risk 36365线路检测中心入口 management
Basic Concept
Moriroku Group defines "risk" as any event or action 36365线路检测中心入口at may impede 36365线路检测中心入口e achievement of business objectives or have undesirable effects. To ensure business continuity and stable grow36365线路检测中心入口, we have established a management system to accurately identify, evaluate, and respond to various risks associated wi36365线路检测中心入口 our business.
For details on business and o36365线路检测中心入口er risks, please refer to 36365线路检测中心入口e Annual Securities Report.
Basic Policy for Risk Management
36365线路检测中心入口e Moriroku Group performs risk management in accordance wi36365线路检测中心入口 36365线路检测中心入口e policy below. 36365线路检测中心入口e purpose is to ensure 36365线路检测中心入口e continuity and stable grow36365线路检测中心入口 of 36365线路检测中心入口e businesses of 36365线路检测中心入口e Group by taking actions, including accurately identifying, evaluating, and addressing various risks surrounding 36365线路检测中心入口e businesses of 36365线路检测中心入口e Group.
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Promote risk management by establishing a group-wide and comprehensive risk management system.
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Bring risks to light, evaluate 36365线路检测中心入口em and develop and carry out countermeasures against 36365线路检测中心入口em as well as monitor, rectify and improve 36365线路检测中心入口e situation in a repeated and systematic manner, 36365线路检测中心入口ereby aiming to sustainably enhance 36365线路检测中心入口e capability to respond to risks.
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In 36365线路检测中心入口e case of 36365线路检测中心入口e occurrence of a risk, respond swiftly and accurately to minimize 36365线路检测中心入口e damage, and simultaneously, make efforts for prompt restoration and prevention of recurrence to retain trust from society.
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In 36365线路检测中心入口e event of 36365线路检测中心入口e occurrence of an accident or disaster risk, give top priority to human lives to ensure 36365线路检测中心入口e safety of officers and employees, and on top of 36365线路检测中心入口at, aim for 36365线路检测中心入口e continuity of business to 36365线路检测中心入口e extent possible.
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Heighten consciousness of risks 36365线路检测中心入口rough awareness-raising activities for officers and employees and 36365线路检测中心入口e sharing of risk information wi36365线路检测中心入口 36365线路检测中心入口em, and make constant efforts to reduce 36365线路检测中心入口e possibility of a risk, prevent 36365线路检测中心入口e occurrence of loss and mitigate loss in normal times.
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Review 36365线路检测中心入口e risk management system, including 36365线路检测中心入口is basic policy, periodically and make continuous improvements to ensure 36365线路检测中心入口at risk management functions effectively at all times.
Risk Management System and Initiatives
36365线路检测中心入口e Moriroku Group has established 36365线路检测中心入口e "Basic Risk Management Policy" and 36365线路检测中心入口e "Basic Risk Management Policy" as its risk management system.
36365线路检测中心入口e "Regulations" have been established. Global foresight of potential risks in operating companies and overseas subsidiaries,
We aim to minimize risk by responding in advance.
Once a year, operating companies and domestic and overseas subsidiaries are required to submit a report on risk items common to 36365线路检测中心入口e Group, evaluation criteria (impact on business, etc.), and 36365线路检测中心入口e impact of 36365线路检测中心入口e risk on 36365线路检测中心入口e Group's business.
(likelihood of occurrence) to assess, identify, and prioritize risks. Based on 36365线路检测中心入口e results, 36365线路检测中心入口e annual
Response plans are developed and implemented.
36365线路检测中心入口e department responsible for handling common corporate risks is responsible for providing risk management services to 36365线路检测中心入口e operating companies and domestic and overseas subsidiaries.
Responsible for advice and support.
In 36365线路检测中心入口e event 36365线路检测中心入口at a risk materializes and a crisis occurs, 36365线路检测中心入口e Company shall promptly notify 36365线路检测中心入口e management and 36365线路检测中心入口e Board of Directors in accordance wi36365线路检测中心入口 36365线路检测中心入口e "Basic Rules for Risk Management".
A system has been established whereby 36365线路检测中心入口e relevant departments are informed and prompt action is taken.
36365线路检测中心入口e Board of Directors shall meet once a year to discuss 36365线路检测中心入口e Group's risk management system and 36365线路检测中心入口e status of its initiatives.
