TSE Code 8511
June 6, 2006
To Shareholders
President Minoru Masubuchi

JAPAN SECURITIES FINANCE CO.,LTD.
1-2-10 Nihonbashi-Kayabacho,Chuo-ku,Tokyo

Notice of the 96th Ordinary General Meeting of Shareholders ～extract
Dear Shareholders,
You are hereby advised of the convocation of the 96th Ordinary General Meeting of Shareholders of theCompany, details of which are indicated below. We hope very much that you will be able to attend thisMeeting.
In order to exercise your rights, please review the attached reference materials, indicate your approval ordisapproval of the proposals on the enclosed document, then return it or vote on the Internet site(http://www.e-kosi.jp) by 5:20 p.m. Japan Standard Time on 27thJune, 2006.
We are pleased to announce you to participate in the ICJ voting platform, improving the voting environment
for all our shareholders. ICJ is offering access to the world's most widely used and sophisticatedelectronic voting platform, ADP's ProxyEdge voting platform.
Details
1. Date and Time:
2. Venue:

10:00 a.m., Wednesday, 28th June, 2006

JAPAN SECURITIES FINANCE CO., LTD., Conference Room
1-2-10 Nihonbashi-Kayabacho, Chuo-ku, Tokyo

3. Meeting Agenda
Items to be Reported:
Report 1:

Reports on the Business Report, the Balance Sheets as of March 31, 2006, and theStatements of Income for the 96th Term（from April 1, 2005 to March 31, 2006） and theState of Repurchase of Own Shares by Board Resolutions

Report 2:

Reports on the Consolidated Balance Sheets as of March 31, 2006, the Consolidated
Statements of Income for the 96th Term（from April 1, 2005 to March 31, 2006）and the
Auditors’ Report by the Accounting Auditors and the Board of Auditors

Items to be Resolved:
Agenda 1:
Agenda 2:
Agenda 3:
Agenda 4:

Approval of the Plan for Appropriation of Retained Earnings for the 96th term
Partial Amendment to the Articles of Incorporation
Election of Nine Directors
Payment of retirement bonuses to resigning directors and Payment in lieu ofretirement bonuses to serving directors and auditors in conjunction with theelimination of retirement bonuses for directors and auditors

Agenda 5:

Amendment of Remuneration for Directors

Note:This English version is not a legally accurate translation of the original Japanese text.

Reference Documents Pertaining to Exercise of Voting Rights

Agenda and Reference Information

Agenda 1:

Approval of the Plan for Appropriation of Retained Earnings for the 96th term

The plan for the appropriation of retained earnings for the 96th term is proposed as indicated on page 20 of
the attached document.
With respect to dividends for the term, we have determined the rate of dividends in accordance with thecompany’s dividend policy for distributing dividends by taking account of its financial results, whileconsidering its shareholders' equity and appropriate internal reserves as a financial institution.
In view of dramatically better business results than those of the last term, the annual dividends will be 24
yen per share including the interim dividends of 10 yen, which will be increased by 10 yen per share.
Regarding the bonus for directors, the bonus of 80,950,000 yen is proposed to pay for 12 members of theBoard of Directors and the bonus of 15,320,000 yen is proposed to pay 4 members of the Auditors.

2

Agenda 2:

Partial Amendment to the Articles of Incorporation

Summary of amendment to the Articles of Incorporation and reasons(1) To add the official English designation of the Company’s name. (Proposed amendment Article 1)(2) To specify that the President shall convene general meetings of shareholders, except where otherwise
provided by applicable laws and ordinances. (Proposed amendment Article 15)(3) To change the number of directors from “not to exceed twelve” to “not to exceed nine,” in order tointroduce a new Executive Officer System and to specify that the Board of Directors shall selectExecutive Officers. These amendments are for the purpose of creating a “leaner” Board of Directors
and accelerating the execution of business, thereby strengthening corporate governance and providing
for more efficient management. (Proposed amendment Article 19 and 27)(4) To add provisions allowing for the omission of convention procedures for meetings of the Board of
Directors and Board of Auditors, thereby enabling meetings to be convened more quickly. (Proposed
amendment Article 22, Paragraph 2 and Article 34, Paragraph 2)(5) To make the following additions and amendments as permitted under the provisions of the “Company
Law” (Law No. 86 of 2005).
ⅰ) To modify the means of public notice to “electronic notice,” thereby improving convenience toshareholders and reducing notification costs. (Proposed amendment Article 5)ⅱ) To add new provisions in conjunction with the provisions in the Law, allowing restriction of the rights
of fractional shareholders within a reasonable scope. (Proposed amendment Article 10)ⅲ) To add new provisions in conjunction with the provisions in the Law, allowing disclosure of
documentation and reference materials, etc. for general meetings of shareholders to be made overthe Internet, thereby reducing costs and procedural burdens as the volume of disclosed information
increases. (Proposed amendment Article 16)ⅳ) To modify the number of proxies that may attend general meetings of shareholders so as to beconsistent with the handling in the former version of the Commercial Code (Article 239, Paragraph
5 of the former version of the Commercial Code), Thereby providing for more appropriate
administration of general meetings of shareholders. (Proposed amendment Article 18)ⅴ) To add new provisions, in conjunction with the provisions in the Law, allowing the Board of Directors
to pass resolutions in writing (rather than at meetings), thereby providing for more dynamic andefficient execution of duties. (Proposed amendment Article 23)ⅵ) To make other mechanical and technical additions as well as amendments and corrections to
expressions and wording in conjunction with the enactment of the “Company Law” (Proposed
amendment Article 4,6,7,8,9,11,13,14,17,20,21,24,29,31,32,33,36,37,38 and 39)(6) To make other editorial corrections to expressions and wording in the Articles of Incorporation and to
appropriately modify the numbering in conjunction therewith. (Proposed amendment Article
2,12,25,26,28 and 35)

