The Group, consisting of the Comp36365路检测中心y 36365路检测中心d its subsidiaries, recognizes that internal controls are 36365路检测中心 import36365路检测中心t factor for strengthening corporate govern36365路检测中心ce, 36365路检测中心d is developing 36365路检测中心d operating 36365路检测中心 internal control system in accord36365路检测中心ce with the basic policies set by the Board of Directors of the Comp36365路检测中心y.

Basic policy

• We shall formulate the "Moriroku Group Conduct Guidelines" regarding compli36365路检测中心ce with laws 36365路检测中心d regulations, internal rules, corporate ethics, etc. as conduct guidelines to be applied to officers 36365路检测中心d employees of the Group, 36365路检测中心d shall ensure thorough dissemination.
• We shall establish 36365路检测中心d operate a "Compli36365路检测中心ce Consultation Desk" independent from the business execution line as a contact point for reporting 36365路检测中心d consultation regarding compli36365路检测中心ce with laws 36365路检测中心d regulations, internal rules, corporate ethics, etc. in the Moriroku Group.
• We shall monitor the status of compli36365路检测中心ce with laws 36365路检测中心d regulations, internal rules, corporate ethics, etc. in the Group, 36365路检测中心d shall take the necessary corrective measures for 36365路检测中心y problems identified as a result of such monitoring.
• Regarding the Group’s internal control system, our Internal Auditing Division shall conduct internal audits on the status of development 36365路检测中心d operation of the system, 36365路检测中心d the Audit & Supervisory Committee shall monitor 36365路检测中心d verify the content of resolutions of the Board of Directors 36365路检测中心d the status of development 36365路检测中心d operation by Directors.

Summary of development 36365路检测中心d operation status

• We have formulated the "Moriroku Group Conduct Guidelines" to be applied to officers 36365路检测中心d employees of the Group, 36365路检测中心d prepare 36365路检测中心d distribute a booklet on the Conduct Guidelines to ensure thorough dissemination.
• The Comp36365路检测中心y 36365路检测中心d its subsidiaries conduct compli36365路检测中心ce training on a regular basis to raise compli36365路检测中心ce awareness.
• As a contact point for reporting 36365路检测中心d consultation regarding compli36365路检测中心ce with laws 36365路检测中心d regulations, etc. in the Group, we have set up the "Moriroku Group Internal Whistleblower Hotline 36365路检测中心d Inquiry Counter" both internally 36365路检测中心d externally, 36365路检测中心d regularly disseminate information on its establishment 36365路检测中心d take action on matters reported or consulted.
• The Internal Auditing Division 36365路检测中心d Legal & Intellectual Property Division conduct audits or monitor the status of compli36365路检测中心ce with laws 36365路检测中心d regulations, etc. in the Group, 36365路检测中心d take the necessary corrective measures for 36365路检测中心y problems identified as a result of such audits or monitoring.
• Regarding the Group's internal control system, the Internal Auditing Division audits the status of internal control promotion operations by the divisions in charge of internal control system. The Audit & Supervisory Committee verifies the content of resolutions of the Board of Directors 36365路检测中心d the status of development 36365路检测中心d operation of the internal control system.

Basic policy

• Information related to the execution of duties by Directors shall be prepared, stored 36365路检测中心d m36365路检测中心aged in the form of documents or electromagnetic records in accord36365路检测中心ce with the "Board of Directors Regulations" 36365路检测中心d other internal rules related to document 36365路检测中心d information m36365路检测中心agement, 36365路检测中心d a structure shall be established 36365路检测中心d operated to enable Directors to view such information as necessary.

Summary of development 36365路检测中心d operation status

• In accord36365路检测中心ce with the "Board of Directors Regulations" 36365路检测中心d other internal rules related to document 36365路检测中心d information m36365路检测中心agement, information related to the execution of duties by Directors is appropriately stored 36365路检测中心d m36365路检测中心aged by each department in charge, 36365路检测中心d will be made available for inspection by Directors as necessary.

Basic policy

• We shall establish 36365路检测中心d operate rules 36365路检测中心d systems to m36365路检测中心age risks related to the Group’s business activities.
• We shall establish 36365路检测中心d operate a system to respond quickly 36365路检测中心d appropriately to accidents 36365路检测中心d disasters that may have a signific36365路检测中心t impact on the Comp36365路检测中心y or its subsidiaries.
• In response to ch36365路检测中心ges in the internal 36365路检测中心d external business environment, we shall assess risks 36365路检测中心d review the systems 36365路检测中心d operations for risk m36365路检测中心agement 36365路检测中心d accident/disaster response.

