CSR Policy 5: Governance—Fair corporate activities
We will ensure the soundness, fairness, and transparency of management andbecome a reliable partner for society.

[Corporate governance]
Basic approach
As a listed company, we respect the following five basic principles of corporate governance. We will
expand management monitoring functions and reinforce compliance, while working towards sustainablegrowth and maximizing our corporate value by making accurate and quick management decisions andensuring timely and appropriate performance of duties.
(1) Protect shareholder rights and ensure equality(2) Build smooth relationships with stakeholders(3) Create a comfortable work environment for employees(4) Ensure timely and appropriate information disclosure and transparency(5) Enhance management supervision and ensure accountability to shareholders of the Board of
Directors and the Audit and Supervisory Board
SDGs that we are targeting

Promotion system and governance
The Company adopted the Audit and Supervisory Board corporate governance system under theCompanies Act of Japan. The Board of Directors makes important management decisions and supervises
business execution, while auditors and the Audit and Supervisory Board, which are independent of theBoard of Directors, audit the status of business execution by the Board of Directors, and so on. We havealso adopted the executive officer system and the group executive officer system to promote
appropriate division of roles between management and business execution, accelerate management
decision-making, and strengthen business execution functions.
Furthermore, we have established three voluntary organs: the Strategy Committee, Appointment
Committee, and Compensation Committee. The Strategy Committee was established for the purpose of
dynamically deliberating on the development of business strategies and on the execution of businesses,
including important matters related to the management of the Group. The Appointment Committee andthe Compensation Committee were established for the purpose of ensuring transparency and objectivity
in relation to the nomination of director candidates and decisions on directors’ compensation.

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Copyright© T. HASEGAWA CO., LTD. All rights reserved

The outline of our corporate governance structure is shown in the following chart.
General Meeting of Shareholders
Nominate / Dismiss

Appointment
Committee
Compensation
Committee

AdviseExchange information/ opinions

Nominate / Dismiss
ReportPresident & CEO

Nominate / Dismiss

Nominate /Dismiss

Audit & Supervisory
Board(Corporate Auditors)

Participate
Audit / Monitor

Board of Directors(Directors)

ReportNominate / Dismiss

Participate Participate

Participate

Strategy Meeting
Instruct

Fulltime Auditors

Audit / Monitor

Accounting Auditor

Participate

Senior vice presidents (officers in charge/responsible officers),
senior vice presidents of Group companies

ReportExchange
information /opinions

Instruct

Business execution

Auditing

Exchange information/ opinions

Internal audits

People in charge of operations

Audit

Diversity of directors and auditors
To achieve corporate governance that will serve as the foundation of a highly reliable and transparent
management system, the Group ensures diversity in the nomination of directors and auditors. For bothinternal and external candidates, we take into account various factors in the nomination of candidates,
including personality, insight, knowledge in various fields, experience, career, gender, and age. As
stipulated in the Articles of Incorporation, we appoint the appropriate number of directors (up to 10) to
enable active deliberation, consideration, and rapid decision-making.

Skill matrix of directors and auditors
Particularly important skills among the expertise we require
Name

Title/post

Corporate
management
Businessstrategy

ESG
Sustainability

Quality

Sales
Marketing





















Takao Umino

M

Yoshiaki Chino

M

Minoru Nakamura

M

Tetsuya Nakamura

M

Koichiro KatoM

Shingo Ohkado

M

President & CEO
Representative Director &Deputy President
Director & Senior Executive
Vice President
Director & Executive Vice
President
Director & Executive Vice
President
Outside Director

Takao Yuhara

M

Outside DirectorFOutside Director
Full Time Audit &Supervisory Board Member
Outside Audit &Supervisory Board Member
Outside Audit &Supervisory Board Member
Outside Audit &Supervisory Board MemberAkiko Izumi
Takehiro
Matsumoto

M

Tomoyoshi Arita

M

Kazuhito
YamamuraM

Junko Imura

F

R&D

Production

Accounting
Finance





















































Human
Legal affairs
resources
Compliance
Human
Risk
resource
management
development

