Annual Report 2013

INTERNAL CONTROL SYSTEM: COMPLIANCE AND RISK MANAGEMENTINTERNAL CONTROL SYSTEM FUNDAMENTALSCosmo Oil has established systems to ensure effective risk management, internalauditing, and auditing by corporate auditors. The Cosmo Oil Group CSRPromotion Committee, which is under the direct supervision of the president,manages the Group’s CSR initiatives and internal controls. The Committee alsoshares information concerning CSR management with affi liates.• Financial Reporting SystemSince April 2008, it has been mandatory for all corporations in Japan to complywith new standards for the evaluation and auditing of internal controls overfi nancial reporting in accordance with Japan’s Financial Instruments and ExchangeLaw. An evaluation of internal controls relating to the reliability of fi nancialreporting as required by the Law found that as of March 31, 2013, the internalcontrol systems of the Company and its subsidiaries were “effective.” Anevaluation by the Company’s independent auditor found its internal controlswere appropriate.• Corporate Ethics TrainingThe Cosmo Oil Group conducts annual corporate ethics training for Groupemployees with the objective of maintaining a high level of awareness ofcorporate ethics. In addition to providing training tailored to job levels, Groupcompany presidents lead training sessions following specifi c themes at eachaffi liated company.In fi scal 2012, President Morikawa gave a keynote address to all businesssegments entitled Top Commitment, and discussed recent initiatives in corporateethics. The Group also concentrated on raising awareness of informationmanagement among all of the employees through training sessions oninformation security and the appropriate use of information systems. Ethicstraining sessions were held for sales staff concerning the Antimonopoly Act andthe Act Concerning the Maintenance of Quality of Gasoline, etc. In addition,ethics training sessions specifi cally designed for engineers were held again thisyear following the theme “creating safety” with the aim of raising awareness ofsafety issues. The total number of participants in fi scal 2012 was 3,798.Independent Audit Company RemunerationRemunerationRemuneration Payable to the Independent Audit Company for Work Undertakenin Connection with the Fiscal Year under Review ¥120.0 millionTotal Amount of Monies and Other Financial Benefi ts Payable by the Companyand Its Subsidiaries ¥211.0 million* A breakdown and clear classifi cation of the amount payable in connection with audits in accordance with Japan’s Companies Actand remuneration for audits in accordance with Japan’s Financial Instruments and Exchange Act with respect to the audit agreementconcluded between the Company and Independent Auditor have not been provided. Taking into consideration the practicaldiffi culties in providing such a breakdown and classifi cation, the amount of remuneration payable in connection with the fi scal yearunder review is provided as a sum total.