CASIO COMPUTER CO.,LTD.

As the majority of the Group's products are aimed at individual consumers, there is a risk that deterioration in economic conditions in Japan, the United States, Europe, Asia, and other countries could lead to a decline in sales or excess inventory. It is explicitly stated that it is difficult to completely avoid the impact of a market downturn, and the risk is recognized as always having the potential to materialize. In response, the Group has adopted a policy of conducting business activities while continuously monitoring market trends.

If production sites or various facilities suffer catastrophic damage due to war, terrorism, infectious diseases, or other causes, there is a risk that delays in production and shipment or a slowdown in sales activities could reduce net sales, and substantial costs could be incurred for repair or replacement. It is explicitly stated that there are concerns regarding the impact on the global economy from heightened geopolitical risk, particularly in the Middle East, and the risk is recognized as always having the potential to materialize. The Group's policy is to manage this risk through detailed marketing activities tailored to specific market conditions and flexible responses.

Since the Group conducts production and sales operations around the world, fluctuations in exchange rates between the yen and other currencies could adversely affect profit. The Group is also exposed to interest rate fluctuation risk, which could affect operating expenses, procurement costs, and the value of financial assets and liabilities (particularly long-term debt). It is explicitly stated that complete avoidance of such impacts is difficult, and the Group addresses this through hedging measures such as forward foreign exchange contracts.

Amid intense competition for market share both domestically and internationally, if sharp price fluctuations or prolonged declines in selling prices exceed the effects of cost reduction activities, this could adversely affect the Group's financial condition and business performance. It is explicitly stated that this risk has already materialized for some products, making it more realistic compared to other risks. The Group's policy is to secure profitability by selecting profitable items and maintaining a competitive advantage through differentiation from other companies.

Due to fluctuations in stock prices, interest rates, and other factors, as well as overall economic uncertainty, the value of securities held by the Group could decline, significantly affecting the Group's asset value. It is explicitly stated that this risk always has the potential to materialize and that complete avoidance of its impact is difficult. The Group's policy is to regularly verify the significance and rationality of its holdings and make careful decisions accordingly.

In connection with its business operations, the Group holds a large amount of personal and confidential information, and it is explicitly stated that the possibility of information leakage due to unforeseen events cannot be ruled out. If an information leak occurs, it could lead to a loss of competitiveness due to the leakage of trade secrets and a decline in customer and social trust, which could adversely affect business development, financial condition, and business performance. The Group continuously implements Group-wide IT security enhancements, internal regulation development, employee training, and protective measures against cyber attacks and system failures.

Since the majority of production and sales activities take place outside Japan, changes in political and economic conditions and legal systems overseas have a considerable impact on the Group's financial condition and business performance. In particular, unexpected changes to rules or systems or the application of laws and regulations are difficult to predict and could adversely affect business performance. The Group's policy is to continuously collect and analyze information on overseas legal amendments and regulatory trends in each country, and to respond promptly and appropriately in order to minimize the business impact of regulatory changes.

Rapid technological change in the Group's business fields or drastic shifts in market needs could cause the Group's products to become obsolete faster than expected, posing a risk of adverse effects on business development, financial condition, and business performance. Although the Group currently does not recognize the possibility of this risk materializing, given the fast pace of technological change characteristic of the industry, continuous monitoring is necessary. The Group's policy is to promote technology development while closely monitoring trends in technological change.

The new product development process is complex and uncertain, and if the Group fails to launch new popular products promptly and regularly, or if competitors introduce similar products at the same time, the Group's first-mover advantage could diminish. Although the Group currently does not recognize the possibility of this risk materializing, given the intensifying competitive environment, it needs to be managed as a potential risk. The Group's policy is to maintain its competitive advantage through thorough management of development schedules and careful timing of market launches.

Since a significant portion of manufacturing and assembly processes is outsourced to external suppliers, risks on the production side, such as delivery delays and difficulties in quality control, may arise. In addition, if issues such as violations of relevant laws and regulations by outsourcing partners or infringement of third-party intellectual property rights occur, this could adversely affect business performance and the Group's product reputation. The Group's policy is to rigorously review the technical capabilities and supply capacity of outsourcing partners when selecting them, striving to choose reliable business partners.