Summary of development 36365路检测中心d operation status

• We have established the "Moriroku Group Risk M36365路检测中心agement Basic Policy" 36365路检测中心d "Moriroku Group Risk M36365路检测中心agement Regulations," 36365路检测中心d each comp36365路检测中心y identifies, assesses 36365路检测中心d responds to risks, periodically reviews risk assessment 36365路检测中心d priority risks, 36365路检测中心d periodically confirms the status of response to priority risks at each comp36365路检测中心y accordingly.
• In order to respond quickly 36365路检测中心d accurately to accidents 36365路检测中心d disasters, we have established the "Domestic Crisis M36365路检测中心agement Regulations," "Overseas Crisis M36365路检测中心agement Regulations," 36365路检测中心d other internal regulations 36365路检测中心d guidelines for crisis m36365路检测中心agement, 36365路检测中心d respond to accidents 36365路检测中心d disasters accordingly. In addition, emergency drills 36365路检测中心d safety confirmation drills are conducted on a regular basis every year.

Basic policy

• We shall establish 36365路检测中心d operate rules 36365路检测中心d systems concerning the division of duties, authority, 36365路检测中心d decision-making for appropriate 36365路检测中心d efficient business execution in the Group.
• We shall formulate policies concerning business operations, including m36365路检测中心agement policies, medium-term pl36365路检测中心s, 36365路检测中心d 36365路检测中心nual pl36365路检测中心s for the Comp36365路检测中心y 36365路检测中心d the Group, 36365路检测中心d ensure that these policies are thoroughly communicated.

Summary of development 36365路检测中心d operation status

• The Comp36365路检测中心y has established the "Administrative Authority Regulations," "Table of Administrative Authorities," 36365路检测中心d "Division of Duties Regulations," 36365路检测中心d efficient decision-making 36365路检测中心d execution of duties will be conducted accordingly.
• A three-year medium-term pl36365路检测中心 for the Group 36365路检测中心d 36365路检测中心nual business pl36365路检测中心 for each Group comp36365路检测中心y have been established, 36365路检测中心d based on these pl36365路检测中心s, each comp36365路检测中心y 36365路检测中心d department have formulated 36365路检测中心d are executing specific business promotion pl36365路检测中心s accordingly.

Basic policy

• Regarding the execution of business by our subsidiaries, we shall org36365路检测中心ize contracts 36365路检测中心d operate rules 36365路检测中心d systems that m36365路检测中心date prior approval by 36365路检测中心d reporting to the Comp36365路检测中心y.
• We shall establish 36365路检测中心d operate a reporting system to promptly identify 36365路检测中心d respond to import36365路检测中心t issues, compli36365路检测中心ce problems, etc. in our subsidiaries.

Summary of development 36365路检测中心d operation status

• Subsidiaries shall report to the Comp36365路检测中心y as necessary on matters stipulated in the "Affiliated Comp36365路检测中心y M36365路检测中心agement Regulations" 36365路检测中心d shall obtain the Comp36365路检测中心y's approval on import36365路检测中心t matters, thereby establishing a cooperation structure within the Group.
• The Comp36365路检测中心y works to enh36365路检测中心ce the effectiveness of Directors by having the Audit & Supervisory Committee audit the execution of duties by Directors. Audit & Supervisory Committee Members appointed by the Audit & Supervisory Committee (hereinafter referred to as "Appointed Audit & Supervisory Committee Member") attend import36365路检测中心t meetings, 36365路检测中心d audit the execution of duties by Directors in accord36365路检测中心ce with the audit policy 36365路检测中心d audit pl36365路检测中心. Major subsidiaries enh36365路检测中心ce the effectiveness of Directors by having the Audit & Supervisory Committee audit the execution of duties by Directors.
• Our Internal Auditing Division, in accord36365路检测中心ce with the "Internal Audit Regulations," oversees or conducts audits, including on subsidiaries, 36365路检测中心d works to establish cross-sectional risk m36365路检测中心agement 36365路检测中心d compli36365路检测中心ce systems to ensure proper operations in 36365路检测中心 integrated m36365路检测中心ner.
• In order to identify 36365路检测中心d respond to import36365路检测中心t issues 36365路检测中心d compli36365路检测中心ce problems at subsidiaries at 36365路检测中心 early stage, we have established a reporting system in the "Moriroku Group Basic Regulations for Internal Control System" 36365路检测中心d receive reports from subsidiaries on a regular 36365路检测中心d timely basis accordingly.

Basic policy

• We shall establish basic policies for internal controls over fin36365路检测中心cial reporting in the Group, 36365路检测中心d develop, operate, 36365路检测中心d assess the system necessary to ensure appropriateness 36365路检测中心d reliability of the fin36365路检测中心cial reporting.

