KIMURA UNITY CO.,LTD.

The Group positions "human resources" as its most important management resource and is promoting more active new graduate and mid-career hiring as well as enhanced education and training systems. However, competition for excellent human resources is intense, and if recruitment and development do not proceed as planned, this could significantly affect business development, performance, and growth prospects. The Group is working to reduce this risk through initiatives such as restructuring the human resource development system to enable non-regular employees to thrive as well.

Centered on the SQ Management Department, the Group works to prevent losses in advance and manage incidents when they occur through the "Safety and Health Meeting," "Company-wide Quality Meeting," "Safety and Health Committee," and "Quality Committee." Should a serious safety or quality problem occur, it could result in substantial costs and significantly affect the company's reputation, potentially having an adverse impact on business performance and financial condition. Although every effort is made to ensure thorough quality control, it is difficult to completely eliminate this risk.

Prices of raw materials and services are rising across the Group's businesses, making higher value-added offerings, passing costs on to sales prices, and cost reduction important challenges. Amid expectations of further price increases going forward, the Group plans to strengthen its cost response capabilities and implement measures to improve quality and productivity, but if excessive price increases continue, this could affect business performance.

The Group is subject to a wide range of laws and regulations across its businesses, including the Warehousing Business Act and the Act on Consignment Freight Forwarding Business for the Logistics Services Business, the Road Vehicles Act and the Insurance Business Act for the Mobility Services Business, and the Worker Dispatching Act for the Human Resources Services Business. Amendments to or tightening of laws, or the introduction of new regulations, could force increased business costs or operational changes, and should any legal violation occur, this could affect business performance and financial condition through administrative sanctions, revocation of licenses and permits, or loss of social credibility. The Group strives to ensure thorough legal compliance through compliance training and the development of internal systems.

Sales to Toyota Motor Corporation account for 22.9% of the reporting company's total sales on a non-consolidated basis, and 41.3% for the Toyota Motor Group as a whole (FY2026 (ending March 2026)), reflecting a high degree of dependence on a specific business partner. Changes in Toyota Motor Corporation's procurement policies could directly affect the Group's financial condition and business performance. The Group is working to reduce this dependence by expanding each business and promoting the development of new business formats and domestic and overseas expansion.

The Group operates a total of 11 subsidiaries and joint venture companies in the United States, China, Brazil, Thailand, and Mexico, and is inherently exposed to country risks such as unexpected changes in laws and regulations, political and security instability, changes in the employment environment, and terrorism or war. Should these risks materialize, they could significantly affect the continuity of overseas operations and profitability.

The Group's main business sites are concentrated in Aichi Prefecture, and in the event of a large-scale earthquake such as a Nankai Trough megaquake, facility and equipment damage, harm to employees, and disruption of the logistics network could cause significant disruption to business continuity. The Group has formulated a BCP and implements earthquake-resistance measures, safety confirmation drills, evacuation drills, and communication drills using satellite phones, but even with these measures, it may not be possible to completely avoid the impact of a large-scale disaster.

In the course of handling business partners' personal information and confidential business information, there is a risk that cyberattacks, unauthorized access, computer virus infections, or system failures could lead to the leakage, loss, or falsification of personal information or confidential information. Should such incidents occur, they could significantly affect business performance and financial condition through damages claims, guidance or sanctions from regulatory authorities, or loss of business opportunities due to diminished credibility. The Group strives to strengthen its management system through the development of information management regulations, employee training, and the implementation of information security measures.

The Group conducts impairment testing on tangible and intangible fixed assets every quarter and appropriately recognizes impairment losses on assets as necessary. However, if estimated future cash flows decline due to future changes in the business environment, additional impairment losses could be recognized, affecting financial condition and business results.

The Group faces both physical risks from the intensification of wind and flood damage and other disasters, as well as transition risks associated with the shift to a decarbonized society, including stricter regulations, technological innovation, and changes in the business environment. The Group has established a Sustainability Committee chaired by the President and Representative Director, and is promoting the renewal of equipment with higher environmental performance, energy conservation, and the introduction of renewable energy, but the intensification of natural disasters and increased response costs due to stricter environmental regulations could affect business performance and financial condition.