Corporate Governance Internal Control

Basic Concept of Internal Control System and State of Development

With the new corporate philosophy of “We will be a bridge to an abundant future with our independent financial services,” we will further contribute to the changing society, and aim to create a bright future for our customers and us. In addition to working for business structure reform, we will continuously strive to improve the establishment and operation of an internal control system so that duties are performed legally, properly and efficiently.

(1)System to ensure that the execution of duties by Directors and employees conforms to laws, regulations and the Articles of Incorporation

  1. The Board of Directors of the Company discusses and determines the matters set forth in laws, regulations and the Articles of Incorporation and important matters concerning the Ricoh Leasing Group set forth in the internal rules.
  2. The most important policy for the execution of business by Directors and employees is to comply with not only laws and regulations but also social conventions and corporate ethics in accordance with the Mission Statement of Ricoh Leasing. Accordingly, they comply with the Ricoh Group Code of Conduct and Directors take the initiative in familiarizing employees with them and instilling them in employees. To further ensure compliance, Directors appoint a person who is responsible for compliance, establish a department responsible for promotion thereof, and educate and enlighten employees. Further, Directors set up a hotline for whistleblowing and consultation with regards to compliance and inform employees of the hotline.
  3. The Ricoh Leasing Group’s basic attitude is not to have any relationship with antisocial activities or forces, and the Group develops internal rules and an internal control system. It attempts to report to, collect information from and cooperate with the police and other related organizations and promotes the development and strengthening of an organizational responding system to prevent damage pertaining to antisocial forces and to appropriately respond to problems.
  4. We endeavor to improve the internal control system and business process for “compliance with laws, social norms and internal rules, “improvement in effectiveness and efficiency of business, “maintenance of high reliability of financial reports and “preservation of assets including the conformity with the Financial Instruments and Exchange Act and other laws and regulations.
  5. Regarding the disclosure of corporate information, we prescribe the classification of disclosed information, procedures for disclosure and person responsible for disclosure in accordance with the Information Disclosure Regulations and ensure the accuracy, timeliness and exhaustiveness of the information through confirmation and evaluation by the Disclosure Committee.
  6. The Audit Department is established and audits, discusses and evaluates the state of execution of business in terms of compliance with laws and regulations and rationality and efficiency and tries to improve the state thereof.

(2)System for storage and management of information pertaining to execution of duties of Directors

We set up a department responsible for administration of records and written requests for managerial decisions concerning the decisions made as part of the execution of duties by Directors. Such documents are prepared, stored and managed in accordance with laws, regulations and internal rules. They are stored in an accessible way as necessary.

(3)System for regulations for management of risk of loss and others

  1. We prevent the occurrence of risk of loss in accordance with the Risk Management Regulations (governed by the regulations established by the Ricoh Group).
  2. If any risk of loss should occur, we attempt to minimize any damage (loss) in accordance with the Crisis and Incident Handling Standards.
  3. To manage the risk of loss in an exhaustive and comprehensive manner, we establish the Risk Management Committee and attempt to thoroughly inform our employees of the Committee.
    • Review Committee for credit risk such as expensive projects.
    • ALM Committee for market risk such as intere establish the following committees as advisory bodies for the President and Chief Executive Officer in accordance with the internal rules with respect to the risks in terms of business characteristics. Each committee manages the risks by analyzing and discussing them in a comprehensive manner.

est-rate fluctuation.

(4)System to ensure efficient execution of duties by Directors

  1. The Board of Directors discusses and determines a business plan and the President and heads of each organization inform the whole company of and develop the determined business plan to achieve the business objective under the Mission Statement. The Board of Directors receives a performance report on a monthly basis, establishes a system to give confirmation and instructions in light of changes in the external environment, progress of the plan and other matters, and executes the duties in an efficient and effective manner.
  2. We delegate the determination on the important business execution to the Representative Director and Executive Directors in accordance with the Articles of Incorporation and the rules of the Board of Directors for swift and agile decision-making. The Board of Directors supervises the business execution. Furthermore, we establish the Management Meeting and take measures so that the Representative Director and Executive Directors can make decisions optimally and promptly.
  3. The Company aims to improve management efficiency by introducing an executive officer system, establishing rules on the division of duties and official authorities, and delegating authorities over business execution to Executive Officers and other responsible persons.

