Musashino Kogyo Co., Ltd.

In the Movie Business, box office performance is significantly affected by the drawing power of the films screened. As the preferences of moviegoers diversify, program scheduling that takes into account each theater's location and characteristics has become an important issue. In the movie distribution business as well, if the release status or distribution results of films deviate from plans, this may affect business results and financial condition. The Company seeks to reduce this risk through the selection of films suited to drawing power and the atmosphere of each theater.

If natural disasters such as earthquakes and typhoons, or fires and accidents occur, damage may be caused to facilities in the Movie Business, Real Estate Business, Driving School Business, Trading Business, and other businesses, which may affect business results and financial condition through human casualties and impacts on business continuity. The Company addresses this by prioritizing the safety of customers and employees, and by establishing fire prevention and disaster management systems, including the implementation of fire prevention and disaster drills.

The Group's businesses mainly target individual customers in each segment, and if a slowdown in consumption due to economic downturn or other factors continues, this may affect business results and financial condition. In addition, the Driving School Business also faces the risk of increased fuel costs due to soaring crude oil prices. The Company aims to minimize the impact through financial stabilization by segment and balanced management.

In the Real Estate Leasing Business, if tenants vacate properties, this may affect the business through a decrease in rental income. In addition, there are risks such as increased maintenance costs due to the aging of facilities, the financial burden of new capital investment, damage from natural disasters, and a decline in creditworthiness due to non-conformity of leased properties with contracts. The Company implements early countermeasures by strengthening property management and closely monitoring tenant trends.

Securing and developing human resources is essential for the sustainable growth of the Group; however, if it becomes difficult to secure the necessary personnel or if labor costs rise sharply, this may affect business results. The Company strives to create a comfortable working environment for employees through appropriate labor management and review of personnel systems, while also securing human resources through flexible recruitment activities.

The spread of infectious diseases may affect business activities in the Movie Business, Real Estate Business, Driving School Business, Trading Business, and other businesses through the suppression of personal consumption and requests for business suspension from local governments. The Company is responding to changes in society and values premised on the spread of infectious diseases, while taking measures based on requests from the government and local governments, and striving to maintain the continuity of each business segment and secure profitability.