1) Risk of financial condition worsening due to financial market turmoil, deterioration in interest rate environment, downgrades, credit uncertainty, etc.

Since the Group has raised much of the necessary funds for its businesses, including the railway business, through corporate bonds and borrowings from financial institutions, if market interest rates rise, if rating agencies downgrade the Group's ratings, or if the ratings of ESG-related rating agencies fall, the Group's business performance and financial condition may be adversely affected by a relatively heavier interest burden or worsening fundraising conditions. For this reason, the Group will continue to diversify fundraising sources and reduce refinancing risk by fixing interest rates for the long term and leveling out repayment dates, while working to improve its flexible fundraising capabilities by utilizing short-term financial markets, such as by utilizing commercial paper.

② Risk of making it difficult to secure profits and continue business due to miscalculation of demand and business viability

The Group's management resources are concentrated in areas along railway lines, and any decline in demand for existing businesses due to a declining birthrate and aging population and population decline, a decline in the use of existing transportation, office and commercial facilities due to changes in lifestyles, or a decline in the competitiveness of existing businesses due to the emergence of new industries and business models could have an adverse effect on the Group's business performance and financial condition. In addition, the Group has formulated a "three-year medium-term management plan" and is implementing various measures, but these plans may not progress as planned or may not produce the expected revenue or expected effects due to deviations from forecast demand or changes in the economic situation, which could have an adverse effect on the Group's business performance and financial condition. For this reason, the management team is working to quickly grasp the business performance trends and signs of changes in business performance of each business, and to respond promptly and appropriately by discussing measures, making decisions and monitoring them.

3) The risk that a deterioration in various market conditions will cause construction and other procurement costs to rise, resulting in a decline in profitability.

The Group is reducing costs in light of market price trends for raw materials, labor, etc., but if procurement costs for construction and other purposes rise sharply, this could have an adverse effect on the Group's business performance and financial position. For this reason, the Group is working to strengthen its ability to respond to changes in market conditions in light of market trends, such as through value engineering, cost reductions, diversification of procurement channels, and continuous scrutiny of construction content.

④ Risk of sudden changes in market conditions due to changes in government or tax systems and other administrative policies in the areas where we do business

The Group's business performance and financial position may be adversely affected if the economic downturn continues, causing a decline in annual household income, or if personal consumption continues to stagnate due to tax increases, or if there are changes in the legal system for each business. For this reason, we have established medium- to long-term management policies that take into account changes in the market and in politics, the economy, and the legal system, and we are working on various measures such as formulating appropriate business plans that include repairs and capital investments, improving convenience, creating an attractive tenant mix, and maintaining and improving the ability of our facilities to attract customers by providing topics of conversation.

⑤ Risk of a decline in the evaluation and trust of stakeholders due to a lack of progress in responding to the SDGs and in initiatives in line with ESG investment policies

Our group is actively working to address the SDGs and to comply with our ESG investment policy, but if these efforts do not progress, our evaluation and trust from stakeholders may decline. Therefore, in order to realize a decarbonized, recycling-based society as set forth in the "Environmental Vision 2030" formulated in March 2022, we will continue to take measures to improve our ESG evaluation, such as considering a transition plan for TNFD and carbon neutrality, and we are also promoting efforts to disseminate ESG-related policies to our business partners (supply chain).

1) Risk of being unable to provide services due to insufficient preparations for natural disasters, including those caused by climate change, and damage to facilities, etc.

In the event of a large-scale natural disaster, etc., which causes human casualties or business interruptions, it may have an adverse effect on the business performance and financial position of the Group. For this reason, the Group is strengthening its response capabilities, such as by building cooperative structures among consolidated companies, in the event of natural disasters or the spread of infectious diseases, and is conducting assessments of operating losses and the social impact of climate change, and is taking measures (both from the perspective of prevention and minimizing damage) based on the results of these assessments.

② Risk of damage compensation and loss of trust in services and facilities due to man-made accidents

If a serious man-made accident were to occur, resulting in personal injury or an interruption to business, the Group's brand image could be tarnished and we could lose the trust and confidence of our customers, which could have an adverse effect on our business performance and financial position. For this reason, the Group has taken various measures to anticipate the occurrence of accidents in line with Basic Safety Policy, breakdowns in facilities and information systems, quality issues with food and construction work, and other troubles, and is working to install platform screen doors and fixed platform fences with sensors at all Tokyu Line stations ^* and to develop measures to prevent recurrence by collecting and disseminating information on the occurrence of accidents, etc.

*Excluding the Setagaya Line and Kodomo-no-Kuni Line

3) Risk of service interruption and loss of social trust due to deterioration of public safety resulting from terrorism or political instability, etc., caused by damage to facilities or death or injury to customers.

If a serious accident or other incident occurs due to external factors such as terrorism, resulting in personal injury or business interruption, it could have an adverse effect on the business performance and financial position of the Group. For this reason, the Group has taken various measures to prepare for the occurrence of disasters caused by illegal acts such as terrorism, and other troubles due to other reasons, and is promoting safety initiatives such as installing security cameras inside all Tokyu Railways train cars ^*, effectively deploying security guards at station facilities and commercial facilities, conducting response training in anticipation of cyber attacks, and encouraging the purchase of cyber insurance.

*Excluding Kodomonokuni Line

④ Risk that insurance companies will not be able to provide insurance coverage for accidents due to rising insurance rates or underwriting restrictions.

