Arisawa Mfg. Co., Ltd.

The Group's major customers are manufacturers of information equipment, electronic components, and industrial electronic devices, and there is a risk that fluctuations in demand in these electronic equipment markets could directly affect operating results. The electronic equipment market is susceptible to business cycles and technology trends, and sharp declines in demand could become a factor causing fluctuations in sales and profits. The securities report does not describe any specific countermeasures.

The Group's net sales are highly dependent on the Electronic Materials field, and there is a risk that a decline in sales in this field could materially affect operating results. Concentration in a specific field could lead to a significant deterioration in earnings when the relevant market is sluggish. The securities report does not describe specific countermeasures such as diversification.

The Group is seeking to launch various new businesses, but depending on progress, there is a risk that this could affect operating results. New businesses involve uncertainty regarding the recovery of initial investment and market development, and if they do not proceed as expected, upfront costs could precede revenue and squeeze profitability. The securities report does not describe specific risk management measures.

If the prices of purchased raw materials rise significantly due to surges in crude oil or copper prices, there is a risk that increased manufacturing costs could affect operating results. Commodity prices can fluctuate sharply due to geopolitical factors and supply-demand balance, and if price pass-through is difficult, this could lead to a decline in profit margins. The securities report does not describe specific hedging measures or similar countermeasures.

Many of the Group's production bases are concentrated in Joetsu City, Niigata Prefecture, and there is a risk that if an earthquake or other disaster occurs, interruption of production activities could materially affect operating results. Concentration in a single region increases vulnerability from a BCP (Business Continuity Plan) perspective, and alternative production may be difficult in the event of a disaster. The securities report does not describe specific countermeasures regarding diversification or alternative bases.

The Group's business is subject to environmental conservation and other legal regulations, and there is a risk that operating results could be affected if significant liabilities or obligations arise in connection with regulatory compliance. Environmental regulations tend to be strengthened year by year, and increased compliance costs or operational restrictions could adversely affect profitability. The securities report does not describe specific countermeasures.

The Group holds confidential information such as technical information and personal information, and its business activities including production, sales, and accounting depend on various information systems. There is a risk that information leaks or system failures caused by disasters, cyberattacks, unauthorized access, or similar events could affect business activities and operating results. In today's environment of high dependence on information systems, cyber threats are becoming increasingly sophisticated year by year, and there are risks of losses from business suspension and damage to trust. The securities report does not describe specific technical countermeasures.

There is a risk that the outbreak and spread of a serious novel infectious disease could affect operating results through disruption of the supply chain and production activities, as well as adverse effects on the domestic economy and markets. The Group prioritizes the safety and health of its stakeholders above all else, and has implemented countermeasures such as thorough infection prevention measures, the use of video conferencing systems, the implementation of telework (working from home), and the use of satellite offices.