CSS Holdings,Ltd.

The Group operates its steward management business under a contracted work arrangement, and in addition to responsibility for completion of contracted work and tasks, it also bears liability to client companies for damages such as industrial accidents or property damage. Although measures such as insurance coverage have been implemented, if costs exceeding expectations arise, this may affect business performance.

The Group's main clients are in the hotel and restaurant industries, and if the business environment in these industries deteriorates, this could lead to demands from clients for reduced contract amounts through internal cost reviews. Furthermore, if individual clients become subject to corporate reorganization proceedings or similar measures, difficulties in collecting receivables or inability to continue contracts may occur, potentially having a material impact on business performance.

The Company maintains its position as the leading company in the steward business, but competitive relationships with other companies in the same industry exist. If competition intensifies going forward due to changes or relaxation of legal regulations related to employment forms, this may affect the Group's business performance.

The Steward Business segment and Food Service Business segment employ a large workforce, and if the necessary full-time employees or part-time workers cannot be hired, or if turnover rates rise due to changes in legal regulations, business operations may be disrupted, affecting performance. As a countermeasure, the Group has consolidated human resources, labor management, recruitment, and training functions at CSS Business Support Co., Ltd. to strengthen human resource management.

The Group holds approximately 10,000 items of personal information relating to employees, part-time and temporary workers, and has established a management system in line with the Personal Information Protection Act and the Individual Number (My Number) Act. Electronic information is protected through password authentication and paper records are kept under lock and key, with regular checks and surprise inspections conducted; however, if information is leaked for any reason, this could lead to a loss of trust and affect business performance.

The catering management business is subject to regulations such as the Food Sanitation Act, and the possibility of food poisoning or similar incidents cannot be completely ruled out. Should food poisoning occur and a client be unable to continue its operations, the contract with the Group could also be terminated, affecting business performance. As countermeasures, the Group has established a dedicated hygiene management department, conducts regular and surprise intestinal bacteria testing and bacterial culture testing, and thoroughly enforces accident prevention based on hygiene management manuals.

The Group's contracted work business is subject to regulation under laws related to the Labor Standards Act, and if there are amendments to or changes in interpretation of current laws and regulations, or the enactment of new regulations, business operations may be affected. Since changes in laws and regulations may also affect the competitive environment, this is a risk that requires ongoing monitoring.

A serious pandemic such as COVID-19 could have a significant impact on social and economic activity, and through a sharp decline in demand from the hotel and restaurant industries, which are the Group's main clients, this may affect the Group's business performance. This is recognized as a highly uncertain risk, and based on experience from the COVID-19 pandemic, the Group is working to minimize impact through expanding client value and designing its portfolio.

If a large-scale natural disaster such as an earthquake or typhoon occurs and worsens the financial condition of business partners, this may affect the Group's business performance. Although emergency response systems have been established both domestically and internationally, there are limits to responding to natural disasters that exceed expected scope, and this risk may increase as climate change progresses.

The Group has built a governance structure centered on the Risk Management Office, and aims to achieve sustainability across the entire Group by consolidating functions at CSS Business Support Co., Ltd. If management and control of business operations at each Group company do not function appropriately, this may affect the Group's overall performance and credibility.