Management Information

Basic Policy on Internal Control System

1. Management Philosophy

"With the commitment of all employees in creating what they can proudly present to the world (namely our organization with its products, and services), oRo's goal is to continue to deliver more happiness and joy to more people (coworkers, families, business partners, shareholders and society), and lead all our employees to self-fulfillment through our efforts to achieve this goal."

2. Internal system to ensure the performance of duty by directors and employees should comply with laws and the articles of corporation
  • According to the "Business Ethics", we shall cultivate the spirit among all the officers and employees to comply with the relevant laws, the articles of corporation, rules and social ethics, and make them understand the compliance with these laws and rules is precondition to our corporate activities.
  • In addition to our "management philosophy", we shall establish our "action guideline" not only for our directors and employees to comply with the relevant laws and the articles of corporation, but also to build up a corporate culture to operate business with a sense of ethics.
  • We shall establish "Internal Reporting Rules" in order to take proper actions for reports of failures to comply with the relevant laws or other Regulations, and manage the internal reporting system for the purpose of detecting early on and correct failure or possible failure to comply with the relevant laws and the article of corporation and other internal rules, based on the Internal Reporting Rules.
  • We shall propose the election of outside directors to improve and maintain the level of supervision of the Board of Directors.
  • The Board of Auditors shall audit the situation of performance of duty by each of directors, from its independent standpoint, including the status of organizing and operating the internal control system, in accordance with the "Audit Standard for Auditor" and the "Audit Plan".
  • The Internal Audit Office shall audit whether we appropriately perform the business processes in accordance with the relevant laws, the articles of corporation and other rules.
  • As initiative to ensure and strengthen sense of compliance, we shall provide workshops to study the basics of the compliance and the information management required for performance of duty for the directors and employees of our company for the purpose of continuous education and its diffusion.
3. System to save and administer the information regarding the performance of duty by directors
  • As for the information regarding the performance of duty by directors, we shall produce, save and administer these information in written form (including electronic form) in accordance with the relevant laws and the "Document Management Regulations". We shall verify the operation of this system or review the rules if necessary.
  • It shall be a system to save and administer the document mentioned above so that any one can immediately review the documents if it is necessary for the directors and the auditors to do so for the purpose of performing the duties.
4. Rules and other systems for management of risks of loss
  • In accordance with the "Risk Management Regulations" providing for the basic rules for risk management, we shall establish a risk management committee for comprehensive and systematic management of each risk.
  • Head of each department shall provide the risk-related information to the Board of Directors.
  • In case of unexpected incident or situation, we shall set up a task force under supervision of the CEO and take immediate and precise actions, jointly with the external specialized institutions, such as the office of corporate lawyer if necessary, in order to minimize possible damages.
5. System to ensure the efficient performance of duty by directors
  • We shall comply with the "Board of Directors Regulations" and hold the meeting once a month of the Board of Directors consisting of the directors including the external directors, and further hold the extraordinary meeting of the Board of Directors on timely basis if necessary.
  • We shall prepare for a plenty of information materials in advance regarding the items to be decided set force in the "Board of Directors Regulations" and make sure the items should be decided by the Board of Directors.
  • We shall identify the target of each department and its responsibility based on the business plan, and make efforts to achieve the initial business target through the analysis of difference between the budget and the actual figures.
  • In order to accelerate the decision making process, we shall establish and organize the internal rules such as "Internal Regulations", "Segregated Duties Regulations" and "Official Authority Regulations" to identify the role, authority and responsibility of each director.
  • As for the items out of duties and authority, we shall establish and operate a system of executing business to decide things based on the agreement by the CEO and the officer(s) in charge after the expert opinions from the main management department have been reflected.
6. System to ensure the proper business process among the corporate group consisting of our company and its subsidiaries
  • We shall establish the "oRo Group Policy", a system of philosophy such as the policy on human resources or the compliance policy in the oRo group (corporate group) to share with and infiltrate the management philosophy into the corporate group and ensure the proper business process.
  • Our subsidiaries shall report anything set forth in the "Affiliated Companies Management Regulations" requiring approval by and reporting to our company, and report the progress of the performance of duty on a regular basis in order to ensure the proper business process while we share the information both on management administration and risk management.
