Corporate Governance Report
CORPORATE GOVERNANCE

BML, Inc.

Last Update: July 5, 2024

BML, Inc.
Kensuke Kondo, President and Representative Director
Contact: Public and Investor Relations Section, Group Planning Dept.
Securities code: 4694
https://www.bml.co.jp/eng/index.html
The corporate governance of BML, Inc. (the “Company”) is described below.

I.

Basic Views on Corporate Governance, Capital Structure, Corporate Attributes, and OtherKey Information

1.

Basic Views
BML, Inc. (hereinafter, “the Company”) is striving to achieve sustainable growth and improve the value of the Company with theaim of “becoming the most trusted choice in the medical world.”
In order to achieve this goal, the Company has positioned the strengthening of corporate governance as an important management
issue, and is increasing the transparency and speed of decision-making, strengthening management functions, and responding
quickly to changes in the business environment.
As a company with Audit and Supervisory Board members, the Company has introduced an executive officer structure to increase
the speed of business execution, and the Board of Directors and the Audit and Supervisory Board supervise and audit the executionof duties by executive officers. In addition, the Company has elected multiple outside directors and outside Audit and Supervisory
Board members to strengthen the supervisory functions of the Board of Directors and the audit functions of the Audit andSupervisory Board.

Reasons for Non-compliance with the Principles of the Corporate Governance Code
The Company is implementing each principle set forth in the revised Corporate Governance Code (revised June 2021) (including
content for Prime Market-listed companies).

Disclosure Based on each Principle of the Corporate Governance Code(Updated)[Target code]
The Company practices disclosure based on the revised Corporate Governance Code (revised June 2021) (including content for
Prime Market-listed companies).

[Supplementary Principle 1-2-4]
The Company allows voting rights to be exercised via the Internet or through an electronic voting platform in consideration of theexercise of voting rights by institutional investors and overseas investors. In addition, the English version of the Notice of theGeneral Meeting of Shareholders is also published on the Company’s website at the same time as the Japanese version.
https://www.bml.co.jp/eng/index.html

1

[Principle 1-4]
The Company has established a “Basic Policy regarding Cross-shareholdings,” and the Company holds a limited quantity of crossshareholdings and exercises its voting rights in accordance with that policy.
In addition, the appropriateness of holding individual issues in a cross-shareholding is periodically verified by the Board of
Directors.

[Principle 1-7]
Although the Company does not have any transactions with its officers, if a conflict-of-interest transaction occurs in the future, itwill be approved and confirmed, etc. by the Board of Directors, etc. in accordance with laws and regulations. In addition, decisions
on transactions with major shareholders, etc. are made in the same manner as decisions on transactions with third parties.

[Supplementary Principle 2-3-1]
The Company has established an “Environmental Policy” with the basic philosophy of working to protect the global environmentand caring for people and the planet, and is actively working toward the realization of a sustainable society.
The Board of Directors continues to discuss the response to issues relating to sustainability, such as global environmental issues
like climate change, respect for human rights, and consideration for employee health and the working environment, with therecognition that sustainability is an important management issue that will lead to profit opportunities in addition to reducing risk.

[Supplementary Principle 2-4-1](i) Principle of ensuring diversity
The Company’s ninth Medium-Term Management Plan sets the framework of “achieve a workplace where employees canwork comfortably and are rewarded for their effort” and “achieve vibrant human resources and a vibrant organization,” andthe Company is working to ensure the diversity of human resources from the perspective of “reforming corporate culture,”
which is a key theme supporting the Company’s human resource strategy. In particular, the Company is promoting a change inmindset with regard to the promotion of female human resources and is proactively improving the workplace environment.
Mid-career hires already account for around half (57%) of managerial positions, and the Company will continue to make no
distinction between new graduate hires and mid-career hires when determining promotions.
As the Company’s business is primarily focused on the domestic market, the Company is not currently utilizing foreign national
human resources; however, the Company will continue to examine the recruitment of foreign national human resources asnecessary while keeping an eye on future changes in the medical industry.

