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Risk Management

Taisho Pharmaceutical Holdings Co., Ltd. (hereinafter ''the Company'') promotes and coordinates the risk management activities of the Taisho Pharmaceutical Holdings Group (hereinafter ''the Group'') companies, and strives to prevent the materialization of risk while reducing risk exposure. In addition, in regard to emergencies following the materialization of risk, the Company has a system in place for preventing the spread of risk by launching a rapid response.

Risk Management System

Risk Management System of Taisho Pharmaceutical Holdings

The Company has formulated Risk Management Guidelines covering risks that could materialize in the course of Group companies’ operations, and has a system to respond to various risks.

This is to minimize the impact on customers and operations in the event of the materialization of risk. In accordance with these guidelines, in the event risk materializes, the Company convenes a Risk Management Committee, which is chaired by the Chief Executive Officer, and implements response measures according to the nature, scale and other aspects of the risk. Meanwhile, for promoting risk management, the Company has established a specialized risk management division (Risk Management Coordination Section) that shares information with the risk management divisions of Group companies, and confirms the status of risk in normal times and when risks materialize, organizes the information and reports it to management.

A similar kind of organizational initiative is also being carried out at Group company Taisho Pharmaceutical Co., Ltd., which has formulated risk management regulations and established a Risk Management Committee and dedicated section (Risk Management Section). The Risk Management Section inspects and advises on risk management initiatives conducted in respective divisions and provides employees with training and awareness-raising activities. Moreover, each division manages risk appropriately, with division managers made responsible for risk management and management-class employees appointed as risk management officers. Furthermore, the Risk Management Section summarizes status reports from the risk management officers and reports on these to management. The Company is supporting other Group companies in establishing a similar system.

Furthermore, the Company maintains a framework that enables management, including the representative directors, to respond promptly to risks relating to its management strategies.

Business Continuity Plan Measures

The company oversees the business continuity planning for the entire Group.

The Group, centered on operating company Taisho Pharmaceutical Co., Ltd., has formulated and consistently upgrades a business continuity plan (BCP) that serves as a guideline focused on ensuring the continuous supply of products for which it has a large social obligation to supply and that are highly significant for the Company’s business, in preparation for scenarios including a major earthquake in the Tokyo metropolitan area. These guidelines clearly define the roles and functions of each division along a timeline from the occurrence of a natural disaster to the restoration of business operations. This is to ensure a rapid and appropriate response in the event of a natural disaster. The guidelines also set forth specific details on measures to be implemented in normal times in anticipation of a natural disaster.

Information Management Measures

The Company recognizes that a leak of internal information could cause considerable loss, disadvantage or other negative impacts to the Company, shareholders, suppliers, employees and other stakeholders.

At operating company Taisho Pharmaceutical as well, where large amounts of important information is handled, information security is being enhanced through collaboration among associated specialist divisions, establishment of related internal regulations, training and awareness raising for employees and regular internal inspections, in addition to constructing a system that enables rapid reporting to management of the information management status. Each organization autonomously and appropriately manages information, centering on its risk management officer or the person in charge of risk management. Furthermore, in the event of an information incident, such as a leak, occurring or discovery of such having occurred, a framework has been built whereby concerned parties immediately assemble to confirm facts and get the matter under control. The Company is supporting other Group companies in building a similar type of information management framework, as well as working toward establishing internal regulations for the Group.