Systems Necessary to Ensure the Properness of Operations of the Company (Internal Control Systems)
Our Board of Directors determines and implements the systems (internal control systems) set forth in the Companies
Act, Article 362, Paragraph 4, Item 6 to achieve effective internal control. In addition, we assess the implementationof the internal control systems annually and endeavors to establish systems in line with requests made from time totime based on ongoing reevaluations.
An overview of our internal control systems and their implementation status is provided below. Moreover, the Internal
Control Committee assessed the implementation of the internal control systems, confirmed that these internal control
systems were functioning effectively, and reported this fact at the Board of Directors' meeting.
Further details regarding the internal control systems are posted on our website (https://www.sumitomocorp.com/jp//media/Files/hq/about/governance/detail/internal_control_system_02.pdf?la=en).

Internal Control Systems

Current Implementation Status

1. Systems for ensuring that the execution of duties by Directors and employees complies with laws and regulations and the
Articles of Incorporation
 Ensuring full compliance with laws and regulations  We included compliance with laws and regulations andmaintenance of the highest ethical standards in theunder the “Corporate Mission Statement of the“Corporate Mission Statement of the Sumitomo
Sumitomo Corporation Group”
Corporation Group”, and we are making officers and Drawing up the “Sumitomo Corporation Group
employees aware of the mission statement.
Compliance Policy”
 Preparing the “Compliance Manual” and distributing it  By formulating the “Sumitomo Corporation Group
Compliance Policy” and making the “Complianceto all officers and employees
Manual” available on the company intranet, we strive Requiring all officers and employees to provide a written
to ensure thorough awareness of the said policy and“Confirmation of Compliance”
implementation of compliance among all officers and Appointing the “Chief Compliance Officer”, theemployees.
“Compliance Committee”, and “Compliance Leaders”,
 We are raising awareness of compliance and providing
and creating the “Speak-Up System”
relevant education through such means as training
tailored to various trainee types, and seminars
responding to the needs of different business units,
subsidiaries, and other consolidated companies, and elearning programs targeting all of our officers andemployees. For example, we conducted webinars
regarding the fair competition for all of our officers
and employees.
 We require all officers and employees to provide awritten “Confirmation of Compliance” when they join
the Company and when companywide training is
conducted, among other occasions.
 Based on the “Speak-Up System”, we have secured aroute by which our officers and employees can directly
communicate compliance information to the “Chief
Compliance Officer (CCO)” via the Legal ComplianceDepartment, Audit & Supervisory Board Members,outside professionals and outside attorneys serving as
liaisons. We are also establishing a system to protect
whistleblowers. We are conducting education forpeople dealing with whistleblowing and regular
evaluations and inspections of system management..
 In order to promote active use of the “Speak-Up
System”, we have launched initiatives (including but

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not limited to putting up posters on the office floors of
the head office building, distributed portable cards,
notified officers and employees of the system throughinternal communications, formulated detailed
regulations , posted materials to explain about thesystem on the company intranet, and released a video
to increase awareness).
We also disclosed on our corporate website an
overview of the “Speak-Up System,” and information
regarding its operational status and how its use is being
promoted.
We also hold the Compliance Committee, where thedetails of compliance activities and measures arereported and deliberated.
We are also implementing a compliance awarenesssurvey for all officers and employees to utilize them for
proposals and implementation of compliance measures.

2. Systems for retaining and managing information pertaining to the Directors’ execution of their duties

Properly preserving and managing important documents
including minutes of meetings of the Board of Directors
and information pertaining to the execution of duties anddecision-making
Implementing measures to prevent divulgence of
information to third parties or other misuse of
information
Making important documents pertaining to the Directors’
execution of their duties available for review to Audit &Supervisory Board Members in a timely manner

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We are pouring energies into the proper storage andmanagement of information assets, including
formulating “Information Security Policy,” andestablishing relevant regulations in accordance withthese policies. The “Basic Rules for Information
Management”, which are our internal regulations,stipulate steps to prevent divulgence of information tothird parties, which we implement. These include
specifying the responsibilities of officers andemployees regarding information security, developing
an information security system and managing
confidential information. In addition, we are creating
respective manuals that explain the procedures foraddressing information management and information
security incidents when they occur.
We implement measures aimed at information security
education and awareness, including “information
security course” and “training on targeted email
attacks” for all officers and employees. In addition, we
regularly disseminate information on information
security incidents and accidents within our group.
The “IT Strategy Committee” plans, formulates andimplements company-wide measures on information
security, and collects and responds to information
concerning information security incidents (divulgenceof information, etc.).
We submit for review by Audit & Supervisory Board
Members any documents they request.

