Internal Control

1 | Internal Control Systems

The Ryohin Keikaku Group has established the "Basic Policy for the Development of an Internal Control System"; in line with this basic policy, it has developed internal control systems for compliance with laws and regulations, operational efficiency, reliability of financial reporting, and asset protection; the Group operates these systems.

2 | Internal Audit and Operation System

Our company has established an Audit Office as its internal audit division, which currently consists of eight members. The Internal Audit Office audits compliance with internal regulations and manuals at the stores and headquarters, as well as the appropriateness and effectiveness of all business activities and procedures, and this office also reports regularly to the representative director and Board of Directors.

3 | Risk Management System

Risk management in the Ryohin Keikaku Group is overseen by the Compliance and Risk Management Committee under the supervision of the Board of Directors.

The Compliance and Risk Management Committee, chaired by a director of the company, meets regularly to gather information on compliance and risks and to further discuss important issues. Matters discussed by the Compliance and Risk Management Committee are regularly reported to the President and Representative Director and Board of Directors, which will also be communicated to the directors and corporate auditors. The Compliance and Risk Management Committee is independent of the Board of Auditors, and is chaired by a different person from the Chairman of the Board of Auditors.

4 | Auditing System

As an independent organization entrusted by shareholders, corporate auditors are responsible for auditing the execution of duties by the directors to ensure the sound and sustainable growth of the company and to establish a quality corporate governance system that lives up to the trust of society. In order to fulfill their responsibilities, corporate auditors shall attend meetings of the Board of Directors and other important meetings, review the deliberations of the Board of Directors and the content of reports, investigate the status of the company's operations and assets, and take the necessary measures in a timely manner. Auditors meet regularly with the representative director to confirm his management policies and to exchange opinions on issues that need to be addressed by the company, risks surrounding the company, and other important auditing matters.