Compliance

Since our establishment, we have been conducting our business with the aim of creating a fair and highly transparent used car distribution market. In order to earn the trust of our customers, we have a strong desire to ensure that we have an operating system and rules in place to enable us to conduct our auto auctions smoothly and to guarantee that our daily operations are always conducted in the fair and equitable manner in which they need to be executed.
Moreover, since auto auctions are conducted by dealing with a lot of important information such as data on members and detailed information about auction lots and successful bids. If such information is not properly managed, it may become impossible to provide a "fair and impartial" forum for auto auctions to be conducted. Furthermore, it is also important for the functions of the used-car distribution process to be closely related to the administration in terms of issues like the registration procedures etc. and for various documents to be prepared without errors or deficiencies.
From this perspective, we constantly strive not just to improve our company's growth rate, but also to enhance the social status of the entire industry, by thoroughly complying with all the necessary regulatory and other requirements and by conducting our auto auction operations in a "fair and impartial" manner.

We have established and codified the basic principles of our compliance policy as the "USS Code of Conduct and Ethics", and our directors take the lead in respecting and adhering to our corporate ethics. We have also created and published a "Compliance Manual" in order to thoroughly enforce the "USS Code of Conduct and Ethics", and to ensure that each employee is thoroughly informed of its content through internal training programs, etc., and aim to achieve full compliance with laws and social rules and to firmly establish our corporate ethics.

■　USS Code of Conduct and Ethics

1. Compliance with laws and regulations

   We will strictly comply with laws and regulations (including internal rules and guidelines) concerning the operation of our businesses and will contact the Administration Division for assistance regarding any points that require clarification.

2. Respect for all individuals

   We will not allow discrimination regarding race, ethnicity, nationality, gender, religion, other beliefs, disabilities, sexual orientation, gender identity and other personal characteristics. We are committed to maintaining a diverse workforce.

3. Relationships with business partners

   USS Group executives and employees are prohibited from receiving unreasonable gifts and other benefits from auction members and business partners under any circumstances. Furthermore, services must be provided fairly with no particular auction member receiving special benefits.

4. Confidentiality

   USS Group executives and employees are prohibited from disclosing to external parties any confidential corporate, internal and other information about companies, customers and business partners that has not been made public.

5. Antisocial organizations and associated individuals

   The USS Group refuses to accept monetary and other demands from antisocial organizations and associated individuals and is prohibited from purchasing or placing advertisements in publications issued by shareholders meeting extortionists and other similar parties.

6. Conflicts of interest

   USS Group executives and employees are prohibited from creating conflicts between their personal interests and the interests of auction members and causing a situation that results in this type of conflict.

7. Company and private affairs

   USS Group executives and employees must maintain a clear separation between their duties at the group and their personal affairs.

8. Sexual and power harassment

   USS Group executives and employees are prohibited from engaging in sexual harassment, which seriously disrupts the atmosphere of workplaces. Individuals must not use their jobs for sexual demands, sexual statements or other activities that annoy others. Furthermore, individuals are prohibited from engaging in power harassment, which involves the use of their jobs and authority to make statements and demands that are detrimental to the dignity of others and the workplace environment.

9. Insider trading

   The use of confidential information not yet disclosed to the public that was acquired through an individual's job at the USS Group for personal gain is a violation of the law and is strictly prohibited.

10. Protection of USS Group tangible and intangible assets

    USS Group executives and employees are obligated to protect all categories of the group's assets (information, merchandise, supplies, equipment, replacement supplies, brands, software, reputation for trust, and other tangible and intangible assets) and must not improperly or fraudulently use any of these assets.

We think that our Risk Management System is closely related to our Internal Compliance System, and we have established our "USS Behavior and Code of Ethics" to improve awareness of corporate ethics and comply with laws and regulations. We have created and published a "Compliance Manual" and conducted in-house training, etc., in an effort to comply with laws and regulations, social rules, and to firmly establish our corporate ethics.
In addition, in order to promptly detect and correct behaviors and actions that violate or are contrary to it, we have established and are operating, an internal reporting system for USS Group employees.
The Company's Risk Management System consists of the Auction Management Headquarters for risks related to the auto auction business, the System Headquarters for risks related to information processing, and the General Headquarters for risks related to finance, personnel and disaster etc. We always strive to respond to risks and prevent their recurrence, and have a system in place that reports to the President through the Director in charge who also reports to the Board of Directors about risks that affect management.

