Nikkiso Group Global Code of Conduct
I General Provisions This Nikkiso Group Global Code of Conduct (the “GCC”) shall set internal standards of the highest level with respect to compliance. The GCC provides the basic rules that we must observe to enable us to follow our conscience and to contribute to society as corporate citizens.
II Basic Policy We will obey the laws, regulations, our articles of incorporation, the social norms and the GCC (“laws/GCC”) in all of our business and other activities. In the event we detect a potential violation within the scope of the laws/GCC we will not condone such conduct, but will take the necessary action to deal with it.
III Scope The GCC applies to Nikkiso Co., Ltd, (“Nikkiso”) and its group of companies (meaning the companies in which Nikkiso holds, directly or indirectly, a majority of outstanding voting shares or equity, or companies that Nikkiso substantially controls; collectively the “Nikkiso Group”), and their officers and employees (including the members of the board of directors, auditors, directors, executive officers, corporate advisors, and employees (including non-regular employees, seconded personnel, part-time employees, temporary workers, and dispatched workers).
IV Code of Conduct
1. Fair and honest business activities
(1) Free competition
• We will not enter into an agreement with any third party that interferes with the market mechanisms, including price fixing, dividing territories, and restricting the supply of products.
• We will not take advantage of our position in a transaction to force unreasonable terms and conditions on our business partners.
(2) Fair transactions
• We will select our business partners based on price, quality, delivery term, and other objective criteria in the procurement of products and services.
• We will endeavor to maintain and improve mutual understanding and trusting relationships with our customers and business partners from a long-term perspective.
(3) Quality and safety of products and services
• We will provide products and services with high quality and safety.
• We will confirm the facts promptly and take appropriate action, in the event the quality or safety of our products and services is brought into question.
(4) Gift-giving and entertainment
• We will not offer entertainment or gifts to employees who are in public service, such as government employees and local authorities, and foreign public service personnel.
• We will not offer the entertainment or gifts to our customers or business partners (including potential customers or business partners) beyond the range acceptable in terms of the law, customary practice, or business courtesy; we will not receive entertainment or gifts beyond that range.
(5) Export control
• We will observe the export control laws and regulations of each country (including the US Export Administration Regulations) in the exporting of goods and their related technologies, and prevent any unlawful action.
• We will not participate in exports that may obstruct the maintenance regulation of each country and region in which we operate, and by implementing appropriate tax risk management controls. The details of the tax standard of conduct are specified separately in the “Nikkiso Group Global Tax Standard of Conduct”.
(6) Disclosure and dissemination of corporate information
• We will disclose corporate information according to the requirements of the law, value dialogues with our stakeholders, and strengthen two-way communication with society.
• We will endeavor to disseminate accurate corporate information while giving consideration to the need for confidentiality.
(7) Prohibition of insider trading
• We will not disclose the insider information of the Nikkiso Group or other companies that we come to know during the course of our work to any persons other than those who need to know for the purpose of business, and will control such information in a proper manner.
• We will not purchase or sell shares of Nikkiso or other companies using the insider information pertaining to these companies.
(8) Tax Compliance Efforts
• We will maintain and improve our tax compliance efforts and fulfill our social responsibilities by, among other things, paying all taxes in accordance with the law and regulation of each country and region in which we operate, and by implementing appropriate tax risk management controls. The details of the tax standard of conduct are specified separately in the “Nikkiso Group Global Tax Standard of Conduct”.
2. Protection of corporate assets and management of information
(1) Corporate assets
• We will make efficient use of the assets of the Nikkiso Group for our business activities while protecting them against loss, theft, and destruction.
• We will not use any assets of the Nikkiso Group for any purpose other than our business.
(2) Conflicts of interest
• We will carry out our business activities by making judgments that are in the best interests of the Nikkiso Group.
• We will not engage in any act that is, or may be, in conflict with the interests of the Nikkiso Group.
(3) Intellectual property
• We will promote research and development activities through the protection and application of the intellectual property rights of the Nikkiso Group.
• We will not make unauthorized use of or infringe upon the intellectual property rights of a third party.
(4) Records and reporting
• We will prepare records and reports regarding business activities, including accounting and finance, accurately and in a timely manner.
