Business Activities Report 2022

CMIC Group
Business Activities
Report 2022

Corporate Philosophy
CMIC is an innovative and unique provider

Value Creation Story of CMICof high-quality solutions for the healthcare

1 Mission, Vision, Values
CMIC'S CREED
2 Taking on Challenges Since Our Foundation
30 Years Ago -Contributing to Solving
Social Issues
4 Business Model and Value Creation Process
6 Message from the CEO
11 Message from the COO
12 CMIC’s Earnings Structure, Finance andCapital Strategy (CFO Interview)

MissionVisionFully Live Every Moment

Challenge
Liberate opportunity by changing ourvantage point

Transform without seeking refuge inconventional wisdom

ValuesW&3C

Business Activities

Communication
Proactively reach out to people andsociety

CMIC’S CREED
Framework for Supporting Sustainable Growth

CMIC’S CREED is based on the ideas of our founder,
Kazuo Nakamura. Right from the start of our businessas the first CRO in Japan, the CREED has been the corepolicy of the company. We must change flexibly without
fear of innovation to respond to the diverse needs of the

Our CREED

pharmaceutical industry. At the same time, we maintain

CMIC Group will bring innovation to healthcare

continual devotion to our CREED. Thus, we change

so that all people, regardless of age, gender or race,

ourselves while maintaining a steady core belief. With thisunwavering belief in our hearts, we will transform ourselves.

can live their one and only lives according to their own will.

What
CMIC’s corporate
calling & raison d'être

Whether in youth, when potential has yet to blossom, or in later years,
ABOUT CMIC'S CREED
d'être. “Bringing about innovation in healthcare fields” is our very mission.
What is more, the reason we wish to bring about innovation to healthcare fields
lies in our “every desire to live fully in the moment is equally precious” ideal.

when the fruits of one’s life are maturing, every individual
has an equally earnest desire to live every moment to its fullest.

Why
States our corporate
missionWe wish to genuinely answer each and every one of these wills to live.

Data Section

To help various stakeholders understand its
business models, strategies, and managementfoundation initiatives for creating medium- to longterm corporate value, the CMIC Group publishesa Business Activity Report (Integrated Report)that comprehensively summarizes its businessactivities from each of the financial as well as social,environmental, and other non-financial perspectives.
During the editing process, we referred to theinternational framework
put forward by the Value
Reporting Foundation (VRF)
and the value co-creation
guidelines formulated by
Japan’s Ministry of Economy,
Trade and Industry.

worldwide to achieve greater health and

WELLBEING

ChangeOur CREED is a clear expression of the CMIC Group’s corporate calling & raison

Editorial Policy

and solutions that will empower people
well-being.

Framework for Supporting
Sustainable Growth

36 10-Year Financial and Non-Financial
Highlights
38 Non-Financial Highlights
39 Sustainability Focus
40 Consolidated Balance Sheets
42 Consolidated Statements of Income/Consolidated Statements ofComprehensive Income
43 Consolidated Statements of Changes in Equity
44 Consolidated Statements of Cash Flows
45 Group Network
46 Corporate Data/Investor Information

the access to therapies that improve patients’

To advance the innovation of products

14 Consolidated Results for the Fiscal Year
Ended September 30, 2022
15 Pharmaceutical Solutions
17 Healthcare Solutions

Data Sectionindustry. We create value by accelerating
lives.

Business Activities

18 Sustainability
18 Basic Policy and Promotion Framework
19 Development of and Active Participation
by Human Resources
21 Approaches to Diversity
21 Human rights/Labor practices/Healthand Safety
23 Health Management Initiatives
24 Efforts to Address Environmental Issues
25 Efforts to Address Climate Change
26 Social Contribution Activities
28 Quality Management
29 Supply Chain Management
30 Risk Management Framework/
Compliance Framework
31 Corporate Governance
34 Management Team

Value Creation Story of CMIC

Contents

This also shows us how to follow through with our mission, and the virtues
we hold dear to that end: “those who dare” (Challenge), “new perspectives”(Change), and “turning passion into value paid forward to people and the public”(Communication).
Our CREED is the CMIC Group’s very corporate philosophy itself, the criteria
each and every employee makes value judgments by, and the cornerstone of ouractions.

To achieve this, we aspire to always challenge ourselves for a better future.
By evolving and gaining new perspectives,
We will create value out of our unwavering determination,and continue to contribute to society and humanity.

How
Virtues we hold dearto accomplish our
missionBusiness Activities Report 2022

1
1

Value Creation Story of CMICTaking on Challenges Since Our Foundation
30 Years Ago – Contributing to Solving Social Issues
different eras to offer a variety of services. Today CMIC contributes to approximately 80% of Japan’s new drug development. Going forward, we willcontribute to the treatment of illnesses through cutting-edge science and pursue IKIGAI (purpose of life) with a broad view of the concept of health.
External Environment
The enactment of new Good Clinical Practice (GCP) guidelines led to rising CRO
needs and propelled surging growth

External Environment
1980s: CROs developed in the US with the rise of bio-venture firms

1992 Founded as Japan’s first CRO
pharmaceutical development. In the US during the 1980s, demand
for CROs increased with the wave of bio-venture firms due to theoutsourcing of clinical trials, a particularly time-consuming and laboractions profoundly changed the very idea of the pharmaceuticalindustry and convinced that CROs would become indispensable inJapan, we established CMIC as the first CRO in Japan.

1996 Launch of Japan’s First CRC Businessof CMIC Group human resources in the healthcare field and focused on
for COVID-19 vaccinations and PCR testing to local governments, infected
person follow-ups, and the provision of antigen/antibody test kits.
We positioned the fiscal year ended September 30, 2022, which marked

2015 Launched Project Phoenix

center, and launched a model to refer patients to appropriate medical

We embarked upon our “Project Phoenix” initiative torealize sustainable growth in a period of transition in

stringent standards in line with those in Europe and the US. This provided the first legal

the healthcare and pharmaceutical industry. This paved

standing for CROs in Japan. The enforcement of the new GCP guidelines increased thethe way to eliminate unprofitable businesses and initiate

workload of pharmaceutical companies and medical institutions, increasing the needcost-structure reform, and this was when we formulated

for CROs and, in turn, fueling CMIC’s dramatic growth. In 2000, we launched our CSO“CMIC’S CREED,” our corporate philosophy that expresses

business and began providing sales and marketing support for pharmaceutical products.

the founding spirit of the Group’s origins. We rolled out

drug discovery platform technologies and digitalization, we are promoting
support for initiatives geared toward the total care of disease, ranging fromprevention to diagnosis, treatment, and prognosis. Based on this, we will

Contributing to increased clinical trial quality and shorter clinical trial duration

business model to provide total support to pharmaceuticalContributing to the leveling out and optimization of resources forpharmaceutical companies and medical institutions conducting clinical trials

new businesses.

directly is quite revolutionary, enabling patients themselves toactively seek out and participate in new drug clinical trials.

1,000

strengthen the Group’s management foundation and make progress towardsustainable growth.

900

We will contribute to the treatment of illnesses
through cutting-edge science centered on CROs.

companies. This is representative of our efforts to create

800

CMIC, which broadly supports the value chains ofpharmaceutical companies, has become an indispensable

2005

700

player in the development of drugs and today contributes

External Environment
Implementation of Revised Pharmaceutical Affairs Act enabled complete
outsourcing of pharmaceutical manufacturing

to approximately 80% of new drugs in Japan.

600

Launch of CDMO Business

The implementation of the Revised Pharmaceutical Affairs Act permitted the complete outsourcingof pharmaceutical manufacturing. This prompted CMIC to launch the equipment-intensive CDMO
Contract Development and Manufacturing Organization (CDMO) business as a company that has
engaged in personnel-oriented operations without facilities mainly in the CRO and SMO businesses
since its foundation.
Consequently, CMIC has completed its unique Pharmaceutical Value Creator (PVC) model, whichhelps maximize the value of pharmaceutical companies by connecting them to an integrated value
chain, extending from development to manufacturing and sales.
The global trend at the time was for CROs to specialize in CROs and CDMOs to specialize in
CDMOs. While the PVC model was considered a unique initiative owing to the specialized natureof each of these companies, we felt that the model was a necessary addition given the growinginterest of bio-ventures and active entry into the pharmaceutical business from other industries.

No. of employees

8,000

Growth trajectory
Since our founding,
30 consecutive
fiscal years of increased
sales

4,000

Framework for Supporting Sustainable Growth

institutions. The model in which the call center refers patients

1,100

Third Founding. In addition to strengthening drug development using new

our proprietary Pharmaceutical Value Creator (PVC)

In 2000, we established Japan’s first Patient Recruit Center, a call

Net Sales

the 30th Anniversary of the Company’s establishment, as the start of thethe Ministerial Ordinance on Good Clinical Practice (GCP) for Drugs in Japan, bringing

companies but also to medical institutions conducting clinical trials.

5,000

delays in development projects. However, we promoted the utilization

advancing the reliability and quality of clinical trials, the government established in 1997

services and expanded our support not only to pharmaceutical

6,000

affected by the decision to refrain from visiting medical institutions andWith the goal of ensuring the human rights and safety of test subjects, as well as

We launched Japan’s first Clinical Research Coordinator (CRC)

7,000

The spread of COVID-19 overloaded the medical system, and CMIC wasBusiness Activities

intensive aspect of drug development. Seeing how these dynamic

2022 Toward the Third Founding

providing infectious disease control support services, including support

1997

CMIC was founded as a CRO that contracts for clinical trials for

Spread of COVID-19 infections

CMIC
contributes toapproximately
80% of Japan’s
new drugdevelopment

Since its foundation as Japan’s first contract research organization (CRO), CMIC has expanded its businesses by anticipating changing needs inValue Creation Story of CMIC

External Environment

500

400

300

200

3,000
2,000

Net sales

No. of employees

100

1,000
(FY)

’93

’94

1992
Founding
Start of CRO
Business

2

Business Activities Report 2022

’95

’96

’97

1996
Launch of CRC
Business

’98

’99

’00

’01

’02

’03

’04

’05

’06

’07

’08

’09

’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

’20

’21

’22

1998

2000

2002

2005

2012

2015

2019-2021

2022-2025

EstablishedAsiansubsidiary

StartedCSO
Business

Listed on
JASDAQ

Started CDMO
Business

Transitioned
to a holdings
company
structure

Launched Project Phoenix
initiative to realize
sustainable growth

Mid-term Management Plan
(2019-2021)
Healthcare Revolution 2.0

New Mid-term Management Plan
(2022-2025)

Listed on First
Section of Tokyo
Stock Exchange

Data Section(¥ billion)（No. of people）

Third Founding

Business Activities Report 2022

3

Value Creation Story of CMIC
Creating value as a pharmaceutical company, forpharmaceutical companies

The Personal Health Value Creator Model (PHVC)
Maximizing the “Personal Health Values”

Moving toward the creation of new value with a unique business model that facilitates
one-stop shopping throughout the value chains of pharmaceutical companies and abusiness model that maximizes the “Personal Health Values.”

Utilizing its many years of experience providing support, the CMIC

With the PVC model serving as the foundation forGroup conducts in-house development of orphan drugs, that on

sustainable growth, the Personal Health Value Creator

account of a low number of patients do not attract the attention of(PHVC) model is a business model that maximizes thepharmaceutical companies. It also acquires marketing authorization“Personal Health Values.”

The Pharmaceutical Value Creator (PVC) model
Comprehensively supporting the value chains ofpharmaceutical companies

licenses (intellectual property) as a pharmaceutical company so as

Positioning the fiscal year ending September 30, 2022,

to also perform manufacturing and sales. The CMIC Group combines

which marks the 30th Anniversary, as the first year of

this function as a pharmaceutical company with its PVC model,

the Third Founding, we will broaden the concept of

supporting each value chain of pharmaceutical companies. Through thehealth and work to maximize the health value of each

investment burden. By providing all-encompassing support, fromperformance of product strategy reviews for pharmaceutical companies

and every individual. At the same time promoting drug

business model as a Pharmaceutical Value Creator (PVC).

upstream to downstream, throughout a pharmaceutical company’s

and support for the launch of pharmaceuticals not yet marketed indevelopment and digitization with new drug discovery

The CMIC Group’s PVC model works to raise the value ofvalue chain, the CMIC Group offers solutions that are tailor-

Japan, CMIC offers new solutions to pharmaceutical companies, bio

basic technology, we will expand our business domain

pharmaceutical companies by providing support throughout

made to individual needs, and that elicit the maximum value ofventures and other stakeholders. This is an evolution in the development

into the healthcare field and contribute to the treatment

the value chain, from drug development, drug formulation

stakeholders. Making use of its wide-ranging experience, CMIC’sof the PVC model. The CMIC Group offers management strategy optionsof cutting-edge diseases centered on CROs.

development and manufacturing, to sales and marketing.

strength is its diverse customer base, which not only includes

to stakeholders by combining the marketing authorization licenses

Pharmaceuticals require a long-term development process andpharmaceutical companies based both in and outside of Japan,(intellectual property) that it holds, together with drug development,

The CMIC Group positions this business model as the

R&D expenses. Given this, pharmaceutical companies contract

but also bio ventures, and companies that are new entrants in the

manufacturing, sales, and marketing value chains.

foundation of the Group’s sustainable growth. By creating atheir business to the CMIC Group so as to optimize management

pharmaceutical industry.

healthcare business that broadly contributes to maintaining

resources and address issues such as the leveling out of businessand promoting the health of all people, we are aiming to befluctuations, and alleviating manufacturing costs and capitala company that grows hand in hand with society.

External
Environment

Business Activities

The CMIC Group is a pioneer in the CRO field with a proprietary

Value Creation Story of CMIC

Business Model and Value Creation Process▶Increase in medical expenditures▶Declining population and aging society▶Total care for diseases▶Shift to personalized medicine▶Expansion of digitization▶Spread of COVID-19 infections▶NHI price reform▶Implementation of Society 5.0

Framework for Supporting Sustainable Growth

Evolution of Business Modelin Line with Changes in the External Environment

Basic
research

Clinical trial
notification

Clinical trial

Industrial research

PMS safety reporting
Drug launch

Non-clinical studies

Gaining approval

PVC

Support for the Value Chains of Pharmaceutical Companies
Approval application

PVC

Regular safety reports

Reevaluation

Sales
Provision of medical information

Marketingauthorization
licenses(intellectual
property)

Manufacturing“Healthcare Revolution”
New Value Creation in the Medical and
Healthcare Field

Human capitalIntellectual capital

Manufacturing capital

Human talent with the knowledge andexperience that underpins businessIntellectual property that supports
the business model

Manufacturing technology,
capital investment

Data Section

Business Activities Report 2022

(Personal Health Value Creator)

Maximizing the“Personal Health Value”

Source of Value Creation

4

PHVC

Business Activities Report 2022

5

Value Creation Story of CMIC

Message from the CEO

analysis contractor, we re-launched it in 1992 as Japan’s first CRO.

Value Creation Story of CMIC

Spearheading the Healthcare
Revolution from an "IKIGAI"
Perspective

into a sense of the mission I myself had to follow. After taking over a dormant pharmaceutical data

Development of the CRO BusinessWe had some difficulties generating cash as we launched our business in Japan, where the very idea ofat least partially outsourcing clinical development work was all but unheard of, though non-Japanese
bio-venture companies understood not only our business but also its future potential from the start. We
learned quite a bit about the excitement of the business from them as well.
With the goal of ensuring the human rights and safety of test subjects, as well as advancing the

Kazuo Nakamura

reliability and quality of clinical trials, the government established in 1997 the Ministerial Ordinance on

Representative Director,
Chairman and CEO

and the US. While this contributed to a significant increase in work volume at pharmaceutical companies
and medical device companies, it also provided the first legal standing for CROs in Japan. Amid growing
demand to shorten the development period and improve testing quality, CMIC moved rapidly to establish

2) GCP：

an independent domestic quality organization as it sought to further improve quality.

Good Clinical Practice:Standards that must be followed
when conducting clinical trials.

