BUSINESS AND CSR

CSR AND
OUR BUSINESSITOCHU Corporation combines trading, business investment andother functions to develop a variety of businesses around the world,
and is promoting CSR through its business activities to realize asustainable society.

Business Outline of ITOCHUThe businesses of the ITOCHU Group comprehensively encompass upstream raw materials
business areas through to downstream retailbusiness areas, enabling it to provide a wide
variety of goods and services that support
people’s everyday lives. In order to advancebusinesses worldwide, we make the fullest useof our capabilities as a Sogo Shosha (general
trading company). In other words, we trade,invest in businesses, and add value to thesebusinesses through their overall coordination.
Precisely because ITOCHU develops businessacross such a broad range of industries andbusiness areas, our emphasis is on promoting
CSR that is deeply rooted in the respective
front-lines of these businesses.

General Meetingof Stockholders
Board of Directors

President & CEO

HMC
Directors, Auditors& Executive
Officers Meeting

Corporate
Auditors’ OfficeInternal Audit Division
Secretariat

Resource Development
andMaterials Procurement

Business overview

Major products and services

Providing new values andimpressions in fields ranging frombrand fashion-related merchandise to hi-tech industrial fibers
and materials.

Fiber raw materials; industrial
materials; textile, apparel and fashion
goods; brand marketing, including
food and daily living-related products.

ICT & Machinery Company
CSR at this Division Company

Developing an international society andcreating an affluent lifestyle throughenvironment-friendly businesses
Business overview

Major products and services

Partnering with a host of Group
companies to develop wide-ranging
businesses and services to lead thenext generation in the fields of ICT
and machinery

Industrial plants; ships; automobiles;
construction; machinery; aircraft;electronic devices; IT, media andmobile businesses; medical
equipment and materials

Energy, Metals & Minerals Company

Trading

Business Investment

Corporate Planning &Administration Division

Domestic Offices
Overseas Offices

Wholesaling

CAO & CCO
Human Resources & General Affairs
Division
Corporate Communications Division
Legal Division

Retail/Service

CSR Promotion Through
CSR Action Plans
ITOCHU Corporation has five Division Companies involved in substantially different lines ofbusiness; therefore, sustainability issues thatarise vary markedly. To steadily promote CSR
through their business activities, each Division Company, and the administrative divisions that support them, takes the lead in
identifying important social issues to confrontand creating frontline-driven CSR actionplans. CSR is then advanced in line with
PDCA cycles. Refer to the following website
to view reports on the CSR activities andaction plans at each Division Company.

CSR at this Division Company

Promoting CSR through the development
and stable supply of resources and energy
Business overview

Major products and services

Contributing to global economic
progress and the protection of the
global environment through thedevelopment and stable supply of
resources and energy

Crude oil; petroleum products; LPG;
LNG; nuclear fuel; Dimethyl ether(DME); bio fuel; iron ore; coal;
aluminum; steel scrap; steel products

Chemicals, Forest Products & General Merchandise Company
CSR at this Division Company

Caring for the natural environment andensuring the safety of chemical substances
CFO• Investor Relations Department• Group Accounting Support & IFRS
OfficeFinancial Division
General Accounting Control Division
Global Risk Management Division

Business overview

Major products and services

Expanding in the two fields ofgeneral merchandise and chemicals
in search of a higher order ofcontact between affluence and theenvironment

Housing materials; logs and lumber;woodchips, pulp and paper; crude
rubber and tires; shoes; organic
chemicals; inorganic chemicals;
plastics; consumer-related products

IT Planning Division

CSR at this Division Company

Food Company
CIO

Chief Executive(Headquarters Business Organization)

Financial & Insurance Services
Department
Logistics Services Department
CSR at Headquarters
Business Organization

Responding to the needs of consumers
and society with environmental
consideration
Business overview

Major products and services

Engaged in food businesses in the value
chain that extends from food resource
development in Japan and overseas,production and processing, through tointermediate distribution and retailing

Grain; ingredients for animal feed;fats and oils; sugar; beverages; dairy;
agricultural, livestock, and marine
products; frozen and processed
foods; other food products

