Basic Policy on Developing the Internal Control System

The Company has established the following basic policy regarding the internal control system of the corporate group, consisting of the Company and its subsidiaries, etc. (hereinafter referred to as the "Company Group"). The Company shall establish an internal control system for the Group based on this basic policy and will continuously improve it through constant reviews to establish a more appropriate and efficient system.

１．System to Ensure that Directors and Employees Execute Their Duties in Compliance with Laws, Regulations, and the Articles of Incorporation

The Company shall establish the Company's Values and Credo based on the mission "Solving Social Issues through Artificial Intelligence for Future Generations," and the directors and employees of the Company Group shall put them into practice.
The Company shall establish "Compliance Regulations" common to the Group and shall establish a Compliance Committee headed by the President of the Company.
The Compliance Committee shall establish a "Compliance Code," send a message to the directors and employees of the Group that compliance is the top priority in the execution of their duties and shall implement specific measures to ensure compliance.
The Company shall establish an Internal Audit Department under direct control of the President to conduct internal audits of the Group. The results of internal audits shall be reported to the President, the Board of Directors of the Company, and the Company’s Board of Corporate Auditors.
The Company shall establish an internal whistle-blowing system to provide information within the Company and to third-party organizations to detect and prevent any violation or potential violation of the Group's compliance.
The Company shall also keep confidential the personal information of any person who provides information through the internal reporting system and prohibit any disciplinary action or any other disadvantageous treatment of such a person for providing such information.

２．System Concerning the Retention and Management of Information on the Execution of Duties by Directors

The Company shall establish rules for the storage and management of information and shall appropriately store and manage the minutes of important meetings of the Board of Directors, the Management Committee, and other information related to the execution of duties by Directors according to the importance of the information and the nature of the recording media.
The Corporate Planning Department and the Legal Department shall store and manage such information in a secure and searchable manner so that they can promptly respond to inspection requests from directors and corporate auditors.

３．Rules and Other Systems Concerning Management of Loss Risks

Based on the "Basic Sustainability Policy" and the "Basic Corporate Governance Policy," the Company shall establish the "Risk Management Regulations" common to the Group, position the Company's Executive Committee as the entity that oversees and promotes risk management for the entire Group, and establish and operate a risk management system.
The Executive Committee shall identify significant risks and opportunities from a perspective of business and cross-organizational risk management and shall decide upon policies for dealing with such risks and other important matters. It shall also report the status of its activities to the Executive Committee and the Board of Directors as appropriate.
From the viewpoint of the importance of internal control, the Company shall establish the Risk Management Committee, chaired by the President, as a subordinate organization of the Executive Committee for information security risks, legal risks, and reputation risks. This Committee shall promote routine risk management and establish a system to deal with crises promptly and appropriately as they occur.
For information security, the Company shall establish and publicize the "Information Security Basic Policy" and establish an information security management system, which shall be properly maintained and continued.
With respect to information security, the Company shall establish and announce its "Basic Policy on Information Security," establish an information security management system, and properly maintain and continue the system.
In accordance with the "Risk Management Regulations," each Group company and division shall strive to identify and manage risks appropriately for each business or operation in charge and shall share information with other divisions to ensure early detection and prevention of risks.
The Executive Committee shall periodically monitor the status of risk management at each Group company and division.
In the event of a major crisis, the Company shall promptly establish a task force, etc. headed by the President to deal with the crisis appropriately, including the appropriate dissemination of information internally and externally.

４．System to Ensure Efficient Execution of Duties by Directors

The Company shall establish "Rules of the Board of Directors," "Rules on the Division of Duties," and "Rules on Administrative Authority" to clarify the duties, authority, and responsibilities of the Directors, and to appropriately delegate authority so that the execution of their duties can be performed efficiently.
The Board of Directors shall make decisions on matters stipulated by laws and regulations, the Articles of Incorporation, and other important management matters, and supervise Directors on the execution of their duties.
Board of Directors meetings shall be held regularly once a month. Extraordinary meetings of the Board of Directors shall also be held as required.
The Board of Directors shall deliberate on agenda items and criteria for the Board of Directors meetings from time to time to supervise business execution.

