MATCHING SERVICE JAPAN CO.,LTD.

If companies restrain or freeze hiring due to a stagnation in the domestic economy, this could lead to a decrease in job openings and a decline in the effective ratio of job openings to applicants, potentially affecting the Company's business results and financial condition. There are multiple complex macro uncertainty factors, including Middle East geopolitical risk, inflation, exchange rate fluctuations, rising interest rates, and industrial structure changes due to generative AI. As countermeasures, the Company is promoting deeper penetration and expansion of market share in its existing core businesses, leveraging its specialized expertise in administrative departments, as well as the creation of new businesses and business diversification.

The Company holds a large amount of personal information on job seekers, business partners, employees, and others, and if leakage, falsification, or unauthorized use occurs, this could result in claims for damages, loss of credibility, brand damage, and other consequences that could have a material impact on the business. Since July 2002, the Company has continuously formulated and operated personal information protection regulations in compliance with JIS Q 15001 as a licensed Privacy Mark user. The Risk and Compliance Committee formulates and operates the nature of risks and countermeasures, striving to reduce risk.

The Company's core Recruitment Placement Business requires a license from the Minister of Health, Labour and Welfare as a fee-charging employment placement business under the Employment Security Act, and the Company has obtained and renewed this license for the period from June 1, 2026 to May 31, 2031. If legal amendments significantly unfavorable to the Company are implemented in the future, there is a risk of license revocation, business suspension, or being subject to a business improvement order. The risk management system comprehensively visualizes risks related to relevant laws and regulations, and the Risk and Compliance Committee examines countermeasures and conducts monitoring.

As ESG investment becomes mainstream, insufficient sustainability response to environmental issues, labor environment, human rights issues, and other matters could result in a loss of social credibility and a decline in corporate value and fundraising ability. The Company has established a Sustainability Committee chaired by the Representative Director, which holds regular quarterly meetings to examine, assess risk, and monitor important issues related to ESG and the SDGs. Initiatives, including climate-related issues, are submitted to the Board of Directors, which promotes related policies and countermeasures.

The Company utilizes computer and network systems to manage job seeker information and business partner company information, and if system trouble occurs due to a natural disaster such as an earthquake exceeding expectations, normal business activities could be hindered, potentially affecting business results and financial condition. The Company has formulated a Business Continuity Plan (BCP) and established an emergency crisis management system, data backup system, and recovery procedures. The Company continues to develop and operate a monitoring system to confirm the effectiveness of countermeasures.

At overseas subsidiaries, there is country risk arising from changes in asset value due to political and economic changes in the country concerned, as well as geopolitical risk that threatens employees' lives and assets due to conflicts or terrorism. Risks related to information security, compliance, sustainability, natural disasters, and other matters could also occur in a complex manner at overseas subsidiaries. The Company has established a crisis management system that takes into account business continuity and information management, gathering information from government agencies and other relevant bodies, with the Risk and Compliance Committee conducting evaluations and countermeasures.

The rapid rise of generative AI (artificial intelligence) is bringing about changes in the industrial structure and labor market, which could affect the demand structure of the Recruitment Placement Business and the needs of job seekers and hiring companies. In particular, if demand for specialized personnel focused on administrative departments changes, there are concerns about the impact on the Company's business model. As a countermeasure, the Company is promoting the creation of new businesses and diversification of business areas, aiming to build a management foundation capable of responding to change.