Compliance | Governance | Sustainability | GUNZE LIMITED

Policy and Basic Approach The Gunze Group places its founding principle “Based on respect for humanity and the production of high-quality goods, we strive for coexistence and mutual prosperity with all stakeholders surrounding the company” at the core of its compliance efforts.

We have established the “Gunze Group Activity Guidelines,” which clearly and specifically outlines the rules employees must follow, promoting understanding among Group employees and ensuring thorough awareness of these rules.

GUNZE ACTIVITY GUIDELINES

Goals and Achievements For the number of reports and consultations received by the internal “Advice Hotline” and the reporting hotline staffed by attorneys, please refer to the following page.

More details

System Our internal whistleblower “Advice Hotline” provides consultations regarding compliance and other issues and works to resolve them while taking into consideration the privacy of those involved.
Having also established an external whistleblower hotline staffed by outside attorneys, we have secured a route for attorneys to report directly to corporate auditors in the event of a report that falls under the category of public interest whistleblowing.

Initiatives The Gunze Group has created an internal Advice Hotline designed to quickly identify the causes of industrial accidents, misconduct, harassment, and other compliance violations and respond appropriately. The Group has also established an external whistleblower hotline that is staffed by outside attorneys. To communicate the Group’s basic compliance policy throughout the Group, we publish messages from top management on the intranet and by displaying posters. We have revised our internal regulations to inform all employees about the availability of hotlines and encourage its use.

In FY2022, we began holding hybrid training programs for new employees consisting of e-learning and in-person training conducted by lecturers from Legal & Compliance. In addition to sharing Gunze’s sense of ethics, we now hold follow-up training with the aim of deepening understanding of insider trading regulations and of cautionary points regarding social media use, which is essential knowledge regardless of department or area of responsibility. To coincide with the enforcement of the Amendments to the Act for Eliminating Discrimination against Persons with Disabilities, we also conducted training on the appropriate considerations that the Gunze Group should take, so that all customers who use Group-operated stores and facilities can continue to use them with peace of mind.

A large number of technical trainees are working within the apparel business. More than 90% of these trainees are from Vietnam or Indonesia. In consideration of this, we established consultation desks where these trainees can receive assistance in Vietnamese and Indonesian in FY2024. To resolve problems, these consultation desks promptly and fairly investigate reports submitted by trainees and ensure the privacy of the trainees. We are translating the employment regulations for technical trainees to ensure they can work with peace of mind. Some plants already have the Vietnamese-language version of the employment regulations.

Education and Awareness Activities

Lectures provided by members of the Intellectual Property/Legal Department during in-house training programs

The Intellectual Property/Legal Department provides training regarding laws, including the Subcontractor Payment Act, Anti-monopoly Act, Act against Unjustifiable Premiums and Misleading Representations, New Freelance Act, and Product Liability Act. It also provides training on how to read patent documents and key considerations when filing patent applications. Guided by the mottos “Everyone is an instructor” and “Leaning by teaching,” department members who aspire to become experts in their fields lead these training programs as instructors. Employees can participate in training either in-person or remotely. If they are unable to attend training due to work commitments, they can watch training videos available on the intranet. In FY2024, a total of 582 employees participated in the Intellectual Property/Legal Department’s training programs.

Establishing the Tax Policy

Gunze Group Tax Policy The Gunze Group contributes to society by intertwining the founding principles of "respect for humanity," "production of quality goods," and "mutual prosperity" as the warp. We respond flexibly and sincerely to societal expectations by practicing our corporate philosophy as the weft.
The Gunze Group conducts business activities in various countries and regions. Therefore, our fundamental policy is to comply with applicable tax laws and international tax rules in each country and region, ensuring proper tax payment. We will contribute to the development of each country and region while fulfilling our social responsibilities.

1. Tax Compliance
The Gunze Group has "Gunze Activity Guidelines", which states that we at Gunze endeavor to contribute to society through its corporate activities and to fulfill its responsibility as a corporate citizen and that we determined to promote activities in conformance with fair and internationally accepted rules.
We comply with the law and have high ethical standards, and will not condone antisocial or illegal behavior.
We do not plan into tax avoidance structures outside of our normal business operations.

2. Shareholder engagement
To optimize tax expense and improve shareholder value, we aim to consider and implement effective tax planning such as preventing double taxation and utilizing tax incentives in line with the substantive business operations.

3. Transfer Pricing
Our group conducts transactions with foreign affiliates in accordance with the OECD Transfer Pricing Guidelines. We apply arm's length pricing based on each country's transfer pricing regulations and strive for appropriate income allocation. We also prepare transfer pricing documentation according to each country's regulations.

4. Relationship with tax authorities
The Gunze Group strives to have healthy relationships with tax authorities by providing information timely and appropriately in response to requests from tax authorities.
In the event that we receive instructions from tax authorities, we will clarify the cause of such issues, take appropriate corrective measures and strive to prevent recurrence.