MARUBUN CORPORATION (“the Company”) has formulated and applies its “Basic Policy on Establishing Internal Control Systems,” as follows.
System to Ensure Compliance by the Directors and Employees of the Company with Laws and Regulations and the Articles of Incorporation in the Execution of Their Duties
- The Company shall formulate its “Charter of Corporate Conduct” and “Code of Conduct” indicating standards for appropriate behavior by each individual so that Directors and employees uphold laws and regulations and the Articles of Incorporation and behave ethically.
- The Company shall have an Internal Control Committee chaired by the President to deliberate, manage and oversee internal control in general and basic policies relating to matters such as compliance and risk management.
- The Company shall have a Legal Department as the section responsible for compliance, and the Legal Department shall provide training and guidance to ensure that activities are conducted appropriately in accordance with the “Code of Conduct” and relevant laws and regulations.
- The Company shall establish a whistleblowing hotline that employees, etc. can use to report or seek advice on matters relating to misconduct and illegal or unethical behavior, and shall operate this in accordance with the “Whistleblowing Regulations.”
- The Company shall break off all relations with antisocial forces, and take a firm stance against unjust demands and interference by antisocial forces in collaboration with the police and legal counsel.If Supervisory Committee Members deem that the Company’s compliance structure is unsatisfactory, they shall give advice and make recommendations to Executive Directors.
- The Company shall establish an Internal Audit Office that is independent from the executive divisions as its internal audit division
- The Internal Audit Office shall conduct internal audits and report audit results to the President and the Supervisory Committee in accordance with the “Internal Audit Regulations”.
System for the Retention and Management of Information Concerning the Execution of Duties by the Directors of the Company
- The Company shall retain and manage records relating to decision-making at important meetings, including the General Meeting of Shareholders and meetings of the Board of Directors and Management Committee, and documents approved by each Director in accordance with the “Regulations Concerning Official Authority,” and other information relating to the execution of duties by Directors in an appropriate manner in accordance with the “Document Management Regulations,” and shall keep them available for inspection by Directors.
- The Company shall manage information appropriately and protect information assets in accordance with the “Information Security Management Regulations.”
Rules and Other Systems Regarding the Management of the Risk of Loss of the Company
- The Company shall establish “Risk Management Regulations” as the basis for risk management, and shall develop systems to appropriately manage risk.
- The Corporate Planning Department shall coordinate company-wide risk-management activities, and develop and apply regulations, manuals, etc. within each section in charge with respect to individual risks.
- If a material risk has materialized, the Company shall establish a task force and take prompt and appropriate action to prevent escalation of loss in accordance with the “Crisis Management Regulations.”
System to Ensure Efficient Execution of Duties by the Directors of the Company
- The Company shall convene meetings of the Board of Directors once a month, in principle, and at other times when necessary and make executive decisions to ensure efficient performance of duties by Directors.
- The Management Committee composed of several Executive Directors including the President shall deliberate on important matters relating to the Company’s basic management policies and management strategies. The Management Committee shall meet once a month, in principle, and at other times when necessary.
- The Company shall seek to increase efficiency by stipulating persons responsible for the execution of business based on decisions by the Board of Directors as well as their responsibilities and authority in the “Regulations Concerning Division of Duties” and “Regulations Concerning Official Authority.”
- The Company shall formulate an annual budget, and the Board of Directors shall manage business operations based on this, and conduct management activities appropriately and efficiently.
System to Ensure the Appropriateness of the Operations of the Corporate Group (consisting of the Company and its Subsidiaries)
- The Company shall formulate its “Charter of Corporate Conduct” to be applied across the Group, and shall ensure the appropriateness of operations of the Corporate Group and enforce compliance with laws and regulations and its Articles of Incorporation.
- The Company shall appoint a Director in charge of managing and overseeing the Group’s internal control to promote improvement.
- The Company shall exercise management over the business of subsidiaries through a system of seeking approval from and reporting to the Company in accordance with the “Affiliated Company Management Regulations.”
- The Company shall manage and control subsidiaries by formulating an annual budget for each subsidiary and analyzing the variance between the budget and actual results on a regular basis.
