This document has been translated from the Japanese original for reference purposes only. In theevent of any discrepancy between this translated document and the Japanese original, the original
shall prevail. Sosei Group Corporation makes no warranty of any nature as to the accuracy of thisEnglish translation and assumes no responsibility for this translation or for direct, indirect or any otherform of damages arising from the translation.
TSE Securities Code: 4565
March 8, 2021

To Our Shareholders:

2-1 Kojimachi, Chiyoda-ku, Tokyo

Sosei Group Corporation
Chairman of the Board,
Representative Executive
Officer, Chairman,
President and CEO

Shinichi Tamura

Notice of the 31st Ordinary General Meeting of Shareholders
Sosei Group Corporation (the Company) would like to inform you that the 31st Ordinary General
Meeting of Shareholders of the Company (the “Meeting”) will be held as follows.
Since voting rights may be exercised in writing(by mail) or on the internet, we strongly ask
shareholders to consider forgoing attending the General meeting of Shareholders to prevent the
spread of COVID-19, and at the same time, exercise voting rights in advance as much as possible,
either by returning the voting form by post or voting on the internet.
Please read the Reference Documents for the Meeting included in this document and exercise
your rights by 5:00 p.m. on Tuesday, March 23, 2021.
Yours sincerely
Date and Time

Wednesday, March 24, 2021 at 10:00 a.m. (Reception start: 9:00 a.m.)

Venue

Fuji-No-Ma Hall, 4th Floor, Hotel Grand Arc Hanzomon
1-1, Hayabusa-cho, Chiyoda-ku, Tokyo, Japan
Please refer to “Access to Meeting of Shareholders Venue” at the end.

AgendaMatters to bereported:

Matters to beresolved:
Matters relating toInternet
Disclosure

1. Business Report, Consolidated Financial Statements, andReports of Independent Auditor and the Audit Committee on theConsolidated Financial Statements for the 31st fiscal period (fromJanuary 1, 2020 to December 31, 2020)
2. Report on the Non-Consolidated Financial Statements for the 31st
fiscal period (from January 1, 2020 to December 31, 2020)
Proposal - Election of Six (6) Directors(1) Of the documents that should be provided with this notice, the following matters
are listed on the Company’s Internet website in accordance with laws andregulations and Article 14 of the Articles of Incorporation of the Company and notprovided with this notice. Therefore, the documents provided within this notice are
only a portion of the documents over which the Audit Committee and Independent
Auditor conducted an audit and prepared audit reports.
1) “Stock acquisition rights (“stock options”), etc.”, “Outline of the systems for
ensuring the appropriateness of operations and their operating status” and“Policy on the conduct of persons influencing decision on the Company's
financial and business policies” in the business report
2) “Consolidated Statement of Changes in Equity” and “Notes to the Consolidated
Financial Statements” in the consolidated financial statements3) “Non-Consolidated Statement of Changes in Equity” and “Notes to the NonConsolidated Financial Statements” in the non-consolidated financial
statements(2) Should any revisions be made to the Reference Documents for the Meeting,Business Report, Non-Consolidated Financial Statements or Consolidated
Financial Statements prior to the date of the Meeting, the Company will post a noticeon its website set forth below.
Website of the Company (https://www.soseiheptares.com/)1

Exercise of Voting Rights
You may exercise your voting rights using one of the following three methods.
Exercising voting rights in writing (by mail)Please indicate your approval or disapproval of each proposal on the enclosed Voting Formand post it without affixing postage stamps.
Exercise due date: To be received no later than 5:00 p.m. on Tuesday, March 23, 2021
Exercising voting rights via the Internet
Please use a personal computer or smartphone to access the voting website designated by
the Company. Please enter the “voting code” and “password” printed on the enclosed Voting
Form and exercise your voting rights by following the instructions displayed on the screen.
Exercise due date: No later than 5:00 p.m. on Tuesday, March 23, 2021
For those attending the Meeting in person
Please submit the Voting Form at the reception desk at the venue. (No seal is necessary.)
Date and Time:
Wednesday, March 24, 2021 at 10:00 a.m. (Reception start: 9:00 a.m.)
Venue:
Fuji-No-Ma Hall, 4th Floor, Hotel Grand Arc Hanzomon
1-1, Hayabusa-cho, Chiyoda-ku, Tokyo, JapanThe Company designated voting website
https://www.web54.net
You can connect to the voting website via smartphone.
<Smart Vote>
Smartphone users may log in to the voting website without entering the “voting code” and“password” by scanning the QR Code printed on the bottom right of the enclosed Voting
Form. For details, please refer to the enclosed leaflet.
<Cautionary matters>
 Each shareholder shall bear any fees for accessing the voting website (Internet connection
fees, communications fees, etc.).
 If you exercise voting rights multiple times via the Internet, the final vote cast will be
regarded as the effective vote.
 If you exercise voting rights redundantly in writing (by mail) and via the Internet, the votes
cast via the Internet will be regarded as the effective votes.
Inquiries related to exercise of voting rights via the Internet
The Sumitomo Mitsui Trust Bank, Limited, Stock Transfer Agency Web Support Helpline
Telephone: 0120-652-031 (toll-free in Japan only; hours: 9:00 a.m. to 9:00 p.m.)
To institutional investors
You may use the Electronic Voting Platform operated by ICJ Inc., as a method of exercising
your voting rights.

2

Measures to prevent the spread of COVID-19
This General Meeting of Shareholders will give top priority to the health and safety of
Shareholders and the prevention of the spread of COVID-19, and we ask for your understanding
and cooperation as follows.

1.Request to Shareholders
・Shareholders are asked to consider forgoing attending the General meeting of
Shareholders and at the same time, exercise voting rights in advance as muchas possible, either by returning the voting form by post or voting via theinternet.
2.On our response
・Officers and staff shall attend wearing masks.
・Hand sanitizers will be available in the reception area and the venue.
・We will take your temperature at the entrance. Please refrain from entering or we
may ask Shareholders to leave the venue in the following cases;
In the case of Pyrexia is confirmed by taking your temperature.
In the case of coughing or other symptoms are observed.
In the case of the uncooperation in wearing a mask or using hand sanitizers.
・The seats at the venue will be spaced. Since the number of seats are reduced
from the previous year, you may not be admitted if seats are full.
・We will do our best to shorten the meeting time as much as possible.

We are pleased to inform you of any significant changes in the management of the meeting on
our website (https://soseiheptares.com/).

3

Proposal Election of Six (6) Directors
The term of office of all six Directors currently in office will expire upon conclusion of the Meeting.
Accordingly, the election of six Directors shall be proposed. The proposal is presented based ona decision by the Nomination Committee.
The candidates are as shown below.

Candidate
No.

Name

1

Shinichi Tamura

2

Tomohiro Tohyama

3

Kuniaki Kaga

4David Roblin

5

Noriaki Nagai
Rolf Soderstrom

6

Reappointed
External
Ind

Current positions andresponsibilities at the Company

Chairman of the Board,
Representative Executive Officer,
Chairman, President and CEO
Chair of the Nomination
Committee, Member of theCompensation Committee
External Director,
Chair of the Audit Committee,
Member of the Compensation
Committee
External Director,
Member of the Nomination
Committee,
Member of the Audit Committee
External Director,
Chair of the Compensation
Committee
Member of the Nomination
Committee,

Number oftimes
attended
Board ofDirectors
Meetings

Attribute

26/26

Reappointed

times

ReExternal
appointed

Ind

26/26

ReExternal
appointed

Ind

26/26

ReExternal
appointed

Ind

22/26

External Director,
Member of the Audit Committee

ReExternal
appointed

Ind

26/26

External Director,
Member of the Compensation
Committee
Member of the Audit Committee

ReExternal
appointed

times

times

times

times

19/21

Candidate as Reappointed Director
Candidate as External Director
Independent Director designated in accordance with the listing regulations ofstock exchanges

4

times

Notes 1. There is no special conflict of interests between the Director candidates and the Company.
2. Mr. Tomohiro Tohyama, Mr. Kuniaki Kaga, Dr. David Roblin, Mr. Noriaki Nagai, and Mr. Rolf Soderstrom are
candidates for External Directors.
3. Summary of liability limitation agreements with the candidates
In accordance with Article 427, Paragraph 1 of the Companies Act, the Company entered into an agreementthat limits liability for damages under Article 423, Paragraph 1 of the said Act with each of Mr. Tomohiro
Tohyama, Mr. Kuniaki Kaga, Dr. David Roblin, Mr. Noriaki Nagai, and Mr. Rolf Soderstrom. The limit on theliability for damages under the agreements is the minimum amount of liability stipulated in Article 425,
Paragraph 1 of the Companies Act.
4．We have a liability insurance (D&O insurance) policy in which all of our directors are insured. To a director who
is an insured person being liable for the execution of his/her duties or a request pertaining to the pursuance ofsuch liability damage that may be caused by such damage is covered. Moreover, we plan to renew D&O
insurance with same content for the next contract renewal.
5. If this proposal is approved at the Meeting, the Company intends to continue the liability limitation agreementswith Mr. Tomohiro Tohyama, Mr. Kuniaki Kaga, Dr. David Roblin, Mr. Noriaki Nagai, and Mr. Rolf Soderstrom
stated in 3. above.
6. Mr. Rolf Soderstrom was elected Director at the 30th Ordinary General Meeting of Shareholders held on March
25, 2020, and accordingly, the number of times he attended meetings of the Board of Directors since hisassumption of office is as stated above.
7. The Company has notified Tokyo Stock Exchange, Inc. of Mr. Tomohiro Tohyama, Mr. Kuniaki Kaga, Dr. David
Roblin, Mr. Noriaki Nagai, and Mr. Rolf Soderstrom as Independent Directors in accordance with theregulations of the same Exchange.