OverseasstrategyInternational



















* M: male; F: female

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Copyright© T. HASEGAWA CO., LTD. All rights reservedSuccession plan
The Group realizes that the planned development of successors to the President & CEO is important as abusiness strategy to continue to improve our corporate value in the future. In accordance with the Basic
Policy on Corporate Governance, we are working to develop successors in a planned manner so thatcandidates can gain experience while participating in management through business execution andattending important meetings, including Board of Directors’ meetings and Strategic Meetings, tocultivate the abilities, experience, knowledge, skills, and so on necessary to serve as a President & CEO.
In addition, in order to ensure transparency and objectivity in relation to the nomination of President &CEO candidates, relevant details are deliberated in the Appointment Committee, a voluntary committee
comprised of the representative director and a majority of independent outside directors, and chairedby an independent outside director, before they are reported to the Board of Directors. Based on reports
and advice from the Appointment Committee, the Board of Directors continues to supervise the overall
efforts for developing successors.
Officer remuneration
The Company determined the policy on decisions regarding the remuneration, etc., of individual
directors during a Board of Directors’ meeting held on April 16, 2021.

Policy on decisions regarding the remuneration, etc., of individual directors

a. Basic policy
As the basic policy for the remuneration, etc., of the Company’s directors, the remuneration systemshall also be linked to shareholder returns so that it will adequately function as an incentive toincrease motivation and morale for improving shareholder value and to continue to improve
corporate value. Furthermore, the remuneration, etc., of individual directors shall be set at theappropriate level in light of their duties.
Specifically, the remuneration, etc., of internal directors shall include basic remuneration as fixed
remuneration, bonus as performance-linked remuneration, and stock-based compensation stock
option as non-monetary remuneration. The remuneration, etc., of outside directors shall be paid only
as basic remuneration in light of their duties.
b. Policy on decisions regarding the basic remuneration (monetary remuneration), etc., of individuals(including the policy on deciding the time or conditions for granting remuneration, etc.)
As the fixed remuneration of the Company’s directors, basic remuneration shall be paid at a certain
time every month.
The amount of remuneration payment for individual directors pertaining to basic remuneration (fixed
remuneration) shall be determined based on the corresponding level for the position within the
remuneration limit approved by the resolution of the General Meeting of Shareholders while taking
into consideration the performance, financial condition, economic situation, market level, etc.
c. Policy on decisions regarding the details of performance-linked remuneration, etc., and non-monetary
remuneration, etc., and the calculation method for the amount or number thereof(including the policy on deciding the time or conditions for granting remuneration, etc.)
The upper limit for the total amount of bonus payment, which is performance-linked remuneration,
shall be determined within the remuneration limit approved by the resolution of the General Meeting53
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of Shareholders. With consolidated ordinary profit as the indicator for performance-linked
remuneration, the payment amount shall be calculated by multiplying the payment unit (which is
obtained by multiplying the incentive corresponding to the rate of achievement of the consolidated
ordinary profit plan) with the factor corresponding to the position of the director, while taking into
account the performance evaluation of the director. This payment shall be made at a certain time
every year.
Note that consolidated ordinary profit represents profit from overall management activities and isconsidered appropriate as an indicator to evaluate the performance of duties of directors. Therefore,
consolidated ordinary profit shall be used as the indicator pertaining to performance-linked
remuneration.

d. Policy on decisions regarding the details of non-monetary remuneration, etc., and the calculation
method for the amount or number thereof (including the policy on deciding the time or conditions for
granting remuneration, etc.)
As a stock-based compensation stock option, which is non-monetary remuneration, a share optionthat is granted by exercising the right at one yen for one share shall be granted once every year as arule. Note that the number of options granted shall be determined based on the standard
corresponding to the position within the remuneration limit approved by the resolution of theGeneral Meeting of Shareholders.

e. Policy on decisions regarding the rate of the amount of fixed remuneration, performance-based
remuneration, etc., or non-monetary remuneration, etc., to the amount of remuneration, etc., ofindividual directors
The remuneration, etc., of internal directors shall include basic remuneration (fixed remuneration),bonus (performance-linked remuneration), and stock-based compensation stock option (nonmonetary remuneration). The remuneration, etc., of outside directors shall only include basic
remuneration.
The rate of payment of the remuneration of internal directors shall be set at the appropriate rate sothat it will adequately function as an incentive to increase motivation and morale for improving
shareholder value and to continue to improve corporate value, while taking into consideration thepost, duties, and trends of other companies with the same business scale as the Company, etc., in acomprehensive manner.
f.

