Internal Control

Constant review and improvement of internal control systems is used to promote highly efficient, lawful, and transparent Group management.

Improving Internal Control Systems

Basic policies governing all officers and employees are clearly set out in our Basic Policy on Internal Control System Architecture. In addition, we have prescribed guidelines for internal control system architecture. Already in the year ending March 2016, in response to the revision of the country’s Companies Act, we have revised the content of these policies and guidelines to clarify the matters that Azbil Corporation and the Group companies should address. These matters include ensuring the reliability of financial reporting, promoting sound business activities with a high level of business ethics, developing and managing the control environment and other fundamental elements of internal controls, and managing key risks to ensure business continuity and stable development. To construct an efficient, lawful, and highly transparent system, we constantly review and improve our internal control structures.

Enhancing Group-wide Initiatives

In conjunction with the updating of our basic policies, we have launched initiatives to develop compliance and risk management systems that cover the whole azbil Group. These include strengthening reporting systems concerning the performance of duties at each Group company (for reporting to senior management of individual companies and to the board of directors of Azbil Corporation), enhancing the support functions of auditors, and expanding the internal notification system to cover the employees of our overseas subsidiaries.

Responses to the Financial Instruments and Exchange Act (J-SOX) and Improving the Standard of Accounting

To improve our response to the requirements for internal control reporting systems prescribed by the Financial Instruments and Exchange Act (popularly known as J-SOX), we conduct periodic reviews of the scope of our control system evaluation in light of changes in the business environment, as well as reviewing our risks and controls. In the year ended March 2015, Azbil Trading Co., Ltd., was added to the list of companies subject to evaluation of core business processes, thereby extending the scope of evaluation by 10% year on year. In the year ending March 2016, to further strengthen the foundation for internal control, we will provide all Group employees with education aimed at improving accounting standards.
Also, in May 2015, Azbil Corporation began using a new core information system. Based on new business procedures and operation systems, we intend to build more efficient and reliable internal control systems, and we will make every effort to ensure that they are effective.

Management of Group Companies under J-SOX