[Translation]

Audit Committee Audit Report Templates
Japan Audit & Supervisory Board
Members Association (the “Association”)
Enacted on January 8, 2004
Revised on September 28, 2006
Revised on April 16, 2009
Revised on March 10, 2011
Final revision on November 10, 2015

1. These “Audit Committee Audit Report Templates” (these “Templates”) set out the formats,terms, and the like of the audit reports provided for in the Companies Act for the purpose ofserving as a reference when audit committees prepare those audit reports.
Audit reports are to be prepared based on the actual conditions of the audits of the relevant
company. Audit committees are strongly expected to prepare audit reports that accuratelyreflect the actual conditions of audits in accordance with the Companies Act, the Ordinance for
Enforcement of the Companies Act, the Ordinance on Accounting of Companies, and the like.
In regard to statements to be included in audit reports in cases such as when performing auditsthat actively incorporate the views set out in the “Code of Audit Committee Auditing Standards”
established by the Association and reflecting those views in the audit reports, there are many
example statements provided in the notes, so please actively use those examples as a reference.
2. In regard to audit reports prepared by audit committees, there are separate provisions underlaws and regulations regarding the preparation of audit reports concerning business reports andsupplementary schedules thereto (“Business Reports, Etc.”) and audit reports concerning
accounting documents and supplementary schedules thereto (“Accounting Documents, Etc.”).
However, audits performed by audit committees concerning Business Reports, Etc. and thoseconcerning Accounting Documents, Etc. are closely related and have many similarities.
Therefore, the preparation method used in these Templates is to prepare the audit reportconcerning the Business Report, Etc. and the audit report concerning the Accounting
Documents, Etc. for each business year together as a single document. Under laws andregulations, the period for audits by audit committees concerning Business Reports, Etc. is fourweeks, while the period for audits by accounting auditors concerning accounting documents isfour weeks followed by an additional week for audits by audit committees. Therefore, if
preparing the audit report concerning the Business Report, Etc. and the audit report concerning
the Accounting Documents, Etc. together as a single document in the same way as these
Templates, please note that it may be necessary to extend the period for the audit of the Business
Report, Etc. by agreement with the specified directors.
Under laws and regulations, it is possible to prepare the audit report concerning theconsolidated accounting documents as a separate document from the audit report concerning
the Business Report, Etc. and the audit report concerning the non-consolidated Accounting
Documents, Etc. or to prepare all three audit reports together as a single document. Previously,
in consideration of the fact that there are differences in the methods and contents of the audits
and in the methods of provision to shareholders, these Templates assumed that the audit reportconcerning the consolidated accounting documents would be prepared as a separate document;
however, as a majority of companies with a nominating committee, etc. currently prepare thethree audit reports as a single document, in this revision, the main text of the template for audit
1committee audit reports is also provided as a single document. Additionally, under laws andregulations, it is also possible to prepare the audit report concerning the Business Report, Etc.
separately and prepare the audit report concerning the consolidated accounting documents
together with the audit report concerning the non-consolidated Accounting Documents, Etc. asa single document.
3. In regard to the “Method and Contents of Audits” section in audit reports, it is necessary
to clearly and concisely state the methods of the audits actually performed by the audit
committee while giving consideration so that it is possible to accurately judge the reliability of
the audit. However, it is expected that the methods and contents of audits in each company
will have their own characteristics due to factors such as differences in the company’s scale,business format, organization, and establishment and operation status of internal control
systems, etc., and in order for the users of the audit reports to understand those characteristics,
it is also possible to state the “Method and Contents of Audits” section in audit reports more
specifically. In these Templates, notes and explanations as appropriate have been added toplaces where a variety of possible statements are anticipated, so please refer to those notes, etc.
when preparing the audit reports.
Naturally, audit reports are to be prepared on the basis of the audit committee members
performing their duty of care. In order to demonstrate that audit committee members havefulfilled that duty, it is necessary for the audit committee to clearly set out auditing standards
and maintain audit records, minutes of audit committee meetings, and the like.
4. These Templates are intended for companies that are both public companies and large
companies as provided for in the Companies Act, and these Templates have been preparedmainly in consideration of listed companies. For audit committees of other types ofcompanies, please prepare audit reports using these Templates as a reference as appropriate
while taking matters such as the audit environment of the company into consideration.
5. If a company prepares temporary accounting documents, the audit committee must prepare
an audit report concerning those documents. In this case, please prepare the audit reports
concerning the temporary accounting documents using the statements, etc. regarding audits ofaccounting-related documents in these Templates as a reference.

