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Major Risk Factors

The Yamato Group believes that the following matters related to the implementation of the Group's business operations may have a significant impact on the decisions of investors. It should be noted that forward-looking statements in this document are based on information available as of March 31, 2009.

(1) Legal Regulation

The Group's business activities could be restricted by law or ordinance, resulting in a decline in sales and an increase in costs to achieve legal compliance.

(2) High Dependency on TA-Q-BIN Business for Operating Revenues

  • 1. 
    The rate of growth in the home delivery market could slow due to domestic economic trends, the natural environment, including inclement weather conditions, changing customs with regard to sending midsummer, year-end and other gifts, or other factors.
  • 2. 
    Unit prices could decline beyond the range expected and the Group's customers could switch to its competitors as a result of fierce price competition among companies in the industry.

(3) Securing Human Resources

The Yamato Group could be unable to continuously hire competent staff, allocate staff to appropriate positions, and keep employees in the Group by developing a good work environment and improving training and education systems.

(4) Leakage of Business Know-how Resulting From Personnel Leaving the Group

Various kinds of know-how, such as ways to develop new products and methods of building networks, could be leaked outside the Group when personnel leave their employment and it may not be possible to effectively prevent a third party from providing similar services.

(5) Loss of Trust in the Yamato Group

An incident such as damage to or loss of packages entrusted to TA-Q-BIN, or a similar major flaw in services or products could lead to a loss of society's trust in the Group.

(6) Leak of Customer Information

Leakage of information outside the Group due to negligent controls over customer information or similar could lead to a loss of society's trust in the Group or a claim for payment of damages.

(7) Administrative Sanction and loss of Social Trust as a Result of a Major Traffic Accident

  • 1. 
    A major traffic accident could occur, leading to a decline in the degree of social trust accorded to the Group.
  • 2. 
    The Group could be placed under government sanction and ordered to halt use of vehicles, and offices could be required to halt business or their business permissions could be revoked, causing discontinuities or cessation of business.

(8) Official Regulation due to Environmental Issues

Unexpectedly strict environmental regulations could be enacted.

(9) Natural Disaster, Power Outages, Etc

Roads and other infrastructure could be damaged as a result of a natural disaster, or cargos could become stalled if electric power supply is cut off due to a natural disaster or power outage.

(10) Computer Viruses and Criminal Hacking Activity

The Yamato Group could be subject to an unanticipated regional disaster, computer virus infection, or attack by hackers.

(11) International Factors

  • 1. 
    The geographical regions where the Yamato Group or its main business partners are active could be subject to acts of terrorism, war or other international conflicts, or spread of disease such as new strains of influenza.
  • 2. 
    The stable supply of diesel or other fuel could be restricted due to international events, or fuel prices could remain persistently high.

(12) Credit Exposure Management and Interest Rate Fluctuations

  • 1. 
    Personal bankruptcies could remain at a high rate due to economic trends and other factors, making increases in the cost of credit exposure management likely.
  • 2. 
    It could become difficult to absorb the rising cost of funding procurement due to greater-than-anticipated, sharp increases in long- and short-term interest rates.

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