MITSUBOSHI CO.,LTD.

Copper and nickel prices are affected by international demand trends and speculative factors, while petrochemical products such as vinyl chloride resin are affected by crude oil and naphtha prices. If market prices surge sharply, purchasing costs may rise. If the Group is unable to pass on such price increases to product prices in a timely manner, it may adversely affect its business results and financial condition. The Group strives to pass on price increases, but there remains a risk that its response may lag behind sudden market fluctuations.

If the Group is unable to secure stable procurement of manufacturing equipment and materials necessary for product manufacturing, it may disrupt production activities. Sudden changes in production areas or suppliers, or unforeseen events such as major earthquakes, may make it difficult to secure the necessary quantities. The Group focuses on delivery management and stable procurement, but the risk of supply disruption due to external factors cannot be eliminated.

The Group holds a large amount of fixed assets, and impairment losses may occur in the event of a significant deterioration in business results or a decline in the value of fixed assets. In addition, there is a risk that valuation losses on held securities may be recorded due to a slump in stock market conditions. These may have a direct impact on the Group's business results and financial condition.

At overseas subsidiaries, changes in local economic trends, political and social conditions, or changes in laws and regulations may cause problems in business operations. In addition, fluctuations in exchange rates pose a risk of affecting the Group's business results and financial condition. As overseas operations expand, continuous management of these country risks and foreign exchange risks is required.

Although the Group makes every effort to ensure quality assurance, if a quality issue occurs, it may result in product recalls and warranty liabilities. This could result in significant cost burdens and adversely affect the Group's business results and financial condition. It could also lead to a loss of customer trust, making continuous strengthening of the quality control system important.

The Group extends credit to numerous business partners and thoroughly manages credit risk, but full recovery is not guaranteed. If a business partner defaults due to unforeseen bankruptcy or other reasons, bad debt losses may occur, potentially affecting the Group's business results and financial condition. While the Group is responding by strengthening credit management, there are limits to responding to sudden changes in the external environment.

Although security measures such as firewalls, antivirus measures, and backups are implemented for the Group's internal network, there is a risk that personal information and confidential information may leak outside the company due to new types of viruses or unforeseen circumstances. If an information leak occurs, it may result in a loss of trust from customers and business partners and the occurrence of damages, potentially affecting the Group's business results and financial condition.

In the event of a large-scale natural disaster such as a Tonankai earthquake or an accident, business continuity may be significantly hindered due to the suspension of business site functions, damage to equipment, power supply interruption, suspension of transportation and communication means, and damage to the supply chain. Although the Group has established an internal emergency response system, there are limits to responding to large-scale disasters, and there are concerns about the impact on business results and financial condition.

The Group strives to strengthen its management system through the establishment of compliance regulations and manuals, employee training, and confirmation of the development and operational status of internal controls. However, in the event that misconduct occurs, it could lead to a loss of trust from customers and business partners. This may adversely affect the Group's business results and financial condition, making the continuous maintenance of a compliance system essential.

The Group acquires intellectual property such as patents and trademarks to protect its own technology, while also paying attention to the intellectual property of other companies. However, there is a risk of disputes arising if the Group unintentionally infringes on the intellectual property rights of other companies. This may force the Group to discontinue sales or change manufacturing methods or designs, potentially affecting its business results and financial condition.