10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(MARK ONE)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended September 30, 2009

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-14665

DAILY JOURNAL CORPORATION

(Exact name of registrant as specified in its charter)

South Carolina	95-4133299
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
915 East First Street Los Angeles, California	90012
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (213) 229-5300

Securities registered pursuant to Section 12(b) of the Act: Common Stock, The NASDAQ Stock Market.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K:  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated  ¨    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x

As of the last business day of Daily Journal Corporation’s most recently completed second fiscal quarter, the aggregate market value of Daily Journal Corporation’s voting stock held by non-affiliates was approximately $20,465,000.

As of December 11, 2009 there were outstanding 1,447,028 shares of Common Stock of Daily Journal Corporation.

Documents incorporated by reference: Portions of the Proxy Statement for the Annual Meeting of shareholders to be held during February 2010 are incorporated by reference into Part III.

Disclosure Regarding Forward-Looking Statements

This Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this document, including but not limited to those in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, are “forward-looking” statements that involve risks and uncertainties that may cause actual future events or results to differ materially from those described in the forward-looking statements. Words such as “expects,” “intends,” “anticipates,” “should,” “believes,” “will,” “plans,” “estimates,” “may,” variations of such words and similar expressions are intended to identify such forward-looking statements. We disclaim any intention or obligation to revise any forward-looking statements whether as a result of new information, future developments, or otherwise. There are many factors that could cause actual results to differ materially from those contained in the forward-looking statements. These factors include, among others: risks associated with Sustain’s internal software development efforts; Sustain’s reliance on the time and materials professional services engagement with the California Administrative Office of the Courts for a substantial portion of its consulting revenues; an adverse outcome of the Internal Revenue Service’s audit of our past research and development tax credits; material changes in the costs of postage and paper; possible changes in the law, particularly changes limiting or eliminating the requirements for public notice advertising; a further decline in subscriber and commercial advertising revenues; collectibility of accounts receivable; the Company’s reliance on its president and chief executive officer; and changes in accounting guidance. In addition, such statements could be affected by general industry and market conditions, general economic conditions (particularly in California) and other factors. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed in this Form 10-K, including in conjunction with the forward-looking statements themselves, and in other documents filed by the Company with the Securities and Exchange Commission.

2

PART I

Item 1. Business

The Company publishes newspapers and web sites covering California and Arizona, as well as the California Lawyer and NextGen magazines, and produces several specialized information services. It also serves as a newspaper representative specializing in public notice advertising. Sustain Technologies, Inc. (“Sustain”), a wholly-owned subsidiary, supplies case management software systems and related products to courts and other justice agencies, including administrative law organizations. These courts and agencies use the Sustain family of products to help manage cases and information electronically and to interface with other critical justice partners. Sustain’s products are designed to help users manage electronic case files from inception to disposition, including all aspects of calendaring and accounting, report and notice generation, the implementation of standards and business rules and other corollary functions. Essentially all of the Company’s operations are based in California, Arizona and Colorado. Financial information of the Company and Sustain is set forth in Item 8 (“Financial Statements and Supplementary Data”).

Products

Newspapers and related online publications. The Company publishes 12 newspapers of general circulation. Each newspaper, in addition to news of interest to the general public, has a particular area of in-depth focus with regard to its news coverage, thereby attracting readers interested in obtaining information about that area through a newspaper format. The publications are based in the following cities:

Newspaper publications	Base of publication
Los Angeles Daily Journal	Los Angeles, California
Daily Commerce	Los Angeles, California
California Real Estate Journal	Los Angeles, California
San Francisco Daily Journal	San Francisco, California
The Daily Recorder	Sacramento, California
The Inter-City Express	Oakland, California
San Jose Post-Record	San Jose, California
Sonoma County Herald-Recorder	Santa Rosa, California
Orange County Reporter	Santa Ana, California
San Diego Commerce	San Diego, California
Business Journal	Riverside, California
The Record Reporter	Phoenix, Arizona

The Daily Journals. The Los Angeles Daily Journal and the San Francisco Daily Journal are each published every weekday except certain holidays and were established in 1888 and 1893, respectively. In addition to covering state and local news of general interest, these newspapers focus particular coverage on law and its impact on society. (The Los Angeles Daily Journal and the San Francisco Daily Journal are referred to collectively herein as “The Daily Journals”.) Generally The Daily Journals seek to be of special utility to lawyers and judges and to gain wide multiple readership of newspapers sent to law firm subscribers.

3

The Daily Journals contain much material and render many services in a common endeavor. The Los Angeles Daily Journal is the largest newspaper published by the Company, both in terms of revenues and circulation. At September 30, 2009, the Los Angeles Daily Journal had approximately 6,950 paid subscribers and the San Francisco Daily Journal had approximately 3,200 paid subscribers as compared with total paid subscriptions for both of The Daily Journals of 11,500 at September 30, 2008. There is also a digital version of The Daily Journals distributed electronically by an outside provider to about 120 paid subscribers. The Daily Journals carry commercial advertising (display and classified) and public notice advertising required or permitted by law to be published in a newspaper of general circulation. The main source of commercial advertising revenue has been local advertisers, law firms and businesses in or wishing to reach the legal professional community. The gross revenues generated directly by The Daily Journals are attributable approximately 63% to subscriptions and 37% to the sale of advertising and other revenues. Revenues from The Daily Journals constituted approximately 24% of the Company’s total revenues during fiscal 2009 and 30% during fiscal 2008.

The Daily Journals contain the Daily Appellate Report which provides the full text and case summaries of all opinions certified for publication by the California Supreme Court, the California Courts of Appeal, the U.S. Supreme Court, the U.S. Court of Appeals for the Ninth Circuit, the U.S. Bankruptcy Appellate Panel for the Ninth Circuit, the State Bar Court and selected opinions of the U.S. District Courts in California and the Federal Circuit Court of Appeals. The Daily Journals also include a monthly court directory in booklet form. This directory includes a comprehensive list of sitting judges in all California courts as well as courtroom assignments, phone numbers and courthouse addresses, plus “Judicial Transitions” which lists judicial appointments, elevations, confirmations, resignations, retirements and deaths.

It is the policy of The Daily Journals (1) to take no editorial position on the legal and political controversies of the day but instead to publish well-written editorial views of others on many sides of a controversy and (2) to try to report on factual events with technical competence and with objectivity and accuracy. It is believed that this policy suits a professional readership of exceptional intelligence and education, which is the target readership for the newspapers. Moreover, The Daily Journals believe that they bear a duty to their readership, particularly judges and justices, as a self-imposed public trust, regardless, within reason, of short-term income penalties. The Company believes that this policy of The Daily Journals is in the long-term interest of the Company’s shareholders.

The Company publishes the California Directory of Attorneys (the “Directory”), which is updated and published semi-annually, in January and July. The Directory includes in a single volume names, addresses, fax and telephone numbers of California lawyers and many informational sections including listings of corporate counsel, private judges, arbitrators and mediators, and federal and state courts and governmental offices. In addition, the Directory includes commercial advertising and specialty listings. The Directory is provided as part of normal newspaper service to subscribers of The Daily Journals. In addition, there are about 2,100 directories sold. The regular annual rate is $55.

The Daily Journals are distributed by mail and hand delivery, with subscribers in the Los Angeles and San Francisco areas usually receiving copies the same day. Certain subscribers in Los Angeles, San Francisco, Santa Clara, Alameda, Orange and San Diego counties receive copies by hand delivery, and additional copies are distributed by microfilm subscriptions. The regular yearly subscription rate for each of The Daily Journals is $693.

4

Much of the information contained in The Daily Journals is available to subscribers online at www.dailyjournal.com. There is an additional charge to use some parts of this online service.

Daily Commerce. Published since 1917, the Daily Commerce, in addition to covering news of general interest, devotes substantial coverage to items designed to serve real estate investors and brokers, particularly those interested in Southern California distressed properties. The nature of the news coverage enhances the effectiveness of public notice advertising in distributing information about foreclosures to potential buyers at foreclosures. The features of the paper include default listings and probate estate sales. The Daily Commerce carries both public notice and commercial advertising and is published in the afternoon each business day. It had approximately 250 paid subscriptions at September 30, 2009. A subscription to the Daily Commerce is $264 per year, and it is primarily distributed by mail.

California Real Estate Journal. The California Real Estate Journal (the “Real Estate Journal”) is a weekly newspaper directed primarily to persons interested in the commercial real estate market, including real estate brokers, developers, bankers and real estate lawyers. The Real Estate Journal carries news and features such as the status of commercial projects, financial information and articles on brokers and transactions, including new financings and a weekly Distressed Income Property Report. It carries display and classified advertising. At September 30, 2009, the Real Estate Journal had a circulation of approximately 800 paid subscribers at an annual subscription rate of $124 and 1,700 requester and other subscribers. It is distributed by mail delivery. In addition, there is a digital version of the newspaper distributed to about 3,200 requester subscribers and an online news service.

Much of the information contained in California Real Estate Journal is available online at www.carealestatejournal.com.

The Daily Recorder. The Daily Recorder, based in Sacramento, began operations in 1911. It is published each business day. In addition to general news items, it focuses on the Sacramento legal and real estate communities and on California state government and activities ancillary to it. Among the regular features of The Daily Recorder are news about government leaders and lobbyists, as well as the Daily Appellate Report for those who request it. Advertising in The Daily Recorder consists of both commercial and public notice advertising. The Daily Recorder currently has approximately 500 paid subscribers and is distributed by mail. The current subscription rate is $298 per year.

The Inter-City Express. The Inter-City Express (the “Express”) has been published since 1909. It covers general news of local interest and focuses its coverage on news about the real estate and legal communities in the Oakland/San Francisco area. The Express carries both commercial and public notice advertising. It is published each business day and is mailed to its approximately 100 subscribers. The annual subscription rate is $150.

San Jose Post-Record. The San Jose Post-Record (the “Post-Record”) has been published since 1910. In addition to general news of local interest, the Post-Record, which is published three days a week, focuses on legal and real estate news and carries commercial and public notice advertising. A yearly subscription to the Post-Record is $125. It has approximately 100 subscribers, all of whom receive it by mail.

5

Sonoma County Herald-Recorder. The Sonoma County Herald-Recorder (the “Herald-Recorder”) has been in existence since 1899. The newspaper carries general news of local interest and is designed to be of special interest to members of the legal and real estate professions. Advertising in the newspaper consists of both public notice and commercial advertising. Its approximately 100 subscribers receive the newspaper each business day at a rate of $197 annually.

Orange County Reporter. The Orange County Reporter (“Orange Reporter”) has been an adjudicated newspaper of general circulation since 1922. In addition to general news of local interest, the Orange Reporter reports local and state legal, business and real estate news, and carries primarily public notice advertising. The Orange Reporter is mailed three days a week to approximately 200 paid and other subscribers. The annual subscription rate is $91.

San Diego Commerce. The San Diego Commerce is a thrice-weekly newspaper which carries general news of local interest and public notice advertising and has been an adjudicated newspaper of general circulation since 1970. The San Diego Commerce also serves legal and real estate professionals in San Diego County. It has approximately 300 paid and other subscribers. The annual subscription rate is $66, covering distribution by mail.

Business Journal. The Business Journal publishes news of general interest and provides coverage of the business and professional communities in Riverside County. It carries public notice advertising, and its approximately 300 paid and other subscribers receive it by mail each business day. The annual subscription rate is $55.

The Record Reporter (Arizona). The Record Reporter was acquired in 1995. In addition to general news of local interest, The Record Reporter, which is published three days a week, focuses on real estate news and public record information and carries primarily public notice advertising. It is mailed to approximately 100 paid and other subscribers. The annual subscription rate is $165 for most subscribers.

Magazines. Since 1988, the Company has published the California Lawyer, a legal affairs magazine formerly produced by the State Bar of California (the “State Bar”). The magazine was published by the Company in cooperation with the State Bar until 1993 when the agreement was terminated and the State Bar commenced publishing its own monthly newspaper. The magazine is either mailed or provided in a digital version free to active members of the State Bar and also has approximately 300 paid subscribers. An annual subscription to California Lawyer is $95.

During 2009 the Company commenced publishing periodically NextGen, a legal technology magazine. It is mailed free to about 25,000 individuals in the legal profession. In addition, during 2009 the Company suspended publishing 8-K, a legal magazine for business executives.

Information Services. The specialized information services offered by the Company have grown out of its newspaper operations or have evolved in response to a desire for such services primarily from its newspaper subscribers.

The Company has several court rules services. One is Court Rules, a multi-volume, loose-leaf set which had approximately 2,000 subscribers at September 30, 2009 paying $296 per year. Court Rules reproduces court rules for certain state and federal courts in California. The Court Rules appear in two versions, one of which covers Northern California courts (nine volumes) and one of which covers Southern California courts (eight volumes). The Company updates Court Rules on a monthly basis. In addition, the Company publishes a single volume of

6

rules known as Local Rules for major counties of California. Six versions are published for Southern California, each a single bound volume for the rules of: (1) Los Angeles County; (2) Orange County; (3) San Diego County; (4) San Bernardino County; (5) Riverside County; and (6) Ventura, Santa Barbara and San Luis Obispo counties. Also, the Company publishes single-volume rules for the Federal District Court in the Central District of California and California Probate Rules. In Northern California, three versions of the Local Rules appear in loose-leaf books for Santa Clara/San Mateo, Alameda/Contra Costa and San Francisco counties. The regular subscription price for Local Rules volumes ranges from $60 to $94 per year, and volumes are normally updated or replaced whenever there are substantial rule changes. At September 30, 2009, the Company had approximately 2,800 subscribers for its Local Rules publications.

