Lion Corporation

The risk that delayed response to changes in the market, distribution channels, or customer consumption and purchasing behavior results in a competitive disadvantage relative to rivals, leading to deteriorated business performance and the inability to recover business investments. This is particularly addressed in the acquisition of external resources (M&A, etc.) through thorough due diligence and multifaceted risk assessment and recovery sensitivity analysis. Building an efficient supply chain in line with changes in the distribution and purchasing environment is also a challenge.

The risk of product trouble occurring, such as unexpected product defects or product accidents caused by customer misuse. The Company strengthens its quality control system through the practice of a "Product Management System" based on the JIS Q9000 family of standards and the acquisition and operation of ISO9001 certification, and works to prevent such trouble through regular quality checks and enhanced audit functions for raw material suppliers and contract manufacturers.

The risk of the supply chain stagnating or being disrupted due to soaring purchase prices caused by intensified procurement competition amid climate change and shifting international demand trends, as well as geopolitical risks or trouble at suppliers. The Company promotes stable procurement through interchangeability, multiple sourcing, and global procurement, while also conducting risk checks on human rights, labor, and environmental aspects based on the "Lion Group Supplier CSR Guidelines."

The risk that, as the composition of overseas business expands, political and economic trends or the strengthening or amendment of laws and regulations in the countries or regions where business is conducted give rise to response costs and constrain business activities. This also includes the risk of brand value impairment due to policy or financial changes at joint venture partners or key stakeholders, and the spread of counterfeit goods in overseas markets. The Company addresses this through continuous information gathering on each country and region, detailed due diligence at the time of M&A, and the strategic acquisition and management of intellectual property rights.

The risk that the Company is unable to secure and develop the necessary human resources as planned due to a declining working population or changes in the employment environment, thereby impeding corporate growth. There is also a risk that, if an organizational culture that respects diversity of values cannot be fostered, human resource attrition will occur and business activities will stagnate. The Company addresses this through recruitment, development, and placement based on a human resource portfolio aligned with its management strategy, the operation of a competitive personnel system, and strengthened responses to gender equality and healthy working styles.

The risk of incidents such as information leaks or system outages occurring due to unforeseen events such as computer virus infection or unauthorized access. The Company addresses this by establishing a management system based on its "Basic Policy on Information Handling" and "Information Security Regulations," and by having all employees, including officers, undergo information security training every year. It also seeks to minimize the impact on management by clarifying response policies in the event a risk materializes.

The risk of committing a serious violation of laws and regulations due to unexpected enactment, abolition, or amendment of relevant laws, or significant changes or strengthening of regulations. The Company addresses this through the establishment of the "Lion Corporate Code of Conduct" and "Code of Conduct" and regular training for all employees, the promotion of compliance measures by the "Corporate Ethics Committee," and the establishment and operation of the internal and external reporting system "AL Kokoro no Hotline." In addition, the Company has established the "Lion Basic Policy on Anti-Bribery" and the "Lion Human Rights Policy," and requires their application by business partners and suppliers.

The risk that import and export transactions related to product supply and raw material procurement, etc., are affected by exchange rate fluctuations, and the risk that yen conversion at the time of preparing the consolidated financial statements affects the Group's business results and financial position. The Company closely monitors exchange rate trends in major currencies and works to reduce the risk of exchange rate fluctuations through hedging and other measures.

The risk that natural disasters such as large-scale earthquakes or major typhoons, or insufficient safety activities or equipment malfunctions at production sites, cause human casualties among employees or physical damage to manufacturing equipment or warehouses, resulting in disruption to business continuity or product supply. The Company implements measures such as operating emergency contact systems and safety confirmation systems, conducting regular safety audits and equipment renewal, and securing supply routes through inventory stockpiling, multi-site production facilities, and alternative transportation based on its "Business Continuity Plan (BCP) Guidelines."

The risk that global-scale effects of climate change, such as rising temperatures, lead to increased costs of responding to stricter regulations, higher raw material prices, and reputational damage due to delayed response. The Company has formulated "LION Eco Challenge 2050," a long-term environmental goal toward 2050, and promotes efforts toward realizing a decarbonized society and a resource-recycling society, while working with stakeholders to reduce environmental impact at all stages of the product lifecycle.