notice of the 39th ordinary general …...2015/06/09 · installment payment paying for commission...

The following is an English translation of the Notice of the 39th Ordinary General Meeting of Shareholders of J Trust Co., Ltd. The Company provides this translation for your reference and convenience only and without any warranty as to its accuracy.

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Securities Code: 8508

June 9, 2015

To Shareholders Nobuyoshi Fujisawa

President & CEOJ Trust Co., Ltd.

1-7-12 Toranomon, Minato-ku,Tokyo, Japan

NOTICE OF THE 39TH ORDINARY GENERAL MEETING

OF SHAREHOLDERS

We express our deep appreciation to each of you for your continuous support to us. Please be advised that you are cordially invited to attend the 39th Ordinary General Meeting of

Shareholders of J Trust Co., Ltd (“the Company”). The meeting will be held as described below. If you are unable to attend the meeting in person, you are entitled to vote by mail. In that case, we cordially request you to kindly review the attached Reference Document for the Ordinary General Meeting of Shareholders, indicate “for” or “against” for each of the proposals in the enclosed Voting Right Exercise Form, and return the form to us no later than 6:00 p.m., Thursday, June 25, 2015 (Japan Standard Time). 1. Date and Time June 26, 2015 (Friday) at 10:00 a.m. 2. Venue “Nadao Hall,” Shin-Kasumigaseki Bldg. LB Floor,

3-3-2 Kasumigaseki, Chiyoda-ku, Tokyo 3. Agenda: Matters for Reporting: 1. The 39th Business Year (from April 1, 2014 to March 31, 2015)

Business Report, Consolidated Financial Statements, and Results on the Audits of Consolidated Financial Statements by the Accounting Auditor and the Audit & Supervisory Board

2. The 39th Business Year (from April 1, 2014 to March 31, 2015) Report on Non-Consolidated Financial Statements

Matters for Resolution: Proposal 1 Election of Eight (8) Directors Proposal 2 Election of One (1) Audit & Supervisory Board Member

Translation for your reference purpose only

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4. Decisions Regarding the Convocation of the Ordinary General Meeting of Shareholders Out of the documents which should be provided for this Notice of the Convocation, the documents listed below are not included because they are made available at the Company’s website (http://www.jt-corp.co.jp/en) pursuant to the applicable laws, regulations and Article 15 of the Articles of Incorporation of the Company. (i) Notes to Consolidated Financial Statements of the Company (ii) Notes to Non-Consolidated Financial Statements of the Company

Accordingly, in addition to the attached documents to this Notice of the Ordinary General Meeting of Shareholders, above documents are also included in the consolidated financial statements and non-consolidated financial statements audited by the Audit & Supervisory Board Members in preparing the Audit & Supervisory Board’s report and also by the Accounting Auditor in preparing the accounting auditor’s report. * When you attend the meeting in person, please submit the enclosed Voting Right Exercise Form at the reception counter. In addition, you are also kindly requested to bring this Notice as meeting materials when you attend. * If exercising your voting rights by proxy, you can appoint any one of other shareholders with voting rights of the Company. Please note that such shareholder or your proxy is required to present a document evidencing his/her appointment as proxy at the reception counter. * Any revisions in Business Report, Consolidated Financial Statements, Non-Consolidated Financial Statements and Reference Document for the Ordinary General Meeting of Shareholders will be disclosed on the website of the Company. (http://www.jt-corp.co.jp/en)


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Attached document BUSINESS REPORT

(For the period from April 1, 2014 to March 31, 2015) 1. Situation Surrounding the Corporate Group

(1) Business Developments and Results

During the current consolidated fiscal year, the recovery of US economy became more apparent while the global economic outlook remained unclear on the back of slowdown in Chinese economy and deflationary concern in Europe. Especially financial, currency and stock market in Asia experienced significant volatility every now and then due to the possible interest rate hike in US. As for Japan, on the back of financial and economic policy etc. implemented by Japanese government and Bank of Japan to exit from deflation, yen depreciated and stock price surged. There was some positive indication of recovery in corporate results, business confidence and consumer confidence. On the other hand, concern on business results remained due to yen depreciation and prolonged stagnation in consumer confidence after consumption tax hike. Therefore, we cannot be optimistic on the outlook. In this economic environment, we as a Group, consider that it is inevitable to transform our business ahead of the change in global and Japanese economy. Our major task is to expand business in Asia whose economy is expected to continue growing at high pace and maximize the synergy generated by our network of Group companies. Based on the above mentioned business strategy, we focused on building the foundation for future profit generation in the current consolidated fiscal year. We conducted M&A and organizational restructuring proactively in and out of Japan to achieve further growth by capturing new growth opportunities and to promote the efficient use of management resources and improvement in management efficiency. (i) Business development in Southeast Asia In Indonesia, we acquired 99.0% shares of PT Bank Mutiara Tbk. (Republic of Indonesia, hereinafter, “Bank Mutiara”), a commercial bank in Indonesia from Indonesia Deposit Insurance Corporation which owned its 99.996% shares in November 2014, making it our consolidated subsidiary. Going forward, we plan to provide comprehensive financial services including various loans such as mortgage loans etc., card services, foreign exchange related services targeting at small and medium-sized enterprises and salaried workers whose presence is rapidly growing along with economic expansion. Moreover, in Thailand, we concluded an agreement to underwrite convertible bond issued by Group Lease PCL (Kingdom of Thailand), a listed company, through JTRUST ASIA PTE. LTD. (hereinafter, “JTA”). We aim at generating synergy through provision of finance by Bank Mutiara, collaborative development of hire-purchase financing business in Indonesia, whose economy is expected to continue growing and business alliances when Group companies operate in Southeast Asia. (ii) Business development in South Korea From Standard Chartered Korea Limited (headquarters: Seoul Special City, South Korea), we acquired all shares of Standard Chartered Savings Bank Korea Co., Ltd. (headquarters: Seongnam-si, Gyeonggi-do, South Korea) in January 2015 and Standard Chartered Capital (Korea) Co., Ltd. (headquarters: Seoul Special City, South Korea) in March 2015, making both our consolidated subsidiaries. The trade name has been changed from Standard Chartered Savings Bank Korea Co., Ltd. to JT Savings Bank Co., Ltd. (hereinafter, “JT Savings Bank”) and from Standard Chartered Capital (Korea) Co., Ltd. to JT Capital Co., Ltd. (hereinafter, “JT Capital”). The combined operating area of JT Savings Bank and Chinae Savings Bank covers about 70% of South Korea. This will enable us to strengthen our marketing effort and to provide services throughout the country. Therefore, we can expect the increase in loan balance and deposit balance, better cost performance in marketing and advertising and improvement in reputation etc.


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Moreover, we can hire competent people countrywide. In August 2014, we transferred loan business of HICAPITAL Co., Ltd. (hereinafter, “HICAPITAL”), TA Asset Management LLC (former KJI Consumer Finance LLC, hereinafter, “TA Asset Management”) and Neoline Credit Co., Ltd. (hereinafter, “Neoline Credit”), hereinafter collectively called “Group Financial Companies”, to Chinae Savings Bank Co., Ltd. (hereinafter, “Chinae Savings Bank”). After the transfer, loan disbursement is handled by Chinae Savings Bank and Group Financial Companies specialize in purchase and collection of non-performing loan (NPL). Through this move, we have established the infrastructure to provide comprehensive financial services in South Korea and now aim at generating the maximum synergy through an organic growth of each business entity. In September 2014, ADORES, Inc. (hereinafter, “ADORES”) subscribed to the third party allotment by JB Amusement Co., Ltd. (currently Majesta Co., Ltd., listed on KOSDAQ) and agreed to establish the partnership with JB Amusement. We will promote collaboration through provision of know-how regarding casino business etc., generate synergy by leveraging both party’s strength and expand added value and business in the Group’s amusement business. We will establish a network of Group companies, partners and their offices, accumulate strength of each company in financial, real estate and amusement area, provide services with higher value-added all over Asia so that we can contribute to the further development of Asian economy. (iii) Domestic business development In January 2015, we conducted following organizational restructuring of credit card business. KC Card Co., Ltd. (hereinafter, “KC Card”) transferred “KC Card” brand, changed its trade name to J TRUST Card Co., Ltd. (hereinafter, “J TRUST Card”) and assumed a part of business of NUCS Co., Ltd. (hereinafter, “NUCS”). We will endeavor to expand credit card business through the expansion and reinforcement of our client base focusing on newly created “J TRUST Card” brand. In November 2014, ADORES acquired all shares of Japan Care Welfare Group Co., Ltd. (hereinafter, “JC-Group”) and the Group started elderly care business. Going forward, the Group plans to develop business proactively through measures as follows: capitalizing on JC-Group’s know-how in care and welfare business and its relationship with users, families and local communities; conversion of care facilities to the ones which conform to administrative demand; and startup of new service which meets diversified demands. Operating revenue for the current consolidated fiscal year was 63,281 million yen (up 2.2% year on year). Installment payment paying for commission decreased due to the transfer of “KC Card” brand and decline in installment payment balance mainly in cash advances and sales on amusement business decreased owing to the consumption tax hike etc. Regarding business in South Korea, banking business revenue increased as a result of Chinae Savings Bank’s assumption of Group Financial Companies’ loan business. Interest on loans at TA Asset Management and HICAPITAL whose statements of income were not included in the scope of consolidation during the previous consolidated fiscal year contributed during the first quarter. Moreover, operating revenue at JC-Group which was newly included in the scope of consolidation during the current consolidate fiscal year increased. We recorded operating losses of 5,217 million yen (from operating income of 13,745 million yen in the previous consolidated fiscal year) due to expenses related to the establishment of infrastructure to provide comprehensive financial services in South Korea as follows: increase in provision of allowance for doubtful accounts owing to significant increase in loans receivable by making TA Asset Management and HICAPITAL subsidiaries and Chinae Savings Bank’s assumption of loans receivable from JT Capital and recording of provision and disposal of NPL; increase in operating expenses at Chinae Savings Bank during the 1st quarter when Chinae Savings Bank recorded loss on sales of loans receivable in consideration of the efficient use of Group’s funding and future restructuring of business in South Korea. As for ordinary income, we recorded ordinary losses of 2,385 million yen (from ordinary income of


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13,351 million yen in the previous consolidated fiscal year) despite the contribution from foreign exchange gains. We posted net income of 10,143 million yen (down 9.0%). Nihon Hoshou Co., Ltd. (hereinafter, “Nihon Hoshou”) posted business structure improvement expenses due to the implementation of an elective retirement plan. On the other hand, gain on bargain purchase in relation to the acquisition of shares of JT Savings Bank and JT Capital was recorded under extraordinary income. Segment performance is as follows: (i) Financial business (Credit guarantee services) Credit guarantee services are handled by Nihon Hoshou, CREDIA Co., Ltd. (hereinafter, “CREDIA”) and KC Card. The expansion of credit guarantee business is our medium-to-long-term management strategy and the Group has partnership with five regional financial institutions as of end April 2015. We are also aiming at increasing credit guarantee balance through provision of new services. From April 2014, we started to provide guarantees for rental housing loans and from February 2015, we have been providing guarantees for syndicated rental housing loans with Flat 35 in partnership with a major housing manufacturer and a Flat 35 loan agency. Since part of credit guarantee business was transferred along with “KC Card” brand in January 2015, the number of partnered financial institutions decreased by six and credit guarantee balance also experienced notable decline. However, we remain committed to our strategy of promoting credit guarantee business and we will combine our credit know-how in the financial business with the brand power of partnered financial institutions to better address the diversified needs of customers. At the same time, the Group will seek to secure stable revenue and expand its credit guarantee business by increasing the number of partnered financial institutions. As a result, the total year-end credit guarantee balance was 36,712 million yen (down 10.1% year on year). This included 13,890 million yen in credit guarantees on unsecured loans (down 33.9%) and 22,821 million yen in credit guarantees on secured loans (up 15.1%). (Purchase of accounts receivable) Purchase of accounts receivable in Japan is handled by Nihon Hoshou, Partir Servicer Co., Ltd. (hereinafter, “Partir Servicer”), United Partir, United Partir One and United Partir KC. They have been proactively purchasing new receivables and the year-end balance of purchased receivables was 3,906 million yen (up 54.5% year on year). Partir KC was sold and excluded from the scope of consolidation. (Credit and consumer credit services) Credit and consumer credit services are mainly handled by J TRUST Card (including KC Card) and NUCS. We provide a variety of services and products which utilize credit card’s settlement function to increase number of credit card holders and spending per customer and to secure profit such as fees from purchase transaction, cash advances and loans etc. However, the loan balance decreased significantly due to the transfer of “KC Card” brand and progress in collection in cash advances. As a result, the year-end balance of advances paid-installment, including long-term operating loans receivable, was 1,422 million yen (down 96.5% year on year). This amount included 1,395 million yen in advances paid-installment (down 96.5%) and 27 million yen in long-term operating loans receivable (down 97.4%). (Business loan services) Business loan services in Japan are mainly handled by Nihon Hoshou. The balance of commercial notes, which was once on decline, remains at the similar level due to aggressive efforts on the back of growth in the volume of commercial notes handled by partnered financial institutions. Accounts receivable - operating loans decreased owing to smooth loan collections such as full repayment of property-based loans by major borrowers while receivable-based loans increased. As a result, the year-end balance of business loans, including long-term operating loans


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receivable, was 4,362 million yen (down 5.7% year on year). This amount included 2,355 million yen in commercial notes (down 0.6%), 1,904 million yen in accounts receivable - operating loans (down 13.5%) and 101 million yen in long-term operating loans receivable (up 86.7%). (Consumer services) The Group plans to focus on credit guarantee business. Although consumer services are handled by Nihon Hoshou and CREDIA, they no longer disburse new loans. The balance of consumer loans declined year on year due to smooth loan collections, especially loans assumed from the consumer finance business of Takefuji Corporation (currently TFK Co., Ltd.) by Nihon Hoshou. The year-end balance of consumer loans, including long-term operating loans receivable, was 5,985 million yen (down 25.0% year on year). This amount included 5,222 million yen in accounts receivable - operating loans (down 22.4%) and 762 million yen in long-term operating loans receivable (down 38.6%). Operating revenue in the financial business was 18,790 million yen (down 25.7% year on year) and segment income was 1,852 million yen (down 83.8%) due to rise in selling, general and administrative expenses caused by increase in provision for loss on interest repayment at KC Card in credit and consumer credit services. (ii) Real estate business Keynote Co., Ltd. (hereinafter, “Keynote”), mainly handling sales and brokerage of ready-build residential houses, achieved favorable business results. Keynote steadily increased number of houses sold even when the market sentiment was weak and the completion and delivery of properties was carried over from the previous fiscal year due to the rise in demand prior to the consumption tax increase. As for property asset business, gain on sales of properties in metropolitan area made huge contribution to revenue at ADORES and stable rental income from other properties also supported the revenue. On the other hand, income decreased due to market conditions. Operating revenue in the real estate business was 5,822 million yen (up 17.0% year on year) and segment income was 402 million yen (down 18.9%). (iii) Amusement business BREAK Co., Ltd. (hereinafter, “BREAK”) manufactures and sells amusement machine toys and ADORES operates amusement facilities. Regarding the operation of amusement facilities, various events and sales promotion activities focusing on medal game were carried out. As a part of sales promotion and branding activity which has been our focus since the previous fiscal year, many collaborative projects between facilities superior in information dissemination and character contents were also conducted. We opened “Anime Plaza Ikebukuro”, a café operated in collaboration with various character contents, as a new business to attract new customers. Although these efforts helped support spending per customer and number of customers, it was not enough to offset the slowdown in personal consumption due to the increase in consumption tax. As a result, both sales and income were weak. As for the manufacturing and sales of amusement machine toys, manufacturing and sales of original prize and miscellaneous goods which were firm early in the current fiscal year experienced some headwinds. Supported by sales of other prizes with popular characters, overall sales were strong. Since we had some difficulties with the stock up of original goods with high profitability, income was weak. As a result, operating revenue in the amusement business was 15,087 million yen (down 9.1% year on year) and segment income was 483 million yen (down 49.2%). (iv) International business In Southeast Asia, JTA conducts investment business and management and support business for invested companies in Singapore. Bank Mutiara is engaged in banking business in Indonesia. JTA concluded an agreement to underwrite convertible bond issued by Group Lease PCL, listed on the Stock Exchange of Thailand in March 2015. JTA intends to expand its business in fast-growing