USS has a manual that prescribes responses to a major natural disaster. This manual includes items concerning responses to a large-scale earthquake and measures to be prepared for an earthquake. In addition, there are training programs to give everyone at USS a thorough understanding of the BCP.
To confirm the safety of everyone at USS following a large-scale earthquake, USS has system linked to the earthquake bulletins of the Japan Meteorological Agency that automatically sends messages to all USS personnel. This system makes it possible to quickly determine the status of everyone in the event of an earthquake.

• Data Management System for Disasters

  In order to protect transactional data from disasters, we have contracted with inland data centers with a low risk of earthquakes and tsunamis, and we have also arranged for an adequate system of backup facilities to be in place.
  The systems and data formats are standardized at each venue, and so, even if a disaster occurs in any specific location, the venues in the surrounding area will provide support and attempt to achieve a prompt recovery, and the handling of processes such as the settlement of moneys and fund transfers will be distributed to the surrounding area, we have established a system that will not become congested or delayed in such circumstances.

In conducting membership automobile auctions, it is essential to properly manage various items of information of different types, such as information on members, data about the vehicles consigned for auction, and information on bidding. Information leaks can interfere with, and disrupt the conduct of, fair and impartial transactions, and so we are working to upgrade our hardware and software to ensure that we are able to manage information and data properly. We have established and published a "Privacy Policy" outlining how to protect both the personal data and information entrusted to us by our members and the rights of individuals.
Moreover, in order to properly manage the information related to automobile auctions, the input terminals for our automobile auctions are operated independently from external networks. In addition, we have also improved the system, and have introduced a monitoring system that allows us to check who has accessed information, what type of data it was, and when it was viewed. We always keep logs of all access, of any kind, made to the information that is highly important to our business operations to ensure that this is such access is only available to authorized employees of the Company.
There were no incidents of violations of information security laws in the fiscal year that ended in March 2023.

The USS Group Internal Reporting System enables employees to report illegal activities and other information that poses a risk. The system is managed by an external organization. Information about consultations and reports that could be a significant risk are reported to the Board of Directors. The USS representative director checks the status of this system's operations on a regular basis.
Attorneys and other external professionals may be asked for assistance, as directed by the USS representative director, as needed depending on the type of information received through the reporting system. Reports may be verified by an objective examination by an individual appointed by the USS representative director or by using other appropriate methods. Suitable activities are then taken for improvements and preventive measures regarding the illegal or improper behavior. There is a separate contact for reports concerning matters that may involve a USS director or executive officer. When a report is received using this separate channel, an Examination Committee consisting of USS external directors and USS corporate auditors designates an individual to handle the matter that was reported. When the external organization that manages the USS Group Internal Reporting System notifies USS that a report has been received, the individual at USS who is responsible for handling these reports passes on to others only information in a format that does not reveal the identity of the person who submitted the report, unless the individual asked for the report to be submitted with his or her name. Furthermore, the USS Group's Rules for the Internal Reporting System clearly state that the submission of a report will be not be used as a reason for any any negative consequences for individuals who submit reports using this system.

Corruption and bribery form one of the major risks that can seriously impair trust in a Company. In order to maintain a sound relationship with our members, traders and other stakeholders, we have clearly stated anti-corruption in the "Basic Policy for the Prevention of Corruption" and ensure that all of the employees of the USS Group are thoroughly aware of it.

• (Basic Policy for the Prevention of Corruption)

  1. Purpose

     USS Co., Ltd. has established the USS Code of Conduct and Ethics to provide basic guidelines for the activities of the executives and employees of the USS Group (USS and its subsidiaries). There are numerous measures to ensure strict compliance with these guidelines. USS has now established a Basic Policy for the Prevention of Corruption for the purpose of clarifying these guidelines and declaring the USS Group's basic stance about the prevention of corruption and the framework for preventive activities.

