NOTICE OF THE 101 ST ORDINARY GENERAL MEETING OF SHAREHOLDERS extract

Transcription

1 To Shareholders TSE Code 8511 June 2, 2011 President Minoru Masubuchi JAPAN SECURITIES FINANCE CO., LTD , Nihonbashi-Kayabacho, Chuo-ku, Tokyo, Japan NOTICE OF THE 101 ST ORDINARY GENERAL MEETING OF SHAREHOLDERS extract Dear Shareholders, You are hereby advised of the convocation of the 101 st 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 23 rd 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, 24 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 101 st fiscal year (from Apr. 1, 2010 to Mar. 31, 2011) 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 101 st fiscal year (from Apr. 1, 2010 to Mar. 31, 2011) Financial Statements. Items to be resolved: Agenda 1: Appropriation of Retained Earnings Agenda 2: Election of nine Directors Agenda 3: Election of two Auditors 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, Company s year-end dividends will be calculated at 7 yen per share. Accordingly, annual dividends which include the interim dividends of 7 yen per share will be calculated at 14 yen per share. (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: 651,343,000 yen (3) Effective date of dividend payment June 27,

3 Agenda 2: Election of nine Directors As the term of office of nine 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) 2 Hiromitsu Matsuda (Sep. 11, 1948) 3 Eizo Kobayashi (Sep. 8, 1948) 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. Jun Director of Tokyo Rope Manufacturing Co., Ltd. - Director of Nihon Building Co., Ltd. - Director of Japan Information Processing Service Co., Ltd. - Director of Tokyo Rope Manufacturing Co., Ltd. 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 Jun Senior Managing Director of JSF, Responsibility for Risk Management Dept - Director of Cross Plus Inc. - Director of Shinhan Bank Japan Shares of JSF owned 33,000 16,400 3,

4 Name No. (Date of birth) 4 Yasuhisa Hashimoto (Feb. 27, 1951) 5 Hiroshi Nasuno (Jan. 12, 1950) 6 Hiroshi Asakura (Nov. 1, 1955) Brief personal history & Significant concurrent positions 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 - Director of Japan Securities Agents, Ltd. - Director of JBIS Business Service, Inc. 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. Jun Managing Director, Responsibility for Planning Dept, Settlement & Custody Dept and Information Systems Planning Dept - 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 - Director of JBIS Holdings, Inc. -4- Shares of JSF owned 19,000 35,500 20,500

5 Name No. (Date of birth) 7 Takashi Imai (Dec. 23, 1929) 8 Akira Kanno (Dec. 1, 1932) 9 Hiroshi Koshida (May. 21, 1937) 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. - 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 May 1992 May 1994 Executive Director of BOJ Deputy Governor of Export-Import Bank of Japan 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 - Chairman of Japan Electric Power Exchange - Director of Sohgo Security Services Co., Ltd. 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 Jun Jul Jul Standing Adviser of Daiwa Asset Management Co., Ltd. Chairman of Japan Securities Dealers Association 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 - Director of Japan Post Insurance Co., Ltd. - Director of Paramount Bed Co., Ltd. Shares of JSF owned 4,000 33,800 3,

6 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 9 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 8 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 until last June. 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 3 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 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. Note 5: Takashi Imai, Akira Kanno and Hiroshi Koshida are Independent Directors as defined by the Tokyo Stock Exchange. If they are elected as proposed, they will continue to be Independent Directors. -6 -

