LY Corporation establishes the LY Corporation Group Code of Conduct to be observed by all officers and employees, and actively conducts measures to prevent corruptions such as bribery, as well as measures to prevent money laundering.
The LY Corporation Group values the importance of aspiring to achieve a safe and sustainable Internet society through the trust entrusted and its harmony with the society. In addition, the LY Corporation Group is committed to act with the spirit of fair play and to fulfill its social responsibility. To this end, the Board of Directors of LY Corporation (the "Company") has established the LY Corporation Group Basic Policy on Anti-Bribery, Etc. that outlines the overall policy of the Group with regard to anti-bribery, etc., referring to laws, regulations, and guidelines applicable to the countries and regions in which the Group operates. This basic policy is disseminated to all officers and employees of the Group.
As it is generally understood that bribery can take many forms, the LY Corporation Group Basic Policy on Anti-Bribery, Etc. not only prohibits bribery, but also requires compliance with relevant rules and regulations, including internal regulations as well as laws and ordinances, regarding various matters. These include business entertainment and gifts to public officials and private sector business partners, etc., along with travel expenses, donations, support and sponsorships, and other matters. In order to establish a structure to promote the Basic Policy and regularly audit its compliance, the Group appropriately operates a system of self-inspection and internal auditing with respect to the status of compliance, according to the degree of risk.
As particularly high-risk situations, the Basic Policy stipulates that the Group will pay special attention to the provision of entertainment or gifts to public servants, etc., political donations, and political funds, and that bribery through third parties such as agents, consultants, distributors, and subcontractors will not be tolerated or condoned. For business partners and suppliers, the Company has established the Evaluation Criteria for Business Partners and Suppliers in its Basic Policy on Procurement and asks its business partners and suppliers to be proactive in their efforts to ensure that they do not engage in any form of bribery.
In the event that any violation or potential violation of the LY Corporation Group Basic Policy on Anti-Bribery, Etc. and rules or regulations related to anti-corruption is discovered, the Group will conduct a rigorous internal investigation and cooperate fully with investigations by the relevant authorities, etc.
In addition, to further ensure the effectivity of the Group's efforts related to anti-bribery, etc,, the LY Corporation Group disseminates messages from top management regarding compliance and conducts compliance training to inform and educate employees about bribery practices. The Group also informs employees of the internal reporting desks, where anonymous reporting is possible.
The information contained herein is current as of September 30, 2023.
*Z Holdings Corporation, Yahoo Japan Corporation, ("Yahoo Japan") and LINE Corporation ("LINE") consider digital transformation as an important theme and participate in the political fundraising parties of politicians who promote these policies, ensuring that the participations comply with the Political Funds Control Law.
The LY Corporation Group, based on its Basic Policy on Anti-Money Laundering and Combating the Financing of Terrorism will not be involved in transactions related to the proceeds derived from illegal acts, transactions that fund terrorists, and transactions with counterparties with whom transaction is prohibited by the government of each country, etc.
To this end, the LY Corporation Group has built systems to manage customer identification and reporting of suspicious transactions based on the Act on Prevention of Transfer of Criminal Proceeds, and endeavors to prevent abuse of financial services in organizational crimes. Moreover, for Group companies to which the Act on Prevention of Transfer of Criminal Proceeds applies (PayPay Bank, PayPay, PayPay Card, LINE Pay, LINE Securities, etc.), the Group strengthens its efforts to prevent money laundering and terrorist financing based on the measures required by laws, regulations and guidelines.
For example, PayPay Bank, a group company of the LY Corporation, verifies identity of a user opening an account by requiring users to submit designated identity verification materials as well as by sending the transaction documents (cash cards, etc.) to the registered address by registered mail. Furthermore, PayPay Bank strictly confirms the details of the application, and if circumstances so require, requires additional verification materials or denies the opening of the account, etc. In addition, opened accounts are continuously monitored for their transactions by specialized divisions to prevent unauthorized use.
With PayPay, accounts can be registered using a phone number and an authentication code. Identity authentication ("eKYC" using Individual Number Card (My Number Card) or driver's license) is required when registering a bank account with PayPay. With LINE Pay, accounts can be opened using a phone number and password. "eKYC" or JPKI (Japanese Public Key Infrastructure) based on the Ordinance for Enforcement of the Act on Prevention of Transfer of Criminal Proceeds is used for identity authentication when registering a bank account with LINE Pay. The details of the application are strictly confirmed, and account openings are denied depending on circumstances. Furthermore, risks are mitigated through measures such as setting an original upper limit on usage. In addition, opened accounts are continuously monitored for their transactions by specialized divisions to prevent unauthorized use.
At PayPay Card Corporation, a group company of the LY Corporation, PayPay Cards can only be used through measures such as confirming the user as the person who made the application by requiring users to show their identity verification materials with a photo before the credit cards are issued following the application. For cases in which unauthorized use, etc. can be suspected at screening, additional hearings, etc. are made. Even after a card is issued, a specialized department continuously monitors credit card usage to prevent unauthorized use.
