Jibannet Holdings Co., Ltd.

The Group operates its business centered on the Ground Engineering Business, and if this business contracts due to drastic changes in the business environment, intensified competition, the emergence of similar services, or other factors, it could have a material impact on business results. The Group is considering cultivating new businesses to diversify its earnings base, but at present it remains highly dependent on the Ground Engineering Business.

The ground-related market is expected to contract due to a decline in new housing starts caused by the declining birthrate and aging population. The Group is working to differentiate itself and expand market share through the provision of new services, but if service superiority is lost due to the emergence of similar services or other factors, business results could be affected.

In providing its services, the Group obtains personal information of customers, building owners, and others, and there is a risk of unauthorized external access or internal information leakage. Although the Group has implemented measures such as enhanced security and employee training, if a leakage were to occur, business results could be affected through damage compensation or loss of credibility.

The Group conducts ground analysis based on ground survey data in accordance with relevant laws and guidelines, but if numerous cases of differential settlement or other issues occur due to analysis errors caused by factors unforeseeable with current survey technology or by negligence, business results could be affected through loss of credibility or a surge in insurance premium rates. The Group strives to ensure quality by maintaining an appropriate process for determining housing foundation specifications.

If a ground-related accident such as differential settlement occurs at a house for which a ground quality certificate has been issued, the Group bears an obligation to compensate for ground repair construction costs and other expenses for a period of 10 or 20 years from the date of delivery. The Group provides for this through property and casualty insurance contracts with major insurance companies, but there is no guarantee that such insurance can be continued under equivalent conditions in the future or that compensation will be sufficient; if it becomes difficult to continue the contracts, business results and other matters could be affected.

At the end of the current consolidated fiscal year, trade receivables accounted for a high proportion of total assets at 26.3%. If receivables become delinquent due to deterioration in a business partner's cash flow or other factors, requiring an increase in the allowance for doubtful accounts, business results and other matters could be affected.

Ground analysis operations are not currently a legally regulated service, but if legal regulations are established in the future, or if changes to the provisions or interpretation of the Housing Quality Assurance Act or the Act on Ensuring Performance of Warranty for Specified Housing Defects diminish the significance of ground quality certification, business results could be affected. A similar risk would also arise if ground analysis standards for detached houses were to be clarified.

Group companies operate their businesses after obtaining licenses and permits such as construction business licenses, registration as first-class architect offices, and real estate brokerage licenses. If any of these were revoked or not renewed, it could impede the continuation of other businesses (housing design, construction, real estate sales, etc.), potentially having a material impact on business results. The Group is not currently aware of any facts that would constitute grounds for revocation or failure to renew.

The Group aims to maintain a small-scale organizational structure, and securing experienced sales personnel and personnel with strong ground analysis capabilities is key to business continuity. If the Group is unable to secure personnel as planned, or if an unforeseen event occurs affecting employees who form the core of the business, business results could be affected.

Since the consolidated financial statements are prepared by translating the financial statements of overseas consolidated subsidiaries into yen, fluctuations in the exchange rates of local currencies could affect the Group's financial position and operating results. No specific countermeasures such as foreign exchange hedging are explicitly disclosed in the securities report.