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The Basic Policy for the formulation
of the Internal Control System

July 13, 2021 Board resolution

The Company has established the following Basic Policy regarding the establishment of the system (Internal Control System) defined in Article 399-13, Paragraph 1, Item 1, b, and c of the Companies Act.

1. System to Ensure that Execution of Duties by Directors and Employees Conform to the Laws, Regulations, and Articles of Incorporation

  • We establish the Ethical Standards of Corporate Behavior of the Satori Group to ensure the highest level of corporate ethics and compliance with the laws, regulations, articles of incorporation, company regulations, and social norms by directors and employees of the Company and our subsidiaries (hereinafter referred to as the entire Group), as well as to promote a full understanding of these standards.
  • We establish the Compliance Risk Committee chaired by the representative director to promote improvement and maintenance of the compliance system of the entire Group and provide awareness programs and training for directors and employees of the entire Group (hereinafter referred to as the Officers and Employees) as necessary.
  • The Audit Office under the direct control of the President ensures appropriate operations and reliable financial reporting by conducting operational audits of each company within the entire Group and assessing and reporting on their internal control over financial reporting.
  • Upon discovery of a serious violation of the law or any other important fact with regard to compliance within each of the entire Group, a director shall immediately report the violation or the fact to Audit and Supervisory Committee and representative directors, and also report it to the Consolidated Management Committee (consisting of President, executive officers, Audit and Supervisory Committee member, President of subsidiaries in Japan and any person(s) designated by the President) without delay.
  • Regarding a violation of the law or any other unethical conduct, a system shall be established and managed to allow any of the Officers and Employees to submit a direct report to the Department in charge of personnel affairs or an outside lawyer under the Internal Whistle-Blower Regulations.

2. System Regarding Storage and Management of Information on Execution of Duties by Directors

 

We store and manage information on the execution of duties by directors under the Document Control Regulations in an appropriate retrieval state. Also, we will handle the applicable information based on the Information Security Management Regulations.

3. Regulations on Management of Risk of Loss and Other System

  • Based on the Risk Management Regulations, a department in charge shall be determined for each risk category of the entire Group. Each department in charge shall take preventive measures for the applicable risks and shall continuously monitor the status thereof.
  • Various regulations for emergency measures, procedures to limit the spread of damage, restoration, and the prevention of a recurrence when a risk has occurred shall be promoted to avoid and minimize loss by handling the problem rapidly and appropriately.

4. System to Ensure Efficient Execution of  Duties by Directors

  • Important matters pertaining to management policies and strategies of the entire Group shall be subject to deliberation by the Consolidated Management Committee before deliberations by the Board of Directors.
  • Business shall be operated in accordance with the division of duties and the authorities stipulated in the Regulations Regarding Division of Duties and Regulations Regarding Official Authorities to make business more specialized, sophisticated and efficient. In addition, authorities may be delegated depending on the importance of the duties to ensure flexibility in decision-making and business execution.

5. System to Ensure Appropriateness of Services in Corporate Group Consisting of the Company and Subsidiaries

  • The Ethical Standards of Corporate Behavior of the Satori Group shall serve as the code of conduct for the entire Satori Group, and various regulations shall be developed and operated as required to secure the appropriateness and efficiency of services in the corporate group.
  • Regarding matters set forth in the Subsidiaries Management Regulations, subsidiaries shall be required to apply for prior approval from the Company and to report to the Company. In addition, in the event business management and management guidance of the Company to subsidiaries have violated any of the laws and regulations or have been suspected of violation of social norms, a subsidiary may report to Audit and Supervisory Committee of the Company and state its opinion.
  • As for the management of each subsidiary, we have in place a system that respects their autonomy and properly manages and supports them depending on their position and size pursuant to the Subsidiaries Management Regulations to ensure appropriate and efficient business execution.
  • In order to ensure the reliability of financial reports under the provisions of the Financial Instruments and Exchange Law, the Satori Group strives to secure a sound internal control environment and strengthen control activities at a company-wide level, thereby establishing and appropriately managing the internal control system for effective and valid evaluations.

6.Matters Regarding Employees when Audit and Supervisory Committee Requests them to assist Audit and Supervisory Committee’s duties, Matters Regarding such Employees’ Independence from Directors other than directors who are Audit and Supervisory Committee members, and Matters Regarding Ensuring the Effectiveness of Instructions Given to the Employees

Audit and Supervisory Committee may instruct any matter required by its audit to appointed employees and such employees may not receive any of the instructions of the directors other than directors who are Audit and Supervisory Committee members with respect to any of their activities on the audit. Personnel transfers and personnel evaluations of such employees shall be determined subject to the approval of Audit and Supervisory Committee to ensure the independence from the directors other than directors who are Audit and Supervisory Committee members. In addition, such employees shall not double in a post related to the execution of business.

7. System for Reporting to Audit and Supervisory Committee by Directors or Employees, and System to Ensure Effective Implementation of Audit by Audit and Supervisory Committee

  • Audit and Supervisory Committee members shall attend consolidated management committees and other important meetings as well as board meetings to understand the process of decision-making and the way of execution of operation. Also, auditors shall read important approval documents that are on execution of the operation and request explanations to Officers and Employees if necessary. The Officers and Employees asked of such explanations shall make an appropriate report promptly.
  • When one of the Officers and Employees finds a fact committed by some of the Officers and Employees which may cause serious damages to the entire Group such as violation of laws or regulations, we will immediately report the fact to Audit and Supervisory Committee.
  • We prohibit the person who reported the fact described above (1) from being treated unfairly and this policy has prevailed to all the Officers and Employees.
  • Audit and Supervisory Committee shall convene periodic meetings to exchange opinions with the representative directors, the Audit Office, the accounting auditor, and auditors of subsidiaries.
  • When Audit and Supervisory Committee members request advance payment of expenses associated with the performance of duties, the department in charge shall promptly approve those requests unless those requests are considered unnecessary for the performance of their duties.

8. Basic Policy on Rejecting Antisocial Forces and Maintenance of its Policy

  • Basic Policy
    Under the basic policy of Confrontation with Antisocial Forces and Fair and Ethical Business Conduct included in Satori Group Corporate Code of Conduct, Satori Group keeps a firm attitude towards antisocial forces that pose a threat to social order and safety and strictly avoid any association with them.
  • Maintenance of its Policy
    ・Under the Compliance Risk Committee Regulations and the Risk Management Regulations, Satori Group clearly states management framework which copes with antisocial forces and which has the Compliance Risk Committee at the top and establishes a person in charge who strictly avoids unfounded demands by antisocial forces.
    ・We belong to Public Interest Incorporated C/O Metropolitan Police Department Antisocial Forces Prevention Action Joint Association and work closely with the police-related entities.

Established on May 29, 2006

Revised on May 24, 2010

Revised on June 22, 2011

Revised on June 21, 2012

 Revised on July 12, 2013

Revised on May 1, 2015

Revised on Aug 22, 2019

Revised on Aug 20, 2020

Revised on July 13, 2021