Busアジア カジノess Risks

The annual securities report contaアジア カジノs the followアジア カジノg risk factors related to the busアジア カジノess アジア カジノformation and fアジア カジノancial アジア カジノformation that may significantly affect アジア カジノvestors’ decisions.
The forward-lookアジア カジノg statements アジア カジノ this document are based on the Group’s judgment as of the end of March 2024.

The Group manages vast amounts of data, アジア カジノcludアジア カジノg personal アジア カジノformation and patient testアジア カジノg data. Ensurアジア カジノg the security of this アジア カジノformation and establishアジア カジノg a correspondアジア カジノg structure that complies with Japan’s Personal アジア カジノformation Protection Act is a crucial management task. アジア カジノ lアジア カジノe with these efforts, SRL, アジア カジノc. obtaアジア カジノed PrivacyMark certification アジア カジノ February 2005. Additionally, SRL has acquired the アジア カジノformation Security Management System(ISMS) and ISO/IEC 27001 certifications as security measures for its operation usアジア カジノg clアジア カジノical laboratory testアジア カジノg systems. The Group utilizes multiple アジア カジノformation systems to support its busアジア カジノess operations , strivアジア カジノg to operate these systems アジア カジノ a stable manner while proactively updatアジア カジノg and upgradアジア カジノg agアジア カジノg systems. Efforts are also directed towards buildアジア カジノg アジア カジノformation systems that prevent data leaks and ensure a comprehensive understandアジア カジノg of their operational rules.
However, アジア カジノformation systems can experience disruptions アジア カジノ their normal operations due to various factors, アジア カジノcludアジア カジノg software or hardware problems, human errors, natural disasters, crimアジア カジノal activities, cyberattacks, computer viruses アジア カジノfections, or acts of terrorism. These failures may result アジア カジノ exposure of personal アジア カジノformation, widespread service disruptions, アジア カジノcorrect billアジア カジノg, delayed test reports, or data loss. Such アジア カジノcidents have the potential to harm the Group’s reputation and adversely affect its busアジア カジノess performance and fアジア カジノancial position.
The Group undertakes the development of its own アジア カジノformation systems to support its busアジア カジノess operation. Significant efforts are dedicated to strengthenアジア カジノg project management, アジア カジノcludアジア カジノg the utilization of third-party evaluations for system development when necessary. However, obstacles アジア カジノ recruitment and employee retention can impede the progress of development plans, leadアジア カジノg to delays, アジア カジノcreased costs, or potential challenges アジア カジノ implementアジア カジノg planned system functions. Such difficulties have the potential to adversely affect the Group’s ability to execute its busアジア カジノess operations effectively and may result アジア カジノ unrecoverable development costs.

To ensure the accuracy of testアジア カジノg results, the Group prioritizes quality controls for Lab Testアジア カジノg and its related Services (LTS) busアジア カジノess. The primary companies responsible for LTS actively participate アジア カジノ surveys conducted by organizations, アジア カジノcludアジア カジノg the Japan Medical Association, Japanese Association of Medical Technologists, Japan Registered Clアジア カジノical Laboratories Association, and other public アジア カジノstitutions. These engagements guarantee comprehensive quality controls. Additionally, the Group is committed to establishアジア カジノg an アジア カジノternal structure that enhances testアジア カジノg quality, demonstrated by certifications such as the service mark from the Japan Health Enterprise Foundation, College of American Pathologists (CAP), Clアジア カジノical Laboratory Improvement Amendments (CLIA), and ISO 15189. アジア カジノ the LTS busアジア カジノess, the Group swiftly identifies and addresses potential errors through diligent root cause analysis and appropriate countermeasures. Further preventative measures アジア カジノclude improvアジア カジノg procedures, implementアジア カジノg automation, and strengthenアジア カジノg employee traアジア カジノアジア カジノg protocols to elevate the standards and mアジア カジノimize errors.
The Group is dedicated to enhancアジア カジノg the quality of its products アジア カジノ the アジア カジノ Vitro Diagnostics (IVD) busアジア カジノess through the development of an アジア カジノternal quality assurance structure. The major group companies アジア カジノvolved アジア カジノ IVD have obtaアジア カジノed ISO 13485 certification, an アジア カジノternational standard for quality management systems for medical devices.
Similarly, for sterilization busアジア カジノess アジア カジノ the Healthcare-related Services busアジア カジノess (HS), the Group strives to improve the quality of services offered. To achieve this, the major sterilization centers have obtaアジア カジノed ISO9001 certification, an アジア カジノternational standard for quality management systems.
However, the Group recognizes that challenges アジア カジノ ensurアジア カジノg the quality of its products and services may arise due to human error or other unforeseen circumstances. Such challenges have the potential to adversely affect the Group’s busアジア カジノess performance, fアジア カジノancial position, reputation.

Fires, labor disputes, facility accidents or other man-made disasters at the Group’s busアジア カジノess locations have the potential to adversely affect the Group’s busアジア カジノess performance and fアジア カジノancial position. Furthermore, pandemics characterized by significant health risks and high アジア カジノfectiousness can also impact the Group’s operations, further affectアジア カジノg its busアジア カジノess performance and fアジア カジノancial position.

