AIZAWA SECURITIES GROUP CO., LTD.

Consolidated Financial Summary under Japanese GAAPFor the Nine months ended December 31, 2022
January 27, 2023
Company Name
Listed Stock Exchange
Securities Code
URL
Representative
Contact Person

AIZAWA SECURITIES GROUP CO., LTD.
Tokyo Stock Exchange Prime Market
8708
https://www.aizawa-group.jp/
Takuya Aizawa, President & CEO
Kazuhiro Mashiba, Director & CFO

Scheduled date of filing quarterly report
Scheduled date of dividend payment
Supporting explanatory documents on financial results
Briefing on financial results

February 9, 2023
-YES
NO
(All figures are rounded off to the nearest million yen)

1. Consolidated financial summary (From April 1, 2022 to December 31, 2022)(1) Consolidated business results(% represents year-on-year change)

Operatingrevenue％

Nine months ended December 31, 2021

9,347
12,515

Operatingprofit (loss)％

million yen％

million yen△25.3 8,988
2.7 12,385

△27.4
2.3

△2,206△204――△1,7101,345

Note: Comprehensive income

Profit (loss)
attributable toowners of parent

Ordinary
profit (loss)

million yen

million yen
Nine months ended December 31, 2022

Net operating
revenue％million yen％― △1,207
3,224
△14.1

―
△23.5

Nine months ended December 31, 2022: △1,080 million yen (----% vs previous year same period)
Nine months ended December 31, 2021: 2,006 million yen (△76.8% vs previous year same period)

Earnings per share

Diluted earnings per share

yen

yen

Nine months ended December 31, 2022

△31.42―Nine months ended December 31, 2021

81.72

―

Note: We have introduced ESOP, and average number of company’s share bought under this program for the period under review are being
accounted under company’s own treasury shares.

(2) Consolidated financial position
Total assets

As of December 31, 2022
Fiscal year ended March 31, 2022
Note: Shareholders' equity
As of December 31, 2022: 52,570 million yen

Net assets

Shareholders'equity ratio

Net assets
per share

million yen

million yen％

yen

104,792
104,723

55,77358,02950.2
53.2

1,381.65
1,440.62

As of March 31, 2022: 55,712 million yen

AIZAWA SECURITIES GROUP CO., LTD.

2．Dividends
Dividend per share
End of 1Q

Fiscal year ended 2022
Fiscal year ending 2023

End of 2Q

yen
―
―

yen
13.00
13.00

End of 3Q

yen――

End of 4Q

Annual Total

yen
15.00

yen
28.00

―

―

Fiscal year ending 2023 (Forecast)

3. Earning forecast for the fiscal year ending March 31, 2023 (Consolidated)
The Group operates principally in the financial securities business, and its operating results are likely to be affectedby economic and market fluctuations. Due to such nature of its business and consequential difficulty in predicting its
performance, the group does not disclose the forecast of operating results. Such forecasts may mislead the investors.
Instead of it, as we finalize the financial results, we release the preliminary numbers for the quarterly and yearly
results.
※Notes(1) Important changes in subsidiaries during the term
(Changes pursuant to the subsidiaries that lead to a change in the scope of consolidation)
New: 1 (Company name: Ariake Secondary Fund Ⅲ LP)
Exclusion: None
(2) Accounting treatments specific to quarterly financial statements

YES

NO

(3) Changes in accounting policies, changes in accounting estimates and retrospective restatements
YES1) Changes in accounting policies based on revisions of accounting standard
NO2) Changes in accounting policies other than item 1)above
NO3) Change in accounting estimatesNO4) Retrospective restatements(4) Number of issued shares (Common stock)1) Number of shares issued at the end of the term including treasury shares
As of December 31, 2022: 47,525,649 shares
As of March 31, 2022: 47,525,649 shares
2) Number of treasury shares at the end of the term
As of December 31, 2022: 9,476,751 shares
As of March 31, 2022: 8,853,110 shares
3) Average number of shares outstanding (Cumulative)
As of December 31, 2022: 38,416,036 shares
As of December 31, 2021: 39,457,167 shares※ This quarterly financial summary is not subject to quarterly review procedures by certified public accountants
or audit corporations.
※ Explanation on forecasts
The group operates principally in the financial securities business, and its operating results are likely to be affectedby market fluctuations. Due to such nature of its business and difficulty in predicting its performance, group does
not forecast on business results and dividends. At the end of the term, we make efforts to release the preliminary
numbers, as we finalize the financial results.