3. Rules and other systems pertaining to the management of risk of loss

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Setting the three objectives of risk management: tostabilize business performance, to strengthen thecorporate structure, and to maintain credit; analyzing andmanaging risk factors specific to investment andcommercial transactions and common risk factors
Building a framework, conducting monitoring, andimplementing necessary improvements regarding risk
management through measures such as setting internal
rules and formulating risk management policies,
methods, and guidelines
Establishing the “Internal Control Committee,”“Company-wide Loan and Investment Committee” and“Corporate Sustainability Committee” as advisoryorgans to the “Management Council”
Established the “Internal Control Promotion
Department,” which takes an overall control of theGroup’s internal control-related operations, alongside
the Internal Auditing Department under the supervisionof the Head of Internal Control and Internal Audit
Building a resilient system that includes the formulationof plans to quickly restore operations and continue
business operations while securing the safety of all
officers and employees in the event of a disaster
Establishing the “Internal Auditing Department” as anindependent body under the direct supervision of the
President and Chief Executive Officer and ensuring theresults of internal auditing are reported to the President
and Chief Executive Officer as well as the Board of
Directors

Current Implementation Status
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With respect to our risk management, we, in
accordance with our internal rules, divide our businessactivities into investment activities and commercial
transactions, determine specific risk factors andcommon risk factors associated with both activities,
and make every effort to achieve the purpose of risk
management by analyzing and evaluating theprobability of occurrence and the impact of such risk
factors. In addition, among risks that can be quantified,country risks that could have a particularly large impact
on the entire company and the status of major assets arereported regularly to the Board of Directors.
We have built a framework, and are conducting
monitoring and implementing necessary improvements
regarding risk management at the company-wide level
through measures such as setting internal rules andformulating risk management policies, methods, andguidelines. In addition, we are improving risk
management through the preparation and distributionof manuals and conducting training activities asappropriate.
We are setting quantitative and qualitative standards tosecure consistency in the external disclosure of
information and to correctly disseminate necessary
information. We also deliberate ideal methods forexternal information transmission at the “Corporation
Communication Committee,” an advisory organ to theManagement Council.
We have established a system to make decisions in lightof social and environmental impact by strengthening
the system for evaluating social and environmental
risks in investment projects and ensuring participationin deliberations by specialized organizations.
We strive to identify, prevent, and rectify human rights
risks posed by the business activities of our group by
progressively conducting human rights due diligence ofthe supply chains for all businesses, including those of
our subsidiaries and other group entities.
We have set medium- and long-term targets related to“Six Key Social Issues” for the entire company. In
addition, each Business Unit has formulated short- andmedium-term action plans, thus promoting specificinitiatives, and disclosed their progress status.
With respect to climate change issues, we haveformulated the “Policies on Climate Change Issues”
and are reviewing them as required, with ongoing
efforts aimed at carbon-neutralizing our group’sbusiness activities and realizing a sustainable energy
cycle. We established the “Forest Management Policy

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and the Sourcing Policy for Forest Products” topromote the strengthening of a sustainable sourcing
system for the major natural resources handled by ourgroup.
For security trade control, we are conducting various
measures, including the creation of various guidelines,
the internal notifications of various sanctions
information, and training activities.
We hold meetings of the “Internal Control Committee”,
where our internal control systems and progress withinternal control activities were reviewed. In addition,
we are installing an Internal Control Promotion
Department with consolidated functions to review the
implementation status of Internal Control System
Board of Director resolutions, J-SOX compliance, andthe improvement of internal controls at groupcompanies.
We are enhancing the quality of decision-making in theManagement Council by means of the “Company-wide
Loan and Investment Committee”.
We are holding “Corporate Sustainability Committee”
meetings and deliberating key policies, measures andinitiatives related to the promotion of sustainability. In
addition, to receive multifaceted opinions and advice
on sustainability from specialists, we have set up anadvisory board.

We set up the “Intelligence Committee” to facilitate theconsideration and establishment of policies related tobusiness development in countries and regions wherecountry and geopolitical risks are heightening.

