SGH

Compliance

Policy

The SG Holdings Group strives to create a corporate culture in which every employee conducts business with high ethical standards and compliance standards and responds appropriately to changes in the social and business environment. The SG Holdings Group Code of Ethics and Conduct constitutes the backbone of the Group's compliance posture. Based on the Code of Ethics and Conduct and the Compliance Regulations, the Group has built and maintained a culture of conducting business with high ethical standards, continually striving to improve our business operations and our credibility with the public.

Systems

At the SG Holdings Group, the department responsible for the legal affairs of SG Holdings in coordination with Group companies takes the lead in developing and guiding our compliance system, while the Internal Audit Department monitors compliance.

As an internal whistleblowing system, we also operate the SG Holdings Group Compliance Hotline. By using this service, employees, their family members, and partner companies can report actions they think may be in violation of the law, company rules, or our Code of Ethics and Conduct. We also operate hotlines for whistleblowers who are not company employees, and overseas hotlines as well.

Additionally, the Group is actively taking steps to prevent insider trading as we have seen more opportunities to add listed overseas companies to the Group and to form business and capital alliances with listed companies. In particular, the recent listing of the Company's own shares prompted us to reinforce our insider trading prevention regulations. We have thus established a system of controls including a blackout period and establishment of an application procedure.

Initiatives

Compliance Training

Once every month, the SG Holdings Group holds readings of the Code of Ethics and Conduct for all employees of Group companies for the purpose of cultivation of employees' ethical standards and self-discipline based on that. Furthermore, we publish the Compliance Newsletter, the Internal Control Newsletter and the Insider Trading Prevention Newsletter via the Group's internal portal website. In particular, as insider trading prevention initiatives, we hold insider trading prevention training sessions twice a year, provide in-house training, display posters in our offices, and make insider trading prevention guidebooks available to all Group employees.

Harassment Prevention Training

Harassment prevention training is implemented twice per year. We also provide separate manager training for managers.

Blockage of Relationships with Anti-social Forces

For the purpose of eliminating dealings with criminal elements that threaten the safety and order of society, we have established Exclusion of Anti-social Forces Regulations. We are working hard to block relationships with anti-social forces, refusing to respond to unjust demands, backroom deals, or provision of funds. This is clearly stated in the Basic Policy of Internal Control, the Charter of Corporate Conduct, and the Code of Ethics and Conduct, and we work to ensure that all employees are fully cognizant of them. More specifically, we have (1) instituted the continuous review ("anti-social check") of attributes of counterparties (both customers and business partners) and (2) established an Unjust Demand Hotline to ensure the quick resolution of cases when employees receive unjust demands. We continue to strengthen these systems and by sharing information on anti-social forces and responses to them we strive to fully prevent and block interference of our business partners.

Intellectual Property Management

In order to conduct its business in a sound manner, the SG Holdings Group takes measures to effectively manage its intellectual property and ensure knowledge and awareness of intellectual property.

We have established the Intellectual Property Deliberation Committee as a means of protecting the Group's intellectual property, work to obtain legal proprietary rights over the intellectual property of each Group company based upon the full review and recommendations of that committee and centrally manage and maintain those rights.

In order not to infringe on the intellectual property rights of others, we constantly monitor the intellectual property rights where there is the possibility of infringement by us and disseminate information to the concerned units to ensure that they take appropriate precautions. We continually make efforts to promote knowledge and awareness about these activities throughout the Group.


Building a Responsible Management Foundation