2015 are as follows. Financial instruments of which fair values are difficult to measure are not

included in the table below (Please refer to (Note 2)).

Amount recorded

in the consolidated

balance sheet

(millions of yen)

Fair value

(millions of yen)

Difference

(millions of yen)

(a) Cash and deposits 27,300 27,300 －

(b) Notes and accounts

receivable – trade 38,734 38,734 －

(c) Investment securities

Other securities 1,536 1,536 －

Total assets 67,570 67,570 －

(a) Notes and accounts payable –

trade 10,374 10,374 －

(b) Electronically recorded

obligations – operating 1,437 1,437 －

(c) Income taxes payable 4,075 4,075 －

(d) Bonds payable 10,000 10,051 51

(e) Long-term loans payable (*1) 18,150 18,219 69

Total liabilities 44,038 44,158 120

Derivative transactions (*2) (2) (2) －

(*1) (e) “Long-term loans payable” includes the current portion of long-term loans payable.

(*2) Net receivables and payables that were derived from derivative transactions are presented in net

amounts, and any item for which the total becomes a net liability is indicated in parentheses.

(Note 1) Matters regarding calculation method of fair values of financial instruments and matters relating

to securities and derivative transactions

Assets

(a) Cash and deposits and (b) Notes and accounts receivable - trade

Fair values are calculated based on the book values, since these assets are settled within a short

period of time and the fair value approximates the book value.

(c) Investment securities

Fair values of these assets are based on the prices traded at the stock exchange.

Liabilities

(a) Notes and accounts payable – trade, (b) Electronically recorded obligations – operating, and (c)

Income taxes payable

Fair values are calculated based on the book values, since these liabilities are settled within a short

period of time and the fair value approximates the book value.

(d) Bonds payable

Fair values are calculated based on the present value estimated by discounting the total principal and

interest, using interest rates reflecting the remaining term and credit risk of the bonds.

55

(e) Long-term loans payable

Fair values are calculated based on the present value estimated by discounting the total principal and

interest, using interest rates which would be applicable for similar new loans payable.

Derivative transactions

Fair value of derivative transactions are calculated based on prices provided by financial institutions.

Since the exceptional accrual method for interest rate swaps is applied, the above interest rate swaps

are treated as part of the hedged long-term borrowings, thus their fair values are included in those of

the long-term borrowings.

(Note 2) Financial instruments of which fair values are deemed extremely difficult to measure

Category Amount recorded in the consolidated balance sheet

(millions of yen)

Unlisted stocks, etc. 16,333

Investments in capital 130

These financial instruments are not included in disclosed items because they do not have a market price

and their fair values are extremely difficult to determine.

8. Notes on per Share Information

(1) Net assets per share: 3,016.78 yen

(2) Net income per share: 274.82 yen

9. Other Note

As for the presented amounts, fractions less than 1 million yen have been rounded down.

56

XVIII. Stock Information

0

1,000

2,000

3,000

4,000

5,000

6,000

0

1,000

2,000

3,000

4,000

5,000

6,000

Stock chart (Jan. 2005 - Aug. 2015)

Transition to a holding company structure as

Miraca HoldingBankruptcy of

Lehman Brothers

The Great East Japan Earthquake

TOPIX

（Miraca: JPY） （TOPIX）

Miraca Holdings

2005 2007 2009 2010 201420082006 2011 2012 2013 2015

Abenomics

57

XIX. History

Dec. 1950 Fujizoki Pharmaceutical Co., Ltd. (currently Miraca Holdings Inc., “the Company”) is established

as a manufacturer and distributor of pharmaceutical products, located at 4-6-7 Shimoochiai,

Shinjuku-ku, Tokyo, with capitalization of 300,000 yen.

Dec. 1966 The Company enters the field of clinical diagnostics.

Jun. 1970 Tokyo Special Reference Laboratories, Inc. is established as a clinical testing center (currently

consolidated subsidiary SRL, Inc.).

Aug. 1970 The Company launches overseas international of diagnostic reagents.

Jan. 1981 Joint venture company Fujirebio Taiwan Inc. is established in Taiwan, R.O.C. (currently a

consolidated subsidiary).

Nov. 1982 Toray-Fuji Bionics, Inc. (later renamed TFB, Inc. and merged with Fujirebio Inc.) is established as

a joint venture with Toray Industries, Inc.

Apr. 1983 The Company changes its name from Fujizoki Pharmaceutical Co., Ltd. to Fujirebio Inc.

Sep. 1983 Fujirebio Inc. shares are listed on the second section of the Tokyo Stock Exchange.

Jun. 1987 Fujirebio Inc. shares are listed on the first section of the Tokyo Stock Exchange.

Oct. 1987 The former Fujirebio America, Inc. (NJ, USA) is established (later merged with Fujirebio

Diagnostics, Inc.).

