Management Policy and Corporate Governance
The FDK Group will contribute to further advancement of electronics industries by developing
and providing electronic products and batteries, and will perform social responsibilities as acompany, in order to be a trusted, good corporate citizen.

FDK Group Management Direction

Social Activities Report

The FDK Group makes it its mission to realize abundant electronic society by developing and providing electronic parts and batteriesof quality that satisﬁes customers. For this purpose, the FDK Group provides high quality products of high utility value to the customers all over the world by fully utilizing our own material, circuit and high density packaging technologies nourished for years and byintegrating the eﬀorts and enthusiasm of all employees in the Group. Aiming at being recognized as a key device supplier of highly
advanced electronic products, the FDK Group will endeavor to contribute to the development of technologies and environmental protection. In addition, the FDK Group will further enhance its corporate value through timely and accurately responding to changes of its
business environment and an eﬀective utilization of its corporate resources by promoting production innovation activities to build a ﬁrmand stable management foundation, as well as managing the company in compliance with the relevant laws and regulations.

Management andOrganizational Structure

Corporate Governance
The FDK Group aims at speedy and accurate decision-making as well as highly transparent and eﬃcient corporate management,
through which it will strengthen its corporate governance.

Our Basic Attitudes toward
Corporate GovernanceCorporate Governance Structure
Shareholders Meeting
Appointment and Dismissal

Board of Auditors

Board of Directors
President & CEO

Corporate
Auditing Dept.
Management Council
Operating Officers

Accounting Auditors

The FDK Group separates management administration functions
and business operation functions. Since June 2002, an operatingoﬃcer system has been put into eﬀect. Currently the Group sboard of directors consists of four directors including one externalboard member. The small-in-size board of directors ensures aprompt decision making process. The board of directors meetingis held once a month where important corporate management
matters are decided and operations of business are monitored
and supervised. There are 3 director and operating oﬃcers and8 operating oﬃcers in oﬃce.
The Management Council is convened once a month to decideon business matters. As decisions on important business mattersrequire a resolution at the meeting of board of directors, theCouncil is in principle held one week before the meeting of boardof directors to facilitate its process.
There are 4 corporate auditors, and 2 out of them are outside
corporate auditors stipulated in Article 2, Paragraph 16 of thecorporate law. The corporate auditors attend the meeting ofboard of directors, Management Council and other committeesheld from time to time. In addition to it, their role includes
business report hearings from directors. All of these eﬀectively
ensure the conduct of business in compliance to corporate governance by closely monitoring the business activities of thedirectors. The auditor s meeting is held every 3 months inprinciple, where each auditor makes a report on how he/shemonitors the business of the FDK Group.
The eﬀectiveness and eﬃciency of their auditing activities areensured by maintaining close communication among accounting
auditors, corporate auditors and Corporate Auditing Dept.
through exchanging information and opinions among them fromtime to time.

Social & Environmental Report 2007

Site Report

The FDK Group believes that well-established corporate governance will enhance the healthiness and the fairness andtransparency of a company and increase the value of ourshareholders. Standing on the idea, the FDK Group s organizational structure is revised as necessary to improve the quality ofthe organization and to implement necessary measures andpolicies. In addition, the Group is committed proactively todisclosing its corporate information to ensure transparent andsocially just corporate management. For example, its corporate
information is disclosed in a timely manner, and its ﬁnancial
statements are available on the Internet.

Measures for Ensuring
Corporate Governance

Environmental Protection
Activities ReportManagement and Organizational StructureManagement and Organizational Structure06

Management Policy and Corporate GovernanceCompliance(Regulatory Compliance)
The FDK Group fulﬁlls its social corporate accountability after clarifying its due corporate conduct as an enterprise and abides by relevantlaws and regulations applicable to it. In FY2006, an Internal Reporting System was newly introduced.

FDK Corporate Guideline on
Code of ConductEstablished in 2000 as a basic code to be observed by eachemployee, FDK Corporate Guideline on Code of Conduct clearlygives direction of the FDK Group for compliance and basic
policies of its corporate activities to gain trusts of its consumers
and suppliers. The Guideline is available to all employees
through the company s intranet, is placed on bulletin board ofeach workplace, and is printed in a portable calendar distributed
to all employees every year, so that the concepts in the Guideline
can be disseminated eﬀectively to all of them and in order tostimulate recognition of the concepts among them for appropriate actions by them.

1.Customer Satisfaction●

We supply safe and high quality products andservices for the needs of customers.

2.Environmental Consciousness●

We promote resource saving, energy saving andmake an ongoing eﬀort to protect the globalenvironment.

3.Contribute to Society●

We, as a good corporate citizen, actively contribute to society.

●We respect the culture and customs of every
country in the world with the global perspective and contribute to the development of theregion.

4.Fair Trade●We have sensible course of business behavior,●We communicate widely with the society andand conduct fair and free competition.
disclose our corporate information justly andtimely.
5.Compliance with Law●We act with sense of ethics and comply withlaws and social codes.

Compliance Education
Use of Intranet

Aiming at stimulating recognition of compliance and corporate
ethics among the employees, the FDK Group provides compliancerelated information of various types to all employees through thecompany s intranet. The information includes explanation of lawsand regulations applicable to them and the Group, internal regulations, example cases of violations.