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Southeast Asia and develop business so that the Group can maximize the synergy generated from the establishment of its business network. Regarding Bank Mutiara, only balance sheet was included in the scope of consolidation during the current consolidated fiscal year. In South Korea, Chinae Savings Bank and JT Savings Bank operate savings bank business, TA Asset Management, Neoline Credit and HICAPITAL mainly handle purchase and collection of NPL and JT Capital is engaged in installment loan and leasing business. Regarding JT Capital, only balance sheet was included in the scope of consolidation during the current consolidated fiscal year. Loans by banking business increased considerably because of the transfer of loan business from Group Financial Companies to Chinae Savings Bank in August 2014 in South Korea, the acquisition of JT Savings Bank in January 2015 and the acquisition of Bank Mutiara in Indonesia in November 2014. Accounts receivable - operating loans decreased due to the transfer of loan business to Chinae Savings Bank while it increased because of the acquisition of JT Capital in March 2015. The year-end balance of loans by banking business was 224,401 million yen (up 380.5% year on year) and the year-end balance of accounts receivable - operating loans including long-term operating loans receivable was 59,701 million yen (up 42.4%). This amount included 58,188 million yen (up 44.4%) in accounts receivable - operating loans and 1,513 million yen (down 6.4%) in long-term operating loans receivable. Purchase of NPL resulted in the balance of 4,741 million yen (from zero at the end of previous fiscal year) in purchased receivables. Operating revenue in the international business totaled 19,857 million yen (up 50.3%). Segment loss was 5,811 million yen (from a segment income of 3,046 million yen in the previous fiscal year) due to temporary factors such as recording of loss on sales of accounts receivable and increase in provision of allowance for doubtful accounts at Chinae Savings Bank. International business, especially business in South Korea continued to experience loss owing to increase in expenses while we focused on the establishment of infrastructure for future profit generation during the current consolidated fiscal year. Finally the infrastructure to provide comprehensive financial services is established and we can make a steady progress towards generating profit. (v) Other business J Trust System Co., Ltd. provides development, operation and management services of computer system for the Group. Keynote handles construction and design business and AI Denshi Co., Ltd. (hereinafter, “AI Denshi”) develops, manufactures and sells computer systems for peripheral equipment of pachinko and slot machines. JC-Group conducts elderly care business. JT Investment Co., Ltd., which conducted investment, management consulting and group management was liquidated and excluded from the scope of consolidation. AAD Co., Ltd., an operator of printing business, was sold and excluded from the scope of consolidation. Operating revenue in other business was 4,561 million yen (up 48.4% year on year) and segment loss was 69 million yen (from a segment income of 70 million yen in the previous fiscal year). (2) Status of capital investment Capital investments made by the Group during the consolidated fiscal year under review totaled 5,600 million yen, consisting of 1,416 million yen in financial business, 1,468 million yen in real estate business, 1,166 million yen in amusement business, 1,493 million yen in international business, 47 million yen in other business, and 8 million yen in overall Group (common). (3) Status of fundraising The balance of fundraising at the end of the consolidated fiscal year under review was 316,910 million yen, consisting of 2,226 million yen from notes discounted, 2,372 million yen from bonds payable, 24,859 million yen from loans payable, and 287,452 million yen from deposits by banking business.


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(4) Operating results and financial position of the Group

Category 36th Business

Year ( from April 1, 2011

to March 31, 2012 )

37th Business Year

( from April 1, 2012 to March 31, 2013 )

38th Business Year


39th Business Year

(Fiscal year under review)


Operating revenue (million yen) 24,508 55,683 61,926 63,281 Ordinary income (loss) (million yen) 5,486 13,704 13,351 (2,385)

Net income (million yen) 34,500 13,309 11,145 10,143 Net income per share (yen) 575.96 214.44 109.66 85.92

Total assets (million yen) 117,546 218,706 334,736 540,718 Net assets (million yen) 49,471 70,895 184,230 194,865 Net assets per share (yen) 798.17 1,013.89 1,502.54 1,591.09

Notes: 1. The Company acquired the shares of KC Card Co., Ltd. (currently J TRUST Card Co., Ltd.) in the

36th business year and recognized gain on bargain purchase arising from the assessment of the shares at market prices under extraordinary income. As a result, the Company’s net income, total assets, and net assets increased. The total assets of the Company also increased through the assumption of the consumer finance business of Takefuji Corporation, a company under the Corporate Rehabilitation Act (currently TFK Co., Ltd.) by an absorption-type corporate split.

2. The Company conducted a 2-for-1 split of its common shares during the 37th business year. The net income per share and net assets per share stated above were calculated as if the stock split had been conducted at the beginning of the 36th business year.

3. Operating revenue increased because the Company made ADORES, Inc. a consolidated subsidiary in the 37th business year. In addition, Chinae Savings Bank Co., Ltd. acquired and assumed portions of the assets and liabilities of Mirae Savings Bank Co., Ltd. and the consumer finance receivables of Solomon Savings Bank Co., Ltd. As a result, the total assets increased.

4. In the 38th business year, total assets and net assets increased due to the exercise of subscription rights to shares granted by a rights offering (non-commitment type/gratis allotment of listed subscription rights to shares), effective May 31, 2013.

5. During the fiscal year under review, provision of allowance for doubtful accounts increased temporarily at Chinae Savings Bank Co., Ltd. when it carried out the proactive disposal of NPL and the Company recorded ordinary loss. The Company proactively implemented M&A and business restructuring in South Korea and Southeast Asia. Also, the Company made JT Savings Bank Co., Ltd., JT Capital Co., Ltd., and PT Bank Mutiara Tbk. consolidated subsidiaries. Due to this, the Company’s total assets increased.

(5) Key issues to be addressed

The Group finds it essential to transform its business ahead of change in global and Japanese economy. It is our major task to expand business especially in Asia which has huge growth potential and conduct business to maximize synergy by capitalizing on its network. Based on the aforementioned understanding, we formulated the Group vision and the medium term business plan to realize the Group vision so that we can achieve reinforcement of management foundation and continuous growth. (i) Targeted management indicators Under the Group vision of “Aim to be a provider of unique financial services not constrained by existing paradigms,” the Group formulated a medium term business plan. FY 2016, from April 1, 2015 till March 31, 2016 will be the first year of the plan. Specific management objectives are as follows: 1) Three-year target: 142.1 billion yen in annual operating revenue, 21.7 billion yen in annual


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operating income and ROE of 10.0%; 2) Income from banking business which is expected to expand continuously in fast-growing Asia

will play a major role; 3) Seek to invest 50 to 100 billion yen in three years in investment deals with IRR at 15% and

higher in growth market; and 4) Position maximization of shareholder value as one of the most important task for management

and implement share buyback flexibly when stock price is deemed undervalued. (ii) Company’s medium-to-long-term management strategies and key issues to be addressed (Financial business in Southeast Asia) We endeavor to lower NPL ratio and improve financial health towards the rehabilitation of Bank Mutiara. Bank Mutiara has been rehabilitating its business under the supervision of Indonesia Deposit Insurance Corporation for a long time. Therefore, Bank Mutiara could not take a proactive approach to increase loans and deposits and balance of loans and deposits per branch stays around half, compared with the competitor average. Moreover, due to its high dependency on major clients, average deposit rate is higher than competitors. Going forward, we intend to provide comprehensive financial services such as various loans including auto loans and mortgage loans, card services and foreign exchange related services targeting at small and medium-sized enterprises and salaried workers whose presence is rapidly growing in Indonesia along with the expansion of economy. To operate comprehensive financial business flexibly and promptly, we will proactively invest in IT infrastructure such as renewal of core banking system. To diversify distribution channel and improve convenience, we will also invest in online and mobile banking for business and individual customers and branchless banking services so that we can expand our client base. At the same time, we will tackle the rehabilitation of Bank Mutiara through following measures: increase loan balance by providing multi-finance companies, mainly auto lease companies, with wholesale financial services and providing individual customers directly with leasing services in collaboration with multi-finance companies; and aim at increasing deposits and loan balance from overseas by providing high value-added financial services, capitalizing on the Group’s network. We plan to change its trade name to PT Bank J Trust Indonesia Tbk., by the end of 2015 and rebuild its brand. (The name change is conditional upon approval by relevant financial authorities.) (Financial business in South Korea) With share acquisitions of JT Savings Bank and JT Capital, the infrastructure to provide comprehensive financial services in South Korea has been established. Through an organic growth of each business entity, we aim at maximizing the synergy. Chinae Savings Bank will raise low cost fund mainly through bank deposits and also focus on business loan. JT Capital will increase the balance of mortgage loan and lease receivable, with an interest rate ranging between 6 and 20%, targeting at customers with good credit history. JT Savings Bank will obtain an installment loan license and focus on mortgage loan and consumer loan. Attempting at improvement of operating efficiency and increase in profit, we plan to transfer high quality asset, consumer loan, mortgage loan and others of JT Capital to Chinae Savings Bank and transfer installment loan related receivable of JT Capital to JT Savings Bank. This move will improve the quality of receivable at both banks and reinforce the financial foundation. Moreover, two banks combined, we will rank 3rd in terms of asset size and 2nd in terms of number of branch offices in South Korea. As a major savings bank group, we will conduct countrywide mass marketing and increase the balance further. (Domestic financial business) In March 2015, Nihon Hoshou implemented the elective early retirement plan to transform itself into the lean structure which supports stable profit generation in medium to long term. Going forward, its main business will be credit guarantee services for rental housing loan and property-based loan and we will also focus on property-based loan. In the servicing business, supported by our strong collection capability, we will try to expand our operations by bidding high


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in a shrinking market. (Domestic non-financial business) In the amusement business, ADORES has been proactively conducting events in collaboration with character contents such as popular anime characters at existing stores. Going forward, we intend to expand our business not only through contents business using existing stores as an intermediary but also by development of original contents. Moreover, we acquired AI Denshi Co., Ltd., which develops, manufactures and sells computer systems for pachinko and slot machine’s peripheral equipment. We aim at the establishment of a comprehensive amusement business encompassing the whole group by utilizing ADORES’ original contents in development of slot machines. In the real estate business, based on our capability in planning and construction of residential housing and commercial facilities of Japanese quality handled by Keynote, we will try to expand the profit opportunities by utilizing the Group’s foundation in Southeast Asia in view of launch of overseas real estate business. As for the elderly care business, we aim at profit expansion in existing business through the establishment of business to train licensed care providers to address labor shortage in the industry in addition to reinforcement of human resources for countrywide day care facilities. In view of future development, we will strengthen our organizational structure by installing a medical doctor as an outside executive of ADORES. At the same time, we intend to provide elderly care services integrating hospitals, large scale nursing facilities and day care facilities.


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(6) Status of major subsidiaries (as of March 31, 2015)

Notes: 1. Figures in parentheses indicate an indirect shareholding ratio. 2. The number of consolidated subsidiaries is 26, including the major subsidiaries above. 3. On November 5, 2014 the Company’s consolidated subsidiary ADORES, Inc. acquired all shares of

Japan Care Welfare Group Co., Ltd., which became a consolidated subsidiary of the Company. 4. On November 20, 2014, the Company acquired 99.00% of the shares of PT Bank Mutiara Tbk. from

the Indonesia Deposit Insurance Corporation and thereby made PT Bank Mutiara Tbk. a consolidated subsidiary. During the fiscal year, the Company injected additional capital into PT Bank Mutiara Tbk., increasing its shareholding ratio of PT Bank Mutiara Tbk. to 99.04%.

5. On December 19, 2014, the Company transferred all of its shares of AAD Co., Ltd. and that company ceased to be a consolidated subsidiary of the Company.

Name of subsidiary Capital stock or investments in capital

Shareholding ratio Principal business

Nihon Hoshou Co., Ltd. 95 million yen 100% Financial services; credit guarantee; consumer credit

J TRUST Card Co., Ltd. 3,055 million yen 99.66% Financial services; credit guarantee; consumer credit; credit card

Partir Servicer Co., Ltd. 500 million yen 100% Management and collection of accounts receivables

CREDIA Co., Ltd. 100 million yen 100% Financial services

NUCS Co., Ltd. 90 million yen 100% Purchase, management and collection of receivables

ADORES, Inc. 4,405 million yen 42.91% Amusement; real estate

BREAK Co., Ltd. 75 million yen (42.91%) Amusement

Keynote Co., Ltd. 30 million yen (42.91%) Real estate Japan Care Welfare Group Co., Ltd. 35 million yen (42.91%) Elderly care

J Trust System Co., Ltd. 80 million yen 100% Operation of computer and system development

Chinae Savings Bank Co., Ltd. KRW 68,900 million (99.66%) Savings bank

JT Savings Bank Co., Ltd. KRW 99,984 million 100% Savings bank

Neoline Credit Co., Ltd. KRW 13,000 million 100% Purchase, management and collection of receivables

KJI Consumer Finance LLC KRW 8,750 million 100% Purchase, management and collection of receivables

HlCAPITAL Co., Ltd. KRW 16,400 million 100% Purchase, management and collection of receivables

JT Capital Co., Ltd. KRW 108,000 million 100% Financial services

PT Bank Mutiara Tbk. IDR 10,823,154 million 99.04% Banking

JTRUST ASIA PTE. LTD. SGD 200 million 100% Investment


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6. On January 5, 2015, the trade name of KC Card Co., Ltd. was changed to J TRUST Card Co., Ltd. 7. On January 19, 2015, the Company acquired all shares of Standard Chartered Savings Bank Korea

Co., Ltd. from Standard Chartered Korea Limited and thereby made Standard Chartered Savings Bank Korea Co., Ltd. a consolidated subsidiary. At the same time, the trade name of Standard Chartered Savings Bank Korea Co., Ltd. was changed to JT Savings Bank Co., Ltd.

8. On March 30, 2015, the Company acquired all shares of Standard Chartered Capital (Korea) Co., Ltd. from Standard Chartered Korea Limited, and thereby made Standard Chartered Capital (Korea) Co., Ltd. a consolidated subsidiary. At the same time, the trade name of Standard Chartered Capital (Korea) Co., Ltd. was changed to JT Capital Co., Ltd.


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(7) Principal business (as of March 31, 2015)

Segment Main business

Financial business

Credit guarantee Credit card and consumer credit Purchase, management and collection of receivables Loans to businesses and consumers

Real estate business Buying and selling of real estate, renovation of existing homes, brokerage of real estate

Amusement business Sales of amusement machine toys and operation of amusement facilities

International business

South Korea

Savings bank business Purchase and collection of receivables from financial institutions, etc. Other financial services

Southeast Asia Banking business Investment business based in Singapore

Other business Design and construction of commercial facilities System development, computer operation and management Elderly care business


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(8) Main offices (as of March 31, 2015) (J Trust Co., Ltd.)

Headquarters 1-7-12 Toranomon, Minato-ku, Tokyo Osaka Branch 2-8-8 Higashinodamachi, Miyakojima-ku, Osaka-shi

(Major subsidiaries) Nihon Hoshou Co., Ltd. Minato-ku, Tokyo

J TRUST Card Co., Ltd. Miyazaki-shi, Miyazaki-ken Partir Servicer Co., Ltd. Minato-ku, Tokyo CREDIA Co., Ltd. Shizuoka-shi, Shizuoka-ken NUCS Co., Ltd. Miyazaki-shi, Miyazaki-ken ADORES, Inc. Minato-ku, Tokyo BREAK Co., Ltd. Minato-ku, Tokyo Keynote Co., Ltd. Meguro-ku, Tokyo Japan Care Welfare Group Co., Ltd. Minato-ku, Tokyo J Trust System Co., Ltd. Minato-ku, Tokyo Chinae Savings Bank Co., Ltd. Seoul Special City, South Korea JT Savings Bank Co., Ltd. Bundang-gu, Seongnam, South Korea Neoline Credit Co., Ltd. Seoul Special City, South Korea KJI Consumer Finance LLC Seoul Special City, South Korea HICAPITAL Co., Ltd. Seoul Special City, South Korea JT Capital Co., Ltd. Seoul Special City, South Korea PT Bank Mutiara Tbk. Jakarta, Republic of Indonesia JTRUST ASIA PTE. LTD. Republic of Singapore


－ 15 －

(9) Status of employees (as of March 31, 2015)

Category Number of employees

Financial business 696 (35) Real estate business 39 (2) Amusement business 222 (632) International business 2,485 (108) Other business 480 (72) Corporate (common) 64 (1)

Total 3,986 (850) Notes: 1. The number of employees represents the number of persons employed regularly within the Group

(i.e., excluding those seconded from the Group to outside the Group and including those seconded from outside the Group to the Group), and the average number of temporary employees (part-time workers and workers from staffing firms) is shown in parentheses.

2. The number of employees increased by 1,664 from the end of the previous consolidated fiscal year, mainly due to an increase in number of consolidated subsidiaries.

3. The number of employees stated in corporate (common) represents the number of persons belonging to administrative departments.