５．System to Ensure Appropriate Operations Within the Corporate Group Comprised by the Company, Parent Company, and Subsidiaries

The Company shall ensure that the Company's Mission, Values, and Credo are understood and implemented as the common philosophy and code of conduct of the Company Group. The Company shall also establish major rules and regulations necessary to implement this basic policy and apply them to each of its group companies. Application of these rules and regulations shall be appropriately designed in consideration of the laws, regulations, culture, and business environment of the country or region where the subsidiary is located and shall respect the autonomy of the subsidiary.
For the management of group companies, the Company shall establish "Group Company Management Regulations" under the authority of the Corporate Planning Division and shall establish a system to understand the business execution and financial reporting of each group company in accordance with its organization, country/region where it is located, and business domain. In addition, the Company shall dispatch officers or employees from the Company to collect appropriate information and monitor whether decisions or reports are made in accordance with the "Group Company Management Regulations,” as required.

６． Appointment of an Employee/Employees to Assist the Duties of Audit & Supervisory Board Members

If a corporate auditor requests the appointment of an assistant, the Board of Directors shall, upon consultation with the relevant corporate auditor, appoint an assistant to the corporate auditor.
Supporting employees shall not be subject to the direction or orders of directors, superiors, or others with respect to their duties in assisting the corporate auditors and shall be subject only to the direction and orders of the corporate auditors.
The Company shall obtain the consent of the Corporate Auditors with respect to the transfer and evaluation of assistant employees and disciplinary actions against assistant employees.

７．System to Ensure that Individuals Reporting to Audit & Supervisory Board Members Are Not Treated Unfavorably on the Grounds of Such Reporting.

The Group shall keep confidential the personal information of any person who makes a report to the Corporate Auditors and prohibit any disciplinary action or any other disadvantageous treatment of a person who makes such a report by reason of the fact that such person has made such a report.

８．Policies on Procedures for Advanced Payments or Reimbursement of Expenses Incurred in Association with the Execution of Duties by Audit & Supervisory Board Members, and on Handling of Other Expenses or Obligations Incurred in Association with Such Duties

When a corporate auditor makes a request for prepayment or reimbursement of expenses incurred in the performance of his/her duties, the Group shall promptly dispose of such expenses or liabilities, unless such expenses or liabilities are reasonably deemed not necessary for the performance of the corporate auditor's duties.

９．System to Ensure Effective Auditing by Audit & Supervisory Board Members

The Group shall establish a system to ensure that audits by corporate auditors are conducted effectively by, for example, ensuring regular or irregular meetings or opportunities as follows, in response to requests from corporate auditors.

The Group will hold regular meetings with each director to ensure mutual communication.
To inspect information concerning the execution of duties by directors and employees as required, and to request explanations of such information.
To exchange information regularly with the accounting auditor and the person in charge of the internal audit, and to promote mutual cooperation.
To seek opinions from attorneys, certified public accountants, and other experts when deemed necessary for audit work.

Basic Policy on Elimination of Antisocial Forces and Status of Improvement

The Company has established the following policies in its "Basic Policy on the Internal Control System" and has developed a system for eliminating antisocial forces. In addition, the Company has established a system to comprehensively implement anti-social forces checks on transactions by introducing an internal workflow system.

Basic Policy for the Elimination of Antisocial Forces

The Group's basic policy is to have no relationship with antisocial forces, groups, or individuals, and not to accept unreasonable or illegal demands.
The Company shall endeavor to routinely collect information from relevant administrative agencies, etc. When a case arises, the Company shall work closely with relevant administrative agencies and legal experts to establish a system that enables the entire organization to promptly deal with the situation.