The Compliance Program was established to ensure that all members of the KING JIM Group can act based on shared standards to realize its Management Philosophy. Based on this Compliance Program, the entire Group is working to promote the compliance system.

＞Please follow this link for the Compliance Program Compliance is often taken for granted in day-to-day operations and corporate activities, but everyone is susceptible to making mistaken decisions or taking the wrong action for a variety of reasons. Even in the unlikely event that a compliance breach occurs, the KING JIM Group can prevent it from escalating into a major risk by swiftly identifying it and taking corrective action.

To accomplish this, it is essential for each individual and department to detect and solve problems at an early stage while they are still minor. Consequently, the Group’s fundamental approach is to (1) correct problems through individual self-checks, and (2) correct problems via self-correcting actions by office organizations and each department.

The Company has appointed the General Manager of the Administration Division as the Chief Compliance Officer, and it has established a Compliance Committee, comprising Directors other than External Directors and external legal counsel, as members. The Compliance Committee is a body that provides fair, impartial, and objective surveys, advice, and decisions on any compliance problems at the KING JIM Group. The Chief Compliance Officer convenes the Compliance Committee as necessary. The Chief Compliance Officer, as the person in charge of all aspects of KING JIM’s compliance, manages the Compliance Program and monitors and supervises the status of compliance.
Moreover, the Auditors are able to audit the compliance status of the entire Group and attend and express their opinions in Compliance Committee meetings, as needed. The KING JIM Group’s compliance system is as follows: The KING JIM Group ensures that the Compliance Program can be viewed at all times to facilitate the understanding, widespread awareness and implementation of the program by all Group members. Furthermore, as part of compliance education, the Group works to improve the awareness of all Group members by conducting regular awareness-building activities through e-learning and internal memos. The KING JIM Group has established the Speak Out System as a mechanism of an internal whistleblowing and other reports. By discovering and properly addressing compliance issues at an early stage while they are still minor, compliance issues can be resolved before they become a serious issue.
The Speak Out System can be used by all KING JIM Group members if they witness an action that could lead to a compliance problem, and it is impossible or impracticable to conduct individual self-checks or self-correcting actions by office organizations or departments. The system allows Group members to raise the alarm by informing the Company of a situation from a public-interest perspective.
The system’s contact point is an external Speak Out System lawyer.
The name of the whistleblower isn’t released, and the system can be used even if anonymously. Besides, according to the Work Regulations for Employees and Speak Out System Operation Regulations, the Company will not treat whistleblowers unfavorably for consulting and reporting to the Speak Out System Lawyer.
Harassment consulting desks have been set up at each Group company, and they take appropriate measures to resolve harassment issues in accordance with internal rules.

＞Further information on the prevention of harassment Number of reports (KING JIM non-consolidated basis) in the fiscal year ended June 2025

	Speak Out System	Harassment consulting desks
Number of reports	0	2

The KING JIM Group complies with the tax-related laws, regulations, and other rules in the countries where its Group companies are located and meets its tax obligations. In addition, the Group understands and respects the legislative intent and spirit behind those rules.

The KING JIM Group endeavors to identify and reduce potential risks concerning transfer pricing for inter-Group transactions between KING JIM and its overseas Group companies. Transfer prices are set following a review conducted by the Risk Management Committee, considering international tax standards (OECD Transfer Pricing Guidelines, etc.).
In addition, disclosed information is confirmed through external audits.

The KING JIM Group cultivates satisfactory and sound relationships with the tax authorities of each country and answers with honesty and integrity to their requests in tax audits and other instances. In circumstances where there are differences of opinion with tax authorities, the Group endeavors to engage in dialogue with them and resolve issues in accordance with tax-related laws, regulations, and other rules. Risk Factors The Company constantly manages risks by identifying risk factors that may affect the KING JIM Group’s business activities and assigning relevant departments to each risk factor.
Each relevant department monitors the threat level of its assigned risks, and in cases where events deemed significant to management could occur, each relevant department immediately reports the matter to the Risk Management Committee via the officer in charge, while the Risk Management Committee discusses and approves response measures. Once a year, each relevant department reports to the Board of Directors on risk avoidance, countermeasures, management status and other matters. In addition, risk factors are revised in response to changes in the environment surrounding the KING JIM Group’s business activities, as well as the magnitude of their impact, and the frequency of occurrence.

