22nd of November, 2010
President and Director
The Sumitomo Trust and Banking Co., Ltd.
5-33, Kitahama 4-chome, Chuo-ku, Osaka
AN EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS AND
A CLASS SHAREHOLDERS’ MEETING OF ORDINARY SHAREHOLDERS
1. Date and time: | From 10:00 a.m. [Open at 9:00 a.m.] on Wednesday, the 22nd of December, 2010 | |
2. Place: | Conference room on the 12th floor of the Sumitomo Building located at 5-33, Kitahama 4-chome, Chuo-ku, Osaka |
3. | Subject matters of the Meetings: | |
[Extraordinary general meeting of shareholders] |
Matters to be resolved: |
Agenda Item No. 1: | Approval of the Share Exchange Agreement between the Company and Chuo Mitsui Trust Holdings, Inc. | |
Agenda Item No. 2: | Partial amendments to the Articles of Incorporation |
[Class shareholders’ meeting of ordinary shareholders] | ||
Matters to be resolved: |
Agenda Item: | Approval of the Share Exchange Agreement between the Company and Chuo Mitsui Trust Holdings, Inc. |
4. | Guidance notes on the exercise of voting rights | |
Please refer to the “Guidance Notes on the Exercise of Voting Rights” on pages 3-4 below for matters concerning the exercise of voting rights such as the exercise by electromagnetic method (the Internet or otherwise). | ||
5. | Request to shareholders | |
If you attend the Meetings in person, please submitthe Exercise of Voting Rights Formenclosed herewith to the reception desk at the entrance to the Meetings. | ||
If you attend the Meetings by proxy, please cause the proxy to submit a document certifying the authority of the proxy to act in that capacity, together with the Exercise of Voting Rights Form, to the reception desk at the entrance to the Meetings. (Please note that you may have only one (1) proxy and the proxy has to be one of the Company’s shareholders holding voting rights.) |
If an event occurs that gives rise to an obligation on the Company to change the contents of the Reference Material for the General Meeting of Shareholders or the Reference Material for the Class Shareholders’ Meeting by the day immediately preceding the date of the Meetings, we will announce such change by sending a written mail or by posting such change on our website: | ||
http://www.sumitomotrust.co.jp/IR/company/jp/kabunushi_html/sokai.html |
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1. | Exercise of voting rights in writing (by mailing the Exercise of Voting Rights Form) | |
Please indicate your approval or disapproval of each agenda item on the enclosed Exercise of Voting Rights Form and then send it back to us so that it reaches us by no later than 5:00 p.m. on Tuesday, the 21st of December, 2010, the day immediately preceding the date of the Meetings. | ||
2. | Exercise of voting rights by electromagnetic method (the Internet) |
(1) | Please access the website for exercising voting rights (http://www.webdk.net). Then, please register your approval or disapproval of each agenda item, by using the code for the exercise of voting rights and password described in the enclosed Exercise of Voting Rights Form and by following the directions on the screen. You may access and use the website for exercising voting rights through the Internet by using a cellular phone. |
* | You may also access the website for exercising voting rights by scanning the “QR code” set forth on the right with the bar-code scanner of your cellular phone. Please refer to the instruction manual of your cellular phone to check how to use your cellular phone to scan the “QR code.” | Image of “QR code” | ||||
(2) | Although it is acceptable to exercise voting rights through the Internet until 5:00 p.m. on Tuesday, the 21st of December, 2010, the day immediately preceding the date of the Meetings, please exercise your voting rights as soon as possible to assist us in compiling the results of the voting. | ||
(3) | If you exercise your voting rights twice, in writing and through the Internet, we will only accept the exercise of your voting rights through the Internet as effective. | ||
(4) | If you exercise your voting rights more than once through the Internet, or if you exercise your voting rights through the Internet by using both a personal computer and a cellular phone, we will only accept the last exercise of your voting rights as effective. | ||
(5) | Any access fees to internet service providers and any telecommunication fees to telecommunication carriers (such as phone charges) for the usage of the website for exercising voting rights shall be borne by the shareholders. | ||
(6) | The following system environment is required in order to use the website for exercising voting rights: |
(i) | Internet access; | ||
(ii) | If you exercise your voting rights by using a personal computer, Microsoft® Internet Explorer 6.0 or a later version, as the Internet browser software, and a hardware environment appropriate to use the above Internet browser software; and | ||
(iii) | If you exercise your voting rights by using a cellular phone, a type of cellular phone with the function allowing 128 bit SSL communications (encrypted communications). (Please note that since the website is only compatible with a type of cellular phone with the function allowing 128 bit SSL communications (encrypted communications) for security purposes, some types of cellular phones cannot be used to exercise your voting rights.) |
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(Microsoft is a trademark of Microsoft Corporation of the United States, registered in the United States and other countries.) |
Stock Transfer Agency Department]
<For questions concerning matters other than the exercise of voting rights>
0120-176-417 (Operating hours: Weekdays 9:00 a.m. to 5:00 p.m.), toll free
3. | Voting platform for institutional investors | |
In addition to the exercise of voting rights through the Internet described in 2. above, as a method for exercising voting rights by electromagnetic method at the Meetings, the electromagnetic voting platform for institutional investors operated by the joint venture (Investor Communications Japan Inc.) which was established by the Tokyo Stock Exchange, Inc., etc. is available for custodian banks and any other nominee-shareholders (including standing proxies) who have applied to use such platform in advance. |
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Agenda Item No. 1: | Approval of the Share Exchange Agreement between the Company and Chuo Mitsui Trust Holdings, Inc. |
Since the Company and Chuo Mitsui Trust Holdings, Inc. (“CMTH”), on August 24, 2010, reached a final agreement on the management integration of the two groups (the “Management Integration”), they entered into a statutory share exchange agreement (the “Share Exchange Agreement”) regarding a share exchange (the “Share Exchange”) in which the Company will become a wholly owned subsidiary in the share exchange and CMTH will become a wholly owning parent company in the share exchange and a management integration agreement, both of which will take effect on April 1, 2011. | ||
In addition, the Company and CMTH executed a “Memorandum on Share Exchange Agreement” (the “Memorandum”) on October 28, 2010, which shall constitute a part of the Share Exchange Agreement, pursuant to Article 9, Paragraph 2 of the Share Exchange Agreement. | ||
Consequently, we request approval of the Share Exchange Agreement and the Memorandum. | ||
The reasons for conducting the Share Exchange, the details of the Share Exchange Agreement and the Memorandum and other matters are as follows below. | ||
1. | Reasons for Conducting the Share Exchange | |
The financial crisis that started in 2008 has led to major structural changes in the global economy and society and has made clients face more advanced and complex issues in managing their funds and assets. Japan’s low birthrate and aging society, as well as the maturing of the economy, make it a pressing challenge to facilitate the flow of Japan’s abundant personal financial assets, pensions and other funds to promising fields and to realize sustainable economic growth. The Company and CMTH groups, both featuring high levels of expertise and broad scope of businesses, believe that they are entering an era where they should give full play to their strengths in order to address these various challenges related to funds and assets. | ||
Based on their shared understanding on the circumstances as stated above, the Company and CMTH have agreed to form “The Trust Bank,” a new trust bank group that, with a combination of significant expertise and comprehensive capabilities, will provide better and swifter comprehensive solutions to their clients than ever before, by combining their personnel, know-how and other managerial resources and fusing both groups’ strengths such as the Company group’s diversity and CMTH group’s agility; and have agreed to carry out the Management Integration. |
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Through the Management Integration, the new trust bank group will be able to further strengthen its high levels of expertise as a trust bank developed over the past decades by the Company and CMTH groups. At the same time, the Company and CMTH believe that the integration will reinforce and combine their client bases and branch networks, and give the new trust bank group the status and capabilities as one of Japan’s leading financial institutions, in addition to its leading role in the trust bank sector. | ||
The Management Integration will be accomplished through a holding company structure. In order to expedite the management integration, CMTH, which has already been structured as a holding company, will act as the holding company for the new trust bank group. Specifically, the Company will conduct the Share Exchange with CMTH, and CMTH will change its corporate name to Sumitomo Mitsui Trust Holdings, Inc. (“SMTH”) as of the effective date of the Share Exchange. On April 1, 2012, the new trust bank group will plan to integrate the three trust banks operating as its subsidiaries; namely the Company, The Chuo Mitsui Trust and Banking Company, Limited and Chuo Mitsui Asset Trust and Banking Company, Limited, into a single trust bank through a merger after it implements the Share Exchange, and seek to increase efficiency in systems and administrations, enhance redeployment of personnel, reorganize branch networks, and realize other streamlining effects. | ||
The Company believes the best way to serve the interests of each stakeholder, including shareholders, is to integrate the two specialized trust bank groups and realize sustainable growth as a financial institution with a new business model that creates distinct and high value-added services through the combination of banking, asset management and administration, and real estate businesses. | ||
2. | Details of the Share Exchange Agreement | |
Details of the share exchange agreement are set forth in Attachment 1, “Share Exchange Agreement (Copy),” and in Attachment 2, “Memorandum on Share Exchange Agreement (Copy).” | ||
The agenda items at the extraordinary general meeting of shareholders and the class shareholders’ meeting of CMTH regarding the election of directors and auditors, which are stipulated in Article 9, Paragraph 2 of the Share Exchange Agreement, are set forth on pages 112 to 116 as reference materials. | ||
3. | Matters Regarding the Reasonableness of the Exchange Consideration |
(1) | Matters Regarding the Total Amount of the Exchange Consideration and the Reasonableness of the Allotment | ||
A) | Ordinary Shares | ||
Upon the Share Exchange, 1.49 ordinary shares of SMTH (currently CMTH, the same shall apply hereinafter) will be allotted and delivered for each ordinary share of the Company. | |||
The number of the ordinary shares to be issued by SMTH upon the Share Exchange is 2,495,111,627 shares, provided that such number of ordinary shares is calculated based on the total number of the outstanding ordinary shares of the Company (1,675,128,546 shares) and treasury shares of the Company (556,984 shares) as of March 31, 2010, and the number of such ordinary shares to be issued by SMTH may be subject to change. | |||
In accordance with the applicable laws and regulations, the Company plans to cancel all of its treasury shares which will have been held by the Company by the time immediately preceding the time SMTH acquires all of the issued shares of the |
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Company (excluding those shares of the Company owned by SMTH) through the Share Exchange (including the treasury shares to be acquired by the Company through a purchase of shares in response to the exercise of dissenters’ appraisal right requesting for the purchase of shares owned by the dissenting shareholders in connection with the Share Exchange). | |||
(i) Basis for the Financial Analyses | |||
In order to support the respective efforts of the Company and CMTH to ensure the fairness of the exchange ratio of ordinary shares (the “Ordinary Share Exchange Ratio”), the Company has appointed UBS Securities Japan Ltd (“UBS”) and Daiwa Securities Capital Markets Co. Ltd. (“Daiwa”) as its financial advisors, and CMTH has appointed JPMorgan Securities Japan Co., Ltd. (“J.P. Morgan”) and Nomura Securities Co., Ltd. (“Nomura Securities”) as its financial advisors, all of which are independent from the Company and CMTH. | |||
An overview of the financial analyses relating to the Ordinary Share Exchange Ratio performed by UBS, Daiwa, J.P. Morgan and Nomura Securities are set forth in Attachment 3 “Overview of the Financial Analyses by Financial Advisors regarding the Exchange Ratio of Ordinary Shares.” The Company received written opinions (so-called “fairness opinions”) from UBS dated August 24, 2010, and from Daiwa dated August 23, 2010 to the effect that, as of such date, based upon and subject to various assumptions described in Attachment 3 “Overview of the Financial Analyses by Financial Advisors regarding the Exchange Ratio of Ordinary Shares” and certain other assumptions, the agreed upon Ordinary Share Exchange Ratio was fair, from a financial point of view, to the Company’s ordinary shareholders. | |||
CMTH received written opinions (so-called “fairness opinions”) from each of J.P. Morgan and Nomura Securities dated August 23, 2010 to the effect that, as of such date, based upon and subject to various assumptions described in Attachment 3, “Overview of the Financial Analyses by Financial Advisors regarding the Exchange Ratio of Ordinary Shares” and certain other assumptions, the agreed upon Ordinary Share Exchange Ratio was fair, from a financial point of view, to CMTH or CMTH’s ordinary shareholders. | |||
(ii) ��Background of the Financial Analyses | |||
The Company and CMTH conducted careful negotiations and discussions of the Ordinary Share Exchange Ratio, comprehensively taking into account factors such as the financial position, assets and future prospects of each party, with the Company referring to the financial analyses prepared by UBS and Daiwa, and with CMTH referring to the financial analyses prepared by J.P. Morgan and Nomura Securities. As a result of such negotiations and discussions, the Company and CMTH concluded on August 24, 2010 that the Ordinary Share Exchange Ratio set out in Article 2, Paragraph 1 of the Share Exchange Agreement was appropriate, and they agreed on such ratio. | |||
The Company has confirmed that, for the period up to October 28, 2010, there have been no material changes in the conditions on which the Ordinary Share Exchange Ratio in the Share Exchange was based. | |||
(iii) Relationships with their Financial Advisors | |||
None of UBS, Daiwa, J.P. Morgan or Nomura Securities constitutes a related party of either the Company or CMTH, and none of them has a material interest in the |
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Share Exchange to be noted herein. | |||
B) | Preferred Shares | ||
Upon the Share Exchange, SMTH will allot and deliver 1 share of the First Series of Class VII Preferred Shares of SMTH to each share of the First Series of Class II Preferred Shares of the Company. The terms and conditions set out in the terms of issuance of the First Series of Class VII Preferred Shares of SMTH will be as set forth in Exhibit 1 of Attachment 1, “Share Exchange Agreement (Copy),” which are substantially the same as those set out in the terms of issuance of the First Series of Class II Preferred Shares of the Company. | |||
The number of the First Series of Class VII Preferred Shares to be issued by SMTH upon the Share Exchange is 109,000,000 shares, provided that such number of class shares is calculated based on the total number of outstanding shares of the First Series of Class II Preferred Shares of the Company as of September 30, 2010 (109,000,000 shares) and the number of the First Series of Class VII Preferred Shares to be issued by SMTH may be subject to change. | |||
The Company and CMTH have agreed to set out substantially the same terms and conditions in the terms of issuance of the First Series of Class VII Preferred Shares to be newly issued by SMTH, as those set out in the terms of issuance of the First Series of Class II Preferred Shares of the Company, and that 1 share of the First Series of Class VII Preferred Shares of SMTH shall be allotted for each share of the First Series of Class II Preferred Shares issued by the Company, because, among other reasons, no market price exists for the First Series of Class II Preferred Shares of the Company unlike the ordinary shares, and because the First Series of Class II Preferred Shares of the Company are so-called “bond-type.” | |||
The agenda item to amend the Articles of Incorporation of CMTH, which is necessary for SMTH to issue the First Series of Class VII Preferred Shares, will be resolved at the extraordinary general meeting of shareholders and the class shareholders’ meeting of ordinary shareholders of CMTH, both of which will be held on December 22, 2010. | |||
(2) | Reasons for Selecting Ordinary Shares and the First Series of Class VII Preferred Shares of SMTH as Exchange Consideration | ||
A) | Ordinary Shares | ||
The Company and CMTH selected the ordinary shares of SMTH, which is a wholly owning parent company in the share exchange, as exchange consideration for the ordinary shares of the Company in the Share Exchange. | |||
The Company decided that the ordinary shares of SMTH are appropriate as exchange consideration in the Share Exchange, taking into account that (i) the ordinary shares of CMTH, which will become SMTH as of the effective date of the Share Exchange, are listed on the 1st section of the Tokyo Stock Exchange, Inc. (“TSE”), the 1st section of the Osaka Securities Exchange, Co., Ltd. (“OSE”) and the 1st section of the Nagoya Stock Exchange, Inc. (“NSE”), and have a large trading volume and a high liquidity, and therefore trading opportunities are secured, (ii) if shareholders who hold the Company’s ordinary shares receive the ordinary shares of SMTH as exchange consideration, the shareholders who hold the Company’s ordinary shares may enjoy the synergy generated by the Management Integration, or other benefits from the growth of the new trust bank group brought about by the Management Integration, and (iii) the capital policy, etc. of SMTH after the Share |
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Exchange. | |||
B) | Preferred Shares | ||
The Company and CMTH selected the First Series of Class VII Preferred Shares to be newly issued by SMTH, which is a wholly owning parent company in the share exchange, as exchange consideration for the First Series of Class II Preferred Shares issued by the Company in the Share Exchange. | |||
The Company decided that the First Series of Class VII Preferred Shares to be newly issued by SMTH, the terms of issuance of which contain substantially the same terms and conditions as those set out in the terms of issuance of the First Series of Class II Preferred Shares of the Company, are appropriate as exchange consideration for the First Series of Class II Preferred Shares of the Company in the Share Exchange, taking into account (i) the benefits to the shareholders who hold the First Series of Class II Preferred Shares of the Company, which are so-called “bond-type” preferred shares, (ii) the shareholder composition of SMTH after the Share Exchange, and (iii) the capital policy, etc. of SMTH after the Share Exchange. | |||
(3) | Matters Concerning the Reasonableness of the Amounts of Stated Capital and Reserves of SMTH | ||
The Company and CMTH determined that the respective amounts of increase in the stated capital and reserves of SMTH upon the Share Exchange shall be as follows: |
(i) The Amount of Stated Capital | 0 yen | |
(ii) The Amount of Capital Reserve | Amount determined separately by SMTH in accordance with Article 39, Paragraph 2 of the Ordinance on Company Accounting. | |
(iii) The Amount of Retained Earnings Reserve | 0 yen |
The respective amounts of the stated capital and of the reserves were determined within the range stipulated in the provision of Article 39 of the Ordinance on Company Accounting, with comprehensive consideration of the capital policy of SMTH and other circumstances and upon consultation between the Company and CMTH, and we believe them to be reasonable. |
4. | Matters for Reference Concerning the Exchange Consideration |
(1) | Provisions of Articles of Incorporation of CMTH | ||
The provisions of the Articles of Incorporation of CMTH are as is stated in Attachment 4, “Articles of Incorporation of Chuo Mitsui Trust Holdings, Inc.” The Articles of Incorporation stated in Attachment 4 are the details of the Articles of Incorporation of CMTH at present, and after the Share Exchange, they will be changed as is stated in Attachment 5, “Proposed Amendment to the Articles of Incorporation of Chuo Mitsui Trust Holdings, Inc.” at the extraordinary general meeting of shareholders and the class shareholders’ meeting of CMTH, both of which will be held on December 22, 2010, pursuant to the provision of Article 9, Paragraph 1 of the Share Exchange Agreement. |
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(2) | Matters Concerning the Method of Realization of the Exchange Consideration | ||
A) | Market on which the Exchange Consideration is traded |
(i) | Ordinary Shares Ordinary shares of CMTH are traded on the 1st section of TSE, the 1st section of OSE and the 1st section of NSE. | ||
(ii) | Preferred Shares Not Applicable. |
B) | Mediator, Broker or Agent for Trading of the Exchange Consideration |
(i) | Ordinary Shares Ordinary shares of CMTH are mediated, brokered, etc. for trading at each securities company, etc. across the country. | ||
(ii) | Preferred Shares Not Applicable. |
C) | Details of Limitations on Transfer or Other Dispositions in respect of the Exchange Consideration |
(i) | Ordinary Shares Not Applicable. | ||
(ii) | Preferred Shares Not Applicable. |
(3) | Matters Concerning Market Price of the Exchange Consideration | ||
A) | Ordinary Shares | ||
Price trends of the ordinary shares of CMTH on the 1st section of the TSE for the last six months are as follows. |
Month | May 2010 | June | July | August | September | October | ||||||||||||||||||||||||||
Highest Share Price (yen) | 356 | 348 | 336 | 318 | 299 | 315 | ||||||||||||||||||||||||||
Lowest Share Price (yen) | 313 | 311 | 290 | 296 | 275 | 273 | ||||||||||||||||||||||||||
The market price, trends thereof and other matters regarding the ordinary shares of CMTH can be seen in stock price information and chart display, etc., disclosed by TSE, at the following URL: | |||
http://www.tse.or.jp/ |
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B) | Preferred Shares | ||
Not Applicable. |
5. | Matters Concerning Financial Statements, etc. |
(1) | Details of Financial Statements, etc. for the Most Recent Fiscal Year (Ended March 2010) of CMTH As stated in Attachment 6. | ||
(2) | Details of Events that Occurred to CMTH and the Company After the End of the Most Recent Fiscal Year that Exert Material Effect on the Condition of Company Property |
(i) | CMTH Not Applicable. | ||
(ii) | The Company Not Applicable. |
6. | Matters Concerning the Resolution of this Agenda | ||
The resolution of this agenda shall lose its effect if the Share Exchange is cancelled or the Share Exchange Agreement ceases to be effective in accordance with the matters provided in Article 12 (Change of Terms and Conditions of Share Exchange and Cancellation of Share Exchange) or Article 13 (Validity of this Agreement) of the Share Exchange Agreement. |
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STB shall conduct a statutory share exchange (kabushiki kokan), in accordance with the provisions of this Agreement, through which CMTH will become a wholly owning parent company of STB and STB will become a wholly owned subsidiary of CMTH (the “Share Exchange”), and CMTH shall acquire all of the issued shares of STB (excluding the shares of STB owned by CMTH). |
1. | Upon the Share Exchange, CMTH shall deliver to common shareholders of STB (excluding CMTH) at the time immediately preceding the time CMTH acquires all of the issued shares of STB (excluding the shares of STB owned by CMTH) through the Share Exchange (the “Base Time”), in exchange for shares of STB common stock, the number of shares of CMTH common stock calculated by multiplying the total number of shares of STB common stock held by common shareholders of STB by 1.49. | |
2. | Upon the Share Exchange, CMTH shall deliver to holders of shares of the First Series of STB Class II Preferred Stock (“STB Preferred Stock”) entered or recorded on STB’s register of shareholders at the Base Time (“STB Preferred Shareholder”) (excluding CMTH), in exchange for shares of STB Preferred Stock, the same number of shares of the First Series of CMTH Class VII Preferred Stock (the terms of issuance of which are stated in Exhibit 1; “CMTH Preferred Stock”) as the total number of shares of STB Preferred Stock held by STB Preferred Shareholder. | |
3. | Upon the Share Exchange, CMTH shall allot shares of CMTH common stock to the common shareholders of STB at the Base Time (excluding CMTH), and such allotment shall be made at the ratio of 1.49 shares of CMTH common stock for each share of STB common stock held by such shareholders. | |
4. | Upon the Share Exchange, CMTH shall allot shares of CMTH Preferred Stock to STB Preferred Shareholder entered or recorded on STB’s register of shareholders at the Base Time (excluding CMTH), and such allotment shall be made at the ratio of one share of CMTH Preferred Stock for each share of STB Preferred Stock. |
The amount of increase in the stated capital and reserves of CMTH upon the Share |
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Exchange are as follows: |
(1) | Stated capital 0 yen | ||
(2) | Capital reserve Amount determined separately by CMTH in accordance with Article 39, Paragraph 2 of the Ordinance on Company Accounting. | ||
(3) | Retained earnings reserve 0 yen |
The date on which the Share Exchange takes effect (the “Effective Date”) shall be April 1, 2011; provided, however, that CMTH and STB may, upon negotiation and agreement with each other, change such date, if necessary, in light of the progress of procedures for the Share Exchange or for any other reason. |
