MANSEI CORPORATION

In the event of a global outbreak of an emerging infectious disease, a natural disaster such as an earthquake or typhoon, or an accident such as a fire, significant damage could occur to the facilities of the Group's business sites or suppliers. This could make it difficult for the Group or its business partners to continue operations, potentially affecting the Group's operating results and financial position. No specific countermeasures are disclosed in the Annual Securities Report.

A deterioration in the economic environment in the regions where the Group operates, including Japan, Hong Kong, and Shanghai (China), or changes in market trends in the electrical, electronics, and construction industries, could affect the Group's operating results and financial position. Because the Group operates across multiple countries and regions, its structure is such that it is subject to the combined effects of economic fluctuation risks in each region.

The Group's major supplier is the Mitsubishi Electric group, on which it has a high degree of dependence, accounting for 56.6% of total purchases in FY2026 (ending March 2026). Although a sales agency agreement and other arrangements have been concluded with the group, resulting in stable transactions, changes in the supplier's management strategy or difficulty in procuring products could have a material impact on the Group's operating results and financial position.

Most of the securities held by the Group consist of shares of financial institutions and companies with which it has business relationships. A deterioration in the operating results of investee companies or a decline in the securities market could result in valuation losses on the securities held, potentially affecting the Group's operating results and financial position.

Employee retirement benefit obligations and expenses are calculated based on actuarial assumptions such as the discount rate and the expected rate of return on pension assets. If actual investment results or market interest rates deviate from these assumptions, an increase in retirement benefit expenses in future periods could affect the Group's operating results and financial position.

The Group's business includes transactions denominated in foreign currencies, and fluctuations in exchange rates among major currencies, including the US dollar, could affect operating results. The Group makes efforts to minimize the impact of short-term fluctuations through currency hedging using forward foreign exchange contracts, but exchange rate fluctuation risks that cannot be fully addressed through hedging remain.

If non-performing receivables arise due to a deterioration in the business conditions of business partners, additional provisions for allowance for doubtful accounts may become necessary, potentially affecting the Group's operating results and financial position. The Group continuously monitors the creditworthiness of business partners and records provisions based on the historical default rate for general receivables, and by individually assessing the collectability of doubtful receivables, among others; however, depending on economic conditions, additional provisions may become necessary.

The Group holds a large amount of confidential information, including information related to business partners, sales, and technology, and unexpected information leakage could affect operating results and financial position. Although the Group strives to thoroughly manage confidential information, the risk of information leakage due to cyberattacks or internal misconduct cannot be completely eliminated.