The Judicial Profiles services contain information concerning nearly all judges in California, both active and retired, many of whom are available for private judging. Most of the profiles have previously appeared in The Daily Journals as part of a regular feature. The Judicial Profiles include biographical data and financial disclosure statements on judges and information supplied by each judge regarding the judge’s policies and views on various trial and appellate procedures and the manner in which appearances are conducted in his or her courtroom. Subscribers may purchase either the ten-volume set for Southern California or the eight-volume set for Northern California. The approximately 700 subscribers to Judicial Profiles receive updates on a quarterly basis. A subscription is $376 for each or $515 for both per year.

The Company also provides computer online foreclosure information to about 180 customers. This service primarily provides distressed property information, some of which also appears in some of the Company’s newspapers, as well as expanded features. Consolidation of both newspapers and online products more effectively utilizes the costs of gathering such information.

Special Online Information Services Supplementing Traditional Services. The Company, like most modern newspapers, supplements service to Daily Journal subscribers and advertisers with an Internet-based online information service. Some of this online service comes as part of a newspaper subscription or advertising placement, with no additional charges, and some can be obtained only when customers pay additional charges. So far, in this activity, incremental costs have exceeded supplemental incremental revenues. The Company believes its online service must offer attractive content, partly to defend existing profits through continuous product improvement, and partly in the hope of eventually obtaining profits from services not traditionally rendered by newspapers.

Advertising and Newspaper Representative. The Company’s publications carry commercial advertising, and most also contain public notice advertising. Commercial advertising consists of display and classified advertising and constituted about 14% of the Company’s total revenues in fiscal 2009 and 21% in fiscal 2008. Classified advertising declined in fiscal 2009 primarily due to the continued downturn in the employment advertising marketplace.

Public notice advertising consists of about 100 different types of legal notices required by law to be published in an adjudicated newspaper of general circulation, including notices of death, fictitious business names, trustee sale notices and notices of governmental hearings. The major types of public notice advertisers are real estate-related businesses and trustees, governmental agencies, attorneys and businesses or individuals filing fictitious business name statements. Many government agencies use the Company’s Internet-based advertising system to produce and

7

send their notices to the Company. In addition, a fictitious business name Web site enables individuals to send their statements to the Company for filing and publication. California Newspaper Service Bureau (“CNSB”), a division of the Company, is a statewide newspaper representative (commission-earning selling agent) specializing since 1934 in public notice advertising. CNSB places notices and other forms of advertising with adjudicated newspapers of general circulation, many of which are not owned by the Company.

Public notice advertising revenues and related advertising and other service fees, including trustee sales legal advertising revenues, constituted about 54% of the Company’s total revenues in fiscal 2009 and 47% in fiscal 2008. Most of these revenues were generated by (i) notices published in the Company’s newspapers, (ii) commissions and similar fees received from other publications in which the advertising is placed and (iii) filing service fees generated when filing notices with government agencies.

Trustee sales legal advertising revenues alone represented about 36% of the Company’s total revenues in fiscal 2009 and 28% in fiscal 2008. These revenues were driven by the large number of foreclosure notices in California and Arizona, for which public notice advertising is required by law. Fiscal 2009 was another exceptional year, and the Company does not expect public notice advertising revenues to continue at the same pace over the long term. In addition, in many states, including California and Arizona, legislatures have considered various proposals which would result in the elimination or reduction of the amount of public notice advertising required by statute. There is a risk that such laws could change in a manner that would have a significant adverse impact on the Company’s public notice advertising revenues.

Other revenues are attributable to service fees from users of an online foreclosure/fictitious business name database, service fees for public record searches, fees from attorneys taking continuing legal education “courses” published in the Company’s publications and other miscellaneous fees.

Information Systems and Services. In 1999, the Company purchased 80% of the capital stock of Sustain from Sustain and certain of its shareholders, and in 2008 Sustain became a wholly- owned subsidiary after additional purchases from certain of its shareholders. Sustain software products are licensed in eleven states and two countries, and many of its clients have more than a decade of experience with the Sustain product line. The Company’s revenues derived from Sustain’s operations constituted about 12% of the Company’s total revenues in fiscal 2009 and 2008. In fiscal 2009, approximately 54% of Sustain’s revenues came from consulting or installation projects, and approximately 46% came from license, maintenance and other service fees.

In recent years, a substantial majority of Sustain’s consulting revenues has come from projects for the California Administrative Office of the Courts. The level of services that Sustain is called upon to perform can fluctuate over time. In addition, the Administrative Office of the Courts generally can terminate its professional services agreement with Sustain on 30 days notice. Consequently, in the future, Sustain expects a reduction in the revenue generated by projects for the Administrative Office of the Courts, and this could have a materially adverse impact on Sustain’s business. In addition, budget constraints, especially during stressful economic times, could force governmental agencies to defer or forgo consulting services or even to stop paying their annual software maintenance fees.

8

As a technology based company, Sustain’s success depends on the continued development and improvement of its products. The Company’s expenditures in support of the Sustain software are significant and will continue to be necessary to maintain and grow Sustain’s business, as customers demand additional functionality and Internet-based products. Sustain’s internal development costs, which are primarily incremental labor costs, are being expensed as incurred and accordingly will materially impact earnings at least through fiscal 2010. If the Company’s development programs are not successful, it will negatively affect the Company’s ability to maximize its existing investment in the Sustain software and to compete for new opportunities in the case management software business.

Printing. The Company’s main printing facilities are located in Los Angeles and currently are used primarily to print the Daily Journals and its supplements and some of the other publications. The Company installed computer-to-plate production equipment in Los Angeles in 2003 and digital copiers and other equipment for the printing of the Judicial Profiles, the Court Rules and items such as legal advertising and office forms, promotional flyers and other materials for its publications and for a few other customers in 2004. The California Lawyer and NextGen magazines, the Directory and some of the other publications are printed by outside contractors.

Materials and Postage

After personnel and software development costs, postage and paper costs are typically the Company’s next two largest expenses. Paper and postage accounted for approximately 6% of our publishing segment’s operating costs in fiscal 2009 and 8% in fiscal 2008. Paper prices may fluctuate substantially in the future, and periodic postal rate increases could significantly impact income from operations. Further, we may not be able to pass on such increases to our customers.

An adequate supply of newsprint and other paper is important to the Company’s operations. The Company currently does not have a contract with any paper supplier. The Company has always been able to obtain sufficient newsprint for its operations, although in the past, shortages of newsprint have sometimes resulted in higher prices. The price of paper has decreased moderately during fiscal 2009. We anticipate the paper price will rise in fiscal 2010.

We use the U.S. Postal Service for distribution of a majority of our newspapers and magazines. During the past several years, the Company has instituted changes in an attempt to mitigate higher postage costs. These changes have included contracting for hand delivery in selected sections of the San Francisco Bay area, San Diego, Orange County and Los Angeles, delivering pre-sorted newspapers to the post office on pallets, which facilitates delivery and improves service, and implementing a method of bundling newspapers which reduces the per piece charges. In addition, the Company has an ink jet labeler which eliminates paper labels and enables the Company to receive bar code discounts from the postal service on some of its newspapers.

Postal rates are dependent on the operating efficiency of the U.S. Postal Service and on legislative mandates imposed upon the U.S. Postal Service. During the past several years, the U.S. Postal Service increased rates and added new pallet/sack/tray fees. There were decreases in the Company’s postage costs during fiscal 2009 primarily due to fewer subscribers. However, we expect our postage costs to increase in fiscal 2010.

9

Marketing

The Company actively promotes its individual newspapers and its multiple newspaper network as well as its other publications. The Company’s staff includes a number of employees whose primary responsibilities include attracting new subscribers and advertisers. The specialization of each publication creates both target subscribers and target advertisers. Subscribers are likely to be attracted because of the nature of the information carried by the particular publication, and likely advertisers are those interested in reaching such consumer groups. In marketing products, the Company also focuses on its ancillary products which can be of service to subscribers, such as its specialized information services.

The Company receives, on a non-exclusive basis, public notice advertising from a number of agencies. Such agencies ordinarily receive a commission of 15% to 25% on their sales of advertising in Company publications. Commercial advertising agencies also place advertising in Company publications and receive commissions for advertising sales.

Sustain’s staff includes several employees who provide marketing and consulting services which may also result in additional consulting projects and the licensing of Sustain products.

Competition

Competition for readers and advertisers is very intense, both by established publications and by new entries into the market. The Daily Journals face aggressive competition, including amazingly low prices for multiple copy subscriptions, from law-oriented newspapers in Los Angeles, San Francisco and San Diego. All of the Company’s real estate and business publications and products face strong competition from other publications and service companies. Readers of specialized newspapers focus on the amount and quality of general and specialized news, amount and type of advertising, timely delivery and price. The Company designs its newspapers to fill niches in the news marketplace that are not covered as well by major metropolitan dailies. The in-depth news coverage which the Company’s newspapers provide along with general news coverage attracts readers who, for personal or professional reasons, desire to keep abreast of topics to which a major newspaper cannot devote significant news space. Other newspapers do provide some of the same subject coverage as does the Company, but the Company believes its coverage, particularly that of The Daily Journals, is more complete and therefore attracts more readers. The Company believes that The Daily Journals are the most important newspapers serving California lawyers on a daily basis.

The Company’s court rules publications face competition in both the Southern California market as well as in Northern California from online court rules services and the Courts. Subscriptions to the multi-volume Court Rules and Local Rules volumes have continued decline during fiscal 2009. The Company’s Judicial Profile services have direct competition and also indirect competition, because some of the same information is available through other sources.

The steady decline in recent years in the number of subscriptions to The Daily Journals and the Company’s court rule publications is likely to continue and will certainly impact the Company’s future revenues. The pricing of the Company’s products is reviewed every year. Subscription price increases have in recent years exceeded inflation, as have advertising rate increases.

In attracting commercial advertisers, the Company competes with other newspapers and magazines, television, radio and other media, including electronic network systems for employment-related classified advertising. Factors which may affect competition for advertisers

10

are the cost for such advertising compared with other media, and the size and characteristics of the readership of the Company’s publications.

In an expanding economy, classified advertising and fictitious business name legal advertising normally increase while trustee sale legal notice advertising declines. The reverse is normally also true, as experienced in fiscal 2009 and 2008. Because the Company’s business is concentrated in California, our advertising revenues are particularly susceptible to trends affecting California and the Western United States.

Recently, Internet sites devoted to recruitment have become significant competitors of our newspapers and websites for classified advertising. In addition, there has been a steady consolidation of companies serving the legal market place, resulting in an ever-smaller group of companies placing display advertising. Consequently, retaining advertising revenues remains a challenge.

The Company competes with anywhere from one serious competitor to many competing newspapers for public notice advertising revenue in all of its markets. Large metropolitan general interest newspapers normally do not carry a significant amount of legal advertising, although recently they too have solicited certain types of public notice advertising. The Company estimates its market share of public notice advertising revenues ranges up to about 70% in the various areas where its adjudicated newspapers are published. CNSB, a commission-earning selling agent and a division of the Company, faces competition from a number of companies based in California, some of which specialize in placing certain types of notices.

There is significant competition among a limited number of companies to provide services and software to the courts, and some of these companies are much larger and have greater access to capital and other resources than Sustain. Others provide services for a limited number of courts. Normally, the vendor is selected through a bidding process, and often the courts will express a preference for, or even require, larger vendors. Many courts now desire Internet-based solutions to centralize operations, facilitate electronic filing and other interfaces with justice partners and the public, and publish certain information from case management systems. The Sustain product line provides a version of these services, but there are many uncertainties in the process of courts migrating to newer electronic based systems, including whether Sustain’s version of case management systems will find general acceptance and whether the development and modification of such systems can be done in a cost effective manner.

Employees

The Company employs approximately 215 full-time employees and about 10 part-time employees, including about 15 employees at Sustain. Sustain also engages independent contractors for development and consulting projects. The Company is not a party to any collective bargaining agreements. Certain benefits, including medical insurance, are provided to all full-time employees. Management considers its employee relations to be good.

The Company relies heavily on Gerald Salzman, who serves as president, chief executive officer, chief financial officer, treasurer and assistant secretary. If Mr. Salzman’s services were no longer available to the Company, it is unlikely that the Company could find a single replacement to perform all of the duties now handled by him, and it could have a significant adverse affect on the Company’s business. The Company does not carry key man life insurance, nor has it entered into an employment agreement with Mr. Salzman.

11

Working Capital

Traditionally, the Company has generated sufficient cash flow from operations to cover all its needs without significant borrowing except for two real estate loans which were paid off in 2008. To a very considerable extent, the Company benefits in this regard from the fact that both subscriptions and Sustain software maintenance and license fees are generally paid a year in advance. In 2009, the Company used approximately $20 million of its cash to purchase marketable securities, consisting of common stocks and bonds of other companies, in hopes of generating a better return than that offered by U.S. Treasury Notes and Bills. The market value of the securities purchased by the Company has increased significantly since they were purchased, providing the Company with even more working capital (although subject to the normal risks associated with owning stocks and bonds). Although the Company believes it has all of the cash that it needs for the foreseeable future, if the Company’s overall cash needs exceed cash flow from operations and its current working capital, the Company may attempt to secure additional financing which may or may not be available on acceptable terms.