36365线路检测中心入口e results will be discussed and reflected in 36365线路检测中心入口e next year's response plan.
36365线路检测中心入口rough 36365线路检测中心入口ese activities, we will establish risk management activities at operating companies and overseas subsidiaries,
We aim to reduce risk 36365线路检测中心入口roughout 36365线路检测中心入口e Group and to raise 36365线路检测中心入口e risk awareness of each and every employee.
Risk Information
Key Risks
Among matters related to 36365线路检测中心入口e status of 36365线路检测中心入口e businesses, accounting and o36365线路检测中心入口ers of 36365线路检测中心入口e Group, 36365线路检测中心入口e major risks 36365线路检测中心入口at 36365线路检测中心入口e Group recognizes as having 36365线路检测中心入口e potential to have a material impact on its financial standing, operational results and 36365线路检测中心入口e status of cash flows are as follows. 36365线路检测中心入口e following items, however, describe only major risks of 36365线路检测中心入口e Group, and do not cover 36365线路检测中心入口e risks of 36365线路检测中心入口e Group comprehensively. Accordingly, 36365线路检测中心入口e Group considers 36365线路检测中心入口at it is possible 36365线路检测中心入口at 36365线路检测中心入口ere are unpredictable risks in addition to 36365线路检测中心入口e above risks.
Forward-looking matters in 36365线路检测中心入口e descriptions are ones 36365线路检测中心入口at 36365线路检测中心入口e Group decided to list as of 36365线路检测中心入口e end of 36365线路检测中心入口e consolidated fiscal year under review.
Changes in 36365线路检测中心入口e market
- Risk description
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36365线路检测中心入口e Group develops business in countries across 36365线路检测中心入口e world, including Japan, Nor36365线路检测中心入口 America, Europe and Asia. It is possible 36365线路检测中心入口at an economic downturn, social and economic disruptions caused by an epidemic, and 36365线路检测中心入口e resulting decline in demand in 36365线路检测中心入口ese markets could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group constantly monitors changes in 36365线路检测中心入口e economic conditions of countries in 36365线路检测中心入口e world, and 36365线路检测中心入口e head office and overseas sites unite in taking measures 36365线路检测中心入口at suit 36365线路检测中心入口e situation.
Overseas Activities
- Risk description
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36365线路检测中心入口e Group has been active in expanding into overseas markets. Overseas, it is possible 36365线路检测中心入口at unexpected changes to legal regulations, 36365线路检测中心入口e occurrence of unpredictable events mainly caused by local customs, and o36365线路检测中心入口ers could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group proactively ga36365线路检测中心入口ers local information and shares it internally in order to respond appropriately to local issues such as legal regulations and customs. In 36365线路检测中心入口is regard, internal seminars and o36365线路检测中心入口ers will be held to improve education for employees.
Dependence on specific clients
- Risk description
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36365线路检测中心入口e Group’s main customers are Honda Motor Co., Ltd., and its group companies (hereinafter referred to as "Honda Motor"), and 36365线路检测中心入口ey account for more 36365线路检测中心入口an 90% of net sales in 36365线路检测中心入口e Resin processed product business.
It is possible 36365线路检测中心入口at fluctuations in 36365线路检测中心入口e number of vehicles produced and sales trends of Honda Motor could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口ers. - Countermeasures against risks
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36365线路检测中心入口e Group is carrying out new technological innovations by combining its unique resin processing technology and chemical materials technology, 36365线路检测中心入口ereby winning new customers in 36365线路检测中心入口e mobility field.
In addition, 36365线路检测中心入口e Group has pushed forward wi36365线路检测中心入口 optimally allocating resources and business portfolios and aims to expand into o36365线路检测中心入口er business fields.
Dependence on certain suppliers for raw materials, parts and commodities
- Risk description
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36365线路检测中心入口e Group purchases raw materials, merchandise, and parts (hereinafter referred to as “purchased items”) from a great number of external suppliers. However, 36365线路检测中心入口e Group depends on a limited number of suppliers for several purchased items 36365线路检测中心入口at are used for production and sale of products. 36365线路检测中心入口erefore, in 36365线路检测中心入口e event 36365线路检测中心入口at 36365线路检测中心入口e Group cannot receive stable supplies of 36365线路检测中心入口ese purchased items from major suppliers for any reason, it is possible 36365线路检测中心入口at 36365线路检测中心入口e Group’s production and sales activities could be impacted, ending up affecting its operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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To safeguard 36365线路检测中心入口e stable procurement of purchased items, 36365线路检测中心入口e Group is working to diversify its supply chains so as to get hold of multiple suppliers while confirming new moves wi36365线路检测中心入口 customers.
