MCJ Group recognizes that the establishment of a system for managing risk is a responsibility we owe to all society, including our stakeholders, and are proactively engaged in ensuring this.

Objective

The objective of this risk management system is to ensure the continuous and stable development of the Group’s business. We will do this by identifying the possibility of loss arising from uncertain business activities or from a failure to manage such uncertainty as a risk, and building a risk management system to properly address this. This system will eliminate and mitigate factors that may impinge upon the interests of our stakeholders, including our customers, suppliers, shareholders, and executive staff, and should enable us to appropriately manage the risk that arises within the Group.

Definition of Risk

(1) Anything that interrupts or suspends the continuation of the Company’s business.
(2) Anything that directly or indirectly causes economic loss to the Company.
(3) Anything that damages the credibility of the Company or which tarnishes the image of the Company business or brand.
(4) Any other factors that may result in uncertainty in terms of the Company’s management.

Management System

MCJ Group is building the following promotion system in order to manage the various risks that arise in different departments and business activities on a systematic and cross-sectional basis.

1. Risk Management Committee
(1) We will establish a Risk Management Committee to function as the body for managing risk arising across the Company. The Risk Management Committee shall be chaired by the Company President & CEO. The Legal Department, operating under the command of the President & CEO, shall be in charge of the operations of the Committee. Department heads shall serve as the executive chair.
(2) The Risk Management Committee shall meet on a regular basis to discuss issues and measures relating to risk management in collaboration with the relevant departments in accordance with the specific type of risk.
(3) If significant and complex issues are recognized, a special session of the Risk Management Committee shall be convened to issue measures to resolve the issues at an early stage and to prevent similar issues from recurring.
(4) In the event that anything is discovered that could have a significant impact on the reliability of the Company’s financial reporting, the Risk Management Committee shall re-evaluate the risk and address it accordingly.
2. The procedure for risk management is to “investigate the risk,” “analyze and evaluate the risk,” and to “come up with and enact strategies and actions to address the risk.” This procedure ensures the effective functioning of the risk management system.
3. In order to check whether the Company’s business activities are compliant and in accordance with internal regulations and rules, and to discover and eliminate improper or unusual activities, it is necessary for the Internal Audit Office to continuously audit the Company’s business operations. The Head of the Internal Audit Office shall strive to improve the internal auditing system in collaboration with auditors and accounting auditors.
4. Each department within the Company shall strive to keep abreast of industry trends and the enforcement of relevant laws and regulations, and shall report any significant information to the Risk Management Committee. Further, if any changes to the organizational structure or rules and regulations are required, they shall be put on the agenda for meetings of the Board of Directors, where measures shall be enacted, as necessary.
5. The Company President & CEO and Directors shall endeavor to remain informed on the status of important matters of decision making and execution of business in the Company and its subsidiaries, and shall pay close attention to risk management within the Group.
6. The Executive Chair shall report to the chair of the committee regarding the results of risk identification/evaluation and any impact this may have on the preparation of financial reports. The chair of the committee shall then report the contents of this to the Board of Directors.