[Target]Ratio of women among managerial positions
Actual results

TargetMarch 31, 2022

March 31, 2023

March 31, 2024

April 1, 2024

March 31, 2029

9.3%

11.2%

12.8%

14.2%

18.0%

2

(ii) Human resource development policy and internal environment improvement policy
The Company provides rank-based training to employees based on a role/rank system so that they can acquire the knowledge
and skills necessary to fulfill the roles required at each rank. By having all employees share a common understanding of theroles required of each rank and learn the knowledge and skills necessary to fulfill their respective roles and responsibilities,
the Company can drastically raise the level of its human resources, which in turn will contribute to the sustainable developmentof the organization.
With regard to the diversity of core human resources, the Company is proactively selecting female human resources andincreasing the number of women in managerial positions by implementing systematic and intensive training programs.
At the same time, the Company is working to create a corporate environment that allows all employees to be conscious ofwork–life balance and choose their own way of living and working.
The Company will continue to ensure the diversity of its core human resources by reviewing both its systems and environment
as necessary, and by promoting the “creation of a workplace that is easy to work in” and the “creation of rewarding workplace,”in line with diversifying values and social trends.

[Principle 2-6]
The Company’s officer in charge of human resources, Financial Officer, and Secretariat examine future operational policies basedon quarterly reports from pension asset management companies such as life insurance companies regarding investment
performance during the relevant period as well as future prospects. In addition, all the Company’s pension assets are managed
through management companies such as life insurance companies, and there are no conflicts of interest between beneficiaries andthe company.

[Principle 3-1]
(i)

The Company’s management philosophy and management strategies are disclosed on the Company’s website, integrated
report, financial results presentation, etc.
Website: https://www.bml.co.jp/eng/
Integrated report: https://www.bml.co.jp/eng/ir/library/pdf/annual_pdf01.pdf
Financial results presentation:
https://contents.xj-storage.jp/xcontents/AS07074/39b166d9/d362/4b15/a602/84f5761120ec/20240527112223670s.pdf(ii) The Company’s basic policy on corporate governance is disclosed in the Corporate Governance Report.
(iii) Remuneration for directors, etc. is set based on the deliberation of the Nomination and Compensation Committee, and theCompany’s policy and procedures for determining remuneration are disclosed in the securities report.
https://www.bml.co.jp/news/assets/pdf/20240627_IR_3.pdf(Japanese only)(iv) The Company submits proposals for the election, dismissal, and nomination of directors to the General Meeting of
Shareholders after deliberation by the Nomination and Compensation Committee, and proposals on the election, dismissal,
and nomination of Audit and Supervisory Board members to the General Meeting of Shareholders after deliberation by the
Audit and Supervisory Board, which includes outside Audit and Supervisory Board members.
(v) Director and Audit and Supervisory Board member nominees, as well as their background and reason for nomination, etc.,
are stated in the Notice of the General Meeting of Shareholders.

3[Supplementary Principle 3-1-2]
The Company discloses information such as Notice of the General Meeting of Shareholders, earnings reports, financial resultspresentations, etc. in English to foreign investors on the Company’s website in light of the ratio of foreign investors in the Company.
Website: https://www.bml.co.jp/eng/index.html[Supplementary Principle 3-1-3]
The Company discloses its sustainability initiatives, investments in human capital, and response to climate change on the
Company’s website and in the integrated report below.
Website: https://www.bml.co.jp/eng/corporate/sustainability.html
Integrated report: https://www.bml.co.jp/eng/ir/library/pdf/annual_pdf01.pdf[Supplementary Principle 4-1-1]
Detailed and specific standards for the discussion and reporting of matters to be decided by the Board of Directors, the Management
Committee, or Ringi approval are established in accordance with the degree of importance, and matters other than those to beresolved by the Board of Directors are approved by officers through Ringi approval. In addition, the authority and division ofduties, etc. of operating officers and internal department managers are clarified in internal regulations, and a system is in place toregularly conduct reviews in response to organizational changes.

[Supplementary Principle 4-2-2]
The Company has formulated a basic policy on sustainability that is disclosed on the Company’s website and in the integrated
report below.
Website: https://www.bml.co.jp/eng/corporate/sustainability.html
Integrated report: https://www.bml.co.jp/eng/ir/library/pdf/annual_pdf01.pdf[Principle 4-4]
Two of the Company’s three Audit and Supervisory Board members are elected as outside Audit and Supervisory Board Members.
In addition, Audit and Supervisory Board members are lawyers and tax accountants, so they can draw upon their highly specialized
knowledge and extensive experience to express their opinions to the Board of Directors as appropriate.

[Principle 4-8]
The Company has elected three independent outside directors. Independent outside directors account for more than one-third of
the Company’s directors. They express objective opinions from a neutral standpoint and fully fulfill their responsibilities based on
their extensive experience, knowledge, and broad insights in specialized fields.

[Supplementary Principle 4-8-3]
As of April 26, 2024, the Company has no controlling shareholder.

4

[Principle 4-9]
The Company elects outside directors in compliance with the provisions stipulated in the Company’s “independence criteria foroutside directors” after determining that there is no risk of conflict of interest with general shareholders from an objective andneutral standpoint independent from the Company.

