NOTICE OF THE 100 TH ORDINARY GENERAL MEETING OF SHAREHOLDERS ~extract

Transcription

1 To Shareholders TSE Code 8511 June 3, 2010 President Minoru Masubuchi JAPAN SECURITIES FINANCE CO., LTD , Nihonbashi-Kayabacho, Chuo-ku, Tokyo, Japan NOTICE OF THE 100 TH ORDINARY GENERAL MEETING OF SHAREHOLDERS ~extract Dear Shareholders, You are hereby advised of the convocation of the 100 th Ordinary General Meeting of Shareholders of the Company, details of which are indicated below. We hope very much that you will be able to attend this Meeting. In order to exercise your rights, please review the attached reference materials, and indicate your approval or disapproval of the proposals on the enclosed document, then return it or vote on the Internet site ( by 5:20 p.m. Japan Standard Time on 24 th June, We are pleased to announce you that we participate in the ICJ voting platform, improving the voting environment for all our shareholders. The ICJ is offering access to the world's most widely used and sophisticated electronic voting platform, ADP's Proxy Edge voting platform. Details 1. Date and Time: 10:00 a.m. on Friday, 25 th June, Venue: JAPAN SECURITIES FINANCE CO., LTD., Conference Room Nihonbashi-Kayabacho, Chuo-ku, Tokyo, Japan 3. Agenda for the Meeting Items to be reported: Report 1: The 100 th fiscal year (from Apr. 1, 2009 to Mar. 31, 2010) Business Report, Consolidated Financial Statements and Report of audits of the consolidated financial statements by the Independent Auditor and the Board of Auditors. Report 2: The 100 th fiscal year (from Apr. 1, 2009 to Mar. 31, 2010) Financial Statements. Items to be resolved: Agenda 1: Appropriation of Retained Earnings Agenda 2: Partial Amendment to the Articles of Incorporation Agenda 3: Election of nine Directors Agenda 4: Election of one Substitute Auditor Note: This English version is not a legally accurate translation of the original Japanese text.

2 REFERENCE DOCUMENTS PERTAINING TO EXERCISE OF VOTING RIGHTS Agenda and Reference Information Agenda 1: Appropriation of Retained Earnings The Company proposes the appropriation of retained earnings in the following manner. Year-end dividend The Company determines the rate of dividend in accordance with the company s dividend policy for distributing dividend by taking account of its financial results, while considering its shareholders' equity and appropriate internal reserves as a financial institution. With respect to dividends for the term, in consideration of the company s dividend policy, its financial results and the severity of the projected business environment surrounding the Company, it is with deep regret that Company s year-end dividends will be calculated at 7 yen per share, down 3 yen per share from the previous year s level. The Company humbly asks for the understanding of its shareholders along with their acknowledgement of the current situation. Accordingly, annual dividends which include the interim dividends of 7 yen per share will be calculated at 14 yen per share, down 6 yen per share from the previous year s level. (1) Type of dividend asset Cash (2) Allocation of dividend assets and total amount of allocation 7 yen per share of common stock Total amount of payout: 651,355,670 yen (3) Effective date of dividend payment June 28,

3 Agenda 2: Partial Amendment to the Articles of Incorporation (Reason for Amendment) In order to deal with reorganization and renaming, etc of financial instruments exchanges. Amendments to the Articles of Incorporation (Amendment parts are underlined) Current Amended Chapter I General Provisions Chapter I General Provisions Article 2. (Purposes) The Company shall be organized for the purposes of operating the following businesses. (1) To lend the necessary cash or securities for the settlement of the margin transactions, etc. through the clearing systems of the exchange financial instruments market provided by each securities exchange in Tokyo, Sapporo, Fukuoka, or Jasdaq. (2)~(9) (Omitted) Article 2. (Purposes) The Company shall be organized for the purposes of operating the following businesses. (1) To lend the necessary cash or securities for the settlement of the margin transactions, etc. through the clearing systems of the exchange financial instruments market provided by financial instruments exchanges. (2)~(9) (No change) Agenda 3: Election of nine Directors As the term of office of eight directors will expire at the conclusion of this Ordinary General Meeting of Shareholders, the Company proposes the election of nine directors. The candidates are as listed below. Name No. (Date of birth) 1 Minoru Masubuchi (Nov. 3, 1943) Brief personal history & Significant concurrent positions May 1993 Adviser to Governor of Market Operations Dept, Bank of Japan (BOJ) May 1994 Director-General of Financial and Payment System Dept., BOJ Jul Executive Director of BOJ Jul Standing Adviser of IBM Japan, Ltd. Jun President of JSF Jun Director of JSF Trust and Banking Co., Ltd. Jun Director of Japan Information Processing Service Co., Ltd. Jun Director of Nihon Building Co., Ltd. (Significant concurrent positions) - Director of Nihon Building Co., Ltd. - Director of Japan Information Processing Service Co., Ltd. Shares of JSF owned 24,

