Pursuant to paragraph 6 of Article 362 (4) of the Japanese Corporate
Law (and the Enforcement Regulations of the Corporate Law), the basic
policies for the system to properly ensure the appropriateness of the
Company's operations (internal control system) shall be as follows:
I. System to ensure
that business execution by Directors and employees conforms to laws and
regulations as well as Articles of Incorporation and the appropriateness
of other operations of the joint-stock company
1. System to ensure that business execution by Directors
and employees conforms to laws and regulations as well as Articles of
Incorporation (Article 100 (1)-4 of the Enforcement Regulations of the
Corporate Law)
①The persons who are
involved in management take the lead in adhering to the Declaration of
Corporate Policy as well as the Code of Ethics, Quality Assurance Code
and Environment Code which have been set forth in line with our business
philosophy, and ensure conformity through informal meetings with department
chiefs and management discussions with employees.
②To ensure that business
activities adhere to laws and regulations as well as company rules, the
Ethics Committee, an organization which includes external attorneys and
is directly controlled by the President, plans and manages programs seeking
thorough compliance through enhancement of staff education and training,
and makes final decisions on compliance with various business issues.
An officer responsible for risk management reports the detailed activities
of the Committee to the Board of Directors.
③To deal with doubtful
matters on compliance in the Group, the Company establishes an internal
reporting system which allows each administrator to directly inform the
Ethics Committee of such matters. The liaison contacts are set both inside
and outside the Company, which even receives information from external
sources such as business partners. The Company keeps the information secret
and does not treat the informing party disadvantageously.
2.System for storage and administration of information
relating to duties performed by Directors (Article 100 (1)-1 of the Enforcement
Regulations of the Corporate Law)
①Minutes of the General
Meeting of Shareholders, minutes of the meetings of the Board of Directors,
minutes of meetings of various committees chaired by Directors, and approval
forms (ringi-sho), execution reports, etc., produced in accordance with
internal rules (hereinafter referred to as "Documents") shall
be properly stored and managed in accordance with laws and regulations
as well as internal rules such as the Basic Information Security Policies.
②The Directors and Auditors
may examine such Documents at any time.
3.Rules and other systems for management of risk of loss
(Article 100 (1)-2 of the Enforcement Regulations of the Corporate Law)
①The Risk Management Committee, an organization under
the direct control of the President shall strive to build, maintain and
improve the risk management system of the Nissui Group based on the risk
management rules. The risk management officer shall periodically report
the Risk Management Committee's activities to the Board of Directors.
②The respective heads of business divisions shall execute
risk management properly in relation to their operations. For high-priority
risks, such as those relating to compliance, environment, quality and
financial affairs, the organization in charge of such risks shall establish
rules and guidelines, conduct training, produce and distribute manuals,
etc., for risk management on behalf of the Nissui Group.
4. System to ensure the efficient performance of duties
by Directors (Article 100 (1)-3 of the Enforcement Regulations of the
Corporate Law)
①In principle, a meeting of the Board of Directors
shall be convened at least once a month. The Board of Directors shall
determine the management framework and matters under the control of the
Representative Director and Directors in charge of other operations, make
decisions on important matters, and oversee the Directors' execution of
operations.
②For the execution of operations, the President shall
govern the Nissui Group, and each Director shall assume executive responsibility
over the divisions he/she has control over and/or is in charge of. A management
conference attended by all Directors working in Japan shall be held at
least once a month to discuss important matters concerning corporate management.
③The Board of Directors shall resolve medium-term management
plans and the budget for each fiscal year. Each Director shall determine
measures to be taken by the divisions under his/her control in concrete
terms, as well as an efficient operation system including the delegation
of authority, strictly carry out progress management to achieve goals,
and periodically report the progress to the Board of Directors.
5. System to ensure the appropriateness of operations
in the enterprise group consisting of the Company and its subsidiaries
(Article 100 (1)-5 of the Enforcement Regulations of the Corporate Law)
The Nissui Group shall set forth measures to ensure that its operations
are executed in compliance with laws and regulations as well as the Articles
of Incorporation, and build the system described below.
①A Group Management Conference attended by representatives
of Group companies shall be held periodically(quarterly in Japan and semiannually
overseas) and shall report and discuss important matters concerning the
execution of operations. As a function to assist Directors, an officer
shall be appointed in each field to enhance the management functions of
the Nissui Group as a whole.
②While respecting the autonomy of management of Group
companies, the Company shall prepare various rules for the management
of Group companies and enhance governance within the Nissui Group.
③Group companies shall promote compliance activities
by appointing a compliance officer and by establishing a compliance-promoting
organization based on self-imposed internal rules, etc., such as the Code
of Ethics. The Ethics Committee of the Company shall support such activities.
④In the case of overseas, each Director shall assume
executive responsibility over businesses associated with the division
he/she has control over and/or is in charge of. Especially in South America
and North America, a Business Supervisor in South America and a Business
Supervisor in North America shall be appointed, respectively.
⑤The internal audit division, an organization under
the direct control of the President, shall conduct an internal audit on
the Nissui Group based on an annual plan, report the audit results to
the Directors, Auditors and the head of the audited organization, and
periodically report the summary of the results to the Board of Directors.
6. The basic policy and preparation towards the expulsion
of antisocial forces
The Nissui Group's basic policy is to refuse any undue claims
or other requests from antisocial forces or organizations that pose a
threat to civic order and safety. As preparation, the Group has drawn
the attention of its employees to its policy to have no relationship with
antisocial forces by clearly articulating it in its Code of Ethics and
its Ethical Behavior Standards. The Group has also established a system
to appropriately deal with this issue whereby information from related
governmental agencies are collected on an ongoing basis, responsible divisions
are immediately reported to and consulted in the event of incidents and
close liaison is maintained with related governmental agencies and legal
experts.
II.System
to ensure that Auditors' audit is conducted effectively
1.Employee-related matters in cases where an employee
is appointed by an Auditor to serve as his/her assistant(Article 100 (3)-1
of the Enforcement Regulations of the Corporate Law) Employees of the
internal audit division, the
Employees of the internal audit division, the Secretarial Office and
other divisions shall assist the duties of an Auditor upon the Auditor's
request.
2. Matters relating to independence of employees referred
to in preceding paragraph from Directors (Article 100 (3)-2 of the Enforcement
Regulations of the Corporate Law)
An employee who assists the duties of an Auditor as referred to in the
preceding paragraph shall not be subject to instructions or orders from
Directors, etc.
3. System for Directors and employees to report to Auditors
and other systems to report to Auditors (Article 100 (3)-3 of the Enforcement
Regulations of the Corporate Law)
①Directors and employees shall promptly pass on the
prepared documents, etc., (referred to in Section 2 of I. above) to Auditors,
and shall provide an explanation in a prompt and precise fashion when
so requested.
③Auditors shall examine the deliberations, resolutions
and reports of the Board of Directors, and as necessary, enhance the system
to interview and confirm with Directors about the status of execution
of operations.
4. Other systems to ensure that Auditors' audit is conducted
effectively (Article 100 (3)-4 of the Enforcement Regulations of the Corporate
Law)
①Auditors shall conduct audits according to the implementation
procedures relating to internal control established by the Board of Auditors
for the purpose of ensuring the effectiveness of audits, and whenever
necessary, discuss with Directors and enhance the effectiveness of audits.
②The Independent Auditor shall periodically report
the audit plans and audit results to Auditors, and as necessary, Auditors
shall exchange information and opinions with the internal audit division.
