Corporate Data

11-Year Highlights (Consolidated)(Millions of yen)
FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Operating revenue

17,675

19,566

20,30022,03523,06626,33324,321

29,10130,92430,13842,518Operating profit

1,787

2,568

3,025

2,558

2,802

3,881

3,981

4,129

4,777

6,235

6,354

Ordinary profit

2,557

3,119

4,230

3,349

3,611

4,685

5,046

4,894

5,558

7,164

7,601

Profit attributable to owners of parent

1,777

6,211

3,520

2,645

3,078

4,225

3,765

3,556

3,971

5,174

5,966

Comprehensive income

4,257

6,978

8,079

8,410

(469)

6,819

935

(11,571)

10,499

7,889

3,491

Net assets

118,590

135,227

137,145

142,030

139,712

143,811140,793

126,687

135,166

137,996

135,728

Total assets

3,433,456

3,914,388

3,482,601

3,249,170

4,645,051

4,960,161

5,291,372

9,814,494

12,136,229

14,168,656

14,056,217

Net assets per share (Yen)1

1,274.67

1,260.43

1,373.93

1,467.01

1,452.63

1,518.77

1,519.30

1,381.22

1,473.24

1,545.03

1,574.64

Profit per share (Yen)1

19.10

60.35

33.94

26.90

31.90

44.24

40.02

38.47

43.28

56.61

67.76

Capital adequacy ratio (%)2

641.9

459.1

405.5

344.6

444.4

471.0

408.5

332.2

507.5

348.1

496.1

Return on equity (%)

1.52

4.89

2.59

1.90

2.19

2.98

2.65

2.66

3.03

3.79

4.36

Price-earnings ratio (Times)

37.89

9.91

22.36

16.80

18.55

14.75

14.58

12.81

18.43

16.27

15.01

Cash flows from operating activities

106,689(27,055)(58,989)

247,148

818,189(290,514)

226,351

275,039

164,459(122,304)

303,546

Cash flows from investing activities(1,230)(1,078)(1,085)(9,959)(7,507)(4,440)(8,652)(4,794)

2,230

4,907

3,447

Cash flows from financing activities(1,310)(1,610)(6,207)(3,604)(1,902)(2,725)(3,970)(2,557)(2,031)(5,088)(5,786)114,258

93,06926,787260,371

1,069,150

771,469

985,197

1,252,884

1,417,543

1,295,058

1,596,264

73.3

23.2

44.2

59.5

56.4

58.8

55.0

57.2

60.1

53.0

47.2

258 [2]295 [3]289 [3]282 [5]281 [5]281 [6]281 [3]272 [3]272 [4]264 [5]268 [5]

Cash and cash equivalents at end of year
Dividend payout ratio (%)
Number of employees [Average number of
temporary workers] (Number)

1. In calculating net assets per share, Company shares held by the Board Benefit Trust (BBT) are included in the treasury stock deducted from the total number ofshares issued and outstanding at the end of the fiscal year. These shares are also included in treasury shares deducted when calculating the average number ofshares during the term when calculating profit per share.
2. The capital adequacy ratio (based on FIEA) is calculated for Japan Securities Finance Co., Ltd. only.

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Corporate Data

Financial Section

Consolidated Financial Statements ���������������������������������������������������������������������������������������������������������������� 68

Disclaimer: This document is a translation of the Japanese original and is an excerpt of the section on
consolidated financial statements. The Japanese original has been disclosed in Japan in accordance with
the Japanese accounting standards and the Financial Instruments and Exchange Act. This document does
not contain or constitute any guarantee and the Company will not compensate any losses and/or damage
stemming from actions taken based on this document. In the event of any discrepancy between theJapanese original and this document, the Japanese original shall prevail.

JAPAN SECURITIES FINANCE CO., LTD. AND CONSOLIDATED SUBSIDIARIES

Consolidated Balance Sheets ������������������������������������������������������������������������������������������������������������������� 68

Consolidated Financial Statements

Consolidated Statement of Income ��������������������������������������������������������������������������������������������������������� 70

March 31, 2023

Consolidated Statement of Comprehensive Income �������������������������������������������������������������������������������� 72
Consolidated Statement of Changes in Equity ���������������������������������������������������������������������������������������� 73
Consolidated Statement of Cash Flows ��������������������������������������������������������������������������������������������������� 76
Notes to Consolidated Financial Statements ������������������������������������������������������������������������������������������� 78
Independent Auditor’s Report ��������������������������������������������������������������������������������������������������������������������� 122

1. Preparation Policy of the Consolidated and Non-consolidated Financial Statements(1) The consolidated financial statements of the Company are prepared in accordance with the “Ordinanceon Terminology, Forms, and Preparation Methods of Consolidated Financial Statements” (Ordinance ofthe Ministry of Finance No. 28 of 1976).
(2) The non-consolidated financial statements of the Company are prepared in accordance with the“Ordinance on Terminology, Forms, and Preparation Methods of Financial Statements (Ordinance ofthe Ministry of Finance No. 59, of 1963).

2. Audit Certification

In accordance with the provisions of Article 193-2 (1) of the Financial Instruments and Exchange Act,the consolidated financial statements and the non-consolidated financial statements for the fiscal andbusiness year (from April 1, 2022 to March 31, 2023) were audited by Crowe Toyo & Co.

3. Special Effort to Ensure the Appropriateness of Consolidated Financial Statements, etc.

The Company is making special effort to ensure the appropriateness of the consolidated financial
statements. Specifically, the Company has been a member of the Financial Accounting Standards
Foundation and participated in training programs conducted by the organizations which determine
accounting standards in order to ensure that the content of accounting standards is properly understood andthat changes in accounting standards can be properly addressed.

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Corporate Data

1. Consolidated Financial Statements(1) Consolidated Financial Statements(i) Consolidated Balance Sheets
Millions of yen
2023
2022
ASSETS
Current assets
Cash and deposits *1
Securities *1,*5
Operating loans *1,*3
Securities purchased under resaleagreements¥

Cash collateral provided for securities
borrowed
Other *1
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land *7
Construction in progress
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities *1,*4,*5
Bad debts
Retirement benefit asset
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets

1,598,274
71,013
955,550¥

Thousands of
U.S. dollars(Note)
2023

1,299,070
109,724
891,485$ 12,018,912
534,019
7,185,670

3,561,406

3,928,146

26,781,518

6,669,821

6,499,422

50,156,574

405,951(165)
13,261,853

355,293(133)
13,083,009

3,052,727(1,244)
99,728,179

9,044(6,893)
2,150
1,280
(699)
580
3,264
1
5,997
916

9,039
(6,762)
2,276
1,478(1,268)
210
3,264
304
6,056
960

68,010(51,835)
16,174
9,625(5,260)4,365
24,551
7
45,0996,893

745,621
1,042,496
81
95
1,180
437
40,64835,696(81)(95)
787,450
1,078,629
794,364
1,085,646¥ 14,056,217 ¥ 14,168,656

5,607,018
610
8,873
305,676(610)
5,921,568
5,973,561$ 105,701,740

Note Method of translation of the financial statements is described in “(7) Financial Statement Translation” in “4. Significant
accounting principles”.

Millions of yen
2023
2022
LIABILITIESCurrent liabilities
Call money *1
Short-term borrowings *1
Current portion of long-term borrowings
Commercial papers
Securities sold under repurchaseagreements
Cash collateral received for securities lent
Income taxes payable
Provision for bonuses
Provision for bonuses for directors andother officers
Borrowed money from trust account
Other
Total current liabilities
Non-current liabilities
Long-term borrowings *1
Deferred tax liabilities
Deferred tax liabilities for land revaluation *7
Provision for share awards for directors andother officers
Retirement benefit liability
Asset retirement obligations
Derivatives liabilities
Other
Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-forsale securities
Deferred gains or losses on hedges
Revaluation reserve for land *7
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeTotal net assets
Total liabilities and net assets¥

2,190,400
92,0101,000
451,000¥

Thousands of
U.S. dollars(Note)
2023

1,858,400
239,210―496,000$ 16,471,649
691,908
7,519
3,391,487

4,781,801

5,544,898

35,958,799

5,073,776
750
495

4,706,496
879
466

38,154,429
5,640
3,723

107

106

806

871,335
219,774
13,682,448

1,031,412
137,585
14,015,456

6,552,376
1,652,685
102,891,027

232,700
2,196
74

4,000
3,011
74

1,749,887
16,519
557

240

228

1,805

217
56
2,013
542
238,040
13,920,489

213
55
7,054
563
15,202
14,030,659

1,633
425
15,142
4,076
1,790,047
104,681,074

10,0008,878
118,702(7,655)
129,925

10,0008,878
115,521(4,680)129,71975,19966,769892,631(57,566)
977,033(4,300)9,920(32,338)

9,782
168
152

(1,967)168
156

73,561
1,263
1,145

5,802

8,277

43,632

135,728
14,056,217

137,996
14,168,656

1,020,665
105,701,740

Note Method of translation of the financial statements is described in “(7) Financial Statement Translation” in “4. Significant
accounting principles”.

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Corporate Data(ii) Consolidated Statement of Income and Consolidated Statement of Comprehensive
IncomeConsolidated Statement of Income
Thousands of
U.S. dollars(Note)
2023

Millions of yen
2023
2022
Operating revenue
Interest on loans receivable¥
Interest income on securities purchased under resaleagreements
Interest income on cash collateral provided for
securities borrowed
Securities lending fees
Other operating revenue
Total operating revenue
Operating expenses
Interest expenses
Interest expenses on securities sold under
repurchase agreements
Securities borrowing fees
Other operating expenses
Total operating expenses
Operating gross profit
General and administrative expenses
Remuneration, salaries and allowances
Retirement benefit expenses
Provision for bonuses
Provision for bonuses for directors and otherofficers
Provision for share awards for directors and otherofficers
Depreciation
Provision of allowance for doubtful accounts
Reversal of allowance for doubtful accounts
Other
Total general and administrative expenses *1
Operating profit

70

Japan Securities Finance Co., Ltd.

¥

2,486

¥

2,708

$

18,70010,683

5,714

80,339

2,553

2,250

19,204

12,844
13,94942,5189,457
10,00630,13896,592
104,899
319,737

1,033

747

7,774

6,015

3,614

45,236

13,456
8,258
28,765
13,7539,357
2,814
16,533
13,604

101,195
62,106
216,312
103,425

2,897
169
495

3,008
248
466

21,787
1,270
3,723

107

106

806

49

36

368

682
17
―
2,981
7,398
6,354

1,195
―
(571)
2,876
7,368
6,235

5,128
133
―
22,41955,63747,787¥$

Thousands of
U.S. dollars(Note)
2023

Millions of yen
2023
2022
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using
equity method
Gain on investments in investment partnerships
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Commission for purchase of treasury shares
Loss on investments in money held in trust
Loss on investments in investment partnerships
Miscellaneous expenses
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sale of non-current assets *2
Gain on revision of retirement benefit plan
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets *3
Branch office relocation expenses
Total Extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent

¥

¥
¥

247
207

¥

294
186

1,859
1,561

523

446

3,938

156
122
1,257

―
31
959

1,173
924
9,457

0
8
―
2
0
10
7,601

0
6
14
4
4
29
7,164

0
63
―
15
2
81
57,162

―
671
671

40
―
40

―
5,050
5,050

―
―
―
8,273
1,965
340
2,306
5,966
―
5,966

41
16
58
7,147
2,071
(98)
1,972
5,174
―
5,174

―
―
―
62,212
14,784
2,559
17,34344,869―44,869¥¥$$Note Method of translation of the financial statements is described in “(7) Financial Statement Translation” in “4. Significant
accounting principles”.

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71

Corporate Data

Consolidated Statement of Comprehensive Income

Profit¥Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income *Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests¥(iii) Consolidated Statement of Changes in Equity

Millions of yen
2023
2022
5,966 ¥
5,174

Thousands of
U.S. dollars(Note)
2023$
44,869(14,213)
11,749(56)(12,534)
15,010206(106,888)
88,357
(424)

45

32

342

(2,474)
3,491 ¥

2,714
7,889

(18,611)26,257

$

¥

3,491

¥

7,889

$

26,257

¥

―

¥

―

$

―

Note Method of translation of the financial statements is described in “(7) Financial Statement Translation” in “4. Significant
accounting principles”.

