Compliance

Basic approach

Our basic stance as a corporate group and the standards of business conduct expected from the officers and employees of the Nisshin Seifun Group are defined in the Nisshin Seifun Group Corporate Code of Conduct and Employee Action Guidelines (Code & Guidelines). The presidents and directors of Group companies, including Nisshin Seifun Group Inc., are aware of their responsibility to uphold the Code & Guidelines and provide leadership in ensuring that all concerned are familiar with these requirements. We constantly listen to input from within and beyond the Group as part of our efforts to maintain and enhance our internal systems and ensure consistent compliance with business ethics. In the event of a situation that contravenes the Code & Guidelines, the president of the company concerned will issue internal and public statements concerning efforts to resolve the issue, investigate the causes, and prevent recurrences. Accountability will be ensured through the timely disclosure of accurate information, and firm disciplinary actions will be taken (including against the president of the company concerned where necessary), after clarification of the authority and responsibility of those concerned.

Compliance initiatives

Normative Ethics Committee

The Normative Ethics Committee was established under the Corporate Principles of the Nisshin Seifun Group and the Code & Guidelines. Its role is to promote compliance initiatives. It deliberates on group-wide measures to detect unauthorized expenditures, such as illegal payoffs, and ensure compliance with rules and regulations. Reports on these deliberations are submitted to the Group Management Meeting.

Compliance hotline system

If anyone becomes aware of conduct in violation of regulatory requirements or the Corporate Code of Conduct and Employee Action Guidelines within the Nisshin Seifun Group, or the risk of such conduct, it is vital to report the matter to their manager or other appropriate person and seek advice, so that staff, including those in other concerned units, can take organized action to address the problem. There is also a need for ways to ensure that issues are not ignored and can instead be resolved quickly, and to prevent problems before they occur by detecting and addressing issues through separate channels.

Since 2003 we have maintained a whistleblowing channel in the form of the Compliance Hotline. In addition to an internal helpdesk, we have also established an external contact point at a legal firm for those wishing to use the Compliance Hotline. We have taken steps to make the system more accessible for employees, including provision for reporting matters anonymously.

Reports are promptly investigated by teams composed of staff from the relevant departments, according to the type of incident, and appropriate actions are taken. Care is taken to protect whistleblowers and ensure that they are not disadvantaged.

Preventing corruption

Group employees must not provide illegal payments, political donations, or gifts, or provide entertainment to public officials or politicians, etc. The Group exercises moderation in line with social norms in its dealings with business partners, industry groups, and other parties. When considering overseas companies as potential business partners, we carry out preliminary research, encompassing business practices and the risk of bribery, in the countries concerned to ensure that the companies involved have not engaged in corruption.

• Anti-Bribery & Anti-Corruption Policy

Systems for the elimination of antisocial forces

The Code & Guidelines stipulate that the Group will resolutely reject any unreasonable demands from antisocial forces, such as racketeers and organized criminals, who threaten the order and safety of civil society.

We have established a unit and appointed staff in Nisshin Seifun Group Inc. to coordinate countermeasures against unlawful demands and gather information about antisocial forces. We address these issues systematically and work in collaboration with specialized external agencies. We are also raising awareness about our organization-based efforts in this area through ethics and compliance training and other activities. When selecting business partners, we include a provision in contracts requiring partner companies to declare that they will comply with social norms and avoid actions that would classify them as antisocial forces.

Promotion and consolidation of compliance awareness (normative ethics)

The Nisshin Seifun Group provides seniority-based compliance training for new employees, young employees, and newly appointed management personnel on a yearly basis.

New employees are taught about the Corporate Code of Conduct and Employee Action Guidelines. They also learn about Japanese laws relating to business activities, including antitrust and subcontracting laws, as well as internal Group regulations, such as the rules regarding the compliance hotline system. Training for young employees includes both group training sessions and preparatory e-learning programs covering laws and regulations governing business operations, and issues relating to insider trading and compliance. Training for newly appointed management personnel focuses on the importance of compliance. In addition to material about laws and regulations, courses also include recent case studies.

Compliance with corporate ethics and social norms

Group employees must comply with laws, corporate ethics, and social norms and conduct business transactions fairly.

Raising awareness about the Antitrust Law

The Nisshin Seifun Group complies with the Antitrust Law in all areas of business, including production, sales, and procurement. We conduct our business activities in the spirit of fair and free competition. We have compiled a manual on compliance with the Antitrust Law with examples of specific situations that could arise in the course of sales transactions. We also hold seminars and engage in other activities with the aim of raising employee awareness.

Compliance with insider trading regulations

We take particular care over the handling of unpublished material information obtained in the course of business activities. We do not engage in share trading or similar activities on the basis of such information.

Fair transactions

Prohibition of improper payments, entertainment or gifts

Group employees do not provide improper payments, entertainment or gifts. The Nisshin Seifun Group exercises moderation in line with social norms in its dealings with business partners and industry groups and resolutely rejects unreasonable demands from antisocial forces that threaten the order and safety of civil society.

Compliance with the Subcontract Act

To ensure that all transactions are conducted fairly, we are taking steps to ensure full compliance with the Act against Delay in Payment of Subcontract Proceeds, etc. (the Subcontract Act) by disseminating information, including a compliance manual, to employees. From time to time, we also conduct internal surveys of the relevant units within the Group to prevent violations of the Subcontract Act.

Comprehensive management of confidential information and protection of intellectual property rights

We ensure that our employees are fully aware of the importance of confidential information obtained from customers and suppliers in the course of business activities, and that such information is managed carefully and not used or disclosed improperly or through negligence. We also take steps to protect our own intellectual property rights, such as copyrights, trademarks, and patents, while ensuring that we do not infringe or misuse the intellectual property rights of other parties.