Compliance

1.

1. In principle, the Company holds a regular meeting of the Board of Directors once every three months. The Company strives to ensure that reports and discussions at the Board of Directors meetings lead to the legal and appropriate execution of duties.
2. Corporate auditors audit whether the execution of duties by directors is in compliance with laws, regulations, the Articles of Incorporation, and other relevant laws and regulations, and whether such execution is being conducted appropriately.
3. The Compliance Committee deliberates on compliance-related matters and works to improve and enhance the compliance system.

2.

1. The Company shall store and manage information related to the execution of duties by Directors in accordance with internal rules such as the "Rules on Division of Duties," "Rules on Administrative Authority," "Rules on Decision-Making Process," and "Rules of the Board of Directors.
2. The Company shall strive to improve the recording and management of information related to the execution of duties by Directors and the ease of retrieval, and to improve more appropriate management and operation methods and systems.

3.

1. The Company holds meetings of representative directors and managers of each department as appropriate to communicate and share information within the Company, and works to manage the risk of losses by confirming the current status of the Company, managing the progress of plans, analyzing the business environment, and so forth.
2. In the evaluation of risks related to internal control and their improvement, the Company strives to avoid or reduce such risks based on the results of deliberations and resolutions by the Board of Directors.

4.

1. The Company clarifies the scope of decision-making in business execution and the decision-makers when authority is delegated by directors through the "Rules on Division of Duties," "Rules on Administrative Authority," and "Organization Rules," etc. The Company also ensures appropriate business execution through business procedures stipulated in various rules and regulations.

5.

1. The Group has established "Compliance 1st" as a declaration of the Group CEO, and is working on a system to place the highest priority on compliance with laws and regulations when there is a conflict between compliance with laws and regulations and another event. In addition, the company is working to develop a system to prevent the spread of violations and their recurrence by operating an internal reporting system (hotline system).
2. By steadily implementing the recommendations of the Compliance Committee and company-wide internal control measures, the Company is striving to ensure that employees comply with laws and regulations and to further establish a system that conforms to the Articles of Incorporation.

6.

• System for reporting to the Company on matters pertaining to the execution of duties by directors, etc. of subsidiaries
  

  1. At weekly group strategy meetings (teleconference/web conference), subsidiary directors shall report on the details of business execution by the subsidiaries.
  2. The Company's Group Management Department is in charge of operations related to the corporate group, and ensures the appropriateness of operations of the corporate group through the operation of the "Affiliate Company Business Regulations" and internal control efforts aimed at appropriate group management.
  3. The Internal Audit Office strives to ensure the appropriateness of operations by conducting internal control audits of subsidiaries.

• Regulations and other systems for managing risk of loss

  1. At weekly group strategy meetings (telephone conference/web conference), directors of subsidiaries report on matters that may pose a risk of loss to the subsidiaries, and the corporate group shares and discusses information, and works to manage the risk of loss by confirming the current status of the corporate group, managing the progress of plans, analyzing the business environment, and so forth. The Company is making efforts to manage the risk of loss by checking the current status of the Group, managing the progress of plans, and analyzing the business environment.
  2. In the evaluation of risks related to internal control and their improvement, the results of deliberations and resolutions by the Board of Directors of the Company are notified to the subsidiaries, and efforts are made to avoid or reduce such risks.

• System to Ensure Efficient Execution of Duties by Directors, etc. of Subsidiary companies

  1. The Company's subsidiaries shall also have their own Board of Directors and corporate auditors to ensure appropriate mutual monitoring of business decisions and execution.
  2. The Company shall manage and guide the subsidiaries in the execution of their operations in accordance with the "Regulations of Affiliated Companies" and various regulations stipulated by the subsidiaries.

• System to ensure that the execution of duties by directors and employees of subsidiaries complies with laws, regulations, and the Articles of Incorporation

  1. The Company has established "Compliance 1st" as a declaration of the Group CEO, and is working on a system to give the highest priority to compliance with laws and regulations in the event of a conflict between compliance with laws and regulations and some other event. In addition, the Company is working to establish a system to prevent the spread of violations and their recurrence by operating an internal reporting system (hotline system) within the corporate group.
  2. By steadily implementing the recommendations of the Company's Compliance Committee and company-wide internal control measures, the Company is striving to ensure that employees of its subsidiaries comply with laws and regulations and to further establish a system that conforms to the Articles of Incorporation.

7.

1. By steadily implementing the recommendations of the Compliance Committee and company-wide internal control initiatives, we are striving to ensure that all employees comply with laws and regulations and to further establish a system that conforms to the Articles of Incorporation.

8.

1. For employees that apply, they shall assist the duties of the Corporate Auditors under their direction and orders, and their personnel transfer and evaluation shall be made with the prior consent of the full-time Corporate Auditors.

9.

• System for reporting to Corporate Auditors by Directors and employees of the Company
  

  1. Corporate auditors may request reports and information as necessary.
  2. directors shall report to the full-time statutory auditor from time to time on the status of supervision of business execution and the status of business execution at the Board of Directors' meetings or at any other time as requested by the statutory auditor.

• System for reporting to the Company's Corporate Auditors by Directors, Corporate Auditors and employees of subsidiaries or those who receive reports from them.

  1. Corporate auditors of the Company may request reports and information from directors, corporate auditors and employees of subsidiaries as necessary.
  2. Directors, corporate auditors, and employees of subsidiaries shall report to the full-time orporate auditor of the Company, either directly or through the business unit in charge of the corporate group, the status of supervision of business execution and the status of business execution, as appropriate, from time to time, in response to requests from the Board of Directors of the Company or other corporate auditors.

10.

1. The Company and the corporate group shall prohibit retaliation or discrimination against those who report such matters and protect those who report such matters from any disadvantageous treatment under the internal reporting rules (hotline system).

11.

1. Corporate Auditors may request the Company to pay the actual costs of expenses deemed necessary for the execution of their duties by the Company, or may request the Company to pay for expenses incurred by the Corporate Auditors.

12.

1. Two of the three Corporate Auditors are External Corporate Auditors, who attend Board of Directors meetings and provide their opinions when necessary.
2. Corporate Auditors shall inspect important information of each corporate group company as necessary, and interview directors and important employees of each corporate group company individually as necessary.
3. In the event that a Director becomes aware of a serious violation of laws and regulations, the Articles of Incorporation, internal regulations, or any other fact that may cause significant damage to the corporate group, he/she shall promptly report such fact to the Corporate Auditors, who shall request a report or explanation from the Director as necessary.