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Internal Controls Basic Policy

In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, Takenaka Corporation has established the following Internal Controls Basic Policy under the common principles of our corporate group (“the Takenaka Group"), which is comprised of Takenaka Corporation (“the Company”) and its subsidiaries (“Group Companies").

Legal Compliance System
  1. 1.A system for ensuring that the execution of duties by directors complies with laws and regulations, and the Articles of Incorporation
    (Article 362, Paragraph 4, Item 6 of the Companies Act)
    A system for ensuring that the execution of duties by employees complies with laws and regulations, and the Articles of Incorporation
    (Article 100, Paragraph 1, Item 4 of the Ordinance for Enforcement of the Companies Act)
    1. (1)A Corporate Philosophy (Management Philosophy and Company Policy) and Corporate Code of Conduct shall be established to serve as guidance for our directors, managing officers, employees, and others to conduct themselves in compliance with laws and regulations, the Articles of Incorporation, and social norms.
    2. (2)In order to promote compliance with social norms, and laws and regulations throughout the Company, a Corporate Ethics Central Committee, chaired by the president, shall be established to control companywide promotion of thorough compliance. In addition, the divisions in charge shall be the General Affairs Division, the Audit Division and the Corporate Strategic Planning Division's CSR Department.
    3. (3)In order to ensure thorough compliance throughout the Company, a managing officer shall be assigned to compliance. In addition, a Compliance Committee, chaired by the same managing officer, shall be established under the Corporate Ethics Central Committee, and it shall be responsible for providing guidance on recurrence prevention, and education and raising awareness on compliance.
    4. (4)An internal consultation and reporting helpline for Takenaka employees, suppliers, and other individuals shall be established in the Audit Department in order to collect internal information on illegalities, wrongdoing, and any other compliance violations, and then employ self-corrective action to rectify any improprieties.
    5. (5)A compliance helpline shall be established as an external consultation and reporting point of contact, and in order to ensure its fair operation, a legal counselor shall be appointed to respond to people who provide information.
    6. (6)Based on an audit plan, the Audit Department shall verify the status of compliance by employees in their business and other activities with laws, regulations, and other internal and external norms, and then provide guidance and advice as necessary.

    2. Information Management System
  2. 2.A system for storing and managing information related to the execution of duties by directors
    (Article 100, Paragraph 1, Item 1 of the Ordinance for Enforcement of the Companies Act)     The minutes of the General Meeting of Shareholders, the minutes of the Board of Directors’ meetings, and other important information and documents related to important decision-making shall be stored and managed in accordance with laws, regulations, and internal rules, and these shall be maintained in a state where they can be inspected as necessary.

    3. Risk Management and Compliance System
  3. 3.Regulations and other systems for managing risk of loss
    (Article 100, Paragraph 1, Items 2 and 5B of the Ordinance for Enforcement of the Companies Act)
    1. (1)Among the risks associated with business execution, the Company shall clarify a managing officer to be in charge of events with the potential to have a large impact on management, such as natural disasters or accidents related to the environment or quality; and preventive measures, and a system for identifying and responding to situations when an incident occurs shall be provided.
    2. (2)A Crisis Management Committee, chaired by a representative director, shall be established to avoid or mitigate risks to management and employees should a risk event occur in the Takenaka Group, and to promote crisis management activities during normal times. The committee shall establish standards and a response system for crisis management. Should a risk event occur, a task force shall be established at the Head Office or each main office depending on the degree of risk, and measures shall be taken to prevent damage from spreading and to minimize damage.
    3. (3)As for the compliance system, branch CSR and compliance committees, chaired by the general manager of each main and branch office and the general manager of operational divisions, shall be established to promote compliance.
    4. (4)A person responsible for promoting CSR and compliance activities shall be assigned at the Head Office, and each main and branch office as well as at the Investment & Development Division. The CSR Department and the relevant person in charge shall work together to promote thorough compliance and monitor the status of promotion.

