Matsuda Sangyo has established the Total Risk Management (TRM) Committee, supervised by the Board of Directors, as an organization for overseeing risk management for the entire corporate Group, including the subsidiaries.
The TRM Committee undertakes risk management by preventing the emergence of various risks that have severe impact on corporate management, and taking swift and precise response in the event of an emergency. It also builds, operates, and evaluates the risk management system as well as conducts education and training, and reports on the results of these activities to the Board of Directors. The TRM Committee has established departmental subcommittees and groups to oversee the risks for each department. Within the departmental subcommittees and groups, the respective elements—incidence of occurrence, degree of impact on economic loss, and degree of detection—are evaluated on a five-step scale, and the multiplier of the result is quantified as the risk degree. The TRM Committee oversees the countermeasures, progress, etc. for important risks identified through this method. Expert subcommittees are established under the TRM Committee to manage cross-organizational and highly important risks, and the identification and evaluation of risks, development of countermeasures, monitoring, remedial actions, and education are conducted in a systematic manner. The management status, etc. of these risks is reviewed periodically and the results are reported to the Board of Directors and Audit and Supervisory Committee.
Organizational Chart of the TRM Committee
(1) Price fluctuations for major products and commodities
The main raw materials used in the manufacturing of products handled by the Precious Metals Business Segment are recycled raw materials that contain precious metallic elements, primarily including gold, silver, platinum, and palladium. In principle, their purchase and sales prices are based on the market prices of precious metal bullion, and price fluctuations could have an impact on business results.
The products handled by the Food Business Segment are materials and ingredients used for food processing, such as marine products, livestock products, and agricultural products. The majority of these are produced overseas, and if sales prices were to fall as a result of the demand-supply balance of products, losses may occur due to the valuation loss of inventory assets. This could have an impact on business results.
(2) Legal regulations
In cases where legal regulations related to the Precious Metals Business Segment are strengthened, it may be necessary to take on additional capital investment burden to deal with such situations. As we are engaged in the businesses of collecting, transporting, and treating industrial waste, compliance with various laws is an important premise for business continuity. As a part of our efforts to ensure compliance across all our management activities, the Matsuda Sangyo Group has enacted the Matsuda Sangyo Group Global Code of Conduct as the highest internal standard for our business activities and other social activities, as well as the Compliance Regulations which sets out provisions on matters toward the realization of compliance.
(3) Natural disasters, climate change, and spread of infectious diseases, etc.
The occurrence of natural disasters such as earthquakes and floods could have an impact on business activities. The Matsuda Sangyo Group puts in place various measures to prepare for the occurrence of large-scale disasters, but it is impossible to avoid damage completely, and such disasters could have an impact on our business results and financial position. Abnormal weather conditions due to climate change and other factors could also have an impact on the manufacturing of products handled by the Food Business Segment, and thereby affect our business results and financial position. Additionally, the spread of unknown infectious diseases could also have an impact on our business due to the suspension of production activities. The Matsuda Sangyo Group strives to prevent the spread of infections among employees should there be an outbreak of an infectious disease, such as by implementing teleworking from home, staggered working hours, and shift work. At the same time, while we have established a supply system for products, commodities, and services, procurement and business activities may be interrupted or come to a standstill due to the spread of infections within or outside the company. This could have an impact on our business results and financial position.
