JVC 2010 Annual Report Download - page 26

JVC KENWOOD Holdings, Inc.
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We believe that if the Companyʼs corporate value or shareholdersʼ
interest could be harmed due to the acquisition of its shares by a
specific person or group, the Company needs to take substantial
measures to raise corporate value and secure shareholdersʼ interests
to the extent permitted by laws, regulations, and the Companyʼs
Articles of Incorporation. JVC Kenwood, of course, recognizes the
importance of increasing corporate value and securing shareholdersʼ
interests, and continues to carefully study takeover defense measures.
However, we have not introduced any specific measures so far.i
During the consolidated fiscal year under review, JVC Kenwood
established an investigation committee including outside experts
(hereinafter, “Investigation Committee”) and conducted an
investigation into losses with respect to JVC. The results of the
investigation by the Investigation Committee revealed inappropriate
accounting adopted by JVC during the period between the fiscal year
ended March 31, 2005, which was prior to the establishment of JVC
Kenwood on October 1, 2008, and the second quarter of the fiscal
year ended March 31, 2010. It also indicated that the inappropriate
accounting had a total impact of approximately 17.1 billion yen in
losses. Pursuant to the Financial Instruments and Exchange Law, the
JVC Kenwood Group adjusted the earnings results of JVC for the
period between the fiscal year ended March 31, 2005 and the second
quarter of the fiscal year ended March 31, 2010 and those of JVC
Kenwood for the period from its establishment on October 1, 2008
through to the second quarter of the fiscal year ended March 31,
2010.
The Company, having seriously acknowledged the results of the
investigation conducted by the Investigation Committee, thoroughly
validated and examined the background and causes that led to the
inappropriate accounting treatment. Furthermore, in response to the
suggestion of the committee, we have formulated fundamental
measures.
■ Establishment of a management structure and
internal control system to improve the Groupʼs
corporate culture
1. By establishing “Standards for Decision-Making and
Authorities/List of Decision-Making Matters” and ensuring that
the contents are thoroughly communicated within the JVC
Kenwood Group, reconfirm awareness within the entire Group
of a system that maintains a board of directors with the
authority to decide important management matters.
2. Establish the “JVC Kenwood Group Code of Conduct on
Compliance” (hereinafter “Code of Conduct”) that specifically
outlines common values and ethical views to be shared by
directors, auditors, executive officers, and employees of the
JVC Kenwood Group for taking sincere and appropriate
actions, and ensure strict adherence to the Code of Conduct.
In addition, emphasize that securing compliance is the most
important issue under the management policy and provide
education on compliance as part of the management
education program.
3. Ensure that all parties within the JVC Kenwood Group are well
aware of the internal whistle-blowing rules, which stipulate
the reporting of any acts that deviate from the Code of
Conduct and define procedures for corrective action. Also,
ensure that the whistle-blowing system is operated so that a
person reporting a problem is not treated unfairly.
Formulation of Measures to Prevent
Recurrence
Takeover Defense
Corporate Governance