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Internal Control System

Basic Policy and Status of Internal Control System

The Company's Board of Directors has resolved the following basic policy regarding the establishment of a system to ensure the appropriateness of business operations.

a. A system to ensure that the execution of duties by directors and employees complies with laws and regulations and the Articles of Incorporation

With the "Officers and Employees Compliance Code" as our basic guideline, our company strives to raise compliance awareness through compliance training for directors and employees, and to ensure that duties are executed in accordance with compliance-related regulations. In addition, based on the "Officers and Employees Compliance Code," we refuse any involvement with anti-social forces, and exclude organized crime groups from various basic contracts in order to take a resolute stance and take appropriate measures against them. We are working to improve our internal regulations, including the inclusion of clauses. The Company conducts regular monitoring based on the Internal Audit Regulations and other internal regulations to ensure compliance with laws and the Articles of Incorporation regarding the execution of duties by directors and employees. In addition, the Company is strengthening its governance by increasing the ratio of outside directors, and deliberating medium- to long-term management issues, supervision of management execution, ensuring compliance, and corporate governance issues.

b. System for storing and managing information related to the execution of duties by directors

Our company manages the minutes of the general meeting of shareholders, the minutes of the Board of Directors, the minutes of the Audit & Supervisory Board, business reports, financial statements, etc., by the responsible department based on laws and regulations, the Articles of Incorporation, and the "Document Storage Management Regulations." . In addition, documents related to the execution of business by directors are stored and managed by their respective departments based on laws and regulations and the "Document Storage Management Regulations," and directors must ensure that employees are fully aware of this. We are trying to

c. Regulations and other systems for managing the risk of loss

Our company understands the external and internal risks that threaten the sustainable development of the company and the safety of its officers and employees, and has taken the following measures to respond to them.

  • We have established "Crisis Management Regulations" and "Basic Crisis Management Guidelines" as rules for appropriately recognizing and managing risks, appointed a person in charge of management, and determined the department in charge of each risk according to the type of risk. We have established a company risk management system.
  • We have established a Crisis Management Committee regarding risk management, and we continue to collect information, analyze, and consider preventive measures regarding risks.
  • If a serious risk materializes, we will establish an emergency response headquarters and take appropriate measures to minimize damage.

In addition, regarding crisis management such as disasters, we are working to ensure the safety of our executives and employees by introducing a safety confirmation system. Furthermore, in order to lead information security activities, we have established an information security countermeasures meeting and conduct audits and training on information security systems based on information-related regulations.

d. System to ensure that directors' duties are executed efficiently

The Company clarifies the duties and operations of the Board of Directors in its "Board of Directors Regulations," and specifies the matters to be resolved and reported. In addition, through the "Authority Regulations," we aim to optimize administrative authority and decision-making and ensure an efficient operating system. In addition, in order to respond quickly to changes in the business environment and to clarify the management responsibilities of directors, the term of office for directors is one year. In addition, we have introduced an executive officer system to clarify management responsibilities and improve the efficiency of decision-making and business execution.

e. System to ensure the appropriateness of operations within our group

Our company has established the "SBT Group Charter" as a code of conduct common to our group. In addition, in order to ensure smooth business operations while respecting the autonomy of group companies, we have established the "SBT Group Company Management Regulations" and established a supervising department to ensure the unity and efficiency of group management. We have a system in place.

  • The Company dispatches officers to its major subsidiaries and monitors the business and financial status of the subsidiaries through the subsidiary's board of directors. In addition, the Company's Board of Directors meets every month to report on business details and deliberate on important matters.
  • We have established the "SBT Group Compliance Regulations" to promote compliance throughout the group, and have expanded the scope of our "free access line" (hotline) to include group companies in an effort to ensure the effectiveness of compliance within our group. 
  • In order to improve and strengthen risk management for the entire Group, we have established the "SBT Group Risk Management Regulations," and we also conduct business audits of subsidiaries as necessary to monitor risks.

f. Systems related to employees who assist the duties of corporate auditors, matters related to the independence of such employees from directors, and matters related to ensuring the effectiveness of instructions to such employees.

Currently, the Company does not have dedicated employees to assist the duties of the Audit & Supervisory Board Members, but upon request from the Audit & Supervisory Board Members, employees from each division, including the Internal Audit Office will assist you. Employees who assist the Audit & Supervisory Board Members in their duties shall give priority to the instructions given by the Audit & Supervisory Board Members, and shall not receive instructions from Directors, etc. with respect to such instructions.

g. A system for the Company and its subsidiary directors and employees to report to the Audit & Supervisory Board Members, and other systems for reporting to the Audit & Supervisory Board Members.

Directors and employees of the Company and its subsidiaries must immediately report any facts that violate the law or the Articles of Incorporation in the execution of business, or that may cause significant damage to the Company. is working to ensure that everyone is aware of the above reporting obligations. Furthermore, if directors and employees are requested by corporate auditors to report on matters related to business execution, they are required to promptly report. Furthermore, corporate auditors receive reports on audit results from the Internal Audit Office, and if they recognize the need for additional audits or improvement measures, they can issue instructions. The Company and its subsidiaries prohibit those who have made these reports to the Audit & Supervisory Board Members from being treated unfavorably on the basis of having made such reports, and the Company and its subsidiaries have made this fact widely known.

h. Matters related to procedures for advance payment or reimbursement of expenses incurred in the execution of duties by corporate auditors, and policies regarding the treatment of expenses or debts incurred in the execution of other duties.

When a corporate auditor requests advance payment of expenses necessary for the execution of his or her duties, the Company will promptly process the expenses or debts.

i. Other systems to ensure that audits by corporate auditors are conducted effectively

Audit & Supervisory Board Members receive reports on audit results from the Internal Audit Office and Accounting Auditor, and work together in conducting audits. In addition, the corporate auditors and the Internal Audit Office hold regular liaison meetings to maintain close communication regarding information sharing, reporting on the status of their respective audits, and the implementation of other joint audits. The Board of Corporate Auditors supervises the accounting auditor and receives independent reports on the audit results of the accounting auditor in order to ensure the independence of the accounting auditor from the directors. Additionally, corporate auditors attend meetings of the Board of Directors, express their opinions, and make recommendations and reports as part of the Board of Corporate Auditors.

j. System to ensure the appropriateness and reliability of financial reporting

In order to ensure the appropriateness and reliability of financial reporting, the Company has formulated the "Basic Policy on Internal Control Related to Financial Reporting" and promotes internal control, including establishing an internal control committee and appointing a supervising officer. We have set up a system for this purpose. Furthermore, in order to appropriately comply with related laws and regulations such as the Financial Instruments and Exchange Act, we have established an information processing system related to financial reporting and are working to improve the reliability of financial reporting.