Compliance

In the LY Corporation Group Code of Conduct, the LY Corporation Group (the "Group") sets forth a code of conduct for its officers and employees in order to carry out its mission in good faith, and in turn, earn the trust of stakeholders and fulfill its corporate social responsibilities. To realize these guidelines, the Group works to promote the adoption of these rules among all officers and employees of the Group and enhance the compliance system.

LY Corporation Group Code of Conduct

The LY Corporation Group Code of Conduct is the code of conduct for all officers and employees of LY Corporation (the "Company") and its Group companies. The Group raises awareness of the Code of Conduct among its workforce and works to ensure that everyone complies with laws, regulations, and business ethics in their day-to-day duties.

To allow the Group to carry out its mission in good faith and both earn the trust of stakeholders and fulfill its social responsibilities, LY Corporation's Board of Directors approved the Code of Conduct to serve as the foundation for compliance activities. All business partners are also asked to respect the content of the Code of Conduct.

Compliance System

LY Corporation has established the Regulations on Compliance in accordance with its Basic Policy for Internal Control so as to promote the compliance system across the entire Group.

The Company established the Compliance Committee, which meets twice a year, as a body to oversee its compliance system in accordance with the Regulations on Compliance.
The Committee is chaired by the President and Representative Director (chief executive of compliance), and the members include the Chairperson and Representative Director (kaicho), the persons in charge (PIC) of the Corporate Administration Division, Legal Division, Compliance Division (PIC of the Company’s compliance operations), and Personnel Division. A full-time Audit and Supervisory Committee member also participates as an observer.
Along with approving and receiving progress reports on compliance activity plans, the Compliance Committee also collects reports on the status of the whistleblowing system and Group compliance initiatives, thereby working to develop a Group-wide compliance system and identify any issues.
The Board of Directors appropriately supervises Committee meetings by receiving reports on agenda from the PIC of compliance operations.

Collaboration with Group Companies

LY Corporation receives reports on the status of compliance systems from its subsidiaries and other affiliates twice a year in order to report the status of compliance activities at Group companies to the Compliance Committee.

Compliance managers from each Group company also meet once a year to share compliance-related information, brush up their skills, and hold discussions.

In addition, the Company strengthens collaboration with Group companies to maintain and improve the level of compliance throughout the Group: exchanging information with the compliance managers and providing them with a range of useful materials for compliance activities when needed.

Compliance Education

LY Corporation provides compliance training during onboarding for new hires as a key part of reinforcing compliance. Employees learn about how they should behave and increase their knowledge on the subject by going through worker guidelines, the main internal regulations, and other content.

The Company also ordinarily runs an e-learning compliance course every quarter for employees. The material covers the LY Corporation Group Code of Conduct to help everyone become better aware of and comply with the rules. Separate training for officers is also provided.

In addition to this, other departments also offer more specialized courses suited to their particular field (e.g., information security).

Whistleblowing System

To enhance integrity and the ability to self-regulate, the Group has set up a whistleblowing system in accordance with its Regulations on Whistleblowing. The system accepts reports on regulatory and compliance violations, which the relevant department will then investigate and respond to. Following this, they will decide on what disciplinary action to take based on the case (e.g., dismissal, demotion, a pay cut, or reprimand), act to prevent a reoccurrence, or take other necessary measures. They will also report these outcomes to the Compliance Committee and Board of Directors to contribute to planning for compliance activities.

The Group strives to ensure that whistleblowers are comfortable with using the whistleblowing system, with some of the measures it has taken listed below.

• Forbids the disadvantageous treatment of, retaliation against, or probing of whistleblowers
• Protects the confidentiality of the whistleblower and the details of their report
• Allows for anonymous reporting
• Allows for reports to be submitted to external lawyers who are independent of company management
• Allows for reports to be received 24 hours (although processing by personnel is done within normal business hours)
• Provides multilanguage support (Japanese, English, Korean)
• Publishes the number of whistleblower reports

There are two contact points for whistleblowers.
1) LY Corporation Group Whistleblowing Hotline: Officers and employees of LY Corporation and its Group companies (including anyone who has resigned in the past year) can make anonymous reports via this hotline. After an external lawyer receives a report, the PIC of whistleblowing at Group companies will investigate and respond to the case based on its nature.
2) Whistleblowing Hotline for Partners and Clients: Officers and employees at partner companies of the LY Corporation Group (including anyone who has resigned in the past year) can make reports via an online form on the Group's website (Whistleblowing Hotline for Partners and Clients). After an external lawyer receives the report, the PIC of whistleblowing at Group companies will investigate and respond to the case based on its nature.

In addition to the above, the Company provides information to its officers and employees on the internal Compliance Consultation Desk and how to submit a report directly to officers. Reports received through these routes may be investigated as a whistleblowing case.

By regularly posting on the intranet and running training courses to communicate the essentials of these systems, the Company continuously endeavors to spread awareness among its officers, employees, and business partners.