CO., LTD.
3-11, Nihonbashi-kabutocho, Chuo-ku, Tokyo 〒103-0026
Tel 03-3666-0011 Fax 03-3668-7350

Annual Report 2018
Corporate Profile 2019

MESSAGE FROM THE PRESIDENT & CEO
We remain committed to full disclosure of our information in order to strengthen the relationship andtrust with our clients and business partners.
We produce this Annual Report / Corporate Profile every year to inform you of our business results,financial status, and business summary.

During fiscal year 2018, Japanese economy continued its moderate upswing while the corporate revenues, the employment rate, and the income
level showed continuous improvement, however, the global economy as a whole lost its momentum due to the economic slowdown of China
reflected by the trade war between US and China in the latter half of FY2018. Uncertainty about the business performances of IT relatedcompanies was enhanced after Apple’s revenues seemed to have peaked. British Parliament remained idle and the risk of No Deal Brexit was
brought to light.
As for the monetary policies, FRB raised interest rates four times in 2018, supported by favorable US economic conditions. As a result, someemerging currencies declined substantially.
Under these circumstances, each securities company struggled with commission businesses.
We also had a hard time with this, and as a result, commissions and bond trading profit
declined. On the other hand, our stock trading business, as well as the investment banking
services, achieved an excellent result. We also marked good results for real estate fund services
and real estate brokerage services. The outstanding balance for the moneylending businessincreased and it contributed to our record high financial revenue.
As a result of offsetting the shortfall caused by commission businesses with our other strong
businesses, we practically achieved the highest net profit in FY2018 since the burst of theJapanese bubble economy, and we could successfully continue to record a surplus for 16
consecutive terms.
We would not have been able to maintain the stable business result until today without ourcustomers’ warm supports. We would like to express our deep appreciation to our clients andbusiness partners.
Fiscal year 2019 is our company’s 70th milestone anniversary. We will concentrate on ourworks more than ever and make our best efforts to expand our company. We look forward to
your continued patronage and support for us.

Kunihiro Mita
President & CEO
MITA SECURITIES Co., Ltd.

01

Financial Summary of FY2018 (Income Statement)
Commissions

Financial Revenue

The total amount of commissions decreased to ¥263MM (87.6% YoY).
The details are as described below.

Financial revenue increased to ¥932MM (119.7% YoY).
Revenues of the money lending business and the margin transactions
went up to ¥522MM (144.7% YoY) and to ¥195MM (126.6% YoY)
respectively and offset the decline of factoring revenue.

Subscription Commission
While the performances of global hedge funds deeply declined in2018, those of our hedge funds were also lackluster. Subscription
commission remained at the almost same level of the previous
fiscal year as ¥69MM (93.8% YoY) due to a decrease in demandfor our hedge funds.
Other Commission/Underwriting Commission
Other commission stood at ¥71MM (99.9% YoY) as the total
assets of the investment funds remained almost unchanged.
Underwriting commission was ¥9MM (65.4% YoY).

Trading Profit
Trading profit increased to ¥2,808MM (163.2% YoY).
Stock Trading Profit
Stock trading profit increased to ¥2,569MM (184.5%
YoY). We were struggling with the stock trading businessin the first half of FY2018, however, the performance
improved drastically in the latter half of the fiscal year,
and our profit hit the record high since the establishment of
the dealing division. The trading profit for stock warrants
also contributed substantially to stock trading profit.
Bond Trading Profit
Due to the deterioration in the market environment including the
sharp decline of emerging market currencies and US Treasuries,
bond trading profit largely decreased to ¥244MM (74.4% YoY).

（Unit: Millions of Yen）

Accounts
Operating Revenue

4,369

Commissions

263

Other Operating Revenue

Brokerage

Other operating revenue stood at ¥364MM (139.1% YoY). We
served as the TOB agent for 5 deals in total, and we also served as
the financial advisory agent for capital management policies andfor cross-border M&A deals. Our fund establishment service went
favorably, and we launched funds which invested in international
real estates, and we also launched ones which utilized Real EstateSpecified Joint Enterprise Act. Real estate brokerage commission
revenue also increased.

Underwriting/Distribution/Solicitations for sales to specified investors

9

Subscription/ Distribution/ Solicitations for sales to specified investors

69

Others71

Financial Expenses
Financial expenses increased to ¥270MM (130.8% YoY) due toan increase in interest paid to banks (¥169MM, 160.2% YoY) inline with the expansion of the outstanding balance for our money
lending business. The interest paid for the subordinated bonds
also increased and had an impact on financial expenses.
According to the above results, net operating income stood at¥4,098MM (143.5% YoY).

Selling, General and Administrative Expenses
Selling, general and administrative expenses reached ¥2,876MM(121.2% YoY). There are two major factors for this increase.
Transaction related expenses increased to ¥409MM (111.6% YoY)
owing to the rise in the stock trade volume. Personnel expenses also
increased to ¥1,987MM (124.8% YoY) due to the rise in reserve forbonuses.
According to the above results, operating profit was ¥1,221MM(253.8% YoY), ordinary profit was ¥1,280MM (266.0% YoY), income
before income taxes was ¥1,274MM (263.7% YoY), and net income
was ¥997MM (302.4% YoY).

