MIRAIT ONE Corporation

Changes in capital expenditure trends and technological innovation among telecommunications carriers, including the NTT Group which accounts for a high proportion of net sales, may directly affect the Group's business performance. The Group is working to reduce its dependence on specific clients by accelerating the transformation of its business structure from the telecom carrier business to the solutions business and its shift toward the "Mirai Domain."

If unforeseen significant risks arise from challenges undertaken in new business fields, this may adversely affect business performance. As a countermeasure, the Group has established a "Business Risk Management Office" to ensure thorough risk checks on individual projects, promote smooth risk management, and share case studies and know-how.

If a serious accident or major quality problem occurs, it may affect business performance through loss of trust from clients and restrictions on business activities. The Group utilizes an integrated management system for safety and quality, working together as a group to provide high-quality engineering and services.

If technical data or personal information obtained from clients through business activities is leaked or misused due to unforeseen circumstances, this may affect business performance through loss of client trust and the occurrence of liability for damages. The Group utilizes an ISMS (Information Security Management System) to thoroughly prevent information leakage on a group-wide basis.

Difficulties in material supply or delivery delays caused by natural disasters, war, infectious diseases, etc., and rising construction costs due to soaring prices of raw materials, equipment, and energy or exchange rate fluctuations, may affect business performance through construction interruptions or delays and clients' curtailment of investment. The Group is implementing measures such as prioritizing processes where material shortages have not occurred to minimize construction period extensions, incorporating price escalation clauses into contracts, and passing on cost increases to construction prices.

In overseas business operations centered on Asia and Oceania, changes in the political and economic conditions of the countries in which the Group operates, exchange rate fluctuations, changes in legal regulations, infectious disease pandemics, and significant increases in material prices or labor costs may affect business performance. The Group strives to prevent and avoid risk through enhanced information gathering within the group and appropriate diversification of the countries in which it operates.

As demands for environmental consideration, such as reducing greenhouse gas emissions and industrial waste, extend across the entire supply chain, if the Group or its partner companies fail to respond appropriately, this may affect business performance through restrictions on transactions with clients, among other effects. The Group has endorsed the TCFD recommendations and is promoting risk and opportunity analysis in line with its framework, understanding and reducing greenhouse gas emissions, and initiatives to reduce industrial waste.

In M&A undertaken for the purpose of expanding business domains and transforming business models, if the expected profit growth or synergy effects from the target company cannot be realized, this may affect business performance. When executing M&A, the Group carefully examines consistency with its growth strategy, market trends, and synergy effects, and in the post-acquisition integration process, works to maximize synergies through enhanced monitoring that defines specific action items and target timelines.

As the Group conducts business based on licenses and permits under the Construction Business Act, the Telecommunications Business Act, the Radio Act, and other laws, any violation of laws and regulations may affect both business performance and corporate credibility. The Group is working to continuously strengthen compliance through monitoring of legal amendment trends by relevant internal departments and sharing information within the group, review of internal regulations, awareness-raising activities, and the establishment of effective internal audit and consultation systems.

Significant fluctuations in the fair value of assets such as securities held for operational purposes may affect business performance. The Group is working to avoid fair value fluctuation risk by gradually reducing holdings of securities and other assets deemed to have limited significance for holding, based on quantitative and qualitative verification.