Internal Control Systems
Fujimi's basic approach to and maintenance of internal control systems are set out below.
1.To ensure business functions carried out by directors and employees are in accordance with all laws and the Articles of Incorporation:
- (1)A Code of Ethics is used by the company as a model for all directors and employees for behavior under laws and other items specified in the Articles of Incorporation.
- (2)The company aims to make the Code of Ethics familiar to all employees.
- (3)The internal audit department controls compliance with the Code of Ethics across the company.
- (4)The internal audit department and legal department will inspect adherence to the Code of Ethics and report their findings to the Board of Directors and the Auditing Committee.
- (5)The company maintains and operates an internal support and communication system to prevent violations of its Code of Ethics.
2.Storage of and management information systems for duties performed by directors
In accordance with laws and internal regulations, the company records in written form the duties performed by directors, and stores and manages this information. The company's auditors have access to these documents at all times.
3.Regulations to manage the risk of loss and other systems
- (1)The company's Risk Management Committee has chosen departments to deal with relevant risks based on the company's risk management policies, the risks associated with carrying out the company's business, and the policies in place to avoid these risks.
- (2)The General Affairs Department manages all risks for the company and all of the subsidiaries making up the Group.
- (3)The Internal Auditing department inspects risk management for all departments and reports its findings to the Board of Directors.
4.Systems to ensure the efficient execution of the duties of directors
- (1)A meeting of the Board of Directors is held on a regular basis once a month to decide important issues and supervise execution of the obligations of the directors.
- (2)Management meetings with directors and senior general managers are held to ensure flexible decision making.
- (3)The directors compile the Medium to Long-term Plan and Annual Plan for the company as well as set the strategic goals for each business. The progress for each business area is reported to the Board of Directors.
5.Systems to maintain the appropriateness of operations for a corporate organization
- (1)The company builds systems to ensure that the Group companies introduce rules and regulations for compliance with the Code of Ethics, laws, and regulations and that the directors and employees of the aforementioned companies act in compliance with laws, regulations, and the Articles of Incorporation.
- (2)The company builds systems to ensure that the Group companies introduce rules and regulations for decision-making and other organizational matters and that the directors and employees of the aforementioned companies can perform efficient business operations.
- (3)The company obliges the Group companies to regularly report important management information.
- (4)The internal audit department oversees the Group's internal controls.
- (5)The internal audit department builds internal control systems for Group companies and provides the guidance and support needed by Group companies to make these systems more efficient.
- (6)The Internal Audit department performs internal audits of Group companies and periodically reports its findings to the Board of Directors.
6.Maintaining the independence of employees assisting auditors
- (1)Auditors are able to request the assistance of employees in carrying out the auditing function. The nomination, transfer, or dismissal of the employee requires approval of the auditor.
- (2)As a general rule, employees, etc. who assist the Board of Corporate Auditors should not concurrently serve as employees, etc. of other departments and shall follow the directions and instructions of corporate auditors. However, if dedicated employees, etc. cannot be allocated due to a legitimate reason such as duty-related matters, employees, etc. who are assigned to assist corporate auditors in performing their duties shall prioritize their directions and instructions over other matters.
7.Systems for reporting to auditors by directors and employees and other reporting systems for auditors
- (1)The Board of Directors, employees, etc. and those of the Group companies, in accordance with internal rules, shall report the following matters to corporate auditors.
- 1-1Items they are concerned could have a significant impact on the company or its related subsidiaries
- 1-2Violations of important laws or the Articles of Incorporation
- 1-3The status of internal audits
- 1-4The status of discussions or notifications under the Code of Ethics
- 1-5The status of other important business matters
- (2)The company does not unreasonably treat those who make the aforementioned reports just because of that reason.
8.Systems to ensure effective auditing conducted by auditors
- (1)Auditors will perform the following tasks:
- 1-1In addition to the Board of Directors meeting, attend other internal meetings they deem important.
- 1-2Read ringisho (internal approval memorandums) and legal contracts that are important to carrying out the business.
- 1-3Receive explanation of business operations from directors and employees.
- 1-4Periodically exchange opinions with the President.
- 1-5Recieve accounting related audit reports from the accounting auditor and exchange opinions.
- (2)The company shall bear costs necessary for the execution of the duties of corporate auditors.
9.Basic policy on anti-social forces elimination
We establish the internal regulations with regards to anti-social forces and act based on the following fundamental principles.
- (1)Institutional response.
- (2)Association with outside professional organizations.
- (3)Sever all relations and business transactions.
- (4)Respond by taking civil and criminal legal action.
- (5)Prohibition on clandestine deals and any exchange of funds.