Company information

Company information

Systems to Secure the Properness of Business Activities and the Status of Implementation of the Systems

1. Systems to secure the properness of business activities

(1)
Systems to secure the execution by the Directors and employees of their duties to comply with laws or ordinances and the Articles of Incorporation, and the regulations concerning management of exposure to the risk of loss and other systems
The vision of the Company and its subsidiaries (the "Group") of becoming Japan's representative "Media Conglomerate" requires the Company of the conduct of appropriate group governance, quickness in decision-making and flexibility in execution of business to fulfill its public mission of its media business central to a certified broadcast holding company. For that purpose, as well as to ensure the effectiveness of compliance with laws or ordinances and the Articles of Incorporation and risk management, the Company shall build up required systems.
  1. Organization system
    The Company shall, pursuant to the "Regulations Concerning Compliance and Risk Management of the Group" (the "Group Compliance Regulations"), exercise general control over, and promote, the relevant operations of the Group. The Company shall also institute a "Committee for Compliance and Risk Management of the Group" (the "Group Compliance Committee") comprised of the Group's presidents/representative directors to respond to compliance issues and risks that may have a material effect on group management.
  2. Education and training
    The Company shall hold explanatory meetings related to compliance of the Company and its subsidiaries on a timely basis and convey related materials to inform the directors and employees of the Group of the importance of compliance and risk management and promote the understanding thereof.
  3. Credibility of financial reporting
    The Group shall exert efforts to build up a system to strengthen compliance and risk management while giving full consideration to individual operations carried on properly, and also establish an internal control system to ensure the credibility of financial reporting pursuant to the Financial Instruments and Exchange Act.
  4. Internal audits
    The Company shall, pursuant to the "Internal Audit Regulations", monitor the status of internal audits by, and internal control systems of, the Group on a regular basis to confirm that the whole operations of the Group are conducted properly and validly in terms of laws or ordinances, the Articles of Incorporation and the internal rules, as well as the management policy.
(2)
Systems concerning storage and management of information on the execution by the Directors of their duties
Pursuant to the information management manuals of the Company, information on the execution by the Directors of the Company of their duties shall be stored and managed properly and accurately in a manner facilitating searching according to the storage media and shall be kept available for inspection for specified periods.
(3)
Systems to secure efficient execution by the Directors of their duties
The Directors of the Company shall continue to carry out a study on more rational and prompt operations to secure more efficient management of the Group. The Company shall formulate management plans of the whole Group and monitor the implementation thereof by receiving reports on operating results from each Group company or otherwise.
(4)
Systems to secure the properness of business activities of the corporate group comprised of the Company and its subsidiaries
To secure the properness of business activities of the corporate group comprised of the Company and its subsidiaries, the Company shall, in respect of the Group's compliance and its risk management, as well as its business management, institute specialized departments and divisions respectively and promote the building up of the systems.
  1. To accurately grasp the situations of management of its subsidiaries and help the healthy development of their business activities, the Company shall take steps to receive reports from the subsidiaries on a regular and continuous basis, among others, to strengthen information sharing within the corporate group.
  2. The Company shall promote the building up of a system under which each subsidiary of the Company shall autonomously make workable compliance and risk management according to its type of operation and scale of the business and also establish a system under which for the purpose of responding to any risk that may have a material effect on group management, the Company shall accurately grasp the situation.
  3. To ensure the effective execution of business by its subsidiaries, the Company shall promote group-wide management pursuant to the "Regulations of Management of Associated Companies".
  4. The Company shall institute specialized departments and divisions to promote group compliance and through the "Group Compliance Regulations", promote the establishment of corporate ethics and the building up of a group compliance system and a risk management system. The Company shall also establish a whistleblower system available to the Directors and employees of the Company, as well as the directors, audit & supervisory board members, executive employees, executive officers and employees of its subsidiaries (the "directors and employees of the Group"), with the aim of further ensuring the effectiveness of group compliance.
(5)
Matters concerning the employees to assist the Audit & Supervisory Board Members to execute their duties when the Audit & Supervisory Board Members request the assignment thereof, and the matters concerning the independence of the employees to assist the Audit & Supervisory Board Members to execute their duties and the effectiveness of directions to such employees
The Audit & Supervisory Board Members of the Company shall appoint the Audit & Supervisory Board Members' staff pursuant to the "Regulations of the Audit & Supervisory Board". The Audit & Supervisory Board Members' staff shall conduct business concerning the convocation of meetings of the Audit & Supervisory Board, the preparation of minutes and the administration of the Audit & Supervisory Board and assist the Audit & Supervisory Board Members to execute their duties. Such business shall be assigned to the General Affairs Department of the Company as provided for in the segregation of duties. The Audit & Supervisory Board Members' staff shall, as employees of the Company, be subject to the office rules of the Company. However, in principle, the authorities to direct and give order to the Audit & Supervisory Board Members' staff shall belong to each Audit & Supervisory Board Member and no Director shall have such authorities. With regard to the merit-rating, personnel changes and disciplinary punishments of the Audit & Supervisory Board Members' staff, opinions of the Audit & Supervisory Board shall be sought.
(6)
System for reports by the directors and employees of the Group to the Audit & Supervisory Board Members or the Audit & Supervisory Board of the Company
The Company shall establish and implement the system for reports by the directors and employees of the Group to the Audit & Supervisory Board Members or the Audit & Supervisory Board of the Company as described below:
  1. The directors and employees of the Group shall report the following matters on a timely basis:
    1. A fact is found that may have a material effect on business or finance (including any fact concerning any Group company).
    2. A fact is found that the Directors and employees do a dishonest act or violate laws or ordinances, the Articles of Incorporation or the internal rules in executing their duties (including any fact concerning any Group company) or any act in contravention with generally-accepted ideas threatens to occur or occurs, and the fact or act is material.
    3. Any other urgent or emergent event is found.
  2. The directors and employees of the Group shall report the following matters of each of the relevant Group companies to the Audit & Supervisory Board Members or the Audit & Supervisory Board of the Company on a regular basis or whenever necessary:
    1. Monthly accounting data for each month;
    2. Internal audit reports and major monthly reports from each department;
    3. Important litigation;
    4. Summaries of activities of the departments involved in internal control;
    5. Important accounting policies and accounting standards and the changes thereof;
    6. Details of publication of operating results and forecasts thereof and the details of important disclosure documents;
    7. Reports on business;
    8. Summaries of activities of the audit & supervisory board members; and
    9. Other important matters.
  3. In the event that the directors and employees of the Group are requested by the Audit & Supervisory Board Members or the Audit & Supervisory Board of the Company to report the execution of their duties, they shall do so promptly.
  4. The Company shall provide for internal regulations to ensure that any directors and employees of the Group who have given a report falling under any of paragraphs (a), (b) and (c) above to the Audit & Supervisory Board Members or the Audit & Supervisory Board of the Company will not suffer unfavorable treatment because of giving such report.
  5. The Company shall bear expenses to be incurred on the performance by the Audit & Supervisory Board Members of their duties in general.

