Japan Securities Finance Co., Ltd. TSE:8511

Japan Securities Finance : INTEGRATED REPORT - 5.Corporate Data (ir2025 05 e)

Published January 21, 2026 at 12:23 a.m. UTC

Source: MarketScreener

11-Year Highlights (Consolidated)

(Millions of yen)

	105th Term FY2014	106th Term FY2015	107th Term FY2016	108th Term FY2017	109th Term FY2018	110th Term FY2019	111th Term FY2020	112th Term FY2021	113th Term FY2022	114th Term FY2023	115th Term FY2024
Operating revenue	20,300	22,035	23,066	26,333	24,321	29,101	30,924	30,138	42,518	50,008	59,486
Gross profit	10,849	10,497	11,173	13,002	12,037	12,266	12,906	13,604	13,753	17,392	18,746
Operating profit	3,025	2,558	2,802	3,881	3,981	4,129	4,777	6,235	6,354	9,928	11,329
Ordinary profit	4,230	3,349	3,611	4,685	5,046	4,894	5,558	7,164	7,601	11,024	12,507
Profit attributable to owners of parent	3,520	2,645	3,078	4,225	3,765	3,556	3,971	5,174	5,966	8,030	10,375
Comprehensive income	8,079	8,410	(469)	6,819	935	(11,571)	10,499	7,889	3,491	15,465	(1,268)
Net assets	137,145	142,030	139,712	143,811	140,793	126,687	135,166	137,996	135,728	144,606	134,346
Total assets	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	13,744,765	13,769,589
Net assets per share (Yen)1	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	1,725.62	1,630.45
Profit per share (Yen)1	33.94	26.90	31.90	44.24	40.02	38.47	43.28	56.61	67.76	94.04	124.61
Capital adequacy ratio (%)2	405.5	344.6	444.4	471.0	408.5	332.2	507.5	348.1	496.1	452.7	367.5
Return on equity (%)	2.59	1.90	2.19	2.98	2.65	2.66	3.03	3.79	4.36	5.73	7.44
Price-earnings ratio (Times)	22.36	16.80	18.55	14.75	14.58	12.81	18.43	16.27	15.01	17.81	14.33
Cash flows from operating activities	(58,989)	247,148	818,189	(290,514)	226,351	275,039	164,459	(122,304)	303,546	383,411	(535,081)
Cash flows from investing activities	(1,085)	(9,959)	(7,507)	(4,440)	(8,652)	(4,794)	2,230	4,907	3,447	4,575	1,745
Cash flows from financing activities	(6,207)	(3,604)	(1,902)	(2,725)	(3,970)	(2,557)	(2,031)	(5,088)	(5,786)	(6,624)	(9,003)
Dividend payout ratio (%)	44.2	59.5	56.4	58.8	55.0	57.2	60.1	53.0	47.2	50.0	67.4
Number of employees [Average number of temporary workers] (Number)	289 [3]	282 [5]	281 [5]	281 [6]	281 [3]	272 [3]	272 [4]	264 [5]	268 [5]	271 [7]	276 [10]

Notes: 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 of shares issued and outstanding at the end of the fiscal year. These shares are also included in treasury shares deducted when calculating the average number of shares 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.

1. Consolidated Financial Statements

(1) Consolidated Financial Statements

(i) Consolidated Balance Sheets

Assets

Cash and deposits ※１ 1,435,297 ※１ 1,977,638

Current assets

(Millions of yen) As of March 31, 2025 As of March 31, 2024

Provision for bonuses for directors (and other officers)

103

116

Other 106,460 126,345

Non-current liabilities

Borrowed money from trust account 575,934 740,130 Total current liabilities 13,315,661 13,275,805

Deferred tax liabilities 1,354 5,416

Long-term borrowings ※１ 315,600 ※１ 316,600

76 74

Deferred tax liabilities for land

Provision for share awards for directors (and other officers)

222

218

revaluation ※７ ※７

Call loans 10,000 20,000

Securities ※１,※５ 96,241 ※１,※５ 185,801

Securities purchased under resale agreements

6,441,120

4,753,614

Operating loans ※１,※３ 796,827 ※１,※３ 1,058,630

Retirement benefit liability 269 243

Asset retirement obligations 58 57

Other	498	581
Total non-current liabilities	319,581	324,353
Total liabilities 13,635,242		13,600,158

