Value Report
2023
Always there to careWho We Are
Our mission, incorporated in our company name
Origin of the company name Qol
The company name, Qol, means quality of life. It expresses the Qol Group’s desire to improve the quality of life of patients throughmedical care.

Our desire to improve the quality of life of patients through medical care
Qol Group VisionCorporate Philosophy❶ Provide new medical care

We think outside the box to create added value and cater to people’s
needs in the local communities we serve.

❷ Become the pharmacy of choice

We seek to provide ideal pharmacies that meet the demands ofpatients and contribute to convenient, healthy and affluent lives incommunities.

We support quality of life for everyone.
There for you.
Anywhere, anytime.

❸ Progress through organic growth

We aim to achieve both business growth and personal well being forour employees.

SloganAlways there to careComprehensive Healthcare Company
Pharmacy Business

Medical-Related Business

Provide convenient medical careas an essential infrastructure,
Qol Pharmacy Group

With the CSO Business as the core, strengthen the
Medical Professional Referral Dispatch Business andaccelerate the Pharmaceutical Manufacturing Business

Basic strategies

Basic strategies

1. Expansion of scale through strategic store opening
2. Creating value of pharmacy
Qol Pharmacy

Qol Group pharmacies

Priority measures

Home and Facility
Dispensing Business1

Qol Holdings Value Report

Digitization＋ (digital transformation)

1. Deepening specialty
2. Maximizing group synergy
CSO Business and CRO Business
Medical Professional Referral
Dispatch Business
Publishing-Related BusinessPharmaceutical
Manufacturing Business

CSO Business: contract MR dispatch business
CRO Business: clinical trial support

Qol in Data (as of September 30, 2023)
Net Sales

Number of Stores

Number of Employees

905

8,042
Number of Qol Card Members

2,606

Number of Prescriptions
per Year

14,950,000 4,100,000

Health Support Pharmacy

Community Medical Coordination
Pharmacy

Pharmacy in Cooperation with
Specialized Medical Institutions

pharmacies

pharmacies

pharmacies

Stores with Online Certification
Confirmation

Generic Drug Switch Rate

Ratio of Female Directors

%

86.1
%

18.1

Medical-Related Business: ¥14.6 billion
Other:¥11.3 billion

9%
Fiscal year ended
March 31, 2023

Consolidated net sales:¥170.0 billion
Operating profit:¥9.4 billion

91%

Pharmacy Business:¥155.3 billion

Dispensing fees:¥144.0 billion

Number of Pharmacists(regular employees)

159

99.9

153

11

%

Qol Holdings Value Report2Contents
Vision of the Qol Group

Scope Covered and Reporting Period

Message from the President

4

Scope covered: Qol Holdings Co., Ltd. andGroup companies

Message from an Outside Director

7

Reporting period: April 2022 to March 2023
*Some information outside the reporting period is also included.

Publication date: February 2024

Editorial Policy
This Value Report, published since FY2022, is created as atool to comprehensively communicate our vision, growthstrategy, and ESG information to stakeholders in order toconvey the value creation story of the Qol Group, which
embodies seamless medical care and aims to realize ahealthy, prosperous, and sustainable society.

Qol Group’s Value Creation Story
Value Creation Story

9

Qol’s History

11

Materiality (Important Issues)

13

Disclaimers
The contents of this Value Report include plans andforecasts based on currently available information. These
forward-looking statements may differ materially due tonumerous factors, including social and economic
conditions, market conditions, laws and regulations, interest
rates, and other risks and uncertainties.

Information Disclosure System
Reports

Sustainability at the Qol Group
Corporate Governance

15

Quality and Safety

19

Social21

Environment

23

Sustainability Targets for 2030 and 2050

26

Financialinformation

Non-financial
information

Annual securities
report● Summaryof financial
results● Briefing materials
● Supplementarymaterials● Convocation notices●● orporate governanceC
reports

Qol Holdings Value Report 2023

Performance Data●

Financial and Non-Financial Highlights

27

Company Profile and Stock Information

29●

Shareholder newsletters

IR information●

https://www.qolhd.co.jp/
eng/ir/Sustainability

https://www.qolhd.co.jp/
eng/sustainability/

Web sites

3

Qol Holdings Value ReportVision of the Qol Group

Vision of the Qol Group

Message from the President

Aiming to realize ourcorporate philosophy
Takashi Nakamura

Sustainability at the Qol Group

Since its founding, the Qol Group has taken on the challenge of contributing to society through medical care, guided by our corporate philosophy: “We support quality of life
for everyone. There for you. Anywhere, anytime.” We work
daily to solve social issues to achieve comprehensive healthcare services, not only through patients, but also their families and medical care professionals in the community.
The Japanese economy has moved steadily toward thenormalization of economic activities in line with the reclassification of COVID-19 as a Class 5 infection. However, the future of the economy remains uncertain due to price hikes
associated with soaring energy and raw material costs andother conditions. Meanwhile, geopolitical risks like Russia’s
invasion of Ukraine are persistently impacting the global
economy. Nevertheless, as a company involved in medicalcare, the Qol Group is committed to the seamless medical
care.

Cultivating human resources to support
medical care
To ensure the seamless medical care, the Qol Group focuseson cultivating human resources to support medical care.
While securing excellent talent and enhancing our training
system, we continually improve processes so Qol Group employees can more enthusiastically and proactively provide
medical services that contribute to each patient and the local community.
One example is the Qol Group’s new personnel system introduced in 2023. Previously, the Qol Group appointed pharmacists as store managers, but our updated system also
allows qualified medical administrative staff to serve as store
managers. Medical administrative staff, called Medical
Concierges at our company, draw on experience and knowledge from their roles to build strong relationships with local
people, nearby medical institutions, and employees. In thisway, the Qol Group strives to improve systems that allow theGroup’s employees to deliver higher-quality medical
services.

Qol Holdings Value Report

Performance Data

Contributing to society through medical care

Qol Group’s Value Creation Story

President and Representative Director

4Message from the President
Accelerating growth throughthe twin axis of the Pharmacy Businessand Medical-Related BusinessIn 2023, the Qol Group decided to bring DAIICHI SANKYOESPHA CO., LTD. into the Group. Daiichi Sankyo Espha’s
strengths lie in authorized generics (AGs), a type of generic
drug. While generic drugs contain the same active ingredients as their original drugs, AGs match the original drugs in
drug substances, additives, and manufacturing process beyond just the active ingredients. Therefore, medical professionals strongly support AGs because patients can take whatis essentially the same medicine as the original drug despite
being a generic drug.
In Japan, the need for medical care and health is growing
yearly against the backdrop of an aging population, a declining working population, and dramatic technological advances. Amid such circumstances, we are continually contributing
to the medical care industry through our Pharmacy Businesswith aggressive pharmacy openings in the Tokyo, Nagoya,
and Osaka areas and the development of distinctive pharmacies in collaboration with other sectors and by dispatching human resources, including medical personnel throughour CSO (Contract Sales Organization) Business, which is partof our Medical-Related Business.
Aiming to be a comprehensive healthcare company, the
Qol Group has been involved in pharmaceutical development based on patient feedback every day since our founding. By doing so, we aim to facilitate the provision ofhigher-quality medical services. Inspired by our corporate
mission to provide medical services that contribute to thehealthy and affluent lives of local communities, the Qol
Group will continue to grow through the twin axis of thePharmacy Business and Medical-Related Business.

Strengthening group governance andpromoting sustainability management
As a company listed on the Tokyo Stock Exchange Prime
Market, we are working to reinforce our corporate governance. In addition to adopting a Company with an Audit &Supervisory Committee system in 2021, we have establishedvarious committees, including the Sustainability Committee,
Risk Management Committee, and optional Nomination andCompensation Committee, to address multiple management challenges and strengthen governance.

5

Qol Holdings Value Report

In FY2022, we enhanced statements on analyzing andevaluating the effectiveness of the Board of Directors andare both aiming for highly transparent management and addressing management issues identified through this analysis
and evaluation.
For sustainability management, we established theSustainability Committee Office upon consultation from theSustainability Committee. Composed of diverse human resources, this Office Council made recommendations on the
Qol Group’s sustainability policy, items to address, and respective targets to realize a sustainable society. We have disclosed these in this Value Report.
In an increasingly uncertain world, we believe that realizing our corporate philosophy itself contributes to a sustainable society. Therefore, we will continue strengthening the
Qol Group’s corporate governance and promoting sustainability management.

