Compliance

Goals and Achievements of Major Initiatives

Objectives of initiatives Goals for fiscal year 2018 Achievements in fiscal year 2018 Evaluation Goals for fiscal year 2019
Enhance awareness of compliance. •Achieve target for percentage of employees participating in the e-learning program (95%).
•Implement compliance- and governancerelated legal training in Japan, the Asia- Pacific region and Greater China.
• Compliance e-learning focused on international antitrust legislation and insider trading. The percentage of employees participating exceeded 95%.
• Follow-up presentations regarding the DIC Group Code of Conduct were held in the PRC, Singapore, Thailand, Malaysia and India.
★★ • Achieve target for percentage of employees participating in the e-learning program (95%).
• Provide training on legal issues for DIC executives (once), executives of Group companies in Japan (once) and at DIC Group companies in six countries overseas.
Conduct business fairly. Eliminate violations of antitrust and anticorruption laws. Zero violations of antitrust and anti-corruption laws were reported. ★★ Achieve target of zero violations of antitrust and anti-corruption laws.
  • Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Basic Approach to Compliance

Compliance in the DIC Group encompasses not only obeying laws but also acting in a manner that is in keeping with social norms and the expectations of customers, communities and other stakeholders. With the aim of ensuring sustainable growth for businesses that are both fair and transparent, DIC formulated the DIC Group Code of Business Conduct, a unified set of guidelines the adherence to which it considers to be the foundation of compliance. DIC compels all DIC Group employees to conduct themselves in accordance with the code.

The DIC Group Code of Business Conduct

The DIC Group completed the DIC Group Code of Business Conduct in July 2014. The code not only mandates compliance with national laws and international rules but also presents 10 principles essential to the professional conduct of DIC Group employees. The Group held presentations for all existing Group employees at the time of release, while new employees receive training at point of hire. The goal of such training is to ensure employees worldwide share values cherished by the Group and approach their responsibilities with a sense of responsibility and a commitment to doing the right thing. In fiscal year 2018, the Group held follow-up presentations on the code in the PRC and the Asia-Pacific region.

10 Principles Essential to Professional Conduct

  1. Your Rights as an Employee: Respect, Dignity, Privacy
  2. Environment, Safety and Health
  3. Your Responsibility to Avoid Potential Conflicts of Interest and to Protect Group Property
  4. Anti-Corruption and Anti-Bribery Policy
  5. Your Relationship with Governments and Government Officials
  6. Your Relationship with Customers, Suppliers, and External Third Parties
  7. Money Laundering and Anti-Terrorism
  8. Forced Labor, Child Labor, Conflict Minerals
  9. Insider Trading
  10. Proper Accounting and Internal Controls Relating to Financial Reporting

Initiatives to Promote Compliance

The DIC Group promotes compliance through the following initiatives:

1.Training focused on legal issues to improve compliance awareness is provided for employees at point of hire, when promoted and before overseas transfers. In addition, with the aim of promoting awareness of the DIC Group Code of Business Conduct, in fiscal year 2018 e-learning focused on international antitrust legislation and insider trading was provided. Training on legal issues was also provided once for DIC executives, once for executives of Group companies in Japan and at DIC Group companies in four countries overseas (PRC, Singapore, Thailand and Malaysia).

2.Compliance officers are appointed at all regional headquarters—DIC (Japan), Sun Chemical (the Americas and Europe), DIC (China) (the PRC), and DIC Asia Pacific (Asia and Oceania)—to spearhead global compliance efforts.

The DIC Group vows that it will not violate the principles of the DIC Group Code of Business Conduct, even if such a violation would appear to profit the Group. As a corporate citizen, the Group also pledges to respect social norms and act in a sound and socially acceptable manner. In fiscal year 2018, there were no serious violations of compliance laws.