1. | CMTH shall seek a resolution approving this Agreement at the extraordinary general meeting of shareholders and the class shareholders’ meeting of common shareholders of CMTH both scheduled to be held on December 22, 2010. | |
2. | STB shall seek a resolution approving this Agreement at the extraordinary general meeting of shareholders, the class shareholders’ meeting of common shareholders of STB and the class shareholders’ meeting of STB Preferred Shareholders each scheduled to be held on December 22, 2010; provided, however, that this will not apply if, pursuant to Article 319, Paragraph 1 of the Companies Act, as applied mutatis mutandis pursuant to Article 325 of the Companies Act, the approval of this Agreement at the class shareholders’ meeting of STB Preferred Shareholders is deemed to have been obtained. | |
3. | CMTH and STB may, upon negotiation and agreement with each other, change the scheduled dates of the shareholders’ meetings stated in the preceding two Paragraphs, if necessary, in light of the progress of procedures for the Share Exchanges or for any other reason. |
During the period after the date of execution of this Agreement and before the Effective Date, CMTH and STB shall manage and operate their respective businesses and assets with the due care of a prudent manager, and CMTH and STB shall negotiate and agree with each other before taking any action that could materially affect their assets or rights and obligations. |
1. | Each of CMTH and STB may, in accordance with their respective existing dividend |
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policies, make payments of dividends from surplus to the common shareholders or the registered stock pledgees with respect to shares of common stock entered or recorded on their respective final register of shareholders at the close of September 30, 2010 up to the following amount: |
(1) | 8 yen per share, 13,267,410,136 yen in the aggregate for CMTH; and | ||
(2) | 10 yen per share, 16,751,285,460 yen in the aggregate for STB. |
2. | STB may make payments of dividends from surplus to the STB Preferred Shareholders or the registered stock pledgees with respect to shares of STB Preferred Stock entered or recorded on the final register of shareholders at the close of September 30, 2010 up to the amount of 21.15 yen per share and 2,305,350,000 yen in the aggregate. | |
3. | Each of CMTH and STB may, in accordance with their respective existing dividend policies, make payments of dividends from surplus to the common shareholders or the registered stock pledgees with respect to shares of common stock entered or recorded on their respective final register of shareholders at the close of March 31, 2011 up to the amount calculated by adding the following amount to the amount calculated by subtracting the amount of the dividends from surplus paid in accordance with Paragraph 1 from the amount stated in Paragraph 1: |
(1) | 8 yen per share, 13,267,410,136 yen in the aggregate for CMTH; and | ||
(2) | 10 yen per share, 16,751,285,460 yen in the aggregate for STB. |
4. | STB may make payments of dividends from surplus to the STB Preferred Shareholders or the registered stock pledgees with respect to shares of STB Preferred Stock entered or recorded on the final register of shareholders at the close of March 31, 2011 up to the amount of 21.15 yen per share and 2,305,350,000 yen in the aggregate. | |
5. | If, after the execution of this Agreement, CMTH and STB intend to make payments of dividends from surplus on a record date prior to the Effective Date, CMTH and STB shall obtain the written consent of the other party, except as provided for in the preceding Paragraphs. |
STB shall cancel all of its treasury stock to be held by STB by the Base Time (including the treasury stock to be acquired by STB through a purchase of shares in response to the exercise of dissenters’ appraisal right requesting for the purchase of shares owned by the dissenting shareholders in connection with the Share Exchange) in accordance with laws and regulations. |
1. | CMTH shall, at the extraordinary general meeting of shareholders provided for in Article 5, Paragraph 1 (including the class shareholders’ meeting, which is provided for in Article 5, Paragraph 1, if required by laws and regulations), seek a resolution approving the amendments to its Articles of Incorporation to (i) change its trade name to MITSUI SUMITOMO TRUST HOLDINGS KABUSHIKI KAISHA (which shall be written as Sumitomo Mitsui Trust Holdings, Inc., in English); (ii) change the location of its head office to Chiyoda-ku, Tokyo; (iii) add the contents of CMTH Preferred Stock; |
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and (iv) make other changes as agreed by and between CMTH and STB, which amendments shall be made as of the Effective Date, on the condition that the Share Exchange takes effect. | ||
2. | CMTH and STB shall separately negotiate and agree on the composition of officers of CMTH as of the Effective Date. The number of candidates for directors to be nominated by CMTH shall be the same as the number of candidates for directors to be nominated by STB. The number of candidates for corporate auditors to be nominated by CMTH shall be the same as the number of candidates for corporate auditors to be nominated by STB. CMTH shall, at the extraordinary general meeting of shareholders provided for in Article 5, Paragraph 1, seek a resolution approving the election, as of the Effective Date, on the condition that the Share Exchange takes effect, of the candidates to be newly elected as directors and corporate auditors of CMTH based on the above-mentioned agreement. In addition, CMTH and STB shall respectively conduct any and all acts to be required to make the composition of officers of CMTH as of the Effective Date be the composition based on the above-mentioned agreement. |
STB shall, at the extraordinary general meeting of shareholders provided for in Article 5, Paragraph 2, seek a resolution approving the amendments to its Articles of Incorporation to delete, as of March 30, 2011, the provisions of the Articles of Incorporation with respect to the record date of ordinary general meetings of shareholders of STB on the condition that, prior to March 30, 2011, this Agreement has not become invalid and the Share Exchange has not been canceled. |
Prior to the Effective Date, CMTH shall, at a meeting of the Board of Directors of CMTH, make a resolution to the effect that, on the condition that the Share Exchange takes effect, CMTH shall, in accordance with Article 124, Paragraph 4 of the Companies Act, grant voting rights to be exercised at the ordinary general meeting of shareholders of CMTH scheduled to be held in June 2011 to the common shareholders of STB to whom shares of common stock of CMTH are allocated and delivered upon the Share Exchange; provided, however, that this will not apply if the agenda item presented to achieve the amendments to the Articles of Incorporation provided for in Article 10 is not approved at the extraordinary general meeting of shareholders of STB provided for in Article 5, Paragraph 2. |
1. | If, during the period after the date of execution of this Agreement and before the Effective Date, (i) there is a material change in the conditions of assets or business operations or rights and obligations of CMTH or STB, (ii) a situation arises or is discovered that materially obstructs the implementation of the Share Exchange, or (iii) some other reason that makes it difficult to achieve the purpose of this Agreement, CMTH and STB may, upon negotiation and agreement with each other, agree to change the terms and conditions of the Share Exchange and the contents of this Agreement or cancel the Share Exchange. |
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2. | If, at the general meeting of shareholders of CMTH or STB provided for in Article 5, all or part of the resolutions provided for in Article 9 and Article 10 are not adopted, either party to this Agreement may cancel the Share Exchange after negotiation with the other party. |
This Agreement shall cease to have any effect if this Agreement is not approved at the general meeting of shareholders of CMTH or STB provided for in Article 5, or if any of the approvals from regulatory authorities, which are required by laws and regulations, for the implementation of the Share Exchange, is not obtained. |
In addition to the matters provided for in this Agreement, any matters necessary with respect to the Share Exchange shall be determined upon negotiation and agreement between CMTH and STB in accordance with the purpose of this Agreement. |
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CMTH: | CHUO MITSUI TRUST HOLDINGS, INC. | |||
33-1, Shiba 3-chome, Minato-ku, Tokyo | ||||
President: Kazuo Tanabe | [Seal] | |||
STB: | THE SUMITOMO TRUST AND BANKING COMPANY, LIMITED. | |||
5-33, Kitahama 4-chome, Chuo-ku, Osaka | ||||
President & CEO: Hitoshi Tsunekage | [Seal] |
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First Series of Class VII Preferred Stock of
Sumitomo Mitsui Trust Holdings, Inc.
1. | Type of Stock |
2. | Preferred Dividends |
(2) | If the amount of cash dividends from surplus paid to the Preferred Shareholders or the Registered Preferred Stock Pledgees is less than the amount of the Preferred Dividends in any fiscal year, such deficiency shall not be carried over for accumulation to subsequent fiscal years. | |
(3) | The Company shall not pay dividends in excess of the amount of the Preferred Dividends to the Preferred Shareholders or the Registered Preferred Stock Pledgees. |
3. | Preferred Interim Dividends |
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4. | Extraordinary Preferred Dividends |
5. | Distribution of Residual Assets |
(1) | In the case of distributions of residual assets, the Company shall pay 1,000 Japanese Yen per share of the Preferred Stock to the Preferred Shareholders or the Registered Preferred Stock Pledgees, in preference to the Common Shareholders or the Registered Common Stock Pledgees. | |
(2) | Other than a distribution provided for in the preceding Item, no distribution of residual assets shall be made to the Preferred Shareholders or the Registered Preferred Stock Pledgees. |
6. | Consolidations or Splits of Shares of Preferred Stock; Allotment of Offered Shares, Etc. |
(1) | Unless otherwise provided for by laws and ordinances, no consolidations or splits of shares shall be made with respect to shares of the Preferred Stock. | |
(2) | The Company shall not give the Preferred Shareholders any rights to receive an allotment of offered shares or stock acquisition rights. The Company shall not allot any shares of stock or stock acquisition rights to the Preferred Shareholders without consideration. |
7. | Provisions for the Acquisition of Shares of the Preferred Stock for Monetary Consideration |
(1) | The Company may, on the date separately provided for by the Board of Directors, which is on or after October 1, 2014 (the “Acquisition Date”), acquire all or part of the shares of the Preferred Stock in exchange for cash in the amount obtained by |
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adding 1,000 yen per share to the amount equivalent to the accrued dividend from surplus (which is obtained by multiplying (i) (a) the number of days included in the period commencing on and including the first day of the fiscal year that includes the Acquisition Date and ending on and including the day immediately preceding the Acquisition Date, divided by (b) 365, by (ii) the amount of the Preferred Dividends (calculation for an amount less than one (1) yen shall be made to the third (3rd) decimal places and shall be rounded off to two (2) decimal places)); provided, however, that if all or part of the Preferred Interim Dividends or all or part of the Extraordinary Preferred Dividends have been paid, during the fiscal year that includes the Acquisition Date, based on a record date that is on or prior to the day immediately preceding the Acquisition Date, the amount so paid shall be subtracted from the amount of accrued dividend from surplus. | ||
(2) | In the event that a part of the shares of the Preferred Stock is acquired in accordance with the preceding Item, the shares of preferred stock to be acquired shall be decided by lottery or by proportional allotment. |
8. | Voting Rights |
9. | Order of Priority |
10. | Period of Limitations for Dividends |
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Article 1 | Composition of Officers of CMTH as of the Effective Date |
(1) | Directors | |||
Chairman | Hitoshi Tsunekage | |||
President | Kazuo Tanabe | |||
Director | Jun Okuno | |||
Director | Kiyoshi Mukohara | |||
Director | Kunitaro Kitamura | |||
Director | Akio Otsuka | |||
Director | Nobuo Iwasaki | |||
Director | Junichi Sayato | |||
Director | Shinji Ochiai | |||
Director | Tetsuo Ohkubo | |||
(2) | Corporate auditors | |||
Auditor | Teruhiko Sugita | |||
Auditor | Tetsuo Amano | |||
External auditor | Hitoshi Maeda | |||
External auditor | Hiroyuki Nakanishi | |||
External auditor | Toshio Hoshino | |||
External auditor | Yasuhiko Takano |
Article 2 | Continuation of Composition of Officers |
Article 3 | Relationship with the Share Exchange Agreement |
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CMTH: | Chuo Mitsui Trust Holdings, Inc. | ||
33-1, Shiba 3-chome, Minato-ku, Tokyo | |||
President: Kazuo Tanabe | |||
STB: | The Sumitomo Trust and Banking Company, Limited | ||
5-33, Kitahama 4-chome, Chuo-ku, Osaka | |||
President & CEO: Hitoshi Tsunekage |
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regarding the Exchange Ratio of Ordinary Shares
UBS, as part of the process of preparing its written opinion referred to below, performed an analysis of historical trading ratios, an analysis of selected publicly traded Japanese major banks, a contribution analysis and a discounted cashflow (“DCF”) analysis.In its historical trading ratio analysis, UBS derived the ratio for the historical share price of the Company to the historical share price of CMTH (“historical trading ratio”) based on the closing share price of each company on August 17, 2010 (the “Base Date”), which is one day prior to a press leak about the proposed exchange ratio, and the average daily closing share prices of each company for the one-week, one-month, three-month and six-month periods up to and including the Base Date. In its DCF analysis, UBS calculated a range of implied equity values for the Company, for CMTH, and for the synergies projected to result from the Management Integration. Among other information that UBS derived from its DCF analysis, UBS derived a range of implied Common Share Exchange Ratio (“Implied Exchange Ratios”) using these implied equity values. The DCF analysis was conducted based on projections of future cash flow, calculated as net income to common stock plus capital adjustments to maintain required capital, using financial forecasts and estimates prepared by the managements of both CMTH and the Company that UBS was directed to use by the board of directors of the Company (the “Company’s Board”). A summary of the historical trading ratio analysis is presented in the table below, together with the range of Implied Exchange Ratios derived from the DCF analysis. Although UBS considered all of the analyses it performed, UBS did not derive a range of Implied Exchange Ratios based on the analysis of selected publicly traded Japanese major banks or the contribution analysis.
Analysis Method | Range of Historical Trading Ratios / Range of Implied Exchange Ratios | |||||||||
Historical Trading Ratio Analysis | ||||||||||
Base Date | 1.48 | |||||||||
1 week | 1.50 | |||||||||
1 month | 1.52 | |||||||||
3 month | 1.49 | |||||||||
6 month | 1.53 | |||||||||
DCF Analysis | 1.06 — 1.68 | |||||||||
UBS has acted as financial advisor to the Company in connection with the Management Integration. UBS will receive a fee for its services, a portion of which is contingent upon consummation of the Share Exchange and a further portion of which is contingent upon the consummation of a merger of the Company, Chuo Mitsui Asset Trust and Banking Company, Limited and The Chuo Mitsui Trust and Banking Company, Limited. The Company has also agreed to indemnify UBS for certain liabilities arising out of its engagement. In the past, UBS and its affiliates have provided investment banking services to the Company and CMTH and their respective affiliates unrelated to the proposed Management Integration, for which UBS and its affiliates received compensation, including having acted as a financial advisor to the Company on (i) the merger between Sumitomo Trust Leasing Co., Ltd, a wholly owned subsidiary of the Company, and
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Daiwa performed a stock price analysis and a discounted cash flow (“DCF”) analysis. The results of the analyses are shown in the table below. Each of the Common Share Exchange Ratio ranges represents the range of the number of shares of SMTH (currently CMTH) common stock that are to be allotted for each share of the Company’s common stock, based on the result of the relevant analysis.
Analysis Method | Range of the Company’s Common Share Exchange Ratios | |||||||
1. | Stock Price Analysis | 1.48 | ~ | 1.53 | ||||
Reference date | 1.48 | |||||||
1 month before the reference date | 1.52 | |||||||
3 months before the reference date | 1.49 | |||||||
6 months before the reference date | 1.53 | |||||||
2. | DCF Analysis | 1.36 | ~ | 1.55 | ||||
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J.P. Morgan performed an average share price analysis, as well as a dividend discount model (“DDM”) analysis based on the projections for CMTH and the Company furnished to J.P. Morgan by CMTH and prepared by the managements of CMTH and the Company, and a contribution analysis based on publicly available information and the projections for CMTH and the Company. The calculated ranges of the Common Share Exchange Ratio based on each method are as indicated below. The calculated ranges of the Common Share Exchange Ratio below show the range of the number of shares of the SMTH (currently CMTH) common stock to be allotted for each share of common stock of the Company.
Analysis Method | Calculated Range of Common Share Exchange Ratio | |||||||
1 | Average Share Price Analysis | 1.48 ~ 1.52 | ||||||
2 | DDM Analysis | 1.45 ~ 1.53 | ||||||
3 | Contribution Analysis | 1.36 ~ 1.59 | ||||||
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J.P. Morgan also assumed that the Share Exchange and the other transactions contemplated by the agreement which includes various terms of the Management Integration (the “Agreement”) would qualify as a tax-free reorganization for Japanese income tax purposes, and would be consummated as described in the Agreement, and that the definitive Agreement would not differ in any material respects from the draft thereof furnished to J.P. Morgan. J.P. Morgan also assumed that the representations and warranties made by CMTH and the Company in the Agreement and any related agreements were and would be true and correct in all respects material to its analysis, and that CMTH would have no exposure under any indemnification obligations contained within the Agreement or any related agreements in any amount material to its analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to CMTH with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Share Exchange would be obtained without any adverse effect on CMTH or the Company or on the contemplated benefits of the Share Exchange.
Nomura Securities performed average market price analysis, comparable peer company analysis, dividend discount model analysis (“DDM Analysis”) and contribution analysis calculations with respect to CMTH and the Company. The calculation results based on each analysis are briefly summarized as follows. The calculated ranges of the Common Share Exchange Ratio provided below show the ranges of the number of shares of SMTH (currently CMTH) common stock that are to be allotted for each share of the Company’s common stock.
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Analysis Method | Calculated Range of Common Share Exchange Ratio | |||||||
1 | Average Market Price Analysis | 1.48 ~ 1.53 | ||||||
2 | Comparable Peer Company Analysis | 1.21 ~ 1.59 | ||||||
3 | DDM Analysis | 1.38 ~ 1.58 | ||||||
4 | Contribution Analysis | 1.12 ~ 1.68 | ||||||
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Article 1. | (Trade Name) |
Article 2. | (Purposes) |
1. | Management of banks, trust banks, specialized securities companies, insurance companies and other companies that are permitted to become, or to be established as, subsidiaries under the Banking Act; and |
2. | Any business incidental to the business mentioned in the preceding Item. |
Article 3. | (Location of Head Office) |
Article 4. | (Governing Bodies) |
1. | Board of Directors; | ||
2. | Auditors; | ||
3. | Board of Auditors; and | ||
4. | Accounting Auditor. |
Article 5. | (Method of Public Notice) |
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Article 6. | (Total number of Shares Authorized to be Issued) |
Class V preferred stock: 62,500,000 shares
Class VI preferred stock: 62,500,000 shares
Article 7. | (Number of Shares Constituting One Unit) |
Article 8. | (Purchase of Shares Constituting Less Than One Unit) |
Article 9. | (Record Date) |
Article 10. | (Administrator of Shareholder Registry) |
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Article 11. | (Share Handling Regulations) |
Article 12. | (Preferred Dividends) |
Class V preferred stock: | For each share of Class V preferred stock, the amount obtained by multiplying the subscription price by the dividend rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the dividend rate shall be a fixed dividend rate, a floating dividend rate or a combination of both. The maximum fixed dividend rate shall be ten percent (10%) per annum and the maximum floating dividend rate per annum shall be the rate obtained by adding five percent (5%) to the interest rate benchmarks generally used for issuance of securities (LIBOR, TIBOR, or Swap Rate, etc.). The maximum subscription price for each share of Class V preferred stock shall be JPY 1,600. | |
Class VI preferred stock: | For each share of Class VI preferred stock, the amount obtained by multiplying the subscription price by the dividend rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the dividend rate shall be a fixed dividend rate, a floating dividend rate, or a combination of both. The maximum fixed dividend rate shall be ten |
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percent (10%) per annum, and the maximum floating dividend rate per annum shall be the rate obtained by adding five percent (5%) to the interest rate benchmarks generally used for issuance of securities (LIBOR, TIBOR, or Swap Rate, etc.). The maximum subscription price for each share of Class VI preferred stock shall be JPY 1,600. |
Article 13. | (Preferred Interim Dividends) |
Article 14. | (Distribution of Residual Assets) |
Class V preferred stock: | For each share of Class V preferred stock, the amount obtained by multiplying the subscription price by the rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the maximum rate shall be one hundred and twenty percent (120%) and the minimum rate shall be eighty percent (80%). | |
Class VI preferred stock: | For each share of Class VI preferred stock, the amount obtained by multiplying the subscription price by the rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the maximum rate shall be one hundred and twenty percent (120%) and the minimum rate shall be eighty percent (80%). |
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Article 15. | (Voting Rights) |
Article 16. | (Consolidation or Splits of Shares; Allotment of Offered Shares, etc.) |
Article 17. | (Provisions for Acquisition) |
Article 18. | (Order of Priority) |
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Article 19. | (Convocation) |
Article 20. | (Record Date for Exercise of Voting Rights at Ordinary General Meetings of Shareholders) |
Article 21. | (Person Authorized to Convene Meetings and Chairman Thereof) |
Article 22. | (Disclosure by Internet of Reference Documents, etc. for General Meetings of Shareholders and Deemed Provision) |
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Article 23. | (Method of Resolutions) |
Article 24. | (Exercise of Voting Rights by Proxy) |
Article 25. | (Minutes of General Meetings of Shareholders) |
Article 26. | (Class Shareholders Meetings) |
Article 27. | (Number of Directors) |
Article 28. | (Election or Removal of Directors) |
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Article 29. | (Term of Office of Directors) |
Article 30. | (Representative Director) |
Article 31. | (Chairman of the Board, President, Deputy President, Senior Managing Director and Managing Director) |
(1) | The Chairman of the Board shall supervise the Board of Directors. | ||
(2) | The President shall execute the business of the Company in accordance with the resolutions of the Board of Directors. | ||
(3) | The Deputy President(s) shall assist the President to execute the business of the Company and shall act in his/her place in accordance with the order previously determined, in case the President is unable to act. | ||
(4) | The Senior Managing Director(s) shall assist the President and the Deputy President(s) to execute the business of the Company and shall act in their place in the order previously determined, in case all of the President and the Deputy President(s) are unable to act. | ||
(5) | The Managing Director(s) shall assist the President, the Deputy President(s) and the Senior Managing Director(s) to execute the business of the Company and shall |
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act in their place in the order previously determined, in case the President, the Deputy President(s) and the Senior Managing Director(s) are all unable to act. |
Article 32. | (Convocation of Meetings of the Board of Directors) |
Article 33. | (Method of Resolutions) |
Article 34. | (Minutes of Meetings of the Board of Directors) |
Article 35. | (Regulations of the Board of Directors) |
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Article 36. | (Number of Auditors) |
Article 37. | (Election or Removal of Auditors) |
Article 38. | (Term of Office of Auditors) |
Article 39. | (Full-time Auditors) |
Article 40. | (Convocation of Meetings of the Board of Auditors) |
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Article 41. | (Method of Resolutions) |
Article 42. | (Minutes of Meetings of the Board of Auditors) |
Article 43. | (Regulations of the Board of Auditors) |
Article 44. | (Limitation of Liability Agreement with Outside Auditors) |
Article 45. | (Election of Accounting Auditor) |
Article 46. | (Term of Office of Accounting Auditor) |
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Article 47. | (Fiscal Year) |
Article 48. | (Acquisition of Own Shares) |
Article 49. | (Record Date for Payment of Dividends from Surplus) |
Article 50. | (Interim Dividends) |
Article 51. | (Period of Limitations for Dividends) |
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Agendum 1, which is contained in the description below, refers to the agenda item regarding the approval of the Share Exchange and the Memorandum.