Business strategy risk	External environment risk	Legal risk	Natural disaster and related risk	Infrastructure and related risk
Research and development investment	Price fluctuations in raw materials, etc.	Protection of intellectual property	Natural disasters / Pandemics	Information security
Inventories	International situations	Product liability
Ｍ＆Ａ	Foreign exchange fluctuations
	Securing human resources

* The risk categories are determined at the discretion of the Company.

---

Business and Other Risks Among the matters concerning business, financial and other conditions presented in the Annual Securities Report for the fiscal year ended June 2025 (the 77th Term), matters that could have a significant impact on investor decisions include the following.
Forward-looking statements in this document are based on the judgment of the KING JIM Group as of the close of the fiscal year ended June 2025.

Risk Factors	Description
Research and development investment	In the KING JIM Group’s business environment, the Group’s mainstay market for filing tools is shrinking as progress on digitalization encourages consumers to go paperless. In response to these changes, the Group is actively investing in developing new products suitable for diverse work styles and lifestyles. However, there is no assurance that the market will accept all of this development investment, and the outcomes could affect the Group’s operating results. In addressing risks, the Group will seek to establish a third pillar alongside KING FILE and TEPRA by focusing on developing products that create new markets, products to ensure the safety of workers, and environmentally friendly products from the perspective of sustainability.
Protection of intellectual property	The KING JIM Group has developed a system to prevent infringement of intellectual property rights of third parties. The Group has also established a system to protect its intellectual property rights so that the form of products sold by the Group shall not be imitated or otherwise compromised. However, a third party may file a lawsuit for infringement of intellectual property rights or imitate the form of a product. Such a situation may affect the Group’s performance. To address risks, with regard to commercialization, the KING JIM Group investigates the intellectual property rights of third parties, and the Group has developed a system to respond in the event of lawsuits brought by third parties in cooperation with external attorneys-at-law and patent attorneys. Furthermore, when the Group finds products that are suspected of violating its intellectual property rights, it takes action such as sending a warning message and requesting the suspension of sales or discontinuation of production.
Product liability	The KING JIM Group has established and operates a management system that complies with defined quality management standards. However, there is a possibility that in the event of unforeseen defects that cause harm to customers, customer trust may be lost. Further, while the Group has obtained product liability insurance, there remains a possibility that compensation payments may exceed the amount of insurance coverage. The occurrence of such events may impact the Group’s operating results. In addressing risks, the Group will update its quality management standards as appropriate, establish and maintain a management system that complies with these standards, and thoroughly observe them in our operations.
Price fluctuations in raw materials, etc.	The main raw materials for the KING JIM Group’s products include synthetic resins, paper, steel plates, and semiconductors. Prices for these raw items may fluctuate widely, reflecting crude oil market conditions and global imbalances in supply and demand that cause supply shortages. The occurrence of unforeseen spikes in the prices of crude oil and raw materials or of circumstances that cause difficulties in securing a stable supply of raw materials may impact the Group’s operating results. In addressing risks, the Group implements measures such as sourcing raw materials from multiple suppliers, coordinating closely with suppliers, making use of substitute materials, and achieving cost reductions by improving production efficiency.
International situations	The Group’s products are mainly manufactured overseas, and any fluctuations in economic or political conditions overseas, transportation disruptions caused by war or terrorism, or shutdowns due to the spread of pandemic could make component procurement and manufacturing difficult, which could disrupt the stable supply of products of the Group and impact the operating results of the Group. To mitigate these risks, the Group seeks to diversify the procurement of major products rather than concentrating them in a specific country or region, and also collects information on market trends of components to ensure safety inventory. Furthermore, the Group conducts sales activities globally, particularly in Asia. Unpredictable and sudden political or economic changes, major revisions of laws and regulations, outbreak of terrorism or wars, or disruptions caused by pandemics may affect sales overseas. To mitigate such risks, the Group strives to investigate in advance, understand, and deal with country risks in the countries where the Group conducts sales activities by coordinating with its overseas business departments and overseas subsidiaries. Furthermore, the KING JIM Group pays reasonable taxes in accordance with the taxation laws of various countries. However, additional tax may arise due to differences in a tax authority’s opinion on the Group’s tax returns and other factors, which may affect the Group’s operating results. In addressing risks, particularly transfer pricing tax and other international taxation risks, the Group takes measures that include seeking advice from external experts and preparing transfer pricing tax documentation.
