Decline in Investee Company Enterprise Value and Additional Funding Requirements
First written in FY2016. 2 of 6 entries say "Mitigated", first in FY2017. Latest entry: FY2025.
The whole theme swung hardest in 2020: 28 of 83 companies on the "Worse" side.
3 other companies' latest entry also says "Advanced".
- FY2025AdvancedAnnual report
「While using TVA to assess the contribution to enterprise value, we have adopted ROIC as a KPI for reviewing investment projects in order to place greater emphasis on the efficiency of returns generated from invested capital.」
In addition to pre-investment reviews and post-investment monitoring, the company adopted ROIC as a KPI for reviewing investment projects and detailed investment management using it together with TVA and RVA. - FY2023MitigatedAnnual report
「During the review process, we conduct entry screening from a broad perspective using TVA (Note 1), our proprietary metric for verifying whether the expected level of returns is secured relative to the funds employed, and RVA (Note 2), which verifies whether returns commensurate with the risks are secured. We also use our proprietary environmental checklist to assess environmental risks, including climate change, greenhouse gas emissions and the effects of reductions, and to examine investment returns and various risk analyses. After investments are made, the corporate divisions and sales headquarters jointly continue to monitor and support the progress of issues in projects requiring attention (check-and-support activities).」
The company detailed its investment management process, including TVA, RVA and environmental checks before investment and check-and-support activities after investment. - FY2019RestatedAnnual report
「For new investments, we discuss their strategic significance and priority for the company as a whole. Personnel from corporate divisions participate in the review alongside the responsible sales division, and we assess investment returns and various risk analyses from a broad perspective. After an investment is made, we monitor whether the planned investment returns are being generated and profits commensurate with the risk assets are being secured, and strictly apply restructuring and withdrawal rules to projects that are not progressing as planned.」
The company continues to implement pre-investment reviews, post-investment monitoring, and restructuring and withdrawal rules. - FY2018RestatedAnnual report
「For new investments, we discuss their strategic significance and priority for the company as a whole. Personnel from corporate divisions participate in the review alongside the responsible sales division, and we assess investment returns and various risk analyses from a broad perspective. After an investment is made, we monitor whether the planned investment returns are being generated and profits commensurate with the risk assets are being secured, and strictly apply restructuring and withdrawal rules to projects that are not progressing as planned.」
The company continues to specify pre-investment reviews, post-investment monitoring, and restructuring and withdrawal rules. - FY2017MitigatedAnnual report
「For new investments, we discuss their strategic significance and priority for the company as a whole. Personnel from corporate divisions participate in the review alongside the responsible sales division, and we assess investment returns and various risks from a broad perspective. After an investment is made, we monitor whether the planned investment returns are being generated and profits commensurate with the risk assets are being secured, and strictly apply restructuring and withdrawal rules to projects that are not progressing as planned.」
The company specified company-wide reviews before investment, monitoring after investment, and restructuring and withdrawal rules, thereby detailing its response to investment risks. - FY2016First statedAnnual report
「If the enterprise value or market value of the shares of an investee company remains depressed, our group may lose all or a substantial portion of the investment amount or may be compelled to provide additional funding to the investee company.」
While pursuing alliances and investments as means of growth, the company identifies declines in investment value and the possibility of providing additional funding as risks.