GREENLAND RESORT COMPANY LIMITED

Adverse weather such as typhoons, heavy rain, heavy snowfall, extreme heat, and mild winters, large-scale disasters such as the Kumamoto Earthquake, and the spread of infectious diseases such as COVID-19 have a direct impact on visitor numbers and business results at the Group, whose core businesses are the Amusement Park, Golf, and Hotel Businesses. Continuous rainfall during peak season or snow shortages at the Hokkaido ski resort can cause declines in visitor numbers that cannot be offset by subsequent business efforts. Secondary effects are also anticipated, such as a decline in personal consumption appetite resulting from indirect impacts on business partners and customers.

As a service business that has direct contact with customers, if a safety accident or hygiene management issue occurs involving rides, food and beverage services, or retail shops, it could damage the Group's social credibility and raise doubts about safety, potentially having a material impact on subsequent business development and operating results. As a countermeasure, the Group has established safety assurance and hygiene management rules within its business management regulations, and diversifies risk by adopting a tenant system for many of its rides, entrusting specialized operation to major manufacturers. The Group also prioritizes customer safety and peace of mind above all else, including compliance with periodic inspections mandated by the Ministry of Land, Infrastructure, Transport and Tourism and the posting of "Safety Inspection Confirmation Certificates."

The Group's businesses are highly dependent on the domestic market, and if an economic downturn, demand decline, or unforeseen circumstances affecting consumer trends occur, this could impact operating results and financial condition. As a countermeasure, the Group is working to hold attractive events aimed at expanding inbound tourist numbers and implementing customer acquisition measures utilizing social media, while also capturing diversifying needs through market research and analysis to attract a wide range of target customer segments.

At the two membership-based golf courses, Ariake Country Club Omuta Golf Course and Kurume Country Club Hirokawa Golf Course, the Group holds membership deposits received from members. If redemption requests were to surge sharply due to a rapid decline in golf demand or unexpected reputational damage, this could impact the Group's financial condition. As a countermeasure, the Group strives to increase membership numbers and secure the number of players through programs such as the member preferential treatment system, the honorary senior member system, and the selective membership system.

Due to the nature of the Amusement Park, Golf, and Hotel Businesses, the Group holds a relatively large amount of fixed assets, and a decline in asset value resulting from a drop in market value or profitability could impact operating results and financial condition. In the Arao City resort area where the Group's major fixed assets are concentrated, the Group is working to maintain the market value of its owned land and enhance its added value by creating vibrancy through the addition of new facilities, and by strengthening cooperation with Arao City in anticipation of the development of the (tentatively named) Arao North Interchange on the Ariake Sea Coastal Road (a high-standard highway).

Significant fluctuations in interest rates could impact the Group's operating results. As a countermeasure, the Group strives to build favorable relationships with financial institutions and to secure stable financing while paying close attention to the balance between short-term and long-term borrowings and between variable and fixed interest rates.

The Group recognizes deferred tax assets for deductible temporary differences and tax loss carryforwards; however, if actual taxable income differs from estimates, it may be determined that all or part of the deferred tax assets are not recoverable, requiring a reduction. This could impact the Group's financial position and operating results. As a countermeasure, the Group strives to carefully assess recoverability and to recognize deferred tax assets within a reasonable range.