(FY 2019) Basic Policy on the Development of Internal Control Systems
1. Systems to ensure that the execution of the duties of directors with laws and regulations and the articles of incorporation
Ensure the legitimacy of the execution of the directors’ duties by ensuring compliance awareness and establishing effective governance systems and monitoring systems.
2. Systems regarding retention and management of information in relation to the execution of the duties of directors
Information on the execution of the directors’ duties shall be appropriately retained and managed in accordance with laws and regulations and internal rules.
3. Rules and other systems related to management of the risk of loss
Establish regulations on risk management, collect and evaluate all risk information exhaustively, identify important risks, take measures according to their importance, and monitor progress and continuously improve them.
4. Systems to ensure that the execution of the duties of directorsare performed efficiently
Ensure the efficiency of the execution of the directors’ duties by making decisions faster, clarifying management objectives by business plans, etc., and verifying the status of achievement.
5. Systems to ensure that the execution of the duties of an employee complies with laws and regulations and the articles of incorporation
Improve employees’ compliance awareness by clarifying policies for compliance.
Ensure the legitimacy of the execution of the employees’ duties by establishing effective monitoring systems.
6. Systems to ensure the proper business activities in a group of enterprises comprised of our company and subsidiaries
To ensure the proper business activities of our group of enterprises, weshall thoroughly implement our management policy, management philosophy, and internal control system to our subsidiaries and establish the following systems.
1) Reporting system concerning the matters related to the execution of the duties of directors, etc. of subsidiaries
2) Rules and other systems concerning management of risk of loss of subsidiaries
3) System for ensuring efficient execution of the duties of directors, etc. of subsidiaries
4) System for ensuring that the execution of the duties of directors and employees of subsidiaries complies with laws and regulations and articles of incorporation
7. Matters related to the employee who assists with the duties of auditor and the independence from directors of such employees
Establish an independent organization from directors and appoint special staff to enhance the effectiveness of audit and to perform auditor’s dutiessmoothly.
8. Matters concerning ensuring the effectiveness of the instructions byauditors to the special staffwho assists the auditor’s duties
The special staff shall comply with the internal rules, but the right to command to the staff shall exclusively belong to the auditors and his/her personnel matters shall be decided after consultations with auditors.
9. System for reporting to auditors of our company by the directors / employees of ourcompany and the directors / auditors / employees of subsidiaries
Ensure them the opportunity and the system which they are appropriately able to report to the auditors of our company.
10. System to ensure that a person who has reported to auditor does not receive disadvantageous treatment because of the report
Any person who has reported to the auditor under the item (9) shall not be treated disadvantageously as a reason for the report.
11. Policies relating to dealing of the expenses or debt incurred in the execution of auditors’ duties
To ensure the effectiveness of the audit, the expenses incurred in the execution of the auditors’ duties shall be secured in budget every year, and the incidentalexpenses over the budget shall be paid or redeemed by our company in accordance with laws and regulations.
12. System to ensure that audits by auditors are effective
Establish a system to ensure that audits by auditors are effective in accordance with the company's annual formulation "audit plan".