Basic Policy for Internal Control

This policy is based on the Companies Act and the Ordinance for Enforcement of the Companies Act. The policy defines provisions required to build an internal control system for ensuring the appropriateness of the operations of the corporate group consisting of the Company and affiliated companies (hereinafter, "the OYO Group", including the Company).

1. System to ensure that the execution of duties by directors and employees of each OYO Group company complies with laws, regulations, and the Articles of Incorporation (compliance system)

1. In accordance with the OYO Group Code of Conduct, which is based on our Management Philosophy and Management Vision, we will promote sound corporate activities in accordance with not only legal compliance but also social norms.

2. In order to thoroughly implement the above Corporate Code of Conduct, in accordance with compliance regulations and compliance manuals, etc., we will conduct timely compliance education for the directors and employees of each OYO Group company, and will instill compliance management.

3. We will inform the directors, corporate auditors, and employees of each OYO Group company about the establishment and operation of the whistleblower / consultation contact. Furthermore, we will ensure that people reporting to said contact are not subject to disadvantageous treatment on the grounds of having engaged in whistleblowing / consultation.

4. In cooperation with the police and other related organizations, we will respond resolutely to anti-social forces and groups that pose a threat to social order and safety.

5. The department in charge of internal audits of the Company will periodically conduct internal audits of the Company and its affiliates.

2. System for storing and managing information related to the execution of duties by directors (information storage management system)

1. We will appropriately manage and store documents and information related to the execution of duties by directors (minutes of Board of Directors meetings, minutes of Board of Executive Officers meetings, minutes of committee meetings, requests for approval, contract documents, etc.; hereinafter, "Duty Execution Information") in accordance with document management regulations, etc.

2. We will verify operational status and review regulations as necessary.

3. Directors and corporate auditors shall be able to refer to Duty Execution Information as necessary.

3. Regulations and other systems related to managing the loss of risk (Risk Management System)

1. We will work to avoid and reduce risks in accordance with risk management rules that systematically regulate risk management.

2. We will appoint a Representative Director & President as the supervisor of risk management, and will establish a department in charge of risk management.

3. The office general manager will create and implement a risk prevention plan at the beginning of the year.

4. System to ensure that directors perform their duties efficiently (System for Efficient Execution of Duties)

1. The Board of Directors will make decisions on important management matters and supervise the execution of duties by directors in accordance with the Board of Directors Regulations.

2. Through the Executive Officer System, which clarifies the delegation of business execution authority and responsibility for execution, we will ensure a system which enables directors to concentrate on their management functions.

3. We will increase the speed of management by establishing an appropriate and efficient business execution system in accordance with administrative authority rules, which stipulate positions, duties, authority, etc., and rules of approval process.

5. System to ensure the appropriateness of operations in the OYO Group (OYO Group Management System)

1. In accordance with the Domestic Affiliated Company Management Regulations and the Overseas Affiliated Company Management Regulations, the Company shall require affiliated companies to submit periodic reports, and to issue reports as defined in the Domestic and Overseas Affiliated Company Reporting Standards.

2. The Company will exchange information on overall Group management by periodically holding management meetings with affiliated companies.

3. The Company shall have affiliated companies establish systems such as rules regarding risk management, and endeavor to avoid and reduce risks at each company.

4. The Company shall have affiliated companies develop systems such as regulations based on (4) above so that the directors of each company can efficiently execute their duties according to scale and business conditions.

6. Matters concerning employees who assist the duties of corporate auditors, the independence of such employees from directors, and ensuring the effectiveness of instructions to such employees

1. The Board of Directors will promptly respond to requests from corporate auditors for the appointment of employees as assistants.

2. Approval of the Board of Corporate Auditors must be obtained in advance for matters pertaining to the appointment or transfer of assistant employees.

3. The duties of the assistant employees as based on instructions from corporate auditors are not subject to directions and orders from directors.

4. We will ensure that the appointed assistant employees execute their duties based on a full understanding of the importance and independence of their duties as based on instructions from corporate auditors.

7. Systems for reporting to the Company's corporate auditors by directors, corporate auditors and employees of OYO Group companies, or by persons who received reports from the aforementioned directors, corporate auditors and employees; systems for other reporting to the Company's corporate auditors

1. In response to requests from the Company's corporate auditors, directors and corporate auditors of OYO Group companies will issue reports on the state of management in a timely manner. If there is discovery of significant compliance violations or facts which threaten to cause serious damage in the execution of duties, directors and corporate auditors will immediately report to the Company's corporate auditors.

2. The directors of OYO Group companies and the heads of departments in charge of compliance will periodically report to the Company's corporate auditors on the operational status of the whistleblowing system and on matters related to whistleblowing and consultation. Important matters related to whistleblowing and consultation will be immediately reported to the Company's corporate auditors.

3. At any time, in response to requests from the Company's corporate auditors, the directors, corporate auditors, and employees of OYO Group companies will provide explanations regarding the execution of duties.

8. Matters concerning payment of expenses arising from execution of duties by corporate auditors

1. If a corporate auditor requests advance payment, reimbursement, etc., of expenses arising from the execution of duties, the Company shall promptly pay such expenses or assume relevant debts, unless deemed unnecessary for the execution of duties by that corporate auditor.

9. Other systems to ensure that audits by corporate auditors are conducted effectively

1. Corporate auditors can attend important meetings such as Board of Directors meetings and Board of Executive Officers meetings, and state their opinions.

2. The Representative Director & President will periodically hold meetings with the Board of Corporate Auditors to exchange opinions.

3. The Board of Corporate Auditors will periodically hold meetings with independent auditors and outside directors to exchange opinions.

10. Systems for ensuring appropriateness and reliability of financial reporting (Evaluation / Reporting System for Internal Control on Financial Reporting)

1. Establish systems necessary to ensure the appropriateness and reliability of financial reporting by the OYO Group.

2. Periodically evaluate the effectiveness of the above systems and report the evaluation results to the Board of Directors.