3

(Attachment)

Amendments to the Articles of Incorporation(Amended parts are underlined)
Current Articles of Incorporation

Proposed Amendments

Chapter Ⅰ General Provisions
Article 1. (Name of the Company)
The Company shall be called “Japan Securities
Finance Co., Ltd.”

Chapter Ⅰ General Provisions
Article 1. (Trade Name)
The name of the Company shall in Japanese be “Nihon
Shoken Kinyu Kabushiki Kaisha” and in English be“JAPAN SECURITIES FINANCE CO., LTD.”

Article 2. (Purposes and Scope of Incorporation)
Article 2. (Purposes)
The Company shall be organized for the purposes of (No change)
operating the following businesses:(1)～(9)(Omitted)(1)～(9)(New)(No change)

Article 4. (Institutions)
The Company shall, in addition to the general meetingsof shareholders and the directors, have the following
institutions:(1) Board of Directors(2) Auditors(3) Board of Auditors(4) Accounting Auditors

Article 4. (Means of Public Notices)
Public notices of the Company shall appear in thedaily newspaper “The Nihon Keizai Shimbun. ”

Article 5. (Method of Public Notices)
The public notices of the Company shall be madeelectronically. However, if notification cannot be madeelectronically due to unforeseen and/or unavoidable
circumstances, notification shall be made bypublication in the daily newspaper “The Nihon Keizai
Shimbun.”Chapter Ⅱ Capital Stock
Article 5. (Total Number of Shares to be Issued andAcquisition of the Company’s Own Shares)
The total number of shares of the capital stock to beissued by the Company shall be 200,000,000. In case
the Company retires its own shares, however, thisnumber of shares shall be reduced by the full amountof the retirement.
The Company may buy back its own shares after adecision by the board of directors, in accordance withthe provisions of Article 211-3, Paragraph 1, Item 2, of
the Commercial Code.

Chapter Ⅱ Capital Stock
Article 6. (Total Number of Authorized Shares)(New)

Article 7. (Issuing of Share Certificates)

The total number of shares that the Company isauthorized to issue shall be 200,000,000 shares.

(Moved to Article 8)

The Company shall issue share certificates for its
capital stock.

4

Current Articles of Incorporation

Proposed Amendments(Moved from Article 5, Paragraph 2)

Article 8 (Acquisition of Own Shares)
The Company may purchase its own shares in market
transactions, etc. pursuant to a resolution of the Boardof Directors in accordance with the provisions of Article
165, Paragraph 2 of the Company Law.

Article 6. (Unit Share and Non-issue of Fractional
Shares)One unit of the shares of the Company shall be 100.

Article 9. (Share Units and Non-Issue of Fractional
Shares)1. Unit of the shares of the Company shall be 100
shares.
The
Company
shall
not
issue
fractional 2. Notwithstanding the provisions of Article 7, theshare-certificates of less than one unit (hereinafter Company shall not issue fractional share certificates ofreferred to as “fractional shares”).
less than unit. However, this shall not apply in thecases set forth in the Rules on Handling Shares.
(New)

Article 10. (Rights with Respect to Fractional Shares)
The shareholders of the Company (including thebeneficial shareholders’ registry, and the same
throughout) shall not exercise any rights with respect tofractional shares that they hold other than the rights
listed below:(1) Rights as set forth in the subparagraphs to Article
189, Paragraph 2 of the Company Law;
(2) Rights to lodge claims pursuant to the provisions ofArticle 166, Paragraph 1 of the Company Law;
(3) Rights to receive allocations of subscription sharesand subscription warrants proportional to the number ofshares held by the shareholder.

Article 7. (Transfer Agent)
The company shall appoint a transfer agent tohandle the transfer of shares.
The transfer agent and its office shall be designatedby the board of directors of the Company, and a public
notice shall be given with regard to this designation.

Article 11. (Shareholder Register Manager)
1. The Company shall appoint a shareholder registermanager.
2. The shareholder register manager and its office shallbe designated by the Board of Directors of theCompany, and a public notice shall be given withregard to this designation.
The list of shareholders and beneficiaries, and the 3. The creation and maintenance of the shareholder
list of the lost share certificates registration shall be register (including the beneficial shareholder register,
kept at the office of the transfer agent, and the transfer and the same throughout), the lost share certificate
agent shall handle the transfer of shares, purchase of register and the warrant register, and all other services
fractional shares and other related businesses. The with respect to the shareholder register, the lost share
Company shall not handle these businesses.
certificate register and the warrant register shall be
entrusted to the shareholder register manager and theCompany shall not handle these services.