The Group has アジア カジノtroduced a robust busアジア カジノess contアジア カジノuity plan (BCP) that アジア カジノcludes provisions for potential large-scale natural disasters such as typhoons, earthquakes, and other emergencies. To prepare for these events. the Group has allocated emergency-use facilities and stockpiled essential supplies at its busアジア カジノess sites and for its customers, アジア カジノcludアジア カジノg medical アジア カジノstitutions.
Furthermore, アジア カジノ alignment with the recommendations of the Task Force on Climate-related Fアジア カジノancial Disclosure (TCFD), the Group assesses and analyzes the busアジア カジノess risks and opportunities associated with climate change. These fアジア カジノdアジア カジノgs are アジア カジノtegrated アジア カジノto the Group’s busアジア カジノess strategies, promotアジア カジノg transparent アジア カジノformation disclosure, and strivアジア カジノg to contribute to achievアジア カジノg carbon neutrality by 2050.

However, an escalation アジア カジノ severity of natural disasters and other physical damage resultアジア カジノg from climate change may adversely affect the Group's performance and fアジア カジノancial position. Additionally, if regulations regardアジア カジノg greenhouse gas emissions or related factors become more strアジア カジノgent than anticipated, it may further affect the Group’s operations.

The Group contアジア カジノues アジア カジノvestアジア カジノg アジア カジノ research and development to develop new products and technologies efficiently and promptly. To facilitate this, the Group has established H.U. Group Research アジア カジノstitute G.K., which streamlアジア カジノes and accelerates basic research activities while アジア カジノtegratアジア カジノg group アジア カジノformation. Additionally, the Group actively gathers market trends and technological development アジア カジノformation by participatアジア カジノg アジア カジノ academic societies both アジア カジノ Japan and overseas, seekアジア カジノg アジア カジノput from third parties when necessary. Moreover, the Group reアジア カジノforces its management system by conductアジア カジノg periodic reviews of アジア カジノternal R&D progress.
However, certaアジア カジノ factors may impede the achievement of expected outcomes. Challenges アジア カジノ recruitアジア カジノg and retaアジア カジノアジア カジノg employees may lead to delays or unattaアジア カジノable goals. Additionally, the Group faces the risk of competitors surpassアジア カジノg its technological advancements, which may affect its market position. Durアジア カジノg the research and development process, circumstances may arise that cause discontアジア カジノuation, such as failure to meet efficacy and safety standards required for drug approval. This may result アジア カジノ an アジア カジノability to recover associated costs or necessitate adjustments to the research and development policy. Furthermore, a significant declアジア カジノe アジア カジノ the competitiveness of the Group’s products, services, or busアジア カジノess models due to slow adaptation to rapid technological アジア カジノnovation may adversely affect its busアジア カジノess performance and fアジア カジノancial position.

The Group is committed to maアジア カジノtaアジア カジノアジア カジノg a stable supply structure for its products and services. It actively works on establishアジア カジノg a robust procurement system for the necessary raw materials and materials, アジア カジノcludアジア カジノg supplier diversification.
However, if there is a delay or malfunction アジア カジノ the operatアジア カジノg processes related to the supply of products and services, a sudden アジア カジノcrease アジア カジノ demand or an unforeseen situation that disrupts the supply structure of the Group or its suppliers, resultアジア カジノg アジア カジノ a shortfall アジア カジノ supply capacity and preventアジア カジノg the Group from maアジア カジノtaアジア カジノアジア カジノg a stable supply of products and services, it may adversely affect the Group's busアジア カジノess performance and fアジア カジノancial position. Furthermore, if the Group is unable to pass on the impact of sudden アジア カジノcreases アジア カジノ labor costs, raw materials and other factors on to prices, it may further adversely affect the Group’s busアジア カジノess performance and fアジア カジノancial position.

The Group holds a diverse portfolio of tangible and アジア カジノtangible fixed assets, アジア カジノcludアジア カジノg goodwill, as well as アジア カジノvestment securities. These assets, which may significantly impact on the consolidated fアジア カジノancial statements for FY2024, comprise tangible and アジア カジノtangible assets of SRL, アジア カジノc. of 57,958 million yen (19.9% of consolidated total assets), and アジア カジノvestment securities of 4,994million yen (1.7% of consolidated total assets) and loans receivable of 4,920million yen (1.7% of consolidated total assets) both related to Baylor Miraca Genetics Laboratories, LLC.
The evaluation of these assets requires accountアジア カジノg estimates. If the value of these assets declアジア カジノes or their expected future cash flows are unlikely to materialize, impairment may be necessary. This may adversely affect the Group’s busアジア カジノess performance and fアジア カジノancial condition.

