Companies Act

Stock companies must keep the things set forth in the each of the following items (hereinafter in this Article referred to as "financial statements, etc.") at its head office for the period provided for in each relevant item:

financial statements and business reports for each business year and annexed detailed statements thereof (if the provisions of Article 436, paragraph (1) or (2) apply, including audit reports or financial audit reports):five years from the day one week (or, for companies with board of directors, two weeks) prior to the day of the annual shareholders meeting (or, in cases provided for in Article 319, paragraph (1), from the day when the proposal under that paragraph is made); and

provisional financial statements (if the provisions of paragraph (2) of the preceding Article apply, including audit reports and financial audit reports):five years from the day when the provisional financial statements are prepared.

A stock company must keep copies of the financial statements, etc. set forth in the following items at its branch offices for the period provided for in each relevant item; provided, however, that this does not apply to the cases where the financial statements, etc. have been prepared as an electronic or magnetic record and the stock company adopts the measures prescribed by Ministry of Justice Order as measures enabling its branch offices to respond to the request set forth in item (iii) and item (iv) of the following paragraph:

financial statements, etc. set forth in item (i) of the preceding paragraph:three years from the day one week (or, for a company with board of directors, two weeks) prior to the day of the annual shareholders meeting (or, in cases provided for in Article 319, paragraph (1), from the day when the proposal under that paragraph is made); and

financial statements, etc. set forth in item (ii) of the preceding paragraph:three years from the day when the provisional financial statements under that item are prepared.

The shareholders and creditors may submit the following requests at any time during the business hours of the stock company; provided, however, that the fees designated by relevant stock company are required to be paid in order to submit the requests set forth in item (ii) or (iv):

if the financial statements, etc. are prepared in writing, requests for inspection of relevant documents or copies of relevant documents;

requests for a transcript or extract of the document referred to in the preceding item;

if the financial statements, etc. have been prepared as an electronic or magnetic record, a request to inspect anything that is used in the manner prescribed by Ministry of Justice Order to display the information recorded in that electronic or magnetic record; or

a request to be provided with the information recorded in the electronic or magnetic record referred to in the preceding item by an electronic or magnetic means that the stock company has designated, or a request to be issued a document showing that information.

If it is necessary for the purpose of exercising the rights of a member of the parent company of a stock company, the relevant member of the parent company may, with the permission of the court, make the requests set forth in each item of the preceding paragraph with respect to the financial statements, etc. of relevant stock company; provided, however, that, in order to make the requests set forth in item (ii) or (iv) of that paragraph, the fees designated by relevant stock company are required to be paid.

The court may, in response to a petition or ex officio, order the parties to a suit to submit financial statements and the annexed detailed statements accompanying them, in whole or in part.

A company with financial auditor may, pursuant to the provisions of Ministry of Justice Order, prepare consolidated financial statements (meaning statements prescribed by Ministry of Justice Order as necessary and appropriate in order to indicate the status of the assets and profits and losses of a group of enterprises comprised of relevant company with financial auditor and its subsidiary companies; the same applies hereinafter) for each business year.

Consolidated financial statements may be prepared as an electronic or magnetic record.

An entity that is a large company as at the last day of a business year and must submit an annual securities report to the Prime Minister pursuant to the provisions of Article 24, paragraph (1) of the Financial Instruments and Exchange Act must prepare consolidated financial statements for relevant business year.

Consolidated financial statements must be audited by the company auditors (or, audit and supervisory committee for a company with audit and supervisory committee, and for a company with nominating committee, etc., by the audit committee) and financial auditors pursuant to the provisions of Ministry of Justice Order.

If a company with financial auditor is a company with board of directors, the consolidated financial statements audited as provided for in the preceding paragraph must be approved by the board of directors.

If a company with financial auditor is a company with board of directors, directors must, when giving notice to call annual shareholders meetings, provide to shareholders, pursuant to the provisions of Ministry of Justice Order, consolidated financial statements that have been approved as provided for in the preceding paragraph.

At companies with financial auditor set forth in the following items, directors must submit or provide the consolidated financial statements provided for in each relevant item to the annual shareholders meetings. In these cases, the contents of the consolidated financial statements provided for in each relevant item and the results of the audit under paragraph (4) must be reported to the annual shareholders meeting:

a company with financial auditor which is a company with board of directors:consolidated financial statements approved as provided for in paragraph (5);

a company with financial auditor other than that set forth in the preceding item:consolidated financial statements audited as provided for in paragraph (4).

Unless it is otherwise provided for in this Act, the amount of stated capital of a stock company is the amount of properties contributed by persons who become shareholders at the incorporation or share issue.

The amount not exceeding half of the amount of the contribution under the preceding paragraph may not be recorded as stated capital.

The amount not recorded as stated capital pursuant to the provisions of the preceding paragraph must be recorded as capital reserves.

If a stock company pays dividends of surplus, it must record an amount equivalent to one tenth of the amount of the deduction from surplus as a result of the payment of relevant dividends of surplus as capital reserves or retained earnings reserves (hereinafter referred to as "reserves"), pursuant to the provisions of Ministry of Justice Order.

The amount to be recorded as stated capital or reserves at mergers, absorption-type company splits, incorporation-type company splits, share exchanges, share transfers or partial share exchanges is prescribed by Ministry of Justice Order.

The amount to be recorded as stated capital or reserves from issuing shares pursuant provisions on the matters set forth in Article 361, paragraph (1), item (iii), item (iv), or item (v),(b) pursuant to the articles of incorporation or a resolution of the shareholders meeting or pursuant to a decision by the remuneration committee on the matters provided in Article 409, paragraph (3), item (iii), item (iv) or item (v),(b) is prescribed by Ministry of Justice Order.

The amount of the surplus of a stock company is the amount obtained by subtracting the sum of the amounts set forth in item (v) through (vii) from the sum of the amounts set forth in item (i) through (iv):

the amount obtained by subtracting the sum of the amounts set forth in (c) through (e) from the sum of the amounts set forth in (a) through (b) as at the last day of the most recent business year:

the amount of assets;

the sum of the book value of treasury shares;

the amount of debt;

the sum of the amount of stated capital and reserves;

beyond what is set forth in (c) and (d), the sum of the amounts recorded in each account title prescribed by Ministry of Justice Order;

if treasury shares are disposed of after the last day of the most recent business year, the amount obtained by subtracting the book value of relevant treasury shares from the amount of the value received in exchange for relevant treasury shares;

if the amount of stated capital is reduced after the last day of the most recent business year, the amount of relevant reduction (excluding the amount under paragraph (1), item (ii) of the following Article);

if the reserves are reduced after the last day of the most recent business year, the amount of relevant reduction (excluding the amount under Article 448, paragraph (1), item (ii));

if treasury shares are canceled pursuant to the provisions of Article 178, paragraph (1) after the last day of the most recent business year, the amount of the book value of relevant treasury shares;

the sum of the following amounts if dividend of surplus is paid after the last day of the most recent business year:

the total book value of the dividend property referred to in Article 454, paragraph (1), item (i) (excluding the book value of relevant dividend property assigned to shareholders who exercised the rights to demand distribution of monies provided for in paragraph (4), item (i) of that Article);

the sum of the amounts of the money delivered to shareholders who exercised the rights to demand distribution of monies provided for in Article 454, paragraph (4), item (i); and

the sum of the amounts of money paid to shareholders of disqualified shares provided for in Article 456;

beyond what is set forth in the preceding two items, the sum of the amounts recorded in each account title prescribed by Ministry of Justice Order.