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Corporate Governance

F.tech, as a basis of the corporate governance, has a target to ensure the continuity of the company, boost its sustainable value and maximize the profit of the shareholders by way of respecting all stakeholders, including its employees, business partners, creditors and local communities. 

Basic Concept of Our Corporate Governance

F.tech, based on the company law in Japan, chooses the "Company with board of company auditors". The Board of Directors consists of nine (9) directors in total, including one (1) independent director and jointly overseeing and decision making as to the overall management of the company, conducting the maintenance and management of the internal control system in addition to making the decision of the important matters stipulated in the related laws and regulations in Japan. Further, for the purpose of enhancing the observation function of the Board of Directors and realizing the speedy decision making of the business affairs, our company also chooses the "Operating Officer System". The Board of Company Auditors consists of four (4) auditors in total including two (2) external auditors and as an independent organization of all the other sections, it forms Internal Audit Office and is situated directly under the president, which carries out the operational audit of F.tech as well as all F.tech subsidiaries in cooporation with the external accounting auditors in accordance with the related Japanese laws and ordinances.

Governance Chart

organization

Internal Control

The Internal Control System and Basic Principles

  F.tech has established "Company Principle", "Mission Statement" and "Our Action Guidelines" to create the pleasant business environment within F.tech and all F.tech subsidiaries. The basic principle of the internal control system are as described below.
Based on the above mentioned principle, F.tech always evaluates the maintenance and management situation, and if necessary, implements the appropriate improvement activities. The basic principle of the internal control system is also to be reviewed according to the changes in circumstances, thus we keep improving the effectiveness of maintenance and management of the internal control system.    

1. A system to ensure that the business activities by the directors and employees of F.tech and F.tech subsidiaries are in line with the related laws/regulations as well as the articles of incorporation.

    [1] In order to prevent the violation of laws and Articles of Incorporation, we laid down "Our Action Guidelines" and encourage the activity of compliance in F.tech and all F.tech subsidiaries.

    [2] F.tech has established a "Corporate Ethics Kaizen Window" so that the employees of F.tech as well as all F.tech subsidiaries can report/consult as to the dubious(or actual) violence against the related laws and ordinances, as well as the Articles of Incorporation and social ethics. Our company also holds the meeting of the Corporate Ethics Meeting consisting of the Directors periodically so that it enables to protect firstly such reporter(s) and decide the effective countermeasure if such matters cannot be solved within the related section(s). In addition, F.tech has established a system to check whether the above mentiond is functioning appropriately.

2. A system to save and manage the information as to the execution of duties by directors

    This system has been set up in which information on the execution of duties by Directors is saved and managed according to the regulations on management of report documents, and it is made available for perusal when necessary for ten (10) years.

3. A system related to the regulations of risk management of F.tech and all F.tech subsidiaries

    [1] F.tech and all F.tech subsidiaries have established the system to foresee the potential risks in their main operations and the section in charge, from an expert point of view, will designate the management people, orgnize the meeting and prevent such risks beforehand.

    [2] Based on the Risk Management System, F.tech has established the "Risk Management Standards" to designate people in overseeing individual risks. In the event of an unforeseen situation, this system prevents the spread of damage and minimizes losses through the setting up an emergency headquarters spearheaded by the president with the vice president or director(s) in charge to assist the president together with the corporate lawyer.

4. A system to ensure that the directors of F.tech and all F.tech subsidiaries can conduct the business performances efficiently

    [1] Based on the principle of this system, the Board Meeting is to be held once a month and if necessary, extraordinary Board Meeting is to be held. In case of making an important decision, the Management Meeting, which the Operating Adviser and above attend, and SED (or Sales Div., Engineering Div. and Research and Development Div.) meeting are to be held before the Board meeting for the purpose of conducting business activities more effectively. The result of the Board Meeting held after the above mentioned meeting is the final and is to be carried out.

    [2] As to the overseas business, three (3) management directors are assigned in North America, China, and Asia respectively in order for each region to achieve self-reliance and perform business activities productively.

    [3] As to the implementation of the business activities decided and approved at the Board Meeting, the person responsible and the details of such business activities are determined according to the four (4) internal regulations, i.e., "List of Dividing Duties of Directors and Officers", "Rules of Organization", "Regulations of Administrative Authority" and "Guidelines for Affiliated Companies".  

    [4] By introducing the Operative Officer system, F.tech has established the structure that clarifies delegation of authority to Operating Officer and enhancing the checking function of Directors while business speed is maintained and operations are executed efficiently.

5. A system to ensure the accountability of F.tech and all F.tech subsidiaries business

    [1] The Board of Directors and CEO of F.tech establish the corporate vision and management policies and notify F.tech and all F.tech subsidiaries. Based on "Our Action Guidelines" applicable to F.tech as well as all F.tech subsidiaries, F.tech has established the company compliance.

    [2] As to F.tech subsidiaries' operation and important management matters, F.tech requires the preliminary approval or report according to the "Guidelines for Affiliated Companies".
"Guidelines for Affiliated Companies" also defines the authority for F.tech subsidiaries operation so that appropriateness of the operation is maintained.

    [3] In the case where management finds out critical matter(s) which can or actually violate the related laws/regulations and/or other business compliance, it needs to be reported to "Corporate Ethics Kaizen Window" immediately, then the "Corporate Ethics Committee" or other related organization will report to the Board of Directors the investigation results as well as the countermeasures to such critical matter(s).

    [4] To the antisocial forces that threaten the social order and corporate healthy operations, F.tech and all F.tech subsidiaries, as a whole, assume a resolute attitude. The structure to refuse to have business or other relationship with such antisocial forces has been established.

