TACHI-S CO.,LTD.

There is a risk that business performance may fluctuate due to market evaluation by automotive manufacturer customers, sales trends of adopted vehicle models, and the timing of new vehicle launches. Although dependence on any specific manufacturer is low, changes in ordering policies, production adjustments (including raw material shortages), and plant reorganizations may affect business performance. There is also a seasonality risk in which sales and profits are concentrated in either the first or second half of the fiscal year.

As the Company conducts business globally, there is a risk that changes in the political and economic situation in various regions, conflicts, sanctions, and changes in trade policy may cause delays in the procurement of raw materials and parts or disruptions in logistics. Rising energy prices and transportation costs may also affect production activities and profitability. Depending on the degree of dependence on specific regions, the risk of ripple effects across the entire supply chain increases.

With global expansion, when translating local currency-denominated items, including sales, expenses, assets, and liabilities in each region, into yen, fluctuations in exchange rates may affect the value after translation into yen, even if the value in local currency remains unchanged. There is a risk that translation differences in the consolidated financial statements may affect business performance and financial condition.

If the Company is unable to sufficiently anticipate changes in the needs of users and automotive manufacturers and fails to provide attractive new products in a timely manner, there is a risk that future growth and profitability may decline. The Company is conducting research and development of seat technology with a long-term perspective, but the burden of invested funds may also affect business performance and financial condition. Establishing its position as a Global Seat System Creator is considered an urgent priority.

When establishing production sites in line with the global expansion of various automotive manufacturers, unexpected changes in laws and tax systems, as well as terrorism, war, and social unrest, may cause problems in business execution. It is necessary to maintain transactions with multiple manufacturers while responding to each company's overseas strategy, and the complexity of site management is increasing.

If a fire or explosion occurs at a plant or other facility, in addition to damage to buildings and equipment and injury or death of employees, the Company may be forced to suspend operations for an extended period. The Company is promoting measures such as maintenance and management of legally required firefighting equipment, hazardous materials management, fire drills, and fire insurance coverage; however, depending on the scale of the impact, serious problems in business execution may occur, which could also affect social credibility.

If a natural disaster such as an earthquake occurs in a region including production sites, there is a risk of damage to buildings, production equipment, and pre-shipment products, as well as injury or death of employees. In cases where alternative production at other plants is difficult due to jigs and other constraints, operations may be suspended until recovery is complete, potentially causing serious effects on production and social credibility. The Company is advancing measures such as formulating BCP regulations, conducting drills, and disseminating hazard maps.

If information is leaked or exposed due to increasingly sophisticated cyber attacks, this may affect production activities and social credibility. The Company implements comprehensive information security measures, including raising employee awareness through information security education and continuously strengthening and monitoring security systems; however, continued response is required in light of the increasing sophistication of attack methods.

If management at overseas subsidiaries and sites is inadequate, organizational or individual fraudulent, illegal, or unethical conduct may occur, which could affect business performance, financial condition, and social credibility. The Company is taking measures such as establishing an internal reporting system across all group companies and conducting regular business audits (including confirmation of ethics and legal compliance status); however, there are concerns that the risk may increase as global expansion continues.

If a defect in the Company's products causes an accident or a product recall is conducted, this may affect production activities and social credibility, and depending on the scale of the impact, serious problems in business execution may occur. The Company has established a preventive and crisis management system to address this, including holding monthly reporting meetings, analyzing and addressing market complaints, providing quality overview education, and maintaining product liability insurance coverage.