August-Featured business affairs

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1. Accounting(Revision of Companies Act and External Director)

A bill to revise the Companies Act will be promulgated soon, coming into effect
sometime around spring 2015. In this revision, the following points are included:
(1)Obligatory disclosure of any reason for the non-appointment of any external
director,(2)The creation of a system of companies with the Audit and Supervisory
Committee, and (3)Tightening the requirements for external directors and outside
statutory auditors.

Meanwhile, 2,194 companies (64.4%) out of 3,408 of all listed companies have appointed
an external director according to “the state of appointment of external directors wi
thin the companies listed on the Tokyo Stock Exchange (TSE)” that was announced on Ju
ne 17 by the TSE.(Source:“Keiei Zaimu Magazine” No.3169)

2. Taxation (Reduction of the Effective Corporate tax rate)

The government adopted a reduction of the Effective Corporate tax rate at an extraordi
nary cabinet meeting last June. The current rate of 36% will be reduced within the 20%
-29% range over the next few years. The details of this decision will be finalized in
the outline of the 2015 tax reforms.(Source: “Zeimu Tsushin Magazine” No.3317)

3. Labor Management(Results of 2013 Regular On-site Inspections by Tokyo Labor Bureau)

The Tokyo Labor Bureau announced the results of the regular on-site inspections
conducted in 2013 by the Tokyo Labor Bureau and the 18 Labor Standards Inspection
Offices under its administration. (Regular on-site inspections: On-site inspections
of business entities conducted by Labor Standards Inspectors based on varied
information, industrial accident reports or the results of past instructions and
supervisions, etc.)Of the 9,304 inspections, violations were discovered in 6,612
cases, which accounts for as much as 71.1% of all inspections.

The most common violations were inadequate management of employees’ working hours, fo
llowed by unpaid overtime wages and failures to clearly indicate working conditions. T
here were many cases where unpaid overtime wages occurred as a result of the employers’
inappropriate management of the employees’ working hours. Once again, employers are
required to comply with the law in their management of labor.
(Ministry of Health, Labor and Welfare, “Results of Regular On-site Inspections 2013”)

4. This Week’s Words of Wisdom

“If you believe satisfactory management can be achieved by listening to your staff’s
desires and encouraging them to follow them, then you are merely in a kindergarten of
democracy.” (Anonymous)

Once I heard that the ideal type of leader is a consensus-seeker who is able to tie
together varying opinions and I felt uneasiness with this idea. Although it is
important to listen to the opinions of others, I think the obligation of a leader is
to make responsible decisions for the good of others.

The referring page is Nagamine & Mishima JC Accounting K.K.

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