AIZAWA SECURITIES GROUP CO., LTD.

Supporting Materials: Table of contents
1. Qualitative information for the Nine months ended December 31, 2022
(1) Explanation of management results ····················································································· 1(2) Explanation of the financial results ····················································································· 2(3) Explanation on the forecast of consolidated business results ······················································· 22.

Financial statements and major notes(1) Consolidated balance sheets ······························································································ 3(2) Consolidated statements of income and comprehensive income statement ········································ 5(3) Notes on quarterly consolidated financial statements ································································· 7(Notes on going concern assumption) ··················································································· 7(Notes on material changes in shareholders' equity) ·································································· 7(Change in accounting policy) ··························································································· 7(Additional information) ·································································································· 7(Important subsequent events) ··························································································· 83.

Supplementary information
Consolidated business results for the Nine months ended December 31, 2022
(1) Commission received ······································································································ 9(2) Net trading income ········································································································· 9(3) Comparative quarterly consolidated statements of income ························································ 10

AIZAWA SECURITIES GROUP CO., LTD.

1. Qualitative information for the Nine months ended December 31, 2022
(1) Explanation of Management results

For the period under review (April 1, 2022 to December 31, 2022), despite the prolonged concerns over
COVID-19, Russia-Ukraine war and rising inflation, economic activities have partially restarted worldwide
and started regaining the momentum.
In Japan, household consumption picked up as economic activity regained momentum from summer.
Japanese yen continued to depreciate against USD and touched 150 yen for the first time since 1990. The
price of food, electricity and gas continued to rise due to the rise in import prices. As in other countries, thesituation remains unstable, with a mixture of uncertainties. For the period under review, Nikkei 225 averageindex closed down 6.2% at 26,094.50 points.
In U.S. stock market, technology stocks were under pressure as central bank increased the interest rate tocurb the rising inflation. CPI after started rising since the spring of 2021, witnessed a 9% YoY increase forthe first time in 40 years. FOMC, which aims to maximize employment and stabilize the consumer prices,
hiked the benchmark interest rates at all six FOMC meetings held since May, 2022. With the benchmark
rates above 4%, stock markets may be volatile as the speculation over maintenance or cut in the benchmark
rates continue.
In Asia, currencies depreciated against USD due to continuous hike in benchmark rates by U.S. This led toincrease in inflation due to rise in import prices. Southeast Asian countries hiked the benchmark rates several
times and tightened the monetary policy to curb currency depreciation and rising inflation. The economiesof these countries remained generally firm, supported by recovering domestic demand and strong exports.
For the period under review, Vietnam’s VN Index fell by 32.5% led by increase in benchmark interest rates
and new restrictions applied to real estate. The stock indexes of Indonesia, Thailand, and the Philippines
also declined, resulting in an overall weaker performance. China's continuation to its zero-corona policy
and the leadership changes made at the National congress of Chinese Communist Party in October caused
concerns about an economic downturn and tightening of regulations. However, stock prices have been on arecovery trend after steps to deregulate the zero-corona policy and bail out real estate were taken in
November, 2022.
Under such conditions, group is working with the management philosophy of "Making life better throughsecurities investment" to provide the asset building services in line with the best customer satisfaction.
Group is focusing on one of its principle of "thoroughly client-oriented", of the medium-term management
plan "Define Next 100 years – More and more for clients", implemented this fiscal year. Group is aiming
to establish an asset-building business through close communication with our clients.
In the asset management business, AIZAWA ASSET MANAGEMENT Co., Ltd., concluded the second
close of fund raising in October for its 3rd secondary fund “Ariake Secondary Fund Ⅲ LP”.
In the brokerage business, AIZAWA SECURITIES Co., Ltd., opened a new co-working space near thecampus of Shizuoka University in collaboration with its alliance partner Shizuoka University. The facility
is open to junior and senior high school students, university students, and adults to support new
entrepreneurs.
Group will continue to provide a good working environment where all employees can exercise their abilities
while maintaining a balance between work and family life. In December, AIZAWA SECURITIES Co., Ltd.
received "KURUMIN" certification from the Minister of Health, Labor and Welfare as a "Company
Supporting Child-care".
As part of our ongoing efforts to promote cooperation with educational institutions, our alliance partners;
Ube Kojo High School in Yamaguchi Prefecture and Hitachi-Omiya High School in Ibaraki Prefecture
exchanged opinion online on start-ups, financial and investment education.
Group also conducted financial education class for students of Fukiage Junior High School in Ome City forthe third year in November and December in collaboration with its alliance partner “Ome Shinkin Bank”
and the Tokyo Finance Office of the Kanto Local Finance Bureau of the Ministry of Finance.

