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

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

Annual Securities Report
Article 24, paragraph 1 of the Financial Instruments andExchange Act
Director-General of the Kanto Local Finance Bureau
June 29, 2022
20th term (from April 1, 2021 to March 31, 2022)
Takara Bio Inc.
Takara Bio Inc.
Koichi Nakao, President and CEO
7-4-38, Nojihigashi, Kusatsu-shi, Shiga+81-77-565-6978
Takuya Kakemi, Executive Officer, in charge of PR & IR
Department
7-4-38, Nojihigashi, Kusatsu-shi, Shiga+81-77-565-6978
Takuya Kakemi, Executive Officer, in charge of PR & IR
Department
Tokyo Stock Exchange, Inc.
(2-1 Nihombashi Kabutocho, Chuo-ku, Tokyo)

1

A. Company information
I. Overview of the Company
1. Trends in selected financial data
(1) Summary of consolidated financial data
Term
Fiscal year-end

16th term

17th term

18th term

19th term

20th term

March 2018

March 2019

March 2020

March 2021

March 2022

Net sales(Millions of yen)

32,31235,841

34,56546,086

67,699Ordinary profit(Millions of yen)

3,861

5,665

6,347

14,15928,459Profit attributable to owners of parent(Millions of yen)

2,335

3,657

3,819

9,547

19,849Comprehensive income(Millions of yen)

2,455

2,705

3,216

8,674

23,689Net assets(Millions of yen)

61,95964,09566,591

74,302

96,064

Total assets(Millions of yen)

68,67071,04075,00989,750115,712

Net assets per share(Yen)

513.66531.57552.23616.05796.18

Earnings per share

(Yen)

19.39

30.38

31.72

79.29

164.84

Diluted earnings per share

(Yen)

–

–

–

–

–

Shareholders’ equity ratio

(%)

90.1

90.1

88.7

82.7

82.9

Return on equity (ROE)

(%)

3.84

5.81

5.85

13.57

23.35

(Multiple)

104.79

84.51

70.33

37.43

13.59

Net cash flows from (used in) operating
activities(Millions of yen)

3,935

5,783

6,339

13,943

6,985

Net cash flows from (used in) investing
activities(Millions of yen)

(14,755)(5,576)(212)(3,778)(7,071)

Net cash flows from (used in) financing
activities(Millions of yen)

(1,205)

(541)

(946)

(1,103)(2,070)Cash and cash equivalents at end of period(Millions of yen)

10,051

9,464

14,462

23,30822,160

Number of employees

1,448

1,435

1,485

1,539

1,666

Price-earnings ratio (PER)(Persons)

Notes: 1. The Group aims to secure a competitive advantage by focusing on reagents, instruments and contracting for the
support of advanced biotechnology research and the development of regenerative medicine products such as genetherapy products. For this reason, a large amount of research and development investment has been made in relation
to net sales. The percentages of research and development expenses in relation to net sales for the 16th through 20thterms are 14.4%, 12.1%, 11.2%, 12.0% and 9.0%.
2. Information on diluted earnings per share is omitted due to an absence of dilutive shares.

2

(2) Financial data on the reporting company
Term

16th term

17th term

18th term

19th term

20th term

Fiscal year-end

March 2018

March 2019

March 2020

March 2021

March 2022

Net sales(Millions of yen)

20,976

21,74021,98433,88550,398

Ordinary profit(Millions of yen)

2,660

3,690

4,008

11,49525,063

Profit(Millions of yen)

1,404

2,756

2,623

8,681

18,485

Share capital(Millions of yen)

14,965

14,965

14,965

14,965

14,965(Shares) 120,415,600

120,415,600

120,415,600

120,415,600

120,415,600

Total number of shares issued
Net assets(Millions of yen)

57,93260,146

61,927

69,64586,204

Total assets(Millions of yen)

62,17064,69368,045

81,124

101,386

Net assets per share(Yen)

481.10499.49514.28578.38715.89Dividends per share(Interim dividends per share)

(Yen)

4.50
(–)

7.00
(–)

8.00
(–)

16.00
(–)

33.00
(–)

Earnings per share

(Yen)

11.67

22.89

21.79

72.10

153.51

Diluted earnings per share

(Yen)

–

–

–

–

–

Shareholders’ equity ratio

(%)

93.2

93.0

91.0

85.9

85.0

Return on equity (ROE)

(%)

2.44

4.67

4.30

13.20

23.72

Price-earnings ratio (PER)(Multiple)

174.19112.15102.40

41.17

14.60

Dividend payout ratio

(%)

38.6

30.6

36.7

22.2

21.5

Number of employees(Persons)

471

480

517

570

669

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

133.3(115.9)168.8(110.0)147.3(99.6)

196.6(141.5)151.1(144.3)Highest share price

(Yen)

2,176

3,210

2,826

3,535

3,350

Lowest share price

(Yen)

1,397

2,006

1,481

2,070

2,146

Notes: 1. The Company aims to secure a competitive advantage by focusing on reagents, instruments and contracting for the
support of advanced biotechnology research and the development of regenerative medicine products such as genetherapy products. For this reason, a large amount of research and development investment has been made in relation
to net sales. The percentages of research and development expenses in relation to net sales for the 16th through 20thterms are 14.2%, 12.2%, 10.8%, 11.1% and 9.0%.
2. Information on diluted earnings per share is omitted due to an absence of dilutive shares.
3. The highest share price and lowest share price are those on the Tokyo Stock Exchange (First Section).

32. Company history
Based on a resolution to approve a plan to split off the business of the biotechnology division in an
extraordinary general meeting of shareholders of Takara Shuzo, Co., Ltd. (currently Takara Holdings Inc.;
hereinafter referred to as “Takara Holdings”) held on February 15, 2002, the Company was established on
April 1, 2002, as a wholly-owned subsidiary of Takara Holdings, assuming its biotechnology business bymeans of a company split (butteki-bunkatsu) in order to fully take advantage of the characteristics of thebiotechnology business and provide a business environment for increasing growth ability andcompetitiveness.
Therefore, matters related to before the establishment of the Company contained within this document are
related to the sales of the biotechnology division of Takara Shuzo, Co., Ltd.
(1) History of the biotechnology division of Takara Shuzo, Co., Ltd.
Date
Jan. 1970
Oct. 1973
Oct. 1979
June 1988
Jan. 1990
Aug. 1993
Mar. 1995
May 1995
Oct. 1995
July 2000
July 2001

Event
Completed construction of the Central Research Laboratories in Otsu City, Shiga.
Commenced the AgriBio business. Out-licensed and commercialized technology for artificial
cultivation of Bunashimeji mushrooms.
Commenced the Genetic Engineering Research business. Launched the first domestically produced
restriction enzymes. Commenced the current Bioindustry business.
Acquired exclusive distribution rights in Japan for a gene amplification system using PCRtechnology.
Commenced operation of the research reagent manufacturing and contracted research facility in
Kusatsu City, Shiga (currently Kusatsu Office of the Company).
Established Takara Biotechnology (Dalian) Co., Ltd. in China to manufacture biotechnology
products in Dalian, China.
Established Takara Biomedical Europe S.A. (currently Takara Bio Europe S.A.S.) as a subsidiary for
selling biotechnology research reagents in Gennevilliers, France.
Developed the RetroNectin Method. Commenced Gene Therapy business.
Established Bohan Biomedical Inc. (currently Takara Korea Biomedical Inc.) as a subsidiary sellingbiotechnology research reagents in Seoul, Korea.
Established DRAGON GENOMICS Co., LTD. as a subsidiary conducting genome sequence analysis
in Yokkaichi City, Mie.
Established Mizuho Norin Co., Ltd. as a subsidiary producing and selling mushrooms in Mizuho
Town (currently Kyotamba Town), Kyoto.

(2) History of Takara Bio
DateApr. 2002

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

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

4

Date
Aug. 2014
Sept. 2014
Oct. 2014
Aug. 2015
Nov. 2015
Mar. 2016
Apr. 2016
Apr. 2016
Jan. 2017
Feb. 2017
Mar. 2017
May 2017
Jan. 2019
Mar. 2019
Jan. 2020
Oct. 2020
Jan. 2021
Aug. 2021
Apr. 2022

Event
Acquired all shares of Cellectis AB manufacturing and selling stem cell products in Gothenburg,
Sweden, making it a subsidiary.
Cellectis AB changed trade name to Takara Bio Europe AB.
Began operation of the Center for Gene and Cell Processing (Kusatsu City, Shiga), and commenced
full-scale operation of the CDMO (Contract Development and Manufacturing Organization) businessdeveloping and manufacturing regenerative medicine products, etc.
New head office completed in Kusatsu City, Shiga, and head office functions relocated.
All shares of Takara Bio Europe AB used as contribution in kind for Takara Bio Europe S.A.S. tochange to indirect ownership.
Changed listing from Tokyo Stock Exchange Mothers to the First Section of the Tokyo Stock
Exchange.
Relocated registered head office location from Otsu City, Shiga to Kusatsu City, Shiga.
Clontech Laboratories, Inc. changed trade name to Takara Bio USA, Inc.
Acquired all shares of Rubicon Genomics, Inc., which develops, manufactures and sells research
reagents in Ann Arbor, U.S., through Takara Bio USA Holdings, Inc., making it a subsidiary.
Acquired all shares of WaferGen Bio-systems, Inc., which manufactures and sells research reagentsand instruments in Fremont, U.S., through Takara Bio USA Holdings, Inc., making it a subsidiary.
Executed an absorption-type merger of Rubicon Genomics, Inc. with Takara Bio USA, Inc. as thesurviving company.
Executed an absorption-type merger of WaferGen Bio-systems, Inc. with Takara Bio USA, Inc. as thesurviving company.
Transferred the business related to functional foods to SHIONOGI HEALTHCARE CO., LTD. bymeans of a company split (absorption-type split).
Transferred the business related to mushrooms to Yukiguni Maitake Co., Ltd. As a result, Mizuho
Norin Co., Ltd. and KINOKO CENTER KIN INC. fell outside the scope of consolidation. Ended the
AgriBio business.
Constructed Center for Gene and Cell Processing II and began full-scale operation in responding to
the expansion of CDMO business, preparation for the launch of in-house gene therapy project andthe expansion of research and development.
Obtained approval to manufacture and sell Takara SARS-CoV-2 Direct PCR kit, an in vitro
diagnostic, and launched it in November in Japan.
Established Takara Bio UK Ltd. as a subsidiary selling research reagents and instruments in London,
UK.
Relocated the head office of Takara Bio USA, Inc. from Mountain View, U.S. to San Jose, U.S.
Transferred from the First Section to the Prime Market of the Tokyo Stock Exchange due to therevision of the market segments of the exchange.

53. Description of business
The Group is made up of the Company’s parent company, the Company and the Company’s nine groupcompanies (subsidiaries) (hereinafter referred to as the “Group” including the Company), and conducts
businesses in Bioindustry and Gene therapy. The businesses of the Group and the positioning of eachcompany within the relevant businesses are as follows.
Information is shown by business area due to segment information not being shown.
(1) Current business details(i) Bioindustry business
The Group’s main customers are universities, public research institutes, enterprises and testing
companies using biotechnology to conduct research, product development and testing businesses.
The Group provides finished goods, merchandise and services to such customers via distributors ordirectly to customers. When doing so, it conducts sales promotions such as distributing technicaldocuments as printed material or publishing them on the Company’s website, increasing added value
and differentiating from competitors.
1) Status of biotechnology R&D and industrial usage
Biotechnology refers to technologies effectively utilizing the capabilities and qualities oforganisms in areas such as medicine, biologics development, diagnosis, agriculture, environment,
and resources and energy. Genetic engineering was developed in the 1970s, leading to thebeginning of the use of modern biotechnology. Since then, technological innovation has
continued in areas such as genomes and stem cells, fundamental and applied research along withproduct development utilizing biotechnology have been actively carried out globally, and suchareas have continued to expand.
2) The Group’s business areas
The Group uses genetic engineering and cell engineering as fundamental technologies to focus
on providing a wide range of products, merchandise, and services spanning from the areas ofresearch support that supports fundamental research of universities, public research institutes andenterprises to industrial support that supports the industrial activities of enterprises, etc.
Research and development using biotechnology is based on clarifying life phenomena on a
genetic and cellular level. The Group has cultivated genetic engineering and cell engineering
technologies, such as PCR/real-time PCR, cloning, gene/protein expression, gene delivery,
vector systems, next-generation sequencing, genome editing and stem cells as technologies foranalyzing genes and cells. Using these technologies as a foundation, the Group is expanding its
products and services to include DNA/RNA analysis products and bulk/custom production of
enzymes, etc. in the area of molecular biology, and products related to stem cells (ES/iPS cells,etc.) and single cell analysis in the area of cellular biology. Furthermore, the Group is operatinga CDMO (Contract Development and Manufacturing Organization) business conducting contract
manufacturing of regenerative medicine products, etc., compliant with GCTP/GMP(Note) andcontract services as a research and development partner in order to expand business areas fromthe area of research support to the area of industrial support. In the CDMO business, we areutilizing technology and knowhow cultivated in development of research reagents, in clinicaldevelopment of gene therapy and cell therapy to be contracted for genetic analysis and testing
and contracted for services related to regenerative medicine products.
Note:

GCTP (Good Gene, Cellular and Tissue-based Products Manufacturing Practice) is astandard for manufacturing management and quality management of regenerative
medicine products, and GMP (Good Manufacturing Practice) is a standard for
manufacturing management and quality management of pharmaceuticals and quasipharmaceutical products.

3) Reagents
In research using biotechnology, it is necessary to use many types of reagents according to theobjective, stage and target substance. The Company has proceeded to develop new technologies
and new products closely following the advancements in genetic engineering as a major
6manufacturer of genetic engineering research reagents since the launch of the first domestically
produced restriction enzymes in 1979.
The Company acquired US-based Clontech Laboratories, Inc. (currently Takara Bio USA, Inc.)in September 2005, which added Clontech® products centered on the area of cellular andmolecular biology to the Group’s product lineup of research reagents. Furthermore, the Company
acquired Sweden-based Cellectis AB (currently Takara Bio Europe AB) in August 2014, adding
Cellartis® products centered on the area of stem cells, and acquired US-based Rubicon Genomics,
Inc. (later merged into Takara Bio USA, Inc.) in January 2017, strengthening the lineup of
products in the area of ultra-low nucleic acid sample analysis.
In addition, the Company began sales of in vitro diagnostics using PCR technology in November
2020.
4) Instruments
Scientific instruments also require knowledge of biotechnology, and are often developed andsold as systems in combination with reagents as consumables for the instruments, and are an area
where the Group can obtain synergies.
The Group’s business in this area began with the commencement of import and sale of a gene
amplifier called a thermal cycler, which is essential for the PCR method, from the United Statesin 1988. Since then, the Company has endeavored to expand business by developing PCR
instruments and real-time PCR instruments incorporating the Company’s uniqueexperimentation know-how.
Furthermore, the Company acquired US-based WaferGen Bio-systems, Inc. (later merged into
Takara Bio USA, Inc.) in 2017, which has proprietary technology in the area of single-cell
analysis, strengthening the ability to manufacture and sell scientific instruments.
5) CDMO
The Company provides paid services for universities, public research institutes and enterprises
based on contracts for experiments, research and development, and manufacturing itself.
a) Contract services related to genetic analysis and testing
In this business, the Company’s proprietary research and development capability and knowhow are its sales points, and rather than being limited to simple gene sequencing analysis,
the Company is participating in large-scale genome analysis projects utilizing nextgeneration sequence analysis and providing genetic functional analysis services.
Furthermore, the Company provides advanced genetic testing services by applying gene
analysis technology cultivated through fundamental research support. In addition, under areliability assurance system, the Company conducts numerous types of nucleotide sequence
analysis used in pharmaceutical applications by pharmaceutical companies, etc. and genome
tests of cancer patient’s specimens based on requests from medical institutions.
b) Contract services related to regenerative medicine products
Utilizing the technology and know-how cultivated in clinical development of regenerative
medicine products such as gene therapy, the Company has established the facilities andsystem necessary for providing services related to products such as regenerative medicine touniversities, public research institutes and enterprises. In this business, the Company
performs contract manufacturing, development of manufacturing processes, development ofquality control testing methods, pilot manufacturing, and bioassay services compliant with
GCTP/GMP such as for gene delivery vectors, vaccines, and cells used in regenerative
medicine.
6) Other
The Company is proceeding out-licensing of the patents and know-how it possesses.
(ii) Gene therapy business
The Company is engaged in the gene therapy business as an applied area of its core technologies ofgene engineering technology and cell engineering technology. In this business, it builds biologics
7

development platform technologies required for gene therapy, etc. and activities to create new clinicalprojects, etc. Furthermore, the Company is also working to maximize the value of projects it hasdeveloped and out-licensed to pharmaceutical companies.
1) The current state of gene therapy
In the past, pharmaceuticals were centered on low-molecular compounds manufactured usingchemical synthesis, but with the advancements in biotechnology in recent years,
biopharmaceuticals with a main component of antibodies or recombinant protein, etc., haveemerged. Furthermore, due to advances in new technologies such as stem cells and virus vectors,
regenerative medicine and gene therapy, etc. using cells and genes as products have been gaining
attention as new modalities (means of therapy).
Gene therapy is a method for treating patients by administering therapeutic genes or cells
embedded with these genes to the human body. As a result of progress in development centeredon U.S. and European pharmaceutical companies, there has recently been a succession oflaunches to market, and competition between bio-ventures and pharmaceutical companies isintensifying.
2) Development of fundamental biologics technologies
The Company aims to be a biologics development company that continuously creates newmodalities by building biologics development platform technologies. In its building of biologics
development platform technologies, the Company is particularly focused on and engaged inthemes such as virus vector mass production methods, development of next-generation CAR
gene therapy methods adaptable for solid tumors, development of virus vectors for organ-specificin vivo gene therapy and development of next-generation TCR and CAR gene therapy methods
with a persistent antitumor effect.
3) New clinical development projects
The Company is engaged in preparation for clinical trials of CD19-JAK/STAT-CAR gene therapy
code: TBI-2001) and development of other new projects aimed at resolving persistence oftherapy effects and adaption to solid tumors said to issues in existing CAR gene therapy.
4) Out-licensed projects
In projects which the Company conducted initial clinical development and out-licensed throughpartnerships with pharmaceutical companies, the Company is engaged in the preparation of
manufacturing and supply systems after launch and the expansion of indications through close
coordination with partner pharmaceutical companies for the purpose of maximizing the value ofeach project.
Clinical development is progressing on NY-ESO-1・siTCR™ (code: TBI-1301), which is anengineered T-cell therapy, as an out-licensed project. **Of the three out-licensed projects, development was halted on two projects, oncolytic
virus canerpaturev (C-REV, code TBI-1401) and CD19-CAR gene therapy (code TBI1501), in November 2021, after reaching agreements with the out-licensing partners.

8(2) Positioning of each company in the Group(i) Bioindustry business
The Company performs development, manufacturing and sale of reagents and instruments, as wellas contracted services. In China, Takara Biotechnology (Dalian) Co., Ltd. performs development andmanufacturing of reagents along with contracted services, and Takara Biomedical Technology(Beijing) Co., Ltd. performs sales of reagents and instruments. In Europe, Takara Bio Europe S.A.S.
and Takara Bio UK Ltd perform sales of reagents and instruments, and Takara Bio Europe AB
performs manufacturing of reagents and contracted services. Takara Korea Biomedical Inc. performs
sales of reagents and instruments in South Korea. Takara Bio USA, Inc. performs development andmanufacturing of reagents and instruments in the United States as well as sales worldwide. DSSTakara Bio India Private Limited performs manufacturing and sales of reagents in India.
(ii) Gene therapy business
The Company is engaged in the building of biologics development platform technologies requiredfor gene therapy, etc., new clinical project creation activities, and the maximization of project value
for projects developed by the Company and out-licensed to pharmaceutical companies.
(3) Group business structure chart
The status of the above Group is outlined in the following group business structure chart indicating therelationships between the Company and major subsidiaries.

Takara Holdings Inc. (parent company)

Takara Bio Inc.

TakaraBio
UK
Ltd (*)

Takara Bio
Europe AB (*)

Takara Bio
USA, Inc. (*)

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

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

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

DSS Takara
Bio India
PrivateLimited (*)

Takara Korea
Biomedical Inc.
(*)

Clients
Payment of trademark licensing fees

Flow of product and services
Flow of raw materials, etc.

*

9Consolidated subsidiaries

Takara Holdings Inc. (First Section, TSE) is the parent company, which holds 60.93% of voting rights in
the Company as of March 31, 2022. There are transactions between the Company, Takara Holdings, andTakara Holdings’ group companies (Takara Holdings’ subsidiaries and affiliates). The position of theCompany in the Takara Holdings Group and the principal transactions between the companies in theGroup and the Company are as follows.
(i) Positioning of the Company within the Takara Holdings GroupThe Takara Holdings Group consists of Takara Holdings, which is a pure holding company, and its
61 group companies (59 subsidiaries and two affiliates). Within the Group, the Company ispositioned as an operating subsidiary specializing in biotechnology, and conducts biotechnology
business along with the Company’s nine group companies (subsidiaries).
(ii) Transactions with the Takara Holdings GroupThe Company has real estate lease transactions primarily related to sales sites, transactions related touse of trademark rights, and transactions related to the outsourcing of computer-related services, etc.,with the Takara Holdings Group. Details are stated in “II. Overview of business 2. Business risks (5)The Company’s parent company.”
4. Overview of subsidiaries and other affiliates
Name

Address

Share capital orinvestments incapitalPrincipal contentsof business

Ratio of voting
rights holding(%)

Relationship

Parent company

Takara Holdings(Note 2)

Inc. Shimogyo-ku,
Kyoto City

JPY 13,226 million

Pure holding
company

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

Consolidated subsidiaries
Takara Bio Europe S.A.S. Saint-Germain-enLaye, France(Note 5)

Takara Bio Europe AB(Note 4)

Gothenburg,
SwedenTakara Bio UK Ltd(Note 4)

London, United
Kingdom

Takara Biotechnology(Dalian) Co., Ltd.
(Note 3)Dalian, Liaoning
Province, China

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

Sale of reagents
EUR 891,000
and instruments

Four officers concurrently serving(two officers and two employees
100.00 of the Company)
Purchase of products from theCompany

Manufacture and
SEK 2,222,000 sale of reagents,
contract businessSix officers concurrently serving(two officers, one executive
officer and three employees of the
100.00 Company)[100.00] Delivery of products to theCompany
Purchase of products from theCompany

Sale of reagentsand instruments

100.00 One officer concurrently serving[100.00] (one employee of the Company)

Development,
manufacture andsale of regents,
contract business

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

Sale of reagentsand instruments

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

GBP 100,000

JPY 2,350 million

JPY 1,330 million

10

Name

Address

Takara Korea Biomedical Seoul, South
Korea
Inc.