111

Trading profit

2,808

Financial revenue

932

Other operating revenue

364

Financial Expenses

270

Net Operating Income

4,098

Selling, General and Administrative Expenses

2,876

Business related expenses
Personnel expenses

409
1,987

Real estate related expenses

78

Office expenses

208

Depreciation expenses

28

Tax and dues

140

Provision of allowance for doubtful accounts

2

Others21

Operating Profit

1,221

Non-operating income

59

Ordinary Profit

1,280

Extraordinary Loss
Provision of financial products transaction liabilities reserve

55

Income Before Income Taxes
Income taxes
Income taxes adjustment
Net Income

02

Amounts

Annual Report

Annual Report

Brokerage Commission
Although the stock market kept moving upward gently
until October 2018, the transaction volume was low due toless market enthusiasm. The investment mind completely
deteriorated after the steep fall in stock prices at the end ofyear, and brokerage commission decreased to ¥111MM(80.2% YoY).

Income Statement (April 1, 2018 through March 31, 2019)

1,274
378
△101

276
997

03

Current Assets

Current Liabilities

The total amount of current assets decreased to ¥21,095MM(58.4% YoY). The main changes from the previous year are as
follows.
•Trading products decreased to ¥1,321MM (78.0% YoY) as theoutstanding balance in our dealing division declined at the end of
fiscal year.
•Assets for margin transactions increased to ¥5,696MM(115.7% YoY)
owing to the rise in the margin transactions. Short-term guarantee
deposit also increased to ¥2,101MM (153.0% YoY).
•Short-term loans receivable substantially decreased to¥6,255MM (29.0% YoY) as a result of the reimbursement of thelarge securities loan.
•As the major client for our factoring service terminated the business
contract, accounts receivable-monetary claims decreased to¥1,353MM (53.2% YoY).

The total amount of current liabilities increased to ¥16,207MM(51.3% YoY). The main changes from the previous year are as follows.
•Trading products increased to ¥677MM (136.0% YoY) owing to anincrease in the short position in Dealing Division at the end of fiscal year.
•Debts for margin transactions stood at ¥4,218MM (111.6% YoY)
due to an increase in margin transactions, and guarantee deposits
received increased to ¥1,451MM (142.2% YoY) as well
•Deposits received increased to ¥1,269MM(146.1% YoY) as aresult of an increase in cash deposits from customers.
•Short-term debts substantially decreased to ¥5,680MM(23.8% YoY)
due to the reimbursement of large loans and the decrease in thebalance for factoring business.
•Although the balance for factoring business decreased, unpaid
fees payable to our dealers and business partners increased, andaccounts payable went up to ¥1,589MM(176.1% YoY) .
the accounts payable-monetary claims increased to ¥71,768K(154.0% YoY).
•Provision for bonuses increased to ¥413MM(293.0% YoY) in linewith our good business results.

Fixed Assets
The total amount of fixed assets stood at ¥2,045MM (101.1% YoY).
As the accounting rules were amended from April 2018, bothdiffered tax assets and differed tax liabilities were moved to fixed
assets and fixed liabilities respectively. As a result, we posted¥167MM for differed tax assets.

Balance Sheets (For the year ended on March 31, 2019)

Fixed Liabilities
The total amount of fixed liabilities substantially decreased to¥33MM (5.6% YoY) due to shifting the subordinated bond tocurrent liabilities from fixed liabilities as the maturity term of theinferior bond with a face value of ¥500MM became within one year.

Net Assets
Net assets stood at ¥6,879MM (115.8% YoY). Our net assets keep
breaking the records for the three consecutive terms.
According to the above results, total assets stood at ¥23,140MM(44.4% YoY), and capital adequacy ratio reached 353.9%(307.1% at the end of previous fiscal year).

Financial Highlights
Surplus for the 16th straight year (unit:millions of yen)

Change in Capital Adequacy Ratio

1,600

400.0％

18.0％

350.0％

16.0％

300.0％

14.0％

800

200.0％

600

150.0％

400

100.0％

200

50.0％

2.0％

0

0.0％

0.0％

10.0％

6.0％

8,000

250,000

04

Current Liabilities

16,207

Cash and deposits

1,590

Trading products

677

Segregated cash and deposits

1,860

Liabilities for margin transactions

Trading products

1,321

Trade date accrual

702

18
20

17
20

16
20

Cash received for securities lending on margin transactions

4,081
137

5,696

Deposits received

1,269

Loans on margin transactions

4,139

Guarantee deposits received

1,451

Cash collateral pledged for securities borrowing on margin transactions

1,556

Short-term debts

5,680

Short-term guarantee deposits

2,101

Bonds to be redeemed within 1 year

Short-term loans receivables

6,255

Accounts payable-other

1,589

Accounts receivable-monetary claims

1,353

Income taxes payable

379

231

Provision for bonuses

413

△ 16

Other current liabilities

27

Other current assets
Allowance for doubtful accounts

Fixed Assets

2,045

Fixed Liabilities

500

33

Tangible fixed assets

58

Provision for retirement benefits

20

Intangible fixed assets

23

Performance-based provision for bonuses

3

Other noncurrent liabilities

10

Investments and other assets

1,963

Investment securities

201

Investments in capital of subsidiaries and affiliates

908

Long-term loans receivables

623

Long-term guarantee deposits

53

Long-term prepaid expenses

7

0.45％

Other investments

98

0.40％

Allowance for doubtful accounts(Unit: %)Borrowings on margin transactions

4,218

Assets for margin transactions

167(Commissions+Bond Trading Profit/Assets Under Custody)

