Basic Approach

1

The Company shall position the following three items from the Ethics Charter as corporate action guidelines: "roles and responsibilities within society," "compliance with laws and regulations," and "fostering of a corporate culture that facilitates respect for human rights and free, unrestrained pursuits by employees." Furthermore, the Company shall adopt as its basic stance toward operations the pursuit of growth and development together with society. In order to achieve perpetual growth as leading member of its industry, the Company establishes and manages a system of internal controls and strives to realize the precepts of the Ethics Charter.

2

The Board of Directors shall establish the Basic Internal Controls Policy, and give instructions and carry out supervision in relation to implementation of internal controls. The Board of Directors shall also perform checks on the status of the policy's establishment and operation, and carry out revisions to the basic policy and measures as necessary.

3

The president and representative director of the Company (hereafter, "the president") shall form the Internal Control System Promotion Committee and serve as is head. Additionally, through implementation of internal control system programs and similar, the president shall pursue concrete measures focused primarily on ensuring trust in the Company's financial reports.

Framework to Guarantee Compliance with Laws, Regulations and the Articles of Incorporation in Execution of Duties by Directors and Users at the Company and Its Subsidiaries

1

Based on the Ethical Principles (comprising the Management Philosophy, Ethics Charter and Code of Conduct) established by the Company, and under the firm leadership of the president, all executive-level employees of the Company and its subsidiaries shall pursue repeated study and training, develop sufficient awareness of the Company's roles and responsibilities within society, and adopt a basic stance of growing and developing together with society. These shall be ensured for all said directors in a thoroughgoing manner.

2

The president shall form the Compliance Committee and serve as its head. This committee shall establish and operate a cross-divisional compliance framework for the Company as a whole, and strive to identify problems that occur therein.

3

A thoroughly implemented framework shall be established to enable any director, Audit Committee member, or compliance officer in any division/department, who belongs to the Company or any of its subsidiaries, to report to the Compliance Committee as quickly as possible if they identify a compliance-related problem. The raison d'être for and awareness of the Corporate Ethics Hotline, which is a contact point for compliance-related consultations enabling direct reporting and consultations by members of the Company and its subsidiaries, shall be disseminated widely.
Any Compliance Committee member who receives a report or consultation request shall investigate the matter at hand accordingly, decide on a means of preventing reoccurrence together with the head or heads of any relevant division/department, and establish the reoccurrence prevention measure(s) firmly throughout the entire company.
The Compliance Committee member shall respond, in accordance with the separately established Whistleblower Protection Regulations, to the person making a report or engaging in consultation, and publicly release information as appropriate.

4

Internal audit offices at the Company and its subsidiaries shall coordinate with the Compliance Committee to monitor and check compliance-related conditions.

5

If any user from the Company or any of its subsidiaries is deemed to be in violation of a law, regulation, or the Articles of Incorporation, the Compliance Committee shall submit a request for disciplinary action to the Planning and Management Division, after which the Compliance Committee shall submit to the Board of Directors a report on the specific disciplinary action(s) for the director in violation.

6

The Planning and Management Division shall be assigned as the division in charge of responding to inappropriate demands and similar made by antisocial forces, and the Company and its subsidiaries shall prepare response manuals and train employees accordingly. Firm and resolute responses shall be taken to such antisocial forces in coordination with the police and other relevant organs.

Storage and Management System for Information on Directors' Execution of Duties

1

The president shall issue instructions to the Planning and Management Division and assigned directors, and directors (refers to all directors except audit committee members) shall follow the stipulations of the Document Management Regulations and Information Security Management Regulations which are used and regulated on a Company-wide scale as they pursue storage and management activities for information on directors' execution of duties. Furthermore, said directors shall make records of and preserve said information in both paper-document and/or electronic format.

2

Directors (refers to all directors except audit committee members) shall have access to the abovementioned documents and information whenever necessary.

Regulations and Frameworks Regarding Management of Loss-related Risk for the Company and Its Subsidiaries

1

The Risk Management Regulations shall be established, risk maps created, and responsibility for individual risk categories assigned to specific divisions/departments. The president shall form the Risk Management Committee and serve as its head. This committee shall take charge of comprehensive, wide-reaching risk management for the Company and its subsidiaries, establishing response measures and pursuing risk control for high-priority risk items. Whenever a new risk category is identified, a new divisional/departmental assignment shall be made at the earliest possible time.

2

The Internal Audit Office shall monitor risk management status for each assigned division/department, report those results on a regular basis to the Risk Management Committee and Board of Directors, and deliberate and decide on improvement measures as necessary.

