Risk Management and Compliance

| Risk Management Promotion | Promotion of Contingency Planning | Promotion of Risk Crisis Management | Information Security Efforts | Protection of Intellectual Property Rights | Thorough Legal Compliance |

 Risk Management Promotion
The Kyocera Group is making group-wide efforts to reinforce its risk management system to cope with global risks that are becoming ever more complicated. The Kyocera Group faces various risks that may affect the credibility or business sustainability of the Kyocera Group, including changes in the market environment, occurrence of natural disasters, incidents and accidents, the impact of climate change, information leakage, deficiencies of labor conditions in the supply chain, and violation of human rights. To cope with these, the Kyocera Group endeavors to reduce and mitigate risks while acting on the Basic Policy on Risk Management put in place for this purpose.

  Kyocera Group Basic Policy on Risk Management

1. In accordance with assurance of compliance and the spirit of the Kyocera Philosophy, the Kyocera Group will consider what is the right conduct as a human being and act based on this value standards.

2. In accordance with the spirit of the Kyocera Philosophy, the Kyocera Group will accept thatEthe highest priority is to ensure physical safety and human life,Edeal with crisis, and for the convergence of crises, cooperate among employees as a unit to minimize loss, recover damage, and make efforts to prevent reoccurrences, thereby attempting to remove or mitigate impediments to the interests of each stakeholder, including customers, business partners, shareholders/investors, and the community.

3. The Kyocera Group will attempt to continuously develop its business through implementing risk management.

4. The Kyocera Group will act with its social mission to stably supply products and services helpful to the progress and development of society.

Risk Management System
The Kyocera Group conducts risk management, with the President as the Group Chief Officer and the General Manager of the Corporate General Affairs Human Resources Group as Chair of the Kyocera Group Risk Management Committee, to supervise risk management-related divisions. The Committee conducts risk assessments for each unit of the Kyocera Group and each site and formulates, examines, and approves response measures and monitors their progress with priority given to risks considered to be particularly high in mi portance. In FY2017, risk-management departments were established at Group companies in Japan and risk management supervisors were appointed for every division and every location managed by Group companies in Japan (including Kyocera). A training program was implemented to educate supervisors about response methods for natural disasters, risk management methods, and information security issues. Training at Group companies (outside of Japan) began in FY2019 as part of Kyocera’s company-wide efforts to reinforce risk management capabilities.
Kyocera Group’s Risk Management System
Kyocera Group’s Risk Management System
Systematic diagram of risk management
Systematic diagram of risk management

 Promotion of Contingency Planning

The Kyocera Group has a Disaster Response Manual established based on the Basic Guidelines for Disaster Response to take appropriate actions in the event that a large-scale natural disaster causes damage to the Kyocera Group, including minimization of personal and physical damage and implementation of swift restoration of business operations.The Disaster Response Manual is established and specifies regulations on collection and distribution of information on disasters and response measures for earthquakes, tsunami, wind, and flood damage.

Basic Policy of Disaster Response
Basic Policy of Disaster Response

Actions to Deal with Earthquakes
In an attempt to minimize injury and damage from a major earthquake, the Kyocera Group (Japan) is installing a disaster warning system at all plants and offices using the Earthquake Early Warning System provided by the Japan Meteorological Agency. The Kyocera Group endeavors to minimize earthquake damage through diverse means, including drills utilizing the Earthquake Early Warning System, disaster prevention training for employees, and regular disaster drills held with local fire stations and other organizations.

Considerable damage is expected from a tsunami that could be generated by an earthquake in the Nankai Trough. To counter the potential damage, evacuation areas have been prepared for sites that are likely to sustain damage, based on the expected maximum tsunami height and shortest arrival time. Steps have been taken to ensure employees are fully aware of what they need to do in the event of a tsunami.

Example Approach

 Holding of General Drill for Large-Scale Earthquakes
The Kyocera Group regularly holds a general drill simulating a building fire following the occurrence of a major earthquake. Drills were held at various sites in FY2019, as in the previous year, in cooperation with the local fire-fighting administration supposing the collapse of equipment, the breakout of a fire, and an elevator malfunction following a major earthquake. Kyocera continues to hold regular drills for unforeseen situations to improve our disaster preparedness.
A joint training drill with the local fire department in preparation for a major earthquake.(Osaka Daito Office) A joint training drill with the local fire department in preparation for a major earthquake.(Osaka Daito Office) Fire-fighting drill using fire extinguishers (Kagoshima Sendai Plant)
A joint training drill with the local fire department in preparation for a major earthquake.(Osaka Daito Office) Fire-fighting drill using fire extinguishers
(Kagoshima Sendai Plant)

