Amano Corporation

The Time & Information Systems Business is the Group's core business, accounting for 77.6% of net sales and 81.8% of operating income (before deduction of unallocated expenses). There is a risk that, triggered by drastic changes in demand structure or the creation of new markets, players from other industries or powerful competitors may enter this field. If competitors enter with innovative products or solutions, the Group's market competitiveness could decline, which may materially affect business performance. As countermeasures, the Group is pursuing continuous development of competitive products, strengthening of support systems, reinforcement of relationships with existing customers, and development of new customers.

The Group operates globally with production and sales bases in North America, Europe, and Asia, and fluctuations in foreign exchange rates affect business performance when translating overseas transactions into yen. In particular, since a substantial portion of net sales depends on overseas markets, the risk of erosion of earnings increases during periods of yen appreciation. As a risk mitigation measure, the Group considers the use of hedging instruments such as forward exchange contracts as needed.

In conducting cloud businesses such as ASP, SaaS, and hosting, the Group handles confidential information including customers' personal data, and if data loss or leakage occurs due to cyberattacks or other causes, business performance may be affected through loss of trust and other consequences. As countermeasures, the Group has established an Information Security Management Committee, implements encryption of hard disks and external media, conducts regular employee training through e-learning, and maintains and operates its Privacy Mark (obtained in February 2014). At its European subsidiary, GDPR compliance is also being implemented under the guidance of local specialists.

There is a risk of human and physical damage, such as damage to sales offices and business sites, due to large-scale earthquakes or an increase in wind and flood damage associated with climate change. In addition, the spread of infectious diseases may make it difficult for employees to carry out their duties, potentially causing business activities to be temporarily suspended. As countermeasures, the Group has introduced an emergency contact network and safety confirmation system, relocated file servers to an external data center, promoted remote work, and established a disaster response headquarters structure.

The Group conducts global operations in North America, Europe, and Asia, and there is a possibility that operations may become unfeasible due to the application of laws and regulations in each region, social disruption caused by political change, or the occurrence of war, terrorism, or pandemics. If these risks materialize, continuing operations in the affected region may become difficult, affecting business performance. As countermeasures, the Group continuously gathers information on local conditions during normal times, and management directly confirms the situation and provides instructions at quarterly management meetings of overseas Group companies. In the event a risk materializes, the Group has established a system to respond in a timely manner, utilizing external specialists as needed.

In preparing the consolidated financial statements, the Group makes estimates based on certain future assumptions regarding matters such as impairment accounting for fixed assets and the recoverability of deferred tax assets. If these assumptions change significantly due to unforeseen events such as natural disasters or the spread of infectious diseases, business performance may be affected. As a countermeasure, the Group strives to calculate reasonable amounts based on information available at the time of estimation.