Annual Securities Report(Pursuant to Article 24, Paragraph 1 of the Financial Instruments and Exchange Act)For the 100th fiscal year (From January 1, 2022 to December 31, 2022)

Kyowa Kirin Co., Ltd.
1-9-2 Otemachi, Chiyoda-ku, Tokyo

This document is a reference translation of the Annual Securities Report submitted to the Prime Minister
pursuant to Article 24-1 of the Financial Instruments and Exchange Act. In the event of any discrepancy
between this translation and the Japanese original, the Japanese original shall prevail.
The forward-looking statements contained in this document are based on the information currently available to
the Company and on certain assumptions deemed to be reasonable by management. As such, they do notconstitute guarantees by the Company of future performance. Actual results may differ materially from theseprojections for a wide variety of reasons.
The Japanese original Annual Securities Report was submitted to the Director-General of the Kanto Local
Finance Bureau on March 9, 2023, with an audit report expressing an unqualified opinion by KPMG AZSA
LLC.

(E00816)

Table of Contents
Page[Cover page]
Part I. Company Information ................................................................................................................................................. 1
I. Overview of Company .................................................................................................................................................... 1
1
Key Financial Data ............................................................................................................................................... 1
2
History .................................................................................................................................................................. 33
Description of Business ........................................................................................................................................ 4
4
Subsidiaries and Associates ................................................................................................................................ 6
5
Employees ........................................................................................................................................................... 8
II. Overview of Business .................................................................................................................................................. 10
1
Management Policy, Business Environment, and Future Challenges ................................................................ 10
2
Business Risk Factors ........................................................................................................................................ 14
3
Management Analysis of Financial Position, Business Performance and Cash Flows....................................... 26
4Material Contracts, Etc. ...................................................................................................................................... 36
5
Research and Development Activities ................................................................................................................ 40
III. Information about Facilities......................................................................................................................................... 43
1
Overview of Capital Expenditures ...................................................................................................................... 43
2
Major Facilities ................................................................................................................................................... 43
3
Planned Addition, Retirement, and Other Changes of Facilities ......................................................................... 44
IV. Information about Reporting Company ...................................................................................................................... 45
1
Company’s Shares, Etc. ..................................................................................................................................... 45(1)
Total number of shares, etc. .......................................................................................................................... 45(2)
Share acquisition rights .................................................................................................................................. 46(3)
Exercises of moving strike convertible bonds, etc. ......................................................................................... 49(4)
Changes in total number of issued shares, share capital and additional paid-in capital................................. 49(5)
Shareholding by shareholder category ........................................................................................................... 50(6)
Major shareholders ........................................................................................................................................ 51(7)
Voting rights ................................................................................................................................................... 52
2
Acquisition and Disposal of Treasury Shares ..................................................................................................... 53
3
Dividend Policy ................................................................................................................................................... 54
4
Corporate Governance ....................................................................................................................................... 55(1)
Overview of corporate governance ................................................................................................................ 55(2)
Directors and Audit & Supervisory Board Members ....................................................................................... 62(3)
Audits ............................................................................................................................................................. 77(4)
Officers’ remuneration, etc. ............................................................................................................................ 80(5)Shareholdings ................................................................................................................................................ 84
V. Financial Information ................................................................................................................................................... 86
1
Consolidated Financial Statements, Etc. ............................................................................................................ 87(1)
Consolidated financial statements.................................................................................................................. 87(2)
Other ............................................................................................................................................................ 147
2
Financial Statements, Etc. ................................................................................................................................ 148(1)
Financial statements .................................................................................................................................... 148(2)
Components of major assets and liabilities .................................................................................................. 159(3)
Other ............................................................................................................................................................ 160
VI. Outline of Share-related Administration of Reporting Company ............................................................................... 161
VII. Reference Information of Reporting Company ........................................................................................................ 162
1
Information about Parent of Reporting Company ............................................................................................. 162
2
Other Reference Information ............................................................................................................................ 162
Part II. Information about Reporting Company’s Guarantor, etc. ...................................................................................... 163

[Cover page]
Document title:

Annual Securities Report

Clause of stipulation:

Article 24, Paragraph 1 of the Financial Instruments and Exchange Act

Place of filing:

Director-General of the Kanto Local Finance Bureau

Filing date:

March 9, 2023

Fiscal year:

The 100th fiscal year (from January 1, 2022 to December 31, 2022)

Company name:

協和キリン株式会社(Kyowa Kirin Kabushiki Kaisha)Company name in English:

Kyowa Kirin Co., Ltd.

Title and name of representative:

Masashi Miyamoto,
Representative Director, President and Chief Executive Officer

Address of registered head office:1-9-2 Otemachi, Chiyoda-ku, Tokyo

Telephone number:+81-3-5205-7200

Name of contact person:

Motohiko Kawaguchi,
Managing Executive Officer & Global Finance Head

Nearest place of contact:

1-9-2 Otemachi, Chiyoda-ku, Tokyo

Telephone number:+81-3-5205-7200

Name of contact person:

Motohiko Kawaguchi,
Managing Executive Officer & Global Finance Head

Place for public inspection:

Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)

Part I. Company Information
I. Overview of Company
1

Key Financial Data
(1) Key consolidated financial dataTerm

96th fiscal year 97th fiscal year 98th fiscal year 99th fiscal year 100th fiscal year

Fiscal year-end

December 31, December 31, December 31, December 31, December 31,
2018
2019
2020
2021
2022

Revenue(Millions ofyen)

271,510305,820

318,352

352,246

398,371

Profit before tax(Millions ofyen)

66,84144,49252,26360,05067,572

Profit attributable to owners (Millions ofof parentyen)54,41467,08447,02752,34753,573Comprehensive income
attributable to owners ofparent(Millions ofyen)

49,52073,162

43,61162,75150,654Equity attributable toowners of parent(Millions ofyen)

649,621678,250

698,396

737,162

762,826

Total assets(Millions ofyen)

741,982

784,453

801,290921,872

939,881

Equity attributable toowners of parent per share(Yen)

1,186.65

1,263.16

1,300.12

1,371.90

1,419.27

Basic earnings per share

(Yen)

99.40

124.57

87.56

97.43

99.68

Diluted earnings per share

(Yen)

99.30

124.46

87.50

97.39

99.66

Ratio of equity attributableto owners of parent to total
assets

(%)

87.6

86.5

87.2

80.0

81.2

Return on equity
attributable to owners ofparent

(%)

8.6

10.1

6.8

7.3

7.1

(Times)

20.9

20.7

32.1

32.2

29.4

Net cash provided by (used (Millions ofin) operating activities
yen)

56,18153,65539,50286,54848,672

Net cash provided by (used (Millions ofin) investing activities
yen)(39,929)(933)

252,559(11,363)(17,185)

Net cash provided by (used (Millions ofin) financing activities
yen)(16,501)(47,371)(26,003)(28,446)(29,032)

Cash and cash equivalents
at end of period(Millions ofyen)

15,867

20,762

287,019

335,084

339,194

Number of employees(Persons)

7,242

5,267

5,423

5,752

5,982

Price-earnings ratio

Notes:

1. The consolidated financial statements are prepared in accordance with the International Financial ReportingStandards (“IFRS”).
2. Figures presented above have been rounded to the nearest million yen.
3. The Bio-Chemicals business has been classified as a discontinued operation in the 97th fiscal year.
Accordingly, revenue and profit before tax for the 96th fiscal year are the amounts for continuing operations
excluding discontinued operations.

-1-(2) Key financial data of reporting company
100th fiscal
year
December 31, December 31, December 31, December 31, December 31,
2018
2019
2020
2021
2022

Term

96th fiscal year 97th fiscal year 98th fiscal year 99th fiscal year

Fiscal year-end
Net sales(Millions ofyen)

215,154

246,274

252,933

237,590

253,790

Ordinary profit(Millions ofyen)

46,66073,36349,56235,22837,287

Profit(Millions ofyen)

47,86091,473

31,25066,36631,047

Share capital(Millions ofyen)

26,74526,74526,74526,74526,745

Total number of issued
shares(Shares)

576,483,555

540,000,000

540,000,000

540,000,000

540,000,000

Net assets(Millions ofyen)

502,413549,020555,730

596,921

601,918

Total assets(Millions ofyen)

569,900

618,306

687,680

794,087

806,058(Yen)

916.31

1,021.09

1,033.43

1,110.13

1,119.48

35.00

42.00

44.00

46.00

51.00

[15.00][20.00][22.00][23.00][24.00]Net assets per share
Dividend per share[Interim dividend paid pershare](Yen)

Basic earnings per share

(Yen)

87.43

169.8558.18

123.52

57.77

Diluted earnings per share

(Yen)

87.34

169.71

58.15

123.4757.75

Equity ratio

(%)

88.0

88.7

80.7

75.1

74.6

Return on equity

(%)

9.8

17.4

5.7

11.1

5.2

Price-earnings ratio(Times)

23.8

15.1

48.4

25.4

52.3

Dividend payout ratio

(%)

40.0

24.7

75.6

37.2

88.3

Number of employees(Persons)

3,918

3,619

3,736

3,857

4,002

Total shareholder return

(%)

96.9

121.6

134.7

151.5

148.6

[Comparative indicator:
TOPIX including dividends](%)[84.0][99.2][106.6][120.2][117.2]Highest share price

(Yen)

2,478

2,594

3,060

4,240

3,515

Lowest share price

(Yen)

1,894

1,674

1,849

2,687

2,604

Notes:

1. The financial statements for the reporting company were prepared in accordance with Japanese GAAP.
2. Figures presented above have been rounded to the nearest million yen.
3. With respect to the year-end dividend of ¥27, which is included in the dividends per share of ¥51 for the 100th
fiscal year, a proposal will be submitted at the Ordinary General Meeting of Shareholders scheduled to beheld on March 24, 2023.
4. The highest and lowest share prices were those quoted on the Tokyo Stock Exchange (Prime Market) on andafter April 4, 2022, and prior to that, those quoted on the Tokyo Stock Exchange (First Section).
-2-

2

History

The Company traces its roots to the establishment of the Kyowa Research Laboratories (1937), headed by
Benzaburo Kato, and the formation of its parent organization, the Kyowakai Association (1936). Later, in accordancewith commercialization resulting from the research and development by this research laboratory, requests from thegovernment, etc., Kyowa Kagaku Kogyo Co., Ltd. (1939) and Toa Kagaku Kogyo Co., Ltd. (1943) were established.
These companies merged (April 1945) and changed the name (October 1945) of the merged company to Kyowa
Sangyo Co., Ltd. after the end of the war.
July 1949
Pursuant to the Enterprise Reorganization Act, dissolved Kyowa Sangyo Co., Ltd. and, as a secondary
company, established Kyowa Hakko Kogyo Co., Ltd. (share capital: ¥50 million)
August 1949

Listed the Company’s shares on the Tokyo Stock Exchange

April 1951

September 1959

Introduced manufacturing technology for Streptomycin from the U.S. pharmaceutical company Merck &Co., Inc.
Invented and announced commercialization of a manufacturing method for monosodium glutamate
using fermentation
Launched the anticancer agent Mitomycin C

April 1981

Established Kyowa Medex Co., Ltd.

October 1992

Established Kyowa Pharmaceutical, Inc. (presently Kyowa Kirin, Inc.) in the United States

September 2002

Transferred liquor operations to Asahi Breweries, Ltd.

February 2003

Established BioWa, Inc. in the United States

April 2004

January 2011

Split off and transferred the Chemicals operations to Kyowa Yuka Co., Ltd., which changed its tradename to Kyowa Hakko Chemical Co., Ltd.
Established Kyowa Hakko Food Specialties Co., Ltd. (later known as Kirin Kyowa Foods Company,
Limited) through an incorporation-type company split of the Food operations
Made Kirin Pharma Company, Limited a wholly owned subsidiary of the Company through a shareexchange whereby Kirin Holdings Company, Limited became the parent company of the Company,
holding 50.10% of the total number of outstanding shares of the Company
In addition, made Kirin Pharma Company, Limited’s subsidiaries Kirin Kunpeng (China) BioPharmaceutical Co., Ltd. (presently Kyowa Kirin China Pharmaceutical Co., Ltd.), JEIL-KIRINPHARMACEUTICAL INC. (presently Kyowa Kirin Korea Co., Ltd.), Kyowa Kirin Pharmaceuticals(Taiwan) Co., Ltd. (presently Kyowa Kirin (Taiwan) Co., Ltd.), etc. consolidated subsidiaries of theCompany
Established KYOWA HAKKO BIO CO., LTD. through an incorporation-type company split of the BioChemicals businessConducted an absorption-type merger of Kirin Pharma Company, Limited, and changed its trade namefrom Kyowa Hakko Kogyo Co., Ltd. to Kyowa Hakko Kirin Co., Ltd.
Transferred all shares of Kirin Kyowa Foods Company, Limited to Kirin Holdings Company, Limited

March 2011

Transferred all shares of Kyowa Hakko Chemical Co., Ltd. to KJ Holdings Co., Ltd.

April 2011

Acquired all shares of ProStrakan Group plc (presently Kyowa Kirin International plc) in the UK andmade it a wholly owned subsidiary
Established FUJIFILM KYOWA KIRIN BIOLOGICS Co., Ltd. (development, manufacturing, and salesof biosimilars), a joint venture with FUJIFILM Corporation
Acquired all shares of Archimedes Pharma Limited in the UK and made it a wholly owned subsidiary

September 1956

April 2005
April 2008

October 2008

March 2012
August 2014
January 2018
April 2019
July 2019
April 2022

Transferred 66.6% of the shares of Kyowa Medex Co., Ltd. to Hitachi Chemical Co., Ltd. (Transferred
all the residual interest in April 2021)
Transferred 95% of the shares of KYOWA HAKKO BIO CO., LTD. to Kirin Holdings Company, Limited(Transferred all the residual interest in January 2023)
Changed its trade name from Kyowa Hakko Kirin Co., Ltd. to Kyowa Kirin Co., Ltd.
Transitioned to the Tokyo Stock Exchange Prime Market from the Tokyo Stock Exchange First Section
due to the market restructuring of the Tokyo Stock Exchange.

-3-

3

Description of Business

The Company and its subsidiaries and associates are comprised of the Company, 39 subsidiaries, two equity-accounted
investees, and one parent company (Kirin Holdings Company, Limited), and operate businesses related topharmaceuticals. Descriptions of the main businesses and the positions of the Company and major subsidiaries andassociates in these businesses are as follows.
<Description of main businesses>
The Company conducts manufacturing and sales of ethical pharmaceuticals. Information regarding subsidiaries andassociates is provided in “I. Overview of Company, 4 Subsidiaries and Associates.”
Note: Unless specifically stated otherwise, in this report, the “Group” refers to the Company and its 39 consolidated
subsidiaries.

-4-

<Business flow diagram>(Parent Company)
Kirin Holdings Company, Limited

Provision ofmerchandise andservices

Kyowa Kirin Co.,
Ltd.

Japan
*
Kyowa Kirin Frontier Co., Ltd.
(Manufacturing and sales of ethical pharmaceuticals)*
Kyowa Kirin plus Co., Ltd.
(Contracted services, wholesale and retail sales, and insurance
agency business)** FUJIFILM KYOWA KIRIN BIOLOGICS Co., Ltd.
(Development, manufacturing, and sales of biosimilars)
and others
North America* Kyowa Kirin USA Holdings, Inc.
(Supervision and management of specific subsidiaries)* Kyowa Kirin, Inc. (Note)(Research and development, and sales of ethicalpharmaceuticals)*
Kyowa Kirin Canada, Inc.
(Sales of ethical pharmaceuticals)* BioWa, Inc.
(Out-licensing of antibody technology)
and others
EMEA (Europe, the Middle East, Africa)* Kyowa Kirin International plc(Supervision and management of specific subsidiaries)
and others

Supply of
products andraw materials

Asia/Oceania*
Kyowa Kirin Asia Pacific Pte. Ltd.
(Supervision and management of specific subsidiaries, and salesof ethical pharmaceuticals)* Kyowa Kirin China Pharmaceutical Co., Ltd.
(Manufacturing and sales of ethical pharmaceuticals)*
Kyowa Kirin Korea Co., Ltd.
(Sales of ethical pharmaceuticals)*
Kyowa Kirin Taiwan Co., Ltd.
(Sales of ethical pharmaceuticals)*
Kyowa Kirin Hong Kong Co., Limited(Sales of ethical pharmaceuticals)
and others* Consolidated subsidiary** Equity-accounted investee

-5-

4

Subsidiaries and Associates(1) Consolidated subsidiaries

Name

Address

Sharecapital orinvestments
in capital(Note 1)
Kyowa Kirin FrontierCo., Ltd.

Chiyoda-ku, Tokyo(Millions of
yen)
100

Kyowa Kirin plus Co.,Ltd.

Nakano-ku, Tokyo(Millions of
yen)
113

(Note 1)
Kyowa Kirin USA
Holdings, Inc.

New Jersey, UnitedStates(Notes 1 and 5)
Kyowa Kirin, Inc.

(Thousandsof US
dollars)
76,300(Thousands
New Jersey, Unitedof US
Statesdollars)0

PercentRelationshipage of
Interlockvoting
Main businesses
ing ofFinancialBusinessrightsofficers, assistance relationshipowningetc.
(%)
The Company
manufactures
Manufacturing andand provides
sales of ethical
100.0
Yes
–
services forpharmaceuticals
this company
under contract
Contracted services,
The Company
wholesale and retailoutsources
100.0
Yes
–
sales, and insurance
services toagency businessthis company
Supervision andmanagement ofspecific subsidiaries

100.0

R&D and Sales of
ethicalpharmaceuticals(Canadian
Sales of ethicaldollars)
pharmaceuticals
100

Facilityleasing andothers

–

–

Yes

–

–

–

(Note 2)100.0
(100.0)No

Lendingof funds

The Company
sells products
to thiscompany–(Note 2)100.0
(100.0)

No

–

–

–

–

Kyowa Kirin Canada,Inc.

British Columbia,
Canada

BioWa, Inc.

(Thousands
New Jersey, Unitedof US Out-licensing ofStatesdollars) antibody technology
10,000(Note 2)100.0
(100.0)Yes–

The Company
providestechnology,
etc. to thiscompany

Kyowa Kirin
International plc

Galashiels, UK(Thousands Supervision andof pounds) management of
13,849 specific subsidiaries

100.0

Yes

–

–

–

The Company
sells products
to thiscompany–(Note 1)
Kyowa Kirin Asia
Pacific Pte. Ltd.

Singapore(Note 1)
Kyowa Kirin China
Pharmaceutical Co.,Ltd.

Shanghai, China

Kyowa Kirin Korea
Co., Ltd.

Seoul, Korea

Kyowa Kirin Taiwan
Co., Ltd.

Taipei, Taiwan

Kyowa Kirin Hong
Kong Co., Limited

Hong Kong(ThousandsofSingapore
dollars)
123,045(Thousandsof US
dollars)
29,800(Millionsof Korean
won)
2,200
(Thousandsof Taiwan
dollars)
262,450(Thousandsof HongKongdollars)
6,000Supervision andmanagement ofspecific subsidiaries
Sales of ethicalpharmaceuticals

100.0

Yes

Lendingof funds

Manufacturing andsales of ethicalpharmaceuticals(Note 2)100.0
(100.0)

Yes

–

–

–

Sales of ethicalpharmaceuticals

100.0

Yes

Lendingof funds––

Sales of ethicalpharmaceuticals(Note 2)100.0
(100.0)Yes

Lendingof funds––

Sales of ethicalpharmaceuticals(Note 2)100.0
(100.0)No

Lendingof funds––

27 other companies-6-(2) Equity-accounted investee

Name

Address(Note 3)
FUJIFILM KYOWA
Chiyoda-ku, TokyoKIRIN BIOLOGICS
Co., Ltd.

Sharecapital orinvestments
in capital

Main businesses(Millionsof yen)100

Development,
manufacturing, andsales of biosimilars

PercentRelationshipage ofvotingInterlockFinancial
Businessrightsing ofassistance relationshipowningofficers(%)
The Company
providestechnology tothis company,
Underwrit
and
50.0
Yes
ing ofmanufacturesbonds
and provides
services forthis company
under contract

Facilityleasing andothers–One other company(3) Parent company
Name

Address(Note 4)
Kirin Holdings
Nakano-ku, Tokyo
Company, Limited

Notes:

Share
capital orinvestments
in capital

Main businesses(Millionsof yen)102,046

Control andmanagement ofbusiness activitiesof operatingcompanies as theholding company

PercentRelationshipage of
Interlockvoting
FinancialBusiness
ing ofrightsassistance relationshipowned (%) officers

53.8

Yes

Lendingof funds–

Facilityleasing andothers

–1. These companies are specified subsidiaries.
2. For percentage of voting rights owning, figures in parentheses represent the percentage of indirect ownershipof voting rights.
3. The company indicated has a negative net worth with liabilities exceeding assets by ¥42,154 million(Japanese GAAP) as of December 31, 2022.
4. The company indicated submits an annual securities report.
5. For Kyowa Kirin, Inc., revenue (excluding intercompany revenue among consolidated companies) exceeds
10% of consolidated revenue.
Key profit and loss information(1) Revenue¥116,323 million(2) Profit before tax¥6,271 million(3) Profit¥5,337 million(4) Total equity¥13,010 million(5) Total assets¥91,384 million

-7-

5

Employees(1) Information about consolidated companies(As of December 31, 2022)
Number of employees(Persons)

Segment name
Pharmaceuticals

5,982
Total

5,982

Notes: 1. The Group consists of only the one reportable segment, which is the Pharmaceuticals business.
2. The number of employees represents individuals working within the Group (excluding employees
seconded outside the Group from the Group, but including employees seconded to the Group fromoutside the Group). Executive Officers and temporary employees (employees rehired after retiring,
contract employees, part-time employees other non-regular employees) are excluded.
3. The number of temporary employees is omitted because the total number of temporary employees isless than 10% of the total number of employees.
(2) Information about reporting company
Number of employees(Persons)

Average age(Years old)

4,002

Average years of service(Years)42.8(As of December 31, 2022)
Average annual salary
(Yen)

16.7

9,024,091

Number of employees(Persons)

Segment name
Pharmaceuticals

4,002
Total

4,002

Notes: 1. The number of employees represents individuals working within the Company (excluding employees
seconded outside the Company from the Company, but including employees seconded to the Company
from outside the Company). Executive Officers and temporary employees (employees rehired after
retiring, contract employees, part-time employees other non-regular employees) are excluded.
2. The number of temporary employees is omitted because the total number of temporary employees isless than 10% of the total number of employees.
3. The average annual salary includes bonuses and surplus wages.
(3) Labor union
The Kyowa Kirin Labor Union is organized in the Group, and there were 2,810 union members as of December 31,
2022.
Labor and management maintain a cooperative relationship based on mutual trust.
(Reference) Empowering women
Given the ongoing decrease in working-age population as a result of declining birthrates and population aging,encouraging women to pursue broader career opportunities is deemed an urgent challenge and one of the growthstrategies of the Japanese government. In an effort to respond to social expectations and enhance corporate
competitiveness through employee diversification, the Kyowa Kirin Group is striving to empower its female
employees.
In recognition of its initiatives, Kyowa Kirin received the “Class 3 Eruboshi” accreditation from the Minister of
Health, Labour and Welfare based on the Act on Promotion of Women’s Participation and Advancement in the
Workplace in 2016 (Act No. 64 of 2015). This evaluation has been maintained as of December 31, 2022.

-8-

< Performance in the fiscal year under review related to the Act on Promotion of Women’s Participation andAdvancement in the Workplace>
The status of the reporting company is as follows.
(Ratio of female managers)(As of December 31, 2022)
Ratio of female managers
13.4%
Note:

Calculated excluding employees seconded outside the Company from the Company, but including
employees seconded to the Company from outside the Company.

(Rate of use of childcare leave use by gender)
Fiscal year ended December 31, 2022
Rate of childcare leave use Rate of childcare leave use
by menby women
60.9%

108.7%

Notes: 1. Calculated excluding employees seconded outside the Company from the Company and employees
seconded to the Company from outside the Company.
2. Calculated as the ratio of the number of employees who used childcare leave in the fiscal year underreview to the number who gave birth and whose partners gave birth in the fiscal year under review.
The leave usage rate may exceed 100% because given that it includes childcare leave taken in thefiscal year under review by employees who gave birth or those whose partners gave birth in the prioryear.
(Wage difference between men and women)
Fiscal year ended December 31, 2022
Women’s wages
as a proportion of men’s
Regular employees

75.8%

Irregular employees

58.3%

All employees

74.7%

Notes: 1. With respect to regular and irregular employees alike, the Company does not differentiate between men
and women in terms of arrangements such as wage regulations, operational matters such as
promotions and salary increases, and hiring criteria.
2. Calculated for regular employees excluding employees seconded outside the Company from theCompany and employees seconded to the Company from outside the Company. The Company
establishes wage levels that vary depending on occupational categories and ranks. Variation in wages
between men and women arises due to differences in the number of employees in each occupational
category and rank.
3. The figure for irregular employees is calculated for temporary employees (employees rehired after
retiring, contract employees, part-time employees and others). Variation in wages hinges on distinctionsin terms of employment status such as those pertaining to employees rehired after retiring, contract
employees, and part-time employees. There is greater variation in wages between male and female
contract employees than is the case with regular employees given a high proportion of female contract
employees in manufacturing facilities. Because part-time employees are few in number, their wages
have been calculated based on actual wages paid without conversion to full-time equivalents.
4. Wages are calculated including bonuses and surplus wages.

-9-II. Overview of Business
1

Management Policy, Business Environment, and Future Challenges
Forward-looking statements in this document are based on the judgment of the Group at the end of the current fiscal
year (as of December 31, 2022).
(1) Basic management policy
The Kyowa Kirin Group’s management philosophy is to contribute to the health and well-being of people aroundthe world by creating new value through the pursuit of advances in life sciences and technologies.
We interpret “the new value” advocated in the management philosophy as meaning Creating Shared Value (CSV)with society. The Group practices CSV management that enhances corporate value by use of its initiatives that
address social issues to balance “the creation of social value” with “the creation of economic value.”
In addition, our core values, which consist of the core concept of “Commitment to Life” and three key words, are a
way of thinking and an attitude that supports all those working in the Kyowa Kirin Group. Our goal is for these to
be shared and practiced by everybody, so that we continue to be a corporate group that retains the trust ofsociety.

Management Philosophy
The Kyowa Kirin Group strives to contribute to
the health and well-being of people around theTransform lives with passion and excitement.
Challenge the status quo in all of our work.

world by creating new value through the pursuitof advances in life sciences and technologies.

Core Values

Work for the most precious
presence on this planet.
Create value for patients,
caregivers, healthcare
professionals, andcustomers.

“Core Values” are a way of thinking and attitude
that supports the activity of each officer andemployee belonging to the Kyowa Kirin Group.
It consists of core concept “Commitment to Life”
and three key words.

Do the right thing. Be sincere andethical consistently. Make a betterworld through good businesspractices.

- 10 -

One for all, all for one. Workin diverse teams and respect
each other. Go beyond
boundaries and collaborate
with stakeholders.

(2) Priority business and financial challenges
In recent years the environment in which the pharmaceutical industry operates has experienced detrimental
changes such as the continued reduction of medical costs, widespread measures for promoting generics, andrising costs and more complex processes for new drug development. On the other hand, there have been
supportive factors, such as more substantial systems to evaluate innovations including the priority review system
for groundbreaking new drugs, and advances in science and technology leading to new drug discovery
techniques that enable groundbreaking therapies. There are still people all over the world waiting expectantly forgroundbreaking new drugs to satisfy unmet medical needs. Furthermore, with dramatic changes taking place inthe social environment as a whole, such as the advance and penetration of digital technology, and diversificationin points of customer contact, new medical demands are emerging.
In such an environment, the Company has worked to maximize the value of global strategic products, such as
Crysvita and POTELIGEO, and especially in the United States, steadily promoting the preparations for own salesof Crysvita from 2023. At the same time, through the promotion of development of KHK4083 (generic name:Rocatinlimab), a next-generation global strategic drug, and KHK7791 (generic name: Tenapanor hydrochloride),
RTA402 (generic name: Bardoxolone methyl) and other new drugs for the Japanese market, research anddevelopment of KHK4951(generic name: Tivozanib) and other early-stage development products for expanding
pipelines, and strengthening of activities to acquire new pipelines, we will execute our strategy for continuing tocreate groundbreaking new drugs.
The Company is working to achieve growth as a Japan-based global specialty pharmaceutical company inaccordance with the Vision for 2030, which was announced in February 2021 in conjunction with the five-year
Medium Term Business Plan, and the strategies for achieving this vision.
<FY2021-2025 Medium Term Business Plan>

Maximize the value of global products
Establish framework to ensure stable global supplies
Build a drug pipeline to drive growth beyond 2025

Providepharmaceuticals for
unmet medical
needs






Launch services that go beyond pharmaceuticals
Foster a corporate culture suited to global businessdevelopment

Address patient-centric
healthcare needsMaximize the value of
G3B
Continue to create
groundbreaking new
drugs

Patient advocacy
Provide value that goesbeyond pharmaceuticals

Retain the trust of society

Ensure stable supplies
of high-quality
pharmaceuticals
Help to protect the
global environment

Reinforce human resources and structures that support the creation of Life-changing value

Cultivate human resources
Strengthen organizations
Build digital platforms- 11 -

(Providing drugs that satisfy unmet medical needs)
In preparation for maximizing the value of global strategic products, we will move forward with measures forpenetrating markets, centered on Europe and the U.S., to expand our business regions. We will continue tostrengthen the structure that enables close cooperation between different divisions and subsidiaries andassociates at the global level, and provide new drugs under the KYOWA KIRIN brand to patients all over theworld.
On the other hand, in research and development we aim to blend the technological expertise we haveaccumulated with our in-depth knowledge of disease to create new medical value and speed up the process ofdrug discovery. On the technological pillar, we are gradually building platforms that utilize various modalities*1,such as next-generation antibody technology. In addition, on the disease pillar, by blending our accumulated
knowledge of the science of disease with technology, we will continue to address the challenge of providing drugs
that satisfy unmet medical needs. In addition to this, we will continue to aim for creating life-changing value*2 byaccelerating and strengthening innovation through drug discovery technology that actively utilizes open
innovation, through the acquisition of new drug targets, and furthermore through Corporate Venture Capital (CVC)
activities we started in 2022.
*¹ Modalities:
Classes of drug discovery technologies (methods and means) that facilitate the realization of the envisioned
therapeutic concept.

*² Life-changing value:
Make patients smile through dramatic improvements in quality of life by identifying the unmet medical needsof people battling with medical conditions, and by creating and supplying new drugs or services that help
them overcome those challenges.

2030

2025
Maximize the Value of
Global Strategic Products

Accelerate Growth by Next-generation
Global Products

Generate Sustained Growth andAchieve our New Vision for Kyowa Kirin

KHK4083
KW-6356
ME-401

Expand Sales of Global Strategic Products to Drive Growth
Generate Revenue from Existing Products and the Launch of New Local Products

FY2021-2025 Medium Term Business Plan

2026-2030● Strengthen the global● Accelerate growth as abusiness foundation to
GSP
support further leap
● Strive to create new value beyond pharmaceuticals● Become a GSP trusted even more by patients● Create new drugs that offer Life-changing
value● Enhance ability to create new value

Reinforce and Maintain Human Resources and Structures that Support the Creation of Life-changing Value(Address patient-centric healthcare needs)
In order to make patients smile, we will promote Patient Advocacy Activities*³ globally, to address patient-centric
healthcare needs. By providing disease awareness activities and support tools for patients, we will work to resolve
unmet medical needs. By actively promoting activities in Japan and abroad through the participation in the “STEP
Community” established by ASrid, a non-profit organization dedicated to connecting various stakeholders in thefield of rare and intractable diseases, and the maintenance and reinforcement of relationships with patientadvocacy groups and the like in various countries, we will identify issues and healthcare needs that patients andhealthcare professionals feel should be addressed and strengthen activities for making patients smile.
Furthermore, in order to make patients smile, we are pursuing the creation of value from a longer-term perspectivethat goes beyond pharmaceuticals. In domains where we can leverage our strengths, as well as utilizing the data
we have accumulated and deepening our understanding of patients to resolve issues in areas peripheral to our- 12 -

pharmaceutical products, we will leverage contact points arising from the Kirin Group’s initiatives in the field ofhealth science, and work to create new value that enhances the patient’s quality of life.
*³ Patient Advocacy Activities:
These are activities for promoting sound public understanding of medical conditions through communicationand cooperation with patient and healthcare professional communities. An additional goal of the activities is tomake patients smile by working to address unmet medical needs through Kyowa Kirin’s value chain.
(Retain the trust of society)To reliably supply high-quality pharmaceuticals to patients who need them worldwide, we are working to establish
a robust production system while strengthening a quality assurance system and supply-chain management. In
addition, we will continue to respond appropriately to issues regarding stable supply structures in implementing
both in-house and contracted manufacturing.
In response to climate change at the global level, the Company will work in conjunction with the Kirin Group
Environmental Vision 2050, promoting continuous energy-saving programs (also covering capital expenditures)
and adopting and expanding the use of renewable energy among others. Through initiatives such as these we
seek to achieve net zero greenhouse gas emissions across the value chain, to actively tackle issue of theprotection of the global environment to be handed over to the next generation.
In light of the recommendations of the “Task Force on Climate-related Financial Disclosure (TCFD),” the Company
will continue to manage and evaluate risks and opportunities related to climate change, and disclose information
appropriately.
We have established the group human rights policy which provides the basis for our initiatives for corporate
business and human rights based on the “Guiding Principles on Business and Human Rights” of the United
Nations. We will further promote the initiatives to respect human rights.
In addition, we have appointed the majority of Directors as Outside Directors, aiming to further strengthen
corporate governance. We will continue to work on strengthening governance.
*4 Human Rights Policy
The Company’s website: https://www.kyowakirin.com/sustainability/human_rights/index.html (in Japanese)(Reinforce human resources and structures that support the creation of life-changing value)
As we expand our business globally, we will establish a business platform, putting in place a structure that will
enable the Company to achieve global and sustainable growth through such measures as the maximization of
product value, the creation of a substantial development pipeline, and the stable supply of products.
Specifically, in addition to our efforts to reinforce risk management and initiatives to reform our corporate culturethat have already begun, we will continue to work to strengthen functions globally, such as through development
of digital platforms and proactive investments in human resources that are necessary for growth as a Japan-based
global specialty pharmaceutical company. Based on the Global DE&I Statement (D: Diversity, E: Equity, I:
Inclusion) we formulated in 2022, a cohesive but highly diverse team will open the way to creating life-changing
value.

- 13 -

2

Business Risk Factors
1.

Risk management system and process for identifying principal risks
The Group promotes its business activities under its “One Kyowa Kirin” global management system, which
combines a regional axis encompassing the four regions of Japan, North America, EMEA, and Asia/Oceania, atrans-regional functional axis, and a product (franchises) axis. With the launch of the global management system, in
April 2020, regional CSR Committees were established in each of the four regions to discuss principal risks specificto each region, in addition to global principal risks. The response to the principal risks in each region is coordinatedby the Japan Regional CSR Committee Secretariat and reported to the Committee. From April 2022, the Company
increased the frequency of meetings of the Group CSR Committee that is positioned as a place globally opened to
stakeholders from four regions from annually to twice a year. The Group CSR Committee deliberates strategies
related to Group-wide risk management and activity policies, as well as the monitoring of activity results for the last
six months. Measures to reduce principal risks as well as the results of monitoring, which are discussed at thesecommittees, are reported to the Board of Directors.
Regarding the process of identifying principal risks, once a quarter, the business execution lines identify risks
based on changes in the internal and external conditions, and analyze the impact on management and thefrequency of occurrence (possibility of occurrence). The CSR Committee Secretariat adjusts the results of theanalysis while discussing changes in the internal and external conditions and risk trends with the businessexecution lines, and then organizes and evaluates risks by category to identify principal risks. The CSR Committee
discusses whether it is appropriate to identify principal risks, monitors the progress of measures for mitigating therisks, and supports the risk management of the business execution lines.
In addition, to contribute to the realization of a sustainable society, and to achieve sustainable corporate growth, wehave identified and reflected in the Medium Term Business Plan important management issues (materiality) thatmust be resolved from both a social and business perspective in the medium- to long-term as risks andopportunities, and the CSR Committee discusses changes in awareness of risks and opportunities and theprogress of initiatives.
Risk management system of the Group (from April 2022)
Board of Directors

Group CSR Committee

Held twice a year
Held semi-annually or quarterly

Regional CSR
Committee
Japan*

Regional CSR
Committee
North America

Regional CSR
Committee
EMEA**

Regional CSR
Committee
Asia/Oceania

CSR Committee Secretariat: Evaluate risks by preparing a risk map

Business execution lines: Identify/analyze risks using a risk ledger* Japan collects other regions’ reports to report** EMEA represents Europe, the Middle East and Africa
2.

Centralized global management of risks by utilizing digital technologies
The Group is promoting digitalization by introducing a system for centrally managing group-wide risks using a
database. The Group is working to establish a framework to monitor the status of risks effectively and efficiently.
Through the framework, information is shared with divisions that support, advise, and monitor risks. The workflow
uses a specialized, company-wide perspective after the business execution lines register the risk ledger andincident information in the database, with the principal risks visualized on a risk map.
- 14 -

3.

Strengthening the crisis management system and exercises
In the Group, the Area Crisis Management Team, which has a three-tier structure of global, regional, and local, andthe Function Crisis Management Team, which responds with its expertise, autonomously implement crisis
management under the Group Crisis Management Regulations. In the event that a global response is required, thetwo headquarters work together to establish a system for promptly reducing the impact. Moreover, the Groupmakes efforts to respond to worst-case scenarios and enhances our business continuity framework throughconducting crisis and Business Continuity Plan (BCP) drills (cyberattacks, human right violations, pandemics,
natural disasters, suspension of shipments, etc.) among Japan, other regions, and the global head office andconducting crisis and BCP drill by each organization. We aim to be a resilient organization that adapts flexibly todifficult situations by working together on risk management and crisis management in an integrated manner. Our
initiatives include improvements of our response capabilities through exercises as well as review of risk evaluations
and measures for mitigating risks to link them to the monitoring to find signs of risks.
Crisis management system of the Group (from April 2021)
Global Crisis Management Team

Function Crisis
Management
Team

4.

Regional Crisis
Management TeamJapan

Regional Crisis
Management Team
North America

Regional Crisis
Management Team
EMEA

Regional Crisis
Management Team
Asia/Oceania

Local Crisis
Management Team
(offices, etc.)

Local Crisis
Management Team
(offices, etc.)

Local Crisis
Management Team
(countries, etc.)

Local Crisis
Management Team
(countries, etc.)

Risk factors
This section describes principal risks identified by the Group as of the end of the current fiscal year (as ofDecember 31, 2022). However, the Group may face other unforeseen risks caused by changes in internal andexternal conditions, and risks not described here may have a negative impact on the Group’s businessperformance and financial position.

Risks related to maximizing the value of global strategic products
Details of risks and expected main impacts
The Group is working to maximize the value of three drugs that have been positioned as global strategic products –Crysvita, a treatment for X-linked hypophosphatemia, POTELIGEO, an anticancer agent, and NOURIANZ (productname in Japan: NOURIAST), an antiparkinsonian agent. The commercial activities of Crysvita in North America, which
will be transferred from our partner company, Ultragenyx Pharmaceutical Inc. (Ultragenyx) in April 2023, may adversely
affect the business if the transfer does not progress smoothly. Moreover, regarding risks of global strategic products as
whole, delays to sales area expansion caused by setbacks in market launch preparations, slow progress with market
penetration due to difficulties in identifying potential patients, sharply lower-than-expected sales due to a shortfall inprojected product prices in new markets, and impediments to stable supplies caused by quality issues, manufacturing
problems and other issues, may prevent the Group from attaining its business targets.

- 15 -

Key mitigation measures
In preparation for maximizing the value of global strategic products, we are moving forward with measures forpenetrating markets and expanding our business regions, centered on Europe and the U.S. In addition to a global
management system that facilitates seamless cooperation between functions (divisions) and regions (affiliates) on a
global level, the Group has appointed personnel to take responsibility for each global strategic product. This person
leads a cross-function/region team that works together to draft and execute strategies to maximize the value of eachproduct. To complete the transition in the North America smoothly, the Group partly started operations in North America
from October after establishing a franchise. The preparation for the transition is proceeding smoothly based on thedetailed transition scheme. The Group will receive field support from Ultragenyx for a year after the transition, allowing
us to be well-prepared for risk management. Regarding issues with quality and manufacturing, key mitigation measures
are outlined in the “Risks related to product quality” and “Risks related to production and stable supply.”
Risks related to R&D
Details of risks and expected main impacts
In its R&D, the Group pursues the ongoing creation of groundbreaking pharmaceutical products and has established thefollowing strategies centered on technology, disease, and open innovation. (i) In addition to its ongoing quest to drive
advances in antibody technology, the Group will build a platform for creating breakthrough drugs by making full use ofdiverse modalities. (ii) The Group will continue to provide “Only-one value drugs” to address diseases that currently
have no effective treatment while drawing on achievements cultivated to date in disease science (in the areas ofnephrology, oncology, immunology, allergies, and the central nervous system). (iii) The Group will continue toincorporate external innovation through advanced open innovation activities, fusing collaborative research activities withacademia, startups, and other partners (information gathering in the San Diego area, etc.) with early access to
information by means of venture capital fund investments. However, in the process of developing new drugs over long
periods of time, there may be cases where R&D has to be abandoned, for example if expected efficacy is not confirmed
or for safety and other reasons, which may prevent the Group from expanding its drug pipeline and undermining growthpotential and profitability.
Key mitigation measures
The Group is actively stepping up investments in R&D (aiming for an R&D expense ratio of 18–20%) to strengthen thepipeline of new drugs that will lead the next generation, such as global candidates. In addition, to complement
proprietary research, the Group is also focusing on open innovation activities involving partners from across industry,
government, and academia, including active strategic partnering (in-licensing, tie-ups, etc.) to acquire platform
technologies and pipeline assets. For instance, since 2020, the Group has been collaborating with Axcelead Drug
Discovery Partners Inc., a drug discovery solutions provider formed by the spinout of Takeda Pharmaceutical Company
Limited’s drug discovery platform business. We aim to combine Axcelead’s long-established, extensive technologies
and expertise in small-molecule drug discovery with the Company’s own innovative drug discovery technologies,
thereby broadening the R&D pipeline with groundbreaking new compounds. The Group is also extending its R&D
alliance with InveniAI LLC of the United States providing AI and machine learning applications, identifying, assessing,and optimizing novel drug discovery targets that complement the Group’s proprietary next-generation antibody
technology. Moreover, through investing in a venture capital fund, the Group entered into a research collaboration with
LUCA Science Inc. that has a proprietary technology to isolate high functional mitochondria in 2022. The collaboration
allows for the Group to research new therapeutic options based on mitochondrial drug discovery, an innovative
mitochondrial modality. The Group also started Corporate Venture Capital (CVC) activities, strengthening an access to
cutting-edge drug discovery technology-related information.

Risks related to healthcare cost-control policies
Details of risks and expected main impacts
The trend toward tighter control of healthcare costs is increasing in Japan and elsewhere. Efforts to reform healthcare
systems in various countries involve reducing prices of drugs and encouraging wider use of generic drugs. These trends
may have a negative impact on the Group’s business performance and financial position. In this context, while being
innovative and also adequate for unmet medical needs is important to the successful reception from stakeholders
outside the Company, delays to the development of further practical, groundbreaking new drugs may undermine theGroup’s growth potential and profitability.
- 16 -

Key mitigation measures
The Group closely monitors healthcare policy trends in each country, while also strategically examining measures toevaluate the value of its life-changing pharmaceuticals from various aspects so as to securely deliver them to patients.
Furthermore, in post-launch price setting, the Group considers the impact on its business so that it can secure appropriate
revenues to continuously creating innovative drugs, while complying with each country’s systems.
Risks related to parent and Group company management
Details of risks and expected main impacts
For the Group’s business as a Japan-based global specialty pharmaceutical company to grow, robust risk management
for the Company and its Group companies is management’s top priority. Since 2020, the Group has been working toenhance governance by launching an improvement plan with three key objectives: creating a robust quality assurance
system, improving risk management, and reforming the corporate culture. In the event that these measures are not fully
effective, emerging risks could result in restrictions or suspensions of production, sales and other business activities,
and the loss of trust as a pharmaceutical company.
Key mitigation measures
Improving risk management aims to achieve group-wide risk management that can anticipate the future and takepreventative measures. To this end, the Group holds workshops for all executives and managers at the head office,stages ongoing crisis and BCP drills across regions in Japan and overseas, and deliberates on material issues(materiality) that are both risks the Group needs to address over the medium- to long-term as well as opportunities.
Through these actions, the Group is working to heighten its ability to respond to new and potential risks. Furthermore,
the Group conforms to the three-line model advocated by the Institute of Internal Auditors, and has secured a system tomake appropriate responses to risks. Please refer to “Risks related to product quality” for details about how we are
creating a robust quality assurance system and “Risks related to human resources” for details about corporate culture
reforms.
Risks related to product quality
Details of risks and expected main impacts
Pharmaceutical manufacturing requires facilities (hard assets) and procedures and people (soft assets) that arecompatible with good manufacturing practice (GMP). Should a GMP inspection by a national authority or an internal
audit find a serious GMP issue, the regulatory authority may issue instructions for production or shipments to besuspended. In addition, if for any reason there are any concerns about the safety or quality of a product with regard toraw materials or manufacturing processes used to make the product, these may give rise to a suspension of shipments
or product recall.
Key mitigation measures
The Group’s quality assurance functions are centered on the Global QA Head, who reports directly to the President andcollects and shares information about quality assurance activities in each region for prompt decision making.
Specifically, the Global Quality Assurance Committee, regular and ad hoc Global Product Council and other quality
assurance bodies discuss critical quality-related issues reported by regional head offices, evaluate quality performanceat newly selected manufacturing sites, regularly assess product quality, review the activities of global taskforces
established to address specific issues, and monitor issues identified in audits and progress with related response
measures. The Group has also established a global, independent specialist audit unit to reinforce product quality audits
within the Group and at contractors. In addition, the Group has completed introducing an electronic Quality
Management System to appropriately manage and utilize large volumes of quality assurance information on a global
level and to drive continuous improvements in processes and reliability. With eQMS, key quality management processes(education and training, document management, deviation, complaints, corrective and preventative actions,modifications, change control, audits, manufacturing site management, etc.) are all managed electronically.
Quality assurance divisions and safety divisions always work closely and have established a system to prevent healthdamage to patients by promptly evaluating impacts on patients if quality concerns arise and always consider the effectof quality in product safety monitoring.

