AJIS CO.,LTD.

Competition for hiring employees is intensifying due to the decline in the working-age population and changes in employment patterns. If appropriate recruitment and staff allocation cannot be achieved, or if labor costs increase significantly due to rising salaries and hourly wages or revisions to the social security system, this may affect business performance and financial condition. The Group is addressing this by promoting a more comfortable working environment and improving treatment for employees.

In the course of business operations, there are opportunities to handle various confidential information held by customers, and if important confidential information is leaked due to unauthorized external access or similar incidents, this could lead to damages claims and loss of reputation. As countermeasures, the Group has introduced security equipment and services, established regulations related to information security, and set up an Information Security Committee. However, due to the increasing sophistication and diversification of cyberattacks, these measures may not function completely.

The Group holds personal information of customers, business partners, and employees, and in the event of a leak, this could result in loss of reputation and substantial expenses such as damages, affecting business performance and financial condition. The Group aims to reduce this risk by implementing measures such as establishing an information management system based on personal information protection manuals and providing employee training. Amid the tightening of personal information protection legislation, this is positioned as a significant compliance risk.

The Group operates in 10 countries and regions, including South Korea, China, Hong Kong, Taiwan, Thailand, Malaysia, Vietnam, the Philippines, Singapore, and the United States, and has set expanding market share in the International Business as a key strategic theme. If unforeseeable changes occur in policy or the socioeconomic environment in each region, business execution may become difficult, potentially affecting business performance and financial condition. Geopolitical risks and regulatory changes in each country may directly affect business continuity.

In the distribution and retail industry, the introduction of RFID and image recognition technology is progressing at some apparel chains and manufacturing retailers, and pilot trials are also being conducted at convenience stores and drugstores, which may affect the methods used in the Group's core physical inventory counting operations. At present, widespread adoption across the entire distribution and retail industry is expected to take time due to technological and cost-related factors, but if various issues are resolved, this could affect business performance and financial condition. The Group is monitoring technological trends by continuing its research and investigation.

The Group is proceeding with the development of its core systems with the aim of improving agility through functional integration and operational distribution, as well as achieving both high security and convenience; however, if the research and development does not progress or is interrupted, the expected effects may not be realized, or substantial costs may be incurred, potentially affecting business performance and financial condition. Failure in system development investment also carries the risk of directly leading to a decline in competitiveness.

In the event of natural disasters such as major earthquakes or typhoons, infectious disease pandemics, riots, terrorist activities, or other unforeseen accidents, business execution may become difficult due to human and physical damage, potentially affecting business performance and financial condition. The Group has established a BCP (Business Continuity Plan) and put in place a response system for risks arising from disasters and emergencies. Because the Group operates across multiple locations both in Japan and overseas, the scope of impact in the event of a widespread occurrence could be significant.