Basic policy relating to the Internal Control System

JACCS shall set forth a fundamental policy to be adhered to in developing internal control systems in accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act.

The Company shall set forth a fundamental policy to be adhered to in developing internal control systems in accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, among other things. Further, it shall assess the status of the development of internal control systems under such policy on a continuing basis and endeavor to make necessary improvements, to carry out the development and operation of even more effective and appropriate internal control systems.

• 1.
  We have set forth the "Corporate Ethical Code and Code of Conduct" from the perspective of getting corporate ethics fully embraced, and our Directors shall take the lead in adhering to these codes to ensure compliance with laws and regulations as well as the Articles of Incorporation, etc.
• 2.
  We shall be fully cognizant of the social responsibility of a business enterprise, reject unjust demands while taking a firm stance against anti-social forces, and shut out any dealings with and relationships that can be suspected of providing funds to such organizations.
• 3.
  We shall oversee the performance of the duties of Directors through the Board of Directors.
• 4.
  In order to establish and promote internal control and compliance systems, we have the Internal Control Committee and Compliance Committee chaired by the President in place, and shall convene those committees periodically. Further, we shall assess the activities of the respective committees and confirm important matters at the Corporate Governance Committee, and report the findings to the Board of Directors.

• 1.
  Information about the performance of the duties of Directors shall be stored and managed in an appropriate and easy-to-search manner, and retained for a designated period of time depending on the type of information, in accordance with the "Regulations on Document Retention."
• 2.
  We have acquired ISO/IEC 27001 for the administrative operation of the development, maintenance and operation of the JANET host system, and shall manage information assets in accordance with the standards required by it.
• 3.
  We shall maintain a system which allows the necessary persons to access such documents and information as needed.

• 1.
  We shall consider risk management as the most important management issue, review and assess risks related to strategic management decisions and those related to the proper execution of operations comprehensively, as well as taking necessary measures flexibly, to respond to changes to the management environment, etc.
• 2.
  Risks related to strategic management decisions shall be considered at committees, etc. whose membership includes Directors.
• 3.
  Risks related to the proper execution of operations shall be managed in accordance with the "Risk Management Regulations," and the most important risks identified by the Operational Risk Management Committee shall be reported to the Risk Management Committee.
• 4.
  In the event that a material event arises for the purpose of business activities, we shall convene the Emergency Response Committee in accordance with the "Regulations for the Operation of the Emergency Response Committee" and establish a system to minimize losses and damages by taking prompt actions.

• 1.
  Based on medium-term business plans and annual business plans formulated to improve corporate value, we shall work to accomplish the goals and manage the progress.
• 2.
  We have introduced an executive officer system with the maximum number of Directors being 13. The Board of Directors which is made up of the respective Directors shall make important management decisions swiftly, while monitoring the performance of duties. With regards to the performance of duties, we shall have a system in place by which executive officers (including those who concurrently serve as Director) share the roles pursuant to the resolution of the Board of Directors and carry out their duties efficiently.
• 3.
  We shall make the scope of the Director's responsibility for operational execution clear and appoint officers in charge to run operations organizationally and organically, in order to enhance the system to manage the performance of duties.
• 4.
  We shall have the roles, responsibilities, and duties, etc. stipulated in the "Regulations for Headquarters Organizations, Reporting Lines, and Segregation of Duties."
• 5.
  We shall periodically convene the Corporate Governance Committee whose membership includes the President and outside Directors, as a body directly reporting to the Board of Directors.
• 6.
  We shall periodically convene the Management Committee whose membership includes executive officers supervising the business units, to report and review important matters for operational execution.
• 7.
  We shall periodically convene meetings between general managers who are supervising the sales bases by area (general managers supervising the areas) and officers, etc., to report the execution status and review issues for a respective area.

• 1.
  We ensure that all officers and employees of the Company and its subsidiaries are fully aware of "J Navi," a booklet that contains the "Corporate Ethical Code and Code of Conduct" and others, to make the Company's basic stance clear, and strive to get its contents thoroughly understood.
• 2.
  We shall stipulate the scope of the duties and the authority in the "Regulations for Headquarters Organizations, Reporting Lines, and Segregation of Duties" and the "Regulations Concerning the Duties and Approval Authority," to ensure the systems in which an appropriate check-and-balance function is at work.
• 3.
  We shall have not only the compliance supervising unit engage in the planning, promotion, education, monitoring and others in relation to compliance, but also assign a person who is responsible for the promotion of compliance and the staff in charge of the promotion efforts at each department, to ensure the further effectiveness of compliance. We shall endeavor to comply with various related laws and regulations, including the Installment Sales Act, Money Lending Business Act, and Payment Services Act which are highly relevant to the performance of the duties, through continuing education.
• 4.
  The internal audit unit of the Company, which reports directly to the President, shall carry out audits of the Company and its subsidiaries as a body in which a check-and-balance function is at work in accordance with the "Internal Audit Regulations."

The Company and its subsidiaries, etc. shall not only establish a system in which appropriate internal controls are developed properly and run effectively in accordance with the Financial Instruments and Exchange Act as well as other relevant laws and regulations, but also evaluate on a continuing basis that the system functions appropriately and take necessary remedial actions.