Matters related to decisions regarding the remuneration, etc., of individual directors
The amount of remuneration, etc., of individual directors shall be determined by the Board of
Directors’ meeting within the remuneration limit approved by the General Meeting of Shareholders inlight of the details of the deliberation at the Compensation Committee, a voluntary committee. Notethat the Compensation Committee shall include the representative director and outside directors toensure the transparency and objectivity of decisions pertaining to remuneration.

Evaluation of the effectiveness of the Board of Directors
The Board of Directors of the Company analyzes and evaluates the effectiveness of the Board and discloses
an overview of the results every year.

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PDCA cycle for improving the effectiveness of the Board of Directors
All directors &corporate auditors Survey

Meeting of independent
officers

Deliberated by
the Board of Directors

Improvement strategy evaluation andimplementation towards next fiscal year
Corporate governance report disclosure

Strategies
As a member of society, our Group aims to build and strengthen the relationship with each stakeholder
and to contribute to the creation of an enriched society using flavor and fragrance technologies to solve
the challenges faced by the society. To fulfill its social responsibilities, grow sustainably, and improve
long-term corporate value, it is essential that our Group makes decisions rapidly and executes businessflexibly while responding to the changing management environment under a highly reliable andtransparent management system. Our Group regards corporate governance that serves as thefoundation of a highly reliable and transparent management system as an important challenge and willcontinue to work on strengthening our governance system so that it remains effective.
Objective indicators for judging the achievement of management targets
In order to achieve mid- to long-term improvement of corporate value through sustainable and stabledevelopment, our Group has set the following targets with an awareness of the necessary and feasible
range: a consolidated net sales growth rate of 5.0% or more; a consolidated operating profit margin of
13.0%; and a consolidate ordinary profit margin of 14.0% for FY2025.

Main FY2022 initiatives
 We manage corporate governance in line with the Basic Policy on Corporate Governance, which weestablished based on the principles of the Corporate Governance Code.
 The Board of Directors’ meeting was convened eleven times, where they made decisions on importantmanagement matters, including the management policy, budget development, and mattersprescribed in laws and the Articles of Incorporation. They also conducted monthly performance
analyses and evaluations and held discussions from the viewpoint of compliance with laws and the
Articles of Incorporation, as well as the appropriateness of operations.
 The Audit and Supervisory Board is comprised of four auditors, including three outside auditors. The
Board meeting was convened eleven times to receive reports on important matters related to audit
and to discuss and resolve reported matters. The auditors also attended important meetings such as
Board of Directors’ meetings to audit and supervise the status of performance of duties by directors.
They exchanged views with the President & CEO, senior vice presidents, and division heads twice
during the year. The Audit and Supervisory Board also audited subsidiaries and factories in accordancewith audit plans. Furthermore, the auditors worked to increase audit functions by regularly
exchanging views with an independent auditor and the Internal Audit Division.

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Copyright© T. HASEGAWA CO., LTD. All rights reserved The Appointment Committee, a voluntary committee comprised of the representative director and amajority of independent outside directors and chaired by an independent outside director, wasconvened once. The Appointment Committee nominates director candidates from multiple
perspectives, including factors such as excellent character, insight, and good management capabilities,
and submits recommendations to the Board of Directors.
 The Compensation Committee, a voluntary committee comprised of the representative director and amajority of independent outside directors and chaired by an independent outside director, wasconvened twice. The Compensation Committee deliberates on matters related to director
remuneration and submits the conclusion to the Board of Directors.
 To ensure the effectiveness of the Board of Directors, the Company conducted a survey of all directors
and auditors on the structure and management of the Board of Directors and analyzed and evaluatedthe responses during a Board of Directors’ meeting. As a result, the Company confirmed that theeffectiveness of its Board of Directors was secured for FY2022.
 The Company submitted the Corporate Governance Report based on the Corporate Governance Coderevised in June 2021 to the Tokyo Stock Exchange to disclose information on the status of ourcorporate governance.

