Against the backdrop of expanding global markets and cross-border business there is a growing need for a formal structure to ensure that our company complies with local and international laws and global standards in business practices. While an informal structure has always existed for these purposes, it has been found lacking in terms of managing the risks to which improper conduct exposes our company and has been replaced with a structure that provides greater reliability. Our efforts target the employees of the parent company and of Tosoh Information Systems Co., Ltd., Tosoh General Services Co., Ltd., Tosoh Analysis and Research Center Co., Ltd., and Tosoh Plant Services Corporation, but we expect to eventually bring all the companies in the Group under a universal system.

As one of the driving forces of our corporate governance organization, the Compliance Committee is responsible for creating and improving the compliance system, establishing principles of conduct, and monitoring the system. A Compliance Committee Promotion Team provides feedback to the committee and acts on the committee’s instructions, and a network of compliance officers in each division, department and facility further enforces compliance.

Since awareness is one of the chief tools for preventing infractions, the Compliance Committee has listed the main areas of concern for the Company, outlined the laws and external and internal regulations to be followed, provided guidance manuals where possible, and clearly determined those responsible for maintaining compliance with specific laws, regulations, and business practices.

Fair business practices regarding purchasing and selling, for example, fall under the Anti-Trust Law of Japan as well as Tosoh’s internal Anti-Trust Compliance, Purchase and Sale Management, and Quality Control regulations. An Anti-Trust Compliance Manual is available to guide the actions of employees. Finally, the Anti-Trust Compliance Committee, the Legal and Patent department and the Environment, Safety, and Quality Control department are charged with overseeing compliance on the fair business issue.

Environmental preservation falls under a host of conservation and anti-pollution laws as well as the regulations set internally by the Responsible Care Council and under our quality control system. It falls, moreover, under the purview of the Environment, Safety, and Quality Control and the Corporate Strategy and Planning departments.