Basic Policy Concerning Development of Internal Control System
Basic policy concerning items prescribed in Article 399-13, Paragraph 1, Items 1 (b) and (c) of the Companies Actof Japan, and the development and maintenance of relevant systems for Ahresty Corporation (hereinafter referredto as “the Company”) and the Ahresty Group (hereinafter referred to as “the Group”) are specified as follows.
1.

Systems to ensure that the execution of duties by directors and employees of the Company and its
subsidiaries comply with laws and regulations and the Articles of Incorporation(1) The Group shall establish Compliance Principles, Compliance Rule and Code of Conduct of the Ahresty
Group as the codes of conduct for directors and employees of the Group, and directors shall strive to berole models and make sure that employees are aware of the Rules.
(2) The Global Compliance Committee headed by the President of the Company as Chairperson shallsupervise the development, maintenance and improvement of the compliance system of the Group, set up
the secretariat of the Committee within the Management Planning Department, and promote theestablishment and operation of the compliance system of the entire Group.
Each subsidiary of the Company shall set up a Compliance Committee led by the President of eachcompany as Chairperson, and shall develop, maintain, and improve the compliance system in cooperation
with the Global Compliance Committee.
(3) Director in charge of General Administrative Command of the Company as Head, and Accounting
Department, Management Planning Department and Human Resource Department as promoting
departments shall establish and operate internal control systems of the entire Group, and the effectivenessand legality of internal control systems of the entire Group shall be secured through internal audits
conducted by the Internal Audit Department that is independent from the executive departments.
(4) The Group shall establish a system to report violations of laws and regulations and other complianceviolations to Management Planning Department or to an external attorney, and shall operate it inaccordance with Guideline of Compliance Reporting System.
(5) The Group shall take a resolute attitude against antisocial forces and groups that pose a threat to the orderand safety of civil society and shall firmly eliminate any undue claims or demands for transactions.

2.

Systems to store and manage information related to execution of duties by directors of the Company
Information concerning execution of duties by directors shall be appropriately and safely stored and managed
for a specified period, in specified storage media, and in an accessible manner in accordance with Information
Control Rule and Information System Rules and other documents specified in AS (Ahresty Standards).

3.

Rules and/or other systems related to management of risk of losses to the Company and its subsidiaries(1) The Group shall recognize and identify, analyze and assess risks related to cash management, asset
utilization, commercial transactions, accidents and disasters, and all other corporate activities, shallestablish Credit Management Rule etc. to address existing individual risks, and Risk Control Rule toaddress risks comprehensively, shall appoint administrators for each risk category, and establish andoperate risk control systems in accordance with such rules.

(2) The Group shall establish Emergency Situation Handling Guidelines that contemplate contingencies andin case a contingency occurs, shall establish a Response Task Force led by the President of the Company,and depending on the situation other subordinate organizations to promptly respond to the contingencyand establish and operate a system to minimize losses in accordance with these Guidelines.
4.

Systems to ensure that directors of the Company and its subsidiaries exercise their duties efficiently(1) The Company shall in principle hold a Board Meeting once a month and if necessary hold extraordinary
meetings as the basis of a system to secure effective execution of their duties, enabling directors tomutually oversee business execution, communicate and exercise their duties.
(2) Execution of business decided by the Board Meeting of the Company that concern multiple departmentsor the Group shall be executed after deliberation at the Executive Committee Meeting composed ofExecutive Officers and held twice a month in principle.
(3) Regarding execution of business decided by the Board Meeting of the Company, Role Assignment Ruleand Rule for Position and Job Authority that apply to the Group shall specify persons responsible for each
duty and his/her responsibilities as well as details of execution procedures.

5.

Systems to ensure appropriate business operations of the corporate group consisting of the Company
and its subsidiaries, and systems related to reporting execution of duties by directors of the Company’s
subsidiaries to the Company(1) Management supervision of the Group shall be conducted based on a system requiring subsidiaries toobtain approval by and report to the Company in accordance with Management Planning Control Ruleand Affiliated Company Management Rule. Furthermore, management of the Group will be monitored
through the Plant General Managers Meeting held once a month or other meetings if necessary.
(2) To ensure appropriateness of business of the Group, Compliance Principles and Code of Conduct of theAhresty Group shall apply to the entire Group, and shall be the basis for each company to establish andrevise its own Rules and Guidelines.
In case a subsidiary acknowledges that management supervision and/or management guidance by theCompany violates applicable laws and regulations and/or causes other compliance issues, they shall reportsuch cases to Internal Audit Department or the Global Compliance Committee.
(3) Internal Audit Department shall also assess the effectiveness of audits and internal control systems of theGroup in accordance with Internal Audit Rules.