Plan for the future Our Group will continue to work on strengthening our effective corporate governance system thatserves as the foundation of a highly reliable and transparent management system.
 We will evaluate the effectiveness of the Board of Directors once a year to ensure that it remains
effective.
 Based on the analysis and evaluation results of the effectiveness evaluation of the Board of Directors
conducted in FY2022, we will secure sufficient time for briefing, share materials at an early stage,
digitalize materials to strengthen the security, and increase the time for discussions during meetings in
FY2023. In addition, we will work to increase opportunities to discuss business strategies and risks.
Furthermore, while enhancing the training content for directors and auditors through participation inexternal seminars, we will work to enrich divisions’ report content to promote understanding ofoutside directors on business details and business execution. We will also continue to work on
improving governance by providing opportunities for a regular interview between outside directors
and officers in charge.

[Compliance]
Basic approach
The Group regards compliance as one of the most important issues in corporate activities. We haveprescribed the T. Hasegawa Corporate Code of Conduct and the compliance rules to ensure that theexecution of duties by all directors and all employees is in compliance with laws and the Articles ofIncorporation, as well as to fulfill the social responsibilities of a company and disseminate them to all
directors and employees as part of efforts to ensure compliance.

Bribery and corruption prevention initiatives
We support the 10 principles of “Human Rights, Labour, Environment and Anti-Corruption” outlined in
the UN Global Compact. T. Hasegawa will continue to promote responsible management for all
stakeholders in order to create a sustainable world.

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T. Hasegawa Policy on Bribery and Corruption

In light of international trends for strengthening laws and regulations on bribery and corruption,
the T. Hasegawa Group established the following basic policy on bribery and corruption to ensurethat our business activities comply with the laws and regulations of the countries and regions inwhich we operate.

1.

The T. Hasegawa Group observes all laws and corporate ethics related to bribery andcorruption prevention applicable in Japan and overseas in accordance with the “Compliancewith laws and regulations,” “Actions towards customers,” and “Relationships with suppliers”
sections stipulated in the T. Hasegawa employment regulations and the T. Hasegawa Code of
Conduct and does not allow any act of bribery or corruption.

2.

The T. Hasegawa Group will never demand profits that can be gained only through bribery,corruption, or other similar means under any circumstances. We also request cooperationfrom all domestic and overseas business partners involved in our Group’s business to fully
understand the aim of this policy and to never look to the interest of the Group by such
improper means.

3.

The T. Hasegawa Group appoints the officer in charge of internal management control as thechief supervisor related to the prevention of bribery and corruption. We will work to improvethe compliance system by taking measures, including the provision of training necessary to
prevent bribery and corruption and enhancement of the whistleblowing system.

Establishment of a tax policy
The circumstances surrounding tax has become more complicated as a result of our global development,so the Group is working to strengthen tax governance to appropriately respond to tax risks, etc., in the
countries and regions where we operate. As part of this effort, we have established the T. Hasegawa Tax
Policy with the aim of raising the awareness of all Group directors and employees on tax compliance.

T. Hasegawa Tax Policy

Basic policy
The T. Hasegawa Group observes laws and regulations in accordance with the T. Hasegawa
Corporate Code of Conduct, fulfills its social responsibilities by properly performing tax obligationin the countries and regions where it operates, and aims to further improve corporate value.
1. Compliance with laws and regulations
The Group complies with relevant tax laws and appropriately fulfills tax obligations. We do not use
tax incentives for programs that do not correspond to the actual business condition nor engage in57
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tax avoidance using regions known as tax havens. In international transactions, we observe laws,
regulations, and tax ordinances of countries and regions as well as international taxation rules.

2. Ensuring transparency
The Group complies with relevant accounting and disclosure standards that should be compliedwith and work to appropriately disclose information to all stakeholders. Upon request from tax
authorities, we will provide the necessary information and earn their trust. If any tax problem ispointed out, we will promptly implement improvement measures to prevent it from occurring
again.

