VECTOR INC.

If natural disasters, pandemic resurgence, war, terrorism, or similar events occur, corporate advertising and PR-related budgets may be reduced, potentially affecting the Group's business performance. As countermeasures, the Group provides low-priced Strategic PR Consulting services, develops retainer services not concentrated in specific industries, and diversifies revenue through the Direct Marketing Business, while also regularly reviewing and enhancing its BCP.

In performance-based and programmatic advertising transactions within the digital advertising business, transactions occur with companies whose financial bases are not necessarily strong, and a sudden change in economic conditions could impede collection of trade receivables. As countermeasures, the Group has established credit management regulations and manuals separate from the strategic PR business, conducts credit assessments using external research agencies, sets transaction limits for each business partner, and regularly reviews transaction terms with partners of lower creditworthiness.

In the Direct Marketing Business, if sales underperform due to changes in customer demand or the external environment, excess inventory may arise, and the recognition of inventory valuation losses could affect business performance and financial condition. The Annual Securities Report assesses the likelihood of this risk materializing as low, and order volumes are controlled through daily management via the inventory system and timely review of sales strategy.

In overseas operations centered on Asia and the ASEAN region, losses may arise from sudden changes in laws and tax systems, country risk, or discrepancies between local market conditions and business strategy, potentially affecting business performance. As countermeasures, the Group thoroughly controls risk through regular information sharing with local subsidiaries and the Global Headquarters and careful assessment of overseas market trends.

Under a policy of actively pursuing M&A, business alliances, and new market development aimed at enhancing corporate value and expanding business domains, deterioration in financial condition or unforeseen circumstances could cause significant deviation from business plans, affecting business performance and financial condition. As countermeasures, the Group conducts timely assessment of market conditions and the business environment, manages progress against business plans, and makes timely and appropriate withdrawal decisions.

In the Venture Investment Business, which was commercialized from FY2023 (ended March 2023), a decline in the performance of investee venture companies could result in the Group being unable to recover its investments, affecting the Group's profit and loss. As countermeasures, the Group conducts careful investment decisions through decision-making bodies appropriate to the investment amount, and reports progress to the Board of Directors at each quarterly financial closing, examining improvement measures in the event of deviation.

The Group's growth capability and competitiveness depend on acquiring and retaining talented personnel, and difficulty in recruitment or outflow of personnel could affect business operations and performance. As countermeasures, the Group has introduced a fair and flexible personnel system, established an internal open recruitment system, and is working to improve the labor environment in order to curb turnover and create an environment where diverse talent can thrive.

The Direct Marketing Business, among others, is subject to regulation under various laws such as the Pharmaceutical and Medical Device Act and guidelines from regulatory authorities, and the enactment or revision of laws or tightening of regulations could affect business performance and operations. As countermeasures, the Group monitors legal amendments, ensures thorough awareness through internal training, and has established an internal management system to prevent legal violations.

As the Group holds a large amount of confidential and personal information in the course of its business activities, unforeseen unauthorized access, computer viruses, or similar incidents could result in leakage of customer information or suspension of business systems, potentially affecting business performance and financial condition. As countermeasures, the Group has implemented multi-layered security measures including ISO27001 certification (obtained January 2013), ISMS operation, regular training for all employees, consolidation of information onto company-issued devices, and physical access controls at commercial data centers.

Critical evaluation of the Group's business activities and image, or the spread of misinformation, could damage brand value and credibility, affecting financial condition and business results. As maintaining trust with the media is fundamental to service quality for a PR company, the Group strives to establish an appropriate information disclosure system through internal coordination and to detect and minimize the impact of rumors at an early stage.