Share capital orinvestments incapitalKRW 3,860 million

Principal contentsof business

Ratio of voting
rights holding(%)

RelationshipSale of reagentsand instruments

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

Manufacture andsale of reagents

Three officers concurrently
serving (one officer, one
executive officer and one
51.00 employee of the Company)[1.00] Delivery of products to theCompany
Purchase of products from theCompany

DSS Takara Bio India
New Delhi, India
Private Limited (Note 4)

INR 110 million

Takara Bio USA
Holdings Inc. (Note 3)

Management of
USD 70,857,000
subsidiaries

Five officers concurrently serving(three officers, one executive
100.00
officer and one employee of theCompany)

Development,
manufacture andsale of reagentsand instruments

Five officers concurrently serving(three officers, one executive
officer and one employee of the
100.00 Company)[100.00] Delivery of products to theCompany
Purchase of products from theCompany

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

San Jose, U.S.

San Jose, U.S.

USD 83,000

Notes: 1. The principal businesses of each group company are shown in the “Principal contents of business” column because
the Group has a single segment.
2. This company files its Annual Securities Report.
3. These companies are classified as “Specified Subsidiaries” under the Financial Instruments and Exchange Act ofJapan.
4. The figures in brackets in the “Ratio of voting rights holding” column are indirect holding ratio included in the
figures outside the brackets.
5. The percentage of net sales (excluding internal sales between consolidated companies) exceeds 10% of consolidated
net sales.
Key profit and loss information(Millions of yen)
Takara Bio Europe S.A.S.

Takara Biomedical
Technology (Beijing) Co.,Ltd.

(1) Net sales

8,183

11,80013,691(2) Ordinary profit

1,556

2,008

1,924

(3) Net income

(431)

1,502

1,550

(4) Net assets

2,455

3,821

26,934(5) Total assets

3,236

6,274

29,711

11

Takara Bio USA, Inc.

5. Information about employees(1) Consolidated companies
As of March 31, 2022
Number of employees

1,666

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

(2) Information about reporting company
Number of employees

Average age

Average years of service

669

39.8

10.8

As of March 31, 2022
Average annual salary(thousands of yen)
7,051

Notes: 1. The number of employees is the number of working employees excluding temporary employees and dispatchedemployees.
2. Average annual salary includes bonuses and surplus wages.
3. The average years of service state the total number of years from Takara Shuzo Co., Ltd. (currently Takara Holdings)
prior to the company split.
4. Information by segment has been omitted because the Company is a single segment.
5. The number of employees increased by 99 compared to the end of the previous fiscal year due to hiring associatedwith business expansion.

(3) Status of labor union
Employees are members of the TaKaRa Labor Union, and there were 449 members as of March 31,
2022.
There are no notable matters with the labor union.

12II. Overview of business
1. Management policy, management environment, issues to address, etc.
Please note that matters concerning the future in this article were determined by the Group as of the end of
the fiscal year under review.
(1) Management policy
Under the corporate philosophy of “contributing to the health of humankind through the developmentof revolutionary biotechnologies such as gene therapy,” the Group aims to contribute to society andenhance corporate value through both “Bioindustry” and “Gene Therapy” by utilizing the technologicalfoundation of biotechnology.
(2) Management strategy, etc.
The Group has formulated the “Long-Term Management Plan 2026” for the six years ending in fiscal
2026(Note), and “Medium-Term Management Plan 2023” for the three years ending in fiscal 2023(Note).
Note: Fiscal 2026 and fiscal 2023 refer to the fiscal year ending March 31, 2026 and 2023,
respectively.
(Reference) Vision of Long-Term Management Plan 2026

(i) Business area expansion
Expand the business areas from research support in academia to industrial applications, clinicalrelated fields, and biologics development(ii) Development of new technology
Develop platform technologies on biologics development via developing new products such as
research reagents, and new menus for CDMO business13

Overview of Long-Term Management Plan 2026
(1) Positioning and objectives
Under our corporate philosophy of “contributing to the health of humankind through the developmentof revolutionary biotechnologies such as gene therapy,” the Group has a figure aimed in fiscal 2026
to achieve sustainable growth.
(2) Term
Fiscal 2021 to fiscal 2026 (six years)(3) Vision (ideal)
Through the “Reagents and Instruments business” and the “CDMO business”, the Group promotes
the building of biologics development platform technologies and aims to be a biologics development
company(Note) that continuously creates new modalities.
Note: A company that earns profits by licensing-out the newly developed modalities, not a
pharmaceutical company which fully integrated all function of pharmaceutical R&D,
manufacturing, and sales within a company.
(4) Quantitative targets for the final year of the plan
Operating profit: ¥10 billion, ROE:8% or more
Overview of Medium-Term Management Plan 2023
(1) Term
Fiscal 2021 to fiscal 2023 (three years)(2) General policy
The Group will build a foundation for growth over the next three years. It will promote businessgrowth strategies and strategies to strengthen its management foundation, with aim of realizing LongTerm Management Plan 2026 (operating profit of ¥10 billion).
(3) Quantitative targets for the final year of the plan
Operating profit: ¥6.5 billion, ROE: 6% or more** The results forecast for fiscal 2023 is for operating profit of ¥15 billion and ROE of 10.7%.
(4) Business strategy
・ Sustained growth in the core businesses of the “Reagents and Instruments business” and the“CDMO business”
・ Accelerate biologics development alliance and create new clinical projects to achieve dramatic
growth in the future
・ Accelerate expansion into growing global markets and expand business domains
・ Abolish the business division system and reorganize into an organization to accelerate growththrough the integration of divisions(5) Strengthening our management base・ Aggressive growth investment, enhancement of shareholder returns, and improvement of ROE・ Cultivation of human resources, organization, and work environment to support growth・ Strengthen platform technology and R&D
・ Build a new earnings base by improving productivity
・ Create social value through the implementation of corporate philosophy

14

(3) Objective indicators, etc., for determining the state of achievement of management targets
Quantitative targets: Operating profit of ¥10 billion and ROE of 8% or more in fiscal 2026, which isthe final year of the plan.
(4) Management environment
The management environment surrounding the Group is changing significantly in Japan and overseas,
and becoming increasingly difficult. Recent development includes COVID-19, the prolonged trade
friction between the United States and China, and Russia’s invasion of Ukraine. And also, in the areasof gene therapy, regenerative medicine products that the Group is actively pursuing, there has been
progress with the development of various modalities and the practical applications thereof, and global
competition is intensifying without regard for the size of the company such as bio-ventures andpharmaceutical companies.
Furthermore, society’s interest in companies’ initiatives to address sustainability such as environmental
and social issues are gaining attention, companies need to actively engage in the resolution of not only
performance and finance, but also initiatives to resolve social issues.
(5) Priority business and financial issues
In the Long-Term Management Plan 2026 and the Medium-Term Management Plan 2023, the Groupwill realize sustained growth by engaging in the following issues. Earnings increased significantly due
to reagents related to the new coronavirus PCR tests in the fiscal year under review, and the Group willcontinue to engage in measures to create growth infrastructure as mentioned in the Medium-Term
Management Plan and the Long-Term Management Plan. The Group will continue to check quantitative
targets and KPIs while considering revisions if required and as needed.
Business growth strategy
The Group aims to achieve sustained growth in both the “Reagents and Instruments business” and the“CDMO business” that are its core businesses, and accelerates the engineering of biologics development
platforms and the gene & cell therapy alliances, and creating new clinical development projects for
future rapid growth.
(1) Reagents business・ Aim to optimize development themes at our R&D sites in Japan, the U.S., and China, to improve
development efficiency.
・ Distribute and reorganize manufacturing systems in Japan, the U.S., China, and Europe to optimize
and improve efficiency throughout the Group.
In addition, strive to improve competitiveness in terms of price and quality by continually reducing
costs and expanding the scope of quality management system certification.
・ Build a “glocal” sales strategy that takes regional characteristics into account.
(2) Instruments business・ Strengthen the development of PCR-related products for industrial and medical fields, such as virus
testing, and further develop them into veterinarians, livestock, and environmental fields.
・ In addition to aiming to expand sales by enhancing applications such as single-cell analysis system,
the Company will also use it to develop new menus for its CDMO business.
・ Reorganize manufacturing and development systems, and develop new products with high addedvalue by systematizing instruments and specialized reagents.
(3) CDMO business・ Aim to expand the CDMO business by taking advantage of the dramatic improvement in
manufacturing capacity for products such as regenerative medicine by expanding the Center for
Gene and Cell Processing.

15

・ Further strengthen the GMP manufacturing system, including scaling up virus vector
manufacturing, improving the productivity of gene-transduced cells, and cutting costs, in the fields
related to regenerative medicinal products. Also establish a manufacturing system enabling support
for new modalities such as mRNA.
・ Make efforts to enter clinically relevant fields and to improve the ability to handle large-scale
genome analysis projects, in the field of gene analysis and gene testing.
(4) Gene & Cell therapy alliance・ Regarding the TBI-1301 (NY-ESO-1 ・ siTCR™) project, advance clinical development withpartners, aiming at early launch.
(5) New clinical development projects
・ Promote the development of new gene therapy projects including the TBI-2001 (CD19-JAK/STATCAR) project.
・ Develop more effective CARs and siTCR™ ex vivo gene therapy, applicable to solid cancer otherthan blood cancer.
・ Develop a new viral vector that has a higher therapeutic effect for in vivo gene therapy and can beadministered with less burden on patients.
Strategy for strengthening the management baseTransform into a corporate culture that will realize the Long-Term Management Plan 2026 and establish
a solid foundation for growth by advancing five management foundation strategies linked to ourbusiness strategies. Implement management with consideration of sustainability at the same time.
(1) Finance
Maintain and improve shareholder returns and ROE by continuing to make aggressive growthinvestments while maintaining financial soundness.
(2) Human resources and organization
Focus on globalization and the development of leaders for the next generation to enhance growth
opportunities to raise individual abilities, and create a work environment where employees can feela work-life balance and a sense of satisfaction.
(3) Technology
Build a foundation for the creation of new technologies by strengthening R&D capabilities, which
are the lifelines of sustainable growth, and actively utilizing open innovation.
(4) Revenue
Work to improve the efficiency and productivity of operations by reviewing work management andprocesses and further developing and utilizing IT infrastructure.
(5) Creating social value
Conduct business activities unique to the Group, including support for life science research throughthe development and practical application of reagents for advanced research, and fulfillment of unmet
medical needs through the development of gene therapy products, based on the corporate philosophy.

16

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

17Under such circumstances, the Group is developing technologies and products on a proprietarybasis or in cooperation with universities and other outside organizations and enterprises. If
competitors commercialize similar products and advance in the fields of technology first, theproduct development and performance of the Group may be affected. In light of this risk, the Group
protects its technology and product developments through intellectual property rights in order toachieve exclusivity or differentiation, and will strive to maintain price competitiveness bypromoting cost reductions and strengthening its manufacturing systems.
(iv) Securing human resources
While the Group is based on R&D, new technological innovation and the emergence of new market
players are having a significant influence on the biotechnology industry. Therefore, to maintain its
competitive edge, the Group considers it essential to secure outstanding human resources withspecialist knowledge and skills. Nevertheless, in the event that the Group may not be able to secure
human resources as planned, or that its personnel may leave the Group, its business strategy andperformance could be affected. In light of these risks, the Group is making efforts to promote
diversity and a healthy work-life balance, while also creating safe and comfortable worksites andworking environments.
(v) Initial payments related to license agreements and sales related to milestone payments
Based on contracts with customers, the Group recognizes upfront payments as revenue at the time
when licensing rights are granted to customers, and recognizes milestone payments as revenue atthe time the conditions prescribed by the agreement are satisfied, which are when performanceobligations are determined to be satisfied. However, due to the complexity of contracts, etc., there
is a risk of error in the timing of revenue recognition, which may affect the Group’s businessperformance. In light of this risk, the Group is working to enhance its internal controls and isconducting checks through its internal auditing department and finance department.
(vi) Sales related to contract services
The Group recognizes sales of contract services as revenue when control is transferred to thecustomer, such as acceptance, receipt or shipment according to the contract, which is when
performance obligations are determined to be satisfied. However, due to the complexity of contracts,
etc., there is a risk of error in the timing of revenue recognition, which may affect the Group’sbusiness performance. In light of this risk, the Group is working to enhance its internal controls andis conducting checks through its internal auditing department and finance department.
(2) Finance and economy(i) Financing
The Group may raise funds to cover rising financing demand for R&D expenditure, capital
expenditure, working funds, etc., to accommodate the Group’s new business launches andexpanding business scale. However, if financing does not proceed as planned, it may affect theGroup’s business strategies and performance. In light of this risk, the Group works to maintain andstrengthen its sound financial position and conducts timely reviews of its financial planning basedon the latest information.
(ii) Exchange rate fluctuation
Expenses, revenue, and trade receivables and payables arising from foreign currency transactions
undertaken by the Group are exposed to currency exchange rate fluctuation risk. In light of this risk,
the Group enters into exchange contracts, carrying out other hedging transactions in order to reduce
the risk of exchange rate fluctuation.
Furthermore, items such as the revenue, expenses and assets of overseas consolidated subsidiaries
are calculated in yen for the preparation of the consolidated financial statements, but fluctuationsin the exchange rate at the end of the fiscal year may affect the Group’s management performance.

18

(3) Finance(i) Impairment
The Group possesses a variety of property, plant and equipment that serve the purposes of its
businesses, and intangible assets such as goodwill associated with corporate acquisitions andtechnology assets. In the event that production equipment is left idle by a sudden change in thebusiness environment, or due to a decline in utilization rates, or owing to the failure of an acquired
business to meet initial projections, or owing to other factors, an impairment loss arises, which may
affect the business performance of the Group. In light of this risk, the Group follows up on acquired
businesses in order to realize post-acquisition synergies and regularly monitors the macroeconomic
environment.
(4) Regulatory and legal procedures, natural disasters and accidents(i) Critical contracts for operation
An outline of the contracts that are considered to be important for the business development of theGroup is described in “II. Overview of business 4. Critical contracts for operation.” If thesecontracts end due to the expiry of the contract term, cancellation, or some other reason, or if
revisions to the agreements are disadvantageous to the Group, it may affect the business strategy
and performance of the Group.
(ii) Intellectual property rights
In the biotechnology-related industry, where the success or failure of R&D is directly linked to thesuccess or failure of business development, the Group protects its technologies with patents in order
to exclude competitors. The Group will continue to place the highest priority on applications forpatents and acquisition of rights when proceeding with R&D activities. However, not all
applications may be successfully registered, and if a registered patent right becomes invalid or
expires, for example, the Group’s business strategies and performance may be affected.
Moreover, the Group intends to acquire promising patent rights held by others, or acquire licenses
for the patent rights, to enable future expansion of its business. However, these strategies may incurlarge expenses. In addition, there is a possibility that the Group may not be able to acquire licenses
for necessary patent rights held by others, and this could affect the Group’s business strategy andperformance.
(iii) Product liability risks
All of the products and merchandise that the Group handles pose an inherent product liability risk.
If any defect is found in a product during its manufacture or sales, or during the clinical trial process;or if a health impairment is caused by any pharmaceutical product, medical devices, in vitro
diagnostics, regenerative medicine products, or research reagents, investigational products used inclinical trials, or specific cell-processed product, then the Group may be subject to product liability
claims, and this may affect the promotion of the Group’s business strategies and performance.
In addition, it is usual practice to conduct a voluntary recall when any problem arises with theseproducts in view of the possible physical effects and damages, and any such recall may requiresignificant time and entail expense.
(iv) Legal regulations
In advancing research and development, the Group is subject to related laws and regulations suchas the Act on the Prevention of Radiation Hazards due to Radioisotopes, etc., and the Act on theConservation and Sustainable Use of Biological Diversity through Regulations on the Use of Living
Modified Organisms (“Cartagena Act”), and the Group is committed to observing these laws andregulations. In addition, in the production, sale, and trade of reagents, etc., the Group is required tofollow relevant legislations, such as the Poisonous and Deleterious Substances Control Act and the
Quarantine Act. However, since reagents are neither pharmaceutical products nor regenerative
medicine products as defined by the Act on Securing Quality, Efficacy and Safety of Products
Including Pharmaceuticals and Medical Devices (hereinafter “Pharmaceuticals and Medical
Devices Act”), said laws and regulations are not applicable. However, if these regulations are19

tightened or new regulations are introduced following expansion, etc., of the supporting researchindustry, it may affect the Group’s business strategies and performance.
Moreover, in vitro diagnostics being developed and sold, and gene therapy products being
developed by the Company are subject to related laws and regulations, including thePharmaceuticals and Medical Devices Act, and approvals or permits from the relevant authorities
are required for commercial activities. Failure to obtain such approvals or permits for individual
projects being researched or under development by the Group may affect the Group’s businessstrategies.
(v) Risks of litigation, etc.
The Group is not a party to any important litigation or claim with third parties related to the Group’sbusiness. However, litigation may be brought against individual Group companies, and the Group’sbusiness strategies and performance may be affected by the litigation itself as well as by its outcome.
In light of this risk, the Group is endeavoring to enhance internal controls and compliance in the
pursuit of its business activities in Japan and overseas.
In addition, the Group conducts patent searches through patent offices, etc., in order to prevent, inits business development, any litigation related to intellectual property rights. The Group is awareof no factual conflict between a product of the Group and a third-party patent. However, it is difficult
for R&D companies such as the Group to entirely avoid intellectual property infringement problems.
If a pertinent infringement issue arises, the Group may be subject to claims to damages, injunctions,or royalty payments, which may affect the Group’s business strategies and performance.
Furthermore, if the Group’s business partners or licensors are involved in disputes, the Group may
no longer be able to sell the relevant products or may itself become involved in litigation. Resolving
such a case can be time consuming and costly, which may affect the Group’s business strategies
and performance.
(vi) Natural disasters and accidents
The Group’s business activities may be impeded due to physical and human damages caused bynatural disasters such as storms, earthquakes, lightning strikes, floods and droughts, by fires or otheraccidents, or by worldwide pandemics of infectious disease. In light of such risks, the Group
conducts inspections and training, and creates communication systems and business continuity
plans (BCP) to minimize damage suffered in such cases.
(vii) Environmental issues such as climate change
In order to comprehensively resolve environmental issues such as climate change, resources andenergy, it is necessary to take corporate action such as the reduction of greenhouse gases (GHG)
and the promotion of energy-saving activities. The Group has established the “Takara Bio Group
Sustainability Management Policy” and is engaged in resolving issues. Meanwhile, if regulations
on greenhouse gas emissions such as a carbon tax and emissions trading systems are introduced inregions where the Group conducts business in future, these may affect the Group’s businessstrategies and performance.
(viii) Extended duration of the influence of the COVID-19 pandemic
The Group expects that the fiscal year ending March 2023 will be impacted by COVID-19. A
continuation of the pandemic for an extended period, with business partners temporarily suspending
operations and with delays in the collection of accounts receivable, may affect the Group’s businessor other performance. In light of this risk, the Group is taking steps to secure sufficient cash on
hand.
In addition, Group employees in some locations may be unable to come to work or face otherdifficulties. In light of this risk, the Group is implementing remote work modes and other work setups that enable social distancing.
(ix) Information security
The Group endeavors to stringently manage confidential information and personal information it
possesses. However, if a problem arises due to a leak of such information, this may affectperformance such as reducing competitiveness or social credibility. Furthermore, a variety of20

defensive measures are taken against cyberattacks, but in the event a problem arises in research anddevelopment, manufacturing or information systems, this may affect the Group’s performance.
(5) The Company’s parent company
As of March 31, 2022, Takara Holdings is the parent company of the Company, owing 60.93% of thevoting rights in the Company. The relationship between the Company and Takara Holdings is as follows.
(i) Position of the Company within the Takara Holdings Group (Takara Holdings and its groupcompanies)
The extraordinary general meeting of shareholders of Takara Shuzo Co., Ltd. (hereafter referred toas “Takara Shuzo,” now Takara Holdings), held on February 15, 2002, approved the establishmentof Takara Shuzo and the Company on April 1 2002 through a corporate split, with each company
becoming a wholly owned subsidiary of Takara Holdings. Since then, Takara Holdings decreased
the ownership of voting shares in Takara Bio to 60.93% through a third-party allotment of newshares by private and public offering.
The Takara Holdings Group consists of Takara Holdings, which is a pure holding company, and its
61 group companies (59 subsidiaries and two affiliates). Within the Group, the Company ispositioned as an operating subsidiary specializing in biotechnology, and conducts biotechnology
business along with the Company’s nine group companies (subsidiaries).
(ii) Management of Group companies by Takara Holdings
Takara Holdings has established and operates the Takara Holdings Group Company Management
Rules from the standpoint of consolidated business management. Its objective is to maintain the
independence and autonomy of Takara Holdings Group companies while seeking to maximize thecorporate value to the entire Takara Holding Group. The Company is also subject to theseregulations and reports to Takara Holdings on matters resolved by its Board of Directors. However,since prior approval for its Board of Director’s resolutions is not required, the Company is left tooperate as an independent business.
Furthermore, Takara Holdings has established various meeting bodies within the Group, and thoserelated to the Company are as follows.
Name of meeting body

Main attendees

Details

Frequency of
meetings(in principle)

Officers and Executive Officersof Takara Holdings Inc.
Directors and Executive Officers
Confirmation of mattersof the Company
Group Strategy Committee Directors and Executive Officers related to the entire
Groupof Takara Shuzo Co., Ltd.
Directors and Executive Officersof Takara Shuzo International
Co., Ltd.

