Note: This document is an excerpt translation of the original Japanese document and is only for reference purposes.
In the any discrepancy between this translated document and the original Japanese document, the later shall prevail.

SANYO SHOKAI LTD.

Basic Policy for Developing an Internal Control System
1.

System to ensure that the execution of duties by our directors, executive officers and employees
complies with the laws and regulations and the Articles of Incorporation(1) The Board of Directors shall make decisions on important management matters inaccordance with laws and regulations, the Articles of Incorporation, and the Regulations
Governing the Execution of Directors, and shall also supervise the execution of duties bydirectors.
(2) The Internal Audit Office, which reports directly to the representative director andpresident, conducts regular internal audits of the status of compliance with laws andregulations, the Articles of Incorporation, and internal regulations with respect to overall
operations in accordance with the Internal Audit Regulations, and the appropriateness ofprocedures for the execution of duties, based on the plans for audits prepared, and reports
the results to the representative director and president and the corporate auditors.
(3) Enhance the compliance system through the activities of the Compliance Committee, theInternal Control Committee, the Legal and Licensing Division, and the Internal Audit
Office.
(4) As part of its compliance activities, the Company provides internal directors and executive
officers with annual compliance-related training by outside experts, and makes it
mandatory for newly appointed internal directors and executive officers to receive specialtraining.
(5) Prepare various regulations and standards linked to the Code of Conduct, such as the Basic
Policy on Sustainability, the Corporate Code of Conduct, Labor Regulations, ComplianceRegulations, timely disclosure of important information and the Regulations forPreventing Insider Transactions, and make them known to all concerned.
(6) In the event that directors, executive officers, employees of the Company and its
subsidiaries discover any conduct that violates laws and regulations, the Articles ofIncorporation, or various internal regulations, the Company shall establish the Compliance
Hotline System (Sanyo Alarm System) that enables reporting to the Company through thewhistleblowing hotline within the Company or through an external consulting lawyer, inaddition to reporting through the organizational structure, to promptly report to themanagement team and the corporate auditor, including the representative director andpresident, and to the chairman of the Compliance Committee.

-1-(7) The entire organization will take a firm stance toward anti-social forces and organizations
that threaten the order and safety of civil society, and develop a system to maintain policies
that do not involve these forces or organizations at all.

2.

System for information storage and management pertaining to the execution of duties by thedirectors of the Company
The Board of Directors shall prepare and retain the minutes of the Board of Directors meetings,
the minutes of the Management Meetings, the minutes of the Executive Committee meetings,
the approval documents, various application forms, and contract documents, etc. related to theexecution of duties or decision-making by the directors in accordance with the provisions of thedocument retention rules, and shall establish a management system for these documents.

3.

Regulations and other systems for managing the risk of loss
(1) Risks related to our business include "criminal risks," "PL related risks," "operating risks,""labor management risks," "market risks," and "disaster risks." Various regulations andmanuals to prevent losses based on such risks shall be formulated, and internal awarenessand training on risk management through the Compliance Committee or the Internal
Control Committee shall be conducted. In addition, the Internal Audit Office shall monitor
the status of such loss prevention measures in order to ensure that they function effectively.
(2) The names and roles of the Committees, etc. concerning the management of the risk ofloss are as follows.
“Compliance Committee”
The committee meets quarterly to share perceived concerns about various legal risks andto resolve issues as appropriate. In addition, from the viewpoint of ensuring transparency
about discussion content from a third-party perspective, the Board of Corporate Auditors
shall attend the meetings and share information with outside officers or external lawyers
as necessary, in order to develop a system to obtain appropriate advice on problems.
"Internal Control Committee"
Analyze and assess the risk of a crisis, and prepare the infrastructure to take appropriate
measures in the event of a crisis from normal times. Specifically, the Internal AuditOffice shall verify the results of internal control tests and analyze them, and theCommittee shall formulate countermeasures in order to foster a sound corporate culturethat can withstand risks and ensure appropriate business operations.
"Risk Management Committee"
When a risk of loss occurs, the Risk Management Committee responds according to thetype of risk in accordance with the Risk Management Regulations.