[Supplementary Principle 4-10-1]
In March 2019, the Company established the Nomination and Compensation Advisory Committee with the aim of strengthening
the independence, objectivity, and accountability of the Board of Directors’ functions regarding the nomination, remuneration, etc.
of directors and Audit and Supervisory Board members. The name of the Committee was changed to the Nomination andCompensation Committee in June 2021.

(Role of the Nomination and Compensation Committee)
The Nomination and Compensation Committee deliberates on the following matters, compiles opinions, and reports to the Boardof Directors in response to inquiries from the Board of Directors or the President and Representative Director:(i)

Draft proposals for the General Meeting of Shareholders regarding the election and dismissal of directors and Audit andSupervisory Board members;(ii) Draft proposals for the appointment and removal of Representative Directors and titled directors;(iii) Draft proposals for the division of duties of executive directors;(iv) Other matters regarding the election and dismissal of directors and Audit and Supervisory Board members, and theappointment and removal of Representative Directors and titled directors, etc., that are deemed necessary by the Board of
Directors;(v) Draft proposals for the General Meeting of Shareholders regarding the remuneration, etc. of directors and Audit andSupervisory Board members;(vi) Draft policy regarding decisions on remuneration, etc. for individual directors;(vii) Other matters regarding the remuneration, etc. of directors and Audit and Supervisory Board members that are deemednecessary by the Board of Directors.

(Composition of the Nomination and Compensation Committee)
The Nomination and Compensation Committee is made up of three or more directors appointed by resolution of the Board of
Directors, the majority of whom are independent outside directors. In addition, the Committee chairperson is appointed from among
the independent outside directors who are members of the Committee from the perspective of ensuring the transparency andobjectivity of deliberations, thereby strengthening independence.

[Principle 4-11](i) The Company’s Articles of Incorporation stipulate that the Board of Directors shall be made up of no more than 16 members.
As of June 27, 2024, the Board of Directors consists of nine members (eight men and one woman), including three outside
directors.
(ii) The Company elects people with appropriate experience and ability, as well as necessary knowledge of finance, accounting,5human resources, labor, risks, and legal affairs, as Audit and Supervisory Board members.
(iii) The Company evaluates the effectiveness of the Board of Directors every year to ensure its effectiveness and to continually
improve its functionality.

[Supplementary Principle 4-11-1]
The Company’s basic policy is to have the Board of Directors and Audit and Supervisory Board made up of personnel, within thelimits stipulated in the Articles of Incorporation (16 directors, four Audit and Supervisory Board members), whom the Company
deems appropriate in light of the balance of knowledge, experience, ability, etc. associated with each business.
When electing directors, the Company appoints the candidates upon comprehensive evaluation and judgment of their experience,
insight, expertise, etc. based on its management philosophy and management strategy, and discloses their skill matrix as a referencematerial in the Notice of Annual General Meeting of Shareholders.
In addition, the Company elects outside directors based on its criteria for determining that they meet the qualifications of an
independent officer and that there is no risk of creating a conflict of interest with general shareholders in addition to the externality
requirements under the Companies Act, so the Company plans to continue to follow its traditional approach when electing directors.
The skill matrix is provided in the Notice of General Meeting of Shareholders.
https://contents.xj-storage.jp/xcontents/AS07074/e0f3c7e2/0c68/4b45/9ab7/c4dc8e213377/140120240604520711.pdf[Supplementary Principle 4-11-2]
The Company’s directors and Audit and Supervisory Board members, including outside directors and outside Audit andSupervisory Board members, allocate the time and effort necessary to appropriately fulfill their roles and responsibilities to theiroperations as directors and Audit and Supervisory Board members, and keep concurrent positions to within a reasonable range.
The concurrent positions held by directors and Audit and Supervisory Board members are disclosed in the Notice of General
Meeting of Shareholders and in the securities report.
Notice of General Meeting of Shareholders:
https://contents.xj-storage.jp/xcontents/AS07074/e0f3c7e2/0c68/4b45/9ab7/c4dc8e213377/140120240604520711.pdf
Securities report: https://www.bml.co.jp/news/assets/pdf/20240627_IR_3.pdf(Japanese only)[Supplementary Principle 4-11-3]
The Company analyzes and evaluates the effectiveness of the Board of Directors as a whole based on the evaluation and opinionsof each director regarding the Board of Directors’ composition, management, agenda, support system, etc. The Company conducteda self-assessment survey to analyze and evaluate the effectiveness of the Board of Directors and found that it was generally properly
maintained and secured; however, the Company will strive to further enhance the Board of Directors’ deliberations and improve
its effectiveness based on the content of other opinions.

