In addition to strengthening its compliance system, the Company widely promotes the importance of business activities that conform to legal and ethical rules to all members of the AUTOBACS Group, including the head office, subsidiaries, and franchise stores.

• From the AUTOBACS Group's standpoint, compliance extends far beyond adherence to legal regulations and corporate ethics. We define compliance to mean meeting the legitimate expectations of all our stakeholders. This is clearly explained in our Code of Conduct and its guidelines which forms the basis of our compliance system. Based upon this basis we are working hard to promote compliance.
• Specific initiatives are spearheaded by the Compliance Task Force, which consists of representatives from relevant departments and meets monthly. The Task Force submits reports on behavior that contradicts the Code of Conduct andits guidelines to the chief officer and corporate auditors. In these ways, we are building a system to ensure swift Groupwide responses to compliance-related issues.

AUTOBACS Code of Conduct

(1)To customers	We consider peace of mind, satisfaction, and trust from the customer's viewpoint and provide the best products, technologies, and services to meet customer expectations for total car-life services.
(2)To suppliers	We build fair relationships with all suppliers and implement sincere transactions in accordance with laws, regulations, and contracts.
(3)To shareholders and other investors	We act in the manner expected of a public company, fulfill our social responsibilities, and provide appropriate, timely disclosure of accurate company information, so that shareholders and investors can evaluate and understand the Company correctly.
(4)To society	We observe social rules and work for the betterment of the society, as a member of society.
(5)To employees	We value diversity and inclusion and strive to create a sound and healthy work environment.
(6)To company assets	We manage and protect all of the company's tangible and intangible assets and rights and we do not use them inappropriately. At the same time, we respect the assets and rights of others.

• The Group established Orange Hotline, an internal reporting system, to facilitate reporting of legal violations and compliance-related issues. In addition to providing a reciprocal monitoring function to raise compliance-related awareness among executives and employees, the Hotline is designed to allow quick detection of unethical behavior. At its meeting in December 2006, the Board of Directors resolved to further strengthen the compliance system by formulating a set of regulations aimed at reinforcing the effectiveness of the Orange Hotline. In the year under review, 10 cases were reported via the Hotline.

• In March 2006, the Group established Document Management Regulations and Confidential Information Management Regulations in order to promote more effective management of information on a Groupwide basis. Important paper documents - such as materials distributed at meetings of the Board of Directors and Executive Committee, as well as minutes of such meetings - must be stored in securely locked cabinets. Access to the Group's information systems is strictly limited and encryption techniques used, while electronic documents must be password-protected.
• To create a system for the proper protection of personal information, we also set up the Personal Information Protection Committee, which reports directly to the CEO. The Committee held 30 in-house training sessions in the year under review and pursues other initiatives aimed at assuring effective information management throughout the Group, including at the Company, subsidiaries, and stores.