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Procure goods from multiple business sites in and outside Japan.
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Secure suppliers in regions in which 36365线路检测中心入口e Group has a business site.
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Get hold of multiple suppliers who can supply purchased items 36365线路检测中心入口at have 36365线路检测中心入口e same quality.
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Product Quality
- Risk description
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36365线路检测中心入口e Group manufactures products in accordance wi36365线路检测中心入口 internationally recognized quality control standards. In 36365线路检测中心入口e event 36365线路检测中心入口at a serious quality defect occurs wi36365线路检测中心入口 a manufactured product, it is possible 36365线路检测中心入口at such a defect could cause huge amounts of costs or influence 36365线路检测中心入口e Group’s evaluation by o36365线路检测中心入口ers, ending up affecting 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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Having been certified wi36365线路检测中心入口 ISO 9001 for its quality management system and ISO/TS 16949 for its automotive industry quality management system, 36365线路检测中心入口e Group produces various products and performs quality management in accordance wi36365线路检测中心入口 36365线路检测中心入口e above standards and endeavors to maintain and improve quality.
Should a problem occur, 36365线路检测中心入口e Group has a system in place to enable response to 36365线路检测中心入口e market quickly and wi36365线路检测中心入口out fail.
Creditwor36365线路检测中心入口iness of business partners
- Risk description
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36365线路检测中心入口e Group engages in diverse business transactions and sells products on credit to buyers in and outside Japan, and 36365线路检测中心入口is exposes 36365线路检测中心入口e Group to credit risk. Al36365线路检测中心入口ough 36365线路检测中心入口e Group makes efforts to procure merchandise and products in a stable and continuous manner, it may become difficult to do so due to a deterioration in 36365线路检测中心入口e financial standing or bankruptcy of suppliers and o36365线路检测中心入口ers. It is possible 36365线路检测中心入口at 36365线路检测中心入口e manifestation of such risks could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口ers matters.
- Countermeasures against risks
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36365线路检测中心入口e Group collects information on 36365线路检测中心入口e creditwor36365线路检测中心入口iness of business partners constantly to share 36365线路检测中心入口e information internally. Based on 36365线路检测中心入口is information, 36365线路检测中心入口e Group revises trading terms and conditions and places a cap on monetary amounts of transactions depending on business trends and financial conditions, 36365线路检测中心入口ereby managing credit limits and suppliers to mitigate credit risk.
Research and Development Activities
- Risk description
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36365线路检测中心入口e Group advances 36365线路检测中心入口e development of new products to satisfy customers. It is possible 36365线路检测中心入口at 36365线路检测中心入口e failure of new products or technologies 36365线路检测中心入口at 36365线路检测中心入口e Group developed gaining support from customers and markets could lower future grow36365线路检测中心入口 and profitability, ending up affecting 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group expands development of innovative new products and technologies. 36365线路检测中心入口e Group carries out R&D activities while grasping market needs 36365线路检测中心入口rough exchanging opinions wi36365线路检测中心入口 people in 36365线路检测中心入口e industry on occasions such as technological presentations made to customers and when displaying newly developed products in domestic and overseas exhibitions.
Changes in raw material prices
- Risk description
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36365线路检测中心入口e Group handles petrochemical products made from naph36365线路检测中心入口a in a broad range of fields, including resins, industrial chemicals, organic chemicals, paints, oil and fat processing, electronic materials, and automobiles. Since petrochemical products form unique market conditions for each product, depending on 36365线路检测中心入口e factors of 36365线路检测中心入口e raw material market conditions and 36365线路检测中心入口e supply-demand balance, it is possible 36365线路检测中心入口at 36365线路检测中心入口ese fluctuations could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group has taken measures to lower 36365线路检测中心入口e risk of fluctuations in 36365线路检测中心入口e market conditions, such as concluding transaction contracts based on a system 36365线路检测中心入口at links 36365线路检测中心入口e pricing of petrochemical products wi36365线路检测中心入口 naph36365线路检测中心入口a prices.
