Introduction

Risk Management
Risk management system and operation

RiskMonitoring
Subcommittee

BCP
Subcommittee

HumanRights
Subcommittee

Risk event

1Damage to IDEC’s sites
in Kansai region in Japanby an earthquake with aseismic intensity of lower
6 or higher

Information security e-Learning attendance
in FY2024 (Japan)
Number of trainees (%)

First session

1,259 (94.0%)

Second session

1,286 (93.8%)

Third session

1,238 (91.2%)

Fourth session

1,155 (85.4%)

619

Occurrence of a serious
product accident that could
affect the human bodyLeakage of critical corporateinformation, third-party
confidential information, andpersonal information

Actions ormulated business continuity plan andF
improved manufacturing site’s emergency
response capabilities
 educed risk by taking out an appropriateR
insurance policy
 eveloped an emergency contact networkDand a means of checking employee safetyInstituted system for monitoring complaints/
failure reports from the market to enable
early detection of and response to majorcomplaint-generating issues
 valuated risks in new product development
Eand implemented measures to prevent
issues during production
 echnical measures for information securityTIncreased our knowledge of how to prevent
information leaks* Item numbers correspond to risk event numbers on the following page.
* See the following page for explanations of the risk map and high-risk events.

Data andCompany Overview

53 IDEC Report 2024

 ecognize the importance of daily readiness andR
training, and establish a strategy and organizational
structure that takes crisis response into accountNo

Foundation for
Value Creation

Details of these initiatives are reported to the Sustainability
Committee, which meets twice a year, and the committeethen reports to the Board of Directors. The Risk ManagementCommittee reports directly to the Board of Directors on
important events such as whistleblowing reports, ensuringthat risk information is reported appropriately to management.

 stablish mechanisms and organizational structureEthat will enable us to maintain quality to meetcustomer needs with safe and ANSHIN products
and services, and avoid delaying the supply ofproducts, even in the event of an emergency

Major responses to high-risk events in FY2024

Business Strategy

Risk Management Committee

The Risk Monitoring Committee regularly identifies andevaluates risks based on the assumed risk events that may
negatively impact the IDEC Group’s continued businessexpansion and corporate value enhancement. Concerning
each risk event, an evaluation questionnaire is conductedusing the “probability of occurrence,” “magnitude of damage”
and “impact” as measures, and the results are plotted on
the risk map relative to the assessment.
The risk events evaluated include climate change risks
that the Environmental Strategy Committee has judged
to be significant issues. Also, risk events that have a highprobability of occurrence are considered high-risk events.
Each department responsible for a particular high-risk event
is assigned a risk reduction target, and gauges its progress
toward the target on a semiannual basis.

Initiatives for
Realization of Vision

 lace top priority on the safety of employees andP
their families

We recognize the important information assets handled in thecourse of our business activities, and strengthen the IDECGroup’s management system for information security bysystematizing basic policies, management regulations, andprocedures for the appropriate handling of information assets.
We regard risks to information security as one of the mostimportant types of risks, and are working on measures toreduce them. In addition to technical measures, we are also
implementing management measures such as employee
education, and promoting employee awareness throughe-Learning courses for all employees and information
disclosure on the intranet.
We are working to build an organizational structure inwhich, in the event of an incident, employees promptly report
the incident, take appropriate initial measures to minimize thespread of damage, and report to management and the RiskManagement Committee. Going forward, we will continue toorganize a system of relevant departments throughout theGroup, in addition to the IT department, to take appropriate
measures that take into account the impact on stakeholders,
including customers and suppliers, as well as those within
the Group.

Risk map and identification ofhigh-risk events

Value Creation Story

Our basic policy on crisis response

Risk Management SystemHotline
Contact

To prepare for natural disasters such as earthquakes, which
are one of the IDEC Group’s high risk events, we haveestablished a subcommittee within the Risk Management
Committee to formulate business continuity plans (BCP). The
subcommittee works in cooperation with relevant parties in
the manufacturing division and target sites to formulate basic
policies, initial response flowcharts, and business continuity
plans for in the event of a disaster.
In addition, we map out the initial actions to be taken byeach emergency task force member in a disaster, and create
manuals and checklists for guiding those actions. We also
routinely review our disaster countermeasures, and use theintranet to communicate information for raising the disasterprevention awareness of all employees.

Information security initiatives

Message

We have established Crisis Management Regulations withthe aim of avoiding the occurrence of risks in the IDEC Groupand minimizing damage in the event of actual occurrences.
We established the Risk Management Committee
as a specialized committee under the Sustainability
Committee, chaired by the CEO, to continuously oversee
the Group’s risk management during normal times andrespond to risks that occur. We have also established theRisk Monitoring Subcommittee, BCP Subcommittee, andHuman Rights Subcommittee (all subcommittees under the
Risk Management Committee) to identify and assess risks
throughout the IDEC Group, monitor efforts to reduce risks,
formulate business continuity plans, and work to addresshuman rights issues.
A Hotline Contact has also been established within theCommittee to develop whistleblowing channels and respondto whistleblower reports.