3. Minimizing the tax risk
Through correct understanding of tax systems, the Group aims to minimize the tax risk and improve
corporate value. For transactions in business activities whose tax interpretation is unclear, we
receive advice from experts to fully examine them and confirm with tax authorities as necessary inan effort to reduce the tax risk.

4. Tax governance
The Group receives advice from external experts regarding changes in the business environment
and amendments to the tax system, etc., of each country and region to ensure that we accuratelyinterpret tax laws and regulations. Each site responds to such changes in a timely and appropriatemanner, and the Company has also established a system to quickly share such information.
Approach to animal tests
The Group has a policy of not conducting animal testing in any research and development for flavor andfragrance products. We also do not support any activities that involve animal testing.
Upon request from the administrative authorities, however, animal testing cannot be avoided in somecases.

Promotion system and governanceCompliance Committee
The Compliance Committee was established in accordance with compliance rules. It is chaired by the
President & CEO and includes directors as its members. The Compliance Committee regularly
investigates whether any illegal act has been committed in the Company for the purpose of preventing
an illegal act from being committed, preventing a potential illegal act from being ignored or concealed,
and, in the event of an illegal act, quickly ascertaining the actual condition, discussing countermeasures,and correcting the situation.

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Copyright© T. HASEGAWA CO., LTD. All rights reservedCompliance Committee structure chart
Board of Directors
ReportCompliance Committee(Committee Chair: President & CEO)
Auditing
Division

Quality
Assurance
Division

Production
Division

GlobalBusiness
Division

Administrative
Division

Secretariat: General Affairs Division/Human Resources Division

Overseassubsidiaries

Domestic
subsidiaries

Sales Division

R&D Division

 Compliance Committee members (as of December 1, 2022)
Chairperson:
Takao Umino (Representative Director, President, and CEO)
Vice Chairperson: Minoru Nakamura (Director and Senior Executive Vice President)
Member:Yoshiaki Chino (Representative Director and Deputy President)
Tetsuya Nakamura (Director and Executive Vice President)
Koichiro Kato (Director and Executive Vice President), and 10 other members
Observer:Takehiro Matsumoto (Full-time Auditor)
Secretariat:
General Affairs Division/Human Resources Division
Whistleblowing system
Board of Directors
Management status reportCompliance Committee(Committee Chair: President & CEO)
ReportSuspension order
Improvement
instructions

ReportExternal service

Internal service
Hotline /Whistleblowing

Consultation(Lawyer)

Report on investigation
results/measures

Hotline /Whistleblowing

Officers/Employees

We have established a whistleblowing system to receive reports on illegal acts. In addition to multiple
whistleblowing hotlines, we have established a point of contact with external lawyers as a consulting
service independent of management. In the management of the whistleblowing system, we make surethat the following matters are communicated to all directors and employees of the Group: the relevant
person asking for advice, whistleblower, and person cooperating in an investigation will not be treateddisadvantageously in any case as a result of seeking consultation or whistleblowing in accordance withrelated laws and regulations and the compliance rules; the Compliance Committee and the Secretariat of59
Copyright© T. HASEGAWA CO., LTD. All rights reservedthe Compliance Committee will collaborate with full-time auditors to clearly state in the compliancerules that they will monitor the presence or absence of disadvantageous treatment.
The division in charge of the whistleblowing system confirms the status of internal reporting withdirectors and employees of the Group companies, regularly reports the confirmed status during theCompliance Committee that includes directors as members, and reports the system management status
to the Board of Directors.
Training and education on compliance
We work to foster a sense of respect for compliance by providing training and education to all directors
and employees regarding laws and regulations related to the execution of their duties.
Development and implementation of internal control
In order to secure the reliability of financial reporting, we have established the rules on internal controls
to develop and implement internal control pertaining to financial reporting, and have built a system toappropriately evaluate the effectiveness of the internal control.
Internal audit
The Internal Audit Division conducts internal audit of the Company’s operations based on the internal
audit plan.

