Sumitomo Corporation

Systems Necessary to Ensure the Properness of Operations of the Company(Internal Control Systems)
The Company will establish and implement, as described in the following, systems to ensure that
the Company’s Directors comply with laws and regulations and the Company’s Articles ofIncorporation in the execution of their duties, and other systems necessary to ensure the propernessof the operations of the Company and operations of group of enterprises consisting of the Company
and its subsidiaries (these systems are hereinafter referred to collectively as the “Internal Control
System”).
The Internal Control System based on this resolution has already been established and implemented,
but henceforth the Company will endeavor to establish a superior system in line with requests madefrom time to time based on ongoing reevaluations.
1.

Systems for ensuring that the execution of duties by Directors and employees complies
with laws and regulations and the Articles of Incorporation:

In addition to explicitly requiring compliance with laws and regulations under the “Corporate
Mission Statement” of the Sumitomo Corporation Group, the Company will set forth important
items that are to be observed with particular strictness from the viewpoint of compliance as“Sumitomo Corporation Group Compliance Policy” and a “Compliance Manual” will be
prepared and distributed to all officers and employees.



The Company will require all officers and employees to provide a written “Confirmation ofCompliance” with the purport of rigorously assuring strict compliance with laws andregulations.



Based on the Company’s internal rules, a “Chief Compliance Officer,” a “Compliance
Committee,” “Compliance Leaders,” and a “Speak-Up System” will be created.



The Chief Compliance Officer will supervise the handling of potential and verified complianceviolations, will implement measures to ensure compliance, and will deal with matters brought
to light via the “Speak-Up System.”

The Compliance Committee will formulate and propose compliance-related measures, and willoffer advice to the Chief Compliance Officer on the implementation of these compliancerelated measures.

Compliance Leaders will rigorously assure compliance in each Business Group and domestic
and overseas office from a position close to the front lines, and they will also conduct activities
relating to compliance enlightenment.
1Routes will be secured via the Speak-Up System that enable employees and officers tocommunicate information on compliance directly to the Chief Compliance Officer, with theLegal Department, Audit & Supervisory Board Members, outside professionals and outside
attorneys serving as liaisons.

2.

Systems for retaining and managing information pertaining to the Directors’ executionof their duties:

Important documents with regard to meetings of each type, including minutes of meetings ofthe Board of Directors, and information pertaining to the execution of duties and decisionmaking will be properly preserved and managed under internal rules regarding the respective
matters.



Steps will be taken under internal rules to prevent divulgence of information to third parties orother misuse of information.



Important documents pertaining to the Directors’ execution of their duties will be madeavailable for review in a timely manner when requested by an Audit & Supervisory Board
Member.

3.

Rules and other systems pertaining to the management of risk of loss:The Company defines “risk” as “the possibility of losses due to the occurrence of anticipatedor unanticipated situations,” and also as “the possibility of not achieving the expected returnon business activities.” The Company has set the following three items: “stabilize
performance,” “strengthen financial base” and “maintain corporate reputation” as the goals of
its risk management activities. The Company categorizes its business activities into
investments and commercial transactions and manages risk after identifying both common andcategory specific risk factors. Furthermore, the Company will continue to evolve its risk
management activities in order to adequately respond to changes in external environment andthe development of new business models.



The sections of the Corporate Group will build a framework, conduct monitoring, andimplement improvements regarding risk management across all levels of the Company throughthe formulation of internal rules pertaining to the respective areas of operational responsibility
and the formulation of risk management policies, methods, and guidelines. In addition, they
will strive to improve risk management through the preparation and distribution of manuals
and training activities as appropriate. All business units and other sections conducting businessincluding the Business Group will carry out risk management required for the conduct of2

individual cases under this company-wide framework.
An “Internal Control Committee” will be instituted and will carry out overall management andtimely evaluation of internal controls as a whole on a consolidated basis, along with theidentification of important issues with respect to internal controls and the planning andimplementation of basic policies for improvement. In addition, in order to more efficiently
operate each of the existing internal control frameworks, create synergies, and collaborate withthe 3rd Line (the Internal Auditing Department), the "Internal Control Promotion Department,"
which will be responsible for conducting the Sumitomo Corporation Group's internal controlrelated operations in an integrated manner, will be established within the same organization
with the Internal Auditing Department under the "Head of Internal Control and Internal Audit
Group." The Internal Control Promotion Department will actively identify issues in terms ofinternal control matters and utilize internal control activities within the Sumitomo Corporation
Group to establish a more effective and consistent PDCA cycle for internal control throughout
the Sumitomo Corporation Group.



