Meiji Shipping Group Co., Ltd.

Charter fee revenue in the Ocean-going Shipping Business is primarily denominated in U.S. dollars, but some costs remain denominated in yen, which could adversely affect earnings if the yen appreciates. In addition, mismatches in the balance of U.S. dollar-denominated and yen-denominated assets and liabilities affect earnings through valuation gains and losses recognized at the time of financial closing. As countermeasures, the Group is promoting the dollar-denomination of expenses and implementing hedging transactions such as forward exchange contracts.

As the Group's main business involves vessel ownership and it continues to make large-scale capital investments such as newbuilding construction, it relies on external liabilities such as bank borrowings to fund much of the necessary capital. There is a risk that some variable-rate borrowings that have not been fixed could squeeze profits if interest rates rise. The Group addresses this by reducing interest-bearing debt and fixing interest rates through interest rate swap transactions.

In the Ocean-going Shipping Business, if an unforeseen accident or large-scale marine pollution due to oil spillage occurs, it could have a significant impact on operations. The Group works to prevent accidents and pollution by focusing on crew education and training systems, and prepares for such risks by maintaining sufficient vessel insurance coverage.

Buildings and leisure facilities may be affected by natural disasters such as earthquakes and typhoons, infectious diseases, and overseas circumstances such as international conflicts and terrorism. In particular, if an infectious disease outbreak becomes prolonged, business could be affected by a decline in travelers and facility users. The Group is developing a business continuity framework while ensuring employee safety and thorough hygiene management.

In Group businesses that provide food and beverage services and sell food products, the occurrence of food poisoning due to hygiene management issues or errors in food labeling could lead to a loss of public trust and affect operations. The Group pays daily attention to and thoroughly manages labeling related to food safety, expiration dates, place of origin, and ingredients.

The Hotel-related Business holds customers' personal information, and if an information leak occurs, it could lead to a loss of public trust and affect operations. The Group strives to reduce this risk by establishing a rigorous information management system.

The Group evaluates the recoverability of deferred tax assets based on estimates of future taxable income, but if the estimated amount decreases due to changes in the economic environment or other factors, deferred tax assets will be written down and tax expenses will be recognized. This could affect the Group's financial position and operating results.

If the profitability of owned fixed assets significantly declines due to changes in business plans or market conditions, an impairment loss will be recognized, which could affect the Group's financial position and operating results. The Group applies accounting standards for impairment of fixed assets and conducts appropriate valuations.