Response to Laws and Regulations Whistle-blowing Systems Compliance Awareness Surveys Strengthening of Anti-Corruption Initiatives Response to Ensure Fairness in Transactions Number of Compliance Violations

Compliance Initiatives

Basic Stance on Compliance

The CTC Group regards compliance as one of its most important management issues, and is strongly aware that thorough, group-wide compliance forms the foundation for running and managing the Group. By ensuring that each and every Group employee observes all laws, regulations and internal regulations required in the execution of corporate activities, and carries out those activities in a highly ethical and responsible manner in accordance with social norms and morals, we aim to ensure that we are held with esteem and trust by society as a consistently fair, highly transparent, sound and healthy corporate group; and seek to increase the corporate value of the entire CTC Group.

Compliance Promotion Structure

In order to promote thorough compliance within the CTC Group, we have established a Code of Conduct and various internal regulations, appointed a Chief Compliance Officer (CCO) and established a Compliance & Information Security Committee that acts as an advisory body to the Management Committee; and are seeking to enhance the functionality of these organizational structures through the appointment of overall Compliance Management Supervisor responsible for each business group and/or operating company, and Compliance Supervisors responsible for each department and/or team.
These Compliance Supervisors check the progress of their organization's compliance initiatives on a once quarterly basis, and report to the Compliance & Information Security Committee. In addition to this, we seek to ensure that compliance awareness is thoroughly instilled in corporate officers and employees, through the holding of continuous educational training sessions and so on.

Whistle-blowing Systems

The CTC Group has established internal information provision systems (helplines) that enable employees to report and consult regarding compliance violations. Reports can be made via two routes, reporting to dedicated internal point of contact, or to an advisory attorney; and we guarantee that employees making such reports will not suffer any detriment or disadvantage when making a report via either route. Group employees, temporary employees and employees of CTC Group's business partners may make use of CTC reporting routes. In this way, we are focusing our energies into reducing and preventing compliance violations.

Compliance Awareness Surveys

Every other year, the CTC Group conducts Compliance Awareness Surveys of all of its corporate officers and employees in order to ascertain the actual state of penetration of compliance awareness. The results of these surveys are analyzed and utilized in formulating, implementing and improving our compliance measures.

Compliance Training and Thorough Circulation of Compliance Information

The CTC Group recognizes educational training as one of the most important action items to be implemented in order to ensure thorough compliance. We seek to ensure that compliance awareness is properly instilled in each and every one of our corporate officers and employees-including contracted/outsourced employees and personnel-by conducting regular training every year, as well as other initiatives to ensure that compliance-related knowledge is made thoroughly known by all.

Response to Laws and Regulations

The CTC Group has established mechanisms for constantly acquiring the latest, most up-to-date information in order to ensure a thorough response to laws, regulations, byelaws and industry guidelines, etc. We have also established our own CTC Group Law & Regulation Guidelines, which organize and summarize the laws and regulations that each group company should observe and adhere to. These guidelines are displayed on the Group intranet to enable employees to check them at any time.
The main departments responsible for laws and regulations spread information via internal morning broadcasts, and conduct regular e-learning and group assembly training sessions with the aim of developing the necessary knowledge required in order to implement proper observance of laws and regulations; and make regular reports to the Compliance & Information Security Committee regarding the status of reforms to laws and regulations, and the current state of compliance within the organization.
We also check the state of practical implementation of such measures within these departments through internal audits, and endeavor to ensure that proper operational management is being conducted to ensure a more appropriate response to laws and regulations.

Strengthening of Anti-Corruption Initiatives

The CTC Group prohibits the provision of illicit or unlawful payouts to public/government officials or other persons in equivalent positions. For this reason, we established our Guidelines Regarding the Entertainment of Public Officials, etc., and are endeavoring to prevent corruption by issuing guidance and guidelines on judgment calls in the execution of actual business, and seeking to ensure that these guidelines are properly instilled in our employees.
Furthermore, in light of recent global developments towards taking a tougher stance on regulation of bribery, we are also seeking to enhance our anti-corruption initiatives.
To date, the CTC Group has never been investigated by authorities in relation to acts of corruption.

Response to Ensure Fairness in Transactions

To thoroughly ensure the fairness of transactions, the CTC Group not only observes applicable laws and regulations, but also promotes sales activities in accordance with sound business practices and socially-accepted conventions. We also endeavor to ensure fair competition by enhancing our monitoring and reviews with respect to laws such as the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (the Anti-Monopoly Act) and the Act Against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (the Subcontracting Act).

Elimination of Anti-Social Forces

The CTC Group has clearly expressed that it takes a firm stand against anti-social forces and organizations that threaten the order and safety of civil society in its Code of Conduct, and is working to make this stance thoroughly known amongst all of its corporate officers and employees.

Number of Compliance Violations

As a result of our efforts to ensure thorough compliance, no serious compliance violations have taken place within the CTC Group over the last three years.

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