SHINSHO CORPORATIONSHINSHO CORPORATION

KOBELCO

Governance

Corporate Governance

In the management of its businesses, the Group regards the strengthening of corporate governance as an issue of the upmost importance. Our basic policy towards corporate governance is to promote business that is worthy of the trust of shareholders and clients by maintaining the integrity of management and strengthening the competitive position of the Company through swift and flexible adaption to changes in the business environment. Furthermore, the Group places great importance on compliance management for promoting business strategies and in light of this it has constructed systems for compliance with laws and regulations and risk management. These systems include the establishment of a Compliance Committee, an Investment and Loan Committee, and an Environment Committee, as well as the development of a system for security export control.
In addition, in order to ensure the integrity in business activities, in accordance with the administrative authority regulations, the Staff Department at the Head Office utilizing their specialist knowledge conducts preliminary reviews of decisions made. The Department also monitors the performance of business conducted by the Group while cooperating with the Business Planning Office placed at each sales section and if necessary makes suggestions for improvement and provides specific advice and instruction.
Moreover, the Audit & Supervisory Board Members (internal/outside) and Accounting Auditors make efforts to strengthen their partnership through regular exchange of opinions and endeavor to monitor legality and fairness in the business performed by each department. We aim to not only ensure compliance through these systems and activities, but to also enhance and maintain the integrity and transparency of our business and prevent management risk.

Compliance

We enacted Code of Compliance and Ethics of Shinsho Corporation, including its group companies, in August 2003 to clearly specify the compliance rules to be followed by all Managing Officers and Employees.
In addition, Compliance Committee, which comprises the President, Managing Officers and External Lawyers, has been established as an Advisory Body to the Board of Directors.
The Compliance Committee has two regularly scheduled meetings each year to formulate policies and measures for compliance and implementation of the policies.
The Credit and Legal Department is responsible for carrying out company-wide compliance promotion, and it focuses on the planning and implementation of stratified compliance training per theme, consultation for compliance, summarizing the status of compliance based on the sur vey result, and operation of whistleblowing system, etc.

Code of Compliance and Ethics of Shinsho Corporation and its group companies

Ⅰ Basic Policy
We are committed to sustaining a high standard of corporate ethics and conduct business practices that is trusted by society.
We are committed to complying with the laws, regulations and company rules, and conduct fair and equitable business.

Ⅱ Code of Conduct

1. Fair Trading Observe social rules, laws and regulations, and promote fair and free competition.
2.Compliance with International Laws and Regulations Observe international laws and regulations, and respect the culture and customs of each nation and regions.
3. International Cooperation Devote ourselves to international cooperation, and act with a global perspective.
4.Security Trade Control Ensure strict compliance of security trade control, and contribute for the maintenance of international peace and security.
5.Disclosure of Corporate Information Disclose corporate information in a timely and appropriate manner, and maintain transparency of management.
6.Ensure the Reliability of Financial Reporting Maintain the fitness of financial statements and the reliable financial reporting to ensure the accuracy.
7.Protect Confidential Information Strictly protect confidential information such as customer information, and honor confidentiality of information from being divulged to others without justifiable grounds.
8.Prevention of Insider Trading Do not engage in any unfair stock trading or other similar act that may be perceived as insider trading.
9.Promotion of Environmental Preservation Take an active approach to global environmental issues, and remain committed to the task of caring for the natural environment.
10.Respect for Intellectual Property Rights Protect and respect intellectual proper ty rights.
11.Interaction with Local Communities Conduct social contribution activities in the local communities as a good corporate citizen.
12.Respect for Human Rights Respect the human rights of others, and do not engage in all forms of unfair discriminatory treatment.
13.Prevention of Political Corruption Avoid any potential acts of briber y, and sustain decent relationships with government officials.
14.Confrontation with Antisocial Forces Stand firmly against antisocial forces and organizations.

Security Trade Control System

From the viewpoint of upholding international peace and security, we are actively implementing security trade control based on currency exchange and overseas trading legislation, in order to keep from terrorist hands weapons, commodities or technologies that could be turned to military use.
We have set up a voluntary control system related to security trade control as required by Japan’s Ministry of Economy, Trade and Industry (METI), and have obtained special trading authorization that bypasses the need for METI’s separate export licenses. This has meant in practice creating a trading monitoring system for export control throughout the company, sharing the latest regulations and export trends at meetings of representatives from all departments responsible for export control, and regular internal audits and staff training on export control.
Also, in March 2008 we obtained certification from the customs authorities as an Authorized Economic Operator (AEO), indicating full compliance with customs authorities. This eliminates customs inspections of exports and simplifies other procedures to speed up our exports.For trade between Japan and other countries with which we have reciprocal agreements, customs procedures such as document screening and inspection are reduced both in Japan and the trading partner, which cuts logistical lead-times.

Effect of AEO Certification

Credit Control

An electronic system is used for control of credit limits in Japan and overseas, for all procedures from application to approval, in order to boost speed and efficiency. In the case of credit control in overseas subsidiaries, we try as far as possible to preclude bad debt through periodic checks and sharing of information on the status of debt recovery, etc. undertaken by the legal affairs screening department and the subsidiary’s relevant departments.

top