BML REPORT
2022

BML, INC.

BML Policy
Contents
About the BML Group
01 BML Policy
03 History of BML
05 Value Creation Process (Business
Model)

Corporate Mission

Management Objectives

Dedication to creating a healthy andCorporate Commitments
Pridetechnology and quality service

Having conviction in business and acting responsibly

1.

Commitment

BML is committed to creating a culturally richsociety by improving medical services andhealth through the latest technologies, systems,

2.

3.

Ensuring trust in BML
through superior
expertise and quality
services

Developing acreative, energetic organizationand service networks based on our extensive
clinical laboratory experience.

Growth Strategy for Value Creation

Providing top service through strong commitment and sincerity

Meeting clientneeds

09 Business Domains
15 Financial and Non-financial
Highlights

Fulfilling expectations through creative

cultured society.

07 Three Networks Supporting the BML
Group

17 Message from the President
23 Long-term Vision

Challenge
Meeting the challenge of ever higher objectives through total creativity

Progress
Keeping an eye on social progress and improving and refining sensitivity

24 Medium-Term Management Plan
29 Response to COVID-19
31 Message from the Financial Officer

Ethics
Maintaining self-disciplined moral standards as sensible members of society

BML’s Sustainability
35 Sustainability Management
37 Environment
43 Society
47 Corporate Governance

Data Section
59 Business Overview
61 Financial Data
63 Consolidated Financial Statements
67 Company Profile/Stock-relatedInformation

Information disclosure system
Financial information

Non-financial information

Earnings reports

Corporate governanceAnnual securities reports

reports, etc.

Reports to shareholders
BML REPORT 2022

Our website

1

BML REPORT 2022

http://www.bml.co.jp/eng/index.html

Reference Guidelines
International Integrated Reporting Frameworkof the International Integrated Reporting
Council (IIRC)
The Guidance for Collaborative Value Creationof the Ministry of Economy, Trade and Industry
Final Report of the Task Force on Climate-related Financial Disclosures (TCFD)

Editorial Policy

Period Covered

The BML Group has started publishing an integrated
report from the current fiscal year in order to facilitate
stakeholders’ understanding of our efforts towardsustainable growth. This report intends to facilitate acomprehensive understanding of the social andeconomic value created by the BML Group throughthe reporting of management strategies and activities
related to business and ESG. The report includes
matters of particular importance to the management of
the BML Group from among the financial and non-financial information disclosed on the corporate website.

FY2021(April 1, 2021 to March 31, 2022)
Please note that some reports before
and after FY2021 are included.

Organizations Covered
All domestic group companies
including BML, Inc.

BML REPORT 20222

About the BML Group

History of BML

Management

Since its establishment, BML has worked to improve medical care mainly through its Clinical Testing business, and has accumulated numerous achievements. Today, BML is highly regarded as a contract clinicaltesting center that provides a full range of services, covering highly specialized tests and investigative research. In addition, BML is actively expanding into a wide range of business domains, such as applying its
advanced and sophisticated technologies and abundant know-how cultivated in clinical testing to testing services in related fields such as clinical trials and food and environmental testing, as well as developing
and selling the industry’s first electronic patient charts using IT technology, and rolling it out as our medical informatics business.

1950s to 1970s

1980s to 1990s

2000s and onward

Commenced launch of a nationwide network of sales offices
Building a system network

Establishment of a central laboratory
Launch and expansion of the nationwide
laboratory network concept

Launch of the core laboratory concept (expansion of self-contained regional
laboratory and metropolitan area laboratory network)
Entry into the medical informatics business
Full-scale entry into the food hygiene testing business

1955
1966

1985

2001 Listed its stock on the First Section of the Tokyo Stock Exchange
2002 Clinical Testing Division of Otsuka Pharmaceutical Co., Ltd. was assigned
2005 BML General Laboratory acquired ISO15189 accreditation (international standard forFounded Sogo Blood Bank, Inc.
Shifted from blood bank business to clinicaltesting business
The corporate name was changed to Sogo
Biomedical Laboratory (abbreviated name

1976

BML [BIO MEDICAL LABORATORIES])

Business Activities

1971
1975

Registered as a hygiene laboratory
Established the Hokuriku Branch Officein Toyama City as the first branch office
1979 Introduced IBM S34 and brought 27
branch offices online

1989
1990
1993

1981
1984
1987

1988
1991

1995

Launched operations at BML General
Laboratory
The corporate name was changed to
BML, Inc.
Renewed logo mark
Head office was moved to Sendagaya,
Shibuya-ku, Tokyo, where the Company
was founded1955“1955”
3“1960”“1980”“1955” “1960” “1970” “1970”

BML REPORT 2022

2010

Exceeded ¥100.0 billion

2000 Released “Medical Station (MS),” an electronic patient chart system
2003 Acquired shares of EAC Corporation (food and environmental testing) (wholly owned by theCompany)

2006
2008
2011
2015
2019
2020
2022

November 1984
Completed construction of the laboratorybuilding at BML General Laboratory

1985

February 1991
Completed construction of the R&D
Center at BML General Laboratory

The current BML General Laboratory

Listed its stock on the First Section of the Tokyo Stock Exchange

1990“1980”“1980”“1990” “1990” “1990” “2000”

The “New Symphony Chemistry,” a new automated testing line, began operations
New Frontier System (automated dispensing system) began operations
Released the “QUALIS” electronic patient chart system
Net sales exceeded ¥100.0 billion
Achieved operating income of ¥10.0 billion
Implemented responses to COVID-19
Released the “Qualis Cloud,” a cloud-based electronic patient chart system

June 1987
Completed construction of the officecenter at BML General Laboratory

Commenced operations at BML General Laboratory
1980

Established a joint laboratory for international clinical trials in collaboration with U.S.based Covance Inc. (currently Labcorp).
Kensuke Kondo appointed President (current President)

2014

Commenced development of regional
laboratories at main offices
Net sales exceeded ¥10.0 billion
Introduced the IBM 3090-150EL, amainframe computer, and established anationwide sales network
Established regional laboratories in 10
cities nationwide
The “Frontier System,” an automatedspecimen receiving, sorting, dispensing
system, was launched“Symphony Chemistry” and “Symphony
Hematology,” automated laboratory test
line systems for biochemical and hematological tests,
began operations

Exceeded ¥10.0 billion
Founded the Company

clinical laboratories)

2000 2001“2000”“2010”“2000”“2020” “2010”2010“2020”“2010”

Trends in net sales
2021“2020”BML REPORT 2022

4

About the BML Group

Value Creation Process (Business Model)

The BML Group’s Policy is “Dedication to creating a healthy and cultured society.” We will continue to enhance value creation while contributing to the improvement of medical services and health throughthe three strengths we have cultivated thus far, namely our sales network, system network, and laboratory network.

External business environment

Input

Social environment

Manufacturing capital

Basic requirements in Japan

Unique automated testing system
More than 100 businessoffices nationwide
116 collection and delivery centers
Nationwide laboratory
network of 81 laboratories
30 serum separation laboratories
In-house industrial waste
incineration facilities

Declining birthrate and aging
population
Labor force shortages

Political and economic conditions
Reduction of medical expenses

Social demands(FY2021)

Tighter regulations on
workstyle reforms
Advancement of diversity

Intellectual capital

Technological innovations
Development of digitaltechnologies
Growing public interest in AI
and big data
Spread of next-generation
communication technologies

Trends in the medical
and testing industry
Competitive environment
Intensifying price competitions
Spread of regional medical
cooperation
Entry into the market fromdifferent industries andoverseas

Diversification of clinical testing
Development of companion
diagnostics (CDx)
Advancement of online
medical examinations

Changes in the environment
related to COVID-19
Intensifying competition due to
new entrants into the market
Increased efficiency of PCR testing
Emergence of new variants

5

BML REPORT 2022

Operation know-how
More than 4,000 testing items(FY2021)

Human capital
Approximately 1,800 sales staff
Approximately 2,300 collection and delivery staff
Approximately 2,200 clinicallaboratory technicians

Business activity

OutputClinical testing businessOutcome
P.9

Strengths of
the BML Group

Revenue growth(FY2021)

Sales
network

Net sales:

Clinical testing
Clinical trial testing

Food hygiene business, etc.

Operating income ratio:

P.11

Financial capital

26.3%

Stable and continuous
shareholder returns

Social value

Management base

Systemnetwork

Human resource development and utilization

P.8

P.43

Reduction of patient burden
Food consulting
Food and environmental testing
Intestinal bacteria testing

Medical informatics system business

P.13

Social and relational capital(FY2021)¥186,067 million

Operating income: ¥48,889 million

P.7(FY2021)

Building good relationships
with medical institutions
Joint research through industry-academia collaboration

Economic value

and anxiety by providing
prompt testing services
Ensuring accuracy of

Realization of thelong-term vision
Contribution toSDGs

testing and shortening
treatment lead time througha careful collection anddelivery system
Improved efficiency andLaboratory
network

reduced costs of medical
Development, sales and maintenanceservices for electronic patient chart system

P.7

care
Food safety and security
Workplace where diverse

Sound financial position
Equity ratio: 64.8%

Other businesses(FY2021)human resources can play
an active role

Natural capital(BML General Laboratory)
Electricity consumption:
approximately 2,169 kwh
Spitz tube usage: approximately 2.5 million Spitz tubes(FY2021)

Corporate Policy

P.1

Dispensing pharmacies
SMO

BML REPORT 2022

6

About the BML Group

Three Networks Supporting the BML Group
Sales network
We provide detailed support, from specimen consignment to
information services, through the industry’s largest sales network
BML has a network of more than 100 sales offices throughout Japan to provide
prompt and accurate services. In addition, approximately 2,300 dedicatedcollection and delivery staff members ensure that requested specimens arepromptly delivered to nearby laboratories, preventing changes in data overtime and ensuring thorough quality and accuracy control. We aim to become
an even better partner for our customers by using our foresight and outstanding drive to take action, through collaboration with laboratories, systems, andR&D to create new forms of service.

System network
Providing a variety of system services that support daily
medical care by leveraging knowledge and experience gained
through more than 60 years of involvement in the medical field

Laboratory network

BML aspires to be a company that supports medical carein this era of increasingly sophisticated information technology. To this end, we are rolling out medical information
services through state-of-the-art network computing thatlinks the BML General Laboratory, regional laboratories,
and branch offices. BML also develops and provides
electronic patient chart systems and in-hospital examination information systems, which are solutions developed by
BML to meet the needs of clinics, based on many years ofexperience in the medical field.

All regional laboratories provide prompt and uniform testing
services in cooperation with BML General Laboratory
In order to provide the top-level testing technology of the BML
General Laboratory to as many customers as possible, we haveformed a laboratory network in cooperation with Group companies (regional laboratories). Through the standardization of workand the introduction of standardized equipment and facilities,
we are able to provide homogeneous testing anywhere in
Japan. By expanding regional laboratories, we will realize
further community-based services to local clients. In addition,
we will aim for further growth, including in related operations, byapplying the know-how we have developed in clinical testing tofood testing.

Characteristics of BML

Wide range ofadvanced testing
areas

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BML REPORT 2022

Laboratory automation
at the BML General
Laboratory

Thorough quality
and accuracy
control

BML REPORT 20228About the BML Group

Business Domains
2.

Laboratory automation at the main laboratory, BML General Laboratory

Clinical testing business
We respond to a wide range of testing needs, from general-purpose laboratory applications
to highly sophisticated specialized services.
Based on the advanced and sophisticated clinical testing technologies and abundant know-how
cultivated since its founding, BML has built three networks of sales, systems, and laboratories thatare the best in the industry. By effectively utilizing these networks, BML is working to meet a wide
range of testing needs from medical institutions nationwide.

1.

reliable testing.
As BML’s eternal themes, we are constantly working tospeed up, automate, and improve laboratory testing
accuracy and credibility.
One of the answers to these themes is the Frontier andSymphony system of BML General Laboratory. This

automated testing system consists of Frontier, which
automates the pre-test process from specimen sorting todispensing, and Symphony Chemistry and Symphony
Hematology, which automate the subsequent testingprocess.

Automated dispensing system Frontier

Wide range of advanced testing areas

Frontier achieves automated sorting and dispensing in accordance

We have a system in place to meet the needs of medical institutions nationwide, in all areas of clinical testing.
BML Laboratories conduct over 4,000 types of testing, widely ranging from general-purpose laboratory applications to highly sophisticated specialized services
BML’s top-level laboratory testing ranges from routine
biochemical and hematological testing to specialized
testing for tumor markers, infectious diseases, hormones,
cellular immunity, DNA, and bacteriological testing. This

The BML Group’s unique automated testing system, Frontier and Symphony, enables rapid and highly

testing meets the clinical needs of medical institutions.
BML serves over 300,000 clients a day through laboratory testing for medical institutions nationwide.

with the test request information by linking with a bar-coding system.
The system reads the barcode on the specimen andinstantly retrieves its requested information. The combination of this bar-coding system, the automatic transfer
system, and the automated dispensing system enables
automated sorting and dispensing based on the request
information.

Frontier automated dispensing system

Symphony Chemistry and Symphony Hematology automated analysis systems
Superior expertise supporting sophisticated specialized laboratory testing

Automation of biochemistry and blood routine tests dramatically improved processing capacity.
The automated biochemistry analysis system Symphony
Chemistry consists of a number of analyzers and robots,and has achieved a dramatic improvement in processing
capacity. Symphony Hematology, an automated hematology analysis system, is equipped with a large number ofvarious fully automated hematological testers to performroutine blood tests at high volume and high speed.

Following the ideal that clinical testing provides new
information not known earlier, we introduce specializedlaboratory test serving clinical needs in oncology, infectious diseases, diabetes, hypertension, allergies, andgenetic studies.
In particular, in the field of genetics, we have introduced next-generation sequencers (NGS) and areworking to develop technologies to meet the needs for
new tests using genome analysis, in the areas of infectious diseases, cancer, and genetic diseases. We are
actively developing and continuously introducing automated processing to obtain accurate, reliable assay
results.

Symphony Chemistry

Unmanned specimen transfer through the introduction of freeway-mobile robot transport
Robot transport is used to supply and remove specimens
to and from the automated analysis systems, Symphony
Chemistry and Symphony Hematology. The robots canrun autonomously without trajectory, and freely transports
specimens for analysis based on order information fromthe analyzers.

Top-class microbiological testing
BML’s microbiological testing, among the many tests that
BML conducts, boasts a large number of world-classtests, and it has always played a pioneering role invarious academic conferences. BML has automatedprocesses for identifying bacterial strains – processes
that once relied on visual recognition alone. Using technology to input microscopic test data vocally, BML has
dramatically improved accuracy and efficiency. In addition, know-how developed through microbiologicaltesting is now applied to new fields such as food sanitation and environment analysis to meet client needs,
further strengthening BML’s high reputation.

3.

BML’s unique quality assurance system, which utilizes an internal audit department and external accreditation
organizations, strictly audits and supervises the entire company and all departments.
Quality in clinical testing requires precision control toensure the precision and accuracy of test measurements
and quality assurance of measured values. BML has
received ISO15189* and other accreditations and utilizes
external audit programs to improve accuracy and quality.
Voice input system to record microscopic examination results

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BML REPORT 2022

Thorough quality and accuracy control

In addition, we have established a Quality Assurance
Office as a quality control auditing department which is
independent of each laboratory department, and haveestablished a thorough auditing system within the company.

*ISO15189: An international standard consisting of two components, quality and competence of clinical laboratories. BML General Laboratory obtained certification in September 2005.

BML REPORT 202210About the BML Group

Business Domains
Factory audits

Food hygiene business
Testing and consulting to support safety and security
The BML Group provides one-stop services ranging from microbiological and physicochemical
testing of food products, product quality testing, kitchen hygiene inspections at restaurants, foodfactory audits, the establishment of hygiene and quality management systems, and support for
obtaining food safety accreditations.
Based on our advanced testing technology and know-how developed over many years, we haveestablished a business system of various high-quality tests and consulting, and provide speedy
services through our nationwide network.

1.

Food and product testing

As food globalization progresses, food safety management systems must also be established and operated
with global awareness.
BML conducts regular verification of food safety
management structures, such as food safety management systems and hazard control at the customers’ own
factories and supplier factories, to ensure proper function and encourage improvements. This will help prevent
food incidents and lead to the delivery of safe andreliable products to consumers.

3.

We provide various tests such as food and product tests and intestinal bacteria tests with high quality andProduct consulting

We provide total support from product labeling to quality control for clothing and general merchandise.

speed through our nationwide network.
Quality control operations support
Food and product testing
We provide a wide range of testing services such as microbiological testing, physicochemical testing including nutrient analysis, pesticide residue testing, radioactive material
testing, foreign material testing, and complaint cause
analysis, to meet diverse customer needs. In addition, we
can also perform various tests related to household goods
and textile products, such as strength and physical property

tests and statutory
tests. BML Group’s
testing business is acore business that has
been highly trusted formany years since its
establishment.

Intestinal bacteria testingIn accordance with the Food Sanitation Act, and otherrelated laws and regulations, food business operators
are required to manage hygiene at their workplaces byconducting healthmanagement andintestinal bacteria
testing for employees
engaged in manufacturing, processing,cooking, and sales.

2.

There is a risk of food poisoning incidents when healthycarriers (people who possess pathogenic bacteria buthave no symptoms caused by the bacteria) handle foodproducts. Regular intestinal bacteria testing enables theearly detection of healthy carriers and prevents infectionof others and food poisoning incidents.
The BML Group uses the latest genetic testing equipment to determine negative results, and then conducts
culture tests on specimens suspected to be positive inorder to accurately determine the type of bacteria.

Quality control is an extremely important task for manufacturers and sellers of products.
In the event that a product accident causes serious
harm to consumers or fails to comply with relevant laws

and regulations, it can lead to not only legal liability but
also significant losses including financial losses and lossof social credibility. BML Group’s staff with expertise
support quality control operations.

Product labeling verification services
For sellers of products, the labeling on the products
should not be left up to the manufacturer. They have a
responsibility to sell to consumers, which includes not
only product labels but also in-store POP and pricecards. In the ever-growing e-commerce business, consumers will make choices based on the information
displayed on labels. If there are any misrepresentations
or exaggerated advertisements, it can lead to not only
legal liability but also loss of consumers’ trust and incur
significant losses.

Food consulting
4.

Support for acquisition of accreditations

We provide total support from kitchen and factory inspections and audits to the establishment of quality control systems.
We support the acquisition of food safety accreditations based on international standards.

Store inspections
In addition to food and service, a successful restaurant
has good hygiene management. In stores where hygiene
management is inadequate, the risk of food poisoning
incidents increases dramatically. It is the duty of foodservice providers to establish and practice hygiene
management rules, and provide customers with safety
and peace of mind.
The BML Group provides support to improve the level ofhygiene (education, manuals, and guidance for

11

BML REPORT 2022

improvement) and contributes to the improvement ofcustomers’ quality and hygiene management, by checking everything from raw materials to food management,
kitchen environment, and cooksin the kitchens of restaurants,
supermarkets, hotels, etc. fromthe perspective of hygiene
management professionals.

