Takuma has adopted a Basic Policy for Establishment of an Internal Control System in accordance with the Companies Act. We continue to review and improve this policy in response to changing circumstances. Working towards thorough compliance, Takuma built a compliance promotion organization in FY2006 in order to continuously implement enlightenment and educational activities that make corporate ethics, related laws and ordinances, and internal rules fully understood. To control the danger of loss, we have also prepared a "Risk Management Code"that determines the person in charge of each risk, and we set up our risk management organization according to that Code. When the unexpected occurs, emergency headquarters are established with the company president as the director in charge of risk management, and an organization is put in place in order to minimize and prevent further damage through prompt action.
Internal control, constructed and evaluated in order to report on and prevent misstatements in our financial reporting, is based on the Financial Instruments and Exchange Act. This internal control on financial reporting for the Group has resulted in reports that indicate this system has been effective.
In this way, we will continue to work in the future to ensure thorough compliance while carrying out business properly and efficiently while also deepening risk management.
We shall ensure compliance with "Takuma Group Ethics Charter" and "Takuma Group Code of Conduct," established as codes of conduct for directors, executive officers, and employees
Regarding the Board of Directors, we shall ensure its proper operation through Board of Directors rules. Meetings shall be held monthly as a general rule, with additional meetings convened as necessary to facilitate communication among directors. Directors shall mutually supervise the execution of duties and prevent violations of laws, regulations, and the Articles of Incorporation.
The execution of duties by directors shall be subject to audit by the Audit & Supervisory Committee in accordance with the audit policies and responsibilities established by said committee. Furthermore, if a director discovers a violation of laws, regulations, or the Articles of Incorporation by another director, they shall immediately report it to the Audit & Supervisory Committee and seek corrective action.
Information pertaining to the execution of directors' duties shall be properly stored and managed in accordance with "Document Management Regulations" and other relevant regulations.
To address risks associated with our operations, we have established a department to oversee company-wide risk management and promote risk management in collaboration with related committees and other bodies.
Regarding the management of loss risks, we have established "Risk Management Regulations" to designate management responsible persons for individual risks and build a risk management system in accordance with these regulations. In the event of unforeseen circumstances, an Emergency Response Headquarters, headed by the President, is established to manage the crisis. This system ensures rapid response to prevent the escalation of damage and minimize its impact.
The executive officer system separates decision-making and supervisory functions for important matters from operational execution functions, and management executive meetings are held with executive officers in attendance.
The Committee of Executive officers deliberate on matters to be submitted to the Board of Directors and other important management matters, and has the function of submitting them to the Board of Directors. It also has the function of instructing and directing the executive departments to efficiently execute resolutions made by the Board of Directors and other important decisions related to business execution.
Regarding business execution based on resolutions of the Board of Directors, the "Authority for Decision-Making Regulations" specifies the respective responsible persons and their responsibilities, as well as the details of the execution procedures.
A department overseeing all compliance matters shall be established to establish, develop, and maintain a compliance framework based on the "Takuma Group Ethics Charter" and "Takuma Group Code of Conduct."
A department overseeing all compliance matters shall be established to establish, develop, and maintain a compliance framework based on the "Takuma Group Ethics Charter" and "Takuma Group Code of Conduct." As an internal reporting system for facts related to violations of laws, "Takuma Group Ethics Charter" and "Takuma Group Code of Conduct." As an internal reporting system for facts related to violations of laws, regulations, or the Articles of Incorporation, or other compliance issues, we have established an internal whistleblowing system with the Compliance Oversight Department and external third-party organizations as information recipients. This system is operated based on the "Internal Reporting Code."
We have established an internal audit department independent from the executive departments to conduct internal audits, including the implementation status of the compliance system.
System for Reporting Matters Related to the Execution of Duties by Directors of Subsidiaries to the Company
The Company establishes "Operating Standards for Group Management" and, based on these standards, approves important matters or receives reports to ensure proper management of the entire group.
The Company receives regular reports at its Committee of Executive officers regarding the financial results, business conditions, and other important operational matters of group companies.
