AIZAWA SECURITIES CO., LTD.

Consolidated Financial Summary under Japanese GAAPFor the three months ended June 30, 2021
July 30, 2021
Company Name
Listed Stock Exchange
Securities Code
URL
Representative
Contact Person

Aizawa Securities Co., Ltd.
Tokyo Stock Exchange Section 1
8708
https://www.aizawa.co.jp
Takuya Aizawa, President & Representative Director
Kazuhiro Mashiba, Director & Managing Executive Officer

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

August 5, 2021
N.A
YES
NO
(All figures are rounded off to the nearest million)

1. Consolidated financial summary (From April 1, 2021 to June 30, 2021)(1) Consolidated business results(% represents year-on-year change)

Operatingrevenue

Net operating
revenue

OperatingprofitOrdinary
profitmillion yen％

million yen％

million yen

％

3,657
3,571

2.4
1.6

3,625
3,543

2.3
1.6

△195
97

―
―

Three months ended June 30, 2021
Three months ended June 30, 2020

Note: Comprehensive income

Profit attributable toowners of parent％

million yen％

1,155 227.4
353
6.3

949
707

34.2
141.3

million yen

Three months ended June 30, 2021: 1,375 million yen
Three months ended June 30, 2020: 2,467 million yen

Earnings per share

Diluted earnings per share

yen

yen

Three months ended June 30, 2021

23.83

―

Three months ended June 30, 2020

16.93

―

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 June 30, 2021
Fiscal year ended March 31, 2021
Note: Shareholders' equity
As of June, 2021: 57,952 million yen

Net assets

Shareholders'equity ratio

Net assets
per share

million yen

million yen％

yen

109,731
107,127

59,17958,34652.8
54.0

1,462.16
1,444.30

As of March 31, 2021: 57,811 million yen

AIZAWA SECURITIES CO., LTD.

2．Dividends
Dividend per share
End of 1Q

Fiscal year ended 2020
Fiscal year ending 2021
Fiscal year ending 2022 (Forecast)End of 2Q

yen――

End of 3Q

End of 4Q

Annual Total

yen
11.00

yen
―

yen
21.00

yen
32.00

―

―

―

―

3. Earning forecast for the fiscal year ending March 31, 2021 (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: None
Exclusion: None
(2) Accounting treatments specific to quarterly financial statements

NONO(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
Note: For details please refer to “(change in accounting policy)” under “Note on quarterly consolidated financial statements” on the page 9 of
the supporting materials(4) Number of issued shares (Common stock)1) Number of shares issued at the end of the term including treasury shares
As of June 30, 2021: 47,525,649 shares
As of March 31, 2021: 47,525,649 shares
2) Number of treasury shares at the end of the term
As of June 30, 2021: 7,891,090 shares
As of March 31, 2021: 7,498,290 shares
3) Average number of shares outstanding (Cumulative)
As of June 30, 2021: 39,836,508 shares
As of June 30, 2020: 41,804,439 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 release the preliminary numbers, as we
finalize the financial results.

AIZAWA SECURITIES CO., LTD.

Supporting Materials: Table of contents
1. Qualitative information for the three months ended June 30, 2021
(1) Explanation of management results ····················································································· 1(2) Explanation of business results ·························································································· 1(3) Explanation of the financial results ····················································································· 2(4) 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) ························································································· 103.

Supplementary information
Consolidated business results for the three months ended June 30, 2021
(1) Commission received ···································································································· 11(2) Net trading income ······································································································· 11(3) Comparative quarterly consolidated statements of income ························································ 12
Reference data on business results for the three months ended June 30, 2021
(1) Equity trading volume (excluding futures etc.) ······································································ 13(2) Underwriting & distribution activities ················································································ 13(3) Capital adequacy ratio ··································································································· 14

AIZAWA SECURITIES CO., LTD.