As part of the global food safety concept, it is necessary to introduce management methods in three areas:establishment of a system for continuous improvement(PDCA cycle) through the food safety management
system (FSMS); use of good manufacturing practices(GMP) to maintain a favorable manufacturing environment; and process control through the HACCP system(Codex HACCP) to certify safety.

In addition, as the environment surrounding foodbusiness operators is changing, it is becoming more
and more important to establish a system to ensureaccountability.
The BML Group provides support services for JFS-A/
B program conformity certification business, accreditations by local governments (prefectures), and acquisition of accreditations for food safety management
systems such as ISO22000 and FSSC22000.

BML REPORT 2022

12About the BML Group

Business Domains
2.

Overview of “Qualis Cloud”

Medical informatics system businessElectronic patient charts, indispensable for IT in the era of medical information networks
The revision of the insurance system and the flow of management and business innovations basedon the Internet are drastically changing the conventional medical care system. The introduction ofelectronic patient charts in medical institutions is expected to have a significant effect on thereengineering of medical institutions and the establishment of information systems in the midst ofthese changes in the healthcare system. They are also indispensable to healthcare as a medium
for management analysis and informed consent.

1.

Various functions made possible with Qualis Cloud
Intuitive and easy to use, despite its multifunctionality
The intuitive and highly flexible operability is fully maintained from the on-premise Qualis system.
It is also highly customizable, and it provides anoptimal user experience tailored to the individuality of theuser.

Qualis Cloud

The electronic patient charts system Qualis Cloud is a solution developed by BML to meet the needs ofclinics, based on many years of experience in the medical field.
After the Ministry of Health, Labor and Welfare approved
the electronic storage of patient charts in 1999, BML
developed and launched Medical Station, an electronic
patient chart system for clinics, in April 2000, and Qualis,an electronic patient chart system for clinics without
beds, in April 2011. In April 2022, we released Qualis
Cloud, a cloud-based electronic patient chart system.

Qualis Cloud fully maintains all aspects that have madeQualis popular for many years.
Qualis Cloud is a cloud-based electronic patient chartsystem that adopts a smart client system, and has theadvantages of on-premise systems that have not beenrealized so far. Qualis Cloud will continue to grow as we
respond to feedback from the medical community.

Optimal operational support for each situation
Various support functions are installed to facilitatesmooth information input and reference in reception,
medical examination, and payment.
In addition, we provide convenient functions that are
unique to BML, such as the ability to seamlessly perform
everything from ordering outsourced testing to printing
specimen labels on the electronic patient charts.

Also features full integration with various systems
Reasons for choosing the cloudReasons for choosing the on-premise system

Needs for reducing introduction cost

Needs for satisfactory functionality
and customization

The strength of Qualis Cloud, which adopts the smart
client method, is in its capability to integrate with various
devices and systems installed in a hospital, just as if itwere an on-premise system.
It supports the facilitation of medical treatment, business efficiency, and improvement of patient services witha higher degree of freedom.

Image of integration
Diagnostic imaging equipment
Online appointment
systemNeeds for preparing for the risk ofdisaster or data corruption

Achieved cloud-based electronic patient chartsthat can meet a wide range of needs by adopting
the smart client method

Web medical
examination system
CR

Needs for onsite support in caseof emergency

Online eligibility
check
Medical ticket
issuing machine

Reception

Reception machinefor return visits

Needs for adopting trendy cloudcomputing

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BML REPORT 2022

Needs for streamlining operations bylinking with the hospital’s equipment

Cloud server(dual backup)

Cloud server
UltrasoundCT

Online medical
examination system

MRI

Image filing system

Electrocardiogram

Medical examination

Testing

Medical information
database

Payment

Outsourced testing
Test results

Automated payment
machineIn-hospital testing
equipment

Online billingManagement
analysis services

OrdersExternal laboratories (BML and others)

BML REPORT 2022

14About the BML Group

Financial and Non-financial Highlights

Financial Highlights

Non-financial Highlights

Net sales

Operating income

Female manager ratio

Childcare leave utilization rate

¥186,067 million¥48,889 million

9.3%

58.2%

Net sales (millions of yen)

Operating income (millions of yen)

Operating income ratio (%)

186,067

113,502

117,129

26.3
7.6

19,936
10,4509,337

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022 (Fiscal year ended)

Women

Childcare leave utilization rate (%)

Mar. 2018

Mar. 2019

9.0

8.3

9.3

9.3

19

25

61.4

24

22
44.4

8.1
Mar. 2020

Mar. 2021

58.2
49.0

14.4

9,763
8.9

8.2
Mar. 2018

Men

42

138,571

120,732

Female manager ratio (%)

48,889Mar. 2022 (Fiscal year ended)

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022 (Fiscal year ended)

36.1

1

0

Mar. 2018

Mar. 2019

13

3

1

Mar. 2020

Mar. 2021

Mar. 2022 (Fiscal year ended)

Ordinary income

Profit attributable to owners of parent

Female employee ratio

Average years of employment¥51,077 million¥33,741 million

40.8%

13.3 years (men), 9.9 years (women)

Ordinary income (millions of yen)

Ordinary income ratio (%)

Profit (millions of yen)

Net profit ratio (%)

Men (years)

Female employee ratio (%)

33,74127.5

18.1

20,803
10,880

9,811

8.5

9.3

8.6
Mar. 2018

Mar. 2019

15.0

10,211Mar. 2020

Mar. 2021

Mar. 2022 (Fiscal year ended)

14.1

14.0

51,077

5.3

5.7

5,988

6,646

5.3
6,375

Mar. 2018

Mar. 2019

Mar. 2020

39.4

38.8

39.2

Mar. 2018

Mar. 2019

Mar. 2020

40.8

40.1

Women (years)

13.8

13.7

13.3

9.3

9.8

9.8

9.9

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

9.9

9.9
13,711Mar. 2021

Mar. 2022 (Fiscal year ended)

Mar. 2021

Mar. 2022 (Fiscal year ended)

Mar. 2022 (Fiscal year ended)

ROA / ROE

Capital expenditures/depreciation

Paid leave utilization rate

Greenhouse gas emissions

ROA/ROE¥7,968 million / ¥5,639 million

58.1%

16,391 t-CO

21.2% / 33.0%
ROA (%)

Capital expenditures (millions of yen)

ROE (%)

Depreciation (millions of yen)

2

Greenhouse gas emissions (t-CO 2)

Paid leave utilization rate (%)

7,968
33.0

16.7
8.6

8.9

8.3

5.6

5.9

5.5

Mar. 2018

Mar. 2019

Mar. 2020

4,716 4,877

5,310

6,041

5,630
4,870

4,889

5,218

5,639

21.2

48.8

50.4

Mar. 2018

Mar. 2019

54.4

57.2

Mar. 2020

Mar. 2021

15,43815,582

15,47815,93916,391Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022 (Fiscal year ended)

58.1

10.7

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BML REPORT 2022

Mar. 2021

Mar. 2022 (Fiscal year ended)

Mar. 2018

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022 (Fiscal year ended)

Mar. 2022 (Fiscal year ended)

BML REPORT 2022

16

Growth Strategy for Value Creation

Message from the President
Shift to high functionality in clinical tests

Aiming to be number one incommunity service, test lineup,
contribution to the medical
community, and quality

Kensuke Kondo, President and Representative Director

17

BML REPORT 2022

While Japan’s universal healthcare system has achieved
the highest average life expectancy and the highest levelof insured medical care, the Japanese medical community faces the following challenges: (1) the need toreduce healthcare costs in response to the depletion offinancial resources due to soaring healthcare costs and(2) the depopulation of regional healthcare due to theconcentration of healthcare in large metropolitan areas.
In particular, with regard to (1), the measures taken by
the Japanese government so far in the field of clinicaltests have been to reduce the number of insurance
points for ordinary clinical tests, while increasing thenumber of points for high-performance tests using
companion diagnostics related to personalized medicine, guided by the thought that testing a patient’s genes
will lead to a reduction in medical costs by reducing thescope of conditions indicated for expensive treatments.
The BML Group aspires to be a medical service company that supports a rich culture of health through clinical testing. We believe that to this end, our efforts should
be directed to offering all clinical testing services anytime, anywhere, and accurately to the people throughout
Japan in order to respond to the above issues (1) and (2).
First of all, in response to the issue of (1), the need toreduce medical costs, the BML Group has been actively
introducing automation ahead of other companies and is
performing the most efficient tests. However, we do notconsider that our high-performance tests are provided in
a comprehensive range under current circumstances,
especially those related to the aforementioned personalized medicine. Given this situation, we will pursue asystem that will enable us to provide even more high-performance tests.
Secondly, in response to the issue of (2), the depopulation of regional healthcare, the BML Group aspires tobe a company that provides clinical testing not only inmetropolitan areas but also in regional medical care,based on the thought that medical care is an infrastructure that must be provided to all citizens. We believe thatthe BML Group can help maintain laboratories in regional
healthcare through a department responsible for operating laboratories in medical facilities and utilize the laboratory network and the collection and delivery networkthat the BML Group has established for high-performance tests requested by regional medical care, thereby
bridging the gap between metropolitan and regional
healthcare.
Due to the COVID-19 pandemic of the past two years,
PCR tests for COVID-19, which had been consideredhigh-performance tests, are now routinely performed. If ahighly infectious variant strain is detected, high-performance tests, such as genomic analysis, would be

conducted. Let me introduce the BML Group’s efforts in
PCR testing for COVID-19 as an example of how we wereable to provide comprehensive high-performance testing
not only in metropolitan areas but also in regional healthcare.
As the spread of the virus was very rapid at the time,
there was a high social demand to increase the processing capacity of these tests as much as possible in orderto detect the virus. To meet this demand, we collected
specimens from all over Japan and conducted tests at
the BML General Laboratory in Kawagoe City, Saitama,
which had served as a base for high-performance
testing. However, we determined that this test, while
being a high-performance test, was highly urgent during
the COVID-19 pandemic as the PCR test served as the
major basis for diagnosing COVID-19, and hospitalization treatment and isolation were required as soon as
possible based on the results of the test. Therefore, it
was necessary to shorten the specimen transport time
and the time to report test results as much as possible.
Fortunately, the BML Group had seven regional laboratories nationwide (in Sapporo, Morioka, Fukui, Nagoya,
Osaka, Okayama, and Fukuoka). We conducted the
COVID-19 PCR tests at all of these laboratories, and realized a system that enabled many of these laboratories totest overnight and report early in the morning the nextday. With the addition of two more laboratories (in Yokohama and Okinawa), we have established a system that
can test up to 46,810 specimens per day. As of March
31, 2022, the BML Group has conducted 26% to 27% of
the COVID-19 PCR tests conducted by all private testinglaboratories, which accounted for approximately 60% of
the total tests. Thus, we were able to meet the highdemand for PCR testing. Moreover, we have establisheda system that can perform genomic analysis on these
positive specimens up to 1,000 times per day as ahigh-performance test, thereby contributing to the understanding of the spread of variant strains.

Aspiring to be a valuable company forpatients and medical institutions
The BML Group’s first priority is to be a valuable company for patients and medical institutions nationwide. For
this reason, as mentioned above, we have established asystem to provide all clinical tests anytime, anywhere
and accurately.
The BML Group also provides services in the area of
medical information systems. One leading service iselectronic patient charts. The two advantages of introducing electronic patient charts are the immediacy ofmanagement through the digitalization of information andmore accurate medical care.

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Growth Strategy for Value Creation

Message from the President
understood and countermeasures are taken, the advantages will outweigh the disadvantages, and further
advantages can be expected with future advances in IT.
With these electronic patient charts, we would like toprovide a service that contributes more to medical careby continuing to develop systems that meet future needs.
Since I used to work as a physician (pediatrician), I
look at the BML Group’s business from a so-called
doctor’s perspective. I am always thinking about how ourservices and systems will impact patients. In that sense,by being involved in management while holding a medical license, I believe that I am managing our business ina direction more in line with the feelings of patients anddoctors, and I hope that we will continue to grow into a
company that is highly regarded in that sense.

Aiming for a leap forward under the Eighth
Medium-Term Management Plan

With regard to the immediacy of management throughthe digitalization of information, the electronic patient
chart demonstrates advantages in terms of speed andinformation sharing as all information is digitalized. In thecase of paper patient charts, physical movement isrequired for documents related to medical information,
including patient charts, for many processes related to
medical care, such as reception, medical examination,
testing, and payment, while such information is transmitted instantaneously for digitalized electronic patient
charts. This reduces the waiting time for patients whileallowing medical institutions to provide medical care to
more patients by securing the most important time fortreatment, and it also reduces the number of personnel,
thereby achieving greater efficiency. In addition, the elimination of the need for patient chart storage space is
expected to allow more effective use of the space thatwould otherwise be reserved for patient charts.
As for achieving more accurate medical care, electronic patient charts reduce the risk of misreading and avoid
the risk of miscommunication through the use of printed
text for instructions and transmissions unlike paper
patient charts which are handwritten. In particular, whenit comes to prescriptions, an electronic patient chart can
prevent medical accidents caused by prescription errors
by utilizing the support functions built into the electronic
patient chart, such as the search function of the drug’s
name and effects, and the reference function of the
drug’s package insert.
Of course, electronic patient charts have some disadvantages, such as the inability to function during power
outages. However, if these disadvantages are fully

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BML REPORT 2022

In May 2021, we announced our Eighth Medium-Term
Management Plan, which covers the three-year period
beginning in the same fiscal year. This plan is the final
phase of a nine-year plan that began with the Sixth
Medium-Term Management Plan (Period for Solidifying
Foundation) in FY2015 and continued through the Seventh Medium-Term Management Plan (Period for Growth)
before culminating in the Eighth Medium-Term Management Plan, which we consider the Period for Leaping
Forward. This nine-year plan sets the common target of
realizing the Group Vision “to become the most trusted
choice in the medical world” and aims to step up ourcommitment to quality and services as the foundation ofthis vision.
Initially, we considered setting separate targets foreach of the three-year periods and achieving them one
at a time. However, we decided that high quality andservice were the most important factors as the foundation of the Company’s growth. In light of the actual quality
and services provided by the Company, we have set anine-year plan based on the assumption that it will takenearly ten years to realize these targets. Nevertheless,we consider that the plan will become monotonous if it is
implemented over a single nine-year period, and such astate would be an obstacle to its realization. We therefore
have decided to divide the nine years of the common
Group Vision into three-year periods, and created anine-year plan that consists of the Period for Solidifying
Foundation, Period for Growth, and Period for Leaping
Forward as described above, as the vision of our threestep ramp-up.
Although we have just completed the seventh year of
the nine-year plan, we believe that the method of

evaluating a theme by dividing it into three-year periods,
as we have done this time, was appropriate for increasing the certainty of achieving our targets. There are threereasons for this. First, the method allows us to set anappropriate response period according to the scale ofthe issue. Second, the method enables us to monitor
progress at the end of each three-year period and makeappropriate revisions. Third, working on the same theme
increases our sensitivity to customer reactions to theissues we address, which in turn increases our sense ofaccomplishment when we make improvements andmotivates us to undertake further activities.
Although progress has been delayed in some areas
over the past few years due to PCR testing being performed during the COVID-19 pandemic, we are steadily
advancing our plan with a strong will to be number one
in regional service, test lineups, contributions to the medical community, and quality.

Three missions and three internal
action policies
Unlike the Sixth and Seventh Medium-Term Management
Plan, the Eighth Medium-Term Management Plan isbased on the three missions of customer satisfaction,synergy, and social responsibility and the three internal
action policies to achieve these missions of “Consensus:
consensus of all employees,” “Soundness: soundness of
all operations,” and “Standardization: pursuit of standardization.” The abbreviation for these action policies is“CSS.” The missions and the internal action policies are
related to the targets to be achieved and the specificactions to be taken to achieve those targets, respectively. Therefore, BML Group employees always performtheir duties with the three internal action policies in mind.
The policy “Consensus: consensus of all employees”
means that any issue must be shared, discussed, andagreed upon with all relevant employees, based on all
the information available. This allows us to guide the
BML Group toward the best possible solution at thatpoint in time. In addition, as all relevant parties are fully
aware of the process, they can take appropriate action
without any misunderstandings. In this sense, we havethe advantage of being able to overcome issues quickly.
For this reason, I consciously make efforts to summarize
the previous discussions and explain new issues thathave arisen as a result of the discussions in order tokeep everyone engaged in the actual meeting and tolead to further discussions.
“Soundness: soundness of all operations” means
taking action while asking ourselves what soundness isin order to realize the BML Group’s Policy of “Dedication

to creating a healthy and cultured society.” We believethat by doing so, the BML Group, as a medical service
provider, can grow into a company that is desired by
medical institutions that support health.
“Standardization: pursuit of standardization” wasoriginally intended to mean standardization in the sense
limited to the scope of testing. The BML Group has 81
laboratories nationwide, and some of these laboratories
perform testing in medical institutions. If standardization
is promoted in these laboratories, it will enable thesharing of test information among laboratories, leading toaccurate diagnoses and supporting more precise medical practices. However, we have often sensed that
achieving standardization of testing operations alone is
not sufficient to gain real trust. For this reason, we are
now working to introduce standardization in all of ouroperations, including testing.

Standardization and DX to enhancelaboratory, sales, and collection and delivery
In the Eighth Medium-Term Management Plan, we havefurther identified the following three Basic Strategic
Frameworks based on standardization and DX (digitaltransformation): enhancing the laboratory network,
enhancing sales capabilities, and renovating collection
and delivery processes.
As part of enhancing the laboratory network, we will
make efforts to standardize testing processes andenhance test items in our nationwide laboratories. At thesame time, we will commence preparations for the
restructuring of the BML General Laboratory, which willserve as a major pillar of the next-generation laboratory
concept. In addition to the testing procedures based on
the standard operating procedures, we plan to establish
a system that can provide highly accurate testing under
any circumstances by standardizing accuracy controls
and specimen identification methods in laboratories.
Documentation of each work method is essential for suchstandardization, and we believe that not only can more
efficient methods be devised by examining these documents, but also that functionality can be enhanced byestablishing a system that enables the management ofthese deliverables on PCs and tablet devices. We also
intend to establish a system that enables appropriate
evaluation of items to be performed in each laboratory,
including the restructuring of the BML General Laboratory, based on indicators such as clinical needs, urgency,
and profitability. Although the BML Group’s area ofexpertise to date has been automation, going forward,
we will seek to establish a more agile laboratory networkby combining these standardizations with DX.

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Growth Strategy for Value Creation

Message from the President
For enhancing sales capabilities, we will implement
coordinated marketing throughout the BML Group by
using the methods of DX to expand and deepen ourcustomer base and will work to develop sales throughcollaborations between headquarters, branches, andbranch offices.
For renovating collection and delivery processes, wewill promote a digital reporting system (hereinafter, DRS)
that streamlines the collection and delivery process,mainly by utilizing DX to improve convenience andreduce workload. DRS is a generic term for functions toimprove the efficiency of specimen collection and delivery, including the conversion of specimen labels usedfrom the time of specimen collection to bar-coded labels(B-Label), which will reduce the risk of specimen mix-ups
and establish the speed of operations compared toconventional specimen labels. Furthermore, we will workto establish temperature controls in pursuit of data quality.

