MITSUBA Corporation

There is a risk that intensifying price competition with mega-suppliers and overseas local suppliers, new entrants from other industries, and changes in customers' purchasing policies could significantly affect sales and earnings. The Group aims to maintain competitiveness by differentiating through the refinement of core competence technologies and creating new products centered on its core competencies.

There is a risk that delays in developing high-value-added products in response to changes in the market environment, along with the decline of existing products and the lack of new products, could lead to a decrease in sales. The Group addresses this by strengthening its product and technology strategy for electrification, enhancing collaboration between technology development and product development, and introducing new recruitment systems to secure development personnel.

There is a risk of incurring substantial costs due to unforeseeable quality problems, as well as the risk of fabrication, falsification, or failure to conduct inspections of inspection data, including at suppliers, with the degree of impact assessed at the most severe level of "high to extremely severe." The Group is working to prevent recurrence by strengthening the checking function of quality assurance in the product development process and continuing quality culture education and compliance audits.

There is a risk that social and economic disruption caused by wars, conflicts, terrorism, etc., as well as changes in the political and economic conditions of target countries and regions and unexpected changes in laws, regulations, and trade policy, could have a material impact on business. The likelihood of occurrence is assessed at the highest level of "high to extremely high," and the Group responds by establishing an emergency production and sales meeting for global supply-demand adjustment, examining alternative procurement sources and substitute materials in response to export restrictions, and making timely management decisions through regular monitoring.

There is a risk that surging raw material and energy costs, sharp fluctuations in emerging market currencies, and rising prices of materials procured in foreign currencies could put pressure on earnings. As countermeasures, the Group is implementing reductions in raw material usage and continuing to reflect cost increases in selling prices, improving energy efficiency through carbon neutrality activities, and conducting effective foreign exchange hedging.

There is a risk that natural disasters, lockdowns due to infectious diseases, and similar events could cause production stoppages at highly concentrated production sites or disrupt the supply chain. The Group addresses this through optimizing its global production management system, developing second sources for material procurement, dual-sourcing supply across multiple countries, regions, and factories, and maintaining and conducting training on Group BCP manuals.

There is a risk that production stoppages or leakage of confidential information due to cyberattacks could have a significant impact on business continuity and social trust, with both likelihood and impact assessed as "medium to high." The Group addresses this through strengthening security and conducting internal education and internal audits, enhancing information leakage countermeasures and monitoring through systems, and backing up and building redundancy into critical systems.

There is a risk that failure to adapt to climate change, delays in responding to regulations, the occurrence of soil contamination, and violations of regulations on hazardous substances in products could affect business continuity and social trust. The Group addresses this through technology development to meet growing demand for environmentally friendly products, promoting carbon neutrality activities across the entire Group, and planned, voluntary switching away from substances scheduled to be banned.

There is a risk of misconduct occurring, such as violations of competition law, violations of labor law and harassment, violations of foreign exchange law, insider trading, and improper use of expenses. The Group addresses this through thorough compliance awareness activities across the entire Group, development and operation of operational manuals, deterrence of misconduct through division of duties and authority management, and monitoring including internal audits.

There is a risk that deficiencies in the patent assurance system or unauthorized use of intellectual property rights by third parties could affect business activities and competitiveness. The Group aims to protect its intellectual property and reduce infringement risk by strengthening patent investigations of other companies for newly launched products, reinforcing the application of its patent portfolio, and strengthening investigations of other companies' products.