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Corporate Governance

The following section includes the matters of consolidated companies. The following section is as of June 27, 2013, unless otherwise indicated.

Basic Policy of Corporate Governance

Under its basic philosophy "A company is a public entity of society," the Company has long been committed to corporate governance. The Company' s corporate governance system is based on the Board of Directors, which is responsible for deciding important operational matters for the whole Group and monitoring the execution of business by Directors, and Corporate Auditors and the Board of Corporate Auditors, which are independent from the Board of Directors and responsible for auditing the performance of duties by Directors.

In October, 2012, the Company established the Corporate Strategy Head Division which is responsible for formulating and promoting group-wide strategies and other matters from the perspective of an investor. At the same time, the Company divided some functions such as those of the Corporate R&D Group and the Corporate Legal Affairs Division, which had previously been a function of the head office, and incorporated those functions into the Professional Business Support Sector in order to support the performance of business operations by the Divisional Companies and the business divisions.

In addition, the Company reorganized its business structure in April 2013. Nine (9) business domain companies were constructively dissolved and eighty-eight (88) business units under those business domain companies were consolidated into forty-nine (49) business divisions as basic management units. The Company also established four (4) Divisional Companies (Appliances, Eco Solutions, AVC Networks and Automotive & Industrial Systems) to support the business division system. The Divisional Companies are the aggregation of the business divisions, each of which is a basic unit that is autonomously managed to formulate its respective midterm plans and business plans, and each unit is responsible for R&D, production and sales as well as its cash and profit management, on a global basis. The Company has established the following the corporate governance system suitable for the Company' s business structure based on the 4 Divisional Companies and business divisions.

Corporate Governance Structure

‹The Board of Directors and Executive Officer System›

The Company' s Board of Directors is composed of seventeen (17) Directors including three (3) Outside Directors. In accordance with the Company Law of Japan and related laws and ordinances (collectively, the "Company Law"), the Board of Directors has ultimate responsibility for administration of the Company' s affairs and monitoring of the execution of business by Directors.

The Company has an optimum management and governance structure tailored to the 4 Divisional Company-based management structures. Under this structure, the Company has empowered each of 4 Divisional Companies and business divisions through delegation of authority. At the same time, the Company employs an Executive Officer system to provide for the execution of business at its various domestic and overseas Group companies. This system facilitates the development of optimum corporate strategies that integrate the Group' s comprehensive strengths. The Company has twenty-one (21) Executive Officers (excluding those who concurrently serve as Directors), which include top managements of each of 4 Divisional Companies, senior officers responsible for certain foreign regions and officers responsible for corporate functions.

In addition, in order to ensure swift and strategic decision-making, as well as sound and appropriate monitoring at the same time, the Board of Directors, as a decision-making body for Group-wide matters, concentrates on corporate strategies and the supervision of 4 Divisional Companies, while Executive Officers have been delegated with the authority to handle responsibilities relating to day-to-day operations at each of the 4 Divisional Companies. Taking into consideration the diversified scope of its business operations, the Company has opted to maintain a system where Executive Officers, who are most familiar with the specifics of the operations, take an active part in the Board of Directors' meetings. Moreover, to clarify the responsibilities of Directors and create a more agile organization of the Board of Directors, the Company has limited the term of each Director to one year.

