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

Securities Code: 4540
Date of sending by postal mail: June 8, 2023
Start date of measures for electronic provision: June 1, 2023
To Our Shareholders:
Terukazu Kato
President, Representative Director and CEO
TSUMURA & CO.
17-11 Akasaka 2-chome, Minato-ku, Tokyo

Notice of the 87th Ordinary General Meeting of Shareholders
We are pleased to announce that you are cordially invited to the 87th Ordinary General Meeting of
Shareholders of TSUMURA & CO. (the “Company”), which will be held as indicated below.
When the Company convenes a general meeting of shareholders, the Company takes measures forproviding information that constitutes the content of reference documents for the general meeting ofshareholders, etc. (matters subject to measures for electronic provision) in electronic format. The wholematters subject to measures for electronic provision are posted on the Company’s website, while a part ofthem is attached in writing to the written documents for shareholders’ convenience. Please access theCompany’s website by using the Internet address shown below to review the information.
[The Company’s website]
https://www.tsumura.co.jp/english/ir/shareholders/index.html* The materials are also available on the following websites.
Websites on which materials for the General Meeting of Shareholders are posted:
https://d.sokai.jp/4540/teiji/ (in Japanese)
Tokyo Stock Exchange (TSE) website (Listed Company Search):https://www2.jpx.co.jp/tseHpFront/JJK010010Action.do?Show=Show (in Japanese)(Access the TSE website by using the internet address shown above, enter “Tsumura” in “Issue name(company name)” or the Company’s securities code “4540” in “Code,” and click “Search.” Then, click“Basic information” and select “Documents for public inspection/PR information.” Under “Filed
information available for public inspection,” click “Click here for access” under “[Notice of General
Shareholders Meeting /Informational Materials for a General Shareholders Meeting].)”If you are unable to attend the meeting in person, you may exercise your voting rights via the Internet orin writing (by mail). Please review the Reference Documents for General Meeting of Shareholders andexercise your voting rights by 5:45 p.m. on Wednesday, June 28, 2023 (JST).

-1-1. Date and Time:Thursday, June 29, 2023, at 10:00 a.m.

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

3. Purpose of the Meeting
Matters to be reported
1. Business Report and Consolidated Financial Statements for the 87th fiscal year
(from April 1, 2022 to March 31, 2023), and results of audits of theConsolidated Financial Statements by the Accounting Auditor and the Audit
and Supervisory Committee
2. Non-consolidated Financial Statements for the 87th fiscal year (from April 1,
2022 to March 31, 2023)
Matters to be resolved
Proposal No. 1: Appropriation of Surplus
Proposal No. 2: Election of Six (6) Directors (Excluding Directors Who Are Audit andSupervisory Committee Members)
Proposal No. 3: Election of Three (3) Directors who are Audit and Supervisory Committee
Members
Proposal No. 4: Election of One (1) Substitute Director who is Audit and Supervisory Committee
MemberOther Matters Regarding the Exercise of Voting Rights■ If a voting card is received without giving any indication of approval or disapproval of any or all of the
proposals, it will be counted as a vote for the proposal concerned.
■ If you vote multiple times via the Internet indicating different positions on the same proposal in eachvoting exercise, only your most recent vote will count as valid.
■ If you exercise your voting rights both in writing and via the Internet, only the vote placed via theInternet will be treated as valid.
■ If you are unable to attend the general meeting of shareholders in person, you may appoint anothershareholder with voting rights in the Company to attend as your proxy. Please note, however, that it isnecessary to submit a document evidencing the authority of proxy.
◎ If revisions to the matters subject to measures for electronic provision arise, notice of the revisions
along with the matters before and after revision will be posted on the respective websites where they
are posted.
◎ In accordance with the provisions of laws and regulations and Article 15 of the Company’s Articles ofIncorporation, the following matters are excluded from the paper-based documents delivered toshareholders who have made a request for delivery of documents stating matters for which measuresfor providing information in electronic format are to be taken.
i) “Consolidated Statement of Changes in Equity” and “Notes to Consolidated Financial
Statements” sections of Consolidated Financial Statementsii) “Non-consolidated Statement of Changes in Equity” and “Notes to Non-consolidated Financial
Statements” sections of Non-consolidated Financial Statements
Accordingly, the consolidated financial statements and non-consolidated financial statements that areincluded in the paper-based documents are part of the documents included in the scope of audits by the
Accounting Auditor and the Audit and Supervisory Committee when they create their respective audit
reports.

-2-

Reference Documents for General Meeting of Shareholders
Proposal No. 1
Proposal No. 1: Appropriation of Surplus
The Company regards the return of profit to shareholders as its important policy. We will aim to achievesustained growth going forward while maintaining a policy to pay stable dividends, taking into
consideration such matters as medium- and long-term levels of earnings and cash flows.
The Company will allocate funds from internal reserves for investment in the areas such as capital
expenditure and research and development that are deemed to boost the future corporate value of theCompany.
In line with the aforementioned policy, the Company proposes to pay year-end dividends for the current
fiscal year as follows:■ Year-end dividends
1) Type of dividend property
Cash2) Allotment of dividend property and their aggregate amountThe Company proposes to pay a dividend of ¥32 per common share of the Company.
The total dividends will be ¥2,448,922,560.
3) Effective date of payment of dividends of surplus
June 30, 2023
<Trend of Dividends>(Note)

Concerning the dividends per share and the dividends payout ratio for FY2022 (fiscal year ended March 31,2023), matters concerning the dividends per share of common stock are being presented as a proposal of the87th Ordinary General Meeting of Shareholders and the figures shown here are based on the assumption that
this proposal is approved.