1. | Purpose for Proposal | |
After Agendum 1 is approved in its original form and after the Share Exchange Agreement is approved at (i) the extraordinary general meeting of shareholders of STB, (ii) the class shareholders meeting of STB common shareholders and (iii) the class shareholders meeting of holders of the First Series of STB Class II Preferred Stocks, scheduled to be held on December 22, 2010, a new trust bank group will be established on the effective date of the Share Exchange between the Company and STB. Upon the establishment of this new trust bank group, the Company will make the necessary changes to the Articles of Incorporation with respect to the following matters. | ||
The resolution relating to the proposal will become effective at the time the Share Exchange becomes effective (the “Effective Time of the Share Exchange”) subject to the Share Exchange becoming effective. |
(i) | Trade Name (Article 1 of the Amended Articles of Incorporation) Upon the Management Integration, the Company will change the trade name to “Sumitomo Mitsui Trust Holdings, Inc.” | ||
(ii) | Location of Head Office (Article 3 of the Amended Articles of Incorporation) Upon the Management Integration, the Company will change the location of the head office to Chiyoda-ku, Tokyo. | ||
(iii) | Method of Public Notice (Article 5 of the Amended Articles of Incorporation) The Company will set forth the method of public notice if the Company is unable to issue an electronic public notice due to an accident or any other unavoidable reason, “by placing them in the Nihon Keizai Shimbun,” and will delete the wording that limits the publishing place. | ||
(iv) | Total number of Shares Authorized to be Issued and Total number of Shares of Class Authorized to be Issued (Article 6 of the Amended Articles of Incorporation) Upon the Management Integration, the Company will increase the total number of shares authorized to be issued and the total number of shares of each class |
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authorized to be issued, and make other necessary changes to the Articles of Incorporation. |
(v) | Provisions relating to Preferred Stock (Article 6, 12, 13, 14, 15, 18, 19, 20, 21 and 29 of the Amended Articles of Incorporation) Upon the Management Integration, the Company will add provisions corresponding to the provisions of the Articles of Incorporation of STB relating to the Preferred Stock of STB, and make other necessary changes to the Articles of Incorporation. | ||
(vi) | Deputy Chairman of the Board (Article 34 of the Amended Articles of Incorporation) To clarify which Director will assist the Chairman of the Board, the Company will add the provision relating to the election of the Deputy Chairman(s) of the Board. | ||
(vii) | Standing Auditors (Article 42 of the Amended Articles of Incorporation) To develop the auditing system, the Company will add the provision relating to the election of the Standing Auditors. | ||
(viii) | Other than above, the Company will make other necessary changes throughout the Articles of Incorporation, such as revising the number of the articles cited and moving down the number of the articles. |
2. | Details of the Amendments to the Articles of Incorporation | |
The details of the amendments are as follows: |
Current Articles of Incorporation | Proposed Amendment | ||||
Article 1 (Trade Name) | Article 1 (Trade Name) | ||||
The name of the Company shall be CHUO MITSUI TRUST HOLDINGS KABUSHIKI KAISHA, which shall be written as Chuo Mitsui Trust Holdings, Inc., in English. | The name of the Company shall be MITSUI SUMITOMO TRUST HOLDINGS KABUSHIKI KAISHA, which shall be written as Sumitomo Mitsui Trust Holdings, Inc., in English. | ||||
Article 2 | Article 2 | ||||
<Provisions omitted> | <No Changes> | ||||
Article 3 (Location of Head Office) | Article 3 (Location of Head Office) | ||||
The Company shall have its head office in Minato-ku, Tokyo. | The Company shall have its head office in Chiyoda-ku, Tokyo. | ||||
Article 4 | Article 4 | ||||
<Provisions omitted> | <No Changes> | ||||
Article 5 (Method of Public Notice) | Article 5 (Method of Public Notice) | ||||
Public notices given by the Company shall be electronic public notices; | Public notices given by the Company shall be electronic public notices; provided, | ||||
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Current Articles of Incorporation | Proposed Amendment | ||||
provided, however, that if the Company is unable to issue an electronic public notice due to an accident or any other unavoidable reason, public notices of the Company shall be made by placing them in the Nihon Keizai Shimbun published in Tokyo. | however, that if the Company is unable to issue an electronic public notice due to an accident or any other unavoidable reason, public notices of the Company shall be made by placing them in the Nihon Keizai Shimbun. | ||||
Article 6 (Total number of Shares Authorized to be Issued) | Article 6 (Total number of Shares Authorized to be Issued) | ||||
The total number of shares authorized to be issued by the Company shall be four billion one hundred and ninety-three million three hundred and thirty-two thousand four hundred and thirty-six (4,193,332,436) shares, the detail of which shall be as set forth below. | The total number of shares authorized to be issued by the Company shall be nine billion and one hundred million (9,100,000,000) shares, and the total number of shares of each class authorized to be issued shall be as set forth below; provided, however, that (i) the total number of shares authorized to be issued with respect to the First through Fourth series of Class VII preferred stock (hereinafter collectively referred to as “Class VII Preferred Stock”) shall not exceed two hundred million (200,000,000) shares in total, (ii) the total number of shares authorized to be issued with respect to the First through Fourth series of Class VIII preferred stock (hereinafter collectively referred to as “Class VIII Preferred Stock”) shall not exceed one hundred million (100,000,000) shares in total, and (iii) the total number of shares authorized to be issued with respect to the First through Fourth series of Class IX preferred stock (hereinafter collectively referred to as “Class IX Preferred Stock”) shall not exceed one hundred million (100,000,000) shares in total (hereinafter, Class V preferred stock, Class VI preferred stock, Class VII Preferred Stock, Class VIII Preferred Stock and Class IX Preferred Stock shall collectively be referred to as “Preferred Stock”). | ||||
Common stock: 4,068,332,436 shares | Common stock: 8,500,000,000 shares | ||||
Class V preferred stock: 62,500,000 shares | Class V preferred stock: 100,000,000 shares | ||||
Class VI preferred stock: 62,500,000 shares | Class VI preferred stock: 100,000,000 shares | ||||
First series of Class VII preferred stock: 200,000,000 shares | |||||
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Current Articles of Incorporation | Proposed Amendment | ||||
Second series of Class VII preferred stock: 200,000,000 shares | |||||
Third series of Class VII preferred stock: 200,000,000 shares | |||||
Fourth series of Class VII preferred stock: 200,000,000 shares | |||||
First series of Class VIII preferred stock: 100,000,000 shares | |||||
Second series of Class VIII preferred stock: 100,000,000 shares | |||||
Third series of Class VIII preferred stock: 100,000,000 shares | |||||
Fourth series of Class VIII preferred stock: 100,000,000 shares | |||||
First series of Class IX preferred stock: 100,000,000 shares | |||||
Second series of Class IX preferred stock: 100,000,000 shares | |||||
Third series of Class IX preferred stock: 100,000,000 shares | |||||
Fourth series of Class IX preferred stock: 100,000,000 shares | |||||
Article 7-Article 11 | Article 7-Article 11 | ||||
<Provisions omitted> | <No Changes> | ||||
Article 12 (Preferred Dividends) | Article 12 (Preferred Dividends) | ||||
1. In the case of payment of dividends from surplus as provided for in Article 49, Paragraph 1 hereof, the Company shall pay to the holders of shares of preferred stock (hereinafter referred to as the “Preferred Shareholders”) or registered stock pledgees with respect to shares of preferred stock (hereinafter referred to as the “Registered Preferred Stock Pledgees”), in preference to the holders of shares of common stock (hereinafter referred to as the “Common Shareholders”) or registered stock pledges with respect to shares of common stock (hereinafter referred to as the “Registered Common Stock Pledgees”) cash dividends from surplus in an amount as provided below (hereinafter referred to as the “Preferred Dividends”); provided, however, that if all or part of the Preferred Interim Dividends as provided for in the next Article or preferred | 1. In the case of payment of dividends from surplus as provided for in Article 52, Paragraph 1 hereof, the Company shall pay to the holders of shares of Preferred Stock (hereinafter referred to as the “Preferred Shareholders”) or registered stock pledgees with respect to shares of Preferred Stock (hereinafter referred to as the “Registered Preferred Stock Pledgees”), in preference to the holders of shares of common stock (hereinafter referred to as the “Common Shareholders”) or registered stock pledgees with respect to shares of common stock (hereinafter referred to as the “Registered Common Stock Pledgees”) cash dividends from surplus in an amount as provided below (hereinafter referred to as the “Preferred Dividends”); provided, however, that if all or part of the Preferred Interim | ||||
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Current Articles of Incorporation | Proposed Amendment | ||||
dividends paid from surplus as provided for in Article 49, Paragraph 2 have been paid at the record date belonging to the fiscal year which includes the dividend record date, the amount so paid shall be subtracted from the Preferred Dividends: | Dividends as provided for in the next Article or all or part of the Extraordinary Preferred Dividends as provided for in Article 14 have been paid at the record date belonging to the fiscal year which includes the dividend record date, the amount so paid shall be subtracted from the Preferred Dividends: | ||||
Class V preferred stock: For each share of Class V preferred stock, the amount obtained by multiplying the subscription price by the dividend rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the dividend rate shall be a fixed dividend rate, a floating dividend rate or a combination of both. The maximum fixed dividend rate shall be ten percent (10%) per annum and the maximum floating dividend rate per annum shall be the rate obtained by adding five percent (5%) to the interest rate benchmarks generally used for issuance of securities (LIBOR, TIBOR, or Swap Rate, etc.). The maximum subscription price for each share of Class V preferred stock shall be JPY 1,600. | Class V preferred stock: For each share of Class V preferred stock, the amount obtained by multiplying the subscription price by the dividend rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the dividend rate shall be a fixed dividend rate, a floating dividend rate or a combination of both. The maximum fixed dividend rate shall be ten percent (10%) per annum and the maximum floating dividend rate per annum shall be the rate obtained by adding five percent (5%) to the interest rate benchmarks generally used for issuance of securities (LIBOR, TIBOR, or Swap Rate, etc.). | ||||
Class VI preferred stock: For each share of Class VI preferred stock, the amount obtained by multiplying the subscription price by the dividend rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the dividend rate shall be a fixed dividend rate, a floating dividend rate, or a combination of both. The maximum fixed dividend rate shall be ten percent (10%) per annum, and the maximum floating dividend rate per annum shall be the rate obtained by adding five percent (5%) to the interest rate benchmarks generally used for issuance of securities (LIBOR, TIBOR, or Swap Rate, etc.). The maximum subscription price for each share of Class VI preferred stock shall be | Class VI preferred stock: For each share of Class VI preferred stock, the amount obtained by multiplying the subscription price by the dividend rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the dividend rate shall be a fixed dividend rate, a floating dividend rate, or a combination of both. The maximum fixed dividend rate shall be ten percent (10%) per annum, and the maximum floating dividend rate per annum shall be the rate obtained by adding five percent (5%) to the interest rate benchmarks generally used for issuance of securities (LIBOR, TIBOR, or Swap Rate, etc.). | ||||
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Current Articles of Incorporation | Proposed Amendment | ||||
JPY 1,600. | |||||
First series of Class VII preferred stock: For each share of the First series of Class VII preferred stock, 42 yen and 30 sen per annum. | |||||
Second through Fourth series of Class VII preferred stock: For each share of the Second through Fourth series of Class VII preferred stock, the amount to be determined by a resolution of the Board of Directors prior to the issuance, up to one hundred and fifty (150) yen per annum. | |||||
Each series of Class VIII Preferred Stock: For each share of each series of Class VIII Preferred Stock, the amount to be determined by a resolution of the Board of Directors prior to the issuance, up to one hundred (100) yen per annum. | |||||
Each series of Class IX Preferred Stock: For each share of each series of Class IX Preferred Stock, the amount to be determined by a resolution of the Board of Directors prior to the issuance, up to one hundred (100) yen per annum. | |||||
2. If the amount of dividends from surplus paid to the Preferred Shareholders or the Registered Preferred Stock Pledgees is less than the amount of the Preferred Dividends in any fiscal year, such deficiency shall not be carried over for accumulation to the subsequent fiscal years. | 2. If the amount of dividends from surplus paid to the Preferred Shareholders or the Registered Preferred Stock Pledgees is less than the amount of the Preferred Dividends in any fiscal year, such deficiency shall not be carried over for accumulation to the subsequent fiscal years. | ||||
3. The Company shall not pay dividends in excess of the amount of the Preferred Dividends to the Preferred Shareholders or the Registered Preferred Stock Pledgees. | 3. The Company shall not pay dividends in excess of the amount of the Preferred Dividends to the Preferred Shareholders or the Registered Preferred Stock Pledgees. | ||||
Article 13 (Preferred Interim Dividends) | Article 13 (Preferred Interim Dividends) | ||||
In the case of payment of interim dividends as provided for in Article 50 hereof, the Company shall pay to the Preferred Shareholders or the Registered Preferred Stock Pledgees, in preference to | In the case of payment of interim dividends as provided for in Article 53 hereof, the Company shall pay to the Preferred Shareholders or the Registered Preferred Stock Pledgees, in preference to | ||||
- 46 -
Current Articles of Incorporation | Proposed Amendment | ||||
the Common Shareholders or the Registered Common Stock Pledgees, one-half of the amount of the Preferred Dividends (hereinafter referred to as the “Preferred Interim Dividends”); provided, however, that if preferred dividends paid from surplus as provided for in Article 49, Paragraph 2 have been paid prior to the record date for the interim dividend, to the Preferred Shareholders of record as of the record date belonging to the same fiscal year, the amount so paid shall be subtracted from the Preferred Interim Dividends. | the Common Shareholders or the Registered Common Stock Pledgees, cash dividends in an amount as provided below (hereinafter referred to as the “Preferred Interim Dividends”); provided, however, that if all or part of the Extraordinary Preferred Dividends provided for in the next Article have been paid prior to the record date for the interim dividend, to the Preferred Shareholders of record as of the record date belonging to the same fiscal year, the amount so paid shall be subtracted from the Preferred Interim Dividends. | ||||
Class V preferred stock, Class VI preferred stock, Second through Fourth series of Class VII preferred stock, each series of Class VIII Preferred Stock, and each series of Class IX Preferred Stock: | |||||
For each share of Class V preferred stock, Class VI preferred stock, the Second through Fourth series of Class VII preferred stock, each series of Class VIII Preferred Stock, and each series of Class IX Preferred Stock, the amount determined under the method prescribed by a resolution of the Board of Directors prior to the issuance, up to one half of the amount of the Preferred Dividends. | |||||
First series of Class VII preferred stock: | |||||
For each share of the First series of Class VII preferred stock, 21 yen and 15 sen per annum | |||||
(New Provision) | Article 14 (Extraordinary Preferred Dividends) | ||||
In the case of payments of dividends from surplus as provided for in Article 52, Paragraph 2 hereof, the Company shall pay to the Preferred Shareholders or the Registered Preferred Stock Pledgees, in preference to the Common Shareholders or the Registered Common Stock Pledgees, cash dividends in an amount as provided below (hereinafter referred to as the “Extraordinary Preferred Dividends”); provided, however, that if all or part of the | |||||
- 47 -
Current Articles of Incorporation | Proposed Amendment | ||||
Preferred Interim Dividends or all or part of other Extraordinary Preferred Dividends have been paid prior to the record date for the dividend (hereinafter referred to as the “Record Date for the Extraordinary Dividends”), to the Preferred Shareholders of record as of the record date belonging to the same fiscal year, the amount so paid shall be subtracted from such Extraordinary Preferred Dividends. | |||||
Class V preferred stock, Class VI preferred stock, Second through Fourth series of Class VII preferred stock, each series of Class VIII Preferred Stock, and each series of Class IX Preferred Stock: | |||||
For each share of Class V preferred stock, Class VI preferred stock, the Second through Fourth series of Class VII preferred stock, each series of Class VIII Preferred Stock, and each series of Class IX Preferred Stock, the amount determined under the method prescribed by a resolution of the Board of Directors prior to the issuance, up to the amount of the Preferred Dividends. | |||||
First series of Class VII preferred stock: | |||||
For each share of the First series of Class VII preferred stock, the amount corresponding to the accrued period (which is obtained by multiplying (i) (a) the number of days included in the period commencing on and including the first day of the fiscal year that includes the Record Date for the Extraordinary Preferred Dividends and ending on and including the Record Date for the Extraordinary Preferred Dividends, divided by (b) 365, by (ii) the amount of the Preferred Dividends (calculations for an amount less than one (1) yen shall be made to the third (3rd) decimal place and shall be rounded off to two (2) decimal places)). | |||||
Article 14 (Distribution of Residual Assets) | Article 15 (Distribution of Residual Assets) | ||||
1. In the case of distribution of residual | 1. In the case of distribution of residual | ||||
- 48 -
Current Articles of Incorporation | Proposed Amendment | ||||
assets, the Company shall pay the following amounts to the Preferred Shareholders or the Registered Preferred Stock Pledgees, in preference to the Common Shareholders or the Registered Common Stock Pledgees; | assets, the Company shall pay one thousand (1,000) yen for each share of each class of Preferred Stock to the Preferred Shareholders or the Registered Preferred Stock Pledgees, in preference to the Common Shareholders or the Registered Common Stock Pledgees. | ||||
Class V preferred stock: For each share of Class V preferred stock, the amount obtained by multiplying the subscription price by the rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the maximum rate shall be one hundred and twenty percent (120%) and the minimum rate shall be eighty percent (80%). | |||||
Class VI preferred stock: For each share of Class VI preferred stock, the amount obtained by multiplying the subscription price by the rate determined under the method prescribed by a resolution of the Board of Directors prior to the issuance; provided that, the maximum rate shall be one hundred and twenty percent (120%) and the minimum rate shall be eighty percent (80%). | |||||
2. Other than a distribution provided for in the preceding Paragraph, no liquidation distribution of residual assets shall be made to the Preferred Shareholders or the Registered Preferred Stock Pledgees. | 2. Other than a distribution provided for in the preceding Paragraph, no liquidation distribution of residual assets shall be made to the Preferred Shareholders or the Registered Preferred Stock Pledgees. | ||||
Article 15 - Article 16 | Article 16 - Article 17 | ||||
<Provisions omitted> | <No Changes> | ||||
(New Provision) | Article 18 (Right to Request Acquisition in Exchange for Common Stock) | ||||
1. Any Preferred Shareholder of any series of Class VIII Preferred Stock or any series of Class IX Preferred Stock may request acquisition of such Preferred Stock during the period in which such Preferred Shareholder is entitled to request such acquisition, as determined by a resolution of the Board of Directors | |||||
- 49 -
Current Articles of Incorporation | Proposed Amendment | ||||
adopted prior to the issuance of such Preferred Stock, in exchange for Common Stock of the Company in the number calculated by the formula designated by such resolution of the Board of Directors. | |||||
2. In the calculation of the number of shares of common stock provided for in the preceding paragraph, if any number less than one (1) share is yielded, such fraction shall be handled by the method provided for in Article 167, Paragraph 3 of the Company Law of Japan. | |||||
Article 17 (Provisions for Acquisition) | Article 19 (Provisions for Acquisition in Exchange for Cash) | ||||
In respect of the Class V preferred stock and the Class VI preferred stock, the Company may, on or after such day as shall be separately determined by the Board of Directors, acquire all or part of such preferred stock in exchange for an amount of cash as deemed appropriate considering the prevailing market conditions and the amount of liquidation distributions of residual assets pertaining to such preferred stock, etc., as determined by a resolution of the Board of Directors by the time of first issuance of the shares of such preferred stock. | 1. In respect of Class V preferred stock, Class VI preferred stock, the Second through Fourth series of Class VII preferred stock and each series of Class VIII Preferred Stock, the Company may, on or after such day as shall be separately determined by the Board of Directors, acquire all or part of such preferred stock in exchange for an amount of cash as deemed appropriate considering the prevailing market conditions and the amount of liquidation distributions of residual assets pertaining to such preferred stock, etc., as determined by a resolution of the Board of Directors by the time of first issuance of the shares of such preferred stock. | ||||
2. In respect of the First series of Class VII preferred stock, the Company may, on the day separately provided by the Board of Directors, which is on or after October 1, 2014 (hereinafter referred to as the “Acquisition Date”), acquire all or part of the shares of the Preferred Stock in exchange for cash in the amount obtained by adding one thousand (1,000) yen per share to the amount equivalent to the accrued dividend from surplus (which is obtained by multiplying (i) (a) the number of days included in the period | |||||
- 50 -
Current Articles of Incorporation | Proposed Amendment | ||||
commencing on and including the first day of the fiscal year that includes the Acquisition Date and ending on and including the day immediately preceding the Acquisition Date, divided by (b) 365, by (ii) the amount of the Preferred Dividends (calculations for an amount less than one (1) yen shall be made to the third (3rd) decimal place and shall be rounded off to two (2) decimal places)); provided, however, that, if all or part of the Preferred Interim Dividends or all or part of the Extraordinary Preferred Dividends have been paid during the fiscal year, to holders of the First series of Class VII preferred stock of record as of the record date that is on or prior to the day immediately preceding the Acquisition Date, the amount so paid shall be subtracted from the amount of accrued dividend from surplus. | |||||