(10) Major lenders (as of March 31, 2015)

Lender Balance of loans payable

The Osaka Kosei Shinkin Bank 5,005 million yen The Tokyo Star Bank, Limited 4,870 million yen Kinki Sangyo Credit Union 1,672 million yen The Sawayaka Shinkin Bank 1,269 million yen Seikyo Credit Union 1,110 million yen


－ 16 －

(11) Other significant matters regarding the current status of the Group Litigation CREDIA Co., Ltd.(hereinafter, CREDIA), a consolidated subsidiary of the Company, made loans in the amount of 8.0 billion yen to SF Corporation Co., Ltd. (hereinafter, “SF Corp”) on February 19, 2010. CREDIA was repaid 5,462,671,224 yen by June 30, 2011 (hereinafter, “Repayments”). CREDIA accepted collateral in the form of assignment of accounts receivables (hereinafter, "Collateral") from SF Corp. However, Ginjiro Suzuki, bankruptcy trustee for SF Corporation Co., Ltd.(hereinafter, “Plaintiff of the first instance”) argued that CREDIA was a parent company of SF Corporation for the period from March 23, 2010 till August 20, 2010 and the insolvency of SF Corp. resulted from the bad faith of CREDIA. Accordingly Plaintiff of the first instance denied the repayments and pledge of collateral and filed the lawsuit to seek as compensation of 5,464,671,224 yen (comprising an amount equal to the Repayments and 2,000,000 yen for the decline of the value of assigned accounts receivables) plus annual interest accruing at 6%. On December 16, 2013, first instance judgment was given by Tokyo District Court. Though CREDIA dissatisfied with the ruling of the first instance and appealed to Tokyo High Court on December 27, 2013 and pleaded that CREDIA’s claim was legitimate, CREDIA judged that the early resolution through the judicial settlement (hereinafter, “Settlement”) is the best measure taking the development of the lawsuit and increase in litigation cost in case CREDIA continues the litigation etc. into consideration in a comprehensive way. Settlement of the said lawsuit has been reached on November 26, 2014. Through settlement, CREDIA paid 2,850 million yen to Plaintiff of the first instance.


－ 17 －

2. Matters regarding the shares of the Company (as of March 31, 2015) (1) Number of authorized shares 240,000,000 (2) Number of outstanding shares 118,589,354(3) Number of shareholders 18,609(4) Major shareholders (top 10 shareholders)

Name of shareholder Number of shares owned Shareholding ratio

Nobuyoshi Fujisawa 23,009,372 19.47% Taiyo Fund, L.P. 10,308,900 8.72% NLHD Co., Ltd. 7,439,000 6.29% FUJISAWA PTE. LTD. 6,954,372 5.88% Japan Trustee Services Bank, Ltd. (trust account) 3,961,800 3.35%

The Master Trust Bank of Japan, Ltd. (trust account) 3,095,800 2.62%

THE SAIKYO BANK, LTD. 2,890,000 2.45% The Resolution and Collection Corporation (Resolution and Collection Bank Account) 2,640,000 2.23%

STATE STREET BANK AND TRUST COMPANY 505019 2,576,600 2.18%

TAIYO HANEI FUND, L.P. 2,533,400 2.14% Notes: 1. Shareholding ratio is calculated excluding the number of treasury shares (409,540 shares). 2. FUJISAWA PTE. LTD. is wholly owned by Mr. Nobuyoshi Fujisawa, President & CEO of the

Company. NLHD Co., Ltd. is wholly owned jointly by Mr. Fujisawa and FUJISAWA PTE. LTD. 3. The Company received a copy of the Change Report (the Change Report pertaining to Report of

Possession of Large Volume) dated February 16, 2015 sent by Taiyo Fund Management Co. LLC and its joint holders to notify that it owned 16,698,700 shares (shareholding ratio of 14.09%) as of February 6, 2015, but the Company did not include them in the major shareholders above as the Company could not confirm the number of shares owned by them as of the end of the consolidated fiscal year under review.


－ 18 －

(5) Other significant matters regarding the shares of the Company (1) The total number of outstanding shares increased by 203,520 shares due to the exercise of the

subscription rights to shares (stock options). (2) At the Board of Directors’ meeting on May 14, 2015, the Company passed a resolution in

relation to matters concerning acquisition of its own shares pursuant to Article 156, applied with a replacement of terms pursuant to the provisions of the Article 165, Paragraph 3 of the Companies Act.

The outline is as follows: (i) Reason for acquisition of own shares

The Company will acquire its own shares to return profit to shareholders through the improvement in its capital efficiency and to enable the flexible implementation of capital policy in response to the change in the operating environment.

(ii) Details of acquisition of own shares Class of shares Common Shares Total number of shares that can be acquired

Up to 6,250,000 (Equivalent to 5.29% of the total number of outstanding shares excluding treasury shares)

Total share acquisition amount Up to 7,500 million yen (note) Share acquisition period From May 26, 2015 to March 31, 2016

Note: Pursuant to the Article 461 of Companies Act, the aggregate amount of acquisition of its own shares cannot exceed the amount available for distribution (distributable amount). Distributable amount is calculated based on the balance sheet as of the latest fiscal year end. The Company’s distributable amount is approximately 9 billion yen as of March 31, 2015. By subtracting 1.5 billion yen, the dividends the Company plans to pay in the fiscal year ending March 2016, from 9 billion yen, the maximum total share acquisition amount is 7.5 billion yen. (Reference) Number of treasury shares as of March 31, 2015

Total number of outstanding shares excluding treasury shares

118,179,814 shares

Number of treasury shares 409,540 shares


－ 19 －

3. Matters regarding subscription rights to shares of the Company, etc. (1) Status of subscription rights to shares, etc. at the end of each business year

J Trust 1st subscription

rights to shares (stock option)

issued on November 27,

2009

J Trust 2nd subscription


issued on November 29,

2010

J Trust 3rd subscription


issued on August 31, 2011

J Trust 5th subscription


issued on August 31, 2013

Number of subscription

rights to shares

6 units 257 units 1,293 units 1,870 units

Class and number of

shares underlying

subscription rights to shares

12,000 common shares

(2,000 shares per subscription right to shares)


(200 shares per subscription

right to shares)

258,600 common shares (200 shares per

subscription right to shares)

187,000 common shares (100 shares per

subscription right to shares)

Amount to be paid in for

each subscription

right to shares

Gratis Gratis Gratis Gratis

Exercise price

172,000 yen per unit

22,000 yen per unit

26,800 yen per unit

200,700 yen per unit

Exercise period

from December 1, 2011

to July 31, 2016


to July 31, 2017

from September 1, 2013

to July 31, 2018

from September 1, 2015

to August 31, 2020

Conditions for exercise Notes 1 & 2 Notes 1 & 2 Notes 1 & 2 Notes 1 & 2


－ 20 －

Notes: 1. The acquisition of subscription rights to shares (stock options) by transfer shall require an approval

by a resolution at the Board of Directors' Meeting of the Company. 2. In the case that an owner of subscription rights to shares (stock options) waives the offered

subscription rights to shares (stock options), he/she shall not be able to exercise such offered subscription rights to shares (stock options).

3. As a result of a share exchange with Next Japan Holdings Co., Ltd. effective April 30, 2012, the Company took over the subscription rights to shares (stock options) issued by Next Japan Holdings Co., Ltd. in the form of J Trust N-6th, N-7th, N-8th, N-9th and N-10th subscription rights to shares (stock options).

4. As a result of a stock split dated June 1, 2012, whereby each share was divided into 2 shares, the Company adjusted the exercise price of subscription rights to shares (stock options).

5. Upon issuance of new shares resulting from the exercise of subscription rights to shares (rights offering, non-commitment/gratis allotment of listed subscription rights) with the exercise period between July 5, 2013 and July 30, 2013, the Company adjusted the exercise price of subscription rights to shares (stock options) with the reference date of August 12, 2013, excluding J Trust 5th subscription rights to shares (stock options).

J Trust N-6th subscription

rights to shares (Stock option) issued on April

30, 2012



30, 2012



30, 2012



30, 2012



30, 2012 Number of


170 units 170 units 2,320 units 3,400 units 3,450 units

Class and number of

shares underlying


680 common shares


right to shares)

680 common shares


right to shares)

9,280 common shares


right to shares)



right to shares)



right to shares)

Amount to be paid in for

each subscription

right to shares

Gratis Gratis Gratis Gratis Gratis

Exercise price 512 yen per unit 1,392 yen per

unit 1,552 yen per

unit 3,016 yen per

unit 1,092 yen per

unit

Exercise period

from April 30, 2012

to March 10, 2019

from April 30, 2012

to April 28, 2019

from April 30, 2012

to December 15, 2019





Conditions for exercise Notes 1 & 2 Notes 1 & 2 Notes 1 & 2 Notes 1 & 2 Notes 1 & 2


－ 21 －

(2) Subscription rights to shares held by Directors of the Company at the end of the business year under review

Name of subscription rights to shares Number of units

Number of holders

Directors (excluding outside directors)

J Trust 3rd subscription rights to shares (stock option) 70 1

J Trust 5th subscription rights to shares (stock option) 1,030 4

(3) Subscription rights to shares granted to employees, etc. of the Company as the compensation for their execution of duties during the business year under review Not applicable.


－ 22 －

4. Matters regarding executives (1) Directors and Audit & Supervisory Board Members at the end of the business year under review

Name Position and assignment Significant concurrent positions

Nobuyoshi Fujisawa President & CEO

Chairman of ADORES, Inc. Managing Director & CEO of JTRUST ASIA PTE. LTD. Director & Chairman of JT Capital Co., Ltd. Outside Director of Japan Care Welfare Group Co., Ltd.

Nobiru Adachi

Representative Director and Senior Managing Director in charge of Corporate Management Dept.

President Commissioner of PT Bank Mutiara Tbk. Director of JT Savings Bank Co., Ltd.

Makoto Miyoshi

Director in charge of Corporate Strategy Dept., and Public Relations & Investor Relations Dept.

Representative Director & President of Japan Care Welfare Group Co., Ltd.

Taiji Hitachi

Director, General Manager of General Accounting & Finance Dept.

Director of J TRUST Card Co., Ltd.

Nobuiku Chiba Director

Director of Chinae Savings Bank Co., Ltd. Representative Director & Vice President of JT Capital Co., Ltd. President & CEO of J TRUST Card Co., Ltd.

Norio Igarashi Director Visiting Attorney of Yamada Ozaki Law Office

Ryuji Mizuta Director Advisor of Sumitomo Life Insurance Company

Kazuharu Anno Director Member of Kudamatsu City Council

Masao Onishi Full-Time Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member of Nihon Hoshou Co., Ltd. Audit & Supervisory Board Member of NUCS Co., Ltd. Audit & Supervisory Board Member of J TRUST Card Co., Ltd.

Hideki Yamane Full-Time Audit & Supervisory Board Member

Audit & Supervisory Board Member of Partir Servicer Co., Ltd.

Masato Inoue Audit & Supervisory Board Member Representative of Inoue Office

Kinya Naito Audit & Supervisory Board Member

Attorney of Mizuho Partners Law Office Auditor of National University Corporation Osaka University


－ 23 －

Notes: 1. Three Directors, Messrs. Norio Igarashi, Ryuji Mizuta and Kazuharu Anno are Outside Directors.

The Company designated Messrs. Norio Igarashi, Ryuji Mizuta and Kazuharu Anno as independent officers as provided in the regulations of the Tokyo Stock Exchange, Inc. and notified the exchange to that effect.

2. Audit & Supervisory Board Members, Messrs. Hideki Yamane and Kinya Naito are Outside Audit & Supervisory Board Members.

3. President & CEO, Mr. Nobuyoshi Fujisawa resigned from Outside Director of Japan Care Welfare Group Co., Ltd. on April 1, 2015.

4. Representative Director and Senior Managing Director, Mr. Nobiru Adachi resigned from Director of JT Savings Bank Co., Ltd. on April 1, 2015.

5. President & CEO, Mr. Nobuyoshi Fujisawa was appointed to President Commissioner of PT JTRUST INVESTMENTS INDONESIA on May 7, 2015.

(2) Changes in position and assignment of Directors during the business year under review

Name New position and assignment Old position and assignment Transfer date

Nobiru Adachi

Representative Director and Senior Managing Director in charge of Corporate Management Dept.

Managing Director June 26, 2014

Makoto Miyoshi

Director in charge of Corporate Strategy Dept. and Public Relations & Investor Relations Dept.

Director in charge of Corporate Strategy Dept., Treasury Dept., and Public Relations and Investor Relations Dept.

June 26, 2014

Taiji Hitachi Director & General Manager of General Accounting & Finance Dept.

Director & General Manager of Accounting & Planning Dept.

June 26, 2014

Norio Igarashi Outside Director (new) - June 26, 2014

Ryuji Mizuta Outside Director (new) - June 26, 2014

Kazuharu Anno Outside Director (new) - June 26, 2014

Kazunori Kuroda Resigned Director in charge of Internal Control & Risk Management Dept., and Legal Dept.

June 26, 2014

Teruhiko Miwa Resigned Director, General Manager of Corporate Management Dept.

June 26, 2014

Norio Uemura Resigned Director June 26, 2014

Satoshi Ando Resigned Director June 26, 2014

Noriyuki Nishi Resigned Outside Director June 26, 2014


－ 24 －

(3) Changes in position and assignment of Directors and Audit & Supervisory Board Members on or after April 1, 2015 Not applicable. (4) Remuneration of Directors and Audit & Supervisory Board Members Category Number (persons) Total amount of remuneration Directors 13 172 million yen (Outside Directors) (4) (14 million yen) Audit & Supervisory Board Members 4 30 million yen (Outside Audit & Supervisory Board Members) (2) (17 million yen) Total 17 203 million yen

Notes: 1. Amount of remuneration of directors does not include remuneration as employees (with regard to

directors who concurrently serve as employees). 2. The amount of remuneration includes the expenses for the allotment of subscription rights to shares

as stock option which is recorded for the business year under review as follows; 51 million yen for nine directors including 1 million yen for one outside director

3. Amount of remuneration of 13 directors includes remuneration of five directors who ended tenure upon the completion of the Ordinary General Meeting of Shareholders on June 26, 2014.


－ 25 －

(5) Matters regarding outside executives (i) Significant concurrent position of outside executives for other entities

Category Name Significant concurrent positions

Director Norio Igarashi Visiting attorney of Yamada Ozaki Law Office

Director Ryuji Mizuta Advisor of Sumitomo Life Insurance Company

Director Kazuharu Anno Member of Kudamatsu City Council Audit & Supervisory Board Member Hideki Yamane Audit & Supervisory Board Member of Partir Servicer

Co., Ltd.

Audit & Supervisory Board Member Kinya Naito

Attorney of Mizuho Partners Law Office Auditor of National University Corporation Osaka University

Notes: 1. Partir Servicer Co., Ltd. is a subsidiary of the Company. 2. The Company has no special relationship with other corporations where they have material

concurrent positions except for Partir Servicer Co., Ltd. (ii) Main activities during the business year under review

Category Name Main activities

Director Norio Igarashi

Mr. Norio Igarashi attended 18 out of 20 Board of Directors’ meetings (attendance rate: 90.0%). He expressed opinions and offered suggestions based on his abundant knowledge and experience as an attorney.

Director Ryuji Mizuta

Mr. Ryuji Mizuta attended 18 out of 20 Board of Directors’ meetings (attendance rate: 90.0%). He expressed opinions and offered suggestions based on his abundant knowledge and work experience at National Police Agency.

Director Kazuharu Anno

Mr. Kazuharu Anno attended 18 out of 20 Board of Directors’ meetings (attendance rate: 90.0%). He expressed opinions and offered suggestions based on his abundant knowledge and experience as an executive at financial institutions.

Audit & Supervisory Board Member

Hideki Yamane

Mr. Hideki Yamane attended 25 out of 26 Board of Directors’ meetings (attendance rate: 96.2%) and 13 out of 14 Audit & Supervisory Board meetings (attendance rate: 92.9%). He expressed opinions and offered suggestions based on his abundant knowledge and experience as an executive at financial institutions.

Audit & Supervisory Board Member

Kinya Naito

Mr. Kinya Naito attended 17 out of 26 Board of Directors’ meetings (attendance rate: 65.4%) and 14 out of 14 Audit & Supervisory Board meetings (attendance rate: 100%). He expressed opinions and offered suggestions based on his abundant knowledge and experience as an attorney.

Note: Descriptions concerning Messer Norio Igarashi, Ryuji Mizuta and Kazuharu Anno relate to their activities since their appointments on June 26, 2014. (iii) Overview of agreement for limitation of liability Under Article 427, Paragraph 1 of Companies Act, the Company has concluded agreements to limit liability for damages of Outside Directors and Outside Audit and Supervisory Board Members (excluding Hideki Yamane who is a Full-Time Audit & Supervisory Board Member) specified in Article 423, Paragraph 1 of Companies Act. Their relevant liabilities for damages under the agreement shall be limited to the minimum liability amount as stipulated by laws and regulations.


