In view of the current difficult and uncertain business environment, the Company is taking proactive measures to ensure that our photography-related business, the core of our company, returns to profitability as soon as possible.

The decision to carry out structural change was made as part of efforts aimed at the speedy and drastic turnaround of our photography-related business. These changes seek to achieve greater managerial flexibility and efficiency, and ensure that business operations are better aligned with customer needs.

While the board of executive officers will remain as part of the company’s structure, all executive officers are to be relieved of their positions based on the judgment that this change will simplify managerial decision making processes, improve business efficiency, and promote rapid decision making.

The existing nine business units and 30 divisions (including Imaging Solution Research Center) will be reorganized into six business units and 18 divisions. The establishment of a new organization aims to provide a structure that ensures customer needs are reflected in managerial decisions in a timely manner, ensures that concrete steps are taken for the examination and commercialization of new business prospects, and promotes flexible and efficient management.

Furthermore, as part of human resources measures that aim to enhance employees’ career development choices, revisions have been made to the early retirement support system, dormant since 2006, with a new initiative called “NEXT Career Support System,” which will take effect beginning in March 2010.

The structural and personnel system changes outlined above are aimed at speeding up structural reorganization efforts within the Company.

:

A Corporate Planning Office and Intellectual Property Office are to be established under the direct control of the representative directors bring the core photography-related business back to profitability as soon as possible, promote strategic planning for the speedy commercialization of new business prospects, and expedite the business decision making process.

The Sales, Marketing and Business Alliance Units will be integrated into a single Sales unit in an effort to expedite business decisions aimed at addressing customer needs.

The Customer Service Unit will be transformed into the Quality Control Unit, and will be charged with overseeing quality control from design through to after service.

In order to conduct administrative tasks in a flexible and efficient manner, the Management Administration Unit and Operations Administration Unit will be integrated into a single Management Administration Unit.

As part of a newly proposed permanent human resources policy, the early retirement support system will be reactivated in March 2010. In view of the current state of the labor market, the Company is currently considering ways to improve the system, which is aimed at management, including extending the period in which support is provided.