Improving the quality of medical services
through medical DX
The spread of COVID-19 has accelerated the evolution of
medical DX. In addition to already implementing online
medical care, online medication instruction, and refill prescriptions, the Qol Group quickly adapted to the digital prescriptions introduced in 2023. We have also introduced aservice for advance acceptance of prescriptions using LINE.
While continuing to develop user-friendly menus and respond to mobile ordering after introducing these initiatives,
we are providing reliable and convenient medical care to
more people. We have also implemented attentive service,
such as pharmacists following up with patients online, toimprove the quality of medical services by leveraging thebenefits of DX.
First
in thepharmacy
industry

Yakkyubin Mobile Order

Integrated online and in-store reception & payment system
Feature 1

Feature 2

Feature 3

Centrally controlled
reception

Showing
waiting status

Notify when prescription is ready

OnlineStore

OnlineStore

Overview of Group Growth Strategy

As mentioned earlier, since our founding, the Qol Group hastaken on the challenge of contributing to society throughmedical care based on our corporate philosophy: “We support quality of life for everyone. There for you. Anywhere,anytime.” However, as the world grapples with rising sea levels, floods, increasing temperatures, and droughts leading tofood shortages, all attributed to global warming, the Qol
Group has launched initiatives to conserve the global environment for future generations. As detailed in this year’s
Value Report, these include introducing LED lighting, solar
panels, and electric vehicles and further reducing plastic bag
usage. Moving forward, while cultivating the next generation of management, who will lead the future with an environmental mindset, we as a group—all employees together—will continue contributing to realizing a sustainable society.

■ Consolidated Results

Sales

Medicalinstitutions
Dispensing
pharmacies

Patients

Net sales

Operating profit 250
3,000(100 million yen)(100 million yen)

(Unit: 100 million yen)

1,800

1,700

1,661

3,000

2,760

Net sales
Operating profit

220

Pharmacy Business
Sales growth
Stable sales and profit

Medical-Related
Business
High profit

Performance Data

FY2025

Manufacture

Vision of the Qol Group

Contributing to realization of a sustainable
and prosperous society as a company
involved in medical care

Growth Strategies for Achievement of FY2025
Mid Term Targets: Amount targets

Comprehensive Healthcare Company
R&D

Qol Group’s Value Creation Story

The Group’s pharmacies leverage three strengths to provide
medical services to community residents: (1) one-on-one
pharmacies, (2) pharmacies in cooperation with other industries, and (3) group synergies.
To realize our goal of becoming a comprehensive healthcare company, we have set a FY2025 mid term target for net
sales of ¥300.0 billion and operating profit of ¥25.0 billion.
The mid term target for our Pharmacy Business is net salesof ¥180.5 billion and operating profit of ¥10.5 billion. We are
actively pursuing M&As, store openings, and creating value
for pharmacies to achieve this.
Regarding proactive M&As and store openings, we willcontinue to open our mainstay one-on-one pharmacies andpharmacies in cooperation with other industries and actively
pursue M&A opportunities.
To create value for pharmacies, we provide the high-quality medical services demanded of family pharmacies for local
communities. In addition to working to obtain certification
as a Health Support Pharmacy promoted by the Ministry of
Health, Labour and Welfare since the designation’s launch in2018, we are also working to acquire certification as aCommunity Medical Coordination Pharmacy and a
Pharmacy in Cooperation with Specialized Medical
Institutions, which were launched in 2021 for pharmacies
certified by prefectural governors as having specific functions. The Group aims to obtain these certifications for all its
pharmacies in Japan. As of September 30, 2023, Qol
Pharmacy has 159 health support pharmacies, 153 community medical coordination pharmacies, and 11 pharmacies incooperation with specialized medical institutions.
Realizing our goal of becoming a comprehensive healthcare company also requires group synergies. Since ourfounding in 1992, we have pursued vertical integration fromour Pharmacy Business to achieve this vision. We previously
called businesses other than the Pharmacy Business our BPO
Business. Renamed in 2020, the Medical-Related Business
now includes CSO (Contract Sales Organization) Business,
CRO (Contract Research Organization) Business, Medical
Professional Referral Dispatch Business, and Pharmaceutical
Manufacturing Business.
Going forward, we will continue to enhance synergies between our Pharmacy Business and Medical-Related Businessto become a comprehensive healthcare company. As our
corporate philosophy states, we will contribute to patients’quality of life in every aspect of medical services by always
putting their needs first.

Sustainability at the Qol Group

Aiming to be a comprehensive
healthcare company

98

94

100

FY2021

FY2022

FY2023Plan

FY2024
Target250

FY2025
TargetQol Holdings Value Report6Message from an Outside Director

Leveraging expertise with a broad perspective
to strengthen governance andincrease corporate value
Yukiharu Yamamoto
Director
Careersummary

Steadily strengthening governancein response to environmental changes

June 1996 Registered as Certified Tax Accountant
October 2000 Established Yamamoto Certified Tax Accountant Office
Assumed the post of Head, Yamamoto Certified Tax
Accountant Office (to present)
June 2001 Assumed the post of Audit & Supervisory Board
Member, Qol Co., Ltd. (current the Company)
June 2004 Resigned from the post of Audit & Supervisory Board
Member, Qol Co., Ltd. (current the Company)
April 2007 Established United Co., Ltd.
Assumed the post of Representative Director, UnitedCo., Ltd. (to present)
June 2019 Assumed the post of Outside Director of the Company(to present)

growth strategies to implementing sustainability management,
promoting digital transformation, human resources related
measures, and IR/SR activities. Both inside and outside directors

The Qol Group’s business environment has undergone vari-engage in frank discussions on these topics. Sharing meetingous changes in recent years. Since I became an Outsidematerials in advance and holding meetings for outside direc-

Director in June 2019, the global COVID-19 pandemic has

tors, including Audit & Supervisory Committee members, facili-plunged the economy into turmoil and stagnation.

tates information exchange and mutual understanding,

Meanwhile, the medical industry saw revelations of miscon-enhancing the effectiveness of the Board of Directors.

duct by generic drug manufacturers and bankruptcies of

Most of the Nomination and Compensation Committee’smajor pharmacy chains. Amid such challenges, Qol Holdings

members are outside directors, ensuring objectivity andhas been reinforcing corporate governance. In 2021, we ad-transparency in recommendations to the Board of Directors,

opted a Company with an Audit & Supervisory Committee

which I appraise as improving governance effectiveness.

system. Since 2022, when our market division on the Tokyo

Aside from Board of Directors meetings, as an outside officer,

Stock Exchange changed, we have established the structure

I am frequently consulted for opinions by employees fromrequired of Prime Market listed companies. The Sustainability

departments like personnel, corporate planning, and devel-

Committee, Risk Management Committee, and Nomination

opment, demonstrating an attitude throughout the compa-

and Compensation Committee were launched to address

ny of actively incorporating outside perspectives.

various management issues, and initiatives to strengthen internal controls in each Group company and promote employee compliance have also made significant progress. In
this management approach, I have sensed the intention toconnect governance reinforcement to business growth andA corporate culture that values
people benefits human resource
development and organizational building

value creation.

7

Board of Directors meetings entail detailed reports on a wide

I believe the Qol Group’s greatest strength is “people-oriented

range of projects—from progress on medium-to-long-termand respectful management.” It puts tremendous effort into

Qol Holdings Value Reportforward, I hope the company leverages strengths like theas an Audit & Supervisory Board member for Qol Co., Ltd. inadvantages of one-on-one pharmacies, collaboration with

2001, the company had been holding an annual “academic

medical institutions, and highly qualified pharmacists to es-

conference,” a platform for employees to present research as

tablish a strong presence as “family pharmacies for local

part of their training. This is now rooted as a tradition in thecommunities.” Today’s pharmacies must function not merelyGroup. At the November 2022 conference, the first in-person

as providers of prescribed medication but as “bases support-

event in several years, I was deeply impressed to see phar-ing community health.” I am confident Qol pharmacies canmacists presenting research results—obtained despite theirmeet this societal need.
The Medical-Related Business encompasses CSO (Contract

In addition to such human resource education, there is a

Sales Organization) Business, CRO (Contract Researchcommitment to valuing and nurturing people in organiza-

Organization) Business, medical professional referral dispatch

tional building. At the head office, many people hold phar-business, and pharmaceutical manufacturing business. In

macist qualifications, and employees from companies

May 2023, the Company announced its acquisition of sharesacquired through M&A engage in company business, play-

in DAIICHI SANKYO ESPHA CO., LTD., which conducts R&D

ing active roles regardless of background. Employees haveand sales of pharmaceuticals, intending to make it a wholly

abundant career advancement opportunities in various

owned subsidiary by acquiring shares in stages over time. I

workplaces, not only to become experts in dispensing oper-

highly commend the execution of this M&A as contributing

ations at pharmacies but also to support business at thegreatly to achieving medium-to-long-term growth strategy

head office or manage pharmacies. In terms of promoting

targets. As one of the largest M&A deals undertaken thus far

women’s advancement, we have a high percentage of fe-by the Group, fully integrating operations likely poses many

male employees, at approximately 70%, and by enhancing

challenges. Still, I hope to see it succeed as “Progress throughsystems like childcare support, we have raised the femaleorganic growth,” as stated in the Qol Group Vision. I also lookmanager rate to 22%, with women serving as top executives

forward to it being a stepping stone to develop new busi-

at principal subsidiaries. This is an outstanding, diversity-em-

nesses and become a “comprehensive healthcare company.”

