Koyou Rentia Co.,Ltd.

While holding over 1 million items of rental merchandise, if demand exceeds expectations, opportunity losses occur, and if demand falls short of expectations, excess inventory leads to increased storage and operating costs. In addition, in the newly launched used condominium resale business, if sales delays or price declines occur due to fluctuations in real estate market supply and demand, mortgage interest rate trends, or intensifying competition, inventory valuation losses may occur, potentially affecting business results. As countermeasures, the Company implements centralized management and indexation of inventory information, strengthening of the delivery system through logistics DX, and careful selection at the procurement stage along with sales progress management for each property.

If internet connectivity or server functions are disrupted due to communication or system failures caused by external factors, or due to unauthorized access, service provision may be hindered, and if the scale is large, it could have a material impact on business results through the suspension or delay of business operations. As countermeasures, the Company has established a DR site (alternative facility) outside the head office area to maintain operational capability in the event of an emergency, and is strengthening initial response capabilities through education and training for system personnel.

As the Company handles a large amount of customer information, if information leakage or unauthorized use occurs due to cyberattacks, unauthorized access, or inadequate information management, this could result in response costs and impact on business results, as well as a decline in social credibility. As countermeasures, the Company is promoting thorough adherence to response procedures in the event of an incident, establishment of an initial response system through cooperation with relevant departments, regular review of related regulations, and advancement of data management with the highest priority placed on customer information protection.

If natural disasters such as earthquakes, fires, typhoons, and floods, or a pandemic, occur on a scale exceeding expectations, delays or suspensions of supply and service provision could have a material impact on business activities, business results, and financial condition. As countermeasures, the Company continues to regularly review and improve its BCP (Business Continuity Plan), conduct education and training to strengthen initial response capabilities, and promote efforts to raise disaster preparedness awareness.

If complaints arising in connection with business operations lead to litigation, disputes, or claims for damages, or if social credibility declines due to the occurrence of misconduct, this could affect business results and credibility through response costs and opportunity losses. As countermeasures, the Company is working to continuously operate ISO9001, clarify complaint classification criteria, strengthen information sharing in the process from order receipt to delivery, improve operational quality through inter-departmental cooperation, and strengthen emergency response capabilities.

Amid ongoing domestic population decline, changes in demand trends in the construction market and condominium market, as well as intensifying competition in the rental service business, pose a risk of fluctuations in sales and profits. As countermeasures, the Company is working to diversify revenue sources through deepening existing areas and expanding into new areas, expanding proposal opportunities through digital marketing, and creating new businesses.

Establishing a personnel cycle of recruitment, retention, development, and utilization is essential for promoting business expansion; however, if sufficient human resources cannot be secured due to intensifying competition for talent amid a declining working-age population and rising turnover, delays in organizational development could affect business results. As countermeasures, under the "Enhancement of Human Capital" initiative in the medium-term management plan "Next Evolution 26," the Company is implementing improvement measures based on engagement surveys and promoting a project to rebuild its personnel system.

If the development of internal management systems fails to keep pace with the increasing sophistication and complexity of operations accompanying business expansion, this could hinder appropriate business operations and affect business results and the operation of each business. As countermeasures, the Company continues to operate compliance training and an internal whistleblower system, strengthen mechanisms for recurrence prevention and proactive prevention centered on the Risk and Compliance Committee, and pursue both operational efficiency and internal controls through the review and standardization of back-office functions.

If amendments or abolitions of laws such as the Companies Act, the Financial Instruments and Exchange Act, the Construction Business Act, the Act on Ensuring the Fairness of Subcontracting Transactions for Small and Medium-sized Enterprises, the Act on Improving Logistics Efficiency, and the Personal Information Protection Act, or the introduction of new regulations occur, this could affect business results and financial condition through increased response costs and constraints on business operations. As countermeasures, the Company is strengthening education and awareness activities, such as providing information through the internal portal site and holding study sessions in each department on "Compliance Day," held on the 10th of every month, to raise awareness of legal compliance.