1

AIZAWA SECURITIES GROUP CO., LTD.

For the Nine months ended December 31, 2022, break-down of business results are as follow;(Percentage indicates a year-on-year change. The same shall apply hereinafter in this section)（Commission received）
Total commissions received declined by 16.9% to 6,644 million yen, due to decline in the turnover of stocks.
（Net trading income）
Net trading income declined by 56.8% to 1,747 million yen, due to decline in handling of OTC foreign stocks.
（Net financial income）
Net financial income increased by 7.4% to 272 million yen. Under this category, income increased by 2.8% to325 million yen and expenses declined by 15.7% to 53 million yen.
（Other operating revenue and expenses）
Other operating revenues increased by 290.4% to 629 million yen, due to increase in the sales of operational
investment securities. Other operating expenses increased by 356.9% to 305 million yen, due to increase in thecost of operational investment securities.
（Selling, general and administrative expenses）
Selling, general and administrative expenses declined by 11.1% to 11,195 million yen due to decline in personnel
expenses.
（Non-operating profit and losses）
Non-operating profit declined by 68.0% to 496 million yen. Under this category, income were 527 million yen
including the dividend income of 429 million yen. While expenses under this category were 31 million yen
including the interest expenses of 15 million yen and settlement expense of 10 million yen.
（Extraordinary profit and losses）
Total extraordinary profit was 705 million yen. Under this category, income were 742 million yen due to gainfrom sale of investment securities. While losses were 36 million due to loss from sale of investment securities.
With above factors, for the reporting period, operating revenue declined by 25.3% to 9,347 million yen;operating losses was 2,206 million yen; ordinary losses was 1,710 million yen; and loss attributable to owners ofparent was 1,207 million yen.
(2) Explanation of the financial results(All comparisons in this section (2) are with the previous fiscal year ended March 2022)(Assets)
As of at the end of the period under review, total assets was 104,792 million yen, an increase of 68 million yen.
This was mainly due to; increase of 1,946 million yen in cash & deposits; increase of 1,885 million yen in
operational investment securities and a decline of 3,674 million yen in cash segregated as deposits.
(Liabilities)
As of at the end of the period under review, total liabilities was 49,018 million yen, an increase of 2,324 million
yen. This was mainly due to increase of 2,150 million yen in short-term loans payable.
(Net assets)
As for the period under review, total net assets was 55,773 million yen, a decline of 2,256 million yen. Thiswas mainly due to decline of 2,306 million yen in the retained earnings.
(3) Explanation on the forecast of consolidated business results

The group operates principally in the financial securities and investments business. In this industry, there exist
uncertainties due to, but not limited, economic and market conditions. Group tries to monitor and calculate
such market risks and its effects on the business results. Due to such nature of its business and consequential
difficulty in predicting its performance, the group does not disclose the forecast of business results. Instead ofit, as we finalize the financial results, we release the preliminary numbers for the quarterly and yearly results.
2

AIZAWA SECURITIES GROUP CO., LTD.