Target Compliance comprehension test: once a year Harassment prevention training: once a year (all new managerial staff are required to receive thetraining)

Main FY2022 initiatives
 We have established the T. Hasegawa Corporate Code of Conduct, shared it with all directors andemployees, distributed the Code, and made sure that they can be referred to at any time. In FY2022,
we conducted a compliance comprehension test for all employees to confirm whether they are awareof the behavior norms and code that require them to be sincere and maintain an ethical view as partof our efforts to improve compliance awareness.
 In accordance with the compliance rules, we held the Compliance Committee once in FY2022. The
Compliance Committee deliberates important matters concerning compliance and reports the resultsof the comprehension test, and so on. In FY2022, there was no serious compliance violation that
affects the Group’s business continuity and we confirmed that the Group’s business is being managed
appropriately. In addition, with 99.9% correct answers received in the comprehension test, we
confirmed that the understanding on various rules related to compliance has deepened among
employees.
 We have established a whistleblowing system in the Company and its subsidiaries, as well as
consultation and whistleblowing hotlines in and outside the Company. Upon receiving any
consultation request and report, we investigated the facts and considered measures. The status ofconsultation and reporting at the Group companies is reported to full-time auditors in the Compliance
Committee. In addition, we included questions regarding the whistleblowing system in thecompliance comprehension test and encouraged all employees to understand the system to promote
the use of the whistleblowing system.
 We take a firm attitude toward antisocial forces and organizations that pose a threat to social orderand security and ban any relations with them. We also take strong actions for unreasonable requests
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from them. The T. Hasegawa Corporate Code of Conduct states that effect, and all directors andemployees observe the Code. We constantly collect information from relevant administrative
agencies and organizations, including the police. In the event of an incident, we have a system inplace to deal with it promptly and systematically in close cooperation with such agencies,
organizations, lawyers, and so on.
 To prevent harassment in workplace (including sexual harassment, harassment related to pregnancy,
childbirth, childcare, and long-term nursing care leave, and abuse of authority), we prescribe andshare matters that employees should observe and administrative measures to address problems
arising from speech and behavior in the harassment prevention rules. In FY2022, we provided
harassment prevention training to all management positions.

Plan for the future The Group will continue the above efforts for increasing awareness on compliance of each employee
and work with Group companies to enhance and strengthen the compliance system of the entire
Group.
 We will continue to conduct a compliance comprehension test for all employees once a year to
confirm whether they are aware of the behavior norms and code that require them to be sincere andmaintain an ethical view (Target rate of taking the compliance comprehension test in FY2023: 100%).
 To promote the use of the whistleblowing system, we will include questions regarding thewhistleblowing system in the compliance comprehension test conducted once a year and encourage
all employees to understand the system.
 We will work to prevent harassment in workplace by conducting harassment prevention training,which is compulsory for all people who have been promoted to management positions, once a year.
 In order to promote understanding on internal control, we will provide training for new employees
and new managerial staff once a year.

[Risk management]
Basic approach
We have developed internal rules on the risk management system, which stipulates that the analysis,
management, and consideration of measures for risks must be performed, mainly for relevant divisions.
The rules also stipulate that the Risk Management Committee, which is a cross-sectional organization of
relevant divisions or the whole Group, must be established to analyze, manage, and consider measures
for risks that require a response from the company or the Group. In addition, as our basic approach forrisk management, we have established business continuity rules and their subordinate rules, which arebusiness continuity guidelines to continue the Company’s business in the event of a contingency orcrisis, and shared them with all directors and employees of the Company.

Promotion system and governance
We have developed internal rules, and are analyzing, managing, and considering measures for risks,
mainly for relevant divisions. In addition, the relevant divisions and the Risk Management Committee
analyze, manage, and consider measures for risks that require a response from the company or theGroup based on the risk management rules. The Risk Management Committee has been established as aGroup-wide organization that is chaired by the President & CEO and consists of directors as members.

