Risk of Revisions to Disability Welfare Service Reimbursement Rates and Laws and Regulations

「In accordance with the intended purpose of the utilization capacity, reimbursement and other laws and notifications, the Group operates some facilities above their stated capacity, within limits that do not make them subject to reductions in reimbursement or revocation of their business designations.」

「Facility utilization rates remained stable as the business returned to support programs focused on shorter sessions, and despite absorbing upfront costs for facility openings concentrated at the beginning of the fiscal year, revenue for the interim consolidated accounting period was ¥5,387 million, up 30.0% year on year, and segment profit was ¥176 million, an increase of ¥690 million year on year.」

「Benefiting in part from the reimbursement revision, revenue for the interim consolidated accounting period was ¥6,216 million, up 19.2% year on year, and segment profit was ¥2,294 million, up 35.2%.」

「The Group operates employment support services under the Act on Comprehensive Support for Persons with Disabilities and child welfare services under the Child Welfare Act. The Group receives government reimbursement for each service, and because these reimbursement systems are generally revised once every 3 years, the enactment, amendment or repeal of these laws, or changes in notifications issued by the Ministry of Health, Labour and Welfare, could restrict the Group's business activities, affect the performance of the Employment Support Services segment and Child Welfare Services segment, and consequently affect the Group's performance.」

「During the nine-month period of the fiscal year under review, there were no events that could materially affect investors' decisions, nor were there any material changes to the risks associated with the business described in the annual securities report for the previous fiscal year.」

「During the cumulative first quarter of the consolidated fiscal year, there were no material changes in matters that could materially affect investors' decisions or in the business and other risks described in the annual securities report for the previous fiscal year.」

「The Group provides services in the Other segment under laws including the Act on Comprehensive Support for Persons with Disabilities, the Child Welfare Act and the Long-Term Care Insurance Act.」

「During the first quarter, there were no significant changes to the major risks recognized as potentially having a material impact on the financial position, operating results or cash flows of the consolidated companies, among the matters concerning the business and financial condition described in this quarterly report, or to the "Business and Other Risks" described in the annual securities report for the previous fiscal year.」

「As these reimbursement systems are generally revised once every 3 years, the enactment, amendment or repeal of these laws, or changes in the content of notices issued by the Ministry of Health, Labour and Welfare, could constrain the Group's business activities and affect the performance of the LITALICO Works and LITALICO Junior business segments, as well as the performance of the Group.」

「There were no significant changes during the second quarter of the current consolidated cumulative period.」

「As these reimbursement systems are generally revised once every 3 years, the enactment, amendment or repeal of these laws, or changes in the content of notices issued by the Ministry of Health, Labour and Welfare, could constrain the Group's business activities and affect the performance of the LITALICO Works and LITALICO Junior business segments.」

「As these reimbursement systems are generally revised once every 3 years, the enactment, amendment or repeal of these laws, or changes in the content of notices issued by the Ministry of Health, Labour and Welfare, could affect the performance of designated service providers that are customers and, in turn, the Company's performance.」