Note: This document has been translated from the Japanese original for reference purposes only. In the event of any
discrepancy between this translated document and the Japanese original, the original shall prevail.

[Cover][Document title][Clause of stipulation][Place of filing][Filing date][Fiscal year][Company name][Company name in English][Title and name of representative][Address of registered headquarters][Telephone number][Name of contact person][Nearest place of contact][Telephone number][Name of contact person][Place for public inspection]

Annual Securities Report
Article 24, paragraph 1 of the Financial Instruments andExchange Act
Director-General of the Kanto Local Finance Bureau
June 29, 2024
22nd term (from April 1, 2023 to March 31, 2024)
Takara Bio Inc.
Takara Bio Inc.
Koichi Nakao, President and CEO
7-4-38, Nojihigashi, Kusatsu-shi, Shiga+81-77-565-6978
Takuya Kakemi, Executive Officer, in charge of PR & IR
Department
7-4-38, Nojihigashi, Kusatsu-shi, Shiga+81-77-565-6978
Takuya Kakemi, Executive Officer, in charge of PR & IR
Department
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)-1-

Part I.

Company information

I. Overview of the Company
1. Trends in selected financial data
(1) Summary of consolidated financial dataTerm

18th Term

19th Term

20th Term

21st Term

22nd Term

Fiscal year-end

March 2020

March 2021

March 2022

March 2023

March 2024

Net sales(Millionsof yen)34,56546,086

67,69978,14243,505

Ordinary profit(Millionsof yen)

6,347

14,15928,45920,682

3,405

Profit attributable to ownersof parent(Millionsof yen)

3,819

9,547

19,84916,012

1,480

Comprehensive income(Millionsof yen)

3,216

8,674

23,68920,363

4,387

Net assets(Millionsof yen)66,591

74,302

96,064112,454

111,784

Total assets(Millionsof yen)75,00989,750115,712129,202121,252

Net assets per share(Yen)

552.23616.05796.18931.93926.00Earnings per share

(Yen)

31.72

79.29

164.84132.97

12.30

Diluted earnings per share

(Yen)

–

–

–

–

–

Shareholders’ equity ratio

(%)

88.7

82.7

82.9

86.9

92.0

Return on equity (ROE)

(%)

5.85

13.57

23.35

15.39

1.32

Price-earnings ratio (PER)(Multiple)

70.33

37.43

13.59

13.03

78.87

Net cash from (used in)operating activities(Millionsof yen)6,339

13,943

6,985

36,897

1,711

Net cash from (used in)investing activities(Millionsof yen)(212)(3,778)(7,071)(6,693)(13,043)

Net cash from (used in)financing activities(Millionsof yen)(946)(1,103)(2,070)(4,119)(5,233)

Cash and cash equivalents at
end of period(Millionsof yen)14,462

23,30822,16049,05833,171

Number of employees(Persons)

1,485

1,539

1,666

1,793

1,838

Notes: 1. The Group aims to secure a competitive advantage by focusing on the Reagents and Instruments business and the CDMO(Contract Development and Manufacturing Organization) business to support the development and manufacture of
regenerative medicine/gene and cell therapy, etc. For this reason, a large amount of research and development investment
has been made in relation to net sales. The percentages of research and development expenses in relation to net sales for the
18th through 22nd terms are 11.2%, 12.0%, 9.0%, 11.0% and 19.1%.
2. Information on diluted earnings per share is omitted owing to an absence of dilutive shares.

-2-

(2) Financial data on the reporting company
Term

18th Term

19th Term

20th Term

21st Term

22nd Term

Fiscal year-end

March 2020

March 2021

March 2022

March 2023

March 2024

Net sales(Millionsof yen)21,98433,88550,39857,28027,043

Ordinary profit(Millionsof yen)

4,008

11,49525,063

17,444

3,853

Profit(Millionsof yen)

2,623

8,681

18,485

14,313

2,899

Share capital(Millionsof yen)14,965

14,965

14,965

14,965

14,965

Total number of shares issued(Shares)

120,415,600

120,415,600

120,415,600

120,415,600

120,415,600

Net assets(Millionsof yen)61,927

69,64586,20496,544

94,385

Total assets(Millionsof yen)68,045

81,124

101,386

108,607

100,320

Net assets per share(Yen)

514.28578.38715.89801.76783.83

8.00

16.00

33.00

42.00

17.00

[–]

[–]

[–]

[–]

[–]

Dividends per share(Interim dividends per share)(Yen)

Earnings per share

(Yen)

21.79

72.10

153.51118.87

24.08

Diluted earnings per share

(Yen)

–

–

–

–

–

Shareholders’ equity ratio

(%)

91.0

85.9

85.0

88.9

94.1

Return on equity (ROE)

(%)

4.30

13.20

23.72

15.66

3.04

Price-earnings ratio (PER)(Multiple)

102.40

41.17

14.60

14.58

40.29

Dividend payout ratio

(%)

36.7

22.2

21.5

35.3

70.6

Number of employees(Persons)

517

570

669

769

802

(%)

87.2

116.6

89.5

71.4

42.3

(%)

[90.5][128.6][131.2][138.8][196.2]Highest share price

(Yen)

2,826

3,535

3,350

2,336

1,790

Lowest share price

(Yen)

1,481

2,070

2,146

1,651

961

Total shareholder return(Comparative indicator:
Dividend-included TOPIX)

Notes: 1. The Company aims to secure a competitive advantage by focusing on the Reagents and Instruments business and the CDMO
business to support the development and manufacture of regenerative medicine/gene and cell therapy etc. For this reason, alarge amount of research and development investment has been made in relation to net sales. The percentages of researchand development expenses in relation to net sales for the 18th through 22nd terms are 10.8%, 11.1%, 9.0%, 10.8% and20.4%.
2. Information on diluted earnings per share is omitted owing to an absence of dilutive shares.
3. The highest share price and lowest share price have been those on the Tokyo Stock Exchange (Prime Market) since April 4,2022 and were those on the Tokyo Stock Exchange (First Section) previously.

-3-2. Company history
Based on a resolution to approve a plan to split off the business of the biotechnology division in an extraordinary
general meeting of shareholders of Takara Shuzo, Co., Ltd. (currently Takara Holdings Inc.; hereinafter referred
to as “Takara Holdings”) held on February 15, 2002, the Company was established on April 1, 2002, as a whollyowned subsidiary of Takara Holdings, assuming its biotechnology business by means of a company split (buttekibunkatsu) in order to fully take advantage of the characteristics of the biotechnology business and provide abusiness environment for increasing growth ability and competitiveness.
Therefore, matters related to before the establishment of the Company contained within this document are related
to the sales of the biotechnology division of Takara Shuzo, Co., Ltd.
History of the biotechnology division of Takara Shuzo, Co., Ltd.
Date

Event

Sept. 1970

Completed construction of the Central Research Laboratories in Otsu City, Shiga.

Oct. 1973

Commenced the AgriBio business. Out-licensed and commercialized technology for artificial
cultivation of bunashimeji mushrooms.
Launched the first domestically produced restriction enzymes and commenced the Genetic Engineering
Research Reagents business (the present Reagents business).
Acquired exclusive distribution rights in Japan for a gene amplification system using PCR technology.

Oct. 1979
June 1988
Jan. 1990
Aug. 1993
Mar. 1995
May 1995
Oct. 1995
July 2000
July 2001

Commenced operation of the research reagent manufacturing and contracted research facility in
Kusatsu City, Shiga (currently Kusatsu Office of the Company).
Established Takara Biotechnology (Dalian) Co., Ltd. in China to manufacture biotechnology products
in Dalian, China.
Established Takara Biomedical Europe S.A. (currently Takara Bio Europe S.A.S.) as a subsidiary for
selling biotechnology research reagents in Gennevilliers, France.
Developed the RetroNectin Method. Commenced Gene Therapy business.
Established Bohan Biomedical Inc. (currently Takara Korea Biomedical Inc.) as a subsidiary sellingbiotechnology research reagents in Seoul, Korea.
Established DRAGON GENOMICS Co., LTD. as a subsidiary conducting genome sequence analysis
in Yokkaichi City, Mie.
Established Mizuho Norin Co., Ltd. as a subsidiary producing and selling mushrooms in Mizuho Town
(currently Kyotamba Town), Kyoto.

History of Takara Bio
DateApr. 2002

Oct. 2002
Jan. 2004
Jan. 2004
Dec. 2004
July 2005
Sept. 2005
Jan. 2007
Dec. 2007
May 2011

Event
Established the Company in Otsu City, Shiga, to assume the biotechnology business from Takara ShuzoCo., Ltd. by a company split (butteki-bunkatsu) for the purpose of the manufacture and sale ofbiotechnology research products, contracted research services, the manufacture and sale of the AgriBio
products and the development of gene therapy and cell therapy.
Executed an absorption-type merger with a wholly-owned subsidiary, DRAGON GENOMICS Co.,LTD.
Established Takara Mirus Bio, Inc. (changed trade name to Takara Bio USA, Inc.) as a subsidiaryselling research reagents, etc. in Madison, U.S.
Established Takara Biomedical Technology (Beijing) Co., Ltd. as a subsidiary conducting R&D and thecommercialization of gene therapy and cell therapy in Beijing, China.
Listed on the TSE Mothers Index.
Established Takara Bio USA Holdings Inc. as a subsidiary performing subsidiary management in the
U.S. at Mountain View, U.S.
Acquired all shares of Clontech Laboratories, Inc., which manufactures and sells research reagents inMountain View, U.S., through Takara Bio USA Holdings Inc., making it a wholly-owned subsidiary.
Established KINOKO CENTER KIN INC. in Okinawa for the production and sale of mushrooms in
Kin Town, Okinawa.
Executed an absorption-type merger of Takara Bio USA, Inc. with Clontech Laboratories, Inc. as thesurviving company.
Established DSS Takara Bio India Private Limited as a subsidiary selling research reagents in New
Delhi, India.

-4-

Date
Aug. 2014
Sept. 2014
Oct. 2014

Aug. 2015
Nov. 2015

Event
Acquired all shares of Cellectis AB manufacturing and selling stem cell products in Gothenburg,
Sweden, making it a subsidiary.
Cellectis AB changed trade name to Takara Bio Europe AB.
Began operation of the Center for Gene and Cell Processing (Kusatsu City, Shiga), and commenced fullscale operation of the CDMO (Contract Development and Manufacturing Organization) businessdeveloping and manufacturing regenerative medicine products, etc.
New head office completed in Kusatsu City, Shiga, and head office functions relocated.

Mar. 2016

All shares of Takara Bio Europe AB used as contribution in kind for Takara Bio Europe S.A.S. to change
to indirect ownership.
Changed listing from Tokyo Stock Exchange Mothers to the First Section of the Tokyo Stock Exchange.

Apr. 2016

Relocated registered head office location from Otsu City, Shiga to Kusatsu City, Shiga.

Apr. 2016

Clontech Laboratories, Inc. changed trade name to Takara Bio USA, Inc.

Jan. 2017

Jan. 2021

Acquired all shares of Rubicon Genomics, Inc., which develops, manufactures and sells research reagentsin Ann Arbor, U.S., through Takara Bio USA Holdings, Inc., making it a subsidiary.
Acquired all shares of WaferGen Bio-systems, Inc., which manufactures and sells research reagents andinstruments in Fremont, U.S., through Takara Bio USA Holdings, Inc., making it a subsidiary.
Executed an absorption-type merger of Rubicon Genomics, Inc. with Takara Bio USA, Inc. as thesurviving company.
Executed an absorption-type merger of WaferGen Bio-systems, Inc. with Takara Bio USA, Inc. as thesurviving company.
Transferred the business related to functional foods to SHIONOGI HEALTHCARE CO., LTD. by meansof a company split (absorption-type split).
Transferred the business related to mushrooms to Yukiguni Maitake Co., Ltd. As a result, Mizuho NorinCo., Ltd. and KINOKO CENTER KIN INC. fell outside the scope of consolidation. Ended the AgriBio
business.
Constructed Center for Gene and Cell Processing II and began full-scale operation in responding to the
expansion of CDMO business, preparation for the launch of in-house gene therapy project and the
expansion of research and development.
Obtained approval to manufacture and sell Takara SARS-CoV-2 Direct PCR kit, an in vitro diagnostic,
and launched it in November in Japan.
Established Takara Bio UK Ltd. as a subsidiary selling research reagents and instruments in London, UK.

Aug. 2021

Relocated the head office of Takara Bio USA, Inc. from Mountain View, U.S. to San Jose, U.S.

Apr. 2022

Transferred from the First Section to the Prime Market of the Tokyo Stock Exchange owing to therevision of the market segments of the exchange.
Executed an absorption-type merger of Takara Bio Europe AB with Takara Bio Europe S.A.S. as thesurviving company.

Feb. 2017
Mar. 2017
May 2017
Jan. 2019
Mar. 2019

Jan. 2020

Oct. 2020

Dec. 2022-5-

3. Description of business
The Group is made up of the Company’s parent company, the Company and the Company’s eight groupcompanies (subsidiaries) (hereinafter referred to as the “Group” including the Company), and conducts
businesses in Reagents, Instruments, CDMO and Gene therapy. The businesses of the Group and thepositioning of each company within the relevant businesses are as follows.
Information is shown by business owing to segment information not being shown.
(1) Current business details(i) Reagents, Instruments and CDMOThe Group’s main customers are universities, public research institutions, enterprises and testing companies
engaged in research, product development and testing businesses using biotechnology, and the Group
provides its products and services through distributors or to customers. In doing so, the Group actively
engages in sales promotion activities, such as providing product and technical information to customers andholding related technical seminars, in order to add value and differentiate itself from its competitors.
1) Business areas of Reagents, Instruments and CDMO businesses
Research and development using biotechnology is based on clarifying life phenomena on a genetic andcellular level. The Group has cultivated genetic engineering and cell engineering technologies, such as
PCR/real-time PCR, cloning, gene/protein expression, gene delivery, vector systems, next-generation
sequencing, genome editing and stem cells as technologies for analyzing genes and cells. Using thesetechnologies as a foundation, the Group is expanding its products and services to include DNA/RNA
analysis products and bulk/custom production of enzymes, etc. in the area of molecular biology, andproducts related to stem cells (ES/iPS cells, etc.) and single cell analysis in the area of cellular biology.
Furthermore, the Group is operating a CDMO (Contract Development and Manufacturing
Organization) business conducting contract manufacturing of regenerative medicine products, etc.,
compliant with GCTP/GMP (Note) and contract services as a research and development partner in order
to expand business areas from the area of research support to the area of industrial application support.
In the CDMO business, we are utilizing technology and knowhow cultivated in development of research
reagents, in clinical development of gene therapy and cell therapy to be contracted for genetic analysis
and testing and contracted for services related to regenerative medicine products.
Note:

GCTP (Good Gene, Cellular and Tissue-based Products Manufacturing Practice) is a standard for
manufacturing management and quality management of regenerative medicine products, and GMP (GoodManufacturing Practice) is a standard for manufacturing management and quality management ofpharmaceuticals and quasi-pharmaceutical products.

2) Reagents
In research using biotechnology, it is necessary to use many types of reagents according to the objective,
stage and target substance. The Company has proceeded to develop new technologies and new products
closely following the advancements in genetic engineering as a major manufacturer of genetic
engineering research reagents since the launch of the first domestically produced restriction enzymes
in 1979.
The Company acquired US-based Clontech Laboratories, Inc. (currently Takara Bio USA, Inc.) in
September 2005, which added Clontech® products centered on the area of cellular and molecularbiology to the Group’s product lineup of research reagents. Furthermore, the Company acquired
Sweden-based Cellectis AB (currently Takara Bio Europe S.A.S.) in August 2014, adding Cellartis®
products centered on the area of stem cells, and acquired US-based Rubicon Genomics, Inc. (later
merged into Takara Bio USA, Inc.) in January 2017, strengthening the lineup of products in the area of
ultra-low input nucleic acid sample analysis.
In addition, the Company has been selling in vitro diagnostics using PCR technology since November
2020.
3) Instruments
Scientific instruments also require knowledge of biotechnology, and are often developed and sold assystems in combination with reagents as consumables for the instruments, and are an area where theGroup can obtain synergies.
The Group’s business in this area began with the commencement of import and sale of a gene amplifier
called a thermal cycler, which is essential for the PCR method, from the United States in 1988. Since-6-then, the Company has endeavored to expand business by developing PCR instruments and real-time
PCR instruments incorporating the Company’s unique experimentation know-how.
Furthermore, the Company acquired US-based WaferGen Bio-systems, Inc. (later merged into Takara
Bio USA, Inc.) in 2017, which has proprietary technology in the area of single-cell analysis,
strengthening the ability to manufacture and sell scientific instruments.
4) CDMO
The Company provides paid services for universities, public research institutes and pharmaceuticalcompanies, etc. based on contracts for research and development and manufacture. In particular, theCompany is focusing on CDMO contract services for processes from manufacturing method
development to manufacture for products for regenerative medicine/gene and cell therapy, etc. withwhich pharmaceutical companies and others proceed.
a) Contract services related to genetic analysis and testing
In this business, rather than being limited to simple gene sequencing analysis, the Company isparticipating in large-scale genome analysis projects utilizing next-generation sequence analysis
and providing genetic functional analysis services. Furthermore, the Company provides advanced
genetic testing services by applying gene analysis technology cultivated through fundamental
research support. In addition, under a reliability assurance system, the Company conducts
numerous types of nucleotide sequence analysis used in pharmaceutical applications, etc. bypharmaceutical companies, etc. and genome tests of cancer patient’s specimens based on requests
from medical institutions.
b) Contract services related to regenerative medicine products
Utilizing the technology and know-how cultivated in clinical development of gene therapy, theCompany holds the facilities and system necessary for development and manufacture support
contract services related to regenerative medicine/gene and cell therapy, etc. by pharmaceuticalcompanies and others. In this business, the Company performs contract manufacturing,development of manufacturing processes, pilot manufacturing, development of quality control
testing methods, and bioassay services in compliance with GCTP/GMP such as for gene delivery
vectors, vaccines, and cells, etc. used in regenerative medicine/gene and cell therapy.
(ii) Gene therapy
The Company is engaged in maximizing the value of fundamental biologics development technologies
developed by the Company in an applied area of its core technologies of gene engineering technology andcell engineering technology.
1) The current state of gene therapy
In the past, pharmaceuticals were centered on low-molecular compounds manufactured using chemical
synthesis, but with the advancements in biotechnology in recent years, biopharmaceuticals with a main
component of antibodies or recombinant protein, etc., have emerged. Furthermore, owing to advancesin new technologies such as stem cells and virus vectors, regenerative medicine/gene and cell therapy,
etc. using cells and genes as products have been gaining attention as new modalities (means of therapy).
Gene therapy is a method for treating patients by administering therapeutic genes or cells embeddedwith these genes to the human body. As a result of progress in development centered on U.S. andEuropean pharmaceutical companies, there has recently been a succession of launches to market, andcompetition between bio-ventures and pharmaceutical companies, etc. is intensifying.
2) Commercialization of fundamental biologics development technologies
In addition to the development, manufacture and sale of RetroNectin® for the production of engineered
T cells (a type of gene therapy product) and ancillary materials for the production of mRNA vaccines,
such as RNA polymerase, the Company is developing and advancing the commercialization of
CereAAVTM, a viral vector for brain-tropic in vivo gene therapy, and SonuAAVTM, a viral vector for
inner ear-tropic in vivo gene therapy.
3) Clinical development projects
Clinical development is ongoing for NY-ESO-1・ siTCR® gene therapy (development code: TBI1301), a genetically engineered T-cell therapy utilizing the Company’s proprietary siTCR technology,-7-and CD19-JAK/STAT-CAR (development code: TBI-2001), a next-generation CAR gene therapy
technology (JAK/STAT technology) with long-lasting anti-tumor effect.
(2) Positioning of each company in the Group(i) Reagents, Instruments and CDMOThe Company performs development, manufacturing and sale of reagents and instruments as well as
CDMO contract services. In China, Takara Biotechnology (Dalian) Co., Ltd. performs development andmanufacturing of reagents along with contracted services, and Takara Biomedical Technology (Beijing)Co., Ltd. performs sales of reagents and instruments. In Europe, Takara Bio Europe S.A.S. performs the
manufacture and sale of reagents and the sale of instruments and contract services for CDMO, and Takara
Bio UK Ltd. performs the sale of reagents and instruments. Takara Korea Biomedical Inc. performs salesof reagents and instruments in South Korea. Takara Bio USA, Inc. performs development andmanufacturing of reagents and instruments in the United States as well as sales worldwide. DSS Takara
Bio India Private Limited performs manufacturing and sales of reagents in India.
(ii) Gene therapy
The Company is advancing the development of basic biologics development technologies related toregenerative medicine/gene and cell therapy, etc., and the clinical development of NY-ESO-1・ siTCR®
gene therapy product and CD19-JAK/STAT-CAR gene therapy developed by the Company. In addition,
the Company is engaged in the development, manufacture and sale of RetroNectin and other ancillarymaterials.
(3) Group business structure chart
The status of the above Group is outlined in the following group business structure chart indicating therelationships between the Company and major subsidiaries.
Takara Holdings Inc. (parent company)

Takara Bio Inc.

Takara Bio Europe S.A.S.
(*)

Takara Bio
USA, Inc. (*)

Takara Biotechnology(Dalian) Co., Ltd. (*)

Takara Biomedical
Technology (Beijing)Co., Ltd. (*)

Takara Bio UK Ltd (*)

DSS Takara
Bio India
PrivateLimited (*)

Takara Korea
Biomedical Inc.
(*)

Clients
Payment of trademark licensing fees
Consolidated subsidiaries

Flow of product and services
Flow of raw materials, etc.
*-8-Takara Holdings Inc. (Prime Market, TSE) is the parent company, which holds 60.93% of voting rights in the
Company as of March 31, 2024. There are transactions between the Company, Takara Holdings, and Takara
Holdings’ group companies (Takara Holdings’ subsidiaries and affiliates). The position of the Company in the
Takara Holdings Group and the principal transactions between the companies in the Takara Holdings Groupand the Company are as follows.
(i) Positioning of the Company within the Takara Holdings GroupThe Takara Holdings Group consists of Takara Holdings, which is a pure holding company, and its 68
group companies (66 subsidiaries and two affiliates). Within the Takara Holdings Group, the Company ispositioned as an operating subsidiary specializing in biotechnology, and conducts biotechnology businessalong with the Company’s eight group companies (subsidiaries).
(ii) Transactions with the Takara Holdings GroupThe Company has real estate lease transactions primarily related to sales sites, transactions related to useof trademark rights, and transactions related to the outsourcing of computer-related services, etc., with the
Takara Holdings Group. Details are stated in “II. Overview of business, 3. Business risks, (5) The
Company’s parent company.”-9-4. Overview of subsidiaries and other affiliates
Name

Address

Share capital orinvestments incapitalPrincipal
contents ofbusiness

Ratio of voting
rights holding(%)

Relationship

Parent company

Shimogyo-ku,
Kyoto

JPY 13,226 Pure holding
million company

Two officers concurrently
serving (two officers of theCompany)
The Company pays trademark
60.93 held
licensing fees
The Company entrusts computerrelated operations and leases
information-related equipment

Takara Bio Europe
S.A.S. (Note 5)Saint-Germainen-Laye,
FranceManufactureand sale ofreagents, sale of
EUR 891,000
instruments, andcontract
services

Four officers concurrently
serving (one officer, one
executive officer, and two
employees of the Company)
100.00Purchase of products from theCompany
Delivery of products to theCompany

Takara Bio UK Ltd.
(Note 4)

London, United
Kingdom

GBP 100,000

Takara Holdings Inc.
(Note 2)

Consolidated subsidiaries

Takara Biotechnology(Dalian) Co., Ltd. (Note3)

Dalian,Liaoning
Province, China

Takara Biomedical
Technology (Beijing)
Beijing, China
Co., Ltd. (Notes 3 and 5)

Takara Korea Biomedical Seoul, South
Inc.
Korea

Sale of reagentsand instruments

Development,
manufacture
JPY 2,350 and sale ofmillion reagents,
contractbusiness

Ten officers concurrently serving(three officers, one executive
officer, and six employees of theCompany)
100.00
Delivery of products to theCompany
Purchase of raw materials, etc.
from the Company

JPY 1,330 Sale of reagentsmillion and instruments

Ten officers concurrently serving(two officers, one executive
officer, and seven employees of
100.00the Company)
Purchase of products from theCompany

KRW 3,860 Sale of reagentsmillion and instruments

Five officers concurrently
serving (one officer, two
executive officers, and two
100.00employees of the Company)
Purchase of products from theCompany

DSS Takara Bio India
Private Limited (Note 4)

New Delhi,
India

Manufacture
INR 110and sale ofmillionreagents

Takara Bio USA
Holdings Inc. (Note 3)

San Jose, U.S.

USD Management of
70,857,000 subsidiaries

San Jose, U.S.

Development,
manufacture,
USD 83,000 and sale ofreagents andinstruments

Takara Bio USA, Inc.
(Notes 3, 4 and 5)

One officer concurrently serving
100.00(one executive officer of the[100.00]
Company)- 10 -

Three officers concurrently
serving (one officer and two
employees of the Company)
51.00
Delivery of products to the[1.00]
Company
Purchase of products from theCompany
Five officers concurrently
serving (three officers and two
100.00executive officers of theCompany)
Five officers concurrently
serving (three officers and two
executive officers of the
100.00 Company)[100.00] Delivery of products to theCompany
Purchase of products from theCompanyNotes: 1. The principal businesses of each group company are shown in the “Principal contents of business” column because theGroup has a single segment.
2. This company files its Annual Securities Report.
3. These companies are classified as “Specified Subsidiaries” under the Financial Instruments and Exchange Act of Japan.
4. The figures in brackets in the “Ratio of voting rights holding” column are the indirect holding ratio included in the figuresoutside the brackets.
5. The percentage of net sales (excluding internal sales between consolidated companies) exceeds 10% of consolidated net
sales.

Key profit and loss information(Millions of yen)
Takara Bio Europe S.A.S.