Previous Fiscal Year (From April 1, 2021 to March 31, 2022)(Millions of yen)
Shareholders’ equity
Share capital
Balance at April 1,
2021
Cumulative effects ofaccounting changes
Restated balance atApril 1, 2021
Changes arising during
year¥

Capital surplus

10,000 ¥Retained earnings

8,878 ¥

Total shareholders’equityTreasury shares

113,133 ¥(2,407) ¥129,6040
10,0008,878

113,133

Cash dividends
Net income
attributable to ownersof parent
Purchase of treasury
share
Disposal of treasury
share
Net changes otherthan stockholders’equityTotal changes during
the year
Balance at March 31,
¥
2022

0
(2,407)

129,605(2,786)(2,786)

5,174

5,174

0

(2,301)(2,301)

28

28

114

―

0

2,387

(2,272)

10,000 ¥8,878 ¥

115,521 ¥(4,680) ¥129,719

Accumulated other comprehensive income

Balance at April 1,
2021
Cumulative effects ofaccounting changes
Restated balance atApril 1, 2021
Changes arising during
year

Valuationdifference on
Deferred gains oravailable-for-sale losses on hedges
securities¥

22,432 ¥Revaluation
reserve for land

(16,978) ¥Remeasurements Total accumulated
Total net assetsofotherdefined benefit
comprehensive
plansincome168 ¥(59) ¥

5,562 ¥

022,432(16,978)

168

(59)

5,562

135,167

Cash dividends
Net income
attributable to ownersof parent
Purchase of treasury
share
Disposal of treasury
share
Net changes otherthan stockholders’equityTotal changes during
the year
Balance at March 31,
¥
2022

72

Japan Securities Finance Co., Ltd.

(2,786)
5,174(2,301)
28(12,512)

15,010

―

216

2,714

2,714

(12,512)

15,010

―

216

2,714

2,829

(1,967) ¥

168 ¥

156 ¥

8,277 ¥

137,996

9,920 ¥

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Corporate Data

Current Fiscal Year (From April 1, 2022 to March 31, 2023)

Current Fiscal Year (From April 1, 2022 to March 31, 2023)(Millions of yen)(Thousands of U.S. dollars)

Shareholders’ equity
Share capital
Balance at April 1,
2022
Changes arising during
year¥

Capital surplus

10,000 ¥Retained earnings

8,878 ¥

Shareholders’ equity
Treasury shares

115,521 ¥Cash dividends

Total shareholders’equity(4,680) ¥(2,786)

Net income
attributable to ownersof parent
Purchase of treasury
share
Disposal of treasury
share
Net changes otherthan stockholders’equityTotal changes during
the year
Balance at March 31,¥
2023

129,719(2,786)

5,966

5,966
(3,000)(3,000)

26

26

206

―

―

3,180

(2,974)10,000 ¥8,878 ¥

118,702 ¥(7,655) ¥129,925

Share capital
Balance at April 1,
2022
Changes arising during
year$

Capital surplus

75,199 $Retained earnings

66,769 $868,712 $Cash dividends
Net income
attributable to ownersof parent
Purchase of treasury
share
Disposal of treasury
share
Cancellation oftreasury share
Net changes otherthan stockholders’equityTotal changes during
the year
Balance at March 31,$
2023

Treasury shares

Total shareholders’equity(35,198) $975,482(20,950)(20,950)

44,86944,869(22,566)(22,566)

198

198

―

―

23,919(22,368)

1,551

75,199 $66,769 $892,631 $(57,566) $977,033

Accumulated other comprehensive income

Balance at April 1,
2022
Changes arising during
year

Valuationdifference on
Deferred gains oravailable-for-sale losses on hedges
securities¥

9,920 ¥

Revaluation
reserve for land

(1,967) ¥Remeasurements Total accumulated
Total net assetsofotherdefined benefit
comprehensive
plansincome

168 ¥

156 ¥

8,277 ¥Cash dividends
Net income
attributable to ownersof parent
Purchase of treasury
share
Disposal of treasury
share
Net changes otherthan stockholders’equityTotal changes during
the year
Balance at March 31,¥
2023

Accumulated other comprehensive income

137,996(2,786)
5,966(3,000)26(14,220)

11,749―(4)(2,474)(2,474)(14,220)

11,749―(4)(2,474)(2,268)(4,300) ¥9,782 ¥

168 ¥

152 ¥

5,802 ¥

135,728

Balance at April 1,
2022
Changes arising during
year

Valuationdifference on
Deferred gains oravailable-for-sale losses on hedges
securities$

74,598 $Revaluation
reserve for land

(14,795) $Remeasurements Total accumulated
Total net assetsofotherdefined benefit
comprehensive
plansincome1,263 $

1,177 $

62,243 $Cash dividends
Net income
attributable to ownersof parent
Purchase of treasury
share
Disposal of treasury
share
Cancellation oftreasury share
Net changes otherthan stockholders’equityTotal changes during
the year
Balance at March 31,$
2023

1,037,726(20,950)
44,869(22,566)
198(106,937)

88,357―(32)(18,611)(18,611)(106,937)

88,357―(32)(18,611)(17,060)(32,338) $73,561 $1,263 $

1,145 $

43,632 $1,020,665

Note Method of translation of the financial statements is described in “(7) Financial Statement Translation” in “4. Significant
accounting principles”.

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Corporate Data(iv) Consolidated Statement of Cash Flows
Thousands of
U.S. dollars(Note)
2023

Millions of yen
2023
2022
Cash flows from operating activities
Profit before income taxes¥
Depreciation
Loss (gain) on sale and retirement of non-current
assetsLoss (gain) related to securities
Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for bonuses for
directors and other officers
Increase (decrease) in provision for share awards
for directors and other officers
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using
equity method
Decrease (increase) in operating loans receivable
Net decrease (increase) in call loans
Net decrease (increase) in securities purchased
under resale agreements
Net decrease (increase) in cash collateral provided
for securities borrowed
Net increase (decrease) in call money
Net increase (decrease) in short-term borrowings
Net increase (decrease) in commercial papers
Net increase (decrease) in securities sold under
repurchase agreements
Net increase (decrease) in cash collateral received
for securities lent
Net increase (decrease) in cash collateral received
for margin transactions
Net increase (decrease) in borrowed money fromtrust accountNet increase (decrease) in long-term borrowings
Purchase of short-term and long-term investment
securities
Proceeds from sale and redemption of short-termand long-term investment securities
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Income taxes refund
Net cash provided by (used in) operating activities ¥76

Japan Securities Finance Co., Ltd.

8,273
682

¥

7,147
1,195

$

62,212
5,128

5

(17)

45

1,530

251

11,512

17

(571)

130

28

7

212

0

(11)

2

11

(3)

85

(739)
(20,347)
7,049

(346)
(15,866)
4,361(5,560)(153,009)
53,011

(523)

(446)

(3,938)(64,064)―

224,8672,500(481,761)―

366,739(926,289)

2,757,857(170,398)(1,173,851)(1,281,387)

332,000(147,200)(45,000)

151,800
101,616(117,000)

2,496,616(1,106,933)(338,396)(763,097)

1,353,090(5,738,439)

367,279

677,793

2,761,912(19,829)(15,407)(149,116)(160,077)(112,050)(1,203,768)

229,700

1,000

1,727,327(228,058)(466,887)(1,714,980)

539,458

267,505

4,056,688

62,003
295,443
21,016(6,999)(11,911)
5,995
303,546 ¥(93,766)(129,379)
15,362(4,171)(8,191)
4,074(122,304)

466,2632,221,716
158,043(52,631)(89,570)
45,0862,282,644$

Thousands of
U.S. dollars(Note)
2023

Millions of yen
2023
2022
Cash flows from investing activities
Purchase of investment securities
Proceeds from sale and redemption of investment
securities
Purchase of property, plant and equipment
Proceeds from sale of property, plant andequipment
Purchase of intangible assets
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Dividends paid
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period *¥(317) ¥

(645)

(2,385)

4,402

6,296

33,103

(353)

(641)

(2,656)

―

48

―

(285)
1
3,447

(153)
2
4,907

(2,144)925,926(2,786)(3,000)―(5,786)(2,786)(2,301)0(5,088)(20,950)(22,566)―(43,516)―――

301,206
1,295,058
1,596,264(122,485)
1,417,543
1,295,058

2,265,053
9,738,743
12,003,797

Note Method of translation of the financial statements is described in “(7) Financial Statement Translation” in “4. Significant
accounting principles”.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 10 -$- 11 -

Integrated Report 2023

77

Corporate Data

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

(Basis of Presentation of the Consolidated Financial Statements)(iii) Provision for bonuses for directors and other officers
Provision for bonuses for directors and other officers is measured based on estimated amount of
payment for directors (including executive officers) bonuses.
(iv) Provision for share awards for directors and other officers
Provision for share awards for directors and other officers is measured based on estimated amountof stock benefit obligation as of the end of the current fiscal year based on internal regulations forthe payment of the Company’s stock.

2. Application of the equity method
Number of affiliates accounted for by the equity method: 2 companies
Name of the companies
Japan Information Processing Service Co., Ltd.
JSF Information Technology Co., Ltd.

(4) Accounting treatment for retirement benefits(i) The method of attributing expected retirement benefit
For calculating benefit obligation, the method of attributing expected retirement benefit to periods
up to the end of current fiscal year is the benefit formula basis.
(ii) The method of amortizing actuarial gains and losses, and past service costs
Actuarial gains and losses are amortized using the declining balance method within over averageremaining years of service of the employees (15 years) from the following year in which the gains
or losses are recognized.
Past service costs are recorded as expenses at the year in which the costs are recognized.
Consolidated subsidiaries apply a simplified method to calculate liabilities for retirement benefits
and retirement benefit expenses, using required payment assuming retirement for personal reason at
the end of the fiscal year as retirement benefit obligation.

1. Scope of consolidation
Number of consolidated subsidiaries: 2 companies
All two subsidiaries are consolidated.
Names of consolidated subsidiaries
JSF Trust and Banking Co., Ltd.
Nihon Building Co., Ltd.

3. Accounting periods of consolidated subsidiaries
The fiscal year end of consolidated subsidiaries is the same as the consolidated fiscal year end.
4. Significant accounting principles(1) Valuation standards and methodology for material assets(i) Securities
Available-for-sale-securities:
Securities other than for which there are no fair value:
Stated at fair value based on the quoted market price at the fiscal year end (with any unrealized
gains or losses being reported directly as a component of shareholders’ equity and the cost of any
securities sold being computed by the moving average method)
Securities for which there are no fair value:
Stated at cost determined by the moving average method(ii) Derivatives
Stated at fair value(2) Depreciation and amortization methods for material depreciable assets(i) Property, plant and equipment
The Company and its subsidiaries provided depreciation principally by the declining-balancemethod based on the estimated useful lives, except for the buildings acquired on or after April 1,
1998 and the equipment attached to buildings and structures acquired on or after April 1, 2016, which
are depreciated based on the straight-line method.
The estimated useful lives are as follows:
Buildings and structures 3-50 years(ii) Intangible assets
Straight-line method is applied.
Software for internal use is amortized by the straight-line method over the estimated useful life (5to 7 years).
(3) Basis of material allowances(i) Allowance for doubtful accounts
Allowance for doubtful accounts is measured at estimated recoverable amounts. For general
receivables, the recoverable amounts are estimated by historical write-off ratio and for individual
receivables such as receivables with default risk, the recoverable amounts are estimated individual
basis.
(ii) Provision for bonuses
Provision for bonuses is measured based on estimated amount of payment for employee bonuses.

78

Notes to Consolidated Financial Statements

Japan Securities Finance Co., Ltd.

(5) Significant method of hedge accounting(i) Hedge accounting
In principle, deferral hedge accounting is applied. For Interest rate swaps, if they satisfy therequirements for treatment that incorporates swaps into underlying accounting items, they areaccounted for by incorporating swaps into underlying accounting items.
(ii) Hedge methods and hedged items
Hedge methods Interest rate swaps, foreign exchange contracts, etc.
Hedged items
Securities, investment securities, borrowings, etc.
(iii) Hedge policy
In accordance with the Group's internal rules for risk management, Hedging is used to hedge
against the risk of future fluctuations in interest rates and foreign currency exchange rates, etc.
(iv) Evaluation of hedge effectiveness
The Group compares market fluctuations of hedged items with those of hedge methos andevaluates the effectiveness of hedge based on the amount of fluctuation of both. However, for interest
rate swaps which incorporating swaps into underlying accounting items, the evaluation of theeffectiveness of hedge is omitted.
(Hedge relationships to which "Practical Solution on the Treatment of Hedge Accounting for
Financial Instruments that Reference LIBOR" is applied)
Among the above hedge relationships, the exceptional treatment prescribed in the PITF is applied
to all hedge relationships included in the scope of application of "Practical Solution on the Treatment
of Hedge Accounting for Financial Instruments that Reference LIBOR" (PITF No. 40, March 17,2023). The details of hedging relationships to which the PITF is applied are as follows.
Hedge accounting

Deferral hedge accounting and for interest rate swaps, accounting for byincorporating swaps into underlying accounting items
Hedge methods
Interest rate swaps
Hedged items
Securities, investment securities, borrowings, etc.
Hedging transactions Offsetting market fluctuations or fixing cash flows(6) Cash and cash equivalents in the consolidated statements of cash flows
Cash and cash equivalents as stated in the consolidated statements of cash flows consist of cash in
hand, readily available deposits, and any short-term liquid investments with a maturity not exceeding
three months at the time of purchase whose value is not subject to significant fluctuation risk.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 12 -- 13 -

