Corporate Governance
CORPORATE GOVERNANCE

TAKARA BIO INC.

Last update: June 29, 2023

Takara Bio Inc.

Koichi Nakao, Representative Director
Contact: Takuya Kakemi, Operating Officer in charge of PR & IR Department TEL: 077-565-6970
Securities Code: 4974
https://www.takara-bio.co.jp/

The corporate governance of Takara Bio Inc. (the “Company”) is described below.

I

Basic View on Corporate Governance, Capital Structure, Corporate Profile and Other Basic Information

1. Basic way of thinking Update
Guided by the Takara Bio corporate philosophy of “Contributing to the health of humankind through the development of revolutionary
biotechnologies such as gene therapy,” in order to overcome “the Corona Cliff" and achieve dramatic growth, we will reform our business structure,promote the sustainable growth of the Reagents / Instruments business and dramatic growth of CDMO business, and develop platform technology for biologics
development. We will develop a new business strategy aimed at becoming a global platform provider responsible for the infrastructure of the life science
industry. In addition, we will create new value and contribute to the realization of a sustainable society through the implementation of our corporate philosophy.
To this end, it will be necessary to strengthen our corporate governance system to promote honest and fair corporate activities constantly. We
will work to ensure management transparency, improve efficiency, and make swift decisions.

[Reasons for Non-compliance with the Principles of the Corporate Governance Code](Supplementary Principle 4-1 [3] Succession Plan)
We recognize that the establishment of a process (succession plan) for the development of the next generation of management executive, whowill be the successors to the Chief Executive Officer (CEO) and other top executives is an important management issue for achieving sustainablegrowth and increasing corporate value over the medium to long-term. Executive corporate executives who are not serving concurrently as
directors also attend meetings of the Board of Directors as part of the management team and participate as observers in our goals and specificmanagement strategies. The Board of Directors will consider the requirements demanded of the CEO and other positions and the formulation ofdevelopment policies based on the business environment surrounding the Company and our corporate culture, and with reference to the advice
and recommendations of the Nominations and Compensation Committee.
(Supplementary Principle 4-2 [1] Stock-based Compensation System)
We have introduced a cash-based compensation system linked to medium to long-term performance, but do not have a stock-based
compensation system in place. Going forward, we recognize that director incentives for sustainable growth are an important management issue
so the Board of Directors will consider the ratio of cash and stock for compensation, including the method for determining compensation overall,with reference to the advice and recommendations provided by the Nominations and Compensation Committee.