Takara Biomedical
Technology (Beijing) Co.,Ltd.

(1) Net sales

4,796

6,996

(2) Ordinary profit or loss (-)

(398)

773

1,375

(3) Profit or loss (-)

(558)

575

1,146

(4) Net assets

2,204

3,737

36,022(5) Total assets

3,326

4,509

38,311- 11 -

Takara Bio USA, Inc.
16,989

5. Information about employees(1) Consolidated companies
As of March 31, 2024
Number of employees

1,838

Notes: 1. The number of employees is the number of working employees excluding temporary employees and dispatchedemployees.
2. Information by segment has been omitted because the Group is a single segment.

(2) Information about reporting company
Number of employees

Average age

802

Average years of service

41.1

11.5

As of March 31, 2024
Average annual salary(thousands of yen)
6,799

Notes: 1. The number of employees is the number of working employees excluding temporary employees and dispatchedemployees.
2. Average annual salary includes bonuses and surplus wages.
3. The average years of service state the total number of years from Takara Shuzo Co., Ltd. (currently Takara Holdings)
prior to the company split.
4. Information by segment has been omitted because the Company is a single segment.

(3) Status of labor union
Employees are members of the TaKaRa Labor Union, and there were 599 members as of March 31, 2024.
There are no notable matters with the labor union.
(4) Proportion of female employees in managerial positions, rate of taking childcare leave by male employees
and differences between female and male employees in wages(i) Reporting company
Fiscal year ended March 31, 2024
Proportion of
femaleemployees inmanagerial
positions (%)(Note 1)

23.9

Rate of taking
childcare leaveby maleemployees (%)(Note 2)56.5

Differences between female and male employees inwages (%)
(Notes 1 and 3)

All employees

81.0Part-timers andRegularfixed-term
employees of all
employees of all
employees
employees(Note 4)(Note 5)

80.9

65.2

Supplementary explanation

The reason for differences between
female and male employees inwages is that the proportion of
female employees is high in theyoung-age group.

Notes: 1. It is a figure calculated pursuant to the provisions of the Act on the Promotion of Women’s Active Engagement inProfessional Life (Act No. 64 of 2015).
2. It is a figure for the rate of taken childcare leave, etc. under Article 71-4, item (i) of the Ordinance for Enforcement of
the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring for Children or
Other Family Members (Ordinance of the Ministry of Labor No. 25 of 1991) that is calculated pursuant to theprovisions of the Act on Childcare Leave, Caregiver Leave, and Other Measures for the Welfare of Workers Caring
for Children or Other Family Members (Act No. 76 of 1991).
3. Wages include basic pay, overtime pay, bonuses, and support for rents and other pay and exclude retirement
allowances and commutation allowances, etc.
4. Regular employees exclude employees loaned to outside the Company
5. Fixed-term employees include contract workers and non-regular employees and exclude dispatched employees.

- 12 -

II. Overview of business
1. Management policy, management environment, issues to address, etc.
The Group’s management policy, management environment, issues to address, etc. are as follows.
Please note that matters concerning the future in this article were determined by the Group as of the end of the
fiscal year under review.
(1) Management policy
Under the corporate philosophy of “contributing to the health of humankind through the development ofrevolutionary biotechnologies such as gene therapy,” the Group aims to contribute to society and enhance
corporate value through the Reagents and Instruments businesses and CDMO business by utilizing thetechnological foundation of biotechnology.
(2) Management strategy, etc.
In 2020, the Group formulated the “Long-Term Management Plan 2026” and has conducted business according
to the Plan. In May 2023, the Group formulated the “Medium-Term Management Plan 2026,” which is a
specific execution plan for the last three years of the “Long-Term Management Plan 2026.”
Under the “Long-Term Management Plan 2026,” our vision is to become “a biologics development company*that continues to create new modalities by advancing the development of fundamental technologies forbiologics through the Reagents and Instruments business and the CDMO business.”(Reference) Vision of Long-Term Management Plan 2026
(i) Business area expansion

Biologics development
company
Creation of new modalities for regenerative /cellular medicine andgene therapies

Biologics development
Clinical practice/diagnostics

Platforms responsible for the
infrastructure of the life science
industry

CDMO
business

Industrial application
supportDevelopment and manufacturing ofregenerative medicine, cell therapy, andgenetic therapy
Academic researchsupportResearch support
business

Gene analysis
and testing

Research reagents
Scientific instruments
Genetics/
cellularengineering

Therapeutic cells
and vectors
Ultra low nuclear
acid analysis

GCTP, GMP
manufacturing(ii) Development of new technology(i) Business area expansion
Expand the business areas from research support in academia to industrial applications, clinicalrelated fields, and biologics development(ii) Development of new technology
Develop platform technologies on biologics development via developing new products such as
research reagents, and new menus for CDMO businessNote: A company that earns profits by licensing-out newly developed modalities, not a pharmaceuticalcompany which has fully integrated all functions of pharmaceutical R&D, manufacturing, andsales within a company.
- 13 -

Under the Medium-Term Management Plan 2026 (announced in May 2023), we are pursuing the following
five business strategies.
(i) Establish our status as a global platformer responsible for the infrastructure in the life sciences industry(ii) Improve the glocal manufacture and marketing system(iii) Make the quality control processes more solid and efficient, and strengthen technological capabilities for
manufacture(iv) Maximize the value of fundamental biologics development technologies(v) Accelerate the development of new products and services by selecting and concentrating on research anddevelopment projects
In addition, we are taking the following three actions to strengthen our management base.
(i) Realize a rise in ROE through aggressive investment in growing and strengthened areas and appropriate
return to shareholders(ii) Build a firm basis for growth by deepening connection between the Company and its employees(iii) Balance “realizing a sustainable society” and “sustained growth of the Group”(3) Objective indicators, etc., for determining the state of achievement of management targets
The Group sets consolidated operating profit as an indicator of business growth and return on equity (ROE)
as an indicator of capital efficiency as quantitative targets. In addition, consolidated net sales and research anddevelopment expenses are used as Key Performance Indicators (KPI) as process indicators for the achievementof the quantitative targets.
(4) Management environment
In the environment surrounding the Group, we recognize a strong fair wind is expected to be blowing toward
the life science industry in a medium to long term, such as the recognition of the importance ofbiotechnologies with the COVID-19 pandemic as a starting point, and regenerative medicine/gene and celltherapy as a concentrated investment area in the Japanese government’s basic strategy, resulting in largescale budgetary provision.
However, current life science R&D activities worldwide are sluggish due to persistent inflation and highpolicy interest rates in the U.S. and Europe, as well as the impact of the reduction in academic researchfunding in China due to the country’s economic recession. In addition, the business environment in Japan is
rapidly changing due to the entry of competitors into the biopharmaceutical CDMO business.
The Group aims to achieve its quantitative targets (consolidated operating profit of ¥15.0 billion and ROE of
8% or higher) for fiscal 2026, the last year of its “Medium-Term Management Plan 2026,” but we recognizethat the hurdles to achieving these targets are extremely high under the current business environment. Whileadhering to the direction set out in our “Long-Term Management Plan 2026” and “Medium-Term
Management Plan 2026,” we will implement further measures with a sense of urgency to achieve sustainablegrowth.
In addition, we will actively engage in sustainability activities to address social issues such as theenvironmental and human right issues that are of great concern to society.
(5) Priority business and financial issues
Business growth strategy(1) Reagents businessIn the COVID-19 crisis, sales of test-related reagents for the new coronavirus recorded substantial growth.
However, in the Medium-Term Management Plan 2026, we do not count sales of the reagents and aim at thegrowth of the Reagents business from the global and multi-polar (glocal) development of reagents for general
research.
- 14 -

・ Build a glocal marketing/sales strategy that takes regional characteristics into account, in such a way as
increasing sales of BtoB custom-made products to aim at an annual growth rate of 7% (on a local currency
basis)
・ Aim at improving development efficiency by optimizing development themes at our research anddevelopment sites in Japan, the U.S. and China that will strengthen development of new products in theapplication and clinical application areas
・ Create optimization and a synergy effect of the research and development system in Japan, the U.S., andChina
・ In light of balance of efficiency gains and risk reduction, build a glocal manufacturing system(2) Instruments businessIn addition to accelerating the development of new models of PCR-related systems ready for various tests
and single-cell analysis systems, we aim at systematization through the development of dedicated reagents.
・ Accelerate the development of new models of single-cell analysis system (ICELL8) (the year 2024)
・ Realize systematization through the development of new models of qPCR systems for the test market andthat of panel reagents・ Develop qPCR medical instruments for human infection testing and reagents exclusively for them・ Develop single-use instruments for on-site testing・ Develop isothermal gene amplification systems(3) CDMO businessWe will actively proceed with technological development, human resources training, and capital investment
to aim at rapid growth.
(i) Contract services related to regenerative medicine products
・ Enhance various modalities and a contract services menu for mass production
・ Reduce costs through automation and development of more solid manufacture and quality control
processes
・ Prepare for construction of the Center for Gene and Cell Processing III (scheduled to start in fiscal 2025
and to be completed in fiscal 2028)(ii) Contract services related to genetic analysis and testing・ Develop techniques for analysis and testing pretreatment by utilizing the liquid biopsy technology
・ Develop NGS-related services for clinical application
・ Develop biologics development support services through advanced multiomics analysis(4) Gene therapy businessWe aim at placing NY-ESO-1・ siTCR® gene therapy product (code: TBI-1301) on the market and atincreasing added value to our own fundamental biologics development technologies relating to regenerative
medicine/gene and cell therapy, etc.
・ Push on with preparations to place NY-ESO-1・ siTCR® gene therapy product on the market
・ CD19-JAK/STAT-CAR gene therapy product (code: TBI-2001): acquire data about supremacy overconventional CAR-T
・ Acquire data about CereAAVTM on its supremacy over conventional AAV
・ Develop the capability to manufacture RetroNectin®
・ Develop and productize enzymes for mRNA composition, etc. (ancillary materials: raw materials for
manufacturing medicine and other products)- 15 -

Strategy for strengthening the management base(1) Finance
We will actively make continuous investments in growing and strengthening businesses while
maintaining a sound financial base. Moreover, we will push on with management being conscious of thecost of capital and market valuation by raising ROE through maintaining appropriate returns toshareholders.
(i) Research and development, capital investment and return to shareholders
・・・・

Actively make continuous investments in growing and strengthening businesses while
maintaining a sound financial base
Actively invest in research and development, which are the driving force for sustained and rapid
growth, to further optimize and strengthen cooperation among development themes at our sites
in Japan, the U.S., and China
Aggressively invest in growing and strengthened areas, including the construction of the Center
for Gene and Cell Processing III
Improve return on equity (ROE) through appropriate shareholder returns to increase capitalefficiency(ii) Capital cost・We will regularly review the weighted average cost of capital (WACC), return on equity (ROE),
share price and price-to-book ratio (PBR) at Board meetings to improve capital efficiency overthe medium to long term through earnings growth and appropriate shareholder returns, and to
manage with an awareness of the capital cost and share price.

(2) Human resources and organization
We will strengthen connection between the Company and its employees as well as create a working
environment as the basis of aiming at rapid growth and implement personnel measures.
・・・Personnel training: Shift from employment to training to nurture capable persons who can copewith changes
Organization establishing: Realize the establishment of organizations which can adapt todifficulties flexibly
Working environment creation: Improve a working environment in which various capable
persons can show their abilities(3) Creating social value
We will address various social issues through business activities and aim at balancing “realizing
sustainable society” and “sustained growth of the Group.”・・・Promotion of CO2 emissions reduction: In the situation where CO2 emissions are expected toincrease because of expanded business activities, increased equipment and other factors, reduce
CO2 emissions per net sales (intensity) by 50% from fiscal 2019 (base year) through the use ofrenewable energy, energy-saving activities, etc.
Strengthen the disclosure level of TCFD (Task Force on Climate-related Financial Disclosures)
Promotion of human rights due diligence: Aim at reducing risks to human rights throughspecifying and evaluating risks to human rights in the Takara Bio Group and its value chain- 16 -

2. Thinking on and efforts at sustainability
The Group’s thinking on and efforts at sustainability are as follows.
Please note that matters concerning the future in this article were determined by the Group as of the end of the
fiscal year under review.
(1) General policy on sustainability
Under the corporate philosophy of “contributing to the health of humankind through the development ofrevolutionary biotechnologies such as gene therapy,” the Group aims at balancing “realizing sustainable
society” and “sustained growth of the Group” by addressing various social problems over sustainability,
including health, through business activities from the point of view of increasing our corporate value inthe medium and long term.
(i) Governance
As a system of promoting sustainability activities, we have established the Takara Bio Group
Sustainability Promotion Committee chaired by the Company’s President and Executive Officer, whichplays a central role in promoting sustainability activities. Under the supervision of the Board of
Directors, the Sustainability Promotion Committee plans, carries out, evaluates and improves activities
relating to sustainability as well as making reports to the Board of Directors and giving instructions toGroup companies and the office.
The status of the Sustainability Promotion Committee and its meetings during the fiscal year underreview are as follows.
Meeting date
May 8, 2023

Matters to be resolved

Matters to be reported

・ Review of Materiality Matrix–

・ Revision of the Sustainability Promotion
Committee Regulations
June 5, 2023

・ Report on activities for FY2023
・ Annual report on climate change risks under・ Approval of the Sustainability Plan 2026 andthe TCFD framework

the FY2024 Activity Plan
・ Establishmentofpolicies

relatedtosustainability activities
December 4, 2023

・ Revision of Human Rights Policy

・ Report on activities for the first half of
FY2024(ii) Risk management
In promoting sustainability activities, we have specified eight Materialities (important issues), in
consideration of relevance to the Group and stakeholders’ expectations. Moreover, the Company has set
themes to address materialities and further set specific goals to achieve.
The degree of achieving set targets is monitored by the Sustainability Promotion Meeting (Office) andregularly reported to the Sustainability Promotion Committee and the Board of Directors, thereby risks
are managed.

- 17 -

Materiality matrix(2) Climate change
For realizing “sustainable society” and “sustained growth of the Group,” the Group is committed to proactively
disclosing information to stakeholders by accurately assessing risks and opportunities related to climate change,and explaining the impact on business operations and measures to address them. In our assessment, we use
scenario analysis based on the Task Force on Climate Change Financial Disclosure (TCFD).
(i) GovernanceSee (1) General policy on sustainability, (i) Governance.
(ii) Strategy
The Group recognizes that the rise in global average temperatures due to climate change will have atremendous impact on society and considers it important to contribute to activities to limit the rise intemperature. To strengthen our ability to respond to a 2°C or lower scenario, the Group is developing
strategies to understand the business implications of climate-related risks and opportunities. Analyses
have been conducted using the “2°C or lower scenario,” in which the average temperature increase islimited to less than 2°C above pre-industrial levels, and the “4°C scenario,” in which the averagetemperature increases by 4°C, to assess the level of impact on our business and the likelihood of thesescenarios occurring. In addition, we have considered countermeasures and summarized the risks andopportunities that would have a material impact on our Group in the table below. In the scenario
analysis, we referred to the United Nations Intergovernmental Panel on Climate Change (IPCC) RCP2.6(2°C or lower scenario) and RCP8.5 (4°C scenario), WRI Aqueduct (global water risk mapping tool
published by the World Resources Institute), and others.

- 18 -

2°C or lower scenarioSocietal
ChangeRising energy
costs

Mandates andregulations
for products
and services

Risk/
Opportunity

Transition
riskTransition
risk

Type

Business Impact

MarketRisk of financial impact
from higher production costs
due to rising energy prices

Policies andlegislation

Time
Axis*1

Mediumterm

Risk of prohibition of theuse of certain substances due
to laws and regulations,which leads to suspension of Medium tolong term
the supply of raw materials
for plastic products, etc.,
making it difficult to provide
products and services- 19 -

Financial
Impact*2

MediumMediumBusiness
Risk/
Opportunity*3

Countermeasures

Medium Energy conservation andequipment upgrades atmanufacturing sites (inprogress)
 Introduction of renewableenergy (under review)

Medium Respond to trends in laws,
regulations, and related
agencies in each country
and new environmental
regulations (under review)
 Development and use ofalternative products(under review)

4°C scenarioSocietal
ChangeMore frequentand severe
extremeweather
events(torrential
rain, flooding,etc.)

Pandemic ofinfectious
diseaseDevelopmentof newproducts andservices
through
research anddevelopment
andinnovation

Risk/
Opportunity

Physical risk

Physical risk

Opportunity

Type

Acute
Chronic

Business Impact

Risk of financial impact due
to interruption of supply of
products and services as aresult of damage tomanufacturing sites causedby flooding, etc.

Mediumto long
term

Large

MediumRisk of financial impact due
to damage to manufacturing
sites caused by flooding, etc.
and the resulting need for
replacing equipment. Or riskof damage to biohazard
facilities, making it difficult
to continue operations due tospills of hazardous materials,
etc.

Mediumto longterm

MediumMediumRisk of financial impact due
to interruption of supply of
products and services as aresult of supply chain
disruption caused byflooding, etc.

Mediumto long
term

Large

MediumRisk of financial impact due
to interruption of supply of
products and services as aresult of shutdown ofoperations at manufacturing
sites due to drought, etc.

Mediumterm

Large

MediumChronic

Risk of a reduction ineconomic and R&D activity
due to an infectious disease
epidemic. Or risk of financial
impact due to interruption of
supply of products andservices due to shortage ofraw materials, etc. caused bydisruption of the supply
chain

Mediumterm

Product andservice

Opportunity to expand
business for related new
products and services
through increased R&D in
the area due to spread of
infectious diseases related toclimate change

Mediumterm*1: Time Axis
Medium term: Until 2030
Long term: From 2030 onwards

Business
Financial
Risk/
Impact*2 Opportunity*3

Time
Axis*1Large*2: Impact
Evaluate the impact on consolidated
operating profit or consolidated net
assets based on the criteria of small (lessthan ¥1.0 billion), medium (¥1.0 billion
to ¥3.0 billion), or large (¥3.0 billion ormore).

- 20 -–

Resilience of Takara Bio

 Strive to ensure a stablesupply of products bypromoting thedecentralization (Japan,
U.S., Europe, China, andIndia) and optimization of
manufacturing bases.
 Making efforts to ensurestable supply byrefinement of raw
materials inventory
controls. Advanceconsideration ofpurchasing from multiple
suppliers, etc.
 In the event of a disasteror other event that has asignificant impact on
business continuity, utilize
the crisis management
system based on theBusiness Continuity Plan
(BCP) to quickly restore
and continue business
operations.

Medium In addition to
decentralization of
manufacturing bases,
making efforts to ensurestable supply byrefinement of raw
materials inventory
controls. Advanceconsideration ofpurchasing from multiple
suppliers, etc.
 More global businessdevelopment (in progress)

Medium Research and developmentof new products andservices, investigation of
new market needs (inprogress)*3: Business Risk/Opportunity
Comprehensive assessment based on
financial impact and likelihood of
occurrenceBusiness Risks and Opportunities from Climate Change (Summary)Transition risk:


Risk of financial impact due to higher energy and raw material costs (e.g., introduction of carbon tax)Risk of difficulty in providing products and services due to import/export restrictions on raw materials and products due torestrictions on certain substances (e.g., suspension of supply of raw materials for plastic products)

Physical risk


Risk of financial impact from storm surges due to sea level rise, flooding due to river overflows, droughts, etc. (e.g.,
damage to manufacturing facilities)



Risk that climate change will reduce global life science research activity and business opportunities (e.g., global epidemics
of infectious diseases)

Opportunities:

Opportunities to expand business through the development of new products and services related to climate change (e.g.,
new products and services resulting from a global epidemic of infectious diseases)(iii) Risk management
The Group has established a system to minimize adverse effects and losses through the manifestation ofrisks associated with climate change, including scenario analysis and assessment in accordance with therecommendations of the TCFD. Where appropriate, we assess risk levels based on impact and frequencyof occurrence for our business continuity and major manufacturing sites with significant financial
impact. Identified risks/opportunities and countermeasures are discussed and reported to the Board of
Directors by the Sustainability Promotion Committee, which is chaired by the President and Executive
Officer and consists of the executive officers responsible for each business.
(iv) Indicators and targets
In the “Environment” section of the “Sustainability Management Promotion Policy” formulated in June
2021 (updated in June 2023), which is a key issue to be addressed, the Group set a target to reduce its
CO2 emission intensity per net sales by 50% in FY2026 compared with FY2019. In FY2024, theGroup’s CO2 emission (intensity) was 89% of the level in FY2019. (Table 1)
We will continue to review risks/opportunities and implement countermeasures and reflect them in our
medium- and long-term management strategies, and strive to advance our climate change management
strategy.
Table 1

Changes in Group CO2 Emission* Intensity
Item

FY2019FY2020

FY2021

FY2022

FY2023

FY2024

100

86

76

57

55

89

37

32

28

21

20

33

CO2 emissions (t-CO2)

13,188

10,892

12,836

14,253

15,692

14,211

Takara Bio

5,894

6,822

8,590

9,833

10,418

11,107

Takara Biotechnology (Dalian)

3,869

4,039

4,060

4,126

4,619

2,555

Other business sites

3,425

31

186

294

655

549

Comparison to baseline
emissions intensity (FY 2019) (%)
Intensity (CO2 emissions/net
sales)* Total CO2 emissions of Scope 1 (direct emissions from fuel use) and Scope 2 (indirect emissions fromenergy sources such as purchased electricity)- 21 -

(3) Human capital and diversity
The Group aims at creating a “lively and cheerful workplace and a culture to foster persons” from astandpoint of respect for human life and dignity and at fostering “balanced capable persons as a businessperson, member of society, and individual” in the workplace and culture.
(i) Strategy(1) Human resources training
Aiming at a corporate culture in which each employee’s skills and challenges can be reflected inmanagement and business, we will improve the personnel system and the training program. In the
training program, we provide “stratified training” by job level and years of service, as well as“objective-based training.” In addition, we provide highly specialized education and training todevelop human resources that can play an active role in our business.
(2) Promote the active involvement of diverse human resources
Existence in a company of various points of view and values in which different experiences, skills
and attributes are reflected not being swayed by sex and nationality, etc. constitutes a strength in
the company’s sustained growth. The Group considers that various capable persons’ activities areimportant to its achieving sustained growth in the future.
(3) Achieve a comfortable workplace environment and a work-life balance
We endeavor to improve the office environment and working environment in which employees canwork pleasantly, and we are proceeding with improving a system under which all employees canwork positively while balancing their work and personal life according to their individual lifestyle.
(ii) Indicators and targets(1) Human resources training (Reporting company)
Indicators and targets
Nurture capable persons who can assume

Progress in FY2024
The following education and training programs are offered:global business growth and the next
generation of the Group by providing

・ Training by job level
New Employee Training, Assistant Manager Training, Manager

stratified training, such as new employee
training and management training, andTraining, Mid-Career Hire Training
・ Next Generation Leadership Development Training

continuously holding study meetings, etc. forthe purpose of nurturing the next generation

OJT leadership training, 3rd and 6th year training
・ Skills development trainingof leaders

Basic skills improvement training, hands-on manufacturing training,hands-on quality/GMP training- 22 -

(2) Promote the active involvement of diverse human resources (Reporting company)
Indicators and targets

Progress in FY2024

・ Increase the number of women in
management positions
・ Create job opportunities for people up to 70
years old・ Increase the number of newly promoted women in
management positions (from 2 to 6)

・ Maintain a percentage of employees withdisabilities at not less than the statutory

・ Percentage of employees with disabilities: 2.6%
(maintained the statutory employment rate, which is

employment rate in Japan・ Utilize more mid-career hiring to acquire a

2.5% or higher)
・ Implemented mid-career hiring to acquire a more diverse

more diverse workforce
・ Realize fair employment regardless ofnationality, human rights, sex, disabilities,
etc. to build an environment in which

workforce (134 employees since FY2021) and placed theright people in the right positions.
・ Implemented fair employment regardless of nationality,
human rights, gender, disabilities, etc.

employees can work while respecting eachother(3) Achieve a comfortable workplace environment and a work-life balance (Reporting company)
Indicators and targets

Progress in FY2024

・ Reduce total working hours compared withprevious fiscal year results
・ Set up consulting services for female
employees, etc. during pregnancy and after
return from maternity leave and childcare

・ Total working hours: 98.3% of previous fiscal year results
・ Conducted roundtable discussion between employees with childcare
experience and those on childcare leave
・ Expanded the number of nurseries in cooperation with companies

leave by the end of March 2025
・ Launch an in-house childcare circle(from 3 nurseries to 5 nurseries)
・ Obtained Kurumin and Eruboshi certifications

・ Expand nurseries in cooperation withcompanies

・ Implemented mental health care training for all employees inmanagerial positions

