Being fully aware that enhancing our corporate governance is vital to increasing our corporate value for all of our stakeholders, we are undertaking a series of programs designed to improve and strengthen our corporate governance system.

Corporate Governance System

As of July 1, 2018

Internal Control

Management Philosophy

At the core of Inabata's management approach is our Mission of contributing to society's development in the humanitarian spirit of "love(ai)" and "respect(kei)" - two core values that have been there in the company since its foundation. Along with IK Values, Inabata is run according to our Vision: "to continually evolve, serving clients and society through our global operations and meeting their changing needs." We are promoting to raise awareness and understanding of these statements by having them publicized on internal and external communications platforms.

Management Philosophy

System

In order to ensure compliance and appropriate business processes, committees such as Compliance Committee, Internal Control Committee, and Export Control Committee have been set up together with control offices such as Risk Management Office and Business Process Management Office.
Inabata Declaration of Compliance manifests the company's commitment to compliance, while an internal whistle-blowing system has been introduced to monitor instances of suspected non-compliance.
Furthermore, we are working to ensure internal control within Inabata Group, including the subsidiaries, through enhanced audits by the Internal Audit Office and audit & supervisory board members.

Compliance

Inabata Declaration of Compliance

The management and employees of Inabata & Co., Ltd. (the "Company") shall ensure that we operate to our own high standards. This declaration of compliance describes and summarizes our commitment to fully observe the laws and regulations applicable to our activities.

  • 1. Respect for human rights

    We respect human rights and never discriminate against individuals based on race, gender, religion or nationality. In addition, we do not tolerate any form of harassment either inside or outside the office.

  • 2. Laws and Regulations

    We comply with all applicable laws and regulations that are relevant to our business and conduct business in an ethical and responsible manner.

  • 3. Import/export formalities

    We comply with relevant export and import procedures and do not import goods prohibited by laws or international treaties.
    In exporting goods or technologies subject to export controls, we always comply with applicable laws and regulations.

  • 4. Insider trading

    If information which may influence the judgment of investors becomes known to us, we refrain from trading stocks or securities of the subject company until such information becomes public.
    In trading stocks or securities, we comply with laws regarding insider trading as well as the internal regulations of the Company.

  • 5. Bribes and entertainment

    We never offer bribes or provide favors to domestic or foreign government officials or persons holding similar positions.
    Offering gifts to or entertaining those in the private sector shall always be carried out within the terms of relevant laws, regulations and socially accepted standards.

  • 6. Antisocial groups

    We never give in to antisocial groups, we refuse unreasonable demands and avoid easy monetary compromises.

  • 7. Environmental conservation

    We comply with relevant laws and regulations regarding environmental protection and maximize our efforts to reduce the burden imposed on the environment.

  • 8. Information management

    We shall use the Company's information or information disclosed by third parties, only for those purposes permitted by the relevant laws, and in an appropriate manner, and shall not use it for our personal benefit under any circumstances.
    Personally identifiable information shall not be used for any purpose other than that designated by the discloser, nor shall it be disclosed to third parties without justifiable grounds.

  • 9. Accounting procedures, tax returns, and disclosure of the Company's information

    We keep accurate accounting records, file proper tax returns and disclose material Company information in accordance with relevant laws and regulations.

  • 10. Conflicts with the Company's interests

    We shall not participate in any activity which conflicts with the Company's interests.
    We shall not use the Company's property, assets or information systems for any purpose other than that of pursuing the Company's business.

Inabata Group Global Tax Policy

Inabata & Co., Ltd.
March 26, 2018

The officers and employees of Inabata & Co., Ltd. and its subsidiaries (Inabata Group or "we") strive to comply with applicable laws and regulations of each country and region where Inabata Group conducts business, as well as with internal rules of Inabata Group. It is our social responsibility to pay the correct amount of tax in accordance with applicable laws and regulations of each country and region, and to ensure transparency. We believe that proper tax payment contributes to economic development of each country and region, which eventually leads to achieving Inabata Group's sustainable growth, and hence, increasing its corporate value in the long run.
Inabata Group is committed to minimizing tax risks as well as maintaining and improving tax compliance through the following measures:

  • 1. Compliance

    We will pay taxes properly complying with laws and regulations of each country and region, tax treaties, and international taxation rules set by the Organization for Economic Co-operation and Development (OECD). We will ensure transparency regarding taxation to tax authority of each country and region, as well as our stakeholders.