5

CandidateNo.

1
Reappointed

Shinichi Tamura

No. of shares owned:(Born 9/17/1949, Male)

1,138,062

Term of office as Board Director:

31 years

Attendance at Board Meetings:

26/26 times[Career summary, and positions and responsibilities at the Company]
Apr. 1978
Feb. 1987
Jul. 1989
Jun. 1990
Jun. 2005
Mar. 2012
Jun. 2016

Jan. 2019

Joined Fujisawa Pharmaceutical Co., Ltd.
(current Astellas Pharma Inc.)
Joined Genentech Inc.
Representative Director & President, Genentech Limited
Representative Director & CEO of the Company
Board Director, Representative Executive Officer and President, CEO of
the Company
Managing Director, Sosei R&D Ltd.
Chairman of the Board of the Company (to the present)
Representative Executive Officer and Executive Chairman of theCompany
Representative Executive Officer, Chairman, President and CEO of theCompany (to the present)<Committee membership>
Chair of the Nomination Committee; Member of the Compensation Committee[Significant concurrent posts]
N/A
Reason for selection of the candidate as Director
Mr. Shinichi Tamura is the founder of the Company. Experienced in business
management in the pharmaceutical industry, he has led the Company’s businessexpansion. To ensure that the Company’s business will continue to develop, the reelection of Mr. Tamura as a Director shall be proposed.

6CandidateNo.

2of shares owned:
Tomohiro Tohyama No.
Term of office as External Director:

Reappointed[Career summary, and positions and responsibilities at the Company]

External
Independent(Born 2/21/1950, Male)

Apr. 1978
Apr. 1980
May 1984
Feb. 1985
Jun. 1985
Aug. 1985
Oct. 1990
Nov. 1999
Jun. 2010
Jun. 2011
May 2016
May 2016
Jun. 2016

Attendance at Board Meetings:

25,36010 years
26/26 times

Entered Legal Training and Research Institute, Supreme Court of Japan
Registered with Dai-ichi Tokyo Bar Association
Joined Nishimura & Sanada Law Office
Mason & Sloane LLP., USA
Pollock, Bloom & Dekom, USA
Pryor, Cashman, Sherman & Flynn, USA
Returned to Nishimura & Sanada Law Office as a partner
Partner at TMI Associates (to the present)
Outside Corporate Auditor, Nippon Shikizai, Inc.
External Director, Avex Group Holdings Inc.
External Director of the Company (to the present)
External Director, Member of the Audit and Supervisory Committee,
Nippon Shikizai, Inc. (to the present)
External Director, Trust Capital Co., Ltd.
External Audit and Supervisory Board Member, WOWOW Inc.

<Committee membership>
Chair of the Audit Committee; Member of the Compensation Committee[Significant concurrent posts]
Partner at TMI Associates
External Director and Audit and Supervisory Committee Member of Nippon Shikizai,
Inc.
Reason for selection of the candidate as External Director
Mr. Tomohiro Tohyama has extensive experience and expertise in international
corporate legal affairs as a partner at a major law firm in Japan. Whilst he has notpreviously held a corporate management role, he has acted as an External Director
and Corporate Auditor, and therefore the Company believes that by leveraging his
deep expertise and experience and receiving views and opinions on the Company’s
overall management from this specialized perspective, the Company will be able tofurther strengthen the management and governance structures and so proposes his
reappointment as an External Director.

7

CandidateNo.

3
Reappointed

Kuniaki Kaga

No. of shares owned:
Term of office as External Director:(Born 9/1/1951, Male)

Attendance at Board Meetings:

17,811
3 years
26/26 times[Career summary, and positions and responsibilities at the Company]

External

Apr. 1975

Independent

Jun. 2004
Oct. 2005
Jun. 2006

Jun. 2009
Jun. 2010
Apr. 2012

Apr. 2014
Feb. 2015
Jun. 2018
Jan. 2021

Joined Mitsubishi Kasei Kogyo Kabushiki Kaisha (current Mitsubishi
Chemical Corporation)
Deputy Director, Head of Healthcare Planning Department, Mitsubishi
Chemical Corporation
Deputy Director, Mitsubishi Chemical Holdings Corporation
Head of Healthcare Strategy Office
Executive Officer and Head of Healthcare Strategy Office, Mitsubishi
Chemical Holdings Corporation
Executive Officer, Head of Healthcare Business Domain, and General
Manager of Healthcare Planning Office, Healthcare Business Domain,
Mitsubishi Chemical Corporation
Board Director, Mitsubishi Tanabe Pharma Corporation
Representative Director, Managing Executive Officer, General Manager
of International Business Department, Mitsubishi Tanabe Pharma
Corporation
Representative Director, Senior Managing Executive Officer, General
Manager of Research Division and International Business Department,
Mitsubishi Tanabe Pharma Corporation
President and Representative Director, Life Science Institute, Inc.
Board Director, Mitsubishi Tanabe Pharma Corporation
Board Director, The KAITEKI Institute, Inc.
President and Representative Director, The KAITEKI Institute, Inc.
External Director of the Company (to the present)
External Director, SUSMED, Inc (to the present)<Committee membership>
Member of the Nomination Committee; Member of the Audit Committee[Significant concurrent posts]
External Director, SUSMED, Inc
Reason for selection of the candidate as External Director
Mr. Kuniaki Kaga has held several important senior positions at leading
pharmaceutical companies in Japan. The Company believes that he will leverage his
extensive experience and specialized knowledge to advise the Company on overallmanagement to further strengthen the supervision of the Company’s overallmanagement system and so proposes his reappointment as External Director.

8

Candidate
No.

4
Reappointed
External
Independent

David Roblin

No. of shares owned:-

Term of office as External Director:(Born 9/25/1966, Male)

Attendance at Board Meetings:

3 years
22/26 times[Career summary, and positions and responsibilities at the Company]
Apr. 1991
Apr. 1997
Dec. 2008
Apr. 2011
Sep. 2013
Jun. 2015
Feb. 2017
Jun. 2018
Mar. 2020

Medical practice at St George’s and St Bartholomew’s Hospital, London
Head of Therapy Area for Anti-Infectives, Bayer Pharma AG
Senior Vice President, Head of Research, Site Head, Chief Medical
Officer (CMO), Europe R&D, Pfizer Inc.
CMO, Creabilis SA
Honorary Professor, Swansea University, School of Medicine (to thepresent)
Honorary Professor of Translational Medicine, St George’s Hospital
Medical School (to the present)
Chairman of Scientific Translation, The Francis Crick Institute (to thepresent)
External Director of the Company (to the present)
COO and CEO JuvRX, Juvenescence Ltd (to the present)<Committee membership>
Chair of the Compensation Committee; Member of the Nomination Committee[Significant concurrent posts]
Honorary Professor, Swansea University, School of Medicine
Honorary Professor of Translational Medicine, St George’s Hospital Medical School
Chairman of Scientific Translation, The Francis Crick Institute
COO and CEO JuvRX, Juvenescence Ltd
Reason for selection of the candidate as External Director
Dr. David Roblin gained clinical experience as a physician, and later followed with adistinguished career in the pharmaceutical industry, most notably as SVP and Head of
R&D in Europe for a major pharmaceutical company. The Company believes that hewill leverage his extensive experience and specialized knowledge to advise theCompany on its R&D pipeline and further strengthen the supervision of the Company’sbusiness management and so proposes his reappointment as External Director.

9Candidate
No.

5
Reappointed
External
Independent

Noriaki Nagai

No. of shares owned:
Term of office as External Director:(Born 12/1/1957, Male)

Attendance at Board Meetings:

5,088
2 year
26/26 times[Career summary, and positions and responsibilities at the Company]
Apr. 1981
Sep. 1998
Jun. 2000
Apr. 2006
Apr. 2010
Apr. 2011
Jun. 2013
Jun. 2013
Apr. 2014
Apr. 2015
Mar. 2019

Joined Nomura Securities, Co., Ltd. (NSC)
Managing Director, Head of European Administration Division of
Nomura International plc, London
General Manager, Legal Dept., NSC
Member of Board of Executive Officers, Head of Corporate Planningand Legal Dept., Nomura Holdings, Inc. (NHI) and NSC
Executive Managing Director, NSC
Chief Legal Officer, Senior Corporate Managing Director, NHI
Senior Corporate Managing Director, NSC
External Director, Japan Securities Depository Center, Inc.
External Director, Japan Securities Clearing Corporation
Deputy Chief of Staff and Chief Legal Officer, Senior Corporate
Managing Director, NHI and NSC
Professor of Law, Doshisha University
External Director of the Company (to the present)<Committee membership>
Member of the Audit Committee[Significant concurrent posts]
N/A
Reason for selection of the candidate as External Director
Mr. Nagai held several important senior positions at a corporate division of a major
securities company andwas a university professor at the faculty of law. The Company
believes that by leveraging his extensive experience and specialized knowledge andreceiving views and opinions on the Company’s overall management, the Company
will be able to further strengthen the management and governance structures and so
proposes his reappointment as an External Director.

10Candidate
No.

