KYOTO TOOL CO.,LTD.

The company promotes quality-first manufacturing, including obtaining ISO9001 certification, but recognizes that it is difficult to completely eliminate quality risks in the product development and manufacturing process. The expansion of TRASAS Series products and the extension of business into services may cause new quality risks to emerge, which could affect business performance.

The company procures steel materials and parts from domestic and overseas suppliers to produce work tools, but supply chain disruptions caused by U.S. trade policy or geopolitical risks in the Middle East may lead to soaring material and energy prices or procurement difficulties. This poses a risk of a material impact on the company's production and supply capabilities.

Since its founding, the company has had strength in the automotive-related field and has developed sales primarily through sales agent routes, but rapid transformation of distribution routes accompanying changes in the external environment may affect net sales. Due to the high degree of dependence on existing sales channels, responding to changes in distribution structure is a challenge.

Two domestic consolidated subsidiaries operate in the Tools Business, and their performance may affect the group's overall business performance and financial position. Deterioration in the business environment of subsidiaries carries a risk of directly spreading to the group's consolidated performance.

The company is strengthening management through system measures, education, and awareness activities to ensure information security across the group, but if important information such as personal data is leaked for any reason, in addition to the impact on business and brand image, the company may be subject to claims for damages. Continuous response to diverse threats such as cyberattacks and internal misconduct is required.

Competitors, including overseas manufacturers, exist in the product and service markets, and if the company is unable to provide comprehensive services at competitive prices, there is a risk of losing market share and customer business relationships. This may affect the group's overall business performance and financial position.

The core automotive-related industry is undergoing structural change due to rapid technological innovation, making the development and external recruitment of talent capable of anticipating and responding to change an important challenge. If the development and retention of human resources are insufficient, it may hinder new product development and the provision of new services, potentially adversely affecting the group's overall business performance.

The company has prepared business continuity manuals and conducts emergency contact drills utilizing a safety confirmation system in preparation for emergencies such as natural disasters and infectious diseases, but if a situation arises that unavoidably requires the stagnation or suspension of corporate activities, the group's overall business performance and financial position may be affected. Although a system aimed at early recovery of core business has been established, risks remain in the event of a large-scale disaster.