ICOMINCORPORATED

The Group's production facilities are concentrated in Kinokawa City and Aridagawa Town in Wakayama Prefecture. In the event of a Nankai Trough megaquake, typhoon, torrential rain, or other natural disaster, operations could be disrupted due to damage to production equipment or supply chain interruptions. The geographic concentration of production facilities is a factor that heightens this risk, raising concerns about the impact on business performance and financial condition. The Group works to minimize damage through continuous collection of the latest disaster prevention information and ongoing countermeasures.

The Group procures electronic components and other raw materials from Japan, China, Taiwan, and Southeast Asian countries. There is a risk that procurement could be disrupted for an extended period due to unforeseen factors such as conflicts or natural disasters at supplier locations. If procurement is halted, this could directly affect production activities and adversely impact business performance and financial condition. The Group strives to mitigate this risk by diversifying its supplier base.

Overseas sales as a percentage of consolidated net sales remained at a high level, standing at 69.5% in FY2024 (ended March 2024), 66.6% in FY2025 (ended March 2025), and 63.4% in FY2026 (ending March 2026), meaning that fluctuations in foreign exchange rates may directly affect business performance and financial condition. Although the Group has taken measures such as expanding raw material procurement denominated in foreign currencies, foreign exchange risk cannot be entirely eliminated. The high proportion of overseas sales heightens the importance of this risk.

Although the Group designs and manufactures products based on strict control standards, the possibility of product defects occurring in the future cannot be entirely ruled out. If a product defect occurs, it could result not only in substantial costs and damages from large-scale recalls or product liability claims, but also significant harm to the company's reputation. This could affect both business performance and financial condition.

The Group protects its own intellectual property through the acquisition of patents, trademarks, and other intellectual property rights, while also conducting investigations and reviews to avoid infringing on the rights of third parties. However, if issues such as invalidation, imitation, or infringement of intellectual property rights arise with third parties, litigation costs and damages could affect business performance and financial condition. As the Group expands its business globally, the complexity of managing intellectual property rights across different countries is a factor that heightens this risk.