CAPCOM IR

Directors state in writing their fundamental policies for management with regard to managing the operations of the company. These fundamental policies include separate items for the basic philosophy, operational goals and dividend policy, medium and long-term management strategies, and issues requiring attention.

The principle of Capcom group is to be a creator of entertainment culture. Through development of highly creative software contents that excite people and stimulate their senses, we have been aiming to offer an entirely new level of game entertainment. Our management objectives are also on strengthening relationships with stakeholders, such as shareholders, clients and our employees, to satisfy demands and to bring about prosperous benefits.

As financial conditions in Japan change, such as the implementation of new accounting standards, we believe "Cash-Flow Management" (real management that generates cash) has become an important factor - more important than to make up financial statements utilizing changes in accounting standards. We do not set actual target figures on specific fields because we understand "Cash-Flow Management" as a very important factor for evaluating decision-making processes and corporate values.

One of our management priorities is on stable and continuous dividends to all shareholders, taking account of our future business strategies as well as our management environment.
Our surplus dividend is basically paid twice a year, that is, at the end of mid-term and fiscal year. Dividend payment amount is decided by a competent corporate body, which is the board of directors for the mid-term, and during the shareholders meeting for the fiscal year.

Major issues to be addressed taking in consideration surrounding business environments and future market trends:

1. Consolidation of the Critical Strategic Divisions
   We will concentrate our management resources in the home video game software segment, which is our core business, especially in its development and marketing divisions in order to strengthen the competitive edge.
2. Focus on the Overseas Operations
   Making strong efforts in developing overseas markets is the key to the future business growth as the Japanese domestic market matures. We are determined to execute the strategic overseas operation deployment through the group-wide global business restructuring. One such effort will be to conduct corporate reforms of overseas subsidiaries including Capcom U.S.A., Inc., one of our crucial subsidiaries.
3. Selection and Concentration of Business
   We are focused on setting a clear vision for the future by harnessing our corporate strength through the effective use of our research and development resources. In addition, we are pushing through a strategy that concentrates management resources on selected business to make the most of the collective power of the entire Capcom group, thus increasing our corporate value. Investment in growth field and the decision to close down unprofitable businesses are examples of such activities.
4. Expansion of the Business Field
   We will focus on growing the content-related business such as distribution of games to mobile phones to expand our business fields in response to changes in the managerial environments.
5. Enhancement of the Corporate Quality
   We are trying to realize flexible business operations and to improve our operation efficiency through the management innovation. At the same time we are building a framework that enhances our revenue base. As part of such efforts to enhance our business foundation, we are pursuing the strategic group operation and financial structure reformation by reinforcing the management system of both domestic and foreign subsidiaries.