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Business Risks

The risks that could influence our future operating results, stock prices, financial condition, and so on are as follows. The matters expressed in this document are the conclusion of our corporate group as of May 14, 2018.

Risks associated with economic conditions

The core business of our corporate group is building facility maintenance, with reform and construction playing a supplementary role. Currently Japan's business climate is experiencing a slight upturn, but client demands for the lowering of maintenance costs could intensify due to cost reviews and the intensification of competition for new orders, affecting company performance.

Risks associated with maintenance / construction accidents or disasters

The services we provide for our clients include building facility maintenance with reform and construction. During service delivery, construction, or at other times, there is a risk of loss or client inconvenience due to human error by employees. Regarding equipment installation, there is the possibility of having to undertake repair work due to defect liability within a specified period after installation. Litigation in connection with such incidents could also occur. We diligently avoid these risks by carrying liability insurance, but losses not covered by insurance and weakened brand power through loss of confidence could affect company performance.

Risks associated with regulatory requirements, business practices, and management policies

For building facility maintenance with reform and construction of government related projects, we participate in a bidding system for orders and contracts. There are risks due to changes in that system's participation qualifications and so on. Losing the opportunity to bid, introduction of a designated management system for the privatization of government enterprises, and the possible resulting loss of orders due to order disbursement could all affect company performance.

Risks associated with international expansion

We expanded into China, Bangladesh, Singapore, Thailand, Malaysia, Vietnam, and Myanmar. Our further international expansion will focus on Asia. Conditions such as these countries' political situations, economic disorder, and unforeseen currency fluctuations could affect our business performance.

Risks associated with asbestos

The problem of lung cancer from asbestos exposure and the occurrence of malignant tumors in workers is increasing. In providing on-the-spot service, we check for asbestos, but there is always the possibility of encountering similar phenomena in the future.

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