A “Company-wide Loan and Investment Committee” will be established as an advisory organ
to the “Management Council”, which serves as a decision-making body and will carry out
deliberations regarding important rules, systems, and the like for risk management andregarding important investment and financing cases.

A “Corporate Sustainability Committee” will be established as an advisory body to the“Management Council”, which serves as a decision-making body and discusses important
policies, measures, and initiatives relating to the promotion of sustainability.



The Company will develop and maintain the resilient system to ensure the safety of its Group
members, rapid recovery and continuity of its business under the crisis such as natural disasters(Earthquake, Windstorm, Flood, etc.), infection disease, terrorism or riot, etc.

The “Internal Auditing Department” will be established under the direct supervision of the
President and Chief Executive Officer as an independent body for company-wide monitoringof operations, and its auditing will apply to all organizations within the Company and in its
domestic and overseas subsidiaries. The results of internal auditing will be reported directly to
the President and Chief Executive Officer each month and will also be reported regularly to
the Board of Directors.

4.

Systems for ensuring the efficient execution of the Directors’ duties:



The size of the Board of Directors will be sufficient to enable full discussions and speedy andreasonable decision-making.



Two or more Outside Directors will be elected so that through their diverse perspectives, the3Company can ensure appropriate decision-making in the meeting of the Board of Directors
and further enhancement of supervisory functions.


A system of Executive Officers will be introduced in order to clarify responsibility andauthority for the execution of operations and to endeavor for the strengthening of thesupervisory functions of the Board of Directors.

With the exceptions of the Chairman of the Board of Directors and Outside Directors, all
Directors will, in principle, be Representative Directors, and will hold concurrent posts as
Executive Officers.

Management responsibilities will be made clear each business year, and the term of office for
Directors will be set at one year so as to respond speedily to changes in the management
environment.

The terms of office of the director serving as the Chairman of the Board of Directors and of
the executive officer serving as the President and Chief Executive Officer will not, in principle,
exceed six years each.

A “Nomination and Remuneration Advisory Committee” composed of a majority of outside
directors will be established as an advisory organ to the Board of Directors. The Nomination
and Remuneration Advisory Committee will deliberate on the matters 1 through 8 below andwill submit the results thereof as recommendations to the Board of Directors. Additionally, thecommittee shall also deliberate and determine any matters delegated by the Board of Directorsthat are not included in following matters, and report the outcome of such deliberation ordecision to the Board of Directors:(1) Policy and procedure for appointment and dismissal of the President and Chief Executive
Officer(2) Policy and procedure for appointment and dismissal of the Chairman(3) Nomination criteria for directors and audit & supervisory board members(4) Appointment and dismissal of the President and Chief Executive Officer (including
nominating successors to the President and Chief Executive Officer)(5) Nominations of candidates for directors and audit & supervisory board members(including deciding representative directors and executive directors)(6) Appointment of members of the Management Council(7) Structure and level of remuneration and bonuses for directors and executive officers, aswell as limits for remuneration of audit & supervisory board members(8) Advisor system.



A dedicated organization will be established to strengthen the support functions of the Boardof Directors, such as communication between the Board of Directors and the executing persons(executive officers, etc.), selection of agenda items to be discussed at the Board of Directors
4meetings, and organization of issues, to improve the quality of discussions at the Board of
Directors meetings.
In addition to the Management Council as a decision-making body, various committees willbe established as advisory organs. In addition, “Liaison Meetings” and various otherconferences will be instituted for the exchange of information.



A medium-term management plan will be formulated and a budget will be compiled to set
goals. In addition, a performance management system will be introduced in order to ascertain
the state of Business Group CEO’s execution of operations and to serve in the formulation ofstrategies for the future.



Under internal rules, agenda items requiring discussion by the Board of Directors will be
specified in writing, and the job responsibilities of officers and employees will be made clear;in addition, the decision-making authority of officers and employees regarding importantmatters will be specified in writing.

5.

Systems for ensuring the properness of operations by the corporate group comprising
the Company and its subsidiaries:

The Corporate Mission Statement of the Sumitomo Corporation Group promotes compliancewith laws and regulations and the sharing of values to be respected throughout the Group.