Providing services and solutions
with abundant creativity

Chief Executive (Construction & Realty Division)

Business overview

Major products and services

CSR at Construction & Realty Division

Providing services in thefields of finance, insurance
and logistics by going
beyond the frameworks ofa Division Company

Financial services and debt/
equity financing business;insurance brokerage andreinsurance business,
logistics solutions

Providing “secure,” “safe” and“highly functional” facilities

Executive Advisory Officer for
Kansai District Operation
http://www.itochu.co.jp/en/csr/activities/
actionplan/

Contributing to the realization of a healthy,
prosperous, and active society

Research & Business Development
Division

CSO
Manufacturing andProcessing

Board ofCorporate Auditors
Corporate
Auditors

Textile Company
CSR at this Division Company

HMC: Headquarters Management Committee
CSO: Chief Strategy Officer
CAO: Chief Administrative Officer
CCO: Chief Compliance Officer
CFO: Chief Financial Officer
CIO: Chief Information Officer

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Business overview

Major products and services

Developing facilities and providing
creative services in the real-estate andconstruction business fields as a global
and general trading company

Real estate-related businesses; realestate solutions; private financeinitiative (PFI) projects; trade inconstruction facilities, machinery andmaterials* In April 2011, ITOCHU reorganized its former seven Division Companies
into five Division Companies; headquarters administrative divisions werealso reorganized by function from 16 divisions into 11.

CSR and Our Business

CSR at the Textile Company
CSR at this Division Company

Contributing to the realization of a healthy,
prosperous, and active society
The Textile Company places a top priority on further improving the safety of
its products and services as well as customer satisfaction in its CSR activities.
It also strives to promote environment-friendly businesses and expand its CSR
activities into our group companies.
Hitoshi Okamoto
President, Textile Company

CSR Action Plans

Key points of our FY2012 action plans
We will expand monitoring surveys of overseas manufacturing plants to group companies from this fiscal year, and wewill aim for further advancements in supply chain management through employee education. We will also continue topromote environment-friendly businesses.

*：Achieved：Nearly achieved：Unachieved

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CSR and Our Business

Major CSR initiatives

Pre-Organic Cotton Program
We are promoting the rollout of products made of preorganic cotton material through collaboration with wellknown brands that support this program, as a crossdivisional project in the Textile Company. Particularelements of this project that have been well received byconsumers are, first of all, the traceability of the cotton
used, from harvest through until it reaches the hands ofthe consumer, and the consideration taken with regards
the associated environmental burden. Fiscal 2011 was thethird year of the program, with 300 tons of certified
organic cotton harvested out of this program.
Going forward, we will continue working to spread preorganic cotton, aiming for production that is kind to both

Cotton harvesting on one of our farms in India

the Earth’s environment as well as producers.

Fashion Earth PROJECT
An initiative was started in 2010 to procure CO2 emission
credits from a number of sources, including a UN-certified
wind power generation project in India, and sell blue hangtags with FEP-original CO2 emission rights to apparel
manufacturers. This project has led to the reduction of
about 4,000t of CO2 to date.
In 2011, the International Year of Forests, a green FEP
tag that supports forest preservation projects in Japan
based on Ministry of the Environment systems will be
developed with co-operation from the “more trees”
organization. This activity gives both apparel
manufacturers and consumers an opportunity tocontribute to environmental conservation by having
apparel makers attach FEP hang tags on their products,
Blue and green FEP hang tags

and having consumers purchase products with these tags.
By calling on wide-ranging participation by apparel
manufacturers, we aim to spread environmental
conservation initiatives to the across the industry as awhole, contributing to the prevention of global warming.

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CSR and Our Business

CSR initiatives by major group Companies

Conserving Forests with Hunting World
Under a campaign bearing the slogan “Save the
Elephants,” Hunting World has been contributing 1% ofsales of charity goods to the Borneo Conservation Trust’s“Green Corridor Plan” from 2008.
This “Green Corridor Plan” will connect fragmented
sections of forest to re-establish continuous, natural
migratory pathways that wild animals can negotiate inorder to protect the rich ecosystem of forests, startingwith Bornean elephants.
These support funds have now enabled the purchase of
4.6 acres of private land that connects separated
protected areas.