[Supplementary Principle 4-14-2]
The Company strives to ensure that its directors and Audit and Supervisory Board members acquire the necessary knowledge, andunderstand their roles and responsibilities, such as by holding training sessions on expected roles and responsibilities, and providing
opportunities to participate in external training sessions and seminars, etc.

6The Company also provides opportunities for information provision to outside directors and outside Audit and Supervisory Board
members on an ongoing basis, such as by holding training sessions similar to the ones attended by directors and Audit andSupervisory Board members, and by holding briefing sessions and office tours to allow for an understanding of the Company’sbusiness, etc.

[Principle 5-1]
For shareholders and investors, the Company holds financial results presentations attended by top management once every 6months, and also regularly holds small meetings using a web conferencing system.
In addition, the Company holds online briefing sessions for individual investors to deepen their understanding of the Company.
Furthermore, the Company takes every precaution to prevent leaks of insider information when communicating with shareholders.

[Supplementary Principle 5-1-1]
With regard to dialogue with shareholders, the President, vice-president, and other executives attend financial results presentations,investor meetings, etc. to the extent reasonable.

[Principle 5-2]
The Company has formulated its ninth Medium-Term Management Plan for the 5-year period from fiscal year 2024 through 2028.
In this Medium-Term Management Plan, the Company continues to pursue its goal of contributing to people’s health and becoming
the most trusted choice for people in the medical world as well as the other industries in which the Company is engaged in business.
The Medium-Term Management Plan positions the upcoming 5-year period as a period to “firmly establish business expansion for
the next 10 years” based on this Corporate Philosophy and Group Vision, and the Company will substantially expand its businessbase through concentrated investment while maintaining business growth.
Medium-Term Management Plan: https://www.bml.co.jp/news/assets/pdf/20240510_IR_3.pdf(Japanese only)[Action to Implement Management that is Conscious of Cost of Capital and Stock Price]
Please refer to the integrated report and financial results presentation posted on the Company’s website for measures to realize
management that is conscious of capital costs and stock prices.
Integrated report (p. 32): https://www.bml.co.jp/eng/ir/library/pdf/annual_pdf01.pdf
Financial results presentation (pp. 52–54):
https://contents.xj-storage.jp/xcontents/AS07074/39b166d9/d362/4b15/a602/84f5761120ec/20240527112223670s.pdf[Supplementary Principle 5-2-1]
The Company has formulated and disclosed its ninth Medium-Term Management Plan for the 5-year period from fiscal years 2024
through 2028 by resolution of the Board of Directors. The Medium-Term Management Plan is the BML Group’s business policy,
including its business portfolio, and the Plan and its progress are disclosed as appropriate.
Medium-Term Management Plan: https://www.bml.co.jp/news/assets/pdf/20240510_IR_3.pdf

7(Japanese only)2. Capital Structure
Foreign Shareholding Ratio

20% or more but less than 30%

Status of Major Shareholders(Updated)
Name or Company Name

Number of Shares Owned

Percentage (%)

BML Planning, Inc.

10,154,256

26.04

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

3,222,800

8.26

Kensuke Kondo

3,171,034

8.13

SSBTC CLIENT OMNIBUS ACCOUNT

1,425,710

3.65

Shige Kondo

1,080,240

2.77

Custody Bank of Japan, Ltd. (trust account)

950,800

2.43

JP MORGAN CHASE BANK

915,297

2.34

The Dai-ichi Life Insurance Company, Limited

878,000

2.25

Estate Kogyo, Ltd.

779,920

2.00

Matoba Lease, Y.K.

762,060

1.95

Name of Controlling Shareholder, if applicable(excluding Parent Companies)
Name of Parent Company, if applicable―
None

Supplementary Explanation―

3. Corporate Attributes
Listed Stock Exchange and Market Segment

TSE Prime Market

Fiscal Year-End

MarchBusiness Sector

Services

Number of Employees (Consolidated) as of the Endof the Previous Fiscal YearNet Sales (Consolidated) for the Previous Fiscal Year
Number of Consolidated Subsidiaries as of the Endof the Previous Fiscal Year

4.

1000 or more
¥100 billion or more but less than ¥1 trillion
10 or more and fewer than 50

Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder―

5. Other Special Circumstances that May Have a Material Impact on Corporate GovernanceNot applicable.

8

II.

Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight1.

