TOEI COMPANY, LTD.

In the event of natural disasters such as earthquakes, typhoons, and tsunamis, or fires, power outages, and accidents, important facilities such as movie theaters, theme parks, hotels, and studios may suffer human injuries to customers and employees and damage to equipment, potentially disrupting service provision and business operations. As countermeasures, the Company has established a business continuity plan (BCP), introduced a safety confirmation system, conducts regular disaster drills, and maintains stockpiles of supplies.

Due to the proliferation of social media, if inappropriate posts by employees, misconduct by external parties, or defamation by third parties occur, the brand image and social credibility of the Group may be damaged, potentially affecting business performance. The Company has re-evaluated the severity of the impact of information dissemination power on brand value and has raised the priority of countermeasures to "high," promoting the strengthening of the social media monitoring system, regular in-house seminars, and the establishment of a crisis management system.

Long working hours among employees can lead not only to health problems and mental and physical disorders, but also, in the event of serious accidents such as industrial accidents, to economic losses such as compensation payments and a loss of social credibility. In addition to promoting work-style reforms, introducing remote work, encouraging the use of paid leave, and regularly conducting engagement surveys, the Company is working to improve occupational health and safety standards based on the "Toei Group Human Rights Policy."

In the event of cyberattacks, unauthorized access, or large-scale system failures, in addition to the suspension of services and operations, important data such as personal information and video content may be leaked, tampered with, or misused, potentially having a significant impact on business activities, social credibility, and business performance. The Company is taking measures through the establishment of an information security promotion system, strengthening of internal network monitoring functions, implementation of access restrictions, and employee awareness activities.

If a large amount of personal information obtained from customers and others is improperly handled by employees or outside contractors, resulting in external leakage or unauthorized use, this could lead to administrative dispositions such as business suspension orders and fines from authorities, lawsuits filed by customers and affiliated companies, and damage to brand image. The Company has established and thoroughly implemented rules and guidelines regarding the handling of personal information, and conducts regular employee training and maintains an internal management system.

Infringement of intellectual property rights through pirated and counterfeit goods actually occurs, and particularly overseas and on the internet, sufficient rights protection may not be available due to issues with legal regulations. In addition, if a lawsuit is filed by a third party, the Company may be obligated to pay damages or be subject to an injunction against the use of intellectual property rights, potentially affecting business performance and financial condition. The Company is strengthening protection measures for copyrights, trademarks, and other rights, thoroughly implementing legal measures when infringement occurs, and regularly informing employees.

If harassment or misconduct by officers and employees, or lawsuits related to the employment environment occur, social credibility and brand image may be damaged. In addition to establishing a Compliance Committee, thoroughly disseminating the "Toei Compliance Guidelines," and operating an internal reporting hotline, the Company is working to instill legal compliance and corporate ethics based on the "Toei Group Human Rights Policy."

Revenue may decline due to delays in responding to the competitive environment and technological innovation, the ending of existing IP source material or the loss of rights to use new IP, and the difficulty of predicting box office performance for theatrical films. The Company is working to reduce risk by promoting the use of digital technology and virtual production technology through Tsuzuken Institute, selecting projects based on rigorous box office revenue forecasts, and planning and producing content across diverse channels.

If sole proprietors and small and medium-sized businesses to which video production and other work is outsourced cease operations or if contract deficiencies occur, this could disrupt business continuity and damage brand image due to a decline in the quality of services and works provided. The Company has established the "Toei Group Business Partner Policy" and is working to strengthen the selection and management system for business partners, optimize contract content, and reduce risk across the entire supply chain.

If the declining working population due to the falling birthrate and aging population, and delays in improving the workplace environment, reduce competitive advantage in acquiring talent, making recruitment and retention difficult, this could lead to increased personnel costs including recruitment costs and business stagnation due to staff shortages, potentially affecting business continuity. The Company aims to secure a stable workforce through the continuous development of specialized personnel, the use of engagement surveys, the promotion of diversity in hiring, and the diversification of recruitment channels.