2. Financial statements and major notes(1) Consolidated balance sheets(million yen)

As ofMarch 31,
2022

As of
December31, 2022

19,12623,41923,418
0
8,601
361
361
776
15,81015,528
281
176
174
2
1,215
69,48821,073
19,74519,7440
10,487
181
181
1,463
15,897
15,730
167
79
71
7
1,890
70,818

8,160
241
182
58
26,815
24,7911,067
959△335,217

8,767
146
97
49
25,046
22,796
1,136
1,118
△3
33,9611
16
17
104,7230
11
12
104,792

AssetsCurrent assets
Cash and deposit
Cash segregated as deposits
Cash segregated as deposits for customers
Other deposits
Operational investment securities
Trading products
Trading securities and otherTrade date accrual
Margin transaction assets
Loans on margin transactions
Cash collateral pledged for securities borrowing on margin transactions
Advances paid
Advances paid to customers
Other advance payments
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
OthersInvestments and other assets
Investment securities
Net defined benefit asset
OthersAllowance for doubtful accounts
Total non-current assets
Deferred assets
Deferred organization expenses
Business commencement expenses
Total deferred assets
Total assets

3

AIZAWA SECURITIES GROUP CO., LTD.

(million yen)

Liabilities
Current liabilities
Trading products
Trading securities and other
Derivatives trading
Margin transaction liabilities
Borrowings on margin transactions
Cash received for securities lending on margin transactions
Loans payable secured by securities
Cash received on debt credit transaction of securities
Deposits received
Deposits from customers
Other deposits
Guarantee deposits received
Short-term loans payable
Income taxes payable
Provision for bonuses
Provision for director bonuses
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term borrowings
Deferred tax liabilities
Provision for share based remuneration
Other non-current liabilities
Total non-current liabilities
Reserves under special laws
Reserve for financial instruments transaction liabilities
Total reserves under special laws
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation reserve
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

4

As of
March 31,
2022

As of
December31, 2022

117
117
0
1,791
1,115
675
4,800
4,800
20,51418,088
2,425
4,937
3,795
1,212
423
27
819
38,440

60
60
―
1,287
722
564
5,587
5,587
21,001
14,558
6,443
5,339
5,945
81
168
―
943
40,416

3,036
4,553
226
290
8,107

3,550
4,370
266
269
8,456

146
146
46,693146
146
49,0188,000
8,122
36,922△4,79048,2548,000
8,186
34,615△5,27745,524

7,391
85
△19
7,457
2,317
58,029104,723

6,588
474
△17
7,045
3,203
55,773
104,792

AIZAWA SECURITIES GROUP CO., LTD.

(2) Consolidated statements of income and comprehensive income statement
Consolidated statements of income (For the Nine months ended December 31, 2022)(million yen)

Operating revenue
Commission received
Net trading income
Financial revenue
OthersTotal operating revenue
Financial expenses
Other operating expenses
Net operating revenue
Selling, general and administrative expenses
Trading related expenses
Personnel expenses
Real estate expenses
Office expenses
Depreciation
Taxes and dues
Provision of allowance for doubtful accounts
OthersTotal selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Interest income
Dividend income
Profit distributions
OthersTotal non-operating income
Non-operating expenses
Interest expense
Loss on investments in partnership
Cancellation penalty
Settlement expenses
Commission for purchase of treasury shares
OthersTotal non-operating expenses
Ordinary profit (loss)
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Gain on redemption of investment securities
Reversal of reserve for financial instruments transaction liabilities

Total extraordinary income
Extraordinary losses
Loss on sales of non-current assets
Loss on retirement of non-current assets
Loss on sales of investment securities
Loss on liquidation of investment securities
Impairment loss
Total extraordinary losses
Profit (loss) before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Profit (loss)
Profit (loss) attributable to non-controlling owners
Profit (loss) attributable to owners of parent
5

Nine months ended
December 31, 2021

Nine months ended
December 31, 2022

7,994
4,042
316
161
12,515

6,644
1,747
325
629
9,347

63
66
12,385

53
305
8,988

2,063
6,231
1,243
1,859
372
415
0

△204

1,850
5,773
1,124
1,554
268
248
―
375
11,195△2,206

24
1,471
109
32
1,637

23
429
26
47
527

0
69
10
1
3
2
87
1,345

15
0
0
10
1
3
31
△1,710

1
3,091
―
0
3,092

0
729
12
0
742

69
―
43
1
―
114
4,324
1,115
△ 10
1,145
3,178
△ 45
3,224

2
13
15
―
4
36
△1,00480
140
221△1,226△18△1,207403
12,589AIZAWA SECURITIES GROUP CO., LTD.