Organizational Composition and Operation
Corporate Governance System

Company with Audit and Supervisory Board**Referred to as “Company with Kansayaku Board” in the Corporate Governance Code reference translation

Directors
Number of Directors Stipulated in Articles of
16

Incorporation
Directors’ Term of Office Stipulated in Articles of

1 year

Incorporation
Chairperson of the Board

President

Number of Directors

9Election of Outside Directors

ElectedNumber of Outside Directors

3

Number of Independent Directors

3Outside Directors’ Relationship with the Company (1)Name

Relationship with the Company*

Attributes

Yukiko Yoritaka

From another company

Tatsuharu Arai

From another company

Shigeru Osawa

From another company

a

b

c

d

e

f

g

h

i

j

k

○

*Categories for “Relationship with the Company.”(Use “○” when the director presently falls or has recently fallen under the category; “△” when the director fell under the category
in the past; “●” when a close relative of the director presently falls or has recently fallen under the category; and “▲” when aclose relative of the director fell under the category in the past.)
a. Person who executes business for the Company or its subsidiary
b. Person who executes business for or a non-executive director of the Company’s parent company
c. Person who executes business for a fellow subsidiaryd. Person/entity for which the Company is a major client or a person who executes business for said person/entity
e. Major client of the Company or a person who executes business for said clientf. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets from the Company in addition
to remuneration as a director/Audit and Supervisory Board Member
g. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business for the
corporation)h. Person who executes business for a client of the Company (excluding persons categorized as any of d, e, or f above) (applies
to director him/herself only)
i. Person who executes business for another company that holds cross-directorships/cross-auditorships with the Company (applies
to director him/herself only)
j. Person who executes business for an entity receiving donations from the Company (applies to director him/herself only)
k. Other9Outside Directors’ Relationship with the Company (2)Name

Designation as
Independent
Director

Yukiko Yoritaka○

The Company has a business
relationship with Sumitomo Mitsui
Financial Group, Inc., where
Outside Director Yukiko Yoritaka
serves as an executive officer;
however, in light of the scale andnature of the transactions, theCompany has deemed there to be
no risk of Ms. Yoritaka influencing
the judgment of shareholders andinvestors, so a summary has been
omitted.

In addition to her specialized knowledge andexperience in the financial industry, Ms. Yoritaka
also has experience in the human resources
department, so she will be able to draw upon such
experience to provide objective and accurate
supervision and advice on the Company’s
management. She also meets the standards forindependence set by the TSE, and as there is no riskof a conflict of interest with general shareholders,the Company has deemed her eligible to serve as anindependent officer.

Tatsuharu Arai○―

Shigeru Osawa○―

Mr. Arai can provide objective and accurate
supervision and advice on the Company’s
management from a higher perspective based on his
experience of being directly involved in corporate
management as a business manager. He also meetsthe standards for independence set by the TSE, andas there is no risk of a conflict of interest withgeneral shareholders, the Company has deemed him
eligible to serve as an independent officer.
Mr. Osawa has experience working in the financial
sector in addition to his expertise and experience inconstruction, so he is able to provide objective andaccurate supervision and advice on the Company’s
management. He also meets the standards forindependence set by the TSE, and as there is no riskof a conflict of interest with general shareholders,the Company has deemed him eligible to serve as anindependent officer.

Supplementary Explanation of theRelationship

Voluntary Establishment of Committee(s) equivalent toReasons for Election

Established

Nomination Committee or Remuneration Committee

Status of Voluntarily Established Committee(s), Attributes of Members Constituting the Committee and the Committee
Chairperson

Voluntarily
Established
Committee
Equivalent toNomination
Committee
Voluntarily
Established
Committee
Equivalent toRemuneration

Committee’s
Name

All
Members

Full-timeMembers

InsideDirectors

OutsideDirectors

OutsideExperts

Nomination andCompensation
Committee

5

0

2

3

0

0

Outside Director

Nomination andCompensation
Committee

5

0

2

3

0

0

Outside Director

10

Other

Chairperson

Committee

Supplementary Explanation
In February 2019, the Company established the Nomination and Compensation Advisory Committee as an advisory body underthe Board of Directors with the aim of strengthening the independence, objectivity, and accountability of the Board of Directors’
functions regarding the nomination, compensation, etc. of directors and Audit and Supervisory Board members.
An outside director was appointed as the chairperson of the Committee in June 2020.
The name of the Committee was changed to the Nomination and Compensation Committee in June 2021.