Aug. 1990 SRL, Inc. shares are listed on the second section of Tokyo Security Exchange.

Apr. 1992 The head office is relocated to 2-7-1 Nishishinjuku, Shinjuku-ku, Tokyo.

Aug. 1996 The Company obtains ISO 9001 certification, an international standard in quality management at

the Diagnostic Division.

Apr. 1997 The head office is relocated to 2-62-5 Nihonbashi-hamacho, Chuo-ku, Tokyo.

Nov. 1998 Centocor Diagnostics Pennsylvania, Inc. is acquired from Centocor Inc. (PA, USA) and becomes a

wholly-owned subsidiary of the former Fujirebio America, Inc. (USA), and renamed Fujirebio

Diagnostics, Inc.

Jun. 2000 The Company completes operational handover of its pharmaceutical business to UCB Japan Co.,

Ltd. (a wholly-owned subsidiary of UCB S.A. of Belgium).

May 2001 The Company expands the scope and obtains ISO 13485 and ISO 9001 quality assurance

certifications, and the European EN 46001 certification to all of its business facilities and products.

Jun. 2001 The new company Fujirebio America, Inc. (holding company; DE, USA; currently a consolidated

subsidiary) is established through investment in kind involving all shares of the former Fujirebio

America, Inc.

Jul. 2001 The former Fujirebio America, Inc. (import and sales) is merged into Fujirebio Diagnostics, Inc.

(manufacturing and sales; currently a consolidated subsidiary).

Dec. 2001 The Company obtains ISO14001 environmental management systems.

SRL shares are listed on the first section of Tokyo Security Exchange.

Sep. 2002 The Company acquires all shares of Chugai Diagnostics Science Co., Ltd., and changes its trade

name to Rebio Gen, Inc. (later merged with Fujirebio).

Nov. 2004 The Company acquires additional shares of SRL, making it a subsidiary.

Mar. 2005 SRL, Inc. is delisted from the first section of the Tokyo Stock Exchange.

58

Apr. 2005 SRL, Inc. becomes a wholly-owned subsidiary of Fujirebio through an exchange of shares.

SRL, Inc. transfers all of its shareholdings of subsidiaries Rejoice, Inc. and Rejoice Pharmacy, Inc.

to AIN PHARMACIEZ INC.

SRL, Inc. subsidiaries, SRL Tokyo Medical, Inc. and SBS, Inc. are merged into SRL.

Jun. 2005 The Company adopts the “Company with Committees (currently the “Company with Three

Committees”)” corporate governance system.

Jul. 2005 The Company implements an incorporation-type company split and transfers its entire business to

the new Fujirebio Inc. which has been established by means of the split.

The Company shifts to a pure holding company structure of the new Fujirebio Inc. and SRL, Inc.,

under the new name Miraca Holdings Inc., and relocates its head office to 1-24-1 Nishishinjuku,

Shinjuku-ku, Tokyo.

Apr. 2006 SRL, Inc. subsidiaries are merged into SRL (TSL, Inc.; SRL Hokkaido, Inc.; Nanshin Clinical

Laboratories, Inc.; SRL Shizuoka, Inc.; Life Information Analysis Center, Inc.; SRL Nishi-Nihon,

Inc. and SRL Hokuriku, Inc.).

May 2006 Fujirebio Diagnostics, Inc. acquires all shares of CanAg Diagnostics AB (Sweden) to make it a

wholly-owned subsidiary, and renames it Fujirebio Diagnostics AB.

Jun. 2007 SRL, Inc. acquires the remaining shares of SHIONOGI BIOMEDICAL LABORATORIES, INC.

(renamed SRL Kansai, Inc. in Aug. 2007) thereby making it a wholly-owned subsidiary.

Mar. 2008 Fujirebio Inc. acquires shares of Advanced Life Science Institute, Inc., making it a subsidiary

(currently a consolidated subsidiary).

Apr. 2008 Fujirebio Diagnostics, Inc. acquires all shares of American Biological Technologies, Inc.

Fujirebio Inc. subsidiary, Rebio Gen, Inc. is merged into Fujirebio.

SRL, Inc. subsidiary, SRL Kansai, Inc. is merged into SRL.

Jun. 2009 Fujirebio Diagnostics, Inc. subsidiary, American Biological Technologies, Inc. is merged into

Fujirebio Diagnostics.

Oct. 2009 SRL, Inc. acquires the remaining shares of Care’x Inc., previously an equity-method affiliate,

thereby making it a wholly-owned subsidiary (currently a consolidated subsidiary).

Nov. 2009 SSC, Inc. is merged into Fornet, Inc.

Pleiad, Inc. is merged into SRL Technosystem, Inc.