[Disclosure Based on the Principles of the Corporate Governance Code] Update(Principle 1-4 Cross-Shareholdings)
We do not currently hold shares of other listed companies as strategic cross-shareholdings, and our basic policy is not to hold any in future
either.
(Principle 1-7 Related Party Transactions)
We have established the Regulations Governing the Management of Related Party Transactions as a mechanism to properly check transactions
between related parties. We conduct transactions after examining the necessity of transactions and the appropriateness of the terms andconditions of transactions.
・ Each year, we regularly request each Director to submit a confirmation document on transactions between related parties, and investigate
whether or not we have a majority of voting rights held by its Directors and their relatives, or by which they are represented.
・New transactions with related parties shall be approved by the Board of Directors in accordance with the Regulations Governing theManagement of Related Party Transactions
・ In accordance with the Regulations Governing the Management of Related Party Transactions, related party transactions in whichtransactions continue at the end of each fiscal year are reviewed and approved by the first Board of Directors meeting held after thecommencement of the new fiscal year to determine the reasonableness of the continuation of transactions (business necessity) and theappropriateness of the terms and conditions of transactions.
・ Competitive transactions and conflict-of-interest transactions of directors are implemented with the approval of the Board of Directors inaccordance with laws and regulations and the Regulations of the Board of Directors, and the results of these transactions are reported to theBoard of Directors on a regular basis each year.
(Supplementary Principle 2-4 [1] Ensuring Diversity)
・ Based on the concept of promoting the active participation of diverse human resources as stated in the “Takara Bio Group Sustainability
Management Promotion Policy,” we are promoting the active participation of diverse human resources, including the active participation of
women. The state of such activities is disclosed on our website and other media. In addition, as we expand and grow our business overseas, wehave appointed foreign corporate executives and senior employees at overseas group companies. As a result of promotions to date, new hires
and appointments of women and mid-career recruits to managerial positions, and the appointment of foreign employees as corporate executives
and senior employees at overseas group companies have advanced, and we will continue to work to ensure the diversity of internal humanresources.
・ To further enhance our corporate value, we have developed a human resource development program aimed at improving the skills of eachand every employee. We are also developing a system that will enable all employees to work with enthusiasm while balancing work and personal
life in accordance with their individual lifestyles. The state of implementation is disclosed on our website and elsewhere.
(Principle 2-6 Corporate Pension)
We operate a defined benefit corporate pension plans based on our code. In the management of the defined benefit corporate pension plan, we
have established a policy asset composition ratio from a medium to long-term perspective based on the basic policy and investment guidelines,and present this ratio to the investment managers. The state of investments by the investment managers is monitored regularly and reviewed asnecessary. In addition, employees engaged in corporate pension affairs are assigned with due consideration given to their knowledge andexperience. The exercise of the voting rights related to shares held as part of pension assets is subject to the judgment criteria of the investment
trustee, and there are no conflicts of interest.
(Principle 3-1 Enhancement of Information Disclosure)
From the perspective of ensuring transparency and fairness in our decision-making and realizing effective corporate governance, we discloseand disseminate information as follows.
(i) Business strategies are disclosed in the Annual Securities Report and the Medium-Term Management Plan.
(ii) We disclose our basic corporate governance policies on our website, annual reports, and securities reports.
(iii) We disclose our policy on remuneration for Directors and Auditors in our annual securities report.
(iv) Our policies and procedures regarding the nomination of candidates for Directors and Auditors and the appointment and dismissal of
Executive Officers are described below.
[1] Policy and Procedures for the Board of Directors to Nominate Candidates for Director
We pay attention to ensuring diversity from the perspectives of gender, internationality, career and age. In light of the following standards, theNominations and Compensation Committee deliberates and considers the candidates, and the Board of Directors passes a resolution based on
the advice and recommendations of the Committee.
・ Having the ability to recognize and resolve management issues from the perspectives of superior personality and insight, and overallmanagement.
・ Internal Directors shall have sufficient knowledge, experience and track record in specialized fields, and a high level of organizational
management capability.
・ External Directors shall have extensive experience in their respective fields of origin, and have the qualities to give advice andrecommendations from an independent standpoint to ensure the appropriateness of decision-making by the Board of Directors.
[2] Policy and Procedures for the Board of Directors to Nominate Candidates for Auditor
We pay attention to ensuring diversity from the perspectives of gender, internationality, career and age. In light of the following standards, thePresident & CEO proposes to the Board of Directors with the consent of the Supervisory Board Meeting after consultation with other Directors
and resolves the proposal.
・ Having the ability to recognize and resolve management issues from the perspectives of superior personality and insight, and overallmanagement.
・ Internal Auditors shall have sufficient knowledge, experience and track record in specialized fields.
・ External Auditors shall have extensive experience in their respective fields of origin, and abilities to give advice and recommendations from an
independent standpoint to ensure the appropriateness of decision-making by the Board of Directors.
[3] Policies and Procedures for the Board of Directors to Appoint and Dismiss Corporate Executives(Policy and Procedures for Appointment)
We pay attention to ensuring diversity from the perspectives of gender, internationality, career and age. In light of the following standards, thePresident & CEO makes proposals to the Board of Directors after consultation with other Directors and resolves the proposal.
・ Having the ability to recognize and resolve management issues from the perspectives of superior personality and insight, and overallmanagement.
・ Having sufficient knowledge, experience and a track record in assigned tasks and having a high level of organizational management
capability.
(Policy and Procedures for Dismissal)
In light of the following standards, the President & CEO submits a proposal to the Board of Directors through consultation with other Directors
and makes a resolution.
・Any violation of laws, regulations, the Articles of Incorporation, or any other internal regulations may cause us to suffer a significant loss or
significantly hinder our business.
・ It is found that there was a considerable hindrance to the execution of duties.
・ There is a relationship with an anti-social force that should be criticized socially.
・ It is found obviously that each of the requirements of the above-mentioned standards of appointment is not met.
(Supplementary Principle 3-1 [3] Sustainability Initiatives, etc.)
Our initiatives for sustainability, such as human resource development and environmental measures, are disclosed in the “Takara Bio Group
Sustainability Management Promotion Policy”.
In addition, we position the development of the human resources capable of supporting global business growth and the next generation of theGroup, and the further improvement of technological capabilities and quality as extremely important management issues for sustainable growth
and the improvement of corporate value over the medium to long-term, and allocate and invest appropriate management resources for thedevelopment of human resources and the improvement of technological capabilities and quality.
In accordance with the framework of the Task Force on Climate-related Financial Disclosures (TCFD), the Group reviews and responds to theimpacts of climate change-related risks and opportunities on our business activities and profits, and discloses related information on our website
and other media.
(Supplementary Principle 4-1 [1] Roles and Responsibilities of Directors and the Board of Directors)
・ In the Regulations Governing Meetings of the Board of Directors, we has established mainly the following matters as those subject toresolution by the Board of Directors, and delegates matters that do not fall under these to the management team (Directors and Executive
Officers ). (Supplementary Principle 4-1 [1])(i) Matters concerning the General Meeting of Shareholders(ii) Personnel affairs of Directors, Executive Officers and important employees(iii) Matters concerning the accounting of the Company(iv) Matters concerning the disposition and acceptance of important assets that fall under the specific criteria for amounts(v) Other matters stipulated by laws and regulations or the Articles of Incorporation and important business matters, as well as the determinationor the occurrence of material facts that may affect the Group’s operation, work, financial position or results(Principle 4-9 Judgment Criteria for the Assignment and Independence of External Officers)
We have established “Judgment Criteria for the Assignment and Independence of External Officers.” In accordance with these criteria, the Boardof Directors deliberates on, considers, and selects candidates for independent External Director.
(Supplementary Principle 4-10 [1] Use of Optional Mechanism)
In order to ensure the independence and objectivity of the functions of the Board of Directors with respect to the nomination of candidates for
Director and the compensation of Directors, we have established a Nominations and Compensation Committee under the Board of Directors,
which consists primarily of independent Directors, to obtain appropriate advice and recommendations. The independence of the committee isensured because the committee is composed of three or more members, the majority of whom are External Directors, and the chairperson of thecommittee is selected from among the External Directors. The committee deliberates and considers the nomination of Director candidates andthe individual remuneration of Directors prior to a resolution of the Board of Directors, and gives advice and makes suggestions to the Board of
Directors based on the results.
(Supplementary Principle 4-11 [1] Concept of the Versatility of the Board of Directors)
The Board of Directors is composed of Directors with advanced expertise and experience in each business, and independent Directors who
possess a wealth of experience and broad insight, and provide advice and recommendations from the perspective of all stakeholders, including
shareholders, based on their extremely high level of expertise. We believe that at the present time, the Directors are an appropriate combinationof skills in the execution of management strategies, and that this is the optimal structure.
We believe that the roles and responsibilities of the Board of Directors are extremely important for sustainable growth and the improvement ofcorporate value over the medium to long-term, and that it is important to consider the composition of the Board of Directors continuously to
improve its effectiveness continuously. We will advance consideration of the composition of the Board of Directors continuously from now on inaccordance with management strategies and changes in the environment. The skills matrix is disclosed in the notice of convocation of a General
Meeting of Shareholders.
(Supplementary Principle 4-11 [2] Concurrent Duties as a Corporate Executive of a Listed Company)
When External Directors, External Auditors and other Officers serve concurrently as officers of other listed companies other than our group, we
disclose brief history annually in our securities report.
(Supplementary Principle 4-11 [3] Evaluation of the Effectiveness of the Board of Directors)
We evaluate the effectiveness of the Board of Directors with a focus on its operational aspects. An overview of this is disclosed on our website.
(Supplementary Principle 4-14 [2] Corporate Executive Training)
As a training policy for Directors and Auditors, including External Directors and External Auditors, as well as Executive Officers , we encourage
and support participation in academic conferences and seminars in accordance with the experience and knowledge of each individual, provide
the information they require to fulfill their respective roles and responsibilities, and provide support for the acquisition of knowledge, as well as
support for the expenses required for these activities on an ongoing basis.
(Principle 5-1 Constructive Dialogue with Shareholders)
We appoint a person in charge of information management and appoint the PR & IR Department as the department in charge of IR. For analysts
and investors, we hold a financial results briefing once every six months, and hold a series of individual investor briefings sequentially in an effort
to improve understanding of the Company.
(Principle 5-2 Formulation and Publication of Management Strategies and Management Plans)
We have formulated Medium-Term Management Plan 2026 (Term:FY2024 to FY2026) including quantitative targets (operating profit, ROE) andKPI (sales, R&D expenses),and the strategies of each business and strategy for strengthening the management base, as well as the cost ofshareholders' equity and market valuation. The plan is disclosed on our website and explained at financial results briefings etc.
We established the Takara Bio Corporate Governance Policy concerning our basic approach to corporate governance and the status, including
the above, and have posted it on our website.
■ Takara Bio Inc. “Corporate Governance”
Website:https://ir.takara-bio.co.jp/en/sustainability/governance.html

2. Capital Structure
Foreign shareholding ratioLess than 10%[Status of Major Shareholders] Update
Number of Shares Owned

Percentage (%)

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

7,114,500

5.91

The Japan Custody Bank, Ltd. (Trust Account)

2,489,800

2.07

STATE STREET BANK WEST CLIENT-TREATY 505234

671,300

0.56

GOVERNMENT OF NORWAY

651,797

0.54

JP MORGAN CHASE BANK 385781

615,720

0.51

KIA FUND F149

549,000

0.46

STATE STREET BANK AND TRUST COMPANY 505001

543,149

0.45

The Dai-ichi Life Insurance Company, Ltd.

503,600

0.42

The Bank of Kyoto,Ltd.