Audit and Supervisory Board Member**Referred to as “kansayaku” in Corporate Governance Code reference translation
Establishment of Audit and Supervisory Board
Number of Audit and Supervisory Board Members
Stipulated in Articles of Incorporation
Number of Audit and Supervisory Board Members

Established4
3

Cooperation among Audit and Supervisory Board Members, Accounting Auditors, and Internal Audit Departments
The Audit and Supervisory Board members exchange opinions with the Company’s accounting auditors approximately four times
a year, with the main topics of discussion including the adjustment of audit policies and audit plans, and the content of accounting
audit reports.
Audit and Supervisory Board members exchange opinions with the Internal Audit Department at least six times a year (twice with
the Internal Auditing Office and four times with the Reliability Assurance Department), with the main topics of discussion
including survey of the status of the Company’s operations and assets, and improving operations related to quality.

Election of Outside Audit and Supervisory Board
Members
Number of Outside Audit and Supervisory Board
Members
Number of Independent Audit and Supervisory
Board Members

Elected2

2

Outside Audit and Supervisory Board Members’ Relationship with the Company (1)NameAttributes

Nobushige Tokuono

Tax Accountant

Masato Denawa

LawyerRelationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

l

m

*Categories for “Relationship with the Company.”(Use “○” when the Audit and Supervisory Board member presently falls or has recently fallen under the category; “△” when the11Audit and Supervisory Board member fell under the category in the past; “●” when a close relative of the Audit and Supervisory
Board member presently falls or has recently fallen under the category; and “▲” when a close relative of the Audit and Supervisory
Board member fell under the category in the past.)
a. Person who executes business for the Company or its subsidiaryb. A non-executive director or an accounting advisor of the Company or its subsidiaries
c. Person who executes business for or a non-executive director of the Company’s parent company
d. An Audit and Supervisory Board member of a parent company of the Company
e. Person who executes business for a fellow subsidiaryf. Person/entity for which the Company is a major client or a person who executes business for said person/entity
g. Major client of the Company or a person who executes business for said clienth. Consultant, accounting expert, or legal expert who receives large amounts of cash or other assets from the Company in addition
to remuneration as an Audit and Supervisory Board member
i. Major shareholder of the Company (in cases where the shareholder is a corporation, a person who executes business for the
corporation)j. Person who executes business for a client of the Company (excluding persons categorized as any of f, g, or h above) (applies to
the Audit and Supervisory Board member him/herself only)
k. Person who executes business for another company that holds cross-directorships/cross-auditorships with the Company (applies
to the Audit and Supervisory Board member him/herself only)
l. Person who executes business for an entity receiving donations from the Company (applies to the Audit and Supervisory Board
member him/herself only)
m. OtherOutside Audit and Supervisory Board Members’ Relationship with the Company (2)Name

Nobushige

Designation as
Independent
Audit andSupervisory
Board Member

Supplementary Explanationof the Relationship

○

―

○

―

In addition to his specialized knowledge and experience
as a tax accountant, Mr. Tokuono has a high level of
insight into management in general, and can be expected
to provide accurate supervision and effective advice
regarding the overall management of the Company. He
also meets the standards for independence set by theTSE, and as there is no risk of a conflict of interest withgeneral shareholders, the Company has deemed him
eligible to serve as an independent officer.
Mr. Denawa can be expected to provide accurate
supervision and effective advice regarding the overallmanagement of the Company based on his expertise andexperience as a lawyer. He also meets the standards forindependence set by the TSE, and as there is no risk of aconflict of interest with general shareholders, theCompany has deemed him eligible to serve as anindependent officer.

TokuonoMasato Denawa

Reasons for Election

Matters Concerning Independent Directors and Independent Audit and Supervisory Board Members
Number of Independent Directors and Independent
Audit and Supervisory Board Members

5

Other Matters Concerning Independent Directors and Independent Audit and Supervisory Board Members―

12Incentives
Implementation Status of Measures related toIncentives Granted to Directors

Introduction of Performance-linked Remuneration Scheme, Other

Supplementary Explanation for Applicable Items
In addition to fixed remuneration, the Company has introduced performance-linked remuneration as an incentive for efforts toimprove performance and corporate value.
In addition, the Company has introduced a stock compensation system (restricted stock compensation system) with the aim ofpromoting further value sharing between directors and shareholders.
The amount of performance-linked remuneration and stock compensation (compensation for granting restricted stock) is calculated
based on the pay rate according to the degree of achievement of sales and operating income plans.

