Basic Policy for the Internal Control System
1. System to ensure compliance of the execution of duties by directors and employees of Mitsuba and its group companies with laws, regulations, and their articles of incorporation.
(1) At Mitsuba, the Board of Directors makes decisions on important management issues based on the laws, regulations, Mitsuba’s articles of incorporation and “Mitsuba Management Policy”.
(2) We have established the “Group Executive Committee” with our CEO as the chairperson, in order to oversee CSR and risk management activities carried out at Mitsuba Group companies.
(3) We have established the “Compliance Risk Management Committee” which monitors our compliance with the laws and regulations as well as social norms and offers improvements. Specifically regarding the Anti-Monopoly Act, we have established the “Committee for Risk Management and Recurrence Prevention under Competition Laws” to enhance the compliance system of Mitsuba Group and to prevent recurrence of the violation.
(4) We strive to familiarize ourselves with our code of conduct “How We Should Act” in order to enhance the awareness of compliance across the Mitsuba Group in order for Mitsuba to become a trusted company that meets the expectations of society.
(5) At Mitsuba, the Internal Auditing Department conducts internal audits for business operations at each group company and provides instructions for improvement as necessary.
(6) We have established the permanent “Mitsuba Comprehensive Consultation Desk” as a part of whistle-blowing system of Mitsuba Group.
2. System to store and manage information related to the execution of duties by directors of Mitsuba
According to our company’s regulations including “Rules for Document Management”, we properly store and manage important information related to management decision making such as minutes of board meetings.
3. System to facilitate the risk management of losses of Mitsuba and its group companies including the establishment of internal rules
(1) We establish internal regulations and implement procedures so that the above-mentioned Group Executive Committee is ready to manage the risk for potential losses for our group. In addition, it will be ensured that every employee understands what they should do in such situation.
(2) We have established the “Production Sales Committee “, which handles risks in various stages from production to sales. From the perspective of product quality assurance, stable supply and disaster prevention, the council implements required actions such as identifying potential risks, prescribing measures and/or audits, prepares BCP (Business Continuity Plan) and establishes an appropriate control system for our entire group.
4. System to ensure the efficient execution of duties by the directors of Mitsuba and its group companies
(1) We have introduced an operating officer system, in which the business operations are delegated to operating officers by the Board of Directors. The Board of Directors receives reports from the operating officers for the execution of the delegated businesses as necessary.
(2) We have been holding the “Management Conference” and the “Managing Directors Meeting” to discuss and make decisions concerning important business challenges to expedite the execution of business.
(3) Mitsuba and its group companies create midterm (3-year) and annual business plans. Each division or group company designs specific measures required to achieve their own goals and execute them.
(4) We manage the Group Business Policies based on the “Rules for Policy Management”. Through regular management reviews, we support appropriate and timely execution of business duties by the directors and executive officers of the group companies.
5. System to ensure appropriateness of business of the corporate group consisting of Mitsuba and its group companies
(1) Mitsuba Group is divided into three domains. The above-mentioned Group Executive Committee establishes Group Business Policies and distributes our management resources among these three domains to strengthen the group management system. The Group Executive Committee regularly receives business report from the core companies of these domains.
(2) According to our “Rules for Managing Group Companies”, we receive report from the group companies concerning important matters such as business situation and guides them as necessary.
6. Matters concerning employees who should assist the duty of the Audit and Supervisory Committee, matters concerning the independence of said employees from the directors (excluding those who are also members of the Audit and Supervisory Committee), and matters related to ensuring the effectiveness of the instructions provided to said employees
(1) We assign employees in the Internal Auditing Department to assist the duties of our Audit and Supervisory Committee.
(2) Personnel management of said employees who assist the duties of the Audit and Supervisory Committee and its organizational change require prior approval by the Audit and Supervisory Committee or its full-time member designated by the Audit and Supervisory Committee.
(3) The employees who are to assist the Audit and Supervisory Committee shall execute duties under the direction and supervision of the Audit and Supervisory Committee and not of the directors.
7. System to allow the Audit and Supervisory Committee to receive reports from the directors (excluding those who are also the members of the Audit and Supervisory Committee) and employees of Mitsuba and its group companies, or from the persons who have received reports from the said directors and employees, and system to ensure that those who have reported should not be treated unfairly because of their reporting
(1) Directors (excluding those who are also a member of the Audit and Supervisory Committee) and employees of Mitsuba and its group companies should report on the status of major business operations and other key matters to the Audit and Supervisory Committee properly as necessary. When they are inquired of business execution matters by the Audit and Supervisory Committee, they shall report promptly. In addition, if any of them finds a fact which may cause significant damage to Mitsuba Group such as violation of law, he/she shall report to the Audit and Supervisory Committee immediately.
(2) The Internal Auditing Department and related divisions shall regularly report to the Audit and Supervisory Committee on the status of consulting at “Mitsuba Comprehensive Consultation Desk.”
(3) We establish internal regulations which specifically state that any director or employee of Mitsuba or its group companies is allowed to report directly to the Audit and Supervisory Committee, and which prohibit disadvantageous treatment of those who have reported to the Audit and Supervisory Committee because of said reporting. Mitsuba is responsible for thoroughly informing the directors and employees of these rules.
8. Policies for handling of expenses or debts incurred by the execution of the Audit and Supervisory Committee’s duties
(1) We promptly handle requests from our Audit and Supervisory Committee for reimbursement of expenses for their duties as long as such requests are based on the laws and regulations.
(2) In addition to the preceding paragraph, we pay the expenses when the Audit and Supervisory Committee ask for advice from a third-party such as a lawyer.
9. Other systems to ensure the effective execution of auditing by the Audit and Supervisory Committee
(1) In order to ensure the effectiveness of auditing, the regular members of the Audit and Supervisory Committee shall attend the Board of Directors Meetings, Managing Directors Meetings, as well as other meetings during which important managerial decisions are made and business is executed, inspecting the meeting discussion materials beforehand.
(2) The Audit and Supervisory Committee regularly discusses with the Internal Auditing Department, the accounting auditors, and the representative directors, based on the auditing policies and plans established by the Audit and Supervisory Committee.
10. System to ensure appropriateness of statements on finance and accounting and other information
To ensure reliability and appropriateness in our financial reports in accordance with the Financial Instruments and Exchange Act, Mitsuba continually conducts evaluations to see if our systems are effectively and appropriately functioning based on the “Rules for Internal Control Monitoring for Financial Reports,” and if any problem is discovered, implements necessary corrective actions.
11. Basic system for the elimination of anti-social forces
We commit ourselves to eliminate any relationship with anti-social forces as mentioned in “How We Should Act” above. We do not have any relations with anti-social forces, which threaten social order and security, or any individual or company that is associated with such an organization.