Qol Group’s Value Creation Story

daily pharmacy work—and engaging in lively discussions.

Vision of the Qol Grouphuman resources training and development. When I served

bracing approach to human resource utilization.

Providing specialized
yet broad-perspective advice
based on diverse practical experience

Sustainability at the Qol GroupKey issues: Differentiating
the Pharmacy Business andgrowing the Medical-Related Businessfurther strengthen initiatives in the mentioned areas—rein-billion in net sales and ¥25.0 billion in operating profit. While

forcing governance and compliance, promoting human re-

the prolonged impact of the COVID-19 pandemic was asource development and diversity, and helping resolve

concern for the core Pharmacy Business, contributions, in-social issues through business. With M&A, analyzing a buy-

cluding from M&A, led to record-high net sales in the fiscal

out target’s governance and compliance is just as crucial as

year ended March 2023, indicating steady progress toward

its technological capabilities and growth potential. Afterthe target. I believe the keys to further expansion are differ-

making an entity a subsidiary, the Group’s governance must

entiation from competitors in the Pharmacy Business andbe firmly established and instilled.

growing non-pharmacy businesses not reliant on the insur-

I recognize my expected role in this is to leverage exper-

ance system—in other words, the Medical-Related Business.

tise in financial accounting as a certified tax accountant.

The Pharmacy Business has about 60,000 pharmacies na-

Drawing on knowledge from my experience with account-tionwide, with the top 10 companies accounting for about

ing and tax affairs related to M&A in various industries like

20% of net sales. With competition intensifying year by year,

medical care, long-term care, and welfare, I will provide ap-

businesses must expand through M&A and strategic store

propriate advice from a broad perspective regarding organi-

opening plans while considering the circumstances of rivals.

zational restructuring through recent M&A. In this way, I will

The company has taken the lead in home healthcare, a field

support the Qol Group in continuously increasing corporate

seeing increased demand in an aging society. Moving

value.

Qol Holdings Value Report

Performance Data

For the Qol Group to achieve sustainable growth, it must
The Qol Group has set a mid term target of achieving ¥300.08Qol Group’s Value Creation Story

Value Creation Story
Taking on the three challenges for new medical care, pharmacies that continue
to be chosen and organic growth, we will work to realize a healthy, prosperous
and sustainable society through development of seamless medical care.
The company name, Qol, means quality of life. It expresses the Qol Group’s desire to improve the quality of life of patients
through medical care. This desire is expressed in our Corporate Philosophy, which describes the mission we must fulfill.

Our Raison d’Etre

Corporate
Philosophy

What We Are

We support quality of life for everyone.
There for you.
Anywhere, anytime.

Business Model

Pharmacy
BusinessStrengths

VisionStrategies

Medical-Related
Business“Expertise” × “Convenience”

Idea of a comprehensive healthcare company
Strengthening
new businesses andmaximizing groupsynergies to achieve
consolidated net salesof ¥300.0 billion

R&D

Manufacture

Fujinaga Pharm Co., Ltd.
APO PLUSSTATION Co., Ltd.

Intangible assets that
support our strengths● Pharmacists with advanced and broad

expertise● Community-based store development● Services using ICT

9Qol Holdings Value Report

Materiality (ESG)● Improvement of quality of life in local areas● Climate change measures● Improvement of quality of life of employees● Contribution to the quality of life throughQol’s Vision shows the way forward for the Qol Group, which is guided by these values. With our mainstay Pharmacy andMedical-Related Businesses as the core, we will embody the vision beyond the three challenges through the realization of
Vision of the Qol Groupthe idea of a comprehensive healthcare company.
Through this form of management, the value we can provide is a peace of mind through the seamless medical care symbolized by our slogan, where medicines are always delivered to people as a matter of course. Being centered around thisvalue creation, we will appropriately respond to the demands of changing society and strive to realize a healthy, prosperous,and sustainable society.

Value We Create

Provide new medical care
Become the pharmacy of choice
Progress through organic growth

SloganQol Group’s Value Creation Story

Aiming For

Always there to care

QSV (Qol Sustainable Value)(Value created through the seamless medical care)

Patients

Qol Group pharmacies
APO PLUSSTATION Co., Ltd.

Economic value
Expansion of corporate value
through the practice of soundbusiness activities

APO PLUS
CAREER Co.,LTD

Medical Qol Co.,Ltd.
Qol Assist
Co., Ltd.

● Creation of new medical value

sustainable medical care

Sustainability at the Qol Group

Medicalinstitutions
Dispensing
pharmacies

Social value
Value created by solving social issues
Health/longevity

Recycling-oriented
society

Zero emission

Society without
disparities● Strengthening of corporate governance

Performance Data

Sales

Qol Holdings Value Report10

Qol’s History
Contribution to the improvement of quality of life in local areas
Based on the Corporate Philosophy of “We support quality of life for everyone. There for you. Anywhere, anytime,” and with the slogan of “Always there to care,” the Qol Group is striving to improve the quality of life in local communities.

Net sales and number of stores

1992–2005

2006–

Establish

Growth(Billion yen)200

Number of stores

Net sales

180
160
140
120
100

60

100

Kabutocho Pharmacy (Tokyo)

80
Established20

Listed on
HerculesMarketHead officerelocated

Qol logoestablishedFirst
pharmacy
opened40

storesHead officerelocated

Head officerelocated

0
FY1992

FY1993

FY1994

FY1995

FY1996

FY1997

FY1998FY1999FY2000FY2001

FY2002

FY2003

FY2004

FY2005

FY2006

FY2007

Pharmacy Business
Basic Expansion ofstrategies scale

New pharmacy opening
M&A

Dominant pharmacy
opening
Cooperation withmedical institutions
Cooperation with otherindustries

Key
strategies
ICT

Home medical care

Medical-Related Business1995 Establishment of Medical Qol Co., Ltd.
Entry into publishing business

Basic Stable sales
strategies High profit

11

Qol Holdings Value Report

1994 Monthly Medical Qol published2003 Establishment of PhaseOn Co., Ltd.
Entry into pharmaceutical clinical trial
business
2008
Establishment of Qol Medis, Co., Ltd.
Entry into personnel dispatching businessVision of the Qol Group

2011–2015

2016–2023

Moving with speed

Taking on challenges
900

500

Transition to aholding company
structure

storesstores800*June 2023

(Billion yen)

(Stores)
1,000

180 (forecast)storesQol Group’s Value Creation Story

2010

800
Logo renewal/listed on
Tokyo Stock ExchangeFirst Section

600

Listed on Tokyo
Stock Exchange
Second Section
400

Head office relocated200

FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY20162010 Opening of pharmacy 2013 Opening of pharmacy
in cooperation within cooperation withconvenience stores
railroad company

FY2017FY2018FY20192017 Opening of pharmacy incooperation withsupermarket

FY2020

FY2021

FY2022

Sustainability at the Qol Group0
FY2008FY2023(forecast)

2021 Opening of pharmacy incooperation with lifestyle
goods retailer

2011 Opening of pharmacy in cooperation with electronics retailer
2013 Release of prescription
dispensing application2009 Establishment of special subsidiary company Qol Assist Co., Ltd.
2012 APO PLUS STATION Co., Ltd. joined the Group
Entry into MR dispatching business2020 Introduction of prescription drug delivery lockers
2020 Start of online medication instruction at all stores2018 Introduction of2021 Optimization of ordering based on AI demand forecastingsmart speakers
2022 Start of accepting prescriptions using LINE
2023 Launch of prescription
mobile ordering2021 Strengthening Home and Facility Dispensing Business

Performance Data

2010 Introduction of
Qol Card

2019 Fujinaga Pharm Co., Ltd. joined the Group
Entry into pharmaceutical manufacturing business2023 Announcement of DAIICHISANKYO ESPHA CO., LTD.
joining the Group
2023 Oncall.Inc joined the Group

Qol Holdings Value Report12Materiality (Important Issues)
Key challenges for realizing a healthy, prosperous, and sustainable society

Sustainability basic policy
Taking on the three challenges for new medical care, pharmacies that continue to be chosen and organic growth, we will work on
development of seamless medical care to realize a healthy, prosperous and sustainable society.

Sustainability management
The Sustainability Committee is chaired by the President andRepresentative Director and consists mainly of Directors andmanagers of each division. The committee formulates theSustainability implementation structure
General Meeting of
Shareholders
Board of Directors

Qol Group’s sustainability policy, determines activity targets,

Sustainability Committee

and manages progress. The committee also reports regularly
to the Board of Directors on the activities and progress of thecommittee.

Consultation/
Recommendation

Management Committee

Process to identify materiality
Step

01

Recognizing ESG issues
After deﬁning material issues as “ESG issues that should be given the most importance in corporate management,”
we listed more than 500 ESG issues from various perspectives. Then, based on three perspectives of “importance to
the Qol Group,” “importance to stakeholders” and “importance in light of the characteristics of the industry,” material
issues are further identiﬁed for each area.

