Omron 2014 Annual Report Download - page 49

94 Omron Corporation Integrated Report 2014 95
Managements Report on Internal Control
NOTE TO READERS:
The following is an English translation of the managements report on internal control over financial reporting (ICFR) filed under the Financial
Instruments and Exchange Act of Japan. This report is presented merely as supplemental information. There are differences between an
assessment of ICFR under the Financial Instruments and Exchange Act (
ICFR under FIEA) and one conducted under the standards of the
Public Company Accounting Oversight Board (United States) (
ICFR under PCAOB).
In an assessment of ICFR under FIEA, there is detailed guidance on the scope of an assessment of ICFR, such as quantitative guidance on
business location selection and/or account selection. In an assessment of ICFR under PCAOB, there is no such detailed guidance. Accordingly,
regarding the scope of assessment of internal control over business processes, we selected locations and business units to be tested based
on annual consolidated net sales (after the elimination of transactions between consolidated companies), and companies with net sales
of approximately two-thirds of the total amount on a consolidation basis were selected as
significant locations and/or business units. At
selected
significant locations and/or business units, we included in the scope of assessment, business processes leading to sales, accounts
receivable and inventories as significant accounts that may have a material impact on our business objectives. Further, in addition to selected
significant locations and/or business units, we also included in the scope of assessment, as business processes having greater materiality,
business processes relating to (i) greater likelihood of material misstatements and/or (ii) significant accounts involving estimates and the
managements judgment and/or (iii) a business or operation dealing with high-risk transactions, taking into account their impact on the
financial reporting.
Management’s Report on Internal Control
1. Matters relating to the basic framework for internal control
over financial reporting
Yoshihito Yamada, Representative Director and President; and
Yoshinori Suzuki, Representative Director and Executive Vice
President and CFO are responsible for designing and operating
effective internal control over financial reporting of Omron
Corporation (the
Company) and have designed and operated
internal control over financial reporting in accordance with the
basic framework for internal control set forth inThe Standards
and Practice Standards for Management Assessment and Audit
Concerning Internal Control Over Financial Reporting (Council
Opinion)released by the Business Accounting Council.
The internal control is designed to achieve its objectives to the
extent reasonable through the effective function and combination
of its basic elements. Therefore, there is a possibility that
misstatements may not be completely prevented or detected
by internal control over financial reporting.
2. Matters relating to the scope of assessment, the basis date
of assessment and the assessment procedures
The assessment of internal control over financial reporting
was performed as of March 31, 2014 which is the end of this
fiscal year. The assessment was performed in accordance with
assessment standards for internal control over financial reporting
generally accepted in Japan.
In conducting this assessment, we evaluated internal controls
which may have a material effect on our entire financial reporting
on a consolidation basis (
entity-level controls) and based on
the results of this assessment, we selected business processes
to be tested. We analyzed these selected business processes,
identified key controls that may have a material impact on the
reliability of the Companys financial reporting, and assessed the
design and operation of these key controls. These procedures
have allowed us to evaluate the effectiveness of the internal
controls of the Company.
We determined the required scope of assessment of internal
control over financial reporting for the Company, as well as its
consolidated subsidiaries and equity-method affiliated companies,
from the perspective of the materiality that may affect the
reliability of their financial reporting. The materiality that may affect
the reliability of the financial reporting is determined by taking into
account the materiality of quantitative and qualitative impacts on
financial reporting. In light of the results of assessment of entity-
level controls conducted for the Company and its consolidated
subsidiaries, we reasonably determined the scope of assessment
of internal controls over business processes. Consolidated
subsidiaries and equity-method affiliated companies determined
to have an insignificant quantitative and qualitative influence on
the reliability of financial reporting are not included in the scope
of assessment of entity-level controls.
Regarding the scope of assessment of internal control over
business processes, we selected locations and business units
to be tested based on the previous years consolidated net sales
(after the elimination of transactions between consolidated
companies), and the companies whose net sales reaches
two-thirds of total amount on a consolidation basis were
selected as
significant locations and/or business units. At
selectedsignificant locations and/or business units, we included
in the scope of assessment, business processes leading to
sales, accounts receivable and inventories as significant accounts
that may have a material impact on the business objectives
of the Company. Further, in addition to selected significant
locations and/or business units, we also included in the scope of
assessment, as business processes having greater materiality,
business processes relating to (i) greater likelihood of material
misstatements and/or (ii) significant accounts involving estimates
and the managements judgment and/or (iii) a business or
operation dealing with high-risk transactions, taking into account
their impact on the financial reporting.
3. Matters relating to the results of the assessment
The above assessments determined that the Companys internal
control over financial reporting was effective as of the last day of
the fiscal year under review.
4. Additional notes
No material items to report.
5. Special notes
No material items to report.
June 25, 2014
Internal Control Section
Yoshinori Suzuki
Representative Director and
Executive Vice President and CFO
Omron Corporation
Yoshihito Yamada
Representative Director
and President
Omron Corporation
About Omron Where Were Headed Corporate Value Initiatives Corporate Value Foundation Financial Section
IR Activities Focusing on Engagement
With its investor relations (IR) policy emphasizing interactive communication with investors through
engagement, Omron provides timely and accurate information on the Companys business conditions
and management policies. Omron also aims to reflect investors comments in its management
strategies to the fullest extent possible to maximize corporate value.
Activities in Fiscal 2013
Input and feedback obtained through these activities
are relayed via the IR Department to the Companys
senior management.
Based on such feedback, Omron is accelerating
initiatives to improve the efficiency, transparency, and
effectiveness of management. For example, we utilized
stakeholder input in evolving ROIC-based management
and revising executive compensation systems.
As an example of improvements, we introduced the
shareholder benefit program in fiscal 2013. Going forward,
we will continue to draw on feedback of stakeholders to
help formulate various management strategies.
Disclosing Information through IR Website
We employ an IR site and various other tools to
support engagement with shareholders and other
investors by disclosing information on product
development and sales activities tailored to specific
markets as well as information on operating
performance. Our IR site features a message from the
president, explanations of our strategies and operating
performance, and video footage. IR materials are made
available in both Japanese and English simultaneously
to realize timely disclosure and to minimize disparities
between the information available to investors in
Japan and investors overseas.
Integrated Report 2013 received the best integrated
reporting award from the World Intellectual Capital
Initiative
（WICI） Japan, the Japanese branch of the WICI.
This report also received a commendation in the
Nikkei Annual Report Awards 2013, sponsored by
Nikkei Inc.
In the 2013 Vision Awards held by League of
American Communications Professionals LLC, this
report received a total of five awards, including the
platinum award in the Equipment, Machinery &
Instruments industry category.
The Securities Analysts Association of Japan
presented the Company with the 2013 Award
for Excellence in Corporate Disclosure in the
Electric / Precision industry category, selecting
Omron as No.1 from among 23 other companies
in this category.
As of July 2014
Asia Pacific (AP)
Shareholders’ meeting held on June 20, 2013
Percentage of voting
rights exercised 85.5%
772
Number of attending
shareholders
Communications with institutional investors
Private meetings and teleconferences between the
president and investors in Japan and overseas, IR
conferences, tours of plants in Japan and China
(Shanghai and Guangzhou), observation of
technological exhibitions, and other activities
Number of direct interactions
with investors
932
Communications with individual investors
IR events, such as corporate presentations
and investor fairs
Number of participants
Number of events
2,140
27
■ Inclusion in SRI Indexes
Financial Section