KYOWA ENGINEERING CONSULTANTS CO., Ltd.

The Group's orders are highly dependent on national and local government budgets, and changes in public budgets may directly affect the order environment and business performance. Given the nature of the Construction Consultant Business, there is an inherent risk that budget cuts or policy shifts by the government or local authorities could significantly impact earnings. As a countermeasure, the Group is promoting risk diversification by entering new peripheral business fields utilizing existing technical know-how.

In the Construction Consultant Business, face-to-face discussions and coordination with clients and related organizations are essential to conducting operations, and if a novel virus infection or similar event were to occur, these activities could be significantly restricted, potentially having an adverse effect on business performance. The scope of this risk is broad, as it affects a wide range of business phases, including surveying, planning, design, and construction management related to social infrastructure development. As a countermeasure, the Group has established remote work and web meeting environments to achieve both infection prevention and productivity.

The Group bears liability for non-conformity of deliverables with contracts for a certain period after delivery, and if deliverables that do not conform to contract terms should arise, this could negatively affect future business performance in the form of repair costs and similar expenses. Given the specialized and complex nature of Construction Consultant operations, quality defects in deliverables carry the risk of spilling over into clients' business execution. As a countermeasure, the Group mitigates this risk through thorough quality control based on ISO9001, and transfers part of the risk externally by maintaining continuous liability insurance coverage.