“Internal interviews”
Committee members and Group employees identify material issues related to our businesses. Then, theysorted out both positive and negative aspects on the value chain and organized the issues to beconsidered.
“Stakeholder interviews”
For each major stakeholder group (customers, employees, investors, etc.), we identiﬁed and organized
important items, priority issues and expectations for the company.
“Survey on industrial characteristics”
Combined with industry-speciﬁc materiality analyses and global sector issues such as the Sustainability
Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD),
we identiﬁed industry-speciﬁc issues.

Step

02

Screening identiﬁed ESG issues
The 53 items identiﬁed from the three perspectives of “internal interviews,” “stakeholder interviews” and “surveys on
industrial characteristics” were further screened and 31 items were listed.

13

Qol Holdings Value Report*E is green, S is orange, and G is blue

Mapping ESG issues

Climate change measures
Resource recycling Waste management

The 31 items listed in Step 2 wereSupply chain management

mapped with two perspectives ofContribution to local communities
Diversity promotion
Product quality and safety
Strengthening of personnel training

and stakeholders” and “the magnitude of the business impact.”

Size of expectations/needsfrom society and stakeholders

materiality (axes): “the size of expectations/needs from society

Vision of the Qol Group

03

Transparent management and information disclosure
Complete compliance
Biodiversity Water management
Human rights measures Pursuit of customer interests
Establishment of an employee evaluation system
Promotion of childcare leave for male employees
Stakeholder communication
Supporting the education of the next generation
Effective corporate philosophy
Strengthening the diversity of the Board of Directors
Transparency of officers’ remuneration Long-term strategies
Restructuring of sustainable business models

Labor practices
Job creation
Work-style reform
Strengthening of corporate governance
Information security
Corporate ethics Establishment of BCP
Development of new products

Qol Group’s Value Creation Story

Step

Magnitude of the business impact(characteristics of the industry/importance in the company)
Step

04

Identifying material issues
We visualized and reorganized the issues using the Materiality Map and identiﬁed six material issues. We will review
each of the issues based on the PDCA cycle and revise and update them periodically. We are planning to set KPIs in
the future.

<Materiality (Important Issues)>
ThemesReducing environmental impacts
Active use of natural energies●●

Job creation
Support for medical personnel● Educational support for the next
generation

●

●

●

Promotion of diversity
Promotion of human resource
development● Promotion of work-life balance●●

Improvement of quality of life
in local areas●●

Improvement of quality of lifeof employees

Contribution to the quality of life
through sustainable medical care
Creation of new medical value●

Response to an aging society
Contribution to local communities● Lectures to the public iversification of welfare andDworking environments● Effective use of human resources
through DX promotion

Strengthening of supply chain management
Strengthening of organizational capabilities to realize seamless medical care
● Strengthening of comprehensive healthcare support
●
●

●
●

Development of partnership business
Creation of new solutions in the medical and healthcare fields

S trengthening of the effectivenessof the Board of Directors● Strengthening of compliance● Ensuring appropriate information
disclosure and transparency●

Strengthening of corporate
governance eduction of waste ofRpharmaceutical products● Reduction of CO₂ emissions

Performance Data

Climate change measures

Sustainability at the Qol Group

Materiality

S trengthening of information
security● Establishment of BCP●

Qol Holdings Value Report14

Sustainability at the Qol Group

Corporate Governance
Strengthening of corporate governanceMateriality

List of directors (as of September 30, 2023)
Skill matrix
Sales

BusinessstrategyandMarketing

●

●

●

Male

●

●

●

Representative andSenior Executive
Director

Male

●

●

●

Kiyonobu
Fukumitsu

Representative andExecutive Director

Male

●

Yukari
Onchi

DirectorFemaleYutakaTogashi

Director

Male

Name

Position

GenderMasaruNakamura

Chairman and Director

Male

TakashiNakamura

President and Representative
Director (Chair of the Nomination

Takayoshi
Ishii

and Compensation Committee)

ToshikoKuboki

Outside Director

Yukiharu
Yamamoto

Outside Director

Kazuo
Ishii

Director

MotoyukiMiyazakiOutside Director

Yasutoshi
Mori

Outside Director

Corporate Finance &management Accounting●(Audit & Supervisory
Committee Member)(Audit & Supervisory
Committee Member)(Audit & Supervisory
Committee Member)

Legal affairs
andCompliance

HR and
Labor

●

●

●

Male

●

Male

●

Male

●

●
●

●
●

●

●

●

Male

Personnel
development Qualifications
and Training●●

Female(Member of the Nomination
and Compensation Committee)(Member of the Nomination
and Compensation Committee)

PMD Act●●

Pharmacist●

LawyerCertifiedTax
Accountant
CertifiedPublicAccountant
CertifiedPublicAccountant
CertifiedTax
Accountant

Note: The above list does not represent all the knowledge and experience of each person.

Definition and reason for selection of each skill
Skill

15

Definition of the skill

Reason for selection

Corporate
management

Possess knowledge, experience, and capabilities related to
managing companies and other entities and to organizational
operation.

Knowledge, experience, and capabilities related to overall corporate
management are needed to develop and execute medium-tolong-term growth strategies.

Finance & Accounting

Possess knowledge, experience, and capabilities related tofinancial strategies, accounting, and tax affairs.

Knowledge, experience, and capabilities related to finance andaccounting are needed to achieve high capital efficiency over the
medium to long term.

Sales

Possess knowledge, experience, and capabilities related to sales
at the Company and other retail businesses.

Knowledge, experience, and capabilities related to sales are needed
to quickly understand patients’ needs.

Business strategy andMarketingPossess knowledge, experience, and capabilities related tomarketing at the Company and other retail businesses.

Knowledge, experience, and capabilities related to businessstrategies and marketing are needed to develop and execute
medium-to-long-term growth strategies down to the smallest detail.

PMD Act

Possess knowledge and experience related to PMD Act.

Knowledge and experience related to the PMD Act are needed tocomply with the laws governing the dispensing pharmacy business.

Legal affairs andCompliance

Possess knowledge, experience, and capabilities related to laws,
compliance, and risk management.

Knowledge, experience, and capabilities related to laws, compliance,and risk management are needed to create an appropriate
governance structure.

HR and Labor

Possess knowledge, experience, and capabilities related tohiring, cultivating, and utilizing diverse human resources, as wellas to labor management.

Knowledge, experience, and capabilities related to humanresources and labor management are needed to help employeeswith diverse skills and experience continue to thrive.

Personnel
development andTraining

Possess knowledge, experience, and capabilities related topersonnel development and training.

Knowledge, experience, and capabilities related to personnel
development and training are needed to share the values of
employees with diverse skills and experience and help themacquire even greater expertise.

Qol Holdings Value ReportVision of the Qol Group

Basic views
The Qol Group recognizes that the Group must continually enhance its corporate value through its corporate activities based on its
Corporate Philosophy, Slogan, Qol Group Vision, and Qol Group Charter of Corporate Behavior to respond to the expectations of all
stakeholders including its shareholders, patients, and employees. In order to realize this, the Group regards the continuing strengthening of its corporate governance as an important management issue as a foundation for ensuring the soundness, transparency,
and efficiency of its management, and the Group strengthens its management functions by appointing outside directors that meetthe requirements of independent directors. In addition, the Group actively engages in dialogue with shareholders and investors, asa dialogue policy with shareholders, and as well as disclosing the information on its business situation including the progress of its
management plans, quantitative financial information, non-financial information such as corporate governance and sustainability
initiatives in a timely and appropriate manner. The Group strives to respond to expectations from its stakeholders including shareholders and investors by making efforts to develop an appropriate environment for the exercise of shareholders’ rights.

Qol Group’s Value Creation Story<Corporate governance structure diagram>
General Meeting of Shareholders
Appointment/Dismissal

Nomination andCompensation Committee

Board of Directors

Consultation
Recommendation

Risk Management Committee

Appointment/Dismissal

Directors
Appointment/
Dismissal

Reporting

Auditing/Supervision
Proposal/Reporting

Representative Director
Discussion

Instruction/
Reporting

Audit & Supervisory
Committee

Auditing

Instruction/Reporting

Appointment/
Dismissal
Cooperation

Accounting Auditor
Auditing

Cooperation

Internal Audit Department

ReportingManagement Committee

Instruction/Reporting

Instruction/Reporting
Internal audit

Sustainability at the Qol Group

Business execution divisions/Group companies

Overview of governance structure
Board of Directors
The Board of Directors consists of eight Directors (six men and two women) excluding those who are Audit & Supervisory
Committee Members and three Directors (three men) who are Audit & Supervisory Committee Members. The Board holds meetings in principle once per month to make decisions on important management matters as well as to manage and supervise thestatus of business execution.

