Ryoyu Systems Co.,Ltd.

If deterioration in economic conditions or changes in customer management policies lead to reductions in customers' IT-related budgets or rapid changes in investment needs, this could have a material impact on the Group's business performance. As countermeasures, the Group accurately grasps customer trends and flexibly allocates personnel, while also working to expand into new business areas and acquire new customers, thereby reducing the risk of dependence on specific customers.

If competition intensifies due to improved competitiveness among rival companies or the entry of new companies with strengths in consulting or specific technologies, and the Group's market competitiveness declines as a result, this could have a material impact on business performance. The Group seeks to maintain its competitiveness by providing high-value-added services based on deep understanding of customers' businesses, and by strengthening its organization and structure to respond to changing customer needs and new technology areas.

The information services industry undergoes rapid technological innovation, which may lead to changes in price levels due to the application of new technologies and the obsolescence of existing technologies and know-how. If the Group is unable to promptly develop its business using new technologies, there is a risk that declining competitiveness could have a material impact on business performance. The Group addresses this by strengthening communication with customers' DX promotion departments, promoting research and development and technical education, and enhancing services through collaboration with solution vendors.

Development difficulty is increasing due to a rise in new development projects, larger development scale, and more sophisticated customer requirements. If work delays lead to increased costs or defects requiring correction arise after delivery, this could result in significant deterioration in profitability and damages payable to customers, thereby affecting business performance. The Group seeks to reduce this risk through thorough management at the inquiry, estimation, and order-receipt stages, and by building and strengthening a project management system to improve final quality.

The Group's business is highly dependent on human resources, and if it is unable to secure and develop personnel with technical capabilities above a certain level, this could have a material impact on business performance. In addition to strengthening new graduate and mid-career recruitment, the Group is promoting the development of systems to accommodate diverse human resources, including flexible working arrangements and support programs for women's career advancement.

Amid steady IT investment demand, if the Group is unable to secure excellent project managers, development engineers, or highly specialized technical personnel in DX-related fields such as AI and data analysis, this could result in lost order opportunities and the entry of competitors, thereby having a material impact on business performance. In parallel with efforts to secure and develop personnel, the Group is working to improve its ability to respond to customers by strengthening relationships with high-quality partner companies.

As cyberattacks become increasingly sophisticated and elaborate, if information leaks or tampering occur, this could damage social credibility and result in substantial costs for identifying the cause, restoring systems, notifying relevant parties, and paying damages, thereby having a material impact on business performance. The Group has established a system to minimize damage and enable rapid recovery through monitoring and operation by its in-house SOC, establishment of a CSIRT, development of a data backup system, and security education.

When expanding into new fields, the Group may need to respond to new risks not previously anticipated in its existing business, including technologies, industry practices, laws, and regulations. The Group has established a system in which the Board of Directors engages in open and vigorous discussion to clarify the nature of such risks and make speedy and appropriate decisions regarding whether to proceed with expansion.