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Audit & Supervisory Board (KANSAYAKU-KAI) (Audit & Supervisory Board Members (KANSAYAKU))

NEC has appointed Audit & Supervisory Board Members (KANSAYAKU) ("A&SBMs") and established the Audit & Supervisory Board (KANSAYAKU-KAI) ("A&SB") pursuant to the Companies Act. NEC has 5 A&SBMs, 3 of whom are Outside A&SBMs.

The A&SB holds regular meetings basically once a month and extraordinary meetings as necessary, decides on audit policies, standards, annual auditing plan and other matters, and receives status reports on audits and on other matters from each A&SBMs.

NEC appoints as A&SBMs the personnel who have the knowledge and experience necessary for audits, such as considerable expertise in finance and accounting or experience as an attorney at law, and strengthen the auditing functions of the A&SBMs.

The A&SBMs strive to enhance quality of the audits of the entire NEC Group by cooperating with A&SBMs of NEC's subsidiaries.

The A&SBMs are taking steps to strengthen cooperation with the internal auditing division. These steps include receiving reports and exchanging opinions with the internal auditing division on audit results regularly or as necessary, as well as receiving reports from the same division on the status of operation of the "Compliance Hotline" (including the status of operation of compliance hotlines of NEC's subsidiaries), a compliance hotline for employees and contractors to report issues concerning possible breaches of corporate ethics, compliance and other similar matters. Furthermore, the A&SBMs are taking steps to strengthen cooperation with Outside Directors, such as by exchanging opinions. In addition, the A&SBMs are stepping up cooperation with the Accounting Auditors, such as by receiving briefings on financial audits covering audit plans and status reports on their audits, as well as on audits of the internal control systems based on the Financial Instruments and Exchange Act, and exchanging opinions on their audits. NEC arranges regular meetings among A&SBMs, the internal auditing division and the Accounting Auditors.

NEC has established the Audit and Supervisory Board Members' Office with 6 full-time corporate staff members to assist with the A&SBMs' audit activities.

Nomination policy for Outside Audit & Supervisory Board Members (KANSAYAKU) ("A&SBMs")

NEC appoints Outside A&SBMs in order to ensure that audits are conducted from a neutral and objective perspective. In appointing Outside A&SBMs, NEC considers that they have superior character, discernment and high ethical standards. In addition, they would sympathize with the NEC Way and act with strong will to realize the Philosophy and they have their experience and deep insight necessary for audits.