Internal control system

Under its management philosophy, the Company aims to achieve sustainable growth and medium- to long-term corporate value enhancement by ensuring legality, soundness, and transparency; clarifying management and executive responsibilities; strengthening supervisory and audit functions; and promoting accurate, timely decision-making and efficient business operations.
Furthermore, the Group, consisting of the Company and its subsidiaries, respects the autonomy of each entity while pursuing overall optimization as a shared principle, thereby striving for the Group’s long-term sustainable development.
Based on the above, to ensure the proper conduct of the Group’s operations, the Company has established the Basic Policy on the Development of Internal Controls Systems, which incorporates perspectives such as internal reporting and risk management. In accordance with this policy, the Corporate Executive Officers effectively build and operate the internal control system as described below. The Board of Directors monitors the system based on reports on the status of internal control system operations submitted by the Corporate Executive Officers.

Response to the Internal Control Reporting System

To comply with the Internal Control Reporting System under the Financial Instruments and Exchange Act, the Company has established and operates internal controls over financial reporting in accordance with the basic internal control framework indicated by the Financial Services Agency. The Company also evaluates the effectiveness of these controls and makes improvements as necessary.
Furthermore, for the most recent consolidated fiscal year, the internal control report over financial reporting prepared in accordance with this system determined the controls to be effective, and the auditors issued an opinion stating that all significant matters are properly presented.

Overview of the Internal Control System

System to Ensure that the Execution of Duties by Officers and Employees of the Group Complies with Laws and Regulations and the Articles of Incorporation
System for Storage and Management of Information Related to the Execution of Duties by Corporate Executive Officers
Rules and Other Systems for Management of the Risk of Loss of the Group
System to Ensure Efficient Execution of Duties by Corporate Executive Officers
System to Ensure Appropriateness of Operations at the Group's Subsidiaries
Matters Concerning Employees, etc., Assisting the Audit Committee in Performing its Duties
System for Reporting to the Audit Committee and System for Ensuring Effective Auditing by the Audit Committee