-3-

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

Name

1

Terukazu Kato

President, Representative
Director and CEO

Reelection

2

Kei Sugii

Director, Co-COO

Reelection

3

Muneki Handa

Director, CFO

Reelection

4

Hiroshi Miyake

Outside Director

Reelection

OutsideIndependent

5

Tadashi Okada

Outside Director

Reelection

OutsideIndependent

6

Ryohei Yanagi-

NewElection

OutsideIndependent

Current Position in the Company

-4-

1

Terukazu Kato
Date of Birth(Age 59)

August 26, 1963

Current Position in the Company

President, Representative Director andCEO

Reelection
To our shareholders
In pursuit of our business commitment of “Lively Living for Everyone,” our Corporate Purpose we aretrying to ultimately achieve, and our corporate philosophy “The Best of Nature and Science,” the TsumuraGroup will promote scientific analysis of mechanism of action in the field of traditional medicinesconstituted by plant-oriented crude drugs, and contribute to patient treatment based on evidences obtained
through basic and clinical studies.
April 10, 2023 marked the 130th anniversary of our foundation. We would like to express our sincere
appreciation to our shareholders, and ask for your continued support to us, as we aim to increase businessvalue and corporate value over the medium to long term.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1986
Aug. 2001
Jan. 2006
Apr. 2007
Jun. 2011
Jun. 2012
Jun. 2015
Jun. 2019■ Number of theCompany’s
Shares Owned
38,200 Shares

Joined the Company■ Status of
President and Representative Director, TSUMURA USA, INC.
attendance to
Head of Public Relations Department, TSUMURA & CO.
Board of
General Manager, Head of Corporate Communications Department, TSUMURA &DirectorsCO.
meeting: 18/18(100%)
Director and Executive Officer, Head of Corporate Communications Department,
TSUMURA & CO.
■ Material
relationship
President and Representative Director, TSUMURA & CO.
with in the
President and Representative Director and President and Executive Officer,
Company
TSUMURA & CO.
President, Representative Director and CEO, TSUMURA & CO. (incumbent)
None● Reasons for the nomination as a candidate for Director
As a chairman of the Board of Directors, Mr. Terukazu Kato has operated the Company’s corporate governance systemand strengthened it in several phases, and worked to structure the Board of Directors to have majority Outside Directors,
establish the Nomination/Remuneration Advisory Committee with an Outside Director as its committee chairman, andimprove the effectiveness of the Board of Directors, while successfully carrying out his responsibilities in making
important management decisions and supervising the execution of business.
In addition, he delegated business execution authority to COO (or Co-COO under to cooperative COO system) andfinalized the group-wide management policy as well as corporate strategy as CEO, established management system,
carried on external negotiations and made efforts in developing management-level human resources. In order for theCompany to implement the corporate philosophy stated in the corporate purpose, and pursue the aim of achieving
sustainable growth and enhancing its corporate value through the realization of the long-term management vision,
TSUMURA VISION “Cho-WA” 2031, the Board of Directors believes that he is one of the most well-qualified
candidates.
If his election as a Director is approved, Mr. Kato will assume the position of President, Representative Director and CEOof the Company.

-5-

2

Kei Sugii
Date of Birth(Age 53)

Current Position in the Company

Director, Co-COO

December 16, 1969

Reelection
To our shareholders
Celebrating the Group’s 130th anniversary in 2023, and having the keynote “Tradition and Innovation”
in mind as a creator of shared value with the sustainable society, we strive for the realization of its longterm management vision TSUMURA VISION “Cho-WA” 2031 and the achievement of the first mediumterm management plan.
Suffered from an unstable supply of certain products due mainly to the effect of COVID-19 pandemic
last year, we will establish a robust supply system this year in order to fulfill its responsibilities as a life
science company.
We hope that shareholders look forward to our future with the goal of realizing individualized treatmentthat is more closely tailored to individuals, and continue supporting us.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1994
Jan. 2006
May 2009
Apr. 2013
Apr. 2016
Apr. 2017
Apr. 2018
Apr. 2020
Apr. 2022
Jun. 2022■ Number of theCompany’s
Shares Owned
4,100 Shares

Joined Mitsubishi Petrochemical Engineering Corporation (currently MITSUBISHICHEMICAL ENGINEERING CORPORATION)■ Status ofattendance toJoined Accenture Japan Ltd
Board of
Joined the Company
Directors
Head of Logistics Planning Department, TSUMURA & CO.
meeting: 14/14(100%)
Head of SCM Planning Department, TSUMURA & CO.
General Manager, TSUMURA & CO.
■ Material
General Manager, SHENZHEN TSUMURA MEDICINE CO., LTD.
relationshipwith in the
General Manager, TSUMURA & CO.
Company
Chairman and General Manager, SHENZHEN TSUMURA MEDICINE CO., LTD.
Executive Officer, Head of Production Division, TSUMURA & CO.
Co-COO, TSUMURA & CO.
None
Director, Co-COO, TSUMURA & CO (incumbent)● Reasons for the nomination as a candidate for Director
Mr. Kei Sugii has extensive experience and insight accumulated through his work in a general consulting company. He
has served as Chairman and General Manager of the Company’s group company in China, and since April 2020, he has
acquired experience as Executive Officer, Head of Production Division. In addition, from April 2022, as Co-COO, he
has been engaged in group-wide business operation based on management policy and corporate strategy and has been
controlling the overall business execution to achieve the plan. In June 2022, he assumed the position of Co-COO. Basedon the above reasons, the Board of Directors has full confidence in his ability to carry out his responsibilities including
making important management decisions at the Board of Directors meetings and supervising the execution of business.
Therefore, the Board of Directors nominates him as a candidate for Director.
If his election as a Director is approved, Mr. Sugii will assume the position of Director, Co-COO of the Company.

-6-

3

Muneki Handa
Date of Birth(Age 60)

Current Position in the Company

Director, CFO

July 7, 1962

Reelection
To our shareholders
In Japan, while there is a sense of expectations for another growth as we have entered a post-pandemicera, we are still in a critical situation with souring resource prices and energy costs, among other factors.
The Company, in pursuit of the first medium-term management plan, will strive to realize further value
creation through making investments to support the infrastructure of growth and taking on challenges in a
new area, while further promoting the innovation of business including non-face-to-face/non-contact
operations on which the Company has already worked for some time, and the automation and streamliningof operations, among other things.
We will devote our utmost energies in improving the corporate value of the Company and meet the
expectations of our shareholders.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1985
Jun. 2014
Jun. 2015
Jun. 2016
May 2019
Jun. 2019
Apr. 2021

Joined The Mitsubishi Bank, Limited (currently MUFG Bank, Ltd.)
Executive Officer and Managing Director, Head, Retail Credit Division, The Bankof Tokyo-Mitsubishi UFJ, Ltd. (currently MUFG Bank, Ltd.)
Deputy President, Mitsubishi UFJ Capital Co., Ltd.
President, Mitsubishi UFJ Capital Co., Ltd.
Advisor, TSUMURA & CO.
Director, Managing Executive Officer and CFO, TSUMURA & CO.
Director, CFO, TSUMURA & CO. (incumbent)■ Number of theCompany’s
Shares Owned
8,000 Shares■ Status ofattendance to
Board ofDirectors
meeting: 18/18(100%)■ Material
relationshipwith in the
Company
None● Reasons for the nomination as a candidate for Director
Mr. Muneki Handa has extensive experience and insight through his many years of working at financial institutions, andserved as a representative director and president at a venture capital firm. He has executed business as the Executive
Officer in charge of corporate planning, accounting and finance, IT, and other aspects, and he possesses extensive insightof public relations, IR, and sustainability, etc. In addition, as CFO, he has executed business relating to group-wide
financial strategies, etc. and has formulated management plan based on management policy and corporate strategy.
Based on the above reasons, the Board of Directors has full confidence in his ability to carry out his responsibilities
including making important management decisions at the Board of Directors meetings and supervising the execution ofbusiness. Therefore, the Board of Directors nominates him as a candidate for Director.
If his election as a Director is approved, Mr. Handa will assume the position of Director, CFO of the Company.

