CERESPO CO., LTD.

If event demand contracts due to social conditions such as domestic economic policy, corporate earnings, natural disasters, or the spread of infectious diseases, this could directly affect the Company's business performance. The event operation business is particularly vulnerable to these changes in the external environment, and there is a risk that a sharp decline in demand could lead to deterioration in earnings. The Company has formulated BCP and other countermeasures and has established a system to identify the impact on operations in a timely manner.

Although the Company diversifies risk by conducting business broadly with private companies, government agencies, and various organizations, orders may decrease due to changes in industry/organization economic trends or a decrease in tax revenue at government agencies. Business performance may also be adversely affected if marketing and sales activities are insufficient. The Company addresses this by continuing to share information in a timely manner and conducting sales activities tailored to customer characteristics.

The Company owns land with a book value of ¥3,310 million, and under the application of impairment accounting for fixed assets, if land prices decline or similar events occur, the Company may recognize an impairment loss, which could affect business performance. This land is currently in use as the head office, distribution center, branch offices, etc., and there are no plans to sell it at this time, but there is a risk that asset value could be impaired due to changes in market conditions. The Company continues to conduct appropriate asset valuations based on impairment accounting standards.

In a business model that provides discovery and resolution of customer issues through on-site capabilities, securing and developing excellent human resources is an important management issue, and if recruitment activities are unsuccessful, this could adversely affect future business performance. A shortage of personnel carries the risk of directly leading to a decline in service quality and the loss of order opportunities. The Company is working to secure and develop human resources through continuous recruitment activities and the enhancement of its personnel systems.

If the Company fails to comply with various public regulations such as the Antimonopoly Act, it may face restrictions on business activities, as well as investigations, lawsuits, fines, or administrative surcharges, which could have a material impact on business performance and corporate trust. In particular, the diverse business areas including events and logistics are subject to a wide variety of applicable regulations. The Company continuously carries out compliance awareness activities through statements by management and training programs.