DAIKI ALUMINIUM INDUSTRY CO.,LTD.

The Group's sales are concentrated in a limited number of business categories, primarily the automotive industry, resulting in high dependence on specific customers. Changes in business conditions in the automotive industry or in the business performance and internal circumstances of individual customers could directly affect the Group's business results and financial condition. Specific measures regarding diversification of customers are not explicitly stated in the Annual Securities Report.

The Group's customers range widely from large corporations to small and medium-sized enterprises. With respect to collection of receivables, a system has been established to check amounts, terms, and methods from both the sales and administrative departments. However, it is difficult to constantly and perfectly grasp the financial and funding conditions of all customers, and there remains a risk that the Company may not be aware of a customer falling into serious financial difficulty. If uncollectible amounts arise, this could adversely affect the Group's business results and financial condition.

The Group has established local subsidiaries in Thailand, Malaysia, Indonesia, India, and other countries, and conducts manufacturing and sales of Secondary Aluminium Alloy Ingot. Changes in the political, economic, and social business environment in each country, or the occurrence of unforeseen events, could affect the Group's overall business results and financial condition. Specific risk mitigation measures are not explicitly stated in the Annual Securities Report.

Raw material prices and selling prices in the aluminium business are directly affected by fluctuations in market conditions such as international prices on the LME (London Metal Exchange). Some raw materials procured may face procurement constraints due to shrinking supply sources or lack of market liquidity resulting from environmental changes, and sudden and significant fluctuations in market conditions could have a material impact on the Group's financial condition and business results. There is no specific description in the Annual Securities Report of measures such as diversification of raw material procurement.

The Group has business bases both in Japan and overseas, and the occurrence of large-scale earthquakes, natural disasters, fires, or other accidents, as well as infectious diseases such as novel viruses, could have a significant impact and cause damage to overall corporate activities, including production activities, and to human resources. This risk spans multiple domestic and overseas locations and could adversely affect business results and financial condition. Specific countermeasures such as a BCP (Business Continuity Plan) are not explicitly stated in the Annual Securities Report.

The Administration Department, as the department in charge, appropriately manages confidential corporate information; however, human error, equipment failure, defects in services provided by telecommunications carriers, as well as external cyberattacks, unauthorized access, and computer virus infections, could cause malfunctions in information and communication systems or information leaks. If failures such as errors or delays in transaction processing occur, this could affect business results and financial condition.

The Group's policy is to recognize an impairment loss on fixed assets showing signs of impairment when undiscounted future cash flows fall below book value. If the assumptions underlying such estimates change due to changes in business plans or market conditions, additional impairment losses may need to be recognized, which could affect the Group's financial condition and business results.