NISHIKAWA RUBBER CO.,LTD.

Although raw materials and parts are procured from multiple suppliers outside the Group, there is a possibility that continuous procurement may become difficult due to rising raw material prices and the impact of the situation in the Middle East and other factors, which could disrupt production activities. As countermeasures, the Group is promoting appropriate pass-through pricing to reflect increases in raw material costs, diversifying procurement sources globally, and advancing the consideration and adoption of substitute materials for raw materials for which procurement difficulties are anticipated.

If a serious failure occurs due to damage to information system equipment or a cyberattack, or if confidential information or personal information is leaked due to unauthorized access, this could lead to production stoppages or loss of social credibility, potentially affecting business performance and financial condition. As countermeasures, the Group thoroughly enforces information management rules and conducts awareness activities for all officers and employees, while promoting measures to improve security levels based on the cybersecurity guidelines of JAMA and JAPIA.

If differences in interpretation or understanding of tax laws arise with tax authorities in the countries and regions where the Group operates, unexpected additional taxes, interest, or penalties may occur, potentially affecting the financial condition. As countermeasures, the Group has established a system for calculating appropriate tax payment amounts utilizing reviews and advice from external experts, and has set up a framework to reach agreement with authorities with the support of experts in cases where differences in understanding occur.

If natural disasters such as earthquakes or heavy rains occur in the countries or regions where the Group conducts business, this could disrupt production and sales activities, potentially affecting business performance and financial condition. As countermeasures, the Group is formulating disaster response and business continuity plans (BCP), introducing safety confirmation systems, installing satellite phones, and conducting disaster preparedness drills, in addition to advancing earthquake mitigation measures and landslide prevention measures at production sites.