Internal Control

The Companyʼs internal control is based on the “Internal Control Guidelines” resolved by its board of directors.

1.Audit by Corporate Auditors

Corporate Auditors attend regularly held important meetings such as the Board of Directors Meetings, Executive Officers Meetings and Management Meetings to hear matters to be resolved and reported, and request directors, executive officers, and managers to report as necessary.

2.Internal Audit

The Internal Audit Department is an independent dedicated organization with three members that reports directly to the President and audits whether the business of the entire Group is executed in an optimized and efficient manner. In addition, the Internal Audit Department evaluates the effectiveness of internal controls of financial reporting (J-SOX) based on the Financial Instruments and Exchange Act, monitors the risk management of subsidiaries and shares its findings upon subsidiary audits by Corporate Auditors and liaison meetings with internal audit departments of subsidiaries. The results of audits carried out by the Internal Audit Department are reported to the President and periodically to the Corporate Auditors for information sharing. The Internal Audit Department closely cooperates with accounting auditors to exchange information such as audit schedules and audit procedures as needed.

3.Management of Subsidiaries

In principle, at least one DMG MORI Director concurrently serves as director or auditor at each subsidiary. This allows them to attend subsidiary board meetings and other critical meetings, receive reports from subsidiary directors and employees, and monitor business operations to ensure proper and efficient business execution throughout the Group.