Basic Concept and Promotion System

The JVCKENWOOD Group understands that compliance requires companies to go beyond simply observing laws and regulations and to also address issues of great public concern stemming from rapid changes that have yet to be dealt with in legislation. Based on this basic concept, the Compliance Committee headed by the CEO and the Internal Governance Group under the Legal & Compliance Office are leading company-wide efforts aimed at ensuring full compliance in keeping with the JVCKENWOOD Group Compliance Code of Conduct.

Compliance Code of Conduct

The JVCKENWOOD Group Compliance Code of Conduct (established in March 2010) has been promulgated among all executives and employees within the Group through pamphlets (available in three languages) and an Intranet site. Employees at affiliate companies under the Group’s purview are being familiarized with the Standards by Compliance Officers selected by the Board of Directors.

The Internal Governance Group under the Legal & Compliance Office check the status of compliance with the JVCKENWOOD Group Compliance Code of Conduct from time to time, reporting the results to the Board of Directors every fiscal year, and respond to inquiries from employees and others.

Specific Initiatives to Promote Compliance

Comply with Compliance Code of Conduct

The JVCKENWOOD Group has established a system for monitoring the compliance status of the entire Group’s compliance standards through the Compliance Committee and the Internal Governance Group under the Legal & Compliance Office, and annually reviews the effectiveness of the compliance standards based on the status of revisions to relevant laws and regulations. To prevent compliance violations, we have installed a whistleblowing system and conducted compliance training to foster awareness of compliance throughout the Group. Deviation from the Compliance Code of Conduct, corruption, violations of legislation and corporate ethics are reported through the whistleblowing system. In the event that a report of a compliance violation is made to one of the whistle-blowing systems, or if a concern about such a violation arises, the whistle-blowing system contact and the relevant department will confirm the facts of the report. If the report is found to be a compliance problem, the Compliance Committee will examine the details closely, take appropriate corrective measures according to the content of the violation. Corrective measures are reported to the whistleblower, the name of the person concerned is not disclosed, and only the content is disseminated within the company to prevent the recurrence of similar cases. In FY2022, there were four reported cases of legal and compliance violations, and all cases were discussed and dealt with strictly by the Compliance Committee. In addition to issuing strict warning to the subject person to change perception, we also conducted trainings on related category to raise awareness throughout the company to increase recognition of it as a fraud risk and prevent its recurrence.

JVCKENWOOD Group Tax Policy (June 2024)

The JVCKENWOOD Group shares its philosophy of "Creating excitement and peace of mind for the people of the world" as the fundamental belief of the corporate behavior. Based on this shared philosophy, we are committed to achieving sustainable growth and medium- to long-term improvement of corporate value by ensuring high levels of profitability and fulfilling our corporate social responsibility. We believe this is achieved through compliance with laws, regulations, corporate policies, social customs, and sound corporate ethics.

1. Basic Policy on Tax

The JVCKENWOOD Group is committed to making correct tax payments by complying with the tax laws of each country and other tax guidelines published by international organizations such as the Organization for Economic Co-operation and Development (OECD). In addition, we do not undertake the application of preferential tax treatment based on any interpretations which deviate from the legislative intent of laws and regulations. We do not intentionally undertake the avoidance of taxes in a manner entailing the absence of substance in terms of businesses, nor do we undertake any tax planning of an abusive nature which deploys the usage of tax havens.

2. Tax Governance

The JVCKENWOOD Group's tax governance is governed by the Company's director in charge of finance. The Company's department in charge of taxes undertakes the processing, reviewing, reporting, and managing of tax-related matters. With this structure in place, we also incorporate the opinions of external experts for matters which involve higher levels of expertise. In order to raise awareness of tax compliance at the Group companies, we are committed to promoting in-house training and awareness-building activities concerning appropriate accounting and tax processing, as well as the promoting efforts to establish systems for tax consultations to take place.

3. Tax Planning

The JVCKENWOOD Group actively leverages the tax breaks available in each country to maximize shareholder value in the context of business activities undertaken by the Group across the globe. However, as stated in the basic policy, we do not engage in tax avoidance activities which deviate from the laws and regulations established in each country. Furthermore, with a full understanding of the taxation approaches in the tax systems, such as the Global Anti-Base Erosion Rules (GloBE), international rules regarding global minimum taxation that is set to be enforced in the future, we will ensure that we file appropriate tax returns and make tax payments accordingly when such approaches are applicable.