- 17 -

Risks related to production and stable supply
Details of risks and expected main impacts
In cases where detailed, accurate demand forecasts in various regions are impossible; where it is impossible tomaintain supply capacity with the Group’s proprietary plants or through cooperation with contract manufacturers andother suppliers; where market supply and demand fluctuates significantly due to the supply difficulties of othercompanies; or in other cases, stable supplies of the Group’s products could be impeded, and resulting factors such as
delays in drug launch schedules or limited shipments of product could erode trust in Kyowa Kirin as a pharmaceuticalcompany or depress revenues, among other things.
Key mitigation measures
The Group is implementing sales and operations planning (S&OP) to increase the accuracy of demand forecasting by
rapidly identifying changes in product sales and needs, and to achieve a supply-demand balance and enable quick
adjustments in line with business plans. The Group sets objective stable supply indicators, reviews an inventory holding
policy in accordance with risks, and visualizes demand using a supply-demand planning system. In addition, to respondto spikes in demand and tight supply-demand conditions, the Group is expanding its network of contractors, investing inproprietary plants, rolling out digital technology to enhance manufacturing operational efficiency, and increasing
headcount and upgrading training systems in the production and quality assurance divisions.

Risks related to the management of suppliers and contractors
Details of risks and expected main impacts
The Group enters into alliances with other companies, in the form of joint development, joint commercialization,technology partnerships and establishing joint ventures, and it also outsources operations related to the supply of raw
materials, production, logistics and marketing for pharmaceuticals to other domestic and overseas suppliers. However, if
the alliances and outsourcing contracts fail to deliver the expected results or are dissolved due to issues related tohuman rights, legal compliance, the environment, information security at suppliers, or if there are quality issues with
contracted deliverables, the Group could face difficulty securing stable supplies of the Company’s products or issues inlogistics and sales, which may erode trust in Kyowa Kirin as a pharmaceutical company, lower revenues, or lead todelays in new drug applications.
Key mitigation measures
The Group is seeking to conduct open, fair CSR-based procurement in line with the Kyowa Kirin Group Procurement
Policy, which states its commitment to pursue CSR procurement together with suppliers to ensure stable supplies ofhigh-quality products. To ensure that suppliers are familiar with the Group’s initiatives for CSR procurement, the Groupholds briefing webinar for suppliers periodically. In addition, the Supplier Code of Conduct sums up the seven areas
where the Group calls for understanding and cooperation from suppliers: relationships with society, relationships with
employees, compliance with rules, respect for human rights, environmental preservation, information management, andrisk management. In dealing with suppliers, we have added a CSR clause, which includes compliance with the Code of
Conduct, to our contracts, and the Group conducts CSR questionnaires to confirm compliance with the Supplier Code of
Conduct, publishing the results. The Group also obtains risk and credit background data from external organizations
and conducts supplier assessments based on objective information. The Group obtains similar information in the courseof transactions as needed, and confirms with a supplier when there is any cause for concern. In addition, the Group
promptly shares the risk information it obtained with relevant divisions and works together to mitigate risk, including
requesting corrective action from suppliers or considering changing suppliers, as needed. Through the procurement
functions and systems established in each region, the Group takes measures to reduce risks and monitors the status.
Based on Kyowa Kirin Group Human Rights Policy established in December 2022 (formerly Kirin Group Human Rights
Policy), the Group also plans to promote human rights due diligence initiatives.

- 18 -

Risks related to information security
Details of risks and expected main impacts
As the Group utilizes a variety of networks and information systems, the Group may experience system outages orexternal leaks of confidential information in the event of unauthorized system access or cyberattacks. A cyberattack on
a supplier could result in damages such as the leak of confidential information of the Group or personal data,suspension of business activities, or damage to the brand. As explained in key mitigation measures for “Risks related topandemics,” the move to homeworking is improving productivity, but the number of employees using homecommunication environments or working alone is rising, which increases the risk of surveillance committed throughnetwork, cyberattacks, email errors, and loss of personal computers that may lead to information leaks. In addition, as
cloud-based services are used more frequently, a security accident (including inaccessibility to such a service) occurredat the side of an outside service provider may directly affect the Group’s business contingency.
Key mitigation measures
The Group is taking steps to upgrade information security, including technical measures to guard against cybersecurity
threats that are becoming more diverse and more sophisticated each year, as well as developing playbooks that include
information such as the recommended initial response flow and procedural steps in the event of a cyber incident, toestablish the system to respond to incidents. Moreover, by periodically conducting an outside evaluation driven by astandard framework for the security industry, the Group continuously improve a responsive plan formulated based on an
objective risk evaluation. The Group is also taking measures to mitigate various risks, such as monitoring its business
partners to verify their response to the security measures. In addition, to be better prepared to mount a rapid response
and minimize damage in the event of an incident, the Group is continuously conducting crisis drills in each region todeal with ransomware and other cyberattacks. The Group is also educating employees to raise their level of information
security by conducting educational seminars periodically and targeted e-mail attack drills, and raising awareness bydisseminating information and precautions on preventing infection by computer viruses in accordance with thecharacteristics of the latest attack methods and points of attention when remote working, etc., through documentationfor employees, a dedicated cybersecurity website, etc. BCP system and drills simulating limited use of cloud services
will also be organized.
Risks related to compliance
Details of risks and expected main impacts
The Group is required to comply with a range of laws and regulations governing pharmaceutical R&D, manufacturing,sales, imports and exports. In addition, in the promotion of pharmaceuticals, in addition to the laws and regulations ofeach country, there are voluntary codes in the industry, and pharmaceutical companies are strongly requested tocomply with them. Failure to comply with these laws, regulations and voluntary codes could result in sanctions thatdelay or suspend the development of new drugs, or restrict or suspend production, sales and other business activities,
which may erode trust in Kyowa Kirin as a pharmaceutical company.
Key mitigation measures
The Group believes that compliance is not only legal compliance, but also involves promptly sensing and properly
understanding the needs of society and acting ethically. We have stipulated the overall behavior expected of our officers
and employees in the Kyowa Kirin Group Code of Conduct. The Company has established a system to comply withvarious laws and regulations and voluntary codes, and conducts ongoing education and training. The status ofcompliance and the progress of measures to address material issues are discussed at each regional CSR Committee
meeting held semi-annually or quarterly and at the Group CSR Committee meeting held twice a year, and ongoing
improvement is promoted. In addition, the Group has set up a whistleblowing hotline to prevent, quickly detect, andrectify acts that violate the Code of Conduct or significantly damage the brand value of the Group. Furthermore, theGroup conducts an annual employee compliance awareness survey to identify potential risks, while working to mitigate
risks in the early stages by confirming the facts of survey responses and responding accordingly. Survey results arealso reported to the CSR Committee and the Board of Directors. The Group compliance enhancement project thatstarted in 2021 is improving a framework to assess the status of efforts by each department in charge based on thevarious Kyowa Kirin Group Policies that supplement the Code of Conduct, and a framework of company-widemonitoring of the compliance program of each region including the global head office. Based on the monitoring andassessment results, the Group implements measures for improvement accordingly, further raising its compliance level.

- 19 -

Risks related to human resources
Details of risks and expected main impacts
The Group is working to embed its global management system to encourage individuals from diverse backgrounds todemonstrate their abilities and engage in business activities in Japan and overseas. However, if the Company is unable
to develop and hire personnel who will be responsible for the global management system, this may hinder thecontinuation of its business activities or sustainable growth.
Key mitigation measures
The Group believes people are the source of innovation. To maximize the abilities of each of its employees with diverse
backgrounds and develop person and organization that challenge to innovate and continuously create new value, theGroup promotes measures for the achievement of “Global Talent Management Basics for 2021-2025” created by the
Human Resources Department to visualize human resources function’s ideal state in 2025. Among measures taken
thus far to build a global common human resources platform for promoting One Kyowa Kirin system, the Group has
focused on, in specific, promoting Diversity, Equity & Inclusion (DE&I) Statement, introducing the global grading andleadership principal, building a talent management system, and promoting corporate culture reform.
As an effort to promote DE&I, the Group works on cross-regional and cross-functional measures, as well as measures
to respond to region-specific challenges in order to realize strengths of teams that shine with diverse personalities. To
strengthen the management system on a global basis, the Group has created succession planning for each of its global
key positions and nominated next-generation leadership candidates irrespective of race, nationality, gender, or age.
Going forward, to expand the pipeline of human resources, the Group will formulate individual training programs foreach successor, and implement human resource development strategically by carrying out global exchange programs.
Talent review meetings that have been set up in each region will be organized by Global HR Business Partners beyond
the framework of region, aiming to assign right person in the right place at a global level.
As an effort to promote corporate culture reform, the Group has established Key Behavior “Overcome Barriers”(KABEGOE in Japanese). The Group is implementing activities, such as dialogues with the President and otherexecutives and workshop, to empower all employees to overcome the barriers that divide them̶all the difficulties andnew challenges they face.
Through the employees’ attitude survey and corporate culture surveys, the Group monitors the extent to which theabove-mentioned initiatives are gaining acceptance and taking root. At the Human Resource Development Committee
in which officers other than those in charge of human resources also participate, each of these measures implemented
by the Human Resources Department are thoroughly discussed to allow them to be more effective.
Furthermore, the Group promotes Health and Productivity Management with the aim of “realizing health and well-being”
of the Group’s employees, as it believes that mental and physical health is essential in order for them to maximize theircapabilities to create new value.

- 20 -

Risks related to pandemics
Details of risks and expected main impacts
Regional outbreaks of emerging and re-emerging infectious diseases, or global pandemics, including the novel
coronavirus infectious disease (COVID-19), could force the Group’s head offices, plants, research laboratories andother business sites to close or cease business activities due to onsite infection clusters. Raw material suppliers may beforced to suspend operations, and logistics may be affected. Disruptions at medical institutions and other issues could
prevent the Group from ensuring stable supply of products or collecting safety information, and result in delay in theprovision of product information to medical professionals and the progress of clinical studies. In addition, any impact on
government authorities in each country could slow down new drug approvals and price negotiations, delaying thelaunch of new products. Under those conditions, the Group’s business performance and financial position may be
adversely affected.
Key mitigation measures
In dealing with COVID-19, the Group put the first priority on reducing the risk of infection during the phase of pandemic.
The Group implemented remote working as the main mode of work, including working from home, and actively
introduced web meeting tools for internal and external communication to enable employees to continue their duties. At
the same time, the Group took every effort to ensure the safety of employees that need to attend work, including thosein the production, R&D, and sales divisions, such as daily antigen tests, temperature checks, face masks, social
distancing, divided indoor spaces and ventilation.
Based on the global policy of a hybrid working model to create innovation and promote well-being among employees,
the Group attempts to boost productivity by expanding the scope of the new working styles, creating optimal customer
contact points that combine in-person and digital approaches in terms of sales activities, and stepping up the pace ofdigitizing tasks and achieving operational excellence, while carefully tracking new case levels in each region.

Risks related to natural disasters
Details of risks and expected main impacts
Natural disasters such as earthquakes and typhoons that may occur in various locations could lead to the closure of theGroup’s head offices, plants, research laboratories and business offices or halt business activities, potentially impacting
progress in drug discovery research and clinical development, the stable supply of products, the collection of safety
information, and the provision of product information, which may have a negative impact on the Group’s businessperformance and financial position.
Key mitigation measures
The Group has developed a coordinated disaster prevention plan with its business sites to ensure the safety of
employees and their families in the event of a disaster. Based on the plan, the Group regularly conducts safety
confirmation drills and safety equipment upgrades/checks. The Group has also developed a BCP to continue supplies,
monitoring, and providing information of pharmaceuticals in the event of difficulty ensuring the continuity of normal
business activities. The Group conducts BCP drills simulating a range of scenarios, including super typhoons and a
massive earthquake directly under the Tokyo metropolitan area. We are working to identify issues through such drills
and continuously improve our BCP. Based on the global, all-hazard BCP guidelines established in 2021, the Group is
working to enhance the business continuity framework in each region to prepare for various events. For example, theGroup is planning to construct a new warehouse building with earthquake-proof construction at its Takasaki Plant(construction start scheduled for October 2023, operation start scheduled for January 2026).

- 21 -

Risks related to geopolitics
Details of risks and expected main impacts
Geopolitical uncertainties in multilateral relationships surrounding the Russo-Ukraine crisis and other bilateralrelationships may adversely affect the Group’s business activities. In Russia and Ukraine where risks have emerged,
the Group does not conduct direct business operations and there are no raw material suppliers with which the Group
conducts direct business, and therefore, the Group’s business, including the present product supply, has not beensignificantly affected. However, if Russia’s invasion continues for a prolonged period or expands to neighboring
countries in Europe, etc., there could be an impact on the Group’s business due to turmoil in the global economy andexchange rates caused by significant fluctuations in energy prices or disruptions in internet infrastructure fromcyberattacks, as well as due to delays in procuring raw materials, materials and active pharmaceutical ingredients,
importing and exporting, conducting clinical trials and carrying out sales activities. In addition, the safety of patients,
medical institutions, and the Group’s employees may also be adversely affected.
Key mitigation measures
The Group will collect information on the situation and procure raw materials, materials, and active pharmaceuticalingredients in advance when necessary, aiming to ensure stable supply appropriately. Furthermore, if the situation isworsened, the Group will work to mitigate the impact on clinical trials, procurement, supply, distribution, and employees’safety, etc.

Risks related to climate change
Details of risks and expected main impacts
The occurrence of floods caused by extreme weather brought about by climate change could affect all of our businessactivities, including the stable supply of our products and research activities. Furthermore, in the future, the Group’s
brand value may decline if additional costs are incurred due to the introduction of carbon taxes or measures to comply
with tighter environmental regulations, or if greenhouse gas reduction targets cannot be achieved.
Key mitigation measures
In addition to the impact on business activities, the Group considers the response to climate change (prevention of
global warming) to be critical to bringing about a sustainable society. The Group has created a roadmap for reducing
greenhouse gas emissions over the medium- to long-term, and is moving forward with an array of initiatives across theGroup. In the medium term, the Group aims to accelerate the synergetic reduction of emissions of greenhouse gases byfocusing on energy-saving measures and expanding the use of renewable energy. From 2020, the Group introduced
RE100-certified renewable energy to its Takasaki Plant and Fuji Research Park and CMC R&D Center, switching 100%of their electric power to electricity that emits no greenhouse gases. In 2021, the Group’s head office also switched
100% of its electric power to renewable energy. In 2023, a large-scale solar power generation system (assumed output
of 1,976,000 kWh/year) will be installed at Ube Plant and start its operation based on an onsite PPA (Power Purchase
Agreement) model. In addition, the Company has endorsed the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD), and has determined the risks and opportunities that climate change poses to its
businesses and their impacts. Following the recommendations of the TCFD, the Company discloses information on thefollowing four items: governance, strategy, risk management, and metrics and targets.

- 22 -

Disclosure of climate change-related information (Information disclosure based on TCFD recommendations)<Governance (relating to environmental issues)>
Representative Director, Executive Vice President has been appointed as the chief executive officer responsible foroverall environmental management inclusive of climate change issues.
Issues related to risks and opportunities in climate change, as well as environmental activity policies and results are
positioned as important matters in the Group’s environmental management. These issues are reported, deliberated
upon, and decided by the CSR Committee, which is held regularly and chaired by Representative Director, Executive
Vice President. The content of these discussions is reported to the Board of Directors.
Since the fiscal year ended December 31, 2020, the TCFD Study Team has been set up within the CSR Management
Department, which is responsible for the environmental management control function, and has been identifying andevaluating climate change risks and opportunities and considering countermeasures.
The departments in charge regularly review the risks and opportunities identified, bring to the CSR Committee andreport the progress of responses so that climate change-related issues can be addressed as part of our management
strategy.
<Strategy>
We aim to achieve a world in which the average temperature increase is limited to 1.5°C or less, as outlined in the Paris
Agreement. We are reviewing our climate change response based on the results of our scenario analysis of climatechange-related risks and opportunities and also in the context of the Kirin Group Environmental Vision 2050. We areincorporating these findings into our business strategy and advancing measures accordingly.
As mitigation measures, to achieve net zero greenhouse gas (GHG) emissions across the entire value chain by 2050,
we have upwardly revised our CO2 reduction targets in line with the Science-Based Target (SBT) 1.5°C target*1. In
addition, we will create a roadmap to achieve the targets, promote measures such as the early adoption and expansionof renewable energy, energy conservation and energy transition, and address the risks of the transition to a
decarbonized society.
As adaptation measures, we have formulated a BCP for large-scale natural disasters to address the impact on global
production activities, such as the long-term suspension of operations caused by flooding of plant and researchlaboratory premises. We will respond to the physical risk of flooding through flood prevention measures and capital
investment (geographically diversifying the storage of important production-related assets, waterproofing buildings,
placing important facilities on high floors and high places, and installing inundation prevention walls). Going forward, we
will continue to minimize risks by conducting impact assessments and instituting responses for the entire supply chain.
On the other hand, the number of hay fever sufferers has increased due to the rise in temperatures and this has led to
expectations of an opportunity for the allergy drug market. However, we believe the actual impact on revenue will belimited. We will continue to consider new developments in this field to meet medical needs based on our management
philosophy.
*1 Science-based targets for reducing corporate greenhouse gas emissions that align with the Paris Agreement levels<Analysis of risks, opportunities, and the financial impact related to climate change>
Pink: Risks Blue: Opportunities
Scenario
category

Policies/
regulations
Transition risk

Demographics/
economics/
geopolitics
Society

Physical risk

Potential
impacts

Changes throughresponse(resilience)

Carbon pricing (decarbonization,
emissions trading schemes)

Small

±0

Tighter CO2 emission regulations

SlightSmall

Population growth in emerging
countries/economic globalization±0±0Changes in social values

Slight±0

Extreme temperature rises

Small

Small

Increase in torrential rains, typhoons
and floods

Large

SlightChanges in the number of hay fever
patients

MediumMediumIncreased energy consumption due tohigher air conditioning load

Small

Small

Climate change-related drivers with impact assessment

Rising averagetemperatureand change inrainfall pattern(acute)Rising averagetemperatureand change inrainfall pattern(chronic)- 23 -

Achieve 2030 targets early
and reduce CO2 emissions
Review of the BCPs forlarge-scale natural
disasters at workplaces
Disaster preparedness offacilities

(Analysis conditions)
Periods
covered2020–2050 (short- to medium- term: 2020–2030; long term: 2031–2050)

Scope

Domestic and overseas production and research facilities, manufacturing licensees and suppliers

Calculation
requirements

Analysis based on climate change scenarios (1.5°C, 2°C, 4°C) (IEA*2, IPCC*3, etc.)*2 IEA: International Energy Agency*3 IPCC: Intergovernmental Panel on Climate Change
Calculate profit or loss at the end of the applicable period for each item

Risk/opportunity management
In identifying risks and opportunities, we comprehensively assess—based on scenario analysis for each risk andopportunity—the expected timing and probability of occurrence, the range and magnitude of impact, and the details ofcountermeasures to determine priorities. We identify and manage those items that would have a large impact on ourbusiness, items for which we have a significant social responsibility and items with a high probability of occurrence.
The CSR Committee obtains reports, deliberates and makes approvals of the identified risks, including our responses,
and monitors the status of responses on a quarterly basis to comprehensively manage risks.
Metrics and targets
In 2021, based on the SBT 1.5°C target, we set a new 2030 CO2 emissions reduction target of 55% reduction from 2019
levels. In addition to creating a roadmap for achieving the new target, we have incorporated them into our FY2021–
2025 Medium Term Business Plan. We set and manage annual targets for each fiscal year, studying and developing
measures to achieve them. In 2022, we also set a short-term FY2024 CO2 emissions reduction target of 51% reduction
from 2019 levels.
By 2025

Achieve significant reductions in CO2 emissions by gradually switching to renewable energy
sources for the electricity used at major workplaces in Japan.

By 2030

Introduce and expand renewable energy use to all our Group’s workplaces, including overseas
business locations and domestic branch offices.

By 2040

Aim for 100% renewable energy sources for the electricity used.

By 2050

Convert plant facilities, etc. to other energy sources and work to reduce greenhouse gas emissions
in the supply chain, aiming to achieve net zero greenhouse gas emissions across the entire value
chain.

In addition, we plan to introduce and operate solar power generation facilities to its domestic and overseas production
and research facilities. By implementing these measures, we plan to accelerate the synergistic reduction of CO2
emissions.
The Kirin Group, to which the Group belongs, has set a target of “net zero GHG emissions from the entire value chain
by 2050”*4 based on the Kirin Group Environmental Vision 2050. As medium-term targets, we have upwardly revised
our GHG reduction target to a 50% reduction under Scope 1*5 + Scope 2 and a 30% reduction under Scope 3 from the2019 level by 2030 (obtained approval for the SBT 1.5°C target), and have set a target for renewable energy use of
100% by 2040 (joined RE100, both targets were set in 2020). The Group’s 2030 targets and the development of
measures are also in alignment with these medium- and long-term targets of the Kirin Group.
For details, please refer to the Company’s website(https://www.kyowakirin.com/sustainability/environment/tcfd/index.html).

*4 The Group was certified as “SBT Net Zero” by the SBT Initiative on the grounds that the target was found to be
based on a scientifically-based goal that is consistent with the level of GHG emission reductions required by the Paris
Agreement.
*5 Scope 1, Scope 2 and Scope 3: Greenhouse gas emissions from organizational activities in the entire supply chain.
Those are made up of Scope 1: (direct emissions), Scope 2: (indirect emissions from energy sources) and Scope 3:(other indirect emissions).
Other potential risks to the business activities of the pharmaceutical industries in Japan and overseas include risks
related to intellectual property rights, risks related to side effects, risks related to litigation, risks related to productcompetition and expiration of patent rights, risks related to fluctuations in raw material and fuel prices, risks related- 24 -

to fluctuations in foreign exchange and financial markets, and country risks. Risks that may have a negative impact
on the Group’s business performance and financial position are not limited to those listed here.

- 25 -

3

Management Analysis of Financial Position, Business Performance and Cash Flows< Overview of business >Amid enormous and complex changes in the business environment, including geopolitical risks on top of the
prolonged effect from COVID-19, among other factors, the Group carried out activities such as strengthening
research and development, production, and logistics, and collecting and providing information with the aim ofproviding drugs that satisfy unmet medical needs.
In 2022, the Group has been proceeding with initiatives for the second year of the FY2021-2025 Medium TermBusiness Plan aimed at realizing the Group’s vision for 2030: Kyowa Kirin will realize the successful creation anddelivery of life-changing value that ultimately makes people smile, as a Japan-based global specialty pharmaceuticalcompany built on the diverse team of experts with shared passion for innovation.
Despite some restrictions on business activities due to COVID-19, the Group continued to steadily achieve growthfrom global strategic products such as Crysvita and POTELIGEO. On the other hand, while adapting to extremechanges to the external environment, the Group took urgent steps to take part in global collaborations and establish
the growth strategies for delivering the Company’s pharmaceuticals to as many needy patients as possible. In theestablished medicines business*1 in Europe, the Group entered into an agreement concerning joint-venture
collaboration with German company Grünenthal GmbH*2 to continually deliver those medicines to the patientsneeding them.
Regarding the next-generation strategic products, the Group is steadily developing KHK4083 for the therapeuticareas of immunology/allergy through collaboration with Amgen Inc. of the United States. On the other hand, theGroup decided to discontinue the development of Kyowa Kirin’s proprietary KW-6356 in the central nervous systemfield, and to also discontinue joint development with MEI Pharma of ME-401 in the oncology field outside Japan. As
for our initial stage development products, such as bispecific antibodies developed using our proprietary technologies,
we are taking steps to advance research and development with the expectation that they will become a growth
platform in the medium to long term. Through measures such as constructing a new biopharmaceutical API
manufacturing facility and a new multipurpose facility relating to quality assurance, which will adopt cutting-edge
facilities, we are aiming to strengthen our competitiveness as Japan’s global specialty pharmaceutical company.
Regarding initiatives aimed at both contributing to the realization of a sustainable society and achieving businessgrowth, we have formulated the “Kyowa Kirin Group Policy for Access to Medicines” and are striving to respond to
medical needs, centered on patients. In addition, we have established the Kyowa Kirin Group Human Rights Policy,
which forms the basis for the Group’s corporate activities concerning business and human rights.
*1 This type of business mainly handles patent-expired branded drugs and generics.
*2 Customary approvals and clearances, including anti-trust and works councils as legally required, will need to be obtained as acondition for the agreement to take effect.

(1) Summary of Consolidated Financial Position for Fiscal 2022
(Billions of yen)
As ofDecember 31, 2021
Assets

As ofDecember 31, 2022

Year-on-year change

921.9

939.9

18.0

403.6
518.2

397.7
542.2

(5.9)
24.0

Liabilities

184.7

177.1

(7.7)

Equity

737.2

762.8

25.7

Ratio of equity attributable to owners ofparent to total assets (%)

80.0%

81.2%

1.2%

Non-current assets
Current assets●

Assets as of December 31, 2022, were ¥939.9 billion, an increase of ¥18.0 billion compared to the end of theprevious fiscal year.
･ Non-current assets decreased by ¥5.9 billion compared to the end of the previous fiscal year, to ¥397.7 billion,
due mainly to impairment of intangible assets, which offset increases in property, plant and equipment anddeferred tax assets.
･ Current assets increased by ¥24.0 billion compared to the end of the previous fiscal year, to ¥542.2 billion, due
mainly to increases in trade and other receivables and inventories.
● Liabilities as of December 31, 2022, were ¥177.1 billion, a decrease of ¥7.7 billion compared to the end of theprevious fiscal year, due mainly to decreases in income taxes payable and contract liabilities.
● Equity as of December 31, 2022, was ¥762.8 billion, an increase of ¥25.7 billion compared to the end of the previous
fiscal year, due mainly to the recording of profit attributable to owners of parent, despite a decrease due to thepayment of dividends, etc. As a result, the ratio of equity attributable to owners of parent to total assets was 81.2%,
an increase of 1.2 percentage points compared to the end of the previous fiscal year.
- 26 -

(2) Summary of Business Performance in Fiscal 2022(i) Overview of results
The Group now applies the International Financial Reporting Standards (“IFRS”) in line with its policy of expanding
business globally, and adopts “core operating profit” as a level of profit that shows the recurring profitability fromoperating activities. Core operating profit is calculated by deducting “selling, general and administrative expenses”
and “research and development expenses” from “gross profit,” and adding “share of profit (loss) of investments
accounted for using equity method” to the amount.
(Billions of yen)
Fiscal year ended Fiscal year ended
Year-on-year
Rate of change
December 31,
December 31,
change
(%)
2022
2021
Revenue

352.2

398.4

46.1

13.1%

Core operating profit

65.7

86.7

21.0

32.0%

Profit before tax

60.1

67.6

7.5

12.5%

Profit attributable to owners of parent

52.3

53.6

1.2

2.3%

< Average exchange rates for each period >Currency

Fiscal year ended Fiscal year ended
December 31,
December 31,
2022
2021

Year-on-yearchangeUSD (USD/¥)

¥109

¥130

Up ¥21

GBP (GBP/¥)

¥150

¥161

Up ¥11

EUR (EUR/¥)

¥130

¥137

Up ¥7

For the fiscal year ended December 31, 2022, revenue was ¥398.4 billion (up 13.1% compared to the previous fiscal
year) and core operating profit was ¥86.7 billion (up 32.0%). Profit attributable to owners of parent was ¥53.6 billion(up 2.3%).

● The increase in revenue was the result of growth of global strategic products in North America and EMEA and a●rise in revenue from technology out-licensing, despite lower revenue in Japan. The positive effect on revenue
from foreign exchange was ¥30.1 billion.
Core operating profit rose, despite increases in selling, general and administrative expenses and research anddevelopment expenses, due to higher gross profit resulting from an increase in overseas revenue and a rise in- 27 -

●revenue from technology out-licensing. The positive effect on core operating profit from foreign exchange was¥11.0 billion.
Profit attributable to owners of parent increased as a result of an increase in finance income in addition to anincrease in core operating profit, despite an increase in income taxes in addition to an increase in other expenses
due to increased impairment losses.

(ii) Revenue by regional control function(Billions of yen)
Fiscal year ended Fiscal year ended
December 31,
December 31,
2022
2021

Year-on-yearchangeRate of change
(%)

Japan

156.9

148.7

(8.2)

(5.2)%

North America

78.8

112.6

33.8

42.9%

EMEA

56.1

66.9

10.8

19.2%

APAC

28.4

30.1

1.8

6.3%

Others

32.1

40.1

8.0

24.8%

Total consolidated revenue

352.2

398.4

46.1

13.1%

Notes:

1. Revenue by regional control function is classified based on consolidated revenue from products of regional
control functions in the One Kyowa Kirin (OKK) matrix global management structure, which combines aregional organization based on four regions of Japan, North America, EMEA and APAC, a functionalorganization, and a product organization (product franchises).
2. EMEA consists of Europe, the Middle East, Africa, etc.
3. Others consists of revenue from technology out-licensing, original equipment manufacturing, etc.

- 28 -

< Revenue of major products (Japan) >(Billions of yen)
Fiscal year ended Fiscal year ended
December 31,
December 31,
2022
2021

Year-on-yearchangeRate of change(%)

Patanol

10.7

2.8

(7.9)

(73.9)%

Darbepoetin Alfa Injection Syringe [KKF]

22.3

17.6

(4.7)

(20.9)%

Duvroq

2.6

6.6

4.0

155.8%

Romiplate

7.3

10.4

3.2

43.3%

G-Lasta

29.4

31.1

1.7

5.7%

Crysvita

7.2

8.9

1.7

23.5%

● Revenue in Japan decreased year on year due to the significant decrease in revenue from Patanol, anti-allergy
eye drops, in addition to the impact of the reductions in drug price standards implemented in April 2021 and April
2022, despite the growth in sales of new product groups, such as Duvroq, a treatment for renal anemia.
･ Revenue from Patanol, anti-allergy eye drops, decreased due to the release of a generic in December 2021.
･ Revenue from Darbepoetin Alfa Injection Syringe [KKF] decreased due to the impact of the reductions in drug
price standards and the market penetration of rival products.
･ Revenue from Duvroq, a treatment for renal anemia, has been growing since its launch in August 2020.
･ Revenue from ROMIPLATE, a treatment for chronic idiopathic thrombocytopenic purpura, increased due to theimpact in the previous fiscal year from adjustments of shipments to distributors (June 2020 to March 2021).
･ Revenue from G-Lasta, an agent for decreasing the incidence of febrile neutropenia, has been growing. The
automated injection device G-Lasta Subcutaneous Injection 3.6 mg BodyPod was launched in December 2022.
･ Revenue from Crysvita, a treatment for FGF23-related diseases, has been growing since its launch in December
2019.
< Revenue of major products (overseas) >(Billions of yen)
Fiscal year ended Fiscal year ended
December 31,
December 31,
2022
2021

Year-on-yearchangeRate of change(%)

Crysvita

78.3

118.2

39.9

50.9%

Poteligeo

15.3

22.3

7.0

45.9%

Nourianz

4.5

6.5

1.9

42.7%

Abstral

8.5

6.9

(1.6)

(19.1)%

Regpara

7.4

3.9

(3.5)

(46.6)%

Gran

6.3

8.2

1.9

29.8%

● Revenue in North America increased year on year due to the growth of global strategic products.
･ Revenue from Crysvita, a treatment for X-linked hypophosphatemia, has been growing since its launch in
2018.
･ Revenue from POTELIGEO, an anticancer agent, has been growing.
･ Revenue from NOURIANZ (product name in Japan: NOURIAST), an antiparkinsonian agent, has been
- 29 -

growing since its launch in October 2019.

● Revenue in EMEA increased year on year due to the growth of global strategic products.
･ Revenue from Crysvita, a treatment for X-linked hypophosphatemia, has been growing as the number ofcountries where it has been released has been increasing since its launch in 2018. Approval for the extended
indication for tumor induced osteomalacia (TIO) was acquired from the European Commission (EC) in August
2022, and sales were launched in Germany and other countries.
･ Revenue from POTELIGEO, an anticancer agent, has been growing as the number of countries where it has
been released has been increasing since its launch in June 2020.
･ Revenue from Abstral, a treatment for cancer pain, decreased due to the impact of the market penetration ofgenerics.
● Revenue in APAC increased year on year.
･ Revenue from REGPARA, a treatment for secondary hyperparathyroidism, declined after it became subject toChina’s centralized governmental purchasing system* in October 2021.
* Volume-Based Procurement (VBP) program that was introduced in 2018 for reducing healthcare cost in
China. Even though only 2 to 5 companies are selected as suppliers through a tender, drug prices aredramatically dropped down.
･ Revenue from Gran, a neutropenia treatment drug, has been growing particularly in South Korea.
< Other revenue >● Revenue from Others increased year on year.
･ Technology out-licensing increased due to the recognition of revenue of upfront payment of USD400 million overa certain period in conjunction with the conclusion of an agreement in 2021 with Amgen Inc. to jointly develop
and commercialize KHK4083, anti-OX40 fully human monoclonal antibody for the treatment of atopic dermatitis,in addition to an increase in royalties revenue from AstraZeneca in relation to benralizumab.
(iii) Core operating profit● Core operating profit increased compared to the previous fiscal year due mainly to an increase in gross profit due
to increases in revenue from U.S. and Europe, mainly from global strategic products, and in revenue fromtechnology out-licensing, despite increases in research and development expenses mainly regarding progress indevelopment of next-generation strategic products, in addition to increases in selling, general and administrative
expenses related to investments in human resources and in IT/digital platform aimed at maximizing the value of
global strategic products and rapidly establishing competitive global business bases. The positive effect on core
operating profit from foreign exchange was ¥11.0 billion.
- 30 -

(3) Cash Flow Summary for Fiscal 2022
Information is provided in “II. Overview of Business, 3 Management Analysis of Financial Position, Business
Performance and Cash Flows, (5) Analysis of business performance and financial position from management’s
perspective, (iii) Analysis of cash flows, capital resources and liquidity of funds.”(4) Results of production, orders received, and sales(i) Production
Production in the fiscal year ended December 31, 2022 is as follows.
Segment nameAmount (Millions of yen)Pharmaceuticals
Total

Year-on-year (%)

152,121102.3

152,121102.3

Notes: 1. Amounts are based on selling prices.
2. Any elimination or other adjustments have not been made to intermediate products used as raw
materials, etc. within the Group, because the transaction amount is insignificant.
(ii) Orders received
The Group mainly manufactures products in accordance with sales plans. Although some products are
manufactured on a made-to-order basis, the information is omitted because the volume of orders received and theamount of order backlog are immaterial.
(iii) Sales results
Sales results in the fiscal year ended December 31, 2022 are as follows.
Segment nameAmount (Millions of yen)Pharmaceuticals
Total
Note:

Year-on-year (%)

398,371113.1

398,371

113.1

Sales results by key customer and the corresponding percentage to the total sales are as follows.
Customer
Alfresa Corporation

Note:

Fiscal year ended December 31, 2021

Fiscal year ended December 31, 2022

Amount(Millions of yen)Amount(Millions of yen)

Percentage (%)

35,457

10.1–

Percentage (%)–

Revenue of Alfresa Corporation in the fiscal year ended December 31, 2022 is not presented because
it is less than 10% of revenue stated in the consolidated statement of profit or loss.

- 31 -

(5) Analysis of business performance and financial position from management’s perspective
Forward-looking statements in this document are based on the judgment of the Group at the end of the current fiscal
year (as of December 31, 2022).
(i)

Significant accounting estimates and assumptions used in those estimates
The consolidated financial statements of the Group are prepared in accordance with IFRS. Of accounting estimatesand assumptions used in those estimates in preparing of these consolidated financial statements, significant
estimates and assumptions are provided in “V. Financial Information, 1 Consolidated Financial Statements, Etc., (1)Consolidated financial statements, Notes to consolidated financial statements, 2. Basis of preparation, (5)Accounting judgments, estimates and assumptions.”(ii) Analysis of financial position and business performance for fiscal 2022
An analysis of the Group’s financial position and business performance for fiscal 2022 is provided in “II. Overview ofBusiness, 3 Management Analysis of Financial Position, Business Performance and Cash Flows (1) Summary ofConsolidated Financial Position for Fiscal 2022, (2) Summary of Business Performance in Fiscal 2022.”● Objective KPIs, etc. to assess the achievements of management targets
The management targets for the fiscal year ending December 31, 2025, the final year of the financial KPIs in the
FY2021-2025 Medium Term Business Plan, and the results for fiscal 2022 are as follows.
FY2025 management
Consolidated results
targetsfor FY2021
ROE

10% or higher

7.1% Profit / Average beginning and ending equity

Revenue growth ratio(CAGR)

10% or higher

11.9%

R&D expense ratioCore operating profit
ratio

Targeting 18-20% tosupport active investment

Annual average growth rate with fiscal 2020 asbase year

15.8% Research and development expenses / Revenue

25% or higher

21.8% Core operating profit / Revenue

38.9%
Increased
dividend
Targeting sustained
dividend hikes with 40%
for the sixth
consecutive fiscal year
The figure indicates the dividend payout ratio based on core EPS (calculated as an indicator showing
recurring profitability by dividing core profit (determined by subtracting “other income,” “other expenses” andthe related “income tax expense” from “profit”) by the average number of shares during the period).

Dividend payout ratio(Note)
Note:

In the FY2021–2025 Medium Term Business Plan, the Group is targeting medium- to long-term improvement in ROE
and sustained rises in dividends by continuously enhancing growth potential, capability to create innovation, andprofitability, and it aims to establish a stable earnings structure and achieve sustainable growth as a global specialty
pharmaceutical company. The Group has set the five financial KPIs of “ROE,” “revenue growth ratio,” “R&D expense
ratio,” “core operating profit ratio,” and “dividend payout ratio” as objective KPIs to assess the achievements ofmanagement targets.
In the fiscal year under review, top-line growth was led by the growth of Crysvita, Poteligeo, and other global
strategic products, along with licensing revenue, and assisted by the depreciation of the yen. Furthermore, the Group
steadily advanced with the establishment of an IT digital platform, aggressive investment in human resources, andpreparations for proprietary commercialization of Crysvita in North America from 2023, which are necessary for its
growth as a Japan-based global specialty pharmaceutical company. On the other hand, the Group halted
development of KW-6356 and joint development of ME-401 with MEI Pharma, Inc. outside of Japan. As a result,revenue increased by ¥46.1 billion from the previous fiscal year to ¥398.4 billion (revenue growth ratio of 11.9%).
Compared with the previous fiscal year, selling, general and administrative expenses increased by ¥20.6 billion to¥166.2 billion, research and development expenses increased by ¥5.2 billion to ¥62.9 billion (R&D expense ratio of
15.8%) while core operating profit increased ¥21.0 billion to ¥86.7 billion (a core operating profit ratio of 21.8%), andprofit increased ¥1.2 billion to ¥53.6 billion. As a result, the Group achieved increases in both revenues and profits.
ROE was 7.1% (7.3% in the previous fiscal year).
The Board of Directors has resolved to pay a year-end dividend for fiscal 2022 of ¥27 per share. When approved at
the 100th Ordinary General Meeting of Shareholders scheduled to be held on March 24, 2023, the annual dividend,
including the interim dividend of ¥24 per share, will be ¥51, up ¥5 from the previous fiscal year (dividend payout ratioof 38.9%) and an increase for the sixth consecutive fiscal year.

- 32 -

(iii) Analysis of cash flows, capital resources and liquidity of funds● Cash Flow Summary for Fiscal 2022
(Billions of yen)
Fiscal year ended Fiscal year ended
December 31, 2021 December 31, 2022
Net cash provided by (used in)operating activities
Net cash provided by (used in)investing activities
Net cash provided by (used in)financing activities
Cash and cash equivalents
at beginning of period
Cash and cash equivalents
at end of period

Year-on-yearchangeRate of change
(%)

86.5

48.7

(37.9)(43.8)%(11.4)(17.2)

(5.8)

51.2%

(28.4)(29.0)

(0.6)

2.1%

287.0

335.1

48.1

16.7%

335.1

339.2

4.1

1.2%

● Cash and cash equivalents as of December 31, 2022 were ¥339.2 billion, an increase of ¥4.1 billion compared to●●●the balance of ¥335.1 billion as of December 31, 2021.
The main contributing factors affecting cash flow during the current fiscal year were as follows:
Net cash provided by operating activities was ¥48.7 billion, compared with net cash provided by operating
activities of ¥86.5 billion in the previous fiscal year. Major inflows included impairment losses of ¥18.0 billion in
addition to profit before tax of ¥67.6 billion and depreciation and amortization of ¥18.5 billion. Major outflows
included income taxes paid of ¥22.6 billion and decrease (increase) in inventories of ¥8.9 billion.
Net cash used in investing activities was ¥17.2 billion, compared with net cash used in investing activities of¥11.4 billion in the previous fiscal year. Major outflows included purchase of property, plant and equipment of¥15.6 billion and purchase of intangible assets of ¥13.1 billion. On the other hand, major inflows included
revenue from advance receipt from sale of investment securities of ¥4.2 billion, proceeds from redemption ofbonds of subsidiaries and associates of ¥4.0 billion, and proceeds from sale of investment securities of ¥3.7
billion.
Net cash used in financing activities was ¥29.0 billion, compared with net cash used in financing activities of¥28.4 billion in the previous fiscal year. Major outflows included dividends paid of ¥25.3 billion.

- 33 -

●

Basic capital policy
In the FY2021–2025 Medium Term Business Plan, the Group has set return on equity (ROE) as a key performanceindicator (KPI) for sustainable growth and medium- to long-term corporate value increase. The group aims toachieve ROE that stably exceeds cost of capital at 10% or higher at an early stage, and to maintain and increase
this level over the medium to long term.
The policies regarding the allocation of management resources, shareholder returns and financing in order torealize those aims are as follows:･ Policy for allocation of management resources
The Company considers investments for future growth (R&D investments, strategic investments and capital
expenditures) to be a top priority in order to achieve sustainable growth from the fiscal year ending December 31,
2025 and maximize corporate value.
In R&D investment, in the FY2021-2025 Medium Term Business Plan, the Group aims to make ongoing proactive
investments in research and development expenses equal to around 18-20% of revenue. In terms of investing
resources in research and development activities, we will concentrate our attention on development-related
investments aimed at maximizing the value of our pipeline, with a focus on next-generation strategic products, while
also actively conducting research-related investments aimed at long-term innovation such as building of technology
platforms that make full use of multiple therapeutic modalities to create groundbreaking new drugs. In addition, we will
aim to continuously create new drugs that offer life-changing value.
In the fiscal year under review, R&D activities were as described in 5 Research and Development Activities under II.
Overview of Business.
In strategic investments, we will actively utilize external resources for strategic partnering (in-licensing, tie-ups, etc.)
and M&A to tap external innovation, such as drug discovery technologies created through open innovation and newcompounds for our development pipeline. We will also target faster, sustained growth by expanding our pipeline overthe medium and long term, generating synergies with existing global strategic products, and increasing opportunities
to create unique value. The Strategic Investment Review Committee, which is led by the Executive Director of theBoard, President and Chief Executive Officer, continuously discusses potential targets for strategic growthinvestments. The discussion focuses primarily on the following kinds of strategic investments.
(i) In-licensing and M&A investments for strengthening the portfolio･ Development pipelines that have synergy with Crysvita and Poteligeo (bone, mineral and blood cancer domains)･ Licensing utilizing the strengths of each region (nephrology, blood/oncology, immunology)(ii)
Investment in science and technology to create new strengths･ Investment targeting the capture of new drug discovery technologies and early-stage pipelines, as well as
acceleration of joint operations and collaboration･ Venture Capital (VC) investments and Corporate Venture Capital (CVC) activities aiming at information searching
and accessIn the fiscal year under review, the Group sought to increase its means of early access to the latest drug discovery
technology information and product information by continuing to invest in multiple VC funds and embarking on CVC
activities to further accelerate such efforts.
Strategic Investment 〜For successful creation and delivery of life-changing value
Licensing-in and M&A investments tostrengthen the portfolio●●

Development pipeline with synergies
with Crysvita and Poteligeo
 Bone, Mineral Hematologic oncology
Implementing the strengths of eachregion Nephrology Hematology / Oncology
 Immunology

Investment in science and technology
to create new strengths●●

Investments aimed at acquiring new
drug discovery technologies andearly pipelines and accelerating
cooperation and collaborations

2021-2025 Cash-Allocation*
SourceCash to be newly generated during the
FY2021-2025 Medium Term Business Plan(cumulative)
Operating cash flow before
deduction of R&D expenses:¥800 billion or higher(Operating CF + R&D expenses)
Cash on hand:
Approximately ¥300 billion(at the end of 2020)+ Borrowing capacity

Allocation
R&D investment:
Approximately ¥400 billion(R&D expense ratio of 18-20%)

Growthinvestment

Strategic investment(Pipeline, drug discovery technology, etc.)

