Execution Risks Associated with Large-Scale LIB Construction Projects and Remote Start-Up

「In response, the Company is taking steps to improve its responsiveness to the market and competitiveness, both to avoid risks and capture business opportunities. These include recruiting highly skilled engineers and developing personnel evaluation systems, pursuing the European EV market through sales activities by a joint venture in Germany, and strengthening the global strategy unit established within the Corporate Planning Headquarters as well as the legal and corporate management functions involved in executing contracts.」

「Expected market and business risks include accidents arising from an increase in major construction projects, the resulting legal liabilities and costs, and a decline in market value due to technological obsolescence. In addition, with the remote start-up, test operation and acceptance witnessing of delivered equipment increasing amid the spread of COVID-19, the Company has not yet accumulated sufficient expertise. As a result, defects, items requiring adjustment or unverified items may be discovered after acceptance, potentially giving rise not only to costs for correcting defects and making adjustments, but also to contractual liabilities and expenses.」