- Regarding compliance and risk management systems, the Company shall develop systems according to the status of each subsidiary, and examine and implement measures against individual risks.
- Each subsidiary shall seek to improve the efficiency of duties by convening meetings of their Board of Directors on a regular basis and by stipulating persons responsible for business execution as well as their responsibilities and authority in regulations such as the “Regulations Concerning Division of Duties” and “Regulations Concerning Official Authority.” They shall also retain and manage the minutes of important meetings, including the General Meeting of Shareholders and meetings of the Board of Directors, approved documents and other information relating to the execution of duties by Directors in an appropriate manner in accordance with the “Document Management Regulations” and the “Information Security Management Regulations.”
- Supervisory Committee Members shall collaborate with the auditors of subsidiaries in investigating the status of business operations and property of subsidiaries where necessary.
- The Company’s Internal Audit Office shall conduct internal audits of subsidiaries in accordance with the “Internal Audit Regulations.”
Matters Concerning Directors and Employees Assigned to Assist the Supervisory Committee in the Execution of Its Duties, Matters for Ensuring the Effectiveness of Instructions Given to Such Directors and Employees, and Matters Concerning the Independence of Such Employees from the Directors of the Company
- The Company shall have a Supervisory Committee Secretariat as an organization to assist the duties of the Supervisory Committee, and shall, at the request of the Supervisory Committee, appoint employees to assist the Supervisory Committee with its duties.
- The Supervisory Committee Secretariat shall perform duties in accordance with instructions of the Supervisory Committee with respect to necessary matters related to the Supervisory Committee and the execution of its duties by Supervisory Committee Members.
- The Company shall report personnel changes, personnel evaluations and disciplinary action involving employees belonging to the Supervisory Committee Secretariat to the Supervisory Committee, and shall respect the opinion of the Supervisory Committee when making decisions.
System for the Directors and Employees to Report to the Supervisory Committee and System to Ensure That Persons Who Have Made Reports to the Supervisory Committee Will Not Receive Any Adverse Treatment for Having Made Such Reports
- Directors and employees shall immediately report to the Supervisory Committee if they discover an actual material breach of laws and regulations or the Articles of Incorporation or actual misconduct, or if they discover that a fact that could seriously damage the Company has occurred or might occur. The Supervisory Committee may ask Directors and Employees to make reports at any time where necessary.
- The Supervisory Committee shall receive reports on the status of development and operation of the internal control system on a regular basis, and Supervisory Committee Members may attend important meetings and view relevant documents to assess the process of important decision making and the status of execution of business operations in accordance with the “Supervisory Committee Audit Standards.”
- The Company shall establish a whistleblowing hotline that Directors and employees of the Company and subsidiaries may use to make reports or seek advice. If the content of such reports suggests a breach of laws and regulations or the Articles of Incorporation, the person responsible for the whistleblowing hotline shall report to the Supervisory Committee.
- The Company shall stipulate in the “Whistleblowing Regulations” that persons who have made reports will not be dismissed or receive any other adverse treatment for having made such reports, and shall ensure that these regulations are applied.
- The Internal Audit Office shall report audit plans and the results of internal audits to the Supervisory Committee.
Systems to Ensure Effective Implementation of Audits by the Supervisory Committee
- The Supervisory Committee and the President shall exchange views on a regular basis. The Supervisory Committee, the internal Audit Office and the Accounting Auditor shall hold meetings on a regular basis and whenever necessary and seek to improve the effectiveness of audits.
- If the Supervisory Committee or a Supervisory Committee Member asks for the advance payment or reimbursement of expenses necessary for the execution of their duties, the Company shall promptly process said expenses or obligation.
Systems for Ensuring Reliability of Financial Reporting
The Group shall formulate the “Management Regulations for Internal Control Over Financial Reporting” and establish a structure for developing and applying internal control systems, to ensure the reliability of financial reporting and to submit internal control reports provided for in the Financial Instruments and Exchange Act effectively and appropriately. The Group shall also ensure compliance with the Financial Instruments and Exchange Act and other relevant laws and regulations by evaluating the effectiveness of internal control systems on a regular basis and making necessary corrections and improvements.