“Disaster

Response&

SafetyManagement

Department”, which is mainly responsible forpromoting disaster response measures, plays a central
role in implementing various disaster response
measures and safety management measures. We
established and are regularly upgrading a multi-hazard
BCP manual should Tokyo fail to function, mainly inthe case of an epicentral earthquake striking Tokyo.
We established an “Internal Auditing Department”, andthe results of its internal auditing are reported to the
President and Chief Executive Officer as well as to theBoard of Directors.

4. Systems for ensuring the efficient execution of the Directors’ duties
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Making the number of Directors sufficient to enable full
discussions and speedy and reasonable decision-making

The number of Directors is 11, which is sufficient toenable a variety of proposals and full discussions to beInternal Control Systems
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by the Board of Directors
Electing two or more Outside Directors so that theirdiverse perspectives can enhance decision-making andsupervisory functions
Introducing a system of Executive Officers in order toclarify responsibility and authority for the execution ofoperations and strengthen the supervisory functions of
the Board of Directors
Term of office for Directors: one year
Terms of office for the Chairman and the President andChief Executive Officer: not exceeding six years, inprinciple
Establishing the “Nomination and Remuneration
Advisory Committee” composed of a majority of Outside
Directors as an advisory organ to the Board of Directors
Establishing a dedicated organization to strengthen
Board of Director support functions
Establishing the “Management Council” as a decisionmaking body, various committees as advisory organs,and various other conferences for the exchange of
information
Formulating the medium-term management plan,
preparing budgets and introducing performance
management systems
Specifying in writing the agenda items requiring
discussion by the Board of Directors and the decisionmaking authority of officers and employees regarding
important matters

Current Implementation Status

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made by the Board of Directors and we are ensuring
speedy and appropriate decision-making andstrengthening supervisory functions.
The term of office for Directors is set at one year andthe terms of office for the Chairman and the President
and Chief Executive Officer do not exceed six years.
The “Nomination and Remuneration Advisory
Committee”, which is an advisory organ to the Boardof Directors, is chaired by an Outside Director. The
committee reviews the policies and procedures
regarding appointment and dismissal of the President
and the Chairman, appointment and dismissal of the
President, nomination criteria for Directors and Audit& Supervisory Board Members and nomination ofcandidates therefor, appointment of Management
Council members, the structures/levels of remuneration
and bonuses for Directors and Executive Officers, aswell as the limit of remuneration for Audit &Supervisory Board Members and the advisory system,and submits the results thereof as recommendations to
the Board of Directors.
To improve the quality of discussions carried out by the
Board of Directors, we established the Directors’
Administration Department as a dedicated organization
mainly to support communication between directors
and individuals executing duties (Executive Officers,etc.), select issues/topics to be discussed at Board of
Directors meetings and organize discussion points.
In addition to establishing the “Management Council”
as a decision-making body, we have established various
other conferences including the “Corporate Strategy
Promotion Committee”, the “Global Innovation
Promotion Committee”, and “Company-wide Loan and
Investment Committee”, as advisory organs to the“Management Council”.
In order to deepen strategic discussions in management
and promote the appropriate allocation of management
resources based on these discussions and the steady
implementation of the PDCA cycle, eachdivision/department under our Business Units has beenreorganized into a unit called the Strategic Business
Unit. We have introduced a system in which each
Strategic Business Unit creates a strategic format forbusiness management, discusses the format throughinternal strategy meetings, and follows up on the resultsof the discussions.
The “Board of Directors Regulations” and otherinternal rules specify agenda items requiring discussion
by the Board of Directors and reviewing from time toInternal Control Systems

Current Implementation Status
time discussion criteria from the perspective of proper
agenda selection. Further, we specify the job
responsibilities of each officer and employee, and thedecision-making authority of officers and employees
regarding important matters.

