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

Securities Code: 4540
Date of sending by postal mail: June 6, 2024
Start date of measures for electronic provision: May 30, 2024
To Our Shareholders:
Terukazu Kato
President, Representative Director and CEO
TSUMURA & CO.
17-11 Akasaka 2-chome, Minato-ku, Tokyo

Notice of the 88th Ordinary General Meeting of Shareholders
We are pleased to announce that you are cordially invited to the 88th Ordinary General Meeting of
Shareholders of TSUMURA & CO. (the “Company”), which will be held as indicated below.
When the Company convenes a general meeting of shareholders, the Company takes measures forproviding information that constitutes the content of reference documents for the general meeting ofshareholders, etc. (matters subject to measures for electronic provision) in electronic format. The wholematters subject to measures for electronic provision are posted on the Company’s website, while a part ofthem is attached in writing to the written documents for shareholders’ convenience. Please access theCompany’s website by using the internet address shown below to review the information.
[The Company’s website]
https://www.tsumura.co.jp/ir/stock/shareholders/index.html (in Japanese)* The materials are also available on the following websites.
Websites on which materials for the General Meeting of Shareholders are posted:
https://d.sokai.jp/4540/teiji/ (in Japanese)
Tokyo Stock Exchange (TSE) website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Access the TSE website by using the internet address shown above, enter “Tsumura” in “Issue name(company name)” or the Company’s securities code “4540” in “Code,” and click “Search.” Then, click“Basic information” and select “Documents for public inspection/PR information.” Under “Filed
information available for public inspection,” click “Click here for access” under “[Notice of General
Shareholders Meeting /Informational Materials for a General Shareholders Meeting].”)If you are unable to attend the meeting in person, you may exercise your voting rights via the Internet orin writing (by mail). Please review the Reference Documents for General Meeting of Shareholders andexercise your voting rights by 5:45 p.m. on Wednesday, June 26, 2024 (JST).

-1-1. Date and Time:Thursday, June 27, 2024, at 10:00 a.m.

2. Venue:“Ho’oh,” 1st floor, THE CAPITOL HOTEL TOKYU
10-3 Nagatacho 2-chome, Chiyoda-ku, Tokyo

3. Purpose of the Meeting
Matters to be reported
1. Business Report and Consolidated Financial Statements for the 88th fiscal year
(from April 1, 2023, to March 31, 2024) and results of audits of theConsolidated Financial Statements by the Accounting Auditor and the Audit
and Supervisory Committee
2. Non-consolidated Financial Statements for the 88th fiscal year (from April 1,
2023, to March 31, 2024)
Matters to be resolved
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Six (6) Directors (Excluding Directors Who Are Audit andSupervisory Committee Members)
Other Matters Regarding the Exercise of Voting Rights■ If a voting card is received without giving any indication of approval or disapproval of any or all of the
proposals, it will be counted as a vote for the proposal concerned.
■ If you vote multiple times via the Internet indicating different positions on the same proposal in eachvoting exercise, only your most recent vote will count as valid.
■ If you exercise your voting rights both in writing and via the Internet, only the vote placed via theInternet will be treated as valid.
■ If you are unable to attend the general meeting of shareholders in person, you may appoint anothershareholder with voting rights in the Company to attend as your proxy. Please note, however, that it isnecessary to submit a document evidencing the authority of proxy.
◎ If revisions to the matters subject to measures for electronic provision arise, notice of the revisions
along with the matters before and after revision will be posted on the respective websites where they
are posted.
◎ Among the matters subject to measures for electronic provision, in accordance with the provisions oflaws and regulations and the Company’s Articles of Incorporation, the following matters are notprovided in the paper-based documents delivered to shareholders who have made a request for deliveryof such documents.
The Audit and Supervisory Committee and the Accounting Auditor have audited the documents subject
to audit, including the following matters.
i) “System to ensure the appropriateness of business operations” and “Summary of the operational
status of the system to ensure the appropriateness of business operations” described in theBusiness Reportii) “Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial
Statements” sections of Consolidated Financial Statementsiii) “Non-consolidated Statement of Changes in Equity” and “Notes to Non-consolidated Financial
Statements” sections of Non-consolidated Financial Statements
These matters i) through iii) are posted on the Company’s website on the previous page.
◎ Please note that starting this time, we will publish the results of the resolutions of the General Meetingof Shareholders on the Company’s website listed on the previous page and will no longer send written
documents to shareholders.

-2-Reference Documents for General Meeting of Shareholders
Proposal No. 1
Proposal No. 1: Appropriation of Surplus
The Company regards the return of profit to shareholders as its important policy. We have determined thereturn to shareholders by taking into account medium- and long-term profit levels, cash flows, and balance
sheet management, etc. We are striving to increase corporate value through efforts to achieve sustainablebusiness growth in Japan and implementing growth investments and laying the foundations for the China
business. Setting DOE (dividend on equity ratio) as its indicator, the Company aims to enhance dividends
with the goal of 5% DOE as the target level for FY2031.
■ Year-end dividends
1) Type of dividend property
Cash2) Allotment of dividend property and the aggregate amountThe Company proposes to pay a dividend of ¥50 per common share of the Company.
The total dividends will be ¥3,826,423,250.
3) Effective date of payment of dividends of surplus
June 28, 2024
<Trend of Dividends>(Note 1)

Concerning the dividends per share and DOE for FY2023 (fiscal year ended March 31, 2024), mattersconcerning the dividends per share of common stock are being presented as a proposal of the 88th Ordinary
General Meeting of Shareholders, and the figures shown here are based on the assumption that this proposal isapproved.