Due to rising insurance rates and underwriting restrictions by insurance companies in light of changes in social conditions, such as an increase in natural disasters, it is possible that insurance will no longer be available to cover accidents. For this reason, the Group is reviewing the scope of insurance coverage, considering self-insurance, and is also examining whether or not to file insurance claims in the event of an accident.

1) Risk of a decline in social credibility due to a weak accounting control system leading to serious errors or irregularities in accounting and other procedures and the publication of inappropriate financial statements

Our Group complies with relevant laws and regulations and is taking various measures to optimize our consolidated accounting system and strengthen governance based on the accounting standards of each country, but if any act contrary to these occurs and we lose social trust, it may have a negative impact on our business performance and financial position due to the loss of customers and business partners, etc. For this reason, we are working to optimize our consolidated accounting system and standardize operations by standardizing the accounting systems of all domestic consolidated companies.

② The risk of losing social trust in the company due to a compliance violation and the need to process losses

In its various businesses, including the railway and real estate businesses, the Group complies with relevant laws and regulations and operates in accordance with corporate ethics, but if any violation of these laws occurs and social trust is lost, this could have a negative impact on the Group's business performance and financial condition due to the loss of customers and business partners, etc. For this reason, the Group is continuously working to raise awareness and provide training on compliance in general and on legal amendments, and to improve the accuracy of its response to internal reports, and has established a new Compliance and Risk Management Committee in April 2024 to strengthen its compliance and risk management system.

3) Risk of confidential information or personal information being leaked or lost due to inadequate information management, including IT security, resulting in damage to social trust along with its disposal.

The Group provides systems and services that are essential to social infrastructure, and in the event of an operational failure that impedes the provision of services, or a large-scale leak or loss of confidential information, including personal information, etc., this could have an adverse effect on the Group's business performance and financial position due to a decline in the Group's social credibility and brand image, the payment of compensation for damages incurred, etc. For this reason, we have taken various measures to prepare for the occurrence of problems due to breakdowns in facilities and information systems and other reasons, and are working on various measures such as implementing external security assessments and formulating improvement plans at consolidated companies that are responsible for important infrastructure such as transportation, settlement, and communications.

① As the working-age population declines, there is a risk that appropriate human resources will be insufficient or unable to be steadily secured, resulting in the inability to provide services sustainably.

Due to the declining birthrate and aging population, population decline, and the increased mobility of human resources due to changes in the work and employment environment, employee outflows and recruitment difficulties may become more serious in the future, leading to a decline in services and negative rumors caused by personnel shortages, which could have a negative impact on the business performance and financial position of the Group due to the loss of customers and business partners, etc. For this reason, in addition to promoting efforts to improve wages and working conditions that balance the sustainable improvement of corporate value and returns to employees, we are working on various measures, such as reviewing our personnel and welfare systems to provide diverse and flexible work styles that are not dependent on permanent employees or full-time workers.

② Risk of not being able to secure and develop the quality of human resources, leading to a decline in human resources and technical capabilities, which in turn leads to a decline in brand value.

If we are unable to secure and develop the quality of our human resources, there is a risk that we will miss business opportunities, our service quality will decline, our business operations will become difficult, we will lose the trust of our stakeholders, and our brand value will be damaged. For this reason, we will strive to continuously develop specialized human resources by establishing human resource development programs unique to each business and through strategic personnel rotations, and we will also work to prevent the loss of our unique business know-how, which may occur as a result of the loss of human resources, including in the real estate business.

1) Risk of long-term and widespread disruption to the flow of people due to natural disasters such as earthquakes, storms, and floods, resulting in reduced profitability

In the event that natural disasters such as earthquakes, wind and flood damages cause long-term and widespread disruption to the flow of people in the Group's business areas, business activities may be suspended due to closures, leading to a decline in profitability. For this reason, we will continue to respond in line with the TCFD recommendations, evaluate the business losses and social impacts of climate change impacts that can be avoided through long-term resilience, compare and consider preventive measures against physical damage and the costs of damage recovery, and continue to work toward deepening BCM and early recovery.

② Risk of long-term and widespread disruption to the flow of people due to external factors such as infectious diseases, resulting in reduced profitability

If an external factor such as an infectious disease causes a long-term and widespread disruption to the flow of people, business activities may be suspended due to restrictions on operations, which could lead to a decline in profitability. For this reason, we will continue to improve our systems in response to the outbreak of new infectious diseases, etc., and will also work to strengthen EC in our retail business, and take other steps to ensure that we are not affected by the flow of people even during periods of influence by infectious diseases, etc.

3) The risk that inbound demand will disappear due to sudden changes in market conditions caused by international disputes, fluctuations in exchange rates and interest rates, inflation, etc., resulting in a significant impact on business income and expenditures.

If inbound demand were to disappear due to sudden changes in market conditions caused by international disputes, fluctuations in exchange rates and interest rates, inflation, etc., this could have a huge impact on our business income and expenditures. For this reason, in addition to developing new demand in the hotel business that is not affected by the disappearance of demand, we will also consider ways to prevent the departure of surplus employees that would arise from the disappearance of demand.

4) Risk of disruption to people flow due to population decline in business areas

A decline in the residential population in our group's business areas could disrupt the flow of people. For this reason, we will work to secure the residential population by making areas along our railway lines more attractive, and we will also work to stimulate new travel, such as marketing by Tokyu Railways to generate travel.