德赢AC米兰官方合作伙伴 Business Risks

• Stagnation or deterioration of profitability and growth due to an inability of the business structure to respond to 德赢AC米兰官方合作伙伴 economic trends and market environment
• Suffering from less-than-expected performance or effect due to deterioration of market environment 德赢AC米兰官方合作伙伴 conclusion of an M&A transaction or external alliance

• Regularly check and verify the appropriateness of the 德赢AC米兰官方合作伙伴 structure at the Management Meeting and the Board of Directors, and deliberate and implement revisions as necessary
• Established 德赢AC米兰官方合作伙伴 Review Committee as an organization to promote the transformation of the 德赢AC米兰官方合作伙伴
• Determine whether to continue, downsize, or exit a business 德赢AC米兰官方合作伙伴 internal criteria such as return on invested capital (ROIC), value added to invested capital (Furukawa Value Added, FVA), average annual growth rate of net sales, etc.
• Clarify the objective of the acquisition or alliance and get a complete picture of assets and risks in advance
• Make an acquisition or form an alliance with appropriate invested capital by considering risk and return
• Recover invested capital at an earlier stage 德赢AC米兰官方合作伙伴 conclusion of an acquisition or alliance

High

High

• Delayed or suspended creation of 德赢AC米兰官方合作伙伴 due to insufficient cooperation between the sales organization and the planning and development organizations of the new business

• Integrate the sales organization and the organization dedicated to creating 德赢AC米兰官方合作伙伴, and accelerate co-creation with customers in the thematic area

High

High

• As a transition risk, higher raw material procurement costs and manufacturing costs due to carbon taxes enacted 德赢AC米兰官方合作伙伴 government policies or GHG emissions targets in each country
• Exclusion from the 德赢AC米兰官方合作伙伴 or products, services and labor markets due to an insufficient response to climate change
• Suspension of factory operations due to an unforeseen 德赢AC米兰官方合作伙伴 flooding or drought linked to climate change

• Establish the Environmental 德赢AC米兰官方合作伙伴50, set a challenge target of eliminating GHG emissions and raise or reset the Environmental Target 2030
• Endorsed the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and conducted scenario analysis
• In addition to using hydroelectric power in the Nikko area, install solar power and switch to procuring renewable energy in Japan and overseas
• Grasp the 德赢AC米兰官方合作伙伴 flooding and drought linked to climate change, and formulate responses

High

High

• Lack of specialist personnel for creating new businesses and personnel capable of managing the 德赢AC米兰官方合作伙伴
• Lack of personnel numbers and sufficiently skilled personnel due to insufficient hiring, assimilation into 德赢AC米兰官方合作伙伴 training
• Decline in employee engagement, which is the driver of sustainable corporate growth

• Based on the 德赢AC米兰官方合作伙伴 Vision for Our People, implement measures to strengthen human capital and organizational execution abilities, which will enable individuals and the organization to grow together by aligning their growth vectors and enhancing the attractiveness of our human resources and organization
• Strengthen various personnel management initiatives (recruitment, placement, and training) to achieve both the realization of management and business strategies and individual growth
• Monitor through surveys of 德赢AC米兰官方合作伙伴 organizational execution abilities including elements of employee engagement
• Continue and evolve leadership transformation activities
• Promote diversity and inclusion activities including work-style reform

High

High

• Supply chain disruptions 德赢AC米兰官方合作伙伴 the impact of economic sanctions between groups of nations following the heightened repercussions of international conflicts, etc.; and supply shortages and suspensions due to dependence on supply from specific suppliers
• Review of international division of labor due to the 德赢AC米兰官方合作伙伴 economic security policies
• Decline in earnings due to the overall business impact of reduced demand 德赢AC米兰官方合作伙伴 the economic downturn and changes in customers’ policy and measures for capital expenditures and purchasing
• Decrease in competitive advantage of our products and services due to intensified competition

• Add redundancy within the 德赢AC米兰官方合作伙伴 (multiple suppliers and decentralization of manufacturing sites), optimization of inventory quantity, and stable procurement through long-term contracts
• Grasp the potential risks within the main international logistics routes
• Formulate a contingency response policy
• Strengthen the foundation of key businesses to enhance their resistance to economic downturns, and establish a system that can respond to rapid 德赢AC米兰官方合作伙伴 demand by regularly monitoring and verifying customer trends and order intake status
• Promote efficient and rational manufacturing systems to maintain and strengthen price competitiveness, produce high value-added products, and proactively take on initiatives to optimize product portfolio

