Compliance

Basic Concept

Compliance is becoming more demanding, and the voluntary codes driven by stakeholders or regulated by law are broadening the scope of what governance covers. As our Group expands its business globally, we are required to provide training and adopt policies that are in line with applicable Japanese and international laws, including anti-corruption laws, antitrust / competition laws, trade laws and others (Policies). Adoption of such Policies also aims to help our Group to navigate through and respond to any ethical, legal and/or compliance issues in a correct and a proper manner as these issues may otherwise lead to suspension of operation or significantly damage our brand and other assets. We also want to demonstrate to our business partners, customers and the society at large that our Group takes compliance very seriously and we train our staff on compliance awareness, violations and reporting. We strive to create a positive culture in which everyone wants and knows how to do the right thing.
In the Yamato SPIRIT (Values and Action Guidelines) of our corporate philosophy "MISSION, VISION and Yamato SPIRIT," we have set forth fairness as one of our values. We have established the Employee Code of Conduct (Code) and adopted Policies as a guideline for our employees to act with integrity based on the values and ethics required of a corporate citizen as a member of society, respecting social norms as well as complying with laws and regulations, to realize fair and sound management, to achieve harmony with civil society, and to develop the company creatively. The Code and the Policies, adopted and administered by the Board of Directors of the Company (Board) shall also facilitate the correct understanding of applicable laws and regulations as well as social norms relevant to our business operations. Each and every person, regardless of whether they are directors/executive officers or employees of the Company, is subject to the Code and the Policies and no one has authority to make exceptions or grant waivers. Accordingly, all employees are expected to uphold the highest ethical standards of business integrity.
By thorough legal compliance, we show our stance of being honest and maintaining the highest level of ethical standards. Disciplinary action, including termination, is taken against any employee who violates the Code and/or the Policies.

Anti- Bribery and Corruption Policy

Anti-corruption practices are an essential component of our compliance program, given that we operate internationally and in many challenging environments. The Anti-Bribery & Corruption Guidelines outline Group’s commitment to comply with the U.S. Foreign Corrupt Practices Act (FCPA), the United Kingdom Bribery Act and applicable domestic and international anti-corruption standards in all business relationships. It is our policy that our directors, officers, employees, and third parties acting on our behalf are prohibited from offering or paying, directly or indirectly, any bribe to any employee, official, or agent of any government, commercial entity, or individual in connection with the business or activities of the Company. A bribe for purposes of this policy is any money, goods, services, or other thing of value offered or given with the intent to gain any improper advantage for the Company.
Furthermore, it is also our policy to base commercial decisions on commercial criteria. We cultivate constructive relationships with organizations and individuals doing business, or seeking to do business, with the Company. In many cultures, those constructive relationships may include incidental business gifts and entertainment. Directors, officers, employees, and third parties acting on behalf of the Company providing or receiving third party gifts and entertainment in their corporate capacities are expected to exercise good judgment and consider the nature of the gift or entertainment, its purpose, business context, applicable laws and social norms. Gifts and entertainment must not be intended to create an improper advantage for the Company. All expenditures for gifts and entertainment provided by the Company must be accurately recorded in the books and records of the Company.

Antitrust Policy

It is our Group’s policy that directors, officers, and employees are expected to comply with the domestic and international antitrust and competition laws which are applicable to the Group’s business. No director, officer, or employee should assume that the Group’s interest ever requires otherwise.
The Company's Antitrust Guidelines prohibit violations of the competition laws. We take strict action if any violations are committed.

Structure

To ensure thorough compliance, our Group has established the following systems for internal control.
The President and Representative Director of Yamato Kogyo Co., Ltd. is ultimately responsible for our Group's internal controls, and the Representative Directors of each Group company are assigned as the persons responsible for their internal controls, which are implemented following the Basic Policy on Internal Controls.
The Board of Directors decides on basic policies regarding the development and operation of internal controls and is responsible for supervision. In addition, corporate auditors work with the departments involved in the development and operation of internal controls, ascertain the status of the development and operation of internal controls through audits by corporate auditors, and provide advice and recommendations to management as necessary. Department managers are obligated to conduct self-inspections, improve issues, and report on the development and operation of internal controls in their departments.
As for the management system, the General Manager of the Internal Audit Office is responsible for the promotion of internal control in his company as the person in charge of internal control, and the Internal Audit Office serves as the secretariat function for the management of internal control in our Group and promotes internal control for the entire Group. The president of each Group company appoints an internal control leader, an internal control committee member, and an internal control promotion committee member, and the head of each department serves as an internal control committee member and is responsible for promoting internal control initiatives.

System for Financial Reporting

Medium-term Sustainability Plan "Compliance"

Internal Reporting System

The Yamato Kogyo Group has established an internal whistleblower system based on the "Whistleblower Protection Regulations". All Group employees, including temporary and part-time employees engaged in business within the Group, as well as employees of subcontractors and suppliers, are eligible to use the system, which provides internal and external contact points in Japan.
We accept consultations and reports by telephone, e-mail, fax, writing, and visits at two contact points, inside and outside the company. The Whistleblower Protection Office of Yamato Kogyo (established within the Internal Audit Office) or the investigation team investigates the facts. Regardless of whether the content of the report is true or false, the investigation team will report the results of the investigation to the general manager of the Whistleblower Protection Office. The General Manager of the Whistleblower Protection Office shall promptly take corrective and preventive measures, and report the results of the investigation and corrective and preventive measures to the President and Corporate Auditors.
In addition, we protect whistleblowers following the Whistleblower Protection Act to ensure that they are not disadvantaged.

Fostering and Spreading Compliance Awareness

Our Group has formulated the corporate philosophy "MISSION, VISION, Yamato SPIRIT" and established the "Yamato Kogyo Group Employee Code of Conduct" as a guideline for realizing the philosophy and promoting compliance.
Compliance awareness is fostered and disseminated through compliance training at the time of employment and by job level, as well as through the monthly "Compliance Bulletin," sent out to all employees.
The following training programs were conducted in fiscal 2023. We will continue to examine ways to provide effective training on an ongoing basis.

Compliance Training Conducted in FY2023

Training Contents	Period of implementation	Target group
Compliance and Harassment Training	Upon hire (scheduled training)	New employees and career hires
Compliance and Harassment Training	At the time of promotion (scheduled training)	Initial supervisor
Compliance Training	As needed (E-learning)	All employees
Harassment Training	As needed (E-learning)	All employees