Borneo bag by Hunting World

Going forward, Hunting World will continue to promote
initiatives for enabling our co-existence with nature.

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CSR and Our Business

CSR at the ICT & Machinery Company
CSR at this Division Company

Developing an international society andcreating affluent lifestyles throughenvironment-friendly businesses
The ICT & Machinery company will endeavor to develop and promote
environment-friendly businesses and products which will reduce theenvironmental impact of our operations, and develop new businesses in awide range of fields to contribute to the prosperity of local communities andinternational society, as well as to the establishment of safe and affluent
lifestyles.

Toru Matsushima
President, ICT & Machinery Company

CSR Action Plans

Key points of our FY2012 action plans
In fiscal 2012, we will continue to actively engage in renewable energy business such as biomass, geothermal, andwind power, as well as water-related business such as desalination plants, while pursuing management objectives with
due regard for our obligations to the environment and society.
In addition to existing initiatives, we will aggressively promote new businesses such as green tech, smart grids, andsecondary batteries, providing products and services that contribute to a secure, safe, and affluent society at the sametime as protecting the environment.

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CSR and Our Business*：Achieved：Nearly achieved：Unachieved

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CSR and Our Business

Major CSR initiatives

Participation in the rehabilitation of a desalination plant in Saudi Arabia
In April 2011, ITOCHU won an order to rehabilitate the
Shoaiba Phase 1 Seawater Desalination Plant from Saline
Water Conversion Corporation (“SWCC”) of the Kingdomof Saudi Arabia through the Arabian Company and
Sasakura for Water & Power, a joint venture with local
capital in the country. The plant to be rehabilitated is amulti-stage flash (MSF) desalination plant constructed in
1988. It is possible for normal plant life (20-25 years) to
be extended by another 15 years or more by replacing
heat exchanger tubes and other corroded components
and modifying the venting system in the evaporator. In
Saudi Arabia, where a large majority of water demand forhousehold use is met through desalination plants, watersupply is tightening due to rapid population growth and

SWCC seawater desalination plant in Shoaiba, Saudi
Arabiaindustrialization. ITOCHU will aim to boost orders forrehabilitation as well as to win orders for new plant
construction, contributing to the stable supply of water
through this business.

Alliance with major US electric utility in lithium-ion battery businessAn agreement was signed with major US electric powercompany Duke Energy in November 2010 regarding an
alliance in the smart grid (next-generation electricity
transmission network) and renewable energy fields. As afirst step, evaluation and testing will be carried out for the
re-use of lithium ion batteries (“LiB”) that have been used
for a certain period of time for household and industrialuse. Evaluation will use automotive lithium-ion batteries
produced by US battery system manufacturer Ener1, Inc.,an Indiana-based company in which ITOCHU owns astake, for a range of applications and analyze battery
management and the potential impact on the existing
power grid. The initial objective is to develop, with Duke
Energy, a product ready for commercialization.

A conceptual diagram for LiB second-life applications

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CSR and Our Business

CSR at the Energy, Metals & Minerals Company
CSR at this Division Company

Promoting CSR through the development andstable supply of resources and energy
We promote CSR with the entire ITOCHU Group, while pursuing the following
missions: 1) development and stable supply of resources and energy; 2)development of new energy that are kind to the earth; and 3) initiatives forrecycling-related businesses.
Ichiro Nakamura
President, Energy, Metals & Minerals
Company

CSR Action Plans

Key points of our FY2012 action plans
As a global company, we will promote environmental management and businesses that are environmentally friendly
both domestically and at overseas Group companies. We will also continue to promote CSR education and training.