Establishing and Operating a Whistle-Blowing System

Establishing and Operating a Whistle-Blowing System

The DIC Group has established a compliance whistle-blowing system independent from channels for communication used in the conduct of business. This system encompasses hotlines that can handle reports of compliance issues and questions in the languages of more than 160 countries. The Group has also devised strict rules under this system to protect whistle-blowers from retaliation and works to ensure the system functions in a proper manner.
When a report is received, the Group responds swiftly and appropriately, giving due consideration to pertinent laws while also incorporating internal and external opinions, to identify and correct or where necessary take disciplinary action. Details of reports and steps taken in response are reported to the Board of Directors. The Group will continue to use the whistle-blowing system to ensure the prompt discovery and correction of misconduct.

Antitrust and Anti-Corruption Legislation

The DIC Group has formulated a basic policy to comply with antitrust legislation and made Groupwide efforts to ensure fair business practices. The DIC Group Code of Business Conduct includes rules for complying with antitrust legislation and prohibits involvement in corruption. Since fiscal year 2014, the Group has held more than 160 presentations regarding antitrust and anti-corruption legislation for relevant employees to ensure strict compliance with the laws of the countries in which it operates. In fiscal year 2018, an e-learning program regarding international antitrust legislation was implemented at Group companies in Japan, the Asia-Pacific region and Greater China.

Promoting Compliance with Legislation Regarding the Timely Payment of Subcontractors

With the aim of enhancing understanding of the importance of appropriate and fair transactions with subcontractors, the Legal Unit held presentations regarding the timely payment of subcontractors for the purchasing departments of domestic DIC Group companies that incorporated case studies, and offered e-learning, principally for employees in charge of subcontractors. In addition, DIC has prepared the Manual for Internal Auditing of the DIC Group’s Compliance with Japan’s Act Against Delay in Payment of Subcontract Proceeds, Etc., to Subcontractors and created a framework for conducting audits in a more efficient manner. The Group also encourages employees in related positions to participate in programs sponsored by external organizations, including a workshop promoting adherence to the Act sponsored by the Japan Fair Trade Commission and the Small and Medium Enterprise Agency.

Taxation Compliance

Amount of Accrued Tax in Fiscal Year 2018

In November 2017, the DIC Group formulated an official approach to tax. As an organization with global operations, the Group engages in fair and appropriate tax planning that reflects the nature of its businesses. The Group is also aware of risks associated with transfer price taxation and the use of tax havens and of its obligation to pay appropriate taxes in the proper jurisdictions as appropriate for its operations. The chart to the right shows a geographic breakdown of taxes paid by the Group in fiscal year 2018.

VOICE

We provide legal services that are essential to the DIC Group’s global operations.

I am currently on assignment at DIC (China) as an overseas trainee, overseeing legal matters in collaboration with the staff of DIC (China)’s legal department. To ensure legal compliance when operating in a country or territory with different laws and regulations it is essential to consult local legal experts. This can be difficult if you don’t have a basic knowledge of the country or territory’s laws. As a trainee, I have come to realize that legal department staff members are expected to communicate with legal experts as well as serve as intermediaries between experts and business units. Looking ahead, I will continue working to gain a firmer grasp of needs associated with global operations with the goal of providing effective legal services.

Legal Department Toshiharu Tashiro

Legal Department
Toshiharu Tashiro

VOICE

Our goal is to enhance global legal services.

I serve as General Counsel and Secretary of Sun Chemical. In this role I am responsible on a global basis for Sun Chemical’s legal, intellectual property, real estate, regulatory compliance, and environmental, health and safety functions. I am proud of the work performed by each of these areas and of the collaborative working relationship that we have with DIC. As an example of the exceptional work performed Sun Chemical employees, our Legal Group was recently named the “Legal Department of the Year” by the New Jersey Law Journal. This award is in recognition of the group’s outstanding work in providing legal services to the Sun Chemical organization and in managing relationships with outside counsel located around the world.

Vice President, General Counsel and Secretary, Sun Chemical Corporation Jim Van Horn

Vice President,
General Counsel and Secretary,
Sun Chemical Corporation
Jim Van Horn

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