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Audit Report Concerning Business Report, Etc. and Audit Report Concerning
Accounting Documents, Etc. (Combined Audit Report Including Audit Report
Concerning Consolidated Accounting Documents) (Note 1)[Date][TBD] Co., Ltd.
Executive Officer, [TBD] (Note 2)
Audit Committee (Note 3)
Submission of Audit Report

The audit committee has prepared an audit report pursuant to Article 404, paragraph (2), item (i) of theCompanies Act and hereby submits it as enclosed (Note 4).
End

Audit Report
The audit committee has audited the directors’ and executive officers’ performance of their duties for the[TBD] business year from [TBD] to [TBD] and reports as follows in regard to the method and results of
those audits.
1.

Method and Contents of Audits (Note 5)
In regard to the content of resolutions of the board of directors regarding the matters stated in Article
416, paragraph (1), items (i)(b) and (i)(e) of the Companies Act, as well as the systems developed
pursuant to those resolutions (i.e., internal control systems) (Note 6), the audit committee
periodically received reports from directors, executive officers, and employees, etc. regarding thestatus of the establishment and operation of those systems and as necessary requested explanations
and expressed opinions in regard thereto, in addition to which the audit committee conducted audits
using the following methods.
(i)
In accordance with the audit policies (Note 7) and division of duties, etc. (Note 8) determinedby the audit committee (Note 9), and in cooperation with the internal control department of
the company (Note 10), the audit committee attended important meetings, received reports
from directors and executive officers, etc. regarding matters related to the performance of
their duties, requested explanations as necessary, viewed important decision-making
documents, etc., and inspected the status of operations and assets at the head office and main
business locations (Note 11). Additionally, in regard to subsidiaries, the audit committee
communicated and exchanged information with the directors, executive officers, and audit
and supervisory board members, etc. of subsidiaries (Note 12) and received reports on
business from subsidiaries as necessary. (Note 13)(ii)
In regard to the basic policies provided for in Article 118, item (iii)(a) of the Ordinance for
Enforcement of the Companies Act, the efforts provided for in item (iii)(b) of that article(Note 14), the matters given due consideration provided for in item (v)(a) of that article, andthe judgment and reasons provided for in item (v)(b) of that article (Note 15), each as statedin the business report, the audit committee considered the contents thereof taking into
account matters such as the status of deliberations at meetings of the board of directors andother deliberations.
(iii) The audit committee oversaw and verified whether the accounting auditor maintained an
independent position and conducted an appropriate audit, received reports from theaccounting auditor on the status of the performance of its duties, and requested explanations3

as necessary. Additionally, the audit committee received notification from the accounting
auditor that, in accordance with the “Quality Control Standards for Audits” (BusinessAccounting Council, October 28, 2005), etc., it had developed systems in order to ensurethat its duties are appropriately performed (i.e., notification of the matters stated in the itemsof Article 131 of the Ordinance on Accounting of Companies) and requested explanations asnecessary. (Note 16)
Using the methods above, the audit committee examined the business report, the supplementaryschedules thereto, the accounting documents (i.e., the balance sheet, statement of income, statementof changes in net assets, and explanatory notes to accounting documents (Note 17)), thesupplementary schedules to the accounting documents, and the consolidated accounting
documents (i.e., the consolidated balance sheet, consolidated statement of income,consolidated statement of changes in net assets, and explanatory notes to consolidated
accounting documents) for the business year.
2.

Audit Results (Note 18)
(1)

(2)

(3)

Results of audit of business report, etc.
(i)
We find that the business report and the supplementary schedules thereto accurately
present the status of the company in accordance with laws, regulations, and the articles
of incorporation.
(ii)
We do not find any misconduct nor any material fact constituting a violation of any
law, regulation, or the articles of incorporation in relation to the directors’ andexecutive officers’ performance of their duties (Note 19). (Note 20)(iii) We find the content of the resolutions of the board of directors regarding internal
control systems to be reasonable. (Note 21) Additionally, we do not find any mattersthat should be commented upon in regard to the statements in the business report or
the directors’ and executive officers’ performance of their duties relating to theinternal control systems. (Note 22)(iv) We find the basic policy regarding persons who control the determination of financial
and business policies of the company stated in the business report to be reasonable.
We find that the efforts provided for in Article 118, item (iii)(b) of the Ordinance for
Enforcement of the Companies Act stated in the business report are in compliancewith that basic policy and do not harm the common interests of the shareholders of
the company, and that their purpose is not to maintain the positions of the directors of
the company. (Note 23)(v)
In regard to transactions with parent companies, etc. stated in the business report, we
do not find any matters that should be commented upon in regard to the matters given
due consideration so that the interests of the company are not harmed when engaging
in such transactions (Note 24), the judgment of the board of directors regardingwhether or not such transactions harm the interests of the company, and the reasonsfor that judgment (Note 25).
Results of audit of accounting documents and supplementary schedules thereto
We find the methods and results of the audit by the accounting auditor, [TBD] (Note 26), tobe reasonable. (Note 27)
Results of audit of consolidated accounting documents
We find the methods and results of the audit by the accounting auditor, [TBD] (Note28), to be reasonable. (Note 29)

