FUJIKURA COMPOSITES Inc.

The risk of business suspension due to inability to use email or business systems, and the risk of information leakage. If abnormalities or failures occur in system equipment or networks due to cyber attacks or other causes, this could seriously impede business continuity. As a countermeasure, the company is verifying the storage status of important information and formulating manuals for use in the event of information leakage.

The risk that delays in technological innovation and business efficiency improvements will make it difficult to supply products in line with market needs, leading to a decline in customer satisfaction and market competitiveness. Delayed response to digital transformation could undermine differentiation from competitors. The company is addressing this by promoting the use of its designated generative AI tools and formulating related guidelines.

The risk that delays in the timely launch of new products into the market will result in lost opportunities and reduced orders for existing products, increasing dependence on specific customers and industries and making sales revenue subject to external production trends. A lack of innovation could lead to a decline in mid- to long-term competitiveness. The company is addressing this by promoting the use of open innovation and building a personnel system for developing and appointing specialized talent.

The risk that shortages of core personnel and over-reliance on individual expertise in business operations will lead to increased working hours, decreased motivation, employee turnover, and insufficient technology transfer, resulting in stagnation of corporate activities. In particular, over-reliance on individuals for specialized technology could cause a significant decline in production and development capabilities if no successor is available. The company is addressing this through appropriate management of working hours and implementation of personnel rotation.

The risk that surging energy and raw material costs will lead to increased costs from changes in suppliers or shifting production overseas, resulting in decreased profits. Fluctuations in global resource prices directly pressure profitability as a manufacturing company. The company is addressing this by promoting price pass-through to customers, but if such pass-through is difficult, a deterioration in profit margins is anticipated.

The risk that stricter environmental regulations or the closure of suppliers will make it difficult to obtain raw materials, ultimately making it impossible to produce products that use such materials. A disruption in the supply chain directly affects product supply capability and could make it impossible to fulfill delivery obligations to customers. The company is addressing this by examining alternative materials that comply with environmental regulations.

The risk that conducting transactions in violation of the Subcontract Act or competition law could result in criminal or administrative penalties, leading to a decline in sales due to loss of social credibility. Compliance violations directly damage corporate value and could also lead to a loss of trust from business partners and investors. The company is addressing this by disseminating information on legal revisions and monitoring transactions subject to the Subcontract Act.

The risk that the occurrence of severe natural disasters could cause a combination of damages, including production halts due to damage to factory equipment, employee casualties, operational shutdowns, destruction and leakage of confidential information, and leakage of toxic substances. The intensification of natural disasters due to climate change is increasing threats to business continuity. The company is addressing this by updating its BCP (Business Continuity Plan) and conducting BCP drills.

The risk that delays in material substitution, energy-saving manufacturing processes, and the transition to renewable energy, or failure to translate these into concrete action plans, could make it impossible to supply products with added value. With increasing ESG requirements, delays in sustainability response could lead to lower evaluations from customers and investors. The company is addressing this by proposing GHG emissions forecasts and countermeasures that comprehensively cover the 7th Medium-Term Management Plan data.

The risk that the occurrence of quality defects could damage the company's image among customers, lead to market complaints, increase compensation costs, and result in litigation. In the manufacturing industry, quality issues directly affect the continuation of business relationships with customers and could also damage brand value. The company is addressing this through review and discussion at the monthly quality assurance general meeting and confirmation of the appropriateness of corrective actions.