  • The director(s) in charge of subsidiary administration shall immediately inform the Board of Directors of our company of the nature of risk, the extent of the possible damage and the impact on our business if the director found out that there is a risk of damage to be suffered by any subsidiary.
  • The subsidiaries shall be subject to the regular internal audit to be conducted by the internal audit office of our company and report the result of the audit to the CEO of our company.
  • We shall dispatch the director(s) to the subsidiaries or the auditor(s) shall visit the subsidiaries to audit and supervise the performance of duties by the director(s) in charge of subsidiary administration through such directors or auditors.
7. The items regarding the employee in case the auditor requires to hire him/her to support the performance of his duty, the items regarding the independence of this employee from the director(s), and the items to ensure the effectiveness of the instructions
  • We shall hire an employee for the auditor to support the performance of his duty as auditor if the auditor needs to do so, and discuss its selection and appointment between the auditors.
  • In order to ensure the independence of the employee for the auditor from the directors, the employee for the auditor shall not subject to any instruction or order given by the directors, and it requires agreement by the auditor to appointment, transfer, evaluation and dismissal of the employee during this period.
  • The employee to support the performance of duty by the auditor shall comply with the instructions and the orders given by the auditor whenever he or she supports the auditor upon request from the auditor.
8. System for the director(s) and the employee(s) to report to the auditor, and System to report to other auditors
  • System for the director(s) and the employee(s) to report the auditor
    • a. The auditor has a right to attend the meetings of the Board of Directors, and all the internal meetings if necessary.
    • b. The director(s) and the employee(s) shall report the situations of the business operation as well as the internal control, and the Internal Audit Office shall report the results of the internal audit, upon request from the auditor.
    • c. The director(s) and the employee(s) shall immediately inform the auditor of the fact that there is a material breach of the relevant laws and the articles of corporation and wrongful acts, or the fact that there is an incident that is likely to significantly damage the business of our company whenever they came to know them.
  • System for the director(s), the auditor(s), the employee(s) and the employee(s) of our subsidiaries performing their duties or those who received a reward from them to report to the auditor of our company
    Upon request from the auditor of our company, they shall report the status of the performance of their duties, and immediately inform the auditor of our company of the fact that there is an incident that is likely to significantly damage the business of our company whenever they came to know it.
9. System to ensure that the person who reported the fact as described above would not be unfavorably treated just because that person reported it
We shall prohibit to unfavorably treat the director(s) and the employee(s) who reported to the auditor because they reported to the auditor and protect them from possible unfavorable treatment in accordance with the provisions regarding the protection of these reporters stipulated in the "Internal Reporting Rules".
10. Items regarding the policy on the settlement of expenses or debts arising out of the performance of the duty by the auditor
We shall set forth a billing and settlement system for the expenses arising out of the performance of the duty by the auditor, and when the auditor asks for the advance payment or redemption for it, we shall settle the payment or redeem it following the designated procedures unless we clearly decide these expenses are not necessary for the auditor to perform his/her duty.
11. System to ensure the audit of other auditors is effectively conducted
  • We shall call on a person who has a plenty of experiences or an expert in the corporate management area, or a qualified person such as a certified accountant as the external auditor to keep their independence from those who are performing their duties, such as the CEO or the directors of our company .
  • The auditor shall meet the CEO of our company on a regular basis to exchange the opinions and the information each other.
  • The auditor may be able to closely cooperate together with the Internal Audit Office, and ask them to conduct a research if necessary.
12. System to ensure the reliability of financial reporting
We shall establish and organize the accounting rules and set forth the "Basic Policy on the Improvement of the Internal Control System related to Financial Reports" in order to manage possible risks of dishonesty or mistake in financial reporting, organize, operate and evaluate the prevention and check-and-balance function, and correct them if there is any defect or fault.
13. System to get rid of antisocial forces
We shall take actions against the antisocial forces posing a threat to the public order or the healthy activities by companies in a resolute attitude across the company including the cooperation with the related entities, and never get involved in anything related to or associated with the antisocial forces or ban a relationship with them. We shall continue to organize and maintain the system to get rid of the antisocial forces while we cooperate with the police and the related entities as well as the expert institutions such as lawyer and so on.