The Company extends unsecured credit to most of its advertising customers. The Company maintains a reserve account for estimated losses resulting from the inability of these customers to make required payments, but if the financial conditions of these customers were to deteriorate or the Company’s judgments about their abilities to pay are incorrect, additional allowances might be required, and the Company’s cash flows and results of operations could be materially affected.

Inflation

The effects of inflation are not significantly any more or less adverse on the Company’s businesses than they are on other publishing companies. The Company has experienced the effects of inflation primarily through increases in costs of personnel, newsprint, postage and services. These costs have generally been offset by periodic price increases for advertising and subscription rates, but with frequent exceptions during several years when the Company has experienced substantial increases in postage and newsprint expenses and additional costs related to acquisitions.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company owns office and printing facilities in Los Angeles and leases space for its other offices under operating leases which expire at various dates through 2012.

The main Los Angeles property is comprised of a two-story, 34,000 square foot building constructed in 1990, which is fully occupied by the Company. Approximately 75% of the building is devoted to office space and the remainder to printing and production equipment and facilities. In 2003, the Company finished building an adjacent 37,000 square foot building and parking facilities on properties it acquired in 1996 and 1998. This building provides additional office, production and storage space, and thus the Company no longer leases certain adjacent

12

space from a third party. The Company occupies a portion of the new building’s first floor and will complete the build-out of the second floor as needed.

The Company leases in San Francisco approximately 10,500 square feet of office space (expiring in March 2012). In addition, the Company rents facilities in each of the remaining cities where its staff is located on a month-to-month basis or pursuant to leases generally of no longer than three years’ duration.

See Note 4 of Notes to Consolidated Financial Statements for information concerning rents payable under leases.

Item 3. Legal Proceedings

The Company is not a party to any material legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

None.

13

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The following table sets forth the sales prices of the Company’s common stock for the periods indicated. Quotations are as reported by the NASDAQ Capital Market.

	High		Low
Fiscal 2009
Quarter ended December 31, 2008	$	42.70	$	31.01
Quarter ended March 31, 2009		40.97		34.23
Quarter ended June 30, 2009		53.95		34.88
Quarter ended September 30, 2009		57.98		45.81
Fiscal 2008
Quarter ended December 31, 2007	$	47.99	$	40.14
Quarter ended March 31, 2008		48.90		39.00
Quarter ended June 30, 2008		50.00		33.04
Quarter ended September 30, 2008		46.00		36.00

As of December 11, 2009, there were approximately 870 holders of record of the Company’s common stock, and the last trade was at $56 per share.

The Company did not declare or pay any dividends during fiscal 2009 or 2008. A determination by the Company whether or not to pay dividends in the future will depend on numerous factors, including the Company’s earnings, cash flow, financial condition, capital requirements, future prospects, acquisition opportunities, and other relevant factors. The Board of Directors does not expect that the Company will pay any dividends or other distributions to shareholders in the foreseeable future.

The Company does not have any equity compensation plans, and it did not sell any securities during fiscal 2009 that were not registered under the Securities Act of 1933.

From time to time, the Company has purchased shares, including treasury shares of its common stock and may continue to do so. See Note 2 to consolidated financial statements. The Company’s common stock repurchase program was implemented in 1987 in combination with the Company’s Deferred Management Incentive Plan. The Company’s stock repurchase program remains in effect. During fiscal 2009, the Company purchased 72,108 shares of common and treasury stock at an average price per share of $39.07. The Company purchased 18,837 shares of treasury stock in the fourth quarter of fiscal 2009 at $45 per share.

14

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The Company continues to operate as two different businesses: (1) The “traditional business”, being the business of newspaper and magazine publishing and related services that the Company had before 1999 when it purchased Sustain, and (2) the Sustain software business, which supplies case management software systems and related products to courts and other justice agencies, including district administrative law organizations.

During fiscal 2009, consolidated pretax income increased by $1,360,000 (12%) to $12,948,000 from $11,588,000 in the prior year. The Company’s traditional business segment pretax profit increased by $1,399,000 (12%) to $12,931,000 from $11,532,000 primarily because of an increase in trustee foreclosure notices and a decrease in personnel costs. Sustain’s business segment pretax income decreased to $17,000 from $56,000.

	Reportable Segments						Total Results for both Segments
	Traditional Business			Sustain
Fiscal 2009
Revenues	$	35,481,000		$	4,943,000		$	40,424,000
Pretax income		12,931,000			17,000			12,948,000
Income tax expense		(4,917,000	)		(5,000	)		(4,922,000	)
Net income		8,014,000			12,000			8,026,000
Fiscal 2008
Revenues	$	35,828,000		$	4,777,000		$	40,605,000
Pretax income		11,532,000			56,000			11,588,000
Income tax expense		(4,455,000	)		(20,000	)		(4,475,000	)
Net income		7,077,000			36,000			7,113,000

Consolidated revenues were $40,424,000 and $40,605,000 for fiscal years 2009 and 2008, respectively. This decrease of $181,000 was primarily from decreases of $1,056,000 (23%) in display advertising revenues and $1,571,000 (42%) in classified advertising revenues, partially offset by the increase in public notice advertising revenues of $2,446,000. The Company continued to benefit from the large number of foreclosure notices in California and Arizona, for which public notice advertising is required by law. The Company’s smaller newspapers, those other than the Los Angeles and San Francisco Daily Journals (“The Daily Journals”), accounted for about 96% of the total public notice advertising revenues. Public notice advertising revenues and related advertising and other service fees constituted about 54% of the Company’s total revenues.

Total circulation revenues decreased by $707,000 (8%). The Daily Journals accounted for about 80% of the Company’s total circulation revenues. The court rule and judicial profile services generated about 14% of the total circulation revenues, with the other newspapers and services accounting for the balance. Advertising service fees and other increased by $545,000 (15%) due primarily to increased fees generated by the placement of more trustee foreclosure notices in publications not owned by the Company. Advertising service fees and other are traditional business segment revenues, which include primarily (i) agency commissions received

15

from outside newspapers in which the advertising is placed and (ii) fees generated when filing notices with government agencies. Sustain’s information systems and services revenues increased by $166,000 (3%) primarily because of increases in consulting revenues. The Company’s revenues derived from Sustain’s operations constituted about 12% of the Company’s total revenues for both fiscal 2009 and 2008.

Costs and expenses decreased by $1,509,000 (5%) to $28,231,000 from $29,740,000. Total personnel costs decreased by $923,000 (5%) to $16,897,000 primarily due to savings from departmental reorganizations, partially offset by an annual salary adjustment. Newsprint and printing expenses decreased by $252,000 (12%) primarily resulting from fewer subscribers and paper price decreases. Postage and delivery expenses decreased by $178,000 (10%) mainly because there were fewer subscribers.

The Company’s expenditures for the development of new Sustain software products are significant and will materially impact overall results at least through fiscal 2010. These costs are expensed as incurred until technological feasibility of the product has been established, at which time such costs are capitalized, subject to expected recovery. Sustain’s internal development costs, which are primarily incremental labor costs for both employees and outside contractors, aggregated $2,341,000 and $1,827,000 for fiscal 2009 and 2008, respectively. If Sustain’s internal development programs are not successful, they will significantly and adversely impact the Company’s ability to maximize its existing investment in the Sustain software, to service its existing customers and to compete for new opportunities in the case management software business.

Whether the increase in traditional business segment pretax profit will be sustained throughout fiscal 2010 is very much dependant on the number of California and Arizona foreclosure notices and the offsetting effect of a continuing decline in display and classified advertising. At some point, the number of foreclosures undoubtedly will slow, and because fewer advertisements will then be required, so will the Company’s traditional business segment earnings. Whether Sustain generates a profit or loss in fiscal 2010 likely will be determined based on its consulting revenues, which are subject to uncertainty because they depend on (i) the timing of the acceptance of the completed consulting tasks, (ii) the unpredictable needs of Sustain’s existing customers, and (iii) Sustain’s ability to secure new customers. Sustain’s consulting revenues are expected to decline substantially in fiscal 2010 because governments have reduced budgets.

Consolidated net income was $8,026,000 and $7,113,000 for fiscal 2009 and 2008, respectively. On a pretax profit of $12,948,000 and $11,588,000 for fiscal 2009 and 2008, the Company recorded a tax provision of $4,922,000 and $4,475,000, respectively. The Internal Revenue Service has been examining the tax returns for years 2002 to 2007 and has proposed an assessment that, if upheld, would result in disallowance of about $700,000 of previously claimed research and development credits. As of September 30, 2009, the Company had approximately $700,000 of unrecognized tax benefits, all of which would have an effective rate impact if recognized. The Company is continuing to contest the issue in the United States Tax Court, and the ultimate resolution of this dispute cannot be ascertained at this time. Net income per share increased to $5.70 from $4.90.

16

Liquidity and Capital Resources

During fiscal 2009, the Company’s cash and cash equivalents, U.S. Treasury Notes and Bills and marketable security positions increased by $38,744,000, including an unrealized gain of $33,677,000. Cash and cash equivalents and U.S. Treasury Notes and Bills were used primarily for the purchase of marketable securities of $20,424,000, capital assets of $238,000 (mostly computer software and office equipment) and the Company’s common and treasury shares for an aggregate amount of $2,817,000. All the marketable securities are common stocks and bonds of other companies, and almost all of the unrealized appreciation was in the common stocks. The cash provided by operating activities of $8,359,000 included a net decrease in deferred subscription and other revenues of $507,000. Proceeds from the sale of subscriptions from newspapers, court rule books and other publications and for software licenses and maintenance and other services are recorded as deferred revenue and are included in earned revenue only when the services are rendered. Cash flows from operating activities increased by $1,797,000 during fiscal 2009 as compared to the prior year primarily due to the decreases in accounts receivable of $3,110,000, partially offset by the decreases in accounts payable and accrued liabilities of $1,526,000.

As of September 30, 2009, the Company had working capital of $47,535,000, including the liability for deferred subscription and other revenues of $5,340,000 which are scheduled to be earned within one year and the deferred tax liability of $12,965,000 for the unrealized gain described above. The Company believes that it will be able to fund its operations for the foreseeable future through its cash flows from operating activities and its current working capital.

Critical Accounting Policies

The Company’s financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Management believes that revenue recognition, accounting for capitalized software costs and income taxes are critical accounting policies.

The Company recognizes revenues from both the lease and sale of software products. Revenues from leases of software products are recognized over the life of the lease while revenues from software product sales are recognized normally upon delivery, installation or acceptance pursuant to a signed agreement. Revenues from annual maintenance contracts generally call for the Company to provide software updates and upgrades to customers and are recognized ratably over the maintenance period. Consulting and other services are recognized as performed or upon acceptance by the customers. Proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription or lease term. Advertising revenues are recognized when advertisements are published and are net of commissions.

17

Accounting Standards Codification (“ASC”) 985-20, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed, provides that costs related to the research and development of a new software product are to be expensed as incurred until the technological feasibility of the product is established. Accordingly, costs related to the development of new Sustain software products are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized, subject to expected recoverability. In general, “technological feasibility” is achieved when the developer has established the necessary skills, hardware and technology to produce a product and a detailed program design has been (a) completed, (b) traced to the product specifications and (c) reviewed for high-risk development issues.

ASC 740, Income Taxes, establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and the deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Fluctuations in the actual outcome of these future tax consequences could materially impact the Company’s financial position or its results of operations.

On October 1, 2007 the Company adopted FASB’s additional guidance related to ASC 740, Income Taxes, which was issued to clarify the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a recognition threshold and measurement attribute for the financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return. As a result, the Company recognized no material adjustment to the liability for unrecognized tax benefits. See Note 3 Income Taxes for further discussion.

The above discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included in this report.

