1. Current Assessment Our company has continued operations based on the management philosophy of "contributing to society by providing high-quality instruction and student support to children who will lead the future, thereby improving student grades." The number of bases in our core seminar business segment is currently 37, with no store closures in areas we have entered to date, and we have achieved steady and sustainable growth over more than 30 years since our founding. Regarding management indicators, we have traditionally recognized revenue and operating profit as important financial metrics, and have maintained high profit margins with an operating profit margin of 18% as the minimum level even during medium to long-term expansion. For the fiscal year ended March 2024, ROE was 16.9%, and has remained stable at 15% or higher over the past three years. PBR is approximately 1.5x and PER is approximately 10x. Regarding cost of capital, since our company currently has no interest-bearing debt, we calculate only the cost of equity, and using the following CAPM formula, we estimate our company's cost of equity to be approximately 3.5%: CAPM: Cost of Equity approximately 3.5% = Risk-Free Rate (1.25%) + β (0.38) × Market Risk Premium (6.17%) [Risk-Free Rate: 10-year government bond yield, β: Historical Beta (126 days), Market Risk Premium: Historical method] (As of February 2025) Additionally, calculating the earnings yield (assuming 0% growth) from the reciprocal of PER shows a high cost of equity of approximately 10%, indicating a significant divergence between CAPM and market expected returns. We believe that our current ROE exceeds the cost of capital calculated by either CAPM or earnings yield methods; however, our growth characteristics are not being appropriately valued, and the cost of equity calculated using the earnings yield method is higher than what we consider appropriate. On the other hand, the CAPM-derived cost of equity may be calculated at a low level due to the influence of current beta values, and we estimate the appropriate range to be 5-7%. Therefore, going forward we intend to focus on both increasing ROE and increasing PER (raising expected growth rates for our company) through future initiatives, thereby pursuing further improvement in stock price and PBR. 2. Future Initiatives (1) Maintenance of High Operating Profit Margins Currently, we plan to open 2-3 new seminar stores annually. When opening new locations, by conducting thorough due diligence on property candidates, providing high-quality service through well-trained teachers, and achieving overwhelming customer acquisition, we can maintain high profitability. We will strive to achieve both business expansion and profitability maintenance. (2) Enhancement of Shareholder Returns Our company recognizes the active return of profits to shareholders as one of the important management priorities, and does not accumulate excessive capital. By controlling appropriate levels of retained earnings, we seek to ensure stable ROE. When purchasing individual domestic stocks in NISA's growth investment category, the key emphasis point is "dividends," which ranks highly. Our dividend policy is also consistent with providing continuous and stable dividends, and we plan progressive dividends. Currently, we aim for an annual dividend payout ratio of 50% or higher, and through steady growth year by year increasing earnings per share, we will continue dividend increases. Additionally, with awareness of trends in our company's stock price, we intend to continue to conduct share buybacks flexibly. (3) Normalization of PER Our company listed on the TSE Standard Market in December 2023 and has now been listed for one year. Currently, the proportion of individual investors is high, and as of September 2024, the number of shareholders has exceeded 7,000; however, we recognize that awareness of our company remains at a relatively low level. We will enhance communication through the holding of explanatory sessions for individual investors and other means. By increasing the transparency of our management and enabling broad understanding of our business through extensive IR activities, and ensuring evaluation of our future business growth, we believe PER normalization will be achieved. Our company will work to realize management conscious of capital cost and stock price by providing high-quality service in the cram school business and enhancing corporate value.