  • 2. Tax strategy

    We understand that avoidance of double taxation and appropriate use of tax incentives leads to increasing the corporate value. We will not engage in any transaction, which lacks substantial economic activity, for the purpose of tax avoidance.

  • 3. Transfer pricing

    Transfer pricing for transactions within Inabata Group shall be based on OECD's "arm's length principle," and in accordance with OECD Transfer Pricing Guidelines as well as laws and regulations of each country and region. Profits will be appropriately allocated based on the level of contribution among group companies in each country and region, such as risks undertaken for transactions and functions performed.

  • 4. Relationship with tax authorities

    We will build and maintain good relationship with tax authorities in countries and regions in which we operate, by consulting in advance such as to smoothly resolve tax issues, if any, and through disclosure of information conducted in an appropriate and cooperative way.

UK Tax Strategy

  • Introduction

    In compliance with requirements of U.K. Finance Act 2016, Schedule 19, para 16, Inabata & Co., Ltd. (IKJ) prepares and announces the following U.K. tax strategy concerning Inabata UK Ltd. (IKUK).

    IKUK is a limited company, domiciled in the U.K. and a wholly-owned subsidiary of IKJ, a listed company in Japan. IKJ is the ultimate parent of IKUK. IKUK is the sole U.K. entity in the Inabata Group headed by IKJ.

    This tax strategy, which is effective for IKUK's fiscal year ending March 31, 2018, was approved by the board of directors of IKJ on February 26, 2018.

  • Governance

    The board of directors of IKJ is responsible for the corporate governance, compliance as well as overseas accounting and tax operations of Inabata Group.

    Director & senior managing executive officer in charge of financial management of IKJ is responsible for Inabata Group's tax management. General manager of Financial Management Office of IKJ is responsible for the day-to-day management of U.K. tax.

  • Tax Risk Management

    IKJ takes a conservative approach to manage taxes and seeks to reduce tax risks within the range of complying with the relevant tax laws and regulations.

    IKUK's objective of its tax risk management is to comply with U.K. tax laws and regulations and pay the correct amount of tax by the due date.
    IKUK confirms the applicable tax treatment and reduces its tax risks by consulting with external independent professional firms. Advice is sought from them on the tax impact of significant transactions or any changes in business and company structure, as well as recent legislative changes. Furthermore, IKUK requests external advisors to prepare and review all tax returns.

  • Tax Planning

    IKJ is involved in IKUK's tax planning, which is aligned with IKUK's business activities and in compliance with U.K. tax rules and regulations.

    Inabata Group takes a conservative approach to tax risk and does not engage in purely artificial tax arrangements that lack economic substance. However, it evaluates business options in order to raise tax efficiency.

  • Relationship with HMRC

    IKJ is committed to the principles of openness and transparency with relevant tax authorities.

    IKUK engages with HM Revenue and Customs (HMRC), with honesty, integrity and mutual respect and works collaboratively to resolve disputes and obtain certainty. Day-to-day interactions with HMRC are managed by accounting & administration manager of IKUK under directions and guidance of Financial Management Office of IKJ.

Information Disclosure Guidelines

[Basic Policy]

The Company shall strive to improve the corporate value continuously while aiming to form an appropriate evaluation by society and the market by realizing highly transparent management through timely and appropriate information disclosure.

[Disclosure Information]

The Company shall perform timely and appropriate information disclosure based on the timely disclosure rules (Securities Listing Regulations and Enforcement Rules) of the Tokyo Stock Exchange, and laws and regulations such as Financial Instruments and Exchange Act and the Companies Act.
Moreover, the Company shall proactively disclose information not limited to legal requirements, that is deemed useful information for stakeholders, such as those regarding business operation and management policy.

[Methods of Disclosure]

The Company discloses information through the "Timely Disclosure Network (TDnet)" of the Tokyo Stock Exchange among other methods and strives to fairly and promptly disseminate information. After the information has been officially disclosed, the Company posts the information on its website.