CAPEX:
Approximately ¥100 billion(Stable global production and supply-chain
framework, IT/digital investment, etc.)

Shareholder
returnDividend(Core EPS-based payout ratio of 40%)

Share repurchases(Flexible approach)*2021-2025 Medium-Term Management Plan Cash Allocation, published February 4, 2021.

VC investment and CVC activities for
exploring and accessing information.

With regard to capital expenditures, we will invest heavily to create a more competitive business structure to help us
maximize the value of global strategic products. We will focus particularly on establishing a robust quality assurance
and production system to ensure a stable global supply of safe and high-quality pharmaceuticals. In addition, byinvesting in the establishment and development of platforms for strategic IT and digital utilization and thestrengthening of global governance and risk management functions, we will quickly establish a global businessfoundation that will support sustainable growth as a Japan-based global specialty pharmaceutical company.
- 34 -

In the fiscal year under review, we conducted capital expenditures (including intangible assets and long-term prepaid
expenses) of ¥24.6 billion. We made investments in the new construction of a multipurpose facility (Q-TOWER)
relating to quality assurance equipped with the most advanced biopharmaceutical analysis equipment in Japan, the
new construction of a biopharmaceutical active pharmaceutical ingredient (API) manufacturing building (HB7) for
accelerating early-stage development experiments, the new construction of a warehouse building to enable stablesupply globally, and the strengthening of our IT digital platforms in part for overseas regional introduction of global
enterprise resource planning (ERP).
In assessing the business viability of these investment and development projects, the main quantitative criteria are
net present value (NPV) and expected present value (EPV) using the hurdle rate (by region) that reflects the cost ofcapital (WACC), which investors expect of the Company. When making investment decisions, we place importanceon contributing to medium- to long-term increase in corporate value by generating returns that exceed the cost ofcapital.
･ Shareholder return policy
Regarding its policy on dividends, the Company set its target dividend payout ratio based on core EPS (hereinafter
the “dividend payout ratio”) at 40% in the FY2021-2025 Medium Term Business Plan. The Company aims to ensure astable and sustained increase in the level of dividend payment (continuous increase of dividend payments) in line withmedium- to long-term growth in profits. In accordance with this policy, in the fiscal year under review, we plan to pay a
dividend of ¥51 per share (dividend payout ratio of 38.9%), which is an increase of ¥5 per share from fiscal 2021. In
addition, we plan to increase the dividend for the seventh consecutive fiscal year by paying ¥54 (dividend payout ratioof 39.9%) in fiscal 2023. With regard to stock repurchases, we will adopt a flexible approach that takes the shareprice into account.
To generate sustained growth and maximize corporate value as a Japan-based global specialty pharmaceuticalcompany, we will enhance the Group’s growth potential, capability to innovate, and profitability in order to improve
ROE over the medium- to long-term and support sustained increases in the dividend.
･ Financing policy
We will continue to maintain our net cash position in principle. In addition to cash on hand, we will secure sufficientborrowing capacity and methods of flexible financing (CPs (commercial papers) and commitment lines) for strategic
large-scale investment projects, and maintain sufficient financial flexibility.

- 35 -

4

Material Contracts, Etc.

(1) Technology out-licensing agreements
CompanyCounterparty
Country
name

The
Company

MedImmune

UnitedStatesThe
Company

AstraZeneca

SwedenThe
Company

AstraZeneca

SwedenThe
Company

Amgen

UnitedStatesThe
Company

AVEO Oncology

UnitedStates(2) Technology in-licensing agreements
Development productsCompanyCounterparty
Country
name

The
CompanyThe
Company

Reata
Pharmaceuticals
Holdings

Ardelyx

Details of contracts

Contract period

License to develop,
The longer of a 10manufacture and sellyears period after thean anti-IL-5R
commencement ofantibody (genericsales or a period up to
name: benralizumab)
the last day of thein Europe, the U.S.
patent life, fromand some Asian
December 18, 2006
countries
Automatic renewal
License to develop
every two years sinceand sell an anti-IL10 years after the
5R antibody (genericcommencement of
name: benralizumab)
sales, from July 1,
in Japan2015
Automatic renewal
License to develop
every two years sinceand sell an anti-IL10 years after the
5R antibody (genericcommencement of
name: benralizumab)
sales, from March 23,
in 13 Asian countries
2017
License to jointly
develop andIndefinitely from June
commercialize
1, 2021
outside Japan
KHK4083
License to develop,
manufacture and selltivozanib in the
From December 21,
oncology area in2006 until agreement
locations outside of
expiration
Asia but including
Japan

Consideration

Upfront income
Milestone revenue
Flat-rate royalty

Upfront income
Milestone revenue
Flat-rate royalty

Upfront income
Milestone revenue
Flat-rate royalty

Upfront income
Milestone revenue
Flat-rate royalty

Flat-rate royalty

Details of contracts

Contract period

Consideration

UnitedStatesLicense to develop
and sell Bardoxolone
Methyl (code name:
RTA402) in the Asian
region including
Japan

The longer of a 10years period after thecommencement ofsales or a period up to
the last day of thepatent life, from
December 24, 2009

Upfront payment
Milestone expenditure
Flat-rate royalty

UnitedStatesLicense to develop
and sell Tenapanor
Hydrochloride (codename: KHK7791) inJapan

From November 27,
2017 to the expirationof the period of royalty
payment

Upfront payment
Milestone expenditure
Flat-rate royalty

From August 1, 2019
Buyback of the rights
to the expiration of the Upfront payment
The
Unitedfor non-cancer field
AVEO Oncology
period of royalty
Milestone expenditure
Company
Statesof tivozanib (codepayment in eachFlat-rate royalty
name: KHK4951)
countryNote:
The agreement with AM-Pharma B.V. for the development and commercialization of Ilofotase Alfa in Japan isomitted because it is no longer material due to the decision to discontinue the development.

- 36 -

Products for saleCompanyCounterparty
name
The
CompanyThe
Company

Amgen K-A

Shire-NPS
Pharmaceuticals

Country

Details of contracts

Contract period

UnitedStatesLicense to
manufacture andsell G-CSF(product name:Gran G-Lasta)

Lifetime of Amgen K-Afrom July 1, 1986
(indefinite)

Flat-rate royalty

License to develop,
manufacture andsell a calcium
receptor agonist(product name:Regpara)The longer of a 10years period after thecommencement ofsales or a period up to
the last day of thepatent life, from June30, 1995 (after that,
the Company will havethe right to continue
the sale)

Milestone expenditure
Flat-rate royalty

Lifetime of Amgen K-Afrom March 1, 1996
(indefinite)

Flat-rate royalty

Lifetime of Amgen K-Afrom July 1, 2005
(indefinite)

Flat-rate royalty

The longer of a 10years period after thecommencement ofsales or a period up to
the last day of thepatent life, from March
27, 2008 (after that,
the Group will have theright to continue thesale)Upfront payment
Milestone revenue andexpenditure
Flat-rate royalty

Lifetime of Amgen K-Afrom October 29, 2010(indefinite)

Flat-rate royalty

From June 29, 2012 to
the last day of thepatent life (after that,
the Company will havethe right to continue
the sale)Upfront payment
Milestone expenditure
Flat-rate royalty

UnitedStatesThe
Company

Amgen K-A

UnitedStatesThe
Company

Amgen K-A

UnitedStatesThe
Company

Mitsubishi Tanabe
PharmaCorporation

Japan

The
Company

Amgen K-A

UnitedStatesThe
Company

OtsukaJapan andPharmaceutical andUK
AstraZeneca

License to
manufacture andsell a long-acting
erythropoiesisstimulating agent(product name:
Nesp)
License to
manufacture andsell a platelet
hematopoietic
stimulating factor(product name:Romiplate)
License forcollaborative
research on a
calcium receptor
agonist (productname: Orkedia)
and development,
manufacturing andsales of the productin five Asian
countries
License to
manufacture andsell a human antiIL-17 receptor A
monoclonal
antibody
formulation(product name:
Lumicef)
License to develop
and sell atreatment fordiabetes (productname: Onglyza)- 37 -

Consideration

Company
name

Kyowa
Kirin
Services
Ltd

Counterparty

AstraZeneca(3) Sales agreements
CompanyCounterparty
nameCountry

SwedenCountry

The
Company

Novartis Pharma

Japan

The
Company

HISAMITSU
PHARMACEUTICALJapan

Details of contracts

Contract period

Consideration

License to develop
and sell in Europe
a treatment of
opioid-induced
constipation (OIC)(product name:Moventig)

The longer of a 10years period after thecommencement ofsales or a period up to
the last day of thepatent life, for eachtarget country, fromFebruary 29, 2016
(after that, the Groupwill have the right tocontinue the sale)Upfront payment
Milestone expenditure
Flat-rate royalty

Details of contracts

Contract period

Agreement for joint commercialization
promotion for anti-allergy eye drops (productname: Patanol)
Agreement for joint commercialization for atreatment for transdermal persistent pain
(product name: Fentos)

From June 27, 2006 to
the end of sales inJapan
From June 18, 2008 to
the end of sales
The longer of a 10years period after thecommencement ofsales or a period up to
the last day of thepatent life, from June 1,
2012
From December 19,
2013 to the expiration of
the period agreed withthe counterparty
Automatic renewal
every two years since
10 years after thecommencement ofsales, from December
24, 2015, only if theboth companies agree

Kyowa
Kirin
Services
Ltd

Orexo

SwedenSales agreement for a treatment for cancer
pain (sublingual tablet) (product name:
Abstral)The
Company

LEO Pharma

Denmark

Cooperative sales agreement for a treatment
for psoriasis vulgaris (topical agent) (productname: Dovobet)

The
Company

SandozJapan

Sales agreement for an anticancer agent(product name: Rituximab BS [KHK])

The
Company

HISAMITSU
PHARMACEUTICAL

Japan

Sales agreement for antiparkinsonian agent(patch) (product name: HARUROPI)From February 5, 2019
to the end of sales

Japan

Cooperative sales agreement for renal
anemia treatment drug (oral) (product name:Duvroq)From the contract dateto the expiration of theperiod agreed with thecounterparty

Country

Details of contracts

Contract period

The
Company

GlaxoSmithKline(4) Collaboration agreements
CompanyCounterparty
nameAgreement for joint development and jointcommercialization for an anti-FGF23 fully
From August 29, 2013
Ultragenyx
human monoclonal antibody (product name:to the end of sales
Crysvita)
The agreement with MEI Pharma for the joint development and joint commercialization in the United States andsales outside the United States of zandelisib (code name: ME-401) is omitted because it is no longer material
due to the decision to discontinue the joint development outside Japan.

The
Company
Note:

UnitedStates- 38 -

(5) Joint venture agreements
CompanyCounterparty
name

The
Company

FUJIFILM
Corporation

CountryJapan

Details ofcontracts
Joint ventureagreement fordevelopment,
manufacturing,and sales ofbiosimilars

Investment
amountName of the joint
ventureDate ofestablishment

The Company:¥50 million
FUJIFILM
Corporation:¥50 million

FUJIFILM KYOWAKIRIN BIOLOGICS
Co., Ltd.
(Capital: ¥100
million)March 2012(6) Integration agreement with Kirin Holdings Company, Limited
CompanyCounterparty
Country
Details of contracts
nameThe
Company

Kirin Holdings

Japan

Basic agreement for strategic alliance
between the Group and the Kirin Group

Contract date
October 22, 2007

(7) Other
CompanyCounterparty
Country
Details of contracts
Contract date
name
The
Agreement to transfer shares of KYOWA
Kirin Holdings
Japan
February 5, 2019
Company
HAKKO BIO CO., LTD. (Note)
Kyowa
Kirin
Cooperative agreement for a joint venture of
Grünenthal
Germany
November 23, 2022
Internatio
established medicines
nal plc
Note:
The rights to sell all the residual interest in the stock of KYOWA HAKKO BIO CO. LTD. to Kirin Holdings
Company, Limited were exercised on January 1, 2023, in accordance with the agreement, thereby completingthe share transfer as of that date.

- 39 -

5

Research and Development Activities

The Group continuously and actively invests resources in research and development activities. We aim to advance botha technological pillar that can build a platform for applying various modalities and discovering innovative drugs and adisease pillar that continues to provide “only-one value drugs” for diseases for which there are no effective treatments
while utilizing the disease science accumulated by the Group thus far, build a highly competitive pipeline, and provide
new drugs with life-changing value worldwide.
For the fiscal year ended December 31, 2022, the Group’s research and development expenses totaled ¥62.9 billion,
and our progress in the respective disease fields of our main late-stage development products is as follows.
(“◆” indicates the progress made during the fourth quarter of fiscal 2022.)
Nephrology
KHK7580 (product name in Japan: ORKEDIA)･ In July 2022, we applied for approval for marketing as its indication for treatment of secondary hyperparathyroidism
in China.
◆In November 2022, we applied for approval for marketing as its indication for treatment of secondary
hyperparathyroidism in South Korea.
KHK7791 (generic name: Tenapanor Hydrochloride)◆In October 2022, we applied for approval for improvement of hyperphosphatemia in chronic kidney disease patientson dialysis in Japan.
Oncology
KW-0761 (product name in Japan, U.S. and Europe: POTELIGEO)◆In October 2022, we obtained approval of its indication for treatment of mycosis fungoides and Sézary syndrome in
China.
KRN125 (product name in Japan: G-Lasta)･ In February 2022, we obtained approval of its indication for treatment of the mobilization of hematopoietic stem cells
into peripheral blood for allogenic blood stem cell transplantation in Japan.
･ In July 2022, we obtained approval for an automated injection device for decreasing the incidence of febrileneutropenia in patients receiving cancer chemotherapy in Japan.
◆In December 2022, we launched “G-Lasta Subcutaneous Injection 3.6 mg BodyPod,” an automated injection devicefor decreasing the incidence of febrile neutropenia in patients receiving cancer chemotherapy, in Japan.
ME-401 (generic name: Zandelisib)◆Although global clinical studies had been conducted with MEI Pharma, Inc., global development of zandelisib
outside of Japan for B-cell malignancies was discontinued in December 2022 after receiving the most recent
guidance from the U.S. Food and Drug Administration (FDA).
Immunology and allergy
KHK4827 (product name in Japan: LUMICEF)･ In September 2022, we filed an application in Japan for a partial change for approval of its planned indication for
palmoplantar pustulosis.
KHK4083/AMG 451 (generic name: rocatinlimab)◆In December 2022, enrollment for the multi-regional phase III clinical trial for atopic dermatitis was restarted.
Other
AMG531 (product name in Japan: Romiplate)･ In January 2022, we obtained approval of its indication for treatment of adult patients with chronic Immune
Thrombocytopenia (ITP) who do not respond well to other treatments, such as corticosteroids and immunoglobulin,in China.
◆In November 2022, we filed an application in Japan for a partial change for approval of its indication for treatment ofaplastic anemia.
KRN23 (product name in Japan, U.S. and Europe: Crysvita)･ In August 2022, we obtained approval of its indication for treatment of tumor induced osteomalacia in Europe.

- 40 -

R&D pipeline- 41 -

- 42 -

III. Information about Facilities
1

Overview of Capital Expenditures
The Group continuously makes capital investments to expand and streamline production facilities and enhance R&D
capabilities.
For the fiscal year ended December 31, 2022, the Group’s capital expenditures (excluding right-of-use assets) totaled¥17,692 million.

2

Major Facilities
Major facilities of the Group are as follows:(1) Reporting company(As of December 31, 2022)
Carrying amount (Millions of yen)
Office name
(Location)

Segment name

Details of facilities

Buildings
andstructures

Manufacturing facilities
Takasaki Plant
Pharmaceuticals for pharmaceutical(Takasaki-shi, Gunma)
products
Manufacturing facilities
Ube Plant
Pharmaceuticals for pharmaceutical(Ube-shi, Yamaguchi)
products
Bio Process Researchand Development
Research facilities for
Pharmaceuticals
Laboratories
pharmaceutical products(Takasaki-shi, Gunma)
Tokyo Research Park
(Machida-shi, Tokyo)
Fuji Research Park
(Nagaizumi-cho,Sunto-gun, Shizuoka)
CMC R&D Center(Nagaizumi-cho,Sunto-gun, Shizuoka)
Head Office(Chiyoda-ku, Tokyo)

MachineryLand
and[Area in m2]
vehicles

Other

Total

Number of
employees(Persons)

11,906

7,571

315(142,135)

3,755

23,547

499

3,583

2,049

3,308
(105,968)

237

9,177

204

814

5

–
(–)

780

1,599

142

Pharmaceuticals

Research facilities forpharmaceutical products

2,907

8

3,366
(34,707)

1,211

7,491

164

Pharmaceuticals

Research facilities forpharmaceutical products

4,754

53

252
(82,235)

1,152

6,211

291

Pharmaceuticals

Research facilities forpharmaceutical products

1,535

311

–
(–)

498

2,345

174

Pharmaceuticals

Management facilities,
etc.

4,587

1,010

1,247
(2,325)

251

7,095

1,189

Notes: 1. The carrying amount represents the carrying amount of property, plant and equipment, excluding
construction in progress.
2. The “buildings and structures” and “machinery and vehicles” of the head office, “land” of the Ube Plant, etc.
include right-of-use assets.
(2) Domestic subsidiaries
Not applicable.
(3) Foreign subsidiaries(As of December 31, 2022)
Carrying amount (Millions of yen)Company name

Office name
(Location)

Segment name

Details offacilities

Buildings Machinery
Land
and
and
[Area in m2]
structures vehicles

Research
La Jolla Institute forfacilities for
Kyowa Kirin, Inc. Immunology
Pharmaceuticals
pharmaceutical(California, U.S.)
products
Kyowa Kirin
Manufacturing
China
Head Office Plant
facilities for
Pharmaceuticals
Pharmaceutical (Shanghai, China)
pharmaceuticalCo., Ltd.
products

Notes:

Other

Total

Number of
employees(Persons)

2,738

–

4,414
(13,059)

125

7,277

62

231

363

–
(–)

78

671

323

1. The carrying amount represents the carrying amount of property, plant and equipment, excluding constructionin progress.
2. The land of Kyowa Kirin, Inc. is a right-of-use asset.

- 43 -

3

Planned Addition, Retirement, and Other Changes of Facilities
The Group’s planned additions, expansion, etc. of major facilities as of December 31, 2022 are as follows.
We have no planned retirements, sales or other changes of major facilities.

Company name

Office name
(Location)

Segment
nameKyowa Kirin Co.,Ltd.

Takasaki Plant(Takasaki-shi, Gunma)

Pharmaceuticals

Kyowa Kirin Co.,Ltd.

Takasaki Plant(Takasaki-shi, Gunma)

Pharmaceuticals

Kyowa Kirin Co.,Ltd.

Takasaki Plant(Takasaki-shi, Gunma)

Pharmaceuticals

Details of facilities

Construction of a new
multipurpose facility
relating to quality
assurance (Note 2)
Construction of a new
biopharmaceutical API
manufacturing facility
Construction of a newwarehouse building

Planned investment
Scheduled start and completion
amount (Note 1)
Total amount Amount paid
(Millions of (Millions ofStart
Completion
yen)
yen)
October 2020

December
2023−

November
2022

January 2025−

October 2023

October 2025

14,0005,719

15,0007,200

Notes: 1. We plan to procure the required funds above from cash on hand.
2. The quality building, whose construction had been scheduled to be completed in December 2022 at theend of the previous fiscal year, was completed in December 2022. It continues to be undergoing
equipment installation, to start operations in stages.

- 44 -

IV. Information about Reporting Company
1Company’s Shares, Etc.
(1) Total number of shares, etc.
(i) Total number of shares
Class

Total number of authorized shares (Shares)

Ordinary shares

987,900,000
Total

987,900,000(ii) Issued shares

Class

Number of shares outstanding Number of shares outstanding
as of fiscal year end (Shares)
as of filing date (Shares)(December 31, 2022)(March 9, 2023)

Name of financial
instruments exchange
on which securities arelisted or authorized
financial instruments
business association
to which securities areregistered

Description

Number ofshares per
share unit is100.
–

Ordinaryshares

540,000,000

540,000,000

Tokyo Stock Exchange(Prime Market)

Total

540,000,000

540,000,000–- 45 -

(2) Share acquisition rights(i) Share option plans
Details of share acquisition rights which were issued as share options by 2022 and whose exercise period has
not expired are as follows:

Date of resolution
Category and number of grantees
Number of share acquisition rights (Unit)(Note 1)
Class, description and number of sharessubject to share acquisition rights (Note1)
Amount to be paid in for exercise ofshare acquisition rights (Yen) (Note 1)
Exercise period of share acquisitionrights (Note 1)
Issue price of shares and amountincorporated into capital in case of shareissuance upon exercise of shareacquisition rights (Yen) (Note 1)

Conditions for exercise of shareacquisition rights (Note 1)

Matters concerning transfer of shareacquisition rights (Note 1)
Matters concerning the granting of shareacquisition rights following a corporate
reorganization (Note 1)

March 20, 2014 (Ordinary General
March 20, 2015 (Ordinary General
Meeting of Shareholders)Meeting of Shareholders)and March 20, 2014 (Board ofand March 20, 2015 (Board of
Directors meeting)Directors meeting)Director of the Company: 5
Director of the Company: 5
Executive Officer of the Company: 16 Executive Officer of the Company: 16
5 (Note 2)

5 (Note 2)

Ordinary shares
5,000 (Notes 2 and 3)

Ordinary shares
5,000 (Notes 2 and 3)

The amount obtained by multiplying ¥1, which is the amount to be paid in per
share to be issued or transferred upon exercise of share acquisition rights,
by the number of granted shares
From March 22, 2014
From March 22, 2015
to March 20, 2034
to March 20, 2035
Not applicable. (Note 4)(i) The holder of the share acquisition rights may exercise his or her shareacquisition rights within 10 days from the day following the day on which
he or she ceases to be a Director or an Executive Officer of the Company(excluding cases where the individual continues to serve as an employeeof the Company), or an individual serving as an Executive Officer
assumes office as a Director or Audit & Supervisory Board Member of theCompany.
(ii) Partial exercise of one share acquisition right is not permitted.
Any transfer of the share acquisition rights shall be subject to the approval of
the Board of Directors of the Company.
–- 46 -

Date of resolution
Category and number of grantees

March 24, 2016 (Ordinary General Meeting of Shareholders)and March 24, 2016 (Board of Directors meeting)Director of the Company: 5
Executive Officer of the Company: 17

Number of share acquisition rights (Unit)(Note 1)
Class, description and number of sharessubject to share acquisition rights (Note1)
Amount to be paid in for exercise ofshare acquisition rights (Yen) (Note 1)
Exercise period of share acquisitionrights (Note 1)
Issue price of shares and amountincorporated into capital in case of shareissuance upon exercise of shareacquisition rights (Yen) (Note 1)

Conditions for exercise of shareacquisition rights (Note 1)

4 (Note 2)
Ordinary shares
4,000 (Notes 2 and 3)
The amount obtained by multiplying ¥1, which is the amount to be paid in per
share to be issued or transferred upon exercise of share acquisition rights,
by the number of granted shares
From March 26, 2016
to March 24, 2036
Not applicable. (Note 4)(i) The holder of the share acquisition rights may exercise his or her shareacquisition rights within 10 days from the day following the day on which
he or she ceases to be a Director or an Executive Officer of the Company(excluding cases where the individual continues to serve as an employeeof the Company), or an individual serving as an Executive Officer
assumes office as a Director or Audit & Supervisory Board Member of theCompany.
(ii) Partial exercise of one share acquisition right is not permitted.
Any transfer of the share acquisition rights shall be subject to the approval of
the Board of Directors of the Company.

Matters concerning transfer of shareacquisition rights (Note 1)
Matters concerning the granting of shareacquisition rights following a corporate–
reorganization (Note 1)
Notes: 1. Information provided is as at the end of the current fiscal year (December 31, 2022). The information as at theend of the month before the filing date (February 28, 2023) is omitted, because there are no changes from theinformation as at the end of the current fiscal year.
2. The number of shares subject to one share acquisition right (the “number of granted shares”) shall be 1,000
shares.
3. As for the number of shares subject to share acquisition rights, the number of granted shares shall be
adjusted by the following formula if the Company conducts a stock split or a reverse split.
Number of shares after adjustment = Number of shares before adjustment × Split/consolidation ratio
Any fraction less than one share resulting from the adjustment shall be rounded down.
4. All shares to be issued to the holders of the share acquisition rights upon exercise of the share acquisitionrights are treasury shares, and no new shares are issued as a result of the exercise.

- 47 -

Date of resolution

Category and number of grantees
Number of share acquisition rights (Unit)(Note 1)
Class, description and number of sharessubject to share acquisition rights (Note1)
Amount to be paid in for exercise ofshare acquisition rights (Yen) (Note 1)
Exercise period of share acquisitionrights (Note 1)
Issue price of shares and amountincorporated into capital in case of shareissuance upon exercise of shareacquisition rights (Yen) (Note 1)
Conditions for exercise of shareacquisition rights (Note 1)
Matters concerning transfer of shareacquisition rights (Note 1)
Matters concerning the granting of shareacquisition rights following a corporate
reorganization (Note 1)

March 23, 2017 (Ordinary General
March 23, 2018 (Ordinary General
Meeting of Shareholders)Meeting of Shareholders)and March 23, 2017 (Board ofand March 23, 2018 (Board of
Directors meeting)Directors meeting)Director of the Company: 5
Director of the Company: 4
Executive Officer of the Company: 17 Executive Officer of the Company: 19
Director of subsidiaries: 7
Director of subsidiaries: 3
187 [69] (Note 2)

311 [261] (Note 2)

Ordinary shares
18,700 [6,900] (Notes 2 and 3)

Ordinary shares
31,100 [26,100] (Notes 2 and 3)

The amount obtained by multiplying ¥1, which is the amount to be paid in per
share to be issued or transferred upon exercise of share acquisition rights,
by the number of granted shares
From March 25, 2020
From March 27, 2021
to March 23, 2023
to March 25, 2024
Not applicable. (Note 4)
Partial exercise of one share acquisition right is not permitted.
Any transfer of the share acquisition rights shall be subject to the approval of
the Board of Directors of the Company.
–- 48 -

March 20, 2019 (Ordinary General Meeting of Shareholders)and March 20, 2019 (Board of Directors meeting)Director of the Company: 4
Executive Officer of the Company: 16
Director of subsidiaries: 3

Date of resolution
Category and number of grantees
Number of share acquisition rights (Unit)(Note 1)
Class, description and number of sharessubject to share acquisition rights (Note1)
Amount to be paid in for exercise ofshare acquisition rights (Yen) (Note 1)

464 [421] (Note 2)
Ordinary shares
46,400 [42,100] (Notes 2 and 3)
The amount obtained by multiplying ¥1, which is the amount to be paid in per
share to be issued or transferred upon exercise of share acquisition rights,
by the number of granted shares

Exercise period of share acquisition
From March 23, 2022 to March 21, 2025
rights (Note 1)
Issue price of shares and amountincorporated into capital in case of share
Not applicable. (Note 4)
issuance upon exercise of shareacquisition rights (Yen) (Note 1)
Conditions for exercise of share
Partial exercise of one share acquisition right is not permitted.
acquisition rights (Note 1)
Matters concerning transfer of share
Any transfer of the share acquisition rights shall be subject to the approval ofacquisition rights (Note 1)
the Board of Directors of the Company.
Matters concerning the granting of share–acquisition rights following a corporate
reorganization (Note 1)
Notes: 1. Information provided is as at the end of the current fiscal year (December 31, 2022). For matters changed in
the period from the end of the current fiscal year to the end of the month before the filing date (February 28,2023), the information as at the end of the month before the filing date is shown in parentheses. For othermatters, there is no change from the information as at the end of the current fiscal year.
2. The number of shares subject to one share acquisition right (the “number of granted shares”) shall be 100
shares.
3. As for the number of shares subject to share acquisition rights, the number of granted shares shall be
adjusted by the following formula if the Company conducts a stock split or a reverse split.
Number of shares after adjustment = Number of shares before adjustment × Split/consolidation ratio
Any fraction less than one share resulting from the adjustment shall be rounded down.
4. All shares to be issued to the holders of the share acquisition rights upon exercise of the share acquisitionrights are treasury shares, and no new shares are issued as a result of the exercise.
(ii) Rights plans
Not applicable.
(iii) Share acquisition rights for other uses
Not applicable.
(3) Exercises of moving strike convertible bonds, etc.
Not applicable.
(4) Changes in total number of issued shares, share capital and additional paid-in capital
Balance of
Change inBalance of
Change in the
Change in legal
Balance ofshare capitalshare capital
legal capital
total number ofDateissued shares
capital surplus(Millions of(Millions ofsurplusissued shares(Millions of yen)
(Shares)yen)yen)(Millions of yen)
(Shares)
February 19, 2019
(36,483,555)
540,000,000–
26,745–
103,807(Note)
Note: The decrease in the total number of outstanding shares is due to retirement of treasury shares.

- 49 -

(5) Shareholding by shareholder category(As of December 31, 2022)

Category

National
and local
governments

Shareholding status (Number of shares constituting one unit: 100)
Foreign corporations
Financial
Other
and others
Financial instruments
Individuals
corporainstitutions businessand others
Nontions
Individuals
operators
individuals

Total

Shares lessthan oneunit(Shares)Number ofshareholders
1
67
40
473
688
26
26,50027,795–(Persons)
Number ofshares held
24 1,028,321
120,437 2,948,727 931,577
277
365,554 5,394,917
508,300(Units)Shareholding
0.00
19.06
2.23
54.66
17.27
0.01
6.78
100
–
ratio (%)
Notes: 1. As for 2,521,197 treasury shares, 25,211 units are included and presented in “Individuals and others,” and 97
shares in the “Shares less than one unit.”
2. “Other corporations” include 120 units of shares registered in the name of Japan Securities Depository
Center, Incorporated.

- 50 -

(6) Major shareholders(As of December 31, 2022)

Name

Address

Number ofshares held(Thousandsof shares)

Shareholding
ratio (excluding
treasury shares)(%)

Kirin Holdings Company, Limited

4-10-2 Nakano, Nakano-ku, Tokyo

288,819

53.74

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

2-11-3 Hamamatsucho, Minato-ku,
Tokyo58,875

10.95

Custody Bank of Japan, Ltd. (Trust Account) 1-8-12 Harumi, Chuo-ku, Tokyo

27,086

5.04

State Street Bank and Trust Company
505223(Standing proxy: Settlement & Clearing
Services Department, Mizuho Bank, Ltd.)

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

9,330

1.74

SMBC Nikko Securities Inc.

3-3-1 Marunouchi, Chiyoda-ku, Tokyo

7,130

1.33

State Street Bank West Client Treaty
505234(Standing proxy: Settlement & Clearing
Services Department, Mizuho Bank, Ltd.)

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

5,114

0.95

JPMorgan Chase Bank 385781(Standing proxy: Settlement & Clearing
Services Department, Mizuho Bank, Ltd.)

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

3,361

0.63

State Street Bank and Trust Company
505025(Standing proxy: Settlement & Clearing
Services Department, Mizuho Bank, Ltd.)

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

3,308

0.62

State Street Bank and Trust Company
505103(Standing proxy: Settlement & Clearing
Services Department, Mizuho Bank, Ltd.)

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

3,164

0.59

3,052

0.57

409,24076.14

SSBTC CLIENT OMNIBUS ACCOUNTONE LINCOLN STREET, BOSTON MA(Standing proxy: Custody Services
USA 02111
Department, Tokyo branch, The Hongkong(3-11-1 Nihonbashi, Chuo-ku, Tokyo)
and Shanghai Banking Corporation Limited)
Total- 51 -

(7) Voting rights(i) Issued shares(As of December 31, 2022)
Number of shares(Shares)Category

Number of voting
rightsDescription

Shares with no voting rights

–

–

–

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

–

–

–

Shares with restricted voting
rights (Other)

–

–

–

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

Ordinaryshares2,521,100––

Shares with full voting rights(Other)Ordinaryshares536,970,600

5,369,706–

Shares less than one unit

Ordinaryshares508,300––

540,000,000

–

–

–

5,369,706–

Total number of issued shares
Voting rights held by all
shareholders

Note: “Shares with full voting rights (Other)” include 12,000 shares registered in the name of Japan Securities
Depository Center, Incorporated. In addition, “Number of voting rights” includes voting rights of 120 units
pertaining to shares with full voting rights registered in the name of the same organization.
(ii) Treasury shares, etc.
(As of December 31, 2022)
Name of shareholder

Kyowa Kirin Co., Ltd.
Total

Address of shareholder

1-9-2 Otemachi,
Chiyoda-ku, Tokyo–

Number ofshares held in
own name(Shares)Number ofshares held inothers’ names(Shares)

Total numberof shares held
(Shares)

2,521,100−

2,521,100

0.47

2,521,100−

2,521,100

0.47- 52 -

Shareholding
ratio (%)

2

Acquisition and Disposal of Treasury Shares[Class of shares, etc.] Acquisition of ordinary shares under Article 155, Item 7 of the Companies Act(1) Acquisition by resolution of General Meeting of Shareholders
Not applicable.
(2) Acquisition by resolution of Board of Directors meeting
Not applicable.
(3) Acquisition not based on resolution of General Meeting of Shareholders or Board of Directors meeting
Category

Number of shares (Shares)

Treasury shares acquired during the fiscal year

3,455

10,589,511

480

1,394,728

Treasury shares acquired during the period
Notes:

Total amount (Yen)

1. This is due to the purchase of shares less than one unit.
2. “Treasury shares acquired during the period” do not include shares acquired due to purchase of shares lessthan one unit in the period from March 1, 2023 to the filing date of this annual securities report.

(4) Disposal of acquired treasury shares and number of treasury shares held
Fiscal year ended December 31,
2022
Category

Number ofshares(Shares)

Total amount ofdisposal(Yen)

From January 1, 2023
until the filing date of this Annual
Securities Report
Number of
Total amount ofsharesdisposal(Shares)(Yen)

Acquired treasury shares for which
subscribers were solicited

−

−

−

−

Acquired treasury shares that were canceled

−

−

−

−

Acquired treasury shares that weretransferred for merger, share exchange, shareissuance and company split

−

−

−

−

154,075

192,688,052

21,10026,435,629

2,521,197−

2,500,577−

Other
Number of treasury shares held
Notes:

1. “Other” for the fiscal year ended December 31, 2022 consisted of exercise of share acquisition rights (numberof shares: 93,700 shares, total amount of disposal: ¥117,186,475), disposal of treasury shares as restricted
stock compensation (number of shares: 60,113 shares, total amount of disposal: ¥75,173,598), and sale ofshares less than one unit (number of shares: 262 shares, total amount of disposal: ¥327,979).
2. “Other” for the period from January 1, 2023 until the filing date of this Annual Securities Report does notinclude shares transferred due to sale of shares less than one unit in the period from March 1, 2023 to thefiling date of this annual securities report.
3. “Number of treasury shares held” for the period from January 1, 2023 until the filing date of this Annual
Securities Report does not include shares acquired due to purchase of shares less than one unit or sharestransferred due to sale of shares less than one unit in the period from March 1, 2023 to the filing date of thisannual securities report.

- 53 -

3

Dividend Policy

The Company regards the return of profits to its shareholders as one of its key management priorities.
The basis of the Company’s policy regarding the distribution of profits is to pay dividends stably in light of acomprehensive consideration of factors including consolidated results and dividend payout ratio for each fiscal year,
while also increasing its retained earnings for future business development and other purposes. We plan to improve ourcapital efficiency with regards to the purchase of treasury shares by taking a flexible approach while considering theshare price in the market and other factors. The Company considers it a top priority to use internal reserve funds forinvestments for future growth (R&D investments, strategic investments and capital expenditures) in order to achievesustainable growth from fiscal 2025 and maximize corporate value.
As the dividend policy, the Company set its target dividend payout ratio based on core EPS at 40% in the FY2021-2025
Medium Term Business Plan. The Company aims to ensure a stable and sustained increase in the level of dividend
payment (continuous increase of dividend payments) in line with medium- to long-term growth in profits.
The Company’s Articles of Incorporation stipulates that the Company may, by resolution of the Board of Directors,
distribute interim dividends as prescribed in Article 454, Paragraph 5 of the Companies Act with a record date of June
30 each year as the record date. The Company’s policy is to pay a dividend twice a fiscal year: an interim dividend anda year-end dividend. The payment of interim dividends and year-end dividends is to be resolved by the Board of
Directors meeting and the General Meeting of Shareholders, respectively.
In accordance with the above-mentioned policy, the Company plans to pay a year-end dividend of ¥27 per share for the
fiscal year ended December 31, 2022, which will result in an annual dividend of ¥51 per share, combined with theinterim dividend of ¥24 per share.
Dividends of surplus whose record date falls within the fiscal year ended December 31, 2022 (100th fiscal year) are as
follows:
Date of resolution

Total dividends(Millions of yen)

Dividend per share(Yen)

12,89924.00

14,51227.00

August 4, 2022
Resolution at the Board of
Directors meeting
March 24, 2023 (scheduled)
Resolution at the Ordinary General
Meeting of Shareholders (Note)
Note:

This is a year-end dividend with a record date of December 31, 2022, and has been proposed as an agenda(a matter to be resolved) for the Ordinary General Meeting of Shareholders to be held on March 24, 2023.

- 54 -

4

Corporate Governance(1) Overview of corporate governance(i) Basic views on corporate governance
Based on our vision and the Medium Term Business Plan in accordance with our philosophy that “The Kyowa Kirin
Group strives to contribute to the health and well-being of people around the world by creating new value throughthe pursuit of advances in life sciences and technologies” and core values, in order to achieve sustainable growthand increase corporate value over the medium- to long-term, we, as a company responsible for delivering social
infrastructure, work on the enhancement of our corporate governance by ensuring transparency and fairness indecision-making, and establishing structures for timely and decisive decision-making and execution ofmanagement duties, and for appropriate monitoring and supervisory functions. We believe that cooperation withstakeholders is essential for achieving our medium term business plan, and respect the situation of eachstakeholder; and we are committed to making timely disclosures to shareholders and investors on a transparent,
fair and continuous manner, proactively having constructive dialogue with shareholders and investors, andensuring accountability in a cordial manner.
We are a consolidated subsidiary of Kirin Holdings Company, Limited, and while respecting the Kirin Group’s
management policies, we secure independence for our corporate management.
(ii) Overview of corporate governance system and reasons for adoption of the system
The Company has adopted a Company with Audit & Supervisory Board system as its organization form under theCompanies Act. The Board of Directors makes final decisions on execution of important operations, and appoints
multiple Outside Directors to enhance the transparency and objectivity of management and to fulfill its supervisory
function over execution of operations. In addition, the Company endeavors to reinforce its supervisory function
over management by establishing the voluntary Nomination & Remuneration Consultative Committee tosupplement the functions of the Board of Directors. Furthermore, Audit & Supervisory Board Members, including
multiple Outside Audit & Supervisory Board Members independent of the Board of Directors, and the Audit &Supervisory Board monitor and verify the process for making final decisions and the contents of those decisions.
In this organizational form, Directors concurrently serve as Executive Officers, thereby promoting a management
function that operates through close coordination between decision-making and execution, and the Company has
established a hybrid governance system with a balance between business execution and supervisory functions bymaking the monitoring function work by centering it around independent Outside Directors and Audit &Supervisory Board Members/the Audit & Supervisory Board and by establishing a voluntary committee.
The Company’s corporate governance system as of March 9, 2023 is shown in the figure below.

General Meeting of Shareholders
Audit & Supervisory
Board
Audit & Supervisory
Board Members
Cooperation

Audit

Board of Directors

Nomination & Remuneration
Consultative Committee

Cooperation

PresidentInternal Audit
Department
Executive Committee

Group CSR Committee
Global Quality AssuranceCommittee
Group Information Disclosure
Committee
Group Financial Management
Committee

Cooperation

Independent
Accounting
Auditors*

Internal auditing
Accounting audit

Business Execution
Organization*(One Kyowa Kirin)

As for governance of the executing organization, a matrix management system (One Kyowa Kirin) thatcombines four regional axes and a functional axis has been established.

- 55 -

Constituent members of the Company’s corporate governance system as of March 9, 2023 are shown in the tablebelow.
Nomination & Remuneration
Name
Title
Consultative Committee
Director of the
Board

Representative Director,
Masashi Miyamoto

Yutaka Osawa

Toshifumi Mikayama
Takeshi Minakata

President and Chief Executive
Officer
Representative Director,
Executive Vice President
Director of the Board,
Executive Vice President
Director of the Board

Committee member

Committee member

Committee member–

Outside Director of the Board,

Audit &
Supervisory
Board Member

Akira Morita

Chairman of the Board of
Directors

Committee member

Yuko Haga

Outside Director of the Board

Committee member

Jun Arai

Outside Director of the Board

Chairperson

Takashi Oyamada

Outside Director of the Board

Committee member

Yoshihisa Suzuki

Outside Director of the Board

Committee member

Hiroshi Komatsu

Full-time Audit & Supervisory
Board Member–

Outside Audit & Supervisory
Masaki Ueno

Keiji Kuwata

Tomomi Yatsu

Mayumi Tamura

Board Member (Full-time),
Chairman of the Audit &Supervisory Board
Audit & Supervisory Board
MemberOutside Audit & Supervisory
Board Member
Outside Audit & Supervisory
Board Member––

Committee member

Committee member(Directors and Board of Directors)
Taking into account its fiduciary duties and accountability to shareholders, the Board of Directors aims at realizing
our management philosophy, and achieving sustainable growth of the Group and increased corporate value overthe medium- to long-term, by establishing effective and efficient corporate governance. In addition, the Board of
Directors makes decisions on the Group’s execution of important operations, including the long-term management
visions, and medium-term and annual business plans of the entire Group and key Group companies, as well as
statutory matters. The Board of Directors is also mainly responsible for supervising the execution of duties byDirectors, and establishing an adequate internal control system for the entire Group. Matters to be resolved by the
Board of Directors are specified in the “Regulations of the Board of Directors” in addition to matters stipulated inlaws and regulations as well as the Articles of Incorporation; and authorities pertaining to other business execution
are delegated to Executive Officers in charge of relevant businesses.
With respect to the Board composition, the maximum number of Directors is 10, in accordance with the Articles ofIncorporation. Upon considering knowledge, experience, skills, and insights appropriate for a global specialty- 56 -

pharmaceutical company and ensuring diversity, we established a transparent governance system, which is wellbalanced as a whole. In order to ensure the effectiveness of objective oversight of the management, the Company
appoints a majority of the Board members as independent Outside Directors, and the position of Board Chair isassumed by Mr. Akira Morita, who is an independent Outside Director. From the perspective of protecting minority
shareholders, the Company appoints Outside Directors and Outside Audit & Supervisory Board Members who
have no concern about conflicts of interest with general shareholders. The Company has established theNomination and Remuneration Consultative Committee, which consists of a majority of independent outside
officers and is chaired by an independent Outside Director, and conducts an evaluation on the Board effectivenessby utilizing an external advisor. The policy and procedures to select Director candidates are deliberated by the
Nomination and Remuneration Consultative Committee, and decided by the Board of Directors.
As of March 9, 2023, the Board of Directors consists of nine Directors (including five independent Outside
Directors; eight males and one female) (Note). They make decisions on such important matters as business
policies, and supervise business execution at the Board of Directors meetings, which are held once a month inprinciple and chaired by an independent Outside Director. In the fiscal year under review, the Board of Directors
met 13 times, and made decisions on such important matters as business policies of the Company, andsupervised business execution by Directors.
Note: The Company proposes “Election of nine (9) Directors of Board” as an agenda (a matter to be resolved) to
the Ordinary General Meeting of Shareholders to be held on March 24, 2023. If the proposal is approved
and adopted, the Company will have nine Directors (including five independent Outside Directors; male:seven, female: two).
(Audit & Supervisory Board Members and Audit & Supervisory Board)
The Audit & Supervisory Board and its members audit the execution of Directors’ duties from the standpoint of an
independent body mandated by shareholders, and thereby audit and verify the status of ensuring soundmanagement toward achieving sustainable growth of the Group and increasing its corporate value over the
medium- to long-term. The Audit & Supervisory Board Members actively express their opinions at the Board of
Directors meetings by making use of full-time Members’ ability to gather information within the Group as well as
their independence, and also strive to improve the framework to ensure the effectiveness of auditing by each
Member. Furthermore, in order to better provide information to Outside Directors, they exchange opinions with
Outside Directors, and provide information which they obtained from their auditing activities.
The composition of the Audit & Supervisory Board shall include persons with appropriate knowledge of financeand accounting, and have three or more members, and at least half of them shall be Outside Audit & Supervisory
Board Members, in accordance with the Articles of Incorporation.
As of March 9, 2023, the Audit & Supervisory Board consists of five members (including three outside members;
three males and two female) (Note).
Mr. Hiroshi Komatsu (full-time Audit & Supervisory Board Member) and Ms. Mayumi Tamura (Outside Audit &Supervisory Board Member) have experience in accounting and finance divisions of business corporations, Mr.
Masaki Ueno (full-time Outside Audit & Supervisory Board Member) has experience in financial institutions, and
Ms. Tomomi Yatsu (Outside Audit & Supervisory Board Member) is a certified public accountant. Thus, each ofthem has considerable knowledge of accounting and finance. In the fiscal year under review, the Audit &Supervisory Board met 13 times, and made discussion and determination of the audit policies, and audited
business execution by the Board of Directors.
Note: The Company proposes “Election of one (1) Audit & Supervisory Board Member” as an agenda (a matterto be resolved) to the Ordinary General Meeting of Shareholders to be held on March 24, 2023. If the
proposal is approved and adopted, the Company will have five Audit & Supervisory Board Members(including three Outside Audit & Supervisory Board Members; male: three, female: two).
(Nomination & Remuneration Consultative Committee)
The Nomination & Remuneration Consultative Committee assumes responsibility for deliberating and making
decisions on the following matters from an objective and impartial viewpoint, and reports the results to the Boardof Directors: policies for appointing/removing Directors, Executive Officers, and Audit & Supervisory Board
Members of the Company as well as proposals on candidates for such positions; appointment and removal of
Executive directors; duties of each Director; policy for selecting a successor to CEO; proposals on candidates for
Presidents and key management positions of key Group companies; remuneration system/level, amounts, etc. for
Directors, Executive Officers, and Audit & Supervisory Board Members of the Company as well as Presidents andkey management positions of key Group companies.
The Nomination & Remuneration Consultative Committee shall consist of internal Directors and independent
outside officers, the majority of which shall be independent outside officers. This committee is chaired by anindependent Outside Director. In the fiscal year under review, the Nomination & Remuneration Consultative
Committee met 16 times and reported to the Board of Directors on remuneration and nomination of Directors andAudit & Supervisory Board Members.
Other components of the corporate governance system are described below.
(Global Executive Committee / Executive Committee)
The Company established the Global Executive Committee and the Executive Committee, as the bodies to help
President & Director make decisions on significant matters pertaining to management policies and business- 57 -

execution. In order to make adequate and efficient management decisions on overall important mattersconcerning global and domestic management from a strategic perspective, the Global Executive Committee met
14 times and the Executive Committee met 24 times in the fiscal year under review.
(Executing organization)
Under its global management system dubbed “One Kyowa Kirin,” the Company executes business enlisting amatrix management structure consisting of a regional axis, a functional axis, and a product axis. The Company
has accordingly adopted its One Kyowa Kirin Leadership team to flexibly operate the matrix management
structure.
(Accounting audit and legal compliance)
The Company’s financial statements are prepared in conformity with generally accepted accounting principles andpractices prevailing in Japan. Audits are conducted by accounting auditors to ensure appropriate presentation, etc.
The Company gives the highest priority to legal compliance with regard to problems that arise in the course ofoperational execution, and when necessary, it receives advice appropriately from third parties, such as attorneys.
(Compliance and risk management system)
In accordance with the “Kyowa Kirin Group Compliance Policy” and the “Kyowa Kirin Group Risk Management
Policy,” and the three-line model advocated by the Institute of Internal Auditors (IIA), we promote compliance ingood faith and secure a system to make appropriate responses to risks. Moreover, to address the variety of risks
that may affect management, a number of in-house committees have been established to strengthen risk
management and enhance corporate governance. These committees regularly report on their activities to theBoard of Directors. An overview of each committee is provided below.
･ Group CSR Committee
The Group CSR Committee deliberates such important matters as group-wide strategy and action policy
related to CSR, covering risk management (including compliance and information security), environmental
conservation and corporate value creation. In addition, the Group CSR Committee and the Regional CSR
Committees in each region, including Japan, report on the status of risk management and compliance.
･ Group Information Disclosure Committee
The Group Information Disclosure Committee discusses and makes decisions on fundamental
communications policies and key information-disclosure issues in a comprehensive manner.
･ Global Quality Assurance Committee
The Group Quality Assurance Committee discusses and makes decisions concerning quality assurance
policies.
･ Group Financial Management Committee
The Group Financial Management Committee discusses important matters including basic policies andplans related to management of capital and financial market risks.
(Internal auditing)
The Company has established the Internal Audit Department as the third line for internal control. The department
assesses the performance of various management activities related to governance, risk management and control
processes within the Group in terms of their legality and rationality, from the fair and independent standpoint, andprovides advice and recommendations. Audit results are reported to Representative Director, Executive Vice
President when they become available, and also to Representative Director & President, the Board of Directors,
and the Audit & Supervisory Board on a regular basis. To maintain and improve the quality of auditing activities, inaddition to efforts of the Internal Audit Department for assessing and improving the quality, it continuously
conducts such improvement activities as employing external assessments. Furthermore, the Internal Audit
Department also assesses the status of developing/implementing internal control to ensure the reliability offinancial reports in accordance with the Financial Instruments and Exchange Act.
(iii) Other matters regarding corporate governance(Status of development of internal control system)
The Company has resolved at the Board of Directors meeting to adopt a policy for developing systems to ensure
the appropriate operation (the internal control system) as follows, and is moving forward with the development ofsystems based on details of the resolution.