-7-

4

Hiroshi Miyake
Date of Birth(Age 73)

Current Position in the Company

Outside Director

August 4, 1949

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

Joined Mitsubishi Corporation
General Manager, Paper & Packaging Raw Materials Division, Mitsubishi
Corporation
Apr. 2001
Deputy Division COO, General Merchandise Division, Mitsubishi Corporation
Apr. 2003
Deputy General Manager, Kansai Branch, Mitsubishi Corporation
Apr. 2005
Senior Vice President, Mitsubishi Corporation
President, Mitsubishi International GmbH, and Deputy Regional CEO for Europe
May 2009
Advisor, Tokai Pulp & Paper Co., Ltd.
Jun. 2009Managing Executive Officer, Tokushu Tokai Holdings Co., Ltd.
Jun. 2010
Senior Managing Executive Officer, Tokushu Tokai Paper Co., Ltd.
Jun. 2014
Director, Executive Vice President, Tokushu Tokai Paper Co., Ltd.
Jun. 2015
Representative Director, Executive Vice President, Tokushu Tokai Paper Co., Ltd.
Jun. 2016
Advisor, Tokushu Tokai Paper Co., Ltd.
Oct. 2016
Advisor, Nippon Tokai Industrial Paper Supply Co., Ltd.
Jun. 2018
Outside Director, TSUMURA & CO. (incumbent)■ Tenure as an Outside Director
At the conclusion of this general meeting, Mr. Miyake will have served in the position for five (5)years.

■ Number of theCompany’s
Shares Owned
2,500 Shares■ Status ofattendance to
Board ofDirectors
meeting: 18/18(100%)■ Material
relationshipwith in the
Company

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

-8-

5

Tadashi Okada
Date of Birth(Age 67)

Current Position in the Company

Outside Director

May 1, 1956

Reelection Outside Independent
To our shareholders
The Group has made a start for the first medium-term management plan toward a realization of its longterm management vision, TSUMURA VISION “Cho-WA” 2031. Even in an ever-changing management
environment, aiming for continuous growth and an increase in corporate value over the medium to longterm, the Company will engage in various measures and activities including proactive investment. In
particular, the Board of Directors considers the establishment of a sustainable and stable supply systemand the expansion and enhancement of the Chinese business to be the most important issue, in which theBoard will engage proactively. I will utilize my experience and knowledge to date to contribute toactivities concerning these issues. I will also continue working to strengthen the oversight function of theBoard of Directors for higher corporate governance.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1979
Apr. 2000
Apr. 2003
Apr. 2006
Apr. 2007■ Number of theCompany’s
Shares Owned
400 Shares

Joined Komatsu Ltd.
General Manager of Business Development Department, Komatsu Ltd.
■ Status ofVice President of Komatsu (China) Ltd.
attendance to
Board of
General Manager of Corporate Communications Department, Komatsu Ltd.
Directors
Executive Officer, General Manager of Corporate Communications Department,
meeting: 18/18
Komatsu Ltd.
(100%)
Apr. 2008
Executive Officer, General Manager of Corporate Planning Division, Komatsu Ltd.
■ Material
Feb. 2009
Executive Officer, Vice President of Industrial Machinery General Headquarters,
relationship
Komatsu Ltd.
with in the
Apr. 2011
Senior Executive Officer, President of Industrial Machinery Division, Komatsu
CompanyLtd.
Apr. 2014
Senior Executive Officer, Supervising Corporate Communications, CSR, General
Affairs, and Compliance, Komatsu Ltd.
Jun. 2017
Representative Director and Chairman of QUALICA Inc.
None
Jun. 2020
Outside Director, TSUMURA & CO. (incumbent)■ Tenure as an Outside Director
At the conclusion of this general meeting, Mr. Okada will have served in the position for three (3)years.
● Reasons for the nomination as a candidate for Outside Director and overview of expected role
Mr. Tadashi Okada has extensive experience and insight as a corporate manager developed over many years andbusiness experience in and outside Japan. In China, he served as a vice president of the China business headquarters of aconstruction machinery company. In addition, at the Company, he has fully performed his role, including making
important management decisions and supervising the execution of business. At the Board of Directors andNomination/Remuneration Advisory Committee, he proactively makes statements and deepens discussions contributing
to the sustainable enhancement of corporate value. Based on the above reasons, the Board of Directors has nominatedhim as a candidate for Outside Director and expects that he will continue to fulfill the above role after being elected. It isalso planned to appoint him as a member of the Nomination/Remuneration Advisory Committee again after his election.

-9-

6

Ryohei Yanagi
Date of Birth

New Election(Age 60)-

July 6, 1962

OutsideCurrent Position in the Company

Independent

To our shareholders
Tsumura is committed to a management based on its corporate purpose “Lively Living for Everyone,”with which I feel sympathy. It gives priority on both social value and economic value, which I believe willlead to a creation of shared value. My years of research and practice suggest that non-financial assets andcorporate value are positively related to each other. Toward the achievement of the shared value, I, as arepresentative of shared value for shareholders and other stakeholders, will draw my knowledge andexperience gained as a corporate financial officer and a visiting professor of a university, to contribute to afurther improvement in appropriate corporate governance and sustainable corporate value.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1985
Oct. 2003
Apr. 2005
Apr. 2007
Sep. 2009
Apr. 2013
Jun. 2015
Jun. 2019
Apr. 2022
Jun. 2022
Jul. 2022
Oct. 2022

Joined The Saitama Bank, Ltd. (The Asahi Bank, Ltd., currently Resona Bank,
Limited)Joined Eisai Co., Ltd.
General Manager of the Finance Dept., Eisai Co., Ltd.
Joined UBS Securities Japan Co., Ltd., Executive Director
Rejoined Eisai Co., Ltd., General Manager of the IR Dept.
Vice President, Deputy CFO & Chief IR Officer, Eisai Co., Ltd.
Senior Vice President & CFO, Eisai Co., Ltd.
Executive Vice President & CFO, Eisai Co., Ltd.
Visiting professor of Waseda University, Graduate School of Accountancy(incumbent)
Senior Advisor, Eisai Co., Ltd. (incumbent)
Executive Advisor, ABeam Consulting Ltd. (incumbent)
Deputy President, M&G Investments Japan Co., Ltd. (incumbent)■ Number of theCompany’s
Shares Owned
0 Shares■ Status ofattendance to
Board ofDirectors
meeting: ■ Material
relationshipwith in the
Company