Since that point, we have expanded overseas, mainly in Asia. Moreover, after establishing our firstoverseas subsidiary in South Korea, we focused on further expanding our operating bases, including in
China and Singapore.

Business Activities

Guided by CMIC’S CREED, which encapsulates thoughts
on to what extent each and every person can live a happy
life, we are seeking to seize new business opportunities inhealthcare. This perspective can be expressed by one word:
IKIGAI (purpose of life).

Good Clinical Practice GCP2) for Drugs in Japan, bringing stringent standards in line with those in Europe

Development of CSO3) and SMO Services
For me, the development of a business is always about challenging the status quo. Our goal is to facilitate
the delivery of new drugs to the patients needing them as soon as possible. With this in mind, we have been

Japan has the highest average life expectancy and healthy life expectancy in the world. Although the country
is facing a variety of issues as a super-aging society, it is wonderful that the average life expectancy andhealthy life expectancy are increasing. Is it not everyone’s wish that healthy life expectancy be extended?
The concept behind CMIC’S CREED, the CMIC Group’s origins, is for each and every person to live theirlives to the fullest. Beyond the treatment of illnesses, what is needed for everyone to spend their lives happily,
incentives they can derive from them. We are trying to create businesses that can contribute to the health ofindividuals from the perspective of IKIGAI.
Of course, our efforts could also result in some failures, though in response to this risk we have sought tominimize any resultant losses through meticulous management in line with our aim of creating social valuethat contributes to advancements in medical care and people’s health in general. I believe that if we cancreate social value, economic value will follow.
I would like to thank our stakeholders for their understanding and ask for their continued support as wetake on these new challenges.

From CRO to PVC, PHVCat the launch of the business we had trouble recruiting patients. This led us to launch in 2000 Patient

in-house clinical staff were forced to outsource clinical trials of drugs under development, which

Contract Sales Organization:
Pharmaceutical contract salesorganization. Service providing
Medical Representative (MR)
activities to pharmaceuticalcompanies.

year, we launched our CSO business, adding support for sales and marketing to our services focused on thedevelopment of new drugs.

Entering the CDMO4) Business to Build a Value Chain Extending
from Development to Manufacturing and Sales
We launched our CDMO business by consolidating the South Korean pharmaceuticals manufacturingbusiness in August 2005. The implementation of the Revised Pharmaceutical Affairs Act allowed this bypermitting the complete outsourcing of pharmaceutical manufacturing. I have always believed that if you
were following in the footsteps of the US, you should never hesitate to act in the world market. On the other4) CDMO：

hand, when considering what was unique to Japan, I believed it was necessary to maintain a manufacturing

Contract Development andManufacturing Organization：
Pharmaceutical contract
manufacturing development
organization. A company
engaged mainly in the contracted
development and manufactureof pharmaceuticals and otherproducts from pharmaceuticalcompanies.

as they were faced with the necessity of reducing costs amid sustained price reductions and growing
developed ours by taking over the existing factory of a pharmaceutical company, making that company a
subsidiary, and charging it with production. Our contract development and manufacturing business currently
consists of four domestic plants and two overseas plants, and we are also providing total solution services
in pharmacological manufacturing, from formulation studies to the manufacture of clinical trial drugs andData Section

companies needed to expand and streamline their new drug pipelines while bio-ventures without

3) CSO：

Recruit Center, Japan’s first service for assistance in the recruiting of patients for clinical trial. In the same

competition from generic drugs. At the same time, the CDMO business is equipment intensive, and we

US at the time was witnessing a wave of new bio-venture firms. In those days, pharmaceuticalBusiness Activities Report 2022

smooth conduct of clinical trials under a doctor’s supervision at a hospital or medical institution, though

Thoughts on the Founding of CMIC

and when I was in my 30s, I frequently traveled to the US to promote our products overseas. The

6

pharmaceutical companies, but also medical institutions conducting clinical trials. An SMO supports thebase. At the time, demand for manufacturing from pharmaceuticals companies was particularly strong,

the time, many of these companies were focused on improving their ability to develop new drugs,

Contact Research Organization:
Within the development process
for pharmaceuticals and otherproducts, a company engaged
mainly in contracted clinical
trials and post-marketingclinical trials as well as support
for the development ofpharmaceuticals.

We launched Japan’s first Site Management Organization (SMO) in 1996, providing support not only to

The CMIC Growth Story Began by Challenging the Existing Mechanisms

CMIC was founded in 1992. In the 1980s, I was working at a domestic pharmaceutical company. At

1) CRO：the existing healthcare system.

Framework for Supporting Sustainable Growthfrom birth to death? For example, interaction with society, things they like or are good at, and what kind of

focused on using our business model to accelerate the transformation of pharmaceutical companies andcommercial production, in almost all dosage forms.

requires a significant level of time and effort. This contributed to the birth and rapid expansion

Launching the IPM Business (Intellectual Property Business)in the US of the CRO1). After learning of the CRO model during licensing negotiations with a US

Having acquired licenses for the manufacture and sales of Class 1 and Class 2 pharmaceuticals in 2006 andpharmaceutical company, I sought to launch a similar organization in Japan. The dynamic actions

a license for the manufacture and sales of Class 1 medical equipment in 2009, the CMIC Group has beenby the bio-venture companies in the US profoundly changed the very idea of the pharmaceuticalcreating a value chain extending from non-clinical trials, clinical trials and pharmaceutical manufacturingindustry in that country, yet they were still unheard of in Japan, which created a sense of crisis in me

to post-marketing surveillance, the provision of medical information, and marketing and sales. However,that Japan could be left behind if it did not adapt quickly. This kind of thinking eventually turnedin addition to supporting pharmaceutical companies through contract work, we wanted to promote

Business Activities Report 2022

7

Value Creation Story of CMIC
to the MR, leading to situations where the in-house

healthcare administration. This desire resulted in the creation of the Innovative Pharma Model (IPM)

workforce may be lacking. On the other hand, once sales

business, a solutions business that provides a variety of management options to pharmaceutical companies

pass a certain level, there will likely be a surplus in humanby combining our value chain with our various manufacturing and sales licenses. In 2011, we launchedresources, which shows the importance of the CSO as a“Renapro®” L-FABP, an in-vitro diagnostic drug, while in 2012 we started the development of mainly“safety valve” that can be utilized according to need. Thatorphan drugs, established a sales company, and in 2013, started selling products developed in-house.

being said, it is important to remember that production sites

By creating a value chain, the CMIC Group established a Pharmaceutical Value Creator (PVC) businessmust also be able to reduce costs as drug prices fall, andmodel that supports a variety of pharmaceutical company businesses. However, this is just one stop on ouralso face the risk of technological innovations making both

way to our ultimate goal.

equipment and accumulated know-how obsolescent.

Value Creation Story of CMIC

innovation among Japanese pharmaceutical companies, medical institutions, and even the national

By taking charge of projects based on the development
standards and procedures of the major pharmaceutical

The CMIC DNA Each Employee Shares
The Source Can Be Found in the Unchanging CMIC’S CREED

companies, which can often differ substantially from one
company to another, CMIC is learning rational proceduresfrom the CRO side. We are also building up our technologicalbase and accumulating know-how by our ability to respondto each and every need from the customer side in terms of quality, speed, and pricing. Leveraging andand implements its policies, strategies and vision for the future, CMIC’S CREED has remained the samereflecting this technological expertise and accumulated know-how in the hiring of employees andsince the Company’s founding and can rightly be described as integral to the Company’s DNA.

our training systems results in employees with experiences and knowledge that are fundamentally

This CREED springs from our desire from the outset to promote “Wellbeing,” which to me generallymeans existing in good condition and enjoying each moment in life, but taking a lifetime view of thedifferent to those of the pharmaceutical companies, which forms a cornerstone in the development ofa solutions business that can solve customer problems.

concept, it means using every moment from birth to death to live every moment in life to its fullest. The

One of the key advantages of the CMIC business model over our competitors is that we can support

idea of Wellbeing we have carried with us since our founding is supported by the three concepts of change,

one area of a pharmaceutical company’s value chain, or the entire value chain. Even if you have thechallenge, and communication, what we call the 3C culture.

same function as a pharmaceutical company, if you do not deliver directly to the patient, you are not

Reflecting the Company’s growth as well as troubles encountered at the acquired subsidiary, we moved

really understood as a pharmaceutical company. Accordingly, having an in-house in-vitro diagnostic

in 2015 to enshrine this founding concept as “CMIC’S CREED.” While it is certainly true that we must be

drug development and sales business and an in-house orphan drugs sales business makes sense andflexible and open to change in order to meet the diversifying needs of the pharmaceutical industry, we also

gives you an advantage that other companies do not have.

believe that one thing that should never change is our CREED.

Business Activities

As CMIC develops its business, makes decisions at the management level and at its plants, and formulates

Revenue and value in this business are derived from human resources that are well acquainted withthe business of pharmaceutical companies, as well as from business development excellence (sales

but should only be enacted when deemed necessary for the business. Accumulated know-how in medical

and proposal capabilities), operational excellence (business execution skills), and excellence in terms

care is deeply rooted in the culture of a country and region, and in that sense medical care can be seen asof management skills. In other words, success stems from the ability to see beyond established trends

benefitting both from globalization and localization. By bringing into the group skills and know-how weand perceive upcoming change, and then take responsibility and risks by adapting to those changes

need but do not already hold, we can gradually build our accumulated knowledge and further strengthen

using existing technologies and expertise. Having human resources that are able to meet these highour business base. I really believe this to be important. The acquisition of businesses is contributing to an

requirements means the Company has the power to generate new value based on the earned trust ofincrease in employees, not only in Japan, but overseas as well, and given the importance of sharing andits customers.

Framework for Supporting Sustainable Growth

Our position on acquisitions is that they should not take place solely for the purpose of expansion,

entrenching our founding philosophy, we are actively engaged in deepening understanding of CMIC’SCREED among our employees through training sessions.

From a Contract Business to a Problem-Solving
Solutions BusinessBusiness Activities Report 2022

Realizing a Healthcare Revolution
Since April 2018, CMIC has been aiming to realize a “Healthcare Revolution” through the use ofdigitalization in the healthcare field among other new initiatives.

A Business Model Making the Best Use of Our Strengths and the Source of Value“Healthcare Revolution” is a fairly broad concept. Put simply, as an idea that healthcare is moving

The CMIC Group has accumulated extensive experience in providing assistance to pharmaceutical

toward tailor-made medical treatment, we will support its evolution. Our goal of quickly delivering

companies and medical institutions conducting clinical trials, and one of our key strengths lies in our

new drugs to patients eagerly awaiting their release is unchanged since we launched the CRO and CSO

ability to quickly understand the issues and concerns these customers may have.

businesses. That said, it is not enough merely to deliver new pharmaceuticals. From the individual

For pharmaceutical companies, the development of new drugs is a long process that requires

patient side, there may be issues such as treatments that do not work or have adverse side effects,

a substantial level of R&D spending, from basic research all the way through post-marketing

and while it may be difficult for pharmaceutical companies or medical institutions, it is in areas such

surveillance. Moreover, there is not always a constant supply of development candidates in clinicalas these that I believe we can provide solutions. Filling this need marks the first step in our effort todevelopment, which significantly slows down the development work process during periods when new

advance the “Healthcare Revolution.”drug seeds are not developed in the Company’s own development centers. Thus, careful outsourcing

What does CMIC need to do to survive beyond COVID-19? Each group officer and employee must

to CROs can not only act as a safety valve, but also optimize management resources, including bytake on the challenge of transforming themselves and accelerating the speed at which we do business.

allowing the shifting of human resources to operations that are producing higher added value. The

We are shifting from a business model centered on pharmaceuticals to one that creates a new

CSO business is somewhat similar. When a new drug is released, the number of MRs can be increased

healthcare business, creating businesses that contribute to maintaining and improving the health ofmarkedly to raise awareness, though the level of expertise in areas such as diseases can vary according

individuals, and promoting the deployment of Group human resources in the healthcare field.

Data Section

8

The Way Forward

Business Activities Report 2022

9

Value Creation Story of CMIC

Message from the COO

The CMIC Group’s goal is to achieve a “Healthcare Revolution” by supporting the development ofinnovative treatments, and by developing and introducing its own innovative technologies. In addition
to extending the life expectancy of the body itself, we are focused on encouraging the development ofpatients and potential patients as far away from the risk of illness as possible so that they can live
full and healthy lives, and fulfilling the promise of “Wellbeing” mentioned in our CREED. This is thecorporate image we wish to pursue.

Risks and Opportunities

Value Creation Story of CMIC

Executing the Focus Activitiesof the Mid-term Management
Plan to Aiming for Sustainable
Growth

medical technologies contributing to a society of healthy and long-lived citizens. Our goals are keeping

Keiko Oishi

Fostering Human Resources and Using Their Experience as Intellectual Capital

Representative Director,
President and COO

Amid an ongoing acceleration in globalization, growth in our business is likely to be impacted bychanges over the long term in the policies of countries as they build their medical and healthcare
systems. After the US and China, Japan is the third largest country in the world in terms ofspending on pharmaceuticals, though spending appears likely to decline moving forward as the
population dwindles. Moreover, if tighter regulations make it more difficult to obtain approval

Mid-term Management Plan (FY2022-2025)

could move overseas, resulting in a deterioration in Japan’s position as a major drug developer

The basic policy for the New Mid-term Management Plan is “Fromconcerted efforts to harness its healthcare and pharmaceuticaland manufacturer. In contrast, using the spread of the COVID-19 infection as an opportunity, thePharmaceutical Value Creator to Personal Health Value Creator.”

expertise, network, and human resources were a major step toward

importance of drug development that is directly linked to the life support of patients has once again

Based on the Pharmaceutical Value Creator (PVC) model, which

the future development of its business in concert with local

been recognized. There is a need to secure a stable supply system for pharmaceuticals, such as

is a unique business model that fully supports the value chains ofgovernments.

promoting the domestic production of highly overseas-dependent pharmaceutical ingredients. We

pharmaceutical companies, we aim to expand to a Personal Health

The second major change is the social instability caused by thesee this as an opportunity to expand our business. The utilization of human resources represents

Value Creator (PHVC) business model that maximizes the “Personal

Russian invasion of Ukraine in February 2022. While there was

Health Values.”

no significant direct impact on the Group in the fiscal year ended

both a risk and an opportunity for the Company. We recognize that securing personnel, including
opportunity losses stemming from a lack of personnel, generational gaps, and even successor
training, is a major issue for the foreseeable future. On the other hand, effectively directing thisprovide tremendous growth opportunities for the Company in the long term. Our management
and human resources development system focuses on adapting to non-continuous change andreading ahead, with the Company following a “campus” style of management that affirms creativity
rather than “managing” it. While it is vital to maintain a certain level of control at manufacturing
sites, we are focused on creating a management system that values and maintains the diversity ofeach of our employees while promoting a culture of repeated destruction and creation. Strategic
investment at CMIC centers on human resources investment, and we will continue to invest in
this area, including in global human resources. Given the importance of sustainability, I believe
it is more important for us to take the following steps than to single-mindedly pursue profit
alone. First, we need to look ahead without destroying what was just created. Moreover, we needto contribute to society as well as the happiness of our employees. This requires management
excellence, which by itself has no real meaning without implementation. In practice, I belong to
the school of management that places an emphasis on fostering the next generation. I am not a

September 30, 2022, CMIC will continue to closely monitor theof healthcare business, (2) comprehensive support for diseasesituation and take all preparatory steps to minimize the impact on

prevention, treatment R&D, and marketing, and (3) contribution toits business.