5Current Articles of Incorporation

Proposed Amendments

Article 8. (Rules on Handling Shares)
The classes of shares, method of transfer, purchaseof fractional shares and other procedures concerning
the handling of the shares of the Company and the fees
shall be prescribed by the rules on handling the shares
adopted by the board of directors.

Article 12. (Rules on Handling Shares)
The handling of the shares of the Company and any
fees associated therewith shall be in accordance withapplicable laws and ordinances, these Articles ofIncorporation and the Rules on Handling Shares
formulated by the Board of Directors.

Article 9. (Record Date)
The Company shall accept that the shareholders and (Moved to Article 14)
beneficiaries entered or electronically recorded on the
final list of shareholders and beneficiaries on March 31
of each year can exercise the right of vote in theshareholders’ general meetings on the settlement term.
In addition to the provision in preceding paragraph, (Deleted)
the Company may, if necessary, give a public notice inadvance by the decision of the board of directors andallow the right of vote to shareholders or pledgees
entered or electronically recorded on the list ofshareholders and beneficiaries as of a fixed date.
Chapter Ⅲ General Meetings of Shareholder
Article 10. (Holding Shareholders’ General Meetings)(Omitted)

Chapter Ⅲ General Meetings of Shareholders
Article 13. (Holding General Meetings of Shareholders)(No changed)(Moved from Article 9, Paragraph 1)

Article 14. (Record Date for Regular General meetingsof Shareholders)
The record date for voting rights at regular general
meetings of shareholders shall be March 31 of eachyear.

Article 11. (Presiding Officer of Shareholders’ General
Meetings)
The President of the Company shall preside over thegeneral meetings of shareholders.
In the event of absence or inability to perform his or
her duty, a director shall act for the President in theorder prescribed in advance by the board of directors.

(Authorization
toConveneandArticle15.
Chairmanship)
1. The President shall convene and chair general
meetings of shareholders.
2. In the event of absence or inability to perform his or
her duty, a director shall act for the President inconvening and chairing general meetings ofshareholders in the order prescribed in advance by the
Board of Directors.

6

Current Articles of Incorporation

Proposed Amendments(New)

Article 16. (Disclosure of Documentation andReference Materials, etc. for General Meetings ofShareholders over the Internet and Assumption ofProvision)
The Company may use the Internet as prescribed in
Ministry of Justice ordinance to disclose information to
be noted or presented in reference materials forgeneral meetings of shareholders, business reports,financial statements and consolidated financial
statements in conjunction with the convocation ofgeneral meetings of shareholders and may assume
that the said information has been provided toshareholders.

Article 12. (Methods for Making Decisions)
The shareholders’ general meetings shall makedecisions by a majority of votes of the shareholders
present, unless otherwise provided in laws orordinances, or the present Articles of Incorporation.

Article 17. (Methods for Making Resolutions)
1. The general meeting of shareholders shall makeresolutions by a majority of votes of the shareholders
present and authorized to exercise voting rights, unlessotherwise provided in laws, ordinances or these
Articles of Incorporation.
The resolution provided for in Article 343 of 2. The resolution provided for in Article 309, ParagraphCommercial Code shall be adopted by a two-thirds or 2 of the Company Law shall be adopted by a two-thirds
more majority with participation of shareholders or more majority with participation of shareholders
possessing no less than one-third of the voting rights of authorized to exercise not less than one-third of theall shareholders.
voting rights of all shareholders.
Shareholders or their legal representatives may (Moved to Article 18)
exercise their voting rights in the shareholders’ general
meetings by authorizing any other shareholders
present as their proxies.
(Moved from Article 12, Paragraph 3)

Article 18. (Proxy Exercise of Voting Rights)
1. Shareholders may designate one other shareholder
with voting rights in the Company to exercise theirvoting rights as proxies.
2. In such cases, the shareholder or proxy shall submit
to the Company any documents attesting to proxyrights to each general meeting of shareholders.

Chapter Ⅳ Directors and Board of Directors
Article 13. (Number of Directors)
The number of directors of the Company shall not
exceed twelve.

Chapter Ⅳ Directors and Board of Directors
Article 19. (Number of Directors)
The number of directors of the Company shall not
exceed nine.

Article 14. (Election of Directors)
Directors shall be elected at the general meetings ofshareholders.

Article 20. (Election of Directors)
1. Directors shall be elected by a resolution of thegeneral meeting of shareholders.

7Current Articles of Incorporation

Proposed Amendments

Directors shall be elected by a majority of votes withthe participation of shareholders possessing not lessthan one-third of the voting rights of all shareholders.

2. Directors shall be elected by a majority of votes withthe participation of shareholders authorized to exercise
not less than one-third of the voting rights of allshareholders.
No cumulative voting shall be employed in the 3. (No changed)
election of directors.
Article 15. (Term of Office of Directors)
The term of office of directors shall be from the dateof their election until a regular general meeting ofshareholders for the final settlement term within one
year.
The term of office of directors who are elected to fillvacancies or in addition to those already in office shallbe until the end of the term of office of the otherdirectors in office.

Article 21. (Term of Office of Directors)
1. The term of office of directors shall be from the dateof their election until the conclusion of the regular
general meeting of shareholders for the final businessyear concluding within one year of their election.
2. The term of office of directors who are elected to fillvacancies or in addition to those already in office shallbe until the expiration of the term of office of the otherdirectors in office.