Audit & Supervisory Committee
The Audit & Supervisory Committee consists of three members, two of whom are Outside Directors and one of whom is a
Director. The Committee audits the legality and validity of the execution of duties by Directors (excluding those who are Audit &Supervisory Committee Members) in accordance with the Audit & Supervisory Committee Rules and Audit & Supervisory
Committee Directors Auditing Standards.
Performance Data

Nomination and Compensation Committee
The Nomination and Compensation Committee, which functions as both a Nomination Committee and a Compensation
Committee, deliberates and reports on the nomination and remuneration of Directors in response to consultations from the Boardof Directors to enhance the fairness, transparency and objectivity of nomination and compensation procedures. The Nomination
and Compensation Committee comprises three or more members who are Directors, the majority of whom are Independent
Outside Directors.

Internal Audit Department
The Internal Audit Department under the direct control of the President conducts audits to ensure legal, appropriate and efficient
operations, and makes proposals for improvement to relevant departments as necessary.

Qol Holdings Value Report

16

Corporate GovernanceMateriality

Strengthening of corporate governanceRisk Management Committee
The Risk Management Committee examines, consults and approves the policies and directions of overall management initiatives
for risks (external risks, business process risks and internal risks) stipulated in the Company-wide Risk Management Regulations
and management crises stipulated in the Crisis Management (Risk Management) Regulations.

Management Committee
The Management Committee consists of directors of the Company and Group companies designated asappointed by representative directors that, in principle, meet twice a month to consider actual progress and management challenges on both a Groupwide and Group company basis, deliberate important matters, and determine policies in an attempt to hasten decision making.

Sustainability Committee
In order to address sustainability issues such as social and environmental issues toward the realization of a sustainable society, theCompany has established the Sustainability Committee chaired by the President and Representative Director under the Board of
Directors of the Company, as an advisory body to the Board of Directors. Under the Corporate Philosophy of “We support qualityof life for everyone. There for you. Anywhere, anytime,” the Committee takes the mission to deliver safe medical care to all over thecountry and aims to realize a healthy, prosperous, and sustainable society.

Directors’ remuneration
Matters related to policies concerning the determination of the amount of remuneration, etc.
for directors or the calculation method thereof1) Method of determining the policy for determining the elements of individual remuneration, etc. for Directors
In order to establish a remuneration system that functions sufficiently as an incentive to continuously improve corporate value,
the Company consults the Nomination and Compensation Committee on the draft of the policy for determining the content of
remuneration, etc. for each Director (hereinafter referred to as the “Decision Policy”) and resolves the Decision Policy at the Boardof Directors based on the contents of the report.

2) Summary of the contents of the Policy
1. Basic policy

2. Ideas and procedures for remuneration of Directors

The remuneration of Directors shall be made up in the remuneration system that functions sufficiently as an incentive to continuously improve corporate value, be monetary and within therange of the remuneration limit resolved at the General Meetingo f S h a re h o l d e r s, a n d c o n s i s t o n l y o f m o n t h l y b a s i cremuneration.

From the perspective of ensuring the appropriateness of the level of remuneration and the transparency of per formance evaluations, theNomination and Compensation Committee, which is made up with a majority of Outside Directors, formulates a draft of the amounts of remuneration for Directors based on comprehensive consideration of their positions,
responsibilities, years of office, the remuneration levels of other companies,
the Company’s business performance, and the employee salary levels, andreports it to the Board of Directors.

Internal control system
The Company aims to steadily carry out its Corporate Philosophy, and it is promoting corporate activities based on high ethicalstandards that comply with the “Qol Group Charter of Corporate Behavior,” “Executive Officer and Employee Code of Ethics,” and“Compliance Management Regulations” in accordance with laws, regulations, the Articles of Incorporation, and internal regulations.
In addition, the Company established and operates an internal control system in order to ensure the effectiveness and efficiency ofoperations, the reliability of financial reporting, compliance with related laws and regulations, and the preservation of assets.

Compliance
Qol Group Charter of Corporate Behavior
In order to realize our Corporate Philosophy as a medical professional, we have established the Qol Group Charter of Corporate
Behavior as a code of conduct that all Group employees should comply with.
More information on the Qol Group Charter of Corporate Behavior is available on the site below.
https://www.qolhd.co.jp/eng/company/behavior.html
17

Qol Holdings Value ReportBasic concepts of compliance
Vision of the Qol GroupFor Qol Group, compliance means to comply with laws, regulations, and rules based on its Corporate Philosophy, “We support
quality of life for everyone. There for you. Anywhere, anytime,” and Qol Group Charter of Corporate Behavior, and to conduct corporate activities while maintaining a high sense of ethics as medical professionals and as business persons.

Strengthening of compliance
The Qol Group strives to ensure complete compliance as a corporate mission to provide medical care and health maintenanceand as a foundation for practicing management for society. We distribute Qol Group Essential Information and Compliance Book
to all Qol executives and employees to raise their awareness in ethics and compliance. In addition, compliance training is conducted with external instructors at the Management Policy Meeting (held once a year), manager training (held once a year), andgroup training for new employees.

Reporting system
Qol Group’s Value Creation Story

The purpose of the reporting system is to establish a mechanism for the proper handling of consultations and reporting from employees, etc. regarding organizational or personal violations of laws, to early detect misconducts and correct them, and thereby tocontribute to the strengthening of compliance management. The General Affairs and Legal Affairs Department serves as the pointof contact, and the same department also provides consultation on whether or not it falls under a violation of laws andregulations.

Information security
Protection of personal information
To put the Charter of Corporate Behavior into practice, the Qol Group deeply recognizes that personal information must be handled with care based on the philosophy of respect for personal character. At the same time, we comply with the Personal
Information Protection Management System, and work to handle personal information accurately and properly and to carry out
highly transparent corporate activities.

1. Through practicing risk management, the Qol Group will ensure
continuity and stable development of the business.
2. We will strive to eliminate and reduce the factors that hinder theinterests of customers, business partners, shareholders and investors, local communities, and other stakeholders, as well as executives and employees, with the highest priority to ensuring thequality and safety of our operations and services in each business.

<Basic policy on Group risk management (system
diagram)>Chief Risk Management Officer and Officer in Charge of Internal Control(President and Representative Director)
Secretariat: Division in charge of administration

Risk Management Committee

Internal Control Committee

3. We are aware of our responsibilities as an entity engaged in medical-related business and act based on our social mission to safely
and securely supply operations and various services in eachbusiness.

Secretariat: Division in chargeof administration

Secretariat: Division in chargeof finance

4. All executives and employees of the Qol Group comply with various laws and regulations, and rules, etc. in accordance with thespirit of compliance, decide for themselves what is an ethicallycorrect action, and act according to this value judgment.

Corporate risk andcrisis management

Internal control Internal control
under the Financial
under theInstruments andCompanies Act
Exchange Act

Consultation andreporting desk
(hotline)

Performance Data

Basic policy on Group risk management

Sustainability at the Qol Group

Risk management

Personnel in charge
Risk managementof crisis management divisions of affiliatedMedia relations, etc.
companies

Qol Holdings Value Report18

Quality and Safety
Materiality

Contribution to the quality of life through sustainable medical care

Establishment of a value chain that will keep medical care alive

Procurement ofpharmaceuticals

19

Quality control

Stable supply of pharmaceuticals
based on strong collaborative relationships
with business partners

Providing safe and reliable pharmaceuticals
through thorough quality control

The various services offered by the Group are subject to a variety of regulations specific to the pharmaceutical industry,
such as the Act on Securing Quality, Efficacy and Safety of
Products Including Pharmaceuticals and Medical Devices(PMD Act). The Group has established a fair and impartial
trade system while complying with these laws and regulations. In the procurement of pharmaceuticals and bulk pharmaceuticals, while clarifying our procurement policy, we
have achieved a stable supply of pharmaceuticals based onstrong collaborative relationships with raw material manufacturers and pharmaceutical wholesalers.
With regard to generic drugs whose supply has continued
to be short since summer of 2021, in the fiscal year ended
March 31, 2023, the percentage of generic drugs handled (ona volume basis) was 85.6%, achieving the 80% generic drug
ratio targeted by the Ministry of Health, Labour and Welfare.
In the Pharmaceutical Manufacturing Business, we are promoting the introduction of generic drugs developed inhouse at pharmacies within the Group, as well as developing
new generic drugs and manufacturing and selling COVID-19
antigen test kits in Japan.

With the Corporate Philosophy of “We support quality of life
for everyone. There for you. Anywhere, anytime,” quality control takes precedence over everything else for the Group.
In order to provide patients with safety and security, theGroup implements initiatives to maintain and improve quality in all areas. It is fundamental that all employees, regardlessof job category, including pharmacists, R&D staff, andback-office employees, ensure quality. Based on this concept,
we maintain and improve quality by strictly enforcing delivery conditions, clearly stating processes and operations, conducting training and periodic reviews, managing inventory
and expiration dates using bar codes, and thoroughly controlling temperature and humidity. We will continue to
evolve our quality control system in the Pharmaceutical
Manufacturing Business by visualizing the manufacturing
process and updating the production system to provide support to workers to make the system even more robust.