・ Build a systematic mental healthcare system- 23 -

3. Business risks
With respect to the matters stated in the Annual Securities Report concerning the status of operations andfinancial accounting, etc., management is aware of the following principal risks that may materially affect thefinancial status, business results, and cash flows of the consolidated companies.
Please note that matters concerning the future in this article were determined by the Group as of the end of the
fiscal year under review.
The text contains explanations on terms as needed, but the explanations of the terms were prepared by theCompany based on the Company’s judgment and understanding to provide a reference for investors tounderstand this section.
(1) Markets and operations(i) R&D activities
Biotechnology-related industries cover a wide range of product fields such as the fields of regenerative
medicine/gene and cell therapy, etc. as well as research support fields for the purpose of basic researchand biologics development whose direct target customers are universities, public research institutions,companies, and commercial labs, plus environment, energy, food, and information sectors.
Under these circumstances, the Group conducts extensive R&D, which it considers important inmaintaining its competitive edge. However, there is no guarantee that R&D will make progress asplanned. The development, especially in the field of gene therapy, requires long periods of time, and any
delays in R&D may affect the Group’s business strategy and performance.
In addition, the business environment surrounding the biotechnology industry has been changing
dramatically. Since the business environment of the Group may be significantly affected by newtechnological innovations, new entrants and other matters, there is no guarantee that the R&D currently
underway will produce the anticipated results. As a result, the Group could fail to meet its revenue
projections.
(ii) Overseas business
The Group conducts business operations such as R&D, manufacturing, and sales in regions that include
North America, Europe, and Asia (mainly China). Significant changes concerning the economic,
political, or social climate in these countries and regions, the occurrence of problems concerninginternational taxation, such as transfer price taxation systems, may affect the Group’s business strategies
and performance.
In addition, most of the reagents that form the product mainstay of the Group are manufactured by the
China-based subsidiary Takara Biotechnology (Dalian) Co., Ltd. Changes in the earnings trends of thissubsidiary, a suspension of business activities for any reason, or other factors may affect the Group’sbusiness strategies and performance. In light of this risk, while giving consideration to balancing
efficiency gains and risk reduction, the Group is working to establish a global, multi-polar
manufacturing and R&D system.
(iii) Competition
The Group holds a unique position in the industry with a stable revenue base, a solid presence in the
Asian market, and an extensive line-up of proprietary technologies.
However, the manufacture, sale and provision of reagents, instruments and contract services for research
do not require the licensing and approvals needed for pharmaceuticals and medical instruments, and in
the absence of barriers such as patents, entry into the field is relatively easy. Accordingly, a large
number of competitors exist in the market, both in Japan and overseas.
In the field of gene therapy, advances in technology have resulted in the development of therapies thatexcel in safety and performance, and acquisitions for manufacturing and sales approval have begun
overseas. In this burgeoning market, many enterprises are conducting research and development for genetherapy, including biotechnology ventures and pharmaceutical companies in the U.S. and Europe.
Under such circumstances, the Group is developing technologies and products on a proprietary basis orin cooperation with universities and other outside organizations and enterprises. If competitorscommercialize similar products and advance in the fields of technology first, the product development
and performance of the Group may be affected. In light of this risk, the Group protects its technology
and product developments through intellectual property rights in order to achieve exclusivity or- 24 -

differentiation, and will strive to maintain price competitiveness by promoting cost reductions andstrengthening its manufacturing systems.
(iv) Securing human resources
While the Group’s business is based on R&D, new technological innovation and the emergence of newmarket players are having a significant influence on the biotechnology industry. Therefore, to maintainits competitive edge, the Group considers it essential to secure outstanding human resources withspecialist knowledge and skills. Nevertheless, in the event that the Group is not able to secure humanresources as planned or its personnel leave the Group, its business strategy and performance could be
affected. In light of these risks, the Group is making efforts to promote enhanced diversity and training
initiatives, a wage system that rewards performance and results, and a healthy work-life balance, while
creating safe and comfortable workplaces and working environments.
(v) Sales related to CDMOThe Group recognizes sales of CDMO as revenue when control over deliverables is transferred to thecustomer, such as acceptance, receipt or shipment according to the contract, which is when performanceobligations are determined to be satisfied. However, owing to the complexity of contracts, etc., there is arisk of error in the timing of revenue recognition, which may affect the Group’s business performance.
In light of this risk, the Group is working to enhance its internal controls and is conducting checks
through its internal auditing department and finance department.
(2) Finance and economy(i) Financing
The Group may raise funds to cover rising financing demand for R&D expenditure, capital expenditure,
working funds, etc., to accommodate the Group’s new business launches and expanding business scale.
However, if financing does not proceed as planned, it may affect the Group’s business strategies andperformance. In light of this risk, the Group works to maintain and strengthen its sound financial positionand obtains its rating as well as conducts timely reviews of its financial planning based on the latest
information.
(ii) Exchange rate fluctuation
Expenses, revenue, and trade receivables and payables arising from foreign currency transactions
undertaken by the Group are exposed to currency exchange rate fluctuation risk. In light of this risk, theGroup enters into exchange contracts, carrying out other hedging transactions in order to reduce the riskof exchange rate fluctuations.
Furthermore, items such as the revenue, expenses and assets of overseas consolidated subsidiaries arecalculated in yen for the preparation of the consolidated financial statements, but fluctuations in theexchange rate at the end of the fiscal year may affect the Group’s management performance.
(3) Finance(i) Impairment
The Group possesses a variety of property, plant and equipment that serve the purposes of its businesses,
and intangible assets such as goodwill associated with corporate acquisitions and technology assets. In theevent that production equipment is left idle by a sudden change in the business environment, or owing to
a decline in utilization rates, the failure of an acquired business to meet initial projections, or other factors,
an impairment loss arises, it may affect the business performance of the Group. In light of this risk, theGroup follows up on acquired businesses in order to realize post-acquisition synergies and regularly
monitors the macroeconomic environment.
(4) Regulatory and legal procedures, natural disasters and accidents(i) Critical contracts for operation
If any important contracts for the business development of the Group ends owing to the expiry of thecontract term or cancellation or for some other reason or if revisions to the agreements are
disadvantageous to the Group, it may affect the business strategy and performance of the Group.
(ii) Intellectual property rights
In the biotechnology-related industry, where the success or failure of R&D is directly linked to thesuccess or failure of business development, the Group protects its technologies with patents in order to- 25 -

exclude competitors. The Group will continue to place the highest priority on applications for patents
and acquisition of rights when proceeding with R&D activities. However, not all applications may besuccessfully registered, and if a registered patent right becomes invalid or expires, for example, theGroup’s business strategies and performance may be affected.
Moreover, the Group intends to acquire promising patent rights held by others, or acquire licenses for thepatent rights, to enable future expansion of its business. However, these strategies may incur large
expenses. In addition, there is a possibility that the Group may not be able to acquire licenses fornecessary patent rights held by others, and this could affect the Group’s business strategy andperformance.
(iii) Product liability risks
All of the products and merchandise that the Group handles pose an inherent product liability risk. The
Company has bought product liability insurance in preparation for this. If any defect is found in a
manufactured product during its manufacture or sale, or during the clinical trial process, or if a healthimpairment is caused by any pharmaceutical product, medical instruments, in vitro diagnostics,
regenerative medicine products, or research reagents, investigational products used in clinical trials, or
specific cell-processed product, when the Company assumes large-scale product liability whose amountof compensation is over the coverage of the insurance, then the Group may be subject to product liability
claims, and this may affect the promotion of the Group’s business strategies and performance.
In addition, it is usual practice to conduct a voluntary recall when any problem arises with these products
in view of the possible physical effects and damages, and any such recall may require significant timeand entail expense.
(iv) Legal regulations
In advancing research and development, the Group is subject to related laws and regulations such as the
Act on the Prevention of Radiation Hazards due to Radioisotopes, etc., and the Act on the Conservationand Sustainable Use of Biological Diversity through Regulations on the Use of Living Modified
Organisms (“Cartagena Act”), and the Group is committed to observing these laws and regulations. In
addition, in the production, sale, and trade of reagents, etc., the Group is required to follow relevant
legislation, such as the Poisonous and Deleterious Substances Control Act and the Quarantine Act.
However, since reagents are neither pharmaceutical products nor regenerative medicine products as
defined by the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals andMedical Devices (hereinafter “Pharmaceuticals and Medical Devices Act”), said laws and regulations
are not applicable. However, if these regulations are tightened or new regulations are introduced
following expansion, etc., of the supporting research industry, it may affect the Group’s businessstrategies and performance.
Moreover, in vitro diagnostics being developed and sold, and gene therapy products being developed by
the Company are subject to related laws and regulations, including the Pharmaceuticals and Medical
Devices Act, and approvals or permits from the relevant authorities are required for commercial
activities. Failure to obtain such approvals or permits for individual projects being researched or underdevelopment by the Group may affect the Group’s business strategies.
(v) Risks of litigation, etc.
The Group is not a party to any serious litigation or claim with third parties related to the Group’sbusiness. However, litigation may be brought against individual Group companies, and the Group’sbusiness strategies and performance may be affected by the litigation itself as well as by its outcome. In
light of this risk, the Group is endeavoring to enhance internal controls and compliance in the pursuit of
its business activities in Japan and overseas.
In addition, the Group conducts examinations relating to intellectual property rights at its discretion in its
business development. The Group is aware of no fact of a product, etc. of the Group infringing anotherperson’s intellectual property right. However, it is difficult for R&D companies such as the Group to
entirely avoid patent right infringement problems, in particular. If a pertinent infringement issue arises,
the Group may be subject to claims to damages, injunctions, or royalty payments, which may affect theGroup’s business strategies and performance.
Furthermore, if the Group’s business partners or licensors are involved in disputes, the Group may nolonger be able to sell the relevant products or may itself become involved in litigation. Resolving such a- 26 -

case can be time consuming and costly, which may affect the Group’s business strategies andperformance.
(vi) Natural disasters and accidents
The Group’s business activities may be impeded owing to physical and human damages caused bynatural disasters such as storms, earthquakes, lightning strikes, floods and droughts, by fires or otheraccidents, or by worldwide pandemics of infectious disease. In light of such risks, the Group conducts
inspections and training, and creates communication systems and business continuity plans (BCP) to
minimize damage suffered in such cases.
(vii) Environmental issues such as climate change
In order to comprehensively resolve environmental issues such as climate change, resources and energy,
it is necessary to take corporate action such as the reduction of greenhouse gases (GHGs) and thepromotion of energy-saving activities. The Group has established the “Takara Bio Group Sustainability
Management Promotion Policy” and is engaged in resolving issues. Meanwhile, if regulations on
greenhouse gas emissions such as a carbon tax and emissions trading systems are introduced in regions
where the Group conducts business in future, these may affect the Group’s business strategies andperformance.
(viii) Information security
The Group endeavors to stringently manage confidential information and personal information it
possesses. However, if a problem arises owing to a leak of such information, this may affectperformance such as reducing competitiveness or social credibility. Furthermore, the Company takes avariety of defensive measures against cyberattacks and has bought cyber insurance, but in the event a
problem arises in research and development, manufacturing or information systems, this may affect theGroup’s performance.
(5) The Company’s parent company
As of March 31, 2024, Takara Holdings is the parent company of the Company, owing 60.93% of the voting
rights in the Company. The relationship between the Company and Takara Holdings is as follows.
(i) Position of the Company within the Takara Holdings Group (Takara Holdings and its group companies)
The extraordinary general meeting of shareholders of Takara Shuzo Co., Ltd. (hereafter referred to as“Takara Shuzo,” now Takara Holdings), held on February 15, 2002, approved the establishment of
Takara Shuzo and the Company on April 1, 2002 through a corporate split, with each company
becoming a wholly owned subsidiary of Takara Holdings. (Since then, Takara Holdings decreased theownership of voting shares in Takara Bio to 60.93% through a third-party allotment of new shares byprivate and public offering.)
The Takara Holdings Group consists of Takara Holdings, which is a pure holding company, and its 68
group companies (66 subsidiaries and two affiliates). Within the Group, the Company is positioned as an
operating subsidiary specializing in biotechnology, and conducts biotechnology business along with theCompany’s eight group companies (subsidiaries).
(ii) Management of group companies by Takara Holdings
Takara Holdings has established and operates the Takara Holdings Group Company Management Rules
from the standpoint of consolidated business management. Its objective is to maintain the independence
and autonomy of the Takara Holdings Group companies while seeking to maximize the corporate valueof the entire Takara Holding Group. The Company is also subject to these regulations and reports to
Takara Holdings on matters resolved by its Board of Directors. However, since prior approval for its
Board of Directors’ resolutions is not required, the Company is left to operate as an independent
business.
Furthermore, Takara Holdings has established various meeting bodies within the Takara HoldingsGroup, and those related to the Company are as follows.
Name of meeting bodyGroup Strategy
Committee

Main attendees
Officers and Executive Officers of
Takara Holdings Inc.

- 27 -

Details
Confirmation ofmatters related to theentire GroupFrequency of
meetings
Once every twomonths, inprinciple

Name of meeting body

Takara Bio
Coordination
Committee

Frequency of
meetings

Main attendees

Details

Directors and Executive Officers of theCompany
Directors and Executive Officers of
Takara Shuzo Co., Ltd.
Directors and Executive Officers of
Takara Shuzo International Co., Ltd.
Officers of Takara Holdings Inc.
Officers and Executive Officers of theCompany

Reporting on the stateof the Company’s
activities

Once every
month, inprinciple

The purpose of the above meeting bodies is for reporting among the Takara Holdings Group companies,
and they do not impede the autonomy or independence of the Company.
The following officers held concurrent positions in Takara Holdings and the Company as of the date offiling of this Annual Securities Report.
Name
Mutsumi Kimura

Position in the Company
Director

Position in Takara Holdings
Representative Director and President

The above concurrent positions arose because Mutsumi Kimura was appointed by the Company basedon the determination that he would be able to strengthen the Company’s corporate functions and realize
the Company’s sustained growth and increase in corporate value over the medium term, as he has
extensive experience in such areas as the Company’s corporate planning, finance, accounting, public
relations, general affairs and human resources in the past, and has demonstrated leadership as theCompany’s Representative Director and Vice President. Takara Holdings does not intend to control the
Company through such concurrent positions.
A change in the group management strategy of Takara Holdings could affect the business andperformance of the Group.
(iii) Transactions with the Takara Holdings Group
1) Real estate lease transactions related to sales sites
Real estate lease transactions exist with Takara Shuzo in Takara Holdings Group. The sales sites
leased by the Company among the relevant lease transactions are as follows, and in the event ofdifficulties in the renewal of these transactions, Group revenue could be temporarily affected andrelocation expenses incurred until the Company is able to secure an alternative site.
Property
6th floor andground floor of
Takara Meiji
Yasuda Building(Chuo-ku,
Tokyo)
Note:

Purpose of use

The Company’sTokyo Branch

LessorTakaraShuzo Co.,
Ltd.

Transaction amountFiscal year ended
March 31, 2024
(Millions of yen)Transaction conditions, etc.

13

Area: 140.85 m2
Agreement format: Leaseagreement
Basis for calculation of rent:
Market price of land andbuildings, etc.

Transaction conditions and policy, etc. for determination of transaction conditions
Determined after discussion based on an appraisal by a real estate appraiser.

2) Transactions related to use of trademark rights
The Group has concluded trademark licensing agreements with Takara Holdings with regard to thetrademarks it uses, which are owned and controlled by Takara Holdings, and makes trademark usage
payments per trademark. As of March 31, 2024, the Group has licenses for the use of 64 registeredtrademarks and a pending trademark in Japan and overseas.
In the event that the Group is unable to obtain licenses for the use of trademarks from Takara
Holdings, it might affect the Group’s business strategies and performance.

- 28 -

Company name
(Location)

Takara Holdings
Inc.
(Shimogyo-ku,
Kyoto)

Transaction details

Transaction amountFiscal year ended
March 31, 2024
(Millions of yen)

Licensing oftrademark rights

6

Transaction conditions, etc.
Agreement format: Trademark licensing
agreement (concluded on March 29, 2004)
Basis for calculation of licensing fee: Cost of
application, registration, and maintenance andmanagement of trademark rights, including thefutureMonthly license fee for one category of one
trademark in one country: Registered trademark:¥8,500; Unregistered trademark: ¥1,700

3) Transactions related to outsourcing of computer-related services
The Company has concluded agreements with Takara Holdings on the outsourcing of computerrelated services and the lease of equipment.
In the event of difficulties in the renewal of these transactions, it might affect the Group’s businessstrategies and performance.
Company name
(Location)

Takara Holdings
Inc.
(Shimogyo-ku,
Kyoto)

Transaction details

Transaction amountFiscal year ended
March 31, 2024
(Millions of yen)

Outsourcing ofcomputer-related
services, leasing ofequipment, etc.

380

Transaction conditions, etc.
Agreement format: Basic agreement on
outsourcing of services and leasing ofequipment
Details of services: Accounting system
operational support, client-server system
operational support, leasing of personal
computers, purchasing of consumables, other4) Other
The Group purchases packaging materials from Takara Holdings Group companies (excluding
Takara Bio Group companies).
In the event of difficulties in the renewal of these transactions, it might affect the Group’s businessstrategies and performance.

- 29 -

4. Management analysis of financial position, operating results and cash flows(1) Overview of operating results, etc.
The Group’s financial position, operating results and cash flows (hereinafter “operating results, etc.”) for theperiod under review were as follows.
(i) General condition of operating results for current fiscal year
The outlook for the global economy in the fiscal year under review is uncertain due to the impact of
persistent inflation, the slowdown in the Chinese economy, and Russia’s invasion of Ukraine.
Under these circumstances, the Group has promoted initiatives to advance the development of fundamental
technologies for biologics and to become a global platform provider for the infrastructure of the life science
industry through the Reagents and Instruments business and the CDMO business under the six-year “LongTerm Management Plan 2026” and the three-year “Medium-Term Management Plan 2026,” both of which
end in fiscal 2026.
Net sales for the fiscal year under review decreased to ¥43,505 million (down 44.3% year on year) due to a
decline in sales of testing-related products resulting from a change in the legal status of COVID-19
infections and a slump in the life science research market affected by the overseas economic recession.
Cost of sales decreased to ¥16,597 million (down 50.3% year on year) due to the decrease in sales,
resulting in gross profit of ¥26,908 million (down 39.9% year on year). Selling, general and administrative(SG&A) expenses were ¥23,905 million (down 1.3% year on year), mainly due to a decrease in researchand development expenses, etc. Operating profit was ¥3,003 million (down 85.4% year on year).
As a result of a decrease in operating profit, ordinary profit was ¥3,405 million (down 83.5% year on year),profit before income taxes was ¥2,853 million (down 86.6% year on year), and profit attributable to ownersof parent was ¥1,480 million (down 90.8% year on year).
Information by segment has been omitted because the Group is a single segment.
(ii) Overview of financial position in current fiscal year
Total assets at the end of the fiscal year under review were ¥121,252 million, a decrease of ¥7,949 million
from the end of the previous fiscal year. This was mainly due to decreases of ¥16,430 million in cash anddeposits and of ¥1,156 million in accounts receivable - trade, despite increases of ¥8,119 million inproperty, plant and equipment, and of ¥2,020 million in other current assets.
Total liabilities at the end of the fiscal year under review were ¥9,467 million, a decrease of ¥7,280 million
from the end of the previous fiscal year. This was mainly due to decreases of ¥3,323 million in other ofcurrent liabilities, ¥2,486 million in accounts payable-other and ¥779 million in notes and accounts
payable-trade.
Total net assets at the end of the fiscal year under review were ¥111,784 million, a decrease of ¥669 million
from the end of previous period. This was mainly due to a decrease of ¥3,576 million in retained earnings,
despite an increase of ¥2,867 million in foreign currency translation adjustment due to the depreciation of
the yen.
(iii) Current cash flows in the current fiscal year
Net cash provided by operating activities amounted to ¥1,711 million, a decrease of ¥35,185 million fromthe previous fiscal year. This was mainly due to cash inflow from depreciation of ¥4,279 million, profit
before income taxes of ¥2,853 million, a decrease of ¥1,501 million in trade receivables, and cash outflow
of ¥3,439 million from a decrease in accrued consumption taxes, ¥2,359 million from income taxes paid,and ¥928 million from a decrease in trade payables.
Net cash used in investing activities was ¥13,043 million, an increase of ¥6,349 million from the previous
fiscal year. This was mainly due to proceeds from withdrawal of time deposits of ¥2,937 million, purchaseof property, plant and equipment and intangible assets of ¥12,778 million, and payments into time depositsof ¥2,224 million.
Net cash used in financing activities amounted to ¥5,233 million, an increase of ¥1,113 million from theprevious fiscal year, mainly due to dividends paid of ¥5,052 million.
As a result of the above, the balance of cash and cash equivalents at the end of the fiscal year under review,
including the effect of exchange rate changes on cash and cash equivalents, decreased by ¥15,886 million
from the end of the previous fiscal year to ¥33,171 million.
- 30 -

(iv) Status of production, purchasing, orders received and sales
1) Production performance
Production performance by category for the fiscal year under review is as shown below.
Category
Reagents

Amount (Millions of yen)

Year-on-year change (%)

14,623(40.4)

79(33.1)

Instruments
CDMO

8,377

(1.4)

Gene therapy

1,686

13.6

24,766(28.5)

Total
Note:

Amounts are based on sales prices.

2) Purchasing performance
Purchasing performance by category for the fiscal year under review is as shown below.
Category

Amount (Millions of yen)

Year-on-year change (%)

Reagents

3,686(23.5)

Instruments

1,102(26.2)

4,788(24.2)

Total
Note:

Amounts are based on purchase prices.

3) Performance of orders received
In the CDMO business, the Group performs some made-to-order production. This information has been
omitted because the time required for production is short in most cases, and the order backlog is
negligible.
4) Sales performance
Sales performance by category for the fiscal year under review is as shown below.

Category
Reagents

Amount (Millions of yen)

Year-on-year change (%)

31,961(51.5)

892(35.1)

CDMO

7,997

(2.5)

Gene therapy

2,653

0.5

43,505(44.3)

Instruments

Total

Notes: 1. Information excludes internal sales between categories.
2. Major customers are as stated in “V. Financial information, 1. Consolidated financial statements, etc., Segment
information, etc., Related information, 3. Information about each major customer.”(2) Details of analysis and considerations regarding the status of operating results etc., from the management’s
perspective
The details of recognition as well as analysis and considerations regarding the status of operating results, etc.
of the Group, from the management’s perspective are as follows.
Please note that matters concerning the future in this article were determined as of the end of the fiscal year
under review.
(i) Significant accounting estimates and assumptions used in such estimates
Of the accounting estimates used in the preparation of the consolidated financial statements and theassumptions used in such estimates, significant items are described in “V. Financial information, 1.
Consolidated financial statements, etc., (1) Consolidated financial statements, Notes to consolidated financial
statements, Significant matters for preparing consolidated financial statements” and “V. Financial
information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements, Notes toconsolidated financial statements, Significant accounting estimates.”- 31 -

(ii) Awareness and details of analysis and considerations regarding the status of operating results, etc. in thefiscal year under review
1) Operating results, etc. in the fiscal year under review
The Group’s operating results, etc. in the fiscal year under review were as follows with sales and profit
decreasing. Net sales were ¥43,505 million (down 44.3% year on year), operating profit was ¥3,003
million (down 85.4% year on year), ordinary profit was ¥3,405 million (down 83.5% year on year) andprofit attributable to owners of parent was ¥1,480 million (down 90.8% year on year).
For an overview of operating results, etc., please refer to “II. Overview of business, 4. Management
analysis of financial position, operating results and cash flows, (1) Overview of operating results, etc.”
2) Factors that have a significant impact on operating results
Factors that may have a significant impact on the Group’s operating results are described in “II. Overview
of business, 3. Business risks.”3) Capital resources and liquidity of funds
As an R&D-oriented company, the Group actively invests in R&D and also plans to make strategic
investments (capital investment, M&A investment, etc.) for sustainable growth in the future as necessary,and we therefore believe it is necessary to enhance internal reserves and secure sufficient liquidity on
hand to meet these capital needs.
The balance of cash and cash equivalents at the end of the current fiscal year was ¥33,171 million, and theCompany believes that it has maintained sufficient liquidity on hand.
The Group believes that its current sufficient liquidity on hand and cash flows from operating activities
will enable it to meet future capital needs while maintaining financial soundness.
4) Objective indicators for judging the achievement of management policies, strategies, and targets
Objective indicators for judging the achievement of management policies, strategies, and targets are as
described in “II. Overview of business, 1. Management policy, management environment, issues toaddress, etc., (3) Objective indicators, etc., for determining the state of achievement of managementtargets.”- 32 -

5. Important contracts for operation
The following is a summary of contracts that are considered important for the Group’s business operation.
Construction and other subcontracting agreements
Name of contracting
company

Name ofcounterparty

Takara Bio Inc. (theCompany)

JGC JAPAN
CORPORATION

Date of agreement
August 3, 2023

Contractual terms

Scheduledcompletion

Construction of Center for Geneand Cell Processing III

2027

6. Research and development activities(1) Research activities
Research and development expenses for the entire Group during the current fiscal year totaled ¥8,324
million, and the details of research and other activities in each business segment are as follows.
(i)

Reagents and Instruments
In this business, we are advancing the development of reagents and instruments, etc. for genetic
and cell engineering research. We are also advancing development to increase convenience bysystematizing reagents and instruments and other developments.
In the current fiscal year, we developed a “series of PCR reagents for detecting pathogenic genesthat cause infectious diseases,” the “Easy Direct series of real-time PCR reagents for direct
detection that does not require nucleic acid purification,” “reagents that enable rapid detection ofgenes by the isothermal nucleic acid amplification method,” a “fully synthetic medium for largescale production of adeno-associated virus vectors,” and a “new model of single-cell analyzer.”(ii) CDMO
In this business, we are focusing on research and development on the CDMO contract services,which are a business to support the development and manufacture of regenerative medicine/geneand cell therapy, etc.
In the current fiscal year, we proceeded with research and development related to cell processing
and improving production efficiency and mass production of viral vectors, and menu development
related to new genetic analysis and inspection-related contract services, such as “Methods to
produce CAR-T cells with high killing effect on cancer cells in a short time (Spo-TTM method),”“Highly sensitive spatial multi-omics analysis at the single cell/subcellular level,” and so on.
(iii) Gene therapy
In this business, we are engaged in the application development of the highly efficient gene transfer
technology RetroNectin® method and the siTCR® technology as well as the development andcommercialization of fundamental biologics development technologies.
In the current fiscal year, we proceeded with the development of brain-tropic adeno-associated viral
vectors (CereAAV™) and inner ear-tropic adeno-associated viral vectors (SonuAAVTM), as well as
clinical trials in Canada for CD19-JAK/STAT-CAR gene therapy (code: TBI-2001), a nextgeneration CAR gene therapy method, and preparation for application for marketing authorizationof NY-ESO-1・ siTCR® gene therapy (code: TBI-1301). Moreover, we worked on the developmentof ancillary materials, etc. needed to develop and manufacture mRNA vaccine.
In addition, we are also pursuing cross-business R&D that cannot be categorized into the abovebusinesses. The Group aims to perform strategic R&D by taking advantage of the interaction andfeedback effects of each research and development project.
(2) Intellectual property rights
In the biotechnology-related industry, where the success or failure of research and development isdirectly linked to the success or failure of business development, the Group protects its technologies withpatents in order to exclude competitors. In addition, in conducting R&D, our first priority is to apply forand obtain patent rights, and we also intend to acquire or license patents from other parties as necessary.
Below are patents related to siTCR®, JAK/STAT-CAR and CereAAV™, which are of particularimportance to each of our businesses.
- 33 -

(i)siTCR®
Title of invention: Method for specific gene expression

Note:

Patent holder

Patent No.