18

Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Daily Journal Corporation

We have audited the accompanying consolidated balance sheets of Daily Journal Corporation as of September 30, 2009 and 2008, and the related consolidated statements of income, shareholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Daily Journal Corporation at September 30, 2009 and 2008, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Los Angeles, California

December 15, 2009

19

DAILY JOURNAL CORPORATION

CONSOLIDATED BALANCE SHEETS

	September 30
	2009			2008
ASSETS
Current assets
Cash and cash equivalents	$	1,425,000		$	994,000
U.S. Treasury Notes and Bills		6,627,000			20,726,000
Marketable securities, $47,917,000 in common stocks and $6,158,000 in bonds		54,075,000			—
Accounts receivable, less allowance for doubtful accounts of $300,000 at September 30, 2009 and 2008		10,221,000			9,434,000
Inventories		19,000			26,000
Prepaid expenses and other assets		238,000			194,000
Deferred income taxes		—			779,000
Total current assets		72,605,000			32,153,000
Property, plant and equipment, at cost
Land, buildings and improvements		12,858,000			12,938,000
Furniture, office equipment and computer software		3,238,000			3,718,000
Machinery and equipment		2,139,000			2,041,000
		18,235,000			18,697,000
Less accumulated depreciation		(8,086,000	)		(7,989,000	)
		10,149,000			10,708,000
U.S. Treasury Notes		—			1,663,000
Deferred income taxes		1,995,000			1,573,000
	$	84,749,000		$	46,097,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	3,213,000		$	2,828,000
Accrued liabilities		3,548,000			3,668,000
Income taxes		857,000			1,051,000
Deferred income taxes		12,112,000			—
Deferred subscription and other revenues		5,340,000			5,847,000
Total current liabilities		25,070,000			13,394,000
Long term liabilities
Accrued liabilities		4,360,000			3,200,000
Total long term liabilities		4,360,000			3,200,000
Commitments and contingencies (Notes 4 and 5)		—			—
Shareholders’ equity
Preferred stock, $.01 par value, 5,000,000 shares authorized and no shares issued		—			—
Common stock, $.01 par value, 5,000,000 shares authorized; 1,447,028 and 1,500,299 shares at September 30, 2009 and 2008, respectively, outstanding		14,000			15,000
Additional paid-in capital		1,839,000			1,907,000
Retained earnings		34,507,000			28,382,000
Accumulated other comprehensive income		20,712,000			105,000
Less 66,282 and 47,445 treasury shares, at September 30, 2009 and 2008, respectively, at cost		(1,753,000	)		(906,000	)
Total shareholders’ equity		55,319,000			29,503,000
	$	84,749,000		$	46,097,000

See accompanying Notes to Consolidated Financial Statements

20

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

	2009			2008
Revenues
Advertising	$	23,586,000		$	23,771,000
Circulation		7,831,000			8,538,000
Information systems and services		4,943,000			4,777,000
Advertising service fees and other		4,064,000			3,519,000
		40,424,000			40,605,000
Costs and expenses
Salaries and employee benefits		16,897,000			17,820,000
Newsprint and printing expenses		1,830,000			2,082,000
Outside services		3,775,000			3,511,000
Postage and delivery expenses		1,544,000			1,722,000
Depreciation and amortization		797,000			990,000
Other general and administrative expenses		3,388,000			3,615,000
		28,231,000			29,740,000
Income from operations		12,193,000			10,865,000
Other income and expenses
Dividends and interest income		704,000			852,000
Gains on sales of investments		91,000			—
Interest expense		(40,000	)		(129,000	)
Income before taxes		12,948,000			11,588,000
Provision for income taxes		(4,922,000	)		(4,475,000	)
Net income	$	8,026,000		$	7,113,000
Weighted average number of common shares outstanding – basic and diluted		1,408,699			1,452,854
Basic and diluted net income per share	$	5.70		$	4.90

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

	Common Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Treasury Stock			Total Shareholders’ Equity			Comprehensive Income
	Share		Amount
Balance at September 30, 2007	1,500,299		$	15,000		$	1,907,000		$	21,269,000			—	$	(906,000	)	$	22,285,000
Net income	—			—			—			7,113,000			—		—			7,113,000		$	7,113,000
Unrealized gain on investments	—			—			—			—		$	105,000		—			105,000			105,000
Total comprehensive income	—			—			—			—			—		—			—		$	7,218,000
Balance at September 30, 2008	1,500,299			15,000			1,907,000			28,382,000			105,000		(906,000	)		29,503,000
Purchase of common stock	(53,271	)		(1,000	)		(68,000	)		(1,901,000	)		—		—			(1,970,000	)
Purchase of treasury stock													—		(847,000	)		(847,000	)
Net income	—			—			—			8,026,000			—		—			8,026,000		$	8,026,000
Unrealized gain on investments	—			—			—			—			20,607,000		—			20,607,000			20,607,000
Total comprehensive income	—			—			—			—			—		—			—		$	28,633,000
Balance at September 30, 2009	1,447,028		$	14,000		$	1,839,000		$	34,507,000		$	20,712,000	$	(1,753,000	)	$	55,319,000

See accompanying Notes to Consolidated Financial Statements

21

DAILY JOURNAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	2009			2008
Cash flows from operating activities
Net income	$	8,026,000		$	7,113,000
Adjustments to reconcile net income to net cash provided by operations
Depreciation and amortization		797,000			990,000
Deferred income taxes		(433,000	)		(622,000	)
Premium amortized (discount earned) on U.S. Treasury Bills		69,000			19,000
Changes in assets and liabilities
(Increase) decrease in current assets
Accounts receivable, net		(787,000	)		(3,897,000	)
Inventories		7,000			(3,000	)
Prepaid expenses and other assets		(44,000	)		(7,000	)
Increase (decrease) in current liabilities
Accounts payable		385,000			1,203,000
Accrued liabilities		1,040,000			1,748,000
Income tax payable		(194,000	)		389,000
Deferred subscription and other revenues		(507,000	)		(371,000	)
Cash provided by operating activities		8,359,000			6,562,000
Cash flows from investing activities
Maturities and sales of U.S. Treasury Notes and Bills		22,754,000			18,268,000
Purchases of U.S. Treasury Notes and Bills		(7,203,000	)		(20,516,000	)
Purchases of marketable securities		(20,424,000	)		—
Purchases of property, plant and equipment, net		(238,000	)		(377,000	)
Cash used for investing activities		(5,111,000	)		(2,625,000	)
Cash flows from financing activities
Payment of loan principal		—			(4,012,000	)
Purchase of common and treasury stock		(2,817,000	)		—
Cash used for financing activities		(2,817,000	)		(4,012,000	)
Increase (decrease) in cash and cash equivalents		431,000			(75,000	)
Cash and cash equivalents
Beginning of year		994,000			1,069,000
End of year	$	1,425,000		$	994,000
Interest paid during year	$	6,000		$	96,000
Income taxes paid during year	$	5,593,000		$	3,409,000

See accompanying Notes to Consolidated Financial Statements

22

DAILY JOURNAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY AND OPERATIONS

Daily Journal Corporation (the “Company”) publishes newspapers and web sites covering California and Arizona, as well as the California Lawyer and NextGen magazines, and produces several specialized information services. Sustain Technologies, Inc. (“Sustain”) is a wholly-owned subsidiary. Sustain supplies case management software systems and related products to courts and other justice agencies, including administrative law organizations. These courts and agencies use the Sustain family of products to help manage cases and information electronically and to interface with other critical justice partners. Sustain’s products are designed to help users manage electronic case files from inception to disposition, including all aspects of calendaring and accounting, report and notice generation, the implementation of standards and business rules and other corollary functions. Essentially all of the Company’s operations are based in California, Arizona and Colorado.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The consolidated financial statements include the accounts of the Daily Journal Corporation and its wholly-owned subsidiary, Sustain. All intercompany accounts and transactions have been eliminated in consolidation.

Concentrations of Credit Risk: We extend unsecured credit to most of our advertising customers. We recognize that extending credit and setting appropriate reserves for receivables is largely a subjective decision based on knowledge of the customer and the industry. Credit exposure also includes the amount of estimated unbilled sales. Credit limits, setting and maintaining credit standards, and managing the overall quality of the credit portfolio is largely centralized. The level of credit is influenced by the customer’s credit and payment history which we monitor when establishing a reserve.

We maintain the reserve account for estimated losses resulting from the inability of our customers to make required payments. If the financial conditions of our customers were to deteriorate or our judgments about their abilities to pay are incorrect, additional allowances might be required and our results of operations could be materially affected.

Cash equivalents: The Company considers all highly liquid investments, including U.S. Treasury Bills with a maturity of three months or less when purchased, to be cash equivalents.

Fair Value of Financial Instruments: The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of their short maturities. In addition, the Company has investments in U.S. Treasury Notes and Bills and marketable securities, all categorized as “available-for-sale” and stated at fair market value, with the unrealized gains and losses, net of taxes, reported in “Accumulated other comprehensive income” in the accompanying consolidated balance sheets. The Company determines fair market value using quoted prices in active markets for identical assets (consistent with the Level 1 definition in the fair value hierarchy). At September 30, 2009, the aggregate fair market value of the Company’s

23

U.S. Treasury Notes and Bills and marketable securities was $60,702,000. These investments had about $33,677,000 of unrealized gains. The U.S. Treasury Notes have maturity dates of less than one year, and the bonds have a maturity date in 2039. The bonds are classified as “Current assets” because they are available for sale. At September 30, 2008, the Company had U.S. Treasury Notes and Bills at fair market value of about $20,726,000 maturing within one year and U.S. Treasury Notes at fair market value of $1,663,000 maturing after one year but less than five years, including about $168,000 of unrealized gains. The aggregate fair market value of these U.S. Treasury Notes and Bills was $22,389,000.

Investment of Financial Instruments

	September 30, 2009						September 30, 2008
	Amortized cost basis		Aggregate fair value		Pretax unrealized gains		Amortized cost basis		Aggregate fair value		Pretax unrealized gains
U.S. Treasury Notes and Bills	$	6,601,000	$	6,627,000	$	26,000	$	22,221,000	$	22,389,000	$	168,000
Marketable securities
Common stocks		15,501,000		47,917,000		32,416,000		—		—		—
Bonds		4,923,000		6,158,000		1,235,000		—		—		—
Total	$	27,025,000	$	60,702,000	$	33,677,000	$	22,221,000	$	22,389,000	$	168,000

Comprehensive Income: Comprehensive income, which includes net income plus net unrealized gains on U.S. Treasury Notes and Bills and marketable securities of $20,607,000 and $105,000, net of related taxes, was $28,633,000 and $7,218,000 for fiscal 2009 and 2008, respectively.

Inventories: Inventories, comprised of newsprint and paper, are stated at cost, on a first-in, first-out basis, which does not exceed current market value.

Income taxes: The Company accounts for income taxes using an asset and liability approach which requires the recognition of deferred tax liabilities and assets for the expected future consequences of temporary differences between the carrying amounts for financial reporting purposes and the tax basis of the assets and liabilities.

Property, plant and equipment: Property, plant and equipment are carried on the basis of cost. Depreciation of assets is provided in amounts sufficient to depreciate the cost of related assets over their estimated useful lives ranging from 3 – 39 years. At September 30, 2009, the estimated useful lives were (i) 5 – 39 years for building and improvements, (ii) 3 – 5 years for furniture, office equipment and software, and (iii) 3 – 10 years for machinery and equipment. Leasehold improvements are amortized over the term of the related leases or the useful life of the assets, whichever is shorter. Assets are depreciated using the straight-line method for financial statements and accelerated method for tax purposes.

Significant expenditures which extend the useful lives of existing assets are capitalized. Maintenance and repair costs are expensed as incurred. Gains or losses on dispositions of assets are reflected in current earnings.

24

Sustain Software: The Company is continuing its internal Sustain software development efforts. Costs related to the research and development of new Sustain software products are expensed as incurred until technological feasibility of the product has been established, at which time such costs are capitalized, subject to expected recoverability. In general, “technological feasibility” is achieved when the developer has established the necessary skills, hardware and technology to produce a product and a detailed program design has been (a) completed, (b) traced to the product specifications and (c) reviewed for high-risk development issues. If these developments are not successful, there will be a significant and adverse impact on the Company’s ability to maximize its existing investment in the Sustain software, to service its existing customers, and to compete for new opportunities in the case management software business. These Sustain software development costs ($2,341,000 and $1,827,000 during fiscal 2009 and 2008, respectively), which are primarily incremental costs, are being expensed as incurred and accordingly will materially impact earnings at least through fiscal 2010.

Revenue Recognition: Proceeds from the sale of subscriptions for newspapers, court rule books and other publications and other services are recorded as deferred revenue and are included in earned revenue only when the services are provided, generally over the subscription or lease term. Advertising revenues are recognized when advertisements are published and are net of commissions.

The Company recognizes revenues from both the lease and sale of software products. Revenues from leases of software products are recognized over the life of the lease while revenues from software product sales are recognized normally upon delivery, installation or acceptance pursuant to a signed agreement. Revenues from annual maintenance contracts generally call for the Company to provide software updates and upgrades to customers and are recognized ratably over the maintenance period. Consulting and other services are recognized upon acceptance by the customers or as performed (using a percentage-of-completion method).

Management Incentive Plan: In fiscal 1987 the Company implemented a Management Incentive Plan that entitles an employee to participate in pre-tax earnings of the Company. In 2003 the Company modified the Plan to provide employees with three different types of non-negotiable incentive certificates based on the nature of the particular participants’ responsibilities. Each certificate entitles the participant to a specified share of the applicable pre-tax earnings in the year of grant and to receive the same percentage of pre-tax earnings in each of the next nine years provided they remain employed or are in retirement following employment to age 65. If a participant dies while any of his or her certificates remain outstanding, future payments under those certificates will be made to the deceased participant’s beneficiaries. Participant interests entitled employees to receive 3.74% and 3.88% (amounting to $617,625 and $587,300, respectively) of Daily Journal non-consolidated income before taxes, workers’ compensation and supplemental compensation expenses, 2.96% and 3.13% (amounting to $0 for both years) for Sustain and 8.2% and 8.2% (amounting to $1,324,600 and $1,213,600, respectively) for Daily Journal consolidated in fiscal 2009 and 2008. One major participant in the Plan is over 65, but not retired, and the Company has accrued $4,360,000 for the Plan’s future commitment, which includes an increase in fiscal 2009 of $1,160,000.

Treasury stock and net income per common share: As of September 30, 2009 and 2008, the Company owned 66,282 and 47,445, respectively, of the 599,409 units of a limited partnership that has no known liabilities and owns as its sole asset 599,409 shares of common stock of Daily Journal Corporation. This investment, at a total cost of $1,753,000 and $906,000 at September 30,

25

2009 and 2008, respectively, was considered treasury stock and was excluded from the calculation of weighted average shares. The net income per common share is based on the weighted average number of shares outstanding during each year. The shares used in the calculation were 1,408,699 for 2009 and 1,452,854 for 2008. The Company does not have any common stock equivalents, and therefore basic and diluted net income per share is the same.