Business continuity planningRisk category

Risk Map in FY2024
External factor risks612b1431720

814bImpact

19242216

Business strategyrisks

12b93 13151015412181121

1Damage to our Kansai region sites in Japan by an earthquake with a seismic intensity oflower 6 or higher.

Given the risk of a Nankai Trough earthquake, the probability of occurrence has increased since
FY2023, and continues to be assessed as a high-risk event.
Assessed as a high-risk event, as in FY2023.

2

Conflict or terrorist attack in the local area of IDEC sites.

2b

Impact on our overseas staff and site operations due to interstate affairs or public disorder. The probability of occurrence has increased slightly, and is assessed as a high-risk event, as FY2023.

3

Occurrence of cluster infections at our sites.

Impact was assessed as lower due to changes such as implementation of infection prevention
measures and change of awareness on viral infection.

4Product specification change caused by external factors. (part obsolescence,procurement difficulty)

Both degree of impact and probability of occurrence remain high as a result of specification changes,
due to difficulties in procuring electronic components. The risk level is assessed as high.

5

Difficulties in procuring parts that could lead to long delivery delays.

Both degree of impact and probability of occurrence remain high as a result of specification changes,
due to difficulties in procuring electronic components. The risk level is assessed as high.

—6Occurrence of a serious product accident that could affect the human body.

Assessed as a high-risk event with considerable impact, as in FY2023.

—

7Fraudulent representation of quality through falsification of product performances and data.

It is assessed that the degree of impact will increase in global business.

8Distribution of products containing prohibited substances.

Assessed as being at a level similar to FY2023.

—

9Strategic investment risk. (financial impact of M&A, corporate alliances, and otherstrategic investments)

Assessed as being at a level similar to FY2023.

—

10Occurrence of a severe or more industrial accident.

The probability of occurrence has increased in comparison with FY2023 due to the impact of theworkplace environment.

11

Sabotage, strike-related business outage.

The probability of occurrence is assessed as being lower than FY2023.

12More than half a day of infrastructure outages caused by system and network failure, etc.

We reaffirmed the impact of network downtime, and evaluated the degree of impact as being higher
than FY2023.

12b Long-term network outage due to cyberattack.

Probability of occurrence

Internalfactor
risks

—

13

Assessed as being at a level similar to FY2023.

—

14

Inaction on human rights issues. (child/forced labor, etc.)

Assessed as having a significant impact due to growing awareness of human rights issues inglobal business.

—

The frequency of occurrence is assessed as going to increase from FY2023 due to the impact of theworkplace environment.

15Tax penalty due to improper handling of accounting and tax affairs.

Assessed as being at a level similar to FY2023.

—

16

Large-amount embezzlement, malpractice, and bribery by employees.

Assessed as being at a level similar to FY2023.

—

17

Insider trading by senior executives.

The probability of occurrence is assessed to increase slightly due to the business performance.

18

Occurrence of events in breach of antitrust and subcontracting act.

The frequency of occurrence is assessed as going to increase from FY2023 due to the impact of theworkplace environment.

19

Leakage of critical corporate information, third-party confidential information, andpersonal information.

Assessed as greater than FY2023 due to recognition of the scope of impact.

20

Business suspension due to improper license and approval.

The degree of impact, including certification, is assessed as going to increase.

21

Difficulty to collect sales receivables, loan loss.

Assessed as being at a level similar to FY2023.

—

22

Impairment of assets.

Assessed as being at a level similar to FY2023.

—

1

Increase in raw material costs.

Assessed as high-risk due to the direct impact on manufacturing and procurement costs, and thepossibility of being unable to procure parts due to induced cost increases.

—

2

Increasing environmental awareness of customers and investors.

The short to medium-term risk is low, but the probability of occurrence is higher than FY2023.

3

Delay relative to competitors in the transition of existing and new products to low-emission/ low-carbon technologies.

Lags in eco-friendly technology were assessed as leading to future business risks.

4Trends in carbon pricing.

It is assessed that the impact of regulations and legal systems will increase due to the growing global
movement toward reduction of CO2 emissions.

5Natural disasters.

While temperature fluctuations could lead to various risks such as natural disasters, this was assessed
as having a lower probability in the short to medium-term.

Transition risks

Physical risk

54 IDEC Report 2024

The impact of long-term network outages is assessed as significant.

—Data andCompany Overview

Climatechangerisks—

Foundation for
Value Creation

Accounting andfinancial risks—

Business Strategy

Compliance risks—Suspension of sales and claims for damages due to infringement of other companies’
intellectual property rights.

14b Decline in employee morale due to harassment.

* C limate change risks reflect events that the Environmental Strategy Committee
assessed as high-risk. P.58
* Risks are evaluated on a short to medium-term basis. Long-term climate risks havebeen re-evaluated on a short to medium-term basis.
*R isks inside the red box are judged to be high-risk events.

Year on year
comparison

Initiatives for
Realization of Vision

Resources andinfrastructure
risks

5

FY2024 risk assessments

Value Creation Story

7

Risk event

Message

2

NoIntroduction

Risk Management