1. Qualitative information for the three months ended June 30, 2021
(1) Explanation of Management results

For the reporting period, global stock markets performed well as the expectation of the economic stability
increased due to the progress in vaccine inoculation.
U.S stock markets were strong and S&P Index rose 8% for the reporting period. Markets were supportedby the buyers as the economy recovered with the progress in vaccine inoculation. Markets turned little
volatile after the sharp rise in CPI announced in April, later the long term interest rates settled down
considering the such increase will be temporary as majority of FOMC members in June meeting hinted onincrease in interest rates in year 2023 and Mr. Powell, Chairman of FRB also hinted on starting debate
over tapering.
With the rise in the number of cases in COVID-19, Japan again declared the state of emergency, leading
negative effects on corporate business activities. For the reporting period, Nikkei 225 average index was
down by 1.3% as the higher weight individual stocks experienced the selling pressure leading all together
sluggish performance of Japanese equity market.
For the reporting period, Asian markets like China, Vietnam, Korea and Taiwan performed well as theworld economy recovered. Shanghai composite index rose by +4.3%, Vietnam VN Index rose by +18.2%,
KOSPI rose by +7.7%, TSEW index rose by +8.1%. On the other hand, Thailand and Indonesia stock
markets were sluggish, performing almost unchanged for the period.
In Japan, though the vaccine inoculation is in progress, country has been in the state of emergency for
number of times. Under such conditions, Aizawa Securities Co., Ltd. Group working with the management
philosophy of "Making life better through securities investment" to provide the asset building services inlieu with the best customer satisfaction. With the COVID-19, company is taking several measures to protect
the safety of clients and employees. While meeting and visiting the clients, company ensures to takemeasures like wearing the mask, take prior appointments etc. Company is also making efforts by promoting
work from home and flexible working time.
Under such situation, company’s new area of concentration in Asset building business is also gaining
popularity due to the increased need for asset building among investors. Company is using its retail branch
network to increase the client base of new investors. As part of this, company opened Tokuyama Consulting
Plaza in April, the third banking securities branch with Saikyo Bank ltd. In June company abolished andmerged branches in western Japan to create a new branch namely Senri-Chuo.
From August 1, 2021, Company will shift its head office within Tokyo from Nihonbashi to Shiodome. All
the group companies will work under holding company to promote the asset building business andbecome a financial group.
(2) Explanation of the business results

For the three months ended June 30, 2021, 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 2.7% to 2,395 million yen, due to decline in the turnover of foreign
stocks.
（Net trading income）
Net trading income increased by 11.2% to 1,115 million yen, due to increase in handling of OTC domestic stocks.
（Net financial income）
Net financial income increased by 20.4% to 86 million yen. Under this category, income increased by 6.5% to103 million yen and expenses declined by 33.8% to 16 million yen.
（Selling, general and administrative expenses）
Selling, general and administrative expenses increased by 10.9% to 3,821 million yen due to increase in realestate expenses.
1

AIZAWA SECURITIES CO., LTD.

（Non-operating profit and losses）
Non-operating profit increased by 428.3% to 1,351 million yen. Under this category, income were 1,355 million
yen including the dividend income of 1,275 million yen and expenses were 4 million yen including the 1 millionof commission paid for purchase of treasury shares.
（Extraordinary profit and losses）
Total extraordinary losses was 189 million yen. Under this category, income were 89 million yen including thegain from sale on investment securities. While losses were 278 million yen including the 277 million yen loss
on valuation of investment securities.
With above factors, for the reporting period, operating revenue increased by 2.4% to 3,657 million yen;operating losses was 195 million yen; ordinary profit increased by 227.4% to 1,155 million yen; and profit
attributable to owners of parent increased by 34.2% to 949 million yen.
(3) Explanation of the financial results(All comparisons in this section (3) are with the end of previous consolidated fiscal year)(Assets)
As of at the end of the period under review, total assets was 109,731 million yen, an increase of 2,603 million
yen. This was mainly due to increase of 1,201 million yen in margin transaction assets and 1,203 million yen in
operational investment securities.
(Liabilities)
As of at the end of the period under review, total liabilities was 50,551 million yen, an increase of 1,770 million
yen. This was due to increase in 2,675 million yen in deposits received and 930 million yen in deferred tax
liabilities.
(Net assets)
As for the period under review, total net assets was 59,179 million yen, an increase of 833 million yen. Under
this category, net assets declined by 414 million yen led by increase in treasury shares; and valuationdifference on available-for-sale securities increased by 435 million yen; non-controlling interests increased by
693 million yen.
(4) 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 CO., LTD.