(Note 2)

DOE: Dividend on equity ratio
An indicator to show what level of dividends are being paid as a percentage of equity.

-3-

Proposal No. 2
Proposal No. 2: Election of Six (6) Directors (Excluding Directors Who Are Audit and Supervisory
Committee Members)
The terms of office of all six (6) Directors (excluding Directors who are Audit and Supervisory Committee
Members) will expire at the conclusion of this general meeting.
Accordingly, the Company proposes to elect six (6) Directors (excluding Directors who are Audit andSupervisory Committee Members).
Following discussions by the Audit and Supervisory Committee based on deliberations of theNomination/Remuneration Advisory Committee attended by all of two (2) Outside Directors who are Audit
and Supervisory Committee Members, the Audit and Supervisory Committee believes that the nominatingprocedure was properly followed and all candidates are adequate to serve as Directors of the Company.
The candidates for Directors (excluding Directors who are Audit and Supervisory Committee Members)
are as follows:
Candidate
No.

Name

1

Terukazu Kato

President, Representative
Director and CEO

Reelection

2

Kei Sugii

Director, Co-COO

Reelection

3

Muneki Handa

Director, CFO

Reelection

4

Hiroshi Miyake

Outside Director

Reelection

OutsideIndependent

5

Tadashi Okada

Outside Director

Reelection

OutsideIndependent

6

Ryohei Yanagi

Outside Director

Reelection

OutsideIndependent

Current Position in the Company

-4-

1

Terukazu Kato
Date of Birth

Current Position in the Company(Age 60)

August 26, 1963

President, Representative Director andCEO

Reelection
To our shareholders
Under the corporate philosophy “The Best of Nature and Science,” the Tsumura Group aims to realize
people’s mental and physical health and realizing a spiritually rich society through pharmaceuticals andother products derived from natural products. Inspired by the wonders of nature, we will create new value
by learning from its teachings, and conduct management with our Corporate Purpose “Lively Living forEveryone,” our ultimate business motive and philosophy.
We will dedicate our utmost efforts to enhancing corporate value by creating new social value, such as
expanding access to medical care and extending healthy life expectancy. We sincerely ask for thecontinued support of our shareholders.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1986
Aug. 2001
Jan. 2006
Apr. 2007
Jun. 2011
Jun. 2012
Jun. 2015
Jun. 2019■ Number of theCompany’s
Shares Owned
40,400 Shares

Joined the Company■ Status of
President and Representative Director, TSUMURA USA, INC.
attendance to
Head of Public Relations Department, TSUMURA & CO.
Board of
General Manager, Head of Corporate Communications Department, TSUMURA &DirectorsCO.
meetings:
19/19 (100%)
Director and Executive Officer, Head of Corporate Communications Department,
TSUMURA & CO.
■ Material
relationship
President and Representative Director, TSUMURA & CO.
with thePresident and Representative Director and President and Executive Officer,
Company
TSUMURA & CO.
President, Representative Director and CEO, TSUMURA & CO. (incumbent)
None● Reasons for the nomination as a candidate for Director
As a chairman of the Board of Directors, Mr. Terukazu Kato has operated the Company’s corporate governance systemand strengthened it in several phases, and worked to structure the Board of Directors to have majority Outside Directors,
establish the Nomination/Remuneration Advisory Committee with an Outside Director as its committee chairman, andimprove the effectiveness of the Board of Directors, while successfully carrying out his responsibilities in making
important management decisions and supervising the execution of business.
In addition, he delegated business execution authority to COO (or Co-COO under the cooperative COO system) andfinalized the group-wide management policy as well as the corporate strategy as CEO, established the management
system, carried on external negotiations and made efforts in developing management-level human resources. In order for
the Company to implement the corporate philosophy stated in the corporate purpose, and pursue the aim of achieving
sustainable growth and enhancing its corporate value through the realization of the long-term management vision,
TSUMURA VISION “Cho-WA” 2031, the Board of Directors believes that he is one of the most well-qualified
candidates.
If his election as a Director is approved, Mr. Kato will assume the position of President, Representative Director and CEOof the Company.

-5-

2

Current Position in the Company

Kei Sugii
Date of Birth(Age 54)
Director, Co-COO

December 16, 1969

Reelection
To our shareholders
This fiscal year (ending March 2025) is the final year of the three years of the first medium-term
management plan, which is the stage for laying foundations for realizing the long-term management
vision, TSUMURA VISION “Cho-WA” 2031. We will continue to make upfront investments in R&D,
production facilities, digital transformation and other areas to build solid foundations that will contributeto sustainable business growth and stable product supply as we strive to achieve our stated goals and solve
strategic challenges.
We will create shared value that is rooted in a sustainable society and the natural environment and will
strive to increase our corporate value so that we can contribute to the good of society. We ask our
stakeholders to have high expectations for the future of our Group and to continue to support us.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1994
Jan. 2006
May 2009
Apr. 2013
Apr. 2016
Apr. 2017
Apr. 2018
Apr. 2020
Apr. 2022
Jun. 2022■ Number of theCompany’s
Shares Owned
5,800 Shares