Business Continuity Plan (BCP) Efforts
The Kyocera Group has a Business Continuity Plan (BCP) in place to ensure rapid recovery and resumption of business operations in the event that the supply of products and services is temporarily halted due to a natural disaster or other issue. In Japan, the Kyocera Group has formulated a BCP to respond to a major earthquake. It outlines necessary responses including anchoring vital equipment, dispatching materials for repairs, and securing alternate means of production. A number of natural disasters occurred in FY2019 including an earthquake in northern Osaka, Typhoon Jebi, and the Hokkaido Eastern Iburi earthquake. During each of these events, the company’s BCP functioned effectively, allowing operations to continue without any significant damage or interruptions. In FY2020, Kyocera is working to expand the plan and further improve its response capabilities based on the company’s experience of responding to the previous year’s weather events and earthquakes. Group companies (outside of Japan) are also developing and maintaining their own BCPs to respond to region-specific disasters and risks including natural disasters and infectious diseases.
Desktop drill assuming an earthquake disaster (Fukushima Koriyama Plant)

Desktop drill assuming an earthquake disaster
(Fukushima Koriyama Plant)

Damage reporting drill assuming the case of disaster (Saitama Tokigawa Office)
Damage reporting drill assuming the case of disaster
(Saitama Tokigawa Office)

 BCP Efforts for the Supply Chain
The Kyocera Group promotes evaluation of alternative items and multiple purchasing sources with respect to the procurement of raw materials and components so as to prevent the stagnation of production activities during a disaster situation.

Kyocera has distributed the Supply Chain CSR Procurement Guideline to all business partners to help them understand our concept of BCP. For business partners who supply us with important raw materials and components, we are carrying out a survey on the progress of their BCP efforts in more detail.
CSR Deployment in the Supply Chain

 Promotion of Risk Crisis Management

The Kyocera Group has in place the Basic Guidelines for Crisis Management to promote risk management measures. Based on these Guidelines, we formulated the Risk Management Manual that stipulates actions to take to ensure the safety of employees working at overseas sites in the event of a terrorist attack and various other emergency situations.

 Information Security Efforts
Policy and System of Information Security Management
The Kyocera Group has in place the Information Security Management Policy for the entire Kyocera Group as we see management strategies, product development, expertise, technology, organization, personnel information and other as the company’s important assets. The company President is the Chief Officer of the information security management system. Based on the Information Security Management Policy, Kyocera has formulated Classified Information Management Regulations, Personal Information Protection Management Regulations, Intellectual Property Management Guidelines, Technological Know-how Leak Prevention Regulations, Physical Security Management Regulations, Visitor Management Regulations, and Personnel Security Regulations for classified information management, intellectual property management, physical security management, visitor management, and personnel security management, thereby ensuring thorough information security management. The Kyocera Group has established an Information Security Committee and a Digital Information Security Committee. These committees implement various digital security measures including periodic training sessions specific to employeesEposts or duties, restrictions on taking information-related devices outside the company, measures to prevent information asset leaks, comprehensive management of IT assets, and enhancement of information security against cyberattacks. Group companies (outside of Japan) are also working to strengthen information security in accordance with national laws to suit local business practices, cultures, and various business types in their region, based on their own information security management guidelines and related regulations.
Protection of Personal Information
The Kyocera Group regards the personal information obtained from stakeholders through business activities as important private information and strives to protect it thoroughly as a primary social responsibility.

Kyocera has set up rules on protection of specific personal information, clarified usage purposes of personal information, set up a dedicated contact for inquiries, and provided regular education to employees handling private information, thereby ensuring thorough management.
Communication system on personal information
Communication system on personal information

 Protection of Intellectual Property Rights
The basic policy of the Kyocera Group is to safeguard the outcome of research and development by the Group as intellectual property rights, and to respect the intellectual property rights of others. We assign liaison officers responsible for intellectual property to main offices and manufacturing plants. Their role is to facilitate the processes of obtaining intellectual property rights, maintaining control of rights, and negotiating licenses for intellectual property rights. The Kyocera Group is undertaking activities relating to intellectual property in close cooperation with relevant business units.