None● Reasons for the nomination as a candidate for Outside Director and overview of expected role
Mr. Ryohei Yanagi is a developer of the “Yanagi Model” which indicates a link between non-financial assets andcorporate value, and has extensive experience and insights as a corporate financial officer and a visiting professor of auniversity for many years. In addition, the Company believes that he will enhance and accelerate disclosure of nonfinancial assets toward the creation of ESG and other value, and play a substantial role in the “visualization” of value oforganization and human capital, etc. Based on the above reasons, the Board of Directors has nominated him as a
candidate for Outside Director. The Board of Directors expects that he will continue to fulfill the above role after being
elected. It is also planned to appoint him as a member of the Nomination/Remuneration Advisory Committee after hiselection.
(Note 1)
(Note 2)
(Note 3)

The respective ages stated for each candidate are current as of June 29, 2023.
The status of attendance to the Board of Directors meeting stated for each candidate is based on data for fiscal
2022 (from April 1, 2022 to March 31, 2023).
For other notes regarding candidates, please refer to page 16.

- 10 -

Proposal No. 3
Proposal No. 3: Election of Three (3) Directors who are Audit and Supervisory Committee Members
The terms of office of all three (3) Directors who are Audit and Supervisory Committee Members will
expire at the conclusion of this general meeting.
Accordingly, the Company proposes to elect three (3) Directors who are Audit and Supervisory
Committee Members.
Prior to this proposal, the Company has already obtained the consent of the Audit and Supervisory
Committee.
The candidates for Directors who are Audit and Supervisory Committee Members are as follows:
Candidate
No.

Name

1

Tomihiro Nagafuchi

2

Mitsutoshi Matsushita

3

Akemi Mochizuki

Current Position in the Company
New
Election

Outside Director (Audit andSupervisory Committee
Member)Outside Director (Audit andSupervisory Committee
Member)- 11 -

Reelection Outside Independent

Reelection Outside Independent

1

Tomihiro Nagafuchi
Date of Birth(Age 58)

Current Position in the Company-

September 25, 1964

New Election
To our shareholders
Since the breakout of the COVID-19 disease, the global situation and the social environment havechanged rapidly, and the Company’s business environment has also changed significantly. In thesecircumstances, the Company has conducted sound corporate management by implementing the corporate
philosophy stated in the corporate purpose in order to fulfill its corporate mission. My audit philosophy isthat “even the best result can be denied by an error in the process to achieve it.” As a member of the Audit
and Supervisory Committee, I will devote my utmost energies from the perspective of whether
management’s decision-making and efficiency are appropriate and whether the internal control system isestablished and operated properly, in closely working to perform in-depth audit with outside Members of
the Audit and Supervisory Committee, and contributing to the development of more robust managementfoundation.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1987
Apr. 2014
Apr. 2023

Joined the Company
Head of the Internal Auditing Department, TSUMURA & CO.
General Manager, TSUMURA & CO. (incumbent)■ Number of theCompany’s
Shares Owned
2,700 Shares■ Status ofattendance to
Board ofDirectors
meeting: ■ Status ofattendance to
Audit andSupervisory
Committee
meeting: –■ Material
relationshipwith in the
Company
None● Reasons for the nomination as a candidate for Director
Mr. Tomihiro Nagafuchi has extensive business experience in the fields of internal auditing and internal control overmany years as Head of Internal Auditing Department of the Company. Independent and objective assurance andconsulting activities, risk management/control and governance, etc., require a wide range of insights including
effectiveness assessment and improvement of each of the processes. The Board of Directors has nominated him as a
candidate for Outside Director who is Audit and Supervisory Committee Member as he is well versed in the direction of
the Company’s businesses, and associated roles of internal auditing and internal control.

- 12 -

2

Mitsutoshi Matsushita
Date of Birth(Age 52)

October 3, 1970

Current Position in the Company

Outside Director (Audit andSupervisory Committee Member)

Reelection Outside Independent
To our shareholders
In April 2023, the Company has celebrated the 130th anniversary of its foundation. Since foundation,
our predecessors had conquered numerous difficulties in the “Spirit of Nature’s Laws.”
The Group is surrounded by a severe and volatile environment with soaring resource prices, global
uncertainties, transformation into a highly digitalized society, and climate change, among other factors.
The business in China is under way in a full scale, expecting to face unexperienced difficulties.
To address such difficulties in the “Spirit of Nature’s Law” to promote business, aiming for a sustainable
and stable growth, I will devote my utmost efforts as an Outside Director and an Audit and Supervisory
Committee Member.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1997■ Number of theCompany’s
Shares Owned
2,600 Shares

Registered as an attorney at law
Joined Kajitani Law Offices (incumbent)■ Status of
Jun. 2016
Outside Audit & Supervisory Board Member, PACIFIC SYSTEMS
attendance to
CORPORATION (incumbent)
Board ofDirectors
Jun. 2017
Outside Director (Audit and Supervisory Committee Member), TSUMURA & CO.
meeting: 18/18(incumbent)(100%)■ Tenure as an Outside Director
At the conclusion of this general meeting, Mr. Matsushita will have served in the position for six (6) ■ Status ofyears.
attendance to
Audit andSupervisory
Committee:
17/17 (100%)■ Material
relationshipwith in the
Company
None● Reasons for the nomination as a candidate for Outside Director who is Audit and Supervisory Committee Member andoverview of expected role
Mr. Mitsutoshi Matsushita has extensive experience and excellent insights as an attorney at law that is well versed incorporate legal affairs, is involved in the company management and has sufficient knowledge to oversee management.
Other than serving as an outside director, he has never been involved with corporate management. However, at the Boardof Directors and Nomination/Remuneration Advisory Committee, he proactively makes statements and deepens
discussions contributing to the enhancement of corporate value from both the aspects of taking on challenges and risk
management. Based on the above reasons, the Board of Directors has judged that he appropriately executes his duties inorder to ensure the soundness and appropriateness of decision-making associated with the Company’s management as wellas enhancing its transparency and has nominated him as a candidate for Outside Director who is Audit and Supervisory
Committee Member. The Board of Directors expects that he will continue to fulfill the above role after being elected. It isalso planned to appoint him as a member of the Nomination/Remuneration Advisory Committee again after his election.

