TOTO LTD
To Whom It May Concern:
April 30, 2015
Listed Company Name | TOTO LTD. |
Representative | Madoka Kitamura President, Representative Director |
Code No. | 5332 (First Section of Tokyo/Nagoya Stock Exchanges, Fukuoka Stock Exchange) |
Contact Person | Masanori Akasaka, General Manager of Public & Investors Relations Dept. (TEL: +81-3-6836-2024) |
TOTO LTD. (the "Company") announces that it has adopted a resolution regarding the partial amendment to the Basic Policy for Development of Internal Control System at the Board Meeting held on April 30, 2015 in accordance with the amended Company Act which has come into force on May 1, 2015 as follows. (The amended parts have been underlined.)
1. System for ensuring that the execution of duties by directors complies with laws and regulations and with the Articles of Incorporation
(1) TOTO has established and complies with the TOTO Group Corporate Philosophy, Charter of TOTO Group Corporate Behavior, and TOTO Group Compliance Promotion Management Rules.
(2) TOTO has established Rules for the Directors and Board of Directors and Rules for Formal Approval, and makes decisions and executes operations that conform to laws and regulations of the counties in which the TOTO Group is located and its Articles of Incorporation.
(3) TOTO has appointed outside directors to strengthen operational oversight by its Board of Directors and to ensure transparency of its decision-making.
(4) TOTO has prepared and been updating the Directors' Compliance Guidelines to inform all of its directors
of laws and regulations requiring particular attention as its directors.
(5) TOTO has established the TOTO Group Public Communication Rules, in order to disclose not only information required by laws and regulations of the countries in which its businesses are located, but also information affecting stakeholders, fairly, in a timely and easy to understand manner.
TOTO appropriately and reliably stores and manages the minutes of Board of Directors' meetings and Management Committee, as well as Request for Formal Approval as information on its directors' performance of their duties under the Rules for Board of Directors, Management Committee and TOTO Group Rules for System for Formal Approval in writing or as electromagnetic records so that they can be easily retrieved. The information is available for inspection for 10 years.
3. Rules for the management of the risk of loss and other systems
(1) TOTO has established the TOTO Group Risk Management Rules to prevent crises from occurring, quickly resolve crises occurred and minimize damage, and prevent them from recurring.
(2) TOTO has set up a Risk Management Committee headed by its Representative Director to identify and manage risks relating to the execution of the businesses and operations of the TOTO Group. TOTO has also established a division to manage and control specific risks and has been running risk simulations to develop and maintain the risk management system.
This notice has been translated from the original notice in Japanese. In the event of any discrepancy, the original in Japanese shall prevail.
(1) By holding ordinary monthly Board of Director's meetings and extraordinary Board of Director's meetings as necessary, TOTO has been making decisions about important business execution through full deliberations.
(2) Issues of a certain level of importance in business execution that do not need to be determined by the Board of Directors have been determined through deliberation at Management Committee (held twice a month in principle) consisting of executive directors.
(3) TOTO has introduced an executive officer system to achieve faster decision-making in operations and clarify management responsibility.
(4) TOTO has established Policy Management Rules and ensures that business policies are adopted in all divisions to achieve its business goals.
(5) TOTO has set out Office Organization Rules, Rules for Description of Duties and Rules for Meetings and Committees to define authority and responsibilities in the office organization, operational structure, meetings and committees and to streamline operations and improve efficiency.
(1) TOTO has established the TOTO Group Corporate Philosophy, Charter of TOTO Group Corporate Behavior, and TOTO Group Compliance Promotion Management Rules so that all people working for the TOTO Group perform their duties based on laws and regulations of the countries in which they live and the Articles of Incorporation.
(2) TOTO has established the Compliance Committee headed by its Representative Director and internal Audit Office inhouse independent of operational divisions, and endeavors to develop and maintain the compliance system for the entire TOTO Group under the direction of the President.
(3) TOTO has been taking steps to raise the compliance awareness of all people working for the TOTO Group by the distribution of compliance manuals, training at each office and e-learning, etc.
(4) TOTO has established and operates the Whistle blowing System in Japan through its internal compliance division and an external third-party organization, which allows all employees of the TOTO Group and people associated with its business connections to report violations of laws and regulations or acts of violations of other compliance of the countries in which they are located, without receiving disadvantageous treatment.
(1) The above "(3) Rules for the management of the risk of loss and other systems" and "(5) System for ensuring that employees' execution of their duties complies with laws and regulations and the Articles of Incorporation" also apply to the TOTO Group companies.
(2) To ensure the reliability of financial reports, TOTO has developed, and operates and evaluates its internal control of financial reporting, thereby improving business operations.
(3) To ensure appropriate work practices in the TOTO Group, TOTO has established "Rules for the Operation of Group companies, affiliates, etc.", which require the Group companies to seek TOTO's Formal
Approval for decisions or the prior approval of TOTO, or to submit prior reports to TOTO when making decisions about important management issues for the Group companies.
(4) To ensure effective business execution in the TOTO Group, TOTO has appointed a division having the closest relations with the business of a Group company as a controlling division, and makes the general manager of the division check the status of business activities of such company, and give necessary instructions and assistance.
(5)TOTO dispatches its personnel to the Group companies as directors or corporate auditors of them, aiming to bolster the governance of the Group companies and monitor their management.
7. Matters relating to employees to assist the work of Audit & Supervisory Board Members and relating to independence of such employees from directors, and relating to the effectiveness of instructions by Audit & Supervisory Board Members to such employees
(1) TTOTO has established the Audit & Supervisory Board Office, to assist the work of Audit & Supervisor y Board Members, independent of its executive organization, which reports directly to the Audit & Supervisory Board Members. Fulltime assistants to Audit & Supervisory Board Members, including management-level members, are assigned to the Audit & Supervisory Board Office.
(2) Transfer, evaluation and other matters concerning the audit assistants are determined with the consent of the Audit & Supervisory Board Members.
This notice has been translated from the original notice in Japanese. In the event of any discrepancy, the original in Japanese shall prevail.
(1) Directors and divisions in charge regularly report the following matters to the Audit & Supervisory Board
Members
a. Business conditions, results and forecasts of the TOTO Group b. Occurrence of significant crises
c. Operational status of the Whistle Blowing System and matters reported.
(2) The following systems have been established so that the Audit & Supervisory Board Members are able to obtain information necessary for audits in a timely manner:
a. Inspection of important documents relating to business execution, including any request for Formal
Approval of TOTO and the Group companies.
b. Participation in important meetings including Management Committee and Sales and Production
Steering Meeting.
c. Hearing from the directors, auditors, etc. of the Group companies of their business status
d. Receiving information necessary for performing duties appropriately.
9. Matters relating to policies for procedures for prepayment or reimbursement of expensesincurred when Audit & Supervisory Board Members execute their duties
TOTO pays expenses or reimburse obligations necessary for the execution of the duties by the Audit & Supervisory Board Members upon request.
10.Other systems for ensuring effective auditing by the Audit & Supervisory Board Members
The following opportunities are ensured for the Audit & Supervisory Board Members to communicate with the directors, each division and each Group company for appropriate performance of their duties.
a. Providing with the audit policy, an audit plan and the audit result to the Board of Directors of TOTO
b. Exchanging opinions with directors of TOTO
c. Exchanging information with divisions that the Audit & Supervisory Board Members consider necessary for carrying out appropriate audits, inter alia, Internal Audit Office, Management Planning Department and Accounting & Finance Division
This notice has been translated from the original notice in Japanese. In the event of any discrepancy, the original in Japanese shall prevail.
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