Asia Air Survey Co., Ltd.

The Group's main customers are national and local government bodies, and a decrease in orders due to changes in national budget formulation, deterioration of fiscal conditions, or reduction in budget scale could have a significant impact on operating results. A reduction in public works expenditure would lead directly to a decrease in net sales, constituting a structural risk to the stability of the business foundation. As a countermeasure, the Group is also focusing on securing orders in the private market and expanding its business domains.

If advanced measurement equipment such as high-precision digital aerial cameras and high-density laser profilers becomes damaged or unusable, repair and restoration could require significant time and expense, potentially causing declines in productivity and delays in project schedules. In addition, as business volume increases and quality/precision requirements become more sophisticated, there is a possibility that substantial capital expenditure burdens will continue to arise. The Group has taken measures such as obtaining non-life insurance coverage to minimize potential losses in the event of an incident.

As an operator of aircraft-use business, the Group utilizes aircraft to acquire spatial information data, and a suspension of business activities due to accidents or malfunctions caused by force majeure or other factors could affect performance. Under the guidance of the Ministry of Land, Infrastructure, Transport and Tourism, the Group ensures thorough safe flight operations by complying with relevant laws and regulations, enhancing maintenance systems, conducting pilot health and safety checks, and performing annual emergency response training, but the risk cannot be reduced to zero. In the event of an accident, not only a suspension of business but also an impact on social credibility is anticipated.

If information assets containing confidential information or personal information entrusted by government agencies, local governments, etc. are leaked or lost, it could impact performance through loss of credibility in capital markets or the occurrence of fines. The Group has established a rigorous management system through ISMS certification standards, Privacy Mark acquisition, and compliance activities, but given the nature of the business with public institutions as main customers, a failure in information management poses a risk directly linked to the continuation of business relationships.

If an information security incident occurs due to recent cyberattacks or other causes, it could lead to a loss of social credibility. In addition to obtaining certification standards such as ISMS and conducting regular employee training, the Group has established a specialized team (CSIRT) aimed at early detection of signs of security incidents and prompt resolution, and strives to improve response capabilities through training. Given the nature of the business, which holds a large amount of customer information and business data from government agencies and local governments, the risk of being targeted by attacks continues to exist.

If intensifying competition for talent in the construction-related industry makes it difficult to secure personnel in a planned manner, problems such as loss of order opportunities and delivery delays could occur, affecting performance. There is particular concern about tightness in the production system due to a rapid increase in demand, and while the Group is taking measures such as developing workplace environments that enable diverse work styles and controlling workload, this remains a structural challenge amid continued industry-wide demand expansion.

In businesses conducted in various overseas locations, country risks such as political and economic turmoil, terrorism, labor disputes, natural disasters, and the spread of infectious diseases could affect operating results. In particular, regarding the impact of the political upheaval in Myanmar and economic security issues, the Group continues its business in close cooperation with local subsidiaries, prioritizing employee safety, but recognizes that uncertainty is increasing and the situation remains unpredictable. In addition, while the Group hedges risks such as foreign exchange forward contracts for foreign currency-denominated receivables, the possibility of losses arising from exchange rate fluctuations remains.

If the spread of infectious diseases causes a decline in tax revenue for national and local governments, a reduction in public works expenditure, or a decrease in order volume in the private market, the Group's orders could decrease significantly. In overseas business as well, adverse effects such as travel restrictions and delays in local project progress are anticipated, and internally, a large number of infected employees could lead to a decline in production efficiency. The Group is working to strengthen its response capabilities through the development of business continuity management (BCM) and improvements to its infectious disease risk manual.

If a serious defect occurs in deliverables such as surveying and spatial information services, it could affect performance. The Group conducts continuous employee training, improves production, sales, management, and development processes, and thoroughly implements internal inspections prior to delivery. It has also established a Quality Management Committee and a Production Structure Reform Committee to monitor the appropriate operation of quality control and the status of training. Given the nature of deliverables for government agencies, the occurrence of defects poses a risk directly linked to contractual liability issues and loss of credibility.