Joined Mitsubishi Petrochemical Engineering Corporation (currently MITSUBISHICHEMICAL ENGINEERING CORPORATION)■ Status ofattendance toJoined Accenture Japan Ltd
Board of
Joined the Company
Directors
Head of Logistics Planning Department, TSUMURA & CO.
meetings:
19/19 (100%)
Head of SCM Planning Department, TSUMURA & CO.
■ Material
General Manager, TSUMURA & CO.
relationship
General Manager, SHENZHEN TSUMURA MEDICINE CO., LTD.
with theGeneral Manager, TSUMURA & CO.
Company
Chairman and General Manager, SHENZHEN TSUMURA MEDICINE CO., LTD.
Executive Officer, Head of Production Division, TSUMURA & CO.
Co-COO, TSUMURA & CO.
None
Director, Co-COO, TSUMURA & CO (incumbent)● Reasons for the nomination as a candidate for Director
Mr. Kei Sugii has extensive experience and insight accumulated through his work in a general consulting company. He
has served as Chairman and General Manager of the Company’s group company in China, and since April 2020, he has
acquired experience as Executive Officer, Head of Production Division. In addition, from April 2022 as Co-COO, he has
been engaged in group-wide business operations based on management policy and corporate strategy and has been
controlling the overall business execution to achieve the plan. In June 2022, he assumed the position of Director, CoCOO. Based on the above reasons, the Board of Directors has full confidence in his ability to carry out his
responsibilities, including making important management decisions at the Board of Directors meetings and supervising
the execution of business. Therefore, the Board of Directors nominates him as a candidate for Director.
If his election as a Director is approved, Mr. Sugii will assume the position of Director, Co-COO of the Company.

-6-

3

Muneki Handa
Date of Birth

Current Position in the Company(Age 61)
Director, CFO

July 7, 1962

Reelection
To our shareholders
The TSUMURA Group formulated its first medium-term management plan based on its long-term
management vision, TSUMURA VISION “Cho-WA” 2031. We have been working to achieve it, and thisfiscal year is the final year of the plan.
Although the business environment surrounding the Company has changed significantly since the time
we formulated the plan, we have since made various investments and implemented various measures toincrease corporate value on a continuous growth basis. In the plan’s final year, we will continue toaccelerate our business activities with urgency.
In line with our new capital policy, which we announced last year, we will do our utmost to meet the
expectations of our shareholders, and we ask for your continued support.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1985
Jun. 2014
Jun. 2015
Jun. 2016
May 2019
Jun. 2019
Apr. 2021

Joined The Mitsubishi Bank, Limited (currently MUFG Bank, Ltd.)
Executive Officer and Managing Director, Head, Retail Credit Division, The Bankof Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.)
Deputy President, Mitsubishi UFJ Capital Co., Ltd.
President, Mitsubishi UFJ Capital Co., Ltd.
Advisor, TSUMURA & CO.
Director, Managing Executive Officer and CFO, TSUMURA & CO.
Director, CFO, TSUMURA & CO. (incumbent)■ Number of theCompany’s
Shares Owned
9,500 Shares■ Status ofattendance to
Board ofDirectors
meetings:
19/19 (100%)■ Material
relationshipwith theCompany
None● Reasons for the nomination as a candidate for Director
Mr. Muneki Handa has extensive experience and insight through his many years of working at financial institutions andhas served as a representative director and president at a venture capital firm. He has executed business as the Executive
Officer in charge of corporate planning, accounting and finance, IT, and other aspects, and he possesses extensive insightof public relations, IR, sustainability, etc. In addition, as CFO, he has executed business relating to group-wide financial
strategies, etc. and has formulated management plans based on management policy and corporate strategy. Based on theabove reasons, the Board of Directors has full confidence in his ability to carry out his responsibilities, including making
important management decisions at the Board of Directors meetings and supervising the execution of business.
Therefore, the Board of Directors nominates him as a candidate for Director.
If his election as a Director is approved, Mr. Handa will assume the position of Director, CFO of the Company.

-7-

4

Hiroshi Miyake
Date of Birth

Current Position in the Company(Age 74)
Outside Director

August 4, 1949

Reelection Outside Independent
To our shareholders
Although the COVID-19 pandemic is coming to an end, the outlook for the future is extremely unclear
with the crisis in Ukraine, interest rate hikes in the U.S., rising materials prices, and many otheruncertainties. Under the effect of these conditions, the Company’s management faces acute inflation,
which is a complete change from the long-standing deflationary economy. Moreover, the number of births
has fallen below 0.8 million for the first time, which highlights again a significant issue to realize asociety where it is easy to have children and a healthy and long-lived society. While I do not feel
optimistic about the environment surrounding the Company, I will devote my utmost energies in pursuitof the Company’s Corporate Purpose “Lively Living for Everyone” to ensure the Company is needed bysociety and can provide solutions and contribute to society.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1973
Oct. 2000

Joined Mitsubishi Corporation
General Manager, Paper & Packaging Raw Materials Division, Mitsubishi
Corporation
Apr. 2001
Deputy Division COO, General Merchandise Division, Mitsubishi Corporation
Apr. 2003
Deputy General Manager, Kansai Branch, Mitsubishi Corporation
Apr. 2005
Senior Vice President, Mitsubishi Corporation
President, Mitsubishi International GmbH, and Deputy Regional CEO for Europe(retired in May 2009)
May 2009
Advisor, Tokai Pulp & Paper Co., Ltd.
Jun. 2009Managing Executive Officer, Tokushu Tokai Holdings Co., Ltd. (retired in June2010)
Jun. 2010
Senior Managing Executive Officer, Tokushu Tokai Paper Co., Ltd.
Jun. 2014
Director, Executive Vice President, Tokushu Tokai Paper Co., Ltd.
Jun. 2015
Representative Director, Executive Vice President, Tokushu Tokai Paper Co., Ltd.
Jun. 2016
Advisor, Tokushu Tokai Paper Co., Ltd. (retired in October 2016)
Oct. 2016
Advisor, Nippon Tokai Industrial Paper Supply Co., Ltd. (retired in March 2018)
Jun. 2018
Outside Director, TSUMURA & CO. (incumbent)■ Tenure as an Outside Director
At the conclusion of this general meeting, Mr. Miyake will have served in the position for six (6)years.