Registration date

Country of application

The Company/
Mie University

5271901

May 17, 2013Japan

The Company/
Mie University

5828861

October 30, 2015

Japan

The Company/
Mie University

2172547

January 6, 2016

Europe (5 countries) (Note)

The Company/
Mie University

3031916

June 7, 2017

Europe (5 countries) (Note)

The Company/
Mie University

9051391

June 9, 2015U.S.

The Company/
Mie University

9296807

March 29, 2016U.S.

The Company/
Mie University

ZL200880102998.9

June 19, 2013

China

The Company/
Mie University

1363928

February 11, 2014

South Korea

The Company/
Mie University

1225068

July 13, 2018

Hong Kong

The five European countries are Germany, France, the United Kingdom, Italy, and Sweden.

(ii) JAK/STAT-CAR
Title of invention: Chimeric antigen receptor
Patent holder

Patent No.

Registration date

Country of application

The Company/
University Health Network

6846352

March 3, 2021

Japan

The Company/
University Health Network

3256496

December 30, 2020

Europe (8 countries) (Note)

The Company/
University Health Network

10336810

July 2, 2019U.S.

The Company/
University Health Network

10822392

November 3, 2020U.S.

The Company/
University Health Network

2974998

April 26, 2022

CanadaThe Company/
University Health Network

2607152

November 23, 2023

South Korea

Note:

The eight European countries are Germany, France, the United Kingdom, Italy, Sweden, the Netherlands,
Switzerland, and Spain.

(iii) Cere-AAV™
Title of invention: Brain-tropic AAV mutant
Patent holder
The Company

Patent No.
2809389

Registration date
December 11, 2023

- 34 -Country of application
RussiaIII. Information about facilities
1. Overview of capital investments, etc.
Capital investments during the current fiscal year were made to increase and maintain production capacity andresearch and development facilities in the businesses of Reagents, Instruments, CDMO and Gene therapy,
totaling ¥10,960 million, including those recorded under intangible assets and construction in progress.
Major capital expenditures included ¥7,618 million for construction of dual-use manufacturing facilities forthe vaccine and CDMO businesses of the Reporting company and ¥988 million for construction related to cellprocessing facilities.
2. Major facilities(1) Reporting company
As of March 31, 2024
Carrying amount (Millions of yen)

Name ofoffice(Location)

Facilities

Head
office(Kusatsu,
Shiga)

Manufacturing
facilities for reagents,
etc., analysis
facilities for contract
research, R&D
facilities, and otherfacilities

10,4391,530

Kusatsu
Office(Kusatsu,
Shiga)

Training facilities
and other facilities

444

10

Buildings
andstructures

Machinery,
Tools,
Land
equipment
furniture(area (m2))
and vehicles and fixtures

Leasedassets

Total

Number of
employees(Persons)

2,877

3,352
[46,886]525

18,726

774

261

2,159
[14,881]

–

2,876

–

(2) Overseas subsidiaries
As of March 31, 2024
Carrying amount (Millions of yen)Company
nameName ofoffice(Location)

Facilities

Takara Bio
USA, Inc.

Head
office, etc.
(San Jose,
U.S., etc.)

Manufacturing
facilities forreagents, etc.,
R&D facilities,
and other
facilities

TakaraBiotechnology (Dalian)Co., Ltd.

Head
office(Dalian,
Liaoning,
China)

Manufacturing
facilities forreagents, etc.,
R&D facilities,
and other
facilities

Notes:

1.
2.
3.

Buildings
andstructures

Machinery, Tools,
equipment furniture
Land
and
and
(area (m2))
vehiclesfixtures

Other

Total

Number of
employees(Persons)

418

3,314
[30,756]–

11,888

243

237

[–]
–
[39,909]
–

206

2,043

509

7,827

327

603

995

The figures in [ ] in the “Land” column indicate the leased area and annual lease amount not included in thegiven number.
“Other” in the carrying amount represents right-of-use assets.
The carrying amount is the amount after impairment losses.

- 35 -

3. Planned additions, retirements, etc. of facilities(1) Planned additions, etc. of important facilities

Company
nameReportingcompany

Name ofoffice(Location)

Facilities

Head office(Kusatsu,
Shiga)

Dual-use
manufacturing
facilities for
vaccine-relate
work andCDMO
business, etc.

Amount to invest(Millions of yen)TotalamountAmountpaid

34,640

7,026

FinancingmethodOwn
funds
Subsidies

As of March 31, 2024
Expected month of
Ability tostart and completion
increase after
Completio
completion
StartnJune 2023 June 2027

Note: The ability to increase after completion is omitted because reasonable calculation is difficult.

(2) Planned retirement, etc. of important facilities
Not applicable.

- 36 -–

IV. Information about reporting company
1. Information about shares, etc.
(1) Total number of shares, etc.
(i)

Total number of shares
Class

Total number of authorized shares (Shares)

Common shares

400,000,000
Total

400,000,000(ii) Issued shares
Number of issued shares asof the end of the fiscal year
(Shares)(March 31, 2024)

Class

Number of issued shares as Name of listed financial instrumentsof the date of submission
exchange or registered and(Shares)authorized financial instruments(June 27, 2024)
business association

Commonshares120,415,600

Tokyo Stock Exchange, Inc.
120,415,600
Prime Market

Total

120,415,600

120,415,600

Details
Number ofshares per
share unit
100 shares––(2) Status of share acquisition rights(i)

Details of stock option plan
Not applicable.

(ii) Details of rights plan
Not applicable.
(iii) Status of other share acquisition rights
Not applicable.
(3) Status of exercise of bonds with share acquisition rights with exercise price revision clause, etc.
Not applicable.
(4) Changes in total number of shares issued, issued capital, etc.

Date

April 1, 2013
to March 31,
2014 (Note)
Note:

Increase(decrease) in
total number ofshares issued(Shares)

Balance of total
number ofshares issued(Shares)

Increase(decrease) inissued capital(Millions ofyen)

Balance ofissued capital(Millions ofyen)

840,000

120,415,600

210

14,965The above amounts are due to the exercise of share subscription rights.

- 37 -

Increase(decrease) inlegal capitalsurplus(Millions of
yen)
210

Balance of legal
capital surplus(Millions ofyen)

32,893

(5) Shareholding by shareholder category
As of March 31, 2024
Shareholding status (Number of shares per unit: 100 shares)
Category

Financial
Foreign investors
Public Financial instruments
Other
Individuals,
sector institutions business corporations Companies,
etc.
Individuals
operators
etc.

Total

Shares lessthan oneunit(Shares)Number ofshareholders

–

20

40

223

174

69

41,94542,471–

Number ofshares held
(Units)–107,338

16,425742,935

80,183

462

256,409 1,203,752

40,400Shareholding
ratio (%)

–

8.92

1.36

61.72

6.66

0.04

- 38 -

21.30

100.00–(6) Major shareholders
As of March 31, 2024

Name

Takara Holdings Inc.

Address

Ratio of shares held to
Number of shares held total number of shares(Hundreds of shares)
issued (excluding
treasury shares) (%)

20 Naginataboko-cho, Shijo-doriKarasuma Higashi-iru, Shimogyoku, Kyoto
1-8-1 Akasaka, Minato-ku, Tokyo733,500

60.91

63,569

5.28

Custody Bank of Japan, Ltd.
(Trust Account)

1-8-12 Harumi, Chuo-ku, Tokyo

21,1891.76

JP MORGAN CHASE BANK
385781(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)STATE STREET BANK WEST
CLIENT-TREATY 505234(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)STATE STREET BANK AND
TRUST COMPANY 505001(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)The Bank of Kyoto, Ltd.

25 BANK STREET, CANARY
WHARF, LONDON, E14 5JP,
UNITED KINGDOM(2-15-1 Konan, Minato-ku, Tokyo)

6,762

0.56

1776 HERITAGE DRIVE,NORTH QUINCY, MA 02171,
U.S.A.
(2-15-1 Konan, Minato-ku, Tokyo)

6,522

0.54

P.O. BOX 351 BOSTONMASSACHUSETTS 02101 U.S.A.
(2-15-1 Konan, Minato-ku, Tokyo)

5,427

0.45

5,000

0.42

Takara Bio Employees’
Shareholding Association

700 Yakushimae-cho, Matsubaraagaru, Karasuma-dori, Shimogyoku, Kyoto
7-4-38, Nojihigashi, Kusatsu-shi,
Shiga

4,343

0.36

Hiroo Amano

Nishinari-ku, Osaka-shi, Osaka

3,988

0.33

KIA FUND F149
(Standing proxy: Tokyo Branch,
Citibank, N.A.)MINISTRIES COMPLEX, BLK 3,
PO BOX 64, SAFAT 13001,
KUWAIT
6-27-30, Shinjuku, Shinjuku-ku,
Tokyo

3,887

0.32

Total

–

854,188

70.93

The Master Trust Bank of Japan,
Ltd. (Trust Account)

Note:

Ratio of shares held to total number of shares issued (excluding treasury stock) (%) is rounded off to the second
decimal place.

- 39 -

(7) Status of voting rights(i)Issued shares
As of March 31, 2024
Category

Number of shares

Number of voting
rights

Details

Non-voting shares

–

–

–

Shares with restricted voting
rights (treasury shares, etc.)

–

–

–

Shares with restricted voting
rights (other)

–

–

–

Shares with full voting rights(treasury shares, etc.)

–

–

–

1,203,752–

Shares with full voting rights(other)Common shares

120,375,200

Shares less than one unit

Common shares

40,400––120,415,600––

1,203,752–

Total number of shares issued
Voting rights of allshareholders–(ii) Treasury shares, etc.
Number ofshares held in
the name ofothersTotal numberof shares held

As of March 31, 2024
Ratio of shares
held to total
number of sharesissued (%)

Name or title ofowner

Address of owner

Proprietary
ownership
number ofshares

–

–

–

–

–

–

Total

–

–

–

–

–

2. Status of acquisition of treasury shares, etc.
Class of shares, etc.: Not applicable.
(1) Status of acquisition by resolution of the General Meeting of Shareholders
Not applicable.
(2) Status of acquisition by resolution of the Board of Directors
Not applicable.
(3) Acquisition of shares not based on resolutions of the General Meeting of Shareholders or the Board of
Directors
Not applicable.
(4) Status of disposal and holding of acquired treasury shares
Not applicable.

- 40 -

3. Dividend policy
The Company views profit returns to shareholders as one of its important management issues, and as a basic
policy, returns are provided after comprehensive consideration of a range of factors that include businessperformance, financial position, and enhancement of internal reserve for aggressive research and development
activities. Specifically, the Company intends to pay dividends of surplus at a rate of approximately 35% of
estimated profit calculated without regard to extraordinary loss or income in the consolidated financial
statements.
The Company’s policy is to pay dividends of surplus twice a year in the form of interim dividends and yearend dividends. The decision-making bodies for these dividends are the General Meeting of Shareholders for
year-end dividends and the Board of Directors for interim dividends. The Company’s Articles ofIncorporation stipulate that interim dividends may be paid by a resolution of the Board of Directors with arecord date of September 30 of each year.
According to the above policy and in order to improve capital efficiency, the Company has decided to pay a
year-end dividend of 17.00 yen per share for the fiscal year ended March 31, 2024 (approximately 87% of
estimated profit), as announced on May 11, 2023.
Dividends of surplus for the current fiscal year were as follows.
Resolution date

Total amount of dividends(Millions of yen)

Resolution at the Annual General Meeting of
Shareholders held on June 21, 2024

2,047

Dividends per share (Yen)
17.00

Internal reserves will be effectively used to strengthen the Company’s financial position and to invest in R&D
and capital expenditures, etc. of the Group companies for future development.

- 41 -

4. Status of corporate governance, etc.
(1) Overview of corporate governance(i)

Basic policy regarding corporate governance
Guided by our corporate philosophy of “contributing to the health of humankind through thedevelopment of revolutionary biotechnologies such as gene therapy,” the Group is working toreform its business structure to overcome the Corona cliff (after-COVID-19 crisis performance
cliff) and achieve remarkable growth, and to promote the development of fundamental biologics
development technologies through the continuous growth of our Reagents and Instruments businessand dramatic growth in the CDMO business. We will develop a business strategy to be a global
platformer that plays key role in the infrastructure of the life science industry. In addition, throughpractice of our corporate philosophy, we will create new value and contribute to the realization of asustainable society.

(ii) Summary of corporate governance system and reasons for adopting the system
1)

Summary of the system of corporate governance
The Company has adopted a corporate auditor system, and in addition to the General Meetingof Shareholders and the Board of Directors, the Company has an Audit & Supervisory Boardand an Accounting Auditor as its corporate bodies. In addition, the Company has establishedthe Nomination and Compensation Committee and the Special Committee on a voluntarybasis as advisory bodies to the Board of Directors.

a) Directors and Board of Directors
The Board of Directors consists of nine members, including three external Directors. In
addition to regular monthly Board of Directors meetings, extraordinary Board of Directors
meetings are held as necessary to make decisions on basic management policies, matters
stipulated by law, and important management matters, as well as to supervise the execution ofduties by Directors.
In addition, by introducing an executive officer system, the Company aims to separate themanagement oversight function of the Board of Directors from the business executionfunction of the Executive Officers (nine Executive Officers excluding those concurrently
serving as Directors), and Executive Officers also attend the Board of Directors meetings as
observers to report on the status of execution of duties, thereby strengthening themanagement’s ability to make prompt decisions.
The Company held Board of Directors meeting 12 times during the current fiscal year and thestatus of attendance of each Board of Directors members are as follows.
< Composition of Directors >Title and position

Name

Number of meetings attended

Representative Director andPresident

Koichi Nakao

100% (12/12)

Director and Vice President

Junichi Mineno

100% (12/12)

Senior Managing Director

Yoh Hamaoka

100% (12/12)

Senior Managing Director

Tsuyoshi Miyamura

100% (12/12)

Senior Managing Director

Katsuhiko Kusakabe

100% (10/10)

Director

Mutsumi Kimura

100% (12/12)

Director (External Director)

Nobuko Kawashima

100% (12/12)

Director (External Director)

Kazuko Kimura

100% (12/12)

Director (External Director)

Noriomi Matsumura

100% (12/12)

Notes:

1. Masanobu Kimura, who retired at the close of the 21st Annual General Meeting of Shareholders
because of the expiration of term of office, attended all of the Board of Directors meetings, held
two times during his administration.

- 42 -

2. Katsuhiko Kusakabe, who was newly appointed at the 21st Annual General Meeting of
Shareholders, attended all of the Board of Directors meetings, held 10 times during his
administration.

In the current fiscal year, in addition to matters stipulated by laws and regulations or the
Articles of Incorporation, and examination agenda necessary for the management of theGroup, the Board of Directors reviewed major investment cases from the perspective ofsustainable growth and medium- to long-term enhancement of corporate value, and from theperspective of protecting the interests of minority shareholders, and confirmed that there were
no problems regarding the rationality of transactions with related parties, including the parent
company, and the appropriateness of transaction terms.
b) Audit & Supervisory Board Members and Audit & Supervisory Board
The Audit & Supervisory Board consists of five members, including three external Audit &Supervisory Board Members. In accordance with the audit policy and audit plan formulatedby the Audit & Supervisory Board, the Audit & Supervisory Board Members attend meetingsof the Board of Directors and other important meetings, receive business reports from
Directors and others, inspect important documents, and investigate the status of operations
and assets in order to audit the execution of duties by Directors.
< Composition of the Audit & Supervisory Board Members >Title and position

Name

Audit & Supervisory Board Member

Akihiko Kita

Audit & Supervisory Board Member

Masahide Tamaki

Audit & Supervisory Board Member(External Audit & Supervisory Board
Member)Kunihiko Kamada

Audit & Supervisory Board Member(External Audit & Supervisory Board
Member)Yasuo Himeiwa

Audit & Supervisory Board Member(External Audit & Supervisory Board
Member)Masaaki Makikawa

The status of activities of Audit & Supervisory Board Members and Audit & Supervisory
Board is as written at “(3) Status of audits, (i) Status of audits by Audit & Supervisory Board
Members”c) Nomination and Compensation Committee
The Company has established the Nomination and Compensation Committee consisting ofIndependent External Directors under the Board of Directors with the aim of securing theindependence and objectivity on the functions of the Board of Directors and providing theadequate involvement.
The Company held the Nomination and Compensation Committee two times during thecurrent fiscal year and the status of attendance by committee member is as below.
< Composition of the Nomination and Compensation Committee >
Title

Name

Number of meetings attended

Chairperson (Independent External
Director)

Nobuko Kawashima

100% (2/2)- 43 -

Committee Member (Independent
External Director)

Kazuko Kimura

100% (2/2)

Committee Member (Independent
External Director)

Noriomi Matsumura

100% (2/2)

Committee Member (Representative
Director and President)

Koichi Nakao

100% (2/2)

Committee Member (Senior
Managing Director)

Yoh Hamaoka

100% (2/2)[Nomination and Compensation Committee examination agenda]
・ Matters regarding candidates for Director proposed for General Meeting of Shareholders
・ Matters regarding revision of the remuneration limits for Directors proposed at General
Meeting of Shareholders
・ Matters regarding remuneration by Director

In the current fiscal year, the Nomination and Compensation Committee had reviewed thematters regarding the proposal of candidates for Director and remuneration by Director for the
General Meeting of Shareholders from the point of view of sustainable growth andenhancement of medium- and long- term corporate value.
d) Special Committee
The Company has established the Special Committee which is composed of three or more
independent members including external officers under the Board of Directors with the aim ofprotecting the interests of minority shareholders and providing appropriate involvement.
< Composition of the Special Committee >
Title

Name

Committee Member (Independent External
Director)

Nobuko Kawashima

Committee Member (Independent External
Director)

Kazuko Kimura

Committee Member (Independent External
Director)

Noriomi Matsumura

Committee Member (Independent External
Audit & Supervisory Board Member)

Kunihiko Kamada

Committee Member (Independent External
Audit & Supervisory Board Member)

Yasuo Himeiwa

Committee Member (Independent External
Audit & Supervisory Board Member)

Masaaki Makikawa[Special Committee examination agenda]
・ Matters regarding important transactions and activities that cause conflicts of interest with
the Company’s parent company or the subsidiaries and our minority shareholders

The Company did not hold the Special Committee during the current fiscal year, because theCompany had no examination agenda.
e) Accounting Auditor
The Company has entered into an audit contract with Deloitte Touche Tohmatsu LLC andundergoes audits under the Companies Act and the Financial Instruments and Exchange Act.
- 44 -

[Schematic diagram of the Company’s corporate governance and internal control system]
General Meeting of Shareholders
Appointment
and dismissal

Appointment
and dismissal

Appointment
and dismissal

ReportReportBoard of Directors

Audit
Selection,
dismissal
and supervision

Accounting Auditor
Audit & Supervisory
Board
Audit

Consultation

Cooperation

Audit
ReportNomination andCompensation
Committee

Advice andrecommendations
Consultation

Appointment
and dismissal

Special Committee

Advice andrecommendations
Cooperation

Representative Director andPresident
Instructi
ons

ReportExecutive Officer

ReportReportInstructions

Compliance Committee
Internal Control Committee
Quality Control Committee
Sustainability Promotion
Committee

Supervision
Instructions

Cooperation

Instructions

ReportInternal Audit Department
Audit

Divisions and Group companies
2)

Reasons for adoption of the corporate governance system
The Company is a company with an Audit & Supervisory Board. As a research anddevelopment-oriented company with strong expertise, the Directors who are familiar with ourbusiness make decisions flexibly and supervise business execution with a clear sense ofownership and speed, and highly independent external Directors who have experience andknowledge of our business also work with the Audit & Supervisory Board to supervise
business execution, and we believe that the current system is optimal for the Company.

(iii) Other matters regarding corporate governance1)

Status of internal control system, risk management, and systems to ensure appropriateness ofoperations of subsidiaries
In accordance with Article 362, paragraph 5 of the Companies Act, the Company has adopted
a resolution at a meeting of the Board of Directors to establish a system to ensure theappropriateness of business operations, and based on this resolution, the Company has
established the following systems.
- 45-

a)

System to ensure that the execution of duties by Directors and employees complies withlaws and regulations and the Articles of Incorporation, and system to ensure theappropriateness of operations of the corporate group consisting of the Company and its
parent company and subsidiaries
i)

The Takara Bio Compliance Committee, chaired by the President & CEO, shall beestablished and operated as an organization that oversees the compliance activitiesof the entire Group.

ii)

The committee ensures that all officers and employees of the Group comply with
the Takara Group Compliance Action Guidelines established by the Risk
Compliance Committee (to which the Company dispatches members and working
members) of Takara Holdings Inc., the parent company of the Company, which isthe supervising organization of the committee. The committee shall clearly state
the guidelines for legal and social ethics that each and every officer and employeeof the Group shall comply with, and shall educate officers and employees of theGroup through group training, daily guidance at workplaces, etc.

iii) The Company will take a firm stand against antisocial forces by complying withthese guidelines, and shall not have any relationship with such forces.
iv)

The Takara Group Helpline has been established and operated within the General
Affairs Department of Takara Holdings, Inc. and by a third-party organization
outside Takara Holdings, Inc. to serve as a contact point for reporting when an
officer or employee discovers a legal violation or misconduct in the course ofGroup operations that is impossible or difficult to resolve or prevent throughordinary means and methods in the course of business operations. The Company
prohibits the disadvantageous treatment of whistleblowers for the reason of theirreporting and makes this known to the entire Group.

v)

Internal audits are conducted in accordance with the Internal Audit Regulations,and necessary measures shall be taken based on the results of such internal audits
in order to ensure the proper execution of duties. The department in charge ofinternal audits shall be an independent organization to ensure sufficient checks andbalances against the audited departments, etc.

vi)

The Group shall establish, evaluate, and improve company-wide systems to ensure
the reliability of financial reporting in compliance with relevant laws andregulations and the listing rules stipulated by the Tokyo Stock Exchange, and willcontinue to enhance these systems.

vii) With respect to the relationship between the Company and its parent company,
Takara Holdings, Inc., the Company is subject to the Group Company
Management Rules established by Takara Holdings from the perspective ofconsolidated business management as a holding company and operated for the
purpose of maximizing the corporate value of the entire Takara Holdings Group
while maintaining the uniqueness and independence of each group company
including the Company, and reports regularly to Takara Holdings on matters
resolved at the Board of Directors of the Company and the status of businessactivities of the Company and its subsidiaries.
viii) With respect to the relationship between the Company and its subsidiaries, while
maintaining the uniqueness and independence of each subsidiary, the Company
shall receive regular reports on business activities, and, in principle, hold priordiscussions on important matters. In addition, the Company’s Audit & Supervisory
Board Members and the department in charge of internal audits shall cooperatewith each other to conduct regular on-site inspections of subsidiaries and conduct
audits from the perspective of ensuring appropriate business execution.
b)

System for storing and managing information on the execution of duties by the Directors
The Company shall establish internal rules concerning guidelines for the preparation,
retention period, and management system (including information security system) of
records of the execution of duties, such as minutes of General Meetings of Shareholders,
minutes of Board of Directors meetings, approval documents (including those approved- 46 -

by the President), and other approval documents, so that the execution of duties byDirectors and employees can be appropriately confirmed after the fact.
c)d)Regulations and other systems for managing the risk of lossi)

The Takara Bio Compliance Committee oversees the overall risk management of
the Group, and under the supervision of the committee, each responsible
department shall engage in activities to prevent and mitigate risks in legal andsocial ethics, product and merchandise safety and quality, health and safety, andother risks surrounding the Group.

ii)

In the event of an emergency situation, an emergency task force consisting of
Executive Officers, headed by the President, shall be established as necessary todeal with the situation in accordance with the business continuity plan.

System to ensure the efficient execution of duties by Directorsi)

As the basis of the system to ensure the efficient execution of duties by Directors,
the Board of Directors shall hold a regular meeting once a month, andextraordinary meetings as necessary.

ii)

To clarify the internal chain of command and segregation of duties, the Company
has established the Rules for Authority and Rules for Dividing Roles andResponsibilities, and establish a system that enables appropriate and prompt
decision-making and execution by Directors and employees.

iii) Under the supervision and guidance of the Board of Directors or each Director,
each responsible department or, if necessary, a cross-divisional project team shallbe organized to continuously work on streamlining, speeding up, andcomputerizing operations to ensure efficient management.

e)

iv)

Internal audits shall be conducted from the perspective of efficiency, and necessary
measures shall be taken based on the results of such internal audits to ensure
efficiency in the execution of duties.

v)

The Company’s subsidiaries shall also establish a management system similar tothat of the Company.

Matters regarding employees who are requested by Audit & Supervisory Board
Members to assist them in the execution of their duties, and matters related to the
independence of such employees from Directors
In the event that the Audit & Supervisory Board Members require the establishment of
employees to assist them in their duties, the Company shall establish a system to ensure
the independence of such employees from Directors with respect to the chain ofcommand, position, treatment of such employees, etc., and assign such employees toassist the Audit & Supervisory Board Members.

f)System for reporting by Directors and employees to Audit & Supervisory Board
Members and other systems to ensure that audits by Audit & Supervisory Board
Members are conducted effectivelyi)

In order to gain an understanding of the process of important decision-making andthe status of business execution, Audit & Supervisory Board Members have theauthority to attend meetings of the Board of Directors and other important
meetings, inspect the minutes of Board of Directors meetings, approval documents(including those approved by the President) and other important documents related
to business execution, and request explanations from Directors and employees asnecessary. In addition, in order to conduct effective and efficient audits, thedepartment in charge of internal audits shall maintain close cooperation with the
Audit & Supervisory Board Members.

ii)

If a Director discovers a fact that may cause significant damage to the Company,
he or she shall report it to the Audit & Supervisory Board Members in accordancewith laws and regulations. When a Director of a subsidiary of the Company
discovers a fact that may cause significant damage to the subsidiary, he or she shall- 47 -

report it to the Company’s Audit & Supervisory Board Members through thedepartment in charge of managing the subsidiary.
iii) The Directors and Audit & Supervisory Board Members of the Company shallensure that no person who makes such a report shall be treated disadvantageously
by reason of such a report.
g)Matters regarding the policy for handling expenses or liabilities incurred for executing
duties by Audit & Supervisory Board Members
When an Audit & Supervisory Board Member requests advance payment or
reimbursement of expenses incurred in the performance of his or her duties, theCompany shall promptly dispose of such expenses or liabilities, unless such expenses or
liabilities are deemed not necessary for the performance of the Audit & Supervisory
Board Member’s duties.

