Ethic Codes,Policy

Ethic Codes

1．Constant Provision of High Quality Commodities

Fully take account of quality and safety performance, strive to develop new technology and new products, constantly provide commodities conducive to the society and further satisfy the demand of the customer .

2．Compliance with Laws, Regulations and Procedures

Comply with all relevant laws, regulations and internal procedures of the Company and to behave honestly.

3．Fair Competition and Fair Trading

Implement free competition, reasonable, open and fair trading.

4．Relationship with the Society

Keep good and harmonious relationship with the local society and take responsibility for local community.

5．Stressing Environment Protection Issues

Observe the principle of Stressing environment issues of the earth, take actions to reduce environment load and to prevent environment pollution.

6．Respecting Human Dignity

Respect the human dignity and rights of all persons.

7．Carrying Out Sound and Normal Operation Activities

Keep sound and arm's-length relationship with all political organizations, administrative departments and business counterparties. Sternly (Firmly) resist all anti-society forces and do not establish relationship with any such forces .

Policy on Internal Control System

1．Management principle

All management activities relating to the execution of operations depend on the following management principle of Seikoh Giken Group, which is comprised of the Company and the subsidiaries of the Company (the "Group").
“With outstanding technologies and creativity, we will supply high-quality products, contribute to the progress and development of society, and pursue corporate growth and the well-being of our employees.”

2．Frameworks concerning the preservation and management of information relating to the execution of duties of directors

The Company preserves documents, etc., in accordance with laws and regulations and based on Company-internal regulations.
For the purposes of information management, an Information Security Management System (ISMS) shall be reliably operated based on fundamental policies of information security.

3．Regulations and other frameworks for the management of risk of loss facing the Company and its subsidiaries

The Company expressly defines the Group’s risk management frameworks and responsive action in case of extraordinary events in Group-shared risk management regulations, business crisis management regulations, and other internal regulations.
The Company conducts risk management through various types of committees, etc., which convene in the Group in connection with matters of daily industrial health and safety, environmental matters, product quality matters, and information security matters, etc. Operating divisions shall identify from their specialist perspectives and independently manage the risks inherent to their respective operations.
The Internal Audit Department of the Company audits the status of risk management at the divisions of the Company and the subsidiaries of the Company and shall report the findings of the audits to the President and CEO.

4．Frameworks for ensuring the efficient execution of the duties of directors, etc., of the Company and its subsidiaries

The Company convenes each month a regular meeting of the board of directors and extraordinary meetings as the necessity arises, to pass resolutions on important matters and to monitor the status of the execution of business operations by directors. For the efficient execution of the functions of directors, as a rule, twice each month an inter-divisional liaison committee convenes comprised of the full-time directors and the division heads responsible for the execution of business operations at the individual divisions. This committee shall serve for sharing important information relating to the status of the execution of business operations and management at the individual divisions.
For the implementation of operations, management plans (master plans) are established for the attainment of management targets of the Group for the medium and long terms and for individual fiscal years. Toward the attainment of the formulated targets, the individual divisions of the Company and its subsidiaries formulate and implement specific business plans. The status of progress toward the attainment of targets must be verified at regular intervals through performance reports from the responsible persons of the divisions of the Company and reports from the directors, etc., of subsidiaries at the International Sales and Marketing Conference convened one each half-year.
For the purposes of the daily execution of business operations, the Company expressly defines authorities and responsibilities associated with positions at the Company and at subsidiaries respectively based on Company management regulations concerning the segregation of duties and allocation of job authorities and regulations on the operations of affiliates. Position holders and directors, etc., of subsidiaries must with respect to the duties allocated to them be prepared to execute their job activities in coordination with the mutually interrelated operations of each organization unit so as to ensure the efficiency of the execution of business operations.

5．Frameworks for ensuring compliance with laws and regulation and the articles of incorporation in the execution of duties of the directors, etc., of the Company and its subsidiaries

In order to ensure that the execution of duties by directors, etc., and employees of the Group occurs in compliance with laws, regulations, and the articles of incorporation, the Company shall enact relevant Group-internal regulations and appoint a director in charge of compliance at the Company. The director in charge of compliance shall report to the board of directors on the status of compliance promotion activities including training, etc., for directors and employees. Moreover, the Company shall set up a committee for the promotion of compliance at the Group-level as well as a contact desk charged with taking Company-internal reports and consultations concerning compliance matters at the Group.