- 58 -

※ <Basic Policy on the Internal Control System>
The Company has stipulated the following set of systems, based on the fundamental principles of the internal
control system of its parent company, Kirin Holdings Company, Limited and in line with the Companies Act, Article
362, Paragraph 4, item vi: “The development of systems necessary to ensure that the execution of duties bydirectors complies with laws and regulations and the articles of incorporation, and other systems prescribed by theapplicable Ordinance of the Ministry of Justice as systems necessary to ensure the properness of operations of a
Stock Company.”
1. System to ensure compliance of execution of duties by the Directors and employees of the Company and its
subsidiaries (the “Group”) with laws and regulations and the Articles of Incorporation (“Compliance System”)
In order to promote compliance within the Group, the Company shall;･ Establish a basic policy on compliance for the Group and maintain an organization and regulations tomaterialize the policy.
･ Establish an organization to supervise compliance, which undertakes developing awareness of complianceamong the Group’s officers and employees through educational programs and awareness-raising activities,
and also clarify procedures in case of compliance violations and make the procedures well-known to any of
the Group.
･ Ensure that a department dedicated to internal audit shall conduct audits into the design and operation of
the compliance system.
･ Establish an internal control reporting system to ensure reliability of the financial reports, and conduct andevaluate its effective and efficient operation.
2. System to ensure the proper preservation and maintenance of information regarding the execution of duties
by the Directors of the Company (“System of Information Preservation and Maintenance”)
Regarding information relating to the execution of duties by the Company’s Directors, the Company shall
implement appropriate preservation and maintenance based on internal regulations and make them available
for inspection by the Directors and Audit & Supervisory Board Members of the Company.
3. Regulations and other systems related to the risk management of the Group in the event of loss and othercircumstances (“risk management system”)
In order to appropriately manage risks within the Group, the Company shall;･ Establish a basic policy on risk management of the Group, and maintain an organization and regulations tomaterialize the policy.
･ Establish an organization to supervise risk management, which ensures the effectiveness of risk
management through risk management activities all at each of the Group. Also, clarify procedures in caseof disclosure of risk factors and responses to the occurrence of a crisis situation, and make the procedures
well-known to any of the Group.
･ Ensure that the department dedicated to internal audit shall conduct audits into the design and operation of
the risk management system.
4. System to ensure the effective and efficient execution of duties by the Directors of the Group (“Effective andEfficient Performance System”)
In order to ensure the effective and efficient execution of duties by the Directors of the Group, the Company
shall;･ Establish organizational regulations and standards on allocation of duties, administrative authorities,
decision making and other matters.
･ Appoint Executive Officers in charge of the execution of operations by a resolution of the Board of Directors.
Also, as necessary, dispatch Director(s) to each Group company to oversee appropriate execution ofoperations and decision making.
･ Establish the Executive Committee and accelerate decision making.
･ Ensure, regarding authority and responsibility in the execution of duties by the Directors of the Groupsubsidiaries, that each Group subsidiary stipulates own regulations on allocation of duties, administrative
authorities and other matters and executes efficient operations.
･ Periodically manage the Group’s business performance in comparison to annual plans made by each Group
company through performance monitoring tools.
5. System for reporting to the Company on matters concerning the execution of duties by the Directors of theGroup and system to ensure the properness of operations of other duties by the corporate group comprising
the Group and the parent company (“System for reporting for execution of operations and other Group
internal control system”)
In order to ensure system for reporting to the Company on matters concerning the execution of duties by the
Directors of the Group and system to ensure appropriate operations of other duties by the corporate group
comprising the Group and the parent company, Kirin Holdings Company, Limited, based on the basic groupmanagement policies of the parent company, the Company shall;･ Establish a relevant department in charge of each Group subsidiary, which receives regular reports
concerning the business conditions of such subsidiary, and which provides with guidance and advice suchas prior consultations for important matters as necessary, while continuing to respect the autonomy of thesubsidiaries.
･ Determine responsibilities and authority relating to the execution of operations of the Group subsidiaries
and make the department dedicated to internal audit conduct audits on operations of each Groupsubsidiary.
- 59 -

6.

Matters related to employees that assist the duties of the Audit & Supervisory Board Members of theCompany upon their request for assistance, matters related to the independence of the relevant employees
from the Directors of the Company and matters on securing the effectiveness of directions given to such
employees by the Audit & Supervisory Board Members of the Company (collectively “Systems related to Audit& Supervisory Board Members”)
The Company shall assign a small number of employees, as necessary, to assist duties of the Audit &Supervisory Board Members of the Company upon their request for assistance. In order to ensure
independence of the relevant employees from the Directors of the Company, the consent of the Audit &Supervisory Board Members of the Company shall be required for any decision related to personnel affairs suchas appointments, transfers and evaluation of such employees. Such employees shall not concurrently assume
any other position related to the business execution and shall only follow instructions of the Audit & Supervisory
Board Members of the Company while they are responsible for assisting duties of the Audit & Supervisory
Board Members of the Company.
7. System to ensure reporting to the Audit & Supervisory Board Members of the Company by the Directors,
Audit & Supervisory Board Members and employees of the Group(i) The Directors of the Company shall report to the Audit & Supervisory Board Members of the Company;･ Among matters submitted to the Board of Directors meetings for resolution, the ones which areconsidered useful for prior reporting to the Audit & Supervisory Board Members of the Company in termsof contents and their audits.
･ Any matter that may cause material damage to any of the Group when such a matter is discovered.
･ Any occasion in which a Director or an employee of the Group has committed an act in violation of laws
and regulations or the Articles of Incorporation or in which there is a risk that such acts may occur.
･ Legal matters requiring the consent of the Audit & Supervisory Board Members of the Company.
･ Status of development and operation of the internal control system of the Company.
Not limited to the matters listed above, the Audit & Supervisory Board Members of the Company may well
request the Directors, Audit & Supervisory Board Members and employees of each Group company to reportother matters at any time as necessary.
(ii) The Directors, Audit & Supervisory Board Members and employees of each Group company (including
those who receive reports from those Directors, Audit & Supervisory Board Members and employees) may
directly report to the Audit & Supervisory Board Members of the Company when matters arise that areconsidered reasonable to do so, in order to ensure appropriate execution of operations of each Group
company. The Audit & Supervisory Board Members of the Company shall regularly receive reports about
the operation of the whistleblowing system from relevant departments in charge, and also may well makethe status of the operation reported immediately if it is found necessary by themselves.
8. System to ensure that anyone who has made a report as described in the preceding provision to the Audit &Supervisory Board Members of the Company, shall not be subjected to any unfair treatment due to the report
made
The Company shall set forth common group regulations to ensure that anyone who makes a report as
described in the preceding provision shall not be subjected to any unfair treatment for that reason, and shallmake the common regulations well-known and in operation to any of the Group.
9. Matters regarding procedures for advance payment or reimbursement of expenses incurred in connection
with the execution of duties of the Audit & Supervisory Board Members of the Company
The Company shall promptly process the relevant expenses or liabilities relating to advance payment or
reimbursement of expenses incurred in connection with the execution of duties of the Audit & Supervisory Board
Members of the Company.
10. Other systems to ensure the effectiveness of audit by the Audit & Supervisory Board Members of theCompany
The Audit & Supervisory Board Members of the Company shall hold a regular meeting with the Representative
Director and other Directors of the Company for the exchange of opinions. The Audit & Supervisory Board
Members of the Company shall be able to implement audits in cooperation with the department dedicated tointernal audit. Also, the Company shall establish systems to ensure effective audits by the Audit & Supervisory
Board Members of the Company, for instance, by providing them with opportunities to attend the meetings ofthe Group upon their request.
(Status of development of risk management system)
As described in “3. Regulations and other systems related to the risk management of the Group in the event ofloss and other circumstances (“risk management system”)” in <Basic Policy on the Internal Control System>
above.
(Status of development of system to ensure the properness of operations by subsidiaries of the reporting company)
As described in “5. System for reporting to the Company on matters concerning the execution of duties by the
Directors of the Group and system to ensure the properness of operations of other duties by the corporate group
comprising the Group and the parent company (“System for reporting for execution of operations and other Group
internal control system”)” in <Basic Policy on the Internal Control System> above.

- 60 -

(Summary of limited liability agreement)
Pursuant to the provisions of Article 427, Paragraph 1 of the Companies Act, the Company has entered into
agreements with non-executive directors, full-time Audit & Supervisory Board Members and Audit & Supervisory
Board Members to limit their liability for damages stipulated in Article 423, Paragraph 1 of the same Act. The
maximum amount of liability for damages under such agreements shall be the higher of either ¥5 million, or theminimum liability amount stipulated in Article 425, Paragraph 1 of the same Act.
(Summary of directors and officers liability insurance policy)
The Company has entered into directors and officers liability insurance contracts with an insurance company asprovided in Article 430-3, Paragraph 1 of the Companies Act, wherein the insured persons include Directors, Audit& Supervisory Board Members, Executive Officers, etc. of the Company and its subsidiaries. The Company and its
subsidiaries bear all insurance premiums. This insurance contract covers compensation for damages, legal, andother such costs in the event that an insured person(s) is liable for damages arising from their conduct. However,the contract has exceptions such as excluding damages caused by criminal or fraudulent acts etc. committed byinsured persons. In addition, there is a provision for a deductible amount, and damages that do not reach that
deductible amount are not covered by this insurance contract.
(Number of Directors)
The Company’s Articles of Incorporation stipulates that the Company shall have not more than ten (10) Directors.
(Requirements for a resolution to elect Directors)
The Company’s Articles of Incorporation stipulates that a resolution for election of Directors shall be adopted by
the presence of holders of one third or more of the voting rights held by all shareholders entitled to exercise theirvoting rights and a majority of the voting rights of the shareholders present, and cumulative voting shall not beused.
(Matters normally requiring adoption of a resolution by the General Meeting of Shareholders, which may be resolved
at the Board of Directors meeting)
The Company stipulates in its Articles of Incorporation that the following matters may be resolved at the Board of
Directors meeting, not being resolved at the General Meeting of Shareholders.
A. The Company may, by resolution of the Board of Directors, acquire its own shares, pursuant to Article 165,
Paragraph 2 of the Companies Act(To be enable to respond flexibly)
B. The Company may, by resolution of the Board of Directors, distribute interim dividends for which the record
date is June 30 of each year
(To provide stable returns of profits to shareholders)(Requirements for a special resolution of the General Meeting of Shareholders)
The Company’s Articles of Incorporation stipulates that a special resolution at a General Meeting of Shareholders
provided in Article 309, Paragraph 2 of the Companies Act shall be adopted by the presence of holders of one
third or more of the voting rights held by all shareholders entitled to exercise their voting rights and two thirds ormore of the voting rights of the shareholders present, with an aim to ensure the smooth operation of a General
Meeting of Shareholders.

- 61 -

(2) Directors and Audit & Supervisory Board Members(i) List of Directors and Audit & Supervisory Board Members
1. The status of Directors and Audit & Supervisory Board Members of the Company as of March 9, 2023 (filingdate of this annual securities report) is as follows.
Male: 11, Female: 3 (Percentage of female officers: 21.4%)
Title and position

Name

Date of birth

Career summary
Apr.
Apr.

Mar.
Representative
Director,
President andChief Executive
OfficerJul.
MasashiMiyamoto

Jul. 16, 1959
Apr.
Mar.
Apr.
Mar.
Apr.
Apr.
Oct.
Apr.

Representative
Director,
Executive Vice
President

YutakaOsawa

Mar.
Oct. 17, 1959
Apr.
Mar.
Mar.
Mar.
Apr.
Mar.
Jul.

Director of theBoard,
Executive Vice
President

Oct.
Toshifumi
Mikayama

Jul. 18, 1957

Apr.
Mar.
Mar.
Mar.
Mar.

Number ofTerm of shares held
office (Thousandsof shares)

1985: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2011: Director, Regulatory Affairs Department ofPharmacovigilance and Quality Assurance Division,
Kyowa Hakko Kirin Co., Ltd. (presently Kyowa Kirin Co.,Ltd.)
2012: Executive Officer, Director, Regulatory Affairs
Department of Pharmacovigilance and Quality Assurance
Division, Kyowa Hakko Kirin Co., Ltd.
2014: Executive Officer, Director, Strategic Product Portfolio
Department and Regulatory Affairs Department ofPharmacovigilance and Quality Assurance Division,(Note 4)
Kyowa Hakko Kirin Co., Ltd.
2015: Executive Officer, Director, Strategic Product Portfolio
Department, Kyowa Hakko Kirin Co., Ltd.
2017: Director of the Board, Managing Executive Officer,
Director, Strategic Product Portfolio Department, Kyowa
Hakko Kirin Co., Ltd.
2017: Director of the Board, Managing Executive Officer,
Director, Corporate Strategy & Planning Department,
Kyowa Hakko Kirin Co., Ltd.
2018: Representative Director, President and Chief Executive
Officer, Kyowa Hakko Kirin Co., Ltd. (present)
1984: Joined Kyowa Hakko Kogyo Co., Ltd.
2007: Director, Pharmaceutical Production Development
Department, Kyowa Hakko Kogyo Co., Ltd.
2008: Director, CMC Development Department, Development
Division, Kyowa Hakko Kirin Co., Ltd. (presently Kyowa
Kirin Co., Ltd.)
2009: Director, Production Planning Department, Production
Division, Kyowa Hakko Kirin Co., Ltd.
2013: Executive Officer, Director, Production Planning
Department, Production Division, Kyowa Hakko Kirin Co.,
(Note 4)
Ltd.
2014: Executive Officer, Vice President Head, Production
Division, Kyowa Hakko Kirin Co., Ltd.
2017: Managing Executive Officer, Vice President Head,
Production Division, Kyowa Hakko Kirin Co., Ltd.
2018: Director of the Board, Managing Executive Officer, Vice
President Head, Production Division, Kyowa Hakko Kirin
Co., Ltd.
2019: Representative Director, Executive Vice President,
Kyowa Hakko Kirin Co., Ltd. (present)
1983: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2004: General Manager, Planning Division of Pharmaceutical
Division, Kirin Brewery Company, Limited
2007: Director, Executive Officer, Head, Research Division,
Kirin Pharma Company, Limited
2008: Executive Officer, Head, Research Division, Kyowa
Hakko Kirin Co., Ltd. (presently Kyowa Kirin Co., Ltd.)
2010: Executive Officer, Director, Corporate Strategy &(Note 4)
Planning Department, Kyowa Hakko Kirin Co., Ltd.
2012: Managing Executive Officer, Director, Overseas Business
Department, Kyowa Hakko Kirin Co., Ltd.
2014: Director of the Board, Managing Executive Officer,
Kyowa Hakko Kirin Co., Ltd.
2018: Director of the Board, Senior Managing Executive Officer,
Kyowa Hakko Kirin Co., Ltd.
2021: Director of the Board, Executive Vice President, Kyowa
Kirin Co., Ltd. (present)- 62 -

86.2

60.9

49.0

Title and position

Name

Date of birth

Career summary
Apr.
Mar.
Mar.
Oct.
Mar.
Jan.

Director of the
Board

TakeshiMinakata

Dec. 31, 1961

Mar.

Apr.
Mar.
Mar.
Jan.
Mar.

Oct.
Apr.
Apr.
Jul.
Apr.
Apr.
Jun.
May
Apr.
Director of the
Board

Akira Morita

Apr. 22, 1951

Aug.
Apr.

Apr.
Mar.
Apr.
Jul.
May

Number ofTerm of shares held
office (Thousandsof shares)

1984: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2007: Deputy General Manager, Toride Plant, Kirin Brewery
Company, Limited
2009: Deputy General Manager, Production Control
Department of Production Division, Kirin Brewery
Company, Limited
2010: Kirin Liaison Technical Director, Lion Nathan National
Foods Pty Ltd (presently Lion Pty Ltd)
2012: General Manager, Corporate Planning Dept., Kirin
Brewery Company, Limited
2013: Executive Officer, General Manager, Corporate Planning
Department, Kirin Company, Limited (presently Kirin
Holdings Company, Limited)
Executive Officer, General Manager, Planning Dept.,
Kirin Brewery Company, Limited
2015: Senior Executive Officer, Director, Corporate Strategy,(Note 4)
Kirin Holdings Company, Limited
Senior Executive Officer, General Manager, Corporate
Planning Department, Kirin Company, Limited
2016: Director and President of Myanmar Brewery Limited
Senior Executive Officer, Kirin Holdings Company,
Limited2018: President and CEO, KYOWA HAKKO BIO CO., LTD.
2020: President and CEO, KYOWA HAKKO BIO CO., LTD.
Senior Executive Officer, Kirin Holdings Company,
Limited2022: Senior Executive Officer, in charge of Health Business
Strategy, Kirin Holdings Company, Limited (present)
2022: Director of the Board, Senior Executive Officer, in chargeof Health Business Strategy, Kirin Holdings Company,
Limited (present)
Director of the Board, Kyowa Kirin Co., Ltd. (present)
1993: Professor, Faculty of Law and Economics, Chiba
University
1994: Professor, The University of Tokyo Graduate Schools for
Law and Politics
2004: Dean, Professor, Graduate School of Public Policy, The
University of Tokyo
2008: Director, Policy Alternatives Research Institute, The
University of Tokyo
2011: Chairman, Central Social Insurance Medical Council,
Ministry of Health, Labour and Welfare
2012: Professor, Department of Political Studies, Faculty ofLaw, Gakushuin University
2012: Emeritus Professor, The University of Tokyo (present)
2013: Chair of the Board, Japan Usability Medical Information
Promote Conference
2014: Director-General, National Institute of Population andSocial Security Research
2014: Adjunct Professor, National Graduate Institute for Policy(Note 4)
Studies
2017: Professor, Department of Policy Studies, Tsuda
University
Visiting Professor, Mie University Graduate School of
Medicine
Outside Member, Administrative Council, The Universityof Tokyo (present)
2018: Director-General, Research Institute of Science andTechnology for Society, Japan Science & Technology
Agency2019: Outside Director of the Board, Kyowa Hakko Kirin Co.,
Ltd. (presently Kyowa Kirin Co., Ltd.) (present)
2019: Visiting Professor, Kanagawa University of Human
Services (present)
2020: Representative Director, Next Generation Fundamental
Policy Research Institute (present)
2022: Data Health Operations Advisor, Health Insurance
Claims Review & Reimbursement Services (present)- 63 -–

2.6

Title and position

Name

Date of birth

Career summary
Apr.
Apr.
Jun.
Feb.

Director of the
Board

Yuko Haga

Dec. 8, 1955

Apr.
Apr.
Mar.
Apr.
Jun.
Apr.
Sep.
Apr.
Mar.
Mar.
Mar.
Aug.

Director of the
Board

Jun AraiFeb. 28, 1959

Nov.
Mar.
Mar.
Apr.
Mar.
Apr.
May
Mar.
Apr.
Jan.
Jun.

May
May
Jun.
Director of the
Board

TakashiOyamadaJun.
Nov. 2, 1955
Apr.

Jun.
Jun.
Dec.
Jun.
Mar.

Number ofTerm of shares held
office (Thousandsof shares)

1989: Senior Consultant, Tokyo Office, Price Waterhouse
Consultants
1991: Representative, Haga Management Consulting Office(present)
2000: Director, Linkworld Co., Ltd.
2010: Director, Social Welfare Corporation Fujikenikukai(present)
2010: Visiting Professor, Department of Policy Management,(Note 4)
Faculty of Policy Management, Shobi University
2017: Associate Professor, Graduate School of Management,
NUCB Business School
2019: Outside Director of the Board, Kyowa Hakko Kirin Co.,
Ltd. (presently Kyowa Kirin Co., Ltd.) (present)
2020: Professor, Graduate School of Management, NUCB
Business School (present)
2020: Outside Director, MinebeaMitsumi Inc. (present)
1983: Joined Shell Sekiyu K.K.
2002: General Manager, Management Information, Showa
Shell Sekiyu K.K.
2004: General Manager, Accounting, Showa Shell Sekiyu K.K.
2005: Executive Officer, General Manager, Accounting, Showa
Shell Sekiyu K.K.
2006: Director, responsible for Accounting, Showa Shell Sekiyu
K.K.
2007: Managing Director, responsible for Corporate Planning,
Finance, Financial Information Assurance, Corporate
Governance, Showa Shell Sekiyu K.K.
2008: Representative Director, Acting President, Showa Shell
Sekiyu K.K.
2008: Representative Director, President, Showa Shell Sekiyu(Note 4)
K.K.
2013: Representative Director, Group Chief Operating Officer,
Showa Shell Sekiyu K.K.
2014: Representative Director, President, Showa Yokkaichi
Sekiyu Co., Ltd.
2016: Outside Director, Daiwa SB Investments Ltd.
2017: Outside Audit & Supervisory Board Member, Kyowa
Hakko Kirin Co., Ltd. (presently Kyowa Kirin Co., Ltd.)
2019: Outside Director, Sumitomo Mitsui DS AssetManagement Company, Limited (present)
2020: Outside Corporate Auditor, Ryohin Keikaku Co., Ltd.
(present)
2021: Outside Director of the Board, Kyowa Kirin Co., Ltd.
(present)
1979: Joined The Mitsubishi Bank, Limited (presently MUFG
Bank, Ltd.)
2006: Executive Officer, The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (presently MUFG Bank, Ltd.)
2009: Managing Director, The Bank of Tokyo-Mitsubishi UFJ,
Ltd.
Member of the Board of Directors, Mitsubishi UFJ
Financial Group, Inc.
2012: Managing Executive Officer, The Bank of TokyoMitsubishi UFJ, Ltd.
2013: Senior Managing Executive Officer, The Bank of TokyoMitsubishi UFJ, Ltd.
2014: Representative Director, Deputy President, The Bank ofTokyo-Mitsubishi UFJ, Ltd.
2015: Member of the Board of Directors, Representative
Corporate Executive, Deputy President and Group COO,
(Note 4)
Mitsubishi UFJ Financial Group, Inc.
2016: Representative Director, President & CEO, The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Member of the Board of Directors, Mitsubishi UFJ
Financial Group, Inc.
2017: Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(present)
2018: Director and Vice Chair, The Japan Institute ofInternational Affairs (present)
2018: Outside Director, Mitsubishi Research Institute DCS Co.,
Ltd. (present)
2019: Outside Director, Mitsubishi Electric Corporation (present)
Outside Director, Isetan Mitsukoshi Holdings Ltd.
(present)
2021: Outside Director of the Board, Kyowa Kirin Co., Ltd.
(present)- 64 -

3.4

4.0

1.8

Title and position

Name

Date of birth

Career summary
Apr.
Apr.
Jun.
Apr.

Director of the
Board

Yoshihisa
Suzuki

Apr.
Jun.
Jun.
Jun.
Jun. 21, 1955
Apr.
Apr.
Apr.
Mar.
Apr.
Jun.
Apr.
Feb.
Apr.

Full-time Audit &HiroshiSupervisory
Komatsu
Board Member

Apr.
Oct. 13, 1962
Apr.
Mar.
Apr.
Mar.
Jan.

Full-time Audit &Supervisory
Masaki Ueno
Board Member

May 20, 1961

Apr.
Apr.
Mar.
Apr.
Sep.
Apr.

Audit &
Supervisory
Board Member

Keiji Kuwata

Sep. 21, 1962

Mar.
Mar.
Mar.

Number ofTerm of shares held
office (Thousandsof shares)

1979: Joined ITOCHU Corporation
2003: General Manager, Aerospace, Space and Electronics
Division, ITOCHU Corporation
2003: Executive Officer, ITOCHU Corporation
2006: Managing Executive Officer, ITOCHU Corporation
Executive Vice President and CAO, ITOCHUInternational Inc.
2007: President and CEO, ITOCHU International Inc.
2011: Executive Vice President, JAMCO Corporation
2012: President and CEO, JAMCO Corporation
2016: Senior Managing Executive Officer, Member of theBoard, ITOCHU Corporation(Note 4)
2018: President and Chief Operating Officer (COO), Member ofthe Board, ITOCHU Corporation
2020: President and Chief Operating Officer (COO), Chief
Digital Officer (CDO), and Chief Information Officer(CIO), Member of the Board, ITOCHU Corporation
2021: Vice Chairman, Member of the Board, ITOCHU
Corporation
2022: Outside Director of the Board, Kyowa Kirin Co., Ltd.
(present)
2022: Vice Chairman, ITOCHU Corporation (present)
2022: Outside Director, OMRON Corporation (present)
1986: Joined Kyowa Hakko Kogyo Co., Ltd.
2009: CFO, Hematech, Inc.
2012: Manager, Corporate Planning Department, Kyowa Hakko
Kirin Co., Ltd. (presently Kyowa Kirin Co., Ltd.)
2015: Deputy Director, General Affairs Department, Kyowa
Hakko Kirin Co., Ltd.
(Note 5)
2016: Deputy Director, General Affairs Department, andLeader, Corporate Secretariat Group, General Affairs
Department, Kyowa Hakko Kirin Co., Ltd.
2018: Full-time Audit & Supervisory Board Member, Kyowa
Hakko Kirin Co., Ltd. (present)
1998: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2012: General Manager, Legal Department, Kirin Holdings
Company, Limited
2013: General Manager, Legal Department, Kirin Company,
Limited (presently Kirin Holdings Company, Limited)
Director of Group Legal, Kirin Holdings Company, Limited(Note 6)
2015: Executive Officer, General Manager, Legal Department,
Kirin Company, Limited, and Executive Officer, Director ofGroup Legal, Kirin Holdings Company, Limited
2019: Executive Officer, General Manager, Legal Department,
Kirin Holdings Company, Limited
2020: Outside Audit & Supervisory Board Member (Full-time),
Kyowa Kirin Co., Ltd. (present)
1985: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2010: Director of the Board, General Manager, Eastern-Japan
Regional Division, Kirin Logistics Co., Ltd. (presently Kirin
Group Logistics Company, Limited)
2015: Executive Officer, General Manager, Corporate Planning
Department, Kirin Company, Limited (presently Kirin
Holdings Company, Limited)(Note 7)
2016: Director of Group Corporate Strategy, Kirin Holdings
Company, Limited
2018: Senior Executive Officer, General Manager, Corporate
Planning Department, Kirin Company, Limited
2019: Audit & Supervisory Board Member, Kyowa Hakko Kirin
Co., Ltd. (presently Kyowa Kirin Co., Ltd.) (present)
Company Auditor (Full-time), Kirin Holdings Company,
Limited (present)- 65 -

0.5

4.1

1.5

–

Title and position

Name

Date of birth

Career summary
Apr.
Oct.
Sep.
Oct.
Jun.
Jun.

Audit &
Supervisory
Board Member

Mar.
Tomomi Yatsu

May 30, 1960

Mar.
Apr.
Jun.
Jun.
Mar.
Mar.
Apr.
Apr.
Sep.
Jul.
Dec.
Jun.

Audit &
Supervisory
Board Member

May
Mayumi
TamuraMay 22, 1960
Jun.
Jun.

Jun.
Mar.
Jun.

Notes:

Number ofTerm of shares held
office (Thousandsof shares)

1983: Joined Tokyo Electron Ltd.
1986: Joined Deloitte Touche Tohmatsu LLC
1990: Registered as a certified public accountant
2001: Joined New Tokyo International Law Office
Admitted to Tokyo Bar Association
2009: Outside Auditor, Calbee, Inc.
2010: Outside Audit & Supervisory Board Member, Taiko
Pharmaceutical Co., Ltd.
2012: Outside Audit & Supervisory Board Member, KOKUYO
Co., Ltd.
(Note 8)
2015: Outside Audit & Supervisory Board Member, Yamaha
Motor Co., Ltd.
2015: Partner, TMI Associates
2016: Outside Director, SMBC Nikko Securities Inc. (present)
2017: Outside Audit & Supervisory Board Member, IHI
Corporation
2019: Outside Corporate Auditor, Kuraray Co., Ltd. (present)
2021: Outside Audit & Supervisory Board Member, Kyowa Kirin
Co., Ltd. (present)
2022: Representative, Yatsu Law & Accounting Firm (present)
1983: Joined Sony Corporation (presently Sony Group
Corporation)
1991: Joined JOHNSON COMPANY, LIMITED
2002: Executive Officer, Johnson Diversey Co. Ltd. (presently
CxS Corporation)
2004: CFO, adidas Japan K.K.
2007: Executive Officer, Senior Vice President and CFO, Seiyu
KK (presently Seiyu GK)
2010: Executive Officer, SVP and CFO, Walmart Japan
Holdings GK (presently Walmart Japan Holdings KK)(Note 5)
Executive Officer, SVP and CFO, Seiyu GK
2015: Outside Corporate Auditor, Honda Motor Co., Ltd.
2017: Outside Director, Audit and Supervisory Committee
Member, Honda Motor Co., Ltd.
Outside Director, Hitachi High-Technologies Corporation(presently Hitachi High-Tech Corporation)
2019: Outside Director, SHIMIZU CORPORATION (present)
2022: Outside Audit & Supervisory Board Member, Kyowa Kirin
Co., Ltd. (present)
2022: Outside Director, LIXIL Corporation (present)
Total

–

0.2

214.3

1. Of the members of Directors of the Board, Mr. Akira Morita, Ms. Yuko Haga, Mr. Jun Arai, Mr. Takashi
Oyamada, and Mr. Yoshihisa Suzuki are Outside Directors.
2. Full-time Audit & Supervisory Board Member, Mr. Masaki Ueno, and Audit & Supervisory Board Members,
Ms. Tomomi Yatsu and Ms. Mayumi Tamura, are Outside Audit & Supervisory Board Members.
3. The Company has introduced the executive officer system. Representative Director and Directors (excluding
Mr. Takeshi Minakata, Mr. Akira Morita, Ms. Yuko Haga, Mr. Jun Arai, Mr. Takashi Oyamada, and Mr.
Yoshihisa Suzuki) concurrently serve as Executive Officer, and there are 17 Executive Officers who are notconcurrent officers.
Senior Managing Executive Officer

Wataru Murata

Managing Executive Officer

Takeyoshi Yamashita

Director, Human Resources Department
Vice President, Head of Strategy Division

Managing Executive Officer

Hiroshi Sonekawa

Vice President, Head of Sales & Marketing Division

Managing Executive Officer

Motohiko Kawaguchi

Director, Finance Department

Managing Executive Officer

Abdul Mullick

Vice Chief International Business Officer

Executive Officer

Yasuo Fujii

Director, Business Development Department

Executive Officer

Shin Inoue

Director, Area Marketing Strategy Department, Sales & Marketing Division

Executive Officer

Fumihiko Kanai

Director, Established Medicine Strategy Department, Strategy Division

Executive Officer

Koichiro Ishimaru

Director, Corporate Social Responsibility Management Department

Executive Officer

Yoshifumi Torii

Vice President, Head of R&D Division

Executive Officer

Hiroki Takamatsu

Vice President, Head of Quality Assurance Division

Executive Officer

Tomohiro Sudo

Director, Global Product Strategy Department, Strategy Division

Executive Officer

Kenji Shibata

Director, Internal Audit Department

Executive Officer

Shoko Itagaki

Director, Corporate Strategy & Planning Department, Strategy Division

Executive Officer

Toshiyuki Kurata

Vice President, Head of Production Division

Executive Officer

Atsushi Matsumoto

President & CEO, FUJIFILM KYOWA KIRIN BIOLOGICS Co., Ltd.

Executive Officer

Yoshiko Mori

Vice President, Head of Pharmacovigilance Division- 66 -

4. From the 99th Ordinary General Meeting of Shareholders held on March 25, 2022 to the conclusion of the100th Ordinary General Meeting of Shareholders
5. From the 99th Ordinary General Meeting of Shareholders held on March 25, 2022 to the conclusion of the
103rd Ordinary General Meeting of Shareholders
6. From the 97th Ordinary General Meeting of Shareholders held on March 19, 2020 to the conclusion of the
101st Ordinary General Meeting of Shareholders
7. From the 96th Ordinary General Meeting of Shareholders held on March 20, 2019 to the conclusion of the100th Ordinary General Meeting of Shareholders
8. From the 98th Ordinary General Meeting of Shareholders held on March 24, 2021 to the conclusion of the
102nd Ordinary General Meeting of Shareholders
9. The number of shares held represents figures as of December 31, 2022.
10. Kirin Company, Limited was merged, by absorption-type merger, into Kirin Holdings Company, Limited, theCompany’s parent company, on July 1, 2019.
11. The name of Ms. Yuko Haga, Director, in her family register is Yuko Hayashi.

- 67 -

2.

The Company proposes “Election of nine (9) Directors of Board” and “Election of one (1) Audit & Supervisory
Board Member” as agenda (matters to be resolved) to the Ordinary General Meeting of Shareholders to beheld on March 24, 2023. If the proposals are approved and adopted, the status of Directors and Audit &Supervisory Board Members will be as follows. The details of matters to be resolved at the Board of Directors
meeting scheduled to be held immediately after the Ordinary General Meeting of Shareholders (title,
positions, etc.) are also included and shown below.
Male: 10, Female: 4 (Percentage of female officers: 28.6%)

Title and position

Name

Date of birth

Career summary
Apr.
Apr.

Mar.
Representative
Director,
President andChief Executive
OfficerJul.
MasashiMiyamoto

Jul. 16, 1959
Apr.
Mar.
Apr.
Mar.
Apr.
Apr.
Oct.
Apr.

Representative
Director,
Executive Vice
President

Mar.
YutakaOsawa

Oct. 17, 1959
Apr.
Mar.
Mar.
Mar.
Apr.
Apr.
Apr.
Apr.
Apr.

Director of theBoard,
Senior Managing
Executive Officer

Takeyoshi
Yamashita

Nov. 30, 1961

Mar.
Mar.
Mar.
Apr.
Mar.
Apr.

Number ofTerm of shares held
office (Thousandsof shares)

1985: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2011: Director, Regulatory Affairs Department ofPharmacovigilance and Quality Assurance Division,
Kyowa Hakko Kirin Co., Ltd. (presently Kyowa Kirin Co.,Ltd.)
2012: Executive Officer, Director, Regulatory Affairs
Department of Pharmacovigilance and Quality Assurance
Division, Kyowa Hakko Kirin Co., Ltd.
2014: Executive Officer, Director, Strategic Product Portfolio
Department and Regulatory Affairs Department ofPharmacovigilance and Quality Assurance Division,(Note 4)
Kyowa Hakko Kirin Co., Ltd.
2015: Executive Officer, Director, Strategic Product Portfolio
Department, Kyowa Hakko Kirin Co., Ltd.
2017: Director of the Board, Managing Executive Officer,
Director, Strategic Product Portfolio Department, Kyowa
Hakko Kirin Co., Ltd.
2017: Director of the Board, Managing Executive Officer,
Director, Corporate Strategy & Planning Department,
Kyowa Hakko Kirin Co., Ltd.
2018: Representative Director, President and Chief Executive
Officer, Kyowa Hakko Kirin Co., Ltd. (present)
1984: Joined Kyowa Hakko Kogyo Co., Ltd.
2007: Director, Pharmaceutical Production Development
Department, Kyowa Hakko Kogyo Co., Ltd.
2008: Director, CMC Development Department, Development
Division, Kyowa Hakko Kirin Co., Ltd. (presently Kyowa
Kirin Co., Ltd.)
2009: Director, Production Planning Department, Production
Division, Kyowa Hakko Kirin Co., Ltd.
2013: Executive Officer, Director, Production Planning
Department, Production Division, Kyowa Hakko Kirin(Note 4)Co., Ltd.
2014: Executive Officer, Vice President Head, Production
Division, Kyowa Hakko Kirin Co., Ltd.
2017: Managing Executive Officer, Vice President Head,
Production Division, Kyowa Hakko Kirin Co., Ltd.
2018: Director of the Board, Managing Executive Officer, Vice
President Head, Production Division, Kyowa Hakko Kirin
Co., Ltd.
2019: Representative Director, Executive Vice President,
Kyowa Hakko Kirin Co., Ltd. (present)
1987: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2010: Director, Innovative Drug Discovery Laboratories,
Research Division, Kyowa Hakko Kirin Co., Ltd.
(presently Kyowa Kirin Co., Ltd.)
2012: Director, Research Planning Department, Research
Division, Kyowa Hakko Kirin Co., Ltd.
2014: Director, Research Core Function Laboratories,
Research Functions Unit, R&D Division, Kyowa Hakko
Kirin Co., Ltd.
2015: Director, Regulatory Affairs Department,
Pharmacovigilance and Quality Assurance Division,
Kyowa Hakko Kirin Co., Ltd.
2017: Executive Officer, Director, Regulatory Affairs(Note 4)
Department, Pharmacovigilance and Quality Assurance
Division, Kyowa Hakko Kirin Co., Ltd.
2019: Executive Officer, Director, Corporate Strategy &Planning Department, Kyowa Hakko Kirin Co, Ltd.
2021: Managing Executive Officer, Director, Corporate Strategy& Planning Department, Kyowa Kirin Co., Ltd.
2022: Managing Executive Officer, Vice President Head,
Strategy Division, Kyowa Kirin Co., Ltd.
2023: Director of the Board, Senior Managing Executive
Officer, Vice President Head, Strategy Division, Kyowa
Kirin Co., Ltd. (scheduled)
2023: Director of the Board, Senior Managing Executive
Officer, Kyowa Kirin Co., Ltd. (scheduled)- 68 -

86.2

60.9

19.0

Title and position

Name

Date of birth

Career summary
Apr.
Mar.
Mar.
Oct.
Mar.
Jan.

Director of the
Board

TakeshiMinakata

Dec. 31, 1961

Mar.

Apr.
Mar.
Mar.
Jan.
Mar.

Oct.
Apr.
Apr.
Jul.
Apr.
Apr.
Jun.
May
Apr.
Director of the
Board

Akira Morita

Apr. 22, 1951

Aug.
Apr.

Apr.
Mar.
Apr.
Jul.
May

Number ofTerm of shares held
office (Thousandsof shares)

1984: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2007: Deputy General Manager, Toride Plant, Kirin Brewery
Company, Limited
2009: Deputy General Manager, Production Control
Department of Production Division, Kirin Brewery
Company, Limited
2010: Kirin Liaison Technical Director, Lion Nathan National
Foods Pty Ltd (presently Lion Pty Ltd)
2012: General Manager, Corporate Planning Dept., Kirin
Brewery Company, Limited
2013: Executive Officer, General Manager, Corporate Planning
Department, Kirin Company, Limited (presently Kirin
Holdings Company, Limited)
Executive Officer, General Manager, Planning Dept.,
Kirin Brewery Company, Limited
2015: Senior Executive Officer, Director, Corporate Strategy,(Note 4)
Kirin Holdings Company, Limited
Senior Executive Officer, General Manager, Corporate
Planning Department, Kirin Company, Limited
2016: Director and President of Myanmar Brewery Limited
Senior Executive Officer, Kirin Holdings Company,
Limited2018: President and CEO, KYOWA HAKKO BIO CO., LTD.
2020: President and CEO, KYOWA HAKKO BIO CO., LTD.
Senior Executive Officer, Kirin Holdings Company,
Limited2022: Senior Executive Officer, in charge of Health Business
Strategy, Kirin Holdings Company, Limited (present)
2022: Director of the Board, Senior Executive Officer, in chargeof Health Business Strategy, Kirin Holdings Company,
Limited (present)
Director of the Board, Kyowa Kirin Co., Ltd. (present)
1993: Professor, Faculty of Law and Economics, Chiba
University
1994: Professor, The University of Tokyo Graduate Schools for
Law and Politics
2004: Dean, Professor, Graduate School of Public Policy, The
University of Tokyo
2008: Director, Policy Alternatives Research Institute, The
University of Tokyo
2011: Chairman, Central Social Insurance Medical Council,
Ministry of Health, Labour and Welfare
2012: Professor, Department of Political Studies, Faculty ofLaw, Gakushuin University
2012: Emeritus Professor, The University of Tokyo (present)
2013: Chair of the Board, Japan Usability Medical Information
Promote Conference
2014: Director-General, National Institute of Population andSocial Security Research
2014: Adjunct Professor, National Graduate Institute for Policy(Note 4)
Studies
2017: Professor, Department of Policy Studies, Tsuda
University
Visiting Professor, Mie University Graduate School of
Medicine
Outside Member, Administrative Council, The Universityof Tokyo (present)
2018: Director-General, Research Institute of Science andTechnology for Society, Japan Science & Technology
Agency2019: Outside Director of the Board, Kyowa Hakko Kirin Co.,
Ltd. (presently Kyowa Kirin Co., Ltd.) (present)
2019: Visiting Professor, Kanagawa University of Human
Services (present)
2020: Representative Director, Next Generation Fundamental
Policy Research Institute (present)
2022: Data Health Operations Advisor, Health Insurance
Claims Review & Reimbursement Services (present)- 69 -–

2.6

Title and position

Name

Date of birth

Career summary
Apr.
Apr.
Jun.
Feb.

Director of the
Board

Yuko Haga

Dec. 8, 1955

Apr.
Apr.
Mar.
Apr.
Jun.
Apr.
Jan.
Jun.

May
May
Jun.
Jun.
Director of the
Board

TakashiOyamadaNov. 2, 1955
Apr.

Jun.
Jun.
Dec.
Jun.

Mar.
Apr.
Apr.
Jun.
Apr.