Use of Estimates: The presentation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassifications: Certain reclassifications of previously reported amounts have been made to conform to the current year’s presentation.

Impairment of Long-Lived Assets: The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future cash flows is less than the carrying amount of the asset, in which case a write-down is recorded to reduce the related asset to its estimated fair value.

Accounting Standards Adopted in 2009: In October 2008 the Company adopted all provisions of ASC 820, Fair Value Measurement and Disclosures, (“ASC 820”), which provides guidance for using fair value to measure assets and liabilities, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. As a result the Company recognized no material adjustments to its assets and liabilities.

In October 2008 the Company adopted ASC 825, Financial Instruments, but elected not to use the fair value option which allows reporting entities to recognize changes in fair value of financial instruments in earnings. It continues to record the unrealized market gain (loss) as “Other comprehensive income” on its Consolidated Balance Sheets.

On June 30, 2009, the Company adopted ASC 855, Subsequent Events, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This pronouncement does not have a material impact on the consolidated financial statements.

In June 2009, the FASB issued new standards which establish the FASB Accounting Standards Codification^TM as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. The Codification does not change GAAP and only affects how specific references to GAAP literature are disclosed in the notes to the Company’s consolidated financial statements beginning September 30, 2009.

26

3. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

	2009			2008
Current:
Federal	$	4,209,000		$	4,055,000
State		1,146,000			979,000
		5,355,000			5,034,000
Deferred:
Federal		(365,000	)		(493,000	)
State		(68,000	)		(66,000	)
		(433,000	)		(559,000	)
	$	4,922,000		$	4,475,000

The difference between the statutory federal income tax rate and the Company’s effective rate is summarized below:

	2009		2008
Statutory federal income tax rate	34.2	%	34.2	%
State franchise taxes (net of federal tax benefit)	5.8		5.8
Other, primarily tax credits and manufacturer’s deduction	(2.0	)	(1.4	)
Effective tax rate	38.0	%	38.6	%

The Company’s deferred income tax assets (liabilities) were comprised of the following at September 30:

	2009			2008
Deferred tax assets attributable to:
Accrued liabilities, including supplemental compensation and vacation pay accrual	$	1,974,000		$	1,512,000
Bad debt reserves not yet deductible		120,000			120,000
Depreciation and amortization		389,000			452,000
Other		365,000			331,000
Total deferred tax assets		2,848,000			2,415,000
Deferred tax liabilities attributable to:
Unrealized gains on investments		(12,965,000	)		(63,000	)
Net deferred income taxes	$	(10,117,000	)	$	2,352,000

The Internal Revenue Service has been examining the Company’s tax returns for years 2002 to 2007 and has proposed an assessment that, if upheld, would result in disallowance of about $700,000 of previously claimed research and development credits. The Company is continuing to contest the issue in the United States Tax Court, and the ultimate resolution of this dispute cannot be ascertained at this time. At September 30, 2009 and 2008, the Company had a reserve of approximately $700,000 primarily pertaining to these claimed research and development tax credits. If these benefits are recognized, there would be an impact on the effective tax rate in the period of recognition. Interest accrued related to unrecognized tax benefits is recorded as interest expense, and as of September 30, 2009, the Company had accrued $214,000, including an additional $34,000 during fiscal 2009. The Company has not accrued the penalties related to

27

any potential assessment. The Company files federal income tax returns in the United States and with various state jurisdictions and is no longer subject to examinations for years before 2002.

4. COMMITMENTS

The Company owns its facilities in Los Angeles and leases space for its other offices under operating leases, which expire at various dates through 2012. The Company is responsible for a portion of maintenance, insurance and property tax expenses relating to certain leased property. Rental expenses for the fiscal years 2009 and 2008 were $617,000 and $594,000, respectively.

Company’s future obligations under its operating leases

	2010		2011		2012		2013 and after		Total
Obligations under operating leases	$	518,000	$	403,000	$	190,000	$	—	$	1,111,000

5. CONTINGENCIES

The Company is subject to other pending litigation arising in the normal course of its business. While it is not possible to predict the results of such litigation, management does not believe the ultimate outcome of these matters will have a materially adverse effect on the Company’s financial position or results of operations.

28

6. OPERATING SEGMENTS

The Company has two segments of business. The Company’s reportable segments are (1) the traditional business and (2) Sustain. The traditional business segment publishes the Company’s newspapers and magazines and produces several specialized information services. The Sustain segment provides the SUSTAIN family of products which consists of technologies and applications to enable justice agencies to automate their operations. The accounting policies of the reportable segments are the same as those described in Note 2 of Notes to Consolidated Financial Statements. Inter-segment transactions were eliminated. Summarized financial information concerning the Company’s reportable segments is shown in the following table:

	Reportable Segments
	Traditional Business			Sustain			Total Results for both Segments
2009
Revenues	$	35,481,000		$	4,943,000		$	40,424,000
Income before taxes		12,931,000			17,000			12,948,000
Total assets		82,981,000			1,768,000			84,749,000
Capital expenditures		218,000			20,000			238,000
Depreciation and amortization		743,000			54,000			797,000
Income tax expense		(4,917,000	)		(5,000	)		(4,922,000	)
Net income		8,014,000			12,000			8,026,000
2008
Revenues	$	35,828,000		$	4,777,000		$	40,605,000
Income before taxes		11,532,000			56,000			11,588,000
Total assets		44,550,000			1,547,000			46,097,000
Capital expenditures		332,000			45,000			377,000
Depreciation and amortization		934,000			56,000			990,000
Income tax expense		(4,455,000	)		(20,000	)		(4,475,000	)
Net income		7,077,000			36,000			7,113,000

7. SUBSEQUENT EVENTS

The Company has completed an evaluation of all subsequent events through December 15, 2009, which is the issuance date of these consolidated financial statements and concluded no subsequent events occurred that required recognition or disclosure.

29

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including Gerald L. Salzman, its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2009. Based on that evaluation, Mr. Salzman concluded that the Company’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in reports it files or submits under the Securities Exchange Act of 1934, is (1) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities Exchange Commission and (2) accumulated and communicated to the Company’s management, including Mr. Salzman, in such a way as to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934. Under the supervision and with the participation Mr. Salzman, we evaluated the effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation under that framework and applicable Securities and Exchange Commission rules, the Company’s management concluded that the Company’s internal control over financial reporting was effective as of September 30, 2009.

This annual report on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

There have been no material changes in the Company’s internal control over financial reporting or in other factors reasonably likely to affect its internal control over financial reporting during the quarter ended September 30, 2009.

Item 9B. Other Information

None.

30

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information set forth in the tables, the notes thereto, and the paragraphs under the captions “Election of Directors”, “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement for Annual Meeting of Shareholders to be held on or about February 3, 2010 (the “Proxy Statement”), is incorporated herein by reference.

The Company has adopted a Code of Ethics that applies to all directors, officers and employees of the Company, including the Chief Executive Officer, Chief Financial Officer and Controller. The Company’s Code of Ethics is attached hereto as Exhibit 14.

Item 11. Executive Compensation

The information set forth under the captions “Executive Compensation” and “Corporate Governance” in the Proxy Statement is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information set forth under the caption “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information set forth under the caption “Corporate Governance” in the Proxy Statement is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information set forth under the caption “Other Matters Regarding Independent Registered Public Accounting Firm” in the Proxy Statement is incorporated herein by reference.

31

PART IV

Item 15. Exhibits and Financial Statement Schedules

The following documents are filed as part of this Report:

(1)	Consolidated Financial Statements:
	Report of Independent Registered Public Accounting Firm
	Consolidated Balance Sheets at September 30, 2009 and 2008
	Consolidated Statements of Income for the years ended September 30, 2009 and 2008
	Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the years ended September 30, 2009 and 2008
	Consolidated Statements of Cash Flows for the years ended September 30, 2009 and 2008
	Notes to Consolidated Financial Statements
(2)	Exhibits
3.1	Articles of Incorporation of Daily Journal Corporation, as amended.
3.2	Amended and Restated Bylaws of Daily Journal Corporation.
10.1	Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (“DJC”) Plan for Supplemental Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of DJC and its Subsidiaries on a Consolidated Basis. (a) (‡)
10.2	Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (“DJC”) Plan for Supplement Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of DJC’s Non-Sustain Operations. (a) (‡)
10.3	Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (“DJC”) Plan for Supplement Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of Sustain Technologies, Inc. (a) (‡)
14	Daily Journal Corporation Code of Ethics.
21	Daily Journal Corporation’s List of Subsidiaries.
31	Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(‡) Management Compensatory Plan.

(a) Filed as an Appendix to the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on December 30, 2008 (File No. 14665).

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DAILY JOURNAL CORPORATION
By	/s/ Gerald L. Salzman
	Gerald L. Salzman
	President

Date: December 15, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Charles T. Munger	Chairman of the Board	December 15, 2009
Charles T. Munger
/s/ Gerald L. Salzman	President, Chief Executive Officer,	December 15, 2009
Gerald L. Salzman	Chief Financial Officer, Treasurer and Director
/s/ J. P. Guerin	Director	December 15, 2009
J. P. Guerin
	Director
George C. Good
	Director
Peter Kaufman

33

EXHIBIT INDEX

3.1	Articles of Incorporation of Daily Journal Corporation, as amended.
3.2	Amended and Restated Bylaws of Daily Journal Corporation.
10.1	Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (“DJC”) Plan for Supplemental Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of DJC and its Subsidiaries on a Consolidated Basis. (a) (‡)
10.2	Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (“DJC”) Plan for Supplement Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of DJC’s Non-Sustain Operations. (a) (‡)
10.3	Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (“DJC”) Plan for Supplement Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of Sustain Technologies, Inc. (a) (‡)
14	Daily Journal Corporation Code of Ethics.
21	Daily Journal Corporation’s List of Subsidiaries.
31	Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(‡) Management Compensatory Plan.

(a) Filed as an Appendix to the Company’s Proxy Statement for the 2009 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on December 30, 2008 (File No. 14665).

34

EX-3.1

Exhibit 3.1

STATE OF SOUTH CAROLINA

SECRETARY OF STATE

ARTICLES OF INCORPORATION

OF

DJC CORPORATION

For Use By	(File This Form in	This Space For Use By
The Secretary of State	Duplicate Originals)	The Secretary of State
File No.
Fee Paid $	(Sect. 33-7-30 of 1976 Code)
R.N.
Date	(INSTRUCTIONS ON PAGE 4)

1. The name of the proposed corporation is DJC Corporation.                                                         

2. The initial registered office of the corporation is 2019 Park Street                      located in the city of Columbia county of Richland and the State of South Carolina and the name of its initial registered agent at such address is The Prentice-Hall Corporation System.

3. The period of duration of the corporation shall be perpetual.

4. The corporation is authorized to issue shares of stock as follows:

Class of Shares	Authorized No. of each class	Par Value
Preferred	5,000,000	$	.01
Common	5,000,000	$	.01

If shares are divided into two or more classes or if any class of shares is divided into series within a class, the relative rights, preferences, and limitations of the shares of each class, and of each series within a class, are as follows:

See Attachment A incorporated herein by reference.

5. Total authorized capital stock $100,000. Please see instructions on Page 4.

6. The existence of the corporation shall begin as of the filing date with the Secretary of State.

7. The number of directors constituting the initial board of Directors of the corporation is three and the names and addresses of the persons who are to serve as directors until the first annual meeting of shareholders or until their successors be elected and qualify are:

Charles T. Munger	355 South Grand Avenue, 34th Floor
Name	Los Angeles, CA 90071-1560
	Address
J.P. Guerin	355 South Grand Avenue, 34th Floor
Name	Los Angeles, CA 90071-1560
	Address
Gerald S. Salzman	355 South Grand Avenue, 34th Floor
Name	Los Angeles, CA 90071-1560
	Address
Name	Address
Name	Address

8. The general nature of the business for which the corporation is organized is (it is not necessary to set forth in the purposes powers enumerated Section 33-3-10 of 1976 Code).

To engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Act of South Carolina.

9. Provisions which the incorporators elect to include in the articles of incorporation are as follows:

See Attachment B incorporated herein by reference

10. The name and address of each incorporator is

Name	Street & Box No.	City	County	State
Ruth E. Fisher,	355 S. Grand Avenue, 36th Fl.,	Los Angeles,	Los Angeles,	California

	/s/ Ruth E. Fisher
	(Signature of Incorporator)
Date January 16, 1987	Ruth E. Fisher
	(Type or Print Name)
	(Signature of Incorporator)
	(Type or Print Name)
	(Signature of Incorporator)
	(Type or Print Name)

ATTACHMENT A

The Preferred Stock may be divided into such number of series as the Board of Directors may determine. With respect to any wholly unissued series of Preferred Stock, the Board of Directors is authorized in its unrestricted discretion to determine and alter:

(i) Rights, if any, of conversion into common stock or other securities;

(ii) Voting rights, absolute and/or contingent;

(iii) Dividend and liquidation preferences;

(iv) Call and redemption provisions; and

(v) Any other rights, preferences, privileges and restrictions, to the extent permitted by law,

In addition, the Board of Directors in its unrestricted discretion may fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The Board of Directors, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series.

