TOSHIN HOLDINGS CO.,LTD

Commission income from the Mobile Communications Business is concentrated on two carriers, SoftBank Corp. and KDDI Corporation, and there is a risk that expected earnings may not be secured if these carriers change their management policies. The operating environment is becoming increasingly severe due to the maturation and intensifying competition in the mobile communications equipment market, and the high degree of dependence on specific business partners is a factor causing performance fluctuations. There is no specific description of countermeasures in the securities report.

Contract intermediary commissions received from telecommunications carriers are determined based on the terms of contracts with each carrier, including the amount, the period subject to payment, the services subject to payment, and the ratio to call charges. If significant changes in transaction terms occur in the future due to changes in the carriers' business policies, this could have a material impact on the Group's business performance. There is no specific description of countermeasures in the securities report.

The agency agreements with SoftBank Corp. and KDDI Corporation are automatically renewed annually, and early termination is permitted for reasons such as significantly poor performance of contracted operations over a certain period. If contract termination materializes, the foundation of the Mobile Communications Business would be lost, causing severe impact on the performance of the entire Group. There is no specific description of countermeasures for maintaining the contracts in the securities report.

The opening of SoftBank Shop, au Shop, Y!mobile Shop, and UQ mobile Shop stores is determined based on the strategies of SoftBank Corp. and KDDI Corporation, and the location, scale, and operating format are determined through consultation with these two companies. Depending on changes in each carrier's strategy or policy, the Group's planned store expansion may be constrained, potentially affecting business performance. There is no description in the securities report regarding store opening plans led independently by the company.

With the introduction of the Mobile Number Portability (MNP) system in October 2006, switching between telecommunications carriers has become easier. If the number of customers switching away from SoftBank and KDDI, the two carriers handled by the Group, to other carriers increases, this could affect business performance through a decrease in the number of contract intermediary transactions. Because of the high degree of concentration on these two main carriers, there is limited scope to offset the impact of increased customer attrition by handling other carriers. There is no specific description of countermeasures in the securities report.

Personal information is handled in the business activities of the Mobile Communications Business, Real Estate Business, and Resort Business. If an unforeseen incident results in the leakage of personal information, this could have a material impact on business performance due to loss of trust and claims for damages, among other consequences. As personal information management spanning multiple businesses is required, establishing an information security framework is an important issue. There is no specific description of the management framework or countermeasures in the securities report.

In the Mobile Communications Business, in addition to compliance with laws and regulations such as the Telecommunications Business Act, there are numerous matters to be observed, including voluntary regulatory guidelines related to the Ministry of Internal Affairs and Communications. Violations of these could have a significant impact on the financial position, business results, and cash flow status due to loss of trust and claims for damages, among other consequences. There is no specific description of countermeasures related to the compliance framework in the securities report.

In the Real Estate Business, there is a risk that expected earnings may not be secured due to unforeseen changes in economic conditions or a sharp rise in interest rates. In addition, concentration in the timing of property handovers may cause imbalances in quarterly revenue volume. Major changes in laws and regulations such as the Financial Instruments and Exchange Act, the Building Standards Act, and the City Planning Act could also affect business performance.

In the Real Estate Business, if major changes occur in laws such as the Financial Instruments and Exchange Act, the Building Standards Act, and the City Planning Act, this could have a material impact on business operations and revenue plans. Changes in the legal system may force increased compliance costs or a review of the business model on the part of operators, raising concerns about the impact on business performance. There is no specific description of countermeasures in the securities report.

In the Resort Business, there is a risk that expected earnings may not be secured due to unforeseen changes in economic conditions, a sharp rise in interest rates, or changes in weather. The Resort Business is highly sensitive to economic trends and weather conditions, with changes in the external environment directly affecting customer traffic and sales. There is no specific description of risk-hedging measures in the securities report.