Izu Shaboten Resort Co.,Ltd

The Group's operating facilities are susceptible to fluctuations in visitor numbers due to weather factors such as weather conditions and temperature, and prolonged bad weather may lead to a temporary decline in visitor numbers. Given the nature of leisure facility operations, there is a high degree of dependence on outdoor environments, creating a structure that is prone to impacts on business performance. There is currently no specific description of countermeasures in the Annual Securities Report.

In the event of disasters such as major earthquakes, fires, floods, or tsunamis, in addition to physical damage to facilities and transportation infrastructure, a decline in visitor numbers is expected due to reduced consumer leisure sentiment. Since many of the Group's operating facilities are concentrated in Ito City, Shizuoka Prefecture, there is concentrated exposure to region-specific natural disaster risks. There is no description of specific disaster prevention measures in the Annual Securities Report.

If accidents occur at amusement facilities or foreign matter is found mixed into food products, this could lead to serious harm to customers, as well as impact business performance through a decline in trust in the Group and the burden of litigation costs. The Group is working to promote the use of manuals and raise safety awareness, but recognizes that it is difficult to eliminate such risks entirely.

Leisure consumption is discretionary spending premised on leisure time and surplus funds, and its priority tends to decline during economic downturns. In the event of an unprecedented economic downturn, business performance may be adversely affected through a temporary decline in visitor numbers. There is no description of specific measures to address economic downturns in the Annual Securities Report.

At facilities that exhibit animals and plants, the spread of disease or death caused by abnormal weather could damage the exhibits, potentially leading to a decline in visitor numbers. While a management system has been established through improving employee knowledge and collaborating with external specialists such as veterinarians and tree doctors, risks arising from natural factors cannot be completely eliminated.

Many of the Group's Leisure Business and Hotel Business facilities are concentrated in Ito City, Shizuoka Prefecture, creating a risk that a deterioration in the overall tourism industry performance of the region would directly affect the Group's visitor numbers and accommodation demand. While there is a high degree of dependence on the regional brand, means of diversification against a decline in the region's overall ability to attract visitors are limited.

The Group is subject to a wide range of laws and regulations, including attraction safety standards, product sales standards, environmental standards, accounting standards, and tax laws, and future establishment or amendment of such regulations may result in increased compliance costs or a temporary decline in visitor numbers. While risk management is conducted in collaboration with external specialists, the content and timing of regulatory changes are difficult to predict.

In the Hotel Business, the Group holds personal information of guests, and if an information leak occurs, it could impact business performance through a decline in trust in the Group and the burden of costs such as damages compensation. While the internal General Affairs Department takes the lead in working to prevent external leaks, there is no description in the Annual Securities Report of specific countermeasures against external threats such as cyberattacks.

If a serious legal violation by officers or employees occurs, it could lead to a substantial financial burden due to business suspension from administrative sanctions, brand damage, and litigation costs, adversely affecting business performance. While the Group continues to develop its compliance promotion framework and conduct awareness activities for officers and employees, risks arising from human factors cannot be completely eliminated.

Personnel with specialized expertise are required in each business field, such as animal and plant management, hotel operations, and attraction management, and intensifying competition for talent could result in the loss of skilled personnel or difficulty securing them, which may impact business performance through a decline in service quality. While the Group positions continuous recruitment and development of personnel as an important issue, details of specific measures are not described in the Annual Securities Report.