6
Reappointed
External
Independent

Rolf Soderstrom

No. of shares owned:
Term of office as External Director:(Born 7/29/1965, Male)

Attendance at Board Meetings:

1 years
19/21 times[Career summary, and positions and responsibilities at the Company]
Jan. 1988
Dec. 2000
Jun. 2002
Jun. 2004
Aug. 2007
Mar. 2020
May. 2020
Sep. 2020

PricewaterhouseCoopers
Corporate Finance Director, Cable & Wireless plc
External Director, MobileOne Ltd. (current M1 Ltd.)
Divisional Finance Director, Cobham plc
Chief Financial Officer, Protherics plc (current BTG plc)
External Director of the Company (to the present)
External Director, Ergomed plc (to the present)
Non Executive Director, BioPharma Credit plc (to the present)<Committee membership>
Member of the Audit Committee; Member of the Compensation Committee[Significant concurrent posts]
Senior Independent Director, Ergomed plc
Non Executive Director, BioPharma Credit plc
Reason for selection of the candidate as External Director
Mr. Rolf Soderstrom, being a Chartered Certified Accountant, and having been involved
in M&A, risk management and governance as a corporate leader in the field of financeat companies in Europe, North America, Asia, etc., has accumulated broad experiencefrom a global standpoint, and he boasts a lasting track record. The Company believes
that by leveraging his extensive experience and knowledge and by receiving reviews
and opinions as a finance expert on the management of the Company based on thecompanies he has been involved in, the Company will be able to further strengthen the
management and governance structures and so proposes his reappointment as anExternal Director.

11Composition and expertise of the Board of Directors, subject to the approval of this Proposal, isReference

listed in the following table.
Note that the table below does not necessarily show all the expertises that the Directors have.
Name

Corporate
management

Technology
R&D

Businessstrategy・marketing●●●

Financeaccounting

Legal

Shinichi Tamura
Re appointed

Committee membershipslatedNomination Committee
Remuneration Committee

Tomohiro Tohyama
Re appointed
External●●

Independent

Audit Committee
Remuneration Committee

Kuniaki Kaga
Re appointed
External

●

●

●

●

●

●

Nomination Committee
Audit Committee

Independent

David Roblin
Re appointed
External

Remuneration Committee
Nomination Committee

Independent

Noriaki Nagai
Re appointed
External

●

●

●

●

●

Audit Committee

Independent

Rolf Soderstrom
Re appointed
External●

Independent

12

Remuneration Committee
Audit Committee

Reference

the Independence Standards for External Directors
An external director will be determined to be independent if he or she does not fall under any of
the following categories:(1) A person who is or was an executive director, executive officer or other officer or employee (hereinaftercollectively referred to as "Executive") of our Group (the Company and its affiliated companies);(2) A person who is or was in any of the last three business years an Executive at our Group’s principal
business partner (a company with which the annual amount of transaction (the amount of products andservices provided or procured) exceeds 2% of consolidated net sales of the Company or the partner or afinancial institution from which the amount of borrowing outstanding at the end of fiscal year exceeds 2%of the Company’s consolidated total asset) and its parent and subsidiary companies, and subsidiaries ofsuch parent company;(3) A consultant, or accounting or legal expert who has received in any of the last three business years cash
or other property exceeding 10 million yen from our Group other than the remuneration for a director or
officer (or a person who belongs to an organization if the said property has been received by a juridical
person, partnership or any other organization);(4) A person who belongs or belonged to an auditing firm that is an accounting auditor of the Company or its
consolidated subsidiary in any of the last three business years;(5) A major shareholder of the Company (shareholder holding 10% or more on a voting rights basis of theshares in the Company in its own or other's name) at the end of the most recent business year or its
Executive;(6) A spouse or relative within the second degree of kinship of a person who falls under any of the items (1)to (5) above provided that an Executive shall be in an “Important Position.” For the purpose of this item,a person is in an “Important Position" when the person is a director (excluding external director), executive
officer, officer, employee in senior management position of general manager or higher, or other person
who is objectively and reasonably judged to be in a position of equivalent importance; or(7) A person who is reasonably judged to be unable to perform his or her duties as an independent external
director due to a potential conflict of interest with shareholders.

End

13

1

Current State of the Corporate Group(1) Progress and Results of Operations
1) Group Overview
The Group is a science and technology-led company, specializing in drug discovery and earlystage drug development. Our mission is to make a significant contribution to improving the qualityof life and health of people around the world. Our vision is to become one of Japan’s global
biotechnology champions.
During the 12-month period ended December 31, 2020, the Group continued to leverage andadvance its proprietary StaR® (“stabilized receptor”) technology and Structure-based Drug Design(“SBDD”) platform.
We also continued to focus on expanding our drug discovery business and remain wellpositioned to capitalize on growth opportunities.
Our SBDD platform and highly productive drug discovery engine continues to generate multiple
new exciting drug candidates, and we will continue to take steps to increase partnered and coinvestment activity to ensure all programs are rapidly advanced in a capital efficient manner. At
the same time, we will invest in new technologies, tools and capabilities to maintain ourcompetitive edge and bring forward an exciting pipeline of next-generation programs in areas ofhigh unmet medical need.
Our business model is focused across three core areas to create value; (i) supporting ourexisting partnerships with major global pharmaceutical companies, (ii) advancing R&D with
innovative technology companies and venture funds, and (iii) signing new high-value partnerships
based on successful in-house drug discovery and early-stage development of new candidates.
As of December 31, 2020, the Group had over 20 programs in total ongoing in discovery, with
13 in preclinical development, and multiple in-house and partnered programs currently in clinical
trials.
Our existing partnerships with major pharmaceutical companies continue to progress very well.
During the year, the Group entered into new collaboration and license agreements with AbbVie
Inc., Biohaven Pharmaceutical Holding Company Ltd. and GlaxoSmithKline plc. The strategic
multi-target drug discovery collaboration with Pfizer Inc. nominated three new drug candidates toadvance into preclinical development in 2019, with two of these drug candidates subsequently
entering Phase 1 clinical trials by year end. Notable commercial milestones were also reachedwith Enerzair® Breezhaler® with Novartis International AG (“Novartis“) succeeding in gaining its
marketing approval in the European Union, Japan and other countries.
In the area of collaborations with innovative technology companies and venture funds, the Group
continued to make significant progress. The Group solved the structure of the agonist boundorexin OX2 receptor and identified the small molecule binding site in the orexin program, which
is being co-developed in conjunction with its spin-off companies Orexia Limited and Inexia Limited.
In addition, the Group and Aditum Bio Fund 1, L.P. created a new company – Tempero Bio Inc. –to advance the clinical development of our mGlu5 NAM program in neurological diseases. In linewith our commitment to future-proof and enhance our drug discovery capabilities and expand
beyond our traditional focus in GPCRs, the Group recently entered into a strategic technology
collaboration with Captor Therapeutics SA focused on the discovery and development of novel
small molecules that target the degradation of disease-associated GPCRs.
In the area of in-house drug discovery and early-stage development of new candidates for futurehigh-value partnerships, the Group continued to make the necessary investments in its pipeline,
to advance multiple discovery candidates through and into early-stage development. During the
12-month period ended December 31, 2020, the Group nominated preclinical candidates for our14

H4 antagonist, EP4 antagonist and GPR35 agonist programs.
In addition, in order to fulfill our social investment responsibilities as a drug discovery company
against the background of the global COVID-19 pandemic, the Group progressed its R&D
program focused on the design and development of potential novel drugs against SARS-CoV-2
coronavirus. This program, which is also working on drugs against predicted future variants of thevirus, has successfully identified a potent, broad spectrum anti-viral small molecule for further
development.
We will continue to promote growth in our platform technology, discovery and early-stage
development businesses. We are making investments to enhance our capabilities in drug
discovery and early-stage development, and to drive further improvements to our industry-leading
rates of productivity. These investments will support growth across the business, as we focus on
executing on existing partnered projects, as well as forming new high-value collaborations withworld-leading partners. At the same time, we will continue to rigorously manage costs and remain
flexible to all value-creating opportunities.
Financial results for the year ended December 31, 2020 were revenue of 8,842 million yen (anincrease of 884 million yen vs. the prior year), operating profit of 928 million yen (an increase of
544 million yen vs. the prior year) and net profit of 1,479 million yen (an increase of 47 million yen
vs. the prior year).
The 30th Term
January 1, 2019 December 31, 2019

The 31st Term
January 1, 2020 December 31, 2020

Value

Value

Value

Rate of change

vs. the prior year

Revenue(JPY
millions)

9,726

8,842

(884)

(9.1)%

Operating profit(loss)(JPY
millions)

384

928

544

141.7%Net profit (loss)(JPY
millions)

1,432

1,479

47

3.3%

Net earnings(loss) per share basic

(Yen)

18.70

18.77

0.07

0.4%

The principal management indicators are as follows.
Revenue
Revenue in the year under review totaled JPY 8,842 million (an increase of JPY 884 million vs.
the prior year).
Revenue related to milestone income and upfront fees in the year under review totaled JPY
5,353 million (a decrease of JPY 660 million vs. the prior year). Milestone revenues and upfront
fees can vary considerably year on year and depend on the achievement of defined milestone
events and the commencement of new partnership agreements within that year. Whilst four new
out-licensing agreements were signed in 2020 vs. three in 2019, milestone receipts in 2019 fromexisting collaborations were larger, resulting in an overall drop in revenue. 2019 revenue included
several major milestones, including a US$15m milestone receipt from AstraZeneca UK Limited.
The Group classifies a “major” milestone payment as any single payment greater than or equal
to approximately USD 5 million.

