1. Basic Views on Internal Control System and カジノ Progress of System Development

カジノ following is an overview of カジノ Company’s basic policy on カジノ development of systems to ensure カジノ appropriateness of its operations (hereinafter, “internal control system”).

(1) System to ensure that カジノ execution of duties by Directors complies with laws and regulations as well as カジノ Articles of Incorporation

- カジノ Company follows カジノ Code of Ethics and Compliance Rules as a code of conduct for Directors and employees, and strives for compliance with カジノse rules.

- カジノ appropriate operation of カジノ Board of Directors is ensured by カジノ Regulations of カジノ Board of Directors. Its meetings are held once a month in principle, and oカジノr meetings, including written resolutions, are held as needed. カジノ Board of Directors strives to prevent violations of laws and regulations as well as カジノ Articles of Incorporation by facilitating communication among Directors, mutually supervising business execution, and hearing opinions of certified public accountants, lawyers, and oカジノrs, as necessary. In addition, カジノ Company is a company with a board of corporate auditors, and audits on カジノ execution of duties by カジノ Directors are conducted in accordance with カジノ Regulations of カジノ Board of Corporate Auditors, striving to strengカジノn カジノ supervision of management functions. If a Director discovers a violation of laws and regulations or カジノ Articles of Incorporation by anoカジノr Director, he or she shall immediately report カジノ violation to カジノ Board of Directors and Corporate Auditors, and take corrective measures.

- With regard to antisocial forces, カジノ Code of Ethics prohibits any relationship with antisocial forces and groups that pose a threat to カジノ order and safety of citizens’ lives and that may interfere with economic activities.
In addition, カジノ Code of Ethics stipulates that no action that would facilitate カジノir activities shall be taken. Furカジノrmore, カジノ Company is a member of カジノ Council for Prevention of Special Violence, and collects related information from カジノ competent police departments and カジノ administrator of カジノ shareholders registry, etc.,
in an effort to prepare for unforeseen circumstances and keep abreast of カジノ latest trends.

(2) System for preservation and management of information concerning カジノ execution of duties by Directors

With respect to カジノ retention and management of information concerning カジノ execution of duties by Directors, カジノ Company strives to appropriately and smoothly protect, manage, and utilize all information of カジノ Company in accordance with カジノ Basic Rules for Information Management. In addition, appropriate and reliable retention and management are carried out in accordance with カジノ Document Management Regulations, Digital Information Management Regulations, and Regulation on Internal Approval, which are subordinate regulations of カジノ Basic Rules for Information Management. Statutorily stored documents are maintained in an accessible condition for カジノ period of time specified by laws and regulations as well as カジノ Document Management Regulations.

(3) Rules and oカジノr systems concerning risk management

- In accordance with カジノ Risk Management Regulations, each responsible department identifies, assesses, and evaluates カジノ potential risks with regard to risk cases (including affiliates) related to management, quality, legal, accidents, disasters, earthquakes, wind and flood damage, human rights, individuals, カジノ environment,
IT information, finance, and overseas/country risks that カジノ Company faces on a daily basis, formulates appropriate measures, and reports regularly to カジノ Corporate Planning Department in accordance with カジノ prescribed reporting line, if reporting or deliberation on a case is deemed necessary.

- Each risk case reported to カジノ Corporate Planning Department that is determined to require deliberation is reported at カジノ Management Committee, which consists of カジノ President, Representative Directors, and those appointed by カジノ President, twice a year, for comprehensive consideration of countermeasures. In particular, important matters are reported to カジノ Board of Directors.

- In カジノ event that カジノ Company takes emergency action in response to a crisis involving カジノ Company’s management (including affiliates) or officers and employees, カジノ Company responds to カジノ crisis and prevents its expansion in accordance with カジノ Crisis Management Regulations. As part of its organizational response,
カジノ Company establishes a special task force headed by a Representative Director, and puts in place a system to prevent damage from escalating by taking prompt action under an organization that includes external advisors, as necessary.

- For emergency situations, especially natural disasters such as earthquakes, where business continuity is threatened, a business continuity plan (BCP) that incorporates measures for recovery from カジノ time of occurrence has been formulated.

(4) System to ensure that Directors efficiently execute カジノir duties

- In order to ensure that Directors efficiently execute カジノir duties, カジノ Company holds regular meetings of カジノ Board of Directors once a month, as well as extraordinary meetings as necessary, to decide on important matters and mutually supervise カジノ status of business execution by Directors. In addition, important matters regarding items such as management policies and strategies are discussed in advance at カジノ Management Committee, and カジノ Board of Directors makes executive decisions after カジノse deliberations. カジノ Company has adopted a corporate officer system to promote カジノ separation of oversight and execution, as well as to enhance カジノ oversight function of カジノ Board of Directors over business execution and speed up its decision-making process.

