We have over four decades of operating history. We are the second largest pachinko hall operator in Japan in terms of the total value of pachinko balls and pachislot tokens rented in 2010 and the largest in terms of number of halls according to Yano Research. Our network of pachinko halls principally operates under our DYNAM (ダイナム), Yuttari Kan (ゆったり館) and Shinrai no Mori (信頼の森) brands. Over the course of our business history, we have been continuously adapting to the changing preferences of our pachinko players.
Our origins date back to 1967 when Sawa Shoji Co., Ltd. was established in Japan by Mr. Yohei SATO (佐藤洋平), the father of Mr. Sato. Sawa Shoji Co., Ltd. was wholly-owned by Mr. Yohei SATO and was the predecessor of Dynam, which was, and remains to be, the holding company of the majority of our pachinko hall operations. The name "Sawa" was derived by combining the Japanese characters "sa 佐" (from Sato 佐藤) and "wa 和" (harmony).
Our four decades of pachinko hall operations began with our first two pachinko halls in Kameari (亀有) and Kanamachi (金町), Tokyo, which commenced business in July 1967. In 1970, Mr. Sato and the Sato Family Members succeeded the interests in Sawa Shoji Co., Ltd. from Mr. Yohei SATO. In 1978, Mr. Sato was named as the president and representative director (daihyo torishimariyaku 代表取締役) of Sawa Shoji Co., Ltd. and our pachinko hall operations have since been under his leadership and direction.
In 1985, the revision of the Amusement Business Law, which standardised the licensing regime of the pachinko industry across Japan, provided a favourable environment for the development of a nationwide pachinko chain in Japan. The expansion of our pachinko hall operation came in 1987 when Sawa Shoji Co., Ltd. was renamed as DYNAM Co., Ltd. which, according to Mr. Sato, was part of his plan to transform his family business into a nationwide operation. The name DYNAM (ダイナム) is an abbreviation of Dynamic Amusement, emphasising our pachinko halls as an exciting entertainment option for our customers. In 1989, the opening of our pachinko hall in Shibata (新発田), Niigata Prefecture (新潟県) marked the beginning of our expansion beyond the Tokyo metropolitan area. We extended our footprint beyond the Kanto (関東) region in 1992 by establishing our first hall on the northern island of Hokkaido (北海道) in Iwamizawa (岩見沢). Subsequently, we expanded into Kyushu (九州) in 2001 and Shikoku (四国) in 2002, upon which we had established presence in four of the major regions in Japan.
We developed our Yuttari Kan (ゆったり館), and Shinrai no Mori (信頼の森) brands in the 2000s. While maintaining our appeal to traditional players we have established our new brands to emphasise the entertainment aspect of pachinko halls. Our first Yuttari Kan (ゆったり館) and Shinrai no Mori (信頼の森) halls opened in 2007 and 2009, respectively, featuring low playing cost game machines, and a wider selection of general prizes.
In particular, our Shinrai no Mori (信頼の森) brand is a new concept in the pachinko industry. Shinrai no Mori (信頼の森) came from two Japanese words, ''Shinrai 信頼'' (trust) and ''Mori 森'' (forest). By setting up designated closed-off smoking areas, air purifiers and segregated relaxation areas, we are committed to creating an environment with high air quality at our Shinrai no Mori (信頼の森) pachinko halls, directly addressing the feedback of potential pachinko players who are generally discouraged by high noise levels and the possibility of passive smoking at pachinko halls, according to our own market research. Our new brands have been established to attract a more diverse customer base. In 2009, the number of our pachinko halls had reached 300.
To further expand our business, we acquired 100% interests in three regional pachinko hall operators in 2009 and 2010, namely Cabin Plaza, Daikokuten, and Okuwa Japan, adding to our network eight pachinko halls in Fukushima (福島県), Yamanashi (山梨県), Mie (三重県) and Aichi(愛知県) prefectures which were previously under served by our network. These pachinko halls operate under the brands Cabin Plaza (キャビンプラザ) and Yasumi Jikan (やすみ時間).Currently, Cabin Plaza operates four pachinko halls in total. Two are traditional halls operating under the Cabin Plaza (キャビンプラザ) brand, and two are Yuttari Kan halls operating under our Cabin Plaza (キャビンプラザ) and Yasumi Jikan (やすみ時間) brands, respectively. Daikokuten currently operates two pachinko halls and Okuwa Japan operates three pachinko halls, all of which are Yuttari Kan halls operating under our Yasumi Jikan (やすみ時間) brand.
Under the leadership of Mr. Sato, our pachinko operations have expanded from two pachinko halls in Tokyo in 1970 to 355 halls in 46 prefectures across Japan, as at 31 March 2012.
（Quoted from the Prospectus）