500,000

0.42

Takara Holdings Inc.

Name / Company NameControlling Shareholder (except for
Parent Company)---

Parent Company

Takara Holdings Inc. (Listing: Tokyo ) (Code 2531)

Supplementary Explanation---

73,350,000

60.91

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange
Prime

Fiscal Year-End

MarchType of Business

Chemicals

Number of Employees (Consolidated) as
More than 1,000of the End of the Previous Fiscal YearSales (Consolidated) as of the End of
the Previous Fiscal Year

From 10 billion yen to less than 100 billion yen

Number of Consolidated Subsidiaries as
Less than 10of the End of the Previous Fiscal Year

4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder
We conduct business operations that maintain our uniqueness and independence in the Takara Holdings Group. We never carry out transactions
with the parent company for the benefit of the parent company or the detriment of the Company and minority shareholders. Transactions with theparent company include the licensing of trademark rights, outsourcing of computer-related services and leasing of information-related equipment,
and transactions with other companies of the parent company’s group include the sale of products and the leasing of real estate (the Company’s
office buildings). Our basic policy in all of these transactions is to determine the terms and conditions, including the amount, of each transaction
after discussions and negotiations based on market prices, etc., the same as with general transactions.
In addition, with the aim of protecting the interests of minority shareholders, we seek the advice and recommendations of the Special Committee,
an optional committee, on matters relating to significant transactions or acts in which the interests of the parent company or its subsidiaries
conflict with those of our minority shareholders.

5. Other Special Circumstances that May Have a Material Impact on Corporate Governance Update
As of March 31, 2023, Takara Holdings Inc. (listed on the Prime, Tokyo Stock Exchange; securities code 2531) is the Company’s parent
company, holding 60.93% of the voting rights in the Company. The relationship between the Company and Takara Holdings is as follows.
1. The position of the Company in the Takara Holdings Group (Takara Holdings and its associated companies)
The extraordinary general meeting of shareholders of Takara Shuzo Co., Ltd. (now Takara Holdings Inc.) held on February 15, 2002 approved
the proposal to spin off the alcoholic beverage and food business, and biotechnology business with the aim of maximizing the special
characteristics of each respective business and creating a business environment that would increase the growth potential and competitiveness ofboth. On this basis, Takara Shuzo and the Company were established on April 1, 2002, through a corporate split, with each becoming a whollyowned subsidiary of Takara Holdings (since then, Takara Holdings’ ownership of voting shares in the Company has decreased to 60.93% due tothird-party allotments of new shares, capital increases through public offerings, etc., implemented by the Company).
The Takara Holdings Group consists of Takara Holdings Inc., the holding company, and 63 affiliated companies (61 subsidiaries and 2
associated companies). Within the Group, we are positioned as a subsidiary specializing in biotechnology business, and are promoting
biotechnology business together with the nine affiliated companies (subsidiaries) of the Company.
2. Management of Group Companies by Takara Holdings Inc.
Takara Holdings Inc., has established and operates the Takara Holdings Group Management Rules from the perspective of consolidated
business management. However, its objective is to maximize the corporate value of the Group as a whole while maintaining the independence
and autonomy of Takara Holdings Group companies. The rules also apply to the Company and we report on resolutions, etc., made by the Boardof Directors to Takara Holdings, but we are not required to gain prior approval from Takara Holdings for the resolutions of the Board of Directors
and we manage our business operations independently.
Furthermore, various meetings have been established within the group. Those pertinent to us are the “Group Strategy Committee” and the“Takara Bio Coordination Committee”. These meetings are intended to foster reporting between Group companies and in their current form, do
not impede the independence and autonomy of the Company.
The current corporate executives who hold positions at both the Company and Takara Holdings are as follows.
Koichi Nakao (President & CEO of Takara Bio Inc., Director of Takara Holdings Inc.)
Mutsumi Kimura (Director of Takara Bio Inc., President of Takara Holdings Inc.)
The concurrent relationships above occurred because Koichi Nakao was invited to join Takara Holdings Inc., due to his ideas on consolidated
management under the holding company structure of Takara Holdings Inc., and Mutsumi Kimura was invited to join the Company because hehas a wealth of experience and results in the areas of corporate planning, finance, accounting, public relations, general affairs, human resources,
etc., and demonstrated leadership as the executive vice president of Takara Holdings, Inc., and it was judged that he would strengthen the
Company’s corporate functions and realize the sustainable growth and the improvement of corporate value of the Company. The purpose of
these appointments was not for Takara Holdings Inc., to control the Company.

II Business Management Organization and Other Corporate Governance Systems Related to DecisionMaking, the Execution of Business and Oversight in Management

1. Matters Related to Organizational Composition, Management, etc.
Organizational Form

Company with auditors[Directors]
Maximum Number of Directors
10
Stipulated in the Articles of Incorporation

Term of Office Stipulated in the Articles
of Incorporation

1 yearChairperson of the Board

President & CEO

Number of directors

9State of Appointment of external
directors

Appointed

Number of External Directors

3

Number of External Directors
Designated as Independent Officers

3

External Directors’ Relationships with the Company (1)Name

Background

Nobuko Kawashima

Academic

Kazuko Kimura

Academic

Noriomi Matsumura

Academica

Relationship with the Company*b c d e f g h ijk* Categories for “Relationship with the Company* Marked with “O” when the director presently falls, or has recently fallen, under the category, and with “△” when the director fell
under the category in the past.
* Marked with “●” when a close relative of the director presently falls, or has recently fallen, under the category and with “▲” when aclose relative of the director fell under the category in the past.
a. Executive of the Company or a Company subsidiaryb. Non-executive director or executive director of the parent company of the Company
c. Executive of a fellow subsidiary company of the Company Group
d. Person or executive of a company whose major business partner is the Company
e. Major business partner or executive of a major business partner of the Company
f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company
besides compensation as a corporate executive of the Company
g. Major shareholder of the Company (or an executive of a major shareholder if the shareholder is a legal entity)
h. Executive of a client or supplier company of the Company (not falling under any of d, e or f) (only directors)
i. Executive of a company in a relationship of mutual appointment of external corporate executives (only directors)
j. Executive of a company that receives donations from the Company (only directors)
k. Other

External Directors’ Relationships with the Company (2) Update
Name

Designation as an
Independent Officer

Nobuko Kawashima○

Kazuko Kimura○

Supplementary
Explanation of theRelationship

Reasons for Appointment

Ms. Kawashima has been conducting research on thethemes of creative economics and corporate social
responsibility for many years, and we have judged that
Concurrently holds positions as: she can use her knowledge as an expert to strengthen
the management system of the Company. In addition,
Professor, Faculty of Economics we have judged that she is independent because she is
at Doshisha University
not a person with a potential conflict of interest withgeneral shareholders based on the Judgment Criteria for
the Independence
External director at TOKAIof External Corporate Executives (see “Relationships
Holdings, Inc.
with Independent Officers” and “Other Matters
Concerning Independent Officers” below). Accordingly,
she has been designated as an Independent Officer.
Ms. Kimura specializes in quality control inpharmaceutical distribution, eradication of low-quality
drugs and counterfeit drugs, development of technology
to prevent counterfeiting, and specialist training. We
Concurrently holds positions as:
have judged that she can use her knowledge as anexpert in the management of the Company. In addition,
Representative director of the
we have judged that she is independent because she is
Medicines Security Workshop
not a person with a potential conflict of interest withgeneral shareholders based on the Judgment Criteria forExternal director, Mitsubishi
the Independence of External Corporate Executives
Warehouse Co., Ltd.
(see “Relationships with Independent Officers” and“Other Matters Concerning Independent Officers”
below). Accordingly, she has been designated as an
Independent Officer.

