This document has been translated from the Japanese original for the convenience of non-Japanese shareholders. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail.
- "System Necessary to Ensure the Properness of Operations" in the Business Report
- "Basic Policy, etc. Regarding the Persons Who Control Decisions on Financial and Management Policies" in the Business Report
- "Consolidated Statements of Changes in Equity" in the Consolidated Financial Statements
- "Notes to the Consolidated Financial Statements" in the Consolidated Financial Statements
- "Non-Consolidated Statements of Changes in Equity" in the Non-Consolidated Financial Statements
- "Notes to the Non-Consolidated Financial Statements" in the Non-Consolidated Financial Statements
This information is not stated in the paper-based documents to be delivered to shareholders in accordance with the provisions of laws and regulations and Article 16, paragraph 2 of the Articles of Incorporation of the Company.
The Company has decided to establish a system to ensure that the execution of duties by the Company's Directors complies with laws and regulations and the Articles of Incorporation, as well as other systems necessary to ensure the properness of the Company's operations and those of the corporate group consisting of the Company and its subsidiaries. The outline of the system and its operation during the fiscal year under review are as follows. The system shall be reviewed by the Board of Directors whenever necessary.
Outline of the system necessary to ensure the properness of operations
System to ensure that the execution of duties by Directors and employees of the Company complies with laws and regulations and the Articles of Incorporation
In the Corporate Code of Conduct, which acts as the foundation for how officers and employees behave, we shall clearly state our belief that compliance with laws and regulations and corporate ethics is the foundation of management, and formulate the Legal and Ethical Guidelines to serve as concrete indicators and take measures to ensure awareness.
In addition, we shall establish the Legal & Ethical Affairs Committee to promote corporate behavior in accordance with laws and regulations and corporate ethics, place legal and ethical standards managers and persons in charge in each department, and carry out internal training programs systematically. The Company shall also establish a legal and ethical consultation system to handle reports and queries from employees in order to quickly detect and correct infractions of laws and regulations, corporate ethics, and internal regulations.
The Company shall not have any relationship with antisocial forces, and shall take a firm stand against any unreasonable demands, which is clearly stated in the Corporate Code of Conduct and Legal and Ethical Guidelines.
Regarding internal control over financial reporting based on the Financial Instruments and Exchange Law, the Company shall fully recognize the importance of proper financial reporting in accordance with laws and regulations, and shall properly establish and operate the necessary systems, etc.
System for storing and managing information on the execution of duties by the Company's Directors
In addition to establishing internal regulations for the storage and management of information, such as the Document Handling Regulations, Document Management Regulations, and Information Security Regulations, each department shall appoint a person in charge of document management and a person in charge of information security to properly store and manage information in accordance with these regulations, and shall conduct inspections of storage and management conditions, etc.
Regulations and other systems for managing risk of losses of the Company
In order to properly manage business and other risks, the Company shall formulate the Risk Management Regulations as comprehensive regulations and establish the Risk Management Committee.
The Risk Management Committee shall identify important risks through the identification and evaluation of various risks, and report the status of such risks to the Board of Directors on a regular basis.
In addition, important matters including risks shall be discussed and reported, as necessary, at meetings of the Board of Directors and other meeting bodies such as the Management Committee, Board of Managing Directors and Group Strategy Committee.
Furthermore, for the management of risks deemed particularly important, such as matters related to risk management for accidents, disasters, etc., and compliance with laws and regulations and corporate ethics, in addition to the overall risk management system, the Company shall establish individual management systems by appointing a dedicated person in charge and formulating internal regulations and manuals.
System to ensure the efficient execution of duties by Directors of the Company
Upon resolution of the Board of Directors, the Company shall establish a proper business organization and segregation of duties, and clearly define the responsibilities of Executive Directors and Officers. Under the supervision of the President, who is in charge of business execution, Executive Directors and Officers shall be delegated decision-making authority based on certain standards as necessary, while taking into consideration the perspective of mutual checks and balances.
In addition, in order to ensure information sharing and efficient decision-making among Executive Directors, Officers and major subsidiaries' presidents, the Company shall establish its own meeting bodies, such as the Management Committee, Board of Managing Directors and Group Strategy Committee, and form project teams for each individual management issue.
