CTI Engineering Co.,Ltd.

The Group's order intake is heavily dependent on public works projects, and trends in public investment may directly affect operating results. There is also a risk that the business environment could change substantially due to technological innovation, including AI. As countermeasures, the Group is working to strengthen competitiveness through the development and introduction of new technologies and the promotion of DX, and to expand its business domain into public-private partnerships and private-sector markets through collaboration among group companies.

The Group is subject to various legal regulations in its domestic and overseas operations, and standards and laws are being enacted and revised frequently amid recent rapid changes in the social and economic environment. Delayed responses could damage social credibility and affect operating results. As a countermeasure, the Group continuously collects and analyzes the latest information on standards and related laws and regulations, and maintains a system for prompt response.

Large-scale earthquakes, typhoons, heavy rains, and other natural disasters, as well as the spread of infectious diseases, could make normal business activities difficult, and project interruptions or delays in new order receipt could affect performance. There is also a risk of losing business opportunities due to delayed response to climate change countermeasures. As countermeasures, the Group is developing and periodically inspecting and updating its BCP (Business Continuity Plan) to establish a crisis management system, and is promoting new business development through the development of climate change-related technologies.

If investments in corporate acquisitions or new businesses fail to achieve the expected results, losses may occur and affect performance. As a countermeasure, the Group makes investment decisions after carefully assessing the business environment and conducts continuous monitoring after investment to optimize the allocation of resources to fields with growth potential.

Personnel with advanced expertise, public qualifications, and a proven track record are positioned as the Group's sole and greatest management resource, and failure to secure and develop the necessary personnel or the loss of talented personnel could directly affect operating results. As countermeasures, the Group conducts active and continuous recruitment activities, responds to diverse working styles through work-style reforms, and invests actively in various training and educational programs.

With the expansion of information handling via electronic media and networks, the loss, destruction, or leakage of information due to disasters, malfunctions, negligence, or intentional acts could damage social credibility, lead to the suspension of transactions with clients, and result in damages claims, thereby affecting operating results. As countermeasures, the Group has established regulations based on the CTI Group Information Security Policy and appropriately manages the operation of its information systems, conducts regular information security training, and has strengthened crisis management by newly establishing CSIRT, a dedicated team for responding to security incidents.

In countries and regions where the Group conducts overseas operations, unforeseen changes in legal systems or unexpected political and economic developments could affect operating results. As countermeasures, the Group collects country risk information for personnel engaged in overseas operations, strengthens its response to terrorism and other incidents, and works to diversify and expand the countries and areas in which it operates.

As the Group conducts work with a high degree of public interest, if deliverables fail to conform to contract requirements or a serious accident occurs due to insufficient safety management, this could seriously affect operating results through loss of social credibility, suspension of designation, damages claims, and other consequences. As countermeasures, the Group thoroughly manages quality through the establishment of the "Technical Risk Guidelines" and their integrated operation with the "Quality, Environmental, and Information Security Management System," builds an internal review system for deliverables, thoroughly implements safety management education, and maintains liability insurance.

A decline in technical capabilities and productivity resulting from stagnation in employee growth, sluggish research and development, or insufficient response to technological innovation including AI could undermine competitive advantage and affect operating results. As countermeasures, the Group is strengthening technical capabilities through training tailored to changes in the business environment, promoting planned research and development, and advancing reforms of its production systems.

A lack of compliance awareness among employees could give rise to accounting fraud, embezzlement, bribery, violations of antitrust law, infringement of intellectual property rights, insider trading, leakage of confidential information, harassment, and other issues, which could seriously affect social credibility and operating results. As countermeasures, the Group is working to create a workplace environment that prevents compliance violations, conducting compliance training and information security education for employees, and strengthening its internal audit system.