Basic Policy Concerning the Development of Internal Control Systems

In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, Oki Electric Industry Co., Ltd. has established the following Basic Policy concerning the development of internal control systems, to contribute to the development of society through the sound and sustainable enhancement of corporate value and by fulfilling its corporate social responsibility.
Based on this Basic Policy, the Board of Directors shall develop and operate an effective internal control system, and shall strive for the advancement and continuous improvement of governance and business operations.

The Board of Directors shall clarify matters to be resolved by the Board of Directors, including matters stipulated by laws, regulations and the Articles of Incorporation, and basic management policies. The Board of Directors shall also delegate the execution of business operations to executive officers, led by the CEO, with a view to improving the efficiency and transparency of duties. Furthermore, the Board of Directors shall receive periodic reports on the development and operation of the internal control system as well as on the status of business execution, and shall provide supervision and instructions for necessary improvements.

[Initiatives on the Part of the Executive Side]

1. Development, operation, and improvement of systems for ensuring prompt and effective business 
   execution and control, including the clarification of division of duties, delegation of authority, 
   and decision-making processes.
2. Promotion of standardization of business operations and utilization of IT.

The Board of Directors shall take the lead in upholding the OKI Group Charter of Corporate Conduct and the OKI Group Code of Conduct, and shall set forth the following initiatives on the part of the executive side to ensure compliance with laws, regulations, the Articles of Incorporation, and internal rules, to establish corporate ethics, to exclude antisocial forces, and to ensure the accuracy and reliability of financial reporting.
The Board of Directors shall receive periodic reports on the status of implementation by executive 
officers, led by the CEO, and shall provide supervision.

[Initiatives on the Part of the Executive Side]

1. Development, operation, and improvement of systems for promoting compliance.
2. Planning, formulation, and promotion of compliance education and related activities.
3. Development, operation, and improvement of the internal reporting system.
4. Development, operation, and improvement of internal control systems aimed at ensuring the reliability of financial reporting, and the preparation and disclosure of accurate and appropriate financial information.
5. Severing of all relations with antisocial forces.
6. Establishment of a system of internal audits conducted by an independent Internal Auditing Division under the direct control of the CEO, and a system of coordination with Audit & Supervisory Board Members.

The Board of Directors shall set forth the following initiatives on the part of the executive side for the storage and management of important documents and information.
The Board of Directors shall receive periodic reports on the operational status by executive officers, led by the CEO, and shall provide supervision.

[Initiatives on the Part of the Executive Side]

1. Classification, storage, and disposal of important documents and information in accordance with internal rules, and clarification of retention periods and persons responsible for their management.
2. Thorough implementation of information security measures, including access controls and measures to prevent unauthorized alteration, in order to ensure the confidentiality, integrity, and availability of information.
3. Introduction of systems as necessary, and implementation of internal education and periodic inspections.

The Board of Directors shall set forth the following initiatives on the part of the executive side to accurately identify risks associated with business activities and prevent their materialization.
The Board of Directors shall receive periodic reports on the risk management status by executive officers, led by the CEO, and shall provide supervision.

[Initiatives on the Part of the Executive Side]

1. Development, operation, and improvement of risk management systems relating to business activities.
2. Development of response systems for when risks materialize.

The Board of Directors shall set forth the following initiatives on the part of the executive side for the corporate governance of the Group as a whole.
The Board of Directors shall receive periodic reports on the operational status of the management and supervisory system for group companies by executive officers, led by the CEO, and shall provide supervision.

[Initiatives on the Part of the Executive Side]

1. Development, operation, and improvement of systems for the management, guidance, and support of subsidiaries.
2. Sharing of information within the Group, standardization of rules and regulations, and development, operation, and improvement of the Group audit system.

The Board of Directors shall request the CEO to develop systems to ensure the effectiveness of audits by Audit & Supervisory Board Members and provide the necessary resources for that purpose, and shall supervise the status thereof.

[Initiatives on the Part of the Executive Side]

1. Appropriate appointment of staff to assist Audit & Supervisory Board Members in their duties, and maintenance of their independence.
2. Provision of information and materials to Audit & Supervisory Board Members, and ensuring opportunities for investigation and exchange of opinions.
3. Cooperation with the use of outside experts and other related matters.
4. Continuous improvement of systems to enhance the effectiveness of audits by Audit & Supervisory Board Members.
5. Early and appropriate reporting to Audit & Supervisory Board Members of any facts that may cause significant damage to the Company, in accordance with laws and regulations.