ATTACHMENT B

Shareholders of this corporation entitled to vote at an election of directors shall be entitled to cumulative voting rights in such election in accordance with Section 33-11-200 of the South Carolina Business Corporation Act.

No shareholder of this corporation shall have any preemptive rights with respect to any issue of shares of other securities by this corporation.

To the extent permitted by law, amendments to these Articles of Incorporation shall be effective if approved by the holders of a majority of the shares entitled to vote on such an amendment.

To the extent permitted by law, a merger, consolidation, share-for-share exchange or any other transaction involving this corporation which must be approved by the shareholders of this corporation pursuant to the South Carolina Business Corporation Act shall be deemed approved if approved by the holders of a majority of the shares entitled to vote on such a transaction.

To the extent permitted by law, an officer elected or appointed by the Board of Directors of this corporation may be removed in the discretion of the Board of Directors, with or without cause.

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

The undersigned Ruth E. Fisher

does hereby certify that she is the incorporator of DJC Corporation and are authorized to execute this verification; that each of the undersigned for himself does hereby further certify that she has read the foregoing document, understands the meaning and purport of the statements therein contained and the same are true to the best of her information and belief.

/s/ Ruth Fisher

(Signature of Incorporator)

(Signature of Incorporator)

(Signature of Incorporator)

(Each Incorporator Must Sign)

11. I, Eric B. Amstutz, an attorney licensed to practice in the State of South Carolina, certify that the corporation, to whose articles of incorporation this certificate is attached, has complied with the requirements of chapter 7 of Title 33 of the South Carolina Code of 1976, relating to the organization of corporations, and that in my opinion, the corporation is organized for a lawful purpose.

Date January 16, 1987	/s/ Eric B. Amstutz
	(Signature)
	Eric B. Amstutz
	(Type or Print Name) Address P.O. Box 10207
	Greenville, SC 29603

SCHEDULE OF FEES

Payable at time of filing Articles with Secretary of State

Fee for filing Articles	$	5.00
In addition to the above $ 10 for each $1,000.00 of the aggregate value of shares which the Corporation is authorized to issue, but in no case less than		40.00
nor more than		1,000.00

NOTE illegible

STATE OF SOUTH CAROLINA

SECRETARY OF STATE

ARTICLES OF AMENDMENT

To The Articles of Incorporation of                     

For Use By The

Secretary of State

File No. 871789 DJC Corporation               This Space For Use By Secretary of State

Fee Paid (File This Form in Duplicate)  

C.B.

Date

Pursuant to Authority of Section 33-15-10 the South Carolina Code of 1976 as amended, the undersigned Corporation adopts the following Articles of Amendment to its Articles of Incorporation:

1. The name of the Corporation is DJC Corporation

2. The Registered Office of the Corporation is	2019 Park Street
	(Street and no.)

in the City of Columbia, County of Richland and

the State of South Carolina and the name of the Registered Agent at such address is The Prentice-Hall Corporation System

(Complete item 3 or 4 whichever is relevant)

3. a. The following amendment of the Articles of Incorporation was adopted by the shareholders of the Corporation on March 13, 1987.

(Text of Amendment)

Article 1 is amended to read as follows: “The name of this corporation is Daily Journal Corporation.”

Article 8 is amended to read as follows: “The general nature of the business for which the corporation is organized is to engage in any lawful act or activity for which a corporation may be organized under the Business Corporation Act of South Carolina, including but not limited to owning or publishing newspapers and other publications.”

b. At the date of adoption of the Amendment, the total number of all outstanding shares of the Corporation was 10. shares The total of such shares entitled to vote, and the vote of such shares was:

Total Number of Shares Entitled	Number of Shares Voted
to vote	For	Against
10	10	0

ARTICLES OF AMENDMENT (Continued)

c. At the date of adoption of the Amendment, the number of outstanding shares of each class entitled to vote as a class on the Amendment, and the vote of such shares, was: (if inapplicable, insert “none”)

Class	Number of Shares Entitled to Vote	Number of Shares Voted
		For	Against

4. a. Prior to the organizational meeting the Corporation and with the consent of the subscribers, the following Amendment was adopted by the Incorporator(s) on                     

(Text of Amendment)

b. The number of withdrawals of subscribers, if such be the case is                     

c. The number of Incorporators are              and the number voting for the Amendment was                      and the number voting against the Amendment was                     

5. The manner, if not set forth in the Amendment, in which any exchange, reclassification, or cancellation of issued shares provided for in the Amendment shall be effected, is as follows: (if not applicable, insert “no change”)

No change.

6. The manner in which the Amendment effects a change in the amount of stated capital, and amount of stated capital, expressed in dollars, as changed by the Amendment, is a follows: (if not applicable, insert “no change”)

No change.

Date March 13, 1987	DJC Corporation
	(Name of Corporation)
	/s/ Gerald L. Salzman
	(Name and Title)
Note:    Any person signing this form shall either opposite or beneath his signature clearly and legibly state his name and the capacity in whether he signs. Must be signed in accordance with Section 33-1-40 of the 1976 code as amended.	Gerald L. Salzman, President
	(Name and Title)
	/s/ Ira A. Marshal, Jr., Secretary
	(Name and Title)
	(Name and Title)

STATE OF California

                ss:

COUNTY OF Los Angeles

The undersigned Gerald L. Salzman and Ira A. Marshall, Jr. do hereby certify that they are the duly elected and acting President and Secretary respectively, of DJC Corporation and are authorized to execute the documents, that

each of the undersigned for himself does hereby further certify that he signed and was so authorized, has read the foregoing document, understands the meaning and purport of the statements therein contained and the same are true to the best of his information and belief.

Date at Los Angeles, CA this 13th day of March, 1987

/s/ Gerald L. Salzman

/s/ Ira A. Marshall, Jr.

SCHEDULE OF FEES

(Payable at time of filing application

with Secretary of State)

Filing Fee	$	5.00
Taxes		40.00
Total Fee	$	45.00

Note: If the Amendment effects an increase in capital stock, in lieu of the

above, the filing fees will be as follows:

Fee for filing application	$	5.00
In addition to the above, $.40 for each $1,000,00 of the total increase in the aggregate value of authorized shares, but in no case less than		40.00
nor more than		1,000.00

CERTIFICATE

OF

DAILY JOURNAL CORPORATION

Under Section 33-17-70(g) of the

South Carolina Business Corporation Act

To the Secretary of State

State of South Carolina

It is hereby certified that:

1. Daily Journal Corporation, a business corporation organized under the laws of the State of South Carolina, is the surviving corporation in a merger in which the name of the terminated corporation, a business corporation organized under the laws of the State of California, is Daily Journal Company.

2. The aforesaid merger has become effective under the laws of the jurisdiction of Daily Journal Company.

Dated: April 13, 1997

DAILY JOURNAL CORPORATION
By:	/s/ Gerald L. Salzman
	Gerald L. Salzman,
	President
	/s/ Ira A. Marshall, Jr.
	Ira A. Marshall, Jr.,
	Secretary
DAILY JOURNAL COMPANY
By:	/s/ Gerald L. Salzman
	Gerald L. Salzman,
	President
	/s/ Ira A. Marshall, Jr.
	Ira A. Marshall, Jr.,
	Secretary

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

DAILY JOURNAL CORPORATION

ARTICLE I

OFFICES

Section 1. Principal Offices. The board of directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of South Carolina.

Section 2. Other Offices. The board of directors may at any time establish branch or subordinate offices at any place or places where the corporation is qualified to do business.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Place Of Meetings. Meetings of shareholders shall be held at any place within or outside the State of South Carolina designated by the board of directors. In the absence of any such designation, shareholders’ meetings shall be held at the registered office of the corporation.

Section 2. Annual Meeting. The annual meeting of shareholders shall be held each year on a date and at a time designated by the board of directors. At each annual meeting directors shall be elected, and any other proper business may be transacted.

Section 3. Special Meeting. A special meeting of the shareholders may be called at any time by a majority of the board of directors, or by the chairman or vice chairman of the board, or by the president, or by one or more shareholders holding shares in the aggregate entitled to cast not less than 10% of the votes on any issue proposed to be considered at that meeting.

If a special meeting is called by any person or persons specified in the preceding paragraph, the request shall be in writing, shall be delivered by certified or registered mail to the president or the secretary of the corporation, and shall be in accordance with Section 33-7-102 of the South Carolina Business Corporation Act of 1988 (the “Business Corporation Act”). The officer receiving the request shall cause notice to be promptly given to the shareholders entitled to vote, in accordance with the provisions of Sections 4 and 5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than ten (10) nor more than sixty (60) days after the receipt of the request. If the notice is not given within thirty (30) days after receipt of the request, the person or persons requesting the meeting may petition the circuit court of the county where the corporation’s principal office (or, if none in the State of South Carolina, its registered office) is located, and the circuit court may order a meeting to be held on application of a person or persons who signed the request. Nothing contained in this paragraph of this Section 3 shall be construed as limiting, fixing or affecting the time when a meeting of shareholders called by action of the board of directors may be held.

Section 4. Notice Of Shareholders’ Meetings. All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 5 of this Article II not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees whom, at the time of the notice, management intends to present for election.

Section 5. Manner Of Giving Notice. Notice of any meeting of shareholders shall be in writing, unless oral notice is reasonable under the circumstances. Notice may be communicated in person; by telephone, telegraph, teletype, or other form of wire or wireless communication; or by mail or private carrier. If these forms of

personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published; or by radio, television, or other form of public broadcast communication. Written notice shall be deemed effective when mailed, if mailed postpaid and correctly addressed to the shareholder’s address shown in the corporation’s current record of shareholders. Oral notice shall be deemed effective when communicated.

If any notice addressed to a shareholder at the address of that shareholder shown in the corporation’s current record of shareholders is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if these shall be available to the shareholder on written demand of the shareholder at the principal executive office of the corporation for a period of one year from the date of the giving of the notice.

An affidavit of the mailing, or other means of giving any notice of any shareholders meeting may be executed by the secretary, assistant secretary, or any transfer agent of the corporation giving the notice, and shall thereupon be filed and maintained in the minute book of the Corporation.

Section 6. Quorum and Voting Requirements. A “voting group” shall mean all shares of one or more classes or series that under the Articles of Incorporation or the Business Corporation Act are entitled to vote and be counted together collectively on a matter at a meeting of shareholders. All shares entitled by the Articles of Incorporation or the Business Corporation Act to vote generally on the matter shall be considered for that purpose a single voting group.

Shares entitled to vote as a separate voting group may take action on a matter at a meeting only if quorum of those shares exists with respect to that matter. A majority of the votes entitled to be cast on the matter by the voting group constitute a quorum of that voting group for action on that matter. Once a share is represented for any purpose at a meeting, it is considered present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for that adjourned meeting. If a quorum exists, action on a matter (other than the election of directors) by a voting group is approved if the votes cast within the voting group favoring the action exceed the votes cast opposing the action.

The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions of Section 11 of this Article II, subject to the provisions of the Business Corporation Act. The shareholders vote may be by voice vote or by ballot; provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun.

Section 7. Adjourned Meeting; Notice. Any shareholders’ meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the shareholders, and notice need not be given of the adjourned meeting if the new date, time and place are announced at the meeting before adjournment. If the adjourned meeting takes place more than one-hundred twenty (120) days after the date fixed for the original meeting, a new record date must be fixed. If a new record date is or must be fixed pursuant to the provisions of this Section 7 of this Article II or the Business Corporation Act, notice of any such adjourned meeting for which notice is required shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Sections 4 and 5 of this Article II. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.

Section 8. Election of Directors. Directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at which a quorum is present. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected. At a shareholders’ meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes (i.e., cast for any one or more candidates, a number of votes greater than the number of the shareholder’s shares) unless the meeting notice or proxy statement accompanying the notice states conspicuously that cumulative voting is authorized, or a shareholder has either (1) given written notice of such intention to the president or other officer of the corporation not less than forty-eight (48) hours before the time fixed for the meeting, which notice shall be announced in such meeting before the voting or (2) announced his intention in such meeting before the voting for directors shall commence. If any shareholder has given such a notice, then every shareholder entitled to vote may cumulate votes for candidates in nomination and give one candidate a number of votes equal to the number of directors to be elected, multiplied by the number of votes to which that shareholder’s shares are entitled, or distribute the shareholder’s votes on the same principle among any or all of the candidates, as the shareholder thinks fit. If a shareholder intending to cumulate his votes gives notice at the meeting, the person presiding may, or if requested by any shareholder shall, recess the meeting for a period not to exceed two hours.

Section 9. Waiver Of Notice Or Consent By Absent Shareholders. The transactions of any meeting of shareholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after the meeting, each person entitled to vote, who was not present in person or by proxy, signs a written waiver of notice or a consent to a holding of the meeting, or an approval of the action taken as set forth in the minutes. The waiver of notice or consent need not specify either the business transacted or to be transacted or the purpose of any annual or special meeting of shareholders. All such waivers, consent or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Attendance by a person at a meeting shall also constitute a waiver of objection to lack of notice or defective notice of that meeting, except when the person objects, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters not included in the notice of the meeting if that objection is expressly made at the meeting.

