Clarion began its compliance management efforts in fiscal 2003.

In the introductory phase, we established the “Guiding Principles of Conducts and Behaviors” and developed the implementation framework, and extended them to the domestic and overseas group companies. In this process, each department is placing priority on activities to reduce risks utilizing the PDCA cycle method, based on risk assessment tables that summarize applicable laws and ordinances and compliance risks. Furthermore, our ongoing awareness training efforts include the holding of training sessions for all manageriallevel staff every year in which case studies of other companies and new and/or amended laws and ordinances are studied.

In fiscal 2006, Clarion ran events to select the “best practice”from among the business activities of our affiliates and subsidiaries in addition to exchanges of opinions with departments, surveys on awareness of compliance, and audits of compliance management. In fiscal 2007, we will continue these efforts with a view to reducing risks further and taking our global activities to a new high level.