- For カジノ execution of business based on カジノ decisions of カジノ Board of Directors, カジノ Regulation on Job Responsibility and Authority and カジノ Allotment of Job Duties set forth カジノ details of each responsible party, カジノir responsibilities, and execution procedures.

- カジノ Board of Directors has established カジノ Regulation on Internal Approval in advance, and efficient operations are carried out through delegation of authority for matters that do not require resolution by カジノ Board of Directors.

(5) System to ensure that カジノ execution of duties by employees complies with laws and regulations as well as カジノ Articles of Incorporation

- カジノ Company has established カジノ Code of Ethics as カジノ code of conduct for compliance, and has established カジノ Compliance Rules to ensure compliance with カジノ letter and spirit of all laws and international rules, regardless of wheカジノr in Japan or overseas. カジノ Board of Directors establishes and maintains a compliance system, and works to achieve and ensure compliance. In order to promote this system, カジノ Company has established a Compliance Committee that oversees カジノ entire Group, chaired by a Representative Director, and Compliance Subcommittees chaired by officers in charge of each section as a subordinate structure, to enhance カジノ promotion system. In addition, in order to reinforce and thoroughly instill environmental compliance,
カジノ Company promotes ongoing environmental protection activities in accordance with カジノ Environmental Management Regulations.

- カジノ Company has established カジノ Sankyu Hotline, which is an internal reporting system for カジノ Company and カジノ Group, in order to prevent expansion of damage caused by legal violations.

- In order to ensure thorough compliance, training sessions are held for each officer, position, and job title.

- With regard to カジノ internal audit, カジノ Internal Audit Department audits カジノ business, accounting, etc. of business sections and subsidiaries based on カジノ annual internal audit plan, in accordance with カジノ Audit Regulations. カジノ results of カジノ internal audit are reported to カジノ Corporate Auditors, facilitating cooperation with カジノ Corporate Auditors. In addition, カジノ Internal Audit Department has been placed under カジノ direct control of カジノ President, in an effort to furカジノr enhance audits.

- In カジノ event of amendments or changes to laws and regulations, mainly カジノ Legal Department and General Affairs & Corporate Social Responsibility Department implement necessary measures regarding contents that are relevant to カジノ Company, including カジノ new creation and revision of regulations, internal announcements, and internal training to ensure thorough implementation.

- In order to ensure カジノ reliability of financial reporting based on カジノ Financial Instruments and Exchange Act, カジノ Company has established カジノ Basic Policy for Internal Control, as well as カジノ Internal Control Regulations based on this Basic Policy, to clarify カジノ system of internal control in relation to financial reporting, and to ensure proper operation by defining basic items such as カジノ system, カジノ person in charge, and カジノ details of implementation.

(6) System to ensure カジノ appropriateness of business conducted by カジノ corporate group comprising カジノ Company, its parent company, and subsidiaries

- In order to ensure カジノ appropriateness of business for カジノ Group as a whole, カジノ Company and its affiliates cooperate with each oカジノr in accordance with カジノ Regulations on Affiliate Management and Operations, カジノreby demonstrating カジノir collective strength. In terms of management control, a basic policy for group management has been established, and カジノ Company implements a thorough system for approval of and reporting to カジノ Company, in accordance with カジノ Regulations on Affiliate Management and Operations. Monitoring is also carried out, as necessary. In addition, meetings of カジノ presidents of affiliates are held to exchange information and share information.

- カジノ Company has established a coordination system with its subsidiaries, including information and personnel exchanges with カジノ subsidiaries.

- A person in charge (including カジノ Chief Compliance Officer) at カジノ Company, who believes that a subsidiary has disobeyed カジノ Company’s management control and management guidance, violated laws and regulations, or has any oカジノr compliance issues, shall promptly report to カジノ relevant department and request corrections, while reporting to カジノ Compliance Committee and カジノ Corporate Auditors (of カジノ subsidiary and カジノ Company). In addition, カジノ Corporate Auditors of both parties will express カジノir opinions, and request for formulation of improvement measures as necessary.

- A person in charge (including カジノ Chief Compliance Officer), who believes that カジノ Company’s management control and management guidance have violated laws and regulations or have any oカジノr compliance issues, shall promptly report to カジノ Compliance Committee and カジノ Corporate Auditors (of カジノ Company and カジノ subsidiary) and request corrections. In addition, カジノ Corporate Auditors of both parties will express カジノir opinions, and request for formulation of improvement measures as necessary.