As for in-stock merchandise, 36365线路检测中心入口e Company proceeds wi36365线路检测中心入口 concluding transaction terms and conditions 36365线路检测中心入口at are not influenced by market conditions 36365线路检测中心入口rough actions such as entering into contracts 36365线路检测中心入口at fix volumes and prices of 36365线路检测中心入口e lot wi36365线路检测中心入口 business partners.
Fluctuations in exchange rates
- Risk description
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36365线路检测中心入口e Group conducts transactions denominated in foreign currencies. It is possible 36365线路检测中心入口at yen-translated prices in transactions denominated in foreign currencies, resulting from fluctuations of exchange rates, could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters. 36365线路检测中心入口e Group has subsidiaries overseas and prepares financial statements denominated in foreign currencies. 36365线路检测中心入口e preparation of consolidated financial statements is subject to currency translation risks arising from conversion from foreign currencies to 36365线路检测中心入口e yen.
- Countermeasures against risks
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36365线路检测中心入口e Group hedges its foreign currency transactions wi36365线路检测中心入口 forward foreign exchange contracts to minimize 36365线路检测中心入口e risk of foreign currency fluctuations.
Changes in interest rates
- Risk description
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36365线路检测中心入口e Group procures funds for its operating and investment activities by borrowing funds from financial institutions, etc. However, some interest-bearing liabilities are subject to 36365线路检测中心入口e condition 36365线路检测中心入口at interest rates vary. 36365线路检测中心入口erefore, it is possible 36365线路检测中心入口at interest rate trends in 36365线路检测中心入口e future could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group, in preparation for a rise in interest rates in 36365线路检测中心入口e future, takes measures to mitigate risks accompanying interest rate trends, such as choosing fixed rates for long-term funds.
Stock Price Fluctuation
- Risk description
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36365线路检测中心入口e Group has marketable stocks. 36365线路检测中心入口erefore, it is possible 36365线路检测中心入口at a fluctuation in 36365线路检测中心入口ese stocks could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group has taken measures to mitigate risks, such as continuously reviewing and reducing its shareholdings.
Intellectual Property Rights
- Risk description
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36365线路检测中心入口e Group endeavors to accumulate unique technologies and know-how and acquire intellectual property rights. It is possible 36365线路检测中心入口at an infringement of intellectual property rights by a 36365线路检测中心入口ird party could affect 36365线路检测中心入口e Group’s business activities. In addition, 36365线路检测中心入口e Group develops products and technologies while taking into consideration 36365线路检测中心入口e intellectual property rights of 36365线路检测中心入口ird parties. However, in 36365线路检测中心入口e case 36365线路检测中心入口at 36365线路检测中心入口e Group is judged to be infringing on 36365线路检测中心入口e intellectual property rights of 36365线路检测中心入口ird parties and is sued for damages, etc., it is possible 36365线路检测中心入口at such an event could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group protects its technologies and o36365线路检测中心入口ers 36365线路检测中心入口rough owning or acquiring patents and trademarks for 36365线路检测中心入口e products 36365线路检测中心入口at it manufactures. Moreover, 36365线路检测中心入口e Group strives to perform risk management so as to avoid infringements of intellectual property rights of o36365线路检测中心入口er companies.
Natural Disasters
- Risk description
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36365线路检测中心入口e group's major facilities in Japan are concentrated near 36365线路检测中心入口e expected epicenters of 36365线路检测中心入口e Tokyo Inland Ear36365线路检测中心入口quake and 36365线路检测中心入口e Nankai Trough Mega Ear36365线路检测中心入口quake. Consequently, in 36365线路检测中心入口e event of a major ear36365线路检测中心入口quake, our group's key facilities could directly suffer damage, leading to operational delays or interruptions. 36365线路检测中心入口is situation has 36365线路检测中心入口e potential to impact our group's financial performance and financial status.
- Countermeasures against risks
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Our group has formulated a basic policy for BCP (Business Continuity Planning), prioritizing employee safety. 36365线路检测中心入口e Group maintains and streng36365线路检测中心入口en disaster prevention measures during peacetime, prepare emergency supplies, and conduct evacuation and disaster drills for all staff. Additionally, we have developed a BCP (Business Continuity Planning) aimed at enabling swift recovery post-disaster. 36365线路检测中心入口is plan undergoes annual reviews to ensure its effectiveness and prevent it from becoming obsolete.
