In accordance with the Companies Act, the Ordinance for Enforcement of the Companies Act, and the Financial Instruments and Exchange Act, we have established a system to ensure the appropriateness of our business operations, with the following basic policy. We will constantly assess the state of development of the internal control system based on this basic policy to implement the necessary measures for improvements, and continually review and revise this basic policy in accordance with changes in business conditions, and work to develop a more effective internal control system.
Basic Policy on Development of Internal Control Systems
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Systems necessary to ensure that the execution of duties by Directors and employees complies with laws and regulations and the Articles of Incorporation
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We position compliance with laws and regulations as the most important management issue, with the Compliance Code as a code of conduct for all directors and employees.
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We will appoint a Director responsible for CSR, and establish a Risk Compliance Committee headed by that director, to ensure compliance with laws and regulations.
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Our Legal & Compliance Division will serve as the point of contact for whistleblowing (reporting of compliance violations) by persons belonging to the Company and Group companies. The division will report the contents of reports it receives to management, and to the Risk Compliance Committee, while maintaining the anonymity of whistleblowers.
- Our Internal Audit Division will conduct regular audits for the entire Group.
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We will not engage in any relationship with antisocial forces, whether direct or indirect.
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System to store and manage information on the execution of duties of Directors
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We will record and retain information relating to the execution of duties by Directors, either in the form of documents (including paper and any other forms of external storage media that can store electromagnetic records), in accordance with our Document Management Regulations.
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We will manage information relating to the execution of duties by the Directors in a state where documents, etc., can be viewed at all times, in preparation for requests from Directors and/or Audit & Supervisory Committee members.
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Rules and other systems for managing the risk of loss
We will take the following measures to appropriately manage our risks as a corporate group.
- We will respond appropriately to loss of credibility such as serious violations of laws and regulations, or disasters, etc., in accordance with our Risk Management Regulations.
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We will ensure rigorous operation of internal regulations such as sales management regulations and accounting regulations to manage risks relating to financial reporting and asset preservation.
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For management of other risks, where the department in charge is clearly defined, each department will create guidelines and ensure that they are thoroughly implemented within the Group.
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For management of cross-divisional risks, or other risks where the department in charge is not clearly defined, we will promptly appoint a Director in charge and a department in charge.
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System for ensuring Directors’ efficient performance of their duties
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To ensure that Directors execute their duties efficiently, we have established rules concerning the Board of Directors. As a general rule, the Board of Directors meets once a month, but meetings can also be held on an extraordinary basis as needed.
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We will ensure the efficient execution of business by clarifying our organizational structure and the tasks under the responsibility of each organizational unit, through Organizational Regulations and Segregation of Duties Regulations, and by clarifying the administrative authority and responsibilities of each position through Job Authority Regulations.
- We will ensure efficient execution of business by transmitting information using our in-house computer network.
- We will validate current internal regulations and establish a management system that will increase efficiency.
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Systems for ensuring that the Group conducts its business properly
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To ensure the appropriateness of business operations within the Group, we have established the Compliance Code as a code of conduct with which all officers and employees of the Company must comply.
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Segregation of duties relating to subsidiaries will be determined in accordance with our Affiliated Company Management Regulations and Segregation of Duties Regulations, and the departments in charge shall oversee subsidiaries to ensure the appropriateness of their operations.
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Matters related to employees who are requested by the Audit and Supervisory Committee to help the committee perform its duties
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When the Audit & Supervisory Committee requests that an employee be assigned to assist them, the Company will have an opportunity for consultation.
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System for Directors and employees of the Group, and those who have received reports from them to report to the Audit & Supervisory Committee
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In addition to statutory matters, Directors and employees will promptly report matters that have a significant impact on the entire Group to the Audit & Supervisory Committee.
- Specific matters to be reported and methods of reporting will be decided in consultation between Directors and the Audit & Supervisory Committee.
- The status of internal audits will be reported regularly to the Audit & Supervisory Committee by the Internal Audit Division.
- Audit and Supervisory Committee members will attend important company meetings, including meetings of the Board of Directors.
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We will ensure that Directors and employees of our Group are not treated unfavorably as a result of reporting to the Audit & Supervisory Committee.
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Other Systems for Ensuring the Effective Audit by the Audit and Supervisory Committee
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The Audit & Supervisory Committee and the Representative Director(s) will meet regularly to deepen mutual understanding and exchange opinions on issues to be addressed by the Company, the state of the Audit & Supervisory Committee’s auditing environment, and important auditing issues.
- The Audit & Supervisory Committee will focus on the development and operation of the internal control system as a key audit item.
- The Audit Division shall be able to assist the Audit & Supervisory Committee in its work.
- Expenses necessary for the execution of duties by Audit & Supervisory Committee members will be paid promptly by the Company upon request.
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System to ensure the reliability of financial reporting
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To ensure the reliability of financial reporting throughout the Group and to respond appropriately to the internal control reporting system, we will establish and operate internal control over financial reporting, and establish a system to evaluate its effectiveness.