Persons Eligible for Stock Options

Supplementary Explanation for Applicable Items―

Director Remuneration
Status of Disclosure of Individual Director’s
Remuneration

No Disclosure for any Directors

Supplementary Explanation for Applicable Items(Updated)
The amount of remuneration paid to the Company’s directors for the fiscal year ended March 2024 is as follows.
Total annual remuneration for 9 directors: 251 million yen

Policy on Determining Remuneration Amounts andCalculation Methods(Updated)

Established

Disclosure of Policy on Determining Remuneration Amounts and Calculation Methods
The amount of remuneration, etc. paid to directors and Audit and Supervisory Board members for the fiscal year ended March2024 is disclosed in the business report and securities report. The contents are as follows:[Directors] Number of eligible officers: 9
Fixed remuneration: 157 million yen (Of which, 17 million yen paid to outside directors)
Performance-linked remuneration: 88 million yen
Remuneration related to grant of restricted stock: 5 million yen
Total amount of Director remuneration, etc.: 251 million yen[Audit & Supervisory Board Member] Number of eligible officers: 3
Fixed remuneration: 21 million yen (Of which, 7 million yen paid to outside Audit and Supervisory Board Members)
Total amount of Audit & Supervisory Board Member remuneration, etc.: 21 million yen

13Support System for Outside Directors (and/or Outside Audit and Supervisory Board Members)
Audit and Supervisory Board meetings are held once a month to share information, and internal Audit and Supervisory Board
members individually communicate information to outside directors and outside Audit and Supervisory Board members asnecessary.

2.

Matters Concerning Functions of Business Execution, Auditing and Supervision, Nomination, andRemuneration Decisions (Overview of Current Corporate Governance System)
The Auditing Office, which reports directly to the President, has been established as a department to conduct internal audits on alldivisions, including the Company’s affiliated companies, and conducts audits on the effectiveness of internal controls and the statusof business execution. In addition, internal audits are conducted by the Reliability Assurance Department mainly on the inspection
divisions, the Company’s specialty field, to assess and provide instructions on compliance with laws and regulations, internal control
systems, risk management, quality, environment, and other matters. Audit and Supervisory Board members conduct rigorous audits
mainly by attending important internal meetings including the Board of Directors meetings, inspecting important approval
documents and other documents, and investigating the status of business and assets at the head office and other major businesslocations. Furthermore, as part of the cooperation between the Auditing Office and Audit and Supervisory Board members, theresults of internal audits are reported to the Audit and Supervisory Board, joint audits are conducted, and information is shared
when necessary.

3. Reasons for Adoption of Current Corporate Governance System
By establishing the Executive Officer structure and promoting a clear separation between supervision and execution, the Company
aims to strengthen the functions of the Board of Directors and strengthen competitiveness through swift decision-making and agile
business execution.

III.

Implementation of Measures for Shareholders and Other Stakeholders

1. Measures to Vitalize General Meeting of Shareholders and Facilitate Exercise of Voting Rights(Updated)
Supplementary Explanation
The Company strives to send notice of the General Meeting of Shareholders
Early Posting of Notice of the Generalprior to the statutory deadline.

Meeting of Shareholders

Notice of the 69th Annual General Meeting of Shareholders (held on June 27,2024) was issued on June 6, 2024.

Electronic Exercise of Voting Rights

Electronic exercise of voting rights commenced from the 64th Annual
General Meeting of Shareholders.

Participation in a Platform for the Electronic

The Company adopted a platform for the electronic exercise of voting rights

Exercise of Voting Rights and Other Initiatives

from the 64th Annual General Meeting of Shareholders.

to Enhance Environment for Institutional
Investors to Exercise Voting Rights
Provision of Notice (or Summary of Notice)

Notice of the General Meeting of Shareholders has been provided in Englishof the General Meeting of Shareholders infrom the 62nd Annual General Meeting of Shareholders.

14English
Other

Visuals are used at the General Meeting of Shareholders to provide easy-tounderstand explanations.

2.

Status of IR-related Activities(Updated)
Supplementary Explanation

Regular Investor Briefings Held for Individual

The Company held a briefing for individual investors in

Investors

March 2024.

Regular Investor Briefings Held for Analysts
and Institutional Investors

Explanation by aRepresentative
Director or a
Representative
Executive Officer
Held

The Company holds semiannual briefings after theannouncement of full-year financial results and financial

Held

results for the second quarter of the fiscal year.
Online Disclosure of IR Information

In addition to press releases, the Company publishes
earnings reports as well as reports to shareholders.

3.

Establishment of Department and/or Placement

The Public and Investor Relations Section, Groupof a Manager in Charge of IR

Planning Dept. is in charge of IR.