■ Number of theCompany’s
Shares Owned
3,300 Shares■ Status ofattendance to
Board ofDirectors
meetings:
19/19 (100%)■ Material
relationshipwith theCompany

None● Reasons for the nomination as a candidate for Outside Director and overview of expected role
Mr. Hiroshi Miyake has extensive experience and insight as a corporate manager developed over many years and hasbusiness experience in and outside Japan. He served as a president of the local subsidiary of a general trading company
in Germany. In addition, at the Company, he has fully performed his role, including making important management
decisions and supervising the execution of business. At the Board of Directors and Nomination/Remuneration Advisory
Committee, he proactively makes statements and deepens discussions that contribute to sound corporate management.
Based on the above reasons, the Board of Directors has nominated him as a candidate for Outside Director and expects
that he will continue to fulfill the above role after being elected. It is also planned to appoint him as a member of theNomination/Remuneration Advisory Committee again after his election.

-8-

5

Tadashi Okada
Date of Birth

Current Position in the Company(Age 68)
Outside Director

May 1, 1956

Reelection Outside Independent
To our shareholders
The Group formulated the first medium-term management plan to realize its long-term management
vision, TSUMURA VISION “Cho-WA” 2031, and this fiscal year is the final year of the plan. The
realization of this vision is aimed at solving social issues through business, thereby ensuring oursustainable growth and increasing our medium- to long-term corporate value. In particular, the Board of
Directors considers the establishment of a sustainable and stable supply system and the expansion andenhancement of the China business to be the most important issues for our sustainable growth, and theBoard will proactively address them. I will utilize my experience and knowledge to date to contribute toactivities concerning these issues. I will also continue working to strengthen the oversight function of theBoard of Directors for higher corporate governance.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1979
Apr. 2000
Apr. 2003
Apr. 2006
Apr. 2007
Apr. 2008
Feb. 2009
Apr. 2011
Apr. 2014■ Number of theCompany’s
Shares Owned
600 Shares

Joined Komatsu Ltd.
General Manager of Business Development Department, Komatsu Ltd.
■ Status ofVice President of Komatsu (China) Ltd.
attendance to
Board of
General Manager of Corporate Communications Department, Komatsu Ltd.
Directors
Executive Officer, General Manager of Corporate Communications Department,
meetings:
Komatsu Ltd.
19/19 (100%)
Executive Officer, General Manager of Corporate Planning Division, Komatsu Ltd.
■ Material
Executive Officer, Vice President of Industrial Machinery General Headquarters,
relationship
Komatsu Ltd.
with theCompany
Senior Executive Officer, President of Industrial Machinery Division, Komatsu
Ltd.
Senior Executive Officer, Supervising Corporate Communications, CSR, General
Affairs, and Compliance, Komatsu Ltd. (retired in March 2017)
Representative Director and Chairman of QUALICA Inc. (retired in June 2021)
None
Outside Director, TSUMURA & CO. (incumbent)

Jun. 2017
Jun. 2020■ Tenure as an Outside Director
At the conclusion of this general meeting, Mr. Okada will have served in the position for four (4)years.

● Reasons for the nomination as a candidate for Outside Director and overview of expected role
Mr. Tadashi Okada has extensive experience and insight as a corporate manager developed over many years andbusiness experience in and outside Japan. In China, he served as a vice president of the China business headquarters of aconstruction machinery company. In addition, at the Company, he has fully performed his role, including making
important management decisions and supervising the execution of business. At the Board of Directors andNomination/Remuneration Advisory Committee, he proactively makes statements and deepens discussions contributing
to the sustainable enhancement of corporate value. Based on the above reasons, the Board of Directors has nominatedhim as a candidate for Outside Director and expects that he will continue to fulfill the above role after being elected. It isalso planned to appoint him as a member of the Nomination/Remuneration Advisory Committee again after his election.