7 Agenda 3: Election of two Auditors As the term of office of two Auditors, Shigeru Awashima and Toshio Kamiyama, will expire at the conclusion of this Ordinary General Meeting of Shareholders, the Company proposes the election of two auditors. The candidates are as listed below. The consent of the Board of Auditors has been obtained for this proposal. No. Name Brief personal history & Shares of (Date of birth) Significant concurrent positions JSF owned Masao Iguchi Apr Joined Industrial Bank of Japan, Ltd. (currently, 6,400 1* (Jun. 12, 1954) Mizuho Corporate Bank, Ltd. (Mizuho CB)) Apr General Manager of Securities Business Operations Dept., Mizuho CB. Jul General Manager of Human Resource Dept. (General Manager of Human Resource Development Office), Mizuho CB. Jun Jun Jun General Manager of Accounting Dept., JSF General Manager of Risk Management Dept. Executive Officer & General Manager of Risk Management Dept. Jun Retired Executive Officer & General Manager of Risk Management Dept. 2 Toshio Kamiyama (Nov. 18, 1941) Feb Feb Apr Jul Registered certified public accountants Representative of Kamiyama CPA Office (to the present) Registered certified tax accountants Director of the Japanese Institute of Certified Public Accountants 14,200 Feb Representative President of Japanese Accountants School Aug Aug Jun Jul Commissioner of JICPA for objection inquiry Commissioner of CPA examination Auditor of JSF Auditor of JICPA - Representative of Kamiyama CPA Office - Representative President of Japanese Accountants School Note 1: Person shown with asterisk (*) is a new candidate of Auditors. Note 2: The Company has no conflict of interest with each candidate. Note 3: Toshio Kamiyama is a candidate for an outside auditor. The Company asks for his election in expectation of his special knowledge and abundant experience as Certificated Public Accountant and Certified Tax Accountant. He has been our outside auditor since June 2003 and acted for 8 years as of the end of this meeting. During his tenure as outside auditor, on December 14, 2007 the Company received an administrative order from the Financial Services Agency in regard to an unfair adjustment of stock procurement through bidding. The administrative order commanded the Company to strengthen its compliance and internal control system. Prior to this, at meetings of the Board -7 -

8 of Directors and the Board of Auditors, he made remarks based on his accounting expertise and emphasized the importance of compliance. Furthermore, following the confirmation of the unfair adjustment, he has fulfilled his responsibilities to prevent a reoccurrence by suggesting the reinforcement of the company-wide compliance system and proposing business improvements. He is an Independent Auditor as defined by the Tokyo Stock Exchange. If he is elected as proposed, he will continue to be an Independent Auditor. Agenda 4: Election of one Substitute Auditor At the commencement of this Ordinary General Meeting of Shareholders, the decision of the 100th Ordinary General Meeting of Shareholders held on June 25th, 2010 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 Apr Practicing-Attorney-Professor for Civil Advocacy at the Legal Training and Research Institute of the Supreme Court of Japan 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, 2011 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 44,400 3,126, , ,941 37, , ,516,586 4,153 (1,393) Total current assets 5,685,741 Non-current assets: Tangible non-current assets: Buildings and structures 2,835 Tools, furniture and fixtures 361 Land 3,305 Leased assets 26 6,528 Intangible non-current assets: Software 1,094 Other intangible non-current assets 22 1,117 Investments and other assets: Investments in securities 1,383,841 In-house loan 276 Other investments and other assets 1,448 Allowance for doubtful receivables (815) 1,384,750 Total non-current assets 1,392,396 Total Assets 7,078,

10 As of March 31, 2011 Millions of Yen LIABILITIES AND NET ASSETS Current liabilities: Call money 1,264,300 Short-term borrowings 4,032,010 Current portion of Long-term borrowings 17,000 Commercial paper 7,500 Accrued income taxes 129 Allowance for bonuses (Employees) 414 Allowance for bonuses (Directors & Executive Officers) 50 Collateral money received for securities lent 1,165,936 Collateral securities deposited 305,083 Securities borrowed 119,020 Securities lent opposite account 1,444 Other current liabilities 22,920 Total current liabilities 6,935,810 Non-current liabilities: Long-term borrowings 21,500 Deferred tax liabilities 2,700 Deferred tax liabilities for land revaluation 98 Allowance for employees retirement benefits 2,324 Allowance for officers retirement rewards 89 Asset retirement obligations 44 Other non-current liabilities 641 Total non-current liabilities 27,400 Total liabilities 6,963,211 Net assets: Shareholders equity: Common stock 10,000 Additional paid-in capital 5,181 Retained earnings 96,835 Treasury stock (663) Total Shareholders equity 111,353 Accumulated other comprehensive income Net unrealized gain on other securities 3,430 Gain on revaluation of land 143 Total Accumulated other comprehensive income 3,573 Total net assets 114,927 Total liabilities and net assets 7,078,