Director of the
Board

Yoshihisa
Suzuki

Apr.
Jun.
Jun.
Jun.
Jun. 21, 1955
Apr.
Apr.
Apr.
Mar.
Apr.
Jun.

Number ofTerm of shares held
office (Thousandsof shares)

1989: Senior Consultant, Tokyo Office, Price Waterhouse
Consultants
1991: Representative, Haga Management Consulting Office(present)
2000: Director, Linkworld Co., Ltd.
2010: Director, Social Welfare Corporation Fujikenikukai(present)
2010: Visiting Professor, Department of Policy Management,(Note 4)
Faculty of Policy Management, Shobi University
2017: Associate Professor, Graduate School of Management,
NUCB Business School
2019: Outside Director of the Board, Kyowa Hakko Kirin Co.,
Ltd. (presently Kyowa Kirin Co., Ltd.) (present)
2020: Professor, Graduate School of Management, NUCB
Business School (present)
2020: Outside Director, MinebeaMitsumi Inc. (present)
1979: Joined The Mitsubishi Bank, Limited (presently MUFG
Bank, Ltd.)
2006: Executive Officer, The Bank of Tokyo-Mitsubishi UFJ,
Ltd. (presently MUFG Bank, Ltd.)
2009: Managing Director, The Bank of Tokyo-Mitsubishi UFJ,
Ltd.
Member of the Board of Directors, Mitsubishi UFJ
Financial Group, Inc.
2012: Managing Executive Officer, The Bank of TokyoMitsubishi UFJ, Ltd.
2013: Senior Managing Executive Officer, The Bank of TokyoMitsubishi UFJ, Ltd.
2014: Representative Director, Deputy President, The Bank ofTokyo-Mitsubishi UFJ, Ltd.
2015: Member of the Board of Directors, Representative
Corporate Executive, Deputy President and Group COO,
Mitsubishi UFJ Financial Group, Inc.
(Note 4)
2016: Representative Director, President & CEO, The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Member of the Board of Directors, Mitsubishi UFJ
Financial Group, Inc.
2017: Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(present)
2018: Director and Vice Chair, The Japan Institute ofInternational Affairs (present)
2018: Outside Director, Mitsubishi Research Institute DCS Co.,
Ltd. (present)
2019: Outside Director, Mitsubishi Electric Corporation(present)
Outside Director, Isetan Mitsukoshi Holdings Ltd.
(present)
2021: Outside Director of the Board, Kyowa Kirin Co., Ltd.
(present)
1979: Joined ITOCHU Corporation
2003: General Manager, Aerospace, Space and Electronics
Division, ITOCHU Corporation
2003: Executive Officer, ITOCHU Corporation
2006: Managing Executive Officer, ITOCHU Corporation
Executive Vice President and CAO, ITOCHUInternational Inc.
2007: President and CEO, ITOCHU International Inc.
2011: Executive Vice President, JAMCO Corporation
2012: President and CEO, JAMCO Corporation
2016: Senior Managing Executive Officer, Member of theBoard, ITOCHU Corporation(Note 4)
2018: President and Chief Operating Officer (COO), Member ofthe Board, ITOCHU Corporation
2020: President and Chief Operating Officer (COO), Chief
Digital Officer (CDO), and Chief Information Officer(CIO), Member of the Board, ITOCHU Corporation
2021: Vice Chairman, Member of the Board, ITOCHU
Corporation
2022: Outside Director of the Board, Kyowa Kirin Co., Ltd.
(present)
2022: Vice Chairman, ITOCHU Corporation (present)
2022: Outside Director, OMRON Corporation (present)- 70 -

3.4

1.8

0.5

Title and position

Name

Date of birth

Career summary
Apr.
Apr.
Apr.
Dec.
Mar.
Jan.
Mar.

Director of the
Board

RumikoNakataApr. 6, 1956

Apr.
Apr.

Apr.
Mar.
Apr.
Feb.
Apr.
Full-time Audit &HiroshiSupervisory
Komatsu
Board Member

Apr.
Oct. 13, 1962
Apr.
Mar.
Apr.
Mar.
Jan.

Full-time Audit &Supervisory
Masaki Ueno
Board Member

May 20, 1961
Apr.
Apr.
Mar.
Apr.
Oct.
Sep.
Oct.
Jun.
Jun.

Audit &
Supervisory
Board Member

Mar.
Tomomi Yatsu

May 30, 1960

Mar.
Apr.
Jun.
Jun.
Mar.
Mar.
Apr.

Number ofTerm of shares held
office (Thousandsof shares)

1979: Joined Esso Sekiyu K.K.
1996: Center for Socio-Economic Research K.K.
2000: Joined Pfizer K.K.
2011: Head of HR and Global Operations, Pfizer K.K.
2012: Corporate Officer, Pfizer K.K.
2014: Director of the Board, Corporate Officer, Pfizer K.K.
2018: Executive Officer, in charge of Diversity & Inclusion,
Mitsubishi Chemical Corporation(Note 4)
2019: Managing Executive Officer, Supervising –Human
Resources Department, Mitsubishi Chemical Corporation
2020: Director of the Board, Managing Executive Officer,
Supervising –Administration Department, Public
Relations Department, Human Resources Department,
Mitsubishi Chemical Corporation
2022: Director of the Board, Mitsubishi Chemical Corporation
2023: Outside Director of the Board, Kyowa Kirin Co., Ltd.
1986: Joined Kyowa Hakko Kogyo Co., Ltd.
2009: CFO, Hematech, Inc.
2012: Manager, Corporate Planning Department, Kyowa Hakko
Kirin Co., Ltd. (presently Kyowa Kirin Co., Ltd.)
2015: Deputy Director, General Affairs Department, Kyowa
Hakko Kirin Co., Ltd.
(Note 5)
2016: Deputy Director, General Affairs Department, andLeader, Corporate Secretariat Group, General Affairs
Department, Kyowa Hakko Kirin Co., Ltd.
2018: Full-time Audit & Supervisory Board Member, Kyowa
Hakko Kirin Co., Ltd. (present)
1998: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2012: General Manager, Legal Department, Kirin Holdings
Company, Limited
2013: General Manager, Legal Department, Kirin Company,
Limited (presently Kirin Holdings Company, Limited)
Director of Group Legal, Kirin Holdings Company,
Limited(Note 6)
2015: Executive Officer, General Manager, Legal Department,
Kirin Company, Limited, and Executive Officer, Directorof Group Legal, Kirin Holdings Company, Limited
2019: Executive Officer, General Manager, Legal Department,
Kirin Holdings Company, Limited
2020: Outside Audit & Supervisory Board Member (Full-time),
Kyowa Kirin Co., Ltd. (present)
1983 Joined Tokyo Electron Ltd.
1986: Joined Deloitte Touche Tohmatsu LLC
1990: Registered as a certified public accountant
2001: Joined New Tokyo International Law Office
Admitted to Tokyo Bar Association
2009: Outside Auditor, Calbee, Inc.
2010: Outside Audit & Supervisory Board Member, Taiko
Pharmaceutical Co., Ltd.
2012: Outside Audit & Supervisory Board Member, KOKUYO
Co., Ltd.
(Note 7)
2015: Outside Audit & Supervisory Board Member, Yamaha
Motor Co., Ltd.
2015: Partner, TMI Associates
2016: Outside Director, SMBC Nikko Securities Inc. (present)
2017: Outside Audit & Supervisory Board Member, IHI
Corporation
2019: Outside Corporate Auditor, Kuraray Co., Ltd. (present)
2021: Outside Audit & Supervisory Board Member, Kyowa Kirin
Co., Ltd. (present)
2022: Representative, Yatsu Law & Accounting Firm (present)- 71 -

−

4.1

1.5

–

Title and position

Name

Date of birth

Career summary
Apr.
Sep.
Jul.
Dec.
Jun.

Audit &
Supervisory
Board Member

May
Mayumi
TamuraMay 22, 1960
Jun.
Jun.
Jun.
Jun.
Mar.
Jun.
Apr.
Mar.
Apr.
Mar.

Audit &
Supervisory
Board Member

Apr.
Toru
Ishikura

Nov. 30, 1963
Mar.
Apr.
Apr.
Mar.
Mar.

Notes:

Number ofTerm of shares held
office (Thousandsof shares)

1983: Joined Sony Corporation (presently Sony Group
Corporation)
1991: Joined JOHNSON COMPANY, LIMITED
2002: Executive Officer, Johnson Diversey Co. Ltd. (presently
CxS Corporation)
2004: CFO, adidas Japan K.K.
2007: Executive Officer, Senior Vice President and CFO, Seiyu
KK (presently Seiyu GK)
2010: Executive Officer, SVP and CFO, Walmart Japan
Holdings GK (presently Walmart Japan Holdings KK)(Note 5)
Executive Officer, SVP and CFO, Seiyu GK
2015: Outside Corporate Auditor, Honda Motor Co., Ltd.
2017: Outside Director, Audit and Supervisory Committee
Member, Honda Motor Co., Ltd.
2017: Outside Director, Hitachi High-Technologies Corporation(presently Hitachi High-Tech Corporation)
2019: Outside Director, SHIMIZU CORPORATION (present)
2022: Outside Audit & Supervisory Board Member, Kyowa Kirin
Co., Ltd. (present)
2022: Outside Director, LIXIL Corporation (present)
1989: Joined Kirin Brewery Company, Limited (presently Kirin
Holdings Company, Limited)
2015: General Manager, Technology Management Department,
Research & Development Division, Kirin Company,
Limited (presently Kirin Holdings Company, Limited)
2015: General Manager, Research & Development Strategy
Department, Research & Development Division, Kirin
Company, Limited
2018: Executive Officer, General Manager, Research &Development Strategy Department, Research &Development Division, Kirin Company, Limited
2019: Executive Officer, Vice President, Research &Development Division and General Manager, Research(Note 8)& Development Strategy Department, Research &Development Division, Kirin Holdings Company, Limited
2020: Director of the Board, KYOWA HAKKO BIO CO. LTD.
2020: Executive Officer, General Manager, Health Business
Strategy Office, Corporate Strategy Department, Kirin
Holdings Company, Limited
2022: Executive Officer, General Manager, Health Science
Business Department, Health Science Business Division,
Kirin Holdings Company, Limited (present)
2023: Audit & Supervisory Board Member, Kyowa Kirin Co.,
Ltd. (scheduled)
2023: Company Auditor (Full-time), Kirin Holdings Company,
Limited (scheduled)
Total

0.2

–

180.2

1. Of the members of Directors of the Board, Mr. Akira Morita, Ms. Yuko Haga, Mr. Takashi Oyamada, Mr.
Yoshihisa Suzuki, and Ms. Rumiko Nakata are Outside Directors.
2. Full-time Audit & Supervisory Board Member, Mr. Masaki Ueno, and Audit & Supervisory Board Members,
Mses. Tomomi Yatsu and Mayumi Tamura, are Outside Audit & Supervisory Board Members.
3. The Company has introduced the executive officer system. Representative Director and Directors (excluding
Mr. Takeshi Minakata, Mr. Akira Morita, Ms. Yuko Haga, Mr. Takashi Oyamada, Mr. Yoshihisa Suzuki and Ms.
Rumiko Nakata) concurrently serve as Executive Officer, and there will be 19 Executive Officers who are notconcurrent officers as follows.
Senior Managing Executive
Officer

Wataru Murata

Director, Human Resources Department
Vice President, Head of Sales & Marketing Division

Managing Executive Officer

Hiroshi Sonekawa

Managing Executive Officer

Motohiko Kawaguchi

Director, Finance Department

Managing Executive Officer

Abdul Mullick

Chief International Business Officer

Managing Executive Officer

Yasuo Fujii

Director, Business Development Department

Executive Officer

Shin Inoue

Director, Area Marketing Strategy Department, Sales & Marketing
Division

Executive Officer

Fumihiko Kanai

Director, Established Medicine Strategy Department, Strategy Division

Executive Officer

Koichiro Ishimaru

Director, Corporate Social Responsibility Management Department

Executive Officer

Yoshifumi Torii

Vice President, Head of R&D Division

Executive Officer

Hiroki Takamatsu

Vice President, Head of Quality Assurance Division

Executive Officer

Tomohiro Sudo

Director, Global Product Strategy Department, Strategy Division

Executive Officer

Kenji Shibata

Director, Internal Audit Department- 72 -

Executive Officer

Shoko Itagaki

Director, Corporate Strategy & Planning Department, Strategy Division

Executive Officer

Toshiyuki Kurata

Vice President, Head of Production Division

Executive Officer

Atsushi Matsumoto

Director, Supply Chain Management Department

Executive Officer

Yoshiko Mori

Vice President, Head of Pharmacovigilance Division

Executive Officer

Yuichi Kawasaki

Director, Product Strategy Department, Strategy Division

Executive Officer

Koichi Nagano

Director, Sales & Marketing Planning Department, Sales & Marketing
Division

Executive Officer

Takefumi Matsushita

Director, Medical Affairs Department

4. From the 100th Ordinary General Meeting of Shareholders held on March 24, 2023 to the conclusion of the
101st Ordinary General Meeting of Shareholders
5. From the 99th Ordinary General Meeting of Shareholders held on March 25, 2022 to the conclusion of the
103rd Ordinary General Meeting of Shareholders
6. From the 97th Ordinary General Meeting of Shareholders held on March 19, 2020 to the conclusion of the
101st Ordinary General Meeting of Shareholders
7. From the 98th Ordinary General Meeting of Shareholders held on March 24, 2021 to the conclusion of the
102nd Ordinary General Meeting of Shareholders
8. From the 100th Ordinary General Meeting of Shareholders held on March 24, 2023 to the conclusion of the104th Ordinary General Meeting of Shareholders
9. The number of shares held represents figures as of December 31, 2022.
10. Kirin Company, Limited was merged, by absorption-type merger, into Kirin Holdings Company, Limited, theCompany’s parent company, on July 1, 2019.
11. The name of Ms. Yuko Haga, Director, in her family register is Yuko Hayashi.

- 73 -

(Reference) Skills matrix of the Company’s Board of Directors
The Company makes its Board of Directors consist of diverse human resources with various skills (such as knowledge
and experience) in light of the direction of management over the medium- to long-term and the business strategy toensure that the Board of Directors fulfills its decision-making function and management supervisory function appropriately
and maintain a more highly transparent governance system.
If proposals (matters to be resolved) “Election of nine (9) Directors of Board” and “Election of one (1) Audit & Supervisory
Board Member” are approved and adopted at the Ordinary General Meeting of Shareholders to be held on March 24,
2023, the composition of the Board of Directors and skills possessed by each Director and Audit & Supervisory Board
Member will be as follows:
Professional skills

Name

Chairman of Nomination & Corporate
Indepenmeetings of Remuneration management
dent
the Board of Consultative
Business
OutsideDirectors
Committee
strategy

MasashiMiyamoto
YutakaOsawa
Takeyoshi
Directors of the Board

Yamashita

Globalbusiness

〇

〇

〇

〇

〇

〇

〇

〇

〇

TakeshiMinakata〇

Akira Morita〇

Yuko Haga

〇

〇

〇

〇

〇

Chairperson

〇

〇

〇

〇

〇

〇

〇

〇

TakashiOyamadaYoshihisa
Suzuki
RumikoNakata〇Audit & Supervisory Board
Members

Mayumi
Tamura

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

Toru

- 74 -

〇

〇

〇

〇

〇
〇

〇
〇

Ishikura

〇

〇

〇

〇

〇

〇

〇
〇

〇

〇

〇

Masaki Ueno
Yatsu

〇

〇

〇

Hiroshi
KomatsuTomomi

Legal,
Finance, governmen- Human
Healthcar
Production
accounting tal affairs resources
R&D
eand SCMand banking
andand labor
compliance

(ii) Outside Directors and Outside Audit & Supervisory Board Members(Personal, capital, business or other relationships with the Company)
All the five Outside Directors of the Company as of March 9, 2023 (Mr. Akira Morita, Ms. Yuko Haga, Mr. Jun
Arai, Mr. Takashi Oyamada and Mr. Yoshihisa Suzuki) have no personal, capital, or business relationships or any
other special interests with the Company. In addition, Ms. Rumiko Nakata, who is a candidate for Outside
Director to be proposed at the Ordinary General Meeting of Shareholders to be held on March 24, 2023, has no
personal, capital, or business relationships or any other special interests with the Company.
Of three Outside Audit & Supervisory Board Members of the Company as of March 9, 2023 (Mr. Masaki Ueno,
Ms. Tomomi Yatsu and Ms. Mayumi Tamura), Mr. Masaki Ueno is a former person who executed business at
Kirin Holdings Company, Limited. Both Ms. Tomomi Yatsu and Ms. Mayumi Tamura have no personal, capital, or
business relationships or any other special interests with the Company.
Holdings of shares of the Company by Outside Directors and Outside Audit & Supervisory Board Members are
as described in “Number of shares held” of “(2) Directors and Audit & Supervisory Board Members (i) List of
Directors and Audit & Supervisory Board Members.”(Functions and roles performed in corporate governance)
Outside Directors of the Company have diverse background, expertise and experience, etc. They make use of
their wealth of experience and knowledge for the Company’s management, and perform the function ofsupervising the Company’s management from an objective and fair standpoint.
Outside Audit & Supervisory Board Members of the Company strive to ensure reliable and sound managementby conducting audits of our corporate management, making use of their expertise, insights, and experience, etc.,from an objective and neutral standpoint.
(Details of criteria or policies regarding the independence)“Criteria for the Independence of Outside Directors and Outside Audit & Supervisory Board Members” (asamended on December 1, 2020) have the following provisions:
In order for Outside Directors and Outside Audit & Supervisory Board Members of the Company to be judged as
being independent, such Outside Directors and Outside Audit & Supervisory Board Members must, in addition tosatisfying the requirements of an Outside Director and Outside Audit & Supervisory Board Member provided forunder the Companies Act, not fall under any of the following items:(i)Executive director (gyomushikko torishimariyaku), executive officer (shikkoyakuin), manager (shihainin) orother employee of the Company or a subsidiary of the Company(ii)
Director (torishimariyaku), Audit & Supervisory Board Member (kansayaku), executive officer, manager orother employee of a parent company or fellow subsidiary of the Company“Fellow subsidiary” refers to another company that has the same parent company as the Company.
(iii)
Director, Audit & Supervisory Board Member, corporate officer (shikkoyaku), executive officer, manager orother employee of a major shareholder of the Company (excluding a parent company of the Company)“Major shareholder” refers to a shareholder who holds 10% or more of voting rights.
(iv)
Director, Audit & Supervisory Board Member, accounting advisor (kaikeisanyo), corporate officer,
executive officer, manager or other employee of a company of which the Company is a major shareholder(excluding a subsidiary of the Company)(v)
Person whose major business counterparty is the Company or a subsidiary of the Company“Person whose major business counterparty is the Company or a subsidiary of the Company” refers to aperson who receives or makes payments from or to the Company or a subsidiary of the Company of 2%
or more of that person’s annual total net sales in the most recent fiscal year.
(vi)
Executive director, corporate officer, executive officer, manager or other employee of a company, or asubsidiary of a company, whose major business counterparty is the Company or a subsidiary of theCompany“Company, or a subsidiary of the Company, whose major business counterparty is the Company or asubsidiary of the Company” refers to a company, or a subsidiary of a company, which receives or makes
payments from or to the Company or a subsidiary of the Company of 2% or more of that company’s
annual consolidated net sales in the most recent fiscal year.
(vii)
Person who is a major business counterparty of the Company or a subsidiary of the Company“Person who is a major business counterparty of the Company or a subsidiary of the Company” refers to aperson who receives or makes payments from or to the Company or a subsidiary of the Company of 2%
or more of the Company’s annual consolidated net sales in the most recent fiscal year.
(viii) Executive director, corporate officer, executive officer, manager or other employee of a company, or asubsidiary of a company, who is a major business counterparty of the Company or a subsidiary of theCompany“Company, or its subsidiary, who is a major business counterparty of the Company or a subsidiary of theCompany” refers to a company, or a subsidiary of a company, which receives or makes payments from orto the Company or a subsidiary of the Company of 2% or more of the Company’s annual consolidated net
sales in the most recent fiscal year.
(ix)
Certified public accountant (or certified public tax accountant), or member, partner or employee of audit
firm (or tax accounting firm), that is the accounting auditor or accounting advisor of the Company or asubsidiary of the Company(x)
Attorney-at-law, certified public accountant, certified public tax accountant or consultant, etc. who,
excluding the remuneration received as a director or Audit & Supervisory Board Member, receives ¥10
million or more per year on average during the past three years of monetary consideration or otherproperty benefits from the Company or a subsidiary of the Company(xi)
Member, partner or employee of a corporation, association, or other organization such as law firm, audit- 75 -

firm, tax accounting firm, or consulting firm that receives monetary consideration or other property benefitsof more than a certain amount from the Company or a subsidiary of the Company
In this item, a corporation, association, or other organization above receives “more than a certain amount”
when such organization, etc. receives 2% or more on average of the total net sales (total revenue) of theorganization, etc. per year during the past three years.
(xii)
Director, Audit & Supervisory Board Member, accounting advisor, corporate officer, executive officer,
manager or other employee of a financial institution or other large creditor that is essential to the financingof the Company, or a subsidiary of the Company, with a level of dependence to the degree that there is no
substitute.
(xiii) Director or other person who executes business in a corporation, association or other organization which
receives donations or subsidies from the Company or a subsidiary of the Company more than a certain
amountIn this item, a corporation, association or other organization receives “more than a certain amount” whensuch organization, etc. receives, during the past three years, more than (i) ¥10 million per year on averageor (ii) 30% on average of the annual total expenses of the organization, etc., whichever is higher.
(xiv) Director, Audit & Supervisory Board Member, accounting advisor, corporate officer, or executive officer of
a company or its subsidiary that has accepted a person from the Company or a subsidiary of theCompany as a director (serving at that company on either a full-time or part-time basis)(xv) Person who has come under a category listed in either of items (i) and (ii) in the past ten years(xvi) Person who has come under a category listed in item (iii) in the past five years(xvii) Person who has come under a category listed in any of items (v) through (xiii) in the past three years(xviii) Spouse or first- to second-degree relative, or other relative sharing same residence of any person who
has come under a category listed in any of items (ii) through (xvii); provided, however, that any mention of“manager or other employee” shall be deemed to be replaced with “manager or other important
employee.”(xix) Spouse, first- to second-degree relative, or other relative sharing same residence of Director, executive
officer, manager or other important employee of the Company, or a subsidiary of the Company.
(xx) Spouse, first- to second-degree relative, or other relative sharing same residence of Director, executive
officer or other important employee of the Company or a subsidiary of the Company in the past five years(xxi) Other than the above, a person that might cause a conflict of interest with general shareholders and forwhom it is reasonably judged that there are circumstances suggesting that the person cannot fulfill theduties as an Outside Director or Outside Audit & Supervisory Board Member.
(The Company’s view on the current status of appointment)
The Company appoints Outside Directors and Outside Audit & Supervisory Board Members with diverse
backgrounds, expertise, and experience, and thus secures the system capable of objectively and fairly
supervising and auditing the Company’s management from an independent standpoint. We believe that thisapproach results in increasing transparency of the corporate management and strengthening the function ofmonitoring the management.
With respect to the requirements for securing independence, we established our own “Criteria for the
Independence of Outside Directors and Outside Audit & Supervisory Board Members” to secure theindependence from our Group, taking reference from the provision on independent officers stipulated in the“Enforcement Rules for Securities Listing Regulations” of the Tokyo Stock Exchange (TSE), as well as the “Model
standards for appointing independent directors in rules of the Board of Directors” developed by the Japan
Association of Corporate Directors in 2011. According to the Criteria, as of March 9, 2023, we designated sevenpersons (five Outside Directors: Mr. Akira Morita, Ms. Yuko Haga, Mr. Jun Arai Mr. Takashi Oyamada and Mr.
Yoshihisa Suzuki; two Outside Audit & Supervisory Board Members: Ms. Tomomi Yatsu and Ms. Mayumi Tamura)as independent officers defined in the “Securities Listing Regulations” of the TSE, and notified the TSE of thematter. In addition, the Company has also notified the TSE that it would designate Ms. Rumiko Nakata, acandidate for Outside Director, as independent officers defined in the said regulations if they are elected asoriginally proposed at the Ordinary General Meeting of Shareholders to be held on March 24, 2023.
(iii) Mutual cooperation between supervision or audit by Outside Directors or Outside Audit & Supervisory Board
Members, and internal audit, audit by Audit & Supervisory Board Members and the Accounting Auditor, andrelationship with internal control departments
Outside Directors receive internal audit reports through the attendance at Board of Directors meetings andprovide opinions based on the information exchange with the Audit & Supervisory Board, reports from the
Accounting Auditor, and other activities. Thus, they fulfill supervisory functions on the performance of duties byDirectors in coordination with these audits. They also strive to ensure appropriate execution of operations
through providing opinions and advice as a member of the Board to operate internal control departments.
In accordance with the audit policy developed at the Audit & Supervisory Board, assignment of duties, etc.,
Outside Audit & Supervisory Board Members audit the execution of duties by Directors through the attendance at
the Board of Directors meetings and other important meetings, investigation of the status of operations andassets, and other activities. They also strive for mutual cooperation by exchanging information and consultingwith the Accounting Auditor, the Internal Audit Department and internal control departments to enhance the audit
function.

- 76 -

(3) Audits(i) Audits by Audit & Supervisory Board Members
a. Organization and personnel
As of March 9, 2023, the Audit & Supervisory Board consists of five members (including three outside
members; three males and two female).
Mr. Hiroshi Komatsu (full-time Audit & Supervisory Board Member) and Ms. Mayumi Tamura (Outside Audit &Supervisory Board Member) have experience in accounting and finance divisions of business corporations, Mr.
Masaki Ueno (full-time Outside Audit & Supervisory Board Member) has experience in financial institutions,and Ms. Tomomi Yatsu (Outside Audit & Supervisory Board Member) is a certified public accountant. Thus,
each of them has considerable knowledge of accounting and finance.
In order to strengthen the audit function of Audit & Supervisory Board Members, the Company has appointed
employees dedicated to assisting duties of Audit & Supervisory Board Members independent of the executionof operations.
b. Activities of the Audit & Supervisory Board
In fiscal 2022, the Audit & Supervisory Board met 13 times. Attendance of each Audit & Supervisory Board
Member is as follows:
Name

Title and position

Number of meetings held

AttendanceHiroshi Komatsu

Full-time Audit &Supervisory Board Member

13

13

Masaki Ueno

Outside Audit &Supervisory Board Member(Full-time)13

13

Keiji Kuwata

Audit & Supervisory Board
Member13

13

Tomomi Yatsu

Outside Audit &Supervisory Board Member

13

13

Outside Audit &10
10Supervisory Board Member
Note: The difference in the number of meetings held is due to difference in the timing of assuming the post.
Mayumi Tamura

Major matters to be examined and reported by the Audit & Supervisory Board are as follows.
･ Audit policy, audit plans, and assignment of duties･ Status of development and operation of internal control system･ Adequacy of methods and results of audits by the Accounting Auditor･ Evaluation, reappointment/non-reappointment, and audit remuneration of the Accounting Auditor･ Audit report of the Audit & Supervisory Board･ Investigation of proposals and documents submitted to the General Meeting of Shareholders･ Execution of duties of and audit report by each Audit & Supervisory Board Member･ Comments in interviews, on-site audits, etc.
c. Activities of Audit & Supervisory Board Members
In compliance with the audit standards established by the Audit & Supervisory Board, the Company’s Audit &Supervisory Board Members audit the execution of duties by Directors through the following activities, andstrive to enhance the audit function in accordance with the audit policy, audit plans, assignment of duties, etc.
･ Attendance at the Board of Directors meetings and statement of opinions･ Attendance at important meetings, such as meetings of the Global Executive Committee, the Executive
Committee, the Group CSR Committee, the Group Information Disclosure Committee, the Global Quality
Assurance Committee, and the Group Financial Management Committee, as well as inspection of meeting
materials, minutes and other documents (full-time Audit & Supervisory Board Members).
･ Inspection of important approval documents, etc.
･ Meetings to exchange opinions with Representative Director, etc. (six times a year)･ Investigation of the status of operations and assets at the head office and major offices, and Group
companies･ Coordination with the Internal Audit Department: reports on internal audit plans and results (including reports
as Audit & Supervisory Board Members of Group companies), regular information sharing and exchange of
opinions (full-time Audit & Supervisory Board Members: monthly in principle, part-time Audit & Supervisory
Board Members: quarterly)･ Coordination with the Accounting Auditor: explanations and reports on audit plans, results of audits andquarterly reviews, internal control audit (J-SOX) results, etc., and progress reports for key audit matters(KAM) from the Accounting Auditor, and information sharing and exchange of opinions
During the fiscal year ended December 31, 2022, under the impact of COVID-19, Audit & Supervisory Board
Members also conducted audit activities while taking infection prevention measures in accordance with thecompany policy. For sites where face-to-face meetings and on-site visits were difficult, appropriate audits inaccordance with the audit plan were ensured by actively using teleconferences, and web conferencing andother systems.
- 77 -

(ii) Internal auditsa. Organization, personnel, and procedures of internal audits
The Company has established the Internal Audit Department as the third line for internal control, and has
assigned 15 employees to the department (as of December 31, 2022). The Internal Audit Department
assesses the performance of various management activities related to governance, risk management andcontrol processes within the Group in terms of their legality and rationality, from the fair and independent
standpoint, and provides advice and recommendations. Audit results are reported to Representative Director,
Executive Vice President when they become available, and also to Representative Director & President, theBoard of Directors, and the Audit & Supervisory Board on a regular basis. To maintain and improve the qualityof auditing activities, in addition to efforts of the Internal Audit Department for assessing and improving thequality, it continuously conducts such improvement activities as employing external assessments. Furthermore,
the Internal Audit Department also assesses the status of developing/implementing internal control to ensure
the reliability of financial reports in accordance with the Financial Instruments and Exchange Act.
b.

Mutual cooperation between internal audit, audit by Audit & Supervisory Board Members and accounting audit,
and relationship with internal control departments
The Internal Audit Department and Audit & Supervisory Board Members collaborate by mutually sharing theiraudit plans and audit results, and exchanging opinions as needed. The Department exchanges opinions withthe accounting auditor concerning the status of developing/implementing internal control to ensure thereliability of financial reports as needed, make necessary improvements, and regularly exchange information
regarding important audit results, etc.
Through these activities, the Internal Audit Department contributes to improving the effectiveness andefficiency of the Group’s internal control system.

(iii) Accounting auditsa. Name of the audit firm
KPMG AZSA LLC
b.

Consecutive auditing period
Five yearsc.

Certified public accountants who executed audit duties
Mr. Masakazu Hattori (five years of continuous auditing)
Mr. Nobuyuki Ishii (five years of continuous auditing)d.

Composition of assistants who supported audit duties
Assistants who supported audit duties consist of seven certified public accountants, six persons who havepassed the certified public accountant exam, and 21 others.

e.

Policy and reasons for selecting an audit firm
The Audit & Supervisory Board has set the “policy for determining appointment/removal of the Accounting
Auditor,” “matters to be confirmed in the resolution on proposals for appointment of the Accounting Auditor,”and “matters to be confirmed in the resolution that there is no need for removal or non-reappointment of the
Accounting Auditor.” Based on these policies and matters to be confirmed, the Audit & Supervisory Boardand its members have comprehensively examined whether the Accounting Auditor does not fall under each
item stipulated in Article 340, Paragraph 1 of the Companies Act, as well as appropriateness andreasonableness of the Accounting Auditor’s independence and expertise, auditing systems, quality control
system and auditing activities, among others, and determined that the Accounting Auditor is qualified for the
position.

f.

Evaluation of the audit firm by the Audit & Supervisory Board and its members
The Audit & Supervisory Board and its members continuously assess the Accounting Auditor through regularmeetings and other cooperation with them. The Audit & Supervisory Board made discussions based on the“matters to be confirmed in the resolution that there is no need for removal or non-reappointment of the
Accounting Auditor” after receiving the year-end accounting audit report from the Accounting Auditor, andresolved the reappointment of the Accounting Auditor because it was highly rated by the assessment.

- 78 -

(iv) Audit remuneration
a. Remuneration for the auditing certified public accountants, etc.
Fiscal year ended December 31, 2021
Category

Remuneration foraudit and attestation
service(Millions of yen)

Fiscal year ended December 31, 2022

Remuneration for nonaudit services(Millions of yen)

Remuneration foraudit and attestation
service(Millions of yen)

Remuneration for nonaudit services(Millions of yen)

Reporting company

92

–

91

–

Consolidated
subsidiaries

–

–

–

–

Total

92

–

91

–

･ Details of non-audit services performed by the auditing certified public accountants, etc. for the reporting
company
Not applicable.
b.

Remuneration for KPMG member firms belonging to the same network as the auditing certified public
accountants, etc. (excluding a.)
Fiscal year ended December 31, 2021

Category

Reporting company

Remuneration foraudit and attestation
service(Millions of yen)

Fiscal year ended December 31, 2022

Remuneration for nonaudit services(Millions of yen)

Remuneration foraudit and attestation
service(Millions of yen)

Remuneration for nonaudit services(Millions of yen)

–

17

–

51

Consolidated
subsidiaries

141

3

153

9

Total

141

20

153

60

･ Details of non-audit services performed by KPMG member firms belonging to the same network as the auditing
certified public accountants, etc. for the Company
Non-audit services for the fiscal year ended December 31, 2021 mainly consisted of tax advisory services. Nonaudit services for the fiscal year ended December 31, 2022 mainly consisted of advisory services in relation tocorporate governance and risk management.
･ Details of non-audit services performed by KPMG member firms belonging to the same network as the auditing
certified public accountants, etc. for consolidated subsidiaries
Non-audit services for the fiscal years ended December 31, 2021 and 2022 mainly consisted of tax advisory
services for foreign subsidiaries.
c.

Remuneration for other significant audit and attestation service
Not applicable.

d.

Policy for determining audit remuneration
The Company appropriately determines audit remuneration with the consent of the Audit & Supervisory
Board after taking into account factors such as the number of days to complete audits, the Company’s size andthe special nature of its businesses.

e.

Reasons for the consent of the Audit & Supervisory Board to audit remuneration
As a result of obtaining necessary materials and receiving reports from Directors, relevant in-house
departments and the Accounting Auditor, and conducting necessary verifications as to whether the content of
the Accounting Auditor’s audit plan, performance of duties of accounting audit, basis for calculating estimatesfor remuneration and other factors are appropriate, the Audit & Supervisory Board has considered that the
Accounting Auditor secured necessary auditing system and audit time and the level is reasonable for
implementing appropriate audits, and therefore consented to remuneration, etc. for the Accounting Auditor.

- 79 -

(4) Officers’ remuneration, etc.
(i) Matters related to the policy on determining the amount of officers’ remuneration, etc. or the method for
calculation thereof･ At the Board of Directors meeting held on February 18, 2021, the Company resolved the policy on determining
details of individual remuneration, etc. for Directors. This determination policy is based on the proposal forwhich a report was received following deliberation by the Nomination & Remuneration Consultative Committee.
In addition, the Nomination & Remuneration Consultative Committee confirmed and reported that individual
remuneration, etc. for Directors for the fiscal year ended December 31, 2022 was in line with the determination
policy. Respecting the report from the Nomination & Remuneration Consultative Committee, the Board of
Directors concluded that the details of the remuneration, etc. was in line with the determination policy.
Individual remuneration, etc. for Audit & Supervisory Board Members for the fiscal year ended December 31,
2022 was determined in consultation with Audit & Supervisory Board Members with reference to deliberations of
the Nomination & Remuneration Consultative Committee.
The determination policy for the details of individual remuneration, etc. for Directors and Audit & Supervisory
Board Members is as follows:
1. Basic policy･ Basically, remuneration for the Company’s Directors and Audit & Supervisory Board Members is paid for the
purposes of raising their awareness of contributing to the Company’s sustainable growth and further increase incorporate value, securing human resources appropriate for a global specialty pharmaceutical company, andmotivating them to contribute to the Company through execution of their duties; and remuneration should bedetermined through a transparent and appropriate process by adopting an objective viewpoint.
In order to realize this basic policy, investigations and deliberations regarding officers’ remuneration are
conducted by the Nomination & Remuneration Consultative Committee, which consists of a majority of
independent outside officers and is chaired by an independent Outside Director.
2. Remuneration structure･ The Company’s remuneration for Executive directors consists of three parts: (1) base compensation in a fixedamount, (2) performance-linked annual bonus as a short-term incentive, and (3) share-based remuneration as a
mid- to long-term incentive. Non-executive directors and Audit & Supervisory Board Members are provided with
only base compensation in a fixed amount or no remuneration in order to ensure that they fully perform theirsupervisory function over management from an objective and independent standpoint.
3. Basic remuneration･ Basic remuneration is paid monthly in a fixed amount based on each officer’s position or job responsibilities.
Amounts are determined by considering the company size, and by using data from officers’ remuneration survey
obtained from an external research institution to conduct an objective comparison/examination of remunerationlevels or remuneration structures, etc. of other companies in industry sectors relevant to the Company. The final
decision is made after deliberations of the Nomination & Remuneration Consultative Committee. Remuneration
for Audit & Supervisory Board Members is determined in consultation with Audit & Supervisory Board Members
taking reference from deliberations of the Nomination & Remuneration Consultative Committee, which uses
data from officers’ remuneration survey obtained from an external research institution.
4. Performance-linked annual bonus･ Performance-linked annual bonus is monetary compensation, where amounts change according to businessperformance for the purpose of increasing Executive directors’ willingness to contribute to improving businessperformance in each fiscal year. The amounts are calculated according to the degree of achievement against
targets of performance evaluation indicators set for the applicable fiscal year, and paid to Executive directors at
a certain point of time, normally in April, every year. Amounts of performance-linked annual bonus, which arecalculated according to performance evaluation indicators, targets, and the degree of achieving the targets, aredetermined after deliberations of the Nomination & Remuneration Consultative Committee.
･ For performance evaluation indicators for the fiscal year ended December 31, 2022, we have set revenue fromthe perspective of growth potential and profit from the perspective of profitability in order to share value with ourshareholders and sustainably increase corporate value of the Company. For each of them, the targets werebased on business forecasts for 2022 at the time of the announcement of the financial results, and the pay rate(from 0% to 200%) was determined according to the degree of achievement. Targets and results of eachfinancial performance indicator are as follows:
Targets and results of financial performance indicators related to performance-linked annual bonus
Financial performance indicators

Targets(announced on February 7, 2022)

Results

Revenue¥380.0 billion¥398.4 billion

Profit¥53.0 billion¥53.6 billion- 80 -

5. Share-based remuneration･ Share-based remuneration consists of two components: a restricted stock compensation plan and aperformance-linked share-based remuneration plan (Performance Share Unit).
･ The restricted stock compensation plan is intended for Executive directors to share benefits and risks of shareprice fluctuations with shareholders, and to become more motivated to contribute to an increase in share priceand corporate value. Such shares are subject to a transfer restriction period, and allotted to Executive directors
at a certain point of time, normally in April, every year in accordance with a resolution of the Board of Directors.
The transfer restriction period is three years.
･ The performance-linked share-based remuneration plan is intended to clarify the linkage between Executive
directors’ remuneration and the Company’s business performance, and share price, and thereby provide themwith incentives for achieving the Medium Term Business Plan and sustainable growth of corporate value, as wellas to facilitate their sense of sharing value with shareholders. The performance evaluation period is threeconsecutive fiscal years, and pay rates vary depending on the achievement of performance targets. At the
beginning of a performance evaluation period, the “standard number of shares to be delivered” is determined byresolution of the Board of Directors. After the end of the performance evaluation period for three fiscal years, the“standard number of shares to be delivered” is multiplied by the level of achievement of performance targets in
the range of 0% to 150%, and approximately one-half thereof is delivered as shares and the remaining one-half
is paid in cash to the eligible Executive directors at a certain point of time, normally in April, every year.
Performance evaluation indicators are ROE, annual average growth rate of revenue and core operating profit
margin, which are the indicators used in the Medium Term Business Plan. The degree of achievement of
performance targets is calculated in accordance with the degree of achieving each target.
FY2021–2025 Medium Term Business Plan financial performance indicators (numerical guidance)
ROE

10% or higher (achieve target early / increase over the medium- to long-term)

Revenue growth ratio

CAGR 10% or higher (average growth rate over a five-year period, with fiscal
2020 as the base year)

R&D expense ratio

Targeting 18-20% to support active investment

Core operating profit ratio

25% or higher (fiscal 2025)

Dividend payout ratio

Targeting sustained dividend hikes with 40% (dividend payout ratio based oncore EPS)

6. Remuneration composition ratio･ The ratio for Directors’ basic remuneration, performance-linked annual bonus for Executive directors, and sharebased remuneration is deliberated by the Nomination & Remuneration Consultative Committee in light of each
Director’s position and determined by the Board of Directors by taking into account the company size, and byusing data from officers’ remuneration survey obtained from an external research institution to conduct anobjective comparison/examination of remuneration levels or remuneration structures of other companies inindustry sectors relevant to the Company.
･ A rough indication for the ratio for the types of remuneration, etc. for Executive directors is presented as “basic
remuneration: performance-linked annual bonus: share-based remuneration” and will be [1: about 0.4 to 0.5:
about 0.6 to 0.8] (if performance targets are achieved at 100%, the ratio will be presented as “fixed
remuneration: variable remuneration” and will be [1: about 1 to 1.2]).
7. Procedures for determining remuneration･ With respect to the remuneration table showing directors’ basic remuneration and performance-linked annual
bonus by position and other related matters, the Board of Directors makes decisions, based on deliberations
and reports of the Nomination and Remuneration Consultative Committee, which consists of a majority of
independent outside officers and is chaired by independent Outside Director Mr. Jun Arai. On that basis, theamounts of basic remuneration and performance-linked annual bonus for individual Directors to be paid aredetermined by Mr. Masashi Miyamoto, Representative Director, President and Chief Executive Officer, who has
been entrusted by the Board of Directors to realize efficient operation of the Board of Directors, within the
remuneration limit resolved at the General Meeting of Shareholders, in line with the deliberations by the
Nomination & Remuneration Consultative Committee. The allocation and delivery of share-based remuneration
on an individual basis shall be decided by the Board of Directors based on deliberations and reports of theNomination & Remuneration Consultative Committee. As for remuneration for Executive directors, in case there
is any illegal conduct or violation of law, etc., the Company shall be able to demand the return of remuneration
through deliberations by the Nomination & Remuneration Consultative Committee (clawback provision in 10.
below).
･ Individual remuneration, etc. for Audit & Supervisory Board Members is determined in consultation with Audit &Supervisory Board Members within the remuneration limit resolved at the General Meeting of Shareholders,taking reference from deliberations of the Nomination & Remuneration Consultative Committee, which uses
data from officers’ remuneration survey obtained from an external research institution.
- 81 -

8. Details of resolutions for remuneration, etc. at the General Meeting of Shareholders･ It was approved at the 98th Ordinary General Meeting of Shareholders held on March 24, 2021 that the total
amount of monetary remuneration including basic remuneration and performance-linked annual bonus for
Directors shall be within ¥600 million per year (part of which is allotted to Outside Directors within ¥100 million).
As of the conclusion of this Ordinary General Meeting of Shareholders, the number of eligible Directors wasseven (including four Outside Directors). Furthermore, in addition to the foregoing, it was approved, at the 97th
Ordinary General Meeting of Shareholders held on March 19, 2020, that the total amount of monetary
remuneration receivables provided as remuneration, etc. linked to restricted shares shall be no more than ¥155
million per year, and at the 98th Ordinary General Meeting of Shareholders held on March 24, 2021, that theamount of remuneration under performance-linked share-based remuneration plan (Performance Share Unit)
shall be no more than ¥300 million per each applicable period, and the total number of the Company’s sharesallotted per each applicable period shall be no more than 200,000 shares. As of the conclusion of the 97th and98th Ordinary General Meetings of Shareholders, the number of eligible Directors was three each.
･ It was approved at the Extraordinary General Meeting of Shareholders held on February 29, 2008 that the upper
limit of remuneration for Audit & Supervisory Board Members shall be ¥9 million per month. As of the conclusionof this Extraordinary General Meetings of Shareholders, the number of eligible Audit & Supervisory Board
Members was four.
9. Activities carried out by the Nomination & Remuneration Consultative Committee and the Board of Directors･ The Company’s remuneration for officers and basic policy thereof are deliberated by the Nomination &Remuneration Consultative Committee, which consists of a majority of independent outside officers and ischaired by an independent Outside Director.
･ As at the end of the fiscal year ended December 31, 2022, the Nomination & Remuneration Consultative
Committee consisted of three internal Directors and seven independent outside officers.
･ During the fiscal year ended December 31, 2022, a total of 16 Nomination & Remuneration Consultative
Committee meetings were held. For Directors and Executive Officers as well as major global positions, thebasis for calculating performance-linked bonuses, verification of officers’ remuneration level, long-term
incentive, etc. were deliberated.
10. Clawback provision･ With respect to remuneration for Executive directors and Executive Officers, the Company has established aclawback provision under which the Company may demand the return of remuneration through deliberations by
the Nomination & Remuneration Consultative Committee, if there is any illegal act or violation of laws, etc.