Strengthening the medical information
system business with Qualis CloudAs part of our new DX promotion efforts, we are strengthening our electronic patient chart services in our medical
informatics business.
For our electronic patient chart systems, we have been
providing the on-premise electronic patient chart systems, Medical Station (MS) and Qualis. In April this year,
we launched the cloud-based electronic patient chart
Qualis Cloud, which fully maintains all aspects of theexisting Qualis system, including operability.
Typically, cloud-based electronic patient charts havebeen browser-based. However, the BML Group’s Qualis
Cloud is a smart-client type in which the underlying
program that operates the patient chart is installed
directly on the computer, and it communicates with thedata in the cloud and functions without having to use abrowser. Therefore, compared to browser-based systems, Qualis Cloud has the advantage of being able toconnect with medical equipment in clinics and medical
centers, such as electrocardiograms, ultrasound machines, and X-rays.
In addition, cloud-based electronic patient charts havethree other advantages.
First, they improve data integrity. Even if a clinic ormedical center is hit by a disaster, the patient chart data
is protected because the data itself is stored in the cloud.
Second, they reduce the cost of introduction. Cloudbased electronic patient charts do not require the installation of servers, which is necessary for on-premise
electronic patient charts. Therefore, this cost can be
reduced.

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BML REPORT 2022

Third, they reduce the maintenance burden for medical institutions. With an on-premise system, the medical
institution is responsible for updating and correcting
problems in the electronic patient chart system, in general. However, with a cloud-based system, we, the electronic patient chart providers, manage most of thesetasks, thereby requiring less effort on the part of medical
institutions.
Furthermore, at the end of this fiscal year, we plan torelease a browser version of Qualis Cloud. Although thebrowser version is limited, in the sense that only basic
operations can be performed, and it does not provide
the operability of Qualis, we are aiming for intuitive
operability that can function adequately during housecalls by doctors if there is an internet environment.

Developing growth drivers in
non-insurance fields
In terms of new businesses, we will promote efforts in
non-insurance fields. The clinical testing business isbound by insurance points under the universal healthinsurance system, and while it is promising in terms ofstability, rapid growth cannot be expected in this area. In
order to expand our differentiated business against thisbackdrop, we need to develop growth drivers in non-insurance areas. There are currently four business fields
where we have high expectations: medical informatics,
medical check-ups, clinical trials, and food testing.
In medical informatics, we are expanding the functionsof the electronic patient chart products, Medical Station,
Qualis, and Qualis Cloud mentioned above, as well as theclinical testing system B-Liner. With regard to B-Liner,
laboratory personnel in clinical testing laboratories suchas ours have experience in using a variety of clinicaltesting systems. We are evaluating the needs that haveemerged from this experience from the perspective ofphysicians and are expanding the functions of the system.
Although we are still in the evaluation stage and have notyet decided on the commercialization of the system, we
believe that the in-house production of peripheral systems
for clinical laboratories alone will improve the efficiency ofclinical testing in various operational aspects.
In medical check-ups, the BML Group has the advantage of being able to meet the needs of large medical
check-up centers thanks to its comprehensive domestic
network of laboratories and collection and delivery
networks. In addition, we believe that we can further
enhance our competitiveness by promoting standardization activities including standardizing accuracy amonglaboratories going forward and improving our risk assessment testing related to preventive medicine.

In clinical trials, we have formed a strategic partnership with Labcorp to provide joint clinical trial services
for international clinical trials. Unlike domestic clinical
trials, international clinical trials are an area where we
can expect significant expansion, and strengthening thisservice will lead to solid growth.
In food testing, we aim to expand our business throughthe expansion of our comprehensive consulting for foodquality controls and the certification and accreditation
business.

Improvement of the internal environment
for sustainable growth
In accordance with our Policy of “Dedication to creatinga healthy and cultured society,” the BML Group provides
clinical testing and medical informatics businesses thatare indispensable for maintaining medical care andhealth. In this sense, it is no exaggeration to say that thesustainable growth of the BML Group is a social mission.
In order to achieve our Policy, creating a more comfortable working environment is our top priority. The mostimportant aspect of the services we provide is quality.
What is necessary for quality is the steady improvementof each employee’s technical skills. Therefore, we consider that the most important issue is to create an environment in which employees can maintain their ambition
to improve and continue to contribute to the Company.
For this reason, we are promoting the enhancement of

in-house training, diversity and inclusion (D&I), andhealth management.
To enhance internal training, we reviewed our training
system in the previous fiscal year. Specifically, we haveplanned three types of training: rank-based, selective,and voluntary, and we have devised ways to provide
training opportunities to all employees.
With regard to D&I, we strive to create a work environment where employees can work together while mutuallyrespecting and recognizing diversity by confronting
unconscious bias and fostering a corporate culture thatis compatible with the times. Specifically, since last year,
we have been sharing awareness of diversity by providing training for each layer of employees.
In the promotion of health management, we support
efforts to promote employees’ work-life balance in orderto maintain and improve their mental and physical healthand to encourage each employee to voluntarily maintainand improve his or her own health. As a result of these
efforts, we have been recognized by the Ministry of
Economy, Trade and Industry as a Certified Health &Productivity Management Outstanding Organization
since last fiscal year. Furthermore, we are currently
working toward the goal of also being recognized as aWhite 500 company under the Ministry’s Certified Health& Productivity Management Outstanding Organization
program in the next fiscal year.

BML REPORT 2022

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Growth Strategy for Value Creation

Long-term Vision

Medium-Term Management Plan

Group Vision

Eighth Medium-Term Management Plan (2021 - 2023)

To become the most trusted choice in the medical world

Foundation
improvement
for the enhancementof quality and service

Establishment of
No. 1 reputation
for quality and service

Becoming No. 1 in
the industry,both in reality and in
name

In our current Medium-Term Management Plan, we have

Furthermore, to strengthen our management base, we

set our Mission and our internal action policies to achieve

will restructure our training system for the development

this Mission as “CSS.” As a specific Basic Strategic

and utilization of human resources, and work to create a

Framework, we aim to expand our competitivenesssystem for the permanent development of the Company.

based on standardization and DX (digital transformation).

Basic strategic framework

Sixth Medium-Term Management Plan

Seventh Medium-Term Management Plan

Eighth Medium-Term Management Plan

Period for Solidifying Foundation

Period for Growth

Period for Leaping Forward

2015 - 20172018 - 20202021 - 2023

Summary of the Sixth Medium-Term
Management Plan

Summary of the Seventh Medium-Term
Management Plan

Outline of the Eighth Medium-Term Management
Plan (current Medium-Term Management Plan)

With the goal of “building andstrengthening the foundations
needed to be the top company inthe industry,” we worked onstrengthening sales infrastructure,
expanding testing infrastructure,and rebuilding system infrastructure. We also took various measures to enhance our humanresource base as the most important matter.

In order to establish a reputation as
the No. 1 in quality and service, wehave aimed to become the No. 1 in
the industry with four strategies:
No. 1 in regional services, No. 1 in
the test lineups, No. 1 in contribution to the medical community, andNo. 1 in quality.

We will promote DX* based onstandardization as the basic framework. Furthermore, we will promote
the pursuit of quality by utilizing DX
and standardization. In addition, to
expand our competitiveness, wehave set forth three measures:enhancing the laboratory network,
enhancing sales capabilities, andrenovating collection and delivery
processes.

StandardizationDX

Pursuing
quality

Testing
quality
Collection
and delivery
quality

Expanding competitiveness

Aim to improve competitiveness based on “Standardization” × “DX (Digital Transformation)”

Enhancing
the laboratory
network
Enhancing sales
capabilities

P.25

P.26

Renovating collection
and delivery
P.26
processes

Standardization of nationwide
laboratory testing process
Enhancing test items
Next-generation support
Expansion and deepening ofcustomer baseStrengthening of the
non-insurance field
Improvement of convenience/
reduction of workload
Pursuit of data quality– Improve customer experience + realize greater business efficiency –Strengthening the management base

Human resource development and utilization

P.26*Digital transformation

Measures for BCP

External business environment

23

Social environment

Trends in the medical and testing industry

The basic external business environment in Japan
includes a declining population, falling birthrate, aging
population, and increasing risk of various disasters. In
this environment, it is necessary to respond to various
social demands and changes in the environment, suchas addressing work style reforms, promoting diversity,
BCP measures, and the use of AI and big data throughaccelerated digitalization. In addition, although the endof the COVID-19 pandemic remains uncertain, the economy is expected to pick up going forward, due to thenormalization of socioeconomic activities and the effectsof various government policies, among other factors.

In the contract clinical testing industry, the market size
expanded rapidly due to an increase in COVID-19-related tests. On the other hand, contract prices are expected to remain weak in the future due to the impact of thegovernment’s healthcare policies, including healthcare
system reforms and revisions to reimbursement for
medical service fees, and the fact that the market ismature, making it prone to price competition. Looking
ahead in this environment, it will be necessary to respond to high-performance tests that contribute topersonalized medicine, such as companion diagnosis(CDx) based on cancer genomic analysis, as well as
online medical services. In addition, it is expected thatthe environment will demand the streamlining andstrengthening of the testing system in response to
COVID-19.

BML REPORT 2022

MissionCustomer

Satisfaction

Response to SDGs

Internal action policies

Customer satisfaction
Maximize customer satisfaction
by enhancing quality and service

Consensus of all employees

Consensus

Synergies

Synergy
SocialResponsibility

Aim for mutual developmentwith various companies

Soundness of all operations

Soundness

Social responsibility
Fulfill our responsibility to society
and the medical community
by providing stable testing functions

Promote business and operations
with a unified mindset among
employees

Sound management and soundbusiness execution(performance, finance, compliance)

Pursuit of standardization

Standardization

Promote standardizationthat supports high quality
and high efficiency

BML REPORT 202224

Growth Strategy for Value Creation

Medium-Term Management Plan
KPIs of the Eighth Medium-Term Management Plan

– Enhancing sales capabilities –Net sales: up to ¥145,000 million expected depending on trends in COVID-19 tests
Operating income ratio: 8.5% or higher, exceeding the average of 8.3% for the past five years through FY2019(Millions of yen)

FY2019FY2020

FY2021

FY2023

Net sales

120,732

138,571

186,067

135,000 to 145,000

Operatingincome9,763

19,936

48,88911,500 to 12,500

Operatingincome ratio

8.1%

14.4%

26.3%

More than 8.5%

We will focus on expanding and deepening our customer
base by promoting coordinated marketing activities
across the BML Group and deepening cooperation withlocal medical associations and other companies in theindustry, as well as marketing activities targeting hospitals and clinics.
In addition, as measures to strengthen our non-insurance fields, in the medical informatics field, we will
expand sales of cloud-based electronic patient charts(Qualis Cloud) and enhance the functions of our clinicaltesting system (B-Liner); in the preventive medicine field,
we will implement new activities by utilizing our nationwide network collection system and expand optional
items; and in the food testing field, we will expand ourcomprehensive consulting and certification and accreditation business for food quality management, thereby
enhancing our sales capabilities.

– Renovating collection and delivery processes –Expanding competitiveness– Enhancing the laboratory network –At the BML General Laboratory, we will solidify theconcept of the development of new tests and next-generation laboratories. Furthermore, we will develop new
test items, including the expansion of mass spectrometers and next-generation sequencers, the introduction of
new tests in the field of infectious diseases, and CDx
compliance. In addition, we will improve the quality of
our nationwide laboratories by standardizing testing
equipment and standard operating procedures andstandardizing testing processes in accordance with thescale of the laboratories.

Laboratory network
BML General Laboratory
7 laboratories

SapporoRegional laboratories

MoriokaStandardization of

Enhancingtesting processes

test items

Strengthening management base
– Human resource development and utilization –BML General
Laboratory

Fukui
Okayama Osaka
Fukuoka

One of the BML Group’s strengths is its nationwide
collection and delivery network. Although we visit customers and carefully collect specimens on a daily basis,
we aim to further increase customer convenience andreduce the workload of collection and delivery staff bypromoting DX.
In addition, we have been implementing temperature
controls to improve the reliability of reported data, andwe will ensure the accuracy of the data by promoting theinstilling of these operations.

NagoyaTo strengthen our management base, we have positioned the development and utilization of human resources as a priority issue, and will restructure our training
system to create a framework for the permanent development of the Company.
In addition, in implementing the three strategies ofenhancing the laboratory network, enhancing sales
capabilities, and renovating collection and delivery
processes, it will be essential to have our employees
demonstrate their abilities and motivation to the fullest. To
this end, we will promote work-life balance, and work tomaintain and improve the mental and physical health of
our employees and their families.
Page 43: Human resource development and utilization

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BML REPORT 2022

BML REPORT 2022

26

Growth Strategy for Value Creation

Medium-Term Management Plan
DX initiatives

Digital Reporting System (DRS)

We will promote DX with a focus on the utilization ofdigital technology and the establishment of a foundation
for DX promotion, aiming to improve customer experience and operational efficiency. Specifically, with respect
to the utilization of digital technology, we will provide newservices such as cloud-based electronic patient charts,
clinical testing systems, and DRS*, aiming to improve theefficiency of business processes for both customers andthe Company. In addition, to establish a foundation for

DX promotion, we will work on the development of digital
human resources, including the acquisition of new skills
and the improvement of IT knowledge for all employees.
Furthermore, to improve the system infrastructure, we will
migrate various systems to the cloud, build new networks, and optimize existing IT assets. Moreover, we will
establish a system that can promote DX by strengthening
IT governance, including BCP and cyber security measures.
*Digital Reporting System

Utilization of digital technologies

Tools to improve the efficiency of collection and delivery using IT technology
 he goal is not only to improve operational efficiency and convenience for medical institutions, but also to improveT
quality by preventing specimen mix-ups.

B-LabelAutomatic printing of blood sampling labels with patient names by container and material (Improved efficiency of blood
sampling operations, prevention of specimen mix-ups, and improved efficiency of specimen receipt confirmation)

B-Connect

Internet access to test requests and test result reports (Improved efficiency of test requests and faster reporting of test results)

B-Report

Internet access to inquiries on test results (Timely inquiry of test results)

Cloud-based electronic patient charts (Qualis Cloud)
Cloud-based electronic patient chart adopting the smart client method
B-Connect

 e have developed an electronic patient chart that can simultaneously take advantage of the low-risk andW
low-cost features of cloud-based electronic patient charts and the multi-functionality and linkage features ofon-premise electronic patient charts.

B-Label•Improved efficiency of blood
sampling operations and prevention of specimen mix-ups•Improved efficiency of specimen receipt confirmation•Improved efficiency of test requests

We plan to release features for control via browser in FY2022 to enable remote access.

DB fortest data

BML Digital
Reporting System

Shorter test result reporting time

B-Connect

B-Report

Testing processes

X-ray•Faster reporting oftest results•Timely inquiry oftest results

Linked to testing
equipment

Electrocardiogram

Online medical examinations

BML

Online medical care

TabletDoctors at home/outside of work

Patients at home

ClinicClinical testing system (B-Liner)
A system that links hospital systems, analytical systems and the like to streamline and improve the quality ofclinical examination department operations
 he system can be used in a wide range of settings from clinics to hospitals and laboratories. As a clinical testingTcompany, we are also enhancing the real-time availability of precision control information, information-sharing tools for
streamlining laboratories, prevention of unauthorized access through two-factor authentication, and analytical featuresthat expedite reporting of results, among other benefits, in response to comments by technicians.

Establishing a foundation for DX promotion
Developing digital human resources

Developing system infrastructure

Strengthening of IT governanceD evelopment of digital human resources

Rebuilding system infrastructureDissemination of information by· Acquiring new skills· Migration to the cloud

management· Improving knowledge of all employees· Adoption of new networks

BCPE stablishing a DX planning and promotion system

Optimization of existing IT assets

Cyber security

External evaluation
Certified as a DX Certified Business Operator

Other hospital internal systems

Electronic patient
chart systems
Medical examination
systems

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BML REPORT 2022

Medical administration
systemB-Liner

Specimen
pretreatment system
Analytical systems

Blood tube
preparation systems

BML REPORT 2022

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Growth Strategy for Value Creation

Response to COVID-19
Voices from the field

Initiatives of the BML Group
The BML Group is making a concerted effort to support
COVID-19 tests. We were among the first to begin accepting orders for PCR testing at the BML General
Laboratory and nine other laboratories nationwide, by
utilizing technology that was already being used in thefield of highly specialized testing. We have also commenced contracts for mutated strain screening tests andgenomic analysis, and are working to establish a testing
system that will contribute to the medical community.

Three factors that contributed to the early nationwide expansion of the testing system
The BML General Laboratory was able to prove that it is possible to control secondary infection among laboratory personnel
Laboratories based on the regional laboratory concept had already been deployed throughout the country

Hiroki Otsuka, Chief of Genomic Testing Section
Over the past two years, there have been significant changes in the testing environment,
testing methods, and test items in response to the increase in the number of infectedpatients, diversification of testing needs, and the emergence of various variant strains.
In response to the increase in the number of specimens, testing methods have shiftedto those with higher processing capacity, and we expanded support for administrative
testing and pooled method testing, as well as screening tests and genomic analysis for
new variant strains. I feel that being involved in real-time testing for an emerging infectious disease that has a significant impact on society has been an extremely valuable
experience for preparing for and responding to new infectious diseases that may occur
in the future.

The procurement of depleted supplies such as gloves and testing materials was successful through the wisdom and efforts of employees
Reiko Yasuda, Genomic Testing Section

Achievements in activity against COVID-19
February 2020

October 2021
Expanded PCR testing capacity: 46,810 tests per day
Commenced contracted PCR pool method tests

Commenced contracted PCR testing
June 2020

November 2021
Commenced contracted genomic analysis

Commenced accepting orders for CLIA (chemiluminescence immunoassay) antibody tests
September 2020

The Genomic Testing Section’s first nighttime testing operation was launched for
COVID-19 testing. Amid the rapid increase in the number of specimens in the 5th and6th waves, we received support for testing from managers as well as from each department of the BML General Laboratory and group companies. I was in charge of nighttime
testing site management, and I feel that we were able to overcome issues thanks to themany inputs I received from the testing staff and supporters. I learned so much about
how to proceed with nighttime tests and how to communicate with other departments. I
will continue striving to earn the trust of medical institutions, going forward.

Akira Fukai, Genomic Testing Section

Expanded PCR testing capacity: 8,300 tests per day

The rapid spread of COVID-19 around the world since 2019, as well as the similar
spread in Japan, has made it essential to establish a stable testing system. As thenumber of tests increased drastically along with the increase in the number of infectedpatients, we have conducted simulations in conjunction with the expansion of the number of tests accepted, due to the necessity to conduct efficient tests. We will continue to
conduct tests in a flexible manner, going forward.

Responded to changes
in the testing businessenvironment

January 2021
E xpanded PCR testing capacity:
20,900 tests per day
Sapporo3,000

March 2021
 ommenced contracted screening tests forCvariant strains (N501Y mutation)

Flexible response

April 2021
Expanded PCR testing capacity: 33,160 tests per day

Morioka360

June 2021
Commenced contracted screening tests forvariant strains (L452R mutation)

GeneralLaboratory
33,600
Fukui
600

Okayama Osaka
2,000
2,000
Fukuoka
2,500

The BML Group provides three types of testing: PCR
tests, mutation screening tests, and genomic analysis.
Going forward, these three tests will be necessary when ahighly infectious variant strain such as Omicron or avariant strain that is feared to cause serious illness

Nagoya2,000

emerges. In such cases, the BML Group is able to respond more rapidly than any other company, as we
conduct all tests within the Group. In this manner, the BMLGroup will continue to develop new services in a flexible
manner while responding to changing circumstances.