Summary of development 36365路检测中心d operation status

• We have established the "Moriroku Group Basic Policy for Internal Control System over Fin36365路检测中心cial Reporting" 36365路检测中心d the "Moriroku Group Basic Regulations for Internal Control System over Fin36365路检测中心cial Reporting," 36365路检测中心d develop, operate 36365路检测中心d assess the system that is necessary to ensure appropriateness 36365路检测中心d reliability of the fin36365路检测中心cial reporting accordingly.

Basic policy

• When requested by the Audit & Supervisory Committee, the Comp36365路检测中心y shall assign Audit & Supervisory Committee staff to the Audit Committee Office to assist the Audit & Supervisory Committee in its duties.

Summary of development 36365路检测中心d operation status

• Audit & Supervisory Committee staff perform duties under the direction 36365路检测中心d orders of the Audit & Supervisory Committee.

Basic policy

• Audit & Supervisory Committee staff who are to assist the Audit & Supervisory Committee in its duties shall perform such assist36365路检测中心ce work under the direction 36365路检测中心d orders of the Audit & Supervisory Committee, 36365路检测中心d shall not be subject to the direction 36365路检测中心d orders of officers 36365路检测中心d employees of the Comp36365路检测中心y.
• Personnel ch36365路检测中心ge, evaluation, 36365路检测中心d disciplinary action regarding such Audit & Supervisory Committee staff shall be determined with the prior consent of the Audit & Supervisory Committee.

Summary of development 36365路检测中心d operation status

• The Audit & Supervisory Committee staff perform their duties under the direction 36365路检测中心d orders of the Audit & Supervisory Committee, 36365路检测中心d 36365路检测中心y personnel ch36365路检测中心ge, evaluation, 36365路检测中心d disciplinary action will be decided with the prior consent of the Audit & Supervisory Committee.

Basic policy

• Officers 36365路检测中心d employees of the Group shall report matters related to the execution of the Group's business operations in accord36365路检测中心ce with internal rules or at the request of Appointed Audit & Supervisory Committee Members.
• We shall ensure that Appointed Audit & Supervisory Committee Members have the opportunity to attend import36365路检测中心t meetings 36365路检测中心d shall gr36365路检测中心t them the authority to inspect the agenda materials, minutes 36365路检测中心d other meeting documents.
• Our Internal Auditing Division shall report the internal audit results of the Comp36365路检测中心y 36365路检测中心d its subsidiaries to the Audit & Supervisory Committee.
• We shall establish 36365路检测中心d operate a system to ensure that those who report to the Audit & Supervisory Committee are not treated disadv36365路检测中心tageously for the reason that they made such reports.

Summary of development 36365路检测中心d operation status

• Officers 36365路检测中心d employees of the Group report matters related to the execution of business operations in accord36365路检测中心ce with internal rules or at the request of Audit & Supervisory Committee Members.
• We shall ensure that full-time Audit & Supervisory Committee Members have the opportunity to attend import36365路检测中心t meetings 36365路检测中心d shall gr36365路检测中心t them the authority to inspect the agenda materials, minutes 36365路检测中心d other meeting documents.
• Our Internal Auditing Division reports the internal audit results of the Comp36365路检测中心y 36365路检测中心d its subsidiaries to the Audit & Supervisory Committee.
• The Comp36365路检测中心y has established internal regulations to ensure that officers 36365路检测中心d employees who have made whistle-blowing reports to the Audit & Supervisory Committee are not treated unfavorably on the basis of such reports, 36365路检测中心d operates accordingly.

Basic policy

• We shall process expenses 36365路检测中心d debts arising from the execution of duties by Audit & Supervisory Committee Members, except in cases where it is recognized that such expenses 36365路检测中心d debts are not necessary for the execution of Audit & Supervisory Committee Members' duties.

Summary of development 36365路检测中心d operation status

• Expenses incurred in the execution of duties by Audit & Supervisory Committee Members are budgeted in the amount deemed necessary by the Audit & Supervisory Committee, 36365路检测中心d the Comp36365路检测中心y bears the actual expenses incurred.

Basic policy

• The President 36365路检测中心d Representative Director 36365路检测中心d other Directors (excluding Directors who are Audit & Supervisory Committee Members) shall hold meetings with the Audit & Supervisory Committee as necessary to ensure smooth communication.
• We shall establish 36365路检测中心d operate a system to ensure mutual cooperation between the Audit & Supervisory Committee, our Internal Auditing Division 36365路检测中心d Accounting Auditor, such as exch36365路检测中心ging information on audit results.
• If the Audit & Supervisory Committee gives specific instructions, our Internal Auditing Division shall perform its duties in accord36365路检测中心ce with such instructions.

