Compliance

Basic approach

In addition to fully recognizing and consistently applying compliance’s basic meaning of adhering to laws and regulations, the Hodogaya Chemical Group conducts corporate activities keeping in mind its meaning of ensuring behavior in line with what society demands of the Group.
As a result of earnestly implementing compliance and conducting fair, non‑discriminatory business activities, there have been no personnel who have been fired and the Group has not had to pay fines or other penalties due to behavior that goes against the legitimate interests of the Group or behavior that undermines trust in and the reputation of the Group.
The Group will also meet the social demands and expectations by fulfilling its responsibility to properly pay taxes in countries and regions throughout the world.

Promotion structure

The Hodogaya Chemical Group formulates various rules and regulations based on the Basic Policy on Internal Control, and strives to achieve compliance through organized and cross‑sectional initiatives led by the Internal Control Department.
The Internal Auditors Department audits the status of compliance and provides advice and guidance for improvements as required.
Over and above these activities, we have published the Hodogaya Chemical Group Compliance Handbook, which contains data that is closely aligned to the Group’s operations. This Handbook is distributed to all officers and personnel in a bid to raise awareness toward compliance.

Corporate Code of Conduct，Compliance Action Polic

The Hodogaya Chemical Group has established various policies and rules related to its compliance framework, including the Corporate Code of Conduct and the Compliance Action Policy.
All officers and personnel of the Group are required to comply with these rules and to act in accordance with laws and regulations, the Articles of Incorporation, and social norms.
The Corporate Code of Conduct defines the fundamental principles that all officers and personnel must observe in every aspect of the Group’s corporate activities.
Furthermore, the Compliance Action Policy clarifies the Corporate Code of Conduct in a clearer and more concise manner.
It reflects the recognition that the sound development of the Group requires all officers and personnel to have a strong awareness of the Group’s social responsibilities, to ensure thorough compliance with relevant laws, regulations, and internal rules, and to act in alignment with social norms.

Tax compliance

The Hodogaya Chemical Group responds to social demands and expectations by duly fulfilling its tax obligations in each country and region, in accordance with the Corporate Action Guidelines and the Compliance Action Policy.
To this end, we work to maintain and enhance tax compliance by establishing and maintaining frameworks to accommodate various taxation systems, cooperating in the timely and appropriate submission of tax information to tax authorities, and refraining from arbitrary tax avoidance measures such as shifting income to other countries or using tax havens.

Internal reporting system

The Hodogaya Chemical Group has established an internal reporting system based on the Internal Reporting Rules in order to ensure early detection and prevention of violations of laws, regulations, and business ethics.
Reports are received by the Internal Control Department and outside legal counsel.
In conducting investigations based on reports, the system ensures that the privacy of the reporters and the confidentiality of the content are protected to the maximum extent possible.
Utmost care is given to ensure that reporters with honest intentions do not receive any disadvantageous treatment, such as dismissal, reassignment, or discrimination, as a result of their reporting.
Personnel are informed of the internal reporting system during company training, and the status of the system is reported to the Audit and Supervisory Committee.
In FY2024, one internal report was submitted.

Compliance education

The Hodogaya Chemical Group is committed to ensuring strict compliance. From the perspective of cultivating and improving compliance awareness, we continuously conduct compliance training for all officers and employees (four times annually), training sessions for officers (once annually), training for officers of Group companies (once annually), as well as individual education through e-learning as a means to thoroughly ensure compliance.
The participation rate of all managerial employees in these training programs has consistently reached 100%. In addition, managerial personnel (including personnel one step prior to their appointment to management) of the Group are required to take the Examination of Compliance Proficiency for Practical Business (Primary Level) to gain knowledge and increase understanding of compliance.
The percentage of qualified managerial personnel currently stands at 99.6% (as of March 31, 2025).

Compliance Training Calendar (FY2024)

* For all training, the participation rate was 100%.

Efforts Aimed at Eliminating Antisocial Forces

The Hodogaya Chemical Group has put in place specific guidelines to ensure that it avoids forming any kind of relationship with antisocial forces. The Group’s approach toward antisocial forces is centralized in and managed by the General Affairs Department.
In addition, we have established a structure and systems to address the issue of antisocial forces. This includes closely collaborating and exchanging information with such outside professionals as the police and lawyers and to disseminate relevant information to each Group office and company.