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In the event of an occurrence of "criminal risk," "PL related risk," "operating risk,""labor management risk," "market risk," and "disaster risk," etc., a countermeasure
headquarters shall be organized by the relevant divisions designated for each type of risk,
and an appropriate control system shall be established and operated. In addition, in theevent of a new risk other than the above, the chairman of the Risk Management
Committee shall establish a separate task force as necessary, and establish and operate anappropriate management system.
"Legal and Licensing Division"
Acting as a counter department to play a role in resolving the risk in the event of acompliance risk. Determine whether or not to call the Risk Management Committee
based on the significance of the risk, and implement a prompt and appropriate response.
It also functions as a counter department for the Compliance Hotline System (SanyoAlarm System).
"Internal Audit Office"Conduct internal control tests based on the Financial Instruments and Exchange Act,
carefully examine the results of the tests, and if there are problems, monitor the crisis
management system by urging the relevant departments to pay attention, etc.

4.

System to ensure the reliability of our financial reports(1) Establish the necessary systems to ensure the appropriateness of financial information andto prepare and disclose reliable financial reports.
(2) Internal Audit Office shall ensure the reliability of our financial reports by auditing theoperation of our internal control system over financial reports.

5.

System to ensure that the director’s duties are executed efficiently(1) Formulate a medium-term management plan and annual business plan on a consolidated
basis and promote various measures.
(2) Clarify the responsibilities of directors in accordance with the directors' operating
regulations, and seek efficiency in organizational management and business promotion.
(3) The Management Meeting, which is composed of directors (excluding outside directors)
and persons appointed by the Board of Directors, conducts multifaceted examinations andmakes decisions on important matters affecting the Company.
(4) Business execution authority is delegated to executive officers appointed by the Board ofDirectors for efficient management of operations.

6.

System to ensure the appropriateness of operations in the corporate group consisting of theCompany and subsidiaries-3-(1) System to report matters pertaining to the execution of duties by directors, etc. ofsubsidiaries to the Company and system to ensure the efficient execution of duties by said
directors, etc.
 In order to ensure the appropriateness of the Group's business operations, divisions under
our jurisdiction and persons responsible for each subsidiary shall be appointed inaccordance with the affiliated company management regulations, and dispatch asnecessary the managers or members of the relevant divisions as officers to manage theefficient execution of duties by directors, etc. of subsidiaries, and develop a system inwhich important matters are appropriately reported to the Board of Directors.
(2) Regulations and other systems for managing the risk of loss of subsidiaries
 Each subsidiary's division under our jurisdiction and the person responsible for it shallsystematically conduct ongoing controls to assess and respond to risks related to theoperations of the subsidiary and establish and maintain a system in which important
information regarding such risks is reported to the Board of Directors in a timely manner.
In addition, the Legal and Licensing Division of the Company shall collaborate together
to review the conclusion of important agreements, etc., as appropriate.
(3) System to ensure that directors, etc. and employees of subsidiaries perform their duties incompliance with laws and regulations and the Articles of Incorporation
 In order to enhance the compliance system of subsidiaries, our Internal Audit Office shallmonitor the risk management system of subsidiaries as well as conduct sufficient
information exchange and interviews for ensuring proper transactions and accounting
procedures. In addition, a system shall be established to ensure the appropriateness ofoperations equivalent to ours by having our corporate auditors involved in the audits ofsubsidiaries, or by having our full-time corporate auditors concurrently serve ascorporate auditors of subsidiaries as necessary.
 In order to prevent violations of laws and regulations and the Articles of Incorporation,in the event that whistleblower is received from employees of subsidiaries, etc.,
appropriate response shall be made in accordance with the Compliance Hotline SystemRegulations (Sanyo Alarm System Regulations).

7.

Matters concerning employees in the event that the corporate auditors request the appointmentof employees to assist in their duties(1) In accordance with the Corporate Auditor Audit Standards and the Regulations of theBoard of Corporate Auditors, in the event of a request by an auditor, an employee who
shall assist the duties of the auditor (hereinafter referred to as "assistant employee") shallbe appointed from among the employees and assigned to assist the auditor.

-4-(2) In the event that an assistant employee requests the provision of information or materials
necessary for an audit as instructed by the auditor, the directors, executive officers, andemployees shall cooperate in promoting the performance of the assistant employee, suchas promptly providing such information.