For daily business processing, internal regulations, manuals, etc., which should serve as standards from the viewpoint of standardization, shall be prepared. Furthermore, the department in charge of internal audits shall conduct internal audits from the perspective of contributing to the promotion of business improvement, enhancement of management efficiency, etc.
System to ensure the properness of operations in the corporate group
System for reporting to the Company on matters pertaining to the execution of duties by Directors of subsidiaries
The Company shall establish the Kintetsu Group Management Regulations to be complied with by each Group company, and in accordance with predetermined standards based on this, collect information from each Group company in a timely and proper manner to accurately grasp the actual status of operations and financial position. In addition, in order to review, evaluate and correct the situation, a system shall be established to conduct audits by the Company's Internal Audit Department and other departments.
Regulations and other systems for managing risk of losses of subsidiaries
In order to properly manage business and other risks within the Company group (the "Group"), the Risk Management Committee shall identify important risks across the Group through the identification and evaluation of various risks, and report the status of such risks to the Board of Directors on a regular basis. In addition, important matters including risks at each Group company shall be discussed and reported at meetings of the Board of Directors and other meeting bodies as necessary.
System to ensure the efficient execution of duties by Directors of subsidiaries
The Company shall stipulate whether or not the Board of Directors of the Company is required to approve the execution of business by each Group company, and establish a system that enables each company to execute its business promptly, except for important matters. From the perspective of enhancing the corporate value of the entire Group, the Company shall coordinate and adjust operations between Group companies as appropriate, and the departments in charge at the Company shall provide support and guidance as necessary for each company's legal and accounting-related operations.
System to ensure that the execution of duties by Directors and employees of subsidiaries complies with laws and regulations and the Articles of Incorporation
In addition to the legal and accounting-related operations of each Group company, the departments in charge at the Company shall provide support and guidance as necessary for education and training conducted by each company to ensure compliance with laws and regulations and corporate ethics. In addition, a system shall be established to handle reports and queries from officers and employees of each Group company regarding infractions of laws, regulations, and corporate ethics, etc.
Furthermore, the Internal Audit Department of the Company shall conduct audits of each Group company from time to time in cooperation with the internal audit departments of each company to confirm the status of compliance with laws and regulations and to exchange information with each company.
In addition, in order to ensure the fairness of transactions between the Company and its subsidiaries, the Company shall utilize specially established review procedures for transactions that can be deemed uncommon.
System for audits by Audit & Supervisory Board Members
Matters concerning employees who assist the duties of Audit & Supervisory Board Members of the Company
The Company shall establish the Office of Audit & Supervisory Board Members to deal with tasks related to the Audit & Supervisory Board and its members' audits. The Office shall have a general manager, a manager and other employees as dedicated personnel, as necessary, to assist the duties of the Company's Audit & Supervisory Board Members.
Matters concerning the independence of such employees from the Company's Directors
Employees belonging to the Office of Audit & Supervisory Board Members shall be under the direction of the Audit & Supervisory Board Members, outside the control of the Directors of the Company, and their transfer and evaluation shall be subject to the consent of the full-time Audit & Supervisory Board Members.
Matters related to ensuring the effectiveness of instructions given by the Company's Audit & Supervisory Board Members to such employees
Employees belonging to the Office of Audit & Supervisory Board Members shall receive instructions directly from and report directly to the Company's Audit & Supervisory Board Members without the assistance of the Company's Directors, Officers, or employees under their direction.
System for reporting to Audit & Supervisory Board Members of the Company
System for reporting to the Company's Audit & Supervisory Board Members by the Company's Directors and employees
The Company's Directors, Officers and employees shall deliver to the Company's Audit & Supervisory Board Members documents related to the execution of operations and other important documents, and shall promptly report the details of business and other risks, and other important matters, in addition to statutory matters, whenever they become aware of the occurrence of such matters. In addition, the Company shall actively cooperate with the Audit & Supervisory Board Members when they request reports and investigations in the course of their duties. In addition, Executive Directors and Officers shall meet regularly with full-time Audit & Supervisory Board Members to report on their duties.
