Notice of Convocation of the 9th Annual General Meeting of Shareholders

Transcription

1 Disclaimer: Please note that the following is a translation of the original Japanese documents prepared only for reference purposes. The Japanese original shall take precedence in the case of any discrepancies between this translation and the original. The Company assumes no responsibility for direct, indirect or any other forms of damages arising from this translation. To Our Shareholders, Securities code: 9412 June 8, 2016 Shigeki Nishiyama, Representative Director, Chairman SKY Perfect JSAT Holdings Inc , Akasaka 1-chome, Minato-ku, Tokyo Notice of Convocation of the 9th Annual General Meeting of Shareholders You are cordially invited to attend the 9th Annual General Meeting of Shareholders of SKY Perfect JSAT Holdings Inc. (the Company ) to be held as described below. If you are unable to attend the meeting, you can exercise your voting rights either in writing or via electromagnetic means (Internet, etc.). In that case, please review the attached Reference Documents for General Meeting of Shareholders and exercise your voting rights following the Guide to Exercising Voting Rights on page 3. Details 1. Date and Time: Friday, June 24, 2016, at 10:00 a.m. (The reception will commence at 9:00 a.m.) 2. Venue: 10-4, Toranomon 2-chome, Minato-ku, Tokyo Hotel Okura Tokyo Ascot Hall (B2F, South Wing) 3. Purpose of the Meeting Matters to be reported: 1. Report on the Business Report, the Consolidated Financial Statements and Audit Reports of the Accounting Auditor and the Board of Corporate Auditors for the Consolidated Financial Statements for the 9th term (from April 1, 2015 to March 31, 2016) 2. Report on the Non-consolidated Financial Statements for the 9th term (from April 1, 2015 to March 31, 2016) Matters to be resolved: Proposal: Election of Twelve (12) Board Directors 4. Guide to Exercising Voting Rights Please refer to the Guide to Exercising Voting Rights on page 3. Among the documents to be provided to this Notice, the items below are posted on the Company s Internet website pursuant to laws and regulations, as well as Article 14 of the Articles of Incorporation; therefore, they are not included in the documents attached to this Notice. Notes to the Consolidated Financial Statements Notes to the Non-consolidated Financial Statements Accordingly, the Consolidated Financial Statements and Non-consolidated Financial Statements that accompany this Notice are part of the Consolidated Financial Statements and Non-consolidated Financial Statements, which have been audited by the Corporate Auditors and the Accounting Auditor in preparing the Audit Report. 1

2 Any corrections in the Reference Documents for General Meeting of Shareholders, Business Report, Non-consolidated Financial Statements, or Consolidated Financial Statements will be posted on the Company s website. The Company s website: (Japanese only) 2

3 Guide to Exercising Voting Rights You can exercise your voting rights in the following three ways. Attending the meeting in person: Please present the enclosed voting form at the reception desk upon your arrival at the meeting. (It is not necessary to seal it.) Date and Time: Venue: Friday, June 24, 2016, at 10:00 a.m. (The reception will commence at 9:00 a.m.) 10-4, Toranomon 2-chome, Minato-ku, Tokyo Hotel Okura Tokyo Ascot Hall (B2F, South Wing) Exercise of voting rights in writing (by mail): Please indicate your approval or disapproval on the enclosed voting form, and mail it without affixing a stamp. Deadline for exercising voting rights: The form shall arrive no later than 5:30 p.m. on Thursday, June 23, 2016 Exercise of voting rights via the Internet: Please access the website ( for exercising voting rights through a PC, enter the voting rights exercise code and password indicated on the enclosed voting form, and input your approval or disapproval according to the instructions on the screen. Please refer to the Guide to Exercising Voting Rights via the Internet on page 4 for further details. Deadline for exercising voting rights: The process shall be completed no later than 5:30 p.m. on Thursday, June 23, 2016 If you are institutional investors: You can exercise your voting rights through the platform for exercising voting rights operated by ICJ Inc. by applying in advance to use the platform. 3

4 << Guide to Exercising Voting Rights via the Internet >> 1. If you are exercising your voting rights via the Internet, please read the following first. If you prefer to exercise your voting rights via the Internet, please accept the following conditions before exercising your rights. If you plan to attend the meeting in person, you do not need to exercise your voting rights in writing (by mail) or via the Internet. (1) You can only exercise your voting rights via the Internet by accessing the voting rights exercise website designated by the Company (Please refer to the URL below.). Please log in with the voting rights exercise code and password printed on the right-hand side of the enclosed voting form and enter information in accordance with the instructions on the screen. For security reasons, it is necessary for you to change your password when you log in for the first time. (Japanese only) (2) Please input approval or disapproval of the proposals no later than the end of business hours of the Company (5:30 p.m.) on Thursday, June 23, The Company kindly requests that you enter your vote early. (3) If you exercise your voting rights both in writing (by mail) and via the Internet, only your vote via the Internet shall be deemed effective. (4) If you exercise your voting rights several times via the Internet, only your final vote shall be deemed effective. (5) Your voting rights exercise code and password (including the password after you have changed it) shall be effective only for this General Meeting of Shareholders. At the time of the next General Meeting of Shareholders, a new voting rights exercise code and password will be issued. (6) You shall bear your own expenses for connection to the Internet. << Notes >> The voting rights exercise code and password are a means to confirm that the person voting is the relevant shareholder. The Company will not contact you to ask for your password. If you enter your password incorrectly for a certain number of times, the password will be locked and you will no longer be able to use it. If this occurs, please complete the procedures indicated in the guidance on the screen. Although operational checks have been carried out for the voting rights exercise website for common Internet connection equipment, there is a possibility that you may be unable to use the website due to the equipment you are using. 4

5 System requirements are as follows: The resolution of your monitor screen should be at least (SVGA). The following applications must be installed. i) Internet Explorer Ver. 7 or later ii) Adobe Reader Ver. 9 or later * Internet Explorer are the registered trademarks or trademarks of Microsoft Corporation used in the United States and other countries. * Adobe and Reader are registered trademarks or trademarks of Adobe Systems Incorporated used in the United States and other countries. * Please note that access to the voting rights exercise website may not be possible even when the above system requirements are satisfied due to the computer you are using, the system settings, or other software installed. Set your Internet browser to accept cookies. 2. Security Encrypted communication (SHA-2) is used to prevent falsification and spoofing by third parties. 3. Inquiries If you have any inquiries, please contact the Stock Transfer Agency Dept. of Mizuho Trust & Banking Co., Ltd., which is the Company s shareholder register administrator, as shown below. (1) Inquiries regarding operation of the voting rights exercise website (toll free only from Japan) (9 a.m. to 9 p.m. on weekdays) (2) Inquiries regarding share procedures other than (1) above (toll free only from Japan) (9 a.m. to 5 p.m. on weekdays) 5

6 Reference Documents for General Meeting of Shareholders Proposal: Election of Twelve (12) Board Directors The terms of office of all the twelve (12) Board Directors will expire at the conclusion of this meeting. Accordingly, we request the election of twelve (12) Board Directors. The candidates for Board Directors are as follows: No. Name Current position and responsibilities in the Company 1 Shigeki Nishiyama Representative Director, Chairman In charge of Internal Control Reelection 2 Shinji Takada Representative Director, President Reelection 3 Masao Nito Board Director In charge of Corporate Planning & Strategy Chief Risk Management Officer Reelection Chief Information Management Officer Chief Group Compliance Officer 4 Mitsunobu Komori Board Director In charge of Engineering & Operations Reelection (CTO: Chief Technical Officer) 5 Koki Koyama Board Director In charge of Space & Satellite Business Reelection 6 Shinji Yokomizu Board Director In charge of Finance & Accounting Reelection (CFO: Chief Financial Officer) 7 Jiro Komaki Board Director In charge of Multichannel Pay TV Business Reelection 8 Iwao Nakatani Outside Board Director Reelection, Outside, Independent 9 Masakatsu Mori Outside Board Director Reelection, Outside, Independent 10 Kazunobu Iijima Board Director Reelection 11 Michiaki Ogasawara Outside Board Director Reelection, Outside 12 Kiyoshi Kosaka - New election, Outside New election: Candidate to be newly elected as a Board Director Reelection: Candidate to be reelected as a Board Director Outside: Candidate for Outside Board Director Independent: Independent Directors/Auditors defined by the Tokyo Stock Exchange (Reference) Criteria for judging the independence of outside officers [Criteria for judging independence] To judge the independence of outside Board Directors/Corporate Auditors objectively, the Company takes into account the independence criteria set forth by the Companies Act and the securities exchange on which its shares are listed, and concludes that independence is insufficient if any one of the criteria below is met. 1) A person who executes the Business of a customer with which the Company and its material operating subsidiary, SKY Perfect JSAT Corporation, have transacted business during the immediately preceding business year in excess of 2% of the Company s consolidated sales. 2) A person who executes the Business of a customer with which the Company and its material operating subsidiary, SKY Perfect JSAT Corporation, have transacted business during the immediately preceding business year in excess of the greater of 2% of the customer s sales and 100 million. 3) A person who belongs to a law firm, auditing firm, tax accounting firm, or consulting firm, etc. that has been paid cash or other assets worth either 10 million or more, or 2% of the firm s or individual s sales, whichever is greater other than Board of Director/Corporate Auditor s compensation by the Company and its material operating subsidiary, SKY Perfect JSAT Corporation, during the immediately preceding business year. 4) A person who is a close relative within the second degree of kinship of a Board Director, executive officer or important employee of a rank of general manager or higher of the Company and its subsidiaries (the Group ). 5) A person who is a close relative within the second degree of kinship of a person who falls under any of items 1) to 3) (excluding persons who are not important employees). 6

7 [Criteria for immateriality] Under the Company s criteria for immateriality, which is for judging whether a transaction or donation does or does not have a risk of influencing the judgment of shareholders exercise of votes, if a transaction or donation is of a scale that falls within the following criteria, the transactions with that transacting party or the donations to that transacting party are judged not to have an effect on the independence of the concerned outside Board Director/Corporate Auditor, and mention of such transaction or donation is omitted. 1) The amount of the transactions conducted with the Company during the immediately preceding fiscal year is less than 10 million. 2) The amount of the donations received from the Company during the immediately preceding fiscal year is less than 10 million. 7

