Risk and Opportunity

Business Opportunities and Key Initiatives

Seizing Business Opportunities in each segment and Creating New Markets

  Business Opportunities Key Initiatives
Infrastructure Maintenance, Management, and Renovation 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 services
Natural Disaster Prevention and Mitigation Growth of the budget for building national resilience amidst the increase in severity of national disasters Enhancement of disaster mitigation solutions business for multiple types of natural disasters
Environment Increase in demand for responses to environmental issues such as brownfield land, water resources, and mobility Enhancement of solutions services to various environmental issues
Natural Resources and Energy Rise in demand for non-fossil energy including renewable energy Enhancement of support for renewable energy-related services such as offshore wind power generation projects

Business Risks and Main Measures

Below are the Significant Risks that could affect our Group's operational performance, stock price, and financial status. We are committed to realizing the potential for these risks within our Group, making every effort to prevent their occurrence, and responding appropriately to them should they arise. The following information regarding the future is based on our Group's assessment as of the end of December 2021.

Risk Categories Risk Overview Measure to Minimize Risks
Risk related to the high proportion of orders from the public sector The financial deterioration of major clients including national and local public entities and their reductions in business volume leading to a decrease in order quantities, changes in procurement methods, or unforeseen circumstances such as the suspension of orders, may affect the business performance of our Group. Encouraging a departure from the traditional business model that is reliant on public projects.
Risks related to Fluctuations in the Exchange Rate Our group is operating both domestically and internationally, and have subsidiary companies mainly in North America and Singapore. Due to our subsidiaries conducting transactions in local currencies, fluctuations in exchange rates may impact our financial position and performance. Considering the implementation of such things as the foreign exchange reserves when necessary.
Risks related to Climate Change and Natural Disasters The OYO Group's business activity and production capacity could be adversely affected due to unforeseeable disasters such as earthquakes, typhoons, heavy rain, floods, and fire. These disasters have the potential to cause damage or loss of production equipment and data, as well as loss of human resources, resulting in a decline in our businessactivities.
In addition, such developments as introducing a carbon tax and adopting environmentally friendly equipment may increase business operation costs.
  1. Creating and periodically reviewing the training for Business Continuity Plans (BCPs) in anticipation of events like disasters.
  2. Continuously assessing and monitoring the impact of climate change on the operations.
  3. Pursuing climate change mitigation efforts with the goal of achieving carbon neutrality by 2050, aiming to effectively eliminate greenhouse gas emissions.
Risks related to Worldwide Outbreak of Infectious Diseases (Pandemic) A global outbreak of infectious diseases (pandemic) could lead to a decrease in demand for our Group's businesses, cause supply chain disruptions such as delivery delays and material shortages, as well as increased procurement costs, may potentially impact our performance. Assuming various risk scenarios and minimizing their impact through taking the appropriate measures.
Risks related to International Conflicts and Acts of Terrorism If any international conflicts or acts of terrorism occur in the countries or regions where our Group operates, it may result in disruptions in our business operations, such as business suspension or cessation due to involvement in conflict or armed activities.
The prolonged situation in Ukraine could also continue to affect the global economy, leading to continued fluctuations in energy and raw material prices.		 Collecting information related to public safety in foreign countries as required.
Risks related to Intellectual Property Claims for injunctions against the use of intellectual property rights, such as proprietary technologies employed in various services and products offered by our Group, or demands for cease and desist from using trademarks, as well as claims for damages, may potentially affect our performance. Managing intellectual property appropriately by establishing a responsible organization.
Risks related to Fluctuations in Resource Prices A downturn in resource prices or a contraction in the resource development market may impact the performance of overseas subsidiaries that sell equipment and systems for resource exploration. Reviewing business portfolio, including reorganization and change of business of group companies.
Risks related to Data Falsification, Tampering, or Misuse If, in violation of internal rules, various data falsification, tampering, or the misuse of historical data occurs, there is a possibility of losing trust, damaging claims, and impacting our performance.
  1. Thorough compliance training.
  2. Verification of business processes and revision of operational manuals by the Internal Business Audit Office.
Risks related to Security Management of the IT System Should computer viruses, malicious third-party unauthorized access, or incidents such as ransomware attacks and information leaks occur, there is a possibility that it may significantly impact our business operations.
  1. Strengthening both the IT system's security and information security.
  2. Strengthening the defenses against ransomware attacks.
  3. Regular training for dealing with suspicious emails from external sources.
Risks related to Securing Human Resources As the population ages and birthrates decline, there is a possibility that we may not be able to procure and develop highly skilled professionals, which may impact both business operations and performance.
  1. Encouraging better health management within the organization for employees.
  2. The creation of a comfortable work environment and an increase in employee engagement.
  3. Enrichment of the educational systems.
  4. Stabilizing the recruitment of new graduates and securing exceptional mid-career hires.
Risks related to Legal and Regulatory Compliance The OYO group is subject to various laws and regulations in Japan and overseas where it operates. If revisions or new legal regulations are enacted in the future due to changes in social conditions or other factors, it may affect the financial status and performance of the group. Furthermore, if regulatory authorities determine that certain transactions involving the group violate any regulations, there is a possibility of facing administrative penalties such as fines and /or the loss of societal credibility.
  1. To constantly gather up-to-date information on relevant regulations and amendments.
  2. Ensure thorough compliance education within the company.
Risks related to Impairment of Held Assets If there is a significant decrease in the market price of securities held or a deterioration in the financial condition of the relevant companies, there is a possibility that it may impact the financial status and performance of the group. Similarly, in the event of a decline in the value of the real estate owned, the 'Accounting Standard for Impairment of Fixed Assets' may be applied, affecting the financial status and performance of the OYO group.  
Risks related to Deferred Tax Assets If significant fluctuations occur in the estimation of future taxable income or if there are institutional changes to be made, there is a possibility that the recorded deferred tax assets may decrease, affecting the financial status and performance of the OYO group.  
Management Plan

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