Kyocera also regularly holds the Global Intellectual Property Partners Meeting for patent offices and the personnel of Group companies in charge of intellectual property in the U.S.A., Europe, China, Korea, and Japan, which help us obtain patents in those countries. Participants in the meeting discuss improvement of patent application specifications, and response actions to patent acquisition using specific case examples so that Kyocera can improve the Guideline and the system of sharing information.
Global Intellectual Property Partners Meeting

Global Intellectual Property Partners Meeting

Example Approach

 Awarded the "Top 100 Global Innovators 2018-19"
Kyocera was awarded the Top 100 Global Innovators 2018-19 by Clarivate Analytics, an international information service company. The award, which ranks companies based on Clarivate Analytics' own unique analysis of proprietary patent date, is given annually to companies that lead the world in innovative activity. Kyocera was given high evaluation for its "success ratio of patents" and global performance and has been awarded the commendation consecutively for five years. Trophy awarded to Kyocera
Trophy awarded to Kyocera
 Measures for Dealing with Counterfeit Products
The Kyocera Group is implementing diverse measures in various countries around the world to protect customers from the harm caused by counterfeit products, and to enable product use with peace of mind. Kyocera monitors mail order web sites and distribution sites around the world looking for counterfeit products. Vendors selling counterfeit products are given warning or are reported to authorities and are asked to pledge they will no longer handle the products.They are requested to destroy stocks and reveal the names of their suppliers. Kyocera also uses hologram seals to distinguish between genuine and counterfeit products for some products, such as toner containers, making it easier to determine whether a product is authentic.
Counterfeit ceramic knife

Counterfeit ceramic knife

Kyocera Document Solutions Inc. Intellectual Property Protection

 Thorough Legal Compliance

Kyocera Group Global Legal Compliance Conference

Kyocera Group Global Legal Compliance Conference
The Kyocera Group makes its basic stance handling compliance management actively widely known internally and externally through enacting "Kyocera Compliance Statement", and ensures thorough compliance with the law by taking measures including management by each division in charge of a specific law or regulation, the establishment of an in-house communication system for notification of the enactment or revision of a law or regulation, the establishment of Employee Consultation Offices (internal reporting system), the implementation of regular legal compliance audits, and the provision of compliance education to employees upon new employment or promotion. We also regularly hold the Kyocera Group Global Legal Affairs Meeting, in which legal and compliance affairs personnel of major Group companies in the U.S.A., Europe, and China participate in order to reinforce global cooperation. At each Meeting, participants learn about each others results, share information on legal issues currently being faced by each company, and engage in discussions regarding various legal issues affecting the Group.

Kyocera Compliance Statement
The Kyocera Group applies the spirit of its Corporate Motto "Respect the Divine and Love People - Preserve the spirit to work fairly and honorably, respecting people, our work, our company and our global community" as its basic code on global compliance with laws and regulations.
Since its founding, the Kyocera Group has maintained a fair and honest corporate culture as established in the Kyocera Philosophy whose central principle is "Do what is right as a human being". In alignment with the Kyocera Philosophy, we have never accepted anticompetitive practices such as cartels or acted to endorse criminal organizations, and we have consistently maintained appropriate accounting practices according to the Kyocera Accounting Principles.
"Living Together" has been the foundation of our corporate activities, and as such, we honor coexistence within society and diversity, the traditions and cultures of the related countries, and the humanity of employees, and pursue both material and spiritual happiness for our employees with concern to their physical and emotional health.
Today, laws and regulations that align with Kyocera Group's basic principles are being enacted across the globe. The Kyocera Group fully supports this movement and complies with competition laws, anti-bribery regulations, personal information protection laws, tax laws (including laws preventing facilitation of tax evasion) and any other related laws and regulations of the related countries. The Kyocera Group also respects the efforts of international organizations and countries to protect human rights.
Corporate compliance with laws and regulations is a subject of increasing attention in society, and compliance demanded by society is increasing. The Kyocera Group understands that compliance with laws and regulations is an important endeavor essentially required by the Corporate Motto and Kyocera Philosophy that have regulated our company since founding, and that compliance with related laws and regulations in all countries of the world where the Kyocera Group conducts business is crucial for maintaining the trust of customers, business partners, suppliers, investors, employees and any other stakeholders, therefore the Kyocera Group actively establishes specific departments and prepares regulations for the cause to ensure Group-wide and global compliance with laws and regulations.
January 1, 2020
Kyocera Corporation
Goro Yamaguchi, Chairman
Hideo Tanimoto, President

Measures for Fair and Free Competition
Kyocera Group Global Antitrust Compliance Manual

