Internal Control Systems
1.Basic Approach to the Internal Control System and Its Development Status
Tamron passed a resolution at a Board of Directors’ meeting regarding a system to ensure that the execution of duties by Directors is in compliance with laws and regulations and the Articles of Incorporation and other systems to ensure that the conduct of its business is appropriate and is working to strengthen these systems.
（１）Systems to ensure that execution of duties by Tamron’s Directors is in compliance with laws and regulations and the Articles of Incorporation
１）The Board of Directors and Directors shall execute their duties in compliance with the Corporate Mission, the Corporate Vision, the Our Approach and the Standards of Business Conduct, and shall ensure that these three sets of principles form the basis for the corporate activities of Tamron and its subsidiaries (hereinafter referred to as “Tamron Group Companies” and referred to collectively with Tamron as the “Tamron Group”).
２）The Board of Directors shall establish a Compliance Committee to deliberate basic matters for the promotion of compliance and shall appoint the Representative Director as chair of the committee.
３）The Board of Directors shall appoint a Director in charge of compliance who will be responsible for developing compliance systems across the Tamron Group and grasping and solving any problems.
（２）Systems for retention and management of information concerning execution of duties by Tamron’s Directors
１）Documents (including electromagnetic recordings; the same shall apply hereinafter) concerning the execution of duties by directors and other important information shall be retained and managed in accordance with the Document Management Regulations.
２）The Board of Directors shall make the Director in charge of the Production Management & Administration Unit responsible for overseeing the retention and management of documents concerning the execution of duties and other important information.
３）The revision or repeal of the Document Management Regulations shall be stipulated as a matter to be resolved by the Board of Directors in the Regulations for Segregation of Duties and shall be discussed at a meeting of the Audit & Supervisory Board in accordance with the Regulation Management Regulations and the Regulations for Segregation of Duties.
４）Information concerning the execution of duties by directors which is the materials or agenda of an “important meeting” for Tamron shall be retained and managed by the business unit in charge of the secretariat of the “important meeting” in accordance with the Document Management Regulations and shall be kept available for inspection.
（３）Regulations and other systems for managing risk of loss at Tamron
１）Through initiatives such as the enactment of rules and guidelines and the provision of training, Directors shall establish a risk management system in the domains they are in charge of to manage risks in relation to compliance, the environment, disasters, quality, information security, export control and other areas. The Director in charge of compliance will promote and manage these initiatives across the Group.
２）Directors shall establish Emergency Response Regulations as well as detailed rules of implementation such as Earthquake Response Procedures and Business Continuity Basic Plan and shall ensure risk management systems for business continuity and early recovery at head office and plants. The Director in charge of risk management shall promote and manage these initiatives across the Group.
（４）Systems to ensure effective and efficient execution of duties by Tamron’s Directors
１）Based on the Corporate Mission, the Corporate Vision, the Our Approach and the Standards of Business Conduct, Directors shall establish an Annual Management Plan and a Mid-term Management Plan, as group-wide goals shared by Directors and employees, and ensure these plans are put into practice at every level. Directors shall also set specific goals and efficient methods for achieving them such as delegation of authority, which should be implemented by every business unit to achieve the goals.
２）Directors shall provide for the appropriate segregation of duties and authority through the Regulations for Segregation of Duties and the Official Authority Regulations and shall make speedy decisions and take swift action.
３）Directors shall strengthen IT systems to achieve goals more reliably and improve business efficiency companywide.
（５）Systems to ensure execution of duties by Tamron’s employees is in compliance with laws and regulations and the Articles of Incorporation
１）Tamron shall instill in its employees that the Corporate Mission, the Corporate Vision, the Our Approach and the Standards of Business Conduct should form the basis of the Tamron Group’s corporate activities.
２）Tamron shall establish a Compliance Promotion Committee under the Compliance Committee for the purpose of strengthening compliance and, through convocation of the committee once a month, shall provide education and training aimed at raising compliance awareness within the company.
３）The Internal Audit & Supervision Board shall, in collaboration with the Director in charge of Compliance and the Compliance Committee where necessary, conduct audits of various regulations and compliance, and report the audit results to the Representative Director.
４)Through a hotline with the Internal Audit & Supervision Department and an outsourcing contractor, an attorney, as points of contact, established in accordance with the Whistle-blowing System Regulations, Tamron shall provide a means for employees of Tamron Group companies to directly provide information about suspicious activities and other concerns.
