Based on the regulations of Article 362, Section 5 of Companies Act, the Board of Directors of the Company will construct an internal control system, as provided for in Article 362, Section 4, Item 6 of the Companies Act and Article 100, Sections 1, each Item and Section 3 of the Ordinance for Enforcement of the Companies Act as follows.
Internal regulations will be formulated to ensure accurate retention and management of records of important business executed by Fuji Electric companies and to ensure that Directors and Auditors acquire knowledge of records. The regulations establish procedures for Directors, Auditors, and managers involved in saving and storing records regarding access to information.
The Company’s Auditors are also consulted in advance with regard to formulating, amending, or eliminating regulations.
The Company will formulate internal regulations to ensure the appropriateness of documents and other information related to financial settlements as stipulated by the Financial Instruments and Exchange Law of Japan. Based on these regulations, each Fuji Electric company will build internal controls for financial reporting, appropriately conduct evaluations and reporting, and report the results of evaluations to its Board of Directors.
Auditors may request the assistance of employees from internal auditing divisions or management planning divisions as necessary. Employees carrying out this work may do so independently of instructions or orders from Directors.
Internal regulations will be established to ensure Auditors acquire sufficient information for them to fulfill their duties. The regulations establish specific methods for ensuring Auditors have opportunities to attend important meetings where decisions are made on business execution, for distributing regular reports and important documents to Auditors, and for making it possible for Auditors to otherwise collect information on the performance of duties by Directors.
In implementing the Corporate philosophy and continue to improve corporate value, Fuji Electric to amass unique technologies, experience and know-how, and strives to develop and maintain good relations with various stakeholders, including customers, partners, communities, and employees.
These are the Fuji Electric’s precious tangible and intangible assets, the Fuji Electric’s DNA, and resources that support the creation of corporate value for Fuji Electric.
Based on that philosophy, the Company strives to manage in line with changes in the environment. The Company recognizes that the most effective countermeasures against share purchases that could damage the corporate value of Fuji Electric are increasing corporate value in the mid-to-long term vision and further raising the share of profits to shareholders, and strives to realize those aims.
Furthermore, the Company is actively engaging in a range of IR activities to ensure that the Fuji Electric’s stock price is properly understood. The Company will strive to further deepen understanding of Fuji Electric by issuing reports on its performance including quarterly financial reports and holding plant tour programs for the shareholders.
The Board of Directors recognizes that the free trade of shares by shareholders is a reality as a listed company, and believes that the question of whether or not large-scale purchases of shares in the Company by specific individuals should be permitted is a matter that should ultimately be delegated to the shareholders.
However, corporate acquisitions undertaken to profit unduly from selling a company’s stock at the highest price do occur. The Board of Directors does not believe that any party who engages in any such large-scale share purchases of the Company’s shares or tables proposals which do not contribute to the corporate value of Fuji Electric or the mutual benefit of the shareholders are suitable parties to control the Company’s finances and the determination of its business policy.
At this point in time, no specific threat related to large-scale purchases of the Company’s shares has emerged. Moreover, the Company has not yet put in place any specific preventative measures (so-called “poison pill”) against the emergence of a takeover threat.
However, the Board of Directors will, as a managerial duty to the shareholders, establish an internal system to install measures against any large-scale purchases of the Company’s shares that threaten the corporate value of Fuji Electric or the mutual benefit of the shareholders.
As our basic strategy for sustainable growth, Fuji Electric aims to create growth on the global market based on our power electronics technologies cultivated over many years, which handle electrical energy universally, backed by energy and environmental investments projected to take place in many countries.
To realize this, we will rapidly shift our managerial resources to the field of “energy and the environment,” aiming to maximize our corporate value and create CSR management as a “company that contributes to the global society through business.”
The Company will, based on 1. Details of the Basic Policy above, strive to establish an internal system in view of any potential or actual purchases of the Company’s shares that threaten the corporate value of Fuji Electric or the mutual benefit of the shareholders.
Specifically, the Company will very carefully monitor daily trading movements and shareholder changes and at the same time put in place a first-response manual for contingencies, and establish a framework for collaboration with external experts. The Company will determine specific preventative measures in a timely and appropriate manner, and strive towards the enhancement of internal systems.
Furthermore, the Company will continue to consider the introduction of a “poison pill,” from the viewpoints of ensuring and increasing the corporate value of Fuji Electric or the mutual benefit of the shareholders, based on the opinions and judgments of the legal system and the relevant authorities, social trends, and the opinions of our stakeholders.
Because the measures referred to in 2 above are means: (1) to maintain and enhance the corporate value of the Company over the mid-term, and (2) to establish internal systems to respond to large-scale purchases of the Company’s shares that threaten the corporate value of Fuji Electric or mutual benefits of shareholders, the Board confirmed and resolved at a meeting of the Board of Directors that these measures comply with the basic policy in 1, and neither measure represents a threat to the mutual benefits of the shareholders or is a means to maintain the members of the current top management team in their positions.
Further, the resolution was unanimously agreed upon at a Board of Auditors meeting, provided that the specific operations of the measures described in 2 above are conducted properly.