- 13 -

3

Akemi Mochizuki
Date of Birth(Age 69)

June 10, 1954

Current Position in the Company

Outside Director (Audit andSupervisory Committee Member)

Reelection Outside Independent
To our shareholders
With increasingly uncertain and highly volatile environment surrounding the corporate sector recently,
and various internal and external risks, it has become ever more severe and difficult to control such risks.
Companies are required to take timely and appropriate actions in their corporate management.
Furthermore, the Company’s business has its own complex peculiarity as it depends on natural elements
and China. In these circumstances, I will devote my utmost efforts as an Outside Director from a delicate
and objective perspective to help the Company determine correctly what it should (or should not) do andwhen and how it should do in pursuit of an appropriate process toward its “business mission” which theCompany should accomplish, so that it may result in further improvement of corporate value.
■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Oct. 1984
Mar. 1988
Aug. 1996
Jun. 2001
Jul. 2018
Jun. 2019■ Number of theCompany’s
Shares Owned
1,900 Shares

Joined Aoyama Audit Corporation
Registered as a certified public accountant■ Status ofJoined Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)
attendance to
Board of
Partner, Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)
Directors
Partner, AKAHOSHI AUDIT CORPORATION (incumbent)
meeting: 18/18
Outside Director (Audit and Supervisory Committee Member), TSUMURA & CO.
(100%)(incumbent)■ Status of
Jun. 2021
Outside Corporate Auditor, Asahi Kasei Corp. (incumbent)
attendance toJul. 2022
Statutory Auditor (Part-time), SBI Holdings, Inc. (incumbent)
Audit and■ Tenure as an Outside Director
Supervisory
At the conclusion of this general meeting, Ms. Mochizuki will have served in the position for fourCommittee:(4) years.
17/17 (100%)■ Material
relationshipwith in the
Company
None● Reasons for the nomination as a candidate for Outside Director who is Audit and Supervisory Committee Member andoverview of expected role
Ms. Akemi Mochizuki has extensive experience and excellent insights as a certified public accountant that is well versed
in finance and accounting, is involved in the company management and has sufficient knowledge to oversee
management. Other than serving as an outside director, she has never been involved with corporate management.
However, at the Board of Directors and Nomination/Remuneration Advisory Committee, she proactively makes
statements and deepens discussions from the perspective of group governance. Based on the above reasons, the Board of
Directors has judged that she appropriately executes her duties in order to ensure the soundness and appropriateness ofdecision-making associated with the Company’s management as well as enhancing its transparency and has nominatedher as a candidate for Outside Director who is Audit and Supervisory Committee Member. The Board of Directors
expects that she will continue to fulfill the above role after being elected. It is also planned to appoint her as a member of
the Nomination/Remuneration Advisory Committee again after her election.
(Note 1)
(Note 2)
(Note 3)

The respective ages stated for each candidate are current as of June 29, 2023.
The status of attendance to the Board of Directors meeting and that to Audit and Supervisory Committee
meeting stated for each candidate are based on data for fiscal 2022 (from April 1, 2022 to March 31, 2023).
For other notes regarding candidates, please refer to page 16.

- 14 -

Proposal No. 4
Proposal No. 4: Election of One (1) Substitute Director who is Audit and Supervisory Committee Member
The effective term of substitute Director who is Audit and Supervisory Committee Member Ms. Seiko
Noda, who was elected at the 85th Ordinary General Meeting of Shareholders held on June 29, 2021, will
expire at the beginning of this General Meeting of Shareholders. In preparation for lacking the number of
Directors who are Audit and Supervisory Committee Members stipulated by laws and regulations, theCompany proposes to elect one (1) substitute Director who is Audit and Supervisory Committee Member.
Note that the effectiveness of election of the substitute Director who is Audit and Supervisory Committee
Member may be rescinded by a resolution of the Board of Directors if the consent of the Audit andSupervisory Committee has been obtained, only before the assumption of office.
Prior to this proposal, the Company has already obtained the consent of the Audit and Supervisory
Committee.
The candidate for substitute Director who is Audit and Supervisory Committee Member is as follows:

Chieko Tsuchiya
Date of Birth(Age 52)January 27, 1971

OutsideIndependent■ Career summary, position and responsibility in the Company, and major positions held outside theCompany
Apr. 1993
Oct. 2001

Apr. 2006
Sep. 2012
Apr. 2015
Apr. 2016
Jan. 2019
Sep. 2021

Joined Citibank, N.A.
Registered as an attorney at law
Joined Law Offices of Hideyuki Sakai (Bingham Sakai Mimura Aizawa (foreign
law joint enterprise))
Registered as an attorney in New York State
Legal Officer, International Atomic Energy Agency (IAEA)
Joined Anderson Mori & Tomotsune
Part-time Judge of Tokyo Family Court (Domestic Relations Conciliator)
Special Counsel, Anderson Mori & Tomotsune (incumbent)
Consultant, Tilleke & Gibbins International Ltd. (Thailand)■ Number of theCompany’s
Shares Owned
0 Shares■ Material
relationshipwith in the
Company

None● Reasons for the nomination as a candidate for substitute Outside Director who is Audit and Supervisory Committee
Member and overview of expected role
Ms. Chieko Tsuchiya is well versed in corporate legal affairs as an attorney at law, and, through the engagement intransactions between global companies, etc., has sufficient knowledge to oversee corporate management. Although she
has never been involved with corporate management, the Board of Directors has judged that she appropriately executes
her duties in order to ensure the soundness and appropriateness of decision-making associated with the Company’s
management as well as enhancing its transparency and has nominated her as a candidate for substitute Outside Director
who is Audit and Supervisory Committee Member.
(Note 1)
(Note 2)

The age stated for the candidate is current as of June 29, 2023.
For other notes regarding the candidate, please refer to page 16 and 17.