Framework for Supporting Sustainable Growth

human capital, in addition to its intellectual capital, in an expanding healthcare market could

The focus activities we raised for this purpose are (1) evolution

Business Activities

for new formulations, there is some risk that pharmaceutical development and manufacturing

The fiscal year ended September 30, 2022 marked the 30tha sustainable society through services with high social benefits.
Looking back on the fiscal year ended September 30, 2022, theanniversary of CMIC’s founding. Positioning this fiscal year as thefirst year of the Mid-term Management Plan, the environment infirst of our Third Founding we will promote drug development andwhich the Group operates underwent two major changes. One, isdigitization with new drug discovery basic technology, expand ourthe prolonged nature of the COVID-19 pandemic, and the pressing

business domain into the healthcare field, and provide support

issue of vaccinations conducted by local governments. Despite thefor initiatives that deliver the total care of disease, ranging from

PCR testing and vaccination support provided since the fiscal year

prevention to diagnosis, treatment, and prognosis throughout theended September 30, 2021, we remain cognizant of the critical need

period of our Mid-term Management Plan.

to establish a more extensive support system as soon as possible.

As we work to secure and train human resources, bring about

Against this backdrop, CMIC’s support has expanded fromfurther diversity and inclusion, lift the collective strengths of thevaccination assistance to encompass comprehensive support

Group through mutual communication, and promote the focus

including the follow-up of infected patients, call center operations,activities of the Mid-term Management Plan, I sincerely ask for thereferrals to doctors and nurses, and the provision of antigen/continued support and understanding of all stakeholders.

antibody test kits. Leveraging its collective strengths, the Group’s

perfect person, but I believe that by sharing experiences, including both the good and the hardexperiences, we can provide value in terms of gained experience to the next generation of leaders.
I also believe the importance of training can be found in its ability to teach how to look outside thebox, rather than to just accept conditions as they are.

Financial Targets
FY2021 Actual

FY2025 Target

Annual growthtarget (%)

Net sales¥85.7 billion¥100 billion+3.9％

Operating income¥4.9 billion¥7 billion+9.2％

Operating margin

5.7％

7％

ROE

8.3%

10% and/or higher

which we think have the potential to be major game changers. As technology itself continues to
evolve, we will work to incorporate that which we need now while simultaneously keeping an eye
out for future opportunities centered on “harmo®,” which is being utilized as a PHR (Personal
Health Record)-type medical information linkage system that centrally manages information

Data Section

Another opportunity can be found in new technologies, such as AI and real- world data (RWD),

related to personal health. As this happens, we will also change our entire management structure,including its organizational and working mechanisms. This of course will also require management
excellence, but we think that only then will the technologies arise that will enable us to seize
substantial growth opportunities for the Company.

10

Business Activities Report 2022

Pharma Intelligence Awards Japan 2022 award ceremony
Received an award for the Best Contract Research Organization

Business Activities Report 2022

11

Value Creation Story of CMIC

CMIC’s Earnings Structure, Finance and Capital Strategy
The Impact of COVID-19 and Conflict
between Russia and Ukraine

Preparations are underway for the manufacture of large-scale productDespite the prolonged impact of COVID-19, the environment for drug

place, capital investments are projected to decline having peaked indevelopment moved toward an improvement as vaccination efforts by

the fiscal year ended September 30, 2022.

items to commence from 2023. With all principal equipment now in

2013/92014/92015/92016/92017/92018/92019/92020/92021/92022/950,934
4,156

52,8362,766

55,904
1,411

62,0393,363

65,282
3,897

69,8694,321

74,373
4,405

76,0982,605

85,7884,920

108,461
11,84542,855
6,810
9,424
19,601

49,237
5,751
13,40920,30955,861
5,638
18,06920,667

59,104
4,946
16,085
21,39765,605
4,928
18,89823,60878,034
13,976
19,27633,53680,17912,14419,19632,99489,517
12,68822,58434,011

91,192
9,379
17,03934,485

107,590
11,703
17,136
41,269

8.2
9.2
4.1
45.6
0.13

5.2
5.9
2.5
41.1
0.37

2.5
36.4
0.60

5.4
4.3
1.5
35.5
0.52

6.0
7.1
2.5
34.9
0.61

6.2
6.5
2.1
28.9
0.23

5.9
8.1
2.3
27.8
0.32

3.4
6.6
1.8
26.4
0.41

5.7
8.3
2.2
27.5
0.30

10.9
29.6
8.4
29.4
0.17

In the Market Solutions Business, CMIC engages in personnelpressure on the medical system exhibited signs of partial success in theactivities that focus on the dispatch of medical representatives (MRs)fiscal year ended September 30, 2022. Driven by the development ofand intellectual property operations that involve the development

vaccines and significant growth in vaccination support services to help

and sale of orphan drugs for rare diseases. In the CMIC Group, whichcounter the pandemic, the CMIC Group achieved record high earnings.

centers on the contract business, Orphan Pacific, Inc., a subsidiary thatthe same time, net sales have climbed 2.2 times with the Group reportinga guide, over the long term. While continuing to maintain stability in

In addition, the Group is yet to incur any significant direct impact despite

functions as a pharmaceutical company, contributes to the expansion

sales growth for 30 consecutive years. Throughout the first half of the 30

its finances, CMIC has set as its policy investments in growth that will

the social instability and ongoing concern surrounding business activitiesof business opportunities for the entire Group by developing ayears since our establishment, we worked to build an earnings structure

function to achieve the key points of focus of its mid-term management

attributable to the actions taken by Russia in Ukraine in February 2022.

solutions business that utilizes each business function of the CMIC

for our personnel business with a focus on CRO. Then, in 2005, weplan, namely, evolution of the healthcare business, comprehensive support

With the aforementioned in mind, the Company’s cash flow and financesGroup, which other pharmaceutical companies do not provide.

changed our financial character with the addition of the CDMO Business,for disease prevention, treatment R&D, and marketing, and contribution

are stable at this time.

For example, this business can meet the needs of overseas-basedwhich requires production facilities. In 2015, the CMIC Group promoted

to a sustainable society through services with high social benefits . Whilepharmaceutical companies with no presence in Japan that seek to sell

Project Phoenix, an initiative to realize sustainable growth amid calls formaintaining the CRO Business as the foundation of our business portfolio,

just a single drug product.

change in the pharmaceutical industry, including the shift from a model

we are transitioning to a structure that allows each business to grow while

In the fiscal year ended September 30, 2022, 40% of sales in thedependent on longlisted products to one with exceptional drug discovery

improving profitability. As we look ahead to the domestic CRO market’s

Healthcare Solutions Segments generated 72% and 28%, respectively,

Healthcare Solutions Segment came from the Site Support Solutions

capabilities. In the fiscal year ended September 30, 2016, we set a course

maturation, we are accelerating our efforts to develop globally, and will inof the CMIC Group’s consolidated net sales. These businesses utilize

Business and 60% from the Healthcare Revolution Business. Whileto eliminate loss-generating businesses and reform the cost structure, andthe medium- to long-term grow our healthcare domain business from thetheir respective human resources, equipment, and intellectual

generally around 10%, our operating margin in the Site Support

together with building a system for agility in management so as to quickly

drug-related business.

property. However, as personnel services represent the Group’s

Solutions Business, which focuses on personnel activities , surged torespond to changes in the healthcare and pharmaceutical industry, we

Our investments for growth consist of human resources, the healthcare

mainstay business, labor costs take up 60% of total costs (cost of sales

21% in the fiscal year under review. This was due to the upswing in

began offering a new solution (IPM) that combined an implementation

business, new development of orphan drugs, M&A and other activities. In+ SG&A).

support for medical institutions and other needs, including support

framework with the ability to provide the pharmaceutical business value

particular, our largest investments will go to human resources as part of our

Looking at a breakdown of sales in the Pharmaceutical Solutions

for the development of vaccines and therapeutic drugs for new

chain held by the CMIC Group with approvals (intellectual property) for

future growth strategy. We will promote employee growth by hiring human

Segment, 50% comes from the CRO Business, 30% from the CDMO

coronavirus infections, call center projects, and clinical trials (research).

manufacturing and sales. In April 2018, CMIC launched Project Phoenix 3.0

talent of a higher caliber and conducting ongoing education and training

Business, and 20% from the Market Solutions Business. The CRO

The primary focus of this business is on our operations to support

to promote global contract responses under a new management system led

to secure human resources that can act on a global stage and lift the level ofBusiness is highly profitable and maintains an operating margin atclinical trials for medical institutions, which is driven by the Siteby the CEO, who is responsible for Group management strategy, and theour technological capabilities.

around 15 to 20%. As a human resources-focused business that does

Management Organization (SMO). Here, we are working to improve

COO, who is responsible for Group business execution. In response to the

While procuring funds for M&A activities with shareholders’ equity andnot require a large budget for capital investment, this business offers

business efficiency and bolstering collaboration with leading medical

substantial impact of COVID-19 on the business environment, we launchedlong-term loans payable, we look to maintain the debt/equity ratio at noexcellent capital efficiency. A majority of expenses are made up of

institutions.

Healthcare Revolution 2.0 in July 2020 and promoted the use of digital

more than 100%. Our intent is to actively incorporate external management

In providing solutions that employ a new ecosystem of healthtechnologies in the healthcare field among other new initiatives. CMIC

resources gained through M&A activities, and in doing that we will placeresource management. Although new drug development temporarilycare to individuals and such entities as local governments, thepositioned the fiscal year ended September 30, 2022, which marked theparticular emphasis on accelerating our progress within the Healthcare

stalled owing to the spread of COVID-19, project inquiries are

Healthcare Revolution Business has experienced significant growth

30th anniversary of the Company’s founding, as the first year of its third

Revolution Business while maintaining our attention on capital costs.

increasing as the development environment improves.

in its vaccination support services that help counter the pandemic,

founding. In addition to promoting drug development and digitalization

We will make determinations on M&A activities that will be conditional

Meanwhile, the CDMO Business requires capital investment withutilizing the Group’s professionals certified by CMIC’s unique in-using new basic technologies for drug discovery, we are working to expand

upon their ability to contribute to CMIC’s business, and the hurdle rate, or

operating income impacted by plant equipment operation rates.

house training & certification system. CMIC is undertaking upfront

our business domain into the healthcare field and promote support forminimum rate of return, is set at 8%, as a rough guide.

Engaged primarily in the contract-based production of long-listed

investments aimed at creating healthcare businesses that utilize

efforts to provide total care for diseases from prevention to diagnosis,

drugs, CMIC has continued to feel the impact of the government’s

digital technologies including harmo®* in a bid to contribute to thetreatment and prognosis. Through these means, we are strengthening our

Policy with Regard to Shareholder Returns

policy to promote generic drugs. Despite the aforementioned, we are

early detection of disease and prevention of further aggravation.

business foundation with the aim of securing sustainable growth.

Our basic policy is to prioritize the distribution of profits to shareholders

currently working to increase operation rates by expanding contract-*harmo®: Healthcare Communication Channel based on an electronic pharmacy
handbookbased production including new drugs and expect profitability to
improve in the medium term. The new injection drug manufacturing

as one of our key managerial policies and to distribute performance-

Financial Strategy Going Forward

based dividends while securing retained earnings to improve earnings and

CMIC is promoting a strategy for growth conscious of the need forstrengthen our corporate base. We make steady and stable distributions withbuilding at the Company’s Ashikaga Plant, which manufactures

Looking Back at Financial Results

sustainable management. Given this, we are focused on firmly securing

a target 30% consolidated payout ratio. At the same time, the Company will

antibody, anti-cancer, and other injectable drugs, became fully

In line with its sustainable business growth and expansion, the CMIC

from within profits the investment funds required for future growth, andpurchase treasury stock flexibly, taking into consideration stock market trends,

operational from the fiscal year ended September 30, 2022.

Group’s total assets have increased by 2.5 times over the past 10 years. At

to that end, have set our sights on securing a 10% operating margin, as

capital efficiency, and other factors.

Business Activities Report 2022

Data Section

labor costs, and therefore every effort is made to ensure appropriate

Framework for Supporting Sustainable Growth

In the fiscal year under review, the Pharmaceutical Solutions andBusiness Activities

local governments and workplaces progressed, and measures to alleviate

Earnings Structure by Segment

12

Profit/Loss (Fiscal year)
Net sales
Operating income
Financial Condition (Fiscal year-end)
Total assets
Cash and cash equivalents
Interest-bearing debt
Net assets
Key Indices
Operating margin (%)
Return on equity (ROE) (%)
Return on assets (ROA) (%)
Equity ratio (%)
Net D/E ratio (times)

Value Creation Story of CMIC(CFO Interview)¥ million

Business Activities Report 2022

13

Business Activities

Pharmaceutical Solutions

In the current consolidated fiscal year, as part of our efforts to address the key issues in our mid-term plan, we focused on sales
activities to propose business solutions for local governments that support local communities in terms of both digital and humanresources, and to win new contracts for pharmaceutical development and manufacturing.
The invasion of Ukraine by Russia in February 2022 has caused social instability and there continues to be concern about the impact
on our business, but there has been no significant direct impact on our Group in the current fiscal year.
In the current consolidated fiscal year, net sales amounted to 108,461 million yen (up 26.4% year on year), operating income
to 11,845 million yen (up 140.7% year on year), ordinary income to 13,450 million yen (up 164.2% year on year), and net income
attributable to owners of the parent was 8,387 million yen (up 314.5 year on year), significantly exceeding the previous consolidated

108,461

Net Sales (¥ million)

Comprehensive support for
research and development ofdisease prevention and treatment

CRO
Business

Healthcare Solutions

Site Support
Solutions
Business
Personal Health
Value Creator

Comprehensive support of
medical institutes and medical
staff

fiscal year, thanks to significant growth in vaccine development and vaccination support services for new coronavirus infection in the
Healthcare Solutions Segment and solid performance in various businesses in the Pharmaceutical Solutions Segment.

Value Creation Story of CMIC

Consolidated Results for the Fiscal Year Ended
September 30, 2022

Support individuals, local
governments, etc. withsolutions using a new
ecosystem of health care

Development and manufacturing
support for pharmaceuticalproducts and biopharmaceutical
API from clinical to commercial

CDMO
Business

Medical, sales and marketing
support for pharmaceuticals, andorphan drugs development tocommercialization

MarketSolutions
Business

Healthcare
Revolution
Business

Business Activities

85,78850,934

52,83655,90462,03965,282

69,86974,37376,098

Pharmaceutical Solutions
Sales Composition Ratio

2014/92015/92016/92017/92018/92019/92020/92021/918.1%

2022/9FY2021
Sales

Operating Income (¥ million)

JPY

11,845

Operating Margin

10.9%

31.0%
5.4%
2.5%

4,156

3,363

2,766

6.0%

6.2%

5.9%

3,897

4,321

4,405

2014/92015/92016/93.4%

2018/92019/92020/92021/92022/9

Sales increased from the previous consolidated fiscal year●

Increased inquiries for development projects●

Partnership with Science 37® to promote Decentralized Clinical Trials (DCT) andspeed up drug development; more trials incorporating DCT (telemedicine, homenursing, ePRO, etc.)●

In the bioanalysis business, CMIC supports drug discovery in cutting-edge areas
where modalities are diversifying, such as next-generation biopharmaceuticals
and gene therapy drugs

Sales (¥ million)
Business Segment Profit Rate
40,28534,954

13.8%

Net Sales

85,788 million

JPY

Operating Income
JPY 4,920 million
Operating Margin
5.7%

CRO Business
CDMO Business
Market Solutions
Business

Operating Margin
6.1 %FY2022Net Sales

JPY

31.5%

108,461million
Operating Income
JPY 11,845million

79.2%

Operating Margin
10.9%

12.5%

71.6%

2021/914

Business Activities Report 2022

Data Section

28.4%
FY2021

Operating Income
JPY 4,752 million●

Healthcare Solutions

20.8%

51.2%

78,188million

CRO Business

Sales Composition Ratio
Pharmaceutical Solutions

Sales

JPY

4,920

2,605

2017/9Operating Margin
4.6 %FY20225.7%

1,411
2013/950.9%

Operating Income
JPY 3,127million

8.2%
5.2%

68,392 million

17.3%

Framework for Supporting Sustainable Growth

2013/92022/9Business Activities Report 2022

15

Business Activities

CDMO Business
Sales increased from the previous consolidated fiscal year●

Growing need to ensure stable supply in response to the spread of new coronavirus
infections and generic quality issues

Sales Composition Ratio

Sales (¥ million)
EBITDA Margin
24,851●

Rising prices for energy, raw materials, and packaging materials in manufacturing●

Respond to supply shortage risks, such as prolonged delivery times, in cooperation withcustomers and suppliers●

Value Creation Story of CMIC●

Healthcare Solutions

FY2021

FY2022

Sales

21,284JPY

49.3%

Delayed recovery in US performance, focus on acquiring new projects

17,958 million
Operating Income
JPY 3,159million

17.3%

Sales

50.7%

Operating Margin17.6 %

59.4%

JPY

40.6%

31,007million

Operating Income
JPY 8,660million

Site Support Solutions
Business

Operating Margin
27.9%

Healthcare Revolution
Business

15.6%

Site Support Solutions Business
Filling and freeze-drying process at the newly
constructed Ashikaga Injection drug manufacturingbuilding

2021/92022/9

Sales increased from the previous consolidated fiscal year●

Acquired new projects and made steady progress in existing projects in MR dispatch services●

Launched the development of glycerol phenylbutyrate (overseas trade name Ravicti®) for thetreatment of urea cycle disorders in Japan

Sales significantly exceeded the previous consolidated fiscal year●

Increase in development projects for vaccines and therapeutic drugs for new coronavirus●

Needs for clinical trials (research) and other support for medical institutions are expanding●

Promote collaboration with academia

9,694

Site Management
Organization (SMO)

Med Concierge Service

Patient Recruitment

Patient Support Program

13.5%

12,472

MR solutions

MA solutions

Training
Customer service reps

Nurse educators

Commercial

Non-commercial

MR personnel dispatch
Full outsourcing
Syndicated sales force, etc.

