Reference:

Please refer to “Selection Criteria for Independent Directors and Independent Audit & Supervisory Members” on the MC website for thoughts regarding independence in selection criteria for Independent Directors and Independent Audit & Supervisory Members.
(https://www.mitsubishicorp.com/jp/en/about/governance/corporategovernance.html)

Prior to each fiscal year, the Audit & Supervisory Board formulates audit plans with key areas. In FY2022 (ended March 31, 2023), the following three key audit areas were selected for the monitoring of specific progress in management and execution.

MC conducts annual evaluations of the Board of Directors in order to make continuous improvements to the effectiveness of its corporate governance. The Audit & Supervisory Board (Members) focused on the following matters, referring to the issues reviewed in the effectiveness evaluation.

Audit & Supervisory Board Members strive to further strengthen cooperation with Independent Auditors and the Internal Audit Department in order to assess the Company's situation with the aim of improving the effectiveness of audits.

The Audit & Supervisory Board has five Members, consisting of two in-house members and three independent members. Of the 2 In-house Audit & Supervisory Board Members, Mitsumasa Icho has experience in the corporate management, and finance and accounting departments, and Akira Murakoshi has experience in the corporate management. They are appointed as Full-time Audit & Supervisory Board Members, respectively. Of the 3 Independent Audit & Supervisory Board Members, Rieko Sato and Takeshi Nakao have extensive experience as an attorney (corporate law) and a certified public accountant respectively, and Mari Kogiso has in-depth insight into ESG and fincance. Of the 5 Audit & Supervisory Board Members, Mitsumasa Icho, Full-time Audit & Supervisory Board Member, and Takeshi Nakao, Independent Audit & Supervisory Board Member, have a considerable degree of knowledge and experience concerning finance and accounting. One of the Full-time Audit & Supervisory Board Members heads the Audit & Supervisory Board and is also the specified Audit & Supervisory Board Member stipulated by the law. Audit & Supervisory Board Members are assisted as needed by the 8-member Audit & Supervisory Board Members Office (as of April 1, 2023), which is an independent organizational body.

As part of their activities based on the audit plan, Audit & Supervisory Board Members attend important meetings of major internal management bodies (132 meetings including Executive Committee and Business Strategy Meeting, etc.) and hold discussions with internal departments, including important offices in Japan and overseas (67 dialogues with executive officers (Chairman of the Board, etc.), dialogues with CEOs and other executive officers at 24 overseas business subsidiaries/affiliates and 19 domestic ones, as well as with the regional chiefs of 10 overseas and domestic offices). At the same time, Audit & Supervisory Board Members hold regular meetings with MC’s independent auditors and Internal Audit Department, to accurately and in a timely manner grasp MC’s situation through close cooperation. The Audit & Supervisory Board provides a forum for lively discussion, where the Audit & Supervisory Board Members report and share their audit activities as well as making decisions on statutory matters and so forth. In FY2022 (ended March 31, 2023), Audit & Supervisory Board were held 12 times, and all Audit & Supervisory Board Members were in attendance at every meeting. At the Audit & Supervisory Board meeting implemented in the end of the last fiscal year or in the beginning of the fiscal year, the audit plan for that fiscal year is decided upon and a review of the previous fiscal year’s audit activities is carried out. These matters are also reported to the Board of Directors. Furthermore, in addition to statutory matters such as the audit report and the selection and dismissal, and remuneration of the independent auditors, the Audit & Supervisory Board also discusses major investment and finance projects and issues identified through audit activities such as on-site audits, tours and dialogues, etc.

Regarding internal audits, the Internal Audit Department (which had 80 members as of April 1, 2023) conducts audits of MC and its overseas regional subsidiaries and affiliated companies from a Company-wide perspective. In addition, each Business Group has established its own internal audit organization, which audits the operations that fall under its Group organization on a consolidated basis. These internal audits are based on annual audit plans and are conducted after selecting audit targets. Under a dual reporting system, the audit results are reported each time to the President and CEO, Audit & Supervisory Board Members and other concerned parties. They are also reported regularly to the Board of Directors and the Executive Committee.
MC conducts regular audits throughout the year of MC and MC Group companies in accordance with the International Standards for Internal Auditing every three to five years, taking into factors such as accounting risks and business scale. In addition to legal compliance, the MC Group also considers social norms and business ethics in verifying and evaluating each process of governance, risk management and internal controls. MC has also been conducting thematic audits annually since FY2021, covering the entire MC Group regarding anti-bribery and anti-trust laws, as well as the status of environmental issue management in FY2022. In FY2023 we focused on the status of internal auditing structure and audit and supervisory board members at subsidiaries.

The three certified public accountants who carried out the accounting audit of Mitsubishi Corporation were Yuki Higashikawa, Hirofumi Otani and Sogo Ito of Deloitte Touche Tohmatsu LLC. They were assisted by 31 certified public accountants, 21 junior accountants and 90 other staff.

The Audit & Supervisory Board Members, Corporate Accounting Department, and independent auditors hold regular meetings at the time of quarterly financial results and monthly, and provide opportunities for exchanging opinions with subsidiaries and affiliates as necessary.
In addition, the Internal Audit Department makes regular audit reports to the Audit & Supervisory Board, the Audit & Supervisory Board Members have monthly meetings with the Internal Audit Department, and the Audit & Supervisory Board Member and the Internal Audit Department hold liaison meetings with the Audit & Supervisory Board Members and internal audit departments of subsidiaries and affiliates, and so forth. In addition, the Audit Department also began participating in the regular meetings for exchanging information and opinions with Audit & Supervisory Board Members and Independent Auditors in the Fiscal Year ended March 31, 2023.
This cooperation is intended to strengthen the linkages supporting three-way audits (Audit & Supervisory Board Member Audits, Internal Audits and Accounting Audits).

Fees paid to Mitsubishi Corporation’s independent auditors Deloitte Touche Tohmatsu LLC for FY2022 were as follows:

1. Amount of fees for services in accordance with the first clause of Article 2 of the Certified Public Accountant Law of Japan (Law No. 103, 1948) ^{*1Fees for services prescribed in the first clause of Article 2 of the Certified Public Accountant Law of Japan (Law No. 103, 1948) are fees, etc. for audit certification services relating to English language financial statements prepared based on International Financial Reporting Standards (IFRS) and audit certification based on the Companies Act and the Financial Instruments and Exchange Act.*1} ¥846 million
2. Amount of fees for services other than those prescribed in the first clause of Article 2 of the Certified Public Accountant Law of Japan ^{*2Fees for services other than those prescribed in the first clause of Article 2 of the Certified Public Accountant Law of Japan are fees for comfort letter preparation for bond issuance, training, etc.*2} ¥38 million
3. Total amount of fees to be paid by Mitsubishi Corporation and consolidated subsidiaries ^{*3Some subsidiaries are audited by certified public accountants or independent auditors (including persons with qualifications equivalent to these qualifications in overseas countries) other than Mitsubishi Corporation’s independent auditors.*3} ¥2,838 million