Giken Holdings Co.,Ltd.

The majority of the Group's civil engineering-related business and formwork leasing-related business are directed toward public works projects and are dependent on public investment by government agencies. Future fluctuations in the scale of construction investment and priority investment areas may have a significant impact on business performance. In response, the Group focuses on steady information gathering and order-taking activities as well as improving gross profit margin, aiming to build a corporate structure resilient to change.

If an accident occurs during construction work, the Group may be subject to administrative dispositions by the ordering government agency or supervisory authorities. In addition, natural disasters may cause construction interruptions, delays in material procurement, and increased costs associated with repairs, which may have a significant impact on business performance and financial condition. The Group thoroughly manages safety through regular patrols centered on the Health and Safety Committee, while securing ample cash liquidity through the use of internal reserves and long-term borrowings from financial institutions.

If it becomes difficult or delayed to pass on rising prices of steel and other construction materials, increased transportation costs, and rising labor unit costs to contract amounts or selling prices, construction costs may rise and profit margins may decline, which may have a significant impact on business performance and financial condition. In response, the Group closely monitors market trends for purchased materials and makes advance purchase reservations as necessary, thoroughly managing costs to secure profits.

Construction companies nationwide, the Group's main customers, continue to face a difficult business environment. If customer companies fall into financial distress, bad debt losses on trade receivables may occur, which may have a significant impact on business performance and financial condition. In response, in addition to recording allowances for doubtful accounts based on past write-off experience, the Group minimizes credit risk by setting screening criteria for customers' creditworthiness and payment terms.

The Group is subject to legal regulations such as the Construction Business Act, the Subcontract Act, and the Industrial Safety and Health Act, and any abolition, amendment, or enactment of these laws may affect business performance. The Group addresses this by thoroughly ensuring company-wide compliance management.

Based on contracts with customers, the Group bears warranty liability (non-conformity liability under contract) for a certain period. If a serious defect occurs, it may result in loss of customer trust as well as compensation claims, which may affect business performance. The Group strives to minimize this risk through thorough quality control.