Computer Institute of Japan, Ltd.

The NTT Group and the Hitachi Group together accounted for 39.4% of consolidated net sales for the fiscal year ended June 2025, and if either group changes its business policy or outsourcing policy, or its business performance deteriorates, this could have a material impact on the Group's business performance and financial condition. In the current consolidated fiscal year, sales to both groups increased by ¥533 million year on year, but the degree of dependence remains at a high level, up 0.7 percentage points from the previous fiscal year. As a countermeasure, the Group is promoting the reorganization of its customer portfolio and diversification of key customers, aiming to reduce dependence through expansion of overall sales.

Due to the labor shortage across the information services industry as a whole and increasing fluidity in the labor market, if recruitment plans do not proceed as planned, this could affect business performance and financial condition through a decline in the ability to execute business operations. The Group addresses this by implementing human resource development based on its management policy of "promoting the development of specialized SEs," strengthening recruitment activities, and implementing measures to improve employee engagement.

Demand for software development in the information services industry tends to be significantly affected by economic conditions, and if IT investment by client companies declines due to economic deterioration domestically or overseas, this could affect the Group's business performance and financial condition. The Group's strength lies in providing solutions to a wide range of fields and industries, including government agencies, finance, information, manufacturing, services, and telecommunications, and it seeks to diversify risk by strengthening a business portfolio that does not depend on specific fields or industries.

New technologies and new business models are developing rapidly in the information services industry, and if the Group is unable to respond appropriately to innovative technologies or business developments that exceed expectations, this could affect business performance and financial condition through a decline in the competitiveness of existing businesses. As a countermeasure, the Group actively promotes investigation and R&D into advanced technologies and solutions, and gathers information on and acquires cutting-edge technologies through collaboration with overseas companies, including its business partner SYSCOM Computer Engineering Co., Ltd. (SYSCOM) of Taiwan.

Because the Group handles personal information, customer information, and highly public information in its contracted system development, services provided, and internal systems, if information is leaked or destroyed due to computer virus intrusion or technical or human factors, this could result in a decline in corporate value and affect business performance and financial condition. As a countermeasure, the Group has obtained Privacy Mark and ISMS certification, and conducts regular security education for all employees and partner company workers, striving to embed security knowledge and raise awareness of norms.

If natural disasters such as earthquakes or storm and flood damage occur and human resources, business locations, or equipment are damaged, business continuity may become difficult, potentially affecting business performance and financial condition. As a countermeasure, the Group has formulated a "Business Continuity Plan (BCP)," establishing a system for business continuity and rapid recovery after a disaster occurs, and has communicated this to all employees.

Because overseas subsidiaries conduct transactions with domestic and overseas companies, fluctuations in exchange rates could lead to a decline in yen-denominated sales or an increase in costs, potentially affecting consolidated business performance and financial condition. At present, since transaction amounts are small, the Group does not employ foreign exchange hedging, and exposure to foreign exchange rate fluctuation risk remains.