Business Segment Profit Rate
13,595Face-to-face channel

Consulting
MSL personnel dispatch
Training, etc.

Remote detailing service

20.9%

Call Center

Sales (¥ million)

Human resources business centered on the dispatch of MRs

Business Segment Profit Rate
13,371

Framework for Supporting Sustainable Growth●

Sales (¥ million)●

infections and needs for call center projects

Market Solutions BusinessBusiness Activities

Newly constructed Ashikaga Injection drug
manufacturing building for high-potency drugs(anticancer drugs, etc.)

Specific Health
Guidance

2021/92022/9Healthcare Revolution Business
7.2%

Patient support program
Virtual MSL
MA academy

7.2%

●

Sales significantly exceeded the previous consolidated fiscal year●

Municipal support services greatly expanded from vaccination support services for new
coronavirus infections●

Expansion of businesses that integrate disease prevention, health information, and IT technologies

・OKEIOS Inc., a developer of data management platforms for healthcare information coordination, became an
equity-method affiliate

2021/9Remote channel

Sales (¥ million)
Business Segment
19,539Profit Rate・Developing self-testing services such as the launch of the Frailty* testing kit “FrailSign” and Proofof Concept (POC) for stress checks

2022/9●Promote the use of harmo® as a Healthcare Communication Channel in PHRs, etc.

Data Section*Decline in physical and cognitive functions

Development and sale of orphan drugs

9,438
Municipal support
network

31.8%
23.7%

local
governments

Dantrium®
16

Business Activities Report 2022

Rasilez®

Buphenyl®

Municipal support
services

Electronic prescription handbook harmo®

2021/92022/9Business Activities Report 2022

17

Framework for Supporting Sustainable Growth

Sustainability

Development of and Active Participation by Human Resources
Value Creation Story of CMIC

We at the CMIC Group will continue to change and take on new challenges. Not resting on our laurels, we will innovate and open up
possibilities from new perspectives. With each and every employee taking on the challenge of creating new value, we are providing

Basic Policy and Promotion Framework

opportunities to excel while fostering human resources so that they are able to fully live every moment.

HR Vision CMIC Group Basic Human Resources Policy

Essential Conceptst
The essential sustainability concepts held by the CMIC Group are laid out in its CMIC’S CREED corporate philosophy.
The CMIC Group Code of Conduct requires all executives and employees of the CMIC Group to engage in corporate activities based on

To realize CMIC’S CREED, Vision, and Mission, the CMIC Group has formulated a basic human resources policy, based on
which we implement human resources strategies and various human resources measures.

this CMIC’S CREED and related Mission, Vision, and Values, and to act proactively to achieve sustainable growth, enhance corporate value
over the medium to long term, and resolve social issues while complying with laws and regulations.
In identifying and incorporating key sustainability issues into its medium- to long-term strategies, the CMIC Group formulates andimplements various measures through its business activities in a bid to realize sustainable management. In this manner, every effort ismade to secure the sustainable development of society and sustainable growth of the Group.

1. Creating People who aspire to self-evolve and take on challenges on their own
We support all employees who are motivated to change themselves so that they can provide new value to people and society
quickly. We will provide opportunities for employees who are willing to take on challenges and to learn to transform themselvesto grow.
2. Respect differences and provide an environment in which people can openly face others in earnest• CS management• Compliance conformity• Info security steps

3. Realization of fair evaluation and treatment• GXP actions

Sincere corporate
activities
Healthcare
providers /patients

Business Activities

We will create a trusting workplace where everyone respects each other, and where everyone can face each other with sincerity.
A diverse range of personnel are active in the CIMIC Group. Employees with various ideas, regardless of nationality, age, gender,etc., will go beyond organizational boundaries and positions to work together to achieve their goals.

Clients

Valuing
peopleShareholders

CREED• Info disclosures / IR
• Shareholder returns• CGC actions• Strengthened audit
functions

Human rights respect
Labor practices

Framework for Supporting Sustainable Growth

Environmental
consideration

We will fairly evaluate the new values we have created and reflect it in our compensation(remuneration, promotion, demotion,
assignment, etc.). We conduct fair and convincing personnel evaluations based on daily communication and feedback that alignwith targets. In addition, by rewarding employees adequately with appropriate treatment, each employee can feel a sense ofsatisfaction in their work.

HR Strategy_IKIGAI 1.0
Personal Business Value

Social harmony
Local
communities

Employees• Human rights respect / education• Work-life balance• Diversity• Workplace safety / health• Work ease

• Social contribution activities• Communication with locals

Sustainability Promotion Framework
1. Establishment of the Sustainability Committee
The CMIC Group works diligently to resolve social issues while enhancing its corporate value over the medium to long term throughbusiness activities based on CMIC’S CREED. With this in mind, the Group established the Sustainability Committee to promote more
2. Role of the Committee
The Committee is responsible for developing an overall plan for the Group’s sustainability activities, monitoring progress, and evaluating

New Work Style & Space
Fulfilling multiple roles beyond their organizations and positions, employees work agilely on a project basis without being bound bytime and place. The Company aims to provide environments in which all employees can be themselves and work with “IKIGAI” anytime,
anywhere, together with the opportunities, tools, and resources that support co-creation as well as new work styles that transcendorganizations and positions.
Respect Each Other (Diversity & Inclusion)
By respecting each other’s individuality and lifestyle differences and maintaining psychological safety, we aim to continue evolving
through frank discussions and agile trials and learning in our organizations and projects.

Employee Experience
The CMIC Group aims to provide an Employee Experience that maximizes IKIGAI so that employees can work for the Company for a longtime while realizing their own IKIGAI.
Ratio of Mid-career Hires
We are actively recruiting both new graduates and mid-career hires.

the status of results. In addition, the Committee reports and makes recommendations to the Board of Directors on a regular basis.
3. Composition of Committee Members
The Committee is chaired by a representative director. Members include Group directors, senior management, and other executive
personnel. Subcommittees on such issues as the environment, human resources, and social contribution activities will be established

Data Section

effective sustainability initiatives.

Leading to the realization of CMIC’S CREED, Personal Business Value expresses the value that employees autonomously demonstrate
through their roles and missions. Each employee chooses a role and work style that suits his or her lifestyle and, by demonstrating sustainable
Personal Business Value, aims to proactively engage with society and work with the CMIC Group for a long time while pursuing IKIGAI.

Ratio of Mid-career Hires

2019

2020

2021

75.3％

63.6％

70.4％

*Scope: CMIC HOLDINGS Co., Ltd., and domestic consolidated subsidiaries*Period covered: Total for April to following March of each fiscal year

within the Committee to promote sustainability-related initiatives.

18

Business Activities Report 2022

Business Activities Report 2022

19

Framework for Supporting Sustainable Growth
Healthcare Professional * Human Resources
The environment surrounding the medical and healthcare fields continues to undergo major changes, including the evolution ofroles. We have introduced an in-house certification system, the Healthcare Professional Certification System, as a measure to develop
human resources who can flexibly respond in the medical and healthcare fields by making use of the skills and experience they havecultivated.

*Healthcare Professional：CMIC’s unique in-house certification system to cultivating professionals

The CMIC Group has embodied its ideals of “bringing about innovation in healthcare fields, so that all may stride forth true to

Value Creation Story of CMIC

technology and expansion of community healthcare. As a result, individual employees are being required to face the challenges of new

Approaches to Diversity
themselves in this one and only life, regardless of age, gender or race” and “whether when the radiant flower of youthful vitality
blooms, or as life matures in later age, every desire to live fully in the moment is equally precious” within CMIC’s CREED.
It is upon the basis of these ideals that we hold up diversity as a management theme of great importance, and lend ourselves toconcepts and thinking that enrich by venerating all forms of variety. Diversity in the CMIC Group is not limited to personnel policies

Healthcare Partner

1,811

Healthcare Advisor

853

Healthcare Producer

54

focused on women alone, and by venerating the ways in which our work and thoughts mutually differ, to arrive at yet higher caliber
discussion and outcomes, whilst celebrating our variety, it is held up as something that makes us a company able to deliver highperformance. We believe that the employment of diverse personnel, irrespective of race/gender/disability, the veneration the contrasts*As of September 30, 2022
Healthcare Partner (Human resources who have completed basic training in health knowledge and can identify issues)
Healthcare Advisor (Human resources who have completed development training in health knowledge and can solve problems)Healthcare Producer (Human resources who can plan and co-create for the future based on their advanced health knowledge)

between people to find value, and fair treatment regardless of dissimilarity are indispensable for business growth, and incorporate
these beliefs into our advancement of diversity.

Diversity & Inclusion
Irrespective of gender, age or disability, we contribute to resolving social issues by conducting business that utilizes the strengths ofdiverse human resources on the basis of having the right people in the right place.

Human rights/Labor practices/Health and Safety
The CMIC Group’s management philosophy, CMIC’S CREED, is to bring innovation to healthcare so that all people, regardless of age,

Business Activities

gender or race, can live their one and only lives according to their own will. Based on this philosophy, we respect the human rights ofBusiness Environments in Which Women Can Easily Excel
2020

2021

2022

Ratio of females

55.4％

55.3％

56.0％

Ratio of males

44.6％

44.7％

Female manager ratio

27.9％

Female director ratio

10.2％

Gender Pay Gaps

all stakeholders involved in our business, including patients, medical professionals, employees, and contract workers. For this reason,
2022

CMIC Group employees are working to acquire and establish the ethics and compliance knowledge required of healthcare professionals

All workers

71.5％

through regular education and training. We will create work environments that show our consideration for health and safety as well

44.4％

Regular workers

76.5％

as conduct health promotions so that employees can demonstrate their abilities to the fullest and work with a sense of reward and

24.5％

24.6％

Non-regular workers

53.8％

fulfillment.

10.3％

14.1％

*Scope: CMIC HOLDINGS Co., Ltd. and domestic consolidated subsidiaries*Ratio of women’s wages to men’s wages*Scope: CMIC HOLDINGS Co., Ltd., CMIC Co., Ltd., CMIC Pharma Science Co., Ltd.,CMIC CMO Co., Ltd., CMIC Ashfield Co., Ltd., CMIC HealthCare Institute Co., Ltd.,CMIC Solutions Co., Ltd.

Human rights
Framework for Supporting Sustainable Growth

The scope of the CMIC Group’s business activities encompass and impact a wide range of stakeholders, including suppliers, customers,
and business partners and are also deeply connected to stakeholders’ human rights. The CMIC Group Human Rights Policy clarifies ourcommitment to respect human rights as a company and represents our promise to reflect this in our business activities.

Employee Ratio by Age GroupWe believe that highly experienced senior human resources are highly valuable because they possess a wide variety of pharmaceuticalsrelated experience. The Company is making the most of that experience by, for example, being accepting of senior human resources fromoutside the Company who have retired or who are approaching retirement age.

1. Basic Approach to Human Rights
We understand that our business activities may affect human rights and promise to respect them.

(Age)

2020

2021

2022

0-14

-

-

-

15-19

1.1%

1.0%

0.9%

20-29

20.8%

20.4%

19.6%

30-39

30.9%

28.7%

28.0%

40-49

28.4%

28.3%

28.1%

50-59

14.1%

16.2%

18.1%

60-65

3.8%

4.2%

4.2%

66-

1.0%

1.1%

1.0%

2020

2021

2022

88

88

94

1.45%

1.41%

1.46%

We will comply with the human rights laws of each country and regions in which we operate.
3. Human rights in the workplace
We will respect diversity, prohibit all forms of discrimination and harassment, and comply with laws and labor practices
domestically and internationally.
4. Training on human rights
Regular educational sessions are provided to all directors and employees. Separate training sessions for management arealso provided.
5. Human rights remedies
In the event of a human rights breach in connection with our business activities, we will take remedial measures bygrasping the situation and taking appropriate measures.

Data Section*Scope: CMIC HOLDINGS Co., Ltd. and domestic consolidated subsidiaries

2. Comply with national laws and regulations

Employment of People with Disabilities
Number of employees withdisabilities
As a percentage of all employees*Scope: CMIC HOLDINGS Co., Ltd. and domestic consolidated subsidiaries

20

Business Activities Report 2022

Business Activities Report 2022

21

Framework for Supporting Sustainable Growth

Health Management Initiatives

Labor practices
Under the CMIC Group Human Rights Policy, we promise to support and respect the following international norms.

International Bill of Human Rights, which stipulates the fundamental human rights of all people (Universal Declarationof Human Rights, International Covenant on Civil and Political Rights, International Covenant on Economic, Social andCultural Rights)●

Value Creation Story of CMIC●The CMIC Group has declared that it will work to create a system that prioritizes health maintenance.

CMIC Group Health Declaration
What the CMIC Group is aiming for is the health of its employees and a sound organization.
The CMIC Group declares that it will work on creating a system that prioritizes health maintenance while, in accordance withILO Declaration on Fundamental Principles and Rights at Work (including the core labor standards of prohibition of childthe spirit of CMIC’S CREED, actively supporting its employees and their families in leading fulfilling lives and creating workplaces

labor, prohibition of forced and compulsory labor, elimination of discrimination and recognition of the right to freedom

where all employees can find their work rewarding.

of association and collective bargaining) of the International Labor Organization (ILO), which provides for fundamental
rights at work

CMIC Group Health Policy●

Convention on the Rights of Workers, including Wages and Working Hours●

United Nations Declaration on the Rights of Indigenous Peoples① Utilizing the various expertise of the CMIC Group, we actively support independent health management for each employee andeach and every employees’ family member.

●

United Nations Global Compact Ten Principles●“Ethical Principles of Medical Research for Human Subjects (Declaration of Helsinki)”② In conjunction with efforts to reform work styles and promote diversity, we will promote the creation of workplaces where
diverse employees can play active roles, such as maintaining and promoting the health of employees and their families,
achieving work-life balance, and improving productivity.
Chief Executive Officer (CEO) / Health Declaration

Through regular education and training, CMIC Group employees are striving to acquire and instill the ethics and complianceknowledge required as professionals engaged in healthcare.

