Sustainability Report2023

T. HASEGAWA CO., LTD. SUSTAINABILITY REPORT 2023
TABLE OF CONTENTS
Sustainability at the T. Hasegawa Group ..................................................................................................... 3
Message from the President.................................................................................................................... 3
T. Hasegawa Group’s purpose ................................................................................................................. 5
T. Hasegawa Group’s value creation process .......................................................................................... 6
Achieving sustainable growth ................................................................................................................. 7
Sustainability promotion system of the T. Hasegawa Group .................................................................. 8
Stakeholder engagement ....................................................................................................................... 12Groups and initiatives that we support and participate in ................................................................... 13
T. Hasegawa Corporate Code of Conduct .............................................................................................. 15
Approaches to sustainability ..................................................................................................................... 17
CSR Policy 1: Procurement ..................................................................................................................... 17
CSR Policy 2: Environment ..................................................................................................................... 21
CSR Policy 3: Human rights and labor ................................................................................................... 31
CSR Policy 4: Quality safety ................................................................................................................... 42
CSR Policy 5: Governance—Fair corporate activities ............................................................................ 52
CSR Policy 6: Innovation ........................................................................................................................ 68

1
Copyright© T. HASEGAWA CO., LTD. All rights reservedEditorial Policy
This report aims to communicate the relationship between the Group and its stakeholders and its
value creation, as well as to report on important initiatives based on the Company’s CSR Policy.
Through this report, we will strengthen the relationship with our stakeholders, create value, andpromote our sustainability initiatives.
In principle, we publish a Sustainability Report once between April and May every year. This
report is disclosed after the approval of the Strategy Committee, which consists of therepresentative director and senior vice presidents appointed by the representative director. We
have also disclosed the ESG Databook 2023, which focuses on ESG data, and the GRI standards
index as supplementary materials for this report.
 Referenced guidelines: GRI Standards. This report was created with reference to the GRI
Standards.
 Organization to be reported: In principle, T. HASEGAWA CO., LTD. “T. Hasegawa Group,” “theGroup,” and “our Group” refer to the Company and its subsidiaries as a whole.
 Period covered by the report: In principle, FY2022 (October 1, 2021 to September 30, 2022).
Some FY2023 initiatives are also disclosed. Note that each fiscal year listed in the ESG
Databook 2023 refers to the year from October 1 of the previous year to September 30 of theyear in question.
 For inquiries concerning this report, contact the CSR Division of T. HASEGAWA CO., LTD.
E-mail: eco@t-hasegawa.co.jp
 Previously published on: April 26, 2022

2
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Sustainability at the T. Hasegawa Group
Message from the President

Takao Umino
President & CEO

T. HASEGAWA CO., LTD.
Basic strategies and customer success
The Group is currently engaged in business based on three basic strategies that focus on expanding
the core business (compound flavors and fragrances), securing revenue in the domestic market, andachieving growth in overseas markets. In order to ensure the strategies produce results, we have beenpromoting management reform. In FY2022, our business remained strong despite difficult businessconditions, including resource price rises triggered by the situation in Ukraine and raw material pricehikes due to a rapid weakening of the yen. As a result, consolidated net sales continued to reach record
high from the previous period and consolidated net profit continued to achieve the highest figure forthree consecutive periods. The percentage of overseas net sales to consolidated net sales also increased
to 45.9%.
In Japan, we have been improving sales activities and the quality of our proposals, as well as
accelerating the speed of customer response by strengthening the cooperation between sales, research,and marketing led by the Business Solution Division. While promoting digital transformation (DX)projects to increase the efficiency of product development and further advancing data usage to acquire
new knowledge, we are striving to achieve customer success by providing the Group’s proprietary highquality and high-added-value products with a focus on technology innovation.
Our Group considers customer success as a contribution to improving their corporate value. As such, it
is essential to investigate and analyze customers’ issues and consumers’ potential needs, and provide
optimal solutions that leverage our flavor and fragrance technology, rather than waiting for requests
from customers. Amid the raw material price hikes and price rises, our customers are also facing theneed to review their raw materials and manufacturing approaches. Accordingly, we believe that the
viewpoint of customer success has become even more important. We aim to further strengthen
customer success by enhancing our proposal capabilities through solution sales that meet increasingly
diversifying and sophisticated customer needs.
In overseas markets, which we position as a growth driver, we formulate and promote businessstrategies according to each region to ensure future growth by efficiently putting management resources
into the United States and the Asian region (mainly China and Southeast Asian countries). In the UnitedStates, we completed our post-merger integration (PMI) with MISSION FLAVORS & FRAGRANCES, INC. in
FY2021, producing synergy effects. In addition, we are promoting a second factory construction projectin Rancho Cucamonga, California to build a new production system, with part of the factory commencing
operations in June 2022. In China, we have beefed up our sales force and have been expanding themarketing area through local mid-range and major companies, as well as by using agencies. We are also3
Copyright© T. HASEGAWA CO., LTD. All rights reserved

promoting a new research building construction project aimed at strengthening the researchfunctionality and increasing operational efficiency. In the Southeast Asian region, we are planning toconstruct a new factory in Malaysia, in an attempt to strengthen our Southeast Asian strategy, with sites
in the country serving as a hub. By managing the supply chain across the globe and further promoting
the internationalization of our management, we will provide the value created by our Group to evenmore stakeholders globally.
Building a sustainable society
More than seven years have passed since the adoption of the sustainable development goals (SDGs)
and the Paris Agreement in 2015, and actions are being taken all over the world to solve social
challenges. There is a greater demand for initiatives that not only pursue the growth of one’s own
company, but also build a sustainable society with a greater focus on stakeholders.
In 2020, the Group signed the United Nations Global Compact and formulated six CSR policies that weshould pursue. In order to promote organizational initiatives for sustainability that are integral to thebusiness strategy, we established a Sustainability Committee in 2021. Moreover, we endorsed therecommendations of the Task Force on Climate-related Financial Disclosures (TCFD) to further promoteresponses to climate change in 2022.
Since its foundation, the Group has been developing flavors and fragrances used as a substitute fordepleting food materials and raising health consciousness among consumers. In this way, we arecontributing to solving problems faced by the modern society, including food shortages. Abnormal
weather due to global warming is expected to have a significant impact on the yields and quality ofnatural raw materials, and customer needs and consumer trends are also expected to change as a resultof temperature rises. As we address these challenges, we have realized that it is human resources that
unlock the infinite possibilities of flavor and fragrance and provide customer success. All of ouremployees work to provide safe and reliable products, with top priority placed on ensuring safety andquality control. They demonstrate unwavering professionalism, a passion for responding to ourcustomers’ needs, and the ability to succeed under all circumstances. This allows the Group to provide
the best solutions to customers and to grow. The Group’s corporate motto is “A Foundation inTechnology,” which is an expression of our stance of contributing to the world through flavors andfragrances as our divisions constantly collaborate and stimulate one another.
The Group will make the most of flavor and fragrance technologies to solve global challenges andcontribute to building a sustainable society in which people can enjoy healthy and fulfilling lives.
About the accident at the Itakura Facility of the Fukaya Production Center
On September 15, 2022, a serious accident resulting in the death of an employee of our Company andthe injuries of two others occurred at the Itakura Facility of the Fukaya Production Center. We deeply
regret that such an accident occurred and sincerely pray that the deceased employee will rest in peace.
We would also like to express our deepest apologies for any inconvenience and concern caused to ourstakeholders.
We have established an Accident Investigation Committee to investigate the cause of the accident andformulate measures to prevent a recurrence. The details of the investigation on the causes of theaccident and the suggestion on measures to prevent a recurrence by the Accident Investigation
Committee have been released under the title “An Accident Resulting in the Death of an Employee of
Our Company (Causes of accident, measures to prevent recurrence, and operating status)” on November
11 of the same year. We take this accident, which resulted in a fatality and injuries, seriously. In order toprevent such an accident from occurring again, we will ensure that recurrence prevention measures are
implemented, as well as build a proper and effective management system.
May 2023
4
Copyright© T. HASEGAWA CO., LTD. All rights reserved

T. Hasegawa Group’s purpose
Embracing the corporate motto of being a “A Foundation in Technology,” we strive to contribute to thecreation of an enriched society through flavors and fragrances.
Our corporate motto of “A Foundation in Technology” reflects the T. Hasegawa Group’s commitment toflavors and fragrances, and our desire to provide customers with safe and reliable products. Our
divisions constantly collaborate and work hard together while also engaging in partnerships and joint
research with external parties. As a manufacturing partner, we provide proposals that will lead tocustomer success by exceeding their expectations and identifying the needs and latent demand of
consumers. As a member of society, we will also work to build and strengthen the relationship with eachof our stakeholders and will contribute to the creation of an enriched society using flavor and fragrance
technologies to solve the challenges faced by the society.
The T. Hasegawa Approach

Our stakeholders

Localcommunities

Company Creed
Naturalenvironment“A Foundation in Technology”

Government
NGOs

Management policies① Strive to achieve stable and appropriate
profit return with the aim of improving
corporate value and increasing shareholder profit② Realize our corporate social responsibilities
by being thoroughly compliant to laws andregulations.
③ Create a safe and comfortable work environment
for our employees.
④ Work to resolve social issues and contributeto the creation of a sustainable society.

Suppliers

Customers
Consumers

The T. Hasegawa
Group
Joint ResearchPartners

Shareholders
Investors

Our Purpose
Contribute to the creation of an enrichedsociety through flavors and fragrances

Universities
and research
institutions

Employees

5
Copyright© T. HASEGAWA CO., LTD. All rights reserved

T. Hasegawa Group’s value creation process
We lead customers to success by creating unique flavors and fragrances in the world andimplementing a production cycle to create high quality and safe products.
Value creation at T. Hasegawa Group:(1) Our Sales and Marketing Divisions begin the value creation process by analyzing consumer needs tounderstand customers’ requests and latent demand.
(2) Our R&D Division creates samples of flavors and fragrances that reflect customers’ requests andlatent demand.
(3) Our Procurement Division procures raw materials that take into account the supply chain.
(4) Our Manufacturing Division uses the optimal production equipment to efficiently and accurately
create approximately 12,000 flavors and fragrances annually.
Lastly, we provide safe and reliable products to customers in a timely manner under a perfect quality
control system.
Value creation at T. Hasegawa

High-quality, safety product "Production"Rawmaterials(3) Procurement(4) Production

Raw material andsupply procurement
based on supply
chain evaluations

The efficient andaccurate creationand timely provisionof some 12,000 flavors
and fragrances annually.

