I.A GROUP CORPORATION

The Car Accessories Business operates as a franchisee of Autobacs Seven, and new store openings require approval from the FC headquarters. Since there is no guarantee of exclusive trade area rights under a territorial system, if store openings do not proceed as planned, this may affect business expansion. In response, the Company makes store opening decisions after multifaceted consideration of trade areas and profitability, while maintaining close coordination with the FC headquarters.

Due to demographic trends and the trend in unmarried rates, there are concerns about a contraction in the overall bridal market, which may lead to a decrease in sales in the Group's Bridal Business. In response, the Company is working to improve facility utilization rates by disseminating the concept "Kansha wo, Shiki no Mannaka ni." (Putting Gratitude at the Center of the Ceremony), placing appropriate advertising, and strengthening order intake for corporate and individual banquet and event use.

With the diversification of wedding ceremony and reception styles, if new entrants from other industries and competition with other companies in the same industry intensify, price competition may result in a decrease in average sales price. In response, the Company is working to strengthen competitiveness through continuous human resource development, improvement of service quality, setting and managing achievement of key indicators, and improving operational efficiency through the use of systems.

Major stores are opened under land and building lease agreements or fixed-term business land lease agreements, and early termination may require payment of a cancellation penalty. In addition, deterioration of the lessor's financial condition may result in the inability to fully recover deposited security deposits. In response, the Company maintains regular communication with contract counterparties and considers purchasing real estate depending on the situation.

As each business handles a large amount of customer personal information, the risk of information leakage or improper handling due to the increasing sophistication and cunning of criminal activity cannot be completely eliminated. In the event of a leak, business performance may be affected due to a decline in social credibility. In response, the Company has established personal information protection management regulations and works to raise awareness of information management through disclosure on its website.

The Company applies the "Accounting Standard for Impairment of Fixed Assets," and if new impairment losses are recognized due to deteriorating profitability at stores and other locations, this may affect business performance. In response, the Company formulates detailed plans from the business planning stage for business locations that may be subject to impairment, and focuses on business operations.

Even with internal controls established across diverse business activities, it is impossible to completely eliminate litigation risk, and lawsuits involving the Group as a party may be filed. Depending on the terms of settlement or court rulings, business performance may be affected. In response, the Company monitors litigation cases across group companies and takes prompt countermeasures as necessary.

In store operations in the Kanto, Kansai, Chubu, and Tohoku regions, if store operating activities are disrupted for a considerable period due to natural disasters such as earthquakes and typhoons, or unforeseen accidents such as fires and power outages, business performance may be affected. In response, the Company has established crisis management regulations, built an employee safety confirmation system, and conducts disaster drills, but damage cannot be completely eliminated.

The Construction & Real Estate Business holds real estate assets for sale, and a decline in sales prices may result in an inability to achieve expected profits. In response, the Company manages risk by establishing certain investment criteria and holding an investment review committee meeting at the time of asset purchase to confirm the exit strategy.

The Construction & Real Estate Business is subject to legal regulations such as the "Building Lots and Buildings Transaction Business Act," the "Construction Business Act," and the "Financial Instruments and Exchange Act," and if new regulations are enacted or existing ones are amended or abolished, the Company may face rising labor costs, increased subcontracting costs, or restrictions on construction orders. In response, the Company appropriately gathers necessary information on government policy and regulatory trends.