Derivative liabilities 1,500 1,160

Other ※１ 92,480 ※１ 164,699 Net assets Allowance for doubtful accounts -111 -83 Shareholders' equity
Total current assets 13,178,942	13,113,382	Share capital	10,000	10,000
Non-current assets		Capital surplus	5,194	5,181
Property, plant and equipment		Retained earnings	125,323	121,036
Buildings and structures 9,098	9,062	Treasury shares	-7,764	-4,847
Accumulated depreciation -7,111	-7,001	Total shareholders' equity	132,754	131,369
Buildings and structures, net 1,986	2,061	Accumulated other comprehensive
Furniture and fixtures 1,312	1,289	income

Cash collateral provided for securities borrowed

4,307,086 4,953,081

Furniture and fixtures, net 360 443

Accumulated depreciation -951 -846

Total property, plant and equipment 5,578 5,769

Land ※７ 3,231 ※７ 3,264

Valuation difference on available-for-sale securities

Deferred gains or losses on hedges 11,673 10,369

-11,778 1,214

Remeasurements of defined benefit plans

1,531

1,484

Revaluation reserve for land ※７ 165 ※７ 168

Investments and other assets

Intangible assets 618 677

Bad debts 63 72

Investment securities ※１,※４,※５ 544,475 ※１,※４,※５ 583,146

Total accumulated other comprehensive income

1,592 13,236

Total non-current assets 590,647 631,383

Retirement benefit asset	3,832	3,226	Total net assets	134,346	144,606
Deferred tax assets	857	—	Total liabilities and net assets	13,769,589	13,744,765
Other	35,283	38,563
Allowance for doubtful accounts	-63	-72	(ii) Consolidated Statement of Income and C	onsolidated Statement of Compre	hensive

Total investments and other assets 584,450 624,936 Total assets 13,769,589 13,744,765

(Millions of yen) As of March 31, 2025 As of March 31, 2024

Income

Consolidated Statement of Income

Fiscal year ended March 31, 2025	Fiscal year ended March 31, 2024
Operating revenue
Interest on loans 5,720	2,895
Interest income on securities purchased 11,246	14,400
Interest income on cash collateral 12,783	3,143

(Millions of yen)

Liabilities

Current liabilities

Call money ※１ 1,506,000 ※１ 1,864,800

Current portion of long-term

1,000

borrowings

※１ 149,800

Securities lending fees

7,990

17,642

Commercial papers 438,466

589,066

Other operating revenue

21,744

12,177

Securities sold under repurchase 8,044,038 5,949,364 agreements

Total operating revenue 59,486 50,259

Operating expenses

Short-term borrowings 92,005 92,010

under resale agreements provided for securities borrowed

Cash collateral received for securities lent

2,549,554 3,762,412

Interest expenses

17,071	2,452
10,122	7,514
9,004	18,986

Interest expenses on securities sold under

Income taxes payable	1,547	1,197	repurchase agreements
Provision for bonuses	550	562	Securities borrowing fees

Other operating expenses	4,541	3,662
Total operating expenses	40,740	32,615	Consolidated Statement of Comprehensive Income
Operating gross profit	18,746	17,644	(Millions of yen)
General and administrative expenses

Provision for bonuses for directors (and other officers)

103

116

Profit 10,375 8,030

Compensation and salaries	3,090	2,962	Fiscal year ended	Fiscal year ended
Retirement benefit expenses	-124	179	March 31, 2025	March 31, 2024

Provision for bonuses 550 562

Valuation difference on available-for-sale securities

-12,993

5,461

Revaluation reserve for land -2 －

Other comprehensive income

Depreciation 486 626

Provision for share awards for directors (and other officers)

21 32

Deferred gains or losses on hedges 1,304 587

Reversal of allowance for doubtful accounts

—

-91

Provision of allowance for doubtful accounts

19 －

Remeasurements of defined benefit plans, net of tax

12 1,277

Other 3,268 3,075

Total general and administrative expenses

7,416

7,463

Non-operating income

Operating profit 11,329 10,180

Dividend income 287 242

－－

Interest income 0 0

Share of other comprehensive income of entities accounted for using equity method

108

Comprehensive income -1,268 15,465

Comprehensive income attributable to owners of parent

-1,268

15,465

Total other comprehensive income ※ -11,644 ※ 7,434 Comprehensive income attributable to

