Maruhachi Warehouse Company, Limited

With the tightening of the upper limit on truck drivers' overtime working hours from 2024 onward, there is an increasing likelihood that a reduction in cargo handling working hours will also be required in the warehousing business. This may affect the business operations and profitability of the Logistics Business. The securities report explicitly states that the likelihood of this impact occurring is high.

Economic fluctuations, logistics rationalization by client companies, and entry into the logistics industry by companies from other business categories may affect the performance and profitability of the Logistics Business. In addition, changes in the real estate market conditions and the supply-demand balance in the rental real estate market may also affect the Real Estate Business. The Group strives to secure stable earnings through planned equipment maintenance and management and improvement of service quality.

The Group's warehouses and rental real estate are concentrated in the Greater Tokyo Area, and in the event of a large-scale disaster such as an earthquake, a considerable impact on management is expected to occur. As countermeasures, the Group implements aging countermeasures and disaster prevention measures for each property and carries out reinforcement on a sequential basis.

If the fair value of business-use assets such as land and buildings declines, or if sufficient cash flow can no longer be expected from such assets, the Group may recognize impairment losses in accordance with the accounting standards for impairment of fixed assets. This may affect the Group's business results and financial position. The Group's policy is to respond after accurately assessing future cash flows.

The Group procures capital investment funds, etc., through borrowings, and since the policy is to fix interest rates on existing borrowings in principle, the impact on the existing portion is limited. However, future new borrowings may be affected in cost due to interest rate fluctuations.

If the market value of listed shares held by the Group declines or the value of unlisted shares held declines, this may affect business results and financial position. The Group holds both listed and unlisted shares, and changes in market conditions and the business conditions of investee companies constitute direct risk factors.

Retirement benefit obligations are entrusted to an asset management institution as a defined benefit corporate pension plan, and if the investment results fail to reach the expected year-end balance assumed at the beginning of the period, it becomes necessary to newly set aside the shortfall amount. This may affect the Group's business results and financial position.

To secure the necessary personnel, primarily in the Logistics Business, the Group responds through collaboration with external staffing agencies and partner companies in addition to its own employees; however, if a labor shortage becomes apparent in the future, this may affect business operations. The labor shortage across the logistics and transportation industry as a whole has become a structural challenge, and the Group is no exception.

In the operation of the Logistics Business, the Group handles customer information, including personal information, and if an information leak or similar incident occurs, this may lead to a decline in social credibility and affect business performance. As countermeasures, the Group has established an appropriate information management system through obtaining the Privacy Mark (Japan Institute for Promotion of Digital Economy and Community) and ISO9001:2015 certification.