This excerpt taken from the TM 20-F filed Jun 25, 2008.
Appendix 5
Items
Standard
(1) Incorporation, dissolution, acquisition and transfer of subsidiaries:
1 definition of “incorporation, dissolution, acquisition and transfer of
subsidiaries”
(1) “Subsidiary”
A joint stock company of which TMC holds a majority of its voting rights, or other companies judged to be a subsidiary of TMC pursuant to Article 3 of the Implementation Rules of the
Corporation Act.
(2) “Directly held subsidiary”
A joint stock company that is a subsidiary of TMC with a majority of its voting rights held by TMC.
(3) “Wholly owned subsidiary”
A joint stock company of which TMC directly or indirectly holds all of its voting rights.
(4) “Incorporation”
Used when a subsidiary is established.
(5) “Dissolution”
Used when a subsidiary is dissolved.
(6) “Acquisition”
Used when a subsidiary is obtained through, for example, acquisition of shares (excluding cases which fall under incorporation).
(7) “Transfer”
Used when a company loses its status as a subsidiary of TMC through, for example, TMC’s sale of shares of the subsidiary (excluding cases which fall under dissolution).
2 submission standard of “incorporation, dissolution, acquisition and transfer of
subsidiaries”
(1) Directly held subsidiary
Matters to be resolved
(2) Principal subsidiary, not falling under (1) above*1
Matters to be resolved
(3) Subsidiary with capital of 500,000,000 Yen or more, not falling under (1) or (2) above
Matters to be reported
(4) Subsidiary, not falling under (1)-(3) above
Submission not necessary in principle
(2) Important group managerial matters*2
1 Monetary standard
If a wholly owned subsidiary conducts Items 1~5 of “Disposition and acquisition of important property” as defined above, amounts, quantifies, special rules, definitions and
explanations of the same Items shall apply.
11
2 Qualitative standard
If in the case of “Disposition and acquisition of important property”*i,
“Borrowing of a large amount of money”*ii, business alliance, joint venture or reorganization of business, etc., conducted by a subsidiary
of TMC, which may materially affect TMC’s group management*iii.
(*1)
Examples of “principal subsidiary” are as follows:
(i)
Wholly owned subsidiary
(ii)
Subsidiary engaged in a new business
(iii)
Subsidiary with a substantial amount of capital (5,000,000,000 Yen or more)
(iv)
Subsidiary established as a result of a business alliance or joint venture with a dominant competitor
(v)
Subsidiary which was insolvent as of the end of the most recent closing date of accounts or that is anticipated to become insolvent during its current fiscal period (this shall
apply only to acquisitions)
(vi)
Other managerially important subsidiaries
(*2)
If a matter falls under either “Monetary standard” or “Qualitative standard”, it shall be submitted to the Board of Directors.
(*i)
In conducting Items 1~7 of “Disposition and acquisition of important property” as defined above, materiality shall be determined in reference to amount, quantity, special
rules, definition and explanation defined in the same Items.
(*ii)
In conducting Items 1~2 of “Borrowing of a large amount of money” as defined above, materiality shall be determined in reference to amount, quantity and special rules
defined in the same Items.
(*iii)
With respect to other items, materiality shall be determined in reference to TMC’s submission standards of matters to be submitted to the Board of Directors.