The powerof flavor
andfragrance
creation

Suppliers(1) Sales andMarketing(2) R&D
Promptly materialize
the requirements andpotential needs ofthe customers

Address customer
requests andidentify latent
needs

Providesafe andreliable
products

Customersuccess

Products

Customers

Consumers

Customerrequests
and latent
needs“Creation” of one and only flavors and fragrances in the world

6
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Achieving sustainable growth
We will realize our vision by expanding business opportunities through innovation and reducing risks
while considering the environment and society.
The flavor and fragrance industry is greatly affected by the declining birthrate and aging population in
Japan, climate change, food shortages, changes in consumer needs, and so on. In response to suchchanges in the business conditions, we capture business opportunities through innovation with the“power of flavor and fragrance creation,” and contribute to the creation of an enriched society throughflavors and fragrances. In this process, we will strengthen our sustainability initiatives (such as
responsible procurement, reducing environmental impact, human rights and labor, and quality safety),
as well as ensure thorough risk management.
Megatrends, changes inbusiness environment

Japan:
 Population decline, low birthrates, population aging
Global: Disputes between nations andregions
 Rising standard of living inemerging nations
 Foreign exchange risk
 Industry oligopoly Food shortage due to rising
global population
 Climate change caused by
global warming(Unstable weather, numerous
disasters)
 Reduced crop yield Consumer trend towards healthand environmental
consciousness
 Diversification of consumer
consciousness, needs, andpurchasing habits
 Advancement of digitalization,AI

Impact on T. Hasegawa

The T. Hasegawa Approach

Business opportunities
 Identify new business
opportunities in Japan Expand demand for flavors
and fragrances in emerging
nations Respond to diversifying
customer needs
 Increased demand foralternative raw materials,
alternatives to natural raw
materials
 Increased demand forbeverages and chilled orfrozen desserts driven by risein average temperatures
 Increase value of "flavor andfragrance" database

Expand business opportunities Creating a framework for providing diverse
flavors and fragrances that are safe, reliable,
and suited to customer preferences

Risks / Challenges
 Maturation of the domestic
market Impact of currency exchange
fluctuations on sales andprofits
 Growing gap between global
corporations
 Conflict and climate change
making natural raw materials
more expensive and harder toobtain Price hike of higher raw
material demand

Risk mitigation
 Reinforce raw material inventory
management and diversify purchasing routes
 Develop efficient production system, stableproduct supply Decline in surplus inventory
 Risk dispersal for overseas local
procurement and local production
 System for highly reliable quality assurance
and process management by expanding
inspection system and adopting strict
standards
 Environmentally friendly products design andmanufacturing, environmental safety audits Effective use of waste and improvements todeodorizing facilities

 Overseas local procurement and local
production
 Sustained R&D investments

Business strategy

Increase flavor
and fragrancecompounds

Secure earnings
in Japan

Expand overseas
business

High-quality, safety product "Production"

Procurement

Production

The
power
of flavor andfragrance Strengthen technology and innovation basedon trends: secure and develop humanresources, utilize databases and AI

creation

Sales andMarketing

R&D>Building a new business model Speedy development: Rapidly identify andrespond to customer requests and latent
needs

Mission“Creation”of one and only flavors andfragrances in the world Detailed customer service

Contributeto the creationof an enrichedsociety throughflavors andfragrances

Innovation

Contributions to SDGs
Human rights,
labor

Responsible
Procurement
Reducing
environmental load

Transparent
management

E(Environmental)

Qualityassurance

S(Social)G(Governance)

7
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Sustainability promotion system of the T. Hasegawa GroupWe promote sustainability by formulating a CSR Policy and developing a company-wide promotion
system.

(1) Formulation of a CSR Policy
Based on the CSR activities that we have been conducting and our support for the IFRA-IOFI Sustainability
Charter and the UN Global Compact, we considered our materiality from two aspects of solving social
challenges (contributing through our business processes and contributing through our products) and wehave established six CSR policies.

[CSR Policy: Formulation process and regular review]
We formulate a CSR Policy by considering materiality from the viewpoint of the Group and its stakeholders
and then obtaining approval from the Strategy Committee, which consists of the representative director
and senior vice presidents appointed by the representative director. Any future change to the CSR Policy
must also be approved by the Strategy Committee.

8
Copyright© T. HASEGAWA CO., LTD. All rights reserved

[CSR Policy][Relationship between the CSR Policy, risks, opportunities, and business strategies]
We confirm and organize the relationship between the CSR Policy, risks, opportunities, and businessstrategies.

9
Copyright© T. HASEGAWA CO., LTD. All rights reserved

(2) Development of a sustainability promotion system
In order to contribute to creating an enriched society through flavors and fragrances, we strengthen
sustainability initiatives and ensure thorough risk management while capturing business opportunities
through innovation.
The person in charge of sustainability in the Company is the President & CEO. Under this framework, wehave established a Sustainability Committee to strategically promote sustainability initiatives, including
matters stated in the CSR Policy and ESG, across the entire Group. The Committee develops group-widebusiness strategies related to sustainability and deliberates and resolves important matters, including
initiative details. Matters deliberated by the Sustainability Committee are referred and reported to theStrategy Committee and the Board of Directors as necessary. In addition, we delegate authority torelated divisions depending on the matters.
Board of Directors
Approved by

Minutes, report

Strategy Committee
Approved by

Minutes, report

Sustainability Committee
Confirm status ofprogress

ReportRelated Divisions(business execution)

Overview of the Sustainability Committee• Objective
The objective of the Sustainability Committee is to strategically promote sustainability initiatives,
including matters stated in the CSR Policy and ESG, across the entire Group.
• Committee members
The officer in charge of Internal management control serves as the Committee Chair while people
appointed by the Committee Chair based on recommendations from the officers in charge of eachrelevant division serve as members.
• Secretariat
The Committee Secretariat consists of the Corporate Planning Division and the CSR Division.
• Activities in FY2022
The Committee meeting was held once to set out KPIs (management indicators) for each CSR Policy(materiality) item and deliberate on the publication of a Sustainability Report and other matters.

10
Copyright© T. HASEGAWA CO., LTD. All rights reserved

(3) Formulation of KPIs
We set out KPIs and confirm their progress in an attempt to effectively work on the CSR Policy (materiality).

11
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Stakeholder engagement
We put an effort in gaining their trust with stakeholders.
Our Group views all organizations and people involved in the Group’s value creation as stakeholders. We
consider engaging in dialogue with stakeholders to be important and focus on gaining their trust.

12
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Groups and initiatives that we support and participate in
We support and participate in a wide range of global sustainability initiatives.

Signing the IFRA-IOFI Sustainability Charter
The Japan Flavor & Fragrance Materials Association (JFFMA), which we have joined, is a member of theInternational Fragrance Association (IFRA). We are also a member of the International Organization of
the Flavor Industry (IOFI). We contribute to various activities of these organizations implemented withthe aim of securing the safety of flavors and fragrances, directly and by participating in JFFMA’s
activities.
The IFRA and the IOFI share a common belief that establishing sustainability activities in a corporate
business strategy is essential to achieving a prosperous and sustainable future. This shared belief isdefined in the Sustainability Charter. We emphasize sustainability most and have been conducting
various activities. We signed the Sustainability Charter on March 31, 2020 in order to express suchactivities as our commitment at a high level. To achieve a sustainable society, we will work on thefollowing five domains stipulated in the Sustainability Charter.
IFRA-IOFI: Approaches to Sustainability
1. Ensure responsible sourcing throughout the value chain;
2. Reduce our industries' environmental footprint and address climate change;
3. Enhance the well-being of employees and ensure a rewarding labor environment;
4. Be at the leading edge of product safety;
5. Be transparent and a reliable partner for society.

13
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Signing the UN Global Compact
T. Hasegawa signed the UN Global Compact, an initiative advocated by the UN, and was registered as aparticipating company on August 24, 2020. On the same day, we also joined the Global Compact
Network Japan, a local network of UN Global Compact participants in Japan.
The UN Global Compact is a global framework for realizing sustainable growth by encouraging
participating companies and organizations to commit to responsible, creative leadership and serve as
positive members of society.
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.

14
Copyright© T. HASEGAWA CO., LTD. All rights reserved

T. Hasegawa Corporate Code of Conduct
T. Hasegawa embraces the corporate motto, “A Foundation in Technology,” and strives to contributeto the creation of an enriched society through flavors and fragrances. To enable this mission, we havea Code of Conduct that prescribes the matters for each of us to observe.
Our corporate motto of “A Foundation in Technology” reflects the Group’s commitment to flavors andfragrances, and our desire to provide customers with safe and reliable products. As a member of society,we also aim to build and strengthen the relationship with each of our stakeholders and to contribute to
the creation of an enriched society using flavor and fragrance technologies to solve the challenges facedby the society. To realize the vision, we have established the T. Hasegawa Corporate Code of Conduct
and ensures that it is shared across the Group. All executives and employees of the Group will fulfill theirsocial responsibilities by understanding and adhering to this Code of Conduct and acting sincerely andfairly with high ethical standards.
T. Hasegawa Corporate Code of Conduct
1. Compliance with laws and regulations
We always pay attention to laws and regulations, work to understand them, and act based onsocial common sense.
2. Initiatives for environmental issues
As a member of society, we proactively work on environmental issues to protect theenvironment.

3. Opposition to antisocial forces
We stand firm against antisocial forces and organizations of a similar nature and never engage
in any relations with such parties.
4. Respect for human rights
We respect the basic human rights of each individual and never engage in any unfair
discrimination or harassment.

5. Respect for the rights of third parties
We respect the rights of third parties in pursuing the company's business and will not infringeon any such rights.
6. Compliance with quality safety standards
We endeavor to provide safe products that are in compliance with laws under a strict quality
control system.

7. Prohibition of insider trading
We conduct fair stock trading and never conduct insider trading or any other suspicious stock
trading.

15
Copyright© T. HASEGAWA CO., LTD. All rights reserved

8. Prohibition of conflict of interest
We do not conduct any act as listed below that will or could result in a conflict between ourown and the company’s self-interest.
(1) Becoming an officer or employee of a competitor of the Company(2) Promoting or supporting the sales activities of a competitor of the Company(3) Performing an act that competes with the business of the Company

9. Handling of information inside the Company
We are fully aware of the value of the information possessed by the Company and of theinformation provided by third parties. We strictly manage such information by observing ourcompany rules (“Confidential Information Management Rules” and the “Rules Related toInformation Inside the Company and to Insider Trading”).
10. Actions towards customers
We do not engage in any act of entertainment or gift-giving that is regarded as bribery, nor
any other act that deviates from socially accepted business practices.

11. Relationships with suppliers(1) We interact with suppliers with good sense and sincerity, and treat them fairly and justly inbusiness transactions.
(2) We do not abuse the Company’s dominant bargaining position to impose any unjustified
disadvantages on suppliers.
(3) We never accept rebates or kickbacks from suppliers.

16
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Approaches to sustainability
CSR Policy 1: Procurement
We will promote responsible procurement across the value chain.

Basic approach
In order to provide customers with products that can be used with peace of mind, it is essential to builda supply chain that enables stable sourcing of good quality and price competitive materials. By gaining
their long-term trust with suppliers through fair, impartial, and transparent transactions, we will
promote procurement activities that take into consideration resources, the environment, and humanrights, so that the entire supply chain will be able to grow sustainably.

T. Hasegawa Procurement Policy

1. Legal compliance and ethical transactions
We will observe laws and social norms in each country and region, and promote procurement
activities with high ethical standards and social good sense together with suppliers.

2. Considerations for human rights
We will respect human rights in every situation and endeavor to ensure that no activities that
may violate human rights are conducted across the entire supply chain so that there is nodiscrimination.

3. Considerations for the global environment
Together with all suppliers, we will conduct sustainable procurement activities that take into
consideration global environmental protection with an awareness on reducing theenvironmental impact.
4. Mutual trust, co-existence, and prosperity with suppliers
We will respect the standpoint of counterparties based on mutual trust according to theprinciples of fair and open competition, and seek to co-exist and achieve prosperity together
with all of our business partners, including suppliers.

5. Safety, security, and customer success
We will conduct procurement activities aimed at realizing customer success, safety, andsecurity by providing safe and quality products to customers and, in turn, consumers.

17
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Relation with stakeholders
In order to promote responsible procurement across the entire supply chain, we have established the “T.
Hasegawa Supplier Guidelines.” We will gain their long-term trust with suppliers through fair, impartial,
and transparent transactions.
Overview of T. Hasegawa Group suppliers
The Group does business with chemical manufacturers, flavor and fragrance manufacturers in the same
industry, food additive manufacturers, food manufacturers, trading companies, contract manufacturers,
and packaging material manufacturers. In FY2022, the total number of suppliers that the Company hadbusiness with was around 450, with a total number of 3,200 purchased items. The main breakdowns are
flavor and fragrance raw materials (natural and synthetic) and food (including food additives), whichhave the same percentage. The ratio of imports to domestic procurement is 35:65, and our suppliers arelocated in Japan, China, the United States, the European Union, the United Kingdom, India, Brazil,
Argentina, and other countries around the world. A distinctive characteristic of our suppliers is that they
engage in high-mix, low-volume production and offer raw materials with relatively high unit prices.
SDGs that we are targeting

Promotion system and governanceRaw material procurement is mainly promoted by the Purchasing Division. The Risk Management
Committee is a Group-wide organization that is chaired by the President & CEO and consists of directors
as members. It manages and verifies procurement-related risks. The Purchasing Division collects risk
information related to procurement and reports it to the Risk Management Committee.

