ISE CHEMICALS CORPORATION

There is a risk that sales volume and sales prices may fluctuate due to changes in the demand environment associated with economic cycles. The Group continuously collects and analyzes information on market trends and responds by optimizing its product portfolio to be resilient to change.

There is a risk that business activities may be restricted due to regulatory amendments, and a risk that costs may increase in responding to carbon neutrality-related regulations. The Group is working to adapt to regulatory changes by making advance preparations, improving technological capabilities, and promoting energy conservation.

There is a risk that the outbreak of a large-scale infectious disease, such as the novel coronavirus, could cause human casualties and seriously disrupt production activities and business operations. The Group seeks to ensure employee safety and business continuity by thoroughly implementing infection prevention measures.

If demand among customers fluctuates significantly, it could have a material impact on net sales and profitability. The Group is working to enhance its resilience to demand fluctuations through the development of new products and the creation of new businesses.

If the future profitability of the Group's fixed assets declines, it could have a material impact on financial position and results of operations through the recognition of impairment losses and other factors. The Group prevents the materialization of this risk by implementing measures to improve profitability.

There is a risk that human casualties, damage to production facilities, and disruption of the supply chain due to natural disasters such as earthquakes, typhoons, and floods, as well as the occurrence of serious occupational accidents or major fires, explosions, or leakage incidents, could have a material impact on business continuity. The Group responds through the formulation of a Business Continuity Plan (BCP), preventive maintenance of equipment, and thorough commitment to safe and stable production.

There is a risk that cyber attacks, unauthorized access, or other unforeseen events could interrupt important operations or lead to the leakage of confidential data. The Group responds by thoroughly implementing information security measures and continuously providing employee training.

If significant litigation is filed or a compliance violation occurs, it could lead not only to financial losses but also to damage to the company's reputation. The Group strives to prevent such risks from materializing by conducting business activities in compliance with laws and regulations and by thoroughly enforcing its code of conduct.

There is a risk that significant fluctuations in foreign exchange rates and interest rates may affect the Group's financial condition. The Group manages the balance of foreign-currency-denominated receivables and payables and hedges through forward foreign exchange contracts, and has also reduced interest rate fluctuation risk by shifting to a defined contribution retirement benefit plan.