‹Corporate Auditors and the Board of Corporate Auditors›

Pursuant to the Company Law, the Company has elected Corporate Auditors and established a Board of Corporate Auditors, made up of Corporate Auditors. The Corporate Auditors and Board of Corporate Auditors monitor the status of corporate governance and audit the day-to-day activities of management, including the performance of duties by Directors. The Company has five (5) Corporate Auditors, including three (3) Outside Corporate Auditors. Additionally, the Company elected Corporate Auditors who have substantial finance and accounting knowledge. Corporate Auditors participate in the general meetings of shareholders and the Board of Directors' meetings, receive reports from Directors, Executive Officers, employees and Accounting Auditors, and exercise other auditing authority permitted to Corporate Auditors under the law. Full-time Senior Corporate Auditors also attend important meetings and conduct visiting audits of business offices in order to ensure effective audit. In order to augment internal auditing functions in the Group with 4 Divisional Companies' structure from April 2013, the Company assigns eight (8) non-statutory full-time senior auditors who directly report to the Senior Corporate Auditors of the Company to each of the Divisional Companies in the same manner as the Company had assigned full time auditors to the business domain companies, etc. to assist Corporate Auditors in audits. The Company also inaugurated regular Panasonic Group Auditor Meetings (comprising a total of eighteen (18) members, of which two (2) were Senior Corporate Auditors of the Company, eight (8) were non-statutory full-time senior auditors of the Divisional Companies and eight (8) non-statutory full-time senior auditors of the Group Companies) chaired by the Senior Corporate Auditors of the Company to enhance collaboration among the Company' s Corporate Auditors, non-statutory full-time senior auditors of the Divisional Companies and corporate auditors of the Group companies. In addition, as part of their audit duties, Corporate Auditors maintain close contacts with the Internal Audit Group, which performs business audits and internal control audits, to ensure the efficiency of audits. Corporate Auditors regularly receive from the Internal Audit Group or other sections a regular report regarding the status involving the internal control system and results of audits. Corporate Auditors may request the Internal Audit Group or Accounting Auditors to conduct an investigation, if necessary. Moreover, in order to enhance the effectiveness of the audits conducted by Corporate Auditors and ensure the smooth implementation of audits, the Company has established a Corporate Auditor' s Office with a full-time staff of six (6) under the direct control of the Board of Corporate Auditors.

Mr. Yoshihiro Furuta, a Senior Corporate Auditor of the Company, has substantial finance and accounting knowledge, having held the position of General Manager, Accounting, at Matsushita Electric Works, Ltd.

All of the Outside Directors and Outside Corporate Auditors are notified to the Japanese stock exchanges as "independent directors/corporate auditors" pursuant to article 436, paragraph 2 of Securities Listing Regulations of the Tokyo stock exchange and are unlikely to have any conflict of interests with our shareholders.

‹Group Executive Committee for Deliberating Important Matters›

In October 2012, the Company established and has operated the Group Executive Committee for Deliberating Important Matters, where discussions are conducted prior to a meeting of the Board of Directors, with the aim of ensuring productive deliberations at the Board of Directors' meetings. At the Group Executive Committee for Deliberating Important Matters, matters deemed to be important, such as investments over a certain amount and Group-wide management systems and measures, are discussed and approved by the President. This Committee was established by integrating the Group Management Committee, the Approval Meeting and the Investment and Borrowing Committee. The members of the Committee are the President and Executive Officers whose job functions are related to the matters to be discussed. The officers responsible for businesses or job functions related to those being discussed also join the meeting, if necessary.

‹Group Strategy Meeting›

In July 2012, the Company established the Group Strategy Meeting to discuss the Company' s mid- and long-term strategies and certain important issues. The meeting is generally held twice a month. The attendants consist of approximately ten (10) people in managerial positions, including the President and the top management officers of the major businesses (currently, the presidents of the 4 Divisional Companies), called the Group Management Team. The officers of related businesses and functions being discussed also join the meeting, if necessary. By integrating meetings for discussing and sharing information regarding group-wide issues into the Group Strategy Meeting, the Company is capable of prioritizing and promptly discussing important group-wide issues.

Corporate Governance Structure

[Functions of the Board of Directors, Executive Officers and Corporate Auditors, etc.]

  • *1Complementing a decision-making in the Board of Directors Meeting.
  • *2Including the affiliate business divisions and companies (Japan and overseas),etc.

Basic Policy on Internal Control Systems and Status of the Development of the System

The Company' s Board of Directors has determined the Company' s basic policy regarding the development of internal control systems, as outlined below. It was decided at the Board of Directors' meeting held on July 31, 2012 that this basic policy should be retained. The details are as follows:

