Organizational Governance Risk Management Risk Management Fujikura classifies risks to be managed into risks related to business opportunities (strategy risks) and risks related to the performance of its business activities (operational risks). Strategy risks are managed by top executives jointly through the Board of Directors and the Management Committee, while operational risks are managed by the Risk Management Committee based on the Fujikura Risk Management Rules. With crisis management, we provide information to top management promptly and have established a response organization and a management system in the Fujikura Risk Management Rules. As for operational risks, we manage a range of incidents daily that take place in our corporate activities, including those related to compliance, quality assurance, environmental management, safety and health, and information security under a system led by in-house organizations specializing in each of the fields. Specifically, the Legal Department, Quality Assurance Division, Global Environment Division, Human Resource & General Affairs Division, System Division, Security Export Administrative Division, and other in-house expert organizations show the values to which society wants companies to adhere to directors and employees. These in-house organizations work to ensure that the directors and employees behave appropriately in compliance with social norms as well as with laws and regulations so that the Company can win even more trust from a range of stakeholders including customers, consumers, employees, business partners, and shareholders. Guidelines and Goals The Fujikura group has established these "Risk Management Rules" in order to minimize and prevent loss in the administration of the Fujikura group before it occurs and build a base for continued, healthy growth while maintaining and elevating our business value. Awareness of Important Risks In the company-wide risk management system, the "Company-Wide Risks" that have a large effect on our company's administration are specified on a common scale, and departments are assigned responsibility for management of risks that require company-wide measures. In detail, "Company-Wide Risks" are managed through risk management activity based on the PDCA cycle: 1. Identify and Assess risks, 2. Identify important/urgent risks, 3. Create and implement risk countermeasures, 4. Monitoring. Risk Management System FY2016 Efforts In the 2016 fiscal year, the risk management committee met 3 times. Along with the risk management situation of FY2015, the risk management committee reports on each section and company's FY2016 efforts, company-wide risk responses, and BCP and BCM efforts. Internal Reporting System To prevent compliance violations and problems relating to human rights and to broaden the choices for whistle-blowers, Fujikura has set up intra-company and independent third-party consulting systems as an internal report system. For affiliated companies, internal reporting information management is handled unilaterally at the main office. There were 26 reports and consultations in FY2016. The internal reporting system is fully ingrained and functioning. [Internal Reporting and Number of Consultation in FY2016] FY2015 FY2016 Number of Internal Report and Consultations (cases) 15 26 Information Security With the progress of this highly information-oriented society, the importance of information and the use of information systems are dramatically increasing in corporate activities. In particular in recent years, risks associated with electronic information are expanding, and we regard the implementation of information security measures as a top priority in our business activities. Fujikura formulated its Basic Rules on the Security of Electronic Information in 2005 to protect all information handled by the Fujikura Group. By constantly increasing the awareness of these rules among directors and employees and urging them to comply, we will fulfill our social responsibilities regarding information security. Basic Principles on Information Security Prevent illegal invasion, leakage, falsification, and destruction of information assets by implementing appropriate personnel, physical, and technical measures and never become a wrongdoer in this regard. In the event of a security incident, give a prompt responses to minimize the damage. Conduct security activities on a continual basis, establish a security management system to respond to new threats, and ensure higher safety through these activities. We will enhance our information security by steadily managing our information assets and providing information security education to employees. At the same time, we will improve our information security level based on a PDCA cycle-driven management system so that the safety of the information assets handled by the Fujikura Group will be preserved, and this will help us win even more trust from society. Activity in Fiscal 2016 The Fujikura Group Electronic Information Security Committee held an e-learning seminar on information security, in which 10,098 Group employees participated. Privacy Protection On March 22, 2005, we established the "Fujikurag Privacy Policy" and stipulate the management system for personal information protection and matters to be observed. We have appointed Executive Director as Chief of Personal Information Protection and established a compliance and operation system for personal information protection by establishing companywide personal information protection managers and divisions in charge of personal information protection in each department. Privacy Policy At Fujikura, we firmly believe that names, addresses, phone numbers and e-mail addresses and other personal information that can be used to identify individuals must be handled properly. For this purpose, we have established and practice a policy for the collection and handling of personal information. In addition to strict compliance with the laws, regulations and guidelines set forth by the relevant Ministries of Japan, we also endeavor to exercise the proper handling of personal information through corporate regulations that establish internal systems and management mechanisms for personal information and provide training and education for our employees. The basic policy for the proper handling of the personal information is prescribed in our corporate regulations, which are outlined in the following: Purpose of Collection/Use Fujikura Ltd. is a listed corporation that operates businesses in the following four domains. In the course of pursuing the efficient operation of these