Risk and Opportunity

Business Opportunities and Major Activities

Accurately identify business opportunities in different target markets that each segment focuses on and strongly promote initiatives for market expansion.

Segments Target Markets Business Opportunities Major Activities
Disaster Prevention and
Infrastructure		 Disaster Prevention and Infrastructure Continuing expansion of demand for maintenance of aging infrastructure Enhancement of businesses such as geophysical exploration technology for tunnels, roads, dams, and other structures, and maintenance and managemant services
Growth of the national budget for building national resilience amidst the increase in the severity of natural disasters Enhancement of disaster mitigation solution business for multiple types of natural disasters
Instruments and IT Rapidly growing demand for providing land information and supporting a business continuity plan (BCP), including monitoring of ground, environment, hazards, etc. Enhancement of BCP-related business, including the development and provision of a wide variety of monitoring instruments
Environment
and Energy		 Natural Environment and Resource Recycling Increase in demand for responses to environmental issues such as biodiversity, brownfield land, water resources, and mobility Enhancement of solutions services for various environmental issues
Expansion of demand for the creation of a decarbonized society and a sustainable recycling-oriented society Enhancement of support services for developing regional decarbonization strategies, disaster waste disposal plans, etc.
GX and Blue Economy Rise in demand for non-fossil energy, including renewable energy Enhancement of support for renewable energy-related services such as offshore wind farm support
International Disaster Prevention and Infrastructure Infrastructure development plans in the Middle East and Singapore Participation in surveys and monitoring for skyscraper construction and underground excavation
Natural Resources and Energy Shift from natural resource exploration markets to renewable energy markets Refinement and optimization of geological survey technology used in the oil and gas market for offshore wind farms

Business and Other Risks and Main Measures

The main risks that affect management performance, stock price, financial position, and the like of the OYO Group include the following. The Group's policy aims to prevent identified risks from occurring, and to implement suitable measures if they do arise. The matters for the future shown below are the OYO Group's judgment as of the end of December 2024.

Risk Item Risk Overview Measures to Minimize Risks
Risk related to the high proportion of orders from the public sector The Group's business performance may be impacted by a decrease in orders from our primary clients, which include national and local governments. Factors that could lead to such a decline include a worsening of their financial status, a reduction in business volume, changes in their procurement practices, or the suspension of nominations due to unforeseen events or circumstances. Promote breaking out of a traditional business model that is dependent on public works.
Risk of liability for defects in deliverables The Group conducts various survey operations and manufactures and sells measuring instruments in each business. If defects (contract nonconformities) occur in such deliverables and the Group receives large damage compensation claims, this may affect business performance, etc.
  1. Ensure and improve quality through introduction of quality management systems (ISO 9001) and implementation of strict reviews.
  2. Purchase liability insurance as a risk mitigation measure in case liability for defects in deliverables occurs.
Foreign currency risk The Group operates in Japan and internationally, with overseas subsidiaries primarily in North America and Singapore conducting business in their local currencies. As a result, fluctuations in foreign exchange rates may impact our financial position and overall business performance. Consider measures such as forward exchange contracts as necessary.
Risks related to climate change and natural disasters If the Group experiences earthquakes or natural disasters related to climate change, such as typhoons, heavy rains, and floods, or any other unforeseen disasters like fires, it could lead to a decrease in business operations or production capacity. This decline may occur due to damage or loss of production equipment and data, as well as the loss of human resources, which could ultimately impact the business performance.
Additionally, developments such as the introduction of a carbon tax and the adoption of environmentally friendly equipment may increase business operational costs.
  1. Work on climate change countermeasures while aiming for carbon neutrality by reducing greenhouse gas emissions to net zero by 2050.
  2. Establish a business continuity plan (BCP) anticipating the occurrence of disasters and implement inspection and training in accordance with the plan.
  3. Continuous assessment / monitoring of the effect of climate change on business operations.
Risk related to the occurrence of a global spread (pandemic) of infectious disease Due to the global spread of infectious disease, the Group's business may be adversely affected by a decrease in demand, delivery delays, shortages of parts and materials, and increased procurement costs in the supply chain. These factors could impact overall business performance. Work on initiatives for minimizing the impact by anticipating various risk scenarios.
Risks related to international conflicts and terrorism If an international conflict or act of terror occurs in a country or region where the Group operates and is involved in the conflict activity or armed action, it may cause a significant impact on our operations, such as disruption or stoppage of business.
In addition, with the prolongation of the Ukrainian conflict, its impacts on the global economy, such as soaring energy and raw material prices, may also continue.		 Collect information related to public safety and the latest economic situations in foreign countries as required.
Risks related to intellectual property If an injunction is filed against the use of intellectual property or a claim is filed requesting cessation of trademark use or compensation for damages related to the Group's services or products that utilize proprietary technology, the Group's business performance may be affected. Appropriately manage intellectual property by establishing a responsible organization.
Risks related to resource price fluctuations If a slump in resource prices, contraction of the resource development market, or similar event occurs, the business performance of overseas subsidiaries selling natural resource exploration equipment and systems may be affected. Review of the business portfolio, such as reduction of resource dependency through the development of new markets.
Risks related to data fabrication / falsification / appropriation If data fabrication or falsification occurs in violation of internal rules, or if past data or other data is misappropriated, it may result in loss of credibility and claims for damages, which could affect our business performance.
  1. Thorough compliance traning.
  2. Validate business processes and review business manuals at the ISO Management Business Audit Office.
Risks related to security management of IT systems If the IT system stops, ransomware attacks occur, or information leaks occur due to computer viruses or unauthorized access by malicious third parties, it may have a significant impact on business operations.
  1. Enhancement of safety and information security of IT systems.
  2. Enhancement of defensive measures against ransomware attacks.
  3. Establish related rules and regulations.
  4. Conduct regular training for suspicious e-mails from external sources.
Risks related to securing talent As the working population declines due to the declining birthrate and aging population, if securing and nurturing superior talent with high-level expertise does not proceed, our operations and business performance may be affected.
  1. Promotion of health management to systematically support actions to maintain and enhance employee health.
  2. Creation of a pleasant working environment and improvement of employee engagement.
  3. Enhancement of training system.
  4. Stable recruitment of new graduates and securing superior mid-career recruits.
Risks related to legal regulations The Group is subject to various laws and regulations in Japan and abroad where it operates. If these laws are revised or if new regulations are introduced due to changes in social conditions or other factors, it may impact the Group's financial position and business performance.
Furthermore, if a regulatory authority determines that any part of the Group's business transactions violates laws or regulations, the Group may face administrative consequences, such as fines or a loss of public trust.
  1. Collect the latest information on relevant laws and regulations as required, including developments related to their revision.
  2. Thorough internal education on legal compliance.
Risk of impairment of assets held In the event of a significant decline in the market price of the securities held, a deterioration in the financial status of the relevant companies, or similar circumstances, there may be an impact on the financial position and business performance of the Group.
In the event of a decline in the price of real estate owned or similar assets, the Accounting Standard for Impairment of Fixed Assets may be applied, which could potentially impact the Group's financial position and business performance.		  
Risks related to deferred tax assets If a significant change occurs in the estimate of future taxable income or there is an institutional change, it may result in a decrease in deferred tax assets that have been booked and affect the Group's financial position and business performance.  
Management Plan

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