MC has long engaged in creating a framework to ensure that it continues to conduct business activities in a manner that is legal and fair. The cornerstones of this longstanding company-wide commitment are the Three Corporate Principles and the Corporate Standards of Conduct. Year after year, society is requiring companies to raise their standards of compliance. Concurrently with this trend, MC in September 2000 formulated its Code of Conduct and established several Compliance Officer posts. These and other actions have been taken to ensure legal compliance by each and every employee, as well as to instill an awareness of proper conduct that reflects social norms. In March 2006, the Code of Conduct was revised, and along with this all officers and employees are now required to sign, on an annual basis, a written commitment to this Code. This is part of ongoing actions to upgrade and reinforce our compliance system.

We believe that it is important to promote compliance on a consolidated basis, not just at the parent company level. That's why we have stepped up actions to put in place a compliance system at our subsidiaries and affiliated companies around the world that meets the same high standards as at MC itself. One specific measure in this regard is a system of suggestion boxes maintained with our outside legal counsel that was established in February 2005. The system is used by officers and employees of our subsidiaries in Japan. This system is an extension of a system of suggestion boxes placed within MC and in the office of its outside legal counsel that was established in 2001, as part of an internal whistleblower system.

As an important strategy for raising value on a consolidated basis, we will continue to upgrade and reinforce compliance initiatives that are effective at instilling awareness of compliance issues in each and every employee, including employees of MC's subsidiaries and affiliated companies.