Compliance

SMS Corporate Ethics Policy

Our basic approach

SMS Group, as a part of society, recognizes that it is extremely important to conduct business with integrity and fairness. We have established the "SMS Business Guidelines" to comply with laws, regulations, and social norms related to a wide range of our business domains, and conduct training to ensure that all officers and employees are familiar with the Guidelines, regardless of their employment status. In addition to complying with laws and regulations, the Guidelines set forth the code of conduct to operate businesses based on high ethical standards in light of social conventions and morals to ensure that misconduct is thoroughly prevented.

Our overseas subsidiary, MIMS, has also established the "MIMS Code of Business Conduct," which is applied to all employees of MIMS, regardless of their employment status, as well as agents and other external partners.
If there is any violation of these policies or codes within the SMS Group, we stipulate that strict actions, including disciplinary measures, will be taken in accordance with rules of employment and other rules.

Governance structure

The Sustainability Committee, chaired by the CEO and composed of all Directors, holds oversight responsibility for the SMS Group's corporate ethics and compliance. The Committee monitors the progress of related initiatives and oversees the response to any major incidents should they occur.
The Risk Management Department oversees compliance measures for the entire Group on a cross-organizational basis, while the Internal Audit Department conducts annual audits based on a risk management cycle covering all business areas (including compliance, and corporate ethics risks such as fraud).
To ensure ongoing alignment with evolving societal trends and regulatory updates, the effectiveness of this Policy is reviewed periodically and revised as necessary.

Anti-corruption initiatives

The SMS Business Guidelines state that all business activities must be conducted in accordance with sound economic and market principles. We prohibit the offering, promising, or providing of any improper advantages—whether monetary or non-monetary—to public officials or business partners. Similarly, we forbid the solicitation or acceptance of such benefits, as well as any inappropriate entertainment or barter transactions intended to influence business decisions or gain unfair advantage.

MIMS has implemented a robust "Anti-Bribery Policy" to prevent all forms of corrupt practices, including bribery, kickbacks, conflicts of interest, the misappropriation of company assets, and the falsification of documents. To ensure compliance with all relevant laws and regulations in all countries and regions in which MIMS operates as well as the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act (UKBA), MIMS conducts ongoing internal awareness programs and provides training to its workforce.
As specific control mechanisms, the provision or receipt of gifts and hospitality requires prior written approval from senior management if the value exceeds locally established thresholds—such as USD 200—or if the transaction involves government or public officials. Furthermore, while we prohibit facilitation payments in principle, we ensure transparency across our operations by requiring that all approved gifts and hospitality be meticulously documented in a dedicated register and subject to regular reviews.
Additionally, we stipulate that appropriate due diligence be conducted on third parties—including intermediaries, vendors, and contractors—to verify their background and any history of misconduct prior to the commencement of any business relationship. By requiring these third parties to comply with this Policy, we strive to prevent corruption throughout our entire value chain, including external parties.

Under SMS Group's internal regulations, any expenditures to trade associations or political organizations are subject to a rigorous approval process. Such payments require the approval of the Head of the Corporate Administration Division or, for matters of significant importance, the Management Committee—an advisory body to the CEO. For the purpose of this regulation, "political organizations" include, but are not limited to, political campaigns, candidates for public office, political parties, lobbying activities, and any other tax-exempt or non-profit organizations that play a role in influencing political campaigns or legislation. The status of our expenditures to trade associations and political organizations will be disclosed annually to ensure corporate transparency.
*Please refer to ESG Data for specific actual results.

Protection of consumer interests

We strive to present accurate and easy-to-understand information that does not mislead users with regard to our services. We have established a prior confirmation system to eliminate false and exaggerated expressions from our websites and advertisements, and to use appropriate expressions that do not constitute social discrimination or human rights violations.

We have also established an inquiry desk to receive requests and inquiries from service users. We will respond sincerely to such requests and inquiries and utilize them in our future business activities.

Prevention of unfair competition

The SMS Business Guidelines clearly state that we will strive to ensure that our business activities do not interfere with the promotion of fair and free competition. We prohibit unfair slander and defamation of competitors and their products and services. We also prohibit service price agreements with competitors and an unreasonable restraint of customers from doing business with competitors.

Elimination of antisocial forces

We are firmly committed to preventing any relationship with antisocial forces that threaten the order and safety of civil society, and the entire Group takes a resolute stance in response. We are a member of the Tokuboren (Special Violence Prevention Countermeasures Federation under the jurisdiction of the Metropolitan Police Department), and work to strengthen our systems for eliminating antisocial forces in cooperation with related organizations. When starting new business transactions, the Group strictly checks business partners and strives to prevent transactions with antisocial forces by including provisions regarding the elimination of antisocial forces in contracts, etc.

Proper tax payment

We continue to grow and contribute to society as an everlasting corporate group, while fulfilling our corporate social responsibility through appropriate tax payments by complying with the tax-related laws and regulations and respecting the spirit of them in each country and region where we operate business.
From the viewpoint of maximizing shareholder value, we strive to appropriately and effectively utilize preferential tax treatment. However, we do not engage in tax saving through interpretation or application that deviates from the purport of laws and regulations, rules, etc., or through intentional tax avoidance such as by establishing dummy companies with no business purpose.

Regarding tax risks associated with international transactions, we request advice and guidance from experts as necessary. In particular, the transfer pricing taxation and CFC (Controlled Foreign Company) rules will be dealt with as follows.

- Transfer pricing taxation
The transaction price applicable to foreign affiliated transactions shall be calculated in accordance with the arm's length principle, based on the laws and regulations of each country and region and the Transfer Pricing Guidelines issued by OECD (the Organisation for Economic Co-operation and Development).
The price calculation method shall be appropriately documented in cases where it is required under the laws and regulations of each country or region, or where it is necessary due to the size of transactions and tax risks.

- CFC (Controlled Foreign Company) rules
We do not use lightly taxed countries for tax avoidance. When investing in lightly taxed countries for business reasons, we pay taxes appropriately in accordance with the laws and regulations of each country or region.

We will build a sound relationship with the tax authorities of each country and region by providing appropriate information in response to their requests. In addition, if there is a difference of opinion with the tax authorities of each country, we will strive to resolve it through constructive dialogue.

Establishment of whistle-blowing hotlines

We have introduced a whistle-blowing hotline where all officers and employees of SMS and its domestic subsidiaries can report and consult on violations of laws, regulations, and internal rules as well as harassment in the workplace. We also have an external hotline managed by outside lawyers in case a whistle-blower feels uncomfortable about reporting to the internal hotline.
The whistle-blowing hotlines allow officers and employees to choose freely whether to report anonymously or not. We ensure the confidentiality of information related to whistle-blowing. We also ensure that whistle-blowers will not suffer any disadvantages, including retaliatory personnel action, due to the content of the report. In the external hotline, whistle-blowers can request a female contact person.

MIMS has also established procedures for internal reporting and ensures that employees are free to choose whether to report anonymously or not, and that they will not suffer any disadvantages by the reporting.

Established in March 2026