(5)System to ensure the appropriateness of business by a corporate group comprised of the Company and its parent and subsidiaries

  1. The Board of Directors of the Company supervises the management of the whole Ricoh Leasing Group and makes decisions on important matters.
    To ensure effectiveness, the Board of Directors establishes the Affiliate Management Regulations , sets up an administrative department with primary responsibility as the controlling function and manages the Group.
    • System concerning reports to the Company regarding matters pertaining to the execution of duties by Directors of subsidiaries
      We receive reports of matters pertaining to the execution of duties by Directors of subsidiaries in accordance with the Affiliate Management Regulations.
    • System for regulations concerning management of risk of loss of subsidiaries and others
      We attempt to prevent the occurrence of risk of loss of the whole Group including subsidiaries and minimize any damage (loss) if a risk of loss arises in accordance with the Risk Management Regulations and the Crisis and Incident Handling Standards.
    • System to ensure the efficient execution of duties by Directors of subsidiaries
      • We formulate a business plan for the Group including subsidiaries and the whole Group executes the business in an efficient and effective manner.
      • We encourage Directors of subsidiaries to efficiently execute their duties by promoting the development of subsidiaries Esystems concerning the organization and decision-making including the Official Authority Regulations in accordance with our regulations. Further, consistency in the Group’s strategies is kept and the whole Group efficiently executes business through a system under which subsidiaries consult with us about important matters and report such matters to us.
    • System to ensure that the execution of duties by Directors and employees of subsidiaries conforms to laws, regulations and the Articles of Incorporation
      • We familiarize officers and employees of subsidiaries with the Ricoh Group Code of Conduct, instill it in the officers and employees, and educate and enlighten the officers and employees about compliance. Further, we set up a hotline for whistleblowing and consultation regarding compliance and inform officers and employees of subsidiaries of the hotline.
      • We promote the development of a system by subsidiaries based on our attitude towards antisocial activities or forces.
      • The Audit Department of the Company conducts a regular inspection on the state of execution of business of subsidiaries in terms of compliance with laws and regulations.
  2. The Ricoh Leasing Group complies with the common regulations established for the Ricoh Group and properly conducts business so that the independence of the Ricoh Leasing Group is respected and maintained and there is no conflict of interests.

(6)System to ensure effective execution of duties by the Audit & Supervisory Committee

  1. Matters concerning ensuring the independence of the employee who assists the Audit & Supervisory Committee in its duties from other Directors (excluding Directors who are Audit & Supervisory Committee Members) and the effectiveness of instructions given to such employee
    • The Company establishes the Audit & Supervisory Committee Office and assigns staff with a certain degree of independence from the execution side to assist with the duties of the Audit & Supervisory Committee.
    • The relevant employee does not receive instructions or orders from Directors (excluding Directors who are Audit & Supervisory Committee Members) when assisting the Audit & Supervisory Committee in its duties. Furthermore, Directors (excluding Directors who are Audit & Supervisory Committee Members) receive opinions in advance from the Audit & Supervisory Committee about the personnel evaluation and transfer of the relevant employee and determine them.
    • To ensure that effective instructions are given to the relevant employee by the Audit & Supervisory Committee, Directors endeavor to develop a system for the Audit & Supervisory Committee Office and the relevant employee at the request of the Audit & Supervisory Committee.
  2. Matters concerning reporting to the Audit & Supervisory Committee
    Directors (excluding Directors who are Audit & Supervisory Committee Members) and employees of the Company report the following matters in addition to the statutory matters to the Audit & Supervisory Committee. We prohibit any disadvantageous treatment of officers or employees who made a report to the Audit & Supervisory Committee for making such report.
    • Matters concerning important facts which are in violation of laws, regulations or the Articles of Incorporation, wrongful acts or facts which are likely to significantly damage the Company and its subsidiaries, if such facts are found
    • Result of internal audit and subsidiary investigation
    • State of whistle-blowing made by officers and employees of the Company and its subsidiaries under the whistle-blowing system
    • Other matters required by the Audit & Supervisory Committee to be reported
  3. Other systems to ensure effective execution of duties by the Audit & Supervisory Committee
    Directors of the Company (excluding Directors who are Audit & Supervisory Committee Members) develop the following systems and the employees of the Company shall cooperate with them to ensure effective execution of duties by the Audit & Supervisory Committee.
    • Audit & Supervisory Committee Members attend the Management Meeting and other important meetings in addition to meetings of the Board of Directors.
    • Audit & Supervisory Committee Members obtain information about the state of execution of duties from officers and employees of the Company and its subsidiaries.
    • Audit & Supervisory Committee Members inspect important documents for a final decision and other documents.
    • The Company bears the expenses incurred for the execution of duties by Audit & Supervisory Committee Members.

Basic Concept of the Elimination of Antisocial Forces and State of Development

The Ricoh Leasing Group’s basic attitude is not to have any relationship with antisocial activities or forces, and the Group develops internal rules and an internal control system. It attempts to report to, collect information from and cooperate with the police and other related organizations, and promotes the development and strengthening of an organizational responding system to prevent damage pertaining to antisocial forces and to appropriately respond to problems.