4 Name No. (Date of birth) 2 Hiromitsu Matsuda (Sep. 11, 1948) 3 Eizo Kobayashi (Sep. 8, 1948) 4 Yasuhisa Hashimoto (Feb. 27, 1951) Brief personal history & Significant concurrent positions Jul Chief of Fukuoka Regional Taxation Bureau Aug Superintendent of Nagano Prefectural Police Headquarters Aug Deputy Director-General of Financial Bureau, Ministry of Finance Aug Executive Director of Government Housing Loan Corp. Apr Deputy-Chairman of Japan Housing Financial Agency Jun Executive Vice President of JSF, Responsibility for Audit Dept and Compliance Dept May 1999 Director-General of Personnel and Corporate Affairs Dept., BOJ May 2000 Director-General of Bank Examination and Surveillance Dept., BOJ Jun Executive Director of BOJ May 2006 Senior Advisor of Aflac Japan Jul Vice Chairman of Aflac Japan May 2010 Adviser of JSF (Significant concurrent positions) - Director of Yamaha Motor Co., Ltd. - Director of Cross Plus Inc. - Director of Shinhan Bank Japan May 1996 General Manager of Naha Branch, BOJ May 1998 Director-General, Senior Secretary to Governor of BOJ Feb Director-General of Secretariat of Policy Board Dept, BOJ May 2003 Director-General of Currency Issue Dept, BOJ Feb Personal and Corporate Affairs Dept, BOJ May 2005 Adviser of JSF Jun Managing Director of JSF Jun Director of Japan Securities Agents, Ltd. Jun Senior Managing Director of JSF, Responsibility for General Affairs Dept, Accounting Dept, Branches and Affiliates Director of JBIS Business Service, Inc. Apr Senior Managing Director of JSF, Responsibility for General Affairs Dept, Accounting Dept and Affiliates (Significant concurrent positions) - Director of Japan Securities Agents, Ltd. - Director of JBIS Business Service, Inc. Shares of JSF owned 10,100 13,

5 Name No. (Date of birth) 5 Hiroshi Nasuno (Jan. 12, 1950) 6 Hiroshi Asakura (Nov. 1, 1955) Brief personal history & Significant concurrent positions Apr Joined JSF Jun General Manager of Securities Custody Dept Jun General Manager of Settlement & Custody Dept Jun Auditor of Japan Securities Agents, Ltd. Jun Director & General Manager of Accounting Dept Jun Executive Officer & General Manager of Accounting Dept Oct Auditor of JBIS Holdings, Inc. Jun Managing Director Jun Managing Director, Responsibility for Risk Mgmt Dept, Planning Dept, Settlement & Custody Dept and Information Systems Planning Dept Auditor of JBIS Business Service, Inc. (Significant concurrent positions) - Auditor of JBIS Holdings, Inc. - Auditor of Japan Securities Agents, Ltd. - Auditor of JBIS Business Service, Inc. Apr Joined JSF Jun General Manager of Planning Dept Jun General Manager of Margin Loan Dept Jun Executive Officer & General Manager of Margin Loan Dept Oct Director of JBIS Holdings, Inc. Feb Executive Officer & General Manager of Loan Dept Jun Managing Director, Responsibility for Treasury Dept, Margin Loan Dept and Loan Dept (Significant concurrent positions) - Director of JBIS Holdings, Inc. Shares of JSF owned 30,200 14,