Group company executives / Health promotion managers

Health Management Promotion System
Playing a central role in health management are all
The Human Resources Health Promotion Group will

Participation Rate for Each Item

Composition: Officers/
Employees/Industrial physicians/
Public health nurses

strongly encourage the planning of specific measures inCompliance

2020

2021

2022

99.4%

96.0％

97.7％

99.4%

96.1％

97.5％

Quality management

99.4%

96.3％

97.3％

Management of Conflict of Interest/
Anti-Bribery and Corruption

99.4%

96.5％

96.9％

Information security

99.4%

98.6％

96.6％

Harassment prevention

99.4%

98.5％

95.9％

cooperation with the health insurance associations andGroup companies. Employees and the revitalization of

Active participation of Group employees and their families

the CMIC Group.

Health management / Disease prevention / Healthcare literacy improvements

CMIC Group Health Challenge 2022
and working styles, the CMIC Group is aiming for robust growth by

Establishment of Whistleblower Hotline
Having set up a whistleblower hotline as a point of contact for consultations relating to internal legal violations, misconduct,labor-related issues, etc., we have established a system for promptly responding to incident reports and risks.

creating working environments and systems that prioritize healthmaintenance for its employees.
In promoting health and productivity management, the
Human Resources Health Promotion Group is cooperating with

Unit: Number of incidents

Types and Numbers of Disciplinary Actions

Unit: Number of actions

2020

2021

2022

Dismissal001

Other than dismissal

10

6

8

health insurance associations and all Group companies while
striving for health promotion among Group employees and

2020

2021

2022

Overall work
environment

3

4

3

Harassment related

6

29

34

Other

14

23

20

as a priority measure and advances initiatives for

Total

23

56

57

“disease prevention (prevention of severe illness)”

their families.
Health Challenge 2022, which summarizes the
specific initiatives, both defines “health management”

that stay true to the CMIC Group. Moreover, we
also recognize that a greater level of healthawareness among the Company, organization,

Included in the CMIC Group are companies that possess production facilities and conduct business operations with particularand every employee is essential for healthattention to occupational health and safety in their production-related operations.

and productivity management. Likewise,

Number of fatalities

Number of Occupational Accidents

2020

2021

2022

0

0

0

*Number of cases reported by CMIC HOLDINGS Co., Ltd. and domestic consolidated
subsidiaries based on Japan’s Industrial Safety and Health Act

22

Business Activities Report 2022

Number of workrelated accidents

we work to improve the health of Group
Unit: Number of accidents

employees and their families by

2020

2021

2022

promoting greater health literacy,

27

14

27

which nurtures the ability to search*Number of cases reported by CMIC HOLDINGS Co., Ltd. and domestic consolidated
subsidiaries based on Industrial Safety and Health Act

for, properly understand, and apply
health and medical information.

Healthmanagement① Regular health checkups(insured persons: 100%,
dependents: 70%)
② Special health guidance(80% of support completed among
eligible persons)③ Stress checkups (100% implemented)

Disease prevention(prevention of severe disease)④ Infection prevention measurepromotion⑤ Implementation of healthpromotion planning with regard
to diet, sleep, exercise, etc.
(Meals) Hosting of events toencourage the eating of vegetables(Sleep) Ascertaining andresearching of sleep conditions(Common) Continued participationin “Eat, Sleep, Walk” initiative⑥ HPV screening promotion(Including HPV vaccination incentives)⑦ L-FABP screening promotion⑧ Increased use of the “harmo®”
electronic prescription record service⑨ Health consultations at Shibaura
Three One Clinic

Data Section

Health and Safety

Number of Fatalities due to Occupational Accidents

Directors: Officers/
representatives from eachcompany

Execution of measureorganizations will bring about the sustainable growth of

Along with placing importance on diversity among our employees

Number and Types of Incidents

Cooperation

Framework for Supporting Sustainable Growth

Privacy protection

CMIC Group
Health insurance
associations

CMIC Solutions
Human Resources Health
Promotion Group

CMIC Group employees and their families.

Business Activities

Compliance Training⑩ Disease analysis by receipt data
analysis (CH25)⑪ Mental healthcare measures research

Improvement of health literacy (Healthcare Professionals)⑫ Healthcare Professional Certification System promotion⑬ Roll out of measures aimed at raising health awareness among employees⑭ Health promotion information dissemination, sharing, and proliferation (internal and external)
・External: Financial results briefings, Business Activities Report, C-PRESS, company website, etc.
・Internal: Portal site, in-house SNS

Business Activities Report 2022

23

Framework for Supporting Sustainable Growth

Efforts to Address Climate Change

Within the CMIC Group Code of Conduct, the CMIC Group recognizes that tackling environmental issues is an essential prerequisite

With regard to our efforts to address climate change, we are aiming for the sustainable development of society and sustainable

for the continued existence and activities of the corporation, and stipulates that it must take the initiatives in implementing measures

corporate growth. Based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD)—Governance,

aimed at building a low-carbon, recycling-oriented society, addressing environmental risks, and conserving biodiversity.

Strategy, Risk Management, and Metrics and Targets —we are working to respond to climate change and to devise ways to improve

Value Creation Story of CMIC

Efforts to Address Environmental Issues

both the quality and quantity of our information disclosure.
As of September 2022, the CMIC Group conducts business at 47 locations in Japan (including four plants, six pharmaceutical

Governancedevelopment centers) and 14 locations globally (including two plants, one pharmaceutical development center).
With regard to Contract Development and Manufacturing Organization (CDMO) services, which are relatively important from

With regard to governance, we have established a Sustainability Committee, chaired by the Group’s representative director, which

the viewpoint of environmental burdens, our four plants in Japan have acquired ISO 14001 (the international certification standard

formulates overall plans for sustainability promotion activities, monitors progress, and evaluates achievements. These results arefor environmental management systems), with each plant working to reduce environmental burdens according to the location andregularly reported to the Board of Directors, which manages and supervises the sustainability promotion activities carried out by

characteristics of the products manufactured.
CMIC also established an Environment, Health and Safety (EHS) Promotion Committee to continuously review, educate and improve
management systems at our four plants in Japan for the purposes of environmental conservation and employee health and safety
promotion. To reduce the CO2 emissions from our plants, we have been making efforts to convert from heavy oil to LNG (natural gas),
to switch to electricity derived from renewable energy sources, and to maintain green spaces on plant premises. We will realize further
Since the fiscal year ended September 30, 2020, we have been calculating the CO2 emissions not only at our plants but at all our

Strategies
In addition to evaluating financial impact under different scenarios (1.5℃, 4℃), to better assess the impact of climate-relatedrisks and opportunities on our business, we have begun scenario analyses, the details of which are shown in the table below. When
conducting the scenario analyses, we referred to information from the Intergovernmental Panel on Climate Change (IPCC) and theInternational Energy Agency (IEA) as the impacts on our company in 2030 and 2050.
Broad Categorybases in Japan. Going forward, we will use this as a baseline for efforts to reduce emissions intensity. We also began calculating thetotal amount of industrial waste generated from all our bases in Japan. With regard to environment-related plant and research

Sub-category
Policy and regulation

institute management indicators, we will disclose more data per site on an ongoing basis to confirm and improve the results ofGroup environmental management over time. Furthermore, all of our pharmaceutical development centers that conduct non-clinicalTechnology

Transition riskbusiness are also giving consideration to the environment by taking measures to deal with toxic substances and waste.

MarketRisk

LNG satellite facility and small boiler facility

Environmental Data
*1

Scope 1 (thousand tons CO2)

Carp swimming in the final wastewater pond

2021

2022

12

13

14

Scope 2 (thousand tons CO2)*1

30

29

29

Total Scope 1, Scope 2 (thousand
tons CO2)*1

43

42

44

Industrial waste emissions*2
876

1,073

947

Ascertained volume (kL)

152

163

153

*1 Bases in Japan
Scope 1: Direct emissions of greenhouse gases by business operators themselves
Scope 2: Indirect emissions associated with the use of electricity, heat, and steam supplied by other companies*2 Bases in Japan

Declining corporate value due to delays in measures designed tocombat climate change

AcuteIncreased costs of relocating offices and distribution centers in
preparation for natural disasters

Chronic

Increased energy costs associated with increased air conditioning load
due to rising temperatures

24

Business Activities Report 2022

Increased opportunities to receive orders due to increased risk ofinfectious diseases and illnesses caused by climate change

Sub-category
Policy and regulation

Transition risk
Risk

Our Policies in Response
Promoting use of decarbonized and low-carbon energy
Responding appropriately to trends in environmental regulations

Technology

Considering all options relevant to moving away from fossil fuels

MarketResponding appropriately to trends in external environment

Reputation

Setting CO 2 reduction targets and addressing them as business strategy

AcuteStrengthening of business continuity plans

Chronic

On an ongoing basis, considering promoting use of decarbonized andlow-carbon energy

Data Section

CMIC CMO Co., Ltd.

Products and services

Risk Management
The CMIC Group conducts scenario analyses and identifies climate change risks and opportunities to ascertain and assess theimpact of climate change on its business. The identified risks and opportunities are examined, and the Sustainability Committee

ISO 140001-certified Business Sites
Company name

Increase in costs due to rising energy prices, etc.

Reductions in costs and CO 2 emissions by recycling raw materials

Physical risk

Ascertained weight (tons)

Increase in costs associated with investment in energy conversion, such as
introduction of renewable energy facilities

Resource efficiency

Broad Category

2020

Increased costs associated with more stringent environmental regulations

Framework for Supporting Sustainable Growth

Opportunity

Content
Increased costs associated with introduction of a carbon tax

Reputation

Physical risk

Business Activities

reductions in environmental burdens by sharing knowledge among these four plants.

the committee.

and Risk Management Committee work together to report them to the Board of Directors.
Business Site

Certifying Body

Certification Number

Shizuoka Plant

KHK-ISO Center

01ER・157

Toyama Plant

JSA-SOL

JSAE056

Ashikaga Plant

KHK-ISO Center

01ER・140

Nishine Plant

KHK-ISO Center

20ER・1103

Metrics and Targets
Our CO2 emissions are shown on page 28. While ascertaining the situation over time and identifying those areas in need of
improvement, we will give consideration to our CO2 reduction targets, advance the formulation of measures to achieve our goals,
and proceed to determine their effects.

Business Activities Report 2022

25

Framework for Supporting Sustainable GrowthSocial Contribution Activities
We engage in a variety of activities based on the CMIC Group Code of Conduct, ranging from Group-wide efforts to activities

The aim of Rare Disease Day (RDD) is to improve quality of life (QOL) for patients with rare/
intractable diseases through better diagnoses and treatments, with February 28th (February 29th

Value Creation Story of CMIC

that contribute to local communities at each plant, pharmaceutical development centers, branch office, and sales office.

Taking Part in Rare Disease Day (RDD)
in leap years) being so named, and RDD has now been held in 100 countries around the world,
since its inception in 2008 in Sweden.

Support for travel clinic service (medical examination and treatment) in Brazil
CMIC supports annual travel clinic service for Japanese immigrants in Brazil, which has been provided for over three
generations by Dr. Emilio Hideyuki Moriguchi (CMIC’s consultant in Brazil).

Although rare diseases can affect over 7,000 people, diagnoses can often take time because ofpoor awareness, and it has been reported that there is an average 5 year wait before a diagnosis isreached, with patients changing hospital 7 times or more during that time. We take part in RDD
events in Japan so that more people, through RDD activities, will have a deeper understanding ofrare/intractable diseases, and to make possible a society where patients suffering from refractory

Why travel clinic service?
Japanese immigrants arrived in the south of Brazil immediately after the end of the war cannot speak Portuguese and therefore
are not able to visit local hospitals for examination or consultation. Dr. Emilio Hideyuki Moriguchi, Japanese Brazilian doctor,
has provided travel clinic service for such Japanese immigrants living in the south of Brazil for over three generations. There
are many Japanese immigrants who look forward to the annual travel clinic. Dr. Emilio Moriguchi travels in a mobile medical

conditions and those who care for them may live life more at ease.
The CMIC group is involved in clinical trials for numerous orphan drugs (for rare diseases). We wore badges and promoted
consciousness-raising activities for a 1-month period in February 2017, to increase community awareness of these patients on
the part of healthcare practitioners and others, and, to help serve as a bridge between patients and their communities. The
CMIC group will also be lending its support to further RDD activities in future.

van for over 3,000 km every year to reach out to them and provide medical care in Japanese.

Business Activities

CMIC Group’s Involvement
Following the economic growth in Brazil, the amount of public subsidy for the travel clinic service went down and Dr.
Moriguchi’s out-of-pocket expenses have increased as a result. Under such circumstances, CMIC Group has started employee
donations in 2014 in addition to corporate donations. CMIC Group will continue supporting Dr. Moriguchi in his wish to“continue travel clinic service for Japanese immigrants in the south of Brazil.”

Co-hosting of the International Children’s
Drawing Contest
CMIC Group and Nakamura Keith Haring Collection cohost the International Children’s Drawing Contest.
This annual contest started in 2009 as the only drawing
competition officially recognized by the Keith Haring
Foundation. Every year, we invite special guest judges

Framework for Supporting Sustainable Growthfrom art and fashion fields. Award winning entries will
be exhibited for a week after the award ceremony at theKeith Haring Collection Nakamura Keith Haring Collection
Dr. Emilio Hideyuki Moriguchi received
the 50th Anniversary Commendation from the Foundationfor Social Contribution on July 2021

International Children’s Drawing Contest co-organized by
CMIC HOLDINGS Co., Ltd. as part of its social contribution
activities, has been designated for “This is MECENAT2022” by Kigyo Mécénat Kyogikai.

CMIC Award for AIDS Researcher
On November 19, 2022, at the 36th Academic General Meeting of the Japanese Society for AIDS Research held at Act City
Hamamatsu, the CMIC Award was presented to Dr. Shuzo Matsushita of Kumamoto University’s Clinical Retrovirology, Joint
research Center for his achievements in HIV-related research.

Aims and objectives of co-sponsorship by CMIC Group

CMIC Award is presented each year by The Japanese Society for AIDS Research (membership: approximately 2,000 persons)

Keith Haring is one of the most recognizable and representative of the American art scene in the 1980’s. He was involved in

to one person whose innovative and superior achievements have contributed to the development of the Society, throughsocial activities throughout his life such as child welfare education, workshops for children all over the world, and HIV/AIDS

activities in relation to the spread of HIV disease. He is the 19th person toprevention awareness activities. Keith Haring also created murals and wall paintings with children in Tama-city, Tokyo inreceive this award.

1987. CMIC Group has inherited the will of Keith Haring who had always wished for children’s future filled with hope, love, andpeace. We have supported the Annual Nakamura Keith Haring Collection International Children’s Drawing Contest since 2009.

About the Awardee
19th CMIC Award, The Japanese Society for AIDS Research Academic Award
Retrovirus Infection (specially appointed professor)
Dr. Shuzo Matsushita

opportunities for children to freely spread their wings around the global society, and make contributions to the society.
In October 2022, the award ceremony for the 14th Nakamura Keith Haring Collection’s International Children’s Drawing

Data Section

Head of the Kumamoto University Joint Research Center for Human

Our objective is to understand different races, religions, cultures, and environments through supporting the contest, provide

Contest was held at the Nakamura Keith Haring Collection in Kobuchizawa, Hokuto City, Yamanashi Prefecture. As a result of
rigorous judging, 30 of 1,617 entries from around the world received awards, with three of them being awarded the CMIC Award.

Title of achievement: Research on human monoclonal antibody for HIV

26

Business Activities Report 2022

Business Activities Report 2022

27

Framework for Supporting Sustainable Growth

Supply Chain Management

The CMIC Group recognizes that the height of quality (quality of work) connects to customer satisfaction, helps build relationships

The CMIC Group has established the CMIC Group Basic Procurement Policy aimed at the sustainable development of societyof trust with customers, improves the profits of the CMIC Group, and is a management theme of great importance that is essential

and sustained corporate growth.

Value Creation Story of CMIC

Quality Management
for sustainable growth. We are working to improve efficiency by ascertaining customer needs and expectations, and by continuously
improving the quality of all operating processes, not simply the quality of the final product, from the perspective of overall
optimization in working to ensure an “appropriate level of quality” that meets these needs and expectations. Moreover, we are working
to enhance quality management by systematically implementing human resource development through training-based quality

CMIC Group Basic Procurement Policy
We, the CMIC Group, have established the following basic policy on procurement activities, and will conduct fair, impartial andtransparent procurement activities to realize the development of a sustainable society.

education and continuous PDCA-based improvement.

