FUJI CO.,LTD.

There is a risk that recruitment and development plans will not proceed as planned due to changes in population structure resulting from the declining birthrate and aging population, as well as domestic economic trends. There is also concern about increased personnel expense burdens due to amendments to labor-related laws and regulations. As a countermeasure, real-time monitoring of working hours and initiatives to establish corporate culture (Vision Meetings) are managed under the supervision of the Human Resources Department, and this is positioned as one of the company's five priority risk items.

Accuracy in food labeling and hygiene management are required at process centers for fresh food and in-store manufacturing. If an unexpected incident or accident occurs, it could lead to a decline in social credibility and affect the financial position and business results. As a countermeasure, label creation and pre-sale inspections, as well as unified management of HACCP control standards, are implemented under the supervision of the Quality Control Office, and this is managed as one of the priority risks.

If networks at stores, offices, etc. are disconnected or damaged due to natural disasters, accidents, cyber attacks, or other causes, functions such as logistics, product supply, and internal management may deteriorate, potentially disrupting business operations. As a countermeasure, in cooperation with AEON CO., LTD., the company manages the updating of various management ledgers, implementation of security education, and response to vulnerabilities in externally exposed servers under the supervision of the Systems Management Department, and this is designated as one of the priority risks.

There is a risk that procurement prices and development costs for products, raw materials, store equipment, etc. may fluctuate significantly due to changes in market conditions such as foreign exchange rates and crude oil prices, as well as economic trends. This could increase costs required for merchandise procurement and store facilities, potentially affecting the financial position and business results. As a countermeasure, based on monitoring of electricity usage at all facilities, the General Affairs Department, Construction Department, and Sustainability Promotion Office share information and coordinate with AEON CO., LTD. and manage this under their supervision.

The company operates stores based in the Chugoku and Shikoku areas and the western part of Hyogo Prefecture, but if numerous new competitor stores, including entrants from other industries, enter the trading area, it could affect sales and profits. Due to the nature of the retail business, barriers to entry for competitors are relatively low, and the region-concentrated store deployment could be a factor that increases this risk. There is no specific description of countermeasures in the securities report.

The company conducts business with store facilities as its main operating assets, and deficiencies in facility and equipment maintenance carry the risk of causing unforeseen accidents, harming the physical safety of customers and employees, and leading to a loss of credibility. As a countermeasure, a unified management list of construction status is created, and the Construction Department, General Affairs Department, and Store Operations Headquarters coordinate to share priorities and manage this, and it is positioned as one of the priority risks.

The company conducts business operations primarily holding store assets, and based on the 'Accounting Standard for Impairment of Fixed Assets,' when examining the future recoverability of held fixed assets, if an impairment loss related to stores or other assets is recorded, this could affect the financial position and business results. Deterioration in store profitability and changes in the competitive environment could trigger impairment, requiring close attention as a risk linked to store opening strategy.

Capital investment funds are covered by own funds and borrowings from financial institutions, and as of February 28, 2025, the interest-bearing debt dependency ratio relative to consolidated total assets was 17.1%. Although the company aims to reduce interest rate rise risk through fixed-rate fundraising, future fluctuations in interest rates and financial markets could affect the financial position and business results. The company has adopted a policy of strengthening its financial structure through measures such as reducing borrowings.

The company holds customers' personal information, and if it is leaked for any reason, this could affect the financial position and business results. As a countermeasure, the company thoroughly implements leak prevention measures through establishing internal regulations, employee education, and strengthening information system security, but complete prevention remains difficult due to the increasing sophistication of cyber attacks and other factors.

Since the company concentrates its store deployment in the Chugoku and Shikoku areas and the western part of Hyogo Prefecture, if a large-scale earthquake, wind or flood damage, infectious disease outbreak, or other event occurs, it could significantly disrupt business activities and affect the financial position and business results. The region-concentrated store deployment is a factor that increases business continuity risk in the event of a large-scale disaster in a specific area. The company addresses this by establishing an internal emergency response system.