Risks, opportunities, and strategies
Risks• Failure to procure flavor and fragrance raw materials derived from natural resources due to climatechange• Stagnation of business activities and loss of corporate value due to slow response to social andenvironmental issues in the supply chain
Opportunities• Enhancement of development and manufacturing capabilities and reduction of lead time throughdiversification of items and suppliers
Strategies• Implementation of global raw material procurement• Investigation and development of alternative raw materials• Sustainability survey and support for suppliers

Main FY2022 initiatives
While continuing to obtain the RSPO certification, we shared the T. Hasegawa Supplier Guidelines with
suppliers, obtained their understanding, and requested them to submit a written consent. At the sametime, we conducted a questionnaire survey using the CSR Procurement Self-Assessment Tool (Global
18
Copyright© T. HASEGAWA CO., LTD. All rights reservedCompact Network Japan). In FY2022, the response rate of the written consent and questionnaire
accounted for 60% of the total transaction amount.
Implementation of supplier assessment
FY2022 survey
 Survey format: Questionnaire using the CSR Procurement Self-Assessment Tool
 Target: Top 89 suppliers in terms of the purchase amount, out of approximately 450 suppliers
 Response rate: 89% (79 companies responded) Results of response from 79 companies (Scoring percentage)
Corporate governance
Human rights

Local community

Supply chain

Labor

Information security

Environment

Quality/Safety

Fair corporate activities Trends, etc., based on the response:(1) Suppliers with a high scoring rate in corporate governance have built a sufficient CSR promotion
system and tend to score high points overall.
(2) Even if they have not developed a CSR promotion system, the companies generally scored highpoints in quality and safety, and it can be considered that they have implemented quality
management.
(3) Some suppliers that scored relatively high points had low scores in human rights and supply chain, so
human rights and supply chain management can be considered to be future issues, even forcompanies that have developed a CSR system to some extent.
We understand from the results of the questionnaire that there were no suppliers with significant risks
in terms of child labor or forced labor, or suppliers in which the freedom of association or the right ofcollective bargaining might be at risk.

19
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Procurement of certified raw materials
Based on requests from some customers, we purchase raw materials from Japan Good Agricultural
Practices (JGAP), ASIAGAP, or Rainforest Alliance certified farms.
Procurement of perilla oil
T. Hasegawa promotes the active use of distinctive flavor and fragrance raw materials in Japan aspart of its challenge to develop uniquely Japanese flavors. In order to procure perilla oil, which is
one such important flavor and fragrance raw material, we collaborate with a producers’ association
as described below to support stable production in terms of quality and quantity as well as forbusiness continuation.
 Provision of seeds: We provide seeds to producers every year for stable quality and yield of
perilla oil. With the cooperation of seed and seedling producers, we confirm the conditions of
production sites.
 Technical support: For improved productivity, we dispatch researchers and engineers to give
advice and support on production improvement and equipment modification. (*)
 Quality improvement support: We dispatch researchers to provide training and support for
quality inspection procedures that are difficult to learn only from a producers’ association.
 Supply of packaging, etc.: We provide containers for filling and packaging materials to a
producers’ association.
 Business continuity: We promote planned procurement for years ahead that will not significantly
increase or decrease the growing area, so that producers’ revenue will be stable.
(*)

Since it is difficult for the producers’ association to evaluate and design perilla oil extraction
equipment by itself when modifying it due to aging, we dispatched personnel who areresponsible for the equipment and an equipment contractor to carry out the modification in
2021.

Plan for the future
From FY2023 onwards, we will further advance the supplier assessment, extract issues based on survey
results, and cooperate with suppliers to solve the issues together, thereby solidifying the relations with
suppliers and promoting sustainable procurement.
• We will continue to share the T. Hasegawa Supplier Guidelines with more suppliers.
• We will continue to request suppliers in the supply chain to promote sustainability.
• We will continue to request suppliers to answer questionnaire surveys using the CSR Procurement
Self-Assessment Tool from the Global Compact Network Japan.
• We will ask overseas subsidiaries to assess local suppliers.
Ratio of implementation of supplier assessment (plan)• FY2023: 70%• FY2024: 80%• FY2025: 90%

20
Copyright© T. HASEGAWA CO., LTD. All rights reserved

CSR Policy 2: Environment
We will learn the importance of reducing the environmental impact and actively
engage in environmental protection and improvement activities.

Basic approach
We have established the Environmental Philosophy to clarify our stance towards environmental
protection and have formulated the Environmental Safety Activity Policy in order to embody thephilosophy.

Environmental Philosophy
T. HASEGAWA CO., LTD. recognizes that the important common issue facing all of humanity is
to pass on this irreplaceable planet to future generations. As a comprehensive flavor andfragrance manufacturer, we give due consideration to environmental protection in all of ourbusiness activities.
Environmental Safety Activity Policy
In addition to environmental protection, we also view security and disaster prevention,
occupational health and safety, and chemical safety as important corporate themes. As such,
we incorporate these themes into our Environmental Safety Activity Policy and engage in
relevant activities.
Environmental Protection
1. Promotion of energy conservation
2. Promotion of resource conservation and effective use of waste products
3. Odor countermeasures/Environmental pollutant emissions reduction
4. Strengthening of the environmental management system (EMS)
5. Promotion of green purchasing
Security and Disaster Prevention
1. Promotion of hazardous material safety measures
2. Promotion of disaster-prevention and safety measures

Occupational Health and Safety
1. Promotion of labor safety measures
2. Promotion of occupational health activities
3. Improvement of labor environment

Chemical Safety
1. Development of a chemical substance management system
2. Promotion of chemical safety measures

21
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Relation with stakeholders
Information disclosure to customers
We disclose information via platforms, such as the CSR Procurement Self-Assessment Tool (Global
Compact Network Japan), Sedex, EcoVadis, and CDP. We also respond to supplier surveys conducted bycustomers.
Environmental education for employees
We provide multifaceted environmental education as part of our efforts to improve the environmental
awareness among employees.
 Training and information provision via the intracompany website.
We post environment-related pages on our intracompany website and provide a Sustainability Reportand other environmental information.
Since FY2022, we have been providing e-learning classes on the basic knowledge of SDGs to all
employees in Japan, including employees assigned to overseas offices (excluding employees who areabsent for a long period of time). We conducted a comprehension test after the session and achieveda response rate of 100%. We disclose the response results on the intracompany website in an effort toimprove employees’ knowledge on sustainability.
 Internal environmental seminars
The Environmental Safety Committee, Education Committee, etc., of each factory plan and holdseminars and study meetings on environmental issues. In response to requests from sites, we held somestudy meetings led by members of the CSR Division.
 External environmental seminars
Employees involved in environmental safety work participate in professional seminars, lecture meetings,
exhibitions, etc., in an effort to upgrade their environmental knowledge.
 New employee education
Each factory provides education and training to new employees. We also conduct environment andsafety-related training during internal seminars for employees, including group training provided whenentering the Company.
 Environmental education under the environment management system (ISO 14001)
The Fukaya Facility, the Itakura Facility, and the R&D Center conduct education and training in a planned
manner as part of our ISO 14001 environmental management system (EMS). We have also installed an
ISO 14001 message board in each workplace and put environment-related information, including theEnvironmental Policy and environmental promotion posters, in an effort to promote environmental
protection.
Information disclosure to stakeholders
We post sustainability information (including this Report) on the Company website.
SDGs that we are targeting22
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Promotion system and governance
Promotion system
We have built and promote an environmental safety management system in accordance with theEnvironmental Safety Management Rules.
In addition, we have obtained the ISO 14001 certification, an international standard for environmental
management systems, at our Fukaya Facility, Itakura Facility, and R&D Center. Our EMS is jointly
managed by the Production Division and the R&D Division.

(1) Company-wide Environmental Safety Committee
1) The Committee is chaired by an officer in charge of CSR appointed by the President & CEO and it
deliberates and decides on company-wide policies and activity plans related to environmental
protection and safety measures.
2) The Committee receives reports on environmental safety activity plans, activity results, etc., from eachsite, and coordinates activities from a company-wide perspective.
3) The Committee selects auditors of environmental safety audits (environmental protection, security
and disaster prevention, occupational health and safety), and conducts annual audits at each site.
(2) Environmental Safety Committee of each site1) We have established an Environmental Safety Committee at our head office, R&D Center, Fukaya
Facility, and the Itakura Facility. It is chaired by the responsible officer, factory director, etc., and heldat these sites, excluding the head office, every month.
2) Each Committee sets out specific activity policies and targets in accordance with the company-wide
activity policy and promotes environment and safety-related activities.
(3) CSR Division
1) The Division develops and promotes basic policies on CSR and the SDGs.
2) This Division is responsible for the overall management of environmental safety activities at T.
Hasegawa.
3) The Division plans and manages company-wide Environmental Safety Committee meetings andenvironmental safety audits as a secretariat.
4) The Division discloses Sustainability Reports and other related information on our website, etc.
23
Copyright© T. HASEGAWA CO., LTD. All rights reserved

(4) ISO 14001
In 2001, the Fukaya Facility and the Itakura Facility obtained an ISO 14001 environmental management
system (EMS) certification from the Japanese Standards Association and have since conducted relevant
activities. Note that the current certifying body is DNV Business Assurance Japan Co., Ltd. The
Production Division has a particularly large environmental impact compared to other divisions of theCompany. However, the two facilities cooperate to work on continuous improvement by implementing
the PDCA cycle based on the ISO 14001 system. In June 2012, we added the R&D Center to the scope of
certification in an attempt to strengthen the efforts of reducing environmental impact from the R&D
development phase. As for overseas sites, the Suzhou Facility has been certified since 2015.
ISO 14001 Environmental Policy
As a comprehensive flavor and fragrance manufacturer involved in the production, research, anddevelopment of food flavors, cosmetic fragrances, synthetic flavors and fragrances, food additives, foods
and cosmetic materials, the Fukaya Production Center and the R&D Center of T. HASEGAWA CO., LTD.
recognize the importance of achieving harmony with the environment and aim to become companies
that are trusted by society. To achieve this, we will conduct activities related to the environment inaccordance with the following policies.
(1) Promote resource and energy conservation and work to protect the global environment.
(2) Promote the reduction and recycling of waste products.
(3) Promote coexistence with local communities by strengthening environmental management at
applicable sites and surrounding areas and working to prevent pollution.
(4) Comply with air, water, and other laws and agreements related to the environment.
(5) Conduct internal audits, etc. to make continuous improvements to the EMS.
(6) Provide environmental education to all employees to improve their environmental awareness.

Governance
Our Environmental Safety Management Rules state that each factory shall conduct an environmental
safety audit annually and report the results to the Strategy Committee. Both the Production Division andthe R&D Division are ISO 14001 certified and are subject to confirmation as to the effectiveness of theenvironment management system.
Environmental safety audits by the company-wide Environmental Safety Committee
Since 1997, the Environmental Safety Committee has been conducting audits related to environmental
protection and safety measures.
From 2008 onwards, we reorganized our auditing framework into three categories: Environmental
Protection Audits, Security and Disaster Prevention Audits, and Occupational Safety and Health Audits to
conduct more detailed checks. We select expert auditors for each audit category. They check forcompliance with environmental laws, the status of activities, and the management status at relevant
facilities, and issue an improvement recommendations report for matters that need to be improved. In
response, the site to be audited creates an improvement plan for the issues that were pointed out andimplements the improvements after reporting to the company-wide Environmental Safety Committee. In
FY2022, an audit was conducted at each site in July. The results are to be deliberated by theEnvironmental Safety Committee, reported to the Strategy Committee, and then referred and reported
to the Board of Directors as necessary.