6．Frameworks for ensuring the appropriateness of operations of the Company and its subsidiaries

The Company shall be based on Group-internal regulations and appropriately identify the status of business operations through regular reports from Company subsidiaries concerning the execution of the functions of directors. With regard to important management matters, while giving consideration to the independence of each company's management, close mutual communication including advance mutual consultations shall be practiced and steps taken to promote the efficiency of Group-level management.

7．Frameworks for ensuring the appropriateness of financial reporting

The Company creates frameworks to ensure the appropriateness of non-consolidated and consolidated financial reporting based on accounting regulations and other internal regulations of the Company and in observance of accounting standards and other related laws and regulations. Moreover, the Company shall establish arrangements for the assessment and improvement of the creation and operation of those frameworks.

8．Matters to ensure with respect to auxiliary employees assisting in the duties of the Audit and Supervisory Committee their independence from directors (excluding directors serving as Audit and Supervisory Committee members) and the effectiveness of instructions issued to such employees

The Audit and Supervisory Committee can in accordance with necessity appoint staff of the Internal Audit Department as auxiliary employees to assist in the duties of the Audit and Supervisory Committee. These employees shall follow exclusively the instructions and orders of the Audit and Supervisory Committee. Moreover, with respect to the appointment and transfer of auxiliary employees to assist in the duties of the Audit and Supervisory Committee the approval of the Audit and Supervisory Committee is required

9．Frameworks for reports to the Audit and Supervisory Committee from directors (excluding directors serving as Audit and Supervisory Committee members) and employees, etc., of the Company and Company subsidiaries, and frameworks for other reports to the Audit and Supervisory Committee.

（１）Directors (excluding directors serving as Audit and Supervisory Committee members) of the Company shall upon the request of the Audit and Supervisory Committee submit or report on the following documentations.

1. Requests for managerial decisions, meeting minutes, and contracts
2. Matters posing a risk of substantial damage to the company
3. Important matters of the monthly management status
4. Important matters concerning the status of internal audits and risk management
5. Matters concerning a suspected breach of important laws, regulations, or articles of incorporation
6. Other important matters concerning compliance

（２）Employees of the Company who discover important matters concerning paragraphs (ii) or (v) above shall be able to report directly to the Audit and Supervisory Committee.
（３）Directors and employees of the Group who are requested by the Audit and Supervisory Committee members of the Company to report on matters concerning the execution of business operations shall promptly and appropriately provide such reports.
（４）Directors and employees of the Group who discover facts and circumstances threatening material damage to the Company or subsidiaries of the Company, including acts in breach of laws and regulations, etc., shall upon such discovery immediately report the matter to Audit and Supervisory Committee members or the Audit and Supervisory Committee of the Company.
（５）The unit in charge of the whistleblower system of the Group shall regularly report to the Audit and Supervisory Committee members of the Company about the status of internal reports from directors and employees of the Group.
（６）The Company prohibits imposing onerous measures on employees of the Group in retaliation for their reporting to the Audit and Supervisory Committee of the Group and makes this policy exhaustively known through the Compliance Committee, etc., among directors and employees of the Group.

10．Matters concerning the processing of expenses or obligations that arise in the execution of duties of Audit and Supervisory Committee members

When Audit and Supervisory Committee members have in connection with the execution of their duties requested of the Company advances, etc., of expenses under Article 399, Section 2, Item 4 of the Companies Act, the unit in charge shall after considering the matter expediently process such expenses or obligations except in cases found to be unnecessary for the execution of duties of the Audit and Supervisory Committee members.

11．Other frameworks to ensure the effective performance of audits by Audit and Supervisory Committee members

Audit and Supervisory Committee members shall in a timely manner exchange views and opinions with directors, the accounting auditor and the Internal Audit Department.

Concept and Preparations for Eliminating Antisocial Forces

Seikoh Giken takes a firm stand against the antisocial forces that threaten civil society and does not engage in any such relationships whatsoever. As part of our policy, we have established ethical norms and behavior standards and implemented them throughout the Company Group included affiliated companies.
In addition, the Management Department has been designated to cooperate with external specialist organizations, such as the local police department and advisory attorneys, to rapidly gather information and take appropriate responses.