2)

Overview of limited liability agreements
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act, the Company
stipulates in its Articles of Incorporation that the liability for damages stipulated in Article
423, paragraph 1 of the Companies Act may be limited. Based on these provisions, threeexternal Directors, Nobuko Kawashima, Kazuko Kimura, and Noriomi Matsumura, and threeexternal Audit & Supervisory Board Members, Kunihiko Kamada, Yasuo Himeiwa, andMasaaki Makikawa, have entered into such limited liability agreement with the Company.
Pursuant to this agreement, the defined maximum amount of liability for damages is theminimum liability amount provided for under Article 425, paragraph 1 of the same Act.

3)

Overview of a directors and officers liability insurance policy
The Company has entered into a directors and officers liability insurance policy with aninsurance company as stipulated in Article 430-3, paragraph 1 of the Companies Act, which
covers damages and litigation expenses incurred by the insured due to claims for damages
arising from the insured’s actions as a Director or officer.
Directors, Audit & Supervisory Board Members, and Executive Officers of the Company are
insured under the insurance policy, and the Company bears the total amount of premiums for
all insureds.

4)

Number of Directors and resolution requirements for election of Directors
The Company’s Articles of Incorporation stipulate that the Company shall have no more than
10 Directors. The Company states in it Articles of Incorporation that, pursuant to Article 341
of the Companies Act, resolutions for the election of Directors shall be adopted by a majorityof the votes of shareholders present at a General Meeting of Shareholders where shareholders
holding one-third or more of the voting rights of shareholders entitled to exercise their voting
rights are present. The Company also states in its Articles of Incorporation that cumulative
voting shall not be used for the election of Directors.

5)

Matters normally requiring adoption of a resolution by the General Meeting of Shareholders,which may be decided by the Board of Directors
i)

Decision-making body for acquisition of treasury shares
The Company’s Articles of Incorporation stipulate that the Company may acquire
treasury shares through market transactions, etc. by resolution of the Board of Directors
pursuant to Article 165, paragraph 2 of the Companies Act. The purpose of this is toenable the execution of flexible capital policies in response to changes in the businessenvironment.

ii)

Exemption of Directors and Audit & Supervisory Board Members from liability
Pursuant to Article 426, paragraph 1 of the Companies Act, the Company’s Articles ofIncorporation stipulate that the Company may, by resolution of the Board of Directors,
exempt Directors and Audit & Supervisory Board Members (including former Directors
and Audit & Supervisory Board Members) from liability for damages due to negligenceof their duties to the extent permitted by law. This is intended to ensure that Directors
and Audit & Supervisory Board Members can fully fulfill their expected roles.
- 48 -

iii) Organization for determining interim dividends
Pursuant to Article 454, paragraph 5 of the Companies Act, the Company’s Articles ofIncorporation stipulate that the Company may, by resolution of the Board of Directors,
pay dividends from surplus (interim dividends) to shareholders or registered sharepledgees whose names appear or are recorded in the final shareholders’ register as of
September 30 of each year. The purpose of this provision is to return profits toshareholders or registered share pledgees in a timely manner.
6)

Requirements for the adoption of special resolutions by the General Meeting of Shareholders
The Company states in its Articles of Incorporation that the adoption of a special resolution
based on Article 309, paragraph 2 of the Companies Act shall require that at least one-third of
the shareholders entitled to execute voting rights be present, and that an affirmative vote becast by at least two-thirds of such shareholders present. The purpose of this provision is tobetter ensure that a quorum is present.

(2) Information about officers(i)Officers
Male: 12, Female: 2 (Percentage of female officers: 14.3%)

Title and position

Name

Date of birth

Career summary

Apr. 1985
Apr. 2002
June 2003

Representative
Director, President& CEO

Koichi
Nakao

June 2004
Apr. 2006
June 2007
May 2009
June 16, 1962
June 2009
June 2015
Apr. 2020
Apr. 2021
June 2024
Apr. 1984
Apr. 2004
June 2009

Director and Vice
President
Executive Vice
President

Junichi
MinenoAugust 13, 1960

Apr. 2011
June 2012
June 2014
June 2015
July 2016
June 2019
Apr. 2020
Apr. 2022
June 2023
Apr. 2024

Senior Managing
Director
Senior Managing
Executive Officer

YohHamaoka

October 9, 1962

Apr. 1987
Feb. 2000
Apr. 2004
June 2009
Apr. 2017

Numberof shares
Term ofheld
office(Hundredsof shares)

Joined Takara Shuzo Co., Ltd.
Director of the Company
Managing Director
Executive Officer
Senior Managing Director
COO (Chief Operating Officer)
Representative Director and Vice President
President & CEO (current position)
Director and President of Takara Bio USA(Note 3)
Holdings Inc.
Director of Takara Holdings Inc.
President and Executive Officer (current position)
CEO (Chief Executive Officer) (current position)
Representative Director of Manufacturing
Technology Association of Biologics (current
position)
Senior Managing Executive Officer of Takara
Holdings Inc. (current position)
Joined Takara Shuzo Co., Ltd.
General Manager of Center for Cell and Gene
Therapy Facility of the Company
Deputy General Manager of Gene Therapy
Business Unit
General Manager of Center for Cell and Gene
Therapy Facility
Executive Officer
Senior Executive Officer
Managing Director(Note 3)
Senior Executive Officer
Co-Representative Director and Vice Chairman of
Takara Korea Biomedical Inc.
Director
Senior Managing Executive Officer
COO (Chief Operating Officer)
Executive Vice President (current position)
Director and Vice President (current position)
In charge of CDM Business (current position)
General Manager of CDM Promotion Division(current position)
Joined Japan Tobacco Inc.
Joined Takara Shuzo Co., Ltd.
Executive Officer of the Company(Note 3)
Senior Executive Officer
Deputy General Manager of Gene Therapy
Business Unit
In charge of Intellectual Property Department- 49 -

737

144

170

Title and position

Name

Date of birth

Career summary

Term ofofficeGeneral Manager of Business Development
Department
June 2018 In charge of General Affairs Department
Apr. 2019 In charge of Project Management Department
Apr. 2020 General Manager of R&D Division
Apr. 2021 CFO (Chief Financial Officer)
June 2021 Director
Senior Managing Executive Officer (current
position)
June 2023 Senior Managing Director (current position)
Apr. 2024 General Manager of Corporate Division (current
position)
Apr. 1988 Joined Takara Shuzo Co., Ltd.
Jan. 2009
General Manager of Sales Department of theCompany
June 2009 Executive Officer
June 2014 Senior Executive Officer
June 2018 Director
Dec. 2019 Chairman of Takara Biomedical Technology(Beijing) Co., Ltd. (current position)
Mar. 2021 Co-Representative Director and Chairman of
Takara Korea Biomedical Inc. (current position)
Senior Managing
Apr. 2021 CMO (Chief Marketing Officer)
Director
Tsuyoshi
October 20, 1963 Apr. 2022 Chairman of Takara Biotechnology (Dalian) Co., (Note 3)
Senior Managing Miyamura
Ltd. (current position)
Executive Officer
Senior Managing Executive Officer (current
position)
June 2023 Senior Managing Director (current position)
Apr. 2024 In charge of Reagents & Instruments Businesses(current position)
General Manager of Overseas Business Division(current position)
Director and President of Takara Bio USA
Holdings Inc. (current position)
Apr. 1986 Joined Takara Shuzo Co., Ltd.
June 2017 Executive Officer of the Company
Apr. 2020 Deputy General Manager of Manufacturing
Division
Apr.
2021
General Manager of Manufacturing Management
Senior Managing
Division
Director
KatsuhikoJune 1, 1961
(Note 3)June 2021 Senior Executive Officer
Senior Managing Kusakabe
Apr. 2023 Senior Managing Executive Officer (current
Executive Officer
position)
June 2023 Senior Managing Director (current position)
Apr. 2024 Chief Manufacturing Control Officer (CMCO)
General Manager of Administration Division(current position)
Apr. 1985 Joined Takara Shuzo Co., Ltd.
Apr. 2002 Director of the Company
June 2004 Managing Director
June 2007 Senior Managing Director
May 2009 Director and Vice President
June 2009 Representative Director and Vice President
June 2014 Director of Takara Holdings Inc., Senior Managing
Director of Takara Shuzo Co., Ltd.
June 2016 Representative Director and Vice President of
MutsumiTakara Holdings Inc.
Director
February 3, 1963
(Note 3)KimuraJune 2017 Director of Takara Shuzo Co., Ltd. (current
position)
July 2017 Representative Director and President of Takara
Shuzo International Co., Ltd.
June 2018 Representative Director and President of Takara
Holdings Inc. (current position)
Apr. 2020 Director of Takara Shuzo International Co., Ltd.
(current position)
June 2022 Director (current position)
Apr. 1986 Joined The Long-Term Credit Bank of Japan,
NobukoLimited (currently SBI Shinsei Bank, Limited)
Kawashima
Sept. 1987 Joined Dentsu Communication Institute Inc.
Director(Name asOctober 27, 1962 Sept. 1995 Research fellow at the Centre for Cultural Policy (Note 3)(External Director) shown on
Studies of the University of Warwick
the family
Apr. 1999 Full-time lecturer with the Faculty of Economics
register:at Doshisha University- 50 -

Numberof shares
held(Hundredsof shares)

135

48

515

–

Title and position

Name

Date of birth

NobukoYokoyama)

Director(External Director)

KazukoKimuraDirector
Noriomi(External Director) Matsumura

May 1, 1951

July 10, 1971

Career summary

Term ofofficeApr. 2004 Professor with the Faculty of Economics at
Doshisha University (current position)
June 2016 Director of the Company (current position)
June 2021 Outside Director of TOKAI Holdings Corporation(current position)
Apr. 1976 Safety and Environmental Health Bureau,
Ministry of Health and Welfare (currently
Ministry of Health, Labour and Welfare)Apr. 1979 Pharmaceutical Affairs Bureau, Ministry of
Health and Welfare (currently Ministry of Health,Labour and Welfare)
July 1996 Pharmaceutical Department of World HealthOrganization (on secondment)
July 1999 Organization for Pharmaceutical Safety andResearch (on secondment)
Apr. 2000 Professor of International Medical ResearchLaboratory, Institute of Medical, Pharmaceutical(Note 3)and Health Sciences, Kanazawa University
June 2013 Director (Outside Director) of Alfresa Holdings
Corporation
Sept. 2013 Representative Director of Medicines Security
Workshop (current position)
Apr. 2017 Professor Emeritus of Kanazawa University(current position)
Oct. 2017 Specially Appointed Professor of Graduate
School of Medical Sciences, National University
Corporation Kanazawa University
June 2019 Director of the Company (current position)
June 2021 Outside Director of Mitsubishi Logistics
Corporation (current position)
May 1998 Medical Staff with Department of Obstetrics andGynecology at Hyogo Prefectural Amagasaki
HospitalApr. 2000 Medical Staff with Department of Obstetrics andGynecology at Toyooka Public Hospital
Sept. 2002 Medical Staff with Department of Obstetrics andGynecology at Kyoto University Hospital
Apr. 2007 Clinical Assistant Professor with Department of
Obstetrics and Gynecology at National University
Corporation Kyoto University Hospital
Apr. 2008 Assistant Professor with Department of Obstetrics
and Gynecology at National University
Corporation Kyoto University Hospital
Dec. 2012 Lecturer with Maternal and Perinatal Care Unit at
National University Corporation Kyoto University(Note 3)
HospitalAug. 2013 Associate Professor with Department of
Gynecology and Obstetrics at National University
Corporation Kyoto University Hospital
Apr. 2017 Professor with Department of Obstetrics andGynecology of Faculty of Medicine at Kindai
University (current position)
June 2017 Vice Chairperson of Board Certification
Committee of Japan Society of Obstetrics andGynecology (current position)
Dec. 2018 Director, TR Committee Member and Chair of the
Future Planning Committee of Japanese
Gynecologic Oncology Group (current position)
June 2020 Director of the Company (current position)
July 2020 Board Member of Japan Society of Gynecologic
Oncology (current position)- 51 -

Numberof shares
held(Hundredsof shares)––Title and position

Name

Date of birth

Career summary

Apr. 1984
Apr. 2005
Audit &
Supervisory Board
MemberApr. 2011
Akihiko
Kita

September 10, 1959 Apr. 2013
Apr. 2014
June 2016
Apr. 1983
Apr. 2005

Audit &
MasahideSupervisory Board
TamakiMemberAudit &
Supervisory Board
MemberKunihiko(External Audit & Kamada
Supervisory Board
Member)February 28, 1960

Apr. 2007
June 2009
Apr. 2015
June 2016
June 2019

May 16, 1960

Apr. 1992
Mar. 1993
Apr. 2007
Jan. 2011
June 2016
Aug. 1983
Aug. 1990
Aug. 1994
Jan. 1996
Feb. 2001
Sept. 2003

Audit &
Supervisory Board
Member(External Audit &Supervisory Board
Member)July 2009
Yasuo
Himeiwa

November 5, 1953
May 2015
June 2016

June 2017
June 2020
June 2021

Term ofofficeJoined Takara Shuzo Co., Ltd.
General Manager of Manufacturing Departmentof the Company
Deputy General Manager of AgriBio Business
Unit(Note 5)General Manager of AgriBio Business Unit
Executive Officer
General Manager of Functional Foods
Department, General Manager of Kusunoki Plant
Audit & Supervisory Board Member (current
position)
Joined Takara Shuzo Co., Ltd.
General Manager of Sales Department of theCompany
Executive Officer
Deputy General Manager of Genetic Engineering(Note 5)
Research Business Unit
General Manager of AgriBio Business Unit
Senior Executive Officer
Audit & Supervisory Board Member (current
position)
Registered as an attorney (Osaka Bar Association)
Registered as a patent attorney
Part-time Lecturer at Meijo University(Note 6)
Employee of Daiichi Legal Professional
Corporation (current position)
Audit & Supervisory Board Member of theCompany (current position)
Joined Pete Marwick Mitchell Accountants(currently KPMG)
Registered as a Japanese Certified Public
Accountant
Director in charge of Europe of KPMG ProjectJapan
Employee of Century Audit Corporation(currently Ernst & Young ShinNihon LLC)
Representative Partner of Shin Nihon & Co.
(currently Ernst & Young ShinNihon LLC)
Partner of KPMG AZSA & Co. (currently KPMG
AZSA LLC)
General Manager of Osaka GJP (Global Japanese
Practice) Office, KPMG AZSA & Co. (currently(Note 6)
KPMG AZSA LLC)
Chairman of National Partners Association of
KPMG AZSA LLC
President of Himeiwa Certified Public Accountant
Office (current position)
Audit & Supervisory Board Member of theCompany (current position)
Outside Member of the Board (Member of Audit& Supervisory Committee) of Sharp Corporation(current position)
Outside director (auditing committee member) of
IDEC CORPORATION
Outside director (full-time auditing committee
member) of IDEC CORPORATION (current
position)- 52 -

Numberof shares
held(Hundredsof shares)

16

60

–

–

Title and position

Name

Audit &
Supervisory Board
Member
Masaaki(External Audit & Makikawa
Supervisory Board
Member)Term ofofficeNumberof shares
held(Hundredsof shares)

Apr. 1996 Professor with the Department of Robotics of theFaculty of Science and Engineering at
Ritsumeikan University
Apr. 2003 Head of the Liaison Office of Biwako-Kusatsu
Campus at Ritsumeikan University
Apr. 2005 Head of the Research Center for Sport and Health
Science at Ritsumeikan University
Apr. 2007 Executive Director of the Institute of Science andTechnology at Ritsumeikan University
Apr. 2011 Visiting Professor with the Graduate School of
Medicine at Osaka University (current position)
Apr. 2012 Dean of the Research Division at Ritsumeikan
University(Note 4)
Apr. 2017 Special Professor with the Faculty of Science andEngineering at Ritsumeikan University
June 2017 Audit & Supervisory Board Member of theCompany (current position)
July 2017 Special Professor with the Faculty of Science andEngineering (Assistant Director) at Ritsumeikan
University
Apr. 2021 President of Osaka Hatsushiba Trust (current
position)
Apr. 2022 Assistant Director of Ritsumeikan University
Visiting Professor of Research Organization of
Science and Technology at Ritsumeikan
University (current position)–

Date of birthJanuary 1, 1952

Career summary

Total

Notes:

1.
2.
3.
4.
5.
6.
7.

1,825

Three Directors, Nobuko Kawashima, Kazuko Kimura, and Noriomi Matsumura, are external Directors.
Three Audit & Supervisory Board Members, Kunihiko Kamada, Yasuo Himeiwa, and Masaaki Makikawa, areexternal Audit & Supervisory Board Members.
From the close of the Annual General Meeting of Shareholders held on June 21, 2024, to the close of theAnnual General Meeting of Shareholders to be held in June 2025.
From the close of the Annual General Meeting of Shareholders held June 24, 2021, to the close of the Annual
General Meeting of Shareholders to be held in June 2025.
From the close of the Annual General Meeting of Shareholders held on June 24, 2023, to the close of theAnnual General Meeting of Shareholders to be held in June 2027.
From the close of the Annual General Meeting of Shareholders held on June 21, 2024, to the close of theAnnual General Meeting of Shareholders to be held in June 2028.
The Company has introduced an executive officer system to promote further activation of the Board of
Directors and to improve management efficiency by separating the decision-making and business execution
supervision functions of the Board of Directors from the business execution functions of each department. The
Company has 14 Executive Officers, nine of whom, excluding the above five Directors who concurrently serve
as Executive Officers, are as follows.
Senior Executive Officer

General Manager of SCM Division

Kyoko Nakajima

Senior Executive Officer

General Manager of Sales Division

Akira Kodera

Senior Executive Officer

General Manager of Quality Management Division

Ikuei Nukaya

Executive Officer

Deputy General Manager of Corporate Division,
General Manager of Human Resources
Department

Noritaka Nishiwaki

Executive Officer

Deputy General Manager of Corporate Division,
General Manager of PR & IR Department

Takuya Kakemi

Executive Officer

General Manager of R&D Division

Tatsuji Enoki

Executive Officer

Deputy General Manager of CDM Promotion
Division, General Manager of Genome Analysis
Center 2

Akiyuki Sato

Executive Officer

Deputy General Manager of Overseas Business
Division

Hiroki Tomohisa

Executive Officer

Deputy General Manager of R&D Division

Maki Tanaka- 53 -

8.

Takara Shuzo Co., Ltd. changed its name to Takara Holdings Inc. on April 1, 2002.

(ii) External officers
The Company has three external Directors and three external Audit & Supervisory Board
Members.
Three external Directors, Nobuko Kawashima, Kazuko Kimura, and Noriomi Matsumura, andthree external Audit & Supervisory Board Members, Kunihiko Kamada, Yasuo Himeiwa, andMasaaki Makikawa, have no personal, capital, or business relationship with the Company or any
other relationship that could cause a conflict of interest with general shareholders, and we havejudged that they are independent from the Company.
External Director Nobuko Kawashima is, as of the date of submission of this report, a Professor at
Doshisha University and an Outside Director of TOKAI Holdings Corporation, but there is nomaterial relationship between these entities and the Company.
External Director Kazuko Kimura is, as of the date of submission of this report, a Professor
Emeritus of Kanazawa University, Representative Director of Medicines Security Workshop, andan Outside Director of Mitsubishi Logistics Corporation, but there is no material relationshipbetween these entities and the Company.
External Director Noriomi Matsumura is a Professor of Department of Obstetrics and Gynecology
of Faculty of Medicine at Kindai University, as of the date of submission of this report, but there isno material relationship between the said educational corporation and the Company.
External Audit & Supervisory Board Member Kunihiko Kamada is an employee of Daiichi Legal
Professional Corporation as of the date of submission of this report, but there is no material
relationship between the said law firm and the Company.
External Audit & Supervisory Board Member Yasuo Himeiwa is a President of Himeiwa Certified
Public Accountant Office, an Outside Member of the Board (Member of Audit & Supervisory
Committee) of Sharp Corporation, and an Outside director (full-time auditing committee member)of IDEC CORPORATION as of the date of submission, but there is no material relationshipbetween these entities and the Company.
External Audit & Supervisory Board Member Masaaki Makikawa is a Visiting Professor of the
Research Organization of Science and Technology at Ritsumeikan University, and the President of
Osaka Hatsushiba Trust as of the date of submission of this report, but there is no material
relationship between these entities and the Company.
The Company has designated three external Directors, Nobuko Kawashima, Kazuko Kimura, andNoriomi Matsumura, and three external Audit & Supervisory Board Members, Kunihiko Kamada,Yasuo Himeiwa, and Masaaki Makikawa, as independent officers as stipulated by the Tokyo Stock
Exchange, and has notified the exchange of such designation.
The Company has established criteria for independence from the Company to appoint external
Directors and external Audit & Supervisory Board Members.
[Criteria for independence of external officers]
External officers who do not meet any of the following criteria are judged to be independent.
1)

A person who is currently a director, auditor, manager, or other employee of the parent
company of the Company

2)

A person who has been a director, auditor, manager, or other employee of the parent companyof the Company in the past3)

A person who is currently a director, auditor, manager, or other employee of a sister companyof the Company

4)

A person who has been a director, auditor, manager, or other employee of a sister company of
the Company in the past5)

A person whose major business partner is the Company or its subsidiary (a person who hasreceived from the Company or its subsidiary a payment of 2% or more of the person’s annual
consolidated gross sales for the most recent fiscal year) or a parent company or significant- 54 -

subsidiary of the person, or an executive director, executive officer, corporate officer, ormanager or other employee of the relevant company if such person is a company.
6)

A person whose major business partner has been the Company or its subsidiary (a person who
has received from the Company or its subsidiary a payment of 2% or more of the person’sannual consolidated gross sales for the most recent fiscal year) in any of the three fiscal years
preceding the most recent fiscal year, or a parent company or significant subsidiary of theperson, or an executive director, executive officer, corporate officer, or manager or other
employee of the relevant company if such person is a company.

7)

A person who is a major business partner of the Company (a person who has made payments
to the Company of 2% or more of the Company’s annual consolidated gross sales in the mostrecent fiscal year) or a parent company or significant subsidiary of the person, or an executive
director, executive officer, corporate officer, or manager or other employee of the relevant
company if such person is a company.

8)

A person who has been a major business partner of the Company in any of the three fiscal
years preceding the most recent fiscal year (a person who has made payments to the Company
of 2% or more of the Company’s annual consolidated gross sales in the most recent fiscal yearof the subject fiscal year) or a parent company or significant subsidiary of the person, or an
executive director, executive officer, corporate officer, or manager or other employee of therelevant company if such person is a company.

9)

Directors (limited to those in charge of business execution) or other executives (an officer,
employee or servant who executes the business of relevant organization) of organizations (forexample, public interest incorporated foundation, public interest incorporated association,
nonprofit corporation, etc.) that have received donations or grants from the Company or its
subsidiaries averaging more than ¥10 million per year for the past three years10) A person who was a director, auditor, accounting advisor, executive officer, or corporate
officer of a company that accepts directors (whether full-time or part-time) from the Company
or its subsidiaries, or its parent company or subsidiaries
11) A person who is a director, auditor, accounting advisor, executive officer, corporate officer,
manager, or other employee of financial institutions or other major creditors (hereinafter,“major creditors, etc.”), or their parent companies or material subsidiaries, that are essential to
the Company’s financing and on which the Company depends to the extent that there is noalternative
12) A person who has been a director, auditor, accounting advisor, executive officer, corporate
officer, manager, or other employee of the Company’s current major creditors, etc., or its
parent company or material subsidiary in the past three years13) A person who is currently a certified public accountant (or certified tax accountant) or amember, partner, or employee of an auditing firm (or certified tax accountant firm) that is anaccounting auditor or accounting advisor of the Company or its subsidiary
14) A person who has been a certified public accountant (or certified tax accountant) or amember, partner or employee of an auditing firm (or certified tax accountant firm) that has
been an accounting auditor or accounting advisor of the Company or its subsidiary in the past
three years, and who has been actually in charge of auditing work (except for auxiliary
involvement) for the Company or its subsidiary (including those who are currently retired orhave left the institution)15) Lawyers, certified public accountants, certified tax accountants, or other consultants who do
not fall under 13) or 14) above and who have received, on average, annual monetary or otherfinancial benefits of ¥10 million or more from the Company or its subsidiaries in the past
three years, other than remuneration for officers16) A person who is a member, partner, associate or employee of a law firm, auditing firm, tax
accounting firm, consulting firm or other professional advisory firm that does not fall under13) or 14) above and whose principal client is the Company or its subsidiaries (a firm that hasreceived, on average, 2% or more of the firm’s consolidated gross sales from the Company orthat company in the past three fiscal years)- 55 -

17) A person whose spouse or a relative within the second degree of kinship falls under any of theabove categories 1) through 16)18) A person who may permanently have a substantial conflict of interest with the Company’s
general shareholders as a whole due to circumstances other than those considered in 1)
through 17) above(iii) Coordination between supervision or auditing by external Directors or external Audit &Supervisory Board Members and internal audits, audits by Audit & Supervisory Board Members
and accounting audits, and relationship with divisions involved in internal control
When convening a meeting of the Board of Directors, external Directors and external Audit &Supervisory Board Members are provided with agenda items and other relevant materials in
advance, and explanations are provided by the Director in charge, etc., as necessary.
External Directors receive reports on internal audits, audits by Audit & Supervisory Board
Members, and accounting audits through the Board of Directors, and fulfill their function ofmanagement supervision of Directors from a standpoint independent of business execution.
External Audit & Supervisory Board Members receive reports on internal audits through the Boardof Directors, conduct audits in cooperation with Audit & Supervisory Board Members, and directly
receive reports on audit plans, audit status, and audit results from the Accounting Auditor, thereby
fulfilling the function of auditing the execution of duties by the Directors from an objective andneutral standpoint.
(3) Status of audits(i)Status of audits by Audit & Supervisory Board Members
The Audit & Supervisory Board consists of five members, including three external Audit &Supervisory Board Members. In accordance with the audit policy and audit plan formulated by the
Audit & Supervisory Board, the Audit & Supervisory Board Members attend meetings of theBoard of Directors and other important meetings, receive business reports from Directors andothers, inspect important documents, and investigate the status of operations and assets in order to
audit the execution of duties by Directors. The summary of the audit activities are as follows.
Summary of audit activities(1) Director

Attendance at Board of Directors meetings
Periodic exchanges of opinions with the Representative Director
Hearing of important management matters(2) Businessexecution

Hearing of business execution from Directors and employees, etc., and attendance at other important
meetings
Conducting audits of consolidated subsidiaries
Investigation of business and property conditions(3) Internal
audits

Inspection and investigation of important documents (approval documents, company seal request
forms, minutes of important meetings, contracts, etc.)
Attendance at audits and inspections by the Internal Audit Department
Daily exchange of opinions with the Internal Audit Department(4) Accounting
auditsHearing of audit plans, quarterly review reports, and audit result reports
Receipt of notices and exchange of opinions on the system for performing duties of the Accounting
Auditor
Implementation of evaluation of the Accounting Auditor- 56 -

The status of each Audit & Supervisory Board Member and the percentage of attendance at the
Audit & Supervisory Board meetings held during the fiscal year under review are as follows.
Title and
position

Number ofmeetings
attended

Name

Career summary, etc.