Section 10. Shareholder Action By Written Consent Without A Meeting. Any action which may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice, if one or more consents in writing, setting forth the action so taken, are signed by the holders of all of the outstanding shares of the corporation entitled to vote at a meeting to authorize or take that action, or by such holders’ attorneys-in-fact or proxy holders. All such consents shall be filed with the secretary of the corporation and shall be maintained in the corporate records. Any shareholder giving a written consent, or the shareholder’s proxy holders, or a transferee of the shares or a personal representative of the shareholder or their respective proxy holders, may revoke the consent by a writing received by the secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the secretary.

Section 11. Record Date For Shareholder Notice, Voting, And Giving Consents. For purposes of determining the shareholders entitled to notice of any meeting, to vote, or to give consent to corporate action without a meeting, the board of directors may fix, in advance, a record date, which shall not be more than seventy (70) days before the date of any such meeting or any such action, and in this event only shareholders of record on the date so fixed are entitled to notice, to vote or to give consents, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date, except as otherwise provided in the Business Corporation Act.

If no record date is fixed for determination of shareholders entitled to notice of or to vote at a meeting of shareholders, or shareholders entitled to receive payment of a dividend, or other distribution, the date on which the resolution of the board of directors declaring such action or dividend or distribution is adopted, as the case may be, shall be the record date for determination of shareholders.

If a meeting of the shareholders is called by any person entitled to do so pursuant to the Business Corporation Act, and if the board of directors fails or refuses to fix a record date for the purpose of determining shareholders entitled to notice of or to vote at such meeting, then the persons calling such meeting may fix a record date in accordance with the first paragraph of this Section 11.

When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, unless a new record date is fixed in accordance with the first paragraph of this Section 11 or is required to be so fixed by Section 33-7-107 of the Business Corporation Act.

Section 12. Proxies. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation. A proxy shall be deemed signed if the shareholder’s name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder’s attorney in fact. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by a subsequent proxy executed by, or attendance at the meeting, giving notice of revocation, and voting in person by, the person executing the proxy; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 33-7-220 of the Business Corporation Act.

Section 13. Inspectors Of Election. Before or during any meeting of shareholders, the board of directors or the chairman of the meeting may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. The number of inspectors shall be either one (1) or three (3). If any person appointed as inspector fails to appear or fails or refuses to act, the chairman of the meeting may appoint a person to fill that vacancy.

The inspector(s) shall:

(a) determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies;

(b) receive votes, ballots, or consents;

(c) hear and determine all challenges and questions in any way arising in connection with the right to vote;

(d) count and tabulate all votes, ballots or consents;

(e) determine when the polls shall close;

(f) determine and announce the result; and

(g) do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.

ARTICLE III

DIRECTORS

Section 1. Powers. Subject to the provisions of the Business Corporation Act and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors.

Section 2. Number Of Directors. The authorized number of directors shall not be less than three (3) nor more than five (5), until changed by amendment of the articles of incorporation or these bylaws. The exact number of directors shall be fixed, within the limits specified, by resolution duly adopted by the Board of Directors. Until changed by resolution duly adopted by the Board of Directors, the exact number of directors shall be three (3).

Section 3. Election And Term Of Office Of Directors. All nominations for the board of directors must be made in writing and received by the secretary of the corporation no less than 10 days prior to the date of the shareholders’ meeting at which one or more directors are to be elected. Directors shall be elected at each annual meeting of the shareholders to hold office until the next annual meeting. Each director, including a director elected to fill a vacancy, shall hold office until the expiration of the term for which elected and until a successor has been elected and qualified or until earlier resignation, removal, death or incapacity.

Section 4. Vacancies. Vacancies in the board of directors may be filled by the shareholders or by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. Each director so elected shall hold office until the next annual meeting of the shareholders and until a successor has been elected and qualified or until earlier resignation, removal, death or incapacity.

A vacancy or vacancies in the board of directors shall be deemed to exist in the event of the death, resignation, or removal of any director, or if the board of directors by vote at a specially called meeting solely for such purpose removes a director for cause, or if the authorized number of directors is increased or if the shareholders fail, at any meeting of shareholders at which any director or directors are elected, to elect the number of directors to be voted for at that meeting. Cause for removal of a director under this section shall mean fraudulent or dishonest acts, or gross abuse of authority in discharge of duties to the corporation.

Any director may resign effective on giving written notice to the chairman or vice chairman of the board, the president, the secretary, or the board of directors, unless the notice specifies a later time for that resignation to become effective. If the resignation of a director is effective at a future time, the board of directors may elect a successor to take office when the resignation becomes effective.

No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.

Section 5. Place Of Meetings And Meetings By Telephone. Regular meetings of the board of directors may be held at any place within or outside the State of South Carolina that has been designated from time to time by resolution of the board. In the absence of such a designation, regular meetings shall be held at the principal executive office of the corporation. Special meetings of the board shall be held at any place within or outside the State of South Carolina that has been designated in the notice of the meeting or, if not stated in the notice or there is no notice, at the principal executive office of the corporation. Any meeting, regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in the meeting can hear one another, and all such directors shall be deemed to be present in person at the meeting.

Section 6. Annual Meeting. Immediately following each annual meeting of shareholders, the board of directors shall hold a regular meeting for the purpose of organization, any desired election of officers, and the transaction of other business. Notice of this meeting shall not be required.

Section 7. Other Regular Meetings. Other regular meetings of the board of directors shall be held without call at such time as shall from time to time be fixed by the board of directors. Such regular meetings may be held without notice.

Section 8. Special Meetings; Notice. Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairman of the board or the president or any vice president or the secretary or any two directors.

Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at the director’s address as it is shown on the records of the corporation. In case the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. In case the notice is delivered personally or by telephone or telegram, it shall be delivered personally or by telephone or to the telegraph company at least forty-eight (48) hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting nor the place if the meeting is to be held at the principal executive office of the corporation.

Section 9. Quorum. A majority of the authorized number of directors shall constitute a quorum for the transaction of business, except to adjourn as provided in Section 11 of this Article III. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the board of directors. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

Section 10. Waiver Of Notice. The transactions of any meeting of the board of directors, however called and noticed or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice if a quorum is present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice. The waiver of notice or consent need not specify the purpose of the meeting. All such waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any director who attends the meeting without protesting, before or at its commencement, the lack of notice to that director.

Section 11. Adjournment. A majority of the directors present, whether or not constituting a quorum, may adjourn any meeting to another time and place.

Section 12. Notice Of Adjournment. Notice of the time and place of holding an adjourned meeting need not be given unless the meeting is adjourned for more than forty-eight (48) hours, in which case notice of the time and place shall be given before the time of the adjourned meeting, in the manner specified in Section 8 of this Article III, to the directors who were not present at the time of the adjournment.

Section 13. Action Without Meeting. Any action required or permitted to be taken by the board of directors may be taken without a meeting, if all members of the board shall individually or collectively consent in

writing to that action. Such action by written consent shall have the same force and effect as an unanimous vote of the board of directors. Such written consent or consents shall be filed with the minutes of the proceedings of the board.

Section 14. Fees And Compensation Of Directors. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement of expenses, as may be fixed or determined by resolution of the board of directors. This Section 14 shall not be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise, and receiving compensation for those services.

ARTICLE IV

COMMITTEES

Section 1. Committees Of Directors. The board of directors may, by resolution adopted by a majority of the authorized number of directors, designate one or more committees each consisting of two or more directors, to serve at the pleasure of the board. The board may designate one or more directors as alternate members of any committee, who may replace any absent member at any meeting of the committee. Any committee, to the extent provided in the resolution of the board, shall have all the authority of the board, except with respect to the authority of the board of directors to:

(1) authorize distributions;

(2) approve or propose to shareholders action that is required to be approved by shareholders;

(3) fill vacancies on the board of directors or on any of its committees;

(4) amend the Articles of Incorporation;

(5) adopt, amend, or repeal Bylaws;

(6) approve a plan of merger not requiring shareholder approval;

(7) authorize or approve reacquisition of shares, except according to a formula or method prescribed by the board of directors; or

(8) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences, and limitations of a class or series of shares, except that the board of directors may authorize a committee (or a senior executive officer of the corporation) to do so within limits specifically prescribed by the board of directors.

Section 2. Meetings And Action Of Committees. Meetings and action of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these bylaws, Sections 5 (place of meetings), 7 (regular meetings), 8 (special meetings and notice), 9 (quorum), 10 (waiver of notice), 11 (adjournment), 12 (notice of adjournment), and 13 (action without meeting), with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members, except that the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the committee; special meetings of committees may also be called by resolution of the board of directors; and notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The board of directors may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws or the Business Corporation Act.’

ARTICLE V

OFFICERS

Section 1. Officers. The officers of the corporation shall be a chairman of the board, a president, a secretary, and a chief financial officer. The corporation may also have, at the discretion of the board of directors, a vice chairman of the board, one or more vice presidents, a treasurer, one or more assistant secretaries, one or more assistant treasurers, and such other officers as may be appointed in accordance with the provisions of Section 3 of this Article V. If there is a treasurer, he shall be the chief financial officer unless some other person is

so appointed by the board of directors. Any number of offices may be held by the same person, but no officer may act in more than one capacity where action by two or more officers is required.

Section 2. Election Of Officers. The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Section 3 or Section 5 of this Article V, shall be chosen by the board of directors, and each shall serve at the pleasure of the board, subject to all rights, if any, of an officer under any contract of employment.

Section 3. Subordinate Officers. The board of directors may appoint, and may empower the chairman of the board or the president to appoint, such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in the bylaws or as the board of directors may from time to time determine.

Section 4. Removal And Resignation Of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by the board of directors, or, except in case of an officer chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

Section 5. Vacancies In Offices. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in these bylaws for regular appointments to that office.

Section 6. Chairman Of The Board. The chairman of the board shall be the chief executive officer of the corporation unless the president is so designated and shall, subject to the control of the board of directors, have general supervision, direction, and control of the business and the officers of the corporation. He shall, if present, preside at meetings of the board of directors and shareholders and exercise and perform such other powers and duties as may be from time to time assigned to him by the board of directors or prescribed by the bylaws. If there is no president, the chairman of the board shall in addition be the chief operating officer of the corporation and shall have the powers and duties prescribed in Section 8 of this Article V.

Section 7. Vice Chairman Of The Board. In the absence or disability of the chairman of the board, the vice chairman of the board shall perform all the duties of the chairman of the board, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the chairman of the board. The vice chairman of the board shall have such other powers and perform such other duties as from time to time may be prescribed for him by the board of directors or the bylaws.

Section 8. President. The president shall be the chief operating officer of the corporation and, subject to general supervision of the chairman of the board, shall have the general powers and duties of management usually vested in the office of president of a corporation, and shall have such other powers and duties as may be prescribed by the board of-directors or the bylaws. In the absence of the chairman of the board, or the vice chairman of the board, or if there be none, he shall preside at all meetings of the shareholders and at all meetings of the board of directors.

Section 9. Vice Presidents. In the absence or disability of the president, the vice presidents, if any, in order of their rank as fixed by the board of directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president, and when so actin shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the board of directors or the bylaws.

Section 10. Secretary. The secretary shall prepare and keep or cause to be kept, at the principal executive office or such other place as the board of directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and shareholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice given, the names of those present at directors meetings or committee meetings, the number of shares present or represented at shareholders’ meetings, and the proceedings.

The secretary shall keep, or cause to be kept, at the principal executive office or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the board of directors, a share register, or a duplicate share register, showing the names of all shareholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all meetings of the shareholders and of the board of directors required by the bylaws or by law to be given. The secretary shall keep the seal of the corporation if one be adopted, in safe custody, shall be responsible for authenticating records of the corporation and shall have such other powers and perform such other duties as may be prescribed by the board of directors or by the bylaws.

Section 11. Chief Financial Officer. The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director.

The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositaries as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board of directors, shall render to the president and directors, whenever they request it, an account of all of his transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the board of directors or the bylaws.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS,

EMPLOYEES AND OTHER AGENTS

The corporation shall, to the maximum extent permitted by the Business Corporation Act, indemnify each of its agents against expenses, judgments, fines, settlements an other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact any such person is or was an agent of the corporation. For purposes of this Section, an “agent” of the corporation includes any person who is or was a director, officer, employee, or other agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, or was a director, officer, employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

ARTICLE VII

RECORDS AND REPORTS

Section 1. Maintenance And Inspection Of Share Register. The corporation shall keep at its principal executive office, or at the office of its transfer agent or registrar, if either be appointed and as determined by resolution of the board of directors, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of shares held by each shareholder.

A shareholder or shareholders of the corporation may, upon at least five (5) days’ written demand in good faith under oath stating with reasonable particularity the purpose therefor and containing any other reasonable assurances that the information so obtained shall not be misused, for any proper purpose inspect and copy the record of shareholders’ names and addresses and shareholdings during usual business hours. Any inspection and copying under this Section 1 may be made in person or by an agent or attorney of the shareholder or holder of a voting trust certificate making the demand.

Section 2. Maintenance And Inspection Of Bylaws. The corporation shall keep at its principal executive office, the original or a copy of the bylaws as amended to date, which shall be open to inspection by the shareholders in accordance with Section 33-16-102 of the Business Corporation Act.

