JAFCO : Notice of Resolutions at the 44th Annual General Meeting of Shareholders（PDF：572KB）

Microsoft Word - 招集通知英訳_20160513.docx

To our shareholders:

The investment environment surrounding venture capital firms has changed dramatically and remained strong since the end of 2012, when the Abenomics was launched. In the fiscal year ended March 31, 2016, the number of domestic IPOs increased for the seventh consecutive year, but the IPO market lost steam and the post-IPO share price performance started to reflect investors' preferences. On the other hand, a number of VC funds have been established in this favorable investment environment, with funds concentrated on certain target sectors. As a result, investment costs are rising both in Japan and overseas.

In Japan, JAFCO has dramatically shifted its investment focus onto start-up and early-stage companies, rather than investing in various stages, in line with the recovery of stock exchanges for emerging companies and the rise of young entrepreneurs in the Internet-related businesses. In order to enhance the corporate value of

early-stage companies, it is crucial that we get deeply involved in management and assist the growth of companies after investment. Therefore, we have shifted to highly selective, intensive investment strategy and intentionally narrowed down the number of portfolio companies to maximize capital gains on each deal. As a result, whereas a number of venture capital firms withdrew from the market after the 2008 financial crisis, we remained focused on highly selective, intensive investment, and successfully generated high capital gains for three consecutive fiscal years starting in 2013.

JAFCO has previously carried out a large number of diversified investments in Japan. As a result,

JAFCO-backed IPOs in Japan remained at around 20 per year for several years. However, most of large capital gains were derived from highly selective, intensive investments. During the fiscal year ended March 31, 2016, the number of JAFCO-backed IPOs was eight, a significant decrease from the previous year due largely to the narrowing down of new investments. As there were also few IPO/ M&A deals overseas that generated substantial capital gains, net sales and net income declined to ¥41.2 billion and ¥17.0 billion respectively.

Considering the nature of the venture capital business, we anticipate substantial fluctuations in our future performance. We endeavor to stabilize such fluctuations by adding buyout investments, which have higher success rates, to our portfolios. JAFCO will continue to focus firmly on highly selective, intensive investment, and will aim to maximize capital gains on each deal, instead of chasing a higher number of IPOs. To this end, it is essential that we continue to create investment opportunities under any operating environment based on fair market valuation and enhance the corporate value of portfolio companies. We strongly believe that this will lead to continuous improvement in fund performance and result in enhanced corporate value of JAFCO.

JAFCO is committed to opening up new frontiers with challenging/ pioneering spirit with entrepreneurs. We look forward to your continued support.

Shinichi Fuki President & CEO JAFCO Co., Ltd.

This is an excerpt translation of the Japanese original for convenience only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

To Shareholders:

Shinichi Fuki

(Securities Code: 8595)

May 24, 2016

President & CEO

JAFCO Co., Ltd.

1-5-1 Otemachi, Chiyoda-ku, Tokyo

NOTICE OF CONVOCATION OF THE 44TH ANNUAL GENERAL MEETING OF SHAREHOLDERS

We at JAFCO Co., Ltd. would like to express our sincerest sympathies for everyone affected by the 2016 Kumamoto Earthquake and to pray for a swift recovery.

You are cordially invited to attend the 44th Annual General Meeting of Shareholders (the "Meeting") of JAFCO Co., Ltd. (the "Company"). The meeting will be held as described below.

If you are unable to attend the Meeting in person, you may exercise your voting rights either by postal mail or electronic means as shown on the next page. You are requested to exercise your voting rights by 5:00 p.m. on Monday, June 20, 2016 (Japan Time).

1. Date and Time Tuesday, June 21, 2016, at 10:00 a.m. (Japan Time)
2. Place Grand Hall on the 5th floor, Nomura Conference Plaza Nihonbashi Nihonbashi Muromachi Nomura Bldg. (YUITO)

   2-4-3 Nihonbashi-Muromachi, Chuo-ku, Tokyo

3. Purpose of the Meeting Matters to be reported: Business Report, Consolidated Financial Statements, Non-Consolidated Financial Statements, and Results of Audit by the Financial Auditor and the Board-Audit Committee of the Consolidated Financial Statements, for the 44th Fiscal Year (from April 1, 2015 to March 31, 2016) Matters to be resolved: Proposal: Election of Five (5) Directors (Excluding Directors Serving as Board-Audit Committee Members)
4. Voting When You Are Unable to Attend the Meeting

   Please examine the attached Reference Documents for the General Meeting of Shareholders and vote by either of the following methods by 5:00 p.m. on Monday, June 20, 2016 (Japan Time).

