Compliance

Basic Policy

The Alps Alpine Group has established the Alps Alpine Group Code of Ethics (“the Group Code of Ethics,” hereafter) as a basic policy on compliance-related matters, based on its management stance set forth in its Corporate Vision. By promoting awareness of the Group Code of Ethics and conducting educational programs, we appeal to all organizations and employees within the Group to make an effort at all times to act responsibly and sensibly, aiming for fair management in keeping with the purpose of the law, social requirements, and corporate ethical standards. In this regard, we believe it is important to independently and proactively take appropriate action, having acquired an understanding of why those laws and rules are necessary—their purpose and significance. Furthermore, the Group Code of Ethics is provided on our corporate website.

System for Promoting Compliance

At the Alps Alpine Group, internal controls are established to ensure that management of Company and Group operations is carried out appropriately; that departments carry out self-evaluations (monitoring) of their own activities; and that the internal audit department carries out internal audits of the activities and operations of various departments, overseas affiliates, and other subsidiaries. For example, in regard to the management and use of grants and subsidies received from public agencies in Japan, Alps Alpine has established a set of regulations related to the management and use of such grants and subsidies and put in place a Companywide management structure with the president & CEO as the chief officer in charge and the managing vice president as supervising officer. Within each headquarters, where there are structures in place for promoting compliance, the compliance promotion representative for the headquarters—the head of the planning department—assigns compliance promotion officers and ensures that grants and subsidies are managed and used within the organization according to the regulations. As self-evaluations, each compliance promotion representative also regularly monitors the use of grants and subsidies within his or her headquarters and reports to the supervising officer and the internal audit department. In addition, the internal audit department regularly monitors the use of grants and subsidies Companywide and reports to the supervising officer and the chief officer in charge as well as to the Board of Directors.
To ensure early discovery and correction of misconduct or other compliance incidents, the persons in charge of facilities in Japan and at overseas affiliates are obliged to report any incidents when they occur to relevant Alps Alpine vice presidents and managing vice presidents as well as to the corporate planning and compliance departments. Important compliancerelated matters are reported to the Board of Directors.

Whistle-Blowing System

The Alps Alpine Group operates an internal whistle-blowing system that can be utilized in the event of violations of laws, internal rules, and other matters (including all types of harassment) for which the issue is deemed difficult to resolve through organizational lines. An Ethics Hotlines have been established at Alps Alpine and its major affiliates as an internal reporting system that functions independently of management in charge of business divisions.
In accordance with the Whistleblower Protection Act, Alps Alpine has established Ethics Hotline regulations with one full-time Audit and Supervisory Committee member, one outside Audit and Supervisory Committee member, and the head of the compliance department serving as direct points of contact for consultations. Based on these regulations, Alps Alpine works to strictly ensure the anonymity of whistle-blowers while protecting them from experiencing any form of unfair treatment or from suffering any disadvantages whatsoever as a result of reporting an incident. In the event of an action in violation of such prohibition on unfair treatment and confidentiality, the Company will take appropriate measures to restore any damages suffered by the whistle-blower while imposing strict disciplinary action on the party undertaking such prohibited acts in accordance with the Ethics Hotline regulations.
In regard to investigations, particular consideration is paid to maintaining confidentiality and ensuring anonymity with regard to the reporting party, and if reported activities are confirmed to be true, appropriate measures are taken.
Contact information for these reporting contact points is provided in the Company newsletter and on the bulletin board of the Company’s as well as in all training sessions, in an effort to promote awareness. In fiscal 2022, there were 31 cases involving the Ethics Hotlines in Japan.
In April 2023, Alps Alpine joined the Japan Center for Engagement and Remedy on Business and Human Rights (JaCER) for the purpose of establishing a contact point for external stakeholders. JaCER aims to establish a non-judicial platform for grievance redress and to act in a professional capacity to support and promote redress of grievances by member companies based on the United Nations Guiding Principles on Business and Human Rights. Alps Alpine listens to the opinions and advice of a wide range of stakeholders and works to strengthen compliance through cooperation with JaCER and other supporting organizations.