24
Copyright© T. HASEGAWA CO., LTD. All rights reserved

ISO 14001 and internal audit (environmental)
We have obtained an ISO 14001 certification for the Fukaya Facility, the Itakura Facility, and the R&D
Center. An internal audit is conducted by the Internal Audit Team as prescribed in the Environmental
Manual.
In the Production Division, which has a particularly large environmental impact compared to otherdivisions of the Company, the two factories cooperate to manage the operations (implementing PDCA)
based on the ISO 14001 system.
If any remark is made, a corrective action is taken quickly and then passed to other divisions in an
attempt to make continuous improvements.
Note that the Suzhou Facility in China obtained the ISO 14001 certification in 2015 and has been
engaging in environmental improvement activities since then.

Risks, opportunities, and strategies
Risks Administrative actions or lawsuits due to insufficient compliance with laws and regulations
 Hindering the environmental protection of the local community Reputational damage
 Transactions stopped by customers, etc.
 Raw material crop failure due to climate change Disruption of the supply chain due to a disaster, etc.
Opportunities
 Response to social needs brought by climate change

Strategies
 We will thoroughly comply with laws and respond to risks.
 We will solve environmental issues in accordance with the CSR Policy and incorporate them in our
growth strategy.
Related measures
 The Strategy Committee considers and decides on targets from a long-term perspective, and thecompany-wide Environmental Safety Committee manages the progress of policies and promotes
awareness among the entire Group.
 We ensure that measures against global warming are taken (reduction of energy consumption and CO2
emissions through the activities of the Environmental Safety Committee, effective use of resources andwaste products through resource conservation, and composting of waste products).
 We join platforms, including the CSR Procurement Self-Assessment Tool (Global Compact Network
Japan), Sedex, EcoVadis, and CDP and maintain transparency through information disclosure.
 We expand transactions with customers by disclosing information and ensuring traceability.
 We accelerate innovation and develop, propose, and sell new products to achieve the SDGs.
 We contribute to resource conservation for container materials through thinner and lighter weight PET
bottles by using Carbonation Enhancer®, a natural light degradation inhibitor, etc.

25
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Main FY2022 initiatives(1) TCFD initiatives and CDP evaluation
The T. Hasegawa Group declared its support for the TCFD recommendations in 2022 and disclosed ouranalysis of climate change risks.
As part of this process, we are conducting a scenario analysis in light of the requirements of the TCFD.
For details, refer to the “Climate change risk analysis of the T. Hasegawa Group.”
Home > Sustainability > Disclosures Based on TCFD Recommendations > Climate change risk analysis of
the T. Hasegawa Grouphttps://www.t-hasegawa.co.jp/files/en/sustainability/Disclosures_Based_on_TCFD_Recommendations.pdf

Note that, under the CDP climate change category in FY2022, we achieved the B ranking in the
management level, indicating that actions are being taken for environmental risks and thatenvironmental risks and their impacts are tracked, mitigated, and eliminated.
(2) Environmental accounting
To ensure efficient and effective environmental protection activities, we referenced the Environmental
Accounting Guidelines published by the Ministry of the Environment to conduct environmental
accounting. (Reference: ESG Databook 2023)(3) Initiatives for mitigating environmental impact
 Energy use
We take energy conservation as an important issue and are proactively working on it. In addition to
conducting company-wide energy conservation activities, we promote energy conservation by updating
all boilers used in the Production Division to models with less CO 2 emissions and better combustion
efficiency and by installing special high-voltage power receiving and transforming equipment and energy
monitoring systems. The Fukaya Facility and the Itakura Facility, which are Type 1 Designated Energy
Management Factories as defined by the Energy Conservation Act, have established energy usage
optimization standards and are working on energy conservation based on them.
In FY2022, we improved manufacturing processes, streamlined the formula, reviewed the use of steam
to reduce loss, increased the efficiency of boiler operations, and so on. As a result, the energy
consumption was reduced by 1,372 GJ compared to the previous year and the energy consumption rate
per unit was improved by 4.2%, achieving the target year-on-year reduction of 1.6%. (Reference: ESG
Databook 2023)
 CO2 emissions
In FY2022, we reduced CO2 emissions in scopes 1 and 2 by 1.6% compared to the previous year. For ourtarget of 46% reduction by FY2030 from the FY2013 level, we have managed to reduce the emissions by
22%.
We started green power procurement as part of the reduction plan. At the head office building, 100% of
the electricity used has been procured from green power sources since December 2021, while at the
R&D Center, 10% of the electricity used has been procured from green power sources since March 2022.
In the Production Division, which uses more electricity, the Fukaya Facility started to procure 10% of theelectricity used from green power sources in January 2023 and the Itakura Facility is scheduled to startprocuring 10% of the electricity used from green power sources in June 2023.
We received a third-party validation of CO2 emissions (scopes 1 to 3) for the Company alone for FY2021
and for the consolidation of Group companies in Japan for FY2022. (Reference: ESG Databook 2023)
26
Copyright© T. HASEGAWA CO., LTD. All rights reserved Water use
We use water in our manufacturing processes, as well as for cooling and cleaning. So far, we have been
striving to reduce water usage by reducing the use of cooling water through the implementation of
better manufacturing methods and by reducing the use of water through the optimization of cleaning
methods and additions of cooling water recycling equipment. In FY2022, we reduced the amount ofwater usage by 1.3% compared to the previous year.
In addition, in light of rising global interest and the importance of water resources in addition to climatechange, the company-wide Environmental Safety Committee (chaired by the officer in charge of CSR)
developed a strategy for water risks and built a mechanism to supervise initiatives for water risks.
The Environmental Safety Committee sets numerical targets using data on the amount of water used in
the past. The Production Division, in which water usage is particularly high, reports the reasons for theincreased or decreased usage and the reduction measures implemented every month. (Reference: ESG
Databook 2023)
At the moment, we understand that the water risk in the production area of the Company is not high.
However, since we recognize that water is a precious resource globally and it is important to strengthen
its management, we will continue to manage water risks properly.
 Wastewater treatment
Since we installed a wastewater treatment system at the Fukaya
Facility in 1969, we have been improving our wastewater
treatment by increasing wastewater treatment facilities using
various water purification technologies, such as the activatedsludge method, dissolved air floatation method, anaerobic
method, coagulation and sedimentation method, and themembrane filtration method.
Wastewater from each facility is treated through a tertiary
treatment process. Wastewater from the R&D center is treated
Wastewater treatment equipment(Itakura Facility)
through to the secondary treatment process before being
discharged to the sewer system. We comply with wastewater standards in terms of regulation values,
etc., as prescribed in the Water Pollution Control Law, prefectural ordinances, and agreements with
communities. (Reference: ESG Databook 2023)
 Effective use of waste products
We manufacture a diverse range of flavor and fragrance products, which generate various waste. We
work to effectively use such waste and proactively promote resource recycling of waste cans, paper,
waste glass, oil, and so on. We also work to limit the generation of landfill waste. The effective utilization
rate of waste products was 96.4% in FY2022. (Reference: ESG Databook 2023)
We ask a business operator that manufactures recycled cans to treat cans that do not have much odor
and another business operator with recycling technology to treat some waste liquid.
As seen in the enforcement of the Plastic Resource Circulation Act in Japan in 2022 and theintergovernmental negotiations to formulate a legally binding international document (treaty)
concerning plastic pollution, we recognize the reduction and waste treatment of plastics as issues that
require a more serious response. We sort plastics into recyclable conditions.
When choosing waste service companies, we visit the treatment site to check if they treat waste
properly and we also conduct periodic audits. In addition, we also have a responsibility as waste
generators, so we audit the Fukaya Facility, Itakura Facility, R&D Center, and head office regarding theconditions of waste treatment as part of our environmental safety audit once a year. If there is any
27
Copyright© T. HASEGAWA CO., LTD. All rights reservedremark, correction is taken immediately. During an environmental safety audit in FY2022, it was
confirmed that waste management was properly conducted.
As an example of effective use of waste products, the large amount of residue generated after extracting
natural products (botanical residue) goes through fermentation composting at Koumi Compose Co., Ltd.
in Koumi-machi, Minamisaku-gun, Nagano (45% investment by the Company) and then used by highlandvegetable farmers.

Laying compost (Koumi-machi, Nagano)

Vegetable field (Koumi-machi, Nagano) Odor measures
As a company that manufactures flavors and fragrances, we pay
extra attention to odor measures (malodor prevention). We work
to prevent the emission of odors by adopting many deodorizing
equipment using various deodorizing technologies.
We also conduct regular environmental patrol activities in our
premises and the surrounding areas as part of our odor
measures.
Deodorizing equipment (Itakura Facility) Dust collection measures
Dust collectors are installed in some manufacturing divisions as part ofour efforts to improve the work environment during manufacturing.
 Biodiversity protection
The production of flavors and fragrances takes up resources, such as energy, natural and synthetic raw
materials, and water, which may have some effect on the ecosystem in the entire value chain.
One of the themes in which we can contribute with flavors and fragrances is to develop alternatives for
widely consumed food resources, and to reduce the amount of such resources used. For example, fooditems that are expected to be in greater demand (such as meat, milk, sugar, lard, palm, coffee, tea,cacao, and nuts) can be delivered to consumers without making them give up on their preferences, if theuse of such items in processed food is reduced and they are supplemented with flavors and fragrances
instead. The use of flavors and fragrances not only protects food resources, but also makes it possible tostably supply food at lower prices than natural food.
The second theme is reduction of food loss. Using formulation technology to create powdered flavors
and fragrances not only reduces the container and transport costs for carrying flavors and fragrances,
but also improves food storage. Furthermore, by using Carbonation Enhancer® and light degradation
inhibitors, we contribute to making lighter PET bottles and extending the food expiration dates.
While promoting activities that take into consideration the nature of our business and the characteristicsof the community, we will work on deepening our understanding of biodiversity through internal
education to systematically understand the relationship between our business activities and biodiversity.
28
Copyright© T. HASEGAWA CO., LTD. All rights reserved

29
Copyright© T. HASEGAWA CO., LTD. All rights reserved

In FY2022, we started to collect information in an attempt to launch various activities so that we canshare the information related to biodiversity from the next fiscal year onwards.
(4) Environmental targets and results

Plan for the future We will promote renewable energy procurement and work to reduce CO2 emissions in scopes 1 and 2 in a mediumto long-term perspective.
 We will continue third-party validation of CO2 emissions to maintain the accuracy of our calculation methods andthe reliability of our data.
 We will set a water use reduction target and work to reduce the amount of water used while checking the progressof measures.
 We will ascertain risks, opportunities, and the impact of biodiversity and will consider sharing information in linewith the Taskforce on Nature-related Financial Disclosures (TNFD).

30
Copyright© T. HASEGAWA CO., LTD. All rights reserved

CSR Policy 3: Human rights and labor
We will respect human rights and diversity, work to improve the welfare of
employees, and realize a safe and comfortable workplace.

Basic approach
Basic Policy on Human Rights
The Company will support international human rights standards, such as the Universal
Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at
Work, and the United Nations Global Compact, and will act in accordance with the policy
below based on the United Nations’ Guiding Principles on Business and Human Rights.
1. We never engage in child labor or forced labor.
2. We comply with regulations on working hours, holidays, and minimum wages stipulatedby the law.
3. We do not discriminate people in terms of hiring, promotions, and careeradvancements.
4. We do not allow any harassment that harms workers or the work environment.
5. We endeavor to prevent accidents and disasters by prioritizing the health and safety of
the workplace and workers.
6. We have proper and faithful discussions with labor representatives.

We will check the status of compliance with items 1-6 of the above policy and work to builda system for identifying, preventing, and mitigating any negative impact on human rights
related to the Company’s business activities.
In the event that it becomes clear that the Company has caused or contributed to a negative
impact on human rights, we will work to remedy or correct the situation through proper
procedures.

