Copyright(C) 2023 NIPPON KANZAI Holdings Co.,Ltd.

Basic Concept Concerning Corporate Governance

Based on the understanding that ensuring the soundness, transparency, and efficiency of management are directly linked to increasing corporate and shareholder value, we believe that establishing strong corporate governance is a fundamental requirement for earning the trust of shareholders and other stakeholders, as well as earning their trust in society. We have implemented the following measures to strengthen corporate governance.

State of Implementation of Corporate Governance Measures

Board of Directors

The Board of Directors makes decisions on matters stipulated by law and important matters related to group management. The Board of Directors is also positioned as the body to supervise the execution of business, and is working to enhance reports from each director in particular.

Directors (excluding some members of the Audit and Supervisory Committee) also attend management meetings to share information on business execution, thereby ensuring that management control functions work. At the same time, the Company strives to “accelerate” and “strengthen monitoring and supervision” in the execution of business.

Audit and Supervisory Committee

We are a company with an Audit and Supervisory Committee, and all Audit and Supervisory Committee members are outside directors in order to increase the transparency of management.

In addition to the regular monthly meetings, the Audit and Supervisory Committee is held as necessary to share information among Audit and Supervisory Committee members. In addition, each Audit & Supervisory Committee member attends important meetings such as meetings of the Board of Directors, thereby ensuring adequate oversight of the directors’ business execution.

Further, the Audit and Supervisory Committee receives reports from the internal audit department, etc. regarding the establishment and operation of the internal control system and the results of audits, and when it is deemed necessary, requests the internal audit division, etc. to conduct investigations, etc. In this way, the Audit and Supervisory Committee has established a system that enables them to work together effectively.

Internal audit and internal control functions

As an independent organization under the Audit and Supervisory Committee, we have established the Internal Audit Office, which is the internal audit department of our group companies, and the Internal Control and Group Risk Management Office, which is an internal control implementation department.

In accordance with laws and regulations, as well as in-house regulations, the Internal Audit Office conducts business audits in cooperation with the Audit and Supervisory Committee and the Accounting Auditor, and the Internal Control and Group Risk Management Office builds and provides guidance on internal control systems and conducts internal control assessments.

The results of audits and evaluations are reported to the president as appropriate, and efforts are made to enhance and improve corporate governance.

Status of attorneys at law, accounting auditors, and other third parties

With regard to the involvement of attorneys at law and accounting auditors in corporate governance, we consult with legal counsel on important legal issues, and consider and implement to enable appropriate responses.

In addition, we have an audit contract with PricewaterhouseCoopers Aarata LLC. In addition to regular accounting audits and internal control audits related to the Financial Instruments and Exchange Act, we take every possible measure to ensure compliance with laws and regulations by having them check important accounting issues and internal control issues as necessary.

Information disclosure

From the viewpoint of improving management transparency, we are making efforts to make timely disclosures to our stockholders and to the stock market, including earlier disclosures of financial results, while further enhancing and strengthening our IR activities.

We are also actively and timely disclosing management information not only through statutory disclosure but also through our own website and other means.