Recently, with the abundance of corporate improprieties that have come to light, we have much occasion to come into contact with the word 'compliance.'
The word 'compliance' is generally interpreted in the context of 'complying with the law whether domestic or international, and by the same token, complying with all applicable social mores and dictates’. At the same time, ‘compliance’ has also meant endeavoring to prevent any incidence of impropriety, and by so doing, contribute to the sound development of a sustainable business enterprise. This definition had been adequate to date; today, however, 'compliance' has become almost as important as business results in terms of managing priorities and can mean the life or death of a corporation.

This is because companies today are not only called upon to produce business profit, they must also answer the need for corporate social responsibility (CSR). Companies which flagrantly violate the law or social conventions in their business activities, methods or practices cannot expect to continue doing so for very long.

It is also considered from a societal standpoint that an enterprise that puts compliance into practice will inevitably earn higher marks from its stakeholders, and in turn continue to develop as a sustainable enterprise.

From this perspective, we declare the prevention and elimination of impropriety shall be emphasized in all the associated actions and behaviors and implications concerned, and we further commit to upholding compliance in the highest regard. We firmly declare that this commitment shall be known as the"Kyosan Electric Mfg. Co. Compliance Declaration."
In order to make this declaration a reality,

• We shall clarify the requisite lines of responsibility and authority for the implementation and management of systems to prevent the reoccurrence of improprieties, based on our fundamental compliance policy, establish 'help lines', more effective training programs, and promulgate information management policies and procedures as detailed in the"Compliance - Fundamental Policies."
• An Internal Auditing Office shall be established as a compliance advocate, with the mandate to fortify the auditing program and help further the goals of management from a different approach than that of the legal/compliance division*, in order to self-manage and implement internal compliance.

END

January 1, 2005
Kyosan Electric Mfg. Co., Ltd.

*Legal/compliance division has been reorganized to Legal Department from April 1, 2011.