Corrective Process Against Negative Impacts ｜ Compliance

Policy（our fundamental view）
　The NOF Group has developed an internal control system for ensuring adherence to laws and regulations, the Articles of Incorporation, and various internal rules of the Company and appropriateness of business operations. Regarding observance of social norms and laws and regulations, the Company has formulated its NOF Basic CSR Policy as well as its code of conduct known as the NOF Code of Ethical Conduct based on the Policy. The Compliance Committee is established to ensure thorough adherence to the Policy and Code. The planning of various compliance-related measures and the status of their operation are reported as appropriate to the Board of Directors for management and supervision.


Basic CSR Policy
　We will fulfill our corporate social responsibility and conduct sustainable business activities.

1. We will, each and all, act in accordance with the highest standards of corporate ethics.
2. We will respect human rights, and enable a diversity of personnel to demonstrate their
　abilities.
3. We will promote responsible care activities, based on the five kinds of safety.
4. We will consider the interests of all our stakeholders.
5. We will contribute to society in cooperation with local communities.

Overview
　The NOF Group instituted the Code of Ethical Conduct in April 2002 to ensure that each member-company and each employee always conforms to social ethics and wins society’s trust. In this con-nection, the Group set up the Ethics Committee (changed the name to Compliance Committee in April 2020) in an effort to strengthen its respon-sibility to society and ensure the transparency of its business activities. In addition, consultation desks for whistle-blowing and consultations from employees have been set up in the Compliance Committee Secretariat, the Audit and Supervisory Committee’s Office, and external third-party institutions.


《Code of Ethical Conduct》
　In order that we can maintain NOF CORPORATION’s position as a good corporate citizen, earn and keep the trust of the community and continue to develop as a company, each and every one of us-employees and executives alike shall abide by this code faithfully.

1. Compliance
　We shall act in an ethical manner becoming of members of a company and society, and we shall obey the law and other regulations, and respect others’ human rights.

2. Community
　We shall give priority in all processes of our business activities to human safety and health, as well as protection of the natural environment, and we shall work proactively to maintain a harmonious existence in all our local communities worldwide.

3. Respect for Individuals
　We shall not engage in any act that goes beyond the Company’s justifiable interests or that damages the Company’s credit or honor, and we shall respect the personality and individuality of all people.

4. Business Partners, Government Officers
　We shall always treat our trading partners and business partners fairly and equally and in good faith, and we shall not provide any civil servant with any benefits or favors.

5. Shareholders, Investors
　We are an open company, and we shall disclose the details of our management and business status and other corporate information in a timely fashion as required by relevant laws.

6. Company Assets and Information
　We shall not use the Company’s assets for any purpose other than the Company’s official business objectives. We shall record and report accurately our business performance, protect intellectual property rights and hold confidential information and other companies’ business secrets in strict confidence.

7. Fair Trade
　We shall comply with antimonopoly laws and international trade laws, and we shall observe the Financial Instruments and Exchange Law and not engage in insider trading.

8. Prohibition of Antisocial Behavior
　We shall eliminate the influence of antisocial groups, and shall not provide undue benefits to specific shareholders.

Organizational setup
　Regular meetings of the Compliance Committee are held twice every year. The Committee also meets as required when　a compliance issues arises, identifies issues, and analyzes countermeasures. The results are reported to the Board of Directors and deliberated as necessary.

Compliance Manual
　In order to instill a sense of compliance in its executives and employees, the NOF Group has prepared a Compliance Manual, which explains the Code of Ethical Conduct in detail and in easily understood terms. The universal Global Compliance Manual has been published in eleven different languages.

Country-specific compliance manuals
　The NOF Group is preparing country-specific compliance manuals based on the legal systems of each country. Following the publication of versions for the U.S.A., China, Indonesia, France, Germany, Belgium, Italy, South Korea, and Brazil where the Group has a large number of employees, the manuals are being utilized in Group companies.

Compliance-related training
　The NOF Group regularly holds compliance-related training sessions for employees. In fiscal 2023, we continued compliance training for new employees and mid-career hires, as well as ensuring awareness of precautions related to the Act against Delay in Payment of Subcontract Proceeds, Etc. for Subcontractors. In addition, we implemented training on the subcontract act for materials-related personnel of affiliates.


Obtaining information on the enactment and revision of laws and regulations
　We have obtained information on the enactment and revision of laws and regulations by utilizing various sources on a continual basis while taking appropriate actions. In order to reduce risk of overlooking information on the enactment and revision of laws and regulations, the whole Group has introduced a system that enables us to automatically receive information on the enactment and revision of laws and regulations by email.


Raising awareness by internal magazine
　NOF uses its quarterly internal magazine to help raise employees’ awareness of compliance. NOF continues activities to raise awareness through relatable articles using cartoon characters.

Basic Anti-Bribery Policy
　In today’s society, preventing corruption related to business activities is recognized as one of the major issues for companies. NOF set forth the NOF Group’s basic Anti-Bribery Policy and announced it in the name of the President. We have also promoted its adoption at the Group companies in each country. We will ensure adherence to anti-bribery and corruption regulations in each country and region that have become increasingly strict in recent years.
　As a result of these activities, there have been no cases of bribery offenses in the past five years.

