BML REPORT 2023 Integrated Report

BML REPORT
2023

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: https://www.bml.co.jp/eng/

This report was printed
on eco-friendly FSC®certified paper using
vegetable oil ink.

BML, INC.

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

BML Policy

Stock Information (as of March 31, 2023)

Corporate Mission

Major Shareholders

Dedication to creating a healthy and cultured society.
Shareholder name

Number ofshares held
(1,000 shares)

BML Planning, Inc.

Strategy by Business

Data Section

Shareholding
ratio (%)

10,154

26.02

3,829

9.81

3,169

8.12

BML is committed to creating
The Master Trust Bank ofa culturally rich society by improving

Japan, Ltd.

medical services and health through(trust account)the latest technologies, systems,
Kensuke Kondo

Contents

and service networks based on
our extensive clinical laboratory

Management
Objectives

Corporate
Commitments

Fulfilling expectations through creativetechnology and quality service.

1
2

SSBTC CLIENT OMNIBUS

experience.

Pride
Having conviction in business andacting responsibly

Commitment
Providing top service through strong commitment
and sincerity

Meeting client
needs

Ensuring trust
in BML throughsuperior
expertise andquality services

3

1,107
2.83
About the BML Group
BML’s Sustainability
ACCOUNT
01 BML Policy
39 Message from the Vice President
03
HistoryofBML
41 Sustainability Management
Shige Kondo
1,080
2.76
05 Value Creation Process (Business Model)
43 Environment*1. Although
the Companyofholds
has Society
been excluded from the above list of major shareholders.
07 Strengths
BML3,594 thousand shares of treasury shares, it49
2. The shares held by The Master Trust Bank of Japan, Ltd. are all related to trust operations.
09 Business Domains (At a Glance)
55 Dialogue between Outside Directors
11 Financial and Non-financial Highlights
59 Corporate Governance

Shareholder Distribution
Growth Strategy for Value Creation
13
19
20
25
29
33

Challenge
Meeting the challenge of ever higher objectives
through total creativity

Progress

Developing
a creative,
energeticorganization

Strategy by BusinessMessage from the President
Financial institutions
15.88%
Long-term Vision
Financialserviceproviders
0.59%
Medium-Term Management Plan
Other domestic companies
28.06%DX
By Initiatives
type ofshareholder
Individuals
and others
Message from the Financial
Officer
21.77%
Materiality
Foreign companies and others 25.27%
Treasury shares

Keeping an eye on social progress and improving
and refining sensitivity

77.56%

0.42%
0.17%
Treasury shares
0.01%
Less than 1 trading unit 11.15%
5,000 trading units or more

8.43% Data Section

81 Financial Data
83 Consolidated Financial Statements
87 Corporate Summary and Stock Information

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

1 trading unit or more

69 Business Overview of
5 trading units or more
3.43%
Clinical Testing Business10 trading units or more
5.02%
73 Business
Overview of
By number
50 trading units or more
0.82%
Food ofHygieneBusiness
units held
100 trading units or more 1.08%
77 Business
Overviewof(numberof
500 trading units or more 0.34%
MedicalInformatics Businessshareholders)
1,000 trading units or more

Stock Price Chart
Volume (shares)

Stock price (yen)6,000,000

Information disclosure system
Financial information

4,000,000Guidelines
ReferenceNon-financial information

Earnings reports

Corporate governance

Annual securities reports

reports, etc.

Reports to shareholders

Editorial Policy

Period Covered

International Integrated Reporting Framework of

The BML Group has started publishing an integrated

FY20222,000,000
the IFRSFoundation

report in order to facilitate stakeholders’(April 1, 2022 to March 31, 2023)

The Guidance for Collaborative Value Creation

understanding of our efforts toward sustainable

Please note that some reports before

2.0 of the Ministry of Economy, Trade andgrowth. This report intends to facilitate a

and after FY2022 are included.

Industry

0

2020
2021
5 6 Force
10 11 12 1 2
4 Task7 8 on9Climate-related
Final Report of the

BML REPORT 2023

BML Website:

https://www.bml.co.jp/eng/

6,000

Financial Disclosures (TCFD)

comprehensive understanding
2022of the social and3 economic
8 created
6 7 8
9 10 11 by
4 5 6 7value
12 the
1 BML
2 3 Group
4 5 through

4,000

2023
5 6 7 89 10 Organizations
11 12 1 2 3 4 Covered

2,000

0

9 (Year/Month)

the reporting of management strategies and activities
related to business and ESG. The report includes

All domestic group companies

matters of particular importance to the management

including BML, Inc.

of the BML Group from among the financial andnon-financial information disclosed on the corporatewebsite.

1

BML REPORT 2023

BMLBMLREPORT
20232023 2 88
REPORT

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

History of BML
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
clinical testing center that provides a full range of services, covering highly specialized tests andinvestigative 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.

2000s and onward
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 business

Exceeded
Exceeded¥100.0¥100.0
billionbillion

1980s to 1990s

Establishment of a central laboratory
Launch and expansion of thenationwide laboratory network concept

1950s to 1970s
Commenced launch of a nation-wide
network of sales offices
Building a system network

November 1984
Completed construction of thelaboratory building at BML General
Laboratory

FoundedFoundedthe Company
the Company
1955

Business Activities

Management“1960”“1960”
0”970”

3

Exceeded
Exceeded¥10.0 billion¥10.0 billion

1980

1955

“1955” “1955”“1960”“1970”“1960”“1970”“1970” “1970”“1980”“1980”

1980

June 1987
Completed construction of the officecenter at BML General Laboratory

Commenced
Commenced
operations
operations
at BMLat BML
GeneralGeneralLaboratory
Laboratory
1985

1985

1990

The current BML General
Laboratory

Listed Listed
its stock
itson
stock
the onFirst
theSection
First Sectionof the Tokyoof the Stock
Tokyo Exchange
Stock Exchange

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

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

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

TrendsTrends
in net sales
in net sales
2010

2010

“2010”“2010”“2020”“2010”“2010” “2020”

2020 2023
2020 2023“2020”“2020”

1955

Founded Sogo Blood Bank, Inc.

1985

Launched operations at BML General Laboratory

2001

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

1966

Shifted from blood bank business to clinicaltesting business

1989

The corporate name was changed to BML, Inc.

2002

Clinical Testing Division of Otsuka Pharmaceutical Co., Ltd. was assigned

1976

The corporate name was changed to Sogo
Biomedical Laboratory (abbreviated name BML[BIO MEDICAL LABORATORIES])

1990

Renewed logo mark2005

BML General Laboratory acquired ISO15189 accreditation (international standard for clinical laboratories)

1993

Head office was moved to Sendagaya, Shibuyaku, Tokyo, where the Company was founded2010

Established a joint laboratory for international clinical trials in collaboration with U.S.-based Covance Inc. (currently Labcorp).

2014

Kensuke Kondo appointed President (current President)

2022

Transitioned to the Prime Market of the Tokyo Stock Exchange following the Exchange’s reorganization of market segments

2000

Released “Medical Station (MS),” an electronic patient chart system

2003

Acquired shares of EAC Corporation (food and environmental testing) (wholly owned by BML)

2006

The “New Symphony Chemistry,” a new automated testing line, began operations

2008

New Frontier System (automated dispensing system) began operations

1971

Registered as a hygiene laboratory

1981

1975

Established the Hokuriku Branch Office inToyama City as the first branch officeCommenced development of regional
laboratories at main offices

1984

Net sales exceeded ¥10.0 billion

1979

Introduced IBM S34 and brought 27 branch
offices online

1987

Introduced the IBM 3090-150EL, a mainframe
computer, and established a nationwide sales network

1988

Established regional laboratories in 10 cities
nationwide

2011

Released the “QUALIS” electronic patient chart system

2015

Net sales exceeded ¥100.0 billion

1991

The “Frontier System,” an automated specimen
receiving, sorting, dispensing system, waslaunched

2018

Established 30 serum separation laboratories nationwide

2019

Achieved operating income of ¥10.0 billion“Symphony Chemistry” and “Symphony
Hematology,” automated laboratory test line
systems for biochemical and hematological tests,
began operations

2020

Implemented responses to COVID-19

2022

Released the “Qualis Cloud,” a cloud-based electronic patient chart system

BML REPORT 2023

1995

BML REPORT 2023

4

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Value Creation Process (Business Model)
The BML Group’s Policy is “Dedication to creating a healthy and cultured society. ” We will continue to enhancevalue 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.

Important
ImportantissuesissuesBusiness
Business
activity
activity

Input
Input

(materiality)(materiality)

ClimateClimatechangechange

Manufacturing
Manufacturing
capitalcapital

Unique automatedUnique automatedtesting system
testing system
More thanMore
100thanbusiness
100 businessoffices nationwide
offices nationwide
116 collection
116 collection
and delivery
and centersdelivery centers
Employment
Employment
and andNationwide
laboratorylaboratory
network of
network
82 laboratoriesof 82 laboratories
development
developmentof humanof human Nationwide
31
serum
31
separation
serum
separationlaboratories
laboratories
resources
resources
In-houseIn-houseindustrialindustrial
waste incineration
waste incineration
facilities facilities

EnergyEnergy
management
management

Strengths
Strengthsof theofBML
the BML
Group
Group

medicalmedical
and andtesting testing
industryindustry(FY2022) (FY2022)

Corporate
Corporate
governancegovernance

Human
Human
capitalcapital
Approximately
Approximately
1,800 sales
1,800
staffsales staff
Approximately
Approximately
2,300 collection
2,300 collection
and delivery
andstaffdelivery staff
Approximately
Approximately
2,200 clinical2,200laboratory
clinical laboratory
technicians
technicians

QualityQuality
improvement
improvement

ClinicalClinicaltestingtesting
businessbusiness

Social issues
Social issues(FY2022)(FY2022)

ClinicalClinicaltesting testing
ClinicalClinical
trial testingtrial testing

Laboratory
Laboratory
network
network
SalesSales
network
network

Management
Managementbase base
Human
Human
resource
resource
development
development
and andutilization
utilization

Information
Information
security
security

Financial
Financial
capitalcapitalSound financial
Sound financial
position position
Equityratio:
Equity72.5%
ratio:
72.5%
Diversity,
Diversity,
equity,equity,and andinclusion
inclusion

Respect
Respect
for forhumanhumanrights rights
Enhancing
Enhancingsales sales
capabilities
capabilities

BML REPORT 2023

Development,
Development,
sales andsales andmaintenancemaintenanceservices
servicesforforelectronic
electronic
patient patient
chart system
chart system

OtherOther
businesses
businesses(FY2022) (FY2022)

NaturalNaturalcapitalcapital(BML General(BML Laboratory)
General Laboratory)
ElectricityElectricity
consumption:
consumption:
approximately
approximately
22.50 million
22.50kwh
million kwh
Spitz tubeSpitz
usage:tube
approximately
usage: approximately
2.5 million2.5Spitz
milliontubesSpitz tubes(FY2022) (FY2022)

5

Food consulting
Food consulting
Food andFoodenvironmental
and environmental
testing testing
Intestinal
Intestinalbacteriabacteria
testing testing

MedicalMedical
informatics
informatics
businessbusiness

SystemSystemnetwork
network

15.0% 15.0%Operating Operating
income ratio:
incomeratio:
StableStable
and continuousand continuous
Realization
shareholder
shareholder
returns
returnsRealization

Building good
Building
relationships
good relationships
with medical
withinstitutions
medical institutions
Joint research
Jointthroughresearchindustry-academia
through industry-academia
collaboration
collaboration(FY2022) (FY2022)

Operating Operating
income: ¥23,936
income: ¥23,936
million million

Food hygiene
Food hygiene
businessbusiness

SocialSocialand relationaland relational
capitalcapital

Contribution
Contribution
totomedicalmedicalcare care

Economic
Economic
value value
Revenue
Revenue
growthgrowth(FY2022) (FY2022)

DX (digitalDX (digitaltransformation)transformation)

Outcome
Outcome

Net sales: Net¥159,462
sales: ¥159,462
million million(FY2022) (FY2022)
Employeehealthhealthand and
Changes
Changesinin Employee
safety safety
external
externalIntellectualIntellectual
capitalcapitalenvironment
environment
OperationOperation
know-howknow-howCompliance
Compliancewith with
4,000
thantest
4,000
itemstest items
laws andlaws
regulations
and regulations More thanMore

Trends Trends
in the in the

OutputOutputof the of thelong-term
long-term
visionvision

SocialSocial
value value
Reduction
Reductionof patientof patientburden burden
and anxiety
and anxiety
bybyprovidingproviding
prompt prompt
testing services
testing services

Contribution
Contribution
to SDGs
to SDGs

Ensuring
Ensuring
accuracy
accuracyofoftesting andtesting
shortening
and shortening
treatment
treatment
lead timelead timethroughthrougha carefula carefulcollection
collection
and delivery
and delivery
system system
Improved
Improved
efficiency
efficiency
and andreducedreduced
costs ofcosts
medicalof medicalcare care
Food safety
Foodandsafetysecurityand security

Corporate
Corporate
PolicyPolicyDispensing
Dispensing
pharmacies
pharmacies
SMO SMO

Workplace
Workplacewhere diverse
where diverse
human humanresources
resourcescancanplay anplay
activeanroleactive role

BML REPORT 2023

6

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Strengths of BML
Three Networks Constituting Strengths of BML
BML has built up three strengths through the clinical testing business since its establishment. These strengths also

support our business in non-insurance fields.

Sales network

Laboratory network

We provide detailed support, from specimen consignment to

All regional laboratories provide prompt and uniform testing services

information services, through the industry’s largest sales networkin cooperation with BML General Laboratory

BML has a network of more than 100 business offices throughout Japan toprovide prompt and accurate services. In addition, approximately 2,300
dedicated collection and delivery staff members ensure that requested
specimens are promptly delivered to nearby laboratories, preventingchanges in data over time and ensuring thorough quality and accuracy
control. We aim to become an even better partner for our customers byusing our foresight and outstanding drive to take action, throughcollaboration with laboratories, systems, and R&D to create new forms ofservice.

In order to provide the top-level testing technology of the BML General
Laboratory to as many customers as possible, we have formed a laboratory
network in cooperation with Group companies (regional laboratories).
Through the standardization of work and 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, by applying the knowhow we have developed in clinical testing to food testing.

Flow of BML testingSpecimen flow

Customers(medical institutions)

Specimens

Emergency laboratories

Specimens(74 sites nationwide)
Reports

Emergency
testingSpecialized
testing

Sophisticatedspecialized
testing

Self-contained regional laboratories

Specimens(seven core laboratories)
Transmission oftest results data

Emergency
testingSpecialized
testing

Sophisticatedspecialized
testing

Transmission oftest results data

BML General Laboratory
Emergency
testingSpecialized
testing

Sophisticatedspecialized
testing

Data flow

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

7

BML REPORT 2023

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

BML REPORT 2023

8

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Business Domains (At a Glance)
Ratio of net sales by business

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

Food hygiene
business
3.0%

Composition ratio of
the clinical testing business

Medical informatics business
3.4%
Other businesses
1.0%

Others30.6%

Biochemical testing
34.4%

Business Description
Clinical testing
Clinical trials testing

Food Hygiene Business

Pathologicaltesting
6.1%

P.73
Clinical testing business
92.6%

We provide comprehensive sanitation control in
the food environment and support the health of
consumers and the safety of food.
Business Description
Food consulting
Food sanitation testing and environmental testing

Microbiological testing
4.3%

Hematologicaltesting
Immunological
7.2%
testing
17.4%

Numbers of offices and employees
Group companies

Intestinal bacteria testing

Business offices

19Collection and delivery centers

More than

100

116

82

laboratories

Medical Informatics BusinessWe are engaged in the sales and maintenance of“Qualis Cloud” and “Qualis,” which are electronic
patient chart systems for clinics, and “Medical
Station.”Laboratory network

Group employees

4,415Business Description
Electronic patient chart- Development and sales- Maintenance services

Ratio by gender44.6 55.4%%

Daiichi Kishimoto Clinical Laboratories, Inc.

Women

Men
Morioka Clinical Laboratories, Inc.

Other businesses
We support pharmaceutical development throughthe dispensing pharmacy business andsophisticated laboratory tests.
Business Description
Dispensing pharmacy
SMO

Q-syu Open Laboratories, Inc.
QOL Central Laboratories, Inc.

BML REPORT 2023

Matsudo Medical Laboratories, Inc.

Nikken Igaku, Inc.

PCL Japan, Inc.

OPL, Inc.

Japan Clinical Service, Inc.
BML Life Science Holdings, Inc.

Kyodo Igaku Laboratories, Inc.

Allegro, Inc.

Lintec, Inc.

BML Food Science Solutions, Inc.

Labotech, Inc.
Biken, Inc.

9BML Medical Works, Inc.

The Tohkai Cytopathology InstituteOkayama Medicine Laboratories, Inc.

BML REPORT 2023

10

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Financial and Non-financial Highlights
Financial Highlights

Non-financial Highlights

Net sales

Operating income

Female manager ratio

Childcare leave utilization rate

¥159,462 million¥23,936 million

11.2

86.9

Operating income (millions of yen)

Net sales (millions of yen)

Operating income ratio (%)

Female manager ratio (%)

159,462
120,732
19,936
10,450Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

Mar. 201923,936
15.0

14.4

8.3

9.3

9.0

9.3

11.2

Mar. 2022

Mar. 2023 (Fiscal year ended)

Mar. 2019

58.2
49.0

44.4
0

Mar. 2021

24

22

8.1
Mar. 2020

32

19

25

9,763

8.9
Mar. 2020

86.9

26.3

138,571
117,129

%

Men
Women
Childcare leave utilization rate (%)

48,889186,067

Mar. 2019%

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

Mar. 2019

21
13

36.1

3

1

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

Ordinary income

Profit attributable to owners of parent

Female employee ratio

Average years of employment¥24,182 million¥15,578 million

43.1

12.7years (men), 9.8 years (women)

Ordinary income (millions of yen)

Ordinary income ratio (%)

Profit (millions of yen)%Men (years)

Female employee ratio (%)

Net profit ratio (%)

33,74114.1

13.8

51,07715.2

15.0
10,88010,211
8.5

9.3
Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

ROA / ROE

8.9 /13.1%

ROA (%)

9.9

24,18220,803

43.1

18.1

27.5

%

5.7

5.3

6,646

6,375

Mar. 2019

Mar. 2020

15,578
9.8

38.8

39.2

Mar. 2023 (Fiscal year ended)

Mar. 2019

Mar. 2020

13.7

13.3

12.7

9.8

9.8

9.9

9.9

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

9.8

40.8

13,711Mar. 2021

Mar. 2022

Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

Mar. 2023 (Fiscal year ended)

Capital expenditures/depreciation

Paid leave utilization rate

Greenhouse gas emissions¥9,738 million/¥6,087million

61.9

16,337

Capital expenditures (millions of yen)

ROE (%)

40.1

Women (years)

Depreciation (millions of yen)

%

t-CO2

Greenhouse gas emissions (t-CO2)

Paid leave utilization rate (%)

9,738
33.0

7,968

5,310
16.7
8.9

21.2

6,041
5,218
4,889

5,639

6,087
50.4

13.1

54.4

57.2

58.1

Mar. 2021

Mar. 2022

15,47815,934

16,391

16,337Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

61.9

8.3
10.7

11

4,870

5,630

15,5825.9

5.5

Mar. 2019

Mar. 2020

BML REPORT 2023

Mar. 2021

8.9
Mar. 2022

Mar. 2023 (Fiscal year ended)

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023 (Fiscal year ended)

Mar. 2019

Mar. 2020

Mar. 2023 (Fiscal year ended)

BML REPORT 2023

12

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Message from the President
Looking toward the new fiscal year
A year of headwinds due to increased costs

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

Kensuke Kondo,
President andRepresentative Director

13

BML REPORT 2023

Looking back on the past year, the clinical testing industry
has been significantly affected by factors such as higher
energy prices and increases in import costs due to theweaker yen since war broke out in Ukraine in February
2022. In addition to the increased costs of transporting
specimens and operating testing equipment caused byhigher energy prices, given that most of our testing
reagents and containers are imported, increased importcosts have led directly to an increase in cost of sales.
On the other hand, sales prices of clinical testing,which accounts for the majority of BML Group’s revenues,
are set on the basis of insurance points, which are revised
every two years. This means that these cost increases
cannot be directly passed on to sales prices, making
them more difficult to resolve.
In response to these headwinds, BML will addressthese issues by promoting standardization andautomation of testing processes at all laboratories
nationwide, as an activity for “enhancing the laboratory
network,” and digital transformation (DX) using a digital
reporting system (hereinafter, DRS) in “renovatingcollection and delivery processes,” two of the Basic
Strategic Frameworks that we have pursued to date in
the Eighth Medium-Term Management Plan.

Focusing on non-COVID-19-related tests evenamid the pandemic
During the pandemic, the clinical testing industry was
required to increase its capacity for COVID-19-related
tests, such as PCR tests and antigen tests, which served
as the foundation of measures to curb the exponential
growth of COVID-19 cases. PCR testing for COVID-19
was given higher insurance points than PCR tests forordinary infectious deceases, and as a result,reimbursement of medical service fees for clinical testing
increased by about 20% from FY2019, when the
pandemic had virtually no impact. For this reason, theclinical testing industry, which includes BML, conducted
COVID-19-related tests, and achieved strong
performances across the board.
However, demand for PCR tests for COVID-19 has
rapidly declined since COVID-19 was downgraded toa Class 5 infectious disease from equivalent to Class 2 in
May 2023 due to the end of the pandemic. In light ofthese circumstances, market size is predicted toeventually shrink to its pre-COVID-19 state. Given theseexternal factors, it seems inevitable that the clinical testing
industry will face a significant decline in net sales andprofit this fiscal year.

Under such circumstances, during the pandemic,
BML engaged in business with the aim of achieving a
3.8% increase per annum in sales of non-COVID-19related clinical tests compared with FY2019, which was
not affected by the pandemic, and we have largely
achieved those goals. This shows that we have steadily
increased our substantive market share in the clinicaltesting industry even during the pandemic, and I believethat this will become a competitive strength in terms of
future business performance.

Adapting to the challenges of healthcare
Contribution to regional medical cooperation
As the population continues to age, close attention is
being paid to the key challenge of how finite medical
resources can be supplied efficiently. Regional medical
cooperation is playing an extremely important role as asolution to this challenge.
Regional medical cooperation is an initiative forcontinuing treatment at regional clinics and convalescenceat home through the cooperation of hospitals, regional
clinics, family doctors, and clinics that support home
support, so that patients can receive medical treatment
seamlessly. This initiative will enable the provision of anenvironment in which patients can continue to live theireveryday lives in the way that suits them.
It is my belief that the clinical testing industry can help
to achieve this goal by conducting testing based on
uniform standards and establishing frameworks in which
the numerical values of testing data will not change nomatter which medical institution the testing is performed.
With its network covering almost every part of Japan,
BLM will strive to contribute to the realization of regional
medical cooperation by providing each region withstandardized testing that enables us to report the same
result, no matter where the same specimen is tested.

Introduction of high-performance tests
While Japan’s universal healthcare system has achieved
the highest level of insured medical care, the Japanese
medical community faces the need to reduce healthcare
costs in response to the depletion of financial resources
due to soaring healthcare costs. The measures taken by
the Japanese government to date in the field of clinicaltesting have been to reduce the number of insurance
points for ordinary clinical tests, while increasing thenumber of points for high-performance tests connected
to companion diagnostics related to personalized
medicine. This action has been guided by the belief that

BML REPORT 2023

14

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Message from the President
testing a patient’s genes will lead to a reduction in medical
costs by reducing the scope of patients suitable for
expensive treatments.
These high-performance tests are increasing,particularly in the area of cancer, due to advances in thedevelopment of molecularly targeted drugs*. I believe thatthese measures will continue to be essential initiatives forthe clinical testing industry due to the social need toprovide the best treatment for patients.
For the very reason that BML is a company with anationwide network, we will actively work to introduce
these tests so that we can provide them to all citizens.
*Drugs that act only on specific molecules

Online medical care
In 2022, online medical care and drug administration
guidance became possible. This will reduce the waitingtime for patients and allow them to receive medical careeasily even when thy have difficulty attending a clinic inperson. The impact of the COVID-19 pandemic is
expected to assist with the spread of online medical care.
Furthermore, in light of future demographic trends suchas depopulation in regional areas and overconcentration
in metropolitan areas, another advantage of online
medical care is that it will contribute to the improvementof healthcare accessibility. We surmise, therefore, thatonline medical care could become the foundation of
medical infrastructure in the near future.
The actual popularization of online medical care faces
a number of issues, including security concerns andthe suppression of reimbursement for medical service
fees. However, as a manufacturer and distributor ofelectronic patient chart systems, BML will promoteseamless collaboration with online medical care systems
by actively taking measures such as adding functions thatare compatible with online medical care to our electronic
patient chart systems.

