Altech Corporation

Due to the declining birthrate, aging population, and shrinking labor force, securing engineering talent tends to become more difficult over the medium to long term. For ALPS TECHNOLOGY, whose core business is engineer staffing, securing sufficient quality and quantity of human resources is fundamental to business continuity, and a decline in recruiting capability directly leads to lower sales. In response, the company continues to secure excellent talent domestically and overseas through a dedicated recruitment department, and implements talent development combining education and personnel rotation.

The revised Worker Dispatching Act related to work-style reform, which took effect on April 1, 2020, strengthens regulations such as equal pay for equal work, potentially affecting business costs and operations. The company's core business model, Engineer Staffing (Design & Development), is directly exposed to changes in legal regulations, creating a risk of increased compliance costs or the need to change the business model. In response, the company continues its permanent-employment-based engineer staffing business, ensuring both legal compliance and competitiveness through stable employment and treatment.

If officers or employees intentionally or negligently commit legal violations, this could lead to claims for damages or loss of credibility. Given the nature of the engineer staffing business, in which a large number of employees are stationed at client sites, individual conduct is difficult to manage, creating a structure in which compliance risk is easily dispersed. In response, the company has established and operates basic policies for building an internal control system, and thoroughly enforces compliance with rules such as the "Corporate Ethics Charter" and various internal regulations.

The group, which has overseas locations, faces risks that earnings from overseas operations could be affected by changes in political and social conditions, unexpected changes in laws and regulations, and fluctuations in foreign currency exchange rates. The materialization of geopolitical risk could threaten the continuity of local operations, while exchange rate fluctuations directly affect performance when converted into yen. In response, the company reviews geopolitical risk on a quarterly basis and has established a close information-sharing system utilizing online tools.

If a hostile takeover occurs, involving a unilateral large-scale share purchase without the approval of management or the majority of shareholders, management stability and business continuity could be undermined. Since human resources and client relationships are the primary assets of the engineer staffing business, management disruption poses a risk of directly leading to the departure of excellent engineers and the loss of clients. In response, the company has established and operates basic policies regarding the parties who control decisions on financial and business policy.

If group companies fail to generate the expected earnings, this could adversely affect consolidated performance and reduce the capital efficiency of the group as a whole. Deterioration in the performance of group companies also carries the risk of prompting additional support from the parent company or impairment of assets. In response, the company is working to strengthen its management structure through the dispatch of officers and monthly reporting, and to enhance synergies through close collaboration among group companies.

Depending on trends in land prices and the earnings condition of businesses holding fixed assets, impairment losses may occur, significantly reducing net income for the period. For fixed assets such as real estate, there is a risk that deteriorating market conditions or changes in the business environment could make it difficult to recover book value. In response, the company calculates future cash flows and other factors for its held assets, and based on the results, determines on a quarterly basis whether to continue holding such assets.

If an information system outage or malfunction, unauthorized external access due to inadequate network security measures, or a system failure caused by a large-scale natural disaster occurs, business continuity may become difficult, potentially leading to a loss of customer trust and liability for damages. Because core operations such as engineer attendance/assignment management and client contract management depend on IT systems, the impact of a failure could be far-reaching. In response, the company has prepared crisis management measures in advance for the event of a failure and has established a backup system necessary for business continuity.

If confidential customer information or personal data is leaked due to unauthorized access by third parties or misconduct by employees, this could result in serious consequences such as claims for damages, administrative sanctions, and brand damage. Given the business model in which engineers are stationed at client sites, there are frequent opportunities to access clients' confidential information, making information management risk particularly high as an industry characteristic. In response, the company protects its internal network with firewalls and encrypts PC hard disks, while continuing to provide awareness and education for all employees.

In the event of an unexpected large-scale natural disaster such as a typhoon or earthquake, or an accident, ensuring employee safety and maintaining business continuity may become difficult, potentially having a significant impact on performance. In addition, inadequate response to environmental issues carries the risk of leading to stricter regulations or a decline in social evaluation. In response, the company has established a business continuity system through the installation of private power generation equipment and the introduction of a safety confirmation system, while also formulating a basic sustainability policy to promote responses to environmental and social issues.