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

As ofMarch 31,
2021

As of
June 30,
2021

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
Allowance for doubtful accounts
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

16,707
27,74027,739
0
1,117
244
244
817
16,297
15,638
658
163
160
3
1,351
△0
64,44016,401
26,34926,349
0
1,950
944
944
335
17,49817,235
263
271
268
2
1,579
△0
65,332

6,701
372
295
77
35,61233,530
1,069
1,017
△5
42,686

7,257
347
267
80
36,791
34,7331,093
969△544,395―――
107,1272
0
2
109,731AIZAWA SECURITIES CO., LTD.

(million yen)

As ofMarch 31,2021

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
June 30,
2021

94
85
9
1,861
585
1,276
2,930
2,930
24,982
21,024
3,957
5,482
3,795
994
652
31
1,204
42,029

226
226
―
1,800
1,018
781
2,520
2,520
27,657
20,638
7,019
4,969
3,795
63
166
―
903
42,103

934
5,150
151
369
6,605

2,444
5,352
170
333
8,301

146
146
48,781146
146
50,551

8,000
8,087
35,388△3,34848,1288,000
8,087
35,487△3,76247,811

9,607
―
75
9,683
534
58,346
107,127

10,04328
68
10,1401,227
59,179109,731AIZAWA SECURITIES CO., LTD.

(2) Consolidated statements of income and comprehensive income statement
Consolidated statements of income (For the three months ended June 30, 2021)(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
Dividend income
Profit distributions
Reversal of allowance for doubtful accounts
Gain on investments in partnership
OthersTotal non-operating income
Non-operating expenses
Loss on investments in partnership
Cancellation penalty
Settlement expenses
Commission for purchase of treasury shares
OthersTotal non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of investment securities
Reversal of reserve for financial
instruments transaction liabilities
Total extraordinary income
Extraordinary losses
Loss on sales of investment securities
Loss on valuation of investment securities
Total extraordinary losses
Profit before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
ProfitProfit/loss attributable to non-controlling owners
Profit attributable to owners of parent
5

Three months ended
June 30, 2020Three months ended
June 30, 2021

2,463
1,003
96
7
3,571
24
2
3,543

2,395
1,115
103
43
3,657
16
15
3,625

547
1,908
290
495
74
55
0
73
3,446
97

579
1,930
421
528
141
88
0
131
3,821
△195

254
14
0

1,275
26

―

36
17
1,355

9
278
17
0

―

―

5
0
23
353

1
1
1
0
4
1,155

478

89

12
490

0
89

―

1
277
278
966
35
11
46
919
△ 30
949

―

118
118
724
8
8
17
707
―

707

AIZAWA SECURITIES CO., LTD.

Consolidated comprehensive income statement (For the three months ended June 30, 2021)(million yen)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities

Three months ended
June 30, 2020Three months ended
June 30, 2021

707

919

1,944
△4
1,939
2,647

435
68
△6
496
1,416

2,647

1,405

―

10

―

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
owners6

AIZAWA SECURITIES 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)

1. Application of “Accounting standard for revenue recognition”
From the beginning of the consolidated 1st quarter of current accounting period, company has applied the“Accounting standard for revenue recognition” under ASBJ statement no. 29 as of March 31, 2020.
Company will recognize the revenue to be received in exchange for the good or service when control ofthe promised good or service is transferred to the customer.
There is no impact on the quarterly consolidated financial statements due to change in accounting policy.
2. 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. 30 as of July 04, 2019.
The new accounting policy will be applied in future and the transitional treatment will be applied inaccordance with the paragraph 19 of “Implementation guidance on disclosures about fair value offinancial instruments under ASBJ statement no. 19” and Paragraph 44-2 of “Accounting Standard for
Financial Instruments under ASBJ Statement No. 10”.
There is no impact on the quarterly consolidated financial statements due to change in accounting policy.
(Additional information)

