Compliance

Basic Stance

• We will act in accordance with applicable laws, rules, regulations, social norms, and ethics.
• We will place safety as a major premise in all aspects of our business activities.
• We will remain committed to the creed of “Hini Arata” as we take on new challenges and make changes for the better.

Group Code of Conduct

1. Compliance Guidebook

We established our Code of Business Conduct in 2004 and revised it to the Group Code of Conduct in 2019. The Group Code of Conduct has been distributed to Group executives and employees as a booklet. However, in light of the rapid increase in the number of Group companies outside of Japan and the significant changes in the corporate environment, we believe it important to disseminate our approach to compliance throughout the Group in an easier-to-understand format, and thus created the Compliance Guidebook in 2021. This Guidebook includes the definition of compliance for the Group, an explanation of each item of the Group Code of Conduct, and the relationship between each item and the SDGs, and it is available in multiple languages for the entire Group. Q&A pages are also provided for more important information to ensure a deeper understanding of the contents. This Guidebook is intended for use by all officers and employees in their day-to-day activities while maintaining a common set of values regarding compliance throughout the Group.
The Group Code of Conduct is reviewed and approved by the Board of Directors after careful examination of its contents in line with contemporary developments, and this Guidebook is also revised in detail to reflect the latest societal circumstances.

2. Compliance education and training

To ensure that all officers and employees of the Group are fully aware of the company’s approach to compliance, the CEO sends out compliance-related messages to Group executives and employees via the company’s internal network, and the company also conducts internal training programs for each job level. In addition, since we are conducting an increasing amount of business with many different countries and regions, we offer various training programs on topics such as anti-corruption laws and regulations including anti-bribery regulations, security export control laws, and competition laws in various countries to establish and spread awareness of compliance.
In fiscal 2023, we conducted compliance education for all levels of employees, from new hires to management. This compliance education was implemented through position-based training and training opportunities held by business units, and it utilized the Compliance Guidebook as well as the manga depicting actual cased of misconduct that were created during the Compliance Enhancement Month (more information below). In addition, we hold global compliance training each year. This year’s training focused on respect for human rights, and it consisted of a video message from the CHRO on the importance of respect for human rights, an overview of the Daifuku Human Rights Policy, and explanations of the Daifuku Group’s initiatives. A comprehension test on past training content including bribery, entertainment and gift-giving (anti-corruption), and competition law was also administered in order to provide a comprehensive summary of the previous mid-term period.
In fiscal 2023, a total of 8,636 participants both within Japan and internationally took this course, bringing the total number of participants from fiscal 2021 to fiscal 2023 to over 18,000.

3. Compliance Enhancement Month

We have set October as our yearly Compliance Enhancement Month, during which we carry out initiatives to raise awareness of compliance among employees.
The theme for fiscal 2023 was prevention of misconduct, and we made efforts to raise awareness on an individual level and engage each and every employee through initiatives such as creating comics of actual cases of misconduct and utilizing them in e-learning programs as well as soliciting entries for a compliance poem contest, of which winning works were selected and awarded prizes. In addition to the original Japanese, English and Chinese translations of the comics have been prepared and distributed to our global affiliates to help raise compliance awareness among all Group employees.

4. Anti-corruption

As a signatory company of the United Nations Global Compact, Daifuku promotes anti-corruption initiatives throughout the entire Group based on principle ten: “businesses should work against corruption in all its forms, including extortion and bribery.” Corruption not only impedes economic growth, distorts competition, and impacts vulnerable people, but it is also directly linked with the deterioration of corporate value. The Daifuku Group believes that the promotion of anti-corruption is extremely important for the sound development of society as a whole and the sustainable development of corporations.
For this reason, we have declared our respect for human rights in our management philosophy, the Daifuku Human Rights Policy, and the Group Code of Conduct, which stipulates that we shall act properly and in accordance with applicable laws, regulations, social norms, and ethics. In addition to these basic, high-level criteria, we have also established internal regulations that include the prohibition of bribery. Specifically, we have established Group regulations on both giving and accepting entertainment and gifts in order to set forth conduct guidelines^*1 to ensure transparent business dealings by officers and employees of the Group.

With regard to giving entertainment and gifts, we have analyzed the results of a risk assessment based on the nature of the business, trends in the authorities in each country, and other factors, and we have determined that some countries pose a high risk to the Group. We have established detailed regulations that correspond to the laws and regulations of each relevant country and defined prohibited acts in relation to entertainment and gifts, travel expenses, contracts with agents and consultants, facilitation payments,^*2 etc., while also clarifying the specific procedures that should be followed. Facilitation payments are prohibited in principle but may be allowed in exceptional cases due to specific, individual circumstances. In addition, when conducting business through an intermediary such as an agent or consultant, we require the intermediary to comply with the same anti-bribery laws and regulations as the Daifuku Group.

With regard to accepting entertainment and gifts, in order to make the intent of our system easier to understand and disseminate it more widely, we have created a set of guidelines in a Q&A format that each employee can use in their daily work. Additionally, based on the rules above, we also ask all business partners for their understanding and cooperation in declining entertainment and gifts.

Supply Chain Management

Furthermore, we are working to further raise awareness throughout the entire Group by including bribery, entertainment, and gifts as part of the educational content covered in our global compliance training.
The Internal Audit Department conducts regular and ongoing evaluations and audits each year of all Group operations based on the annual plan, including ensuring proper compliance with laws and regulations, the Group Code of Conduct, internal rules on anti-corruption, and anti-corruption measures, and instructs the Group to take corrective measures when problems are discovered.

• *1Daifuku Group rules on entertainment and gifts
• *2Paying a small amount of money to civil servants to expedite routine tasks and actions for which they do not have discretion, such as the issuance of visas and customs clearance procedures



Entertainment and gifts of which both giving and accepting are prohibited
Anything illegal Cash and cash equivalents Anything offered in exchange for a transaction Any other entertainment, gifts, etc. that violate Daifuku's Group Code of Conduct or internal regulations
Entertainment and gifts of which giving and accepting are prohibited in principle
Entertainment or gifts for civil servants Acceptance of travel or sightseeing expenses, living expenses, transfer of real estate or stocks, low-cost loans, or employment facilitations for officers and employees of the Group or their families Entertainment or gifts from business partners for our company
Entertainment and gifts that are permitted
Giving entertainment or gifts that do not go beyond the bounds of the law and reasonable social norms and are carried out in accordance with internal regulations Accepting entertainment or gifts to our company as permitted in the Guidelines for Acceptance of Entertainment and Gifts

5. Preventing anti-competitive behavior

In the Group Code of Conduct, the Group clearly states our commitment to compliance with competition laws and other rules and to promoting fair trade. In addition, the Group has established the Competition Law Compliance Regulations as rules applicable to the entire Group, and the CEO sends out messages through our internal network explicitly stating the company’s stance of not accepting any act of profiteering through non-compliance. Furthermore, compliance with competition laws is also included as one of the topics in our global compliance training, and we regularly provide training on the Subcontract Act in Japan.

6. Response to anti-social forces

The Group Code of Conduct stipulates the Group’s policy of taking a firm stance against forces and organizations that pose a threat to the order and safety of civil society and of never having any relationship with these forces and organizations. All officers and employees of the Group are fully aware of this policy.