Miyoshi Oil & Fat Co., Ltd.

The Group procures fats and oils raw materials such as palm oil from overseas, and fluctuations in raw material market conditions and foreign exchange rates directly affect purchase prices. In the event of significant price fluctuations, negotiations with customers regarding price revisions may take time, and there may be a period during which cost increases cannot be passed on to selling prices, which could adversely affect the Group's business performance and financial condition. As countermeasures, the Group secures multiple suppliers, thoroughly implements detailed profit management, and promptly requests price revisions.

If a food safety issue affecting society at large were to occur, it could adversely affect the Group's business performance and financial condition. The Group has obtained certification under the international food safety system standard "FSSC22000," HACCP, and the AIB International Consolidated Standards, and manufactures products in accordance with international standards. The Group also strives to prevent the occurrence of risks by building a traceability system and conducting regular audits of its quality control systems.

If a large-scale disaster such as an earthquake or fire occurs at a production site, damage to production facilities or suspension of production activities could adversely affect the Group's business performance and financial condition. As countermeasures, the Group strives to prevent risks in advance through regular equipment inspections and the holding of safety, health, and fire prevention committees at each plant. The Group has also formulated a "Disaster Response Manual" and a "Business Continuity Plan (BCP)," and has established an early recovery framework through securing contract production partners and managing inventory across multiple sites.

Retirement benefit expenses and obligations are calculated based on actuarial assumptions such as the discount rate and the expected rate of return on pension assets, and if actual results differ from these assumptions, this will affect future expenses and obligations. A decline in the investment yield of pension assets or a decrease in the discount rate could adversely affect the Group's business performance and financial condition. The directors in charge of the Accounting and Finance Department and the Human Resources Department regularly monitor the investment status, and the Group seeks to stabilize investment yields by diversifying the funding sources contributed to the retirement benefit trust.

If significant litigation is filed in the course of business activities and a judgment unfavorable to the Group is rendered, it could adversely affect the Group's business performance and financial condition. As a countermeasure, the Group thoroughly disseminates the "Miyoshi Oil & Fat Code of Conduct" throughout the Group to prevent legal violations, misconduct, and fraudulent acts in advance. The Compliance Committee serves as the overseeing department, promoting compliance-based management in accordance with the "Compliance Regulations" and the "Compliance Program."

If a large-scale outbreak of an infectious disease such as COVID-19 results in a shortage of personnel needed to operate the business, causing disruptions to the production or sales system, it could adversely affect the Group's business performance and financial condition. In addition to thoroughly implementing measures to prevent the spread of infection in accordance with guidelines from the national and prefectural governments, the Group implements infection prevention measures such as staggered commuting hours and remote work even in normal times. In the event of infection with a disease for which no established treatment exists, the Group strives to take appropriate measures to prevent the spread of infection and to prevent the risk of business suspension.

If regulations are strengthened due to amendments to laws related to chemical substance management, capital investment and system development may become necessary, which could adversely affect the Group's business performance and financial condition. Both the Food Business and the Oleochemical Business manufacture and sell products in compliance with laws and regulations, regularly update the legal and regulatory comparison table, and strive to respond to regulatory tightening through prior research and follow-up monitoring of legal amendments.

If business-related systems or internet systems become unusable for an extended period due to a major system failure, intrusion by an unknown computer virus, or unauthorized access or cyberattack from outside, it could adversely affect the Group's business performance and financial condition. The Group has implemented multi-layered measures including physical access control, restricted access management for important information, deployment of defense systems, company-wide security education, data backup, and system redundancy. The Group has also taken out cyber insurance to prepare for the occurrence of liability for damages to third parties.

If an incident occurs in the operation of the warehouse system at the Ami Warehouse (Ami-machi, Inashiki-gun, Ibaraki Prefecture), which began operations in October 2024, or if a malfunction occurs in its linkage with business-related systems, disruptions may occur in product receiving and shipping operations, among other things. The newly established Ami Warehouse Management Department has built an efficient operational framework using a WMS (Warehouse Management System) under the guidance of a logistics specialist consulting firm, and strives to prevent the occurrence of risk by strengthening the warehouse management framework.

If the Group is unable to secure the necessary personnel due to intensifying competition for recruitment among companies caused by the declining birthrate and other factors, or due to employee turnover, it could adversely affect the Group's business performance and financial condition. The Group strives to improve business operations and competitiveness through personnel development across a wide range of departments, including manufacturing, technology, sales, and administration. The Group is also working to curb personnel attrition through measures to improve employee work-life convenience and engagement, such as the active promotion of telework.