If a director of a group company discovers any violation of laws, regulations, or the Articles of Incorporation, or any other significant compliance-related matter within the group company, or if they determine that management guidance from the Company violates laws, regulations, or the Articles of Incorporation, or presents other compliance issues, they shall immediately report this to our Audit & Supervisory Committee.
Regulations and Other Systems for Managing the Risk of Losses at Subsidiaries
Group companies shall engage in risk management based on their own policies and plans to address risks related to business execution, and the Company shall support them in this effort.
System to Ensure Efficient Execution of Duties by Subsidiary Directors
Based on group policies established in the "Operating Standards for Group Management" and medium-Term management plans, the responsible department will lead the management oversight and guidance of group companies to enhance the efficiency and appropriateness of operations across the entire group.
System to ensure that directors and employees of subsidiaries perform their duties in compliance with laws and regulations and the Articles of Incorporation
To ensure the proper conduct of business at group companies, we will promote shared compliance with the "Takuma Group Ethics Charter" and "Takuma Group Code of Conduct."
Establish and operate necessary and appropriate internal controls to ensure the accuracy of financial reporting by the Company and its group companies.
The internal audit department shall monitor risks by including major group companies within its internal audit scope.
The Audit & Supervisory Committee’s Office shall be established under the Audit & Supervisory Committee. As necessary, after consultation between the directors (excluding those who are members of the Audit & Supervisory Committee) and the Audit & Supervisory Committee, assistant staff shall be appointed from among the Company's employees.
The appointment, dismissal, personnel transfers, performance evaluations, and disciplinary actions of assistant employees shall be decided with the consent of the Audit & Supervisory Committee.
Auxiliary employees may concurrently hold positions related to the execution of duties.
When performing duties based on instructions from the Audit and Supervisory Committee, auxiliary personnel shall not receive direction or orders from directors (excluding those who are members of the Audit & Supervisory Committee) or other executive officers.
System for Directors (excluding Audit & Supervisory Committee members), Executive Officers, and Employees to Report to the Audit & Supervisory Committee
System for Directors (excluding Audit & Supervisory Committee members), Executive Officers, and Employees to report to the Audit & Supervisory Committee shall be established specifying the matters and timing for which directors (excluding Audit & Supervisory Committee members), executive officers, and employees must report to the excluding Audit & Supervisory Committee. Based on these regulations, Audit & Supervisory Committee members shall grasp the status of business execution through attendance at Committee of Executive officers and other important meetings. Furthermore, directors (excluding Audit & Supervisory Committee members), executive officers, and employees shall report to Audit & Supervisory Committee members in a timely manner regarding important matters affecting the Company's business or performance.
System for directors, auditors, employees of subsidiaries, or persons receiving reports from such individuals to report to our Audit & Supervisory Committee
Audit & Supervisory Committee members attend our Committee of Executive officers where group companies report on significant operational matters, and receive reports on important matters stipulated in the "Operating Standards for Group Management" in a timely manner.
Audit & Supervisory Committee members regularly convene the Group Auditors Liaison Meeting to receive reports on audit status and other matters.
The external reporting contact point for the internal reporting system of group companies shall be our Compliance Management Department or an external third-party organization. For significant reports received by the reporting contact point of a group company, the investigation results shall be reported to the Audit & Supervisory Committee.
Whistleblowers under the internal reporting system shall not be subject to adverse treatment as a result of making a report.
When our Audit & Supervisory Committee members submit claims to the Company for expenses incurred in the execution of their duties, the Company shall honor such claims unless it determines that the claim is not necessary for the execution of the Audit & Supervisory Committee member's duties.
The Audit & Supervisory Committee may, when deemed necessary, request the Representative Director and others to ensure the establishment of an audit system and environment.
The Takuma Group maintains absolutely no relationship with antisocial forces or groups that threaten the order and safety of civil society, as stipulated in the Takuma Group Ethics Charter and the Takuma Group Code of Conduct.
To exclude antisocial forces, we will strive to gather information on their latest activities and promptly address them organization-wide by collaborating with external specialized agencies, including the police.
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