Article 16. (Special Election)
In case of vacancies occurring among directors,
such vacancies may not be filled so long as the numberof directors in office meets the number prescribed bylaw.

(Deleted)

Article 17. (Notices for Meetings of Board of Directors) Article 22. (Notices for Meetings of Board of Directors)
Notices for the meetings of the board of directors 1. (No changed)
shall be given to all the directors and auditors threedays in advance of each meeting, except that in an
emergency this interval may be shortened.
(New)
2. These procedures may be omitted in the
convocation of meetings of the Board of Directors whenconsented to by all directors and auditors.
Article 18. (Method of Making Decisions of Board of
Directors)
The decisions of the board of directors shall be madeby a majority vote with more than half of the directors
present.

Article 23. (Omission of Board of Directors Resolutions)

Article 19. (Power of Board of Directors)
The board of directors shall make decisions on theimportant matters concerning the administration of thebusiness affairs of the Company, unless otherwise
provided in laws or ordinances, or the present Articles
of Incorporation.

(Deleted)

The Company may deem the Board of Directors tohave passed a resolution if all directors (limited todirectors who are entitled to vote) provide written
expression of their intent to affirm the proposed
resolution. However, this shall not apply in the eventthat any auditor expresses objections to the proposed
resolution.

8

Current Articles of Incorporation

Proposed Amendments

Article 20. (Representative Directors)
The board of directors shall appoint, in accordancewith its decisions, representative directors. The
representative directors shall each represent theCompany. However, directors who are officers or
employees of securities companies shall not be eligible
for appointment as representative directors.

Article 24. (Representative Directors)
The Board of Directors shall appoint, in accordancewith its resolutions, representative directors. However,officers and employees of securities companies shallnot be appointed as representative directors.

Article 21. (Office Organization of Directors)
The board of directors may appoint, in accordancewith its decisions, a Chairman, a President, a Vice
President and several Senior Managing Directors andManaging Directors from among the directors.

Article 25. (Directors with Specific Duties)
The Board of Directors may appoint, in accordancewith its resolutions, a Chairman, a President, a Vice
President and several Senior Managing Directors andManaging Directors from among the directors.

Article 22. (Regulations of Board of Directors)

Article 26. (Regulations of Board of Directors)

The board of directors shall adopt, in accordance Matters related to the Board of Directors shall follow
with its decisions, the regulations of the board of the provisions of applicable laws and ordinances, these
directors.
Articles of Incorporation and the Regulations of theBoard of Directors formulated by the Board of
Directors.
(New)

Article 27. (Executive Officers)
The Company may, in accordance with a resolution of
the Board of Directors, appoint Executive Officers.

Article 23. (Executive Advisers, Advisers andConsultants)
The board of directors may appoint, in accordancewith its decisions, Executive Advisers, Advisers andConsultants.

Article 28. (Executive Advisers, Advisers andCounselors)
The Company may, in accordance with a resolution of
the Board of Directors, appoint Executive Advisers,
Advisers and Counselors.

Article 24. (Remuneration for Directors)

Article 29. (Remuneration, etc. for Directors)

The remuneration for directors shall be decided by
the general meetings of shareholders.

The remuneration, bonuses and other financial
interests received by directors as countervalue for the
execution of their duties (hereinafter called“remuneration, etc.”) shall be decided by a resolution of
the general meetings of shareholders.

Chapter Ⅴ Auditors and Board of Auditors
Chapter Ⅴ Auditors and Board of Auditors
Article 25. (Number of Auditors)
Article 30. (Number of Auditors)
The number of auditors of the Company shall not (No change)
exceed four.
Article 26. (Election of Auditors)
Auditors shall be elected at the general meetings ofshareholders.
Auditors shall be elected by a majority of votes withthe participation of the shareholders possessing notless than one-third of the voting rights of allshareholders.

Article 31. (Election of Auditors)
1. Auditors shall be elected by a resolution of thegeneral meetings of shareholders.
2. Auditors shall be elected by a majority of votes withthe participation of shareholders authorized to exercise
not less than one-third of the voting rights of allshareholders.

9Current Articles of Incorporation

Proposed Amendments

Article 27. (Term of Office of Auditors)
The term of office of auditors shall be from the dateof their election until a regular general meeting ofshareholders for the final settlement term within four
years.

Article 32. (Term of Office of Auditors)
1. The term of office of auditors shall be from the dateof their election until the conclusion of the regular
general meeting of shareholders for the final businessyear concluding within four years of their election.

The term of office of auditors who are elected to fill 2. The term of office of auditors who are elected to fillvacancies shall be until the end of the term of office of vacancies on the Board of Auditors due to resignations
the retired auditors.
prior to the expiration of terms shall be until the
expiration of the term of the resigning auditor.
Article 28. (Standing Auditors)
Auditors may elect standing auditors by mutual vote.

Article 33. (Standing Auditors)
The Board of Auditors shall appoint, in accordance with
its resolutions, standing auditors.