1. 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 320 million yen for 483
thousand shares as of June30, 2021.
2. Shift to holding company structure through company split/establishment of subsidiary company
At the board of directors meeting held on February 12, 2021, it was resolved to shift to the company to theholding company structure with effect from October 1, 2021. It was resolved that company will establish
two 100% subsidiary companies “AIZAWA SECURITIES DIVISION PREPARATION CO., LTD.” for the
purpose of inheriting the securities brokerage business and “LIFE DESIGN PARTNERS CO., LTD.” forinitiating the IFA business. Both these companies were established on April 1, 2021.
At the board of directors meeting held on April 28, 2021, it was resolved that with effect from October 1,
2021; a) securities brokerage business will be inherited to its subsidiary company “AIZAWA SECURITIESDIVISION PREPARATION CO., LTD.”, b) investment business will be inherited to “AIZAWA Investments
Co., Ltd.” Agreements in relation to this absorption-type company split are concluded.
At the General annual shareholder meeting conducted on June 25, 2021, it was resolved that company will
shift to the holding company structure.
After the completion of absorption-type company split, company plans to change its name to “AIZAWASECURITIES GROUP CO., LTD.” on October 1, 2021. The shift to the holding company structure is
subject to fulfillment of necessary registration and approval from the regulators to be done by “AIZAWASECURITIES DIVISION PREPARATION CO., LTD.”.
(1) Purpose of change to holding company structure
Company works with management philosophy of "Making life better through securities investment" withthe vision of "Hope courier" & "Beyond the securities company" to provide the asset building services inlieu with the best customer satisfaction.
The company conducts business in finance industry that has been going through lot of changes and facing
fierce competition. With the COVID 19 pandemics, the traditional sales channels of visiting client’s needsa change, there is a decline in brokerage commission led by online brokers, and lot of new entrants are
increasing in the securities brokerage business. In such an environment, a stronger organizational structurethat enables appropriate and prompt decision-making and agile business strategy execution is required.
With the change to a holding company structure, company can conduct the business under one umbrella,work on swift decision making, strengthening the financial position, allocating the management resources
7

AIZAWA SECURITIES CO., LTD.

and creating the new business opportunities,
Company (including subsidiary and affiliates) have divided the businesses within the group into fourbusinesses: securities business, financial product brokerage business (IFA), asset management business, andinvestment business. With this new group organization structure, group aims to serve as a financial service
provider catering high level service.
(2) Establishment of subsidiary companies toward the shift to holding company structure①
Name

AIZAWA SECURITIES DIVISION PREPARATION CO., LTD.
(Plan to change name to AIZAWA SECURITIES CO., LTD. from October 1, 2021)

Head office
Representative Name・Title
Business details

1-20-3, Nihonbashi, Chuo-ku
Takuya Aizawa, CEO
Preparation work to inherit securities brokerage business throughabsorption type split
300 million yen
April 1, 2021
30,000End of MarchAIZAWA SECURITIES CO., LTD.
Capital relation
Established as 100% subsidiary company
Personnel relation
Appointed directors from the company
Business relation
As the business has not yet started, currently nobusiness dealing relation exist with the company

CapitalEstablishment date
Shares issued
Fiscal year
Shareholder(s)Relationshipwithcompany

the

②
Name
Head office
Representative Name・Title
Business details
CapitalEstablishment date
Shares issued
Fiscal year
Shareholder(s)Relationshipwiththecompany