8 1. Shigeki Nishiyama (Born Jan. 3, 1951) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined C. Itoh & Co., Ltd. (currently ITOCHU Corporation) Apr Jun Executive Officer, ITOCHU Corporation Apr Managing Executive Officer, ITOCHU Corporation Solutions Corporation Jun Executive Managing Director, ITOCHU Corporation Apr Apr President of Aerospace, Electronics & Multimedia Company, ITOCHU Corporation Corporation Apr Senior Managing Director, ITOCHU Corporation Apr May 2008 Executive Vice President, COO in charge of IT Support Services Group, ITOCHU Techno- JSAT Corporation (present) Solutions Corporation Jun Jun Director & Executive Vice President, COO, ITOCHU Techno-Solutions Corporation Director & Executive Vice President, COO, in charge of Distribution Systems Group No.2/IT Support Services Group, ITOCHU Techno- Director& Executive Vice President, COO, in charge of Services Business Segment/IT Services Support Group, ITOCHU Techno-Solutions Chairman, the Company Representative Director, Chairman, SKY Perfect Representative Director, Chairman, the Company (present) [Responsibilities in the Company] Internal Control Number of the Company s shares held 34,400 Reasons for nomination Mr. Shigeki Nishiyama was appointed Representative Director, Chairman in 2011, and has led our Group s management based on extensive experience obtained at a general trading company. In the expectation of overseeing the entire Group, while implementing strategies for our Group s future business growth and corporate performance; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Shigeki Nishiyama and the Company. 8

9 2. Shinji Takada (Born Jun. 6, 1952) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined Nippon Television Network Corporation (currently Nippon Television Holdings, Inc.) Jun Operating Officer, Director General of Sales Division, Nippon Television Network Corporation Jul Deputy Director General of Media Business (currently Nippon Television Holdings, Inc.) Strategy Planning & Development Division, Nippon Jun Television Network Corporation (currently Nippon Television Holdings, Inc.) Representative Director, Senior Executive Vice President, the Company Representative Director, Senior Executive Vice Jun Managing Executive Officer, SKY Perfect President, SKY Perfect JSAT Corporation Communications Inc. (currently SKY Perfect JSAT Jul Unit President of Multichannel Pay TV Business Jun Corporation) Director General of Media Business Strategy Planning & Development Division, and Director General of Content Business Division, Nippon Television Network Corporation (currently Nippon Television Holdings, Inc.) Apr Unit, SKY Perfect JSAT Corporation Representative Director, President, the Company (present) Representative Director, President & Chief Executive Officer, SKY Perfect JSAT Corporation (present) Number of the Company s shares held 45,400 Reasons for nomination Mr. Shinji Takada was appointed Representative Director, President of the Company in 2011, and has provided the Group s management with strong leadership. He is expected to appropriately supervise the entire Group, while implementing strategies for our Group s future business growth and improved corporate performance, based on a wide range of knowledge of the communications and broadcasting industry, as well as extensive experience as a corporate manager; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Shinji Takada and the Company. 9

10 3. Masao Nito (Born May 11, 1955) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined Mitsui Engineering and Shipbuilding Co., Ltd. Jun Oct Board Director, the Company (present) Director of the Board, Senior Executive Vice Aug Joined Japan Communications Satellite Company, Inc. (currently SKY Perfect JSAT Corporation) President (present), Group President of SKY PerfecTV! Group, SKY Perfect JSAT Corporation Apr Director, Japan Digital Broadcasting Services Inc. (currently SKY Perfect JSAT Corporation) Apr Group President of Engineering & Operations Group, SKY Perfect JSAT Corporation Jun Director, JSAT Corporation (currently SKY Perfect Jul JSAT Corporation) Group President of Corporate Planning & Strategy Group, SKY Perfect JSAT Corporation Managing Director, SKY Perfect Communications May 2015 Board Director, NIKKATSU CORPORATION Inc. (currently SKY Perfect JSAT Corporation) (present) Jun Apr Jun President and Representative Director, SKY Perfect Communications Inc. (currently SKY Perfect JSAT Corporation) Representative Director, President, the Company Representative Director, President & Chief Executive Officer, SKY Perfect Communications Inc. (currently SKY Perfect JSAT Corporation) Jul Unit President of Corporate Planning & Administration Unit, SKY Perfect JSAT Corporation (present) [Responsibilities in the Company] Corporate Planning & Strategy Chief Risk Management Officer Chief Information Management Officer Chief Group Compliance Officer Number of the Company s shares held 46,100 Reasons for nomination Mr. Masao Nito is expected to implement strategies for our Group s future business growth and improved corporate performance, while appropriately supervising the entire Group, based on extensive experience and knowledge across operations as a manager at the Company and Group companies; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Masao Nito and the Company. 10

11 4. Mitsunobu Komori (Born Sep. 18, 1952) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined Nippon Telegraph and Telephone Public Corporation Jun President & CEO, DOCOMO Mobile Inc. (currently DOCOMO CS, Inc.) Jul General Manager of Nagano Branch, NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION Jun Jul Senior Executive Vice President, SKY Perfect JSAT Corporation (present) Unit President of Engineering & Operations Unit, Jul Senior Manager of Department V, NIPPON TELEGRAPH AND TELEPHONE CORPORATION and Group President of Satellite Planning & Operations Group, SKY Perfect JSAT Corporation (present) Jun Jul Jun Senior Vice President, Managing Director of the Core Network Engineering Department, Network Division, NTT DOCOMO, INC. Senior Vice President, General Manager of Kanagawa Branch, NTT DOCOMO, INC. Member of the Board of Directors, Executive Vice President, Managing Director of the R&D Center (Chief Technical Officer), NTT DOCOMO, INC. Jun Board Director, the Company (present) Director of the Board, SKY Perfect JSAT Corporation (present) [Responsibilities in the Company] Engineering & Operations (CTO: Chief Technical Officer) Number of the Company s shares held 5,800 Reasons for nomination Mr. Mitsunobu Komori is expected to supervise the entire Group appropriately, while implementing strategies for our Group s future business growth and improved corporate performance as Chief Technical Officer (CTO), based on a wide range of knowledge of the communications industry, as well as extensive experience as a corporate manager; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Mitsunobu Komori and the Company. 11

12 5. Koki Koyama (Born Oct. 24, 1954) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined Yamaha Motor Co., Ltd. Jun May 1986 Joined Japan Communications Satellite Company, Inc. (currently SKY Perfect JSAT Corporation) Jul General Manager of Telecommunications Division, Sales Department, Japan Satellite Systems Inc. (currently SKY Perfect JSAT Corporation) May 2005 General Manager of Corporate Planning Division, JSAT Corporation (currently SKY Perfect JSAT Corporation) Apr Oct Apr Unit President of Corporate Planning Strategy Unit, the Company Executive Officer, Group President of Sales Group I, Satellite Business Unit, SKY Perfect JSAT Corporation Deputy Group President of Satellite Business Group, SKY Perfect JSAT Corporation Managing Executive Officer, Group President of Space & Satellite Business Group, Space & Satellite Business Unit, SKY Perfect JSAT Corporation (present) Nov Managing Director, JSAT IOM Limited Dec Representative Director, President, DSN Corporation (present) Jun Jun Director, Satellite Network, Inc. (present) Board Director, the Company (present) Director of the Board, Senior Managing Executive Officer, Unit President of Space & Satellite Business Unit, SKY Perfect JSAT Corporation (present) [Responsibilities in the Company] Space & Satellite Business Number of the Company s shares held 35,500 Reasons for nomination Mr. Koki Koyama is expected to oversee the entire Group appropriately, while implementing Space & Satellite Business strategies for the Group s business growth and improved corporate performance, based on a wide range of knowledge, as well as extensive experience as a corporate manager in the Company and Group companies; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Koki Koyama and the Company. 12

13 6. Shinji Yokomizu (Born Nov. 21, 1954) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined C. Itoh & Co., Ltd. (currently ITOCHU Corporation) Jun Board Director, the Company (present) Director of the Board, Senior Managing Executive Apr General Manager of Finance Division, ITOCHU Corporation Jul Officer, SKY Perfect JSAT Corporation (present) Deputy Unit President of Corporate Planning & Jun Executive Officer, Deputy Group President of Corporate Service Group, SKY Perfect JSAT Corporation Administration Unit, SKY Perfect JSAT Corporation (present) Jul Director & Treasurer, JSAT International Inc. (present) Nov Finance Accounting Director, JSAT IOM Limited Dec Corporate Auditor, DSN Corporation Jun Managing Executive Officer, Group President of Corporate Service Group, SKY Perfect JSAT Corporation Director, SKY Perfect Customer-relations Corporation (present) [Responsibilities in the Company] Finance & Accounting (CFO: Chief Financial Officer) Number of the Company s shares held 18,100 Reasons for nomination Mr. Shinji Yokomizu is expected to supervise the entire Group appropriately, while implementing financial strategies for our Group s business growth and improved corporate performance as Chief Financial Officer (CFO), based on extensive knowledge of finance and accounting and experience as a corporate manager; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Shinji Yokomizu and the Company. 13

14 7. Jiro Komaki (Born Apr. 22, 1958) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined Fuji Television Network, Inc. (currently Fuji Media Holdings, Inc.) Jun Jul Deputy Group President of Content Business Group, SKY Perfect Communications Inc. (currently SKY Perfect JSAT Corporation) Jun Executive Director, Content Creation and Distribution Department, Fuji Television Network, Inc. (currently Fuji Media Holdings, Inc.) Dec Executive Director, Multimedia Broadcasting Co., Jun Ltd. (currently mmbi, Inc.) Managing Executive Officer, Group President of Broadcasting Business Group, Multichannel Pay TV Business Unit, SKY Perfect JSAT Corporation (present) Board Director, SKY Perfect Broadcasting Corporation (present) Unit President of Multichannel Pay TV Business Unit, SKY Perfect JSAT Corporation (present) Representative Director, President, SKY Perfect Entertainment Corporation (present) Board Director, the Company (present) Director of the Board, Senior Managing Executive Officer, SKY Perfect JSAT Corporation (present) [Responsibilities in the Company] Multichannel Pay TV Business Number of the Company s shares held 8,600 Reasons for nomination Mr. Jiro Komaki is expected to supervise the entire Group appropriately, while implementing Multichannel Pay TV Business strategies for our Group s business growth and corporate performance, based on extensive knowledge of the broadcasting industry and experience as a corporate manager; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Jiro Komaki and the Company. 14