6.

Systems regarding staff assisting the Audit and Supervisory Committee, items regarding their
independence from the directors (other than directors who are Audit and Supervisory Committeemembers), and items to ensure the effectiveness of instructions to such assisting staff
In case the Audit and Supervisory Committee needs staff to assist its duties, assisting staff for the Audit andSupervisory Committee shall be assigned.

The Appointment, dismissal, transfer, and evaluation of suchassisting staff shall be determined subject to agreement by the Audit and Supervisory Committee, in order tosecure their independence from the directors who are not Audit and Supervisory Committee members.

Whenassisting the Audit and Supervisory Committee, assisting staff shall follow the instructions of the Audit andSupervisory Committee.

7.

Systems regarding the reporting to the Audit and Supervisory Committee by i) directors (other thandirectors who are Audit and Supervisory Committee members) and employees of the Company, ii)
directors, corporate auditors and employees of the Company’s subsidiaries, or iii) persons who havereceived reports from persons specified in i) and ii) , and systems concerning other reporting to the Auditand Supervisory Committee(1) Directors (other than directors who are Audit and Supervisory Committee member) and employees of theGroup shall report important matters that affect business execution and performance at the Executive
Committee in accordance with Rule of Executive Committee, the Plant General Manager Meeting inaccordance with Guidelines for Operations of Plant General Manager Meeting, and other meetings that
the Audit and Supervisory Committee member and auditors attend and where duties and important items
that affect business performance are reported.

Regardless of the above, Audit and Supervisory

Committee members selected by the Audit and Supervisory Committee may require the directors of theGroup (other than directors who are Audit and Supervisory Committee members) and employees to reportwhenever necessary.
(2) Internal Audit Department shall establish an internal audit plan in accordance with Internal Audit Rule incoordination with the Audit and Supervisory Committee and shall report the results of audits to the Auditand Supervisory Committee members once a month in principle.
(3) The appropriate reporting of violation of laws and regulations and other compliance issues to the Audit
and Supervisory Committee shall be ensured by maintaining the appropriate operation of the internalreporting system in accordance with Guideline for Compliance Reporting System.
8.

Systems to ensure that employees who have reported to the Audit and Supervisory Committee of theCompany do not receive disadvantageous treatment
The Company shall prohibit disadvantageous treatment of directors and employees of the Group who reported
to the Audit and Supervisory Committee and shall make sure that directors and employees of the Group areaware of this.

9.

Items concerning policy related to treatment of expenses etc. due to execution of duties by the Audit andSupervisory Committee Members of the Company (limited to execution of duties by Audit andSupervisory Committee), and systems to secure effective execution of audits by the Audit andSupervisory Committee(1) When an Audit and Supervisory Committee member requests for advancement of expenses etc. inaccordance with Article 399-2, Paragraph 4 of the Companies Act for execution of duties, the responsible
department of the Company shall review and promptly pay the respective expenses or obligations, unlessdeemed unnecessary for the execution of duties by the respective Audit and Supervisory Committee
member.
(2) In case Audit and Supervisory Committee requests an independent external expert such as a lawyer or a
Certified Public Accountant etc. as advisor for an Audit and Supervisory Committee member, theCompany shall bear such expenses, unless such experts are deemed unnecessary for the execution ofduties by the respective Audit and Supervisory Committee member.

(3) Audit and Supervisory Committee members shall audit the status of execution of duties by directors ofthe Group (other than directors who are Audit and Supervisory Committee members) and employees inaccordance with the audit policy and assignments specified by Audit and Supervisory Committee,
frequently exchange information with the Accounting Auditor and Internal Audit Department, cooperatewith them and secure the effectiveness of the audit.
10. Systems to secure reliability of financial reporting of the Company and subsidiaries of the Company
In order to secure the reliability of financial reporting, the Group shall establish and operate an internal control
system that effectively controls financial reporting.