Audit &
Supervisory
Board Member

Akihiko Kita

Akihiko Kita has experience in the development, manufacturingcontrol, production, and quality assurance of the AgriBio business,and has been engaged in the overall management of overseas
subsidiaries as the President of Takara Biotechnology (Dalian) Co.,
Ltd. and as a Director of Takara Biomedical Technology (Beijing)Co., Ltd.

13/13 (100%)

Audit &
Supervisory
Board Member

Masahide
TamakiMasahide Tamaki is engaged in sales, logistics, and purchasing ofproducts and services in the Bioindustry business, and has
experience in overall management of subsidiaries in the AgriBio
business.

13/13 (100%)External Audit& Supervisory
Board Member

Kunihiko
KamadaKunihiko Kamada is qualified as an attorney-at-law and has
considerable knowledge of corporate legal affairs.

13/13 (100%)External Audit& Supervisory
Board Member

Yasuo
Himeiwa

Yasuo Himeiwa is qualified as a certified public accountant andhas considerable knowledge of finance and accounting.

13/13 (100%)External Audit& Supervisory
Board Member

Masaaki
Makikawa

Masaaki Makikawa has experience and expertise in the fields of
medical engineering and bioengineering, having supervised
research for national projects and undertaken many industryacademia collaborative projects such as commissioned researchand joint research.

13/13 (100%)In the fiscal year under review, audits were conducted based on important audit items, such as
examining the group risk management system, conducting on-site inspections of overseas
subsidiaries, verifying compliance with relevant laws and regulations in line with businessexpansion, and confirming the status of initiatives on information security, human resource
development and asset preservation.
In addition to the aforementioned important audit items, the Audit & Supervisory Board Members
conducted interviews with all divisions, interviews through on-site inspections of all overseas
subsidiaries, and interviews with all committees or document audits of the committees.
The external Audit & Supervisory Board Members attended meetings of the Board of Directors
and other important meetings, and exchanged opinions with management and the Accounting
Auditor. They also attended meetings of the Audit & Supervisory Board to receive reports from the
Audit & Supervisory Board Members on the status of other important meetings, as well as on thestatus and results of audits, and gathered necessary information and expressed their opinions asnecessary by utilizing their professional knowledge and background.
(ii) Internal audits
Internal audits at the Company are conducted by the Internal Audit Department (4 members),
which is independent from the business execution divisions and directly supervised by the
President & CEO. The Internal Audit Department conducts internal audits on general operations of
the Company and subsidiaries from the point of view of legality and legal compliance, in
cooperation with Audit & Supervisory Board, and also works to enhance the internal control andinternal checks and balances by evaluating the status of developing and operating internal control
regarding financial reports, and regularly reports the results to the Company President, Board of
Directors, Audit & Supervisory Board, etc. There has been a system to direct reported problems to
the responsible department to ensure that appropriate improvements are made. The Internal Audit
Department has ensured collaboration between the Internal Audit Department and Directors andAudit & Supervisory Board Members by reporting directly to the Board of Directors twice a year
and the Audit & Supervisory Board on a regular basis.
(iii) Accounting audits
1)

Name of auditing corporation
Deloitte Touche Tohmatsu LLC- 57 -

2)

Length of continuous auditing
Since 1968 (including the period of continuous auditing at Takara Shuzo Co., Ltd. prior to theestablishment of the Company)

3)

Certified public accountants who conducted audits
Tomoyuki Suzuki, Designated Limited Partner, Certified Public Accountant
Yuya Minobe, Designated Limited Partner, Certified Public Accountant

4)

Assistant accountants who participated in audits
10 certified public accountants and 12 others

5)

Policy and reason for selecting the audit corporation
In selecting an audit corporation, we make a comprehensive judgment based on the following
main considerations, taking into account the nature and scale of our business.
・ Continued adequacy of the quality control system
・ High level of independence and expertise・ Reasonableness and appropriateness of audit fees
・ The corporation has an audit system that can provide support on a global basis

6)

Evaluation of audit corporation by Audit & Supervisory Board Members and Audit &Supervisory Board
In accordance with the Accounting Auditor Evaluation Standards, our Audit & Supervisory
Board Members and the Audit & Supervisory Board evaluate the auditing corporation eachfiscal year through reports from the Finance & Accounting Department on the status of audit
implementation and through periodic exchanges of opinions with the auditing corporation andhearing confirmation items.
As a result, we have determined not to dismiss and to reappoint Deloitte Touche Tohmatsu
LLC, our current auditing firm.

(iv) Details of audit fee, etc.
1)

Remuneration to independent auditors
Fiscal year ended March 31, 2023
Fees for audit
certification services(Millions of yen)

Category

Fiscal year ended March 31, 2024

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Reporting company

51

2

51

–

Consolidated subsidiaries

–

–

–

–

Total

51

2

51

–

Non-audit services for the Company include advice and guidance on compliance withclimate-related financial disclosures.
2)

Remuneration to the same network as independent auditors (excluding remuneration to
Deloitte Tohmatsu Group (1))
Fiscal year ended March 31, 2023
Fees for audit
certification services(Millions of yen)

Category

Reporting company

Fiscal year ended March 31, 2024

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

–

7

–

32

Consolidated subsidiaries

139

32

176

42

Total

139

39

176

75

Non-audit services for the Company and its consolidated subsidiaries include tax advisory
services, etc.
- 58 -

3)

Details of other major remuneration for audit certification services
Not applicable.

4)

Policy on determining audit fee
The Company does not have a clear policy for determining the audit fee for independent
auditors. However, the Company receives an explanation of the details of the estimatedamount of the audit fee presented by the auditing corporation, and determines the amountafter discussion and with the consent of the Audit & Supervisory Board.

5)

Reasons for approval of the Accounting Auditor remuneration by the Audit & Supervisory
Board
The Audit & Supervisory Board, after receiving necessary materials and reports from the
Directors, relevant internal departments, and the Accounting Auditor, and after reviewing thedetails of the audit plan of the Accounting Auditor, the performance of its duties during theprevious fiscal year, and the basis for the calculation of the remuneration estimate, hasdecided to consent to the remuneration for the Accounting Auditor as stipulated in Article
399, paragraph 1 of the Companies Act.

(4) Remuneration, etc. for officers(i)Matters concerning the policy for determining the amount of remuneration, etc. for officers as wellas the method of calculation thereof
1)

Basic policy
The Company’s basic policy regarding remuneration for officers is an annual salary-based
remuneration system designed to promote excellent human resources as managers, tomotivate them more strongly to execute management strategies, and to further increase
corporate value.
The amount of remuneration for officers is determined within the remuneration limits
resolved at the Annual General Meeting of Shareholders, based on the method of performance
evaluation approved by the Board of Directors on December 16, 2019, taking into
consideration their position and their contribution to the company’s performance, and is paid
at a certain time each month.
The amount of remuneration for Directors is determined by the President & CEO Koichi
Nakao, who is authorized by the Board of Directors, with advice and recommendations fromthe Nomination and Compensation Committee, which is established voluntarily by theCompany. This is because the Company has introduced a target management system for theevaluation of the divisional performance of its Executive Directors, and the targets in thedivisional performance evaluation include not only division-specific quantitative targets but
also qualitative targets, and the President & CEO implements the performance evaluation.
The Board of Directors believes that this method will promote excellent human resources as
managers and motivate them to execute management strategies more strongly and further
increase corporate value.

2)

Remuneration system
Remuneration for Executive Directors consists of a fixed salary and a variable salary linked tothe company’s performance and other factors to reflect their responsibilities as Directors andtheir contribution to corporate performance. The fixed salary is 50% of the amount of
remuneration for the previous fiscal year, and the variable salary is determined based on thecompany-wide and divisional performance evaluations, using 50% of the amount of
remuneration for the previous fiscal year as the basis for calculating the variable salary.
Remuneration for Directors and Audit & Supervisory Board Members who are independent of
the execution of business operations is fixed salary only, within the limit of remuneration
resolved at the Annual General Meeting of Shareholders.

3)

Calculation method of variable salary
The calculation method of variable salary for Executive Directors is as follows.
- 59 -

Total variablesalary(Ratio 50%)

Overall performance evaluation(Ratio 25%)

Divisional performance evaluation(Ratio 25%)

Calculation
method(Previous year’s annual salary × consolidated operating profit to budget
Previous year’s annual salary ×
ratio (%) × 10%) + (previous year’s annual salary × non-consolidated
department performance evaluation
operating profit to budget ratio (%) × 10%) + (previous year’s annual salary coefficient (five-level evaluation:
× non-consolidated operating profit to previous year ratio (%) × 5%)
lower limit 80% to upper limit 120%)(Note) Figures (%) for ratio to the budget and previous year are handled as × 25%
follows.
(Note) The department performance
・ If the figures are within 100% ±5% of the budget or the previous
evaluation coefficient will
year’s figures, they remain unchanged.
fluctuate within the range of
80% to 120% based on the・ If the figures are over 100% ±5% of the budget or the previous
five-level evaluation
year’s figures, the figures are added or subtracted by 1% inaccording to the degree ofincrements of 5% for the portion exceeding ±5% of the budget or
achievement of targets under
the previous year’s ratio.
the target management
・ The lower limit of the ratio to the budget and previous year is 90%,
system.
and the upper limit is 110%.

Reasons forselection ofindicators,
etc.

Operating profit is positioned as the Company’s most importantmanagement indicator.

We have introduced a target
management system to clarify the
responsibility of the Executive
Directors for the results of thedivisions for which they are in charge.
Targets in the evaluation of divisional
performance include not only
division-specific quantitative targets
but also qualitative targets.

Results

Consolidated operating profit 110% of budget
Non-consolidated operating profit 110% of budget, 90% of the previous
year’s level

The President & CEO made acomprehensive evaluation based on
individual interviews between the
Executive Directors and the President& CEO.

4)

Resolution of the General Meeting of Shareholders regarding the remuneration for officers
The details of the resolution of the General Meeting of Shareholders regarding remunerationfor officers are as follows.
a)Date of the resolution of the General Meeting of Shareholders
June 23, 2017b)

Director
Fixed remuneration amountUp to ¥184.8 million per year (including up to ¥30 million for external Directors)
Performance-linked remuneration amountUp to 5% of consolidated operating profit for the previous period per year
Number of Directors eligible for remuneration
8c)

Audit & Supervisory Board Members
Fixed remuneration amountUp to ¥72 million per year
Number of Audit & Supervisory Board Members eligible for remuneration
5- 60 -

(ii) Total amount of remuneration, etc., total amount of remuneration, etc. by type and number ofpayees by category of officers
Total amount of remuneration, etc. by type (Millions of yen)

Category of officers

Total amount of
remuneration, etc.
(Millions of yen)Fixed
remuneration

Performancelinked
remuneration

Retirement
benefits

Of which, nonmonetary
remuneration, etc.

Directors(Excluding external
Directors)

238

126

112

–

–

7

Audit & Supervisory
Board Members(Excluding external
Audit & Supervisory
Board Members)

33

33

–

–

–

2

External Directors

23

23

–

–

–

3

External Audit &Supervisory Board
Members

22

22

–

–

–

3

Note:

Number of
eligible
officers

The above table includes one Director who retired at the conclusion of the 21st Annual General Meeting of
Shareholders held on June 23, 2023.

(iii) Total amount of consolidated remuneration, etc. by officer
The total amount of consolidated remuneration, etc. by officer is not stated because there is no
officer whose amount is ¥100 million or more.
(iv) Significant employee salaries of officers who also serve as employees
The Company does not have any officers who concurrently serve as employees.
(5) Share ownership(i)

Policy and concept of the classification of investment shares
The Company does not currently hold any cross-shareholdings for purposes other than pureinvestment, and it is the Company’s basic policy not to hold such shares in the future.

(ii) Investment shares whose purpose of holding is other than pure investment
Not applicable.
(iii) Investment shares whose purpose of holding is pure investment
Not applicable.

- 61 -

V. Financial information
1. Preparation policy of the consolidated and non-consolidated financial statements(1) The consolidated financial statements of the Company are prepared in accordance with the Ordinance on
Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ordinance of the
Ministry of Finance No. 28 of 1976).
(2) The non-consolidated financial statements of the Company are prepared in accordance with theOrdinance on Terminology, Forms and Preparation Methods of Financial Statements, etc. (Ordinance ofthe Ministry of Finance No. 59 of 1963; hereinafter the “Ordinance on Financial Statements, etc.”).
The Company is qualified as a company reporting financial statements prepared in accordance withspecial provision and has prepared financial statements pursuant to the provisions of Article 127 of theOrdinance on Financial Statements, etc.
2. Audit certification
In accordance with the provisions of Article 193-2, paragraph 1 of the Financial Instruments and ExchangeAct, the consolidated financial statements for the fiscal year under review (from April 1, 2023 to March 31,2024) and the non-consolidated financial statements for the fiscal year under review (from April 1, 2023 toMarch 31, 2024) were audited by Deloitte Touche Tohmatsu LLC.
3. Special efforts to ensure the appropriateness of consolidated financial statements, etc.
The Company takes special measures to ensure the appropriateness of its consolidated financial statements,
etc. Specifically, the Company is a member of the Financial Accounting Standards Foundation in order tograsp the content of accounting standards, etc., and to establish a system to appropriately respond to revisionsof accounting standards, etc.

- 62 -

1. Consolidated financial statements, etc.
(1) Consolidated financial statements(i) Consolidated balance sheet(Millions of yen)
As of March 31, 2023
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Technology assets
Other
Total intangible assets
Investments and other assets
Deferred tax assets
Retirement benefit asset
Other
Total investments and other assets
Total non-current assets
Total assets

As of March 31, 2024

51,847244
984
11,338
6,248
1,125
3,714
2,184
(118)
77,569

*1

*1

*1

*1

28,098(7,064)
21,0348,384(4,883)3,500
10,569(6,229)
4,340
8,654
756
(178)
578
2,102
992
(246)
745
40,956
6,674
1,011
1,360
9,047
1,067
93
466
1,627
51,632
129,202- 63 -

35,41633
1,143
10,181
6,784
970
4,096
4,205
(72)
62,759

*1

*1

*1

*1

28,521(8,318)20,203
8,346(5,309)3,037
11,673(7,674)
3,998
8,869
756
(231)
525
11,712
1,326
(597)
728
49,075
6,488
219
1,319
8,027
833
102
454
1,389
58,492
121,252

(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Notes and accounts payable - trade
Lease liabilities
Accounts payable - other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Total shareholders’ equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets- 64 -

As of March 31, 2024

2,323
151
4,405
672
1,065
5,756
14,375

1,543
180
1,919
128
962
2,433
7,168

821
179
992
378
2,372
16,747

788
0
1,102
407
2,299
9,467

14,96532,89357,047104,906

14,96532,89353,471
101,330

7,680
(367)
7,312
235
112,454
129,202

10,548(373)
10,174279
111,784
121,252

(ii) Consolidated statements of profit or loss
Consolidated statement of income(Millions of yen)
Fiscal year ended
March 31, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Provision of allowance for doubtful accounts
Employees’ salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Research and development expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Foreign exchange gains
Rental income from real estate
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Rental expenses on real estate
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Impairment losses
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

*1

*2

*3
*4

*5

- 65 -

Fiscal year ended
March 31, 2024

78,14233,37744,765
79
5,877
574
249
8,575
8,865
24,224
20,541*1*243,505
16,597
26,908
(34)
6,192
454
305
8,324
8,663
23,905
3,003

142
–
158
62
363

186
97
165
64
513

24
120
70
6
221
20,682

23
–
74
12
111
3,405

251
678
930

*3

3
–
3

348
–
39
388
21,224
4,679
496
5,176
16,04735
16,012

*5

347
207
–
554
2,853
1,292
50
1,343
1,510
29
1,480

*6

(iii) Consolidated statement of comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2023
ProfitOther comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests*1- 66 -

Fiscal year ended
March 31, 2024

16,047

1,510

4,478
(163)
4,315
20,363

2,882
(5)
2,877
4,387

*1

20,319

4,343

43

44

(iv) Consolidated statement of changes in equity
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity

Accumulated other comprehensive income
Total
Remeasureaccumulated
ments ofother
definedcomprehenbenefit plans
sive income

Noncontrollinginterests

Total net
assets191

96,064Retainedearnings

Total
shareholders’equityForeigncurrencytranslation
adjustment

45,00992,8683,208

Dividends of surplus(3,973)(3,973)(3,973)

Profit attributable toowners of parent

16,012

16,012

16,012

Share capital
Balance at beginning of
period14,965

Capitalsurplus32,893

(204)

3,004

Changes during period

Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

4,471

(163)

4,307

43

4,351

–

–

12,03812,038

4,471

(163)

4,307

43

16,38914,96532,89357,047104,906

7,680

(367)

7,312

235

112,454

Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity

Accumulated other comprehensive income
Total
Remeasureaccumulated
ments ofother
definedcomprehenbenefit plans
sive income

Noncontrollinginterests

Total net
assets235

112,454

Retainedearnings

Total
shareholders’equityForeigncurrencytranslation
adjustment

57,047104,906

7,680

Dividends of surplus(5,057)(5,057)(5,057)

Profit attributable toowners of parent

1,480

1,480

1,480

Share capital
Balance at beginning of
period14,965

Capitalsurplus32,893

(367)

7,312

Changes during period

Net changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

2,867

(5)

2,862

44

2,906

–

–

(3,576)(3,576)

2,867

(5)

2,862

44

(669)

14,96532,89353,471

101,330

10,548(373)

10,174279

111,784- 67 -

(v) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 2023
Cash flows from operating activities
Profit before income taxes
Depreciation
Impairment losses
Depreciation and amortization on other
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in retirement benefit liability
Interest income
Interest expenses
Insurance claim income
Loss (gain) on sale and retirement of non-current assets
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other current liabilities
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Proceeds from insurance income
Refund of subsidies
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment andintangible assets
Proceeds from sale of property, plant and equipment
and intangible assets
Purchase of other depreciable assets
Subsidies received
Refund of subsidies
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Dividends paid
Repayments of lease liabilities
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Fiscal year ended
March 31, 2024

21,224
4,050
–
86
599
56
78
202
(142)
24
(678)
97
5,718
13,510139
2,271(1,371)
162
46,028116(24)(9,902)678–
36,897*1- 68 -

*2

2,853
4,279
207
102
640
(53)
(144)
107
(186)
23
–
344
1,501
(324)
(928)
(3,439)
(508)
(114)
4,361
166
(22)
(2,359)
–
(433)
1,711

(17,769)
16,554(2,224)
2,937(5,747)(12,778)

396

9

(135)
–
–
7
(6,693)(94)
462(1,335)(19)(13,043)*2(3,968)(151)(4,119)(5,052)(181)(5,233)813

678

26,89722,16049,058(15,886)
49,05833,171*1Notes to consolidated financial statements
Significant matters for preparing consolidated financial statements
1. Scope of consolidation(1) Consolidated subsidiaries(i)

Number of consolidated subsidiaries:

Eight companies(ii) Names of consolidated subsidiaries:

Takara Bio Europe S.A.S. (France)

Takara Bio UK Ltd. (U.K.)
Takara Biotechnology (Dalian) Co., Ltd. (China)
Takara Biomedical Technology (Beijing) Co., Ltd. (China)
Takara Korea Biomedical Inc. (Korea)
DSS Takara Bio India Private Limited (India)
Takara Bio USA Holdings Inc. (U.S.)
Takara Bio USA, Inc. (U.S.)(2) Non-consolidated subsidiaries
Not applicable.
2. Adoption of equity method(1) Non-consolidated subsidiaries or affiliates adopting equity method
No equity method companies(2) Non-consolidated subsidiaries or affiliates not adopting equity method
Not applicable.
3. Fiscal year of consolidated subsidiaries
The closing date of the fiscal year for consolidated subsidiaries is December 31, which differs from theclosing date of the consolidated fiscal year.
Because the difference with the closing date of the fiscal year for the consolidated financial statements is threemonths or less, financial statements as of the closing date of the fiscal year for each company were used in the
preparation of these consolidated financial statements. Necessary adjustments will be performed for importanttransactions that occur between the closing date of the fiscal year for each company and the closing date of the
fiscal year for the consolidated financial statements.
4. Accounting policies(1) Valuation basis and methods for significant assets(i)Securities
1)

Held-to-maturity securities
Amortized cost method (straight-line method)

2)

Available-for-sale securities
Available-for-sale securities other than stocks, etc., without market value
Fair value method (unrealized gains and losses are recognized in a component of net assets,
and costs of securities sold are determined by the moving average method)
Stocks, etc. without market value
Stated at cost determined by the moving-average method(ii) Derivatives
Fair value method(iii) Inventories- 69 -

Primarily stated at cost determined by the weighted-average method (the carrying amounts in thebalance sheet are calculated by the method in which carrying amounts are written down due to a
decline in profitability of assets.)(2) Method of depreciation for important depreciated assets(i)

Property, plant and equipment (excludes leased assets)
The straight-line method is mainly used.
Major useful lives are as follows:
Buildings and structures:

6 to 60 years

Machinery, equipment and vehicles: 4 to 10 years
Tools, furniture and fixtures:

2 to 15 years(ii) Intangible assets (excludes leased assets)
The straight-line method is used.
Major useful lives are as follows:
Technology assets:

7 to 9 years (future revenue-earning period used as basis forcalculating price)

Customer-related assets:

9 years (same as above)

Internal-use software:

5 years (usable period in company)

Trademark rights:

10 years (trademarks booked by Takara Bio USA, Inc. are notamortized)(iii) Leased assets
Leased assets in ownership-transferred finance lease transactions
Uses same method as depreciation method adopted for company-owned fixed assets.
Leased assets in non-ownership-transferred finance lease transactions
Uses straight-line method with settings of useful lives as lease period and residual value as zero.
(3) Booking standards for important allowance(i)

Allowance for doubtful accounts
As a provision for losses arising from bad debts, allowance for doubtful accounts is provided at theamount expected to be uncollectible based on the historical rate of bad debt for general receivables
and based on the collectability of the receivables for doubtful accounts.

(ii) Provision for bonuses
Provision for bonus payments to employees is provided at the amount of projected future bonus
payment to be borne during the current fiscal year.
(4) Accounting method for retirement benefits(i)Method of attributing expected retirement benefits to periods
In calculation of retirement benefit obligations, the benefit formula basis is applied to attributeexpected retirement benefits to periods up to the end of the fiscal year under review.

(ii) Amortization of actuarial gains or losses and past service cost
Past service cost is amortized on a straight-line basis from the fiscal year in which the cost occurred
over a period equal to or less than the average remaining service period of eligible employees (10years).
Actuarial gains and losses are amortized by the straight-line method over a period within the
average remaining service years for employees (10 years) at the time of occurrence in each fiscal
year, and allocated proportionately from the fiscal year following the respective fiscal year ofoccurrence.
- 70 -

Unrecognized actuarial gains and losses and unrecognized past service cost are booked inremeasurements of defined benefit plans for accumulated other comprehensive income in net assets
making adjustments for tax effects.
(iii) Adoption of the simplified method for small companies, etc.
Certain consolidated subsidiaries apply the simplified method to calculate retirement benefit
liability and retirement benefit expenses, using the amount payable at the end of the fiscal year forvoluntary base retirement as the retirement benefit obligation.
(5) Standards for booking important revenue and expenses
In terms of revenue generated from contracts between the Group and customers, the details of major
performance obligations in major businesses and the standard timing of fulfilling performanceobligations (and recognizing revenue) are as follows.
The Group receives the compensation of the transaction within one year of fulfilling performanceobligations and significant financing components are not included.
(i)Reagents and Instruments
In the Reagents and Instruments business, the Group primarily manufactures and sells reagents andsells instruments. In terms of product sales to domestic customers, the period between shipping anddelivery of the product to the customer is the standard period. Therefore, the Group recognizes
revenue at the point of shipping the product to the customer. In terms of product sales to overseas
customers, based on trade conditions established primarily in Incoterms, etc., the Group recognizes
revenue at the point that the Group delivers the product to the transporting party and is aware thecontrol of product is transferred to the customer.