In the event that a part of the shares of such preferred stock is acquired, the shares of preferred stock to be acquired shall be decided by lottery or by proportional allotment. | 3. In the event that a part of the shares of each class of Preferred Stock is acquired in accordance with the preceding two (2) Paragraphs, the shares of Preferred Stock to be acquired shall be decided by lottery or by proportional allotment. | ||||
(New Provision) | Article 20 (Provisions for Acquisition in Exchange for Common Stock) | ||||
1. The Company shall mandatorily acquire any share of any series of Class VIII Preferred Stock or any series of Class IX Preferred Stock for which no request for acquisition is made during the period in which the holders of such preferred stock is entitled to request an acquisition, on the day immediately following the last day of such period, in exchange for common stock in the number as is obtained by dividing an amount equivalent to the subscription price per each share of the relevant series of Preferred Stock by the average daily closing price (including closing bids or offered prices (kehai-hyouji)) of common stock of the Company (in regular trading) | |||||
- 51 -
Current Articles of Incorporation | Proposed Amendment | ||||
as reported by the Tokyo Stock Exchange for thirty (30) consecutive trading days (excluding a trading day or days on which no closing price, closing bid or offered price is reported) commencing on the forty-fifth (45th) trading day prior to such date; provided, however, that such calculation shall be made to the second (2nd) decimal place denominated in yen and shall be rounded up to one (1) decimal place. If the relevant average price is less than the amount determined by a resolution of the Board of Directors prior to the issuance of the relevant series of Preferred Stock, the relevant series of Preferred Stock shall be acquired in exchange for common stock in the number as is obtained by dividing an amount equivalent to the subscription price per each share of the relevant series of Preferred Stock by an amount so determined by such resolution of the Board of Directors. | |||||
2. In the calculation of the number of common stock provided for in the preceding paragraph, if any number less than one (1) share is yielded, such fraction shall be handled by the method provided for in Article 234 of the Company Law of Japan. | |||||
Article 18 (Order of Priority) | Article 21 (Order of Priority) | ||||
All classes of preferred stock issued by the Company shall rank pari passu with each other with respect to the payment of the Preferred Dividends, the Preferred Interim Dividends, the Dividends of Surplus pursuant to Article 49, Paragraph 2 thereof, and residual assets. | All classes of preferred stock issued by the Company shall rank pari passu with each other with respect to the payment of the Preferred Dividends, the Preferred Interim Dividends, the Extraordinary Preferred Dividends and residual assets. | ||||
Article 19 - Article 25 | Article 22 - Article 28 | ||||
<Provisions omitted> | <No Changes> | ||||
Article 26 (Class Shareholders Meetings) | Article 29 (Class Shareholders Meetings) | ||||
The provisions of Article 19, | The provisions of Article 22, Paragraph | ||||
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Current Articles of Incorporation | Proposed Amendment | ||||
Paragraph 2, and Articles 21, 23 and 24 and previous Article shall apply mutatis mutandis to the general meetings of holders of classes of stock. | 2, and Articles 24, 25, 26, 27 and previous Article shall apply mutatis mutandis to the general meetings of holders of classes of stock. | ||||
Article 27 - Article 30 | Article 30 - Article 33 | ||||
<Provisions omitted> | <No Changes> | ||||
Article 31 (Chairman of the Board, President, Deputy President, Senior Managing Director and Managing Director) | Article 34 (Chairman of the Board, Deputy Chairman of the Board, President, Deputy President, Senior Managing Director and Managing Director) | ||||
The Board of Directors shall, by its resolution, elect one (1) President from among the Representative Director(s), and, in addition, may elect one (1) Chairman of the Board, one (1) or more Deputy President(s), Senior Managing Director(s) and Managing Director(s) from among the Directors, in case the need arises. | The Board of Directors shall, by its resolution, elect one (1) President from among the Representative Director(s), and, in addition, may elect one (1) Chairman of the Board, one (1) or more Deputy Chairman(s) of the Board, Deputy President(s), Senior Managing Director(s) and Managing Director(s) from among the Directors, in case the need arises. | ||||
(1) The Chairman of the Board shall supervise the Board of Directors. | (1) The Chairman of the Board shall supervise the Board of Directors. | ||||
(New Provision) | (2) The Deputy Chairman of the Board shall assist the Chairman of the Board. | ||||
(2) The President shall execute the business of the Company in accordance with the resolutions of the Board of Directors. | (3) The President shall execute the business of the Company in accordance with the resolutions of the Board of Directors. | ||||
(3) The Deputy President(s) shall assist the President to execute the business of the Company and shall act in his/her place in accordance with the order previously determined, in case the President is unable to act. | (4) The Deputy President(s) shall assist the President to execute the business of the Company and shall act in his/her place in accordance with the order previously determined in advance by the Board of Directors, in case the President is unable to act. | ||||
(4) The Senior Managing Director(s) shall assist the President and the Deputy President(s) to execute the business of the Company and shall act in their place in the order previously determined, in case all of the President and the Deputy President(s) are unable to act. | (5) The Senior Managing Director(s) shall assist the President and the Deputy President(s) to execute the business of the Company and shall act in their place in the order previously determined in advance by the Board of Directors, in case all of the President and the Deputy President(s) are | ||||
- 53 -
Current Articles of Incorporation | Proposed Amendment | ||||
unable to act. | |||||
(5) The Managing Director(s) shall assist the President, the Deputy President(s) and the Senior Managing Director(s) to execute the business of the Company and shall act in their place in the order previously determined, in case the President, the Deputy President(s) and the Senior Managing Director(s) are all unable to act. | (6) The Managing Director(s) shall assist the President, the Deputy President(s) and the Senior Managing Director(s) to execute the business of the Company and shall act in their place in the order previously determined in advance by the Board of Directors, in case the President, the Deputy President(s) and the Senior Managing Director(s) are all unable to act. | ||||
Article 32 (Convocation of Meetings of the Board of Directors) | Article 35 (Convocation of Meetings of the Board of Directors) | ||||
1. Meetings of the Board of Directors shall be convened and presided over by the Chairman of the Board. | 1. Meetings of the Board of Directors shall be convened and presided over by the Chairman of the Board. | ||||
2. In the event that the Chairman of the Board has not been elected or in case the Chairman of the Board is unable to act, the President, the Deputy President(s), the Senior Managing Director(s), the Managing director(s) or the Directors shall act in his/her place in accordance with the order previously determined. | 2. In the event that the Chairman of the Board has not been elected or in case the Chairman of the Board is unable to act, another Directors shall act in his/her place in accordance with the order previously determined in advance by the Board of Directors. | ||||
3. Notice of a meeting of the Board of Directors shall be dispatched to each Director and each Auditor not later than three (3) days prior to the date of the meeting; provided, however, that in the case of an emergency, such period of notice may be shortened. | 3. Notice of a meeting of the Board of Directors shall be dispatched to each Director and each Auditor not later than three (3) days prior to the date of the meeting; provided, however, that in the case of an emergency, such period of notice may be shortened. | ||||
4. Meetings of the Board of Directors may be held without taking the procedures of convocation with the consent of all Directors and Auditors. | 4. Meetings of the Board of Directors may be held without taking the procedures of convocation with the consent of all Directors and Auditors. | ||||
Article 33 - Article 38 | Article 36 - Article 41 | ||||
<Provisions omitted> | <No Changes> | ||||
Article 39 (Full-time Auditors) | Article 42 (Full-time Auditors and Standing Auditors) | ||||
The Board of Auditors shall, by its | 1. The Board of Auditors shall, by its | ||||
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Current Articles of Incorporation | Proposed Amendment | ||||
resolution, elect full-time Auditor(s) from among the Auditors. | resolution, elect full-time Auditor(s) from among the Auditors. | ||||
(New Provision) | 2. The Board of Auditors may, by its resolution, elect one (1) or more Standing Auditors. | ||||
Article 40 - Article 51 | Article 43 - Article 54 | ||||
<Provisions omitted> | <No Changes> | ||||
- 55 -
- 56 -
- 57 -
- 58 -
- 59 -
- 60 -
a. | Changes in Financial Position and Results of Operations (Consolidated Basis) |
(100 millions of Yen) | ||||||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||||
Ordinary income | 4,471 | 4,591 | 4,130 | 3,655 | ||||||||||||||
Ordinary profit (loss) | 1,599 | 1,253 | (1,169) | 834 | ||||||||||||||
Net income (loss) | 1,127 | 718 | (920) | 468 | ||||||||||||||
Total equity | 11,373 | 10,192 | 6,884 | 8,465 | ||||||||||||||
Total assets | 140,905 | 144,728 | 150,864 | 149,779 | ||||||||||||||
(Notes) 1. | Amounts less than 100 million yen are rounded down. |
2. | Number of consolidated subsidiaries and associated companies accounted for by the equity method are 25 and 4, respectively. |
b. | Changes in Financial Position and Results of Operations (Non-Consolidated Basis) |
(100 millions of Yen) | ||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | |||||||||||||||||||||||
Operating income | 258 | 1,867 | 169 | 136 | ||||||||||||||||||||||
Dividends received | 235 | 1,844 | 143 | 100 | ||||||||||||||||||||||
Dividends received from banking subsidiaries | 233 | 1,840 | 140 | 99 | ||||||||||||||||||||||
Dividends received from other subsidiaries | 0 | 1 | 1 | 0 | ||||||||||||||||||||||
Net income | 19,156 | 179,410 | 7,052 | 2,865 | ||||||||||||||||||||||
Net income per share (Yen) | 16.71 | 182.46 | 4.58 | 1.92 | ||||||||||||||||||||||
Total assets | 7,170 | 8,989 | 8,097 | 8,051 | ||||||||||||||||||||||
Investments in banking subsidiaries | 6,529 | 6,949 | 7,359 | 7,359 | ||||||||||||||||||||||
Investments in other subsidiaries | 239 | 278 | 284 | 284 | ||||||||||||||||||||||
(Notes) 1. | Amounts less than 100 million yen are rounded down. |
2. | Net income per share is calculated according to ASBJ Statement No. 2 “Accounting Standard for Earnings Per Share.” |
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The end of March 2010 | The end of March 2009 | |||||||||||||||||||||
Trust and banking business | Finance-related businesses and others | Trust and banking business | Finance-related businesses and others | |||||||||||||||||||
Number of employees | 8,169 | 703 | 8,130 | 698 | ||||||||||||||||||
(Note) The number of employee is the number of persons engaged in the Group. |
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a. | Trust and Banking Business |
(a) | The Chuo Mitsui Trust and Banking Company, Limited |
Principal Offices of the Bank and the Number Thereof | |||
Domestic: Head Office, Nihonbashi branch, Osaka Branch, Nagoya Branch and other 92 branches (91 branches at the end of March 2009). | |||
Besides the above, there are 4 overseas representative offices as at the current fiscal year end (4 overseas representative offices as at the end of the March 2009). | |||
Bank agencies of the Bank |
Name | Place of the principal office | Principal businesses other than banking agency | ||||||
Chuo Mitsui Asset Trust and Banking Company, Limited | Minato-ku, Tokyo | Trust and banking business | ||||||
(b) | Chuo Mitsui Asset Trust and Banking Company, Limited: Head Office, Nagoya Sub-branch and Osaka Sub-branch |
b. | Other Finance-related Operations |
Chuo Mitsui Asset Management Company, Limited : Head Office | ||
Chuo Mitsui Capital Company Limited | : Head Office | |
Chuo Mitsui Guarantee Co., Ltd. | : Head Office, Osaka Branch | |
Chuo Mitsui Realty Company, Limited | : Head Office, Head Office Sales Department |
a. | Total Amount of Capital Investment |
(Millions of Yen) | |||||||
Business segment | Amount | ||||||
Trust and banking business | 12,039 | ||||||
Other finance-related operations | 492 | ||||||
Total | 12,531 | ||||||
(Notes) 1. | Amounts less than 1 million yen are rounded down. | |
2. | The above amounts of investment include investments in intangible fixed assets. |
b. | Establishment of Principal Facilities, etc. | ||
(Trust and banking business) |
(Millions of Yen) | ||||||||||
Company name | Description | Amount | ||||||||
The Chuo Mitsui Trust and Banking Company, Limited | 1. Relocation and renovation of branches | 618 | ||||||||
2. Investment in software and office equipment | 8,583 | |||||||||
Chuo Mitsui Asset Trust and Banking Company, Limited | Investment in software and office equipment | 2,252 | ||||||||
(Note) | Amounts less than 1 million yen are rounded down. |
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a. | Parent Company |
b. | Subsidiaries |
Company name | Location | Main business | Date of establishment | Capital (Millions of Yen) | Percentage of the Company’s voting rights (%) | Other | ||||||||||||||||||
The Chuo Mitsui Trust and Banking Company, Limited | 33-1, Shiba 3-chome, Minato-ku, Tokyo, Japan | Trust and banking business | May 26, 1962 | 399,697 | 100 | - | ||||||||||||||||||
Chuo Mitsui Asset Trust and Banking Company, Limited | 23-1, Shiba 3-chome, Minato-ku, Tokyo, Japan | Trust and banking business | December 28, 1995 | 11,000 | 100 | - | ||||||||||||||||||
Chuo Mitsui Asset Management Company, Limited | 23-1, Shiba 3-chome, Minato-ku, Tokyo, Japan | Investment trust management business | September 19, 1986 | 300 | 100 | - | ||||||||||||||||||
Chuo Mitsui Capital Company Limited | 2-8, Nihonbashi Muromachi 3-chome, Chuo-ku, Tokyo, Japan | Private equity fund management business | March 1, 2000 | 1,247 | 100 | - | ||||||||||||||||||
MTH Preferred Capital 1 (Cayman) Limited | PO Box 309. Ugland House, Grand Cayman, KYl-1104 Cayman Is1ands | Financing business by issuance of securities | March 11, 2002 | 29,200 | 100 | - | ||||||||||||||||||
MTH Preferred Capital 3 (Cayman) Limited | PO Box 309. Ugland House, Grand Cayman, KYl-1104 Cayman Is1ands | Financing business by issuance of securities | March 10, 2003 | 31,700 | 100 | - | ||||||||||||||||||
MTH Preferred Capital 4 (Cayman) Limited | PO Box 309. Ugland House, Grand Cayman, KYl-1104 Cayman Is1ands | Financing business by issuance of securities | March 10, 2004 | 10,800 | 100 | - | ||||||||||||||||||
MTH Preferred Capital 5 (Cayman) Limited | PO Box 309. Ugland House, Grand Cayman, KYl-1104 Cayman Is1ands | Financing business by issuance of securities | February 8, 2007 | 33,700 | 100 | - | ||||||||||||||||||
CMTH Preferred Capital 6 (Cayman) Limited | PO Box 309. Ugland House, Grand Cayman, KYl-1104 Cayman Is1ands | Financing business by issuance of securities | January 29, 2008 | 42,700 | 100 | - | ||||||||||||||||||
CMTH Preferred Capital 7 (Cayman) Limited | PO Box 309. Ugland House, Grand Cayman, KYl-1104 Cayman Is1ands | Financing business by issuance of securities | November 28, 2008 | 41,600 | 100 | - | ||||||||||||||||||
Chuo Mitsui Guarantee Co., Ltd. | l7-18, Meguro-honcho 2-chome, Meguro-ku, Tokyo, Japan | Credit guarantee business | July 10, 1978 | 301 | 86.95 (86.95) | - | ||||||||||||||||||
Chuo Mitsui Card Co., Ltd. | 12-16, Koishikawa 1-chome, Bunkyo-ku, Tokyo, Japan | Credit card business | March 22, 1984 | 300 | 93.99 (93.99) | - | ||||||||||||||||||
Chuo Mitsui Trust International Ltd. | 7th Floor, Triton Court 14 Finsbury Square, London. EC2A, IBR U.K. | Securities business | July 2, 1986 | 2,806 [20 Million Pound Sterling] | 100 (100) | - | ||||||||||||||||||
Chuo Mitsui Realty Company, Limited | 4-4, Nihonbashi Muromachi 3-chome, Chuo-ku, Tokyo, Japan | Real estate brokerage business | February 5, 1988 | 300 | 55 (55) | - | ||||||||||||||||||
CMTB Facilities Company, Limited | 33-1, Shiba 3-chome, Minato-ku, Tokyo, Japan | Real estate rental business | April 2, 1988 | 100 | 100 (100) | - | ||||||||||||||||||
CMTB Equity Investments Co., Ltd. | 33-1, Shiba 3-chome, Minato-ku, Tokyo, Japan | Investment, management and administration of stocks | September 18, 2003 | 100 | 100 (100) | - | ||||||||||||||||||
Chuo Mitsui Finance Service Co., Ltd. | 2-8, Nihonbashi Muromachi 3-chome, Chuo-ku, Tokyo, Japan | Loan business | November 9, 2004 | 3,150 | 100 (100) | - | ||||||||||||||||||
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Company name | Location | Main business | Date of establishment | Capital (Millions of Yen) | Percentage of the Company’s voting rights (%) | Other | ||||||||||||||||||
Tokyo Securities Transfer Agent Co., Ltd. | 6-2, Otemachi 2-chome, Chiyoda-ku, Tokyo, Japan | Stock Transfer Agency Business | November 1, 1962 | 50 | 100 (100) | - | ||||||||||||||||||
Japan Trustee Services Bank, Ltd. | 8-11, Harumi 1-chome, Chuo-ku, Tokyo, Japan | Trust banking business | June 20, 2000 | 51,000 | 33.33 | - | ||||||||||||||||||
Japan Stockholders Data Service Company, Limited | 8-4, Izumi 2-chome, Suginami-ku, Tokyo, Japan | Back office contracting business | April 1, 2008 | 2,000 | 50 (50) | - | ||||||||||||||||||
(Notes) 1. | Amounts less than 1 million yen are rounded down. |
2. | Capital denominated in foreign currencies is translated into Japanese yen using the exchange rate prevailing at each balance sheet date. |
3. | Within the parenthesis under the percentage of the Company’s voting rights is the percentage of indirectly held voting rights. |
4. | Chuo Mitsui Stock Transfer Agency Business Co., Ltd. and Tokyo Securities Transfer Agent Co., Ltd. were merged on September 1, 2009, under the trade name of the latter. |
5. | Outline of the significant business collaborations involving the Company’s subsidiaries are as follows: |
[The Chuo Mitsui Trust and Banking Company, Limited] |
(1) The Chuo Mitsui Trust and Banking Company, Limited is under trust agency agreement (*) with Sumitomo Mitsui Banking Corporation. | |
(2) The Chuo Mitsui Trust and Banking Company, Limited serves as trust agency of Chuo Mitsui Asset Trust and Banking Company, Limited. | |
(3) The Chuo Mitsui Trust and banking Company, Limited as member of the MICS (Multi Integrated Cash Service) organization provides automatic cash withdrawal service based on the mutual use of ATMs between the member financial institutions. The Company also provides automatic cash withdrawal service based on the mutual use of ATMs between the Company and AEON BANK, LTD., under a collaboration agreement. | |
(4) The Chuo Mitsui Trust and Banking Company, Limited provides automatic cash deposit and withdrawal services based on the mutual use of ATMs between the Company and Japan Post Bank Co., Ltd. under a collaboration agreement. |
[Chuo Mitsui Asset Trust and Banking Company, Limited] | ||
Chuo Mitsui Asset Trust and Banking Company, Limited serves as bank agency of The Chuo Mitsui Trust and Banking Company, Limited. | ||
(*) Trust agency is a collective term for trust agreement agencies under Trust Business Law, and agencies concurrently engaged in trust business under Article 1 of the Law Concerning Financial Institutions’ Concurrent Management of Trust Business. |
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(7) | Major Creditors | |
Not applicable. | ||
(8) | Transfer of Businesses | |
Not applicable. |
- 66 -
Name | Position | Responsibility | Significant concurrent positions | Other | ||||||||||
Kiichiro Furusawa | Chairman of the Board (Representative Director) | Outside Director of Toshiba Corporation, Outside Corporate Auditor of FUJIFILM Holdings Corporation, Outside Director of Asagami Corporation | ||||||||||||
Kazuo Tanabe | President (Representative Director) | Chairman of the Board of The Chuo Mitsui Trust and Banking Company, Limited | ||||||||||||
Tomohiro Ito | Deputy President (Representative Director) | Internal Audit Dept. | ||||||||||||
Ken Sumida | Senior Managing Director | General Planning Dept., Planning and Coordination Dept., Personnel Dept. | Senior Executive Officer of The Chuo Mitsui Trust and Banking Company, Limited | |||||||||||
Jun Okuno | Director | President, The Chuo Mitsui Trust and Banking Company, Limited | ||||||||||||
Tadashi Kawai | Director | President, Chuo Mitsui Asset Trust and Banking Company, Limited | ||||||||||||
Tetsuo Amano | Full-time Corporate Auditor | |||||||||||||
Yasuhiro Wakasa | Corporate Auditor | Full-time Corporate Auditor of Chuo Mitsui Asset Trust and Banking Company, Limited | ||||||||||||
Yasuhiro Yonezawa | Outside Corporate Auditor | Outside Corporate Auditor of Chuo Mitsui Asset Trust and Banking Company, Limited, Professor at Graduate School of Finance, Accounting and Law at Waseda University | ||||||||||||
Yasuhiko Takano | Outside Corporate Auditor | Outside Corporate Auditor of The Chuo Mitsui Trust and Banking Company, Limited, Attorney-at-Law | ||||||||||||
Hiroyuki Nakanishi | Outside Corporate Auditor | Outside Corporate Auditor of The Chuo Mitsui Trust and Banking Company, Limited, Adviser of Mitsui Chemicals, Inc. | ||||||||||||
(Note) 1. | Corporate Auditors Messrs. Yasuhiro Yonezawa, Yasuhiko Takano, and Hiroyuki Nakanishi have all been registered with the Tokyo Stock Exchange, the Osaka Securities Exchange, and the Nagoya Stock Exchange, as independent officer according to the provisions of rules at each stock exchange. |
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(Millions of Yen) | ||||||||||||
Classification | Persons paid | Compensation, etc. | ||||||||||
Directors | 6 | 133 | ||||||||||
Corporate Auditors | 8 | 37 | ||||||||||
Total | 14 | 170 | ||||||||||
(Notes) 1. | Amounts less than 1 million yen are rounded down. |
2. | Compensation, etc. includes 46 million yen provisions for Directors’ retirement benefit and 8 million yen provisions for Corporate Auditors’ retirement benefit for the current fiscal year. |
3. | Compensation limits as decided by the general meeting of shareholders are, 30 million yen per month for Directors and 9 million yen per month for Corporate Auditors. |
4. | The above include 3 Corporate Auditors who retired during the current fiscal year. |
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Name | Concurrent positions and other details | ||||
Yasuhiro Yonezawa | Outside Corporate Auditor of Chuo Mitsui Asset Trust and Banking Company, Limited, Professor at Graduate School of Finance, Accounting and Law at Waseda University | ||||
Yasuhiko Takano | Outside Corporate Auditor of The Chuo Mitsui Trust and Banking Company, Limited | ||||
Hiroyuki Nakanishi | Outside Corporate Auditor of The Chuo Mitsui Trust and Banking Company, Limited | ||||
(Notes) 1. | Chuo Mitsui Asset Trust and Banking Company, Limited and the Chuo Mitsui Trust and Banking Company, Limited are the Company’s subsidiaries. |
2. | The Company has no special interest in Waseda University Educational Corporation. |
Name | Attendance of the Board of Directors meeting and the Board of Corporate Auditors meeting, and opinions issued and other activities at the meetings, period of service | ||||
Yasuhiro Yonezawa | He attended 20 of the 21 Board of Directors meetings and 16 of the 17 Board of Corporate Auditors meetings held during the current fiscal year, presenting his insights from the academic viewpoints primarily in the area of financial theories. He has served as Outside Corporate Auditor since June, 2005 to date. | ||||
Yasuhiko Takano | He attended 19 of the 21 Board of Directors meetings and 16 of the 17 Board of Corporate Auditors meetings held during the current fiscal year, presenting his insights from the viewpoints of an experienced lawyer. He has served as Outside Corporate Auditor since June, 2006 to date. | ||||
Hiroyuki Nakanishi | He attended 15 of the 16 Board of Directors meetings and all 13 Board of Corporate Auditors meetings held since his appointment in June 2009, presenting his insights from the viewpoints of an experienced corporate executive. He has served as Outside Corporate Auditor since June, 2009 to date. | ||||
