Internal Control System

On April 19, 2006, ITOCHU’s Board of Directors established the Basic Policy regarding the Internal Control System, which was later partially revised on May 6, 2011. ITOCHU intends to revise and improve the internal control systems tirelessly in order to build the systems that are even more appropriate and efficient.
The following highlights some noteworthy initiatives under the Basic Policy regarding the Internal Control System.

Basic Policy regarding the Internal Control System

Initiatives to Further Enhance the Reliability of Financial Reporting

In order to further enhance the reliability of our consolidated financial reporting, Chief Operating Officers, etc. are appointed as Chief Responsible for Internal Control to establish a Groupwide line of responsibility. And the Disclosure Committee is designated as a steering committee to maintain the internal control system to comply with the internal control reporting system.
Furthermore, following the March 2011 revision of the Standard by the Financial Services Agency, ITOCHU formulated policies to streamline internal control designing and testing, and has been reinforcing its devotion to more rational and effective designing and testing from the standpoint of riskbased approach since fiscal 2013.
Results of testing conducted by the Internal Control Testing Department are fed back to each related unit and are used to develop and maintain the adequate internal control. This Plan-Do-Check-Act cycle enables ITOCHU to improve and reinforce the internal control system.

Strengthening Risk Management

ITOCHU has established internal committees and responsible departments in order to address the various risks associated with its business operations, such as market risk, credit risk, country risk, and investment risk. At the same time, ITOCHU has developed the risk management systems and methods to manage companywide and specific risks.
Those include a range of management regulations, investment criteria, risk exposure limits, and transaction limits, as well as reporting and monitoring systems. Moreover, ITOCHU regularly reviews the effectiveness of its risk management systems. As part of such efforts, the ALM Committee protects the ITOCHU Group’s assets through deliberations on balance sheet management as well as analysis and management of risk.