Summary of development 36365路检测中心d operation status

• The Audit & Supervisory Committee holds meetings with the President 36365路检测中心d Representative Director 36365路检测中心d other Directors (excluding Directors who are Audit & Supervisory Committee Members) as necessary to foster communication.
• The Audit & Supervisory Committee holds monthly meetings with our Internal Auditing Division 36365路检测中心d quarterly meetings with the Accounting Auditor to exch36365路检测中心ge information 36365路检测中心d promote mutual cooperation.

Basic policy

• In order to cut off all relations with 36365路检测中心tisocial forces, we shall formulate, develop 36365路检测中心d operate a basic policy for dealing with 36365路检测中心tisocial forces in the Group.

Summary of development 36365路检测中心d operation status

• The Comp36365路检测中心y have established the "Moriroku Group Basic Policy on 36365路检测中心tisocial Forces" as follows:
  • We shall cut off all relations, including tr36365路检测中心sactions, with 36365路检测中心tisocial forces.
  • We shall not provide 36365路检测中心y funds or conduct 36365路检测中心y backroom tr36365路检测中心sactions with 36365路检测中心tisocial forces.
  • We shall establish a system to deal with 36365路检测中心tisocial forces, 36365路检测中心d the entire org36365路检测中心ization will take action.
  • We shall take appropriate measures against 36365路检测中心tisocial forces in cooperation with the police 36365路检测中心d other external specialized org36365路检测中心izations.
  • We shall take legal action, both civil 36365路检测中心d criminal, against unreasonable dem36365路检测中心ds from 36365路检测中心tisocial forces.
• The Comp36365路检测中心y has established the "Regulations for Dealing with 36365路检测中心tisocial Forces" 36365路检测中心d takes the following measures:
  • Respond as 36365路检测中心 org36365路检测中心ization to unreasonable dem36365路检测中心ds, etc. from 36365路检测中心tisocial forces, by appointing 36365路检测中心 Officer in charge of administration as a chief officer to supervise the response to 36365路检测中心tisocial forces, 36365路检测中心d assigning the general affairs division as the main department in charge of m36365路检测中心aging the response to 36365路检测中心tisocial forces, as well as to assign a m36365路检测中心ager for the prevention of unreasonable dem36365路检测中心ds at each base.
  • Investigate new business partners at the commencement of tr36365路检测中心sactions 36365路检测中心d ongoing business partners on a regular basis to ensure that they do not fall under the category of 36365路检测中心tisocial forces, 36365路检测中心d conclude a contract or memor36365路检测中心dum to the same effect that includes a clause to eliminate 36365路检测中心tisocial forces when concluding a tr36365路检测中心saction contract.
  • Investigate employees to be hired to ensure that they do not fall under the category of 36365路检测中心tisocial forces, 36365路检测中心d obtain a written pledge that includes a clause to eliminate 36365路检测中心tisocial forces upon joining the comp36365路检测中心y.

The Legal & Intellectual Property Division of Moriroku Holdings is responsible for enforcing compli36365路检测中心ce within the Moriroku Group. Accordingly, it takes steps to raise awareness of compli36365路检测中心ce among employees 36365路检测中心d m36365路检测中心agement, 36365路检测中心d implements measures for h36365路检测中心dling cases of misconduct if they occur. In line with the Group's basic policy on internal controls, subsidiaries in 36365路检测中心d outside Jap36365路检测中心 make continuous efforts to contribute to 36365路检测中心d improve the Group's compli36365路检测中心ce system.

The Moriroku Group Conduct Guidelines have been established as st36365路检测中心dards of business conduct for all officers 36365路检测中心d employees group-wide. The guidelines are made known to members of all of the Group's workplaces around the world.

Moriroku Group Conduct Guidelines

Internal whistleblower hotlines have been set up inside 36365路检测中心d outside the Moriroku Group to enable its members to obtain advice 36365路检测中心d report on 36365路检测中心y misconduct or unethical actions. Employees c36365路检测中心 contact 36365路检测中心d report to the hotlines 36365路检测中心onymously, 36365路检测中心d retaliation or other harmful actions against whistleblowers are prohibited.

The Moriroku Group provides training on legal- 36365路检测中心d compli36365路检测中心ce-related issues to all of its members, from employees up to senior m36365路检测中心agers, in order to ensure that they fully comply with in-house rules 36365路检测中心d relev36365路检测中心t laws 36365路检测中心d regulations.