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CSR and Our Business*：Achieved：Nearly achieved：Unachieved

Major CSR initiatives

Integrated Recycling Business at Dalian Changxing Island, China
The Energy, Metals & Minerals Company, together with amajor Japanese recycling company and Chinese partners,
established an integrated recycling business for steel,
nonferrous scrap, consumer electronics, home appliancesand plastics, Dalian New Green Recycle & Resources
Corporation, at Dalian Changxing Island Harbor Industrial
Zone in China, with a groundbreaking ceremony held on
24 December 2010.
Going forward, Dalian New Green, as the only recycling
facility licensed by the Chinese Government at Dalian
Changxing Island Harbor Industrial Zone, is planning toinstall cutting-edge equipment and sophisticatedJapanese environmental technology to further improve
Rendering of the completed facility

operations. The aim is to start operations in January 2012and set this facility apart as a model for all integrated
recycling centers built in China in the future.

Partnership with Abengoa Solar of Spain in solar power generation businessIn December 2010, a partnership was formed with amajor Spanish solar power generator, Abengoa Solar, todevelop solar power projects in Asian and European
countries. An agreement was also reached to jointly
construct two 50 megawatt concentrating solar power
plants in Extremadura in western Spain and carry out
power generation business. ITOCHU will take a 30%
stake. Commercial operation is scheduled to start in2012, with power generated at these plants sold to thegrid based on the Spanish feed-in tariff system (*) .
Taking advantage of abundant sunlight in Extremadura,
the two plants will produce enough energy to meet the

Similar solar power plant also operated by Abengoa(image courtesy of Abengoa)

electricity needs of about 52,000 households and achieve
emissions reductions totaling approximately 63,000 tonsof CO2 per year.
*

Feed-in tariff system: A system for purchasing electricity
at preferential rates designed to promote the use ofrenewable energy sources

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CSR and Our Business

Establishment of SolarNet Holdings, largest solar distribution company in US
The solar power distribution business has been expanding
significantly in recent years due to heightened
environmental awareness and government support
measures. ITOCHU has been developing its solar businessin the US, one of the three major solar markets in theworld along with Europe and Japan, acquiring system
integrators (*) Solar Depot in June 2007 and SolarNet in
April 2009. These two companies were integrated in
February 2011 to further bolster the business, creating
SolarNet Holdings, the world’s largest solar distribution
company for mainly household and industrial use. Goingforward, synergistic effects from integration will betargeted through unification of sales networks andExample of past SolarNet projects: Beringer Vineyards,
California

reducing costs.
*

System integrator: Operator that handles design, sales,
and construction of solar power generation systems thatcombine solar cell modules and peripheral equipment

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CSR and Our Business

CSR at the Chemicals, Forest Products & General Merchandise
Company
CSR at this Division Company

Caring for the Natural Environment andEnsuring the Safety of Chemical Substances
We constantly strive to improve the quality and safety of our products in a
broad scope of business areas, and ensure a smooth and stable supply of
products and services that precisely respond to the needs of our customers.
We do this while giving maximum consideration to the environment, thus
contributing to everyone's quality of life.

Satoshi Kikuchi
President, Chemicals, Forest Products &General Merchandise Company

CSR Action Plans

Key points of our FY2012 action plans
We will promote increased business in internationally certified forest products and low-formaldehyde products as wellas lithium-ion batteries as an environment-friendly business. We will also work as a Group to bolster supply chain
management through efforts to secure traceability for suppliers and strengthen education and training in chemical
product-related laws and safety.

*：Achieved：Nearly achieved：Unachieved

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CSR and Our Business

Examples of Key Initiatives

Initiatives in Lithium-ion Battery-related Business
The Chemicals Division is focusing on lithium-ion
batteries, where demand is expected to grow for use inelectric vehicles and hybrid vehicles, with businessadvances made to date in the area of component andmaterials production.
As a step in securing lithium resources, ITOCHU
Corporation invested in U.S.-based resource development
company Simbol Materials in fiscal 2011. Simbol isdeveloping and promoting operations whereby lithiumcompounds are produced by extracting lithium from used
geothermal brine at geothermal power plants in southern
California. Simbol’s manufacturing technology is being
further developed and refined ahead of commercial
production.
Geothermal brine well in southern California

Using the unique advantages found in geothermal brine,
such as the carbonated gas and heat it contains, not only
enables competitive production of lithium compounds but
also enables an environmentally friendly business with areduced carbon footprint.