5. Systems for ensuring the properness of operations by the corporate group comprising the Company and its subsidiaries
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Using the “Corporate Mission Statement of theSumitomo Corporation Group”, which promotes
compliance with laws and regulations, to share values tobe respected throughout our group and to guide thedevelopment of compliance systems
Sharing and implementing the principles of the Groupmanagement—“Jiritsu,”“Dialogue”
and“Collaboration” in “Group Management Policy” —which aims to improve the corporate value of our group
Obtaining sufficient information and conducting
preliminary considerations/discussions on “importantmanagement issues” regarding target subsidiaries andother consolidated companies, and manage target
subsidiaries and other consolidated companies throughthe dispatching of directors and auditors
Supporting subsidiaries and other consolidated
companies in implementing internal controls and inconstructing a framework for risk management andmaking improvements thereto
Setting an internal rule to require internal auditing for
subsidiaries and other consolidated companies of which
we are the managing entity
Ascertaining and managing consolidated performance ona monthly basis

We are raising awareness of compliance and providing
relevant education by informing everybody in ourgroup about the “Corporate Mission Statement” andproviding training tailored to various trainee types,
among other initiatives.
We established a “Group Management Policy”, torespect the “Jiritsu”* management by each groupcompany, and to be involved in important decisionmaking at the board of directors or organizationequivalent to the board of directors of each groupcompany based on the relationship of trust establishedthrough active “Dialogue” as a shareholder, and tocreate new value through strong “Collaboration” ofeach group company including the Company.
*"Jiritsu" is the Japanese term. In Group Management Policy, we define
it to mean “following the rules necessary for the management of eachgroup company, such as our group’s management principles, strategies,
and policies, to discipline oneself, to think, make decisions, act for
oneself in order to achieve goals, and to be accountable to stakeholders”.

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With respect to the “important management issues”
determined by each of our consolidated companies, weare instilling the “institutional decision-making
method”, in which consolidated subsidiaries and theCompany hold discussions in advance to ensure thatthey are on common ground regarding the importantresolution issues, with the ultimate goal of making an
institutional decision by consolidated subsidiaries.
In cases where Audit & Supervisory Board Members
are dispatched to a subsidiary from the Company, each
Audit & Supervisory Board Member strives toimplement an effective audit by specifying important
audit items in accordance with the business risks ofeach subsidiary to ensure the mitigation of risk andautonomous management at each subsidiary.
We support our subsidiaries and other consolidated
companies in a variety of ways, including: educating
and raising awareness regarding internal control at
subsidiaries; requiring employees of subsidiaries toparticipate in risk management training; raisingawareness of the “Sumitomo Corporation Group
Compliance Policy” through training, briefings and elearning materials; providing a selection of rules forInternal Control Systems

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subsidiaries to use as examples; and promoting the
introduction of “Speak-Up Systems”.
With respect to information security, in addition to
implementing assessments related to IT security at a
portion of subsidiaries, we are also providing support
to subsidiaries by providing seminars and training
pertaining to information security.
We are supporting various types of risk management
related to insurance for subsidiaries. We selectsubsidiaries including important risks from theperspective of insurance risk management, identify thebusiness risks faced by these companies, and carry out
measures that support the analysis, evaluation, andcorrect recognition of insurance coverage.
We are supporting evaluation of the internal control
systems at subsidiaries, as well as the identification andrectification of issues by setting basic elements to be
developed and operated in order to establish, operate,evaluate, and improve internal control at subsidiaries,
and are conducting regular dialogue on such elements
between us and our subsidiaries. Also, we conduct
analysis of the issue identification capabilities and issue
solution capabilities of these activities, and areplanning to utilize these outcomes of this analysis.
Through this initiative, we are continuing to support thestrengthening of compliance systems at subsidiaries byusing a “Compliance Roadmap,” which indicates thecondition of each compliance system that our groupshould target.
We are implementing activities that promote theimprovement of corporate value by encouraging theautonomous growth of subsidiaries and other entities.
We are issuing manuals related to subsidiary, etc.
strategies, medium-term management plan, and group
governance as the parent company, in addition to inhouse training, we are selecting specific subsidiaries as
a leading model, enhancing subsidiary governance, andundertaking the formulation of business strategies for
specific businesses. We are then deploying this modelat other subsidiaries, etc.
The results of auditing subsidiaries and otherconsolidated companies subject to internal auditing arereported to the President and Chief Executive Officer
as well as to the Board of Directors.

6. Matters regarding personnel assigned to support the operations of Audit & Supervisory Board Members
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Establishing the “Audit & Supervisory Board Members’
Administration Department” to support the Audit &Supervisory Board Members and assigning several full-

We have assigned several full-time staffers to the“Audit & Supervisory Board Members’ Administration
Department”.