Noriomi Matsumura○

Mr. Matsumura has extensive experience and expertisein all aspects of medicine, including obstetrics andgynecology, and is particularly familiar with the fields ofgenomic analysis of tumors, molecular targeted therapy,
and immunotherapy. We have judged that he can use
Concurrently holds positions as:
his knowledge as an expert in the management of theCompany. In addition, we have judged that she isProfessor of Obstetrics andindependent because she is not a person with a
Gynecology, Kinki University
potential conflict of interest with general shareholders
School of Medicine
based on the Judgment Criteria for the Independence ofExternal Corporate Executives (see “Relationships with
Independent Officers” and “Other Matters Concerning
Independent Officers” below). Accordingly, he has been
designated as an Independent Officer.

Voluntary Establishment ofCommittee(s) Corresponding to
Established
Nomination Committee or Compensation
Committee

Committee’s Name, Composition, and Attributes of Chairperson
All
Committee
Members

Full-Time
Members

Internal
directors

External
directors

External
Experts

Other

Nominations andCompensation
Committee

5

0

2

3

0

0

External
directors

Nominations andCompensation
Committee

5

0

2

3

0

0

External
directors

Committee’s Name
Committee
Corresponding toNomination
Committee
Committee
Corresponding toCompensation
Committee

Chairperson

Supplementary Explanation
Supplementary Explanation
The Company has established a voluntary Nominations and Compensation Committee under the Board of Directors to strengthen the
independence, objectivity and accountability of the functions of the Board of Directors. The committee is composed of three or more members,
the majority of whom are external corporate executives. The chairperson of the committee is selected from among the external corporate
executives.
< Committee Members >Nobuko Kawashima (external director and chairperson)
Kazuko Kimura (external director)
Noriomi Matsumura (external director)
Koichi Nakao (president & CEO)Yoh Hamaoka (director)< Matters to be deliberated >・ Matters concerning candidates for director to be proposed to the general meeting of shareholders
・ Matters concerning the revision of the compensation limit for directors to be proposed to the general meeting of shareholders
・ Matters concerning the individual compensation of directors[Auditors]
Establishment of the Supervisory Board

Established

Maximum Number of Auditors Stipulated
5in the Articles of Incorporation
Number of auditors

5

Cooperation Among Auditors, Accounting Auditors and Internal Audit Department
The Company’s auditors work with Internal Audit Department (four full-time internal auditors) to verify the effectiveness of the internal control
system. In addition, the Company meets with the accounting auditors Deloitte Touche Tohmatsu LLC several times a year to give each otherdetailed reports on audit plans and results, and to attend audits and exchange information.
Internal Audit Department makes site-visits to the Company and its subsidiaries with the auditors to implement audits from the perspectives oflegality and compliance. Apart from reporting the results to the Board of Directors and the president and CEO, we are making efforts to enhanceinternal controls and checks by sharing information with internal control divisions such as the Takara Bio Compliance Committee and Finance
Department.

State of Appointment of External
Auditors

Appointed

Number of External Auditors

3

Number of External Auditors Designated3
as Independent Officers

External Directors’ Relationships with the Company (1)Name

Background

Kunihiko Kamada

LawyerYasuo Himeiwa

CPA

Masaaki Makikawa

Academicab

Relationship with the Company*c d e f g h i j k lm* Categories for “Relationship with the Company* Marked with “O” when the director presently falls, or has recently fallen, under the category, and with “△” when the director fell under the
category in the past.
* Marked with “●” when a close relative of the director presently falls, or has recently fallen, under the category and with “▲” when a close
relative of the director fell under the category in the past.
a. Executive of the Company or a Company subsidiaryb. Non-executive director or accounting advisor of the Company or a Company subsidiaryc. Non-executive director or executive director of the parent company of the Company
d. Auditor of the parent company of the Company
e. Executive of a fellow subsidiary company of the Company Groupf. Person or executive of a company whose major business partner is the Company
g. Major business partner or executive of a major business partner of the Company
h. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company
besides compensation as a corporate executive of the Company
i. Major shareholder of the Company (or an executive of a major shareholder if the shareholder is a legal entity)
j. Executive of a client or supplier company of the Company (not falling under any of f, g or h) (only directors)
k. Executive of a company in a relationship of mutual appointment of external corporate executives (only directors)l. Executive of a company that receives donations from the Company (only directors)
m. Other

External Directors’ Relationships with the Company (2)Name

Designation as an
Independent Officer

Kunihiko Kamada○

Yasuo Himeiwa○

Supplementary
Explanation of theRelationship

Reasons for Appointment

Mr. Kamada possesses abundant expert knowledge andexperience as a lawyer and the Company has judgedthat his advice and recommendations for the promotionof compliance management and the securing of thevalidity and appropriateness of decision-making by theConcurrently holds positions as: Board of Directors and the Supervisory Board would be
useful to the Company. In addition, we have judged that
he is independent because he is not a person with aA member of Daiichi Legal
potential conflict of interest with general shareholders
Professional Corporation
based on the Judgment Criteria for the Independence ofExternal Corporate Executives (see “Relationships with
Independent Officers” and “Other Matters Concerning
Independent Officers” below). Accordingly, he has been
designated as an Independent Officer.
Mr. Himeiwa possesses abundant expert knowledge andexperience in finance and accounting as a certified
Concurrently holds positions as:
public accountant, and the Company has judged that his
advice and recommendations on the improvement of the
Director of Himeiwa CPA Officetransparency and objectivity of management would be
useful to the Company. In addition, we have judged that
External director (Audit andhe is independent because he is not a person with aSupervisory Committee
potential conflict of interest with general shareholders
Member) of Sharp Corporation
based on the Judgment Criteria for the Independence ofExternal Corporate Executives (see “Relationships with
External director (Full-time Audit
Independent Officers”
and Supervisory Committee
and “Other Matters Concerning Independent Officers”
Member) of IDEC Corporation
below). Accordingly, he has been designated as an
Independent Officer.

Masaaki Makikawa○

The Company has judged that Mr. Makikawa’s
Concurrently holds positions as: experience and expert knowledge in dealing withresearch supervision on state projects, and industryDeputy director, The
academia collaboration projects including many contract
Ritsumeikan Trust
research and joint research projects in the fields of
medical engineering and bioengineering would be useful
Visiting Professor, Research
to the Company. In addition, we have judged that he is
Organization of Science andindependent because he is not a person with a potential
Technology, Ritsumeikan
conflict of interest with general shareholders based on
University
the Judgment Criteria for the Independence of External
Corporate Executives (see “Relationships with
President of Osaka Hatsushiba Independent Officers” and “Other Matters Concerning
GakuenIndependent Officers” below). Accordingly, he has been
designated as an Independent Officer.

