Internal Control System

Basic Policy for Establishment of Internal Control System

On April 1, 2021, the Board of Directors of the Company approved the "Basic Policy on the Establishment of the Internal Control System". The current basic policy is as follows. The Company will continue to review it in response to changes in society and strive to appropriately operate, improve, and strengthen the internal control system.

1. 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 appropriateness of operations of the corporate group consisting of the Company and its subsidiaries

  • The Company and its subsidiaries have established a compliance program, which stipulates that the Company and its subsidiaries shall respect human rights and comply with all applicable laws, regulations, rules, and ordinances, whether in Japan or abroad and that they shall respect the spirit of such laws and regulations and act with high ethical standards and social good sense.
  • In order to put this into practice, the Company and its subsidiaries shall ensure that directors take the initiative in acting in accordance with this program and that the entire group is thoroughly familiarized with corporate ethics through awareness-raising and education on compliance.

2. System for the storage and management of information related to the execution of duties by the Company's directors

  • Directors shall properly store and manage documents (including electromagnetic records) and other important information related to the execution of their duties in accordance with the Group Document Rules and other rules.
  • The Company shall establish a Group-wide information storage and management system based on the Group Document Management Rules.
  • The Company shall endeavor to ensure the safety and reliability of information assets in accordance with the Information Security Policy.

3. Rules and other systems for managing the Company's risk of loss

  • Based on the Group Management Crisis Management Regulations, the Company stipulates risk classifications, information communication systems in case of emergency, etc. The Company shall thoroughly implement a group-wide risk management system through education and training related to risk management.

4. System to ensure the efficient execution of duties by the Company's directors

  • The Company shall hold a meeting of the Board of Directors once a month in principle and extraordinary meetings of the Board of Directors as needed to make decisions on management execution policies and important matters related to management and to supervise the execution of business operations.
  • The Company's Management Committee shall meet once a month in principle to deliberate and decide on management-related matters and to discuss important matters such as management policies and strategies.
  • Under the holding company structure, the Company shall specialize in supervising subsidiaries and formulating and promoting group strategies, and it shall execute its duties efficiently.
  • The Company shall promote the use of IT to ensure operational efficiency and the effectiveness of internal controls.

5. System to ensure that the execution of duties by the Company's employees complies with laws and regulations and the Articles of Incorporation

  • The Company shall formulate a compliance program and disseminate it to all employees of the Company and its group companies through periodic education and surveys on the degree of penetration of the program.
  • The Company shall utilize the whistle-blower system as a compliance consultation service.

6. The following systems and other systems to ensure the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries

  1. System for reporting to the Company on matters related to the execution of duties by directors, etc. of subsidiaries
    • The Company shall designate a department to oversee and comprehensively manage subsidiaries and shall hold Group Business Strategy Meetings four times a year to share information.
  2. Regulations and other systems for managing risk of loss of subsidiaries
    • Each subsidiary shall strengthen its system for risk management under the direction of the Company's supervising department.
  3. System to Ensure Efficient Execution of Duties by Board and Other Members of the subsidiaries
    • Each subsidiary shall strengthen the system to ensure the efficient execution of duties under the direction of the Company's supervising department.
    • The Company shall provide appropriate support to its subsidiaries for the execution of their business.
  4. System to ensure that the execution of duties by the Board members and employees of subsidiaries is in compliance with laws, regulations, and the Articles of Incorporation of the Company
    • The internal audit department of the Company shall conduct audits in accordance with the internal audit rules.
    • The Company shall operate the whistle-blower system, including that of its subsidiaries.
    • The Company shall establish internal controls necessary to ensure the appropriateness of financial reporting and strive to ensure the reliability of financial reporting.

7. Matters concerning employees to assist the Company's Audit & Supervisory Board Members in the event that the Audit & Supervisory Board Members request the appointment of employees to assist them in their duties (assistant employees), matters concerning the independence of such assistant employees from Directors, and matters concerning the effectiveness of the Audit & Supervisory Board Members' instructions to such assistant employees.

  • When requested by the Corporate Auditors, the Company shall assign employees to assist the Corporate Auditors and make them full-time employees.
  • The Company shall obtain the prior consent of the Corporate Auditors with respect to the appointment and transfer of assistant employees.
  • Each corporate auditor shall have the right to direct and order the assistant employees, and the full-time corporate auditor shall evaluate the performance of the assistant employees.

8. Following systems and other systems for reporting to the Company's auditors

  1. System for reporting to the Company's auditors by the Company's directors and employees
    • Directors shall report to the Board of Directors and the Board of Corporate Auditors without delay when they become aware of any serious violation of laws and regulations, violation of the Articles of Incorporation, violation of the Corporate Code of Conduct, misconduct in the performance of their duties, or any fact that may cause significant damage to the Company.
    • The Company shall utilize the internal reporting system and strengthen the system for reporting to the Corporate Auditors.
  2. System for reporting to the Company's auditors by directors and employees of subsidiaries or those who receive reports from them
    • Corporate auditors of subsidiaries shall meet with corporate auditors of the Company on a regular basis to provide information and exchange opinions with each other.
    • Each subsidiary shall report to the Company's auditors on matters discussed at the Group Business Strategy Meeting.
    • Subsidiaries shall also utilize the Company's internal reporting system and strengthen the system for reporting to the corporate auditors.

9. Systems to ensure that a person who makes a report under the preceding item will not be subjected to any disadvantageous treatment because of such report

  • The Company shall maintain the confidentiality of the content of consultations through the whistle-blowing system and prohibit any disadvantageous treatment of those who have consulted with the Company.

10. Matters concerning procedures for prepayment or reimbursement of expenses incurred in the performance of duties by the Company's corporate auditors and other policies concerning the treatment of expenses or liabilities incurred in the performance of such duties

  • The Company shall pay all expenses necessary for the execution of duties by Corporate Auditors upon their request.

11. Other systems to ensure that the audits of the Company's auditors are conducted effectively

  • The President shall hold not only regular meetings but also meetings as often as possible to exchange opinions on the company's operation as well as to communicate with auditors, in addition to reporting on business.
  • The President shall work with corporate auditors and accounting auditors to enhance the internal audit department in order to support effective audits.

Basic Policy on Elimination of Antisocial Forces and Maintenance Status

1. Basic Policy on Elimination of Antisocial Forces

  • We do not have any relationship with antisocial forces. If we are contacted by antisocial forces, we will immediately report the matter to the police and systematically deal with violent demands and unjustified claims in cooperation with our legal advisors.

2. Status of Maintenance for Elimination of Antisocial Forces

  • The Company's Charter of Corporate Behavior stipulates that the Company shall resolutely confront antisocial forces and groups that threaten the order and safety of civil society and shall never accept any unreasonable or illegal demands.
  • The Company's Charter of Corporate Behavior is posted on the Company's website.
  • All Board Members and employees of the Group are committed to complying with the Compliance Program, which includes the Charter of Corporate Behavior, the Compliance Code of Conduct, and the Whistleblower System.
  • The General Affairs Department oversees the response to these forces and is a member of the Federation for the Prevention of Special Violence, and collects the latest relevant information from the jurisdictional police stations, administrators of shareholder registry, etc., in order to prepare for unforeseen situations.