- 15 -

■ The candidate for Director
1. Independent officer
The Company has deemed that the candidate for Outside Director has a high degree of independence because he/shesatisfies the Company’s Standards for Determination of Independence of Outside Directors.
The Company has submitted notification to Tokyo Stock Exchange, Inc. that the candidate has been appointed as anindependent officer as provided for in Article 436-2 of the Securities Listing Regulations of the aforementioned
exchange. Moreover, the newly nominated candidate for Outside Director also satisfies the criteria for independent
officers stipulated by the Tokyo Stock Exchange and the Company’s Standards for Determination of Independence. If
the candidate’s election is approved, the Company plans to submit notification that the candidate has been appointed as
an independent officer.
2. Entering into a limited liability agreement
Pursuant to Article 427, paragraph 1 of the Companies Act and the Company’s Articles of Incorporation, the Company
has entered into an agreement with the candidate for Outside Director to limit his/her liability for damages arising fromneglecting his/her duties under Article 423, paragraph 1 of the Companies Act. The limit under the agreement is theamount provided for by the applicable laws and regulations. If the candidates for Outside Director are elected, theCompany plans to renew the aforementioned limited liability agreement.
3. Entering into a directors and officers liability insurance policy
Pursuant to Article 430-3, paragraph 1 of the Companies Act, the Company has entered into a directors and officers
liability insurance policy with an insurance company. The policy covers losses, such as amount of indemnification andcourt costs, incurred in cases where an insured receives claims for damages from shareholders, the Company,
employees or third parties during the insurance period arising from the performance of the Company’s duties of theinsured. The insureds in the policy are Directors, Executive Officers, and Officers, etc. of Group companies who havebeen seconded or dispatched from the Company. The insurance premiums are covered entirely by the Company and its
Group companies. If each candidate for Director’s election is approved, they will become insureds under the policy,
and the Company plans to renew the policy with each candidate on July 1, 2023.

■ The candidate for Director who is Audit and Supervisory Committee Member
1. Independent officer
The Company has deemed that the candidate for Outside Director who is Audit and Supervisory Committee Member
has a high degree of independence because he/she satisfies the Company’s Standards for Determination of
Independence of Outside Directors.
The Company has submitted notification to Tokyo Stock Exchange, Inc. that the candidate has been appointed as anindependent officer as provided for in Article 436-2 of the Securities Listing Regulations of the aforementioned
exchange.
2. Entering into a limited liability agreement
Pursuant to Article 427, paragraph 1 of the Companies Act and the Company’s Articles of Incorporation, the Company
has entered into an agreement with the candidate for Director who is Audit and Supervisory Committee Member tolimit his/her liability for damages arising from neglecting his/her duties under Article 423, paragraph 1 of theCompanies Act. The limit under the agreement is the amount provided for by the applicable laws and regulations. If thecandidates for Director who is Audit and Supervisory Committee Member are elected, the Company plans to enter the
aforementioned limited liability agreement with them.
3. Entering into a directors and officers liability insurance policy
Pursuant to Article 430-3, paragraph 1 of the Companies Act, the Company has entered into a directors and officers
liability insurance policy with an insurance company. The policy covers losses, such as amount of indemnification andcourt costs, incurred in cases where an insured receives claims for damages from shareholders, the Company,
employees or third parties during the insurance period arising from the performance of the Company’s duties of theinsured. The insureds in the policy are Directors, Executive Officers, and Officers, etc. of Group companies who havebeen seconded or dispatched from the Company. The insurance premiums are covered entirely by the Company and its
Group companies. If each candidate for Director’s election is approved, they will become insureds under the policy,
and the Company plans to renew the policy with each candidate on July 1, 2023.

■ The candidate for substitute Director who is Audit and Supervisory Committee Member
1. Independent officer
The Company has deemed that the candidate for substitute Director who is Audit and Supervisory Committee Member
has a high degree of independence because he/she satisfies the Company’s Standards for Determination of
Independence of Outside Directors. If the candidate for Director is elected as a Director who is Audit and Supervisory
Committee Member, the Company plans to submit notification to Tokyo Stock Exchange, Inc. that the candidate has
been appointed as an independent officer.
2. Entering into a limited liability agreement
If the candidate for substitute Director who is Audit and Supervisory Committee Member assumes the position of- 16 -

Director who is Audit and Supervisory Committee Member, the Company plans to enter into an agreement with thecandidate pursuant to Article 427, paragraph 1 of the Companies Act and the Company’s Articles of Incorporation tolimit his/her liability for damages arising from neglecting his/her duties under Article 423, paragraph 1 of theCompanies Act. The limit under the agreement is the amount provided for by the applicable laws and regulations.
3. Entering into a directors and officers liability insurance policy
Pursuant to Article 430-3, paragraph 1 of the Companies Act, the Company has entered into a directors and officers
liability insurance policy with an insurance company. The policy covers losses, such as amount of indemnification andcourt costs, incurred in cases where an insured receives claims for damages from shareholders, the Company,
employees or third parties during the insurance period arising from the performance of the Company’s duties of theinsured. The insureds in the policy are Directors, Executive Officers, and Officers, etc. of Group companies who havebeen seconded or dispatched from the Company. The insurance premiums are covered entirely by the Company and its
Group companies. If the candidate is elected as Director who is Audit and Supervisory Committee Member, theCompany plans to include the candidate as an insured under the policy.

- 17 -

(Reference)
Standards for Determination of Independence
Outside Directors who do not fall under any of the following items shall be determined to have
independence.
1. Person who is or was in the past ten (10) years an Executive Director, Executive Officer(Shikkoyaku), Executive Officer (Shikkoyakuin), Manager, General Manager, employee, etc.
(hereinafter referred to as “executives”) of the Company or its consolidated subsidiaries
2. Person or executives of a legal entity holding, whether directly or indirectly, 10% or more of thetotal number of voting rights of the Company
3. Party for whom the Company or its consolidated subsidiaries (*1) is a major business partner or
executives of such party*1. A party receiving payment from the Company or its consolidated subsidiaries equivalent to 2%
or more of its annual net sales (non-consolidated) or monetary finance from the Company or
its consolidated subsidiaries equivalent to 2% or more of its consolidated total assets in themost recent fiscal year.
4. Major business partner of the Company or its consolidated subsidiaries (*2) or the executives of suchbusiness partner*2. A business partner from whom the Company or its consolidated subsidiaries receives payment
equivalent to 2% or more of the Company’s annual net sales or monetary finance equivalent to
2% or more of the Company’s consolidated total assets in the most recent fiscal year.
5. Audit corporation that serves as Accounting Auditor of the Company or its consolidated subsidiaries,
or partners and others of the audit corporation
6. Consultant, attorney, certified public accountant and others who provide professional services andobtain monetary and other financial benefits exceeding a cumulative amount of ¥10 million in themost recent fiscal year from the Company, excluding officer compensation
7. Person or executives of a legal entity receiving donations, grants and others in the amount exceeding¥10 million from the Company or its consolidated subsidiaries in the most recent fiscal year
8. Person to whom items 2 through 7 apply during the past three (3) years
9. Person who is or was recently a spouse or within a second degree of consanguinity (hereinafterreferred to as “close relative”) of executives in an important position of the Company or its
consolidated subsidiaries
10. Close relative of a person to whom any of the items 2 through 7 apply (excluding people who are notin an important position)- 18 -