[Relationships of Independent Officers]
Number of Independent Officers

6

Matters Relating to Independent Officers
Based on the purpose of the Corporate Governance Code, our basic policy is to appoint independent external directors as at least one-third of
our directors in principle, considering comprehensively factors such as business characteristics and the environment surrounding the Company.
In accordance with this basic policy, we currently have three independent external directors, two of whom are women, and have establishedsystems for communication and coordination with management, and cooperation with the auditors and the Supervisory Board to exchange
information and share awareness.
The “Judgment Criteria for the Independence of External Corporate Executives” established by the Company are as follows.
< Independence Criteria for External Officers >External corporate executives at the Company who do not fall under any of the following criteria are deemed to be independent officers.
(1) Currently a director, auditor, manager or other employee of our parent company(2) Any person who was in the past a director, auditor, manager or other employee of our parent company(3) Currently a director, auditor, manager or other employee of our sister company(4) Any person who was in the past a director, auditor, manager or other employee of one of our sister companies(5) Any person who is a major supplier of the Company or a Company subsidiary (any person who received payments from the Company or aCompany subsidiary of 2% or more of that person’s annual consolidated total sales during the most recent fiscal year), or the parent company ora major subsidiary thereof, or if such person is a company, its executive director, executive officer, operating officer, manager or other employee(6) Any person who, during any of the three fiscal years preceding the most recent fiscal year, was a major supplier of the Company or aCompany subsidiary (any person who received payments from the Company or a Company subsidiary of 2% or more of that person’s annual
consolidated total sales during the most recent fiscal year), or the parent company or a major subsidiary thereof, or if such person is a company,
its executive director, executive officer, operating officer, manager or other employee(7) Any person who is a major customer of the Company (any person who paid 2% or more of the annual consolidated total sales of theCompany or a Company subsidiary during the most recent business year), or the parent company or a major subsidiary thereof, or if such person
is a company, its executive director, executive officer, operating officer, manager or other employee(8) Any person who, during any of the three fiscal years preceding the most recent fiscal year, was a major customer of the Company or aCompany subsidiary (any person who paid 2% or more of the annual consolidated total sales of the Company or a Company subsidiary during
the subject business year), or the parent company or a major subsidiary thereof, or if such person is a company, its executive director, executive
officer, operating officer, manager or other employee(9) Any director (limited to those in charge of business execution) or other executive officer (meaning officer or employee who executes thebusiness of the organization) of organizations that have received donations or grants from the Company or Company subsidiaries averaging
more than 10 million yen per year over the past three years (for example, public interest incorporated associations, non-profit corporations, etc.)(10) Any person who is or was a director, auditor, accounting advisor, executive officer or operating officer of a company that has accepted a
director (regardless of whether full-time or part-time) from the Company or a Company subsidiary, or of its parent company or subsidiary(11) Any person who is a director, auditor, accounting advisor, executive officer, operating officer, manager or other employee of a financial
institution or other large creditor (hereinafter referred to as “Large Creditors”) that is indispensable in the Company’s fund procurement and relied
upon to the extent that they are irreplaceable(12) Any person who was a director, auditor, accounting advisor, executive officer, operating officer, manager or other employee of the current
Large Creditors of the Company or their parent company or major subsidiaries in the past three years(13) Any person who is an employee or partner of a certified public accountant (or tax accountant) or auditing firm (or tax accountant
corporation) that is currently an accounting auditor or accounting advisor of the Company or a Company subsidiary(14) Any person who was an employee or partner of a certified public accountant (or tax accountant) or auditing firm (or tax accountant) that
was an accounting auditor or accounting advisor of the Company or a Company subsidiary during the most recent three years, and who was in
actual charge of auditing work (excluding auxiliary involvement) for the Company or a Company subsidiary (including any person who hascurrent retired or resigned)(15) Any lawyer, certified public accountant, tax accountant or other consultant who does not fall under (13) or (14) above who has, in addition
to directors’ compensation, obtained from the Company or Company subsidiaries any monetary or other proprietary benefits averaging 10 million
yen or more over the past three years(16) Any employee, partner or associate of a law firm, auditing firm, tax accountant corporation, consulting firm or other expert advisory firm that
does not fall under (13) or (14) above which has the Company or a Company subsidiary as a major customer (any firm that received paymentsfrom the Company or a Company subsidiary of 2% or more of that firm’s annual consolidated total sales on average over the past three years)(17) Any person whose spouse or relative within the second degree of kinship falls under any of (1) through (16) above(18) Any person who may have a substantial conflict of interest is likely to arise on a permanent basis due to circumstances other than thoseconsidered in (1) through (17) above[Incentives]
Incentive Policies for Directors

Performance-linked compensation

Supplementary Explanation
For details, refer to “Disclosure of the Policy for Determining Compensation Amounts and Their Calculation Method” below.

Recipients of Stock Options

Supplementary Explanation---[Director Compensation]
Disclosure of Individual Directors’Compensation

No Individual Disclosure

Supplementary Explanation Update
Total compensation for the year ended March 31, 2023
Total amount of compensation, etc. 10 directors, 278 million yen (including 3 external directors, 21 million yen)
(Including 10 directors with fixed compensation 138 million yen [including 3 external directors, 21 million yen])(Including performance-linked compensation 7 directors, 133 million yen [for directors other than external directors])(Including retirement benefit 5 million yen [for directors other than external directors])(Note 1) The amount of compensation, etc., for directors does not include the amount of employee salary for directors who serve concurrently
as employees.
(Note 2) Includes one director who resigned at the conclusion of the 20th Ordinary General Meeting of Shareholders held on June 24, 2022.

Policy for Determining Compensation
Amounts and Their Calculation Method

Established

Disclosure of the Policy for Determining Compensation Amounts and Their Calculation Method
Matters concerning the policy for determining compensation amounts, etc., for corporate executives and their calculation method
1. Basic way of thinking
The Company’s basic concept related to compensation for corporate executives is to employ talented human resources as managers, motivatethem more strongly towards the execution of management strategies and establish an annual compensation system that will lead to the further
improvement of corporate value.
Based on the performance evaluation method approved by the meeting of the Board of Directors held on December 16, 2019, the amount ofcompensation for corporate executives is determined by the president and CEO, authorized by the Board of Directors, within the limit ofcompensation resolved upon at the Ordinary General Meeting of Shareholders, taking comprehensively into account their positions andindividual contributions to the Company’s financial results, and with the advice and recommendations of the Nominations and Compensation
Committee established voluntarily by the Company.
2. Compensation system
Compensation for corporate executives is comprised of fixed compensation and variable performance-linked compensation in accordance with
the Company’s financial results so that the responsibilities of directors and their contributions to the Company’s financial results can be reflected.
Fixed compensation is 50% of the amount of compensation for the previous fiscal year, and variable compensation is determined by a Companywide performance evaluation and a divisional performance evaluation, on the basis of 50% of the amount of compensation for the previous fiscal
year.
Only fixed compensation is paid to directors and auditors independent from the execution of business within the limit of compensation resolved
upon at the Ordinary General Meeting of Shareholders.
3. Calculation method for variable compensation
The calculation method for variable compensation for directors who execute business is based on a Company-wide performance evaluation(25%) and a divisional performance evaluation (25%) based on a comparison of operating profit against the budget and the previous fiscal year.
The Company-wide performance evaluation fluctuates within a lower limit of 90% and an upper limit of 110%, and the divisional performance
evaluation fluctuates within the range from 80% to 120%.
4. Resolution of the Ordinary General Meeting of Shareholders on Compensation for Corporate Executives
The details of a resolution of the Ordinary General Meeting of Shareholders regarding the compensation of corporate executives are as shown
below.
i) Date of resolution at the Ordinary General Meeting of Shareholders
June 23, 2017ii) Directors
Fixed compensation
Annual amount to be no more than 184.8 million yen (including within 30 million yen for external directors)
Performance-linked compensation
Annual amount to be no more than the amount equivalent to 5% of consolidated operating profit an annual basis in the previous fiscal year