Foreign exchange fluctuations	The KING JIM Group’s products are mainly manufactured outside Japan, and the Group conducts certain foreign-currency-denominated transactions for import and export products, raw materials, and other items. In addition, the Group holds foreign currency-denominated receivables and payables. Therefore, if, significant foreign exchange fluctuations occur, it may impact the Group’s operating results. In addressing risks, the Group engages in foreign exchange forward contract transactions and other transactions.
Inventories	The KING JIM Group implements production planning based on demand forecasts and works to ensure appropriate inventory management. However, instances where sales performance falls significantly short of initial forecasts may occur due to changes in the market environment or where actual events depart from sales forecasts. If a significant drop in product value is caused by factors such as changes in the market environment and product obsolescence, or a net selling value falls below the acquisition cost due to a downturn in profitability, the Group may record a loss on valuation of inventories, which could affect the Group’s operating results. In addressing risks, the Group collects external environmental and operating information appropriately to improve the accuracy of demand forecasts and monitors inventory levels as needed to adjust production.
M&A	The KING JIM Group regards M&A as one of several methods for business expansion, and seriously studies transactions which will contribute sufficiently to the Group’s growth strategy, and transactions which can be expected to produce synergies with the Company’s existing business. In deciding whether to proceed with a transaction, the Group conducts due diligence on aspects of the target business including its main products and business competitiveness, strengths and weaknesses, financial details, contractual relationships, and patents and other litigation-related matters. However, in the event of contingent, unrecognized and other liabilities that could not be discovered through due diligence, or where business development cannot proceed as planned due to changes in the market environment or other factors, the investment in the target company may be impaired and the Group’s operating results may be affected. In addressing risks, when considering an M&A deal, the KING JIM Group performs extensive due diligence thoroughly to prevent any omissions, and discusses and verifies the business development and the profit-and-loss plan after management integration to make decisions. Furthermore, in order to realize synergy effects at an early stage, the Group has established an in-house committee spanning various departments to facilitate the management integration.
Information Security	The KING JIM Group has a risk of information leakage, tampering, or other incidents caused by cyber-attacks and unauthorized access from outside the Group, software and IT equipment defects, and unauthorized removal of information from inside the Group. Such events, if they occur, may hamper business operations, and have an impact on the Group’s operating results. In addressing risks, the Group has installed anti-virus software and has conducted employee training and awareness-building activities to prevent the loss of vital information, leaks of personal or confidential information, and other such incidents. Furthermore, the Group has set forth rules for the use of external storage as a measure to prevent unauthorized removal of information from inside the Group.
Natural disasters / Pandemics	In the event the Group’s business activities are interrupted or facilities damaged due to natural disasters beyond the scope of assumptions, the product supply may halt, which may affect the Group’s performance. In addition, recovery from these events may involve significant costs. To mitigate such risks, the Group has established the KING JIM Group Crisis Management Regulations, the Detailed Regulations on Crisis Management, and the Action Manual for Emergency Disasters. In the event the Group is informed that a crisis has occurred or is imminent, the Group takes immediate countermeasures in accordance with the crisis management system stipulated in the regulations. In addition, as a measure against pandemics, the Group has devised a pandemics response manual and have established telework and staggered work shift systems.
Securing human resources	The KING JIM Group regards its employees as its most valuable asset and a driving force for growth. However, competition to secure talent pool is intensifying, and with a shrinking workforce, the Group may not be able to hire and retain the necessary human resources. Furthermore, rapid depreciation of the yen and sudden changes in the economy may also force the Group to curtail the number of hires, which may impact the Group’s performance. To address this risk, the Group is working to promote DE&I by providing educational opportunities to maximize the knowledge and abilities of individuals, as well as fair evaluation and performance-based compensation, and a work system that allows flexible working styles such as telework. In addition, the Group conducts engagement surveys to clarify organizational issues and works towards improving them.