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Name | Summary of Liability Limitation Agreement | ||||
Yasuhiro Yonezawa | The Company is under agreement to the effect that liability for damages he may assume towards the Company for his negligence in performing his duty according to the provisions of Article 423, Paragraph 1 of the Companies Act, shall not exceed the Minimum Liability Amount as stipulated in Article 425, Paragraph 1 of the Act, provided that such negligence does not constitute gross negligence and that he performs his duty as outside Corporate Auditor in good faith. | ||||
Yasuhiko Takano | The Company is under agreement to the effect that liability for damages he may assume towards the Company for his negligence in performing his duty according to the provisions of Article 423, Paragraph 1 of the Companies Act, shall not exceed the Minimum Liability Amount as stipulated in Article 425, Paragraph 1 of the Act, provided that such negligence does not constitute gross negligence and that he performs his duty as outside Corporate Auditor in good faith. | ||||
Hiroyuki Nakanishi | The Company is under agreement to the effect that liability for damages he may assume towards the Company for his negligence in performing his duty according to the provisions of Article 423, Paragraph 1 of the Companies Act, shall not exceed the Minimum Liability Amount as stipulated in Article 425, Paragraph 1 of the Act, provided that such negligence does not constitute gross negligence and that he performs his duty as outside Corporate Auditor in good faith. | ||||
(Millions of Yen) | |||||||||||||||||
Persons paid | Compensation, etc. paid by the Company | Compensation, etc. paid by parent company, etc., of the Company | |||||||||||||||
Total amount of compensation, etc. | 4 | 11 | 11 | ||||||||||||||
(Notes) 1. | Amounts less than 1 million yen are rounded down. |
2. | Compensation, etc. includes 2 million yen provisions for Outside Officers’ retirement benefit for the current fiscal year. |
3. | The above include 1 Corporate Auditor who retired during the current fiscal year. |
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Total number of shares authorized to be issued | 4,443,488 thousand shares | |||
(Details) | Common stock | 4,068,332 thousand shares | ||
Class II Preferred stock | 93,750 thousand shares | |||
Class III Preferred stock | 156,406 thousand shares | |||
Class V Preferred stock | 62,500 thousand shares | |||
Class VI Preferred stock | 62,500 thousand shares | |||
Total number of shares issued | 1,658,426 thousand shares | |||
(Details) | Common stock | 1,658,426 thousand shares |
Common stock | 47,896 |
Name of shareholders | Investment in the Company by the shareholders | |||||||||
Number of shares held (Thousands) | Percentage of total shares (%) | |||||||||
The Resolution and Collection Corporation | 500,875 | 30.20 | ||||||||
Japan Trustee Services Bank, Ltd. (Trust Account) | 105,707 | 6.37 | ||||||||
The Master Trust Bank of Japan, Ltd. (Trust Account) | 101,027 | 6.09 | ||||||||
Japan Trustee Services Bank, Ltd. (Trust Account 9) | 21,726 | 1.31 | ||||||||
Japan Trustee Services Bank, Ltd. (Trust Account 4) | 18,649 | 1.12 | ||||||||
Goldman Sachs & Company Regular account | 15,554 | 0.93 | ||||||||
Japan Trustee Services Bank, Ltd. (Re-trusted by Chuo Mitsui Asset Trust and Banking Co., Ltd. Composite Trust Account held for Toyota Motor Corporation) | 15,226 | 0.91 | ||||||||
State Street Bank and Trust Company 505225 | 14,431 | 0.87 | ||||||||
Mitsui Life Insurance Company Limited | 13,648 | 0.82 | ||||||||
Tobu Railway Co., Ltd. | 13,355 | 0.80 | ||||||||
(Notes) 1. Amounts less than 1,000 fractional shares are rounded down. |
2. Percentage of total shares is rounded down to 2 decimal places. |
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Name | Compensation, etc. for the fiscal year | Other | ||||||||
Deloitte Touche Tohmatsu LLC (Designated Unlimited Liability Partner Seno Tezuka) (Designated Unlimited Liability Partner Mitsuo Kimura) (Designated Unlimited Liability Partner Tomoharu Sato) | 144 | Compensation, etc. includes compensation for non-audit services such as the verification of the calculation process of capital adequacy ratio (other services than those defined in Article 2, Paragraph 1 of Certified Public Accountants Act). | ||||||||
(Notes) 1. | Amounts less than 1 million yen are rounded down. |
2. | Total sum of the monetary and other economic benefits (including the above) payable by the Company, its subsidiaries is 481 million yen. |
a. | Policy for Decisions on Dismissal or Non Re-appointment of Accounting Auditor | ||
The Company may submit proposal for dismissal or non re-appointment of Accounting Auditor to the general meeting of shareholders, according to the procedure stipulated by the Companies Act and other laws and regulations, if Accounting Auditor is found to be causing trouble to the Company. | |||
If such proposal is based on the circumstance of Accounting Auditor applicable to the provisions of items of Article 340, Paragraph 1 of the Companies Act, however, the Board of Corporate Auditors may dismiss Accounting Auditor at its own discretion, and report such dismissal with the reasons thereof to the general meeting of shareholders, according to relevant laws and regulations. | |||
b. | Policy in the exercise of the authority delegated to the Board of Directors under the provision of the Articles of Incorporation, according to the provisions of Article 459, Paragraph 1 of the Companies Act | ||
With the purpose to ensure flexible capital policy, the Company is allowed under its Articles of Incorporation, to carry out treasury stock acquisition prescribed by Article 459, Paragraph 1, Item 1, of the Companies Act, based on the resolution of the Board of Directors. | |||
Such treasury stock acquisition, however, shall be appropriately decided based on the overall judgment in consideration of the factors including the Company’s business results and capital adequacy. | |||
c. | Accounting Auditor of the Company’s significant subsidiaries | ||
Of the Company’s significant subsidiaries, Chuo Mitsui Trust International Ltd. is subjected to audit by other external auditing corporations than the Accounting Auditor of the Company. |
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To ensure that officers and employees execute their business in compliance with laws and regulations as well as the Articles of Incorporation, the following measures are taken. | ||
1) | Basic compliance policies for the Company and the Group will be established and a compliance standard introduced for executives. | |
2) | Important issues pertaining to legal compliance will be discussed by the Executive Committee, which the president chairs and relevant directors attend, and further discussion and reports will be undertaken as necessary by the Board of Directors. | |
3) | A supervisory unit for legal compliance will be set up at the head office. In addition, each division will assign a person of action and a person of authority, who will, respectively, cover the execution of compliance efforts and take overall responsibility for such efforts. | |
4) | A compliance program — a plan to reinforce the legal compliance perspective — will be formulated each fiscal year, and instructions will be passed on to the Company’s bank subsidiaries and asset management subsidiaries for preparing their own plans. The status of these plans — in terms of improvements made and goals achieved — will be monitored. | |
5) | Opportunities for legal compliance-oriented education and training will be offered to executives on an ongoing basis. | |
6) | Serious violation of laws pertaining to the Company’s activities by executives must be reported, and special points will be set up, both in-house and outside the Company, to collect information on alleged infractions. | |
7) | The Company and its subsidiaries will take a firm stand to prevent dealings with antisocial forces and will maintain no association whatsoever with such elements. A structure, underpinned by close ties with outside professionals, particularly the police, will be put in place to promote communication and cooperation among relevant divisions and departments and thereby facilitate an organized response in the event an executive or an employee is approached with an inappropriate request. Under no circumstances will we engage in transactions to the benefit persons or organizations that threaten the order and safety of civil society. | |
8) | The Board of Directors will set out rules for implementing the compliance structure described above as well as for the contents of a handbook — the Compliance Manual — aimed at executives. |
The following measures are taken to develop a system including rules on the risk management of potential losses. | ||
1) | Important issues pertaining to risk management will be discussed by the Executive Committee, which the president chairs and relevant directors attend, and further discussion and reports will be undertaken by the Board of Directors, as necessary. | |
2) | A supervisory unit for risk management will be set up at the head office. In addition, each division will assign a person of action and a person of authority, who will, respectively, cover the execution of compliance efforts and take overall responsibility for such efforts. | |
3) | The Group approach to risk management will be formulated and instructions will be passed on to the Company’s bank subsidiaries and asset management subsidiaries to prepare their own plans for maintaining an internal risk management perspective. The status of these plans — in terms of improvements made and goals achieved — will be monitored. | |
4) | An internal auditing unit, independent from divisions that execute operations, will monitor business processes in each division and will recommend measures to prevent misconduct and to promote improvement in business processes. | |
5) | The Board of Directors will set out rules for implementing the risk management structure described above. |
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The following measures are taken to develop a system to ensure that officers and employees execute their business in an efficient way. | ||
1) | Key matters up for resolution or reporting by the Board of Directors will undergo preliminary discussion by the Executive Committee, which the president chairs and relevant directors attend. | |
2) | The Board of Directors will set out the basic items pertaining to the Company’s organizational structure and the division of duties, as well as the staff organization and authority granted to executives, to ensure the smooth execution of duties and appropriate conduct. | |
3) | In-house regulations will be prepared in accordance with relevant legislation, and in the event said legislation is revised or abrogated, required amendments to in-house regulations will be implemented forthwith. |
Apart from (1)-(3) above, the following measures are taken to develop a system to ensure adequacy of financial reporting. | ||
1) | Accounting treatment and financial reporting will be governed by several laws and regulations, including the Banking Law, the Companies Act and the Financial Instruments and Exchange Law. Appropriate and sound processes will be carried out, in accordance with fair and proper corporate accounting standards. | |
2) | Accounting standards will be put in place to facilitate the swift and accurate treatment of the accounting business and ensure clear and straightforward reports covering the Company’s financial condition and its operating results. | |
3) | An internal auditing unit, independent from divisions that execute operations, will monitor business processes in each division to confirm the suitability of respective business processes, which is the cornerstone of financial reporting. | |
4) | The Board of Directors will set out rules for implementing the structure for appropriate financial reporting described above. |
The following measures are taken to develop a system to ensure appropriate conduct of operations within the Group. | ||
1) | In its capacity as a financial holding company, the Company will endeavor to create compliance and risk management structures applicable to the Group. | |
2) | The Company will verify from both risk management and legal perspectives all intra-Group transactions of particular significance to the Group. | |
3) | The Company will consolidate and then make public in a timely and appropriate manner disclosure materials recently issued and acquired by the Group. | |
4) | The Company will set up an external point that accepts information on alleged illegal activity by executives of the Group and, in the unlikely event illegal activity is confirmed at companies in the Group, will indicate an appropriate response for implementation. |
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The following measures are taken to develop an effective system for the storage and management of information associated with the execution of business by officers and employees. |
1) | Minutes, which record progress on agendas and specific points of discussion, will be prepared at the General Meeting of Shareholders and at Board of Directors and Executive Committee meetings and kept with related materials. | |
2) | The Board of Directors will set out the basic items pertaining to information storage and management, such as the organizational structure for information management and the classification of management categories, according to importance. |
The following measures are taken to develop a system to ensure effective execution of business by Corporate Auditors. | ||
1) | Corporate Auditors Office will be established to assist Corporate Auditors in their duties, and staff will be assigned at the request of auditors. Staff so assigned to this office will not take orders or instructions from directors and will respect the opinions of auditors regarding personnel transfers, disciplinary action and other matters related to their assignment. | |
2) | Corporate Auditors may attend meetings of the Board of Directors and the Executive Committee as well as any other meetings they deem necessary to the execution of their duties. Executives will cooperate with Corporate Auditors in good faith, a requirement that includes a quick response to any request by a Corporate Auditor for information on matters concerning the execution of duties. | |
3) | A system will be maintained to accord Corporate Auditors with timely information regarding the occurrence of any legal transgression, situations that threaten to cause obvious corporate damage, and information on serious legal misconduct, which come to light through the execution of an internal audit or through the system for reporting on perceived illegal behavior. | |
4) | Corporate Auditors can request an additional audit by the internal auditing division and insist on other pertinent measures, when the situation calls for further action. | |
5) | The Board of Directors will set out rules for implementing the structure for Corporate Auditors’ audits described above. |
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As of March | ||||
(in millions of yen) | 31, 2010 | |||
ASSETS | ||||
Cash and due from banks | 262,240 | |||
Call loans and bills bought | 9,884 | |||
Receivables under securities borrowing transactions | 1,521 | |||
Monetary claims bought | 98,818 | |||
Trading assets | 22,778 | |||
Money held in trust | 2,234 | |||
Securities | 4,525,683 | |||
Loans and bills discounted | 8,941,948 | |||
Foreign exchanges | 767 | |||
Other assets | 446,145 | |||
Tangible fixed assets | 126,000 | |||
Buildings | 37,384 | |||
Land | 81,958 | |||
Construction in progress | 200 | |||
Other tangible fixed assets | 6,456 | |||
Intangible fixed assets | 58,940 | |||
Software | 16,221 | |||
Goodwill | 35,304 | |||
Other intangible fixed assets | 7,414 | |||
Deferred tax assets | 150,296 | |||
Customers’ liabilities for acceptances and guarantees | 384,117 | |||
Allowance for loan losses | (53,410) | |||
Total assets | 14,977,966 | |||
LIABILITIES | ||||
Deposits | 8,759,917 | |||
Negotiable certificates of deposit | 327,190 | |||
Call money and bills sold | 306,161 | |||
Payables under securities lending transactions | 1,702,697 | |||
Trading liabilities | 7,911 | |||
Borrowed money | 1,217,246 | |||
Foreign exchanges | 21 | |||
Bonds payable | 234,750 | |||
Due to trust accounts | 995,612 | |||
Other liabilities | 170,887 | |||
Provision for bonuses | 3,160 | |||
Provision for retirement benefits | 2,662 | |||
Provision for directors’ retirement benefits | 1,704 | |||
Provision for contingent losses | 12,022 | |||
Deferred tax liabilities | 5,346 | |||
Acceptances and guarantees | 384,117 | |||
Total liabilities | 14,131,410 | |||
NET ASSETS | ||||
Capital stock | 261,608 | |||
Retained earnings | 377,619 | |||
Treasury stock | (270) | |||
Shareholders’ equity | 638,957 | |||
Valuation difference on available-for-sale securities | 35,002 | |||
Deferred gains or losses on hedges | 2,705 | |||
Revaluation reserve for land | (15,532) | |||
Foreign currency translation adjustment | (1,738) | |||
Valuation and translation adjustments | 20,436 | |||
Minority interests | 187,161 | |||
Total net assets | 846,556 | |||
Total liabilities and net assets | 14,977,966 | |||
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(in millions of yen) | Fiscal Year 2009 | |||
Ordinary income | 365,516 | |||
Trust fees | 50,874 | |||
Interest income | 181,592 | |||
Interest on loans and discounts | 122,029 | |||
Interest and dividends on securities | 55,570 | |||
Interest on call loans and bills bought | 181 | |||
Interest on receivables under securities borrowing transactions | 77 | |||
Interest on deposits with banks | 189 | |||
Other interest income | 3,543 | |||
Fees and commissions | 80,790 | |||
Trading income | 2,592 | |||
Other ordinary income | 27,505 | |||
Other income | 22,161 | |||
Ordinary expenses | 282,100 | |||
Interest expenses | 68,901 | |||
Interest on deposits | 44,970 | |||
Interest negotiable certificates of deposit | 1,422 | |||
Interest on call money and bills sold | 725 | |||
Interest on payables under repurchase agreements | 17 | |||
Interest on payables under securities lending transactions | 3,483 | |||
Interest on borrowings | 3,838 | |||
Interest on bonds | 7,512 | |||
Other interest expenses | 6,929 | |||
Fees and commissions | 21,112 | |||
Other ordinary expenses | 8,318 | |||
General and administrative expenses | 149,232 | |||
Other expenses | 34,536 | |||
Provision of allowance for loan losses | 360 | |||
Other | 34,175 | |||
Ordinary profit (loss) | 83,415 | |||
Extraordinary income | 2,579 | |||
Gain on disposal of noncurrent assets | 234 | |||
Reversal of allowance for loan losses | - | |||
Recoveries of written-off claims | 2,147 | |||
Reversal of allowance for contingent losses | 197 | |||
Extraordinary loss | 1,196 | |||
Loss on disposal of noncurrent assets | 501 | |||
Management integration expenses | 525 | |||
Other | 168 | |||
Income (loss) before income taxes | 84,798 | |||
Income taxes-current | 8,149 | |||
Income taxes-deferred | 22,150 | |||
Total income taxes | 30,299 | |||
Minority interests in income | 7,672 | |||
Net income (loss) | 46,826 | |||
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(in millions of yen) | Fiscal Year 2009 | |||
Shareholders’ Equity: | ||||
Capital stock | ||||
Balance at the end of previous period | 261,608 | |||
Changes of items during the period: | ||||
Total changes of items during the period | - | |||
Balance at the end of the current period | 261,608 | |||
Capital surplus: | ||||
Balance at the end of previous period | - | |||
Changes of items during the period: | ||||
Cancellation of treasury stock | - | |||
Disposal of treasury stock | - | |||
Total changes of items during the period | - | |||
Balance at the end of the current period | - | |||
Retained earnings: | ||||
Balance at the end of previous period | 338,564 | |||
Changes of items during the period: | ||||
Dividends from surplus | (7,765) | |||
Net income | 48,826 | |||
Cancellation of treasury stock | - | |||
Disposal of treasury stock | (5) | |||
Total changes of items during the period | 39,055 | |||
Balance at the end of the current period | 377,619 | |||
Treasury stock: | ||||
Balance at the end of previous period | (262) | |||
Changes of items during the period: | ||||
Acquisition of treasury stock | (18) | |||
Cancellation of treasury stock | - | |||
Disposal of treasury stock | 9 | |||
Total changes of items during the period | (8) | |||
Balance at the end of the current period | (270) | |||
Total shareholders’ equity | ||||
Balance at the end of previous period | 599,910 | |||
Changes of items during the period: | ||||
Dividends from surplus | (7,765) | |||
Net income (loss) | 46,826 | |||
Acquisition of treasury stock | (18) | |||
Cancellation of treasury stock | - | |||
Disposal of treasury stock | 4 | |||
Total changes of items during the period | 39,047 | |||
Balance at the end of the current period | 638,957 | |||
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(in millions of yen) | Fiscal Year 2009 | |||
Valuation and Translation Adjustments: | ||||
Valuation difference on available-for-sale securities: | ||||
Balance at the end of previous period | (83,325) | |||
Changes of items during the period: | ||||
Net changes of items other than shareholders’ equity | 118,327 | |||
Total changes of items during the period | 118,327 | |||
Balance at the end of the current period | 35,002 | |||
Deferred gains or losses on hedges: | ||||
Balance at the end of previous period | 2,406 | |||
Changes of items during the period: | ||||
Net changes of items other than shareholders’ equity | 298 | |||
Total changes of items during the period | 298 | |||
Balance at the end of the current period | 2,705 | |||
Revaluation reserve for land: | ||||
Balance at the end of previous period | (15,532) | |||
Total changes of items during the period | - | |||
Balance at the end of the current period | (15,532) | |||
Foreign currency translation adjustments: | ||||
Balance at the end of previous period | (2,045) | |||
Changes of items during the period: | ||||
Net changes of items other than shareholders’ equity | 307 | |||
Total changes of items during the period | 307 | |||
Balance at the end of the current period | (1,738) | |||
Total valuation and translation adjustments: | ||||
Balance at the end of previous period | (98,497) | |||
Changes of items during the period: | ||||
Net changes of items other than shareholders’ equity | 118,933 | |||
Total changes of items during the period | 118,933 | |||
Balance at the end of the current period | 20,436 | |||
Minority interests: | ||||
Balance at the end of previous period | 187,041 | |||
Changes of items during the period: | ||||
Net changes of items other than shareholders’ equity | 119 | |||
Total changes of items during the period | 119 | |||
Balance at the end of the current period | 187,161 | |||
Total net assets: | ||||
Balance at the end of previous period | 688,455 | |||
Changes of items during the period: | ||||
Dividends from surplus | (7,765) | |||
Net income (loss) | 46,826 | |||
Acquisition of treasury stock | (18) | |||
Disposal of treasury stock | 4 | |||
Net changes of items other than shareholders’ equity | 119,053 | |||
Total changes of items during the period | 158,100 | |||
Balance at the end of the current period | 846,556 | |||
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The definitions of subsidiaries and affiliates are based on Article 2, Paragraph 8 of the Banking Law, and Article 4-2 of the Order for Enforcement of the Banking Law.
Names of principal companies:
Chuo Mitsui Asset Trust and Banking Company, Limited
Chuo Mitsui Asset Management Company, Limited
Chuo Mitsui Capital Company, Limited
MTH Preferred Capital 1 (Cayman) Limited
MTH Preferred Capital 3 (Cayman) Limited
MTH Preferred Capital 4 (Cayman) Limited
MTH Preferred Capital 5 (Cayman) Limited
CMTH Preferred Capital 6 (Cayman) Limited
CMTH Preferred Capital 7 (Cayman) Limited
In the current fiscal year, Chuo Mitsui Stock Transfer Agency Business Co., Ltd. was excluded from the scope of consolidation due to the merger with Tokyo Securities Transfer Agent Co., Ltd.
ASBJ Implementation Guidance No. 22 “Guidance on determining a subsidiary and an affiliate” (issued by ASBJ on May 13, 2008) was adopted from the current fiscal year. This adoption did not have an impact on profit or loss.
Chuo Mitsui Create Company, Limited
Unconsolidated subsidiaries are excluded from the scope of consolidation because their total amounts in terms of
Total assets, Ordinary income, Net income, Retained earnings, and others are so immaterial that they do not hinder a rational judgment of the Chuo Mitsui Trust Group’s financial position and results of operations when excluded from the scope of consolidation.