Contributions through donations

Yokohama
600

Okinawa
150

In March 2021, the BML Group made a donation to theJapan Medical Association and the Japanese Nursing
Association so that medical professionals who are making efforts to respond to COVID-19 could engage inmedical care with peace of mind. The BML Group willcontinue its efforts to provide services to enhance themedical system.

Donation recipientsJapan Medical Association:

¥500 million

Japanese Nursing Association:¥500 million

BML Group testing capacity per day

29

BML REPORT 2022

BML REPORT 202230

Growth Strategy for Value Creation

Message from the Financial Officer
To this end, the development of a DRS (digital reporting system), which the BML Group is currently promoting, will be an important strategy to differentiate ourbusiness in the future. The DRS is a series of services
that consists of the following steps: medical institutions
submit test orders via the internet, automatically printed
barcode labels with patient names and test request
information are placed on specimens at medical institutions, the BML Group receives the specimens and performs the tests, and test results are transmitted via theinternet and viewed on the web. The BML Group’s
strength lies in the in-house development of this systemand the know-how of its employees to understand andoperate it. We hope to gain a competitive advantage inthis area and enhance our corporate value.
The Eighth Medium-Term Management Plan announced in May 2021 clearly states the promotion of DX.
In addition to DRS, we will combine our own cloud-based
electronic patient chart system Qualis Cloud and clinicaltesting system B-Liner as DX promotion tools for the BMLGroup, to improve the service for medical institutions andreduce the workload of the BML Group. We also plan tocontinue proactive investments in these systems.

Medium-Term Management
Plan aiming for long-term,
stable growth
Also strengthening noninsurance fields

Business performance during the COVID-19
pandemic, which saw a large upward swing

Norihisa Takebe,
Director and Senior Executive Officer

Operational know-how to enhance
corporate value
The BML Group’s main business, the clinical testing business, is now a part of Japan’s medical infrastructure, withmany medical institutions nationwide contracting us toperform a large number of tests on a daily basis. The key
to safely receiving specimens and returning accurate
data in time is to have stable logistics and reporting
systems, not to mention test accuracy. We recognize that
how we secure this system is important in the clinicaltesting business. Therefore, with the aim of business
differentiation, we intend to focus on specimen collection
capacity and maintaining the robustness of the system,in addition to testing capacity. For example, one of ourforms of know-how is to ensure thorough temperature

31

BML REPORT 2022

controls of specimens by distinguishing between room
temperature, refrigerated, and frozen specimens. It is not
simply having efficient specimen collection and delivery
but also ensuring that specimens are collected without
mistakes and delivered to the laboratory at the appropriate temperature for each specimen, which will lead to
improved test quality.
If accurate collection and delivery is the entry point in
BML Group’s business, the exit point is the timely returnof accurate test data. Because most of the tests arecontrolled by the system, converted into data, andreported to medical institutions, the clinical testing
business can be viewed as an information industry. We
believe that we can enhance our corporate value by
improving the level of these entry and exit points.

Although the BML Group’s mainstay clinical testing
business has been growing by increasing the number oftests through systemization and cost reductions, market
growth is expected to become more difficult in the futureas the birthrate declines and the population ages. In
addition, because the prices of most tests are determined by medical insurance points, we consider itdifficult to significantly increase profits by continuing withconventional approaches.
On the other hand, we need to clearly explain that thisis a business that can grow steadily over the long term
as it is part of the medical care system and is therefore
less susceptible to economic fluctuations.
The BML Group should grow steadily and stably rather
than hoping for rapid business performance improvement, with our awareness that we are responsible forhealthcare infrastructure.
Nevertheless, our business performance for FY2020
and FY2021 was significantly higher in the face of the
COVID-19 pandemic.
Net sales for FY2020 were ¥138.5 billion, an increaseof 14.8% year on year, and operating income was ¥19.9
billion, more than double the previous year’s level. Net
sales for FY2021 were ¥186.0 billion, an increase of
34.3% year on year, which exceeded the initial forecastby ¥43.7 billion. Operating income was ¥48.8 billion,
more than 2.4 times higher than the previous fiscal year.
Excluding the effect of COVID-19-related tests, net sales

were ¥126.6 billion, an increase of approximately ¥6.0
billion from the FY2019 results, which were before the
COVID-19 pandemic, resulting in a higher level of growthcompared to previous years.
Although the Eighth Medium-Term Management Plan,
with FY2021 as its first year, was formulated without
assuming the impact of the fifth and sixth waves ofinfections, the first-year results were in line with theoriginal plan, excluding the effects of COVID-19-related
tests.

Medium-Term Management Plan with anoperating income ratio of 8.5% or higher
As the current Medium-Term Management Plan started in
FY2021, we should normally compare figures based on
FY2020 results. However, results for the said year increased significantly due to COVID-19-related tests, andwe have used FY2019 results, which were before the
COVID-19 pandemic, as the basis for comparison.
Although it is difficult to foresee the end of the COVID-19
pandemic, we have formulated our Medium-Term Management Plan with an eye to the extent we can expand
our net sales and profits, not taking into account
COVID-19-related tests, compared to levels before the
COVID-19 pandemic.
The net sales target for FY2023, the final year of theplan, is set at a maximum of ¥145.0 billion, depending on
the status of COVID-19 infections, and ¥135.0 billion if
the COVID-19 pandemic is contained. Even if
COVID-19-related tests were to cease, we aim to increase net sales by approximately 12% compared to the¥120.7 billion in FY2019.
For operating income, we aim for ¥11.5 to ¥12.5 billion.
We have set the operating income ratio target at 8.5% orhigher.
The reason we have placed the operating income ratio
as a target value is that we have utilized it as a target
value up to FY2019, and we intend to continue utilizing
the operating income ratio as a basis for comparisons
after the COVID-19 pandemic. We understand that the
8.5% figure is a bold target, given that the operating
income ratio was around 8.3% prior to FY2019. In any
case, our first priority is to unify the awareness of profitability within the Company by making comparisons using
the same indicators we used before the COVID-19
pandemic.

Ensuring profitability through appropriate
cost allocation
The acquisition of new customers continues to be our top
priority to achieve our net sales target. Although it will
depend on the demographics of each region in the

BML REPORT 202232

Growth Strategy for Value Creation

Message from the Financial Officer
future, we believe there is still room for business expansion based on the BML Group’s projected market sharein each region. We will also focus on increasing businesswith medical institutions with which we have established
new business through PCR testing. For these efforts, wewill flexibly deploy sales and testing personnel as well as
equipment and facilities in response to the market. In
addition, as mentioned earlier, we will continue to invest
in an efficient collection and delivery system to further
strengthen our nationwide network.
We recognize that the development of human resources for the next generation is one of the most importantmanagement issues. We hired 160 new graduates thisfiscal year, and we intend to increase the number of
personnel who will lead the next generation by hiring astable number of employees every year, including
mid-career recruits. In addition, we have reviewed ourtraining system since the previous fiscal year, and wehave prepared various types of training, such as rankbased, selective, and voluntary training, for each job
category to improve the level of our employees. We
intend to invest more than before in terms of both thequality and quantity of the human resources that support
all of our operations.
On the other hand, we are closely monitoring theincreases in various expenses, test costs, and profitability. Although the BML Group has greatly improved its
business performance due to the effect of the COVID-19
pandemic, we should remain cost conscious. Our purchasing departments carefully negotiate prices with
suppliers to ensure appropriate procurement while our
testing and accounting departments monitor the profitability of each test based on cost calculations. The
results are shared with the sales departments and reflected in the pricing policy. The sales departments makedecisions on individual projects from the standpoint of
profitability and do not casually engage in price competitions with the sole purpose of increasing sales in theimmediate future. The operating income ratio is set as
the most important indicator to share the results of these
activities internally.

Strengthening the medical check-up andclinical trial fields
While the clinical testing business described above isthe pillar of our operations, we intend to strengthen ourbusiness in non-insurance fields going forward.
The first is in the field of medical check-ups. In Japan’s
aging society, there is a growing interest in the maintenance and promotion of good health. This trend can also
be seen in the health measures taken by local communities and companies, which are focusing on daily healthmanagement for early detection and early treatment ofdiseases. In this field, medical check-ups for residents

33

BML REPORT 2022

and companies are required to be conducted nationwide
or over a wide area, and speedy reporting of results,
including those for high-spec physical examinations, isalso required. The BML Group’s nationwide network of 81
laboratories, 116 collection and delivery locations, and acollection and delivery system consisting of approximately 2,300 staff can provide assistance in this area. In
addition to outsourcing testing, we can also utilize ourabundant experience in clinical in-hospital examinations
to support testing at medical checkup facilities.
The second is clinical trials, which have been the focus
of attention in the development of vaccines and therapeutic drugs during the COVID-19 pandemic. In accordance with a partnership agreement with Labcorp (U.S.),
we are providing joint clinical trial services for international clinical trials. In addition to clinical trials in Japan,
we expect significant growth by playing a role in international clinical trials, which are growing rapidly. In this field
as well, our strength lies in our nationwide collection anddelivery network in addition to the testing capabilities of
the BML General Laboratory.
Based on our extensive track record in clinical testing,
we intend to support a wide range of services in medicalcare, including preventive medicine such as healthcheckups and physical examinations, as well as support
for developing new drugs through clinical trials by drug
manufacturers.

Released the cloud-based electronic
patient chart in April
The third is the electronic patient chart system for clinics,
which is the pillar of our medical informatics business.
Expanding sales of electronic patient charts is expected
to generate synergies with the clinical testing business.
We aim to grow both businesses through a businesscycle in which the use of electronic patient charts leads
to the clinical testing business which in turn is linked to
the DRS described above to improve efficiency.
We have been providing two on-premise electronic
patient chart system products Medical Station (MS) andQualis. In April this year, we launched the new cloudbased electronic patient chart system Qualis Cloud,which fully maintains the operability and functionality ofthe existing Qualis system. It is the first electronic patient
chart in the industry to adopt the smart client method,which has the advantage of the on-premise type of
integration with in-hospital medical equipment, while also
taking advantage of the cloud-type system and its data
integrity and low cost. We project that the penetration
rate of electronic patient charts in clinics nationwide isabout 30 to 40%. We expect that the BML Group’s cloudbased electronic patient chart, which has features unmatched by other companies, will be highly evaluated bymany clinics from both functional and cost perspectives.

Food testing with synergies in testingknow-how
The fourth is the food hygiene business. With the ever-increasing focus on food safety and security, we expect
continued and significant growth in this business.
Sales in this business consist mainly of the testing
business and the consulting business.
In particular, the technologies in food microbiology andintestinal bacteria testing in the testing business can be
mutually shared with those cultivated in clinical testing,and there are synergies on a Group-wide basis. Particularly in the intestinal bacteria testing business, we havebeen conducting PCR testing and pooled testing forsome time, and these tests are one step ahead of thosein the clinical testing business. We plan to invest in new
testing facilities going forward to expand our business byleveraging the strength of our testing capabilities.
Meanwhile, we are receiving requests from food-related companies for comprehensive consulting services for
quality control, including factory audits, store inspections, and the acquisition of various certifications related
to food safety. For this reason, we will also focus on
training consultants with abundant expertise.

Valuing communication with shareholders
In February this year, we announced the construction ofa new wing at the BML General Laboratory. The purposeof this new wing is to provide business continuity planning (BCP) measures against natural disasters, such as
climate change and earthquakes; to take environmental
measures, which are the most important social issue inrecent years; and to secure testing capacity that will

support future growth. We have announced our BCP andenvironmental measures as the first phase and will
formulate an appropriate capacity expansion plan for the
next ten years, for which we will make another announcement along with the earnings forecast.
We recognize shareholder returns as the most important management priority. In the fiscal year ended March
31, 2022, we increased dividends through two sharebuybacks and a special dividend, reflecting our businessperformance during the COVID-19 pandemic. The BMLGroup’s policy is to maintain stable shareholder returns
in order to meet the expectations of its long-term shareholders. Therefore, we have decided to return profits toshareholders for the fiscal year ended March 31, 2022,
through a combination of share buybacks with dividend
payments instead of exclusively utilizing dividends.
Looking ahead, based on the assumption that the
COVID-19 pandemic will be contained and businessperformance will return to stable growth, we plan toincrease the full-year ordinary dividend by ¥10 to ¥80 for
the current fiscal year.
Although we have not been able to provide information
face-to-face with our shareholders due to the COVID-19
pandemic, we will continue to create opportunities for
direct dialogue through various briefings and individual
meetings and will place importance on communication
with our shareholders.
Although the general public rarely comes into contact
with the business of the BML Group, PCR testing during
the COVID-19 pandemic has led to wider recognition. As
I mentioned at the beginning, I believe it is important tocommunicate to our shareholders the stable businessmodel and social significance of the BML Group, which
underpins Japan’s medical care.

BML REPORT 2022

34

BML’s Sustainability

Sustainability Management
In accordance with our Policy, basic sustainability policy, environmental policy, and compliance manual, we, the BMLGroup, will respect dialogue with all stakeholders, including customers, business partners, shareholders and investors,
employees, and local communities, and will play an active role in building a sustainable society and strive to enhance
our corporate value.

Basic Sustainability Policy
1. Contribution to society

3. Respect for human rights

BML is committed to improving medical services andhealth through the latest technologies, systems, andservice networks based on our extensive clinicallaboratory experience.
2. Addressing environmental issues

We respect the human rights of all people affected byour business activities. We will also promote diversity
and inclusion, and strive to foster a corporate culture
in which employees can work safely and comfortably.

Stakeholder engagement
In order to achieve sustainable growth and enhance
corporate value over the medium to long term, the BMLGroup strives to maintain positive and smooth relationships with not only shareholders but also customers,
business partners, employees, and various other stakeholders, while taking their interests into consideration.
We hold financial results presentations for securities
analysts and institutional investors (twice a year),participate in conferences sponsored by securities firms,
and hold individual interviews and send reports to shareholders (twice a year) to promote understanding of theCompany, including business strategies and company
introductions. In addition, we will continue to provide
social value to our customers by holding laboratory
forums and participating in various academic conferences.

4. Establishment of trust from society

We will work to protect the global environment in all
stages of our business activities and provide testing
services related to the environment and health, inorder to realize a sustainable society that cares forpeople and the earth.

We will achieve management that earns a high level oftrust from society by conducting sincere and faircorporate activities, including compliance with laws
and regulations, fair and free competition, and appropriate information disclosure.

Website	Sponsoring andSales activities

	Opinion-exchange

Various events andmeetings

lecturesevents and seminars

General Laboratory

Sustainability promotion system

General Laboratory	Briefing sessions for local
residents on construction

Laboratory forums

The BML Group has established a Sustainability Committee chaired by the Representative Director and Vice
President. The Committee aims to promote sustainabilityof the entire BML Group, and discusses and decides on
the approach and plans for sustainability. The Committee
meets quarterly to regularly discuss the approach andevaluate activities, and works on improving the system
and updating the implementation plan as necessary. The
Committee members consist of officers and generalmanagers of the relevant divisions, and the General
Affairs Department serves as the secretariat.

events	Accepting visitors to BML	Joint holding of

Accepting visitors to BML

participating in local

projects
Providing workplace

Board of Directors
Recommend/report

Consult

Sustainability Committee

exchange meetings

Committee chairperson: Representative Director and Vice President
Committee members: Officers in charge of relevant departments

Training sessions

Secretariat (General Affairs Department)
ReportInstruct

experience	Policy briefings and opinion-

Customers	Opening corporate

NPO / NGO

daycare centers to theParticipating in exhibitions
Visiting business partners
	Accepting visitors to BML

Business partners

BML

publicLocal communities

General Laboratory

Each department

	Open innovation(joint research)	IR website

SDGs initiatives

	Financial results

The BML Group will promote various initiatives for the development and growth of a sustainable society under theGroup Vision of “Becoming the most trusted choice inthe medical world.”

The BML Group’s initiatives to contribute to the SDGs
The Group’s main business areas[Clinical testing][Environmental testing]	Supporting medical education
foundations
	Holding laboratory forums
	Rollout of DRS
	Internalizing outsourced
operations

35

BML REPORT 2022

[Food testing]	Spreading cloud-based
electronic patient charts	Rollout of B-Liner	Opening daycare centers to
the public	Measures to enhance theresilience of the BML General
Laboratory
	Installation of solar power
generation systems
	Strengthening alliances (laboperations and systemdevelopment)

Shareholders
and investors

Academic organizations /research institutions

presentations (twice ayear)	Briefing sessions for

Employees Government / local governments/ industry organization	Sponsoring and participating inanalysts (twice a year)

Intranet

	General Meeting of	In-house newsletter

regional events

Shareholders	Human resources	Accepting visitors to BML General	Issuing reports totraining

Laboratory

shareholders

	Employee interviews	Briefing sessions for local residents	Issuing integrated	Whistleblower systemon construction projects

reports	Exchange events	Small meetings for	Labor-management

investors and analysts

consultations

	Company
presentations forindividual investors

BML REPORT 2022

36

BML’s Sustainability

Environment
Message from the Sustainability Committee Chairperson

Environmental initiatives
The BML Group is working to reduce its environmental impact in accordance with the BML Group Environmental Policy.
We recognize that reducing our environmental impact and preserving biodiversity to solve environmental issues areimportant management issues. We will work to reduce GHG emissions by installing solar power generation equipment
and adopting energy-efficient, high-efficiency heat source equipment for air-conditioning systems in the new wing to becompleted in August 2024.

Environmental initiatives as ourstarting point

BML Group Environmental Policy

BML General Laboratory’s newBasic philosophy
A global environment rich in natural beauty is essential to a full, healthy life. In line with our corporate Policyof “dedication to creating a healthy and cultured society,” we have been supporting public health throughclinical testing, environmental analysis, and food hygiene businesses. In the future, we will continue tofoster a keen awareness of the importance of the environment, which is the prerequisite for a healthy life,
and we will make a more active contribution to the preservation of public health and the global environment.

building with BCP in mind
Nobuki Arai,
Representative Director and Vice President

37

Thorough disposal of infectious substances andother items

Environmental measures for laboratories, logistics,
and plastic containers

For the BML Group, which has the Policy of “Dedication
to creating a healthy and cultured society,” environmental
initiatives are the starting point for maintaining andimproving people’s health. As part of the efforts, the BMLGroup’s central laboratory, BML General Laboratory, hasbeen ISO14001 certified since 2001.
The BML Group is working to reduce the consumptionof electricity and city gas as individual environmental
measures in accordance with its environmental management system. Another important aspect is the focus on
preventing contamination and emissions of infectious
substances, organic solvents, and poisonous substances, which the nature of our business forces us to handle,
while also reducing waste. Some of our departments useorganic solvent reclamation equipment to extract organic
solvents from liquid waste and reuse them. In addition,
we thoroughly ensure that infectious substances aretreated in the BML General Laboratory to eliminate theirinfectivity before disposal.
Another important pillar of our environmental management system is compliance with laws, regulations, andindustry codes. Looking ahead, environmental laws andregulations are expected to be revised quite drastically.
We will continue to respond to such changes by gathering information in real-time.