－ 26 －

5. Matters regarding Accounting Auditor (1) Name of Accounting Auditor

Hibiki Audit Corporation

Note: Osaka Audit Corporation merged with Shimbashi Audit Corporation and Pegasus Audit Corporation on July 1, 2014 and changed its trade name to Hibiki Audit Corporation. (2) Remuneration etc. for Accounting Auditor Category Amount paid (i) Amount of remuneration, etc., to be paid by the Company to the Accounting Auditor pertaining to the business year under review 44 million yen

(ii) Sum of money and other financial profits to be paid by the Company and its subsidiaries to the Accounting Auditor 74 million yen

Notes: 1. The audit agreement entered into by the Accounting Auditor and the Company does not

distinguish the amount derived from the audit under Companies Act and the one derived from the audit under the Financial Instruments and Exchange Act, and the two amounts cannot be substantially distinguished from each other. Therefore, the amount of remuneration, etc., to be paid by the Company to the Accounting Auditors pertaining to the business year under review indicates the total of these two.

2. ADORES, Inc., a domestic subsidiary of the Company, has been audited by Koa Audit Corporation.

3. Some of the overseas subsidiaries of the Company are audited by firms other than the Accounting Auditor of the Company.

(3) Details of non-audit services The Company does not entrust any services other than the services as defined in Article 2, Paragraph 1 of the Certified Public Accountants Act. (4) Policy for determining the dismissal or non-reappointment of Accounting Auditor

If the Audit & Supervisory Board judges it necessary, for example, in case of any event that may interfere with the execution of duties by the Accounting Auditor, the Audit & Supervisory Board shall request the Board of Directors to submit a proposal for the dismissal or non-reappointment of the Accounting Auditor as an agenda to a General Meeting of Shareholders. If there are grounds for dismissal under the provisions of Article 340, Paragraph 1 of Companies Act, the Audit & Supervisory Board of the Company shall dismiss the Accounting Auditor, subject to approval by all Audit & Supervisory Board Members. In this case, an Audit & Supervisory Board Member selected by the Audit & Supervisory Board shall report such dismissal of the Accounting Auditor and the reason for the dismissal at the first General Meeting of Shareholders after the dismissal. Note: As “Act for Partial Revision of Companies Act” (Act No. 90 of 2014) took effect on May 1, 2015, the Audit & Supervisory Board will decide the dismissal or non-reappointment of accounting auditor, rather than the Board of Directors. The above includes the description of policies for the business year under review.


－ 27 －

6. The Company’s system and policy to implement appropriate and efficient operations Overview of decisions regarding the Company’s system and policy to implement appropriate and efficient operations is as shown below. (latest revision: April 9, 2015) 1． System to ensure that execution of duties by directors and employees of the Company and its

subsidiaries conforms to laws, regulations and the Articles of Incorporation (1) The Company shall stipulate “Code of Ethics,” “Corporate Philosophy” and “Behavioral

Principles” as the basis of management. The Company and its subsidiaries, in accordance with its size and business characteristics, shall reinforce efficiency in business operation, accuracy of information, and compliance system in pursuit of sound business operation. To put these policies into practice, the Company shall strictly adhere to a code of conduct and ethics based on “Compliance Rules,” and others as well as complying with laws, regulations and the Articles of Incorporation. Moreover, directors and employees of the Company and its subsidiaries shall take the initiative in compliance with and spread of these social norms, ethics, laws and regulations, etc. in order to carry out fair and sound corporate activities and attain harmony with society.

(2) The Company shall further reinforce compliance system through “Compliance and Risk

Management Committee” established to oversee, review, and improve the internal compliance system stated above.

(3) The Company shall establish an internal control system regarding financial reporting to ensure

reliability of financial reporting. The Company shall maintain and improve its system through regular assessment of the implementation status.

2．System concerning storage and management of information pertaining to execution of duties by

directors of the Company and system concerning reporting to the Company pertaining to execution of duties by directors and other relevant personnel of its subsidiaries

(1) Based on “Document Management Rules,” legal minutes, minutes of the Management Meetings and other documents pertaining to execution of important duties, together with their appendices, shall be properly stored and managed by the relevant department of the Company as prescribed by internal rules. These documents can be accessed at any time by directors and Audit & Supervisory Board Members of the Company.

(2) Based on “Document Management Rules for Affiliates,” directors and other relevant personnel of the Company’s subsidiaries shall report matters concerning the execution of duties by directors and other relevant personnel of subsidiaries by submitting copies, etc. of legal minutes and other documents. These documents can be accessed at any time by directors and Audit & Supervisory Board Members of the Company.

3．Rules and system pertaining to management of potential loss at the Company and its

subsidiaries Risk management shall be addressed in the following manner.

(1) Based on “Risk Management Rules,” the Company shall prescribe basic policy and structure concerning operational risk management to raise employee awareness toward risks at all times.

(2) Based on the rules stated above, the Company shall establish “Risk Management Manual,” which covers detailed procedure and extract and assess information pertaining to potential risks, so that it can address such risks promptly and practically.

(3) The main task of risk management team is to accurately forecast and organize expected future risks inside and outside of the Company. Led by the risk management team, the Company shall further strengthen risk management structure within each department of the Company and its subsidiaries.

(4) Should any contingencies arise despite above initiatives, the Company shall establish a task


－ 28 －

force with chief risk supervisor as a general manager, to promptly investigate and take countermeasures.

4．System to ensure effective execution of duties by directors of the Company and its subsidiaries (1) The Board of Directors of the Company passes a resolution concerning important

management issues and individual projects at a regular monthly meeting of the Board of Directors and an extraordinary meeting of the Board of Directors that is held as needed. The Board of Directors of subsidiaries also passes resolutions on important management issues and individual projects at a regular meeting of the Board of Directors and an extraordinary meeting of the Board of Directors that is held as needed. Moreover, the Management Meeting is held, attended by executives of the Company and subsidiaries, to track the performance and progress of each department, to examine the execution of duties and to implement appropriate measures.

(2) An online approval system, which can be accessed from outside the Company, expedites the decision-making process. Through this system, requests can be reviewed and approval can be obtained for any issues under consideration, further accelerating the decision-making process and enhancing management efficiency.

(3) With regard to the execution of duties based on decision, director in charge shall give instructions to each person in charge for execution, according to “Organization Rules,” “Policies of Division of Duties” and “Policies of Administrative Authority,” etc. If the issue concerns multiple departments, necessary coordination is made between directors in charge of the departments, to ensure efficient implementation system.

5．System to ensure proper operation as a group constituted by the Company and its subsidiaries (1) As a general rule, employees of the Company shall assume the offices of directors or Audit &

Supervisory Board Members, to oversee if operations at subsidiaries are properly carried out. Also, at subsidiaries, the Company’s Internal Audit Team, Audit & Supervisory Board Members and the Audit & Supervisory Board shall be able to conduct a direct audit and report its results directly to the President & CEO of the Company.

(2) The general accounting & finance team is in charge of management of subsidiaries’ accounting figures and supervises preparation of consolidated financial statements.

(3) At the Management Meeting attended by executives of the Company and its subsidiaries, discussions are made pertaining to execution of duties at subsidiaries and appropriate countermeasures are implemented.

(4) In principle, the Board of Directors is installed for all corporations inside the Group. 6．System to ensure the employee’s independence from directors and effectiveness of instruction

to such employees in case Audit & Supervisory Board Members request the assignment of employee who assists Audit & Supervisory Board Members’ duties

(1) If Audit & Supervisory Board Members find it necessary, an employee shall be appointed as their assistant. In such case, personnel matters such as appointment, transfer, and evaluation of the assistant shall be decided in consideration of opinions by the Audit & Supervisory Board, to ensure its independence and effectiveness of instruction by Audit and Supervisory Board Members.

(2) Assistant who assists Audit & Supervisory Board Members’ duties follows none but their instructions.

7．System to report to Audit & Supervisory Board Members and system to ensure that employees

shall not receive any disadvantageous treatment due to his/her submission of reports (1) Directors and employees of the Company and its subsidiaries (including persons who

received reports from those: hereinafter collectively referred to as "Directors and Employees of the Company and Subsidiaries" in this paragraph) report the status regarding the execution of duties upon request by Audit & Supervisory Board Members of the Company.

(2) Directors and Employees of the Company and Subsidiaries shall immediately report to Audit & Supervisory Board Members of the Company any matters that may cause material harm to


－ 29 －

the Company and its subsidiaries and when they find serious violations by Directors and Employees of the Company and Subsidiaries.

(3) Audit & Supervisory Board Members of the Company may request clarification directly from Directors and Employees of the Company and Subsidiaries as needed.

(4) Audit & Supervisory Board Members of the Company may attend Committee Meetings, etc. at any time for their understanding of the decision-making process and status of execution, in addition to the Board of Directors' meeting and Management Meeting of the Company and its subsidiaries. Audit & Supervisory Board Members of the Company shall endeavor to facilitate mutual understanding on matters such as confirmation of management policy, through regular exchange of views with the President & CEO.

(5) The Company shall ensure prompt reporting to Audit & Supervisory Board Members of the Company with regard to violations of the law and other compliance issues through the proper management of the Group’s internal reporting system or external consultation contact.

(6) A person who submits reports applicable to the (1) and (2) shall not receive any disadvantageous treatment for filing such reports. The Group’s internal reporting system shall stipulate prohibiting any disadvantageous treatment for filing internal report and ensure its proper operation.

8．System concerning settlement of expenses, etc. pertaining to execution of duties by Audit and Supervisory Board Members The Company shall set procedures for the settlement of expenses pertaining to execution of duties by Audit and Supervisory Board Members. If Audit & Supervisory Board Members request for prepayment or repayment, except when deemed unnecessary for execution of their duties, the Company shall accept such requests in accordance with the prescribed procedures. 9．Basic policy on exclusion of criminal elements and its status (1) The Company and its subsidiaries shall steer away from all criminal elements and stand

resolutely against any unreasonable demand by them. (2) If the Company receives unreasonable demand from criminal elements, Corporate

Management Department shall address the issue, and closely work with department heads and external specialist organizations such as the police to handle the issue systematically.

Note: As “Act for Partial Revision of Companies Act” (Act No. 90 of 2014) and “Cabinet Order on Revision of Ordinance for Enforcement of Companies Act” (Ministry of Justice’s Ordinance No. 6 of 2015) took effect on May 1, 2015, the Company partially amended “Basic Policy on Internal Control System” in accordance with the resolution at the meeting of the Board of Directors on April 9, 2015. 7. Policy for deciding the dividends of surplus and other related matters The Company identifies the return of profits to shareholders as one of the most important corporate management tasks. In addition, the Company’s Articles of Incorporation stipulate that the decision of dividends, etc. of surplus shall be resolved by the Board of Directors with the aim of realizing flexible capital and dividend policy in accordance with the provisions of Article 459, Paragraph 1 of Companies Act. The year-end dividend for the business year under review was decided to be 5 yen per share. The payment date will be June 29, 2015. Accordingly, the annual dividend will be 10 yen per share, including the interim dividend. Note: As for fractions less than the respective units in this Business Report, the amounts are rounded down.


－ 30 －

CONSOLIDATED BALANCE SHEET (as of March 31, 2015) (Millions of yen)

Assets Liabilities

Item Amount Item Amount

Current assets 468,260 Current liabilities 322,598

Cash and deposits 141,742 Notes discounted 2,226

Commercial notes 2,355 Current portion of bonds 130

Accounts receivable - operating loans 65,315 Short-term loans payable 7,862

Loans by banking business 224,401 Current portion of long-term loans payable 5,987

Advances paid - installment 1,395

Purchased receivables 8,647 Income taxes payable 1,157

Subrogation receivable 1,124 Deposits by banking business 287,452

Securities 17,874 Provision for loss on interest repayment 1,089

Operational investment securities 6,595 Provision for loss on litigation 200

Merchandise and finished goods 2,688 Provision for loss on business liquidation 905

Work in process 515

Deferred tax assets 2,273 Other 15,587

Other 13,857

Allowance for doubtful accounts (20,525)

Non-current liabilities 23,254

Non-current assets 72,458 Bonds payable 2,241

Property, plant and equipment 9,352 Long-term loans payable 11,009

Buildings and structures 3,729 Provision for loss on interest repayment 5,219

Amusement machine 1,351

Land 3,359 Provision for loss on guarantees 422

Other 911 Net defined benefit liability 414

Provision for loss on litigation 399

Intangible assets 47,102 Other 3,546

Goodwill 41,438 Total liabilities 345,853

Other 5,664 Net assets

Shareholders’ equity 180,062

Investments and other assets 16,002 Capital stock 53,604

Investment securities 3,171 Capital surplus 52,945

Net defined benefit asset 3 Retained earnings 73,709

Long-term operating loans receivable 2,405

Treasury shares (197)

Accumulated other comprehensive income 7,972

Deferred tax assets 2,228

Other 18,287 Valuation difference on available-for-sale securities (42)

Allowance for doubtful accounts (10,092)

Foreign currency translation adjustment 8,005

Remeasurements of defined benefit plans 9

Subscription rights to shares 167

Minority interests 6,663

Total net assets 194,865

Total assets 540,718 Total liabilities and net assets 540,718


－ 31 －

CONSOLIDATED STATEMENT OF INCOME (from April 1, 2014 to March 31, 2015)

(Millions of yen) Item Amount

Operating revenue Discount revenue 188 Interest on loans 4,934 Collection from purchased receivable 3,439 Installment payment paying for commission 4,701 Commission fee 273 Sales on real estate business 5,821 Interest on deposits 239 Other financial revenue 1,051 Sales on amusement business 15,073 Banking business revenue 14,376 Other operating revenue 13,181 63,281

Operating expenses Discount on notes payable expense 63 Interest on loans 1,076 Cost of purchased receivable 843 Cost of sales-real estate 4,919 Cost of sales on amusement business 12,942 Banking business expenses 6,031 Other operating expenses 3,407 29,285 Operating gross profit 33,996

Selling, general and administrative expenses 39,214 Operating loss 5,217

Non-operating income Interest income 19 Dividend income 32 House rent income 139 Foreign exchange gains 2,814 Miscellaneous income 159 3,166

Non-operating expenses Interest expenses 164 Depreciation 18 Investment loss by equity method 117 Miscellaneous loss 33 333 Ordinary loss 2,385

Extraordinary income Gain on sales of non-current assets 12 Gain on sales of investment securities 25 Gain on transfer of business 848 Gain on bargain purchase 14,573 Other 23 15,482

Extraordinary losses Loss on sales of non-current assets 46 Loss on abandonment of non-current assets 115 Impairment loss 782 Provision for loss on litigation 200 Business structure improvement expenses 908 Other 27 2,080 Income before income taxes and minority interests 11,016 Income taxes-current 437 Income taxes-deferred 241 679 Income before minority interests 10,337 Minority interests in income 194 Net income 10,143


－ 32 －

CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS (from April 1, 2014 to March 31, 2015)

(Millions of yen)

Shareholders’ equity

Capital stock Capital surplus Retained earnings Treasury shares

Total shareholders'

equity Balance at beginning of current period 53,578 52,920 64,626 (197) 170,928

Changes of items during the period

Issuance of new shares 25 25 50

Dividends of surplus (1,180) (1,180)

Net income 10,143 10,143 Purchase of treasury shares (0) (0)

Disposal of treasury shares 0 0 0 Change of scope of equity method 120 120

Net changes of items other than shareholders’ equity

Total changes of items during the period 25 25 9,083 (0) 9,133

Balance at end of current period 53,604 52,945 73,709 (197) 180,062

Accumulated other comprehensive income

Subscription rights to shares

Minority interests

Total net assets

Valuation difference

on available- for-sale

securities

Foreign currency

translation adjustment

Remeasurements of defined benefit

plans

Total accumulated

other comprehensive

income

Balance at beginning of current period 3,330 3,032 (27) 6,335 117 6,848 184,230

Changes of items during the period

Issuance of new shares 50

Dividends of surplus (1,180)

Net income 10,143 Purchase of treasury shares (0)

Disposal of treasury shares 0

Change of scope of equity method 120


(3,373) 4,973 36 1,636 49 (184) 1,501

Total changes of items during the period (3,373) 4,973 36 1,636 49 (184) 10,635

Balance at end of current period (42) 8,005 9 7,972 167 6,663 194,865


－ 33 －

NON-CONSOLIDATED BALANCE SHEET (as of March 31, 2015) (Millions of yen)

Assets Liabilities

Item Amount Item Amount

Current assets 34,020 Current liabilities 26,312

Cash and deposits 19,072 Short-term loans payable 19,570 Short-term loans receivable from subsidiaries and associates 14,333 Current portion of long-term loans

payable 6,431

Other 614 Accounts payable-other 138

Income taxes payable 152

Other 20

Non-current assets 111,990 Non-current liabilities 3,645

Property, plant and equipment 58 Long-term loans payable 3,433

Buildings 8 Deferred tax liabilities 38

Land 41 Guarantee deposits received 171

Other 8 Other 1

Intangible assets 582 Total liabilities 29,957

Goodwill 569 Net assets

Other 13 Shareholders’ equity 115,885

Capital stock 53,604

Investments and other assets 111,348 Capital surplus 52,945

Investment securities 0 Legal capital surplus 52,945

Other capital surplus 0

Shares of subsidiaries and associates

99,621

Retained earnings 9,633

Other retained earnings 9,633 Investments in capital of subsidiaries and associates 11,292 Retained earnings brought forward 9,633

