Annual Report 2012


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IBELIEVETHATCORPORATEGOVERNANCE,COMPLIANCEANDRISKMANAGEMENTAREWITHOUTQUESTIONTHEFOUNDATIONOFACOMPANY.EXAMPLESOFPREVIOUSLYHIGH-flYINGCOMPANIESSUDDENLYPLUNGINGINTOCRISISWHENSCANDALSCAMETOLIGHTARETOONUMEROUSTOMENTION.WHENTHISOCCURS,THESHAREHOLDERS,BUSINESSPARTNERS,EMPLOYEESANDOTHERSTAKEHOLDERSSUFFERGREATINCONVENIENCEANDTROUBLEWITHNOPRIORWARNING.CORPORATEGOVERNANCEISAFRAMEWORKFORPREVENTINGSUCHSITUATIONS,ANDTHEDEVELOPMENTANDIMPROVEMENTOFACORPORATEGOVERNANCESTRUCTUREISAKEYRESPONSIBILITYOFDIRECTORS.CORPORATEACTIVITIESENTAILVARIOUSRISKSOTHERTHANTHERISKOFSCANDAL,ANDITISIMPERATIVETHATCOMPANIESFORESEETHESERISKSAHEADOFTIMEANDCONSIDERCOUNTERMEASURESBEFORERISKSEVENTUATE.WEPROVIDEANOVERVIEWOF“K”LINE’SRISKMANAGEMENTSYSTEMINTHISREPORT.ALTHOUGHRISKMANAGEMENTACTIVITIESDONOTCONTRIBUTEDIRECTLYTOEARNINGS,THEYMINIMIZETHERISKOFTHEGROUPSUDDENLYfiNDINGITSELFINACRISIS,ANDIBELIEVETHATTHEYAREASOURCEOFSTAKEHOLDERCONfiDENCEIN“K”LINE.THECOMPANYRENEWEDITSBOARDOFDIRECTORS’RESOLUTIONCONCERNINGTHEINTERNALCONTROLSTRUCTUREINMARCHOFTHISYEAR,ADDINGA“SYSTEMTOENSURETHERELIABILITYOFFINANCIALREPORTING”ANDA“BASICPOLICYFOREXCLUSIONOFANTI-SOCIALFORCESANDSTATUSOFDEVELOPMENTOFASYSTEMFORTHEEXCLUSIONOFANTI-SOCIALFORCES.”ICHAIRMEETINGSOFTHEBOARDOFDIRECTORSINMYCAPACITYASCHAIRMANANDDIRECTOR.SINCEAPRIL2011,IHAVECEASEDTOSERVECONCURRENTLYASANEXECUTIVEOFfiCERANDHAVESINCEAPPLIEDMYSELFTOSERVICEONTHEBOARDOFDIRECTORSFROMAPOSITIONONESTEPREMOVEDFROMDAILYBUSINESSOPERATIONS.ONTHEBOARDOFDIRECTORS,ISTRIVETOENSURETHATTHEOUTSIDEDIRECTORSANDOUTSIDEAUDITORSAREABLETOMAKEAPPROPRIATEJUDGMENTSBYPROVIDINGCOMPREHENSIVEMATERIALSFOREACHPROPOSALPUTBEFORETHEBOARD.INFACT,THEDIRECTORSANDCORPORATEAUDITORSACTIVELYEXPRESSTHEIRVIEWS,INCLUDINGUNVARNISHEDCRITICISMATTIMES.THEKEYSTONEOFCORPORATEGOVERNANCEISABOARDOFDIRECTORSWHEREUNWARRANTEDOPTIMISMANDPESSIMISMAREELIMINATEDASFARASPOSSIBLEANDMATTERSARECALMLYANDFULLYDISCUSSEDINANOPENATMOSPHERE,ANDIWILLKEEPTHISINMINDINOPERATINGTHEBOARDOFDIRECTORS.DIRECTOR,CHAIRMANHIROYUKIMAEKAWATHEFORMULATIONANDIMPROVEMENTOFACORPORATEGOVERNANCESTRUCTUREISAKEYRESPONSIBILITYOFDIRECTORS.MANAGEMENTSYSTEM33ANNUALREPORT2012


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