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

- 19 -

(Reference) Skill Matrix of the Company’s Board of Directors
We have selected the following skills that the Board of Directors needs in order to carry out the decisionmaking and management supervisory function for achieving the long-term management vision,
TSUMURA VISION “Cho-WA” 2031. If Proposals No. 2 and No. 3 are approved as originally proposed at
this Ordinary General Meeting of Shareholders, the composition of the Board of Directors and the skills
possessed by each Director and Audit and Supervisory Committee Member will be as follows:
Name

Gender

Terukazu
Kato
Kei Sugii

Directors

Muneki
Handa
HiroshiMiyakeTadashi
Okada
Ryohei

Directors who are Audit and Supervisory
Committee Members

YanagiTomihiro
Nagafuchi

Age

OutsideCorporate

Independent

Management

Global

59

●

●

53

●

●

60

●

Sales/

SDGs

marketing

ESG

●

●

●

●

●

●

●

●

●

●

●

●

●

●

73

〇

●

●

67

〇

●

●

●

60

〇

●

●

●

58

IT

Financial

Legal risk

accounting

management

●

●

●

●

Mitsutoshi
Matsushita(attorney at

52

〇

69

〇

●

law)
Akemi
Mochizuki(certified●

publicaccountant)
Represents male

Represents female- 20 -

management

●

●

●

Human
resources●

Requirements for skill items
Corporate
Management

Person who has experienced executive officer
at listed companies, or has insights andexperience necessary for the formulation ofbusiness strategies and has the ability to offer
adviceIT

Person who has insights in IT technologies,
etc., and has the ability to recognize achallenge and propose solutions toward
digitalization

GlobalPerson who has experienced overseas business
management, and has insights and experience
regarding global corporate management

Financialaccounting

Person who has insights and experience offinance and accounting, person who has
operational experience in financial
institutions, or person who is qualified as acertified public accountant or a tax
accountant

Sales/marketing

Person who has insights and experience
regarding sales and marketing, person who iswell-versed in the pharmaceutical industry andhas the ability to offer appropriate advice onmarketing

Legal risk
management

Person who has experienced risk
management and has insights andexperience of legal affairs and risks, or who
is qualified as an attorney

Person who has insights and experience inhandling climate change and otherenvironmental issues, person who has insights
and experience regarding expertise ofdiversity, CSR, CSV, and corporate
governance, etc.

Human resourcesmanagement

Person who has experienced the formulationof human resources strategies, and has
insights and experience regarding the fieldof human resources development

SDGs
ESG

- 21 -

(Reference)
Corporate Governance of Tsumura
Basic Policy
The Tsumura Group is committed to abiding by what we call the “Spirit of Nature’s Laws” and fulfilling ourultimate purpose of facilitating “Lively Living for Everyone.” In conducting our business, we are guided bythese two tenets along with our management philosophy, expressed as the “Best of Nature and Science,” andcorporate mission: “To contribute to the unparalleled medical therapeutic power of the combination of
Kampo medicine and Western medicine.” To achieve sustainable growth and increase our corporate value
over the medium to long term, our basic policy is to strengthen our corporate governance in order to ensure
sound, transparent, and fair management and make prompt and sound decisions.
In June 2017, Tsumura transitioned from the Company with Company Auditor(s) system described in the
Companies Act of Japan to the Company with Audit and Supervisory Committee system. This move wasaimed at reinforcing the oversight and monitoring functions of the Board of Directors. Under this system,
Tsumura is working to enhance its management supervisory function and innovate its management structureby separating the supervisory function from the executive function and by appointing a majority of Outside
Directors to the Board of Directors. These measures are being implemented to continuously establish thesystems that will enable the Company to ensure the transparency, improve the efficiency, and maintain thesoundness of management.
Overview of Corporate Governance Systems(Note) The above shows the system in place as of the end of fiscal 2022.
Please see our Integrated Report for details of corporate governance.
- 22 -

Board of Directors
The Board of Directors makes important decisions to ensure sustainable growth and enhance corporate
value over the medium-to-long term. The Company aims to accelerate decision-making by separating
business execution functions from the Board of Directors. At the same time, we are strengthening thesupervisory function of general management by appointing Outside Directors to comprise the majorityof the Board of Directors and appropriately reflecting their objective views from an independent
perspective as experts with extensive experience.
<Main matters during the 87th fiscal year> Checking the progress of the first medium-term management plan; Monitoring and following-up the progress of the Chinese business;
 Development of management human resources who will embody the corporate purpose andphilosophy;
 Checking the progress of strategic investment deals (Investment in systems including facilities, R&D,
M&A, and digital transformation , etc.);
 Evaluating the effectiveness of the Board of Directors and establishing priority themes;
 Discussion on enhancing corporate governance of Group companies; and Enhancement of information disclosure, etc.
Nomination / Remuneration Advisory Committee
The Nomination/Remuneration Advisory Committee is a voluntarily established advisory body to theBoard of Directors. The committee is composed of a majority of Outside Directors who have also been
designated as independent directors as stipulated by the Tokyo Stock Exchange (including one Outside
Director who is a member of the Audit and Supervisory Committee). These Outside Directors provide
advice on matters related to the nomination and remuneration of Directors and Executive Officers basedon inquiries by the Board of Directors and also submit reports to the Board of Directors on thesesubjects. The committee is composed of six (6) members, five (5) of whom, including the committee
chairman, are Outside Directors who have also been designated as the independent directors.
<Main matters during the 87th fiscal year> Proposal of election and dismissal of Directors to be submitted to the General Meeting of Shareholders; Draft proposals of election and dismissal of the Representative Director to be submitted to the Board of
Directors;
 Draft proposals of candidates for Executive Officers to be submitted to the Board of Directors;
 Polices for electing Directors and Executive Officers, election process; Draft proposals for individual remuneration to be paid to Directors and Executive Officers; and Policy including the composition of Directors’ remuneration, procedure for determining remunerationof Directors, etc.

