Ensuiko Sugar Refining Co., Ltd.

The sugar industry is subject to constraints from sugar industry policies and systems based on the "Act on Price Stabilization of Sugar and Starch." Since the Group's core business is the sugar business, revisions to national agricultural and sugar policies and progress in economic partnership agreements may affect business development, operating results, and financial position. In particular, intensified competition with imported sugar resulting from progress in economic partnership agreements could directly damage the profit structure of the core business. As of this filing, no specific countermeasures are disclosed in the securities report.

The purchase price of imported raw sugar fluctuates due to various factors including exchange rate movements, weather and sugarcane growing conditions in major producing countries, and heightened geopolitical risk. If the Group is unable to absorb sharp increases in manufacturing or energy costs through its own efforts, or is unable to appropriately pass on such increases to selling prices due to price competition or other factors, this could adversely affect operating results and financial position. Because multiple external factors interact in a complex manner, cost fluctuation risk has a structure that is difficult to manage.

The occurrence of unforeseen abnormal events related to food safety, or deterioration of product image due to reputational damage unrelated directly to the Company's products, could affect operating results. If a product liability incident occurs and the amount of compensation or product recall costs exceeds the coverage of the insurance held, this could also affect financial position. As countermeasures, the Company has established "Quality and Safety Management Regulations," built a traceability system, strengthened quality control at each plant, and taken out product liability insurance.

The Company holds marketable securities, and fluctuations in the stock market and interest rates may cause changes in the fair value of these securities, which could affect operating results and financial position. While the scale and composition of holdings are not disclosed in detail in this risk item, there is a risk of recognizing valuation losses in a deteriorating market environment. No specific hedging measures or other countermeasures are disclosed in the securities report.

The Company has applied the "Accounting Standard for Impairment of Fixed Assets" since FY2006 (ended March 2006). If asset values decline or profitability deteriorates in each business, impairment losses may arise, affecting operating results and financial position. Given the business structure centered on the sugar business, deterioration in the business environment carries a risk of directly reducing the profitability of fixed assets. No specific impairment prevention measures are disclosed in the securities report.

If unforeseen events beyond expectations occur, such as large-scale natural disasters including the effects of earthquakes and climate change, or infectious diseases, and sales, receivables collection, production, logistics functions, and other operations are disrupted over an extended period, this could affect business development, operating results, and financial position. As the Company conducts business activities at various domestic sites, there is also an inherent risk of concentration at specific locations. No specific business continuity plan (BCP) is disclosed in the securities report.