Foreign-Exchange, Legal and Regulatory, and Socioeconomic Disruption Risks in Overseas Operations

「Sales of merchandise for overseas markets were affected by lockdowns in major cities under the Chinese government’s zero-COVID policy. However, the Company developed suppliers to expand its product range and worked with distributors to expand sales channels, and the business proceeded generally steadily during the first quarter of the consolidated fiscal year. During the six-month period of the current consolidated fiscal year, however, procurement of merchandise was delayed due to the renewed spread of the novel coronavirus and other factors, causing results to fall below plan.」

「The Group’s business includes the procurement and sale of merchandise overseas. Accordingly, the value after conversion into yen may be affected by the exchange rate used for translation, potentially affecting the Group’s business results and financial position.」

「The Group’s business includes the sale of products and merchandise in China. Accordingly, the value after conversion into yen may be affected by the exchange rate used for translation, potentially affecting the Group’s business results and financial position. In addition, overseas business activities involve risks such as social or economic disruption caused by unexpected changes in laws and regulations, vulnerable infrastructure, regional conflicts, the spread of infectious diseases and other factors, potentially affecting the Group’s business results and financial position.」

「In its overseas operations, the Company’s Chinese subsidiary suspended factory operations for approximately half a month during the first quarter of the consolidated fiscal year to prevent the spread of the novel coronavirus, resulting in lower output and contributing to the decline in sales. After the factory resumed operations, the manufacture and sale of moulded plastic products, including components for household appliances and daily-use products for Chinese and Japanese companies, proceeded relatively steadily, and the Company focused on sales activities to secure new orders. However, the manufacture and sale of office furniture components for European and US companies declined significantly because delays arose in customers’ production systems as a result of the spread of the novel coronavirus.」

「In its overseas operations, the Company’s Chinese subsidiary suspended factory operations for approximately half a month to prevent the spread of the novel coronavirus, resulting in lower output and contributing to the decline in sales. After the factory resumed operations, the manufacture and sale of moulded plastic products, including components for household appliances and daily-use products for Chinese and Japanese companies, proceeded relatively steadily. However, the manufacture and sale of office furniture components for European and US companies declined significantly because delays arose in customers’ production systems as a result of the spread of the novel coronavirus.」

「In its overseas operations, the Company’s Chinese subsidiary suspended factory operations for approximately half a month to prevent the spread of the novel coronavirus. Production declined during that period, resulting in lower sales.」

「The spread of the novel coronavirus, which began around the end of the previous year, mainly in Wuhan, Hubei Province, China, had a major impact on the global economy, resulting in an uncertain outlook.」

「Because sales, particularly of products for North America, declined significantly due to higher procurement costs resulting from tariff increases caused by US-China trade friction and damage to supply chains originating in China, the Company focused on sales activities and implemented measures including improving and strengthening procurement management and appropriately allocating personnel.」

「The Company focused on sales activities because sales to North America declined significantly, among other factors, due to higher procurement costs resulting from tariff increases caused by US-China trade friction and damage to supply chains originating in China.」

「In addition, overseas business activities involve risks such as unexpected changes in laws and regulations, vulnerable infrastructure, regional conflicts, and social or economic disruption caused by the spread of infectious diseases and other factors, potentially affecting the Group’s business results and financial position.」