Amounts

21,095

△ 96

0.25％
0.20％

Total Assets

Reserves Under the Special Laws
Reserve for financial products transaction liabilities
Total Liabilities

19
19
16,261Net Assets
Shareholders' Equity
Capital stock

6,879

500

Retained earnings

6,625

Treasury stock△245

23,140Total Net Assets

6,879

Total Liabilities and Net Assets

23,140

20
18

17
20

16
20

15

18
20

17
20

20

16

0.15％
15

0
14

0

20

50,000

20
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
0
20 9
1
20 0
1
20 1
1
20 2
1
20 3
1
20 4
1
20 5
1
20 6
1
20 7
18

1,000

Accounts

0.30％
100,000

20

2,000

Current Assets

Amounts

0.35％

150,000

4,000
3,000

Accounts

Liabilities

Deferred tax assets

Fee Turnover Rate

20

5,000

200,000

OthersBeneficiary Certificates
Bonds
Stocks15

20

Change in Assets Under Custody (unit:millions of yen)

20

14

18
20

17
20

16
20

20

20

15

4.0％

Change in net assets
for the past 16 fiscal years of consecutive surplus (unit:millions of yen)

6,000

Assets

8.0％

14

20
0
20 3
0
20 4
0
20 5
0
20 6
0
20 7
0
20 8
0
20 9
1
20 0
1
20 1
1
20 2
1
20 3
1
20 4
1
20 5
1
20 6
1
20 7
18

250.0％

7,000(Unit: %)

12.0％

1,000

14

1,200

Ordinary Profit
Net Income

Change in ROE

20

1,400

(Unit: %)（Unit: Millions of Yen）

Annual Report

Annual Report

Financial Summary of FY2018 (Balance Sheets)05

Annual ReportCompany Executives (From June 2017 to June 2018)
Kunihiro Mita / President & CEO

Yuji Nakao / Board Director

1994 Graduated from the Faculty of Law at Sophia University
1994 Joined Nikko Securities (current SMBC Nikko Securities)
1998 Joined Mita Securities
2001 President & CEO of the Company

1982 Graduated from the Faculty of Economics at Saga University
1982 Joined Yamaichi Securities
1998 Joined Merrill Lynch Japan Securities(currently Bank of America Merril Lynch Securities)
2002 Joined DLJ Direct SFG Securities (currently Rakuten Securities)
2004 Joined Mizuho Securities
2008 Joined Mita Securities
2012 Executive Director of the Company

Tatehito Kadokura / Board Director

Tsukasa Nakamoto / Board Director

1991 Graduated from the Faculty of Economics at Chuo University
1991 Joined Nikko Securities (currently SMBC Nikko Securities)
2002 Joined Japan Global Securities (currently Naito Securities)
2004 Joined Mita Securities
2009 Board Director of the Company

1998 Graduated from the Faculty of Computer Science at University of California
1998 Joined Atsugi Information System
2002 Joined United World Securities
2004 Joined Societe General Securities
2005 Joined Mita Securities
2017 Board Director of the Company

Tadashi Chaki / Board Director

Shigenari Ishibashi/ Board Director

1992 Graduated from the Faculty of Commerce at Waseda University
1992 Joined Nomura Securities
2008 Joined Mita Securities
2018 Board Director of the Company

1992 Joined Aoyama Audit Corporation
1993 Graduated from the Faculty of Political Science and Economics at Meiji University
1997 Registered as a Certified Public Accountant
1998 Joined Credit Lyonnais Bank
2000 Joined Canadian Imperial Bank of Commerce (CIBC)
2003 Transferred to CIBC World Markets (Japan)
2017 Joined Mita Securities
2019 Board Director of the Company

David Atkinson / Outside Board Director

Yoshinobu Fujimoto / Corporate Auditor

1987 Graduated from the Faculty of Japanese Language at Oxford University
1987 Joined Andersen Consulting
1990 Joined Solomon Brothers Securities
1992 Joined Goldman Sachs
1998 Managing Director of Goldman Sachs
2006 Partner of Goldman Sachs
2007 Resigned from Goldman Sachs
2009 Joined Konishi Decorative Arts & Crafts as Executive Director
2010 Chairman of Konishi Decorative Arts & Crafts
2011 President & Chairman of Konishi Decorative Arts & Crafts
2014 President of Konishi Decorative Arts & Crafts
2016 Company Outside Director of Mita Securities

1989 Graduated from the Faculty of Law at Waseda University
1991 Registered with the Second Tokyo Bar Association
1991 Joined Asahi Koma Law Office (currently Nishimura & Asahi LPC)
1995 Graduated from University of Chicago Law School (LL.M.)
1996 Registered with the NY state Bar Association
2008 Company auditor of Mita Securities(Currently he is Partner of Nishimura & Asahi LPC.)