3.

Opinion of Audit Committee Member [Name] (If there are differing audit opinions) (Note 30)

4.

Subsequent Events (If material subsequent events have occurred) (Note 31)

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[Date] (Note 32)[TBD] Co., Ltd.; Audit Committee
Audit Committee Member
Audit Committee Member
Audit Committee Member
Audit Committee Member(Note)(Note 1)

(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)

[Name] [Seal][Name] [Seal][Name] [Seal][Name] [Seal](Signatures) (Note 33)

Audit Committee Members [TBD] and [TBD] are outside directors provided for in Article
2, item (xv) and Article 400, paragraph (3) of the Companies Act. (Note 34)

These Templates are to be used when preparing the audit report concerning the Business Report,
Etc., the audit report concerning the Accounting Documents, Etc., and the audit reportconcerning the consolidated accounting documents together as a single document. If
separately preparing the audit report concerning the consolidated accounting documents, pleasedelete the underlined portions of the main text of these Templates.
Audit reports are to be submitted to the “specified directors” pursuant to Article 132, paragraph(1) of the Ordinance for Enforcement of the Companies Act and Article 132, paragraph (1) of
the Ordinance on Accounting of Companies. For companies with a nominating committee,etc., it is likely that in many cases, the “specified directors” will be the representative executive
officers or the executive officers who performed duties relating to the preparation of thebusiness report and Accounting Documents, Etc. (please refer to Article 132, paragraph (4) of
the Ordinance for Enforcement of the Companies Act and Article 130, paragraph (4) of theOrdinance on Accounting of Companies), so state the titles and names of those persons.
The handling of the seal of the audit committee on the cover sheet follows the internal
regulations of the company.
The cover sheet provided assumes that the audit report is submitted in writing. The audit
report can be prepared by electronic or magnetic methods, and in that case, certain revisions
will be necessary, such as changing “as enclosed” to “as attached.”
In regard to “1. Method and Contents of Audits,” please note that while a summary of the audit
methods was required under the former Commercial Code, the Companies Act requires not asummary, but rather a more specific description of the methods and contents of the audits
actually conducted (Article 131, paragraph (1), item (i) of the Ordinance for Enforcement of
the Companies Act; Article 129, paragraph (1), item (i) of the Ordinance on Accounting ofCompanies). It is expected that stating the specific methods and contents will lead to greater
understanding by the users of the audit report. In particular, in cases where there are audit
items specific to the company for the period under review, such as if there is an audit item set
as an important audit matter and given particular focus when conducting the audit (a priority
audit item), it is preferable to make specific statements, such as “... determined by the audit
committee, setting [TBD] as a priority audit item, and in cooperation with the internal control
department of the company, the audit committee attended important meetings ...”
These Templates refer to the systems actually developed pursuant to resolutions by the boardof directors regarding the matters stated in Article 416, paragraph (1), items (i)(b) and (i)(e) of
the Companies Act as “internal control systems.” For the phrase “internal control systems,”
please consider the appropriate term to use based on the actual conditions of the company, suchas “overall systems relating to the internal controls of the company.” It is also possible torefer to the specific headings and page numbers, etc. in the business report.
“Audit policies” can be changed to “audit policies for the period under review” if you wish toclearly state that the audits were performed in accordance with the audit policies for the period5(Note 8)(Note 9)(Note 10)(Note 11)

(Note 12)(Note 13)

(Note 14)

(Note 15)

