Corporate Governance Policy

POLICY STATEMENT

The Board is committed to high standards of corporate governance.  Although the Company ceased to be obliged to comply with the UKLA's Listing Rules in August 2007, the policy of the Company continues to be to apply the principles and comply with the provisions set out in section 1 of the Combined Code on Corporate Governance to the extent that they are proportionate and relevant to the Company's circumstances, taking into account the size and complexity of the Company and the nature of the risks and challenges it faces.  

The Company is a wholly-owned subsidiary of Hitachi Capital Corporation ('HCC'), which is a subsidiary of Hitachi Ltd. Hitachi Ltd is listed on the New York Stock Exchange and therefore subject to the requirements of the Sarbanes-Oxley Act ('SOX'). Consequently, HCC requires the Company to comply with SOX and the Company' s policy is to use a suitable framework approved by the US Securities and Exchange Commission for complying with the requirements to report on internal controls over financial reporting as set out in section 404 of SOX. The Company currently uses 'Internal Control Guidance for Directors on the Combined Code' produced by the Turnbull Committee (the 'Turnbull Guidance') as such a framework.
 
CORPORATE GOVERNANCE FRAMEWORK

In discharging their responsibilities to ensure that the Group complies with this policy, the Board have set in place the following framework:an approved Schedule of Matters which are reserved for decision by the Board to ensure it maintains full and effective control over decisions of major strategic and operational importance;

• an independent non-executive director to provide balance and additional experience to the Board;
• an Audit and Risk Committee, responsible (amongst other things) for reviewing the work of the external and internal auditors and the effectiveness of the Group's internal controls and risk management systems.
• a Disclosure Committee, comprising the Executive Directors, whose function is to ensure that any matter likely to have a material effect on the financial performance of the Company is communicated to the Board, Hitachi Capital Corporation and the Trustees of the Group Pension Scheme.
• documented procedures, which are regularly reviewed and updated;
• a clear organisation structure, with defined and understood lines of responsibility, delegation of authority, segregation of duties and authority limits and job descriptions;
• management information, available to appropriate individuals which is both timely and accurate, so as to enable decisions to be taken in an effective manner;
• monthly reviews of actual performance against budget, with reasons for differences analysed.

Approved by the Board of Directors of Hitachi Capital (UK) PLC