Internal Control System

Basic Policy on Internal Controls

To realize the KITZ’ Statement of Corporate Mission, which expresses its management philosophy, KITZ has established the Basic Policy on Internal Controls to realize sound and solid Group management foundations, and it has established and operates an internal control system based on the Companies Act and the Enforcement Regulations to the Companies Act.

Internal Control System

To realize sound and solid Group management foundations, KITZ has established an internal control system based on the Companies Act and on the Financial Instruments and Exchange Act.

Based on the important matters of internal controls systems as stipulated in the Companies Act, including risk management, compliance with laws and regulations, fair business operations, and appropriate financial reporting, we strive to ensure a structure for promoting risk management and compliance and properly assessing and addressing all operations related to business activities, as well as maintaining and operating a structure to prevent misstatements in financial reports.

In addition, based on the important matters identified in the Financial Instruments and Exchange Act, such as the efficacy and efficiency of operations, reliability of financial reports, compliance with laws and regulations in business activities, and asset preservation, we carry out internal controls on financial reporting compliant with the basic framework of internal controls identified in the Standards and Practice Standards for Management Assessment and Audit concerning Internal Control Over Financial Reporting (Council Opinions) issued by the Business Accounting Council, and the audit and supervisory board, the accounting auditor, and the Internal Audit Office cooperate closely to assess the efficacy of internal controls Companywide.

Internal audits

Internal audits are conducted through business auditing and the internal control audits at KITZ and Group member companies by the Internal Audit Office to audit and check on the functions of internal controls and monitor the state of internal controls and the propriety of business processes Groupwide. The results of the audits are communicated to the president, audit and supervisory board members, and related sections, and follow-up is conducted regarding corrective measures. These are reviewed closely by the Internal Control Committee and reported to the board of directors periodically. In addition, auditing is conducted regarding the important risks faced by each Group member company to elucidate the risks inherent in each section of the Group member company and to avoid and mitigate risks and thus to provide support for business improvements and building structures for legal and regulatory compliance.

Establishment of various committees

To increase the efficacy of the operation of the internal controls system, KITZ has established various specialized committee organizations on such topics as internal control, crises response, compliance, risk management, sustainability promotion, quality assurance, information security, personal information protection, environment, safety and health, investment and loans, security trade, AEO trade, and corporate identity (CI). In this way, we assess, control, and improve important matters related to appropriate decision-making in Group management, as well as carrying out other appropriate control activities.

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