MIURA CO., LTD.

Cyberattacks are becoming more sophisticated amid the progress of digitalization and globalization, and in August 2025 an overseas group company experienced unauthorized access by a third party, resulting in an impact on some services. At present, no significant impact such as leakage of customer information or data encryption has been confirmed, but if a similar incident occurs in the future, it could affect business continuity and social trust. As preventive measures, the Group has strengthened network monitoring, enhanced account management, and reviewed various settings, and is promoting the strengthening of security governance across the Group.

Most of the Group's products are capital goods, and since regular maintenance inspections are conducted on major models, the possibility of large-scale recalls is judged to be low. However, if a serious defect occurs that exceeds the scope covered by liability insurance, it could affect not only direct damages but also the credibility and reputation of the products and services. Although the Group works to prevent defects through the establishment of a quality control system, it cannot guarantee that all products and services are free of defects.

Steel plates and steel pipes are used for the shell of small once-through boilers, the Group's core products, and water tube boilers are made to order with long delivery times using special steel materials. If steel prices rise sharply, the Group may not be able to respond through manufacturing cost reductions or by passing on costs to sales prices. Rising raw material prices pose a risk of directly affecting the Group's business performance.

The Group conducts business in multiple countries and is exposed to the risk that economic activity may be constrained by changes in each country's political, economic, social, or legal systems, or by riots, terrorism, epidemics, and other events. If supply chains or distribution networks are disrupted, production, sales, and maintenance activities could be affected, potentially impacting business performance and financial condition.

If parts supply from suppliers is halted due to political or economic factors, disasters, epidemics, or other causes, procurement prices may rise sharply and it may become difficult to secure procurement volumes or delivery times, potentially causing production delays and lost sales opportunities. The Group has secured safety stock and considered alternative suppliers based on the "Miura Group Business Continuity Plan," but there are limits to how it can respond to unforeseen contingencies.

The Group is working on developing boiler-centered total solutions to achieve low-carbon and decarbonization goals, but there is a risk that it may not be able to timely propose technologies, products, and services that match customer needs, or that it may fail to keep pace with the evolution of technological innovation and digital transformation. If efforts toward carbon neutrality stagnate, this could reduce future growth and profitability and affect business performance.

Since the financial statements of overseas operations are converted into yen for the preparation of consolidated financial statements, if exchange rates fluctuate significantly beyond expectations, this could affect business performance and financial condition. In addition, since some products involve overseas transactions, significant fluctuations in exchange rates could also affect business performance through transaction-related factors.

Securing and developing capable human resources is necessary for business continuity and expansion, but intensifying competition for talent in the labor market may make it difficult to secure and develop human resources or maintain employment as planned. If a shortage of human resources occurs, this could lead to a decline in competitiveness and hinder the stable supply of products and services, potentially affecting business performance.

The Group is subject to various legal regulations in the countries where it operates, and revisions to tariffs, import/export regulations, pressure vessel regulations, air pollution control regulations, chemical substance regulations, and other rules could significantly affect the production and sale of equipment. If a serious compliance violation occurs, this could lead to a decline in credibility and the occurrence of damages, potentially affecting business performance and financial condition. The Group strives to reduce this risk through regular compliance training.

The Group holds a variety of assets, including business-use real estate, and may need to record impairment losses due to declines in fair value or the status of future cash inflows. In addition, the Group has carried out corporate acquisitions and capital alliances, and if the growth synergies initially expected are not achieved, this could affect business performance and financial condition through impairment losses on goodwill and other assets.