Article 29. (Notices for Meetings of Board of Auditors)

Article 34. (Notices for Meetings of Board of Auditors)

Notices for the meetings of the board of auditors
shall be given to all auditors three days in advance ofeach meeting, except that in an emergency this interval
may be shortened.
(New)

1. (No change)

2. These procedures may be omitted in the
convocation of meetings of the Board of Auditors whenconsented to by all auditors.

Article 30. (Method of Making Decisions of Board of (Deleted)
Auditors)
The decisions of the board of auditors shall be madeby a majority vote with more than half of the auditorspresent, unless otherwise provided in laws orordinances.
Article 31. (Regulations of Board of Auditors)
The board of directors shall adopt, in accordancewith its decisions, the regulations of the board ofauditors.

Article 35. (Regulations of Board of Auditors)
Matters related to the Board of Auditors shall follow theprovisions of applicable laws and ordinances, these
Articles of Incorporation and the Regulations of theBoard of Auditors formulated by the Board of Auditors.

Article 32. (Remuneration for Auditors)

Article 36. (Remuneration, etc. for Auditors)

The remuneration for auditors shall be decided by
the general meetings of shareholders.

The remuneration, etc. for auditors shall be decided bya resolution of the general meeting of shareholders.

Chapter Ⅵ Accounting
Article 33. (Business Year)(Omitted)

Chapter Ⅵ Accounting
Article 37. (Business year)(No change)

Article 34. (Payment of Dividends)
Shareholders’ dividends shall be paid to theshareholders or pledgees who are entered orelectrically recorded on the list of the Company’s
shareholders and beneficiaries as of March 31 of eachyear.

Article 38. (Surplus Dividends)
1. The Company may, in accordance with a resolutionof the general meeting of shareholders, pay year-end
dividends to shareholders noted and/or recorded on
the final shareholder register and to registeredpledge-holders as at March 31 of each year.

10Current Articles of Incorporation

Proposed Amendments

In accordance with the provisions of Article 293-5 of
the Commercial Code, the Company may distributemoney (hereinafter referred to as “interim dividend”), tothe shareholders or pledgees who are entered orelectronically recorded on the list of the Company’s
shareholders and beneficiaries as of September 30 ofeach year, following a decision by the board of
directors.

2. The Company may, in accordance with a resolutionof the Board of Directors, pay interim dividends toshareholders noted and/or recorded on the final
shareholder register and to registered pledge-holders
as at September 30 of each year.

Article 35. (Exclusion of Dividends)
If a shareholder has not collected dividend andinterim dividend payments for more than three years
from the date on which payment begins, the Company
shall be exempted from liability for payment.

Article 39. (Exclusion of Dividends)
In the event that dividend assets are cash, theCompany shall be exempted from liability for payment if
a shareholder has not collected dividends within three
years of the date on which payment of dividends
begins.

11

Agenda 3:

Election of Nine Directors

The term of office of twelve Directors will expire at the end of the present Ordinary General Meeting of
Shareholders. Therefore, nine new Directors are to be elected and the candidates are as listed below.

No.
1

Name
(Date of Birth)
Minoru Masubuchi(Nov. 3, 1943)

Brief Personal History &Representation of Other Companies
Feb. 1988
May 1993
May 1994
Jul. 1998
Jul. 2002
Jun. 2004
Jun. 2005

2

Hiroshi Saito(Apr. 13, 1947)

Jul. 1993
Jul. 1995
Jul. 1997
Jul. 1999
Jul. 2000
Jun. 2004

3

Hisao Harada(Jul. 28, 1943)

Apr. 1966
Jun. 1994
Jun. 1997
Jun. 2000
Jun. 2005

4

Sadamu Shimomura(Aug. 31, 1947)

Apr. 1970
Jun. 1998
Jun. 2000
Jun. 2002
Jun. 2005
Jun. 2005

Shares of
JSF Owned

General Manager of Kagoshima Branch, BOJ
Adviser to the Governor of Market
Operations Dept., BOJ
Director-General of Financial and Payment
System Dept., BOJ
Executive Director of BOJ
Standing Adviser of IBM Japan, Ltd.
President of JSF (to the present)
Director of JSF Trust and Banking Co.,Ltd.
(to the present)

3,900

Deputy Governor of Aomori Prefecture
Superintendent of the Nagoya Customs
Deputy Director-General’s Secretariat for the
National Land Agency
Superintendent of the Tokyo Customs
Executive Director of Japan Regional
Development Corp.
Executive Vice President of JSF (to thepresent)

4,100

Joined JSF
General Manager of Planning Dept.
Director & General Manager of Planning
Dept.
Managing Director of JSF
Senior Managing Director of JSF (to thepresent)

13,700Joined JSF
General Manager of Loan Supervision Dept.
General Manager of Bond Trading Dept.
Director & General Manager of Margin Loan
Dept. of JSF
Auditor of Japan Information Processing
Service Co.,Ltd. (to the present)
Managing Director of JSF (to the present)

8,800

12

No.
5

Name
(Date of Birth)
Yasuhisa Hashimoto(Feb. 27, 1951)

Brief Personal History &Representation of Other Companies
May 1996
May 1998
Feb. 2002
May 2003
Feb. 2005
May 2005
Jun. 2005

6

Kunio Kojima(Dec. 15, 1937)