LIFE DESIGN PARTNERS CO., LTD.
1-20-3, Nihonbashi, Chuo-ku
Yoshikazu Igarashi, CEO
Preparation work to initiate the IFA business30 million yen
April 1, 2021
3,000
End of MarchAIZAWA SECURITIES CO., LTD.
Capital relation
Established as 100% subsidiary company
Personnel relation
Appointed directors from the company
Business relation
As the business has not yet started, currently nobusiness dealing relation exist with the company(3) Details of holding company structure(1) Schedule
Resolution for change in structure at Board of director meeting
Approval of establishment of subsidiary companies at Board of director meeting
Establishment of subsidiary companies
Approval of company split agreement at Board of director meeting
Conclusion of company split agreement
Approval of company split agreement at Ordinary shareholders meeting
Effective date of company split

February 12, 2021
February 12, 2021
April 1, 2021
April 28, 2021
April 28, 2021
June 25, 2021
October 1, 2021 (planned)(2) Structure
After conducting the absorption-type company split, company plans to inherit its securities brokeragebusiness to its 100% subsidiary company “AIZAWA SECURITIES DIVISION PREPARATION CO.,LTD” and inherit investment business to its 100% subsidiary company “AIZAWA Investments Co., Ltd.”
Company will continue its listing at Tokyo Stock Exchange as a holding company.
(3) Contents
In the process, AIZAWA SECURITIES DIVISION PREPARATION CO., LTD will issue new
200,000 common shares which will be allocated to the company. AIZAWA Investments Co., Ltd. will
also issue new 20,000 common shares which will be allocated to the company.
8

AIZAWA SECURITIES CO., LTD.

(4) Handling of share acquisition rights and bonds with share acquisition rights associated with theabsorption-type company split
Not applicable(5) Increase/Decrease in capital due to absorption-type company split
There is no change in capital due to absorption-type company split(6) Rights inherited towards succeeding companies
Each succeeding company will succeed all the contents from the company as mentioned in theabsorption-type company split agreement from the effective date. While, the debt that the succeedingcompany will inherit from the Company shall be based on the method of overlapping debt underwriting.
(7) Debt obligation fulfillment
After the absorption-type company split, Assets of the succeeding company are expected to be morethan the amount of liabilities. At the current stage it is assumed that succeeding company will have notrouble in fulfilling its debt obligation. Therefore, it is considered that with the absorption-typecompany split, company and the succeeding company shall have no issues in the fulfillment of debt
obligations.
(4) Post absorption-type company split (Planned as of October 1, 2021)① Split company description
Name
Head office
Representative Name・Title
Business details
CapitalFiscal year

AIZAWA SECURITIES GROUP CO., LTD.
(Plan to change name from AIZAWA SECURITIES CO., LTD. on October 1, 2021)

1-9-1, Tokyo shiodome building, Higashi-Shinbashi, Minato-ku
Takuya Aizawa, CEOManagement of group companies
8,000 million yen
End of March② Succeeding companies description
Name
AIZAWA SECURITIES CO., LTD.
Head office
1-9-1, Tokyo shiodome building, Higashi-Shinbashi, Minato-ku
Representative Name・Title Takuya Aizawa, CEOBusiness details
Financial instrument business
Capital3,000 million yen
Fiscal year
End of March
Name
Head office
Representative Name・Title
Business details
CapitalFiscal year

AIZAWA Investments CO., LTD.
1-9-1, Tokyo shiodome building, Higashi-Shinbashi, Minato-ku
Kazuhiro Mashiba, CEO
Investment & Real estate business
300 million yen
End of March(5) Forecast
In this absorption type company split, no major effect on the consolidated business results are expected, as
all the succeeding companies are 100% subsidiary companies;

9

AIZAWA SECURITIES CO., LTD.

