SAGAMI RUBBER INDUSTRIES CO., LTD.

The Group manufactures and sells products overseas and imports raw materials and products from overseas, and exchange rate fluctuations directly affect business costs and revenue. In addition, since the financial position and operating results of overseas consolidated subsidiaries are translated into yen, fluctuations in either the appreciation or depreciation direction of the yen may affect the consolidated financial statements. No specific hedging measures are described, and no countermeasures against foreign exchange risk are explicitly stated.

The main raw materials for the Plastic Products Business are petrochemical products, and the structure is such that fluctuations in international crude oil prices directly propagate to raw material purchase prices. In a phase of rising crude oil prices, manufacturing costs increase, and if it is difficult to pass these costs on to selling prices, profitability may deteriorate. No specific countermeasures against price fluctuation risk are described in the securities report.

When expanding business into overseas markets, multiple risks are inherent, including unexpected changes in laws and regulations, deterioration of political and economic factors, and infrastructure issues. If these risks materialize, they may lead to a slowdown in overseas production and sales activities or the incurrence of additional costs. No specific risk mitigation measures are described in the securities report.

The Group primarily raises funds through borrowings from financial institutions to meet funding needs and business expansion. If significant fluctuations in interest rates occur, an increase in funding costs may affect the financial position and operating results. The Group states that it strives for risk management by raising funds while considering amounts and terms, but no specific hedging measures are described.

If a large-scale natural disaster such as a major earthquake occurs, it may cause damage to buildings, disruption of head office functions, logistics, and sales functions, and deterioration of the business environment due to power outages or disruption of transportation networks. These may have a material impact on the Group's financial position and operating results. No specific details regarding the establishment of a BCP (Business Continuity Plan) are described in the securities report.

If a lockdown occurs due to a pandemic such as the spread of COVID-19, it may cause the suspension of business activities at each business site and delays in the procurement of goods from overseas production sites. The suspension or slowdown of business may lead to a decrease in sales and an increase in the burden of fixed costs, affecting the financial position and operating results. No specific infectious disease countermeasures or alternative procurement methods are described in the securities report.

The Group utilizes core business systems for order receipt, shipment, etc., as well as cloud services (SaaS), and business continuity is heavily dependent on these systems. If cyberattacks become more sophisticated or serious failures occur in cloud services, this may result in system outages, loss of critical data, and leakage of confidential information, potentially causing delays in product shipment, loss of social credibility, and recovery costs. The Group states that it strives to reduce risk by strengthening security measures, but no specific details of the measures are described.