11 CONSOLIDATED STATEMENTS OF OPERATIONS For the year ended March 31, 2011 Millions of Yen Operating Revenues 22,848 Operating Expenses 11,327 Operating Profit 11,521 General and administrative expenses 7,865 Operating Income 3,655 Non-operating Revenues: Interest received and dividends received 117 Rental fees 47 Miscellaneous revenue Non-operating Expenses: Interest on borrowing 0 Equity in losses of affiliates 484 Miscellaneous expenses Recurring Income 3,345 Extraordinary Profit: Gain on sale of non-current assets 1 Reversal of allowance for doubtful receivables 1,292 Recoveries of written-off claims 4 1,297 Extraordinary Loss: Loss on prior period adjustment 0 Loss on sale of non-current assets 28 Loss on retirement of non-current assets Income before income taxes 4,596 Income Taxes Current 884 Deferred 219 1,103 Income before minority interests 3,492 Minority interests 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 94,646 (662) 109,164 Changes arising during the year: Cash dividends (1,302) (1,302) Net Income 3,492 3,492 Purchase of treasury stock (1) (1) Net changes other than shareholders equity Total changes during the year 2,189 (1) 2,188 Balance at March 31, ,000 5,181 96,835 (663) 111,353 Accumulated other comprehensive income Net unrealized gain or loss on securities Gain on Total accumulated revaluation of other comprehensive land income Total net assets Balance at March 31, , , ,656 Changes arising during the year Cash dividends (1,302) Net Income 3,492 Purchase of treasury stock (1) Net changes other than shareholders equity Total changes during the year ,270 Balance at March 31, , , ,

13 NON-CONSOLIDATED BALANCE SHEETS As of March 31, 2011 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 1,870, ,083 39,782 12, ,442 1,499 37, , ,363,565 1,609 1,002 (698) Total current assets 4,079,648 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 , ,119,334 27, (275) 1,147,332 Total non-current assets 1,150,131 Total Assets 5,229,

14 As of March 31, 2011 Millions of Yen LIABILITIES AND NET ASSETS Current liabilities: Call money 1,009,300 Short-term borrowings 2,390,320 Current portion of Long-term borrowings 2,000 Commercial paper 7,500 Accrued expenses 429 Accrued income taxes 65 Allowance for bonuses (Employees) 369 Allowance for bonuses (Directors & Executive Officers) 50 Collateral money received for margin transactions 21,317 Collateral money received for securities lent 1,256,310 Deposit received 93 Collateral securities deposited 305,083 Securities borrowed 119,020 Securities lent opposite account 1,444 Advanced received profit 4 Other current liabilities 143 Total current liabilities 5,113,452 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 Asset retirement obligations Other non-current liabilities 2,000 2, , Total non-current liabilities 6,596 Total liabilities 5,120,048 Net assets: Shareholders equity Common stock Capital surplus Additional paid-in capital Retained earnings 10,000 5,181 5,181 90,047 Earned surplus reserve 2,278 Reserve for dividends 2,030 Special reserve 77,030 Retained earnings carried forward 8,709 (505) Total Shareholders equity 104,723 Treasury stock Valuation and translation adjustments Net unrealized gain on other securities Gain on revaluation of land 4, Total valuation and translation adjustments 5,006 Total net assets 109,730 Total liabilities and net assets 5,229,

15 NON-CONSOLIDATED STATEMENTS OF OPERATIONS For the year ended March 31, 2011 Millions of Yen Operating Revenues 17,639 Operating Expenses 8,977 Operating Profit 8,661 General and administrative expenses 6,524 Operating Income 2,137 Non-operating Revenues Interest received and dividends received 348 Miscellaneous revenues Non-operating Expenses Miscellaneous expenses 0 0 Recurring Income 2,553 Extraordinary Profit Gain on sale of non-current assets 1 Reversal of allowance for doubtful receivables Extraordinary Loss Loss on prior period adjustment 0 Loss on sale of non-current assets 28 Loss on retirement of non-current assets 4 32 Income before income taxes 2,553 Income Taxes Current 742 Deferred Net Income 1,

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 8,398 89,736 (504) 104,413 Changes arising during the year: Cash dividends (1,302) (1,302) (1,302) Net income 1,613 1,613 1,613 Purchase of treasury stock (1) (1) Net changes other than shareholders equity Total changes during the year (1) 310 Balance at March 31, ,000 5,181 2,278 2,030 77,030 8,709 90,047 (505) 104,723 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, , , ,979 Changes arising during the year: Cash dividends (1,302) Net income 1,613 Purchase of treasury stock (1) Net changes other than shareholders equity Total changes during the year Balance at March 31, , , ,