15 8. Iwao Nakatani (Born Jan. 22, 1942) Reelection, Outside, Independent Career summary, position and responsibilities and important concurrent positions Oct Professor, Hitotsubashi University Oct Director, ASKUL Corporation Jun Member of the Board, Sony Corporation Sep President, Tama University Apr Chairman, the Board of Counselors, Sanwa Mar Director, WDI Corporation (present) Research Institute Corp. (currently Mitsubishi UFJ Research and Consulting Co., Ltd.) (present) Jun Member, Board of Directors, The Fuji Fire and Marine Insurance Company, Limited Jun Director, JSAT Corporation (currently SKY Perfect Apr Board Director, the Company (present) JSAT Corporation) Feb Chairman, Fushiki-an (present) Number of the Company s shares held 29,700 Reasons for nomination Mr. Iwao Nakatani is a candidate for an outside Board Director. He is expected to provide advice for further strengthening the Company s management system as well as appropriate guidance and supervision, based on his high level of expertise related to the economy and business administration; therefore, he is proposed as a candidate for reelection as an outside Board Director. The Company has registered Mr. Iwao Nakatani with the Tokyo Stock Exchange as Independent Director defined by the Exchange. Special interest between the candidate and the Company There is no special interest between Mr. Iwao Nakatani and the Company. Reason why the Company judges that the candidate for outside Board Director can execute his duties as outside Board Director appropriately even if he has had no experience of involvement in corporate management in the past other than serving as outside Board Director or outside Corporate Auditor The Company judges, based on the reasons above for electing the candidates, that Mr. Iwao Nakatani can execute his duties as outside Board Director appropriately even if he has had no experience of involvement in corporate management in the past other than serving as outside Board Director or outside Corporate Auditor. Term of office as outside Board Director Nine (9) years and three (3) months at the conclusion of this meeting. Fact that the candidate for outside Board Director has been non-executive Board Director of our subsidiaries Mr. Iwao Nakatani served as non-executive Director of JSAT Corporation (currently SKY Perfect JSAT Corporation) from June 2000 to March Limited liability agreement The Company has entered into an agreement with Mr. Iwao Nakatani to limit his liabilities as provided for in Article 427, paragraph 1 of the Companies Act. If the reelection of the candidate is approved, the Company plans to continue the agreement. The following is an outline of the limited liability agreement: The maximum amount of the liability under the said agreement shall be 10 million or the amount prescribed by laws and regulations, whichever is higher. 15

16 9. Masakatsu Mori (Born Jan. 22, 1947) Reelection, Outside, Independent Career summary, position and responsibilities and important concurrent positions Apr Joined Arthur Andersen & Co. (currently Accenture Japan Ltd.) Jun Director of the Board, SKY Perfect Communications Inc. (currently SKY Perfect JSAT May 1971 Qualified as certified public accountant Corporation) Sep Partner (business partner), Arthur Andersen & Co. (currently Accenture Japan Ltd.) Sep Apr Director and Chairman, Accenture Japan Ltd. Board Director, the Company (present) Feb President of Andersen Consulting (currently Accenture Japan Ltd.) Board Member of Andersen Consulting (Global) (currently Accenture) Sep Oct Jun Corporate Advisor, Accenture Japan Ltd. President, International University of Japan Director, STANLEY ELECTRIC CO., LTD. (present) Apr Representative Director and Chairman, Accenture Japan Ltd. Jun Director, YAMATO HOLDINGS CO., LTD. (present) Nov Vice Chairman, International University of Japan (present) Mar Audit & Supervisory Board Member, Kirin Holdings Company, Limited (present) Number of the Company s shares held 30,600 Reasons for nomination Mr. Masakatsu Mori is a candidate for an outside Board Director. He is expected to provide advice for further strengthening the Company s management system as well as appropriate guidance and supervision, based on his extensive knowledge and experience as a consulting firm manager; therefore, he is proposed as a candidate for reelection as an outside Board Director. The Company has registered Mr. Masakatsu Mori with the Tokyo Stock Exchange as Independent Director defined by the Exchange. Special interest between the candidate and the Company There is no special interest between Mr. Masakatsu Mori and the Company. Fact pertaining to the occurrence of improper operation while in office, preventive measures against such occurrence and ways to deal with the occurrence afterwards With respect to STANLEY ELECTRIC CO., LTD. at which Mr. Masakatsu Mori is currently serving as Outside Director, in March 2013 when he was incumbent Director, the Japan Fair Trade Commission made reference that the company had violated the Antimonopoly Act of Japan regarding the acceptance of order for automotive lamps. He has routinely provided comments as appropriate on importance of regulatory compliance and its thoroughness on occasion such as meeting of the Board of Directors, and he has offered various recommendations and opinions for further strengthening of the internal control aimed at appropriate factfinding investigation and preventive measures after the above fact was revealed. Term of office as outside Board Director Nine (9) years and three (3) months at the conclusion of this meeting. Fact that the candidate for outside Board Director has been non-executive Board Director of our subsidiaries Mr. Masakatsu Mori served as non-executive Director of the Board of SKY Perfect Communications Inc. (currently SKY Perfect JSAT Corporation) from June 2005 to March Limited liability agreement The Company has entered into an agreement with Mr. Masakatsu Mori to limit his liabilities as provided for in Article 427, paragraph 1 of the Companies Act. If the reelection of the candidate is approved, the Company plans to continue the agreement. The following is an outline of the limited liability agreement: The maximum amount of the liability under the said agreement shall be 10 million or the amount prescribed by laws and regulations, whichever is higher. 16

17 10. Kazunobu Iijima (Born Jan. 4, 1947) Reelection Career summary, position and responsibilities and important concurrent positions Apr Joined Mitsubishi Corporation Jun Executive Managing Director, Executive Director of Jun Director of the Board, Group President of Sales Group, Space Communications Corporation Corporate Planning Department, Fuji Television Network, Inc. (currently Fuji Media Holdings, Inc.) (currently SKY Perfect JSAT Corporation) Apr Board Director, the Company (present) Apr General Manager of Media Broadcasting Department, Mitsubishi Corporation Jun Senior Executive Managing Director, Fuji Television Network, Inc. (currently Fuji Media May 1997 Joined Fuji Television Network, Inc. (currently Fuji Holdings, Inc.) Media Holdings, Inc.) Oct Senior Executive Managing Director, Fuji Jun Group President of Broadcasting Group, Japan Sky Television Network, Inc. Broadcasting Co., Ltd (currently SKY Perfect JSAT Corporation) Jun President, THE SANKEI BUILDING CO., LTD. (present) Jun Executive Director of Corporate Planning Sep Director, GREE, Inc. (present) Department, Fuji Television Network, Inc. Nov Chairman, Cool Japan Fund Inc. (present) (currently Fuji Media Holdings, Inc.) Jun Board Director, WOWOW INC. (present) Number of the Company s shares held 0 Reasons for nomination Mr. Kazunobu Iijima is expected to provide advice for further strengthening the Company s management system as well as appropriate guidance and supervision, based on his accumulated high level of expertise as a corporate manager, and his extensive knowledge and experience in the communications and broadcasting industry; therefore, he is proposed as a candidate for reelection as a Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Kazunobu Iijima and the Company. Limited liability agreement The Company has entered into an agreement with Mr. Kazunobu Iijima to limit his liabilities as provided for in Article 427, paragraph 1 of the Companies Act. If the reelection of the candidate is approved, the Company plans to continue the agreement. The following is an outline of the limited liability agreement: The maximum amount of the liability under the said agreement shall be 10 million or the amount prescribed by laws and regulations, whichever is higher. 17

18 11. Michiaki Ogasawara (Born Jan. 29, 1954) Reelection, Outside Career summary, position and responsibilities and important concurrent positions Apr Joined Ministry of Posts and Telecommunications (currently Ministry of Internal Affairs and Jul Director-General of Global ICT Strategy Bureau, Ministry of Internal Affairs and Communications Communications) Jan Vice-Minister for Policy Coordination (in charge of Jan Director-General of Tohoku Regional Bureau of Postal Services and Communications) Telecommunications, Ministry of Internal Affairs and Communications Sep Vice-Minister of Internal Affairs and Communications Jan Director-General of Kanto Regional Bureau of Dec President, The ITU Association of Japan (present) Telecommunications, Ministry of Internal Affairs and Communications Jun Director, Daiwa Securities Group Inc. (present) Board Director, the Company (present) Feb Deputy Director-General of Minister s Secretariat (in charge of Information and Communications Policy Bureau), Ministry of Internal Affairs and Communications Jul Senior Advisor, Sompo Japan Nipponkoa Insurance Inc. (present) Aug Director-General of Local Public Service Personnel Department, Local Administration Bureau, Ministry of Internal Affairs and Communications Jul Director-General of Civil Protection and Disaster Management Department, Fire and Disaster Management Agency, Ministry of Internal Affairs and Communications Jul Director-General of Information and Communications Policy Bureau, Ministry of Internal Affairs and Communications Number of the Company s shares held 1,200 Reasons for nomination Mr. Michiaki Ogasawara is a candidate for an outside Board Director. He is expected to provide advice for further strengthening the Company s management system as well as appropriate guidance and supervision, based on his extensive experience and knowledge related to public administration; therefore, he is proposed as a candidate for reelection as an outside Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Michiaki Ogasawara and the Company. Term of office as outside Board Director One (1) year at the conclusion of this meeting. Reason why the Company judges that the candidate for outside Board Director can execute his duties as outside Board Director appropriately even if he has had no experience of involvement in corporate management in the past other than serving as outside Board Director or outside Corporate Auditor The Company judges, based on the reasons above for electing the candidates, that Mr. Michiaki Ogasawara can execute his duties as outside Board Director appropriately even if he has had no experience of involvement in corporate management in the past other than serving as outside Board Director or outside Corporate Auditor. Limited liability agreement The Company has entered into an agreement with Mr. Michiaki Ogasawara to limit his liabilities as provided for in Article 427, paragraph 1 of the Companies Act. If the reelection of the candidate is approved, the Company plans to continue the agreement. The following is an outline of the limited liability agreement: The maximum amount of the liability under the said agreement shall be 10 million or the amount prescribed by laws and regulations, whichever is higher. 18

