||Impact of COVID-19 and other infectious diseases
||Since many of the products and services handled by the Group are provided to financial institutions, retail stores, railway companies, and other businesses that are required to continue operating even during an emergency, the impact of the spread of infectious diseases is considered to be limited in the event that the situation returns to normal within a short period of time. However, since the fourth quarter of the fiscal year under review, the spread of COVID-19 infection has continued on a global scale, and has had an impact on the Group's business activities. In terms of sales activities, restrictions on negotiations with customers have become a major impediment to active sales activities. While the containment of COVID-19 spread is not yet predicted, this lack of clarity in future has led customers to be less motivated to invest and the decline in demand, resulting in the uncertainty in the future business development of the Group. In production activities, overseas plants that were forced to temporarily suspend their operations have now resumed their near-normal operations. However, the risk persists mainly in Asia regarding delays in deliveries of raw materials, parts, and other supplies from suppliers. Thus, should the spread of the infection continue for a prolonged period of time, resulting in plant shutdowns, restrictions on the procurement of certain raw materials and parts, prolonged restraints on sales activities, or unexpectedly significant changes in customers' interest in investment, the business operation of the Group may be adversely affected, which could have impact on the Group's stable revenue and financial position. Under these circumstances, the Company has established the COVID-19 Response Task Force in January 2020 which is chaired by the President & Representative Director. The Company is working to share information and assess the impact of the spread of COVID-19 mainly through the task force. In addition, effective countermeasures are discussed and planned at the Management Committee, the Board of Directors and other key management meetings to minimize the impact of the outbreak.
|Rapid development of cashless economy
||While its mainstay business remains in the cash handling machine sector, in order to mitigate the risks inherent in this core business, the Group is also aggressively investing in the non-cash business sector. Should the cashless economy develop drastically and globally in a short time before the Group’s non-cash businesses matures, the performance of the Group may be adversely affected.
|Overseas business conditions
||The Group’s overseas business activities are wide-ranging, including sales and maintenance of products, and overseas production and procurement. Should the political and/or economic situation rapidly change or the protectionist trade policies expand in countries or regions where the Group operates, or if foreign exchange markets were to fluctuate beyond the anticipated scope, major issues may arise in sales and other activities and the performance of the Group may be adversely affected.
|Laws and regulations of countries and regions where the Group operates
||The Group is subject to business authorizations, import and export regulations, as well as various laws and regulations in the countries and regions where the Group operates. Should these laws and regulations be revised or repealed, or if new public regulations were to be established, or if any other special factors influencing the market environment were to arise, the performance of the Group may be adversely affected.
|High level of reliance on the financial industry sector
||The composition of the Group’s sales is highly dependent on the domestic and overseas financial institutions. While the Group is endeavoring to develop new products in response to the global shift to next-generation store styles in order to provide products that meet the customers’ needs, should it become necessary for the financial institutions to cut their capital investments due to their major operational or financial problems, the performance of the Group may be adversely affected.
||Should the competition intensify in the business areas in which the Group operates, leading to the competitors’ launch of new competitive products and services, aggressive sales activities such as significant price reductions, and/or the shift of demand to lowerpriced products, the performance of the Group may be adversely affected.
||The Group is proactively allocating its management resources so as to expand its existing businesses and create new businesses, with the aim of continuously improving its corporate value over the medium to long term. As a result, the amounts of goodwill and customer relationships as of March 31, 2020 stood at ¥43,246 million and ¥17,968 million, respectively, accounting for 14.0% and 5.8% of total consolidated assets, respectively. These intangible assets are subject to impairment assessment when their expected results are not achieved due to changes in the business environment, related impairment loss be recorded. Should such circumstances occur, the performance of the Group may be adversely affected.
|Procurement of parts and materials
||While the Group strives for stable procurement of parts and materials by purchasing from multiple suppliers and diversifying procurement locations, certain parts and materials may be procured from a single supplier on a temporary basis due to their specialty. In addition, there may be difficulties in procurement due to natural disasters or accidents that cause suppliers to suspend or interrupt their production activities. Should such unforeseen events occur impacting the production of the Group, the performance of the Group may be adversely affected.
|Recruitment and development of human resources
||As the Group operates its businesses globally, it has employees with a wide variety of nationalities, values, and expertise. The Group's medium- to long-term growth is highly dependent on these human resources, and securing and training talented employees at the right time is indispensable for the sustainable growth of the Group. Thus, if the Group were unable to recruit and train personnel who are well suited to the characteristics and growth stage of each Group company or who are capable of working in development, production, sales, maintenance, management, and other areas as planned over the medium to long term, the performance of the Group may be adversely affected.
||The Group is an R&D-based enterprise and continues to invest in R&D aggressively. However, depending on the R&D themes, the development period could be longer, and the costs higher, than initially planned. If such circumstances were to occur, the performance of the Group may be adversely affected.
|Intellectual property rights
||The Group constantly conducts research on the products of other companies, in order to prevent infringements by the Group’s products on material intellectual property rights of third parties, as well as those by third parties’ products on the Group’s intellectual property rights. However, it is difficult for an R&D-based corporate group like the Group to completely avoid the occurrence of intellectual property infringement issues. If such circumstances were to occur, the performance of the Group may be adversely affected.
||The Group recognizes climate change as a key issue for the Group, which operates globally, and is endeavoring to develop environmentally friendly products, taking into account the policies and legal requirements for climate change and the demands of the market. Thus, should these requirements become more stringent than anticipated, leading to increased costs, lost sales opportunities, or a decline in corporate value due to damage to corporate brands, the performance of the Group may be adversely affected. In addition, if extreme weather events such as typhoons and torrential rains, which have been on the rise in recent years due to climate change, or large-scale natural disasters such as earthquakes were to occur, the Group's business activities may be limited and the performance of the Group may be adversely affected.