Iida Group Holdings Co.,Ltd.

Due to the decline in Japan's domestic population and number of households, particularly the working-age population, a medium- to long-term contraction in demand for the Condominium Development Business is anticipated. This has a significant impact on the real estate development business, which accounts for approximately 90% of net sales, and may affect business performance and financial condition. As countermeasures, the Group is promoting business expansion into areas adjacent to housing and expansion into overseas markets.

There is a risk that deteriorating economic conditions, significant interest rate increases, rising land prices, tax system changes, and other factors could reduce buyers' purchasing intent. In cases of extreme demand decline or intensified competition, the Group may be forced to implement substantial price reductions. The Group regularly analyzes construction progress, inventory, and competitor trends across the entire Group, and determines response policies regarding procurement prices, sales prices, the number of units supplied, timing, and other factors.

There is a risk of valuation losses or impairment losses arising from significant deterioration in real estate market conditions with respect to inventory assets such as real estate for sale (¥966,039 million in FY2026 (ending March 2026)) and tangible fixed assets (¥136,513 million in FY2026 (ending March 2026)). There is also foreign exchange risk associated with settlements denominated in foreign currencies. The Group treats inventory turnover as a key management indicator to minimize the impact of market fluctuations, and implements hedging as necessary.

Due to the declining population, competition to acquire personnel engaged in construction sites and business operations is intensifying, and there is a risk that insufficient securing and development of human resources could lead to a decline in competitiveness. The Group is strengthening its internal human resource development foundation by promoting DX at construction sites, internalizing carpentry and other functions, and promoting career development through support for obtaining qualifications.

Due to domestic and international market trends, there is a risk that rising prices of raw materials, materials, labor costs, logistics costs, outsourcing costs, and other expenses could affect business performance and financial condition if these costs cannot be passed on to sales prices. The Group is building a stable procurement system balancing quality and cost by leveraging scale advantages in competitive procurement and by internalizing production of major materials such as lumber, interior building materials, and housing equipment within the Group.

In overseas business, in addition to risks such as changes in economic conditions, exchange rate fluctuations, unexpected changes in laws and regulations, deteriorating political conditions, terrorism, and conflicts, there are also legal and regulatory risks such as bribery of foreign public officials. Geopolitical risks, including the situation in Ukraine, also require continuous monitoring. The Group is strengthening its management system through risk assessment based on prior market research, establishment of a compliance system, and collaboration with regulatory authorities and local Group companies.

Strengthening of laws and regulations such as carbon taxes (transition risk) and the intensification of natural disasters and abnormal weather (physical risk) are expected to result in response costs, suspension of production activities, and health impacts on construction workers. The Group is promoting the acquisition of Insulation Performance Grade 4 for all detached houses in its Condominium Development Business and disclosure and initiatives based on the TCFD framework; however, additional costs may arise due to changes in environmental regulations or unexpected changes in the social environment.

While holding large amounts of personal information and confidential information, there is a risk that cyberattacks, unauthorized access, computer virus intrusions, or other incidents exceeding expectations could result in information leaks, destruction or falsification of critical data, or system outages, leading to substantial costs and a decline in social credibility. The Group implements both hardware and software security measures as well as employee training, but complete protection remains difficult to achieve.

If regulatory revisions to laws and licensing requirements in various domestic and overseas regions occur, or if unexpected enactment or abolition of laws or changes in judicial interpretation of laws occur, this may affect business performance and financial condition through administrative penalties or damage to reputation. Compliance risks, including individual misconduct, cannot be completely avoided even with various countermeasures in place. The Group continuously implements thorough legal compliance, establishes systems to prevent misconduct, and conducts company-wide education and awareness activities.

A portion of the funds for purchasing business land is procured through borrowings from financial institutions, and if procurement is constrained by external factors such as the financial condition of financial institutions or interest rate conditions, or by a decline in the Group's creditworthiness, this may affect business performance and financial condition. While the Group does not consider it highly likely that this risk will materialize over an extended period, it anticipates that the impact would be correspondingly significant if it were to materialize. The holding company and operating companies conduct fundraising and fund management in an integrated manner, adopting a financial policy that prioritizes financial soundness above all else.