Yukihiro Shimizu / Corporate Auditor

Tatsuya Otsuki / Managing Director

1995 Graduated from the Faculty of Engineering at Hokkaido University
1995 Joined Hokkaido Takushoku Bank
1998 Joined IBJ Securities (currently Mizuho Securities)
2000 Joined Nikko Solomon Smith Barney (currently City Group Securities)
2005 Joined Livedoor
2006 Vice President of Livedoor
Chairman of Kazaka Securities (currently Naito Securities)
President of Kazaka Financial Group
Executive Director of Cecile
Executive Director of Media Exchange
2008 Joined Mita Securities as Executive Director
2013 Company auditor of the Company

1991 Graduated from the Faculty of Business at Doshisha University
1991 Joined Fuji Bank (currently Mizuho Bank)
2000 Joined HSBC
2005 Joined Deutsche Bank
2006 Joined Capital Partners Securities
2016 Joined Mita Securities

Yoshiki Iida / Managing Director

Keisuke Tomoyori / Managing Director

2003 Graduated from the Faculty of Business at Toyo University
2003 Joined Okasan Securities
2006 Joined Japan M&A Management
2007 Joined Mita Securities

2002 Graduated from the Faculty of Economics at Musashi University
2006 Joined Nikko Cordial Securities
2009 Joined Mita Securities

Mission

SincereSoft＆Service
Small, Slim＆Speedy

Our Company’s officers and employees act faithfully for our clients, business partners, laws
and ordinances, and shareholders.
Our Company’s officers and employees provide high-value added businesses
with our original business knowhow and the best services.
Our Company carries out speedy decision-making with our compact and lean organization.

All of the executives and employees share the concept of “ Six S ” as the fundamental principles, make the best effort to achieve
our client’s goals through the securities business, and furthermore, contribute to develop the sound Japanese economy.
Business Principles
Client Focus

Listen to our clients
We can find the best solutions eventually if we fully understand the essence of our clients’ problems.

Win-Win

Conduct businesses by which we can build a win-win relationshipwith every one of our clients, business partners, officers and employees, and shareholders
Only businesses which make every member engaged in projects happy can last longer.

Reputation

Seek businesses which enhance our reputation
Reputation can be enhanced by our efforts with a proper attitude toward businesses.

ROE

Achieve high profit by effective resource allocation
We manage our company with higher ROEs, enhance capital stock, and build a sound financial base.

Compliance

Place importance on complianceManagement focusing on compliance is required naturally within this free market in principle.

Teamwork

Set a high value on teamwork
We can provide the more appropriate business solution for our clients if our team can gain power by
respecting each other’s individuality among the team members.

Adaptability,
Creativity

Cherish adaptability and creativity
Personnel with high productivity can absorb the constantly changing trends of society and anticipate the future.

Commitment

Deal with our services with absolute responsibility
Businesses without responsibility give troubles to various people including our clients, business partners, andhis/her own team members.

Private Banking
Institutional Sales

Financial TechniqueCorporate Profile

06

Mission / Business Principles

Investment Banking

Principal Investment
Prop Trading07Special Features of Mita Securities

Wealth Management Services

We continue to achieve positive net income for 16 consecutive terms.

■Wealth Management Services of Mita Securities

We have been continuing to achieve a surplus for 16 consecutive terms. We have been going through several difficult times, such as Lehman
shock, European sovereign bond crisis, and the great east Japan earthquake. It has not been easy for us as a securities firm to remain in surplus
for this period, however, we have been successfully able to stabilize our business results as we diversified our services broadly into various
businesses, such as private banking, investment banking, money lending services, real estate related services, and dealing business, andmoreover, we have a number of unique financial services and products which no one can find in other financial firms.

Fiduciary Duty
We have been posting a word of “Fiduciary Duty” in our yearly management plan since FY2003 and share this word among all our employees,
as we always believe it is our crucial responsibility as professionals in a security firm to take care of our clients faithfully.
Churning is executing excessive trades for an investment account of a client by a salesman in a securities company or a bank in order to generatecommission from the account, and it has been criticized in the market as a matter of the sales attitude of financial products. Meanwhile, our asset
turnover ratio*of our clients is drastically low among the security industry, and it is only 0.25% per year (the actual result of FY2018).
*Asset turnover ratio = (Commissions from clients + Bond trading profit) / Clients’ assets in custody

Lineup of our unique products and services
It is one of our strengths to have unique financial products and services, and we aim at further differentiation from other financial institutions.
The time of “push sales strategy” in which securities firms sell their financial products to their customers for their own conveniences should beended. We feel significant to offering products and services that our clients truly seek and acclaim.
When we create new products and services, we try to deal with them with flexibility and speed, and we also carefully examine illegality of those
products and services.