‹Basic Policy Regarding Development of Internal Control Systems›

(a)System for ensuring legitimacy of the execution of duties by Directors
The Company shall ensure legitimacy of the execution of duties by Directors by developing effective corporate governance and monitoring systems, as well as increasing awareness about compliance.
(b)System for retention and management of information on the execution of duties by Directors
The Company shall retain and manage information on the execution of duties by Directors in accordance with laws and ordinances and the internal regulations of the Company.
(c)Regulations and other systems for risk management
The Company shall establish regulations for risk management, collect and assess information on risks in an integrated and comprehensive fashion in order to identify material risks, take countermeasures that match the materiality of each risk and seek continuous improvements through monitoring the progress of such countermeasures.
(d)System for ensuring efficiency of the execution of duties by Directors
The Company shall ensure efficiency of the execution of duties by Directors by clarifying business goals through business plans and other measures, and examining the status of achievement of such goals, while seeking to expedite decision-making.
(e)System for ensuring legitimacy of the execution of duties by employees
The Company shall seek to increase awareness of compliance by employees by clarifying the Company' s policy regarding compliance. The Company shall also ensure legitimacy of the execution of duties by employees by developing effective monitoring systems.
(f)Matters concerning employees who assist Corporate Auditors in auditing, and matters concerning independence of such employees from Directors
The Company shall establish an organization independent from Directors and maintain a staff for Corporate Auditors in order to enhance the effectiveness of audits by Corporate Auditors and facilitate the effective performance of audits.
(g)System for making reports to Corporate Auditors
The Company shall ensure opportunities and a system by which Directors and employees, etc. can make reports to Corporate Auditors.
(h)System for ensuring effectiveness of audits by Corporate Auditors
The Company shall develop a system in which effective audits may be executed in accordance with the audit plan established by Corporate Auditors each year.
(i)System for ensuring the properness of operations of the Group
The Company shall ensure that the Group companies follow the management policy and management philosophy of the Company and the basic policy in (a) through (h) above, in order to ensure the proper execution of businesses for the Group as a whole, while at the same time respecting the Group companies' autonomous management.

‹Status of Development›

(a)System for ensuring legitimacy of the execution of duties by Directors
The Company established internal regulations such as the Panasonic Code of Conduct, which provides specific guidelines for the implementation of management philosophy, the Code of Ethics for Directors and Executive Officers, and other internal rules. The Company also delegates responsibility relating to execution of business to Executive Officers, pursuant to resolutions of the Board of Directors. The Company also realigned the role and structure of the Board of Directors to concentrate on corporate strategies and the supervision of business domain companies and under such system the responsibility of Directors is clarified. Moreover, audits are conducted by Corporate Auditors and the Board of Corporate Auditors. The Company also has a management committee and a non-statutory full-time senior auditor at each of business domain companies, etc. corresponding to the Board of Directors and the Corporate Auditors at the Company, respectively.
(b)System for retention and management of information on the execution of duties by Directors
The minutes of meetings of the Board of Directors are recorded for each meeting of the Board of Directors and retained permanently by the Secretariat of the Board of Directors. The records of final decisions by the President are also retained permanently by the department in charge.
(c)Regulations and other systems for risk management
Based on Basic Risk Management Regulations, the Company identifies material risks by collecting and assessing information on risks in an integrated and comprehensive fashion through the Global and Group (G&G) Risk Management Committee and takes countermeasures that match the materiality of each risk.
(d)System for ensuring efficiency of the execution of duties by Directors
The Company expedites decision-making through the Group Executive Committee for Deliberating Important Matters, the operation of the approval procedures of material matters, clear separation of roles for Directors and Executive Officers, the bold transfer of authority to each of business domain companies and the implementation of an IT system that ensures the rapid and accurate collection and transmission of vital management information. Also, the Company established the midterm management plan, the business plan and other measures, and planned and implemented the measures by confirming and examining the status of achievement at the time of financial settlement of monthly accounts.
(e)System for ensuring legitimacy of the execution of duties by employees
The Company makes efforts to detect fraudulent acts at an early stage through performing operational and internal control audits, operating the corporate whistleblower hotline and other measures, as well as establishing internal rules such as the Panasonic Code of Conduct and conducting various activities including the operations of the corporate compliance committee. Also regarding to antisocial forces, the Company thoroughly prevents any relationships with antisocial forces by assigning persons-in-charge for preventing undue claims at the department overseeing measures against antisocial forces.
(f)Matters concerning employees who assist Corporate Auditors in auditing and matters concerning independence of such employees from Directors
The Company established the Corporate Auditor' s Office to which the full-time staff for Corporate Auditors belong, under the direct control of the Board of Corporate Auditors, which is separate from other executive departments.
(g)System for making reports to Corporate Auditors
Directors and employees, etc. make reports on business operations and problems to Corporate Auditors at regular meetings held by Corporate Auditors or at other important meetings by requesting Corporate Auditors to attend, as necessary. The Company also established a system by which employees, etc. can report directly to the Board of Corporate Auditors about concerns in regards to accounting or auditing irregularities.
(h)System for ensuring effectiveness of audits by Corporate Auditors
The Company has a non-statutory full-time senior auditor at each of business domain companies, etc. who assists Corporate Auditors in auditing compliance status. The Company also established and operates the Panasonic Group Auditor Meetings chaired by the Senior Corporate Auditors in order to enhance collaboration among the Company' s Corporate Auditors, the non-statutory full-time senior auditors of business domain companies, etc. and the Corporate Auditors of the Company' s main subsidiaries. Moreover, each department has been cooperating to enhance the effectiveness of audits by Corporate Auditors through each department' s collaboration in visiting audits of business offices inside and outside Japan by Corporate Auditors and through the Internal Auditing Group' s reports to Corporate Auditors at appropriate times.
(i)System for ensuring properness of operations of the Group
The Company established the Panasonic Code of Conduct, and it also exercises the rights of shareholders of the Group companies and dispatches Directors and Corporate Auditors to the Group companies. In addition, the Company established the approval procedures for final decisions on material matters, and established the function-related regulations across the Group. Moreover, the Internal Auditing Group conducts periodic audits on the Company' s business and internal control audits. Steps are also taken to share business goals through the announcement of the business policies and the distribution of appropriate information by internal notices. In addition, the Company oversees the activities of publicly listed subsidiaries to ensure that they engage in the appropriate implementation and management of these systems.
Furthermore, the framework described above ensures that operations are proper, enabling the Group to establish the internal controls necessary for financial reporting based on the Sarbanes-Oxley Act and Financial Instruments and Exchange Act.