6 Name No. (Date of birth) 7 Takashi Imai (Dec. 23, 1929) 8 Akira Kanno (Dec. 1, 1932) Brief personal history & Significant concurrent positions Jun President of Nippon Steel Corp. Apr Chairman of Nippon Steel Corp. May 1998 Chairman of Nippon Keidanren (Japan Business Federation) May 2002 Honorary Chairman of Nippon Keidanren Jun Director of JSF Apr Director & Senior Adviser / Honorary Chairman of Nippon Steel Corp. Jun Senior Adviser (Sodanyaku) / Honorary Chairman of Nippon Steel Corp. Jun Senior Adviser (Shayuu) / Honorary Chairman of Nippon Steel Corp. (Significant concurrent positions) - Director of Nippon Telegraph and Telephone Corp. - Director of Nippon Television Network Corp. - Auditor of Nippon Life Insurance Co. - Director of Tokyo Financial Exchange Inc. Dec Executive Director of BOJ May 1992 Deputy Governor of Export-Import Bank of Japan May 1994 Vice-Chairman & Senior Managing Governor of Federation of Bankers Associations of Japan Apr Vice-Chairman & Senior Managing Governor of Japanese Bankers Association (renamed) Jun Director of JSF Dec Chairman of Japan Electric Power Exchange (Significant concurrent positions) - Chairman of Japan Electric Power Exchange - Director of Sohgo Security Services Co., Ltd. Shares of JSF owned 4,000 27,

7 No. Name Brief personal history & Shares of (Date of birth) Significant concurrent positions JSF owned 9 Hiroshi Koshida (May. 21, 1937) Jun Jun Jun Vice President of Daiwa Securities Co., Ltd. President of Daiwa Asset Management Co., Ltd. Chairman of Daiwa Asset Management Co., Ltd. Chairman of Investment Trusts Association 3,000 Jun Standing Adviser of Daiwa Asset Management Co., Ltd. Jul Chairman of Japan Securities Dealers Association Jul Public Governor of Japan Securities Dealers Association Chairman of NPO-APROSIS (Association for Promoting Securities Investment and Study) Sep Director of Kanpo Co., Ltd. (currently, Japan Post Insurance Co., Ltd.) Jul Adviser of Daiwa Asset Management Co., Ltd. Jun Director of JSF Jul Adviser of Japan Securities Dealers Association (Significant concurrent positions) - Chairman of NPO-APROSIS - Director of Japan Post Insurance Co., Ltd. Note 1: The Company has no conflict of interest with each candidate. Note 2: Takashi Imai, Akira Kanno and Hiroshi Koshida are candidates for outside directors. Note 3: Reasons for recommending them as candidates for outside directors are as follows. (1) Takashi Imai is nominated in the expectation of his abundant experience and wide knowledge in economic circles as well as his objective standpoint which is independent from executive directors. He has been our outside director since June 2002 and acted for 8 years at the conclusion of this meeting. (2) Akira Kanno is nominated in the expectation of his abundant experience and wide knowledge in financial circles as well as his objective standpoint which is independent from executive directors. He has been our outside director since June 2003 and acted for 7 years at the conclusion of this meeting. (3) Hiroshi Koshida is nominated in the expectation of his abundant experience and wide knowledge in securities circles as well as his objective standpoint which is independent from executive directors. He also holds the post of the chairman of NPO-APROSIS. The Company pays annual charge of 300,000 yen for this organization as the associate member. He has been our outside director since June 2008 and acted for 2 years at the conclusion of this meeting. Note 4: In November of 2008, Nippon Television Network Corporation, where Takashi Imai serves as Outside Director, broadcasted a news program based on a false recognition of the truth. In March 2009, Nippon Television Network Corporation apologized to persons concerned and broadcasted the corrected information in accordance with the Broadcast Act. Though he was not directly involved with the aforementioned news program, after the broadcast in question, he -7-

8 appropriately executed his role as Outside Director through various measures including Board Meeting deliberations for proposals to ensure the prevention of reoccurrence of such incidents. Agenda 4: Election of one Substitute Auditor At the commencement of this Ordinary General Meeting of Shareholders, the decision of the 99th Ordinary General Meeting of Shareholders held on June 26th, 2009 to elect Masato Denawa as Substitute Auditor will expire. Accordingly, the Company proposes the reappointment of Masato Denawa as Substitute Auditor in order to provide for the possible case scenario in which the number of incumbent auditors provided by laws or regulations becomes insufficient. The candidate is as listed below. The consent of the Board of Auditors has been obtained for this proposal. Name (Date of birth) Brief personal history & Significant concurrent positions Shares of JSF owned Masato Denawa Apr Registered Lawyer (Daiichi Tokyo Bar (Feb. 5, 1964) Association) Joined Okinobu & Ishihara Law Office (currently, Spring Partners) Jan Partner attorney at Spring Partners Jun Auditor of Kinkan Co., Ltd. Apr Lecturer at Keio Univ. Faculty of Law. Feb Auditor of ULVEX Inc. Jul Sep Director of Advise Link Co., Ltd. Auditor of Japan Prime Realty Investment Corp. Jun Substitute Auditor of JSF Apr Lecturer at Keio Law School Note 1: The Company has no conflict of interest with a candidate. Note 2: Masato Denawa is a candidate for substitute outside auditor. The Company asks for his election in expectation of his special knowledge and abundant experience as a lawyer. -8 -