(ii) CDMO
In the CDMO business, the Group is entrusted primarily with services related to regenerative
medicine products, gene analysis, and examinations based on short-term contract services. Revenue
is recognized at a point in time when control over deliverables is transferred to customers,
primarily over acceptance, receipt, or shipment, depending on the contract.
(6) Standards for converting important foreign currency-denominated assets and liabilities to Japanese yen
Foreign currency-denominated monetary receivables and liabilities are converted into yen at the spot
exchange rate as of the closing date of the fiscal year, and the resulting exchange differences areaccounted for as gains or losses. Further, the assets and liabilities of overseas subsidiaries, etc., areconverted into yen at the spot exchange rate as of the closing date of each subsidiary. Revenue andexpenses are converted into yen by the average exchange rate during the period. The resulting exchange
differences are included in non-controlling interests and foreign currency translation adjustment in net
assets.
(7) Significant methods of hedge accounting(i)

Method of hedge accounting
Deferral hedge is adopted in hedge accounting. Appropriation processing is adopted fortransactions that meet the requirements for that method in order to hedge foreign currency
exchange risks.

(ii) Hedging instruments and hedged items
Hedging instruments: Forward exchange contracts
Hedged items: Foreign currency-denominated liabilities corresponding with royalty payments(iii) Hedge policy
The currency fluctuation risk of a hedged item in the exchange market is hedged within a certain
range based on accounting rules for the purpose of mitigating the effect of exchange fluctuations on
foreign currency-denominated liabilities.
(iv) Method of assessing hedge effectiveness- 71 -

An exchange contract, a hedging instrument, fixes the cash flows of a hedged item. Therefore, cash
flow fluctuations are offset at the start of the hedging and thereafter. As such, the assessment ofhedge effectiveness is omitted.
(8) Method and period for amortization of goodwill
Goodwill is amortized by straight-line method over a reasonable amortization period within 20 years.
(9) Scope of cash and cash equivalents in consolidated statements of cash flows
Cash on hand, demand deposits, and short-term investments with repayment terms of three months orless from the date of acquisition that are readily convertible to cash and subject to an insignificant risk ofchanges in value
Significant accounting estimates
Goodwill
The Group recorded goodwill for Takara Bio USA, Inc. when the Group acquired all the shares of Clontech
Laboratories, Inc., Rubicon Genomics, Inc., and WaferGen Bio-systems, Inc.
(1) The amount recorded in the consolidated financial statements for the current fiscal year
(Millions of yen)
Fiscal year ended March 31, 2023
Goodwill

Fiscal year ended March 31, 2024

6,674

6,488

(2) Information related to significant accounting estimates for identified items
The Group determined Takara Bio USA, Inc. as a reporting unit including goodwill and took procedures
to identify an indication of impairment. The recoverable amount of the reporting unit is measured at fairvalue. Fair value is mainly calculated by discounted current value of estimated future cash flow and uses
hypothetical future growth rate, etc. for cash flow estimates.
Further, at the end of the current fiscal year, recoverable amount sufficiently exceeded carrying amounts.
Therefore, the Group determined that the possibility of occurrence of impairment losses was low even if
there were reasonable changes to the future growth rate used to calculate recoverable amount.
Changes in presentation
Consolidated statement of cash flows
The “Increase (decrease) in accrued consumption taxes,” which were included in “Increase (decrease) in othercurrent liabilities” in cash flows from operating activities in the previous fiscal year, is presented separately fromthe current fiscal year due to its increased materiality in terms of amount. In order to reflect these changes to thepresentation method, the Group has reclassified the consolidated financial statements for the previous fiscal year.
As a result, ¥899 million reported as “Increase (decrease) in other current liabilities” in cash flows from operating
activities in the previous fiscal year was reclassified to “Increase (decrease) in accrued consumption taxes” of ¥2,271
million and “Increase (decrease) in other current liabilities” of ¥(1,371) million.

- 72 -

Consolidated balance sheet*1 Tax purpose reduction entry
The total amount of tax purpose reduction entry that is directly subtracted from non-current assets acquired
using national subsidies, etc. is as follows.
Fiscal year ended March 31, 2023
(March 31, 2023)¥1,337 million

Buildings and structures
Machinery, equipment and vehicles

Fiscal year ended March 31, 2024
(March 31, 2024)¥1,337 million

3,124

3,124

524

524

Intangible assets, others

1

1

Total

4,987

4,987

Tools, furniture and fixtures

Consolidated statement of income*1 Revenue from contracts with customers
Net sales are only the revenue generated from contracts with customers, and other forms of revenue are notincluded. Monetary revenue generated from contracts with customers is listed in the consolidated financial
statement “Notes, Revenue recognition, 1. Information breakdown of revenue from contracts with customers.”*2 Total amount of research and development expenses included in general and administrative expenses andmanufacturing expenses for the current fiscal year
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥8,575 million¥8,324 million

Employees’ salaries and bonuses
Provision for bonuses¥2,292 million
262¥2,598 million

Retirement benefit expenses
Depreciation

81
1,481

92
1,451

Royalties
Supplies expenses

35
1,233

29
829

807

665

Total research and development
expensesMajor expenses of these expenses are as follows.

Remuneration/contracting fees249

*3 Breakdown of gain on sale of non-current assets
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Buildings and structures¥0 million¥– million

Machinery, equipment and vehicles

03

Tools, furniture and fixtures

0

0

250

–

Land
Intangible assets, others

0

–

Total

251

3

*4 Insurance claim income
Fiscal year ended March 31, 2023
Low-quality products due to bad weather during the transfer from overseas occurred in the fiscal year ended
March 31, 2022. The amount of insurance for this damage is booked as “Insurance claim income” inextraordinary income in the fiscal year ended March 31, 2023.
- 73 -

*5 Breakdown of loss on sale and retirement of non-current assets
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Buildings and structures¥9 million¥45 million

Machinery, equipment and vehicles

8

271

224

13

Tools, furniture and fixtures
Intangible assets, others
Demolition and disposal expenses, etc.
Total

0

–

105

17

348

347

*6 Impairment losses
Fiscal year ended March 31, 2024
Description is omitted as immaterial.
Consolidated statement of comprehensive income*1 Reclassification adjustments and tax effects in other comprehensive income
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥4,478 million¥2,882 million

Foreign currency translation adjustment:
Amount arising
Remeasurements of defined benefit plans,
net of tax:
Amount arising
Reclassification adjustments
Before tax effect adjustment
Tax effects
Remeasurements of defined benefit
plans, net of tax
Total other comprehensive income- 74 -

(296)

(100)

62

92

(233)

(7)

70

2

(163)

(5)

4,315

2,877

Consolidated statement of changes in equity
Fiscal year ended March 31, 2023
1.

Class and total amount of issued shares, as well as class and total number of treasury shares
Number of shares atthe beginning of the
fiscal year ended
March 31, 2023
(Shares)Number of shares
increased during the
fiscal year ended
March 31, 2023
(Shares)Number of shares
decreased during the
fiscal year ended
March 31, 2023
(Shares)Common shares

120,415,600––

120,415,600

Total

120,415,600––

120,415,600

Common shares

–

–

–

–

Total

–

–

–

–

Number of shares atthe end of the fiscal
year ended March 31,
2023 (Shares)

Issued shares

Treasury shares

2.

Share acquisition rights and treasury share acquisition rights
Not applicable.

3.

Dividends(1) Cash dividends paid
Resolutions

Share
class

June 24, 2022
Annual General
Meeting of
Shareholders

CommonsharesTotal amountof dividends(Millions ofyen)

Source ofdividend

Dividends
per share
(Yen)

3,973

Retainedearnings

33.00

Record date

Effective date

March 31, 2022

June 27, 2022

(2) Dividends for which the record date is in the current fiscal year with the effective date in the following
fiscal year
Resolutions

Share
class

June 23, 2023
Annual General
Meeting of
Shareholders

CommonsharesTotal amountof dividends(Millions ofyen)

Source ofdividend

Dividends
per share
(Yen)

5,057

Retainedearnings

42.00

Record date

Effective date

March 31, 2023

June 26, 2023

Fiscal year ended March 31, 2024
1.

Class and total amount of issued shares, as well as class and total number of treasury shares
Number of shares atthe beginning of the
fiscal year ended
March 31, 2024
(Shares)Number of shares
increased during the
fiscal year ended
March 31, 2024
(shares)Number of shares
decreased during the
fiscal year ended
March 31, 2024
(shares)Common shares

120,415,600––

120,415,600

Total

120,415,600––

120,415,600

Common shares

–

–

–

–

Total

–

–

–

–

Number of shares at
end of the fiscal year
ended March 31, 2024
(shares)Issued shares

Treasury shares- 75 -

2.

Share acquisition rights and treasury share acquisition rights
Not applicable.

3.

Dividends(1) Cash dividends paid
Resolutions

Share
class

June 23, 2023
Annual General
Meeting of
Shareholders

CommonsharesTotal amountof dividends(Millions ofyen)

Source ofdividend

Dividends
per share
(Yen)

5,057

Retainedearnings

42.00

Record date

Effective date

March 31, 2023

June 26, 2023

(2) Dividends for which the record date is in the current fiscal year with the effective date in the following
fiscal year
Resolutions

Share
class

June 21, 2024
Annual General
Meeting of
Shareholders

CommonsharesTotal amountof dividends(Millions ofyen)

Source ofdividend

Dividends
per share
(Yen)

2,047

Retainedearnings

17.00

Record date

Effective date

March 31, 2024

June 24, 2024

Consolidated statement of cash flows*1 Relationship between cash and cash equivalents at end of period and the amount written in the consolidatedbalance sheet
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Cash and deposits¥51,847 million¥35,416 million

Time deposits with maturity exceeding
three months(2,789)(2,245)

Cash and cash equivalents

49,05833,171*2 Subsidies returned
Fiscal year ended March 31, 2024
The remaining amount of national subsidies, etc. received for the fiscal year ended March 31, 2021 and thefiscal year ended March 31, 2022, as well as consumption taxes deducted from purchase taxes, were repaid
during the current fiscal year in accordance with the rules of the national subsidies, etc.

- 76 -

Lease transaction
1. Finance lease transaction (the Group as a lessee)(1) Ownership-transferred finance lease transactions(i)Leased assets
Equipment related to gas engine cogeneration (machinery, equipment and vehicles)(ii) Depreciation method for leased assets
Written in “4. Accounting policies (2) Method of depreciation for important depreciated assets” inimportant items that are the basis of preparing consolidated financial statements.
(2) Non-ownership-transferred finance lease transactions
Description is omitted as immaterial.
2. Operating lease transaction
Description is omitted as immaterial.
3. Lease transactions based on the International Financial Reporting Standards (IFRS)(1) Right-of-use assets
Primarily rental of offices and transportation vehicles(2) Depreciation method for right-of-use assets
Straight-line method
Financial instruments
1. Items related to status of financial instruments(1) Initiative policy for financial instruments
The Group manages surplus funds, limited to only highly safe financial assets. Derivative transactions
are aimed to mitigate the impact of future foreign currency exchange fluctuations on foreign currencydenominated receivables and liabilities, not as a speculation.
(2) Details and risks of financial instruments
Notes receivable - trade, electronically recorded monetary claims - operating, and accounts receivable trade, which are trade receivables, are exposed to the credit risk of customers. Foreign currencydenominated trade receivables arising from the overseas business operations are exposed to foreign
currency exchange fluctuation risks.
Securities are held-to-maturity securities exposed to the credit risks of the issuers of bonds.
Notes and accounts payable - trade, which are operating liabilities, usually have a maturity date of threemonths or less. Some of them are foreign currency-denominated due to the importing of products, etc.,
being exposed to foreign currency exchange fluctuation risks. In principle, futures exchange contracts
are used to hedge net positions of the same foreign currency-denominated trade receivables.
Derivative transactions entail futures exchange contracts, spot forward exchange contracts, and currency
option contracts aimed at mitigating the effect of future foreign currency exchange fluctuations on
foreign currency-denominated trade receivables and liabilities. For hedging instruments, hedged items,
hedging policies, and methods of evaluating hedge effectiveness concerning hedge accounting, pleaserefer to the aforementioned “Significant matters for preparing consolidated financial statements, 4.
Accounting policies, (7) Significant methods of hedge accounting” above.
(3) Risk management system for financial instruments(i)Management of credit risks (risk of contract default, etc. by partner)
Based on the operating management rules and the credit management rules, the Group manages
payment due date and manage the outstanding balance of each business partner. Monitoring thecredit status of the major business partners allows the Group to quickly grasp and reduce doubtful
accounts. In addition, consolidated subsidiaries apply the same risk management approach.
- 77 -

Securities are, based on accounting rules, limited to products with the highest ratings. Therefore,credit risk is not significant.
Derivative transactions are limited to financial institutions with high ratings that the Company has abusiness relationship with. Therefore, credit risk is not significant.
(ii) Management of market risks (fluctuation risks for currency exchange rates and interest rates, etc.)
For foreign currency-denominated trade receivables and liabilities, the Company, in principle, uses
futures exchange contracts to hedge against fluctuation risks for the exchange rates of eachcurrency.
In accordance with the accounting rules, the responsible department executes and manages
derivative transactions upon receiving the authorization of a person in charge of the settlement.
(iii) Management of liquidity risks in financing (risk of not making payments on due date)
Based on reports of each department, a responsible department in the Company prepares andupdates financing plans, as well as manages liquidity risks by maintaining liquidity on hand. In
addition, consolidated subsidiaries apply the same risk management approach.
2. The fair value of financial instruments, etc.
Amount booked on consolidated balance sheet, fair value, and the difference are as follows.
Fiscal year ended March 31, 2023
(Millions of yen)
Carrying amount on
consolidated balance sheet(1)

Lease liabilities (Current
liabilities)
Lease liabilities (Non-current
liabilities)

Fair value

Difference

151

149

(2)

821

774

(47)

Total liabilities

972

923

(49)

(3)

[7]

[7]

–

(2)

Derivative transactions (*2)(*1) For cash and deposits, notes receivable - trade, electronically recorded monetary claims - operating, accounts
receivable - trade, notes and accounts payable - trade, and accounts payable - other, market value resembles
carrying amounts because they are settled in a short period. Therefore, they have been omitted.
(*2) Net receivables and liabilities that occur due to derivative transactions are displayed as net value. Items that are
net liabilities as total are displayed by [ ].

Fiscal year ended March 31, 2024
(Millions of yen)
Carrying amount on
consolidated balance sheet(1)

Lease liabilities (Current
liabilities)
Lease liabilities (Non-current
liabilities)

Fair value

Difference

180

178

(2)

788

743

(44)

Total liabilities

969

922

(47)

(3)

[1]

[1]

–

(2)

Derivative transactions (*2)(*1) For cash and deposits, notes receivable - trade, electronically recorded monetary claims - operating, accounts
receivable - trade, notes and accounts payable - trade, and accounts payable - other, market value resembles
carrying amounts because they are settled in a short period. Therefore, they have been omitted.
(*2) Net receivables and liabilities that occur due to derivative transactions are displayed as net value. Items that are
net liabilities as total are displayed by [ ].

- 78 -

Notes: 1.

Planned return amount of lease liabilities after the closing date of the consolidated fiscal year
Fiscal year ended March 31, 2023
(Millions of yen)
Within one
year

Over oneyear andwithin two
yearsOver twoyears andwithin three
years

Over three
years andwithin four
years

Over four
years andwithin five
years

Over five years

151

129

90

82

81

437

Within one
year

Over oneyear andwithin two
yearsOver twoyears andwithin three
years

Over three
years andwithin four
years

Over four
years andwithin five
years

Over five years

180

128

111

108

82

358

Lease liabilities

Fiscal year ended March 31, 2024
(Millions of yen)

Lease liabilities
2.

Breakdown of the levels of the fair value of financial instruments
The fair value of financial instruments is categorized into the following three levels based on the observability andmateriality of inputs concerning the measurement of fair value.
Level 1 Fair value:

Among inputs related to the measurement of observable fair value, the fair value measured
based on the quoted market prices of assets or liabilities subject to the measurement of said
fair value formulated in active markets

Level 2 Fair value:

Among inputs related to the measurement of observable fair value, the fair value measured
using inputs related to the measurement of fair value other than Level 1 inputs

Level 3 Fair value:

Fair value measured using inputs related to the measurement of fair value that is
unobservable

When multiple inputs that have a significant effect on the measurement of fair value are used, the fair value iscategorized to the level with the lowest priority in the measurement of fair value among the respective levels towhich such inputs belong.
(1)

Financial instruments recorded in the consolidated balance sheet at fair value
Fiscal year ended March 31, 2023
(Millions of yen)
Fair value

Category
Level 1

Level 2

Level 3Total

Derivative transactions

–

7

–

7

Total liabilities

–

7

–

7

Fiscal year ended March 31, 2024
(Millions of yen)
Fair value

Category
Level 1

Level 2

Level 3Total

Derivative transactions

–

1

–

1

Total liabilities

–

1

–

1

- 79 -

(2)Financial instruments other than those recorded at fair value in the consolidated balance sheet
Fiscal year ended March 31, 2023
(Millions of yen)
Category

Fair value
Level 1

Lease liabilities (Current
liabilities)
Lease liabilities (Noncurrent liabilities)
Total liabilities

Level 2

Level 3

Total

–

149

–

149

–

774

–

774

–

923

–

923

Fiscal year ended March 31, 2024
(Millions of yen)
Category
Lease liabilities (Current
liabilities)
Lease liabilities (Noncurrent liabilities)
Total liabilities
Note:

Fair value
Level 1

Level 2

Level 3

Total

–

178

–

178

–

743

–

743

–

922

–

922

Explanation of valuation method applied and input related to the measurement of fair value
Derivative transactions
These fair values are measured using the discounted present value method (DCF method: discounted
cash flow method) with observable inputs, such as interest rate and currency exchange rate. They
are categorized as the Level 2 Fair value.
Lease liabilities (current liabilities) and lease liabilities (non-current liabilities)
These fair values are measured using the discounted present value method (DCF method: discounted
cash flow method), whereby the total of principal and interests are discounted by interest rate
factoring in credit risk, as well as the remaining period of such liabilities. They are categorized as
the Level 2 fair value.

- 80 -

Derivative transactions
1. Derivative transactions to which hedge accounting is not applied
Currency-related
Fiscal year ended March 31, 2023
(Millions of yen)
Category

Transaction type

Contract amount,etc.

Contract amount,etc. exceeding
one year

Unrealized gainor loss

Fair value

Exchange contract
transactions
Long position
Transactions otherthan market
transactions

USD

236

–

1

1

RMB

675

–

(0)

(0)

Short position
EUR

141

–

(2)

(2)

RMB

1,285

–

(6)

(6)

2,338

–

(7)

(7)

Total

Fiscal year ended March 31, 2024
(Millions of yen)
Category

Transaction type

Contract amount,etc.

Contract amount,etc. exceeding
one year

Unrealized gainor loss

Fair value

Exchange contract
transactions
Short position
Transactions
other than market
transactions

USD

141

EUR

–

(1)

(1)

208

–

0

0

RMB
Spot exchange forwards
transactions
Short position

62

–

(0)

(0)

KRW
Total

14
426

–
–

(0)
(1)

(0)
(1)

2. Derivative transactions to which hedge accounting is applied
Currency-related
Fiscal year ended March 31, 2023
Not applicable.
Fiscal year ended March 31, 2024
Not applicable.

- 81 -

Retirement benefit
1. Outline of retirement benefit plans
The Company and some consolidated subsidiaries adopt funded-type and non-funded-type defined benefit
plans, as well as defined contribution pension plans in order to provide for the retirement benefits of
employees.
The defined benefit corporate pension plans (all plans are funded-type plans) pay benefits either in the form of
a lump sum or an annual income according to salary and service period.
The lump-sum retirement plans (all plans are non-funded-type plans) pay benefits in the form of a lump sum
based on salary and service period.
Some subsidiaries calculate retirement benefit liability and retirement benefit expenses using simplified
method.
2. Defined benefit plans(1) Reconciliation of the beginning and ending balances of retirement benefit obligation
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Beginning balance of retirement benefit obligation
Service cost
Interest cost
Actuarial gains and losses
Retirement benefits paid
Other

¥1,545 million
140
5
240
(160)
10

¥1,783 million
172
6
50
(43)
8

Ending balance of retirement benefit obligation

1,783

1,977

(2) Reconciliation of the beginning and ending balances of pension assets
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)
Beginning balance of pension assets¥880 million

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥884 million

Expected return16

16

Actuarial gains and losses

(55)

(50)

Contributions by the employer

103

145

Retirement benefits paid
Other

(70)
9

(25)
6

Ending balance of pension assets

884

977

(3) Reconciliation of the ending balance of retirement benefit obligation and pension assets and retirement
benefit liability and retirement benefit asset recorded in the consolidated balance sheet
Fiscal year ended March 31, 2023
(March 31, 2023)

Fiscal year ended March 31, 2024
(March 31, 2024)

Retirement benefit obligation (funded-type plans)¥792 million¥876 million

Pension assets

(884)

(977)

(91)

(100)

Retirement benefit obligation (non-funded-type
plans)

990

1,101

Net amount of liabilities and assets on
consolidated balance sheet

899

1,000

Retirement benefit liability

992

1,102

Retirement benefit asset

(93)

(102)

Net amount of liabilities and assets on
consolidated balance sheet

899

1,000

- 82 -

(4) Retirement benefit expenses and the breakdown amount thereof
Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)
Service cost

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥140 million

Interest cost¥172 million

56Expected return

(16)

(16)

Amortization of actuarial gains and losses

62

92

Retirement benefit expenses for defined benefit
plans

191

254

(5) Remeasurements of defined benefit plans, net of tax
A breakdown of items recorded as remeasurements of defined benefit plans, net of tax (before tax effectdeduction) is as follows.

Actuarial gains and losses

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)¥(233) million

Total

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥(7) million

(233)

(7)

(6) Remeasurements of defined benefit plans
A breakdown of items recorded as remeasurements of defined benefit plans (before tax effect deduction)is as follows.
Fiscal year ended March 31, 2023
(March 31, 2023)
Unrecognized actuarial gains and losses
Total

Fiscal year ended March 31, 2024
(March 31, 2024)¥(525) million¥(533) million

(525)

(533)

(7) Pension assets(i)

Breakdown of major pension assets
The percentage of major categories comprising the total pension assets is as follows.
Fiscal year ended March 31, 2023
(March 31, 2023)

Bonds
Life insurance general accounts
StocksCash and deposits
Other
Total

Fiscal year ended March 31, 2024
(March 31, 2024)

57%
25
13
3
2

52%
23
19
3
3

100

100

(ii) Method of setting long-term expected return rate
To determine the long-term expected return rate of pension assets, the Company has taken into
account the current and forecast distribution of pension assets and the current and expected future
long-term return rate of diverse assets that comprise pension assets.

- 83 -

(8) Basis for calculating actuarial gains and losses
Basis for the calculation of significant actuarial gains and losses (presented in weighted average)
Fiscal year ended March 31, 2023
(March 31, 2023)
Discount rate
Defined benefit corporate pension
A lump sum
Long-term expected return rate
Average salary increase rate

0.377%
0.382
2.000
3.700

Fiscal year ended March 31, 2024
(March 31, 2024)
0.377%
0.382
1.500
3.700

3. Defined contribution plans
The contribution amount for defined contribution plans of the Company and some consolidated subsidiaries
was ¥220 million for the previous fiscal year and ¥242 million for the current fiscal year.
Stock option, etc.
Not applicable.
Tax effect accounting
1. Breakdown of deferred tax assets and deferred tax liabilities by major cause
Fiscal year ended
March 31, 2023
(March 31, 2023)

Fiscal year ended
March 31, 2024
(March 31, 2024)

Deferred tax assets
Unused tax losses (*1)¥568 million¥666 million

Loss on valuation of inventories

449

404

9

51

597

250

Remeasurements of defined benefit plans

157

104

Provision for bonuses

240

221

Retirement benefit liability

183

224

Impairment losses
Unrealized profit on inventories

Depreciation

54

36

Expenses related to subsidiary acquisition

240

255

Experimentation and research expenses

565

1,027

Tax credits on experimentation and research expenses, etc.

21

22

Accrued business tax

78

-

Other

461

232

Deferred tax assets subtotal

3,627

3,496

Valuation allowances for unused tax losses (*1)

(325)

(402)

Valuation allowances for total deductible temporary
difference

(249)

(306)

Valuation allowances subtotal

(574)

(708)

Deferred tax assets total

3,053

2,788

(422)
(405)
(1,338)

(229)
(333)
(1,391)

Deferred tax liabilities total(2,165)(1,955)Net deferred tax assets

887

833

Deferred tax liabilities
Fair value of intangible assets
Retained surplus of overseas subsidiaries
Other- 84 -

(*1) Amount of unused tax losses and deferred tax assets by carry forward period
Fiscal year ended March 31, 2023
Withinone yearOver oneyear andwithin two
yearsOver twoyears andwithinthree years

Over three
years andwithinfour years

Over four
years andwithin five
years

Over fiveyears

Unused tax losses
(a)

–

–

–

–

–

568

¥568 million

Valuation
allowance

–

–

–

–

–

(325)

(325)

Deferred tax
assets

–

–

–

–

–

243

Total

(b)

243

(a)

Unused tax losses are the amount multiplied by the effective statutory tax rate.

(b)¥243 million in deferred tax assets related to unused tax losses is a portion of the ¥298 million (amount multipliedby effective statutory tax rate) of unused tax losses incurred in the acquisition of a U.S. subsidiary in the fiscal year
ended March 31, 2018. The Group does not recognize a valuation allowance, as it determined that it would berecoverable based on future taxable income forecasts.

