NASU DENKI-TEKKO CO.,LTD.

In the electric power distribution field, there are concerns over surging energy prices due to geopolitical risks and responses to the restart of nuclear power plants; in the telecommunications field, demand is expected to decline as capital investment in communication towers, base stations, and similar facilities matures; and in the transportation and other infrastructure field, there is concern that the timing of orders may become unclear due to suspensions or delays of national infrastructure projects. A downturn or decline in demand in each market could adversely affect the Group's business performance and financial condition. No specific countermeasures are described.

If the timely procurement of raw materials, auxiliary materials, or outsourced processed goods necessary for production is impeded, or if prices rise beyond the levels planned for cost management purposes, manufacturing costs may increase and profitability may deteriorate. The risk is structurally more likely to materialize during supply chain disruptions or periods of rising resource prices. There is no description of specific countermeasures such as diversifying procurement sources or passing on price increases.

If defects or accidents occur in products or construction work, or if large-scale natural disasters, pandemics such as COVID-19, or environmental pollution from sudden accidents occur, operations may be suspended. This could have a significant impact on the Group's creditworthiness and business performance. There is no description of specific preventive or response measures.

Although the company has established relevant regulations such as trade secret management rules and personal information handling rules, and has implemented thorough employee awareness and strict management, if an information leak occurs due to unforeseen circumstances, it could affect the Group's creditworthiness and business performance. Disruption or destruction of information systems due to cyberattacks or internal misconduct is also recognized as a possible risk. There is no detailed description of technical measures beyond the establishment of regulations.

The Group holds real estate and investment securities, and if their prices decline significantly, impairment losses or valuation losses may occur, affecting business performance and financial condition. The structure is such that declines in the stock market or deterioration in the real estate market directly affect the financial statements. There is no description of specific risk hedging measures.

In response to customer needs, the Group is promoting the development of new technologies and new products, as well as expanding orders in the maintenance business aimed at extending the life of equipment and in the recycling business; however, expected results may not be achieved due to industry demand trends and competitive conditions with other companies in the same industry. There is a risk that investments in new businesses may not be recovered, which could affect business performance. There is no description of specific competitive measures or investment recovery plans.

Certain financial covenants are attached to syndicated loan agreements with multiple financial institutions, and if these covenants are breached, the Group may be obligated to repay borrowings ahead of schedule. The occurrence of an early repayment obligation could have a significant impact on the Group's financial condition. There is no description of the specific content of the financial covenants or the current gap relative to financial indicators.