- 82 -

(ii) Total amount of remuneration, etc. for the fiscal year ended December 31, 2022

Title

Total amount of remuneration by type (Millions of yen)
Total amount of
Performanceremuneration,
Number of
PerformanceRestricted
linkedetc.
Basiclinked annual
stock
share-based eligible officers(Millions of(Persons)
remuneration
bonus
compensation remunerationyen)(Note 2)
(Notes 2 and 3)(PSU)(Note 2)

Directors(excluding Outside
Directors)
Audit & Supervisory
Board Members(excluding Outside Audit& Supervisory Board
Members)

383

183

94

64

42

3

29

29

–

–

–

1

Outside Directors

84

84

–

–

–

5

Outside Audit &Supervisory Board
Members

62

62

–

–

–

4

Notes:

1. The above figures include one Outside Audit & Supervisory Board Member who retired at the conclusion of
the Ordinary General Meeting of Shareholders in the previous fiscal year.
2. All the amounts of performance-linked annual bonus, restricted stock compensation and performance-linked
share-based remuneration are the amounts recorded as expenses during the fiscal year ended December
31, 2022. Performance-linked share-based remuneration is paid and delivered in the form of monetary andnon-monetary compensation after the elapse of the performance evaluation period.
3. The number of restricted shares delivered to Executive directors during the fiscal year ended December 31,
2022 was 20,397 shares (paid-in amount per share was ¥3,140, the closing price on March 24, 2022).
4. The above figures do not include two Directors and one Audit & Supervisory Board Member to whom no
remuneration was paid.
(iii) Total amount of consolidated remuneration, etc. by officer of the reporting company
Total amount of consolidated remuneration by type (Millions ofyen)
PerformanceCompany
linkedPerformanceName (title)
Restrictedcategory
Basicshare-based
stocklinked annual
remunerationcompensation remuneration
bonus
(PSU)

Total amount ofconsolidated
remuneration(Millions of yen)

Masashi Miyamoto
Reporting(Director of the Board) company

83

46

29

24

183

Yutaka Osawa
Reporting(Director of the Board) company

53

25

18

9

106

Notes:

1. Basic remuneration, performance-linked annual bonus, restricted stock compensation, and performancelinked share-based remuneration are the same as in (Note 2) of “(ii) Total amount of remuneration, etc. forthe fiscal year ended December 31, 2022.”
2. Only the person for whom the total amount of consolidated remuneration, etc. is ¥100 million or more isshown.

- 83 -

(5) Shareholdings(i) Standard and policy on classification of investment sharesWith respect to investment shares held for pure investment and investment shares held for purposes other thanpure investment, the Company classifies investment shares held solely for the purpose of benefitting from thechange in share price or dividends on shares as shares held for pure investment, and shares that are consideredon a policy-driven basis to contribute to an increase in corporate value over the medium- to long-term as
investment shares held for purposes other than pure investment.
(ii) Investment shares held for purposes other than pure investment
a. Policy on shareholding, method to verify the reasonableness of shareholding, and the details of verification at
the Board of Directors, etc. regarding the propriety of holding individual issues
The Company has stipulated cross-shareholdings in “Kyowa Kirin Co., Ltd. Corporate Governance Policy” asfollows:･ The Company does not engage in cross-shareholdings with other companies unless it determines that suchcross-shareholdings are useful for promoting the Group’s sustainable growth and an increase its corporate
value over the medium- to long-term.
･ The Board of Directors verifies the reasonableness of the individual cross-shareholdings on a yearly basis. If theBoard determines that the reasonableness of any cross-shareholding has weakened, the Company will discussand negotiate with the cross-shareholding partner about reducing or eliminating the cross-shareholding.
b. Number of issues and balance sheet amount
Number ofissuesTotal balance sheet amount(Millions of yen)

Unlisted shares

6

2,975

Shares other thanunlisted shares

2

1,118

(Issues whose number of shares increased during the fiscal year ended December 31, 2022)
Total acquisition cost for
Number ofincreased shares
Reason for increase in number of sharesissues(Millions of yen)
Due to Corporate Venture Capital (CVC)
Unlisted shares
2
1,405
investment activities
Shares other thanunlisted shares

–

–

–

(Issues whose number of shares decreased during the fiscal year ended December 31, 2022)
Total sale amount for
Number of
decreased sharesissues(Millions of yen)
Unlisted shares––

Shares other than those
not listed

4

3,191

- 84 -

c.

Information on number of shares, balance sheet amount, etc. by issue of specified investment shares anddeemed holdings of shares
Specified investment sharesFiscal year ended Fiscal year ended
December 31, 2022 December 31, 2021 Purpose of shareholding, quantitative
Whether the
Number of shares Number of shareseffects of shareholding
investee holds
Issues(Shares)(Shares)and reason for the increase in the number
the Company’sof shares
Balance sheet
Balance sheet
shares(Note)
amountamount(Millions of yen)
(Millions of yen)
2,873,563

2,873,563

1,087

364

52,00052,00032

35–460,691

–

1,529

–

602,988

–

1,299

–

93,500–143–

41,837–73

Ardelyx, Inc.
HOKUYAKU
TAKEYAMA
Holdings,Inc.

SUZUKEN CO.,LTD.

MEDIPALHOLDINGSCORPORATION

Alfresa Holdings
Corporation

TOHO HOLDINGS
CO., LTD.

Note:

To strengthen a business partnershipNo

To maintain a smooth business
relationship in sales of pharmaceuticalproducts, etc.

Yes

The Company held the shares for the
purpose of maintaining a smoothbusiness relationship in sales ofpharmaceutical products, etc., but sold
all the shares in the fiscal year ended
December 31, 2022.

Yes

The Company held the shares for the
purpose of maintaining a smoothbusiness relationship in sales ofpharmaceutical products, etc., but sold
all the shares in the fiscal year ended
December 31, 2022.

No

The Company held the shares for the
purpose of maintaining a smoothbusiness relationship in sales ofpharmaceutical products, etc., but sold
all the shares in the fiscal year ended
December 31, 2022.

No

The Company held the shares for the
purpose of maintaining a smoothbusiness relationship in sales ofpharmaceutical products, etc., but sold
all the shares in the fiscal year ended
December 31, 2022.

No

Although it is difficult to state the quantitative effects of shareholding, the Board of Directors has verified thereasonableness of the shareholdings as for the Company’s cross-shareholdings, comprehensively taking into
account strategic importance, business relationships and other factors in addition to dividends, transaction
amount, etc.
Deemed holdings of shares
Not applicable.
(iii) Investment shares held for pure investment
Not applicable.

- 85 -

V. Financial Information
1. Methods of preparing consolidated financial statements and financial statements(1) The consolidated financial statements of the Company have been prepared in accordance with the International
Accounting Standards (“IFRS”) pursuant to the provision of Article 93 of the “Regulation on Terminology, Forms
and Preparation Methods of Consolidated Financial Statements” (Ministry of Finance Order No. 28 of 1976).
All yen amounts presented in the consolidated financial statements, etc. have been rounded to the nearest million.
(2) The financial statements of the Company have been prepared in accordance with the “Regulation on Terminology,
Forms, and Preparation Methods of Financial Statements” (Ministry of Finance Order No. 59 of 1963; the“Regulation on Financial Statements”).
In addition, the Company falls under the category of special companies submitting financial statements and has
prepared the financial statements pursuant to Article 127 of the Regulation on Financial Statements.
All yen amounts presented in the financial statements, etc. have been rounded to the nearest million.

2. Note on independent audit
The consolidated financial statements and the financial statements for the fiscal year ended December 31, 2022
(from January 1, 2022 to December 31, 2022) were audited by KPMG AZSA LLC in accordance with the provision of
Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act of Japan.

3. Special efforts to ensure the appropriateness of the consolidated financial statements, etc. andestablishment of a system under which the consolidated financial statements, etc. can be preparedin an appropriate manner under IFRSThe Company has been making special efforts to ensure the appropriateness of the consolidated financial
statements, etc. and establishing a system under which the consolidated financial statements, etc. can be prepared in
an appropriate manner under IFRS. The details are as follows:(1) To establish a system that enables the proper understanding of the contents of accounting standards, etc. andthe appropriate responses to any changes in accounting standards, etc., the Company has been membership of
the Financial Accounting Standards Foundation and has taken training sessions hosted by the foundation, theCompany’s independent auditor, etc.
(2) For the application of IFRS, the Company has timely obtained press releases and standards issued by theInternational Accounting Standards Board to understand the latest standards. In addition, to prepare appropriate
consolidated financial statements under IFRS, the Company has developed the Group’s accounting policies
based on IFRS and performs accounting procedures in accordance with the policies.

- 86 -

1

Consolidated Financial Statements, Etc.
(1) Consolidated financial statements(i) Consolidated statement of financial position(Millions of yen)
As ofDecember 31, 2021

Notes
AssetsNon-current assets
Property, plant and equipment
Goodwill
Intangible assets
Other financial assets
Retirement benefit asset
Deferred tax assets
Other non-current assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Other financial assets
Other current assets
Cash and cash equivalents

6
7
7
9
17
10

11
12
9
13,31

Subtotal
Assets held for sale

14

Total current assets
Total assets- 87 -

As ofDecember 31, 2022

78,652
136,352
76,06645,164
15,29849,1083,000

89,099135,761
64,78636,531
15,212
52,946
3,357

403,641

397,692

64,089104,275
1,434
13,350335,084

70,675
111,746526
14,094
339,194518,231536,235–

5,955

518,231

542,189

921,872

939,881(Millions of yen)
As ofDecember 31, 2021

Notes
EquityShare capital
Capital surplus
Treasury shares
Retained earnings
Other components of equity
Total equity attributable to owners of parent
Total equity
Liabilities
Non-current liabilities
Liabilities from application of equity method
Retirement benefit liability
Provisions
Deferred tax liabilities
Other financial liabilities
Other non-current liabilities

15
15
15
15
15

26,745464,153(3,359)255,528(5,904)

26,745
464,434(3,177)285,842(11,018)15

737,162

762,826

737,162

762,826

19,426
221
7,757
386
16,594
31,197

15,529
287
7,532
404
17,54925,92975,581

67,22964,652
1,580
5,943
13,42623,52870,922
2,966
5,729
1,582
28,627

109,129

109,825

184,710

177,055

921,872

939,881

8
17
18
10
19
21

Total non-current liabilities
Current liabilities
Trade and other payables
Provisions
Other financial liabilities
Income taxes payable
Other current liabilities

As ofDecember 31, 2022

22
18
19
21

Total current liabilities
Total liabilities
Total equity and liabilities- 88 -

(ii) Consolidated statement of profit or loss
(Millions of yen)
Notes
Revenue
Cost of sales
Gross profit
Selling, general and administrative expenses
Research and development expenses
Share of profit (loss) of investments accounted forusing equity method
Other income
Other expenses
Finance income
Finance costs
Profit before tax
Income tax expense

Fiscal year ended
December 31, 2021

5,23
11

352,246(87,849)

398,371(86,915)24

264,398(145,608)(57,679)

311,455(166,185)(62,896)

4,575

4,323

25
25
26
26

985
(6,616)
1,113(1,117)

1,705(23,061)
3,319(1,088)10

60,050(7,703)67,572(14,000)

52,34753,57352,34753,573

97.43
97.39

99.68
99.66

ProfitProfit attributable to
Owners of parent
Earnings per share
Basic earnings per share (Yen)
Diluted earnings per share (Yen)

Fiscal year ended
December 31, 2022

27
27

- 89 -

(iii) Consolidated statement of comprehensive income(Millions of yen)
Notes

Fiscal year ended
December 31, 2021

ProfitOther comprehensive income
Items that will not be reclassified to profit or
loss
Financial assets measured at fair value
through other comprehensive income
Remeasurements of defined benefit plans

52,34753,57328(1,623)

1,068

28

1,411

961

(212)

2,029

28

10,498(5,068)

28

118

121

10,616(4,948)

Total of items that will not be reclassified to
profit or loss
Items that may be reclassified to profit or loss
Exchange differences on translation offoreign operations
Share of other comprehensive income ofinvestments accounted for using equity
methodFiscal year ended
December 31, 2022

Total of items that may be reclassified to
profit or loss

10,404(2,918)Comprehensive income

Other comprehensive income

62,75150,654Comprehensive income attributable to
Owners of parent

62,75150,654- 90 -

(iv) Consolidated statement of changes in equity
Fiscal year ended December 31, 2021
(Millions of yen)

Notes

Balance at January 1, 2021

Share capital

Equity attributable to owners of parent
Other components ofequityExchange
CapitalTreasury
Retaineddifferences
Share
surplussharesearnings
onacquisitiontranslationrightsof foreign
operations

26,745463,967(3,545)

226,639

Profit–––52,347––

Other comprehensive income

–

–

–

–

–

10,616–––52,347–

10,616

Total comprehensive income

596(17,915)

Dividends of surplus

15

–

–

–

(24,176)––

Purchase of treasury shares

15

–

–

(23)

–

–

–

Disposal of treasury shares

15

–

61

121

–

–

–

Share-based remunerationtransactions

16

–

126

88

–

(181)

–

Transfer from othercomponents of equity toretained earnings

–

–

–

717

–

–

Total transactions with owners

–

187

186

(23,459)(181)–

Balance at December 31, 2021

26,745464,153(3,359)255,528414(7,299)Equity attributable to owners of parent
Other components of equity
Financialassets
Notes measured at Remeasurements offair value
definedTotal
through
benefitotherplanscomprehensive income
Balance at January 1, 2021
ProfitOther comprehensive income
Total comprehensive income

Total equity

Total

1,909

–

(15,410)698,396698,396–––

52,34752,347(1,623)

1,411

10,404

10,404

10,404(1,623)

1,411

10,40462,75162,751Dividends of surplus

15

–

–

–

(24,176)(24,176)

Purchase of treasury shares

15

–

–

–

(23)

(23)

Disposal of treasury shares

15

–

–

–

182

182

16

–

–

(181)

32

32

694

(1,411)

(717)

–

–

Total transactions with owners

694(1,411)(898)(23,985)(23,985)

Balance at December 31, 2021

980–

(5,904)

737,162

737,162

Share-based remunerationtransactions
Transfer from othercomponents of equity toretained earnings- 91 -

Fiscal year ended December 31, 2022
(Millions of yen)

Notes

Balance at January 1, 2022

Share capital

Equity attributable to owners of parent
Other components ofequityExchange
CapitalTreasury
Retaineddifferences
Share
surplussharesearnings
onacquisitiontranslationrightsof foreign
operations

26,745464,153(3,359)255,528414(7,299)Profit–––53,573––

Other comprehensive income

–

–

–

–

–

(4,948)–––53,573–(4,948)–––(25,258)––

Total comprehensive income
Dividends of surplus

15

Purchase of treasury shares

15

–

–

(11)

–

–

–

Disposal of treasury shares

15

–

(35)

118

–

–

–

16

–

315

76

–

(196)

–

–

–

–

2,000

–

–

Total transactions with owners

–

281

183

(23,258)(196)–

Balance at December 31, 2022

26,745

464,434(3,177)285,842219(12,247)

Share-based remunerationtransactions
Transfer from othercomponents of equity toretained earnings

Equity attributable to owners of parent
Other components of equity
Financialassets
Notes measured at Remeasurements offair value
definedTotal
through
benefitotherplanscomprehensive income
Balance at January 1, 2022

980

ProfitOther comprehensive income
Total comprehensive income–

Total equity

Total(5,904)

737,162

737,162–––

53,57353,573

1,068

961(2,918)(2,918)(2,918)

1,068

961

(2,918)50,65450,654

Dividends of surplus

15

–

–

–

(25,258)(25,258)

Purchase of treasury shares

15

–

–

–

(11)

(11)

Disposal of treasury shares

15

–

–

–

83

83

16

–

–

(196)

195

195

(1,038)(961)(2,000)––Total transactions with owners(1,038)(961)(2,195)(24,990)(24,990)

Balance at December 31, 2022

1,010

–

(11,018)

762,826

762,826

Share-based remunerationtransactions
Transfer from othercomponents of equity toretained earnings- 92 -

(v) Consolidated statement of cash flows(Millions of yen)
Notes
Cash flows from operating activities
Profit before tax
Depreciation and amortization
Impairment losses
Increase (decrease) in provisions
Share of loss (profit) of investments accounted
for using equity method
Decrease (increase) in inventories
Decrease (increase) in trade receivables
Increase (decrease) in trade payables
Increase (decrease) in contract liabilities
Income taxes paid
Other

Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

60,05019,4985,286(608)

67,572
18,476
17,9791,570(4,575)(4,323)(8,280)(5,901)(126)
38,767(14,838)(2,727)(8,896)(2,704)(5,867)(7,321)(22,559)(5,255)86,54848,672(6,522)(13,244)(15,564)(13,102)

5,097

–

(315)
1,914

(1,908)
3,687

–

4,229

1,500

4,000

208

1,473

(11,363)(17,185)(3,475)(23)(24,176)(771)(3,767)(11)(25,258)
3

Net cash provided by (used in) financing
activities(28,446)(29,032)

Effect of exchange rate changes on cash andcash equivalents

1,325

1,655

Net increase (decrease) in cash and cash
equivalents

48,065

4,111

Cash and cash equivalents at beginning of period(Amount on the consolidated statement offinancial position)

287,019

335,084

Cash and cash equivalents at beginning of period 13,31

287,019

335,084

Cash and cash equivalents at end of period

335,084

339,1946, 7

29

Net cash provided by (used in) operating
activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of investments accounted
for using equity method
Purchase of investment securities
Proceeds from sale of investment securities
Advance receipt from sale of investment
securities
Proceeds from redemption of bonds ofsubsidiaries and associates
Other

14

Net cash provided by (used in) investing
activities
Cash flows from financing activities
Repayments of lease liabilities
Purchase of treasury shares
Dividends paid
Other

29
15

13,31

- 93 -

Notes to consolidated financial statements
1. Reporting entity
Kyowa Kirin Co., Ltd. (the “Company”) is a stock company incorporated under the Companies Act of Japanand located in Japan. The ultimate parent company of the Company and its subsidiaries (the “Group”) is Kirin
Holdings Company, Limited. The address of the Company’s registered corporate headquarters is Chiyoda-ku,
Tokyo. The consolidated financial statements of the Group as of and for the fiscal year ended December 31,
2022 comprise the accounts of the Company and its subsidiaries. Investments in associates and joint ventures
have been accounted for by the equity method.
A description of the nature of the Group’s operations and its principal activities are disclosed in Note “5.
Operating segments.”
2.

Basis of preparation(1) Compliance with IFRSThe consolidated financial statements of the Group have been prepared in accordance with IFRS as issued
by the International Accounting Standards Board. Since the Company satisfies the requirements for a“specified company complying with any designated international accounting standards” as set forth in Article
1-2 of the “Regulation on Terminology, Forms and Preparation Methods of Consolidated Financial
Statements” (Ministry of Finance Order No. 28 of 1976), the Company has applied the provision of Article 93of the regulation.
(2) Authorization of financial statements
The consolidated financial statements of the Group were authorized for issue at the Board of Directors
meeting held on March 9, 2023.
(3) Basis of measurement
The consolidated financial statements of the Group have been prepared on a historical cost basis, except for
specific financial instruments and other assets measured at fair value, as stated in Note “3. Significant
accounting policies.”(4) Functional currency and presentation currency
The Group’s consolidated financial statements are presented in Japanese yen, which is the Company’sfunctional currency, and all amounts have been rounded to the nearest million, unless otherwise indicated.
(5) Accounting judgments, estimates and assumptions
In preparing consolidated financial statements in accordance with IFRS, the management is required tomake judgments, estimates and assumptions that can affect the application of accounting policies and theamounts of assets, liabilities, revenue and expenses. Actual results may differ from such estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change in an
accounting estimate is recognized in the period of the change and future periods.
The following are the management’s judgments and estimates that can significantly affect the amounts in the
consolidated financial statements.
(i)

Impairment of in-process research and development
In-process research and development mainly represents intangible assets that were acquired as part of inlicensing agreements for products, development products, technologies, etc. and that are in the researchand development stage and have not yet been approved for sale by regulatory authorities.
The Group performs an impairment test for in-process research and development on an individual asset
basis annually (during the fourth quarter) and whenever there is an indication that the asset may be
impaired. The recoverable amount for impairment testing purposes is primarily determined based on value
in use. In measuring value in use, estimates are used for the aggregate development costs, the probabilityof successful development, future sales projections, etc. of the product under research and development.
Changes in these estimates may have significant impacts on the consolidated financial statements for the
fiscal year ending December 31, 2023. The Group recorded in-process research and development in the
consolidated financial statements of ¥40,415 million as of December 31, 2021, and ¥33,248 million as of- 94 -

December 31, 2022.
(ii) Impairment of marketing rights
The Group performs an impairment test for marketing rights for pharmaceuticals on an individual asset
basis whenever there is an indication that the asset may be impaired. The recoverable amount for
impairment testing purposes is primarily determined based on value in use. In measuring value in use,estimates are used for future sales projections, etc. of the product. Changes in these estimates may havesignificant impacts on the consolidated financial statements for the fiscal year ending December 31, 2022.
The Group recorded marketing rights in the consolidated financial statements of ¥29,733 million as ofDecember 31, 2021, and ¥24,698 million as of December 31, 2022.
The potential impacts of COVID-19 on the Group’s business performance and financial position are statedas in “II. Overview of Business, 2 Business Risk Factors, 4. Business risks.” The Group assumed that suchimpacts would be limited in respect of accounting estimates.
(6) Changes in presentation
Consolidated statement of cash flows“Purchase of investment securities” and “Proceeds from redemption of bonds of subsidiaries andassociates,” which had previously been included in “Other” of “Cash flows from investing activities” in thefiscal year ended December 31, 2021, has been presented separately because its monetary importance has
increased. To reflect this change in the presentation method, we have reclassified the amount in ourconsolidated financial statements for the fiscal year ended December 31, 2021.
As a result, in the consolidated statement of cash flows for the fiscal year ended December 31, 2021, ¥1,393
million presented as “Other” in “Cash flows from investing activities” was reclassified as “Purchase ofinvestment securities” of ¥(315) million, “Proceeds from redemption of bonds of subsidiaries and associates”
of ¥1,500 million and “Other” of ¥208 million.

- 95 -

3.

Significant accounting policies(1) Basis of consolidation(i) Subsidiaries
A subsidiary is an entity controlled by the Group. The Group considers that it controls an entity when it is
exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affectthose returns through its power over the entity.
The financial statements of a subsidiary are included in the consolidated financial statements from thedate the Group obtains control of the subsidiary until the date the Group loses control of the subsidiary.
If any accounting policies applied by a subsidiary differ from those applied by the Group, adjustments are
made to the subsidiary’s financial statements where needed. Intercompany balances of receivables andpayables, and transactions, and unrealized gains and losses arising from intercompany transactions are
eliminated in preparing the consolidated financial statements.
Partial disposal of the Group’s ownership interest in a subsidiary that does not result in the Group losing
control of the subsidiary is accounted for as an equity transaction.
If the Group loses control of a subsidiary, it recognizes the gain or loss associated with the loss of control
in profit or loss.
(ii) Associates
An associate is an entity over whose financial and operating policies the Group has significant influence,but not control or joint control. If the Group holds between 20% and 50% of the voting power of anotherentity, it is presumed that the Group has significant influence over the entity.
Associates are accounted for using the equity method.
Unrealized gains arising from transactions with associates are eliminated against the investment to theextent of the Group’s interest in the investee.
(iii) Joint arrangements
A joint arrangement is a contractual arrangement of which two or more parties have joint control.
The Group classifies its involvement with a joint arrangement as a joint operation (when the Group hasrights to the assets, and obligations for the liabilities, relating to the arrangement) or a joint venture (whenthe Group has rights to the net assets of the arrangement) depending upon the rights and obligations of
the parties to the arrangement.
Joint ventures are accounted for using the equity method.
Unrealized gains arising from transactions with joint ventures are eliminated against the investment to theextent of the Group’s interest in the investee.
(iv) Business combinations
Business combinations are accounted for using the acquisition method. The acquiree’s identifiable assets
and liabilities are measured at their acquisition-date fair values. The consideration transferred is measured
as the sum of the acquisition-date fair values of the assets transferred, the liabilities assumed and theequity instruments issued by the Company in exchange for control of an acquiree. Any excess of theconsideration over the fair value of net identifiable assets and liabilities of the acquiree is recognized as
goodwill in the consolidated statement of financial position. If the consideration is below the fair value ofnet identifiable assets and liabilities, the difference is immediately recognized as income in the
consolidated statement of profit or loss.
Costs incurred in connection with business combinations, such as finder’s fees, attorney’s fees and due
diligence costs, are expensed in the periods in which the costs are incurred.
(2) Foreign currency translation(i) Foreign currency transactions
Transactions in foreign currencies are translated into the functional currency at the spot exchange rates atthe dates of the transactions or an approximation thereof.
Foreign currency monetary assets and liabilities at the end of the fiscal year are translated into thefunctional currency using the spot exchange rates at the end of the fiscal year. Foreign currency nonmonetary assets and liabilities that are measured at fair value are translated into the functional currency- 96 -

using the spot exchange rates at the date when the fair value was measured.
Exchange differences arising from translation and settlement are recognized in profit or loss. For financial
assets measured at fair value through other comprehensive income, however, such differences arerecognized in other comprehensive income. Foreign currency non-monetary items that are measured interms of historical cost continue to be translated using the spot exchange rates at the dates of thetransactions or an approximation thereof.
(ii) Financial statements of foreign operations
Assets and liabilities of foreign operations are translated into Japanese yen using the spot exchange rates
at the end of the fiscal year, whereas income and expenses are translated into Japanese yen using therate that approximates the exchange rates at the dates of the transactions. Exchange differences arisingon translating the financial statements of foreign operations are recognized in other comprehensive
income. Exchange differences arising from the translation of foreign operations are recognized in profit orloss in the period in which the foreign operations are disposed of.
(3) Financial instruments(i) Financial assets (excluding derivatives)
1) Initial recognition and measurement
The Group classifies its financial assets as measured at fair value through profit or loss, fair value
through other comprehensive income, or amortized cost. This classification is determined at the initialrecognition.
The Group initially recognizes financial assets measured at amortized cost on the trade date andother financial assets on the settlement date.
All financial assets, except for those classified as measured at fair value through profit or loss, aremeasured at fair value plus transaction costs that are directly attributable to the acquisition of thefinancial assets. However, trade receivables that do not contain a significant financing component are
determined at their transaction price.
Financial assets are classified as financial assets measured at amortized cost if both of the following
conditions are met:
･ the financial asset is held within a business model whose objective is to hold financial assets inorder to collect contractual cash flows; and･ the contractual terms of the financial asset give rise on specified dates to cash flows that aresolely payments of principal and interest on the principal amount outstanding.
Financial assets other than those measured at amortized cost are classified as financial assets
measured at fair value.
For equity instruments that are measured at fair value, each equity instrument is designated asmeasured at fair value through profit or loss or other comprehensive income, and the Group
continues to apply the classification.
2)

Subsequent measurement
After initial recognition, financial assets are measured in accordance with the classification as follows:(a) Financial assets measured at amortized cost
Financial assets measured at amortized cost are measured at amortized cost using the effective
interest method.
(b) Financial assets measured at fair value
Financial assets other than those measured at amortized cost are measured at fair value.
Changes in the fair value of financial assets measured at fair value through profit or loss arerecognized in profit or loss.
For equity instruments that are designated as measured at fair value through other comprehensive
income, however, changes in the fair value are recognized in other comprehensive income, and thechanges are transferred to retained earnings when the equity instruments are derecognized or the fairvalue has declined significantly. Dividends on the financial assets are recognized in profit or loss as- 97 -

part of finance income unless the dividend clearly represents a recovery of part of the cost of theinvestment.
3)

Derecognition
The Group derecognizes a financial asset when the contractual rights to the cash flows from thefinancial asset expire or it transfers the contractual rights to receive the cash flows of the financial
asset and transfers substantially all the risks and rewards of ownership of the financial asset.

(ii) Impairment of financial assets
Allowance for doubtful accounts is recognized for expected credit losses on financial assets measured atamortized cost.
The Group assesses, at the end of each fiscal year, whether the credit risk on a financial asset has
increased significantly since initial recognition. If the credit risk on a financial asset has not increased
significantly since initial recognition, 12-month expected credit losses are recognized as allowance for
doubtful accounts for the financial asset. If the credit risk on a financial asset has increased significantly
since initial recognition, an amount equal to the lifetime expected credit losses is recognized as allowancefor doubtful accounts.
The Group determines, at each reporting date, whether credit risk has increased significantly, based on
the change in the risk of a default occurring since initial recognition. When determining whether there isany change in the risk of a default occurring since initial recognition, the Group considers past due
information, the deterioration of the business performance of the debtor and other information. For tradereceivables, however, allowance for doubtful accounts is always recognized at an amount equal to lifetime
expected credit losses, regardless of whether credit risk has increased significantly since initialrecognition.
Expected credit losses are measured based on the discounted present value of the difference between allcontractual cash flows that are due to the Group in accordance with the contract and all the cash flowsthat the Group expects to receive. The Group estimates expected credit losses of financial assets basedon reasonably available and supportable information such as historical default rates. Subsequent changes
in estimates of expected credit losses are recognized in profit or loss.
The Group treats any financial asset as a credit-impaired financial asset in cases that are deemed as
default, including cases where the asset is significantly past due even after enforcement activity, andcases where the debtor has filed for bankruptcy, corporate reorganization, civil rehabilitation, special
liquidation or other legal proceedings. When the Group has no reasonable expectation of recovering thecontractual cash flows on a financial asset in its entirety or a portion thereof, it directly reduces the grosscarrying amount of the financial asset.
(iii) Financial liabilities (excluding derivatives)
1) Initial recognition and measurement
Financial liabilities held by the Group are classified as financial liabilities measured at amortized cost.
This classification is determined at the initial recognition.
These financial liabilities are initially measured at amounts minus transaction costs that are directly
attributable to the issue of the financial liabilities.
2)

Subsequent measurement
Financial liabilities measured at amortized cost are subsequently measured at amortized cost using
the effective interest method.

3)

Derecognition
The Group derecognizes a financial liability when the financial liability is extinguished, that is, when
the obligation specified in the contract is discharged or cancelled or expires.

(iv) Derivatives
The Group enters into derivatives, forward foreign exchange contracts and currency swaps, to manage
foreign exchange risk. These derivatives are initially recognized at fair value on the date the contract is- 98 -

entered into and are also subsequently remeasured at fair value. Changes in the fair value of derivatives
are recognized in profit or loss.
Hedge accounting is not applied to the above derivatives.
(4) Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation andaccumulated impairment losses.
The cost of an item of property, plant and equipment includes any costs directly attributable to the acquisitionof the asset and the costs of dismantling and removing the item and restoring the site on which it is located.
All assets, other than land and construction in progress, are depreciated using the straight-line method overtheir estimated useful lives.
The estimated useful lives of major items are as follows:･ Buildings and structures 15 to 50 years･ Machinery and vehicles 4 to 15 years･ Right-of-use assets
Shorter of estimated useful life and lease term
The estimated useful lives, residual values and depreciation methods are reviewed at the end of each fiscal
year, and any changes are applied prospectively as changes in accounting estimates.
(5) Leases
The Group recognizes a right-of-use asset and a lease liability at the commencement date of the lease. The
right-of-use asset is initially measured at cost. The cost of the right-of-use asset is determined as the amountof the initial measurement of the lease liability, adjusted for any initial direct costs, any lease incentives
received, etc., plus restoration and other costs to be incurred under the contract. The right-of-use asset isdepreciated using the straight-line method over the shorter of the estimated useful life and the lease term.
Furthermore, if applicable, the carrying amount of the right-of-use asset is reduced due to an impairment
loss and adjusted for any remeasurement of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at thecommencement date, discounted using the lessee’s incremental borrowing rate. In measuring leaseliabilities, the Group elected not to separate non-lease components, and instead to recognize each lease
component and any associated non-lease components as a single lease component.
The Group presents in the consolidated statement of financial position, right-of-use assets in “property, plantand equipment” and lease liabilities in “other financial liabilities.”
For short-term leases with a term of 12 months or less and leases of low-value assets, the Group applied
recognition exemptions in IFRS 16 and elected not to recognize right-of-use assets or lease liabilities. The
Group recognizes the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
(6) Goodwill
Goodwill arising from a business combination is stated at cost less any accumulated impairment losses.
Goodwill is not amortized and is tested for impairment annually (during the fourth quarter) and whenever
there is an indication that the goodwill may be impaired.
Measurement of goodwill on initial recognition is stated in “(1) Basis of consolidation, (iv) Businesscombinations.”(7) Intangible assets
Separately acquired intangible assets are measured at cost at initial recognition. Intangible assets acquiredin business combinations are measured at their acquisition-date fair values. Research expenses arerecognized as expenses when incurred, and development expenses are recognized as “in-process researchand development” included in intangible assets, when it is considered probable that relevant assets will beapproved for sale by regulatory authorities. After initial recognition, intangible assets, except for those thathave not yet been amortized, are amortized using the straight-line method over their respective estimateduseful lives and carried at cost less accumulated amortization and any accumulated impairment losses.
Intangible assets that were acquired through in-licensing agreements for products, development products,- 99 -

technologies, etc. or through business combinations and are still in the research and development stage orhave not yet been approved for sale by regulatory authorities, and internal development expenses that meet
asset recognition criteria are recognized as “in-process research and development” included in intangible
assets. Because “in-process research and development” falls under intangible assets that have not yet beenamortized, it is tested for impairment on an individual asset basis annually (during the fourth quarter) andwhenever there is an indication that the asset may be impaired. The Group recognizes intangible assets thathave been approved for sale by regulatory authorities as “marketing rights” and begins amortizing them after
the start of sales.
The estimated useful lives of major intangible assets are as follows:･ Marketing rights
5 to 20 years
The estimated useful lives, residual values and amortization methods are reviewed at the end of each fiscal
year, and any changes are applied prospectively as changes in accounting estimates.
(8) Impairment of non-financial assets
For the carrying amounts of the Group’s non-financial assets, except for inventories, deferred tax assets,
assets held for sale and retirement benefit asset, the Group assesses whether there is any indication of
impairment at the end of each fiscal year. If there is any indication that an asset may be impaired, the Groupestimates the recoverable amount of the asset. For goodwill and intangible assets that have not yet beenamortized or is not yet available for use, recoverable amounts are estimated at the same time every year.
The recoverable amount of an asset or a cash-generating unit is the higher of its value in use and its fairvalue less costs of disposal. In measuring the value in use, estimated future cash flows are discounted to thepresent value using a pre-tax discount rate that reflects the time value of money and the risks specific to theasset. Assets that are not tested for impairment on an individual asset basis are integrated into the smallest
cash-generating unit that generates cash inflows largely independent of the cash inflows from other assets
or groups of assets through continuing use.
An impairment loss is recognized in profit or loss when the carrying amount of an asset or a cash-generating
unit exceeds its recoverable amount. An impairment loss recognized for a cash-generating unit is firstallocated to reduce the carrying amount of goodwill allocated to the unit and then to the other assets of theunit pro rata on the basis of the carrying amount of each asset in the unit.
An impairment loss recognized for goodwill is not reversed. Impairment losses recognized in prior periods for
assets other than goodwill are assessed at the end of each fiscal year for any indication that the impairment
loss may have decreased or no longer exist. If there has been a change in the estimates used to determine
the recoverable amount, the impairment loss is reversed. An impairment loss is reversed to the extent thatthe asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortization, if no impairment loss had been recognized for the asset.
(9) Inventories
Inventories are measured at the lower of cost and net realizable value. Net realizable value is the estimatedselling price in the ordinary course of business less the estimated costs of completion and the estimatedcosts necessary to make the sale. The cost of inventories is principally determined by the weighted average
cost method and comprises all costs of purchase, costs of conversion and other costs incurred in bringing
the inventories to their present location and condition.
(10) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits, and short-term investments with an
original maturity of three months or less which are readily convertible to cash and which are subject to an
insignificant risk of changes in value.
(11) Assets held for sale and discontinued operations(i) Non-current assets held for sale
The Group classifies a non-current asset (or a disposal group) as held for sale if its carrying amount will
be recovered principally through a sale transaction rather than through continuing use.
To classify a non-current asset (or a disposal group) as held for sale, its sale must be highly probable and- 100 -

it must be available for immediate sale in its present condition. In addition, the Group’s management must
be committed to a plan to sell the asset, and the sale should be expected to be completed within one year
from the date of classification in principle.
Non-current assets (or disposal groups) classified as held for sale are measured at the lower of carrying
amount and fair value less costs to sell and are not depreciated or amortized once classified as held forsale.
(ii) Discontinued operations
The Group classifies an operation as a discontinued operation when it includes a component of an entitythat either has been disposed of or is classified as held for sale and represents a separate line of businessor geographical area of operations of the Group and the Group has a plan to dispose of the separate lineof business or geographical area of operations.
(12) Equity(i) Ordinary shares
Proceeds from the issue of ordinary shares are included in share capital and capital surplus.
(ii) Treasury shares
When the Company reacquires its own shares, the consideration paid is recognized as a deduction in
equity. When the Company sells its own shares, the difference between the carrying amount and theconsideration received is recognized as capital surplus.
(13) Share-based payments
The Group has a restricted stock compensation plan, which is an equity-settled share-based payment planfor Directors and Executive Officers, a performance-linked share-based remuneration plan (Performance
Share Unit), which is an equity-settled and cash-settled share-based payment plan, and a phantom stockplan, which is a cash-settled share-based payment plan for certain employees.
Restricted stock compensation is recognized as an expense over the period from the grant date to thevesting date with a corresponding increase in equity. The fair value of restricted stock compensation ismeasured by reference to the fair value of the Company’s ordinary shares on the grant date.
Equity-settled performance share units are measured by reference to the fair value of the Company’s shares
to be granted in the future and recognized as an expense over the vesting period with a corresponding
increase in equity. For cash-settled performance share units, the services received and the liability incurred
are measured at the fair value of the liability and recognized as an expense over the vesting period with acorresponding increase in liabilities. The fair value of the liability is remeasured at the end of each fiscal year
and at the date of settlement, with any changes in fair value recognized in profit or loss for the period.
For phantom stock, the fair value of future cash payments is recognized as a liability, and changes in the fairvalue of the liability are recognized in profit or loss for the period until the liability is settled.
In addition, the Company had a share option plan, which was an equity-settled share-based payment planfor its Directors and Executive Officers, but abolished it although share options granted remain outstanding.
The Company estimated the fair value of the share options granted under the plan at the grant date andrecognized it as an expense over the vesting period in the consolidated statement of profit or loss with acorresponding increase in equity in the consolidated statement of financial position, taking into account the
number of share options expected to vest eventually. The Company calculated the fair value of the shareoptions granted by using the Black-Scholes-Merton formula or other option pricing models, taking into
account the terms and conditions of the options.

- 101 -

(14) Employee benefits(i) Post-employment benefits
The Group’s employee retirement benefit plans consist of defined benefit plans and defined contributionplans.
The Group determines the present value of its defined benefit obligations and the related current service
cost and past service cost using the projected unit credit method.
The discount rate used is determined based on market yields on high quality bonds at the end of the fiscal
year.
The net defined benefit liability (asset) is determined by deducting the fair value of any plan assets fromthe present value of the defined benefit obligations.
Remeasurements of defined benefit plans are recognized in full in other comprehensive income in the
period in which they occur and immediately transferred from other components of equity to retained
earnings.
Past service cost is recognized in profit or loss in the period of a plan amendment or a curtailment.
The cost of retirement benefits under defined contribution plans is recognized as an expense whencontributions are made.
(ii) Short-term employee benefits
Short-term employee benefits are recognized as expenses when the related service is rendered by
employees.
For the cost of paid leave, the amount expected to be paid under the related plans is recognized as aliability when the Group has a legal or constructive obligation for the payment and can make a reliable
estimate of the obligation.
(15) Provisions
A provision is recognized when the Group has a present legal or constructive obligation as a result of a past
event, it is probable that an outflow of economic resources will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation.
(16) Revenue(i) Revenue from contracts with customers
The Group identifies performance obligations in contracts with customers and recognizes revenue in theamount of consideration to which the Group expects to be entitled in exchange for transferring goods orservices to the customers. Such amount does not include amounts collected on behalf of taxation
authorities such as consumption taxes and value-added tax. If the consideration in a contract with acustomer includes a variable amount, the variable consideration is included in the transaction price only tothe extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognized will not occur when the uncertainty associated with the variable consideration is subsequently
resolved.
1)

Revenue from sale of merchandise and finished goods
Revenue under sales contracts for merchandise and finished goods with customers is recognizedwhen merchandise and finished goods are delivered to the customers since control of themerchandise and finished goods is transferred to the customers and performance obligations are
satisfied at that point in time.
Revenue from the sale of merchandise and finished goods is measured at the price in the contract
after deduction of items such as rebates and discounts to wholesalers, medical institutions, medical
insurers, and government agencies. The most important deduction adjustments are rebates tocustomers, chargeback payments to wholesalers, rebates associated with U.S. public healthinsurance programs, and a provision for returns of expired products. These adjustments are
determined, taking into account the contents of the contract, historical data, and other factors. Since
they are based on estimates, they may not fully reflect the actual deductions and may vary dependingon sales mix by purchaser type, by ultimate consumer type, and by product type.
The Group recognizes as refund liabilities the amount of consideration that it expects to refund to- 102 -

customers. The refund liabilities are estimated by using the most likely amount method based oncontractual terms, historical data and other factors.
Consideration under sales contracts for merchandise and finished goods is received mainly within
one year from the delivery of the merchandise and finished goods to customers. Such contracts do
not contain any significant financing components.
2)

Revenue from technology out-licensing
The Group earns as revenue from technology out-licensing upfront income, milestone revenue andrunning royalty income under license agreements that grants third parties licenses to develop,
manufacture and sell development products. Some license agreements do not involve the provision of
goods or services by the Group other than the granting of licenses while others involve the provisionof goods or services by the Group on development cooperation such as the provision of
manufacturing technologies and drugs, application for regulatory approval, promotion of jointcommercialization, etc.
When the Group does not provide any significant goods or services other than granting a license,
upfront income is recognized as revenue at the time of granting the license since all performanceobligations are usually satisfied at the time. Milestone revenue, which is mainly received uponsuccessful completion of development activities and regulatory approval, is recognized as revenue
when it becomes highly probable that an agreed-upon milestone, such as application for regulatory
approval, will be reached, taking into account the probability of a significant revenue reversal in the
future.
When the Group provides more than one significant good or service including granting a license, theGroup identifies a single or more than one performance obligation, allocates the transaction pricecomprised of upfront income and milestone revenue to the performance obligation(s), records the
upfront consideration as a contract liability and recognizes revenue over a period of time bymeasuring the progress towards complete satisfaction of that performance obligation. For
development cooperation in relation to license agreements and other performance obligations, theprogress is measured using an input method that is appropriate for each license agreement.
Running royalty income and milestone revenue received for the achievement of sales targets, such as
when the total sales of a drug product exceed a specified amount, are a sales-based or usage-based
royalty and are measured mainly based on the sales recorded by the contract counterparty. The
Group recognizes revenue at the later of when the sale or usage occurs and when the performanceobligations to which the sales-based or usage-based royalty has been allocated are satisfied.
Consideration of license agreements is received mainly within one year from the time of granting thelicense and the time agreed upon in the agreement such as the achievement of a specified milestone.
Such contracts do not contain any significant financing components.

(ii) Interest income
Interest income is recognized using the effective interest method.
(iii) Dividend income
Dividend income is recognized when the right to receive payment is established.

- 103 -

(17) Joint development and joint commercialization
The Group entered into agreements with partner companies to jointly develop and commercialize
development products and products of the Group or the partner companies.
Under the agreements, the Group has rights to receive from partner companies upfront income as well as
milestone revenue, running royalty income and other income as consideration for the agreements or has
obligations to pay them to partner companies.
In addition, with respect to expenses and profits shared between the Group and the partner companies injoint development and joint commercialization activities, the Group’s expenditures to and income received
from a partner company are recorded as, or recorded as reversals of, revenue, cost of sales, selling, generaland administrative expenses, or research and development expenses in accordance with the details of eachagreement and the transaction.
License agreement with Amgen for KHK4083 for atopic dermatitis, etc.
On June 1, 2021, the Company entered into an agreement with Amgen Inc. to jointly develop andcommercialize KHK4083, an anti-OX40 fully human monoclonal antibody discovered by the Company, forthe treatment of atopic dermatitis, with potential in other autoimmune diseases. This agreement became
effective on July 31, 2021, following the expiration of the waiting period under U.S. antitrust law.
In accordance with the agreement, Amgen leads the development, manufacturing and commercialization for
KHK4083 for all markets globally, except Japan, where the Company solely engages in marketing activities.
The Company and Amgen have the right to co-promote KHK4083 in the United States, and the Company
has the right to co-promote it in certain other markets outside the United States, including in Europe andAsia except Japan. Amgen made a U.S.$400 million upfront payment to the Company and will make futurecontingent milestone payments potentially worth up to an additional U.S.$850 million, as well as royalty
payments on future global sales. The Company and Amgen will share global development costs, except inJapan, and commercialization costs in the United States. Amgen will recognize sales for KHK4083 in all
markets globally, except for Japan.
As stated in “3. Significant accounting policies, (16) Revenue,” the Group recorded upfront income of
U.S.$400 million received under the agreement as a contract liability and will reverse the contract liability
and recognize revenue as the performance obligations are satisfied over the estimated period for obtaining
approval in the United States, in which the Group will complete the transfer of significant goods or services
including development cooperation, such as the provision of manufacturing technologies and investigational
drugs that are integral to the granting of a license, and assistance to obtain approval for manufacturing andmarketing. The Company recognized revenue of ¥7,265 million in the fiscal year ended December 31, 2022.
Expenses incurred in preparation for joint development and joint commercialization activities are recorded inselling, general and administrative expenses or research and development expenses, depending on thenature of the expense.
(18) Government grants
Government grant income is measured at fair value and recognized when there is reasonable assurance
that the Group will comply with the conditions attaching to grants and the grants will be received.
Grants for expenses incurred in association with research and development are presented as a deduction
from related expenses. Grants for the acquisition of assets are deducted directly from the cost of the assets.
(19) Income taxes
Income taxes consist of current and deferred taxes. These are recognized in profit or loss, except for thosearising from business combinations and items recognized directly in equity or in other comprehensive
income.
(i)Current tax
Current tax is measured at the amount expected to be paid to or recovered from the taxation authorities.
The amount of taxes is measured using the tax rates and tax laws that have been enacted or
substantively enacted by the end of the fiscal year in countries where the Group operates and earns
taxable income.