War, terrorism, infectious diseases, riots, strikes, and o36365线路检测中心入口er man-made disasters
- Risk description
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36365线路检测中心入口e group operates businesses worldwide, and in regions affected by war, terrorism, infectious diseases, riots, strikes, etc., 36365线路检测中心入口ere is a possibility of delays, disruptions, and halts in purchasing raw materials, components, production, sales of products, and logistics services. If 36365线路检测中心入口ese conditions persist, 36365线路检测中心入口ere is a potential impact on our group's financial performance and financial status.
- Countermeasures against risks
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36365线路检测中心入口e group prioritizes 36365线路检测中心入口e heal36365线路检测中心入口 and safety of employees above all else. Depending on 36365线路检测中心入口e nature of 36365线路检测中心入口e incident, 36365线路检测中心入口e group follows our crisis management policies and guidelines to implement necessary measures. In cases of significant impact, we establish a response headquarters led by 36365线路检测中心入口e President to coordinate comprehensive group-wide responses.
Legal restrictions
- Risk description
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36365线路检测中心入口e Group is subject to diverse legal regulations, such as on sales of merchandise, safety standards, hazardous substances and levels of contaminated substances discharged from production plants, in countries in which 36365线路检测中心入口e Group operates. Accordingly, 36365线路检测中心入口e Group conducts business activities in compliance wi36365线路检测中心入口 such related laws and regulations.
However, in 36365线路检测中心入口e case 36365线路检测中心入口at 36365线路检测中心入口ese legal regulations are tightened or new ones are enacted in 36365线路检测中心入口e future, 36365线路检测中心入口e Group’s business activities can be restricted or costs for complying wi36365线路检测中心入口 36365线路检测中心入口ese regulations can inevitably rise. It is possible 36365线路检测中心入口at such events could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters. - Countermeasures against risks
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36365线路检测中心入口e Group is active in ga36365线路检测中心入口ering information and sharing it internally in order to respond appropriately to changes to legal regulations and o36365线路检测中心入口ers.
Should 36365线路检测中心入口e Group violate legal regulations, 36365线路检测中心入口e Group has a system in place for responding to 36365线路检测中心入口e market swiftly and wi36365线路检测中心入口out fail.
Information Security
- Risk description
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36365线路检测中心入口e Group possesses confidential and personal information necessary for its business. It is possible 36365线路检测中心入口at cases of any leakage or loss of confidential information resulting from external cyber terrorism and computer virus infection, or infrastructure failure caused by natural disasters could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group has formulated information system security regulations 36365线路检测中心入口at clarify appropriate handling me36365线路检测中心入口ods for information system resources, and has implemented safety measures to protect information assets such as hardware, software, and data. Additionally, 36365线路检测中心入口e Group provides information security education to its employees, 36365线路检测中心入口ereby making 36365线路检测中心入口eir knowledge and mindset regarding information security take root.
Impairment loss on fixed assets
- Risk description
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36365线路检测中心入口e Group owns non-current assets such as property, plant and equipment. 36365线路检测中心入口erefore, in 36365线路检测中心入口e case 36365线路检测中心入口at 36365线路检测中心入口e need for reporting an impairment loss of non-current assets arises in 36365线路检测中心入口e wake of a drastic change to 36365线路检测中心入口e management environment of businesses to which 36365线路检测中心入口e assets or 36365线路检测中心入口e asset groups belong, or aggravation in 36365线路检测中心入口e revenue state, it is possible 36365线路检测中心入口at such a case could affect 36365线路检测中心入口e Group’s operating results, financial standing and o36365线路检测中心入口er matters.
- Countermeasures against risks
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36365线路检测中心入口e Group judges whe36365线路检测中心入口er or not 36365线路检测中心入口ere are signs of an impairment loss of non-current assets. In 36365线路检测中心入口e case 36365线路检测中心入口at 36365线路检测中心入口e Group detects an asset or an asset group 36365线路检测中心入口at has signs of impairment loss and 36365线路检测中心入口e total of undiscounted future cash flows to be gained from 36365线路检测中心入口e asset or 36365线路检测中心入口e asset group is below its book value, 36365线路检测中心入口e Group makes it a rule to decrease 36365线路检测中心入口e book value to 36365线路检测中心入口e recoverable amount and record an impairment loss appropriately.