CSR Initiatives by Major Group Companies

Promoting Protection of Water Resources and Resource Recycling
ITC Green & Water Corp.
ITC Green & Water Corp. has been working for some 30
years to develop and improve technologies for cleaningorganic effluent such as livestock wastewater. The
company has leveraged its expertise in wastewater
treatment to create a new business with a system for
improving substratum and water quality in dam reservoirs
and ports that have become polluted due to oxygen
depletion. The company also operates an environmental
solutions business that contributes to resource recycling
with its integrated treatment system, from wastewater
treatment to making effective use of sludge. One example
is an initiative to compact organic sludge, which had
conventionally been treated as waste, and compost or

Compound lagoon for livestock

convert it into fuel.

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CSR and Our Business

CSR at the Food Company
CSR at this Division Company

Responding to the needs of consumers andsociety with environmental consideration
We aim to conduct good businesses that can contribute to society by ensuring
a stable supply of safe products, checking multiple aspects of food safety, andpaying attention to preserving the environment. In this manner, we strive toearn the trust of our customers and local communities.
Yoshihisa Aoki
President, Food Company

CSR Action Plans

Key points of our FY2012 action plans
We will continue advancing initiatives that meet a variety of societal needs, such as promotion of a procurementbusiness to secure stable food resources, monitoring food safety through creation of inspection systems/supply chain
management/internal audits, and promotion of prepared food recycling for environmental protection/waste productreduction.

*：Achieved：Nearly achieved：Unachieved

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CSR and Our Business

Examples of Key Initiatives

Food safety management support for Chinese business partner
The Food Company places the Chinese market at thecenter of its strategy, with its largest initiative in China
being the creation of a business partnership with the Ting
Hsin Group, the leading food/distribution group in China.
As a result of China’s high growth, demands for foodsafety are increasing rapidly, and providing Japan’s
advanced food safety management knowhow can be amajor differentiating factor. Therefore, we visited 13
major manufacturing plants/restaurants in China andTaiwan from 2010, and have been making wide-ranging
recommendations and proposals for improving on-site
hygienic/operational processes and management methods
with the cooperation of Universal Food Co., Ltd. Executive
Officer Toshio Watanabe (currently seconded to Nippon
Inspection of a Ting Hsin Group restaurant

Access Inc.), an expert on food safety management
within the ITOCHU Group and a holder of the ISO
inspector qualification. This initiative is also contributing
greatly to building good relations with the Ting HsinGroup.

Promotion of food resource procurement focused on stable supply and assured safety
Populations and income levels are rising sharply aroundthe world, including in Asian countries, and global
demand for grains is expected to increase in the future.
Meanwhile, consumers are increasingly aware of foodsafety, with rising demands for assuring safety andestablishing traceability. The Food Company will create a
global distribution network connecting the supply anddemand sides of this business and promote food resource
procurement, while focusing on the stable supply ofgrains and assuring safety. One such initiative isconstruction of a new grain export terminal in Longview,
Washington (U.S.A.), mainly for exports to Asia.
Operations are scheduled to start in 2011.
Grain export terminal (as of May 2011)35

CSR and Our Business

CSR at the Construction & Realty Division
CSR at the Construction & Realty Division

Providing “secure,” “safe,” and “highly
functional” facilities
We will provide secure and safe facilities and services offering a high degreeof customer satisfaction. We will develop facilities, centered on highly
functional homes with environmental awareness, and provide “secure,” “safe,”and “highly functional” facilities and services not only in Japan but overseas aswell based on the concept of Socially Responsible Property Investment (SRPI)
as a general trading company.

Kenji Okada
Chief Executive for Construction & Realty

CSR Action Plans

Key points of our FY2012 action plans
We will provide facilities and services focused on security, safety, and consideration for the environment, in line withrules and monitoring systems established internally, and also bolster protection of private information.