Once every twomonths

Officers of Takara Holdings Inc.
Officers and Executive Officersof the Company

Once every month

Takara Bio Coordination
Committee

Reporting on the state of
the Company’s activities

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

Position in the Company

Position in Takara Holdings

Koichi Nakao

President & CEO

Director

Mutsumi Kimura

Director

Representative Director and President

The above concurrent positions each arose because Koichi Nakao was appointed by Takara
Holdings due to a consolidated management approach in that company’s holding company system,
and Mutsumi Kimura was appointed by the Company based on the determination that he would be
able to strengthen the Company’s corporate functions and realize sustained growth of the Company
21and enhancement of medium-term corporate value because he had extensive experience in areas
such as the Company’s corporate planning, finance, accounting, public relations, general affairs andpersonnel in the past, and had exhibited leadership as the Company’s Representative Director andVice President. Takara Holdings does not intend to control the Company through such concurrent
positions.
A change in the Group management strategy of Takara Holdings could affect the business andperformance of the Group.
(iii) Transactions with the Takara Holdings Group
1) Real estate lease transactions related to sales sites
Real estate lease transactions exist with Takara Shuzo in Takara Holdings Group. The sales sites
leased by the Company among the relevant lease transactions are as follows, and in the eventof difficulties in the renewal of these transactions, Group revenue could be temporarily affected
and relocation expenses incurred until the Company is able to secure an alternative site.
Property

Purpose of use

6th floor andground floor of
The Company’s
Takara Meiji
Tokyo Branch
Yasuda Building(Chuo-ku, Tokyo)

Transaction amountFiscal year ended
March 31, 2022
(Millions of yen)

LessorTakara ShuzoCo., Ltd.

13

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

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

2) Transactions related to use of trademark rights
The Group has concluded trademark licensing agreements with Takara Holdings with regard to
the trademarks it uses which are owned and controlled by Takara Holdings, and makes
trademark usage payments per trademark. As of March 31, 2022, the Group has licenses for theuse of 64 registered trademarks and a pending trademark in Japan and overseas.
In the event that the Group is unable to obtain licenses for the use of trademarks from Takara
Holdings, it might affect the Group’s business strategies and performance.

Company name
(Location)

Takara Holdings
Inc.
(Shimogyo-ku,
Kyoto City)

Transaction details

Transaction
amountFiscal year
ended March
31, 2022(Millions ofyen)

Licensing oftrademark rights

6

Transaction conditions, etc.

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

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

Transaction details

Takara Holdings
Inc.
(Shimogyo-ku,
Kyoto City)

Outsourcing ofcomputer-related
services, leasing ofequipment, etc.

Transaction
amountFiscal year
ended March
31, 2022(Millions of
yen)

464

Transaction conditions, etc.

Agreement format: Basic agreement on
outsourcing of services and leasing of equipment
Details of services: Accounting system operational
support, client-server system operational support,
leasing of personal computers, purchasing of
consumables, other4) Other
The Group purchases packaging materials from Takara Holdings Group companies (excluding
Takara Bio Group companies).
In the event of difficulties in the continuity of these transactions, it may affect the Group’sbusiness strategies and performance.
3. Management analysis of financial position, operating results and cash flows(1) Overview of operating results, etc.
The Group’s financial position, operating results and cash flows (hereinafter “operating results, etc.”)
for the fiscal year ended March 31, 2022 were as follows.
(i) Overview of operating results
The outlook for the global economy in the fiscal year under review is uncertain due to the impact of
the new coronavirus disease (COVID-19), the prolonged trade friction between the U.S. and China,
and Russia’s invasion of Ukraine.
Under these circumstances, the Group has promoted initiatives to advance the building of fundamental
biologics development platform technologies and become a biologics development company that
continuously creates new modalities through the “Reagents and Instruments business” and the“CDMO business” under the six-year Long-Term Management Plan 2026, which ends in fiscal 2026,
and the three-year Medium-Term Management Plan 2023, which ends in fiscal 2023. In addition, theGroup worked aggressively to ensure a stable supply of PCR test-related products for the newcoronavirus and to establish a manufacturing system for regenerative medicine products, including
vaccines.
In the fiscal year under review, although sales of instruments and gene therapy decreased year on year,
sales of reagents and CDMO increased year on year. In particular, sales of reagents for general research
recovered from the COVID-19 crisis, resulting in record-high sales, and PCR testing-related reagentsfor the new coronavirus also recorded substantial growth. Net sales increased to ¥67,699 million (up46.9% year on year), and the cost of sales ratio improved. As a result, the cost of sales increased to¥18,488 million (up 30.1 % year on year), resulting in a gross profit of ¥49,211 million (up 54.4%
year on year). Selling, general and administrative (SG&A) expenses were ¥20,309 million (up 13.3%
year on year), mainly due to an increase in personnel expenses and research and development expenses.
Operating profit was ¥28,902 million (up 107.1 % year on year).
As a result of the increase in operating profit, ordinary profit increased to ¥28,459 million (up 101.0%
year on year), profit before income taxes increased to ¥27,532 million (up 103.1 % year on year), andprofit attributable to owners of parent increased to ¥19,849 million (up 107.9% year on year).
Information by segment has been omitted because the Group is a single segment.

23

(ii) Overview of financial position
Total assets at the end of the fiscal year under review were ¥115,712 million, an increase of ¥25,962
million from the end of the previous fiscal year. This was mainly due to an increase of ¥13,999 million
in merchandise and finished goods and an increase of ¥5,218 million in trade receivables, and anincrease of ¥6,629 million in property, plant and equipment, mainly due to interior finish work for a
new office building in Takara Bio USA, Inc. and our manufacturing facilities acquisitions.
Total liabilities at the end of the fiscal year under review were ¥19,647 million, an increase of ¥4,199
million from the end of the previous fiscal year. This was mainly due to increase of ¥2,352 million inincome taxes payable and ¥1,531 million in accounts payable - other.
Total net assets at the end of the fiscal year under review were ¥96,064 million, an increase of ¥21,762
million from the end of the previous fiscal year. This was mainly due to increases of ¥17,923 million
in retained earnings and ¥3,737 million in foreign currency translation adjustment due to the yen’s
depreciation.
(iii) Cash flows
Net cash provided by operating activities amounted to ¥6,985 million, a decrease of ¥6,958 million
from the previous fiscal year. This was mainly due to cash inflow from profit before income taxes of¥27,532 million and depreciation of ¥3,554 million, and cash outflow from an increase in inventoriesof ¥14,233 million, income taxes paid of ¥5,922 million, and an increase in trade receivables of ¥4,812
million.
Net cash used in investing activities was ¥7,071 million, an increase of ¥3,292 million from theprevious fiscal year. This was mainly due to proceeds from withdrawal of time deposits of ¥12,877
million, purchase of property, plant and equipment and intangible assets of ¥12,403 million, payments
into time deposits of ¥11,406 million, and subsidies received of ¥3,960 million.
Net cash used in financing activities amounted to ¥2,070 million, an increase of ¥966 million from theprevious fiscal year, mainly due to cash dividends paid of ¥1,923 million.
As a result of the above, the balance of cash and cash equivalents at the end of the fiscal year underreview, including the effect of exchange rate changes on cash and cash equivalents, decreased by¥1,148 million from the end of the previous fiscal year to ¥22,160 million.
(iv) Status of production, purchasing, orders received and sales
1) Production performance
Production performance by category for the fiscal year under review is as shown below.
Category

Amount (Millions of yen)

Reagents

22,12329.1

57(72.9)

Instruments
CDMO

11,95244.8

148(44.7)

34,281

32.5

Gene therapy
Total

Year-on-year change (%)

Note: Amounts are based on sales prices.

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

Amount (Millions of yen)

Year-on-year change (%)

Reagents

19,051

Instruments

1,248(24.5)

20,300

274.6

Total

405.9

Notes: 1. Amounts are based on purchase prices.
2. In the fiscal year under review, there was significant fluctuation in purchase performance. This was due to anincrease in the import, etc. of antigen test kits in the reagents category.

243) Performance of orders received
Although the Group performs some made-to-order production due to being contracted in the
Bioindustry business, this information has been omitted because the time required for production isshort in most cases, and the order backlog is negligible.
4) Sales performance
Sales performance by category for the fiscal year under review is as shown below.
Category

Amount (Millions of yen)

Reagents

Year-on-year change (%)

54,60555.2

Instruments

1,518(12.1)

CDMO

11,42628.4

148(44.5)

67,69946.9

Gene therapy
Total
Note: Information excludes internal sales between categories.

(2) Details of analysis and considerations regarding the status of operating results etc., from management’s
perspective
The details of recognition as well as analysis and considerations regarding the status of operating results
etc. of the Group, from management’s perspective are as follows.
Please note that matters concerning the future in this article were determined as of the end of the fiscal
year under review.
(i) Significant accounting estimates and assumptions used in such estimates
Of the accounting estimates used in the preparation of the consolidated financial statements and theassumptions used in such estimates, significant items are described in “V. Financial information, 1.
Consolidated financial statements, etc., (1) Consolidated financial statements, Notes to consolidated
financial statements (Other significant matters for preparing financial statements),” “V. Financial
information, 1. Consolidated financial statements, etc., (1) Consolidated financial statements, Notes
to consolidated financial statements (Significant accounting estimates)” and “V. Financial information,
1. Consolidated financial statements, etc., (1) Consolidated financial statements, Notes to consolidated
financial statements (Additional information).”(ii) Awareness and details of analysis and considerations regarding the status of operating results, etc. in
the fiscal year under review
1) Operating results, etc. in the fiscal year under review
The Group’s operating results, etc. in the fiscal year under review were as follows with both sales
and profit increasing. Net sales were ¥67,699 million (up 46.9% year on year), operating profit was¥28,902 million (up 107.1% year on year), ordinary profit was ¥28,459 million (up 101.0% year onyear) and profit attributable to owners of parent was ¥19,849 million (up 107.9% year on year). Bothnet sales and income at each level reached record highs, and operating profit and ordinary profit
increased for the 13th consecutive year.
For an overview of operating results, etc., please refer to “II. Overview of business 3. Management
analysis of financial position, operating results and cash flows (1) Overview of operating results, etc.”
2) Factors that have a significant impact on operating results
Factors that may have a significant impact on the Group’s operating results are described in “II.
Overview of business 2. Business risks.”3) Capital resources and liquidity of funds
As an R&D-oriented company, the Group actively invests in R&D and also plans to make strategic
investments (capital investment, M&A investment, etc.) for sustainable growth in the future asnecessary, and we therefore believe it is necessary to enhance internal reserves and secure sufficientliquidity on hand to meet these capital needs.
25

The balance of cash and cash equivalents at the end of the current fiscal year was ¥22,160 million,
and the Company believes that it has maintained sufficient liquidity on hand.
The Group believes that its current sufficient liquidity on hand and cash flow generation fromoperating activities will enable it to meet future capital needs while maintaining financial soundness.
4) Objective indicators for judging the achievement of management policies, strategies, and targets
Objective indicators for judging the achievement of management policies, strategies, and targets are
as described in “II. Overview of business 1. Management policy, management environment, issues
to address, etc. (3) Objective indicators for judging the achievement of management targets.”
4. Important contracts for operation
The following is a summary of contracts that are considered important for the Group’s business operation.
(1) Technology licensing agreement, etc.
Name of contracting
company

Takara Bio Inc. (the Company)

Name of counterparty

Otsuka Pharmaceutical Co., Ltd.

Name of agreement

NY-ESO-1 siTCR joint development and marketing agreement

Date of agreement

April 9, 2018

Term of agreement

From April 9, 2018 until the point of termination of sales, unless terminated for reasonsspecified in the agreement

Main contractual terms

The Company and Otsuka Pharmaceutical Co., Ltd. will cooperate in the development of genetherapy products using NY-ESO-1 siTCR™ (TBI-1301 and TBI-1301-A, below, “theproducts”) in Japan. The Company grants Otsuka Pharmaceutical exclusive rights to market the
products in Japan for all indications and preferential negotiating rights in nine Asian countries.
In addition to the upfront payment, the Company will receive an upfront payment based on
development progress, as well as a fixed running royalty linked to sales once the product islaunched and an upfront payment based on sales targets achieved. In addition, the Company
will manufacture and supply to Otsuka Pharmaceutical products for clinical trials andcommercial use for a fee.

(2) Termination of contracts
The following contracts were terminated during the current fiscal year.
HF10* development and marketing agreement
On December 15, 2016, the Company entered into an agreement with Otsuka Pharmaceutical Co., Ltd.
to cooperate in the development of a gene therapy product using the oncolytic virus HF10* in Japanand to grant exclusive marketing rights, but based on the results of clinical trials, the two companies
discussed future policy and, considering the time required for development and other factors, decided
to terminate the agreement at the Board of Directors’ meeting held on November 9, 2021.
*Name at the time of the agreement, generic name canerpaturev (abbreviated name C-REV)
CD19CAR joint development and marketing agreement
On April 9, 2018, the Company entered into an agreement with Otsuka Pharmaceutical Co., Ltd. tocooperate in the development of a gene therapy product using CD19・CAR in Japan and to grant
exclusive marketing rights and preferential negotiating rights in nine Asian countries. However, in lightof the prolonged clinical trial period and the approval status of competing products, the Board of
Directors resolved to terminate this agreement on November 9, 2021 and, upon agreement with the
Otsuka Pharmaceutical, the agreement was terminated on the same date.
5. Research and development activities(1) Research activities
Research and development expenses for the entire Group during the current fiscal year totaled ¥6,109
million, and the details of research and other activities in each business segment are as follows.

26

(i) Bioindustry
This business conducts R&D of reagents for genetic engineering research, including reagents related
to gene amplification methods, for which we have the largest market share in Japan, as well as R&Dof new products for research fields such as genetic analysis, gene function analysis, and genetic testing,stem cells including iPS cells, and regenerative and cell medicine, as well as and new technologies
related to CDMO. In response to the coronavirus pandemic, the Company is also developing PCRrelated products for the detection of the new coronaviruses.
In the current fiscal year, we developed reagents for genetic testing for variants of new coronavirus,
reagents for new coronavirus gene detection using sewage samples, and vaccine-related technologies.
In addition, we also developed high-function PCR enzymes and reagents for the production of viral
vectors for research use in anticipation of clinical applications.
(ii) Gene therapy
In this business, we are engaged in the clinical development of gene-modified T-cell therapy using our
proprietary technologies, such as the highly efficient gene transfer technology RetroNectin method,
the highly efficient lymphocyte proliferation technology RetroNectin expansion culture method, andsiTCR™ technology, as well as the development of new basic technologies and the creation of clinicalprojects.
In the current fiscal year, we worked on the development of next-generation CAR gene therapy tosolve the problems of existing CAR gene therapy, and as a new clinical project, we made preparations
for the start of clinical trials in Canada for CD19-JAK/STAT-CAR gene therapy (code: TBI-2001). For
other projects out-licensed to partner companies, we worked closely with them to prepare forregulatory filings and establish manufacturing and supply systems in preparation for market launch. ** Of the three out-licensed projects, development was halted on two projects, oncolytic virus
canerpaturev (C-REV, code TBI-1401) and CD19-CAR gene therapy (code TBI-1501), in
November 2021, after reaching agreements with the out-licensing partners. The development of
NY-ESO-1・siTCR™ gene therapy (code TBI-1301) continues to be jointly developed withpartners.
We are also pursuing cross-business R&D that cannot be categorized into the above two businesses.
The Group aims to perform strategic R&D by taking advantage of the interaction and feedback effectsof each R&D project.
(2) Intellectual property rights
In the biotechnology-related industry, where the success or failure of R&D is directly linked to thesuccess or failure of business development, the Group protects its technologies with patents in order to
exclude competitors. In addition, in conducting R&D, our first priority is to apply for and obtain patentrights, and we also intend to acquire or license patents from other parties as necessary. The following
are patents related to the RetroNectin expansion culture method, siTCR™, and JAK/STAT, CAR, which
are particularly important in each of our businesses.
(i) RetroNectin expansion culture method
Title of the invention: Method for producing cytotoxic lymphocytes

Note:

Patent holder

Patent No.

Registration date

Country of application

The Company

4406566

November 13, 2009Japan

The Company

1496109

December 8, 2010

Europe (6 countries) (Note)

The Company

8728811

May 20, 2014U.S.

The Company

8975070

March 10, 2015U.S.

The Company

2479288

February 24, 2015

CanadaThe Company

ZL03811464.X

February 24, 2010

China

The Company

786054

December 10, 2007

South Korea

The Company

I334442

December 11, 2010

TaiwanThe Company
1079543
September 17, 2010
Hong Kong
The six European countries are Germany, Spain, France, the United Kingdom, Italy, and the Netherlands.

27

(ii) siTCR™
Title of invention: Method for specific gene expression

Note:

Patent holder

Patent No.

Registration date

Country of application

The Company/
Mie University

5271901

May 17, 2013Japan

The Company/
Mie University

5828861

October 30, 2015

Japan

The Company/
Mie University

2172547

January 6, 2016

Europe (5 countries) (Note)

The Company/
Mie University

3031916

June 7, 2017

Europe (5 countries) (Note)

The Company/
Mie University

9051391

June 9, 2015U.S.

The Company/
Mie University

9296807

March 29, 2016U.S.

The Company/
Mie University

ZL200880102998.9

June 19, 2013

China

The Company/
Mie University

1363928

February 11, 2014

South Korea

The Company/
1225068
July 13, 2018
Hong Kong
Mie University
The five European countries are Germany, France, the United Kingdom, Italy, and Sweden.

(iii) JAK/STAT, CAR
Title of invention: Chimeric antigen receptor
Patent holder

Patent No.

Registration date

Country of application

The Company/
University Health Network

6846352

March 3, 2021

Japan

The Company/
University Health Network

3256496

December 30, 2020

Europe (8 countries) (Note)

The Company/
University Health Network

10336810

July 2, 2019U.S.

The Company/
10822392
November 3, 2020
U.S.
University Health Network
Note:
The eight European countries are Germany, France, the United Kingdom, Italy, Sweden, the Netherlands,
Switzerland, and Spain.

28

III. Information about facilities
1. Overview of capital investments, etc.
Capital investments during the current fiscal year was made to increase and maintain production capacity
and R&D facilities in the Bioindustry and Gene Therapy businesses, totaling ¥13,180 million, including
those recorded under intangible assets and construction in progress.
Major capital investments included ¥3,074 million for emergency maintenance of vaccine production
system of the reporting company and ¥3,527 million for interior construction of a building for a new
office of overseas subsidiary, Takara Bio USA, Inc. The amount of capital investments includes ¥3,536
million of tax purpose reduction entry for national subsidies, etc.
2. Major facilities(1) Reporting company
As of March 31, 2022
Carrying amount (Millions of yen)
Name of office(Location)

Facilities

Head office (Kusatsu
City, Shiga Prefecture)

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

Administrative
Kusatsu Office (Kusatsu
facilities, other
City, Shiga Prefecture)facilities

Buildings
andstructures

Machinery,
Tools,
equipmentLandfurniture
and(Area (m2))
and fixtures
vehiclesLeasedassets

Total

Number of
employees

9,207

2,216

3,036

3,352
(46,886)631

18,444

638

216

0

106

2,159
(14,881)

–

2,482

–

(2) Overseas subsidiaries
As of March 31, 2022
Carrying amount (Millions of yen)
MachinTools,
Buildings
ery,furnitureandequipment
andstructuresandfixturesvehiclesCompany nameName ofoffice(Location)

Facilities

Takara Bio USA, Inc.

Head office,etc. (SanJose, U.S.,
etc.)

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

6,622

255

419

2,687
(30,756)

Takara Biotechnology(Dalian) Co., Ltd.

Head office(Dalian,
Liaoning
Province,
China)

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

560

762

180

[–]
–
[39,909]
–

Land
(Area
(m2))

Total

Number of
employees

–

9,985

204

203

1,706

527

Other

Notes: 1. The figures in [ ] in the “Land” column indicate the leased area and annual lease amount.
2. “Other” in the carrying amount represents right-of-use assets.
3. The carrying amount is the amount after impairment losses.

29

3. Planned additions, retirements, etc. of facilities(1) Planned additions, etc. of important facilities
Not applicable.
(2) Planned retirement, etc. of important facilities
Not applicable.

30

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

Total number of authorized shares (shares)

Common shares

400,000,000
Total

400,000,000(ii) Issued shares
Number issued shares as of theend of the fiscal year (shares)(March 31, 2022)

Class

Number of shares issued andoutstanding as of the date ofsubmission (shares)(June 29, 2022)

Name of listed financial
instruments exchange orregistered and authorized
financial instruments
business association
Tokyo Stock Exchange, Inc.

Commonshares120,415,600

Total

120,415,600

First Section (as of the endof the fiscal year)

120,415,600

Prime Market (as of the dateof submission)
120,415,600–

Details

Number ofshares per
share unit
100 shares–(2) Status of share acquisition rights(i) Details of stock option plan
Not applicable.
(ii) Details of rights plan
Not applicable.
(iii) Status of other share acquisition rights
Not applicable.
(3) Status of exercise of bonds with share acquisition rights with exercise price revision clause, etc.
Not applicable.
(4) Changes in total number of shares issued, issued capital, etc.

Date

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

Increase(decrease) in
total number ofshares issued(Shares)
840,000

Balance of total
Increase
number of(decrease) inshares issued
issued capital(Millions of yen)
(Shares)
120,415,600

Balance ofissued capital(Millions ofyen)

Increase(decrease) inlegal capitalsurplus(Millions ofyen)

Balance of legal
capital surplus(Millions ofyen)

14,965210

32,893210

Note: The above amounts are due to the exercise of share subscription rights.

31

(5) Shareholding by shareholder category
As of March 31, 2022
Shareholding status (Number of shares per share unit: 100 shares)
Category

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

Publicsector

Total

Shares lessthan oneunit(Shares)Number ofshareholders

–

27

56

193

225

46

40,03340,580–

Number ofshares held
(Units)–131,697

17,228737,026

115,851

191

201,834

1,203,827

32,900Shareholding
ratio (%)

–

10.94

1.43

61.22

9.62

0.02

16.77

100.00–32

(6) Major shareholders
As of March 31, 2022
Number of shares
held (hundreds ofshares)Ratio of shares held
to total number ofshares issued(excluding treasury
shares) (%)

20 Naginataboko-cho, Shijo-doriKarasuma Higashi-iru, Shimogyo-ku,
Kyoto City

733,500

60.91

The Master Trust Bank of Japan, Ltd. 2-11-3 Hamamatsu-cho, Minato-ku,(Trust Account)Tokyo

73,206

6.08

Custody Bank of Japan, Ltd. (Trust
Account)

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

33,115

2.75

THE BANK OF NEW YORKMELLON SA/NV 10(Standing proxy: Transaction
Services Division, MUFG Bank,Ltd.)