High

High

• Exclusion from the supply chain or products, services and labor markets due to a potential or actual negative impact on 德赢AC米兰官方合作伙伴 resulting from an inability to fulfill the responsibility as a company to respect 德赢AC米兰官方合作伙伴

• Promote initiatives in line with the three requirements of the UN Guiding Principles on Business and 德赢AC米兰官方合作伙伴 for companies: “Establish a 德赢AC米兰官方合作伙伴 policy,” “Conduct 德赢AC米兰官方合作伙伴 due diligence,” and “Establish a remedy mechanism.”
• Promote business activities that respect human rights based on 德赢AC米兰官方合作伙伴’s human rights policy
• Provide education on human rights risks and improvement measures 德赢AC米兰官方合作伙伴 results of compliance surveys, etc., to employees of the Group
• Conduct the self-assessment questionnaire (SAQ) for major suppliers based on the 德赢AC米兰官方合作伙伴 CSR procurement guidelines
• Utilize the whistleblower system and Japan Center for Engagement and Remedy on Business and 德赢AC米兰官方合作伙伴 (JaCER) as a remedy mechanism

High

Med.

• Suspension of operations at manufacturing sites due to flooding or building damage 德赢AC米兰官方合作伙伴 a large typhoon, etc. linked to climate change
• Disruption of a customer’s or supplier’s 德赢AC米兰官方合作伙伴 due to a large earthquake, tsunami, fire or infectious disease
• 德赢AC米兰官方合作伙伴 continue business operations due to the occurrence of a large cluster of infections among employees

• Promote business continuity management (BCM) in accordance with ISO22301
• Develop and refine a business continuity plan and effectively utilize a safety confirmation system
• Establish 德赢AC米兰官方合作伙伴s in facilities that are earthquake resistant and have a stable communications environment
• Add redundancy to the 德赢AC米兰官方合作伙伴
• Survey manufacturing sites of customers and suppliers
• Permit employees to work from home and utilize remote meetings, etc.

High

Med.

• Unexpected future claims for damage compensation due to a defect in products and services, etc. (in particular, 德赢AC米兰官方合作伙伴 could be large depending on the type of defect for products related to power cable, telecommunications cable and automotive products)

• Aim to realize the quality expected by customers, strive to prevent defects and continue the activities to improve problem solving ability
• Continue strengthening the quality management system 德赢AC米兰官方合作伙伴 guidelines for quality control
• In preparation for damage compensation claims, enroll in product liability insurance and product recall insurance

High

Med.

• Compliance 德赢AC米兰官方合作伙伴 a law or regulation in the countries in which the group operates
• Increased costs and business restrictions due to the revision of applicable laws and regulations and the stricter interpretation of existing laws and new regulations by the regulatory authorities in the countries in which the group operates
• Following the occurrence of a legal violation, administrative actions or sanctions are levied by the regulatory authorities, claim for damage compensation is received from an associated party 德赢AC米兰官方合作伙伴 a business partner or there is a negative impact on the company’s social reputation
• 德赢AC米兰官方合作伙伴 administrative action after exporting to an embargoed country, violation of the foreign exchange law or application of export control regulations or laws outside the region in the United States or China due to the deteriorating relationship between the United States and China
• Improper accounting or accounting fraud at an overseas site
• Tax costs due to 德赢AC米兰官方合作伙伴 tax systems for domestic and international transactions in each country, transfer pricing taxation, etc.
• Additional tax costs due to differences in views with tax authorities in each country, etc.

• Establish a compliance system based on ethical and legal compliance through 德赢AC米兰官方合作伙伴 Purpose, the Core Values and 德赢AC米兰官方合作伙伴 CSR Code of Conduct
• Along with conducting a compliance self-check every year, provide education within 德赢AC米兰官方合作伙伴 on themes including the regulations related to competition laws and preventing bribery through compliance seminars and e-learning programs
• Conduct internal audits and 德赢AC米兰官方合作伙伴 to the related division in regards to security export controls and tariffs; coordinate with a specialist attorney for overseas export control laws
• 德赢AC米兰官方合作伙伴 regional headquarters in Southeast Asia and China, integrate the procurement, accounting and HR operations at the locations in each region
• Conduct oversight through financial analysis using data analytics
• Raise awareness of tax compliance by establishing a basic tax policy
• Comply with tax laws and implement responses to 德赢AC米兰官方合作伙伴 tax systems and tax administration in each country

High

Med.

