DAIUN CO., LTD.

In this industry, there is a practice of temporarily advancing payment for shippers' ocean freight charges, customs duties, and consumption tax. If accounts receivable become uncollectible, there is a risk that the related advance payments will also become uncollectible at the same time. If bad debts occur due to economic conditions or company-specific circumstances, this could have a material impact on business results and financial condition. The Company implements thorough credit management and centralized receivables management by the accounting department, and has established a system requiring the sales department to report and take corrective action when overdue receivables arise.

Advance payments tend to increase along with the expansion of business activities, and changes in customs duty and consumption tax rates could cause a temporary surge in advance payments, which may affect cash flow. The Company prepares and updates its cash flow plan in a timely manner and maintains a certain level of surplus funds at all times, establishing a system to respond to sudden funding needs.

The Company operates an integrated logistics business centered on port transportation at the Port of Osaka, and transportation demand may decline significantly due to a deterioration in economic conditions. A decline in demand would directly reduce net sales, posing a risk to business results.

The occurrence of natural disasters, terrorism, war, or similar events could cause a significant decline in transportation demand, posing a risk of material impact on the Company's business, which is centered on port transportation. These external factors are difficult to control, and their occurrence could impede business continuity.

The outbreak and spread of disease could cause a significant decline in transportation demand, posing a risk to the business results of the Company's integrated logistics business. As past cases of infectious disease outbreaks have shown, disruptions to international logistics have a direct negative impact on the port transportation business.

The Company holds securities for purposes such as investing surplus funds in a low interest rate environment, and unexpected turmoil in financial markets could cause fluctuations in the value of these securities, potentially affecting business results and financial condition. The Company has established and operates internal controls related to the purchase and sale of securities, and strives to grasp such risks by reporting the fair value of held securities to the Board of Directors in a timely manner.