The Company's internal control framework is as follows.

2. Overview of the status of implementation of the systems to secure the properness of business activities

The overview of the status of implementation of the systems during the fiscal year under review are described below:

(1)
Execution by the Directors of their duties
During the fiscal year under review, the Board of Directors held 11 meetings to deliberate on and determine important matters including management policies and receive reports on the execution by the Directors of their duties. The outside Directors and Audit & Supervisory Board Members of the Company attended all meetings of the Board of Directors. With regard to the execution of business, the executive Directors, with the president and representative director (President & COO) who is the Chief Operating Officer acting as the central role, made decisions in an efficient and speedy manner.
(2)
Measures for group compliance
The Company convened two sessions of the "Group Compliance Committee" comprised of the presidents/representative directors of the Group companies to raise awareness of compliance and risk management within the whole Group. In addition, the Company held two sessions for officers responsible for compliance and relevant personnel in charge of compliance at each of the Group companies, respectively to share information on compliance and risks within the Group. Furthermore, the Company confers rewards to companies that have proactively engaged in activities for compliance for each fiscal year, in an effort to develop awareness of compliance within the entire Group.
(3)
Implementation of internal audits
In accordance with the "Internal Audit Regulations", the internal control division of the Company prepared an "Internal Audit Plan" and interviewed and audited each of the Group companies on site. The results of the audits were reported to the President of the Company and the summaries thereof were fed back to each of the Group companies.
(4)
Execution by the Audit & Supervisory Board Members of their duties
During the fiscal year under review, the Audit & Supervisory Board held eight meetings to deliberate on and determine the audit policy and audit plans. Each Audit & Supervisory Board Member implemented audits pursuant to the audit plans determined by the Audit & Supervisory Board and interviewed the Directors of the Company and the presidents/representative directors of the Group companies and received reports on the execution of their duties. In addition, the Audit & Supervisory Board exchanged opinions and information with the account auditors and the internal audit sections of the Company, as well as the full-time audit & supervisory board members of the Group companies, on a regular basis. Furthermore, to ensure that each Audit & Supervisory Board Member can execute his duties smoothly, the Audit & Supervisory Board Members' staff appointed pursuant to the "Regulations of the Audit & Supervisory Board" conduct business concerning the convocation of meetings of the Audit & Supervisory Board, the preparation of minutes and the administration of the Audit & Supervisory Board and assist the Audit & Supervisory Board Members to execute their duties.

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