SANSO ELECTRIC CO.,LTD.

There exist specific customers accounting for more than 10% of total sales, and if transactions with such customers were to decline, there is a concern that the overall performance of the Group could deteriorate due to a decrease in sales. As a countermeasure, the Group strives to improve customer satisfaction among major customers while promoting the expansion of its customer base through the development of new customers and new markets.

The Group conducts production and sales activities in China, and if these activities are disrupted by economic, social, or political factors, it could affect performance. As a risk mitigation measure, the Group is promoting the globalization of raw material procurement.

The Group manufactures products whose main materials are steel and non-ferrous metals, and market conditions for these materials have recently fluctuated significantly. If it is not possible to pass on fluctuations in procured material prices to appropriate sales prices, this could adversely affect performance; the Group seeks to mitigate this risk by closely monitoring market prices and arranging procurement in advance.

Geopolitical risks are significantly increasing the cost of procured materials, and there is a possibility that procurement of the materials themselves could become difficult. To ensure business continuity, the Group is working to develop new procurement routes.

In its overseas business, transactions occur in currencies other than the local currency, and fluctuations in exchange rates at the time of yen conversion may affect performance. The Group strives to mitigate the impact of exchange rate fluctuation risk by basing transactions primarily on local currencies.