[Support System for External Directors (External Corporate Auditors)]

In the convocation of a Board of Directors meeting, external directors are sent proposals and other related materials in advance, as well as
explanations by the directors in charge, etc., as required. Under this system, external directors monitor the execution of duties by directors.
Apart from attending meetings of the Board of Directors and other important meetings, the Company’s external auditors receive reports fromdirectors, etc., on the state of execution of duties, view important documents, and audit the execution of duties. Furthermore, Internal Auditing
Department provides supplementary explanations as required, including on the state of cooperation with Internal Auditing Department (four fulltime members), etc.

2. Matters Related to Functions such as Business Execution, Auditing, Oversight, Nomination, Determination ofCompensation, etc. (Overview of the Current Corporate Governance System) Update
The Company has adopted an Audit and Supervisory Board system, and three of the five auditors are external. Under this system, auditors
attend meetings of the Board of Directors and other important meetings, receive reports from directors, etc., on the state of execution of duties,
view important documents, and audit the execution of duties.
The Board of Directors consists of nine directors (of whom three are external directors, including two women) who meet whenever necessary inaddition to the regular monthly Board of Directors meetings. The board makes decisions on management policies, matters stipulated by laws andregulations, and important issues concerning management matters, and oversees the state of execution of duties by directors. In addition, with
officers (nine excluding directors who are also executive officers, including one woman.) participating as observers at Board of Directors
meetings, this system strengthens the function of reporting on the state of execution of duties and allows for quick communication andconfirmation of the intentions of management.
To protect the interests of minority shareholders, the Company has established a special committee under the Board of Directors to provide
appropriate advice and recommendations. The committee is composed of three or more independent members, including external corporate
executives, and the chairperson is selected from among its members, ensuring the independence of the committee. The committee deliberates
and considers matters relating to significant transactions and practices where the interests of the Company’s parent company or subsidiaries
conflict with those of minority shareholders, and provides advice and recommendations to the Board of Directors based on the results.
< Members of the Special Committee >Nobuko Kawashima (external director), Kazuko Kimura (external director), Noriomi Matsumura (external director),
Kunihiko Kamada (external auditor), Yasuo Himeiwa (external auditor), and Masaaki Makikawa (external auditor)
The Company is audited by Deloitte Touche Tohmatsu LLC. The audit for the fiscal year that ended in March 2022 was conducted by Takashi
Iwabuchi and Yuya Minobe, certified public accountants of Deloitte Touche Tohmatsu LLC. In addition, 7 certified public accountants and 17
other people assisted in these auditing activities.
We also receive advice as needed from lawyers regarding business management and day to day operations.
Pursuant to the provision of Article 426, Paragraph 1 of the Companies Act, we stipulate in our Articles of Incorporation that the Board of
Directors may resolve to exempt directors and auditors (including former directors and auditors) from liability for damages due to neglect of
duties to the extent permitted by law. The objective of this provision is to ensure that directors and auditors are able to perform the roles
expected of them to the full. Furthermore, based on the provisions of the Articles of Incorporation pursuant to the provisions of Article 427,
Paragraph 1 of the Companies Act, the Company has entered into agreements with external directors and external auditors that limit their liability
for damages to the legal minimum set in Article 425, Paragraph 1 of the Companies Act.

3. Reasons for Adoption of the Current Corporate Governance System
As a company oriented towards highly specialized research and development, we have judged that the most appropriate corporate governancesystem for the Company is the current one, under which directors who are deeply knowledgeable about our business are able to make decisions
and supervise business execution flexibly, with a clear sense of ownership and a sense of speed, while highly independent external directors
who possess knowledge and experience related to our business work with the Supervisory Board to supervise business execution.

III Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Revitalize General Meetings of Shareholders and Facilitate the Exercise of Voting Rights Update
Supplementary Explanation
Early Notification of General Meetings ofNotification is sent at least three weeks prior to the day of the meeting.
Shareholders

Scheduling of AGMs Avoiding PeakDays

The General Meeting of Shareholders each year is scheduled to avoid days when AGMs
are concentrated so that many shareholders can attend.
17th Ordinary General Meeting of Shareholders: June 21, 201918th Ordinary General Meeting of Shareholders: June 23, 2020
19th Ordinary General Meeting of Shareholders: June 24, 2021
20th Ordinary General Meeting of Shareholders: June 24, 2022
21th Ordinary General Meeting of Shareholders: June 23, 2023

Allowing Electronic Exercise of Voting
RightsShareholders have been able to exercise voting rights via the internet since the 16th
General Meeting of Shareholders.

Participation in Electronic Voting
Platform

We participate in the platform for electronic exercise of voting rights for institutional
investors operated by ICJ Inc.

Provision of Convocation Notice inEnglishAn English translation (summary) of the convocation notice is disclosed on our website on
the same day as the Japanese version.

OtherThe convocation notice and matters disclosed on the internet are disclosed on our website
ahead of sending out the printed notice.
The materials are available at “Stock Information > General Meeting of Shareholders” on
the “Investor Relations” tab.
(https://ir.takara-bio.co.jp/ja/stock/meeting.html)
At a General Meeting of Shareholders, we use a large screen to give more visual overview
explanations of the business report, long-term management concepts and medium-termbusiness plans. In addition, we disclose the results of the exercise of voting rights at a
General Meeting of Shareholders on our website.

