We are fully aware of our duties and obligations as managers
entrusted by shareholders to operate a business with important social responsibilities related to airports
that serve large numbers of people and handle large volumes of important cargoes. With our mission and
corporate philosophy firmly in mind, we strive to develop and implement corporate governance to secure and
raise corporate value and earn profits to be shared with shareholders.
Internal Control System
We have established a basic policy for the internal control system
through a resolution by the Board of Directors, and strive to develop and operate the system accordingly.
Compliance
We have established a Compliance Committee chaired by the president
and whose members include all representative directors and standing auditors. The Committee examines
important matters that must be addressed to ensure that the execution of work duties by executives and
employees is in compliance with laws and ordinances, articles of incorporation, and in-house rules. It
works to achieve various objectives throughout the Group including maintaining or improving proper
operations, preventing compliance violations, and avoiding or reducing legal risks.
Based on its mission and corporate philosophy and basic policy for
the internal control system, the Group resolutely refuses to have any connections with antisocial forces.
If antisocial forces make unreasonable demands of it, the Company works in close collaboration with
parties such as company lawyers and the police and cuts off all connections with the antisocial forces.
These efforts are led by the Compliance Committee.
In addition, we have made our mission, corporate philosophy, and
basic policy for the internal control system known to our officers and employees, and we are making every
effort to ensure the proper operation of internal controls, including the elimination of antisocial
forces, through our daily business and auditing activities.
The Group will make further efforts to improve its compliance
system and continue to manage its businesses in a manner that complies with laws and ordinances.
Internal Control over Financial Reporting
The Audit Office is responsible for internal audits and reports
directly to the president. It handles reports on internal controls related to the Financial Instruments
and Exchange Act and conducts audits and evaluations from a broad perspective in order to ensure proper
operations. The Group is aware of the importance of ensuring trustworthy disclosures, such as financial
reports, and it will continue to strive to further develop, operate, and improve effective internal
controls.
Risks of the Dependency on Specific Clients
Due to the characteristics of our company's business based on airports to provide facilities and functions necessary for airports, our major clients are airline companies and aviation-related companies. Especially, Japan Airlines Co., Ltd. and All Nippon Airways Co., Ltd. are the major tenants of our company, as well as a major supply destination for our area heating and cooling business and water supply and drainage business, together with Japan Airport Terminal Co., Ltd. The said three companies are our important clients, accounting for 43.1% of the sales of our group in total.
Therefore, with the decline in aviation demand, in the case where airline and aviation-related companies including our important clients make a decision to streamline their business or review their business plan, it is possible that the occupancy ratio of real estate decreases and the usage of area heat and cooling service or water supply and drainage service decreases.
Based on the long-term strategy set forth in our Medium-to-Long-Term Plan, our group will fully utilize the experiences and knowledge we have been accumulating to accurately and flexibly cope with the multiple needs of our clients, securely understand aviation-related demand, and maintain out trustful relationships and trade over the long term, to try curbing risks.
Risks Related to Government Measures
It is possible that the business plan, business and financial conditions of our group may be affected by changes in airport plans and operation policies of the national government, which manages the establishment of airports, as well as of administrative agencies and airport companies.
Our group will pay close attention to the movements of the national government and administrations to be able to respond promptly to any changes.
Further, we are also diversifying risks by promoting new business development in and outside airports and abroad, based on the long-term strategy set forth in our Medium-to-Long-Term Plan.
Disaster Risks
When disasters such as extraordinary natural phenomena or fire occurs, it is possible that the business plan, business and financial conditions of our group may be affected due to damages caused to facilities owned and the stoppage of airport functions. Our group implements seismic capacity diagnosis for all facilities, conducting reinforcement work where necessary. We also purchase fire insurance. In addition, assuming the scenario of the occurrence of a disaster, we are establishing communication and information-gathering mechanisms within the company and with relevant organizations, and a preparation system to allow prompt restoration to ensure adequate reactions taken at the time of a disaster.
Risk Related to the Impact of the Natural Environment
Our area heating and cooling business and water supply and drainage business tend to affect our business and financial conditions with seasonal factors such as rises in temperature. When summer is cold or winter is warm, demand for cooling/heating and water supply/sewage tends to decrease, falling below the initial sales expectation, while the sales exceeds the initial expectation due to a hot summer and cold winter.
Risk of Overseas Businesses
As for business development overseas, business performance may be affected by exchange rate fluctuations, unexpected contingencies caused due to political, economic, or social conditions of the country, or unexpected changes in laws and regulations.
Our group gathers information on country risks related to local legislation and business development through local contractors, etc. to mitigate these risks.
Risks of Impairment Loss on Fixed Assets
Our group is engaged in real estate business. Therefore, when the profitability of invested fixed assets deteriorates significantly or when their market value drops, it may result in the booking of impairment loss with the application of impairment accounting for fixed assets, which may affect the business performance and financial conditions of our group.
Risks Related to the Realizability of Deferred Tax Assets
Our group makes judgement on the realizability of deferred tax assets based on the forecasts and assumptions on future taxable earnings. However, when the forecasts and assumptions on future taxable earnings are changed and it is determined that a part or whole of the deferred tax assets becomes unrealizable, the deferred tax assets may be reduced, which may affect the business performance and financial conditions of our group.
Risks Related to Other Changes in Business Environment, Etc.
Our group is taking risks of changes in business environment caused by contingencies other than those in above, and such changes may affect the business performance and financial conditions of our group.
