GENERAL PACKER CO., LTD.

In both the Packaging Machinery Business and Production Machinery Business, the majority of end users are concentrated in the food industry, so trends in capital expenditure and changes in customer needs within that industry directly affect business performance. In a downturn in the food industry or a phase of restrained capital expenditure, there is a risk that a decline in orders received will materialize. The Annual Securities Report does not describe any specific countermeasures.

Sales dependence on Ishida Co., Ltd., a manufacturer of weighing and measuring instruments, remains at a high level, amounting to ¥1,264,585 thousand (12.8% of the composition ratio) in the previous consolidated fiscal year (FY2024, ended July 2024) and ¥1,093,823 thousand (10.8% of the composition ratio) in the current consolidated fiscal year (FY2025, ended July 2025). Although a stable business relationship has continued since 1969, changes in Ishida's sales policy or sales volume may directly affect the Group's business performance. No specific countermeasures to reduce this dependence are described.

Since Packaging Machinery and Production Machinery are mainly produced to individual order, semiannual business results tend to fluctuate significantly depending on the timing of customers' capital expenditure and the presence or absence of high-value projects. In addition, since sales are recognized upon completion of inspection by the customer, delays in inspection due to customer circumstances, particularly for large-scale projects, may have a material impact on period earnings. The Annual Securities Report does not describe any specific countermeasures to smooth out such fluctuations.

The Company's main production sites are concentrated in Kitanagoya City, Aichi Prefecture, and Yokohama City, Kanagawa Prefecture, and there is a risk of serious damage to production facilities and personnel in the event of a large-scale natural disaster. If both sites were affected simultaneously, it could become difficult to continue production activities, potentially resulting in a severe impact on business performance and financial condition. The Annual Securities Report does not describe specific countermeasures such as a BCP (Business Continuity Plan).

The Company has recorded a substantial amount of goodwill and intangible assets in connection with corporate acquisitions, and evaluates that these appropriately reflect the value of the acquired businesses. However, if the initially expected results are not achieved due to changes in the business environment or other factors, impairment losses may be recognized, which could have a material impact on business performance and financial condition. Specific details of the amount of goodwill recorded and the impairment testing are not described in this section.

If a new infectious disease, such as COVID-19, were to spread globally, there is a risk that significant constraints would arise in sales and production activities. Combined with a decline in customers' capital expenditure demand due to an economic downturn, this raises concerns about a compounded adverse impact on business performance and financial condition. The Annual Securities Report does not describe specific countermeasures regarding infectious disease response.

With Japan, China, Europe and the United States, and ASEAN as its main markets, the Company is strongly affected by the economic conditions and business trends of each country and region. If changes in tariff policy, inflation, or market fluctuations suppress customers' capital expenditure demand, this may adversely affect business performance and financial condition. No specific countermeasures to reduce dependence on particular regions or to diversify demand are described.