We were incorporated in Japan and are subject to the the Companies Act* (会社法) of Japan (Act No. 86 of 2005) (the“Japan Companies Act”) and other applicable Japan laws and regulations. The Hong Kong legal and regulatory regime differs in certain material aspects from that in Japan. Some key differences include:

1.Bearer Shares
Under Japan law, the shares of our Company (the “Shares”) are “bearer shares” in nature. A bearer, or a physical holder, of a share certificate issued by us is generally recognised as the owner of the Shares represented by it. Ownership of our Shares can be transferred simply by the delivery of our share certificates, regardless of whether the transferor and the transferee have signed any document evidencing such transfer. This creates inherent risks for our Shareholders and potential investors who choose to hold our Shares by physical possession of our share certificates. To avoid these risks, which are very significant in our directors’opinion, you (as potential investors) are strongly recommended to hold your investments in our Company through CCASS.

2.CCASS
Due to certain Japan legal and regulatory provisions, beneficial owners who hold pecuniary interests in our Shares through CCASS (the“CCASS Beneficial Owners”) are subject to certain disadvantages as set out in detail in “Key Japan Legal and Regulatory Matters — A. Bearer Shares — Recommended measures for our Shareholders and potential investors” in the prospectus issued by us on 24 March 2015 (the “Prospectus”). For example, CCASS Beneficial Owners do not have the option to elect the currency of their dividend payments, and they may not inspect our Share Register unless allowed to do so under the Personal Information Protection Act* (個人情報の保護に関する法律) of Japan (Act No.57 of 2003). Despite these disadvantages, given the risks associated with our“bearer” Shares (which are very significant in our directors’ opinion), it is our directors’ strong recommendation that you (as potential investors) should hold your investments in our Company through CCASS.

3.Taxation
We are required under Japan law to withhold up to 20.420% of taxes on dividend payments. Withholding tax rates may vary according to the circumstances of an investor, and Hong Kong shareholders (except for CCASS Beneficial Owners) are entitled to a lower tax rate under the the Agreement between the Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income dated 9 November 2010. If you choose to invest through CCASS, you will be subject to a higher withholding tax rate.

You should refer to the sub-section “Key Japan Legal and Regulatory Matters” on this website for details of the Japanese legal and regulatory provisions that our directors consider may be material to our shareholders and potential investors. If in doubt, you should obtain independent professional advice.
* for identification purpose only