Risk Management: Integrated Risk Management and Monitoring

MC implements integrated risk management and monitoring, in addition to addressing risks individually. As part of this approach, we identify and manage operational risks, which have become increasingly important in recent years. Each year, we report our risk evaluations to the Board of Directors based on unified standards and the establishment and operation of risk management systems, while taking into account anticipated changes in the external environment. In the fiscal year ended March 31, 2026, we conducted the following four-step evaluation and reported the results to the Board of Directors.

MC identifies major operational risks across the Company and evaluates them on a consolidated basis in accordance with unified standards. The risks are then organized into a risk map. We identify risks with high levels of “Importance of strengthening countermeasures” and “Risk impact”, and arrange appropriate countermeasures accordingly.

In addition to evaluating the current situation (Step 1), MC identifies external environmental factors (geopolitics, technology, environmental conditions, etc.) that may affect major operational risks. This enables us to reflect potential medium-term changes in the external environment. Each factor is evaluated based on recent risk events, the scale of potential future changes, and ripple effects on other external environmental factors.

Based on the results of Step 2, we designate as “Risks that require attention over the medium term” those risk items that show a high correlation with external environmental factors assessed as having a high level of impact.
(see 1, 2, 5, 6,12,13,14 and 17 below).

Among the risks identified in Step 3, we also establish countermeasures for those that were not assessed in Step 1 as having high levels of “Importance of strengthening countermeasures” and “Risk impact” (see 2, 12, and 13).

At present, IT system downtime caused by servers or networks is considered to have a limited company-wide impact. However, as the use of digital technologies such as AI in manufacturing and logistics continues to expand, the potential impact may increase. Accordingly, when entering such industries or business areas, we conduct due diligence-based assessments.

We closely and promptly monitor global developments related to life and safety risks—such as the Taiwan contingency, the situation in the Middle East, and the situation in Ukraine—in coordination with internal and external experts. In the event of a crisis, we implement appropriate safety measures, including travel restrictions, temporary evacuation or relocation, and, where necessary, the deployment of security personnel and armored vehicles.

We continue to monitor the impact of advances in AI and social media on corporate reputation and proactively disseminate information, while continuously strengthening our crisis response capabilities.