JTP CO.,LTD.

Competition in the IT industry is intensifying due to entry by overseas companies and companies from other industries. If client companies' IT investment needs change rapidly, or if price competition proceeds at a level significantly exceeding the current situation, this could affect the Company's business results and financial condition. In addition, since the timing and scale of client companies' IT investment execution are directly or indirectly affected by the economic environment, the Company faces a risk that economic fluctuations directly impact its business performance. The Company seeks to diversify this risk by providing services to client companies across various industries and business types.

In the course of business operations, the Company handles personal information and confidential information. If an information security incident occurs due to cyberattacks or other causes, this could affect business results and financial condition through a decline in social credibility and brand image, payment of damages, and legal penalties. As countermeasures, the Company positions information management as a top management priority, has established a dedicated internal organization, and is continuously implementing measures such as obtaining various certifications, promoting information security education, and taking security measures on the business infrastructure.

The Company's business activities are subject to various laws and regulations both in Japan and overseas. If a serious compliance violation or an incident involving a breach of laws and regulations occurs, this could lead to a decline in social credibility and adversely affect business performance. As countermeasures, the Company has established a code of conduct and a compliance program, and works to ensure legal compliance through education and awareness-raising activities for officers and employees.

Some of the systems and services provided by the Company are deeply connected to social infrastructure. If a failure occurs during operation, this could affect business results and financial condition through a decline in social credibility and brand image, payment of damages, and other factors. Because the Company provides services related to social infrastructure, the scope of impact in the event of a failure is broad, and maintaining reliability is a prerequisite for business continuity.

The IT industry is a seller's market, and if the Company is unable to secure personnel with the necessary qualities, this could affect its business results and financial condition. The Company has adopted a hiring policy that is not bound by educational background, nationality, or gender, and prides itself on having built a system capable of stably recruiting excellent personnel. However, the risk that the recruiting environment will become even more challenging due to intensifying competition continues to exist.

In the IT industry, where technological innovation proceeds rapidly, technology acquisition costs are incurred upfront when launching new services, which may result in a period of loss-making operations, leading to a decline in the ordinary income margin and affecting business results and financial condition. The Company positions technology acquisition costs as a natural investment and maintains a policy of managing its business while balancing profitability, but it also recognizes the risk that business expansion may not proceed as expected.

A tendency among client companies to curb IT investment due to worsening economic sentiment or corporate earnings could lead to stricter demands regarding costs and stricter evaluation of IT investment effectiveness, which could create downward pressure on the sales prices of the systems and services handled by the Company, thereby affecting business results and financial condition. Since intensifying price competition is a direct factor in deteriorating profitability, this risk is highly sensitive to economic trends.

If a large-scale natural disaster such as an earthquake, or damage from terrorism, causes significant damage to the Company's facilities and infrastructure or human casualties, this could affect its business results and financial condition. As a labor-intensive IT services company, the Company has a high degree of dependence on human resources, and it faces a risk in which human casualties are directly linked to business continuity.

Political turmoil and geopolitical risks arising from war, terrorism, conflict, and other causes could affect the Company's business and business results. In particular, in the Life Science Services business, there is a concrete risk that delays in the arrival of parts required for repairs and inspections could prevent services for medical equipment and chemical analysis devices from being carried out as scheduled. Risks such as labor issues and illness arising from differences in culture and customs could also pose challenges in business operations.