Section 3. Maintenance And Inspection Of Other Corporate Records. The accounting books and records and minutes of proceedings of the shareholders and the board of directors and any committee or committees of the board of directors shall be kept at such place or places designated by the board of directors, or, in the absence of such designation, at the principal executive office of the corporation. The minutes shall be kept in written form and the accounting books and records shall be kept either in written form or in any other form capable of being converted into written form. The minutes of shareholders meetings and accounting books and records shall be open to inspection upon the written demand of any shareholder or holder of a voting trust certificate, upon at least five (5) days’ written demand under oath stating the purpose therefor and containing any other reasonable assurances that the information so obtained shall not be misused, at any reasonable time during usual business hours, for a purpose reasonably related to the holder’s interests as a shareholder or as the holder of a voting trust certificate. The inspection may be made in person or by an agent or attorney, and shall include the right to copy and make extracts.

Section 4. Inspection By Directors. Every director shall have the absolute right at any reasonable time to inspect all books, records, and documents of every kind and the physical properties of the corporation and each of its subsidiary corporations. This inspection by a director may be made in person or by an agent or attorney and the right of inspection includes the right to copy and make extracts of documents.

Section 5. Financial Statements. A copy of any annual financial statement and any income statement of the corporation for each quarterly period of each fiscal year, and any accompanying balance sheet of the corporation as of the end of each such period, that has been prepared by the corporation shall be kept on file in the principal executive office of the corporation as set forth below and each such statement shall be exhibited at all reasonable times to any shareholder demanding an examination of any such statement or a copy shall be mailed to any such shareholder.

Not later than one hundred twenty (120) days after the close of each fiscal year, the corporation shall mail to each shareholder of record a balance sheet showing in reasonable detail the financial condition of the corporation as of the close of its fiscal year, a profit and loss statement respecting its operation for the immediately preceding twelve (12) months and a statement of changes in shareholders’ equity for the year. Such financial statements shall be filed at the principal place of business of the corporation and shall be kept for at least ten (10) years.

The corporation shall also, on the written request of any shareholder who was not mailed the statements, mail to such shareholder a copy of the last annual, semi-annual, or quarterly financial statements.

The financial statements referred to in this section shall be accompanied by the report, if any, of any independent accountants engaged by the corporation or the certificate of an authorized officer of the corporation that the financial statements were prepared without audit from the books and records of the corporation.

ARTICLE VIII

GENERAL CORPORATE MATTERS

Section 1. Record Date For Purposes Other Than Notice And Voting. For purposes of determining the shareholders entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any other lawful action (other than voting at meetings or action by shareholders by written consent without a meeting), the board of directors may fix, in advance, a record date, which shall not be more than seventy (70) days before any such action, and in that case only shareholders of record on the date so fixed are entitled to receive the dividend, distribution, or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date so fixed, except as otherwise provided in the Business Corporation Act.

If the board of directors does not so fix a record date, the record date for determining shareholders for any such purpose shall be fixed as provided in Article II, Section 11 of these Bylaws.

Section 2. Checks, Drafts, Evidences Of Indebtedness. All checks, drafts, or other orders for payment of money, notes, or other evidences of indebtedness, issued in the name of or payable to the corporation, shall be signed or endorsed by such person or persons and in such manner as from time to time shall be determined by resolution of the board of directors.

Section 3. Corporate Contracts And Instruments; How Executed. The board of directors, except as otherwise provided in these bylaws, may authorize any officer or officers, agent or agents, to enter into any

contract or execute any instrument in the name of and on behalf of the corporation, and this authority may be general or confined to specific instances; and, unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer, agent, or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

Section 4. Certificates For Shares. The shares of the capital stock of the corporation may be certificated or uncertificated, as provided under the Business Corporation Act. A certificate or certificates for shares of the capital stock of the corporation may be issued to each shareholder when any of these shares are fully paid. Any such certificates shall be signed in the name of the corporation by the president or vice president and by the secretary or any assistant secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any or all of the signatures on any such certificate may be facsimile if the certificate is countersigned by a transfer agent or any assistant transfer agent, or registered by a registrar other than the corporation itself or an employee of the corporation. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed on a certificate shall have ceased to be that officer before that certificate is issued, it may be issued by the corporation with the same effect as if that person were an officer at the date of issue.

Within a reasonable time after the issuance or transfer of shares to a shareholder without certificates, the corporation shall send to the new registered owner thereof a written statement containing the information otherwise required to be included on a certificate by the Business Corporation Act.

Section 5. Lost Certificates. Except as provided in this Section 5, no new certificates for shares shall be issued to replace an old certificate unless the latter is surrendered to the corporation and cancelled at the same time. The board of directors may, in case any share certificate or certificate for any other security is lost, stolen, or destroyed, authorize the issuance of a replacement certificate on such terms and conditions as the board may require, including provision for indemnification of the corporation secured by a bond or other adequate security sufficient to protect the corporation against claim that may be made against it, including any expense or liability, on account of the alleged loss, theft, or destruction of the certificate or the issuance of the replacement certificate.

Section 6. Representation Of Shares Of Other Corporations. The chairman of the board, vice chairman of the board, the president, or any vice president, or any other person authorized by resolution of the board of directors or by any of the foregoing designated officers, is authorized to vote on behalf of the corporation any and all shares of any other corporation or corporations, foreign or domestic, standing in the name of the corporation. The authority granted to these officers to vote or represent on behalf of the corporation any and all shares held by the corporation in any other corporation or corporations may be exercised by any of these officers in person or by any person authorized to do so by a proxy duly executed by of these officers.

Section 7. Construction And Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Business Corporation Act shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

ARTICLE IX

AMENDMENTS

Section 1. Amendment By Shareholders. New bylaws may be adopted or these bylaws may be amended or repealed by the vote or written consent of holders of a majority of the outstanding shares entitled to vote.

Section 2. Amendment By Directors. Subject to the rights of the shareholders as provided in Section 1 of this Article IX, to adopt, amend, or repeal bylaws, bylaws may be adopted, amended, or repealed by the board of directors, provided, however, that the board of directors may adopt a bylaw or amendment of a bylaw changing the authorized number of directors only for the purpose of fixing the exact number of directors within the limits specified in the articles of incorporation or in Section 2 of Article III of these bylaws.

EX-14

Exhibit 14

DAILY JOURNAL CORPORATION

CODE OF ETHICS

A. Regulatory Basis.

Pursuant to 17 C.F.R. § 229.406, promulgated by the Securities and Exchange Commission to implement section 406 of the Sarbanes-Oxley Act of 2002, a company subject to reporting requirements under the Securities Exchange Act of 1934 must disclose whether or not it has adopted a written code of ethics applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and if no such code has been adopted, why not.

In addition, pursuant to Nasdaq Marketplace Rule 4350, companies with securities listed on the Nasdaq Stock Market must adopt a code of conduct that applies to all directors, officers and employees.

The Company believes that this Code of Ethics is reasonably designed to deter wrongdoing and to promote the purposes set forth in 17 C.F.R. § 229.406. The Company also believes that this Code of Ethics promotes an atmosphere of self-awareness and prudent conduct by encouraging and protecting the reporting of questionable behavior in accordance with Nasdaq Marketplace Rule 4350. As used herein, “Company” means Daily Journal Corporation and its subsidiary, Sustain Technologies, Inc.

B. Scope.

This Code of Ethics applies to all directors, officers and employees of the Company.

C. Purpose.

The Company is proud of the values with which it conducts business. It has and will continue to uphold the highest levels of business ethics and personal integrity in all types of transactions and interactions. To this end, the Company’s Code of Ethics serves to (1) emphasize the Company’s commitment to ethics and compliance with the law; (2) set forth the Company’s basic standards of ethical and legal behavior for its directors, officers and employees; (3) elaborate reporting mechanisms for known or suspected ethical or legal violations and for other questionable behavior; and (4) deter and detect wrongdoing.

Given the variety and complexity of ethical questions that may arise in the course of the Company’s business, this Code of Ethics serves only as a rough guide. Confronted with ethically ambiguous situations, all directors, officers and employees should remember the Company’s commitment to the highest ethical standards and seek independent advice, where necessary, to ensure that all actions they take on behalf of the Company honor this commitment.

D. Ethical Standards.

1. Honest and Ethical Conduct.

All directors, officers and employees shall behave honestly and ethically at all times and with all people. They shall act in good faith, with due care, and shall engage only in fair and open competition, by treating ethically competitors, suppliers, customers and colleagues. They shall not misrepresent facts or engage in illegal, unethical, or anti-competitive practices for personal or professional gain. No director, officer or employee may offer or accept bribes, kickbacks or substantial gifts either directly or through another party.

This fundamental standard of honest and ethical conduct extends to the handling of conflicts of interest. All directors, officers and employees shall avoid any actual, potential, or apparent conflicts of interest with the Company and any personal activities, investments or associations that might give rise to such conflicts. They shall not use the Company for personal gain, self-deal, compete with the Company or take advantage of corporate opportunities other than on behalf of the Company. They shall act on behalf of the Company free from improper influence or the appearance of improper influence on their judgment or performance of duties. There is a likely conflict of interest if, for example, a director, officer or employee causes the Company to engage in business transactions with relatives or friends; receives loans or guarantees of obligations from the Company (or a third party because of his or her relationship to the Company); has more than a modest financial interest in the Company’s competitors, suppliers, or customers; or uses non-public information for personal gain or for gain by relatives or friends.

If a director, officer or employee involved in a particular decision has a relationship—business, financial, or otherwise—with a competitor, supplier, customer, candidate for employment or other person, that might impair or appear to impair his or her independence in making that decision, he or she shall disclose such relationship to the Chairman of the Audit Committee. No action may be taken with respect to the transaction or party giving rise to the actual, potential or apparent conflict unless and until such action has been approved by the Audit Committee.

2. Timely and Truthful Disclosure.

In reports and documents filed with or submitted to the Securities and Exchange Commission and other regulators, and in other public communications made by the Company, the Company’s directors, officers and employees involved in the preparation of such reports, documents and communications shall make disclosures that are full, fair, accurate, timely and understandable. Such disclosures shall contain thoroughly and accurately reported financial and accounting data. No director, officer or employee shall knowingly conceal or falsify information, misrepresent material facts or omit material facts necessary to avoid misleading the Company’s independent public auditor or the public.

3. Legal Compliance.

In conducting the business of the Company, all directors, officers and employees shall comply with applicable governmental laws, rules and regulations at all levels of government in the United States and in any non-U.S. jurisdiction in which the Company does business. If a director, officer or employee is unsure whether a particular action would violate an applicable

law, rule, or regulation, he or she should seek the advice of the Company’s outside counsel before undertaking it. It is always illegal to trade in the Company’s securities while in possession of material, non-public information, and it is also illegal to communicate or “tip” such information to others.

4. Confidentiality.

The Company’s directors, officers and employees shall take all reasonable steps to protect the confidentiality of non-public information about the Company and its customers and to prevent the unauthorized disclosure of such information unless required by applicable law or regulation or legal or regulatory process.

E. Violations of Ethical Standards.

1. Reporting Known or Suspected Violations.

The Company’s directors and executive officers shall promptly report any known or suspected violations of this Code of Ethics and any other questionable behavior to the Chairman of the Audit Committee. All other officers and employees are encouraged to send a report of a known or suspected violation or of any questionable behavior (anonymously, if desired) to J.P. Guerin, Chairman of the Daily Journal Corporation Audit Committee, at 355 South Grand Avenue, 34^th Floor, Los Angeles, CA 90071. No retaliatory action of any kind will be permitted against anyone making such a report, and the Audit Committee will strictly enforce this prohibition.

Upon learning of any unethical business conduct, or dishonest or illegal acts, the Audit Committee shall investigate the report as it deems appropriate and provide feedback to the reporting party (unless such party is anonymous) as to the result of its investigation.

2. Accountability for Adherence.

If the Audit Committee determines that this Code of Ethics has been violated directly or by failure to report a violation, withholding information related to a violation or taking prohibited retaliatory action against someone who reported questionable behavior, it may discipline the offending director, officer or employee for non-compliance with penalties up to and including removal from office or dismissal. Such penalties may include, depending upon the severity of the infraction, oral or written reprimands, the withholding of bonuses, the deduction of some or all of the person’s earned units in the Company’s Deferred Management Compensation Plan, the forfeiture of director stipends, removal from committees of the Board of Directors and, if warranted, termination. In addition, violations may result in criminal penalties and/or civil liabilities for the offending director, officer or employee and/or the Company.

F. Waivers

The Company’s Board of Directors, in its discretion, may grant a waiver of a provision of this Code of Ethics to any director, officer or employee. If the waiver is granted for a director or executive officer, a current report on Form 8-K must be filed with the Securities and Exchange Commission in accordance with the applicable rules and regulations of the Commission and Nasdaq.

EX-21

Exhibit 21

Sustain Technologies, Inc., a Virginia Corporation (“Sustain”), is a wholly-owned subsidiary of the Daily Journal Corporation that was acquired in January 1999. Prior to September 28, 1999, Sustain did business as Choice Information Systems, Inc.

EX-31

Exhibit 31

CERTIFICATIONS BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gerald L. Salzman, certify that:

1. I have reviewed this annual report on Form 10-K of Daily Journal Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 15, 2009

/s/ Gerald L. Salzman

Gerald L. Salzman

Chief Executive Officer, President,

Chief Financial Officer and Treasurer

EX-32

Exhibit 32

CERTIFICATION BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of Daily Journal Corporation (the “Company”) for the fiscal year ended September 30, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerald L. Salzman, President, Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gerald L. Salzman

Gerald L. Salzman

Chief Executive Officer, President,

Chief Financial Officer and Treasurer

December 15, 2009

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document.