Audit and Supervisory Board

This body reviewed risks and issues in the five areas, namely (1) Directors, (2) Business execution, (3) Subsidiaries, (4) Internal audit, and (5) Accounting audit, and formulated annual activity plans. Outline of audit activities in each of these areas and division of duties of Audit & Supervisory Board Members are as below. Audit activities are mainly carried out by full-time Audit & Supervisory Board Members, and the contents are shared in a timely manner at the Audit & Supervisory Board meetings. Outside Audit & Supervisory Board Members conduct audits with full-time Audit & Supervisory Board Members and make recommendations, taking advantage of their respective expertise and backgrounds, and express their opinions from the independent standpoint. Information obtained and issues identified through audit activities are provided as feedback to management through information sharing meetings, etc., to promote actions for improvement.

●: In charge
□: Voluntarily or partly in charge

The Audit & Supervisory Board considered anticipated risks in light of changes in both the internal and external environments, in addition to the Company's business activities for the fiscal year under review. As a result, we have established the following audit policy.

We will monitor and verify the “acceleration of growth” and “impact on governance structure and internal control system” through the Corporate Value Improvement Project, in addition to the effectiveness of various measures, the development of corporate culture, and the status of response to issues toward the transformation into a digital services company. In particular, we will closely monitor the impact of the promotion of the human capital strategy on the control environment through interviews with employees.

The areas of focus, activities, achievements, and recognition of the Audit & Supervisory Board on each area of focus for the current fiscal year are as follows.

(Recognition of the Audit & Supervisory Board)

We confirmed that efforts to improve the structure for a digital services company are progressing, including a review of the business portfolio and R&D optimization. Toward “Acceleration of Growth,” it is important to allocate resources, including human capital, and create further synergies between acquired office service-related subsidiaries and existing sales subsidiaries, which we will be closely monitor.

(Recognition of the Audit & Supervisory Board)

With respect to the headquarters function, we confirmed progress in governance effectiveness due to the organizational change. To further strengthen governance, we will continue to monitor the progress of implementation overseas, including redefinition of the roles and responsibilities of each function and functional officer, especially clarification of roles with overseas regional headquarters. In addition, we will continue to confirm the status of the development and operation of governance and internal control systems at ETRIA and other subsidiaries in line with the expansion and changes in their structures.

(Recognition of the Audit & Supervisory Board)

We confirmed that the design and implementation of the “Second Career Support Program” have been thoroughly discussed, including by the Board of Directors, and that the program have been fully explained to the employees, and that the impact on the control environment is limited. Regarding the development of digital professionals, we confirmed that the program is well established and that a structure is in place to accept them after the program. We will continue to monitor the impact of the “human capital strategy” on the business and control environment in each organizational function, the status of the development and shift of digital professionals, and the effectiveness of the strategy.

For fiscal 2025, in light of the growing uncertainty in the external environment, including geopolitical risks (including U.S. tariffs) and information security risks, our audit activities will continue to prioritize the progress and effectiveness of the Corporate Value Improvement Project, the allocation of management resources to growth areas and its impact on governance and internal controls, and the development and operation of internal control systems including those for global operations.
In addition, in the formulation of the next management strategy, Audit & Supervisory Board Members will actively express our opinions, including opinions on the organization and governance structure to the Board of Directors or to the management team, toward achievements of medium- to long-term growth as a digital services company.

Audit & Supervisory Board Members, as a statutory independent entity entrusted by the Company's shareholders, are responsible for auditing the Directors' performance of their duties, and ensuring the establishment of systems of good corporate governance to respond to the trust placed in the Company by society. The Audit & Supervisory Board voluntarily prepares these Notes as complementary material to the Audit & Supervisory Board's Report, in order to enhance the effectiveness of the dialogue with stakeholders including shareholders, based on the belief that more concrete explanation of the Audit & Supervisory Board's activities will lead to enhanced audit transparency. We also plan to disclose the outline of these Notes in the section on the “Status of the Audit conducted by Audit & Supervisory Board” in the Securities Report.