UNIPRES CORPORATION

The Nissan Group, the Company's largest customer, accounts for approximately 80% of the Group's sales performance, and if this group experiences a decline in sales or changes its management strategy or purchasing policy, it could have a material adverse effect on the Group's financial position and operating results. While the Company is also focusing on expanding transactions with Honda, Renault, Mazda, Mitsubishi Motors, and others, the high degree of dependence remains a structural risk.

Advancing vehicle electrification may reduce demand for the Precision Parts business, which centers on transmission-related components. While the Company is focusing on developing products such as EV battery cases, if electrification progresses faster than expected, a decline in Precision Parts sales could adversely affect the Group's financial position and operating results.

Price competition in the automotive industry is extremely severe, and the Company may be forced to lower product prices in a way that reduces profitability in order to compete with rivals. While the Company addresses this through cost reduction via rationalization and higher value-added products, the risk that price reductions will lead to lower profitability continues to exist.

Business operations in the Americas, Europe, China, and other Asian regions inherently carry a variety of risks, including political and economic instability, protectionist trade regulations, significant exchange rate fluctuations, labor disputes such as strikes, and terrorism or war. While the Company addresses these through the use of APAs, foreign exchange forward contracts, and the establishment of a global legal framework, if events beyond expectations occur, they could adversely affect the Group's financial position and operating results.

The Company utilizes information technology, networks, and systems across its overall business activities, and may not be able to avoid increasingly sophisticated and advanced cyberattacks. In the event of an incident, damage could extend across the entire supply chain, including loss of public trust due to leakage of personal information, occurrence of liability for damages, and business suspension due to server downtime. The Company is working on formulating a basic information security policy, strengthening defenses, conducting recovery drills, and providing employee training.

With numerous business sites in Japan and overseas, operations may be suspended due to natural disasters such as earthquakes, typhoons, and floods, or due to the spread of infectious diseases. While the Company addresses this through BCP formulation and BCM system development, if damage on a scale exceeding expectations causes building or facility collapse, lifeline disruption, or production interruption, this could result in substantial repair costs and delays in parts supply to customers, adversely affecting the Group's financial position and operating results.

Although the Company has established a global quality assurance system, damage may occur due to product defects, product liability, or recalls. While the Company carries insurance against product liability and recalls, defects leading to large-scale recalls or product liability claims could incur substantial costs, adversely affecting the Group's financial position and operating results.

The Company depends on specific suppliers, both within and outside the Group, for the procurement of key parts and purchased products, and if a supplier's operations are suspended or the supply chain is disrupted, this could impede the Group's production. While the Company strives to achieve stable transactions through basic transaction agreements, regular process audits, and financial condition checks, the risk of supply disruption remains.

While the Company is advancing efforts to meet customer needs centered on Auto Body Press, precision press, and resin press technologies, if it is unable to timely develop new technologies and products in response to changing customer needs and industry technology trends, this could reduce competitiveness and adversely affect the Group's financial position and operating results. The Company continues to focus on developing products for EVs, but the risk is increasing as the pace of technological change accelerates.

The Company is actively working to secure human resources in new specialized fields such as electrification, weight reduction, and IT, but due to a tight labor market and intensifying competition for talent, including from other industries, if it is unable to develop and secure the necessary human resources, this could affect business activities and management. The Company is working on transforming into a learning organization with high psychological safety and implementing well-being initiatives.