Risk Management System

Grievance Handling Process

For the grievance handling process aimed at eliminating negative impacts, Daejoo Electronic Materials operates the Labor-Management Council, the Grievance Committee, and a blind noticeboard. Grievances reported through the noticeboard are handled by the Grievance Committee within ten days. Some of the reports are submitted for discussion to the HR Management Committee.
In addition, through the Grievance Committee meetings, the grievance handling procedures are inspected, and company-wide dissemination training is conducted. To monitor the process efficiency and collect feedback, a company-wide briefing is conducted, with opinions collected through the blind noticeboard.

Grievance Reports Received and Handled

Tax Risk Management

Tax Governance, Control and Risk Management

Daejoo Electronic Materials faithfully performs the duties of tax report and payment in a number of countries. All employees handling tax-related operations comply with the law and regulations according to the tax policy, and conduct operations by following the principle of maintaining transparent relationships with each country and their tax authorities. Actively responding to the changing tax policies, we observe the law and regulations in the countries where we are based; we do not transfer our income to a tax haven or a country with low tax rate. We cautiously evaluate and review tax risks that can occur in each country through a dedicated division and make decisions based on the results. When necessary, we work with external experts to identify the unexpected risks and improve on the identified risks. We comply with all statutes, prepare and store legal proofs for all transactions, meet the tax report and payment time limits by maintaining transparent relationships with local tax authorities, and faithfully provide transaction-related information. For key tax items, we fulfill our duty of reporting following reviews by internal and external experts. In addition, for international trade, we apply normal prices to the international transfer pricing to prevent international tax risks.

Stakeholder Engagement and Management of Concerns Related to Tax

Daejoo Electronic Materials places great importance on stakeholder engagement and responds to concerns related to tax in a transparent, reliable manner. We actively communicate with various stakeholders including shareholders, customers, employees, and local community to discuss tax policies and related issues. Especially for critical concerns related to tax, we conduct regular disclosures. In addition, we provide detailed explanations and feedback, if necessary, by holding meetings with stakeholders. To minimize tax risks, we comply with the latest tax law and regulations through cooperation with external experts, and we are building a system for swift response to the changing tax environment. All our tax-related activities are performed consistently with the ethics regulations, and a strict internal control system is maintained to prevent illegal tax avoidance. In doing so, we are strengthening stakeholder trust and fulfilling our responsibilities as a company pursuing sustainable growth.

Stakeholder Engagement and Management of Concerns Related to Tax

The Political Funds Act prohibits enterprises from supporting payments to political organizations. Daejoo Electronic Materials strictly abides by the Political Funds Act.

Tax Risk Management - Tax Approach

Internal Control over Financial Reporting (ICFR)

Since 2003, Daejoo Electronic Materials has operated the ICFR system to enhance further the transparency of corporate operation and accounting integrity. We design and carry out control activities based on the Act on External Audit of Stock Companies and conceptual system of ICFR design as well as operation, assessment, and reporting and best practice guideline for ICFR. In addition, we annually conduct a company-wide control assessment in the categories of sales management, HR management, production, inventory, cost, fixed assets, fund, accounting and settlement, tax, general IT control, etc.

ICFR System Assessment Result

In 2023, Daejoo Electronic Materials assessed the ICFR system to determine whether or not the control activities of all assessment targets are being performed according to the internal regulations. The result indicated no insufficiencies. Sejonjin Accounting Corporation, an external accounting audit agency, yielded the result “appropriate,” indicating that the Company’s ICFR system is being prescribed and controlled effectively as of end of December 2023.

Tax Policy

It is a corporate social responsibility to comply with the tax law and faithfully perform various tax payment duties in transactions with customers. While carrying out business activities in Korea and abroad, Daejoo Electronic Materials faithfully performs the duties of tax report and payment by complying with the regulations of the respective countries. We conduct prior reviews for various tax-related issues that can occur in the course of management activities. For important matters, our regulations stipulate their submission to the CEO for approval.

Tax Risk Management

Daejoo Electronic Materials undergoes tax reviews before making important decisions in order to prevent and minimize risks that can occur in the course of business transactions. In case the interpretation of a tax-related law is unclear in relation to important matters, we seek advice from an accounting firm or an external tax expert to derive an optimal tax risk response plan.

Disclosure of Tax Payment Details

Daejoo Electronic Materials provides the income tax-related information by disclosing audit reports in the Data Analysis, Retrieval and Transfer (DART) system of the Financial Supervisory Service. The audit reports and their footnotes specify the base for income tax expense calculation, deferred income tax assets and liabilities, details of income tax expense composition, etc.

Government Citation for Faithful Tax Payment

In 2023, Daejoo Electronic Materials received the Award of the Korea Customs Service Commissioner for the excellent performance in the payment of customs duties and cooperation with the Korea Customs Service recognized. Moving forward, we will continue cooperating with the government and dedicating effort for transparent tax performance.