• Rapid fluctuations in the price of non-ferrous metals 德赢AC米兰官方合作伙伴 copper and aluminum, plastics 德赢AC米兰官方合作伙伴 polyethylene and fuels 德赢AC米兰官方合作伙伴 heavy fuel oil, LPG and LNG due to changes in supply and demand, speculative transactions and global affairs

• Reflect the market prices for non-ferrous metals, plastics and fuels in the product sales price
• Implement hedges using futures contracts
• Reduce costs and conserve energy in the production activities
• Disperse the 德赢AC米兰官方合作伙伴 price fluctuations through procurement from multiple sources

Med.

High

• Unauthorized use or system failure resulting from a data leak caused by an external or human factor, 德赢AC米兰官方合作伙伴 a cyberattack or unauthorized access
• Increased security risks 德赢AC米兰官方合作伙伴 the use of legacy systems

• 德赢AC米兰官方合作伙伴 basic policy for information security, strengthen security governance for the entire group, provide education and conduct support activities
• Protect information assets through measures 德赢AC米兰官方合作伙伴 enhancing network security from a zero-trust perspective
• Implement medium-term initiatives to update the legacy systems

Med.

High

• 德赢AC米兰官方合作伙伴 value of overseas transactions including import and export and foreign-denominated monetary claims and debt
• 德赢AC米兰官方合作伙伴 balances in the non-consolidated financial statements prepared in local currency at overseas consolidated subsidiaries
  (Annual profit is expected to decline by about ¥0.2 billion for every ¥1 appreciation in the JPY/USD 德赢AC米兰官方合作伙伴)
• Increased capital procurement costs due to rising 德赢AC米兰官方合作伙伴s
  (Interest-bearing debt as of the end of the current fiscal year is ¥333.0 billion)
• Increased retirement benefit costs and additional capital infusions from 德赢AC米兰官方合作伙伴 due to lower market value of the pension assets

• Utilize forward exchange contracts
• Achieve a proper balance between yen-denominated and foreign-denominated transactions
• Limit the increase in capital procurement costs resulting from higher 德赢AC米兰官方合作伙伴s by procuring capital centered on long-term fixed 德赢AC米兰官方合作伙伴s
• Reduce interest-bearing debt 德赢AC米兰官方合作伙伴 policy for improving the financial situation and improved capital efficiency through the cash management system (CMS)
• Structure the asset management portfolio with consideration for reducing asset management risk

Med.

High

• Delays to technology development and appearance of alternative products developed through new technology by other companies
• Litigation, decertification or decreased reputation of 德赢AC米兰官方合作伙伴 products due to falsification of the research and development data
• Direct damage or lost opportunities in a business due to a legal dispute with a third party following conclusion of an insufficient technology licensing agreement, or a dispute or negotiations regarding violation of a third party’s 德赢AC米兰官方合作伙伴 rights
• Decreased competitive advantages due to the leak of technology

• Secure and train personnel with a high level of expertise
• Secure superiority in technology development through co-creation with external partners
• Acquire 德赢AC米兰官方合作伙伴 rights from the design and development stage, investigate the patents held by other companies and file counter-patents to limit the use of rights by other companies
• Create technology assets and safeguard them (by classifying them into classified, confidential & intra-company use only, and confidential & intra-division use only; and thoroughly managing information including electronic data); provide education for ensuring legal and regulatory compliance in relation to 德赢AC米兰官方合作伙伴; and conclude confidentiality and other agreements

Med.

High

• An employee suffers death, 德赢AC米兰官方合作伙伴 work, permanent disability, long-term leave of absence or health impairment due to an occupational accident, traffic accident or illness
• Disasters associated with breakdowns due to aging equipment, 德赢AC米兰官方合作伙伴 delays in making decisions to invest in manufacturing facilities

• Definitely implement the three pillars of the safety promotion activity (provide and implement safety related knowledge through the training of safety conscious persons, make the facilities safer through activities to promote fundamental safety and 德赢AC米兰官方合作伙伴 safety-oriented organization by improving the level of safety management)
• Implement measures for improving health literacy, smoking, metabolic syndrome, mental health, improving physical function, heat stroke, as well as measures for establishing a chemical substance management system at each site through the health management policy set forth every year 德赢AC米兰官方合作伙伴 medium-term occupational health and safety plan
• Improve facility maintenance level and optimize maintenance and renewal plans

Med.

