TSUTSUMI JEWELRY CO.,LTD

Precious metals such as gold and platinum, as well as gemstones, are internationally traded commodities, and fluctuations in market prices or exchange rates may affect business performance. The degree of impact varies depending on the duration and magnitude of such fluctuations. As countermeasures, the Company maintains appropriate inventory levels and works on planning and developing jewelry and accessories that respond to raw material price fluctuations.

Since precious metals and gemstones, the main raw materials for jewelry and accessories, are internationally traded commodities, fluctuations in exchange rates may affect business performance through procurement costs. The degree of impact depends on the duration and magnitude of such fluctuations. The Company addresses this in conjunction with its response to raw material price fluctuations, through maintaining appropriate inventory levels and devising product planning.

Since the Company opens stores in shopping centers under lease agreements, if the business environment of a tenant location deteriorates, non-recovery of accounts receivable, operating security deposits, and lease deposits may have a considerable temporary impact on business performance. There is a risk of asset impairment in the event of business failure at a store location. As a countermeasure, the Company proceeds with careful store expansion based on market research and other analysis.

The Company holds customers' personal information for the purpose of improving customer service, and if such information is leaked for any reason, legal and social responsibility may arise, potentially affecting business performance. The duration and degree of impact vary depending on the nature of the leakage. The Company works to maintain and strengthen its personal information management system through employee training and education as well as system development.

Excellent human resources are required for the planning and development of jewelry and accessories, procurement of raw materials, and manufacturing and sales, and insufficient recruitment or training may hinder business operations and affect business performance. The duration and degree of impact depend on the period and extent to which recruitment or training is insufficient. As a countermeasure, the Company maintains a policy of consistently investing substantially in personnel recruitment and training.

If a disaster such as a major earthquake or typhoon, or the spread of an infectious disease such as the novel coronavirus, occurs in areas including store locations or the head office location, business performance may be affected due to the suspension of normal sales activities or physical damage to stores and facilities. The duration and degree of impact depend on the duration and nature of the event. In addition to developing response manuals and taking out insurance, the Company has established a system to respond flexibly with the Representative Director and President as the person in charge.