KYOSHIN CO.,LTD.

In each business including the Tutoring School, Childcare, Nursing Care, and Food Service businesses, if an incident threatening the safety of customers or employees occurs (such as food poisoning, allergen contamination, or intrusion by suspicious persons), it may have a significant impact on business performance due to a decline in social credibility. The Group has installed electronic lock systems and monitoring cameras at all school facilities, established various manuals and conducted training, and set up a mental health care system for employees through partnerships with external consultation services.

The Group holds a large amount of personal information across multiple businesses, including tutoring schools, childcare, and nursing care, and if an information leak occurs for any reason, it may impact business performance through a decline in social credibility. The Group strives to prevent leaks in advance through thorough management based on its customer information protection policy and audits of each location conducted by the internal audit department.

In the overseas Tutoring School Business and Language-Related Business, changes in laws and tax systems in each country, natural disasters, changes in political and economic conditions, and the occurrence of war, conflict, or terrorism may hinder business continuity. The Group strives to gather information on trends in each country and region where it has operations, but if such events materialize, they may impact business performance and other results.

If a large-scale earthquake, flood, or other natural disaster, fire, or large-scale infectious disease outbreak occurs, it may become difficult for the Group, whose business centers on face-to-face services, to continue operations. The Group has responded by ensuring the safety of facilities and equipment, disseminating disaster manuals and conducting drills, establishing an employee safety confirmation system, stockpiling emergency supplies, and developing online services in some businesses; however, in the event of a situation exceeding these preparations, business performance and other results may be affected.

If national or local government childcare support policies change, laws related to the establishment and operation of nursery schools are revised, or subsidy systems are reviewed, the Group's childcare business activities may be constrained. In addition, if licenses such as those for accredited nursery schools or Tokyo Metropolitan Certified Nursery Schools are revoked, this would have a direct impact on business performance and other results. The Group strives for appropriate business management, but its ability to respond to regulatory change risk depends largely on the external environment.

In the Japanese language education business and overseas language-related business, if immigration authorities and national regulations regarding the acceptance of foreign nationals are established or revised, the Group may be unable to accept international students as planned, constraining its language education activities. If unexpected events such as the COVID-19 pandemic trigger entry restrictions or movement restriction measures, similar risks may materialize and impact business performance and other results.

The nursing care service business is strongly affected by the Nursing Care Insurance Act, and the enactment or revision of laws may constrain business activities. If, for any reason, a designation is revoked or suspended, this would have a direct impact on business performance and other results. Affiliated companies strive for appropriate business management by developing manuals and enhancing training, but the risk of regulatory revision is subject to external factors.

Securing personnel, including qualified professionals such as nursery teachers, care managers, and certified care workers, is also a legal obligation, and if the Group is unable to secure and develop personnel as planned due to sudden changes in the hiring environment, this may hinder the execution of store opening plans and service provision, impacting business performance and other results. The Group responds through recruitment activities based on staffing plans, enhanced training by job type and level, and its own leadership development program, but there is a risk that labor market tightness will continue.

The Group actively pursues M&A as part of its growth strategy and holds goodwill and subsidiary shares as a result; if an acquired subsidiary underperforms, this may lead to goodwill impairment or devaluation of subsidiary shares, impacting business performance and other results. In addition, regarding tangible fixed assets arising from capital investment such as the establishment of new locations, if it is determined that the invested amount cannot be recovered in the future, an impairment of fixed assets will be recognized.

In the Tutoring School Business and Language-Related Business, the number of students fluctuates seasonally due to enrollment and graduation, with the start of the new school year in spring being the period with the fewest students and thus the most critical time for customer acquisition; if unexpected events occur during this period, full-year business performance and other results may be affected. In addition, if significant changes in the competitive environment occur or property acquisition does not proceed as planned, store opening plans may be changed, impacting business performance and other results; the Group addresses this through medium- to long-term store opening plans and property selection based on marketing data.