KAMEDA SEIKA CO., LTD.

There is a risk that troubles related to raw materials or manufacturing processes could result in production stoppages, product recalls, or discontinuation of sales. As a food manufacturer, quality issues are directly linked to corporate trust, and this is recognized as a particularly important risk. The Company addresses this through strengthening the Quality Assurance Committee, obtaining and maintaining international certifications such as FSSC22000, and evaluating and inspecting suppliers and manufacturing contractors.

There is a risk of leakage or tampering of internal information due to cyberattacks, unauthorized access, or computer virus infections, as well as system outages or data loss due to disasters, and failures associated with system changes. This is recognized as a particularly important risk, and the Company addresses it through the establishment of various information management regulations, regular external security assessments, and information security training for officers and employees.

Since management infrastructure is concentrated in the Kaetsu region of Niigata Prefecture, there is a risk that a large-scale natural disaster could result in the loss of production and sales bases and disruption of the supply chain. This is recognized as a particularly important risk, and the Company addresses it through the formulation and ongoing review of its BCP (Business Continuity Plan), the introduction of an employee safety confirmation system, seismic reinforcement of key facilities, and the implementation of disaster prevention drills.

Amid growing demands to address climate change, there is a possibility that stricter regulations and physical risks could have a material impact on business activities. This is recognized as a particularly important risk, with details disclosed in sustainability-related disclosures (climate change). Human capital and climate change risk management is implemented at the management level.

There is a risk that fluctuations in climate, crop conditions, and market prices for agricultural products, which are key raw materials, could affect procurement volumes and prices; that rising crude oil prices and other factors could increase overall raw material procurement costs; and that logistics-related factors could cause instability in product supply. This is recognized as a particularly important risk, and the Company addresses it through diversified sourcing across production regions and varieties, multi-year contracts, digitalization to improve logistics efficiency, and promotion of modal shift.

There are concerns that changes in the management conditions or sales policies of specific distribution companies could reduce sales opportunities or lower selling prices, and that competitors' launches of new products and promotional activities could render the Company's own products obsolete. This is recognized as a particularly important risk, and the Company addresses it through detailed follow-up with retail stores by field staff, proposal-based sales for sales floor development, and strengthening of the new product development structure.

There is a risk that significant changes in the economic, political, or social conditions of countries or regions where the Company operates, food safety regulations, or natural disasters could reduce demand, disrupt operations, or cause supply shortages, and that exchange rate fluctuations could affect business performance. This is recognized as a particularly important risk, and the Company addresses it through the dispatch of core personnel to overseas group companies, management and oversight support from the Overseas Business Division, strengthening of the audit framework by the Audit Department, and regular market risk management meetings.

There is a risk that the declining birthrate, aging population, and changes in employment conditions in Japan could make it difficult to secure and develop the excellent personnel needed for business activities. This is recognized as a particularly important risk, and the Company addresses it through the utilization of external personnel and personnel of diverse nationalities, creating a comfortable working environment through work-from-home and flextime arrangements, developing global talent, and continuing to operate technical schools.

There is a risk that strengthened or newly enacted legal regulations, including in overseas markets, could restrict business activities, and that serious legal violations or human rights issues (such as forced labor or harassment) could lead to litigation, increased employee turnover, and damage to the Company's corporate image. This is recognized as a particularly important risk, and the Company addresses it through Compliance Committee meetings, establishment of an internal whistleblowing system, regular compliance and human rights training for officers and employees, and SNS monitoring.

There is a risk that contingent or unrecognized liabilities could arise after an acquisition, that goodwill amortization expenses could increase, and that impairment losses could occur due to weak post-acquisition performance. The Company addresses this through detailed due diligence, dispatch of core personnel from the Company, support in management, oversight, and operations, and strengthening of the audit framework by the Audit Department, while this risk is also linked to the risk of impairment of tangible and intangible fixed assets.