UACJ Corporation

If GHG emission reduction efforts are insufficient, there is a risk of falling behind in competition among materials and losing business opportunities. On the other hand, there is also an expectation of expanded opportunities to contribute to solving social issues by providing products and services that leverage aluminum's lightweight and recyclable properties. As countermeasures, the company has obtained ASI certification, participates in the GX League, addresses CBAM requirements, and has published its Carbon Neutral Challenge Declaration.

There is a risk that deteriorating political conditions, sudden regulatory changes, or conflicts in countries where customers, suppliers, or production sites are located could lead to increased sales, logistics, and procurement costs, or difficulty continuing operations. Impacts on employee safety are also a concern. Countermeasures include diversifying raw material procurement, considering multiple alternative production sites, and establishing a pricing structure that allows cost increases to be passed on to sales prices.

There is a risk that sudden fluctuations in new aluminum ingot prices, scrap prices, alloying additive metal prices, logistics costs, and energy prices, as well as fluctuations in foreign exchange and interest rates, could affect earnings. Differences in timing between market fluctuations and their reflection in sales prices may cause inventory valuation to fluctuate, potentially affecting accounting period profit and loss. Countermeasures include improving sales forecast accuracy to control inventory, introducing a pricing structure that promptly reflects price fluctuations, and diversifying fund procurement.

For non-financial assets such as property, plant and equipment, goodwill, and intangible assets recorded on the consolidated statement of financial position, if the recoverable amount falls below the carrying amount due to declining profitability or changes in fair value, impairment losses may occur, potentially significantly affecting business performance and financial condition. This is explicitly identified as a risk related to accounting valuations and estimates, and is directly linked to the overall financial soundness of the group.

There is a risk of liability for damages and loss of credibility due to leakage of customer information, personal information, and technical information, as well as risks of information system outages, business interruption, and recovery costs due to cyberattacks. Insufficient response to increasing demands for stronger information management under economic security-related laws and regulations is also a concern. Countermeasures include expanding external monitoring and internal detection systems, taking out cyber insurance, and conducting security education.

There is a risk of loss of credibility with customers and stakeholders due to fraud or improper handling related to quality assurance, as well as market defects and failure to fulfill supply obligations resulting from the release of products that do not meet quality specifications. Countermeasures include confirmation and deliberation by executives through the Quality Committee, mutual quality audits within the group, and operation of the

There is a risk that intensifying competition for talent due to the declining birthrate and aging population, the increasing sophistication of skills required due to overseas business expansion, and impacts on talent retention from employee turnover could affect business continuity. Countermeasures include an internal job posting system, expansion of recruitment regions and media, enhancement of the skills transfer education system through the "Monozukuri Gakuen" (Manufacturing School), and visualization of the talent portfolio along with enhanced recruitment and development measures.

There is a risk that rapid changes in social infrastructure technologies such as digital technology, along with intensifying competition and substitution by alternative materials due to innovative technologies, could change the demand structure. Countermeasures include digitalization of manufacturing, sales, and management through DX promotion projects, discovery of new businesses through an internal venture system, and expansion of sales into new fields and areas using the new brand "ALmitas+".

There are risks of criminal penalties, administrative sanctions, and liability for damages arising from legal violations, loss of business opportunities due to loss of credibility, increased costs of responding to new laws and regulatory systems, and impacts on credibility from various forms of harassment. Countermeasures include confirmation and deliberation by executives through the Compliance Committee, continued education on the UACJ Group Code of Conduct, harassment prevention education, and confirmation of legal compliance through internal business audits.

There is a risk that insufficient dissemination of important group policies and inadequate integrated management of domestic and overseas group sites could affect the exercise of the group's overall strength. Countermeasures include instilling the group's corporate philosophy, strengthening group internal controls, continuing dialogue sessions between the president and other executives and group employees, and continuing internal control audits and business audits.