Nihon Suido Consultants Co., Ltd.

If defects occur in deliverables of construction consulting services, in addition to the risk of developing into accidents involving loss of life, this could lead to widespread suspension of designation, substantial additional costs from remediation of completed works, and significant reputational decline, potentially having a material impact on business performance. The Group has established a design verification, design review, and validation system based on ISO9001 across all projects, and works to prevent the occurrence of defects by promoting communication through PMO meetings.

While the business environment remains solid due to demand for national resilience enhancement and social infrastructure maintenance, if there is a decrease in subsidies from government agencies, a reduction in ODA investment, or a delayed response to social demands and changing customer needs regarding environmental issues, this could affect business performance through a decline in order volume. The company works to address social demands through regular information gathering on the business environment and grasping/managing CO2 emissions.

If competition for orders with competitors in the construction consulting market intensifies, this could lead to a significant decline in orders through substantial reductions in order prices or loss of relative competitive advantage due to improvements in competitors' technical and service capabilities, thereby affecting business performance. The company strives to maintain and enhance its competitive advantage through expansion of PPP/PFI-related operations, research and development of new technologies, and strategic human resource development.

Due to the nature of the business, which involves handling customers' personal information and confidential information of business partners, if information is leaked due to computer virus intrusion, cyberattacks, or other unforeseen circumstances, this could result in a decline in social credibility and costs arising from damage compensation claims, thereby affecting business performance. The company has built an appropriate information management system through the development of regulations based on the Personal Information Protection Act and thorough dissemination through training for all officers, employees, and outsourcing partners.

If unexpected changes in legal systems, fluctuations in political and economic conditions, or unforeseen circumstances such as terrorism or conflict occur in countries or regions where the company operates overseas, this could affect business performance. The company has established a system to ensure employee safety through the development of a crisis management manual (overseas edition), and has established a business continuity system for emergencies through monthly sending and confirmation of emergency contact information to overseas business locations.

If the company violates legal regulations such as the Antimonopoly Act, the Act on Promotion of Subcontracting Small and Medium-sized Enterprises, or the Building Standards Act, including the construction consultant registration that is a prerequisite for its main business, or if important licenses are revoked, this could have a significant impact on business performance due to loss of social credibility, among other factors. The company has established regulations and management systems related to legal compliance, thoroughly instills compliance awareness through annual training, and has established a system for the prevention and early response to legal violations through internal and external audits.

In addition to the risk that excessive labor due to inadequate time management could lead to loss of personnel through mental and physical illness, there is a possibility that the company could be sued for harassment, resulting in substantial damage compensation claims and difficulty in securing personnel due to a deteriorated image. The company has established a monitoring system that reports monthly working hours to the management meeting, and strives to prevent harassment through the establishment of harassment prevention regulations, training, and operation of an internal reporting system.

For the Group, which positions human resources as its most important management resource, if planned recruitment and development of personnel cannot be carried out, or if personnel attrition exceeds expectations, this could affect business performance through increased burden on existing employees and delays in normal operations. The company is strengthening recruitment through internship and returnee hiring programs, reporting reasons for resignation to the management meeting, examining and implementing measures to prevent personnel attrition, and strengthening development through annual training and technical succession activities.

In addition to the risk of business operations being disrupted by system downtime caused by cyberterrorism, if information leakage occurs due to loss of information equipment, this could affect business performance through substantial costs from investigation and reporting, suspension of transactions, and damage compensation claims. The company has implemented antivirus software, firewall construction, regular backup storage, and recovery procedure manuals, in addition to functions to prevent misdirected emails, encryption of information equipment, and thorough dissemination through regular training.

Due to the characteristic of having government agencies as major customers, revenue tends to be concentrated in the first half of the year (January to June). In the actual results for FY2025 (ending December 2025), revenue was ¥7,126,471 million in the first quarter and ¥6,276,672 million in the second quarter, while it declined to ¥4,630,253 million in the third quarter, confirming seasonal fluctuation, and there is a possibility that shifts in the timing of order receipt and revenue recognition due to customer circumstances could affect business performance. The company works to mitigate the seasonal cycle by acquiring new customers such as general business corporations, and manages the timing of revenue recognition appropriately through thorough project progress management.