1. Basic Policy on Internal Control System and Status of Its Development

[Items necessary for the execution of duties of the Audit Committee]

• (1) Matters concerning directors and employees to assist the Company's Audit Committee in the performance of its duties (Article 112, Paragraph 1, Item 1 of the Ordinance for Enforcement of the Companies Act)In the event that it becomes necessary for the Audit Committee to investigate matters relating to the execution of duties by other committees in the course of performing its duties, the director who is the chairperson of such committee is obligated to actively cooperate in such investigation. With respect to employees who are to assist the Audit Committee in the performance of its duties, there is one or more members of the Management Audit Department, which assists the Audit Committee in the performance of its duties.
  

• (2) Matters concerning independence of directors and employees in (1) above from the Company's executive officers (Item 2)After obtaining the approval of the Audit Committee, the President & Executive Officer of the Company decides matters concerning employment conditions including appointment, personnel transfer, wages, and other remuneration of employees belonging to the Management Audit Department.

• (3) Matters concerning ensuring the effectiveness of the Audit Committee's (1) Instructions to directors and employees (Item 3)If it becomes necessary for the Audit Committee to investigate matters relating to the execution of duties by another committee in the course of the performance of its duties, but the Audit Committee determines that the cooperation of the director who chairs that committee is insufficient, the Audit Committee reports to the Board of Directors that in a timely manner and actively seeks cooperation from all directors, making it known to all directors.
  The President & Executive Officer informs executive officers and employees that the employees who assist the Audit Committee in the performance of its duties are subject to the direction and orders of the Audit Committee and that such employees have the authority to collect information necessary for the performance of audits.

• (4) The following systems and other matters related to reporting to the Audit Committee (Item 4)(a) System for reporting to the Audit Committee by the Company's directors (excluding directors who are the members of the Audit Committee), executive officers, and employees (Item 4 (I))
  a. The President & Executive Officer of the Company reports to the Audit Committee on matters deliberated and reported at the General Manager Meeting consisting of executive officers and the departments’ general managers, and has other opportunities to exchange opinions with the Audit Committee members as necessary and appropriate.
  b. The President & Executive Officer ensures that the results of internal audits conducted by the Management Audit Department are also reported to the Audit Committee.
  c. The Company establishes the Internal Reporting System, which facilitates the discovery of misconduct by executive officers, directors, or employees in the performance of their duties or other facts that may violate laws, regulations, or the Articles of Incorporation or cause significant damage to the Company and establishes the system to ensure that the status of such misconduct is appropriately reported to the Audit Committee.
  (b) System for reporting to the Company's Audit Committee by directors, auditors, executive officers, employees who execute the business of the Company's subsidiaries and other persons equivalent to these persons and employees or persons who receive reports from these persons (Item 4 (RO))
  a. Directors and employees of the subsidiaries promptly make appropriate reports when requested by the Audit Committee of the Company on matters concerning the execution of business.
  b. The President & Executive Officer ensures that major subsidiaries have the Internal Reporting Systems in place and that reports through such systems are made not only to the relevant bodies of the subsidiaries but also to the Audit Committee and the compliance department of the Company, so that there is no risk of misconduct or other violations of laws, regulations, or the Articles of Incorporation by directors and employees of the subsidiaries in connection with the execution of their duties. This will facilitate the discovery of any misconduct by directors and employees of the subsidiary in the performance of their duties and other facts that may violate laws, regulations, or the Articles of Incorporation of the Company. The system is established to ensure that the situation is also appropriately reported to the Company's Audit Committee.
  c.The President & Executive Officer ensures that the results of internal audits of subsidiaries conducted by the Management Audit Committee are also reported to the Company's Audit Committee.

• (5) System to ensure that a person who makes a report as described in (4) above will not be subjected to any disadvantageous treatment because of such report (Item 5)The President & Executive Officer prohibits any person who makes a report to the Audit Committee from being treated disadvantageously by reason of such report and ensures that executive officers and employees, as well as directors and employees of subsidiaries, are informed to this effect.

• (6) Matters concerning procedures for prepayment or reimbursement of expenses incurred in connection with the execution of duties by Audit Committee members of the Company (limited to those related to the execution of duties by the Audit Committee) and other policies concerning the treatment of expenses or liabilities incurred in connection with the execution of such duties (Item 6)When an Audit Committee member makes a request for advance payment of expenses, etc. in connection with the performance of a member’s duties, the Company promptly disposes of such expenses or liabilities, unless the expenses or liabilities in connection with such request are not necessary for the performance of the Audit Committee member's duties.

