Ad-Sol Nissin Corporation

If the economic environment or customers' earnings trends deteriorate, customers' IT investments may be frozen, postponed, or reduced, which could affect the Group's operating results and financial condition. As a countermeasure, the Group promotes balanced management to avoid excessive dependence on specific business segments or specific customers, and develops strategies for key customers in each business segment.

If cost estimation errors occur at the time of order acceptance, or problems arise in quality control or process management, additional deployment of engineers or compensation payments may be required, potentially reducing profitability. There is also a risk of reputational damage arising from late-payment penalties due to delivery delays, liability for damages due to inability to deliver, and warranty liability for defects after delivery. The Group addresses these risks through ISO9001-compliant quality assurance activities,

The Group collaborates with numerous partner companies in ICT system development, but if such collaboration does not proceed as planned, it may become difficult to provide systems utilizing cutting-edge technology or to respond to robust IT investment needs, potentially affecting operating results. The Group works to reduce this risk by maintaining and strengthening smooth alliance structures with partner companies.

Geopolitical risks, disasters, rising labor costs, and other factors may make it difficult to place stable orders with overseas offshore development operations, potentially reducing the Group's ability to respond to customer needs for development cost containment and affecting operating results. The Group aims to maintain and optimize a stable structure by continuing to diversify countries to which development is outsourced and to develop and expand development sites, centered on its wholly owned subsidiary, Adsol Asia Corporation.

If an incident involving the leakage of confidential information or personal information occurs, it could have a material impact on business activities and operating results due to liability for damages and loss of trust. The Group has obtained and operates certifications for ISO27001 (Information Security Management System) and JIS Q 15001 (Privacy Mark), and conducts security education and awareness activities for development engineers, including those at partner companies.

In the event of a large-scale disaster or power outage, system or network failure, or damage from unauthorized access or computer viruses, business activities could be affected by liability for damages and loss of trust arising from project suspension or postponement. The Group implements measures for data protection, power supply assurance, and unauthorized access prevention using external data centers, while also promoting research on security technologies.

In the fields in which the Group operates, technologies currently or in the future used by the Group may conflict with patent rights or other intellectual property rights already held by third parties, and if a lawsuit is filed, liability for damages may arise, potentially affecting operating results and financial condition. As of the end of the consolidated fiscal year under review, the Group had obtained a cumulative total of 25 patents, and it conducts timely checks of third-party intellectual property rights through patent firms and other means.

If the securing and development of capable engineers, holders of operational know-how, and managers stagnates significantly, or if the number of employees leaving the company increases, this could lead to a slowdown in order-taking activities and delays or suspension of project progress, potentially affecting business activities. The Group promotes active recruitment of new graduates and experienced personnel with consideration for diversity, has established an education and training system organized by rank and job type, and implements measures specifically focused on developing digital talent at its Human Resource Development Center.

Additional working hours and stress arising from responding to system failures and development delays in projects may lead to employee health issues and labor problems, potentially affecting business activities. The Group is committed to work-style reform initiatives, including thorough labor management linked to project management, promotion of paid leave utilization, and encouragement of telework, thereby improving the labor environment and reducing risk.

The occurrence of natural disasters such as earthquakes, typhoons, and torrential rains, or a pandemic caused by an infectious disease, could have a significant impact not only on project delivery delays but also on the continuity of business activities itself. The Group has established a recovery response policy through its Business Continuity Plan (BCP), and aims to mitigate the impact on system development by promoting telework and distributed development using its original remote development tools.