Consolidated comprehensive income statement (For the Nine months ended December 31, 2022)(million yen)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation reserve

Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Comprehensive income(Description)
Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling owners

6

Nine months ended
December 31, 2021

Nine months ended
December 31, 2022

3,178

△1,226△ 1,253101△ 20△ 1,172
2,006

△803
946
2
145
△1,0801,992
13△1,618538

AIZAWA SECURITIES GROUP CO., LTD.

(3) Notes on quarterly consolidated financial statements(Notes on going concern assumption)

Not applicable.
(Notes on material changes in shareholders’ equity)

Not applicable(Change in accounting policy)

Application of “Accounting standard for fair value measurement”
From the beginning of the consolidated 1st quarter of current accounting period, company has applied the“Accounting standard for fair value measurement” under ASBJ statement no. 31 as of June 17, 2021.
The transitional treatment will be applied in accordance with the paragraph 27-2 of “Accounting standard
for fair value measurement”. New accounting policy will be applied in the future.
There is no impact on the quarterly consolidated financial statements due to change in accounting policy.
(Additional information)

Introduction of ESOPThe company has introduced an Employee Stock Ownership Plan Trust (“ESOP Trust”) from July 22, 2019with the motive to increase the enterprise value over mid to long term. The Company's stock held by the
ESOP Trust is included in treasury shares under net assets with a book value of 619 million yen for 942
thousand shares as of December 31, 2022.

7

AIZAWA SECURITIES GROUP CO., LTD.

(Important subsequent events)
1. Purchase of treasury sharesCompany decided to purchase the treasury shares in accordance with the paragraph 1 of article 459,
company law. Decision was taken in the board meeting conducted on January 28, 2022. Company pursued
the purchase of its treasury shares.
1. Minutes of board meeting on purchase of treasury shares(1) Reason for pursuing purchase of treasury shares
To maintain flexible capital policy and increase the capital efficiency and return on equity(2) Details on purchase of treasury shares
1) Share type:
Common share2) Number of treasury shares:
Maximum of 1,000,000 shares (Within 2.6% of outstanding shares
excluding the treasury shares)
3) Value of treasury share:
Maximum of 1,200 million yen
4) Term for purchase:
From February 1, 2022 to January 31, 2023
5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
2. Details on completed purchase of treasury shares(1) Share type:
Common share(2) Number of shares:
114,900 shares(3) Value of shares:
80 million yen(4) Buyback term:
From January 1, 2023 to January 27, 2023
(5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
In line with above mentioned board decision, the status of purchase of treasury shares as of January 27,
2023 is as follow:(1) Number of treasury shares purchase completed:1,000,000 shares(2) Value of treasury shares purchase completed:
719 million yen
2. Decision to purchase of treasury sharesCompany decided to purchase the treasury shares in accordance with the paragraph 1 of article 459,
company law. Decision was taken in the board meeting conducted on January 27, 2023.
Minutes of board meeting on purchase of treasury shares(1) Reason for pursuing purchase of treasury shares
To maintain flexible capital policy and increase the capital efficiency and return on equity(2) Details on purchase of treasury shares
1) Share type:
Common share2) Number of treasury shares:
Maximum of 400,000 shares (Within 1.1% of outstanding shares
excluding the treasury shares)
3) Value of treasury share:
Maximum of 400 million yen
4) Term for purchase:
From February 1, 2023 to June 30, 2023
5) Mode of purchase:
Direct trade through Tokyo Stock Exchange

8AIZAWA SECURITIES GROUP CO., LTD.

