SATO TO BOOST SHAREHOLDER VALUE WITH NEW CORPORATE GOVERNANCE SYSTEM

Executive Officers allows board of directors to focus on strategy and management policy

SINGAPORE – July 29, 2003 – SATO, a leader in barcode printing since introducing the first thermal transfer barcode printer in 1979, announced today the implementation of a new corporate governance system to help the company increase its value to shareholders.

The new system separates management decision making and governance from operations, all of which were the responsibilities of the board of directors. Operations will now be handled by a team of Executive Officers, reporting to the board of directors. This allows the company to maintain transparency and objectivity in management while responding quickly to market changes.

Previously, in Japan, the board of directors held responsibilities that covered strategic decision making, management, and operations with an audit committee that was appointed by the board of directors to monitor these activities. However, the Japanese government realized that this was not an effective system of corporate governance and this is one reason why the commercial code in Japan was revised in 2002 which calls for companies to adopt a system of committees separating management from governance.

Mr. T. Fujita, Chairman for SATO Corporation Japan, said, “At SATO, we are taking steps to ensure a smooth transition to the new commercial code, and at the same time, enhance our value to shareholders. Our first step is the introduction of Executive Officers, appointed by the board of directors, who will take over all operational responsibilities. The Executive Officers will pursue profits and perform corporate governance on behalf of the shareholders, and be accountable to the board of directors as well.”

“There is a reduction in the size of our board of directors since the performance of management activities is now entrusted to the Executive Officers. However, decision-making will be accelerated as board members can now focus on the more important matters like strategy and management policy. The audit committee will still continue so as to meet the requirements of the current commercial code. Once this system has been stabilized, we will proceed onto the next phase of fully separating management from governance.” added Mr. Fujita.

In addition to the Executive Officer system, SATO´s other corporate governance system is its unique "market feedback report system" that includes reporting in the following areas: creative innovations that will improve the company’s performance, areas in need of improvement, and proposed solutions. With rapid market changes, this system which has well-served SATO for more than 25 years, contributes not only by promoting corporate governance but also in improving compliance.

The SATO board of directors
Back row from left to right:
Toshihiro Waki, Takeshi Fukuma,
Nobuhiro Yokoi and Koichi Nishida
Front row (seated) from left to right;
Tokuo Fujita and Masanori Otsuka

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About SATO

SATO is a pioneer in the Automatic Identification and Data Collection (AIDC) industry, and the inventor of the world’s first electronic thermal transfer barcode printer. It revolutionised the barcoding industry by introducing the Data Collection System (DCS) and Labelling concept – a total barcode and labelling solutions approach providing high quality barcode printers, scanners/hand held terminals, label design software and consumables. SATO is a public listed company in Japan and has worldwide offices in United States, Germany, United Kingdom, Poland, Belgium, Singapore, Malaysia, Thailand and China. SATO reported revenues of US$445 million in 2002. SATO stock is traded on first section of Tokyo Stock Exchange. More information can be found at www.sato.co.jp.