(1) Unconsolidated Subsidiaries Accounted for by the Equity Method
Japan Trustee Services Bank, Ltd.
Japan Trustee Information Systems, Ltd.
Chuo Mitsui Create Company, Limited
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3. Balance Sheet Dates of Consolidated Subsidiaries |
(1) Balance sheet dates of consolidated subsidiaries are as follows: |
January 24 6 companies |
December 31 4 companies |
March 31 15 companies |
(2) A subsidiary with a balance sheet date as of January 24 is consolidated based on its preliminary financial statements as of March 31. Other subsidiaries are consolidated based on the financial statements as of their balance sheet dates. Six subsidiaries changed their balance sheet date from July 24 to January 24. Necessary adjustments were made for any significant transactions between the balance sheet dates of the subsidiaries and the consolidated balance sheet date. |
4. Valuation of Assets and Liabilities of the Consolidated Subsidiaries |
All assets and liabilities of the consolidated subsidiaries are valued at fair value. |
5. Amortization of Goodwill and Negative Goodwill |
Goodwill is amortized over the period that is reasonably determined by each case within 20 years. However, it is fully amortized as incurred during the each fiscal year if deemed immaterial. |
6. Accounting Policies |
(1) Trading Account Activities |
Trading account activities are conducted for short-term profit taking by market-making and sales arbitrages. Trading assets and liabilities include securities, commercial papers, and financial derivatives. The mark-to-market accounting method is adopted for such financial instruments, all of which are stated at fair values as Trading Assets or Trading Liabilities in the consolidated balance sheets. Gains and losses on trading transactions are shown as Trading Income or Trading Expenses on a trade date basis. |
Trading account securities and monetary claims are stated at fair value of the balance sheet date and financial derivatives for trading activities, such as swaps, futures and options, are valued on the assumption that they are settled at the balance sheet date. |
Trading Income and Trading Expenses include interests, changes in fair value of securities and monetary claims in the current period, and changes in values of financial derivatives on the assumption that they are settled at the balance sheet date. |
(2) Standards for Recognition and Measurement of Securities |
(a) Debt securities that consolidated subsidiaries have the positive intent and ability to hold to maturity are classified as held-to-maturity securities and are carried at amortized cost (straight-line method) using the moving-average method. |
Investments in unconsolidated subsidiaries are carried at cost using the moving-average method. Securities other than trading purpose securities, held-to-maturity securities and investments in unconsolidated subsidiaries and affiliates are classified as “other securities” (available-for-sale securities). |
Stocks in Other securities that have market prices and investment trusts are carried at their average market prices during the final month of the fiscal year, and bonds and others that have market prices are carried at their fiscal year-end market prices (cost of securities sold is calculated using primarily the moving-average method). Other securities which are extremely difficult to determine fair value with no available market prices are carried at cost using the moving-average method. Net unrealized gains (losses) on other securities are included in Net assets. |
(b) Securities invested in money held in trust are revalued at the same method as securities mentioned above. |
(3) Standards for Recognition and Measurement of Financial Derivatives |
Financial derivatives other than trading purposes are valued at fair value. |
(4) Depreciation Methods |
(a) Tangible Fixed Assets |
Tangible fixed assets of consolidated trust bank subsidiaries are depreciated using the declining-balance method. Buildings acquired on and after April 1, 1998, however, are depreciated using the straight-line method. The estimated useful lives of major items are as follows: |
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Buildings : 10 to 50 years Others : 3 to 8 years For assets with acquisition cost of more than 0.1 million yen and under 0.2 million yen are amortized equally in 3 years. Tangible fixed asset of the Company and other consolidated subsidiaries are depreciated mainly using the declining-balance method over the estimated useful lives. |
(b) | Intangible Fixed Assets |
Intangible fixed assets are depreciated using the straight-line method. Expenses related to software for internal use are capitalized in “Intangible Fixed Assets” and amortized over the estimated useful lives, generally 5 years. |
(5) | Allowance for Loan Losses Allowance for Loan Losses on Loans of major domestic consolidated subsidiaries is provided in accordance with internally established standards for write-off and allowance for possible credit losses. |
For claims to debtors who are legally bankrupt(“Bankrupt debtors”) or virtually bankrupt(Substantially Bankrupt Debtors), the specific allowance is provided based on the amount of claims, deducting the amount expected to be collected through the disposal of collateral or execution of guarantees from book value after direct deduction described below. | |
For claims to debtors who are not yet legally or formally bankrupt but are likely to become bankrupt(“Potentially Bankrupt Debtors”), the specific allowance is provided for the amount considered to be necessary based on an overall solvency assessment, deducting the amount expected to be collected through the disposal of collateral or execution of guarantees. | |
Among for claims to debtors with more than certain amount of the Bank’s claims to debtors,(i)who are likely to become bankrupt,(ii)to whom the Bank has Restructuring loans where future cash flows from capital collection and interest receipt could be reasonably estimated, allowance is provided for the difference between the present value of expected future cash flows discounted at original contracted interest rate before relaxing to support and the current book value of the claims. | |
For claims that are classified to the categories other than above, the general allowance is provided based on the historical loan-loss-ratio. | |
For claims originated in specific foreign countries, additional allowances are provided based on an assessment of political and economic conditions of these countries. | |
All claims are assessed by branches and credit supervision department in accordance with the internal standards for self-assessments of asset quality. The Internal Audit Department, which is independent from those operating sections, subsequently audits these assessments, and the allowances presented above reflect the audit results. | |
For claims on bankrupt Debtors and Substantially Bankrupt Debtors, net of amounts expected to be collected through the disposal of collateral or through the execution of guarantees, are directly deducted out of the original amount of claims. The deducted amount is 33,562 million yen. | |
Consolidated subsidiaries, not adopting states above, provide allowances based on their historical credit loss experience for general claims and based on individual assessments of the possibility of collection for specific deteriorated claims. | |
(6) | Provision for Bonuses Provision for bonuses is provided for the estimated employees’ bonuses attributable to the current fiscal year. |
(7) | Provision for retirement benefits Provision for retirement benefits is provided based on the projected benefit obligation and the fair value of the plan assets at the respective balance sheet date. In the end of current fiscal year, Provision for retirement benefits is posted as “Prepaid Pension Expenses” in “Other Assets” on ground that fair value of pension assets excess the total amount of the “Projected Benefit Obligation” and “Unrecognized actuarial losses”. |
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Unrecognized actuarial losses are amortized under the straight-line method for a period, primarily 8 to 9 years, within the employees’ average remaining service period, commencing on the fiscal year immediately following the fiscal year in which the services were provided. |
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(Changes in accounting policy) |
ASBJ Statement No. 19 “Partial Amendments to Accounting Standard for Retirement Benefits (Part 3)” (issued on July 31, 2008) was adopted as of the end of the current fiscal year. The adoption resulted in the use of the same discount rates as those used in the previous method and did not affect the consolidated financial statements for the current fiscal year. |
(8) Provision for Directors’ Bonuses Provision for directors’ bonuses is provided for the estimated directors’ bonuses attributable to the current fiscal year. |
(9) Provision for Contingent Loss Provision for contingent loss is estimated for each individual event and provided for possible contingent loss related to off-balance sheet and other transactions as stated below: |
<Provision for Reimbursement of Deposits> Provision for reimbursement of deposits is provided for deposits no longer accounted as deposit under certain conditions against the estimated future reimbursement requested by customers. |
<Provision for Possible Losses related to Land Trust> Provision for possible losses related to land trust is provided for estimated losses deemed necessary for potential damages to the compensation rights which would be acquired if a liability for reimbursement, as a trustee of a land trust, was incurred due to the future business circumstances of the land trust. |
(10) Foreign Currency Transaction Assets and liabilities denominated in foreign currencies of consolidated trust bank subsidiaries are primarily translated into yen at the exchange rate at the consolidated balance sheet date. Assets and liabilities denominated in foreign currencies of other consolidated subsidiaries are translated into yen at the exchange rate at each of the consolidated balance sheet dates. |
(11) Accounting for Leases As for the domestic consolidated subsidiaries, transactions of finance leases without transfer of ownerships started before April 1,2008 have been accounted for according to the same accounting treatment used in the operating leases. |
(12) Hedge Accounting |
(a) Hedge Accounting for Interest Rate Risks Consolidated trust bank subsidiaries manage interest rate risk arising from various assets and liabilities by using financial derivatives transactions and apply deferred hedge accounting regulated by “Treatment for Accounting and Auditing of Application of Accounting Standard for Financial Instruments in Banking Industry” (the JICPA Industry Auditing Committee Report No. 24, hereinafter “Report No. 24”). In hedging activities to offset changes in the fair value of deposits, loans, etc., as hedged items, consolidated trust bank subsidiaries designate hedged items and interest rate swaps, etc. as hedging transactions by grouping them by their maturities. |
(b) Hedge Accounting for Foreign Currency Risks Consolidated trust bank subsidiaries manage foreign exchange risk arising from various assets and liabilities denominated in foreign currencies by using financial derivative transactions and apply deferred hedge accounting in accordance with “Treatment for accounting and Auditing of Application of Accounting Standard for Foreign Currency Transactions in Banking Industry” (the JICPA Industry Auditing Committee Report No. 25,hereinafter “Report No. 25”). Consolidated trust bank subsidiaries designate specific currency swaps and foreign exchange swaps made to mitigate foreign exchange risks arising from monetary claims and debts denominated in foreign currencies as hedging transactions. The effectiveness of the hedge is assessed by confirming existence of the monetary claims and debts denominated in foreign currencies that are hedged items corresponding to the position of those hedging transactions. Consolidated trust bank subsidiaries also apply fair value hedge and deferred hedge as portfolio Hedge to mitigate foreign currency exchange rate exposure in securities denominated in foreign currencies (other than bonds) when hedged foreign currency securities are specified in advance to the inception of the transactions and spot liabilities and forward liabilities exist on a foreign currency basis that exceed acquisition costs of the |
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foreign currency securities designated as hedged items. In addition, deferred hedge, fair value hedge, and special hedge accounting for interest rate swaps are adopted for certain assets and liabilities. |
(13) Consumption Taxes National and local consumption taxes of the Company and consolidated domestic subsidiaries are accounted for using tax-exclusion method. Non-deductible portions of consumption taxes on the purchases of tangible fixed assets are expensed when incurred. |
[Changes in Significant Accounting Policies Applied in the Preparation of the Consolidated Financial Statement] |
(Accounting Standard for Financial Instruments) |
The Company has started to adopt ASBJ Statement No. 10 “Accounting Standard for Financial Instruments” (Issued by ASBJ on March 31, 2008) and ASBJ Implementation Guidance No. 19 “Guidance on Disclosures about Fair Value of Financial Instruments” (issued by ASBJ on March 31, 2008) from the current fiscal year end. As a result, compared with the previous treatment, Securities increased by 419 million yen, Deferred Tax Assets decreased by 235 million yen, Valuation Difference on Available-for-Sale Securities increased by 344 million yen, and Ordinary income and Income (loss) before income taxes increased by 1,534 million yen, respectively. |
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(Notes to Consolidated Balance Sheet) |
1. | Stocks of affiliated companies (excluding stocks of consolidated subsidiaries and consolidated companies) 20,307 million yen. | |
2. | The securities held in hand as of the consolidated balance sheet date were 1,387 million yen, which the Company purchased under resale agreement and borrowed with cash collateral. Although these securities are permitted to be sold or pledged without restrictions, all of them were held in hand at the end of the current fiscal year. | |
3. | Loans to borrowers in bankruptcy and non-accrual loans were 14,278 million yen and 79,645 million yen, respectively. “Loans to borrowers in bankruptcy” are loans, after write-off, to legally bankrupt borrowers as defined in Article 96-1-3 and 96-1-4 of the Enforcement Ordinance No. 97 of the Japanese Corporate Tax Law (issued in 1965) and on which accrued interest income is not recognized as there is substantial doubt about the ultimate collectability of either principal or interest because they are past due for a considerable period of time or for other reasons. “Non-accrual loans” are loans on which accrued interest income is not recognized, excluding “Loans to borrowers in bankruptcy” and loans on which interest payments are deferred in order to support the borrowers’ recovery from financial difficulties. |
3. | Loans past due three months or more amounted 58 million yen. “Loans past due three months or more” are loans on which the principal or interest payment is past due for three months or more, excluding “Loans to borrowers in bankruptcy” and “Non-accrual loans.” |
4. | Restructured loans amounted 16,904 million yen. “Restructured loans” are loans on which terms and conditions have been amended in favor of the borrowers (e.g., reduction of the original interest rate, deferral of interest payments, extension of principal repayments or debt forgiveness) in order to support the borrowers’ recovery from financial difficulties, excluding “Loans to borrowers in bankruptcy”, “Non-accrual loans” and “Loans past due three months or more”. | |
6. | The total amount of loans to borrowers in bankruptcy, non-accrual loans, loans past due three months or more and Restructured loans was 110,885 million yen. Those amounts described in Notes 3 to 6 are before deducting allowance for loan losses. | |
7. | Bills discounted are accounted for as financial transactions in accordance with the JICPA Industry Audit Committee Report No. 24. the Company have right to sell or pledge commercial bills discounted without restrictions and the total face value was 4,325 million yen. | |
8. | Assets pledged as collateral were as follows: Assets pledged as collateral Securities 2,529,071 million yen Loans and bills discounted 765,768 million yen Other Assets 70 million yen Liabilities corresponding to assets pledged as collateral Deposits 3,959 million yen Payables under securities lending transactions 1,702,697 million yen Borrowed money 1,123,400 million yen In addition, securities of 655,266 million yen were pledged mainly as collateral in substitution for settlement of cash, derivative transaction or margin of future markets. Other assets include security deposits of 8,860 million yen. |
9. | Commitment line contracts on overdrafts and loans are agreements to loan up to committed limit as long as there have been no breach of contracts upon the customers’ request. The balance of unused commitment line contracts was 2,370,526 million yen, including 2,220,327 million yen of those maturing within 1 year. |
Because most of these contracts expire without being drawn down, the balance of unused commitment line contracts itself does not necessarily represent future cash flows of consolidated subsidiaries. In addition, most of these contracts contain clauses allowing consolidated subsidiaries to reject requests or reduce committed |
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limits, when there are reasonable reasons such as changes in financial condition, needs to protect claims and other similar necessities. Consolidated subsidiaries may request their customers to provide collateral such as real estate or securities at the time of the contract, and may ask them to amend clauses or take measures to secure soundness of the credit thereinafter through periodical internal monitoring procedures that have already been in place. |
10. | Regarding the land that The Chuo Mitsui Trust and Banking Company, Limited inherited from The Mitsui Trust and Banking Company, Limited, the Company revaluated the land used for business operations, in accordance with the “Act on Revaluation of Land” (Law No. 34, promulgated on March 31, 1998, hereinafter the “Act”). Net unrealized losses on revaluation are recorded as Revaluation reserve for land in Net assets. | |
Date of revaluation: March 31, 1998 | ||
Revaluation method as stipulated in the Article 3, Paragraph 3 of the Act: | ||
Fair values were determined by applying appropriate adjustments for timing of appraisal, district disparity and individual disparity to the values; based on published land price of standardized premises stipulated in Article 2, Paragraph 1 of the “Enforcement Order on Act on Revaluation of Land” (Law No. 119, promulgated on March 31, 1998, hereinafter the “Order”), standard land price of measurement spots stipulated in Article 2, Paragraph 2 of the Order and price of the land used for business operations recorded on tax roll stipulated in Article 2, Paragraph 3 of the Order. | ||
Difference between the fair value on March 31, 2010 of the land for business operations revaluated in accordance with the Article 10 of the Act and its book value after revaluation was 4,416 million yen. |
11. | Accumulated depreciation of Tangible fixed assets was 91,612 million yen. |
12. | Total tax qualified deferred gains on tangible fixed assets, which is allowed by the tax law, was 7,243 million yen. |
13. | Borrowed money includes subordinate debt of 92,500 million yen. |
14. | Balances of perpetual subordinate bonds and subordinate bonds in Bonds payable are 101,750 million yen and 133,000 million yen, respectively. |
15. | Guarantee obligations for privately offered corporate bonds (provided in accordance with Article 2, Paragraph 3 of the “Financial Instruments and Exchange Law”) in “Securities” were 124,395 million yen. |
16. | Net assets per common share was 397.69 yen. |
17. | Other than Tangible assets in the consolidated balance sheets, the Company and its subsidiaries use a part of vehicles and transport equipments applying finance lease contracts where the ownership deemed not transferred. |
18. | Projected benefit obligations and others as of consolidated balance sheet date were as follows. |
Projected benefit obligations | (182,101) | million yen | ||||
Plan assets (Fair Value) | 209,054 | million yen | ||||
Unfunded projected benefit obligation | 26,953 | million yen | ||||
Unrecognized net actuarial gain or loss | 70,763 | million yen | ||||
Net amount recorded on the consolidated balance sheet | 97,717 | million yen | ||||
Prepaid pension cost | 100,379 | million yen | ||||
Provision for retirement benefits | (2,662) | million yen |
19. | Principal amounts of money trust and loan trust with principal guaranteed, which are entrusted to a consolidated trust banking subsidiary, were 1,024,773 million yen and 357,078 million yen, respectively. |
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1. | Other ordinary income includes 16,055 million yen of gains on sales of stocks. |
2. | Other ordinary expenses includes 10,339 million yen of write-offs of loans, 1,578 million yen of losses on sales of stocks, and 2,238 million yen of losses on devaluation of stocks. |
3. | Net income per common share was 31.41 yen. |
Number of | Number of | Number of | Number of | |||||||||||||||||||||||||||
shares | shares | shares | shares | |||||||||||||||||||||||||||
outstanding as | increased in | decreased in | outstanding as | |||||||||||||||||||||||||||
of | the current | the current | of | |||||||||||||||||||||||||||
the previous | fiscal year | fiscal year | the fiscal | |||||||||||||||||||||||||||
fiscal year-end | year-end | |||||||||||||||||||||||||||||
Share issued | ||||||||||||||||||||||||||||||
Common stock | 1,157,551 | 500,875 | - | 1,658,426 | Note 1 | |||||||||||||||||||||||||
Class 2 Preferred stock | 93,750 | - | 93,750 | - | Note 2 | |||||||||||||||||||||||||
Class 3 Preferred stock | 31,468 | - | 31,468 | - | Note 2 | |||||||||||||||||||||||||
Total | 1,282,770 | 500,875 | 125,218 | 1,658,426 | ||||||||||||||||||||||||||
Treasury share | ||||||||||||||||||||||||||||||
Common stock | 324 | 54 | 12 | 366 | Note 3 | |||||||||||||||||||||||||
Class 2 Preferred stock | - | 93,750 | 93,750 | - | Note 2 | |||||||||||||||||||||||||
Class 3 Preferred stock | - | 31,468 | 31,468 | - | Note 2 | |||||||||||||||||||||||||
Total | 324 | 125,273 | 125,231 | 366 | ||||||||||||||||||||||||||
Note 1: | Numbers of common stock issued increased since the Company acquired Class 2 preferred stock 93,750,000 shares and Class 3 preferred stock 31,468,750 shares on August 1, 2009, subscribed by the Resolution and Collection Corporation (“RCC”) according to Article 19 of the Articles of Incorporation, and issued the Company’s common stocks of 375,000,000 shares and 125,875,000 shares to RCC in exchange for these preferred stocks. |
Note 2: | Numbers of Class 2 and Class 3 preferred stock as treasury shares increased since the Company acquired from RCC according to Article 19 of the Articles of Incorporation to exchange these preferred stocks to common stocks on August 1, 2009. Numbers of Class 2 and Class 3 preferred stock issued had decreased since these preferred stocks were cancelled. |
Note 3: | Numbers of common stock as treasury shares changed since the Company acquired and disposed these fractional shares. |
Date of | Type of shares | Cash | Cash dividends | Record date | Effective date | ||||||||||||||||||||||
resolution | dividends | per share | |||||||||||||||||||||||||
(million yen) | (yen) | ||||||||||||||||||||||||||
Ordinary general meeting of shareholders held on 26 June, 2009 | Common stock | 5,786 | 5.00 | March 31, 2009 | June 29, 2009 | ||||||||||||||||||||||
Class 2 Preferred stock | 1,350 | 14.40 | March 31, 2009 | June 29, 2009 | |||||||||||||||||||||||
Class 3 Preferred stock | 629 | 20.00 | March 31, 2009 | June 29, 2009 | |||||||||||||||||||||||
(2) | Dividends with record dates before March 31, 2010 and effective dates after April 1, 2010 |
Date of | Type of | Cash | Source of | Cash dividends | Record date | Effective date | |||||||||||||||||||||||||
resolution | shares | dividends | dividend | per share | |||||||||||||||||||||||||||
(million yen) | (yen) | ||||||||||||||||||||||||||||||
Ordinary general meeting of shareholders held on 29 June, 2010 | Common stock | 5,786 | Note | 5.00 | March 31, 2010 | June 30, 2010 | |||||||||||||||||||||||||
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Note: | Agendum relating to dividends are submitted to shareholder vote at an ordinary general meeting of shareholders scheduled to be held on June 29, 2010. Source of dividend is planned to be retained earnings. |
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Carrying amount | Fair value | Unrealized | |||||||||||||||
gains (losses) | |||||||||||||||||
(1) Cash and due from banks | 262,240 | 262,240 | - | ||||||||||||||
(2) Call loans and bills bought (*1) | 9,871 | 9,884 | 13 | ||||||||||||||
(3)Receivable under securities borrowing transactions | 1,521 | 1,521 | - | ||||||||||||||
(4) Monetary claims bought (*1) | 98,598 | 98,655 | 56 | ||||||||||||||
(5) Trading assets | |||||||||||||||||
Trading securities | 50 | 50 | - | ||||||||||||||
(6) Money held in trust | 2,234 | 2,234 | - | ||||||||||||||
(7) Securities held-to-maturity debt securities | 659,925 | 659,794 | (131) | ||||||||||||||
Available-for-sale securities | 3,626,041 | 3,626,041 | - | ||||||||||||||
(8) Loans and bills discounted | 8,941,948 | ||||||||||||||||
Allowance for loan losses (*1) | (51,873) | ||||||||||||||||
8,890,074 | 8,951,323 | 61,249 | |||||||||||||||
Total assets | 13,550,558 | 13,611,745 | 61,187 | ||||||||||||||
(1) Deposits | 8,759,917 | 8,799,353 | 39,436 | ||||||||||||||
(2) Negotiable certificates of deposit | 327,190 | 327,190 | - | ||||||||||||||
(3) Call money and bills sold | 306,161 | 306,161 | - | ||||||||||||||
(4) Payables under securities lending transactions | 1,702,697 | 1,702,697 | - | ||||||||||||||
(5) Borrowed money | 1,217,246 | 1,221,320 | 4,074 | ||||||||||||||
(6) Bonds payable | 234,750 | 237,844 | 3,093 | ||||||||||||||
(7) Due to trust accounts | 995,612 | 995,612 | - | ||||||||||||||
Total liabilities | 13,543,577 | 13,590,180 | 46,603 | ||||||||||||||
Derivatives (*2) | |||||||||||||||||
Held for other than hedge accounting | (3,749) | (3,749) | - | ||||||||||||||
Held for hedge accounting | 8,905 | 8,905 | - | ||||||||||||||
Total derivatives | 5,156 | 5,156 | - | ||||||||||||||
(*1) General as well as specific allowance for loan losses in respect of loans and bills discounted is deducted. As allowances for loan losses in respect of call loans and bills bought, and monetary claims bought are immaterial, they are directly deducted from the carrying amounts. |
(*2) Derivative transactions included in trading assets and trading liabilities or other assets and other liabilities are collectively presented. Receivables and payables incurred by derivative transactions are presented in net. Net payables are presented in parenthesis. |
(1) | Cash and Due from Banks |
Deposits without maturity are stated at their carrying amounts as their fair values approximate carrying amounts. Deposits with maturities with shorter deposit terms (within one year) are stated at their carrying amounts as their fair values approximate carrying amounts. |
(2) | Call Loans and Bills Bought and (3) Receivables under Securities Borrowing Transactions |
These are subject to shorter agreed periods (within one year), and are stated at their acquisition costs as their fair values approximate acquisition costs. |
(4) | Monetary Claims Bought |
Of the monetary claims bought, beneficiary certificates representing interest in a trust holding loan receivables are stated at the prices quoted by brokers. Other monetary claims bought with shorter contract periods (within one year), are stated at their acquisition costs as their fair values approximate acquisition costs. |
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(5) | Trading Assets |
Securities including bonds held for trading purposes are stated at the prices quoted by Japan Securities Dealers Association. | |
(6) | Money Held in Trust |
Securities comprising trust assets in money held in trust are stated at the prices quoted by brokers. | |
Matters to be noted in respect of money held in trust by purpose of holding are described in “(Money Held in Trust)”. | |
(7) | Securities |
Of securities of various categories; (i) equity securities are stated at the prices quoted on the stock exchanges: (ii) privately offered corporate bonds are stated at the values calculated by discounting principal and interest by the interest rate reflecting credit risk, by category based on internal rating and terms, (iii)other bonds are stated at the prices published by Japan Securities Dealers Association or the prices quoted by brokers. Investment trust beneficiary certificates are stated at the official reference price published by securities investment trust and management firms. | |
Following an examination of the recent market environment, market values of floating-rate Japanese government bonds (JGBs) are believed to remain inappropriate to be treated as their fair values. Therefore, reasonably assessed values of floating-rate JGBs are recorded as the carrying amount for the current fiscal year end. Thus compared with the cases where market prices are recorded as the carrying amounts, Securities increased by 8,013 million yen, Deferred tax assets decreased by 3,255 million yen, while Valuation difference on available-for-sale securities increased by 4,757 million yen. Reasonably assessed values of floating-rate JGBs are determined based on the discounted cash flow method. Price-determining variables include JGB yield and its volatility. Matters to be noted in respect of securities by purpose of holding are described in (Securities). | |
(8) | Loans and Bills Discounted |
Of loans and bills discounted, those with floating rates reflect market rates at short intervals, whose fair values approximate acquisition costs unless borrowers’ creditworthiness changes significantly after the loans are made, and acquisition costs are stated as the fair values. Meanwhile, those with fixed rates are stated at the fair values, as calculated by discounting principal and interest by the interest rate reflecting credit risk by category based on the nature of loan, internal rating and terms. Those loans with shorter contract periods (within one year) are stated at acquisition cost which approximates their fair values. Claims under legal bankruptcy, virtual bankruptcy and possible bankruptcy, whose expected amounts of loan losses are calculated based on the expected recoverable amounts from their collateral or guarantee, are stated at their acquisition costs at the consolidated balance sheet date less the current expected amount of loan losses, which approximate their fair values. Of loans and bills discounted, those without scheduled due dates subject to the special conditions such as the ones limiting the loan amounts within the values of pledged assets, are stated at acquisition costs which are assumed to approximate their fair values because of the estimated repayment period and interest rate conditions, etc. |
(1) | Deposits and (2) Negotiable Certificate of Deposit |
For demand deposits, the amount payable (carrying amount) in case demand is made on the consolidated balance sheet date is treated as their fair value. For time deposits, present values calculated by discounting future cash flows by category based on terms, etc., by the interest rate applicable to newly deposited savings are deemed to be their fair values. For time deposits with shorter deposit terms (within one year) and those with floating rates, carrying amounts approximate their fair values, and thus quoted as such. Negotiable certificates of deposit are all with shorter deposit terms (within one year) and are stated at their carrying amounts which approximate their fair values. |
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(3) | Call Money and Bills Sold and (4) Payables under Securities Lending Transactions |
These are subject to shorter contract periods (within one year), and are stated at their acquisition costs as these acquisition costs approximate their fair values. |
(5) | Borrowed Money |
Borrowings are stated at their present values, as calculated by discounting principal and interest by the interest rate assumed for similar borrowings. Those borrowings with shorter contract periods (within one year) are stated at acquisition costs which approximate their fair values. |
(6) | Bonds Payable |
Bonds payable are stated at the prices quoted by Japan Securities Dealers Association, or in the absence of such market values, at their present values as calculated by discounting principal and interest by the interest rate assumed for the similar bond at issuance. |
(7) | Due to Trust Account |
Due to trust account is stated at the amounts payable (book value) in case demand is made on the consolidated balance sheet date. |
Financial instruments whose fair values are extremely difficult to determine are listed below.
