Fujii Sangyo Corporation

Panasonic Corporation accounts for approximately 10% of the Company's total merchandise procurement. If issues arise in renewing the sales agency agreement with Panasonic, switching to other manufacturers may not proceed smoothly. On the sales side, no single customer accounts for more than 5% of net sales, and concentration risk on the sales side is therefore assessed as low; however, the degree of dependence on the procurement side could affect operating results.

There is a risk that trade receivables may deteriorate due to the bankruptcy of business partners or worsening of their financial condition. As countermeasures, the Company records allowances for doubtful receivables of concern individually based on assessed collectability, and for general receivables, records allowances based on historical write-off rates, while also strengthening credit management through its credit control department and utilizing receivables guarantee companies. Nevertheless, if unexpected bankruptcies occur frequently, this could affect operating results, etc.

In all business fields centered on electrical equipment materials, the competitive pricing environment is severe, and if private-sector capital investment or housing starts decline sharply, competition is expected to intensify further. Although the Group is working to strengthen its competitiveness, if price competition continues or intensifies, this could reduce profitability and affect operating results, etc.

The renewable energy power generation business is planned based on the solar power purchase price and purchase period stipulated under the special measures law enacted in 2012. Article 3, Paragraph 11 of the law provides that the procurement price, etc., may be revised in the event of significant changes in prices and other factors. If the purchase terms are changed, this would directly affect the business's earnings and could affect operating results, etc.

If business locations or business partners suffer significant damage due to natural disasters, the spread of infectious diseases, or other unforeseen events, or if disruptions occur in the logistics network, the stable supply of products and services may become difficult. Such events could affect the Group's operating results, etc., and the impact would be particularly significant in the event of widespread and compounded damage.