Environmental measures for electricity and water used inlaboratories are among the most important issues. In
particular, inspection equipment emits a considerable
amount of heat, and if the room temperature rises as aresult, problems arise in the operation of inspection
equipment. For this reason, air-conditioning measuresare extremely important, and increased electricity consumption has been an issue. Therefore, we have beenworking on the renovation of the air-conditioning system
and reviewing all piping since 2020. This is expected toultimately reduce CO2 emissions by approximately 1,200
tons per year.
In addition, the laboratory requires a large amount ofwater for testing equipment and other purposes anduses groundwater as part of its water resources. However, if we use groundwater without limits, we run the risk of
causing land subsidence. For this reason, we are working with the local government to determine the amount ofwater to be used each year.
Environmental measures in logistics departments arealso essential. The entire Group constantly operates
approximately 3,000 vehicles to receive specimens frommedical institutions and transport them to the laboratory.
Going forward, we will seek to contribute to the reductionof CO2 emissions by switching from gasoline-powered
vehicles to EVs.
We will also work on recycling initiatives in order toreduce waste from plastic containers used for testing,such as specimen and reagent containers. Furthermore,
we are considering the use of containers made of biomass materials derived from living organisms in collaboration with container and reagent manufacturers.

BML REPORT 2022

Action guidelines
1. Helping prevent global warming by conserving energy and resources.
2. We are working to prevent pollution, reduce waste, and recycle waste products.
3. We continuously consider the environment and resources in our products and services.
4. We set environment objectives and goals for preserving the environment.
5. We respect and comply with laws, regulations, and industrial standards related to environment
preservation.
6. We work to enhance environmental awareness among employees by promoting education about theenvironment.
7. We make our environmental policies known to all BML Group employees and to the general public.

BML REPORT 2022

38

BML’s Sustainability

Environment
Roadmap

Construction of a new wing at the BML General Laboratory

Phase 1: BCP/environmental measures and expansion of testing space by constructing a new wing
Phase 2: Improve inspection processing capacity and efficiency to accommodate future business expansion

New wing: Reduction of approximately 480 tons of CO2 and 1,060,000 kw/h of electricity per year2022

In August 2024, a new wing consisting of two buildings
with a total floor area of 20,000 m2 will be completed in
the vicinity of the BML General Laboratory.
The purpose of constructing the new wing is partly to
expand testing functions. However, BCP measures arealso an important part of the project. The Iruma Riverflows near the BML General Laboratory. The 2019 typhoon caused extensive flood damage in Kawagoe Citydue to a tributary of the Iruma River overflowing. Although the BML General Laboratory did not suffer direct
damage, it is at risk of being inundated with up to threemeters of water, according to hazard maps. While themain testing equipment is located on the first floor of thecurrent building, the construction of the new wing will
enable all testing equipment to be installed on the second floor or above.
In consideration of environmental measures, solar panels will be installed mainly on the south wall. Furthermore,an air-conditioning system with a high-efficiency heatsource will be adopted. It has been estimated that thesolar panels and the high-efficiency heat source air-conditioning system together will reduce CO2 emissions byapproximately 470 tons per year. The combined

2023

2024

2025

2026

reduction in electricity from solar power generation andhigh-efficiency heat source air-conditioning will result inan annual electricity reduction of 1,060,000 kw/h. This isequivalent to 9% of the annual electricity consumption of
the new wing.

May 2022: Start of design

January 2023: Start of construction

August 2024: Completion of construction

Phase 2
Formulation of plans
Construction

Laboratory relocation and expansion

Installation of solar power generation equipment
Installation of power generation panels on the entire south wall of
the new wing to utilize natural energy[Annual]Reduction of CO2
emissions by
478 t-CO2/year

Improved efficiency of air-conditioning
equipment
Improvement of energy efficiency withhigh-efficiency heat source equipment

BCP

Conceptual drawing of the new wing

Flooding countermeasures : Relocation of inspection functions of the entire BML
General Laboratory to the second floor or above

Building A and B
Cubicle/water receiving tank

Environment

Consideration for reducing
environmental impact

BCP

Respond to increasingly severe
disasters

GenomeSeparating analysis

Efficiency

Improve processing capacity andefficiency

General

Cellular organisms
RoutineBacteria

General

Waterproof
manholeGL + 2.5m

Iruma River

Reinforced concrete walls (with watertight doors)
Pure water storage tank

Oil tank

Genome Genome
Cellular organisms
Cellular organisms
GenomeCellular organisms

Bacteria

RoutineRoutine(International clinical trials)

New wing (Building A)

New wing (Building B)

Separating
analysis analysis
Separating
Separating
analysisorganisms
Cellular organisms
CellularCellularorganisms
Genome Genome
GenomeSeparating analysis
Separating
GeneralanalysisRoutine
GeneralRoutineRoutineBacteria Bacteria
Separating analysis
GeneralBacteria
GeneralGeneral General RoutineRoutine
CB laboratory
CB laboratory
CB laboratory
RoutineRoutine

GenomeRoutineExisting wing

After construction of the new wing

New wing (Building A)

Ensure scalability as businessexpands

Seismic
isolation joint

Outdoor wastewater treatment facility

Each laboratory in the existing wing will be relocated after the construction of
the new wing
The total floor area of BML General Laboratory
will be 185%, and each
Separating analysis
laboratory will be expanded
Cellular organisms
CB laboratory

CB laboratory

Expansion

Machine room, etc.

Expansion

Current

Sustainability
Building a foundation for sustainable growtheven after ten years

Emergency power
generation equipment

Column capital base isolation

Disaster countermeasures : Backup power and water supply	Emergency power generation system (72-hour power
supply for new wing)	Clean and pure water tanks(Ensure 2 to 3 days of supply for the entire BML
General Laboratory)

Concept

New wing (Building B)

Conceptualize next-generation laboratory

Environment

Earthquake countermeasures : New wing (buildings A and B) is constructed with baseisolation system: Existing buildings are earthquake-resistant and seismic
isolators for inspection equipment are installed

BML General Laboratory (existing wing)

2027

Phase 1

RoutineBacteriaBacteria Bacteria
RoutineRoutine

CB laboratory
CB laboratory
CB laboratory(International(International
clinical trials) clinical trials)(International
clinical trials)

RoutineRoutineNo laboratories will be located on the first floor

Efficiency

Under consideration (to be announced at the time of the detailed explanation of Phase 2)
39

BML REPORT 2022

BML REPORT 2022

40

BML’s Sustainability

Environment
Estimate of business impact in 2050

Information disclosure based on TCFD recommendations

On the basis of external information, the BML Groupoutlined major climate change risks and opportunities inJapan, where the Group engages in its clinical testing
business, and collected future projection data for eachrisk and opportunity. In accordance with the data, wehave examined the risks and opportunities associatedwith the transition to a decarbonized society and thephysical risks and opportunities arising from climatechange, and have identified key risks and opportunities
that could impact our business by 2050.
For example, under a hypothetical scenario in which
extreme weather events become more severe, we have

Submit thebasic policy and
key issues

Sustainability
Committee	Determine a basic policy and
key issues related to climatechange response	Oversee climate change
response

Key risks andopportunities identified

Supervise	Discuss and formulate thebasic policy on climate change
response	Discuss key issues related toclimate change

Strategy
the year 2050 as a timeframe to analyze the impact. In
our first year of analysis, the scenario analysis covers theclinical testing business, which accounts for more than
90% of net sales.

4°C scenario (equivalent to RCP 8.5)
If global warming countermeasures beyond the current level are not taken,
the temperature will rise 3.2°C to 5.4°C compared to the levels during theIndustrial Revolution by the end of this century

2°C scenario (equivalent to RCP 2.6)
If strict measures are taken, the temperature will rise 0.9°C to 2.3°C
compared to the level of the Industrial Revolution by the end of this century

Analysis process

41

Carbontax

Potential
timeframes for
emergence

Potential impact
2°C scenario[Risks] 	In the case where a carbon tax is
imposed, the cost will increase by up
to ¥100 million per year (assuming a
Mediumcarbon price of $160/tCO2 in 2050).
term [Opportunities] 	Increased sales opportunities
due to implementation of
low-carbon inspection
processes(Impact is assumed to be insignificant)	No significant financial impact, but adapt to a
decarbonized society and turn it into an opportunity[Opportunities] 	Decreased costs due tolower electricity retail unit
prices	Cost increase in 2°C scenario is within absorbablerange and impact is low, but we will continue toimprove energy efficiency
	Strengthen self-charging capacity by installing solar panels[Risks] 	Introduction of renewable energy facilities [Risks] 	Increased costs due to a certain	Increased costs due to green power
level of renewable energy (minorpurchases and other measurescompared to the 2°C scenario)

	Consider all options for fossil fuel phase-out (includinggas)Electricity Medium [Risks] 	Increased costs due to higher
expenses termelectricity retail unit prices
Renewable energy Shortprocurement costs term

Examples of possible response measures

4°C scenario[Risks] 	Increased costs due to taxation on plastics
Medium [Opportunities] 	Expand sales opportunities(Assuming no plastic tax is applied)
through the introduction oftermbiomass-derived containers, etc.
Spread of[Risks] 	Cost increase of approximately ¥400 [Risks] Cost increase of approximately
Cost ofMediumlow-carbon,
million per year due to conversion of¥200 million per year due toswitchingnext-generationtransportation vehicles to EVs andconversion of some vehicles toterm
to EVstechnologies
introduction of recharging facilities
EVs	Consider all options, including the use of non-plastic
products

Plastictax

Air-conditioning Longload in summer term

[Risks] 	Increased temperature control
costs during transportation andstorage of specimens (minor
compared to the 4°C scenario)

	Utilize public subsidies to replace collection anddelivery vehicles
	Costs are within the absorbable range and impact is low,
but we will continue to strive to improve energy efficiency
	Work on reducing load by installing high-efficiency
heat source equipment and facilities.

[Risks] 	Increased temperature control
costs during transportation andstorage of specimens[Risks] 	A certain level of refraining from medical[Risks] 	Decrease in flow of people and increased refraining
Demand for
examinations (minor compared to the 4°C scenario)
from medical examinations due to rising temperatures
testing for Medium[Opportunities] 	Expansion of certain sales[Opportunities] 	Expansion of sales opportunities due to theinfectious
term
opportunities (minor compared
increase in the number of patients with somediseasesto the 4°C scenario)
infectious diseases and the demand for new tests

	Strengthen response to the infectious disease market
in association with rising temperatures

Lightning

Long
term

[Risks] 	Impact of slowdown of power,
logistics, and other infrastructure
due to lightning (minor comparedto the 2°C scenario)

	Continue to consider strengthening the resilience ofsites and optimization from a BCP perspective	Increase measures to prepare for emergencies andstrengthen resilienceFlooddamage[Risks] 	Loss of some sales opportunities[Risks] 	Loss of sales opportunities due to delays in specimen
due to wind and water damage
delivery caused by wind and flood disasters
	Loss of income (approximately ¥700 million) 		
	Loss of income (approximately ¥1,200 million)due
todamagetoequipment
andsuspension
due to damage to equipment and suspensionLongof inspection lines, due to flooding in test labsof inspection lines, due to flooding in test labs
term [Opportunities] 	Improvement of market competitiveness by [Opportunities] 	Improvement of market competitiveness bystrengthening BCP for collection, delivery,
strengthening BCP for collection, delivery,
and transportation functions, laboratory
and transportation functions, laboratory
functions, etc.
functions, etc.

	Continue to consider strengthening the resilience ofsites and optimization from a BCP perspective[Risks] 	Impact of slowdown of power,
logistics, and other infrastructure
due to lightning

Insurance Short [Risks] 	Increase in fire insurance
premiums in line with the risk ofpremiums term
damage to sites[Risks] 	Increase in fire insurance
premiums in line with the risk ofdamage to sites

	Costs are within absorbable range and impact is low

Indicators and targets

Identification of key risks and opportunities

Gather future projection data

Estimates of impact on business

Consider countermeasures	Gather information on climate changerisks and opportunities related tohealthcare and clinical testing	Identify transition and physical risks andopportunities that may occur in the Company
	Assess the significance of risks andopportunities from the perspective of its
impact on the Company’s business	Gather external forecast
data with a high degree of
reliability regarding the key
risks and opportunities
identified
	Project the future in 2050
under 2°C/4°C scenarios	Estimate the financial
impact on business foreach scenario caused by
the highly significant risks
and opportunities using
the forecast data gathered
and the Company’s own
figures	Consider measures to
respond to climate changerisks and opportunities
that have particularly large
business impacts
	Establish an
implementation system, as
necessary

BML REPORT 2022

Physical risks and opportunities

The 2°C and 4°C scenarios were selected in reference tothe climate change scenarios published by the IEA(International Energy Agency). Recognizing that the
impact of climate change is likely to become apparent
over a medium-to-long-term period, we have selected

Carbon prices, national carbon emission targets
and policies

Board of Directors

Transition risks and opportunities

In June 2022, we established a Sustainability Committee
chaired by the Representative Director and Vice President. The Committee recognizes that addressing climatechange is a high priority issue and will conduct a climatechange scenario analysis (risks and opportunities). The
Committee also identifies those risks that have a particularly large impact on management in terms of financial
impact and the likelihood of occurrence as critical risks.
In addition, the Committee will discuss risks and opportunities related to climate change, as well as our targets
and progress, and report to the Board of Directors on aquarterly basis.

Rising averagetemperatures

Governance and risk management

Extreme weather events

In June 2022, the BML Group expressed its endorsement of the recommendations of the Task Force on Climate-related Financial Disclosures(hereinafter, “TCFD”). We will continue to actively engage in information
disclosure based on the recommendations of TCFD.

identified the risk of lost sales opportunities, such as
flooding of key sites and delivery delays or destruction of
specimens due to supply chain disruptions, while at thesame time identifying opportunities in which appropriate
capital investment to make sites more resilient from a
BCP perspective will lead to differentiation from competitors and positively affect sales opportunities.
The results of the analysis confirmed that no significant
business continuity risks are expected under any of the
scenarios, and that the Company’s business has acertain level of resilience to climate change.

The BML Group discloses the GHG emissions (total
amount, Scope 1 and 2) of BML General Laboratory after
obtaining a third-party verification opinion. Going forward, we will work toward Scope 3 calculation anddisclosure for other sites. In addition, the BML Group isalso considering setting GHG emission reduction targets
on a Group-wide basis in light of regulatory trends invarious countries.

[GHG emissions (t-CO2) of the BML General Laboratory]
2 019

2020

2021

Scope 1

3,346

3,493

3,915

Scope 2

12,132

12,441

12,476

BML REPORT 2022

42

BML’s Sustainability

Society
Seven-year diversity promotion plan (April 2021 to March 2026)

Human resource development and utilization
In the Seventh Medium-Term Management Plan, we havepositioned the development and utilization of humanresources as a priority toward strengthening our management base, and are working to promote diversity,

visualize skills, and strengthen and enhance educationand training.

Target 1

Increase the percentage of women in management positions to about 13%

Target 2

Increase the percentage of female candidates for next management positions to about 32%

Target 3

Increase the percentage of men taking childcare leave to about 10%

Diversity training

Response to social conditions and laws and regulations
	Strengthening the labor management system (supporting workstyle reform)
Promotion of women (advancement of diversity)

Diversity training for all BML employees was conducted
for officers, managers, and general employees for awareness reforms throughout the Company. In particular, thetraining for managers included a review of the workplacefrom the perspective of diversity and group discussions
with managers from other departments.

We are working to create a workplace environment inwhich employees can work comfortably by distributing a
Message from the Top Management from the President
and by having all managers make an Ikubosu (family-friendly boss) declaration.

Training for officers

Training for managers

Management of human resources capabilities
	Personnel management based on standard headcount	Human resource development and utilization

Human resource development and utilization
Job

Establishment of Women’s Working Group
Training

Hiring
Improvement of businessexecution skills [skill map]

Management level development

Transfer (career development, leadership development)

Executive level development

Utilization ofelderly
employees

Career path

In order to implement the Action Plan for the Advancement of Women, the Women’s Working Group was established within the Human Resources Department toimplement measures that reflect the feedback from many
women working in a variety of environments.
By making various proposals on the current humanresources system from the viewpoint of women, theWorking Group is reviewing the system and its operation.
The first meeting of the Working Group	Local hiring	Hiring high-level
personnel	Restructuring training system
	Strictly implementing career sheets
	Revitalizing personnel transfers	Establishing training
methods
	Promoting humanresource exchanges

	Supporting extensionof employment toage 70

The Group will introduce skill maps to visualize the skillsof each and every employee. Standardized skills are set
for each job category and role, and standardization is
promoted through training. Furthermore, we will enhance

Advancement of diversity
The BML Group is working to advance diversity, and isparticularly focused on promoting the active participationof women. While women, who account for about half ofall employees, have become an important asset tosupport the business, not much progress had been
made on their promotion to management positions. In
light of this situation, since FY2021, we have been working to select and train women who are capable of becoming core human resources in the future and promote
them to management positions, with all officers andemployees recognizing the importance of diversity.
In addition, the Women’s Working Group has been
established to review various systems in order to achievea workplace where women can work comfortably and are

43

BML REPORT 2022

Visualization of skills

rewarded for their efforts. We are promoting the active
participation of women from both systematic and operational perspectives. Specific measures include: (1) the
disadvantage of taking maternity leave in terms of promotion procedures has been rectified, (2) the managerial
promotion system, which had been restricted by therange of possible transfers, has been reviewed, (3) the
annual paid leave system has been reviewed with theaim of facilitating work-life balance, and (4) men havebeen encouraged to take childcare leave.

the quality and efficiency of operations by raising thestandard level of these skills.

Skill map (conceptual image)(Points)
Experienced departments
Biochemistry

Laboratory
techniques

Test equipment

1

Hemogram

2

Blood types andtransfusion

3

···

1

Equipment A

2Equipment B

3Equipment C

Hematology

Immunology

····

3
2

5

4

BML REPORT 2022

44

BML’s Sustainability

Society
Messages from employees

Strengthen and enhance education and training

Acquisition of childcare leave
We will establish a new training system as a measure todevelop and utilize human resources. In addition to operational skills for each job category, we will organize andstrengthen the business skills required for each rank. We
will simultaneously implement selective training

programs for the purpose of developing leaders for the
next generation. Furthermore, online content is introduced to create opportunities for self-directed learning.

Management training and executive development training
In order to ensure the sustainable diversity of core human resources, we conduct selective education andtraining to identify and systematically develop humanresources from an early stage. We redefine the roles andskills required at each level, and strengthen humanresource capabilities through repeated off-the-job training and workplace practice over a period of approximately six months.

