| 1. Basic policy for execution of duties |
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In pursuing its Management Philosophy, SANIX sets its basic policy that, in executing their duties, all officers and employees should comply with laws and regulations and also should act in good faith in accordance with the sense of ethics and value expected of corporate persons and citizens as members of society. Based on this idea, through strict observance of social norms, ethics, and laws and regulations, SANIX endeavors to realize fair and adequate business management and harmonization with civil society.
[Management Philosophy]
gOur job is to educate and education means management.h
[Action Objectives]
- Create great environment with completeness and a mindset of faith, gratitude and service,
- Strive for creation of comfortable environmental with united effort, and
- Stick to the principle of customer-comes-first and serve them with sincerity.
In accordance with this Management Philosophy, recognizing that it is the important managerial duty to establish and operate systems that ensure proper execution of operations, we will endeavor to create the internal control systems as described below. And we will also continue to make improvements in such internal control systems in response to changes in internal and external business environments.
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| 2. System for storing and controlling information related to duties executed by directors |
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(1) |
Information and documentation related to duties executed by directors (hereinafter gDirectorsf Duty Informationh) shall be properly stored and controlled (including proper destruction) in accordance with SANIXfs internal regulations and relevant control manuals. The actual handling status of Directorsf Duty Information shall be checked and relevant regulations shall be reviewed as needed. |
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(2) |
Directorsf Duty Information shall be compiled into database, and a system to search and retrieve information on the storing/destruction status of a document shall be established. |
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(3) |
Administrative work related to Items (1) and (2) above shall be controlled by the director in charge. The director in charge shall report the progress of checking and review of matters in Item (1), and the status of operations and control of the database explained in Item (2) periodically in the meeting of the board of directors.
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| 3. Regulations and systems related to management of risk of loss |
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(1) |
SANIX has the Internal Auditing Office and the Risk Management Office that directly report to the president. The manager of each of these offices is responsible for administration of the office. |
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(2) |
The Internal Auditing Office shall conduct periodical review of operational items to be audited and the method of auditing. The Internal Auditing Office shall make modifications to the auditing method as needed to ensure that all necessary items are covered by the operational audit. |
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(3) |
If an audit by the Internal Auditing Office has identified any act that may cause operational loss for a breach of laws, regulations or the articles of incorporation or for any other reason, the Internal Auditing Office shall immediately report to the Risk Management Office the details of the risk identified and the extent of potential loss. Then the Risk Management Office shall call a meeting of the Risk Management Committee led by the manager of the Risk Management Office to discuss and determine actions to be taken to eliminate or mitigate such risk. |
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(4) |
To ensure effective and efficient operation of activities by the Internal Auditing Office and the Risk Management Office, each department shall be requested to establish risk management regulations and other related regulations (such as credit check regulations, financial and accounting regulations), guidelines and manuals. All employees shall understand the importance of the roles and duties of the Internal Auditing Office, and shall be instructed to report immediately to the Internal Auditing Office whenever they find any risk of operational loss. |
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(5) |
The Risk Management Committee shall develop risk management regulations and check the operating status of those regulations. It also shall plan and provide risk management training and education to employees.
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| 4. Systems to ensure effective and efficient execution of directorsf duties |
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(1) |
In the area of management of the business plan, each business operation line shall work to achieve the goals set in the annual business plan established every year and the medium-term business plan, both built on the Management Philosophy of SANIX. Moreover, periodical checking shall be conducted through the examination of operation reports to confirm whether the operational goals are being achieved as originally planned. |
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(2) |
In the area of the management of business operations, all matters specified in the Regulations for the Board of Directors and any other similar matters deemed requiring resolution by the board of directors should be presented to and resolved by the board of directors. Materials containing sufficient information on the matters to be presented in a meeting of the board of directors shall be distributed in advance to all officers, in accordance with the business judgment rule. |
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(3) |
In daily operations, authority shall be delegated to appropriate managers at each level based on the job function regulations, division-of-duties regulations and other regulations. Managers at each level shall perform their duties in accordance with the predetermined decision-making rules.
