Risk Management System Compliance System Development Risk  Management and Internal  Control Systems The JS Group Corporation, as a pure holding company, constantly and closely monitors the risks  faced by the Group companies, verifies how well they are hedging those risks, and offers guid- ance. To achieve these endeavors, the holding company has made the establishment of risk man- agement meetings mandatory in all of the Group companies, regularly verifies the state of risk in  each of the Group companies, and studies the risk of the Group companies in the monthly meet- ing of the Internal Audit Committee and the ad hoc risk management meetings. When necessary,  Group companies are requested to appear before the committee to make a report. In addition, companies are required to report on risk at the regular quarterly results report meetings. Moreover, representatives from JS Group Corporation attend the risk management  meetings held at major operating companies to confirm the status of risk management and offer  recommendations. Group Companies Other Companies’ Examples  (Trends) Internal Audit Committee  Secretariat: Audit Dept. Risk Management Meeting Report Expanded horizontally to each company,  in connection with prevention Holding Company Risk Management Meeting The Compliance Committee Compliance Chairman Internal Audit Committee Secretariat: Audit Dept. Group Employees Audit Dept. <Internal reporting system,  Internal compliance help desk> Report/consult Report/consult Report/consult Report/consult Report Report Command/  supervise Report/consult Group-company Presidents Conduct-promotion Facilitator  in Each Group Company President Workplace Supervisors JS Group Corporation Annual Report 2010 44