Governance Compliance

Our Risk Management / Compliance Committee, which is chaired by the officer in charge of risk management for the entire Takasago Thermal Engineering Group, implements various initiatives based on our basic policy for compliance. Our Compliance Office—a dedicated department—develops our compliance system and promotes compliance initiatives, for example disseminating information to executives and employees and informing everyone about the consultation and reporting contacts.
We have incorporated major compliance themes—including harassment prevention and compliance with competition laws—into our compliance program to ensure a common understanding of the issues, and promote these themes through the Company-wide Risk Management / Compliance Committee, which checks the progress of measures and discusses cooperation and collaboration between departments.
We are also continuing to develop a Groupwide system by, for example, strengthening collaboration with the Company by appointing an officer in charge of compliance and a person in charge of compliance at each of our domestic and overseas affiliates.

Group Compliance System Chart

Awareness-raising activities with the Group Corporate Code of Ethics and various tools

We have established the Group Action Guidelines as the basic action guide for executives and employees and digitized the “Group Corporate Code of Ethics” for Group executives and employees to use for daily duties, in-house training, and other purposes.
In addition, we organize various training programs on compliance for not only employees but also partner companies and periodically prepare and distribute compliance-related materials useful for training and self-study at various workplaces. The content of these training programs and compliance-related materials is designed to deepen understanding of compliance by reflecting topics of social interest and questions raised by Takasago employees.

Compliance awareness survey

We conduct a compliance awareness survey once a year to grasp yearly changes and any new trends in the awareness of compliance among employees.
The objective of this survey is to gain an understanding of problems and resolve them as soon as possible. We guarantee the anonymity of our employees to enable them to respond without worry, and the survey questions cover topics that include the existence of harassment and other problematic behavior, relationships with suppliers, employee awareness of ordering, and the in-house situation.
We also revise the questions every year based on recent trends as well as responses from the previous fiscal year in order to gain a more accurate understanding of the situation and take concrete measures to address issues.
The survey results are disclosed to all employees and used for compliance training and other purposes in each department. The analysis of the answers is reported to various committees to share the problems and help develop action policies and measures for improvement.

Maintenance of proper relationships with customers (commitment to the prevention of bribery)

• Establishment of Anti-Bribery Rules
• Review of Anti-Bribery Rules as needed, based on the laws, cultures, and business practices of each overseas group company
• Implementation of regular employee monitoring

To maintain proper relationships with customers, we have prohibited excessive business entertainment, the offering of bribes to government workers, etc., and the commercial bribery of private customers in the Group Corporate Code of Ethics.
In addition, in consideration of the current international situation and other factors, we are undertaking initiatives to remain effective in preventing bribery.

Anti-Bribery Rules(Basic Policy)

1. The Group shall comply with all applicable domestic and foreign anti-corruption laws and regulations relevant to its business activities, and shall not engage in corruption or any conduct that could lead to the suspicion of corruption. Additionally, executives, employees, and others shall comply with the laws and regulations of each country, bearing in mind that some countries have laws and regulations that make it illegal to provide benefits to private companies for the purpose of obtaining illicit gains.
2. These Regulations do not prohibit the provision or transfer of all money or other benefits between executives, employees, and others on one side and relevant people on the other. Executives, employees, and others may provide or transfer money or other benefits as outlined in Anti-Bribery Guidelines for purposes that are legitimate (e.g. maintaining and establishing normal business relationships with relevant people, properly promoting the Company or the like, formalities at weddings, funerals, and other ceremonies) and not in excess of socially accepted norms.
3. The Company may exempt executives, employees, and others from disciplinary action if the Company determines that they provided money or other benefits to public officials or others because they were truly forced to do so to protect their own or their family members’ lives, bodies, property, or freedom.

Measures to comply with competition laws

For thorough compliance with the Anti-Monopoly Act and other competition-related laws, we have specified and practiced measures for each of the stages from “prevention” to “detection and early discovery,” “response to the occurrence or suspicion of a violation,” and “measures to prevent any violations from being forgotten or the rules from losing substance.”
We rigorously ensure compliance with competition-related laws, including the Anti-Monopoly Act, and continue to strive to create an environment in which all employees can continuously carry out sound business operations in the market.

Prevention	Clarification of rules with the Basic Rules on Compliance with Competition Law and the Guidelines on Contact with Other Companies in the Industry and periodical review of them Enhancement and improvement of training for compliance with competition laws
Detection and early discovery	Check and storage of records on contact with companies in the same industry Voluntary inspection by sales sections and management sections Internal audits or monitoring by legal sections
Response to the occurrence or suspicion of a violation	Establishment of procedures to prevent violations Development of an in-house investigation system
Measures to prevent any violations from being forgotten or the rules from losing substance	Periodical review and implementation of training in the “Compliance Month” Report of the status of management and operation of the Competition Law Compliance Program to the Internal Control Committee and the Board of Directors

In addition to multiple reporting channels within the Company, we have established a wide range of independent reporting routes, including external channels managed by a law firm that eliminates conflicts of interest separate from the legal counsel, as well as private specialized agencies. We have also enacted and implement the Rules on the Protection of Whistle-blowers in the Group, which ensures independence, confidentiality, and anonymity. Alongside measures to protect whistle-blowers, we continuously encourage the active use of reporting channels.
In FY2025, we received a total of 26 reports through this system, including reports on harassment and opinions to the Company.
The reports are passed to the Company-wide Risk Management/Compliance Committee and the Internal Control Committee, while ensuring the protection of the whistle-blowers, to facilitate early and appropriate responses to issues and prevent recurrence. The content of the reports is also reflected in the subjects selected for compliance training and other efforts to maintain and build appropriate systems.
For overseas bases, in addition to the reporting channels at each base, we have established multilingual reporting channels at the Company, which is the parent company, similar to domestic efforts, and continue activities to establish the internal whistleblowing system.

Flow Chart of Whistle-blowing and Consultation

Number of reports made in the whistle-blower system by category

Category	FY2023	FY2024	FY2025
Harassment	7	14	11
Company and supervisor response	4	7	2
Labor management, etc.	0	0	1
Other	3	5	12
Total number of reports	14	26	26