Internal Seminars

Laws and regulations closely related to everyday activities of theemployees, such as internal regulations, Product Liability Law,
Amtitrust Laws and Private Information Protection Law are
explained at training seminars for new recruits and for newly
appointed oﬃcers to raise the understanding of such laws andregulations among employees. As the course of such eﬀorts by thecompany, each oﬃce holds an explanation meeting individually toexplain laws and regulations especially important to us. In FY2006,
an explanation meeting on export control was held with the participation of domestic oﬃces and overseas subsidiaries in order tostrengthen security trade. In addition, an explanation seminar on
Act against Delay in Payment of Subcontract Proceeds, Etc. to
Subcontractors was held during FY2006.

Internal Reporting System
Aiming at prevention and early-stage detection of any violations
relating to laws, regulations, internal rules as well as the company s
ethics regulations, an Internal Reporting System was established in
the Group in April 2006. A report receiving desk was establishedwhere any reporting and consultations are received. The desk isassumed to be used whenever alleged violations against laws andrules as well as the company s ethics regulations are found andwhen normal course of consultations and reporting is not available
through the reporter s manager. Name and department of reporters
are treated as conﬁdential under the Internal Reporter Protection
Regulation. Reporters are also protected against any disadvantageous or retaliatory treatment due to a violation notiﬁcation madeby them. In FY2006, no reporting that is associated with signiﬁcantviolations against laws, rules and regulations were made.

Internal Reporting System
All FDK Group Employees
Including loom employees, contracted employees and temporary staffs, etc.
Reporting andConsultation

Feedback as thecase may require

External Desk

Reporting andConsultation

Feedback as thecase may requireInternal Desk

External law office Reporting with the identity Legal Departmentof the reporter hidden

07

Management and Organizational Structure

The FDK Group tries to prevent occurrence of any risks, and promotes minimizing the inﬂuences of risks once they happen. The risk
management system of the entire Group is reinforced wherever the Group operates, either in Japan or in overseas.

Risk Management System

Actions against Natural Disasters

Environmental Protection
Activities Report

In FY2006, the Employee Safety Conﬁrmation System, developed
in-house, was deployed to all oﬃces in Japan including all FDKGroup companies. This system utilizes e-mail transmission andweb functions of cellular phones.
From now onward, safety of each
employee, when massive disasters
such as an earthquake and a tsunami
happen, can be conﬁrmed promptly.
Whenever such disasters happen,
the FDK Group will cooperate withthe local communities by providing
dry batteries manufactured by theGroup, dispatching in-house ﬁreﬁghting brigade and taking part in
rescuing victims.

Social Activities Report

After facing with various risks at its oﬃces in Japan and inoverseas, the FDK Group revised its risk management system forthe entire oﬃces. All the latent business risks were identiﬁed anddepartments were allocated and assigned to risk assessment andanalysis in order to strengthen the Group s risk managementcompetency. Natural disasters and dissemination of epidemics andothers that could expose us to serious risks are treated in a waythat relevant information is collected and analyzed correctly andmeasures are decided speedily under the leadership of Risk
Management Department chaired by the President. Kosai Plant,
located where Tokai earthquake could occur at any time, isplanning a business continuity plan (BCP) so that the Plant cancontinue supply of products to customers without any temporary
stops or resume production at an early date, if a stop happen.

Management andOrganizational Structure

Risk ManagementSite Report

A cellular phone screen showing
employee safety information

Protection of Intellectual Properties
In order to keep it at the position of competitive advantage, the FDK Group protects its unique businesses through creating and protecting
intellectual properties. Intellectual properties, especially, are protected with the cooperative actions by IPC function, R&D function andBusiness function of the Group. The activities are centered on the three pillars of (i) acquisition of eﬀective patents, (ii) eﬀective utilizationof patents currently held and (iii) aversion of infringing rights of others.

Intellectual Property Control SystemRespect to Patents Held by Others

Control of intellectual properties for the entire Group are plannedand proposed by Intellectual Property Dept., under Technology
R&D Department and managed and operated by Patent Promotion Sub-Committee. A patent promotion meeting is set up at thelevel of sections, groups and projects and held regularly to make asummary of issues related to patent in order to extract anddiscuss new areas of inventions.

An infringement of a third party patent could result in a large loss forour company. The FDK Group implements appropriate measures toavoid this. At the same time, we decisively act against infringementof our patents by a third party. A meeting of Patent Promotion Committee is regularly held where discussions and reports on patent infringements take place.

Diagram of Management System for Intellectual Property

Technology R&D Department

In order to acquire patents in force eﬀectively, Intellectual Property
Department works closely with our invention functions for creationand invention. Prior-art researches, judgment as to whether aninvention can be patentable or not, and thorough review of a written
opinion against a notiﬁcation of reasons for refusal are all intended
to make a smooth submission of an application for registration of apatent. For the purpose of nourishing robust patents, in-house
education and other human resources development schemes areproactively facilitated.

Patent Promotion Committee

Secretariat
Intellectual Property Dept.

Chairman of patent promotion committee(Director in charge of Patent)Intellectual Property Strategy

Intellectual（Manager,Property Dept. ）Patent Promotion Committee Members(Department Managers)
Patent Promotion
Sub-Committee

Patent Promotion
Sub-Committee

Project,Group,
SectionProject,Group,
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SectionSocial & Environmental Report 200708