Internal Control System & Risk Management Structure

Basic Policy on the Development of Internal Control Systems

In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, JSP Corporation has established the following basic policy for the development of internal control systems. We will review this basic policy as needed and strive to maintain more appropriate internal control systems.

  • 1. System to ensure that the execution of duties by directors and employees of the Company and by directors and employees of the Company's subsidiaries complies with laws and regulations and the Articles of Incorporation
  • (1)The Company shall establish the "JSP Group Corporate Action Guidelines" and the "JSP Group Code of Conduct" common to the Company and its subsidiaries (hereinafter referred to as the "Group Companies" and together with the Company, the "JSP Group"), and shall ensure compliance with laws and regulations and social ethics as a prerequisite for its corporate activities and shall thoroughly adapt to social demands.
  • (2)The Company shall establish a Risk and Compliance Committee to oversee compliance across the JSP Group, which shall play a central role in providing education and training to the officers and employees of the JSP Group.
  • (3)Audit & Supervisory Board members and the Internal Audit Department shall work together to audit the status of compliance of the JSP Group.
  • (4)For any legally questionable conduct, the Company shall establish a whistleblower consultation service as a means for the JSP Group executives and employees to directly provide information, investigate the details, and consider and implement measures to prevent recurrence.
  • 2.System for storage and management of information related to the execution of duties by the Company's directors
  • (1)In accordance with the Document Management Regulations, information related to the execution of duties by directors shall be recorded and stored in documents or electromagnetic media (hereinafter referred to as "documents, etc.").
  • (2)Directors and Audit & Supervisory Board members shall have access to these documents, etc. at all times in accordance with the Document Management Regulations.
  • (3)Matters required to be disclosed by law or stock exchange regulations shall be promptly disclosed in accordance with the Information Disclosure Regulations.
  • 3.Regulations and other systems for managing the risk of loss of the JSP Group
  • (1)The Risk and Compliance Committee shall be responsible for the overall management of the JSP Group's risks and shall identify and analyze risks.
  • (2)The Risk and Compliance Committee shall take the lead in establishing various rules and regulations for risk management and strengthening the JSP Group's risk management system.
  • (3)In the event of a disaster or other unforeseen event, the department in charge of crisis management shall respond in accordance with the rules and manuals stipulating emergency responses.
  • 4.System to ensure the efficient execution of duties by the Company's directors and directors of the Group Companies
  • (1)The Board of Directors of the Company shall meet once a month in principle to make decisions on basic management policies, matters required by laws and regulations, and other important management matters. The Company shall also hold a Management Committee consisting of representative directors and executive officers at the senior executive officer level or above to discuss important management matters in advance.
  • (2)The Company has adopted an executive officer system, a division system for business divisions, and a corporate division system for corporate sectors as its business execution system and is working to improve the efficiency of business execution by delegating execution authority and performance responsibility.
  • (3)The Company shall decide important individual management issues related to business execution at the Executive Officers Meeting, which in principle is held twice a month.
  • (4)The Company shall formulate management plans on a consolidated basis and provide management control and guidance to the Group Companies in order to realize such plans.
  • (5)The Group Companies shall, in principle, belong to their respective business divisions or corporate divisions in terms of organization and their business execution shall be under the direct control of the business divisions or corporate divisions to which they belong.
  • 5.System for reporting to the Company on matters related to the execution of duties by Directors and others of the Company's subsidiaries and other systems to ensure the appropriateness of operations of the corporate group consisting of the Company and its subsidiaries.
  • (1)The Internal Audit Department of the Company shall periodically audit the operations of the Group Companies to ensure the appropriateness of their operations.
  • (2)The Company shall require the Group Companies to obtain prior approval from or report to the Company on important management matters.
  • 6.Matters concerning employees to assist the Company's Audit & Supervisory Board members in the performance of their duties
  • (1)Audit & Supervisory Board members may request the appointment of employees to assist them in their audit duties as necessary.
  • (2)Employees who receive instructions necessary for audit duties from Audit & Supervisory Board members shall not be subject to the direction and orders of directors, with respect to such instructions. The transfer, evaluation and disciplinary action, of such employees shall be discussed with the Audit & Supervisory Board.
  • 7.System for reporting to the Company's Audit & Supervisory Board members
  • (1)Directors and employees shall report to the Audit & Supervisory Board, in accordance with the Regulations of the Audit & Supervisory Board, matters that have a material impact on the JSP Group as well as the status of internal audits conducted by the JSP Group, in addition to legally required matters.
  • (2)Audit & Supervisory Board members shall attend meetings of the Board of Directors and other important meetings of the Company and each Group Company to collect information on important management matters of the JSP Group.
  • (3)The Risk and Compliance Committee shall report to the Audit & Supervisory Board members the status and content of reports received from the officers and employees of the JSP Group through the Whistleblowing and Consultation Desk. The method of reporting (reporter, recipient, and timing of reporting) shall be determined through consultation between the directors and the Audit & Supervisory Board members.
  • (4)Any disadvantageous treatment of a person who reports to the Audit & Supervisory Board members by reason of such report shall be prohibited and all officers and employees of the JSP Group shall be informed of such prohibition.
  • 8.Other systems to ensure that the audits of the Audit & Supervisory Board members are conducted effectively
  • (1)The Audit & Supervisory Board shall provide regular opportunities for individual hearings with the persons responsible for each business and other relevant personnel.
  • (2)The Audit & Supervisory Board shall hold regular meetings to exchange opinions with representative directors and audit firms, respectively.
  • (3)The Audit & Supervisory Board shall set aside a certain amount of budget every year to pay expenses incurred in the performance of their duties.
  • 9.System to ensure reliability of financial reporting
  • The JSP Group shall establish a system to ensure the reliability of financial reporting, continuously evaluate the system and immediately correct or improve any deficiencies.
  • 10.System for eliminating antisocial forces
  • As a member of society, the JSP Group shall have no relationship with antisocial forces or groups that threaten the order and safety of civil society and shall take a firm stand against them.
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