Long-term strategy
Developing growth drivers in
non-insurance fields
If BML is to achieve the expansion of its business,
we must develop growth drivers in non-insurance areas
as new businesses. In this context, BML is currently
focusing on four business fields: medical informatics,
medical check-ups, clinical trials, and food hygiene.
In medical informatics, we have Medical Station, Qualis,and Qualis Cloud in our lineup of electronic patient chart
products. Furthermore, we are also currently working on
the enhancement of functions of the clinical testing

15

BML REPORT 2023

system B-Liner. Although the clinical testing system is stillin the evaluation stage and a decision has not yet been
made on its commercialization, we believe that the inhouse production of peripheral systems for clinicallaboratories will help us to improve the efficiency of theoperational aspects of clinical testing.
In the area of 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 anddelivery networks. In addition, we believe that we canenhance our competitiveness by promoting further
standardization going forward, including achieving uniform
accuracy among laboratories, and by improving risk
assessment testing related to preventive medicine.
In clinical trials, we have formed a strategic partnershipwith Labcorp to provide joint clinical trial services forinternational 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 the food hygiene, Group company, BML Food
Science Solutions, has the capacity to provide
comprehensive food hygiene-related services in a broader
range of areas than our competitors. For this reason,
we will strive for the further expansion of our business bypromoting our ability to provide comprehensive consulting
functions for food quality controls.

Progress of the Eighth Medium-Term
Management Plan
Positioning of the Eighth Medium-Term
Management Plan in the Group Vision
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 in FY2015 andcontinued through the Seventh Medium-Term
Management Plan, before culminating in the Eighth
Medium-Term Management Plan. This nine-year plan sets
the common target of realizing the Group Vision “tobecome the most trusted choice in the medical world”
and aims to step up our commitment to quality andservices as the foundation of this vision.
Initially, we considered setting separate targets for eachof the three-year periods and achieving them one at atime. However, we decided that the foundation of theCompany’s growth all came down to high quality andservice. Upon reflection of the actual state of theCompany’s quality and services provided at each of therelevant points in time, we determined that it would takenearly ten years to realize these targets. Nevertheless, weconsidered that the plan would become monotonous if itwere to be implemented over a single nine-year period
and that such a state would be an obstacle to its
realization. We therefore decided to divide the nine yearsof the common Group Vision into three-year periods, andset out a nine-year plan consisting of the Period for
Solidifying Foundation (Sixth Medium-Term ManagementPlan), Period for Growth (Seventh Medium-Term
Management Plan), and Period for Leaping Forward(Eighth Medium-Term Management Plan), as the vision of
our three-step ramp-up.
Although we have just completed the eighth year of thenine-year plan, we believe that the method of evaluating atheme by dividing it into three-year periods was appropriate
for increasing the certainty of achieving our targets.
There are three reasons for this. First, this method has
allowed us to set an appropriate response period
according to the scale of the issue. Second, it hasenabled us to monitor progress at the end of each threeyear period and make appropriate revisions. Third,
working on the same theme increases our sensitivity tocustomer reactions to the issues we have addressed,
which in turn has created a favorable environment for
more efficient rotation of the PDCA cycle. In turn, theexperience of success that this has brought has spurred
our ambition to take on further challenges.

Three missions and three internal action policies
Unlike the Sixth and Seventh Medium-Term Management
Plans, the Eighth Medium-Term Management Plan is basedon the three missions of customer satisfaction, synergy, andsocial responsibility and the three internal action policies toachieve these missions of “Consensus: consensus of all
employees,” “Soundness: soundness of all operations,” and“Standardization: pursuit of standardization.” We refer tothese action policies by the abbreviation, “CSS.”
The missions and the internal action policies are related
to the targets to be achieved and the specific actions to
be taken to achieve those targets, respectively. Therefore,
BML Group employees always perform their duties withthe 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 theinformation available. This allows us to guide us toward
the best possible solution at that point in time. In addition,
as all relevant parties are fully aware of the process, they
can take appropriate action without any
misunderstandings, which has the advantage of enabling
us to overcome problems swiftly. I consciously makeefforts to summarize previous discussions and explain
new issues, even partway through, in order to keep
everyone engaged in the actual meeting and to lead tofurther discussions.
“Soundness: soundness of all operations” means taking
action while asking ourselves what soundness is in orderto realize BML’s Policy of “Dedication to creating a healthy
and cultured society.” We believe that by doing so, BML,
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 limited to thescope of testing. BML has 82 laboratories nationwide,
and there are also several hundred laboratories that
perform testing in medical institutions. If standardization is
promoted in these laboratories, it will enable the sharingof test information among laboratories, more accurate
testing, and more precise support for medical practices.
However, we have sensed that achieving standardizationof testing operations alone is not sufficient to gain realtrust. For this reason, we are now working to introduce
standardization in all of our operations, including testing.

Standardization and DX to enhance laboratories,
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 digitaltransformation (DX): enhancing the laboratory network,
enhancing sales capabilities, and renovating collection
and delivery processes.
In “enhancing the laboratory network,” we will makeefforts to standardize testing processes and enhance test

BML REPORT 2023

16

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Message from the President
items in our nationwide laboratories. At the same time,
we will commence preparations for the restructuring of
the BML General Laboratory, which will serve as a pillar of
the next-generation laboratory concept. In addition to thetesting procedures based on the standard operatingprocedures, we plan to establish a system that can
provide highly accurate testing under any circumstancesby standardizing accuracy controls and specimen
identification methods in laboratories.
Documentation of each work method is essential forsuch standardization, and we believe that not only canmore efficient methods be devised by examining these
documents, but also that functionality can be enhancedby establishing 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 eachlaboratory, including the restructuring of the BML General
Laboratory, based on indicators such as clinical needs,
urgency, and profitability. Although BML’s area ofexpertise to date has been automation, going forward,
we will establish a more agile laboratory network throughthese standardizations and DX.
Among our group companies, we have expanded thelaboratories of pathological and cytological testing center,
PCL Japan. PCL’s Fukuoka Laboratory has expanded its
processing capacity by 120%, while its Osaka Laboratory
has achieved a 260% increase. PCL is also considering

consolidating its various laboratories scattered throughout
the Tokyo metropolitan area, and it has recently madea final decision on a property where the consolidated
facilities will be located.
In terms of next-generation support, we are proceedingwith the start of construction of a new building in Matoba
in Kawagoe City. Currently, we are considering what
testing equipment and systems will be installed after
construction is completed.
For enhancing sales capabilities, we will implement
coordinated marketing in the BML Group by using themethods of DX to expand and deepen our customer
base, and we will work to develop sales throughcollaborations between headquarters, branches, andbranch offices. Specifically, in the medical check-up
business, we are working to strengthen our solutions
capabilities, such as enhancing options and expanding
sales of cancer-related testing.
For renovating collection and delivery processes, wewill promote DRS, which will streamline the collection anddelivery process, mainly by utilizing DX, to improve
convenience and reduce workload. DRS is a generic term
for functions to improve the efficiency of specimen
collection and delivery, including the conversion of
specimen labels used from the time of specimen
collection to bar-coded labels, which will reduce the riskof specimen mix-ups and establish speedier operations
compared with conventional specimen labels.
Furthermore, we will work to establish temperature
controls in pursuit of data quality.

Continuing to pursue the improvementof quality and services and rebuilding
the testing infrastructure under theNinth Medium-Term Management Plan
In our next Medium-Term Management Plan, which starts
in FY2024, we will continue our pursuit of quality andservices. We will also work to realize the rebuilding of our
testing infrastructure with the new wings of the BML
General Laboratory, which are currently underconstruction and will become the base for further
expansion of business, and the expanded consolidationof PCL’s Tokyo Testing Center, which conducts
pathological testing.
In the pursuit of quality and services, we willconcentrate on those parts of the Eighth Medium-Term
Management Plan, our “Period for Leaping Forward,” thatwere not achieved due to the delays in the progress of
the Plan because it coincided with our responses to the
COVID-19 pandemic. In particular, through conferences
attended by all business units for discussions based onincident reports, we will analyze the substantive causes
and implement countermeasures, and if the issue issomething that requires horizontal roll-out ofcountermeasures, we will do so immediately. In this way,
we will place emphasis on making improvements. In our
activities under our Medium-term Management Plans todate, my impression is that we are finally hearing many
opinions come out of the individual business units, and I
believe that we will be able to have even more effective
discussions than before. Because we will be able toextend such substantive discussions beyond clinicaltesting to the manufacture and distribution of electronic
patient chart systems, I believe that this will lead to therealization of the effective provision of quality and services
in both business areas.
In the rebuilding of our testing infrastructure, our main
objectives are to ensure testing capacity that will be able
to accommodate testing ten years from now, as estimatedby the speed of growth to date, and to secure frameworks
that will enable us to conduct testing even when facedwith disasters such as earthquakes and flooding.
Given the many external factors that will impact
negatively on revenue, such as rising infrastructure prices
and population decline, by reinvigorating ourstandardization efforts to date and our use of DX, wewant to become a company that supports the health of all
citizens as provider of back-end support for medical
institutions.

Improvement of the internal environment
for sustainable corporate growth
In accordance with our Policy of “Dedication to creating ahealthy and cultured society,” the BML Group provides aclinical testing business that is indispensable formaintaining medical care and health and a medical
informatics business that focuses mainly on the
manufacture and distribution of electronic patient chart

17

BML REPORT 2023

systems. In this sense, it is no exaggeration to say thatthe sustainable growth of the BML Group is a social
mission.
In order to achieve our Policy, creating a more
comfortable working environment is a key challenge. The
most important aspect of the services we provide isquality. What is necessary for that quality is the steady
improvement of each employee’s technical skills.
Therefore, we consider that the most important issue is tocreate an environment in which employees can maintaintheir ambition to improve and continue to contribute tosociety. For this reason, we are promoting theenhancement of in-house training, diversity, equity andinclusion (DE&I), and health management.
To enhance in-house training, We have planned three
types of training: rank-based, selective, and voluntary,
and we offer training opportunities to all employees.
With regard to DE&I, we strive to create a work
environment where employees can work together while
respecting each other and recognizing diversity by
confronting unconscious bias and fostering a corporate
culture that is compatible with the times.
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. In recognition of these
activities, BML has been selected as a “2023 CertifiedHealth & Productivity Management Outstanding
Organization (White 500).”

Our aim is to be the most trusted choicein the medical world
The BML Group operates with the goal of realizing theGroup Vision of the Sixth to Eighth Medium-Term
Management Plans, “to become the most trusted choicein the medical world,” as its top priority. To this end, we
believe that it is important to conduct management that isalways conscious of our role in healthcare.
Both the President and Vice President, who areresponsible for managing the BML Group, base their
management on their more-than-ten years of experiencein the healthcare field as physicians involved in the life anddeath of patients. Therefore, we believe that our
understanding of the value of the services that BML
provides in healthcare is close to the actual circumstancesof the field. Making the most of this advantage, here at
BML, we strive to be a company valued for creating better
health while providing back-end support for healthcare
services. We respectfully ask our stakeholders for their
ongoing support and guidance.

BML REPORT 2023

18

Growth Strategy for
Value Creation

About the BML Group

Long-term Vision

for quality andservice

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

Seventh Medium-Term
Management Plan

Eighth Medium-Term
Management Plan

Period for Solidifying
Foundation

Period for Growth

Period for
Leaping Forward

2018 - 2020

Summary of the Sixth MediumTerm Management Plan

Summary of the Seventh MediumTerm 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 systeminfrastructure.
We also took various measures toenhance our human resource baseas the most important matter.

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

2021 - 2023
Outline of the Eighth Medium-Term
Management Plan
(current Medium-Term Management Plan)
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 ourcompetitiveness, we have set forththree measures: enhancing thelaboratory network, enhancing sales
capabilities, and renovatingcollection and delivery processes.

Basic strategic framework
Aim to improve competitiveness based on “Standardization” × “DX (Digital Transformation)”StandardizationDX

Pursuing
quality

Testing quality
Collection
anddelivery quality

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, theeconomy is expected to pick up going forward, due tothe normalization of socioeconomic activities and theeffects of various government policies, among otherfactors.

In the contract clinical testing industry, the market size
contracted due to a decrease in COVID-19-related tests.
In addition, contract prices are expected to remain weakin the future due to the impact of the government’s
healthcare policies, including healthcare system reforms
and revisions to reimbursement for medical service fees,
and the fact that the market is mature, making it prone
to price competition. Looking ahead in this environment,
it will be necessary to respond to high-performance
tests that contribute to personalized medicine, such ascompanion diagnosis (CDx) based on cancer genomic
analysis, as well as online medical services. Further,
it is expected that the environment will demand thestreamlining and strengthening of the testing system in
response to COVID-19.

BML REPORT 2023

Enhancing
the laboratory
network

Standardization of nationwide
laboratory testing process
Enhancing test items
Next-generation support

Enhancing sales
capabilities

Expansion and deepeningof customer baseStrengthening of
the non-insurance field

Renovatingcollection anddelivery processes

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*Digital transformation

Social environment

Expanding competitivenessEstablishmentof No.1
reputation

Measures for BCP

External business environment

19

Furthermore, to strengthen our management base, we will
restructure our training system for the development andutilization of human resources, and work to create asystem for the permanent development of the Company.

In our current Medium-Term Management Plan, we haveset our Mission and our internal action policies to achieve
this Mission as “CSS.” As a specific Basic Strategic
Framework, we aim to expand our competitiveness basedon standardization and DX (digital transformation).

Sixth Medium-Term
Management Plan

2015 - 2017

Data Section

Eighth Medium-Term Management Plan (2021 - 2023)

To become the most trusted choicein the medical world

for the enhancementof quality andservice

Strategy by BusinessMedium-Term Management Plan

Group Vision

Foundation
improvement

BML’s Sustainability

MissionCustomer

Satisfaction

Synergy
SocialResponsibility

Customer satisfaction
Maximize customer satisfaction
by enhancing quality and service

Synergies
Aim for mutual development withvarious companies

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

Response to SDGs

Internal action policies

Consensus
Soundness

Standardization

Consensus of all employees
Promote business and operations
with a unified mindset among
employees

Soundness of all operations
Sound management andsound business execution(performance, finance, compliance)

Pursuit of standardization
Promote standardization that
supports high quality andhigh efficiency

BML REPORT 2023

20

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

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)

FY2020

FY2021

FY2022

FY2023

Net sales

138,571

186,067

159,462

135,000 to 145,000

Operatingincome19,936

48,88923,936

11,500 to 12,500

Operatingincome ratio

14.4%

26.3%

15.0%

More than 8.5%

– 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 nextgeneration laboratories. Furthermore, we will develop
new test items, including the expansion of mass
spectrometers and next-generation sequencers, theintroduction of new tests in the field of infectious
diseases, and CDx compliance. In addition, we will
improve the quality of our nationwide laboratories bystandardizing testing equipment and standard operatingprocedures and standardizing testing processes inaccordance with the scale of the laboratories.

Laboratory network
BML General
Laboratory
×7 laboratories
×Regionallaboratories

Sapporo× test items

Enhancing

Fukui
Okayama Osaka
Fukuoka21

BML REPORT 2023

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 convenienceand reduce the workload of collection and delivery staff
by promoting 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
the instilling of these operations.

Strengthening the management baseMoriokaStandardizationof testingprocesses

We will focus on expanding and deepening ourcustomer base by promoting coordinated marketing
activities across the BML Group and deepening
cooperation with local medical associations and othercompanies in the industry, as well as marketing activities
targeting hospitals and clinics.
In addition, as measures to strengthen our noninsurance 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 ournationwide network collection system and expand
optional items; and in the food testing field, we will
expand our comprehensive consulting and certification
and accreditation business for food quality
management, thereby enhancing our sales capabilities.

BML
General Laboratory

Nagoya– Human resource development and utilization –To strengthen our management base, we havepositioned the development and utilization of humanresources as a priority issue, and will restructure ourtraining system to create a framework for the permanentdevelopment 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
to maintain and improve the mental and physical healthof our employees and their families.

BML REPORT 2023

22

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Medium-Term Management Plan
Conceptual drawing of the new wing

【TOPIC】

New wing (Labcorp Building)Investment in human capital
Based on the new education system established in April
2021, we are proceeding with the acquisition of rankspecific skills. We have designed education programs
centered on technical skills based on a skills map for
general employees and education programs centeredon human skills and conceptual training for middle andsenior management ranks, and conducting training withthose programs. In particular, in terms of the diversity of
our core human resources, we actively select female
human resources and incorporate systematic, intensive
training programs.

Construction of New Wings

Training agendas
2021

2022

Concept

2023

36

71

79

10.4 hours
per person

10.7 hours
per person

20.5 hours
per person

Sustainability
Building a foundation for sustainable growtheven after ten years

BML General Laboratory (existing wing)Consideration for reducing environmental impact

Environment[Annual]Installation of solar power generation equipment
Installation of power generation panels on the entire south wall of the new wings
to utilize natural energy
Improved efficiency of air-conditioning equipment
Improvement of energy efficiency with high-efficiency heat source equipment*Excludes training for new employees

SDGs initiatives

Reduction of CO2
emissions by
478 t-CO2/year

6th Stage Building and Labcorp Building

Respond to increasingly severe disasters

BCP

Company daycare center, Sakuranbo Nursery

second floor or above

Machine room, etc.

Earthquake countermeasures : New wings are constructed with base isolation system

Number of employees’
children enrolled

Number of children
enrolled in the region

Total

Expansion

15

8

23

Each laboratory in the existing wing will be relocated after the construction of the new wings
The total floor area of BML General Laboratory will be 185%, and each laboratory will be
expandedDonation to Kawagoe City and receipt of Good Conduct Award on the city’s anniversary
Cellular
Cellularorganisms
organisms

Separating
Separating
analysisanalysisCB
CB laboratorylaboratory

GeneralGeneralRoutineRoutineRoutineRoutineBacteria
Bacteria

Waterproof
manholeGL + 2.5m

Iruma River

Reinforced concrete walls(with watertight doors)

Pure water storage tank

Oil tank

Ensure scalability as business expands

New wing(6th Stage Building)

GenomeGenomeSeismic
isolation joint

Column capital base isolation
Outdoor wastewater
treatment facility: Existing buildings are earthquake-resistant and seismic isolators for inspection
equipment are installed
Disaster countermeasures : Backup power and water supply
Emergency power generation system (72-hour power supply for new wings)
Clean and pure water tanks (Ensure 2 to 3 days of supply for the entire BML
General Laboratory)

Mr. Yoshiaki Kawai, Mayor of Kawagoe City expressed
his appreciation, saying, “We are grateful for such alarge donation. During the pandemic, BML accepted
our PCR tests for cases of infection in city facilities.
I hope you will continue to cooperate with the city into
the future.” At the 100th anniversary ceremony of
Kawagoe City held on Thursday, December 1, 2022,
BML was presented with a Good Conduct Award as acompany that contributed to the growth and prosperityof the municipal government.

Emergency power
generation equipment

Cubicle/water receiving tank

Flooding countermeasures : Relocation of inspection functions of the entire BML General Laboratory to the

A company daycare center with places for up to 50
children is next door to the BML General Laboratory in
Kawagoe. In addition to supporting employees who are
juggling work with raising their children, this facility also
contributes to regional childcare support.

On Wednesday, November 9, 2022, we donated ¥100
million to Kawagoe City in Saitama. Kawagoe City,a central city and the core city of our operations, marked
the 100th anniversary of its founding in 2022. By making
a donation to the city in this milestone year, we hope todeepen our relationship with the local community and togrow and prosper together with it. It is BML’s hope that
this donation will assist the region’s environmental
actions through programs that contribute to theenvironment, including health and medical care.

New wing (6th Stage Building)

Separating General
Generalanalysis General

RoutineCB laboratory

RoutineBacteria
RoutineRoutineSeparating analysis

Cellular
Cellular organisms
organisms

CB laboratorylaboratory Cellular organisms
CB

Bacteria
Bacteria
GenomeCellularorganisms(International
clinicalclinicaltrials)trials) Bacteria
Genome (International

Separating
RoutineRoutineRoutine General
analysis

GeneralCB laboratory

Current

Efficiency

Existing wing

New wing(Labcorp Building)

Separating
Separating analysis
analysis

Cellular organisms
GenomeGenomeGenomeNo laboratories will be locatedon the first floor

RoutineBacteria Routine

Separating analysis
CB laboratory

Cellular organisms

Genome(International
clinical trials)

Bacteria

GeneralRoutineRoutineRoutineAfter construction of the new wings

Improve processing capacity and efficiency

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

Roadmap
Phase 1: BCP/environmental measures and expansion of testing space by constructing new wings
Phase 2: Improve inspection processing capacity and efficiency to accommodate future business expansion
2022

2023

May 2022:
Start of design

2024

2025

2026

2027

Phase 1
May 2023: Start of construction

August 2024: Completion of construction

Phase 2
Formulation of plans
Construction

23

BML REPORT 2023

Laboratory relocation and expansion

Conceptualize next-generation laboratory

BML REPORT 2023

24

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

DX Initiatives
BML’s initiatives for DX

Developing human resources for DX promotion
professionals, with the aim of providing high-quality
medical services.
In addition, we are aiming for medical DX by jointly
developing DX solutions with diverse companies rather
than adhering to the framework of our in-house system.
Furthermore, the BML Group is working to take part inthe construction of a national medical information platform
and the standardization of electronic patient charts
through the utilization of its own digital IT infrastructure.

The BML Group has been promoting digitaltransformation (DX) through DX solutions at various sites
for medical care by extensively utilizing digitaltechnology. This initiative is aimed at enabling patientsto have improved medical experience and receive
medical care remotely or at home and producing
benefits such as improvements in medical care quality
and onsite operational efficiency for medical

Utilization of digital technologies
Improved medical
experience
Shorter waiting time

Clinics

Support for introduction of electronic patient charts
Support for calculation of health insurance claims
Improved quality and efficiency of blood sampling
operations

BML DigitalBML DX solutions

Remote/home
medical care
Preventive medicine

Patients

Reporting System

Provide high-quality
medical services
Hospitals,
medicalassociations,and other
centers

Improved testing efficiency
Improved testing quality
Contract sophisticated specialized testing

Recesta

B-Report

B-Connect

BML Digital

B-Report

TAK Medical Check-up Cloud

Electronic billing
Pathological and cytological examinations using AI

BML Digital

B-Liner

B-Connect

B-Report

B-Label

B-Liner
B-Connect

B-Report

Vision for medical DX

Online eligibility check

RecestaElectronic prescription
Medical examination

Support for health insurance claims

Laboratory

BML Digital

B-Label*Recesta is a registered trademark of FALCO HOLDINGS Co., Ltd.
*TAK Comprehensive Medical Check-up System and TAK Medical Check-up Cloud are registered trademarks of TAK Co., Ltd.

25

BML REPORT 2023

Strengthen understanding ofcompany-wide DX and IT literacy
through study using e-learning, etc.

Fundamental Information
Technology Engineer
Information Security Management
IT Passport, etc.

The number of internal digital human resources: 245 (as of October 2023)
Manager

16

Engineer/programmer

177

Designer

18

Operator

34

Systems Architect

1

Information Security Management

7

Network Specialist

1

Applied Information Technology Engineer

30

Registered Information Security Specialist

2

Fundamental Information Technology Engineer

85

Database Specialist

3

IT Passport

113

Establishment of DX Promotion OfficeGroup Planning Department

DX Promotion OfficePlanning Division

Overseas Business Office
Accounting Department
Sales Management Department

Acquisition of DX Certification

Reporting System

Prescription/pharmacy
Remote work

DX users

As part of our growth strategies over the medium- to long-term, we haveestablished the DX Promotion Office, a strategic department for DX promotion, toconfront sophisticated and diverse challenges. Focusing on the formulation of DX
strategies, development of DX human resources, and IT-based transformation ofinternal services, this department effectively oversees companywide DX promotion.
The DX Promotion Office is a key department that facilitates DX acrossthe BML Group, fully derives DX benefits, enhances the Group’s competitiveness,and contributes to sustainable growth of the Group.

ClinicReception/payment

Online medical care

Systems Architect
Data Scientist
Applied Information
Technology Engineer

Qualification holders (as of October 2023)

National medical information platform and the standardization ofelectronic patient charts

Regional medical cooperation

DX planners

Possess knowledge of digitaltechnology and the use of data andstrengthen a broad range of skills
and knowledge that can be appliedin operations

B-LabelDigital IT infrastructure (core system, testing system, testing database, etc.)

Medical care at home

Registered Information
Security Specialist
Network Specialist
Database Specialist

Preparation of containers used for medical check-ups
Medical check-up network
Reporting System

Qualifications to aim forStrengthen specialist DX skills,
focusing on selected digital humanresourcesDX
specialists

Support for medical check-up services
Support for data management
Development of online appointment andreception system

Medicalcheck-up
centers

B-Label

B-Liner

B-LabelStrengthened content

TAK Comprehensive Medical Check-up System

Reporting System

B-Connect

Improved medical
MedicalData sharing
care quality
professionals
Improved onsite
Provision ofoperational efficiency
preventive medicine
Paperless

B-Liner

BML Digital

Reporting System*BML aims to have 200 IT Passport holders in FY2023. By an annual increase of 200
holders in subsequent years, BML aims to have 1,200 holders in FY2028.

