Approach to and Promotion System for Compliance

To NICHINO Group, compliance includes not only complying with laws and regulations, internal regulations and contracts, but also prohibiting unethical behavior
that is not socially acceptable under high ethical standards. We have established the Compliance Committee as a concrete promotion system for realizing this philosophy.
The Compliance Committee consists of Executive Officers who supervise each department, and the administrative office is operated by the Legal Group of the General Affairs & Legal Department. Furthermore, we have appointed Compliance Promotion Supervisors and Compliance Promotion Managers in each department and office. Compliance Promotion Supervisors formulate policies and provide guidance to ensure thorough compliance in their departments, and Compliance Promotion Managers provide practical support to further promote and ensure compliance.

Compliance Initiatives and the whistleblower System

Nihon Nohyaku fulfills its corporate social responsibility by ensuring that the business activities of all officers and employees comply with laws and regulations, as well as internal rules and norms, and by preventing corporate scandals. To achieve the above, we hold regular Compliance Committee meetings twice a year to summarize compliance activities and decide on policies for the next half of the year. Based on these decisions, we hold workplace training (twice a year) and a group compliance council with domestic and overseas Group companies (once a year). At the workplace training held twice a year, we aim to improve compliance awareness through the sharing of compliance-related incidents and training materials that reflect the latest circumstances.
To ensure prompt and appropriate response to compliance violations, in addition to an organizationbased reporting system, we have also established an “internal reporting system” in compliance with the Whistleblower Protection Act and related laws and regulations. This system allows all officers and employees to report directly to officers in charge of compliance and to external law firms.

Initiatives toward Anti-Corruption

One of the Basic Principles of the Group states that “we respond to the expectations of all stakeholders through fair and vigorous corporate activities.” We actively fulfill our corporate social responsibility through sound business activities in compliance with relevant domestic and international laws and regulations. In addition, we request that all officers and employees of the Group comply with the “Prohibition on Bribery,” “Understanding and Compliance with the Bribery Laws and Regulations and Policy for Prevention of Bribery,” “Appropriate Approval Procedures and Ex-post Facto Confirmation Procedures,” “Building of Sound Business Relationship,” “Regular Risk Assessment, Review and Improvement,” “Thorough Records Management” and “Prompt Report.”
In FY2024, there were no bribery-related violations or cases involving sanctions.

• NICHINO Group Basic Anti-Bribery Policy

Financial and Tax Compliance

The Group complies with the tax-related laws and regulations of the countries and regions in which it conducts business activities, and collects the information necessary to do so. The Group also carries out appropriate accounting procedures and pays necessary taxes.

Basic Approach to Excluding Antisocial Forces

The Group maintains a firm policy of having no relationship whatsoever with antisocial forces, including organized crime groups, corporate racketeers, and malicious media organizations, which pose a threat to the order and safety of civil society. The Group also firmly refuses any and all demands from such forces, including the provision of money or goods, as well as requests for donations, sponsorships, or subscriptions to publications.

Progress of Measures for Excluding Antisocial Forces

Nihon Nohyaku is enhancing its organizational framework, both internally and externally, to systematically and effectively exclude antisocial forces. Internally, we promote unified company-wide consensus, centralize points of contact, ensure responses involve multiple personnel, and establish thorough information sharing among business sites. When facing unreasonable demands, multiple personnel respond together and report to the General Affairs & Legal Department to seek further instructions. Externally, we cooperate with industry associations and regional companies to strengthen exclusion efforts through information exchange. We maintain ongoing coordination with the police and other governmental agencies to build a system for prompt consultation and support against intimidation or unjust demands. Furthermore, based on the NICHINO Group Action Charter and the Tokyo Metropolitan Government Ordinance on Elimination of Organized Crime Groups, we insert anti-organized crime special clauses as a rule into all new contracts and additionally apply them to existing contracts to ensure exclusion from a contractual perspective. These initiatives enable us to promote the continuous and effective exclusion of antisocial forces.

Global Expansion and Management

To ensure compliance at overseas Group companies, Nihon Nohyaku has established the Group Compliance Council to conduct lively discussions and provide useful advice to each Group company. Through these activities, besides ensuring compliance with local laws and regulations, we also provide support that enables overseas Group companies to fully respond to local social issues based on corporate ethics.

Such support includes verifying whether overseas Group companies and their suppliers/contractors are having a negative impact on the local environment and society (for example: monitoring and guidance to ensure that our products are not used in inappropriate ways by customers, and confirming with Group companies to ensure that inappropriate gifts, etc. have not been given to public officials or other private companies), and considering appropriate measures that go beyond laws and regulations.