*：Achieved：Nearly achieved：Unachieved

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CSR and Our Business

Examples of Key Initiatives

Development of energy-saving residences that utilize solar power and other technologies
There is a great deal of interest at present around theconcept of ecology. Accordingly, we are promoting the“eco-condominium of the future” in our Crevia brand of
ITOCHU Group condominiums, contemplating a more
fulfilling future for people, homes, and the environment
regarding ecology encapsulated by the slogan, “Make
Original Tomorrow.” By including various energy-saving
technologies in overall plans and exclusive spaces, we
aim to contribute to society and the environment while
also allowing residents to actually feel the benefits in their
daily lives. At the Crevia Futakotamagawa condominium(Setagaya Ward, Tokyo), solar panels and storage
batteries are combined to store electricity generated fromsolar power and used to light common spaces at night(LED lighting), with the goal of electrical self-sufficiency.

Overview diagram of the electricity storage system at theCrevia Futakotamagawa condominium

Karawang Industrial Park aims for harmony with Indonesian society
Karawang Industrial Park (KIIC, development area 1,140ha=equivalent to the area of Chiyoda Ward, Tokyo), which
ITOCHU has invested in and operated from 1992, is an industrial park that provides “an environment for focusing on
main businesses with a sense of security” for tenant companies.
It is the only Indonesian industrial park to have acquired both ISO 9001 and 14001 certifications, and CSR activities
are conducted jointly with tenant companies with an aim of co-existence and co-prosperity with neighboring
communities.
In addition to direct support such as supplying baby food to infants and providing scholarships to junior and seniorhigh school students, an agricultural park has been established within the industrial park with the cooperation of Bogor
Agricultural University, with programs conducted to instruct local farmers in the cultivation of high-value-added
vegetables and catfish farming, as well as environmental improvement. We are also providing support for local
healthcare facilities and small businesses.

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CSR and Our Business

Excited schoolchildren with donated notebooks, baby food distribution, the agricultural park project, activities topreserve endangered tree species, health checks for children

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CSR and Our Business

CSR at the Headquarters Business Organization
CSR at the Headquarters Business Organization

Providing services and solutions with
abundant creativity
We will contribute to the realization of an affluent and sustainable society both
domestically and overseas through the provision of services and solutions in
the fields of finance, insurance and logistics.

Kenji Okada
Chief Executive for Construction &Realty; Chief Executive for Financial &Insurance Services, Logistics Services

CSR Action Plans

Key points of our FY2012 action plans
We will work to generate financial business in environmental and new energy fields, consumer-related fields, promote
insurance coverage for large projects, build and expand distribution networks and strengthen supply chain
management, mainly in China and the rest of Asia.

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CSR and Our Business*：Achieved：Nearly achieved：Unachieved

Major CSR initiatives

Contributions to local communities in overseas distribution business
The Logistics Services Department conducts logistics operations throughout Asia. In China, where we have a networkof around 90 locations that cover the entire nation, our operations are led mainly by Itochu Logistics (China) Co., Ltd.
and Ting Tong Logistics Co., Ltd., in what is the leading Japanese distribution network. By utilizing this network, wehave extended our reach into the country’s interior and are able to deliver consumer goods to all corners of China. In
this way and others, we are expanding business opportunities for ITOCHU Corporation itself as well as customers andcontributing to local communities from the standpoint of distribution. We have also begun expanding distribution
networks in India and Indonesia.

Itochu Group China Logistics Network

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CSR and Our Business

CSR initiatives by major group companies

Introducing E-Statements for Credit Cards
Orient Corporation (Orico)
Orico is providing a new Web service called “e-Orico
Service” whereby users can access their card information,such as charged amounts and use history online. As aresult, Orico is able to suspend the mailing of accountstatements and new usage guides issued each time whencash advances are used. Resources and energy will besaved by digitizing paper statements that had hitherto
been mailed and putting them on the Web. Also, the riskof personal information leaks is alleviated. Transfer
details can be notified quickly by e-mail, and since
documents are in digital format, data can be saved on
PCs, making it easier for users to organize their finances.

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