Compliance System

1. （1）With the recognition that intensive compliance is indispensable for the existence and continuity of a corporation, the Company established the Haseko Group Standards of Conduct, under which the Company has been working to establish a management system where all Directors, Operating Officers and staff respect societal standards and take sensible courses of action in keeping with their duties as members of society, as well as complying with all laws and the Company’s articles of incorporation, so that the Company can win the confidence of society. Moreover, for enhanced compliance the Company established the Compliance Department which conducts promotion and education of compliance based on the internal rules and regulations on compliance. An internal whistle-blowing system for consultations on compliance and notification of illegal conduct, etc. and contact points have been established both inside and outside the Company.
2. （2）The Company established the Internal Auditing Department that is under the direct control of the President. Pursuant to internal rules and regulations on internal audits, the Department investigates and evaluates whether activities of Haseko Group’s respective divisions comply with laws and regulations, the Articles of Incorporation, the Company’s rules and regulations, corporate policies, etc. and whether they are reasonable, and works to make improvements based on the results.
3. （3）Pursuant to the Haseko Group Standards of Conduct it has established, the Company shall have no relations with anti-social forces or groups that threaten the order and security of civic life, and will cope with such anti-social forces and groups systematically and with an adamant and resolute attitude.

Risk Management System

1. （1）In anticipation of a variety of risks, the Company endeavors to collect risk-related information and prepares preventive measures and appropriate countermeasures in advance against risks according to their magnitude and possibility of arising. Through these efforts, the Company aims to minimize the potential losses and systematically cope with risk management centering on the Risk Management Department.
2. （2）Specifically, the Company has set up a system in which respective sections of the Corporate Management Division coordinate with each other and check the status of business operations in accordance with the roles they are assigned, while the Auditing Department conducts further checking. For the corporate approval system that serves as a record of decision-making for work implementation, the Company has introduced an electronic ringi system that enables Corporate Auditors and the Corporate Management Division to view and check the content at any time.
3. （3）Furthermore, of the issues forwarded to the Board of Directors, the Management Council and the two operation councils (the Business Operation Council and the Technology Operation Council), those involving many departments or requiring specialized knowledge are subject to sufficient verification in advance by the adequately established advisory meetings and committees. Periodical results reports are also mandatory for issues that require monitoring.
4. （4）On top of these, the Company established the Risk Management Council under the chairmanship of the President, with the aim of strengthening the risk management system of the Company and its entire Group, to conduct cross-sectional collection of information, analysis, valuation and handling of risks in accordance with the internal rules on risk management.