3. Supplementary information
Consolidated business results for the Nine months ended December 31, 2022
(1) Commission receivedA) Breakdown of commission received(million yen)

Nine months ended
December 31, 2021
(A)

Brokerage commission
Equities
Bonds
Beneficiary securities
Commission from underwriting, secondary
distribution
andsolicitation
towards
professional investors
Equities
Bonds
Fee from offering, secondary distribution andsolicitation towards professional investors
Other fees received
Total
B)

Nine months ended
December 31, 2022
(B)

Change(B/A)

Consolidated fiscal year
ended March 31, 2022

4,384
4,315
―
69

3,368
76.8%
3,273
75.9%
―
―
94 137.4%

5,571
5,471
―
99

24

35 142.8%

25

23
1

33 145.0%
1 106.9%

24
1

1,379

1,452 105.3%

1,705

2,205
7,994

1,789
6,644

2,873
10,176

81.1%
83.1%

Product wise breakdown(million yen)

Nine months ended
December 31, 2021
(A)

Equities
Bonds
Beneficiary securities
OthersTotal(2)Nine months ended
December 31, 2022
(B)

4,375
1
2,196
1,421
7,994

3,336
1
2,407
898
6,644

Change(B/A)

76.3%
120.5%
109.6%
63.2%
83.1%

Consolidated fiscal year
ended March 31, 2022

5,556
1
2,820
1,798
10,176

Net trading income(million yen)

Nine months ended
December 31, 2021
(A)

Equities etc.
Bonds, forex etc.
Bonds etc.
forex etc.
Total

Nine months ended
December 31, 2022
(B)

3,490
552
89
462
4,042

1,213
534
78
455
1,747

9

Change
(B/A)

34.8%
96.8%
88.1%
98.5%
43.2%

Consolidated fiscal year
ended March 31, 2022

4,031
719
101
617
4,751

AIZAWA SECURITIES GROUP CO., LTD.

(3)

Comparative quarterly consolidated income statement(million yen)

FY 2022

Operating revenue
Commission received
Brokerage commission
Commission from underwriting, secondary
distribution and solicitation towards
professional investors
Fee from offering, secondary distribution andsolicitation towards professional investors
Other fees received
Net trading income
Financial revenue
OthersTotal operating revenue
Financial expenses
Other operating expenses
Net operating revenue

FY 2023

Third quarter

Fourth quarter

First quarter

Second quarter

Third quarter

ended
December 31

endedMarch 31

ended
June 30

ended
September 30

ended
December 31

2,711
1,503

2,181
1,186

2,010
1,060

2,142
1,080

2,492
1,226

18

0

1

31

2

463

326

363

416

672

726
1,516
105
65
4,399

668
708
105
540
3,535

584
560
93
81
2,746

590
441
114
352
3,401

27
31

23
278

17
51

4,341

3,234

2,676

613
745
116
195
3,199
16
283
2,899

761
2,127
347
549
88
234

627
1,758
392
535
81
60

605
1,958
350
517
75
82

619
1,930
414
496
107
77

625
1,884
359
539
86
87

△0
123

△0
106

―
114

―

―
133

4,232

3,563

3,705

108

△328

△1,028

420
8

281
6

△874
46
18

△303

205
2
311

83

△753

△846

△110

1,069
112

274
9

259
283

326
18

△265

1,268

348

△778

△539

312

Income tax expenses

333

661

131

26

63

Profit (loss)
Profit (loss) attributable to non-controlling interests

934

△312

△909

△566

249

△6

9

△12

△8

1

Profit (loss) attributable to owners of parent

940

△322

△897

△558

247

Selling, general and administrative expenses
Trading related expenses
Personnel expenses
Real estate expenses
Office expenses
Depreciation
Taxes and dues
Provision of allowance for doubtful accounts
OthersTotal selling, general and administrative expenses
Operating profit (loss)
Non-operating income
Non-operating expenses
Ordinary profit (loss)
Extraordinary income
Extraordinary losses
Profit (loss) before income taxes

10

128
3,773

18

△29
3,412

3,716
199
5
156