Glossary
IR
IR stands for Investor Relations. It refers to the overall activities of publicly traded companies to continuously provide information necessary for the investment judgment of shareholders and investors in a fair and timely manner.
With IR activities, it is important to not only disclose legally required information such as annual securities reports and financial results but also discretionary information. Specific activities include holding of briefings on financial results and study tours to plants, facilities, etc. and individual interviews with institutional investors. Recently, with individual and foreign investors in mind, importance is attached to the preparation of tools such as business reports, shareholder newsletters and annual reports, as well as IR activities using the Internet.
ISMS
ISMS stands for Information Security Management System.
It is a comprehensive framework for organizations such as companies to properly manage information and maintain secrecy, referring to a total risk management system that includes not only security measures for computer systems but also a basic policy when handling information (security policy), specific plans based on the policy, the implementation and operation of the plans and the periodical review of policy and plans.
There is an evaluation and authorization system called the “ISMS Conformity Assessment Scheme,” a system under which a third party verifies whether an organization maintains an ISMS.
IPO
IPO stands for Initial Public Offering.
It is to newly make a public offering (to issue new shares when a company is listed), and usually refers to listing on a stock exchange.
Incidentally, when a company that has already gone public or registered its stock as a Green Sheet issue raises funds through public offering, it is simply called public offering (PO), without “Initial” (I).
SR
SR stands for Shareholder Relations.
While public relations activities aimed at investors in general, including shareholders, are called investor relations (IR), SR activities refer to various activities conducted in order to establish a relationship of mutual trust between a company and its shareholders.
XBRL
XBRL stands for eXtensible Business Reporting Language.
It is an Extensible Markup Language (XML)-based language standardized to prepare, distribute and utilize information for various financial reports. It makes the preparation, distribution and reuse of electronic financial information possible, regardless of software and platforms. Its specifications have been established by XBRL International.
EDINET
Electronic Disclosure for Investors’ NETwork
It refers to the electronic disclosure system with regards to documents to be disclosed pursuant to the Financial Instruments and Exchange Act, including annual securities reports.
This system is provided by the Financial Services Agency as part of its administrative services. It enables users to read disclosure documents specified by the Financial Instruments and Exchange Act, which have been submitted by companies, etc., on the website.
Corporate governance
Corporate governance is a mechanism to soundly manage a company. It is believed that corporate governance enables companies to “increase profit through the right methods and manage the companies soundly,” “establish a check system for monitoring and ensuring fairness and transparency of management,” “construct a system for information disclosure and fulfillment of accountability” and “attach importance to shareholders in management” when they perform business activities.
Conventionally, there have been arguments over “To whom does the company belong to?” Now, the way corporate governance should be in Japan is being reconsidered.
Compliance
Observation and upholding of various regulations, laws and social norms when a company conducts management activities.
CMS
CMS stands for Content Management System. It is a system for editing and managing content on websites.
The introduction of CMS makes it possible for persons without expertise to build and update websites within a short timeframe, since much of the editing and managing work can be simplified.
Segment information
Segment information is financial information separated according to the type of business, location and overseas sales.
When a company prepares consolidated financial statements, it is obligated to disclose segment information so that stakeholders can correctly judge past performance, etc. of the corporate group.
EDINET Taxonomy
A collection of rules when EDINET accounting terms are expressed by XBRL. A hierarchical data dictionary.
Disclosure
An act of a company to publicly disclose information on the status of its activities, the current state of management, etc. in order to protect investors and creditors.
Such acts include those stipulated by the Companies Act, those based on the Financial Instruments and Exchange Act (timely disclosure) and IR activities by companies.
Electronic public notice
Public notices posted by stock companies, etc. on their websites.
Traditionally, the publication of public notices was limited to official gazettes and daily newspapers. However, websites were added to the methods of public notices pursuant to the “Act for Partial Revision of the Commercial Code, etc. for Introducing a System of Electronic Public Notice,” which was enforced on February 1, 2005. As a result, it has become possible to place public notices easily and at a lower cost.
When a company places electronic public notices, the company needs to make a statement to that effect in its Articles of Incorporation. In addition, the company is obligated to have a research institution registered with the Minister of Justice make investigations to prove that public notices are placed properly by the company.
Internal control
Internal control refers to “controlling” business activities within an organization, for the purpose of efficiently performing business activities through: 1) compliance with laws and regulations, 2) conservation of assets, and 3) preparation of proper financial statements.
Finance
Finance refers to the procurement of funds by companies. Methods of finance include borrowings from banks and other institutions and procurement of funds through the issuance of shares and bonds.
Finance through issuance of shares is called equity finance, and finance through borrowings from banks and issuance of bonds is called debt finance.
Flowchart
A flowchart refers to a table prepared by schematizing business procedures and work processes by using standard symbols determined in advance. Schematized expression makes it possible to express more vividly the “interrelation between forms,” “business operations in addition to these,” and the “coherence of work” compared to text and other methods.
Generally, flowcharts are used in analysis of the current status of business operations, design of electronic data processing (EDP) systems, etc. However, a company making preparations for listing is required to present flowcharts concerning accounting work in Part II. Even in the case where a company aims to go public on a stock market that does not require submission of Part II, flowcharts are often required to be submitted for underwriting screening by securities companies in order to confirm whether internal check functions properly and whether operational procedures conform to laws, regulations, etc.
Legal public notice
Under the Companies Act, public companies are obligated to publicly announce the details of settlement of accounts, issuance of new shares, stock splits, etc. in official gazettes and others.
Legal public notice is aimed at making important managerial matters known to shareholders and creditors. If a company fails to place legal public notices, a non-penal fine of ¥1 million or less will be imposed. Publication of legal public notices on websites has been allowed since February 2005.
Universal template
A universal template is a regular, all-purpose data format that can be used by partially altering fixed patterns.
With the use of a universal template, relevant documents can be prepared within a short timeframe.
REIT
REIT stands for Real Estate Investment Trust.
REITs are listed real estate investment trusts that can be traded on markets in the same way as stocks. Japanese REITs are called J-REITs.
It is a structure under which office buildings, condominiums, commercial facilities and other real estate are purchased by investment funds collected from investors and their rent income is distributed to the investors.
While REITs are traded on stock markets in the same way as stocks, they are a type of investment trust.