Compliance and Risk Management

Internal Control and Compliance,Risk Management

Internal Control

The Company views the development and operation of an internal control system to be an important management issue, and it has developed an efficient, legal and appropriate business execution system pursuant to Article 362 of the Companies Act and Article 100 of the Ordinance for Enforcement of the Companies Act. The Internal Control Committee established under the Board of Directors reviews the operational status of the internal control system and will revise it as necessary.

Principles of compliance

The Company has set "1. adherence to rules," "2. observance of confidentiality," "3. distinction between private and public matters," "4. strictness with money," "5. prohibition of side jobs," and "6. prohibition of discriminatory and sexually suggestive statements or behavior" as principles of compliance.

Compliance promotion framework

To focus on business principles and fulfill its social responsibility, the Company has provided all officers and employees with a copy of the Compliance Manual (Toyo Denki Seizo Ethical Standards) that stipulates its conduct guidelines. The move is part of an effort to have the code and the basic rules of work fully known.
The Company has also introduced a contact for whistleblowers that allows employees to provide information directly to the management. The system is aimed at ensuring that any illegal or inappropriate conduct within the Company is detected at the earliest possible stage and that adequate measures are taken promptly and as needed so that such conduct is rectified.

Compliance education

We conduct compliance training every year for all officers and employees working at the Company and Group companies in order to enhance knowledge of compliance and foster awareness to respect corporate ethics.

Proper export controls

The Export Control Department at General Affairs Division is responsible for export management as the export management control department. We have created a system for the proper management of exports in order to ensure compliance with the laws and regulations concerning export management in the countries and regions where we engage in business activities as well as to avoid involvement in transactions that could hinder the maintenance of international peace and safety.
The Export Control Department handles cargo and technology parameters used in determining whether or not export permits are required, as well as investigation of transactions. In addition, the Department carries out employee education and guidance and support for Group companies.

Contact for whistle-blowers

The Group has established a contact for whistle-blowers that aims to ensure that any illegal, inappropriate, or unethical conduct by an individual or an organization is detected at the earliest possible stage and that risks are minimized, and to promote ethical and legal compliance. In addition, the number of whistleblowing reports received is disclosed annually in the Business Report.

Risk Management

Risk Management Frame Work

The Group's risk management frame work is as follows.

Risks pertaining to management strategy challenges such as business strategies and new business development are discussed at the Business Strategy Meeting, which is generally held twice a month.

Risks concerning day-to-day business operations are reported to the President, Representative Director at the Executive Officer Liaison Council, which generally convenes at least three times a month, for three subjects: orders received, sales, inquiries, and other business activities; procurement, manufacturing, shipments, and other production activities; and quality control, R&D and other technical matters, production reforms, and adoption of IT. The progress of business plans and the status of business execution are checked on a monthly basis.

National and Global Group Company Council

For Group company-related risks, the progress of each company's business plan and the status of business execution are examined at semiannual National and Global Group Company Council.

Of these various risks, matters deemed to be especially important are discussed by the Internal Control Committee under the Board of Directors, with the participation of the legal counsel.
Reports and recommendations based on those discussions are made to the Board of Directors. Risks pertaining to climate change, human capital, and other sustainability issues are discussed by the Sustainability Committee under the Board of Directors, and are reported to the Board of Directors.

Risks

This section presents a summary of risks that may affect the Group's earnings and financial position, and countermeasures for them.
Forward-looking statements below are based on the judgment of the Group as of the end of the consolidated fiscal year ended May 2024.

For details on the nature of risks and corresponding countermeasures, please refer to the Consolidated Report in the link below.

Integrated Report"Toyo Denki Seizo Report

Information Security

Basic policy

The Company holds a vast amount of information assets including information presented by customers related to its business execution and confidential information concerning the Group's proprietary technologies and its trade.
Each Group company is taking various measures in this respect based on an awareness of shared security under the Group's Information Security Guidelines, which have been established to appropriately manage and use these information assets.
We also have the Information Security Committee in place to deliberate on relevant matters and take appropriate measures as needed.

Information security training

The Company is conducting various types of education, training, and drills, in order to enhance information security awareness among all employees.