2. IR Activities Update
Supplementary Explanation

Preparation and Publication ofDisclosure Policy

Regular Investor Briefings for
Individual Investors

Regular Investor Briefings forAnalysts and Institutional Investors
Regular Investor Briefings forOverseas Investors

Posting of IR Materials on Website
Establishment of Department and /or Manager in Charge of IR

The policy is published on our website at “Disclosure Policy” on the “Investor
Relations” tab.
■ Takara Bio Inc. “Disclosure Policy”
Materials available at https://ir.takara-bio.co.jp/ja/policy.html (Japanese) andhttps://ir.takara-bio.co.jp/en/policy.html (English)(Timing) We hold briefings several times a year.
(Description) We provide an overview of business and explain mainly our
future business plans and key measures over about one hour and then have
Q&A.
(Participants) We aim at about 50 individual investors. Briefings are also
held on the website as necessary.
We hold financial results briefings twice a year (November for the interim
period and May for the full fiscal year). In addition, we provide video
explanations of financial results and conduct individual meetings every
quarter (including the interim and full-year periods). Apart from this, we also
conduct interviews and seminars whenever there is a request.
Currently, our foreign shareholder ratio is not necessarily high so we do nothold these meetings. However, we do respond to overseas investors
individually by providing interviews through events for overseas investors
held by securities companies, conference calls, etc.
The Company publishes financial statements, annual securities reports,
quarterly securities reports, financial results briefing materials, financial
results briefing videos, annual reports, and timely and voluntary disclosurematerials on the Company website at https://ir.takara-bio.co.jp/ja/library.html(Japanese) and https://ir.takara-bio.co.jp/en/library.html (English).
Department: PR & IR Department
Manager in charge of IR: Akira Kawamura, General Manager of PR & IR
Department and responsible for IR communication

Explanation by
the
Representative

EstablishedEstablishedNo

3. State of Initiatives Related to Respect for Stakeholders
Supplementary Explanation
Stipulation of Internal Rules on
Respecting the Position of
Stakeholders

Implementation of Environmental
Activities, CSR activities, etc.

Formulation of Policies on theProvision of Information to
Stakeholders, etc.

We stipulate our basic attitude towards stakeholders in the Takara Group Compliance Action
Guidelines.
The Company has established a basic policy on the promotion of sustainability management, isworking on various social initiatives related to sustainability, including health, through businessactivities, and aiming for both the realization of a sustainable society and the sustainable growthof the Takara Bio Group.
We have established a Sustainability Promotion Committee chaired by the president andpromote sustainability so that we contribute to the resolution of social issues through these
initiatives by identifying materialities, cooperating with stakeholders and working with the Takara
Group.
Based on the Takara Group Compliance Action Guidelines, we disclose management
information such as financial descriptions and the state of our business activities toshareholders, investors, etc., in a timely and appropriate manner, communicate the Company’s
corporate philosophy and management policies clearly, and engage in mutual communication
by taking opinions on and criticisms of our policies seriously. The basic policy on information
disclosure is available from our website at https://ir.takara-bio.co.jp/en/policy.html.
Also, the policy on appropriate information disclosure and ensuring transparency is presented in
the “Takara Bio Corporate Governance Policy.”
https://ir.takara-bio.co.jp/en/sustainability/governance/main/01/teaserItems1/0/linkList/0/link/CG%
0/link/cg_p230629.pdf
20Policy_ed-230629.pdf

IV Matters Related to the Internal Control System
1. Basic Views on the Internal Control System and the State of its Development
Based on Article 362, Paragraph 4, Item 6 of the Companies Act and Article 100, Paragraphs 1 and 3 of the Ordinance for Enforcement of theCompanies Act, we made the following determinations regarding the development of the systems necessary to ensure that the execution of

duties by directors complies with laws and regulations and the Articles of Incorporation, and other systems necessary to ensure theappropriateness of operations as a corporation.
1. Systems to ensure that the execution of duties by directors and employees complies with laws and regulations, and the Articles ofIncorporation, as well as systems to ensure the appropriateness of operations at the corporate group comprised of the Company, its parent
company and subsidiariesi) We established and manage the “Takara Bio Compliance Committee,” chaired by the president and CEO as the organization that supervises
the compliance activities of the Company Group as a whole.
ii) This committee specifies clearly the action guidelines related to the “law and social ethics” that each and every one of the Company Group’s
corporate executives and employees should observe, and provides education for corporate executives and employees within the Groupthrough group training and daily guidance in the workplace based on the “Takara Group Compliance Action Guidelines” formulated by theCompliance Committee, under which the Takara Bio Compliance Committee operates, established at Takara Holdings Inc., the Company’s
parent company (and to which the Company also sends members and working members).
iii) By observing these action guidelines, we will respond resolutely to anti-social forces and have absolutely no relationships with them.
iv) “Helplines” have been installed and are operated in the Compliance Promotion Department of Takara Holdings Inc. and external third-party
institutions as reporting portals in the event that a corporate executive or employee discovers a violation of laws and regulations or otherunfair practices in operations within the Group and it is impossible or difficult to resolve or prevent the problem by normal means andmethods in the course of business. The Group has been informed that disadvantageous treatment of anybody who reports a problem due tothat reporting, etc., is prohibited. v) We conduct internal auditing based on the “Internal Audit Regulations” and strive to ensure the proper
execution of duties by taking necessary measures based on the results of such internal audits. Furthermore, the divisions responsible forinternal audits are independent organizations to ensure a sufficient check function against audited departments, etc.
vi) The Company Group complies with related laws and regulations and the listing rules established by the Tokyo Stock Exchange, develops
company-wide systems to ensure the reliability of financial reports, and evaluates and improves these systems to enhance themcontinuously.
vii) With regard to the relationship between the Company and our parent company, Takara Holdings Inc., Takara Holdings was established as aholding company from the perspective of consolidated business management and the “Takara Holdings Group Company Management
Rules” apply to us, operated with the aim of maximizing the corporate value of the group overall while maintaining the independence andautonomy of group companies, including the Company. We report regularly to Takara Holdings information such as the matters resolved by
the Board of Directors of the Company, and the state of the business activities of the Company and its subsidiaries.
viii) With regard to the relationships between the Company and its subsidiaries, we receive regular reports on business activities while
maintaining the independence and autonomy of the subsidiaries. In principle, we discuss important matters in advance. In addition, thecompany’s auditors and divisions in charge of internal audits work together to implement on-site inspections of subsidiaries and carry out
audits from the perspective of ensuring the appropriateness of business execution.
2. Systems to store and manage information related to the execution of duties by directors
So that we can confirm the state of execution of duties by directors and employees appropriately after the fact, the Company formulates internal
rules related to guidelines on the preparation of records of the state of execution of duties, such as the minutes of General Meetings ofShareholders, minutes of meetings of the Board of Directors, approval documents (documents of decisions made by the president, etc.) andother documents related to decision-making, as well as storage periods, management systems (including security systems), etc., for thoserecords.
3. Rules and other systems on the management of the risk of lossi) The Takara Bio Compliance Committee supervises the overall “crisis management” of the Company Group, and under the supervision of thecommittee, each division works on activities to prevent or mitigate risks in the areas of “laws and social ethics,” the “safety and quality of
products and merchandise,” “safety and health” and other aspects of the environment surrounding the Company Group.
ii) If an emergency occurs, we will respond based on the “Takara Group Emergency Response Manual” and establish an emergency response
headquarters as needed, centered on the president and corporate executives in charge of compliance matters.
4. Systems to ensure the effective execution of duties by directorsi) We hold regular meetings of the Board of Directors once a month, and other meetings as needed as the basis of the system to ensure thatthe duties of directors are executed efficiently.
ii) We have established a system for directors and employees to execute duties and make decisions appropriately and promptly by formulating“Rules for Dividing Roles and Responsibilities” and the “Rules for Authority ” to clarify the internal line of command and the division of roles
and responsibilities.
iii) Under the supervision and instruction of the Board of Directors or individual directors, project teams are organized in each responsible
division or cross-divisionally as needed to work continuously on the streamlining, acceleration and computerization of operations to ensure
the efficiency of management.
iv) We conduct internal audits from an efficiency perspective, and strive to ensure the efficiency of the execution of duties by taking necessary
measures based on the results of such internal audits.
v) We establish management systems at Company subsidiaries along the standards of those at the Company.
5. Matters concerning employees in the event that their appointment is requested by auditors to assist in their duties, and matters concerning
the independence of those employees from directors
If an auditor requires the appointment of an employee to assist in the performance of the auditor’s duties, that employee will be appointed after asystem has been established that ensures the independence of that employee from directors in terms of the chain of command under which that
employee is appointed, their position, benefits, etc.
6. Systems for directors and employees to report to auditors and other systems to ensure that audits by auditors are conducted effectivelyi) In addition to meetings of the Board of Directors, auditors attend important meetings such as the strategy meetings of a business division to
grasp the state of important decision-making processes and business execution. Auditors may view the minutes of meetings of the Board of
Directors, approval documents (documents of decisions made by the president, etc.) and other important documents related to businessexecution, and have the authority to request explanations from directors and employees as necessary. Furthermore, divisions in charge ofinternal audits maintain close coordination with the auditors to implement audits effectively and efficiently.
ii) If directors discover a fact that may cause significant damage to the Company, they must report this to the auditors in accordance with laws
and regulations. If directors of Company subsidiaries discover a fact that may cause significant damage to the subsidiary, they must report tothe auditors of the Company via the division in charge of managing the subsidiary.
iii) Directors and auditors of the Company will ensure that anybody who makes the report above is not treated disadvantageously due to thereport.
7. Matters concerning guidelines related to the processing of expenses or obligations arising from the execution of duties by auditors
When an auditor requests an advance payment or reimbursement, etc., of expenses arising from the execution of duties, the Company willpromptly process those expenses or obligations, excluding cases where the costs are deemed unnecessary for the execution of the duties of theauditor.