Digital human resource development plan

TAK Medical Check-up Cloud

Online eligibility check
Compatible with electronic prescription
Module for medical service fee calculation

To develop DX planners and DX specialists, we focus
on developing and securing human resources who
possess specialized knowledge and skills concerning
digital technology and the use of data.

The BML Group is systematically developing humanresources to promote DX by categorizing them into
DX users, DX planners, and DX specialists.
To develop DX users, we provide e-learning and othereducation programs for all BML employees to help them
deepen the comprehension of DX and enhance basic
IT-related knowledge. We also encourage the acquisitionof an IT Passport qualification*, bolstering theenhancement of their IT literacy.

B-Connect

B-Report

In January 2022, BML acquired a certification for DX Certified Business Operator
established by the Ministry of Economy, Trade and Industry in recognition of BML’s
efforts such as the formulation of its management vision and the development andestablishment of the DX strategies and system.

BML REPORT 2023

26

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

DX Initiatives
Examples of BML’s DX initiatives

Progress
Proportion of system-based test requests contracting

Digital Reporting System (DRS)
Support medical care by digitalization
DRS provides benefits including not only improved operational efficiency and convenience and paperlessprocedures for medical institutions but also improved quality brought by preventing specimen mix-ups.

68%

Increase

58%

of

B-Label10%

B-Linernnect

B-LabelAutomatic printing of blood sampling labels with patient names by container and material
2019

2020

2021

2022

2023

EffectElectronic patient chart system

B-Connect

igitalSystemB-Connect

port

B-LabelBlood sampling labels

Improved efficiency of blood sampling operations and prevention of specimen
mix-ups at medical institutions

B-Liner

Test requests
BML Digital

B-Report

Five-foldInternet access
B-Label to test requests and test result reports

increase

Internet

Reporting System

Improved quality: Number of attached blood sampling labels with patient names

B-Report
Internet accesstest results
B-Connectto inquiries on B-Label

2021

Result reports

2022

2023

Improved efficiency: Proportion of paper-based test requests contracting
Improved efficiency of internal test request reception work and streamlining of operations

B-LinerApprox.

20%

improvementin operational
efficiency

2019

Inquiry by smartphone or tablet

B-Linerbel

Email notification

2020

2021

2022

2023

Result inquiry screen on PC

Elimination of paper: Reduction of paper requests

B-Liner (clinical testing system)
This system links hospital systems and analytical systems. Support in-hospital laboratories in managing
data and outsourcing testing services

Reduced environmental impact caused by reduction of paper resource usage

Approx.

one
millionfewer paper
requests

2019

System screen

27

BML REPORT 2023

2020

2021

2022

2023

*Results in every graph were obtained by comparing figures between first-half periods of fiscal years.

BML REPORT 2023

28

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Message from the Financial Officer
sales are progressing smoothly. On the cost side,
we are speeding up the withdrawal of the various
special response operations that expanded due to the
COVID-19 pandemic. In particular, since May, we have
reduced the emergency collection and special transportsystems for consignments of COVID-19 specimens, andwe have been able to return almost to our pre-pandemic
status. On the other hand, due to the increase in theprices of materials resulting from inflation and risinglabor costs due to labor shortages, costs are rising at
a higher rate than had been envisaged when the Plan
was formulated. We are currently working on theimplementation of new operational efficiency measuresand thorough maintenance of appropriate sales prices.
Sales in the clinical testing business, BML’s main
business, tend to be linked to government healthcare
costs and remain basically stable regardless of
economic trends. Therefore, our key theme in FY2023
has been to normalize our business operations oftesting, sales, and collection and delivery, and to return
our business performance to a stable growth trajectory.

Return to a stable growthtrajectory and aggressive
investment for the next
generation

Norihisa Takebe,
Representative Director andSenior Executive Officer

Eighth Medium-Term Management Plan
that launched with FY2019 as its base year
FY2023 is the final year of the Eighth Medium-Term
Management Plan) that launched in FY2021.
We began formulating the Eighth Medium-Term
Management Plan in 2020, around the time when
COVID-19 cases were increasing. Our full-year businessperformance for FY2020 was ¥138.5 billion in net salesand ¥19.9 billion in operating income. Both of thesefigures were the highest on record. However, theseresults were largely due to demand for PCR testing
performed during the COVID-19 pandemic, and sales inour main business (hereinafter, base sales), excluding
COVID-19-related net sales, declined.
At the beginning of the spread of the COVID-19
pandemic, there was no way of predicting when the
COVID-19 pandemic would end. We determined,
therefore, that formulating numerical targets for the
Eighth Medium-Term Management Plan for 2021 andbeyond based on FY2020 results ran the risk of
misdirecting the entire plan. For this reason, taking
FY2019, which had not been affected by the pandemic,

29

BML REPORT 2023

Steady promotion of the Medium-Term
Management Plan measures even during
the COVID-19 pandemic

as our base year, with the goal of growing pre-pandemic
base sales by around 3.8% every year, regardless of thedemand for PCR testing, we set targets of ¥135.0 billion
in net sales and ¥11.5 billion in operating income for
FY2023.

Making FY2023 a year to return toour previous stable growth trajectory
Since the Medium-Term Management Plan began,
the pandemic continued into 2021 and 2022, boosting
demand for PCR testing significantly. As a result, net
sales increased by far greater margins than expected,
reaching ¥186.0 billion in FY2021 and ¥159.4 billion in
FY2022. During this period, while also focusing on our
response to the sharp growth in PCR testing, weconcurrently endeavored to expand base sales as set
out in the Medium-Term Management Plan. As demandfor PCR testing has declined due to COVID-19’s
downgrade to a Class 5 infectious disease in May 2023,
the results up to the first quarter of the current fiscal
year, the last year of the Plan, show that sales haveincreased almost as planned, and we recognize that

We set forth three measures under the Eighth MediumTerm Management Plan—enhancing the laboratory
network, enhancing sales capabilities, and renovatingcollection and delivery processes—in our efforts toimprove quality and services and expand ourcompetitiveness. To implement the various measures,
we have undertaken organizational reinforcement,
product development, and capital investments, some ofwhich are described below.
In “enhancing the laboratory network,” we have madeprogress in the standardization of operations in ourlaboratories around the country, the enhancement ofbacteriological testing capacity in our core laboratories,
and the expansion of our capacity for processing ofpathological and cytological testing. Among ourlaboratories in the Tokyo metropolitan area, weundertook investment to increase the testing equipment
at the Omiya and Korakuen laboratories to increase ourprocessing capacity. In microbiological testing, weinvested in equipment at our core laboratories in Osakaand Fukuoka, while promoting the uptake of testing ineach region, including our laboratories in Nagoya andOkayama, which have surplus capacity due to past
investments. In pathological testing, we have been able
to enhance our testing capacity with laboratory
expansions at the Tohkai Cytopathology Institute, whichbecame part of the BML Group in 2019, andinvestments in the relocation and expansion of PCL
Japan’s laboratories in Fukuoka and Osaka.
Regarding “enhancing sales capabilities,” we are
placing efforts into strengthening non-insurance fields,
which do not rely on insurance points, in addition to theclinical testing business. In the medical informatics
business, we released a new electronic patient chart,

Qualis Cloud. By providing a cloud-based product withthe same operability as the conventional, on-premisesbased Qualis system, we offer more options forcustomers, which is leading to increased sales. While
we have begun provision of the clinical testing system,
B-Liner Series, with enhanced functions, we will consider
commercialization of the system going forward. In the
medical check-up business, we restructured our salesorganization and established a department thatspecializes in solutions for medical check-up centers
nationwide, thereby establishing a system to assist
customers in increasing sales and improving operational
efficiency. In the clinical trial business, we have increased
net sales by strengthening measurement functions for thedevelopment of vaccines for infectious diseases, focusing
mainly on COVID-19, and providing them to domestic
pharmaceutical manufacturers. We also have been able
to steadily increase net sales from joint clinical trial
services for international clinical trials with Labcorp (U.S.).
Although the food hygiene business did feel the impact of
the slump in the food and beverage industry caused by
the pandemic, our performance in this business has
since returned to pre-pandemic levels, thanks in part tothe strengthening of our comprehensive consulting
functions for food quality controls and the expansion ofcertification and accreditation operations.
Overall, during the current Medium-Term Management
Plan, while we have focused on our responses to the
COVID-19 pandemic in the clinical testing business,
which is an insurance area, we have also steadily
implemented measures in non-insurance fields, which
has contributed to growth in base sales.
For renovating collection and delivery processes, we are
pursuing initiatives with a focus on a digital reporting
system (hereinafter, DRS). DRS is a collective term forthree tools—“B-Connect” for the requesting of tests andreporting of test results via the internet, “B-Report” forinquiring about test results via the internet, and “B-Label”
for automatic printing of blood sampling labels with patient
names by container and material. While we have beenworking on the individual tools for some time, we are now
making proposals to help customers introduce these three
tools at once in a more efficient manner. These tools havefacilitated the smooth transmission of requests and reports,
resulting in reduced paper use and fewer operations, aswell as the reduction of tasks such as labelling ofspecimens. This has led to the improvement of efficiency
for both our customers and BML.

Focus on development of functions fromthe customers’ perspective and investment
in human resources as a DX corporation
In 2021, BML became the first company in our industry
to acquire the DX Certification. BML defines DX as the
improvement of customer experience and the realizationof greater business efficiency. In developing the various
functions of our range of electronic patient chartsystems, hospital testing systems, and the DRS that I
mentioned above, we have considered usability for our

BML REPORT 2023

30

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Message from the Financial Officer
customers, namely the doctors and staff that use themon the ground in healthcare settings. Each of thesesystems is being steadily implemented, and we havegained a real sense that they have been well acceptedby our customers. At the same time, our customers’ useof these functions has led to the improvement of BML’s
own business performance and operational efficiency.
In FY2023, we added two products from othercompanies to our DX product lineup. One is Recesta*,a cloud-based comprehensive health insurance claim
support service for clinics from FALCO HOLDINGS Co.,
Ltd., and the other is the TAK Comprehensive Medical
Check-up System* from TAK Co., Ltd.
Internally, we are proceeding with the expansion of
our operations and the improvement of their speed andefficiency. This includes revamping testing-related
systems and updating the host computers of BML
General Laboratory. We plan to invest approximately¥10 billion in internal and external systems, includingthese initiatives, over the next ten years.
The development of digital human resources isimperative for the promotion of DX. We repeatedly holdbasic-level IT knowledge training through e-learning,a monthly online training program for all employees
conducted by the Human Resources Department, andencourage all employees, including executives, toobtain IT Passport qualifications. We also provide
support to the relevant departments to acquire higherlevel qualifications such as data scientist and registeredinformation security specialist qualifications. In addition,with the establishment of a HR system to recruit moreadvanced specialists, we are making efforts to enhance
the level of IT knowledge across the entire company.
*Recesta is a registered trademark of FALCO HOLDINGS Co., Ltd.
*TAK Comprehensive Medical Check-up System is a registered trademark of TAK
Co., Ltd.

Aggressive growth investment for
the next generation
In the next Medium-Term Management Plan, which will
start in the next fiscal year, we will proceed withaggressive investments for future growth. As alreadyannounced, the construction of new wings at the BML
General Laboratory in Kawagoe City has commenced.
This construction work, which involves the construction of
two new buildings and the extension and reconstructionof the existing buildings with the aims of relocating thelaboratory and securing more space, will be completed inAugust 2024, and the new buildings will become
operational in January 2025. We expect to invest ¥15.4
billion in buildings and auxiliary equipment in Phase 1,
and about ¥15.0 billion in the introduction of nextgeneration testing equipment in Phase 2. This will
enhance the facility’s processing capacity for specialized
and general testing to about 1.5 times its current capacity.
We will also continue to reinforce our ten laboratories
in the Tokyo metropolitan area in anticipation of future
growth in the market in that area. Following the
expansion of the Omiya and Korakuen laboratories,

31

BML REPORT 2023

which I mentioned earlier, we plan to progressively
develop and expand the other eight laboratories in theTokyo metropolitan area, while examining the market
situation in each district.
PCL Japan, the pathological testing service provider,will build the New Tokyo Laboratory in Ichigaya,
Shinjuku-ku, Tokyo. The decision was made to establish
the new laboratory in the center of Tokyo with the dual
aims of improving efficiency by consolidating its
laboratories that are scattered throughout the Tokyo areaand securing specialists such as pathologists andcytotechnologists. With a total investment of about ¥5.0
billion, this new laboratory is scheduled to be completed
and put into operation in November 2024.
Food hygiene business operator, BML Food Science
Solutions, will work on enhancing its processing
capacities of various types of testing, such as intestinalbacteria and food microbiology testing andphysicochemical testing of food products, by building
a new wing adjacent to its No. 2 laboratory in Kawagoe.
In addition, by consolidating its No. 1 laboratory, which
had existed separately in the same area, BML Food
Science Solutions will integrate its testing department andimprove operational efficiency. With a total investment of
about ¥1.8 billion, this new laboratory is scheduled to becompleted and put into operation in April 2024.
In addition to these moves, we will actively makegrowth investments over the next ten years, including
the investments in systems that I mentioned earlier.

Future alliance
In March 2023, BML concluded a capital and businessalliance agreement with FALCO HOLDINGS Co., Ltd.
This business alliance will allow the two companies tomaintain independent management while holding small
stakes in each other, and to complement the functions
that each other lacks. In the past, M&As in our industry
have been conducted in the form of a complete merger,
in which the target company becomes a subsidiary or ismerged. In this case, however, given that the markets inwhich the two companies have strengths are notcompletely aligned, BML and FALCO HOLDINGS
formed their alliance based on the rational decision totake advantage of the functions that both companies
could use while maintaining a competitive relationship.
In this way, the two companies aim to strengthen theirsales capabilities while curbing their investment
burdens, through the development of BCP measuresthat mutually utilize the research laboratories of bothcompanies, which are separately located in East andWest Japan, the use of laboratories in non-core areas,
and the mutual sale of ICT products.
As the pandemic draws to an end and business
operations return to what they were in normal times,
some companies in the clinical testing industry may
reconsider how they continue their business. In addition,
due partly to demographic changes caused by the
declining birthrate and aging population, the market
potential of the clinical testing business may becomea problem in some regions. We are happy to cooperatewith other companies in the same industry in flexible
ways in accordance with various circumstances.

Stable growth as a medical infrastructurecompany and stable returns toshareholders are our responsibility
The clinical testing business is now an essential medical
infrastructure for medical institutions. Based on solid
financial foundations, BML intends to contribute tosociety by providing stable services, while properly
maintaining our human resources, equipment, andsystems. To this end, we will invest sufficient resourcesin the development of BCP measures to respond tonatural disasters, in addition to growth investments.
Based on deliberations by the Sustainability Committee,
which was established within the company last year,
we will also make the necessary investments for thedevelopment of ESG-related measures.
Even from before the pandemic, our intention has been
to continue paying stable dividends to shareholders. In
the two fiscal years until FY2022, we provided returns toshareholders in line with the favorable businessperformance stemming from the increase in demand for
PCR testing. In FY2021, we paid a total of ¥120 individends per share, comprising a ¥70 ordinary dividend
and a ¥50 special dividend, and spent ¥5.0 billion toacquire treasury shares. In FY2022, we paid a total of¥100 in dividends per share, comprising a ¥80 ordinary
dividend and a ¥20 special dividend, and spent ¥1.0
billion to acquire treasury shares. I believe that we havebeen able to provide returns to shareholders in a flexible
manner by combining special dividends and theacquisition of treasury shares, in line with our businessperformance over the two years of significant increases
due to COVID-19. With dividends expected to be ¥80 per
share for the full year, we intend to maintain our record
level of ordinary dividends, following on from the previous
fiscal year. Going forward, we will continue to maintainstable shareholder returns while improving the payout
ratio, to meet the expectations of shareholders who haveinvested in BML based on their understanding of ourbusiness characteristics.
The first three years of the current Medium-Term
Management Plan have been a period in which businessperformance was greatly affected by demand for PCR
testing due to COVID-19. However, in this fiscal year,
the final year of the Plan, our main theme is to return toa stable growth trajectory. Based on this theme,
we believe it is important to formulate and execute profit
plans for each business against the backdrop of large
investments under the next Medium-Term Management
Plan, which starts in FY2024, and to appropriately review
the portfolios for each business segment in comparison
with the cost of shareholder's equity. We will also pay
attention to the improvement of ROE by balancing
earnings, growth investment, and shareholder returns.
After the COVID-19 pandemic, social activity has
returned to normal, and we are now able to hold direct
dialogues with investors. In addition to the provision ofproper explanations at financial results presentations
and seminars for individual investors, we will also
arrange individual, face-to-face meetings, to increase
opportunities for dialogue with investors. We will use
these opportunities to thoroughly explain BML’s
circumstances and to deepen mutual understanding bylistening to the opinions of investors. I hope we may rely
on your continued support.

BML REPORT 2023

32

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Materiality
BML’s Materiality
In line with its Policy of “Dedication to creating a healthy and cultured society,” the BML Group will pursue

initiatives through its business activities to realize an affluent society. The BML Group has identified 13 material

issues (materiality) in six categories to achieve sustainable growth with the society. Going forward, we will spreadthese material issues across the BML Group and establish KPIs. By working to solve these social issues throughits business activities, the BML Group will enhance its corporate value, help to attain SDGs, and contribute to thebuilding of a sustainable society.

Materiality list
Materiality categories

E

Environment

S

SocialResponse to
climate change

Realization ofa rewarding
workplace

Respect forhuman rights

Materiality

Definition (summary)

Climate change

Promoting initiatives to reduce greenhouse gas (GHG)
emissions, a driver of climate change, and realize adecarbonized society

Energymanagement

Using energy consumed for various purposes withincreased efficiency
Further, working to reduce environmental impact andcurb climate change by selecting sustainable
renewable energy

Diversity, equity,and inclusion

Embracing the diversity of all employees with diverse
personalities and backgrounds in gender, nationality,
age, culture, and belief to create a comfortableworking environment

Employment anddevelopment of
human resources

Pursuing initiatives such as hiring, assessment, and skill
and career development to promote the active participationof employees over the medium- to long-term, aiming tosecure, develop, and retain human resources consistently

Employee healthand safety

Promoting initiatives to manage labor safety based on laws
and regulations and improve the health of employees sothat employees who support the root of business activities
can continue to work safely and with peace of mind

Respect forhuman rights

Respecting the human rights of all relevant people
including employees and business partners, andthrough this initiative, creating a comfortable working
environment

Compliance withlaws andregulations

Complying with laws and regulations, collecting
information on the enactment or revision of them, andpromptly comprehend entailed risks and devise
countermeasures to continue to gain trust from society

Corporate
governanceWith the strengthening of corporate governance positioned as animportant management issue, enhancing the transparency andspeed of decision-making, strengthening management functions,and promptly responding to changes in the business environment
to realize “the most trusted choice in the medical world.”

Information
securityStrengthening protection and management of customer
information and taking thoroughgoing measuresagainst an infringement on individual customers’
privacyG

Governance

Strengtheningof governance

Quality
improvement

Business

Development ofhigh-quality,
high-valueadded business

Enhancing sales
capabilitiesDX(digitaltransformation)

Contribution to
medical care

33

BML REPORT 2023

Contribution to
medical care

Working to bolster and improve quality control toprovide services that customers and patients consider
safe and reliable
Strengthening the development of “sales humanresources” who seek to foster communication withpeople involved in medical care in an effort to expand
and deepen its customer base
By building a resilient infrastructure in addition tocarrying out improvement and reform using IT
technology toward continuous corporate growth, aiming
to be a sustainable and highly competitive company
Contributing to the development of medical services
and healthy lifestyles for people by addressing
challenges existing in medical services and responding
to customer needs

Related SDGs

1
Identify issues

2
Prioritize issues

Identification of ESG issues(GRI and other guidelines for the disclosure of non-financial information, evaluation criteria usedby ESG rating agencies, and SDGs)

Industry-specific important issues and BML’s business strategic issues

Assessment of the significance ofissues for stakeholders
Factors in each industry assessed andweighed by ESG rating agencies
Issues emphasized by institutional investors

Assessment of the significance ofissues for BML
Policies such as philosophy and action
guidelines
Important issues and business measures in
the Medium-Term Management Plan
Assessment of the significance of issues by
the secretariat

Assessment by the management

3
Confirm validity(1) The management’s four-grade assessment of materiality
themes(2) Discussion based on assessment results in (1) at aworkshop attended by executives

Confirmation of validity by the Board of Directors

4
Identification

5
Establish KPIs

Identification of materiality
Identification of materiality based on feedback from the management

Establishment of KPIs
Establishment of KPIs for each materiality from the perspectives of materiality definition (KGIs),
the Medium-Term Management Plan, and ESG rating improvement

BML REPORT 2023

34

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Materiality
List of materiality and KPIs

Respect forhuman rights

35

BML REPORT 2023

Strengthening of governanceG

GovernanceDiversity, equity,and inclusion

Companies where human resources with diverse personalities and backgrounds
in gender, nationality, age, culture, and belief work are required to accept thediversity of their employees and embrace new values of their employees. This
theme has been identified to facilitate the acceptance of diversity so that acompany provides a comfortable working environment for employees withdiverse personalities and backgrounds.

Fiscal year by whichto achieve goals

Main initiatives

Reference CO2 emissions in FY2021
Reduction of Scope 1 + 2 emissions

a reduction of 25%

FY2030

Increase the ratio of renewable energy-derived electricity introduced at our main BML General Laboratory to 70% by 2030
Increase the ratio of renewable energy-derived electricity introduced at core laboratories to 4.4% by 2030
Generate power in-house from solar energy at the BML General Laboratory so that solar energy-derived electricity
accounts for 0.3% of the total electricity consumption
Replace vehicles for sales, collection, and delivery with hybrid vehicles. By preparing an infrastructure environment,
introduce EVs so that the EVs accounts for 2.7% of the total replaced vehicles

Reference CO2 emissions in FY2021
Reduction of Scope 3 emissions

Disclose emissions
Set an emissions reduction
targetFY2025
FY2026

Consider a target range and approaches, and disclose emissions
Set a medium-term Scope 3 target

Setting medium- to long-termtargets and formulating a road map
for achieving carbon neutrality by
2050

Set medium- to long-termtargets
Formulate a road map

FY2024

Set medium- to long-term targets and formulate a road map for achievingcarbon neutrality by 2050 and disclose them

Female manager(section chief or higher positions)
ratio

20%

FY2029Affirmative action on female employees who are candidates for management
positions (selective education + promotion to management positions)
Enhance the development of human resources for the next generation
irrespective of gender
The percentage of women promoted to management positions is 25% orhigher in every fiscal year

Rate of reinstatement afterchildcare leave

Keep it at 100%Every year

Follow-ups to employees on administrative leave
Interviews with those reinstated, career seminars

Childcare leave utilization rate bygender

Women: Keep it at 100%
Men: 80%

Women: Every year
Men: FY2029

Encourage men to take childcare leave
Education for managers

Average education/training time

Full-time employees: 15 hours/year
Managers: 25 hours/year

FY2027

Rank-based training

The rate of attendance at training

100%

FY2027

Follow-ups to those who have not attended

Employment anddevelopment of
human
resources

Employees support the root of business activities. A shortage of human resources
and poor performance of employees are linked directly with a crisis of acompany’s ability to operate as a going concern. This theme has been identified
to pursue initiatives such as hiring, assessment, and skill and career development
to promote the active participation of employees over the medium- to long-term,
aiming to secure, develop, and retain human resources consistently.

Days of paid leave utilization

Average 12.0 days or more

FY2025

Encouragement to take successive five days of paid leave
Introduce a system to allow the taking of paid leave in units of hours

Employee healthand safety

Companies are required to create safe workplaces where accidents areprevented and protect employees from mental disorders such as ill mental
health. With this theme identified to attain sustainable corporate growth, wewill create an environment in which employees can work comfortably throughinitiatives seeking to manage labor safety based on laws and regulations
instituted in countries and regions and improve the health of employees.

Percentage of employees receiving
regular health checkups

Keep it at 100%Every year

Regular follow-ups by occupational physicians or nurses

Percentage of employees receiving
stress checks

80%

FY2025

Communicate the necessity of grasping the state of one's health and a level of stressrepeatedly and continue to encourage employees to receive stress checks by department

Respect forhuman rights

The individuality of every human should be respected and equally treated, and everyone
has the universal right to live according to his or her wish. Companies are required torespect the human rights of employees and business partners and be considerate ofthem. With this theme identified to attain continuous corporate growth, we will create
an environment in which employees can work comfortably through initiatives seeking topromote respect for the human rights of employees and business partners.

