Financial reporting by Toyo Engineering Corporation (the “Company”) provides such information that is highly important for the Company’s shareholders and other stakeholders to verify the Company’s activities. Ensuring of the reliability of the Company’s financial reporting is therefore conducive to the sustainment and enhancement of society’s confidence in the Company. Conversely, incorrect financial reporting may cause not only unexpected loss to a number of stakeholders, but also significant damage to confidence in the Company. Given that, in order for the Company as well as the entire Toyo group to sustain and enhance society’s confidence, the Basic Policies on Financial Reporting are prescribed as follows.
Purpose of Financial Reporting
The purpose of financial reporting is to report the entire Toyo group’s financial position and its results of operations on a consolidated basis to shareholders and other stakeholders in a timely and appropriate manner. A financial report refers to consolidated financial statements in principle, and these Basic Policies must be observed not only by the Company that is primarily responsible for the preparation and submission of consolidated financial statements, but also by each of the Company’s consolidated subsidiaries and affiliates.
Confirmation by the Management
The Company’s management confirms his/her responsibility to report the Toyo group’s financial position and its results of operations to shareholders and other stakeholders.
Ensuring Proper Financial Reporting
The Company ensures that its financial statements are prepared in compliance with Japan’s generally accepted accounting principles and properly indicate the conditions of the Company’s financial position, results of operations, and cash flow in all important respects, and the Company thereby achieves proper financial reporting. Since the Toyo group’s mainstream business is based on the implementation of respective projects, both proper project performance reporting and its sound account settlement are crucial for ensuring reliable financial reporting.
Establishment and Assessment of Internal Control over Financial Reporting
With the aim of achieving proper financial reporting, the Company establishes the internal control system covering the entire Toyo group in compliance with Japan’s generally accepted standards for internal control. To ensure that the status of the design and operations of internal control at the level of the entire Toyo group can be properly assessed, separate evaluations are conducted by an auditing division independent from the performance of business activities.
Management Report on Internal Control over Financial Reporting
The Company’s management is committed to fulfill his/her accountability to external parties by clarifying the adequacy of the process to prepare the Company’s financial reports. The status of the design and operations of internal control over financial reporting is properly recorded and retained.
Disclosure of Information
To ensure accurate and fair disclosures of company information in an appropriate manner in line with investors’ standpoints at all times, the Company endeavors to enhance the Toyo group’s disclosure system and sincerely provides company information to investors in a timely and appropriate manner.
Staffing for Proper Financial Reporting
The Company endeavors to foster and train personnel to give them professional expertise and a sense of ethics required for the preparation of reliable financial reporting for the Toyo group.