Toukei Computer Co.,Ltd.

The Group belongs to the information services industry, and its business content and performance may be affected by trends in clients' IT investment. With the rapid advancement of computer-related technology, the Group's business content has been changing, including increases in Web hosting/housing services and increases in Software Development Services revenue, and it will continue to be required to respond to changes in the market environment going forward. The Group has adopted a policy of implementing what it considers to be the best measures, but specific details of the countermeasures have not been disclosed.

In the course of conducting its business, the Company holds customers' confidential information, and the possibility of information leakage due to unforeseen circumstances cannot be ruled out entirely. If an information leak were to occur, in addition to a decline in social credibility, the Company may incur substantial response costs and a decline in creditworthiness, which could adversely affect its business performance. The Company states that it takes every precaution in its management, but specific details of the management system have not been disclosed.

The Company installs its host computers and servers in its own data center and implements strict management through firewalls, authentication systems, and other measures; however, there remains a possibility that hackers or crackers exploiting security holes could intrude upon the network and cause serious failures. Although the Company has taken measures such as limiting connection points between the internet and its internal network and allowing only specific data from authorized users to pass through, the risk of unauthorized external intrusion cannot be completely eliminated. In the event of a failure, service provision may be suspended and customers may be affected, which could adversely affect the Company's business performance and creditworthiness.

The Company's main products are software, and due to the nature of producing intangible goods, there remains a possibility that unforeseen defects or flaws in system design, or bugs in programs, may occur at the time of development. If such issues materialize, there is a risk of receiving complaints or claims for damages from users, which could adversely affect business performance. The Company has established quality control standards and works to ensure optimal quality through planning, execution, and control, but states that complete elimination is difficult.

Computer-related technology is advancing rapidly, including the downsizing of hardware and the networking of software, and the Group's business content is continually being forced to change accordingly. If the Group is slow to respond to technology trends, this could lead to a decline in competitiveness and loss of customers, affecting business performance. The Group has adopted a policy of implementing the best possible measures, but specific investment plans for responding to technological change have not been disclosed.