Framework to Guarantee Efficient Execution of Duties by Directors at the Company and Its Subsidiaries

The following business management measures shall be taken, in sufficiently thoroughgoing manner, to promote efficiency in the execution of duties by directors (refers to all directors except audit committee members; this definition of "director" applies for the remainder of this article) at the Company and its subsidiaries:

1

Revisions shall be made as necessary to the Board of Director Regulations, Organizational Regulations, Operational Authority Regulations, and Regulations on Segregation of Duties in order to clarify scopes of authority as well as decision-making rules.

2

Improvements toward expansion and speeding-up of communications shall be implemented for the Group-wide Joint Management Council comprising directors, division/department managers and subsidiary directors (this council hereafter referred to as "the Management Council"), with said expansion entailing participation in the Management Council by directors belonging to the Internal Audit Office and Audit Committee.

3

Monthly business-result reviews and improvement measures shall be implemented by the Management Council and the Board of Directors.

Framework to Ensure Correct and Appropriate Execution of Duties Throughout the Corporate Group Comprising the Company and Its Subsidiaries, and Reports to the Company Regarding Director Duties at Subsidiaries

1

The Company and its subsidiaries shall endeavor to create and establish internal controls, and also create a framework that contains systems facilitating efficient communication of instructions, demands and similar through monthly meetings of the Management Council.

2

Directors at the Company (refers to all directors except audit committee members), division and department managers, and subsidiary directors shall have the authority and responsibility to establish and operate systems of internal controls that guarantee correct and appropriate execution of duties by each division/department.

3

The Company's Internal Audit Office shall confirm, via internal audits of the Company and its subsidiaries, the correct and appropriate execution of duties among Group companies.

4

The Affiliated Company Management Regulations shall be established, items requiring discussion in advance as well as items requiring reporting, by a subsidiary together with the Company, shall be clearly established, and a framework for discussions and reports shall be created.

Stipulations Regarding Staff Additions in Response to Additional Staff Requests for Purposes of Assisting the Audit Committee, and Independence of Said Additional Staff from Directors as Well as Measures to Ensure Effectiveness of Instructions Issued to Said Additional Staff by the Audit Committee

1

At the present time, the Company does not intend to appoint any additional staff for purposes of assisting within the current framework. However, if the Audit Committee determines that a staff addition(s) is necessary and demands said addition(s), said action shall be taken as rapidly as possible. Any additionally appointed staff shall maintain independence from the in-house organizational framework.

2

The Audit Committee shall be empowered to give orders to Internal Audit Office members regarding required auditing duties. However, no auditor from the Internal Audit Office shall respond to any instruction or order from a director (refers to all directors except audit committee members; this definition of "director" applies for the remainder of this article), the head of said Office, or person of similar authority in relation to the abovementioned orders issued to the auditor out of necessity. Furthermore, all directors and additionally appointed staff shall cooperate to the best of their abilities to instructions issued to the additionally appointed staff in question by the Audit Committee in order to fulfill said instructions.

Framework for Reporting to the Audit Committee by Company or Subsidiary Director, Other Staff Member, or Person Targeted by Report, and Framework Ensuring That No Report Causes Disadvantage to Any Person

1

The Audit Committee shall hold discussions for purposes of establishing regulations prescribing items that must be reported to the Audit Committee, and thereafter directors (refers to all directors except audit committee members) shall report the following items:

A. Items that pose the threat of major damage to the Company

B. Important items related to monthly management conditions

C. Important items related to internal auditing conditions and risk management

D. Major violations of any law, regulation, or item from the Articles of Incorporation

E. Status of reports and consultation conditions, as well as the details of said reports/consultations, for the compliance-related consultations contact point (Corporate Ethics Hotline)

F. Any other important compliance-related item

2

If any staff member discovers anything significant or important related to items B and E above, said member shall be empowered to report directly to the Audit Committee.

3

Any person making a report shall take every precaution necessary to ensure that no disadvantage or unfavorable position is suffered in compliance with the separately established Whistleblower Protection Regulations.

Procedures for Requesting Reimbursement in Advance or Afterward for Expenses Incurred by Execution of Duties by Any Director Who is an Audit Committee Member, and Policy for Handling Other Costs and Debts Resulting from Execution of Duties

1

If any expense is incurred by execution of duties or similar activities by a director belonging to the Audit Committee, said director shall be empowered to request reimbursement from the Company based on the separately established Audit Committee Auditing Standards, regarding which the Audit Committee shall first take consideration of the efficiency and correctness of the director's performance.

Other Frameworks for Ensuring Practical Implementation of Auditing Duties by the Audit Committee

1

The Audit Committee Regulations and Scope of Audit Committee Authority shall be utilized to clarify division of duties, and information exchanges shall be conducted through regular discussion meetings with the president, "Management Letters" from accounting auditors, and other means of regular information exchange. In addition, a framework shall be created to enable the seeking of advice from consulting lawyers and other such experts as necessary.