Promotion system and governance
Human rights and the labor environment are the foundation of compliance as well as essential elements
for improved corporate value. As such, the Compliance Committee, which is chaired by the President &CEO and consists of directors in charge of Internal management control, officers in charge of therespective divisions, and others, collaborates across divisions to ascertain the issues related to humanrights and the labor environment and make improvements. The Committee also reports to the Board of
Directors as necessary.
Initiatives on respect for human rights
The Group has established the Compliance Regulations as well as the T. Hasegawa Corporate Code of
Conduct to be followed by all employees as they engage in business activities, and they include items
related to respect for human rights. We strive to make sure all of our employees are aware of the Codeof Conduct in order to spread awareness of respect for human rights and prevent issues related tohuman rights.
31
Copyright© T. HASEGAWA CO., LTD. All rights reserved Response to human rights risks
The Group identifies human rights risks that should be dealt with in order to prevent or mitigate thenegative impact of business activities on human rights. We take measures for identified risks and regularly
monitor and disclose information to improve our efforts.
 Process for responding to human rights risks

 Identifying human rights risks
The risk survey of divisions conducted jointly every year by the Risk Management Committee and theCompliance Committee incorporates the viewpoint of human rights risks. Human rights risks extracted
by the survey are categorized, and businesses and divisions that are at risk are identified.
 Evaluation of human rights risks
Currently, the Group organizes and responds to the following main human rights risks.

32
Copyright© T. HASEGAWA CO., LTD. All rights reserved Measures and monitoring of human rights risks
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.
 Establishment of a whistleblowing service
As part of our complaint handling mechanism, we have established the person responsible for generalaffairs, the person responsible for human resources, an outside lawyer, and a full-time auditor for eachsite as the whistleblowing/hotline service contact. The service can be accessed from multiple locations
inside and outside the Company from the dedicated banners on the intranet and direct e-mail address.
 Providing harassment prevention training
Harassment in the workplace not only damages the personality and dignity of the person who isharassed, but also results in a loss of desire to work or self-confidence or may even cause the mental
health to deteriorate. Based on the Company’s conviction that harassment shall not be allowed, we
provide a wide range of training intended to enlighten employees and prevent harassment. In addition
to the training intended for new managerial staff, which we provide every year, we also provided training
for senior management level in FY2022.
SDGs that we are targeting[Human resources development]
Risks, opportunities, and strategies
Risks If there are not enough human resources with appropriate skills, business operations will besuspended, and skills transfer will be difficult.
Opportunities
 Increased employee motivation
 Increased production efficiency as a result of improving the work environment
Strategies
In accordance with the management policy to create a safe and comfortable work environment for our
employees, we seek to create an energetic corporate culture in which human resources can grow andmaintain their motivation, and we are committed to providing employees with opportunities to advancetheir career fairly and without regard to race, nationality, gender, religion, disability, or other attributes.

33
Copyright© T. HASEGAWA CO., LTD. All rights reservedEducation system* Program to improve the knowledge and skills of employees who have been with their divisions foraround three years by providing training at a different R&D center.
Ensuring diversity in the appointment, etc., of core human resources Our approach to ensuring diversity
The Company respects the diversity of individual employees and has actively appointed excellent humanresources to management positions regardless of gender or nationality, or whether or not they are midcareer workers. After appointing such employees to management positions, we continue to provide
education, including management training, to improve their skills. The Company seeks to further
increase the percentage of women in management positions and will appoint women and mid-career
workers to move on to management positions in an attempt to address the ever-changing management
environment. We will also continue to appoint talented foreign nationals to expand our overseas
business based on the growth strategy.
[Voluntary and measurable targets and status of ensuring diversity]
Item
Current status
TargetTime of achievement
Percentage of women in
17.1%
18% or more
End of Sep. 2024
management positions
Percentage of mid-career workers
18.2%
Maintain 18% or
End of Sep. 2024
in management positions
more
Percentage of management
33.3%
30% or more
Maintain the current
positions filled by foreign nationals
status* The current status represents the result as of the end of September 2022.

Main FY2022 initiatives
Human resources system reform
We review the entire personnel system, including the job class system, evaluation system, compensation
system, and human resources development.
34
Copyright© T. HASEGAWA CO., LTD. All rights reservedBy clarifying the roles required by the Company (job class system) and introducing a corresponding
evaluation system, we have established a human resources system where the compensation iscommensurate with the performance. In FY2022, we reformed the system (excluding the compensation
system) in advance.
Key Points of New Human
Resources System

Achievement of management targets
Employee training and career realization

New Human Resources System

Job class system• Establishment of classes according toduties, skills, and preferences

Evaluation system• Reduce of seniority criteria andclarification of company requirements

Compensation system• System for working on challenging goals
closely linked to company andorganizational policies• Reduce seniority criteria and set
compensation according torole/performance• System connected to human resources
development based on company
requirements• Increase compensation levels for younger
and mid-career employees and set
compensation high enough to ensure
hiring competitiveness

Policy on the human resources system
This policy awards people who work hard and creates a corporate culture that encourages people to takeon challenges in response to changes.
Evaluation system
 Our approach to the evaluation system
The evaluation system is not only a system for evaluating employees’ performance, but also used as atool to promote the achievement of company-wide and organizational targets, as well as the growth ofindividuals. Therefore, the actions expected of employees are clarified and the degree of fulfillment of
required actions, roles, and specialty and the level of actual achievements are evaluated. Since theresults of evaluating employees’ performance encourage individuals to grow, we utilize the evaluation
system as the foundation for developing human resources.
 Important points of the evaluation system
Evaluation of achievements
Employees should work on challenging goals that are closely linked to the policy of the Company or
their organizations, and they are expected to obtain measurable achievements that are linked to thecompany-wide target. In addition to results, the relevant process is evaluated and the results arereflected mainly in their bonuses.
Evaluation of actions
The evaluation should be a system that leads to human resource development based on elements
required by the Company. The Company also evaluates whether expected actions corresponding to
the job class and course were taken. The results are reflected in the job class (promotion) and salaryof the relevant employee.
In any evaluation, an interview with the superior of the employee is required and human resources aredeveloped by providing appropriate feedback.
Having a proper interview for the performance evaluation and development of employees
We have introduced a cloud-based human resources evaluation system service in line with our new
human resources system reform.
The system allows the Human Resources Division to easily check target setting and records of eachinterview held as part of the evaluation, as well as to check the interview status of the people to beevaluated.
35
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Promotion of career development
Understand the roles at each tier and acquire the required skills
 Tier-specific training
We conduct training for new employees, mid-career employees, and new managerial staff. The
purpose of the training is for employees to understand the roles at each tier and acquire skills. We
implement a PDCA cycle and work to make improvements in the planning and management oftraining.
Support employees’ self-learning and growth Online study support system
We organize courses to meet a wide range of needs and promote self-enlightenment. Starting fromFY2020, we raised the percentage of subsidy for course fees for people who have completed thecourse with a good grade in an attempt to further encourage them to improve their skills.
 Support system for acquiring qualifications
When acquiring qualifications approved by the Company, such as those for certified public tax
accountants and labor and social security attorneys, the Company pays up to half of the course fees. In
addition, employees who have met certain requirements, such as those who have acquired a TOEIC
score designated by the Company, are provided with an incentive.
 Internal seminars
Employees from each division of the Company serve as lecturers on the operations of their respective
divisions and other current information. This allows participants to not only gain an understanding of
the entirety of T. Hasegawa, but also the connection and relationship between their own divisions andthe division of the lecturer, which can be of help to their own business. By teaching others, thelecturers themselves can also deepen their understanding of the operations of their own divisions.
 Life planning seminars
The Company pays the full amount of fees to employees and their spouses who wish to attend
external seminars on living a fulfilling second life after retirement.
 Re-employment support for those who are resigning from the Company upon reaching the retirementage
We offer a “Re-employment Support Program,” which provides re-employment know-how to thoseseeking re-employment, and a “Second Life Program,” which is for those seeking to start their own
businesses or relocate to overseas, etc., to help those who wish to set out on a new path after
reaching the retirement age.
Foster management awareness among younger employees Junior board
We provide selective training to cultivate the ability to have a medium- to long-term vision, acquirebusiness management skills, and raise the awareness of participating in management.
Support the development of global human resources Language training
The Company covers the full costs of language lessons by native speakers for employees who need
English or Chinese language skills.

36
Copyright© T. HASEGAWA CO., LTD. All rights reserved Training before overseas assignment
The Company invites outside lecturers to provide lectures to employees assigned to overseas
subsidiaries on the cultures, laws, and business practices of the countries where they have been
assigned.

Support management that encourages growth and autonomy
 Management training
The purpose of this training is to help managers to understand and practice management thatencourages the growth and autonomy of their subordinates. To ensure that everyone has the same
perspective and mindset, the course is open to employees who are in management positions for acertain period of time.

Train senior management
 Senior management training
Sixteen members of senior management took a business school course.

Plan for the future
Promotion and management of the human resources system reform
Using the evaluation system introduced in FY2022, we started to operate a new compensation system in
April 2023.
Compensation system
 Our approach to the compensation system
In order to encourage employees to achieve the actions and results expected from them, we will
focus on treating the desired actions and results to appropriately guide employees in developing aninterest and making efforts.
 Important points of the compensation system
Seniority-based wages are discontinued and the weight of the seniority criteria is reduced. In
addition, a managerial position allowance is established to reward the relevant role. Bonus
payments to employees are balanced by distributing payments according to the performance
evaluation of each individual, and high performance will be rewarded accordingly. In order to hire
excellent human resources as mid-career hires, we have revised the compensation levels, in which
the mid-career employees are treated well.
Providing training to those who evaluate employees’ performance in line with the human resources
system reform
We will continue to provide training to those who evaluate employees’ performance so that they
understand the intent of the new human resources system reform and perform proper evaluation anddevelopment.
 Related data (Reference: ESG Databook 2023)

37
Copyright© T. HASEGAWA CO., LTD. All rights reserved

[Creating safe and rewarding workplaces]
Risks, opportunities, and strategies
Risks Occurrence of occupational accidents
 Receiving administrative punishment, facing a lawsuit or ruined reputation as a result of an
occupational accident
 Loss of talented human resources due to deterioration of the work environment
 Resignation from work for nursing care and childcare Increased difficulties in hiring due to reputational damage
Opportunities
 Increased job application rate and employee retention rate Increased production efficiency as a result of improving the work environment
Strategies
In accordance with the management policy to create a safe and comfortable work environment for our
employees, we seek to create an energetic corporate culture in which human resources can grow andmaintain their motivation.
Programs for a comfortable work environment
ProgramDescription
Self-assessment system
The system allows employees to inform the company
not only of their work but also of their personal
circumstances for the purposes of revitalizing theworkplace, ensuring appropriate and effective allocationof personnel, and utilizing human resources effectively.
No Overtime Day
Every Wednesday is designated as No Overtime Day,
which is intended to review the way we work andincrease operational efficiency. At the same time, byreducing overtime work, we encourage employees toenhance their private lives and lead healthy lives.
Leave and reduced working hour system
Leave: Employees who have applicable family members
for child or nursing carecan take 5 days (or 10 days if they have two or morefamily members requiring care) of paid leave per year.
Reduced working hours: Employees who have applicablefamily members can reduce their working hours to fiveor six hours per day.
Hour-based paid leave system for child or
The system allows employees to take family care or
nursing carenursing care leave on an hourly basis.
Job search registration system for
The system provides information on relevant job
employees who left their jobs for child or
openings to employees who resigned for reasons suchnursing careas child or nursing care and wish to receive mid-career
recruitment information.
Commendation for long service
Employees who have reached their 15th, 25th, and 35th
work anniversaries are granted special incentive leaveand presented with an award.
Cultural and sporting events
We hold company-wide events such as sports
competitions, workplace events such as going totheatres, and various club activities as voluntary
participation events for employees to promote

38
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Program

Description
friendships with other employees outside of work andmotivate them for work.

