HAZAMA ANDO CORPORATION

If the contraction of the construction market or intensification of competition proceeds beyond expectations, it may affect business performance through a decrease in order volume or deterioration in profitability. The Company addresses this through its Long-Term Vision, Medium-Term Management Plan, and single-year business plans, and in the event of unexpected changes in the environment, it aims to minimize the impact by revising plans as appropriate.

The Company is subject to a wide range of laws and regulations, including the Companies Act, the Financial Instruments and Exchange Act, the Antimonopoly Act, the Construction Business Act, and the Building Standards Act. If such laws are revised, abolished, newly enacted, or violated, significant restrictions may arise on business activities, potentially affecting performance. The Company has established a Compliance Promotion Committee and assigned compliance officers and staff to each department and major group companies to ensure fair and transparent business operations.

In business operations in foreign countries, unexpected revisions or abolitions of laws and tax systems, significant changes in political, economic, or social conditions, or large fluctuations in exchange rates may affect business performance. For countries where the Company already operates, it strengthens its internal systems in advance based on information obtained from local experts, and for new countries of entry, the Board of Directors carefully examines the feasibility of entry based on information from external experts.

If risk factors related to climate change materialize, such as the intensification of natural disasters or the strengthening of decarbonization regulations, this may affect business continuity and performance. Under the long-term vision "ANDO HAZAMA VISION 2030," the Company is promoting the expansion of renewable energy use and the development of environmentally conscious technologies based on its SBT and RE100 plans, while building a climate change governance structure centered on the Sustainability Committee.

If rapid changes in the domestic and overseas economic environment lead to shortages or sharp price increases in labor, materials, or energy, construction costs may rise significantly, affecting business performance. The Company is implementing measures such as cost reductions through centralized purchasing and overseas procurement, as well as including clauses in contracts with clients that allow for changes to contract amounts based on fluctuations in prices and wages.

If the Company is unable to secure a sufficient number of technical staff hires, it may be forced to scale down its business operations; in addition, the shortage of skilled workers, which is declining across the construction industry as a whole, and rising labor procurement costs may also affect business performance. The Company is promoting engagement improvement measures based on the human capital strategy of its "Medium-Term Management Plan 2028," and is working to maintain its construction execution capabilities by supporting partner companies with DX adoption, human resource development, and recruitment.

If occupational accidents occur at construction sites, this may affect business performance through temporary work stoppages or compensation payments to victims. Under the basic health and safety policy that "safety takes precedence over everything," the Company has established and operates an occupational health and safety management system, thoroughly implementing health and safety management for all workers involved in construction, including partner companies, and has established a rapid response system centered on the safety and environment departments of each branch office.

If a serious non-conformance with contract requirements occurs in a completed structure, this may affect business performance through loss of customer trust or the occurrence of compensation claims. The Company implements quality control at each stage of sales, design, construction, and after-sales care based on its quality management system, and for large-scale, highly complex construction projects, it has established specialized organizations to mitigate risk from both construction and technical perspectives.

If important information such as customer data is leaked externally, this may affect business performance through the loss of trust from customers and society, as well as the occurrence of damages claims. In addition to thorough daily information management, the Company implements initiatives in line with the government's Cybersecurity Month and continuously conducts awareness activities for all employees of group companies.

If the Company falls behind in adopting DX (digital transformation), operational efficiency improvements may stall, leading to lower productivity and higher labor costs compared to competitors, which may affect business performance through reduced price competitiveness. In addition to establishing a dedicated department to promote DX and formulating and publishing its "DX VISION," the Company newly established a "Digital Strategy Committee" in April 2026 to ensure consistency with overall digital strategy and to accelerate decision-making.