In addition, the Internal Audit Department of the Company shall regularly report the results of internal audits to the Audit & Supervisory Board Members. When the legal and ethical consultation system receives reports or queries on infractions of laws and regulations, corporate ethics, etc., the details of such reports or queries shall be reported to the Company's Audit & Supervisory Board Members as necessary.
System for reporting to the Company's Audit & Supervisory Board Members by Directors, Audit & Supervisory Board Members and employees of subsidiaries or those who receive reports from them
Directors, Audit & Supervisory Board Members and employees of subsidiaries shall, upon request from the Company's Audit & Supervisory Board Members, submit reports and conduct investigations regarding their business and actively cooperate with the Company's Audit & Supervisory Board Members, and shall report any important internal control matters in accordance with the Kintetsu Group Management Regulations. In addition, the Company's Directors, Officers and employees shall report to the Company's Audit & Supervisory Board Members as necessary on matters reported by subsidiaries.
System to ensure that persons who report to the Company's Audit & Supervisory Board Members are not subjected to any disadvantageous treatment
The Company shall take necessary measures such as clearly stipulating in the Regulations for Legal and Ethical Consultation System that no disadvantageous treatment shall be accorded to any person for reporting to the Company's Audit & Supervisory Board Members.
Matters concerning the policy for handling expenses and debts incurred for executing duties by the Audit & Supervisory Board Members of the Company
In the event that an Audit & Supervisory Board Member of the Company requests advance payment of expenses, reimbursement of expenses and interest paid, or reimbursement of liabilities incurred in connection with the execution of his/her duties, the Company shall promptly comply with such request, unless it is obvious that such payment is unnecessary for the execution of the Audit & Supervisory Board Member's duties.
Other systems to ensure effective audits by Audit & Supervisory Board Members of the Company
The Company's full-time Audit & Supervisory Board Members may attend and express their opinions at the Company's important meeting bodies such as the Management Committee, Board of Managing Directors and Group Strategy Committee, and the Audit & Supervisory Board may request the attendance of Directors, Officers, employees, Accounting Auditor and other related persons as necessary.
Outline of the operation of the system during the fiscal year under review
System to ensure that the execution of duties by Directors and employees of the Company complies with laws and regulations and the Articles of Incorporation
The Company conducted legal ethics education for employees and promoted awareness of the legal and ethical consultation helpdesk available both inside and outside the Company, and the department in charge investigated and dealt with any cases in which consultation was requested. In addition, the Company reported these efforts in general to the Legal & Ethical Affairs Committee, and reported the status of legal ethics consultation to the Board of Directors.
System for storing and managing information on the execution of duties by the Company's Directors
In addition to inspecting the status of document management, the Company implemented information security measures such as operating an unauthorized e-mail detection system, and conducted information security management audits of Group companies to strengthen measures against the risk of information leaks.
Regulations and other systems for managing risk of losses of the Company
The Company made efforts to properly manage business and other risks by deliberating and reporting important matters at meetings of the Board of Directors and other meeting bodies. In addition, the Risk Management Committee monitored the status of risk management of the Group, including the Company, reviewed important risks, and reported the status of risk management to the Board of Directors.
System to ensure the efficient execution of duties by Directors of the Company
In addition to determining the responsibilities of Executive Directors following the election of new officers, the Company held meetings of the Board of Managing Directors, the Group Strategy Committee and other meeting bodies, reviewed the committee structure, developed internal regulations and manuals, and conducted internal audits.
System to ensure the properness of operations in the corporate group
The Board of Directors deliberated on important matters concerning Group companies, and the Risk Management Committee monitored the status of risk management of each Group company. The Company also collected information from each Group company and provided support and conducted audits for each company.
System for audits by Audit & Supervisory Board Members
The Company submitted approval documents to the Audit & Supervisory Board Members, and the Audit Division reported the results of its internal audit. The Audit & Supervisory Board Members conducted interviews with officers, and attended meetings such as the Management Committee and Group Strategy Committee to grasp the status of the execution of duties by the Executive Directors and the business conditions.
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Kintetsu Group Holdings Co. Ltd. published this content on May 21, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 21, 2025 at 15:14 UTC.