15

Revenue related to royalties in the year under review totaled JPY 2,544 million (an increase of
JPY 138 million vs. the prior year). The majority of the Group’s royalty revenue relates to sales of
Ultibro® Breezhaler® and Seebri® Breezhaler® by Novartis. Royalty income relating to Enerzair®
sales by Novartis commenced in the third quarter of 2020 following the grant of marketing
approvals in Japan and the EU.
(Note) Glycopyrronium bromide and certain use and formulation intellectual property were
exclusively licensed to Novartis in April 2005 by Sosei and Vectura. Seebri®, Ultibro®,
Enerzair® and Breezhaler® are registered trademarks of Novartis AG.
Cash cost of sales
Cost of sales in the year under review totaled JPY 607 million (a decrease of JPY 200 million vs.
the prior year). This is primarily related to the decrease in the costs directly associated withORAVI® product supply. Otherwise, cost of sales comprises the fully loaded cost of those
employees providing research and development services to specific customers under contracts(including other costs directly associated with these activities such as lab consumables and an
allocated share of depreciation of lab equipment).
Cash research and development expenses
Cash research and development (“R&D”) expenses in the year under review totaled JPY 3,411
million yen (a decrease of JPY 526 million vs. the prior year). The decrease in R&D spend
primarily related to a reduction in project activity due to COVID-19, as well as the successful
recovery of excess costs incorrectly charged by one supplier. In the period under review, 96% of
R&D spend related to our UK operations.
Cash general and administrative expenses
Cash general and administrative (“G&A”) expenses in the year under review totaled JPY 1,995
million (a decrease of JPY 169 million vs. the prior year). The decrease in G&A spend primarily
related to a reduction in our UK National Insurance liability linked to share based payments as aresult of the reduction in our share price over the period.
Non-cash expenses
Non-cash expenses primarily consist of depreciation on property, plant and equipment,
amortization of intangible assets, stock-based compensation expense and impairment loss. Noncash expenses in the year under review were JPY 1,976 million (a decrease of JPY 486 million
vs. the prior year). In total, depreciation amounted to JPY 507 million (an increase of JPY 51
million vs. the prior year). Amortization for the year under review totaled JPY 843 million (adecrease of JPY 166 million vs. the prior year). Stock-based compensation expense for the year
was JPY 626 million (an increase of JPY 242 million vs. the prior year). The increase in stockbased compensation expense reflects the issuance of new Restricted Stock Units in April 2020.
Impairment loss in the prior year was JPY 613 million. This was due to an intangible asset
impairment charge associated with a reduction in Oravi® sales and profitability forecasts.

16

Operating profit
Operating profit in the year under review totaled JPY 928 million (an increase of JPY 544 million
vs. the year). Whilst there has been a reduction in revenue year on year, the reduction in costs
has been greater leading to an increase in operating profit.
Net finance income (costs)
Net finance income in the year under review totaled JPY 1,050 million (an increase of JPY 719
million vs. the prior year). The increase in finance income is primarily due to the inclusion of larger
contingent consideration credits in the current year.
Net profit
Net profit in the year under review totaled JPY 1,479 million (an increase of JPY 47 million vs.
the prior year). The main factors driving this increase are explained above.
2) Capital Expenditures
There were no significant capital expenditures during this fiscal year.
3) Significant Organizational Restructuring, etc.
On June 19, 2020 the group has disposed the Group’s shareholding in Sosei CVC Ltd., andit has excluded from the scope of consolidation.
4) Financing
The Company raised JPY 5,055 million by issuing a New Shares through an International
Offering and JPY 16,000 million by issuing Euro-yen Denominated Convertible Bonds due
2025 on July 16, 2020 and entered into a (JPY 5,000 million) commitment line contract with
Mizuho Bank and 3 other financial institutions in order to finance working capital more
efficiently.

17

(2) Assets and Profit/Loss in the previous three fiscal years
Item
Revenue
Operating proft or(loss)Net profit or(loss)Net earnings or(loss) per share basic
Total assets
Total equity(JPY
millions)(JPY
millions)(JPY
millions)
(Yen)
(JPY
millions)(JPY
millions)

The 31st Term(current term)
As of December
31, 2020

The 28th Term
As of March 31,
2018

The 29th Term
As of December
31, 2018

The 30th Term
As of December
31, 2019

6,955

2,872

9,726

8,842

(2,291)(5,734)384

928(2,654)(5,978)

1,432

1,479

(37.55)(78.40)

18.70

18.77

69,48658,98756,68076,46548,886

41,58045,07852,381th(Notes)1. The Company changed the end of the fiscal year from March 31 to December 31 at the 28 ordinary general
meeting of shareholders and it will continue to have a December fiscal year end. The 29th term is a nine-monthirregular term.
2. Effective July 1, 2018, the Company executed a stock split at a ratio of 4 shares per common share. Earnings
per share have been calculated as if the stock split had occurred at the beginning of the 27th consolidated fiscal
year.

(3) Issues to be addressed
1) Business advancement and strategy
The Group is focused on expanding its leadership position in its chosen technologies and
SBDD platform, to drive novel drug discovery and early-stage development against diseases
with high unmet medical need – its core competencies.
The Group has a clear strategic focus on out licensing and co-investing with partners on
programs that emerge from its drug discovery and early-stage development activities; theGroup also engages in selected in-house discovery and early-stage development in order tosustainably initiate new out license and co-investment partnerships in the future. Late-stage
clinical development programs are currently only undertaken if a partner funds the development
costs and bears the risk.
The Group will continue to invest in its technologies, platform and capabilities to maintain its
leading position as a drug discovery and early-stage development business. Strategic
objectives of the Group are as follows: Maintain technology and platform leadership in our chosen field, and take steps to expand
into new drug target classes
 Enter into new high-value discovery and/or early-stage development partnerships withpharma/biotech
 Achieve important milestones on existing partnered programs Seed multiple new in-house novel discovery candidates for potential future partnering Advance selected in-house programs in early-stage clinical studies Create new long-term co-investment companies majority funded by venture partners
 Seek out revenue-generating opportunities, including via acquisition, that will support the planfor corporate value creation and expansion

182) Risk recognition
The Group is exposed to a range of risks consistent with the industry in which it operates. The
business, financial condition and results of the Group may be adversely impacted by any ofthese risks. In 2020, the Group established a new Enterprise Risk Management Program tobetter monitor and mitigate business specific risks in both Japan and the United Kingdom. The
Group has summarized its most important risks into the following categories: industry;
commercial; strategic; financial; legal and compliance; and takes necessary measures to deal
with these risks.
INDUSTRY RISKS
Risks inherent to drug discovery and early-stage development
The Group’s business strategy is focused on drug discovery and early-stage development.
The Group has established an unrivalled platform of technologies and tools, as well as skillful
employees to seamlessly manage its discovery and early-stage development capabilities. We
work closely with our partners to ensure success on all high-value partnered programs andlong-term ventures. However, there are increasing challenges for the industry which generally
include productivity, complexity and cost of research and development, innovative
developments, changing relationships due to rapid consolidation in the industry, patent
expirations, and regulatory changes. Large pharma and biotech companies regularly re-assess
their business strategies to remain competitive in the industry. Drug discovery and early-stage
development always carries inherent risk. There is no guarantee that the Group, together with
its partners will successfully develop and commercialize potential drugs. It is possible economic
returns may not be achieved, or an impairment to the carrying value of the Group’s intangible
assets may be required and that may impact the Group’s statement of financial performanceand financial position. It is also possible that the Group could be responsible for liabilities
resulting from its research, discovery or early-stage development activities, and therefore theGroup is covered by liability insurance to help mitigate these risks.
COMMERCIAL RISKSThe Group continues to be engaged in multiple active drug discovery and early-stage
development programs that it intends to license to large pharma or biotech for clinicaldevelopment and commercialisation, however the Group may not be able to achieve this goal.
Additionally, the commercial environment for licensing might change during the lifetime ofindividual projects. The actual timing and commercial values of individual projects, or thefinancial proceeds from licensed partnering programs can change significantly from initial
estimates.
The Group’s reliance on partners is subject to additional risks. For example, the Group’s
partners may not devote sufficient time and resources to the Group’s future products or may
not pursue further development and commercialisation of the products resulting from thepartnership. We mitigate both of these risks by ensuring we have a diverse balance of partner
types across the drug discovery and development continuum.
STRATEGIC RISKS
Execution of business strategy
The Group continues to focus its in-house activities on leveraging its platform to create drugcandidates, adding to its broad pipeline with the aim to achieve important value inflection points
that will enable new out-licensing and co-investment agreements. It is possible thatinvestments might be allocated to the development of unsuccessful drug candidates, or failed

19technologies.
Risks from investment strategy
In the past, the Group has made equity investments in companies with highly promising yet
unproven technologies. These investments may enable the Group to accelerate its businessmodel as they provide a beneficial risk-reward profile through to a significant value inflection.
However, unproven technologies also carry the risk of failure which may lead to impairment of
the intangible asset which may impact the Group’s statement of financial performance andfinancial position. To mitigate this risk, the Group, in 2020, established a new Investment
Committee that is responsible for conducting diligence and making recommendations to theGroup’s Board of Directors, who are in turn responsible for approving strategic investments.
The Group’s approach to investments is to balance risk and reward appropriately, ensuringexcessive capital is not put at risk.
FINANCIAL RISKSThe Group’s financial risk management focuses on liquidity and currency risks.
Liquidity risks
Revenue timing, external events and changes in the business environment might negatively
impact the Group’s profitability and cash. The Group is currently well-financed and able to deal
with these risks. To mitigate this risk, the Group regularly reviews options for capital increases
and for the use of other refinancing tools and in 2019 the Group fully repaid its long-term debt
and established a new commitment line to enhance liquidity.
Currency risks
The Group is impacted by fluctuations in foreign exchange rates mainly between theJapanese Yen, Pound Sterling and US dollar. The Group mitigates this exposure via closemonitoring to manage the Group’s current and upcoming currency requirements which isintended to reduce the exchange rate risks in the future.
LEGAL & COMPLIANCE RISKSThe Group operates in a global industry where legal compliance, contractual agreements andintellectual property rights are crucially important. Moreover, there is a trend towards greater
regulatory compliance in the pharma industry. The Group ensures regulatory as well as internal
compliance and employees are obliged to immediately report any incidents they suspect of
having breached regulatory or compliance rules to their manager or to the Group’s Chief
Compliance Officer.
3) Value creation
The pharmaceutical industry is undergoing rapid change due to numerous pressures facedby large companies, such as patent expiries, higher burden of approval and ever-increasing
costs. This has led to a reduction in the number of research-based businesses taking the full
financial and commercial risk of drug development.
New strategies across the industry are focused on securing external innovation in an efficientway. Furthermore, ageing populations in many developed countries are driving the need for
differentiated and better treatments. As a result, large pharma and biotech companies are
increasingly seeking innovative solutions to their R&D challenges, and therefore increasingly
executing collaborations across research, discovery and development activities with mid--sized
science and technology-led companies. The Group is positioned to take advantage of this20

growth trend. The Group regularly identifies and evaluates opportunities for businessexpansion and value creation and is pursuing a capital efficient business model that willsustainably create new commercial opportunities in an evolving industry landscape.
4) Corporate Governance
The Group has business activities in multiple jurisdictions and takes corporate governancevery seriously. The Group is continuously evaluating ways to enhance its systems andprocesses, to ensure it strictly complies with all national regulations. Furthermore, the Groupwill continue to promote a corporate culture that is committed to the highest standards ofopenness, integrity and accountability.
The Group’s Board of Directors is responsible for overseeing management and conducting
risk management and compliance activities to maintain standards and accountability and amajority of members are independent external directors. Executive Officers work closely with
the Board of Directors to achieve long-term and sustainable growth for the Company and tocreate shareholder value. They agree on the Company’s strategy and on business transactions
that are significant.