-9-

6

Ryohei Yanagi
Date of Birth

Current Position in the Company(Age 61)
Outside Director

July 6, 1962

Reelection Outside Independent
To our shareholders
The Group’s philosophy-based management gives priority to both social value and economic value,
which I believe will lead to the creation of shared value. In addition to promoting individual measures that
contribute to patients, I led the “Capital Policy Meeting” as a financial expert, which led to the “Revisionof Basic Capital Policy and Shareholder Return Policy” last November. Going forward, I will continue topromote these policies and contribute to increasing shareholder value. Also, from a sustainable
management perspective, my years of research and practice suggest that non-financial assets andcorporate value are positively related. With the knowledge and experience I have gained over the courseof my career, I will do my utmost to contribute to the advancement of good corporate governance and thecreation of long-term, sustainable corporate value.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1985■ Number of theCompany’s
Shares Owned
200 Shares

Joined The Saitama Bank, Ltd. (The Asahi Bank, Ltd., currently Resona Bank,
Limited) (retired in September 2003)■ Status ofOct. 2003
Joined Eisai Co., Ltd.
attendance toApr. 2005
General Manager of the Finance Dept., Eisai Co., Ltd. (retired in March 2007)
Board ofDirectors
Apr. 2007
Joined UBS Securities Japan Co., Ltd., Executive Director (retired in August 2009)
meetings:
Sep. 2009
Rejoined Eisai Co., Ltd., General Manager of the IR Dept.
15/15
Apr. 2013
Vice President, Deputy CFO & Chief IR Officer, Eisai Co., Ltd.
(100%)
Jun. 2015
Senior Vice President & CFO, Eisai Co., Ltd.
■ Material
relationship
Jun. 2019
Executive Vice President & CFO, Eisai Co., Ltd.
with theApr. 2022
Visiting professor of Waseda University, Graduate School of Accountancy
Company(incumbent)
Jun. 2022
Senior Advisor, Eisai Co., Ltd. (incumbent)
Jul. 2022
Executive Advisor, ABeam Consulting Ltd. (incumbent)
Oct. 2022
Deputy President, M&G Investments Japan Co., Ltd. (incumbent)
Jun. 2023
Outside Director, TSUMURA & CO. (incumbent)
None■ Tenure as an Outside Director
At the conclusion of this general meeting, Mr. Yanagi will have served in the position for one (1)year.

● Reasons for the nomination as a candidate for Outside Director and overview of expected role
Mr. Ryohei Yanagi is a developer of the “Yanagi Model” which indicates a link between non-financial assets andcorporate value, and has extensive experience and insights as a corporate financial officer and a visiting professor of auniversity for many years. In addition, the Company believes that he will enhance and accelerate disclosure of nonfinancial assets toward the creation of ESG and other value, and play a substantial role in the “visualization” of the valueof organization and human capital, etc. Based on the above reasons, the Board of Directors has nominated him as a
candidate for Outside Director. The Board of Directors expects that he will continue to fulfill the above role after being
elected. It is also planned to appoint him as a member of the Nomination/Remuneration Advisory Committee after hiselection.
(Note 1)
(Note 2)

(Note 3)

The respective ages stated for each candidate are current as of June 27, 2024.
The status of attendance to the Board of Directors meeting stated for each candidate is based on data for fiscal
2023 (from April 1, 2023, to March 31, 2024). The status of attendance for Mr. Ryohei Yanagi stated his
attendance after he assumed office on June 29, 2023.
For other notes regarding candidates, please refer to page 11.

- 10 -

■ The candidate for Director
1. Independent officer
The Company has deemed that the candidate for Outside Director has a high degree of independence because he/shesatisfies the Company’s Standards for Determination of Independence of Outside Directors.
The Company has submitted notification to Tokyo Stock Exchange, Inc. that the candidate has been appointed as anindependent officer as provided for in Article 436-2 of the Securities Listing Regulations of the aforementioned
exchange.
2. Entering into a limited liability agreement
Pursuant to Article 427, paragraph 1 of the Companies Act and the Company’s Articles of Incorporation, the Company
has entered into an agreement with the candidate for Outside Director to limit his/her liability for damages arising fromneglecting his/her duties under Article 423, paragraph 1 of the Companies Act. The limit under the agreement is theamount provided for by the applicable laws and regulations. If the candidates for Outside Director are elected, theCompany plans to renew the aforementioned limited liability agreement.
3. Entering into a directors and officers liability insurance policy
Pursuant to Article 430-3, paragraph 1 of the Companies Act, the Company has entered into a directors and officers
liability insurance policy with an insurance company. The policy covers losses, such as the amount of indemnificationand court costs, incurred in cases where an insured receives claims for damages from shareholders, the Company,
employees or third parties during the insurance period arising from the performance of the Company’s duties of theinsured. The insureds in the policy are Directors, Executive Officers, and Officers, etc. of Group companies who havebeen seconded or dispatched from the Company. The insurance premiums are covered entirely by the Company and its
Group companies. If each candidate for Director’ election is approved, they will become insureds under the policy, andthe Company plans to renew the policy with each candidate on July 1, 2024.

- 11 -

(Reference)
Standards for Determination of Independence
Outside Directors who do not fall under any of the following items shall be determined to have
independence.
1. A person who is or was in the past ten (10) years an Executive Director, Executive Officer(Shikkoyaku), Executive Officer (Shikkoyakuin), Manager, General Manager, employee, etc.
(hereinafter referred to as “executives”) of the Company or its consolidated subsidiaries
2. Persons or executives of a legal entity holding, whether directly or indirectly, 10% or more of thetotal number of voting rights of the Company
3. A party for whom the Company or its consolidated subsidiaries(*1) is a major business partner or
executives of such party*1. A party receiving payment from the Company or its consolidated subsidiaries equivalent to 2%
or more of its annual net sales (non-consolidated) or monetary finance from the Company or
its consolidated subsidiaries equivalent to 2% or more of its consolidated total assets in themost recent fiscal year
4. A major business partner of the Company or its consolidated subsidiaries (*2) or the executives of suchbusiness partner*2. A business partner from whom the Company or its consolidated subsidiaries receives payment
equivalent to 2% or more of the Company’s annual net sales or monetary finance equivalent to
2% or more of the Company’s consolidated total assets in the most recent fiscal year
5. An audit corporation that serves as Accounting Auditor of the Company or its consolidated
subsidiaries, or partners and others of the audit corporation
6. Consultant, attorney, certified public accountant and others who provide professional services andobtain monetary and other financial benefits exceeding a cumulative amount of ¥10 million in themost recent fiscal year from the Company, excluding officer compensation
7. Persons or executives of a legal entity receiving donations, grants and others in the amountexceeding ¥10 million from the Company or its consolidated subsidiaries in the most recent fiscal
year
8. A person to whom items 2 through 7 apply during the past three (3) years
9. A person who is or was recently a spouse or within a second degree of consanguinity (hereinafterreferred to as “close relative”) of executives in an important position of the Company or its
consolidated subsidiaries
10. A close relative of a person to whom any of the items 2 through 7 apply (excluding people who are
not in an important position)- 12 -

