Kurimoto,Ltd.

Changes in the external environment, such as international affairs, the domestic economy, foreign exchange rates, and the spread of epidemics, may have a material impact on business performance and financial condition through increases or decreases in order volume and raw material procurement costs. Since these are external factors not attributable to the Company Group, complete avoidance is difficult, and risk management is practiced in an integrated manner with management strategy.

Estimates related to inventory valuation, construction contract costs, impairment of securities, impairment of fixed assets, collectability of trade receivables, valuation allowances for deferred tax assets, and retirement benefit plans are made when preparing the consolidated financial statements. If the underlying assumptions differ from actual results, unexpected additional expenses may need to be recorded. This may have a material impact on business performance and financial condition.

Most of the securities held by the Company Group are marketable stocks, and depending on economic conditions and stock market trends, losses on sale or valuation losses may occur. Since stock market fluctuations depend on external factors, there is a risk of impact on business performance and financial condition.

Depending on future business profitability and market trends, losses on sale or valuation losses may occur with respect to fixed assets held by the Company Group. If the business environment deteriorates or market conditions remain sluggish for a prolonged period, this may have a material impact on business performance and financial condition through the recording of impairment losses, among other effects.

If current or past business activities result in the release or leakage of hazardous substances, air pollution, water pollution, soil contamination, or other environmental impacts, the cost burden associated with remedial measures will arise. If these environmental risks materialize, they may have a material impact on business performance and financial condition.

Unforeseen bankruptcies of business partners may hinder the collection of receivables, and in the event that litigation against the Company Group results in large-scale damage claims or long-term restrictions on business operations, significant legal liability may arise. These factors may have a material impact on business performance and financial condition.

In the event of a natural disaster such as an earthquake or typhoon, or an accident such as a fire, damage to facilities at the Company Group's sites or difficulty in the supply of electricity, gas, or water may cause partial or total interruption of operations, resulting in delays in production and shipment. In addition, significant costs may be incurred to repair damaged facilities, which may have a material impact on business performance and financial condition.

While the Company Group strives to comply with various laws and regulations, administrative licenses, and regulations in Japan and countries around the world, insufficient understanding of laws and regulations or inadequate responses to legal amendments could result in the Company Group being found in violation of laws, leading to losses from penalty payment orders and a decline in social trust. This may have a material impact on business performance and financial condition.

The procurement of raw materials and energy, as well as the sale of products, is affected by the overseas economic environment and international affairs. In particular, political instability in oil-producing countries, including those in the Middle East region, the occurrence or prolongation of international conflicts, and changes in political and economic policies in various countries may lead to sharp rises in crude oil prices, increases in raw material prices, and disruption of international supply chains. This may result in increased raw material procurement costs, delays in passing on price increases to product prices, and a decline in demand, which may have a material impact on business performance and financial condition.