The Company, its principal operating companies, and their directly owned subsidiaries inspect the status of compliance at each worksite at least once a year and carry out any corrective measures required in the event that any violations or concerns are found. In fiscal 2024, the Company and ENEOS separated the internal control and legal compliance inspections and instituted new compliance inspections. To counter the reductions in effectiveness and autonomy that had been issues in previous inspections, we have changed to a system where every worksite autonomously sets inspection criteria that are appropriate to the risks specific to their circumstances, under the direction of the officer in charge. This enables much more effective inspections to be conducted.
Additionally, the content and results of these inspections are reported at meetings of the ENEOS Holdings, Inc./ENEOS Corporation Compliance Committee, which comprises officers in charge of each area. We are working to build a stronger compliance structure by sharing effective initiatives with each business area through this committee.

Deficiencies under the High Pressure Gas Safety Act at ENEOS Materials

In fiscal 2024, due to non-compliance with the High Pressure Gas Safety Act by Group company ENEOS Materials, on October 22, 2024 the Ministry of Economy, Trade and Industry issued administrative guidance based on the Act in the form of severe warnings to the Yokkaichi Plant and the Kashima Plant, and a caution to the Chiba Plant.
The company takes this matter seriously and is implementing measures to prevent recurrence, with company headquarters taking the lead in security-related activities and ensuring strict security management at worksites.
At all business sites, we conducted employee training using real-life examples on the significance of minor changes, the importance of technical standards, and the definition of an accident, deepening understanding and ensuring their application in practice.
We are also working to prevent similar deficiencies from occurring again by broadening and strengthening compliance initiatives throughout the Group.

Strong awareness among all officers and employees is an important element in achieving thorough compliance. To this end, we issue ENEOS Group Philosophy cards and ENEOS Group Code of Conduct handbooks to all personnel and regularly provide compliance training for all officers and employees.
We will continue to provide training based on select topics as part of our ongoing efforts to ensure thorough compliance.

Compliance Training Conducted in Fiscal 2024 (Partial List)

• Company-wide training on compliance, competition laws, anti-bribery, the Act on the Protection of Personal Information, and insider trading regulations
• Training on competition law for sales departments
• Compliance awareness training for officers

The Company and principal operating companies have been conducting compliance surveys of employees since fiscal 2024. These surveys quantify and measure awareness of the Group Philosophy, the Code of Conduct, and compliance, bringing any issues to light. We devise effective policies and measures based on the results of these surveys, acting in accordance with the Group Philosophy and the Code of Conduct for the transformation and development of the Group. The results of the survey are shared with employees in a manner that does not allow the identification of individuals.
The fiscal 2024 survey indicated a high level of awareness regarding the Group Philosophy, Code of Conduct, and whistleblower systems and showed that compliance-focused activities were being conducted. Conversely, there were few responses indicating that the Group Philosophy and the Code of Conduct were being put into practice, or that those responding to the survey would be willing to use whistleblower systems.
Based on the results of analysis of these responses, in fiscal 2025 we will use training and disseminate management messages to encourage actions that are consistent with the Group Philosophy and Code of Conduct, and to promote the use of whistleblower systems.

The Group maintains a policy that the entire Group must thoroughly comply with competition laws in Japan and other countries. We have put into place necessary company rules, and all officers and employees work under a clear commitment by management to ensure compliance with competition laws.
Specifically, we have established the ENEOS Group Competition Law Compliance Policy, which strictly prohibits officers and employees from engaging in any activity, including cartels, that violates competition laws of any country. The policy clearly states that no activity that would violate competition laws shall be justified by any reason of business custom, the authority or position of the violator, maintaining or expanding business or making profits.
The legal divisions of the Company and ENEOS check each department every year for planned interactions with business competitors, assess those interactions for competition law risks, and request the submission of meeting records detailing the interactions. Through these and other efforts, we work to prevent competition law violations before they occur.
We also conduct competition law compliance training for officers and employees on a regular and ongoing basis.

The Group participates in the United Nations Global Compact, and puts the 10 principles, including anti-corruption, into practice. We have established and published the ENEOS Group Anti-Corruption Policy, which clearly states that the Group will not engage in corrupt practices. With regard to anti-corruption, the Group does not tolerate bribery in any form. We have internal regulations in place, including the ENEOS Group Anti-Corruption Policy, to prevent bribery at our Group companies, and all officers and employees actively work under a clear commitment by management of all Group companies to prevent bribery. ENEOS requires overseas subsidiaries where it has ownership of more than 50% to establish and comply with anti-bribery guidelines.
The Company, ENEOS, and its overseas subsidiaries have a mechanism to check for bribery involving travel expenses, business entertainment, gift giving, and donations, taking into consideration the laws and regulations of each country.
We also implement third-party due diligence procedures to prevent our involvement in bribery through a third party such as an agent, agency, or distributor.
Employees can access relevant internal regulations at any time via the Company intranet or other means. They also undergo various forms of compliance training on the prevention of bribery. In this manner, we are working to raise employee awareness of this important issue.
Internal control inspections, legal compliance inspections, and internal audits are used to continuously monitor whether these mechanisms are functioning properly. The results of monitoring are reported to the Company’s Board of Directors as needed.
The Company, ENEOS, and its overseas subsidiaries also maintain risk screening systems for domestic and overseas business partners using services provided by specialized vendors, and conduct risk checks in a timely manner. In addition, we conduct risk surveys at the commencement of business relationships with new business partners, and if risks are indicated, we take necessary risk mitigation measures and determine whether or not to commence the business relationships. We also have a system in place to promptly detect and rectify violations and indications of violations through our whistleblower systems.
In fiscal 2024, there were no serious violations and no fines, administrative monetary penalties or settlements imposed regarding corruption or bribery at the Company or ENEOS.

Companies have a corporate social responsibility to appropriately honor their tax liabilities in the countries and areas in which they conduct their business activities. Therefore, we have formulated the ENEOS Group Tax Matters Policy to ensure that tax liabilities are appropriately honored throughout the entire Group.

• Tax Matters Policy