Corporate Risks

Stock ticker code: 6104

The risks which may affect the business performance, stock price, and financial status, etc of our group are as follows:

(1) Seasonal fluctuations of the business performance

Since our group specializes in producer goods, there is a tendency for our sales and operating profit (or loss) to concentrate on the end of terms. Therefore, the business performance of our group may be affected if a portion of the sales or profit is carried over into the next term.

(2) Impact from competitors

Our group manufactures and sells producer goods such as injection molding machines and machine tools and we get fierce competition from competitors in quality, product price, service, etc. The business performance of our group may be affected if the demand falls or if the sales competition gets intensified due to oversupply to market.

(3) Risks of depending on overseas mostly

Our overseas sales account for approximately half of the total; therefore, our business performance may be affected due to changes in political climate, economy, social conditions, and regulations of the region, fluctuations in the exchange rate, and other volatile external factors throughout the world.

(4) Risks of interest rate fluctuation

Our group finances part of its business capital by means of loans from financial organizations.
Our group endeavors to repay interest-bearing liabilities and enhance capital adequacy in accordance with the mid-term business plan; however, our business performance and financial status may be affected if the current interest level changes.

(5) Projected benefit obligation

Our group calculates the projected benefit obligations for our employees based on actuarial assumptions such as the discount rate, and the expected rate of return on pension funds.
If the actual results differ from the assumptions, or if the assumptions change, the impact will be accumulated and applied evenly into the future; therefore, it will affect costs and liabilities in the future in general. Our business performance and financial status may also be affected due to fluctuation of the discount rate and the rate of return on assets.

(6) Impact caused by earthquakes, etc.

Our group owns important production bases in Shizuoka Prefecture and other areas where the (hypothesized) Tokai Earthquake is expected. Our production and business performance, and financial status may be affected greatly if a natural disaster such as an earthquake occurs in any of these areas.

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