19 12. Kiyoshi Kosaka (Born Mar. 28, 1951) New election, Outside Career summary, position and responsibilities and important concurrent positions Apr Joined Nippon Telegraph and Telephone Public Corporation Jun Senior Vice President and Director of Department I, NIPPON TELEGRAPH AND TELEPHONE Oct General Manager of Kyoto Branch, NIPPON CORPORATION TELEGRAPH AND TELEPHONE CORPORATION Jun Senior Vice President and Director of the Department of General Affairs, NIPPON Jul General Manager of Kyoto Branch, NIPPON TELEGRAPH AND TELEPHONE WEST TELEGRAPH AND TELEPHONE CORPORATION CORPORATION Jun Representative Director and President, NTT Sep Senior Manager of Department V, NIPPON BUSINESS ASSOCIE Corporation TELEGRAPH AND TELEPHONE CORPORATION Jun Audit & Supervisory Board Member, NIPPON TELEGRAPH AND TELEPHONE Jul General Manager of Personnel Department, NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION CORPORATION (present) Jun Senior Vice President and Director of the Personnel Department, NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION Number of the Company s shares held 0 Reasons for nomination Mr. Kiyoshi Kosaka is a candidate for an outside Board Director. He is expected to provide advice for further strengthening the Company s management system as well as appropriate guidance and supervision, based on his high level of expertise as a corporate manager, and his extensive experience and knowledge of the communication industry; therefore, he is proposed as a candidate for new election as an outside Board Director. Special interest between the candidate and the Company There is no special interest between Mr. Kiyoshi Kosaka and the Company. Limited liability agreement If the election of Mr. Kiyoshi Kosaka, who is newly proposed as a candidate for an outside Board Director, is approved, the Company will enter into a limited liability agreement with him, pursuant to Article 427, paragraph 1 of the Companies Act. The following is an outline of the limited liability agreement: The maximum amount of the liability under the said agreement shall be 10 million or the amount prescribed by laws and regulations, whichever is higher. 19

20 (Attached documents) Business Report (From April 1, 2015 to March 31, 2016) 1. Current status of the Group (1) Business operations in the fiscal year ended March 31, 2016 The Company together with its subsidiaries (the Group ) aim to expand the Japanese multichannel pay TV market and the satellite infrastructure in Japan and overseas, and to leverage this to develop satellite communications. At the same time, the Group aims to maximize its corporate value through integrated business expansion and management streamlining in preparation for the integration of broadcasting and communications. (a) Progress and results of the business The Japanese economy generally stayed on a moderate recovery trend in the fiscal year ended March 31, 2016, supported by continuing solid private consumption on the back of improved corporate earnings in Japan and steady improvements in the employment and income environment, while consumption sentiment came to a temporary standstill. As for the operating environment for the Group, competition is growing in intensity for both content and customer acquisition in the multichannel pay TV broadcast industry, as a result of the emergence of video distribution services using the Internet, while the existing pay TV broadcast market is maturing. In the space and satellite industry, we also face intense price competition with overseas satellite operators in the global market, while our mobile satellite communications businesses for vessels and aircraft are expanding. Given these conditions, the consolidated financial results of the Group for the fiscal year ended March 31, 2016 were as follows. Category Fiscal year Previous ended March 31, Change Change fiscal year 2016 (millions of yen) (%) (millions of yen) (millions of yen) Operating revenue 163, ,905 (388) (0.2) Operating income 19,627 24,210 4, Ordinary income 19,580 24,012 4, Profit before income taxes 20,362 24,292 3, Profit attributable to owners of the parent 13,515 16,867 3, Operating revenue amounted to 162,905 million, representing a year-on-year decrease of 388 million due to a loss of revenue associated with the standard-definition (SD) broadcast service following its termination in May 2014 and a decrease in high-definition (HD) service subscription fee of the SKY PerfecTV! Premium Service, while supported by increases in consignment revenue, due to an increase in the number of cumulative subscribers of SKY PerfecTV! and revenue from the sales of network control station equipment as disaster countermeasures for the Local Authorities Satellite Communications Organization. Meanwhile, operating expenses declined 4,971 million year on year to 138,695 million, due to decreases in program supply and advertising expenses and others, while expenses for content for BS SKY PerfecTV! Channel and 4K Ultra HD (4K) broadcast channels increased. As a result, operating income increased 4,582 million year on year to 24,210 million, and profit attributable to owners of the parent increased 3,351 million year on year to 16,867 million, which recorded its highest profits since the inception of the Company in April

21 A summary of the Group s business segments is as follows. (Earnings include revenues from intersegment operating revenue, etc.) Major businesses: Multichannel pay TV broadcast platform business and Multichannel Pay TV Business related broadcasting business Maintenance and expansion of the subscriber base and broadcasting revenues As initiatives for new subscriber acquisitions we ran the 0 registration fee campaign, 10- day free broadcast for SKY PerfecTV!/SKY PerfecTV! On-Demand, and other campaigns for SKY PerfecTV!, and conducted sales promotions tailored to the diffusion of 4K TVs, which have a built-in tuner for the SKY PerfecTV! Premium Service. For channels dedicated to 4K, we launched SKY PerfecTV! 4K Experience in May 2016, in addition to SKY PerfecTV! 4K Movies and SKY PerfecTV! 4K General, and operate through the three channels. As marketing initiatives based around content, we broadcast original drama series such as Akagi and Kera. Besides, in the music, we broadcast Mr. Children TOUR 2015 REFLECTION live in full, and offered exclusive broadcasts of The Most Exciting Travelling Amusement Park Ever DREAMS COME TRUE WONDERLAND 2015 and Paul McCartney OUT THERE JAPAN TOUR 2015 Performance at Nippon Budokan. Other efforts driving subscriptions at the end of the fiscal year include sport-related content such as Formula One, as well as enhanced programs starting from off seasons, including broadcasts of Japanese professional baseball training camps and pre-season games, in addition to exclusive live broadcasts of all J. League-SKY PerfecTV! New Year Cup matches, with a view to acquiring subscribers early in the season. The numbers of subscribers for the fiscal year ended March 31, 2016 were as follows. Re-registered Net increase Cumulative New subscribers Churn subscribers (decrease) total subscribers 442, , ,215 20,631 3,482,326 The number of new subscribers was up 17,990 year on year, and the number of re-registered subscribers was up 16,438 year on year, while churn was down 241,112 year on year (including 252,027 churn associated with the termination of SD services in May 2014). As a result, the net change in the number of subscribers turned positive, up 20,631, an increase by 275,540 year on year (a decrease of 254,909 during the previous fiscal year). Initiatives for new business development We launched WAKUWAKU JAPAN CORPORATION in May 2015 with a view to expanding the distribution business of Japanese content for overseas audiences and developing peripheral businesses. WAKUWAKU JAPAN CORPORATION succeeded the WAKUWAKU JAPAN business, a Japanese content channel for overseas audiences, through a simple absorption-type demerger from SKY Perfect JSAT Corporation as of July 1, 2015, and conducted an allocation of new shares to third parties with a view to enhancing capital for its business expansion on the same day, which was subscribed by SKY Perfect JSAT Corporation and Cool Japan Fund Inc. It launched a channel in Singapore in July 2015, in addition to Indonesia and Myanmar where it is already operating channels. It also started providing three-hour broadcasts as a weekend program in terrestrial digital broadcasting in Thailand in March Looking ahead, we aim to expand into 22 countries around the world. 21

22 As a result of the above, the business results for the Multi-Channel Pay TV Business in the fiscal year ended March 31, 2016 were as follows. Fiscal year Previous ended March 31, Change Change fiscal year 2016 (millions of yen) (%) (millions of yen) (millions of yen) Operating revenue Operating revenue from external customers Intersegment operating revenue, etc. 118, ,042 (1,593) (1.3) 3,608 3,373 (235) (6.5) Total 122, ,415 (1,829) (1.5) Segment profit 2,432 6,241 3, Operating revenue was 120,415 million, a decrease of 1,829 million year on year, due to factors such as the decrease in consignment and transmission revenue associated with the SD broadcasts service following its termination in May 2014 and a decrease in the revenue from HD service subscription fee of the SKY PerfecTV! Premium Service with a decline in the cumulative number of subscriptions, while benefiting from an increase in consignment revenue from the SKY PerfecTV! Service with an increase in the cumulative number of its subscribers. Meanwhile, operating expenses totaled 114,174 million, down 5,638 million year on year, due to decreases in program supply and advertising expenses etc., although the cost of content for BS SKY PerfecTV! Channel and 4K broadcast channels increased. As a result, segment profit came to 6,241 million, an increase of 3,808 million from the previous fiscal year. Major businesses: Provision of satellite capacity for multichannel pay TV Space & Satellite Business broadcasts using communication satellites, various communications businesses, and space-related business Response to Business Continuity Plan (BCP) demand in the domestic market Since the Great East Japan Earthquake, the reputation of satellite communication for its usefulness in disaster preparedness and management as well as BCP has been growing again in the domestic market. We have been responding to this demand by aggressively promoting sales of our VSAT services (satellite communication through small earth stations), including EsBird and ExBird. We started providing the EsBird service for three customers East Nippon Expressway Company Limited, Central Nippon Expressway Company Limited, and West Nippon Expressway Company Limited in May 2015, for which we had been working on preparations since the previous year. In addition, we sold network control station equipment for disaster preparedness and management to the Local Authorities Satellite Communications Organization in November Expansion of overseas satellite business We have focused on developing markets in the Asia and Oceania regions, where growth is promising, and at the same time are continuing to promote sales in North America and Russia. Furthermore, the Group agreed with Intelsat S.A. in November 2015 to jointly procure Horizons 3e, a communications satellite (scheduled to be launched in 2018), and operate a joint satellite business at 169ºE, in order to respond to strong demand for Internet communication by aircraft, vessels, and others in the Asia-Pacific region. Mobile satellite communications business The mobile satellite communications business has expanded by an increasing number of vessels in the OceanBB Internet connection service and the launch of in-flight Internet connection service and an in-flight simultaneous distribution service for some channels of the SKY PerfecTV! Premium Service on domestic flights of All Nippon Airways Co., Ltd. In communication services using the Inmarsat satellites, we have been aggressively promoting Internet communication services, mainly for vessels and aircraft. 22