RUE MONTOYERSTRAAT 46,
1000 BRUSSELS, BELGIUM(2-7-1 Marunouchi, Chiyoda-ku,
Tokyo)

11,0000.91

STATE STREET BANK WEST
CLIENT-TREATY 505234(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

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

6,617

0.55

JP MORGAN CHASE BANK
385781(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

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

6,024

0.50

J.P. MORGAN BANKLUXEMBOURG S.A. 384513(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)EUROPEAN BANK AND
BUSINESS CENTER 6, ROUTE DETREVES, L-2633
SENNINGERBERG,LUXEMBOURG(2-15-1 Konan, Minato-ku, Tokyo)

5,337

0.44

STATE STREET BANK AND
TRUST COMPANY 505001(Standing proxy: Settlement &Clearing Services Department,
Mizuho Bank, Ltd.)

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

5,018

0.42

The Bank of Kyoto, Ltd.

700 Yakushimae-cho, Matsubaraagaru, Karasuma-dori, Shimogyo-ku,
Kyoto

5,000

0.42

The Dai-ichi Life Insurance
Company, Limited

1-13-1 Yurakucho, Chiyoda-ku,
Tokyo

4,822

0.40

883,640

73.38

Name

Takara Holdings Inc.

Total
Note:

Address–

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

33

(7) Status of voting rights(i) Issued shares
As of March 31, 2022
Category

Number of shares

Non-voting shares
Shares with restricted voting rights(treasury shares, etc.)
Shares with restricted voting rights(other)Shares with full voting rights(treasury shares, etc.)
Shares with full voting rights(other)Shares less than one unit

Number of voting rights

Details

–

–

–

–

–

–

–

–

–

–

–

–
1,203,827

Common shares

120,382,700

Common shares

32,900–120,415,600–

Total number of shares issued
Voting rights of all shareholders––
1,203,827–––(ii) Treasury shares, etc.
As of March 31, 2022
Name or title ofowner

Address of owner

–
Total

–
–

Proprietary
ownership
Number ofshares––Number ofshares held in
the name ofothers––Total number ofshares held––

Ratio of shares
held to total
number of sharesissued (%)––

2. Status of acquisition of treasury shares, etc.
[Class of shares, etc.] Not applicable(1) Status of acquisition by resolution of the General Meeting of Shareholders
Not applicable.
(2) Status of acquisition by resolution of the Board of Directors
Not applicable.
(3) Acquisition of shares not based on resolutions of the General Meeting of Shareholders or the Board of
Directors
Not applicable.
(4) Status of disposal and holding of acquired treasury shares
Not applicable.
3. Dividend policy
The Company views profit returns to shareholders as one of its important management issues, and as abasic policy, returns are provided after comprehensive consideration of a range of factors that include
business performance, financial position, and enhancement of internal reserve for aggressive researchand development activities in bioindustry and gene therapy businesses. Specifically, on May 12, 2022,
the Board of Directors resolved to change the policy of paying dividends of surplus that amount toapproximately 20% of estimated profit calculated without taking into account extraordinary income andlosses in the consolidated financial statements, to pay approximately the upper 30% range of estimated34

profit calculated without taking into account extraordinary income and losses in the consolidated
financial statements, starting from the next fiscal year.
The Company’s policy is to pay dividends of surplus twice a year in the form of interim dividends andyear-end dividends. The decision-making bodies for these dividends are the General Meeting of
Shareholders for year-end dividends and the Board of Directors for interim dividends. The Company’s
Articles of Incorporation stipulate that interim dividends may be paid by a resolution of the Board of
Directors with a record date of September 30 of each year.
For the current fiscal year, the Company has decided to pay a dividend of ¥33 per share in accordancewith the existing policy.
Dividends of surplus for the current fiscal year were as follows.
Resolution date

Total amount ofdividends(Millions of yen)

Dividends per share
(Yen)

3,973

33.00

Resolution at the Annual General Meeting of
Shareholders held on June 24, 2022

Internal reserves will be effectively used to strengthen the Company’s financial position and to invest in
R&D and capital expenditures of the Group companies for future development.
4. Status of corporate governance, etc.
(1) Overview of corporate governance(i) Basic policy regarding corporate governance
Based on our corporate philosophy of “Contributing to the health of humankind through thedevelopment of revolutionary biotechnologies such as gene therapy,” the Group aims to be a biologics
development company that continuously creates new modalities by building biologics development
platform technologies through its core businesses of the “Reagents and Instruments business” and“CDMO business”. We will continue to create new value through proactive business activities, achievesustainable growth, and contribute to society. To this end, it is necessary to strengthen our corporate
governance system in order to promote honest and fair corporate activities at all times, and we will
work to ensure management transparency, improve efficiency, and make decisions quickly.
(ii) Summary of corporate governance system and reasons for adopting the system
1) Summary of the system of corporate governance
The Company has adopted a corporate auditor system, and in addition to the General Meeting of
Shareholders and the Board of Directors, the Company has an Audit & Supervisory Board and an
Accounting Auditor as its corporate bodies. In addition, the Company has established the Nomination
and Compensation Committee and the Special Committee on a voluntary basis as advisory bodies tothe Board of Directors.
As of the date of submission of the Annual Securities Report, the Board of Directors consists of nine
members, including three external Directors. In addition to regular monthly Board of Directors
meetings, extraordinary Board of Directors meetings are held as necessary to make decisions on basic
management policies, matters stipulated by law, and important management matters, as well as tosupervise the execution of duties by Directors.
In addition, by introducing an executive officer system, the Company aims to separate themanagement oversight function of the Board of Directors from the business execution function of
the Executive Officers (nine Executive Officers excluding those concurrently serving as Directors asof the date of submission of the Annual Securities Report), and Executive Officers also attend theBoard of Directors meetings as observers to report on the status of execution of duties, thereby
strengthening the management’s ability to make prompt decisions.
The Audit & Supervisory Board consists of five members, including three external Audit &Supervisory Board Members. In accordance with the audit policy and audit plan formulated by the35

Audit & Supervisory Board, the Audit & Supervisory Board Members attend meetings of the Boardof Directors and other important meetings, receive business reports from Directors and others, inspect
important documents, and investigate the status of operations and assets in order to audit theexecution of duties by Directors.
The Company has entered into an audit contract with Deloitte Touche Tohmatsu LLC and undergoes
audits under the Companies Act and the Financial Instruments and Exchange Act. In addition, theCompany receives advice from attorneys on corporate management and daily operations as necessary.
[Schematic diagram of the Company’s corporate governance and internal control system]
General Meeting of Shareholders
Appointment
and dismissal

Appointment
and dismissal
ReportReportBoard of Directors

Accounting Auditor
Audit & Supervisory
Board

Audit

Selectionanddismissal

Audit

Supervision

Appointment
and dismissal

Consultation

Cooperation

Audit
ReportNomination andCompensation
Committee

Advice andrecommendations
Appointment
and dismissal

Consultation
Advice andrecommendations

Special Committee

Cooperation

President and CEO
Instructions

ReportReportReportExecutive Officer

Compliance Committee

Instructions

ReportCooperation

Education

Instructions

Internal Audit Department
Audit

Divisions and Group companies
2) Reasons for adoption of the corporate governance system
The Company is a company with an Audit & Supervisory Board. As a research and developmentoriented company with strong expertise, the Directors who are familiar with our business makedecisions flexibly and supervise business execution with a clear sense of ownership and speed, andhighly independent external Directors who have experience and knowledge of our business also workwith the Audit & Supervisory Board to supervise business execution, and we believe that the current
system is optimal for the Company.

36

(iii) Other matters regarding corporate governance1) Status of internal control system, risk management, and systems to ensure appropriateness ofoperations of subsidiaries
In accordance with Article 362, paragraph 5 of the Companies Act, the Company has adopted aresolution at a meeting of the Board of Directors to establish a system to ensure the appropriatenessof business operations, and based on this resolution, the Company has established the following
systems.
a) System to ensure that the execution of duties by Directors and employees complies with laws andregulations and the Articles of Incorporation, and system to ensure the appropriateness ofoperations of the corporate group consisting of the Company and its parent company andsubsidiaries
i)

The Takara Bio Compliance Committee, chaired by the President & CEO, shall be establishedand operated as an organization that oversees the compliance activities of the entire Takara Bio
Group.

ii)

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

iii) The Company will take a firm stand against antisocial forces by complying with theseguidelines, and shall not have any relationship with such forces.
iv) The Takara Group Helpline has been established and operated within the General Affairs
Department of Takara Holdings, Inc. and by a third-party organization outside Takara Holdings,
Inc. to serve as a contact point for reporting when an officer or employee discovers a legal
violation or misconduct in the course of Group operations that is impossible or difficult toresolve or prevent through ordinary means and methods in the course of business operations.
The Company prohibits the disadvantageous treatment of whistleblowers for the reason of theirreporting and makes this known to the entire Group.
v)

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

vi) The Group shall establish, evaluate, and improve company-wide systems to ensure thereliability of financial reporting in compliance with relevant laws and regulations and thelisting rules stipulated by the Tokyo Stock Exchange, and will continue to enhance thesesystems.
vii) With respect to the relationship between the Company and its parent company, Takara
Holdings, Inc., the Company is subject to the Group Company Management Rules establishedby Takara Holdings from the perspective of consolidated business management as a holding
company and operated for the purpose of maximizing the corporate value of the entire Group
while maintaining the uniqueness and independence of each Group company including theCompany, and reports regularly to Takara Holdings on matters resolved at the Board of
Directors of the Company and the status of business activities of the Company and its
subsidiaries.
viii) With respect to the relationship between the Company and its subsidiaries, while maintaining
the uniqueness and independence of each subsidiary, the Company shall receive regular reports
on business activities, and, in principle, hold prior discussions on important matters. In
addition, the Company’s Audit & Supervisory Board Members and the department in chargeof internal audits shall cooperate with each other to conduct regular on-site inspections of37

subsidiaries and conduct audits from the perspective of ensuring appropriate businessexecution.
b) System for storing and managing information on the execution of duties by the Directors
The Company shall establish internal rules concerning guidelines for the preparation, retention
period, and management system (including information security system) of records of theexecution of duties, such as minutes of General Meetings of Shareholders, minutes of Board of
Directors meetings, approval documents (including those approved by the President), and otherapproval documents, so that the execution of duties by Directors and employees can beappropriately confirmed after the fact.
c) Regulations and other systems for managing the risk of lossi) The Takara Bio Compliance Committee oversees the overall risk management of the Group,
and under the supervision of the committee, each responsible department shall engage inactivities to prevent and mitigate risks in legal and social ethics, product and merchandise safety
and quality, health and safety, and other risks surrounding the Group.
ii) In the event of an emergency situation, an emergency task force consisting of Executive
Officers, headed by the President, shall be established as necessary to deal with the situation inaccordance with the business continuity plan.
d) System to ensure the efficient execution of duties by Directorsi) As the basis of the system to ensure the efficient execution of duties by Directors, the Board of
Directors shall hold a regular meeting once a month, and extraordinary meetings as necessary.
ii)

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

iii) Under the supervision and guidance of the Board of Directors or each Director, each responsible
department or, if necessary, a cross-divisional project team shall be organized to continuously
work on streamlining, speeding up, and computerizing operations to ensure efficientmanagement.
iv) Internal audits shall be conducted from the perspective of efficiency, and necessary measures
shall be taken based on the results of such internal audits to ensure efficiency in the executionof duties.
v) The Company’s subsidiaries shall also establish a management system similar to that of theCompany.
e) Matters related to employees who are requested by Audit & Supervisory Board Members to assist
them in the execution of their duties, and matters related to the independence of such employees
from Directors
In the event that the Audit & Supervisory Board Members require the establishment of employees
to assist them in their duties, the Company shall establish a system to ensure the independence ofsuch employees from Directors with respect to the chain of command, position and treatment ofsuch employees, etc., and assign such employees to assist the Audit & Supervisory Board
Members.
f) System for reporting by Directors and employees to Audit & Supervisory Board Members andother systems to ensure that audits by Audit & Supervisory Board Members are conductedeffectivelyi) In order to gain an understanding on the process of important decision-making and the statusof business execution, Audit & Supervisory Board Members have the authority to attend
meetings of the Board of Directors and other important meetings, inspect the minutes of Boardof Directors meetings, approval documents (including those approved by the President) andother important documents related to business execution, and request explanations from
Directors and employees as necessary. In addition, in order to conduct effective and efficient38

audits, the department in charge of internal audits shall maintain close cooperation with the
Audit & Supervisory Board Members.
ii) If a Director discovers a fact that may cause significant damage to the Company, he or she shallreport it to the Audit & Supervisory Board Members in accordance with laws and regulations.
When a Director of a subsidiary of the Company discovers a fact that may cause significant
damage to the subsidiary, he or she shall report it to the Company’s Audit & Supervisory Board
Members through the department in charge of managing the subsidiary.
iii) The Directors and Audit & Supervisory Board Members of the Company shall ensure that no
person who makes such a report shall be treated disadvantageously by reason of such a report.
g) Matters regarding the policy for handling expenses or liabilities incurred for executing duties by
Audit & Supervisory Board Members
When an Audit & Supervisory Board Member requests advance payment or reimbursement ofexpenses incurred in the performance of his or her duties, the Company shall promptly dispose ofsuch expenses or liabilities, unless such expenses or liabilities are deemed not necessary for the
performance of the Audit & Supervisory Board Member’s duties.
2) Overview of limited liability agreements
Pursuant to the provisions of Article 427, paragraph 1 of the Companies Act, the Company stipulates
in its Articles of Incorporation that the liability for damages stipulated in Article 423, paragraph 1 of
the Companies Act may be limited. Based on these provisions, three external Directors, Nobuko
Kawashima, Kazuko Kimura, and Noriomi Matsumura, and three external Audit & Supervisory
Board Members, Kunihiko Kamada, Yasuo Himeiwa, and Masaaki Makikawa, have entered into such
limited liability agreement with the Company.
Pursuant to this agreement, the defined maximum amount of liability for damages is the minimum
liability amount provided for under Article 425, paragraph 1 of the same Act.
3) Overview of a directors and officers liability insurance policy
The Company has entered into a directors and officers liability insurance policy with an insurancecompany as stipulated in Article 430-3, paragraph 1 of the Companies Act, which covers damages
and litigation expenses incurred by the insured due to claims for damages arising from the insured’s
actions as a Director or officer.
Directors, Audit & Supervisory Board Members, and Executive Officers of the Company are insured
under the insurance policy, and the Company bears the total amount of premiums for all insureds.
4) Number of Directors and resolution requirements for election of Directors
The Company’s Articles of Incorporation stipulate that the Company shall have no more than ten
Directors. The Company states in it Articles of Incorporation that, pursuant to Article 341 of theCompanies Act, resolutions for the election of Directors shall be adopted by a majority of the votesof shareholders present at a General Meeting of Shareholders where shareholders holding one-thirdor more of the voting rights of shareholders entitled to exercise their voting rights are present. The
Company also states in its Articles of Incorporation that cumulative voting shall not be used for theelection of Directors.
5) Matters normally requiring adoption of a resolution by the General Meeting of Shareholders, which
may be decided by the Board of Directors
i)

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

ii) Exemption of Directors and Audit & Supervisory Board Members from liability
Pursuant to Article 426, paragraph 1 of the Companies Act, the Company’s Articles ofIncorporation stipulate that the Company may, by resolution of the Board of Directors, exempt
39Directors and Audit & Supervisory Board Members (including former Directors and Audit &Supervisory Board Members) from liability for damages due to negligence of their duties to theextent permitted by law. This is intended to ensure that Directors and Audit & Supervisory Board
Members can fully fulfill their expected roles.
iii) Organization for determining interim dividends
Pursuant to Article 454, paragraph 5 of the Companies Act, the Company’s Articles ofIncorporation stipulate that the Company may, by resolution of the Board of Directors, pay
dividends from surplus (interim dividends) to shareholders or registered share pledgees whosenames appear or are recorded in the final shareholders’ register as of September 30 of each year.
The purpose of this provision is to return profits to shareholders or registered share pledgees in atimely manner.
6) Requirements for the adoption of special resolutions by the General Meeting of Shareholders
The Company states in its Articles of Incorporation that the adoption of a special resolution based on
Article 309, paragraph 2 of the Companies Act shall require that at least one-third of the shareholders
entitled to execute voting rights be present, and that an affirmative vote be cast by at least two-thirdsof such shareholders present. The purpose of this provision is to better ensure that a quorum is present.

40

(2) Information about officers(i) Officers
Men: 12, Women: 2 (Percentage of female officers: 14.3%)
Title and position

Name

Date of birth

Career summary

Numberof shares
held(hundredsof shares)(Note 3)705

(Note 3)

144

(Note 3)169

Apr. 1985
Apr. 2002
June 2003

President & CEO,
Member of theBoard of Directors(Representative
Director)

Koichi
Nakao

June 16, 1962

Executive Vice
President, Memberof the Board of
Directors

Junichi
MinenoAugust 13, 1960

Senior Executive
Officer, Member of
Yoh
the Board of
Hamaoka
Directors

October 9, 1962

Joined Takara Shuzo Co., Ltd.
Director of the Company
Managing Director
Executive Officer
June 2004 Senior Managing Director
Apr. 2006 COO (Chief Operating Officer)
June 2007 Representative Director and Vice President
May 2009 President & CEO (current position)
Takara Bio USA Holdings Inc. Director,
President (current position)
June 2009 Director of Takara Holdings Inc. (current
position)
June 2015 President and Executive Officer (current
position)
Apr. 2020 CEO (Chief Executive Officer) (current
position)
Apr. 2021 Representative Director of Manufacturing
Technology Association of Biologics (current
position)
Apr. 1984 Joined Takara Shuzo Co., Ltd.
Apr. 2004 General Manager of Center for Cell and Gene
Therapy Facility of the Company
June 2009 Deputy General Manager of Gene Therapy
Business Unit
General Manager of Center for Cell and Gene
Therapy Facility
Apr. 2011 Executive Officer
June 2012 Executive Officer
June 2014 Managing Director
June 2015 Executive Officer
July 2016 Co-Representative Director and Vice
Chairman of Takara Korea Biomedical Inc.
June 2019 Director (current position)
Senior Managing Executive Officer
Apr. 2020 COO (Chief Operating Officer)
Apr. 2022 Executive Vice President, in charge of CDM
Business and the CDM Promotion Department(current position)
Apr. 1987 Joined Japan Tobacco Inc.
Feb. 2000 Joined Takara Shuzo Co., Ltd.
Apr. 2004 Executive Officer of the Company
June 2009 Executive Officer
Deputy General Manager of Gene Therapy
Business Unit
Apr. 2017 In charge of Intellectual Property Department
General Manager of Business Development
Department
June 2018 In charge of General Affairs Department
Apr. 2019 In charge of Project Management Department
Apr. 2020 General Manager of R&D Division
Apr. 2021 CFO (Chief Financial Officer)
June 2021 Director (current position)
Senior Executive Officer (current position)
Apr. 2022 In charge of Business Administration and theIntellectual Property Department (current
position)

Term ofoffice41

Title and position

Name

Date of birth

Career summary
Apr. 1988
Jan. 2009

Senior Executive
Officer, Member of Tsuyoshi
the Board of
Miyamura
Directors

June 2009
June 2014
June 2018
Dec. 2019
October 20, 1963

Mar. 2021
Apr. 2021
Apr. 2022

July 2001
Mar. 2007
Mar. 2010
Nov. 2011
May 2013
Apr. 2015
Executive Officer,
Masanobu
Member of theKimuraBoard of Directors

August 19, 1963
June 2016
June 2017
Apr. 2022

Apr. 1985
Apr. 2002
June 2004
June 2007
May 2009
June 2009
June 2014
Director

MutsumiKimuraFebruary 3, 1963

June 2016
June 2017
July 2017
June 2018
Apr. 2020
June 2022
Apr. 1986

NobukoKawashima(Name asDirectorshown onOctober 27, 1962
(External Director) the family
resister:
NobukoYokoyama)

Sept. 1987
Sept. 1995
Apr. 1999
Apr. 2004
June 2016
June 2021

Joined Takara Shuzo Co., Ltd.
General Manager of Sales Department of theCompany
Executive Officer
Executive Officer
Director (current position)
Chairman of Takara Biomedical Technology(Beijing) Co., Ltd. (current position)
Co-Representative Director and Chairman of
Takara Korea Biomedical Inc. (current
position)
CMO (Chief Marketing Officer)
Chairman of Takara Biotechnology (Dalian)Co., Ltd. (current position)
Senior Executive Officer, in charge of theReagents & Instruments Business and theProduct Development Center (current
position)
Joined Daiichi Pharmaceutical Co., Ltd.
(currently Daiichi Sankyo Co., Ltd.)
Joined ImmunoFrontier, Inc.
Joined ICON Japan K.K.
Joined PAREXEL International Inc.
Joined the Company
Deputy General Manager of Gene Therapy
Business Unit
General Manager of Project Management
Department
Executive Officer
Director (current position)
Executive Officer (current position)
In charge of Quality Assurance, Quality
Assurance Departments 1 and 2, the Quality
Assurance Administration Department, and theRegulatory and Pharmacovigilance
Department (current position)
Joined Takara Shuzo Co., Ltd.
Director of the Company
Managing Director
Senior Managing Director
Director and Vice President
Representative Director and Vice President
Director of Takara Holdings Inc., Senior
Managing Director of Takara Shuzo Co., Ltd.
Representative Director and Vice President of
Takara Holdings Inc.
Director of Takara Shuzo Co., Ltd. (current
position)
Representative Director and President of Takara
Shuzo International Co., Ltd.
Representative Director and President of Takara
Holdings Inc. (current position)
Director of Takara Shuzo International Co., Ltd.
(current position)
Director (current position)
Joined The Long-Term Credit Bank of Japan,
Limited (currently Shinsei Bank, Limited)
Joined Dentsu Communication Institute Inc.
Research fellow at the Centre for Cultural
Policy Studies of the University of Warwick
Full-time lecturer with the Faculty of
Economics at Doshisha University
Professor with the Faculty of Economics at
Doshisha University (current position)
Director of the Company (current position)
Outside Director of TOKAI Holdings
Corporation (current position)