Integrated Report 2023

79

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

(7) Financial Statement Translation
The translations of the yen amounts into U.S. dollars are included solely for the convenience of thereader, using the prevailing exchange rate as of March 31, 2023, which was ¥132.98 to U.S. $1. Thistranslation should not be construed as a representation that the amounts shown could be converted into
U.S. dollars at such rate.
(Significant Accounting Estimates)
Recoverability of deferred tax assets(1) Deferred tax assets and liabilities in the accompanying consolidated balance sheet as of March 31,
2023 are as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities (Net)¥¥13,80916,006
2,196¥¥

16,595
19,607
3,011$$

103,846
120,366
16,519(2) Information on the nature of significant accounting estimates for identified items
Deferred tax assets before offsetting with deferred tax liabilities are estimated based on the timing
and amount of reversal of future deductible temporary difference in future consolidated financial year.
These estimates may be affected by changes in uncertain economic conditions in the future, and if theactual timing and amount of the reversal of temporary differences differ from the estimates, it may havea significant impact on the amount of deferred tax assets in the consolidated financial statements for thefollowing fiscal year.
(Changes in Accounting Policies)(Application of “Implementation Guidance on Accounting Standards for Fair Value Measurement”)“Implementation Guidance on Accounting Standard for Fair Value Measurement”（ASBJ Guidance
No. 31, June 17, 2021. Hereinafter referred to as the “Implementation Guidance”) have been applied fromthe beginning of the year ended March 31, 2023, and in accordance with the transitional treatment stipulated
in paragraph 27-2 of the Implementation Guidance, the new accounting policy stipulated by the
Implementation Guidance will be prospectively applied.
As a result, investment securities, deferred tax liabilities, and valuation difference on available-for-salesecurities increased by ¥2,623 million ($19,729 thousand), ¥809 million ($6,087 thousand), and ¥1,814
million ($13,641 thousand), respectively, in the consolidated balance sheets for the current fiscal year.
In accordance with Paragraph 27-3 of the Implementation Guidance, in the note "Financial Instruments"
the items regarding investment trusts with regard to the breakdown of the fair value of financial instruments
by level, etc., are not presented those for the previous fiscal year.
(Accounting Standards Not Yet Adopted)“Accounting Standard for Current Income Taxes" (ASBJ Statement No. 27, October 28, 2022)“Accounting Standard for Presentation of Comprehensive Income" (ASBJ Statement No. 25, October 28,
2022)"Guidance on Accounting Standard for Tax Effect Accounting" (ASBJ Guidance No. 28, October 28, 2022,
ASBJ)

80

Japan Securities Finance Co., Ltd.

(1) Overview
In February 2018, ASBJ issued ASBJ Statement No. 28, "Partial Amendments to Accounting Standard
for Tax Effect Accounting", etc. (Hereinafter referred to as the "ASBJ Statement No. 28, etc."), which
completed the transfer of practical guidelines on tax effect accounting at the JICPA to the ASBJ
Accounting Standards Board. In the course of deliberation, the following two issues, which were to bereviewed again after the release of ASBJ Statement No. 28, etc., were discussed and published.
(i) Accounting section of tax expenses (taxation on other comprehensive income)(ii) Tax effect on the sale of shares of subsidiaries, etc., (shares of subsidiaries or affiliates) when thegroup corporate taxation system is applied(2) Scheduled date of adoption
This accounting standard will be applied from the beginning of the fiscal year ending March 31, 2025.
(3) Effect of adoption
The amounts of the impact of applying “Accounting Standard for Current Income Taxes”, etc., areunder evaluation at this time.
(Reclassification)(Consolidated Balance Sheets)“Accounts payable-other" under "Current liabilities," which was independently presented in the previous
fiscal year, is included in "Other" in the current consolidated fiscal year because it has become insignificant
in terms of amount. To reflect this change in presentation, the consolidated financial statements for theprevious fiscal year have been reclassified.
As a result, ¥128 million ($963 thousand) presented as “Accounts payable-other” under “Current
liabilities” in the consolidated balance sheet for the previous fiscal year has been reclassified as “Other.”(Additional Information)(Transactions of Delivering the Company’s Own Stock to Directors through Trust)
The Company has introduced a performance-based share remuneration plan called “Board Benefit Trust(BBT)” in order to further clarify the linkage between remuneration for directors (other than outside directors)
and executive officers (collectively “directors”) and the performance and share value of the Company,
thereby enhancing their awareness of the need to contribute to the efforts to archive improved businessperformance and greater enterprise value in the medium to long term.
1. Outline of the plan
The Plan is a performance-based share remuneration plan under which the Company’s shares will beacquired through a trust using money contributed by the Company and the Company’s shares and themoney equivalent to the market value of the shares will be delivered by the Trust to directors pursuant to
the “Rules for Delivery of Shares to Directors” to be established by the board of directors.
In principle, the Shares, etc. will be delivered when he/she resigns as director.
2. Stock remaining in the trust
In accordance with the “Practical Solution on Transactions of delivering the Company’s Own Stockto Employees etc. through Trust (ASBJ Practical Issue Task Force (PITF) No. 30, March 26, 2015)”, theCompany recorded assets and liabilities of the trust on the Company’s balance sheet as assets andliabilities of the Company. The Company recorded own stocks in the trust as treasury stocks under net
assets at book value in the trust excluding associated costs. The book value of the own stocks was ¥484
million ($3,646 thousand) and the number of the stocks was 1,022 thousand shares as of March 31, 2023,
and ¥511 million and the number of the stocks was 1,077 thousand shares as of March 31, 2022.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 14 -- 15 -

Integrated Report 2023

81

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Notes to the Consolidated Balance Sheets)*1 Assets pledges as collateral and secured debt
Assets pledged as collateral are as follows:*4 Items related to affiliated companies are as follows:

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Securities
Operating loans
Investment securities¥

65,607502,453
293,024¥

86,459526,090
370,156$

The above assets are pledged as collateral for the following obligations:Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Call money
Short-term borrowings
Long-term borrowings¥

280,000¥

250,000
137,200―

229,700

493,362
3,778,410
2,203,521$

2,105,579―

1,727,327―

For call money, short-term borrowings and long-term borrowings, in addition to the assets pledged ascollateral above, a portion of the collateral according to 2 and 6 below is also pledged.
In addition, the following items are pledged as collateral for the clearing funds of Japan Securities
Clearing Corporation and JASDEC DVP Clearing Corporation.
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Cash and deposits
Current assets (other)
Investment securities¥

25
378,375
5,875

¥

25
230,004
1,222$

2 Collateralized financial assets with rights of free disposal are as follows:

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Fair value of the securities receivable as
collateral
Securities lentCollateral provided
On hand¥2,904,598
147,985
682,5092,074,103¥

2,519,083
182,137
358,707
1,978,237

187
2,845,359
44,183$Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Investment securities (stocks)

¥

5,060

¥

4,595

$

38,056*5 Balance sheet amount of securities lent under loan for consumption agreement, etc. are as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Securities
Investment securities

¥

2,007
180,608¥

8,764
424,126$

15,094
1,358,160

6 The fair value of the securities borrowed under loan for consumption agreement, etc. are as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
The fair value of the securities borrowed
Securities loaned
Securities pledged as collateral
On hand¥ 10,287,704
9,613,304
641,815
32,584¥

10,092,917
9,565,616
478,582
48,717$77,362,795
72,291,352
4,826,408
245,034*7 The Company revaluated its land at fair value, pursuant to the Law Concerning Land Revaluation (Law
No.34 March 31, 1998) and its amendments (Law No.19 March 31, 2001) (the “Law”), and for net
unrealized gain, tax equivalent is presented as “Deferred tax liabilities for land revaluation” under
LIABILITIES and the amounts net of the tax equivalent is presented as “Revaluation reserve for land”
under NET ASSETS.
Date of revaluation: March 31, 2002
Revaluation method to be prescribed on Article3, paragraph3 of the Law Concerning Land Revaluation:
The revaluation is calculated by making reasonable adjustments to the value calculated by the method
specified and announced by the Commissioner of the National Tax Agency for calculating the value ofland as the basis for calculating the taxable value of land as stipulated in Article 16 of the Land Value
Tax Law based on Article 2, clause 4 of the Enforcement Order for the Law Concerning Revaluation ofLand (Ordinance No. 119 March 31, 1998).

21,842,371
1,112,838
5,132,424
15,597,108*3 Credit line for financial instruments dealers and customers, and undrawn amount related to overdraft
agreements, of the Company and JSF Trust and Banking Co., Ltd. are as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Total credit line¥
956,058¥
957,858$
7,189,487
Drawn amount
97,30063,680731,688
Undrawn amount¥
858,758¥
894,178$
6,457,798
Since some of these contracts expire without the rights exercised, the undrawn amount itself does notnecessarily affect future cash flows.

82

Japan Securities Finance Co., Ltd.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 16 -- 17 -

Integrated Report 2023

83

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Notes to the Consolidated Statements of Income)*1 Research and development expenses included in general and administrative expenses and manufacturingcosts for the year are as follows:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023

(Notes to the Consolidated Statements of Comprehensive Income)*1 Reclassification adjustments and tax effects related to other comprehensive income

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

¥

0

¥

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

40$

*2 Breakdown of gain on sale of non-current assets are as follows:

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Tools, furniture and fixtures

¥

―

¥

40

$

*3 Breakdown of loss on retirement of non-current assets are as follows:

84

Japan Securities Finance Co., Ltd.

¥

―
―

¥

2
39

―

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Buildings and structures
Demolition and removal expenses

0

$

―
―

Valuation difference on available-for-salesecurities:
Arising during the year
Reclassification adjustment
Before tax effect adjustment
Tax effect
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges:
Arising during the year
Reclassification adjustment
Before tax effect adjustment
Tax effect
Deferred gains or losses on hedges
Remeasurements of defined benefit plans:Arising during the year
Reclassification adjustment
Before tax effect adjustment
Tax effectRemeasurements of defined benefit plans
Share of other comprehensive income ofentities accounted for using equity method:
Arising during the year
Reclassification adjustment
Share of other comprehensive income ofentities accounted for using equity method
Total other comprehensive income¥¥

Integrated Report 2023

(22,004)
1,530(20,473)
6,260¥(18,641)251(18,390)
5,855- 19 -$(165,475)
11,512(153,962)
47,074(14,213)(12,534)(106,888)

16,935―
16,935(5,185)
11,74915,362―
15,362(352)
15,010127,353―
127,353(38,995)
88,357

(93)
(43)
(137)
81
(56)

319
1
321
(115)
206

(703)
(330)
(1,034)
610
(424)

38
6

25
6

290
51

45
(2,474)

32
2,714

342
(18,611)¥

Japan Securities Finance Co., Ltd.
- 18 -

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022

$

Integrated Report 2023

85

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Notes to the Consolidated Statements of Changes in Net Assets)
Previous fiscal year (From April 1, 2021 to March 31, 2022)
1 Type and number of issued shares and treasury shares

Current fiscal year (From April 1, 2022 to March 31, 2023)
1 Type and number of issued shares and treasury shares

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Type of share

Number of shares at the
beginning of the year

Increase

Decrease

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

(Thousands of shares)
Number of shares at theend of the year

Shares outstanding
96,000――96,000Common stock
Treasury shares
4,252
2,490
59
6,683
Common stock (Note)
Notes:
1 Number of shares include shares which are held by the “Board Benefit Trust (BBT)” (1,137 thousands of shares at the
beginning of the fiscal year and 1,077 thousands of shares at the end of the fiscal year)
2 Increase of 2,489 thousands of shares is due to purchase of treasury shares and 1 thousands of shares is due to purchase ofshares less than one unit.
3 Decrease of 59 thousands of shares is due to delivery of treasury shares from the “Board Benefit Trust (BBT)” to respective
person and 0 thousands of shares is due to sale of treasury shares less than one unit.

2 Stock acquisition rights, etc.
No items to report.
3 Dividends(1) Dividends paid(a) Dividends paid during the year ended March 31, 2022
The following was approved by the Board of Directors held on May 17, 2021.
(a)
Total dividends¥1,393 million(b)Cash dividends per common share¥15(c)Record date
March 31, 2021(d)
Effective dateJune 3, 2021
Note

Total dividends include dividends of ¥17 million to shares which are owned by “Board Benefit Trust (BBT)”The following was approved by the Board of Directors held on November 2, 2021.
(a)
Total dividends¥1,393 million(b)Cash dividends per common share¥15(c)Record date
September 30, 2021(d)
Effective date
December 3, 2021

Note

Total dividends include dividends of ¥16 million to shares which are owned by “Board Benefit Trust (BBT)”(2) Dividends to be paid after the balance sheet date but the record date for the payment belongs to the year
ended March 31, 2022
The following was approved by the Board of Directors held on May 16, 2022.
(a)
Total dividends¥1,356 million(b)Cash dividends per common share¥15(c)Record date
March 31, 2022(d)
Effective dateJune 2, 2022
Note

Total dividends include dividends of ¥16 million to shares which are owned by “Board Benefit Trust (BBT)”

Type of share

Japan Securities Finance Co., Ltd.

