TAIHEIYO CEMENT CORPORATION

If demand decreases significantly in businesses such as Cement, Ready-Mixed Concrete, and Building Materials & Civil Engineering due to a decline in construction investment, business performance may be affected. The contraction of the domestic construction market is a risk directly linked to the Company's core businesses. No specific countermeasures are stated in the Annual Securities Report.

If international prices for imported raw materials and fuel such as oil and coal, as well as ocean freight rates, rise, profitability may be squeezed if such increases cannot be sufficiently passed on to product prices. The Company mitigates this risk by utilizing derivative transactions for some transactions.

Business performance may be affected if significant foreign exchange fluctuations occur in foreign currency-denominated transactions, such as imports of raw materials and fuel, cement exports, and dividends from overseas subsidiaries. The translation of overseas subsidiaries' financial statements into Japanese yen may also be affected. The Company mitigates this risk by utilizing derivative transactions as necessary.

If market interest rates rise significantly, the financial burden may increase due to higher interest expenses, among other factors. The Company is working to reduce interest-bearing debt and mitigates this risk by utilizing derivative transactions as necessary.

If the stock market declines significantly, valuation losses on held securities may arise, and actuarial differences related to retirement benefit calculations may occur due to the valuation of retirement benefit trust assets, among other factors, potentially affecting the financial position.

The Group operates in various regions worldwide, including the United States and Asian countries, and business performance may be affected by changes in the political and economic situation in each region. Geopolitical risks and changes in local regulations can directly affect the earnings of overseas subsidiaries.

The Group is promoting selection and concentration, and is actively engaged in the review, restructuring, and consolidation of businesses. This process may affect business performance and financial position, and the Company utilizes advice from experts such as legal advisory firms and management consultants when a high degree of specialized expertise is required.

Since a significant amount of CO2 is generated in the cement manufacturing process, tighter public regulations aimed at curbing greenhouse gas emissions and social changes may affect the business. Stricter regulations on waste treatment may also affect the use of alternative raw materials and fuels. The Company supports the TCFD recommendations and is advancing the assessment, analysis, and disclosure of climate-related risks and opportunities.

Due to global warming, an increased frequency of heavy rainfall and landslides, as well as the intensification of typhoons, may cause damage to production facilities and prolonged disruption of transportation. The Company has established a response framework for emergencies based on its "Basic Policy on Risk Management" and "Risk Management Regulations."

If a major earthquake, a rapid outbreak of an infectious disease such as a novel virus, or a serious accident or major industrial injury at a production facility occurs, business continuity may be significantly affected. The Company has established a response framework for these emergencies as well, in accordance with its "Basic Policy on Risk Management" and "Risk Management Regulations."