SEINO HOLDINGS CO.,LTD.

Amendments to the Trucking Business Act, the Freight Forwarding Business Act, and other related laws and regulations concerning warehousing, customs brokerage, air transportation agency business, etc., may result in changes to freight rates received, business areas, and business operations. In the Automobile Sales Business as well, amendments to the Road Vehicles Act, the Act on Recovery and Destruction of Fluorocarbons, the Automobile Recycling Act, and other laws may change the scope and frequency of work, potentially affecting business performance. No specific countermeasures by the Group are explicitly disclosed in the annual securities report.

If a serious accident occurs during the operation of route vehicles or the driving of pickup and delivery trucks, it could affect the performance of the Transportation Business due to damages and other costs. As countermeasures, the Group is fostering a safety-oriented culture through both hardware and software measures, including the introduction of vehicles equipped with the latest safety features, new employee training and the development of safety promotion instructors, and education utilizing drive recorders.

The Transportation Business uses a large number of vehicles, and if environmental regulations are implemented beyond the Group's expectations, this could affect business performance. Currently, the Group is pursuing voluntary environmental measures such as the introduction of low-emission vehicles, use of fuel-efficient oils, and promotion of eco-driving, but there is a risk that additional costs may arise depending on the extent of regulatory tightening.

The Transportation Business consumes large quantities of fuel, and depending on crude oil price trends, fuel costs could rise sharply, increasing transportation costs. As countermeasures, the Group works to minimize the impact through the collection of fuel surcharges linked to crude oil price fluctuations and the promotion of modal shift.

If disasters such as earthquakes or power outages cause transportation route disruptions or system shutdowns, this could affect the performance of the Transportation Business. In addition, a pandemic of infectious disease could affect business activities and the supply chain, and is expected to reduce sales due to the resulting economic slowdown, potentially affecting business performance and financial condition. As countermeasures, the Group is working on developing disaster response manuals and building backup systems.

In the Automobile Sales Business, Toyota Corolla Nets Gifu is almost entirely dependent on Toyota Motor Corporation for procurement, while Gifu Hino Motors and Shiga Hino Motors are almost entirely dependent on Hino Motors for procurement. If production by Toyota Motor Corporation or Hino Motors continuously declines or stops due to a disaster, accident, or other cause, this could directly affect the performance of the Automobile Sales Business.

Since the Information-Related Services business handles confidential and important customer information, malfunctions in services, program defects, computer virus infections, unauthorized external intrusions, and other issues could lead to leakage of customer information or data loss. If such events occur, they could disrupt the business operations of customers and the Group, and could affect business performance through recovery costs, damages, and other expenses. As countermeasures, the Group is implementing system enhancements and strengthening security.

The Group handles customer information in logistics operations outsourcing, information processing outsourcing, merchandise sales, and other businesses, and if information is leaked externally or data is lost, this could lead to a decline in social credibility and claims for damages. As countermeasures, the Group promotes thorough compliance and personal information management through internal education, but this risk cannot be completely eliminated.

Revenue from truck transportation involves a large volume of daily transactions, and all processing, including complex freight rate calculations for each customer, depends on IT systems. If deficiencies or failures occur in the systems or related structures, this could disrupt business operations and also have a material impact on financial reporting. As countermeasures, the Group has established policies and rules for IT systems overall, as well as a framework for verifying the proper operation and management of the systems.

Against the backdrop of a declining domestic working-age population due to the falling birthrate and aging population, securing personnel such as drivers for the Transportation Business and mechanics for the Automobile Sales Business has become an important challenge. If recruitment does not proceed as planned, this could affect business performance through increased recruitment and retention costs, as well as increased expenses for temporary staff and outsourcing. As countermeasures, the Group is promoting enhanced recruitment, training, support for obtaining licenses, work style reforms, and measures to improve employee satisfaction (ES).