Structure of the Group Internal Control Committee
Corporate auditors attend meeting of the Group Internal Control Committee to supervise the establishment of Group-wide internal control systems and monitor the status of implementation. In this manner, a mechanism is firmly in place to ensure that corporate auditors offer suggestions and advice as appropriate.
Guided by its basic risk management policy, the Committee also makes every effort to identify, compute, evaluate and pinpoint Group company risks. In addition to putting in place all necessary countermeasures, the Committee oversees the timely disclosure of important risks.
In the course of its everyday business activities, the YONDOSHI HOLDINGS Group confronts a variety of risks that have the potential to impact the Group’s operating results and financial condition. While far from exhaustive, the following is a list of major risks the Group is likely to confront.
The Group’s mainstay activity is the planning, manufacture and sale of jewelry. A key raw material in this core activity is platinum, an internationally traded commodity. In the event the Group is unable to fully pass on to product prices sharp rises in raw material prices as well as the impact of changes in foreign currency exchange rates, its operating results and financial condition may be affected.
The majority of the Group’s sales are derived from general merchandising and department stores located in Japan. In addition, both a cool summer and warm winter have the potential to significantly affect market trends. As a result, trends in personal and apparel consumption as well as changes in weather conditions may impact the Group’s operating results and financial condition.
The YONDOSHI HOLDINGS Group is increasing direct transactions with local plants in connection with overseas product production. The U.S. dollar is the principal currency utilized. Accordingly, movements in exchange rates between the U.S. dollar and yen have the potential to impact the Group’s operating results and financial condition.
In its brand business, the YONDOSHI HOLDINGS Group engages in the planning, manufacture and sale of fashion items including jewelry, bags and other products. Accordingly, the Group is faced with fierce competition both from domestic and overseas brands. While the Group is committed to providing unique products and customer service of the highest quality, unforeseen competitive forces and a deterioration in the Group’s competitive prowess may affect its operating results and financial condition.
In an effort to ensure a comprehensive and unified management system for its operations overseas, the YONDOSHI HOLDINGS Group strives to expand and reinforce its overseas production capabilities including its facilities in Vietnam and China. In addition, the Group maintains stores in China as a part of its retail presence. In the context of the Group’s overseas bases, a deterioration in political and economic conditions, a change of government policy, an increase in threats to public and personal safety, incidents of terrorism and the outbreak of war have the potential to impact the Group’s production and marketing activities. In this event, the Group’s operating results and financial condition may be affected.
The YONDOSHI HOLDINGS Group engages in business activities through retail stores and real estate properties located in Japan. In the event of any unforeseen natural disaster including a major earthquake, extensive physical damage to the Group’s retail stores and real estate properties as well as obstacles that impede the Group’s procurement, distribution and marketing activities may substantially impact its overall business. At the same time, any incident that negatively impacts the operations of suppliers or the Group’s procurement and distribution networks may impede business and thereby affect the Group’s operating results and performance.