Other 450 Treasury shares (297)

Allowance for doubtful accounts (16) Subscription rights to shares 167

Total net assets 116,052

Total assets 146,010 Total liabilities and net assets 146,010


－ 34 －

NON-CONSOLIDATED STATEMENT OF INCOME (from April 1, 2014 to March 31, 2015)

(Millions of yen)

Item Amount

Operating revenue

Interest income 112

Dividend income 3,746

Interest on deposits 33

Other operating revenue 332 4,223

Operating expenses

Interest on loans 447 447

Operating gross profit 3,776

Selling, general and administrative expenses 1,729

Operating income 2,047

Non-operating income

Dividend income 3

Foreign exchange gains 2,712

Miscellaneous income 7 2,723

Non-operating expenses

Miscellaneous loss 0 0

Ordinary income 4,770

Extraordinary income

Gain on sales of non-current assets 3

Gain on sales of investment securities 25

Gain on sales of shares of subsidiaries and associates 98

Gain on reversal of subscription rights to shares 1

Gain on liquidation of subsidiaries and associates 263 391

Extraordinary losses

Loss on sales of non-current assets 2

Loss on abandonment of non-current assets 0 2

Income before income taxes 5,158

Income taxes-current 172

Income taxes-deferred (3) 168

Net income 4,990


－ 35 －

NON-CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

(from April 1, 2014 to March 31, 2015) (Millions of yen)

Shareholders’ equity

Capital stock

Capital surplus Retained earnings

Treasury shares

Total shareholders’

equity Legal capital surplus

Other capital surplus

Total capital surpluses

Other retained earnings Total

retained earnings

Retained earnings brought forward

Balance at beginning of current period

53,578 52,919 0 52,920 5,823 5,823 (297) 112,024

Changes of items during period

Issuance of new shares 25 25 25 50

Dividends of surplus (1,180) (1,180) (1,180) Net income 4,990 4,990 4,990 Purchase of treasury shares (0) (0)

Disposal of treasury shares 0 0 0 0


Total changes of items during period 25 25 0 25 3,810 3,810 (0) 3,860

Balance at end of current period 53,604 52,945 0 52,945 9,633 9,633 (297) 115,885

Subscription rights to shares Total net assets

Balance at beginning of current period 117 112,142

Changes of items during period

Issuance of new shares 50

Dividends of surplus (1,180) Net income 4,990 Purchase of treasury shares (0)

Disposal of treasury shares 0


49 49

Total changes of items during period 49 3,910

Balance at end of current period 167 116,052


－ 36 －

Accounting Auditor’s Report on Consolidated Financial Statements

Independent Auditor’s Report May 22, 2015 J Trust Co., Ltd. The Board of Directors


Representative Partner, Managing

Member

Certified Public Accountant Shozo Ikejiri (Seal)

Representative Partner, Managing Member

Certified Public Accountant

Shuhei Fujimoto (Seal)



Naoya Hayashi (Seal)

Pursuant to Article 444, Paragraph 4 of Companies Act, we have audited the consolidated financial statements, namely, Consolidated Balance Sheet, Consolidated Statement of Income, Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements of J Trust Co., Ltd. (“the Company”) for the fiscal year from April 1, 2014 to March 31, 2015. Management’s responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan. Its responsibility includes the development and operation of internal control system that management determines is necessary to enable the preparation and fair presentation of consolidated financial statements that are free of material misstatement, whether due to fraud or an error. Accounting Auditor’s Responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audit performed from an independent standpoint. We conducted our audit in accordance with the auditing standards generally accepted in Japan. Those standards require that we implement our audit plan and perform the audit based on the plan to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.


－ 37 －

The above represents a translation, for convenience only, of the original report issued in Japanese.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the Accounting Auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or an error. In making those risk assessments, we consider internal control relevant to the preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the accounting policies used, the method of their application and the accounting estimates made by management, as well as the overall presentation of the consolidated financial statements. We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Audit Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group, comprising of the Company and its consolidated subsidiaries, and the results of their operations for the fiscal year under review in conformity with the accounting principles generally accepted in Japan. Matters for Emphasis As described in Notes to Consolidated Financial Statements: "8. Important SubsequentEvents,” the Company passed a resolution in relation to matters concerning acquisition of its own shares at the Board of Directors’ meeting held on May 14, 2015. This matter does not affect our opinion. Conflict of Interest There is no conflict of interest requiring mention as per the Certified Public Accountant Act between the Company, Hibiki Audit Corporation, and managing members.

End


－ 38 －

Accounting Auditor’s Report on Non-Consolidated Financial Statements

INDEPENDENT AUDITOR’S REPORT May 22, 2015 J Trust Co., Ltd. The Board of Directors



Member

Certified Public Accountant Shozo Ikejiri (Seal)


Member


Syuhei Fujimoto (Seal)



Naoya Hayashi (Seal)

Pursuant to Article 436, Paragraph 2, Item 1 of Companies Act, we have audited the non-consolidated financial statements, namely, Non-Consolidated Balance Sheet, Non-Consolidated Statement of Income, Non-Consolidated Statement of Changes in Net Assets and Notes and Schedules to Non-Consolidated Financial Statements of J Trust Co., Ltd. (“the Company”) for the 39th business year from April 1, 2014 to March 31, 2015. Management’s Responsibility for the Non-Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the non-consolidated financial statements and its supporting schedules in accordance with accounting principles generally accepted in Japan. Its responsibility includes the development and operation of internal control system that management determines is necessary to enable the preparation and fair presentation of non-consolidated financial statements and its supporting schedules that are free of material misstatement, whether due to fraud or an error. Auditor’s Responsibility Our responsibility is to express an opinion on the non-consolidated financial statements and its supporting schedules based on our audit performed from an independent standpoint. We conducted our audit in accordance with the auditing standards generally accepted in Japan. Those standards require that we implement our audit plan and perform the audit based on the plan to obtain reasonable assurance about whether the non-consolidated financial statements and its supporting schedules are free of material misstatement.


－ 39 －

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the non-consolidated financial statements and its supporting schedules. The procedures selected depend on the Accounting Auditors’ judgment, including the assessment of the risks of material misstatement of the non-consolidated financial statements and its supporting schedules, whether due to fraud or an error. In making those risk assessments, we consider internal control relevant to the preparation and fair presentation of the non-consolidated financial statements and its supporting schedules in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. An audit also includes evaluating the accounting policies used, the method of their application and the accounting estimates made by management, as well as the overall presentation of the non-consolidated financial statements and its supporting schedules. We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Audit Opinion In our opinion, the non-consolidated financial statements and its supporting schedules referred to above present fairly, in all material respects, the non-consolidated financial position of the Company and results of its operations for the business year under review in conformity with the accounting principles generally accepted in Japan. Matters for Emphasis As described in Notes to Non-Consolidated Financial Statements: "10. Important Subsequent Events,” the Company passed a resolution in relation to matters concerning acquisition of its own shares at the Board of Directors’ meeting held on May 14, 2015. This matter does not affect our opinion. Conflict of Interest There is no conflict of interest requiring mention as per the Certified Public Accountant Act between the Company, Hibiki Audit Corporation, and managing members.

End


－ 40 －

Report by Audit & Supervisory Board

AUDIT REPORT BY AUDIT & SUPERVISORY BOARD With respect to the Directors’ execution of their duties during the 39th business year from April

1, 2014 to March 31, 2015, the Audit & Supervisory Board has prepared this Audit Report after deliberation based on the audit reports prepared by each Audit & Supervisory Board Member. We hereby report as follows: 1.Method and Contents of Audit by the Audit & Supervisory Board Members and Audit & Supervisory Board

In addition to establishing auditing policies and job assignment, and receiving reports from each Audit & Supervisory Board Member on the implementation status and results of the audit, the Audit & Supervisory Board received reports from Directors, etc. and accounting auditors on the execution of their duties and requested further clarification as needed. In compliance with the standards for audit by Audit & Supervisory Board Members established by the Audit & Supervisory Board, pursuant to the auditing policies and job assignment, each Audit & Supervisory Board Member communicated with Directors, internal audit team and other employees in order to collect information, improve the audit environment, and at the same time, attended meetings of the Board of Directors and other important meetings, received reports from Directors and employees, etc. on the execution of their duties, requested further clarification as needed, reviewed documents requesting approval on important matters, and inspected the status of business operations and assets at the headquarters and main offices. In compliance with auditing standard established by Audit & Supervisory Board regarding internal control system, we periodically received reports from Directors and employees, etc. requested clarification as needed and expressed opinions on points as follows; details of the resolutions by the Board of Directors concerning the development of a system to ensure that the execution of duties by Directors comply with laws, regulations and the Articles of Incorporation as described in the Business Report hereto and asystem as defined in Article 100, Paragraphs 1 and 3 of the Regulations for Enforcement of Companies Act to ensure the proper operation as a corporation as well as the status of development and operation of internal system (internal control system) that has been developed based on the resolutions. With regard to the internal control over financial reporting, we received reports on evaluation of the internal control and the status of audit from Directors and Hibiki Audit Corporation and requested further clarification as needed. With respect to the subsidiaries, we endeavored to facilitate a mutual understanding and exchanged information with the directors and Audit & Supervisory Board Members, etc. of subsidiaries, and received reports on their respective business from the subsidiaries including overseas subsidiaries as needed. Based on the above methods, we reviewed the Business Report and its supporting schedules for the fiscal year ended on March 31, 2015. In addition, we monitored and reviewed whether the Accounting Auditors maintained their independent positions and conducted the audit properly, received reports from the Accounting Auditors on the performance of their duties, and requested further clarification as needed. Furthermore, we were informed by the Accounting Auditor that they were establishing a “System to ensure the appropriate execution of duties” (matters as defined in each item of Article 131 of the Company Accounting Regulations) pursuant to “Quality control standards of audit” (October 28, 2005; the Business Accounting Council), and requested their clarificationas needed. Based on the above methods, we examined the non-consolidated financial statements (Non-Consolidated Balance Sheet, Non-Consolidated Statement of Income, Non-Consolidated Statement of Changes in Net Assets and Notes and Schedules to Non-Consolidated Financial Statements) and its supporting schedules, as well as the consolidated financial statements (Consolidated Balance Sheet, Consolidated Statement of Income, Consolidated Statement of Changes in Net Assets and Notes to Consolidated Financial Statements) related to the relevant business year.


－ 41 －

2. Results of Audit

(1) Results of Audit of Business Report and Other Relevant Documents (i) The business report and its supporting schedules of the Company accurately

presents the financial positions of the Company in conformity with applicable laws,regulations and the Articles of Incorporation of the Company.

(ii) No irregularity or violation of applicable laws or regulations or the Articles of Incorporation of the Company was found with respect to the execution of duties by the Directors.

(iii) The contents of the resolutions by the Board of Directors with respect to the internal control system are appropriate. In addition, there are no matters to be pointed out regarding the descriptions included in the business report concerning the internal control system and the execution of duties by Directors.

(2) Results of Audit of Non-Consolidated Financial Statements and its Supporting Schedules In our opinion, the methods and results of audit performed by Hibiki Audit Corporation, the accounting auditor of the Company, are appropriate.

(3) Results of Audit of Consolidated Financial Statements In our opinion, the methods and results of audit performed by Hibiki Audit Corporation, the accounting auditor of the Company, are appropriate.

May 23, 2015

Audit & Supervisory BoardJ Trust Co., Ltd.

Full-Time Audit & Supervisory Board Member Masao Onishi (Seal) Full-Time Outside Audit & Supervisory Board Member Hideki Yamane (Seal) Outside Audit & Supervisory Board Member Kinya Naito (Seal)

(Note) Audit & Supervisory Board Member, Mr. Masato Inoue did not attend Audit & Supervisory Board meeting held on May 23, 2015 since he was under medical treatment. Hence he did not attach his signature and seal to this audit report.

End


－ 42 －

REFERENCE DOCUMENT FOR THE ORDINARY GENERAL MEETING OF SHAREHOLDERS Proposal 1: Election of Eight (8) Directors The terms of office for eight (8) Directors will expire upon conclusion of this Ordinary General Meeting of Shareholders. In this regard, we propose the election of eight (8) Directors (consisting for five (5) reappointed and three (3) newly appointed Directors). The candidates for Director are as follows:

No. Name (Date of birth)

Brief personal profile, position, responsibilities and significant concurrent positions

Number of the

Company’s shares held

1 Nobuyoshi Fujisawa

(January 17, 1970)

Aug 2007 Representative Director & Chairman, Kazaka Servicer Co., Ltd. (currently Partir Servicer Co., Ltd.)

23,009,372

Jun 2008 Representative Director & Chairman, J Trust Co., Ltd.

Director, Mass Work Co., Ltd. (currently Keynote Co., Ltd.)

Oct 2008 President & Representative Director, Next Japan Holdings Co., Ltd. (currently J Trust Co., Ltd.)

Jun 2010 Director, J Trust Co., Ltd. Director, ADORES, Inc. Oct 2010 Director & Supreme Advisor, J Trust Co., Ltd. Representative Director & Chairman, Next Japan

Holdings Co., Ltd. (currently J Trust Co., Ltd.) May 2011 Representative Director & Chairman, ADORES, Inc. Jun 2011 President & CEO, J Trust Co., Ltd. (incumbent) Oct 2013 Managing Director & CEO, JTRUST ASIA PTE. LTD.

(incumbent) Jan 2014 Chairman, Chinae Savings Bank Co., Ltd. May 2014 Chairman, ADORES, Inc. (incumbent) Sep 2014 Director, LCD Global Investments LTD. Nov 2014 Outside Director, Japan Care Welfare Group Co.,

Ltd. Mar 2015 Director & Chairman, JT Capital Co., Ltd.

(incumbent) May 2015 President Commissioner, PT JTRUST

INVESTMENTS INDONESIA (incumbent)


－ 43 －



Number of the


2

Nobuiku Chiba (February 21, 1973)

Jun 2008 Vice President & Director, J Trust Co., Ltd.

317,208

Mar 2009 President & Representative Director, Station Finance Co., Ltd. (currently Nihon Hoshou Co., Ltd.)

May 2009 Director, J Trust System Co., Ltd. Oct 2009 Executive Vice President & Director, J Trust Co., Ltd.

in charge of J Trust Financial Service Co., Ltd. (currently Nihon Hoshou Co., Ltd.)

Jun 2010 President & Representative Director, J Trust Co., Ltd.

Director & Chairman, J Trust Financial Service Co., Ltd. (currently Nihon Hoshou Co, Ltd.)

May 2011 Director, Lopro Corporation (currently Nihon Hoshou Co., Ltd.)

Jun 2011 Vice President & Representative Director, J Trust Co., Ltd.

President & Representative Director, Neoline Credit Co., Ltd.

Aug 2011 Representative Director & Chairman, KC Card Co., Ltd. (currently J TRUST Card Co., Ltd.)

Aug 2012 Director, Chinae Co., Ltd. (currently Chinae Savings Bank Co., Ltd.) (incumbent)

Oct 2012 Director, J Trust Co., Ltd. (incumbent) Director, KC Card Co.,Ltd. (currently J TRUST Card

Co., Ltd.) Jan 2015 President & CEO, J TRUST Card Co., Ltd.

(incumbent) Mar 2015 Representative Director & Vice President, JT Capital

Co., Ltd. (incumbent)


－ 44 －



Number of the


3 Nobiru Adachi (March 21, 1958)

Apr 1980 Joined Ministry of Finance

1,100

Jul 1986 Director, Onomichi Tax Office Jun 1997 Director, Vice Minister of Finance for International

Affairs, Minister’s Secretariat Jun 1999 Budget Examiner, Budget Bureau Jun 2002 Director, Research Division, International Bureau Jun 2004 Director, Policy Research Institute, Ministry of

Finance Jun 2005 Director-General, Hakodate Customs Apr 2006 Officer, Jasdaq Securities Exchange, Inc. Jun 2006 Executive Officer, Jasdaq Securities Exchange, Inc. Oct 2008 Country Head for Japan, ETF Securities Ltd. Oct 2011 Chairman and CEO, M&A Solutions Japan Co., Ltd. Apr 2013 Advisor, J Trust Co., Ltd. Jun 2013 Managing Director, J Trust Co., Ltd. Jun 2014 Representative Director and Senior Managing

Director in charge of Corporate Management Dept. of J Trust Co., Ltd. (incumbent)

Dec 2014 President Commissioner, PT Bank Mutiara Tbk. (incumbent)

Jan 2015 Director, JT Savings Bank Co., Ltd.

* 4

Shigeyoshi Asano

(March 4, 1970)

Apr 1994 Joined Tokyo Gas Co., Ltd.