    4. Business Efficiency System
  4. 4.A system for ensuring that the execution of duties by directors is done efficiently
    (Article 100, Paragraph 1, Item 4 of the Ordinance for Enforcement of the Companies Act)
    1. (1)A managing officer system shall be established for the purpose of speeding up management decision-making, improving the appropriateness and efficiency of management by strengthening business execution functions, and improving management soundness by strengthening the supervisory function.
    2. (2)Management shall be divided into decision-making and supervisory functions, and business execution functions, with the former being shared among directors and the latter among managing officers.
    3. (3)In order to ensure the efficient execution of duties by directors, decision-making on business execution shall be divided among the Board of Directors, managing officers, and the general managers of divisions according to the level of importance.
    4. (4)The Board of Directors shall supervise by determining management policies and monitoring the execution of business by managing officers and senior management to ensure that these matters are properly carried out in accordance with management policies.
    5. (5)At Board of Directors’ meetings, matters stipulated in law and the Articles of Incorporation as well as any important business matters shall be subject to resolutions.

    5. Group Companies Management System
  5. 5.A system for ensuring the appropriateness of business operations in the Takenaka Group
    (Article 100, Paragraph 1, Item 5 of the Enforcement Regulations of the Companies Act)
    1. (1)The Company shall maintain internal control systems, including risk management and compliance systems, by Group Companies, and seek to ensure appropriate and efficient management of Group Companies.
    2. (2)The Company shall request Group Companies to report on the status of their operations and seek the Company's approval for any important matters.
    3. (3)When necessary to supervise the duties of directors, the Company's corporate auditors shall request Group Companies to report on their businesses, or the corporate auditors shall investigate their businesses and assets with the results of such audits being included in audit reports.
    4. (4)The Company's audit department shall audit Group Companies in accordance with an audit plan, and the results of such audits shall be included in an audit report.
    5. (5)A helpline shall be established at the Company's Audit Department as a point of contact for consultation and reporting that will enable employees of Group Companies to directly consult with and report to the Company in regard to any compliance violations at Group Companies. It shall also be ensured that no disadvantageous treatment is incurred by either the person taking the report or the person making the report.

    6. Support System for Corporate Auditors (Board)
  6. 6.System for corporate auditors
    (Article 100, Paragraph 3, Items 1 to 7 of the Ordinance for Enforcement of the Companies Act)
    1. (1)Corporate auditors may have assistants or establish a secretariat when necessary for the performance of their duties. Matters regarding the personnel for assistants or the secretariat shall be determined in consultation with the directors.
    2. (2)When an assistant or secretariat is appointed at the request of a corporate auditor or when such assistant performs duties at the direction of a corporate auditor, the independence of the assistant in terms of duties shall be ensured.
    3. (3)When requested to do so by a corporate auditor; directors, employees, and others in the Takenaka Group shall report appropriately on matters related to the execution of business operations, matters stipulated by laws and regulations, and any matters determined in advance upon consultation with the directors. In addition, should a serious risk event occur or be likely to occur in the Takenaka Group, it shall be immediately reported to a corporate auditor. Then the Audit Department shall report the results of an internal audit, current status of compliance, and any related matters to the corporate auditor in a timely manner.
    4. (4)A system shall be arranged so that any person making a report as described in (3) above shall not be subjected to any disadvantageous treatment for doing so.
    5. (5)The Company shall appoint corporate auditors, including outside auditors; and a Board of Auditors, comprised of these auditors, shall be established.
    6. (6) Corporate auditors shall exercise the authority stipulated by laws and regulations, and conduct business and accounting audits in accordance with laws and regulations, the Articles of Incorporation, and internal regulations, using accounting auditors and internal organizations as necessary. Audit results shall be reported in an audit report, and opinions shall be exchanged with representative directors.
    7. (7)Corporate auditors may make requests to the Company for advance payment or reimbursement of expenses incurred in the performance of their duties, including consultation with accounting auditors and attorneys, and for other expenses or liabilities incurred in the performance of such duties, and the Company shall handle such requests in an appropriate manner.



Additional notations

Enacted on May 16, 2006
Partially revised on July 31, 2008
Partially revised on March 27, 2012
Partially revised on April 1, 2013
Partially revised on May 1, 2015
Partially revised on April 1, 2020

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