Basic Policy for Corporate Governance

1. Basic Policy

Bookoff Corporation has established as one of its management principles “Contribute to local communities through our business activities,” and conducts its business as a public entity. Part of this effort is the pursuit of business efficiency with the goals of management in compliance with laws and regulations, and improvement in shareholder value. Bookoff believes the judgment of shareholders as to its success in this regard, determined through highly transparent disclosure, to be essential.

2. Board of Directors

Bookoff currently has ten full-time directors. Seven of them are full-time directors, namely the chairman of the Board, the president and CEO, senior managing director, as well as a director in charge of the strategy department, a director in charge of the sales department, a director in charge of the planning department and a director in charge of the administrative department.
Three outside directors have also been appointed to provide an objective perspective and incisive advice. Outside Director Takayuki Suzuki (formerly a senior analyst with Merrill Lynch Japan Securities and currently the representative of Primo Research Japan), draws on his experience as an analyst to give advice from the perspective of capital markets, shareholders, and investors.
In addition, Norinari Osumi and Hiroyuki Hijikata have been appointed outside directors to provide advice from the perspective of the publishing industry. Mr. Osumi is a senior managing director of Showa Tosho, an affiliate of Shueisha Inc. and Shogakukan Inc., which are shareholders of Bookoff, and Mr. Hijikata is a managing director of Maruzen Co., Ltd., a shareholder of Bookoff.

3. Business Execution Structure Centered on the Board of Directors

There are four executive officers. Under this structure the report line of each business division and related person is made clear, and a four-head-office structure consisting of Sales, Strategy, Marketing, and Administration has been introduced to clarify rights and responsibilities, with each head office general manager post filled by an internal director or managing executive officer.

4. Oversight of Business Execution and the Compliance Structure

Bookoff has established a Board of Company Auditors, which consists of four company auditors, including three outside auditors to ensure the independence of the Board of Company Auditors and the effectiveness of audits. Full-time auditors attend meetings of the Board of Directors and other important in-house meetings such as the Management Committee and the Operations Committee, so that they are able to monitor how operations are performed by directors and others. The Internal Audit Committee has also been established as an organization under the direct control of the president and CEO. The internal audit is conducted throughout the year, and its results are reported directly by the Internal Audit Committee at meetings of the Board of Directors and the Management Committee, which the full-time auditors attend. As Bookoff operates primarily in accordance with the Secondhand Articles Dealer Act, it is important to instill a spirit of compliance into all layers of employees, including part-time and temporary workers at each store. To that end, we are endeavoring to improve the compliance system and raise awareness at sales sites by bolstering cooperation between the Internal Audit Committee and departments that control sales sites, such as the Bookoff operation department. Deloitte Touche Tohmatsu LLC, Tohmatsu Tax Co. conducts the audits under the Companies Act and the Financial Instruments and Exchange Act from an independent, equitable and unbiased standpoint. For auditing, the external audit corporation, company auditors and the Internal Audit Committee exchange information as necessary.

5. Promoting Communication with Stakeholders

Bookoff, in accordance with its management principles, recognizes that a respect for its relationships with stakeholders is essential to continued business development. For this reason, Bookoff has established an internal structure that fundamentally provides timely and appropriate disclosure of items related to the assessment of the corporate value of the Company and its corporate Group.
Bookoff recognizes that the shareholders’ meeting, the cornerstone of corporate governance, is an important venue for communication with shareholders. It holds the meeting on weekends, on a day different from that when many other companies are holding shareholder meetings, and convenes it in Tokyo, which is convenient for nearly all shareholders. It also works to enliven the meeting by presenting a briefing on the status of the Company.
Going forward, Bookoff will continue to maintain appropriate relationships with its wide range of shareholders, and for its shareholders, investors and society in general will provide information, promote communications, and ensure accountability as its responsibility as a listed company.

Director and Company Auditor Compensation

Compensation for directors is paid in a fixed amount decided by the Board of Directors, within the range of \18.5 million per month, the upper limit resolved at the Shareholders Meeting. Bookoff does not have a system of retirement benefits for directors.
Bookoff, in order to maximize the consolidated corporate value of the Group through shared interests with its shareholders, grants stock options and employs a director shareholder association system to encourage directors to hold shares in the Company.
Total amount of compensation paid to directors and company auditors in the fiscal year to March 2010 is as follows.

Position	No. of Persons	Payment Amount
Directors (of which, outside directors)	9 (2)	\99,630,000 (\10,500,000)
Company Auditors (of which, outside auditors)	3 (2)	\24,103,000 (\11,100,100)
Total (of which, outside directors and auditors)	12 （4）	\123,733,000 (21,600,000)