The Global Ltd.

The Company procures land acquisition and construction funds primarily through borrowings from financial institutions. At the end of the fiscal year under review, the balance of interest-bearing debt stood at ¥25,978,267 million, and the interest-bearing debt dependency ratio remained high at 64.19% (75.14% in the previous fiscal year). This high level is expected to continue as the business expands, and in a rising interest rate environment, financial costs may increase, potentially affecting business performance and financial condition. The Group has indicated a policy of striving to avoid such occurrences and to respond appropriately if they occur, but no specific interest rate hedging measures are disclosed.

In real estate development, the Company borrows business funds from financial institutions at the time of land acquisition. If property handovers do not proceed as planned or if relationships with financial institutions deteriorate, there is a risk that extending repayment deadlines may become difficult and early repayment may be demanded. If alternative fund procurement cannot be secured, cash flow could become tight, potentially having a material impact on business continuity. At the end of the fiscal year under review, short-term borrowings stood at ¥5,019,200 million and long-term borrowings due within one year stood at ¥10,408,100 million, representing a heavy short-term repayment burden.

The business structure is highly susceptible to economic trends, interest rate trends, land price trends, tax reforms, and other factors. If deteriorating economic and employment conditions reduce consumer purchasing intent or investor investment appetite, business performance may deteriorate. In addition, if the value of development real estate and real estate for sale already acquired declines, this could also affect the financial condition through recording of valuation losses on inventory assets. The Group has indicated a policy for responding to changes in market conditions, but no specific hedging measures are disclosed.

Due to changes in real estate market conditions and intensifying competition for land acquisition, it may become difficult to acquire quality land that meets the Company's profitability standards. Although the Company has established certain profitability criteria for selecting properties to acquire, if intensifying competition with rival companies prevents securing properties that meet these criteria, this could affect future sales and profits through a reduction in the pipeline.

The real estate brokerage business has relatively low entry barriers, with numerous real estate companies competing. If intensifying competition causes a decline in sale prices, or if in the Sales Agency Business a client developer switches to another company or to in-house sales, sales and profits may decline. The Group also engages in the Sales Agency Business, and maintaining relationships with client developers is directly linked to business performance.

Construction work for the Condominium Development Business and the Income Property Business is entirely outsourced. If accidents occur during construction, if a subcontractor goes bankrupt or fails to fulfill its contractual obligations, or if other unforeseen events occur, construction may be halted or delayed and construction costs may rise, affecting business performance. As countermeasures, the Company holds weekly progress meetings and confirms construction schedules through regular meetings with design supervisors and subcontractors, while also working to eliminate dependence on specific subcontractors.

Although various surveys are conducted at the time of land acquisition, if defects such as soil contamination or buried objects are discovered after the fact, or if opposition movements arise among nearby residents due to construction noise or post-completion shadowing, project schedules may be delayed and additional costs may be incurred. If such events occur on a scale exceeding expectations, this could affect business performance.

In the Condominium Development Business, Income Property Business, and Sales Agency Business, sales are recognized at the time of property handover, resulting in a structure where revenue recognition for large-scale, high-profit projects tends to concentrate in specific periods. If handover timing is pushed beyond the end of the fiscal period due to unforeseen circumstances such as construction delays, this could have a significant impact on business performance and financial condition for that period.

The Company's business continuity is premised on licenses and permits under the Building Lots and Buildings Transaction Business Act, the Act on Advancement of Proper Condominium Management, and other laws. If the Company receives a business suspension order or license revocation, this would significantly impede business operations. The real estate brokerage licenses of major Group companies (Minister of Land, Infrastructure, Transport and Tourism License (1) No. 10614, Tokyo Governor License (6) No. 77167) are both valid until 2029, and no grounds for revocation currently exist. However, new regulatory tightening due to amendments to laws such as the City Planning Act and the Building Standards Act may also affect business performance.

Through its Condominium Development, Income Property, Sales Agency, Building Management, Hotel, and other businesses, the Group handles a large amount of customer personal information. If information leakage occurs due to unauthorized intrusion or unauthorized access, this could affect business performance through damage claims and loss of social credibility. As countermeasures, the Company implements locked storage, password management, and regular training led by the Compliance Committee, but risks associated with increasingly sophisticated cyberattacks continue to exist.