[System to Ensure the Appropriateness of Operations]

• (1) Matters concerning the storage and management of information related to the execution of duties by the Company's executive officers (Article 112, Paragraph 2, Item 1 of the Ordinance for Enforcement of the Companies Act)The President & Executive Officer stores and manages information in accordance with internal rules and takes necessary measures to prevent leakage of such information outside the Company.

• (2) Rules and other systems for management of risk of loss (Item 2)a. The President & Executive Officer establishes risk management regulations, establishes a person responsible for each type of risk and risk management procedures based on manuals and ensures that an appropriate management system is established and operated.
  b. The Management Audit Department checks the operation of the risk management system at least once a year and reports to the President & Executive Officer and the Audit Committee.
  c. In the event of the emergence of new risks, the President & Executive Officer promptly assumes responsibility for responding to such risks.

• (3) Other matters concerning the system to ensure that the execution of duties by the Company's executive officers and employees comply with laws and regulations and the Articles of Incorporation and that they perform their duties efficiently (Items 3 and 4)a. The President & Executive Officer establishes and follows the "Compliance Training Manual" to ensure that executive officers and employees strictly comply with relevant laws, regulations, and the Articles of Incorporation in all aspects of corporate activities and act in accordance with social common sense based on high ethical and moral standards. The Compliance Committee is established to promote compliance.
  b. The President & Executive Officer establishes the Internal Reporting System.
  c. The President & Executive Officer deliberates important matters concerning ordinary business operations at General Managers” Meetings and reports the contents of such deliberations to the Audit Committee on a regular basis.
  d. The President & Executive Officer formulates rules of authority and ensures efficient execution of duties.
  e. The Management Audit Department conducts internal audits and reports to the President & Executive Officer and the Audit Committee.

• (4) The systems below mentioned and other systems to ensure the appropriateness of operations of the company group consisting of the Company, its parent company, and its subsidiaries (hereinafter the "Company Group") (Item 5)(a) System for reporting to the Company on matters pertaining to the execution of duties by directors, executive officers, employees executing business of the Company's subsidiaries and other persons equivalent thereto (hereinafter "directors, etc." in (c) and (d)) (Item 5 (I)).
  a. The President & Executive Officer, in accordance with the Subsidiary Management Regulations, requests subsidiaries to submit relevant materials, etc. as necessary in order to accurately understand the management details of the subsidiaries.
  b. The President & Executive Officer requests the presidents, directors or employees of subsidiaries to attend meetings of the Board of Directors of the Company, as necessary, in order for the subsidiaries to report to the Company on their business performance, financial position, and other important information.
  (b) Rules and other systems for managing the risk of loss of the Company's subsidiaries (Item 5 (RO))
  a. The President & Executive Officer formulates risk management regulations that stipulate risk management for the entire group, requires subsidiaries to manage risks under the said regulations, and comprehensively and comprehensively manages risks for the entire group.
  b. The Management Audit Department confirms the status of operation of the risk management system of the subsidiaries and reports to the President & Executive Officer and the Audit Committee.
  (c) System to ensure the efficient execution of duties by directors, etc. of the Company's subsidiaries (Item 5. (HA))
  a. The President & Executive Officer formulates the Subsidiary Management Rules in order to contribute to the efficient operation of the Company's group management, while respecting the autonomy and independence of the management of subsidiaries.
  b. The subsidiaries formulate rules of authority to ensure efficient execution of duties.
  (d) System to ensure that the execution of duties by directors and employees of the Company's subsidiaries complies with laws and regulations and the Articles of Incorporation (Item 5 (NI))
  a. The President & Executive Officer establishes a system to assign an appropriate number of auditors and compliance promotion officers to each subsidiary in accordance with the nature and scale of the subsidiary's business.
  b. The President & Executive Officer has subsidiaries establish a system under which subsidiary auditors audit the execution of duties by directors, etc. and employees of subsidiaries including the status of establishment and operation of the Internal Control Systems.
  c. The subsidiary is a company with a board of directors, and the Company's officers and employees serve as directors so that the Company can monitor the appropriateness of the subsidiary's operations.
  d. The President & Executive Officer has major subsidiaries establish the Internal Reporting System.

[Summary of Operation of the System to Ensure the Appropriateness of Operations].

2. Basic Policy and Status of Establishment for Elimination of Antisocial Forces