JAPAN Creative Platform Group Co.,Ltd.

The Group's operating revenue is highly dependent on trends in sales promotion activities of domestic companies, and if the domestic economic downturn becomes prolonged, companies tend to scale back advertising and promotional activities, which could have a material impact on business performance. This is explicitly identified as a "particularly important risk" in the Securities Report, and it also carries the risk of divergence in the formulation of business strategy and performance forecasts. As a countermeasure, the Group formulates business strategies based on available information such as market growth forecasts and customer demand forecasts to mitigate this risk.

If the Group falls into price competition with competitors, it cannot absolutely guarantee competitive advantage in terms of price, and this is recognized as an "important risk" that could affect operating results and financial condition. The Group seeks to maintain its advantage by providing high value-added products and services on a one-stop basis, but it must continuously respond to changing customer needs. The Group is actively strengthening its products and services through enhancement of specialized technologies and know-how, introduction of the latest equipment, and M&A.

Natural disasters such as earthquakes, tsunamis, and typhoons, or the occurrence of a pandemic, could cause devastating damage to manufacturing sites or render them inoperable, and this is recognized as an "important risk." In addition to manufacturing operations being temporarily suspended due to attendance restrictions from the spread of infectious diseases, significant costs may also be required to repair or replace factories and machinery. As countermeasures, the Group has established an emergency response headquarters headed by the President and Representative Director as the person with ultimate responsibility, formulated emergency response plans, and introduced flexible working arrangements such as promotion of online operations.

The risk of information system outages or leakage of customer information due to computer viruses or cyberattacks is increasing, and it is recognized as an "important risk" that, should a data leak occur, it could lead to a decline in social credibility and have a significant impact on business development. The Group strives to protect personal information and makes every effort to maintain and manage its systems and data, but complete avoidance is difficult. The Group has established an information security policy and a personal information protection policy, and continuously reviews and improves them in response to technological advances and changes in social conditions.

The Group is subject to a variety of legal regulations, including product liability, waste disposal responsibility, environmental regulations, personal information protection, and taxation, and if these regulations are further strengthened, business activities may face greater restrictions and increased costs, which could affect operating results and financial condition. In addition, if a compliance violation occurs due to events that are difficult to foresee or prevent, such as individual misconduct, this poses a risk of affecting social credibility, operating results, and financial condition. As countermeasures, the Group has established a code of corporate conduct, set up a corporate ethics helpline, and conducts business process audits through the Audit and Supervisory Committee and the Internal Audit Office.