JUKI CORPORATION

Changes in economic conditions and industry trends may have a material impact on the sales and earnings of the Group. Risks in each region are analyzed and reflected in measures at the Risk Management Committee held four times a year, and the latest information is continuously obtained through overseas subsidiaries and other channels. When special measures are required, an internal response structure is established for prompt action.

There is a risk that a sharp rise in raw material prices and logistics costs, the emergence of low-priced products from competitors, or changes in market demand could lead to a decline in price competitiveness and deterioration of earnings. Demand fluctuations are reported by each site at the Group Management Meeting held once a year, and any changes are reported as they occur, with appropriate countermeasures implemented to minimize risk.

There is a risk that changes in political and economic conditions, restrictions on business activities due to changes in laws and tax systems, trade friction, trade issues, and security controls could affect business activities. Regulations in each country are grasped at the Risk Management Committee held four times a year, and the latest information is continuously obtained through overseas subsidiaries and other channels. When special measures are required, an internal response structure is established for prompt action.

There is a risk that fluctuations in foreign exchange rates and interest rates could increase the prices of products sold and materials procured as well as interest payments, affecting business performance and financial condition. The main effects of exchange rate fluctuations are consolidated at the head office, and the situation is monitored at the monthly foreign exchange meeting. Risk is minimized through measures such as allocating foreign currency income from exports to import settlements, forward exchange contracts, and restraining interest-bearing debt.

There is a risk that changes in the Company's credit rating could increase fund procurement costs or restrict fund procurement methods. The Company closely monitors changes in its credit rating and minimizes risk through fund procurement that takes into account interest rate levels in each country and by restraining interest-bearing debt.

There is a risk that business activities could be suspended or significantly restricted due to unpredictable external factors such as natural disasters, infectious disease outbreaks, wars, and terrorism. In addition to gathering information during normal times, the Company strives to minimize the occurrence and expansion of damage by developing systems such as the formulation of a BCP (Business Continuity Plan).

There is a risk that unauthorized access, tampering, destruction, or leakage/loss of information due to cyberattacks and other causes on information systems could lead to production stoppages, quality problems, or leakage of confidential information. The Company pays close attention to the handling of various information and maintaining confidentiality, and has established a management structure to protect against unauthorized access and other threats while implementing appropriate security measures.

There is a risk that product defects, operational errors, over-reliance on specific individuals, or malicious complaints could result in product liability claims and substantial damages. In addition to taking out product liability insurance, the Company strengthens quality measures and conducts daily quality improvement activities at the Quality Meeting held six times a year, thereby minimizing risk.

There is a possibility that damage to brand image and litigation risk resulting from compliance violations, human rights violations, or social sanctions could have a material impact on business activities. Early resolution and correction are pursued through thorough enforcement of the "Compliance Regulations" and the "JUKI Group Code of Conduct," obtaining the latest information on legal regulations in each country, and the establishment and operation of an "Employee Consultation Desk" that allows anonymous reporting.

There is a risk that the declining birthrate, aging population, and rapid changes in the labor market could make it difficult to recruit personnel, address turnover, and provide training both domestically and internationally, hindering sustainable growth. With more than 20 subsidiaries and affiliated companies in Japan and overseas, the Company maintains sound organizational operations by securing and developing human resources on a global scale.