NOMURA Co., Ltd.

Depending on economic trends, there is a risk that capital expenditure and advertising expenses will be curtailed, leading to the postponement or cancellation of planned projects. Although the company has secured orders from a broad range of customers and maintains a stable business foundation, an economic downturn would inevitably affect performance. As countermeasures, the company is formulating staffing plans in anticipation of market trends, enhancing sales capability and productivity, and diversifying revenue sources through expansion of its business domains.

The company is subject to a wide range of laws and regulations, including the Construction Business Act and the Architects Act. If these laws are revised or abolished, or if a situation arises in which the company is found to be in violation of the law, it may hinder business operations and affect performance. The company continuously gathers information and analyzes the impact of trends related to relevant laws and regulations, and conducts advance study of response measures by relevant departments.

If a quality defect occurs in produced works, if a contracted waste disposal company illegally dumps industrial waste, or if an accident occurs at a production or construction site, this could damage the company's social credibility and give rise to liability for damages, thereby affecting order intake and performance. The company thoroughly manages these risks through the operation of ISO9001, ISO14001, and COHSMS, the establishment of an integrated management system, and the implementation of safety education including for partner companies.

The occurrence of a large-scale disaster or a novel virus pandemic could result in the suspension of lifelines, interruption or delay of construction work due to shortages of fuel, materials, or personnel, and damage to office buildings and equipment. It could also affect sales activities, such as through the postponement or cancellation of customers' store openings and event plans, or a reduction in order volume, associated with the halting of the regional economy. The company aims to minimize damage through the formulation of a BCP incorporating a mutual-support system across the group, the development of a crisis response manual, and risk transfer through insurance.

If material prices, labor unit costs, or other costs rise significantly after conclusion of a contract and this cannot be reflected in the contract price, performance may be affected. The company is closely monitoring market price trends and strengthening cost management, but due to the nature of fixed-price contracts, passing on cost increases can in some cases be difficult. The company addresses this through order adjustments based on the selection of key partner companies and through productivity improvements.

The company holds fixed assets, securities, and other assets for operational necessity, and significant fluctuations in their market value could affect performance. For listed cross-shareholdings, the significance of holding is reviewed each fiscal period; for unlisted shares, the financial condition is confirmed through means such as attendance at shareholders' meetings; and for business-use assets, information such as roadside land prices is collected each fiscal period to check for indications of impairment.

There are many uncertainties in developing new businesses aimed at expanding business domains, and there is a risk that unplanned cost increases may prevent the company from achieving the originally anticipated business profits. The Investment Evaluation Committee mitigates this risk by confirming in advance the cost-effectiveness of investment projects as well as anticipated risks and countermeasures.

The company operates in various countries, primarily in Southeast Asia, and sudden changes in political or economic conditions, large exchange rate fluctuations, or unexpected changes in legal regulations could affect performance. The company addresses this through the establishment of overseas risk information response guidelines to thoroughly disseminate risk management, and through the development of occupational health and safety systems.

If a system outage, unauthorized access, or similar event occurs, it could reduce business efficiency and social credibility, thereby affecting performance. The company strives to prevent the leakage of confidential information through data backup, encryption, access privilege settings, and password management, but risks associated with the increasing sophistication of cyberattacks continue to exist. The company has implemented measures such as establishing information management regulations and a basic information security policy, appointing an officer responsible for information security, and restricting the use of personal information devices.

In M&A transactions aimed at business expansion or entry into new businesses, if the anticipated business development cannot be achieved, an impairment loss may occur and affect performance. The company manages this risk by confirming cost-effectiveness and risks at the Investment Evaluation Committee, thoroughly examining business plans and future value, and conducting follow-up and regular monitoring toward realizing synergies after the acquisition.