NSK Ltd.

There is a risk that logistics disruptions, procurement difficulties, and production stoppages caused by international conflicts, as well as surges in raw material and energy prices, could pressure earnings, in addition to the possibility that trade and economic security policies in various countries could worsen the business environment. As countermeasures, the Company is implementing supply chain visualization and consideration of alternative measures, as well as timely information gathering to support sales price adjustments and consideration of changes in production locations.

There is a risk that development responses may lag behind market changes and customer technical requirements arising from technological innovation, potentially leading to a decline in competitiveness and the loss of business opportunities. In addition to thoroughly managing and operating development plans based on medium- to long-term policies, the Company is strengthening its responsiveness through the use of open innovation and alliances.

There is a risk that inadequate BCP responses to natural disasters and pandemics, the occurrence of serious occupational accidents, and operational suspensions due to fire could have a serious impact on business continuity. The Company is working to reduce the likelihood and impact of such events through prioritization and identification/implementation of specific measures based on impact analysis, strengthening the management system at key sites, and enhancing group-wide educational activities.

There is a risk that the occurrence of serious quality problems, a decline in response capability due to inadequacies in the quality assurance system, and falsification or tampering of quality data could damage customer trust and corporate value. The Company is promoting strengthened countermeasures based on analysis of past cases, mitigating impact through the introduction of a company-wide traceability system, and enhancing quality audit activities and education.

There is a risk that delays in long-term energy reduction measures could lead to lost business opportunities and damage to corporate value, in addition to the possibility that leakage of environmentally hazardous substances or exceeding emission standards could lead to legal sanctions or operational suspension. The Company is addressing this through the execution of investment plans based on the energy reduction target achievement cycle and by strengthening the management system at key sites and enhancing prevention activities.

There is a risk that delayed responses to changes in laws and regulations in various countries and insufficient capability to address global tax issues could adversely affect business operations and finances. The Company is addressing this through information sharing and education/training via the group compliance system, expanding international tax response resources, and strengthening the tax management system.

There is a risk that difficulty in securing capable global talent could hinder business expansion and strategy execution, and that delays in reviewing personnel systems and inadequate responses to labor-related laws in various countries could impede business operations. The Company is addressing this through strengthening recruitment processes tailored to conditions in each country and region, enhancing succession planning, and formulating and implementing action plans based on engagement surveys.

There is a risk that dependence on specific suppliers could hinder smooth procurement, and that a supply disruption could directly impact production activities. The Company is diversifying procurement risk through consideration of alternative products, diversification of suppliers, and promotion of local procurement.

There is a risk that delivery delays and cost increases in the introduction of core systems, as well as information security incidents such as cyberattacks and leaks of confidential information, could have a serious impact on business operations and competitiveness. The Company is addressing this through thorough project management and establishment of a strict additional development review process, planned system updates and regular vulnerability assessments, and improving early detection and response capabilities and strengthening early recovery systems.

There is a risk that unexpected changes in the business environment could hinder the achievement of the medium-term management plan, and there is concern that insufficient dialogue with stakeholders could adversely affect corporate value enhancement and external evaluation. The Company is addressing this by monitoring the degree of plan achievement and formulating and implementing new countermeasures in response to changes, as well as by invigorating engagement activities with stakeholders and raising the level of disclosure and communication.