Wakou Shokuhin Co.,Ltd.

If unforeseeable quality or hygiene problems occur at suppliers or during manufacturing processes, this may affect the Group's business performance. As countermeasures, the Group conducts on-site and external inspections of suppliers, has built a self-inspection system based on FSSC22000, and verifies traceability from raw material procurement through the manufacturing process.

The Group is subject to regulations such as the Food Sanitation Act, the Product Liability Act, the Containers and Packaging Recycling Act, the Food Recycling Act, and the Act on Rationalizing Energy Use, and if these regulations are tightened, new costs may arise, potentially affecting the Group's business performance. As countermeasures, the Group thoroughly conducts compliance education for employees and gathers information from relevant government authorities and business partners.

If fuel costs and raw material procurement prices rise due to soaring crude oil prices or food resource prices, or if it becomes difficult to secure sufficient quantities due to tight supply-demand conditions for food resources, this may affect the Group's business performance. As countermeasures, the Group secures stable supply and optimal purchase prices by sourcing from multiple suppliers, reduces costs through productivity improvements, and revises product prices.

If the market value of fixed assets held by the Group declines significantly, or if the profitability of business assets deteriorates significantly with no prospect of recovery, impairment accounting may become necessary, potentially affecting the Group's business performance. Impairment accounting standards are applied, and depending on the condition of assets, there is an inherent risk of recognizing temporary losses.

Since assets, liabilities, etc. denominated in local currencies of overseas group companies are translated into yen when preparing consolidated financial statements, fluctuations in exchange rates may affect the Group's business performance and financial condition. In particular, sharp fluctuations in yen appreciation or depreciation directly affect the translated value of overseas business earnings.

Although there are no ongoing lawsuits at present, the Group bears the risk of being subject to litigation in the course of conducting business activities domestically and overseas, which could affect the Group's business performance as a result. As countermeasures, the Group promotes thorough compliance and respect for third-party rights, while coordinating with retained legal counsel and others.

If the recruitment and development of next-generation leaders, specialized technical personnel, and global talent does not proceed as planned due to a deteriorating employment environment, this may affect the Group's business development, performance, and growth outlook over the medium to long term. The Group is working to create an environment where diverse talent can thrive and to secure personnel in a planned manner, but risks remain due to changes in the external environment.

If the Group's business sites are affected by large-scale earthquakes such as a Tokyo Inland Earthquake or a Nankai Trough Earthquake, increasingly frequent typhoons and heavy rains due to climate change, or the spread of epidemics, this may affect business performance. As a countermeasure, the Group has formulated a business continuity plan (BCP) to minimize the risk of business interruption in the event of a large-scale natural disaster, and shares it internally.