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 toraise awareness toward compliance.

Corporate Code of Conduct，C ompliance Action Polic

Hodogaya Chemical has formulated the Corporate Code of Conduct，the Compliance Action Policy，and other compliance-related policies and rules. AII officers and employees of the Hodogaya Chemical Group abide by these rules and act in accordance with laws and regulations，the company’s Articles of Incorporation，a nd the social norms. The Corporate Code of Conduct sets forth the guiding principle that the companies，of ficers and employees must follow in all corporate activities undertaken by the Hodogaya Chemica! Group. The Compliance Action Po!icy clarifies in a more comprehensible manner the Corporate Code of Conduct which sets forth the matters that must be observed in executing operation，b ased on the understanding thatit is essential for the sound development of the Hodogaya Chemical Group for all of its officers and employees to have complete understanding of the social responsibilities of the Group，to ensure full compliance of relevant laws and regulations and internal rules in all aspects of corporate activities，a nd to behave in accordance with the social norms.

Tax compliance

The Hodogaya Chemical Group will respond to the social demands and expectations by duly fulfilling its tax obligation in each country and region, as stipulated in the Corporate Action Guidelines and the Compliance Action Policy.
To do so, we work to maintain and improve tax compliance through actions such as formulating structures to accommodate various taxation systems, cooperating in submitting tax information to the tax authorities in a timely and appropriate manner, and not engaging in intentional tax avoidance through income transfer to other countries or the use of tax haven.

Internal reporting system

The Hodogaya Chemical Group has established the Internal Reporting Rules in accordance with the spirit of the Whistleblower Protection Act. Based on the said rules, the Group has set up an internal reporting system in order to ensure early detection and prevention of violations of laws and regulations, and business ethics. Reports are received by the Internal Control Department and outside legal consultants. The system ensures that, in conducting investigations based on reports, the privacy of the reporters and the secrecy of the content of their report are protected to the maximum extent possible. Utmost care is given to the protection of reporters with honest intentions do not receive any disadvantageous treatment such as dismissal, displacement, or discrimination as a result of their reporting.

Compliance education

In terms of cultivating and improving compliance awareness, the Hodogaya Chemical Group continuously offers all Group officers compliance training (four times yearly), executive training (once a year), Group company executive training (once a year), and individual education through e-learning as a means to thoroughly ensure compliance.
In addition, officers and management 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 management personnel currently stands at 99.2% (as of March 31, 2023).

Compliance Training Calendar (FY2022)

* Compliance basics and J-SOX training include information on the prevention of insider trading and whistleblowing.

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.