Basic Concept of Internal Control System

1. System to ensure the appropriateness of business operations

The following is an outline of the decisions regarding the system to ensure that the execution of business by directors complies with laws and regulations and the Articles of Incorporation, as well as the system to ensure the appropriateness of other business operations.

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

1. The Board of Directors shall establish compliance regulations and endeavor to establish a compliance system to ensure that the execution of duties by directors and employees complies with laws and regulations and the Articles of Incorporation.
2. We will regularly provide compliance education to employees in order to instill and improve compliance awareness.
3. The Internal Audit Office will audit the effectiveness of the compliance system and report the status of the compliance system to the Representative Director and President.
4. If any director or employee discovers that the performance of their duties does not comply with laws, regulations, or the Articles of Incorporation, they will report this to the Board of Directors and the Audit and Supervisory Committee. Each Audit and Supervisory Committee member will audit the performance of duties by directors.

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

1. Information related to the execution of duties by directors will be recorded in documents (paper or electronic media) and properly stored and managed in accordance with laws and regulations, the Articles of Incorporation, and internal rules and policies such as the "Document Management Regulations." Directors and Audit and Supervisory Committee members will be able to view these documents.
2. Information security will be continuously improved in accordance with the Information Security Management Regulations.

3) Rules and other systems for managing the risk of loss

1. In order to manage risks related to overall management, we have established risk management regulations and compliance regulations, and the Internal Audit Office will establish and verify the implementation status of these regulations, as well as regularly provide training to all employees (including directors, audit and supervisory committee members, employees, contract employees, etc.).
2. The Company will strive to establish a rapid crisis management system by having the Management Committee, which is comprised of directors, Audit and Supervisory Committee members, and key employees, discuss compliance, risk management, and information security.

4) Systems to ensure that directors and employees execute their duties efficiently

1. In principle, the Company will hold a management meeting once a week, a regular board of directors meeting once a month, or extraordinary board of directors meetings whenever necessary, in order to share information and communicate ideas, make important decisions regarding business execution in a timely manner, and supervise the business execution status of directors.
2. The authority and responsibility for the execution of duties shall be determined by internal rules such as the "Board of Directors Rules," "Organizational Rules," and "Administrative Authority Rules," and shall be reviewed as necessary.

⑤System to ensure the appropriateness of business operations within the corporate group consisting of the Company, its parent company, and subsidiaries

In order to prevent inappropriate transactions or accounting practices between the Company, its parent company, and its subsidiaries, the Internal Audit Department will conduct regular internal audits and report the results to the Representative Director, President, and Audit and Supervisory Committee members, thereby ensuring the appropriateness of all business operations.

⑥ Matters concerning employees who request the appointment of an employee to assist the Audit and Supervisory Committee members in their duties

If the Audit and Supervisory Committee requests that an employee be appointed to assist in the performance of their duties, such duties shall be performed by a member of the Administration Department within a reasonable scope after consultation with the Audit and Supervisory Committee.

⑦ Matters concerning the independence of the employees mentioned in the previous item from other directors (excluding directors who are audit and supervisory committee members)

1. The employees in the preceding paragraph shall not receive instructions or orders from directors regarding the performance of duties instructed by the Audit and Supervisory Committee members.
2. The appointment and transfer of employees as set forth above will be reported to the Audit and Supervisory Committee members in advance and their approval will be obtained.

8) Systems for directors and employees to report to the Audit and Supervisory Committee and other systems for reporting to the Audit and Supervisory Committee

1. If there is a possibility that an event that could cause significant damage to the company has occurred or has already occurred, or if there is a possibility that an event that violates laws, regulations, or the Articles of Incorporation has occurred or has already occurred, directors and employees must report the event to the Audit and Supervisory Committee members.
2. The Representative Director and President, other Directors, and Audit and Supervisory Committee Members shall exchange information on a regular or irregular basis regarding the status of compliance and risk management efforts at the Company and other management issues, and shall strive to foster mutual understanding among Directors and Audit and Supervisory Committee Members.

9) Other systems to ensure that audits by the Audit and Supervisory Committee are carried out effectively

1. Audit and Supervisory Committee members may attend meetings of the Board of Directors as well as management meetings and other meetings, and receive reports on important matters.
2. Audit and Supervisory Committee members can freely inspect the records of decision-making and business execution by directors, etc., including various meeting minutes and approval documents (paper or electronic media).
3. The Audit and Supervisory Committee members will cooperate and collaborate with the Internal Audit Office and will regularly hold forums to exchange opinions with the Representative Director and President.

10. System to ensure the reliability of financial reporting

In order to ensure the reliability of financial reporting and the effective and appropriate submission of internal control reports as stipulated in the Financial Instruments and Exchange Act, the Company shall, in accordance with the Financial Instruments and Exchange Act and other related laws and regulations, establish and maintain an internal control system related to the Company's financial reporting, and regularly and continuously evaluate that system to ensure its effectiveness and appropriate functioning, thereby ensuring compliance with the Financial Instruments and Exchange Act and related laws and regulations.

⑪System for excluding anti-social forces

1. The Company will take a firm stance against antisocial forces and reject any and all relationships with antisocial forces in its Antisocial Forces Countermeasures Regulations, and will thoroughly inform all directors, Audit and Supervisory Committee members, and employees of these regulations.
2. We will establish a system to cooperate with external specialized agencies such as the police to resolve unreasonable demands, organized violence, and criminal acts by anti-social forces.