16Risk Management

Risk Management Structure
JASDEC has established the Basic Policy on Risk Management, which defines basic aspects of risk management
activities by the JASDEC Group, to ensure the soundness and reliability of the Group as a provider of settlement
infrastructure. Our basic thinking on risk management is outlined below.

Overall policy on risk management

I

JASDEC Group emphasizes the importance of risk management, and will strive to instill
this emphasis in each department and office.

IIJASDEC Group, in order to ensure sound management of operations, will takecomprehensive measures to manage each risk, while ensuring that the increasing
diversity and complexity of operations is reflected appropriately in the risk management
structure.

IIIJASDEC Group shall periodically specify, analyze and appraise risks, and will implement
risk countermeasures and monitor the status of risk management as necessary. In theevent that a risk materializes, JASDEC Group shall identify the cause, take measures
to prevent recurrence and, with due consideration of available management resources,endeavor to minimize risk to the entire Group.

IVJASDEC Group shall remain highly cognizant of the particular importance of managing
Information system risk, and shall endeavor to minimize this risk by using standardized
administrative procedures for planning, development and operations of information
systems, maintaining a consistent level of information system quality, and preparing arobust and up-to-date emergency response framework in case of disaster or damage.

V

Directors and employees shall maintain a high awareness of risk, and endeavor toensure that business operations are carried out properly at all times, based on anunderstanding that the materialization of risks could significantly damage JASDEC
Group assets and bring about significant losses.

VIEach department and office shall endeavor to conduct proper risk management, andif a risk materializes in the course of conducting operations shall promptly report to theIntegrated Risk Management Council while taking necessary measures to minimize theimpact of the materialized risk.

Framework

ManagementPolicy

Responsibility

Annual Report 2015

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RISK MANAGEMENTJASDEC has established the Integrated Risk Management Council under the chairmanship of the Chief Risk
Officer (CRO), with members that include executive officers and heads of departments. We have also establishedunits to manage each risk category under the overall coordination of the Risk Management Department. By
creating these organizations, we are building a structure capable of providing comprehensive risk management
for the JASDEC Group.

Functional framework of risk management

Board of Directors

adviceChairman: CRO
Integrated Risk Management Council

reportRisk Committee

President & CEO

reportExecutive Officer in charge: CRORisk Management Department

Departments in charge of specific risk management

Executive Officerin charge ofInformation system risk

Executive Officerin charge ofBusiness processing risk

Executive Officerin charge ofAccident & Disaster risk•••Department
in charge ofInformation system risk

Department
in charge ofBusiness processing risk

Department
in charge ofAccident & Disaster risk

reportcheck & balance

Departments exposed to certain risks

Annual Report 2015

Auditing

Internal
AuditOffice