Legal, Regulatory, Political, Economic and Social-Environment Risks in Overseas Operations

「In recent years, wage levels in the Philippines have risen, making it possible that the group may be unable to secure the personnel it seeks as planned. In addition, the situation in the Middle East has caused problems including crude oil procurement difficulties and higher import prices, resulting in rising prices. Furthermore, natural disasters such as typhoons and volcanic eruptions may disrupt communications systems and paralyze urban functions, while terrorist activities by antigovernment organizations may worsen public security. In such cases, the group may be unable to conduct its business activities as planned, and its financial condition, operating results and other matters may be affected.」

「Guided by its corporate philosophy, Open Door, the group is engaged in a range of businesses to create business opportunities ahead of others, develop businesses, transform industrial structures, and realize the society that should be, in areas closely connected to daily life where barriers remain that no one has yet overcome. The global economy remains uncertain due to the uncertain outlook for U.S. policy, including tariffs, a slowdown in the Chinese economy, geopolitical risks such as the situation in Ukraine, and other factors.」

「During the interim consolidated accounting period, commodity and energy prices remained high. Against a backdrop of slowing inflation, moves toward monetary easing emerged worldwide, led by the United States, while in Japan the Bank of Japan implemented additional interest-rate hikes. The outlook therefore remained uncertain. Concerns about geopolitical risks, including the situations in Ukraine and the Middle East, also increased, and uncertainty in the global economy grew.」

「During the six-month period of the second quarter of the consolidated fiscal year, commodity and energy prices continued to rise, while monetary tightening continued worldwide to curb inflation. The prolonged Russian invasion of Ukraine and clashes in Palestine’s Gaza Strip and elsewhere also increased uncertainty about the economic outlook.」

「The economic outlook remains uncertain due to sharp exchange-rate fluctuations and soaring raw material and energy prices resulting from the prolonged invasion of Ukraine.」

「During the six-month period of the second quarter of the consolidated fiscal year, economic activity normalized in countries around the world as COVID-19 cases declined and for other reasons. However, outside Japan, monetary tightening has been intensified to curb global inflation. The prolonged Russian invasion of Ukraine has also increased uncertainty about the economic outlook.」

「During the three-month period of the first quarter of the consolidated fiscal year, economic activity normalized in countries around the world as the number of COVID-19 cases declined and for other reasons. However, inflationary pressures intensified due to the prolonged Russian invasion of Ukraine and rising prices resulting from higher resource costs, while uncertainty about the outlook continued due in part to the impact of monetary tightening in the United States and elsewhere.」

「During the nine-month period of the third quarter of the consolidated fiscal year, economic activity continued to face significant restrictions worldwide due to the global spread of COVID-19.」

「However, as in the Philippines, the COVID-19 pandemic began, and in March restrictions on movement and the suspension of business operations, except for public services and other activities, were implemented.」

「During the nine-month period of the third quarter of the consolidated fiscal year, uncertainty about the outlook for the global economy increased due to the emergence of a novel pneumonia virus in China, conditions in the Middle East, concerns about a slowdown in the Chinese economy and other factors.」

「If laws, regulations, tax systems or policies applicable to the group’s overseas operations are enacted, amended or abolished; interpretations or practical treatment change; government administration changes; political or economic conditions or diplomatic relations change; infrastructure such as electricity, transport or telecommunications is disrupted or delayed; labor costs rise; terrorism, war or infectious diseases occur; or differences in business practices from those in Japan lead to disputes with business partners or others and adversely affect local operations, the group’s financial condition, operating results and other matters may be affected.」