21

(4) Main Business Activities (as of December 31, 2020)
The Group’s main business is the research, development and sale of pharmaceutical products.
The Group companies are engaged in the following business activities.
Company Name
Sosei Group Corporation

Business Description
Responsible for setting the strategy of Sosei Group, andperforming centralized administrative activities on behalf ofgroup companies

Sosei Co. Ltd.

Research and development, sales of pharmaceutical drugs

Heptares Therapeutics Ltd.

Structural analysis of GPCRs, generation of initial leadcompounds, discovery of drug candidates through proprietary
StaR® technology(Note)On June 19, 2020 the group has disposed the Group’s shareholding in Sosei CVC Ltd., and it has excluded
from the scope of consolidation. In addition, the disposal of shares has excluded Sosei RMF1 Limited Partnership,
which Sosei CVC Ltd., controls as a general partners, from the scope of consolidation.

22

(5) Principal Parent Company and Subsidiaries(as of December 31, 2020)

1) Parent company
Not applicable.

2) Subsidiaries
CapitalRatio of
Voting

Sosei Co. Ltd.

¥90 million

100.0%

Heptares Therapeutics Ltd.

GBP 416
thousand

100.0%

Company Name

(Note)Key BusinessResearch and development, sales ofpharmaceutical drugs
Structural analysis of GPCRs,
generation of initial lead compounds,
discovery of drug candidates throughproprietary StaR® technology

On June 19, 2020 the group has disposed the Group’s shareholding in Sosei CVC Ltd., and it has excluded
from the scope of consolidation.

3) Other significant information
Not applicable.

(6) Main Offices and Factories(as of December 31, 2020)

1) Main Sites of the Company
OfficeLocation

Head Office

Chiyoda-ku, Tokyo

London OfficeLondon, UK

2) Main Sites of Subsidiaries
OfficeLocation

Sosei Co. Ltd.

Chiyoda-ku, Tokyo

Heptares Therapeutics Ltd.

Cambridge, UK(Note)On June 19, 2020 the group has disposed the Group’s shareholding in Sosei CVC Ltd., and it has excluded
from the scope of consolidation.

23

(7) Employee Information (as of December 31, 2020)
1) Group Employees
Business Segment

Number of Employees

Change from the End of thePrevious Fiscal Year

Pharmaceutical business

167

(9.4)

+23

Group administration

23

(2.7)

+4

190

(12.1)+27

Total(Note) 1. The number of employees is the number of people employed full-time and does not include the number of
temporary employees, which is listed in parentheses as the average for the year.
2. Pharmaceuticals business has increased by 23 compared with the end of the previous year, mainly due to thestrengthening of the research and development department.
3. Group administration has increased by 4 compared with the end of the previous year, mainly due to thestrengthening of the organisation.

2) Company Employees
Number of Employees

Change from the End of
the Previous Fiscal Year23 (2.7)+4

Average Age

Average Service Years

45.6 years old

2.4 years(Note) The number of employees is the number of people employed full-time and does not include the number of
temporary employees, which is listed in parentheses as the average for the year.

(8) Principal Lenders(as of December 31, 2020)

Not applicable.
The Company has entered into a (JPY 5,000 million) commitment line contract with Mizuho Bank, Ltd.
and 3 other financial institutions in order to finance working capital more efficiently. The Company had nooutstanding borrowings related to the commitment line contract at the end of this fiscal year.

(9) Other Significant Matters on the Current Status of the GroupNot applicable.

24

2Current Status of the Company(1) State of Shares(as of December 31, 2020)

1) Total number of authorized shares

149,376,000 shares2) Total number of outstanding shares

80,596,128 shares(Notes)1. The number of outstanding shares increased by 3,301,400 shares to issue
new shares through International Offering.
2. The number of outstanding shares increased by 149,200 shares to execize
stock acquisition right.
3. The number of outstanding shares increased by 72,392 shares to issue newshares by a post-hoc granted stock-based compensation (RSU) plan.

3) Number of shares constituting one unit

100 shares

4) Number of shareholders

30,2915) Major shareholders (Top 10)
Shareholdings(shares)

Ownership Stake

Daisuke Gomi

6,350,000

7.88%

Custody Bank of Japan, Ltd. (trust account 9)

4,029,200

5.00%

TAIYO FUND, L.P.

3,580,100

4.44%

TAIYO HANEI FUND, L.P.

2,029,900

2.52%

Pfizer Japan Inc.

1,885,136

2.34%

STATE STREET BANK AND TRUST COMPANY 505103

1,427,884

1.77%

RBC IST 15 PCT LENDING ACCOUNT - CLIENT ACCOUNT

1,382,500

1.72%

The Master Trust Bank of Japan, Ltd. (trust account)

1,347,795

1.67%

STATE STREET BANK AND TRUST COMPANY 505227

1,339,500

1.66%

SSBTC CLIENT OMNIBUS ACCOUNT

1,325,812

1.65%

Shareholder’s Name

(Notes) 1. Ownership stakes have been rounded off to two decimal places.
2. Ownership stakes are calculated deducting 213 treasury shares which the Company owns.

25

(2) Directors and executive officers(as of December 31, 2020)

1) Directors
Title

Name

Chairman of
the Board

ShinichiTamuraDirector

Tomohiro*
TohyamaDirector* Kuniaki Kaga

Director* David Roblin

Director* Noriaki Nagai

Director*

Rolf
Soderstrom

Responsibility
Chair of
Nomination
Committee;
Member ofCompensation
Committee
Chair of Audit
Committee;
Member ofCompensation
Committee
Member of
Nomination
Committee;
Member of
Audit
Committee
Chair ofCompensation
Committee;
Member of
Nomination
Committee

Significant Concurrent Posts–

Partner at TMI Associates
External Director and Audit and Supervisory
Committee Member of Nippon Shikizai, Inc.

–

Honorary Professor, Swansea University,
School of Medicine
Honorary Professor of Translational Medicine,
St George’s Hospital Medical School
Chairman of Scientific Translation, The Francis
Crick Institute
COO and CEO JuvRX, Juvenescence Ltd

Member of
Audit
Committee–

Member of
Audit
Committee;
Member ofCompensation
Committee

Senior Independent Director, Ergomed plc
Non Executive Director, BioPharma Credit plc(Notes) 1. The directors listed above with an asterisk (*) are external directors. The Company designates Director Julia
Gregory, Director Kuniaki Kaga, Director David Roblin, Director Noriaki Nagai and Director Rolf Soderstrom
as independent directors in accordance with the regulations of Tokyo Stock Exchange and has notified the
Exchange accordingly.
2. Noriaki Nagai has long-term experience at a major security company, being in charge of corporate planning
as an officer, and has considerable financial and accounting knowledge.
3. Rolf Soderstrom is a qualified UK accountant, has experience as a head of finance, and has considerable
financial and accounting knowledge.
4. The Audit Committee has conducted audits in close coordination with the internal audit department andemployees who assist in the performance of duties of the Committee, and believes it is not essential that afull-time committee member be selected. Accordingly, a full-time committee member has not been selected.
5. Mr. Kuniaki Kaga assumed the office of external director of SUSMED, Inc as of January 29, 2021.
6. The Company has no special relationships with the companies at which the external directors concurrently
serve the offices.

262) Executive officers
Title
Representative
Executive Officer
Executive Officer

*

Name

Responsibility

ShinichiTamuraChairman,President & CEO

Malcolm Weir

Executive Vice
Chairmant

Executive Officer

Chris Cargill

Executive Officer

Tim Tasker

Executive Officer

Kazuhiko
Yoshizumi

Executive Officer

Tadayoshi
Yasui

Executive Vice
President
Chief Financial
Officer (CFO)
Executive Vice
President
Chief Medical
Officer (CMO)
Executive Vice
PresidentGroup Chief
Compliance
Officer (GCCO)
Executive Vice
President

Significant Concurrent Posts–

Director, Heptares Therapeutics Ltd.

Director, Heptares Therapeutics Ltd.

Director CMO, Heptares Therapeutics
Ltd.

–

Representative Director President, Sosei
Co. Ltd.

(Note) The executive officer listed above with an asterisk (*) serves concurrently as a director.

