Compliance

It is widely recognized that breaches of compliance can undermine the very foundations of the public’s trust in a company or government, and carry a risk of significant losses through claims for damages, and sharp declines in sales. At USHIO we have established a Compliance Committee to address compliancerelated concerns, including potential risks, across the entire Group as early as possible.

When exporting products, the USHIO Group must comply with a host of laws and regulations, including Foreign Exchange and Foreign Trade Act, and Export Administration Regulations. If the USHIO Group fails to comply with any of these laws and regulations, it may be unable to transact with customers. Accordingly, at USHIO, compliance with laws and regulations for exports is based on the Internal Rules for Compliance with Export Controls and the Security Export Control Committee is responsible for putting the required measures in place.In fiscal 2009, we established a fundamental policy and code of behavior for export controls. Through the Joint Council of Security Export Controls Committees we shared and standardized information in all USHIO business and sales sites and divisions.At the same time, we held regularly scheduled meetings of the Export Controls Group Liaison Conference to centralize oversight of export controls for all Group companies, and established a system for visualizing export controls. We also started using a search system for parties requiring special attention, thereby reinforcing customer management activities. Looking ahead,we will continue efforts to share and standardize information throughout the USHIO Group and strengthen the PDCA cycle framework for enhancing education, awareness and auditing of export controls.

In January 2011 we held a month-long compliance drive for the entire Company. One of the activities we conducted as part of the drive was to have all departments of USHIO read the Company’s management philosophy and standards for conduct together to refresh their awareness of the content. We also conducted a survey of all employees to ascertain their level of understanding and awareness of points requiring special care. At the same time, we featured a special section on learning about compliance in the Company’s internal bulletin to explain how compliance relates to various fields and positions, and further raise employees’ awareness. In addition, we conducted group compliance training sessions at each level of the organization to raise awareness among new and mid-career recruits, as well as management-track personnel. The USHIO Group will treat compliance-related issues as being of the highest importance, and will continue to strengthen awareness of compliance among employees, and ensure that all employees reflect this awareness in performing their various duties.

The use of IT is essential for business activities. On the other hand, there has been an endless stream of security issues related to IT in society. Among various others, these include leakage of confidential and personal information, infection from computer viruses, unauthorized system access, and work stoppages due to system malfunctions.USHIO acquires and holds a variety of information in the course of conducting its business operations. We are well aware of the importance of safeguarding important information about customers and suppliers. We have established and reviewed rules for the proper handling of this information and have imposed stringent requirements concerning the protection of confidential information. Another priority is compliance with Japan's Personal Information Protection Law.To reinforce everyone's understanding of the need to comply with this law and ensure its effective enforcement, we educate personnel and publicize information through various media, including the 8 articles about information security. Moreover, all USHIO departments use a cycle of self-assessments to determine the status of compliance and carry out continuous improvements based on these assessments. We then educate all employees throughout the Company about this cycle using e-learning and other channels. In terms of physical access, IC cards are one way that the USHIO Group protects information. We use these cards to keep track of when employees enter and leave particular rooms and to record their working hours. Using servers for the centralized oversight of computer software assets and computer virus protection is another measure that protects information while reducing the burden of system management.

USHIO INC. takes the following measures to protect its own intellectual property rights and ensure that it respects the rights of other companies.
1. We will observe laws and regulations pertaining to industrial property rights, copyrights and other intellectual
    property rights.
2. We will make efforts to manage risk in order to prevent other companies from infringing upon our intellectual
    property rights and to ensure that we do not infringe upon the rights of other parties.
3. We will strive to submit applications and obtain rights in a timely manner in line with business development, and thus
    to contribute to vigorous corporate activities.
4. We will consider the overseas countries and regions in which we submit applications as well as the content of
    overseas applications in an effort to enhance our overseas competitive strengths
5. We will ensure that all employees understand management rules pertaining to employee inventions, and will observe
    these rules.