Clarion is very careful about the safety features of the products it sells. One of our top priorities is to comply with laws, regulations and other standards regarding the safety of the products. We strive to develop and offer products that our customers can use with peace of mind, by assessing the safety features of the products and maintaining and improving their quality. Recently, as prices of products such as HDD navigation systems have increased, thefts of these systems have been rising rapidly. We have been receiving an increasing number of inquiries about thefts. In 2006 Clarion launched a theft verification system. The system automatically cross-references information regarding reported stolen products and information contained in reports on stolen products seized by police departments, such as HDD navigation system user registration data, repair data, and version upgrade data (business patent applied for). This system is employed in helping the police authorities in their investigations. In fiscal 2006, we crossreferenced six reports and all of them matched our data.

Clarion has formulated an information security policy to avoid risks such as information leakages and falsification/ tampering, computer system failures, and the unauthorized use of software. Specifically, we have implemented “physical measures” such as placing restrictions on access to the server room, “technological measures” such as controls on authorization of access to information, password protection for computers, and encryption of data, and “human measures” such as education and training to improve the security awareness of our personnel. Additionally, we instruct each department to formulate its own internal information security regulations so there are no escape-holes in information security management.

The status of implementation of these measures is verified in the regular information security audit conducted in December every year, and we are aiming to improve the level of management of information security.