Status of Measures to Ensure Due Respect for Stakeholders
Supplementary Explanation
Establishment of Internal Rules Stipulating

The Company’s corporate mission is “dedication to creating a healthy and

Respect for the Position of Stakeholders

cultured society,” and it aims to widely contribute to the advancement of
medical care and the health of people, regardless of whether they are
customers or shareholders, etc. of the Company. This philosophy isincorporated into the “BML Corporate Policy” and is a commitment for all
Group officers and employees.

Implementation of Environmental

The Company has established an “Environmental Policy” with the basic

Preservation Activities and CSR Activities,

philosophy of proactively contributing to people’s health and preserving theetc.

global environment, and the Company is also actively working toward goals
such as reducing greenhouse gas emissions.

Formulation of Policies, etc. on Provision of

The above content is posted on the Company’s website.

Information to Stakeholders

IV. Matters Concerning the Internal Control System
1. Basic Views on Internal Control System and Status of Development
The basis of the BML Group internal control system is that each officer and employee fulfills the Company’s social mission by
engaging in fair and transparent corporate activities with high ethical standards in compliance with laws and regulations and basedon the Corporate Commitments set forth in the Company’s Corporate Policy and “Compliance Manual,” etc.

15

(1) The Board of Directors is positioned as an organization that determines management policies and supervises business execution,and the Company has introduced an executive officer structure and is responding flexibly in order to clarify the responsibilities
of directors. The Board of Directors formulates the Medium-Term Management Plan and annual business plans as companywide goals shared by employees, etc., and President and executive officers execute their duties to achieve such goals.

(2) The Company has established “Compliance Regulations” that apply to all officers and employees, including those of Group
companies.
The Company has also established the “BML Group Compliance Manual” that outlines its Corporate Commitments, and is
striving to ensure thorough awareness by conducting training as appropriate.
In addition, the Compliance Committee oversees the cross-sectional compliance structure including the Group companies andoperates the “Compliance Post” whistleblowing system.

(3) Regarding the risk management structure, the BML Group has established a basic policy on risk management, and a risk
management system has been built to implement the basic policy in accordance with the Basic Rules on Risk Management.
Through the effective functioning of the risk management system and the continuous monitoring of individual risks, theCompany has established a system capable of swiftly and appropriately dealing with emergencies in the unlikely event that theyoccur.
In addition, the Risk Management Dept. (within which the Intellectual Property and Legal Affairs Office has been established)
has been established as a department that centrally manages all risks and engages in the prevention and analysis of risks.

(4) The Company has established the “Regulations on the Management of Affiliated Companies” to facilitate proper operations forsmooth business management, and is developing compliance and risk management systems as a unified corporate group, in
accordance with internal regulations.

(5) The Company has no relationship with anti-social forces or organizations, and takes a firm stance against such forces. In addition,
the Company will strengthen its system to eliminate anti-social forces through cooperation with police stations and relatedorganizations.

2. Basic Views on Measures for Eliminating Anti-Social Forces and Status of Development
The BML Group has established the following in the “Compliance Manual,” and strives to make this content known throughout
the Company through appropriate training and other means:<Eliminating relationships with anti-social forces>
1. We will not provide money or goods to organized crime groups, corporate extortionists, etc. under any pretext.
2. We will take a firm stance against organized crime groups, corporate extortionists, etc. without fear.
3. We will not use organized crime groups, corporate extortionists, etc. as a means of solving problems.
4. If we are contacted by an individual or group engaging in anti-social activities, we will not respond individually, but will reportto our superiors and take action as a company organization.

16

V. Other
1. Adoption of Anti-Takeover Measures
Adoption of Anti-Takeover Measures

Not Adopted

Supplementary Explanation for Applicable Items―

2. Other Matters Concerning the Corporate Governance System―

17[Corporate Governance Structure Chart]

General Meeting of Shareholders

Board ofDirectors(Directors)

Nomination andCompensation
Committee

Audit & Supervisory
Board（Audit & Supervisory
Board Members）

Risk management andinternal audit functions

President andRepresentative
Director

Business executionfunction
Division Managers
and Department
Managers(including Executive
Officers)

Employees

Audit Office

Reliability
Assurance Dept.

Accounting Auditor(Audit firm)

Risk Management
Dept.

Compliance
Committee

18

Corporate lawyer

[Timely Disclosure Structure Chart]

Board of Directors(Directors)

Submission ofmatters to be
discussed<Decision>

President andRepresentative Director

Approval

Reporting<Events>

Approval<Disclosure, announcement><Financial
information>

Tokyo Stock Exchange
Instructions

Person in charge of information handling

Planning Div.

Timely disclosure

Company's website
Reporting

Division Managers andDepartment Managers（including Executive
Officers）
Reporting

ReportingInstructions

Employees, etc.

19