Qol Holdings Value ReportVision of the Qol Group

Deeply involved in building a community
where people can live with peace of mind while
cooperating with a diverse range of people

The Group is taking a variety of measures to operate sustainable pharmacies.
Each pharmacy is equipped with disaster reserves andemergency supplies so that it can contribute to community
support in the event of a disaster. Furthermore, some pharmacies are equipped with filtration systems to convert rainwater into drinking water and a supply of approximately twomonths’ worth of medicines to enable the supply of pharmaceuticals to local insurance dispensing pharmacies. The Head
Office and offices have introduced a safety confirmation system that enables us to quickly confirm the safety of all employees nationwide, and are equipped with disaster reserves
as at pharmacies to secure safety of employees.
To combat COVID-19, we have installed ozone sterilization
deodorizer Air Buster and rooms designated for infectious
disease patients in each pharmacy, and we are working toshorten the time spent in pharmacies by utilizing a mini appfor dispensing prescriptions via LINE. In addition, we have introduced delivery lockers, touchless payment systems, andtelephone-based medication instruction and delivery services. The Head Office has set up a COVID-19 Response
Headquarters to collect information and disseminate accurate
information within the Group. We are also working to combat
infectious diseases through measures such as remote work,
staggered work hours, and workplace vaccination.

We are engaged in various social contribution activities thatare needed by local communities, making the most of theknowledge and skills as medical professionals. We are actively
engaged in the dissemination of community-based health information through health fairs, and on-site seminars for elementary and junior high school students. These activities areplanned and carried out spontaneously by employees, and area unique culture and characteristic of Qol.
Activities such as attending regular meetings with local
medical institutions and collaborating with local care managers are also important from the perspective of contributing to
the local community and solving social issues through ourbusiness. We believe that collaboration with local medical institutions and local medical care professionals leads to the realization of an environment in which patients are cared for by
medical care professionals and pharmacists who are bound by
a relationship of trust, and to the prevention of adverse events
caused by medications. In addition to these activities, we are
deeply involved in creating communities where people canlive with peace of mind in cooperation with local communities
and various people involved in fields such as medical care,nursing care, and welfare by holding dementia cafes and training dementia supporters.

Performance Data

Contributing to the seamless medical carein local communities through disaster
response and thorough infection control

Qol Group’s Value Creation Story

Contribution to
local communities

Sustainability at the Qol Group

Sustainable pharmacy
operations

Qol Holdings Value Report20SocialMateriality

Improvement of quality of life in local areas

Contribution to medical care in local communities
Providing seminars/events and sharing information on health and medical care
The Group utilizes its knowledge and skills as medical professionals to promote various social contribution activities that are needed by local communities and communication activities that integrate into the local society. Employees voluntarily plan and carryout these activities, which are a unique culture and characteristic of Qol.

Promoting the Japan Sports Agency’s Project to Promote Sports for People with Disabilities
In collaboration with the Japan Inclusive Football Federation (JIFF), local governments, and partner companies, we hold sports experience events for people with disabilities and health events led by our pharmacists and nationally certified nutritionists in open
spaces in various cities. Through these efforts, we promote health in local communities, particularly among people with disabilities, and advance understanding and support for sports for people with disabilities.

(1) Promoting understandingof disabilities(2) Promoting healthawareness

Promoting understanding throughexperience with sports for people
with disabilities and raising awareness of mutual aid

Pharmacists and nutritionists disseminate health information at events

Sports events for people with disabilities,
health events led bypharmacists and nutritionists at open spaces
Local governments(Event image)Community residents

Japan Sports Agency’s Project to Promote Sports for People with Disabilities
An initiative by the Japan Sports Agency to promote sports for people with disabilities. To create opportunities for people with and without disabilities to enjoy sports together and establish foundations enabling people with disabilities to engage in lifelong participation in
sports, this project seeks to develop environments where people with and without disabilities can play sports together easily in theircommunities, build cooperative frameworks among related groups like sports federations for people with disabilities, local governments,
and private companies.
*See here for details (Japan Sports Agency website)
https://www.mext.go.jp/sports/b_menu/boshu/detail/jsa_00211.html (Japanese only)

Holding “Classes for Protecting the Heart for Parents and Children”
In collaboration with Sakakibara Heart Institute (Fuchu-shi,
Tokyo; Hospital Director: Mitsuaki Isobe), affiliated with the
Public Interest Incorporated Foundation Sakakibara Heart
Foundation, we co-hosted parent-child classes to protect theheart. Through experiential contents that children could participate in with their parents, the classes aimed to deepen
knowledge about heart disease.

Quiz on drugs used for the heart

21

Qol Holdings Value Report

Learning about heart-healthy dietsMateriality

Improvement of quality of life of employees

Human resource strategy to produce professional personnel engaged in medical care
Vision of the Qol Group

Human resource strategy of the Qol Group
Based on the desire to contribute to improving the quality of life of patients through medical care, the Qol Group has establishedan environment and system that allows a diverse range of human resources who share this philosophy to actively participate, invests in human resource development, and assigns the right people to the right positions.

Human resource development
Employee training and career model

Qol Group’s Value Creation Story

We place great importance on developing human resources who excel in all of the following as medical professionals and members of society: ethics (the ability to interact with patients with high ethical values as a medical professional), knowledge (familiarity
with medical care and dispensing fees covered by health insurance and the ability to accurately propose and support medication
treatment and preventive medical care), and skills (a high level of acquisition of the necessary skills for the job).
In order to create such human resources, we are focusing on pharmacist education and training that only Qol can provide, including practical training programs in close collaboration with hospitals, active participation in external academic conferences,and our own pharmacist certification system. Moreover, for pharmacists who have built up enough experience in pharmacies tobe independent, we have adopted a career model that allows them to freely select or change their career path from the threecourses of pharmacy management, expert, and head office divisions so that they can utilize their knowledge in the field and playa more active role in various fields.

Example of pharmacist training

Qol certified pharmacist system
Qol has established its own in-house certification system. There
are two courses: a standard course for pharmacists with broad
knowledge, and an expert course for specialists with advanced
expertise.
Stratified training
To support the desires of pharmacists to continue to growthroughout their careers, we provide knowledge and skill development according to their careers.

Training at hospitals
In cooperation with hospitals, we provide training in various
themes through practical training and observation. As part ofteam medicine, participants learn prescription proposals and arrangement at the time of hospital discharge so that they can
support patients continuously after their discharge from thehospital.
E-learning (Q.O.L.S.)
The e-learning system allows participants to easily learn in ashort span of time (30 minutes per lecture) and can be taken via
smartphone.

Sustainability at the Qol Group

4+2 year personnel training program
We offer a long training period of six years after entry into thecompany. Employees can learn the various knowledge and skills
required to perform important work involving human life.

Diversity promotion
L.A.D.Y.S. Conference, a study group for women’s empowerment and advancement in the workplace
Unique to the Group, which has a large number of women, we have established L.A.D.Y.S.* Conference, a study group for women’s
empowerment and advancement in the workplace from the perspective of women. The conference is working on government-supported reforms for women’s empowerment and development of better working environment at companies, as well as
promoting activities by pharmacists and other staff as family pharmacies.
* L.A.D.Y.S.: Luminous, Activity, Diversity, Yell, Staff

Nursing care leave

Maternity leave before and after childbirth

Performance Data

Leave and shortened working hours for nursing care and childcareChildcare leave Shortened working hours for childcare

Creating attractive workplaces
Work style reform through DX
Improving operational efficiency using dispensing equipment and IT
We are the first in the industry to introduce Drug Station dispensing equipment that automatically picks pharmaceuticals.

Qol Holdings Value Report22

Environment
Materiality

Climate change measures

Initiatives for climate change
Disclosure based on TCFD
Response to TCFD recommendations
Based on the Corporate Philosophy of “We support quality of life for everyone. There for you. Anywhere, anytime,” the Qol Grouphas identified important issues (materiality) in order to continue contributing to the social infrastructure through medical care.
Against this backdrop, the Group announced its support for the recommendations of Task Force on Climate Related Financial
Information Disclosure(TCFD) in December 2022.
In line with the TCFD’s goal of ensuring that companies and organizations appropriately disclose information on the risks andopportunities associated with climate change so that investors can make appropriate assessments, the Group is committed to appropriate disclosure according to the TCFD’s framework, and to working toward the goal of a sustainable society and economy.
The four frameworks recommended by the TCFD recommendations (governance, risk management, strategy, and metrics & targets) are as follows.