Notes:

  1. "Group companies" means subsidiaries as stipulated in the Company Law of Japan.
  2. The Company reorganized the business domain companies to the 4 Divisional Companies as of April 1, 2013.

The status of the Company' s internal system concerning timely disclosure of corporate information

Under its management philosophy, "A company is a public entity of society," the Company has been committed to highly transparent business activities and endeavored to fulfill its accountability to its stakeholders. The Company' s basic policy concerning information disclosure is set forth in the "Panasonic Code of Conduct," which prescribes specific items to be complied with in order to put the Group' s business policy into practice, and is published on the Company' s website and elsewhere. The Company' s basic policy concerning information disclosure is to provide the Company' s fair and accurate financial information and corporate information, including management policies, business activities and corporate social responsibility (CSR) activities, in a timely, appropriate and easily understandable manner.

In accordance with this basic policy, important matters concerning the management of the Group are resolved or reported at meetings of the Board of Directors pursuant to the Regulations of the Board of Directors. These important matters and other matters, which are required to be disclosed under relevant laws and ordinances and the rules of financial instruments exchanges or any other regulations in Japan and overseas, are timely and accurately reported from each relevant department having internal information to the department that handles relevant information under the monitoring of the Director in charge of Accounting and Finance so that important information is gathered.

Moreover, if any of the matters which are required to be disclosed under relevant laws and ordinances and the rules of financial instruments exchanges or any other regulations in Japan and overseas occur with respect to the Company' s business divisions including subsidiaries, such matter is required to be immediately reported to the "Corporate Accounting Group" or the "Corporate Finance & IR Group" of the head office, depending upon the nature thereof; thus, the Company has established a system whereby these matters can be identified within the Company.

With respect to the information gathered or identified, the Company determines the necessity of disclosure thereof in accordance with relevant laws and ordinances and the rules of financial instruments exchanges or any other regulations in Japan and overseas, and makes efforts to conduct the disclosure at the time that the organization, which substantially decides on the execution of business of the Company, makes a resolution or determination, or the Company becomes aware of the occurrence of the relevant matter. In addition, the Company endeavors to confirm the details and expressions of the disclosure with the relevant departments within the Company and outside legal counsel to ensure the accuracy, fairness and adequacy of disclosure.

Moreover, the Company has established disclosure control procedures under Section 302 of the U.S. Public Company Accounting Reform and Investor Protection Act from fiscal 2003. In the process of preparation and confirmation of annual securities reports, quarterly reports and annual reports, the Disclosure Committee, which is comprised of managers from principal departments that handle relevant information, confirms the validity of the content of the descriptions and the appropriateness of the procedures concerning the disclosure under the monitoring of the President and the Director in charge of Accounting and Finance, who are responsible for establishing, maintaining and ensuring the effectiveness of the internal control and disclosure control of the Company. The chairman of the Disclosure Committee is appointed by the President and the Director in charge of Accounting and Finance, and the members of the Disclosure Committee are appointed by the chairman of the Disclosure Committee. The Disclosure Committee also develops, maintains, improves and evaluates the internal control procedures concerning disclosure.