Apr. 2010 SRL, Inc. acquires all shares of Japan Clinical Laboratories, Inc., thereby making it a

wholly-owned subsidiary (currently a consolidated subsidiary).

Kyushu Sterile Co., Ltd. is merged into NIHON STERY CO., LTD.

Sep. 2010 Fujirebio Inc. acquires all shares of Innogenetics N.V. (currently Fujirebio Europe N.V.), thereby

making it a wholly-owned subsidiary (currently a consolidated subsidiary).

May 2011 SRL, Inc. acquires all shares of Tsuchiya Enterprise, Inc. (currently HOKUSHIN Clinical

Laboratory, Inc.), thereby making it a wholly-owned subsidiary (currently a consolidated

subsidiary).

Nov. 2011 Miraca USA, Inc. is established in the USA (currently a consolidated subsidiary).

Subsequently, Caris Diagnostics, Inc. (currently named Miraca Life Sciences, Inc., a consolidated

subsidiary) is made a wholly-owned subsidiary of Miraca Holdings through an arrangement

whereby a company newly established by Miraca USA solely for the purpose of making the

acquisition is merged into Caris Life Sciences, Inc. (currently named CDx Holdings, Inc.) which

controls Caris Diagnostics and its subsidiaries.

Dec. 2011 SRL, Inc. acquires shares of GUNMA Clinical-Laboratory Information Center Inc., thereby making

it a subsidiary (currently a consolidated subsidiary).

Oct. 2012 The head office is relocated to 2-1-1 Nishishinjuku, Shinjuku-ku, Tokyo.

59

Jul. 2013 SRL, Inc. subsidiary, SRL Technosystem, Inc. is merged into SRL.

Oct. 2013 SRL, Inc. subsidiary, SRL Laboratory Create, Inc. is merged into SRL.

Lakewood Pathology Associates, Inc. (d/b/a PLUS Diagnostics; currently a consolidated

subsidiary) is made a wholly-owned subsidiary of Miraca Holdings through an arrangement

whereby a company newly established by Miraca Life Sciences, Inc. solely for the purpose of

making the acquisition is merged into Lakewood Investment Corp. (currently named Miraca Life

Sciences Holdings, Inc.) which controls Lakewood Pathology Associates.

Apr. 2014 Fujirebio Inc. subsidiary, TFB, Inc. is merged into Fujirebio.

Feb. 2015 Miraca USA, Inc. acquires a 60% stake in genetics testing company Baylor Miraca Genetics

Laboratories, LLC (currently an equity-method affiliate).

60

XX. Corporate Data

Basic Information (as of March 31, 2015)

Trade name: Miraca Holdings Inc.

Established: December 1950

Listed market: The First Section of Tokyo Stock Exchange

(Securities Code: 4544)

Business year: From April 1 to March 31

Representative: Hiromasa Suzuki, Ph.D., President and CEO

Head office: 2-1-1 Nishishinjuku, Shinjuku-ku, Tokyo

Phone: +81-3-5909-3335

Fax: +81-3-5909-3336

Capital stock: 8,666 million yen

Number of permanent employees: 6,140 persons (Consolidated)

Directors and Officers (as of June 24, 2015)

Directors:

Director Hiromasa Suzuki

Shinji Ogawa

Takeshi Koyama

Outside Director Nobumichi Hattori

Yasunori Kaneko

Hisatsugu Nonaka

Naoki Iguchi

Miyuki Ishiguro

Ryoji Itoh

Kozo Takaoka

Executive Officers:

President and CEO Hiromasa Suzuki

Representative Senior Executive Officer Shinji Ogawa

Senior Executive Officer Hiromitsu Tazawa

Managing Executive Officer Takeshi Koyama

Executive Officer Hiroaki Kimura

Naoki Kitamura

Shigeto Ohtsuki

61

Stock Status (as of March 31, 2015)

Total number of shares authorized: 200,000,000 shares

Total number of shares issued: 57,137,966 shares

Number of shareholders: 5,327

Major shareholders (Top 10)

Shareholder name Number of shares held

(Thousands)

Share-holding ratio

(%)

The Master Trust Bank of Japan, Ltd. 3,404.8 5.96

TAIYO FUND, L.P. 2,229.0 3.90

Mizuho Bank, Ltd. 2,132.1 3.73

The Dai-ichi Life Insurance Company, Limited 2,000.7 3.50

JP MORGAN CHASE BANK 385632 1,802.2 3.15

Nippon Life Insurance Company 1,538.6 2.69

Japan Trustee Services Bank, Ltd. 1,483.0 2.60

Meiji Yasuda Life Insurance Company 1,272.2 2.23

STATE STREET BANK WEST

CLIENT-TREATY 505234 1,017.4 1.78

MELLON BANK, N.A. AS AGENT FOR ITS

CLIENT MELLON OMNIBUS US PENSION 939.6 1.64