Fair treatment and evaluation of non-full-time employees
 Payment of the same family allowances, housing allowances, and congratulatory or condolence moneyas those for full-time employees Enhancement of long-term absence and leave systems
 Introduction of an evaluation system to have follow-up interviews
 Reflection of evaluation results in salary and bonuses to increase employee motivation
Note that the Company pays at least the minimum wage in any employment category required by theprefecture where each of our sites is located.
Obtaining the “Kurumin” certification logo
In 2022, the Company was certified for the third time for conforming to standards
based on the Act on Advancement of Measures to Support Raising Next Generation.
Occupational health and safety initiatives
We work to improve the workplace sanitation by placing top priority on ensuring occupational safetyand disaster prevention. The company-wide Environmental Safety Committee formulates company-wide
policies and activity plans, and each site works on workplace environment safety and security anddisaster prevention activities in compliance with the Fire Service Act and other laws and regulations
related to safety and disaster. At a workplace that handles chemical substances at the Fukaya Production
Center, the Environmental Safety Committee serves as the main body to regularly patrol the workplaceand check and improve hazardous locations.
System for hazard identification, risk assessment, and incident investigation
A monthly Occupational Safety and Health Committee meeting is held at each site. They deliberate andshare information on safety and health activities while looking at the cause analysis of and measures for
accidents and occupational accidents and the status of those who are absent due to illness.
Furthermore, the division head of each workplace identifies the hazard in work and assesses risks in theworkplace, and then takes action appropriately. They communicate the danger of handling chemical
substances and their toxicity, in particular, to all employees, and regularly measure the organic solvent
concentration in the work environment to assess its effect on the health of employees. We takemeasures to reduce occupational accidents and to prevent health issues at the Fukaya Production Centeras a whole.
In the event of a serious accident or an occupational accident, a company-wide Accident Investigation
Committee is established. We have established a framework of reporting the accident to the Committee
quickly, investigating causes, developing recurrence prevention measures, and implementing themeasures.
On September 15, 2022, there was a serious accident resulting in the death of one employee and injury
of two employees. Accordingly, an Accident Investigation Committee was established to investigate thecauses of the accident and develop recurrence prevention measures. The details on the investigation of
causes of the accident and proposals on recurrence prevention measures by the Accident Investigation
Committee were announced on November 11 of the same year. We take this accident, which resulted ina fatality and injuries, seriously. In order to prevent such an accident from occurring again, we will
39
Copyright© T. HASEGAWA CO., LTD. All rights reserved

ensure that the following recurrence prevention measures are steadily implemented, as well as build aproper and effective management system.
 Changing the manufacturing processes
 Improving the work area (air supply, local ventilation, etc.)
 Permanently installing a carbon monoxide concentration measurement instrument, installing an
alarm system, etc.
 Providing safety education and training
In FY2022, six occupational accidents (including one fatal accident) occurred at Fukaya Production
Center. We took measures to prevent occupational accidents from occurring again, including making
improvements to hazardous locations based on special safety patrol and making sure that all employees
are trained. Going forward, we will thoroughly investigate and take corrective action for potential risks
and root causes of occupational accidents to eliminate them.
System to improve a series of processes
Based on audits of factories by the company-wide Environmental Safety Committee regarding
environmental safety and work safety, we quickly improve matters requiring improvement andsummarize such activities in Corrective Action Reports.
System for employees to report on danger
At the Fukaya Production Center, employees provide information on near misses and improvement
requests during morning meetings and safety roundtables at each workplace so that an understandingon the potential danger at the workplace can be shared among all members. The Occupational Safety
and Health Committee has also built a system to report on near misses and applied it to otherworkplaces. We take measures to reduce risks for reported near misses.
Providing training on safety and health to employees
The Fukaya Production Center regularly holds occupational safety workshops for all employees in aneffort to raise employee awareness with respect to safe work. Our employees also actively participate inoutside lectures to obtain the qualifications necessary for work.

Main FY2022 initiatives
Support for new and mid-career hire employees
 In order to eliminate the anxieties associated with doing their first full-time job, we have introduced amentor system for new employees, in which young employees who are close in age regularlyinterview them and provide mental support and other support for developing their careers.
 We have one-on-one interviews with individual mid-career hires to address any anxiety that they may
feel about the new environment, so that they can exercise their ability as soon as possible.

Initiatives for developing a comfortable work environment Adoption of staggered work hours
 Addition of short work shift patterns for child and nursing care
Encouragement to take paid leave We encourage division heads to let their employees take paid leave.
Understanding employees’ requests through labor union meetings
40
Copyright© T. HASEGAWA CO., LTD. All rights reserved In order to understand employees’ requests properly, a meeting with the labor union is held every
month.
Occupational health and safety initiatives
 Prevention of overwork and interviews with industrial physicians: We ask employees who haveworked overtime exceeding the level set out in the internal regulations if they would like to have aninterview with an industrial physician. We also encourage them to be aware of their physical health.
 Health checkups: Employees who are 35 years of age and older can receive a full medical examination
at the Company’s expense, and we encourage them to actively undergo health checkups.
 Stress checks: Conducted once a year, and the group analysis results are used in mental health care.
We recommend employees who were determined to have elevated stress levels to talk with anindustrial physician.
 Provision of health-related information: We distribute a monthly insurance newsletter. We have anindustrial physician go over the health checkup results and encourage applicable employees toundergo an examination. Information on health issues and work environment from industrial
physicians is posted on the bulletin boards in the Company.
 Related data (Reference: ESG Databook 2023)

Plan for the future
In order to further promote the creation of a safe and rewarding workplace in accordance with the Basic
Policy on Human Rights, we will undertake the following initiatives.
 We will develop and create a system for human rights due diligence.
 We will continue the human resources system reform so that employees will be motivated to engage inwork.
 We will continue to consider an environment and system for the elderly to work comfortably.
 We will continue to consider an environment and system for handicapped people to work comfortably.

41
Copyright© T. HASEGAWA CO., LTD. All rights reserved

CSR Policy 4: Quality safety
We will become a leader in product safety.

Basic approach
In order to meet the customer requirement that products must be safe and reliable to use, the Group has
established a quality assurance system and prioritizes the supply of safe and reliable products.
Quality & Food Safety Policy
We will implement the following policies to provide customers with reliable products.

1. We value communication with our customers and we work to provide satisfying products that
embody their needs.

2. In all processes, from R&D to raw material procurement, manufacturing, distribution, sales, andadministration, we steadily fulfill our roles and duties and provide quality products and services
that our customers rely on.

3. We observe related laws and regulations, establish a quality assurance system that allows us toprovide safe, high-quality products, and work continuously to make improvements.

Relation with stakeholders
We are committed to providing products that customers can use with a sense of security and that are
valuable for customer success.
SDGs that we are targeting

Promotion system and governanceIn order to assure customers and consumers of the quality and safety of our flavor and fragrance
products, we have built a quality assurance system led by the Quality Assurance Division, which
communicates directly with the President & CEO. We value communication with customers and we
promote quality and safety activities. All raw materials that we use are registered under the system. Only
raw materials whose quality and safety have been verified are used to make sample pieces and products.
We focus on providing high-quality products and perform final inspection for all products for customers.

42
Copyright© T. HASEGAWA CO., LTD. All rights reservedOur quality assurance system

President
R&D Center

Quality Assurance
Division

Quality Control
CenterFacility

Supplier

Purchasing
Division

Sales
Division

CustomerCommunication with customers
Customer
Product Specification
SDS
Test Reports

Required quality

Assessment

Product

Complaints
Inquiries
Requests

Production

Sales

Sample presentation

Feedback

Planning

Development /improvement

Marketing

Quality Assurance

T.Hasegawa

Quality control from raw materials to products

We use a traceability system based on barcodes for processes from raw material acceptance to productshipment to ensure product quality so that our customers will be able to use our products with a senseof security. All information is traceable under the system, from product lots to manufacturing records,
product inspection results, lot numbers of raw materials used in the products, and raw material
acceptance inspection results.

43
Copyright© T. HASEGAWA CO., LTD. All rights reservedWe check the quality and safety information for the raw materials that we use, including standards,
allergies, and residual agrochemicals. We also confirm the compliance of compounds used in flavors andfragrances with related laws, including the Food Sanitation Act, the Fire Service Act, the Industrial Safety
and Health Act, and the Act on the Regulation of Manufacture and Evaluation of Chemical Substances,
etc. By always using raw materials with guaranteed quality and creating quality products, we provide
safe and reliable products and manufacture products while considering the environmental impact.
By enabling information to be traced using the traceability system, we aim to reduce the time it takes to
respond to customer inquiries so that we can provide information in a sustainable manner.
Laws related to chemical substances and our compliance
From the viewpoint that the components of flavors and fragrances we handle are chemical substances,
we actively and appropriately comply with related laws to protect the workers who are handling chemical
substances during manufacturing and transport, ensure the safety of users, and conserve the environment.
1. Application for registering new chemical compounds in accordance with Japanese laws
We perform the following in compliance with the Act on the Regulation of Manufacture and Evaluationof Chemical Substances:‑ Notification concerning “Low Production Volume of New Chemical Substances”‑ Request pertaining to “Small Production Volume of New Chemical Substances”
We perform the following in compliance with the Industrial Safety and Health Act:‑ Application and registration of “New Chemical Substances”‑ Application for “Small Production Volume of New Chemical Substances”
2. Publication of Safety Data Sheets (SDSs) supporting the Globally Harmonized System of Classificationand Labelling of Chemicals (GHS)
We disclose information on substances subject to law contained in flavor and fragrance products
through SDSs for all of our products so that customers will be able to use them safely. Applicable related
laws are as follows: Industrial Safety and Health Act
 Act on the Assessment of Releases of Specified Chemical Substances in the Environment and thePromotion of Management Improvement (Chemical Substances Management Law)
 Fire Service Act
 Ship Safety Act
 Act on Prevention of Marine Pollution and Maritime Disaster (Marine Pollution Prevention Law)
 Poisonous and Deleterious Substances Control Law
For products to be exported, we also issue SDSs corresponding to the GHS system of the export
destination country.
3. Information management and response to chemicals regulation trends in countries and law
amendment in Japan
We obtain information on chemicals-related regulation trends of countries and items listed in theregistered chemical substance list (inventory) through law search databases in and outside Japan, as wellas through industry organizations. We manage the chemical substances by registering information on
how they are obtained in our internal system, and we use this data to respond to inquiries from
customers.
As for amendment of laws in Japan, we work to obtain notifications from relevant government offices aswell as industry organizations. We collaborate with relevant divisions to respond to amendments to theIndustrial Safety and Health Act and the Chemical Substances Management Law, which are frequently
amended especially in recent years, when collecting raw material information and improving internal
systems. We do so while considering the fact that the frequency of counting the emissions of flavors andfragrances applicable to the pollutant release and transfer register (PRTR), updating SDSs, and changing
44
Copyright© T. HASEGAWA CO., LTD. All rights reserved

label indication as well as the number of materials subject to risk assessment will further increase in the
future.
4. Response of overseas subsidiaries
Our overseas subsidiaries are also responsible for complying with chemicals-related laws applicable toeach site.
 China(1) Main chemicals management regulations applicable to our subsidiaries in China (Shanghai Facility
and Suzhou Facility):Safety production regulations: Work Safety Law of the People’s Republic of China; Fire Control
Law of the People’s Republic of China; Regulations on the Control over Safety of Hazardous
Chemicals; Measures for Administration of Hazardous Chemicals Registration; and Catalog ofHazardous Chemicals

Occupational health and protection regulations: Law of the People’s Republic of China on
Prevention and Control of Occupational Diseases; Regulations on the Management ofOccupational Health at Workplaces; and Warning Signs for Occupational Hazards in the
Workplace
Environmental protection regulations: Environmental Protection Law of the People’s Republic ofChina; National Inventory of Hazardous Wastes; and Measures on the Management of Transfer
of Hazardous Waste(2) T. HASEGAWA FLAVOURS AND FRAGRANCES (SHANGHAI) CO., LTD. applied for a simplified single
item registration in accordance with the “Measures for Environmental Management of New
Chemical Substances” (Order No. 7 of Ministry of Environmental Protection) in 2020. (Note that thecurrent law on new chemical substance management in China is the “Measures for theEnvironmental Management Registration of New Chemical Substances” (Order No. 12 of the
Ministry of Ecology and Environment; enforced in 2021).)(3) Submission of SDSs
We issue SDSs that are in compliance with GB 30000: Rules for Classification and Labeling ofChemicals, GB 12268: List of Dangerous Goods, and GB 6944-2012: Classification and Code ofDangerous Goods. By registering the information on raw materials provided by suppliers in ourinternal system, we maintain GHS law information and submit SDSs according to the customer
request.
 Malaysia(1) Main chemicals management regulations in our subsidiaries in Malaysia:
Occupational Safety and Health Act 1994 (OSHA 1994)

Subordinate legislation of OSHA 1994: Occupational Safety and Health (Use and Standard of
Exposure Chemical Hazardous to Health) Regulations 2000 (USECHH Regulations)
The Malaysia Facility only manufactures food flavors, so it does not have to register chemical
substances. However, we internally manage records of substance names listed in the inventory ofhazardous harmful chemical substances of CLASS Regulations 2013 (2013 Regulations onclassification, labelling, and safety datasheets for hazardous chemicals).
(2) Submission of SDSs
We issue SDSs that comply with the CLASS Regulations 2013. We obtain SDSs of chemical
substances used as raw materials of food flavors from suppliers and issue an SDS for samples andproducts according to the customer request.