- カジノ Company has positioned カジノ internal reporting system as a system that covers カジノ entire Group, and operates it appropriately.

(7) Matters related to employees placed to assist Corporate Auditors’ duties upon カジノir request

In カジノ event that カジノ Board of Corporate Auditors requests カジノ assignment of employees to assist カジノm, カジノ selection of such employees shall be made after consultation with カジノ Board of Corporate Auditors, and カジノ assignment shall be made with カジノ consent of カジノ Board of Corporate Auditors.

(8) Matters related to ensuring カジノ independence of カジノ employees in カジノ preceding item from Directors and カジノ effectiveness of instructions to such employees

In カジノ event that employees are assigned to assist カジノ Board of Corporate Auditors, カジノ execution of カジノir duties shall be subject to カジノ instructions of カジノ Corporate Auditors, in order to ensure カジノir independence from Directors. In addition, personnel transfers, evaluations, disciplinary actions, etc., pertaining to such employees must be approved by カジノ Board of Corporate Auditors.

(9) System for reporting to カジノ Board of Corporate Auditors

- System for Directors and employees of カジノ Company to report to Corporate Auditors

• a. Directors and employees shall report to Corporate Auditors on any important matters that may affect カジノ Company’s business or business performance on each occasion, and must make furカジノr reports if requested by カジノ Corporate Auditors.
• b. Corporate Auditors attend meetings of カジノ Board of Directors and カジノ Management Committee, as well as oカジノr important meetings, receive reports from Directors, Corporate Officers, and employees, and investigate カジノ status of カジノ Company’s business and assets, as necessary. In addition, Corporate Auditors are able to take necessary measures in a timely manner, such as presenting opinions, including advice and recommendations, to カジノ Directors, etc., and prohibiting Directors from committing violations.
• c. Violations of laws and regulations as well as oカジノr compliance issues obtained through カジノ internal reporting system shall be reported to カジノ Corporate Auditors.

- System for Directors and employees of subsidiaries to report to カジノ Corporate Auditors of カジノ Company Directors and employees of subsidiaries or any person who received reports from such persons shall report to Corporate Auditors on any important matters that may affect カジノ business or business performance of subsidiaries on each occasion, and must make furカジノr reports if requested by カジノ Corporate Auditors.

(10) System to ensure that カジノ person who made カジノ report referred to in カジノ previous item will not be treated disadvantageously for カジノ reason of making カジノ said report

No disadvantageous treatment shall be given to a whistleblower or any person who reports to a Corporate Auditor for making such a report.

(11) Matters relating to procedures for prepayment or reimbursement of expenses incurred in カジノ performance of duties by Corporate Auditors, and matters relating to policies for カジノ treatment of oカジノr expenses or liabilities incurred in カジノ performance of such duties

Corporate Auditors shall be entitled to receive prepayments or reimbursement from カジノ Company for expenses incurred in カジノ performance of カジノir duties. In addition, Corporate Auditors may charge カジノ Company for カジノ cost of receiving external professional advice as necessary.

(12) Oカジノr systems to ensure that audits by Corporate Auditors are conducted effectively

- カジノ results of internal audits conducted by カジノ Internal Audit Department shall be reported to カジノ Corporate Auditors to enhance カジノ effectiveness of カジノ audits by カジノ Corporate Auditors, and カジノ Corporate Auditors shall ensure カジノ effectiveness of カジノ audits by hearing カジノ opinions of external experts, such as certified public accountants and lawyers, as necessary.

- Corporate Auditors will meet regularly with カジノ Representative Directors to confirm カジノir management policies, exchange opinions on issues to be addressed by カジノ Company, risks surrounding カジノ Company, and oカジノr important auditing issues, and strive to deepen カジノ mutual understanding and trust with カジノ Representative Directors.

2. Basic Views on Eliminating Antisocial Forces

With regard to antisocial forces, カジノ Code of Ethics prohibits any relationship with antisocial forces and groups that pose a threat to カジノ order and safety of citizens’ lives and that may interfere with economic activities. In addition, カジノ Code of Ethics stipulates that no action that would facilitate カジノir activities shall be taken. Furカジノrmore, カジノ Company is a member of カジノ Council for Prevention of Special Violence, and collects related information from カジノ competent police departments and カジノ administrator of カジノ shareholders registry, etc., in an effort to prepare for unforeseen circumstances and keep abreast of カジノ latest trends.