23 Ensure stability and reliability of satellite operations and improve efficiency of satellite operations As part of our initiatives to ensure stability and reliability of satellite operations and to improve efficiency of satellite operations, we are in the process of procuring four new satellites JCSAT-14, JCSAT-15, JCSAT-16, and Superbird-8 and these satellites are all scheduled to be launched during the fiscal year Moreover, a contract to procure a communications satellite, JCSAT-17, has been concluded with Lockheed Martin Corporation. It is scheduled to be launched during the fiscal year 2019 to offer satellite communications services to customers in Japan. As a result of the above, the business results for the Space & Satellite Business in the fiscal year ended March 31, 2016 were as follows. Fiscal year Previous ended March 31, Change Change fiscal year 2016 (millions of yen) (%) (millions of yen) (millions of yen) Operating revenue Operating revenue from external customers Intersegment operating revenue, etc. 44,658 45,863 1, ,730 8, Total 53,388 54,599 1, Segment profit 17,829 18, Operating revenue amounted to 54,599 million, a year-on-year increase of 1,211 million, due to an increase in revenue from Internet services on vessels, the sale of network control station equipment for disaster preparedness and management, and others, despite a decrease in broadcasting transponder revenue following termination of the standard-definition service in May Segment profit increased 782 million year on year to 18,611 million. (b) Capital investments In the fiscal year ended March 31, 2016, the Group made capital expenditures totaling 26,266 million. The spending was allocated mainly to updating the subscriber management system, upgrading broadcasting facilities at the SKY PerfecTV! Tokyo Media Center in the Multichannel Pay TV Business, and procuring communications satellites and earth station equipment for Esbird in the Space & Satellite Business. (c) Financing Financing activities during the fiscal year ended March 31, 2016 were as follows: The domestic subsidiary of the Company borrowed 7,274 million under lines of credit agreements (with a maximum loanable amount of 77,500 million) related to the maintenance and operation of X-band satellite relay communications business. In December 2015, the domestic subsidiary of the Company entered into lines of credit agreements (with a maximum loanable amount of US$191 million) with commercial banks in relation to the procurement of a communications satellite, Horizons 3e, and borrowed 777 million (US$6 million). In addition, JSAT International Inc., our consolidated subsidiary, concluded lines of credit agreements (with a maximum loanable amount of US$63 million) relating to the procurement of the satellite with the Japan Bank for International Cooperation in March The Company issued unsecured domestic straight bonds in an aggregate amount of 20,000 million in June 2015 to source funds for capital investment. 23

24 (2) Financial position and results of operation of the Group 6th term (Fiscal 2012) 7th term (Fiscal 2013) 8th term (Fiscal 2014) 9th term (Fiscal year ended March 31, 2016) (Fiscal 2015) Operating revenue (millions of yen) 159, , , ,905 Ordinary income (millions of yen) 15,698 21,529 19,580 24,012 Profit attributable to owners of the parent (millions of yen) 9,682 9,659 13,515 16,867 Earnings per share (yen) Total assets (millions of yen) 290, , , ,223 Net assets (millions of yen) 192, , , ,511 (Note 1) Earnings per share are calculated based on the average number of issued shares during the period. (Note 2) The Company conducted a 100-for-1 stock split of its common stock on October 1, Earnings per share are calculated as though the stock split took effect at the beginning of the 6th term. (3) Issues to be addressed The Group has recognized that existing markets in Japan are maturing in the Multichannel Pay TV Business, as well as in the Space & Satellite Business, and will endeavor to improve our revenue and expenditure structure and increase overseas operating revenue in each of the Group s businesses. Furthermore, we will work aggressively on M&As and business tie-ups to expand the business areas of the Group as a whole. <Multichannel Pay TV Business> (a) Maintenance and expansion of the subscriber base by differentiating content and services The Group recognizes maintaining and expanding the subscriber base for SKY PerfecTV! as a whole as an issue to be addressed, which will involve executing measures steadily to differentiate our content and services in ways that capitalize on the Group s strengths, as competition intensifies to acquire both content and subscribers with the emergence of paid video distribution services via the Internet, while existing pay TV markets are maturing. Specifically, we will seek to maintain and increase the number of subscribers through the following guidelines: i) Differentiating content of the overall platform To sustainably maintain its competitive advantage, it is important that the Multichannel Pay TV Business develops attractive and differentiated content together with broadcasters. We will seek differentiation from competing media through programming that capitalizes on our large number of channels, tie-ups with featured content by broadcasters of BS SKY PerfecTV! Channel, and introduction of original programs, in order to achieve an increase in the number of new subscribers and reduce the churn rate. In addition, for the SKY PerfecTV! Premium Service we will enhance 4K broadcasts and seek to acquire subscribers by expanding sales of 4K TVs that have a built-in Premium Service tuner. ii) Development and expansion of the FTTH and OTT platforms We will work to increase the number of new subscribers and reduce the churn rate through the expansion of the sales channels making use of optical fiber collaboration models with Nippon Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West Corporation (NTT-East & -West) (models in which a business operator supplied by NTT-East & -West with FLET S Hikari and other services provides services by combining its own services with those optical access services), and the launch of IP linear distribution to multi-devices (distributions of channels via the Internet) and OTT services for TV sets (on-demand services linked to broadcasting), in addition to acquisition of new subscribers through satellite broadcasts. (b) Diversification of revenue We recognize that developing revenue sources in new domains, on top of existing revenue from the Multichannel Pay TV Business, is an issue to be addressed. In addition to the redistribution business for terrestrial, BS and CS broadcasting through FTTH (such as FLET S 24

25 TV), which is already expanding steadily, we established WAKUWAKU JAPAN CORPORATION in May 2015 and commenced broadcasting services abroad, primarily in Asia, with capital investment by Cool Japan Fund Inc. through the allocation of new shares to a third party in July We will endeavor to make viewing available to 10 million households in 10 countries before the end of the fiscal year 2016 to increase revenue by distributing Japanese content for overseas audiences and developing peripheral businesses. In addition to these activities, we will develop new businesses that leverage the overall subscriber base of SKY PerfecTV! and the Group s strengths. (c) Strategic investments for the future and improving profitability While maintaining and expanding the number of subscribers in a tough competitive environment, we will continue to constantly review various costs to improve the overall profitability of the Multichannel Pay TV Business, and work to build and develop a nextgeneration Direct To the Home (DTH) business environment based on a left-handed circularly polarized wave for 110 E CS, and prepare for the large-scale upgrading of equipment at the SKY PerfecTV! Tokyo Media Center, in order to establish a foothold for future growth. <Space & Satellite Business> (d) Ensure stability and reliability of satellite operations and improve their efficiency The Group has 15 satellites and provides broadcasting and communications services. Two of 15 satellites function as orbital back-up satellites to ensure stable and reliable satellite operations. Moreover, we will seek to secure new communications capacity by widening the service area and expanding the frequency bandwidth, as well as providing continuous stable services and strengthening our infrastructure further with intensive launches of four satellites (JCSAT-14, JCSAT-15, JCSAT-16, and Superbird-8), which are scheduled during fiscal year JCSAT-16, in particular, has special specifications that allow it to function as a back-up for multiple satellites of the Group, contributing to higher efficiency of orbital back-up. With regard to the satellite control center and network equipment, we will work to optimize equipment procurement, maintenance and management, and operating environment. (e) Expand business areas To ensure sustainable growth in the Space & Satellite Business, we believe it is essential to cultivate new customers in areas where satellite services have competitive advantages over terrestrial services, and to expand the service provision area. We will grow this business by strengthening our initiatives in the following areas. i) Domestic satellite business In the domestic satellite business, we will work to cultivate new demand by, for example, making proposals on systems for disaster management and medical measures that use VSAT services (satellite communication through small earth stations), such as EsBird and ExBird, and developing sales strategies targeting the introduction of next-generation equipment for a flexible news transmission system. We will also set up new systems and provide value-added services for existing customers, as well as make proposals for renewing long-term contracts, in order to strengthen our base in the domestic satellite communications market. ii) Space and defense business With the Basic Plan on Space Policy instituted by the Cabinet Office, Government of Japan in January 2015 and the Implementation Schedule of Basic Plan on Space Policy revised in December 2015, we aim to expand our business by entering the market of space utilization services and participating in government-led projects. In the field of defense, through its consolidated subsidiary DSN Corporation, the Company will promote a program to upgrade and operate X-band satellite communication functions, etc. iii) Overseas satellite business Although there are effects of a changing economic environment, we will focus on exploiting markets in the Asia-Oceania region, which is expected to grow going forward, by taking the opportunity of the launch of JCSAT-14, which will cover the regions extensively. At the same time, we will continue to develop sales activities in the North American and Russian regions. To win intense price competition in these regions, we will work aggressively to promote projects for owning new-type satellites jointly and enter into 25

26 alliances with overseas service operators and strengthen our business base to secure new customers and increase the revenue ratio. iv) Mobile satellite communications business In mobile services, we will continue to expand sales of the OceanBB Internet connection service on vessels on the Pacific and Indian oceans to shipping companies and government organizations. We also aim to increase orders for satellite links to provide in-flight Internet connections on aircraft, a service that is already in use by All Nippon Airways Co., Ltd., and to expand the business by adding new services to the satellite transmission we provide, such as distributing programs for in-flight viewing through satellites. (f) Initiatives for growth In the Space & Satellite Business, we will aggressively exploit business fields of overseas satellites and mobile satellite communications to further enhance our No. 1 position in Asia in terms of operating revenue. We will also capture next-generation markets by working to cultivate new business fields such as the use of low orbital and small satellites. (4) Provision in the Articles of Incorporation that Board of Directors is to Determine the Distribution of Surplus, etc. The Group maintains a long-term and comprehensive approach to shareholder return as an important management priority. Our aim is to pay stable dividends while retaining sufficient internal reserves to fund our aggressive business development plans. Our policy is to determine cash dividend amounts following extensive consideration of our financial position, level of earnings, and payout ratio and so forth. Furthermore, our Articles of Incorporation include the provision that the Board of Directors can resolve to pay dividends from surpluses, etc., as provided in Article 459, paragraph 1 of the Companies Act. For the year-end dividend for the 9th term, the Board of Directors resolved at a meeting on May 11, 2016 to pay a dividend of 7 per share as a year-end dividend to all shareholders entered or recorded on the shareholders register as of March 31, (5) Employees (As of March 31, 2016) (a) Employees of the Group Segment Number of employees Year-on-year change Multichannel Pay TV Business 404 [ 568 ] 11 [ (5) ] Space & Satellite Business 285 [ 146 ] 6 [ (10) ] Corporate 126 [ 29 ] (10) [ (2) ] Total 815 [ 743 ] 7 [ (17) ] (Note) The number of employees indicates the number of working employees. The average number of temporary employees during the fiscal year is given in brackets separately. (b) Employees of the Company Number of employees Year-on-year change Average age Average service years 28 [ ] 1 [ ] 48.5 years old 2.8 years (Note) The number of employees indicates the number of working employees. The average number of temporary employees during the fiscal year is given in brackets separately. 26

