PARK24 CO., LTD.

The core Domestic Parking Business is centered on the sublease model, and if many lease agreements are terminated or customer convenience declines, this could adversely affect business and operating results. Rising land prices may lead to owners' intentions to sell or cancel contracts and to rent increases, creating a risk of reduced profitability. In response, the Group is strengthening relationships with owners through community-based sales activities, promoting development in areas less affected by rising land prices, and improving convenience through the introduction of cashless payments and license plate recognition systems.

The Mobility Business is exposed to competition in quality, price, and service with other companies in the same industry and auto leasing companies, and intensifying competition could adversely affect business and operating results. In addition, rising land rents for car-sharing sites carry the risk of reducing profitability. While leveraging its overwhelming share of the domestic car-sharing market, the Group aims to maintain competitive advantage and stabilize its earnings base through business scale expansion, service enhancement, and ongoing promotional activities.

In the Overseas Parking Business, which operates in the UK, Australia, New Zealand, Singapore, Malaysia, and Taiwan, difficulty in appropriately passing on costs under long-term rent contracts linked to price fluctuations, unexpected changes in tax, legal, and regulatory frameworks, political and economic volatility, and exchange rate fluctuations may adversely affect business and operating results. There is also a risk that insufficient governance and internal controls at overseas subsidiaries could impair the accuracy of financial reporting. In response, the Group is optimizing its portfolio by promoting the development of short-term contract parking lots under

Service provision and business operations are highly dependent on ICT systems, and in the event of a major failure due to natural disasters, cyberattacks, system malfunctions, or communication outages, maintaining service provision could become difficult, potentially damaging the Group's reputation. Similar risks may arise if the development and introduction of new technologies and systems do not proceed as planned, or if unreliable systems are introduced. In response, the Group is implementing redundancy and backup through geographically dispersed cloud and multiple data centers, conducting risk assessments through a system committee, and carrying out phased implementation and external expert reviews.

The Group holds a large amount of customer information through services such as Times Club and Times Car, and if a large-scale information leak or data tampering occurs due to cyberattacks such as unauthorized access or operational negligence, this could result in damages and response costs, as well as significant business impact due to reputational damage. Ransomware attacks that encrypt systems and data could also seriously affect business continuity. The Group has established a cross-group organization to formulate security standards, implements vulnerability management, access control, and encryption technologies, and pursues continuous improvement in collaboration with external specialized organizations.

Achieving the long-term vision for 2035, "Evolution into a Mobility Service Platformer," requires the effective implementation and dissemination of human resource strategy. If this is insufficient, employee engagement and capability development will not progress adequately, resulting in inadequate improvement of productivity and organizational strength. As a result, achieving the long-term vision or the medium-term management plan may become difficult. In response, the Group is strengthening management commitment, managing the progress of HR initiatives, and implementing various HR measures based on five key themes, including "individual growth and skill improvement," "promotion of DX," and "promotion of DEI and health management."

Business funds are raised through bank borrowings, corporate bond issuance, and other means. If a downgrade in credit rating due to a deteriorating business environment or a rise in interest rates in financial markets makes it difficult or impossible to raise funds on favorable terms, funding costs may increase, adversely affecting operating results and financial condition. In response, the Group's policy is to strengthen financial soundness including shareholders' equity, level and extend the timing of debt repayments, and fix interest payments over the long term through fixed-rate financing and derivative transactions such as interest rate swaps.

The consolidated financial statements are presented in Japanese yen, and since the financial statements of overseas subsidiaries denominated in local currencies are translated into yen, sharp fluctuations in exchange rates may adversely affect operating results and financial condition. As the Group operates in multiple countries including the UK and Australia, its foreign exchange exposure spans multiple currencies. For a portion of foreign currency-denominated liabilities, the Group seeks to reduce risk through derivative transactions such as currency swaps.

If parking lots or mobility vehicles are damaged by natural disasters such as earthquakes, tsunamis, or typhoons, or if management center facilities suffer catastrophic damage, service provision could become difficult and significant repair or replacement costs would be incurred. Restrictions on economic activity due to major earthquakes, terrorism, war, or serious infectious disease outbreaks, as well as employees being affected by disasters or illness, could lead to an inability to continue business. In response, the Group promotes business continuity management by diversifying its areas of operation and formulating

Increased capital expenditure costs from the large-scale introduction of environmentally friendly vehicles such as EVs and related EV charging equipment, higher Mobility Business operating costs due to soaring fuel prices, and increased cost burdens from stricter environmental regulations such as taxation on greenhouse gas emissions may adversely affect operating results and financial condition. In addition, insufficient efforts to reduce environmental impact carry the risk of a decline in social reputation. In response, the Group promotes initiatives in collaboration with stakeholders through its support for and disclosure in line with the TCFD recommendations.