- 23 -

Audit and Supervisory Committee
The Audit and Supervisory Committee audits legality and adequacy of the execution of duties byDirectors by conducting systematic audits in cooperation with Internal Auditing Department, and the
Audit and Supervisory Committee itself holds hearings on the status of business execution with
Executive Officers, attends meetings of the Executive Committee and other important meetings,
exchanges information with Directors and Auditors of the Group companies and monitors and verifies
the establishment and implementation of internal control systems, including those related to financial
reporting.
<Main matters during the 87th fiscal year> Audit policy and plan; Reelection and remuneration of audit corporation;
 Details of matters to be submitted to the General Meeting of Shareholders; Preparation of audit report; and Status of the use of hotline, etc.
Outside Directors’ Meeting
The Outside Directors’ Meeting collects and shares the information necessary for management
decision-making. At the same time, it acts as a venue for the exchange of opinions regarding thenecessity of discussions and other matters with the Board of Directors.
<Main matters during the 87th fiscal year> Advance explanation about matters to be discussed at the Board of Directors;
 Follow-up on the Board effectiveness evaluation;
 Briefing on Executive Committee matters; Progress report of Chinese business; and Discussion of important matters, etc.
(Note)

The above shows the system in place as of the end of fiscal 2022.

- 24 -

(Reference)
Evaluation of effectiveness of Board of Directors
The Company evaluates and analyzes the effectiveness of the Board of Directors every fiscal year for the
purpose of enhancing the Board of Directors’ effectiveness.
The Company shifted to a company with an Audit and Supervisory Committee in 2017 to strengthen the
supervisory function of the Board of Directors and further enhance the soundness and transparency ofmanagement. We have put in place a system that enables swift and resolute decision-making by separating
the business execution function from the Board of Directors. Therefore, from the perspective of strengthening
the supervisory and monitoring functions of the Board of Directors, we are working to ensure continuous
improvement with respect to the issues identified through the analysis of the results of the evaluation of theeffectiveness of the Board of Directors and are endeavoring to further improve the effectiveness of the Boardof Directors.
Regarding the effectiveness of the Board of Directors in fiscal 2021, a questionnaire evaluation was
conducted for all nine Directors, and the issues identified and specific measures for addressing them werediscussed at the Board of Directors meeting held in May 2022. We designed the questionnaire in house thisyear. We believe that we were able to conduct a more objective evaluation and analysis by utilizing an
external organization to collect responses and compile the result, while securing confidentiality.
1. Details of evaluation (6 categories, 25 items)
The evaluation for fiscal 2021 was conducted from the perspectives of confirming the status of efforts toaddress issues identified in the results of the analysis of the previous year’s effectiveness evaluation,
confirming the themes that require priority supervision in order for the Board of Directors to fulfill its role,and identifying issues and considering measures for addressing them so as to further improve effectivenessin the future.
(1) Priority management themes(2) Composition of the Board of Directors(3) Roles and duties of the Board of Directors(4) Proceedings of the Board of Directors(5) Enhancement of discussions at meetings of the Board of Directors and of provision of information(6) Relationship between the Board of Directors and shareholders and other stakeholders
2 Overview of evaluation result
As a result of this year’s analysis and evaluation, it was confirmed that the Board of Directors is fulfilling its
role and function, with active discussions aimed at ensuring substantial supervision and monitoring ofbusiness execution.
In the effectiveness evaluation questionnaire for each Director, a certain percentage of the respondents
answered “accomplishing sufficiently” or “accomplishing overall” to many of the questions.
Improvement was seen in all items to be focused on in the previous fiscal year as priority issues.
<Reviewing the Board effectiveness in FY2021>
1. As for the composition of the Board of Directors, the number is appropriate for active discussion andexchange of opinions. In addition, the Board of Directors is composed of diverse members with various
types of experience and expertise, which is required for matters to be properly discussed at the Board of
Directors meetings. Furthermore, the Board of Directors operates in an atmosphere that encourages thefrank, free, and open expression opinions.
2. Based on the Group’s basic principles, the Board of Directors assessed the status of the realization of thelong-term management vision for the period from fiscal 2012 to fiscal 2021 and the achievement of the- 25 -

goals of the third medium-term management plan for the period from fiscal 2019 to fiscal 2021. Afterconfirming the future long-term management direction and priority issues, it engaged in discussions
toward the formulation of a new vision to be accomplished by fiscal 2031.
3. As Chinese operations constitute a strategic challenge with high level of importance for our sustainablegrowth and the enhancement of our corporate value over the medium to long term, the activities of Chinese
operations have been regularly reported to the Board of Directors. At the Board, discussions have been
held concerning policies, plans and strategies for the operations, and resolutions have been passed on
important matters.
<The status of efforts to address the issues identified in the previous fiscal year>
1. With regard to the governance of Group companies, as the scale of their businesses and their organizations
expand particularly in Chinese operations through, for example, M&A activity, we are striving tostrengthen the governance system of our Group companies in China by establishing a governance system
to supervise the execution status of each Group company, centered on Tsumura China Inc., the company
that controls all our operations in China, and by strengthening supervision and monitoring by the Boardof Directors .
2. Regarding climate change, we should always be most sensitive to changes and critical factors of naturalenvironment in order for the Group, a dealer of crude drugs, a natural blessing, to grow sustainably. The
Board of Directors makes important decisions to respond to risks and opportunities including climatechange, and ensure sustainable growth and enhance corporate value over the medium to long term of the
Tsumura Group. In fiscal 2021, the Sustainability Committee which is directed and supervised by the
Board was established, and the Sustainability Promotion Office was also newly established. Matters
examined at the Sustainability Committee were reported to the Board of Directors periodically, and theBoard formulated the Sustainability Vision including action plan after a lot of discussions.
3. With respect to the enhancement of information disclosure, we, among others, hold financial results
briefings quarterly and 1-to-1 meetings with analysts and investors, and issue IR materials for overseas
institutional investors to increase opportunities for dialogue, while fostering an environment for
information dissemination with a wide range of stakeholders, including general consumers, in mind. Aspart of the effort to improve and enhance disclosure, we held a new vision presentation in the end of March
2022, etc.
Issues and Response Measures
Based on the results of this effectiveness evaluation, we will take the following measures to further
improve the effectiveness of the Board of Directors.
1.

As for the Chinese operations, to implement M&A aimed at developing the foundation of the
traditional Chinese medicines business, the process of M&A is also reported to the Board of
Directors periodically in order to tighten oversight and speed up the decision-making of the Board.

2.

We strive to secure and develop human resources of Chinese group companies and establish agovernance system to supervise the execution status of each Group company, centered on Tsumura
China Inc., the company that controls all our operations in China, to strengthen the governance ofthe entire Group. In addition, we will strengthen the supervision and monitoring of the Board of
Directors by, for example, establishing and implementing the system based on the three-lines-ofdefense approach.

In this fiscal year also, we will be focusing on tackling five items as key management issues.
The Company will continue to implement PDCA cycle with the aim of realizing further improvements inthe effectiveness of its Board of Directors.

- 26 -