DAIKO TSUSAN CO.,LTD.

In the information and communications related market, where expansion in demand for ICT equipment and other products is expected, if growth slows due to unforeseen factors or there is a delay in responding to customer needs, this could affect the Company's business results and financial position. The Company addresses this by strengthening its information-gathering capability through suppliers, promptly grasping demand, and improving its ability to make proposals to customers.

While the CATV industry is seeing progress in the convergence of broadcasting and communications, network expansion, and increased investment to support 4K and 8K broadcasting, if the Company is unable to supply products in line with fluctuations in CATV operators' capital investment plans, this could affect its business results and financial position. The Company is working to enrich its product lineup and to build a system that can flexibly respond to changes in the investment environment.

If purchase prices rise due to soaring Materials prices, or if price competition intensifies due to a sharp decline in construction investment or information and communications related capital investment, this could affect the Company's business results and financial position. The Company strives to strengthen its price competitiveness through continuous control of purchase prices by the purchasing department, passing costs on to selling prices, and product planning, among other measures.

If an unexpectedly large number of bankruptcies occur among customers due to an economic downturn or other factors, the Company may need to record allowances, which could affect its business results and financial position. The Company thoroughly manages receivables through regular surveys and analyses of customers and by accepting business guarantee deposits.

In import transactions with overseas companies, the Company is exposed to country risk, including changes in the political and economic conditions of the countries and regions involved, social unrest, and unexpected changes in laws and regulations. If it becomes difficult to continue import transactions as a result, this could affect the Company's business results and financial position. The Company seeks to hedge this risk through information sharing with local manufacturers.

If unexpected defects occur in imported products handled by the Company, requiring compensation or other measures, costs may be incurred within the Company's scope of responsibility, which could affect its business results and financial position. The Company strives to maintain quality and reliability through close cooperation with overseas manufacturers.

For some products purchased in U.S. dollars from overseas manufacturers for differentiation purposes, if foreign exchange rate fluctuations are so significant that they cannot be passed on to selling prices, this could affect the Company's business results and financial position. In principle, the Company's policy is to pass on changes in purchase prices due to exchange rate movements to selling prices; however, there is a risk that it may be difficult to respond in the event of a sudden rate change.

If the fair value of land and buildings held as sales offices or distribution centers declines significantly relative to book value, the Company may need to record impairment losses or other charges, which could affect its business results and financial position. The Company holds a substantial amount of real estate assets, and a deterioration in the real estate market could directly affect its financial figures.

If unforeseen large-scale earthquakes, tsunamis, typhoons, floods, or other natural disasters, or unexpected accidents, cause severe damage to sales offices or distribution centers, this could hinder business operations and affect the Company's business results and financial position. The Company takes disaster-prevention measures by installing information systems at data centers, building a backup management system, and storing inventory across multiple warehouses to disperse risk.

If the Company is unable to secure the excellent personnel essential for continuous growth as planned, due to a significant deterioration in the hiring environment or other factors, this could affect its business results and financial position. The Company is working to promote the securing and development of human resources through active recruiting activities and enhanced on-the-job training (OJT).