YUASA TRADING CO.,LTD.

The Group has a close relationship with trends in industrial equipment-related investment and construction investment, and unexpected fluctuations in economic conditions may affect its business results and financial position. Although the Group is focusing on expanding into new markets such as new fields and overseas, there is a risk that a decline in demand during an economic downturn could directly lead to a deterioration in business performance. An information transmission and emergency response system has been established under the Chief Risk Management Officer.

The Group holds marketable securities, mainly shares of business partners, and is exposed to stock price fluctuation risk. Although these are held for medium- to long-term purposes, a decline in stock prices may result in valuation losses on held securities, which may affect business results and financial position. The Group reviews its shareholdings as appropriate based on the "Guidelines on Securities Investment."

Some of the Group's interest-bearing debt carries variable interest rate terms, and in the event of future interest rate increases, the interest payment burden may increase, potentially affecting business results and financial position. Although the Group's dependence on borrowing relative to total assets is low, the risk nonetheless exists. As a risk mitigation measure, the Group may convert variable interest rates to fixed rates.

The Group extends credit to a diverse range of business partners both in Japan and overseas, and if a business partner defaults due to unforeseen circumstances, this may affect business results and financial position. The Group strives to mitigate risk through credit management based on internal management regulations, but complete elimination of the risk is difficult.

The Group conducts import and export transactions in foreign currencies, and fluctuations in exchange rates may affect its business results. In addition, the Group has overseas local subsidiaries, and fluctuations in the exchange rates used for translation when preparing consolidated financial statements may also affect its financial position. The Group strives to mitigate risk through the use of forward foreign exchange contracts, but complete hedging is difficult.

The Group is subject to a wide range of laws and regulations, including the Companies Act, tax laws, the Antimonopoly Act, the Foreign Exchange and Foreign Trade Act, the Building Standards Act, and chemical substance regulations, and major changes to relevant laws or the application of unexpected interpretations may affect business results and financial position. The Group has established an Ethics and Compliance Committee under the direct supervision of the President and Representative Director to thoroughly promote its ethics policy and code of conduct, but complete elimination of the risk is difficult.

Unauthorized access from outside parties or intrusion by computer viruses could lead to the leakage of confidential corporate or personal information, and damage to or malfunction of information systems due to natural disasters or accidents could occur, potentially resulting in reduced operational efficiency and affecting business results and financial position. The Group has established detailed information security operation rules and is working on crisis management response, but complete elimination of the risk is impossible.

The Group manufactures and sells household electrical appliances, and if a product defect leading to a large-scale recall or product liability claim occurs, this may affect business results and financial position. The Group seeks to mitigate this risk through thorough quality control and product liability insurance, but the risk of defects occurring cannot be completely eliminated.

The Group conducts overseas transactions and business activities, and is exposed to the risk that changes in the policies or political and economic environment of counterparty countries could make it difficult to collect receivables or recover investments and loans. In addition, the surge in resource prices accompanying heightened geopolitical risk may also affect business results and financial position. The Group strives to manage and hedge this risk through careful responses based on various information and by taking out trade insurance.

The Group is promoting agile growth strategy investments under its long-term vision "YUASA vision 370" and medium-term management plan "Reborn 2031," but it is difficult to completely avoid the risk of not achieving expected returns or failing to meet business plans. Losses may also arise from business withdrawals. The Group manages this risk through thorough deliberation at Board of Directors and Management Committee meetings, as well as by reporting on investment effectiveness as appropriate.