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Basic Policy on Internal Control

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  2. Basic Policy on Internal Control
  1. System for ensuring that Officers and employees will execute duties in conformity with laws and regulations and the Articles of Incorporation

    Toward the compliance with laws and regulations and the Articles of Incorporation by officers and employees and the fulfillment of social responsibility, we will thoroughly make them known to the officers and employees and will develop and maintain a compliance system in accordance with the Compliance Regulations.

  2. System for keeping and managing information about Directors’ execution of duties

    We will keep and manage documents about the Directors’ execution of duties and other important information and documents in accordance with the Information Management Regulations and the Regulations on Management of Documents.

  3. Regulations and other systems for the management of risks of loss

    We will develop a risk management system for matters concerning the management of risks of loss in accordance with the Risk Management Regulations. The risks will be also examined and assessed by the board of directors and Executive Committee as the occasion demands to develop and operate the risk management system that is capable of carrying out effective measures.

  4. System for ensuring that the Directors’ execution of duties will be effective

    As the foundation for securing the effectiveness of the Directors’ execution of duties, we will hold a regular board of directors meeting, as a rule, once a month, as well as special meetings of the board of directors on an as-needed basis to decide on matters stipulated in laws and regulations, the Articles of Incorporation, and the board of directors Regulations, as well as other important matters. Any important matters concerning a management policy or business strategy will be discussed and deliberated by Executive Committee in advance, so that their execution will be decided in a careful and prompt manner. For the execution of duties and business based on the decisions of the board directors, the Job Function Regulations and the Regulations on Division of Duties will provide for persons responsible for each of them and details of their responsibilities and execution procedures.

  5. System for ensuring the appropriateness of business in the Company and its subsidiary companies

    In addition to the management philosophy, and Vision, Mission and Values, we will have the internal control office periodically check the practice of the action criteria and standards that must be performed by officers and employees in accordance with the Code of Conduct on Corporate Ethics stipulating them. The internal control committee will supervise the internal control and strive to maintain an appropriate internal control system in cooperation with the corporate auditors, audit corporation, and internal control office. The Company will dispatch at least one officer to a subsidiary company as a director or corporate auditor to monitor, supervise, or audit the Directors of the subsidiary company. The administration department takes charge of the maintenance of the compliance system and risk management system of a subsidiary company in accordance with the Affiliated Company Management Regulations. We will respect the autonomy of a subsidiary company regarding its management and will obtain adequate approval on important matters.

  6. System for ensuring the reliability of financial reporting

    We will ensure the reliability and appropriateness of financial reporting in cooperation with the financial auditor by maintaining a system by which internal control will be implemented on the reliability of financial reporting in a valid and adequate manner under the Financial Instruments and Exchange Act.

  7. Where applicable, matters concerning the employees required by the corporate auditors as assistants in their duties

    When the corporate auditors request that employees be appointed to assist in their duties, the board of directors will appoint, after consultation with the Board of Statutory Auditors, employees to assist their duties on an as-needed basis.

  8. Matters concerning the independence of employees assisting in the corporate auditors’ duties from Directors

    During the period in which the employee is to assist under the preceding item, the authority to direct the employee shall be delegated to the corporate auditors, and the employee shall not be subject to the direction or orders of the directors. Any transfer of personnel, dismissal, disciplinary action, revision of wages, etc. during the said period shall be made with the prior approval of the Board of Statutory Auditors.

  9. System for Officers and employees to report to corporate auditors and other systems for reporting to corporate auditors

    The Directors will periodically report the execution of duties and other conditions in board of directors’ meetings and other important meetings that the corporate auditors attend. The Directors or employees will promptly provide the corporate auditors with reports when they find that there is the occurrence or the possibility of the occurrence of matters that materially affect the Company, in addition to reports on statutory matters.

  10. System for ensuring that a person who has submitted a report under the preceding paragraph will not be treated disadvantageously on the grounds of the report

    The Group prohibits any disadvantageous treatment against any person who has submitted a report under the preceding paragraph or whistleblowing to the internal reporting contact on the grounds of the report or whistleblowing, and will thoroughly make such prohibition known to the officers and employees by specifying it in the Code of Conduct on Corporate Ethics.

  11. Matters concerning policies for the management of expenses or debts incurred incidental to the execution of duties of corporate auditors of the Company

    All expenses and debts incurred incidental to the execution of duties of the corporate auditors under Article 388 of the Companies Act will be managed based on the requests of the corporate auditors, unless they are considered to be unnecessary for the execution of duties of the corporate auditors.

  12. Other systems for ensuring the effectiveness of the corporate auditors’ audits

    We will develop a system where the corporate auditors may periodically interview officers and employees and exchange opinions.

  13. System toward the elimination of antisocial forces

    We will respond to antisocial forces threatening the social order and sound corporate activities in a resolute attitude as a whole organization and will develop a system to avoid having any relationship whatsoever with them.

Developed February 21, 2008
Revised December 11, 2015
Revised September 11, 2020
Revised October 18, 2021
Revised October 20, 2023

Masaki Hilaga, Representative Director and President