(Thousands of shares)

Increase

Decrease

Number of shares at theend of the year

Shares outstanding
96,000――96,000Common stock
Treasury shares
6,683
3,175
55
9,803
Common stock (Note)
Notes:
1 Number of shares include shares which are held by the “Board Benefit Trust (BBT)” (1,077 thousands of shares at the
beginning of the fiscal year and 1,022 thousands of shares at the end of the fiscal year)
2 Increase of 3,174 thousands of shares is due to purchase of treasury shares and 0 thousands of shares is due to purchase ofshares less than one unit.
3 Decrease of 55 thousands of shares is due to delivery of treasury shares from the “Board Benefit Trust (BBT)” to respective
person.
4 The Company resolved at the Board of Directors meeting held on March 20, 2023 to cancel treasury stock in accordancewith Article 178 of the Companies Act, but has not completed the cancellation procedures for the following treasury stock
as of the end of the current fiscal year.
Book value¥6,532 million ($49,126 thousand)Type of share
Common stock
Number of share 8,000 thousands of shares
The cancellation procedures for the above treasury stock was completed on April 20, 2023.

2 Stock acquisition rights, etc.
No items to report.
3 Dividends(1) Dividends paid(a) Dividends paid during the year ended March 31, 2023
The following was approved by the Board of Directors held on May 16, 2022.
(a)
Total dividends¥1,356 million ($10,197 thousand)(b)
Cash dividends per common share¥15 ($ 0.11)(c)
Record date
March 31, 2022(d)
Effective dateJune 2, 2022
Note

Total dividends include dividends of ¥16 million ($123 thousand) to shares which are owned by “Board Benefit Trust(BBT)”

The following was approved by the Board of Directors held on November 7, 2022.
(a)
Total dividends¥1,429 million ($10,752 thousand)(b)
Cash dividends per common share¥16 ($0.12)(c)
Record date
September 30, 2022(d)
Effective date
December 7, 2022

Note

Total dividends include dividends of ¥16 million ($123 thousand) to shares which are owned by “Board Benefit Trust(BBT)”(2) Dividends to be paid after the balance sheet date but the record date for the payment belongs to the year
ended March 31, 2023
The following was approved by the Board of Directors held on May 15, 2023.
(a)
Total dividends¥1,395 million ($10,495 thousand)(b)
Cash dividends per common share¥16 ($0.12)(c)
Record date
March 31, 2023(d)
Effective dateJune 1, 2023
Note

86

Number of shares at the
beginning of the year

Total dividends include dividends of ¥16 million ($123 thousand) to shares which are owned by “Board Benefit Trust(BBT)”

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 20 -- 21 -

Integrated Report 2023

87

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Note to the Consolidated Statements of Cash Flows)
The reconciliation between year-end balance of cash and cash equivalents and amounts stated in the
consolidated balance sheets(Financial Instruments)
1. Conditions of Financial instruments(1) Management policy
The Company and a consolidated subsidiary, JSF Trust and Banking Co., Ltd. (“JSFTB”) mainly deal infinancial instruments. The Company is engaged in providing loan services, mainly loans for margintransactions. The loans for margin transaction are loan services which are money lending or stock loan forsettlement of standardized margin transactions. The transaction is strongly effected by security market
condition, therefore, the Company raises money flexibly from short-term finance market, primarily from callmarket. The Company manages securities such as Japanese Government Bonds to manage the funds
efficiently.
A consolidated subsidiary, JSFTB is engaged in providing credit services such as loans as banking
business and finance and securities activities. JSFTB invests in highly liquid and safe-and-secure securities
such as government bonds, local government bonds, public corporation bonds and government-backed bonds
as securities investment activities and usually raises money through a trust account.

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Cash and deposits¥
Time deposits with maturities of over threemonthsCertificate of deposits with maturities of overthree months¥
Cash and cash equivalents

1,598,274¥(10)(2,000)1,596,264

1,299,070

$

(10)
¥

(4,002)
1,295,058

12,018,912(75)$(15,039)
12,003,797(2) Financial instruments and risks
Main financial instrument that the Company holds are trade loans receivable, collateral money forsecurities borrowed, short-term investments and investments in securities such as government bonds andequity securities. Collateral money for securities borrowed is the collateral for cash-secured bond lendingtransaction, cash-secured stock lending transaction and securities borrowed of loan on margin transactions.
Main financial instrument that JSFTB holds are loans to government, other credit granting and securities
such as government bonds, local government bonds, public corporation bonds and government-backed
bonds. Trade loans receivable held by the Company and JSFTB are exposed to credit risks that caused fromcounterparties’ default of contract. Securities are exposed to market risks. Regarding raising money such as
call money and short-term borrowings of the Company and JSFTB, the liabilities are exposed to liquidity
risks that caused from turmoil in the financial markets or a credit rating down.
The Company has entered into forward exchange contract for hedging currency exchange risk of bonds
denominated in foreign currency and interest rate swaps for hedging interest rate risk of fixed-rate bonds.
Hedge accounting is applied to the derivatives and the Company regularly monitors the hedge effectiveness
whether the relationship between hedging derivatives and hedged assets are appropriate and the currency
exchange risk and the interest rate risk of hedged items are offset by hedging derivatives.
JSFTB has entered into interest rate swaps for hedging fixed-rate loans, bonds and borrowings as a partof interest risk control (ALM). Hedge accounting is applied to the derivatives held for ALM purpose, andthe Company regularly monitors the hedge effectiveness whether the relationship between hedging
derivatives and hedged assets or liabilities are appropriate.
(3) Financial instruments risk management
The Company places risk management as top priority of management. Basic policy of risk management
is approved at the Board of Directors, and various rules for risk management according to the basic policy
are established for concrete risk management method or system. The Company regularly receives a reportfrom JSFTB concerning its risk management.
(i) Integrated risk management
The Company quantizes the risk by Value at Risk (VaR) approach after allocating risk capital withinequity capital, and controls the quantized risk amount within the allocated risk capital. Each business
operation department controls a risk within the allocated risk capital, risk management department that is
independent from each operational section quantizes the risk, monitors the risk management and reports
to the management.
(ii) Credit risk
The Company manages all of the credit risk strictly to maintain and improve assets quality. The Risk
Management Department evaluates credit risks according to the in-house rating and quantizes andcontrols the credit risk using the default rate by each in-house rating category. Stress tests are also
performed for compensating the quantization control. The Risk Management Department evaluates
customers or loans, and sets up the credit limits, while business operation department monitors the credit
limit. Assets owned by business operation departments are assessed by themselves strictly. The Company
receives collateral securities for each loan and revaluates the securities daily to mitigate the collectability
88

Japan Securities Finance Co., Ltd.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 22 -- 23 -

Integrated Report 2023

89

Corporate Data

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023
issues, and the Company collects the claims quickly through sale of the collaterals when the customer
bankrupts.
(iii) Market risk
The Risk Management Department quantizes and controls market risks, and performs stress tests tocompensate the quantization control. Back-testing which is the test compared calculated VaR andestimated profit or loss by using the fixed portfolio is performed to test the reliability of the Company’smarket risk quantization model.
(iv) Quantitative information of market risk
The Company calculates VaR of short-term investments and investments in securities by using Deltamethod (confidence interval: 99%, holding period: 10-240 days, observation period: 20 days-1 year
(holding period and observation period are depending on purposes in holding)). Market risk amount(possible losses) of the Company is ¥6,220 million ($46,774 thousand) as of March 31, 2023.
Because VaR is a statistical estimate of market risk amount at a particular probability using past market
movement data, VaR may not capture the risk during radical market movements that are extreme in nature.
(v) Liquidity risk
The Treasury Department of the Company seeks to diversify financing channels and to secure stablefinancing sources. For sound cash flow management, the Company develops cash flow forecast,understands the amount can be raised or future liquidity and also understands dates of a large payment
concentration, the Company has a system to report to the management with daily cash flow status. The
Company tries to hold enough liquidity, for example, to possess a certain amount of government bonds,
makes a contingency plan and builds a company-wide emergency response system against contingencies.
Liquidity stress tests are performed monthly for ascertaining whether consolidated liquidity held by theCompany and JSFTB is adequate. At the “ALM Committee” held in every quarter, the Company develops
cash flow forecast based on estimates of loans outstanding, studies policies for ALM (Asset Liability
Management) such as revenue management for assets and liabilities of the Company and the Company
has a system to report to the management.
(vi) Subsidiary’s risk control system
JSFTB basic policy of risk management is approved at the Board of Directors, and various rules forrisk management according to the basic policy are established for concrete risk management method orsystem, and the Risk Management Department controls the risks totally. The Risk Management
Department measures and monitors the risk quantity, collects and analyzes information and reports therisk condition to the management for maintaining the proper risk management.
JSFTB calculates market risk amount for all market transactions. Interest rate risk amount which is amajor risk variable is calculated by VaR (Delta method; holding period: 1 year, confidence interval: 99%,
observation period: 5 years). JSFTB market risk amount is ¥5,228 million ($39,311 thousand) as ofMarch 31, 2023.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023
2. Fair value of financial instruments, etc.
Carrying amount in the consolidated balance sheets, fair values and differences are as follows:
Previous fiscal year (As of March 31, 2022)
Millions of yen
Carrying
Fair value
amountDifferences(1) Operating loans¥

891,485

Allowance for doubtful accounts *2(90)(2) Securities and investment securities *3
Held-to-maturity securities
Available-for-sale securities
Assets total¥

891,395¥

891,396

¥

1

¥

1,511
1,142,362
2,035,268¥

1,673
1,142,362
2,035,432

¥

162
―
164

Long-term borrowings
Liabilities total

¥
¥

4,000
4,000

¥
¥

3,998
3,998

¥
¥

(1)
(1)

Derivative transactions *4

¥

5,686

¥

5,686

¥

―

Notes:*1 Cash is omitted and deposits, call loans, securities purchased under resale agreements, cash collateral provided for securities
borrowed, call money, short-term borrowings, commercial papers, securities sold under repurchase agreements and cash
collateral received for securities lent are also omitted as most of these are settled in the short term and their fair value
approximates their carrying amount.
*2 General and specific allowance for operating loans is deducted.
*3 The following financial instruments with no market prices are not included in “(2) Securities and investment securities”.
Carrying amount of those financial instruments are as follows:
Millions of yen

Unlisted equity securities
Other securities
Investments in affiliates
Investments in investment limited partnership

¥

1,765
4,595
1,986

*4 Net receivables and payables, which were derived from derivative transactions, are presented in net amounts, and any item
for which the total becomes a net liability is indicated in parentheses.

(4) Supplemental explanation regarding fair value of financial instruments
The fair value might differ if different assumptions are used because to measure fair value of financial
instruments, variable factors are considered. In addition, the contract amounts of derivative transactions in
the Notes to “Derivative” are not in themselves indicative of the market risk associated with derivativetransactions.

90

Japan Securities Finance Co., Ltd.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 24 -- 25 -

Integrated Report 2023

91

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023
Current fiscal year (As of March 31, 2023)

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Millions of yen
Carrying
amount(1) Operating loans¥

Allowance for doubtful accounts *2

Fair value

Differences

955,550(121)¥

955,426¥

808,123
1,763,553

Long-term borrowings *4
Liabilities total¥¥

Derivative transactions *5¥(2) Securities and investment securities *3
Available-for-sale securities
Assets total¥

955,429¥(2)¥

808,123
1,763,550

¥

―
(2)

233,700
233,700¥¥

232,763
232,763

¥
¥

(936)
(936)

15,839¥15,839¥―Thousands of U.S. dollars
Carrying
amount(1) Operating loans$

Allowance for doubtful accounts *2

Fair value

Differences

7,185,670(910)$(2) Securities and investment securities *3
Available-for-sale securities
Assets total

7,184,760$

7,184,738$(22)

6,077,030$ 13,261,791

6,077,030$ 13,261,769

$

―
(22)

Long-term borrowings *4
Liabilities Total$$

1,757,407
1,757,407$$

1,750,363
1,750,363$$(7,043)(7,043)

Derivative transactions *5$

119,109$

119,109$―

Notes:*1 Cash is omitted and deposits, call loans, securities purchased under resale agreements, cash collateral provided for securities
borrowed, call money, short-term borrowings, commercial papers, securities sold under repurchase agreements and cash
collateral received for securities lent are also omitted as most of these are settled in the short term and their fair value
approximates their carrying amount.
*2 General and specific allowance for operating loans is deducted.
*3 The following financial instruments with no market prices are not included in “(2) Securities and investment securities”.
Carrying amount of those financial instruments are as follows:
Thousands ofMillions of yen
U.S. dollars
Unlisted equity securities
Other securities¥
1,786 $
13,436
Investments in affiliates
5,060
38,056
Investments in investment limited partnership
1,664
12,513*4 Current portion of long-term borrowings are included in long-term borrowings.
*5 Net receivables and payables, which were derived from derivative transactions, are presented in net amounts, and any item
for which the total becomes a net liability is indicated in parentheses.

92

Japan Securities Finance Co., Ltd.

