BULL-DOG SAUCE CO.,LTD.

As society transitions toward decarbonization, climate change may have multifaceted effects on business activities. The Group supports the TCFD and has joined the TCFD Consortium, and has established a risk management framework by formulating the "Bulldog Group SDGs Declaration." Detailed risk analysis is conducted by the Sustainability Committee, which reports its findings to the Board of Directors.

The main raw materials for Sauces, the Company's core products (vegetables, fruits, spices, etc.), are procured from around the world. Factors such as Middle East conditions, raw material price increases due to yen depreciation, rising energy prices, intensifying international procurement competition, supply shortages caused by global warming, and exchange rate fluctuations may affect operating results and financial condition. As countermeasures, the Company continuously monitors international conditions and market information, and has established a stable procurement system through diversification of production areas and suppliers.

If product defects such as foreign matter contamination, mislabeling, or allergen contamination occur, or if brand value and corporate image are damaged by rumors on SNS and elsewhere even in the absence of actual product defects, this may affect operating results and financial condition. As countermeasures, the Company is expanding its quality control system based on FSSC22000, formulating a food safety policy, thoroughly implementing traceability management, and disclosing information in a timely manner through its website and product packaging.

Due to the declining working population from the falling birthrate and aging population, it may become difficult to recruit and develop global talent and DX/marketing personnel that the Company expects, which could hinder production and affect operating results and financial condition. The Company is addressing this through mechanization and DX utilization, while promoting the creation of an organization that accommodates diverse work styles.

Emergencies such as natural disasters including earthquakes, fires, or accidents may cause serious damage to production facilities at manufacturing sites and business locations, resulting in plant shutdowns, reduced production capacity, or supply chain disruption, which may affect operating results and financial condition. The Company has established crisis management regulations and maintains a stable product supply system through the development and regular review of BCP and risk management plans by the Crisis Management Committee.

Delayed responses to changes in the external environment, including rapid technological innovation including digital technology, changes in consumer values and lifestyles, the emergence of new entrants and competitors, and legal regulations, may lead to a decline in product value and brand value, affecting operating results and financial condition. The Company is working to strengthen marketing capabilities, pursue new sales methods utilizing IT, conduct consumer promotions using SNS, and improve productivity through DX in production, procurement, and logistics functions.

Unauthorized access, failures of critical systems, or leakage of confidential information resulting from increasingly sophisticated and advanced cyberattacks may affect operating results and financial condition. The Company implements multi-layered security measures including computer virus countermeasures, outsourcing of core business systems to data centers, and firewall installation, while also establishing a system for rapid recovery in the event of an incident.

If compliance violations or misconduct by officers or employees, litigation, or violations of laws in export destination countries or countries where the Company operates occur, this may damage social reputation, corporate value, and image, leading to a loss of customer trust and affecting operating results and financial condition. The Company has built a highly transparent governance framework through the introduction of an executive officer system, the establishment of a Crisis Management Committee and Internal Control Audit Committee, a Board of Directors composed of three independent outside directors, and the establishment of a voluntary Nomination and Compensation Committee.

If environmental regulations are strengthened, leading to tighter restrictions on the use of plastic packaging materials, this may affect raw material procurement and product packaging costs, thereby affecting operating results and financial condition. The Group monitors regulatory trends through the Sustainability Committee and is examining countermeasures based on the SDGs Declaration.