(Reference)
Approach to Diversity of Directors
The Tsumura Group formulates its long-term management visions and medium-term management plans in
response to social demand and changes in the operating environment, and initiates various measures toachieve them. Along with our value creation cycle, we have, in particular, pursued and evolved a systemfor constantly making appropriate and prompt decisions regarding corporate governance, the foundation ofmanagement.
At present, Outside Directors account for a majority of the Directors. We have built highly effective
governance systems to make decisions on important matters from diverse perspectives, such as those ofpeople with corporate management experience, attorneys at law, and certified public accountants, and toensure that decisions are not made based solely on the knowledge of inside directors.
We will continue to strengthen corporate governance in order to achieve sustainable growth.

(Note) The above shows the system in place as of the end of fiscal 2023.

- 13 -

(Reference) Skill Matrix of the Company’s Board of Directors
We have selected the following skills that the Board of Directors needs in order to carry out the decisionmaking and management supervisory function for achieving the long-term management vision,
TSUMURA VISION “Cho-WA” 2031. If Proposal No. 2 is approved as originally proposed at thisOrdinary General Meeting of Shareholders, the composition of the Board of Directors and the skills
possessed by each Director and Audit and Supervisory Committee Member will be as follows:
Name

Gender

Terukazu
Kato
Kei Sugii

Directors

Muneki
Handa
HiroshiMiyakeTadashi
Okada
Ryohei

Directors who are Audit and Supervisory
Committee Members

YanagiTomihiro
Nagafuchi

Age

OutsideCorporate

Independent

Management

Global

60

◎

〇

54

〇

〇

61

〇

74

●

〇

68

●

〇

61

●

〇

Finance

Sales/

SDGs

marketing

ESG

〇

〇

〇

◎

〇

〇

〇

◎

◎
(China)59

Financialaccounting

〇

〇

〇

〇

〇

〇

〇

IT

Legal risk
management

Human
resources
management

〇

〇

◎

〇

〇

◎

◎

〇

Mitsutoshi
Matsushita(attorney at

53

●

70

●

◎

law)
Akemi
Mochizuki(certified◎

publicaccountant)
Represents male

Represents female(Note)- 14 -

The age stated above is current as of June 27, 2024.

Requirements for skill items
Corporate
Management

A person who has experience as an
executive officer at listed companies or has
insights and experience necessary for theformulation of business strategies and has
the ability to offer advice

Sales/marketing

A person who has insights and experience
regarding sales and marketing, or a person
who is well-versed in the pharmaceuticalindustry and has the ability to offer
appropriate advice on marketingIT

A person who has insights in IT
technologies, etc. and has the ability torecognize a challenge and propose
solutions toward digital transformation

Legal risk
management

A person who has experience in risk
management and has insights andexperience of legal affairs and risks, or
who is qualified as an attorney

GlobalSDGs
ESG

A person who has experience in overseas
business management and has insights
and experience regarding global
corporate management

A person who has insights andexperience in handling climate change
and other environmental issues, or aperson who has insights and experience
regarding expertise of diversity, CSR,
CSV, corporate governance, etc.

FinanceFinancialaccounting

A person who has insights andexperience of finance and financial
accounting, or a person who has
operational experience in financial
institutions, or a person who is qualified
as a certified public accountant or a tax
accountant

Human resourcesmanagement

A person who has experience in theformulation of human resources
strategies and has insights andexperience regarding the field of humanresources development* The “〇” indicates the candidate meets the skill requirements, and the “◎” indicates particular expertisein that skill.

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(Reference)
Corporate Governance of Tsumura
Basic Policy
The Tsumura Group is committed to abiding by what we call the “Spirit of Nature’s Laws” and fulfilling ourultimate purpose of facilitating “Lively Living for Everyone.” In conducting our business, we are guided bythese two tenets along with our management philosophy, expressed as the “Best of Nature and Science,” andcorporate mission: “To contribute to the unparalleled medical therapeutic power of the combination of
Kampo medicine and Western medicine.” To achieve sustainable growth and increase our corporate value
over the medium to long term, our basic policy is to strengthen our corporate governance in order to ensure
sound, transparent, and fair management and make prompt and sound decisions.
In June 2017, Tsumura transitioned from the Company with Company Auditor(s) system described in the
Companies Act of Japan to the Company with Audit and Supervisory Committee system. This move wasaimed at reinforcing the oversight and monitoring functions of the Board of Directors. Under this system,
Tsumura is working to enhance its management supervisory function and innovate its management structureby separating the supervisory function from the executive function and by appointing a majority of Outside
Directors to the Board of Directors. These measures are being implemented to continuously establish thesystems that will enable the Company to ensure the transparency, improve the efficiency, and maintain thesoundness of management.
Overview of Corporate Governance Systems(Note) The above shows the system in place as of the end of fiscal 2023.
Please see our Integrated Report for details of corporate governance.