GovernanceIn order to contribute to the realization of a sustainable society through its business activities, the Group has established a
Sustainability Committee, chaired by the President and Representative Director. The Sustainability Committee discusses mattersrelated to sustainability and reports its findings to the Board of Directors at least four times a year. The Board of Directors makes
decisions on important matters reported by the Sustainability Committee and supervises the committee.
In addition, we have established the Sustainability Committee Secretariat whose members consist mainly of the heads of relevant divisions of the Group, as a subordinate organization of the committee. The Sustainability Committee Secretariat submits
proposals to the Sustainability Committee after deliberation and consideration of measures and KPIs to be implemented by theentire Group. It also manages the progress of measures decided by the Sustainability Committee.

Risk management
At the Group, for risks relating to overall business identified
company-wide, the level of importance is identified basedon factors including the degree of impact on management
and likelihood of occurrence, and the Sustainability
Committee manages matters to be addressed by the Group.
It also reports the contents of these matters to the Board of
Directors as appropriate.

General Meeting of
Shareholders
Board of Directors

Consultation/
Recommendation

Sustainability Committee
Management Committee

Strategy(i) Identification of significant risks and opportunities
Risks associated with climate change can be categorized into those resulting from the transition to a low-carbon society (transitionrisk) and those resulting from changes in weather patterns, such as more severe weather disasters (physical risk). Moreover, climatechange can be viewed not only as a risk but also as an opportunity due to changes in patient behavior. The following are risks andopportunities associated with climate change that the Group considers to have a significant impact.
We will review and carefully examine risks and opportunities as appropriate.

23

Qol Holdings Value ReportConversion ofmarkets andtechnologies

・Opportunity loss in responding to customer needs
・Cost increase for R&D and capital investment
・Needs expansion for environmentally friendly products and packaging
・Changes in health concerns and dietary・Business opportunity increase for renewable products, low-carbon, etc.
・Sales opportunity increase for environmentally friendly products
・Efficiency improvement of resources, production, and logistics
・Birth of new markets and accessibility to markets

Reputation

・Changes in customer behavior and preferences
・Changes in financing and investment conditions from financial
institutions and investors, and divestment
・Impact of delayed climate change-related disclosure on stock prices
and investors

・Improvement of corporate value through proactive information
disclosure
・Changes in customer behavior and preferences
・Improvement of internal and external reputation and acquisition oftrust through climate change initiatives

Acute・Aggravating extreme weather
・Soaring prices and depletion of raw materials due to disasters
・Increase in infectious diseases caused by climate change
・Disruption of logistics due to extreme weather

・Strengthening of supply systems and customer acquisition by adapting
to extreme weather conditions
・Increase in climate change-related diseases

Chronic

・Soaring prices and depletion of raw materials due to risingtemperatures, and increase in management costs
・Rise of sea level and tsunamis
・Increase in infectious diseases due to rising temperatures
・Increase in energy use due to increased air conditioning use
・Water shortages and droughts due to changes in rain precipitation patterns

・Increase in infectious diseases
・Development of products and services to meet the needs of risingtemperatures
・Limiting damage through systematic measures against climate change・Stabilization of inventory by securing appropriate levels

Qol Group’s Value Creation Story

Policies andregulations

Vision of the Qol Group

Opportunities
・Competition through introduction of tax burden
・Innovation in facilities and equipment due to tighter regulations

PhysicalTransition

Risks
・Introduction of carbon tax
・Tightening regulations on CO₂, plastics, and other emissions
・Cost increase of energy procurement due to tighter regulations

Sustainability at the Qol Group(ii) Scenario analysis
Using the scenario analysis method, the Group has begun
Pharmacy
Dispensing pharmacies, convenience
analyzing the impact on its business activities of all dispensBusinessstores and shops
Targeting pharmacies and convenience stores and shops in thebusinesses Medical-Related
Fujinaga Pharm Co., Ltd.
Business
Pharmacy Business, and Fujinaga Pharm Co., Ltd. in theTransition
Medical-Related Business. This analysis is conducted in accorIEA WEO2019
scenario
Scenario
dance with multiple scenarios drawn up by the IPCC
Physical scenario
IPCC AR5(Intergovernmental Panel on Climate Change), IEA
Target period
2030, 2050
(International Energy Agency), and other organizations.
As mentioned earlier, we have organized the risks and opportunities based on the TCFD recommendations and external reports.
The secretariat is currently leading the discussion to incorporate various opinions.
We also analyze the impact of each scenario and worldview on financial and business strategies, etc., not only negatively, butalso expanding to positive impacts. Details will be disclosed as soon as they are ready.

Metrics & targets
The Group has set the following metrics & targets to reduce risks and enhance opportunities related to climate change.
Metrics ・KPI: CO₂ emissions reduction ratio (Scope 1 and 2)(compared to FY2013)
・Period: Until FY2030
・Target: Pharmacy Business (dispensing pharmacies, convenience storesand shops)
Medical-Related Business (Fujinaga Pharm Co., Ltd.)

Targets・Pharmacy Business: Reduce CO₂ emissions
per store (Scope 1 and 2) by 30%
・Medical-Related Business: Reduce CO₂ emissions (Scope 1 and 2) by 30%

Performance Data

We will complete the calculation and analysis of CO₂ emissions for each scope as soon as possible, and work to reduce CO₂ emissions not only for the Group but also for the entire supply chain.
In addition, the Group will continue to implement initiatives such as the Green Smile Project (store greening campaign) andpharmacies equipped with disaster prevention stockpile warehouses and power generators.
We will continue to implement initiatives for environmental protection and the future, and we will continue to disclose information related to climate change in an appropriate manner.
Please refer to our website for details of the Group’s disclosure based on the TCFD.

Qol Holdings Value Report24

Environment
Materiality

Climate change measures

Operation of dispensing pharmacies with consideration for
the global environment
CO₂ reduction facilities and environmentally friendly model stores
The Group strives for global environment conservation by reducing environmental impacts in all of its business activities. At pharmacies, we focus on store design that does not place a burden on the environment or stores with good energy-saving performance and CO₂ reduction facilities. Examples include solar panels on rooftops and highly energy-saving LED lighting.

Morning NoonNight Evening

Solar Panels on roof

Change lighting by time of day

Promoting use of reusable shopping bags and eco-friendly plastic bags
All stores of the Qol Pharmacy Group are running the Bring Your Own Bag Campaign toreduce the use of plastic bags. When plastic bags are necessary, we use eco-friendly plastic bags containing 30% plant-derived biomass materials.

Conducting environmental volunteering activities
While making efforts to increase our involvement in local communities, we are committed to raising environmental conservation awareness of each employee within the Group.
● Environment beautification volunteering activities (beautification and cleaning of thesurroundings of the pharmacies)● Promote Cool Biz and Warm Biz (wearing cooler clothing during summer and warmer
clothing during winter to save energy and reduce CO₂ emissions)● Activities for going paperless (Qol)

Poster for promoting use of
reusable shopping bags

Appropriate management of pharmaceutical inventories and reduction of waste
To solve the problems of stock-out and waste of expired medicines, Qol Pharmacy has
started a trial operation to introduce a system for optimizing orders with AI-based demand forecast. We believe that this measure will not only reduce the disposal of pharmaceuticals but also lighten the workload of employees. It will also reduce CO₂ emissions
from wholesalers’ delivery vehicles as the number of additional deliveries can be
decreased.
And we were the first in the industry to install Drug Station, a pharmaceutical dispensing equipment, which automatically picks pharmaceuticals. The system automates medication picking based on the prescriptions and greatly improves the efficiency of thestocking procedures, allowing pharmacists to spend more time with patients.

25

Qol Holdings Value Report

Drug Station,
automated medication picking equipment

Sustainability Targets for 2030 and 2050

Vision of the Qol Group

Sustainability Committee

Qol Group’s Value Creation Story

To solve social issues, the Company aims to promote ESG further. Through initiatives to realize “a connected, healthy, prosperous
and sustainable society,” the Company has established Qol Sustainability Value (QSV) as value to provide to society via solutions tosocial issues through business and decarbonization efforts. It is working to visualize the progress of concrete value.
At the Board of Directors meeting held in April 2022, the Company established the Sustainability Committee, chaired by the
President and Representative Director to address sustainability issues such as social and environmental issues toward the realization of a sustainable society.
The Sustainability Committee (1) investigates sustainability trends, (2) formulates management strategies related to sustainability, (3) identifies and reviews important issues (materiality), and (4) monitors progress and evaluates achievement status.
Additionally, upon consultation from the Sustainability Committee, we have established the Sustainability Committee Office.
The office comprises executives, mid-level employees, and young employees from across departments who discuss current conditions and future visions with diverse perspectives and ideas.

