Achilles Corporation

The Company Group conducts overseas business operations, and sharp fluctuations in exchange rates may affect business performance and financial condition. Although measures such as forward exchange contracts are taken based on the "Risk Management Policy for Foreign Exchange Transactions," there is no guarantee that sudden fluctuations can be completely avoided.

The Company Group uses petrochemical products, textiles, paper, processed steel materials, and other items as principal raw materials, and sharp changes in crude oil and naphtha prices may cause raw material costs to fluctuate, affecting business performance and financial condition. If cost fluctuations cannot be passed on to product prices, there is a risk that profitability will deteriorate.

The Company Group has entered into various brand agreements as part of its technology development and sales strategies. However, if disagreements arise between the parties due to management, financial, or other reasons, such agreements may be modified or terminated. If the agreements are not continued, this may affect business performance and financial condition.

There is a risk of production line interruption due to disasters, fires, power outages, etc. at production facilities. While the Company seeks to minimize impact through periodic disaster prevention inspections, equipment checks, and diversification of production sites, complete prevention cannot be guaranteed. Although fire insurance is maintained for all production sites, depending on the scale of a disaster, insurance may not cover the full amount of damages.

If disasters or the spread of infectious diseases cause suppliers of raw materials to halt operations or disrupt logistics networks, procurement of raw materials may be delayed, affecting business performance and financial condition. The Company works to minimize the impact of such contingencies during normal times by building trusted relationships with suppliers, considering alternative materials, and establishing systems for prompt material procurement.

The outbreak and spread of new infectious diseases, etc. may disrupt the entire supply chain, including suspension of procurement from suppliers and halted operations at production and logistics sites, potentially stagnating business activities. This may in turn affect the Company Group's business performance and financial condition, and the Company addresses this by maintaining a system for responding to supply disruptions during normal times.

The Company Group's business is subject to various environmental laws and regulations, including those concerning air pollution, water pollution, waste disposal, and the use of designated chemical substances. Future legal amendments may require substantial environmental investment expenditures, affecting business performance and financial condition. The Company is exposed to a variety of risks from unexpected regulatory changes and legal application in domestic and overseas regions, and addresses this by prioritizing legal compliance.

In expanding business into overseas markets, there are multiple inherent risks, including unexpected changes in laws and regulations, adverse political and economic factors, social disruption due to terrorism or war, and potentially unfavorable tax effects. Unforeseen events such as changes in local political and regulatory conditions, labor shortages, and strikes may create problems in managing production facilities and conducting other business operations, potentially affecting business performance and financial condition.

If litigation is brought concerning products manufactured, processed, imported/exported, or sold by the Company, relating to product liability, labor, intellectual property, or other matters, this may affect business performance and financial condition. Since business operations extend across domestic and overseas regions, the Company is exposed to a variety of litigation risks corresponding to the legal systems of each region.

Although the Company strives to develop its quality control systems based on the "Basic Quality Policy," if a significant quality problem exceeding expectations occurs, substantial costs may be incurred, and brand image and social reputation may decline, potentially affecting business performance and financial condition. Quality problems can also lead to customer attrition and suspension of transactions, and are therefore positioned as a critical risk to business continuity.