CMIC Group Quality Policy
CMIC Group Top Management has defined the following Quality Policy, to demonstrate commitment to establish and implement
an integrated Quality Management System. CMIC Group aims to provide continually high quality services and products to ourcustomers in order to meet their expectations.

1. Compliance and Corporate Ethics
We will comply with the laws and social norms of each country in which we operate and act on the basis ofhigh ethical standards.
We will strictly maintain the confidentiality of information regarding our business partners which we obtainin the course of business.
2. Relationship with Business Partners

Ensure our customers’ needs and expectations are continually monitored●

Set our Quality Objectives●

Establish effective and efficient operating processes●

Ensure continual improvement in our processes and procedurestransparent.

●

Enhance competence of all employees

In addition, we will not require business partners of unreasonable profits, discounts or services for theBusiness Activities

We will respect our business partners as important partners, and strive to deal with them equally and in●good faith, and to build and maintain mutually cooperative and trusting relationships.
We will select business partners fairly and impartially from the perspective of economic rationality, quality,
delivery time, stable supplies, environment, health, safety (EHS), etc., and make the relationships with themselection of business partners and pricing decisions.
This quality policy is conveyed to all CMIC Group employees.

3. Human Rights
We will respect the human rights of all stakeholders involved in the business activities of the CMIC Group,As part of promoting quality management, under the CMIC Group Quality Policy, the CMIC Group established and implements
an integrated Quality Management System (QMS) in compliance with its Quality Management Guidelines, which identify theelements, frameworks, and actions required to achieve the CMIC Group Quality Policy. Our QMS ensures that incidents that haveoccurred at group companies are quickly reported to top management in positions of responsibility at each company througheach company’s QMS supervisor and manager. Following this, the CMIC Group's QMS manager takes charge of the situation, andprovides management and guidance. We also implement corrective and precautionary measures for problematic cases that occur

and conduct procurement with consideration for the work environment, safety and health.

Framework for Supporting Sustainable Growth

Quality Management Promotion

4. Environment
We will conduct procurement activities with consideration for the global environment.
5. Sustainable Procurement
From the standpoint of sustainability, we aim for procurement that realizes the development of asustainable society in cooperation with our business partners.

during the QMS activity process, and take steps to prevent recurrence of similar problems.
The CMIC Group has established organizational and individual goals as part of the quality targets based on the mid-term
management plan and makes continuous improvements through the implementation of a PDCA cycle in working to strengthen
the Quality Management Framework.

We will also seek the understanding of our business partners involved in the businesses of the CMIC Group in our approach toprocurement activities.

Supply Chain Initiatives
In order for a company to fulfill its social responsibility, it is important to build a relationship of trust and work together not
only internally but also with its suppliers, which are important partners. The CMIC Group works with suppliers to strengthen
supply chain management based on the CMIC Group Basic Procurement Policy—which is a fundamental concept for conducting
procurement activities based on fairness, impartiality, and transparency—and is taking steps to achieve a sustainable society.
For problems and risks related to procurement activities, CMIC maintains systems that enable prompt responses by establishinga whistleblower hotline and implementing incident reporting.

Data Section

Endorsement of the PSCI Principles
The CMIC Group practices responsible corporate behavior as a pharmaceutical company supplier, recognizes the importance ofproperly supporting society and business, and endorses the PSCI (Pharmaceutical Supply Chain Initiative) principles.
*PSCI Principles: Pharmaceutical industry principles for responsible supply chain management.

28

Business Activities Report 2022

Business Activities Report 2022

29

Framework for Supporting Sustainable Growth

Risk Management Framework
Group is directly faced with risk management issues or a management crisis. Based on these rules, the risk management officer

Corporate Governanceappointed by the Board of Directors oversees risk management and crisis management, and promotes risk management as part

Basic Principle of Corporate Governanceof business management across the Group.

As a company involved in the business of supporting human life, the CMIC Group places the utmost importance on ethics andRisk management and incident management serve to centralize information both at the Group and at the individual Group
company level, analyze the information and investigate the cause, promptly convey information, and make an appropriate
response. Important matters are escalated to the risk management officer, who then directs the necessary response.
When a management crisis emerges due to the event of a disaster or some other occurrence, a Group Emergency Response

Value Creation Story of CMICThe CMIC Group formulated the CMIC Group Risk Management Rules from the perspective of addressing incidents where thescience, and believes the basis of corporate governance is to secure the soundness, transparency, legal compliance, and fairnessof management for all stakeholders, including shareholders and customers.
Based on this basic principle, as a holding company the Group endeavors to further improve corporate value by ensuring theefficiency and speed of management decision-making and business execution, clarifying the responsibilities of management,
ensuring compliance, and strengthening risk management.

Headquarters is organized to respond to the event.

Organizational Structure and Framework

Compliance Framework
Based on its Code of Conduct, the CMIC Group strives to disseminate and thoroughly implement the Company Rules, nurture
enable all Group executives and employees to correctly understand this concept and to always put it into practice as part oftheir individual duties.

Code of Conduct Formulation, Measures for Education and Dissemination
As a basic policy with which all CMIC Group executives and employees must adhere from the perspective of complying withlaws and regulations and acting in a manner that conforms to social ethics when conducting business activities, the Group
formulated the CMIC Group Code of Conduct. All Group executives and employees are required to act conscientiously based on
the CMIC Group Code of Conduct, where compliance officers appointed by the Board of Directors are responsible for promoting

10 (4)
44 (3)31) Nomination and Remuneration Committee
This discretionary committee was established to enhance corporate governance by strengthening the fairness andtransparency of procedures related to the nomination of directors and Audit & Supervisory Board member candidates,
appointment and dismissal of representative directors and executive management, and the compensation of directors, Audit& Supervisory Board members, and executive management.
and is chaired by an outside director.
2) Group Strategy Meeting

General Meeting of Shareholders

Appointment/
dismissal

Appointment/
dismissal

This is a forum for formulating and determining Groupbusiness strategy and discussing overall and individual
strategies. Meetings are held quarterly, chaired by the CEO
and attended by senior management who are committee

from and provide consultations to CMIC Group executives and employees regarding compliance-related concerns andmembers (including executive management), with additional

workplace issues. The contact receiving the report or consultation, or the contact office, objectively and fairly investigates andparticipants selected for their relevance to specific agenda

addresses the report or consultation, and promptly works to improve upon the problem and prevent recurrence.

items.
3) Senior Management Meeting
This meeting is held to make decisions regarding major
issues and deliberate and approve matters resolved by the
Board of Directors, among other important items. Held, inprinciple, once per month, meetings are chaired by the CEO
and attended by members who are involved in executive
participants selected for their relevance to specific agenda
items.

Audit andSupervisory Board

Audit

Board of Directors

Coordination

1) Nomination andRemuneration Committee

Audit

Accounting Auditor

Audit

Supervision

Business Execution

Executive Management2) Group Strategy Meeting

Representative Directors CEO, COO

3) Senior Management Meeting

CFO, business managers, etc.

Sustainability Committee
Compliance Committee
Risk Management Committee
Quality Management System
Committee

Data Section

management and business execution, with additional

Management, Supervision

Appointment/
dismissal

Coordination

The Internal Audit Department monitors the enforcement status of compliance among the Group and Group companies.

Chairman CEO

No. of Independent Directors Appointed Among the Outside Directors
No. of Audit & Supervisory Board members(No. of Outside Audit & Supervisory Board members)
No. of Independent Audit & Supervisory Board members Appointed Among theOutside Audit & Supervisory Board members

The committee comprises a majority of outside directors

Group established the “CMIC Group Compliance Reporting / Consultation Desk” internally and externally to receive reports

1 yearBoard of Directors Chairperson
No. of Directors(No. of Outside Directors)

conduct compliance training for executive and employees.

For the purpose of detecting, addressing, and preventing the occurrence of compliance-related problems early on, the CMIC

15

Director Term Under the Articles of Incorporation

WAY Compliance Handbook and distribute it via the intranet to all CMIC Group executives and employees, as well as regularly

Early Detection, Response, and Prevention of Problems

Company with Audit & Supervisory Board

No. of Directors Under the Articles of Incorporation

Framework for Supporting Sustainable Growthsuch behavior. As a part of the Group’s initiative designed to strengthen compliance awareness, the Group produced CMIC

Organizational Format

Business Activities

a corporate culture of conforming to norms, and cultivate compliance awareness. The Group is strengthening initiatives that(As of December 15, 2022)

Responsible for Internal Audits

Info Disclosures Committee
Audit

Business Management Organizations(Corporate Divisions, Group Affiliates)

For details on the compliance status with the Corporate Governance Code, see the Corporate Governance Reporthttps://www.cmicgroup.com/files/user/ir/pdf/cg20221227.pdf (Japanese only)

30

Business Activities Report 2022

Business Activities Report 2022

31

Framework for Supporting Sustainable Growth
Corporate Governance Code Compliance Status◎Inside director candidates and executive management: Comprehensive assessment indicating abundant knowledge and experience in
the Group's business scope, foresight and insight acquired in these areas, leadership, and the ability to make judgments and act, etc.

■ Supplementary Principle 4.8.1: Meetings Consisting Solely of Independent Outside Directors◎ Outside director candidates: Comprehensive assessment indicating sufficient insight to objectively audit management, ability to makejudgments, and abundant knowledge and experience in specialized fields, such as corporate management, finance, accounting, law, etc.

The Company does not take any special measures such as regularly holding meetings consisting solely of independent outside directors.
Each of the Company’s outside directors form their own opinions from their individual standpoints and actively participate in discussions at the Board of
Directors, Audit & Supervisory Board, and other meetings. In addition, the outside directors meet individually with the management as a means of sharing
information and cooperation.
As for the future, CMIC continues to believe that respecting the thoughts and independence of the outside directors will enable active discussion. Moreover,
the Company will continue to expand the opportunities for outside directors and the CEO to exchange information and achieve a shared understanding.

◎Audit & Supervisory Board member candidates: Comprehensive assessment indicating sufficient knowledge and experience in theGroup's business scope, high level of knowledge in finance and accounting, and ability to make objective judgments, etc.
◎Outside Audit & Supervisory Board member candidates: Comprehensive assessment indicating sufficient insight to objectively audit the execution of duties
among the directors, the ability to make judgments, and abundant knowledge and experience in specialized fields, such as finance, accounting, and law, etc.
■ Executive Management Dismissals

The conditions regarding dismissal of executive management are clearly stipulated in the Executive Management Rules. The Board of■ Supplementary Principle 4.8.2: Lead Independent Outside Directors

Directors maintains the power to dismiss executive management in the event of fraud or improper conduct, or in the event executive

CMIC has thus far held individual meetings between the independent outside directors and management as a means of information
sharing and cooperation. However, the Company has not established a framework wherein a lead independent outside director isselected to contact and coordinate with the management or cooperate with the Audit & Supervisory Board members.
As for the future, CMIC feels that individual discussions held between the independent outside directors and management based on
the views of each independent outside director and their cooperation with the Audit & Supervisory Board members will contribute to
the sustainable growth of the Company and to greater medium- and long-term corporate value.

management is judged to be lacking in qualification in light of the above basic policy.

CMIC is a company with Audit & Supervisory Board. While independent outside directors do not constitute a majority of the Board of Director, theCompany has put in place the Nomination and Remuneration Committee, which is centered largely around independent executives as an optionalorganization and advisory body to the Board of Directors.
The Nomination and Remuneration Committee consists of two outside directors and two members from senior management. Accordingly,
independent directors account for half of the Committee. To secure the Committee’s independence, an independent director serves as chairperson.
From each of the diversity and skills perspectives, the Company has sought the advice of the Nomination and Remuneration Committee
regarding the skills matrix attached to the Reference Documents for the 2022 General Meeting of Shareholders.
While information regarding important matter including the composition, authority, and role of the Nomination and Remuneration Committee
are disclosed in the Company’s Securities Report, CMIC will work to upgrade and expand the information disclosed on each of the aforementioned
as well as its approach toward the independence of committees.

CMIC’s Board of Directors requires a composition comprised of individuals having profound knowledge in the healthcare field, including pharmaceuticals
and medical instruments, as well as experts in finance, planning, and other forms of business management. Having this composition, the Group feels its
Board of Directors is sufficiently organized to support the Group’s PVC business model. The Board of Directors includes one woman.
The Group feels that the proper size of its Board of Directors is 10 to 15 members, which takes into account the diversity required to support theGroup's business scope and scale, and ensures diversity from the perspectives of gender and internationality, while still enabling practical discussions.
As far as gender and other diversity as well as skills are concerned, the Company has sought the advice of the Nomination and Remuneration Committee
regarding the skills matrix attached to the Reference Documents for the 2022 General Meeting of Shareholders.

Board of Directors Effectiveness Assessment
Evaluations were collected from the directors and Audit & Supervisory Board members appointed for the period ended September 2021
using questionnaires. These evaluations were then compiled and the effectiveness of the Board of Directors analyzed and assessed.
[Evaluation Items] (1) Board of Directors composition, (2) Board of Directors management, (3) Information sharing with the Boardof Directors, (4) Discussion and decision-making processes

Results
Overview(1) Board of Directors composition: Generally appropriate(2) Board of Directors management: The frequency of meetings and time allotted for discussion are both appropriate.
(3) Information sharing with the Board of Director: Evaluation has improved over successive years.
(4) Discussion and decision-making processes: The number of agenda issues, scope of issues for each question, and sufficient opportunities
to voice opinions were maintained at the previous year's level or increased slightly, while evaluations remain at high levels.
Given the above, the Company feels its Board of Directors functions effectively

Improvement
PointsCMIC recognized that there are issues related to sustainability initiatives, particularly in terms of external communication, and CMIC will therefore
focus on deepening future discussions and overseeing the progress of these initiatives. CMIC will continue to promote improvement measures.

Remuneration for the Company's officers is decided, within the scope of officer remuneration determined at the general meeting of shareholders,by focusing on the relationship of remuneration with operating performance and medium- to long-term corporate value and with amounts
that appropriately reflect shared value with the shareholders and officers' roles and responsibilities. To ensure objectivity and transparency indetermining officer remuneration, remuneration is deliberated by the Nomination and Remuneration Committee, a voluntary body.
■ Remuneration Framework and Recipients

Director remuneration is composed of three parts to reflect in the execution of business a focus on meeting short-term targets for operating performance andraise awareness toward enhancing corporate value over the medium to long term. These parts are basic compensation, which is fixed; officers' bonuses, or shortterm incentive-based remuneration; and share-based compensation (share-based compensation with restrictions on transfer), a type of long-term incentive-based
remuneration. Performance-linked compensation is set to be around 20-30% of total remuneration when performance targets are met.
Outside directors receive only basic compensation, reflecting their role in providing management supervision and advice to the Company and the Group as a whole.
Audit & Supervisory Board members receive only basic compensation, reflecting their role in supervising the execution of operations by directors.
Total Remuneration by Officer Classification of the Submitting Company, Total Remuneration by Type of Remuneration, and Number of Eligible Officers

Officer Classification

Total
remuneration(millions of yen)

Total remuneration by type(millions of yen)Fixed
remuneration

Performancebased
remuneration

NumberTransfer-restricted of eligible
officers
stock-based
compensation

Directors (excluding outside directors)

340

248

92

-

8

Audit & Supervisory Board members(excluding outside Audit & Supervisory Board members)

10

10

-

-

1

Outside directors

39

39

-

-

8

Notes: The above includes two directors including one outside director who retired from office as of the conclusion of the 37th Ordinary General Meeting of Shareholders on
December 15, 2021.

