General Thoughts Concerning the Internal Control System and Status of Development
The following is a summary of decisions made regarding systems to ensure that the execution of duties by directors complies with laws and regulations and the Articles of Incorporation, and other systems to ensure the appropriate business operations of the listed company and the corporate group consisting of the listed company and its subsidiaries
System for the storage and management of information regarding the execution of duties by directors.
The Board of Directors appoints a person from among the directors who is responsible for company-wide control. Information related to the execution of duties by directors is stored and managed in the form of documents or electromagnetic records in accordance with the Document Handling Regulations, Confidential Information Handling Regulations, Personal Information Protection Regulations, Insider Information Management Regulations.
Regulation and system concerning risk management andlossprevention.
In order toprevent losses, specific risks are identified and categorized in the Emergency Response Regulations, and a system is in place to ensure prompt and appropriate communication of information in the event of an emergency. In accordance with the Internal Audit Regulations, the internal audit department assesses and monitors the status of risk across the organization, and regularly reports to the Board of Directors on matters related to risk management.
A system to ensure that board members’ professional duties are carried out efficiently.
In order to improve the efficiency and speed of the execution by directors, a part of the authority of the Board of Directors has been delegated to the Corporate Executive Office.Also, inorder to ensure operational efficiency, the executive officer in charge sets numerical targets for each division to achieve the company-wide targets set by the Corporate Executive Office. The Corporate Executive Office reviews and approves the targets andthen regularly checks the achievement using management accounting methods and reports the results to the Board of Directors.
A system to ensure that the duties of directorsand employees are carried out according to the law and Articles of Incorporation.
The management office will monitor the duties of directors and employees and carry out a company training as deemed necessary. In addition, the internal audit departmentcooperateswith the Auditand Supervisory Committeetounderstand the duties of directors and employees, carriesout regular auditing, and reports to the Board of Directors.
Asystem to ensure appropriateness of the operations of the Company and the Group of subsidiaries
The Board of Directors will give the Corporate Executive Officea set of numerical targets that the Group (the Company and subsidiaries) must achieve.In addition, the Corporate Executive Office is given the authority and responsibility to manage risks andestablish a legal compliance system, and the management office promotes and manages these activities across the Company.In order for each company in the Group to make progress in its individual performance and contribute to the overall growthof the Group's performance, the Company establishes regulations for the management of subsidiary companies and establish a system for regular reporting on the performance of the subsidiaries.
The Company requires its subsidiaries to report certain important matters and risk information to the Company's Board of Directors and the Corporate ExecutiveOffice in advance, and certain matters shall be submitted to the Board of Directors.In addition, the Internal audit departmentperiodically conducts audits of the Company's subsidiaries and reports to the Board of Directors.
Matters relating to the relevant directors and employees who should assist the Audit and Supervisory Committeemembers
The Internal audit departmenthas been established as an organization to assist the Audit and Supervisory Committee, and employees necessary for auditing operations have been assigned.
Matters concerning the independence of employees from directorsandmatters relating to ensuring the effectiveness of instructions
Employees who are to assist the duties of directors who are Audit and Supervisory CommitteeMembers shall follow their instructions and orders in assisting the duties of directors who are Audit and Supervisory CommitteeMembers.In addition, we ensure the independence of such employees and the effectiveness of instructions regarding their duties by respecting the opinions of the Audit and Supervisory Committee regarding the duties and personnel transfers of such employees.
System for reporting to the Audit and Supervisory Committee members by directors and employees of the Company
The Directors, Executive Officers, corporate management divisionand internal audit department shall regularly report the following important matters concerning the Group to the director who is a full-time member of the Audit and Supervisory Committee, and the director who is a full-time member of the Audit and Supervisory Committee shall submit such reports to the Audit and Supervisory Committee.
1)Matters relating to important decision making.
2)Important matters regarding the financial state of the business.
3)Matters concerning instances that may cause considerable harm to the company.
4)Important matters relating to the state of the internal auditing department and risk management.
5)Violations of the articles of incorporation or law.
6)Other important matters.
System to ensure that a person who has made a report as stated in the preceding item will not be treated disadvantageously for having made such a report
We have established internal regulations to prevent disadvantageous treatment of those who report to directors who are Audit and Supervisory Committeemembers on the reason that they have made such reports.
Matters concerning procedures for prepayment or reimbursement of expenses incurred in the execution of duties by Audit and Supervisory Committee Members (limited to those related to the execution of duties by the Committee), and other policies concerning the handling of expenses and debts arising from the execution of such duties
When a director who is a member of the Audit and Supervisory Committee makes a request to the Company for advance payment of expenses based on Article 399-2, Paragraph 4 of the Companies Act in the execution of his / her duties, the department in charge deliberates and makes the request. Unless it isdeemed that such expenses, etc. are not necessary for the execution of duties by the directors who are the Audit and Supervisory Committee members, the expenses, etc. will be promptly processed.
System to ensure that the auditing of Directors who aremembersof the Audit and Supervisory Committeeis carried out efficiently.
The representative director discusses important management matters with the Audit and Supervisory Committee.The Audit and Supervisory Committeehavethe right to work with external experts such as lawyers and certified accountants when necessary to perform their duties.
Basic Policy and Efforts to Eliminate Antisocial Forces
The Group will, as an organization, thoroughly respond with a firm attitude to such antisocial forces. Furthermore, with the objective of eliminating antisocial forces, the Group cooperatedfor some time with Outside specialized bodies, such as law enforcement organizations and attorneys at law, and promoting the reinforcement of information gathering, management and in-house systems related to antisocial forces.