- 104 -

(ii) Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets andliabilities for accounting purposes at the end of the fiscal year and their tax bases, unused tax losses andunused tax credits.
Deferred tax assets or liabilities are not recognized for the following temporary differences:･ temporary differences arising from the initial recognition of goodwill; and･ temporary differences arising from the initial recognition of assets and liabilities in transactions that are
not business combinations and affect neither accounting profit nor taxable profit.
Deferred tax liabilities are recognized, in principle, for all taxable temporary differences. However, fortaxable temporary differences related to investments in subsidiaries and associates and interests in joint
arrangements, deferred tax liabilities are not recognized if the Group is able to control the timing of thereversal of the temporary differences and it is probable that the temporary differences will not reverse in
the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probablethat taxable profits will be available against which the deductible temporary differences can be utilized.
However, for deductible temporary differences related to investments in subsidiaries and associates andinterests in joint arrangements, deferred tax assets are not recognized if it is probable that the temporary
differences will not reverse in the foreseeable future or it is unlikely that taxable profits will be available
against which the temporary differences can be utilized.
The carrying amounts of deferred tax assets are reviewed every fiscal year and reduced to the extent that
it is probable that sufficient taxable profits will not be available to allow all or part of the asset to be utilized.
Unrecognized deferred tax assets are reassessed every fiscal year and recognized to the extent that it
has become probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates and in accordance with the tax laws thatare expected to apply to the period when the asset is realized or the liability is settled, based on tax rates
and tax laws that have been enacted or substantively enacted by the end of the fiscal year.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and income taxes are levied by the same taxation authority on thesame taxable entity.
(20) Earnings per share
Basic earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders of theCompany by the weighted average number of ordinary shares issued after adjusting for treasury shares
during the period. Diluted earnings per share is calculated by adjusting profit or loss attributable to ordinary
equity holders of the Company and the weighted average number of ordinary shares outstanding for theeffects of all dilutive potential ordinary shares.

- 105 -

4.

Accounting standards and interpretations issued but not yet applied
None of the accounting standards and interpretations that have been issued or amended by the date of
approval for the publication of the consolidated financial statements have a material impact on the
consolidated financial statements of the Group.

5. Operating segments(1) Overview of reportable segments
The Group consists of only the one reportable segment, which is the Pharmaceuticals business. Accordingly,
information for each reportable segment is omitted.
(2) Information about products and services
Revenue from external customers by product and service consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Merchandise and finished goods

326,141

364,596

Revenue from technology out-licensing

26,10533,775352,246

398,371

Total(3) Information about geographical areas(i) Revenue(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Japan

161,988

154,636

Americas102,163

143,905(U.S.)

99,328139,852

Europe53,361

62,251

Asia

34,51837,368

Other

217

210

352,246

398,371

Total
Note:

Revenue is disaggregated by country or region based on the location of the customer.

(ii) Non-current assets(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Japan

227,854226,529

Americas11,526

13,508Europe51,66949,253

Asia

3,021

3,713

294,070

293,002

Total
Note:

Non-current assets are disaggregated by location and do not include investments accounted for using equity
method, financial instruments, retirement benefit assets or deferred tax assets.
- 106 -

(4)Information about major customers
The Group had the following revenue from transactions with a single external customer amounting to 10% ormore of revenue in the consolidated statement of profit or loss.
(Millions of yen)
Fiscal year ended
December 31, 2021

Customer
Alfresa Corporation
Note:

Fiscal year ended
December 31, 2022

35,457–

Revenue of Alfresa Corporation in the fiscal year ended December 31, 2022 is not presented because it is lessthan 10% of revenue stated in the consolidated statement of profit or loss.
6.

Property, plant and equipment(1) Changes in property, plant and equipment
The following are changes in the carrying amounts, costs and the accumulated depreciation and impairment
losses of property, plant and equipment:(i) Carrying amount(Millions of yen)
Buildings
Machinery
Construction Right-of-use
Other
and
Land
Total
and vehicles
in progress
assets(Note 1)structures

Balance at January 1,
2021

31,15011,610

5,342

4,089

17,157

6,665

76,012Acquisitions

21

5

–

8,841

6,468

223

15,558

Sales or disposals

(14)

(105)

(84)

(13)

(1,201)(37)(1,454)

Depreciation (Note 2)(2,305)(3,072)––(3,569)(2,264)(11,210)

Impairment losses(Note 3)

(573)

(184)

–

–

(313)

(10)

(1,080)Transfers

1,551

2,312

–

(6,428)

–

2,315

(249)

312

25

–

(16)

746

7

1,075

30,143

10,591

5,257

6,473

19,2886,900

78,652Acquisitions

31

14

–

16,346

3,651

1,302

21,343

Sales or disposals

(36)

(39)

–

(37)

(339)

(88)

(539)

(1,803)(2,941)––(3,951)(2,740)(11,433)

–

–

–

(413)

–

–

(413)

1,429

2,747

–

(7,674)

363

3,134

–

431

24

–

(87)

1,214

(92)

1,490

30,195

10,396

5,257

14,60820,227

8,416

89,099Exchange differenceson translation offoreign operations
Balance at December
31, 2021

Depreciation (Note 2)
Impairment losses(Note 3)
Transfers
Exchange differenceson translation offoreign operations
Balance at December
31, 2022
Notes:

1. “Other” mainly represents tools, furniture and fixtures.
2. Depreciation of property, plant and equipment is recorded in “cost of sales,” “selling, general andadministrative expenses” and “research and development expenses” in the consolidated statements of profit
or loss.
3. Impairment losses are included in “other expenses” in the consolidated statement of profit or loss.

- 107 -

(ii) Cost
(Millions of yen)
Buildings
andstructures

Machineryand vehicles

82,008

58,119

5,342

4,089

83,921

58,7485,258

85,656

60,7605,258

Balance at January 1,
2021
Balance at December
31, 2021
Balance at December
31, 2022
Note:

Construction Right-of-use
in progress
assets

Land

Other

Total

29,85738,288217,7026,473

35,41939,750229,569

15,021

39,69342,231

248,619

The Group received a government grant of ¥1,429 million for the acquisition of property, plant and equipment in
the fiscal year ended December 31, 2022 (¥1,419 million in 2021) and deducted the amount directly from thecost of property, plant and equipment. There were no unfulfilled conditions or other contingencies attaching to
the government grant.
(iii) Accumulated depreciation and impairment losses(Millions of yen)
Buildings
andstructures

Machineryand vehicles

50,85846,5090–53,77948,157055,46250,3640Balance at January 1,
2021
Balance at December
31, 2021
Balance at December
31, 2022

Construction Right-of-use
in progress
assets

Land

Other

Total

12,70031,623

141,689–

16,13132,850150,917413

19,46633,815

159,520(2) Right-of-use assets
The following table provides the carrying amounts of right-of-use assets included in property, plant andequipment:(Millions of yen)
Buildings andstructures

Machineryand vehicles

Balance at January 1, 2021

10,808

1,096

5,251

1

17,157

Balance at December 31, 2021

11,022

861

7,404

1

19,288

Balance at December 31, 2022

10,616

1,887

7,722

2

20,227

Land

Other

Total

(3) Commitments
Please refer to Note “32. Commitments” for information about commitments for the acquisition of property,
plant and equipment.

- 108 -

7.

Goodwill and intangible assets(1) Changes in goodwill and intangible assets
The following are changes in the carrying amounts, costs and the accumulated amortization and impairment
losses of goodwill and intangible assets:(i) Carrying amount(Millions of yen)
Intangible assets
In-process
researchanddevelopment(Note 1)

Goodwill

Balance at January 1, 2021

Marketingrights

Other(Note 2)

Total

132,695

31,17839,3084,541

75,027

Acquisitions

–

6,731

500

3,392

10,623

Additions from internal development

–

2,621

–

–

2,621

Amortization (Note 3)

–

(35)

(7,122)(1,131)(8,289)Impairment losses––(4,207)–(4,207)

Transfers

–

(82)

82

(788)

(788)

3,656

1

1,172

(95)

1,078

136,352

40,41529,733

5,919

76,066

Acquisitions

–

6,448

40

2,678

9,166

Additions from internal development

–

4,126

–

–

4,126

Sales or disposals

–

–

–

(43)

(43)

Amortization (Note 3)––(5,566)(1,478)(7,043)

Impairment losses–(17,563)–(2)(17,566)

Transfers

–

(178)

178

(332)

(332)

1,178

–

313

98

411

(1,769)

–

–

–

–

135,761

33,24824,6986,840

64,786

Exchange differences on translation offoreign operations
Balance at December 31, 2021

Exchange differences on translation offoreign operations
Transfer to assets held for sale (Note4)
Balance at December 31, 2022
Notes:

1. “In-process research and development” of intangible assets included internally generated intangible assetsof ¥4,494 million and ¥8,443 million as of December 31, 2021 and December 31, 2022, respectively.
2. “Other” under intangible assets mainly represents software.
3. Amortization of intangible assets is recorded in “cost of sales,” “selling, general and administrative expenses”
and “research and development expenses” in the consolidated statements of profit or loss.
4. For more details, please refer to Note “14. Assets held for sale.”- 109 -

(ii) Cost
(Millions of yen)
Intangible assets
In-process
researchanddevelopment

Goodwill

Marketingrights

Other

Total

Balance at January 1, 2021

132,695

36,470111,494

8,171

156,135

Balance at December 31, 2021

136,352

45,639110,556

10,449166,644

Balance at December 31, 2022

135,761

56,035

107,497

12,562

176,094(iii) Accumulated amortization and impairment losses(Millions of yen)
Intangible assets
In-process
researchanddevelopment

Goodwill

Marketingrights

Other

Total

Balance at January 1, 2021

–

5,292

72,186

3,630

81,108

Balance at December 31, 2021

–

5,224

80,824

4,530

90,578

Balance at December 31, 2022–

22,78882,7995,721

111,308(2) Testing for impairment(i) Goodwill
The Group tests goodwill for impairment annually (during the fourth quarter) and whenever there is anindication that it may be impaired. The recoverable amount for impairment testing purposes is determinedbased on value in use.
Goodwill acquired in a business combination, on the acquisition date, is allocated to groups of cashgenerating units that are expected to benefit from the synergies of the combination.
Value in use is determined by discounting the estimated future cash flows based on a three-year business
forecast to the present value.
The following are discount rates used in determining value in use.
Discount rate (post-tax)

Discount rate (pre-tax)

Weighted average cost of capital(WACC)of groups of cash-generating units

Weighted average cost of capital(WACC)of groups of cash-generating units

Fiscal year ended December 31,
2021

6.1%

8.8%

Fiscal year ended December 31,
2022

7.3%

10.4%

Such business forecast reflected past experience, is consistent with external sources of information andwas developed taking into account new drugs to be launched, competition, etc.
The value in use sufficiently exceeds the carrying amount of the groups of cash-generating units, so theGroup does not think the value in use will fall below the carrying amount even if key assumptions used todetermine the value in use change within a reasonable range.
(ii) Intangible assets that have not yet been amortized
The Group performs an impairment test for in-process research and development on an individual asset
basis annually (during the fourth quarter) and whenever there is an indication that the asset may be
impaired. The recoverable amount for impairment testing purposes is determined based on value in use.
- 110 -

In-process research and development represents rights related to research and development acquired
through in-licensing agreements for products in the research and development stage, development
products, technologies, etc. or through business combinations, and internal development expenses thatmeet asset recognition criteria and will not become usable until the final commercialization stage. The
amount of intangible assets that have not yet been amortized was ¥33,248 million (¥40,415 million as ofDecember 31, 2021).
(3) Significant intangible assets
Intangible assets in the consolidated statement of financial position include the following significant items:(Millions of yen)
As of
As of
December 31, 2021
December 31, 2022
Remaining
Name
Carrying amount
Carrying amountamortization period
In-process researchand development

Marketing rights

Note:

Tenapanor hydrochloride

4,495

9,535

–

Bardoxolone methyl

8,275

8,275

–

Zandelisib (Note)

14,330––

Rituximab BS [KHK]

3,593

2,994

Five years

Moventig

2,586

2,352

Eight years

HARUROPI

1,616

1,287

Four years

The asset was impaired in the fiscal year ended December 31, 2022. For details, please refer to “(4) Impairmentof intangible assets.”(4) Impairment of intangible assets
In the fiscal year ended December 31, 2021, the Group recognized an impairment loss of ¥4,207 million,
which was recorded in “other expenses” in the consolidated statement of profit or loss. This is because thecarrying amount of marketing rights for HARUROPI was reduced to their recoverable amount (value in use
using a pre-tax discount rate of 8.0%) due to decreased profitability.
In the fiscal year ended December 31, 2022, the Group recognized an impairment loss of ¥17,566 million,
which was recorded in “other expenses” in the consolidated statement of profit or loss. This is mainly
because the carrying amount of in-process research and development for zandelisib (code name: ME-401)
was reduced to their recoverable amount (value in use of 0) due to the decision to discontinue the joint
development outside Japan.
The cash-generating units for intangible assets are individual assets, and the recoverable amount isdetermined based on its value in use using a pre-tax rate.
(5) Commitments
Please refer to Note “32. Commitments” for information about commitments for the acquisition of intangible
assets.

- 111 -

8.

Investments accounted for using equity method
Investments accounted for using the equity method consisted of the following:(Millions of yen)
As ofDecember 31, 2021

Joint ventures

As ofDecember 31, 2022

(19,426)(15,271)

(86)

(258)

Associates(1) Material joint ventures
The Group’s material joint venture is FUJIFILM KYOWA KIRIN BIOLOGICS Co., Ltd., which was establishedthrough a joint venture agreement between the Company and FUJIFILM Corporation. It mainly operates inJapan and Europe and principally engages in the development, manufacture and marketing of biosimilars.
The following table reconciles the company’s condensed financial statements under IFRS to the carrying
amount of the Group’s equity interest:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Percentage ownership interest

50.0%

50.0%

Total non-current assets

16,04816,808

Total current assets

12,97913,10010,264

7,293

Total non-current liabilities

65,00057,000of which: bonds payable

65,00057,000

2,478

2,471

Equity(38,451)(29,563)

Equity attributable to the Group(19,226)(14,781)

Consolidation adjustments

(200)

(490)

Carrying amount of equity(19,426)(15,271)of which: cash and cash equivalents

Total current liabilities

As the company started to redeem the bonds and the bonds, in substance, no longer formed part of the Group’s
net investment in the company from the fiscal year ended December 31, 2021, the Group’s share of losses of thecompany over its interest in the company was recorded as a liability from application of the equity method. The
amounts of bonds issued by the company that the Company purchased were ¥32,500 million and ¥28,500 million
as of December 31, 2021 and 2022, respectively. Adjustments were made to unrealized gains on transactions
with the Company.

- 112 -

(Millions of yen)
Fiscal year ended
December 31, 2021
Revenue

Fiscal year ended
December 31, 2022

12,08013,657(1)(1)

Interest expenses

(299)

(284)

Income tax expense (Note 1)

5,959

(270)

Profit or loss from continuing operations

9,539

8,647

Other comprehensive income

236

241

Total comprehensive income

9,775

8,889

4,770

4,324

Other comprehensive income

118

121

Total comprehensive income

4,887

4,444

Depreciation and amortization

The Group’s share
Profit or loss from continuing operations

Notes:

1. Income tax expense primarily consisted of deferred tax expense.
2. There were no dividends received from FUJIFILM KYOWA KIRIN BIOLOGICS Co., Ltd.
(2) Individually immaterial associates
The carrying amount of investments in individually immaterial associates was as follows:(Millions of yen)
As ofDecember 31, 2021

Carrying amount

As ofDecember 31, 2022
(86)

(258)

The following table provides the financial information of individually immaterial associates:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

The Group’s share
Profit or loss from continuing operations

(97)

(172)

Other comprehensive income––

Total comprehensive income

(97)

(172)

- 113 -

9.

Other financial assets(1) Breakdown of other financial assets
Other financial assets consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Financial assets measured at amortized cost
Bonds payable

32,50028,500

Leasehold deposits

2,494

2,364

Other

1,212

755

1,151

335

9,241

5,103

46,59837,057

Non-current assets

45,16436,531

Current assets

1,434

526

Financial assets measured at fair value throughprofit or loss
Other
Financial assets measured at fair value throughother comprehensive income
Equity securities and investments in capital
Total(2) Financial assets measured at fair value through other comprehensive income
The Group measures equity securities and investments in capital that are held for the purpose of maintaining
smooth business relationships at fair value through other comprehensive income. The following tableprovides the fair value of each major issue:(Millions of yen)
As ofDecember 31, 2021
Ardelyx, Inc.

As of
December 31, 2022
364

1,087

KYOWA HAKKO BIO CO., LTD. (Note)

3,632

–

SUZUKEN CO., LTD.

1,529

–

MEDIPAL HOLDINGS CORPORATION

1,299

–

Note:

Reclassified to assets held for sale in the fiscal year ended December 31, 2022. For more details, please refer toNote “14. Assets held for sale.”- 114 -

(3) Derecognition of financial assets measured at fair value through other comprehensive income
The Group disposed of some financial assets measured at fair value through other comprehensive income
for the purposes of increasing asset effectiveness and derecognized them. The following table provides thefair value at the time of disposal and the cumulative gain or loss previously recognized in othercomprehensive income (net of tax):(Millions of yen)
Fiscal year ended
December 31, 2021
Fair value

Cumulative gain (loss)
2,417

Note:

Fiscal year ended
December 31, 2022
Fair value

731

Cumulative gain (loss)
3,182

1,038

When a financial asset measured at fair value through other comprehensive income is derecognized, thecumulative gain or loss previously recognized in other comprehensive income is reclassified to retained
earnings. In the fiscal year ended December 31, 2021, for financial assets measured at fair value through othercomprehensive income whose fair values declined significantly below their costs, the cumulative loss, net of tax,of ¥1,426 million was reclassified from other components of equity to retained earnings.
Dividend income from equity instruments consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Investments
derecognized during period

Fiscal year ended
December 31, 2022

Investments
held at fiscal year-end

49

Investments
derecognized during period
73

Investments
held at fiscal year-end

4716(4) Assets pledged as collateral(Millions of yen)
As ofDecember 31, 2021
Other financial assets (current assets)
Financial assets measured at fair value throughother comprehensive income
Note:

As of
December 31, 2022
–

300

573

–

The assets were pledged as collateral in order to utilize the deferred payment system under the Japanese
Customs Act and the Consumption Tax Act.
10. Income taxes(1) Deferred tax assets and deferred tax liabilities in the consolidated statement of financial position(Millions of yen)
As ofDecember 31, 2021

Deferred tax assets
Deferred tax liabilities
Net amount- 115 -

As ofDecember 31, 2022

49,10852,946

(386)

(404)

48,72252,542

(2) Changes in the balance of deferred tax
The following table provides the major components of deferred tax and their changes:
Fiscal year ended December 31, 2021

Balance atJanuary 1(Net amount)(Millions of yen)AmountAmountrecognized in
Balance atrecognized inotherDecember 31
profit or loss
comprehensive (Net amount)(Note 1)incomeProperty, plant and equipment and intangible assets(4,928)(1,469)–(6,396)

Outsourced research and development

7,100

1,173

–

8,273

Other financial assets(1,586)

255

702

(629)

818

338

(623)

534

19,116

1,752–

20,868445

11,866–

12,312

Tax loss carryforwards

3,322(1,695)–

1,627

Other (Note 2)

8,752

3,381

–

12,13333,041

15,60280

48,722Retirement benefit asset or liability
Inventories
Contract liabilities

Total
Notes:

1. The difference between the total amount recognized in profit or loss and the total deferred tax expense arosefrom changes in exchange rates.
2. Other mainly includes deferred tax assets related to tax credits.
Fiscal year ended December 31, 2022

Balance atJanuary 1(Net amount)(Millions of yen)AmountAmountBalance atrecognized inrecognized inotherDecember 31
profit or loss
comprehensive (Net amount)(Note 1)incomeProperty, plant and equipment and intangible assets(6,396)

3,817–(2,579)Outsourced research and development

8,273

223

–

8,496

Other financial assets

(629)

1,574

(493)

453

Retirement benefit asset or liability

534

177

(424)

287

Inventories

20,868827–

21,696

Contract liabilities

12,312(2,238)–

10,074

Tax loss carryforwards

1,627(1,453)–174

Other (Note 2)

12,133

1,810–

13,942

48,722

4,738

(917)

52,542

Total
Notes:

1. The difference between the total amount recognized in profit or loss and the total deferred tax expense arosefrom changes in exchange rates.
2. Other mainly includes deferred tax assets related to tax credits.

- 116 -

(3) Unrecognized deferred tax assets
The following table provides the amounts of unused tax losses and deductible temporary differences(including deductible temporary differences associated with investments in subsidiaries, etc.) for which nodeferred tax asset was recognized: The deductible temporary differences and unused tax losses arepresented on a tax basis.
(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Deductible temporary differences

22,14718,093

Unused tax losses (Note)

3,776

4,131

Note:

The following table provides the expiration of the unused tax losses for which no deferred tax asset wasrecognized:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

In one year or less––

After one year through two years––

After two years through three years––

After three years through four years––

After four years

–

–

3,776

4,131

3,776

4,131

With no expiration
Total(4) Unrecognized deferred tax liabilities
The aggregate amounts of taxable temporary differences associated with investments in subsidiaries forwhich deferred tax liabilities have not been recognized at December 31, 2021 and 2022 are ¥108,179 millionand ¥57,848 million, respectively. The Group was able to control the timing of the reversal of these
temporary differences, and it was probable that these temporary differences would not reverse in theforeseeable future. Accordingly, the Group did not recognize deferred tax liabilities.
(5) Income tax expense
Income tax expense consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Current tax expense

21,867

14,212

Deferred tax expense(14,164)

(212)

7,703

14,000Total- 117 -

(6) Reconciliation of tax rates
The following table reconciles the statutory tax rate to the effective tax rate:(In percent)Fiscal year ended
December 31, 2021
Statutory tax rate

Fiscal year ended
December 31, 2022
30.6

30.6

Share of profit (loss) of investments accounted forusing equity method

(2.3)

(2.0)

Permanently non-deductible items

1.6

0.3

Permanently non-taxable items

(1.5)

(1.3)

Change in unrecognized deferred tax assets andliabilities

(0.3)

0.4

Tax credits(10.9)(4.9)

Different tax rates applied to consolidated
subsidiaries

(3.4)

(4.9)

Retained earnings of consolidated subsidiaries

(0.1)

1.8

Other

(0.8)

0.6

12.8

20.7

(Adjustments)

Effective tax rate
Notes:

1. The Company is mainly subject to Japanese corporation tax, inhabitants tax and enterprise tax, which, in theaggregate, resulted in a statutory tax rate of 30.6% for the fiscal years ended December 31, 2021 and 2022.
The Company’s foreign subsidiaries are subject to corporation tax and other taxes in their locations.
2. “Retained earnings of consolidated subsidiaries,” which had previously been included in “Other” in the fiscal
year ended December 31, 2021, has been presented separately because its monetary importance has
increased. To reflect this change in presentation, the figures in the fiscal year ended December 31, 2021
have been reclassified.
11. Inventories
Inventories consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Raw materials and supplies

14,68813,484Work in process

12,484

15,936Merchandise and finished goods

36,917

41,25464,08970,675

Total
Note:

The costs of inventories that were recognized as expenses and included in “cost of sales” for the fiscal years
ended December 31, 2021 and 2022 are ¥77,281 million and ¥75,874 million, respectively. Of those amounts,
inventory valuation losses for the fiscal years ended December 31, 2021 and 2022 are ¥3,050 million and¥4,874 million, respectively.

- 118 -

12. Trade and other receivables
Trade and other receivables consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Trade notes and accounts receivable

99,094

104,649

Other receivables

5,754

8,000

Allowance for doubtful accounts

(258)

(388)

Chargeback payments (Note 2)

(315)

(515)

104,275

111,746

Total
Notes:

1. The amounts less allowance for doubtful accounts and chargeback payments are presented in the
consolidated statement of financial position. Trade notes and accounts receivable and other receivables areclassified as financial assets measured at amortized cost.
2. The Group entered into agreements with certain indirect customers in the United States, under which thecustomers have the right to purchase products at a discount from wholesalers. Chargeback payments aredifferences between the amounts billed by the Group to wholesalers and discount prices for the indirect
customers under such agreements.
13. Cash and cash equivalents
Cash and cash equivalents consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Cash and deposits

22,05820,177Loans receivable from parent due within threemonths313,026

319,017

335,084

339,194

Total
Note:

Cash and cash equivalents are classified as financial assets measured at amortized cost.

- 119 -

14. Assets held for sale
Assets held for sale consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Goodwill (Note 1)

–

1,726

Other financial assets (Note 2)

–

4,229

Total

–

5,955

Notes:

1. On November 23, 2022, Kyowa Kirin International plc, a consolidated subsidiary of the Group, and its
subsidiaries signed a cooperative agreement for a joint venture with Grünenthal GmbH for the establishedmedicines portfolio including 13 brands owned by Kyowa Kirin International plc and its subsidiaries.
Consequently, it has become certain that control of the division related to sales and marketing of establishedmedicines in the EMEA region will be lost, and therefore goodwill associated with this division has beenclassified as asset held for sale. The procedures to transfer 51% of the shares of the consolidated subsidiarythat will take over the division will be completed in the middle of 2023.
2. Based on the Share Transfer Agreement concluded on February 5, 2019, the Company decided to exercise
the right to sell all the residual interest in the stock of KYOWA HAKKO BIO CO., LTD. to Kirin Holdings
Company, Limited. Accordingly, the residual assets has been classified as assets held for sale. Having
received the consideration as advance payment on December 20, 2022, the Company exercised such righton January 1, 2023, and accordingly completed the share transfer on that date.
15. Equity(1) Share capital and capital surplus
The following table provides the authorized number of shares, the number of issued shares, and changes inthe balances of share capital and capital surplus.
Authorized number Number of issued
Share capital
Capital surplusof shares
shares(Millions of yen)
(Millions of yen)
(Shares)(Shares)

As ofJanuary 1, 2021

987,900,000

540,000,000

26,745463,967

Increase (decrease)

–

–

–

187

As of
December 31, 2021

987,900,000

540,000,000

26,745464,153

Increase (decrease)

–

–

–

281

As of
December 31, 2022

987,900,000

540,000,000

26,745

464,434Note:

All shares issued by the Company are ordinary shares with no par value and which do not limit any rights ofshareholders. All of the issued shares are fully paid.

- 120 -

(2) Treasury shares
The following table provides changes in the number of treasury shares and the balance.
Number of shares (Shares)

Amount (Millions of yen)

As ofJanuary 1, 2021

2,823,975

3,545

Increase (decrease)(152,158)

(186)

As of
December 31, 2021

2,671,817

3,359

Increase (decrease)(150,620)

(183)

As of
December 31, 2022

2,521,197

3,177

Note:

The decreases are mainly due to the exercise of share options and the disposal of treasury shares under the
restricted stock compensation plan.
(3) Nature and purposes of other components of equity(i)

Share acquisition rights
The Company had a share option plan and issued share acquisition rights pursuant to the JapaneseCompanies Act until the fiscal year ended December 31, 2019. The contractual terms, prices and otherinformation are stated in Note “16. Share-based payments.”(ii) Exchange differences on translation of foreign operations
Exchange differences on translation of foreign operations represent the exchange differences arising fromthe translation of the financial statements of foreign subsidiaries denominated in foreign currencies forconsolidation purposes.
(iii) Financial assets measured at fair value through other comprehensive income
Financial assets measured at fair value through other comprehensive income represent net unrealized
gains or losses associated with the fair value of financial assets measured at fair value through othercomprehensive income.
(iv) Remeasurements of defined benefit plans
Remeasurements of defined benefit plans comprise the effects of differences between actuarial
assumptions and actual results at the beginning of the fiscal year and the effects of changes in actuarial
assumptions. They are recognized in full in other comprehensive income in the period in which they occur
and immediately transferred from other components of equity to retained earnings.
(4) Dividends
Fiscal year ended December 31, 2021
(i) Dividends paid
Resolution

Class of shares

Total dividends(Millions of yen)

Dividend per share(Yen)

Record date

March 24, 2021
Ordinary General
Meeting of
Shareholders

Ordinaryshares11,81822.00 December 31, 2020

August 3, 2021
Board of Directors
meeting

Ordinaryshares12,35823.00- 121 -

June 30, 2021

Effective date

March 25, 2021

September 1, 2021

(ii) Dividends whose record date is in the current fiscal year but whose effective date is in the following
fiscal year
Resolution
March 25, 2022
Ordinary General
Meeting of
Shareholders

Class of shares

OrdinarysharesTotal dividends(Millions of yen)

Dividend per share(Yen)

12,359Record date

23.00 December 31, 2021

Effective date

March 28, 2022

Fiscal year ended December 31, 2022
(i) Dividends paid
Resolution
March 25, 2022
Ordinary General
Meeting of
Shareholders
August 4, 2022
Board of Directors
meeting

Class of shares

OrdinarysharesOrdinarysharesTotal dividends(Millions of yen)

Dividend per share(Yen)

Record date

12,35923.00 December 31, 2021

12,89924.00

June 30, 2022

Effective date

March 28, 2022

September 1, 2022(ii) Dividends whose record date is in the current fiscal year but whose effective date is in the following
fiscal year
The following dividends on ordinary shares have been proposed as an agenda (a matter to be resolved)
for the Ordinary General Meeting of Shareholders to be held on March 24, 2023.
Resolution
March 24, 2023
Ordinary General
Meeting of
Shareholders

Class of shares

OrdinarysharesTotal dividends(Millions of yen)

Dividend per share(Yen)

14,512- 122 -

Record date

27.00 December 31, 2022

Effective date

March 27, 2023

16. Share-based payments(1) Overview of share-based payment plans
The Group has implemented a restricted stock compensation plan as an equity-settled share-based
payment plan and a performance-linked share-based remuneration plan (Performance Share Unit) as anequity-settled and cash-settled share-based payment plan for Directors and Executive Officers, and aphantom stock plan as a cash-settled share-based payment plan for certain employees.
(2) Share options(i) Overview of the plan
The Group had a share option plan until the fiscal year ended December 31, 2019, and all of the shareoptions are equity-settled share-based payments. In accordance with the details approved at the Company’s
General Meeting of Shareholders and by resolution at the Company’s Board of Directors meetings, shareacquisition rights issued as share options are granted to the Company’s Directors and Executive Officers
and some Directors of the Company’s subsidiaries. If a grantee is dismissed from their position as Directoror Executive Officer, the relevant share acquisition rights will be extinguished. When the retirement date of a
grantee comes before the expiration of their term of office, the number of share acquisition rights is adjusted
according to the number of months in office. The exercise period is defined in the allotment agreement,
ranging from three to twenty years. If a grantee loses their position or does not exercise the relevant shareacquisition rights during the exercise period, said rights will be extinguished.
(ii) Number and weighted average exercise prices of share options
Fiscal year ended
December 31, 2021
Number of shares(Shares)
Outstanding at beginning of period

Fiscal year ended
December 31, 2022

Weighted average
Weighted average
Number of shares
exercise priceexercise price(Shares)
(Yen)
(Yen)

300,600

1

203,900

1

–

–

–

–

(96,700)

1(93,700)

1

–

–

–

–

Outstanding at end of period

106,200

1

14,000

1

Exercisable at end of period

97,7001

96,2001

GrantedExercised
Forfeited or expired

Notes:

1. The weighted average share price at the date of exercise for the share options exercised during the fiscal
year ended December 31, 2021 and 2022 are ¥3,363 and ¥2,894, respectively.
2. The weighted average remaining contractual lives of the outstanding share options at December 31, 2021
and 2022 are 3.1 years and 2.8 years, respectively.

- 123 -

(3) Restricted stock compensation plan(i) Overview of the plan
Under the plan, the Company’s Directors and Executive Officers receive the Company’s ordinary shares
upon making a contribution in kind of all monetary compensation claims provided by the Company and on
condition that they remain in the position of Director or Executive Officer of the Company for a specified
period.
The Company’s ordinary shares are granted as restricted stock compensation on condition that theCompany and the eligible Director or Executive Officer enter into an agreement which contains the following
terms: (i) the shares shall not be transferred to any third party, have a security interest created on, orotherwise disposed of during a specified period, and (ii) the shares will be acquired by the Company withoutcompensation if certain circumstances arise.
(ii) Number and fair value of shares granted during the year
Fiscal year ended
December 31, 2021
Grant dateFiscal year ended
December 31, 2022

April 13, 2021

April 14, 2022

Number of shares granted (Shares)

61,961

60,113

Fair value (Yen)

3,145

3,140

(4) Performance-linked share-based remuneration plan (Performance Share Unit)(i) Overview of the plan
The Company has a performance-linked share-based remuneration plan (Performance Share Unit) underwhich remuneration varies depending on the level of achievement of performance targets in a three-year
performance evaluation period.
The plan is for the Company’s Directors and Executive Officers. At the beginning of a performance
evaluation period, the “standard number of shares to be delivered” is determined by resolution of the Boardof Directors. After the end of the performance evaluation period, the “standard number of shares to bedelivered” is multiplied by the level of achievement of performance targets in the range of 0% to 150%, andapproximately one-half thereof is delivered as shares and the remaining one-half is paid in cash to theeligible Directors and Executive Officers at a certain point of time, normally in April, every year.
The carrying amounts of liabilities related to the plan as of December 31, 2021 and 2022 were ¥19 millionand ¥87 million.
(ii)

Performance share units existing during the year
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Standard number of shares to bedelivered (Shares)

Standard number of shares to bedelivered (Shares)

Balance at beginning of period–

36,34336,34335,575

Increase-other––

Delivery and payment––

Decrease-other––

Balance at end of period

36,343

71,918Weighted average fair value (Yen)

3,145

3,143

Grant

Note:

The fair value under the plan is measured based on the market price of the Company’s shares at the business- 124 -

day immediately before the date of resolution by the Company’s Board of Directors at the start of the applicable
period of the plan and is not adjusted in consideration of expected dividends.
(5) Phantom stock
The Company and some of its consolidated subsidiaries have a phantom stock plan under which
compensation is settled in cash based on the Company’s share price at the time of vesting.
The plan is for some employees of the Group. The vesting condition is three years of service from the grantdate, in principle. Under the plan, there is no exercise price because compensation is determined and paid
based on the Company’s share price.
The carrying amounts of liabilities related to the plan as of December 31, 2021 and 2022 were ¥547 millionand ¥708 million, respectively.
(6) Amounts recognized in the consolidated statement of profit or loss
Share-based payment expenses recognized in the consolidated statement of profit or loss consisted of thefollowing: They were recorded in “selling, general and administrative expenses” and “research anddevelopment expenses.”(Millions of yen)
Fiscal year ended
December 31, 2021
Equity-settled (restricted stock compensation
plan)
Equity-settled and cash-settled (performancelinked share-based remuneration plan)
Cash-settled (phantom stock plan)
Total- 125 -

Fiscal year ended
December 31, 2022
195

190

38

136

362

535

595

861

17. Employee benefits
The Company and some of its consolidated subsidiaries have defined benefit plans and defined contributionplans for their employees. The defined benefit corporate pension plans provide lump sum payments or
pensions based on the salary, the number of years of service and other factors. However, the Company andsome of its consolidated subsidiaries introduced cash balance plans in their defined benefit corporate pension
plans.
The lump sum payment plans provide lump sum payments based on the salary, the number of years of service
and other factors. Some of them are funded on the grounds that a retirement benefit trust was set up. Funded
defined benefit plans are managed by pension funds or other institutions that are legally separated from theCompany and some of its consolidated subsidiaries in accordance with relevant laws and regulations. Boardsof pension funds and pension investment managers are required by laws and regulations to act in the bestinterest of plan participants and are responsible for managing plan assets in accordance with specified
policies. The Company, some of its consolidated subsidiaries and each pension fund periodically examine thepension finances pursuant to laws and regulations in order to maintain a balanced budget in preparation for theappropriation for future benefits and any deficits in the plans, and recalculate the pension contributions.
These pension plans are exposed to general investment risk, interest rate risk and inflation risk. Assetmanagement policies for plan assets of the Company and some of its consolidated subsidiaries are, in
accordance with the corporate pension fund rules, intended to ensure the payment of defined benefit
obligations in future years and aim for provision of the required returns in the long term within the tolerable risk
range. Specifically, asset management is carried out by taking into account the risks and returns of theinvestment assets and determining an optimal combination from a long-term perspective.
(1) Defined benefit plans(i) Reconciliation of defined benefit obligations and plan assets
The following table provides the relationship between defined benefit obligations and plan assets, and net
defined benefit asset (liability) in the consolidated statement of financial position:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Present value of defined benefit obligations(67,322)(61,786)

Fair value of plan assets

82,39976,712

Net defined benefit asset (liability)

15,077

14,926Retirement benefit liability

(221)

(287)

Retirement benefit asset

15,29815,212

15,077

14,926

Amounts in the consolidated statement of financial
position

Net defined benefit asset (liability) in the
consolidated statement of financial position- 126 -

(ii) Reconciliation of present value of defined benefit obligations
The following table summarizes the reconciliation of the beginning balance of the present value of defined
benefit obligations to the ending balance:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Present value of defined benefit obligations at
beginning of period(66,881)(67,322)

Service cost

(3,425)(3,584)

(410)

(393)

98

91

(237)

6,456

809

70

2,739

2,946

(16)

(51)

(67,322)(61,786)

Interest expense
Remeasurements
Actuarial gains and losses arising from changes
in demographic assumptions
Actuarial gains and losses arising from changes
in financial assumptions
Actuarial gains and losses arising fromexperience adjustments
Benefits paid
Exchange differences on translation of foreign
operations
Present value of defined benefit obligations at endof period
Note:

The weighted average duration of the defined benefit obligations as of December 31, 2021 and 2022 is 12.2
years and 10.7 years, respectively.
(iii) Reconciliation of fair value of plan assets
The following table summarizes the reconciliation of the beginning balance of the fair value of plan assets
to the ending balance:(Millions of yen)
Fiscal year ended
December 31, 2021

Fair value of plan assets at beginning of period

Fiscal year ended
December 31, 2022

81,33982,399502

480

Return on plan assets

1,364(5,232)Contributions from employer

1,864

1,937

Benefits paid

(2,680)(2,923)10

50

82,39976,712

Interest income
Remeasurements

Exchange differences on translation of foreign
operations
Fair value of plan assets at end of period
Note:

The Group plans to contribute ¥1,864 million to the defined benefit plans in the fiscal year ending December 31,
2023.

- 127 -

(iv) Disaggregation of plan assets
The following table provides the components of plan assets:(Millions of yen)
As ofDecember 31, 2021
AssetsAssetswithout awith a quoted
quoted pricepricein an active
in an active
marketmarket

As ofDecember 31, 2022
AssetsAssetswithout awith a quoted
quoted pricepricein an active
in an active
marketmarket

Total

Total

Equity instruments
Equity securities

10,236–

10,236

6,589

–

6,589

38,501–

38,50137,437–37,437

Life insurance generalaccounts–

31,28931,289–25,43925,439Alternatives

–

–

–

6,172

–

6,172

Other

–

2,374

2,374

–

1,075

1,075

48,736

33,66282,39950,19826,51476,712

Debt instruments
Debt securities

Total
Notes:

1. For each life insurance general account, the principal and a certain expected interest rate are guaranteed by
the life insurance company.
2. “Alternatives” mainly consist of investment in foreign bonds.
3. In the fiscal year ended December 31, 2022, the Company reviewed asset allocations in April 2022 taking
into account the management status of plan assets.
(v) Actuarial assumptions
Major actuarial assumptions were as follows:(In percent)
As ofDecember 31, 2021

Discount rate

As ofDecember 31, 2022
0.6

1.4

If the discount rate changes by 0.5%, the impact on defined benefit obligations is as follows:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

+0.5%

(3,807)(2,103)

-0.5%

4,206

4,413

Discount rate
Notes:

1. In these analyses, all other variables are assumed to be constant. In practice, changes in some of theassumptions may occur in a correlated manner.
2. The method used to calculate the defined benefit obligations in the consolidated statement of financial
position was used to calculate the defined benefit obligations in the sensitivity analyses.
(2) Defined contribution plans
Expenses associated with defined contribution plans for the fiscal years ended December 31, 2021 and2022 are ¥5,386 million and ¥5,711 million, respectively.
The above amounts include expenses associated with public plans.

- 128 -

(3) Other employee benefit expenses
The following are expenses related to employee benefits other than post-employment benefits included in
the consolidated statement of profit or loss:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Wages and salaries

43,312

51,638

Employees’ bonuses

15,905

18,960

Other

8,496

9,301

67,71379,899

Total
Note:

Interest expense and interest income on post-employment benefits are included in “finance costs” on a net
basis, and other expenses are included in “cost of sales,” “selling, general and administrative expenses,”“research and development expenses” and “other expenses.”
18. Provisions
The following table provides the nature of and changes in provisions:Fiscal year ended December 31, 2022
(Millions of yen)
Provision
for loss oncompensation(Note 1)

Provisionforbusiness
restructuring(Note 2)

3,400

207

918

194

–

4,357

261

9,336

Increase

–

5

–

–

1,978

277

1,865

4,125

Decrease (used)

–

(229)

(403)

(148)

–

–

(1,790)(2,571)

Decrease (reversed)

–

–

(36)

–

–

(525)

–

(561)

Exchangedifferences ontranslation of foreign
operations

–

17

108

10

–

2

32

169

Balance at end of
period

3,400

–

587

56

1,978

4,110

368

10,498Non-current liabilities

3,400

–

–

–

323

3,809

–

7,532

–

–

587

56

1,655

301

368

2,966

Balance at beginningof period

Current liabilities
Notes:

Provision Provision
Asset
Provision
for returns for loss on
for loss on retirementof expired
product
contracts obligations
products
recalls(Note 5)(Note 6)(Note 4)(Note 3)

Other

Total

1. In order to provide for the payment for the breach of representations and warranties caused by violations oflaws and regulations at KYOWA HAKKO BIO CO., LTD. and for any indemnification claim under special
indemnity provisions, an amount that can be reasonably estimated is recognized as provision for loss oncompensation.
2. In order to provide for the payment in connection with the implementation of restructuring measures, areasonably estimable amount is recognized as provision for business restructuring.
3. In order to provide for returns of expired products, expected returns are recognized as provision for returns of
expired products taking into account historical returns and other factors.
4. In order to provide for the payment for returns and other costs in connection with products to be recalled, areasonably estimable amount is recognized as provision for loss on product recalls.

- 129 -

5. In order to provide for losses arising in connection with performance of joint research and development
agreements, contract manufacturing agreements, and other agreements, reasonably estimable amount isrecognized as provision for loss on contracts.
6. The estimated costs for restoring land and other premises with an obligation to restore them at the end of thelease are recognized as asset retirement obligations.
19. Other financial liabilities
Other financial liabilities consisted of the following:
As of
December 31, 2021
(Millions of yen)

As ofDecember 31, 2022
(Millions of yen)

Averageinterest
rate
(%)

82

90

–

–

1,494

601

–

–

591

948

–

–

20,371

21,639–2023 - 2056

22,537

23,278––Non-current liabilities

16,594

17,549––Current liabilities

5,943

5,729

–

–

Repaymentdue(Year)

Financial liabilities measured at amortized
cost
Deposits received
Other
Financial liabilities measured at fair value
through profit or loss
Derivative liabilities
Lease liabilities
Total

20. Leases(1) Lease income and lease expense
The following table provides amounts recognized in profit or loss in connection with leases:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Depreciation of right-of-use assets by class ofunderlying asset
Buildings and structures

2,830

3,098

Machinery and vehicles

485

566

Land

253

286

Other

0

1

3,569

3,951

Interest expenses on lease liabilities

267

393

Expense relating to short-term leases for which
recognition exemption has been used

551

501

Expense relating to leases of low-value assets forwhich recognition exemption has been used

927

972

Total depreciation- 130 -

(2) Cash outflow for leases
The total cash outflow for leases is as follows:(Millions of yen)
Fiscal year ended
December 31, 2021
Total cash outflow for leases

Fiscal year ended
December 31, 2022
5,221

5,633

The components of the carrying amount of right-of-use assets are disclosed in Note “6. Property, plant andequipment,” and a maturity analysis of lease liabilities is disclosed in Note “30. Financial instruments.”
21. Other liabilities
Other liabilities consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Contract liabilities

40,37433,052

Accrued paid leave

3,035

3,446

704

704

Accrued expenses

8,254

11,163

Other

2,358

6,191

54,72554,556

Non-current liabilities

31,19725,929Current liabilities

23,52828,627

Accrued consumption taxes

Total

22. Trade and other payables
Trade and other payables consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Trade notes and accounts payable

13,892

9,485

Other payables

34,71341,440Refund liabilities

16,047

19,99664,65270,922

Total
Note:

Trade notes and accounts payable and other payables are classified as financial liabilities measured atamortized cost.

