Basic Policy on Compliance and Internal Control
TPAC / TPCC / MEPT / MEGT (The Companies) announced this Basic Policy as our code of conduct. The management and all employees shall be aware of and comply with this policy sincerely.
1. Basis
The Companies establish, maintain and operate compliance and internal control system appropriately. This is in order to achieve the objectives of effective and efficient operations, reliable financial reporting, compliance with laws and regulations, strengthen risk management and preservation of assets.
This policy shall be complied with the internal control policies of our holding companies.
2. Duties of Management and All Employees on Compliance
2.1 The management and all employees shall view “compliance” as broadly comprising conformity with laws, regulations, articles of association, and other existing internal rules, as well as the conduct of fair, transparent, and free business based on awareness of corporate responsibility to society.
2.2 The management shall examine and implement measures to enhance the Companies’ compliance systems, as well as provide instructions and oversight regarding compliance.
2.3 When a company or employee recognizes that compliance has been violated, he or she shall report to the management or a direct superior.
2.4 In order to detect internal compliance violations and take corrective measures promptly, the management has set up a communication system to respond to information from inside and outside companies which is related to internal control activities. The system shall be covered with information receiving, investigation, correction and reporting to Management.
Internal communication can be performed through “Suggestion Box” and “Compliance Consultation Desk”, while external communication shall be carried out by accessing to “Company Web Page”. Apart from this, other communications can be delivered through other channels e.g. by letter, telephone, open discussion, or acknowledgement.
Specific case of compliance violation will be reported to management and handled by Human Resources and Administration Department under anonymous principles. The employee or outsider who reports the violation shall be protected from any penalties due as a result of the report.
2.5 The violation of compliance shall be dealt with according to the Employees’ Handbook.
3. Duties of Management and All Employees on Internal Control
3.1 Management Environment
The management shall establish the appropriate internal control system and improve it in accordance with changes in the company environment.
The management and employees shall make an enhancement to achieve the objectives on internal control in accordance with the Company policy.
3.2 Evaluation and Correspondence of Risk
The management shall establish the risk management system in order to understand and appropriately manage the risk factors of the companies.
The managements and the employees shall try to use the system to manage the risks.
3.3 Management Activity
The Management shall maintain job descriptions and business procedures for providing duties and the responsibilities of each organization.
The management and the employees shall operate internal controls effectively in accordance with their own job roles.
3.4 Information and Transmission
The management shall establish a system which secures the company information in the process of operating business, and it is communicated and shared appropriately and transparently.
The information on internal control shall be handled in accordance with the “Communication in Internal Control System Procedure”.
3.5 Monitoring
The management shall establish the monitoring system to ensure that the system is properly implement and the effectiveness of the internal control can be evaluated.
Currently, the Companies accept independent audits on the internal control by the parent or related company. The management and employees shall cooperate with the activity.
The management shall review the independent audit report in order to improve or correct the internal control of the Companies. The management accepts key performance indicators (KPI) as monitoring systems to ensure that company objectives are achieved. KPI performance will be reported regularly to the management in the “Monthly Performance” meeting and will be reviewed in the “Risk Management Committee Meeting/ Internal Control Management Review Meeting” on a regular basis. The deviated in performance from KPI targets shall be improved continuously.
3.6 Management of Information Technology (IT)
The management shall utilize IT system as efficient tool policy, to implement and maintain
internal controls effectively.
3.7 Report
The President shall report the Companies’ internal control activities to the Board of Directors’
meeting periodically
4. Review
This policy shall be reviewed periodically.
Mr. Kazuya Yonemura
TPAC President
Mr. Tatsuhide Hosomi
TPCC President
Mr. Shuichi Tamura
MEPT President
Mr. Mikihiro Niuchi
MEGT President
