Nippon Electric Glass Co., Ltd.

The risk that tight supply and soaring prices of raw materials and fuel, as well as rising logistics costs, may disrupt production activities. The Company addresses this through maintaining good relationships with suppliers, diversifying procurement sources, and switching to general-purpose products. However, if supply delays or sharp price increases occur, this could have a material impact on the Company's business, performance, and financial condition.

The risk that natural disasters such as earthquakes, typhoons, and heavy rain, accidents such as fires and power outages, or the outbreak of infectious diseases may cause facility damage, difficulties in the supply of electricity, gas, and water, and employees being required to stay home, resulting in the partial or complete suspension of operations. The Company seeks to mitigate this risk through BCP promotion, earthquake-resistant construction, and diversification of manufacturing sites, but substantial costs may be incurred for facility restoration and production recovery.

The risk that confidential information of customers, employees, and others may be leaked externally, or that virus infections or cyberattacks may halt information systems, disrupting business activities. The Company has taken measures such as establishing an information management committee, utilizing security systems, and conducting internal training, but in the event of an information leak, claims for damages or damage to the corporate image may occur.

The risk that rapid shifts in devices, components, and materials driven by technological innovation may cause a sharp decline in demand for existing products. In addition, significant fluctuations in product prices and supply volumes due to deteriorating supply-demand balance or intensifying competition may also affect performance. The Company seeks to respond to new needs through R&D promotion based on specialty glass technology and proactive sales activities, but if the pace of change is too fast, it may be unable to keep up.

The construction of new production facilities for specialty glass products requires substantial funds and a considerable amount of time, and existing facilities also require continuous improvement and periodic large-scale repairs. If there are significant changes in demand forecasts, failure to achieve expected facility capacity, or sudden changes in the prices of key equipment materials, investment efficiency may decline significantly, potentially affecting the Company's business, performance, and financial condition.

As the Company's core Glass Business consumes large amounts of resources and energy, carbon taxes and rising energy costs are recognized as significant risks. The Company is strengthening disclosure based on TCFD recommendations and efforts to reduce CO2 emissions, but future tightening of environmental regulations and heightened social expectations regarding environmental responsibility may result in additional cost burdens or business constraints.

The risk that sales of certain products are highly dependent on specific major customers, such that changes in those customers' investment or sales plans or material procurement policies directly affect performance and financial condition. The Company strives to diversify its customer base, but a structural dependency remains for certain product groups, and the risk continues to exist.

The risk inherent in business activities targeting the global market, including unexpected changes in laws and regulations, international tax risks such as transfer pricing taxation, changes in political and social conditions, and social disruption caused by terrorism, war, or infectious diseases. The Company seeks to mitigate these risks through close communication with local authorities and overseas consolidated subsidiaries and by utilizing expert advice, but the impact may increase in situations of heightened geopolitical uncertainty.

Securing and developing appropriate human resources is recognized as an important challenge for future business development, and a shortage of human resources could result in constraints on business execution or lost opportunities. In addition, if labor compliance violations such as employment issues, harassment, or human rights violations occur, this may lead to a decline in corporate image or litigation. The Company is addressing this through the recruitment and development of diverse talent and labor-saving through automation.

The risk that, due to business activities targeting the global market, fluctuations in foreign exchange rates directly affect performance and financial condition. The Company seeks to mitigate this risk through forward exchange contracts and addresses interest rate fluctuation risk by procuring a portion of its borrowings at fixed interest rates, but in the event of sudden exchange rate fluctuations or rising interest rates, the impact on finances may become apparent.