• (a)This policy establishes a policy on internal control over financial reporting in the construction of an internal system required by the Companies Act and the Financial Instruments and Exchange Act.
• (b)The development and operation of internal control over financial reporting must comply with this policy.

• (a)The Representative Director has the responsibility to properly evaluate and report on the development and operation of internal control over financial reporting, and must establish an optimal business execution system.
• (b)The Board of Directors is responsible for supervising the development and operation of internal over financial reporting by the Representative Director.
• (c)As a part of monitoring, which is one of the elements of internal control, the General Affairs Department shall examine and evaluate the status of the development and operation of internal controls, and promote improvements as necessary.
• (d)Executives and employees other than a - c must also actively cooperate in the development and operation of internal control over financial reporting.

The position of this policy in the management and business operations of the company and the relationship with related laws and regulations are as follows.

• (a)Management Position
  This is an important component of our corporate governance system, as the development and operation of internal control over financial reporting contributes to the soundness and appropriateness of management, and this policy outlines our philosophy.
• (b)Relationship with Internal Audit
  Since internal audit is an important means of independent evaluation, internal audit must be conducted with proper respect for the purpose of the Policy.
• (c)Relationship with Audit by Corporate Auditors
  Information on activities related to internal control of financial reporting based on this policy must be provided to Corporate Auditors as appropriate.

• (a)Emphasis is placed on reliable and appropriate financial reporting, as a system will be established and operated according to the six elements of internal control (control environment, risk assessment and response, control activities, information and communication, monitoring, response to IT), and attention must be paid to ensuring the reliability and appropriateness of financial reporting in daily operations.
• (b)With regard to internal control over financial reporting, a series of activity cycles such as planning, evaluation, and improvement must be properly implemented.
• (c)A series of activities related to internal control must be regularly, systematically, continuously, comprehensively and actively addressed at appropriate times.
• (d)In determining accounting policies, attention must be paid to truthfulness, clarity, continuity, maintainability, soundness, and importance to contribute to the reliability and appropriateness of financial reporting.

In the development and operation of internal control over financial reporting, the control environment, which is the foundation of organizational operation, must be constructed with attention to the following points.

1. Integrity and ethics
2. Representative director's intention and attitude
3. Management policy and management strategy
4. Functions of the Board of Directors
5. Organizational structure and practices
6. Authorities and responsibilities
7. Systematically secure and develop human resources

• (a)For reliable financial reporting, for the events that affect the achievement of the organizational goals, factors that hinder the achievement of the organizational goals must be identified, analyzed, and evaluated as risks, and addressed.
• (b)リIn risk assessment, the risks that occur inside and outside the organization are classified into risks related to the goals of the entire organization and risks according to operations, and the magnitude, likelihood, frequency, etc. of risks must be analyzed and assessed appropriately depending on their nature.
• (c)Necessary measures such as avoidance, reduction, transfer or acceptance of the assessed risk shall be taken as necessary.
• (d)Risk assessment and response must be conducted on a continuous basis every term.

• (a)In order to ensure reliable financial reporting, we will establish a clear segregation of duties, internal checks, maintenance of continuous records and timely on-site inspections and other physical asset management activities, etc., which are necessary for implementing mechanisms and operations that can be used effectively.
• (b)In order to prevent false descriptions due to fraud and errors, and to make reliable financial reports, clarify the responsibilities of the manager and the person in charge of each business, classify work and approval procedures, work procedures, etc., and conduct the control activities in good faith.

• (a)For the purpose of reliable financial reporting, a system must be established to identify, understand, process, and communicate the information necessary to perform each duties in a timely and appropriate manner, and appropriate operations must be implemented.
• (b)The necessary information must not only be conveyed, but also be properly understood by the recipients and a mechanism to be shared by all those who need the information must be established.

• (a)Routine monitoring to continuously evaluate that internal controls are functioning effectively, and an independent evaluation system must be established.
• (b)Internal control issues, deficiencies, and important deficiencies are communicated to directors, corporate auditors, officers, and persons in charge in a timely and appropriate manner, and a system must be in place to take necessary corrective actions.

• (a)IT must be used effectively and efficiently to ensure the effectiveness of the control environment, risk assessment and response, control activities, information and communication, and monitoring, which are the elements of internal control.
• (b)In order to use IT effectively and efficiently, it is necessary to understand the characteristics of information systems and determine procedures for introduction, operation, verification, etc. based on appropriate policies.

• (a)The Representative Director must periodically confirm that internal controls for financial reporting are in place and operating, and request reports from the department in charge of implementation.
• (b)In preparing business reports and financial documents based on the Companies Act, consideration must be given to the status of the development and operation of internal controls.
• (c)The status of internal control must be reported to the Audit & Supervisory Board Members and the Board of Directors in writing.