Arr Planner Co.,Ltd.

As detached housing sales account for the majority of consolidated net sales, there is a risk that housing demand will fluctuate due to various factors such as economic conditions, interest rates, geopolitical risks, housing tax systems, and land price trends. These fluctuations may directly affect business performance and financial condition. In response, the Group continuously monitors real estate market conditions, demographic trends, and economic sentiment, and promotes improved customer acquisition efficiency through digital marketing.

At the end of the current consolidated fiscal year, real estate for sale and real estate for sale in process accounted for 73.5% of total assets. If changes in the economic environment make it difficult to sell at expected prices, there is a risk of reduced profit due to discounted sales or significant valuation losses on inventory. Additionally, a prolonged inventory holding period, inability to deliver homes due to customers' failure to pass mortgage loan screening, and impairment losses on income real estate and housing showrooms may also affect business performance and financial condition. In response, the Group monitors the inventory holding ratio and inventory turnover ratio, and reviews sales prices in a timely manner.

At the end of the current consolidated fiscal year, the consolidated balance of interest-bearing debt was ¥19,394,191 thousand (equivalent to ¥19,394 million), and the ratio of interest-bearing debt to total assets stood at a high level of 55.2%. If sufficient fundraising becomes difficult due to fluctuations in interest rate levels or sudden changes in monetary policy, this may affect business performance, financial condition, and business development. In response, the Group maintains and strengthens relationships with financial institutions and strictly monitors the use of funds.

There is a risk of rising procurement costs, delivery delays, or procurement difficulties for lumber, building materials, housing equipment, and other supplies due to the materialization of geopolitical risks, supply-demand fluctuations, and exchange rate movements. If cost reductions or sales price revisions are difficult, or if delays occur in building completion or delivery, this may affect business performance and financial condition. In response, the Group is diversifying and strengthening ties with procurement sources, considering alternative products, and enhancing construction contract terms and conditions.

Fluctuations in surrounding market prices may lead to land acquisitions at prices higher than market rates. In addition, if the Group is unable to secure land with favorable location conditions as planned, due to regional imbalances or soaring land acquisition prices, this may affect business performance and financial condition. In response, the Group is building a system for continuously gathering property information, diversifying regions between the Tokai area and the Greater Tokyo area, and dispersing risk through a one-stop approach to housing and real estate.

While Aichi Prefecture, the Group's main market, ranks first nationwide in the number of newly started custom-built housing units (2025 annual data), indicating strong demand, there is a possibility of intensifying competition due to the presence of many competitors. The Group has also been expanding its presence in the Greater Tokyo area since entering it in 2019, but a decline in procurement or sales capability due to competitive pressures, a sharp decline in demand, or difficulty securing partner companies may affect business performance and business development. In response, the Group is pursuing risk diversification through expansion of its business areas and differentiation through digital marketing and a one-stop platform.

As much of the construction work for custom-built and subdivision housing is outsourced, if the Group is unable to secure sufficient subcontractors, or if subcontractors experience business difficulties or construction delays, this may affect business performance and financial condition. In response, the Group actively secures new subcontractors, investigates their financial condition, technical capabilities, and relationships with antisocial forces, confirms progress in real time, and thoroughly manages quality and safety through reporting meetings.

If the Group is unable to secure sufficient excellent human resources essential for corporate growth, or if current employees leave the company, this may affect business performance and business development. In response, the Group is promoting active recruitment activities, strengthening the development of human resources who carry on professionalism, and improving employee engagement by creating a workplace environment that respects diverse values.

Amendments or abolition of related laws and regulations, such as the Building Lots and Buildings Transaction Business Act, the Building Standards Act, the City Planning Act, the Construction Business Act, the Architects Act, and the National Land Use Planning Act, the introduction of new legal regulations, or violations of laws and regulations or the emergence of new obligations to appoint qualified personnel, may affect business performance and business development. The Group holds licenses such as the Specific Construction Business License (valid until March 2030), the Real Estate Broker License (valid until April 2027), and registration as a first-class architectural design office, and no grounds for revocation currently exist. In response, the Group continues to monitor related laws and regulations in advance and to disseminate information and provide training to employees.

Chairman and Representative Director Yusuke Koga and President and Representative Director Masaki Kozue play major roles in determining overall management policy and strategy, and the Group recognizes a high degree of dependence on both individuals. If, for any reason, either of them becomes unable to continue involvement in management, this may affect business performance, financial condition, and business development. In response, the Group is systematically developing successor candidates, promoting proactive involvement by the Board of Directors, and reducing dependence on individuals through delegation of authority and organizational strengthening.