Venture Sprits
We value a freewheeling culture and challenging sprit. Our firm is made up by various types’ professionals, and it is indispensable for us toenjoy works by making the best use of our ingenuity in order to deal with creative works. Mita Securities was established in 1949 and it isobviously not a young company, however, we never forget our venture spirits inside our hearts.

Main Business Achievements after April, 2018
We practically achieved the highest net profit in FY2018 since the burst of the Japanese bubble economy.
█ We purchased the stock warrants of AnGes, Inc.
█ We launched a residential real estate fund located in Yushima utilizing Real Estate Specified Joint Enterprise Act.
█ We achieved IRR4.8% by selling the residence located in Minamiazabu which was structured by utilizing Real Estate Specified Joint Enterprise Act.
█ We served as the TOB agent for Japan Asia Group Limited’s tender offer for the shares of Sanyo Homes Corporation.
█ We served as the TOB agent for Maruman Korea Co., Ltd.’s tender offer for the shares of Maruman & Co., Ltd.
█ We served as the TOB agent for Belluna Co., Ltd.’s tender offer for the shares of Sagami Group Holdings Co., Ltd.
█ We served as the TOB agent for BMI Hospitality Services Limited’s tender offer for the shares of Gexeed Co., Ltd.
█ We served as the TOB agent for Minami Aoyama Fudosan KK’s tender offer for the shares of Kosaido Co., Ltd.
█ We launched a real estate fund investing in distressed properties in Houston, US.
█ We served as the M&A advisory agent for a major Japanese restaurant company regarding acquisition of a restaurant chain in Singapore.
█ We served as the financial advisory agent for capital management policies of a listed company.
█ We received a mandate for structuring an event driven fund.
█ We served as the M&A advisory agent regarding acquisition of a hospital.

Real Estate Services

We support our clients’ asset management from the side. We provide
broad and various investment products not only traditional financial
products such as stocks, bonds, and investment trusts, but also
products tailored for clients’ needs and special occasion products.
We not only provide financial products, but also analyze individual stocks,
financial products, and portfolios. We also calculate market value of the financial
products, propose asset diversification, and give various financial advices.

We are qualified as a registered real estate broker, and received
approval to launch real estate funds as a real estate specified joint
enterprise operator. Our real estate team deals with our clients’various needs for real estates. Its services include sales transactionsof real estate and real estate trust beneficiary rights, efficient usagesof real estates, and the establishment of real estate funds, by utilizing
our features as a securities firm.
We also provide information of international real estates and support sales
transactions in response to the increasing needs for overseas real estates.

Inheritance Strategy
It is essential to take enough time for inheritance measures in orderto pass on the assets to the next generation. Moreover, we should
keep it in mind to secure assets with high liquidity so that successors
can pay inheritance tax without difficulty. (Tax payment measures)
We especially need to be careful if the portion of assets with low
liquidity in major proportions.
We grasp the current condition and plan the best measure according toour clients’ intention, and we also provide our clients with simulation
works for inheritance tax, advices for inheritance measures, andassessment of unlisted stocks. Nowadays we proceed with theresearch for inheritance measures with utilizing global schemes.

Business Inheritance Measures
It is a constantly critical issue how our client’s companies should be
passed on to the next generation. If the stocks are unlisted, it would
require substantial money for tax payment when transferring them.
Therefore we need to plan carefully and execute it steadily forsmooth business inheritance. It is also necessary to hedge risks forunexpected disease or death. The most important point of all is toclarify who will the successors.
We ourselves experienced the business inheritance, and have been
engaged in a number of cases for our clients as well. By making useof these experiences and achievements, we are confident in proposing
realistic and flexible measures which meet our clients’ needs.

Fund Structuring Support
In case of forming funds (including partnership), it is necessary tofollow various business regulations. We support our clients to form
funds, such as business-oriented funds, funds to invest in securities,
and real estate funds which meet our clients’ needs. We have trackrecords for a number of private fund establishments.

Finance
We are qualified for the money lending business and can support fundraising for our clients. We endeavor to provide speedy and high-quality
services so that we can meet our clients’ finance needs quickly. Our financeservices include securities-backed loans and mortgage-backed loans, andespecially investment trust-backed loans and mortgage-backed loans foroverseas (mainly US) real estates are our unique services.
We also possess the broad range of experiences and solutions forcorporate finance, not only for individual clients. We provide theexclusive solutions to meet our clients’ needs by partnering with ourinvestment banking division, including factoring services andpurchasing stock acquisition rights.

Insurance
We try to deal with various risks surrounding our clients, and we
propose schemes to hedge risks, which fit our clients’ life plans.

