Matsuda Sangyo has established the Total Risk Management (TRM) Committee as an organization for managing and overseeing the various risks related to the business activities of the entire corporate Group, including the subsidiaries. In addition to preventing the emergence of various risks that have severe impact on corporate management, we take swift and precise response in the event of an emergency. We also build, operate, and evaluate the risk management system, and conduct education and training, and report on the results of these activities to the Board of Directors.
The TRM Committee has established departmental subcommittees and groups to create a risk management system by organizational units, and mainly carries out short-term risk management. It has also established specialized subcommittees as a management system for cross-organizational and medium-to-long-term risks. These specialized subcommittees work systematically to identify and evaluate risks, develop measures, carry out monitoring, and take remedial action, among others. There are also plans to establish a new specialized subcommittee for the management of sustainability-related risks.
With regard to risk awareness within the departmental subcommittees, we evaluate the respective elements—incidence of occurrence, degree of impact on economic loss, and degree of detection—on a five-step scale, and quantify the multiplier of the result as the risk degree evaluation in order to identify significant risks.
The Chair of the TRM Committee, who is the person responsible for all risks across the company, conducts reviews of company-wide management of risks and reports the results to the Board of Directors and the 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.