Implementation of human rights
due diligence assessment

Build a human rights due
diligence framework

FY2025Investigation regarding human rights in the Company and supply chain

The rate of attendance at training
in human rights

100%

FY2025

Scrutinize training levels and contents, select trainees, and conduct training in FY2023
Conduct training every year going forward

Conducting compliance training

Conduct compliance training
every six months
Keep the rate of attendance
at 100% (except employeeson administrative leave andemployees on leave)

Every year

Compliancewith laws andregulations

Companies are required to comply with various laws and regulations includinglaws that general companies are universally required to follow and laws
and regulations established industry by industry and respond to businessenvironment changes caused by revisions to laws and regulations. With
this theme identified for the Company to comply with laws and regulations
and respond to changes, we will collect information on the enactment orrevision of laws and regulations and comprehend entailed risks and devise
countermeasures to continue to gain trust from our stakeholders. In addition
to complying with laws and regulations, we will conduct corporate activities
sensibly in accordance with the Company’s values and Corporate Commitments.

The Risk Management Department collects information on the enactment
or revision of laws and regulations and comprehends contents
Comprehend entailed risks posed to BML and consider countermeasures
Create training contents containing enacted or revised laws and regulations
to help raise employees’ awareness of compliance

Conducting compliance self-audits

Conduct compliance self-audits
every quarter
Report to and deliberate with
the Compliance Committee

Every year

The Risk Management Department collects information on the enactment or revision oflaws and regulations, amends self-audit items to suit enacted or revised contents, andperiodically conducts self-audits
Consider remedial measures against compliance violations in cases reported throughself-audits and implement such measures to ensure compliance with the BML Group’s
legal obligations
Report the status of compliance to the Compliance Committee and conduct deliberations

Corporate
governance

Companies are required to build a governance structure designed to determine theircourse of action and monitor their corporate activities to continuously provide value
to society and customers while securing profits for their shareholders, the owner ofcompanies. With this theme identified to enable continuous provision of corporate
value, the Company will strengthen functions of the Board of Directors based on adiverse range of knowledge and experience through the use of Outside Directors
and enhance management through the establishment of various committees.

Information
security

Companies that have a vast amount of customers’ personal information
are expected to take thoroughgoing measures against an infringement on
individual customers’ privacy committed particularly through the leakage of
personal information due to cyber attacks and improper internal use of personal
information. With this theme identified to continue to gain trust from customers,
the Company will properly protect and store customers’ personal information byenhancing its management of information.

Strengthen supervision capability of the Board of Directors by multiple
Outside Directors
Strengthen supervision capability of the Board of Corporate Auditors bymultiple Outside Corporate Auditors

Measures against cyber attacks

Introduction of Endpoint Detection
and Response (EDR): 100%
Conduct targeted email attack
training 12 times per year

FY2023Introduce EDR on all PCs in the Company
Build a system to periodically conduct targeted email attack training
Stop using the PPAP transmission method for email attachments

Measures to reduce the use of USB
memory(Quantitative) Reduce the use of
USB memory by 30%(Qualitative) Accomplish the shift
to highly-encrypted USB memory

FY2024

Change to online data exchange to the extent possible
If USB memory is used for customer’s convenience, only highly-encrypted
USB memory is permitted

Departmentsin charge

Related SDGs

General Affairs Department

Energymanagement

Energy sources such as coal, oil, and natural gas, which humans have relied on
until now, can lead to the emission of greenhouse gas, a contributor to climatechange, thus resulting in the acceleration of climate change. This theme has
been identified to reduce environmental impact and curb climate change byusing energy, which is consumed by companies for various purposes, withincreased efficiency and selecting renewable energy sources.

Goals (qualitative/quantitative)

Human Resources Department

S

SocialClimate change

Increased occurrence of extreme weather events caused by climate change
has the potential to create natural disasters such as global warming anddrought and bring problems such as the spread of a latent infectious disease,a food shortage, and a water shortage. With this theme identified to reduce theoccurrence of such extreme weather events, we will promote initiatives to reduce
the factitious emission of greenhouse gas (GHG), a driver of climate change,
and realize a decarbonized society, in addition to strengthening our resilience tonatural disasters caused by climate change.

KPIs

Sustainability
Committee

Realization of a rewarding workplace

Environment

Definition

Group Planning
Risk Management Department
Department

E

Materiality

System Division

Response to climate change

Materiality
categories

BML REPORT 2023

36

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

MaterialityDX(digitaltransformation)

Contribution to
medical care

Plan execution rate to be 50% ormore in 2026
90% more in 2028

FY2028The number of after-graduation
qualification holders(technologist and others)

20% more in 2026
30% more in 2028

FY2028

Obtainment of DMR*

30% of total sales personnel toobtain it

FY2030

Improvement in the response rate ofelectronic patient chart support andservice quality

Response rate: 90% or above
Service quality: Response within
90 seconds

FY2023

Enhancement of each type of training

Test items sales training: twice a
monthSales and testing knowledge
improvement training: once a year

Every fiscal year

The development of IT technology has brought about thesystemization of work that has only been carried out by humans until
now and the creation of new and advanced services, andimplementation of such services is expected to introduce reform andstrengthen competitiveness. This theme has been identified for theCompany to aim to be a sustainable and highly competitive company
by building a resilient infrastructure in addition to carrying out
improvement and reform using IT technology toward continuous
corporate growth.

System introduction ratio/cost reduction
amountIntroduce B-Label at 50% offacilities that use electronic patient
chart systems

FY2026

Cost reduction due to lightened collection anddelivery workload (collection and delivery, reception,and input) caused by the rollout of B-Label

B-Label attached rate: 30%

FY2026

The number of employees who haveobtained the IT Passport

200 employees per year

FY2029Provide education about IT for all employees and aim to help 200
employees per year to obtain the IT Passport to create afoundation for the continuous promotion of DX.
(half of the full-time employees to obtain it six years later)

When patients need medical services, it is important that medical
services are provided for them at proper prices irrespective ofregion. This theme has been identified for the Company to contributeto the development of medical services, the enhancement of its
corporate value, and healthy lifestyles for people by addressing
challenges existing in medical services and responding to customer
needs.

The number of cases where genomic
medicine analyses are conducted (typesof genes that can be analyzed)

Contract at least three new items of
multi-gene panel testing

Every year

Independently develop a multi-gene panel test on genes
responsible for serious or rare diseases using NGS
Constantly release it as a new contract item every year

Operation and deployment of branches targeted at
hospitals in regions where the population isseverely declining and securing laboratory
technicians is getting difficult (Number of assigned
technicians relative to deployment of branches)

Select manufacturers by field
Make a five-year introduction plan
Update equipment based on the introduction plan, aiming toreach the plan execution rate
Encourage laboratory personnel who has been at BML (nonconsolidated) for no more than three years since joining theCompany to obtain an after-graduation qualification
Establish a training system to promote the obtainment ofqualifications
Increase the number of qualification holders by 15 or more every year
In FY2023, as a trial, eight persons in the Division are designated to aim at obtaining the certification
In FY2024, we will expand the range of designated personnel and designate persons in the Division
as well as new employees
In and after FY2025, we will expand the range of designated personnel and designate persons in
the Division, new employees, and other sales personnel to aim at obtaining it
Reinforce telephone support and maintenance personnel within
FY2023
Improve operational efficiency by adopting interactive voice
response (IVR) and an automated response history recording tool
Seek measures to reduce the number of incoming calls
Conduct sales training (including manufacturer study meetings)
twice a month, focusing on deepening and cultivation items as well
as new items, with the aim of improving skills
In the sales and testing knowledge improvement training, eachbranch office selects one item from strategy items, trainees makepresentations in a role-playing format, and grades are given to them
Introduce B-Label to customers who use electronic patient chartsystems
B-Label should be equipped as standard at facilities where
Qualis is newly placed into service

In the operation of laboratories, we will suitably target local hospitals
for acute care and medical check-up centers that have difficulty insecuring laboratory technicians (17 facilities in FY2023) andmanage progress

Departmentsin charge

Related SDGs

Credit Guarantee Department, BML
Clinical Testing Headquarters, andIn-hospital Examination Division

Standardization of analyzers

Main initiatives

Sales Division

Development of high-quality, high-value-added businessContribution to
medical careBusiness

To enhance sales capabilities of the Company, it is important tostrengthen the development of both sales human resources who
have professional knowledge of the industry and sales strategies.
This theme has been identified to strengthen the development ofsales human resources who seek to foster communication withpeople involved in medical care in order for the Company to expand
and deepen its customer base and enhance its capacity further in
non-insurance fields.

Enhancingsales
capabilities

Fiscal year by whichto achieve goals

KPIs

SystemDivision

It is important for companies that provide various products orservices to ensure the quality and safety of their products or service
so that customers and patients can consider the products or services
safe and reliable. With this theme identified to maintain and improvecustomer and patient satisfaction and continue to be a trusted
company, we will work to bolster and improve quality control.

Quality
improvement

Goals (qualitative/quantitative)

Definition

Advanced
Group Planning
Technology & Department andDevelopment Human Resources
Division
Department

Materiality

Sales
Division

Materiality
categories*DMR (Diagnostics Medical information
Representatives)

BML must contribute to medical care particularly to realize its Policy of “Dedication tocreating a healthy and cultured society.” At the same time, the Company is required tosurely address environmental issues such as climate change.
BML is requested to focus especially on the development of human resources
responsible for sustainable growth and the material issue of diversity, equity, andinclusion.

Comments from experts
on materiality

BML’s operations are linked directly with social contribution. I appreciate the Company’s
initiatives seeking to simultaneously improve quality and productivity of the identified
operations through DX and heighten its sales sensitivity to latent demand in the medicalcare industry as a driving force for social contribution.
Going forward, it is desired that BML will flexibly adjust and improve the KPIs andtargets in response to changes in social demand, associate them with its daily pursuits,
and enhance the effectiveness and concreteness of its approaches to the issues.

37

BML REPORT 2023

Shigeru Osawa

BML is a company that plays an important part in supporting medical care services forsaving people’s lives, and so I think it is imperative for the Company to surely address
global environment issues, especially climate change.
“Compliance” and “maintenance and improvement of quality” are credentials thatcompanies must have to operate as going concerns. I expect that each and every
employee performs his or her duties with the highest sense of ethics and a strong
sense of responsibility for quality.

Yukiko Yoritaka

Tatsuharu AraiBML REPORT 2023

38

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Message from the Vice President

Identification of 13 material issues
Company-wide discussion onsustainable growth in the
Sustainability Committee

Nobuki Arai,
Representative Director andVice President

Four material issues frombusiness perspectives
The BML Group has identified 13 material issues(materiality) in six categories, namely “Response to
climate change,” “Realization of a rewarding
workplace,” “Respect for human rights,” “Strengtheningof governance,” “Development of high-quality, highvalue-added business,” and “Contribution to medicalcare,” to achieve sustainable growth.
In an era that requires consideration of the impacts onenvironment and society, such as responses to global
warming and diversity, equity, and inclusion, identifying
important issues for stakeholders and BML as ourmateriality and setting KPIs for them have the effect of
encouraging the selection and concentration ofmanagement resources, and by extension, enhances
the effectiveness of various activities. While BML has
been engaged in various initiatives for environmental
response and human resource development for sometime, I also believe that focusing on specific themes asmateriality will encourage more concrete actions.
In the materiality development process, we asked theexecutive team to complete a questionnaire aboutmateriality identification, after which we held a workshop

39

BML REPORT 2023

with them on the topic. In that process, from “business”
perspectives, we identified two categories, theaforementioned “Development of high-quality, highvalue-added business” and “Contribution to medicalcare,” and four material issues corresponding to those
two categories, specifically, “Quality improvement,”“Enhancing sales capabilities,” “DX (digitaltransformation),” and “Contribution to medical care.”I find it highly significant that we were able to identify,
through the executive team workshop in this way, ouroriginal material issues related to “business,” in addition
to those related to “environment,” “society,” and“governance.” We also set KPI achievement targets foreach materiality as a part of the target management
incentives for our operating officers, which I believe willraise the effectiveness of our business.

Standardization of testing andimprovement of sales staff quality
As a specific initiative, in the area of “Quality
improvement,” partly as a result of past M&As, different
labs had different testing equipment, with each model
requiring different SOPs. As such, standardization ofequipment had become an issue from the perspectiveof preventing problems. To this end, we are working on
initiatives for selecting standardized equipment inaccordance with the scale of the lab and replacing themat the appropriate time of equipment renewal.
For “enhancing sales capabilities,” we will encourage
our sales staff to obtain the qualification of Diagnostics
Medical information Representative (DMR). As many of
our sales staff have not studied clinical testing formally,
we believe that improving their qualities in that area will
enhance their sales capabilities, which will help toincrease the trust of our customers.
“B-Label” is one of our initiatives for DX. This is asystem that automatically prints blood sampling labelswith patient names by container and material with theaims of improving the efficiency of blood sampling
operations, preventing specimen mix-ups, andimproving the efficiency of specimen receipt
confirmation. We expect this to provide the impetus forthe promotion of DX.
One other initiative is “contribution to medical care.”With the growing attention being focused on genetic
testing in recent years, we have established a genepanel test in which multiple genes are analyzed
simultaneously, rather than a single gene being
analyzed, for the diagnosis of genetic disorders. By
increasing the possibility of gaining more accurate
diagnosis with a single test, we believe that we will beable to contribute to the diagnosis and treatment ofpatients with unknown causes. This fiscal year, we plan
to release gene panel tests for three disease groups,
including familial hypercholesterolemia.

Specific ESG initiatives
As initiatives for climate change, to increase thesophistication of our TCFD, we have newly conducted arisk and opportunity assessment based on the “1.5°C
scenario.” In addition, while we have previously lookedat the single-year effects in the target year, we are now
examining the cumulative impact up to and including
the target year.
Solar panels will be installed on the walls of the BML
General Laboratory’s new buildings in Kawagoe, whichis scheduled for completion in August 2024, to reduce
CO2 emissions. We also completed major repairs of theexisting building several years ago, and we haveupgraded the heat source used for air conditioning. With
these initiatives, we expect to reduce CO2 emissions by
1,269 tons in 2029.
We are also working to replace our fleet of
approximately 3,000 vehicles, which are currently used
for sales and specimen collection and delivery operations
nationwide, with electric vehicles. In addition to starting
the introduction of EVs for part of our sales fleet this fiscal
year, given that EVs suitable for collection and delivery
operations are scheduled for launch next fiscal year,

we plan to install EV charging facilities in conjunction withthe construction of the new buildings to start switching to
EVs for collection and delivery vehicles.
We will also encourage relevant facilities to obtain
ISO14000 certification, an international standard forenvironmental management systems. The BML General
Laboratory has been ISO14000 certified since 2000,
and two affiliated company facilities are preparing toobtain this certification next fiscal year.
For “respect for human rights,” BML established its
human rights policy in April 2023. In terms of humanrights due diligence, acknowledging the need to deepen
our employees’ awareness of human rights, we willcommence human rights training for our employees inthe second half of FY2023. As supply chain
management is an issue for preventive/corrective action
against negative impacts, we plan to consider specificmeasures while communicating with suppliers, including
reagent manufacturers.

Discussions with revision in mind givenchanges in the business environment
In September 2022, the BML Group established theSustainability Committee, an organization to discuss anddecide on approaches and plans for our activities, withthe aim of promotion of sustainability management. The
Committee meets on a quarterly basis and reports theresults of those meetings to the Board of Directors.
Based on feedback from the Board and otherconsiderations, the Committee works to improve thesystems and update implementation plans asnecessary. In the past, environmental issues and ESG
issues such as diversity, equity, and inclusion weremainly discussed within each relevant department.
However, after the establishment of this committee, I
believe that we are now better able to discuss theseissues from a company-wide perspective by gathering
the opinions of officers and similar ranks of people fromeach department.
As the next Medium-Term Management Plancommences in FY2024, in addition to the financial
targets, we intend to incorporate non-financial KPIs,
including sustainability perspectives, into our targets.
Going forward, with regard to sustainability, it ispredicted that the number of new issues to beaddressed, as well as external demands for information
disclosure, will increase. In our sustainability activities,
we realize that even a single target, such as penetrationof diversity, equity, and inclusion within the company,
cannot be achieved overnight. I believe that it isimportant for us to continue to work on sustainability
activities, while constantly reviewing our approach tobusiness as a company, looking ahead to changes inthe environment in society.

BML REPORT 2023

40

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Sustainability Management
In accordance with our Policy, basic sustainability policy, environmental policy, and compliance manual,
we, the BML Group, 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.

SDGs initiatives
the Group Vision of “Becoming the most trusted choicein the medical world.”

The BML Group will promote various initiatives for thedevelopment and growth of a sustainable society under

The BML Group’s initiatives to contribute to the SDGs

Basic Sustainability Policy
1. Contribution to society

The Group’s main business areas[Clinical testing]

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 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 respect the human rights of all people affected by ourbusiness activities. We will also promote diversity, equity,and inclusion, and strive to foster a corporate culture inwhich employees can work safely and comfortably.

4. Establishment of trust from society
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, andappropriate information disclosure.

[Environmental testing][Food testing]Supporting medical education
foundations
Holding laboratory forums

Spreading cloud-based
electronic patient charts
Rollout of B-Liner

Measures to enhance theresilience of the BML General
Laboratory
Installation of solar power
generation systems

Rollout of DRS
Internalizing outsourced
operations

Opening daycare centers to
the public

Strengthening alliances(lab operations and systemdevelopment)

Stakeholder engagement
Sustainability promotion system
The BML Group has established a Sustainability
Committee chaired by the Representative Director andVice President. The Committee aims to promotesustainability of the entire BML Group, and discusses
and decides on the approach and plans forsustainability. The Committee meets quarterly toregularly discuss the approach and evaluate activities,
and works on improving the system and updating theimplementation plan as necessary. The Committee
members consist of officers and general managers of
the relevant divisions, and the General Affairs
Department serves as the secretariat.

Board of Directors
Recommend/report

Consult

Sustainability Committee諮問
Committee chairperson: Representative Director and Vice President
Committee members: Officers in charge of relevant departments
Secretariat (General Affairs Department)
ReportInstruct
Each department

Major agendas at the Sustainability Committee in FY2022
Major items
Business

September Environment
Society
GovernanceBusiness
December
Environment
Business
April

Environment
Society41

BML REPORT 2023

year), participate in conferences sponsored by securities
firms, and hold individual interviews and send reports toshareholders to promote understanding of the Company,
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.

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 forsecurities analysts and institutional investors (twice a

Medium items
Formulation of materiality
International initiatives and response to rating agencies
Building sustainability training and e-learning systems
Response to TCFD recommendations and CDP questionnaire
Process for establishing GHG emission reduction targets
Strict implementation of environmental management system (ISO14001) and its deployment to Group companies
Development of human rights policy
Support for social contribution activities
Initiatives to dateMateriality identification
Progress toward signing the UN Global Compact
Progress on the refinement of TCFD response
Initiative to reduce GHG (CO2) emissions (reduction targets, specific strategies)
Deployment of ISO14001 to Group companies
Setting non-financial KPIs for materiality identification
Signing the UN Global Compact
Progress on the refinement of TCFD response
Initiative to reduce GHG (CO2) emissions
Deployment of ISO14001 to Group companies
Human rights initiatives

Stakeholders

Dialogue means and opportunities
WebsiteVarious events and lectures
Laboratory forums

Sales activities
Accepting visitors to BML General Laboratory

Business partners

Policy briefings and opinion-exchange meetings
Training sessions
Accepting visitors to BML General Laboratory

Participating in exhibitions
Visiting business partners

Shareholders andinvestors

IR website
Briefing sessions for analysts
Issuing reports to shareholders
Small meetings for investors and analysts

Financial results presentations (twice a year)
General Meeting of Shareholders
Issuing integrated reports
Company presentations for individual investors

Intranet
Human resources training
Whistleblower system

In-house newsletter
Employee interviews
Exchange events

Sponsoring and participating in regional events
Briefing sessions for local residents on
construction projects

Accepting visitors to BML General Laboratory

Customers

Employees
Government/local
governments/industry
organization
Academic organizations/research institutions

Local communities

Open innovation (joint research)
Sponsoring and participating in regional events
Briefing sessions for local residents on
construction projects
Opening corporate daycare centers to the public

Accepting visitors to BML General Laboratory
Providing workplace experience

BML REPORT 2023

42

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Environment
Environmental Initiatives

Initiative (1) Reduction of electricity use in laboratories

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 to solve environmental issues is an importantmanagement issue. We will install solar power generation equipment and adopt energy-efficient, high-efficiency
heat source equipment for air-conditioning systems in the BML General Laboratory’s new wings to be completedin August 2024. In addition, we are working to reduce GHG emissions by switching part of electricity we use tothat from renewable energy sources.

BML Group Environmental Policy

We consider the reduction of electricity use inlaboratories, including the BML General Laboratory, as
one of the most important issues. In particular, testing
equipment used in laboratories emits a considerable
amount of heat, and if the room temperature rises as aresult, problems arise in the operation of testing
equipment. For this reason, air-conditioning systems are
extremely important, and increased electricity
consumption has been an issue. Therefore, we havebeen working on the renovation of air-conditioning
systems and reviewing piping since 2020. This is

expected to reduce CO2 emissions by 1,200 tons per
year. Furthermore, solar panels will be installed on thesouth wall of the BML General Laboratory’s new wings,
which are to be completed in August 2024, to utilize
renewable energy. Introduction of high-efficiency heatsource air-conditioning systems is also planned. By
minimizing energy use, we will reduce CO2 emissions
and electricity use. The combination of these measures
will reduce CO2 by approximately 478 tons andelectricity by 1,060,000 kw/h per year.

Installation of solar power generation equipment

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

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 continue to preserve the environment in accordance with our environmental management system.
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 actively disclose environment-related information.
8. We promote environment preservation activities in the supply chain by collaborating with business partners.

[Annual]Reduction of CO2
emissions by

Installation of power generation panels on the entire south wall of
the new wing to utilize natural energy

478 t-CO2/year

Improved efficiency of air-conditioning equipment
Improvement of energy efficiency with high-efficiency
heat source equipment

Initiative (2) Introduction of EVs
The BML Group constantly operates approximately
3,000 vehicles for sales, collection, and delivery. While
we mainly use gasoline-powered vehicles at the
moment, we plan to switch all these vehicles to eitherEVs, PHVs, or HVs, according to the purpose of use,regional characteristics, and other factors. This will be
one of the measures we take to achieve the CO2
reduction target for FY2030. Branch offices in Tokyo

have adopted EVs ahead of other areas. Taking
advantage of the know-how gained from theirexperience, branch offices across Japan will adopt EVs
in phases from FY2024. We intend to roll out this policy
across BML Group companies that use vehicles.

CO2 reduction

Information Disclosure Based on TCFD Recommendations
Initiatives to Address Climate Change

Relevant materiality

In June 2022, the BML Group expressed its endorsement of the

Climate change

recommendations of the Task Force on Climate-related Financial

The BML Group, which has the Policy of“Dedication to creating
Energy managementa healthy and cultured society,”considers environmental initiatives
as the starting point for maintaining and improving people’s health and actively works to reduce
its environmental impact.
Reduction of electricity consumption
To minimize the electricity needed for stable operation of
testing equipment, the BML General Laboratory in
Kawagoe is upgrading its air-conditioning systems andreviewing all piping.

Reduction of water use
The BML General Laboratory makes effective use offinite water resources by sourcing part of the water
it uses from groundwater.

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BML REPORT 2023

Safe management of waste
We strive to prevent the contamination and emission of
infectious substances, organic solvents, and poisonous
substances, which the nature of our business forces us
to handle. Some of our departments use organic solvent
reclamation equipment to extract organic solvents fromliquid waste and reuse them. We thoroughly ensure that
infectious substances are treated in the BML General
Laboratory to eliminate their infectivity before disposal.

896t-CO2

from the above
initiative

Relevant materiality

Climate change
Energy management

Disclosures (hereinafter, “TCFD”). We will continue to actively engage
in information disclosure based on the recommendations of TCFD.

Governance and risk management
The BML Group has established the Sustainability
Committee, chaired by the Representative Director andVice President. The Committee recognizes that
addressing climate change is a high priority issue andconducts climate change scenario analyses (risks andopportunities). The Committee also identifies those risks
that have a particularly large impact on management interms of financial impact and the likelihood of
occurrence as critical risks. Risks and opportunities
related to climate change as well as our targets andprogress are discussed at the Committee and reported
to the Board of Directors on a quarterly basis.