Other Services

Organization Chart

Capital Strategies/M&A
Finance DivisionCorporate Auditor

Audit Division

Board of Directors

President & CEO

System Risk Committee
Compliance Committee

Administration Dept
Financial Reporting Dept
System Dept

Control Division
Investment Banking Division
Equity Dealing Division

Operations Dept
Compliance Dept.
Underwriting Evaluation Dept

Tax Advisory Office
Client Relation Division

Wealth Management Dept

Financial Product Division

Retail Sales Dept

Real Estate Division

08

Asset Management

We propose our clients’ companies with the most appropriate solutions
for even complicated issues by utilizing our new technologies andbroad information networks, such as capital strategies or M&A.
We can provide a wide range of services, such as consolidation of
scattered stocks, inheritance of stocks to successors by controlling thevoting rights, acquisition of international companies aiming foroverseas expansion, M&A utilizing treasury stocks, unwinding
cross-shareholding (block trades), and global reorganization. We
utilize our total capability with our investment banking division, tax
advisory team, and external professionals.

•Block Trade
We search counterparties for our clients’ block trades with our
external business partners, when our clients are willing to sell orpurchase a large amount of listed stocks at one time.
•Stock Lending
Our clients can obtain negative interest per diems by lending theirowned stocks.
•Standing Proxy Services
If our clients are non-Japanese residents and willing to maketransactions of Japanese securities, it is required for them todesignate a standing proxy in Japan. We support those clients for
non-resident transactions by becoming their standing proxy.

Corporate Profile

Corporate Profile█

Since 1949, we have been running the family business, and we are one of a few privately owned securities companies whose majority shares are owned by one family.
While we keep our family business and we were also engaged in sustainable development of family businesses of our clients, we have obtained
various knowhow and experiences of wealth management.
Our wealth management team supports for the greater prosperity of our clients’ families by providing with the services which we ourselves actually have experienced.
We believe it is our virtue, value, and pride to be able to keep a good relationship with our clients’ families for generations.
We provide the most appropriate advice and services for the whole field of assets of our clients including asset management, inheritance, andbusiness succession. With a mid- and long-term point of view, we commit to work diligently for the sake of our clients.

If there are any other requests, we make the best effort to fulfill our clients’ needs and requests as much as possible. By dealing withvarious requests from our clients proactively, our services have succeeded to expand and deepen. Requests from our clients areimportant sources for our company’s sustainable development.

09Real Estate Services

Investment Banking Services
We provide various services for finance and business strategies as our main investment banking services.
Our services include financial advisory services for rights offerings and M&A and TOB agent services. Especially we have strength in mediumand small-sized projects or special projects which major investment banks do not deal with proactively. We have been successfully
accumulating experiences and the actual results steadily in these fields.
We are building the business systems to enable us to invest, to lend money, or to accept securities by ourselves, so that we can deal with a wide
range of our clients’ finance demands with flexibility.
We are now searching business partners who would introduce our services to a number of other clients on behalf of us. Those partners can utilize ourcompany’s infrastructures linked with various financial services and the network among our business partners by joining our Mita Partnership Program.

Finance
We provide various clients including listed and unlisted companies, medical institutions, nursing care operators, dispensing pharmacies, company management, etc.
with funds in various ways. We can propose the appropriate solutions even for the difficult projects which banks or other security companies do not deal with.
•Rights Offering (commitment type)
Rights offering is a new technique of a capital increase for listedcompanies, where share options are allotted to all shareholders without
contribution. It has been attracting attention rapidly in recent years.
We can deal with the commitment type of rights offering, whichmeans we purchase all the share options which were not exercised by
the shareholders and then we exercise all of them. With utilizing thisscheme, listed companies can achieve capital increases without fail.

•Underwriting and Purchase of Securities
We have a number of track records for securitized products andpurchase of listed companies’ securities such as warrants issued bya third-party allocation. We provide tailored finance plans withlower costs in a speedy manner.

Real Estate Intermediary

Forming and Selling of Real Estate Funds

We search buyers or properties for our clients’ needs of selling orpurchase of real estate, and give our clients the one-stop services
including negotiations and executions.
We try to gather original information given from our special
sources or from our close relationship with real estate companies,
other than Internet information already on the market.

We are a securities company qualified as a real estate specified joint
enterprise operator, and we provide smaller-sized real estate products basedon the aforementioned regulations. Foaming original funds which meet ourclients’ needs is one of our strengths, and we deal with other securitizationneeds based on laws other than Real Estate Specified Joint Enterprise Law.
Creating the schemes is supported by our tax accountants, lawyers, etc.
and is achieved with a high-level of performance.

Intermediary of Real Estate Trust Beneficiary Rights
We deal with intermediary services of real estate trust beneficiary.
We support a series of transactions including research for realestate and submitting its report, preparation of documents basedon the Financial Instruments and Exchange Law, preparation oftransaction agreements, settlement services, etc.

Real Estate Loans
We provide loans backed by clients’ real estate properties which
can be both domestic and overseas, and that is the most significant
feature among our services.
We try to grant loans with a term of a minimum of one week fromreceiving loan applications, so please contact us for any urgent requests.

Advisory

Other Real Estate Solution BusinessWe provide comprehensive and tailor-made solutions, centered for listed companies, in order to meet the various requests of our clients, suchas capital increase through shareholders’ allocation, M&A, reorganization, business alliances, etc. We utilize our advantage of being a small
team of elite professionals and show a strong presence in projects which major financial institutions do not deal with.

We provide solutions relating to various real estate businesses
including effective use and value-up of clients’ properties.