Kyocera Group Global Antitrust Compliance Manual
The Kyocera Group considers it important to maintain and promote fair and free competition while using these as a judgment criterion for the concept, “What is the right thing to do as a human being?EAs part of its activities, the Kyocera Group Global Antitrust Compliance Manual, common to the entire Kyocera Group, was published, and education and training on the Antitrust Act and the Antitrust Act Compliance Regulations, which specifically stipulates the rules for employees to observe, were provided to employees both in and outside of Japan. In FY2019, global antitrust compliance training was held for the entire Kyocera Group. From FY2020, supervisors will be given training in interviewing techniques to assess and ensure compliance. Kyocera intends to continue these training initiatives to improve employeesEunderstanding of antitrust laws and assist them in ensuring comprehensive compliance with all related laws and regulations.
Conducting legal audits
As part of its efforts to enhance its compliance framework, the Kyocera Group carries out legal audits to confirm the status of compliance with various laws. In FY2018, Kyocera built an auditing framework for major group companies in Japan, focusing on operational processes to prevent legal violations before they happen. Since FY2019, there has been a continuous implementation of legal audits focusing on operational processes at all group companies in Japan.
Security Trade Control System
The Kyocera Group complies with the Foreign Exchange and Foreign Trade Act and other regulations relating to international security. In addition, the Kyocera Group is establishing a system for heightening security trade control. The purpose is to prevent the outflow of components for weapons of mass destruction and arms, or products and technology that could be used for their production and development.

Measures taken to ensure strict compliance with the Foreign Exchange and Foreign Trade Control Act and other export-related laws and regulations in Japan include sharing of relevant information among all the sites, with Kyocera as the main player, and implementation of audits to continuously maintain the security trade control system. Group companies (Outside of Japan) have in place a system that puts an emphasis on education and auditing on security trade control to reinforce control assuredness.

Example Approach

 Measures to Ensure Security in International Distribution
Kyocera is recognized as an authorized exporter and authorized importer according to the AEO (Authorized Economic Operator) system, an international standard designed to ensure safety and smoothness of international trading and for which the mechanism of mutual approval is established in each country. This authorization helps us ensure security and smooth trading related to products delivered to customers outside Japan.

We will continue to improve maintenance of the security system for distribution.
Authorized exporter certificate Authorized importer certificate
Authorized exporter certificate Authorized importer certificate
Appropriate Information Disclosure
The Kyocera Group complies with regulations relating to the disclosure of information. The Kyocera Group endeavors to provide appropriate information without falsehoods or expressions that invite misunderstanding, in accordance with social and moral principles. Additionally, display of product labels and operating instructions, catalogs, sales promotion documents, advertisements and other materials by Kyocera is in line with the company standard as set out in our Public Document Verification Guidelines. We are building a monitoring system for verification by the Quality Assurance, Legal, Intellectual Property and Corporate Communications divisions.
Measures for Prevention of Bribery and Corruption
The Kyocera Group has established a basic policy on anti-corruption and publicizes the basic policy in order to let its basic stance of actively working to eradicate corruption known both internally and externally. The Kyocera Group makes thorough efforts based on Kyocera Philosophy to prevent bribery by rolling out anti-corruption regulations under the basic policy among the group companies, the anti-corruption regulations prohibiting not only bribery such as offer and receipt of excessive gifts or entertainment, but also activities that deviate from ordinary business practices. The Kyocera Group also rolls out anti-corruption internal training so that the employees are well aware of the basic policy and the anti-corruption regulations.

Kyocera Group Basic Policy on Anti-Corruption

The Kyocera Group has been conducting business based on the Kyocera Philosophy. The basis of the Kyocera Philosophy is "Do the Right Thing as a Human Being". The Kyocera Philosophy emphasizes the importance of conducting business activities in a fair manner, as exemplified by principles such as, "Pursue Profits Fairly" and "Insist on Playing Fair". Therefore, in light of the Kyocera Philosophy, it is impermissible for Kyocera Group employees to take unfair measures to gain profits.

Anti-corruption regulations have been strengthened around the world, and efforts to curb corruption are recognized as a social responsibility of the company. The Kyocera Group is a participant of the "United Nations Global Compact", which requires its participants to follow its principle, "Businesses should work against corruption in all its forms, including extortion and bribery". In response to the efforts to eradicate corruption, the Kyocera Group has formulated the Kyocera Group Basic Policy on Anti-Corruption ("Basic Policy on Anti-Corruption") in accordance with the Kyocera Philosophy and the Kyocera Compliance Statement, in order to become "The Company" which is respected by all.
1. Prohibition of Bribery
(1) The Kyocera Group will not provide, offer or promise to provide bribes to any person directly or indirectly, but will compete based on quality and price and pursue profits fairly.
(2) Officers and employees of the Kyocera Group will not engage in acts of bribery, including making facilitation payments to public officials, or those equivalent to public officials, or persons with business influence, even if we are asked to do so. Officers and employees of the Kyocera Group will follow the straight and true road.
(3) Officers and employees of the Kyocera Group will separate personal matters from business and will never receive bribes.