27 (6) Major lenders (As of March 31, 2016) Lender Development Bank of Japan Inc. Sumitomo Mitsui Banking Corporation Mizuho Bank, Ltd. The Bank of Tokyo-Mitsubishi UFJ, Ltd. Mitsubishi UFJ Trust and Banking Corporation Sumitomo Mitsui Trust Bank, Limited Mizuho Trust & Banking Co., Ltd. Nippon Life Insurance Company Borrowings outstanding 8,415 million 6,322 million 6,264 million 6,218 million 6,201 million 2,693 million 2,693 million 1,000 million (7) Major business bases (As of March 31, 2016) Name SKY Perfect JSAT Holdings Inc. SKY Perfect JSAT Corporation Head Office SKY PerfecTV! Tokyo Media Center Yokohama Satellite Control Center Gunma Satellite Control Station Superbird Platform East Superbird Platform West SKY Perfect Customer-relations Corporation SKY Perfect Broadcasting Corporation SKY Perfect Entertainment Corporation Satellite Network, Inc. JSAT International Inc. JSAT MOBILE Communications Inc. WAKUWAKU JAPAN CORPORATION Location Minato-ku, Tokyo Minato-ku, Tokyo Koto-ku, Tokyo Yokohama-shi, Kanagawa Shinto-mura, Kitagunma-gun, Gunma Hitachiomiya-shi, Ibaraki Yamaguchi-shi, Yamaguchi Shinagawa-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo Washington, D.C., U.S. Minato-ku, Tokyo Minato-ku, Tokyo 27

28 (8) Major subsidiaries (a) Major subsidiaries Name SKY Perfect JSAT Corporation (Note 3) SKY Perfect Customerrelations Corporation SKY Perfect Broadcasting Corporation Satellite Network, Inc. SKY Perfect Entertainment Corporation JSAT International Inc. JSAT MOBILE Communications Inc. JSAT IOM Limited DSN Corporation WAKUWAKU JAPAN CORPORATION (Note 2) Common stock Ratio of voting rights held by the Company 50,083 million 100.0% 100 million 100.0% (Note 1) Major businesses Multichannel pay TV business and space & satellite business Subscriber management for multichannel broadcasting services 2,500 million General broadcasting business in 100.0% accordance with the Broadcast Act 1,600 million 92.0% Satellite communications business (Note 1) 10 million Basic broadcasting business in 100.0% accordance with the Broadcast Act US $25 million 200 million US $338 thousand 1,000 million 5,500 million 100.0% (Note 1) 53.3% (Note 1) 100.0% (Note 1) 65.0% (Note 1) 60.0% (Note 1) Provide satellite communications services in North America Provide mobile satellite communications services Discussion and negotiation with overseas supervisory agencies and international organizations Upgrade and operation project for X-band satellite communication functions Distribute Japanese content for overseas audiences (Note 1) Ratio of voting rights is based on indirect holdings. (Note 2) WAKUWAKU JAPAN CORPORATION was established as of May 1, (Note 3) Details of the specified wholly-owned subsidiary as of the end of the current fiscal year are as follows: Name of the specified wholly-owned subsidiary Address of the specified wholly-owned subsidiary Book value of the shares of the specified wholly-owned subsidiary at the Company and its wholly-owned subsidiaries Net asset value of the Company SKY Perfect JSAT Corporation 14-14, Akasaka 1-chome, Minato-ku, Tokyo 151,621 million 184,688 million (b) Business combinations, etc. SKY Perfect JSAT Corporation, a consolidated subsidiary of the Company, transferred its business for distributing Japanese content for overseas audiences to WAKUWAKU JAPAN CORPORATION, our consolidated subsidiary, through a simple absorption-type demerger as of July 1, On the same date, WAKUWAKU JAPAN CORPORATION carried out third-party allocation of shares and issued new shares to SKY Perfect JSAT Corporation and the Cool Japan Fund Inc. Please refer to 7. Other notes, Notes to business combinations, etc. of the Notes to the Consolidated Financial Statements for more details. (9) Other significant matters regarding current status of the Group Not applicable. 28

29 2. Shares (1) Shares of the Company (As of March 31, 2016) (a) Total number of shares authorized to be issued: 1,450,000,000 shares (b) Total number of shares issued: (c) Number of shareholders: 27,741 (d) Major shareholders (Top 10 shareholders) Name of Shareholder 344,603,700 shares (including 47,595,852 shares of treasury stock) Number of shares held Shareholding ratio ITOCHU FUJI Partners, Inc. 76,568,800 shares 25.78% NTT Communications Corporation 26,057,000 shares 8.77% Nippon Television Network Corporation 20,891,400 shares 7.03% Tokyo Broadcasting System Holdings, Inc. 18,434,000 shares 6.21% Japan Trustee Services Bank, Ltd. (Pension trust account for Mitsui & Co., Ltd. re-entrusted by Sumitomo Mitsui Trust Bank, Limited) 13,405,200 shares 4.51% Sumitomo Corporation 11,129,200 shares 3.75% Japan Trustee Services Bank, Ltd. (Trust account) 9,374,300 shares 3.16% The Master Trust Bank of Japan, Ltd. (Trust account) 8,561,400 shares 2.88% DENTSU INC. 4,059,400 shares 1.37% Japan Trustee Services Bank, Ltd. (Trust account 9) 4,058,800 shares 1.37% (Note 1) Although the Company owns 47,595,852 shares of treasury stock as of March 31, 2016, it is excluded from the list of major shareholders presented above. In calculating the shareholding ratio, treasury stock is excluded. (Note 2) The shares held by Japan Trustee Services Bank, Ltd. (Pension trust account for Mitsui & Co., Ltd. reentrusted by Sumitomo Mitsui Trust Bank, Limited) are shares held for trust services such as retirement benefit trust, pension trust, and investment trust. (2) Other important matters relating to shares In accordance with the resolution by the Board of Directors meeting held on December 2, 2015, the Company acquired 11,208,200 shares of treasury stock on December 3, Share Options, etc. Not applicable. 29

30 4. Board Directors and Corporate Auditors (1) Board Directors and Corporate Auditors (As of March 31, 2016) Position Name Responsibilities and significant concurrent positions Representative Director, Chairman Representative Director, President Board Director Board Director Board Director Board Director Board Director Board Director Board Director Board Director Shigeki Nishiyama Shinji Takada Masao Nito Mitsunobu Komori Koki Koyama Shinji Yokomizu Jiro Komaki Iwao Nakatani Masakatsu Mori Kazunobu Iijima In charge of Internal Control Representative Director, Chairman, SKY Perfect JSAT Corporation Representative Director, President & Chief Executive Officer, SKY Perfect JSAT Corporation In charge of Corporate Planning & Strategy Chief Risk Management Officer Chief Information Management Officer Chief Group Compliance Officer Director of the Board, Senior Executive Vice President, SKY Perfect JSAT Corporation Outside Board Director, NIKKATSU CORPORATION In charge of Engineering & Operations (CTO: Chief Technical Officer) Director of the Board, Senior Executive Vice President, SKY Perfect JSAT Corporation In charge of Space & Satellite Business Director of the Board, Senior Managing Executive Officer, SKY Perfect JSAT Corporation Representative Director, President, DSN Corporation Director, Satellite Network, Inc. In charge of Finance & Accounting (CFO: Chief Financial Officer) Director of the Board, Senior Managing Executive Officer, SKY Perfect JSAT Corporation Director & Treasurer, JSAT International Inc. Director, SKY Perfect Customer-relations Corporation In charge of Multichannel Pay TV Business Director of the Board, Senior Managing Executive Officer, SKY Perfect JSAT Corporation Representative Director, President, SKY Perfect Entertainment Corporation Board Director, SKY Perfect Broadcasting Corporation Chairman, the Board of Counselors, Mitsubishi UFJ Research and Consulting Co., Ltd. Outside Director, WDI Corporation Chairman, Fushiki-an Vice Chairman, International University of Japan Outside Director, STANLEY ELECTRIC CO., LTD. Outside Director, YAMATO HOLDINGS CO., LTD. Outside Audit & Supervisory Board Member, Kirin Holdings Company, Limited President, THE SANKEI BUILDING CO., LTD. Outside Board Director, WOWOW INC. Outside Director, GREE, Inc. Chairman, Cool Japan Fund Inc. 30

