Internal Control

Asahi Glass decided on its corporate policy over internal control at the Board of Directors meeting held in May 2006. Subsequently, we partially revised the policy reflecting the changes of our situation, including the establishment of the AGC Group Code of Conduct in October 2008.

Basic items for internal control

Internal Control Measures for Financial Reporting

As for internal control over financial reporting, we have built up a mechanism to establish, operate, and assess internal controls pursuant to the Financial Instruments and Exchange Law, promulgated in June 2006. Using this mechanism, we started the full implementation of internal control over financial reporting in fiscal 2009.

Risk Management

Based on its corporate policy over internal control, the AGC Group makes it a rule to identify important risk factors and monitor and discuss the state of risk control periodically at the meetings of the Management Committee and the Board of Directors.
In identifying important risk factors, we conduct questionnaire surveys across the Group to create a risk map that indicates the impact and frequency of possible risks, which we use for risk assessment. Then the Management Committee and the Board of Directors discuss the factors at their meetings, and the related organizations formulate the action plans to implement the Plan, Do, Check, and Act (PDCA) cycle for the continuous improvement of their risk control levels.
These measures are designed to raise the risk consciousness of the Group members, to prevent the occurrence of problems, and, in the event of their actual occurrence, to deal with the problems in a prompt and appropriate manner to minimize their impact.

Formulation of a business continuity plan (BCP)

Among important risk factors which might cause large-scale accidents and disasters, we are implementing measures to formulate and operate business continuity plans (BCPs). Specifically, we are taking countermeasures against earthquakes in Japan (see Topic below) and new strains of influenza.*1 In preparation against the new flu, we have organized a project team to examine necessary measures.

*1 The new flu is a disease caused by flu viruses from animals, in particular from birds. The viruses do not usually infect humans, but some viruses mutate so that they can infect humans, grow in humans, and be efficiently passed from human to human.

Topic
Preparing against Earthquakes by Formulating Business Continuity Plans (BCPs) (Japan)

Discussing the optimal action to be taken in reference to the layout of the plant

In preparation for potential large-scale accidents and disasters, we need to formulate and operate business continuity plans (BCPs), including plans to ensure the supply of materials and delivery of products in the event of emergencies, in addition to planning measures to minimize damage to our employees and facilities. In Japan, the AGC Group has been fostering the formulation of BCPs against earthquakes in addition to implementing seismic diagnosis of and reinforcement measures for plants and other facilities in a planned manner.
In December 2008, we held a mock disaster exercise, simulating an earthquake in the Tokai area, where a large-scale earthquake is likely to take place. In the exercise, the in-house organization made a series of decisions on how to deal with the earthquake within a short time and then evaluated the results of their actions, with a view to improving the effectiveness of our BCPs. Participants in the exercise experienced the difficulty of promptly and appropriately dealing with the changes made to the situation every few minutes.