- 131 -

23. Revenue
The Group sells merchandise and finished goods and licenses its technologies to customers.
(1) Disaggregation of revenue(i) Revenue by regional control function(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Japan

156,857

148,669

North America

78,793

112,592

EMEA

56,10966,872

Asia/Oceania

28,35930,143

Others32,13040,094352,246

398,371

Total
Notes:

1. Revenue by regional control function is classified based on consolidated revenue from products of regional
control functions in the One Kyowa Kirin (OKK) matrix global management structure, which combines aregional organization based on four regions of Japan, North America, EMEA and APAC, a functionalorganization, and a product organization (product franchises).
2. EMEA consists of Europe, the Middle East, Africa, etc.
3. Others consist of revenue from technology out-licensing, original equipment manufacturing, etc.

- 132 -

(ii) Revenue by product or service(Millions of yen)
Fiscal year ended
December 31, 2021
Merchandise and finished goods

Fiscal year ended
December 31, 2022

326,141

364,596

Nesp

3,982

3,433

Darbepoetin Alfa Injection Syringe[KKF]

22,295

17,628Duvroq

2,566

6,566

Regpara

2,861

2,194

Orkedia

9,858

10,294

Rocaltrol

3,217

3,113

Onglyza

6,173

5,174

Coniel

2,687

1,998

G-Lasta

29,38431,050Fentos

3,858

3,742

Poteligeo

1,996

1,951

Rituximab BS [KHK]

11,198

10,256

Romiplate

7,284

10,440Allelock

8,028

5,965

Patanol

10,694

2,793

Dovobet

7,211

7,753

Lumicef

2,919

3,001

Nouriast

8,662

8,020

HARUROPI

3,114

3,974

Depakene

3,635

3,289

Crysvita

7,180

8,864

Main merchandise and finished goods
Japan:- 133 -

Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Overseas:
Crysvita

78,347

118,239

Poteligeo

15,27722,288

Nourianz

4,536

6,471

Abstral

8,531

6,900

Pecfent

3,917

3,709

Moventig

2,844

3,090

Adcal D3

2,976

3,047

Nesp

6,376

7,570

Regpara

7,398

3,947

Neulasta/Peglasta

5,310

5,629

Gran

6,322

8,205

26,10533,775352,246

398,371

Technology out-licensing
Total
Notes:

1. Revenue from merchandise and finished goods is classified into Japan or overseas (other than Japan)
based on consolidated revenue of regional control functions.
2. Revenue by product does not include revenue from Early Access Program (EAP).
3. Revenue listed as “Technology out-licensing” represents the upfront income , milestone revenue andrunning royalty income that are obtained based on licensing agreements recognizing the granting to third
parties the rights for development, manufacturing and sales of the Group’s pipeline compounds or the use oftechnology, etc.
(2) Change in contract balances
Receivables from contracts with customers and contract liabilities consisted of the following:(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Receivables from contracts with customers
Trade notes and accounts receivable
Contract liabilities
Note:

98,521

103,746

40,37433,052The beginning balances of contract liabilities recognized as revenue in the fiscal years ended December 31,
2021 and 2022 were ¥999 million and ¥9,363 million, respectively. Revenue recognized in the fiscal years
ended December 31, 2021 and 2022 from performance obligations satisfied in previous years was ¥20,286
million and ¥24,010 million, respectively. These amounts mainly consist of milestone revenue and runningroyalties revenue.
Due to changes in estimates of the time frame for satisfying performance obligations of development
cooperation, etc., cumulative catch-up adjustments to revenue were made. As a result, the contract liability
balance increased by ¥2,018 million at December 31, 2022.

- 134 -

(3) Timing of satisfaction of performance obligations
The following table provides the aggregate amounts of the transaction prices allocated to the remaining
performance obligations in contracts associated with revenue from technology out-licensing and when suchamounts are expected to be recognized as revenue. Transactions under contracts with an original expected
duration of one year or less are excluded since a practical expedient has been applied.
(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Within one year

9,785

8,179

After one year through two years

9,785

8,171

After two years through three years

9,781

8,167

After three years

11,023

8,535

40,37433,052Total

24. Selling, general and administrative expenses
Selling, general and administrative expenses consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Employee benefit expenses

55,422

66,327

Sales promotion expenses

38,55847,333

Depreciation and amortization

10,503

10,093

Other

41,12542,431

145,608

166,185Total
25. Other income and expenses
Other income consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Rental income

483

564

Other

502

1,142

985

1,705

Total

- 135 -

Other expenses consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021
Impairment losses

Fiscal year ended
December 31, 2022
5,286

17,979Business restructuring expenses (Note 1)

81

2,394

Provision for loss on contracts (Note 2)

−

1,587

1,249

1,102

6,616

23,061

Other
Total
Notes:

1. These expenditures arise in connection with implementation of restructuring measures.
2. For more details, please refer to Note “18. Provisions.”
26. Finance income and finance costs
Finance income consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Interest income

668

641

Dividend income

122

63

–

2,588

323

27

1,113

3,319

Foreign exchange gain
Other
Total
Note:

Interest income mainly arises from financial assets measured at amortized cost. Dividend income arises fromfinancial assets measured at fair value through other comprehensive income. Gain on valuation of currency
derivatives for the fiscal year ended December 31, 2022 is included in foreign exchange gain.
Finance costs consisted of the following:(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Interest expenses

244

344

Foreign exchange loss

539

−

Other

333

744

1,117

1,088

Total
Note:

Interest expenses mainly arise from financial liabilities measured at amortized cost. Loss on valuation ofcurrency derivatives for the fiscal year ended December 31, 2021 is included in foreign exchange loss.

- 136 -

27. Earnings per share
Information about basic earnings per share and diluted earnings per share is as follows:
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Profit attributable to ordinary equity holders ofparentProfit attributable to owners of parent(Millions of yen)

52,34753,573––

Profit used to calculate earnings per share(Millions of yen)

52,34753,573Weighted average number of ordinary shares
outstanding during year (Shares)

537,272,070

537,431,734

242,100

138,523537,514,170

537,570,257

Basic earnings per share (Yen)

97.43

99.68

Diluted earnings per share (Yen)

97.39

99.66

Profit not attributable to ordinary equity holders ofparent(Millions of yen)

Increase in number of ordinary shares
Share acquisition rights (Shares) (Note)
Weighted average number of dilutive potential
ordinary shares during year (Shares)
Earnings per share

Note:

Please refer to Note “16. Share-based payments” for information about share acquisition rights.

- 137 -

28. Other comprehensive income
The following table provides gains or losses during the fiscal year, reclassification adjustments to profit or loss,
and a tax effect for each item of other comprehensive income:Fiscal year ended December 31, 2021
(Millions of yen)
Gains (losses) Reclassificatio
during year n adjustments

Before tax
effectTax effect

After tax effectItems that will not be reclassified to profit
or loss
Financial assets measured at fairvalue through other comprehensive
income(2,325)–(2,325)702(1,623)Remeasurements of defined benefit
plans

2,034

–

2,034

(623)

1,411

Total of items that will not be reclassified
to profit or loss

(291)

–

(291)

80

(212)

Exchange differences on translation offoreign operations

10,498–

10,498–

10,498

Share of other comprehensive incomeof investments accounted for using
equity method

118

–

118

–

118

Total of items that may be reclassified to
profit or loss

10,616–

10,616–

10,616

Total

10,324–

10,32480

10,404

Gains (losses) Reclassificatio
during year n adjustments

Before tax
effectItems that may be reclassified to profit orloss

Fiscal year ended December 31, 2022
(Millions of yen)Tax effect

After tax effectItems that will not be reclassified to profit
or loss
Financial assets measured at fairvalue through other comprehensive
income

1,561

–

1,561

(493)

1,068

Remeasurements of defined benefit
plans

1,385

–

1,385

(424)

961

Total of items that will not be reclassified
to profit or loss

2,947

–

2,947

(917)

2,029

Exchange differences on translation offoreign operations(5,068)–(5,068)–(5,068)

Share of other comprehensive incomeof investments accounted for using
equity method

121

–

121

–

121

Total of items that may be reclassified to
profit or loss

(4,948)–(4,948)–(4,948)Total(2,001)–(2,001)(917)(2,918)Items that may be reclassified to profit orloss- 138 -

29. Cash flow information
Increase in contract liabilities of ¥38,767 million in the fiscal year ended December 31, 2021 is mainlycomprised of upfront income under an agreement with Amgen Inc. to jointly develop and commercialize
KHK4083, an anti-OX40 fully human monoclonal antibody, for the treatment of atopic dermatitis, with potential
in other autoimmune diseases.
The following table provides changes in liabilities arising from financing activities:(Millions of yen)
Lease liabilities
Balance at January 1, 2021

17,063

Changes from financing cash flows(3,475)

Non-cash changes
Increase due to acquisition of right-of-use assets

6,894

Foreign currency translation differences

1,035

Other

(1,146)

Balance at December 31, 2021

20,371

Changes from financing cash flows(3,767)

Non-cash changes
Increase due to acquisition of right-of-use assets

3,290

Foreign currency translation differences

1,744

Balance at December 31, 2022

21,639- 139 -

30. Financial instruments(1) Capital Management
The Group’s capital management policy is to maintain its health and to ensure a financial foundation with theflexibility to respond to growth investment opportunities according to circumstances in order to realize
sustainable growth and increase corporate value in the medium- to long-term. The Group properly monitors
return on equity (ROE) attributable to owners of parent for capital efficiency. The return on equity attributableto owners of parent is as disclosed in “I. Overview of Company, 1 Key Financial Data, (1) Key consolidated
financial data.”(2) Financial risk management
The Group is exposed to financial risk, such as credit risk, liquidity risk, foreign exchange risk, share pricerisk and other risks, in its business activities. The Group practices risk management to reduce such financial
risk.
Furthermore, the Group utilizes derivatives to manage foreign currency risk and does not engage in
speculative transactions.
(i)

Credit risk management
Trade receivables, etc. arising from business activities are exposed to customer credit risk.
Credit risk is the risk that a customer will cause a financial loss for the Group by failing to discharge acontractual obligation.
In accordance with the regulations for collection and management of receivables, the Group’s each sales
division monitors the collection status of trade receivables, etc. from its main customers on a periodic
basis and manages outstanding balances for each customer. In addition, it strives to identify and mitigate
default risk of customers due to the deterioration of financial position or other reasons at an early stage.
To reduce counterparty risk, the Group enters into derivatives only with high credit rated financial
institutions in principle.
As is the case with other pharmaceutical companies, the Group sells merchandise and finished goods
mainly through several wholesalers in Japan. Total revenue from top four companies accounts forapproximately 62% of revenue in Japan for the fiscal year ended December 31, 2022, and trade accounts
receivable from such four companies as of December 31, 2021 and 2022 are ¥45,305 million and ¥42,404
million, respectively.
The carrying amount of financial assets less impairment losses, which is presented in the consolidated
statement of financial position, is the maximum exposure to credit risk of the Group’s financial assets.
The Group always recognizes an allowance for doubtful accounts on trade receivables at an amount equal
to the lifetime expected credit losses. The Group measures an allowance for doubtful accounts onfinancial assets measured at amortized cost other than trade receivables at an amount equal to 12-month
expected credit losses but did not recognize it taking into account historical losses, future economic
conditions and other factors since it expected the amount was immaterial.

- 140 -

(ii) Liquidity risk management
Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated withfinancial liabilities on their due dates. The Group manages its liquidity risk by financially and adequately
preparing for repayment and holding an adequate volume of liquid assets. In addition, the Group
maintains the size of its commercial paper program and lines of credit provided by financial institutions
and monitors planned and actual cash flows on a continual basis.
The following table provides a maturity analysis of financial liabilities including derivative financial
instruments:
As of December 31, 2021
(Millions of yen)
Due after Due after
Due after
Due after
three
two years
four years Due after
Carrying Contractua Due within one year
years
throughthrough five years
amount l amount one year throughthroughthree
five years
two years
four years
years
Non-derivative financial
liabilities
Trade and other payables
Deposits received
Lease liabilities
Derivative financial liabilities

64,65264,65264,652

–

–

–

–

–

82

82

82

–

–

–

–

–

20,371

25,135

4,164

2,650

2,303

2,159

1,179

12,679

591

591

591

–

–

–

–

–

As of December 31, 2022
(Millions of yen)
Due after Due after
Due after
Due after
three
two years
four years Due after
Carrying Contractua Due within one year
years
throughthrough five years
amount l amount one year throughthroughthree
five years
two years
four years
years
Non-derivative financial
liabilities
Trade and other payables
Deposits received
Lease liabilities
Derivative financial liabilities

70,92270,92270,922

–

–

–

–

–

90

90

90

–

–

–

–

–

21,63927,072

4,737

3,126

2,629

1,508

1,213

13,859

948

948

948

–

–

–

–

–

- 141 -

(iii) Foreign exchange risk management
The Group has operations globally. Accordingly, its trade receivables and payables in foreign currencies,
loans receivable and deposits received from foreign subsidiaries in foreign currencies are exposed toforeign exchange risk. The Group’s foreign exchange risk arises from fluctuations in exchange rates
mainly for the U.S. dollar, euro and British pound.
To manage foreign exchange risk, the Group enters into forward foreign exchange contracts whennecessary for trade receivables and payables in foreign currencies and mainly enters into forward foreignexchange contracts and currency swaps for loans receivable and deposits received from foreignsubsidiaries in foreign currencies.
Derivatives are executed and managed in accordance with internal regulations which prescribe theauthority and limits.
Foreign currency sensitivity analyses
The following table provides the impact of a 1% appreciation of the yen against the U.S. dollar, euro andBritish pound on profit before tax in the consolidated statement of profit or loss for the fiscal years ended
December 31, 2021 and 2022:
In these analyses, all other variable factors, such as balances and interest rates, are assumed to beconstant.
(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

U.S. dollar

(32)

(99)

Euro

(15)

(47)

British pound

1022(iv) Share price risk management
The Group is exposed to share price risk arising from equity instruments (equity securities) held by theGroup.
Equity instruments are managed by monitoring market values and the financial position of issuers, entities
with business relationships, on a regular basis and reassessing whether to continue to hold the
instruments taking into account relationships with such entities on a continual basis.
If the market price of equity instruments held by the Group as of December 31 changes by 10%, theimpacts on other comprehensive income (before tax effect) for the fiscal years ended December 31, 2021
and 2022 are ¥344 million and ¥112 million, respectively.
In these analyses, all other variable factors are assumed to be constant.
(3) Fair value of financial instruments
The Group measures the fair values of financial instruments using the following methods:
Financial assets measured at amortized cost
Since trade and other receivables, cash and cash equivalents, and trade and other payables are settled in ashort period of time, their carrying amounts approximate fair values. The fair value of bonds is estimated at
the present value of future cash flows discounted at rates that reflect their time to maturity and credit risk.
Financial assets measured at amortized cost are not included in the following table since their carrying
amount reasonably approximates fair value.
Other financial assets measured at fair value through profit or loss, other financial assets measured at fairvalue through other comprehensive income, and other financial liabilities measured at fair value throughprofit or loss
The fair value of listed equity securities, among equity instruments, is estimated based on quoted market
prices for the same securities at the end of the fiscal year, and the fair value of unlisted equity securities andinvestments in capital is estimated using a valuation technique that uses the most recent available
information. In estimating the fair value, the Group uses unobservable inputs, such as net asset values, and- 142 -

applies a certain illiquidity discount as necessary.
The fair value of derivatives that are financial assets or financial liabilities measured at fair value throughprofit or loss is estimated based on the prices obtained from counterparty financial institutions.
For financial instruments measured at fair value, the fair value is categorized within Level 1, 2 or 3
depending on the observability and significance of inputs used in the fair value measurement. Transfers
between levels of the fair value hierarchy are deemed to have occurred at each quarter end.
Level 1:
Level 2:
Level 3:

Quoted prices in active markets for identical assets or liabilities
Fair value determined, either directly or indirectly, using observable prices other than thoseincluded within Level 1
Fair value determined using valuation techniques based on unobservable inputs

As of December 31, 2021
(Millions of yen)
Fair value
Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at fairvalue through profit or loss
Derivative financial assets

–

388

596

984

Other financial assets

–

167

–

167

3,445

–

–

3,445

–

–

5,796

5,796

–

(591)

–

(591)

Financial assets measured at fairvalue through other comprehensive
incomeListed equity securities
Unlisted equity securities andinvestments in capital
Liabilities
Financial liabilities measured at fairvalue through profit or loss
Derivative financial liabilities
Note:

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the fiscal year ended
December 31, 2021.

- 143 -

As of December 31, 2022
(Millions of yen)
Fair value
Level 1

Level 2

Level 3

Total

AssetsFinancial assets measured at fairvalue through profit or loss
Derivative financial assets

–

143

–

143

Other financial assets

–

192

–

192

1,118

–

–

1,118

Unlisted equity securities andinvestments in capital

–

–

3,985

3,985

Assets held for sale (Note 1)

–

–

4,229

4,229

–

(948)

–

(948)

Financial assets measured at fairvalue through other comprehensive
incomeListed equity securities

Liabilities
Financial liabilities measured at fairvalue through profit or loss
Derivative financial liabilities
Notes:

1. For details on assets held for sale please refer to “14. Assets held for sale.”
2. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the fiscal year ended
December 31, 2022.
The following tables provide reconciliations from the beginning balances to the ending balances for financial
instruments categorized within Level 3.
(i) Other financial assets categorized within Level 3(Millions of yen)
Fiscal year ended
December 31, 2021

Balance at beginning of period

Fiscal year ended
December 31, 2022
6,182

6,393

Profit or loss (Note 1)

312

352

Other comprehensive income (Note 2)

(505)

(285)

Purchases

319

1,866

Sales

(36)

–

Other

121

(112)

6,393

8,214

Balance at end of period
Notes:

1. Gains and losses included in profit or loss are related to financial assets measured at fair value through profit
or loss at the end of the fiscal year. These gains and losses are included in “finance costs” in the
consolidated statement of profit or loss.
2. Gains and losses included in other comprehensive income are related to financial assets measured at fairvalue through other comprehensive income at the end of the fiscal year. These gains and losses are included
in “financial assets measured at fair value through other comprehensive income” in the consolidated
statement of comprehensive income.
3. For financial assets categorized within Level 3, the department in charge determines the valuation
techniques and measures the fair value of the assets in accordance with valuation policies and proceduresfor fair value measurement approved by an appropriate authorized person. The measured fair value is- 144 -

approved by an appropriate responsible person.
31. Related parties(1) Related party transactions
Fiscal year ended December 31, 2021
Type

Name

Description oftransaction

Transaction
amountParent company

Kirin Holdings Company, Limited

Lending of funds(Note)

271,812

Transaction
amount296,676

Account
Cash andcash equivalents(Millions of yen)
Outstandingbalance
313,026

Fiscal year ended December 31, 2022
Type

Name

Description oftransaction

Parent company

Kirin Holdings Company, Limited

Lending of funds(Note)

Note:

Account
Cash andcash equivalents(Millions of yen)
Outstandingbalance
319,017

The transaction amount for lending of funds represents the average balance during the fiscal year. Interest rates
for loans receivable from the parent company have been reasonably determined taking into account market
rates of interest according to the length of time in accordance with the Company’s own management policy.
(2) Remuneration for key management personnel(Millions of yen)
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Basic remuneration and bonus

398

452

Share-based payments

84

106

481

558

Total
Note:

Remuneration for key management personnel is the remuneration of the Company’s Directors and Audit &Supervisory Board Members.
(3) Significant subsidiaries
Significant subsidiaries are as disclosed in “I. Overview of Company, 4 Subsidiaries and Associates.”
32. Commitments
The following table provides commitments associated with the acquisition of assets after the end of the fiscal
year.
(Millions of yen)
As ofDecember 31, 2021

As ofDecember 31, 2022

Acquisition of property, plant and equipment

15,16522,996

Acquisition of intangible assets (Note)

309,611

251,984

324,776

274,980

Total
Note:

The above amounts mainly comprise the maximum amount of milestone payments for the achievement ofdevelopment and sales targets relating to in-licensing agreements for development products or products. The
actual payments may be significantly different from the above amounts because it is highly uncertain whether amilestone will be achieved.

- 145 -

33. Contingent liabilities
Contingent liabilities consisted of the following:(Millions of yen)
As ofDecember 31, 2021
Debt guarantees for borrowings of associates
Note:

As of
December 31, 2022
277

The above Debt guarantees are for borrowings of the guaranteed companies.
34. Subsequent events
Not applicable.

- 146 -

1,156

(2) Other
Quarterly information for the fiscal year ended December 31, 2022
Year to quarter end

First quarter

Second quarter

Third quarter

Fiscal year ended
December 31, 2021

Revenue (Millions of yen)

87,751

185,271283,775

398,371

Profit before tax (Millions ofyen)

18,71643,47960,40467,572

Profit attributable to ownersof parent (Millions of yen)

16,03835,01749,21253,573

Basic earnings per share
(Yen)

29.85

65.16

91.57

99.68

Quarter period
Basic earnings per share(Yen)First quarter

Second quarter

29.85

35.31

- 147 -

Third quarter
26.41

Fourth quarter
8.11

2

Financial Statements, Etc.

(1)

Financial statements(i)Balance sheet(Millions of yen)

AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Short-term loans receivable from subsidiaries
and associates
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
Tools, furniture and fixtures
Land
Construction in progress
Other
Total property, plant and equipment
Intangible assets
Marketing rights
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Bonds of subsidiaries and associates
Long-term prepaid expenses
Prepaid pension costs
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

As of December 31, 2021

As of December 31, 2022

15,84073,47230,272
9,157
14,202

11,30673,42233,707
14,02013,381350,016

352,508Note 2

14,601(97)
507,462

Note 4

27,387
1,594
10,143
4,282
4,393
6,292
1,301
55,394Note 1

Note 2- 148 -

Note 2

21,836(102)
520,078

Note 4

27,125
1,857
9,991
5,285
4,393
12,6782,033
63,361

Note 1

12,8203,130
15,95010,5143,920
14,434

5,489
122,122
32,5002,519
9,218
39,8953,583(45)215,281286,625
794,087

5,387
122,072
28,5002,709
9,187
38,1832,191(45)
208,185
285,980806,058

Note 2

(Millions of yen)
As of December 31, 2021
Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - other
Income taxes payable
Deposits received from subsidiaries andassociates
Contract liabilities
Provision for loss on product recalls
Provision for loss on contracts
Other
Total current liabilities
Note 2
Non-current liabilities
Provision for loss on compensation
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surplus
Retained earnings
Legal retained earnings
Other retained earnings
Reserve for tax purpose reduction entry of
non-current assets
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Share acquisition rights
Total net assets
Total liabilities and net assets- 149 -

As of December 31, 2022

14,18342,077
9,448

9,295
46,588459

81,011

98,72339,556702−
2,415
189,392

32,291
56
1,978
7,397
196,787

Note 2

3,400
4,327
47
7,774
197,166

3,400
3,777
176
7,353
204,140

26,74526,745

103,807271
104,078

103,807463
104,271

6,686

6,686

1,205

1,137

297,424
162,284
467,600(3,340)595,083

297,424
168,142473,389(3,158)601,247

1,424

452

1,424
414
596,921794,087

452
219
601,918806,058

(ii) Statement of profit or loss
(Millions of yen)
Fiscal year ended
December 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and bonuses
Research and development expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Reversal of allowance for doubtful accounts for
subsidiaries and associates
Gain on sale of shares of subsidiaries andassociates
Gain on sale of investment securities
Gain on reversal of asset retirement obligations
Total extraordinary income
Extraordinary losses
Impairment losses
Loss on valuation of shares of subsidiaries andassociates
Loss on valuation of investment securities
Provision for loss on contracts
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitNote 1
Note 1

Note 1

Note 1

Note 1

Note 2

237,590
82,345
155,244
21,35465,06844,021
130,443
24,802
16,372363
16,735
104
5,504
701
6,309
35,228Note 1
Note 1

Note 1

Note 1

Note 1

253,790
85,973
167,818
22,38765,594
39,203
127,184
40,634
5,768
561
6,330
1,086
7,924
668
9,677
37,287

29,834

–

4,779

–

1,608
–
36,221

2,180
525
2,705

3,727

415

165

–

1,816
–
5,709
65,741
14,982(15,607)(625)
66,366- 150 -

Fiscal year ended
December 31, 2022

Note 3

–
1,587
2,002
37,990
4,803
2,140
6,943
31,047

(iii) Statement of changes in equity
Fiscal year ended December 31, 2021
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings

SharecapitalReservefor tax
Legalpurposeretained
Generalearnings reduction
reserveentry ofnon-current
assetsLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplus26,745

103,80792

103,899

6,686

1,275

Reversal of reserve fortax purpose reduction
entry of non-current
assets

–

–

–

–

–

Dividends of surplus

–

–

–

–

Profit

–

–

–

–

–

–

Balance at beginning of
periodRetainedearnings
brought
forwardTotal
retainedearnings

297,424

120,025

425,411

(70)

–

70

–

–

–

–

(24,176)(24,176)

–

–

–

–

66,366

66,366

–

–

–

–

–

–

–

–

179

179

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

179

179

–

(70)

–

42,26042,19026,745

103,807271

104,078

6,686

1,205

297,424

162,284

467,600

Changes during period

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

Valuation andtranslation adjustments
Valuation
Total
Share
Total netdifference valuationacquisition
Total shareassets
Treasuryonandrightsholders’
sharesavailable- translation
equityfor-saleadjustsecurities
ments
Shareholders’ equity

Balance at beginning of
period(3,515)552,540

2,594

2,594

596

555,730

Reversal of reserve fortax purpose reduction
entry of non-current
assets

–

–

–

–

–

–

Dividends of surplus–(24,176)–––(24,176)

Profit

–66,366–––

66,366

(23)

(23)

–

–

–

(23)

198

377

–

–

–

377

–

–

(1,171)(1,171)(181)(1,352)

175

42,543(1,171)(1,171)(181)

41,191(3,340)595,083

1,424

1,424

414

596,921

Changes during period

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period- 151 -

Fiscal year ended December 31, 2022
(Millions of yen)
Shareholders’ equity
Capital surplus

Retained earnings
Other retained earnings
Reservefor tax
purposeGeneralreduction
reserveentry ofnon-current
assetsSharecapitalLegalcapitalsurplus

OthercapitalsurplusTotal
capitalsurplusLegalretainedearnings

26,745

103,807271

104,078

6,686

1,205

Reversal of reserve fortax purpose reduction
entry of non-current
assets

–

–

–

–

–

Dividends of surplus

–

–

–

–

Profit

–

–

–

–

–

–

Balance at beginning of
periodRetainedearnings
brought
forwardTotal
retainedearnings

297,424

162,284

467,600

(68)

–

68

–

–

–

–

(25,258)(25,258)

–

–

–

–

31,04731,047

–

–

–

–

–

–

–

–

193

193

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

–

193

193

–

(68)

–

5,857

5,789

26,745

103,807463

104,271

6,686

1,137

297,424

168,142473,389

Changes during period

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period

Valuation andtranslation adjustments
Valuation
Total
Share
Total netdifference valuationacquisition
Total shareassets
Treasuryonandrightsholders’
sharesavailable- translation
equityfor-saleadjustsecurities
ments
Shareholders’ equity

Balance at beginning of
period(3,340)595,083

1,424

1,424

414

596,921

Reversal of reserve fortax purpose reduction
entry of non-current
assets

–

–

–

–

–

–

Dividends of surplus–(25,258)–––(25,258)

Profit–31,047–––31,047

(11)

(11)

–

–

–

(11)

193

385

–

–

–

385

–

–

(971)

(971)

(196)

(1,167)

182

6,164

(971)

(971)

(196)

4,997

(3,158)601,247

452

452

219

601,918

Changes during period

Purchase of treasury
shares
Disposal of treasury
sharesNet changes in items
other thanshareholders’ equity
Total changes during
periodBalance at end of period- 152 -

Notes to financial statements
Significant accounting policies
1. Valuation basis and valuation methods for assets(1) Valuation basis and valuation methods for securities
Held-to-maturity debt securities: Amortized cost method (straight-line method)
Shares of subsidiaries and associates: Moving-average cost method
Available-for-sale securities
Securities other than equity shares, etc. with no quoted market value:
Market value method (unrealized gains and losses are recorded in net assets, and the cost of
securities sold is determined by the moving-average method)
Equity shares, etc. with no quoted market value:
Moving-average cost method(2) Valuation basis and valuation method for derivatives
Market value method(3) Valuation basis and valuation method for inventories
Mainly weighted average cost method (carried at the lower of cost and net selling value)
2. Depreciation and amortization method for non-current assets(1) Property, plant and equipment (excluding leased assets)
Straight-line method(2) Intangible assets (excluding leased assets)
Straight-line method(3) Leased assets
Straight-line method over the lease term with no residual value
3. Bases for recognizing provisions(1) Allowance for doubtful accounts
To provide for credit losses on trade and other receivables, an allowance for doubtful accounts is provided
based on past experience for general receivables and based on the collectability of receivables on an
individual basis for specific receivables including doubtful receivables.
(2) Provision for retirement benefits
To provide for employee retirement benefits, a provision for retirement benefits is recognized based on theestimated amounts of retirement benefit obligations and plan assets at the end of the fiscal year.
Past service cost is amortized on a straight-line basis mainly over five years no longer than the expected
average remaining service period of the employees when incurred.
Actuarial differences are amortized on a straight-line basis mainly over 10 years no longer than the expected
average remaining service period of the employees when they occur, starting from the fiscal year following
the fiscal year in which they occur.
(3) Provision for loss on product recalls
In order to provide for the payment for returns and other costs in connection with products to be recalled, areasonably estimable amount is recognized as provision for loss on product recalls.
(4) Provision for loss on compensation
In order to provide for the payment for any indemnification claim, a reasonably estimable amount is recognizedas provision for loss on compensation.
The final amount of indemnification may differ from the amount recognized as provision.
(5) Provision for loss on contracts
In order to provide for the loss due to the performance of joint research and development agreements, contract
manufacturing/manufacturing license agreements and the like, a reasonably estimable amount is recognizedas provision for such loss.
4. Basis for recognizing revenue and expenses
Revenue from contracts with customers
The Company identifies performance obligations in contracts with customers and recognizes revenue in theamount of consideration to which the Group expects to be entitled in exchange for transferring goods orservices to the customers. Such amount does not include amounts collected on behalf of taxation authorities
such as consumption taxes and value-added tax. If the consideration in a contract with a customer includes avariable amount, the variable consideration is included in the transaction price only to the extent that it is highly- 153 -

probable that a significant reversal in the amount of cumulative revenue recognized will not occur when theuncertainty associated with the variable consideration is subsequently resolved.
(1) Revenue from sale of merchandise and finished goods
Revenue under sales contracts for merchandise and finished goods with customers is recognized whenmerchandise and finished goods are delivered to the customers since control of the merchandise andfinished goods is transferred to the customers and performance obligations are satisfied at that point in
time.
Revenue from the sale of merchandise and finished goods is measured at the consideration amountunder sales contracts after deduction of items such as rebates and discounts based on sales volume orsales amount. The Company recognizes as refund liabilities the amount of consideration that it expects torefund to customers. The refund liabilities are estimated by using the most likely amount method based oncontractual terms, historical data and other factors.
Consideration under sales contracts for merchandise and finished goods is received mainly within one
year from the delivery of the merchandise and finished goods to customers. Such contracts do not containany significant financing components.
(2) Revenue from technology out-licensing
The Company earns as revenue from technology out-licensing upfront income, milestone revenue andrunning royalty income under license agreements that grants third parties licenses to develop,
manufacture and sell development products. Some license agreements do not involve the provision of
goods or services by the Company other than the granting of licenses while others involve the provision of
goods or services by the Company on development cooperation such as the provision of manufacturing
technologies and drugs, application for regulatory approval, promotion of joint commercialization, etc.
When the Group does not provide any significant goods or services other than granting a license, upfront
income is recognized as revenue at the time of granting the license since all performance obligations areusually satisfied at the time. Milestone revenue, which is mainly received upon successful completion ofdevelopment activities and regulatory approval, is recognized as revenue when it becomes highly
probable that an agreed-upon milestone, such as application for regulatory approval, will be reached,taking into account the probability of a significant revenue reversal in the future.
When the Group provides more than one significant good or service including granting a license, theGroup identifies a single or more than one performance obligation, allocates the transaction pricecomprised of upfront income and milestone revenue to the performance obligation(s), records the upfront
consideration as a contract liability and recognizes revenue over a period of time by measuring the
progress towards complete satisfaction of that performance obligation. For development cooperation in
relation to license agreements and other performance obligations, the progress is measured using an
input method that is appropriate for each license agreement.
Running royalty income and milestone revenue received for the achievement of sales targets, such as
when the total sales of a drug product exceed a specified amount, are a sales-based or usage-based

5.

royalty and are measured mainly based on the sales recorded by the contract counterparty. The Group
recognizes revenue at the later of when the sale or usage occurs and when the performance obligations
to which the sales-based or usage-based royalty has been allocated are satisfied.
Consideration of license agreements is received mainly within one year from the time of granting thelicense and the time agreed upon in the agreement such as the achievement of a specified milestone.
Such contracts do not contain any significant financing components.
Other significant accounting policies for preparation of financial statements
Accounting for retirement benefits
The accounting methods for unrecognized actuarial differences and unrecognized past service costassociated with retirement benefits differ from the methods for those in the consolidated financial
statements.

- 154 -

Changes in accounting policies
Application of Accounting Standard for Fair Value Measurement, etc.
The Company has applied the “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30,
July 4, 2019) and relevant ASBJ regulations from the beginning of the fiscal year under review, and it hasapplied the new accounting policy provided for by the Accounting Standard for Fair Value Measurement, etc.
prospectively in accordance with the transitional measures provided for in paragraph 19 of the AccountingStandard For Fair Value Measurement, and paragraph 44-2 of the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10, July 4, 2019). There is no impact on the financial statements as a resultof this change.
Significant accounting estimates
Impairment of marketing rights(1) Amount recorded in the financial statements for the current fiscal year
As of December 31, 2021
Marketing rights

As of December 31, 2022

¥12,820 million¥10,514 million(2) Information that assists users in understanding the details of accounting estimates
Please refer to “2. Basis of preparation, (5) Accounting judgments, estimates and assumptions” in thenotes to consolidated financial statements.
Changes in presentation
Statement of income“Inactive facilities expenses” under “Non-operating expenses,” which was presented separately for the previous
fiscal year, is included in “Other” for this fiscal year, because its quantitative materiality decreased. To reflect thischange in the presentation method, we have reclassified the amount in our financial statements for the fiscal year
ended December 31, 2021.
As a result, “Inactive facilities expenses” of ¥35 million and “Other” of ¥666 million presented under “Nonoperating expenses” in the statement of income for the fiscal year ended December 31, 2021, was reclassified as“Other” of ¥701 million.
Balance sheet
Note 1. Assets pledged as collateral and collateralized debt
Assets pledged as collateral
As of December 31, 2021
Investment securities
Other current assets
Note:¥573 million–

As of December 31, 2022¥– million
300

The assets were pledged as collateral in order to utilize the deferred payment system under the Japanese
Customs Act and Consumption Tax Act.

Note 2.

Monetary receivables from and payables to subsidiaries and associates (excluding items presented
separately)
As of December 31, 2021

As of December 31, 2022

Short-term monetary receivables¥15,900 million¥20,636 million

Long-term monetary receivables
Short-term monetary payables

775
14,94720
15,880- 155 -

Note 3.

Contingent liabilities
Guarantee obligations
As of December 31, 2021

Debt guarantees for borrowings ofassociates
Note 4.

¥277 million

As of December 31, 2022
¥1,156 million

The following table provides the reduced amount from the cost of each class of property, plant andequipment acquired with national subsidies and other grants.
As of December 31, 2021

Buildings
Machinery and vehicles
Tools, furniture and fixtures
Construction in progress¥14 million
967
7–

As of December 31, 2022
¥14 million
967
78Note 5. Loan commitments (lender)
The Company entered into either a basic agreement relating to a cash management system or a revolving loan
agreement with each of its subsidiaries and associates, and established a revolving credit line for the Company.
The unused balance and other information under these agreements are as follows:
As of December 31, 2021
Total amount of loan commitments
Outstanding loan balance¥89,521 million
36,991

Unused balance

52,531- 156 -

As of December 31, 2022
¥104,517 million
33,491
71,026

Statement of income
Note 1. Amounts of transactions with subsidiaries and associates
Fiscal year ended
December 31, 2021

Fiscal year ended
December 31, 2022

Amounts of business transactions
Net sales¥54,620 million

Purchase

13,963

17,314Other

16,377

13,91746,7507,084

Amount of other transactions¥69,967 million

Note 2. Reversal of allowance for doubtful accounts for subsidiaries and associates
The Company previously recognized an allowance for doubtful accounts for corporate bonds that were issued by
FUJIFILM KYOWA KIRIN BIOLOGICS Co., Ltd., the Company’s associate accounted for using the equity
method, and that were purchased by the Company. Taking into account the start of the redemption process andthe redemption schedule for such bonds, etc., the Company recognized a reversal of allowance for doubtful
accounts for subsidiaries and associates of ¥29,834 million as extraordinary income in the fiscal year ended
December 31, 2021. In the consolidation process, such “reversal of allowance for doubtful accounts for
subsidiaries and associates” was eliminated. Accordingly, there was no impact of it on the consolidated financial
statements.
Note 3. Provision for loss on contracts
In order to provide for the loss due to the performance of joint research and development agreements, theCompany recorded a provision for loss on contracts of ¥1,587 million under extraordinary losses in the fiscal year
ended December 31, 2022, based on reasonable estimates.
Securities
Fiscal year ended December 31, 2021
Information about shares of subsidiaries and associates (the carrying amounts of the shares of subsidiaries
and those of associates were ¥122,110 million and ¥12 million, respectively) has not been disclosed, since it isextremely difficult to determine their fair value with no quoted market value.
Fiscal year ended December 31, 2022
The fair value of shares of subsidiaries and associates (the carrying amounts of the shares of subsidiaries andthose of associates were ¥122,060 million and ¥12 million, respectively) has not been disclosed, since they are
equity shares, etc. with no quoted market value.

- 157 -

Deferred tax accounting
1. Significant components of deferred tax assets and deferred tax liabilities
As of December 31, 2021

As of December 31, 2022

¥12,112 million
8,469
8,273
5,187
2,169

¥9,887 million
8,946
8,496
4,910
2,345

Deferred tax assets
Contract liabilities
Excess depreciation for tax purposes
Prepaid expenses for tax purposes
Retirement benefit trust
Inventories for tax purposes
Excess amortization of deferred assets for tax
purposes
Shares of subsidiaries and associates
Accrued enterprise tax
Other

2.

2,713

2,234

631
760
7,054

608
141
7,724

Gross deferred tax assets
Valuation allowance

47,368(2,744)45,291(2,713)

Total deferred tax assets
Deferred tax liabilities
Prepaid pension costs
Reserve for tax purpose reduction entry of noncurrent assets
Valuation difference on available-for-salesecurities
Other

44,62442,577(2,823)(2,813)

(544)

(513)

(628)

(200)

(735)

(869)

Total deferred tax liabilities(4,729)(4,394)

Net deferred tax assets

39,89538,183

Reconciliation of significant differences between the statutory tax rate and the effective income tax rate
after the application of deferred tax accounting
As of December 31, 2021
Statutory tax rate
(Adjustments)
Permanently non-deductible items, such asentertainment expenses
Change in valuation allowance
Permanently non-taxable items, such as
dividend income
Income tax credits
Other
Effective income tax rate after application ofdeferred tax accounting

Significant subsequent events
Not applicable.

- 158 -

As of December 31, 2022

30.6%

30.6%

0.1

0.2

(13.9)

(0.1)

(7.0)

(3.5)

(9.6)
(1.2)

(7.0)
(1.9)

(1.0)

18.3

(iv) Annexed detailed schedules
Annexed detailed schedule of property, plant and equipment, etc.

Increase

Decrease

Buildings

27,387

1,294

25

1,532

27,12548,369Structures

1,594

407

1

144

1,857

4,486

Machinery andequipment

10,143

2,733

36

2,850

9,991

48,400Tools, furniture andfixtures

4,282

2,904

17

1,884

5,285

27,072

Land

4,393

–

–

–

4,393

–

Construction inprogress

6,292

14,427–

12,678

–

Other

1,301

1,219

420

2,033

1,989

55,39422,985

6,830

63,361

130,316

Marketing rights

12,820–2,306

10,514

13,848

Other

3,130

3,148

891

3,920

1,662

15,950

3,148

3,197

14,434

15,510Category
Property,plant andequipment

Class of assets

Total
Intangible
assets

Total
Notes:(Millions of yen)
Depreciation Balance at
Accumulated
Decemberor
depreciationamortization 31, 2022

Balance atJanuary 1,
2022

8,041
(413)
67
8,187
(413)
–
1,467
(2)
1,467
(2)

1. The increase in construction in progress is due to the acquisition of assets for ongoing projects, and thedecrease is due to transfers from construction in progress to other classes of property, plant and equipment.
2. Of the increase, major increase is as follows:
Construction in progress
Construction of a new multipurpose facility relating to quality assurance at Takasaki Plant¥5,841 million
3. Impairment losses for the fiscal year ended December 31, 2022 are presented in parentheses in the“Decrease” column.
Annexed detailed schedule of provisions
Account

Balance atJanuary 1, 2022

Increase(Millions of yen)
Balance at
December 31, 2022

Decrease

Allowance for doubtful
accounts

142

5

0

147

Provision for loss on productrecalls

702

–

646

56

Provision for loss oncontracts

–

1,978

–

1,978

Provision for loss oncompensation

3,400

–

–

3,400

(2)

Components of major assets and liabilities
The information is omitted since the Company prepared the consolidated financial statements.

- 159 -

(3)

Other
No special notes.

- 160 -

VI. Outline of Share-related Administration of Reporting Company
Fiscal year

From January 1 to December 31

Ordinary General Meeting of
Shareholders

March

Record date

December 31

Record date for dividends ofsurplusJune 30
December 31

Number of shares per share unit

100 shares

Purchase and sale of sharesless than one unit
Location of administrative
office1-4-1 Marunouchi, Chiyoda-ku, Tokyo
Sumitomo Mitsui Trust Bank, Limited
Stock Transfer Agency Business Planning Department

Shareholder register
administrator

1-4-1 Marunouchi, Chiyoda-ku, Tokyo
Sumitomo Mitsui Trust Bank, Limited

Commissions

Amount specified separately as the amount equivalent to share brokeragecommissions

Method of public notice

The method of public notices of the Company will be electronic public
notices. In the event that electronic public notice is unavailable due to an
accident or any other unavoidable reason, the public notice will be given in
the manner of the publication in the Nikkei (Nihon Keizai Shimbun)
newspaper.
The Company’s website for public notices:
https://ir.kyowakirin.com/ja/

Privileges of shareholders

Not applicable.

Note:

Under the provisions of the Company’s Articles of Incorporation, holders of shares less than one share unit haveno rights other than (i) the rights set forth in the items of Article 189, Paragraph 2 of the Companies Act, (ii) theright to make a demand pursuant to the provisions of Article 166, Paragraph 1 of the Companies Act, (iii) theright to receive an allotment of offered shares and offered share acquisition rights in proportion to the number ofshares held by the shareholder, and (iv) the right to demand that the Company sell to the shareholder a numberof shares which will, when combined with the number of shares already held by the shareholder, constitute one
share unit.

- 161 -

VII. Reference Information of Reporting Company
1

Information about Parent of Reporting Company
The Company does not have a parent company, etc. as prescribed in Article 24-7, Paragraph 1 of the Financial
Instruments and Exchange Act.

2

Other Reference Information
The Company submitted the following documents during the period from the start date of the current fiscal year to thefilling date of this annual securities report.
(1) Securities registration statement and attached documents
A securities registration statement and attached documents were submitted to the Director-General of the Kanto
Local Finance Bureau on March 25, 2022.
(2) Amendment report of securities registration statement
An amendment report of securities registration statement was submitted to the Director-General of the Kanto
Local Finance Bureau on March 28, 2022.
The report is an amendment report in connection with the securities registration statement submitted on March
25, 2022.
(3) Annual securities report and attached documents as well as confirmation letter
An annual securities report and attached documents as well as the relevant confirmation letter for the fiscal year
ended December 31, 2021 were submitted to the Director-General of the Kanto Local Finance Bureau on March
8, 2022.
(4) Internal control report and attached documents
An internal control report and attached documents were submitted to the Director-General of the Kanto Local
Finance Bureau on March 8, 2022.
(5) Quarterly securities reports and confirmation letters
A quarterly securities report and the relevant confirmation letter for the first quarter ended March 31, 2022 were
submitted to the Director-General of the Kanto Local Finance Bureau on May 10, 2022.
A quarterly securities report and the relevant confirmation letter for the second quarter ended June 30, 2022 were
submitted to the Director-General of the Kanto Local Finance Bureau on August 4, 2022.
A quarterly securities report and the relevant confirmation letter for the third quarter ended September 30, 2022
were submitted to the Director-General of the Kanto Local Finance Bureau on November 4, 2022.
(6) Extraordinary report
An extraordinary report was submitted to the Director-General of the Kanto Local Finance Bureau on February 7,
2022.
The report is an extraordinary report pursuant to the provision in Article 19, Paragraph 2, item (xii) (theoccurrence of an event that may have serious effects on the financial position, operating results and cash flow
status of a reporting company) of the Cabinet Office Order on Disclosure of Corporate Affairs of Japan.
An extraordinary report was submitted to the Director-General of the Kanto Local Finance Bureau on March 28,
2022.
The report is an extraordinary report pursuant to the provision in Article 19, Paragraph 2, item (ix)-2 (the result of
voting rights exercised at a shareholders meeting) of the Cabinet Office Order on Disclosure of Corporate Affairsof Japan.

- 162 -

Part II. Information about Reporting Company’s Guarantor, etc.
Not applicable.

- 163 -