• We will not intentionally prepare false records or misleading reports.
(5) Confidential information
• We will not disclose or disseminate any information provided by our customers or business partners, or any confidential information of the Nikkiso Group, without due and proper authorization.
• We will use such information only to the extent our business requires it.
(6) Personal information
• We will respect the individual right to privacy.
• We will prevent leakage, loss, or damage of privacy and personal information by taking appropriate security measures.
3. Respect for human rights and harmony with environment
(1) Respect for human rights
• We will respect the rights of individuals, and will not force anyone to work against his/her will or employ child labor.
• We will not treat any person unfairly on the basis of race, nationality, religion, creed, gender, gender orientation, age, or disability in recruitment, employment, and promotion.
(2) Soundness of workplace
• We will encourage each other to improve the safety of the workplace and productivity.
• We will not commit any act that could create hostile human relationships, such as discriminatory behavior, sexual harassment, and power harassment.
(3) Conservation of environment
• We will promote the development, production, and sale of technologies and products that will contribute to the conservation of the environment.
• We will work to prevent global warming, to ensure the cyclic use of resources, and to protect the ecosystem. (Established on October 5, 2015) (Amended on December 4, 2017)
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Nikkiso Group Global Tax Standard of Conduct
I General Provisions This Nikkiso Group Global Tax Standard of Conduct (the “Global Tax Standard of Conduct”) sets our internal standards with respect to tax compliance. The Global Tax Standard of Conduct provides the basic rules that we must properly fulfill to meet our tax obligations and to provide appropriate tax transparency so that we can carry out our company’s social mission and responsibilities as a good corporate citizen.
II Basic Policy We will follow the Global Tax Standard of Conduct to maintain and improve our tax compliance efforts and fulfill our social responsibilities by, among other things, paying all taxes in accordance with the law and regulation of each country and region in which we operate, and by implementing appropriate tax risk management controls. We also understand that arbitrary avoidance of tax or the lack of tax compliance causes not only direct tax risk, such as tax litigation or penalty, but also reputational risk that could adversely affect the business of the Nikkiso Group as well as our stakeholders.
III Action Guideline
1. Tax Risk Management We will obey all relevant tax laws and regulations in the countries in which we conduct business. In addition, in accordance with BEPS (*1) action plans, we are working on revisions to our tax compliance processes, procedures and internal controls to take into account tax reform resulting from BEPS in Japan and other countries. With these efforts, we will seek to prevent deterioration of corporate value caused by additional taxation or taxation penalties. We are constantly striving to improve the knowledge and skills of our tax representatives to collect global tax information, to analyze and review the effects of existing and changed tax law and regulation, and to advise on appropriate actions and positions. We also will utilize outside tax experts when necessary or appropriate in order to receive additional advice and support.
*1 BEPS: BEPS (Base Erosion and Profit Shifting) is the international framework led by OECD/G20 to prevent cross-border tax avoidance activities.
2. Transfer Pricing We will obey the Transfer Pricing Guidelines published by the Organization for Economic Cooperation and Development (OECD) and all relevant tax laws and regulations. We will work to maintain arm’s length prices in the international transactions within the Nikkiso Group. We also will work to reduce the risk of double taxation subject to transfer pricing taxation and to properly fulfill our tax obligations in the countries and regions in which we conduct business. Moreover, we will prepare transfer pricing documentation in accordance with applicable tax law and regulation in these countries and regions.
3. Transparency for Tax compliance We strive to be transparent about our approach to tax compliance matters. We seek to disclose our tax compliance matters in a timely and highly transparent manner.
4. Tax Responsibilities and Tax Compliance Structure The Board of Directors has responsibility for all tax related operations. We will put in place a tax compliance structure based on our Internal Control Basic Policy.
5. Relationships with Tax Authorities We will work to build, maintain and enhance relationships of trust with the tax authorities in the countries and regions in which we conduct business by engaging with them in good faith and by filing our tax returns and making payments in a timely and appropriate manner. Moreover, when questions regarding taxes arise with respect to any member of the Nikkiso Group, we will refer the matter to the relevant tax authorities to resolve the issues, when necessary. (Established on December 4, 2017)
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