TEIJIN LIMITED

Risk that the expansion of sophisticated cyberattacks across the entire supply chain could lead not only to information leaks but also to a chain of operational shutdowns, equipment failures, and safety incidents, making business continuity difficult. Positioned at the highest level with a risk assessment score of 9 points (impact 3, likelihood 3). Addressed through continued efforts to enhance security levels across the group and through the implementation of BCP training.

Risk that the expansion of geopolitical conflicts due to instability in the Middle East and other regions, sanctions and export controls, and prolonged logistics and energy constraints could continuously restrict procurement and transportation of specific regions or items, causing delays or shortages in raw material supply and cost increases that materially impact production, product supply, and business continuity. Positioned at the highest level with a risk assessment score of 9 points (impact 3, likelihood 3). Addressed through the establishment of a stable procurement system and by strengthening resilience through consideration of countermeasures from a consequence-based perspective.

Risk that large-scale natural disasters such as a Tokyo Metropolitan earthquake, Nankai Trough earthquake, or eruption of Mount Fuji could cause operational shutdowns, logistics disruptions, difficulty securing personnel, and interruption of management functions, materially impacting business continuity. Designated as a priority-managed risk with a risk assessment score of 6 points (impact 3, likelihood 2). Addressed through the review of disaster response manuals and the enhancement of practical effectiveness through the development of SOPs, among other measures.

Risk that equipment malfunctions or operational errors could cause leaks or abnormalities that escalate into fire accidents, leading to production process shutdowns and loss of market confidence, with frequent leaks potentially leading to operational shutdowns due to impacts on external parties and the environment. Designated as a priority-managed risk with a risk assessment score of 6 points (impact 3, likelihood 2). Addressed through response verification and diagnostics at various sites and the review of disaster prevention management aimed at preventing major disaster prevention accidents before they occur.

Risk that unauthorized access or internal misconduct could lead to the leakage of important technology or confidential information, impairing competitive advantage and potentially escalating into sanctions or penalties on economic security grounds. Designated as a priority-managed risk with a risk assessment score of 6 points (impact 2, likelihood 3). Addressed through the review and rollout of information organization and management enhancement measures based on an inventory of important technical information and its management status.

Risk that major quality fraud or misrepresentation could cause significant harm or damage to customers, resulting in business suspension orders and enormous compensation burdens, as well as reputational impact spreading to other businesses. Designated as a priority-managed risk with a risk assessment score of 6 points (impact 2, likelihood 3). Addressed through the strengthening of internal audits specifically focused on quality compliance.

Risk that a compliance issue attracting significant public attention could occur, leading to intensified media coverage and reputational decline, resulting in loss of customers and difficulty continuing business. Designated as a priority-managed risk with a risk assessment score of 6 points (impact 2, likelihood 3). Addressed through strengthened responses for regions and group companies that are harder to monitor closely.

Risk that delays or misuse in AI utilization (such as use of false information, input of confidential information, or erroneous judgments) and insufficient response to AI and data regulations could lead to deficiencies in the design and operation of business and control processes, causing a chain of information leaks, quality defects, and business disruptions. Assessed with a risk assessment score of 4 points (impact 2, likelihood 2). Addressed through the development of education programs for IT-related personnel, clarification of career paths, and the continued provision of DX personnel development programs.

Risk that human resource attrition or prolonged recruitment difficulties could undermine the continuity of important functions such as specialized technology, maintenance, and quality control, weakening business operating capability and the management foundation. Assessed with a risk assessment score of 4 points (impact 2, likelihood 2), with medium- to long-term emergence expected. Addressed through the promotion of improved working environments, including the establishment of systems such as job-based employment and career autonomy support, and regular monitoring of turnover rate levels at major group companies.

Risk that delayed response to environmental regulations, information disclosure obligations, and customer requests for CO2 reduction could result in loss of customers and investor withdrawal. Assessed with a risk assessment score of 2 points (impact 1, likelihood 2), with medium- to long-term emergence expected. The policy is to continuously monitor global regulatory trends and respond without delay.