JAPAN Law and Practice Contributed by: Hiroshi Mitoma, Tomohiko Iwasaki and Kosuke Hamaguchi, Nagashima Ohno & Tsunematsu
reported to the shareholders (in the case where the company’s accounting auditor has issued an unqualified opinion as to the company’s finan - cial statements and other conditions are met), at
• a summary of the company’s corporate gov - ernance system, internal audit and statutory audit system, outside directors and statu - tory auditors and their relationships with the company; and • details regarding compensation, corporate indemnification and D&O insurance. Publicly traded companies also need to disclose in annual securities reports certain information regarding corporate governance. In addition, the TSE Regulations require that each listed company submit a corporate gov - ernance report based on the Corporate Govern - ance Code. In the corporate governance report, each listed company must explain, among other matters: • its basic policy on matters included in the Corporate Governance Code established by the Tokyo stock exchange; • the reasons for non-compliance with any of the principles of the Corporate Governance Code (if applicable); • any disclosures required under the Corporate Governance Code; • the composition of shareholders (eg, foreign shareholders, top ten largest shareholders, controlling shareholders, if any); • the measures for protection of minority share - holders and group management policy where a listed company has a listed subsidiary, par - ent company, listed downstream affiliate, or upstream affiliate; • its corporate governance system, including appointment of outside directors; • the initiatives with respect to shareholders or other stakeholders; and • its internal control system.
annual shareholder meetings. Requirements Under the FIEA
Publicly traded companies (in this context, listed companies and other companies that are required to file annual securities reports under the FIEA) are required to prepare consolidated financial statements as well. In addition, under the FIEA, a publicly traded company is required to submit an annual securities report, which must contain audited financial statements (con - solidated and non-consolidated) and be filed within three months of the fiscal year end. A pub - licly traded company is also required to submit a semi-annual report, which contains summary financial information and must be filed within 45 days of the semi-annual end. Financial informa - tion contained in semi-annual reports is required to undergo semi-annual review by the account - ing auditor. Requirements Under the Stock Exchange With a view to providing more timely financial information to public shareholders, the TSE Reg - ulations also require that Japanese listed com - panies publish annual and quarterly summaries of consolidated financial results. Accounting auditors’ review of financial information con - tained in such summaries is voluntary subject to certain exceptions. The Tokyo stock exchange requests that such summaries be made public within 45 days of the quarterly end. 6.2 Disclosure of Corporate Governance Arrangements Corporate governance arrangements are gener - ally required to be disclosed in business reports. Matters to be disclosed include:
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