Monitoring of Ethical Standards

At Alps Alpine, a self-evaluation is held once a year and an internal audit is conducted once every three years, in principle, on ethical standards in each department and subsidiary, including overseas affiliates, in order to strengthen internal control functions. The audits are held in accordance with the Alps Alpine Group Code of Ethics to confirm the level of awareness of employees in regard to the Code of Ethics and the degree of receipt of compliance and CSR training throughout the Group as well as the status of compliance with anti-corruption and bribery policies.

Training

To improve understanding and awareness regarding compliance and CSR, each year the Alps Alpine Group conducts compliance and CSR training for directors and employees (including temporary employees in Japan) at its domestic and overseas facilities and subsidiaries, including overseas affiliates. In fiscal 2022, 97% of the Group’s directors and employees participated in the compliance and CSR training.

Anticorruption Initiatives

The Alps Alpine Group Code of Ethics defines the scope of the giving and receiving of gifts among clients, business partners, and public officials as well as the prevention of corruption and bribery, including the prohibition of conflicts of interest, embezzlement, and misappropriation. Through compliance and CSR training, the Company continues to educate and raise awareness among stakeholders regarding the prevention of corruption and bribery.
Moreover, because they are considered compliance violations, if the matter is determined to be factual, the appropriate actions will be taken while examining and conducting the measures necessary to prevent recurrence and subsequently reporting the details to the Board of Directors. Employees who engage in acts of corruption will be subject to disciplinary actions based on internal regulations.

Tax Policy

The Alps Alpine Group values the independence and autonomy of its Group companies while drawing on their close cooperation and collective strengths based on its Founding Spirit. The Group continues to “strive for fair management from a global perspective, which is achieved by strictly enforcing observance of the law, its corporate policies, societal customs, and good business ethics with the cooperation of all Group employees.”
In regard to our tax processes, our core principle is to fulfill our societal obligation to pay all taxes due in accordance with local tax laws, as well as not implementing any transactions or strategies for the principal purpose of reducing our tax liabilities.

1. Tax Governance

Responsibility over Alps Alpine’s tax governance lies with Vice President & CFO Satoshi Kodaira, whom the tax department reports to concerning tax reporting and management issues. Actual tax procedures are performed by the local tax departments that manage and report on tax matters. Further, the Company regularly reports to the Board of Directors regarding the status of foreign and domestic corporate tax payments. Equally, the CFO report tax issues such as tax audits and examinations to the Board of Directors on a case-by-case basis. For highly technical issues, such as transfer pricing audits, the Alps Alpine Group is assisted by external advisors.
Moreover, the amount of taxes deducted from the Company’s income before income taxes is as follows.

Fiscal year FY2018 FY2019 FY2020 FY2021 FY2022
Taxes deducted from income before income taxes (billions of yen) 120 179 66 132 138
Effective tax rate on income before income taxes (%) 29.2 115.4 132.1 34.4 51.6

2. Tax Planning

As the Company expands around the globe, in order to maximize value for its shareholders, it utilizes various favorable tax regimes in different jurisdictions, including the U.K. However, we do not do so with the intention of violating the purpose of any laws or engaging in tax avoidance.

3. Tax Risks

Decisions involving tax matters are made taking into consideration relevant tax risks and potential benefits to the specific facts and circumstances. Each case is therefore considered individually based on a conservative approach, without reference to any predetermined quantitative criteria or standards.

4. Tax Monitoring

In regard to the tax position in the various countries we operate in, our subsidiaries regularly report to the Alps Alpine tax department and the CFO on issues regarding the completion of tax returns, tax examinations and audits, and tax reform, of which the tax department is continuously monitoring.
Additionally, we have external tax advisors assisting in some particularly complex and specific tax compliance issues, such as transfer pricing compliance in the various countries in which we operate.