42

Numberof shares
Term ofheld
office(hundredsof shares)(Note 3)107

(Note 3)8(Note 3)500

(Note 3)–

Title and position

Name

Date of birth

Career summary
Apr. 1976

Director(External Director)

KazukoKimuraDirector
Noriomi(External Director) Matsumura

May 1, 1951

July 10, 1971

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

Numberof shares
Term ofheld
office(hundredsof shares)

43(Note 3)–(Note 3)–

Title and position

Name

Date of birth

Career summary
Apr. 1984
Apr. 2005
Apr. 2011

Audit &
Supervisory Board
MemberAkihikoApr. 2013
September 10, 1959
Kita
Apr. 2014

June 2016
Apr. 1983
Apr. 2005
Audit &
MasahideSupervisory Board
TamakiMemberAudit &
Supervisory Board
MemberKunihiko(External Audit & Kamada
Supervisory Board
Member)February 28, 1960

Apr. 2007
June 2009
Apr. 2015
June 2016
June 2019
Apr. 1992

May 16, 1960

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

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

November 5, 1953

May 2015
June 2016

June 2017
June 2020
June 2021

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

44

Numberof shares
Term ofheld
office(hundredsof shares)(Note 6)16

(Note 6)60

(Note 4)–(Note 4)–

Title and position

Name

Date of birth

Numberof shares
Term ofheld
office(hundredsof shares)

Career summary
Apr. 1996

Audit &
Supervisory Board
Member
Masaaki(External Audit & Makikawa
Supervisory Board
Member)January 1, 1952

Professor with the Department of Robotics ofthe Faculty of Science and Engineering at
Ritsumeikan University
Apr. 2003 Head of the Liaison Office of Biwako-Kusatsu
Campus at Ritsumeikan University
Apr. 2005 Head of the Research Center for Sport and
Health Science at Ritsumeikan University
Apr. 2007 Executive Director of the Institute of Scienceand Technology at Ritsumeikan University
Apr. 2011 Visiting Professor with the Graduate School of
Medicine at Osaka University (current
position)
Apr. 2012 Dean of the Research Division at Ritsumeikan
University
Apr. 2017 Special Professor with the Faculty of Scienceand Engineering at Ritsumeikan University
June 2017 Audit & Supervisory Board Member of theCompany (current position)
July 2017 Special Professor with the Faculty of Scienceand Engineering (Assistant Director) at
Ritsumeikan University
Apr. 2021 President of Osaka Hatsushiba Trust (current
position)
Apr. 2022 Assistant Director of Ritsumeikan University(current position)
Visiting Professor of Research Organization of
Science and Technology at Ritsumeikan
University(Note 5)

Total

–

1,709

Notes: 1. Three Directors, Nobuko Kawashima, Kazuko Kimura, and Noriomi Matsumura, are external Directors.
2. Three Audit & Supervisory Board Members, Kunihiko Kamada, Yasuo Himeiwa, and Masaaki Makikawa, areexternal Audit & Supervisory Board Members.
3. From the close of the Annual General Meeting of Shareholders held June 24, 2022 to the close of the Annual General
Meeting of Shareholders to be held in June 2023.
4. From the close of the Annual General Meeting of Shareholders held on June 23, 2020 to the close of the Annual
General Meeting of Shareholders to be held in June 2024.
5. From the close of the Annual General Meeting of Shareholders held on June 24, 2021 to the close of the Annual
General Meeting of Shareholders to be held in June 2025.
6. From the close of the Annual General Meeting of Shareholders held on June 21, 2019 to the close of the Annual
General Meeting of Shareholders to be held in June 2023.
7. The Company has introduced an executive officer system to promote further activation of the Board of Directors
and to improve management efficiency by separating the decision-making and business execution supervisionfunctions of the Board of Directors from the business execution functions of each department. The Company has 14
Executive Officers, nine of whom, excluding the above five Directors who concurrently serve as Executive Officers,
are as follows.
Senior Executive Officer

In charge of CDM Center (1-5), General
Manager of CDM Center 6

Mutsumi Sano

Executive Officer

In charge of Manufacturing Control
Department, Technical Training Center,
CDM Customer Relations Department,
and Facility Control Department

Katsuhiko Kusakabe

Executive Officer

In charge of Sales Administration
Department, SCM Department,
Manufacturing Department, andInternational Sales Department

Kyoko Nakajima

Executive Officer

In charge of Sales Departments 1 and 2,
Business Development Department,
Product Management Department, andCustomer Relations Department

Akira Kodera

45

Executive Officer

In charge of General Affairs Department
and General Manager of Human
Resources Department

Noritaka Nishiwaki

Executive Officer

In charge of Genome Analysis Center 2
and 3, General Manager of Genome
Analysis Center 1

Masanari Kitagawa

Executive Officer

In charge of QC Departments 2-5,
General Manager of QC Department 1

Nobuto Koyama

Executive Officer

In charge of Corporate Administration
Department, Finance & Accounting
Department, Business Support
Department, and PR & IR Department

Takuya Kakemi

Executive Officer

In charge of Project Management
Department, Technology Development
Center, and Process Development
Department

Tatsuji Enoki

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

(ii) External officers
The Company has three external Directors and three external Audit & Supervisory Board Members.
Three external Directors, Nobuko Kawashima, Kazuko Kimura, and Noriomi Matsumura and threeexternal Audit & Supervisory Board Members, Kunihiko Kamada, Yasuo Himeiwa, and Masaaki
Makikawa, have no personal, capital, or business relationship with the Company or any otherrelationship that could cause a conflict of interest with general shareholders, and we believe that they
are independent from the Company.
External Director Nobuko Kawashima is, as of the date of submission of this report, a Professor at
Doshisha University and an Outside Director of TOKAI Holdings Corporation, but there is no material
relationship between these entities and the Company.
External Director Kazuko Kimura is, as of the date of submission of this report, a Specially Appointed
Professor of Graduate School of Medical Sciences, National University Corporation Kanazawa
University, a Representative Director of Medicines Security Workshop, and an Outside Director of
Mitsubishi Logistics Corporation, but there is no material relationship between these entities and theCompany.
External Director Noriomi Matsumura is a Professor of Department of Obstetrics and Gynecology ofFaculty of Medicine at Kindai University, as of the date of submission of this report, but there is nomaterial relationship between the said educational corporation and the Company.
External Audit & Supervisory Board Member Kunihiko Kamada is an employee of Daiichi Legal
Professional Corporation as of the date of submission of this report, but there is no material
relationship between the said law firm and the Company.
External Audit & Supervisory Board Member Yasuo Himeiwa is a President of Himeiwa Certified
Public Accountant Office, an Outside Member of the Board (Member of Audit & Supervisory
Committee) of Sharp Corporation, and an Outside director (full-time auditing committee member) of
IDEC CORPORATION as of the date of submission, but there is no material relationship between
these entities and the Company.
External Audit & Supervisory Board Member Masaaki Makikawa is an Assistant Director of
Ritsumeikan University, a Visiting Professor of Research Organization of Science and Technology at
Ritsumeikan University, and the President of Osaka Hatsushiba Trust as of the date of submission ofthis report, but there is no material relationship between these entities and the Company.
The Company has designated three external Directors, Nobuko Kawashima, Kazuko Kimura, andNoriomi Matsumura, and three external Audit & Supervisory Board Members, Kunihiko Kamada,Yasuo Himeiwa, and Masaaki Makikawa, as independent officers as stipulated by the Tokyo Stock
Exchange, and has notified the exchange of such designation.
46

The Company has established criteria for independence from the Company to appoint external
Directors and external Audit & Supervisory Board Members.
[Criteria for independence of external officers]
External officers who do not meet any of the following criteria are judged to be independent.
1)

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

2)

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

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

4)

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

A person whose major business partner is the Company or its subsidiary (a person who hasreceived from the Company or its subsidiary a payment of 2% or more of the person’s annual
consolidated gross sales for the most recent fiscal year) or a parent company or significant
subsidiary of the person, or an executive director, executive officer, corporate officer, ormanager or other employee of the relevant company if such person is a company.

6)

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

7)

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

8)

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

9)

Directors (limited to those in charge of business execution) or other executives (an officer,
employee or servant who executes the business of relevant organization) of organizations (forexample, public interest incorporated foundation, public interest incorporated association, nonprofit corporation, etc.) that have received donations or grants from the Company or its
subsidiaries averaging more than ¥10 million per year for the past three years10) A person who was a director, auditor, accounting advisor, executive officer, or corporate officer
of a company that accepts directors (whether full-time or part-time) from the Company or its
subsidiaries, or its parent company or subsidiaries
11) A person who is a director, auditor, accounting advisor, executive officer, corporate officer,
manager, or other employee of financial institutions or other major creditors (below, “major
creditors, etc.”), or their parent companies or material subsidiaries, that are essential to theCompany’s financing and on which the Company depends to the extent that there is noalternative
12) A person who has been a director, auditor, accounting advisor, executive officer, corporate
officer, manager, or other employee of the Company’s current major creditors, etc., or its parent
company or material subsidiary for the last three years
4713) A person who is currently a certified public accountant (or certified tax accountant) or a member,
partner or employee of an auditing firm (or certified tax accountant firm) that is an accounting
auditor or accounting advisor of the Company or its subsidiary
14) A person who has been a certified public accountant (or certified tax accountant) or a member,
partner or employee of an auditing firm (or certified tax accountant firm) that has been an
accounting auditor or accounting advisor of the Company or its subsidiary in the last three years,
and who has been actually in charge of auditing work (except for auxiliary involvement) for theCompany or its subsidiary (including those who are currently retired or have left the institution)15) Lawyers, certified public accountants, certified tax accountants, or other consultants who do not
fall under 13) or 14) above and who have received, on average, annual monetary or otherfinancial benefits of ¥10 million or more from the Company or its subsidiaries in the past three
years, other than remuneration for officers16) A person who is a member, partner, associate or employee of a law firm, auditing firm, tax
accounting firm, consulting firm or other professional advisory firm that does not fall under 13)
or 14) above and whose principal client is the Company or its subsidiaries (a firm that hasreceived, on average, 2% or more of the firm’s consolidated gross sales from the Company orthat company in the last three fiscal years)17) A person whose spouse or a relative within the second degree of kinship falls under any of theabove categories 1) through 16)18) A person who may permanently have a substantial conflict of interest with the Company’s
general shareholders as a whole due to circumstances other than those considered in 1) through17) above(iii) Coordination between supervision or auditing by external Directors or external Audit & Supervisory
Board Members and internal audits, audits by Audit & Supervisory Board Members and accounting
audits, and relationship with divisions involved in internal control
When convening a meeting of the Board of Directors, external Directors and external Audit &Supervisory Board Members are provided with agenda items and other relevant materials in advance,and explanations are provided by the Director in charge, etc., as necessary.
External Directors receive reports on internal audits, audits by Audit & Supervisory Board Members,
and accounting audits through the Board of Directors, and fulfill their function of management
supervision of Directors from a standpoint independent of business execution.
External Audit & Supervisory Board Members receive reports on internal audits through the Board of
Directors, conduct audits in cooperation with Audit & Supervisory Board Members, and directly
receive reports on audit plans, audit status, and audit results from the Accounting Auditor, thereby
fulfilling the function of auditing the execution of duties by the Directors from an objective and neutral
standpoint.

48

(3) Status of audits(i) Status of audits by Audit & Supervisory Board Members
The Company’s Audit & Supervisory Board consists of five Audit & Supervisory Board Members,
three of whom are external Audit & Supervisory Board Members. The status of each Audit &Supervisory Board Member and the percentage of attendance at the Audit & Supervisory Board
meetings held during the fiscal year under review are as follows.
Title and position

Name

Career summary, etc.

Audit &
Supervisory Board
MemberAkihiko Kita

Audit &
Supervisory Board
MemberMasahide Tamaki

External Audit &Supervisory Board
MemberExternal Audit &Supervisory Board
MemberExternal Audit &Supervisory Board
MemberKunihiko Kamada

Akihiko Kita has experience in the development,
manufacturing control, production, and quality assurance of
AgriBio business, and has been engaged in the overallmanagement of overseas subsidiaries as the Vice Presidentof Takara Biotechnology (Dalian) Co., Ltd. and as a
Director of Takara Biomedical Technology (Beijing) Co.,Ltd.
Masahide Tamaki is engaged in sales, logistics andpurchasing of products and services in the Bioindustry
business, and has experience in overall management ofsubsidiaries in the AgriBio business.
Kunihiko Kamada is qualified as an attorney-at-law andhas considerable knowledge of corporate legal affairs.

Number ofmeetings attended
13/13 (100%)

13/13 (100%)

13/13 (100%)

Yasuo Himeiwa

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

13/13 (100%)

Masaaki Makikawa

Masaaki Makikawa has experience and expertise in thefields of medical engineering and bioengineering, having
supervised research for national projects and undertaken
many industry-academia collaborative projects such ascommissioned research and joint research.

13/13 (100%)

The main matters shared and discussed by the Audit & Supervisory Board and a summary of auditing
activities are as follows.
Major matters shared and discussed by the Audit & Supervisory Board
・Audit policy, audit plan, audit method and work assignment
・Evaluation of the Accounting Auditor
・Status of audit by the Audit & Supervisory Board Members
・Preparation of audit report49

Table 1. Summary of audit activities(1) Directors(2) Business execution(3) Internal audits(4) Accounting audits

Attendance at Board of Directors meetings
Periodic exchanges of opinions with the Representative Director
Hearing of important management matters
Hearing of business execution from Directors and employees, etc., and attendance at otherimportant meetings
Conducting audits of consolidated subsidiaries
Investigation of business and property conditions
Inspection and investigation of important documents (approval documents, company seal
request forms, minutes of important meetings, contracts, etc.)
Attendance at audits and inspections by the Internal Audit Department
Daily exchange of opinions with the Internal Audit Department
Hearing of audit plans, quarterly review reports, and audit result reports
Receipt of notices and exchange of opinions on the system for performing duties of the
Accounting Auditor
Implementation of evaluation of the Accounting Auditor

Audit & Supervisory Board Members conducted the audit activities listed in Table 1, and the contentsof these activities were shared with the external Audit & Supervisory Board Members.
The external Audit & Supervisory Board Members attended meetings of the Board of Directors andother important meetings, and exchanged opinions with management and the Accounting Auditor.
They also attended meetings of the Audit & Supervisory Board to receive reports from the Audit &Supervisory Board Members on the status of other important meetings, as well as on the status andresults of audits, and gathered necessary information and expressed their opinions as necessary byutilizing their professional knowledge and background.
(ii) Internal audits
Internal audits at the Company are conducted by the Internal Audit Department (3 members), whichis independent of the business execution divisions and directly supervised by the President & CEO, in
accordance with the Internal Audit Regulations and based on the audit policy and audit plan establishedfor each fiscal year, to confirm compliance with internal regulations and laws and regulations, to checkthe status of operation of internal control systems, and to express opinions on efficiency and safety.
The results of the audits are reported to the President & CEO, and the effectiveness of internal audits
is ensured by instructing the audited departments to make improvements based on the audit results andhaving them report the status of improvements without delay after the audit.
In addition, the Internal Audit Department verifies the effectiveness of the internal control system incollaboration with the Audit & Supervisory Board Members as appropriate. In addition, the Internal
Audit Department meets with the Accounting Auditor several times a year to provide detailed reports
on audit plans, audit results, etc., as well as to attend audits and exchange information.
(iii) Accounting audits
1) Name of auditing corporation
Deloitte Touche Tohmatsu LLC
2) Length of continuous auditing
Since 1968 (including the period of continuous auditing at Takara Shuzo Co., Ltd. prior to theestablishment of the Company)
3) Certified public accountants who conducted audits
Takashi Iwabuchi, Designated Limited Partner, Certified Public Accountant
Yuya Minobe, Designated Limited Partner, Certified Public Accountant
4) Assistant accountants who participated in audits
Ten certified public accountants and ten others5) Policy and reason for selecting the audit corporation50

In selecting an audit corporation, we make a comprehensive judgment based on the following main
considerations, taking into account the nature and scale of our business.
・Continued adequacy of the quality control system
・High level of independence and expertise・Reasonableness and appropriateness of audit fees
・The corporation has an audit system that can provide support on a global basis
6) Evaluation of audit corporation by Audit & Supervisory Board Members and Audit & Supervisory
Board
In accordance with the Accounting Auditor Evaluation Standards, our Audit & Supervisory Board
Members and the Audit & Supervisory Board evaluate the auditing corporation each fiscal year
through reports from the Finance & Accounting Department on the status of audit implementationand through periodic exchanges of opinions with the auditing corporation and hearing confirmation
items.
As a result, we have determined not to dismiss and to reappoint Deloitte Touche Tohmatsu LLC,
our current auditing firm.
(iv) Details of audit fee, etc.
1) Remuneration to independent auditors
Fiscal year ended March 31, 2021
Category

Fees for audit
certification services(Millions of yen)

Fiscal year ended March 31, 2022

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

Reporting company

48

2

51

5

Consolidated
subsidiaries

–

–

–

–

Total

48

2

51

5

Non-audit services at the Company consisted of advice and guidance on compliance with the
Accounting Standard for Revenue Recognition in the previous fiscal year, and advice and guidance oncompliance with climate-related financial disclosures in the current fiscal year.
2) Remuneration to the same network as independent auditors (excluding remuneration to Deloitte
Tohmatsu Group (1))
Fiscal year ended March 31, 2021
Category

Fees for audit
certification services(Millions of yen)

Reporting company

Fiscal year ended March 31, 2022

Fees for non-audit
services(Millions of yen)

Fees for audit
certification services(Millions of yen)

Fees for non-audit
services(Millions of yen)

–

1

–

2

Consolidated
subsidiaries

116

30

120

32

Total

116

31

120

35

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

3) Details of other major remuneration for audit certification services
Not applicable.
4) Policy on determining audit fee
The Company does not have a clear policy for determining the audit fee for independent auditors,
However, the Company receives an explanation of the details of the estimated amount of the audit
fee presented by the auditing corporation, and determines the amount after discussion and with theconsent of the Audit & Supervisory Board.
515) Reasons for approval of the Accounting Auditor remuneration by the Audit & Supervisory Board
The Audit & Supervisory Board, after receiving necessary materials and reports from the Directors,
relevant internal departments, and the Accounting Auditor, and after reviewing the details of theaudit plan of the Accounting Auditor, the performance of its duties during the previous fiscal year,
and the basis for the calculation of the remuneration estimate, has decided to consent to the
remuneration for the Accounting Auditor as stipulated in Article 399, paragraph 1 of the Companies
Act.
(4) Remuneration, etc. for officers(i) Matters concerning the policy for determining the amount of remuneration, etc. for officers as wellas the method of calculation thereof1) Basic policy
The Company’s basic policy regarding remuneration for officers is an annual salary-based
remuneration system designed to promote excellent human resources as managers, to motivatethem more strongly to execute management strategies, and to further increase corporate value.
The amount of remuneration for officers is determined within the remuneration limits resolved at
the Annual General Meeting of Shareholders, based on the method of performance evaluation
approved by the Board of Directors on December 16, 2019, taking into consideration their position
and their contribution to the company’s performance, and is paid at a certain time each month.
The amount of remuneration for Directors is determined by the President & CEO Koichi Nakao,
who is authorized by the Board of Directors, with advice and recommendations from theNomination and Compensation Committee, which is established voluntarily by the Company. Thisis because the Company has introduced a target management system for the evaluation of thedivisional performance of its Executive Directors, and the targets in the divisional performance
evaluation include not only division-specific quantitative targets but also qualitative targets, and
the President & CEO implements the performance evaluation. The Board of Directors believes that
this method will promote excellent human resources as managers and motivate them to execute
management strategies more strongly and further increase corporate value.
2) Remuneration system
Remuneration for Executive Directors consists of a fixed salary and a variable salary linked to thecompany’s performance and other factors to reflect their responsibilities as Directors and theircontribution to corporate performance. The fixed salary is 50% of the amount of remuneration forthe previous fiscal year, and the variable salary is determined based on the company-wide anddivisional performance evaluations, using 50% of the amount of remuneration for the previous
fiscal year as the basis for calculating the variable salary.
Remuneration for Directors and Audit & Supervisory Board Members who are independent of theexecution of business operations is fixed salary only, within the limit of remuneration resolved at
the Annual General Meeting of Shareholders.
3) Calculation method of variable salary
The calculation method of variable salary for Executive Directors is as follows.

52

Total variablesalary(Ratio 50%)

Overall performance evaluation(Ratio 25%)

Divisional performance evaluation(Ratio 25%)

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

Reasons forselection ofindicators, etc.

Operating profit is positioned as the Company’s mostimportant management indicator.

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

Results

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

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

4) Resolution of the General Meeting of Shareholders regarding the remuneration for officers
The details of the resolution of the General Meeting of Shareholders regarding remuneration for
officers are as follows.
a) Date of the resolution of the General Meeting of Shareholders
June 23, 2017b) Director
Fixed remuneration amountUp to ¥184.8 million per year (including up to ¥30 million for external Directors)
Performance-linked remuneration amountUp to 5% of consolidated operating profit for the previous fiscal year per year
Number of Directors eligible for remuneration
8c) Audit & Supervisory Board Members
Fixed remuneration amountUp to ¥72 million per year
Number of Audit & Supervisory Board Members eligible for remuneration
553

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

Category of officers

Total amount of remuneration, etc. by type (Millions of yen)
Total amount of
Of which, non- Number of
remuneration,
PerformanceFixedmonetary
Retirement
eligible officers
etc.
linkedremuneration
remuneration,
benefits(Millions of yen)remunerationetc.

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

277

161

115

–

–

7

32

32

–

–

–

2

19

19

–

–

–

3

21

21

–

–

–

3

External Audit &Supervisory Board
Members
Note:

The above includes one Director who retired at the conclusion of the 19th Annual General Meeting of Shareholders
held on June 24, 2021.

