TACMINA CORPORATION

The company has obtained ISO9001 certification and strives for quality control, but in the event a product defect occurs, it may adversely affect the financial position, business performance, and social reputation of the Group. As a manufacturer of precision products using steel, resin, electronic components, and other materials, quality issues carry the inherent risk of directly leading to a loss of customer trust.

Purchase prices of steel, resin products, electronic components, and other materials are affected by market price fluctuations and supply-demand trends, as well as by surges in resource and energy prices resulting from changes in the international situation such as multilateral conflicts and trade friction. If these cost increases are not sufficiently passed through to selling prices, it may adversely affect the Group's financial position and business performance.

The Group procures a wide variety of materials and parts from external suppliers, and if a supplier's operations are suspended or logistics are disrupted due to a pandemic, war, terrorism, or similar causes, it may significantly affect production activities. As countermeasures, the Group thoroughly manages production plans, secures advance ordering and appropriate inventory levels, and switches to alternative suppliers or substitute products to minimize the impact.

Both the No. 1 and No. 2 plants are concentrated in Asago City, Hyogo Prefecture, and in the event of a natural disaster such as an earthquake, flood, or typhoon, or a fire or infectious disease outbreak, it may significantly affect not only personnel and property but also production, sales activities, and head office functions, potentially causing business interruption. The Group works to reduce this risk by taking measures such as enrolling in casualty insurance, introducing a safety confirmation system, establishing a remote work framework, and formulating a BCP (Business Continuity Plan).

If a serious problem occurs in the information systems, such as servers becoming unusable due to cyberattacks including external hacking or viruses, it may interrupt business activities and affect the financial position and business performance. The Group has established an "Information Security Basic Policy" and strives to minimize the impact through strict management and operation by a dedicated information systems department.

The Group handles confidential information such as customer information, employees' personal information, and sales and technical know-how, and if an information leak occurs due to unauthorized access or a cyberattack, it may affect the financial position and business performance through the incurrence of response costs and a decline in social credibility. The Group seeks to reduce this risk through multi-layered measures, including establishing internal regulations, thoroughly educating employees, restricting access, installing firewalls, and implementing antivirus measures.

The Group has local subsidiaries in South Korea and the United States, and inherently carries unavoidable risks such as unexpected changes in laws and tax systems, political changes, war, and terrorism. If these risks materialize, problems may arise in future business strategy and execution, potentially affecting the financial position and business performance; the Group addresses this through close coordination and information sharing with local subsidiaries and the use of external experts.

The Group settles some import and export transactions in foreign currencies and has local subsidiaries in South Korea and the United States; therefore, if exchange rates fluctuate more significantly than expected, it may affect the financial position and business performance. The Group works to reduce this risk by hedging with forward exchange contracts as necessary, although complete hedging is difficult.

If unexpected bad debts materialize due to credit concerns regarding business partners, additional losses may need to be recorded or provisions increased, which may affect the financial position and business performance. The Group thoroughly manages trade receivables through monthly monitoring of collection status and periodic review of customers' creditworthiness and credit lines, striving to minimize the impact.

The Group holds securities whose value fluctuates with market prices, and if financial market and economic conditions change or the value of a securities issuer's enterprise deteriorates, it may affect the financial position and business performance through the recording of valuation losses. The Group works to reduce this risk by monitoring regularly to detect potential declines in value at an early stage and, as necessary, selling such securities.