Note:
The Company notified to the New York Stock Exchange ("NYSE") to apply for voluntary delisting of its American Depositary Shares ("ADSs") on April 1, 2013. Then the Company filed on April 11, 2013 of a Form 25 with the SEC for delisting from the NYSE and SEC deregistration and its delisting became effective on April 22, 2013. In addition, the Company has filed a Form 15F with the SEC on April 22, 2013 to terminate the Company' s reporting obligations under the Securities Exchange Act of 1934 (the "Exchange Act"). The deregistration will become effective on July 10, 2013, 90 days after the filing of Form 25 with the SEC. Panasonic' s reporting obligations under the Exchange Act were suspended by the filing of Form 15F with the SEC and will be terminated on July 21, 2013, 90 days after its filing. The anticipated effective dates may be delayed if the SEC objects or requests an extended review or for other reasons.

Internal Control Over Financial Reporting

The Company has documented its actual status of the internal control system, with coordination provided by the Internal Auditing Group, in order to ensure reliability in financial reporting of the Panasonic Group including its subsidiaries, ranging from the control infrastructure to actual internal control activities. Specifically, the Company has reinforced its internal controls by implementing self-checks and self-assessment programs at each of the Divisional Companies and business divisions, etc. Then, Internal Auditing Managers of the Divisional Companies appointed by the Company at each of the Divisional Companies, etc. conduct audits. The Corporate Internal Auditing Group supervises these activities in order to confirm the effectiveness of each company' s financial reporting. With the aim of further enhancing the Group' s internal control system, in fiscal 2013 Panasonic had approximately 400 personnel assigned to conduct internal audits in the Internal Auditing Group

Amount of compensation for Directors and Corporate Auditors

With respect to the remuneration for Directors and Corporate Auditors, the maximum total amounts of remuneration for all Directors and Corporate Auditors of the Company are respectively determined by a resolution at a general meeting of shareholders. The remuneration amount for each Director is determined by the Company' s Representative Directors who have been delegated by the Board of Directors to make such determination based on a certain standard of the Company, and the remuneration amount for each Corporate Auditor is determined upon discussions amongst the Corporate Auditors.

The amounts of remuneration and bonuses of Directors are linked to individual performance based on sales, pre-tax income, CCM and free cash flow, etc. By implementing this performance evaluation criteria based on shareholder interests, the Company intends to promote continuous growth and enhance profitability on a long-term basis for the Group as a whole.

Note:
CCM (Capital Cost Management) is an indicator of business management created by the Company to evaluate return on capital.

Classification Number of persons Amounts (million yen)
  Monthly salary
Directors (other than Outside Directors)
21
835
835
Corporate Auditors (other than Outside Corporate Auditors)
3
78
78
Outside Directors
2
27
27
Outside Corporate Auditors
3
41
41

Status of accounting audit

Panasonic Corporation has an auditing agreement with KPMG AZSA LLC for this company to conduct the accounting audit of Panasonic Corporation. The followings are accountants who conducted the accounting audit Panasonic Corporation. The number of years of continued audits is seven years or less.

CPA having executed accounting audit works Audit corporation to which CPA belongs
Tetsuzo Hamajima KPMG AZSA LLC
Takashi Kondo KPMG AZSA LLC
Sungjung Hong KPMG AZSA LLC

Working with to assist the above accountants in conducting audit of Panasonic Corporation were 131 certified public accountants and 106 other people.

Outside Directors and Outside Corporate Auditors

The Company elects three (3) Outside Directors and three (3) Outside Corporate Auditors.

Mr. Ikuo Uno, an Outside Director of the Company, is an executive advisor to the Board of Nippon Life Insurance Company. Nippon Life Insurance Company is one of the major shareholders of Panasonic, but do not have any other noteworthy relationships with the Company. Mr. Masayuki Oku, an Outside Director of the Company, is Chairman, Board of Directors of Sumitomo Mitsui Financial Group, Inc. Sumitomo Mitsui Banking Corporation which is a subsidiary of Sumitomo Mitsui Financial Group, Inc. is one of the major shareholders of Panasonic, but do not have any other noteworthy relationships with the Company. Mr. Yasuo Yoshino, an Outside Corporate Auditor of the Company, is advisory of Sumitomo Life Insurance Company. Sumitomo Life Insurance Company is one of the major shareholders of Panasonic, but do not have any other noteworthy relationships with the Company.