Internal Control Systemstime staffers to this department
Specifying in writing those persons authorized to issue
instructions to the “Audit & Supervisory Board
Members’ Administration Department” and thedepartment’s responsibilities, and clearly defining its
purpose as an organization for assisting the Audit &Supervisory Board Members
Conducting personnel evaluations of members of the“Audit & Supervisory Board Members’ Administration
Department” by an Audit & Supervisory Board Member;consulting in advance with an Audit & Supervisory
Board Member regarding transfers of the department’s
personnel

Current Implementation StatusInternal rules specify that the Audit & Supervisory
Board Members are authorized to issue instructions to
the general manager of the Audit & Supervisory Board
Members’ Administration Department and that the areaof operational responsibility of the Audit &Supervisory
Board Members’ Administration
Department is assisting the Audit & Supervisory Board
Members in their duties.
An Audit & Supervisory Board Member appointed by
the Audit & Supervisory Board conducts the personnel
evaluations of the general manager of the Audit &Supervisory
Board Members’ Administration
Department. An advance consultation is conductedwith an Audit & Supervisory Board Member appointed
by the Audit & Supervisory Board to obtain the Audit& Supervisory Board Member’s consent regardingtransfers of the department’s personnel.

7. Systems for reporting to Audit & Supervisory Board MembersDeveloping a system that enables Audit & Supervisory
Board Members to attend all meetings, including thoseof the “Management Council”
Delivering to the Audit & Supervisory Board Members
important materials pertaining to the execution ofoperations involving the Company, its subsidiaries andother consolidated companies, and arranging for officers
and employees to report and give briefings to the Audit& Supervisory Board Members
Developing a system to ensure that persons submitting
the aforementioned reports and persons making contact
via the “Speak-Up System” will not be subjected toadverse treatment due to such reports/contact

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In addition to meetings of the Board of Directors, Audit& Supervisory Board Members attend other important
meetings including those of the “Management
Council”, the “Company-wide Loan and Investment
Committee”, the “Internal Control Committee”, the“Corporate Sustainability Committee” and the“Compliance Committee” in accordance with internal
rules.
We deliver important materials pertaining to the
execution of operations when requested to do so by
Audit & Supervisory Board Members, and arrange for
officers and employees to report and give briefings on
the businesses of each organization and company as per
the request of Audit & Supervisory Board Members.
We ensure that persons submitting the aforementioned
reports to Audit & Supervisory Board Members are notsubjected to adverse treatment due to suchreports/contact. In addition, we have specified in theinternal rules that persons making contact via the“Speak-Up System” should not be subjected to adverse
treatment and that in cases where persons submitting
reports believe they have been subjected to suchprohibited adverse treatment, they can report the matterto the Speak-Up contact desk.

8. Other systems for ensuring that auditing will be carried out effectively by the Audit & Supervisory Board Members
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Appointing experts on law, accounting, and the like, as
external Audit & Supervisory Board Members
Maintaining close contact between the “Internal Auditing
Department” and the Audit & Supervisory Board
Members to contribute to effective auditing, such as by

The “Internal Auditing Department” interacts closelywith the Audit & Supervisory Board Members,
submitting an internal auditing plan to them prior to thestart of the business year and sharing internal audit
results with them in a timely manner. In addition, theInternal Control Systems

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reporting internal auditing plans and results to the Audit& Supervisory Board Members
Exchanging information between the Audit &Supervisory Board Members and the Accounting Auditor
to improve the efficiency and quality of audit activities
Exchanging information between our Audit &Supervisory Board Members and subsidiaries’ Audit &Supervisory Board Members
Clearly stipulating the methods for handling the expenses
and liabilities incurred by Audit & Supervisory Board
Members in the execution of their duties

Current Implementation StatusInternal Auditing Department shares audit results with
the Accounting Auditor on a regular basis.
Audit & Supervisory Board Members conduct regularmeetings with the Accounting Auditor.
In addition to liaison meetings attended by Audit &Supervisory Board Members at subsidiaries, Audit &Supervisory Board Members conduct separate
meetings with the Audit & Supervisory Board
Members of each subsidiary several times a year,
interacting and exchanging information with Audit &Supervisory Board Members at subsidiaries andassociated companies.
Expenses and liabilities incurred by Audit &Supervisory Board Members in the execution of theirduties are handled in accordance with internal rules,
including by drawing up budgets and managing theirimplementation.