（６）Systems to ensure that the Tamron Group composed of Tamron and its subsidiaries conducts business appropriately
Directors and the Presidents of Tamron Group Companies shall ensure that the Corporate Mission, the Corporate Vision, the Our Approach and the Standards of Business Conduct the basis of business execution and shall develop the following systems:
１）Systems for reporting to Tamron matters concerning the execution of duties by Directors, etc. of subsidiaries
Depending on the matter, Tamron Group Companies shall be obliged to report it to Tamron or refer it to Tamron’s Board of Directors in accordance with the Affiliated Company Management Regulations and the Affiliated Company Official Authority Schedule, and Tamron shall oversee Tamron Group Companies to ensure they conduct business appropriately.
２）Regulations and other systems for managing risk of loss at subsidiaries
The Corporate Strategy Unit shall manage and supervise Tamron Group Companies throughout from the citing of problems relating to Tamron Group operations and compliance to their resolution.
３）Systems to ensure effective and efficient execution of duties by Directors, etc. of subsidiaries
Directors and Presidents of Tamron Group Companies shall convene budget versus actual report meetings (“performance review meetings”) every quarter and seek to share information for the execution of duties. In addition, Directors shall issue instructions and requests directly to Tamron Group Companies at “performance review meetings.”
４）Systems to ensure execution of duties by Directors, etc. and employees of subsidiaries is in compliance with laws and regulations and the Articles of Incorporation
a. Tamron shall apply its Compliance Regulations and shall appoint persons in charge of promoting compliance at Tamron Group Companies to conduct compliance activities such as education and training for employees.
b. Tamron’s Audit & Supervisory Board Members shall monitor the appropriateness of execution of duties by receiving reports from Tamron Group Companies, and Internal Audit & Supervision Board shall attend “performance review meetings” and monitor the appropriateness of execution of duties. The Audit & Supervisory Board Members and Internal Audit & Supervision Board shall also conduct visiting audits and internal audits of Tamron Group Companies.
c. The hotline with Tamron’s Internal Audit & Supervision Department and an outsourcing contractor, an attorney, as contact points shall be a system which also deals with whistle-blowing reports from Tamron Group Companies.
（７）Items related to employees assigned to assist Audit & Supervisory Board Members
If requested by Audit & Supervisory Board Members to assign employees to assist them in their duties, the Board of Directors shall comply with the request and assign the employees necessary to facilitate audit operations.
（８）Items related to the independence of the employees in (7) from the Directors and items for ensuring the effectiveness of instructions given by Audit & Supervisory Board Members to such employees
１）Tamron shall put in place systems to ensure that employees assigned to assist Audit & Supervisory Board Members in their duties are not unjustly restricted from attending meetings, gathering information or undertaking other necessary activities in accordance with the instructions given by Audit & Supervisory Board Members.
２）The consent of Audit & Supervisory Board Members shall be obtained for any personnel transfers, performance appraisals, disciplinary action or other personnel matters involving employees assigned to assist Audit & Supervisory Board Members in their duties.
（９）Systems for reporting to Tamron’s Audit & Supervisory Board Members
１）Systems for reports to Audit & Supervisory Members by Tamron’s Directors and employees
Directors and employees shall promptly report to Audit & Supervisory Board members if they have discovered a fact that might cause serious damage to the Tamron Group.
２）Systems for reports to Tamron’s Audit & Supervisory Board Members by Directors, Audit & Supervisory Board Members, members who execute business or employees of subsidiaries or persons who have received reports from such persons
Audit & Supervisory Board Members may ask the Internal Audit & Supervision Department to report on the implementation status of internal audits of the Tamron Group and the content of whistleblowing reports in accordance with the Whistle-blowing System Regulations once a month, in principle, or whenever necessary.
（10）Systems to ensure that persons who made the reports in (9) do not receive discriminatory treatment as a result of such reports
Tamron clearly states in the Whistle-blowing System Regulations that persons who made whistle-blowing reports in accordance with such regulations shall not receive discriminatory treatment, and it enforces these regulations.
（11）Items related to policy for handling expenses or liabilities incurred by Tamron’s Audit & Supervisory Board members in the execution of their duties
If Audit & Supervisory Board Members request arrangement such as the advance payment of expenses necessary for execution of their duties, Tamron shall promptly process such expenses or liabilities.
（12）Systems for ensuring effective auditing by Tamron’s Audit & Supervisory Board members
Tamron shall put in place systems to enable Tamron’s Audit & Supervisory Board Members to conduct effective audits in collaboration with the Independent Auditor and Internal Audit & Supervision Department respectively.
（13）Development of systems for ensuring the appropriateness of financial reports
Tamron shall continuously develop, operate and assess systems for effective and appropriate internal control over financial reporting in accordance with the Financial Instruments and Exchange Act and other laws and regulations and shall ensure that financial reporting is reliable and appropriate.
（14）Basic approach to the elimination of antisocial forces and its development status
The Company mentions the elimination of ties with antisocial forces in the Standards of Business Conduct and seeks to instill and raise awareness of the need to eliminate such ties within the Tamron Group.