Board of Directors
Submit the basic
policy and key
issuesSustainability
Committee

Determine a basic policy and key
issues related to climate change
response
Oversee climate change response

Supervise
Discuss and formulate the basic
policy on climate change response
Discuss key issues related toclimate change

BML REPORT 2023

44

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Potential

Key risks andtimeframes
opportunities identified for45

Cost ofswitchingexisting
facilities

BML REPORT 2023

Potential impact

Examples of possible response
measures

Low

4°C scenario(Impact is assumed to be insignificant)No significant financial impact, but adapt to a
decarbonized society and turn it into an
opportunity
Take advantage of tax benefits, emissions
trading, and other systems and lower carbon
emissions

Medium

1.5–2°C scenario[Risks]Increased test costs and other expenses due to higher electricity retail unit
prices[Opportunities]
Decreased test costs and other expenses due tolower electricity retail unit prices

Cost increase in 1.5–2°C scenario is within
absorbable range and impact is low, but wewill continue to improve energy efficiency
Reduce electricity consumption andstrengthen self-charging capacity byswitching to LED lights and installing solar
panelsMediumMedium term

Plastic tax

Mediumterm

Renewableenergyprocurement
costs[Risks]Introduction of renewable energy facilities
Increased costs due to green power purchases and other measures[Risks]Increased costs due to a certain level ofrenewable energy (minor compared to the
1.5–2°C scenario)

Consider all options for fossil fuel phase-out(including gas)

[Risks]Increased costs due to taxation on plastics[Opportunities](Assuming no plastic tax is applied)
Expand sales opportunities through the introduction of biomass-derived
containers, low-carbon glass containers, etc.
[Risks]Cost increase of approximately ¥400 million per year due to conversion oftransportation vehicles to EVs and introduction of recharging facilities[Risks]Increased costs due to the introduction of energy saving and renewable
Cost increase of approximately ¥200 million per
energy facilities and other measures
year due to conversion of some vehicles to EVs[Opportunities](minor compared to the 1.5–2°C scenario)
Enhanced environmental reputation from customers due to the introduction of lowcarbon logistics networks and energy saving and renewable energy facilities

Consider all options, including the reductionof plastic use, recycling of waste, use of
non-plastic products, and collaboration with
suppliers
Utilize public subsidies to replace collection
and delivery vehicles and introduce
low-carbon facilities
Transport specimens more efficiently by
optimizing collection and delivery routes,
reducing the number of vehicles, and othermeasuresMediumMediumLightningFlooddamageInsurance
premiums(Impact is assumed to be insignificant)Continue with appropriate information
disclosure and dialogue(Impact is assumed to be insignificant)Continue with appropriate information
disclosure and dialogue[Risks]Decreased credibility and loss of sales opportunities
due to testing suspensions and delays atlaboratories resulting from water shortages
Increased water procurement costs[Opportunities]
Enhanced competitiveness and decreased water
use costs due to the introduction of dried testing[Risks]Loss of sales opportunities and increased costs ofdisaster countermeasures due to logistics routedisruptions, specimen delivery delays and suspensions,and testing suspensions and delays at laboratories,
resulting from weather changes and disasters[Opportunities]
Increased competitiveness and reputation fromstakeholders through disaster responses

Enhance resilience against weather patternchanges by introducing road heating systems
and uninterruptible power supply devices andtaking other measures

MediumCosts are within the absorbable range andimpact is low, but we will continue to strive
to improve energy efficiency
Work on reducing load by installinghigh-efficiency heat source equipment andfacilities.
Strengthen temperature control inlaboratories and select testing equipment
based on the premise that it will be used
under high temperatures

Medium[Risks]Increased temperature control costs duringtransportation and storage of specimens, as wellas increased capital investment in and repair
costs for air-conditioning equipment(approximately ¥500 million)
Decreased sales opportunities due to higher riskof specimens being untestable and lower test
accuracy

Conduct water risk assessment at each site
Reduce water use by recycling wastewater
Invest in larger water storage tanks for purewater equipment

Low

Medium[Risks]Failure to respond to more-than-expected increase in client companies’
demand for environmentally friendly measures, resulting in decreased orders
due to a reputation as a company lagging behind in environmental measures[Opportunities]
Appropriate response to increase in client companies’ demand forenvironmentally friendly measures, resulting in increased orders due to a
reputation as a company that takes progressive environmental measures[Risks]Increased financing, disclosure, and engagement costs due to the accelerationof divestment trends and stronger pressure on companies that do not
implement environmental management[Opportunities]
Sustainable finance enabled by the implementation of environmental
management, resulting in low-interest-rate financing[Risks]Decreased credibility and loss of sales opportunities due to testing
suspensions and delays at laboratories resulting from water shortages (minor
compared to the 4°C scenario)
Increased water procurement costs (minor compared to the 4°C scenario)[Opportunities]
Enhanced competitiveness and decreased water use costs due to theintroduction of dried testing (minor compared to the 4°C scenario)[Risks]Loss of sales opportunities due to logistics route disruptions, specimen delivery delays
and suspensions, and testing suspensions and delays at laboratories, resulting fromweather changes and disasters (minor compared to the 4°C scenario)
Increased costs of disaster countermeasures (minor compared to the 4°C
scenario)[Opportunities]
Increased competitiveness and reputation from stakeholders through disaster
responses (minor compared to the 4°C scenario)

Examples of possible response
measures

Strengthen response to the infectious disease
market in association with risingtemperatures[Risks]Increased costs of employee health management(minor compared to the 4°C scenario)

Create a working environment that is viable
under high temperatures

Low

Rising sea
levelsMediumLong termLong term
Medium term
Medium termLong term

Changes inworkingenvironment

4°C scenario[Risks][Risks]Decrease in flow of people and increased
Decrease in flow of people and increased refraining from medical examinations refraining from medical examinations due todue to rising temperatures (minor compared to the 4°C scenario)
rising temperatures
Increased costs for dealing with new tests
Increased costs for dealing with new tests[Opportunities][Opportunities]
Expansion of sales opportunities due to increased demand for new tests andExpansion of sales opportunities due to increasedfood testing, associated with increases in patients with infectious diseases and demand for new tests and food testing, associatedfood poisoning (minor compared to the 4°C scenario)
with increases in patients with infectious diseases
and food poisoning

Low

identified the risk of lost sales opportunities, such as
flooding of key sites and delivery delays or destructionof specimens due to supply chain disruptions, while atthe same time identifying opportunities in whichappropriate capital investment to make sites more
resilient from a BCP perspective will lead todifferentiation from competitors and positively affectsales 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 businesshas a certain level of resilience to climate change.

[Risks]In the case where a carbon tax is imposed on CO2 emissions from businessactivities, the cost will increase by up to ¥100 million per year (assuming acarbon price of $250/t-CO2 in 2050).
[Opportunities]
Increased sales opportunities due to implementation of low-carbon inspection
processes
Decreased carbon tax costs due to conversion of transportation vehicles to EVs

MediumMedium term

Electricity
expensesMediumterm

Carbon tax

Medium term

Carbon prices, national carbon emission targets and policies
Spread of low-carbon,
next-generation
technologies

Transition risks and opportunities

emergence

MediumPotential

Key risks andtimeframes
opportunities identified forLevel ofimpactOn the basis3 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 identified. In accordance with thedata, we have examined the risks and opportunities
associated with the transition to a decarbonized society
and the physical risks and opportunities arising fromclimate change, and have identified key risks andopportunities that could impact our business by 2050.
For example, under a hypothetical scenario in which
extreme weather events become more severe, we have

Demand forvarious tests

Potential impact
1.5–2°C scenario[Risks]Increased temperature control costs during transportation and storage of
specimens, as well as increased capital investment in and repair costs for
air-conditioning equipment (approximately ¥200 million)
Decreased sales opportunities due to higher risk of specimens being
untestable and lower test accuracy

High

Estimate of business impact in 2050

Airconditioning
load

Medium term

Consider measures to
respond to climate changerisks and opportunities thathave particularly large
business impacts
Establish an implementation
system, as necessary

Short term

Estimate the financial impact
on business for eachscenario caused by thehighly significant risks andopportunities using theforecast data gathered andthe Company’s own figures

Changes inweatherLong term

Gather external forecast
data with a high degree of
reliability regarding the key
risks and opportunities
identified
Project the future in 2050
under 1.5–2°C/4°C
scenarios

Water
shortages

Long term

Gather information on climate changerisks and opportunities related tohealthcare and clinical testing
Identify transition and physical risks
and opportunities that may occur in the
Company
Assess the significance of risks andopportunities from the perspective of
its impact on the Company’s businessChanges in
reputationfrom investors

Long term

Consider countermeasures

Extreme weather events

Estimates of impact on businessPhysical risks and opportunities

Gather future projection data

Changes in
reputationfrom clientcompanies

Short
term

Analysis process
Identification of key risks and opportunities

Reputation

Changes in precipitation and weather patterns

4°C scenario (equivalent to RCP 8.5)
If global warming countermeasures beyond the current level are nottaken, the temperature will rise 3.2°C to 5.4°C compared to the levels
during the Industrial Revolution
2°C scenario
If strict measures are taken, the temperature will rise 0.9°C to 2.3°C
compared to the levels during the Industrial Revolution
1.5°C scenario (equivalent to RCP 2.6)
If a fundamental system transition is achieved, it is highly likely that thetemperature rise will be below 1.5°C compared to the levels during theIndustrial Revolution

Rising average temperatures

recognition that strict measures, including a fundamental
system transition, are necessary to address the rapid
progress of global warming.

Rising sea
levelsWe analyze the impact of climate change as of 2050, inreference to the climate change scenarios published by
the IEA (International Energy Agency). BML has
selected the 1.5–2°C/4°C scenarios, based on theTransition risks and opportunities

emergence

Low

Strategy

Level ofimpactEnvironment[Risks]Increased costs of employee health management[Risks]Transportation delays due to port damage, as
well as damage and specimen supply delays at(Impact is assumed to be insignificant)coastal sites
Increased costs of laboratory and office relocation
associated with flood control measures[Risks][Risks]
Impact of slowdown of power, logistics, and other
Impact of slowdown of power, logistics, and other infrastructure due toinfrastructure due to lightning
lightning (minor compared to the 4°C scenario)
Increased equipment repair and retesting costs
Increased equipment repair and retesting costs associated with lightningassociated with lightning damage to laboratories
damage to laboratories (nearly ¥10 million)(approximately ¥10 million)[Risks]Loss of sales opportunities due to specimendelivery delays and other issues caused by wind
[Risks]and water damage, decreased credibility from
Loss of some sales opportunities due to wind and water damage, decreased
customers, and increased costs for securingcredibility from customers, and increased costs for securing inventories,
keeping logistics networks in place,keeping logistics networks in place, and finding laboratory personnel and other inventories,
and finding laboratory personnel and other workers
workers
Lossofincome¥1,200 million)
Loss of income (approximately ¥700 million) due to damage to supplier sites, due to damage to(approximately
supplier sites, as well as
as well as damage to equipment and suspension of inspection lines caused by damage to equipment
andsuspensionofflooding in test labs
inspection lines caused by flooding in test labs
[Opportunities][Opportunities]
Improvement of market competitiveness and creation of new business
Improvement of market competitiveness andtransactions by strengthening BCP for collection, delivery, and transportation
creation of new business transactions byfunctions, laboratory functions, etc.
strengthening BCP for collection, delivery, andStrengthening of relationships with suppliers through inventory adjustments
transportation functions, laboratory functions, etc.
and other measures
Strengthening of relationships with suppliers
through inventory adjustments and othermeasures[Risks][Risks]Increase in insurance premiums (approximately ¥10 million) in line with theIncrease in insurance premiums (approximately ¥20
risk of damage to sites
million) in line with the risk of damage to sites

Continue to consider strengthening theresilience of and optimizing logistics
networks and sites from a BCP perspective

Strengthen resilience of sites in anticipationof lightning and power outage

Continue to consider strengthening theresilience of and optimizing logistics
networks and sites from a BCP perspective
Accelerate the establishment of a system tosecure personnel in emergencies andstrengthen collaboration with suppliers

Costs are within absorbable range and impact
is low

Indicators and targets
The BML Group calculates its GHG emissions (total
amount, Scope 1 and 2) and works toward theachievement of GHG emissions reduction targets.
Going forward, we will also work toward thecalculation and disclosure of Scope 3 emissions.

[GHG emissions (t-CO2) of the BML General Laboratory]
2020

2021

2022

Scope 1

5,497

5,627

5,165

Scope 2

10,437

10,764

11,172

BML REPORT 2023

46

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Environment
BML’s Initiatives to Address Environmental Issues
Dry distillation gasification combustion system (incinerator)
BML started before others to handle infectious waste,
which is said to be difficult to treat. In June 2006,
we installed a dry distillation gasification combustion
incinerator in the BML General Laboratory. This has
enabled us to treat 12 tons of infectious waste per day
within the Company.
A conventional incinerator combusts waste in one
chamber, with the waste put into the incinerator itself.
Meanwhile, a dry distillation gasification combustion
system has a dry distillation furnace (gas generation
furnace where waste is thermally decomposed), wherewaste is put into, and a separate combustion furnace,
where generated gas is combusted.
When a conventional incinerator is used, maintaininga high temperature in the incinerator is difficult, due tothe unstable combustion temperature resulting from thecycle of putting in waste and combusting it taking place
in one chamber. For this reason, the operation depends
on auxiliary combustion equipment (burners),
consuming a large volume of fossil fuels.
On the other hand, a dry distillation gasification
combustion system has a gas generation furnace and aseparate combustion furnace as mentioned above, andthe volume of gas generated is controlled to maintain astable temperature in the combustion chamber.

Rooftop greening initiative

The temperature in the combustion chamber remains
stable as gas generation is controlled. This enables
self-sustaining combustion using energy from waste
only, without depending on auxiliary combustion
equipment.
In addition, to curb dioxins, it is a legal obligation thatthe temperature should be 800°C or higher, gas should
remain in the combustion chamber for two seconds, andthe structure should allow gas agitation. The combustion
temperature of BML’s incinerator is controlled to remain
at 1,050°C during operation, achieving effective
operation against dioxins.
Compared with conventional incinerators, ourincinerator uses substantially less fossil fuels to maintainstable combustion at a high temperature. Even though
we are incinerating the same waste, we have been able
to achieve drastically lower levels of carbon dioxide
emissions from the chimney.
While recycling infectious waste can be difficult due
to legal regulations, we will continue to consider
measures toward decarbonization.
Comparison
witha conventional
incinerator

Reduction of emissions by

372t-CO2 /YEAR

Since 2012, the BML General Laboratory has beenworking on rooftop greening by taking advantage of therooftop space of approximately 600 m2. This has served
as a countermeasure against the urban heat island
phenomenon, as well as provided better insulation andbetter views. Working toward the construction of the newwings, we will continue to strive to create a workplacewith rich greenery.

Rooftop greening

Environmental beautification initiative
As part of its environmental beautification activities,
the BML General Laboratory has taken part in a clean
campaign (zero garbage campaign) since FY2002.
This is an activity to pick up trash in cooperation withcompanies in the Matoba Industrial Park (Matoba,
Kawagoe City, Saitama), where the BML ResearchInstitute is located. This is a free-participation activity
that takes place during the lunch break and lasts about
20 minutes. The cleaning took place in May and October
for FY2022, and an annual total of 54 employees
participated from the BML Group. Overall, an annual
total of 766 employees from 27 companies took part andcollected approximately 193 kg of garbage. We willcontinue to work on environmental beautification incooperation with regional companies.

Zero garbage campaign

Flooding countermeasures
We plan to relocate testing equipment and otherfacilities on the first floor of the BML General Laboratory
to the second floor or above after the construction of the
new wings. As a temporary measure until then,the first-phase construction works for flooding
countermeasures were completed in August 2023.

This has made the current General Laboratory resistant
to flood up to one meter above ground level.
In addition, drainage pumps will be installed in theunderground pit by December 2023 to cope with
underground spring water.

Water stop door

Shutter with water stop plate

Dry distillation gasification incinerator

47

BML REPORT 2023

BML REPORT 2023

48

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Society
Human Resource Development

Relevant materiality

Employment anddevelopment of
BML has been working on the development of human resources who
human resources
can independently and proactively fulfill role-specific responsibilities in
the organization. A new education system was established in April 2021. We offer mindset training to instilla shared understanding of role-specific responsibilities and behaviors required at each level, as well as
training programs that equip employees with necessary skills and knowledge. We also conduct selective
training to sustainably develop future executives. To ensure diversity, we actively select and develop female
human resources.
1. Systematic, medium- to long-term rank-based training
to develop core human resources that support theCompany’s sustainable development

2. Creation of an environment wherelearning has taken root andeach employee keeps learning voluntarily

Mindset training to instill a shared understanding ofrole-specific responsibilities at each level (at the timeof promotion)
Selective training to develop future executives andmanagers
Skill and knowledge training, ESG training, and IT
literacy training that take advantage of e-learning

Regular and continued learning practices throughe-learning training
Provision of self-learning opportunities throughcorrespondence courses and online content
Payment of examination fees, incentives, and otherbenefits to encourage employees to obtain
qualifications

Diversity Promotion

Relevant materiality

Diversity, equity,
The BML Group is working to advance diversity, and is particularly
and inclusion
focused on promoting the active participation of women. To produce
next generation core human resources from women, who account for about half of all employees, we arepressing ahead with initiatives to select and train women and promote them to management positions.
In addition, a working group comprised of women only has been established to take up specific views fromwomen’s perspectives and reflect them in our measures. We are reviewing personnel systems and otherframeworks based on the recommendations from the working group. Other initiatives include diversity
training and ikubosu (family-friendly boss) training, conducted every fiscal year to raise awareness of all
employees. By pressing ahead with the above diversity promotion policies, we strive to achieve a workplace
where women can work comfortably and are rewarded for their efforts.

Five-year diversity promotion plan (April 2021 to March 2026)
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%

Implementation of human resource development training
TargetTraining nameContents

Results

e-learning training

Mental health/Diversity / Communication
OJT / Labor management / Health management /Engagement
Ikubosu (family-friendly boss) /Childcare and nursing care /Compliance / Human rights

Held a total of 19 sessions

IT literacy
enhancement training

Information security / IoT / Network
Computer configuration / Social media risks /Targeted email attack
Microsoft Office hacks

Held a total of 23 sessions

Rank-based training

Role recognition training

Held a total of 25 sessions(employees attend once
for each level)

Systematic role and skill training to ensure diversity in corehuman resources

Next executive level /Held a total of 11 sessions
Next management level /Held a total of 8 sessions

All levels

General manager and deputy
general manager level /Assistant general manager
and section chief level /Chief and deputy chief level
Next executive levelcandidates
Next management levelcandidates

Message froma female employee

Selective training

Attending the next management
candidate training

The training changed the way I interact with the section members. There are
employees with different values in my workplace. Attending the training andequipping myself with management skills and knowledge has enabled me to handle
the actual cases that arise in the field from an objective standpoint, thinking“I will try this,” or “What if I try this?” By doing so, I feel that my colleagues havecome to open up more.

49

BML REPORT 2023

Tamie Yamamoto

Conducting diversity training
Diversity training for all BML employees is conducted
regularly for awareness reforms throughout theCompany. We are working to create a workplaceenvironment in which employees can work comfortably
by eliminating unconscious bias of each employee andequipping employees in management positions withdiversity management skills.

Women’s Working GroupTo reflect views of women, who account for about half ofall employees, in company measures, the Women’s
Working Group was established in April 2021 to actively
exchange opinions.
To create an environment that facilitates women’s
advancement, the working group makes
recommendations for the improvement of both thesystems and how they are implemented.
The recommendations have led to various measures
being made into systems.
New members (of different ages and job categories)
are invited to join every fiscal year. Helpfulrecommendations from them will advance the creationof a workplace environment where women can work
comfortably.

BML REPORT 2023

50

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Society
Promotion of Health Management

Relevant materiality

Employee healthand safety

To achieve our Policy of “Dedication to creating a healthy and cultured

Indicators and targets
Under the supervision of our occupational physicians, we have set KPIs and target values for them, and have beenworking to achieve the targets.
Item

FY2020

FY2021

FY2022

Target for FY2025

100.0%

100.0%

100.0%

100.0%

Men

60.9%

61.2%

64.7%

63.0%

Women

66.0%

64.9%

69.2%

67.0%

Percentage of non-smokers

77.7%

78.1%

78.8%

82.0%

Employees who exercise regularly

15.9%

15.4%

16.2%

17.0%

Percentage of employees receiving stress checks

78.4%

71.7%

86.6%

80.0%

Monthly overtime hours (including managers)

18.4 hours

21.0 hours

16.8 hours

18.3 hours

Days of annual paid leave utilization

11.8 days

10.9 days

12.1 days

12.0 days

98.2%

99.5%

100.0%

97.0%

100.0%

100.0%

Presenteeism

80.8%

83.0%

Absenteeism

2.4 days

2.3 days

3.0

3.2

society,” we increase all employees’ awareness toward health andcreate a workplace environment where each employee maintain and improve health independently.

Percentage of employees receiving regular health check-ups

We will increase corporate value by enhancing employee engagement and performance.

Ratio of employees with appropriate weight levels(BMI 18.5 to less than 25.0)

Health management promotion system
BML has established a health management
promotion system chaired by the Representative
Director and Vice President, who is a doctor.
We have seven occupational physicians and three
nurses as specialist staff to manage the health of
employees across Japan. In addition, the nurses
have health management advisor and health master(expert) qualifications, and give health advice toemployees.
Kawagoe Clinic has been set up as the healthmanagement promotion department. It plans andimplements various health promotion initiatives incooperation with the Human Resources Department.

Board of Directors
Recommend/
reportConsult
Sustainability Committee

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

Mental health training

Secretariat
reportInstruct

Health management
promotion department(Kawagoe Clinic)

Cooperation

Participation rate for health promotion training

Human Resources
Department

Work engagement (Utrecht Work Engagement Scale)

98.0%*Targets have been set based on the national average in the Ministry of Health, Labour and Welfare’s survey and the current state of affairs in BML.
*Presenteeism: A state where an employee is at work but cannot demonstrate full work performance due to health issues
Absenteeism: Absence from work due to injury or sickness
Work engagement: Vitality, passion, and devotion toward work

Formulation of a strategy map
BML considers retaining human resources andimproving performance for a sustainable growth asa management issue which we hope to resolve bypromoting health management. We have formulated
a strategy map as shown below to work on the issue.
Return of investment in healthInvestment in healthInvestment inhealth that resultsin various returns
Varioushealthcheck-ups

Health-related
training andeventsEnhancement ofleave and shorter
working hours
systems beyond
statutory
requirement

Survey,analysis, anddisclosure ofhealth status

51

BML REPORT 2023

Regular healthcheck-ups
conducted twicea year
Health check-ups
beyond statutory
requirement (cancer
screening, etc.)

Indicators of how we aredoing on measures toinvest in health

Number of times
various healthcheck-ups are
conducted

Indicators of change in awarenessand behavior of employees, etc.

Percentage of
employees
receiving
medicalcheck-ups

Implementationof health-related
training andeventsNumber of training
sessions and events onlifestyle habits, etc. thattook place on
a continued basis

Participation
rate for training
and events

Non-statutory
leave andshorter working
hours systems

Number of mental
health training
sessions that took
place on acontinued basis

Recognition rateof disclosed
figures, etc.

Management ofattendance
management
systemReduction of
overtime andencouragement
to take leave

Implementationofquestionnaires

Number ofquestionnaires
implemented ona continued
basisManagement ofstandard
headcount

Ratio ofstandard
headcount
filledLine-careguidance

Number of
improvement
guidance sessions for
departments with highhealth risk values

Increase in theratio ofemployees withappropriate
weight levels
Increase in theratio ofemployees who
exerciseregularly, etc.

Ultimate health-related
target indicators

Reduction ofpresenteeism

Increase in thepercentage of
non-smokers
Reduction of
employees on
administrative leave
due to mental healthissuesReduction ofabsenteeism

Increase inannual paid
leave utilization
rate
Change in theamount ofcommunication
within theorganization
Reduction of
overtime hours

Management issues
we hope to resolve
through healthmanagement

Improvement ofwork
engagement

Main initiatives
We regularly publish in-house newsletters (Rashinban(Compass)), health management news, and othernewsletters to increase health awareness andknowledge.
We promote lifestyle improvement through a healthapp, which encourages users to exercise regularly,
stop smoking, drink responsibly, and take otheractions.

Occupational Health and Safety
Retaining
human
resources andimprovingperformancefora sustainablegrowth

1. Preventing long working hours
To achieve work-life balance and maintain and improve
employees’ health, we strive to prevent long working hours.
Our fundamental principle is to manage labor basedon BML’s prescribed working hours (7.5 hours/day).
We strictly enforce an internal rule where prior roundrobin approval is needed when an employee’s monthly
overtime hours may exceed the threshold set by theCompany.
2. Addressing mental health issues
We strive to promote self-care by providing stresschecks to all employees, regardless of the size ofbusiness locations. Systematic line-care measures aretaken for departments whose stress values are found toSpecific health challenges are set based onquestionnaire surveys implemented regularly.
We share the challenges with employees, and use
e-learning and other means to provide information on
day-to-day measures that can be taken.

Relevant materiality

Employee healthand safety

After the approval, the Human Resources Department
and each field take measures promptly to prevent long
working hours from becoming chronic.

be high as a result of group analysis. We raiseawareness toward mental health care by providing
information widely and on a continued basis, along withinformation on the engagement survey.

BML REPORT 2023

52

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Society
Quality Control

Relevant materiality

Quality
improvement

BML’s unique quality assurance system, which utilizes an internal audit
department and external accreditation organizations, strictly audits andsupervises all departments.

BML strives to strengthen and improve quality control so that customers and patients find our services safeand reliable.

Major measures for quality improvement
1. Standardization of analyzers
2. Encouragement to obtain external qualifications

Quality assurance system
Internal audits

We set KPIs (key performance indicators) for each of the above measures and advance toward the achievement of targets.

