NAGAILEBEN Co.,Ltd.

The Company Group has some products sewn overseas, and there is a risk that production activities may be disrupted due to deterioration of political and economic conditions, political upheaval, deterioration of security, or the occurrence of terrorism or war at overseas production bases. If such circumstances occur, stable supply of products may become difficult, potentially adversely affecting business results. The annual securities report does not describe specific countermeasures, leaving vulnerability to the materialization of this risk.

The Company Group conducts import settlements in foreign currency, and fluctuations in exchange rates directly affect financial position, business results, and cash flows. Although hedging measures through forward contracts are employed, it is recognized that complete risk insulation against sharp exchange rate fluctuations is difficult. If a yen depreciation phase continues, it may pressure profits through rising import costs.

If a natural disaster such as an earthquake or flood occurs, the network systems and production lines for production, sales, and logistics may be interrupted, potentially leading to a decline in sales and an increase in costs. The Company Group seeks to reduce this risk by implementing data backups and disaster prevention inspections and equipment checks, but there is a possibility that the response will reach its limits in the event of a large-scale disaster. Given the business characteristics of focusing on medical wear, a supply stoppage could also have ripple effects on medical settings.

If an emergency such as a fire, power outage, war, or the spread of infectious disease occurs, it may adversely affect business operations and business results. The Company Group has established a business continuity task force and strives to reduce this risk by ensuring employee safety and establishing a system for the safe supply of products for medical settings. Since the stable supply of medical wear is also a social mission, the importance of risk management is high from the perspective of supply responsibility in emergencies.