Management training

Executive development training

Unit 1

Role recognition and self-awareness

Unit 1

Role awareness and logical thinking

Unit 2Strategy and target setting

Unit 2Business strategy

Unit 3

Mentoring and coaching junior staff

Unit 3Finance and strategy

Unit 4

Organizational transformation

Unit 4Marketing and business models

Unit 5

Organization and businessIT literacy training for DX promotion
In FY2022, we will conduct training to enhance theoverall IT literacy level of all employees, because weneed to give each and every employee a sense of ownership over DX, making changes from the daily work

Kai Seguchi,

I have always loved children, and there was a time when I thought about becoming achildcare worker in the future. For this reason, I naturally thought that If I had a child, I would
like to take childcare leave. With the encouragement of my team members at the time, I
decided to actually take the childcare leave.
Although the leave lasted only two months, it was a valuable opportunity for me to see theonce-in-a-lifetime growth of my child most closely. On the other hand, I feel that I shouldhave taken the leave just before or just after my wife returned to work, rather than immediately after the birth, and also that we could have worked out each other’s share of household chores and childcare in the future. However, through this childcare leave, I was able tostrongly realize that working fathers can become stronger through childcare.

Recruiting Section

Acquisition of childcare leave
I love children so much that I participated in the Boy Scouts even after I became a working
adult, and I definitely wanted to take childcare leave when I had a child of my own. My teammembers knew that I loved children, so they created an atmosphere that made it easy forme to take childcare leave.
Since I wanted my wife to rest as much as she could, I actively tried to spend time withmy son alone. I am very happy that I was able to take time off to be with my child, even if it
was only for two weeks. My wife and I had discussed this beforehand, and it turned out tobe a mutually beneficial period for both of us.
I would like to take childcare leave again for our second child, but next time I would liketo aim for a longer period of childcare leave. I have a lot of work to coordinate and handover to make it happen, but I will do my best to spend time with my beloved children.

level. In addition, systems human resources will receive
training to acquire the knowledge and skills necessaryfor DX promotion.

Types of software

Development flow (implementation,
testing, maintenance)

IT qualifications

IT around us

Types of programming
languages

Network security

What is DX?

Examples of IT applications

What is agile development?

What is the cloud?

Virtualization

Types of hardware

Development flow (requirements
definition to design)

Cryptography andauthentication

What is AI?

Mayumi Kato,
Core System Section

I was nominated for a managerial position after the Act on Promotion of Women’s Participation and Advancement in the Workplace came into effect in 2015. The System Section towhich I belong is very busy and engages in many important operations, and I thought that amanagerial position would be hard work. However, I accepted it thinking that I might as well
give it a try as it is my last chance before retirement.
Since becoming a manager, I have found my days to be enjoyable and rewarding, as myscope of work expanded my discretionary rights and connections with various people both
inside and outside the company, in addition to my own department. On the other hand, Ialso encounter many challenges that require me to take the lead and solve them without
running away from them. Therefore, I work to stay under control mentally so that I do not getoverwhelmed by the sense of responsibility as I take care of my current tasks.
Although I was not fully on board with becoming a manager at first, I believe that the position has helped me grow into the person I am today. People can grow by being in a positionof responsibility and fulfilling those responsibilities through trial and error. If you are recommended for a position, I really encourage you to give it a try.

Promotion of health management

External evaluation

BML Group Health Declaration“Dedication to creating a healthy and cultured society.”
In order to realize this Policy, the BML Group declaresthat each and every employee will contribute to thecreation of a rich culture of health by promoting healthmanagement through the development of a health-first
culture.

45

BML REPORT 2022

General Testing System
Section 1

Promotion of the active participation of women

Introduction to IT
What is IT?

Kei Akazawa,

1 We will promote work-life balance and create work-

Received 2 stars for “Eruboshi” Certification

Recognized as a 2022 Certified Health & Productivity Management Outstanding Organization

places where a diverse range of employees can play
an active role.
2 We will endeavor to maintain and promote the mental
and physical health of our employees and their families.
3 We will support the efforts of each employee to voluntarily maintain and improve his or her own health.

BML REPORT 2022

46

BML’s Sustainability

Corporate Governance
Message from an Outside Director

Transforming corporate culture throughawareness reforms
Human resource development andutilization lead to sustainable growth
Yukiko Yoritaka,Outside Director (Independent Director)

Instilling an awareness of diversity throughout
the Company
I was appointed as Outside Director of the BML Group inJune 2020. After gaining practical experience at Sumitomo Mitsui Banking Corporation in areas such as screening, research, and sales, I worked in the humanresources department as an executive officer of the bankand the group, where I was in charge of human resources development and diversity. Currently, I am also incharge of business administration, finance, public relations, diversity, and other duties at The Japan ResearchInstitute, Limited.
Upon assuming the position of Outside Director, I
understood that my role was to bring diversity to theBoard of Directors by incorporating the perspectives ofwomen, in addition to providing expertise and information from outside the Company. Therefore, I have beenutilizing my experience and knowledge to provide advice
on the formulation of strategies, such as human resource
development and utilization, the review of training systems, and the promotion of diversity, as well as to enhance corporate value and sustainable growth over the
medium to long term.
Since I joined the Board of Directors, we have madesteady progress in ensuring diversity in corporate governance.
For example, in promoting diversity, it is necessary to
conduct an awareness reform throughout the Company.
As a prerequisite for this, I have advised the Company of
the necessity to become aware of unconscious bias,
which is a barrier to diversity.
We have announced a five-year diversity promotion
plan that ends in FY2025, and we launched the plan in
FY2021. The plan sets the following three targets: toincrease the percentage of women in management
positions to about 13%, to increase the percentage of47

BML REPORT 2022

female candidates for next management positions (chiefs
and deputy chiefs) to about 32%, and to increase thepercentage of men taking childcare leave to about 10%.
As a prerequisite for this, diversity training was conducted for each layer of the Company, including directors, managers, and general employees, in order tomake a holistic effort to promote the advancement of
women.

Putting our soul into the diversity system
The promotion of diversity requires commitment from the
top management. Therefore, we ask that top management continue to communicate this commitment fromtime to time through means such as meetings of theBoard of Directors, training sessions, and internal newsletters.
To promote diversity is to also take on the challenge oftransforming the corporate culture. I recognize that weneed to make genuine efforts to change the entrenched
culture.
In promoting the active participation of women, it isalso necessary to consciously create opportunities for
women to play an active role. We also believe that it isimportant for employees to act on their own initiative. We
thus have established the Women’s Working Group togather a wide range of opinions. This has led to initiatives
such as Ikubosu (family-friendly boss) training and the
Ikubosu declaration.
There was also a proposal to open the daycare centerattached to the Kawagoe General Laboratory to thegeneral public for its further use. In addition, we identified factors that inhibit male employees from taking childcare leave, and we shared our findings with employees
through internal newsletters and incorporated solutions
into our human resource systems.

It takes time to transform the corporate culture. Although we are currently in the process of setting targets
and establishing systems, over the past year, I think wehave made a lot of progress in employee awarenessreforms regarding diversity, not to mention awareness ofthe term “unconscious bias.”
Looking ahead, I believe that we must continue to put
our soul into the system through a series of commitmentsfrom top management, training, and communication topromote diversity.

Response to the revision of the Corporate
Governance Code
The BML Group has also taken steps to comply with therevised Corporate Governance Code.
We have been working to increase the ratio of Outside
Directors to more than one-third of the total number of
directors. The Advisory Committee was also renamed theNomination and Compensation Committee to enhance its
effectiveness. An Outside Director serves as the chairperson of the Committee and works to facilitate discussions.
The Nomination and Compensation Committee receives explanations of who the candidates for directors
and executive officers are and the reasons for theirselection, and Committee members interview the candidates to facilitate discussions.
The Committee also discusses the compensation
system, including new perspectives to be adopted.
We are also discussing how to further improve theevaluation system for officers and apply a more sophisticated evaluation approach, taking into account not only
the task achievement rate but also the degree of accomplishment of organizational management and the Medium-Term Management Plan.
We have completed a certain level of compliance withthe revised Corporate Governance Code, and we will further enhance the system in the future.
One of the missions of the Nomination and Compensation Committee is to develop the next generation ofmanagement candidates. How can we nurture the next
generation, including reviewing training systems, assignments, and transfers, to develop the next generation ofleaders and executive candidates? For example, it isnecessary to include a certain number of women among
the candidates, and the training of candidates from sucha perspective has just begun.

Enhancement of sustainability
As part of our efforts to further strengthen corporate
governance, we must work to enhance sustainability
going forward.
To realize the BML Group’s Policy of “Dedication tocreating a healthy and cultured society,” the realization ofa sustainable society and management is essential. In
particular, addressing climate change and environmental
issues is one of the challenges that must be addressed
globally. BML, as a listed company on the Prime Market

that is environmentally friendly, needs to address theseissues positively and proactively.
In this context, we have decided to establish the
Sustainability Committee and have formulated a basic
policy. We have also discussed our response to the
TCFD (Task Force on Climate-related Financial Disclosure) extensively and disclosed it. This issue needs to beaddressed in dialogue with all stakeholders of the BMLGroup. Communication with our employees is particularly
important as they must recognize that environmental
issues are not someone else’s concern, but their own,
and we must address these issues on a Company-widebasis. We also need to make sure that our business
partners understand these issues and cooperate with us
to tackle them together.

Investment in human capital is thebiggest differentiator
One of BML’s future management challenges is tostrengthen and expand its non-insurance business.
Looking ahead, the market size is not expected to
grow significantly in the current environment as the
population of Japan declines. Amid such an environment, the BML Group has strengths in areas including
advanced technology, a nationwide laboratory network,and a collection and delivery network as well as an
excellent system that connects these networks. We
believe it is important over the medium to long term toleverage these strengths to increase market share whilefurther strengthening the non-insurance business anddeveloping new services.
DX (digital transformation) initiatives, as stated in the
Eighth Medium-Term Management Plan announced in
May 2021, are an unavoidable issue in the trend toward
the information industrialization of healthcare. If the BMLGroup does not proactively take on the challenge of thistrend, it will lose its ability to respond to change, itssense of speed, and its flexibility. This is a topic forfurther discussion, including the development of DX
human capital.
Investment in human capital contributes to the longterm growth of a company. Human capital is a company’s
greatest asset and the source of its growth potential. This
is what sets us apart from our competitors. We believethat human capital management is required to make themost of human resources to achieve both individual andcorporate growth.
We have recently expanded our information disclosureon the status of activities related to promoting the active
participation of women. We hope to make our shareholders and investors aware of the current situation and at
the same time emphasize the Company’s proactive
stance. Going forward, we will continue to actively invest
in human capital and consider expanding the scope ofthe disclosure, which we hope will lead to securing
excellent human resources in the future.

BML REPORT 2022

48

BML’s Sustainability

Corporate Governance
List of Directors

Name

Directors

Tatsuharu
Name

Kensuke
Kondo

Position

Attendance atmeetings of theBoard of Directors

President and16 out ofRepresentative

16 times

Director(100%)

Representative

Nobuki Arai

Independent

Director and Vice
President

16/16(100%)

Director; Senior

Norihisa

Executive Officer;

16/16

TakebeGeneral Manager,(100%)

Planning Division

Director; Operating

HideakiOsawa

Officer; General
Manager, SalesManagement

16/16(100%)

Division

Shibata

Dr. Kensuke Kondo has abundant experience and deep insight on overall
medical industry from his experience as a doctor. Since assuming position as
Representative Director in January 2014, he has been leading the Group’s
management. Based on his wealth of achievement from his excellent leadership,
the Company has judged that he is personnel necessary to increase the future
corporate value of the Group.

Dr. Nobuki Arai has abundant experience and deep insight on overall medical
industry from his experience as a doctor. Since assuming position as a Director
in June 2009, he has served in inspection, sales, planning and quality divisions,and after assuming position as Representative Director in June 2017, he has
been involved in the Company’s overall business including overseas andmanagement divisions. By utilizing such achievements, expertise as well as
insights on management, the Company has judged that he is personnel necessary to increase the future corporate value of the Group.

Shigeru
Osawa

Manager, BML
Clinical Testing

Name

Yamashita

Kenichi
Morishita

Yoritaka

49

BML REPORT 2022

Outside Director(Independent
Director)(100%)

Director)

Mr. Shigeru Osawa has abundant experience and deep insights in the financial
and construction fields. By utilizing such achievements, expertise as well as
insights on management, the Company judged that he is personnel necessary toincrease the future corporate value of the Group through giving opinions andmaking judgements from an objective standpoint when making decisions for the
management of the Company, and through playing a role of monitoring andsupervising Directors’ execution of duties. The Company expects him to fulfill hisrole of supervising the management from a position independent from executive
officers by utilizing his wealth of experience in the construction field.

Outside Director(Independent
Director)

PositionIndependent

Reasons for nomination

Standing

human resources department, Group company administration departments, and the

Corporate

administration department of the clinical testing subsidiary, and has abundant experience

Auditorand a high level of insight into the Company’s overall business. The Company has judgedthat he will be able to utilize his experience to enhance the audit structure of the Company.

OutsideSince joining the Company, Mr. Hideaki Osawa has been involved mainly in sales
division and also served as Representative Director at a collection and delivery-related subsidiary, and he has abundant experience and deep insight into
the Company’s overall business. By utilizing such achievements, expertise as
well as insights on management, the Company has judged that he is personnel
necessary to increase the future corporate value of the Group.

Since joining the Company, Mr. Yuji Yamashita has been involved mainly in thesystems division and has abundant experience and deep insight into theCompany’s overall business. By utilizing such achievements, expertise as wellas insights on strategy planning, the Company has judged that he is personnel
necessary to increase the future corporate value of the Group.

Division

Yukiko12/12(Independent

Mr. Tatsuharu Arai has many years of abundant experience and deep insights
into corporate management in the chemical industry. By utilizing such achievements, expertise as well as insights on management, the Company judged that
he is personnel necessary to increase the future corporate value of the Groupthrough giving opinions and making judgements from an objective standpoint
when making decisions for the management of the Company, and throughplaying a role of monitoring and supervising Directors’ execution of duties. The
Company expects him to fulfill his role of supervising the management from a
position independent from executive officers by utilizing his wealth of experiencein the chemical field.

Nobushige
TokuonoCorporate

The Company has judged that he will be able to utilize his professional knowledge as a

Auditorcertified tax accountant and his abundant experience at the Tokyo Regional Taxation(Independent

Bureau to enhance the audit structure of the Company.

Auditor)MasatoDenawaCorporate

The Company judged that the expertise of Mr. Masato Denawa as an attorney

Auditorat law can be used for enhancing the audit structure of the Company, even(Independent

though he has never been involved in corporate management.

Auditor)Operating Officer

Director; Operating
Officer; General

Outside Director

Reasons for nomination

Since joining the Company, Mr. Kenichi Morishita has been involved in the Company’s

Mr. Norihisa Takebe has knowledge and experience of financial business. Sincejoining the Company, he has been involved mainly in accounting, corporate
planning and group company management divisions and has abundant
experience and deep insight into the Company’s overall business. By utilizing
such achievements, expertise as well as insights on management, the Company
has judged that he is personnel necessary to increase the future corporate valueof the Group.

Headquarters

Manager, System

Attendance atmeetings of theBoard of Directors

Corporate Auditor

Since joining the Company, Mr. Kenji Shibata has been involved mainly in
inspection division and has abundant experience and deep insight into the Company’s overall business. By utilizing such achievements, expertise as well as
insights on strategy planning, the Company has judged that he is personnel
necessary to increase the future corporate value of the Group.

Officer; General

Yuji

Independent

OutsideDirector; Operating

Kenji

Arai

Reasons for nomination

Position

16/16(100%)

Ms. Yukiko Yoritaka has abundant experience and deep insights into finance andhuman resources fields. By utilizing such achievements, expertise as well as
insights on management, the Company judged that she is personnel necessary
to increase the future corporate value of the Group through giving opinions andmaking judgements from an objective standpoint when making decisions for the
management of the Company, and through playing a role of monitoring andsupervising Directors’ execution of duties. The Company expects her to fulfill herrole of supervising the management from a position independent from executive
officers by utilizing her wealth of experience in finance and human resources
fields.

Name

Position

Responsibilities

Name

Position

Responsibilities

Masami
Kondo

Executive Officer

General Manager, In-hospital
Examination Division

Michihiro
Aono

Operating Officer

General Manager, Credit
Guarantee Department

Hiroyuki
KigoshiExecutive Officer

General Manager,
Management Division

Toshihiro
YanomaOperating Officer

General Manager, Sales
Strategy Division

Satoshi
EnomotoOperating Officer

In charge of Establishment of
Next-Generation General Laboratories

HiromiNakahara

Operating Officer

General Manager, Risk
Management Department

Toshikazu
Yamaguchi

Operating Officer

In charge of Advanced Technology& Development Division

YutakaSakamakiOperating Officer

General Manager, General
Affairs Department

Katsuaki
Takei

Operating Officer

Deputy General Manager, BML
Clinical Testing Headquarters

BML REPORT 2022

50

BML’s Sustainability

Corporate Governance
Skill Matrix (Areas which the Company specifically expects Directors to cover)

Basic Approach toward Corporate Governance

Areas which the Company specifically expects Directors to cover
Name

Kensuke Kondo

Nobuki Arai

Norihisa Takebe

Hideaki Osawa

Kenji Shibata

Yuji Yamashita

Yukiko Yoritaka

Tatsuharu Arai

Shigeru Osawa

Positions in the Company

Management
Experience

MedicalExperience

Inspection/
Engineering

Information
Technology

Strategy
Planning

Finance/
Accounting

Personnel/
Labor

Risk/Legal
Affairs

President and Representative
Director

Corporate Governance Structure

Vice President

The Audit Office, which reports directly to the President,
has been established as a department to conduct internal audits on all divisions including the Company’s
affiliated companies and conducts audits on the effectiveness of internal controls and the status of businessexecution. Additionally, internal audits are conducted by
the Credit Guarantee Department mainly on the inspection divisions, our specialty field, to assess and provide
instructions on compliance with laws and regulations,internal control system, risk management, quality, environment, and other matters.
Corporate Auditors conduct rigorous audits mainly byattending important internal meetings including theBoard of Directors meetings, inspecting important approval documents and other documents, and investigating the status of business and assets at the head officeand the major business locations. Furthermore, as part ofthe cooperation between the Corporate Auditors and the
Audit Office, the results of internal audits are reported to
the Board of Corporate Auditors, joint audits are conducted, and information is shared when necessary. The
Audit Office also periodically reports the status of internal
controls to the Board of Directors.

Director;
Senior Executive Officer

Director; Operating Officer

Director; Operating Officer

Director; Operating Officer

Outside Director(Independent Director)

Outside Director

Outside Director

General Meeting of Shareholders

Board of Directors(Directors)

President andRepresentative Director

Nomination andCompensation Committee

Audit OfficeBusiness execution function

General Managers

Risk Management Department

Employees(Corporate Auditors)

Risk management andinternal audit functions

Credit Guarantee
Department(including Operating
Officers)

Board of Corporate Auditors

Compliance
Committee

Accounting Auditor(Audit firm)

Corporate lawyer

Group Governance(Independent Director)

Name

Positions in the Company

Kenichi Morishita

Standing Corporate Auditor

Nobushige

Outside Corporate Auditor

Tokuono(Independent Auditor)

BML REPORT 2022

Corporate Governance Structure Chart(Independent Director)

Areas which the Company specifically expects Corporate Auditors to cover51

corporate activities, the Company has set forth Compliance Regulations and is also working to raise awarenessby conducting training and seminars for its employees inaccordance with the BML Group Compliance Manual,
which illustrates the code of conduct to be observed by
the employees and other persons.

