This document describes the main risks that may affect the Group's business performance and financial position, etc., and that may have a significant impact on investor decisions.
Please note that any matters relating to the future are based on judgments made by our Group as of the last day of this consolidated fiscal year.

In the course of its business operations, the Group is subject to various legal regulations and certifications, including the Construction Business Act, Product Liability Act, JIS Act, various environmental laws, and various labor-related laws. If the Group is unable to comply with these laws and regulations, or if it is unable to meet the inspection standards required for certification renewal, this could have a significant impact on the Group's business performance.
The main licenses and permits obtained are outlined below.

Our group strives to collect information on the amendment and abolition of related laws and regulations, as well as new laws and regulations, and strives to comply with laws and regulations and improve the quality of our work by setting quality targets and conducting quality patrol activities at our factories, etc. As a result, there are currently no reasons for the revocation of the above licenses and permits.

Our group has sales offices and factories all over Japan. If a large-scale natural disaster were to occur and these business locations were to be affected, it could cause damage to employees, buildings and facilities, which could affect the continuity of our business activities. In order to ensure the safety of our employees and minimize the impact on our business activities, our group has formulated a BCP (Business Continuity Plan) for our head office and key regional locations. We are also working to improve our environment by establishing a disaster response headquarters to handle initial responses in the event of a disaster, creating a backup system for head office functions to enable rapid business recovery, and decentralizing our design and development functions.
However, if the scale and scope of a natural disaster exceeds our expectations, it could have a significant impact on our group's financial position and business performance.

A certain percentage of the Group's concrete business sales, and the majority of its Slope Disaster Prevention Business sales, are for public works projects determined by the policies of the national and local governments. The Group focuses its management resources on supplying various products, materials, and construction methods essential for the development of social capital and infrastructure for daily life, focusing on products needed for national resilience and disaster prevention/mitigation, and the maintenance of aging infrastructure, and in addition to developing its business by identifying public works areas where budgets are allocated on a priority basis even in a severe financial situation, the Group is actively promoting the expansion of the supply of products for private demand in urban and suburban areas where construction investment is large.
However, depending on the scale of future public works projects and the allocation of their budgets, there is a possibility that this will have a significant impact on our group's performance.

In the concrete and pile businesses, although there are variations among individual products, overall demand has been on a downward trend in recent years, and the competitive environment has become increasingly severe. In this environment, in the concrete business, our group is working to maintain and expand our performance by focusing on orders for original products and high value-added products that are less exposed to price competition, and increasing the proportion of these products in our business. In the pile business, we are strengthening sales of the Hyper Straight method, which is one of the high-bearing capacity pile construction methods for which demand is increasing, and narrowing our sales area to areas where we have strengths, in an effort to maintain and improve profitability.
However, if a product group that is difficult to differentiate based on product functionality, construction quality, etc. is exposed to more severe price competition than expected, it could have a significant impact on the Group's business performance.

The prices of cement and steel, which are the main raw materials for the concrete and pile businesses, and petroleum, which is the fuel, are subject to market fluctuations. In addition, due to the chronic labor shortage in the logistics industry and the enforcement of the revised Work Style Reform Act in April 2024, the Group's product transportation costs have been increasing year by year. The Group is working to reduce costs by improving productivity, reduce transportation costs by transferring production to factories closer to the delivery area, and revise sales prices. However, if the prices of raw materials, etc. continue to rise due to future market trends, etc., and the Group is unable to pass on the entire increase in costs to customers, this may have a certain impact on the Group's business performance.

With the chronic labor shortage in the construction industry, there is a growing trend to expand the use of concrete products, which are superior in terms of quality and construction time compared to on-site ready-mix concrete, but at the same time, it is becoming difficult for our Group to secure human resources. As part of our efforts to secure human resources, our Group is working to improve our recruitment capabilities, shorten work hours, introduce flextime, and enhance flexible leave systems, including childcare and nursing care leave, as well as to create a working environment in which diverse human resources can work flexibly according to their own circumstances. In addition, in the production department, we have begun introducing robots into some processes as an effort to reduce the number of people required for production and shipping preparation processes.
However, if securing sufficient personnel is less than expected and we are unable to respond to customer needs, this could have an adverse effect on our business performance.

There is a risk of serious accidents and industrial accidents occurring at the Group's factories and product installation sites. The Group strives to prevent accidents and industrial accidents by thoroughly maintaining and inspecting equipment, providing safety and health education, and conducting regular safety patrols, but if a serious accident or industrial accident were to occur, the financial position and business performance of the Group could be affected by personal and material damage, compensation costs, and production stoppages.

Our group is engaged in research and development activities to develop and launch products that anticipate market needs and wants. In addition to the existing technical department, we will launch a technical research institute in April 2023 to introduce a system for examining and evaluating development themes and managing the progress of development across the group, and we are working to achieve even greater results.
However, there is no guarantee that all of these activities will lead to future profits, and depending on the results of our research and development activities, there is a possibility that our business performance may be affected.

For the Group, intellectual property rights such as patents are one of the factors that differentiate us from other companies and are important management resources. The Group takes appropriate procedures for acquiring and protecting intellectual property rights in accordance with laws and regulations, and takes great care not to infringe on the rights of third parties, including intellectual property rights.
However, if the Group's intellectual property rights are not adequately protected, or if the Group infringes the rights of a third party, this could adversely affect the Group's business performance, including the loss or reduction of revenue opportunities and the payment of damages.

While striving to achieve further growth in its concrete, pile and Slope Disaster Prevention Business the Group is also working to expand into other businesses and explore new business ventures while controlling risks. However, if these activities do not produce the expected results, this could have an adverse effect on the Group's business performance.

In the course of its business activities, the Group may obtain confidential information of customers, and also possesses confidential commercial and technical information of the Group. The Group takes great care in managing information by establishing and implementing various regulations regarding information security and information management, providing thorough in-house education, and obtaining compliance pledges from employees.
However, if this information is leaked or lost due to cyber-attacks that are becoming increasingly sophisticated every year, or intentional or negligent acts by employees, the Group's business performance could be adversely affected by the need for compensation for damages, loss of social credibility, loss of competitive advantage, etc.

The Group continues to make capital investments to improve quality and productivity. In addition, we conduct M&A as necessary to grow our business. When making investment decisions, the Group carefully considers the investment effect, and with regard to M&A investments, we provide appropriate management guidance and actively participate and cooperate with the companies to create synergies even after the investment, striving to maintain and increase the investment value.
However, if property, plant and equipment and intangible assets, including goodwill, do not generate the expected cash flows, it will become necessary to recognize impairment losses. If a large amount of impairment losses is recognized as a result, it may have an adverse effect on the Group's business performance.

In the concrete, pile and Slope Disaster Prevention Business, we have a certain amount of transactions with small and medium-sized businesses. In addition to setting appropriate credit limits for each business partner, the Group strives to grasp the business conditions of business partners in a timely manner and implements thorough credit management.
However, if credit concerns about borrowers or other factors cause bad debt losses or require additional provision for doubtful accounts, this could have an adverse effect on the Group's financial position and business performance.