3) Summary of liability limitation agreements
In accordance with Article 427, Paragraph 1 of the Companies Act (the “Act”) and theprovisions of the Articles of Incorporation, the Company and external directors have enteredinto agreements that limit liability for damages as provided in Article 423, Paragraph 1 of theAct.
The limit on liability for damages applicable to each external director under the agreements isthe minimum amount of liability stipulated in Article 425, Paragraph 1 of the Act.

27

4) Principles on determining remuneration for individual directors and executive officers by
the Compensation Committee
i. Principles
Remuneration of directors and executive officers of the Company is determined in a fair andappropriate manner by the Compensation Committee, a majority of whose members are
external directors, and transparency is ensured under the chair, who is an external director.
It is the Company’s principle to determine the remuneration in order to attract and retain
talented people and to incentivize execution of business strategy for sustainable growth andraising the Company’s corporate value.
The individual remuneration of directors and executive officers is determined by theCompensation Committee. With respect to executive officers this is based on their individual
roles and evaluations made by the representative executive officer on their performance andother contributions to the Company in the previous fiscal year, and with respect to thedirectors and the representative executive officer, this is based on their individual roles andan evaluation of performance made by the Compensation Committee, considering
remuneration levels, etc. in relevant industries in the country where the recipients live andwork, with reference to data from outside research institutes.
ii. Director remuneration
For directors’ remuneration, base salary (annual pay) is determined by considering thesituation of other companies. Whilst Directors are not paid bonuses or other performancerelated remuneration or retirement allowances, stock options and a post-hoc granted stockbased compensation (RSU) plan are used to provide additional incentive to realize the visionand strategy of the Company as well as to share the benefits and risks of share pricefluctuations with shareholders, and actively contribute to an increase in share price andcorporate value.
Directors serving concurrently as executive officers are not paid remuneration as directors.
iii. Executive officer remuneration
For executive officers’ remuneration, base salary (annual pay) is determined based on
individual roles and the performance in the previous year. In addition, bonuses are paid
according to the level of achievement of objectives within their respective areas of
responsibilities through cash payments (using the amount of base salary (annual pay)
multiplied by a bonus percentage), stock options and a post-hoc granted stock-based
compensation (RSU) plan and a performance-linked stock-based compensation (PSU).
These provide an incentive to realize the vision and strategy of the Company, as well as toshare the benefits and risks of share price fluctuations with shareholders, and actively
contribute to an increase in share price and corporate value.

285) Total amount of remuneration paid to directors and executive officers
Item

Number of people eligible

Amount of remuneration

Directors(External directors)

6(6)¥143 million(¥143 million)

Executive officers

3¥453 million

Total

9

¥596million(Notes) 1. The table above includes one director (including one external director) who retired at the conclusion of the
30th Ordinary General Meeting of Shareholders held on 25 March 2020.
2. Payments made to the one director serving concurrently as executive officer are included in full in the columnof the amount paid to executive officers above.
3. The amount of remuneration shown above include the following:･Remuneration through a post-hoc granted stock-based compensation (RSU) plan and a performance-linked stock-based compensation (PSU) plan of ¥255 million to six directors and three executive officers･Bonuses of ¥131 million paid to the three executive officers in February 2021 in accordance with the resolutionof the Compensation Committee held in January 2021
4. The table above does not include the following:･Base salary of ¥107 million, bonuses of 48 million paid in February 2021 in accordance with the resolutionof the Remuneration Committee held in January 2021, a post-hoc granted stock-based compensation (RSU)
plan and a performance-linked stock-based compensation (PSU) plan of 97¥ million paid to four executive
officers borne by a subsidiary6) Attendance of external directors at meetings of the Board of Directors and Committees
during the fiscal year under review and the status of their remarks and activities
Name

Tomohiro
TohyamaKuniaki KagaDavid Roblin

Noriaki Nagai

Attendance
Board ofDirectors
meetings
Compensation
Committee
meetings
Audit
Committee
meetings
Board ofDirectors
meetings
Nomination
Committee
meetings
Audit
Committee
meetings
Board ofDirectors
Meetings
Nomination
Committee
meetings
Compensation
Committee
meetings
Board ofDirectors
Meetings

Remarks/Activities

26 out of 26(100%)
4 out of 4
(100%)
16 out of 16(100%)
26 out of 26(100%)
2 out of 2
(100%)
16 out of 16(100%)
22 out of 26(85%)
1 out of 2(50%)
2 out of 4(50%)
26 out of 26(100%)

29

Makes statements at the Board meetings asnecessary for deliberations on agenda items from a
professional viewpoint as an attorney, leads audits as
the chair of the Audit Committee, and asks questions
and gives opinions and other statements asappropriate at each Committee meeting.

Makes statements at the Board meetings asnecessary for deliberations on agenda items from a
professional viewpoint based on the experience ofmanagement of leading chemical and pharmaceuticalcompanies in Japan and asks questions and gives
opinions and other statements as appropriate at eachCommittee meeting.
Makes statements at the Board meetings asnecessary for deliberations on agenda items from a
professional viewpoint based on the clinicalexperience as a physician and R&D experience ofpharmaceutical companies, and asks questions andgives opinions and other statements as appropriate ateach Committee meeting.

Makes statements at the Board meetings asnecessary for deliberations on agenda items from a
professional viewpoint based on his legal knowledge

AuditCommittee
meetings

Rolf Soderstrom(Note)

Board ofDirectors
Meetings
Compensation
Committee
meetings
Audit
Committee
meetings

15 out of 16(94%)
19 out of 21(91%)
2 out of 3(67%)
10 out of 10(100%)and his career experience in important positions incorporate departments at major securities companies
and as a professor of law, and asks questions andgives opinions and other statements as appropriate ateach Committee meeting.
Makes statements at the Board meetings asnecessary for deliberations on agenda items from a
professional viewpoint based on his financial
knowledge and his career experience in the field offinance at companies in Europe, North America, Asia,etc., and provides opinions and other statements asappropriate at each Committee meeting.

Mr. Rolf Soderstrom was elected Director at the 30th Ordinary General Meeting of Shareholders held on
March 25, 2020 and was elected Member of the Compensation Committee and the Audit Committee at themeeting of the Board of Directors held on the same day. Accordingly, the numbers of meetings attended andpercentage of attendance at the meetings of the Board of Directors, the Compensation Committee and the
Audit Committee stated above only count meetings held since his assumption of the office.

30

(3) Independent Auditors
1) NameErnst & Young ShinNihon LLC

2) Amounts of remuneration, etc.
Ernst & Young
ShinNihon LLC
Amount of remuneration, etc. payable to the independent auditors for services
related to this fiscal period
Total amount of cash and other property benefits payable to the independent
auditors by the Company and its subsidiaries¥ 70 Million¥ 89 Million(Notes) 1. In the audit agreement between the Company and the Independent Auditors, there is no clear distinction
between the remuneration for audits based on the Companies Act and the remuneration for audits based on
the Financial Instruments and Exchange Act, and no distinction can be made in practice, so amounts ofremuneration, etc. for the Independent Auditors for this fiscal year are the total of these remunerations.
2. The Audit Committee has confirmed the audit plan of the independent auditors, the state of execution of duties
for accounting audits, and the basis of remuneration estimates, etc. and considered whether audit remunerationis adequate for the implementation of appropriate audits and as a result has found that remuneration isappropriate. Therefore, it has given consent to remuneration, etc. of the Independent Auditors in accordancewith Article 399, Paragraph 1 of the Companies Act.
3. One of the Company’s significant subsidiaries, Heptares Therapeutics Ltd. has been audited by an auditing
firm that belongs to a member firm of Ernst & Young LLC., Which is a member of our accounting auditor, andthe audit fee is JPY 31 million.
4. An additional 20 million yen of remuneration has been incurred for the services related to the previous
consolidated fiscal period.

3) Contents of non-audit services
The Company paid to Ernst & Young ShinNihon LLC fees for production of comfort letter in
relation to the issuance of new shares in the international offering which is a work other than
the work under Article 2, Paragraph 1 of the Certified Public Accountants Act.

4) Policy for dismissal or non-reappointment of the independent auditors
If circumstances arise that would interfere with the appropriate execution of the duties of the
independent auditors or cause the Audit Committee to deem it appropriate to dismiss or not toreappoint the independent auditors, the Audit Committee will make a proposal for dismissal or
non-reappointment of the independent auditors for submission to the Ordinary General Meetingof Shareholders. Also, when it deems that any cause stipulated in each item of Article 340,
Paragraph 1 of the Companies Act applies to the independent auditors, the Audit Committee
can dismiss the independent auditors by agreement of all committee members.

5) Summary of liability limitation agreements
The Company has not entered into an agreement with the Independent Auditors to limit their
liability for damages under Article 423, Paragraph 1 of the Companies Act.

(4) Policy on determination of Dividends, etc.
The declaration and payment of any dividends in the future will depend on the results ofoperations, financial conditions, cash requirements, future prospects, profits available for
distribution and other factors deemed by the Board to be relevant at the time.
At present, the Group is making prudent investments to build a globally competitive
biotechnology business and, therefore, does not expect to pay any dividends in the near to
medium term. The Board will continue to reassess this position based on the factors above.