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Board of Directors
The Board of Directors makes important decisions to ensure sustainable growth and enhance corporate
value over the medium to long term. The Company aims to accelerate decision-making by separating
business execution functions from the Board of Directors. At the same time, we are strengthening thesupervisory function of general management by appointing Outside Directors to comprise the majorityof the Board of Directors and appropriately reflecting their objective views from an independent
perspective as experts with extensive experience.
<Main matters during the 88th fiscal year> Checking the progress of the first medium-term management plan; Checking the progress of the China business (including establishment of the corporate governancesystem); Development of management human resources who will embody the corporate purpose andphilosophy;
 Checking the progress of strategic investment deals (investment in systems including facilities, R&D,
M&A, digital transformation, etc.); and Capital policies, etc.
Nomination / Remuneration Advisory Committee
The Nomination/Remuneration Advisory Committee is a voluntarily established advisory body to theBoard of Directors. The committee is composed of a majority of Outside Directors who have also been
designated as independent directors as stipulated by the Tokyo Stock Exchange (including one Outside
Director who is a member of the Audit and Supervisory Committee). These Outside Directors provide
advice on matters related to the nomination and remuneration of Directors and Executive Officers, etc.
based on inquiries by the Board of Directors and also submit reports to the Board of Directors on thesesubjects. The committee is composed of six (6) members, five (5) of whom, including the committee
chairman, are Outside Directors who have also been designated as independent directors.
<Main matters during the 88th fiscal year> Proposal of election and dismissal of Directors to be submitted to the General Meeting of Shareholders; Draft proposals of election and dismissal of the Representative Director to be submitted to the Boardof Directors;
 Draft proposals of candidates for Executive Officers to be submitted to the Board of Directors;
 Polices for electing Directors and Executive Officers, election process; Draft proposals for individual remuneration to be paid to Directors and Executive Officers; and Policies including the composition of Directors’ remuneration, procedures for determining
remuneration of Directors, etc.

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Audit and Supervisory Committee
The Audit and Supervisory Committee audits the legality and adequacy of the execution of duties byDirectors by conducting systematic audits in cooperation with the Internal Auditing Department, and
the Audit and Supervisory Committee itself holds hearings on the status of business execution with
Executive Officers, etc., attends meetings of the Executive Committee and other important meetings,
exchanges information with Directors and Auditors, etc. of Group companies and monitors and verifies
the establishment and implementation of internal control systems, including those related to financial
reporting.
<Main matters during the 88th fiscal year> Audit policy and plan; Reelection and remuneration of audit corporation;
 Details of matters to be submitted to the General Meeting of Shareholders; Preparation of audit report; and Status of use of the hotline, etc.

Outside Directors’ Meeting
The Outside Directors’ Meeting collects and shares the information necessary for management
decision-making. At the same time, it acts as a venue for the exchange of opinions regarding thenecessity of discussions and other matters with the Board of Directors.
<Main matters during the 88th fiscal year> Advance explanation about matters to be discussed at the Board of Directors;
 Follow-up on the Board’s effectiveness evaluation;
 Briefing on Executive Committee matters; Progress report of China business; and Discussion of important matters, etc.
(Note)

The above shows the system in place as of the end of fiscal 2023.

