Risks for Businesses and Others

The Group's main business for corporate clients, is systems integration, including IT system planning, design, development, operations, and maintenance. Our profitability depends on a wide range of factors. Some of the major factors with the potential to significantly impact Group business results are given below.

Domestic economic trends and trends in client IT investment

The Group draws its clients from a wide range of industries, including manufacturing, distribution, finance, and services. Trends in client IT investment and demand, which reflect economic conditions can affect Group business results. Within each industry, the Group competes directly against other firms to win orders from client firms. It is not always possible to anticipate the combined impact of these various factors. Nevertheless, the Group takes various measures to avoid and/or minimize their potential impact, including making staff allocations after identifying and anticipating demand trends at client firms.

Risks related to information systems integration

Our Group may be contracted to establish a customer's information system and is responsible for completing the information system by the delivery date in accordance with the customer's request. There are various technical, quality and other risks involved. If these risks materialize, Our Group's business performance may deteriorate through a delay in development schedules and an increase in development costs. Our Group undertakes development operations with a constant awareness of the possibility of these risks materializing. The Project Evaluation Committee, which is organized in accordance with Our Company Rules, has established a system to support risk evaluation and project management in an effort to prevent any risks from materializing.

Risks related to information security

Our Group's business results could be affected by the loss of social credibility, lawsuits or damages caused by the leakage of personal or confidential information obtained from customers, the intrusion of external computer viruses or the infringement of intellectual property rights. Although it is difficult to predict the possibility that such risks will materialize, Our Group contributes to strengthening information security not only for Our Group but also for the entire JFE Group by participating in the JFE-SIRT（*1）, a security system for the entire JFE Group.

Impact on business activities of major natural disasters or other incidents

If many of Our Group's employees suffer damage due to a large-scale natural disaster such as an earthquake or an outbreak of a contagious disease, or if major damage is caused to our principal offices or facilities, our business activities may be restricted and our operating results may be affected. Although it is impossible to predict when a natural disaster or infectious disease will occur, in order to minimize the impact upon Our Group's business activities in the event that such an event occurs, Our Group is promoting various measures to ensure that its business activities are as unrestricted as possible, such as a home working system for employees and employees of partner companies and the development of necessary information and communications equipment.

JFE-SIRT: JFE-Security Integration and Response Team
An information security and incident response team established to protect JFE Group information assets from the risks posed by information leaks and by increasingly sophisticated cyberattacks