9 CONSOLIDATED BALANCE SHEETS As of March 31, 2010 ASSETS Current assets: Cash Short-term investments Short-term loans receivable Securities lent Securities in custody Securities in deposit Deferred tax assets Collateral money for securities borrowed Other current assets Allowance for doubtful receivables Millions of Yen 18,005 2,811, , ,933 36, , ,373 3,089 (2,085) Total current assets 4,842,517 Non-current assets: Tangible non-current assets: Buildings and structures 2,877 Tools, furniture and fixtures 443 Land 3,315 Leased assets 19 6,655 Intangible non-current assets: Software 1,455 Other intangible non-current assets 23 1,479 Investments and other assets: Investments in securities 627,313 In-house loan 328 Other investments and other assets 3,335 Allowance for doubtful receivables (2,020) 628,957 Total non-current assets 637,092 Total Assets 5,479,

10 As of March 31, 2010 Millions of Yen LIABILITIES AND NET ASSETS Current liabilities: Call money 1,344,300 Short-term borrowings 2,443,810 Commercial paper 27,500 Payables under repurchase agreements 86,192 Accrued income taxes 1,073 Allowance for bonuses (Employees) 411 Allowance for bonuses (Directors & Executive Officers) 62 Collateral money received for securities lent 824,158 Collateral securities deposited 328,755 Securities borrowed 208,376 Securities lent opposite account 3,273 Other current liabilities 44,627 Total current liabilities 5,312,542 Non-current liabilities: Long-term borrowings 48,500 Deferred tax liabilities 2,499 Deferred tax liabilities for land revaluation 98 Allowance for employees retirement benefits 2,312 Allowance for officers retirement rewards 103 Other non-current liabilities 897 Total non-current liabilities 54,410 Total liabilities 5,366,953 Net assets: Shareholders equity: Common stock 10,000 Additional paid-in capital 5,181 Retained earnings 94,646 Treasury stock (662) Total Shareholders equity 109,164 Valuation and translation adjustments: Net unrealized gain on other securities 3,348 Gain on revaluation of land 143 Total valuation and translation adjustments 3,491 Total net assets 112,656 Total liabilities and net assets 5,479,

11 CONSOLIDATED STATEMENTS OF OPERATIONS For the year ended March 31, 2010 Millions of Yen Operating Revenues 27,868 Operating Expenses Operating Profit 14,548 General and administrative expenses 8,650 Operating Income 5,898 Non-operating Revenues: Interest received and dividends received 137 Rental fees 47 Miscellaneous revenue Non-operating Expenses: Interest on borrowing 0 Equity in losses of affiliates 916 Miscellaneous expenses Recurring Income 5,182 Extraordinary Profit: - Extraordinary Loss: Loss on retirement of non-current assets 41 Other extraordinary loss 0 41 Income before income taxes 5,140 Income Taxes Current 1,787 Deferred (218) 1,568 Net Income 3,

12 CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Common stock Additional paid-in capital Shareholders equity Retained earnings Treasury stock Millions of Yen Total shareholders equity Balance at March 31, ,000 5,181 92,471 (648) 107,004 Changes arising during the year: Cash dividends (1,581) (1,581) Net Income 3,572 3,572 Change of scope of equity method Purchase of treasury stock (1) (1) Increase of treasury stock resulting from change of scope of equity method Net changes other than shareholders equity (12) (12) Total changes during the year - - 2,174 (14) 2,160 Balance at March 31, ,000 5,181 94,646 (662) 109,164 Valuation and translation adjustments Net unrealized gain or loss on securities Gain on revaluation of land Total valuation and translation adjustments Total net assets Balance at March 31, ,232 Changes arising during the year Cash dividends (1,581) Net Income 3,572 Change of scope of equity method 184 Purchase of treasury stock (1) Increase of treasury stock resulting from change of scope of equity method Net changes other than shareholders equity (12) 3,263-3,263 3,263 Total changes during the year 3,263-3,263 5,424 Balance at March 31, , , ,

