Internal Control System-related Concepts

Basic Internal Control System Policy and Status of the System's Establishment
In accordance with Japan's Companies Act and the Regulations for Enforcement of the Companies Act, Macbee has adopted through a resolution of its Board of Directors the "Basic Policy for the Establishment of an Internal Control System," which applies to Macbee Planet, Inc. and all of its subsidiaries (below, "the group"). An outline of this basic policy has been included below.

1. System for ensuring that the group’s directors, executive officers, and employees execute their duties in accordance with relevant laws and regulations and the Articles of Incorporation

(1)Recognizing that compliance with laws and regulations and the Articles of Incorporation is an essential cornerstone of its corporate activities, the group requires its directors to perform their duties with integrity and fairness while establishing and maintaining a highly transparent management system.

(2)To ensure that its directors, executive officers, and employees act in compliance with laws and regulations and its Articles of Incorporation, the group will establish compliance-related regulations and endeavor to foster compliance awareness through ongoing training programs and timely internal communication.

(3)The Internal Audit Office (or Internal Auditing Manager; below, "Audit Office") shall conduct audits of the group in accordance with Macbee's policies, business regulations, manuals, and other internal guidelines. Furthermore, it shall promptly report the results of these audits to the group's directors and corporate auditors while providing appropriate recommendations.

(4)The group shall establish an internal reporting system through which all members can report activities they suspect may be in violation of compliance-related guidelines. Furthermore, it shall prescribe rules for this system's operation while ensuring its proper implementation.

2. System for storage and management of information related to the execution of duties carried out by directors and executive officers

Information related to the execution of duties carried out by directors and executive officers shall be prepared, stored, and managed appropriately in accordance with laws and regulations and internal guidelines including the group’s "Document Handling Regulations.”

3. Regulations and other systems for managing the risk of loss on a groupwide basis

(1)To ensure proper risk management for the entire group, the Risk Management Committee shall meet regularly and hold additional meetings as necessary in accordance with our "Risk Management Regulations" to identify and minimize risks and discuss how to manage them.

(2)Important details discussed during meetings of the Risk Management Committee shall be reported to the Board of Directors when necessary.

(3)After identifying potential new risks through business execution reports delivered during meetings of the Management Committee, when necessary, the company's representative director shall notify the relevant departments of these potential risks and establish systems enabling the prompt execution of crisis management countermeasures.

4. Systems for ensuring the efficient execution of duties carried out by the group's directors and executive officers

(1)In accordance with our Articles of Incorporation and "Board of Directors Regulations," the Board of Directors shall meet once per month in principle to rule on important management issues and establish systems for the supervising of the execution of duties carried out by directors and executive officers.

(2)Consisting primarily of directors, executive officers, and department managers, the Management Committee meets twice per month in principle to report, review, and make decisions regarding important issues related to the execution of business operations.

5. System for ensuring the propriety of the group's business operations

(1)While respecting the autonomous and independent management of our subsidiaries, we will facilitate proper and efficient management of our entire group by standardizing groupwide control environments through operational alliances and internal collaboration.

(2)The group shall establish a basic financial reporting policy and develop necessary systems for ensuring the integrity and reliability of the group's overall financial reporting.

(3)We will establish a system that enables the directors and other corporate officers of subsidiaries to perform their duties efficiently and report to the parent company without delay regarding matters related to the execution of their duties.

6. Matters concerning personnel assigned to assist corporate auditors performing their auditing duties and the independence of these personnel

(1)If a corporate auditor requests personnel for assistance in the performance of his or her duties (below, "assistant personnel"), the group shall appoint such personnel upon approval from the corporate auditor.

(2)Assistant personnel who receive instructions from corporate auditors shall not be obligated to comply with orders or commands from directors that could potentially influence their ability to execute these instructions.

(3)Decisions regarding performance evaluations of, or disciplinary actions taken against assistant personnel shall only be made with the approval of the corporate auditors to which these personnel are assigned.

7. Systems that allow directors, executive officers, and employees to report to corporate auditors and ensure that audits performed by corporate auditors are carried out effectively

(1)To verify important decision-making procedures and confirm the proper execution of duties, corporate auditors may attend meetings of a variety of critical bodies, including the Board of Directors and the Management Committee.

(2)The Audit Office shall promptly report the results of internal audits to the appropriate corporate auditors.

(3)Departments responsible for receiving internal whistleblower reports shall inform corporate auditors regarding circumstances related to internal reporting and the group's internal reporting system.

(4)Upon discovery of circumstances that could potentially cause significant damage to the group, the discovering director shall immediately report these circumstances to the appropriate corporate auditor(s).

(5)Executive officers or standard employees who discover circumstances that could potentially cause significant damage to the group have the option of reporting these circumstances directly to the appropriate corporate auditor(s) without filing internal whistleblower reports.

(6)When reporting to corporate auditors, directors, executive officers, and standard employees shall deliver these reports to the appropriate full-time corporate auditor(s), who shall in turn forward these reports to other appropriate corporate auditors.

(7)When necessary, corporate auditors shall require directors, executive officers, and standard employees to submit reports regarding business operations and the progress of efforts aimed at improving upon issues previously identified through audits.

(8)No individual who submits a report to corporate auditors shall be subjected to any disadvantageous treatment on the grounds of their reporting.

8. Basic policy toward the elimination of organized crime and progress of this policy's implementation

(1)The group has established a "Manual for Countering and Investigating Organized Crime and Antisocial Forces," maintains no relationships with antisocial forces or organized crime groups that threaten the order or safety of civil society, firmly rejects any and all demands from these forces or groups, and does not conduct any transactions involving companies, organizations, or individuals associated with these forces or groups.

(2)To counter organized crime, the group shall work closely with legal advisors and local police departments to establish environments that enable swift response and identify trends associated with antisocial forces.

(3)The group shall continuously contribute to the elimination of organized crime through measures such as the inclusion of relevant clauses in its standard contract templates and internal training programs regarding protection from unlawful demands stemming from antisocial forces.