Category | Carrying amount | ||||
Unlisted Japanese stocks (*) | 109,399 | ||||
Subscription certificates | 120,210 | ||||
Foreign securities | 10,106 | ||||
Total | 239,716 | ||||
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(Note 3) | Scheduled redemption amount of monetary claims and securities with maturity after the consolidated balance sheet date |
Due within | Due after 1 | Due after 3 | Due after 5 | Due after 7 | Due after | ||||||||||||||||||||||||||
1 year | year through | year through | year through | year through | 10 year | ||||||||||||||||||||||||||
3 years | 5 years | 7 years | 10 years | ||||||||||||||||||||||||||||
Due from banks | 227,418 | - | - | - | - | - | |||||||||||||||||||||||||
Call loans and bills bought | 9,884 | - | - | - | - | - | |||||||||||||||||||||||||
Receivables under securities borrowing transactions | 1,521 | - | - | - | - | - | |||||||||||||||||||||||||
Monetary claims bought | 24,522 | - | 1,009 | 674 | - | 72,748 | |||||||||||||||||||||||||
Securities | 778,482 | 861,309 | 1,059,065 | 264,043 | 398,851 | 422,067 | |||||||||||||||||||||||||
Held-to-maturity securities | 411,155 | 79,623 | 146,700 | - | - | 22,445 | |||||||||||||||||||||||||
Available-for-sale securities with maturities | 367,327 | 781,686 | 912,365 | 264,043 | 398,851 | 399,622 | |||||||||||||||||||||||||
Loans and bills discounted(*) | 2,875,574 | 1,752,678 | 864,238 | 306,764 | 403,055 | 2,401,545 | |||||||||||||||||||||||||
Total | 3,917,403 | 2,613,988 | 1,924,313 | 571,482 | 801,906 | 2,896,361 | |||||||||||||||||||||||||
(*)Of the loans and bills discounted, 93,843 million yen that cannot envisage scheduled redemption amount such as claims under legal bankruptcy, virtual bankruptcy and possible bankruptcy, and 241,533 million yen without specified terms are not included. |
(Note 4) | Amounts of repayment of corporate bonds, borrowed money and other interest-bearing liabilities, scheduled after the consolidated balance sheet date |
Due within | Due after 1 | Due after 3 | Due after 5 | Due after 7 | Due after | ||||||||||||||||||||||||||
1 year | year through | year through | year through | year through | 10 year | ||||||||||||||||||||||||||
3 years | 5 years | 7 years | 10 years | ||||||||||||||||||||||||||||
Deposits(*) | 4,988,242 | 2,456,425 | 1,246,313 | 63,046 | 5,889 | - | |||||||||||||||||||||||||
Negotiable certificates of deposit | 327,190 | - | - | - | - | - | |||||||||||||||||||||||||
Call money and bills sold | 306,161 | - | - | - | - | - | |||||||||||||||||||||||||
Payables under securities lending transactions | 1,702,697 | - | - | - | - | - | |||||||||||||||||||||||||
Borrowed money | 1,128,924 | 18,122 | 65,199 | 5000 | - | - | |||||||||||||||||||||||||
Bonds payable | - | 55,000 | 83,000 | 70,650 | 10,000 | 16,100 | |||||||||||||||||||||||||
Due to trust accounts | 995,612 | - | - | - | - | - | |||||||||||||||||||||||||
Total | 9,448,828 | 2,529,547 | 1,394,513 | 138,697 | 15,889 | 16,100 | |||||||||||||||||||||||||
(*)Of deposits, demand deposits are included in “Due within 1 year”. Also deposits include current deposits. |
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1. | Trading securities (as of March 31, 2010) |
Valuation difference reflected on the | |||||||
statements of income | |||||||
Trading securities | (52 | ) | |||||
2. | Bonds classified as held-to-maturity (as of March 31, 2010) |
Type of bond | Carrying | Fair value | Unrealized | |||||||||||||||||||
amount | gains (losses) | |||||||||||||||||||||
Bonds with unrealized gains | Japanese government bonds | 399,291 | 401,557 | 2,265 | ||||||||||||||||||
Corporate bonds | 22,445 | 22,761 | 315 | |||||||||||||||||||
Others | 61,436 | 62,120 | 683 | |||||||||||||||||||
Subtotal | 483,173 | 486,438 | 3,264 | |||||||||||||||||||
Bonds with unrealized losses | Others | 237,908 | 234,348 | (3,559) | ||||||||||||||||||
Total | 721,082 | 720,787 | (294) | |||||||||||||||||||
3. Available-for-sale securities (as of March 31, 2010) | ||||||||||||||||||||||
(Unit: Millions of yen) | ||||||||||||||||||||||
Type of bond | Carrying | Acquisition | Unrealized | |||||||||||||||||||
amount | Cost | gains (losses) | ||||||||||||||||||||
Bonds with unrealized gains | Stocks | 361,705 | 243,680 | 118,025 | ||||||||||||||||||
Bonds | 485,802 | 475,890 | 9,912 | |||||||||||||||||||
Japanese government bonds | 348,255 | 339,921 | 8,333 | |||||||||||||||||||
Municipal bonds | 644 | 639 | 4 | |||||||||||||||||||
Corporate bonds | 136,902 | 135,328 | 1,573 | |||||||||||||||||||
Others | 285,046 | 282,148 | 2,897 | |||||||||||||||||||
Subtotal | 1,132,554 | 1,001,719 | 130,835 | |||||||||||||||||||
Bonds with unrealized losses | Stocks | 186,268 | 231,287 | (45,019) | ||||||||||||||||||
Bonds | 1,421,297 | 1,434,858 | (13,561) | |||||||||||||||||||
Japanese government bonds | 1,284,255 | 1,296,509 | (12,254) | |||||||||||||||||||
Corporate bonds | 137,042 | 138,348 | (1,306) | |||||||||||||||||||
Others | 899,196 | 924,407 | (25,210) | |||||||||||||||||||
Subtotal | 2,506,762 | 2,590,553 | (83,791) | |||||||||||||||||||
Total | 3,639,316 | 3,592,272 | 47,044 | |||||||||||||||||||
4. | Held-to-maturity bonds sold during the current fiscal year (from April 1, 2009 to March 31, 2010) |
Acquisition cost of | Sales amount | Gains (Losses) on | |||||||||||||||
sales amount | sales | ||||||||||||||||
Japanese government bonds | 198,921 | 200,169 | 1,247 | ||||||||||||||
Others | 2,175 | 4,027 | 1,852 | ||||||||||||||
Total | 201,096 | 204,196 | 3,099 | ||||||||||||||
Bonds were sold before maturity, in accordance with article 282, paragraph 1 of “Practical Guidelines on Accounting Standards for Financial Instruments” (JICPA Accounting Standard Committee Report No. 14) and sold with credit deterioration in accordance with article 83, paragraph 1 of the guidelines.
- 95 -
5. | Available-for-sale securities sold during the current fiscal year (from April 1, 2009 to March 31, 2010) |
Sales amount | Gains on sales | Losses on sales | |||||||||||||||
Stocks | 72,793 | 17,754 | 974 | ||||||||||||||
Bonds | 4,693,067 | 7,747 | 2,096 | ||||||||||||||
Japanese government bonds | 4,604,510 | 7,417 | 2,093 | ||||||||||||||
Corporate bonds | 88,557 | 329 | 3 | ||||||||||||||
Others | �� | 1,762,574 | 11,550 | 1,771 | |||||||||||||
Total | 6,528,435 | 37,052 | 4,842 | ||||||||||||||
6. | Impairment of Securities |
Available-for-sale securities with fair value are considered as impaired if the fair value decreases significantly below the acquisition cost and such decline is not considered as recoverable. The fair value is recognized as the consolidated balance sheet amount and the amount of impairment is accounted for as valuation loss for the current fiscal year. |
Impairment loss for the fiscal year was 1,583 million yen, which includes 1,569 million yen of stocks. |
The rule for determining “significant decline” is as follows and is based on the classification of issuers under the rules of self-assessment of assets. |
Legal bankrupt/ Virtual bankrupt/ Possible bankrupt issuers: Fair value is lower than acquisition cost. |
Issuers requiring caution: Fair value is 30% or more lower than acquisition cost. |
Normal issuers: Fair value is 30% or more lower than acquisition cost. |
Within the normal issuers under the rules of self-assessment above, when the fair value of which security is 30% or more but less than 50% lower than acquisition cost, the security is judged individually, and unless the decline in its fair value below the cost is temporary, the security is accounted as impaired. All others are considered as the decline in fair value below the cost is other than temporary, and treated as impaired. |
Legally bankrupt issuers: Issuers that are legally bankrupt or formally declared bankrupt. |
Virtual bankrupt issuers: Issuers that are not legally bankrupt but regarded as substantially bankrupt. |
Possible bankrupt issuers: Issuers that are not currently bankrupt, but are perceived to have a high risk of falling into bankruptcy. |
Issuers requiring caution: Issuers that are identified for close monitoring. |
Normal issuers: Issuers other than the above four categories of issuers. |
1. | There was no money held in trust held for investment management purpose. |
2. | There was no money held in trust held-to-maturity |
3. | Other money held in trust (other than purpose for investment or held to maturity) |
Carrying amount | Acquisition cost | Unrealized | Unrealized | Unrealized | |||||||||||||||||||||||
gains (losses) | Gains | losses | |||||||||||||||||||||||||
Other money held in trust | 2,234 | 1,694 | 540 | 540 | - | ||||||||||||||||||||||
- 96 -
To the Board of Directors of | ||
Chuo Mitsui Trust Holdings, Inc. | Deloitte Touche Tohmatsu LLC | |
Seno Tezuka (Seal) | ||
Designated Unlimited Liability Partner, Engagement Partner | ||
Certified Public Accountant | ||
Mitsuo Kimura (Seal) | ||
Designated Unlimited Liability Partner, Engagement Partner | ||
Certified Public Accountant | ||
Tomoharu Sato (Seal) | ||
Designated Unlimited Liability Partner, Engagement Partner | ||
Certified Public Accountant |
- 97 -
As of March | ||||||||
(in millions of yen) | 31, 2010 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and due from banks | 1,922 | |||||||
Securities | 35,000 | |||||||
Deferred tax assets | 267 | |||||||
Accrued income | 1 | |||||||
Income taxes refunds receivable | 2,024 | |||||||
Other current assets | 48 | |||||||
Total current assets | 39,263 | |||||||
Non-current assets | ||||||||
Tangible fixed assets | 1 | |||||||
Tools, furniture and fixtures | 1 | |||||||
Intangible fixed assets | 4 | |||||||
Software | 4 | |||||||
Investments and other assets | 765,879 | |||||||
Investments securities | 652 | |||||||
Investments in subsidiaries and affiliates (Stocks) | 764,406 | |||||||
Deferred tax assets | 459 | |||||||
Other investments | 361 | |||||||
Total non-current assets | 765,885 | |||||||
Total assets | 805,149 | |||||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Accrued expenses | 1,379 | |||||||
Income taxes payable | 40 | |||||||
Provision for bonuses | 80 | |||||||
Other liabilities | 168 | |||||||
Total current liabilities | 1,668 | |||||||
Non-current liabilities | ||||||||
Bonds payable | 189,700 | |||||||
Provision for retirement benefits | 1,041 | |||||||
Provision for directors’ retirement benefits | 363 | |||||||
Total non- current liabilities | 191,105 | |||||||
Total liabilities | 192,774 | |||||||
NET ASSETS | ||||||||
Shareholders’ equity | ||||||||
Capital stock | 261,608 | |||||||
Capital surplus | ||||||||
Legal capital surplus | 65,411 | |||||||
Other capital surplus | 53,257 | |||||||
Total capital surplus | 118,668 | |||||||
Retained earnings | ||||||||
Other retained earnings | 232,368 | |||||||
Retained earnings brought forward | 232,368 | |||||||
Total retained earnings | 232,368 | |||||||
Treasury stock | (270) | |||||||
Total shareholders’ equity | 612,375 | |||||||
Total net assets | 612,375 | |||||||
Total liabilities and net assets | 805,149 | |||||||
- 98 -
(in millions of yen) | Fiscal Year 2009 | |||||||
Operating income | ||||||||
Dividends received from subsidiaries | 10,043 | |||||||
Fees and commissions received from subsidiaries | 3,607 | |||||||
Total operating income | 13,651 | |||||||
Operating expenses | ||||||||
Interest on bonds | 7,674 | |||||||
General and administrative expenses | 2,871 | |||||||
Total operating expenses | 10,545 | |||||||
Operating profit | 3,106 | |||||||
Non-operating income | 66 | |||||||
Interest income | 0 | |||||||
Interest on securities | 47 | |||||||
Commission fee | 0 | |||||||
Interest on refund of income taxes and other | 10 | |||||||
Other non-operating Income | 7 | |||||||
Non-operating expenses | 889 | |||||||
Commission fee | 376 | |||||||
Management integration expenses | 507 | |||||||
Other non-operating expenses | 4 | |||||||
Ordinary profit | 2,283 | |||||||
Extraordinary loss | - | |||||||
Loss on disposal of non-current assets | - | |||||||
Income before income taxes | 2,283 | |||||||
Income taxes | ||||||||
Income taxes-current | 3 | |||||||
Income taxes -deferred | (585) | |||||||
Total income taxes | (582) | |||||||
Net income | 2,865 | |||||||
- 99 -
(in millions of yen) | Fiscal Year 2009 | |||||||
Shareholders’ Equity: | ||||||||
Capital stock | ||||||||
Balance at the end of previous period | 261,608 | |||||||
Changes of items during the period: | ||||||||
Total changes of items during the period | - | |||||||
Balance at the end of the current period | 261,608 | |||||||
Capital surplus: | ||||||||
Legal Capital surplus: | ||||||||
Balance at the end of previous period | 65,411 | |||||||
Changes of items during the period: | ||||||||
Transfer from legal capital surplus to other capital surplus | - | |||||||
Total changes of items during the period | - | |||||||
Balance at the end of the current period | 65,411 | |||||||
Other Capital surplus: | ||||||||
Balance at the end of previous period | 53,262 | |||||||
Changes of items during the period: | ||||||||
Transfer from legal capital surplus to other capital surplus | - | |||||||
Cancellation of treasury stock | - | |||||||
Disposal of treasury stock | (5) | |||||||
Total changes of items during the period | (5) | |||||||
Balance at the end of the current period | 53,257 | |||||||
Total Capital surplus: | ||||||||
Balance at the end of previous period | 118,673 | |||||||
Changes of items during the period: | ||||||||
Transfer from legal capital surplus to other capital surplus | - | |||||||
Cancellation of treasury stock | - | |||||||
Disposal of treasury stock | (5) | |||||||
Total changes of items during the period | (5) | |||||||
Balance at the end of the current period | 118,668 | |||||||
Retained earnings: | ||||||||
Other Retained earnings: | ||||||||
Balance at the end of previous period | 237,268 | |||||||
Changes of items during the period: | ||||||||
Dividends from surplus | (7,765) | |||||||
Net income | 2,865 | |||||||
Total changes of items during the period | (4,899) | |||||||
Balance at the end of the current period | 232,368 | |||||||
Total Retained earnings: | ||||||||
Balance at the end of previous period | 237,268 | |||||||
Changes of items during the period: | ||||||||
Dividends from surplus | (7,765) | |||||||
Net income | 2,865 | |||||||
Total changes of items during the period | (4,899) | |||||||
Balance at the end of the current period | 232,368 | |||||||
Treasury stock: | ||||||||
Balance at the end of previous period | (262) | |||||||
Changes of items during the period: | ||||||||
Acquisition of treasury stock | (18) | |||||||
Cancellation of treasury stock | - | |||||||
Disposal of treasury stock | 9 | |||||||
Total changes of items during the period | (8) | |||||||
Balance at the end of the current period | (270) | |||||||
- 100 -
(in millions of yen) | Fiscal Year 2009 | |||||||
Total shareholders’ equity | ||||||||
Balance at the end of previous period | 617,289 | |||||||
Changes of items during the period: | ||||||||
Dividends from surplus | (7,765) | |||||||
Net income | 2,865 | |||||||
Acquisition of treasury stock | (18) | |||||||
Cancellation of treasury stock | - | |||||||
Disposal of treasury stock | 4 | |||||||
Total changes of items during the period | (4,913) | |||||||
Balance at the end of the current period | 612,375 | |||||||
Total net assets | ||||||||
Balance at the end of previous period | 617,289 | |||||||
Changes of items during the period: | ||||||||
Dividends from surplus | (7,765) | |||||||
Net income | 2,865 | |||||||
Acquisition of treasury stock | (18) | |||||||
Disposal of treasury stock | 4 | |||||||
Total changes of items during the period | (4,913) | |||||||
Balance at the end of the current period | 612,375 | |||||||
- 101 -
- 102 -
(Notes to Balance Sheet)
