MOS FOOD SERVICES, INC.

If a food safety incident occurs, such as the contamination of hazardous foreign objects or the outbreak of food poisoning, the Company may be subject to sanctions such as business suspension, and food safety incidents at plants could disrupt the supply of ingredients to stores, potentially causing a material impact on business performance. As this could also lead to a loss of social trust and a decline in corporate value, it has been designated as a material risk. As a countermeasure, the Company has established the "MOS Food Safety Standards," which incorporate HACCP concepts and comply with ISO22000, and conducts monitoring through store sanitation audits held twice a year and weekly food safety meetings.

If incidents, accidents, compliance violations, etc. occur at stores, this may create issues in the safety management of customers and employees, and may also make it difficult to continue operations, potentially affecting business performance. This includes the occurrence of natural disasters in regions where stores are concentrated and personal information leaks, and there are also concerns about the impact of reputational damage. As a countermeasure, the Company conducts regular safety management inspections at all stores and provides risk management education to employees, and in the current fiscal year under review, conducted an all-store simultaneous inspection to prevent the recurrence of a carbon monoxide poisoning incident.

If violations of laws such as the Labor Standards Act, harassment, or deviations from work regulations occur, this may lead to a decline in employees' sense of job satisfaction and motivation, potentially resulting in the outflow of talented personnel or difficulty securing them in a tight labor market. Labor shortages, rising labor costs, and declining labor productivity could affect business performance. As a countermeasure, the Company has positioned "talent development and support" as a materiality issue, continuing a 100% return-to-work rate for women after childcare leave, promoting the uptake of childcare leave by men, and working on diversity promotion initiatives such as accepting holders of specified skilled worker qualifications.

If misconduct by management or employees, or violations of laws and ordinances occur, this may lead to the impairment or loss of social trust, potentially affecting business performance. If various regulations, including the Food Sanitation Act as well as environmental, facility, and labor-related regulations, are changed or strengthened, an increase in response costs is also expected. As a countermeasure, the Company holds an annual "Reading Day" for all employees to review the "Mos Group Code of Conduct," and conducts harassment prevention training for managers and compliance e-learning for general employees, which all target employees complete.

If a situation arises in which ingredients, packaging materials, kitchen equipment, etc. cannot be supplied to franchisees as planned due to natural disasters, pandemics, regional conflicts, soaring raw material prices or shortages, cyberattacks, etc., this may lead to the suspension of sales of certain products or store closures, potentially affecting business performance. Since the Company Group supplies nearly all store operating materials to franchisees, the impact of a supply disruption would be extensive. As a countermeasure, the Company has established multiple supply routes through purchasing from multiple suppliers and production at multiple locations, secured several months' worth of inventory for key ingredients, diversified the production areas for fresh vegetables, and built a system to maintain supply continuity in the event of a headquarters function failure.

If personal information or confidential information is leaked due to a cyberattack or unforeseen accident, or if an information system failure causes a suspension of ingredient supply or a stoppage of payment or ordering services, this is expected to result not only in an impact on business performance but also a loss of social trust and significant impairment of corporate value. This includes the risk of cyberattacks targeting the entire supply chain. As a countermeasure, the Company has established a Chief Information Security Officer, and conducts e-learning and targeted attack drill emails twice a year, regular third-party audits, and implements ransomware countermeasures, strengthened access controls, and backup system development.

If incidents, accidents, or compliance violations occur at overseas stores, or if country risk—such as changes in the political situation, economy, or regulations of the countries or surrounding regions in which the Company operates—or partner risk materializes, this may affect the performance of the overseas business. A characteristic feature is that risks specific to each country and region act in combination. Although recognized as a key risk, it has not been designated as a material risk in the Annual Securities Report, and continues to be monitored.

If trouble, friction, or litigation occurs between the head office and franchisees, or among franchisees, this may impede business operations. A decline in the management motivation of aging franchise owners and a stagnation in business succession may affect the maintenance and expansion of the number of stores. For the Company Group, which is centered on the franchise business, maintaining good relationships with franchisees is a risk area that forms the very foundation of its business base.

If human rights issues such as forced labor, child labor, harassment, discrimination, or privacy violations occur within the Company's own business or supply chain, this may lead to damage to its social reputation and brand image. In light of the recent trend of strengthening international regulations related to human rights due diligence, this has been recognized as a key risk. Human rights risk management covering the entire supply chain is required.

If climate change leads to an increased risk in procuring agricultural products or significant food loss, or if it becomes necessary to respond to the enactment or revision of environment-related laws and ordinances, this may affect business performance through rising procurement costs and increased response costs. For a food service business that relies on an extensive supply chain for ingredient procurement, climate change can become a mid- to long-term business continuity risk. It is recognized as a key risk, and is being managed from both the perspective of increased procurement risk and regulatory compliance.