   [Voting by postal mail]

   Please indicate on the enclosed voting form whether you are for or against each proposal and return it by postal mail to us by the voting deadline indicated above.

   [Voting by electronic means (via Internet)]

   Please review the Key Points When Exercising Voting Rights by Electronic Means (via Internet) on page 41, and access the website for voting designated by the Company (http://www.evote.jp/). Follow the instructions on the screen and enter for or against each proposal by the voting deadline indicated above.

5. Notice Regarding Exercise of Voting Rights

If you vote twice by postal mail and via Internet, the vote via Internet shall be deemed valid. If you vote via Internet more than once, only the last vote shall be deemed valid.

• For those attending the Meeting, please present the enclosed voting form at the reception desk on arrival at the meeting.

• Pursuant to the provisions of applicable laws and regulations and Article 15 of the Articles of Incorporation of the Company, the following materials are not provided in this document but they have been posted on the Company's website. Note that the following materials are part of the Consolidated Financial Statements and Non-Consolidated Financial Statements audited by the Board-Audit Committee and the financial auditor in the course of the preparation of their respective audit reports.

  • Notes to Consolidated Financial Statements

  • Notes to Non-Consolidated Financial Statements

• Please be advised that in the event of any revisions to the Reference Documents for the General Meeting of Shareholders, Business Report, Consolidated Financial Statements or Non-Consolidated Financial Statements, the Company will post the contents of modification on the Company's website below.

• The Company will inform you of the results of resolutions of the Meeting by posting the matter on the Company's website below.

The Company's website: http://www.jafco.co.jp/english/ir/shareholder/meeting/

Reference Documents for the General Meeting of Shareholders Proposal: Election of Five (5) Directors (Excluding Directors Serving as Board-Audit Committee Members)

The terms of office of all five (5) directors (excluding directors serving as board-audit committee members; the same applies hereafter in this Proposal) will expire at the conclusion of the Meeting. Accordingly, the Company proposes to elect five (5) directors.

With regard to the election of directors, the summary of opinions of the Board-Audit Committee is as follows.

The Board-Audit Committee discussed the election of directors following the exchange of opinions with the representative director with regard to oversight, execution and future focus of Board of Directors, the status of performance of duties by director candidates, etc. As a result, the committee reached a conclusion that it has no objection to the nomination of director candidates in this proposal after taking into account the composition of the Board of Directors and expertise, experience and track record of each candidate.

The Board-Audit Committee has also expressed an opinion regarding the remuneration of Directors as follows.

The Board-Audit Committee discussed the remuneration of Directors who execute business of the Company following the exchange of opinions with the representative director. As a result, the Committee has judged the remuneration is appropriate after taking into account fairness in remuneration, balance between remuneration levels and duties/ responsibilities of Directors, and its links to the Company's business performance.

The candidates for director are as follows:

No.	Name (Date of birth)	Career summary, position and responsibilities at the Company, and significant concurrent positions outside the Company	Number of the Company's shares owned
1	Shinichi Fuki (November 1, 1961)	April 1985 Joined JAFCO June 2003 Director in charge of Investment Group II, Kansai Branch and Planning & Administration, JAFCO February 2005 Managing Director in charge of Finance, Investment Group II, Kansai Branch and VA Department III, JAFCO March 2007 Executive Managing Director in charge of Finance, Structured Investment, Kansai Branch and VA Department III, JAFCO January 2010 President & CEO (Representative Director), JAFCO (Present)	11,666 shares
	Number of attendance at the Board of Directors meetings: 17 out of 17 meetings Reason for nomination as candidate for director Since joining JAFCO, Shinichi Fuki has constantly been involved in private equity investment, and responsible for the Company's entire operations, including investment and fund management. Since assuming the office as president and CEO in January 2010, he has enhanced the Board of Directors' effective decision- making and supervisory function by capitalizing on his extensive experience and deep insight. Based on his track record, the Board of Directors deemed it appropriate that he continues to execute and supervise business activities as a director of the Company.