45
Copyright© T. HASEGAWA CO., LTD. All rights reserved U.S.
(1) Main chemicals management regulations applicable to our subsidiaries in the U.S. (3 sites in
California):
Our subsidiaries in the U.S. only manufacture food flavors and not new chemical substances, sothey are exempted from the law on the application for registration of new chemical substances.
However, Provision 65 (California state law) applies as a chemical substance management related
law. We provide a statement related to Provision 65 before the customer places the first order of a
product and/or upon request from the customer.
(2) Submission of SDSs
We issue an SDS in compliance with the GHS for samples and products according to the customer
request.
Product risk assessment (Risk assessment of chemical substances)
Factory employees regularly receive education on the danger, harm, and appropriate handling ofchemical substances and chemicals regulations in and outside Japan in order to appropriately manage
the chemical substances handled by the Company as raw materials. In addition, we conduct risk
assessments of chemical substances based on the SDSs of raw materials and intermediate products,
consider risk mitigation measures, and reflect the results in work procedures. We warn all workers who
handle chemical substances of the toxicity of chemicals and precautions for handling chemicals, andprovide exposure prevention measures (by installing local exhaust ventilation and wearing protective
equipment).
The R&D Center conducts risk assessments of all chemical substances used in the factories in accordancewith the Industrial Safety and Health Act, prepares a measure sheet according to the risk level, and put iton the intracompany website so that it will always be available to employees.
We will also respond to an increase in substances subject to risk assessments in the future due toamendments to the Industrial Safety and Health Act.
At our overseas subsidiaries, we also take action according to the actual situation there.
 China
The Shanghai Facility and the Suzhou Facility independently manage chemicals according to therespective local requirements. They formulate and manage the following management measures fromthe perspectives of safety production, occupational health and safety, environmental protection, andproduction risk management.
1) Obtain SDSs from raw material suppliers and register the information so that it can be searched oninternal systems.
2) Evaluate workshops in accordance with legal requirements to identify occupational hazards.
Regularly inspect workshops every year, publicly announce the results, and put occupational healthwarning marks at workshops.
3) Store flammable dangerous chemicals in specified warehouses.
4) Conduct a safety production risk assessment once a year to identify risks (such as the use, storage,
and transport of dangerous chemicals), and establish control measures and emergency
countermeasures to prevent safety production accidents from occurring.
 Malaysia
In order to confirm that a risk assessment has been conducted for all chemical substances and toascertain the impact of such substances on employees, our subsidiaries in Malaysia receive chemical
substance health risk assessments by external authorized reviewers registered with the Department ofOccupational Safety and Health (DOSH) of Malaysia in accordance with the Occupational Safety and46
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Health (Use and Standard of Exposure Chemical Hazardous to Health) Regulations 2000 (USECHH
Regulations). We installed local exhaust ventilation devices (fume hoods) at research labs based on therisk assessment results and in accordance with relevant regulations, and take management measures toconfirm the permissible exposure limit of employees. In addition, we provide protective equipment
approved by the Standard and Industrial Research Institute of Malaysia-Department of Occupational
Safety and Health (SIRIM-DOSH) to employees.
 U.S.
At our subsidiaries in the U.S., risk assessments of raw materials are conducted based on the hazard risk
information for respiratory organs of the US Flavor Extract Manufacturers Association (FEMA) or otherinformation provided by suppliers. All employees receive hazard communication training. The facilities
are in compliance with the requirements of government agencies as well as the Division of Occupational
Safety and Health (Cal/OSHA). Regarding exposure to employees’ respiratory organs during flavor
manufacturing, we observe the priority chemical substance list for health and safety provided by the
FEMA. Precautions on safety are all reflected in manufacturing process sheets so that employees canobserve them.
Quality Assurance Division
We confirm legal compliance at the raw material purchase stage to provide customers with productsthat they can use with peace of mind. In addition to complying with laws and regulations in Japan, we
check laws and regulations of destination countries of export products for our overseas customers, andprovide products that comply with the laws and regulations of the respective countries and regions.
We also promote automatic creation (digitalization) of product specifications to quickly provide
customers with accurate information.
Quality Control Center
The Quality Control Centers of the Fukaya and Itakura facilities manage the plant quality system andconduct quality inspections of products manufactured at the facilities and purchased raw materials.
Quality inspections are performed for all products and raw materials handled at the factories to provide
customers with products of stable quality.
In quality inspections, we are promoting the introduction of inspection equipment necessary forensuring the quality of products and raw materials and have established a system that allows us to carryout all inspections internally. Inspection results are automatically transferred from the inspection
equipment to a computer system by an automatic transfer system. Measurement, pass/faildetermination, and inspection card issuance are fully automated (digitalized), which help to prevent data
tampering. As a company that handles fragrances, we are also working on training sensory inspectors.
Only those who have been trained to distinguish fragrances and have passed our internal certification
test are involved in sensory tests as sensory inspectors.
International standard certification
 ISO 9001
In 1998, we acquired an ISO 9002 certification for the quality management system at our facilities. In
2003, we changed the registration to an ISO 9001 certification. In 2007, we expanded the scope andacquired a certification covering the entire Company. With strong leadership exemplified by the
President & CEO as top management, all employees involved in business activities cooperate in quality
activities.
In 2012, we obtained a FSSC 22000 certification for our food safety management system and thereafter
began rolling out an integrated management system of ISO 9001 and FSSC 22000. However, we havechanged the scope of ISO 9001 to cover the head office, branches, sales offices, R&D Center, and47
Copyright© T. HASEGAWA CO., LTD. All rights reserved

fragrance facilities with the certification and to cover flavor facilities with only the FSSC 22000
certification since 2019, in order to narrow down the activities at each division and focus on the mostsuitable standards.
In China, we acquired an ISO 9001 certification in Shanghai in 2004 and in Suzhou in 2010. Thesecertifications guide our quality activities.
 FSSC 22000
All divisions associated with flavors obtained an FSSC 22000 certification for their food safety
management systems in 2012. We acquired an international standard certification approved by the
Global Food Safety Initiative (GFSI), which allowed us to reduce risks related to food safety and provide
safe and reliable products that are recognized by our customers overseas as well as in Japan.
Since the FSSC 22000 standard specializes in food safety, we changed the scope covered by thecertification and has been obtaining the certification only at our flavor facilities since 2019.
We have also acquired certifications under international standards related to food safety at our overseas
subsidiaries.
 Overseas subsidiaries - Status of international food safety standards certification

Audit
 Internal audit
We conduct annual internal quality and food safety audit at all divisions. We provide specialized training
to some employees to serve as internal auditors, and those approved as internal auditors conduct
audits. By having employees audit one another, we can make detailed improvements to areas that we do
not usually notice and eliminate operational inefficiencies. Findings are shared with other divisions tomake ongoing improvements in every division.
 5S audit
Members from the Quality Control Center of the Fukaya and Itakura facilities enter the manufacturing
area to conduct hygiene audits based on the 5S, which stands for Seiri (Sort), Seiton (Systemize), Seiso(Shine), Seiketsu (Standardize), and Shitsuke (Sustain), by using a method equivalent to that used inexternal audits according to ISO 9001 or FSSC 22000. The hygiene control of a factory forms the basis offood safety and helps prevent contamination by foreign matter or microorganisms.
In China (Shanghai and Suzhou), regular patrols and audits are conducted by the 5S Management
Committee.
Management review
Reports are provided to management as a review of activities related to quality and food safety
performed during the year. We conduct ongoing improvement activities by reflecting on the year’s
activities and receiving approval and assignments from management.

48
Copyright© T. HASEGAWA CO., LTD. All rights reservedCompliance initiatives
We believe employee awareness is important to provide customers with high-quality products and weare engaged in activities to raise awareness of compliance. We repeatedly provide quality management
training at various occasions, including when employees join the company and when they are promoted.
In particular, legal information changes on a daily basis, so we constantly collect information fromindustry organizations and various media and work to promptly communicate legal information toemployees through intracompany websites, regular workshops, and various study sessions. Suchinformation is posted on intracompany websites and can be checked by employees at any time. Regularstudy sessions on food safety are held at the Fukaya and Itakura facilities to raise compliance awarenessamong employees.
Internal Halal Committee
In order to respond to requests from Islamic customers, our export products to Southeast Asian
countries are Halal certified to supply safe and reliable products. We established an Internal Halal
Committee by selecting members from related divisions, including Sales, R&D, and Production. The
Committee shares Halal-related information with our locations in China and Southeast Asian countries
and maintains the Halal certification. We have also entered into an agreement with the Nippon Asia
Halal Association as an advisor and we are working to solve various problems.
Response to complaints and the Quality Control Committee
When a complaint arises, quality-related divisions coordinate with each other to clarify the cause andcountermeasures and quickly respond to the customer. Serious complaints are promptly reported to
management, and proper measures are taken from the customer’s perspective. Complaint information isshared at Quality Control Committee meetings and with related divisions to help prevent recurrence.
When a manufacturing problem occurs, the cause and countermeasures are clarified in the same way as
when dealing with complaints, and information is shared at Quality Control Committee meetings to help
prevent recurrence.