4. Tax Risk Reduction and Monitoring

Through regular monitoring, exchange of information, and various reporting on the state of execution of tax-related matters of Group companies, we gain an understanding of the tax risks involved, make corrections as necessary, and provide operational support. We also strive to ascertain risks in advance and are working to reduce tax risks by taking measures before risks emerge, by having advice provided by external experts, by undertaking confirmations with tax authorities, and by undertaking other such efforts.

Anti-corruption initiatives

Under the supervision of the Board of Directors, the JVCKENWOOD Group clearly states in the JVCKENWOOD Group Compliance Code of Conduct and its internal rules that it prohibits all forms of bribery and corruption and that no illegal or inappropriate means should be employed that may be used to influence the actions of others. The Group complies with anti-corruption laws and regulations and prohibits bribery and inappropriate benefits such as gifts and entertainment that are contrary to laws, regulations, and social conventions. To prevent corruption such as bribery and facilitation payments, we conduct compliance training, e-learning, and information dissemination via the intranet to raise awareness of anti-corruption measures.

The Compliance Committee looks into major incidents of noncompliance, such as bribery and corruption, and discusses measures to prevent their recurrence. All incidents of misconduct, including bribery and corruption, are reported to the Board of Directors. There were no legal actions related to corruption taken against us in 2022.

We also place importance on ensuring transparency of our corporate activities, and will continue to disclose information, including donations to specific political parties and organizations (political donations made in FY2022: 0 yen).

Anti-harassment Initiatives

Since June 2020, the "Labor Measures Comprehensive Promotion Act" (Act on Comprehensive Promotion of Labor Measures, Stabilization of Employment of Employees and Enrichment of Their Working Lives, etc.) has been enforced. In order to raise awareness within the company, we conduct harassment training for employees and disseminate information via the intranet.

Internal whistleblower system

The JVCKENWOOD Group has two whistleblower systems (a JVCKENWOOD Helpline (“Helpline”) established in the Legal & Compliance Office and an auditing informer system established in the Audit & Supervisory Board Office) for use by all executives and employees
(including contract employees) anonymously. The Helpline consists telephone helpline and an online reporting system, operated by an external whistleblowing service company, which acts as a third-party contact. (services are available in Japanese, English, Chinese and Korean)

Any concerns about corporate ethics in general and compliance, such as human rights violations, harassment, and all forms of corruption (embezzlement, bribery, etc.) are directly reported to the Helpline based on Internal Reporting Rules, and corrective measures will be taken under the leadership of the Compliance Committee. Misconduct by officers is reported directly to the auditing informer system and appropriate action is taken. Both systems employ a dedicated communications system run by selected personnel to protect the whistleblower’s name and maintain the confidentiality of the report. We will continue using both systems to detect and rectify compliance violations (behaviors that deviate from social norms) as early as possible.

Compliance training

Education on compliance is principally the responsibility of the Internal Governance Office under the Legal & Compliance Office, which endeavors under the CEO’s guidance to thoroughly inform all executives and employees including those of 28 overseas group companies on compliance matters in order to construct a robust compliance structure. New employees are provided with training in face-to-face sessions while other employees are provided with regular training through e-learning. We also conduct an employee’s survey to check the level of compliance awareness and understanding of the Code of Conduct, and gather opinions on compliance activities. In the survey in 2022, 4,350 employees, a record number exceeding FY2021, responded to the survey, confirming that their awareness of compliance has been increasing.

Compliance Officers conduct annual training for division heads under their direct supervision and other executives. The training is on the topics covered by the Compliance Activity Standards and other related regulations as well as on the prohibition against facilitation payments and bribery of foreign officials, prevention of corruption, such as giving or accepting excessive gifts, unfair competition, corporate scandals and the whistleblower system. Approximately 8,100 executives and employees took part in compliance training during FY2022.

In addition, for the purpose of raising awareness of compliance, we have been distributing an e-mail magazine about compliance to employees once a month since FY2018, and posting and updating compliance-related content on the Intranet. The newsletter also includes compliances news and easy-to-understand explanations of compliance violations that have occurred around the world. It also features columns and case studies to raise awareness of the importance of compliance. Furthermore, we have regularly post compliance-related content to our intranet.

The Board of Auditors’ Commitment on Compliance

At JVCKENWOOD, the Board of Corporate Auditors is responsible for the management audit function, including the detection of fraud, evaluation of internal controls, and monitoring legal compliance. The term of office of corporate auditors is stipulated as four years by the Companies Act, and they are periodically rotated when their terms of office expire. Corporate auditors conduct fair and impartial audits from an independent standpoint.