External audits

Internal audit
department

Ministry of Health,Labour and Welfare
Expert committee
members fromprefectural
governments

ISO15189
U.S. CAP
Japan HealthEnterpriseFoundation

Internal
auditsOn-siteinspections

Siteexaminations

Quality management system

1. Standardization of analyzers
As part of major measures for quality improvement, we are standardizing analyzers.
We will strengthen and improve quality control at our nationwide laboratories by standardizing analyzers and standard
operating procedures and standardizing testing processes in accordance with the scale of the laboratories.
Classify nationwide laboratories into four categories based on the below criteria

Select analyzers in accordance with the scale of the laboratories(1) Processing capacity (2) Test items (3) Manpower

Standardization of analyzers and standard operating procedures

and continued improvementCorelaboratories

Large-scalelaboratories

Medium-scalelaboratories

Small-scalelaboratories

Major accreditations and registrations that indicate trust in our quality control
Being ISO15189 accredited means that a quality
management system that meets an international
standard for clinical testing is in place. ISO15189 was
first issued in 2003 as aninternational standard
applied solely to clinicallaboratories. In Japan,
pilot accreditation
reviews started from
October 2004. BML
obtained theaccreditation in
September 2005 for the
BML General Laboratory.

Japan Health Enterprise Foundation sets necessary
requirements for high-quality health-related services,and through on-site inspections,accredits services, products,
and businesses that meet thecriteria.
The PrivacyMark certifies that asystem to handle personal
information appropriately is inplace.
We meet an international
standard for information security
management.

53

BML REPORT 2023

Standardization of nationwide
laboratory testing process

Precision control is the most important challenge for us,
who receive specimens and carry out testing. We havetherefore established the Testing Quality Section, an
in-house precision control department, to implement
strict checks. To ensure thorough quality control,
we have also established the Credit Guarantee
Department as a quality control auditing department,
which is independent of each laboratory department
and gives instructions from an objective standpoint for
improvement.
In addition, we undergo on-site inspections by expert
committee members from prefectural governments andsite examinations by external accreditation organizations,creating a thorough quality assurance system.

Quality Improvement

CAP accreditation is a system that certifies the quality
and performance of clinical testing. The BML General
Laboratory obtained the U.S. CAP accreditation in
1991, and guarantees precision by conducting
surveys for a wide range of testing items.

Corelaboratories

Large-scalelaboratories

Medium-scalelaboratories

Small-scalelaboratories

Analyzers

Analyzers

Analyzers

Analyzers

Standard operatingproceduresStandard operatingproceduresStandard operatingproceduresStandard operatingprocedures

We have selected manufacturers for each field and formulated a five-year introduction plan, covering the entire
BML Group. We will update equipment based on the introduction plan. As KPIs,
we aim to achieve the plan execution rates shown below.
KPIs (key performance indicators)
2026: Plan execution rate of 50% or more
2028: Plan execution rate of 90% or more

100%
Plan
execution rate

0

Plan execution rate of 50% or more

Plan execution rate of 90% or more

Target for 2026

Target for 2028

2. Encouragement to obtain external qualifications
As part of quality improvement and human resource development measures, we encourage our laboratory personnel toobtain after-graduation qualifications.
By letting each of them upskill as they aim to obtain external qualifications, we will improve testing quality.

Establish a training
system to promote
the obtainment ofqualifications

Let each employee
upskill as they aim to
obtain external
qualifications

TargetHuman
resource
development
Improved
testing quality

We encourage BML Inc.’s laboratory personnel, especially those who have been with the Company for not more than
three years, to obtain after-graduation qualifications.
To promote the obtainment of qualifications, we will establish a training system. As KPIs, we aim to achieve the below
figures for the ratio of laboratory personnel who have obtained after-graduation qualifications.
KPIs (key performance indicators)
2026: 20% or more have obtained after-graduation qualifications
2028: 30% or more have obtained after-graduation qualifications

Eligible qualifications
Technologist
Technologist in Emergency Laboratory
Operator in POCT, etc.

BML REPORT 2023

54

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Dialogue Between Outside Directors

We want to use our knowledge to makerecommendations freely for the sake ofsustainable growth
Tatsuharu Arai,

Yukiko Yoritaka,

Shigeru Osawa,

Outside Director(Independent Director)

Outside Director(Independent Director)

Outside Director(Independent Director)

Based on your professional career, what
advice would you give to the Board of
Directors and the executive team?
Yoritaka: In my work at a financial institution for many
years, I have observed the management of many
companies. I have also worked in the human resources
department and have been involved in human resource
development and the promotion of diversity.
I have been serving as an Outside Director of BML
since 2020, and I believe that my role is to offer a varietyof perspectives, such as the management expertise andinformation of other companies and a woman’s
perspective, and to make recommendations about
issues regarding human resource development andorganizational culture. I hope to contribute tocompanies’ sustainable growth as a result of the active
performance of diverse human resources.
Specifically, the advice I offer focuses mainly on the
promotion of diversity and human capital investment, as
well as BCP measures and sustainability strategies.
Arai: This is my third year as an Outside Director.
Previously, I worked for a general chemical company forjust over 40 years, where I was involved primarily in the55

BML REPORT 2023

engineering and production departments. In more
recent years, I oversaw the entire business as a division
general manager, and I also served as the president of
an affiliated company.
As an Outside Director, I intend to offer
recommendations in my own way about capital
investment. Capital investment at chemical companies
aims to increase profits by manufacturing new products
and enhancing manufacturing capacity. At BML,
however, the ultimate aim is to protect human life by
upgrading the facilities to increase testing capabilities
with steady progress. Instead of being only about
making a profit, it is closer to being investment for social
contribution. However, with capital investment,
recouping the money that has been invested isimportant. The approach from such a perspective iscommon to both chemistry and clinical testing, so I
believe that my advice will be of some service.
While the improvement of quality in clinical testingentails the standardization of tests and accuracy ofprocedures and reports, the objective is fundamentallythe same as for a chemical company, namely gaining
the trust of customers. To this end, I will continue toactively give advice on risk management in the area of
quality, based on my own experience.

Osawa: I was appointed as an Outside Director in 2022.
Before that, I had worked for a bank for 20 years and in
the construction industry for 18 years. Although I do nothave any particular expertise regarding finance orconstruction, I have expanded my knowledge byobserving several thousand company managers over
my years working at the bank. You could say that I havelearned how to look for the strengths, weaknesses,
directions, and culture of companies by valuing generalperceptions, not so much as a financial professional.
In the construction industry, I have pointed out
contradictions with the common sense of the industry
and encouraged discussion. In that respect, while I was
also an officer at my previous company, I looked at its
management from similar perspectives to that of an
outside director.
In my view, the role of an outside director varies fromcompany to company. I hope to participate in the
management of BML while considering what role is mostrequired of me, based on my observations of BML’s
current status. I hope I can act less a supervisor andmore as a companion and advisor to the executive
management, to help them steer the company properly.

What is your assessment of BML’s
governance structure and the effectivenessof the Board of Directors?
Yoritaka: This is my fourth year in office, and my senseis that the effectiveness of the Board of Directors is
improving year by year. In my effectiveness evaluations,
I have asked for the early provision of information,
training for Directors, site visits, and well-balanced
management, and these points are being improved
year-by-year.
Arai: I believe that I have established my own axis ofskills by learning from my seniors and through my own
studies. From my observations, BML is engaging very
seriously in employee training, and there is actuallymuch that I can learn from them about human resource
development. My view is that in work involving theoperation of testing equipment and assessment of theresults, BML’s educational methods and skills
improvement are exceptional. Legal qualifications arealso properly addressed. Observing their efforts inhuman resource education and quality improvement, myview is that internal governance is functioning well.
Osawa: The first thing that I have noticed in a year ofobservation is that they do not manage the company ina way that clings to the status quo. They take risks thatare necessary for the company, such as businessreforms, investment, responses to COVID-19, andM&As, without hesitation.
Secondly, they do not show an attitude of pursuing
short-term profits. Although there has been a drop insales and profits after the significant increases due tothe COVID-19 pandemic, they continue to manage thecompany without panicking. As their greatest focus ison quality improvement, I believe that they are managing
the company with long-term, substantive perspectives.
They also give us Outside Directors extremely careful
explanations of their bold management decisions. For
example, when undertaking an M&A, they brief us on
the matter prior to the Board of Directors meetings.
I recognize this as a sign of their respect for businessdecisions made in the Board of Directors.
Generally speaking, if there were to be a situation inwhich we would have to play a role in governance, itwould be by speaking up about an owner-manager
acting arbitrarily without consultation. In BML’s case,however, I cannot imagine that kind of situation everoccurring.

BML has recently set its materiality. What
are your thoughts on the ESG issues set
as materiality and how they will be
realized?
Yoritaka: As for materiality, we had several discussions
in the process of the identification. There was also agreat deal of discussion within the Company before they
were identified.
I have a strong interest in issues such as climatechange, human resource development, and diversity,and I believe that these are issues that BML should
address seriously. Climate change, in particular, may be
an issue that has not been given much attention to date.
However, I believe that BML should address the issue ofclimate change seriously to realize the BML Policy of“Dedication to creating a healthy and cultured society.”
While I would like to see the Company actively
address this issue as a company that promotes theenvironment, instead of doing so alone, it should
address it together with all its stakeholders. Educating
employees and talking to and cooperating with business
partners will also become important in the future.
Arai: I am most interested in climate change and CO2
reduction. The target of reducing CO2 emission by 30%
by 2030 is an extremely difficult challenge, not least
because different countries have different views on thisissue.
In addition to CO2 reductions, recycling of waste
plastics is another issue. To improve effectiveness byaddressing these issues, the Company will need tocome up with concrete responses, and I would like tothink seriously about this together with management.
Osawa: I have a positive view of the identification ofmateriality.
The challenge will be to improve effectiveness andspecificity as much as possible for the sake of setting
targets and overcoming challenges. Tying those things
to day-to-day operations will be the most crucial aspect.
BML has been putting a great deal of effort into
human resource development, and I believe that

BML REPORT 2023

56

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Dialogue Between Outside Directors
the current executive team recognizes the importance ofdeveloping the next generation of executive-rank
employees as well. It is quite common for humanresources to be evaluated from a single perspective
alone. It is difficult to assess candidates accurately andobjectively after considering them as potential executive
candidates, so I am happy to give advice in this regard
when necessary.
While improving productivity is one of BML’s
challenges, they have no precedents to follow in theirline of business in terms of IT utilization and technology
evolution. For this reason, BML will need to stand at theforefront of the industry and address this issue increative ways. At the same time, it is also important todevelop people who are highly sensitive to the needs ofthe patients on the other side of our customers.

What is your assessment of theachievements and challenges of the Eighth
Medium-Term Management Plan,
which will have its final year in 2023?
Yoritaka: The impact of the COVID-19 pandemic has
been strongly reflected in the Medium-Term
Management Plan. Even during the period when
demand for PCR testing was strong due to thepandemic, the company has been taking measures toensure that it could grow steadily with non-COVID-19related tests, so I believe that its efforts are steadily
producing results.
In terms of the key strategy of “Improvement of quality
and services,” as Mr. Arai and Mr. Osawa mentioned,
I also think that the company is seriously addressing
quality issues. At BML, the President himself is committed
to quality improvement by taking leadership as the chairof the Quality Improvement Committee, and a system has
been established that enables him to have thoroughdiscussions with other attendees. As such, my sense isthat quality improvement efforts have advanced during
the period of the Medium-Term Management Plan.
As part of such efforts, the Company has beenpromoting the standardization of testing. However,standardization will take time for BML, partly because of
its history of M&As of various Group companies, so they
will need to keep addressing this issue going forward.
The Company’s human resource strategy is taking
shape, and steady results have been achieved during
the period of the Medium-Term Management Plan.
Regarding promotion of the active participation of
women, for example, the percentage of female
managers, which was less than 10% in the past, has
now reached 12.9%, and the target of 13% in the fiveyear plan is expected to be achieved. The percentage
of eligible male employees taking childcare leave hasrisen from just 3% three years ago to 72% today. Rather
than this figure of 72% itself, I am focusing on the factthat at BML, the average number of childcare leavedays taken by male employees is now 68.9 days, which
is more than two months. This is quite revolutionary.
Even at companies that have a high percentage of male
employees taking childcare leave, at many of thosecompanies, the actual number of days leave taken is
actually quite small. It is because BML is working on thisissue in earnest that it has achieved this figure of 68.9
days. I commend BML highly for transforming into a
company where both male and female employees areable to balance work and childcare.
Arai: Due to the effects of COVID-19, profits built up in
2021 and 2022, but the company is firmly cognizant of
the fact that its profits from the pandemic and the profits
from its existing businesses are two separate things.
It set a target of increasing the growth rate of its existing
businesses by 3.8% per year compared with 2019
levels, and in its third year, it has increased by justunder 12%. I think BML is not only happy that theirperformance has improved because of COVID-19, butthey realize that the pandemic is an irregular event, andthey have a firm understanding of where the root of theirprofits lies. This company is not only working on profit,
but also on human resource development and quality
improvement, and I believe that there have been no
problems with the Medium-Term Management Plan.
I hope that, when they develop their new businessplans in the Ninth Medium-Term Management Plan fromnext year, they will not let the past three years go towaste. Basically, I believe that they will continue to workon business expansion and cost reduction as they havedone before.
Osawa: I think the Medium-Term Management Plan was
well developed. I appreciate that the company has set
down-to-earth targets and is making steady progress
toward meeting them, rather than being concerned about
immediate sales profits. In addition, during the period of
the Medium-Term Management Plan, in its managementof the Company, the executive team has thought about
investment in its main laboratories, regional

57

BML REPORT 2023

key. Cultural reforms will be important, so I would like tohelp the Company foster a culture that encourages
employees’ autonomous growth, one that diverse humanresources find pleasant to work in and in which they areable to demonstrate their capabilities.

complementary M&As, and investment and amortizationfrom the perspective of sustainability, so my assessment
is that the management of this company is stable.
With the aim of suppressing COVID-19 by producing
testing results rapidly, the Company has rolled out
testing laboratories nationwide over the past three
years. These efforts have resulted in higher profits.
Furthermore, in addition to profit, these efforts havegreatly contributed to society. While it claims to havebeen pushed and pulled by COVID-19, these results
may have been the outcome of BML’s unique culture
and decision-making systems.

What role will you play as an Outside
Director for the sustainable growth of
the Company?

Arai: The basis of BML’s sustainable growth will be, as
I mentioned earlier, the elevation of customers’ trust in
the Company. For BML, the basis of customers’ trust isthat it must not generate quality abnormalities and thatit must respond with certainty to erroneous
determinations, reporting delays, and the amendment
and establishment of manuals. To this end, I believe that
it will be able to realize risk mitigation by steadily
conducting horizontal communication of cases acrossthe company and implementing countermeasures to thecauses of abnormalities.
Actually, I have heard that there are test items thatBML does not yet perform. In that respect, this is an
opportunity to embark on new products, so there is still
plenty of room for new testing and specification
improvements with a combination of people and testing
equipment.
To grow the company, I would love IBM to become
a company that engages in things that it has noexperience in and makes forward progress, one step at
a time, to make it a high-standard organization bothtechnologically and in terms of quality. To that end,
I hope that I can offer advice that takes advantage of myown past experiences.
Osawa: In my amateur observations at normal times,
I have thought that the accepted wisdom of the medical
industry is outside the accepted wisdom of generalsociety, and the accepted wisdom of the testing industry
is beyond the common knowledge of patients. My senseis that President Kondo has accepted this view of minein a positive manner. I hope to contribute to BML’s
growth by voicing my opinions from such a perspective.

Yoritaka: My view is that human capital management willbe the key in the future. To this end, management strategy
needs to be linked to human resource strategy.
I would like to have discussions about the human resource
portfolio, that is, how many and what kinds of people theCompany needs based on its management strategy andto contribute to evolving those discussions into a personnel
strategy based on that management strategy.
DX promotion is another important topic. To attract
specialist human resources from outside, the company
has changed its personnel system and established astrategic field expert (SX) course, but it will also need toengage in the reskilling of its internal human resources.
I would like to offer advice about the creation of
mechanisms for the recruitment and development of
human resources for the promotion of DX.
My view is that human resource strategy, workstylereforms, and diversity are all a part of human resource
development. These things are all inter-connected, so to
pursue each of them, the organizational culture will be

BML REPORT 2023

58

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Corporate Governance
List of Directors

Name

Directors
Independent

Attendance atmeetings of theBoard of Directors

Tatsuharu
Arai

Name

Position

Reasons for nomination

Kensuke
Kondo

President andRepresentative
Director

17 out of medical industry from his experience as a doctor. Since assuming position as
Representative Director in January 2014, he has been leading the BML Group’s
17 meetings
management. Based on his wealth of achievement from his excellent leadership,(100%)

Representative
Director and Vice
President

Dr. Kensuke Kondo 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 BML Group.

Independent

Position

Attendance atmeetings of theBoard of Directors

Reasons for nomination

17/17(100%)

Mr. Tatsuharu Arai has many years of abundant experience and deep insights
into corporate management in the chemical industry. By utilizing suchachievements, expertise as well as insights on management, the Company
judged that he is personnel necessary to increase the future corporate value ofthe BML Group through giving opinions and making judgements from an
objective standpoint when making decisions for the management of BML, andthrough playing a role of monitoring and supervising Directors’ execution ofduties. The Company expects him to fulfill his role of supervising themanagement from a position independent from executive officers in BML byutilizing his wealth of experience in the chemical field.

13/13(100%)

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 BML Group through giving opinions
and making judgements from an objective standpoint when making decisions forthe management of BML, 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 in BML by utilizing his wealth of experience in the construction field.

Outside Director(Independent
Director)Dr. Kensuke Kondo has abundant experience and deep insight on overall

Nobuki
Arai

Norihisa
TakebeHideakiOsawa

Director; Operating
Officer; General
Manager, Sales
Division

Kenji
Shibata

Director; Operating
Officer; General
Manager, BML
Clinical Testing
Headquarters

Yuji
Yamashita

Director; Operating
Officer; General
Manager, System
Division

YukikoYoritaka

59

BML REPORT 2023

Representative
Director; Senior
Executive Officer;
General Manager,
Planning Division

Outside Director(Independent
Director)

Shigeru
Osawa

the Company has judged that he is personnel necessary to increase the future
corporate value of the BML Group.

17/17(100%)

17/17(100%)

17/17(100%)

13/13(100%)

Since joining the Company, Mr. Kenji Shibata has been involved mainly in
inspection 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 BML Group.

13/13(100%)

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 BML Group.

17/17(100%)

Corporate Auditors

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 BML Group through giving opinions
and making judgements from an objective standpoint when making decisions forthe management of BML, 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 in BML by utilizing her wealth of experience in finance and humanresources fields.

Independent

Name

Position

Kenichi
Morishita

Standing
Corporate
AuditorReasons 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 BML Group.

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

Outside Director(Independent
Director)human resources department, Group company administration departments, and theadministration department of the clinical testing subsidiary, and has abundant experienceand 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 BML.

Nobushige
TokuonoOutsideCorporate
Auditor(Independent
Auditor)MasatoDenawaOutsideCorporate
Auditor(Independent
Auditor)

The Company has judged that he will be able to utilize his professional knowledge as acertified tax accountant and his abundant experience at the Tokyo Regional Taxation
Bureau to enhance the audit structure of BML.

The Company judged that the expertise of Mr. Masato Denawa as an attorneyat law can be used for enhancing the audit structure of BML, even though he
has never been involved in corporate management.

Operating Officers
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, Medical
Informatics Sales Department

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

Kazuhiro
Yamashita

Operating Officer

General Manager, Electronic
Patient Chart Department

BML REPORT 2023

60

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

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

Positions in the Company

Kensuke Kondo

President andRepresentative Director

Nobuki Arai

Representative Director;
Vice President

Norihisa Takebe

Representative Director;
Senior Executive Officer

Hideaki Osawa

Kenji Shibata

Management
Experience

MedicalExperience

Inspection/
Engineering

Information
Technology

Strategy
Planning

Finance/
Accounting

Personnel/
Labor

Risk/Legal
Affairs

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 theeffectiveness of internal controls and the status ofbusiness execution. Additionally, internal audits are
conducted by the Credit Guarantee Department mainlyon the inspection divisions, our specialty field, to assess
and provide instructions on compliance with laws andregulations, 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, andinvestigating the status of business and assets at thehead office and the major business locations.
Furthermore, as part of the cooperation between the
Corporate Auditors and the Audit Office, the results ofinternal audits are reported to the Board of Corporate
Auditors, joint audits are conducted, and information isshared when necessary. The Audit Office also
periodically reports the status of internal controls to theBoard of Directors.

Director; Operating Officer

Director; Operating Officer

Yukiko Yoritaka

Outside Director(Independent Director)

Tatsuharu Arai

Outside Director(Independent Director)

Shigeru Osawa

Outside Director(Independent Director)

transparent corporate activities, the Company has set
forth Compliance Regulations and is also working toraise awareness by conducting training and seminars
for its employees in accordance with the BML Group
Compliance Manual, which illustrates the code of
conduct to be observed by the employees and otherpersons.

Corporate Governance Structure

Director; Operating Officer

Yuji Yamashita

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 the
BML website. Additionally, to execute fair andCorporate Governance Structure Chart
General Meeting of Shareholders
Board ofDirectors(Directors)

President andRepresentative
Director

Nomination andCompensation
Committee(Corporate Auditors)

Risk management
and internal
audit functions

Audit OfficeBusiness
execution function

CreditGuarantee
Department

GeneralManagers

Risk Management
Department

Employees

Compliance
Committee(including Operating
Officers)

Board ofCorporate Auditors

Accounting
Auditor(Audit firm)

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

Areas which the Company specifically expects Corporate Auditors to cover

61

Name

Positions in the Company

Kenichi Morishita

Standing Corporate Auditor

Nobushige
TokuonoOutside Corporate Auditor(Independent Auditor)

Masato Denawa

Outside Corporate Auditor(Independent Auditor)

BML REPORT 2023

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 acomprehensive 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 group asa whole, in accordance with the Company’s rules.
The Internal Control Committee (hereinafter,
the “Committee”) comprising BML Group companies
conducts the establishment, operation, and assessmentof internal controls. The Committee is chaired by the
President of the Company and the Group 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 BML Group, while othermembers are appointed by the President, as necessary.
The Committee engages in the following activities:(1) Discussions and deliberations on the direction to betaken and the measures concerning the Group’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 andthe subject companies of the BML Group.
The affiliated companies of the Group, mentioned
above, are audited by the internal audit divisions of
BML.

BML REPORT 2023

62About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Corporate Governance
The Role of Each Committee

Trends in Governance
Year

Rol e

Board of Directors

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

Nomination and Compensation
Committee

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.