31

Consolidated Balance Sheet(Millions of yen)Item

The 31st term
At December 31,2020

Item

The 31st term
At December 31,2020

Non-current assets

34,447

Non-current liabilities

21,099Property, plant andequipment

3,824

Deferred tax liabilities

2,457

Goodwill

14,134

Contingent consideration inbusiness combinations

1,107

Intangible assets

11,802

Corporate bonds

14,789Investments accounted forusing the equity method

3,087

Lease liabilities

1,664

Other financial assets

1,593

Other non-current liabilities

1,082

Current liabilities

2,985

Trade and other payables

1,508

Other non-current assets

7

Current assets

42,018

Income taxes payable

29

Trade receivables

939

Lease liabilities

170

Income taxes receivable

420

Other current liabilities

1,278

Other current assets

651
Total liabilities

24,084

Cash and cash equivalents

40,008EquityTotal assets

76,465

Note: Amounts less than 1 million yen have been rounded32

Capital stock

40,220Capital surplus

30,452

Treasury stock(0)

Retained earnings(10,785)

Other components of equity(7,506)Equity attributable toowners of the parent
company

52,381

Total equity

52,381

Total liabilities and equity

76,465

Consolidated Statement of Profit or loss andother Comprehensive Income(Millions of yen)

The 31st term
Fiscal year ended December 31, 2020

Item
Revenue

8,842

Cost of sales(761)

Gross Profit

8,081

Other income and expenses
Research and development expenses(3,793)

Selling, general and administrative expenses(3,435)

Other income

79

Other expenses(4)

Operating income(7,153)928

Finance income

1,628

Finance costs
Share of loss of associates accounted for using theequity method
Profit before income taxes

(578)

1,622

Income tax expense

(143)

(356)

Net profit for the year

1,479

Other comprehensive income
Items that will not be reclassified subsequently to profit or
loss
Financial assets measured at fair value through othercomprehensive loss
Items that may be reclassified subsequently to profit orloss
Exchange differences on translating foreign operations

(25)

(793)

Total comprehensive income for the year

(818)
661

Net profit for the year attributable to
Owners of the parent

1,479

Non-controlling interests(0)

Total comprehensive income for the year attributableto:Owners of the parent
Non-controlling interests

661
(0)

Note: Amounts less than 1 million yen have been rounded

33

1,479

661

Non-Consolidated Balance Sheet(Millions of yen)

Item
AssetsCurrent assets

The 31st term
At December 31, 2020

32,644

Cash and deposits

28,512

Prepaid expenses

28

Short-term loans
receivable fromaffiliated companies
Accounts receivablefrom affiliatedcompanies
OthersNon-current assets
Property, plant andequipment

3,997

Total assets

621
7
456
104
29
14

Provision for bonuses

11

Non-current liabilities

16,761

51
46,242

Corporate bonds
Lease liabilities
Asset retirement
obligation
Provision for stockbased compensation

16,36315

11

Total liabilities

17,38220
1
1
0

Net Assets
Shareholders’ equity
Capital stock
Capital surplus

60,83440,22028,337

46,176

Capital reserve

28,33745,972Retained earnings(7,723)

2,068

Other retained
earnings(7,723)

65
34

146

OthersAllowance for doubtful
debts

Liabilities
Current liabilities
Lease liabilities
Accounts payable
Accrued expenses
Income taxes payable
Deposit56

Buildings
Tools, furniture andfixtures
Leased assets
Intangible assets
Software
Other
Investments and othernon-current assets
Shares of subsidiaries
and associates
Long-term loans
receivable fromsubsidiaries andassociates
Investments in capital

Item

The 31st term
At December 31, 2020

Treasury stock
Subscription rights toshares

58

12
371

(0)
670

(2,068)

Total net assets

61,50478,886

Total liabilities and net
assets

78,886

Note: Amounts less than 1 million yen have been rounded34

Non-Consolidated Statement of Profit or Loss
(Millions of yen)

The 31st term
Fiscal period ended December 31,2020

Item
Operating profit

433

Operating expenses(916)

Operating loss

(483)

Non-operating profit
Interest income

93

Write-off of advance received by affiliated company

151

Miscellaneous income

0244

Non-operating expenses
Interest expenses(0)Commission fee(6)Bond issuance costs(498)

Share issuance costs(47)

Net foreign exchange loss

(271)

Provision of allowance for doubtful accounts foraffiliated companies(350)

Miscellaneous loss

(19)

Ordinary loss

(1,191)(1,430)Extraordinary profit
Gain on valuation of investments in capital

190

Gain on reversal of subscription rights to shares

5

195

Extraordinary loss
Loss on sale of shares of subsidiaries andassociates
Loss on valuation of shares of subsidiaries andassociates

(30)
(42)

Net loss before tax(72)(1,307)

Corporate tax, residential tax and enterprise tax
Net loss for the year

(1)

(1)
(1,308)

Note: Amounts less than 1 million yen have been rounded35

Accounting Audit Report on the Consolidated Financial Statements
Audit Report of the Independent Auditors
February 19, 2021
Sosei Group Corporation
To the Board of Directors
Ernst & Young ShinNihon LLC
Tokyo Office
Designated limited
Certified public
liability employee
accountant
Managing partner
Designated limited
liability employee
Certified public
accountant
Managing partner

Hironao Yazaki*

Hiroshi Mishima*

Audit Opinion:
In accordance with the Article 444 (4) of Companies Act, the Auditors have audited the consolidated
financial statements, which are the consolidated statements of financial position, consolidated
statements of comprehensive income, consolidated statements of change in equity, and notes on the
consolidated financial statements of Sosei Group Corporation for the consolidated fiscal period fromJanuary 1, 2020 to December 31, 2020.
The Auditors find that the aforementioned financial statements, which have been prepared excluding
some disclosure items required by International Financial Reporting Standards in accordance with thestipulations of the latter part of Paragraph 1, Article 120 of the Corporate Accounting Rules, appropriately
present on all major points the status of assets and income of the corporate group comprised of Sosei
Group Corporation and its consolidated subsidiaries for the period of the consolidated financial
statements.
Ground of the Opinion:
The Auditors performed the audit in conformance with generally accepted auditing standards inJapan. Responsibilities of the Auditors under audit standards are listed in " Auditor's Responsibility in an
Audit of Consolidated Financial Statements". The Auditors are, in accordance with the relevenat
regulations of professional ethics, independent from Sosei Group Corporation and its consolidated
subsidiaries, and perform the duty of ethics as an auditor. The Auditors believe that audit evidence has
been obtained on a sufficient and appropriate basis and which serves as the basis for expressing an
opinion.
Responsibility of Management and Audit Committee for the Cnsolidated Financial Statements:
Management is responsible for the preparation and appropriate presentation of the consolidated
financial statements in accordance with the stipulations of the latter part of Paragraph 1, Article 120 of
the Corporate Accounting Rules, which allows the statements to be prepared excluding some of thedisclosure items required under International Financial Reporting Standards. This responsibility includes
the design and operation of internal controls judged to be necessary by management for the preparation
and appropriate presentation of consolidated financial statements that are free of material misstatements
due to fraud or error.
In preparing the consolidated financial statements, management has to assess whether it isappropriate to prepare the consolidated financial statements on the going concern assumption, unlessmanagement intends to liquidate or cease operations, or has no realistic alternative but to do so, and incase of disclosing matters as to going concern in accordance with the latter part of Paragraph 1, Article
120 of the Ordinance on Accounting of Companies, which permits the preparation of consolidated
financial statements by omitting some of the disclosure items required under International Financial
Reporting Standards, management has to disclose such matters.
The responsibility of the Audit Committee is to monitor the execution of duties by the Executive Officers
and Directors in the development and operation of the financial reporting process.

36

Auditor's Responsibility in an Audit of Consolidated Financial Statements:
The auditor's responsibility is to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free of material misstatement due to fraud or error based on the audit
conducted by the Auditors, and to express an opinion on the consolidated financial statements from an
independent position in the auditor's report. A misstatement may occur due to fraud or error and isconsidered to be material if it is reasonably expected to affect the decisions of users of the consolidated
financial statements, either individually or in the aggregate.
The auditor performs the audit in accordance with auditing standards generally accepted in Japan,
and throughout the course of the audit, the auditor shall exercise professional judgment and maintainprofessional skepticism in performing the following:* Identify and assess the risks of material misstatement due to fraud or error. Also plan and perform
audit procedures that address the risks of material misstatement. Select and applly audit procedures atthe discretion of the auditor. In addition, obtain sufficient and appropriate audit evidence as a basis forexpressing an opinion.
* The purpose of an audit of consolidated financial statements is not to express an opinion on theeffectiveness of internal control. However, in making those risk assessments, the auditor considers
internal control relevant to the audit in order to design audit procedures that are appropriate in thecircumstances.
* Evaluate the appropriateness of accounting policies adopted by management and the method of
their application, as well as the reasonableness of accounting estimates made by management and therelevance of related notes.
* To conclude whether it is appropriate for management to prepare the consolidated financial
statements on the going concern basis and, based on the audit evidence obtained, whether there is any
material uncertainty regarding events or conditions that may cast significant doubt on the entity's ability
to continue as a going concern. If there is a material uncertainty about the entity's ability to continue asa going concern, the auditor is required to draw attention to the notes to the consolidated financial
statements in the auditor's report or, if the notes to the consolidated financial statements regarding thematerial uncertainty are not appropriate, to express an opinion with qualifications on the consolidated
financial statements. Although the auditor's conclusions are based on audit evidence obtained up to thedate of the auditor's report, it is possible that future events or circumstances may make it impossible forthe entity to continue as a going concern.
* Evaluate whether the presentation and notes to the consolidated financial statements comply withthe latter part of Paragraph 1, Article 120 of the Ordinance on Accounting of Companies, which permits
the preparation of consolidated financial statements by omitting some of the disclosure items requiredby International Financial Reporting Standards, as well as the presentation, organization and content of
the consolidated financial statements, including the related notes, and whether the consolidated financial
statements present fairly the underlying transactions and accounting events.
* Obtain sufficient appropriate audit evidence regarding the financial information of the Company andits consolidated subsidiaries in order to express an opinion on the consolidated financial statements. The
auditor is responsible for the direction, supervision and implementation of the audit of the consolidated
financial statements. The auditor is solely responsible for the audit opinion.
The auditor shall report to the Audit Committee on the scope of the planned audit and the timing of theplanned audit, significant findings of the audit, including significant deficiencies in internal control
identified in the course of the audit, and other matters required by auditing standards.
The auditor shall report to the Audit Committee on the auditor's compliance with the Japanese rules ofprofessional ethics regarding independence, as well as any matters that could reasonably be considered
to affect the auditor's independence and any safeguards in place to remove or mitigate any disincentive.
Interest Relationships:
There are no interest relationships that must be disclosed under the provisions of the Certified Public
Accountants Act between the Company or its consolidated subsidiaries and the Auditors or the managing
partners.

