ROCK FIELD CO.,LTD

There is a risk that failure to respond to rapid changes in the market environment could lead to a decline in competitiveness and brand strength. Changes in consumer lifestyles and shifts in food trends are the main factors, directly affecting the sales and profitability of the prepared foods (delicatessen) business. As countermeasures, the Company is working on proposing new-value prepared foods, strengthening product planning and development capabilities, and improving store environments from a customer perspective (enhancing QSC).

There is a risk that unplanned store closures, business format changes, or consolidations resulting from responses to rapid changes in the external environment could generate significant unplanned expenses. While the Company continues to open new stores in suburban station buildings, commercial facilities, and urban redevelopment areas, it addresses this risk through brand utilization suited to each store location, development of lightweight store models, and expansion of sales channels through online shops and external (wholesale) sales.

Recruitment difficulties stemming from a shrinking labor force pose a risk of forcing restrictions on new store openings and production volumes. In addition, rising hourly wages are increasing labor costs, and there are concerns about the outflow of personnel due to insufficient response to diversifying work styles and comparatively lower wage levels. As countermeasures, the Company is working to improve productivity at stores and production lines through mechanization and labor-saving measures, strengthen support programs for households raising children, and improve the working environment to enable flexible work styles.

There is a risk that strengthened legal regulations related to the prepared foods business, or the unexpected introduction of new legal regulations, could increase compliance costs. Anticipated cost increases include higher labor costs due to amendments to labor-related laws such as improved treatment of part-time workers, as well as increased costs associated with new tax systems related to climate change regulations and greenhouse gases. The Company promotes early collection of and response to information on legal amendments across departments, establishment and operation of internal standards, and suppression of greenhouse gas emissions (installation of wind and solar power generation, introduction of non-fossil fuel power sources, etc.).

If issues arise regarding product safety, such as food poisoning incidents or mislabeling, this could damage trust and brand image, as well as reduce sales and profit due to store closures and incur product recall costs. The Quality Assurance Department conducts regular audits (of hygiene management and labeling management systems) of both internal operations and business partners, and the Purchasing Division works with suppliers to build a cooperative framework capable of prompt response in the event of an emergency.

There is a risk that production and supply of products could be disrupted due to declines in the harvest volume and quality of agricultural and marine products caused by labor shortages in primary industries and abnormal weather or natural disasters resulting from climate change. The Company addresses this by maintaining trust-based relationships with contract farmers and producers to build a stable raw material supply system, as well as by developing new procurement regions and securing multiple procurement routes.

There is a risk that products may fail to reach stores due to delivery delays or product damage caused by traffic restrictions resulting from abnormal weather, natural disasters, or traffic accidents, delivery delays caused by driver shortages, or rising freight rates due to soaring labor costs. The Company is working to establish a stable supply system through continuous strengthening of collaboration with business partners, as well as reviewing delivery conditions and improving loading efficiency and operational efficiency.

The occurrence of human rights issues such as harassment could give rise to litigation risk, increased employee turnover, and loss of trust from customers and business partners. The Company has established a consultation hotline for employees and a

There is a risk that business interruption, decreased sales, and damage to corporate value could result from the loss of internal information due to the collapse or shutdown of system equipment caused by natural disasters, or from the loss, leakage, or falsification of internal information, including customer information, due to cyberattacks. The Company has deployed recovery servers in a cloud environment, strengthened cyberattack countermeasures through penetration testing, and implemented hardware and software measures based on its security policy along with employee training.

The occurrence of a large-scale natural disaster or a pandemic caused by an infectious disease at major production or sales sites could cause production line interruptions, store closures, and business site shutdowns, which is expected to lead to decreased sales and increased costs for repairing buildings and equipment. In the event of an emergency, the Company has established a mutual complementation system whereby products from an affected factory can be produced at other factories, and addresses this risk through diversification of sales channels via strengthening of online shops and external (wholesale) sales, diversification of procurement regions, and formulation of a BCP (Business Continuity Plan) that anticipates infectious disease outbreaks.