MIT Holdings CO.,LTD.

In FY2025 (ending November 2025), Hitachi Social Information Services, Ltd. accounted for 15.3% of the Group's total sales, resulting in a high degree of dependence on a single customer. Changes in the business condition or business policy of this customer could have a direct impact on the Group's financial position and business performance. As a countermeasure, the Group is focusing on strengthening relationships with existing customers and acquiring new customers.

If IT investment by client companies is curtailed due to changes in the domestic and overseas economic environment, recession, the impact of monetary policy, or other factors, this could affect the Group's business performance. While the Group recognizes that IT demand driven by DX promotion and core system renewal remains solid over the medium to long term, there is a risk that a delay in investment timing or a reduction in project scale could lead to short-term deterioration in business performance.

Project profitability may deteriorate due to additional costs arising from delivery delays or increased work hours, or due to additional costs associated with addressing defects after delivery. When profitability deteriorates, there is also a risk of recording a provision for loss on order received, as well as a risk of over- or under-recognition of sales in cases where progress tracking is inadequate. As countermeasures, the Group holds project assessment meetings, thoroughly manages work progress and quality, and clarifies sales recognition rules, among other measures.

The recruitment and development of excellent personnel, such as engineers, systems engineers, and managers, is fundamental to business continuity, and difficulty in recruitment or attrition of personnel could affect the Group's financial position and business performance. The Group strives to reduce this risk by promoting recruitment of new graduates, mid-career hires, and inexperienced personnel, enhancing training programs, and developing a workplace environment where diverse personnel can thrive.

Targeted attacks, ransomware, and other threats are becoming increasingly sophisticated and elaborate, and if a serious information leak or system outage occurs, this could result in loss of social credibility and substantial response costs. The Group strives to build a highly secure information systems framework through the development of management regulations and guidelines based on its information security policy, employee training, and the introduction of firewalls and antivirus software.

Against a backdrop of shortages of systems engineers and rising labor costs, there is an industry-wide trend toward cost reduction through offshore development, and intensifying price competition is expected to continue for the time being. Further intensification of price competition could affect the Group's business performance, and the Group is addressing this by providing high-value-added services and utilizing nearshore development.

The Group is subject to relevant laws and regulations, including the Worker Dispatching Act, the Employment Security Act, the Act on Proper Contracting of Business, the Personal Information Protection Act, the Copyright Act, and the Unfair Competition Prevention Act, and changes in legal regulations or violations of laws and regulations could restrict business activities or damage credibility, thereby affecting business performance. The Group strives to reduce this risk through the formulation of compliance regulations and risk management regulations, training and education for all officers and employees, and the establishment of internal and external whistleblowing contact points.

The Group conducts business through System IO Co., Ltd. (license valid until June 30, 2026) and APS Co., Ltd. (license valid until May 31, 2026), which have obtained worker dispatching business licenses. If a serious violation of laws and regulations occurs, there is a possibility that the license could be revoked or a business suspension order issued. The Group strives to prevent recurrence through the establishment of a checking system when concluding worker dispatch agreements and business contracting agreements, as well as regular compliance training, and no such grounds have arisen to date.

In M&A transactions aimed at expanding business scale and diversifying revenue sources, if the anticipated synergies cannot be realized due to changes in the target company's business environment or the loss of customers or key employees, this could result in impairment of goodwill and other assets, affecting the Group's financial position and business performance. The Group strives to avoid and reduce this risk through third-party evaluation and due diligence by legal and accounting experts during the deliberation stage, and through the implementation of appropriate PMI (post-merger integration) after M&A transactions.

If human or physical damage or computer network failures occur due to natural disasters such as earthquakes or storm and flood damage, pandemics caused by infectious diseases, or war or terrorism, normal business operations may become impossible, which could affect the Group's financial position and business performance. The Group has formulated a business continuity plan (BCP) and has established a risk management system that anticipates the occurrence of natural disasters and other events.