Response to Expansion of Business Domain

The Tokyo Century Group operates a framework for managing investment projects throughout their life cycle—from initial screening and approval to monitoring and continuation or withdrawal decisions—to ensure investment governance that helps optimize our investment portfolio. Under this framework, when screening an investment, we confirm that the project’s expected future cash flows, which are discounted based on the risk-adjusted cost of capital, exceed the investment amount. We also examine whether its business domain aligns with our portfolio strategy and appropriate withdrawal criteria are in place. Subsequently, the Investment Management Committee conducts a multifaceted evaluation of the project with input from specialized departments, covering risk exposure and legal and tax compliance. The final decision to approve an investment is made by the Management Meeting based on the committee’s findings and other factors.

After an investment is made, we conduct annual monitoring based on a unified process. During this review, we prepare charts detailing the profit margins of all target projects after deducting cost of capital and assess them against our withdrawal criteria. The Investment Management Committee then submits these findings in an annual monitoring report to the Management Meeting and the Board of Directors.

If a project is identified as meeting the withdrawal criteria and the responsible department wishes to continue it, the Investment Management Committee will evaluate this rationale. The final decision on continuation is made by the Management Meeting based on a comprehensive review of the committee’s findings and other factors.

Through this life cycle management process, we manage the expansion of our business domain while improving the efficiency and sophistication of our investment management.

Continuation or Withdrawal