LEOPALACE21 CORPORATION

Changes in domestic and overseas economic conditions, as well as unforeseen events such as terrorism, conflicts, and infectious diseases, may cause surges in raw material and materials prices and disruptions to the supply chain. This could lead to increases in the cost of procuring fixtures and equipment for managed properties and construction costs, construction delays, and increased alternative procurement costs, potentially having a material impact on the cost structure, profitability, and business operations. As countermeasures, the company sets and revises rents in the Leasing Business in response to supply-demand trends, and in the development business, it implements standardization of design and construction, securing multiple procurement sources, and profitability verification at the order acceptance stage.

Large-scale natural disasters such as earthquakes, typhoons, and floods may cause direct damage to domestic and overseas offices, apartment properties, and other facilities, as well as to employees and customers, and indirect damage such as disruption of communication networks. In particular, in the event of a major earthquake directly beneath the Tokyo metropolitan area, significant impact on head office functions and internal systems is anticipated, potentially resulting in business interruption losses and costs for property inspections and emergency measures. As countermeasures, the company is advancing BCP formulation, establishment of a command and control structure, development of standards for recovery construction response, implementation of practical drills targeting executives, and plans to expand training to employees.

The risk of becoming a target of cyberattacks is increasing due to the expansion of mobile PC-based work and increased collaboration with external partners, raising the possibility of system outages, customer information leaks, and business disruptions caused by ransomware damage, as well as personal information leaks resulting from supply chain attacks. Furthermore, risks are emerging from the expanded use of AI, including privacy infringement, use of misinformation caused by hallucination, and infringement of intellectual property rights. As countermeasures, the company implements security measures referencing ISO and NIST frameworks, continuous monitoring by a SOC (Security Operation Center), in-house placement of registered information security specialists, formulation of AI guidelines, and regular vulnerability assessments and targeted phishing email training.