Board of Corporate Auditors

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

2016

2017

Medium-Term Management Plan of the BML Group2019

Major Agenda of the Board of Directors
Appointment of Operating Officers

Shareholder returns
Interim dividends

Matters related to financial
statements and businessperformance
Matters related to corporate
governance

Financial statements

Appointment of Operating Officers with special titles anddetermination of their delegated duties
Determination of the order of Directors acting on behalf of the President

Approval of the outline of convocation of the Annual General
Meeting of Shareholders
BudgetCompliance with Japan’s Corporate Governance Code

Officers of the Company serving concurrently as officers of affiliated companies
Matters related to Directors,
Operating Officers, andthe Board of Directors

Adoption and expansion of facilities related to COVID-19

Renewal of the directors and officers liability insurance contract
Donations
Other matters

Matters related to testing equipment for the new wings

Appointment of officers
Matters related to personnel
and organization

Establishment of the new strategic field expert (SX) course
Changes to in-house rules and regulations (shares, childcare,nursing care, retirement allowance, leave of absence, reinstatement)

Matters related to reorganization Changes to the name of the organization
Important matters of theCompany and affiliatedcompanies

Full ownership of BLH

Matters related to Directors,
Operating Officers, andthe Board of Directors

Appointment of Directors with special titles

Capital and business alliance agreement with
FALCO HOLDINGS
Appointment of Representative Directors

Financial plans and limits of short-term borrowings
Changes to the Ethics Committee

Acquisition of real estate

Reports from the Sustainability Committee

Matters related to corporate
governance

Reports on the results and plans of internal control assessments

Status of risk management initiatives
Matters related to investments in New building construction planand the disposal ofLong-term budget and new building construction plan
important assets
Personnel matters related to the officers of affiliated companies
Proposals to be submitted to the annual general meeting of shareholders
of affiliated companies (financial statements and appropriation of surplus)
Other matters

Policy for audits by the Board of Corporate Auditors
Systems for in-house management of electronic patient charts
Measures to address work volumes that exceed processing capacity
Progress at laboratories

63

BML REPORT 2023

2022

Matters to be reported:
Matters related to the
Sustainability Committee

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 the industry
as a member of the medical care industry“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

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

2021

Changes to duties assigned to officers

Replacement of the integrated ITS system

Flooding countermeasures at the BML General Laboratory

Amount of compensation for Directors
Payment of monetary compensation receivables related torestricted stock

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 Cross-shareholdings

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 Meeting of 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

Eighth Medium-Term Management Plan (FY2021 –FY2023) (From April 1, 2021 to March 31, 2026)

Payment of officers’ bonuses

Conclusion of annual maintenance agreements for testing equipment

Capital investment associated with the FMS contract renewal

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

Disposal of treasury shares as restricted stock

Major renovation of the BML General Laboratory

Replacement of ERP
Matters related to investments inand the disposal of important Upgrading of the clinical testing systemassetsCore system renewal for the medical informatics business

2020

2023

Period for Leaping Forward

Matters related to shareholder
returns

Concept
Building and strengthening the foundations
needed to be the top company in the industry
Goals
Improvement of quality and services
Strengthening sales infrastructure
Rebuilding system infrastructure
Expanding testing infrastructure
Enhancing human resource infrastructure
Enhancing management quality and functions

Concept
Becoming No. 1 in quality and service

Period for Growth

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

Proposals to be resolved:

Sixth Medium-Term Management Plan (FY2015 –FY2017)

Seventh Medium-Term Management Plan (FY2018 –FY2020)
2018

Compliance Committee

Trends in Strengthening GovernanceGroup Vision
To become the most trusted choice in the medical world
Period for Solidifying Foundation

Co m m itte eInternal Code of Conduct(1) Consensus: consensus of employees(2) Soundness: soundness of all operations(3) Standardization: pursuit of standardization
Basic Strategic Framework
Aim to enhance competitiveness based on“Standardization” × “DX (Digital Transformation)”

Name Change of the Nomination and Compensation Advisory Committee to theNomination and Compensation Committee
Composition of the Board in which 1/3 are Outside Directors(3 out of the 9 Directors are Outside Directors)
Disclosure of the Directors’ Skill Matrix
Announcement of the Message on Diversity, Equity & Inclusion by the President

Composition of the Board of Directors(as of June 2023)

One-third of the Board of Directors consists ofIndependent Outside Directors

Independent
OutsideDirectors

3

Composition of the Board of Corporate
Auditors (as of June 2023)
Two-thirds of the Board of Corporate Auditors
consists of Outside Corporate Auditors
Independent
OutsideCorporate
Internal
Auditors
Corporate
Auditors

1

Framework
Standardization: Enhancement of competitivenessInternal
Director
Enhancing the laboratory network
Enhancing sales capabilities
Renovating collection and delivery processes
DX
Composition of the Nomination and Compensation Committee(as of June 2023)
Improvement of the customer experience andMore than half of the committee members
realization of greater business efficiency
comprise Independent Outside Directors
Strengthening the management foundation,
human capital development and its effective
utilization
Internal
Independent
OutsideDirectors

3

2

6

2

Director

BML REPORT 2023

64About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

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
the composition, operation, agenda, support system,and other matters of the Board of Directors. To analyze
and assess the effectiveness of the Board of Directors,
a questionnaire was conducted as part of the self-

assessment process and the results indicated that theBoard 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 FY2021

Assessment results and measures taken for FY2022

Assessment results(1) Composition of the Board of Directors
The Board of Directors has mostly been developed
and maintained appropriately. (5 out of 5 items)(2) Operation of the Board of Directors
The Board of Directors mostly operates appropriately.
(9 out of 9 items)(3) Agenda of the Board of Directors meetings
The composition of the agenda is mostly appropriate.
(10 out of 10 items)(4) System to support the Board of Directors
The system has been mostly developed
appropriately. (6 out of 6 items)

Assessment results(1) Composition of the Board of Directors
The Board of Directors has mostly been developed
and maintained appropriately. (6 out of 6 items)(2) Operation of the Board of Directors
The Board of Directors mostly operates appropriately.
(9 out of 9 items)(3) Agenda of the Board of Directors meetings
The composition of the agenda is mostly appropriate.
(13 out of 13 items)(4) System to support the Board of Directors
The system has been mostly developed
appropriately. (6 out of 6 items)

Measures taken
To facilitate operations, the agenda and operation
method should be improved.
To invigorate the discussions and improve the qualityof deliberations 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.

Measures taken
To facilitate operations, the agenda and operation
method should be improved.
To invigorate the discussions and improve the qualityof deliberations at the Board of Directors meetings,
information should be provided early.

Cross-shareholdings
Basic approach
BML 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.

Compensation and other benefits of Directors and Corporate Auditors
Basic approach
BML 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 the Nomination andCompensation Committee, the majority of which comprises Outside Directors.

Matters regarding the policy on determining the details of compensation and other benefits of individual Directors
through 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 sustainableenhancement of corporate value.
Compensation for Corporate Auditors comprises
exclusively of fixed compensation, in light of their
independence from management and their objectivity,
and the amount of compensation of each Corporate
Auditor is determined by the Board of Corporate Auditors.

To ensure the fairness and objectivity of compensationand other benefits of Directors, the Nomination andCompensation Committee considers and compares
officer compensation of domestic listed companies thatare comparable in size with BML, and deliberates theamounts of fixed compensation, performance-linked
compensation, and restricted stock compensation, by
taking into account such factors as BML’s businessperformance. Additionally, the components of thecompensation of individual Directors are determined

Matters regarding the delegation of authority to determine the compensation and other benefits of individual Directors
individual Directors are determined by completing theseprocedures, the Board of Directors has determined thatthe details of the compensation are in line with thedetermination policy and therefore, appropriate.
The reason why the authority to determine thecompensation of the individual Directors has beendelegated to the President and Representative Director
is that the President and Representative Director is mostsuited to viewing the business performance of the BMLGroup overall while at the same time evaluating the
responsibilities and the areas for which each Director is
responsible. Nevertheless, when determining theamounts of compensation and other benefits ofindividual Directors, the President and Representative
Director makes such a decision, upon receiving
recommendations from the Nomination andCompensation Committee, the majority of which
comprises Outside Directors.

BML’s Representative Directors, who have beendelegated by a resolution of the Board of Directors theauthority to calculate the specific amounts ofcompensation of individual Directors, ultimately makethe decision on individual compensation.
In determining the detailed amounts of compensationof individual Directors, the Nomination andCompensation Committee, the majority of which
comprises Outside Directors, conducts multilateraldeliberations, including whether the draft proposals
prepared by the President and Representative Director
are consistent with the determination policy. The
Nomination and Compensation Committee offers
recommendations on the draft proposal and thePresident 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 of compensation of

Matters regarding performance-linked compensation
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 abusiness strategy perspective are expected andsuch cross-shareholdings are determined tocontribute to the enhancement of the corporate valueof both the counterparty and the BML 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 theshareholding and the significance of theshareholding from the perspective of businessstrategies, such as business relationships andbusiness partnerships, and the decision whether tocontinue the shareholding is made.

65

BML REPORT 2023

(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 theshareholding is found to be justified, such shares
may be disposed of, in light of the market
environment, BML’s management and financial
strategies, and other 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 BML Group’s profits in the medium to long term.

net sales, as the basis for the calculation of performancelinked compensation. This indicator was selected because
it comprehensively and objectively illustrates the results ofbusiness execution for the fiscal year under review, andthe indicator has also been determined to be appropriate
from the standpoint of focusing on the degree ofachievement of performance growth.

To provide incentives to Directors to strive for the
improvement of business performance and theenhancement of corporate value, BML has introduced
performance-linked compensation in addition to fixedcompensation. Compensation amounts are calculated
according to a payment ratio corresponding to the degreeof achievement of the business plan such as the amount of

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

Total amount ofcompensation andother benefits(millions of yen)

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

Directors(Outside Directors)

216
(15)

164
(15)

Corporate Auditors(Outside Corporate Auditors)

20
(6)

20
(6)

Performance-linked
compensation46( )Number of eligible
recipientsNon-monetarycompensation

4
( )

12
(4)

－

3
(2)

BML REPORT 2023

66

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Corporate GovernanceRisk Management

Crisis Management System

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 ofactions to be taken so that risk management functions
effectively, and to ensure the sound and stable
management of the entire Group through the practice ofappropriate risk management.
The basic policy consists of the basic objective andthe code of conduct. The basic objective is to prevent
risks before they materialize, as well as swiftly andappropriately deal with crises in the unlikely event thatthey occur. It also includes keeping the impact of risks
on management resources to a minimum by swift
recovery measures and maintaining the functions of theorganization. Matters set forth in the code of conduct
include the preservation of the safety and health of
employees, as well as the preservation of management
resources, and swift and appropriate recovery in theevent that management resources are damaged.

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 accordancewith the Basic Rules on Risk Management. Through theeffective functioning of the risk management system andthe continuous monitoring of individual risks, theCompany has established a system capable of swiftly
and appropriately dealing with emergencies in theunlikely 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 andanalysis of risks.

Risk Management Meeting
Each business unit
(Risk Management Manager)
Divisions in charge

Implementation divisions
The shaded portions represent risks
requiring priority responses

Risk Map and Major Risks
Amount of damage+
credibility/reputation

To understand the types of risks that face the BMLGroup and their impact, the Risk Management
Department covers various risks and clarifies the“amount of damage,” “impact on credibility andreputation,” and “occurrence coefficient” for each risk
and assesses their impact. The divisions in chargecooperate with the Risk Management Department andcarry out risk countermeasures.

Chief Risk Management
Officer

Risk Management
Department

Disasters

6

Risk Assessment

President

Audit divisions(Credit Guarantee Department)(Audit Office)Labor management

Compliance

Infrastructure

5
4

r

Majo

3

ct
im p aInformation leakage
Others2
1
1:
Low frequency

2:
3:
4:
5:
Once every several years Several times a year Several times a month Several times a week

Labor
management

Compliance

Information
leakage

Disasters

Infrastructure67

BML REPORT 2023

Summary of risk
Overwork
Violation of compliancewith relevant laws andregulations
Fraud and scandals of
employees
Leakage of personal
information including
information on customers’
patients
Leakage of internal
confidential information
Disasters due to heavy
rains, earthquakes orother events
Suspension of public
infrastructure

Countermeasures
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.
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.”

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

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

employees must practice compliance through fairbusiness operations while proactively striving tocontribute to society. To achieve compliance, the BMLGroup takes actions in accordance with the following
rules set forth in the code of conduct mentioned above:

Prohibition of acts that are in violation of compliance, and the prohibition of instructing, aiding and abetting, andtacitly 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 theseactions are reported at the Compliance Committee
meetings which are held quarterly.

Initiatives to Thoroughly Enforce Compliance
As initiatives to thoroughly enforce compliance, the BML Group conducts periodic training and self-audits.
1. Compliance training
To instill a compliance mindset in its employees, the
BML Group conducts compliance training.
Compliance training is conducted twice a year for its
employees on contemporary agendas involving
compliance concerns. Additionally, training for new
employees is conducted in April each year mainly on

Number of incidents

Major Risks and Countermeasures
Category

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
around the world.
The Crisis Management Committee has defined eight
incidents including major natural disasters and threats

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 eachmatters that new employees should be cautious of in
executing business, including the prevention ofcompliance violations that new employees are prone to.
Training
agendasPrevention of power harassment
Antimonopoly Act Entertainment and gifts
The meaning of compliance for new employees,
etc.

department and reported to the Risk Management
Department. The reported details are investigated by
the departments in charge and other divisions andremediation is implemented. Compliance self-audits
provide important opportunities for each department tobecome aware of compliance and have beenfunctioning as part of measures to prevent complianceviolations.

Whistleblowing System
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.
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.
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).

The BML Group has established the “Compliance Post”
as a reporting system in the event of complianceviolations. The system provides reporting methods suchas the Intranet and writing letters to the offices of thecorporate lawyers, and when a report is issued, it isreceived by the secretariat of the Compliance

Committee, which quickly
addresses the incident bycooperating with the relevant
divisions depending on thecontent of the report.

Compliance poster

BML REPORT 2023

68

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Business Overview of Clinical Testing Business

Clinical Testing
Business

Net sales and profit declined last year due to a large reduction in
COVID-19 PCR testing fees. In addition, this was a year for revision of
medical service fees, which caused prices to decline by almost 1%.
With the reclassification of COVID-19 to a Class 5 infectious disease,demand is expected to further decrease year over year. Consideringthat net sales excluding COVID-19-related tests increased last year
owing to sales activities such as new customer acquisition andexpanded sales to existing customers, BML aims to increase net
sales again this year even more than last year by implementing thesame activities.

MessageKenji Shibata,
Director, Operating Officer, and General Manager,
BML Clinical Testing Headquarters

Trends in net sales(millions of yen)

175,232
147,731
128,612Composition of
net sales by business

106,632

110,113

Initiatives for quality
Clinical testing plays an important and essential role in modern-day medical care, and high quality

92.6%

is a constant demand. Our main laboratory, the BML General Laboratory, was the first in Japan toobtain ISO15189 certification, the international standard for clinical laboratories. It is also
accredited for numerous other reliability standards, including CAP Accreditation, the laboratory
Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

accreditation program of the College of American Pathologists. Recognizing the immense
importance of traceability that connects patients to their test results, we developed a newautomated dispensing system (Frontier) ahead of other companies, and we are working to eliminate

Overview of Businesshuman error via the full automation of pre-testing processes. Upon these foundations, we strive

Overview of Clinical Testing

Overview of Clinical Trials Testing

Biochemical, immunological, serological, and other

The development and commercialization of

testing comprise a large ratio of net sales, and we willcancer-related drugs, particularly antibody drugs, iscontinue activities to develop sales while enhancing

expected to continue increasing.

the testing systems. Genomic medicine has spread

BML has established clinical trial laboratories thatevery day to achieve higher quality.

FY2022 results and initiatives for the post-COVID-19 era
While demand for PCR tests for COVID-19 has declined as the pandemic has come to an end,

remarkably recently and is expected to continuecomply with GLP (Good Laboratory Practice) and GCP

demand for existing clinical tests is returning to the regular levels of up to 2019. On the other hand,developing at an accelerated pace. Therefore, we(Good Clinical Practice), conduct tests by specialized

the emergence of COVID-19 had led to the development of many new vaccine formulations andintend to focus on enhancing genomic testing andstaff, and contracts and develops clinical trials attherapeutic drugs, and BML is responding to this trend with a variety of tests. Among them, a

expand in the areas of cancer genomics and genetic

the request of pharmaceutical manufacturers.

neutralization test to determine the biological activity of antibodies against viruses is a service thatdiseases.

only BML provides in Japan as a commercial laboratory. It is used for the assessment of drug
product performance. We will continue to enhance this neutralization testing system to support new
drug development.
With the further aging of the population, the enhancement of early detection and diagnosis of
diseases, monitoring, and quality of medical care management are needed to ensure medical careof better quality and to reduce financial burdens. To this end, it is expected that demand for clinicaltesting will continue to grow. We believe that many more drugs will be developed, particularly inareas such as diabetes, cardiovascular disease, and cancer, and companion diagnostics andmonitoring testing will become more widespread. With the rise in health awareness, demand is
growing for clinical testing in the area of medical check-ups. Under these circumstances, we will
establish highly efficient systems to provide more accurate testing at appropriate cost levels.

Symphony Chemistry69

BML REPORT 2023

Frontier automated dispensing system

BML REPORT 2023

70

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Business Overview of Clinical Testing Business
Three related strengths

BusinessStrength 1

Three related strengths

BusinessStrength 2

Wide range of advanced testing areas
Sales

Laboratory

Laboratory automation

SystemSales

System

BML’s unique automated testing systems, Frontier and Symphony,in all areas of clinical testing.

enable rapid and highly reliable testing

Wide range of testing areas

BML has led other companies in pioneering laboratory
automation since 1995. As BML’s eternal themes, we areconstantly working to speed up, automate, and improvelaboratory testing accuracy and credibility.
One of the answers to this is BML General
Laboratory’s automated dispensing system (Frontier),
biochemical and immunological testing system(Symphony Chemistry), and hematological test system(Symphony Hematology). This is the industry’s first
automated testing system, and it consists of an
automated dispensing system, which automates the
pre-test process from specimen sorting to dispensing,and a biochemical and immunological testing systemand hematological test system, which automate thesubsequent testing process.

Laboratory concept for the next generation

Reconfiguration, functionality enhancement,
efficiency improvement

Over 4,000 types of testing, widely ranging fromroutine testing to highly specialized tests

Microbiological testing that boasts one of the world’s
largest number of tests (hereinafter, bacteriological testing)

Top-level laboratory testing ranges from routine
biochemical and hematological testing to specialized
testing for tumor markers, infectious diseases,
hormones, cellular immunity, DNA, and microbiologicaltesting. This testing meets the clinical needs of medical
institutions. BML serves over 300,000 clients a day
through laboratory testing for hospitals and clinics
nationwide.
Going forward, the BML General Laboratory will
expand testing capacity and improve testing efficiency
by introducing new systems, such as a new automateddispensing system and a new biochemical andimmunological testing system.

BML’s bacteriological testing, among the many tests that
BML conducts, boasts one of the world’s largest numberof tests, and we have promoted the introduction of an
automated system, with the aim of improving efficiency.
In conjunction with relocation to a new wing, the BML
General Laboratory will construct a new bacteriologicaltesting system, contribute to clinical testing through theintroduction of new technology, and work to improve
quality.
Additionally, we are developing core laboratories forbacteriological testing, with the aim of standardizing
bacteriological testing and improving clinical services
nationwide.

Testing area

Trends in sales of bacteriological testing(millions of yen)

6,694

6,817

Biochemical testing

6,267

6,160

BML’s testing areas

6,312

In May 2023, BML General Laboratory started
construction on an extension of new testing buildings.
Under the themes of reconfiguration, functionality
enhancement, and efficiency improvement as alaboratory concept for the next generation, including theexisting laboratory, we will make capital investments in
automated dispensing systems, biochemical andimmunological testing systems, hematological test
systems, and AGV* transfer to promote further laboratory
automation.
*Automatic Guided Vehicle

COVID-19
pandemic

Microbiological testing
Hematological testing, etc.
Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Strengths in specialized laboratory testing

New test items in FY2022

At BML, the Advanced Technology & Development
Division, an independent research and development
unit, develops new tests using methods such as
genomic analysis and mass spectrometry techniques tocontribute to genomic medicine and personalized
precision medicine. We are involved in research anddevelopment using advanced technologies frommolecular biology, genetic engineering, andmetabolomics and proteomics, to provide high added
value testing to clinicalmedicine, with an eye
toward targeting areas
such as cancer, genetic
diseases, infectious
diseases, as well as
lifestyle diseases, andauto-immune andallergic diseases.

In the field of genetics, we have used next-generation
sequencers (NGS) to upgrade existing genetic testingfor congenital hearing loss (panel of 19 genes and 154
mutations) to a panel of 50 genes and 1,135 mutations.
Additionally, in response to the revision of diagnostic
criteria for genetic testing for juvenile-onset bilateral
sensorineural hearing loss, we upgraded analysis from
7 genes to 11 genes. In the field of mass spectrometry,
we independently developed and began contracting of
LC-MS/MS testing that measures sitosterol, campesterol
and cholestanol in the blood as a marker for diagnosing
dyslipidemia. In the field of hematopoietic organ tumors,
we began contracting of SF3B1 mutation analysis, which
is useful for diagnosis, disease type classification, andprognosis prediction in myelodysplastic syndromes withringed sideroblasts (MDS-RS).

BML REPORT 2023

BML General Laboratory
6th Stage Building(new wing)

Active participationof women

Existing wing

Labcorp Building(new wing)

New automated dispensing system
New biochemical and immunologicaltesting system
New hematological test system
AGV transfer
New microbiologicaltesting system
Specialized testing
Cellular organisms
Training laboratory

Mar. 2023

Superior expertise supporting sophisticated specialized laboratory testing71

Laboratory

We have a system in place to meet the needs of medical institutions nationwide,

Genomic
testing
GeneraltestingSpecimenmanagementbuilding

Global clinical
trials

Efforts in the development of
diagnostic markers for dyslipidemia

I have been involved in the development of testing in the
Advanced Technology & Development Division. In addition toconventional immunoassays such as ELISA, I am in charge ofthe introduction of new mass spectrometry techniques. It wasdifficult to reach the point of being able to get stablemeasurements in the existing laboratory environment, because
while very highly sensitive, delicate machine adjustments wererequired. Last year, in the area of dyslipidemia, I was able todevelop and begin contracting of new testing that is useful for
diagnosis of sitosterolemia and cerebrotendinous xanthomatosis
through LC-MS/MS. Currently, I am pursuing the clinicalevaluation of lipid metabolism related substances in joint
research with a university, and I am thinking about taking on thechallenge of developing testing that will continue to contribute to
medical practice.

Kaori Ito,

Deputy Chief, Advanced Medicine
and Development Division

BML REPORT 2023

72

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Business Overview of Food Hygiene Business

Food Hygiene
Business

The BML Group provides one-stop services ranging from kitchen
hygiene inspections at restaurants, food factory audits, theestablishment of hygiene and quality management systems, support
for obtaining food safety accreditations, household goods label
verification and quality management support, microbiological andphysicochemical testing of food products, and intestinal bacteria
testing.

Message
Kiyotaka Kohinata,
President and Representative Director,
BML Food Science Solutions, Inc.

Strengths and risks of the food hygiene business
BML’s establishment of a one-stop support system with wide-ranging business domains, supported by
the two pillars of testing and consulting, has received high praise from many companies. Based on ouradvanced testing technology and know-how developed over many years, we provide high-quality
consulting and a variety of testing systems in a speedy manner, using our network that covers thewhole of Japan.
We have long enjoyed the custom of major corporations in various businesses and industries, andour employees take great pride in being able to help so many consumers through these customers.
Among the risk factors that are currently emerging, it is forecast that testing reagent costs andtransportation costs will increase, due to the Russia-Ukraine situation and labor costs associated withthe decline in the domestic population.

Trends in net sales(millions of yen)

4,908

4,682

4,299

4,519

4,793

Composition of
net sales by business

3.0%

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Review of business performance for FY2022

Mar. 2023

Overview of Business
Consulting Business

Testing BusinessWe offer restaurants, hotels, food manufacturers, andother food-related companies a wide range of consulting
on food hygiene and quality, such as the development ofquality control systems, kitchen hygiene inspections,factory audits, food labeling, and quality control ofhousehold goods. We also have experience in consulting
for acquisition of accreditations under international foodsafety standards and as an audit company for Japanese
JFS standard conformity certification.

We provide various testing services that support foodand beverage-related companies, such as
microbiological testing and nutrient analysis of food,physicochemical testing of food additives,
microbiological testing of kitchen environments andintestinal bacteria testing for employees, and testing forforeign materials in foods. Additionally, we offer contract
testing to verify the quality of household goods andclothing, including strength and physical property tests.

Future strategy

Number of license and certificate holders73(As of July 1, 2023)

Name of license orcertificate

Number of
persons

Doctor of Medicine

1

Class-1 Health Supervisor

18

Food Labeling Test (advanced)

27

Veterinarian License

1

Food Sanitation Supervisor

27

Food Labeling Test (intermediate)

157

Pharmacist

1

PCQI Lead Instructor

2

Food Labeling Manager (advanced)

2

Certified Environmental Measurer

1

ISO9001 Auditor

1

Food Labeling Manager (intermediate)1

Public Health Laboratory Technician

8

ISO9001 Provisional Auditor

15

Food Microbiology Laboratory Technician (Class 1)

30

Clinical Laboratory Technician

20

ISO22000 Lead Auditor

2

Food Microbiology Laboratory Technician (Class 2)

33

Radiation Protection Supervisor

1

ISO22000 Provisional Auditor

92

Food Microbiology Laboratory Technician (Class 3)

11

General Certified Measurer

3

HACCP Lead Instructor

5

Food Safety Kentei (Intermediate)29

Textiles Evaluation Specialist

9

JFS-A/B Program Auditor and Reviewer

12

Food Safety Kentei (Elementary)

9

Textiles Advisor

5

JFS-A/B Program Auditor

26

Household Products Sanitation Inspector

1

BML REPORT 2023

Name of license orcertificate

Last fiscal year, our business showed signs of improvement in the market environment. For example,
as society has started living with COVID-19, the restaurant and hotel industries, which had experienced
a downturn during the COVID-19 pandemic, began to recover, leading to the resumption of kitcheninspections and an increase in the number of stool tests for kitchen workers we have been contracted
to perform.
Starting with free seminars and email newsletters, BML actively expanded its points of contact withcustomers other than face-to-face meetings. The attendees of these free seminars gave them
exceptionally high satisfaction ratings, and many of the seminars were fully booked in a very short time.
The number of subscribers to our email newsletter has also steadily increased, and we are now
sending out information monthly to approximately 20,000 subscribers.
To enhance our services in the certification business, which has great potential for growth,
we obtained accreditation from CQI/IRCA Japan, an organization that evaluates and registers auditors/
lead auditors of world-standard management systems. As one of the few accredited training institutionsin Japan, we have begun providing accreditation seminars.

