Systems to ensure that business is conducted properly (The Seibu Holdings’ Basic Policyon Internal Controls)

1. Objectives
The purpose of this statement of basic policy is to specify matters for Seibu Group companies, which
include Seibu Holdings Inc. (hereinafter collectively referred to as the “Seibu Group”), such thatpertain to Seibu Group initiatives to develop systems of internal control designed to ensure theadequacy and legal compliance of its business operations so that the Seibu Group can build amanagerial platform to enable sustainable growth achieved in the spirit of the “Group Vision.”
The Seibu Group swiftly implements specific measures on the basis of the policies stipulated below,
checks on implementation of such measures, and ceaselessly works to make improvements.

2. System to ensure that Directors and employees of the Seibu Group perform their duties in compliancewith relevant laws and regulations and the Articles of Incorporation(1) The Seibu Group adheres to the Seibu Group Code of Corporate Ethics which spells out thefundamental rules that all Seibu Group Directors and employees must take to heart, the aim of whichis to ensure that the Group acts as part of society in upholding its responsibilities and earning the trustof others. The Seibu Group also instills a firm awareness of the Seibu Group Code of Corporate Ethics
by stipulating guidelines for behavior to be practiced when executing job duties, and through othermeans that include distributing compliance manuals to the Directors and employees and providingthem with training in that regard.
(2) In accordance with the Seibu Group Basic Rules on Compliance Systems, the Company has
established the Seibu Group Corporate Ethics Committee, which is chaired by the President and works
on developing a compliance framework for the Seibu Group and also checks on how the framework isoperating. The Company also has a Compliance Department which comprises the department’s
general manager and staff members and is tasked with overseeing compliance matters. Moreover, theCompany also sets up corporate ethics hotlines as well as sexual harassment and human relations
hotlines both within and outside the Company, to enable swift identification and resolution of issues
pertaining to Seibu Group compliance.
(3) The Seibu Group vows to sever any and all ties with antisocial forces. The Seibu Group also works
with law enforcement authorities, attorneys and others in standing against such elements of society
and otherwise takes a firm and organized stand in handling such matters, in accordance with the Seibu
Group Basic Rules on Dealings with Antisocial Forces which stipulate fundamental principles foraddressing matters involving antisocial forces.
(4) The Seibu Group maintains internal regulations that comply with laws and regulations and the Articlesof Incorporation, and the Directors and employees perform their duties in accordance with suchregulations.
(5) The Seibu Group establishes a legal compliance framework to ensure proper execution of duties, andworks to improve units handling legal affairs so that the Group is ready to take firm action when laws
and regulations are revised.
(6) The Seibu Group properly maintains, operates and evaluates internal control systems for financial
reporting, and ensures that respective financial reports are reliable, in accordance with the Seibu
Group Basic Rules on Internal Controls for Financial Reporting.
(7) The Company has established the Internal Audit and Internal Control Department, which functions
independently of operating units. The department is tasked with performing internal audits, and dulymonitors Seibu Group operations to ensure that they are adequate and in compliance with relevantlaws and regulations and internal rules.

3. System for retaining and managing information pertaining to the performance of duties by Directors(1) The Company clearly stipulates which units are to maintain responsibility for managing informationand mechanisms in that regard, and also properly safeguards, manages and uses its overall information
assets, in accordance with the Seibu Group Rules on Information Management.
(2) All documents pertaining to the performance of Company duties, such as minutes of Board ofDirectors and Management Council meetings (including details recorded on electronic media), aretracked, stored, retained and discarded in accordance with procedures set forth in the Rules onDocumentation. The Company’s Directors and Audit & Supervisory Board Members may inspect all
documents and other such information that has been stored and retained.
(3) The Company ensures proper safeguarding, management and use of information assets contained in
information systems, in accordance with the Seibu Group Rules on Information Security.

4. Rules and other systems to manage financial risk of the Seibu Group(1) The Company establishes units in charge of controlling risk, while also assessing risk, preemptivelyaddressing risk-related matters, and forging a framework that enables measures to be taken swiftly
should any specific risk materialize, in accordance with the Seibu Group Risk Management Policy andthe Seibu Group Rules on Risk Management, which stipulates fundamental approaches and control
frameworks for managing risk in the Seibu Group.
(2) The Company’s Internal Audit and Internal Control Department monitors the efficacy and efficiency
of its risk control framework. Any details regarding risk that emerges through such monitoring isshared with units in charge of risk management.

5. System to ensure that Directors of the Seibu Group perform their duties efficiently(1) The Company holds meetings of the Board of Directors at least once per month, as a general rule, forthe purpose of deliberating on matters of managerial importance. The Company has also establishedthe Management Council, which comprises managing officers and others and adequately deliberates
on matters of importance with respect to business execution.