(iii) Total amount of consolidated remuneration, etc. by officer
The total amount of consolidated remuneration, etc. by officer is not stated because there is no officer
whose amount is ¥100 million or more.
(iv) Significant employee salaries of officers who also serve as employees
The Company does not have any officers who concurrently serve as employees.
(5) Share ownership
1) Policy and concept of the classification of investment shares
The Company does not currently hold any cross-shareholdings for purposes other than pure investment,
and it is the Company’s basic policy not to hold such shares in the future.
2) Investment shares whose purpose of holding is other than for pure investment
Not applicable.
3) Investment shares whose purpose of holding is for pure investment
Not applicable.

54

V. Financial information
1. Preparation policy of the consolidated and non-consolidated financial statements(1) The consolidated financial statements of the Company are prepared in accordance with the Ordinanceon Terminology, Forms and Preparation Methods of Consolidated Financial Statements (Ordinance ofthe Ministry of Finance No. 28 of 1976).
(2) The non-consolidated financial statements of the Company are prepared in accordance with theOrdinance on Terminology, Forms and Preparation Methods of Financial Statements, etc. (Ordinanceof the Ministry of Finance No. 59 of 1963; hereinafter the “Ordinance on Financial Statements, etc.”).
The Company is qualified as a company submitting financial statements prepared in accordance withspecial provision and has prepared financial statements pursuant to the provisions of Article 127 of theOrdinance on Financial Statements, etc.
2. Audit certification
In accordance with the provisions of Article 193-2, paragraph 1 of the Financial Instruments andExchange Act, the consolidated financial statements and the non-consolidated financial statements forthe fiscal year ended March 31, 2022 were audited by Deloitte Touche Tohmatsu LLC.
3. Special efforts to ensure the appropriateness of consolidated financial statements, etc.
The Company takes special measures to ensure the appropriateness of its consolidated financial
statements, etc. Specifically, the Company is a member of the Financial Accounting Standards
Foundation in order to grasp the content of accounting standards, etc., and to establish a system toappropriately respond to revisions of accounting standards, etc.

55

1. Consolidated financial statements, etc.
(1) Consolidated financial statements
1) Consolidated balance sheet(Millions of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Notes receivable - trade
Electronically recorded monetary claims - operating
Accounts receivable - trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Technology assets
Other
Total intangible assets
Investments and other assets
Deferred tax assets
Retirement benefit asset
Other
Total investments and other assets
Total non-current assets
Total assets

As of March 31, 2022

25,993
12,626
–
–
–
4,966
1,316
2,901
1,352
(41)
49,115

15,670(5,147)
10,522*1
7,058(3,760)
3,297
*1
7,673
(5,141)
2,531
8,143
771
(87)
684
3,756
1,025
(194)
830
29,766
*1

6,149
1,953
1,270
9,373
1,075
114
305
1,495
40,63589,75056

23,633–466
1,231
16,147
18,966
1,361
3,738
2,637
(40)
68,141

23,553(5,937)
17,615*1
7,626(4,147)
3,479
*1
9,530
(5,516)
4,014
8,413
756
(125)
631
1,519
885
(161)
723
36,395
*1

*1

6,309
1,523
1,326
9,159
1,539
123
352
2,015
47,571
115,712(Millions of yen)
As of March 31, 2021
Liabilities
Current liabilities
Notes and accounts payable - trade
Lease liabilities
Accounts payable - other
Income taxes payable
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Deferred tax liabilities
Retirement benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Total shareholders’ equity
Accumulated other comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

57

As of March 31, 2022

2,077
138
2,911
3,146
739
4,177
13,191

1,959
137
4,443
5,498
923
4,418
17,380

1,003
–
800
452
2,256
15,448

910
198
788
370
2,266
19,647

14,96532,89327,08574,945

14,96532,89345,00992,868

(529)
(234)
(763)
120
74,30289,750

3,208
(204)
3,004
191
96,064
115,712

2) Consolidated statements of profit or loss
Consolidated statement of income(Millions of yen)
Fiscal year ended
March 31, 2021
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Provision of allowance for doubtful accounts
Employees’ salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Research and development expenses
Other
Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Foreign exchange gains
Rental income from real estate
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Rental expenses on real estate
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
National subsidies
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on tax purpose reduction entry of non-current
assetsLoss on valuation of inventories
Impairment losses
Loss on liquidation of business
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

Fiscal year ended
March 31, 2022

46,086
14,21431,872

67,69918,48849,211

17
4,577
424
191
*2
5,545
7,163
17,91913,952

20
5,327
528
230
*2
6,109
8,093
20,30928,902

113
2
128
63
308

122
–
141
94
357

24
–
54
21
101
14,159

23
706
61
8
800
28,459

1
517
518

*3

*4

*4

6
4,470
4,476

*5

99

*5

174

*4

517

*4

4,470

–
–
*8
458
50
1,125
13,552
4,297
(326)
3,971
9,581
34
9,547

*6

589
168
–
–
5,403
27,532
7,901
(277)
7,624
19,90858
19,849

*3

*7

58

*1

*7

3) Consolidated statement of comprehensive income(Millions of yen)
Fiscal year ended
March 31, 2021
ProfitOther comprehensive income
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests*1

59

Fiscal year ended
March 31, 2022

9,581

19,908

(974)
66
(907)
8,674

3,751
29
*1
3,781
23,6898,648

23,61725714) Consolidated statement of changes in equity
Fiscal year ended March 31, 2021
(Millions of yen)
Shareholders’ equity

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

Noncontrollinginterests

Total net
assets95

66,591Retainedearnings

Total
shareholders’equityForeigncurrencytranslation
adjustment

18,501

66,360436

Dividends ofsurplus

(963)

(963)

(963)

Profit attributable toowners of parent

9,547

9,547

9,547

Share capital
Balance at beginning of
period14,965

Capitalsurplus32,893(300)

135

Changes during period

Net changes of
items other thanshareholders’equityTotal changes during
periodBalance at end of
period

(965)

66

(898)

25

(873)

–

–

8,584

8,584

(965)

66

(898)

25

7,710

14,96532,89327,08574,945

(529)

(234)

(763)

120

74,302

Fiscal year ended March 31, 2022
(Millions of yen)
Shareholders’ equity

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

Noncontrollinginterests

Total net
assets120

74,302Retainedearnings

Total
shareholders’equityForeigncurrencytranslation
adjustment

27,08574,945(529)

Dividends ofsurplus(1,926)(1,926)(1,926)

Profit attributable toowners of parent

19,84919,84919,849

Share capital
Balance at beginning of
period14,965

Capitalsurplus32,893

(234)

(763)

Changes during period

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

3,737

29

3,767

71

3,839

–

–

17,923

17,923

3,737

29

3,767

71

21,762

14,96532,89345,00992,868

3,208

(204)

3,004

191

96,06460

5) Consolidated statement of cash flows(Millions of yen)
Fiscal year ended
March 31, 2021

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

13,552
3,220
–
80
486
(14)
190
16
(113)
24
97
458
(3,559)(1,767)
1,016
2,416
(573)
15,533107(24)(1,854)*2
181
13,943

27,532
3,554
168
95
500
(3)
144
(12)
(122)
23
168
–
(4,812)(14,233)
(431)
81
(526)
12,127133(23)(5,922)
*2
671
6,985

(2,613)
3,766
2,000

(11,406)
12,877–(8,687)(12,403)

14

47

*2

61

Fiscal year ended
March 31, 2022

(158)
1,900
(0)
(3,778)

*2

(136)
3,960
(10)
(7,071)

(962)
(140)
(1,103)(1,923)(147)(2,070)

(215)

1,008

8,845
14,462*1 23,308(1,148)23,308*1 22,160

Notes to consolidated financial statements
Significant matters for preparing consolidated financial statements
1. Scope of consolidation(1) Consolidated subsidiaries(i) Number of consolidated subsidiaries:

Nine companies(ii) Names of consolidated subsidiaries:

Takara Bio Europe S.A.S. (France)
Takara Bio Europe AB (Sweden)
Takara Bio UK Ltd (U.K.)
Takara Biotechnology (Dalian) Co., Ltd. (China)
Takara Biomedical Technology (Beijing) Co., Ltd.
(China)Takara Korea Biomedical Inc. (Korea)
DSS Takara Bio India Private Limited (India)
Takara Bio USA Holdings Inc. (U.S.)
Takara Bio USA, Inc. (U.S.)

Of the above, Takara Bio UK Ltd was newly established and is included in the scope of consolidationfrom the fiscal year under review.
(2) Non-consolidated subsidiaries
Not applicable.
2. Adoption of equity method(1) Non-consolidated subsidiaries or affiliates adopting equity method
No equity method companies(2) Non-consolidated subsidiaries or affiliates not adopting equity method
Not applicable.
3. Fiscal year of consolidated subsidiaries
The closing date of the fiscal year for consolidated subsidiaries is December 31, which differs from theclosing date of the consolidated fiscal year.
Because the difference with the consolidated fiscal year is three months or less, financial statements asof the closing date of the fiscal year for each company were used in the preparation of these consolidated
financial statements. Necessary adjustments in consolidated earnings will be performed for importanttransactions that occur between the closing date of the fiscal year for each company and the closing dateof the consolidated fiscal year.
4. Accounting policies(1) Valuation basis and methods for significant assets(i) Securities
1) Held-to-maturity securities
Amortized cost method (straight-line method)2) Available-for-sale securities
Available-for-sale securities other than stocks, etc., without market value
Fair value method (unrealized gains and losses are recognized in a component of net assets, andcosts of securities sold are determined by the moving average method)62

Stocks, etc. without market value
Stated at cost determined by the moving-average method(ii) Derivatives
Fair value method(iii) Inventories
Primarily stated at cost determined by the weighted-average method (the carrying amounts in thebalance sheet are calculated by the method in which carrying amounts are written down due to a
decline in profitability of assets)(2) Method of depreciation for important depreciated assets(i) Property, plant and equipment (excludes leased assets)
Primarily uses straight-line method.
Major useful lives are as follows:
Buildings and structures

6 to 60 years

Machinery, equipment and vehicles

4 to 10 years

Tools, furniture and fixtures

2 to 15 years(ii) Intangible assets (excludes leased assets)
Straight-line method.
Major useful lives are as follows:
Technology assets: 7 to 9 years (future profit capturable period used as basis for calculating price)
Customer-related assets: 9 years (same as above)
Company-used software: 5 years (usable period in company)
Trademarks: 10 years (trademarks booked by Takara Bio USA, Inc. are not amortized)(iii) Leased assets
Leased assets in ownership-transferred finance lease transactions
Uses same method as depreciation method adopted for company-owned fixed assets.
Leased assets in non-ownership-transferred finance lease transactions
Uses straight-line method with settings of useful lives as lease period and residual value as zero.
(3) Booking standards for important allowance(i) Allowance for doubtful accounts
As a provision for losses arising from bad debts, allowance for doubtful accounts is provided at theamount expected to be uncollectible based on the historical rate of bad debt for general receivables
and based on the collectability of the receivables for doubtful accounts.
(ii) Provision for bonuses
Provision for bonus payments to employees is provided at the amount of projected future bonus
payment to be borne during the current fiscal year.
(4) Accounting method for retirement benefits(i) Method of attributing expected retirement benefits to periods
In calculation of retirement benefit obligations, the benefit formula basis is applied to attributeexpected retirement benefits to periods up to the end of the current consolidated fiscal year underreview.

63

(ii) Amortization of actuarial gains or losses and past service cost
Past service cost is amortized on a straight-line basis from the fiscal year in which the cost occurred
over a period equal to or less than the average remaining service period of eligible employees (tenyears).
Actuarial gains and losses are amortized by the straight-line method over a period within the averageremaining service years for employees (ten years) at the time of occurrence in each consolidated fiscal
year, and allocated proportionately from the consolidated fiscal year following the respective
consolidated fiscal year of occurrence.
Unrecognized actuarial gains and losses and unrecognized past service cost are booked inremeasurements of defined benefit plans for accumulated other comprehensive income in net assets
making adjustments for tax effects.
(5) Standards for booking important revenue and expenses
In terms of revenue generated from contracts between the Group and customers, the details of major
performance obligations in major businesses and the standard timing of fulfilling performanceobligations (and recognizing revenue) are as follows.
The Group receives the compensation of the transaction within one year of fulfilling performanceobligations and significant financing components are not included.
(i) Reagents and instruments
The Group primarily manufactures and sells reagents and sells instruments. In terms of product sales
to domestic customers, the period between shipping and delivery of the product to the customer is thestandard period. Therefore, the Group recognizes revenue at the point of shipping the product to thecustomer. In terms of product sales to overseas customers, based on trade conditions establishedprimarily in Incoterms, etc., the Group recognizes revenue at the point that the Group delivers the
product to the transporting party and is aware the control of product is transferred to the customer.
(ii) CDMOThe Group is entrusted primarily with services related to regenerative medicine products, gene
analysis and examinations based on short-term contract services. Revenue is recognized at a point intime when control is transferred to customers, primarily over acceptance, receipt, or shipment,
depending on the contract.
(6) Standards for converting important foreign currency-denominated assets and liabilities to Japanese yen
Foreign currency-denominated monetary receivables and liabilities are converted into yen at the spot
exchange rate as of the closing date of the fiscal year, and the resulting exchange differences areaccounted for as gains or losses. Further, the assets and liabilities of overseas subsidiaries, etc., areconverted into yen at the spot exchange rate as of the closing date of each subsidiary. Revenue andexpenses are converted into yen by the average exchange rate during the period. The resulting exchange
differences are included in non-controlling interests and foreign currency translation adjustment in net
assets.
(7) Significant methods of hedge accounting(i) Method of hedge accounting
Deferral hedge is adopted in hedge accounting. Appropriation processing is adopted for transactions
that meet the requirements for that method in order to hedge foreign currency exchange risks.
(ii) Hedging instruments and hedged items
Hedging instruments: Forward exchange contracts
Hedged items: Foreign currency-denominated liabilities corresponding with royalty payments(iii) Hedge policy
The currency fluctuation risk of a hedged item in the exchange market is hedged within a certain range
based on accounting rules for the purpose of mitigating the effect of exchange fluctuations on foreign
currency-denominated liabilities.
64

(iv) Assessment of the effectiveness of hedge accounting
An exchange contract, a hedging instrument, fixes the cash flows of a hedged item. Therefore, cash
flow fluctuations are offset at the start of the hedging and thereafter. As such, the assessment of hedge
effectiveness is omitted.
(8) Method and period for amortization of goodwill
Goodwill is amortized by straight-line method over a reasonable amortization period within 20 years.
(9) Scope of cash and cash equivalents in consolidated statements of cash flows
Cash on hand, demand deposits, and short-term investments with repayment terms of three months orless from the date of acquisition that are readily convertible to cash and subject to an insignificant risk ofchanges in value.
Significant accounting estimates
Goodwill
The Group recorded goodwill for Takara Bio USA, Inc. when the Group acquired all the shares of Clontech
Laboratories, Inc., Rubicon Genomics, Inc., and WaferGen Bio-systems, Inc.
(1) The amount recorded in the consolidated financial statements for the current fiscal year
Fiscal year ended March 31, 2021
Goodwill(Millions of yen)
Fiscal year ended March 31, 2022

6,149

6,309

(2) Information related to significant accounting estimates for identified items
The Group determined Takara Bio USA, Inc. as a reporting unit including goodwill and took procedures
to identify an indication of impairment. The recoverable amount of the reporting unit is measured at fairvalue. Fair value is mainly calculated by discounted current value of estimated future cash flow and uses
hypothetical future growth rate, etc. for cash flow estimates.
Further, at the end of the current fiscal year, recoverable amount sufficiently exceeded carrying amounts.
Therefore, the Group determined that the possibility of occurrence of impairment losses was low even if
there were reasonable changes to the future growth rate used to calculate recoverable amount.
Changes in accounting policies
Adoption of Accounting Standard for Revenue Recognition, etc.
The Group adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31,2020) from the beginning of the current fiscal year. The Group recognizes revenue when it satisfies a
performance obligation by transferring promised goods or services to a customer as the amount expected tobe received upon exchange of goods or services.
The application of the Accounting Standard for Revenue Recognition, etc. is subject to the transitional
treatment provided for in the proviso of paragraph 84 of the Accounting Standard for Revenue Recognition.
The cumulative effect of the retrospective application of the new accounting policy from the beginning of
the current fiscal year was added to or subtracted from the beginning balance of retained earnings at the startof the current fiscal year and thus the new accounting policy was applied from the beginning balance.
Also, the item “Notes and accounts receivable - trade” displayed in “Current assets” in the consolidatedbalance sheet for the previous fiscal year will, from this fiscal year, be included in “Notes receivable - trade,”“Electronically recorded monetary claims - operating,” and “Accounts receivable - trade.” However, in
accordance with the transitional treatment established in Article 89-2 of the Accounting Standard for Revenue
Recognition, figures for the previous fiscal year have not been restated in accordance with the newpresentation method.
As a result, this change does not impact gains and losses for the current fiscal year. Also, it does not impact
the balance of retained earnings at the beginning of the current fiscal year.
65Unapplied accounting standards, etc.
1. Overseas subsidiaries
・ “Leases” (ASU 2016-02, February 25, 2016)(1) Overview
The accounting standards require lessees to recognize assets and liabilities for all leases in principle.
(2) Planned date of application
Standards will be applied from the consolidated fiscal year starting after April 1, 2022.
(3) Impact of applying these accounting standards
The Group is currently assessing the impact of applying “Leases” to the consolidated balance sheet.
Changes in presentation
Consolidated statement of income
Non-operating expenses“Inactive non-current asset expenses” categorized in non-operating expenses in the previous fiscal year isincluded in “Other” from this fiscal year because they have become insignificant in monetary value. In orderto reflect the changes to this presentation method, the Group reorganized the consolidated financial
statements for the previous fiscal year.
As a result, ¥18 million in “Inactive non-current asset expenses” presented in non-operating expenses in thestatement of income of the previous fiscal year has been moved to “Other.”
Additional information
Accounting estimates related to the impact of COVID-19
Based on the obtainable information at the time of preparing the consolidated financial statements for thisfiscal year, the Group expects that the COVID-19 pandemic will continue to impact results in fiscal 2022 fora set period of time. Based on this assumption, the Group makes estimates and determinations related to
impairment of goodwill and recoverability of deferred tax assets, etc. at the end of this fiscal year. The Group
does not expect there to be impairment of goodwill, and has determined that it is not necessary to additionallybook valuation allowances related to the recoverability of deferred tax assets.
Because many uncertainties surround the influence of the COVID-19 pandemic on results, if there arechanges to the above assumptions, it is possible that it could impact the financial status and operating resultsof the Group.
Consolidated balance sheet*1 Tax purpose reduction entry
The total amount of tax purpose reduction entry that is directly subtracted from non-current assets
acquired using national subsidies, etc. is as follows.

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Intangible assets, others
Total

Fiscal year ended March 31, 2021
(March 31, 2021)¥144 million
295
77
–
517

66

Fiscal year ended March 31, 2022
(March 31, 2022)¥1,337 million
3,124
524
1
4,987

Consolidated statement of income*1 Revenue from contracts with customers
Fiscal year ended March 31, 2022
Sales are only the revenue generated from contracts with customers and other forms of revenue are notincluded. Monetary revenue generated from contracts with customers is listed in “Notes (Revenue
recognition) 1. Information breakdown of revenue from contracts with customers” in the consolidated
financial statement.
*2 Total amount of research and development expenses included in general and administrative expenses
and manufacturing expenses for the current fiscal year
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)
Total research and development
expenses

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)¥5,545 million¥6,109 million¥1,464 million
131
53
963
42
754
536

¥1,538 million
152
54
1,032
44
933
716

Major expenses of these expenses are as follows.
Employees’ salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Depreciation
Royalties
Supplies expenses
Remuneration/contracting fees

*3 Breakdown of gain on sales of non-current assets
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)

Machinery, equipment and vehicles¥0 million¥0 million

Tools, furniture and fixtures
Total

0
1

5
6

*4 National subsidies and loss on tax purpose reduction entry of non-current assets
Fiscal year ended March 31, 2021
The amount of subsidies received is booked as “National subsidies” in extraordinary income. The
reduced value entry of non-current assets related to these subsidies is booked as “Loss on tax purpose
reduction entry of non-current assets” in extraordinary losses.
Fiscal year ended March 31, 2022
The amount of subsidies received is booked as “National subsidies” in extraordinary income. The
reduced value entry of non-current assets related to these subsidies is booked as “Loss on tax purpose
reduction entry of non-current assets” in extraordinary losses.