For the purpose of sharing and implementing its approaches to group management, theCompany will establish the Group Management Policy（GMP）and set Jiritsu (working
toward one’s own goals subject to Group rules and accountability), dialogue, andcollaboration as the three principles of group management. Through this, the Company will
aim to enhance the corporate value of its Group as a whole.

In order to ensure that appropriate institutional decisions which contribute to maintaining andenhancing enterprise value of its subsidiaries and other consolidated companies are made, theCompany shall – based on agreements with such group companies – obtain enoughinformation and request prior consultation on “important management matters”. In addition,
the Company will manage its subsidiaries and other consolidated companies through thedispatch of directors, audit & supervisory board members, and employees and other personnel
assigned who execute business operations – in line with the businesses and situations of suchgroup companies.



The Company will carry out support so that internal controls are created, operated, evaluated,
and improved appropriately at its subsidiaries and other consolidated companies.
5Internal audits of subsidiaries and other consolidated companies of which the Company is the
managing entity will be conducted in accordance with internal rules.



The Company will support its subsidiaries and other consolidated companies to construct aframework for risk management, including risk management policies, methods, guidelines,
regulations, etc., and to make necessary improvements thereto.

Subsidiaries will be supported to develop systems for complying with laws and regulations inthe same strict manner as the Company, including through aiming to familiarize and implement“Sumitomo Corporation Group Compliance Policy”, the expansion of the “SC Global SpeakUP” system (an internal whistle-blowing system for Sumitomo Corporation group companies),
the establishment of a Compliance Committee, and the preparation/distribution of aCompliance Manual.



The Company will ascertain its consolidated performance, including that of subsidiaries,
promptly and accurately on a monthly basis, and it will carry out performance management indetail.

6.

Matters regarding personnel assigned to support the operations of Audit & Supervisory
Board Members:An “Audit & Supervisory Board Member’s Administration Department” will be establishedto support the operations of the Audit & Supervisory Board Members, and several full-time
staffers will be assigned to this department.

Internal rules will clearly stipulate those persons authorized to issue instructions to the Audit& Supervisory Board Member’s Administration Department and the responsibilities of the
Audit & Supervisory Board Member’s Administration Department, and will clearly define thepurpose of the Audit & Supervisory Board Member’s Administration Department as anorganization for assisting the Audit & Supervisory Board Members in their operations.



The personnel evaluations of the members of the Audit & Supervisory Board Member’s
Administration Department will be conducted by the Audit & Supervisory Board or an Audit& Supervisory Board Member appointed by the Audit & Supervisory Board. In addition, theDirectors shall consult in advance with the Audit & Supervisory Board or an Audit &Supervisory Board Member appointed by the Audit & Supervisory Board and obtain theconsent thereof regarding personnel transfers.

7.

Systems for reporting to Audit & Supervisory Board Members:

Audit & Supervisory Board Members may attend all meetings, including those of the6Management Council. In addition, the Chairman of the Board of Directors, the President andChief Executive Officer, and Audit & Supervisory Board Members will meet regularly.


Important materials pertaining to the execution of operations involving the Company, its
subsidiaries and other consolidated companies will be delivered to Audit & Supervisory Board
Members, and officers and employees will report and give briefings to Audit & Supervisory
Board Members as necessary.

Persons submitting the aforementioned reports and persons making contact via the Speak-Up
System will not be subjected to adverse treatment due to such reports/contact.

8.

Other systems for ensuring that auditing will be carried out effectively by Audit &Supervisory Board Members:The external Audit & Supervisory Board Members will be experts on law, accounting, and thelike, and auditing will be implemented from diverse points of view.



The Internal Auditing Department will maintain close contact with Audit & Supervisory Board
Members so as to contribute to effective auditing by Audit & Supervisory Board Members,
such as by reporting the plans and results of internal audits to Audit & Supervisory Board
Members in a timely manner.



Audit & Supervisory Board Members will endeavor to ascertain the audit activities of the
Accounting Auditor responsible for auditing the Company’s financial results and exchange
information by holding regular meetings, and will endeavor to efficiently and qualitatively
improve the audit activities of the Accounting Auditor such as by attending audit evaluation
meetings, and being present for inventory audits.

In order to pursue their duties appropriately, Audit & Supervisory Board Members will
endeavor to communicate and exchange information with the subsidiaries’ audit & supervisoryboard members, such as by conducting liaison meetings with them.

Internal rules will clearly stipulate the methods for handling the expenses and liabilities
incurred by Audit & Supervisory Board Members in the execution of their duties.

7