Audits are continuously conducted for Group companies to which the Act on Prevention of Transfer of Criminal Proceeds applies, to ensure the effectiveness of measures to prevent money laundering and terrorist financing.
Under the LY Corporation Group Code of Conduct, the Group upholds the principle of conducting business operations with the spirit of fair play under free and fair competition.
LY Corporation stipulates this in their internal regulations, in line with the Subcontract Act, Intellectual Property Acts, and Unfair Competition Prevention Act. Also, measures to raise the awareness are taken to forestall unfair restraints of trade and unfair trade methods that are subject to control under the Antimonopoly Act.
With respect to the Subcontract Act, an emphasis is placed on raising the awareness against acts that harm the interests of subcontractors. To convey the fundamental purpose of the Subcontract Act, which is to ensure fair subcontracting transactions and to protect the interests of subcontractors, specific problematic examples that may constitute incompliance with the law, such as reducing the subcontract proceeds or changing details of the payment arrangement without due reasons, are explained.
In addition, intellectual properties rights, such as those protected under the Patent Act, Trademark Act, and Copyright Act, and trade secrets protected under the Unfair Competition Prevention Act, are clearly expressed as extremely important to the Group's business. Along with this, rules are stipulated to urge respect for, and not to violate, intellectual property rights of business partners and third parties.
LY Corporation stipulates in its internal regulations the guidelines and procedures relating to acts of conflict of interest (acts that create conflict of interests between the Company and its employees) so that employees are able to make the right decision and take the right course of action when confronted by such a situation.
The regulations prohibit acts of competition contrary to the business interests of LY Corporation, stipulate that employees are obliged to notify their superior in advance of any act of trade that may possibly conflict with the Company's interest, and that the superior who is notified must take necessary actions to prevent conflict of interests between the Company and the said employee.
In addition to aiming to solve social issues through its business and contributing to the creation of new value in the Internet industry, the LY Corporation Group believes that it is necessary to appropriately return profits from its business activities to its various stakeholders for the development of Japan and the regions where the Group is based.
With regard to tax payment, which is one of the most basic and important social responsibilities, the LY Corporation Group ensures tax transparency, addresses international tax compliance such as the BEPS Action Plan, complies with tax-related laws and international laws in all countries and regions where it operates, and makes appropriate tax payments to the countries and regions in line with the intent of each law.
The amount of corporate income tax in the consolidated profit and income statement for fiscal 2022 amounted to JPY 46,055 million.
The LY Corporation Group maintains fair and equitable transactions both in Japan and overseas, reduces tax risks through appropriate and reasonable tax planning, and fulfills its responsibilities as a tax payer. The CFO (Chief Financial Officer) is responsible for managing the Group's tax practices and policy for handling the issue. Tax risks are examined by periodically seeking advice from external advisors. With respect to the Group's international transactions, the Group has put the following systems in place to ensure appropriate practices relating to transfer pricing taxation and tax havens.
The Group carries out the Group's international transactions in compliance with laws and regulations of each country and responds appropriately when revisions are made in taxation systems. To reduce tax risks, the Group examines the rationality of the Group's international transactions and documents such transactions. It also monitors investments in low-tax countries and has a system in place for appropriate tax declaration.
The LY Corporation Group does not engage in tax planning intended for tax avoidance, such as the use of tax havens by business entities with no business purposes or substance. When the Group makes investments in low-tax countries, or when the tax rates are reduced as a result of revisions in the laws and regulations in the countries and regions where the Group operates, it assesses whether or not anti-tax haven taxation is applicable in accordance with the laws and regulations of each country. As a result, if the controlled foreign corporation rules apply, the Group appropriately files tax returns and makes tax payments.
(JPY Million)
| Countries/Regions | Names of companies | Main businesses | Revenue | Income before income taxes | Income tax expense(excluding tax effect) | Income taxes paid | Number of employees |
|---|---|---|---|---|---|---|---|
| Japan | Refer to the table below | 1,603,491 | 247,091 | 75,881 | 99,671 | 23,424 | |
| Others*1,*2 | 68,886 | -11,872 | 6,830 | 9,893 | 4,961 | ||
| Amount on the consolidated financial statements | 1,672,377 | 235,219 | 82,711 | 109,564 | 28,385 | ||
Countries/Regions
Based on the consolidated financial statements for FY2022
*1 Includes results for locations other than Japan, and consolidation adjustments
*2 Covers corporations located in locations other than Japan
| Names of companies | Main businesses |
|---|---|
Japan
etc. |
|
Other
etc. |
Names of companies and main businesses
To appropriately address various issues surrounding digital platform operators and fulfill social responsibilities, LY Corporation and the Group companies hold various expert panels to incorporate the opinions of experts from a variety of fields and sincerely consider issues while ensuring fairness and objectivity.