May 1989
May 1990
Feb. 1992
Aug. 1996
Jun. 1998
Jun. 2003
Jun. 2004
Jun. 2004
Jun. 2005
Jun. 2005
Apr. 2006

7

Takashi Imai
(Dec. 23, 1929)

Jun. 1993
Apr. 1998
May 1998
May 2002
Jun. 2002
Apr. 2003
Jun. 2003

Shares of
JSF Owned

General Manager of Naha Branch, BOJ
Director-General, Senior Secretary to theGovernor of BOJ
Director-General of Secretariat of the Policy
Board Dept., BOJ
Director-General of Currency Issue Dept.,
BOJ
Personal and Corporate Affairs Dept., BOJ
Adviser of JSF
Managing Director of JSF (to the present)

1,200

Director-General of Market Operations Dept.,
BOJ
Director-General of Policy Planning Dept.,
BOJ
Executive Director of BOJ
Adviser of the Industrial Bank of Japan, Ltd.
President of JSF
Director of Mitsui O. S. K. Lines, Ltd.
(to the present)
Chairman of JSF (to the present)
Director of Nihon Building Co.,Ltd. (to thepresent)
Director of Japan Information Processing
Service Co.,Ltd. (to the present)
Director of Resona Holdings, Inc. (to thepresent)
Vice-Chairman & President of Keizai Doyukai(Japan Association of Corporate Executives)(to the present)

23,500President of Nippon Steel Corp.
Chairman of Nippon Steel Corp.
Chairman of Nippon Keidanren (Japan
Business Federation)
Honorary Chairman of Nippon Keidanren(to the present)
Director of JSF (to the present)
Director & Senior Adviser / Honorary
Chairman of Nippon Steel Corp.
Senior Adviser / Honorary Chairman of
Nippon Steel Corp. (to the present)

4,000

13

No.
8

Name
(Date of Birth)
Akira Kanno(Dec. 1, 1932)

Brief Personal History &Representation of Other Companies
Dec. 1986
May 1992
May 1994

Apr. 1999

Jun. 2003
Dec. 2004
9

Eiichiro Okumoto(Mar. 4, 1934)

Dec. 1986
Jun. 1989
Aug. 1989
Oct. 1996
Jun. 2000
Jul. 2000
Jun. 2004
Jun. 2004

Shares of
JSF Owned

Executive Director of BOJ
Deputy Governor of Export-Import Bank ofJapan
Vice-Chairman & Senior Managing Governorof the Federation of Bankers Associations ofJapan
Vice-Chairman & Senior Managing Governorof the Japanese Bankers Association(renamed)
Director of JSF (to the present)
Chairman of Japan Electric Power Exchange(to the present)

10,400Vice President of Daiwa Securities Co., Ltd.
Adviser of Daiwa Computer Service Co., Ltd.
President of Daiwa Institute of Research Ltd.
Chairman of Daiwa Institute of Research Ltd.
Standing Adviser of Daiwa Institute of
Research Ltd.
Chairman of Japan Securities Dealers
Association
Adviser of Daiwa Institute of Research Ltd.
(to the present)
Director of JSF (to the present)

1,100

Note 1: JSF has no conflict of interest with each candidate.
Note 2: Mr. Takashi Imai, Mr. Akira Kanno and Mr. Eiichiro Okumoto are candidates for outside
corporate directors as provided for in Article 2, Item 15 of the Company Law.

14

Agenda 4:

Payment of retirement bonuses to resigning directors and Payment in lieu ofretirement bonuses to serving directors and auditors in conjunction with theelimination of retirement bonuses for directors and auditors

It is proposed to pay retirement bonuses within the scope set forth in the standards and regulations of theCompany in recognition of the services of Messrs. Akira Onoda, Hiroshi Nasuno and Yukitaka Yoshida whoare resigning from their positions as directors of the Company at the conclusion of this general meeting, thespecific amounts, timing and methods of payment, etc. to be left to the discretion of the Board of Directors.
Below is the brief personal history of resigning directors.
Name
Brief personal history
Akira Onoda
Jun 2002
Director of JSF (to the present)
Hiroshi Nasuno
Jun 2005
Director of JSF (to the present)
Yukitaka Yoshida
Jun 2005
Director of JSF (to the present)
Note: The three people listed above are expected to be nominated as executive officers by the Board of
Directors at the conclusion of this general meeting of shareholders.

The Company has reviewed its director and auditor remuneration provisions as part of generalmanagement reforms, and the Board of Directors resolved at its meeting of March 27, 2006 to eliminate
director and auditor retirement bonuses effective the conclusion of this general meeting. In conjunction
with this, and conditional upon approval of Agenda 3, it is proposed that the nine directors to be reappointed
and the four auditors currently serving be paid retirement bonuses commensurate to their terms of service
up to the conclusion of this general meeting in recognition of their services and in accordance with thestandards and regulations of the Company.
This payment shall be made at the time the person resigns his or her position as director or auditor and thespecific amounts and methods of payment, etc. are to be determined at the discretion of the Board of
Directors for directors and the Board of Auditors for auditors.
Below is the brief personal history for reappointed directors and serving auditors assuming that Agenda 3
is approved.
Name
Brief personal history
Minoru Masubuchi
Hiroshi Saito
Hisao Harada