1,500

Sep 2004 Joined iriver Japan K.K. Apr 2005 Chief Operating Officer, iriver Japan K.K. Apr 2006 President & Chief Executive Officer, iriver Japan Co.,

Ltd. Oct 2006 President, iriver Japan Co., Ltd. (currently Aiuto Co.,

Ltd.) Jul 2009 Corporate Officer, Division Director, Business

Administration Division, Wedge Holdings CO., LTD. Dec 2009 Director, Division Director, Business Administration

Division, Wedge Holdings CO., LTD. Jan 2012 Joined J Trust Co., Ltd. as General Manager of

President’s Office Oct 2013 Director, JTRUST ASIA PTE. LTD. (incumbent) Sep 2014 Executive Director, LCD Global Investments LTD. May 2015 Commissioner, PT JTRUST INVESTMENTS

INDONESIA (incumbent)


－ 45 －



Number of the


* 5

Toru Myochin (April 27, 1965)

Apr 1988 Joined the Dai-Ichi Kangyo Bank, Ltd. (currently Mizuho Financial Group Inc.)

0

Jul 2010 Head of Institutional Business Sub-Group, Shinsei Bank, Limited

Oct 2010 General Manager, Corporate Banking Business Division I

Apr 2012 Executive Officer, General Manager of Corporate Banking Business Division I, General Manager of Healthcare Finance Division

Apr 2013 Managing Executive Officer, Executive Officer in charge of Institutional Business & General Manager, Healthcare Finance Division

Apr 2015 Managing Executive Officer Jun 2015 Advisor, J Trust Co., Ltd. (incumbent)

6 Norio Igarashi (August 30, 1940)

Apr 1966 Joined Tokyo District Public Prosecutors Office as a prosecutor

0

Jan 1991 Chief, Special Investigation Department, Tokyo District Public Prosecutors Office

Jul 1993 Prosecutor, Supreme Public Prosecutors Office Sep 1993 Chief Public Prosecutor, Oita District Public

Prosecutors Office Apr 1995 Prosecutor, Supreme Public Prosecutors Office Jan 1996 Chief Public Prosecutor, Utsunomiya District Public

Prosecutors Office Jun 1997 Chief Public Prosecutor, Chiba District Public

Prosecutors Office Jul 1998 Chief Public Prosecutor, Yokohama District Public

Prosecutors Office May 2000 Notary, Yaesu notary office May 2010 Registered with Dai-ni Tokyo Bar Association as an

attorney Visiting attorney, Yamada Ozaki Law Office

(incumbent) Jun 2014 Outside Director, J Trust Co., Ltd.(incumbent)


－ 46 －



Number of the


7 Ryuji Mizuta (January 7, 1952)

Apr 1974 Joined National Police Agency

0

Jul 1994 Miyazaki Prefectural Police Chief Mar 1996 Director of General Affairs Division, Chugoku

Regional Police Bureau Aug 1996 Chief of Education and Training Division, National

Police Agency Aug 1998 Chief of Gifu Prefectural Police Apr 2000 Head of Public Security Department, Kanto Regional

Police Bureau Aug 2000 Director of Division 1, Public Security Intelligence

Agency Aug 2002 Chief of Shizuoka Prefectural Police Aug 2004 Director of Japan Motorcycle Racing Organization

(currently JKA) Mar 2006 Director-General of Kyushu Regional Police Bureau Jun 2009 Managing Director of Japan Crime Prevention

Association Jul 2012 Advisor of Sumitomo Life Insurance Company

(incumbent) Jun 2014 Outside Director of J Trust Co., Ltd (incumbent)

* 8

Masanori Kaneko

(May 22, 1955)

Apr 1978 Joined Yamaguchi Sogo Bank, Ltd. (currently THE SAIKYO BANK, LTD.)

0

Apr 1995 Manager of Welfare Division and Human Resource Development Division, Human Resource Department, THE SAIKYO BANK, LTD.

Apr 1997 Head of Sakuragi Branch Apr 2000 Head of Kuga Branch Apr 2002 Chief Assistant, Secretary Group, General Affairs

and Human Resource Department Apr 2004 Head of Kudamatsu Branch Apr 2006 Chief Assistant of Internal Control Office Jun 2008 Head of Audit Department Apr 2010 Chief of Audit & Supervisory Board Jun 2011 Full-Time Audit & Supervisory Board Member

(incumbent) Notes 1. No specific conflict of interests exists between the Company and each candidate. 2. An asterisk mark attached to the number of candidate represents a candidate newly appointed

for director. 3. Messrs. Norio Igarashi, Ryuji Mizuta and Masanori Kaneko are candidates for Outside Directors. 4. Special Notes Regarding Candidates for Outside Director (1) Mr. Norio Igarashi has been involved in corporate law as an attorney at law after he held

prominent positions such as Chief of the Special Investigation Department at the Tokyo District Public Prosecutors Office and Prosecutor of the Supreme Public Prosecutors Office. The Company proposes that Mr. Igarashi be elected as Outside Director in the hope that he


－ 47 －

will be able to provide valuable guidance and instruction to the management of the Company, leveraging his abundant experiences and advanced expertise. Though he has had no experience of direct involvement in corporate management, the Company determines that he is the right person to assume the duty of Outside Director of the Company for the reasons above.

Currently, Mr. Norio Igarashi is an Outside Director of the Company and his term of office as Outside Director will be one year at the conclusion of this Ordinary General Meeting of Shareholders.

(2) Mr. Ryuji Mizuta has a wide range of insight and knowledge in crisis management, etc., including the exclusion of antisocial forces as well as wealth of experiences in important positions at the National Police Agency. The Company proposes that Mr. Mizuta be elected as Outside Director in the hope that he will be able to provide valuable guidance and instruction in these respects to the management of the Company. Though he has had no experience of direct involvement in corporate management, the Company determines that he is the right person to assume the duty of Outside Director of the Company for the reasons above. Currently, Mr. Ryuji Mizuta is an Outside Director of the Company and his term of office as Outside Director will be one year at the conclusion of this Ordinary General Meeting of Shareholders

(3) Mr. Masanori Kaneko has a wide range of insight and knowledge as an executive of The SAIKYO BANK LTD. The Company proposes that Mr. Kaneko be elected as Outside Director in the hope that he will be able to provide valuable guidance and instructions to the management of the Company in this regard. Mr. Kaneko will resign from Full-Time Audit & Supervisory Board Member of The SAIKYO BANK LTD. as the term of his office expire on June 25, 2015 and be appointed an advisor of the bank.

(4) The Company has, in accordance with Article 427, Paragraph 1 of Companies Act, concluded the agreement with Messrs. Norio Igarashi and Ryuji Mizuta concerning liability for damages as specified in Article 423, Paragraph 1 of the same act. Their relevant liabilities for damages under the agreement shall be limited to the minimum liability amount as stipulated by laws and regulations. If their reappointments are approved, the Company will maintain the agreement. If the appointment of Mr. Masanori Kaneko is approved, the Company also intends to conclude the similar agreement with him concerning liability for damages.

(5) The Company appointed Mr. Norio Igarashi and Mr. Ryuji Mizuta as independent officers as provided in the regulations of the Tokyo Stock Exchange, Inc. and notified the exchange to that effect. If their reappointments are approved, the Company intends to continuously appoint them as independent officers. Mr. Masanori Kaneko meets the requirements that the Tokyo Stock Exchange defines as an independent officer. If his appointment is approved, the Company intends to designate him as an independent officer and notify the exchange to that effect.


－ 48 －

Proposal 2: Election of One (1) Audit & Supervisory Board Member The term of office for Audit and Supervisory Board Member, Mr. Kinya Naito will expire upon conclusion of this Ordinary General Meeting of Shareholders. In this regard, we propose the election of one (1) Audit and Supervisory Board Member.

For this proposal, the Company has already gained the approval of the Audit & Supervisory Board.

The candidate for Audit & Supervisory Board Member is as follows:

Name

(Date of birth) Brief personal profile, position, responsibilities

and significant concurrent positions

Number of the


Takaaki Kojima

(February 19, 1947)

Apr 1971 Joined Ministry of Foreign Affairs

0

Jul 1984 Chief Budget Examiner in charge of postal affairs, Budget Bureau‚ Ministry of Finance

Jul 1987 Director, International Convention Division, Treaties Bureau, Ministry of Foreign Affairs

Jul 1989 Counsellor, Embassy of Japan in China Jul 1992 Counsellor, Embassy of Japan in the UK Jan 1995 Minister, Embassy of Japan in the UK Apr 1995

Deputy Director General, Minister’s Secretariat and Consular Affairs Department, Ministry of Foreign Affairs

Jul 1997 Deputy Secretary General, Japan Fair Trade Commission

Jul 1999 Consul General of Japan in Sao Paulo, Brazil Jul 2001 Minister, Embassy of Japan in the United States of

America Apr 2002 Director-General, Intelligence and Analysis

Bureau, Ministry of Foreign Affairs Jul 2004 Ambassador Extraordinary and Plenipotentiary of

Japan to Republic of Singapore Sep 2007 Ambassador Extraordinary and Plenipotentiary of

Japan to Australia Jul 2010 Ambassador in charge of International

Counter-Terrorism Cooperation, Ministry of Foreign Affairs

Oct 2011 Visiting Senior Research Fellow, Institute of South East Asian Studies, Singapore

Apr 2013 Advisor, Libera Corporation (incumbent) Apr 2015 Adjunct Professor, National University of Singapore

(incumbent)


－ 49 －

Notes: 1. No specific conflict of interests exists between the Company and the candidate. 2. Mr. Takaaki Kojima is a candidate for Outside Audit & Supervisory Board Member. 3. Specific notes for a candidate for Outside Audit & Supervisory Board Member

Mr. Takaaki Kojima held prominent positions at the Ministry of Foreign Affairs, including Ambassador Extraordinary and Plenipotentiary and has high level insights on international affairs, economy, culture, etc. Though he has had no experience of direct involvement in corporate management, the Company determines that he could provide recommendations, views and advice from the objective perspective and carry out appropriate supervision of the management of the Group as a whole. Accordingly the Company proposes that he be elected as Outside Audit & Supervisory Board Member for the reasons above.

4. If the election of Mr. Takaaki Kojima as Outside Audit & Supervisory Board Member is approved, the Company will, in accordance with Article 427, Paragraph 1 of Companies Act, conclude an agreement with him concerning liability for damages as specified in Article 423, Paragraph 1 of Companies Act. His relevant liabilities for damages under the agreement shall be limited to the minimum liability amount as stipulated by laws and regulations.

End of Document

The following is an English translation of Notes to Consolidated Financial Statements and Notes to Non-Consolidated Financial Statements of J Trust Co., Ltd. The Company provides this translation for your reference and convenience only and without any warranty as to its accuracy.

Matters for Internet Disclosure

under Laws and Regulations

and the Articles of Incorporation

Notes to Consolidated Financial Statements

Notes to Non-Consolidated Financial Statements

(from April 1, 2014 to March 31, 2015)

J Trust Co., Ltd.

"Notes to Consolidated Financial Statements" and "Notes to Non-Consolidated Financial Statements" are provided to our shareholders by posting the same on the Company’s website (www.jt-corp.co.jp/en) pursuant to laws and regulations, and Article 15 of our Articles of Incorporation.


－ 2 －

Notes to Consolidated Financial Statements 1. Significant Matters Regarding the Preparation of Consolidated Financial Statements

(i) Scope of consolidation [1] Number of consolidated subsidiaries: 26 Names of major consolidated subsidiaries Nihon Hoshou Co., Ltd. Keynote Co., Ltd. Partir Servicer Co., Ltd. J Trust System Co., Ltd. J TRUST Card Co., Ltd. ADORES, Inc. BREAK Co., Ltd. Japan Care Welfare Group Co., Ltd. Chinae Savings Bank Co., Ltd. JT Savings Bank Co., Ltd. Neoline Credit Co., Ltd. KJI Consumer Finance LLC (currently TA Asset Management LLC) HICAPITAL Co., Ltd. JT Capital Co., Ltd. JTRUST ASIA PTE. LTD. PT Bank Mutiara Tbk. 10 others During the current consolidated fiscal year, we acquired shares of Japan Care Welfare Group Co., Ltd., PT Bank Mutiara Tbk., JT Savings Bank Co., Ltd., JT Capital Co., Ltd. and another company and established J Trust Venture Capital LLC and another company. All of them were included in the scope of consolidation. As for PT Bank Mutiara Tbk. and JT Capital Co., Ltd., only balance sheets were included in the scope of consolidation. During the previous fiscal year, we transferred shares of our consolidated subsidiary, AAD Co., Ltd. and liquidated JT Investment Co., Ltd. KC Co., Ltd., established during the current consolidated fiscal year assumed part of business of our consolidated subsidiary, KC Card Co., Ltd. (currently J TRUST Card Co., Ltd.) centered on “KC Card” brand and its subsidiary, United Partir KC and we sold shares of KC Co., Ltd. Therefore, these three companies were excluded from the scope of consolidation.

[2] Name of major unconsolidated subsidiaries Peer Labo Co., Ltd. 2 others Reason for exclusion from the scope of consolidation Unconsolidated subsidiaries are all small in terms of its size, total assets, sales, net income (corresponding to our share) and retained earnings (corresponding to our share) etc. in total and do not have a significant impact on the consolidated financial statements. Therefore, they were excluded from the scope of consolidation. (ii) Application of equity method [1] Number of unconsolidated subsidiaries in the scope of equity method: 0 [2] Number of affiliates in the scope of equity method: 0

During the current consolidated fiscal year, our consolidated subsidiary, JTRUST ASIA PTE. LTD. acquired shares of LCD Global Investments LTD. and it was included in the scope of equity method. However, we accepted a tender offer by AF Global PTE. LTD. and sold all our holdings. Therefore, it was excluded from the scope of equity method.

[3] Three unconsolidated subsidiaries (Peer Labo Co., Ltd. and two others) and two


－ 3 －

affiliates (Clotho Co., Ltd. and another) do not have a significant impact on net income (corresponding to our share) and retained earnings (corresponding to our share) and are not important as a whole. Therefore, they were excluded from the scope of equity method. (iii) Accounting period of consolidated subsidiaries

Following consolidated subsidiaries have the closing date different from the consolidated

closing date. Their financial statements based on the provisional settlement of accounts as

of the consolidated closing date are used as the basis.

Company name Closing date

Chinae Savings Bank Co., Ltd. End of June

JT Savings Bank Co., Ltd. End of June

Neoline Credit Co., Ltd. End of September

NL Value Capital Co., Ltd. End of November

J TRUST Card Co., Ltd. End of December

HICAPITAL Co., Ltd. End of December

PT Bank Mutiara Tbk. End of December

JT Capital Co., Ltd. End of December

During the current consolidated fiscal year, JTRUST ASIA PTE. LTD. changed its closing

date to the end of March, same as the consolidated closing date. Because of that, the

accounting period for the current consolidated fiscal year is 15 months, from January 1,

2014 till March 31, 2015.

Above change has been made so that the Group can implement budget formulation,

performance management and settlement operation more efficiently and it also facilitates

more appropriate information disclosure.

The reason of above change during the fourth quarter is that we were preparing to establish

the structure to change the closing date to consolidated closing date. Since such a structure

has been established at JTRUST ASIA PTE. LTD.(hereinafter, “JTA”), we judged that the

change of closing date at an early stage will be beneficial to the more appropriate

information disclosure.

Profit and loss for three months, from January 1, 2014 till March 31, 2014, at JTA is adjusted

through the consolidated statements of income. This change resulted in a 3 million yen

increase in operating revenue, a 20 million yen increase in operating losses, a 20 million yen

increase in ordinary losses and a 20 million yen decrease in net income.

During the current consolidated fiscal year, we acquired shares of PT Bank Mutiara Tbk. and

JT Capital Co., Ltd. and included them in the scope of consolidation. For the current

consolidated fiscal year, only their balance sheets were included in the scope of

consolidation.

As for PT Bank Mutiara Tbk., financial statements based on fiscal closing date of December

31 are used and we made necessary adjustment for important transactions from January 1

till March 31.

Closing date of other consolidated subsidiaries is same as the consolidated closing date.

(iv) Matters regarding accounting standards

[1] Valuation standards and methods for significant assets

A. Securities

Bonds held to maturity: Amortized cost method (interest method)

Other securities


－ 4 －

Securities with market price:

Market value method based on the market price on the consolidated closing

date (valuation differences are directly charged to the shareholders’ equity

and cost of securities sold is computed using the moving average method.)

Securities without market price:

Cost method by moving average method

B. Derivatives: Market value method

C. Inventories

Merchandise and finished goods (real estate for sale) and work in process:

Cost method by specific identification method (computed by writing down the

book value, based on the decline in profitability)

[2] Depreciation method for significant depreciable assets

A. Property, plant and equipment (excluding leased assets): Mainly by

declining balance method

B. Intangible assets (excluding leased assets): Straight-line method

Software for internal use is depreciated over a useful life of five years.

