Governance

Corporate Governance

Basic Concept Concerning Corporate Governance

Since its founding, the People, Dreams and Technologies Group has pursued the management philosophy of　”We will use technology to contribute to the creation of a society in which people can live with the freedom to pursue their dreams.” Under the slogan of “People, Dreams and Technologies,” the Group has devoted its energies to developing and supporting technologies to create a foundation for life in which people can live with the freedom to pursue their dreams, while making the best use of nature. We will strive to meet the expectations and trust of our stakeholders by using this technology to transform ourselves into a company capable of providing services related to every aspect of our lives.

Our company features an audit and supervisory committee based on the Companies Act.
With the aim of sustaining growth and increasing long-term corporate value, we will ensure management transparency and fairness, effective use of management resources (personnel, materials, capital and information), and speedy decision-making. We will implement these measures appropriately based on our corporate governance policies and initiatives as outlined below.

Internal Regulatory Policy

The People, Dreams and Technologies Group will implement internal controls to achieve the following four objectives in order to fulfill its corporate social responsibility based on its management philosophy and Charter of Corporate Behavior.

• (1) To increase the effectiveness and efficiency of business management
• (2) To ensure the reliability of corporate financial reporting
• (3) To encourage compliance with laws and regulations related to business management
• (4) To preserve assets

In order to ensure the effectiveness of internal controls, the following six basic elements will be properly organized and operated.

1. 1. Regulatory Environment
   Based on our Charter of Corporate Behavior, we will establish an appropriate and effective personnel and job performance system on which our management activities will be based.
2. 2. Risk Assessment and Response
   We will establish risk management rules and work to ensure their implementation.
3. 3. Regulatory Activities
   We will strive to enhance the effectiveness of mutual checks and the transparency of internal controls by operating an operational management system based on job assignment and job assignment regulations.
4. 4. Information & Communication
   We will collect, manage, and identify all information related to our corporate activities in accordance with our Internal Document Control Rules (including electronic information) and our Information Security Operation Manual. We will use C-NET (Long Network System) to communicate necessary information quickly and accurately within the organization, and at the same time, disclose necessary information to all stakeholders.
5. 5. Response to IT (Information Technology)
   Through our Information Services business, which is one of our main business activities, we will further advance appropriate measures related to the organization's IT environment, IT usage and control, based on information technology cultivated over many years.
6. 6. Monitoring Activities
   We will establish an internal control system that is independent of the organizations involved in project implementation, and monitor, evaluate, and correct internal controls on a daily basis. In addition, we will establish an Internal Control Committee to promote internal control and make reports when necessary.

Basic Policies for Internal Control over Financial Reporting

We set forth the basic policies for internal control over financial reporting as follows.

1. 1. All employees, including management, shall place importance on reliable financial reporting.
   Financial reporting is managerial information that is the focus of attention not only from all stakeholders but also from the general public. All employees, including management, shall recognize that the reliability of our financial reporting is the most important factor in maintaining trust in us as a company.
2. 2. Employees shall process all orders fairly and appropriately at all stages from order receipt to delivery to ensure the reliability of financial data. All employees shall ensure that financial reporting is reliable by complying with internal rules in a fair and appropriate manner in their daily sales activities and business operations.
3. 3. Managers shall ensure the reliability of financial reports by themselves ensuring the fairness of management activities and appropriately reviewing and confirming financial figures.
   Managers shall endeavor to improve the reliability of financial reporting by setting forth appropriate action standards based on the management philosophy and the Charter of Corporate Behavior in their investment activities and day-to-day business activities, confirming the accuracy, appropriateness, and fairness of the various figures related to financial reporting, and taking corrective measures as necessary.
4. 4. Management and employees shall recognize the risks related to financial reporting and take appropriate action in order to mitigate those risks.
   In daily sales activities, management shall periodically monitor and review the risks as appropriate, and shall formulate risk response measures. Employees shall pay attention to the risk of mistakes and improprieties in day-to-day business activities and take appropriate measures or proposals to avoid such risks.
5. 5. The company shall strive to improve the reliability of financial reporting through monitoring and auditing.
   The Internal Control Organization shall periodically monitor daily business activities and management activities under the auspices of the various rules and regulations pertaining to financial reporting. In addition, audits shall be periodically conducted based on an internal control plan prepared at the beginning of each business year, and together with the monitoring results, improper dispositions shall be discovered and recommendations for improvement shall be made to management.
6. 6. The company shall establish an appropriate organizational structure, promote internal controls, and file reports concerning internal controls where appropriate.
   Based on the monitoring and audit results as well as recommendations for improvement reported by the Internal Control Organization, etc., the Internal Control Committee shall verify the transparency and integrity of all financial statements and submit internal control reports on financial reporting to the President and Representative Director.

Compliance

Risk management