Fiscal year ended March 31, 2024
Withinone yearOver oneyear andwithin two
yearsOver twoyears andwithinthree years

Over three
years andwithinfour years

Over four
years andwithin five
years

Over fiveyears

Unused tax losses
(a)

–

–

–

–

–

666

¥666 million

Valuation
allowance

–

–

–

–

–

(402)

(402)

Deferred tax
assets

–

–

–

–

–

263

Total

(b)

263

(a)

Unused tax losses are the amount multiplied by the effective statutory tax rate.

(b)¥263 million in deferred tax assets related to unused tax losses occurred in a consolidated subsidiary. The Group
does not recognize a valuation allowance, as it determined that it would be recoverable based on future taxable
income forecasts.

2. Breakdown of major items that cause significant differences between the effective statutory tax rate andincome tax rate after applying tax effect accounting
Fiscal year ended March 31,
2023(March 31, 2023)

Fiscal year ended March 31,
2024(March 31, 2024)

Effective statutory tax rate
(Adjustments)

30.0%

30.0%

Entertainment and other permanently non-deductible expenses

0.3

2.3

Tax credits on experimentation and research expenses, etc.

(6.6)

(10.3)

Changes in valuation allowance

0.1

3.1

Difference in subsidiary tax rate

(1.4)

(3.7)

Elimination of unrealized profit for inventories

(0.2)

14.5

Amortization of goodwill

0.8

6.7

Foreign tax

1.4

5.6

Retained surplus of overseas subsidiaries

0.2

(2.5)

Other

(0.2)

1.4

Income tax rate after applying tax effect accounting

24.4

47.1

- 85 -

Revenue recognition
1. Information breakdown of revenue from contracts with customers(1) Breakdown of goods and services by type
Category

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Reagents(Millions of yen)
Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

65,92531,961

Instruments

1,375

892

CDMO

8,200

7,997

Gene therapy
Total

2,640

2,653

78,14243,505(2) Breakdown by region
RegionFiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Japan(Millions of yen)
Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

45,667

15,434

U.S.

12,886

12,974

China

10,799

7,039

Asia besides Japan/China

3,546

3,355

Europe

4,949

4,496

Other

293

205

78,14243,505Total

2. Information that is the basis for understanding revenue from contracts with customers
Information that is the basis for understanding revenue from contracts with customers is as written in“Significant matters for preparing consolidated financial statements, 4. Accounting policies, (5) Standards forbooking important revenue and expenses.”
3. Relationship with fulfillment of performance obligations based on contracts with customers and cash flow
generated from said contracts, as well as information related to revenue amount and period expected to berecognized from following fiscal year from contracts with customers existing at the end of the current fiscal
year(1) Balance, etc., of contract assets and contract liabilities
Contract assets and liabilities of the Company and consolidated subsidiaries have been omitted because
they are not significant to the balance and no major changes have occurred. Also, there is no significant
revenue from performance obligations fulfilled (or partially fulfilled) in past fiscal years that isrecognized in the current fiscal year.
Due to a lack of monetary significance, contract assets are included in “Accounts receivable - trade” andcontract liabilities are included in “Other” in “Current liabilities” on the consolidated balance sheet.
(2) Transaction price allocated to the remaining performance obligations
The Company and its consolidated subsidiaries apply a practical expedient for notes on transaction priceallocated to the remaining performance obligations. Contracts with one year or less contract period
initially forecast are not included in the notes.
Unsatisfied (or partially unsatisfied) performance obligations are ¥770 million at the end of the previous
fiscal year. Such performance obligations are entrusted, and the Company expects approximately 70% tobe recognized as revenue within one year of the closing date and approximately the remaining 30% to berecognized as revenue subsequently thereafter.
Unsatisfied (or partially unsatisfied) performance obligations are ¥515 million at the end of the current
fiscal year. Such performance obligations are entrusted, and the Company expects approximately 50% tobe recognized as revenue within one year of the closing date and approximately the remaining 50% to berecognized as revenue subsequently thereafter.
- 86 -

Segment information, etc.
Segment information
The Group has omitted this entry because it is a single segment.
Related information
Fiscal year ended March 31, 2023 (April 1, 2022 to March 31, 2023)
1. Information for products and services
The Group has omitted this entry because it is a single segment.
2. Information by region(1) Net sales(Millions of yen)Japan
45,667

U.S.
12,886

China
10,799Asia besides
Japan/China

Europe

3,546

Other

4,949

293

Total
78,142(2) Property, plant and equipment(Millions of yen)Japan
26,175

U.S.

China

11,409Asia besides
Japan/China

2,893

Europe

203

Total

274

40,956

3. Information about each major customer(Millions of yen)
Customer name or Name

Net sales

Ministry of Health, Labour and Welfare
15,001
Note: The related segment name has been omitted because the Group is a single segment.

Fiscal year ended March 31, 2024 (April 1, 2023 to March 31, 2024)
1. Information for products and services
The Group has omitted this entry because it is a single segment.
2. Information by region(1) Net sales(Millions of yen)Japan
15,434

U.S.

China

12,974

7,039

Asia besides
Japan/China
3,355

Europe
4,496

Other
205

Total
43,505(2) Property, plant and equipment(Millions of yen)Japan
33,583

U.S.
12,129

China
2,909

Asia besides
Japan/China
196

Europe257

Total
49,075

3. Information about each major customer
Of revenue from external customers, net sales from a specific customer does not account for 10% or more of
net sales on consolidated statement of income.
- 87 -

Impairment losses of non-current assets for each reporting segment
The Group has omitted this entry because it is a single segment.
Amortization of goodwill and unamortized balance for each reporting segment
The Group has omitted this entry because it is a single segment.
Gains on negative goodwill for each reporting segment
Not applicable.
Related parties
1. Transactions with related parties
Transactions between company reporting consolidated financial statement and related parties
Fiscal year ended March 31, 2023
Not applicable.
Fiscal year ended March 31, 2024
Not applicable.
2. Notes related to parent company or important affiliates
The parent company of the Company is Takara Holdings Inc. (Prime Market, TSE).
Per share information
Fiscal year ended March 31, 2023 Fiscal year ended March 31, 2024
(April 1, 2022 to March 31, 2023) (April 1, 2023 to March 31, 2024)
Net assets per share¥931.93¥926.00

Earnings per share¥132.97¥12.30Notes: 1.
2.

Information on diluted earnings per share is omitted due to an absence of dilutive shares.
Basis for calculating earnings per share is as follows.
Fiscal year ended March 31, 2023 Fiscal year ended March 31, 2024
(April 1, 2022 to March 31,(April 1, 2023 to March 31,
2023)
2024)

Earnings per share
Profit attributable to owners of parent(Millions of yen)

16,012

1,480

Amount not attributable to commonshareholders (Millions of yen)––

Profit attributable to owners of parent forcommon shares (Millions of yen)

16,012

1,480

Average number of common shares during
the year (Thousands of shares)

120,415

120,415Significant subsequent events
Not applicable.
(vi) Consolidated supplementary schedule
Bonds payable schedule
Not applicable.
- 88 -

Borrowings schedule
Balance at beginningof period(Millions of yen)

Balance at end of
period(Millions of yen)

Lease liabilities due within one year

151

180

3.50

–

Lease liabilities (excluding those due
within one year)

821

788

3.50

2025-2035

Total

972

969

–

–

Category

Notes:

Average interest rate
(%)

Due

1. Average interest rate is the average rate for the outstanding balances at the end of the period that exclude
lease liabilities recorded at the amount before deducting amount equivalent to interests included in the
total lease amount.
2. The planned return of lease liabilities (excluding those due within one year) for the five years after the
final closing day of the consolidated fiscal year is as follows.
Over one year andwithin two years(Millions of yen)

Lease liabilities

Over two years andwithin three years(Millions of yen)

128

Over three years andwithin four years(Millions of yen)

111

Over four years andwithin five years(Millions of yen)

108

82

Asset retirement obligations schedule
The amount of asset retirement obligations as of the beginning and end of the current fiscal year isless than 1/100 of the total amount of liabilities and net assets as of the beginning and end of thecurrent fiscal year, hence the description is omitted in accordance with Article 92-2 of theOrdinance on Terminology, Forms, and Preparation Methods of Consolidated Financial
Statements.
(2) Other(i)

Quarterly information for the fiscal year ended March 31, 2024
(Cumulative period)

Q1

Net sales (Millions of yen)

Q2

Q3

FY2024

9,176

19,11629,73443,505

Profit before income taxes (Millions of yen)

505

1,588

500

2,853

Profit attributable to owners of parent(Millions of yen)

319

1,084

154

1,480

Earnings per share (Yen)

2.65

9.00

1.28

12.30

(Accounting period)
Earnings (loss) per share (Yen)

Q1

Q2
2.65

Q3
6.35

Q4
(7.72)(ii) Status after closing date
Not applicable.
(iii) Legal action
As of the submission date of the Annual Securities Report, there is no significant legal action
against the Group.

- 89 -

11.01

2. Non-consolidated financial statements, etc.
(1) Non-consolidated financial statements(i)

Non-consolidated balance sheet(Millions of yen)
As of March 31, 2023

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets

As of March 31, 2024

38,592
244
984
8,439
3,139
733
1,479
209
907
(0)
54,729

*2

*2
*2
*2

*2

- 90 -

21,200
33
1,143
7,634
3,394
644
1,906
203
3,188
(0)
39,348

11,431
900
2,148
0
3,600
5,512
578
2,003
26,175

*2

402
9
411

*2

*2
*2
*2

10,423
836
1,632
0
3,276
5,512
525
11,37633,583296
22
319

22,50922,509

3,704

3,704

699
377
27,29053,878
108,607405
448
27,06860,971
100,320

(Millions of yen)
As of March 31, 2023
Liabilities
Current liabilities
Accounts payable - trade
Lease liabilities
Accounts payable - otherAccrued expenses
Income taxes payable
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Provision for retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Total shareholders’ equity
Total net assets
Total liabilities and net assets- 91 -

As of March 31, 2024

1,265
50
3,912
823
315
1,378
476
2,399
10,621

1,552
49
1,176
879
64
155
483
48
4,410

619
597
178
46
1,442
12,063

570
728
182
43
1,524
5,935

14,965

14,96532,89332,89332,89332,893

48,684
48,68496,54496,544
108,60746,526
46,526
94,385
94,385
100,320

(ii) Non-consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2023
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Rental income from real estate
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Rental expenses on real estate
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
Insurance claim income
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Profit*2*3- 92 -

Fiscal year ended
March 31, 2024

57,28028,68628,593
14,04014,553*2

27,043
13,253
13,79012,243
1,546

2,956
–
50
38
3,044

2,159
96
51
60
2,367

22
105
25
1
154
17,444

22
–
25
12
60
3,853

250
678
929

0
–
0

337
39
377
17,995
3,169
512
3,681
14,313

338
–
338
3,515
323
293
616
2,899

Manufacturing cost statements

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Category
I.

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Notes
Amount (Millions of yen)numberComposition
ratio (%)

Amount (Millions of yen)

Composition
ratio (%)

2,958

44.9

3,018

48.0

1,409

21.4

1,576

25.1

2,227

33.8

1,688

26.9

6,595

100.0

6,283

100.0

Materials costs

II. Labor costs
III. Expenses*1

Total manufacturing costs
for the period
Work in process at
beginning of the period

998

733

7,593

7,016

Work in process at end of
the period

733

644

Transfer to other account

(56)

(34)

Cost of products
manufactured

6,916

6,406

Total

Cost calculation method
The method of cost calculation applies the appropriate cost calculation method based on
manufacturing method of product, such as total annual cost amount by process based on actual
costs.
Note:*1. Breakdown of major items are as follows.
(Millions of yen)
Item

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)

Depreciation

700

763

Repair expenses

368

377

- 93 -

(iii) Non-consolidated statements of changes in shareholders’ equity
Fiscal year ended March 31, 2023
(Millions of yen)
Shareholders’ equity

Share capital

Balance at beginning of period

Capital surplus

Retained earnings

Legal capitalsurplus

Other retained Total shareholders’earnings
equityRetained earnings
brought forward

14,96532,893

Total net assets

38,344

86,204

86,204

Dividends of surplus(3,973)(3,973)(3,973)

Profit14,313

14,313

14,313

Changes during period

Net changes in items otherthan shareholders’ equity–

Total changes during period
Balance at end of period––

10,34010,34010,34014,96532,893

48,68496,54496,544

Fiscal year ended March 31, 2024
(Millions of yen)
Shareholders’ equity

Share capital

Balance at beginning of period

14,965

Capital surplus

Retained earnings

Legal capitalsurplus

Other retained Total shareholders’earnings
equityRetained earnings
brought forward

32,893

Total net assets

48,68496,54496,544

Dividends of surplus(5,057)(5,057)(5,057)

Profit

2,899

2,899

2,899

Changes during period

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period–––(2,158)(2,158)(2,158)

14,96532,893

46,526

94,385

94,385- 94 -

Notes to non-consolidated financial statements
Significant accounting policies
1. Valuation basis and methods for assets(1) Securities
Shares of subsidiaries and associates
Stated at cost determined by the moving-average method
Held-to-maturity securities
Amortized cost method (straight-line method)
Available-for-sale securities
Available-for-sale securities other than stocks, etc., without market value
Fair value method (unrealized gains and losses are recognized in a component of net assets, andcosts of securities sold are determined by the moving average method)
Stocks, etc. without market value
Stated at cost determined by the moving-average method(2) Derivatives
Fair value method(3) Inventories
Stated at cost determined by the weighted-average method (the carrying amounts in the balance sheet
are calculated by the method in which carrying amounts are written down due to a decline inprofitability of assets)
2. Depreciation methods for non-current assets(1) Property, plant and equipment (excludes leased assets)
The straight-line method is used.
(2) Intangible assets (excludes leased assets)
The straight-line method is used.
(3) Leased assets
Leased assets in ownership-transferred finance lease transactions
Uses same method as depreciation method adopted for company-owned fixed assets.
Leased assets in non-ownership-transferred finance lease transactions
Uses straight-line method with settings of useful lives as lease period and residual value as zero.
3. Recognition of reserves(1) Allowance for doubtful accounts
As a provision for losses arising from bad debts, allowance for doubtful accounts is provided at theamount expected to be uncollectible based on the historical rate of bad debt for general receivables andbased on the collectability of the receivables for doubtful accounts.
(2) Provision for bonuses
Provision for bonus payments to employees is provided at the amount of projected future bonus
payment to be borne during the current fiscal year.
(3) Provision for retirement benefits
To prepare for payment of retirement benefits to employees, provision for retirement benefits isprovided based on the estimated amounts of retirement benefit obligations and plan assets at the end of
the fiscal year under review.
- 95 -

In calculation of retirement benefit obligations, the benefit formula basis is applied to attribute expected
retirement benefits to periods up to the end of the fiscal year under review.
Past service cost is amortized on a straight-line basis over a period equal to or less than the averageremaining service period of eligible employees (10 years) at the time of occurrence.
Actuarial gains or losses are amortized by the straight-line method from the fiscal year following the
fiscal year in which the gains or losses occurred over a period equal to or less than the averageremaining service period of eligible employees (10 years) at the time of occurrence in each fiscal year.
4. Standard for booking revenue and expenses
In terms of revenue generated from contracts between the Company and customers, the details of major
performance obligations in major businesses and the standard timing of fulfilling performance obligations(and recognizing revenue) are as follows.
The Company will receive the compensation of the transaction within one year of fulfilling performanceobligations and significant financing components are not included.
(1) Reagents and Instruments
In the Reagents and Instruments business, the Group primarily manufactures and sells reagents and sells
instruments. In terms of product sales to domestic customers, the period between shipping and deliveryof the product to the customer is the standard period. Therefore, the Group recognizes revenue at the
point of shipping the product to the customer. In terms of product sales to overseas customers, based on
trade conditions established primarily in Incoterms, etc., the Group recognizes revenue at the point that
the Group delivers the product to the transporting party and is aware the control of product is transferredto the customer.
(2) CDMO
In the CDMO business, the Group is entrusted primarily with services related to regenerative medicine
products, gene analysis, and examinations based on short-term contract services. Revenue is recognized
at a point in time when control is transferred to customers, primarily over acceptance, receipt, or
shipment, depending on the contract.
5. Other significant matters for preparing financial statements(1) Accounting for retirement benefits
Accounting treatment for unrecognized actuarial gains or losses and unrecognized past service cost for
retirement benefits are different from accounting treatment for them in the consolidated financial
statements.
(2) Method of hedge accounting
Deferral hedge is adopted in hedge accounting. Appropriation processing is adopted for transactions thatmeet the requirements for that method in order to hedge foreign currency exchange risks.
Hedging instruments and hedged items
Hedging instrument:

Forward exchange contracts

Hedged items:

Foreign currency-denominated liabilities, corresponding with royalty payments,
etc.

Hedge policy
The currency fluctuation risk of a hedged item in the exchange market is hedged within a certain
range based on accounting rules for the purpose of mitigating the effect of exchange fluctuations on
foreign currency-denominated liabilities.
Method of assessing hedge effectivenessAn exchange contract, a hedging instrument, fixes the cash flows of a hedged item. Therefore, cash
flow fluctuations are offset at the start of the hedging and thereafter. As such, the assessment ofhedge effectiveness is omitted.

- 96 -

Non-consolidated balance sheet
1

Monetary receivables and monetary liabilities of subsidiaries and affiliates (excluding those presented as
separate line items)
Fiscal year ended March 31, 2023
(March 31, 2023)

Fiscal year ended March 31, 2024
(March 31, 2024)¥1,003 million¥1,909 million

Short-term monetary receivables
Short-term monetary liabilities

*2

651

562

Tax purpose reduction entry
The total amount of tax purpose reduction entry that is directly subtracted from non-current assets acquired
using national subsidies, etc. is as follows.
Fiscal year ended March 31, 2023
(March 31, 2023)

Fiscal year ended March 31, 2024
(March 31, 2024)

Buildings¥1,337 million¥1,337 million

Machinery and equipment

3,122

3,122

1

1

524

524

VehiclesTools, furniture and fixtures
Software
Total

1

1

4,987

4,987

Non-consolidated statements of income
1.

Transaction amount with subsidiaries and affiliates

Net sales
Purchase of goods

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥11,609 million¥11,556 million

6,043

5,397

99

29

Transaction besides operatingtransactions*2

Selling expenses comprised 5% in the previous fiscal year and 5% in the current fiscal year while generaland administrative expenses made up 95% in the previous fiscal year and 95% in the current fiscal year.
Major expenses and monetary amount of SG&A expenses

Promotion expenses

Fiscal year ended March 31, 2023
(April 1, 2022 to March 31, 2023)

Fiscal year ended March 31, 2024
(April 1, 2023 to March 31, 2024)¥328 million¥286 million

Provision of allowance for doubtful
accounts(0)(0)

Employees’ salaries and bonuses

2,885

2,634

Provision for bonuses

217

193

Retirement benefit expenses

154

185

Depreciation

438

546

6,214

5,508

508

338

Research and development expenses
Remuneration/contracting fees

- 97 -

*3

Insurance claim income
Fiscal year ended March 31, 2023
Low-quality products due to bad weather during the transfer from overseas occurred in the fiscal year ended
March 31, 2022. The amount of insurance for this damage is booked as “Insurance claim income” inextraordinary income in the fiscal year ended March 31, 2023.

Securities
Fiscal year ended March 31, 2023
Fair value of shares of subsidiaries and affiliates are not included because the shares have no market prices.
The amount of the shares of subsidiaries and affiliate without market prices are recorded in the balance sheet
as follows.
(Millions of yen)
Fiscal year ended
March 31, 2023

Category
Shares of subsidiaries and associates

22,509Investments in capital of subsidiaries and associates

3,704

Fiscal year ended March 31, 2024
Fair value of shares of subsidiaries and affiliates are not included because the shares have no market prices.
The amount of the shares of subsidiaries and affiliate without market prices are recorded in the balance sheet
as follows.
(Millions of yen)
Fiscal year ended
March 31, 2024

Category
Shares of subsidiaries and associates

22,509Investments in capital of subsidiaries and associates

3,704- 98 -Tax effect accounting
1.

Breakdown of deferred tax assets and deferred tax liabilities by major cause
Fiscal year ended
March 31, 2023
(March 31, 2023)

Fiscal year ended
March 31, 2024
(March 31, 2024)

Deferred tax assets
Impairment losses

2.

¥9 million¥9 million

Provision for bonuses

124

126

Provision for retirement benefits

179

218

Accrued business tax

78–

Depreciation

53

35

Asset retirement obligations

53

54

Loss on valuation of inventories

214

86

Other

99

39

Deferred tax assets subtotal

812

570

Valuation allowance

(9)

(9)

Deferred tax assets total

802

560

Deferred tax liabilities

(103)

(154)

Net deferred tax assets (liabilities)

699

405

Breakdown of major items that cause significant differences between the effective statutory tax rate andincome tax rate after applying tax effect accounting
Fiscal year ended
March 31, 2023
(March 31, 2023)

Fiscal year ended
March 31, 2024
(March 31, 2024)

30.0%

30.0%

Effective statutory tax rate
(Adjustments)
Entertainment and other permanently non-deductible
expensesDividend and other permanently non-taxable income

0.0

0.1

(4.7)

(17.5)

Local tax on per capita basis

0.0

0.2

Foreign tax

1.7

4.5

Changes in valuation allowance

(0.3)

–

(6.6)

(1.2)

0.3

1.3

20.5

17.5

Tax credits on experimentation and researchexpenses, etc.
Other
Income tax rate after applying tax effect accounting

Revenue recognition
Information that is the basis for understanding revenue from contracts with customers is omitted here
because it is the same as the information in “Significant accounting policies, 4. Standard for booking revenue
and expenses.”- 99 -

Significant subsequent events
Not applicable.
(iv) Supplementary statements
Detailed schedule of property, plant and equipment and others(Millions of yen)
Category

Type of assets

Depreciation
Balance at Accumulated
during theend of period depreciation
period11,431

186

489

704

10,423

4,394

Structures

900

15

–

79

836

455

2,148

223

298

441

1,632

2,926

0

–

0

0

0

3

3,600

(Note 1)
867

10

1,181

3,276

6,454

5,512

–

–

–

5,512

-

Leased assets

578

–

–

52

525

231

Construction inprogress

2,003(Note 2)
9,403

30

–

11,376–

Total

26,175(Notes 1 and 2)
10,696829

2,459

33,583

14,464

Software

402

40

–

145

296

–

Other

9

20

5

1

22

–

411

60

5

147

319

–

Property,plant and Vehicles
equipment
Tools, furniture andfixtures
Land

Total

Notes:

Decreaseduring theperiodBuildings

Machinery andequipment

Intangible
assetsBalance atIncrease during
beginning of
the period
period1.
2.

It is mainly ¥290 million for a new type of genetic analysis equipment.
The increase during the period for construction in progress is mainly due to ¥7,618 million for the constructionof a dual-use manufacturing facilities.

Detailed schedule of allowances(Millions of yen)
Balance at end of
periodBalance at beginningof period

Increase during theperiodDecrease during theperiodAllowance for doubtful
accounts

0

0

0

0

Provision for bonuses

476

483

476

483

Provision for retirement
benefits

597

148

17

728

Category(2) Components of major assets and liabilities
This information has been omitted, as the consolidated financial statements have been prepared.

- 100 -

(3) Other(i)

Status after closing date
Not applicable.

(ii) Legal action
As of the submission of the Annual Securities Report, there is no significant legal action against theCompany.

- 101 -

VI. Overview of operational procedures for shares of the reporting company
Fiscal year

From April 1 to March 31

Annual General Meeting of
Shareholders

June

Record date

March 31

Record dates for dividends ofsurplus

September 30
March 31

Number of shares per share unit

100 shares

Purchase of shares less than one
unit
Office for handling business

Shareholder register
administrator
Handling charge for purchase(Handling of shares less than one unit recorded at special account)
1-3-3 Marunouchi, Chiyoda-ku, Tokyo
Securities Agent Department, Head Office, Mizuho Trust & Banking Co., Ltd.
(Handling of shares less than one unit recorded at transfer account other than special
account)
Account management institution that opened transfer account (Securities company,
etc.)(Shareholder register administrator and special account management institution)
1-3-3 Marunouchi, Chiyoda-ku, Tokyo
Mizuho Trust & Banking Co., Ltd.
No charge

Method of public noticeElectronic public notice will be made. However, if it is impossible to publish public
notices electronically because of an accident or other unavoidable circumstances, thepublic notices shall be made by publication in the Nihon Keizai Shimbun.
Electronic posting location: https://www.takara-bio.co.jp (Company homepage)

Special benefits for shareholders

Not applicable.

- 102 -

VII.

Reference information for reporting company

1. Information on parent company of reporting company
The Company has no parent company, etc. as stipulated by Article 24-7, paragraph 1 of the Financial
Instruments and Exchange Act.
2. Other reference information
The Company has submitted the following documents between the beginning of the current fiscal year andthe date of submission of the Annual Securities Report.
(1) Annual Securities Report, attached documents, and confirmation documents
Submitted for the 21st fiscal year (April 1, 2022 to March 31, 2023) to the Director-General of the Kanto
Local Finance Bureau on June 29, 2023.
(2) Internal controls report and attached documents
Submitted to the Director-General of the Kanto Local Finance Bureau on June 29, 2023.
(3) Quarterly reports and confirmation documents(Q1 of 22nd fiscal year) (April 1, 2023 to June 30, 2023) Submitted to the Director-General of the Kanto
Local Finance Bureau on August 10, 2023.
(Q2 of 22nd fiscal year) (July 1, 2023 to September 30, 2023) Submitted to the Director-General of the
Kanto Local Finance Bureau on November 10, 2023.
(Q3 of 22nd fiscal year) (October 1, 2023 to December 31, 2023) Submitted to the Director-General of
the Kanto Local Finance Bureau on February 14, 2024.
(4) Temporary reports
Submitted to the Director-General of the Kanto Local Finance Bureau on June 30, 2023.
Temporary reports are based on Article 19, paragraph 2, No. 9-2 (Results of exercising voting rights inGeneral Meeting of Shareholders) of the Cabinet Office Order on Disclosure of Corporate Affairs.

- 103 -

Part Ⅱ.

Information on insurance company, etc. of reporting company

Not applicable.

- 104 -