Since the establishment of the SII Compliance Committee, we have been working on raising compliance awareness and responding to each compliance problem.

Based on the Internal Control Basic Policy, we continuously strive to enhance and improve our compliance framework and are currently consolidating the framework of subsidiary companies worldwide. Coordinators for the promotion of compliance were appointed at each overseas subsidiary company to establish and build up the framework.

To act in accordance with the SII Group Charter of Corporate Behavior, SII established the “SII Code of Conduct”, defining the basic requirements that all the SII Group directors and employees need to comply with. The “Action Guidelines” for Japan sites was also established to provide a specific and detailed code of behavior. In addition, English and Chinese versions of the SII Code of Conduct are created to achieve thorough compliance and raise moral awareness in overseas subsidiaries on par with Japan sites. Currently we are preparing the contents of the Action Guidelines for overseas subsidiaries.

If our employees discover a violation of compliance within the company, they can consult an outside attorney through the SII Helpline, at any time. The SII Helpline service has been expanded to include our clients to receive any information regarding our employee’s compliance violations. We also provide an internal consultation service, and the detail of the report is informed to the senior management and auditors on a regular basis.

During FY2010, there was no case reported to the Helpline, and 17 cases were processed by the consultation service.

In order to fully enforce the compliance with each senior management and employee, the SII Group executives and employees participated in an online quiz education program again in FY2010.

Also, to have the senior management reaffirm the importance of compliance and take the lead in an exemplary manner, we provide them with an awarenessraising compliance education on a monthly basis since August 2010.

To ensure international security and to practice an appropriate export control, we established an internal system to provide regular export control education and conduct audits. In addition, in August 2009, Tokyo Customs acknowledged the excellence of our compliance system and security management, and gave us an approval of "authorized exporter" on the basis of Specified Export Declaration System.