Murata has established a Risk Control SubCommittee within the Internal Control Committee to respond to the various risks of business activity. In addition, we have set up an organization in charge of risk management, which handle risk identification, assessment and countermeasures. Each corporate staff department takes responsibility for managing risks in its everyday business and taking proactive steps for the prevention of escalation of risks to problematic levels.

Protection of Personal Data

We believe that the protection of any information by which an individual can be identified ("personal data") is an important corporate responsibility. In March 2005, Murata established its Privacy Policy, and has stipulated the handling of personal data in its Privacy Policy Basic Rules.

Specific strategies we have constructed to protect electronic data include the appointment of data security control officers, implementation of a firewall against external intrusion, and data encryption for additional security of portable data. In addition, Murata has issued a "Data Security Guidebook" to foster understanding and promote appropriate actions among employees and is carrying out self-checks and education programs.

Strict Export Management System

Overseas sales account for approximately 75% of Murata's consolidated net sales. In addition, our products may be used in a broad range of electronic equipment. Accordingly, export management is of paramount importance for us. In order to make contributions to the maintenance of the international peace and security, and to supply products to our valued customers continuously, Murata has established and implemented a fundamental policy to comply with not only legal requirements but also the intent of laws, regulations and the social requirements behind them. Murata has stipulated the "Export Control Compliance Program" and has strictly implemented transaction screenings before exporting our products, and furthermore, has conducted training for employees and audits on a periodic basis for the purpose of appropriate operations.

Earthquake and Fire Simulation System

To minimize the effect of production line stoppages in the event of natural disasters, we have equipped our buildings and production facilities with anti-seismic and safety equipment and fire-prevention materials, secured backup power sources and taken various other measures. Furthermore, Murata has set up a Disaster Prevention Committee and formed self-protection fire-fighting teams and other units. To ensure appropriate response from employees in eventuality of disasters, we conduct periodic emergency drills that simulate the onset of earthquake or the outbreak of fire.

Building a strong patent network and know-how barriers

For Murata, as a company integrally linked with the technologically innovative field of electronic components, intellectual property rights are a vital management resource. We recognize protecting and avoiding disputes relating to intellectual property rights as important management issues.

We are developing Strategic Intellectual Property Activities Company-wide, which aim to construct a powerful patent network to gain patents that extend to peripheral domains and to erect know-how barriers that prevent copyism and new entries through a technological "black box" concept.

Swift Recovery Work to Resume Operations

The Noto Peninsula Earthquake of Sunday March 25, 2007, Group company resulted in damage to Anamizu Electronics Industries, Ltd. (Anamizu City, Ishikawa Prefecture) and Wakura Murata Manufacturing Co., Ltd. (Nanao City, Ishikawa Prefecture). In addition to local concerned personnel, Head Office staff and related workers reported to the sites to commence recovery work.

As a result, part of Anamizu Electronics Industries' production lines were up and running two days later, with the remainder steadily resuming operation in the five days to the following weekend. In the case of Wakura Murata Manufacturing, it took just three days for all production lines to resume operations. In both cases, there was no adverse impact on supply of products to customers.

Murata has begun to formulate business continuity plans (BCPs) to minimize the impact in the event of earthquakes and to restore operations as quickly as possible in the case of sustaining any damage.

This program commenced with measures at the Head Office and certain subsidiaries during fiscal 2007, with plans to extend Group-wide in fiscal 2008 and beyond.

Establishment of Sectional Committees

Murata recognizes disasters as a grave risk, and has set up the Disaster Risk Sectional Committee as a subcommittee to the Risk Management Committee to promote risk reduction measures.