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Risk Management Committee structure chart
Board of Directors
ReportRisk Management Committee(Chair: President & CEO)
Auditing
Division

Quality
Assurance
Division

Production
Division

GlobalBusiness
Division

Administrative

Secretariat: Corporate Planning Division

Overseassubsidiaries

Domestic
subsidiaries

Sales Division

R&D Division

 Risk Management Committee members (as of December 1, 2022)
Chairperson:
Takao Umino (Representative Director, President, and CEO)
Vice Chairperson: Minoru Nakamura (Director and Senior Executive Vice President)
Member:Yoshiaki Chino (Representative Director and Deputy President)
Tetsuya Nakamura (Director and Executive Vice President)
Koichiro Kato (Director and Executive Vice President), and 10 other members
Observer:Takehiro Matsumoto (Full-time Auditor)
Secretariat:
Corporate Planning Division
Risk identification process
The Group identifies risks by conducting annual company-wide risk assessments in accordance with therisk management rules. The risk assessment analysis results are reported to the Risk Management
Committee and the Board of Directors. The Risk Management Committee selects the priority risks to bemonitored based on the analysis results, and regularly checks them for progress.

Main risks and initiatives
The following lists the main risk items identified by the Group and the main initiatives.
(As of December 23, 2022)
Risk item
Main initiative
Climate risks
 Aim to increase the ratio of sales in categories other than beverages, which
are most affected by unseasonable weather.
Raw material
 Promote the distribution of suppliers and diversification of procurement
procurement risks
methods by working to procure raw materials from multiple suppliers
around the world.
 Purchase globally through collaborations between the Group’s sites in andoutside Japan.
Disaster and other In order to continue business operations in the event of a contingency suchrisks
as a disaster or crisis, establish and implement business continuity rules andtheir subordinate rules as business continuity guidelines. In addition,
conduct firefighting training and safety confirmation training based on alarge-scale disaster scenario to enhance their effectiveness.

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Risk item
Quality risks

Economic andother risks

Environmental risks

Impairment lossrisks

Subsidiarymanagement risks

Exchange rate
fluctuation risks

Main initiative As a manufacturer involved in food safety, prioritize safety first and work to
supply products with a level of quality that satisfies customers.
 Take all possible measures to ensure product safety by building acomprehensive quality assurance system covering research anddevelopment, raw materials procurement, production, and sales under theleadership of the Quality Assurance Division, which communicates directlywith the President & CEO.
 Have a product liability insurance just in case.
 Promote global expansion in the U.S. and the Asian region, particularly
China and Southeast Asian countries to spread our operating areas.
 By accurately ascertaining the market growth potential and consumer
preferences in each country and region where the Group operates, develop
and promote business strategies that allow us to respond quickly andflexibly to the significantly changing business environment.
 In response to environmental issues, thoroughly observe environmental
laws and regulations in countries and regions where we operate.
 State in the CSR Policy and the T. Hasegawa Corporate Code of Conduct that
we must actively work to protect the environment and improve
environmental issues, and conduct business activities while considering theenvironment.
 Appropriately evaluate the profitability of retained fixed assets, consider
whether to continue retaining them based on the evaluation, and formulate
utilization measures. Make capital investments to stably maintain andmanage fixed assets in order to improve the asset value.
 Before engaging in merger and acquisition deals, develop business plans
and fully consider the measurement of future value. After closing a merger
and acquisition deal, systematically promote post-merger integration (PMI)
to maximize the expected synergy effect.
 The Group shall regard corporate governance that serves as the foundationof a highly reliable and transparent management system as an important
challenge, and work on strengthening its governance system, including for
its subsidiaries, so that it remains effective.
 Apply the T. Hasegawa Corporate Code of Conduct and the compliance rules
to subsidiaries as well and work to build a compliance system for the entire
Group. Establish a whistleblowing system to receive reports on illegal acts at
subsidiaries.
 We created core basic rules at overseas subsidiaries and strengthened thegovernance system of overseas subsidiaries.
 Consider the management risks of overseas subsidiaries as priority risks of
the Group, and regularly conduct operating audits of overseas subsidiaries
based on the developed guidelines and plans, including theimplementation, etc., of the created core basic rules.
 Promote global expansion in the U.S. and the Asian region, particularly
China and Southeast Asian countries. Reduce the exchange rate fluctuation
risks through local production and local sales overseas.
 Develop a management plan that incorporates exchange rate fluctuations.