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(Reference)
Evaluation of effectiveness of Board of Directors
The Company evaluates and analyzes the effectiveness of the Board of Directors every fiscal year for the
purpose of enhancing the Board of Directors’ effectiveness.
The Company shifted to the Company with Audit and Supervisory Committee in 2017 to strengthen the
supervisory function of the Board of Directors and further enhance the soundness and transparency ofmanagement by appointing Outside Directors to comprise the majority of the Board of Directors. We have
put in place a system that enables swift and resolute decision-making by separating the business executionfunction from the Board of Directors. Therefore, from the perspective of strengthening the supervisory andmonitoring functions of the Board of Directors, we are working to ensure continuous improvement withrespect to the issues identified through the analysis of the results of the evaluation of the effectiveness of theBoard of Directors and are endeavoring to further improve the effectiveness of the Board of Directors.
Regarding the effectiveness of the Board of Directors in fiscal 2022, a questionnaire evaluation was
conducted for all nine Directors, and the issues identified and specific measures for addressing them werediscussed at the Board of Directors meeting held in May 2023. We designed the questionnaire in house thisyear as well, based on the initial questionnaire developed with an external organization in fiscal 2020. We
are working to conduct a more objective evaluation and analysis by utilizing an external organization tocollect responses and compile the result, while securing confidentiality.
1. Details of evaluation (6 categories, 25 items)
The evaluation for fiscal 2022 was conducted from the perspectives of confirming the status of efforts toaddress issues identified in the results of the analysis of the previous year’s effectiveness evaluation,
confirming the themes that require priority supervision in order for the Board of Directors to fulfill its roleand identifying issues and considering measures for addressing them so as to further improve effectivenessin the future.
(1) Priority management themes(2) Composition of the Board of Directors(3) Roles and duties of the Board of Directors(4) Proceedings of the Board of Directors(5) Enhancement of discussions at meetings of the Board of Directors and provision of information(6) Relationship between the Board of Directors and shareholders and other stakeholders
2. Overview of evaluation result
As a result of this year’s analysis and evaluation, it was confirmed that the Board of Directors is fulfilling
its role and function, with active discussions aimed at ensuring substantial supervision and monitoring ofbusiness execution.
In the effectiveness evaluation questionnaire for each Director, a certain percentage of the respondents
answered “accomplishing sufficiently” or “accomplishing overall” to many of the questions.
Improvement was seen in all items to be focused on in the previous fiscal year as priority issues.
<Reviewing the Board effectiveness in FY2022>
1. As for the composition of the Board of Directors, currently the number is appropriate for active discussion
and exchange of opinions. In addition, the Board of Directors is composed of diverse members withvarious types of experience and expertise, which is required for matters to be properly discussed at theBoard of Directors meetings. Furthermore, the Board of Directors operates in an atmosphere thatencourages the frank, free, and open expression of opinions. We will continue to discuss theappropriateness and diversity of the composition of the Board of Directors.
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2. The Board of Directors has established “Lively Living for Everyone” as the corporate purpose and has
discussed priority issues for the realization of TSUMURA VISION “Cho-WA” 2031, the long-term
management vision established to realize the management philosophy and corporate mission of theCompany’s basic principles. Furthermore, in addition to confirming the progress of the first medium-term
management plan from fiscal 2022 to fiscal 2024, based on the theme of “laying the foundations forcreating a future that achieves ‘Cho-WA’ (a well-balanced state),” decisions were made for the realizationof priority issues.
3. Operations in China constitute a strategic challenge that is highly important for the Tsumura Group’s
sustainable growth and the enhancement of our corporate value over the medium to long term. The
activities of operations in China were frequently reported to the Board of Directors; discussions were heldconcerning policies, plans and strategies for the operations; and decision-making over important matters
was made.
<The status of efforts to address the issues identified during fiscal 2021>
1. China business
As for operations in China, to implement M&A aimed at developing the foundation of a traditional Chinese
medicines business, the process of M&A is also reported to the Board of Directors periodically in order totighten oversight and speed up the decision-making of the Board.
2. Establishment of governance systems for Group companies
As for the establishment of governance systems for Group companies, we secured and developed humanresources of Chinese Group companies and strengthened the governance system of the entire Group by
establishing a governance system in which Tsumura China Inc., the company that controls all ouroperations in China, mainly supervises the execution status of each Group company. We also strengthened
the supervision and monitoring of the Board of Directors, including establishing and implementing thesystem based on the “three lines of defense” (first line: operating divisions; second line: administrative
divisions; third line: internal auditing divisions) approach in risk management.

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Future Issues and Response Measures
Based on the results of the fiscal 2022 effectiveness evaluation, we will take the following measures tofurther improve the effectiveness of the Board of Directors.
1.

Confirmation of progress of strategic investment deals
We will aim to maximize the effect of investments by taking the following actions concerning theconfirmation of the progress of strategic investment deals.
 Decide on the overview and direction of strategic investment deals by the Board of Directors;present policies to the executive side; and oversee whether strategizing and investment are
carried out in accordance with the policies.
 Consider capital investment for the establishment of systems for the stable supply of products
from all aspects, such as construction costs, securing human resources, the “smartification” offactories and sustainability, and make decisions, including where to strengthen in Japan andoverseas.
 Oversee the recovery plans for strategic investment deals, and instruct revisions to the plans asnecessary.

2.

Digital transformation
We will aim to establish an information infrastructure for digital transformation by taking thefollowing actions that target the “Kampo value chain,” based on the “Digital transformation for
Purpose” policy.
 Discuss the “ideal way of being” when digital transformation is implemented at the Board of
Directors meetings; present policies on overall planning; and oversee the speed of execution,
cost effectiveness, etc.
 Oversee important issues regarding the current state of implementation of digitaltransformation, the measures aimed at their resolution and the status of progress.

3.

Sharing of information outside the Company
We will aim to enhance corporate value by taking the following actions to enhance information
disclosure.
 Increase opportunities for dialogue through quarterly financial results briefings, one-on-one
meetings with analysts and investors, and IR for foreign institutional investors and also makeefforts to foster an environment for information dissemination with a wide range ofstakeholders in mind, including general consumers.
 Conduct ample discussions in the Board of Directors on the content of information to becommunicated in order to ensure the Group’s businesses and efforts to enhance corporate value
are correctly conveyed and evaluated.

Furthermore, this fiscal year, we will be focusing on tackling the following five items as key management
issues, including confirmation of the progress of strategic investment deals mentioned earlier.
<Five Key Themes for the Board of Directors in Fiscal 2023>
1. Checking the progress of the first medium-term management plan
2. Checking the progress of the China business (including establishment of the corporate governancesystem)3. Development of management human resources who will embody the corporate purpose andphilosophy
4. Checking the progress of strategic investment deals
Investment in systems including facilities, R&D, M&A, digital transformation, etc.
5. Capital policies
The Company’s Board of Directors believes in presenting policies that are based on the external
environment and performing supervision of execution by the executive side that is based on strategizingthat is in line with policies and receiving reports as needed. The Company will continue to implement the- 21 -

PDCA cycle with the aim of realizing further improvements in the effectiveness of its Board of Directors.

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