Strengthening the Risk Management Framework for New Businesses

「As a major project, we secured an order in fiscal 2025 for a medium-sized EPC project in the Middle East related to oil and petrochemicals, with risk mitigation measures in place, and are advancing reforms to our approach.」

「Based on the reform of its overseas project order-taking policy, one of the key initiatives under Management Plan 2025, the company continues to pursue new orders while thoroughly managing risk. During the current interim consolidated accounting period, it won an EPC project related to oil and petrochemicals in the Middle East.」

「The importance of partner risk management has once again become clear, and going forward we will further strengthen partner risk management not only through preliminary reviews of projects and entry-point management when orders are received, but also during the execution stage.」

「Based on the medium-term management plan, the Recovery Plan: Vision for Recovery and the Future, we are advancing the sophistication of our risk management framework and EPC (engineering, procurement and construction) execution management capabilities while working to expand a stable earnings base.」

「In fiscal 2021, the Company formulated a business continuity plan (BCP) for responding to major earthquakes and infectious diseases and established business continuity management (BCM) as a mechanism for reviewing the BCP annually. Operations began in April 2022. We are also establishing a framework for centrally managing project risks from estimation and pre-order stages through execution, completion and handover by providing strategic support and risk management throughout all project stages.」

「In line with the medium-term management plan announced in May 2019, the Recovery Plan: Vision for Recovery and the Future, the Strategy and Risk Integration Headquarters is serving as the command center for strengthening risk management at every project stage. In addition, to strengthen EPC (engineering, procurement and construction) execution management capabilities, we established a Construction Headquarters under the Energy Project Business Division in April 2020 and are working to strengthen construction and commissioning functions and human resources.」

「Meanwhile, under the newly established risk management framework and in line with the new medium-term management plan announced in May 2019, “Regeneration Plan: A Vision for Regeneration and the Future,” the company is implementing various measures for organizational restructuring and business reform in order to review its business portfolio from a broad, forward-looking perspective. After establishing the Digital Transformation Headquarters in July 2019, the company established the Frontier Business Headquarters in October 2019 as an organization tasked with redefining the value of engineering and transforming its business portfolio. It has begun initiatives focused on resolving various issues in three fields: the environment and energy, social issues and business succession, and life sciences.」

「Meanwhile, under the newly established risk management framework and in line with the new medium-term management plan announced in May, “Regeneration Plan: A Vision for Regeneration and the Future,” the company has begun organizational restructuring as the first step toward reviewing its business portfolio from a broad, forward-looking perspective, while working to implement various measures for business reform.」

「Meanwhile, under the newly established risk management framework, we are working to implement the measures set out in the new medium-term management plan announced in May, the Recovery Plan: Vision for Recovery and the Future.」

「Under the Strategy and Risk Integration Headquarters, which will begin full-scale operations as part of advancing our risk management framework, the Group plans to reliably capture the growth areas described above through more strategic selective order-taking and support for project execution.」

「At the Office for Preparing to Establish the Strategy and Risk Integration Headquarters, established on 1 December 2018, we are currently working diligently to determine the appropriate functions and authorities of the new headquarters. The Strategy and Risk Integration Headquarters will be an organization that centrally manages the Company's risks from a higher-level perspective. External personnel will also be appointed to senior positions, and the headquarters is scheduled to commence operations in April 2019.」

「We will promptly establish a Strategy and Risk Integration Headquarters and strengthen risk management capabilities. At the order-planning stage, we will strictly manage order-taking discipline in light of constraints on the number of key project personnel and exercise the utmost care to prevent workloads from becoming overstretched.」

「In the fiscal year under review, the first year of the medium-term management plan, we have formulated and begun implementing internal measures centered on the Structural Reform Promotion Office established in October last year, covering further strengthening of risk management capabilities, core earnings power and downside resilience, and further broadening of our talent base.」

「To establish a structure that converts our technological advantages into earnings and enables sustainable growth, and to thoroughly maintain our commitment to achieving the profitability line needed to ensure the quantitative targets for fiscal 2020, we are strengthening the execution and profitability management framework for consolidated EPC projects and developing a structure for expanding our business domains and transforming our business model.」

「As we pursue new businesses, we will strengthen the risk management framework as well as」