Strategic shareholdings
The CMIC Group maintains a strategic shareholdings policy when there is an important objective, such as the outlook of an
operational alliance or business synergy, in order to sustainably enhance corporate value. With a view to determining the propriety ofsuch strategic shareholdings, each year the Board of Directors evaluates the holding objective, trading conditions over the past year,
and medium- to long-term prospects. In August 2022, the Board of Directors undertook a review and made decisions.
The Group held 13 stocks amounting to a total of JPY 2,864 million on its balance sheet during the fiscal year under review.

Corporate Governance Framework

Data Section

Execution
Process■ Method of Deciding Officer Remuneration

Framework for Supporting Sustainable Growth

Board of Directors Diversity

Officer Remuneration

Business Activities■ Supplementary Principle 4.10.1: Establishment of an Independent Nomination Committee and Remuneration Advisory Committee

Value Creation Story of CMIC

CMIC implements all principles established in the Tokyo Stock Exchange Corporate Governance Code except the following.

As a holdings company, the CMIC Group has established frameworks to ensure that each Group company operates appropriately, including those forallocating the required management resources to each Group company from the perspective of overall optimization and for governing and monitoring

Officer Appointments and Dismissals

the business management of each Group company. Specifically, the Group has defined the management standards for each Group company, establishedDuring the nomination process for director and Audit & Supervisory Board member candidates, and during the appointment process for executive management that serve as top
management, in addition to selecting individuals with a rich law-abiding spirit, excellent character, and superior insight, CMIC maintains a basic policy of selecting individuals
based on the following comprehensive assessments. Further, executive management must also conform to the provisions of the Company’s Executive Management Rules.
Independent officers must conform with our "Independence Standards for Outside Officers."

Group company based on these Rules. Each Group company makes regular reports to and shares information with the Group regarding their operational■ Officer Appointments

32

Business Activities Report 2022

the Affiliated Company Management Rules in order to help mutually raise management efficiency, and formed a Management Agreement between eachprogress, financial standings, and other important matters provided for in the Management Agreement. When important matters are to be executed, prior
to decision-making, each Group company reports on and discusses the matter with the department in charge at the Group and receives the necessary
approval. The Group also dispatches directors to each Group company as a means of improving the governance of the entire CMIC Group.

Business Activities Report 2022

33

Framework for Supporting Sustainable GrowthManagement Team | Board of Directors

As of December 15, 2022

Management Team | Audit and Supervisory Board Members
Value Creation Story of CMIC

Keiko Oishi

Makoto Matsukawa

Wataru Mochizuki

Takanori Tobe

Kei Hata

Hidetoshi Watanabe

Eiko Hakoda

Representative Director,
Chairman and CEO,Division Director of Healthcare
Revolution Business

Representative Director,
President and COO,
Division Director of CRO BusinessCorporate Director, Vice President,
Division Director of CDMO BusinessCorporate Director, CFO,
responsible for Group Information
Disclosure/Internal Control

Audit and Supervisory Board Member

Independent External Audit andSupervisory Board Member
Significant concurrent positions outside
the Company:
Representative, Hata & Co. Law Offices
Lecturer, Graduate School, Rikkyo
University

Independent External Audit andSupervisory Board
MemberSignificant concurrent positions outside
the Company:
Outside Director, Audit and Supervisory
Committee Member, Business Brain
Showa-Ota Inc.
Outside Audit & Supervisory Board
Member, SAN-AI OBBLI Co., Ltd.

Independent External Audit andSupervisory Board
MemberSignificant concurrent positions outside
the Company:
Partner, Mori Hamada & Matsumoto
Outside Corporate Auditor, KITOCORPORATION
Outside Director, Audit and Supervisory
Committee Member, SPARX Group Co.,Ltd.

Business Activities

Kazuo Nakamura

Director and Audit & Supervisory Board Member Skill Matrix
Name

Akihisa Mitake

Masaru Iwasaki

Takeshi Karasawa

Corporate Director,
Division Director of CDMO BusinessCorporate Director,
Division Director of CRO Business(Division Director of Clinical CRO)

Independent External Corporate
Director
Significant concurrent positions outside
the Company:
Vice President, University of Yamanashi
Program Director, Japan Agency for
Medical Research and Development
Visiting Professor, Juntendo University
School of Medicine

Independent External Corporate
Director
Significant concurrent positions outside
the Company:
Outside Director, Value HR Co., Ltd.
Director, Social Welfare Corporation
Sun VisionCorporate
Directors

Finance and Accounting

Independent External Corporate
Director
Significant concurrent positions outside
the Company:
DISEASE MANAGEMENT ASSOCIATION
OF JAPAN Director
Population Health Research Committee
ASIA PACIFIC SOCIETY FOR HEALTHSUPPORT SCIENCES Co-Chair

Independent External Corporate
Director
Significant concurrent positions outside
the Company:
Representative Director, AscentPartners
Outside Corporate Auditor, MORITAHOLDINGS CORPORATION
Outside Audit & Supervisory Board
Member, Wealth Management, Inc.

Business Activities Report 2022

Audit andSupervisory
Board
Members●●

Global Business●

Keiko Oishi

●

●

●

Makoto Matsukawa

●

●

●

Wataru Mochizuki●

Takeshi Hamaura

●

●

●

Akihisa Mitake

●

●

●

●

●

●

●

●

●

Takeshi Karasawa●

Gregg Lindstrom Mayer●

Masaru Ota

●

●

●
●

●

●

Takanori Tobe●

Kei Hata●

Hidetoshi Watanabe●●

Eiko Hakoda

●

●

●

Data Section

34

Masaru Ota

Business Knowledge

Kazuo Nakamura

Masaru Iwasaki

Gregg Lindstrom Mayer

Legal Affairs andRisk Management

Framework for Supporting Sustainable Growth

Takeshi Hamaura

Corporate
Management●

The above list indicates up to three items that are particularly expected of each candidate, and does not exhaustively describe all the knowledge and experience possessed byeach candidate.

Business Activities Report 2022

35

Data Section

10-Year Financial and Non-Financial Highlights
Value Creation Story of CMIC

CMIC HOLDINGS Co., Ltd. and Consolidated Subsidiaries
Fiscal years ended September 30¥ million

2013/92014/92015/92016/92017/92018/92019/92020/92021/92022/9Net sales

50,934

52,83655,90462,03965,282

69,86974,37376,09885,788108,461

Gross profit

12,142

10,887

11,087

13,097

14,237

14,892

16,112

14,646

17,727

26,258Selling, general and administrative expenses

7,985

8,120

9,676

9,733

10,340

10,57011,706

12,041

12,806

14,412

Operating income

4,156

2,766

1,411

3,363

3,897

4,321

4,405

2,605

4,920

11,845

Ordinary income

3,941

2,645

970

2,989

3,732

4,061

3,841

2,867

5,091

13,450

Profit attributable to owners of parent

1,753

1,174

(542)

878

1,550

1,487

1,822

1,505

2,023

8,387

Capital expenditures

4,117

3,253

4,418

5,611

6,372

4,933

5,990

9,063

6,969

8,846

Depreciation and amortization

1,833

1,579

2,314

2,566

2,822

3,127

3,620

4,529

5,161

5,227

Cash flows from operating activities

5,201

2,677

889

6,493

4,937

7,488

4,922

6,703

9,804

11,213

Cash flows from investing activities(4,059)(6,910)(3,461)(4,639)(7,541)(6,203)(4,889)(8,542)(6,685)(8,045)

Free cash flows

1,142(4,233)(2,572)

1,854(2,604)1,285

33(1,839)

3,119

3,168

Cash flows from financing activities(2,587)

3,111

1,904

(2,391)

2,458

7,770

(1,764)2,354(6,348)1,230

Total assets

42,85549,23755,861

59,10465,60578,03480,17989,517

91,192

107,590

Cash and cash equivalents

6,810

5,751

5,638

4,946

4,928

13,976

12,144

12,6889,379

11,703

Interest-bearing debt

9,424

13,40918,06916,08518,89819,27619,196

22,584

17,03917,136

Net assets

19,601

20,30920,667

21,397

23,60833,53632.99434,011

34,48541,269

97.36

65.26

(29.57)

47.00

82.90

79.71

98.93

83.27

111.85469.44

Book value per share

1,086.27

1,123.74

1,087.84

1,122.55

1,222.37

1,215.95

1,231.65

1,306.08

1,385.55

1,801.31

Dividend per share

35.00

35.00

22.50

16.00

27.50

27.50

32.00

25.00

33.50

50.00

Overseas subsidiary sales ratio (%)

3.0

4.9

5.7

5.9

7.3

6.8

7.6

5.7

4.8

5.1

Operating margin (%)

8.2

5.2

2.5

5.4

6.0

6.2

5.9

3.4

5.7

10.9

ROE (%)

9.2

5.9

-

4.3

7.1

6.5

8.1

6.6

8.3

29.6

ROA (%)

4.1

2.5

-

1.5

2.5

2.1

2.3

1.8

2.2

8.4

Equity ratio (%)

45.6

41.1

36.4

35.5

34.9

28.9

27.8

26.4

27.5

29.4

0.13

0.37

0.60

0.52

0.61

0.23

0.32

0.41

0.30

0.17

Stock price at year-end (yen)*

1,342

1,971

1,700

1,532

1,573

2,291

1,716

1,350

1,500

1,528

Price earning ratio (times)

13.8

30.2

-

32.6

19.0

28.7

17.3

16.2

13.4

3.3

Price book value ratio (times)

1.2

1.8

1.6

1.4

1.3

1.9

1.4

1.0

1.1

0.8

Dividend yield (%)

2.6

1.8

1.3

1.0

1.7

1.2

1.9

1.9

2.2

3.3

Employees (consolidated)

3,687

4,192

4,473

4,539

4,704

4,962

5,344

5,464

5,569

5,651

(of which average number of temporary employees)

1,068

1,170

1,327

1,368

1,409

1,499

1,567

1,581

1,772

1,995

Profit and Loss (For the Year)Business Activities

Cash Flows (For the Year)

Financial Condition (Year-end)

Framework for Supporting Sustainable Growth

Per Share Data (Yen)
Earnings per share

Key Indices

Net D/E ratio (times)
1

Data Section

Non-Financial

36

Business Activities Report 2022

Business Activities Report 2022

37

Data Section

Non-Financial Highlights
Value Creation Story of CMIC

Sustainability Focus

CMIC HOLDINGS Co., Ltd. and Consolidated Subsidiaries
Fiscal years ended September 30

Employment Initiatives for People with Disabilities
Non-Financial
Employees (consolidated)(of which average number of temporary employees)
Male-female ratio
Female（％）Male（％）
Ratio of female officers(%)*1
Female manager ratio(%)*1
Gender pay gap(%)*2

2020/92021/92022/9

5,464
1,581

5,569
1,772

5,651
1,995

55.4
44.6
10.2
27.9

55.3
44.7
10.3
24.5

56.0
44.0
14.1
24.6
71.5
76.5
53.8
0.9
19.6
28.0
28.1
18.1
4.2
1.0
70.4

No. of persons
Ratio of all employees (%)
CO2 emissions*3

88
1.45

88
1.41

94
1.46

12
30
43

13
29
42

14
29
44

876
152
23
3
6
14

1,073
163
56
4
29
23

947
153
57
3
34
20

0
10

0
6

1
8

0
27

0
14

0
27

99.4
99.4
99.4
99.4
99.4
99.4

96.0
96.1
96.3
96.5
98.6
98.5

97.7
97.5
97.3
96.9
96.6
95.9

Business Activities Report 2022

this in mind, we have devised work environments and styles that promote the creation of workplaces where everyone canplay an active role.
CMIC Well gathers a diverse range of jobs from every Group company, enabling employees to experience a variety oftasks on a daily basis. The scope of work has expanded over the years to include growing organic JAS-certified strawberries
and vegetables, packing and shipping shareholder gifts, cleaning offices, labs and lodging facilities, data registration, andfiling. To enable employees to fully express their individuality, the Company assigns tasks and roles according to each
employee’s personality and disability characteristics after gaining experience in regular tasks, promoting the creation of aworkplace where people can make the most of their strengths.

Packing and shipping of curry andvegetable boxes for in-house sales and
CMIC Group shareholder gifts
Cleaning offices,laboratories, lodging facilities

Data
registration

Administrative
work

Cleaning

Agriculture(strawberries, melons,
cucumbers, sweet potatoes,
shiso, mint, black currents, etc.)

FilingAntigen test kit
sealing work
Golf course
grading work

Data Section

1.0
20.4
28.7
28.3
16.2
4.2
1.1
63.6

We want everyone to more fully express their individuality and shine with a sense of fulfillment and purpose in life. With

Framework for Supporting Sustainable Growth

1.1
20.8
30.9
28.4
14.1
3.8
1.0
75.3

*1. CMIC HOLDINGS Co., Ltd., and domestic consolidated subsidiaries*2. The percentage of wages earned by females compared with wages earned by males
Scope:CMIC HOLDINGS Co., Ltd., CMIC Co., Ltd., CMIC Pharma Science Co., Ltd., CMIC CMO Co., Ltd., CMIC Ashfield Co., Ltd., CMIC HealthCare Institute Co., Ltd., CMIC Solutions Co., Ltd.
*3. Bases in Japan*4. Number of cases reported by CMIC HOLDINGS Co., Ltd. and domestic consolidated subsidiaries based on Japan’s Industrial Safety and Health Act

38

aim of ensuring stable work environments for people with disabilities and creating workplaces where they can demonstrate

Business Activities(Age) 0-14
15-19
20-29
30-39
40-49
50-59
60-65
66Mid-career employee recruitment ratio(%)(April-March)*1
Employment of disabled persons*1

Deaths due to work-related accidents
Work-related accidents
Training attendance (%)
Compliance
Privacy protection
Quality management
Management of Conflict of Interest/Anti-Bribery and Corruption
Infomation security
Harassment prevention

the most of their diverse characteristics. To this end, we established a special subsidiary CMIC Well Co., Ltd. in 2019 with thetheir abilities.

All employees
Full-time permanent employees
Part-time/temporary employees
Employee ratio by age cohort (%)*1

SCOPE1 (thousand tons CO2)SCOPE2 (thousand tons CO2)SCOPE1, SCOPE2 total (thousand tons CO2)
Industrial waste emissions
Ascertained weight(kg)Ascertained volume(L)No. of whistle-blowing cases
Working environments
Harassment-related
Other
Disciplinary action
Dismissal
Other than dismissal
Health and Safety*4

The CMIC Group regards handicaps as a form of individuality and seeks to create workplaces where individuals can makeOrigin of the CMIC Well company name
The CMIC Group’s founding spirit “CMIC'SCREED” expresses our desire to be a company
that contributes to the values of “Wellbeing,”
in which everyone can live their one and only
lives according to their own will.