Note 1. Projected future redemption of monetary claim and securities with maturities after the end of the
fiscal year
Previous fiscal year (As of March 31, 2022)
Millions of yen
Due after
Due after
one yearfive years
Due within
through fivethrough ten
Due after
one year
years
years
ten years
Cash and deposits
Operating loans
Securities purchased under resaleagreements
Cash collateral provided for
securities borrowed
Securities and investments securities
Held-to-maturity securities(Government bonds)
Available-for-sale securities withmaturities
Bond securities
1) Government bonds2) Corporate bonds3) Other
Total¥

1,299,070
870,912

¥

¥

―
656

―
―

―

―

―

6,349,422

150,000

―

―

―

―

―

1,500

6,000
100,319
3,326¥ 12,557,196

65,767
311,619
57,175604,477

51,40034,27539,709126,040

395,000―
29,511
426,011¥¥¥

1,598,274
930,245¥¥¥¥

Millions of yen
Due after
Due after
one yearfive years
through fivethrough ten
years
years

Due within
one year¥―
25,127¥―177

Due after
ten years¥――

3,561,406―――

6,469,821

200,000

―

―

7,400
58,4293,094¥ 12,628,671

54,767
277,965
40,964
598,824

37,0003,000
20,52960,707

266,500―
14,369280,869

Integrated Report 2023¥¥

Japan Securities Finance Co., Ltd.
- 26 -¥

3,928,146

Current fiscal year (As of March 31, 2023)

Cash and deposits
Operating loans
Securities purchased under resaleagreements
Cash collateral provided for
securities borrowed
Securities and investments securities
Available-for-sale securities withmaturities
Bond securities
1) Government bonds2) Corporate bonds3) Other
Total―
19,916- 27 -¥

Integrated Report 2023

93

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023$$

Current fiscal year (As of March 31, 2023)

Thousands of U.S. dollars
Due after
Due after
one yearfive years
through fivethrough ten
years
years

Due within
one year
Cash and deposits
Operating loans
Securities purchased under resaleagreements
Cash collateral provided for
securities borrowed
Securities and investments securities
Available-for-sale securities withmaturities
Bond securities
1) Government bonds2) Corporate bonds3) Other
Total

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

12,018,912 $
6,995,379―
188,957

$

―
1,333

Due after
ten years$――

26,781,518

―

―

―

48,652,589

1,503,985――

55,647439,381
23,271
94,966,700 $

411,843
2,090,276
308,053
4,503,117$

278,237
22,559154,382456,513

Due within
one yearCall money
Short-term borrowings
Commercial paper
Securities sold under
repurchaseagreements
Cash collateral
received for
securities lentLong-term borrowings
Total

2,004,060―
108,053$ 2,112,114

Note 2. Repayments schedule of long-term borrowings and other interest-bearing liabilities after the end of
the fiscal year
Previous fiscal year (As of March 31, 2022)
Millions of yen
Due after
Due after
Due after
Due after
one year
two years
three years
four years
Due within
throughthroughthroughthroughDue after
one year
two years
three years
four years
five years
five years
Call money
Short-term borrowings
Commercial paper
Securities sold under
repurchaseagreements
Cash collateral
received for
securities lentLong-term borrowings
Total

94

Japan Securities Finance Co., Ltd.

¥1,858,400 ¥
239,210496,000―――¥

5,544,898

―

―

―

―

―

4,706,496―¥ 12,845,005 ¥

―
1,000
1,000

―
―
―

―
―
―

―
―
―

―
3,000
3,000

¥

―
―
―

¥

¥

―
―
―

¥

¥

―
―
―

¥

¥

―
―
―

¥

¥

¥

4,781,801

―

―

―

―

―

5,073,776―
1,000
149,800¥ 12,589,987 ¥ 149,800

―
―
―

―
―
―

―
79,90079,900

―
3,000
3,000

¥

―
―
―

¥

¥

Thousands of U.S. dollars
Due after
Due after
two years
three years
throughthroughthree years
four years

Due after
one yearthrough
two years$

Due after
four years
throughfive years
$

―

―

―

―

―

38,154,429―
7,519
1,126,485$ 94,675,791 $ 1,126,485

―
―
―

―
―
―

―
600,842$ 600,842―
22,55922,559Japan Securities Finance Co., Ltd.
- 28 -- 29 -―――

Due after
five years

35,958,799

$

―
―
―

¥

―
―
―

―
―
―

$

―
―
―

¥

$ 16,471,649 $
691,908
3,391,487

Integrated Report 2023

$

―
―
―

Due after
five years

―
―
―

¥

―
―
―

Due after
four years
throughfive years

2,190,400 ¥
92,010451,000

Due within
one yearCall money
Short-term borrowings
Commercial paper
Securities sold under
repurchaseagreements
Cash collateral
received for
securities lentLong-term borrowings
Total

Millions of yen
Due after
Due after
two years
three years
throughthroughthree years
four years

Due after
one yearthrough
two years

$

$

―
―
―

Integrated Report 2023

95

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

3. Breakdown of financial instruments by each fair value level
The fair value of financial instruments is classified into the following three levels, depending on theobservability and materiality of the inputs used to measure fair value.

Current fiscal year (As of March 31, 2023)

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Level 1: Fair value based on quoted market prices for assets or liabilities that are the subject of thecalculation of such fair value in an active market amongst the inputs to the measurement ofobservable fair value
Level 2: Fair value measured using inputs for the calculation of fair value other than Level 1 inputs
amongst the inputs to the measurement of observable fair value
Level 3: Fair value measured using unobservable inputs for fair value calculations
Fair value is classified at the lowest priority level in the measurement of fair value among the levels towhich each of those inputs belong where multiple inputs are used that have a significant impact on themeasurement of fair value.
(1) Financial instruments that are stated at fair value in the accompanying consolidated balance sheets
Previous fiscal year (As of March 31, 2022)
Millions of yen
Fair value
Classification
Level 1
Level 2
Level 3
Total
Securities and investment securities
Available-for-sale securities
Equity securities
Bonds
Government and local bonds, etc.
Corporate bonds
Other
Derivative transactions
Currency-relatedInterest-related
Debt-related
Assets total
Derivative transactions
Currency-relatedInterest-related
Equity securities-related
Liabilities total¥¥

12,022 ¥― ¥― ¥12,022

467,407―
80,76460,418447,40944,836―――

527,826
447,409125,600――
114
560,308 ¥11
12,736―565,412 ¥

―
―
―
― ¥

11
12,736114
1,125,720

― ¥
―
943
943 ¥

122 ¥
6,111
―
6,233 ¥

― ¥
―
―
― ¥

122
6,111
943
7,176

¥

¥

Note Investment trusts of ¥29,504 million recorded on the consolidated balance sheets at fair value are not included in thetable above in accordance with Paragraph 26 of the “Guidance on Accounting Standard for Fair Value Measurement”(ASBJ Guidance No. 31, July 4, 2019).

96

Japan Securities Finance Co., Ltd.

Classification

Millions of yen
Fair value
Level 2
Level 3

Level 1

Total

Securities and investment securities
Available-for-sale securities
Equity securities
Bonds
Government and local bonds, etc.
Corporate bonds
Other
Other
Derivative transactions
Currency-relatedInterest-related
Assets total
Derivative transactions
Currency-relatedInterest-related
Equity securities-related
Liabilities total¥¥

11,493 ¥― ¥11,493295,746―
13,317
11,74060,335340,053
59,27016,167――――356,081
340,053
72,587
27,907――332,297 ¥1
17,866493,693 ¥

―
―
― ¥

1
17,866825,991

― ¥
―
53
53 ¥

28 ¥
1,946
―
1,974 ¥

― ¥
―
―
― ¥

28
1,946
53
2,028

¥

¥

Classification― ¥Thousands of U.S. dollars
Fair value
Level 2
Level 3

Level 1

Total

Securities and investment securities
Available-for-sale securities
Equity securities
Bonds
Government and local bonds, etc.
Corporate bonds
Other
Other
Derivative transactions
Currency-relatedInterest-related
Assets total
Derivative transactions
Currency-relatedInterest-related
Equity securities-related
Liabilities total

$

$
$

$

86,428 $― $― $86,4282,223,995―
100,144
88,287453,715
2,557,174
445,709
121,575――――

2,677,710
2,557,174
545,853
209,863――2,498,855 $

8134,358
3,712,542 $

―
―
― $

8
134,358
6,211,397

― $
―
405
405 $

211 $
14,639―14,851 $

― $
―
―
― $

211
14,639405
15,257

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 30 -- 31 -

Integrated Report 2023

97

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(2) Financial instruments other than that are stated at fair value in the accompanying consolidated balance
sheetsPrevious fiscal year (As of March 31, 2022)
Millions of yen
Fair value
Classification
Level 1
Level 2
Level 3
Total¥―¥
526,090¥
365,306¥
891,396
Operating loans
Securities and investment securities
Held-to-maturity securities
1,673
―
―
1,673
Government and local bonds, etc.
Assets total¥
1,673 ¥
526,090 ¥
365,306 ¥893,070¥― ¥3,998 ¥
― ¥3,998Long-term borrowings
Liabilities total¥― ¥3,998 ¥
― ¥3,998

Operating loans
For operating loans with variable interest rates, the carrying amounts are used as the fair value because
the fair value approximates the carrying amounts if the credit conditions of the borrowers have notchanged significantly since the loans were made, as the variable interest rate reflects the market interest
rates in a short period of time. For long-term loans with fixed interest rates, the fair value is calculated
for each category based on the term by discounting the total amount of principal by the market interest
rate. For short-term loans with fixed interest rates, the carrying amounts are used as the fair value because
the fair value approximates the carrying amounts. The fair value of doubtful receivables is calculated
based on the estimated amount of collection from collateral and guarantees, etc. and the fair value
approximates the balance sheet amount on the end of consolidated fiscal year less the current estimateduncollectable amount, and such amounts are used as the fair value. Credit risk is considered in calculatingthese fair values, and if the impact of unobservable inputs is significant, the fair value is classified as Level
3; otherwise, the fair value is classified as Level 2.

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Current fiscal year (As of March 31, 2023)
Classification
Operating loans
Assets total
Long-term borrowings (Note)
Liabilities total

¥
¥
¥
¥

Level 1

―
―
―
―

¥
¥
¥
¥

Millions of yen
Fair value
Level 2
Level 3
502,453 ¥452,973502,453 ¥452,973
232,763 ¥―
232,763 ¥―Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

¥
¥
¥
¥

Total
955,426
955,426
232,763
232,763

$
$
$
$

Total
7,184,738
7,184,738
1,750,363
1,750,363

Note Current portion of long-term borrowings are included in long-term borrowings.

Classification
Operating loans
Assets total
Long-term borrowings (Note)
Liabilities total

$
$
$
$

Level 1

―
―
―
―

$
$
$
$

Thousands of U.S. dollars
Fair value
Level 2
Level 3
3,778,410 $
3,406,328
3,778,410 $
3,406,328
1,750,363 $―
1,750,363 $―Long-term borrowings
For long-term loans with variable interest rates, the carrying amount are used as fair value because thefair value approximates the carrying amount since the variable interest rate reflects the market interest
rate in a short period of time and the Company's credit status has not changed significantly since theexecution of the loans. For those with fixed interest rates are calculated using the discounted present value
method based on the total amount of principal and interest rate that takes into account the remaining termof the debt and credit risk. When unobservable inputs are not used in the calculation of these fair values,
or when the effect of such inputs is not significant, the fair value is classified as Level 2.
Derivative transactions
Stock index futures transactions are valued using quoted market prices and are classified as Level 1
because they are traded in active markets. The fair values of interest rate swaps and foreign exchange
contracts are determined using the discounted present value method with observable inputs such as interest
rates and foreign exchange rates, and are classified as Level 2.

Note Current portion of long-term borrowings are included in long-term borrowings.

Note Explanation of valuation methods and inputs used to calculate fair value
Securities and investment securities
Securities and investment securities for which unadjusted quoted market prices in active markets areavailable are classified as Level 1 fair value. This mainly includes listed equities, listed mutual funds, andgovernment bonds. If the market is not active, even if published quoted market prices are used, the market
value is classified as Level 2 fair value. This mainly includes municipal bonds and corporate bonds. For
mutual funds for which no market trading prices exist, reference prices are used as fair value and classified
as Level 2 fair value if there are no material restrictions that would require compensation for the risk frommarket participants with respect to cancellation or repurchase requests.

98

Japan Securities Finance Co., Ltd.

Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 32 -- 33 -

Integrated Report 2023

99

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Securities)
1. Held-to-maturity debt securities with market value
Previous fiscal year (As of March 31, 2022)

Current fiscal year (As of March 31, 2023)

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Type(1) Government
bonds, local bonds,
etc.
Fair value exceeds the(2) Corporate bonds
carrying amount(3) Other
Subtotal(1) Government
bonds, local bonds,
etc.
Fair value not exceed(2) Corporate bonds
the carrying amount(3) Other
Subtotal
Total

Carrying amountJapan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Millions of yen
Fair value

Differences¥

1,511 ¥

1,673 ¥

162

¥

―
―
1,511 ¥――
1,673 ¥

―
―
162

¥

― ¥

― ¥

―

¥
¥

―
―
― ¥
1,511 ¥――
― ¥1,673 ¥―――
162

Carrying amountexceeding acquisition
cost

Carrying amount notexceeding acquisition
cost

Other
(3) Others
Subtotal
Total

Current fiscal year (As of March 31, 2023)
No items to report.
2. Available-for-sale securities with market value
Previous fiscal year (As of March 31, 2022)

Carrying amountexceeding acquisition
cost

Carrying amount notexceeding acquisition
cost

Type
(1) Equity securities(2) Bonds
Government
bonds, municipal
bonds, etc.
Corporate bonds
Other(3) Others
Subtotal(1) Equity securities(2) Bonds
Government
bonds, local
bonds, etc.
Corporate bonds
Other(3) Others
Subtotal
Total

Type
(1) Equity securities(2) Bonds
Government
bonds, municipal
bonds, etc.
Corporate bonds
Other(3) Others
Subtotal(1) Equity securities(2) Bonds
Government
bonds, local
bonds, etc.
Corporate bonds

Millions of yen
Carrying amount
Acquisition cost¥
11,708 ¥3,890 ¥¥¥¥¥

Millions of yen
Carrying amount
Acquisition cost¥
11,493 ¥4,235 ¥¥¥¥¥

83,37077,456

5,913

82,512
3,811
27,380208,567 ¥― ¥82,4903,276
21,648189,107 ¥
― ¥

21
534
5,732
19,460―272,711290,256(17,544)257,540

258,099(558)

68,776526
599,555 ¥
808,123 ¥73,192542
622,091 ¥
811,199 ¥(4,416)(16)(22,535)(3,075)Note Consolidated balance sheet carrying amounts of ¥1,786 million ($13,436 thousand) for unlisted equity securities, and¥1,664 million ($12,513 thousand) for investments in investment limited partnership are not included above because
they do not have market prices and their fair value is extremely difficult to measure.

Differences
7,818

266,390

250,879

15,511

11,73342,943
14,829347,606 ¥313 ¥11,70040,264
10,407317,142 ¥
345 ¥

32
2,679
4,421
30,463(32)

261,435

272,679(11,243)435,675

436,495(819)

82,656
14,674
794,756 ¥
1,142,362 ¥

85,22914,674809,424 ¥
1,126,567 ¥(2,573)(0)(14,668)
15,794Note Consolidated balance sheet carrying amounts of ¥1,765 million for unlisted equity securities, and ¥1,986 million forinvestments in investment limited partnership are not included above because they do not have market prices and theirfair value is extremely difficult to measure.

Thousands of U.S. dollars
Carrying amount
Acquisition cost$
86,428 $
31,854 $Carrying amountexceeding acquisition
cost

Carrying amount notexceeding acquisition
cost

Type
(1) Equity securities(2) Bonds
Government
bonds, local
bonds, etc.
Corporate bonds
Other(3) Others
Subtotal$(1) Equity securities $(2) Bonds
Government
bonds, local
bonds, etc.
Corporate bonds

Other(3) Others
Subtotal
Total

$
$

100 Japan Securities Finance Co., Ltd. Integrated Report 2023
- 35 -

Differences
54,574

626,936

582,463

44,472620,486
28,662205,9021,568,416 $― $620,323
24,639
162,796
1,422,077 $
― $

163
4,022
43,105
146,338―

2,050,774

2,182,710(131,935)

1,936,687

1,940,886(4,198)517,191
3,961
4,508,614 $
6,077,030 $

550,402
4,082
4,678,081 $
6,100,158 $(33,210)(121)(169,466)(23,127)

Japan Securities Finance Co., Ltd.
- 34 -

Differences
7,257

Integrated Report 2023 101

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

3. Available-for-sale securities sold during the fiscal year
Previous fiscal year (From April 1, 2021 to March 31, 2022)(Derivative Transactions)
1. Derivative transactions for which hedge accounting is not applied
Currency-related
Previous fiscal year (As of March 31, 2022)

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Proceeds fromsale(1) Equity securities(2) Bonds
Government bonds, local bonds, etc.
Corporate bonds
Other(3) Others

¥

2,778

¥

7,412
―
7,869
3,832
21,892

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Millions of yen
Gross realized
gains
¥

1,344

¥

7
―
57
46
1,456

Gross realized
losses
¥

300

¥

2
―
277
1,127
1,707

Category

Non-market
transactions

Current fiscal year (From April 1, 2022 to March 31, 2023)
Proceeds fromsale(1) Equity securities(2) Bonds
Government bonds, local bonds, etc.
Corporate bonds
Other(3) Others

¥

―

¥

155,348
47,90459,991
4,402
267,646

Millions of yen
Gross realized
gains
¥

―

¥

4,854
52
116
605
5,629

Gross realized
losses
¥

―

¥

101
212
6,846
―
7,160

Thousands of U.S. dollars
Proceeds from
Gross realized
sale
gains
(1) Equity securities(2) Bonds
Government bonds, local bonds, etc.
Corporate bonds
Other(3) Others

$

―

$

1,168,205
360,236
451,134
33,1032,012,680$―$

36,506
394
878
4,552
42,331Gross realized
losses
$

―

$

762
1,597
51,484―53,844Contract
amounts

Nature oftransaction
Forward exchange
contract:
Sell:
U.S. dollars
Euro
Australian dollars
Buy:
U.S. dollars

Millions of yen
Of whichwithinFair value
one year

¥

1,024
1,375
640

¥

―
―
―

182

¥

―

(34)
(61)
(24)

Gains orlosses on
valuation

¥

(34)
(61)
(24)

9

9

Millions of yen
Of whichwithinFair value
one year

Gains orlosses on
valuation

Current fiscal year (As of March 31, 2023)

Category

Non-market
transactions

Category

Non-market
transactions

Contract
amounts

Nature oftransaction
Forward exchange
contract:
Sell:
U.S. dollars
Euro
Buy:
U.S. dollars

¥

¥

686

$

109
2,204
5,165

―
―

¥

―

Contract
amounts

Nature oftransaction
Forward exchange
contract:
Sell:
U.S. dollars
Euro
Buy:
U.S. dollars

14
293

$

(0)
(8)

¥

(0)
(8)

(4)

(4)

Thousands of U.S. dollars
Of whichwithinFair value
one year

Gains orlosses on
valuation

―
―
―

$

(1)
(67)
(37)

$

(1)
(67)
(37)

4. Reclassified securities for which the purpose of holding has changed
In the current fiscal year, the entire amount of government bonds (consolidated balance sheet amount:¥1,510 million ($11,362 thousand)), which were previously held to maturity, were changed to availablefor-sale securities. This was due to a change in fund management policy. The impact of this change on the
consolidated financial statements is immaterial.

102 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 36 -- 37 -

Integrated Report 2023 103

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

2. Derivative transactions for which hedge accounting is applied(1) Currency derivatives
Previous fiscal year (As of March 31, 2022)
No items to report.

Current fiscal year (As of March 31, 2023)

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Hedge
accounting
method*1

Current fiscal year (As of March 31, 2023)
Hedge
accounting
method*1Millions of yen

Nature of transaction
Forward exchange contract:
Sell
Euro

Investments securities

Note:*1 Deferred hedge accounting is applied.

Hedge
accounting
method*1

Contract or
Of whichnotional
Fair value
over one year
amounts

Hedged items

Nature of transaction¥

Investments securities

Note:*1 Deferred hedge accounting is applied.

― ¥

(12)

Thousands of U.S. dollars
Contract or
Of whichnotional
Fair value
over one year
amounts

Hedged items

Forward exchange contract:
Sell
Euro

501 ¥

$

3,768 $

*2

― $

(96)

*2

Nature of transaction
Interest rate swaps:
Variable rate received for
fixed rate
Interest rate swaps:
Variable rate received
for fixed rate
Variable rate paid
for fixed rate

Hedged items

Millions of yen
Contract or
Of whichnotional
Fair value
over one year
amounts

Securities andInvestments securities ¥825,668 ¥

808,349 ¥¥

98,427 ¥19,180 ¥*3Long-term borrowings ¥3,000 ¥

3,000 ¥

*3

Operating loans

6,625

Notes:*1 Deferred hedge accounting is applied.
*2 The difference in amounts to be paid or received on interest rate swaps is recognized over the life of the agreements as an
adjustment to interest expense.
*3 For the assets and liabilities for which interest rate swap contracts are used to hedge the interest rate fluctuations, fair valueof derivative financial instrument is included in fair value of the respective assets and liabilities as hedged items.

Interest rate swaps:
Variable rate received for
fixed rate
Variable rate paid
for fixed rate
Interest rate swaps:
Variable rate received
for fixed rate
Variable rate paid
for fixed rate

Hedged items

Securities andInvestments securities ¥682,371 ¥

655,543 ¥

15,523Long-term borrowings ¥126,000 ¥126,000 ¥396

Operating loans¥

14,385 ¥14,385 ¥*3Long-term borrowings ¥29,100 ¥29,100 ¥*3

Notes:*1 Deferred hedge accounting is applied.
*2 The difference in amounts to be paid or received on interest rate swaps is recognized over the life of the agreements as an
adjustment to interest expense.
*3 For the assets and liabilities for which interest rate swap contracts are used to hedge the interest rate fluctuations, fair valueof derivative financial instrument is included in fair value of the respective assets and liabilities as hedged items.

Hedge
accounting
method*1(2) Interest rate derivatives
Previous fiscal year (As of March 31, 2022)
Hedge
accounting
method*1

Nature of transaction

Millions of yen
Contract or
Of whichnotional
Fair value
over one year
amounts*2

Nature of transaction
Interest rate swaps:
Variable rate received for
fixed rate
Variable rate paid
for fixed rate
Interest rate swaps:
Variable rate received
for fixed rate
Variable rate paid
for fixed rate

Hedged items

Thousands of U.S. dollars
Contract or
Of whichnotional
Fair value
over one year
amounts

Securities andInvestments securities $ 5,131,382 $ 4,929,638 $ 116,734
Long-term borrowings $947,510 $947,510 $2,984

Operating loans$

108,174 $108,174 $*3Long-term borrowings $218,829 $

218,829 $*3

Notes:*1 Deferred hedge accounting is applied.
*2 The difference in amounts to be paid or received on interest rate swaps is recognized over the life of the agreements as an
adjustment to interest expense.
*3 For the assets and liabilities for which interest rate swap contracts are used to hedge the interest rate fluctuations, fair valueof derivative financial instrument is included in fair value of the respective assets and liabilities as hedged items.

(3) Bond derivatives
Previous fiscal year (As of March 31, 2022)
Hedge
accounting
method*1

Nature of transaction
Bond futures:
Sell

Note *1 Deferred hedge accounting is applied.

Hedged items

Millions of yen
Contract or
Of whichnotional
Fair value
over one year
amounts

Investments securities ¥3,053 ¥―¥

114

Current fiscal year (As of March 31, 2023)
No items to report.

104 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 38 -- 39 -

Integrated Report 2023 105

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(4) Stock derivatives
Previous fiscal year (As of March 31, 2022)(Retirement Benefits)
1. Outline of retirement benefit plans
The Company has defined benefit plans which consist of a defined benefit corporate pension plan anda lump-sum retirement benefit plan, and a defined contribution pension plan. The Company has
established retirement benefit trust for the defined benefit corporate pension plan and the lump-sum
retirement benefit plan.
Consolidated subsidiaries’ main retirement plan is a defined benefit lump-sum retirement plan and thesimplified method has been adopted for the calculation of retirement benefit liability and retirement
benefit expenses for the plans.

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Hedge
accounting
method*1

Nature of transaction
Stock index futures:
Sell

Note *1 Deferred hedge accounting is applied.

Hedged items

Millions of yen
Contract or
Of whichnotional
Fair value
over one year
amounts

Investments securities ¥Current fiscal year (As of March 31, 2023)
Hedge
accounting
method*1

Nature of transaction
Stock index futures:
Sell

Note *1 Deferred hedge accounting is applied.

Hedge
accounting
method*1

Nature of transaction
Stock index futures:
Sell

Note *1 Deferred hedge accounting is applied.

