Governance

1. System to ensure that the execution of duties by directors complies with laws, regulations and the Articles of Incorporation

The Board of Directors meets once a month in principle, and whenever necessary to facilitate communication among directors and to supervise each other's performance of duties.
The performance of duties by directors is subject to audits by each Audit & Supervisory Board member in accordance with the auditing policies established by the Audit & Supervisory Board.

2. System for storing and managing information related to the execution of duties by directors

The Company will store and manage documents related to the directors' performance of their duties and other important information in accordance with laws and regulations and the Company's internal document management regulations.

3. Regulations and other systems for managing the risk of loss

At our company, the General Affairs Department is responsible for monitoring the company-wide risk situation and responding to it, while each division is responsible for managing the risks associated with the business operations under its jurisdiction.
Additionally, we will establish risk management regulations and prepare and maintain manuals for each department as necessary.

4. Systems to ensure that directors execute their duties efficiently

The Company has established appropriate scope of duties and decision-making rules for directors through organizational and administrative authority regulations, division of duties regulations, and approval regulations.
In principle, the Board of Directors meets once a month to discuss important matters and grasp the status of business operations.

5. System to ensure that the performance of duties by employees complies with laws, regulations and the Articles of Incorporation

We are working to establish a company-wide compliance system, and each department head will take responsibility for establishing such a system in accordance with the division of duties regulations.
We have also established an Internal Audit Department, the head of which attends important meetings to ensure that business operations are carried out in accordance with laws, regulations and the Articles of Incorporation.

6. Systems for ensuring the appropriateness of business operations within the corporate group consisting of the company and its subsidiaries

We have established management regulations for affiliated companies. In addition, our directors and employees serve concurrently as officers of our subsidiaries to ensure the appropriateness of business operations within the corporate group.

7. Matters concerning employees who are requested by the Audit & Supervisory Board Members to assist them in their duties

We currently do not have any employees to assist the Audit & Supervisory Board Members in their duties. However, if requested by the Audit & Supervisory Board Members, we will appoint employees to assist them in their duties within reasonable limits after consultation with the Audit & Supervisory Board Members.
At present, the Audit & Supervisory Board is not requesting that employees be appointed to assist it in its duties.

8. Matters concerning the independence of the employees mentioned above from the Directors

The appointment, transfer and other personnel decisions of these employees require the prior consent of the Audit & Supervisory Board Members to ensure their independence from the Directors.

9. A system for the directors and employees of the Group to report to the Audit & Supervisory Board Members and a system for ensuring that those who make reports are not treated unfavorably as a result of making such reports

(1) At our company, directors and employees will provide necessary reports and information in response to requests from each auditor in accordance with the regulations of the Audit & Supervisory Board.
The main reports and information provided are as follows:
1. Status of activities of departments involved in establishing the Company's internal control system
2. Our significant accounting policies, accounting standards and changes thereto
3. Details of the announcement of business results and business forecasts, and details of important disclosure documents
4. Distribution of contract documents, internal memoranda, and meeting minutes requested by the Audit & Supervisory Board Members. (2) In our company, directors and employees of the corporate group will report to the Audit & Supervisory Board Members or the Board of Audit & Supervisory Board Members when an event that may cause or is likely to cause a significant loss to the company occurs, when they discover any illegal or improper activity, or when any other matter that should be reported to the Board of Audit & Supervisory Board Members arises.
(3) The Company prohibits any Director or employee who has reported to the Audit & Supervisory Board Members from being treated disadvantageously because of having made such a report, and will thoroughly inform all Directors and employees of the Company's corporate group of such prohibition.

10. Matters concerning the policy for the processing of expenses or liabilities arising from the execution of duties by the Audit & Supervisory Board Members

When an Audit & Supervisory Board Member requests advance payment or reimbursement of expenses incurred in the performance of his/her duties, the Company shall bear those expenses, unless the expenses are deemed not necessary for the Audit & Supervisory Board Member to perform his/her duties, and shall promptly comply with procedures for advance payment or reimbursement of audit expenses.

11. Other systems to ensure that audits by the Audit & Supervisory Board Members are carried out effectively

The Audit & Supervisory Board Members will receive reports on audit content from the Accounting Auditor and the Internal Audit Office as necessary and will work closely with them.
Additionally, employees of the Management Headquarters assist the auditors in their audits as necessary.

12. System for ensuring the reliability of financial reporting

The Company and its group companies will conduct proper accounting procedures in accordance with the Financial Instruments and Exchange Act and other relevant laws and regulations, as well as generally accepted accounting standards. In order to ensure the reliability of financial reporting, the Company will establish relevant regulations, strive to prevent, detect and correct risks related to financial reporting, and strive to establish, maintain and improve a system of internal controls over financial reporting.

13. Basic policy and status of implementation to exclude anti-social forces

[Basic approach to excluding anti-social forces]
Our company's basic policy is to strive to prevent transactions with anti-social forces and organizations that pose a threat to the order and safety of civil society, and to sever all ties with them.
[Measures to exclude anti-social forces]
With regard to our efforts to eliminate anti-social forces, we recognize the importance of acting in accordance with the law and corporate ethics, and have designated the General Affairs Department as the relevant department to handle any unreasonable demands from anti-social forces.
We also build close cooperative relationships with external specialist organizations such as the police and lawyers, and strive to gather information on and eliminate anti-social forces.

Establishment of a consultation desk

We have set up consultation desks both within and outside the company to respond when people are unsure of their decisions regarding compliance standards, when they become aware of acts that go against them, or when they have other inquiries or questions. We respond appropriately to inquiries and contacts, and in the event of a compliance violation, depending on the content, we will set up a compliance review committee made up of members appointed by the director in charge of compliance to investigate and respond. In addition, if a compliance violation is confirmed, we will take appropriate disciplinary action in accordance with our company regulations, etc.

compliance Reinforcement Month

In order to improve employees' compliance awareness and knowledge, we have set a compliance Reinforcement Month every fall during which we conduct awareness surveys and educational activities, and we also disseminate compliance related information on the company intranet as needed. In addition, we provide rank-specific compliance training once a year for new recruits and newly appointed senior employees, and once a year for mid-career recruits when they join the company, as well as providing customized on-site training upon request from each department.

compliance System