67

*5 Breakdown of losses on sale of non-current assets
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)¥4 million
21
38
20
13

¥25 million
42
18
35
52

99

174

Buildings and structures
Machinery, equipment and vehicles
Tools, furniture and fixtures
Intangible assets, others
Demolition and disposal expenses,
etc.
Total

*6 Loss on valuation of inventories
Fiscal year ended March 31, 2022
Low-quality products due to bad weather during the transfer from overseas were scheduled to bedisposed of. The resulting incurred losses are recorded as “Loss on valuation of inventories” inextraordinary losses. Also, the Company is insured for damages. However, the amount of insurancecompensation received is not booked because it is not determined.
*7 Ⅰmpairment losses
Fiscal year ended March 31, 2021
The Group, upon determining indication for impairment losses, in principle, assets, excluding those forsale, disposal, and idle assets, are grouped on an operating company basis as a single unit.
Type and impairment losses (Millions of yen)
Purpose of use

Location

Assets planned for
disposal

Takara Bio USA,
Inc., etc., others(Mountain View,
U.S., others)

Machinery,
Buildings
equipment
andandstructures
vehicles

Total

Tools,
furnitureandfixtures

Intangible
assets

Land

Total

–

3

3

–

353

360

–

3

3

–

353

360

(i) Process of recognizing impairment losses
Upon liquidating related businesses, the Group reduces the carrying amounts to the recoverable
amount, and books the reduced amount as a loss on liquidation of business in extraordinary losses.
Loss on liquidation of business is as written in “*8 Loss on liquidation of business Fiscal year ended
March 31, 2021.”(ii) Method of calculating recoverable amount
Recoverable amount is measured at value in use based on future cash flows.
Fiscal year ended March 31, 2022
The description is omitted as immaterial.
*8 Loss on liquidation of business
Fiscal year ended March 31, 2021

68

The Group booked extraordinary losses resulting from liquidating the next generation sequence library
production equipment related business. This includes ¥360 million in impairment losses and ¥97 million
in loss on valuation of inventories. Impairment losses are as written in “*7 Impairment losses Fiscal
year ended March 31, 2021.”
Consolidated statement of comprehensive income*1 Reclassification adjustments and tax effects in other comprehensive income
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)(¥974 million)¥3,751 million

Foreign currency translation
adjustment:
Amount arising
Remeasurements of defined benefit
plans:
Amount arising

47

(24)

Reclassification adjustments

47

67

Before tax effect adjustment
Tax effects

94
(28)

42
(12)

Remeasurements of defined
benefit plans
Total other comprehensive income

66

29

(907)

3,781

Consolidated statement of changes in equity
Fiscal year ended March 31, 2021
1. Class and total amount of issued shares, as well as class and total number of treasury shares
Number of shares atthe beginning of the
fiscal year ended
March 31, 2021
(shares)Number of shares
increased during the
fiscal year ended
March 31, 2021
(shares)Number of shares
decreased during the
fiscal year ended
March 31, 2021
(shares)Number of shares atthe end of the fiscal
year ended March 31,
2021 (shares)

120,415,600
120,415,600

–
–

–
–

120,415,600
120,415,600

–
–

–
–

–
–

–
–

Issued shares
Common shares
Total
Treasury shares
Common shares
Total

2. Share acquisition rights and treasury share acquisition rights
Not applicable.

693. Dividends(1) Cash dividends paid
Resolutions

Share
class

June 23, 2020
Annual General
Meeting of
Shareholders

CommonsharesTotal amountof dividends(Millions ofyen)

Source ofdividend

963

Retainedearnings

Dividends per
share (Yen)Record date

Effective date

8.00 March 31, 2020

June 24, 2020

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

Share
class

June 24, 2021
Annual General
Meeting of
Shareholders

CommonsharesTotal amountof dividends(Millions ofyen)

Source ofdividend

1,926

Retainedearnings

Dividends per
share (Yen)Record date

Effective date

16.00 March 31, 2021

June 25, 2021

Fiscal year ended March 31, 2022
1. Class and total amount of issued shares as well as class and total number of treasury shares
Number of shares atthe beginning of the
fiscal year ended
March 31, 2022
(shares)Number of shares
increased during the
fiscal year ended
March 31, 2022
(shares)Number of shares
decreased during the
fiscal year ended
March 31, 2022
(shares)Number of shares atthe end of the fiscal
year ended March 31,
2022 (shares)

120,415,600
120,415,600

–
–

–
–

120,415,600
120,415,600

–
–

–
–

–
–

–
–

Issued shares
Common shares
Total
Treasury shares
Common shares
Total

2. Share acquisition rights and treasury share acquisition rights
Not applicable.
3. Dividends(1) Cash dividends paid

Resolutions

Share
class

Total amountof dividends(Millions ofyen)

Source ofdividend

Dividends per
share (Yen)Record date

Effective dateJune 24, 2021
Annual General
Meeting of
Shareholders

Commonshares

1,926

Retainedearnings

16.00

March 31, 2021

June 25, 202170

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

Share
class

Total amountof dividends(Millions ofyen)

Source ofdividend

Dividends per
share (Yen)Record date

Effective dateJune 24, 2022
Annual General
Meeting of
Shareholders

Commonshares3,973

Retainedearnings

33.00

March 31, 2022

June 27, 2022

Consolidated statement of cash flows*1 Relationship between cash and cash equivalents at the end of the year and the amount written in the
consolidated balance sheet
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)

Cash and deposits
Time deposits with maturity exceeding
three months¥25,993 million

23,633 million(2,684)(1,472)

Cash and cash equivalents

23,30822,160*2 Subsidies received
Of subsidies received during fiscal years ended March 31, 2021, and March 31, 2022, as national
subsidies, etc., ¥1,769 million of which is planned to be returned in the following fiscal year inaccordance with the rules of the national subsidy, etc.
3. Significant non-financial transactions
Amount of assets and liabilities related to finance lease transactions

Assets related to finance lease transactions
Liabilities related to finance lease transactions

Fiscal year ended March 31, Fiscal year ended March 31,
2021
2022
(April 1, 2020 to March 31, (April 1, 2021 to March 31,
2021)
2022)
¥684 million¥631 million
765
718

Lease transaction
1. Finance lease transaction (The Group as a lessee)(1) Ownership-transferred finance lease transactions(i) Leased assets
Equipment related to gas engine cogeneration (machinery, equipment and vehicles).
(ii) Depreciation method for leased assets
Written in “4. Accounting policies (2) Method of depreciation for important depreciated assets” inimportant items that are the basis of preparing consolidated financial statements.
(2) Finance lease transactions without transfer of ownership
Description is omitted as immaterial.

712. Operating lease transactions
Future lease payments for non-cancellable operating lease transactions

Within one year
Over one year
Total

Fiscal year ended March 31, 2021
(March 31, 2021)
217
30
248

(Millions of yen)

Fiscal year ended March 31, 2022
(March 31, 2022)
15
19
34

3. Lease transactions based on the International Financial Reporting Standards (IFRS)(1) Right-of-use assets
Primarily rental of offices and transportation vehicles(2) Depreciation method for right-of-use assets
Straight-line method
Financial instruments
1. Items related to status of financial instruments(1) Initiative policy for financial instruments
The Group manages surplus funds, limited to only highly safe financial assets. Derivative transactions
are aimed to mitigate the impact of future foreign currency exchange fluctuations on foreign currencydenominated receivables and liabilities, not as a speculation.
(2) Details and risks of financial instruments
Notes receivable – trade, electronically recorded monetary claims – operating, and accounts receivable– trade, which are trade receivables, are exposed to the credit risk of customers. Foreign currencydenominated trade receivables arising from the overseas business operations are exposed to foreign
currency exchange fluctuation risks.
Securities are held-to-maturity securities exposed to the credit risks of the issuers of bonds.
Notes and accounts payable – trade, which are operating liabilities, usually have a maturity date of threemonths or less. Some of them are foreign currency-denominated due to the importing of products, etc.,
being exposed to foreign currency exchange fluctuation risks. In principle, futures exchange contracts
are used to hedge net positions of the same foreign currency-denominated trade receivables.
Derivative transactions entail futures exchange contracts, spot forward exchange contracts, and currency
option contracts aimed at mitigating the effect of future foreign currency exchange fluctuations on
foreign currency-denominated trade receivables and liabilities. For hedging instruments, hedged items,
hedging policies, and methods of evaluating hedge effectiveness concerning hedge accounting, pleaserefer to the aforementioned “Significant matters for preparing consolidated financial statements 4.
Accounting policies (7) Significant methods of hedge accounting” above.
(3) Risk management system for financial instruments(i) Management of credit risks (risk of contract default by partner, etc.)
Based on the operating management rules and the credit management rules, the Group manages
payment due date and manage the outstanding balance of each business partner. Monitoring thecredit status of the major business partners facilitates the Group to quickly grasp and reduce
doubtful accounts. In addition, consolidated subsidiaries apply the same risk management approach.
Securities are, based on accounting rules, limited to products with the highest ratings. Therefore,credit risk is not significant.
72

Derivative transactions are limited to financial institutions with high ratings that the Company has
a business relationship with. Therefore, credit risk is not significant.
(ii) Management of market risks (fluctuation risks for currency exchange rates and interest rates, etc.)
For foreign currency-denominated trade receivables and liabilities, the Company, in principle, uses
futures exchange contracts to hedge against fluctuation risks for the exchange rates of each currency.
In accordance with the accounting rules, the responsible department executes and manages
derivative transactions upon receiving the authorization of a person in charge of the settlement.
(iii) Management of liquidity risks in financing (risk of not making payments on due date)
Based on reports of each department, a responsible department in the Company prepares andupdates financing plans, as well as manages liquidity risks by maintaining liquidity on hand. In
addition, consolidated subsidiaries apply the same risk management approach.
2. The fair value of financial instruments, etc.
Amount booked on consolidated balance sheet, fair value, and the difference are as follows. For theprevious consolidated fiscal year, items for which it was extremely difficult to determine the fair value
are not included in the following table.
Fiscal year ended March 31, 2021

(Millions of yen)

Carrying amount on
consolidated balance sheet

Fair value

Difference(1) Lease liabilities (Current
138
138
(0)
liabilities)(2) Lease liabilities (Non-current
1,003
997
(5)
liabilities)
Total liabilities
9,278
9,271
(6)
(3) Derivative transactions (*2)
(25)
(25)
–
(*1) For cash and deposits, notes and accounts receivable – trade, notes and accounts payable – trade, accounts payable– other, and income taxes payable, fair value resembles carrying amounts because they are settled in a short period.
Therefore, they have been omitted.
(*2) Net receivables and liabilities that occur due to derivative transactions are displayed as net value. Items that are
net liabilities as total are displayed by ( ).
Notes: Calculation method of the fair value of financial instruments and derivative transactions(1)

Lease liabilities (current liabilities) and (2) Lease liabilities (non-current liabilities)

Calculated by discounting the total amount of principal and interests by an interest rate supposed for a similar
new lease transaction.
(2)

Derivative transactions

Displays as net value of receivables and liabilities that occur from derivative transactions. Fair value is the pricedisplayed from financial institution partners.

Fiscal year ended March 31, 2022

(Millions of yen)

Carrying amount on
consolidated balance sheet

Fair value

Difference(1) Lease liabilities (current
137
136
(0)
liabilities)(2) Lease liabilities (non-current
910
882
(27)
liabilities)
Total liabilities
1,047
1,018
(28)
(3) Derivative transactions (*2)
(80)
(80)
–
(*1) For cash and deposits, notes receivable – trade, electronically recorded monetary claims – operating, accounts
receivable – trade, notes and accounts payable – trade, accounts payable – other, and income taxes payable, market
value resembles carrying amounts because they are settled in a short period. Therefore, they have been omitted.

73

(*2) Net receivables and liabilities that occur due to derivative transactions are displayed as net value. Items that are
net liabilities as total are displayed by ( ).
Notes: 1. Planned return amount of lease liabilities after the closing date of the consolidated fiscal year
Fiscal year ended March 31, 2021
Within one
year
Lease
liabilities

Over three
Over one year Over two years
years
within two
within three
within four
years
years
years

138

Fiscal year ended March 31, 2022
Within one
year
Lease
liabilities

128

94

73

Over three
Over one year Over two years
years
within two
within three
within four
years
years
years

Over four
years
within five
years

137

120

Over four
years
within five
years

133

108

76

(Millions of yen)Over fiveyears
586(Millions of yen)Over five
years

77

513

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

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

Level 2 Fair value:

Among inputs related to the measurement of observable fair value, the fair value
measured using inputs related to the measurement of fair value other than Level 1
inputsLevel 3 Fair value:

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

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

Financial instruments recorded in the consolidated balance sheet at fair value
Fiscal year ended March 31, 2022
(Millions of yen)
Category

Derivative transactions
Total liabilities

Fair value
Level 1

Level 2

–
–

74

80
80

Level 3

–
–

Total

80
80

(2)

Financial instruments other than those recorded at fair value in the consolidated balance sheet
Fiscal year ended March 31, 2022
(Millions of yen)
Market value

Category

Level 1

Level 2

Level 3

Total

Lease liabilities (current–
136–
liabilities)
Lease liabilities (non–882–current liabilities)
Total liabilities
–
1,018
–
Notes: Explanation of valuation method applied and input related to the measurement of fair value

136
882
1,018

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

Derivative transactions
1. Derivative transactions to which hedge accounting is not applied
Currency-related
Fiscal year ended March 31, 2021
Category

Transaction typeExchange contract
transactions
Long position

Transactions
other than market
transactions

Contract
Contract amount, amount, etc.
etc.
exceeding one
year(Millions of yen)
Unrealized gainor loss

Fair value

USD

54

–

1

1

RMB

410

–

9

9

Short position
EUR
RMB
Spot exchange
forwards transactions
Short position

515

–

(3)

(3)

1,075

–

(30)

(30)

KRW
Total

89

–

(1)

(1)

2,145

–

(25)

(25)

75

Fiscal year ended March 31, 2022
Category

Transaction type

Contract
amount, etc.
Contract amount,exceeding one
etc.
year

(Millions of yen)
Unrealized gainor loss

Fair value

Exchange contract
transactions
Long position
USD

138

–

7

7

RMB

451

–

26

26

Short position

Transactions
other than market
transactions

USD

664

(61)

(61)

EUR

65

–

(2)

(2)

1,822

–

(48)

(48)

39

–

(1)

(1)

3,182

–

(80)

(80)

RMB
Spot exchange
forwards transactions
Short position
KRW
Total

2. Derivative transactions to which hedge accounting is applied
Currency-related
Fiscal year ended March 31, 2021
Not applicable.
Fiscal year ended March 31, 2022
Not applicable.
Retirement benefit
1. Outline of retirement benefit plans
The Company and some consolidated subsidiaries adopt funded-type and non-funded-type defined
benefit plans, as well as defined contribution pension plans in order to provide for the retirement
benefits of employees.
The defined benefit corporate pension plans (all plans are funded-type plans) pay benefits either in theform of a lump sum or an annual income according to salary and service period.
The lump-sum retirement plans (all plans are non-funded-type plans) pay benefits in the form of alump sum based on salary and service period.
Some subsidiaries calculate retirement benefit liability and retirement benefit expenses using
simplified method.

76

2. Defined benefit plans(1) Reconciliation of the beginning and ending balances of retirement benefit obligation

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

Fiscal year ended March 31,
Fiscal year ended March 31,
2021
2022
(April 1, 2020 to March 31,(April 1, 2021 to March 31,
2021)
2022)
¥1,515 million¥1,554 million
130
138
5
5
11
7
(108)
(164)
1
3
1,554
1,545

(2) Reconciliation of the beginning and ending balances of pension assets

Beginning balance of pension assets
Expected return
Actuarial gains and losses
Contributions by the employer
Retirement benefits paid
Other
Ending balance of pension assets

Fiscal year ended March 31,
Fiscal year ended March 31,
2021
2022
(April 1, 2020 to March 31,(April 1, 2021 to March 31,
2021)
2022)
¥773 million¥868 million
13
15
58
(16)
72
84
(50)
(74)
1
3
868
880

(3) Reconciliation of the ending balance of retirement benefit obligation and pension assets and retirement
benefit liability and retirement benefit asset recorded in the consolidated balance sheet
Fiscal year ended March 31,
2021(March 31, 2021)
Retirement benefit obligation (funded-type plans)
Pension assets
Retirement benefit obligation (non-funded-type
plans)Net amount of liabilities and assets on consolidatedbalance sheet
Defined benefit liability
Defined benefit asset
Net amount of liabilities and assets on consolidatedbalance sheet

77

Fiscal year ended March 31,
2022(March 31, 2022)¥755 million
(868)
(113)

¥758 million
(880)
(121)

799

786

685

664

800
(114)

788
(123)

685

664

(4) Retirement benefit expenses and the breakdown amount thereofService cost
Interest cost

Fiscal year ended March 31,
Fiscal year ended March 31,
2021
2022
(April 1, 2020 to March 31,(April 1, 2021 to March 31,
2021)
2022)
¥130 million¥138 million
55Expected return
Amortization of actuarial gains and losses

(13)
74

(15)
67

Amortization of past service cost
Retirement benefit expenses for defined benefit
plans

(26)

–

169

196

(5) Remeasurements of defined benefit plans
A breakdown of items recorded as remeasurements of defined benefit plans (before tax effectdeduction) is as follows.
Fiscal year ended March 31,
2021(April 1, 2020 to March 31,
2021)
Past service cost
Actuarial gains and losses

Fiscal year ended March 31,
2022(April 1, 2021 to March 31,2022)¥(26) million
121

Total

¥– million
42

94

42

(6) Accumulated remeasurements of defined benefit plans
A breakdown of items recorded as accumulated remeasurements of defined benefit plans (before tax
effect deduction) is as follows.

Unrecognized actuarial gains and losses

Fiscal year ended March 31,
Fiscal year ended March 31,
2021
2022
(March 31, 2021)(March 31, 2022)¥(334) million¥(291) million

Total

(334)

(291)

(7) Pension assets(i) Breakdown of major pension assets
The percentage of major categories comprising the total pension assets is as follows.

Bonds
Life insurance general accounts
StocksCash and deposits
Other
Total

Fiscal year ended March 31,
2021(March 31, 2021)
55%
27
15
2
1
100

Fiscal year ended March 31,
2022(March 31, 2022)
55%
26
14
2
3
100

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

78

(8) Basis for calculating actuarial gains and losses
Basis for the calculation of significant actuarial gains and losses (presented in weighted average).
Fiscal year ended March 31,
2021(March 31, 2021)
Discount rate
Defined benefit corporate pension
A lump sum
Long-term expected return rate
Average salary increase rate

Fiscal year ended March 31,
2022(March 31, 2022)

0.377%
0.382%
2.000%
3.600%

0.377%
0.382%
2.000%
3.600%

3. Defined contribution plans
The contribution amount for defined contribution plans of the Company and some consolidated
subsidiaries was ¥145 million for the previous fiscal year and ¥158 million for the current fiscal year.
Stock option, etc.
Not applicable.
Tax effect accounting
1. Breakdown of deferred tax assets and deferred tax liabilities by major cause
Fiscal year ended
March 31, 2021
(March 31, 2021)

Deferred tax assets
Unused tax losses (*1)¥539 million
Loss on valuation of inventories
260
Impairment losses
213
Unrealized profit on inventories
687
Remeasurements of defined benefit plans
100
Provision for bonuses
156
Retirement benefit liability
172
Depreciation
34
Expenses related to subsidiary acquisition
186
Experimentation and research expenses
109
Tax credits on experimentation and research expenses, etc.
56
Accrued business tax
168
Other
287
Deferred tax assets subtotal
2,972
Valuation allowances for unused tax losses(205)
Valuation allowances for total deductible temporary(458)
difference
Valuation allowances subtotal(664)
Deferred tax assets total
2,307
Deferred tax liabilities
Fair value of intangible assets(624)
Retained surplus of overseas subsidiaries
(441)
Other
(167)
Deferred tax liabilities total(1,232)
Net deferred tax assets
1,075(*1) Amount of unused tax losses and deferred tax assets by carry forward period

79

Fiscal year ended
March 31, 2022
(March 31, 2022)¥581 million
497
212
542
87
199
178
102
208
100
101
287
354
3,455
(236)
(279)
(516)
2,939
(533)
(358)
(706)
(1,597)
1,341

Fiscal year ended March 31, 2021
Withinone yearOver oneyear
withintwo years

Over twoyears
withinthree
years

Over three
years

Over four
years

withinwithinfour years

five years

Over five
years

Total

Unused tax
losses (a)

–

–

–

–

–

539

¥539 million

Valuation
allowance

–

–

–

–

–

(205)

(205)

Deferred tax

–
–
–
–
–
assets(a) Unused tax losses are the amount multiplied by the effective statutory tax rate.

333

(b)

333

(b) ¥333 million in deferred tax assets related to unused tax losses is a portion of the ¥383 million (amount multipliedby effective statutory tax rate) of unused tax losses incurred in the acquisition of a US subsidiary in the fiscal year
ended March 31, 2018. The Group does not recognize a valuation allowance as it determined that it would berecoverable based on future taxable income forecasts.
Fiscal year ended March 31, 2022

Withinone yearOver oneyear
withintwo years

Over twoyears
withinthree
years

Over three
years
withinfour years

Over four
years
withinfive years

Over fiveyears

Unused tax
–
–
–
–
–
losses (a)Valuation–––––
allowance
Deferred tax
–
–
–
–
–
assets(a) Unused tax losses are the amount multiplied by the effective statutory tax rate.

Total

581

¥581 million

(236)

(236)

344

(b)

344

(b) ¥344 million in deferred tax assets related to unused tax losses is a portion of the ¥398 million (amount multipliedby effective statutory tax rate) of unused tax losses incurred in the acquisition of a US subsidiary in the fiscal year
ended March 31, 2018. The Group does not recognize a valuation allowance as it determined that it would berecoverable based on future taxable income forecasts.

Changes in presentation“Accrued business tax,” which was included in “Other” under deferred tax assets in the previous fiscal
year, has been presented separately from the current fiscal year due to its increased materiality. As aresult, 456 million yen presented as “Other” in deferred tax assets in the previous fiscal year have been
reclassified as “Accrued business tax” of 168 million yen and “Other” of 287 million yen.

80

2. Breakdown of major items that cause significant differences between the effective statutory tax rate andincome tax rate after applying tax effect accounting
Fiscal year ended March
31, 2021(March 31, 2021)
Effective statutory tax rate
The difference(Adjustments)
between the effective
Entertainment and other permanently non-deductible
statutory tax rate andexpenses
income tax rate afterTax credits on experimentation and research expenses,
applying tax effectetc.
accounting is 5% orChanges in valuation allowance
less of the effective
Difference in subsidiary tax rate
statutory tax rate andElimination of unrealized profit for inventories
has therefore been
Amortization of goodwill
omitted.
Foreign tax
Retained surplus of overseas subsidiaries
Other
Income tax rate after applying tax effect accounting

Fiscal year ended March
31, 2022(March 31, 2022)
30.0%
0.2
(2.8)
(0.7)
(1.2)
0.1
0.5
1.3
(0.3)
0.6
27.7

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

Total(Millions of yen)

Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)
35,189
1,726
8,901
268
46,086

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)
54,605
1,518
11,426
148
67,699Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)
20,475
7,862
8,415
4,917
3,743
671
46,086

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)
34,076
10,186
11,908
6,614
4,668
244
67,699(2) Breakdown by region
Region
Japan
U.S.
China
Asia besides Japan/China
EuropeOther
Total(Millions of yen)

2. Information that is the basis for understanding revenue from contracts with customers
Information that is the basis for understanding revenue from contracts with customers is as written in“Significant matters for preparing consolidated financial statements 4. Accounting policies (5)Standards for booking important revenue and expenses.”
3. Relationship with fulfillment of performance obligations based on contracts with customers and cash
flow generated from said contracts, as well as information related to revenue amount and period

81expected to be recognized from following fiscal year from contracts with customers existing at the endof the current fiscal year
(1) Balance, etc., of contract assets and contract liabilities
Contract assets and liabilities of the Company and consolidated subsidiaries have been omitted
because they are not significant to the balance and no major changes have occurred. Also, there is no
significant revenue from performance obligations fulfilled (or partially fulfilled) in past fiscal years
that is recognized in this fiscal year.
Due to a lack of monetary significance, contract assets are included in “Accounts receivable - trade”
and contract liabilities are included in “Other” in “Current liabilities” on the consolidated balance
sheet.
(2) Transaction price allocated to the remaining performance obligations
The Company and its consolidated subsidiaries apply a practical expedient for notes on transaction
price allocated to the remaining performance obligations. Contracts with one year or less contract
period initially forecast are not included in the notes. Unsatisfied (or partially unsatisfied) performanceobligations are ¥1,926 million at the end of the current fiscal year. Such performance obligations arein contract service. The Company expects approximately 80% to be recognized as revenue within one
year of the closing date and approximately, the remaining 20% to be recognized as revenue
subsequently thereafter.
Segment information, etc.
Segment information
The Group has omitted this entry because it is a single segment.
Related information
Fiscal year ended March 31, 2021
1. Information for products and services
The Group has omitted this entry because it is a single segment.
2. Information by region(1) Net salesJapan
20,475

U.S.
7,862

China
8,415

Asia besides
Japan/China
4,917(Millions of yen)
Europe

Other

3,743

Total
671

46,086(2) Property, plant and equipment
Japan
21,505

U.S.
5,357

China
2,276

Asia besides
Japan/China
192(Millions of yen)
Europe435

Total
29,766

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

82

Fiscal year ended March 31, 2022
1. Information for products and services
The Group has omitted this entry because it is a single segment.
2. Information by region(1) Net sales
Japan

U.S.

