Currency, Geopolitical, Diplomatic and Natural Disaster Risks Associated with Overseas Business Investments
First written in FY2019. 2 of 4 entries say "Mitigated", first in FY2022-Q2. Latest entry: FY2022.
The whole theme swung hardest in 2023: 5 of 12 companies on the "Worse" side.
5 other companies' latest entry also says "Mitigated".
- FY2022MitigatedAnnual report
「Because MEGURU and its subsidiaries MMS GUAM CORPORATION, SHOBUNSHA SINGAPORE PTE.LTD., SHOBUNSHA HAWAII CORPORATION and SHOBUNSHA GUAM CORPORATION ceased to be subsidiaries of the Company, this risk item has been excluded from the current disclosure on the basis that the risk has been reduced.」
The overseas business investment risk item itself was excluded on the basis that the risk had been reduced following the MEGURU Group's exclusion from consolidation and changes in ownership relationships with the overseas entities. - FY2022-Q2MitigatedAnnual report
「Because the Company's wholly owned subsidiary MEGURU changed its capital structure through a share consolidation and a third-party allotment of new shares, MEGURU and its subsidiaries MMS GUAM CORPORATION, SHOBUNSHA SINGAPORE PTE.LTD., SHOBUNSHA HAWAII CORPORATION and SHOBUNSHA GUAM CORPORATION became equity-method affiliates of the Company. Accordingly, the risk described in the annual securities report for the previous fiscal year under “⑤ Risks arising in connection with investments in new businesses promoted particularly by the Company's Group (Risks relating to overseas business investment)” has been reduced.」
The Company itself explicitly states that overseas business investment risks have been reduced as a result of the MEGURU Group becoming equity-method affiliates. - FY2021WorsenedAnnual report
「If an unforeseen event occurs, such as an outbreak of an unknown infectious disease in the country concerned, the Company may be unable to generate returns commensurate with its investments and may even lose the assets acquired through those investments.」
The Company added outbreaks of unknown infectious diseases in the countries concerned to the overseas business investment risks, alongside foreign exchange, geopolitical, diplomatic and natural disaster risks. - FY2019First statedAnnual report
「The Company has established 4 overseas operating entities and commenced operations, including 3 in the United States and 1 in Singapore. This could significantly expand and grow its in-destination travel business, but it also exposes the Company to risks including those arising from sharp foreign exchange fluctuations, geopolitical risks arising from political upheaval, coups, terrorism and heightened diplomatic or military tensions between the country concerned and other countries, diplomatic risks arising from deterioration in relations between Japan and the country concerned, and natural disaster risks such as earthquakes, typhoons and tsunamis. If an unforeseen event occurs, the Company may be unable to generate returns commensurate with its investments and may even lose the assets acquired through those investments.」
For the first time, the Company has separately identified the possibility that investment recovery may become impossible or assets may be lost due to foreign exchange fluctuations, political upheaval, terrorism and other geopolitical risks, diplomatic risks, and natural disasters while establishing and operating 4 overseas entities.