(Note 16)

being audited. Additionally, it is also possible to specifically state the audit policies for theperiod under review.
“Audit policies and division of duties, etc. determined by the audit committee” includes theappointment of “audit committee members appointed by the audit committee” stated inprovisions such as Article 405, paragraphs (1) and (2) of the Companies Act.
If the audit committee has established audit committee audit standards, it is preferable to include
a statement such as, “In compliance with the audit committee audit standards established by theaudit committee, in accordance with the audit policies and division of duties, etc., ...”For “internal control department of the company,” please state the appropriate department name,etc. in accordance with the actual conditions of the company, such as “the internal audit
department and other departments responsible for internal controls of the company.”
For “attended important meetings ... and inspected the status of operations and assets at thehead office and main business locations,” use an appropriate expression based on the actual
conditions of audits in the company. For example, depending on the composition of audit
committee members, the status of the establishment and operation of internal control systems,
and the status of cooperation with the internal control department, it is also possible to include
a statement such as “... inspected the process and contents of decision-making at important
meetings, etc., the contents of principal decision-making documents and other important
documents, etc. relating to business execution, the status of the performance of duties by the
executive officers (and other principal employees, etc.), and the status of the operations andassets of the company.”
For “the directors, executive officers, and audit and supervisory board members, etc. of
subsidiaries,” please choose the appropriate terms based on whether the subsidiaries arecompanies with audit and supervisory board members or companies with a nominating
committee, etc.
“Received reports on business from subsidiaries as necessary” does not mean that audit
committee members appointed by the audit committee exercised their rights to investigate thestatus of operations or financial status of a subsidiary provided for in Article 405, paragraph (2)of the Companies Act but instead refers to day-to-day or general audit activities relating to
subsidiaries. If audit committee members appointed by the audit committee exercised theirrights to investigate the status of operations or financial status of a subsidiary, it is possible toinclude a statement such as “requested reports on business from subsidiaries as necessary, andinvestigated the status of the operations and finances of subsidiaries.”
The statement regarding “the basic policies provided for in Article 118, item (iii)(a) of theOrdinance for Enforcement of the Companies Act, the efforts provided for in item (iii)(b) ofthat article ... stated in the business report” applies to cases in which the company has
established takeover defense measures. It is not necessary to include this statement if thematters listed in Article 118, item (iii) of the Ordinance for Enforcement of the Companies Act
are not stated in the business report. Please also refer to Note 23.
If the matters provided for in Article 118, item (v) of the Ordinance for Enforcement of theCompanies Act are not stated in the business report, the statement regarding “the matters given
due consideration provided for in item (v)(a) of that article, and the judgment and reasonsprovided for in item (v)(b) of that article ... stated in the business report” does not need to bestated in the audit report (Article 131, paragraph (1), item (ii) and Article 129, paragraph (1),item (vi) of the Ordinance for Enforcement of the Companies Act).
The audit committee must state “matters related to systems for ensuring that the performanceof the duties of Accounting Auditor(s) is being carried out appropriately” (Article 129,paragraph (1), item (ii) and Article 127, item (iv) of the Ordinance on Accounting ofCompanies; “Systems to Ensure Appropriate Performance of Accounting Auditor Duties”) in
the audit report. After receiving notification from the accounting auditor of matters relating
to those systems (Article 131 of the Ordinance on Accounting of Companies; the wording of
the relevant provision is “matters related to systems for ensuring that the performance of theduties of Accounting Auditor(s) is being carried out appropriately”) (the notification is to bereceived by the audit committee members that are “specified audit and supervisory board
members” as provided for in Article 130, paragraph (5), item (iv) of the Ordinance on

6(Note 17)(Note 18)

(Note 19)

(Note 20)

(Note 21)