Please refer to “Schematic Diagram of Corporate Governance System” at the end of this document.

2. Basic Views on Eliminating Anti-Social Forces and the State of Development
We will deal resolutely with anti-social forces such as racketeers and organized crime syndicates, and will have absolutely no relationships withthem. Even if we receive an unreasonable demand, we will take a resolute stand and will not attempt to resolve the situation by handing overmoney and goods. We will not conduct any transactions with anti-social forces or business partners who have a relationship with anti-social
forces. This basic view is stated clearly in the aforementioned “Takara Group Compliance Action Guideline,” which have been established as acode of conduct for each and every corporate executive and employee to comply with the “law and social ethics,” and we are disseminatingthese guidelines thoroughly. The Company distributes a portable manual booklet containing the guidelines to all corporate executives andemployees, and gives instructions so that they can be confirmed whenever needed. In addition, we have designated General Affairs Department
as the department that oversees the handling of the above. It has been striving to collect information from specialized external organizations
such as the police authorities, as well as local companies. If something happens, the department responds in close collaboration with relevant
specialized organizations.

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

No

Supplementary Explanation---

2. Other Matters Concerning the Corporate Governance System, etc. Update
The Company's internal systems related to the timely disclosure of corporate information are as follows.
The Company discloses corporate information to investors in a timely and appropriate manner in accordance with the laws and regulations
related to securities exchanges, the regulations of the Tokyo Stock Exchange, and the internal “Rules for Disclosure of Important Information,
etc.”
The flow from generation to aggregation and disclosure of the Company’s corporate information is as follows.
1. In accordance with the “Guidebook on the Timely Disclosure of Company Information,” if information subject to disclosure is generated, thedepartment in charge of information (including Company subsidiaries) reports promptly to PR & IR Department (excluding financial information)
or Finance Department (financial information).
2. After receiving a report, PR & IR Department or Finance Department verifies the information and reports promptly reports to General Affairs
Department, where the information of the Company overall is compiled.
3. The manager responsible for the handling of internal information (the corporate executive in charge of General Affairs Department) receives
a report from General Affairs Department and deliberates on the need, content, and method for disclosing the information together with thecorporate executives in charge of PR & IR Department, Finance Department and other supervisory departments.
4. Each director will see the results of these deliberations and after hearing opinions, the determinations will be reported to a meeting of theBoard of Directors. If the information is a matter to be resolved upon by the Board of Directors, the Board of Directors will resolve upon the matterand determine at the same time the need for disclosure. If the information is not a matter to be resolved upon by the Board of Directors, it will bea report. Depending on the case, the information may be disclosed with the approval of the representative director based on the mindset of timely
disclosure.
5. This information is disclosed in a timely manner in accordance with the methods established by the Tokyo Stock Exchange by the person
responsible for the handling of information, who is notified to the Tokyo Stock Exchange in advance, and is also published on the Company’s
website. In addition, we also submit materials to the press club or hold a press conference as required.
Please refer to “Schematic Diagram of Corporate Governance System” at the end of this document.

< Structure of Corporate Governance System >General Meeting of Shareholders

Appointment
and dismissal

Appointment
and dismissal

Appointment
and dismissal

ReportReportBoard of Directors

Accounting auditor
Supervisory Board

Appointment anddismissal Supervision

Audit

Audit

Consultation

Advice andrecommendations

Collaboration
ReportAudit

Nominations andCompensation Committee

Consultation

Special Committee
Advice andrecommendations

Appointment
and dismissal

Collaboration

Representative Director
ReportReportExecutive Officers
Instructions

ReportInstructions

ReportCompliance Committee
Internal Control Committee
Quality Assurance Committee
Sustainability Promotion Committee
ReportEducation

Divisions and Group Companies

Internal Audit Department
Collaboration
Audit

< Schematic Diagram of Disclosure of Corporate Information >B: Information Subject to Fair
Disclosure Rules (Note 2)

A: Information Requiring Timely Disclosure (Note 1)

Corporate Information(Financial Information)

Corporate Information(Non-Financial Information)

Corporate Information(Financial Information / NonFinancial Information)

Department Responsible forInformation(Including Subsidiaries)

Department Responsible forInformation(Including Subsidiaries)

Department Responsible forInformation(Including Subsidiaries)

Finance Department

PR & IR Department

General Affairs Department

Person in charge of handling internal information (the director in charge of General Affairs
Department), and the director in charge of PR & IR Department
Consultation between the director in charge of Finance Department and the director in charge of thedepartment in charge* Discussion of the content and method of disclosure, etc.

Board of Directors

Representative Director(Note 3)

Information Disclosure(Tdnet, Takara Bio website, Press Club where appropriate)-> shows the flow of data.
(Note 1, 2) Includes information not clearly not subject to disclosure.
(Note 3) Some cases may be disclosed with the approval of the representative director.
(Note 4) Disclosure of legally disclosed information is not in accordance with this schematic diagram.