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

8,984 ¥―¥

(943)

Millions of yen

Hedged items

Contract or
Of whichnotional
over one year
amounts

Investments securities ¥Hedged items

9,602 ¥―¥

Fair value(53)

Thousands of U.S. dollars
Contract or
Of whichnotional
Fair value
over one year
amounts

Investments securities $72,213 $

―$

(405)

2. Defined benefit plan
(1) Reconciliation of changes in retirement benefit obligation (the following table excludes certain plans
mentioned in (3))
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Retirement benefit obligation at beginning of year
Service cost
Interest cost
Actuarial gains and losses
Benefits paid
Past service costs incurred
Retirement benefit obligation at end of year

¥

¥

9,187
282
51
(211)
(308)
(671)
8,329

¥

¥

9,421
320
28
(213)
(369)
―
9,187

$

$

69,0892,122384(1,587)(2,321)(5,050)62,636(2) Reconciliation of changes in plan assets (the following table excludes certain plans mentioned in (3))
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Plan assets at beginning of year
Expected return on plan assets
Actuarial gains and losses
Employer contributions
Benefits paid
Plan assets at end of year

¥

¥

9,624
192
(304)
278
(281)
9,509

¥

¥

9,482
189
106
119
(273)
9,624

$

$

72,376
1,447(2,290)2,091(2,114)71,510(3) Reconciliation of changes in retirement benefit liability whose plans adopted the simplified method
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Retirement benefit liability at beginning of year
Retirement benefit expenses
Benefits paid
Contributions
Retirement benefit liability at end of year¥¥

106 Japan Securities Finance Co., Ltd. Integrated Report 2023

213
36
(32)
(0)
217

¥

¥

184
51
(22)
(0)
213

$

$

Japan Securities Finance Co., Ltd.
- 40 -- 41 -

1,608
275
(247)
(2)
1,633

Integrated Report 2023 107

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(4) Reconciliation between retirement benefit obligation and plan assets and liability for retirement benefit
and asset for retirement benefit recognized in consolidated balance sheets
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023

(8) Plan assets(a) Percentage by major category of plan assets

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Funded retirement benefit obligation
Plan assets

8,329(9,509)(1,180)
217

¥

¥

¥

(962)
217
(1,180)

¥

(962)

¥

Unfunded retirement benefit obligation
Net liability and asset recognized in consolidatedbalance sheets¥

Liability for retirement benefit
Net liability and asset recognized in consolidatedbalance sheets

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

9,187
(9,624)
(437)
213

$

$

¥

(223)
213
(437)

$

(7,239)1,633(8,873)

¥

(223)

$

(7,239)(5) The components of retirement benefit expenses

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial gains or losses
Past service costs recorded as expenses*1
Retirement benefit expenses calculated by thesimplified method
Retirement benefit expenses

¥

¥

282
51
(192)
(43)
(671)
36
(538)

¥

¥

320
28
(189)
1
―
51
212

62,636(71,510)(8,873)
1,633

$

$

2,122
384
(1,447)(330)(5,050)275(4,046)Note *1 Past service costs recorded as expenses was recognized as a result of revision of the Company’s retirement benefit
plan, and is recorded as “Gain on revision of retirement benefit plan” in extraordinary income.

(6) Remeasurements of retirement benefit plans before related tax effects

¥
¥

(137)
(137)

¥
¥

321
321

$
$

(7) Accumulated remeasurements of retirement benefit plans before related tax effects

¥
¥

(172)
(172)

¥
¥

(309)
(309)

26.9%
33.7
9.5
29.9
100.0%

39.1%
34.3
9.4
17.2
100.0%

Note Plan assets as of March 31, 2023 and 2022 include the retirement benefit trust contributed for the years ended
March 31, 2023 and 2022 which are 9.0% and 9.4% of total plan assets, respectively.

(b) Determination procedure of long-term expected rate of return on plan assets
In determining long-term expected rate of return on plan assets, the Company considers the current
and projected asset allocation, as well as current and future long-term rate of returns for various
categories of the plan assets.
(9) Basis for calculation of actuarial assumptions
The assumptions used in accounting for the above plans as of March 31, 2023 and 2022 are as
follows:
2023
2022(a) Discount rate(b) Long-term expected rate of return on plan assets(c) Expected salary increase rate

0.9%
2.0%
5.2%

0.5%
2.0%
5.2%

3. Defined contribution plans
For the years ended March 31, 2023 and 2022, the amount to be paid by the Company and its
consolidated subsidiaries to the defined contribution plans was ¥35 million ($267 thousand) and ¥36
million, respectively.

(1,034)(1,034)

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Unamortized actuarial gains or losses
Total

2022

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022
Actuarial gains or losses
Total

Debt securities
Equity securities
General account
Other
Total

2023

$
$

(1,294)(1,294)108 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 42 -- 43 -

Integrated Report 2023 109

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Tax Effect Accounting)
1. The principal components of deferred tax assets and deferred tax liabilities are as follows:(Segment Information)
1. Outline of the reportable segments
The reportable segments of the Group are the business units for which the Group is able to obtainrespective financial information separately in order for the Board of Directors to conduct periodic
investigation to determine distribution of management resources and evaluate their business results.
“Securities finance business” conducted by the Company, “Trust banking business” conducted by JSF
Trust and Banking Co., Ltd., a consolidated subsidiary and “Real estate leasing business” conducted by
Nihon Building Co., Ltd., a consolidated subsidiary, are the Group’s reportable segments.
“Securities finance business” is engaged in providing loan services, government and corporate bondfinancing and general loans, bond lending and stock lending. “Trust banking business” is engaged inproviding trust services such as securities trust and banking services such as deposit or loan. “Real estateleasing business” is mainly engaged in providing services for leasing and managing real estate owned by
the Group.

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Deferred tax assets:
Accrued business tax
Accrued bonuses
Retirement benefit liability
Allowance for doubtful accounts
Deferred losses on hedges
Net unrealized loss on available-for-sale securities
Other
Subtotal
Valuation allowance
Deferred tax assets total
Deferred tax liabilities:
Gain on evaluation of subsidiaries’ assets
Net unrealized gain on other securities
Gain on evaluation of acquired assets by merger
Deferred loss on hedges
Other
Deferred tax liabilities total
Net deferred tax liabilities

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Millions of yen
2023
2022
¥

¥

84
152
575
35
4,876
7,907
276
13,907(98)
13,809(154)(6,024)(452)(9,193)(180)(16,006)(2,196)

¥

¥

103
143
843
24
10,2595,003
305
16,682(87)
16,595(154)(9,379)(452)(9,390)(229)(19,607)(3,011)Thousands of
U.S. dollars
2023
$

$

633
1,145
4,325
267
36,672
59,464
2,077
104,585(738)
103,846(1,165)(45,301)(3,404)(69,137)(1,357)(120,366)(16,519)

2. The reconciliation of the statutory tax rate and the effective tax rate when there is a significant difference

Statutory tax rate
Equity in gains of affiliates
Expenses not deductible for tax purposes
Valuation allowance
Income not credited for tax purposes
Elimination of dividend income
Other
Effective tax rate

2023

2022

30.6%
(1.9)
0.5
0.1
(21.5)
19.5
0.6
27.9%

30.6%
(1.9)
0.5
(1.0)
(6.9)
5.6
0.7
27.6%

(Revenue Recognition)
Information on the revenue recognition is omitted as revenue subject to the “Account Standards for
Revenue Recognition” is immaterial for “Securities finance business”,” Trust banking business” and”
Real estate leasing business” which are conducted by the Group.

2. Calculation methods of operating revenue, profit or loss, assets, liabilities and other items for eachreportable segment.
As the methods of accounting treatment for the reported business segments are the same as description
in the “Basis of Presentation of the Consolidated Financial Statements”.
Profits by reportable segments are based on ordinary profit base. Intersegment revenue and transfer
are based on arms-length transactions.
3. Information on operating revenue, profit or loss, assets, liabilities and other items for each reportablesegment
Previous fiscal year (From April 1, 2021 to March 31, 2022)
Millions of yen
Securities
Real estate
finance
Trust banking
leasing
Total
Revenues:
Revenues to third parties ¥26,558 ¥
2,737
¥
841 ¥
30,138Intersegment revenues and
28
222
445
696
transfers
Total¥
26,586 ¥2,960¥
1,286 ¥
30,834
Segment profit¥
5,928 ¥
1,385
¥
707 ¥
8,021
Segment assets¥
12,714,123 ¥1,557,744¥
9,614 ¥
14,281,482
Others:Depreciation andamortization
¥
993 ¥
104
¥
96 ¥
1,194
Interest income
294
―
16
311
Extraordinary income
40
―
―
40
(Gain on sale of noncurrent assets)
(40)
(―)
(―)
(40)
Income taxes
1,371
361
241
1,974

110 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 44 -- 45 -

Integrated Report 2023 111

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

Current fiscal year (From April 1, 2022 to March 31, 2023)

4. Reconciliation between total amounts of reportable segments and consolidated financial statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Revenues:
Revenues to third parties
Intersegment revenues andtransfers
Total
Segment profit
Segment assets
Others:Depreciation andamortization
Interest income
Extraordinary income(Gain on revision ofretirement benefit plan)
Income taxes

Revenues:
Revenues to third parties
Intersegment revenues andtransfers
Total
Segment profit
Segment assets
Others:Depreciation andamortization
Interest income
Extraordinary income(Gain on revision ofretirement benefit plan)
Income taxes

Millions of yen
Real estate
Trust banking
leasing

Securities
finance¥

38,594

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

¥

36

3,115

¥

249

808

Total
¥

389

42,518675¥¥¥

38,631
10,274
12,482,291

¥
¥
¥

3,364
1,415
1,758,123

¥
¥
¥

1,197
651
7,788

¥
¥
¥

43,194
12,342
14,248,203

¥

482
247
671

¥

105
―
―

¥

94
13
―

¥

681
260
671

(671)
1,644

(―)
439

290,231

$

274
$
$
$
$

290,505
77,267
93,865,932
3,625
1,859
5,050

(671)
2,306

Thousands of U.S. dollars
Real estate
Trust banking
leasing

Securities
finance$(―)
221

23,428

$

1,873
$
$
$
$

(5,050)12,36425,301
10,642
13,220,959
793
―
―
(―)
3,307

6,078

Total
$

2,930
$
$
$
$

9,008
4,902
58,568
707
99
―
(―)
1,669

319,737

Operating profit
Total segment profit¥$

324,815
92,812
107,145,460
5,126
1,958
5,050
(5,050)17,341

43,194¥30,834$

324,815

Elimination of intersegment transactions

(675)

(696)

(5,078)

Other
Operating profit in consolidated financial
statements

―

―

―

¥

Ordinary profit
Total segment profit

42,518¥12,342Elimination of intersegment transactions
Share of profit of entities accounted for using
equity method
Other
Ordinary profit in consolidated financial
statements¥

30,138$¥¥319,737
Thousands of
U.S. dollars
2023

8,021

$

92,812(5,264)(1,303)(39,587)

523

446

3,938

―

―

―

7,601

¥

7,164

$

14,248,203¥

14,281,482

57,162Thousands of
U.S. dollars
2023

Millions of yen
2023
2022

AssetsTotal segment assets¥

Millions of yen
2023
2022

5,078
$
$
$

Thousands of
U.S. dollars
2023

Millions of yen
2023
2022

$

107,145,460

Elimination of intersegment credits(172,025)(91,221)(1,293,621)

Elimination of investments and capital(24,913)(26,268)(187,349)

Other
Total assets in consolidated financial
statements

4,953

4,664

37,250¥14,056,217

112 Japan Securities Finance Co., Ltd. Integrated Report 2023¥

14,168,656$

105,701,740

Japan Securities Finance Co., Ltd.
- 46 -- 47 -

Integrated Report 2023 113

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Millions of yen

Segment total

Other items

March 31, 2022
Depreciation and amortization
Interest income
Extraordinary income(Gain on sale of non-current assets)
Income taxes¥

March 31, 2023
Depreciation and amortization¥
Interest income
Extraordinary income(Gain on revision of retirement benefit plan)
Income taxes

Amounts in the
consolidated
financialstatements

Adjustments

1,194
311
40
(40)
1,974

¥

681
260
671
(671)
2,306

¥

0
(16)
―
(―)
(2)

¥

0
(13)
―
(―)
0

¥

Thousands of U.S. dollars

Segment total

Other items

March 31, 2023
Depreciation and amortization
Interest income
Extraordinary income
Gain on revision of retirement benefit plan
Income taxes

$

5,126
1,958
5,050
(5,050)17,341

Adjustments
$

2
(99)
―
(―)
1

1,195
294
40
(40)
1,972
682
247
671
(671)
2,306
Amounts in the
consolidated
financialstatements

$

5,128
1,859
5,050
(5,050)17,343[Related information]
Previous fiscal year (From April 1, 2021 to March 31, 2022)
1. Information by products and services

Operating revenue toexternal customers

¥

6,118

Bond lending¥

Millions of yen
2023

Operating revenue toexternal customers

Loans formargintransaction
¥

8,003

Bond lending¥

18,037

Other¥

16,477

Total¥

42,518

Thousands of U.S. dollars
2023

Operating revenue toexternal customers

Loans formargintransaction$

60,187

Bond lending$

135,638

Other$

123,911

Total$

319,737

2. Geographic information(1) Operating revenue
Because revenues from external customers inside Japan are over 90% of operating revenue in the
consolidated statement of income, the geographic information is not disclosed.
(2) Property, plant and equipment
Because there are no property, plant and equipment outside Japan, the geographic information is notdisclosed.
3. Information by major customers
Because no particular customer whose operating revenue is over 10% of operating revenue in the
consolidated statement of income exists, the information by major customers is not disclosed.
[Information of impairment losses on fixed assets by reportable segments]
No items to report.
[Amortization and unamortized balance of goodwill by reportable segments]
No items to report.

Millions of yen
2022
Loans formargintransaction

Current fiscal year (From April 1, 2022 to March 31, 2023)
1. Information by products and services

11,985

Other¥

12,033

Total¥

30,138

2. Geographic information(1) Operating revenue
Because revenues from external customers inside Japan are over 90% of operating revenue in the
consolidated statement of income, the geographic information is not disclosed.

