Section 4. Further Strengthening of the Corporate Structure and Group Reorganization

4. Launching a Plan to Strengthen the Daibiru Group

A consolidated accounting system was established in accordance with the 2000 revision of the Act on Special Measures for the Commercial Code, which required companies to carry out consolidated accounting as part of group management. In January 2000, Daibiru also announced its “Basic Policy and Action Plan for Strengthening the Daibiru Group” and clarified the following objectives.

“Accommodate the current consolidation-centric business trends and devise a way of enhancing the expertise and management capabilities of affiliated companies. Strengthen the foundation of the group as a whole and pursue expansion by establishing stronger ties with other group companies than ever before, with Daibiru itself as the core company.”

On that basis, Daibiru was to strengthen each company’s management in the areas of business, accounting, and personnel affairs, and Daibiru itself would provide management advice and instructions as necessary. In order to achieve those objectives, the Daibiru Group Strengthening Committee was formed along with subcommittees for the Tokyo and Osaka Offices.

In order to survive and be victorious in the future, in order to proactively respond to change and pursue new profit opportunities with the mindset that this would be our second founding, and in order to review our existing profit structure and business structure without being constrained by the successes experienced in the past, our company was to take on the challenge of restructuring its business in the following two areas.

The first was to consolidate functions that were dispersed throughout Daibiru and its affiliates. Specifically, building management, which was being handled by Daibiru itself, would be consolidated under Osaka All Service (whose name was changed to Daibiru Facility Management, Ltd. in 2007) and ESCA Corporation in order to pursue further specialization and efficiency in those functions. The second was to include Dojima Estate, Osaka All Service, and ESCA Corporation in our consolidation efforts in addition to Kansai Tatemono Kanri, which had already adopted consolidated accounting, in response to the current consolidation-centric business trend. We began implementing this change in fiscal 2000.