Targets and measures
Item

Target deadline/value

FY2023 measures
Develop a flow to grasp energy usage in each company
Grasp electricity usage at own stores

Reduce 100% by 2050

Switch existing store lighting to LED
Sustainability at the Qol Group

Group CO₂ emissions

Introduce electric vehicles
Install solar panels

Plastic bag usage rate

Disposal rate

Within 8% by 2030

Reduce plastic bags

Within 5% by 2050
1.7% by 2030

Reduce product waste rate
Create a system enabling women to continue inmanagement positions after life events

Female manager rate

50% by 2030
(Above managers + pharmacy managers +assistant managers)

Improve long working hours
Improve productivity
Performance Data

100% take five days paid leave
Systematize store shifts
Paid leave rate

70% by 2025

90% by 2030
Improve long working hours
Improve productivity

Qol Holdings Value Report26Performance Data

Financial and Non-Financial Highlights
Financial dataC l o si ng m o nth a n d ye a r

FY 2 0 1 8

Net Sales(Million yen)

144,783

Ordinary profit(Million yen)

7,208

Profit attributable to owners of parent(Million yen)

3,908

Comprehensive income(Million yen)

3,753

Net assets(Million yen)

39,017

Total assets(Million yen)

94,236

Net assets per share(Yen)

1,006.55

Basic earnings per share(Yen)

101.73

Capital adequacy ratio

(%)

41.1

Rate of return on equity

(%)

10.5

(Times)14.8

Cash flows from operating activities(Million yen)

5,773

Cash flows from investing activities(Million yen)

(8,287)

Cash flows from financing activities(Million yen)

2,906

Cash and cash equivalents at end of period(Million yen)

20,193

Price earnings ratio(Note)	The Company has applied the “Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29, March 31, 2020) and other standards from the beginning of FY2021.
Key management indicators for FY2021 are the indicators after application of the said accounting standards.

Non-financial data
Environment

SocialElectric power(Thousand kWh)

9,412

Electric power (per store)(Thousand kWh)

12.3

Number of stores(stores)766

Number of pharmacists(Persons)

2,124

Ratio of female managers

(%)

27.2

(Persons)

202

Internal (male)(Persons)

5

Internal (female)(Persons)1

Outside (male)(Persons)4

Outside (female)(Persons)

1

Persons taking childcare leave

Governance

Number of Directors(including Statutory
Auditor)

Ratio of female Directors

27

Qol Holdings Value Report

(%)

18.2

165,411

161,832

166,199

170,036

8,024

7,403

10,094

10,098

4,067

3,365

5,489

5,656

4,229

3,450

5,599

5,657

41,001

41,83443,881

48,856

102,872

100,571

95,984

101,905

1,074.57

1,124.31

1,189.70

1,314.69

107.2389.55

149.51152.96

39.4

40.9

45.7

47.9

10.3

8.2

12.9

12.2

12.4

17.4

7.8

7.6

4,468

12,912

10,112

11,662(8,670)(3,065)(3,087)(7,013)(225)(6,114)(10,006)(2,569)15,766

19,49816,516

18,596

9,397

9,508

10,177

10,823

11.7

11.7

12.2

12.1

805

811

834

892

2,232

2,264

2,397

2,530

26.6

24.3

22.9

23.8

183

383

486

458

5

6

6

6

1

2

2

1

4

3

3

3

1

1

1

1

18.2

25.0

25.0

18.1

Qol Holdings Value Report

Vision of the Qol GroupFY 2 0 2 2

Qol Group’s Value Creation StoryFY 2 0 2 1

Sustainability at the Qol GroupFY2020

Performance Data

FY201 928

Company Profile and Stock Information
Company profile (as of September 30, 2023)
Company profile
Name

Qol Holdings Co., Ltd.

Foundation

October 4, 1992

Established

October 13, 1992

Representative¥5,786.89 million

CapitalPresident and Representative Director
Takashi Nakamura

Organization chart

Number of
employees(consolidated)

8,042

Stock exchange
listedTokyo Stock Exchange Prime Market(Stock Code: 3034)

General Meeting of Shareholders
Board of Directors

Audit & Supervisory Committee

Chairman and Director
Internal Audit Department

President and Representative Director

Medical-Related Business Development

Management Committee
Pharmacy Business Development

Corporate Strategy

Business
Management

Human Resources

Education Promoting
Department

Public Relations
Department

Addresses of the Group companies

29

Qol Co., Ltd.

37th Floor Shiroyama Trust Tower, 4-3-1 Toranomon, Minato-ku, Tokyo 105-8452

Ryukyu Qol Co., Ltd.

1-9-7 Noborikawa, Okinawa-shi, Okinawa 904-2142

Alpharm Co., Ltd.

2nd Floor Qol Bldg., 2-8-12 Chuo, Mito-shi, Ibaraki 310-0805

Fukushi Medical Co., Ltd.

2-25-4 Kamiya, Kita-ku, Tokyo 115-0043

KYOEIDO Co., Ltd.

2-5-38 Kameda Otsuki, Konan-ku, Niigata-shi, Niigata 950-0162

Pharmaster Co., Ltd.

20-11 Nakamura-cho, Oumihachiman-shi, Shiga 523-0894

NICHIHOS Co., Ltd.

Nipro Toyosaki Bldg., 3-3-13 Toyosaki, Kita-ku, Osaka-shi, Osaka 531-0072

Natural Life Co., Ltd.

5F Saga Shimbun Chuo Bldg., 1-14 Nakanokoji, Saga-shi, Saga 840-0833

Hokuriku Qol Co., Ltd.

31 Oki-machi Ni, Kanazawa-shi, Ishikawa 920-0013

Sera Medic Co., Ltd.

3-2-14 Ichinocho-nishi, Sakai-ku, Sakai-shi, Osaka 590-0951

KI Pharmacy Inc.

Dream KI402, 120-1 Nishimochida, Aira-shi, Kagoshima 899-5431

Hokusetsu Chozai Co., Ltd.

3-6 Sakae-machi, Kawanishi-shi, Hyogo 666-0021

Power Pharmacy Co., Ltd.

11-21 Takasago-cho, Utsunomiya-shi, Tochigi 321-0143

Medical Qol Co., Ltd.

Front Place Nihonbashi Bldg., 2-14-1 Nihonbashi, Chuo-ku, Tokyo 103-0027

Qol Assist Co., Ltd.

9F Front Place Nihonbashi Bldg., 2-14-1 Nihonbashi, Chuo-ku, Tokyo 103-0027

APO PLUS STATION Co., Ltd.

Front Place Nihonbashi Bldg., 2-14-1 Nihonbashi, Chuo-ku, Tokyo 103-0027

APO PLUS CAREER Co., Ltd.

7F Shin-Tokyo Bldg., 3-3-1 Marunouchi, Chiyoda-ku, Tokyo 100-0005

KOSEIKAI Co., Ltd.

9F Front Place Nihonbashi Bldg., 2-14-1 Nihonbashi, Chuo-ku, Tokyo 103-0027

Fujinaga Pharm Co., Ltd.

9F Front Place Nihonbashi Bldg., 2-14-1 Nihonbashi, Chuo-ku, Tokyo 103-0027

Qol Holdings Value ReportStock information (as of September 30, 2023)
Total number ofissuable shares

Total number ofissued shares

70,000,000 shares

38,902,785 shares

Number ofshareholders

17,291

Number of shares(shares)

Shareholding ratio(%)

Vision of the Qol Group

Stock situation

Name
Medipal Holdings Corporation

7,582,800

20.11

The Master Trust Bank of Japan, Ltd. (trust a/c)

3,842,600

10.19

Qol Group Employee Stock Ownership Association

1,777,915

4.71

Takashi Nakamura

1,641,000

4.35

Arata Takahashi

1,590,500

4.21

Okasan Securities Co., Ltd.

1,370,200

3.63

DAIICHI SANKYO COMPANY, LIMITED

1,304,000

3.45

Medipal Insurance Service Co., Ltd.

1,104,000

2.92

Custody Bank of Japan, Ltd. (trust a/c)

1,094,900

2.90

The Bank of New York Mellon 140044

784,000

2.07

Qol Group’s Value Creation Story

Principal shareholders(Note) Except for the above, treasury shares are 1,200,209 shares.

Breakdown of shares by type of shareholder
Percentage of issued shares owned by the shareholders

3.09

Financial
instruments
firms

14.59%

Individuals
and others
%

4.81%

30.00

Foreigncorporations,etc.

Number of shares(shares)

Shareholder

Financial
institutions

Other
corporations

29.23%

18.29%

Number of shareholders(persons)■ Financial institutions

5,676,900

14■ Financial instruments firms

1,869,594

28■ Other corporations

11,371,736

101■ Foreign corporations, etc.

7,113,487

153■ Individuals and others

11,670,859

16,994■ Treasury shares

1,200,2091

Sustainability at the Qol Group

Treasury shares%

Stock quote
(Yen)

2,500

(Thousandshares)Trade volume (Thousand shares)
Stock price (Yen)

15,0002,000
10,000

Performance Data

1,500

1,000
5,000
500

0
March
2014

0
March
2015

March
2016

March
2017

March
2018

March
2019

March
2020

March
2021

March
2022

March
2023

Qol Holdings Value Report30

Qol Holdings Co., Ltd.
37F, Shiroyama Trust Tower, 4-3-1,
Toranomon, Minato-ku, Tokyo 105-8452
ir@qol-net.co.jp
https://www.qolhd.co.jp/eng/