13 NON-CONSOLIDATED BALANCE SHEETS As of March 31, 2010 ASSETS Current assets: Cash Call loans Short-term investments Loan for margin transactions Bond financing and General loans Other loans Securities lent for margin transactions Other securities lent Securities in custody Securities in deposit Prepaid expenses Deferred tax assets Collateral money for securities borrowed Accrued revenue Other current assets Allowance for doubtful receivables Millions of Yen ,000 1,641, ,755 51,448 14, ,394 3,538 36, , , (813) Total current assets 3,484,261 Non-current assets: Tangible non-current assets: Buildings and structures Tools, furniture and fixtures Land Leased assets Intangible non-current assets: Software Other intangible non-current assets Investments and other assets: Investments in securities Shares in affiliates Investments in capital Guaranty money deposited In-house loan Other investments and other assets Allowance for doubtful receivables ,949 1, , ,521 27, (347) 475,575 Total non-current assets 478,823 Total Assets 3,963,

14 As of March 31, 2010 Millions of Yen LIABILITIES AND NET ASSETS Current liabilities: Call money 1,067,800 Short-term borrowings 1,360,140 Commercial paper 27,500 Accrued expenses 244 Accrued income taxes 836 Allowance for bonuses (Employees) 366 Allowance for bonuses (Directors & Executive Officers) 62 Collateral money received for margin transactions 23,404 Collateral money received for securities lent 814,547 Deposit received 148 Collateral securities deposited 328,755 Securities borrowed 208,376 Securities lent opposite account 3,273 Advanced received profit 14 Other current liabilities 10,338 Total current liabilities 3,845,808 Non-current liabilities: Long-term borrowings Deferred tax liabilities Deferred tax liabilities for land revaluation Allowance for employees retirement benefits Allowance for officers retirement rewards Other non-current liabilities 4,000 1, , Total non-current liabilities 8,297 Total liabilities 3,854,106 Net assets: Shareholders equity Common stock 10,000 Capital surplus 5,181 Additional paid-in capital 5,181 Retained earnings 89,736 Earned surplus reserve 2,278 Reserve for dividends 2,030 Special reserve 77,030 Retained earnings carried forward 8,398 Treasury stock (504) Total Shareholders equity 104,413 Valuation and translation adjustments Net unrealized gain on other securities Gain on revaluation of land 4, Total valuation and translation adjustments 4,565 Total net assets 108,979 Total liabilities and net assets 3,963,

15 NON-CONSOLIDATED STATEMENTS OF OPERATIONS For the year ended March 31, 2010 Millions of Yen Operating Revenues 20,940 Operating Expenses 10,497 Operating Profit 10,443 General and administrative expenses 6,865 Operating Income 3,577 Non-operating Revenues Interest received and dividends received 365 Miscellaneous revenues Non-operating Expenses Miscellaneous expenses 0 0 Recurring Income 4,012 Extraordinary Profit Reversal of allowance for doubtful receivables Extraordinary Loss Loss on retirement of non-current assets Income before income taxes 4,084 Income Taxes Current 1,572 Deferred 0 1,572 Net Income 2,

16 NON-CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS Common stock Capital surplus Additional paid-in capital Earned reserves Shareholders equity Retained earnings Other retained earnings Reserve for dividends Special reserves Retained earnings carried forward Total retained earnings Treasury stock Millions of Yen Total shareholders equity Balance at March 31, ,000 5,181 2,278 2,030 77,030 7,467 88,805 (502) 103,484 Changes arising during the year: Cash dividends (1,581) (1,581) (1,581) Net income 2,512 2,512 2,512 Purchase of treasury stock (1) (1) Net changes other than shareholders equity Total changes during the year (1) 928 Balance at March 31, ,000 5,181 2,278 2,030 77,030 8,398 89,736 (504) 104,413 Valuation and translation adjustments Net unrealized gain or loss on securities Gain on revaluation of land Total valuation and translation adjustments Total net assets Balance at March 31, , , ,344 Changes arising during the year: Cash dividends (1,581) Net income 2,512 Purchase of treasury stock (1) Net changes other than shareholders equity 2,705-2,705 2,705 Total changes during the year 2,705-2,705 3,634 Balance at March 31, , , ,