Reliance on Specific Suppliers

「In addition, countries are increasingly enacting laws and regulations requiring companies to address human rights issues, and the need to address human rights risks in supply chains is growing rapidly. If the Group is unable to respond to these laws and regulations in a timely and appropriate manner, its business activities, including production, development, procurement and sales, could be affected by legal violations, sanctions such as import bans and fines, and damage to its brand and image resulting from a decline in social credibility, potentially affecting the Group’s operating results and other matters.」

「Accordingly, if supplies from those suppliers are halted, or if the Group is unable to procure materials and parts in a timely manner at competitive prices due to sharp fluctuations in the supply and demand of raw materials and parts, changes in the political situation in supplier countries, tighter import and export regulations relating to economic security, natural disasters or other reasons, production of the Group’s products could be delayed or suspended, and costs could increase.」

「Accordingly, the Group works with its primary suppliers to collect and update supply chain information, including information on primary suppliers and secondary and subsequent suppliers, so that it can respond promptly when these risks materialise and limit their impact.」

「When seeking to procure higher-quality, more technologically advanced products at more competitive prices, orders may become concentrated among specific suppliers. In addition, the number of suppliers able to provide parts requiring specialised technology may be limited.」