Chichibu Railway Co., Ltd.

The Group is subject to regulations under laws and ordinances including the Railway Business Act and the Road Transportation Act. Changes to or tightening of these laws could affect business results and financial condition. The securities report does not disclose specific countermeasures.

The Group operates a main line from Hanyu Station to Mitsumineguchi Station and a freight line from Bukawa Station to Mikajiri Station, with facilities and equipment concentrated along the railway line, creating a risk of extensive damage from natural disasters such as earthquakes. During the recovery period, in addition to a decline in operating revenue due to train suspensions and delays, significant expenditures may arise for facility and equipment repair costs and alternative transportation costs.

Transportation of cement raw materials and other goods for Taiheiyo Cement Co., Ltd., a major shareholder, accounts for 22.1% of the Group's total operating revenue, indicating a high degree of dependence on a specific customer. If the company changes its transportation methods or reduces transportation volume, it could have a direct and material impact on the Group's business results.

The Group continuously makes capital investments, primarily in the Railway Business, funded through borrowings from financial institutions. If interest rates rise, increased borrowing costs could adversely affect business results and financial condition.

The Railway Business and Bus Business rely on crude oil for motive power, and significant fluctuations in energy prices such as electricity, gasoline, and diesel fuel could affect business results and financial condition through increased fuel costs. Energy costs are a major cost factor in business operations, and profit pressure tends to emerge clearly during periods of price surges.

Amid heightened international tensions, public transportation has been identified as a potential target for terrorism, and Japan is considered no exception. If a bombing or other terrorist attack were to occur at the Group's facilities or on its vehicles, it could result in extensive damage as well as a loss of operating revenue due to suspension of operations.