2. Monetary claims and liabilities to affiliates.
Long-term monetary claims: 112 million yen
Long-term monetary liabilities: 189,700 million yen
Volume of business with affiliates
Operating Income: 13,651 million yen
Operating Expenses: 7,923 million yen
Non-operating Income: 48 million yen
Non-operating Expenses: 129 million yen
Type and Numbers of Treasury stock
Class of stock | Number of shares outstanding as of end of prior fiscal year | Number of shares Increase in current fiscal year | Number of shares Decrease in current fiscal year | Number of shares outstanding as of end of current fiscal year | |||||||||||||||||||||||
Common stock | 324 | 54 | 12 | 366 | Note 1 | ||||||||||||||||||||||
Class 2 preferred stock | - | 93,750 | 93,750 | - | Note 2 | ||||||||||||||||||||||
Class 3 preferred stock | - | 31,468 | 31,468 | - | Note 2 | ||||||||||||||||||||||
Total | 324 | 125,273 | 125,231 | 366 | |||||||||||||||||||||||
Note 1: | Numbers of common stock as treasury shares changed since the Company acquired and dispose the fractional shares. | ||
Note 2: | Numbers of Class 2 and Class 3 preferred stock as treasury shares increased since the Company acquired from RCC according to Article 19 of the Articles of Incorporation to exchange these preferred stocks to common stocks. Numbers of Class 2 and Class 3 preferred stock issued had decreased since these preferred stocks were cancelled. |
Deferred tax assets | ||||
Shares of subsidiaries | 224,253 million yen | |||
Provision for retirement benefits | 397 million yen | |||
Tax loss carryforwards | 278 million yen | |||
Other | 230 million yen | |||
Sub-total | 225,159 million yen | |||
Valuation allowance | (224,431) million yen | |||
Total | 727 million yen | |||
Net Amount of deferred tax assets | 727 million yen |
- 103 -
[Subsidiary]
Outstanding | ||||||||||||||||||||||||||||||||||||||
Paid-in | Percentage | Amount of | amount at | |||||||||||||||||||||||||||||||||||
capital | Business | of voting | Summary of | transaction | the end of | |||||||||||||||||||||||||||||||||
Type | Name | Location | (Millions | outline | rights | Relationship | transactions | (Millions of | Item | March 2010 | ||||||||||||||||||||||||||||
of Yen) | holding | Yen) | (Millions of | |||||||||||||||||||||||||||||||||||
(held) | Yen) | |||||||||||||||||||||||||||||||||||||
Subsidiary | The Chuo Mitsui Trust and Banking Company, Limited | Minato-ku, Tokyo | 399,697 | Trust and banking business | Direct 100% | Bank subsidiary Concurrent positions held by auditors 3 | Certificates of deposit (Note) 1 Interest received (Note)1 Receipt of management guidance fee (Note) 2 | 37,745 47 3,148 | Securities Accrued income- | 35,000 1 - | ||||||||||||||||||||||||||||
MTH Preferred Capital 1 (Cayman) Limited | Cayman Islands | 29,200 | Financing business by issuance of securities | Direct 100% | Lending and borrowing Transaction | Financing (Note) 3 Payment of interest | - 1,181 | Corporate Bonds Accrued expenses | 29,200 201 | |||||||||||||||||||||||||||||
MTH Preferred Capital 3 (Cayman) Limited | Cayman Islands | 31,700 | Financing business by issuance of securities | Direct 100% | Lending and borrowing Transaction | Financing (Note) 3 Payment of interest | - 1,363 | Corporate Bonds Accrued expenses | 31,700 233 | |||||||||||||||||||||||||||||
MTH Preferred Capital 4 (Cayman) Limited | Cayman Islands | 10,800 | Financing business by issuance of securities | Direct 100% | Lending and borrowing Transaction | Financing (Note) 3 Payment of interest | - 393 | Corporate Bonds Accrued expenses | 10,800 66 | |||||||||||||||||||||||||||||
MTH Preferred Capital 5 (Cayman) Limited | Cayman Islands | 33,700 | Financing business by issuance of securities | Direct 100% | Lending and borrowing Transaction | Financing (Note) 3 Payment of interest | - 1,000 | Corporate Bonds Accrued expenses | 33,700 183 | |||||||||||||||||||||||||||||
CMTH Preferred Capital 6 (Cayman) Limited | Cayman Islands | 42,700 | Financing business by issuance of securities | Direct 100% | Lending and borrowing Transaction | Financing (Note) 3 Payment of interest | - 1,481 | Corporate Bonds Accrued expenses | 42,700 271 | |||||||||||||||||||||||||||||
CMTH Preferred Capital 7 (Cayman) Limited | Cayman Islands | 41,600 | Financing business by issuance of securities | Direct 100% | Lending and borrowing Transaction | Financing (Note) 3 Payment of interest | - 2,253 | Corporate Bonds Accrued expenses | 41,600 471 | |||||||||||||||||||||||||||||
(Notes) | 1. | Stated interest rates are reasonably decided in consideration of market rates. Transactions amounts of negotiable certificates of deposit are the average balance during the current fiscal year. | ||||
2. | Management guidance fee is decided in consideration of the factors including the actual expenses incurred in the course of the provision of such service to the Company’s subsidiaries. | |||||
3. | Corporate bonds are all perpetual subordinated bonds. Interest rates are reasonably decided in consideration of market rates, etc. |
(Notes to Per Share Information) | ||||
Total equity per share: | 369.33 yen | |||
Net income per share: | 1.92 yen |
- 104 -
To the Board of Directors of | ||
Chuo Mitsui Trust Holdings, Inc. | ||
Deloitte Touche Tohmatsu LLC | ||
Seno Tezuka (Seal) | ||
Designated Unlimited Liability Partner, Engagement Partner | ||
Certified Public Accountant | ||
Mitsuo Kimura (Seal) | ||
Designated Unlimited Liability Partner, Engagement Partner | ||
Certified Public Accountant | ||
Tomoharu Sato (Seal) | ||
Designated Unlimited Liability Partner, Engagement Partner | ||
Certified Public Accountant |
- 105 -
- 106 -
2. | Audit Results | |
(1) | Audit Results on the Business Report, etc. |
A. | In our opinion, the business report and the supplementary schedules fairly represent the Company’s condition in conformity with the applicable laws and regulations of Japan as well as the Articles of Incorporation. | ||
B. | We have found no evidence of misconduct or material facts in violation of the applicable laws and regulations, nor of any violation with respect to the Articles of Incorporation, related to performance of duties by the Directors. | ||
C. | In our opinion, the content of the resolutions of the Board of Directors regarding the internal control systems is appropriate. In addition, we have found no matters on which to remark in regard to the performance of duties by the Directors regarding the internal control systems including the internal control over financial reporting. |
(2) | Results of Audit of the Financial Statements and Supplementary Schedules | |
In our opinion, the method and the results of the audit used and conducted byDeloitte Touche Tohmatsu LLC, the Accounting Auditor, are appropriate. | ||
(3) | Results of Audit of the Consolidated Financial Statements | |
In our opinion, the method and the results of the audit used and conducted byDeloitte Touche Tohmatsu LLC, the Accounting Auditor, are appropriate. |
Corporate Auditor | Tetsuo Amano | (Seal) | Outside Corporate Auditor | Yasuhiko Takano | (Seal) | |||||
Corporate Auditor | Yasuhiro Wakasa | (Seal) | Outside Corporate Auditor | Hiroyuki Nakanishi | (Seal) | |||||
Outside Corporate Auditor | Yasuhiro Yonezawa | (Seal) |
- 107 -
1. | Purposes of Amendments | |
If the Share Exchange takes effect on April 1, 2011, SMTH (currently CMTH), the wholly owning parent company in the share exchange, will become the Company’s only shareholder; and the record date system for ordinary general meetings of shareholders will no longer be necessary. In this connection, we propose this agenda item to delete the provision concerning the record date for ordinary general meetings of shareholders stipulated in Article 11 of the current Articles of Incorporation, renumber the subsequent provisions (current Article 12 and after) accordingly, and implement the necessary amendments. These amendments to the Articles of Incorporation will take effect on March 30, 2011, on the condition that Agenda Item No. 1 has been approved, Agenda Item “Approval of the Share Exchange Agreement between the Company and Chuo Mitsui Trust Holdings, Inc.” at the class shareholders’ meeting of ordinary shareholders has been approved, the Share Exchange Agreement has not been rendered invalid before March 30, 2011, and the Share Exchange has not been cancelled. | ||
2. | Details of Amendments |
Current Articles of Incorporation | Proposed Amendment | ||||
(Preferred Dividends) | (Preferred Dividends) | ||||
Article 10. | Article 10. | ||||
In the event that the Company distributes year-end dividends stipulated in Article 30, Paragraph 1 hereof, the Company shall distribute to the holders of Preferred Shares (hereinafter referred to as the “Preferred Shareholders”) or the registered pledgees of Preferred Shares (hereinafter referred to as the “Registered Preferred Share Pledgees”), in priority to the holders of ordinary shares (hereinafter referred to as the “Ordinary Shareholders”) or the registered pledgees of ordinary shares (hereinafter referred to as the “Registered Ordinary Share Pledgees”), cash dividends from surplus in the amounts set forth below (such cash dividends being hereinafter referred to as the “Preferred Dividends”), respectively; provided, however, that if the Preferred Interim Dividends stipulated in Article 10-2 hereof were paid during the business year immediately preceding the business year during which the Preferred | In the event that the Company distributes year-end dividends stipulated in Article 29, Paragraph 1 hereof, the Company shall distribute to the holders of Preferred Shares (hereinafter referred to as the “Preferred Shareholders”) or the registered pledgees of Preferred Shares (hereinafter referred to as the “Registered Preferred Share Pledgees”), in priority to the holders of ordinary shares (hereinafter referred to as the “Ordinary Shareholders”) or the registered pledgees of ordinary shares (hereinafter referred to as the “Registered Ordinary Share Pledgees”), cash dividends from surplus in the amounts set forth below (such cash dividends being hereinafter referred to as the “Preferred Dividends”), respectively; provided, however, that if the Preferred Interim Dividends stipulated in Article 10-2 hereof were paid during the business year immediately preceding the business year during which the Preferred | ||||
- 108 -
Current Articles of Incorporation | Proposed Amendment | ||||
Dividends are to be paid, in whole or in part, the amount so paid shall be deducted from the amount of the Preferred Dividends. | Dividends are to be paid, in whole or in part, the amount so paid shall be deducted from the amount of the Preferred Dividends. | ||||
(Preferred Interim Dividends) | (Preferred Interim Dividends) | ||||
Article 10-2. | Article 10-2. | ||||
In the event that the Company pays interim dividends stipulated in Article 30, Paragraph 2 hereof, the Company shall pay to the Preferred Shareholders or the Registered Preferred Share Pledgees, in priority to the Ordinary Shareholders or the Registered Ordinary Share Pledgees, cash dividends from surplus (hereinafter referred to as the “Preferred Interim Dividends”) in an amount not exceeding one-half of the amount of the Preferred Dividends per Preferred Share of any class and determined by resolution of the Board of Directors at the time of the issuance of the respective Preferred Shares. | In the event that the Company pays interim dividends stipulated in Article 29, Paragraph 2 hereof, the Company shall pay to the Preferred Shareholders or the Registered Preferred Share Pledgees, in priority to the Ordinary Shareholders or the Registered Ordinary Share Pledgees, cash dividends from surplus (hereinafter referred to as the “Preferred Interim Dividends”) in an amount not exceeding one-half of the amount of the Preferred Dividends per Preferred Share of any class and determined by resolution of the Board of Directors at the time of the issuance of the respective Preferred Shares. | ||||
(Prescription Period) | (Prescription Period) | ||||
Article 10-10. | Article 10-10. | ||||
The provisions of Article 32 hereof shall apply mutatismutandisto Preferred Dividends and Preferred Interim Dividends. | The provisions of Article 31 hereof shall apply mutatismutandisto Preferred Dividends and Preferred Interim Dividends. | ||||
(Record Date) | (Deleted.) | ||||
Article 11. | |||||
The Company shall deem any shareholder who appears in the last record of the Register of Shareholders in writing or in electronic form as of March 31 of each year to be a shareholder who is entitled to exercise voting rights at the ordinary general meeting of shareholders for such year. | |||||
Article 12.toArticle 16. | Article 11.toArticle 15. | ||||
(Omitted.) | (Not amended.) |
- 109 -
Current Articles of Incorporation | Proposed Amendment | ||||
(Shareholders’ Meeting of a Particular Class of Shares) | (Shareholders’ Meeting of a Particular Class of Shares) | ||||
Article 16-2. | Article 15-2. | ||||
1. The provisions of Article 12, Paragraph 2; Article 13; Article 15 and Article 16 hereof shall applymutatis mutandisto a shareholders’ meeting of a particular class of shares. | 1. The provisions of Article 11, Paragraph 2; Article 12; Article 14 and Article 15 hereof shall applymutatis mutandisto a shareholders’ meeting of a particular class of shares. | ||||
2. The provisions of Article 14, Paragraph 1 hereof shall applymutatis mutandisto resolutions of a shareholders’ meeting of a particular class of shares under Article 324, Paragraph 1 of the Company Law of Japan. | 2. The provisions of Article 13, Paragraph 1 hereof shall applymutatis mutandisto resolutions of a shareholders’ meeting of a particular class of shares under Article 324, Paragraph 1 of the Company Law of Japan. | ||||
3. The provisions of Article 14, Paragraph 2 hereof shall applymutatis mutandisto resolutions of a shareholders’ meeting of a particular class of shares under Article 324, Paragraph 2 of the Company Law of Japan. | 3. The provisions of Article 13, Paragraph 2 hereof shall applymutatis mutandisto resolutions of a shareholders’ meeting of a particular class of shares under Article 324, Paragraph 2 of the Company Law of Japan. | ||||
Article 17.toArticle 32. | Article 16.toArticle 31. | ||||
(Omitted.) | (Not amended.) | ||||
- 110 -
Agenda Item: | Approval of the Share Exchange Agreement between the Company and Chuo Mitsui Trust Holdings, Inc. |
- 111 -
Agendum 1, which is contained in the description below, refers to the agenda item regarding the approval of the Share Exchange and the Memorandum.
- 112 -
Candidate | Name | Brief history, representative positions at other | Number of shares | ||||||||||
number | (date of birth) | corporations and positions held at the Company | of the Company | ||||||||||
held by such person | |||||||||||||
(numbers in | |||||||||||||
parentheses are the | |||||||||||||
number of shares of | |||||||||||||
STB held by such | |||||||||||||
person) | |||||||||||||
1 | Hitoshi Tsunekage (Aug. 6, 1954) | Apr. 1977: | Joined STB | Common stock | |||||||||
Jun. 2004: | Appointed Executive Officer of STB, General Manager, Corporate Planning Department of STB | 0 shares (Common stock 42,000 shares) | |||||||||||
Jun. 2005: | Appointed Executive Officer of STB, Head Office Executive of STB | ||||||||||||
Jun. 2005: | Appointed Director and Managing Executive Officer of STB | ||||||||||||
Jan. 2008: | Appointed President and Chief Executive Officer of STB (current) | ||||||||||||
2 | Kiyoshi | Apr. 1975: | Joined STB | Common stock | |||||||||
Mukohara (Feb. 11, 1952) | Jun. 2003: | Appointed Executive Officer of STB, General Manager, Credit Supervision Department I of STB | 0 shares (Common stock 50,157 shares) | ||||||||||
Apr. 2004: | Appointed Executive Officer of STB, General Manager, Wholesale Business Planning Department of STB | ||||||||||||
Jun. 2004: | Appointed Managing Executive Officer of STB, General Manager, Wholesale Business Planning Department of STB | ||||||||||||
Jun. 2005: | Appointed Managing Executive Officer of STB | ||||||||||||
Jun. 2006: | Appointed Director and Managing Executive Officer of STB | ||||||||||||
Jun. 2008: | Appointed Director and Senior Executive Officer of STB (current) | ||||||||||||
3 | Akio Otsuka | Apr. 1976: | Joined STB | Common stock | |||||||||
(Mar. 16, 1953) | Apr. 2002: | Appointed Executive Officer of STB, General Manager, Corporate Trust Business Department I of STB | 0 shares (Common stock 33,000 shares) | ||||||||||
Jun. 2004: | Appointed Executive Officer of STB, Head Office Executive of STB | ||||||||||||
Jun. 2004: | Appointed Managing Executive Officer of STB | ||||||||||||
Jun. 2008: | Appointed Director and Senior Executive Officer of STB (current) | ||||||||||||
4 | Junichi Sayato | Apr. 1978: | Joined STB | Common stock | |||||||||
(Sept. 27, 1955) | Jun. 2006: | Appointed Executive Officer of STB, Regional Executive, Americas, General Manager, New York Branch of STB | 0 shares (Common stock 22,000 shares) | ||||||||||
May 2008: | Appointed Executive Officer of STB, Head Office Executive of STB | ||||||||||||
Jun. 2008: | Appointed Director and Managing Executive Officer of STB (current) | ||||||||||||
5 | Tetsuo Ohkubo | Apr. 1980: | Joined STB | Common stock | |||||||||
(Apr. 6, 1956) | Jun. 2006: | Appointed Executive Officer of STB, General Manager, Planning and Coordination Department of STB | 0 shares (Common stock 31,000 shares) | ||||||||||
Jun. 2007: | Appointed Executive Officer of STB, Head Office Executive of STB | ||||||||||||
Jun. 2007: | Appointed Executive Officer of STB | ||||||||||||
Jan. 2008: | Appointed Managing Executive Officer of STB | ||||||||||||
Mar. 2008: | Appointed Outside Auditor of SUMITOMO SEISEN Co., Ltd. (current) | ||||||||||||
Jun. 2008: | Appointed Director and Managing Executive Officer of STB (current) | ||||||||||||
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Candidate | Name | Brief history, representative positions at other | Number of shares | ||||||||||
number | (date of birth) | corporations and positions held at the Company | of the Company | ||||||||||
held by such | |||||||||||||
person | |||||||||||||
(numbers in | |||||||||||||
parentheses are | |||||||||||||
the number of | |||||||||||||
shares of STB | |||||||||||||
held by such | |||||||||||||
person) | |||||||||||||
1 | Teruhiko Sugita | Apr. 1975: | Joined STB | Common stock | |||||||||
(Jul. 14, 1951) | Jun. 2003: | Appointed Executive Officer of STB, General Manager, Tokyo Corporate Business Department I of STB | 0 shares | ||||||||||
Jun. 2005: | Appointed Executive Officer of STB, Head Office Executive of STB | (Common stock 46,000 shares) | |||||||||||
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Jun. 2005: | Appointed Managing Executive Officer of STB | ||||||||||||
Jun. 2005: | Appointed Managing Executive Officer of STB, General Manager, Global Credit Supervision Department of STB | ||||||||||||
Jun. 2007: | Appointed Managing Executive Officer of STB | ||||||||||||
Jun. 2008: | Appointed Director and Senior Executive Officer of STB | ||||||||||||
May 2009: | Appointed Director and Senior Executive Officer of STB, General Manager, Structured Finance Department of STB | ||||||||||||
Jul. 2009: | Appointed Director and Senior Executive Officer of STB (current) | ||||||||||||
2 | Hitoshi Maeda (Nov. 18, 1931) | Apr. 1972: | Professor of Gakushuin University Faculty of Law | Common stock 0 shares | |||||||||
Nov. 2001: | Appointed Outside Director of Tokyo Stock Exchange, Inc. (current) | ||||||||||||
Apr. 2002: | Appointed Emeritus Professor of Gakushuin University (current) | (Common stock 0 shares) | |||||||||||
May 2003: | Appointed Auditor of Tokyo Bankers Association | ||||||||||||
Jun. 2003: | Appointed Statutory Auditor of STB (current) | ||||||||||||
Aug. 2007: | Appointed Outside Director of Tokyo Stock Exchange Group, Inc. (current) | ||||||||||||
May 2008: | Retired from Auditor of Tokyo Bankers Association | ||||||||||||
3 | Toshio Hoshino (Dec. 22, 1944) | Apr. 1969: | Joined Kao Soap Co., Ltd. (now Kao Corporation) | Common stock 0 shares | |||||||||
Jun. 1992: | Appointed Director of Kao Corporation | ||||||||||||
Jun. 1996: | Appointed Managing Director of Kao Corporation | (Common stock 0 shares) | |||||||||||
Aug. 1998: | Appointed Managing Director of Kao Corporation, and President and Representative Director of Nivea-Kao Company, Ltd. | ||||||||||||
Jun. 2000: | Appointed Representative Director and Senior Managing Director of Kao Corporation, and President and Representative Director of Nivea-Kao Company, Ltd. | ||||||||||||
Jun. 2002: | Appointed Representative Director, Senior Executive Vice President of Kao Corporation, and President and Representative Director of Nivea-Kao Company, Ltd. | ||||||||||||
Jun. 2003: | Appointed Representative Director and Senior Executive Vice President of Kao Corporation, and President and Representative Director of Nivea-Kao Company, Ltd. | ||||||||||||
Jul. 2007: | Retired from President and Representative Director of Nivea-Kao Company, Ltd. | ||||||||||||
Jun. 2008: | Retired from Representative Director and Senior Executive Vice President of Kao Corporation | ||||||||||||
Jun. 2009: | Appointed Statutory Auditor of STB (current) | ||||||||||||
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1. | None of the candidates have a special interest in the Company. | |
2. | Messrs. Hitoshi Maeda and Toshio Hoshino are candidates for Outside Auditors. | |
3. | Special notes on the candidates for Outside Auditors are as stated below: |
(1) | Reasons for electing candidates for an Outside Auditors: |
(i) | We propose that Mr. Hitoshi Maeda, who is one of the leading lawyers specializing in the Companies Act, and the Negotiable Instrument Act or the Check Act in Japan, be elected as an Outside Auditor as we would like him to apply his knowledge and abundant experience in business law to audit activities for the Company. | ||
(ii) | We propose that Mr. Toshio Hoshino be elected as an Outside Auditor as we would like him as the chief executive of a listed corporation to apply his extensive experience and broadly based insight to audit activities for the Company. |
(2) | Reasons on which Mr. Hitoshi Maeda is deemed to be capable of properly performing their duties as Outside Auditors | ||
Mr. Hitoshi Maeda so far has not been involved with management of a company by any means other than serving as Outside Directors or Outside Auditors. However, as described in 3 (1) above, we are convinced that he is capable of properly performing his duties as Outside Auditors. | |||
(3) | Liability-limiting agreements with candidates for Outside Auditors | ||
If Messrs. Hitoshi Maeda and Toshio Hoshino are appointed as Auditors, the Company is planning to enter into an agreement with each of Mr. Hitoshi Maeda and Mr. Toshio Hoshino under which, if they are without knowledge and are not grossly negligent in performing their duties as Outside Auditors, their liability to the Company for any damages attributable to their negligence that they would be obligated to bear pursuant to the provisions of Article 423, Paragraph 1 of the Companies Act shall be limited to the minimum amount of liability prescribed in Article 425, Paragraph 1 of the Companies Act. |
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