Taiyo Kisokogyo Co.,Ltd.

The occurrence of occupational accidents and commuting accidents at construction sites is cited as a key risk. In the event of an accident, construction may need to be halted, requiring emergency response, cause investigation, and consideration of recurrence prevention measures, which could lead to construction delays and expanded losses. As a countermeasure, the company conducts on-site safety patrols and thoroughly promotes the principle of "Safety First, Human Life First."

The occurrence of defects or quality/precision deficiencies in completed properties is recognized as a business execution risk. Quality defects can lead to increased costs from rework and repairs, as well as loss of customer trust. Pre-construction review meetings are conducted for each construction scale to prevent such issues in advance.

There is a risk of cost overruns or profitability deterioration throughout the series of processes from confirming estimate conditions at the contract stage, to managing completion amounts, controlling construction costs including materials/equipment ordering and subcontractor labor costs, and finally settling adjustments and collecting payments after completion. If management is inadequate, deterioration in construction profitability directly affects business performance. As a countermeasure, the company has established a reliable management system for each process.

In schedule management premised on a 40-hour work week and complete two-day weekends, balancing the correction of long working hours with adherence to delivery deadlines has become a challenge. In particular, for construction using large specialized heavy machinery, schedule management with awareness of mechanical construction utilization rates is essential; insufficient management could lead to delivery delays and additional costs. The company addresses this through close sharing of construction period information and schedule management for each piece of machinery.

Bankruptcy of customers or business partners due to worsening cash flow or declining profitability is recognized as a risk that could lead to the inability to collect accounts receivable or difficulty in continuing construction work. Credit risk is particularly elevated for new business partners or when resuming transactions after a suspension or dormancy period. The company aims to prevent such issues in advance through diligent credit investigations and adherence to formal re-verification rules.

Long working hours, heatstroke, everyday health disorders, and mental health issues among employees and partner company employees are cited as human-related risks. The worsening of health issues could lead to loss of workforce, reduced productivity, and even the occurrence of legal liability. The company addresses this through 100% implementation of health checkups for all personnel and the utilization of and interviews with industrial physicians.

Legal disputes related to construction contracts with customers and partner companies, as well as violations of various laws and regulations and compliance issues, are recognized as business risks. Contractual disputes are particularly likely to arise with new business partners or when resuming transactions after a suspension or dormancy period. The company's countermeasures include following formal re-verification rules without omission and consulting with lawyers at an early stage.

As the frequency of information system usage increases, the risk of leakage of highly confidential information such as estimates and drawings is rising. In the event of a security incident, substantial damages may be incurred, and there are also information management risks associated with information sharing and editing by multiple employees on the internal network. The company addresses this by making security settings a habitual practice for confidential information and thoroughly emphasizing caution when using the internal network.

Chain-reaction risks originating from the supply chain are cited as a concern for business continuity. Deterioration in the management or supply stoppage of business partners or subcontractors could spread to affect the execution of construction work, potentially leading to construction delays and rising costs. Specific countermeasure details are not explicitly disclosed in the securities report, but this is addressed as part of business partner management.

Natural disaster hazard risks such as earthquakes, floods, and wildfires associated with climate change, as well as pandemic risks such as coronavirus infections, are recognized as risks that cannot be directly controlled. These events could significantly impact business continuity through the suspension of construction site operations and difficulty securing personnel. The company addresses this by regularly conducting company-wide BCP (Business Continuity Plan) drills, including a safety confirmation system.