2. Establishment of the Anti-Corruption Compliance System
The Kyocera Group will establish an Anti-Corruption Compliance System to prevent people from committing fraud. For example, the Kyocera Group will take the following measures.
 - Establishing anti-corruption regulations for each Kyocera Group company and guidelines for officers and employees to refer to in specific situations, according to each country and region.
 - Implementing anti-corruption training to ensure that officers and employees are fully familiarized with the contents of the anti-corruption regulations and guidelines.
 - Ensuring that business partners are familiar with the contents of this Basic Policy on Anti-Corruption and reconsidering transactions with business partners that violate anti-corruption laws and regulations, including the suspension of transactions with such business partners.
 - Establishing a hotline for Kyocera Group employees to consult or report any instances of corruption.

3. Bribery Risk Assessment and Control Procedures
(1) The Kyocera Group conducts risk assessments based on anti-corruption laws and regulations in countries all over the world. The Kyocera Group will conduct periodic reviews of the Anti-Corruption Compliance System, and make improvements as necessary.
(2) In order to prevent bribery through third parties such as distributors, agents etc., and to reduce the bribery risk relating to business mergers and acquisitions, the Kyocera Group will conduct preliminary evaluation of such third parties and candidates for acquisitions, mergers, joint ventures, etc. in accordance with bribery risks prior to the commencement of transactions.
(3) When engaging a third party, such as a distributor, an agent, etc. the Kyocera Group will require such third party to comply with this Basic Policy on Anti-Corruption and the anti-corruption regulations in order to build a healthy business relationship.

4. Appropriate Accounting and Monitoring
(1) To ensure transparent management, the Kyocera Group will perform accurate accounting based on the Kyocera Management and Accounting Principles, and will keep proper accounting books and records pursuant to the rules of each Kyocera Group company.
(2) The Kyocera Group will monitor the implementation of this Basic Policy on Anti-Corruption through self-reviews, internal audits, etc. and will take corrective measures promptly should there be any problems found.

5. Disciplinary Measures
Each Kyocera Group company will fairly and strictly discipline its officers and employees who violate this Basic Policy on Anti-Corruption and any applicable anti-corruption laws and regulations, according to the internal rules of each Kyocera Group company.
April 1, 2020
Kyocera Corporation Goro Yamaguchi, Chairman
Hideo Tanimoto, President
Ensuring Transparency in Political Donations
The Kyocera Group may provide political donations as required from perspectives such as the realization of policy-oriented politics and contributing to the sound growth of parliamentary democracy. When we make political donations, we will comply with relevant laws and regulations including the Political Funds Control Act as well as relevant bylaws.
Measures for Prevention of Insider Trading
The Kyocera Group has in place management systems to prevent insider trading and educates employees thoroughly on insider trading compliance. Kyocera has created an internal information management system based on the Insider Trading Prevention Regulations, as well as implementing a ban on stock trading for a fixed period before the company announces its financial results. An Insider Trading Prevention Handbook has been compiled by the company and distributed among employees to ensure comprehensive awareness of the issue. New recruits and recently promoted employees are also provided with training to prevent insider trading. Kyocera is engaging in continued efforts to ensure compliance, including informing employees about the dates of the ban on stock trading at morning meetings.
Measures for Exclusion of Antisocial Groups
The Kyocera Group established a basic policy for corporate governance and internal control including the prevention of involvement in management activities by antisocial groups and the prevention of damage by such groups.

The basis of the measures for exclusion of antisocial groups is that the entire company is united in confronting antisocial groups with determination. The Kyocera Group CSR Guidelines clearly specify how to handle antisocial groups in order to notify all employees of the company's attitude.

The basic transaction contact form Kyocera has with our business associates now contains terms on exclusion of antisocial groups. More efforts will be made in the entire supply chain to redouble exclusion of antisocial groups.
Establishment of Employee Consultation Hot-Line Center (Internal Reporting System)
Kyocera Group employees can consult the Employee Consultation Hot-Line Center on a diverse range of issues. Employees can seek advice and consultation, as well as report actions that are or may be in violation of laws and internal regulations relating to human rights, labor, safety and health, environment, fair business practices, etc. Measures for protection of individual privacy are clarified, and employees can consult the Hot-Line Center directly by telephone, e-mail or other means. Details of the consultation are investigated and ascertained in cooperation with the relevant divisions. This is followed by corrective action and preventive measures against recurrence. At Kyocera, consultations were undertaken on 49 matters in FY2019, and steps toward resolution were taken in each case.

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