Number of
persons

Name of license orcertificate

Number of
persons

While the flow of people is returning to normal due to the downgrading of COVID-19 to a Class 5
infectious disease, there have been considerable changes in the environment, particularly in the areaof food hygiene management, as consumers have become increasingly concerned about food safety
and security. This includes the spread of information in the event of food-related accidents due to the
popularity of social media and an increase in the employment of workers who need to be trained infood hygiene awareness, as a result of labor shortages.
For these reasons, companies that place high importance on their brand image are focusing on
hygiene management in particular. To respond to these kinds of changes in our customers’
circumstances, we will continue to deepen our one-stop service strategy, which is our strength, andstrive to enhance the range and quality of our services.
Specifically, we will focus on increasing the range of service contents, such as the development of
rapid listeria testing methods, registration as an audit company for the JFS Standard (Food Service/
Multisite) Sector: GM, the standard for foodservice operators such as restaurants, ready-made meal
manufacturers, and mass meal providers, and the business of creating tailored training video materials
to meet customer needs. We have also begun construction of a dedicated test building to enhance test
processing capacity, which is scheduled to begin operation in May 2024.

BML REPORT 2023

74

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Business Overview of Food Hygiene Business
Three related strengths

BusinessStrength 1

Three related strengths

BusinessStrength 2

Wide-ranging business domains
Sales

Laboratory

Network covering all of Japan

SystemSales

We provide customers in various industries with one-stop services ranging
from microbiological and physicochemical testing of food products, product quality testing,
kitchen hygiene inspections at restaurants, food factory audits, the establishment of hygiene and quality
management systems, and support for obtaining food safety accreditations.

BML has locations throughout Japan and

Covers all aspects of testing, store inspections, factory audits, accreditations, and food labeling

Food hygiene business locations in major cities

BML’s business features the ability to provide a wide
range of services relating to food and product testingand hygiene consulting by one company. In addition to
one-off requests for testing, inspections, and audits, theCompany can also partner with customers and provide
support from a comprehensive and long-term
perspective to create a framework for hygiene measuresand quality control, thus increasing the value of products
and services. Customers can save time searching for aservice provider every time they conduct testing,inspections, and so forth, and consult BML regarding all
types of concerns and questions relating to hygiene
measures and quality control.

BML has five branch offices (Sapporo, Tokyo, Nagoya,
Osaka, Fukuoka) and four testing locations (Sapporo,
Saitama, Osaka, Fukuoka) in Japan, which makes it
possible to provide services to customers that operate ineach region, as well as to customers that are developing
their business with multiple stores throughout Japan.
Additionally, at BML, highly specialized and qualified
employees handle kitchen inspections and factory
audits, and customers highly value the fact that BML
performs inspections and audits with uniformly highquality throughout Japan. In the testing business,
Saitama handles special testing as the main testing
location, and tests that must be done quickly can behandled at any testing location.

Additionally, BML has provided a wide range ofservices to customers in diverse industries, including
restaurants, hotels, wedding venues, contract services,developers, food manufacturers, convenience stores,
and department stores. Because we have a wealth ofexperience that enables us to provide services whileconsidering the characteristics regardless of specificbusiness type, we respond based on our abundant
knowledge in all situations, including new developmentof takeout products by restaurant managers and contract
manufacturing of PB products by hotel operators.

Laboratory

Systemcan conduct inspections uniformly nationwide from Hokkaido to Okinawa.
Comprehensively covers management of customers that operate multiple stores

Food Hygiene Business Network
01 Head Office and Tokyo Branch Office
02 Saitama Branch Office04

03 Saitama Laboratory No. 2
04 Sapporo Branch Office
05 Nagoya Sales Office
06 Osaka Branch Office
07 Osaka Laboratory
08 Fukuoka Branch Office

02 03
06

08

01
05

07

Scope of services provided

Creation of food safety framework
Safety confirmation of
raw materials and ingredients

Safety confirmation ofdeliverables

Informing all employees about rules

Safety confirmation of
kitchen environment

Creation of food safety framework

Safety confirmation of raw
materials and ingredients

Safety confirmation of
manufacturing environment
Safety confirmation offinished products

Informing all employees
about rules

Management of productlabeling*Food testing and stool testing services are included in each category.

75

BML REPORT 2023

Message fromthe Testing Business Manager

Responding to customer needs

In the Clinical Testing Headquarters, we provide scientific, objective, accurate data
through testing, to contribute to customers’ hygiene management, quality
improvement, product development. At testing sites, we are working to systematize
and automatize testing, with the goal of increased efficiency and speed. At thesame time, we are proactively developing new outside-the-box services so that we
can anticipate the ever-changing business environments and needs of ourcustomers. For example, we have recently begun to provide rapid testing methods
for listeria and providing educational content for foreign employees whose numbers
are increasing at food manufacturers, convenience stores, and other workplaces.
Additionally, in response to global changes and customers’ needs, we are making
efforts to strengthen the organizational power of Clinical Testing Headquarters andto strengthen ties with Consulting Headquarters, which interacts directly withcustomers. We are devoted not only to business activities, but also to activities
based on various approaches such as information dissemination.

Kazumi Saeki,
General Manager,
BML Food
Science Solutions,Inc., Clinical
Testing
Headquarters

BML REPORT 2023

76

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Business Overview of Medical Informatics Business

Medical Informatics
Business

Electronic patient charts, indispensable for IT in the era of medical
information networks. The revision of the insurance system and theflow of management and business innovations based on the Internet
are drastically changing the conventional medical care system. The
introduction of electronic patient charts in medical institutions is
expected to have a significant effect on the reengineering of medical
institutions and the establishment of information systems in the midstof these changes in the healthcare system. They are also
indispensable to management analysis, informed consent, andin-hospital DX.
Trends in net sales(millions of yen)

4,350

4,202

4,214

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Mar. 2023

Overview of Businessmaintains the Qualis system that has been popular for
many years.
Typically, cloud-based electronic patient charts havebeen browser-based. However, Qualis Cloud is a cloudbased electronic patient chart that adopts a smart clientsystem, and has the unique advantages of on-premise
systems that have not been realized so far with browserbased systems, including the ability to connect with awide range of devices.
Qualis Cloud will continue to grow further as we
respond to feedback from the medical community.

Diagnostic imaging equipment
Web medical
examination system

Medical ticket
issuing machineCR

Reception
Reception
machine for
return visits

Cloud server(dual backup)

Cloud server

Onlineeligibility check

UltrasoundCT

Onlinemedicalexamination
systemMedicalinformation
database

MRI

Image
filing system

Medicalexamination

Operating Officer, General Manager,
Medical Informatics Sales Department

Strengths and risks of the medical informatics business

5,420

3.4%

Onlineappointment
systemToshihiro Yanoma,

4,816

Composition of
net sales by business

The electronic patient charts system Qualis Cloud is asolution developed by BML in response to requests fromclinics, based on many years of experience in the
medical field.
After the Ministry of Health, Labour 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 cloudbased electronic patient chart system. Qualis Cloud fully

Message

Electrocardiogram

In-hospital
testing equipment

Payment

Testing
Outsourced
testing
Test results
OrdersAutomated
payment machine

Online billingManagement
analysis services

In recent years, boosted by the Medical DX Vision 2030 proposed by the Japanese government, there
has been a further acceleration in the introduction of electronic patient chart systems at medical
institutions. Given that all three processes required to promote medical DX, namely, “infrastructuredevelopment,” “digitalization of information,” and “popularization and promotion of digitalization,” aswell as online eligibility checks (mandatory) and electronic prescriptions (recommended), are basedon electronic patient chart systems, BML’s medical informatics business is expected to become
increasingly important. The digitalization of electronic patient chart systems is resulting in thestandardization and effective use of medical data. On the other hand, it is essential to build security
systems that will ensure the protection of that data from falsification due to malicious viruses,
information leaks, and loss of data due to disasters. From day-to-day diagnosis and treatment, we will
make further efforts to provide products and services in which quality and reliability are the top priority,
as a platform for medical DX.

Review of business performance for FY2022
In April 2022, BML began marketing the “Qualis Cloud,” a cloud-based electronic patient chartsystem.
As we have positioned this system as our main product for the future, in addition to seeking newsales to increase market share, we have also focused our efforts on system updates (replacements)
for customers who use our original products. As a result of efforts to expand our sales channels,
strengthen cooperation with sales companies, and review our overall marketing through newpromotions, including the development of non-contact sales in light of the COVID-19 pandemic,
we achieved record-high results, thanks to new sales, in addition to special demand resulting fromhealthcare system reforms. On the other hand, the rapid expansion of business operations has led tothe emergence of situations in which that expansion has adversely affected quality and trust, which
are our business philosophy. As such, the restructuring of sound business operations that put thecustomer first has become an issue.

Future strategy
FY2023 is the final year of the Eighth Medium-Term Management Plan, which declares quality as our
top priority in the Group Vision “to become the most trusted choice in the medical world.” We willplace top priority on overcoming the quality and service challenges that have become apparent in theelectronic patient chart systems business. To make a leap forward into the next fiscal year andbeyond, we will make steady progress toward achieving sound business management and businessexpansion, backed by the trust of our customers.

External laboratories (BML and others)

77

BML REPORT 2023

BML REPORT 2023

78

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Business Overview of Medical Informatics Business
Three related strengths

Evolving electronic patient charts

Qualis CloudStrength 1
Sales

Laboratory

Various functions made possible

SystemSales

Laboratory

SystemVarious support functions are installed to provide an optimal user experience

Decline of resources for paper patient charts
At one time, the introduction of electronic patient chart
was a challenge. However, now their usefulness is widely
recognized, and it can be said that we have progressed
to a point in which electronic patient charts are
ubiquitous.
Electronic patient charts save space and make itpossible to digitalize and manage all of the medical dataof many patients. Therefore, by eliminating the use of
paper patient charts heavily utilized in the past, we canalso reduce paper consumption and contribute to theprotection of resources.
Additionally, going paperless leads to more efficient
in-hospital information management and is effective forproviding medical services that accurately addresspatient conditions.

Three related strengths

for each medical examination situation. From simple to complex operations,
Transition from paper patient charts to electronic patient charts

it is highly customizable, which was previously thought to be impossible with a cloud-based product.

Paper patient charts
Work load involved in searching for, transferring, andstoring patient charts, voucher posting, and pasting
Securing space to store patient charts
Work load involved in inputting into receipt computer andrisk of transcription errors
Risk of losing patient charts, etc.

Onlinemedical care
Medicalexamination,
treatment,prescription

Reception

House callsby doctors andin-homemedical careOn-premise electronic patient charts

Qualis CloudStrength 2Electronic patient charts increase efficiency
to improve client working environments

Healthinsurance
claim request

Payment

Completion of support system by the support center

Even with cloud products, we continue to provide the support and quality that have been BML’s
By introducing electronic patient charts, medical
institutions can improve their working environments.
In addition to sharing necessary information in a timely
manner, understanding patient conditions by looking at
a computer terminal, and improving the work efficiencyof doctors, nurses, and staff, including treatment andaccounting immediately upon finishing medical
examinations, electronic patient charts can eliminate
human errors such as transcription errors that have beena concern with paper patient charts.
Medical examination efficiency also leads to shorter
wait times for patients and helps to improve patient
services and the quality of medical care by making it
possible to explain clearly by showing test results and soforth in graph format and showing photographs of drugs.

Message froma developer

Servertelephone support by expert operators,
Cloud-based electronic patient charts

BML REPORT 2023

we have various support systems ,Remotesupportincluding on-site education by instructors
during installation and field support fromour office locations.

Qualis CloudStrength 3

Makes thorough security measures possible

Complies with government guidelines

Development of electronic patient charts thatcan be used by customers for a long time

Since the approval of electronic storage in 1999, BML has developed various
functions aiming to improve daily medical examination efficiency for clinics that are
customers of BML and the patients that visit these clinics. In April 2022, we released
a cloud-based electronic patient chart system, which expands the possibilities ofusing data. Electronic patient charts are a tool used in daily medical examinations,and we are developing these daily with attention to quality and ease of use. Whencustomers report during visits that they are happy to be using BML electronic
patient charts, we feel a sense of fulfillment toward being able to help provide
quality medical services. We will continue to work together as a team on developing
electronic patient charts that can be used by customers long-term.

79

strengths for over 20 years. In addition to

We implement security measures that comply with the
Security Guidelines for Medical Information Systems by
the Ministry of Health, Labour and Welfare and the
Security Guidelines for Information System Service
Providers Handling Medical Information by the Ministryof Internal Affairs and Communications and the Ministryof Economy, Trade and Industry.

Ministry of Health,Labour and Welfare
Security Guidelines for
Medical Information
Systems

Ministry of Internal Affairs andCommunications, Ministry of
Economy, Trade and Industry
Security Guidelines for
Information System Service
Providers Handling Medical
Information

Acquisition of ISO27017

Miwa Yuasa,

We have obtained accreditation under the Conformity
Assessment Scheme for Information Security
Management Systems (ISMS) to prevent risks such as
falsification, interception, and leaking of important
information.

Deputy General
Manager, Electronic
Patient Chart Department
BML REPORT 2023

80

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Financial Data
11-Year Summary of Financial Data
Financial data
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

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

94,60899,047

104,404

109,024

111,243

113,502

117,129

120,732

138,571

186,067

159,462

Gross profit

34,65536,44137,03838,85539,79940,46342,22742,25054,76886,951

61,446

Selling, general and administrative expenses

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

31,77732,487

34,83138,06137,509Operating income

6,637

8,188

6,974

8,429

9,329

9,337

10,4509,763

19,936

48,88923,936

Ordinary income

6,979

8,582

7,527

8,830

9,711

9,811

10,88010,21120,80351,07724,182

Profit attributable to owners of parent

3,708

4,990

3,874

5,424

5,948

5,988

6,646

6,375

13,711

33,741

15,578

Net assets

52,94357,65761,96865,20670,64776,222

81,12780,422

93,123

121,684

126,751

Total assets

83,04788,52593,59599,394104,244

109,438

115,972

116,273

139,174

179,200

168,943

Equity50,75455,18859,21362,12367,19972,52077,072

76,09988,377116,163

122,467

Cash flows from operating activities

9,792

10,931

11,495

11,97811,307

12,07912,507

12,771

19,57445,603

11,742

Cash flows from investing activities(6,974)(1,762)(4,586)(3,234)(5,239)(3,538)(3,940)(5,213)(4,584)(7,297)(7,627)

Cash flows from financing activities(2,370)(2,622)(2,806)(2,916)(2,856)(2,983)(3,041)(8,784)(3,382)(9,828)(9,715)

Cash and cash equivalents at end of period

18,102

24,64929,061

34,91038,122

43,67949,204

48,24659,85388,36082,7602,389.83

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

3,138.63

Profit attributable to owners of parent per share

174.65234.98182.45255.40140.03140.83156.07151.27337.44833.24395.84

Annual dividends per share

40.00

50.00

60.00

60.00

35.00*

35.00

38.00

45.00

70.00

120.00100.00Gross profit to net sales ratio

36.6

36.8

35.5

35.6

35.8

35.6

36.1

35.0

39.5

46.7

38.5

Operating income to sales ratio

7.0

8.3

6.7

7.7

8.4

8.2

8.9

8.1

14.4

26.3

15.0

Ordinary income to net sales ratio

7.4

8.7

7.2

8.1

8.7

8.6

9.3

8.5

15.0

27.5

15.2

ROE

7.5

9.4

6.8

8.9

9.2

8.6

8.9

8.3

16.7

33.0

13.1

ROA

4.6

5.8

4.3

5.6

5.9

5.6

5.9

5.5

10.7

21.2

8.9

Equity ratio

61.1

62.3

63.3

62.5

64.5

66.3

66.5

65.4

63.5

64.8

72.5

Dividend payout ratio

22.9

21.3

32.9

23.5

25.0

24.9

24.3

29.7

20.7

14.4

25.3

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.

81

BML REPORT 2023

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82

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Consolidated Financial Statements
Consolidated balance sheets(millions of yen)

As of March 31,
2022(millions of yen)

As of March 31,
2023

AssetsLiabilities

Current assets

Current liabilities

As of March 31,
2023

Cash and deposits

92,12686,521

Notes and accounts payable–trade

21,672

20,094

Notes and accounts receivable–trade

36,40526,783

Lease obligations

1,194

1,363

Merchandise and finished goods

467

359

Income taxes payable

12,600609

Work in process

749

800

Provision for bonuses

3,616

3,720

Raw materials and supplies

3,659

3,624

Accounts payable–other

10,1507,146

Other current assets

3,737

4,835

Other current liabilities

2,787

2,448

(75)

(47)

Total current liabilities

52,02235,383137,070

122,877

2,136

2,787

214

223

Retirement benefit liability

2,616

3,244

Other non-current liabilities

525

553

Total non-current liabilities

5,494

6,809

57,51642,192

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

9,844

10,353Land

13,342

13,341

Net assets

Leased assets, net

2,969

3,721

Shareholders’ equity

Others, net

6,180

7,733

Share capital

6,045

6,045

Total property, plant and equipment

32,33735,150Capital surplus

6,646

6,646

Retained earnings

110,458

118,378(8,057)(8,902)

115,094

122,169

Intangible assets
Other intangible assets

3,973

4,542

Treasury shares

Total intangible assets

3,973

4,542

Total shareholders’ equity

Investments and other assets

Accumulated other comprehensive income

Investment securities

1,701

2,673

Valuation difference on available-for-sale securities

453

268

Deferred tax assets

2,566

2,058

Remeasurements of defined benefit plans

616

29

Other

1,635

1,757

Total accumulated other comprehensive income

1,069

298

Allowance for doubtful accounts

(83)

(116)

Share acquisition rights

35

23

Total investments and other assets

5,819

6,373

Non-controlling interests

5,485

4,260

42,13046,066

Total net assets

121,684

126,751

179,200

168,943

Total liabilities and net assets

179,200

168,943

Total non-current assets
Total assets

83

As of March 31,2022

BML REPORT 2023

BML REPORT 2023

84

About the BML Group

Growth Strategy for
Value Creation

BML’s Sustainability

Strategy by Business

Data Section

Consolidated Financial Statements
Consolidated statements of income(millions of yen)

Fiscal Year Ended
March 31, 2022

Fiscal Year Ended
March 31, 2023

Net sales

186,067

159,462

Cost of sales

99,116

98,016Gross profit

86,951

61,446

Selling, general and administrative expenses

38,06137,509Operating income

48,88923,936

Non-operating income
Rental income from real estate
Subsidy income
Other
Total non-operating income

60

65

1,887

171

343

263

2,292

500

Non-operating expenses
36

40

Cost of real estate lease revenue

44

27

Refund of subsidy

10

162

Other

13

23

Total non-operating expenses

104

254

51,07724,182Gain on sales of investment securities

6215

Gain on extinguishment of tie-in shares

20

Extraordinary income

Profit before income taxes

50,32824,184

Depreciation

Cash flows from operating activities
5,801

6,257

Impairment losses

327

47

Loss on retirement of non-current assets

449

158

Loss (gain) on sale of investment securities

(6)

(215)

Interest expenses

36

40

Decrease (increase) in trade receivables(5,996)

9,589

Decrease (increase) in inventories

(836)

88

Increase (decrease) in trade payables

1,365(1,577)196

103(1,887)

(171)

10

162

(74)

(2,051)

1,512(3,599)Subsidy income
Refund of subsidies
Decrease (increase) in income taxes refund receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in consumption taxes refund receivable
未収消費税等の増減額（△は増加）

1,581(1,294)Sub-total

52,80730,480Interest paid

(36)

(40)

Income taxes paid

(9,220)(18,793)

Subsidies received

1,919

146

(10)

(162)

1

6

29

221

Loss on retirement of non-current assets

449

158

Impairment losses

327

47

0

14

777

219

Profit before income taxes

50,32824,184

Income taxes–current

15,845

7,181

Income taxes–deferred

(195)

846

Total income taxes

15,6508,027

Profit34,67816,156937

578

33,741

15,578

Fiscal Year Ended
March 31, 2022

Fiscal Year Ended
March 31, 2023

34,67816,156

(43)

(185)

Purchase of shares of subsidiaries not resulting in change in scope of consolidation
Other, net

Total extraordinary losses

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

Consolidated statements of comprehensive income
ProfitOther comprehensive income
Valuation difference on available-for-sale securities(1,243)

Other, net

Other

Other

Refund of subsidy paid
Other proceeds
Net cash provided by (used in) operating activities

143

112

45,603

11,742(5,388)(5,628)Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

5,248

5,633

Purchases of property, plant and equipment(5,694)(4,562)

Purchases of intangible assets(1,391)(1,898)(1)(1,428)Purchase of investment securities

32

404

(102)

(147)

(7,297)(7,627)

Repayments of lease obligations(1,378)(1,423)

Dividends paid

(3,455)(4,964)

Proceeds from sale of investment securities
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities

Dividends paid to non-controlling interests
Purchase of treasury shares

(151)

(211)

(4,818)(1,000)(2,100)(23)(13)(9,715)Remeasurements of defined benefit plans, net of tax

54

(589)

Total other comprehensive income

11

(774)

Net cash provided by (used in) financing activities(9,828)15,382

Net increase (decrease) in cash and cash equivalents

28,477(5,599)Cash and cash equivalents at beginning of period

59,85388,360Comprehensive income

34,689

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

85

Fiscal Year Ended
March 31, 2023

Total extraordinary income
Extraordinary losses(millions of yen)

Fiscal Year Ended
March 31, 2022

Increase (decrease) in provision for bonuses

Interest expenses

Ordinary income

Consolidated statements of cash flows

BML REPORT 2023

33,754

14,806935

575

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

28
88,36082,760BML REPORT 2023

86

Growth Strategy for
Value Creation

About the BML Group

BML’s Sustainability

Strategy by Business

Data Section

Corporate Summary and Stock Information

BML Policy

Stock Information (as of March 31, 2023)

Corporate Mission

Major Shareholders

Corporate Summary (as of March 31, 2023)
Corporate Information

Dedication to creating a healthy and cultured society.
Shareholder nameTrade name

BML, INC.

Place of Head
Office5-21-3 Sendagaya, Shibuya-ku,
Tokyo, JapanBML is committed to creating
Tel: +81-3-3350-0111 (main)a culturally rich society by improving
https://www.bml.co.jp/eng/

BML Planning, Inc.

Share CapitalManagement
Objectives
4,415 (consolidated basis)

Pride

2

Ensuring trust
in150
BML throughsuperior
expertise and100
qualityservices

2.76

77.56%
3.43%
10 trading units or more
5.02%
50 trading units or more
0.82%
100 trading units or more 1.08%
500 trading units or more 0.34%
1,000 trading units or more 0.42%
5,000 trading units or more 0.17%
Treasury shares
0.01%
Less than 1 trading unit 11.15%
1 trading unit or more

5 trading units or more

15.88%
0.59%
Other domestic companies
28.06%
Individuals and others
21.77%
Foreign companies and others 25.27%
Treasury shares
8.43%
Financial institutions

By numberof units held(number ofshareholders)

Financial service providers

Meeting the challenge of ever higher objectives
through total creativity

By type ofshareholder

Progress

Developing
a creative,
energeticorganization

1,080

Shareholder Distribution

Commitment

3

2.83

*1. Although the Company holds 3,594 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. are all related to trust operations.

Having conviction in business andacting responsibly

TOPIX

1,107

Shige Kondo

Challenge

BML

8.12

ACCOUNT

Providing top service through strong commitment
and sincerity
Meeting client
Stock Price Informationneeds and Trend in Total Shareholder Return
(%)
200

3,169

Kensuke Kondo

Corporate
Commitments

Number of
Employees

1

9.81

SSBTC CLIENT OMNIBUS

experience.

Fulfilling expectations through creative
Business
Laboratory testing services andtechnology andrelated
qualityservice.
Description
services

3,829(trust account)

our extensive clinical laboratory

6,045 million yen

26.02

Japan, Ltd.

1361-1 Matoba, Kawagoe City,
Saitama, Japan the latest technologies, systems,
Tel: +81-49-232-3131 (main)
July 1955

10,154The Master Trust Bank ofand service networks based on

Date Founded

Shareholding
ratio (%)

(1,000 shares)

medical services and health through

BML General
Laboratory

Number ofshares held

Keeping an eye on social progress and improving
and refining sensitivity

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

50

Stock Price Chart
Volume (shares)0

2019/42020/365th Fiscal Year

2021/32022/367th Fiscal Year

66th Fiscal Year
Information disclosuresystem2023/368th Fiscal Year

Stock price (yen)6,000,000

6,000

4,000,000

4,000

2,000,000

2,000*Rebased to 100 as of 2019/4.

Financial information

Non-financial information

Earnings reports

Corporate governance

Annual securities reports

reports, etc.

Reports to shareholders

0

2020
4 5

6

7

8

2021
9 10 11 12 1 2

3

4

5

6

7

8

2022
9 10 11 12 1 2

3

4

5

6

7

8

2023
9 10 11 12 1 2

0

3

4

5

6

7

8

9 (Year/Month)

BML REPORT 2023

BML Website:

1

87BMLBMLREPORTREPORT
20232023

https://www.bml.co.jp/eng/

BML REPORT 2023

88

BML REPORT 2023 Integrated Report

BML REPORT
2023

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: https://www.bml.co.jp/eng/

This report was printed
on eco-friendly FSC®certified paper using
vegetable oil ink.

BML, INC.