Business Risks
Identification and Assessment of Primary Risks
Among the matters related to the business and financial conditions reported in our Annual Securities Report, the following are the primary risks that management recognizes as having the potential to significantly impact the financial position, operating results, and cash flows of the consolidated companies. These risks have been identified and evaluated through our risk management process, and their residual risk impact and frequency are outlined below. For more detailed information regarding the business risks of the TOTO Group, please refer to the PDF.
Impact and Frequency of Each Risk
| Business Risk | Degree of Impact | Frequency |
| Large-scale disasters | High | High |
| Product defects | High | Medium |
| Difficulty in procuring raw materials due to geopolitical risks,etc. | Medium | High |
| Occupational safety and health | High | Medium |
| Spread of infectious diseases | High | Medium |
| Litigation risks | Medium | High |
| Leakage of confidential and personal information | Medium | Medium |
| Occurrence of information system failures | Medium | Medium |
Geopolitical disputes and security deterioration risks | High | Medium |
| Intensified competition for talent acquisition | Medium | Medium |
| Environmental regulations | Low | High |
| Compliance violations including those in supply chains | Low | High |
| Reputational damage | Low | High |
| Infringement of intellectual property rights | Low | High |
| Climate change (carbon pricing, etc.) | Medium | Medium |
| Changes in market environment | The degree of impact and frequency vary greatly depending on which event is assumed. | |
| Rapid decline in product prices due to intensified competition with competitors | Due to the wide range of products developed, manufactured, sold and serviced by the Group, the degree of impact and frequency vary greatly depending on which event is assumed. | |
| Rapid technological innovation | The degree of impact and frequency vary greatly depending on which event is assumed. | |
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