KOYOSHA INC.

Due to the diversification of electronic media such as digital signage, demand for printed materials, particularly in the core commercial printing business, has continued to decline. If the decline in demand proceeds at a scale exceeding expectations, it could affect the Group's business performance. As countermeasures, the Group is working to secure sales by developing new customers, deepening relationships with existing customers, and leveraging its Printing One-Stop Service structure.

Competition in the printing market is intensifying under a business structure dominated by numerous small-scale operators, leading to a decline in order prices. If the price decline exceeds expectations, it could affect business performance through deteriorating profitability. The Group is working to secure profitability by maintaining prices through the provision of added value and reducing costs through improvements in production technology and production efficiency.

Natural disasters such as typhoons and earthquakes may cause large-scale damage to or functional decline of company infrastructure, and may result in the suspension of production activities. If damage occurs beyond expectations, it could affect business performance. As countermeasures, the Group has established a multi-site data backup system and introduced a system for confirming the safety of employees.

The Group is required to comply with a wide range of legal regulations, including environmental laws, the Act on Promotion of Subcontracting Small and Medium-sized Enterprises, and the Personal Information Protection Act. If a situation arises in which laws and regulations are violated, it could affect business performance. The Group has established a "Code of Conduct for Legal Compliance" to ensure thorough compliance.

As a company providing information processing services, the Group recognizes the risk of leakage of personal information entrusted to it by customers. If a leak occurs, it could result in a loss of corporate credibility and affect business performance. As countermeasures, the Group has formulated a "Personal Information Protection Policy," established a personal information protection management system, and obtained Privacy Mark certification.