[Negative goodwill incurred by reported segments]
No items to report.
[Information of related parties]
1. Business transactions with related parties
No items to report.
2. Note to significant affiliate companies
No items to report.

(2) Property, plant and equipment
Because there are no property, plant and equipment outside Japan, the geographic information is notdisclosed.
3. Information by major customers
Because no particular customer whose operating revenue is over 10% of operating revenue in the
consolidated statement of income exists, the information by major customers is not disclosed.

114 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 48 -- 49 -

Integrated Report 2023 115

Corporate Data

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements(Per Share Information)(Subsequent Event)(Acquisition of treasury shares)
The Company’s Board of Directors held on May 9, 2023 has resolved to acquire treasury sharespursuant to the provisions of Article 156 of the Companies Act, as applied by replacing the relevant terms
pursuant to the provisions of Article 165, paragraph (3) of the same Act.

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

2023¥

Net assets per share
Profit per share

Yen

1,574.64 ¥67.76

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

U.S. dollars
2023

2022
1,545.03
56.61

$

11.84
0.5

Notes:
1. Diluted profit per share for the previous and current fiscal year are not stated as there are no potential shares that have dilutive
effect.
2. The basis for calculating net assets per share is as follows:

Millions of yen
2023
2022
¥

Total net assets
Amount deducted from total net assets
Net assets applicable to common shareholders¥

135,728 ¥―
135,728 ¥

137,996―
137,996

Thousands of
U.S. dollars
2023
$
$

1,020,665―
1,020,665

Number of shares (Thousands)
2023
2022
Number of common shares outstanding

96,00096,000

Number of common treasury shares

9,803

6,683

Number of common shares outstandingon which net assets per share is calculated

86,19689,316

3. The basis for calculating profit per share is as follows:

Millions of yen
2023
2022
Profit attributable to owners of parent
Profit not attributable to common shareholders
Profit applicable to common shareholders of theparent company

Thousands of
U.S. dollars
2023

2. Details of matters related to acquisition(1) Class of shares to be acquired
Common shares of the Company(2) Total number of shares that can be acquired
Up to 3,300,000 shares (3.8% of the total number of issued shares excluding treasury shares)(3) Total amount of share acquisition costs
UP to ¥3,300 million ($24,815 thousand)(4) Acquisition period
From May 10, 2023 to March 31, 2024
(Disposal of treasury shares)
The Company’s Board of Directors held on May 9, 2023 has resolved to dispose of treasury sharesthrough a third-party allotment.
1. Purpose and reasons for the disposal of treasury shares
The Company will grant the Company’s common shares to its employees in accordance with theCompany's performance in fiscal 2022, in an attempt to increase the job satisfaction and motivation of its
employees and to provide incentives to increase the Company's corporate value over the medium to long
term.

¥

5,966 ¥
―

5,174
―

$

44,869―2. Details of matters related to disposal(1) Date of disposal
June 30, 2023¥

5,966 ¥

5,174$

44,869(2) Class and number of shares to be disposed
Common shares of the Company 49,000 shares *1

Number of shares (Thousands)
2023
2022
Weighted average number of common shares

1. Reasons for the acquisition of treasury shares
The Company acquires treasury shares in accordance with Shareholder Return Policy, aim for a total
return ratio of 100% on a cumulative basis from FY2021 through FY2025 by the flexible payment ofdividends and acquisition of treasury shares.

88,051

91,401

4. For calculating “Net assets per share”, the Company’s own stocks which are held by the trust (BBT) (1,077 and 1,022
thousands shares for previous and current fiscal year, respectively) are included in the treasury stocks which are excluded
from the calculation of number of shares outstanding at end of year.
For calculating “Profit per share”, the Company’s own stocks which are held by the trust (BBT) (1,086 and 1,035
thousands shares for previous and current fiscal year, respectively) are included in the treasury stocks which are excluded
from the calculation of weighted average number of shares.

(3) Disposal price¥1,018 ($7.65) per share(4) Total amount of shares to be disposed¥49,882,000 ($375 thousand) *1(5) Method of disposal of treasury shares
Third-party allotment(6) Recipient of treasury shares to be disposed of
Employee stock ownership plan of the Company(7) Other
With respect to this disposal of treasury shares, the Company has filed a securities registration
statement in accordance with the Financial Instruments and Exchange Act.

116 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.
- 50 -- 51 -

Integrated Report 2023 117

Corporate Data

Notes to Consolidated Financial Statements

Supplementary Information to Consolidated Financial Statements

Note *1 The number and the total amount of shares to be disposed of are maximum values, and the actual number and thetotal amount of shares to be disposed of are expected to be fixed according to the number of members of the employee stock
ownership plan of the Company after the completion of the promotion for admission to the employee stock ownership plan.

(v) Supplementary Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

[Detailed Schedule of Bonds]
No items to report.

[Detailed Schedule of Borrowings]

Classification
Short-term borrowings
Long-term borrowings due within one
year
Lease obligation due within one year

At the beginningof the fiscal year¥
239,210―¥

Repayment
due
―
―

―

―

―

4,000

232,700

0.049 %

―

―

―

―
From
January2025
To April
2031―

1,858,400
496,000

2,190,400
451,000(0.013)%0.004 %――

2,967,110――

Long-term borrowings(except for due within one year)
Lease obligation(except for due within one year)
Other interest-bearing liabilities:
Call money (due within one year)
Commercial papers (due within one
year)
Total

Millions of yen
2023
At the end of the
Averagefiscal year
interest rates¥
92,0100.020 %
1,000
0.120 %

2,597,610¥

Notes:
1 Average interest rates are calculated based on the interest rates at the end of the fiscal year.
2 Cash collateral received for securities lent is excluded from other interest-bearing liabilities.
3 The amounts of long-term borrowings (except for due within one year) due within five years of the end of the fiscal year are
as follows:

Due after one
year throughtwo years
Long-term borrowings¥

149,800

118 Japan Securities Finance Co., Ltd. Integrated Report 2023

Millions of yen
2023
Due after two
Due after three
years throughyears throughthreefour years
years
¥
― ¥
―

Japan Securities Finance Co., Ltd.
- 52 -- 53 -

Due after four
years throughfive years¥

79,900Integrated Report 2023 119

Corporate Data

Supplementary Information to Consolidated Financial Statements

Supplementary Information to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Classification
Short-term borrowings
Long-term borrowings due within one
year
Lease obligation due within one year

At the beginningof the fiscal year$
1,798,841―

Long-term borrowings(except for due within one year)
Lease obligation(except for due within one year)
Other interest-bearing liabilities:
Call money (due within one year)
Commercial papers (due within one
year)
Total

―

―

30,0791,749,887

0.049 %―――

13,975,033
3,729,884$

19,533,839(2) Other

Thousands of U.S. dollars
2023
At the end of the
Averagefiscal year
interest rates$
691,9080.020 %
7,519
0.120 %―$

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2023

Quarterly information for the current fiscal year
Repayment
due
―
―
―
From
January2025
To April
2031―

16,471,649
3,391,487(0.013)%0.004 %――

22,312,453――

Notes:
1 Average interest rates are calculated based on the interest rates at the end of the fiscal year.
2 Cash collateral received for securities lent is excluded from other interest-bearing liabilities.
3 The amounts of long-term borrowings (except for due within one year) due within five years of the end of the fiscal year are
as follows:

Due after one
year throughtwo years
Long-term borrowings$

1,126,485

Thousands of U.S. dollars
2023
Due after two
Due after three
years throughyears throughthreefour years
years
$
― $
―

Due after four
years throughfive years$

Cumulative period
Operating revenue
Profit before income taxes
Profit attributable to owners of parentFirst
quarter¥
11,0922,870
2,063

Profit per share (Cumulative period)
Profit per share (Quarterly period)

Cumulative period
Operating revenue
Profit before income taxes
Profit attributable to owners of parentFirst
quarter
¥
23.10
23.10

Secondquarter
¥
46.09
22.98

Third
quarter
¥
66.71
20.59

Fourthquarter
¥
67.76
0.64

First
quarter$
83,41821,58815,518

Thousands of U.S. dollars
2023
SecondThird
quarterquarter$
158,531 $237,919
43,66562,08730,91144,457

Fourthquarter$
319,737
62,212
44,869First
quarter
$
0.17
0.17

U.S. dollars
2023
SecondThird
quarterquarter$
0.34 $
0.50
0.17
0.15

Fourthquarter
$
0.50
0.00

Profit per share (Cumulative period)
Profit per share (Quarterly period)

Japan Securities Finance Co., Ltd.

Integrated Report 2023 121

120 Japan Securities Finance Co., Ltd. Integrated Report 2023
- 54 -

Fourthquarter¥
42,518
8,273
5,966

Yen
2023

600,842[Detailed Schedule of Asset Retirement Obligations]Pursuant to Article 92-2 of the Regulations for Consolidated Financial Statements, this information
has been omitted because the balance of asset retirement obligations at the beginning and at the end of the
fiscal year ended March 31, 2023 was less than 1/100th of the balance of liabilities and net assets at the
beginning and at the end of the fiscal year ended March 31, 2023.

Millions of yen
2023
SecondThird
quarterquarter¥
21,081 ¥
31,638
5,806
8,256
4,110
5,911

- 55 -

Corporate Data

122 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.

Integrated Report 2023 123

Corporate Data

124 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.

Integrated Report 2023 125

Corporate Data

126 Japan Securities Finance Co., Ltd. Integrated Report 2023

Japan Securities Finance Co., Ltd.

Integrated Report 2023 127

Corporate Data

Shareholder and Investor Information
Share Information

Company Information(As of March 31, 2023)

Company Profile

Shares Held by Shareholder Type(Thousands)

Total number of authorized shares

200,000,000

Total number of issued and outstanding shares

96,000,000

Number of shareholders

1

Financial institutions
21,000 (21.9%)

Treasury stock
8,7701 (9.1%)

Securities
companies
5,657 (5.9%)

Foreign investors
37,645 (39.2%)

10,561

1. T otal before the retirement of 8,000,000 shares of treasury stock on April 20, 2023,
upon which the total became 88,000,000 shares issued and outstanding.

Individuals
and others
15,161 (15.8%)

Other Japanesecompanies
7,764 (8.1%)(As of March 31, 2023)

Name

Japan Securities Finance Co, Ltd.

Representative

Shigeki Kushida, Representative Executive Officer & President

Head office

1-2-10 Nihonbashi-Kayabacho, Chuo-ku, Tokyo 103-0025, Japan

Established

July 1927

Incorporated

February 1950 (Newly launched as a securities finance company)

Capital¥10 billion

Stock listing

Tokyo Stock Exchange Prime Market

Main business

Securities finance business based on the Financial Instruments and Exchange Act(Loans for margin transactions, securities financing, and securities investment)

Major Shareholders (Top 10)
Number of shares held(Thousands)

Shareholding ratio2(%)

THE SFP VALUE REALIZATION MASTER FUND LTD.

12,624

14.47

The Master Trust Bank of Japan, Ltd. (Trust account)

10,214

11.70

Capital Market Promotion Foundation

4,654

5.33

THE CHASE MANHATTAN BANK, N.A. LONDON SPECIAL OMNIBUS SECS
LENDING ACCOUNT

4,307

4.93

Mizuho Bank, Ltd.

3,536

4.05

Custody Bank of Japan, Ltd. (Trust account)

3,480

3.99

INTERTRUST TRUSTEES (CAYMAN) LIMITED SOLELY IN ITS CAPACITY AS
TRUSTEE OF JAPAN-UP

3,109

3.56

INTERTRUST TRUSTEES CAYMAN LIMITED AS TRUSTEEOF JAPAN-UP UNIT TRUST

1,725

1.97

STATE STREET BANK WEST CLIENT - TREATY 505234

1,670

1.91

BNYM AS AGT/CLTS 10 PERCENT

1,479

1.69

A variety of information about the JSF Group, including Company profile, news releases, financial details and IR information,
is available on our website, which is optimized for smartphone viewing.
We also offer an e-mail notification service for registered users, providing timely updates on news releases and IR
announcements.

https://www.jsf.co.jp/english/about/

2. T he shareholding ratio has been calculated based on the total number of shares issued and outstanding less the total number of shares of treasury stock held by the Company asof March 31, 2023 (8,770,527).

Share Price(Yen)

JSF (Left axis)

WebsiteCorporate Website

Investor Relations

https://www.jsf.co.jp/english/

https://www.jsf.co.jp/english/ir/

E-mail Notification Service

Loans for Margin Transactions

https://www.jsf.co.jp/english/ir/mail/https://www.taisyaku.jp/english/

TOPIX (Right axis)

1,500

3,000

1,200

2,500

900

2,000

600

1,500

300

1,000
2013

2014

2015

2016

2017

128 Japan Securities Finance Co., Ltd. Integrated Report 2023

2018

2019

2020

2021

2022

2023

Japan Securities Finance Co., Ltd.

Integrated Report 2023 129