Accounting of Companies), the audit committee confirms whether those systems are developedin accordance with certain appropriate standards. In these Templates, the notification mattersregarding the Systems to Ensure Appropriate Performance of Accounting Auditor Duties andthe confirmation method thereof are referred to in the sentence, “Additionally, the audit
committee received notification from the accounting auditor ... and requested explanations asnecessary.” In these Templates, the “Quality Control Standards for Audits” (BusinessAccounting Council, October 28, 2005) are used as “certain appropriate standards,” but otherstandards are also important, such as the practical guidelines of the Japanese Institute ofCertified Public Accountants (Quality Control Standards Committee Statement No. 1, “Quality
Control for Audit Firms,” and Auditing Standards Committee Statement No. 220, “Quality
Control for an Audit of Financial Statements”).
In these Templates, the results of the confirmation by the audit committee regarding the
Systems to Ensure Appropriate Performance of Accounting Auditor Duties are not stated as aseparate matter but are included in the statements to the effect that the methods and results of
the audit by the accounting auditor are found to be reasonable in “(2) Results of audit ofaccounting documents and supplementary schedules thereto” in “2. Audit Results.” If there
are any matters that should be particularly emphasized or any matters that are consideredappropriate to be clearly stated in regard to the Systems to Ensure Appropriate Performance of
Accounting Auditor Duties, please specifically state those matters in “1. Method and Contentsof Audits” or in “(2) Results of audit of accounting documents and supplementary schedules
thereto” in “2. Audit Results.”
If the explanatory notes to accounting documents are not prepared as separate materials, pleasestate “... the business report, the supplementary schedules thereto, the accounting documents(i.e., the balance sheet, statement of income, and statement of changes in net assets), thesupplementary schedules to the accounting documents ...” (please refer to Article 57, paragraph(3) of the Ordinance on Accounting of Companies).
If there are any matters to be commented upon in regard to the “Audit Results” section, statethat and the relevant facts clearly and concisely. If investigations necessary for audits could
not be performed, state that and the reasons therefor in the relevant section. Additionally, if
priority audit items are mentioned in “1. Method and Contents of Audits,” it is also possible tostate matters such as the audit results for those priority audit items in “Audit Results.” Thesame applies in cases where statements were made in “1. Method and Contents of Audits” about
matters regarding which explanations were requested or opinions were expressed in relation tointernal control systems or about matters learned through communication or informationexchanges with directors, executive officers, and audit and supervisory board members, etc. of
subsidiaries that affected the audit.
When preparing the “Audit Results” section, if there are material facts relating to the status of
the company, such as events or circumstances pertaining to the assumption of the company
being a going concern, material accidents or damage, or material litigation, confirm thestatements in the business report or other documents, consider whether statements should bemade in the audit report, and include such statements if you find it necessary to do so.
“Performance of their duties” can also be written as “execution of their duties” in accordancewith the wording used in laws and regulations (please refer to Article 131, paragraph (1), item(ii) and Article 129, paragraph (1), item (iii) of the Ordinance for Enforcement of theCompanies Act). In these Templates, “performance of their duties” is used throughout.
If any misconduct or any material fact constituting a violation of laws, regulations, or thearticles of incorporation in relation to the directors’ or executive officers’ performance of theirduties is found, specifically state that fact.
If the audit committee members have publicly announced an opinion in the course of their duties,
such as in cases where a third-party allotment is performed during the period under review andthe opinion of the audit committee members regarding whether it constitutes an issuance underfavorable conditions is announced, it is possible to state a summary of that opinion if necessary.
If resolutions by the board of directors relating to internal control systems are “foundinappropriate” (Article 131, paragraph (1), item (ii) and Article 129, paragraph (1), item (v) of
the Ordinance for Enforcement of the Companies Act), it is required to specifically state that

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(Note 22)(Note 23)

(Note 24)(Note 25)

(Note 26)