• NOF Group Anti-Bribery Policy

Prevention of unfair competition
　NOF prohibits acts of unfair competition such as improper acquisition of trade secrets, actions that could lead to factual errors, and infringement of intellectual property rights, and ensures compliance with the Unfair Competition Prevention Act by providing detailed information in the Compliance Manual and making it thoroughly known.
　As a result of these activities, there have been no cases of violations of the Unfair Competition Prevention Act during the past five years.


Political contributions

Whistle-blowing system
　Consultation desks in Japanese, English, Chinese (Simplified Chinese), Korean, Indonesian, and Portuguese have been set up at external third-par-ty institutions as contact points for whistle-blowing / consultation in overseas countries where NOF’s business bases are located. Employees can contact the desks if they become aware of a violation or potential violation of compliance rules.
　Persons who report or consult on a violation or potential violation of compliance rules will not be treated disadvantageously because of the report or consultation, and the report or consultation will be handled with confidentiality. This system and contact points are communicated to executives and employees of the Group companies worldwide on a regular basis.
　In fiscal 2023, there were 15 whistleblower cases, a decrease from the previous fiscal year, but the share of harassment cases remained high as in the past. In addition, we carefully investigated the facts of any report promptly and without searching for the whistleblower, and took necessary corrective actions and measures to prevent recurrence.
　Any matters deemed to be compliance violations will be handled in accordance with the Compliance Committee regulations. The Compliance Committee will instruct the relevant departments to investigate the facts, issue requests, and if necessary, provide corrective recommendations and implement measures to prevent recurrence.
　As a result of these activities, there have been no cases of violations of laws and regulations in the past five years.
　We will continue to create a better environment by understanding the purpose of the whistle-blowing system and by appropriately operating the system to respond to misconduct, corruption, human rights violations, harassment, etc. in a timely manner before they become serious incidents.

　Number of whistle-blowing cases （NOF Group）FY2023　：　15 cases
　　　Breakdown　Harassment（7）
　　　Morals and misconduct（4）
　　　Workplace operations（1）
　　　Other（3）　

Addressing sexual harassment / power harassment problems
　The NOF Group has declared its position to prevent and prohibit sexual harassment and power harassment in its Guidebook on the Code of Ethical Conduct, the Compliance Manual, and other internal notifications, and is taking steps to make the code and other relevant norms extensively known and understood. For consultation desks regarding sexual harassment and power harassment, one each of male and female consultants is appointed to make the workplaces transparent and pleasant.

Taxes

The NOF Group’s Tax Policy
　The NOF Group shall fulfill its social responsibilities with high ethical standards by adhering to this Tax Policy in accordance with the NOF Group Compliance Manual, which serves as the foundation for the implementation of our Corporate Philosophy.
　We shall work to appropriately pay taxes while ensuring tax compliance and transparency, thereby earning the trust of all stakeholders.

1. Tax compliance
　The NOF Group shall ensure compliance with the tax laws and related regulations of each country and region. We shall also conduct business activities in compliance with standards issued by international organizations such as the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations issued by the OECD (hereinafter, “OECD Guidelines”).

2.Tax governance
　The NOF Group shall strive to manage and reduce tax risks by ensuring that a group tax management system is in place to ensure appropriate tax operations, with the Executive Financial Oficer. The NOF Group shall work to optimize tax costs by making appropriate use of tax incentives while complying with the tax laws and related regulations of each country and region.

3. International taxes
　The NOF Group shall conduct its business activities in compliance with the tax laws and related regulations of each country and region, tax treaties, and standards issued by international organizations such as the OECD Guidelines. We will not engage in international tax avoidance through the use of tax havens that do not have a business purpose or do not exist. For international transactions among Group companies, we will comply with transfer pricing taxation and the OECD Guidelines, and strive to appropriately distribute income to each country by setting prices in accordance with arm’s length pricing.

4. System
　The NOF Group shall work to establish a system that enables the spread and establishment of tax knowledge among management and employees in order to ensure appropriate tax operations. In the Finance Department, the Group will train and hire human resources with tax experience, plan training and other programs to ensure that staff obtain and maintain an appropriate level of specialized knowledge, and aim to ensure appropriate tax compliance. In cases where tax interpretations are unclear, we will obtain advice from outside experts as necessary. Internal training will be provided to employees and others outside the Finance Department to ensure that tax knowledge spreads widely.

5. Taxes
　The NOF Group shall work to build sound, good trusting relationships with tax authorities in the countries and regions in which it conducts business activities. We will respond to and cooperate with investigations and inquiries by tax authorities in good faith, with timely and appropriate disclosure of information

Risks and opportunities for compliance

Customer privacy

　NOF recognizes that compliance is the foundation of the company. We believe it is important to prevent any violation of laws, regulations, or the Code of Ethical Conduct from becoming serious or prolonged by preventing them or quickly taking corrective actions. We have set up our Compliance Hotline on our website for our business partners and other external parties.
　To date, we have not received any reports through the Compliance Hotline.

・Total number of substantiated complaints concerning breaches of customer privacy ：　0
　（NOF Group）
・Total number of customer data breaches, thefts and losses（NOF Group）　　　　　：　0