Gain on investments in investment partnerships

Share of profit of entities accounted for using equity method

774 556

Comprehensive income attributable to non-controlling interests

Total non-operating income 1,211 873

Miscellaneous income 97 48

Interest expenses 0 0

Non-operating expenses

Commission for purchase of treasury shares

8 10

Loss on investments in investment partnerships

Total non-operating expenses 34 28

Miscellaneous expenses 0 0

Ordinary profit 12,507 11,024

Extraordinary income
Gain on sale of non-current assets	※ 1,163	—
Gain on sale of investment securities	664	18
Total extraordinary income	1,828	18
Profit before income taxes	14,335	11,043
Income taxes - current	3,784	3,072
Income taxes - deferred	175	-59
Total income taxes	3,959	3,012
Profit	10,375	8,030

－－

Profit attributable to non-controlling interests

Profit attributable to owners of parent 10,375 8,030

Consolidated Statement of Changes in Equity

Previous Fiscal Year (From April 1, 2023 to March 31, 2024)

	Shareholders' equity
	Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders' equity
Balance at beginning of period	10,000	8,878	118,702	-7,655	129,925
Changes during period
Dividends of surplus			-2,870		-2,870
Profit attributable to owners of parent			8,030		8,030
Purchase of treasury shares				-3,802	-3,802
Disposal of treasury shares		9		77	87
Cancellation of treasury shares		-6,532		6,532	—
Transfer from retained earnings to capital surplus		2,825	-2,825		—
Net changes in items other than shareholders' equity
Total changes during period	—	-3,697	2,334	2,807	1,444
Balance at end of period	10,000	5,181	121,036	-4,847	131,369

	Accumulated other comprehensive income					Total net assets
	Valuation difference on available-for-sale securities	Deferred gains or losses on hedges	Revaluation reserve for land	Remeasurements of defined benefit plans	Total accumulated other comprehensive income	Total net assets
Balance at beginning of period	1,214	10,369	168	1,484	13,236	144,606
Changes during period
Dividends of surplus						-6,088
Profit attributable to owners of parent						10,375
Purchase of treasury shares						-3,002
Disposal of treasury shares						99
Net changes in items other than shareholders' equity	-12,993	1,304	-2	47	-11,644	-11,644
Total changes during period	-12,993	1,304	-2	47	-11,644	-10,260
Balance at end of period	-11,778	11,673	165	1,531	1,592	134,346

	Accumulated other comprehensive income					Total net assets
	Valuation difference on available-for-sale securities	Deferred gains or losses on hedges	Revaluation reserve for land	Remeasurements of defined benefit plans	Total accumulated other comprehensive income	Total net assets
Balance at beginning of period	-4,300	9,782	168	152	5,802	135,728
Changes during period
Dividends of surplus						-2,870
Profit attributable to owners of parent						8,030
Purchase of treasury shares						-3,802
Disposal of treasury shares						87
Cancellation of treasury shares						—
Transfer from retained earnings to capital surplus						—
Net changes in items other than shareholders' equity	5,515	587	—	1,331	7,434	7,434
Total changes during period	5,515	587	—	1,331	7,434	8,878
Balance at end of period	1,214	10,369	168	1,484	13,236	144,606

(Millions of yen)

Current Fiscal Year (From April 1, 2024 to March 31, 2025)

	Shareholders' equity
	Share capital	Capital surplus	Retained earnings	Treasury shares	Total shareholders' equity
Balance at beginning of period	10,000	5,181	121,036	-4,847	131,369
Changes during period
Dividends of surplus			-6,088		-6,088
Profit attributable to owners of parent			10,375		10,375
Purchase of treasury shares				-3,002	-3,002
Disposal of treasury shares		12		86	99
Net changes in items other than shareholders' equity
Total changes during period	—	12	4,287	-2,916	1,384
Balance at end of period	10,000	5,194	125,323	-7,764	132,754

(Millions of yen)

