Occurrence of unforeseen quality problems

「Following subsequent proceedings, the Nagoya District Court issued a judgment in October 2025 dismissing all claims by the Plaintiffs, and the Company has obtained a final judgment in its favor. The judgment fully upheld the Company's arguments, and the Company has determined that there is no impact on the Group's financial results.」

「Following subsequent proceedings, the Nagoya District Court issued a judgment in October 2025 dismissing all claims by the Plaintiffs. The judgment fully upheld the Company's arguments, and the Company has determined that there is currently no impact on the Group's financial results.」

「The Company was sued in the Nagoya District Court by PT Paiton Energy, an Indonesian company (hereinafter, "Paiton"), its insurers and reinsurers (collectively, the "Plaintiffs"), seeking payment of US$151,392,337.48 (¥16,828,772,234) in damages and default interest thereon. The action was filed on 6 July 2021, and the complaint was served on 29 October 2021. Subsequently, pursuant to the Plaintiffs' application dated 11 January 2022 to amend the claim, the amount claimed was increased by US$41.36 (¥4,796) to US$151,392,378.84 (¥16,828,777,030), plus default interest thereon.」

「The action relates to a transformer fire that occurred in January 2018 at a thermal power plant in Indonesia operated by Paiton Energy, referred to below as the power plant. The plaintiffs allege that the Company bears product liability and tort liability and seek damages and delay damages on that amount.」

「Under the direct guidance of senior management, the Group works to reduce quality risks based on the quality policy established by the Quality Committee. The Quality Management Division monitors quality activities at each business headquarters and holds quality meetings to facilitate the prompt resolution of important issues.」

「The action relates to a transformer fire that occurred in January 2018 at a thermal power plant in Indonesia operated by Paiton Energy, referred to below as the power plant. The plaintiffs allege that the Company bears product liability and tort liability and seek damages and delay damages on that amount.」

「The action relates to a transformer fire that occurred in January 2018 at a thermal power plant in Indonesia operated by Paiton Energy, referred to below as the power plant. The plaintiffs allege that the Company bears product liability and tort liability and seek damages and delay damages on that amount.」

「The action relates to a transformer fire that occurred in January 2018 at a thermal power plant in Indonesia operated by Paiton Energy, referred to below as the power plant. The plaintiffs allege that the Company bears product liability and tort liability and seek damages and delay damages on that amount.」

「Subsequently, pursuant to the plaintiffs' motion dated 11 January 2022 to amend the claim, the amount sought was increased by US$41.36 (¥4,796) to US$151,392,378.84 (¥16,828,777,030), plus delay damages.」

「The Company has been sued in the Nagoya District Court by PT Paiton Energy, an Indonesian company, and its insurers and reinsurers, collectively referred to as the plaintiffs, seeking payment of US$151,392,337.48 (¥16,828,772,234) in damages and delay damages. The complaint is dated 6 July 2021 and was served on 29 October 2021. The action relates to a transformer fire that occurred in January 2018 at a thermal power plant in Indonesia operated by Paiton Energy, referred to below as the power plant. The plaintiffs allege that the Company bears product liability and tort liability and seek damages and delay damages on that amount. The Company sold the bushing, manufactured in 2010, which was a component of the transformer. The bushing was incorporated into the transformer by the equipment manufacturer to which it was sold and was subsequently delivered to the power plant through a plant engineering company. The Company believes there is no reason for it to be held liable to the plaintiffs for the accident described above. In response to the plaintiffs' claims, the Company intends to take appropriate action in the proceedings to ensure that the quality of the bushing and the appropriateness of the Company's business conduct are properly determined. Depending on the outcome of the action, the matter could affect the group's business performance, but it is currently difficult to reasonably estimate the impact.」

「The Company confirmed in January 2018 that there had been cases in which delivery inspections required under contracts had not been properly conducted for products including bushings.」

「However, it is not impossible for unforeseen quality problems to occur in any of the products manufactured and sold by the group, and such problems could have a significant impact on the group's business performance.」