Of the matters concerning the business and financial conditions described in our Annual Securities Report, the major risks that management recognizes may have a significant impact on the consolidated company’s financial position, business performance and cash flows are as follows.
Note that forward-looking statements are based on the Yasuda Logistics Group’s assessment as of the end of the fiscal year ended March 31, 2024.
(1) Natural Disasters, etc.
The Yasuda Logistics Group’s main business bases are concentrated in the Tokyo metropolitan area. In order to minimize damage caused by natural disasters and fires, etc., the Group has formulated business continuity plans, holds regular meetings of the Disaster Prevention Committee, takes seismic resistance measures at facilities, has established self-defense firefighting teams, and conducts safety patrols. However, the Group’s business performance may be affected, regardless of these measures, if a natural disaster or fire were to occur, especially if a large-scale earthquake were to hit the Tokyo metropolitan area. In addition, in anticipation of the spread of infectious diseases such as COVID-19, we are taking preliminary preventive measures and developing an emergency response system to respond to outbreaks. However, the Group’s business performance of may be affected if the spread of infectious diseases, etc. interferes with the stable continuation of business.
(2) Legal Regulations
The Yasuda Logistics Group’s logistics business, real estate business and all aspects of management are subject to various legal regulations, including the Warehousing Business Act and the Building Standards Act. While the Company has been working to strengthen its compliance system, if these legal regulations are strengthened or new legal regulations are established in the future, considerable expense and time may be required to ensure our compliance, which may impact the Group’s business performance.
(3) Changes in the Business Environment
Demand for services provided by the Yasuda Logistics Group in both the logistics and real estate businesses has been fluctuating due to changes in the business environment. In the logistics business, operating rates may decrease, or cost rates may increase due to domestic and international economic trends or changes in the logistics strategies of customers, which may affect the Group’s business performance. In the real estate business, rental prices may decrease, or vacancy rates may increase due to trends in land prices and the real estate rental market, which may affect the Group’s business performance.
(4) Impairment Accounting for Fixed Assets
Fixed assets owned by the Yasuda Logistics Group are mainly used as logistics facilities and rental properties. If the market value of land or buildings declines, profitability deteriorates, or the rental office market worsens, etc., at business locations in the future, the impairment of fixed assets may affect the Group’s business performance.
(5) Changes in the Market Value of Investment Securities
The outstanding balance of the Yasuda Logistics Group’s investment securities at the end of the fiscal year ended March 31, 2024, was 66,545 million yen. However, the value of assets may decrease due to the poor performance of investments and the deterioration of conditions in the securities market, which may affect the Group’s business performance.
(6) Retirement Benefit Obligations
The retirement benefit costs and liabilities of the Yasuda Logistics Group are calculated based on assumptions such as the discount rate and the long-term expected return on pension assets. These figures are based on projections for the future, and any discrepancy in actual results from the estimates will affect costs and liabilities recognized in future years. Any future decline in the discount rate or deterioration in investment performance may have an impact on the Group’s business performance.
(7) Protection of Personal Information
The Yasuda Logistics Group handles personal information in the course of its business. While the Group strives to ensure rigorous management of personal information through the establishment of and adherence to our personal information protection policy and related regulations and by providing education to employees, in the unlikely event that an issue arises due to leaks of personal information, there is a possibility that the Group’s business performance may be impacted.
(8) Information System Failures
The Yasuda Logistics Group has established a comprehensive logistics information system to provide logistics services. To ensure the security of our systems, we have taken various information security measures and established a redundant host computer and network system. However, any disruption to business due to a temporary system failure caused by unauthorized access, may have an impact on the Group’s business performance.
(9) Overseas Business Expansion
The Yasuda Logistics Group operates a logistics business for warehouses and international freight handling overseas through our group companies. When expanding our business overseas, we conduct business activities in accordance with local laws, regulations, administrative procedures, and business customs, etc. However, changes in local laws and regulations, fluctuations in foreign exchange rates, the occurrence of political or economic factors unfavorable to business activities, and social disruptions caused by war, terrorism, infectious diseases and other factors may affect the Group’s business performance.