  2. Framework for the prevention of corruption

     The chairperson of the USS Risk and Information Management Committee is responsible for the oversight of all activities at the USS Group for the prevention of corruption. The committee conducts activities for the establishment, maintenance, supervision and other measures involving the corruption prevention framework. In addition, all USS business sites and subsidiaries have a Risk and Information Management Officer whose responsibilities include the establishment, maintenance, supervision and other measures involving this framework. The Rules for the Prevention of Corruption define the USS Group's corruption prevention framework and prescribe items requiring the compliance of all executives and employees.

  3. Bribery is prohibited

     Bribery is defined as any of the following actions regarding a government or private-sector executive or employee for the purpose of improperly receiving a business gain: (a) an action for the purpose of having or not having an individual perform a designated act or (b) the use of an individual's job at the USS Group for the payment of cash or other benefit to a government or private-sector executive or employee for the purpose of having or not having an individual perform a designated act. This second category also includes requests or promises concerning involvement in these actions.
     The USS Group strictly prohibits the use of bribery by executives and employees.

  4. The acceptance of bribes is prohibited

     The acceptance of bribes is defined as the receipt of cash or other benefits, or requests or promises concerning the receipt of cash or other benefits, from government or private-sector executives and employees for the purpose of performing or not performing an illegal or improper act.
     The USS Group strictly prohibits executives and employees from accepting bribes.

  5. Provision of entertainment and gifts

     When USS Group executives and employees entertain government or private-sector executives and employees or give these individuals gifts, the designated internal procedure must be used and approval of the Risk and Information Management Officer must be received. This officer must confirm that the entertainment or gift is not a bribe and is provided for a legitimate reason. Furthermore, this officer must agree that the entertainment or gift is necessary. Only after completing these confirmations can the Risk and Information Management Officer approve the entertainment or gift.

  6. Receipt of entertainment and gifts

     When USS Group executives and employees receive entertainment or gifts from government or private-sector executives and employees, the designated internal procedure must be used and approval of the Risk and Information Management Officer must be received. This officer must confirm that the entertainment or gift is not a bribe and is received for a legitimate reason. Furthermore, this officer must agree that receipt the entertainment or gift is necessary. Only after completing these confirmations can the Risk and Information Management Officer approve receipt of the entertainment or gift.

  7. Donations

     When USS Group executives and employees makes or receives a donation, the prior approval of the Risk and Information Management Officer must be received. This officer must confirm that the donation is not a bribe and is made for a legitimate reason. Furthermore, this officer must agree that the donation is necessary. Only after completing these confirmations can the Risk and Information Management Officer approve the donation.

  8. Self-inspections and similar activities

     The USS Group conducts internal audits on a regular basis to confirm that activities for the prevention of bribery are being performed properly. If a problem is discovered, the Risk and Information Management Committee determines the actions that are needed. Furthermore, when the Risk and Information Management Officer determines that there was bribery or some other violation of the rules, a report is immediately submitted to the Risk and Information Management Committee and other actions are taken in order to determine the actions that are needed.

• (Related Party Transactions)

  The Company, which shall be taken to mean the officers of the Company and their relatives within their second degree and any companies in which either a financial stake or a share is owned by these persons (in the case of listed companies, a company or companies with a holding equivalent to 1% or more of the shares in issue), shall be prohibited from entering into any transactions, other than transactions related to automobile auctions, conducted by any corporation in which a person that is substantially involved in the control or management enters into a transaction with the Company (excluding transactions conducted by the Company and the Company's subsidiaries). In cases involving automobile auction transactions, these transactions are to be referred to the Board of Directors in advance and should, provided that the circumstances surrounding the transaction are the same as apply for general members, obtain the approval of the Board, so as not to harm the common interests of the Company and its shareholders. The status of such transactions is to be reported to the first meeting of the Board of Directors held each year after the conclusion of the Ordinary General Meeting of Shareholders, and a deliberation is to be made as to whether or not these transactions are to be continued.

"Basic Policy for Opposition to Anti-Social Forces" clearly states our stance of severing and refraining from all relations and dealings with antisocial elements. To ensure that there are no relations with antisocial elements at any time, we cooperate closely with the police, attorneys and other external organizations. In addition, all departments cooperate for the collection and management of information about antisocial elements and for maintaining the necessary internal framework.