31 Position Name Responsibilities and significant concurrent positions Board Director Masayuki Hirata Advisor, InfoCom Research, Inc. Outside Director, Chuco Co., Ltd. Outside Director, DTS CORPORATION Board Director Michiaki Ogasawara President, The ITU Association of Japan Outside Director, Daiwa Securities Group Inc. Senior Advisor, Sompo Japan Nipponkoa Insurance Inc. Full-time Corporate Auditor Noriaki Sakamoto Outside Corporate Auditor, SKY Perfect JSAT Corporation Corporate Auditor, SKY Perfect Broadcasting Corporation Outside Corporate Auditor, NIKKATSU CORPORATION Full-time Corporate Auditor Akira Ogawa Corporate Auditor, SKY Perfect JSAT Corporation Corporate Auditor, SKY Perfect Customer-relations Corporation Corporate Auditor Toshiaki Katsushima Representative, Katsushima Toshiaki Certified Public Accountant and Tax Accountant Office Outside Auditor, Avex Group Holdings Inc. Corporate Auditor Tetsuya Fujita Managing Director, TOKYO BROADCASTING SYSTEM HOLDINGS, INC. Managing Director, TOKYO BROADCASTING SYSTEM TELEVISION, INC. Director and Chairman, TBS Radio & Communications, Inc. Director, BS-TBS, INC. Outside Board Director, WOWOW INC. Outside Director, Broadcasting System of Niigata, Inc. (Note 1) Board Directors Iwao Nakatani, Masakatsu Mori, Masayuki Hirata and Michiaki Ogasawara are outside board directors as provided for in Article 2, item 15 of the Companies Act. (Note 2) Corporate Auditors Noriaki Sakamoto, Akira Ogawa, Toshiaki Katsushima and Tetsuya Fujita are outside corporate auditors as provided for in Article 2, item 16 of the Companies Act. (Note 3) Corporate Auditor Toshiaki Katsushima is familiar with accounting and tax affairs as a certified public accountant and certified tax accountant, and has considerable knowledge regarding finance and accounting. (Note 4) The Company has registered outside Board Directors Iwao Nakatani and Masakatsu Mori, and outside Corporate Auditors Akira Ogawa and Toshiaki Katsushima with the Tokyo Stock Exchange as Independent Directors/Auditors defined by the Exchange. (Note 5) Board Director Akira Tanaka resigned from the office on May 31, (Note 6) There is no special relationship between the above organizations at which outside Board Directors Iwao Nakatani, Masakatsu Mori, Masayuki Hirata, and Michiaki Ogasawara and outside Corporate Auditors Toshiaki Katsushima and Tetsuya Fujita hold concurrent positions (except for Tokyo Broadcasting System Television, Inc. and WOWOW Inc.) and the Company. With regard to Tokyo Broadcasting System Television, Inc. and WOWOW Inc. with which outside Corporate Auditor Tetsuya Fujita holds concurrent position, SKY Perfect JSAT Corporation, our consolidated subsidiary, has business relationship involving operations relating to the satellite transmission service and paid satellite broadcasting service with Tokyo Broadcasting System Television, Inc., and the paid satellite broadcasting service with WOWOW Inc.. SKY Perfect JSAT Corporation and SKY Perfect Broadcasting Corporation at which outside Corporate Auditor Noriaki Sakamoto holds concurrent position are the subsidiaries of the Company and NIKKATSU CORPORATION at which he also holds concurrent position is the associate accounted for using equity method. SKY Perfect JSAT Corporation and SKY Perfect Customer-relations Corporation at which outside Corporate Auditor Akira Ogawa holds concurrent position are our subsidiaries. 31

32 (2) Outline of limited liability agreements The Company has established provisions regarding limited liability agreements with Board Directors (except for those who serve as executive directors, etc.) and Corporate Auditors in Article 26, paragraph 2 and Article 35, paragraph 2 of the Articles of Incorporation, pursuant to Article 427, paragraph 1 of the Companies Act. The following is an outline of the limited liability agreement that the Company has entered into with Board Directors (except for those who serve as executive directors, etc.) and Corporate Auditors: The maximum amount of the liability under the said agreement shall be 10 million or the amount prescribed by laws and regulations, whichever is higher. (3) Total amount of remunerations to Board Directors and Corporate Auditors Category Number of recipients Total amount of remunerations Board Directors million [Of the above, outside Board Directors] [4] [ 29 million] Corporate Auditors 5 52 million [Of the above, outside Corporate Auditors] [4] [ 47 million] Total million [Of the above, outside Board Directors and outside Corporate Auditors] [8] [ 76 million] (Note 1) The above list includes one (1) Board Director who resigned from the office on May 31, (Note 2) The above list includes one (1) Corporate Auditor who resigned from the office at the conclusion of the 8th Annual General Meeting of Shareholders held on June 26, (Note 3) Maximum amount of remunerations to Board Directors based on the resolution at the General Meeting of Shareholders (Annual General Meeting of Shareholders held on June 27, 2008) is 300 million or less a year (of which 60 million is to outside Board Directors). (Note 4) Maximum amount of remunerations to Corporate Auditors based on the resolution at the General Meeting of Shareholders (Annual General Meeting of Shareholders held on June 27, 2008) is 60 million or less a year. (Note 5) Total amount of remunerations includes the amount expected to be paid as performance-linked remunerations for the fiscal year ended March 31, (Note 6) Although the Company is not a company with statutory Nominating Committee, etc., we have established, as our voluntary organization and advisory body for the Board of Directors, the Nomination and Remuneration Committee, the majority of which consists of outside Board Directors, and aim to have independent advice on the determination of remuneration. 32

33 (4) Major activities of outside Board Directors and outside Corporate Auditors Category Name Activities Board Director Board Director Board Director Board Director Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Iwao Nakatani Masakatsu Mori Masayuki Hirata Michiaki Ogasawara Noriaki Sakamoto Akira Ogawa Toshiaki Katsushima Tetsuya Fujita Mr. Nakatani attended 14 of the 15 Board of Directors meetings held in the fiscal year ended March 31, With regard to business deliberation and other matters, he provided advice as necessary based on his high level of expertise in the field of economics and business management. Mr. Mori attended all of the 15 Board of Directors meetings held in the fiscal year ended March 31, With regard to business deliberation and other matters, he provided advice as necessary based on his abundance of experience and knowledge in the field of corporate management that he has acquired as a manager of a consulting firm. Mr. Hirata attended all of the 15 Board of Directors meetings held in the fiscal year ended March 31, With regard to business deliberation and other matters, he provided advice as necessary based on his abundance of experience and knowledge in the field of communications. Mr. Ogasawara attended all of the 11 Board of Directors meetings held since assuming office. With regard to business deliberation and other matters, he provided advice as necessary based on his abundance of experience and knowledge in the field of public administration. Mr. Sakamoto attended all of the 15 Board of Directors meetings and all of the 14 Board of Corporate Auditors meetings held in the fiscal year ended March 31, With regard to business deliberation and other matters, he provided advice as necessary based on his abundance of experience and knowledge in the field of corporate management that he has acquired overseas. Mr. Ogawa attended all 11 Board of Directors meetings held since assuming office, as well as all of the 10 Board of Corporate Auditors meetings since assuming office. With regard to business deliberation and other matters, he provided advice as necessary based on his abundance of experience and knowledge of business management in the field of international finance. Mr. Katsushima attended 12 of the 15 Board of Directors meetings and 11 of the 14 Board of Corporate Auditors meetings held in the fiscal year ended March 31, With regard to business deliberation and other matters, he provided advice as necessary from his standpoint as a certified public accountant and a certified tax accountant based on his abundance of experience and knowledge in the field of financial accounting. Mr. Fujita attended 11 of the 15 Board of Directors meetings and 11 of the 14 Board of Corporate Auditors meetings held in the fiscal year ended March 31, With regard to business deliberation and other matters, he provided advice as necessary based on his abundance of experience and knowledge in the field of broadcasting. 33

34 5. Accounting Auditor (1) Name Deloitte Touche Tohmatsu LLC (2) Amount of remunerations Amount of remunerations to the Accounting Auditor for the fiscal year ended March 31, 2016 Amount paid 73 million Total amount of money and other economic benefits that should be paid to the Accounting 145 million Auditor by the Company and its subsidiaries (Note 1) The Company s subsidiaries that have the Accounting Auditor also use Deloitte Touche Tohmatsu LLC as their Accounting Auditor. (Note 2) Since the audit contract between the Company and the Accounting Auditor does not clearly distinguish between the amounts of remunerations for audits conducted based on the Companies Act and based on the Financial Instruments and Exchange Act, respectively and it is not possible to substantively distinguish them, the amount of remunerations paid to the Accounting Auditor for the fiscal year ended March 31, 2016 is the total amount for both. (Note 3) The Board of Corporate Auditors has given consent under Article 399, paragraph 1 of the Companies Act with respect to remunerations, etc. of the Accounting Auditor after considering details of the audit plan of the Accounting Auditor, the performance of their duties during the past fiscal year, the logic for remuneration estimates, and other factors through necessary materials and reports obtained from the Board of Directors, relevant departments within the Company, and the Accounting Auditor. (3) Non-audit services The Company consigns to the Accounting Auditor the task of preparing comfort letters from accounting auditor to book-runners in relation to bonds issuance as a task in the non-audit services in Article 2, paragraph 1 of the Certified Public Accountant Act and pays for it. (4) Policy for decisions on dismissal or non-reappointment of Accounting Auditor The Company s policy is that the Board of Corporate Auditors dismisses the Accounting Auditor with the consent of all of the Corporate Auditors in cases where it deems that the provisions of Article 340, paragraph 1 of the Companies Act apply to the Accounting Auditor. Moreover, the Board of Corporate Auditors will determine details of a proposal to dismiss or not reappoint the Accounting Auditor that is to be brought to the General Meeting of Shareholders, upon a recognition that the Accounting Auditor is encountering difficulty in performing its duties appropriately. 34

