TAIYO HOLDINGS CO.,LTD.

In addition to the risk that exchange rate fluctuations may cause business activities overseas to stagnate, there is an impact when translating the results of overseas subsidiaries into yen. As countermeasures, the Company implements forward exchange contracts, procures funds in countries with low foreign exchange risk, and promotes local production for local consumption.

There is a possibility that disasters affecting raw material manufacturers or supply shortages could disrupt the Group's production, and there are also concerns about rising raw material prices due to the impact of market conditions such as oil prices. The Company addresses this through diversified procurement from various suppliers and price pass-through within an appropriate range.

If innovative technological developments lead to the widespread adoption of methods that do not use PCBs in electronic devices, or methods that do not use SR in PCB manufacturing, there is a risk that demand for existing businesses could be lost. The Company addresses this by continuously promoting the technological development of new processes.

If unexpected serious side effects or safety issues arise in the Healthcare & Pharmaceuticals business, this could have a significant impact on business activities and corporate reputation. The Company manages this risk by thoroughly complying with the Pharmaceuticals and Medical Devices Act and related regulations, as well as by taking out necessary insurance.

Changes in national and local government medical policies and health insurance systems, including drug price revisions and the selective medical care system, may affect the earnings of the Healthcare & Pharmaceuticals business. The Company addresses this by establishing appropriate operational management and audit systems.

If the market value of assets declines significantly, or if the profitability of a business deteriorates, impairment accounting may be applied, resulting in a risk of impairment losses on fixed assets. The Company addresses this through deliberation by the Board of Directors on the appropriateness of acquisition prices, follow-up to realize synergies after acquisitions, and regular monitoring of the macroeconomic environment.

If differences of opinion arise with tax authorities regarding transfer pricing taxation and other matters, there is a risk of additional tax assessments or double taxation. The Company strives to respond appropriately through thorough compliance with tax systems in each country and the use of external experts.

If information leakage or tampering, or the suspension or malfunction of computer systems, occurs due to cyberattacks or other causes, this could seriously disrupt business activities. The Company addresses this by strengthening and organizing its information management systems and by providing education and training to employees.

In overseas business development, there is a risk that business activities could be constrained by changes in laws, regulations, tariffs, and other tax systems in the countries where the Company operates, or by the occurrence of wars or conflicts. The Company addresses this through moderate diversification of the countries in which it operates and through research on trends among customers and various national governments.

Against the backdrop of a declining birthrate, an aging population, and population decline, employee attrition and difficulties in recruitment may reduce the labor force and disrupt business operations. The Company addresses this by promoting the development and utilization of self-directed personnel, and by enhancing job satisfaction, the workplace environment, and fair evaluation and compensation systems.