Insufficient Internal Control Framework for Business Expansion
First written in FY2016. 5 of 9 entries say "Restated". Latest entry: FY2020.
14 other companies' latest entry also says "Mitigated".
- FY2020MitigatedAnnual report
「To address these risks, we are working to strengthen our internal administrative structure, including by appointing outside directors and expanding the staff of the Internal Audit Office.」
The appointment of outside directors and expansion of Internal Audit Office staff are cited as measures to address the risk that the internal administrative structure may fail to keep pace with business expansion. - FY2019-Q2MitigatedAnnual report
「Following the acquisition of LAA, we are working to take control of its management structure, including by dispatching one of our directors to serve as the person responsible for LAA. We are also pursuing proactive post-merger integration, namely, an integration process intended to maximise the integration benefits initially planned for the acquisition, in anticipation of LAA's future business development. This includes reviewing the consolidation and integration of overlapping functions with our existing U.S. and European divisions, considering the consolidation and integration of locations in the United States, and streamlining surplus personnel, mainly at the manager level in administrative departments, as part of establishing an administrative structure appropriate for a group company of a listed company.」
Specific measures are being implemented to address administrative-structure risks accompanying business expansion, including taking control of the acquired company's management structure, strengthening its administrative structure, and consolidating and integrating overlapping functions and locations. - FY2018RestatedAnnual report
「However, if the Group is unable to build a sufficient internal administrative structure in time for rapid business expansion or other developments, appropriate business operations may become difficult, potentially affecting the performance of our Group.」
The possibility that the construction of the internal administrative structure may fail to keep pace with business expansion continues to be disclosed as a risk. - FY2018-Q3RestatedAnnual report
「Selling, general and administrative expenses for the nine-month period ended 31 December were ¥1,263 million, up 10.4% year on year, mainly as a result of higher personnel expenses due to increased staffing in administrative departments accompanying the expansion of the Company's scale.」
Staffing in administrative departments has continued to increase to support the Company's expansion. No significant change is noted regarding the risk that the administrative structure may be insufficient to support business expansion. - FY2018-Q2RestatedAnnual report
「Selling, general and administrative expenses for the six-month period ended 30 September were ¥850 million, up 13.5% year on year, mainly as a result of higher personnel expenses due to increased staffing in administrative departments accompanying the expansion of the Company's scale.」
Staffing in administrative departments has continued to increase to support the expansion of the Company's scale, and higher costs associated with strengthening the administrative structure are noted. - FY2017RestatedAnnual report
「As of 31 March 2017, our Group was a small organisation with 599 employees, and its internal administrative structure was aligned with that scale. Going forward, the Group plans to increase its workforce as the business expands and to strengthen its internal administrative structure accordingly. However, if it is unable to establish an appropriate and sufficient organisational response to business expansion and workforce growth, constraints may arise in the operation and expansion of our Group's business, potentially affecting its performance.」
The risk that the administrative structure may fail to keep pace with business and workforce expansion continues to be disclosed, even after the workforce grew to 599 employees. - FY2017-Q3RestatedAnnual report
「Selling, general and administrative expenses for the nine-month period ended 31 December were ¥1,144 million, up 9.5% year on year, mainly as a result of higher personnel expenses due to increased staffing in administrative departments accompanying the expansion of the Company's scale, as well as higher recruitment costs.」
Staffing in administrative departments has continued to increase to support the Company's expansion, and higher costs associated with strengthening the administrative structure are noted. - FY2017-Q2MitigatedAnnual report
「Selling, general and administrative expenses for the six-month period of the current fiscal year were ¥749 million, up 12.4% year on year, mainly due to higher personnel costs from strengthening staffing in administrative departments as the Company expanded, as well as higher personnel recruitment costs.」
The disclosure describes increased staffing in administrative departments as the Company expanded, specifying how internal management systems are being adapted to business expansion. - FY2016First statedAnnual report
「As of 31 March 2016, the Group was a small organisation with 529 employees, and its internal management systems were designed for an organisation of that size. The Group plans to increase its workforce as the business expands and strengthen its internal management systems accordingly. However, if it is unable to establish an appropriate and sufficient organisational response to business and workforce expansion, its business operations and expansion could be constrained, affecting its performance.」
The disclosure indicates that the current scale of 529 employees may cause internal management systems to lag behind business and workforce expansion.