TOKYO PRINTING INK MFG. CO., LTD.

There is a risk of decreased profit due to reduced demand accompanying economic fluctuations, or a risk of opportunity loss due to inability to respond to production when demand increases. Both impact and likelihood of occurrence are assessed as "medium," and as a countermeasure, the Company is building a corporate structure capable of responding quickly and accurately to market trends amid changes in the business environment.

Fluctuations in the foreign exchange market and interest rates give rise to exchange rate fluctuations in foreign currency-denominated transactions (receivables and payables), which is recognized as a risk affecting business performance, with both impact and likelihood of occurrence assessed as "medium." The Company implements appropriate management of foreign currency-denominated receivable/payable balances and currency balance, sensitivity analysis of major currencies to exchange rates, and hedging through forward foreign exchange contracts, etc. It also continuously collects information on international finance, social conditions, and geopolitics.

Errors in product inspection and testing, defects in the manufacturing process, and design defects are recognized as causes of product accidents, and there is a risk of loss of customer trust due to the outflow of defective quality products, as well as the risk of litigation and damages claims. As countermeasures, the Company standardizes product inspection and testing procedures, thoroughly enforces compliance with manufacturing conditions and work procedures, conducts equipment inspection and maintenance, and performs evaluations when design changes are made. The risk of failure in product recall and complaint response is also recognized, and the Company has established initial response procedures and recurrence prevention measures.

Due to the high degree of dependency on specific customers and markets, there is a recognized risk that deterioration of relationships or suspension of transactions could affect business continuity, with both impact and likelihood of occurrence assessed as "medium." As countermeasures, the Company grasps the business conditions of business partners, develops new customers, and explores adjacent business areas. The risk of bankruptcy or delayed payment by customers and partner companies is also recognized as a related risk, and the Company secures receivables through receivable guarantee contracts and credit management of receivables.

There is a recognized risk that changes in trade rules could make it difficult to obtain raw materials or halt product exports, and a risk that political instability (war, terrorism, changes in political systems, etc.) could delay raw material procurement responses, leading to a stagnation of business activities. As countermeasures, the Company diversifies suppliers, investigates trends in trade and commerce-related laws and regulations in procurement and delivery countries, shares information on geopolitical risks, and considers alternative raw materials.

Frequent and intensifying natural disasters may lead to profit pressure due to operational suspension and difficulty securing human resources. Supply disruption of raw materials, natural disasters such as typhoons and earthquakes, and infectious disease pandemics are recognized as the main individual risks. As countermeasures, the Company is strengthening BCP operations, continuing disaster prevention drills, maintaining a multi-supplier procurement system, and developing work-from-home environments.

Excess or shortage of human resources and rising labor costs, failure of technology transfer, decline in employee morale, and outflow of human resources are recognized as the main risks, and linking management strategy with human resource strategy is positioned as essential. The Company aims to reduce risk through stable operation of the new personnel system and senior personnel system, development of educational systems, efficiency improvement through DX enhancement, and purpose permeation activities. Building on the personnel system reform foundation established under the previous medium-term management plan "TOKYOink 2024," the current medium-term management plan "TOKYOink 2027" adopts "Implementation of Transformation" as its basic policy.

Information theft, unauthorized access, and virus infection through cyberattacks, as well as information leakage by internal parties, are recognized as significant risks that could lead to the leakage of the company's confidential information and personal information. System downtime and network failures impair business continuity and are also accompanied by indirect losses such as a decline in trust from customers, business partners, and shareholders. As countermeasures, the Company is implementing the establishment and periodic review of IT-BCP, updating core system environments, developing security platforms (EPP/EDR updates), and providing employee education.

Given the business characteristic of handling large amounts of petrochemical-derived raw materials, responding to tightening environmental regulations and demands to reduce greenhouse gas emissions is recognized as a significant risk, requiring long-term initiatives toward 2030 and 2050. Changes in raw material market conditions, changes in customer needs, technological innovation and obsolescence, and tightening regulations and legal amendments are cited as individual risks. The Company continues to implement measures under its sustainability roadmap, increase the ratio of sustainable product development, promote energy-saving activities, and disclose information through its integrated report.

Discrepancies in perception with business divisions when reviewing the existing product portfolio and delays in formulating new business strategies are recognized as significant risks that could lead to a decline in future target revenue. Industry restructuring, the rise of new entrants, and failure to respond to demand fluctuations due to economic and market conditions are cited as individual risks, with consideration of industry alliances and M&A as countermeasures. The Company has established a progress-tracking system aimed at achieving the revenue targets of its long-term vision "TOKYOink Vision 2030" and its medium-term management plan "TOKYOink 2027."