34,076

China

10,186

11,908Asia besides
Japan/China
6,614(Millions of yen)
Europe

Other

4,668

Total
244

67,699(2) Property, plant and equipment
Japan

U.S.

23,246

China

10,013

2,681

Asia besides
Japan/China
208(Millions of yen)
Europe246

Total
36,395

3. Information about each major customer
Of revenue from external customers, net sales from designated customers do not comprise 10% ormore of net sales on consolidated statement of income.
Impairment losses of non-current assets for each reporting segment
The Group has omitted this entry because it is a single segment.
Amortization of goodwill and unamortized balance for each reporting segment
The Group has omitted this entry because it is a single segment.
Gains on negative goodwill for each reporting segment
Not applicable.
Related parties
1. Transactions with related parties
Transactions between company submitting consolidated financial statement and related parties
Fiscal year ended March 31, 2021
Not applicable.
Fiscal year ended March 31, 2022
Not applicable.
2. Notes related to parent company or important affiliates
The parent company of the Company is Takara Holdings Inc. (TSE1).

83

Per share information
Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022
(April 1, 2020 to March 31, 2021) (April 1, 2021 to March 31, 2022)¥616.05

Net assets per share¥79.29Earnings per share
Notes: 1. Information on diluted earnings per share is omitted due to an absence of dilutive shares.
2. Basis for calculating earnings per share is as follows.

¥796.18¥164.84

Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022
(April 1, 2020 to March 31, 2021) (April 1, 2021 to March 31, 2022)
Earnings per share
Profit attributable to owners of parent(Millions of yen)Amount not attributable to commonshareholders (Millions of yen)
Profit attributable to owners of parent forcommon shares (Millions of yen)
Average number of common shares
during the year (Thousands of shares)

Significant subsequent events
Not applicable.

84

9,547

19,849

–

–

9,547

19,849120,415

120,415

(1) Consolidated supplementary schedule
Bonds payable schedule
Not applicable.
Borrowings schedule
Category

Balance atBalance at end of Average interest
beginning of
periodrate
period(Millions of yen)(%)
(Millions of yen)

Due

Lease liabilities due within one year

138

137

3.5

–

Lease liabilities (excluding those due
within one year)

1,003

910

3.5

2023 – 2035

Total

1,142

1,047

–

–

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

133

108

76

77

Asset retirement obligations schedule
The amount of asset retirement obligations as of the beginning and end of the current fiscal year is lessthan 1/100 of the total amount of liabilities and net assets as of the beginning and end of the current
fiscal year, hence the description is omitted in accordance with Article 92-2 of the Ordinance on
Terminology, Forms, and Preparation Methods of Consolidated Financial Statements.
(2) Other(i) Quarterly information for the fiscal year ended March 31, 2022
(Cumulative period)

Q1

Net sales (Millions of yen)
Profit before income taxes (Millions ofyen)Profit attributable to owners of parent(Millions of yen)
Earnings per share (Yen)(Accounting period)
Earnings per share (Yen)

Q2

Q3

FY2022

15,272

31,55145,65967,6998,561

14,203

20,11427,532

6,025

10,00914,364

19,849

50.04

83.12

119.29164.84

Q1

Q2
50.04

Q3
33.08

Q4
36.17

45.56

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

85

Non-consolidated financial statements, etc.
(1) Non-consolidated financial statements
1) Non-consolidated balance sheet(Millions of yen)
As of March 31, 2021
AssetsCurrent assets
Cash and deposits
Notes receivable – trade
Electronically recorded monetary claims – operating
Accounts receivable – trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Prepaid expenses
Short-term loans receivable from subsidiaries andassociates
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Structures
Machinery and equipment
VehiclesTools, furniture and fixtures
Land
Leased assets
Construction in progress
Total property, plant and equipment
Intangible assets
Software
Other
Total intangible assets
Investments and other assets
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates
Deferred tax assets
Other
Total investments and other assets
Total non-current assets
Total assets

*3

*3

*3

86

As of March 31, 2022

14,535
422
803
9,906
3,206
1,027
1,277
189

11,573466
1,231
14,373
16,965
998
1,649
240

–

734

513
(1)
31,8811,627(1)49,859

8,839
599
2,475
0
2,239
5,687
684
980
21,505

*3

389
129
519

*3

*3
*3
*3

9,297
590
2,374
0
3,350
5,687
631
1,313
23,246465
5471

22,50922,509

3,704

3,704

576
428
27,21849,242
81,124

1,211
384
27,81051,527
101,386

(Millions of yen)
As of March 31, 2021
Liabilities
Current liabilities
Accounts payable – trade
Lease liabilities
Accounts payable – otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Unearned revenue
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Lease liabilities
Provision for retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Legal capital surplus
Total capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings
Total shareholders’ equity
Total net assets
Total liabilities and net assets

87

As of March 31, 2022

1,527
47
2,281
668
2,660
629
80
1
348
1,722
9,967

1,422
48
3,496
747
5,137
408
1,366
44
420
611
13,703

718
555
177
59
1,510
11,478

669
575
177
56
1,479
15,182

14,965

14,96532,89332,89332,89332,893

21,786
21,786
69,64569,645
81,12438,34438,344
86,204
86,204
101,386

2) Non-consolidated statements of income(Millions of yen)
Fiscal year ended
March 31, 2021

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest and dividend income
Foreign exchange gains
Rental income from real estate
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Rental expenses on real estate
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets
National subsidies
Total extraordinary income
Extraordinary losses
Loss on sale and retirement of non-current assets
Loss on tax purpose reduction entry of non-current
assetsLoss on valuation of inventories
Loss on liquidation of businessTotal extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit*2*3

Fiscal year ended
March 31, 2022

33,885
14,08219,803
10,109
9,693

*2

1,748
31
47
43
1,870

3,761
–
48
79
3,888

24
–
21
21
67
11,495

23
702
23
7
757
25,063

0
517
518

*3

71
*3

*5

88

50,398
16,52033,878
11,946
21,931

3
4,470
4,473
151

517

*3

4,470

–
38
627
11,386
2,745
(40)
2,704
8,681

*4

589
–
5,211
24,326
6,476
(635)
5,840
18,485Manufacturing cost statements

Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)
Notes
Amount (Millions of yen)numberCategory
I.

Materials costs

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)

Composition
Composition
ratio
Amount (Millions of yen)
ratio
(%)
(%)

3,678

56.2

4,579

57.8

1,258

19.2

1,387

17.5

1,609

24.6

1,956

24.7

Total manufacturingcosts for the period

6,546

100.0

7,923

100.0

Work in process at
beginning of the period

759

1,027

II. Labor costs
III. Expenses

*1

7,305

8,951

Work in process at end of
the period

Total

1,027

998

Transfer to other account

33

56

6,243

7,896

Cost of products
manufactured

Cost calculation method
The method of cost calculation applies the appropriate cost calculation method based on manufacturingmethod of product, such as total annual cost amount by process based on actual costs.
Note*1. Breakdown of major items are as follows.

Items(Millions of yen)

Fiscal year ended March 31, 2021 Fiscal year ended March 31, 2022
(April 1, 2020 to March 31, 2021) (April 1, 2021 to March 31, 2022)

Depreciation

816

988

Repair expenses

429

525

Outsourcing fees

75

192

Taxes

53

53

89

3) Non-consolidated statements of changes in shareholders’ equity
Fiscal year ended March 31, 2021

(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Capital surplus

Retained earnings

Share capital

Legal capitalsurplus

Other retained Total shareholders’earnings
equityRetained earnings
brought forward

14,96532,893

Total net assets

14,06761,92761,927

Dividends of surplus

(963)

(963)

(963)

Profit

8,681

8,681

8,681

Changes during period

Net changes in items otherthan shareholders’ equity–

Total changes during period
Balance at end of period

–

–

7,718

7,718

7,718

14,96532,893

21,786

69,64569,645

Fiscal year ended March 31, 2022

(Millions of yen)
Shareholders’ equity

Balance at beginning of period

Capital surplus

Retained earnings

Share capital

Legal capitalsurplus

Other retained Total shareholders’earnings
equityRetained earnings
brought forward

14,96532,893

Total net assets

21,786

69,64569,645

Dividends of surplus(1,926)(1,926)(1,926)

Profit18,48518,48518,485

Changes during period

Net changes in items otherthan shareholders’ equity
Total changes during period
Balance at end of period–––

16,55816,55816,558

14,96532,89338,344

86,204

86,20490

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

91

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

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

92Hedge policy
The currency fluctuation risk of a hedged item in the exchange market is hedged within a certain
range based on accounting rules for the purpose of mitigating the effect of exchange fluctuations on
foreign currency-denominated liabilities.
Method of assessing hedge effectivenessAn exchange contract, a hedging instrument, fixes the cash flows of a hedged item. Therefore, cash
flow fluctuations are offset at the start of the hedging and thereafter. As such, the assessment of hedge
effectiveness is omitted.
Changes in accounting policies
Adoption of Accounting Standard for Revenue Recognition, etc.
The Company adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March
31, 2020) from the beginning of the current fiscal year. It recognizes revenue when it satisfies a performanceobligation by transferring promised goods or services to a customer as the amount expected to be received
upon exchange of goods or services.
The application of the Accounting Standard for Revenue Recognition, etc. is subject to the transitional
treatment provided for in the proviso of paragraph 84 of the Accounting Standard for Revenue Recognition.
The cumulative effect of the retrospective application of the new accounting policy from the beginning of
the current fiscal year was added to or subtracted from the beginning balance of retained earnings brought
forward at the start of the current fiscal year and thus the new accounting policy was applied from the
beginning balance. As a result, there is no impact on gains and losses for the current fiscal year. There is no
impact on the balance at the beginning of the current fiscal year for retained earnings brought forward.
Changes in presentation
Non-consolidated statements of income
Non-operating expenses“Inactive non-current asset expenses” categorized in non-operating expenses in the previous fiscal
year is included in “Other” from this fiscal year because they have become insignificant in monetary
value. In order to reflect these changes to the presentation, the Company has rearranged the previous
fiscal year financial statements.
As a result, ¥18 million in “Inactive non-current asset expenses” presented in non-operating expenses
in the statement of income of the previous fiscal year has been moved to “Other.”
Additional information
Accounting estimates related to the impact of COVID-19
Based on the obtainable information at the time of preparing the financial statements for this fiscal year,
the Company expects that the COVID-19 pandemic will continue to impact results in fiscal 2022 for a set
period of time. The Company makes estimates and judgments about the recoverability of deferred tax
assets at the end of the current fiscal year based on the above assumptions. It has determined that it is notnecessary to book additional valuation allowances.
Because many uncertainties surround the influence of the COVID-19 pandemic on results, if there arechanges to the above assumptions, it is possible that it could impact the financial status and operating
results of the Company.

93Non-consolidated balance sheet
1

Monetary receivables and monetary liabilities of subsidiaries and affiliates (excluding those presented as
separate line items)

Short-term monetary receivables
Short-term monetary liabilities

2

Fiscal year ended March 31, 2021
(March 31, 2021)

Fiscal year ended March 31, 2022
(March 31, 2022)¥2,008 million
845¥1,740 million
781

Contingencies

The Company has insured rental fee payments. However, there are no applicable sums at the end of thecurrent fiscal year because the contracts are already completed.
Fiscal year ended March 31, 2021
Fiscal year ended March 31, 2022
(March 31, 2021)(March 31, 2022)
Takara Bio USA, Inc.
¥136 million Takara Bio USA, Inc.
¥– million*3 Tax purpose reduction entry
The total amount of tax purpose reduction entry that is directly subtracted from non-current assets acquiredwith national subsidies, etc. is as follows.

Buildings
Machinery and equipment
VehiclesTools, furniture and fixtures
Software
Total

Fiscal year ended March 31, 2021
(March 31, 2021)¥144 million
295
–
77
–
517

Fiscal year ended March 31, 2022
(March 31, 2022)¥1,337 million
3,122
1
524
1
4,987

Non-consolidated statements of income
1. Transaction amount with subsidiaries and affiliates
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)¥13,468 million
6,021¥16,242 million
6,140
188

Net sales
Purchase of goods
Transaction besides operatingtransactions170*2 Selling expenses comprised 10% in FY2021 and 8% in FY2022 while general and administrative
expenses made up 90% in FY2021 and 92% in FY2022.
Major expenses and monetary amount of SG&A expenses
Fiscal year ended March 31, 2021
(April 1, 2020 to March 31, 2021)

Fiscal year ended March 31, 2022
(April 1, 2021 to March 31, 2022)¥476 million¥403 million

0

0

2,186

2,668

156
125

198
151

339
3,774

365
4,554

281

347

Promotion expenses
Provision of allowance for doubtful
accounts
Employees’ salaries and bonuses
Provision for bonuses
Retirement benefit expenses
Depreciation
Research and development expenses
Remuneration/contracting fees

*3 National subsidies and loss on tax purpose reduction entry of non-current assets
94

Fiscal year ended March 31, 2021
Amount received from subsidies, etc. is booked as national subsidies in extraordinary income. The
reduced value entry of non-current assets for subsidies is booked as loss on tax purpose reduction entry
of non-current assets in extraordinary losses.
Fiscal year ended March 31, 2022
Amount received from subsidies, etc. is booked as national subsidies in extraordinary income. The
reduced value entry of non-current assets for subsidies is booked as loss on tax purpose reduction entry
of non-current assets in extraordinary losses.
*4 Loss on valuation of inventories
Fiscal year ended March 31, 2022
Low-quality products due to bad weather during the transfer from overseas were scheduled to bedisposed of. The resulting incurred losses are recorded as “Loss on valuation of inventories” inextraordinary losses. Also, such damages are covered by an insurance policy; however, the Company
has not recorded the amount of compensation received from the insurance policy because the amount is
not yet determined.
*5 Loss on liquidation of business
Fiscal year ended March 31, 2021
The Company booked extraordinary losses resulting from liquidating the next generation sequencelibrary production equipment related business. This includes ¥3 million in impairment losses and ¥34
million in loss on valuation of inventories. Impairment losses are as written in consolidated statementof income “*7 Impairment losses Fiscal year ended March 31, 2021.”
Securities
Fiscal year ended March 31, 2021
The Company does not include the market value of shares of subsidiaries and affiliates because it is extremely
difficult to grasp fair value as there are no market prices.
The amount of the shares of subsidiaries and affiliates for which it is extremely difficult to determine the fairvalue are recorded in the balance sheet as follows.
Category
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates(Millions of yen)
Fiscal year ended March 31,
2021
22,5093,704

Fiscal year ended March 31, 2022
Fair value of shares of subsidiaries and affiliates are not included because the shares have no market prices.
The amount of the shares of subsidiaries and affiliate without market prices are recorded in the balance sheet
as follows.
Category
Shares of subsidiaries and associates
Investments in capital of subsidiaries andassociates(Millions of yen)
Fiscal year ended March 31,
2022
22,5093,704

95

Tax effect accounting
1. Breakdown of deferred tax assets and deferred tax liabilities by major cause

Deferred tax assets
Impairment losses
Provision for bonuses
Provision for retirement benefits
Accrued business tax
Depreciation
Asset retirement obligations
Loss on valuation of inventories
Other
Deferred tax assets subtotal
Valuation allowance
Deferred tax assets total
Deferred tax liabilities
Net deferred tax assets (liabilities)

Fiscal year ended March
31, 2021(March 31, 2021)

Fiscal year ended March
31, 2022(March 31, 2022)¥212 million
90
166
168
33
53
115
113
954
(272)
682
(106)
576

¥212 million
109
172
287
101
53
275
171
1,384
(70)
1,314
(102)
1,211

2. Breakdown of major items that cause significant differences between the effective statutory tax rate andincome tax rate after applying tax effect accounting

Effective statutory tax rate
(Adjustments)
Entertainment and other permanently non-deductible
expensesDividend and other permanently non-taxable income
Local tax on per capita basis
Foreign tax
Changes in valuation allowance
Tax credits on experimentation and researchexpenses, etc.
Other
Income tax rate after applying tax effect accounting

Fiscal year ended March
31, 2021(March 31, 2021)
30.0%

Fiscal year ended March
31, 2022(March 31, 2022)
30.0%

0.0

0.0

(4.4)
0.1
1.5
0.6

(4.4)
0.0
1.5
(0.8)

(4.3)

(2.8)

0.3
23.8

0.5
24.0

Revenue recognition
Information that is the basis for understanding revenue from contracts with customers is omitted here because
it is the same as the information in “Significant accounting policies 4. Standard for booking revenue andexpenses.”Significant subsequent events
Not applicable.

96(1) Supplementary statements
Detailed schedule of property, plant and equipment and others(Millions of yen)

Category

Balance at
beginning of
the period

Increase during
the period

Buildings

8,839(Note 1)
2,229

(Note 2)
1,194
[1,193]

577

9,297

3,082

Structures

599

70

24

54

590

319

2,475

(Note 1)
3,297

(Note 2)2,853
[2,827]

544

2,374

2,251

0

(Note 1)
2

0

0

4

Tools, furniture andfixtures2,239(Note 1)
2,495

917

3,350

4,900

Land

5,687

–

–

–

5,687

–

684

–

–

52

631

125

–

1,313

–

2,146

23,246

10,683

153

465

–

Type of assets

Machinery andequipment
Property,plant andequipment

VehiclesLeased assets
Construction inprogress

Decreaseduring theperiod(Note 2)
1
[1](Note 2)466
[446]

(Note 3)980
(Note 2)
5,521
[4,468](Note 2)
36
[1]

980

1,313

21,505(Note 1)
9,409

Software

389

265

Other

129

–

121

1

5

–

519

265

(Note 2)
158
[1]

154

471

–

Total

Intangible
assetsDepreci
ation
Balance at
Accumulated
during the end of thedepreciation
periodtheperiodTotal

Notes: 1. Increase during the period for buildings, machinery and equipment, vehicles, and tools, furniture and fixtures, ismainly due to the business of emergency maintenance of vaccine production system of ¥4,007 million.
2. The [ ] in decrease during the period is an internal number, which is tax purpose reduction entry for national
subsidies, etc.
3. Decrease during the period for construction in progress is mainly due to the reclassification of ¥933 million to theemergency maintenance of vaccine production system account from the construction in progress.

Detailed schedule of allowances

Category(Millions of yen)

Balance at the
beginning of theperiodIncrease during theperiodDecrease during the Balance at the end of
the period
periodAllowance for doubtful
accounts

1

1

1

1

Provision for bonuses

348

420

348

420

97

(2) Components of major assets and liabilities
This information has been omitted as the consolidated financial statements have been prepared.
(3) Other(i) Status after closing date
Not applicable.
(ii) Legal action
As of the submission of the Annual Securities Report, there is no significant legal action against theCompany.

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

From April 1 to March 31

Annual General Meeting of
Shareholders

June

Record date

March 31

Record dates for dividends ofsurplus

September 30
March 31

Number of shares per share unit

100 shares

Purchase of shares less than one
unit
Office for handling business

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

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

Special benefits for shareholders

Not applicable.

99

VII.

Reference information for reporting company

1. Information on parent company of reporting company
The Company has no parent company, etc. as stipulated by Article 24-7, paragraph 1 of the Financial
Instruments and Exchange Act.
2. Other reference information
The Company has submitted the following documents between the beginning of the current fiscal year andthe date of submission of the Annual Securities Report.
(1) Annual Securities Report, attached documents, and confirmation documents
Submitted for the 19th fiscal year (April 1, 2020 to March 31, 2021) to the Director-General of the
Kanto Local Finance Bureau on June 29, 2021.
(2) Internal controls report and attached documents
Submitted to the Director-General of the Kanto Local Finance Bureau on June 29, 2021.
(3) Quarterly reports and confirmation documents(Q1 of 20th fiscal year) (April 1, 2021 to June 30, 2021) Submitted to the Director-General of the Kanto
Local Finance Bureau on August 6, 2021.
(Q2 of 20th fiscal year) (July 1, 2021 to September 30, 2021) Submitted to the Director-General of the
Kanto Local Finance Bureau on November 12, 2021.
(Q3 of 20th fiscal year) (October 1, 2021 to December 31, 2021) Submitted to the Director-General of
the Kanto Local Finance Bureau on February 14, 2022.
(4) Temporary reports
Submitted to the Director-General of the Kanto Local Finance Bureau on June 30, 2021.
Temporary reports are based on Article 19, paragraph 2, No. 9-2 (Results of exercising voting rights inGeneral Meeting of Shareholders) of the Cabinet Office Order on Disclosure of Corporate Affairs.
(5) Revision report of Annual Securities Report and confirmation report
Submitted for the 19th fiscal year (April 1, 2020 to March 31, 2021) to the Director-General of the
Kanto Local Finance Bureau on June 15, 2022.

100

B. Information on insurance company, etc. of reporting company
Not applicable.

101