Representative Director ;Skill Matrix (Areas which the Company specifically expects Corporate Auditors to cover)

Masato Denawa

The Company promotes initiatives to fully comply witheach of the principles of Japan’s Corporate Governance
Code of the Tokyo Stock Exchange. The Company has
disclosed its Corporate Governance Report, which
includes the table on the implementation status of 83
items submitted to the Tokyo Stock Exchange, on its
website. Additionally, to execute fair and transparent

Outside Corporate Auditor

Management
Experience

MedicalExperience

Inspection/
Engineering

Information
Technology

Strategy
Planning

Finance/
Accounting

Personnel/
Labor

Risk/Legal
Affairs

The Company has established the Regulations on theManagement of Affiliated Companies, which set forth
a comprehensive management policy and a management organization of the affiliated companies to facilitate proper operations for smooth business management.
The Affiliated Company Meetings are also held periodically as a venue for the exchange of information.
The compliance and risk management structures havebeen established to encompass the corporate groupas a whole, in accordance with the Company’s rules.
The Internal Control Committee (hereinafter, the “Committee”) comprising the Group companies conducts
the establishment, operation, and assessment of internal controls. The Committee is chaired by the President of the Company and the Corporate Planning
Department serves as its secretariat. The members of
the Committee include the General Managers of eachdivision of the Company and the Presidents of thesubject companies of the Group, while other members
are appointed by the President, as necessary. The
Committee engages in the following activities:(1) Discussions and deliberations on the direction to
be taken and the measures concerning theGroup’s internal controls; and(2) Instructions on the preparation of the necessary
documentation for the development and review ofinternal controls of the divisions of the Company
and the subject companies of the Group.
The affiliated companies of the Group, mentioned
above, are audited by the internal audit divisions of
the Company.

(Independent Auditor)

BML REPORT 2022

52

BML’s Sustainability

Corporate Governance
The Role of Each Committee

Trends in Governance
Role

Board of Directors

The Board of Directors determines statutory matters, the formulation of management
policies, budgets, and other crucial management matters, discusses the analyses,
measures, and assessments of monthly business performance, and conducts deliberations from the standpoint of compliance with laws, regulations, and the Articles ofIncorporation and the appropriateness of business.

Board of Corporate Auditors

Compliance Committee

The Board of Corporate Auditors discusses and determines the audit policy and theaudit plan, attends important internal meetings, audits the status of business andassets, and audits the business execution of Directors and their compliance with laws,
regulations, the Articles of Incorporation, and other rules.

2015

Group Vision
To become the most trusted choice in the medical
world
Sixth Medium-Term Management Plan (FY2015 –FY2017)

2016

2017

Determination of the order of Directors acting on behalf of the President

Framework
“No.1 in regional services”
Provide optimal services for each region
“No.1 in the test lineups”
Pursue new testing technology
“No.1 in contributions to the medical careindustry”
Contribute to the development of theindustry as a member of the medical careindustry
“No.1 in quality”
Aim for a higher rank in quality
“Business management”
Strengthen business development, risk
management, IR activities, personnel andgeneral affairs, and governance

Officers of the Company serving concurrently
as officers of affiliated companies

Eighth Medium-Term Management Plan (FY2021 –FY2023)

The Compliance Committee oversees the cross-sectional compliance structure including the Group companies and operates the whistleblowing system, Compliance Post.
2019

Major Agenda of the Board of Directors
Proposals to be resolved:

Appointment of Operating Officers

Shareholder returns
Matters related toshareholder returns

Approval of the outline of convocation of theAnnual General Meeting of Shareholders

Matters related to financial statements Financial statements
and business performance
BudgetMatters related tocorporate governanceMatters related toinvestments in and thedisposal of important
assetsAppointment of Operating Officers with special
titles and determination of their delegated duties

Interim dividends

Partial disposal of cross-shareholdings

Matters related to
Directors, Operating
Officers, and the Boardof Directors

Amount of compensation for Directors

Compliance with the revisions to Japan’s Corporate Governance Code

Payment of monetary compensation receivables related to restricted stock

Adoption and expansion of facilities related to COVID-19

Disposal of treasury shares as restricted stock

Major renovation of the BML General Laboratory

Payment of officers’ bonuses

Disposal of non-current assets
Purchase of power generators

Matters related to personnel
Appointment of officers
and organization

Matters related to shareholder returns Shareholder returns
Reports on the results and plans of internal control assessments

Mergers of affiliated companies
Changes to the name of the organization

Matters related tocorporate governance

Changes to the Steering Rules of theNomination and Compensation Committee

Important matters of the Company Opening of a laboratory
and affiliated companies
Selection of the (Prime) market
Matters related to Directors, Policy on the payment of officers’ compensation
Operating Officers, and the Appointment of Directors with special titles
Board of Directors
Appointment of Representative Directors

53

BML REPORT 2022

Human resources development and promotionof the advancement of women
TCFD and the Integrated Report

Matters related to investments in and New building construction planthe disposal of important assets Cloud-based electronic medical charts
Personnel matters related to the officers of affiliated companies
Other matters

Proposals to be submitted to the annual general meeting of shareholders
of affiliated companies (financial statements and appropriation of surplus)
Policy for audits by the Board of Corporate Auditors
Market share and plans for future laboratories

Important matters of the Company BCP measures and complianceand affiliated companies
Results of COVID-19 testing

Mission(1) Customer Satisfaction(2) Synergy(3) Social Responsibility

2021

Matters to be reported:

Formulation of the Eighth Medium-Term Management Plan
Other matters

2020

Conclusion of annual maintenance agreements for testing equipment

Additional development of browser-based electronic patient charts

Matters related toreorganization

Approval of competitive transactions and direct transactions
for third parties undertaken by the Company’s Directors

Compliance with Japan’s Corporate Governance CodeReplacement of the aggregation server for testing systems

Goals
Improvement of quality and services
Strengthening sales infrastructure
Rebuilding system infrastructure
Expanding testing infrastructureEnhancing human infrastructureEnhancing management quality and functions

Concept
Becoming No.1 in quality and service

2018

2022

Trends in Strengthening GovernanceConcept
Building and strengthening the foundations
needed to be the top company in the industry

Seventh Medium-Term Management Plan (FY2018 –FY2020)

Period for GrowthCompensation Committee

Medium-Term Management Plan of the BML Group

Period for Leaping Forward

Nomination and

The Nomination and Compensation Committee deliberates, forms an opinion, andreports to the Board of Directors on the draft proposals to the General Meeting of
Shareholders on the appointment or dismissal of Directors and Corporate Auditors andthe draft proposals to the General Meeting of Shareholders on the compensation of
Directors and Corporate Auditors, and other matters for which advice is requested fromthe Board of Directors.

Year

Period for Solidifying Foundation

Committee

Internal Code of Conduct(1) Consensus: consensus of employees(2) Soundness: soundness of all operations(3) Standardization: pursuit of standardization

Adoption of the restricted stock compensation system

Establishment and announcement of the independence criteria for
Outside Directors
Establishment and announcement of the Basic Policy on Crossshareholdings
Establishment of the Nomination and Compensation Advisory
Committee
Adoption of the electronic platform for the exercise of voting rights
Publishing an English version of the Notice of the General Meetingof Shareholders
Introduction and announcement of the results of the self-assessment
system concerning the effectiveness of the Board of Directors
Adoption of the officer bonus system as a short-term incentive

Appointment of the (first) female Director

Announcement of the Action Plan for the Advancement of Women(From April 1, 2021 to March 31, 2026)
Name Change of the Nomination and Compensation Advisory
Committee to the Nomination and Compensation Committee
Composition of the Board in which 1/3 are Outside Directors (3 outof the 9 Directors are Outside Directors)
Disclosure of the Directors’ Skill Matrix
Announcement of the Message on Diversity & Inclusion by the
President
Composition of the Board of Directors (as of June 2022)

Composition of the Board of Corporate Auditors (as of June 2022)

 ne-third of the Board of Directors
O
consists of Independent Outside
Directors

 wo-thirds of the Board ofT
Corporate Auditors consists of
Outside Corporate Auditors
Independent Outside
Corporate Auditors
Internal
Corporate
Auditors

Basic Strategic Framework
Aim to enhance competitiveness based on
Independent Outside“Standardization” × “DX (Digital Transformation)” Directors

3

Framework
Internal
Standardization: Enhancement of
Directorcompetitiveness
Enhancing the laboratory network
Enhancing sales capabilities
Composition of the Nomination and Compensation Committee (as of June 2022)
More than half of the committee members
Renovating collection and delivery processes
comprise Independent Outside Directors
DX
Improvement of the customer experience andrealization of greater business efficiency
Internal
Independent
Strengthening the management foundation,
Director
Outsidehuman capital development and its effective
Directors
utilization

3

6

2

1

2

BML REPORT 2022

54

BML’s Sustainability

Corporate Governance
Assessment of the effectiveness of the Board of Directors
The Company conducts analyses and assessments of
the overall effectiveness of the Board of Directors basedon the assessments and opinions of each Director on thecomposition, operation, agenda, support system, andother matters of the Board of Directors. To analyze andassess the effectiveness of the Board of Directors, aquestionnaire was conducted as part of theself-assessment process and the results indicated thatthe Board of Directors had been mostly developed
appropriately and ensured of its appropriateness.
However, in light of the other opinions voiced in thequestionnaire, the Company will strive to further improvethe deliberations by the Board of Directors and enhance
its effectiveness.

Assessment results and measures taken for FY2020

Assessment results and measures taken for FY2021

Compensation and other benefits of Directors and Corporate Auditors
Basic approach
The Company has established a policy on determining the details of compensation and other benefits of individual
Directors by a resolution of the Board of Directors, upon deliberation by and receiving the recommendations of theNomination and Compensation Committee, the majority of which comprises Outside Directors.
Matters regarding the policy on determining the details of compensation and other benefits of individual Directors

Assessment results

Assessment results

Measures taken

Measures taken(1) Composition of the Board of Directors
The Board of Directors has mostly been developed andmaintained appropriately. (5 out of 5 items)(2) Operation of the Board of Directors
The Board of Directors mostly operates appropriately. (9 outof 9 items)(3) Agenda of the Board of Directors meetings
The composition of the agenda is mostly appropriate. (10out of 10 items)(4) System to support the Board of Directors
The system has been mostly developed appropriately. (6out of 6 items)
A review of the composition and the operation method of theBoard of Directors should be conducted.
The effectiveness of the Board of Directors should be
discussed at the Board of Directors meetings and at free
discussions.
(1) Composition of the Board of Directors
The Board of Directors has mostly been developed andmaintained appropriately. (5 out of 5 items)(2) Operation of the Board of Directors
The Board of Directors mostly operates appropriately. (9 outof 9 items)(3) Agenda of the Board of Directors meetings
The composition of the agenda is mostly appropriate. (10out of 10 items)(4) System to support the Board of Directors
The system has been mostly developed appropriately. (6out of 6 items)
To facilitate operations, the agenda and operation methodshould be improved.
To invigorate the discussions and improve the quality ofdeliberations at the Board of Directors meetings, information
should be provided early.
To encourage a greater understanding of the roles andresponsibilities, training suited to each Director andCorporate Auditor should be conducted, and onsite
inspections should be enhanced.


Cross-shareholdings
Basic approach
The Company has set forth its Basic Policy regarding Cross-shareholdings and holds a limited quantity of cross-shareholdings and exercises voting rights in accordance with the policy.
Additionally, the appropriateness of holding individual issues in a cross-shareholding is periodically verified by the
Board of Directors.
1. Policy on Cross-shareholdings(1) Cross-shareholdings are held to a limited extent, only
in cases where factors such as maintaining andstrengthening long-term and stable relationships withthe counterparty and enjoying benefits from a business strategy perspective are expected and suchcross-shareholdings are determined to contribute to
the enhancement of the corporate value of both thecounterparty and the Group.
(2) Each year, considering the medium- to long-term
economic rationale and the future outlook of theshareholding, a comprehensive verification of theindividual issues of the cross-shareholdings is conducted on the risks and returns entailed by the shareholding and the significance of the shareholding fromthe perspective of business strategies, such as
business relationships and business partnerships,
and the decision whether to continue the shareholding is made.

55

BML REPORT 2022(3) If, as a result of the verification, the shareholding isfound to be unjustified, the Company proceeds withthe disposal of such shares, with the understandingof the counterparty. Even in cases where the shareholding is found to be justified, such shares may bedisposed of, in light of the market environment, theCompany’s management and financial strategies, andother factors.
2. Policy on the Exercise of Voting Rights
The exercise of voting rights concerning the shares incross-shareholdings is considered in a comprehensive
manner for each agenda upon confirming the following
points:(1) Whether it will enhance the corporate value of thebusiness partner company in the medium to longterm and contribute to its sustained growth.
(2) Whether it will contribute to the policy of increasing
the Group’s profits in the medium to long term.

To ensure the fairness and objectivity of compensationand other benefits of Directors, the Nomination and Compensation Committee considers and compares officer
compensation of domestic listed companies that arecomparable in size with the Company, and deliberates
the amounts of fixed compensation, performance-linked
compensation, and restricted stock compensation, by
taking into account such factors as the Company’sbusiness performance. Additionally, the components ofthe compensation of individual Directors are determinedthrough comprehensive consideration of such factors as
the business performance of each fiscal year, the duties
for which each Director is responsible, and the extent of
the individual’s contribution to the sustainable enhancement of corporate value.
Compensation for Corporate Auditors comprises
exclusively of fixed compensation, in light of their independence from management and their objectivity, andthe amount of compensation of each Corporate Auditor
is determined by deliberation of the Corporate Auditors.

Matters regarding the delegation of authority to determine the compensation and other benefits of individual Directors
The Company’s Representative Directors, who have beendelegated by a resolution of the Board of Directors theauthority to calculate the specific amounts of compensation of individual Directors, ultimately make the decision
on individual compensation.
In determining the detailed amounts of compensationof individual Directors, the Nomination and Compensation Committee, the majority of which comprises Outside
Directors, conducts multilateral deliberations, including
whether the draft proposals prepared by the President
and Representative Director are consistent with thedetermination policy. The Nomination and Compensation
Committee offers recommendations on the draft proposal
and the President and Representative Director ultimately
makes a decision in accordance with these recommendations. Thus, measures have been taken to prevent
arbitrary decisions and to ensure that the authority is
exercised appropriately. As the amounts ofcompensation of individual Directors are determined bycompleting these procedures, the Board of Directors has
determined that the details of the compensation are inline with the determination policy and therefore, appropriate.
The reason why the authority to determine the compensation of the individual Directors has been delegatedto the President and Representative Director is that the
President and Representative Director is most suited toviewing the business performance of the Group overall
while at the same time evaluating the responsibilities andthe areas for which each Director is responsible. Nevertheless, when determining the amounts of compensationand other benefits of individual Directors, the President
and Representative Director makes such a decision,
upon receiving recommendations from the Nomination
and Compensation Committee, the majority of which
comprises Outside Directors.

Matters regarding performance-linked compensation
To provide incentives to Directors to strive for the improvement of business performance and the enhancement of corporate value, the Company has introduced
performance-linked compensation in addition to fixedcompensation. Compensation amounts are calculated
according to a payment ratio corresponding to thedegree of achievement of the business plan such as theamount of net sales, as the basis for the calculation of
performance-linked compensation. This indicator was
selected because it comprehensively and objectively
illustrates the results of business execution for the fiscal
year under review, and the indicator has also been determined to be appropriate from the standpoint of focusing
on the degree of achievement of performance growth.

Total amount of compensation and other benefits by officer category, total amount of compensation and other benefits by type, and the number of eligible recipients
Officer category

Total amount ofcompensation and otherbenefits (millions of yen)

Total amount of compensation and other benefits by type (millions of yen)
Basic compensation

Performance-linked compensation

Non-monetary compensation

Number of eligible
recipients

Directors(Outside Directors)

199
(15)

172
(15)

22
(—)

4
(—)

12
(4)

Corporate Auditors(Outside Corporate Auditors)

19
(6)

19
(6)

—

—

4
(3)

BML REPORT 2022

56

BML’s Sustainability

Corporate GovernanceCrisis Management System

Risk Management
Basic Policy on Risk Management
The BML Group has established the Basic Policy on Risk
Management to articulate its basic approach to risk
management and the structure and the method of actions to be taken so that risk management functions
effectively, and to ensure the sound and stable management of the entire Group through the practice of appropriate risk management.
The basic policy sets forth the basic objective andcode of conduct where the basic objective is to prevent
risks before they materialize, as well as swiftly and

Risk Management Promotion Structure
As regards the risk management promotion structure, the
BML Group’s basic policy on risk management has been
established and to implement the basic policy, a risk
management system has been built in accordance with
the Basic Rules on Risk Management. Through theeffective functioning of the risk management system andthe continuous monitoring of individual risks, the Company has established a system capable of swiftly andappropriately dealing with emergencies in the unlikely
event that they occur.
Additionally, the Risk Management Department has
been established as a department that centrally manages all risks and engages in the prevention and analysis
of risks.

Risk Assessment

appropriately deal with crises in the unlikely event thatthey occur. The basic objective also includes keeping
the impact of risks on management resources to a minimum by swift recovery measures and maintaining thefunctions of the organization. The code of conduct sets
forth six items including the preservation of the safety
and health of employees and other parties, as well as thepreservation of management resources, and swift andappropriate recovery in the event that management
resources are damaged.

President

Audit divisions(Credit Guarantee Department)(Audit Office)Chief Risk Management
Officer
Risk Management Meeting

Risk Management Department
Each business unit
(Risk Management Manager)
Divisions in charge
Implementation divisions

To understand the types of risks that face the BML Groupand their impact, the Risk Management Department
covers various risks and clarifies the “amount of damage,” “impact on credibility and reputation,” and “occurrence coefficient” for each risk and assesses theirimpact. The divisions in charge cooperate with the Risk
Management Department and carry out risk countermeasures.

Amount of damage + credibility/reputation

Risk Map and Major Risks

Labor management

Compliance

Infrastructure

5
4

or
M aj

3

im p

ac t

Compliance
The BML Group defines compliance as “not only compliance with laws and regulations but also respect for
fundamental human rights, compliance with corporate
ethics and social norms, and the practice thereof,” andthe code of conduct for its employees stipulates that

Information leakage
Others2
1
1: Low frequency 2: Once every several years 3: Several times a year 4: Several times a month 5: Several times a week

Major Risks and Countermeasures
Category

Summary of risk

Countermeasures

Labor
management

Overwork, humanresources shortagedue to the pandemic

To prevent overwork, the Company is conducting training for managers, carrying out early detection andcountermeasures by strengthening the labor management system, and conducting appropriate labor
management based on laws and regulations.
The Company is preventing the spread of COVID-19 and implementing measures against the pandemic bymonitoring the trends of the infection and other means.

Compliance

Violation of compliance with
relevant laws and regulations
Fraud and scandals of employees

To spread the compliance mindset, the Company conducts periodic training for the employees. To enable theearly detection and prevention of law violations, the Company conducts compliance self-audits every quarter.
The Company has established the whistleblowing system, the “Compliance Post.”

Information
leakage

Leakage of personal information including
information on customers’ patients
Leakage of internal confidential
information

The Company conducts training on the protection of personal information for its employees every year.
Review meetings on the protection of personal information are held each month, and deliberations are
conducted on the investigation of causes and the formulation of measures to prevent recurrences in the eventthat an information leakage occurs.

