Aucnet Inc

The Group has overseas subsidiaries and overseas members and conducts transactions in multiple countries and regions, and therefore exchange rate fluctuations may affect bidding demand and transactions from overseas, and foreign exchange gains/losses may arise, potentially affecting the financial position and business results. As a countermeasure, the Group shortens the receivable collection period and the period for conversion into yen in order to minimize the risk of fluctuations between the exchange rate at the time of bidding and the exchange rate at the time of settlement.

Since services are provided via internet systems, system failures caused by overload, equipment malfunction, human error, cyberattacks, natural disasters, etc. may occur, potentially resulting in loss of revenue opportunities due to service disruption and a decline in customer trust. The Group seeks to reduce the risk of failures through management and knowledge-sharing of each incident, redundancy for services with high SLAs, and enhanced monitoring.

If customer information is leaked, lost, tampered with, or misused due to unauthorized external access, human error in system operations, or intentional acts by employees, this may result in loss of trust and losses from damage claims, potentially restricting business activities. The Group has obtained ISMS (ISO/IEC 27001) certification and implements measures such as training for all employees, website vulnerability diagnostics, and building an in-house development structure.

For the Group, whose main businesses are auctions and distribution-related services, a surge in raw material prices may lead to a decrease in the volume of goods handled and an increase in logistics and production costs, potentially affecting the financial position and business results. Countermeasures include expanding the range of goods handled and supply networks, reviewing the revenue structure and improving operational efficiency, and providing higher value-added services.

The emergence of contingent or off-balance-sheet liabilities associated with partnerships and acquisitions, impairment losses on assets including goodwill due to deterioration in business conditions, and increased management burden due to organizational complexity may affect the financial position and business results. Countermeasures include conducting detailed due diligence and regularly monitoring and discussing investment projects.

If new entrants provide high value-added services amid rapid technological innovation, intensifying service competition, and diversifying needs, competition may intensify, potentially affecting the financial position and business results. Countermeasures include gathering information on competitors, strengthening barriers to entry by leveraging core competencies, and diversifying the business portfolio.

Since the Group has overseas subsidiaries, overseas members, and exporter members and conducts business activities in multiple countries and regions, changes in local political, economic, and social conditions, as well as unexpected changes in tax systems or regulations, may affect business performance. Countermeasures include researching conditions and regulations in various countries, diversifying the countries and regions in which services are offered, and managing the safety and crisis response of overseas assignees and their families.

If the collection of funds from business partners and customers is delayed over the long term, this may materially affect the financial position and business results. As countermeasures, the Group is tightening membership screening and thoroughly enforcing transaction terms whereby shipment occurs only after payment confirmation.

As career values diversify and global talent mobility increases, competition to acquire talent with rare skills and experience, including DX talent, is intensifying, and deterioration in recruitment conditions or talent outflow may affect the financial position and business results. The Group seeks to reduce this risk by promoting human capital management, improving employee engagement, and pursuing health management initiatives.

As the Group promotes business diversification and global expansion, violations of regulations in various countries and regions may lead to administrative sanctions, business suspension, or loss of social credibility imposed by regulatory authorities. The Group has strengthened cooperation between the Compliance Committee and the Board of Directors, thoroughly implements internal education, has established an internal whistleblowing system, and has set up a system for prompt reporting to top management.