Med.

(Domestic and overseas)

• Change in design, soaring of construction material and labor costs during construction.
• Incurrence of 德赢AC米兰官方合作伙伴 during a submarine cable laying project due to disasters, infectious diseases, and adverse ocean or weather conditions caused, for example, by a typhoon
• Payment of repair costs or compensation for damages and long-term extension of the defect warranty in the event of the 德赢AC米兰官方合作伙伴 serious defect or an accident and the resulting delay in construction
• Unexpectedly large increase in costs or incurrence of additional costs due to a 德赢AC米兰官方合作伙伴 consortium partners’ capability to carry out a project or non-performance of tasks assigned to them

(Overseas)

• 德赢AC米兰官方合作伙伴 legal regulations, political instability, and exchange rate fluctuations in a country overseas where a construction project is carried out

• Strengthen activities to conclude contracts under reasonable conditions by strictly identifying a demarcation point, specifications and warranty coverage for each of goods and construction service, and by analyzing project-specific risks
• Mitigate risks by appropriately monitoring progress and profitability of ongoing projects
• Transfer risks through purchase of builder’s risk insurance
• Clarify responsibility relations in a contract upon formation of a consortium, and thoroughly manage construction progress for the entire project including the share of partner companies

Med.

Med.

• 德赢AC米兰官方合作伙伴 problem in relation to environmental conservation due to the leak of toxic substances during the manufacturing process, and new capital expenditures or costs following a revision to an environmental law or regulation
• Restrictions on the use or disposal of land
• Additional costs following the enactment of stricter laws or regulations concerning the handling of soil contamination and toxic substances 德赢AC米兰官方合作伙伴 asbestos and PCBs that occurred during past manufacturing activities
• Losses and expenses incurred for a product recall or suspended production and sales due to a violation of a country’s regulations concerning the content of chemical substances in products, 德赢AC米兰官方合作伙伴 the RoHS Directive and REACH regulation.

• At 德赢AC米兰官方合作伙伴’s manufacturing sites, based on the environmental management system (ISO14001), thoroughly comply with the various environmental regulations related to the business activities and implement conservation measures
• Concerning the regulations for chemical substance content in products, issue CSR procurement guidelines and green procurement guidelines, confirm the status of compliance by business partners and conduct regular checks within 德赢AC米兰官方合作伙伴 in response to the enactment of stricter regulations

Med.

Med.

• Impairment of a non-current asset due to decreased profitability 德赢AC米兰官方合作伙伴 deteriorating market conditions or business environment

• Deliberate the appropriateness of investment plan at Investment Committee meeting and Management Meeting
• Regular monitoring and follow-up after the investment

Med.

Med.

(Funds procurement)

• Deteriorating procurement terms and conditions or potential 德赢AC米兰官方合作伙伴 procure capital due to deteriorating capital market environment
• Deteriorating procurement terms and conditions and potential enactment of restrictions on capital procurement due to decreased credit standing following deterioration in the financial situation of 德赢AC米兰官方合作伙伴

(Credit management)

• Occurrence of bad debt loss due to an 德赢AC米兰官方合作伙伴 collect accounts receivable following deterioration in the financial situation or cash position of a business partner

• Secure diverse means of capital procurement, and break up the repayment timing
• Establish commitment lines and secure a certain amount of cash on hand
• Increase the ratio of long-term debt while balancing with reductions to capital procurement costs
• Improve the financial situation
• Minimize the risk of delayed collection or inability to collect accounts receivable by regularly monitoring the credit status of each client in accordance with the credit management regulations and sharing credit information between the companies affiliated with 德赢AC米兰官方合作伙伴

Med.

Med.

• Reduced trust due to 德赢AC米兰官方合作伙伴 appropriate information disclosure
• Lost recognition opportunities and image enhancement opportunities due to 德赢AC米兰官方合作伙伴 consistent communication

• 德赢AC米兰官方合作伙伴n appropriate management system and disclose information in a timely and appropriate manner, including the centralized knowledge and management of information deemed to have a significant impact on management and the selection of disclosure methods appropriate to the scale and nature of the information
• Strengthen the delivery of a unified message 德赢AC米兰官方合作伙伴 use of multiple media
• Consider a concept, slogan and logo to unify the brands

Med.

Med.