As a result of a report to the Tokyo Labour Bureau that H.I.S. Co., Ltd., (hereinafter referred to as "the Company") voluntarily conducted an investigation and would return a portion of the Employment Adjustment Subsidy and other subsidies that it had received, it was determined that there were mistakes with a portion of the Employment Adjustment Subsidy and other subsidies the Company received. The Company received a Notification of Cancellation of Payment Decision and Request for Return dated January 22, 2025. The details are as follows.

1. Course of events
　The Company received the Employment Adjustment Subsidy and other subsidies for the period from March 2020 through December 2022. On April 23, 2024, Deloitte Touche Tohmatsu LLC was provided with information that there may be days for which the Company reported employees had not worked and received the Employment Adjustment Subsidy and other subsidies even though employees had worked.

In response, the Company formed an investigation team composed of members of the Audit & Supervisory Committee and Internal Audit Department and commissioned independent experts to conduct a digital forensics investigation of work emails, chat messages, and similar material exchanged between in-house related parties while consulting with attorneys at a law firm that specializes in labor law and that the Company had concluded a consulting agreement with. The Company then checked and examined the results of the analysis by outside experts. At the same time, the Company conducted an investigation (hereinafter referred to as "initial investigation") that involved interviewing related in-house parties, checking data in the work attendance system against the Employment Adjustment Subsidy application, and having all employees complete a questionnaire.

During the initial investigation, the Company did not discover any facts that would lead it to suspect that the Company had wrongfully received the Employment Adjustment Subsidy, but it was determined that some employees had worked even though the Company had reported employees had not worked and had applied for the Employment Adjustment Subsidy. Therefore, the Company visited the Tokyo Labour Bureau on June 24, 2024, and notified the bureau of the amount that it had determined was inappropriately obtained and would voluntarily return.

The Tokyo Labour Bureau, however, pointed out that the results of the initial investigation were insufficient to determine the amount that should be returned. Therefore, the Company then consulted with an attorney at the foreign law firm Anderson Mori & Tomotsune. Following repeated meetings with the Tokyo Labour Bureau through November 2024, the Company obtained and examined objective data, in November and December of 2024, to determine whether employees had worked on days the Company had reported employees had not worked (specifically, for work emails, chat messages, and the core travel arrangement system, data for all employees that the Employment Adjustment Subsidy was applied for (data for about 1.70 million days)) in order to clearly determine appropriately received and inappropriately received subsidies.

In addition, the Company commissioned an attorney at the foreign law firm Anderson Mori & Tomotsune to verify the work status at that time using the data discussed above. Having obtained and analyzed this objective data, the Company was forced to conclude that for more than 20% of the days it had reported employees had not worked and received the Employment Adjustment Subsidy, employees actually worked. Further, because the Company applied for the subsidy based on the number of days, not hours, even if an employee worked only a short time, such as sending a single e-mail, on a particular day, the Company had to admit that the subsidy application based on days was not factual for that day. Therefore, the Company came to the conclusion that it should return the full amount of the subsidy for such days.

At the same time, in light of not only the details of meetings with the Tokyo Labour Bureau and suspicions that the consolidated subsidiary NUMBER ONE TRAVEL SHIBUYA Co.,Ltd. also wrongfully received subsidies, the Company's accounting auditor pointed out that it was necessary to check whether the same problem occurred at not only the the Company but also its consolidated subsidiaries to finalize the end of fiscal period results.

Therefore, considering the need to ensure the reliability of the investigation, the Company commissioned attorneys at the foreign law firm Anderson Mori & Tomotsune and a certified public accountant at KPMG FAS, Inc., outside experts with expertise and independence, in November 2024 to conduct an investigation, and in December 2024, a special investigation committee was formed.

During meetings with the Tokyo Labour Bureau, the Company reported its opinion regarding the possible scope of inappropriately received subsidies by the end of 2024. As a result, the Company determined that 6,256 million yen of the Employment Adjustment Subsidy and other subsidies received were based on incorrect applications, and the Company received a Notification of Cancellation of Payment Decision and Request for Return dated January 22, 2024, from the Tokyo Labour Bureau. Following consultations with outside experts, the Company resolved to voluntarily return the subsidy at its Board of Directors meeting held on January 27, 2025.

2. Amount of Employment Adjustment Subsidy and Emergency Employment Stabilization Subsidy the Company received and the amount to be voluntarily returned

(period received: March 2020-December 2022)

　3. Impact on business performance
The investigation by the special investigation committee into the receipt of Employment Adjustment Subsidy and other subsidies by the Company's consolidated subsidiaries is ongoing, and the results of the investigation will be announced after the investigation report is submitted. In addition, the Company plans to report on preventive measures to strengthen the governance system of the entire group, taking into consideration the causes identified by the special investigation committee and its recommended preventive measures.