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An internal investigation has revealed that improper invoicing has occurred in advertising production transactions with several clients that deviates from transaction rules agreed individually with those clients.

We take this matter very seriously and have initiated an additional investigation by an investigative committee comprised of external experts to undertake a more transparent investigation and as a measure to determine the cause(s) and prevent any future recurrence.

With this investigation, we will thoroughly scrutinize any improper invoicing in our advertising production work-related transactions and report the presence or absence of the same to our clients. In addition, we commit to ensuring company-wide compliance awareness and advancing requisite preventative measures by uncovering the cause(s) and establishing measures to prevent any recurrence, in accordance with the investigation’s findings.

We deeply apologize for any concern and embarrassment this may cause to our clients and other concerned parties.

□ Committee Composition

Chairperson: Mr. Hideki Matsui (Partner, Mori Hamada & Matsumoto)
Member: Mr. Shinichiro Yokota (Partner, Mori Hamada & Matsumoto)
Member: Ms. Yumi Kanamaru (Counsel, Certified Public Accountant, Mori Hamada & Matsumoto)

□ Date established: October 20, 2023

□ Content of investigation and reporting

• Investigation into improper invoicing, etc., in Hakuhodo’s advertising production transactions
• Cause analysis and identification of problems in accordance with investigation findings
• Proposals for preventing a future recurrence

At this stage, we do not foresee any significant material impact on Hakuhodo’s performance, but if the potential for new significant material impact becomes apparent in the future, we will announce it immediately.