• 1.
  We shall assign an officer in charge to a department that manages our subsidiaries and have a system in which the subsidiaries are managed in accordance with the "Regulations for Managing Affiliated Companies in Japan" and "Regulations for Managing Affiliated Companies Outside Japan." Further, the status of operational execution at the subsidiaries and the performance of duties of their Directors, etc. shall be reported periodically to the Board of Directors of the Company.
• 2.
  The subsidiaries shall be organized as a company with a Board of Directors and have the Company's officers and employees or lawyers assume the office of their Directors, thereby enabling the Company to monitor the appropriateness of the subsidiaries' operations.
• 3.
  The subsidiaries shall be subject to periodic audits by the internal audit unit of the Company, with the audit results to be reported to the President of the Company.
• 4.
  Transactions between the Company and its subsidiaries (including those among its subsidiaries) shall not be on terms significantly favorable or unfavorable compared with the terms for transactions with a third party, and we shall have a system in place to ensure transparency of the transactions, such as confirmation with experts as needed.
• 5.
  While respecting the autonomy of its subsidiaries, the Company shall receive periodic reports on their operational status and be consulted in advance on important matters, and discuss at the meetings of the Boards of Directors of the subsidiaries in order to monitor the performance of the duties of their Directors.
• 6.
  Risk management by the subsidiaries in accordance with regulations, etc. shall also be subject to evaluation, etc. by the Company.
• 7.
  We have established a common whistleblowing system available to the Company and its subsidiaries, and shall ensure that whistleblowers will not suffer from any disadvantageous treatment due to their submission of reports.
• 8.
  We shall have a system to prevent us from being used for money laundering and terrorist financing pursuant to the "Basic Regulations for the Prevention of Money Laundering and Terrorist Financing" and others.
• 9.
  We shall not engage in any form of bribery and comply with laws and regulations, etc. concerning bribery in our home country and relevant countries pursuant to the "Anti-Corruption Rules" and others.
• 10.
  We shall have a system in place through which any violation of laws and regulations as well as internal regulations, etc. or any event suspected of being such shall be reported promptly to the head of the relevant department, and the department in charge at the headquarters and the risk supervising unit of the Company, in the event that such violation or event has occurred or been identified at the Company or its subsidiaries.
• 11.
  As for the subsidiaries outside Japan, compliance with laws and regulations, etc. in the relevant countries takes precedence and they shall have a system in line with the policy to the extent possible.

• 1.
  We have in place the 'Audit & Supervisory Board Members' Secretariat' that assists with the duties of the Audit & Supervisory Board Members and appoint staff who belong to the Audit & Supervisory Board Members' Secretariat.
• 2.
  The number, etc. of the personnel at the Audit & Supervisory Board Members' Secretariat shall be determined in consultation with full-time Audit & Supervisory Board Members.

• 1.
  The employees assigned to the Audit & Supervisory Board Members' Secretariat shall be dedicated staff, and support the audit duties of the Audit & Supervisory Board Members exclusively based on their instructions.
• 2.
  Any appointment or transfer of the employees of the Audit & Supervisory Board Members' Secretariat shall be consented to by a full-time Audit & Supervisory Board Member in advance, thereby ensuring the independence from Directors.

• 1.
  Based on the "Regulations for Ensuring the Effectiveness of Audit by Audit & Supervisory Board Members" formulated in consultation with the Audit & Supervisory Board Members, Directors and employees, etc. of the Company as well as Directors and employees, etc. of its subsidiaries shall provide reporting to the Audit & Supervisory Board Members of the Company.
• 2.
  We shall have a system to allow Audit & Supervisory Board Members to attend the meetings of the Management Committee and other internal meetings and receive reports on important management information as appropriate, as well as circulating important minutes and internal approval documents for their review each time.
• 3.
  Whenever an Audit & Supervisory Board Member of the Company judges it necessary, he/she shall be able to request a report from Directors and employees, etc. of the Company as well as Directors and employees, etc. of its subsidiaries.
• 4.
  We shall ensure that a person who has provided a report to Audit & Supervisory Board Member(s) will not suffer from any disadvantageous treatment due to his/her submission of the report.
• 5.
  The status of reports through the whistleblowing system shall be reported to Audit & Supervisory Board Members promptly.

• 1.
  We shall have a system to allow the Audit & Supervisory Board Members to conduct appropriate and effective audits while maintaining independence from the Representative Director.
• 2.
  The Representative Director shall have meetings with the Audit & Supervisory Board periodically so that the Audit & Supervisory Board Members can exchange their views or information.
• 3.
  The internal audit unit shall have meetings to liaise with the Audit & Supervisory Board Members periodically so that the Audit & Supervisory Board Members can receive reports on the legality and reasonableness of the operations of Directors, etc. and employees.
• 4.
  We shall have a system through which the Audit & Supervisory Board Members can liaise smoothly with the Financial Auditor and auditors of the subsidiaries.

Prepayment or reimbursement of expenses arising from the execution of the duties of the Audit & Supervisory Board Members, or the processing of other expenses arising from such execution or reimbursement shall be done smoothly according to requests, etc. of the Audit & Supervisory Board Members.