Toyo Asano Foundation Co.,Ltd.

The core Foundation Business is significantly affected by demand trends in each market. If demand falls below expectations, both sales volume and sales prices could be affected, potentially impacting business performance. The Company is working to build a production system capable of responding to demand fluctuations.

Key raw materials and energy sources such as cement, steel, and LNG are subject to significant fluctuations due to market prices. If market prices rise, increased procurement costs could impact business performance. The Company is working daily to reduce procurement prices through dialogue with suppliers, among other measures.

The balance of interest-bearing debt at the end of the consolidated fiscal year was ¥8,520 million, and borrowings from financial institutions are the primary means of funding for the Tokyo Plant renewal construction and the new head office construction. If market interest rates rise beyond expectations, an increase in interest payment burden could impact business performance. The Company is formulating a steady repayment plan through consultation with financial institutions and working to reduce interest-bearing debt.

It is difficult to completely eliminate the risk of bad debts arising from a sudden deterioration in the financial condition of customers, and depending on the size of the receivables, this could significantly impact business performance. The Company strives to prevent bad debts in advance through a credit management system centered on a credit committee.

The Group conducts business activities under construction business licenses and other permits, and if such licenses or permits were revoked due to violations of laws and regulations, it could disrupt business operations and significantly impact business performance. The Company continuously works to comply with license acquisition requirements and relevant laws and regulations.

If quality defects occur due to human error or unforeseeable causes, this could result in failure to meet customer quality requirements or construction delays, and could also impact business performance through damage claims and other consequences. The Quality Control Committee, comprising the manufacturing, construction, and sales departments, works to share issues and prevent trouble before it occurs.

If a major accident occurs in any area, including manufacturing and construction, this could impact business performance not only through substantial compensation costs but also through loss of social trust. The Group works to ensure safety and prevent accidents before they occur through company-wide internal training and on-the-job training (OJT), among other measures.

If natural disasters occur due to climate change, such as rising temperatures, heavy rains, or typhoons, this could impact business performance through the suspension of production and sales activities or delivery delays. The Company is advancing management strategy initiatives toward decarbonization, including the smart energy business at the Tokyo Plant (Excellence Award at the 2023 Cogeneration Awards) and the ZEB conversion of the head office (having obtained the highest rating under the Green Loan Framework).