(Important subsequent events)

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 February 26, 2021. 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 1,500,000 shares (Within 3.7% of outstanding shares
excluding the treasury shares)
3) Value of treasury share:
Maximum of 1,800 million yen
4) Term for purchase:
From March 1, 2021 to February 28, 2022
5) Mode of purchase:
Direct trade through Tokyo Stock Exchange
2. Details on completed purchase of treasury shares
1) Share type:
Common share2) Number of shares:
103,700 shares
3) Value of shares:
105 million yen
4) Buyback term:
From July 1, 2021 to July 26, 2021
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 26, July 2021
is as follow:
1) Number of treasury shares purchase completed:
736,600 shares
2) Value of treasury shares purchase completed:
761 million yen
Capital increase in AIZAWA SECURITIES DIVISION PREPARATION CO., LTD.
At the board of directors meeting held on June 25, 2021, it was resolved to increase the capital in company’s
subsidiary company “AIZAWA SECURITIES DIVISION PREPARATION CO., LTD.”. The capital was
injected on July 1, 2021 and details for same are mentioned below. Since the total amount of holding capitalin this subsidiary company exceeds 10%, it will be considered as specified subsidiary company.
1. Purpose of capital increase
In the process of shift to the holding company structure, company will inherit the securities brokeragebusiness to AIZAWA SECURITIES DIVISION PREPARATION CO., LTD. The purpose of increase in
the capital is to create a stronger financial base for the inheriting company as it is in process of obtaining
the Type Ⅰ financial instrument business license.
2. Description of subsidiary company
1) Name : AIZAWA SECURITIES DIVISION PREPARATION CO., LTD.
2) Address: 1-20-3, Nihonbashi, chuo-ku, Tokyo
3) Representative Name・Title: Takuya Aizawa, CEO
4) Business details: Preparation work to inherit securities brokerage business through absorption typesplit
3. Description of capital increase1) Capital increase: 2,700 million yen
2) Payment date: July 1, 2021
3) Total capital after capital increase: 3,000 million yen
4) Shareholding percentage after capital injection: 100% shareholder (same as prior capital injection)

10

AIZAWA SECURITIES CO., LTD.

3. Supplementary information
Consolidated business results for the three months ended June 30, 2021
(1) Commission receivedA) Breakdown of commission received(million yen)Three months
ended June 30,
2020
(A)

Brokerage commission
Equities
Bonds
Beneficiary securities
Commission from underwriting, secondary
distribution
andsolicitation
towards
professional investors
Equities
Bonds

Total

Change(B/A)

Consolidated fiscal year
ended March 31, 2021

2,052
1,999
―
53

1,378
1,360
―
17

67.2%
68.1%
―
33.7%

7,868
7,753
―
114

1

3

295.6%

4

0
0

1
1

―
131.2%

3
1

116

425 365.4%

825

293
2,463

589 200.7%
2,395
97.3%

1,701
10,401

Fee from offering, secondary distribution andsolicitation towards professional investors
Other fees received

Three months
ended June 30,
2021
(B)

Note: Due to increase of more than 1,000% in Commission from underwriting, secondary distribution and solicitation towards professional investors inequities as compared to same term previous year, % column is represented by (-)B)

Product wise breakdown(million yen)Three months ended June30, 2020(A)

Three months ended
June 30, 2021
(B)

2,010
1
319
132
2,463

1,372
1
666
356
2,395

Equities
Bonds
Beneficiary securities
OthersTotal(2)Change
(B/A)

68.3%
97.7%
208.5%
269.3%
97.3%

Consolidated fiscal year
ended March 31, 2021

7,819
1
1,608
971
10,401

Net trading income(million yen)

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

Three months ended June30, 2020(A)

Three months ended
June 30, 2021
(B)

772

916

118.7%

4,644

230
61
168
1,003

198
34
163
1,115

86.1%
56.1%
97.1%
111.2%

906
260
645
5,550

11

Change(B/A)

Consolidated fiscal year
ended March 31, 2021

AIZAWA SECURITIES CO., LTD.

