MURAKI CORPORATION

Over 99% of the Group's net sales are derived from the SS (service station) industry, and trends in the shrinking SS industry market environment directly affect business performance. Deterioration in the SS industry's operating environment directly leads to a decline in sales, resulting in a structure with high concentration risk in a specific industry.

The Group bears credit risk associated with continually occurring accounts receivable. Despite efforts to strengthen credit management of business partners, an unexpected deterioration in a business partner's financial condition could make collection of receivables difficult. If receivables become uncollectible, this could adversely affect business performance and financial condition.

A decrease in crude oil supply would limit the quantity of petroleum-related products procured, creating a risk that stable supply to SS could become difficult. In addition, a sharp surge in crude oil prices could reduce the frequency of customer visits to SS while also raising procurement costs, potentially adversely affecting business performance and financial condition.

Business operations are highly dependent on human resources, making it essential to continuously secure and develop personnel who can achieve mutual coexistence and prosperity with stakeholders. If intensifying competition for talent or other factors make it difficult to secure appropriate personnel, this could affect business performance and financial condition.

Employee retirement benefit expenses and obligations are calculated based on actuarial assumptions such as the discount rate, and expense and obligation amounts fluctuate with actual changes in interest rate levels. If interest rate movements diverge from assumptions, this could affect business performance and financial condition.

The Group strives to provide services that protect the information assets of business partners and customers and ensure security; however, if confidential information is leaked, destroyed, or improperly used, this could give rise to liability for damages and affect business performance and financial condition. Maintaining and strengthening the information management system remains an ongoing challenge.

Car Care Related Products are highly susceptible to weather conditions, and consumer demand can fluctuate significantly due to abnormal weather such as cool summers, warm winters, or a rainless rainy season. Business performance can also be affected if operations are disrupted by natural disasters such as earthquakes. While the Group works to mitigate this risk through procurement control, it may be difficult to respond to changes that exceed expectations.

In business processing that relies on computer systems and communication networks, system downtime or loss/leakage of important data could occur due to natural disasters, computer viruses, or unauthorized external intrusion. Although measures such as defenses against external unauthorized access and strengthened internal management systems have been implemented, if such an event occurs, risks such as increased response costs, liability for damages, and decline in creditworthiness are anticipated.

If the risks related to the business materialize and profitability deteriorates at the brand or regional market unit level, impairment losses may arise on fixed assets held by the Group. Since recognition of impairment losses directly affects business performance, this represents an important financial risk factor during periods of deteriorating business conditions.

If disasters caused by climate change become more severe, social infrastructure could be damaged, potentially affecting the Group's financial position and operating results. This risk is interrelated with weather and disaster risk and is recognized as a risk that could affect business continuity over the medium to long term.