C. Long-term prepaid expenses: Straight-line method

D. Leased assets: Declining balance method for tangible leased assets

using its lease period as its depreciation period

Straight-line method for intangible leased assets using its lease period as its

depreciation period

Regarding non-ownership-transfer finance lease transactions which started

on or before March 31, 2008, accounting processing based on the method

pertaining to usual lease transactions is adopted.

[3] Accounting standards for significant allowance

Allowance for doubtful

accounts

To prepare for loss on doubtful accounts,

allowance for doubtful accounts is recorded

taking following factors into consideration; the

historical loan loss ratio for general receivable;

and collectability of each receivable for

specific receivable potentially falling into

doubtful accounts.

Provision for loss on

interest repayment

To prepare for interest refund claims from

borrowers, etc., concerning payments that

exceeded the maximum interest under the

Interest Rate Restriction Act, the loss

projected at the end of the current

consolidated fiscal year is recorded.


business liquidation

To prepare for the expenses related to the

business reorganizations, the expenses

estimated at the end of the current



guarantees

To prepare for loss due to the fulfillment of

obligations in relation to credit guarantee

services with partnered financial institutions,

the loss projected at the end of the current


－ 5 －



litigation

To prepare for loss on litigation, the loss

estimated at the end of the current


[4] Accounting standards for significant revenue and expenses

Customer fees Credit card revenue: Mainly based on declining balance

method

Under declining balance method, interest is calculated

by multiplying a prescribed rate by principal balance

and recorded as operating revenue (installment

payment paying for commission) after the due date.

Merchant fees Merchant fees are recorded in a lump sum as operating

revenue (installment payment paying for commission) at

the fulfillment of reimbursement payment agreements

with merchants.

Accounting

standards for

revenue and costs

related to

collection of

purchased

receivables

At the Company and its subsidiaries in financial

business, difference between principal amount and

acquisition cost is recorded as operating revenue (other

financial revenue). Depreciation cost method is adopted

for receivable whose future cash flows can be

estimated, while operating revenue is recorded based

on the recovered amount for receivable whose future

cash flows are difficult to estimate.

At subsidiaries that provide receivable collection

services, the recovered amount is recorded as

operating revenue (collection from purchased

receivables). Regarding costs, depreciation cost

method is adopted for receivable whose future cash

flows can be estimated. Regarding receivable whose

future cash flows are difficult to estimate, total

recovered amount is recorded as operating expenses

(cost of purchased receivables) until such amount

reaches the acquisition cost.

[5] Conversion standard for significant foreign currency-denominated assets or

liabilities from foreign currency to Japanese currency

Foreign currency-denominated monetary claims and liabilities are converted

into Japanese currency using an exchange rate as of the consolidated

closing date. Differences arising from currency conversion are processed as

profit or loss. Assets and liabilities of overseas subsidiaries are converted

into Japanese currency using an exchange rate as of the consolidated

closing date. Revenues and expenses are converted into Japanese

currency using an average exchange rate. Differences arising from currency

conversion are included in foreign currency translation adjustment and

minority interests under net assets.


－ 6 －

[6] Significant hedge accounting

Hedge accounting

method

With regard to interest rate swap, an exceptional

processing is adopted since it meets requirements for

the exceptional processing.

Instrument and

hedged item

Hedge accounting is adopted for following instrument

and item.

Instrument: Interest rate swap

Item: Loans payable

Policy on hedge In order to reduce interests on loans payable and to

improve financial revenue, risk of future interest rate

change is hedged. Subsidiaries conducted such

transaction. Prior to the transaction, an approval at

the subsidiary’s Board of Directors’ meeting had been

obtained with respect to terms of contract and

maximum amount of notional principal.

Method to evaluate

efficacy of hedge

Significant terms regarding instrument and hedged

items are the same and the transaction is deemed to

offset the risk of interest rate change. Therefore, the

evaluation on the efficacy of hedge is omitted.

[7] Amortization method and period for goodwill

Goodwill is amortized over the period during which investment is effective

within 20 years from the posted date, using the straight-line amortization

method.

[8] Other significant matters which constitute the basis for preparation of the

consolidated financial statements

A. Accounting for retirement benefits

To provide for the retirement benefits, defined benefit liability is recorded by

subtracting the pension assets from the retirement benefit obligations based

on the projection at the end of the current consolidated fiscal year.

If the pension assets exceed retirement benefit obligations, the excess is

recorded as assets.

As for actuarial losses (gains), the accrued amount divided by a certain year

not exceeding the average remaining service years of employees using the

straight-line method is recorded as expenses starting from the following

consolidated fiscal year.

Unrecognized actuarial losses (gains) are recorded as remeasurements of

defined benefit plans in the accumulated comprehensive income under the

net assets after taking the tax effect into account.

Some of overseas subsidiaries adopt simplified method in calculating

defined benefit obligations and retirement benefit expenses.

B. Accounting for consumption taxes

Consumption taxes are accounted for using the tax exclusion method.

However, non-deductible consumption taxes related to non-current assets

are recorded as “Other” under investments and other assets and amortized

over 5 years using the straight-line method.


－ 7 －

(v) Matters regarding changes in presentation method

All investment securities held by our consolidated subsidiary, JTRUST ASIA PTE.

LTD. were included in “Investment securities” (8,918 million yen at the end of

previous fiscal year) under “Investments and other assets” in the previous

consolidated fiscal year. We came to the conclusion that the significance of JTA’s

investment business will increase in the future and enforced JTA’s structure by

having a director permanently stationed at JTA for effective contemplation of

investment deals. We judged that it is necessary for financial statements to reflect

JTA’s transactions more appropriately and decided to record JTA’s investment

securities as “Operational investment securities” separately under “Current assets”

from the current consolidated fiscal year.


－ 8 －

2. Notes to Consolidated Balance Sheet (1) The amount less than 1 million yen is rounded down. (2) Pledged assets

Assets pledged as collateral (Unit: Millions of yen)

Deposits 1,761 Commercial notes 12 Accounts receivable - operating loans 4,730 Advances paid - installment 1,137 Purchased receivables 4,051 Merchandise and finished goods 1,993 Work in process 182 Buildings and structures 1,422 Land 1,816 Other (Intangible assets) 555 Other (Investments and other assets) 1,471

Total 19,136

Debts corresponding to the above

Short-term loans payable 3,326 Current portion of long-term loans payable 4,220 Long-term loans payable 7,782

Total 15,329

Assets pledged as collateral are also used as collateral for guarantee obligations in relation to credit guarantee services. In addition to the above, overseas consolidated subsidiaries had deposits of 18,487 million yen as payment reserve assets, etc. based on regulations of each jurisdiction.

(3) Accumulated depreciation on property, plant and equipment 26,582 million yen (4) Guarantee obligations

Subject of guarantee Guaranteed

amount Type of guarantee

39,183 cases (business entities and consumers)

36,289 million yen Borrowings from financial

institutions and others

Note: The Group recorded provision for loss on guarantees in the amount of 422 million yen for the total guarantee obligations of 36,712 million yen. In addition to the above, 7,014 million yen of guarantee obligation existed in relation to banking business of an Indonesian commercial bank, PT Bank Mutiara Tbk.

(5) Provision incurred from business combination

Provision incurred from business combination of 927 million yen is included in “Other” under non-current liabilities. The provision was incurred due to the acquisition of shares of an Indonesian commercial bank, PT Bank Mutiara Tbk., as of November 20, 2014. It consists of contingent liabilities in relation to lawsuits, etc. expected as at the date of the acquisition.

(6) Market value of the securities borrowed under a loan agreement is 476 million yen.


－ 9 －

3. Notes to Consolidated Statement of Income (1) The amount less than 1 million yen is rounded down. (2) Impairment loss

For the consolidated fiscal year under review, the Group recorded impairment loss for the following asset groups.

Location Use Type of assets

Fujisawa-shi, Kanagawa-ken and others

Business assets Building fixtures, etc.

Fujisawa-shi, Kanagawa-ken and others

Business assets Amusement machine

Shimogyo-ku, Kyoto-shi and others

Business assets Buildings fixtures, etc.

The Group classifies its assets as business assets, assets for lease, and idle assets. With regard to stores and offices classified as business assets which will be closed down, the book value is recorded at zero, and the reduction of 80 million yen was recorded as extraordinary losses. The breakdown comprises 29 million yen for buildings and structures, 48 million yen for amusement machine, and 1 million yen for furniture and fixtures. In addition, as the recoverable value of goodwill fell below the book value, their book value was reduced to a recoverable value, and the reduction of 702 million yen was recorded as extraordinary losses.

4. Notes to Consolidated Statement of Changes in Net Assets (1) Class and number of issued shares as at the end of the consolidated fiscal year under review

118,589,354 common shares (2) Matters pertaining to dividends

(i) Dividend payments

Resolution Class

Total dividend

(millions of yen)

Dividend per share

(yen)

Reference date

Effective date

The Board of Directors’

meeting (May 14, 2014)

Common share

589 5 March 31,

2014 June 27,

2014

The Board of Directors’ meeting

(November 13, 2014)

Common share

590 5 September 30, 2014

December 5, 2014


－ 10 －

(ii) Of dividends for which the reference date belongs to the fiscal year under review, the effective date belongs to the following fiscal year.

Resolution Class

Total dividend

(millions of yen)

Source of funds

Dividend per share

(yen)

Reference date

Effective date

The Board of Directors’

meeting (May 14, 2015)

Common share

590 Retained earnings

5 March 31,

2015 June 29,

2015

(3) Class and number of shares underlying subscription rights to shares at the end of the

consolidated fiscal year under review (excluding subscription rights to shares of which the exercise period has not yet commenced): 360,040 common shares

5. Notes to Financial Products (1) Matters regarding financial products

In addition to comprehensive financial business which includes loans, credit card, banking, purchase of accounts receivable, and credit guarantee operations, the Group undertakes real estate business and amusement business. In order to conduct these businesses, funds are procured by obtaining loans from banks in consideration of the market conditions and the balance of short-term and long-term financing, and by providing savings accounts and time deposits to individuals and business customers in South Korea and Indonesia where the Group conducts banking business. Financial assets owned by the Group are mainly commercial notes, accounts receivable - operating loans and advances paid-installment payable by small and medium-sized enterprises, business owners and individuals. In the banking business, the Group’s financial assets are loans extended to small and medium-sized enterprises, business owners and individuals in South Korea and Indonesia. In accordance with various rules regarding credit risk, we try to minimize such risk. With regard to purchase of accounts receivable, such receivable is purchased at discount from business corporations and financial institutions. To comprehend the appropriate value and reduce risk, the Group obtains the material on current price calculation from a third party valuation agency and uses it as a reference in determining the purchase price. In credit guarantee service, the Group has guarantee obligations mainly in relation to loans extended by Japanese financial institutions as well as subrogation receivable arising from fulfillment of guarantee obligation. The Group aims to reduce risk during the screening process by complying with various rules related to credit risk. Securities are mostly composed of public and corporate bonds which are held for asset management purposes in relation to the banking business. Operational investment securities are stocks held for investment purpose. Investment securities are mostly stocks held for business promotion purpose. The Group reviews market price of public and corporate bonds, and listed stocks on a quarterly basis. Financial liabilities are used for operational purposes. In South Korea and Indonesia where the Group operates financial institutions and banking business, the Group raises fund by providing savings accounts and time deposits to individuals and business customers. With regard to derivative transactions, the Company has a policy to maintain a guarded stance and will not conduct any speculative transactions.


－ 11 －

(2) Matters regarding market value of financial products and others The following are the balance on consolidated balance sheet, market value and difference between them as of March 31, 2015. Unlisted stocks, the market value of which is extremely difficult to determine, are excluded from the table below. In addition, accounts with little significance for the consolidated balance sheet amount are omitted.

(Unit: millions of yen)

Balance on

consolidated balance sheet

Market value Difference

(1) Cash and deposits 141,742 141,742 - (2) Commercial notes 2,355

Allowance for doubtful accounts (*)

(14)

2,341 2,341 -

(3) Accounts receivable - operating loans

65,315


(4,483)

60,832 60,832 -

(4) Loans by banking business 224,401 Allowance for doubtful accounts (*)

(15,540)

208,860 212,014 3,153

(5) Advances paid - installment 1,395 Allowance for doubtful accounts (*)

(1)

1,393 1,393 -

(6) Purchased receivables 8,647 Allowance for doubtful accounts (*)

(28)

8,618 8,618 -

(7) Subrogation receivable 1,124 Allowance for doubtful accounts (*)

(248)

875 875 -

(8) Securities 17,874 17,967 92 (9) Operational investment

securities 6,595 6,595 -

(10) Investment securities 3,066 3,066 - (11) Long-term operating loans

receivable 2,405


(1,999)

405 405 -

Total 452,606 455,853 3,246


－ 12 －

(Unit: millions of yen)

Balance on

consolidated balance sheet

Market value Difference

(1) Notes discounted 2,226 2,226 - (2) Current portion of bonds 130 130 - (3) Short-term loans payable 7,862 7,862 - (4) Current portion of long-term

loans payable 5,987 5,987 -

(5) Deposits by banking business

287,452 288,212 760

(6) Bonds payable 2,241 2,234 (6) (7) Long-term loans payable 11,009 10,930 (78)

Total liabilities 316,910 317,585 674

(Unit: Millions of yen)

Guarantee

balance Market value Difference

Guarantee obligations (1) Guarantee obligations (*) 43,727

Provision for loss on guarantees (*)

(422)

43,304 43,304 -

Total guarantee obligations 43,304 43,304 -

(*) Above balance is after deduction of general and individual allowance for doubtful accounts corresponding to commercial notes, accounts receivable-operating loans, loans by banking business, advances paid - installment, purchased receivables, subrogation receivable and long-term operating loans receivable. Above balance is after deduction of provision for loss on guarantees corresponding to guarantee obligations. Guarantee obligations include guarantee obligation of 7,014 million yen in relation to banking business.

Note: Matters relating to the calculation method of market value of financial products and guarantee obligations Assets

(1) Cash and deposits Since these are settled within one (1) year, its market value is almost equivalent to book value. Therefore, the book value is used as its market value.

(2) Commercial notes Since these are mainly settled within one (1) year, the book value on the consolidated closing date minus the current projected bad debts is used as its market value.

(3) Accounts receivable-operating loans; and (4) Loans by banking business They are recorded at their present value based on the projected future cash flows discounted using yield of government bond with corresponding maturity.

(5) Advances paid – installment Since their projected bad debts are calculated based on the present value of the projected future cash flows or the amount expected to be recovered, etc., from the collateral and guarantee, the book value on the consolidated closing date minus the current projected bad debts is used as its market value.


－ 13 －

(6) Purchased receivables These were purchased within one (1) year from the consolidated financial closing date at a proper price with reference to the material on current price calculation from a third party valuation agency in determining the purchase price. Therefore, its book value is used as the basis for its market value. However, with regard to some of purchased receivables, its projected bad debts is calculated based on the present value of the projected future cash flows or the amount expected to be recovered, etc., from the collateral. Therefore, the book value on the consolidated closing date minus the current projected bad debts is used as its market value.

(7) Subrogation receivable Since its projected bad debts is calculated based on the present value of the projected future cash flows or the amount expected to be recovered, etc., from the collateral and guarantee, the book value on the consolidated closing date minus the current projected bad debts is used as its market value.

(8) Securities; (9) Operational investment securities; and (10) Investment securities Price on exchanges is used for stocks, price on exchanges or price provided by financial institutions is used for bonds, and price reasonably calculated is used for other securities.

(11) Long-term operating loans receivable Since its projected bad debts are calculated based on the present value of the projected future cash flows or the amount expected to be recovered, etc., from the collateral and guarantee, the book value on the consolidated closing date minus the current projected bad debts is used as its market value.

Liabilities (1) Notes discounted

Since these are settled within one (1) year, its market value is almost equivalent to book value. Therefore, its book value is used as its market value.

(2) Current portion of bonds; (3) Short-term loans payable; and (4) Current portion of long-term loans payable Since these are settled within one (1) year, its market value is almost equivalent to its book value. Therefore its book value is used as its market value.

(5) Deposits by banking business Of deposits by banking business, the amount of demand deposits payable on the consolidated closing date (book value) is used as its market value. In addition, the market value of time deposits, etc. is measured for each product at their present value by discounting future cash flows using the interest rate for new deposits.

(6) Bonds payable The market value of bonds is calculated by discounting the sum of principal and interest using the interest rate which takes its remaining term to maturity and credit risk into consideration.

(7) Long-term loans payable The book value is used as the market value for variable rate loans since it reflects market interest rate within a short period of time and the credit condition of the Company and its consolidated subsidiaries has not changed significantly from the time of loan origination. The market value of fixed rate loans is calculated by discounting the future cash flows using an interest rate based on an appropriate index such as the yield of government bonds.

Guarantee obligations (1) Guarantee obligations

Since its estimated loss is calculated for each category based on type of guarantee obligations, internal ratings, term and other criteria, the guaranteed balance on the consolidated closing date minus the current estimated loss is used as its market value.