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| 5. Systems to ensure that performance of duties by employees complies with laws, regulations and the articles of incorporation of SANIX |
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(1) |
A person responsible (such as an officer or executive officer) for ensuring strict compliance of laws, regulations and the articles of incorporation by all employees shall be appointed. Compliance regulations and the compliance manual shall be created under the leadership of such responsible person. An internal reporting system shall also be established that requires all employees to report any act in breach of laws, regulations or the articles of incorporation of SANIX. |
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(2) |
In case of any non-complying situation, a system where the details of the non-complying situation and actions taken or to be taken are reported via the person in charge to the top management, the board of directors and the corporate auditors shall be established. |
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(3) |
The person in charge of employeesf compliance shall appoint a compliance controller or any other necessary position in each department in accordance with the compliance regulations, and shall manage and supervise the observance of the compliance manual and establish a proper employee training system through which guidelines for internal reporting and the contact person for internal reporting shall be informed to employees.
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| 6. Systems to ensure proper operations in SANIX and the corporate group comprising SANIX and its subsidiaries |
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(1) |
SANIX shall conclude an internal audit agreement with each subsidiary or affiliate regarding regularly auditing to check if there are any risks of loss in each subsidiary or affiliate (hereinafter collectively referred to as a gsubsidiaryh). |
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(2) |
Directors of SANIX in charge of respective business segments in the SANIX Group shall be appointed. Directors in charge shall have power and responsibility to establish compliance and risk management systems for the business segments they are in charge. |
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(3) |
SANIXfs Internal Auditing Office shall conduct internal auditing of SANIX and its group companies. The results shall be reported to the head and members of the department in charge of internal control. The head and members of the department in charge shall give to the audited departments and companies instructions and advice for improving their internal control as needed. |
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(4) |
The internal auditing office or similar department in each subsidiary shall cooperate with the auditing conducted by SANIXfs Internal Auditing Office. |
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(5) |
A system shall be established in which the details of the identified risk of loss, the extent of potential loss, its impact on SANIXfs business, etc. are immediately reported to the board of directors and the department in charge in SANIX whenever a risk of loss arises in a subsidiary and is found by SANIXfs Internal Auditing Office. |
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(6) |
In order to prevent improper transactions or financial accounting between SANIX and its subsidiary, SANIXfs Internal Auditing Office and the internal auditing office or similar department of each subsidiary shall keep close contract to exchange information.
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| 7. Matters relating to employees assigned to the position to assist corporate auditors in performing their duties (in a case where said assignment is requested by corporate auditors) |
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(1) |
The Internal Auditing Office shall be assigned the duties to assist corporate auditors, and if requested by corporate auditors, one or more employees shall be assigned to the Internal Auditing Office on a full time basis. |
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(2) |
Details of such assignment of employees shall be determined by the Manager of the Human Resources Department based on opinions of corporate auditors and opinions of the Internal Auditing Office and other relevant departments.
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| 8. Independence from directors of employees assisting corporate auditors |
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(1) |
Assignment and transfer of employees assisting corporate auditors shall require consent of the council of corporate auditors. |
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(2) |
Employee assigned to assist corporate auditors shall not engage in any other operations of SANIX. They shall perform duties under the directions and orders of corporate auditors. Their performance shall be evaluated based on opinions of corporate auditors.
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| 9. Systems for directors and employees to report to corporate auditors and other systems to report to corporate auditors |
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(1) |
Directors and employees shall, in accordance with rules determined by the council of corporate auditors, provide necessary report and information at the request of corporate auditors. |
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(2) |
Such reporting and information shall include:
- Activities in the departments involved in establishment of internal control systems of SANIX;
- Activities of corporate auditors and the internal auditing department in each SANIXfs subsidiary;
- Significant accounting policies and accounting standards of SANIX and their revisions;
- Details of announcements regarding actual or projected operating results, and changes in important disclosure documents;
- Operating status of the internal reporting system and details of actual reports;
- Provision of internal requests for managerial decision (gRingih document) and minutes of meetings requested by corporate auditors; and other reports and information
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| 10. Other systems to ensure effective and efficient auditing by corporate auditors |
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(1) |
Regular meetings shall be conducted between the council of corporate auditors and the president to exchange opinions. |
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(2) |
The management shall respect and give careful consideration to opinions and advices presented by corporate auditors. |
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(3) |
Corporate auditors shall have rights to attend the meetings of the board of directors and other important meetings of the company. |
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(4) |
Corporate auditors shall receive explanation on the details and results of financial auditing conducted by the independent auditing firm of SANIX, and shall keep close contact with the auditing firm to exchange information. |