Business Activities Report 2022

39

Data Section

Consolidated Financial Statements
Value Creation Story of CMIC

Consolidated Balance Sheets
Consolidated Balance Sheets
As of September 30, 2021 and 2022
¥ million

2021

2022

Assets

2021

2022

1,034

1,190

Liabilities

Current assets

Current liabilities
9,381

11,806

Notes and accounts receivable - trade

18,065--

24,632560

526

Work in process

4,715

4,384

Raw materials and supplies

2,503

3,932

Other

3,409

2,786

Allowance for doubtful accounts

(59)

(58)

38,57748,010

Merchandise and finished goods

Total current assets
Non-current assets

918-

Current portion of long-term debt

3,652

3,602

Accounts payable-other

6,495

8,400

Accrued expenses

1,484

2,024

Income taxes payable

3,312

3,868

Advances received

1,944

-

Contract liabilities

-

4,470

3,138

6,110

Short-term borrowings

Provision for bonuses

89

92

Provision for loss on order received

1,307

1,225

Other

4,445

4,888

Total current liabilities

27,82335,872Long-term debt

12,46913,534

Lease obligations

2,689

3,627

11

12

Net defined benefit liability

10,25811,000Asset retirement obligations

571

370

Long-term unearned revenue

2,542

1,581

340

322

28,88330,44856,706

66,320Capital stock

3,087

3,087

Capital surplus

6,100

6,093

Provision for directors bonuses

Property, plant and equipment
29,412(11,972)(13,200)

Buildings and structures, net

14,914

16,211

Machinery, equipment and vehicles

24,05925,593

Accumulated depreciation(13,939)(16,138)

Machinery, equipment and vehicles, net

10,1209,454

Tools, furniture and fixtures

7,118

8,026

Accumulated depreciation(4,488)(5,441)Tools, furniture and fixtures, net

2,630

2,585

Land

6,570

6,836

Leased assets

3,792

5,183

Accumulated depreciation(1,352)(1,784)

Leased assets, net

2,439

3,398

Construction in progress

3,414

4,335

Total property, plant and equipment

40,08942,822Intangible assets

Non-current liabilities

Deferred tax liabilities

Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity

54

32

Other

1,907

2,260

Retained earnings

16,60024,444

Total intangible assets

1,961

2,292

Treasury stock(1,546)(2,346)

Total shareholders' equity

24,242

31,279Goodwill

Investments and other assets
2,813

3,039

Deferred tax assets

5,389

8,471

Valuation difference on available-for-sale securities

642

742

Lease and guarantee deposits

1,974

2,350

Foreign currency translation adjustments

(1)

(432)

998

1,321

Remeasurements of defined benefit plans

182

34

Total accumulated other comprehensive income

822

344

Allowance for doubtful accounts

(611)

(719)

Total investments and other assets

10,564

14,464Non-controlling interests

9,420

9,645

52,61559,580Total net assets

34,48541,26991,192

107,590

91,192

107,590

Total non-current assets
Total assets

Business Activities Report 2022

Total liabilities and net assets

Business Activities Report 2022

Data Section

Accumulated other comprehensive income

Investment securities

Other

Framework for Supporting Sustainable Growth

26,886

Accumulated depreciation

Buildings and structures

Notes and accounts payable – trade

Business Activities

Cash and deposits
Notes and accounts receivable – trade and contract assets

40¥ million

41

Data Section

Consolidated Statements of Changes in Equity

CMIC HOLDINGS Co., Ltd., and Consolidated Subsidiaries
For the fiscal years ended September 30, 2021 and 2022

CMIC HOLDINGS Co., Ltd., and Consolidated Subsidiaries¥ million

2022

108,461
82,203
26,25814,412
11,845

2
190
20
187
399

3
1,720
106
1,830

133
19
76
228
5,091

152
29
43
225
13,450

577
19
117
714

139
139

2,102
107
122
2,331
3,474
3,947
(1,550)
2,397
1,077
(946)
2,023

1,386
155
8
1,550
12,0396,066(3,071)
2,994
9,045
657
8,387

CMIC HOLDINGS Co., Ltd., and Consolidated Subsidiaries
For the fiscal years ended September 30, 2021 and 2022
¥ million

Business Activities Report 2022

CapitalsurplusRetainedearnings

Treasury
stock

3,087

6,100

15,052(1,545)

22,694

1,336

(29)

(373)

933

10,38434,011

Changes in items during
periodDividends of surplus

(365)

(365)

(365)

Dividends of surplus(Interim dividends)

(91)

(91)

(91)

Profit (loss) attributableto owners of parent

2,023

2,023

2,023

(0)

(0)

(18)

(18)

Purchase of treasury
shares(0)Change in scope of
consolidation(18)

Net changes in items otherthan shareholders' equity

(694)

28

555

(110)

(963)

(1,073)

Total changes in items
during period

-

-

1,548

(0)

1,548

(694)

28

555

(110)

(963)

474

Balance at end of period

3,087

6,100

16,600(1,546)24,242

642

(1)

182

822

9,420

34,485¥ million

Shareholders' equity
For the fiscal year ended
September 30, 2022

Balance at beginning of
periodCapitalstock

CapitalsurplusRetainedearnings

Treasury
stock

3,087

6,100

16,600(1,546)

Cumulative effects of changes
in accounting policies
Balance at the beginning of
period reflecting changes inaccounting policies

67
3,087

6,100

16,667

Accumulated other comprehensive income
NonValuation
Foreign
Total accumulated
Total net
Total
Remeasurements
controlling
difference on currency
other
assetsshareholders'of defined benefit
interests
available-for translation
comprehensive
equityplans
sale securities adjustment
income24,242

642

(1)

182

822

9,420

67
(1,546)24,30934,485
67

642

(1)

182

822

9,420

34,553

2021

2022

1,077

9,045

(694)
7
561
(1)
(127)
949

99
(828)
(173)
(902)
8,142

1,913
(963)

7,909
233

Dividends of surplus

(520)

(520)

(520)

Dividends of surplus(Interim dividends)

(90)

(90)

(90)

Profit (loss)
attributable to ownersof parent

8,387

8,387

8,387

(800)

(800)

(0)

(0)

(6)

(6)

Purchase of treasury
shares(800)

Change in scope of
consolidation(0)

Change in ownership interest ofparent due to transactions with
non-controlling interests(6)

Net changes in items otherthan shareholders' equity
Total changes in items
during period
Balance at end of period

100

(431)

(147)

(478)

224

(253)

-

(6)

7,776

(800)

6,969

100

(431)

(147)

(478)

224

6,715

3,087

6,093

24,444(2,346)

31,279

742

(432)

34

344

9,645

41,269Business Activities Report 2022

Data Section

42

Balance at beginning of
periodCapitalstock

Accumulated other comprehensive income
NonValuation
Foreign
Total accumulated
Total net
Total
Remeasurements
controlling
difference on
currency
otherassetsshareholders'of defined benefit
interests
available-for translation
comprehensive
equityplans
sale securities adjustment
incomeChanges in items
during period

Consolidated Statements of Comprehensive Income

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to
Owners of parent
Non-controlling interests

Shareholders' equity
For the fiscal year ended
September 30, 2021

Framework for Supporting Sustainable Growth2021

85,78868,061
17,727
12,806
4,920¥ million

Business Activities

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Foreign exchange gains
Share of profit of entities accounted for using equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission fee
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries
Gain on forgiveness of debts
Gain on reversal of loss of asset retirement obligations
Total extraordinary income
Extraordinary losses
Impairment loss
Loss on retirement of non-current assets
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Current
Deferred
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

Value Creation Story of CMIC

Consolidated Statements of Income

43

Data Section

Group Network

CMIC HOLDINGS Co., Ltd., and Consolidated Subsidiaries
For the fiscal years ended September 30, 2021 and 2022

Major Consolidated Subsidiaries
As of September, 2022

Value Creation Story of CMIC

Consolidated Statements of Cash Flows¥ million

2021

12,039
5,227
1,386
21
105
(3)
152
29
(1,646)(6,064)(1,398)
124
2,962
2
471
(81)
8
155
(139)
2,111
488
557
143
16,6542(154)(5,289)
11,213(6,527)
9
(80)
734
(744)
(60)
1
(54)
55
(19)
(6,685)(99)(6,508)
12
(80)
30
(885)
(136)
(466)
98
(8)
(8,045)(5,000)5,800(3,259)
(0)
(456)
(431)
(3,000)(6,348)(82)(3,310)12,688
1
9,379

(918)
4,700
(3,684)
(800)
(610)
(8)
(552)
643
(1,230)
325
2,263
9,379
60
11,703Company nameShare
Paid-in capital ownership(%)

Main business

CMIC Co., Ltd.

100 million yen

100.0% Clinical services

CMIC ShiftZero K.K.

10 million yen

60.0%

CMIC Korea Co., Ltd.

1,300 million won

100.0% Clinical services/South Korea

CMIC ASIA-PACIFIC, PTE. LTD.

350 thousand
US dollars

100.0% Clinical services/Singapore and Taiwan

CMIC ASIA PACIFIC (MALAYSIA) SDN. BHD.

30 thousand
Malaysian ringgit

100.0% Clinical services/Malaysia

CMIC Asia-Pacific (Hong Kong) Limited

10 thousand Hong
Kong dollars

100.0% Clinical services/Hong Kong

CMIC ASIA-PACIFIC (PHILIPPINES), INC.

10 million
Philippine peso

99.9%

CMIC ASIA-PACIFIC (AUSTRALIA) PTY LTD

100 thousand
Australian dollars

100.0% Clinical services/Australia

CMIC ASIA-PACIFIC (THAILAND) LIMITED

1 million Thai baht

49.0%

CMIC ASIA-PACIFIC (VIETNAM)
COMPANY LIMITED

100 thousand
US dollars

100.0% Clinical services/Vietnam

CMIC(Beijing)Co., Ltd.

408 million yen

100.0% Clinical services/China

CMIC DATA SCIENCE VIETNAMCOMPANY LIMITED

88 thousand US
dollars

100.0% Data management/Vietnam

CMIC Pharma Science Co., Ltd.

99 million yen

100.0%CMIC, INC.

11 thousand US
dollars

100.0% Non-clinical services/Bioanalysis services/US

CMIC CMO Co., Ltd.

100 million yen

50.4%

Pharmaceutical development and contracted drug
manufacturing

CMIC CMO Korea Co., Ltd.

3,827 million won

50.4%

Pharmaceutical development and contracted drug
manufacturing/South Korea

CMIC CMO USA Corporation

1,339 thousand
US dollars

43.4％

Pharmaceutical development and contracted drug
manufacturing/United States

CMIC Bio Co., Ltd.

100 million yen

100.0％Development of manufacturing technologies forbiopharmaceutical drug substances and contract manufacturing

CMIC Ashfield Co., Ltd.

55 million yen

50.01%MR dispatch, pharmaceutical sales and marketing
supportOrphanPacific, Inc.

100 million yen

100.0％ Development and sales of orphan drugs, etc.

Site Support
CMIC HealthCare Institute Co., Ltd.
Solutions
Business

99 million yen

100.0％

Site Management Organization (SMO) services,
healthcare services

CMIC Solutions Co., Ltd.

25 million yen

100.0%

BPO and human resource services for the medical
and pharmaceutical industries

CMIC Well Co., Ltd.

5 million yen

99.0%

Business support operations

harmo Co., Ltd.

30 million yen

100.0%

Services utilizing healthcare communication
channels

CRO
Business

CDMO
Business

MarketSolutions
Business

Healthcare
Revolution
Business

Clinical services/Oncology drugs

Clinical services/Philippines

Clinical services/Thailand

Non-clinical services/Bioanalysis services and nonclinical trials

Data Section

Business Activities Report 2022

3,474
5,161
2,102
21
34
(2)
133
19
(41)
(20)
(4,795)
147
3
721
89
1,163
481
(577)
122
(19)
107
(117)
215
155
398
1,971
10,94947(141)(1,050)9,804

Businesssegment

Framework for Supporting Sustainable Growth

44

2022

Business Activities

Cash flows from operating activities:
Profit before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Commission fee
Foreign exchange losses (gains)Share of (loss) profit of entities accounted for using equity method
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for loss on order received
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on sales of shares of subsidiaries
Loss on retirement of non-current assets
Gain on forgiveness of debts
Gain on reversal of loss of asset retirement obligations
Increase (decrease) in advances received
Increase (decrease) in contract liabilities
Increase (decrease) in accrued expenses
Increase (decrease) in deposits received
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Payments into time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of intangible assets
Payment for investments in subsidiaries
Net decrease (increase) in short-term loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury stock
Cash dividends paid
Dividends paid to non-controlling interests
Repayments of lease obligations
Income from sale-and-leaseback
Net increase (decrease) in commercial papers
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated subsidiary
Cash and cash equivalents at end of period

Notes: 1. CMIC CMO Co., Ltd. merged with CMIC CMO NISHINE Co., Ltd. on October 1, 2021.
2. CMIC CMO Korea Co., Ltd. is a fully-owned subsidiary of CMIC CMO Co, Ltd., where the share ownership of the Company is the indirect ownership ratio.
3. CMIC CMO Co., Ltd., owns an 86% share of CMIC CMO USA Corporation as a subsidiary, where the share ownership of the Company is the indirect ownership ratio.
4. OrphanPacific, Inc. became a fully-owned subsidiary of the Company following the transfer of all shares in OrphanPacific held by MEDIPAL HOLDINGS CORPORATION to theCompany on October 29, 2021.

Business Activities Report 2022

45

Data Section

Corporate Data/Investor Information
Value Creation Story of CMIC

Corporate Overview

Total Shareholder Return

Company nameCMIC HOLDINGS Co., Ltd.

Headquarters

1-1-1 Shibaura, Minato-ku, Tokyo, Japan
105-0023

Number of sharesissued18,923,569 shares (including
1,201,340 treasury stocks)(As of September 30, 2022)

Trading unit

100 shares¥3,087.75 million (As of March 30, 2022)

Number ofshareholders

13,453(As of September 30, 2022)

Number of employees(consolidated)

7,735 (As of October 2022)

Transfer agent

Mizuho Trust & Banking
Co., Ltd.

Stock exchange listing

Prime Market of Tokyo Stock Exchange(Code: 2309)

Fiscal year-end

September 30

Founded1992 (Established on March 14, 1985)

Paid-in capital

Number of
authorized shares

46,000,000

Ordinary general meetingof shareholders

250

200

December
September 30

150

Number of shares held

Ratio of shares held *(%)

100

Artemis Inc.

4,022,200

22.70

Keith Japan

3,552,240

20.04

The Master Trust Bank of Japan, Ltd.

1,233,000

6.96

Employees’ Stockholding

981,088

5.54

Kazuo Nakamura

564,220

3.18

Custody Bank of Japan, Ltd.

310,600

1.75

SMBC Nikko Securities Inc.

264,100

1.49

DZ PRIVATBANK S.A.RE INVESTMENTFONDS

240,000

1.35

SSBTC CLIENT OMNIBUS ACCOUNT

209,894

1.18

THE BANK OF NEW YORK MELLON 140040

167,477

0.95

11,544,819

65.14

Record date

Total Shareholder Return over the Past Five Years(Index)Major Shareholders (As of September 30, 2022)

Notes: 1. The stockholding ratio is calculated by subtracting treasury stock (1,201,340 shares) from the total amount of common stock issued.
2. Treasury stock (1,201,340 shares) is excluded from the major shareholders.
3. Treasury stock does not include shares in the Company (166,000) held by the Board Benefit Trust (J-ESOP).

Registered in
own name

2.4 Securities companies
6.3

Individuals and others

0.6 Other corporations

Financial
institutions 0.1

02017/92018/92019/9CMIC Holdings

2020/92021/9TOPIX

Other Information about CMIC Group

1.1 Foreign investors
0.2 Securities companies

Foreign investors

Investor Relations

Our Services

40.3

10.1

Inquiries

Investor Relations

27.0

13.6

2022/9Note: The above chart shows the rate of return taking into consideration the dividend as of September 30, 2021, and the stock price when an investment was
conducted on September 30, 2016. Investment performance including dividends has been added to the CMIC Holdings stock price and indexed at 100 asof September 30, 2016. The TSE Stock Price Index (TOPIX), which is a comparative index, also uses indexed data and is indexed in the same way.

Breakdown by Number of Shareholders (%)

Breakdown by Number of Shares Held (%)

50

Framework for Supporting Sustainable Growth

Total

Business Activities

Shareholders

Corporate Planning Department
Hamamatsucho Bldg.,

Financial
institutions

98.0

1-1-1 Shibaura, Minato-ku,

Individuals and others

Tokyo, Japan 105-0023

Other corporations

Data Section

For online inquiries
https://en.cmicgroup.com/contact/

Shareholder Distribution by Number of Shares Held (%)

46

Less than 1 share unit

9.31

100 or more but fewer than 500 share units

0.39

1 or more but fewer than 5 share units

80.02

500 or more but fewer than 1,000 share units

0.12

5 or more but fewer than 10 share units

4.82

1,000 or more but fewer than 5,000 share units

0.10

10 or more but fewer than 50 share units

4.74

5,000 or more share units

0.04

50 or more but fewer than 100 share units

0.46

Registered in own name0.01

Business Activities Report 2022

https://en.cmicgroup.com/
investor-relations-overview/https://en.cmicgroup.com/all-services/

Business Activities Report 202247