－ 14 －

6. Notes to Per Share Information (1) Net assets per share 1,591.09 yen (2) Net income per share 85.92 yen


－ 15 －

7. Notes to Business Combination (1) At the Board of Director’s meeting of each company held on June 25, 2014, the

Company and KC Card Co., Ltd. (hereinafter, “KC Card”), a consolidated subsidiary of the Company, resolved to establish a subsidiary of KC Card (hereinafter, “Concerned Company”) to assume a part of KC Card’s business which is mainly operated under “KC Card” brand effective January 5, 2015 through absorption-type corporate split, and transfer all shares of Concerned Company to Yahoo Japan Corporation and SoftBank Payment Service Corp. on January 5, 2015. (i) Overview of the divestiture

1. Description of divested businesses Credit card, credit card loan, credit guarantee, installment loan business, etc.

2. Legal form of the divestiture Business transfer by means of sale of shares

3. Date of the divestiture January 5, 2015

4. Name of the counterparty Yahoo Japan Corporation and SoftBank Payment Service Corp.

5. Main reasons for the divestiture Main reasons for the divestiture are: competition in the business area is expected to intensify; the transferee values “KC Card” brand highly; the Company can continue its credit card business mainly under NUCS brand; and the Company can raise approximately 40.4 billion yen from the transaction and reinvest the fund, along with the fund raised through rights offering in July 2013, to reinforce the existing businesses and start up new businesses in order to optimize the Group’s business portfolio, as well as to improve investment return and corporate value.

(ii) Overview of the accounting treatment of the transaction 1. Gain on transfer of business

Gain on transfer of business 848 million yen 2. Appropriate book values of assets and liabilities related to the transferred business and their breakdown

Current assets 43,006 million yen Non-current assets 7,950 million yen

Total assets 50,957 million yen

Current liabilities 6,249 million yen Non-current liabilities 9,917 million yen

Total liabilities 16,167 million yen

3. Accounting treatment Gain on sales of subsidiary’s shares, which is calculated as the difference between the book value of KC Card and others on a consolidation basis and its sales value, is included in the gain on transfer of business.

4. Estimated amounts of profit and loss of the transferred business recognized in the consolidated statement of income for the current consolidated fiscal year

Operating revenue 6,313 million yen Operating loss 641 million yen

(2) At the Board of Director’s meeting held on August 18, 2014, the Company passed a

resolution to acquire 99% shares of an Indonesian commercial bank, PT Bank Mutiara Tbk., acquired its shares and made it a subsidiary of the Company, effective November 20, 2014.

(i) Name of acquired company and description of its business, legal form of the business combination, name of company after the combination and overview of business combination including objective of the transaction

1. Name of acquired company and description of its business Name of acquired company PT Bank Mutiara Tbk.


－ 16 －

Description of its business Banking business 2. Legal form of the business combination

Share acquisition 3. Name of company after the combination

PT Bank Mutiara Tbk. 4. Overview of business combination including objective of the transaction

By benefiting from know-how of consumer finance business accumulated in Japanese operations, the Group aims to provide comprehensive financial services including various loans, card services, foreign exchange related services, etc. mainly for SMEs and salaried workers whose presence is growing rapidly in Indonesia.

(ii) Acquisition cost of the acquired company 43,243 million yen (iii) Amount of goodwill arising from the acquisition 37,017 million yen (iv) Method and period of amortization Since the acquisition price

allocation hasn’t been completed, the amount of goodwill is tentative and the amortization period has yet to be determined.

(3) At the Board of Director’s meeting held on June 16, 2014, the Company passed a

resolution regarding the acquisition of all shares of Standard Chartered Savings Bank Korea Co., Ltd., acquired all of its shares and made it a subsidiary of the Company, effective January 19, 2015.


1. Name of acquired company and description of its business Name of acquired company Standard Chartered Savings Bank Korea Co., Ltd. Description of its business Savings bank business

2. Legal form of the business combination Share acquisition

3. Name of company after the combination JT Savings Bank Co., Ltd.

4. Overview of business combination including objective of the transaction By expanding our business area enough to cover about 70% of the entire Korean market through this acquisition, the Group aims to increase balance of loan and deposits, boost the effect of advertising and promotion, and acquire competent employees through improvement in the Group’s name value.

(ii) Acquisition cost of the acquired company 5,688 million yen (iii) Gain on bargain purchase 5,107 million yen

(4) At the Board of Director’s meeting held on June 16, 2014, the Company passed a resolution regarding the acquisition of all shares of Standard Chartered Capital (Korea) Co., Ltd., acquired all of its shares and made it a subsidiary of the Company, effective March 30, 2015.


1. Name of acquired company and description of its business Name of acquired company Standard Chartered Capital (Korea) Co., Ltd. Description of its business Leasing and other financial services



－ 17 －

3. Name of company after the combination JT Capital Co., Ltd.

4. Overview of business combination including objective of the transaction In addition to our existing savings bank and receivable collection businesses in South Korea, the Group aims to improve its infrastructure development through the acquisition in order to provide comprehensive financial services and create synergies.

(ii) Acquisition cost of the acquired company 10,547 million yen (iii) Gain on bargain purchase 8,423 million yen

8. Important subsequent events At the Board of Directors’ meeting on May 14, 2015, the Company passed a resolution in relation to matters concerning acquisition of its own shares pursuant to Article 156, applied with a replacement of terms pursuant to the provisions of the Article 165, Paragraph 3 of the Companies Act. The outline is as follows: (i) Reason for acquisition of own shares The Company will acquire its own shares to return profit to shareholders through the improvement in its capital efficiency and to enable the flexible implementation of capital policy in response to the change in the operating environment. (ii) Details of resolution adopted by Board of Directors regarding acquisition of own shares

1. Class of shares Common shares 2. Total number of shares that can be acquired Up to 6,250,000 shares 3. Share acquisition period From May 26, 2015 to March 31,

2016 4. Total share acquisition amount Up to 7,500 million yen 5. Acquisition method Auction market of the Tokyo Stock

Exchange


－ 18 －

Notes to Non-Consolidated Financial Statements

1. Matters regarding significant accounting standards

(i) Valuation standards and methods for assets

A. Securities

Subsidiaries’ shares Cost method by moving average

method

Other securities

Securities without market price: Cost method by moving average

method

(ii) Depreciation method for property, plant and equipment

A. Property, plant and equipment: Declining balance method

B. Intangible assets: Straight-line method

Software for internal use is depreciated over a useful life of five years.

C. Long-term prepaid expenses: Straight-line method

(iii) Accounting standards for allowance

Allowance for doubtful

accounts

To prepare for loss on doubtful accounts,

allowance for doubtful accounts is recorded

taking following factors into consideration; the

historical loan loss ratio for general receivable;

and collectability of each receivable for

specific receivable potentially falling into

doubtful accounts.

(iv) Other significant matters which constitute the basis for preparation of the

non-consolidated financial statements

A. Amortization method and period for goodwill Goodwill is amortized over the period during which investment is effective, 5 years, using the straight-line method.

B. Accounting for consumption taxes

Consumption taxes are accounted for using the tax exclusion method. However, non-deductible consumption taxes related to non-current assets are recorded as “Other” under investments and other assets and amortized over 5 years using the straight-line method.


－ 19 －

2. Notes to Non-Consolidated Balance Sheet (1) The amount less than 1 million yen is rounded down. (2) Pledged assets

Assets pledged as collateral Deposits 620 million yen Shares of subsidiaries and associates 2,939 million yen

Total 3,559 million yen

Debts corresponding to the above Short-term loans payable 370 million yen

Current portion of long-term loans payable

1,128 million yen

Long-term loans payable 3,094 million yen

Total 4,592 million yen

Assets pledged as collateral are also used as collateral for borrowings by subsidiaries.

(3) Accumulated depreciation on property, plant and equipment

107 million yen

(4) Guarantee obligations (i) Guarantee obligations related to operating activities

Subject of guarantee

Guaranteed amount

Type of guarantee

37,775 cases (business entities and consumers)

36,438 million yen Borrowings from financial institutions and

others

Notes: The Company acts as a joint guarantor for guarantee obligations of subsidiaries. The above includes joint and several guarantees due to concomitant assumption of obligations.

(ii) Guarantees related to subsidiaries and associates

Subject of guarantee

Guaranteed amount

Type of guarantee

Nihon Hoshou Co., Ltd.

3,277 million yen Borrowings from financial institutions and

others

J TRUST Card Co., Ltd.

1,104 million yen Borrowings from financial institutions


－ 20 －

(5) Monetary claims receivable from and payable to subsidiaries and associates (excluding those stated separately in financial statements)

Short-term monetary claims receivable from subsidiaries and associates 198 million yen

Long-term monetary claims receivable from subsidiaries and associates 87 million yen

Short-term monetary claims payable to subsidiaries and associates 19,915 million yen

Long-term monetary claims payable to subsidiaries and associates 162 million yen

3. Notes to Non-Consolidated Statement of Income

(1) The amount less than 1 million yen is rounded down. (2) Volume of transactions with subsidiaries and associates

Volume of operating transactions with subsidiaries and associates Operating revenue 4,124 million yen Operating expenses 249 million yen Volume of non-operating transactions 5 million yen

4. Notes to Non-Consolidated Statement of Changes in Net Assets

Class and number of treasury shares as at the end of the current fiscal year 409 thousand common shares

5. Notes to Tax Effect Accounting (Unit: millions of yen)

Breakdown of major factors that caused deferred tax assets and liabilities Deferred tax assets Shares of subsidiaries 2,190 Retained loss 1,580 Other 162

Subtotal - deferred tax assets 3,932 Valuation allowance (3,932)

Total deferred tax assets - Deferred tax liabilities Valuation difference on assets acquired by merger (38)

Total deferred tax liabilities (38)

Net deferred tax liabilities (38)


－ 21 －

6. Notes to Non-current Assets Used under Lease Contracts Finance lease transactions for which ownership is not transferred to the lessee, and for which the lease period started on or before March 31, 2008

(1) Amounts corresponding to the acquisition cost, accumulated depreciation, and balance

of leased assets at the end of period (unit: millions of yen)

Acquisition cost Accumulated depreciation

Balance at the end of period

Furniture and fixtures

14 13 0

(2) Amount corresponding to the future lease payments outstanding at the end of the fiscal year

Due within one year 0 Due over one year -

Total 0 (3) Lease expenses, amount equivalent to depreciation and amount equivalent to interest expenses

Lease expenses 2 Depreciation expenses 2 Interest expenses 0

(4) Calculation method for amount equivalent to depreciation

Straight-line method with lease term as service life and residual value as zero is used. (5) Calculation method for amount equivalent to interest expenses

The difference between the total lease payment and the amount equivalent to the acquisition cost of the leased asset is assumed as the amount equivalent to interest payment, and the interest method is used for its allocation to each term.


－ 22 －

7. Notes to Transaction with Related Parties Subsidiaries, associates and others

Type

Company name

Capital stock or

investments in capital

(millions of yen)

Business

Ratio of voting rights

(Owned) (%)

Relationship with the related

parties

Transaction details

Transaction amount (millions of yen)

Item

Balance at the end of

period (millions of

yen) Location

Subsidiary

Nihon Hoshou Co.,

Ltd. 95 Finance Direct 100

Concurrent holding of positions by

executives of the Company;

Credit guarantee

Credit guarantee for borrowings

(note 1) 39,454 - -

Miyakojima-ku, Osaka-shi

Subsidiary

J TRUST Card Co., Ltd.

3,055 Finance Direct 99.7



Borrowing of funds; Credit guarantee

Borrowing of funds (note 2)

15,000 Short term

loans payable 15,000

Payment of interest - Accrued expense

7

Miyazaki-shi, Miyazaki

Interest expense 7 Credit guarantee for

borrowings (note 1)

1,104 - -

Subsidiary

CREDIA Co., Ltd.

100 Finance Direct 100

Borrowing of funds

Borrowing of funds (note 2)

- Current portion

of long-term loans payable

4,900

Suruga-ku, Shizuoka-shi

Payment of interest 136 Accrued expense

0 Interest expense 136

Subsidiary

JTRUST ASIA PTE.

LTD. 16,315 Investment

Direct 100


executives of the Company

Underwriting of capital increase

6,392 - -

Singapore

Subsidiary

PT Bank Mutiara Tbk.

104,834 Banking Direct 99.0


executives of the Company

Underwriting of capital increase

5,640 - -

Indonesia

Subsidiary

Neoline Credit Co.,

Ltd. 980 Finance Direct 100

Lending of funds

Lending of funds (note 3) 3,587

Short-term loans

receivable from

subsidiaries and associates

3,587

Seoul Special City

Receipt of interest 70 Accrued income

3 Interest income 24

Subsidiary

KJI Consumer Finance

LLC 833 Finance Direct 100

Lending of funds


Short-term loans

receivable from


3,584

Seoul Special City

Receipt of interest - Accrued income

2 Interest income 2

Subsidiary

HICAPITAL Co., Ltd.

1,556 Finance Direct 100

Lending of funds


Short-term loans

receivable from


3,582

Seoul Special City


2 Interest income 2

Subsidiary

JT Capital Co., Ltd.

11,739 Finance Direct 100



Lending of funds


Short-term loans

receivable from


3,579

Seoul Special City


0 Interest income 0

Conditions of transactions and policy regarding determination of conditions of transaction, etc. Notes: 1. They act as guarantor for the borrowings from financial institutions and

guarantee obligations related to credit guarantee services. Guarantee commission rate is determined rationally in consideration of the situation regarding subrogation receivable etc.


－ 23 －

2. The interest rate on the borrowing is reasonably determined based on market interest rates.

3. The interest rate on the lending is reasonably determined based on market interest rates.

8. Notes to Per Share Information

(1) Net assets per share 980.59 yen (2) Net income per share 42.27 yen

9. Notes to Business Combination

(1) At the Board of Director’s meeting held on August 18, 2014, the Company passed a resolution regarding acquisition of shares of an Indonesian commercial bank, PT Bank Mutiara Tbk., acquired 99% shares and made it a subsidiary of the Company, effective November 20, 2014.

Name of acquired company and description of its business, legal form of the business combination, name of company after the combination and overview of business combination including objective of the transaction

1. Name of acquired company and description of its business Name of acquired company PT Bank Mutiara Tbk. Description of its business Banking business


3. Name of company after the combination PT Bank Mutiara Tbk.

4. Overview of business combination including objective of the transaction By benefiting from know-how of consumer finance business accumulated in Japanese operations, the Group aims to provide comprehensive financial services including various loans, card services, foreign exchange related services, etc. mainly for SMEs and salaried workers whose presence is growing rapidly in Indonesia.

(2) At the Board of Director’s meeting held on June 16, 2014, the Company passed a resolution regarding acquisition of all shares of Standard Chartered Savings Bank Korea Co ., Ltd., acquired all shares and made it a subsidiary of the Company, effective January 19, 2015.


1. Name of acquired company and description of its business Name of acquired company Standard Chartered Savings Bank Korea Co., Ltd. Description of its business Savings bank business


3. Name of company after the combination JT Savings Bank Co., Ltd.

4. Overview of business combination including objective of the transaction By expanding our business area enough to cover about 70% of the entire Korean market through this acquisition, the Group aims to increase the balance of loan and deposits, boost the effect of advertising and promotion, and acquire competent employees through improvement in the Group’s name value.


－ 24 －

(3) At the Board of Director’s meeting held on June 16, 2014, the Company passed a resolution regarding the acquisition of all shares of Standard Chartered Capital (Korea) Co., Ltd., acquired all of its shares and made it a subsidiary of the Company, effective March 30, 2015.


1. Name of acquired company and description of its business Name of acquired company Standard Chartered Capital (Korea) Co., Ltd. Description of its business Leasing and other financial services


3. Name of company after the combination JT Capital Co., Ltd.

4. Overview of business combination including objective of the transaction In addition to our existing savings bank and receivable collection businesses in South Korea, the Group aims to improve its infrastructure development through the acquisition in order to provide comprehensive financial services and create synergies.

10. Important subsequent events At the Board of Directors’ meeting on May 14, 2015, the Company passed a resolution in

relation to matters concerning acquisition of its own shares pursuant to Article 156, applied with a replacement of terms pursuant to the provisions of the Article 165, Paragraph 3 of the Companies Act. The outline is as follows:

(i) Reason for acquisition of own shares The Company will acquire its own shares to return profit to shareholders through the improvement in its capital efficiency and to enable the flexible implementation of capital policy in response to the change in the operating environment.

(ii) Details of resolution adopted by Board of Directors regarding acquisition of own shares 1. Class of shares Common shares 2. Total number of shares that can be acquired Up to 6,250,000 shares 3. Share acquisition period From May 26, 2015 to March 31,

2016 4. Total share acquisition amount Up to 7,500 million yen 5. Acquisition method Auction market of the Tokyo Stock

Exchange