    [5] In order to maintain the appropriateness of F.tech as well as F.tech subsidiaries operation, the Internal Audit Office of F.tech are to conduct the business audit periodically.

6. When it is requested to have the employee(s) assist the operations of auditor(s), the structure ensures the independence of the employee(s) from the Director(s) and that the direction from the auditor(s)  to the employee(s) is to be duly implemented

    [1] Upon request from the auditor(s), F.tech assigns the employee(s) who assist exclusively or concurrently with other duties, and such employee(s) are to directly report to the auditor(s). The transfer, evaluation (including personnel evaluation), disciplinary action of the employee(s) shall  be discussed and approved by the Board of Auditors preliminarily before the final decision in order to maintain their independence from the Board of Directors.

7. A system for Director(s) and employee(s) to report to the Auditor(s), a system related to other reports to the Auditor(s), and a system to ensure the effectiveness of the Audit by auditor(s)

    [1] It is stipulated that the Auditor(s) can attend important meetings including the Board Meeting and Managemen Meeting held at F.tech or all F.tech subsidiaries. Also, upon request of Auditor(s), the necessary information including meeting notice will be provided to the Auditor(s).

    [2] A system has been established in compliance with the "Auditing Standards for Auditors" and "Reporting Standards for Auditors", the Director(s), Operating Officer(s) and Employee(s) report to the Auditor(s) as to the cases mentioned below as well as the cases described in the standards.

        1) In case when the facts that can cause severe damages to the company is found

        2) The facts which has been reported to "Corporate Ethics Kaizen Window"

In line with this system, the Auditor(s) will ask to forword any reports from the Director(s),
Operating Officer(s) and Employee(s) of F.tech and all F.tech subsidiaries, regardless of the two (2) cases mentioned above, when necessary.

    [3] F.tech forbids to treat Director(s), Operating Officer(s) and Employee(s) of F.tech and all F.tech subsidiaries adversely who made reports to the Auditor(s), and ensures thorough awareness of this among the employees of F.tech and all F.tech subsidiaries.

    [4] The Auditor(s) can appoint lawyer, certified public accountant(s) and/or other advisor(s) as an assistant, when necessary, to conduct the auditing activities.

    [5] F.tech, upon discussion and decision with the responsible section(s), guarantees to compensate the exact amount to that (those) particular Auditor(s) who in advance burdened such cost out of his/her (their) pocket(s) or any debt shouldered in order to conduct the necessary auditing activities based on the Company law (Art. 388), except the cases where such declared amount is judged inappropriate.

8. A system to secure the reliability of financial report(s)

F.tech, for the purpose of securing the reliability of finacial report(s) and of editing and submitting the effective and appropriate Internal Controll System Report regulated in Article 24.4.4 of the Financial Instruments and Exchange Act, has established the Internal Control System under the instruction of President & CEO with Management Planning Division in center. We constantly examine whether this system is functioning appropriately and if necessary, makes adjustment to it. In adition, Internal Audit Office evaluates the current situation of Internal Control System.

 Fundamental Principles Regarding the Elimination of Antisocial Forces and the Countermeasures Being Implemented

F.tech stands resolute against antisocial forces that threaten the order and safety of society, in accordance with our fundamental principles. Our compliance regulations stipulate that we will refuse to form ties with such antisocial forces. Moreover, we strive to ensure cooperation with external organizations such as the police.

 Other Matters Related to Our Corporate Governance

F.tech places great importance on the need for timely publicizing of information about the company that may have a major impact on decisions to invest in company securities in accordance with the “Rules on Timely Disclosure of Corporate Information by Issuers of Listed Securities” (hereinafter, “Timely Disclosure Rules”) as stipulated by the Financial Instruments and Exchange Act and the stock exchange. In doing so, we strive to disclose information to stockholders, investors and other stakeholders in a speedy, accurate and fair manner.
While complying with the "Timely Disclosure Rules of the Tokyo Stock Exchange", we also ensure the timely disclosure of vital information through TDnet, the media and our company website. As for the management of insider information, we have “Insider Trading Prevention Regulations,” which all the executives are thoroughly familiarized with. At the same time, we have a designated person to oversee the management of information in order to ensure awareness of the issue throughout the company. 

Disclosure Policies

1. Information Disclosure Standards

F.tech Inc. (hereinafter, “our company”) will ensure transparency and fairness for all stockholders and investors by striving to disclose information quickly. We will comply with the “Timely Disclosure Rules” (hereinafter, “Disclosure Rules”) as stipulated by the Financial Instruments and Exchange Act and the Tokyo Stock Exchange, to ensure the timely disclosure of information. We will also actively engage in the disclosure of any other information that is believed to be of importance or benefit to stockholders, investors or stakeholders in gaining an understanding of our company. On the other hand, we will not disclose any personal information, information on customers or other associates that will infringe upon their rights.

2. Method of Disclosing Information

The information to which the Disclosure Rules apply will be registered for publication on “TDnet (Timely Disclosure network)” provided by the Tokyo Stock Exchange, after which it will be posted on our company website at an appropriate time. The information to which the Disclosure Rules do not apply will also be publicized extensively through, e.g., posting on our website.

3. Preventing Insider Trading

F.tech ensures proper management of vital information to prevent insider trading by laying down internal regulations. We ensure thorough awareness of these regulations among all group employees.

4. Quiet Period

To prevent the leakage of information that affects the share value, such as financial results (including quarterly closing results), and maintain fairness of information disclosure, our Quiet Period shall be from the day after the final day of a fiscal term to day the closing results are announced. During this period, we shall not respond to questions or comments on financial results and financial forecasts. However, in the case of a likelihood of huge discrepancies between the actual and forecasted results, we will make timely disclosures based on Disclosure Rules and our own information disclosure standards even during the Quiet Period.