•Rights Offering
As stated earlier, we hold the top track record of market shares inJapan as financial advisor. We provide broad and maximum support
including scheme design, financial assistance for shareholders, andassisting negotiations with public organizations.
•Stock Option
We provide listed companies and companies planning initialpublic offerings with consulting services to implement various
stock options, and we also deal with opening and management ofspecific accounts used for exercising stock options.

•M&A Advisory Services
We provide various professional advisory services as well as company
valuation, which are essential for execution of M&A. It is not realistic to
pay all the huge investment cost of M&A by its own money. It is quite
common that the company is forced to find some kind of way for fundraising with necessity, and we can arrange the best finance schemes forour clients at the same time with our M&A advisory services.
•TOB Agent Services
As a general rule, it is required to appoint a security company as TOB
agent when considering acquiring stocks of the listed company morethan a certain number off the market. We have abundant experience andtrack records of TOB as TOB agent. We provide comprehensive supports
including scheme design of TOB and various administrative works.

Stock Dealing Business

Bond Trading BusinessWe have top-class stock dealing members among middle-classsecurities firms. They are focusing of the proprietary trading withstocks, futures, and option trades. We also placed the dealing
division in Singapore, and it has been contributing to our goodbusiness results.

We have highly experienced bond dealers in our dealing division.
They purchase good bonds from outside and sell them to ourcustomers, and they also engaged in distributing bonds to othersecurities firms. We have been able to provide various types ofbonds to our customers as a result of our abundant relationshipwith investment banks and frequent participation in the clearing
house that specializes in the settlement of securities transactions.

•Securitization
There are methods to achieve fundraising by dividing assets into
small-lot and securitizing them. We provide a full range ofservices including the first scheme design, setting up funds,
intermediary or mediator services, and the final exit.

We believe we should also be an investor before we offer
investment opportunities to our customers. We earnestly searchvarious investment opportunities globally and would invest in
attractive financial products at our own risk.
Corporate Profile•Standing Proxy Services
If our client is a non-Japanese resident and willing to make transactionsof Japanese securities, or if shareholders or corporate bondholders
move out of Japan, it is required to designate a standing proxy in Japan.
We serve as standing proxy while there is only a limited number of
securities companies that can handle this standing proxy services, andwe make the best effort to meet our clients’ business needs.

Proprietary Trading

Proprietary Investment

Other Services

Corporate Profile

We try to meet our clients’ needs for searches and selling of real estate properties and other requests relating to real estate in our Real Estate Division.
We are qualified as a registered real estate broker, and as a real estate specified joint enterprise operator, and we are making approaches toward
the real estate market from a fair and neutral point of view as a securities firm. We also develop real estate investment products originally andare increasing the investment choices of our clients as we try to provide unique real estate businesses.

Money Lending BusinessOne of our other services is money lending business, and we deal with funding needs of clients, such as listed companies’ owners. We also support fundraising for medical institutions with our factoring services.

10

Securities-backed Loans

Factoring/Loans for Medical Institutions

We provide loans by accepting listed stocks, investment funds,
and foreign bonds as collateral. The registration names of thoseshares will be unchanged, so that clients can utilize their own
stocks without losing their rights of shareholders.

We purchase the accounts receivables of medical consultation fees,
dispensing fees, and nursing care charges from medical institutions. We
also provide loans to medical institutions. We started this factoring businessin 2003, and now we are one of the factoring service companies with thelongest history of achievements.

11Compliance

Company Overview■Compliance Structure of Mita Securities

We are a financial instrument business operator who is an important player in this financial market, therefore we not only ensure strict
compliance with all laws and regulations, but also need to develop the sufficient internal control structure in order to protect investors and tosecure fairness of the market. Compliance is a top management priority for our company.

Governance

Board of Directors

Audit Department

Audit

External Auditor

Audit Report

Internal Control System
Any financial instrument business operator is required to check client management, sales personnel management, transaction management, transaction
inspection, underwriting examination, compliance inspection system, lawsuits against clients, administrative management, information control, andexternal business contractor management. We also manage a Chinese Wall and the information control related to the clients systematically.

Tokyo Head Office Map
Tokyo Stock ExchangeTokyo Head OfficeEitai Dori

12

Tanjong Pagar Station

Securities Dealers Association

Tokyo Tozai Hibiya Line

Osaka Branch Office Map

LAWSON
ローソン

Kayabacho Intersection

Fukusuke

Singapore Branch Office

Robinson Rd

Kayabacho Station

Risk Control System
We analyze various risks including transaction risks, operational flow risks, and system risks, and we pay close attention to those risk
management so that we can eliminate or limit risks in advance. It is most important to prevent risks before they actually happen. But if we
actually fail to eliminate them, it is reported to the Board of Directors through the manager of corporate management department, and the Boardof Directors conducts risk management in order to deal with it appropriately and quickly.
Moreover, we place the System Risk Committee under the Board of Directors, and this committee periodically examines our overall systemrisks, and improves them if necessary.
As for the risk of sudden natural disasters, we plan the BCP (Business Continuity Plan) and aim to avoid the risks. We also conduct trainings
in order to be able to continue our businesses in emergency situations to the greatest degree possible.

