| Our Company has established a 'system to secure appropriateness of operations'(Hereafter,
'internal control' pursuant to the Corporation Law and the Ordinance for
Enforcement of the Corporation Law. |
| 1. |
The system is to secure compliance of job execution by directors
and employees with laws and regulations as well as the Article of Association. |
| 1) |
We shall position the Iseki Group Code of Ethical Behavior
and Ethical Code as the basis of the compliance system, and promote their
complete awareness by all group members through education, training seminars
and other means. |
| 2) |
We shall manage the Group Internal Communications System
('Ethical Hotline' which was created as a reporting system concerning
compliance, pursuant to the internal communications system management
regulations. |
| 3) |
Integrated control of compliance shall be conducted
by the General Affairs Department as the leading department. |
| 4) |
The Operation Supervising Department, the Company's internal
auditing division shall audit the state of compliance and report the
results to the Management Supervisory Committee. |
| 5) |
Directors and employees shall report to the Management
Meeting whenever they discover significant violation of laws and regulations
and other misconducts without delay. |
| 2. The system concerning maintenance
and control of information related to job execution by directors |
| |
With respect to information related
to job execution by directors such as minutes of the board of directors
and approval documents, it shall be maintained and controlled properly
and firmly in highly retrievable condition according to the media
of maintenance and pursuant to the board of director' regulations and
the rules of documents. |
| 3. Regulations and other systems concerning management of risk of loss |
| 1) |
We shall formulate risk management regulations
and conduct total management of risks with the Corporate Planning
Department as the leading department. The department will implement
a thorough study and evaluation of every risk surrounding the Company
and ISEKI Group and take appropriate measures. |
| 2) |
Directors and employees shall report to the Management Meeting
whenever a significant risk has occurred without delay. |
| 4. The system to secure efficient job execution
by directors |
1)
|
We shall consolidate various regulations like the regulation
of authority/regulation of division of duties, internal control system,
budget system, personnel-management system and others to secure efficient
job execution
by directors. |
| 2) |
Important issues shall be given multidimensional deliberation
at the Management Meeting. |
| 5. The system to secure appropriateness of operations
of the Company and the company group which consists of subsidiaries. |
1)
|
In order to secure appropriateness of operations related
to all group companies, we shall strengthen our cooperative system by
preparing various regulations at each company group based on the sales
company control
regulations and the affiliated company control regulations. With respect
to management control, we shall control management of subsidiaries mainly
by approval of important matters of management as well as reporting on
execution conditions of the operations/financial situation pursuant to
the sales company
control regulations and affiliated company control regulations. |
| 2) |
Upon the occurrence of risk and violation of compliance, group companies
shall report to the department in charge of the operation and the Internal
Control Department without delay, and the department in charge and the
Internal Control Department shall give proper instruction. |
| 3) |
In order to secure the appropriateness and reliability of financial
reporting, we shall consolidate our system pursuant to the Financial
Products Transaction Law and other applicable laws and regulations,
and evaluate
its effectiveness and make improvements, etc. |
| 4) |
The Operation Supervising Department shall conduct internal control
audit on a regular and irregular basis, and report to the Management
Supervisory Committee concerning important matters. |
| 5) |
In the event subsidiaries should recognize that contents of management
control/management guidance etc. from the Company violates laws and
regulations or has other problems of compliance, the subsidiaries shall
report to the
Internal Control Department and the department in charge of the operation
to such an effect. With respect to a serious violation of laws and regulations
and other misconducts, the Internal Control Department shall report
to the Management Meeting without delay. |
| 6. In the event corporate auditors requested to
have employees assigned to assist in their duties, matters related to such
employees and matters related to the independence of such employees from
directors. |
| 1) |
In the event there was a request from corporate auditors,
we shall assign employees to assist the duties of the corporate auditors. |
| 2) |
Matters related to assignment, transfer, disciplinary punishment,
evaluation, etc. of the employees shall be decided upon approval of
the Corporate Auditors' Meeting. |
| 7. A system for directors and employees to report
to auditors, a system for other reporting to auditors, and other system to
secure effective implementation of auditing by auditors. |
1)
|
Directors and employees shall report on important matters
related to the operation or business performance of the Company and group
companies as they think proper. |
| 2) |
Directors and employees shall report to auditors when they have found
serious violation of laws and regulations or when serious risk has occurred. |
| 3) |
Corporate auditors shall be authorized to request a report from directors
and employees whenever in accordance with necessity. |
| 4) |
Whenever they acknowledge problems in management of the compliance
system and internal reporting system, corporate auditors shall be authorized
to express opinions to directors and employees and also request formulation
of measures for improvement. |
|
Enacted on May 12, 2006 |
| Revised on June 21, 2007 |
| Revised on December 26, 2008 |
|