MARUWA CO.,LTD.

The Group operates manufacturing and sales bases in Japan and around the world, conducting global business operations, and changes in the economic conditions, market environment, policies, and regulations of countries around the world may affect the Group's operating results and financial position. There is an inherent risk that political instability or increased regulation in specific regions could disrupt business continuity. No specific countermeasures are described.

While the supply market is expected to grow due to the expansion of new energy vehicles, the increasing multi-functionality and miniaturization of electronic components, and the expansion of the AI and IoT fields, if demand declines due to a general economic slowdown or weak consumption, the Group's operating results and financial position may be adversely affected. The Ceramic Components Business is the Group's core business, and fluctuations in demand for this business are directly linked to overall performance.

The main products of the Lighting Equipment Business are public lighting and high-brightness lighting for tunnels and roads, and if construction delays occur due to natural disasters or infectious disease outbreaks, delays in revenue recognition or project interruptions may affect the Group's operating results and financial position. Given the nature of products for public infrastructure, there is a high risk of process changes due to external factors. No specific countermeasures are described.

As market transformation toward decarbonization accelerates, the pace of technological innovation is increasing, and if the Group's development speed lags behind other companies, it may lead to a decline in competitiveness, affecting operating results and financial position. The Group addresses this risk by developing new products and making capital investments ahead of the times, anticipating the market several years in advance.

The Group actively engages in new product development and conducts prior investigations into other companies' intellectual property rights during development; however, unforeseen circumstances may result in the Group bearing some form of legal liability. If litigation or damages claims related to intellectual property rights infringement occur, there is a risk of a material impact on operating results and financial position.

The Group manufactures in Japan and Malaysia and sells worldwide, and since sales and settlements are recorded in foreign currencies including the US dollar, fluctuations in exchange rates may affect the Group's operating results and financial position. In particular, there are bidirectional risks: a stronger yen deteriorates export profitability, while a weaker yen increases import costs. No specific hedging measures are described.

If natural disasters (earthquakes, floods, typhoons, etc.) or infectious disease outbreaks of a scale exceeding expectations occur at the Group's production sites in Japan and Malaysia or at sales bases in countries around the world, business activities may be interrupted or delayed, transportation may be disrupted, facilities may be damaged, and recovery costs may be incurred, affecting operating results and financial position. While certain measures have been implemented for fire prevention and natural disasters, there is a risk that responding to events exceeding expectations will be difficult.