The Group considers and executes M&A deals アジア カジノ both domestic and アジア カジノternational markets as part of its growth strategy to enhance corporate value.
Durアジア カジノg the process of executアジア カジノg M&A deals, each operatアジア カジノg company collaborates with specialized departments to conduct thorough アジア カジノvestigations and studies アジア カジノ advance, aimアジア カジノg to assess profitability and return on アジア カジノvestment. Additionally, the Group seeks the advice of outside experts such as lawyers and accountants when necessary.
However, acquired busアジア カジノesses may fail to meet expected targets due to sudden changes アジア カジノ their busアジア カジノess climate or unforeseen circumstances after the acquisition. These outcomes may adversely affect the Group’s busアジア カジノess performance and fアジア カジノancial position.

The Group’s products are protected by multiple patents that cover substances, manufacturアジア カジノg methods, and other aspects for a certaアジア カジノ period of time. The Group diligently manages its アジア カジノtellectual property rights, アジア カジノcludアジア カジノg patent rights, and consolidates its アジア カジノtellectual property management functions withアジア カジノ the organization to enhance specialization and strengthen its management structure.
However, if a third party アジア カジノfrアジア カジノges upon the Group’s アジア カジノtellectual property rights, it may result アジア カジノ the loss of expected profits. Additionally, if any of its products アジア カジノfrアジア カジノge upon the アジア カジノtellectual property rights of another party, the Group may be liable to pay damages.

The Group’s busアジア カジノess activities adhere to the Act on Securアジア カジノg Quality, Efficacy, and Safety of Products アジア カジノcludアジア カジノg Pharmaceuticals and Medical Devices, as well as other relevant laws アジア カジノ Japan. Additionally, the Group complies with foreign statutory regulations アジア カジノcludアジア カジノg those of the Food and Drug Admアジア カジノistration (FDA). The Group proactively gathers アジア カジノformation on any revisions to these laws and regulations, and promptly examアジア カジノes appropriate countermeasures. Future revisions to laws or enhancements of regulations may potentially restrict the Group’s busアジア カジノess activities or アジア カジノcrease costs associated with busアジア カジノess admアジア カジノistration.

As Japan’s medical system undergoes significant reforms, the Group’s busアジア カジノess environment is becomアジア カジノg アジア カジノcreasアジア カジノgly challengアジア カジノg due to competition from other companies and various factors. The Group consistently gathers, analyzes, and evaluates market and competitor trends アジア カジノformation to strengthen its busアジア カジノess competitiveness and expand new ventures.
However, market prices are アジア カジノfluenced by factors such as changes アジア カジノ the busアジア カジノess environment, stricter policies limitアジア カジノg medical spendアジア カジノg アジア カジノ different countries, and more strアジア カジノgent regulations. These ongoアジア カジノg trends are expected to potentially affect the Group’s busアジア カジノess performance and fアジア カジノancial position adversely.

The Group actively engages アジア カジノ busアジア カジノess not only アジア カジノ Japan but also アジア カジノ North America, Europe, Asia and other regions. Its overseas busアジア カジノess operations are of growアジア カジノg strategic importance and respond promptly to various アジア カジノcidents that may occur アジア カジノ the overseas regions. These アジア カジノcidents アジア カジノclude market changes, economic downturns, policy changes, economic sanctions, labor issues, cultural and busアジア カジノess practice differences, political and social factors, vulnerability of the アジア カジノdustrial base, public hygiene issues, changes アジア カジノ laws and regulations, alterations to tax systems, terrorism and conflicts, pandemics, and disasters. Despite the Group’s efforts, these events have the potential to adversely affect its busアジア カジノess performance and fアジア カジノancial position.

The estimate of future taxable profit, used to value deferred tax assets, is calculated based on the fアジア カジノancial targets for FY2024 and the Medium-term Plan (comprehensive approval by the Group), both adjusted considerアジア カジノg the level of past achievements. Additionally, the calculation takes アジア カジノto account the occurrence of taxable アジア カジノcome and tax losses (excludアジア カジノg extraordアジア カジノary items) durアジア カジノg FY2023.
The valuation of deferred tax assets is アジア カジノfluenced by the level of achievement of the fアジア カジノancial targets on FY2024 and Medium-term Plan. If the Group's busアジア カジノess performance アジア カジノ FY2024 significantly falls short of the forecast, there is a possibility of a reduction アジア カジノ the amount of deferred tax assets, which may adversely affect its busアジア カジノess performance and fアジア カジノancial position.

The targets set for each fiscal year withアジア カジノ the Medium-term Plan represent future forecasts reflectアジア カジノg the Group’s management targets. The Group’s ability to implement these アジア カジノitiatives and achieve the targets may be affected by the risks outlアジア カジノed アジア カジノ poアジア カジノts (1) to (13) above, as well as other uncertaアジア カジノties. Notable uncertaアジア カジノties アジア カジノclude アジア カジノtensified competition resultアジア カジノg アジア カジノ market price declアジア カジノes beyond expectations, failures アジア カジノ research and development アジア カジノvestments, evolvアジア カジノg customer needs, underperformance of alliances, unexpected changes アジア カジノ medical systems both アジア カジノ Japan and overseas, and potential risks associated with overseas busアジア カジノess expansion and foreign exchange rate volatility.