37

Accounting Audit Report on the Financial Statements
Audit Report of the Independent Auditors
February 19, 2021
Sosei Group Corporation
To the Board of Directors
Ernst & Young ShinNihon LLC
Tokyo Office
Designated limited liability employee
Managing partner
Designated limited liability employee
Managing partner

Certified public
accountant
Certified public
accountant

Hironao Yazaki*

Hiroshi Mishima*

Audit Opinion:
In accordance with the Article 436 (2) (i) of Companies Act, the Auditors have audited the financial
statements, which consist of the balance sheet, income statement, statement of changes inshareholders’ equity and notes to the non-consolidated financial statements, and the supplementaryschedules of Sosei Group Corporation ("Financial Statements") for the 31st fiscal period from January
1, 2020 to December 31, 2020.
The Auditors find that the aforementioned Financial Statements appropriately present on all major
points the status of assets and income for the period of the Financial Statements in conformance withcorporate accounting standards generally accepted in Japan.
Ground of the Opinion:
The Auditors performed the audit in conformance with generally accepted auditing standards inJapan. Responsibilities of the Auditors under audit standards are listed in " Auditor's Responsibility in an
Audit of Financial Statements". The Auditors are, in accordance with the relevenat regulations ofprofessional ethics, independent from Sosei Group Corporation, and perform the duty of ethics as anauditor. The Auditors believe that audit evidence has been obtained on a sufficient and appropriate basis
and which serves as the basis for expressing an opinion.
Responsibility of Management and Audit Committee for the Financial Statements:
Management is responsible for the preparation and appropriate presentation of the Financial
Statements in conformance with generally accepted auditing standards in Japan. This responsibility
includes the design and operation of internal controls judged to be necessary by management for the
preparation and appropriate presentation of Financial Statements that are free of material misstatements
due to fraud or error.
In preparing the Financial Statements, management has to assess whether it is appropriate to prepare
the Financial Statements on the going concern assumption, and is responsible for disclosing, whenrequired, matters related to going concern in accordance with accounting principles generally acceptedin Japan.
The responsibility of the Audit Committee is to monitor the execution of duties by the Executive Officers
and Directors in the development and operation of the financial reporting process.
Auditor's Responsibility in an Audit of Financial Statements:
The auditor's responsibility is to obtain reasonable assurance about whether the Financial Statements
as a whole are free of material misstatement due to fraud or error based on the audit conducted by the
Auditors, and to express an opinion on the Financial tatements from an independent position in theauditor's report. A misstatement may occur due to fraud or error and is considered to be material if it isreasonably expected to affect the decisions of users of the Financial Statements, either individually or in
the aggregate.
The auditor performs the audit in accordance with auditing standards generally accepted in Japan, andthroughout the course of the audit, the auditor shall exercise professional judgment and maintainprofessional skepticism in performing the following:* Identify and assess the risks of material misstatement due to fraud or error. Also plan and perform
audit procedures that address the risks of material misstatement. Select and applly audit procedures atthe discretion of the auditor. In addition, obtain sufficient and appropriate audit evidence as a basis forexpressing an opinion.
* The purpose of an audit of Financial Statements is not to express an opinion on the effectiveness of38

internal control. However, in making those risk assessments, the auditor considers internal control
relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
* Evaluate the appropriateness of accounting policies adopted by management and the method of
their application, as well as the reasonableness of accounting estimates made by management and therelevance of related notes.
* To conclude whether it is appropriate for management to prepare the Financial Statements on thegoing concern basis and, based on the audit evidence obtained, whether there is any material uncertainty
regarding events or conditions that may cast significant doubt on the entity's ability to continue as a going
concern. If there is a material uncertainty about the entity's ability to continue as a going concern, theauditor is required to draw attention to the notes to the Financial Statements in the auditor's report or, if
the notes to the Financial Statements regarding the material uncertainty are not appropriate, to express
an opinion with qualifications on the Financial Statements. Although the auditor's conclusions are basedon audit evidence obtained up to the date of the auditor's report, it is possible that future events orcircumstances may make it impossible for the entity to continue as a going concern.
* Evaluate whether the presentation and notes to the Financial Statements are in conformance withcorporate accounting standards generally accepted in Japan, as well as the presentation, organizationand content of the Financial Statements, including the related notes, and whether the Financial
Statements present fairly the underlying transactions and accounting events.
The auditor is responsible for providing direction, supervision and performance of the audit of the
Financial Statements. The auditor is solely responsible for the audit opinion. The auditor shall report to
the Audit Committee on the scope of the planned audit and the timing of the planned audit, significant
findings of the audit, including significant deficiencies in internal control identified in the course of theaudit, and other matters required by auditing standards.
The auditor shall report to the Audit Committee on the auditor's compliance with the Japanese rules ofprofessional ethics regarding independence, as well as any matters that could reasonably be considered
to affect the auditor's independence and any safeguards in place to remove or mitigate any disincentive.
Interest Relationships:
There are no interest relationships that must be disclosed under the provisions of the Certified Public
Accountants Act between the Company and the Auditors or the managing partners.

39

Audit Report of the Audit Committee
Audit Report
The Audit Committee of Sosei Group Corporation (the “Company”) has audited the performance of duties bydirectors and executive officers for the 30th fiscal period from January 1, 2020 to December 31, 2020. The
methods and findings are reported as follows.
1. Methods and Content of the Audit
The Audit Committee received reports from directors, executive officers and employees, etc. on a regular basisof the content of resolutions of the Board of Directors related to items provided in Article 416, Paragraph 1, Item
1 (b) and (e) of the Companies Act and of the structures and operation of the systems established in accordancewith the resolutions (internal control systems), requested explanations and expressed opinions as necessary,and conducted an audit as follows.
1) In accordance with the audit policy and the division of responsibilities, etc. determined by the Audit Committee,
each member of the Committee attended meetings of the Board of Directors and other important meetings,
received reports from directors, executive officers and others on the performance of their duties, etc., andrequested additional explanations as necessary, and reviewed the documents relating to the important
decisions, and investigated the state of the business and assets of the Company in cooperation with theInternal Audit Department. Regarding subsidiaries, the Audit Committee sought to achieve a mutual
understanding of subsidiaries, exchanged information with the directors and corporate auditors, etc. of
subsidiaries and received business reports from subsidiaries as necessary.
2) The Audit Committee monitored and verified whether the Independent Auditors maintained independence andconducted appropriate audits, received reports from the Independent Auditors on the performance of theirduties, etc., and requested explanations as necessary. Also, the Audit Committee received notification fromthe Independent Auditors that they had established the “Structure for Ensuring Appropriate Operation” (mattersprovided in each item of Article 131 of the Regulation on Accounting of Companies) in accordance with the“Quality Control Standards for Audits” (Business Accounting Council, October 28, 2005).
Based on the aforementioned methods, the Audit Committee examined the business report andsupplementary schedules thereof, non-consolidated financial statements (non-consolidated balance sheet, nonconsolidated statement of profit or loss, non-consolidated statement of changes in equity and notes thereto) andsupplementary schedules thereof, and consolidated financial statements (consolidated balance sheet,consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes inequity, and notes thereto) for the fiscal period under review.
2. Results of Audit(1) Results of audit of business report, etc.
1) The Committee found that the business report and supplementary schedules accurately present the statusof the Company in accordance with laws, regulations and the Articles of Incorporation.
2) The Committee did not find any inappropriate conduct related to the execution of duties by directors or
executive officers or any material facts indicating violation of laws and regulations or the Articles ofIncorporation.
3) The Committee found that the contents of resolutions of the Board of Directors related to the system ofinternal control to be appropriate. In addition, the Committee did not find any matter requiring it to commenton the contents of the business report or execution of duties by directors or executive officers regarding thesystem of internal control.
(2) Results of audit of non-consolidated financial statements and supplementary schedules
The Committee found that the methods and results of the audit performed by the Independent Auditors, Ernst& Young ShinNihon LLC were appropriate.
(3) Results of audit of consolidated financial statements
The Committee found that the methods and results of the audit performed by the Independent Auditors, Ernst& Young ShinNihon LLC were appropriate.
February 19, 2021
Sosei Group Corporation Audit Committee
Chair of Audit
Tomohiro Tohyama*
Committee
Member of Audit
Kuniaki Kaga*
Committee
Member of Audit Noriaki Nagai*
Committee
Member of Audit Rolf Soderstrom
Committee
Note: All members of the Audit Committee are external directors as stipulated in Article 2, Item 15 and Article 400,
Paragraph 3 of the Companies Act.

40

Access to Meeting of Shareholders Venue
Shareholders are asked to consider forgoing attending the General meeting of

Shareholders and at the same time, exercise voting rights in advance as much as
possible, either by returning the voting form by post or voting on the internet.

Venue

Fuji-No-Ma Hall, 4th Floor, Hotel Grand Arc Hanzomon
1-1, Hayabusa-cho, Chiyoda-ku, Tokyo, Japan
TEL: 03-3288-0111

Access2-min. walk from Hanzomon Station (Exit 1) and3-min. walk from Hanzomon Station (Exit 6) on Hanzomon Line
8-min. walk from Kojimachi Station (Exit 1) on Yurakucho Line* We kindly ask you to refrain from coming by car since parking lots are not available.

41