Among the matters concerning the situation of the business described in the financial statements and situation of accounting, the matters with the possibility to cause the important effect for the investor's judgment are as follows.

(1) Risks Related to Dependence on Specific Business Partners
To improve the efficiency of its sales activities, the Advanex Group has undertaken a policy to raise its sales weighting to strategic customers. As a result, the earnings of major customers, their outsourcing strategies, and other factors beyond the Advanex Group's control could have a negative impact on the Group's earnings and financial condition.

(2) Risks Related to Dependence on Specific Markets
The Advanex Group provides market of cellular phone and personal digital assistant with various kinds of parts such as hinge unit, built-in antenna, camera lens holder, memory card connector and etc. The dependency on those markets is getting higher and higher. However, diffusion rate of the cellular phone is high in Japan and the expansion of new demand for it tends to become duller. Our group expects expansion of demand for newly buy for products having high performance and multifunction and attempt to strengthen sales in overseas markets. However, unanticipated change of market situation may cause adverse effect to our group achievement and financial position.

(3) Risks Related to International Activities and Overseas Expansion
The Advanex Group holds production and sales activity in the United States, Europe, and Asia. Unanticipated@changes in law or restriction, terrorism, battle action, or occurrence of epidemic in those countries might cause adverse effect to our group achievement and financial position.

(4) Risks Related to Fluctuation in Foreign Exchange Rates
In line with the Advanex Group's international activities and overseas expansion, the Group is exposed to the following currency risks, and a substantial fluctuation in foreign exchange rates could have a negative impact on the Group's earnings and financial condition.

1. Increase and decrease in local currency conversion for net sales and purchase at foreign currency in exporting and importing.
2. Loss and gain of credit and debt at foreign currency under the market value.
3. Increase and decrease of yen currency conversion amount of foreign currency at consolidated financial statements.

(5) Risk of Natural Disasters
The main production site of the Advanex Group is Kashiwazaki City in Niigata Prefecture, Nakatsu City in Oita Prefecture, and Minamitsugaru-gun in Aomori Prefecture in Japan. There is a possibility that the production capacity of precision spring and precision assembly parts of our group decreases remarkably and the distribution may cause a delay when large-scale disasters occur in these regions.

(6) Risks Related to Fluctuations in Raw Material Prices
There is a possibility of leading to an increase in the cost of manufacturing of the Advanex Group and the deterioration of the profit when the price of metal material such as stainless and copper has increased and it is difficult to reflect material cost increase to the sales price under the environment of fierce price competition with the competitors.

(7) Risks Related to Post-Employment Benefit Obligations
Post-employment benefit obligations for employees and provisions for post-employment benefit obligations are calculated based on basic rates and prerequisite condition in actuarial calculations, which include discount rates and the expected return on pension assets. These calculations also reflect past performance in the management of pension assets. Deterioration in discount rates or performance in pension assets management could have a negative impact on the Group's earnings and financial condition.

(8) Risks of key events
We had ¥ 824 million of operating loss, ¥ 815 million of ordinary loss and ¥ 2,383 million of net loss in the fiscal year ending March 31, 2008. In addition we had ¥ 157 million of operating loss, ¥ 1,484 million of ordinary loss and ¥ 3,595 million of net loss in the fiscal year ending March 31, 2009. As a result , there are key events which threaten our going concern assumption although it is not obliged for the annotation.