Regarding a number of items described in the status of business and accounting etc. in our Annual Securities Report, following items may significantly influence to investors’ decisions on the risks of the Yushin Group business and others. The Group determined these items on the filing date of the Annual Securities Report.
Economic Conditions on the Industrial Field
Because of the primary business of the Yushin group is to set up production equipments for customers in the industry of plastic injection molding, the Group is affected by domestic and overseas economic conditions, and trends of customer’s facility investments. Therefore, changes of economic conditions are possibly having an impact on the Group’s operating results and financial conditions.
Exchange Rate Fluctuation
The Yushin Group sells its products to customers around the world through its subsidiaries, so that exchange rate fluctuations affect our consolidated financial results by exchange conversion of the subsidiaries’ financials. Although the parent company works to decrease the impact of exchange rate fluctuation by adopting yen-denominated trades as a general rule, the sales through the subsidiaries also are affected by exchange rate fluctuations in the side of the subsidiaries.
The Group may take measures, such as entering forward exchange contracts to alleviate risks as necessary, however it is difficult to taking out of all risks. Therefore, exchange rate fluctuations could have an impact on the Yushin’s operating results and financial condition.
Product Quality Matter
In order to provide high-quality products to the market, the Group has constructed a framework for a high quality-control which can complies to an international quality criterion and the Group is making further improvements for maintaining the framework on a daily basis.
However, there is no case that all products are free from defects and remedial expenses due to faulty products at any manufacturing companies and it would be difficult to take out all risks that faulty products may slip through the filter of the framework. The Group has a contractor’s liability insurance and a product-liability insurance to secure these expenses, but there is no guarantee that these insurances will be able to compensate for all the damages. Therefore, if quality-related serious situations were to occur, the Yushin group’s results of operations and financial conditions could be negatively affected.
The Group has implemented the safety measures of daily equipment inspections, a safety training, a disaster drill and others in the case of an accident such as a fire and workers’ injury, a natural disaster such as an earthquake and a windstorm and flood, and etc. The Group also has purchased insurances required to minimize the impact of damages. However, these disasters such as the above could have a negative impact on the Group’s operation.