① Composition of corporate organization
Our Company is a corporation with four auditors, two of which are external auditors who oversee the execution of the duties of directors from their independent perspectives, and at the same time, the full-time auditors monitor how well the directors are executing their duties on a daily basis.
The Board of Directors holds its monthly regular Board of Directors meeting, and in addition to that, it holds meetings as necessary to decide such matters that are set forth in the laws and ordinances and other important matters related to management. It also supervises the execution of the duties of the representative directors.
In addition, our Company has built up a system of holding managing directors meetings, the members of which consist of all the directors with responsible posts (managing directors or above), in principle twice a month to mutually confirm the basic polices and important issues of management, and important issues of various business fields and functions.
② Status of the internal control system
（Basic thoughts）
To secure the correct and ethical execution of duties such as compatibility with the laws and ordinances relating to the execution of duties and the articles of incorporation, mutual supervision functions have been granted to the departments in charge of executing the operations, and also self-purifying functions have been strengthened by the development of control activities through the holding of formal meetings. In addition, we will construct the most effective system from the viewpoint of efficiently achieving the Company's strategic and business objectives, etc. and expanding corporate value.
（Current status）
At the departments in charge of executing operations, the roles and responsibilities of these departments have been clarified in accordance with the division of operations policy and the standard for corporate approval, etc. As a result, operations have been effectively and efficiently executed. In addition, the departments that have internal audit functions in connection with legal compliance, accounting, safety and health, environment, quality assurance, etc. have strengthened their systems to audit the legal correctness of the operations of the executing departments.
Status of system compliance
We have already drawn up the Corporate Ethics Regulation[s] and the Aichi Steel Corporate Code of Conduct and thoroughly informed all the parties concerned, and built up our legal compliance system centered on the CSR Council and supervisors in charge of legal compliance to prevent any violations by educating and informing the employees, and to take appropriate measures if any violation occurs.
Furthermore, we have established a "Hot Line" system with General Affairs Department, auditors and external attorneys acting as the contact points, and have already prevented violations from occurring and activated internal self-purifying functions.
Status of the risk management system
We have drawn up the risk management regulation[s] and other regulations to address various risk patterns and thoroughly informed all the parties concerned. We have also constructed a risk management system centered on the CSR Council so that in the event any serious risk threatens our Company or is predicted to occur, we can take quick and appropriate measures to maintain our corporate activities.
Status of our information management system
We have drawn up regulations for the Board of Directors and document management regulations and thoroughly informed all the parties concerned, and built up our information storage and management system so that all the important documents including the minutes and approval forms will be appropriately stored and managed.
Status of the system to secure appropriate operations of the corporate group companies
Our Company receives reports on important management matters from subsidiaries on a timely basis in accordance with the Affiliated Company Management Regulation. In addition, we regularly hold regular meeting for discussions with the presidents of such subsidiary companies to thoroughly inform them about the policies of the group, and at the same time, we provide necessary advice and assistance to secure appropriate operations, and also dispatch directors or auditors to relevant subsidiaries to monitor and check the execution of the operations of the subsidiaries.
③ Status of internal audits and auditing by auditors
To secure the correct and ethical execution of duties such as compatibility with the laws and ordinances relating to the execution of duties and the articles of incorporation, mutual supervision functions have been granted to the departments in charge of executing the operations. The system has also been improved so that the departments that have internal auditing functions in connection with legal compliance, accounting, safety and health, environment, quality assurance, etc can audit the correctness of operations of the executing departments on a timely basis.
In addition, we have established the Audit Office to strengthen the internal auditing functions, and the auditors receive reports on the results of internal auditing from the Audit Office.
The Board of Auditors of our Company consists of two full-time auditors and two external auditors. The full-time auditors routinely monitor the status of the execution of the duties by the directors. They audit not only the legality and correctness of such duties but also receive reports from the departments with internal auditing functions as necessary to ascertain the effectiveness of the internal control system. The external auditors attend the Board of Directors meetings and receive the reports on the status of auditing from the full-time auditors, and from an independent position, they audit the execution of the duties of the directors. In addition, one of the two external auditors serves concurrently as director of Toyota Motor Corporation, our other affiliated company and one of our major customers. Other than that, there [is no conflict of interest][are no other interests].
④ Status of financial audit
We appointed Price Water House Coopers Arata as our accounting auditor and we have improved the environment to implement auditing from a fair position by providing correct management information, etc. The certified public accountants who carry out the accounting audit operations are Fusahiro Yamamoto and Morio Ichimasu. Their respective terms are two years and one year. Six certified public accountants, six assistant certified accountants and one other person are engaged in accounting auditing operations. The auditors receive the reports on their auditing plan, audit execution status and results of auditing, and at the same time, exchange and endeavor to share relevant information from time to time.
⑤ IR activities and CSR activities
Our Company has enhanced the disclosure system and the internal management system with respect to timely disclosure. At the same time, our Company holds accounting results and interim closing briefing sessions and company information sessions for individual investors, as a part of the IR activities, and we attempt to further enhance positive and timely information disclosure to our investors so that society's trust in our Company will be further strengthened.
In addition, our Company positively promotes CSR activities based on the Mid-term CSR Plan including environmental preservation activities, social contribution activities, compliance activities and risk management activities.
Environmental preservation activities
We have already obtained ISO14001 certification, and in accordance with our “2010 Environmental Action Plan,” we not only comply with the environmental emission standards but also carry out global warming prevention activities, green procurement and also produce and sell our ecologically friendly products such as “TetsuRiki Agri.”
Social contribution activities
Our Company opens its corporate facilities to the local community and carries out livable community building activities, company-wide volunteer activities and donation collection activities in collaboration with the local community.
Compliance activities
Our Company holds periodic compliance liaison meetings, internal education on compliance and keeps all the parties informed of compliance-related information.
Risk management activities
Our Company takes measures to deal with the predicted big earthquake, and also takes measures for information security and personal information protection.