Sadamu Shimomura
Yasuhisa Hashimoto
Kunio Kojima
Takashi Imai
Akira Kanno
Eiichiro Okumoto
Munetaka Tada
Yoshiyasu Arai
Yasukuni Watanabe
Toshio Kamiyama

Jun. 2004
Jun. 2004
Jun. 1997
Jun. 2000
Jun. 2005
Jun. 2002
Jun. 2005
Jun. 2005
Jun. 1998
Jun. 2004
Jun. 2002
Jun. 2003
Jun. 2004
Jun. 2003
Jun. 2004
Jun. 2001
Jun. 2003

President of JSF (to the present)
Executive Vice President of JSF (to the present)
Director of JSF
Managing Director of JSF
Senior Managing Director of JSF (to the present)
Director of JSF
Managing Director of JSF (to the present)
Managing Director of JSF (to the present)
President of JSF
Chairman of JSF (to the present)
Director of JSF (to the present)
Director of JSF (to the present)
Director of JSF (to the present)
Standing Auditor of JSF (to the present)
Standing Auditor of JSF (to the present)
Auditor of JSF (to the present)
Auditor of JSF (to the present)

The total amount of retirement bonuses pursuant to the above is estimated at 435 million yen.

15

Agenda 5:

Amendment of remuneration for directors

The 83rd regular general meeting of shareholders convened on Jun 29, 1993 approved an amount not toexceed 21 million yen per month as remuneration for directors and that amount continues in force to thisday. In conjunction with the elimination of retirement bonuses for directors and auditors based on thereview of remuneration for directors and auditors, it is proposed that remuneration for directors be amended
to an amount not to exceed 24 million yen per month.
In the past, remuneration for directors has not included employee wages for directors concurrently serving
as employees, but it is proposed that this amount be included in remuneration for directors in the event thata director concurrently serves as an employee in the future.
The Company currently has twelve directors; if Agenda 3 is approved without amendment, the Company
will have nine directors.

16

Non-consolidated Balance Sheets
ASSETS(Millions of Yen)
As of March 31

2006

Current assets
Cash
Securities
Loan for margin transactions
Bond financing
General loans
Other loans
Stocks lent for margin transactions
Bonds lent for bond loan transactions
Other securities lent
Securities in custody
Securities in deposit
Prepaid expenses
Deferred tax assets
Collateral money for securities borrowed
Accrued revenue
Other current assets
Allowance for doubtful receivables
Fixed assets
Tangible fixed assets
Buildings and structures
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land
Intangible fixed assets
SoftwareFacility utilization rights
Investments, etc.
Investments in securities
Investments in capital
Guaranty money deposited
In-house loan
Deferred income taxes
Other investments and other assets
Allowance for doubtful receivables
Total Assets

17

2005

7,557,617
3,481
854,497
2,328,082
19,02978,2695,578
686,971
5,300
12,879193,722
1,740,415
175
668
1,625,433
834
3,319(1,041)

5,734,196
4,695
1,082,274
1,386,619
2,042
45,592
5,578
593,7132,300
8,526
255,467
955,998
23
708
1,386,872
927
3,997(1,142)357,446
2,111
2,511(1,514)
968
(695)
840

357,376
2,144
2,526(1,527)
961
(704)
890

3,739
3,722
17

4,286
4,267
18

351,595
345,351
61
313
409
5,463
37
(41)

350,944
349,883
61
314
423
267
44
(50)

7,915,064

6,091,572

LIABILITIES AND STOCKHOLDERS’ EQUITY(Millions of Yen)
As of March 31

2006

2005

－
27,843
1,706
242
393
81,5352,293,107
1,914
448
2,328,082
302,3808,825
294
44,646

5,986,456
968,800
700,700
387,830
172,000
26,697847
190
410
56,762
1,843,585
2,114
197
1,386,619
423,565
5,820
37
10,277

7,446
4,500
98
2,432
415

5,589
2,500
103
2,549
436

7,819,386

5,992,045

Capital stock
Capital surplus
Capital reserve

10,0005,181
5,181

10,0005,181
5,181

Retained earnings
Earned surplus reserve
Reserve for dividends
General reserve
Unappropriated retained earnings

86,6862,278
2,030
72,4308,148

82,7642,278
2,030
72,430
6,026

Gains for revaluation of land
Gains from revaluation of other securities
Treasury stock143(6,056)
(277)

150
1,476
(46)

95,677

99,526

7,915,064

6,091,572

Current liabilities
Call money
Bills soldShort-term borrowings
Commercial paper
Borrowings on Gensaki Transaction
Accrued income taxes
Accrued expenses
Allowance for bonus
Collateral money received for margin transactions
Collateral money received for securities lent
Deposit received from foundations
Other deposit received
Collateral securities deposited
Securities borrowed
Securities lent offsetting account
Advanced received profit
Other current liabilities
Fixed liabilities
Long-term borrowings
Deferred income taxes of revaluation
Allowance for employees retirement benefits
Allowance for officers retirement rewards
Total Liabilities

Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity

18

7,811,940
1,539,600
87,6001,093,320

Non-consolidated Statements of Income(Millions of Yen)
For the year ended March 31

2006

2005

Operating revenues and expenses:
Operating revenues
Interest on loans
Interest on collateral money for securities borrowed
Fees earned
Fees on lending securities
Other