(3)

Comparative quarterly consolidated income statement(million yen)

FY 2021

FY 2022First quarter ended

Second quarter

Third quarter

Fourth quarter

First quarter

June 30

ended September 30

ended December 31

ended March 31

ended June 30

2,463
2,052

2,491
1,926

2,564
1,925

2,881
1,964

2,395
1,378

1

1

1

1

3

116

172

209

326

425

Other fees received
Net trading income
Financial revenue
OthersTotal operating revenue
Financial expenses
Other operating expenses

293
1,003
96
7
3,571
24
2

391
1,742
110
19
4,364
25
8

428
1,567
100
22
4,255
20
6

588
1,237
99
23
4,241
20
8

589
1,115
103
43
3,657
16
15

Net operating revenue

3,543

4,331

4,228

4,212

3,625

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

547
1,908
290
495
74
55
0
73
3,446

625
2,239
306
502
98
92
0
101
3,966

603
2,133
302
550
97
107
△0
95
3,889

655
2,084
363
587
144
122
△0
124
4,083

579
1,930
421
528
141
88
0
131
3,821

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

97

364

338

128

△195

278
23

208
△ 13

308
21

65
218

1,355
4

Ordinary profit

353

587

626

△24

1,155

Extraordinary income
Extraordinary losses

490
118

134
16

4,300
691

728
25

89
278

Profit before income taxes

724

705

4,234

678

966

Income tax expenses

17

344

1,088

355

46

Profit

707

360

3,146

322

919

Profit (loss) attributable to non-controlling interests

―

―

―

△1

△30

Profit attributable to owners of parent

707

360

3,146

324

949

Operating profit
Non-operating income
Non-operating expenses

12AIZAWA SECURITIES CO., LTD.

Reference data on business results for the three months ended June 30, 2021
(1) Equity trading volume (excluding futures etc.)（million shares, million yen）

Three months ended June30, 2020(A)
NumberAmountof shares
Total
Proprietarytransaction
Client transaction
Client transaction share
Exchange participation share
Brokerage commission perstock on client transaction

Three months ended
June 30, 2021
(B)
NumberAmountof shares

Change (B/A)

FY 2021

Numberof shares

AmountNumberof shares

Amount394

416,598317

392,451

80.6%

94.2%

1,649

1,839,015

17

57,035

566,03830.7%

115.8%

80

350,132

377
95.7%
0.12%

359,563
86.3%
0.09%

312
98.4%
0.10%

326,412
83.2%
0.08%

82.8%

90.8%

1,569
95.1%
0.13%

1,488,883
81.0%
0.09%

5.26 yen

4.33 yen

4.91 yen(2) Underwriting & distribution activities
Three months ended
June 30, 2020

(A)

Underwriting※(B)

Equities

Number of shares

―

0

―

0

Equities

Amount

―

31

―

48

Bonds

Face value

211

230

108.9%

439

Face value

―

―

―

―

Number of shares

―

0

―

0

Equities

Amount

―

31

―

530

Bonds

Face value

361

662

183.2%

2,999

Beneficiary securities

Face value

114,816

136,333

118.7%

533,028

Commercial Paper & overseas
securities

Face value

―

―

―

―

Commercial Paper & overseas
securities
Equities

Distribution※（million shares, million yen）
Three months
ended June 30,
ChangeFY 20212021(B/A)

Includes secondary offering and private placements

13

AIZAWA SECURITIES CO., LTD.

(3) Capital adequacy ratio(million yen)

Basic items

Complementary
items

(A)

Three months ended
June 30, 2020Three months ended
June 30,2021

As of at the endof FY 2021

45,31647,56547,026

Valuationdifferenceonavailable-for-sale securities

5,698

9,653

9,215

Reserve for financial products
transaction liabilities

169

146

146

0

0

0

(B)

5,868

9,799

9,361

(C)

13,822

22,661

22,269(D)

37,362

34,703

34,118

4,032
912

4,394
820

4,202
734

3,312

3,449

3,389

8,256

8,664

8,325

452.5%

400.5%

409.8%

Allowanceaccounts

for
Total

Deductible assets
Unfixed equity capital(A)+(B)-(C)Market risk
Counterparty risk
Risk items
Basic risk
Total
Capital adequacy ratio

doubtful(E)(D)/(E)×100

14