NIKKI CO.,,LTD.

The Group's overseas sales ratio is high at 60.3% in FY2026 (ending March 2026), with sales to the United States in particular accounting for ¥3,744 million (40.4% of consolidated net sales). Changes in overseas market conditions and fluctuations in foreign exchange rates could have a significant impact on the Group's financial position and operating results. Specific countermeasures such as foreign exchange hedging are not clearly stated in the securities report.

The Group operates businesses in multiple countries, and if political or economic turmoil such as deteriorating security conditions, terrorism, or war occurs in each region, this could affect the Group's financial position and operating results. Where dependence on a specific region is high, the materialization of risk in that region directly impacts business performance. The securities report does not describe specific risk diversification measures.

The Group's core products are Automotive Carburetors and small engine carburetors, fuel-related devices, and gas fuel supply system equipment, and these may become subject to regulation as environmental protection regulations and laws are tightened in various countries and regions. Although the Group designs and develops products with consideration for reducing substances that adversely affect the environment, there is a risk that tightening regulations could affect the continued sale of products and development costs.

Against the backdrop of recent legal system developments and changes in corporate structure, moves toward unilateral large-scale share purchases without the endorsement of management are becoming more apparent. If the Group carries out an acquisition or becomes the target of an acquisition, depending on the purpose of the acquisition and the management policy after the acquisition, this could adversely affect the Group's financial position and operating results.

Although the Company continuously improves its quality management system, if defects arise in the future that lead to large-scale claim handling costs or product liability compensation, this could adversely affect the Company's financial position and operating results. Given the characteristics of automotive and engine-related components, where safety is highly emphasized, the impact of occurrences such as recalls would be significant.