ASAHI KAGAKU KOGYO CO.,LTD.

Sales of the Group's plastic products are concentrated among specific customers, resulting in a structure where fluctuations in those customers' production and sales conditions directly affect business performance. Although continuous and stable business relationships have been maintained, if there is a decline in customer demand or changes in transaction terms, there is a risk of a significant decline in sales and profits. The securities report does not describe specific measures for customer diversification.

The Group operates businesses in the People's Republic of China and the Kingdom of Thailand, with the overseas sales ratio accounting for more than half of total sales at 57.0%. The Group is exposed to a wide range of country risks, including political instability, uncertainty in economic trends, cultural differences, changes in overseas remittance and import/export regulations, and tax system changes. If these risks materialize, they could have a material impact on the Group's overall business performance and financial condition.

The yen-equivalent value of assets and liabilities arising from foreign currency-denominated transactions is affected by exchange rate fluctuations, and product prices traded in foreign currencies are also affected. Given that the overseas sales ratio is high at 57.0%, the structure is such that sales and profits tend to erode during periods of yen appreciation. The securities report does not describe specific countermeasures such as hedging.

Against the backdrop of the situation in Russia and Ukraine, fuel prices such as crude oil and natural gas have risen significantly, and energy costs, including electricity charges used by the Group, have continued to rise. The plastic molding and processing industry has a high dependence on energy, and if cost increases cannot be passed on to selling prices, there is a risk that profitability will deteriorate. If this situation continues going forward, the impact on business performance could further expand.

The Group holds confidential information and personal information of customers and business partners, and there is a risk of information leakage or tampering due to external attacks, negligence, theft, or other causes. Although the Group has established and implemented management systems, including strengthening IT security and facility security and providing employee training, complete protection remains difficult. If an information leak occurs, it could result in a loss of trust and substantial costs such as damages to victims, potentially having a significant impact on business performance.

If operations are significantly affected by natural disasters such as earthquakes and typhoons, fire accidents, or the spread of infectious diseases, there is a risk of disruption to the securing of raw materials, production, and product supply. In recent years, natural disasters and infectious disease outbreaks have continued to occur frequently, making this an important risk factor for business continuity for the Group, which has multiple locations both domestically and internationally. The securities report does not describe specific countermeasures such as a BCP (Business Continuity Plan).

The Group regards human resources as an important asset and is focused on recruiting excellent talent and developing personnel who share the company's management philosophy in order to expand and sustain its business. Against the backdrop of the declining birthrate, aging population, and intensifying competition in the labor market, if the Group is unable to secure and retain excellent talent, this could disrupt business operations and the execution of growth strategies, potentially affecting business performance. The securities report does not provide detailed descriptions of specific recruitment and development measures.