businesses efficiently, Fujikura may collect and use the personal information that it may deem useful for this purpose. With the aim of promoting deeper and accurate customer understanding of our company, Fujikura may desire to provide customers with various information on our corporate activities, and, therefore, may use collected personal information for this purpose. Information provided by Fujikura is not limited to its products and services, but may also include accounting information related to its state of business as well as general information on its activities. -Power & Telecommunication System Segment - manufacture and sales of optical fiber cables, communication network equipment and related components, industrial power wires, metallic communication cables and various cable accessories. -Electronics Business Segment - manufacture and sale of printed circuit boards, electronic wires, micro-heat pipes, etc. -Automotive Products Segment - manufacture and sale of automotive wiring harnesses and related components and membrane switch. -Real Estate Segment – leasing of real estate, and others Proper Handling The collection and use of personal information by Fujikura extends only as far as its collection and/or use can be considered to reasonably satisfy or relate to the Purposes of collection/use stated above. Within this framework, Fujikura may collect personal information using appropriate and accepted procedures. Provision of Personal Information to Third Parties Fujikura will not provide the personal information to any third party unless it is prescribed by the law or Fujikura has the approval of the concerned individual. Disclosure If an individual requests disclosure, correction, deletion or discontinuation of use of personal information collected and held by Fujikura in accordance with the procedures outlined in the next article, Fujikura will satisfy the request within a reasonable period and scope of action in accordance with all applicable laws and regulations. Application for Disclosure Requests related to personal information collected by Fujikura in connection with article 4 above and other inquiries related to personal information should be submitted by following the procedure below. Fujikura may not accept a request or inquiry if it is not submitted in accordance with the specified procedure. Any fees incurred to respond to the request or inquiry such as the mailing costs shall be borne by the person submitting the request or inquiry. Existence of Violations in FY2016 No violations were confirmed in FY2016. Fair Business Activities Regarding Compliance The Group established the Fujikura Group Code of Conduct on October 1, 2002. In line with this "Fujikura Group Code of Conduct", domestic and international, internal and external laws, norms and rules, each of our executives and employees "compliance", "safety and health", "environment", "connection with society" We prioritize efforts to realize the corporate group that is trusted by "society" and is required for "society". Thinking on Taxation Tax Transparency The Fujikura group has established a code of conduct that adheres to compliance measures. According to this code, all Fujikura group executives and employees must hold to the highest standards in personal conduct and obey all domestic and international rules and regulations in letter and spirit. Furthermore, all executives and employees must respect local societal customs and culture and adhere to the highest standards of dignity and social common sense in their actions. According to this fundamental philosophy, we adhere to the following principals with regard to tax processing, in addition to educating employees on work to maintain and improve compliance. In accordance with the tax and accounting laws of each country and area, we always perform appropriate taxation and fair accounting. We have set up a system for full prior examination to endeavor to reduce tax risks for transactions with high expected tax risks. Fujikura adheres to corporate law and related laws with regard to financial statements. In addition to efforts to draft fair statements, Fujikura is also working to increase fiscal transparency. Protection of Intellectual Property Our company develops business while fully respecting the intellectual property rights of third parties Based on this policy, research and development department and intellectual property department together, the knowledge of others such as patents We investigate the relationship between the property right and our company's products and technology Specifically, we introduce a system to regularly distribute domestic and international patent information on the development theme of the research and development department, investigate the necessity of measures In addition to requiring the R&D department to do, it places personnel specializing in the investigation in the intellectual property department, supports patent investigation, and multiple attorneys who are enrolled are involved in the judgment of the genus of the technical scope of the product Also, we ask external experts to make judgment as necessary. Meanwhile, regarding the unauthorized use of patents, design rights, trademark rights, etc. possessed by the Company, we take appropriate measures based on the law. The Fujikura's Policy on Protection of Intellectual Property 1.Fujikura has been proactively obtaining patents, design rights and other intellectual property rights to secure its business superiority achieved through the results of its research and development efforts, while duly respecting the intellectual property rights of third parties. 2.Against the unauthorized use of our patents, design rights, trademark rights and other rights, we take appropriate actions based on applicable laws. 3.Our strategic business units (SBUs) regularly hold meetings on intellectual property (IP), and our business, R&D and intellectual property departments jointly conduct activities to build up strategies on intellectual property based on business strategies, "visualize" our position and that of our competitors in terms of patent acquisition, and foster patent filing as part of the effort to meet business challenges while managing intellectual property rights. 4.Moreover, we regularly hold IP seminars according to the expertise of participating employees, organize meetings for our intellectual property research groups to report their activities, and invite external experts to give special IP lectures to employees, thereby raising the IP awareness of Fujikura Group employees. 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