Singapore Branch Office Map

Telok Ayer Station

Rafﬂes Place Station

Shenton Way
Marina Bay

Corporate Profile

It is essential for all officers and employees in the securities companies to comply with the compliance with all laws and regulations. However, due to the existenceof broad and various regulations in the securities industry, it is likely for us to have a brush with the laws and regulations without consciousness. In order for ourofficers and employees not to breach the compliance with all laws and regulations, we periodically conduct the training programs for them aiming to enhance theirunderstanding for the compliance. We also display our internal regulations on our intranet so that our officers and employees can easily browse them.
The corporate management department checks the compliance system every day, and the audit department conducts internal audits based on the audit plan.
If there are any violation of the laws and regulations, the audit department conducts the quick and appropriate procedures, and improves the problems.
Moreover, we place the Compliance Committee under the Board of Directors, and this committee examines our overall compliance system with expertise.

(As of June, 2019）

ト
ダク
イア
・バ
ペル
ケッ

Corporate Profile

Compliance with All Laws and Regulations

Membership in Exchanges:
Membership in Investor Protection Funds:
Accounting Auditor:

Subway Sakaisuji Line

Check and Assessment of Compliance System,Risk Controls,and Internal Controls/Demands for Improvement of Problems

Check for Risk Control
and Internal Controls

Corporate Auditor

Membership in Associations:Inter Circular Route(Toll road)

ComplianceDepartment

Pointing Out Problems ofInternal Control System

Showa DoriInfrastructure Unit

Reporting Problems ofInternal Control System

Toei Asakusa Line

Check for Compliance System andInternal Control System

Business Unit

Governance Check

Instructions for
Problem Solving

Nihonbashi Station

Instructions for Improvement to Enhance
the Quality of Internal Control System

Maxwell Rd

Head of Internal Control System•Compliance Committee•System Risk Committee

Shin-Ohashi DoriCommittee

Commencement of Operation:
Capital:Major Shareholder:
President & CEO:
Overseas Subsidiary:
Office addresses:

MITA SECURITIES Co., Ltd.
Director of Kanto Local Finance Bureau (Financial instruments firms) No.175
Moneylender / Tokyo Governor (6) No.27088
Registered Real Estate Broker / Minister of Land, Infrastructure, Transport and Tourism (1) No.9342
Real Estate Specified Joint Enterprises / Commissioner of the FSA・Minister of Land, Infrastructure and Transport No.76
July 1949¥500,000,000
Kunihiro Mita
Kunihiro Mita
EJ Consultancy Services Pte.Ltd.
(Head Office)3-11, Nihonbashi-kabutocho, Chuo-ku, Tokyo 〒103-0026
Tel +81-3-3666-0011 Fax +81-3-3668-7350(Osaka Branch)
1-7-15, Minami-honmachi, Chuo-ku, Osaka City, Osaka 〒541-0054
Tel +81-6-6260-5670 Fax +81-6-6260-0882(Singapore Branch) 07-03/04 112 Robinson Road Singapore 068902
Tel +65-6692-8325(Subsidiary)
Mita Securities Global Consulting Pte. Ltd.
105 Cecil Street #25-01/04 The Octagon Singapore 069534(Subsidiary)
EJ Consultancy Services Pte. Ltd.
105 Cecil Street #25-01/04 The Octagon Singapore 069534
Japan Securities Dealers Association
Tokyo Real Estate Association
Japan Financial Services Association
The Tokyo Stock Exchange・The Osaka Stock Exchange
Japan Investor Protection Funds
SeishinShisei & Co. / OAKFIELD & ASSOCIATESTokyo Metro Hibiya Line

Our Governance

Company Name:
Registration:

Heisei DoriOur governance framework is as shown below.
The Board of Directors has a role with a full responsibility for the internal control system. It has a responsibility to enhance the quality of the internal controls
by receiving reports and evaluations from the corporate management department, the audit department, the auditors, the accounting auditor, or others.
The corporate management department examines the status of compliance and risk controls of the business department, and checked every day if there are any
violations of laws and ordinances and risk control-related problems. If any, it requests the business departments for improvement and also reports these important
issues to the Board of Directors.
The audit department periodically examines and assesses the quality and functions of the internal control system of the corporate management department.
If necessary, it conducts improvement of the problems for the corporate management department, the business department, and the administrative
department, and it points out the problems and lists demands for improvement to the Board of Directors.
The auditors have a role for the governance inspection for the Board of Directors, and examine if the Board of Directors is managed legally andappropriately or if there are any violations of the duty of a prudent custodian to the Company. If there are any problems associated with the above, theauditors send a list of demands for improvement to the Board of Directors or conduct the predefined necessary procedures.
The accounting auditor conducts auditing for the appropriateness of our accounting process and the appropriate indication of the financial statements.
Our accounting auditor is SeishinShisei & Co. currently.

Osaka Branch Office

Teijin Hall

Chuo Odori

Sakaisujihonmachi Station
Bank of Tokyo-Mitsubishi UFJ

Subway Chuo Line13