35 6. Overview of Resolutions Concerning Establishment of Systems for Ensuring Appropriate Operations, etc. and Implementation of Such Systems At the Board of Directors meeting held on April 2, 2007, a basic policy was resolved with respect to systems for ensuring that the execution of the duties of the Board Directors conforms to laws and regulations and the Articles of Incorporation, and with respect to other systems for ensuring the appropriateness of the Company s operations. The contents of the resolution as revised and resolved by the Board of Directors meeting on April 30, 2015, in consideration of revisions to related laws and regulations including the Companies Act, etc., are as follows. (1) Systems for ensuring that the execution of the duties of Board Directors and employees conforms to laws and regulations and the Articles of Incorporation (a) The Company shall establish the SKY Perfect JSAT Group Policy and SKY Perfect JSAT Group Corporate Policy, and shall also establish the SKY Perfect JSAT Group Compliance Basic Regulations and the Group Officer and Employee Code of Conduct to help ensure that the behavior of Board Directors and employees adheres to laws and regulations (including the Articles of Incorporation, internal regulations, and corporate ethics) (hereinafter, Compliance ). (b) The Company shall appoint a Chief Compliance Officer, establish the Compliance Committee which is to be chaired by the Chief Compliance Officer, and also establish the Compliance Promotion Office which acts as the secretariat to the Committee. The Committee chairperson is to refer matters to the Compliance Committee regarding mechanisms for ensuring that awareness of compliance becomes firmly entrenched in the Company (hereinafter, the Compliance Program ), and also regarding problems related to compliance and other compliance issues. The Committee chairperson is then to report results of the Committee s deliberations to the Board of Directors, as deemed appropriate. (c) To have compliance established within the Company, it shall maintain and manage the Compliance Program throughout the Company, and shall also provide education, training, and other initiatives relating to the Compliance Program for Board Directors and employees. (d) The Company s compliance practices shall be audited by the Internal Audit Division. (e) The Company shall put into place a Compliance Help Line which is to act as a system for those who have become aware of conduct suspected as being illegal involving the Company s business activities, or its Board Directors or employees, thereby enabling those with such suspicions to swiftly report and discuss such matters with points of contact set up both within and outside the Company. (f) The Company is to sever any and all possible ties to antisocial groups and individuals who threaten civic order and safety, while also establishing systems for preventing the Company from causing such groups or individuals to benefit in any way whatsoever. (2) Systems regarding safekeeping and management of information pertaining to the execution of the duties of Board Directors (a) Rules relating to the storage and management of information shall be established, and information pertaining to the execution of duties of the Board of Directors is to be stored and managed in a manner that ensures safekeeping and optimal capacity to search such records in line with the type of storage medium thereof, as set forth in such rules. (b) Information is to be stored in a location at the head office that enables a Board Director or Corporate Auditor to swiftly access such information upon request to view it. (c) The Company shall implement Company-wide education regarding information security in accordance with its Information Security Basic Policy and other regulations related to information security, and shall also establish systems appropriate for ensuring that threats against its information assets do not materialize. (3) Regulations related to managing risk of loss and other such systems (a) The Company shall establish Company-wide risk management systems, and thereby stipulate risk management regulations geared toward appropriately addressing risk by ensuring overall recognition and evaluation of risk pertaining to execution of duties. (b) In order to ensure effectiveness of risk management, the Company shall establish the Risk Management Committee, which is to be chaired by the Chief Risk Management Officer. 35

36 (c) The Risk Management Committee shall determine policies for risk management, evaluate risks pertaining to its risk management practices, and review risk prevention measures. Meanwhile, the Committee shall also upgrade the Company s overall risk management system in the course of conducting review of individual events. (d) The Company shall establish a crisis management system that incorporates procedures to be followed in the event of unforeseen circumstances, while minimizing potential damage through swift and appropriate action to address such circumstances and preventing damage that has occurred from spreading. (e) The Company s risk management practices shall be audited by the Internal Audit Division. (f) The Chief Risk Management Officer shall report to the Board of Directors with respect to matters involving risk management, as deemed appropriate. (4) Systems for ensuring that Board Directors effectively execute their duties (a) The Board of Directors shall meet once monthly (on a regularly scheduled basis), and shall meet on other occasions as necessary. Moreover, the authority for making decisions, including that of the President, is to be prescribed in the Delegation of Authority Regulations regarding decision-making, while executive decisions are to be made upon deliberation of the Management Committee acting as an advisory body for facilitating decision-making by the President when necessary. (b) The Company shall clearly define divisions of job duties performed by Board Directors. The execution of such duties assigned shall also be clearly prescribed in organizational and job segregation rules establishing the division of job duties among respective divisions. Moreover, the Company shall appoint a person responsible for ensuring the appropriate and effective execution of the respective duties. (5) Systems for ensuring appropriateness of operations performed by the corporate group comprising the Company and its subsidiaries (a) The Company shall manage its subsidiaries on the basis of the Associate Companies Management Regulations, thereby respecting the managerial philosophies of the respective subsidiaries, while at the same time requiring that such subsidiaries report certain matters pertaining to the execution of duties by Board Directors (including but not limited to those relating to internal controls) to the Company, and establishing various liaison groups and panels, etc. to promote active information sharing. Moreover, the Company shall ensure that business is managed efficiently through efficient group finance (by introducing cash management systems) and other efforts. (b) On the basis of the SKY Perfect JSAT Group Policy and SKY Perfect JSAT Group Corporate Policy, as well as the SKY Perfect JSAT Group Compliance Basic Regulations and the Group Officer and Employee Code of Conduct, the Company shall work with its subsidiaries in promoting compliance. Moreover, the respective subsidiaries shall establish Compliance Programs that conform to the requirements of the Company, with the Company providing support to its subsidiaries for education and training geared toward compliance awareness-building, thorough implementation and promotion. (c) Compliance Help Lines of the Group shall be established as a mechanism to receive whistleblowing reports and consultations from subsidiaries. (d) In establishing a structure relating to the storage and management of information pertaining to the execution of duties of the Board Directors, as well as rules relating to managing risk of losses and other systems, the Company shall work with its subsidiaries in such efforts, by determining the risk management policies for subsidiaries at its Risk Management Committee and reviewing individual transactions of the subsidiaries, and provide support for them to establish relevant systems within their organizations depending on the size, business category, etc., of each subsidiary. (e) To ensure appropriate consolidated financial reporting of the Group, the Company shall develop and operate systems at its relevant subsidiaries for ensuring the reliability of such reporting and for monitoring such reporting on an ongoing basis (internal controls over financial reporting). (f) The Internal Audit Division shall perform internal audits with respect to the Company s subsidiaries, and shall report the outcomes of such audits to the Board Directors of such subsidiaries as well as the Company. 36

37 (6) Systems pertaining to employees who assist Corporate Auditors, and ensuring the independence of those employees and the effectiveness of instructions given to those employees (a) In its segregation of duties, the Company shall clearly state that the Internal Audit Division is to assist Corporate Auditors who perform an audit, as necessary. (b) Employees of the Internal Audit Division tasked with assisting the duties of Corporate Auditors shall not be obligated to respond to orders issued by Board Directors, supervisors or others in relation to any request made by the Corporate Auditors. Moreover, all matters concerning reassignment, performance evaluation, or disciplinary actions of such employees shall be subject to the consent of Corporate Auditors. (7) Systems for reporting to Corporate Auditors by Board Directors and employees, and other systems which involve reporting to Corporate Auditors (a) The Company shall clearly stipulate details including matters that Board Directors and employees must report to Corporate Auditors, meetings that Corporate Auditors attend, and documentation that Corporate Auditors may inspect, and the Company shall also endeavor to keep the Board Directors and employees thoroughly informed in that regard. (b) The aforementioned notwithstanding, whenever necessary Corporate Auditors may request reports from the Board Directors and employees, attend meetings deemed important, or call for presentation of documentation. (c) The Company shall establish a system that allows Corporate Auditors to exchange information regularly with Corporate Auditors of its subsidiaries. Furthermore, the Internal Audit Division shall report the outcomes of audits of the Company s subsidiaries to the Corporate Auditors. (d) Any whistle-blowing report to the Group s Compliance Help Lines shall be given to Corporate Auditors without delay. (e) The Company shall ensure in its rules relating to whistle-blowing that any Board Director or employee who makes a report under the Compliance Help Lines of the Group shall not be given unfavorable treatment for such report to Corporate Auditors. (8) Other systems for ensuring that Corporate Auditors are able to effectively conduct audits (a) The Representative Director, President shall hold regular meetings in order to ensure reciprocal dialogue with Corporate Auditors. (b) The Internal Audit Division shall coordinate efforts with Corporate Auditors by reporting internal audit plans and results to them both on a regular basis and also from time to time whenever necessary. (c) The Company shall ensure a system that makes it possible for Corporate Auditors to consult with attorneys and other outside experts, as required by the Corporate Auditors, and set aside a budget for the cost required for such consultations and other various expenses to ensure the audit is performed. 37

38 The following outlines how systems to ensure appropriate operations have been implemented. (1) Compliance system As the entire Group, the Company, together with Group companies, holds Compliance Committee meetings every quarter, and offers education and training through e-learning, etc. for all officers and staff, as well as provides information on related laws and regulations as needed. During the current business year, the Company reviewed the Compliance Help Line to secure a channel for reporting directly to the full-time Corporate Auditors, without going through the business reporting line, for a case of suspected involvement by the Board Directors, etc., and has started operating it on that basis. (2) Information storage and management system Important documents such as the materials for Board of Directors meetings and their minutes are managed appropriately, by keeping them in a condition so that they can be viewed as needed and storing them in a highly secure server. The Company has obtained certification for Information Security Management System (ISMS) and the Privacy Mark, and uses PDCA relating to information management. (3) System for managing risk of losses The Company held meetings of the Risk Management Committee, which seeks to enhance the risk management system of the Group, three times, and works to strengthen countermeasures for important risks and build and operate an effective management system led by the Risk Management Committee. The Company established Business Continuity Plan (BCP) for business continuity and carried out multiple training sessions, while working to make continuous improvements. (4) System for executing duties efficiently In accordance with the Board of Directors Regulations, the Company held 15 Board of Directors meetings to discuss and determine important matters, as well as receive reports on the execution of business from Board Directors, etc. in charge of major divisions. The Company sets out decision-making authority such as decision-making by the President in the Delegation of Authority Regulations pertaining to decision-making, and held 23 Management Committee meetings, which is an advisory board, to make decisions by the President in accordance with the Management Committee Regulations, and to discuss and determine execution efficiently. (5) Internal controls of corporate group The Company has concluded a memorandum with its Group companies to the effect that they adhere to the Associate Companies Management Regulations, the SKY Perfect JSAT Group Compliance Basic Regulations, and the Group Officer and Employee Code of Conduct. The Company receives regular reports on important matters such as finance and account settlement, staffing information, and risk management from Group companies at the Management Committee meetings, etc. To secure the reliability of consolidated financial reporting, the Company has Group companies subject to J-SOX, prepares internal control documents and assesses their status and processes every year. The Company s Internal Audit Division conducts regular audits of Group companies, including the Company itself, and reports the outcomes to the President & Representative Director, as well as the Corporate Auditors. (6) System for auditing by Corporate Auditors The Corporate Auditors attend various important meetings, including meetings of the Board of Directors, Management Committee, Internal Control Committee, and Risk Management Committee, to opine as appropriate. The Corporate Auditors exchange opinions with full-time Board Directors, including Representative Director, every quarter. Besides, audit reports of the Internal Audit Division, etc. and details of whistle-blowing reports are reported to the Corporate Auditors as appropriate. 38

39