fact and the reasons therefor.
In particular, the contents of resolutions by the board of directors regarding systems to ensure
the effectiveness of audit committee audits (i.e., the matters listed in the items of Article 112,
paragraph (1) of the Ordinance for Enforcement of the Companies Act) such as matters related
to employees appointed to support the duties of the audit committee, systems for directors andemployees, etc. of the company and its subsidiaries to report to the audit committee and othersystems relating to reports to the audit committee, systems to ensure that any person who makes
a report to the audit committee does not receive disadvantageous treatment due to having doneso, and procedures for the advance payment or reimbursement of expenses arising in connection
to the performance of audit committee duties and other matters relating to policies on thehandling of expenses or debts arising in connection to the performance of audit committee
duties are particularly important in order to achieve effective audits by the audit committee, andif there is any problem, etc. in regard thereto, please proactively state that fact.
If the summary of the operation status of internal control systems stated in the business reportis “found inappropriate” (Article 131, paragraph (1), item (ii) and Article 129, paragraph (1),item (v) of the Ordinance for Enforcement of the Companies Act), it is required to specificallystate that fact and the reasons therefor.
If significant corporate wrongdoing occurred in the period under review or the previous period,in most cases, it is likely that that fact and the status of measures to identify causes and prevent
reoccurrence are material matters that should also be stated in the business report. The
responsibility of the audit committee is to express opinions regarding matters such as (i)whether the contents of statements in the business report are appropriate and (ii) whether any
problem, etc. can be found in regard to the status of business execution in order to prevent
reoccurrence taking into consideration the directors’ and executive officers’ duty of care.
This is a statement of an opinion regarding takeover defense measures, etc. and the judgmentof the board of directors in regard thereto (Article 131, paragraph (1), item (ii) and Article 129,paragraph (1), item (vi) of the Ordinance for Enforcement of the Companies Act; if thosematters are not stated in the business report, it is not necessary to state this item). Consideringthat the judgment and role of audit committees in regard to the appropriateness of takeover
defense measures is receiving greater attention, if there are any matters that should becommented upon, it is preferable to specifically state those matters. “The basic policy
regarding persons who control the determination of financial and business policies of thecompany stated in the business report” and “the efforts provided for in Article 118, item (iii)(b)of the Ordinance for Enforcement of the Companies Act stated in the business report” can also
be changed to refer to the specific headings and page numbers, etc. in the business report.
For transactions with parent companies, etc. that require a note regarding transactions withrelated parties in the explanatory notes to the accounting documents, it is necessary to state themeasures given due consideration so that the interests of the company are not harmed whenengaging in such transactions, the judgment of the board of directors, and the reasons for that
judgment in the business report (Article 118, item (v) of the Ordinance for Enforcement of theCompanies Act). Additionally, if those matters are stated in the business report, the opinionof the audit committee in regard to those matters must be stated in the audit report (Article 131,
paragraph (1), item (ii) and Article 129, paragraph (1), item (vi) of the Ordinance for
Enforcement of the Companies Act). Even if it is stated in the business report that there wereno matters given due consideration so that the interests of the company are not harmed, theaudit committee must express an opinion regarding whether or not that judgment is appropriate.
If the judgment of the board of directors differs from the opinion of the outside directors, that
opinion must also be stated in the business report (Article 118, item (v)(c) of the Ordinance for
Enforcement of the Companies Act). If the judgment of the board of directors and the opinionof the outside directors is different, then taking into account the judgment of the board of
directors and the reasons therefor and the opinion of the outside directors, it is necessary for theaudit committee to sufficiently consider whether or not there are any matters to be commented
upon by means such as exchanging opinions with the representative executive officer or outside
directors as necessary.
State the name of the auditing firm or the name and office name of the certified public
accountant.

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(Note 27)(Note 28)
(Note 29)

(Note 30)

(Note 31)

(Note 32)

(Note 33)

(Note 34)

If it is found that the methods or results of the audit by the accounting auditor are not appropriate,
specifically state that fact and the reasons therefor.
Same as Note 26.
Same as Note 27. Taking into account the status of the progress of consolidated management
as well as matters such as the way that consolidated information is stated in the business report,
it is also possible to state the “Results of audit of consolidated accounting documents” before
the “Results of audit of accounting documents and supplementary schedules thereto.”
If there is an opinion that differs from that of the audit committee, state the name of the relevant
audit committee member, and clearly and concisely state that differing opinion and the reasons
therefor.
Under laws and regulations, the subsequent events that should be stated in the audit reports of
the audit committee are limited to those related to the accounting-related documents (however,any subsequent events that are included in the audit report of the accounting auditor need not
be stated in the audit reports of the audit committee; Article 129, paragraph (1), item (ii) and
Article 127, item (iii) of the Ordinance on Accounting of Companies, and others). If there are
any matters to be stated, state them specifically.
If any material events occur after the last day of the business year that do not affect property or
profits or losses, please note that the event must be stated in the business report as a material
matter relating to the current status of the stock company (please refer to Article 120, paragraph(1), item (ix) of the Ordinance for Enforcement of the Companies Act).
Please note that the date of preparation of the audit report is a matter required to be stated underlaws and regulations (please refer to Article 131, paragraph (1), item (iii) of the Ordinance for
Enforcement of the Companies Act and Article 129, paragraph (1), item (iii) of the Ordinanceon Accounting of Companies).
In order to ensure the authenticity of the audit report and reliability of the audits, it is preferable
for each audit committee member to sign his or her name and then affix his or her seal. If theaudit report is prepared as an electronic or magnetic record, each audit committee member must
electronically sign it.
For audit committee members who are outside directors, it is preferable to indicate that fact.
If there are full-time audit committee members, it is also possible to state their titles as “Fulltime Audit Committee Member.”

Other Matters
1. In cases such as if there was a vacancy in an audit committee member position during the period underreview, specifically note that fact in the audit report.
2. For the first business year in which a company transitions to a company with a nominating committee,etc., it is possible to include special statements regarding the audit methods, etc. concerning matters fromthe start of the business year until the close of the annual shareholders’ meeting.

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