8.

Matters concerning the independence of assistant employees from the directors of the Companyand matters concerning the ensuring of the effectiveness of instructions to assistant employeesof the Company's auditors;(1) No assistant employee shall be directed or ordered by the director or the supervisor of theorganization to which the assistant employee belongs.
(2) In accordance with our Audit Standards and the Regulations of the Board of Corporate
Auditors, matters concerning personnel changes and employment conditions for assistant
employees shall be discussed in advance with the corporate auditors.

9.

System for reporting to our corporate auditors(1) Our directors, executive officers, and employees shall, at the request of the auditors, reportto the auditors on the following matters in a timely manner.
① Regular Reporting Matters
The status of management, the execution of business, the financial condition, and theresults of audits conducted by the Internal Audit Office.
② Extraordinary Reporting Matters
Facts that may cause substantial damage to the Company, serious facts that are illegal
or violate laws and regulations, Articles of Incorporation, or various internal
regulations with regard to the performance of duties by directors, executive officers,and employees, facts reported under the Compliance Hotline System (Sanyo AlarmSystem), and facts related to material lawsuits, disputes, and administrative
dispositions, etc.
(2) The Company’s representative directors exchange opinions with the corporate auditors onnecessary matters at regular meetings.
(3) Establish a system that enables directors, corporate auditors and employees of oursubsidiaries to report directly to the corporate auditors, by having our corporate auditors
participate in the audits of subsidiaries, or by having our full-time corporate auditors
concurrently serve as corporate auditors of subsidiaries, as necessary. In addition, thecontents of reports made by employees of subsidiaries based on the Compliance Hotlinesystem (Sanyo Alarm System) shall be compiled by our Legal and Licensing Division,
which serves as the counter department for this system, and periodically reported to ourcorporate auditors.

-5-10. System to ensure that the person who has made the report set forth in the preceding paragraphdoes not receive disadvantageous treatment by reason of such person's having made the report(1) Prohibit giving unfavorable treatment to officers and employees of the Company andsubsidiaries who have reported to the corporate auditors due to the fact that they havereported to them, and to make all officers and employees of the company and subsidiaries
aware of this.
(2) The Compliance Hotline System Regulations (Sanyo Alarm System Regulations) stipulatethat the protection of whistleblowers shall be a priority, and prohibit to treat unfavorably
the whistleblowers under the said regulations from being treated unfavorably on thegrounds that they have made such notification.

11. Matters concerning the procedures for advance payment or reimbursement of expenses arisingfrom the execution of the duties of the corporate auditors and any other matters concerning thepolicy for processing of expenses or debts arising from the execution of such duties;
Provide an annual budget for expenses deemed necessary for the execution of duties by theBoard of Corporate Auditors, and shall promptly appropriately process such expenses or debts
when requested by the corporate auditors with respect to expenses incurred by the corporate
auditors in the execution of their duties.

12. Other systems to ensure that audits by the corporate auditors are conducted effectively(1) In addition to attending the following important meetings, the corporate auditors may
inspect the following important materials regarding business execution.
① Meetings attended by the corporate auditors
Important meetings such as the Board of Directors, Management Meeting, Executive
Committee/Monthly Performance Confirmation Meeting, Budget Formulation
Meeting (including Subsidiary Budget Meeting), Internal Control Committee,
Compliance Committee and Sustainability Committee.
② Materials that can be viewed by corporate auditors
Decisions made by the representative director, those related to legal compliance,
those related to risk management, those related to internal audits, those related tochanges in significant accounting policies, those related to significant lawsuits anddisputes, those related to significant accidents, complaints and problems, and otherdocuments related to important decisions.
(2) Directors shall establish an environment in which the corporate auditors can obtainappropriate advice from legal, accounting, and other specialists so that the corporate-6-

auditors can conduct their audits effectively, and promote a system of cooperation between
the corporate auditors, the Internal Audit Office, and the accounting auditors.

13. Revision or abolition of this policy
In the event that it becomes necessary to review this policy, it shall be revised by a resolution ofthe Board of Directors.

Established May 26, 2006
Revised June 19, 2009
Revised February 14, 2011
Revised August 28, 2015
Revised July 30, 2024

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