For three (3) Outside Directors, the Company makes its decisions concerning the independence of Outside Directors based on the policy to the effect that the Outside Directors do not have any conflict of interest in light of relationships between the Company and the Outside Directors or other entities or organizations to which the Outside Directors belong and therefore maintain independence and may enhance and strengthen the effectiveness of the monitoring performed by the Board of Directors regarding the execution of business by Directors from an objective and neutral standpoint. For three (3) Outside Corporate Auditors, the Company makes its decisions concerning the independence of Outside Corporate Auditors based on the policy to the effect that the Outside Corporate Auditors do not have any conflict of interest in light of relationships between the Company and the Outside Corporate Auditors or other entities or organizations to which the Outside Corporate Auditors belong and therefore maintain independence and enhance and strengthen the effectiveness of the audits performed by Corporate Auditors regarding the execution of business by Directors, from an objective and neutral standpoint.

Outside Directors directly or indirectly cooperate with the internal audit, audit by Corporate Auditors and accounting audit, receive reports from the Internal Auditing Group and conduct an effective monitoring through reports on financial results at meetings of the Board of Directors and through reviews of the basic policy regarding the development of the internal control systems and other methods.

Outside Corporate Auditors directly or indirectly cooperate with the internal audit, audit by Corporate Auditors and accounting audit, receive reports from the Internal Auditing Group and conduct an effective monitoring through reports on financial results at meetings of the Board of Directors, through reviews of the basic policy regarding the development of internal control systems and through exchanges of opinions and information at meetings of the Board of Corporate Auditors and other methods.

Contract between the Company and Outside Directors / Outside Corporate Auditors under Paragraph 1 of Article 427 of the Company Law

The Company has entered into liability limitation agreements with all Outside Directors and Outside Corporate Auditors, respectively, which limit the amount of their liability under Article 423, Paragraph 1 of the Company Law to the aggregate of the amounts specified in Article 425, Paragraph 1 of the Company Law, if they perform their duties in good faith and without significant negligence.

Matters to be resolved at general meetings of shareholders that can also be resolved by the Board of Directors

The Company stipulates in its Articles of Incorporation that unless otherwise provided by law, the Company may determine, by a resolution of the Board of Directors, a distribution of surplus or any other matters set forth in each item of Article 459, Paragraph 1 of the Company Law. This is to enable the Company to more flexibly distribute profits to shareholders based on its consolidated business performance and to repurchase and cancel its own stock under its basic policy for providing return to shareholders

The Company, pursuant to Article 426, Paragraph 1 of the Company Law, stipulates in its Articles of Incorporation that it may, by a resolution of the Board of Directors, exempt a Director (including a former Director) and a Corporate Auditor (including a former Corporate Auditor) from being held liable for his/her actions as set forth in Article 423, Paragraph 1 of the Company Law to the extent permitted by applicable laws and ordinances, to enable the Directors and Corporate Auditors to perform their duties in a satisfactory manner.

Requirements for the adoption of resolutions for the election of Directors

The Company stipulates in its Articles of Incorporation that the presence of shareholders representing one-third or more of the voting rights held by the total shareholders entitled to exercise their voting rights and a majority of the votes held by those shareholders are required for the adoption of resolutions necessary to approve the election of Directors.

Requirements for the adoption of special resolutions of general meetings of shareholders

The Company stipulates in its Articles of Incorporation that the presence of shareholders representing one-third or more of the voting rights held by the total shareholders entitled to exercise their voting rights and two-thirds of the votes held by those shareholders are required for the adoption of special resolutions of general meetings of shareholders which are stipulated in Article 309, Paragraph 2 of the Company Law. By relaxing the requirements for a quorum for special resolutions of general meetings of shareholders, deliberations for those resolutions can be made in a secure manner.

