T.HASEGAWA CO.,LTD.

If human rights violations occur across the entire business domain, including the supply chain, this may impact business performance through loss of social credibility. As countermeasures, the company promotes business activities based on the "Basic Policy on Human Rights" and the UN Global Compact's 10 Principles, identifies and monitors human rights risks through an annual company-wide risk survey, and conducts supplier assessments based on the "Hasegawa Group Supplier Guidelines." The Risk Management Committee has selected this as a priority risk.

The risk that a decline in employee engagement leads to turnover or reduced productivity, adversely affecting business performance. The Risk Management Committee has selected this as a priority risk and recognizes that there is always a possibility of it materializing in the following fiscal year and beyond. As countermeasures, the company is promoting improvement initiatives based on the implementation and analysis of engagement surveys, as well as improvements to the working environment at factories.

If information assets are lost, damaged, or leaked due to cyberattacks, computer virus infections, system failures, etc., this may lead to business suspension or loss of social credibility, impacting business performance. The Risk Management Committee has selected this as a priority risk, and the company has established the "Information Security Basic Policy and Countermeasure Standards," built an early detection and defense system through the introduction of information security software, and conducts regular education and awareness activities for all officers and employees.

As the company strengthens its global expansion centered on China, Southeast Asia, and the United States, insufficient management of domestic and overseas subsidiaries may lead to fraud or scandals, damaging the corporate image and credibility, and impacting business performance. The Risk Management Committee has selected this as a priority risk, and the company addresses it by establishing important basic regulations for overseas subsidiaries and conducting regular business audits, applying the "Hasegawa Group Code of Conduct" and compliance regulations across the entire group, and establishing an internal reporting system.

If the market value of held assets declines significantly, or if business profitability deteriorates, the application of impairment accounting may result in impairment losses on fixed assets, impacting business performance. The Risk Management Committee has selected this as a priority risk, and the company addresses it through periodic evaluation of the profitability of fixed assets and consideration of whether to continue holding them, enhancing asset value through capital investment, thorough consideration of business plans when conducting M&A, and systematic promotion of PMI (post-merger integration).

Abnormal weather in production areas (cyclones, hurricanes, etc.), social unrest (terrorism, war, infectious diseases, etc.), and accidents at suppliers may make it difficult to procure raw materials, impacting business performance. As this depends on market conditions, the company recognizes that there is always a possibility of it materializing in the following fiscal year and beyond, and addresses it by diversifying procurement sources and procurement methods through multiple suppliers worldwide, and by implementing global purchasing through collaboration among domestic and overseas locations.

Economic conditions, business trends, financial conditions, and personal consumption trends in each country where the company operates may cause sluggish sales of customers' final products, impacting business performance. The company addresses this through diversification of expansion regions via global expansion centered on the United States, China, and Southeast Asia, and by formulating and promoting swift and flexible business strategies that accurately capture market growth potential and consumer preferences in each country and region.

Fluctuations in exchange rates when converting the local currency-denominated financial statements of overseas subsidiaries into yen may impact consolidated business performance. As this depends on market conditions, the company recognizes that there is always a possibility of it materializing in the following fiscal year and beyond, and addresses it by reducing fluctuation risk through the promotion of local production and local sales overseas, and by formulating management plans that incorporate exchange rate fluctuations. On a standalone basis, since export and import amounts are nearly balanced, the impact at the standalone level is considered limited.

Unfavorable weather may cause sluggish sales of final products by customers in industries such as beverages, food, and toiletries, impacting business performance. The company recognizes that there is always a possibility of this materializing in the following fiscal year and beyond, and is working to reduce dependence on specific categories by aiming to increase the sales composition ratio of categories other than beverages, which are most affected by unfavorable weather.

If environmental laws and regulations are tightened domestically and internationally, this may impact business performance through increased cost burdens and restrictions on business activities. The company recognizes that there is always a possibility of this materializing in the following fiscal year and beyond, and addresses it by thoroughly complying with environmental laws and regulations in each country and region where it operates, and by actively engaging in environmental conservation and improvement of environmental issues based on the CSR Policy and the "Hasegawa Group Code of Conduct."