Internal Control Through Mutual Departmental Audits and Subsidiary Oversight

「Although the audit results are not reported to the Audit & Supervisory Board, they are reported through the internal control report to the Management Committee, which includes the full-time audit & supervisory board member as a member. Based on whether there are any issues and on future challenges, instructions for improvement are issued and opinions exchanged. The results are also reported to the Board of Directors, which all audit & supervisory board members attend.」

「With regard to governance of our subsidiaries, we dispatch directors and audit & supervisory board members from our company, who attend the subsidiaries’ board meetings. When it is determined that there may be a risk of management problems, a system is in place to conduct focused internal audits of the entire subsidiary or specific departments through the directors and audit & supervisory board members dispatched by our company, enabling sufficient management and oversight of the subsidiaries. In addition, a business briefing is held once a month for members of our Management Committee, providing a system for monitoring business conditions.」

「We have established an internal audit framework under which representatives of each department audit other departments. Internal audits are conducted regularly covering the operations of all internal departments, including operating conditions, the effectiveness and accuracy of business execution, and compliance with laws and regulations.」