Disasters

Disasters due to heavy
rains, earthquakes orother events

To continue its business even in times of disaster due to heavy rains, earthquakes or other events, theCompany is implementing measures to prevent the flooding of important facilities. Additionally, the Company
plans to adopt the base isolation system for the new building construction plan.

Infrastructure

Suspension of public
infrastructure

The Company has adopted in-house power generators so that, even during outages, it can continue its
business until services resume for suspended power and water. Additionally, in the new building construction
plan, the Company plans to install emergency power generators (to generate power for 72 hours) and clean/pure water tanks (enough for 2 to 3 days).

BML REPORT 2022

employees must practice compliance through fair business operations while proactively striving to contribute tosociety. To achieve compliance, the BML Group takes
actions in accordance with the following rules set forth in
the code of conduct mentioned above: rohibition of acts that are in violation of compliance, and the prohibition of instructing, aiding and abetting, and tacitlyP
approving such actions
Prohibition of discrimination, harassment, and similar acts as part of respect for human rights
Recognition of the dignity of life as the primary goal, and the execution of various businesses in accordance withlaws, regulations and rules and with the highest sense of ethics and social norms, etc.
Additionally, the Compliance Committee has been
established as an organization to oversee compliancewithin the Company and engages in actions to raiseawareness of compliance and prevent violations before

they have a chance to occur. The results of these actions
are reported at the Compliance Committee meetings
which are held quarterly.

As initiatives to thoroughly enforce compliance, the BML Group conducts periodic training and self-audits.
1. Compliance training
To instill a compliance mindset in all of its employees, the
BML Group conducts compliance training. Compliancetraining is conducted twice a year for its employees oncontemporary agendas involving compliance concerns.
Additionally, training for new employees is conducted inTraining agendas

April each year mainly on matters that new employees
should be cautious of in executing business, including
the prevention of compliance violations that new employees are prone to.

Prevention of power harassment

Antimonopoly Act

Entertainment and gifts

The meaning of compliance for new employees, etc.

Number of incidents

57

life and health as a result of unexpected incidents andaccidents as crises. When a major crisis that could
significantly impact management occurs, the Crisis
Management Committee convenes and immediately
responds through cross-organizational actions to stabilize the situation.

Initiatives to Thoroughly Enforce Compliance

The shaded portions represent risks requiring priority responses

Disasters

6

The BML Group has established the Crisis Management
Committee to enable business continuity even in the
midst of increasing crises, such as climate change,
which has resulted in intensified natural disasters aroundthe world, and the COIVD-19 pandemic.
The Crisis Management Committee has defined eight
incidents including major natural disasters and threats to

2. Self-audits
Quarterly compliance self-audits are conducted at eachdepartment (business offices and testing departments)
including the affiliated companies from the standpoint ofearly detection and prevention of compliance violations.
Self-audit items include sexual harassment acts, power
harassment acts, unpaid overtime, and acts violating
relevant medical laws and regulations. Inspections ofcompliance violations are performed at each department

and reported to the Risk Management Department. The
reported details are investigated by the departments incharge and other divisions and remediation is implemented. Compliance self-audits provide important
opportunities for each department to become aware ofcompliance and have been functioning as part of measures to prevent compliance violations.

Whistleblowing System
The BML Group has established the “Compliance Post”
as a reporting system in the event of compliance violations. The system provides reporting methods such as
the Intranet and writing letters to the offices of the corporate lawyers, and when a report is issued, it is received
by the secretariat of the Compliance Committee, whichquickly addresses the incident bycooperating with the relevant
divisions depending on thecontent of the report.
Compliance poster

BML REPORT 2022

58

Overview of BusinessGroup Vision

Clinical Testing BusinessBusiness Description

We conduct over 4,000 types of tests
ranging from routine testing to highly
Clinical trials testing specialized tests.

To become the most trusted
choice in the medical world

Net sales (millions of yen)

175,232

Clinical testing

128,612

Review of Business Performance for FY2021

Up

Sales increased significantly due to the substantial increase in net
sales related to COVID-19. Additionally, new customer acquisition
was also strong, as it recovered to pre-pandemic levels. As a result,net sales in the clinical testing business increased by 36.2% year on
year.

36.2%

Compositionof net sales bybusiness

YoY

94.2

%

FY2020

FY2021

Food Hygiene Business, etc.
Business Description
Food consultingFood sanitation testing andenvironmental testing
Intestinal bacteria testing

We provide comprehensive
sanitation control in the foodenvironment and support thehealth of consumers and thesafety of food.

Net sales (millions of yen)

Up

Review of Business Performance for FY2021
The environment surrounding the consulting business remains
severe due to the effects of customers’ voluntary restraints on theiroperations. Meanwhile, intestinal bacteria testing, while still short ofpre-pandemic levels, was on a recovery trend. Due to the reaction to
the state of emergency declared at this time last year, net sales
increased by 5.1% year on year.

4,519

4,299

5.1%

Compositionof net sales bybusinessYoY

FY20202.4%
FY2021

Medical Informatics BusinessBusiness Description
Electronic patient chart
Development and sales
Maintenance services

We are engaged in the sales andmaintenance of “Qualis,” the electronic
patient chart system for clinics and “MS(Medical Station).”Net sales (millions of yen)

Up

Review of Business Performance for FY2021
Despite restrictions on sales activities targeting new clients, net
sales improved by 14.3% year on year thanks to an increase in thenumber of requests for online certification checks and solid maintenance sales attributable to the greater number of facilities at which
systems are installed.

4,816

4,214

Compositionof net sales bybusiness

14.3%
YoY

2.6

%

FY2020

FY2021Other businesses
Business Description
Dispensing pharmacy
SMO*SMO (Site Management Organization): An
organization that contracts with a specificmedical institution (a site for a clinical trial) andsupports the clinical trials exclusively at that site.

We support pharmaceutical development throughthe dispensing pharmacy
business and sophisticatedlaboratory tests.

Net sales (millions of yen)

1,498

1,445

Up

3.7%

Review of Business Performance for FY2021
The dispensing pharmacy business was affected by a revision of
medical service fees (reduction in drug prices), but net sales recorded an increase of 3.7% year on year, reflecting a rebound in thenumber of outpatient visits from last year’s decline caused by the
spread of COVID-19.

59

BML REPORT 2022

Compositionof net sales bybusiness

YoY

0.8

%

FY2020

Customer Satisfaction
Synergy
Social Responsibility

FY2021

BML REPORT 2022

60

Data Section

Financial Data
11-Year Summary of Financial Data
Financial data
FY2011FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Status of Profit and Loss (millions of yen)
Net sales

92,201

94,60899,047

104,404

109,024

111,243

113,502

117,129

120,732

138,571

186,067

Gross profit

33,48834,65536,44137,03838,85539,79940,46342,22742,25054,76886,951

Selling, general and administrative expenses

28,18828,01728,25330,06330,42630,47031,126

31,77732,487

34,83138,061

Operating income

5,299

6,637

8,188

6,974

8,429

9,329

9,337

10,4509,763

19,936

48,889Ordinary income

5,229

6,979

8,582

7,527

8,830

9,711

9,811

10,88010,21120,80351,077

Profit attributable to owners of parent

2,392

3,708

4,990

3,874

5,424

5,948

5,988

6,646

6,375

13,711

33,741

Net assets

49,69652,94357,65761,96865,20670,64776,222

81,12780,422

93,123

121,684

Total assets

79,71883,04788,52593,59599,394104,244

109,438

115,972

116,273

139,174

179,200

Equity47,75550,75455,18859,21362,12367,19972,52077,072

76,09988,377116,163

Cash flows from operating activities

8,092

9,792

10,931

11,495

11,97811,307

12,07912,507

12,771

19,57445,603

Cash flows from investing activities(3,765)(6,974)(1,762)(4,586)(3,234)(5,239)(3,538)(3,940)(5,213)(4,584)(7,297)

Cash flows from financing activities(6,081)(2,370)(2,622)(2,806)(2,916)(2,856)(2,983)(3,041)(8,784)(3,382)(9,828)Cash and cash equivalents at end of period

17,59018,102

24,64929,061

34,91038,122

43,67949,204

48,24659,85388,3602,248.93

2,389.83

2,598.60

2,787.90

2,924.69

1,581.60

1,703.27

1,809.34

1,873.36

2,174.27

2,909.29

Profit attributable to owners of parent per share

112.67174.65234.98182.45255.40140.03140.83156.07151.27337.44833.24

Annual dividends per share

40.00

40.00

50.00

60.00

60.00

35.00*

35.00

38.00

45.00

70.00

120.00Gross profit to net sales ratio

36.3

36.6

36.8

35.5

35.6

35.8

35.6

36.1

35.0

39.5

46.7

Operating income to sales ratio

5.7

7.0

8.3

6.7

7.7

8.4

8.2

8.9

8.1

14.4

26.3

Ordinary income to net sales ratio

5.7

7.4

8.7

7.2

8.1

8.7

8.6

9.3

8.5

15.0

27.5

ROE

5.1

7.5

9.4

6.8

8.9

9.2

8.6

8.9

8.3

16.7

33.0

ROA

3.2

4.6

5.8

4.3

5.6

5.9

5.6

5.9

5.5

10.7

21.2

Equity ratio

59.9

61.1

62.3

63.3

62.5

64.5

66.3

66.5

65.4

63.5

64.8

Dividend payout ratio

35.5

22.9

21.3

32.9

23.5

25.0

24.9

24.3

29.7

20.7

14.4

Financial Condition (millions of yen)

Cash Flow Position (millions of yen)

Per Share Information (yen)Net assets per share

Financial Indicators (%)*Effective September 1, 2016, the Company implemented a two-for-one split of its common stock.

61

BML REPORT 2022

BML REPORT 2022

62

Data Section

Consolidated Financial Statements

Consolidated balance sheets(millions of yen)

As of March 31,
2021(millions of yen)

As of March 31,
2022

AssetsLiabilities

Current assets

Current liabilities

As of March 31,
2022

Cash and deposits

63,47892,126

Notes and accounts payable–trade

20,305

21,672

Notes and accounts receivable–trade30,41036,405

Lease obligations

1,216

1,194

Merchandise and finished goods

324

467

Income taxes payable

5,756

12,600Work in process

691

749

Provision for bonuses

3,419

3,616

Raw materials and supplies

3,018

3,659

Accounts payable–other

7,307

10,150

Other current assets

1,106

3,737

Other current liabilities

2,402

2,787

(80)

(75)

Total current liabilities

40,40752,022

98,950137,070

2,037

2,136

246

214

Retirement benefit liability

2,866

2,616

Other non-current liabilities

494

525

Total non-current liabilities

5,644

5,494

46,051

57,516

Allowance for doubtful accounts
Total current assets

Non-current liabilities
Lease obligations
Provision for retirement benefits for directors (and other officers)

Non-current assets
Property, plant and equipment

Total liabilities

Buildings and structures, net

9,272

9,844

Land

13,553

13,342

Net assets

Leased assets, net

2,915

2,969

Shareholders’ equity

Others, net

4,944

6,180

Share capital

6,045

6,045

Total property, plant and equipment

30,68532,337

Capital surplus

6,705

6,646

Retained earnings

81,220110,458

Intangible assets
Other intangible assets

3,807

3,973

Treasury shares(6,651)(8,057)

Total intangible assets

3,807

3,973

Total shareholders’ equity

87,320115,094

Investments and other assets

Accumulated other comprehensive income

Investment securities

1,793

1,701

Valuation difference on available-for-sale securities

496

453

Deferred tax assets

2,375

2,566

Remeasurements of defined benefit plans

560

616

Other

1,646

1,635

Total accumulated other comprehensive income

1,057

1,069

Allowance for doubtful accounts

(83)

(83)

Share acquisition rights

44

35

Total investments and other assets

5,731

5,819

Non-controlling interests

4,701

5,485

40,224

42,130Total net assets

93,123

121,684

139,174

179,200

Total liabilities and net assets

139,174

179,200

Total non-current assets
Total assets

63

As of March 31,
2021

BML REPORT 2022

BML REPORT 2022

64

Data Section

Consolidated Financial Statements(millions of yen)

Fiscal Year Ended
March 31, 2021

Fiscal Year Ended
March 31, 2022

Net sales

138,571

186,067

Cost of sales

83,803

99,116Gross profit

54,76886,951

Selling, general and administrative expenses

34,831

Operating income

Fiscal Year Ended
March 31, 2021

Fiscal Year Ended
March 31, 2022

Profit before income taxes

21,00250,32838,061

Depreciation

5,365

5,801

19,936

48,889Impairment losses

2327

Loss on retirement of non-current assets

47

449

Rental income from real estate

6060

Subsidy income

391

Interest expenses

37

36

1,887

Other

484

343

(9,223)(5,996)

Total non-operating income

936

2,292

Decrease (increase) in inventories

(901)

(836)

Increase (decrease) in trade payables

4,542

1,365

Consolidated statements of income

Non-operating income

Non-operating expenses

Consolidated statements of cash flows
Cash flows from operating activities

Decrease (increase) in trade receivables

Interest expenses

37

36

Increase (decrease) in provision for bonuses

220

196

Cost of real estate lease revenue

23

44

Refund of subsidy—

Subsidy income(391)(1,887)

10

Other

7

13

Increase (decrease) in accrued consumption taxes

1,268

1,512

Total non-operating expenses

68

104

Other, net

(159)

1,510

20,80351,077

Sub-total

21,81152,807(37)(36)

Gain on sales of investment securities

252

6

Gain on extinguishment of tie-in shares—

Income taxes paid

(2,874)(9,220)

20

Other

1

1

Subsidies received

417

1,919

254

29

Other proceeds

258

132

19,57445,603

Payments into time deposits(5,462)(5,388)

Ordinary income
Extraordinary income

Total extraordinary income

Interest paid

Net cash provided by (used in) operating activities

Extraordinary losses
Loss on retirement of non-current assets

47

449

Impairment losses

2

327

Other

5

0

Total extraordinary losses

55

777

Proceeds from withdrawal of time deposits

4,907

5,248

Profit before income taxes

21,00250,328Purchases of property, plant and equipment(3,091)(5,694)

Income taxes–current

7,072

15,845Purchases of intangible assets(1,106)(1,391)

Income taxes–deferred

(354)

(195)

6,718

15,650168(71)

Total income taxes
Profit

14,284

34,678(4,584)(7,297)572

937

Cash flows from financing activities

13,711

33,741

Repayments of lease obligations(1,379)(1,378)

Fiscal Year Ended
March 31, 2021

Fiscal Year Ended
March 31, 2022

Dividends paid

(1,828)(3,455)

(144)

(151)

14,284

34,678Purchase of treasury shares(0)(4,818)Valuation difference on available-for-sale securities

(174)

(43)

Other, net

(30)

(23)

Remeasurements of defined benefit plans, net of tax

528

54

Net cash provided by (used in) financing activities(3,382)(9,828)

Total other comprehensive income

353

11

Net increase (decrease) in cash and cash equivalents

11,60628,477

14,63834,689Cash and cash equivalents at beginning of period

48,24659,853

14,05633,754

—

28

581

935

59,85388,360

Profit attributable to non-controlling interests
Profit attributable to owners of parent

Consolidated statements of comprehensive income
ProfitOther comprehensive income

Comprehensive income
BreakdownComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

65(millions of yen)

BML REPORT 2022

Cash flows from investing activities

Other, net
Net cash provided by (used in) investing activities

Dividends paid to non-controlling interests

Increase in cash and cash equivalents resulting from merger with unconsolidated subsidiaries
Cash and cash equivalents at end of period

BML REPORT 2022

66

Data Section

Corporate Summary and Stock Information
Corporate Summary (as of March 31, 2022)

Stock Information (as of March 31, 2022)

Corporate Information

Major Shareholders
Number ofshares held

Shareholder nameTrade name

BML, INC.

Place of Head
Office5-21-3 Sendagaya, Shibuya-ku,
Tokyo, Japan
Tel. +81-3-3350-0111 (main)
http://www.bml.co.jp/eng/index.
html

BML General
Laboratory1361-1 Matoba, Kawagoe-shi,
Saitama, Japan
Tel: +81-49-232-3131 (main)

Date Founded

July 1955

Share capital

6,045 million yen

Shareholding
ratio (%)

(1,000 shares)

BML Planning, Inc.
The Master Trust Bank ofJapan, Ltd. (trust account)
Kensuke Kondo
Otsuka Pharmaceutical Co.,Ltd.
Custody Bank of Japan,
Ltd. (trust account)

Number of
Employees

4,290 (consolidated basis)

Business
Description

Laboratory testing services andrelated services

10,154

25.43

3,747

9.38

3,168

7.93

1,621

4.06

1,122

2.81

*1. Although the Company holds 3,586 thousand shares of treasury shares, it has been excluded from the above list of major shareholders.
2. The shares held by The Master Trust Bank of Japan, Ltd. and Custody Bank of Japan, Ltd. are all related to trust operations.

Shareholder Distribution
78.89%
4.88%
10 trading units or more
6.38%
50 trading units or more
1.07%
100 trading units or more
1.34%
500 trading units or more
0.42%
1,000 trading units or more
0.49%
5,000 trading units or more
0.24%
Treasury shares
0.02%
Less than 1 trading unit
6.27%
1 trading unit or more

5 trading units or moreGroup Companies

15.70%
1.23%
Other domestic companies
31.71%
Individuals and others
21.15%
Foreign companies and others 21.97%
Treasury shares
8.24%
Financial institutions

Financial service providers

By type ofshareholder

BML Medical Works, Inc.
Nikken Igaku, Inc.

Daiichi Kishimoto Clinical Laboratories, Inc.

The Tohkai Cytopathology InstituteMorioka Clinical Laboratories, Inc.

OPL, Inc.

Matsudo Medical Laboratories, Inc.

Stock price chart

Okayama Medicine Laboratories, Inc.
Q-syu Open Laboratories, Inc.
QOL Central Laboratories, Inc.
Kyodo Igaku Laboratories, Inc.
Lintec, Inc.

By number ofunits held(number ofshareholders)

PCL Japan, Inc.

Volume (shares)

Stock price (yen)6,000,000

6,000

4,000,000

4,000

2,000,000

2,000Japan Clinical Service, Inc.
BML Life Science Holdings, Inc.
Allegro, Inc.

Labotech, Inc.
Biken, Inc.

67

BML REPORT 2022

BML Food Science Solutions, Inc.
Ehime Medical Laboratories, Inc.

0

2019
4
5

6

7

8

9

10

11

12

2020
1
2

3

4

5

6

7

8

9

10

11

12

2021
1
2

3

4

5

6

7

8

9

10

11

12

2022
1
2

0
3 (Year/Month)

BML REPORT 2022

68

BML, INC.
Head Office
5-21-3 Sendagaya, Shibuya-ku, Tokyo 151-0051, Japan
Tel. +81-3-3350-0111 (main)
BML General Laboratory1361-1 Matoba, Kawagoe City, Saitama 350-1101, Japan
Tel. +81-49-232-3131 (main)
Website: http://www.bml.co.jp/eng/index.html

This report was printed on eco-friendly FSCR-certified
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