Basic Policy on Internal Control Systems and Status of Improvements

We have a small, simple organization and a highly concise structure for our business execution framework. Our internal control is focused on this primary business execution framework being operated thoroughly.

1．Framework to ensure that the execution of duties by directors and employees complies with laws and regulations and the Articles of Incorporation

• (1)

  We will strive to comply with laws, the Articles of Incorporation, and social norms through our Mission, Vision, and various regulations, and the actions of the President to convey their spirit to our directors and employees.

• (2)

  The Board of Directors will establish various compliance regulations and will also establish a Risk Management Committee (chaired by the President). The Committee will be a company-wide cross-departmental organization, ensuring that all directors and employees are committed to compliance. The Committee will also develop a risk management framework. In addition, the Board will receive quarterly reports on compliance risks and will strive to promptly address any issues that have arisen.

• (3)

  The President will establish a Risk Management Committee. The Committee will act as a company-wide cross-departmental organization to address compliance. It will also work to develop a risk management framework and identify problems.

• (4)

  Auditors will audit directors’ execution of duties by attending board meetings and examining the status of business execution.

• (5)

  The department in charge of internal audits shall, in principle, audit all divisions and subsidiaries. These annual audits will investigate the effectiveness of internal controls and the status of compliance with various compliance requirements, including anti-corruption, in each division. The Representative Director and President will approve the plan for these internal audits. Audit results are to be reported to the President and the company’s Auditors.

• (6)

  We will thoroughly comply with laws, regulations, and corporate ethics as part of our anti-corruption efforts. To enhance this framework’s effectiveness, we have established compliance regulations to strictly follow when occasions arise involving entertainment and gifts related to business partners, public officials, etc.

• (7)

  Compliance education and training is provided to all new employees upon joining the company and to all other employees, including temporary staff. This training aims to foster thorough awareness of compliance amongst employees and ensure that they have the knowledge necessary to practice it. This training is to be conducted at least once a year.

2. Framework for storing and managing information related to directors’ execution of duties

Information related to directors’ execution of duties shall be appropriately recorded and stored under the Document Handling Regulations and made accessible to all parties that require it.

3. Regulations and other frameworks for managing risk of loss

• (1)

  In principle, the department in charge of each type of risk shall formulate regulations, prepare manuals, conduct training, etc., to manage risk. The Risk Management Committee shall be responsible for cross-departmental risk management and company-wide responses.

• (2)

  We will thoroughly manage confidential information and appropriately protect personal information under our information security management regulations and personal information handling regulations.

4. Framework for ensuring the efficient execution of duties by directors

• (1)

  The Board of Directors shall formulate medium-term management and annual management plans.

• (2)

  To achieve these plans, Directors shall establish specific plans and efficient methods of accomplishing them in the divisions under their control.

• (3)

  Directors shall report the progress of the preceding items at Board meetings, management meetings, and other relevant meetings.

5. Framework to ensure the appropriateness of operations of the corporate group, which consists of MedPeer, Inc., and its subsidiaries

Although we do not currently have any subsidiaries, if any are established or acquired in the future, we will establish a framework ensuring thorough internal controls throughout the corporate group.

6. Matters concerning employees who auditors request to assist them in their duties, and matters concerning the independence of these employees from directors

• (1)

  If auditors request that employees be appointed to assist them in their duties, this shall be arranged upon consultation with the auditors.

• (2)

  Employees who receive orders for audit-related work from auditors, as related to the preceding item, may not be influenced by directors concerning these orders.

7. Framework for reports by directors and employees to auditors and other frameworks related to reports to auditors

• (1)

  Upon request from an auditor, directors or employees must report the status of business execution, internal audits, and other relevant matters.

• (2)

  If a director discovers a matter that may have a material impact on MedPeer, Inc., they must report it to the auditors immediately.

8. Other frameworks to ensure effective audits by auditors

• (1)

  Mutual cooperation will be promoted by setting up regular meetings for the auditors and the President, the head of internal audit, and the accounting auditor to exchange opinions.

• (2)

  MedPeer Inc. shall ensure that a framework is established enabling auditors to understand the decision-making process and the status of business execution by attending important meetings, such as management meetings, or by inspecting important documents, such as requests for approval.

Basic policy on eliminating antisocial forces and status of implementation

MedPeer, Inc. has a firm stance against antisocial forces. We do not provide any benefits to these forces and ensure that our company is entirely unconnected with them.
In addition, we collect and manage information in cooperation with external organizations such as the police and lawyers, and our President has taken the initiative in complying with our Policy Against Antisocial Forces. We conduct in-house training as necessary to ensure that all directors and employees of the company understand this policy and can take a firm stance against antisocial forces.