Risks, opportunities, and strategies
Risks
 Loss of trust due to poor product quality
Opportunities
 Improved trust owing to improved product quality
Strategies
 Investing in aging equipment
 Improving the skill level of inspectors
 Reviewing manufacturing methods and conditions
 Improving the manufacturing skill level through education and training Enhancing the production system (supply system) Reducing the lead time by promoting fully automated issuance of inspection cards (digitaltransformation)
 Developing the sensory skill of manufacturing personnel to differentiate taste and scent throughsensory test division training

49
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Continued enhancement of the promotion system
 Strengthening the development of the flavor and fragrance industry and responding to theenvironment surrounding the industry
We actively dispatch employees to serve as members of industry organizations of other countries in an
attempt to respond to constantly changing legal information and develop the flavor and fragrance
industry as a whole. We also joined organizations in Japan, including the Japan Flavor & Fragrance
Materials Association (JFFMA) and the Japan Food Additives Association, as well as international
industry organizations, such as the IFRA and IOFI, as a special member from the JFFMA. We take quick
and appropriate action for the entire industry regarding various regulations related to the industry, andconduct activities that will help develop the entire flavor and fragrance industry.
In addition, we have joined the China Association of Fragrance Flavor and Cosmetic Industries (CAFFCI) in
China and the Flavor and Extract Manufacturers Association (FEMA) in the United States, and we dispatch
employees as committee members to participate in the activities of industry organizations.
 Enhancement of response to quality requirements in R&D
Various legal regulations are constantly changing, not only in Japan but overseas as well. In order topromptly respond to such changes, reflect them in products, and communicate the information tocustomers, it is necessary to actively participate in activities of industry organizations to collectinformation. The collected information is registered in an internal database and quickly reflected in
product information. Updated information can always be referenced by researchers, which allows themto always develop products based on the latest information, and is also used to provide information tocustomers.
 Enhancement of response to quality requirements in manufacturing processes
In the manufacturing process, we are always required to produce products with consistent quality. We
assign codes to every raw material and product. By managing them using barcodes, we prevent wrong
raw materials from being input and products from getting mixed up. In our blended flavor and fragrance
facilities and powder facilities, measurement data from scales used to measure raw materials and fillproducts is recorded in the system. The data is used in combination with barcode management to help
manage manufacturing and ensure traceability. By installing IT technologies in our facilities, we are
striving to always provide products with the specified quality.

Main FY2022 initiatives
Regular audits for ISO 9001 and FSSC 22000 were conducted, and we received approval for maintaining
the certifications with no serious findings. An audit was also conducted for the Halal certification and its
renewal was approved.
As an initiative for food safety, we pruned trees within the premises of the factories and strengthened
rat-proof measures by installing rat-proof devices. The raw materials that we use are delivered fromaround the world. As such, we strengthened the acceptance and inspection work in cooperation with
the Purchasing Division. We worked to improve our services by promoting the direct delivery of samples
from factories to customers with whom we have close relationship in business, thereby increasing our
response speed.
Employees engaged in the manufacturing of flavors and fragrances for foods take courses on HACCP andwork to gain knowledge on and raise awareness of food safety. (Number of employees who took HACCP
courses at the Fukaya Production Center in FY2022: 12)
We also work to increase awareness on quality and food safety system requirements and improve theoperations of standards by the employees of each division by providing courses on ISO 9001 and FSSC

50
Copyright© T. HASEGAWA CO., LTD. All rights reserved

22000. (FSSC 22000 course: Held once for 25 participants; ISO 9001 internal auditor seminar: Held oncefor 20 participants)

Plan for the future
Customers will always require safety and security. We will work to enhance our quality assurance system
and aim to achieve a level of quality that customers will continue to rely on. The Quality Assurance
Division, which communicates directly with the President & CEO, will lead our efforts to ensure close
collaboration with the Quality Control Center of the Production Division and the Quality Assurance
Divisions of our overseas locations so as to provide quality products that satisfy all customers both inJapan and abroad. At our factories, we will review the manufacturing methods and work to improve
operations in order to reduce the number of complaints and further reduce the rejection of goods in thefactories. We will also expand the introduction of the entrance and exit monitoring system for foodfactories. We will continue to obtain the ISO 9001 and FSSC 22000 certifications to improve quality andmaintain food safety.
Furthermore, the Production Division will proactively provide training for skill improvement at the R&D
Center in order to develop highly skilled workers who can take on the responsibility of flavor andfragrance production. At the Quality Control Center, we will work to improve the skills of inspectors andenhance the inspection system with the aim of providing customers with high-quality products.
In our overseas locations, we will also continue to train employees involved in production, introduce anoperational improvement suggestion program, and engage in process control in the Production Divisions
in the same manner as the Company.
We also realize that properly managing chemical substances to maintain health and the environment is
an important issue in building a sustainable society. Going forward, we will continue to monitor trends
on regulating related chemicals, including amendments to the Industrial Safety and Health Act, tocontinue to conduct risk assessments of applicable chemical substances and to reflect changes to SDSs.

51
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

52
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

53
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 Meeting54
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

55
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

56
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.

57
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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 in58
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

59
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 of60
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
61
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

62
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

63
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

64
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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 that65
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
66
Copyright© T. HASEGAWA CO., LTD. All rights reserved

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.

67
Copyright© T. HASEGAWA CO., LTD. All rights reserved

CSR Policy 6: Innovation
We will contribute to resolving social issues through the flavor and fragrance
business.

Basic approach
The Company is working to find unique flavors and fragrances by developing flavors and fragrances andcreating new flavor components through technologies for creating fragrance and creating taste, analysis,
synthesis, and ingredient development. The Company is also working to streamline and improve theefficiency of manufacturing methods.
With solving social issues as the starting point of our efforts to meet customers’ needs and potential
demand, we develop new products and search for new businesses from various viewpoints, including“responding to health consciousness,” “contributing to foodtech,” “providing health and enrichment,”
and “reducing lifestyle odors (bad smell that comes from daily activities, such as sleeping, walking, andeating).” In this way, we aim to contribute to realizing a rich and healthy life and creating a sustainable
society through flavors and fragrances.
─Contribution to society through the flavor and fragrance business─
Responding to health consciousness

Contributing to foodtech

Providing health and enrichment

Reducing lifestyle odors

Relation with stakeholders
Customers
We provide the ideal flavors and fragrances required by customers by providing high-quality and highvalue-added products.
Examples of customer success cases
We have visualized customers’ issues and established a proposal method to support productdevelopment by integrating marketing data and sensory evaluation data. By using our proprietaryflavor and fragrance visualization tool, we visualize the quality of scents, flavors, and fragrances. We
use these techniques and tools to share issues of customers in order to accurately respond to
customer requests.
Natural environment
To develop alternatives and reduce the use of food resources that are consumed in large quantities, weare developing flavors, fragrances, and ingredients that help us reduce the use of such resources inprocessed foods without sacrificing consumers’ preferences. In synthetic chemical studies, we aim todevelop environmentally conscious ingredients by continuing to reduce the amount of solvent used andto replace toxic substances while taking into account green chemistry. We contribute to reducing the
thickness of PET bottles and saving resources through the development of ingredients that enhance theflavor of natural raw materials and other ingredients that supplement the sensation of carbonation,
which will lead to the protection of biodiversity and food resources.
68
Copyright© T. HASEGAWA CO., LTD. All rights reserved

Joint research partners, universities, and research institutes
We endeavor to absorb cutting-edge research and improve technologies by sharing knowledge,
exchanging views, etc.

SDGs that we are targeting

Promotion system and governance
The Business Solution Division, which was established in 2020, is strengthening collaboration between
the Sales, Sales Planning, Marketing, and R&D Divisions. Based on strategies developed by the Business
Solutions Planning Department, we aim to contribute to resolving social challenges and achievesustainable growth by taking an organized approach to provide high-quality and high-value-added
products to customers.
In addition, the R&D Center (Kawasaki city in Kanagawa Prefecture) serves as the backbone of our flavor
and fragrance development. The Flavor R&D Center, Fragrance R&D Center, and Technology R&D Center
pursue research in their respective specialized fields, and collaborate with each other to combine theirachievements, thereby strengthening our research and development capabilities.

Business Solution
Division

Sales Division

Sales Planning Division
BusinessSolutions
Solution
Business
Planning
Planning Department
Department

Marketing Division
R&D Division

Opportunities and strategies
Opportunities
 Social challenges to which the Group can contribute with its technology
 Increasing interest and need for creating a sustainable society
 Potential of flavors and fragrances to create new value
Strategies
 Proposal activities using marketing data and AI
 Speedy development: Accurately understanding the requests and latent demand of customers andresponding to them quickly Detailed response to customers
 Response to increased demand for alternative raw materials triggered by climate change
 Maintaining investment in research and development

69
Copyright© T. HASEGAWA CO., LTD. All rights reserved Absorbing advanced technologies and knowledge through active exchange of views with universities
and research institutes

Main FY2022 initiatives
Development of an organizational structure
Collaborations between the Sales, Marketing, and R&D Divisions as the Business Solution Division haveadvanced and the speed of responding to customers is accelerating. To achieve customer success, wehave strengthened information sharing with respect to marketing data, technical materials, and research
results, with the aim of further promoting solution sales.
We continue to focus on research and development for increasing sales, and the percentage of researchand development expenditures in FY2022 was 8.0% (consolidated basis).
Product development and proposals
We have established a new proposal method that integrates marketing data with sensory evaluation
data. By promoting the active use of intellectual properties such as sensory evaluation data andstrengthening the linkage between compounding, analysis, applications, and sensory evaluation, we
endeavor to develop new unique products.
We continue to promote joint research with universities and research institutes for productdevelopment and to strengthen proposals.
Number of joint research projects: 13 (FY2022 result)Contribution to society Responding to health consciousness──Bringing delicious taste to low-sugar, low-salt, and low-fat foods
We develop ingredients that enhance sweetness, umami, and saltiness in response to the developmentof products by customers in pursuit of “healthy and good taste” and we propose ingredients that add
delicious flavor to food with reduced sugar and salt content. By developing products with an oily texture
and a rich flavor, we provide oily texture to low-calorie and non-oil products, which helps to prevent
excessive calorie intake.
 Contributing to foodtech──Solution for the lack of food resources
As part of the development of flavors to replace depleting food resources, we also offer a flavor series
that can replace savory natural raw materials and alternative blended flavors for citrus essential oils. In
response to the shortage of vanilla beans, we partially replace vanilla extract using blended flavors andmaterials created by applying heat reaction technology. We also partially replace milk by combining
blended flavors that we have developed based on aroma analysis with oil and fat emulsions.
For plant-based food, which is effective in reducing the environmental impact, we have Plant React ®, aningredient that adds the flavor and taste of animal products without actually using animals andcontributes to reproducing the distinct flavor.
Koku Jyuwa®, which is generated by using the power of enzyme in natural vegetable fats and oils,
contributes to reducing the raw materials used and protecting natural resources by expanding the richflavors in food.
We also re-examined the quality of products used in food to successfully extend its guarantee period,
leading to the reduction of food waste.
 Providing health and enrichment
──Bringing fragrance to living spaces and developing new technologies for skin care products
70
Copyright© T. HASEGAWA CO., LTD. All rights reservedWe develop sustainable fragrance ingredients that effectively provide fragrance to living spaces. We arealso working to develop original liposome, which can be combined with various products, including
milky lotion, cream, skin lotion, and hair care items, at a high level and provides an innovative solution to
all kinds of skin problems.
 Reducing lifestyle odors (bad smell that comes from daily activities, such as sleeping, walking, andeating)──Solution for an aging society
As a solution to various unpleasant odors in our daily lives, we research and investigate unpleasant odors
themselves in detail, and use the obtained data to develop fragrances that help reduce or eliminate such
unpleasant odors. In addition to developing masking materials for daily odors to improve the hospitaland nursing care environment, we use near-infrared spectroscopy (NIRS) and develop Swallowing Map™
as part of our efforts to facilitate eating and add good taste to nursing care food.
T. Hasegawa Group’s proprietary technologies
Many of our proprietary technologies are showcased on our website.
Top > Research & Development > Our technology
https://www.t-hasegawa.co.jp/en/research/techniqueSocial action through the flavor and fragrance business
The Company participates in the tree planting and product development programs of the HarumekiFoundation, which was established for the purpose of supporting people with vision impairment. We
have also published a book, “An Illustrated Guide to the Mysteries of Fragrance and Flavor” (Publisher:
Kodansha), written by our researchers. The book explains scents, flavors, and fragrances in an easy tounderstand manner. The royalties on the book are donated to food bank activity groups.
Top > Sustainability > Social Contribution
https://www.t-hasegawa.co.jp/en/sustainability/social

Plan for the future
We have set out KPIs for maintaining and improving the ratio of research and development expenses tosales and for continuing open innovations. We are working to strengthen product development andproposals by promoting joint research with universities and research institutes for the continued
development of new technologies, and will continue to improve our organizational structure.

71
Copyright© T. HASEGAWA CO., LTD. All rights reserved