TOKYO RADIATOR MFG. CO., LTD.

The company depends on a small number of specific manufacturers in the truck, industrial, and construction machinery sectors for a large portion of its sales. A decline in sales volume due to economic fluctuations could significantly affect the company's financial position and business results. Customer concentration risk is high, creating a structure in which a decrease in orders from a specific customer could directly lead to a deterioration in performance.

Nearly all of the company's business depends on the truck, industrial, and construction machinery industries, which are highly susceptible to economic fluctuations. Depending on future deterioration in economic conditions, demand could decline significantly, potentially affecting the company's financial position and business results.

The company currently maintains a comparative advantage in products such as Heat Exchangers, but there is a risk that this advantage could be lost if competing manufacturers develop new technologies. Additionally, intense market competition could lead to declines in selling prices, potentially affecting the company's financial position and business results.

The company purchases non-ferrous metals such as aluminum and stainless steel as principal raw materials, and there is a risk that purchase prices will fluctuate due to market conditions for non-ferrous metals. If price increases cannot be fully passed on to selling prices, profitability could deteriorate, potentially affecting the company's financial position and business results.

The company raises funds through bank borrowings, and if borrowings become substantial and interest rates rise significantly, financing costs could increase, potentially affecting the company's financial position and business results. This is a risk that requires particular attention during periods of rising interest rates.

Although the company implements strict quality control based on ISO/TS16949, if a serious claim were to occur in the future, it could not only affect the company's financial position and business results but also damage its corporate image. Quality defects are a risk directly tied to the company's credibility as a supplier to the automotive and industrial machinery sectors.

The company has manufacturing subsidiaries consisting of two companies in China, one in Indonesia, and one in Thailand. Changes in the political situation, laws, and economic practices of each country could disrupt production and hinder business plans. Geopolitical risks and changes in local regulations could threaten stable operations at overseas sites, potentially affecting the financial position and business results of the group as a whole.

Retirement benefit expenses and retirement benefit obligations are calculated based on actuarial assumptions such as the discount rate and mortality rate. If actual results diverge from these assumptions, or if the assumptions are changed, losses may occur. If the discount rate fluctuates due to changes in the interest rate environment, retirement benefit obligations could increase, posing a risk to the company's financial position.

In the event of a natural disaster such as an earthquake, wind, or flood damage, or a fire or accident, factories and other facilities could suffer severe damage, potentially halting or significantly restricting production activities. While the company continually strives to enhance and strengthen its health and safety management system and conduct planned maintenance and inspection of facilities, it is difficult to be fully prepared for disasters that exceed expectations.

The Sustainability Promotion Committee is working to address ESG issues, but if such efforts prove insufficient, it could lead to a decline in social credibility and lost opportunities, potentially affecting the company's financial position and business results. Additionally, restrictions on economic activity due to public health and safety concerns, such as the spread of new infectious diseases, are recognized as a risk that could affect the business through domestic and overseas supply chains.