(2) The “Group Vision” of the Seibu Group is shared among its Directors and employees, while Seibu
Group Directors and executives also work to achieve objectives targeted in accordance with businessplans established with the aim of realizing the “Group Vision” in mind. The Company’s Board ofDirectors requests that performance reports be provided to executive divisions on a regular basis, andchecks on progress toward achieving planned objectives.
(3) Individual companies of the Seibu Group establish respective organizational structures, divisions ofjob duties, and rules on administrative authority to ensure that operations are performed efficientlyand in a systematic manner.
(4) The Company’s Internal Audit and Internal Control Department monitors operations to ensure thatthey are performed efficiently.

6. System to ensure proper business operations in the Group, comprising the stock company and its parentcompany and subsidiaries(1) The Seibu Group shares the “Group Vision” across the entire group, and engages in business activities
drawing on the whole group toward making the “Group Vision” a reality. Moreover, each company ofthe Seibu Group adheres to the Seibu Group Code of Corporate Ethics and acts as a part of society inupholding their responsibilities.
(2) The Seibu Group ensures that decision making and business operations of respective Seibu Group
companies are performed properly and efficiently in accordance with the Seibu Group Rules on
Subsidiary and Associate Management. Furthermore, matters of importance with respect to business
operations of subsidiaries are referred or reported to the Company in accordance with the categories
for operation procedures prescribed in the Seibu Group Rules on Subsidiary and AssociateManagement.
(3) The Company’s Compliance Department and Internal Audit and Internal Control Department readily
act in conjunction with relevant units of respective Seibu Group companies in cooperating, providing
guidance and lending support with respect to compliance efforts and internal audits, aggregating risk
data, and forging mechanisms that enable shared contingency response measures.
(4) The Seibu Group ensures that business operations are efficient through active use of information
technologies, while also seeing to it that information systems are managed and operated properly, inaccordance with the Seibu Group Basic Policy on Information Technology, the Seibu Group Rules on
Management and Operation of Information Systems, and the Seibu Group Rules on Information
Security Systems.

7. Matters relating to employees who assist Audit & Supervisory Board Members upon request of such
Audit & Supervisory Board Members for assistance(1) The Seibu Group establishes Audit & Supervisory Board Member’s Offices each with their own
respective general managers and staff members and act as units that assist the Audit & Supervisory
Board Members in their duties. Audit & Supervisory Board Member’s Offices staffing is determinedupon giving due consideration to the views of the Audit & Supervisory Board Members.
8. Matters relating to independence from Directors of employees who assist Audit & Supervisory BoardMembers and ensuring effectiveness of instructions given to the relevant employees(1) Staff members of Audit & Supervisory Board Member’s Offices perform their duties under the Audit& Supervisory Board Members’ chain of command.
(2) Matters such as employee reassignment and personnel evaluations involving staff of Audit &Supervisory Board Member’s Offices are determined upon gaining approval of the Audit &Supervisory Board Members.

9. System for Directors, employees, and directors, audit & supervisory board members, employees, etc. ofsubsidiaries to report to Audit & Supervisory Board Members(1) Directors and employees of the Company, and directors, audit & supervisory board members andemployees of subsidiaries or persons who received reports from the foregoing persons provide
necessary reports and information to the Audit & Supervisory Board Members.
(2) Reports and information provided to the Audit & Supervisory Board Members, as stipulated in theprevious item, mainly include details regarding:•Upgrades and maintenance of internal control systems;•Internal audits, compliance and risk controls;•

Material matters involving litigation and disputes;•The state of initiatives involving internal audit units of individual Seibu Group companies;•Disclosure of corporate information;•Circulation of important documents pertaining to the performance of business operations such as
minutes of Management Committee meetings and approval documents (ringi); and•

Other matters involving requests of the Audit & Supervisory Board Members for reports orinformation.

(3) Directors and employees of the Company, and directors, audit & supervisory board members andemployees of subsidiaries or persons who received reports from the foregoing persons will not betreated unfavorably on account of their reporting to the Audit & Supervisory Board Members.

10. Other systems to ensure that Audit & Supervisory Board Members perform audits effectively(1) The Audit & Supervisory Board Members may attend, and state their views at important meetings
such as those of the Management Council.
(2) In order to perform efficient and effective audits, the Audit & Supervisory Board Members may seek
cooperation from individuals and entities including the Compliance Department, Internal Audit andInternal Control Department, and representative directors and audit & supervisory board members ofrespective Seibu Group companies.
(3) The Audit & Supervisory Board Members may seek advice as necessary from outside experts(attorneys, certified public accountants, licensed tax accountants, etc.).
(4) Expenses necessary for the performance of duties of the Audit & Supervisory Board Members are to
be borne by the Company. When spending audit costs, the Audit & Supervisory Board Members pay
attention to the efficiency and fairness thereof.
(5) The Representative Directors hold regular meetings with the Audit & Supervisory Board Members
where they exchange views regarding key issues pertaining to audits and other such matters.