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Risk item

Information
security risks

Risk on the spreadof COVID-19
infection

Main initiative The Company is rarely affected by exchange rate fluctuations on an
unconsolidated basis because the amount of export from Japan and that ofimport of raw materials from overseas are almost the same.
 Develop information security rules, including the Basic Policy on Information
Security and Countermeasure Standards, and ensure appropriate use andmanagement of information assets owned by the Group.
 Install information security software, etc., to create an environment thatenables early detection, defense, and response.
 In addition to providing regular education on information security for all
directors and employees, conduct awareness activities through notifications
and work to improve awareness on information security.
 It is difficult to accurately predict when COVID-19 pandemic will subside,and infection trends still remain uncertain. The business activities of theGroup may be affected depending on the future progress, and we willcontinue to monitor the situation.
 The Group’s Emergency Response HQ, which was established in accordancewith the business continuity rules and the business continuity guidelines(pandemic edition), collected information in and outside Japan for business
continuity and developed and promoted countermeasures.

For details on the risks, refer to the Securities Report.
FY2022 Securities Report: Business and other risks
https://ssl4.eir-parts.net/doc/4958/yuho_pdf/S100PUV1/00.pdf#page=12

Main FY2022 initiatives
 Risk Management Committee
The Risk Management Committee discussed risk management plans, including risk analysis andmanagement, evaluation reports on response to high-priority risks, annual risk management plans,
and the planning and implementation of countermeasures. In FY2022, the Risk Management
Committee was convened once.
 Business continuity
In order to continue business operations in the event of a contingency or crisis, we have establishedbusiness continuity rules and business continuity guidelines. We disseminated the content among all
directors and employees, and conducted firefighting training and safety confirmation training basedon a large-scale disaster scenario.
 Internal audit
The Internal Audit Division conducts internal audit of the Company’s operations based on the internal
audit plan.
 Information security
The Group ensures appropriate use and management of its information assets by developing
information security rules, including the Basic Policy on Information Security and CountermeasureStandards, and by developing an information security organizational structure. By combining multiple
systems, security tools, and monitoring services, the Company has created an environment that64
Copyright© T. HASEGAWA CO., LTD. All rights reservedenables early detection, defense, and response. In addition to focusing on warning all directors andemployees regarding information security through regular education, notifications, etc., on
information security, we regularly conduct trainings to handle and respond to incidents.
Information security organization chart
Information system chiefsupervisor

Officer in charge or responsible
officer who controls theInformation Systems Division

Information security chiefsupervisor
Information Security Committee

Information Systems Division

Each division
Information security supervisor(Head of the relevant division)

Information security administrator(Appointed by the information security
supervisor)

User* The information system chief supervisor shall be the officer in charge or responsible officer who
controls the Information Systems Division.
The information system chief supervisor shall be responsible for supervising and managing
company-wide information security.
However, an information security chief supervisor may be appointed separately.
* The Information Security Committee Chair shall be the officer in charge.
* Under the Company’s system, any important matters regarding information security are to besubmitted and reported to the Strategy Committee, as well as to the Board of Directors asnecessary.
 Intellectual property rights
The importance of intellectual property rights is increasing year by year due to growing awareness ofintellectual property rights in society and various measures taken by the government. The Group has
established the Legal Division as a division responsible for controlling intellectual property rights. The
Division acquires achievements obtained through research and development, etc., as intellectual
property rights, and utilizes them in providing the Group’s high-quality, high-value-added products.
 Response to COVID-19 pandemic
In response to the impact of the global COVID-19 pandemic, the Group’s Emergency Response HQ,
which was established in accordance with the business continuity rules and the business continuity
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guidelines (pandemic edition), collected information in and outside Japan for business continuity anddeveloped and promoted countermeasures.

Plan for the future We will continue our efforts to reduce risks, while monitoring mainly priority risks in accordance withthe risk management plan formulated by the Risk Management Committee. We will regularly identify
potential risks, and work to avoid and reduce risks and to prevent a crisis from occurring.
 Specifically, we will conduct annual risk assessments covering the Group companies once a year to
identify company-wide risks. The Risk Management Committee will report the risk assessment analysis
results and select priority risks. For identified priority risks, the Committee will report the progress(follow-up) twice a year to check on the progress of response.

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