Subsidiaries

Basic Concept for Corporate Governance

The Company (and the Group) believes that improving corporate governance is a necessary condition for continued growth. We are committed to ongoing improvements in corporate governance, to further increase management transparency for shareholders and obtain the enduring confidence of the community, including our trade partners and customers.

With respect to the protection of shareholders' rights, the Company strives to achieve two-way communication by actively taking questions at general meetings of shareholders. We pay serious attention to the voting rights of shareholders by taking steps to encouraging as many shareholders as possible to exercise their voting rights through initiatives such as providing information on how to properly exercise voting rights and introducing a system for voting via the Internet.

We also take a flexible approach to the distribution of profits to shareholders that takes into account business performance in each term as well as the bolstering of internal reserves. We also take every possible measure to prevent any infringement on the interests of shareholders.

With respect to the equality of shareholders, the Company strives to prevent its officers and executives from entering into transactions that are contrary to the interests of the Company and shareholders, discloses information when entering into transactions that could potentially be counter to the interests of the Company and shareholders, and prevents special benefits, etc. from being provided to certain shareholders.

As for the relationship with stakeholders other than shareholders, the Company is committed to conducting transactions with fair terms and conditions based on objective standards such as the market price. We do this based on the belief that creating a good relationship is beneficial for both the Company and the stakeholders over the long term.

For information disclosure and transparency, the Company discloses both quantitative and qualitative information on its financial position and business results on a quarterly basis, complying with regulations on timely disclosure and proactively disclosing effective information so that users can better understand the Company. In terms of the disclosure method, we strive to provide users with the opportunity to access information fairly and easily through initiatives such as disclosing information through the TD net of Tokyo Stock Exchange, Inc., distributing information materials to press clubs as necessary, and posting information on the Company website.

We believe that the role of the Board of Directors is to make management decisions and that of the Board of Corporate Auditors is to evaluate whether executives have properly and efficiently executed their duties. To meet these obligations, directors and full-time corporate auditors attend weekly management meetings to determine the correct approach to executing their duties and to make management decisions as required.