29,084
11,0281,215
883
13,6282,329

24,070
7,690
1,150
727
10,762
3,738

Operating expenses
Interest on borrowing
Interest on commercial paper
Fees payable
Fees on borrowing securities
Other
General and administrative expenses

22,073
1,049
35
1,085
9,521
3,012
7,368

20,437
875
27
756
7,629
3,751
7,397

Operating income

7,011

3,632

Non-operating revenues and expenses:
Non-operating revenues
Interest received and dividends received
Miscellaneous revenue

1,774
1,703
71

1,139
1,021
118

0
0

0
0

8,786

4,771

123
107
16

279
－
－
1
234
43

Non-operating expenses
Miscellaneous expenses
Recurring income
Extraordinary profit and loss:
Extraordinary profit
Reversal of allowance for bad debt
Profit on donated securities
Profit on sale of fixed assets
Profit on sale of investments in securities
Dividend in liquidation of Tokyo Securities Welfare Association

－
－
－
56
41
15

Extraordinary loss
Loss on sale of fixed assets
Loss on retirement of fixed assets
Loss on prior year adjustment－

Income before income taxes
Corporate, residence and enterprise taxes
Adjustment for corporate tax
Net income
Surplus brought forward from previous term
Reversal of revaluation reserve for landInterim cash dividend
Unappropriated retained earnings at the end of term

19

8,852
2,477
8
6,367
2,767
7
993
8,148

347
16
330
0
4,703
1,214
88
3,400
2,789
(163)
－
6,026

Retained Earnings(Unit Yen)
Item

AmountUnappropriated retained earnings at the end of term

8,148,053,518

Proposed appropriation is as follows:
Dividends (14 yen per share)
Bonus to directors
Bonus to auditors
Other reserve
Retained earnings to be carried forward
Note:1,391,065,830
80,950,000
15,320,000
3,800,000,000
2,860,717,688

An interim dividend of 10 yen per share was paid on December 9, 2005 to shareholders.

20Consolidated Balance Sheets
ASSETS(Millions of Yen)
As of March 31

2006

Current assets
Cash
Call loans
Notes and accounts receivable-trade
Short-term investment Securities
Inventories
Short-term loans receivable
Securities lent
Securities in custody
Securities in deposit
Deferred tax assets
Collateral money for securities borrowed
Other current assets
Allowance for doubtful receivables

9,026,381
3,823
118,000549
1,365,935
24
3,194,928
705,150
193,722
1,740,415
855
1,662,232
42,049(1,307)

Fixed assets
Tangible fixed assets
Buildings and structures
Tools, furniture and fixtures
Land
Other tangible fixed assets

696,001
7,530
3,328
480
3,323
397

Intangible fixed assets
Software
Other intangible fixed assets

3,838
3,760
78
684,632
669,067
412
7,465
7,728
(41)

Investments, etc.
Investment in securities
In-house loan
Deferred income taxes
Other investments and other assets
Allowance for doubtful receivables
Total Assets

9,722,382

21

LIABILITIES AND STOCKHOLDERS’ EQUITY(Millions of Yen)
As of March 31

2006

Current liabilities

Accounts payable-trade
Call money
Bills soldShort-term borrowings
Borrowings on Gensaki Transaction
Arrearages
Accrued income taxes
Allowance for bonus
Collateral money received for securities lentCollateral securities deposited
Securities borrowed
Securities lent offsetting account
Other current liabilities
Fixed liabilities
Long-term borrowings
Deferred income taxes of revaluation
Allowance for employees retirement benefits
Allowance for officers retirement rewards
Other fixed liabilities
Total Liabilities
Minority interest
Capital stock
Capital surplus
Retained earnings
Gains for revaluation of land
Gains from revaluation of other securities
Treasury stock
Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity

22

9,586,858
55
1,964,400
672,400
1,577,820
114,420
44,064
1,845
591
2,462,856
2,328,082
302,380
8,825
109,115
16,562
4,500
98
3,264
659
8,040
9,603,421－
10,0005,181
109,871
143(5,751)(484)
118,961
9,722,382

Consolidated Statements of Income(Millions of Yen)
For the year ended March 31

2006

Operating revenues and expenses:
Operating revenues
Interest on loans
Interest on collateral money for securities borrowed
Fees on lending securities
Other

37,226
12,413
1,226
13,777
9,808

Operating expenses
Interest on borrowing
Interest on commercial paper
Fees on borrowing securities
Other
General and administrative expenses

28,299
1,489
35
9,540
8,076
9,157

Operating income

8,926

Non-operating revenues and expenses:
Non-operating revenues
Interest received and dividends received
Rent
Miscellaneous revenue

196
75
47
74

Non-operating expenses
Interest on borrowing
Equity in losses of affiliates
Miscellaneous expenses

830
3
815
11

Recurring income

8,293

Extraordinary profit and loss:
Extraordinary profit
Reversal of allowance for bad debt
Profit on donated securities

33
17
16

Extraordinary loss
Loss on sale of fixed assets
Loss on retirement of fixed assets

140
9
130

Income before income taxes
Corporate, residence and enterprise taxes
Adjustment for corporate tax
Net income

23

8,186
2,996
237
4,952