Information on shareholdings

(a)Investment securities held for purposes other than pure investment
Number of stock names: 177
Total amount recorded in the balance sheet of the Company: 87,806 million yen
(b)Stock name, number of shares, amount recorded in the balance sheet, and purpose of holding regarding investment securities held for purposes other than pure investment
(As of March 31, 2012)
Specified investment securities
Stock name Number of shares
(shares)
Balance sheet amount
(Millions of yen)
Purpose of holding
Toyota Motor Corporation 27,392,905 97,793 Maintaining and enhancing of relationship with issuer and business transactions
Honda Motor Co., Ltd. 11,272,900 35,453 Maintaining and enhancing of relationship with issuer and business transactions
Daikin Industries, Ltd. 7,500,000 16,898 Maintaining and enhancing of relationship with issuer and business transactions
TDK Corporation 3,124,808 14,655 Maintaining and enhancing of relationship with issuer and business transactions
Nippon Steel Corporation 35,985,000 8,169 Maintaining and enhancing of relationship with issuer and business transactions
KOITO MANUFACTURING CO., LTD. 4,280,250 5,731 Maintaining and enhancing of relationship with issuer and business transactions
Tesla Motors, Inc. 1,418,573 4,342 Maintaining and enhancing of relationship with issuer and business transactions
Tokyo Broadcasting System Holdings, Inc. 3,083,180 3,805 Maintaining and enhancing of relationship with issuer and business transactions
Sumitomo Metal Industries, Ltd. 19,260,000 3,216 Maintaining and enhancing of relationship with issuer and business transactions
NIPPON KANZAI Co., Ltd. 1,950,000 2,915 Maintaining and enhancing of relationship with issuer and business transactions
Regarded as holding securities
Stock name Number of shares
(shares)
Balance sheet amount
(Millions of yen)
Purpose of holding
IBIDEN CO., LTD. 1,700,000 3,599 Have a right to exercise of voting rights *
Shin-Etsu Chemical Co., Ltd. 600,000 2,868 Have a right to exercise of voting rights *
Sumitomo Mitsui Financial Group, Inc. 510,000 1,389 Have a right to exercise of voting rights *

* These securities described were acquired at the merger of Panasonic Electric Works Co., Ltd.

(As of March 31, 2013)
Specified investment securities
Stock name Number of shares
(shares)
Balance sheet amount
(Millions of yen)
Purpose of holding
Toyota Motor Corporation 9,000,000 43,740 Maintaining and enhancing of relationship with issuer and business transactions
Tesla Motors, Inc. 1,418,573 5,055 Maintaining and enhancing of relationship with issuer and business transactions
Tokyo Broadcasting System Holdings, Inc. 3,083,180 4,344 Maintaining and enhancing of relationship with issuer and business transactions
Honda Motor Co., Ltd. 1,000,000 3,555 Maintaining and enhancing of relationship with issuer and business transactions
Daiwa House Industry Co., Ltd. 1,530,000 2,785 Maintaining and enhancing of relationship with issuer and business transactions
WOWOW INC. 11,004 2,722 Maintaining and enhancing of relationship with issuer and business transactions
Toray Industries, Inc. 4,214,000 2,680 Maintaining and enhancing of relationship with issuer and business transactions
Sekisui House, Ltd. 1,112,071 1,422 Maintaining and enhancing of relationship with issuer and business transactions
Mazda Motor Corporation 3,495,030 982 Maintaining and enhancing of relationship with issuer and business transactions
Joshin Denki Co., Ltd. 1,085,004 974 Maintaining and enhancing of relationship with issuer and business transactions
(c)Equity securities for pure investment
Not applicable.

Audit Fees

Fees to Certified Public Accountants

Category Fiscal year ended March 31, 2012 Fiscal year ended March 31, 2013
Fees for audit services
(Millions of yen)
Fees for non-audit services
(Millions of yen)
Fees for audit services
(Millions of yen)
Fees for non-audit services
(Millions of yen)
The Company (Parent-alone) 581 0 729
Consolidated subsidiaries 1,166 679 3
Total 1,747 0 1,408 3

Other fees

In addition to the above, audit fees paid by the Company and its consolidated subsidiaries to the Company's accounting auditor, KPMG AZSA LLC Group (including KPMG and its group firms which belong to the same network as KPMG AZSA LLC), were 2,093 million yen for the fiscal year ended March 31, 2012, and 2,101 million yen for the fiscal year ended March 31, 2013, respectively. These fees are mainly paid for audit services. Some consolidated subsidiaries paid audit fees to other accounting auditors which do not belong to the same network as KPMG AZSA LLC Group. These fees are mainly paid for audit services.

Descriptions of non-audit services to the Company

Non-audit services to the Company in the fiscal year ended March 31, 2012 include assurance services over the reports which the Company makes optionally, and the non-audit services in the fiscal year ended March 31, 2013 include agreed-upon procedures to which the fee is charged.

Policy on determination of audit fees

For determining the amount of audit fees, the Company considers matters that include the number of days of audit, taking into consideration of the size of the Company, the scope and characteristics of the audit, etc.

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