Consolidated Statement of Cash Flows
(Millions of yen)
Fiscal year ended March 31, 2025
Fiscal year ended March 31, 2024
Net cash provided by (used in) operating activities
-535,081 383,411
Cash flows from investing activities
Proceeds from sale and redemption of investment securities
913
4,954
Cash flows from operating activities
Profit before income taxes
14,335
11,043
Depreciation
486
626
Purchase of investment securities -106 -238
Loss (gain) on sale and retirement of
Loss (gain) related to securities -30 509

non-current assets -1,161 0

Increase (decrease) in provision for bonuses

-12

19 -91

Increase (decrease) in allowance for doubtful accounts

Purchase of property, plant and equipment

-91 -78

-12 8

Purchase of intangible assets -166 -62

Other, net -0 －

Proceeds from sale of property, plant and equipment

1,196

—

Increase (decrease) in provision for bonuses for directors (and other officers)

Net cash provided by (used in) investing

Cash flows from financing activities

activities

1,745 4,575

Increase (decrease) in provision for share awards for directors (and other officers)

-21

liability

Increase (decrease) in retirement benefit -579 -2,020

Dividends paid -6,088 -2,870

Purchase of treasury shares -3,002 -3,802

Proceeds from disposal of treasury 87	49
Net cash provided by (used in) financing -9,003	-6,624
Effect of exchange rate change on cash and － cash equivalents	—
Net increase (decrease) in cash and cash -542,340	381,363
Cash and cash equivalents at beginning of 1,977,628	1,596,264
Cash and cash equivalents at end of period ※ 1,435,287	※ 1,977,628

shares activities

Net decrease (increase) in call loans 10,000 -20,000

Interest and dividend income

-41,960

-25,308

Interest expenses

27,193

9,967

Share of loss (profit) of entities

accounted for using equity method -774 -556

Decrease (increase) in operating loans receivable

Decrease (increase) in cash collateral provided for securities borrowed

645,995

1,716,739

Net decrease (increase) in Securities purchased under resale agreements

261,802 -103,079

-1,687,506 -1,192,208

equivalents period

Net increase (decrease) in short term -5		—
Net increase (decrease) in commercial -150,599		138,066
Net increase (decrease) in Securities sold 2,094,674		1,167,562
Increase (decrease) in Cash collateral -1,212,858		-1,311,363
Net increase (decrease) in collateral -17,612		-14,938
Net increase (decrease) in borrowed -164,196		-131,204
Net increase (decrease) in long-term -149,800		232,700
Purchase of short-term and long term -496,733		-557,408
Proceeds from sales and redemption of short-term and long term investment 591,556 602,205 securities
Other, net	91,348	173,533
Subtotal	-545,226	369,231
Interest and dividends received	37,759	24,579
Interest paid	-25,343	-9,417
Income taxes paid	-10,414	-10,813
Income taxes refund	8,141	9,830

Net increase (decrease) in call money -358,800 -325,600 borrowings

papers

under repurchase agreements received for securities lent

money received for loan transactions money from trust account borrowings

investment securities

- 8 -

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Basis of Presentation of the Consolidated Financial Statements)

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.
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.
Accounting periods of consolidated subsidiaries
The fiscal year end of consolidated subsidiaries is the same as the consolidated fiscal year end.

Significant accounting principles

Valuation standards and methodology for material assets
1. 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
2. Derivatives
  Stated at fair value
Depreciation and amortization methods for material depreciable assets
1. Property, plant and equipment
  The Company and its subsidiaries provided depreciation principally by the declining-balance method 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
2. Intangible assets
  Straight-line method is applied.
  Software for internal use is amortized by the straight-line method over the estimated useful life (5 to 7 years).
Basis of material allowances
1. 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.
2. Provision for bonuses
  Provision for bonuses is measured based on estimated amount of payment for employee bonuses.
  Notes to Consolidated Financial Statements
  Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025
3. 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.
4. Provision for share awards for directors and other officers
  Provision for share awards for directors and other officers is measured based on estimated amount of stock benefit obligation as of the end of the current fiscal year based on internal regulations for the payment of the Company’s stock.
Accounting treatment for retirement benefits
1. 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.
2. The method of amortizing actuarial gains and losses
  Actuarial gains and losses are amortized using the declining balance method within over average remaining years of service of the employees (15 years) from the following year in which the gains or losses 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.
Significant method of hedge accounting
1. Hedge accounting
  In principle, deferral hedge accounting is applied. For Interest rate swaps, if they satisfy the requirements for treatment that incorporates swaps into underlying accounting items, they are accounted for by incorporating swaps into underlying accounting items.
2. Hedge methods and hedged items
  Hedge methods Interest rate swaps, foreign exchange contracts, etc. Hedged items Securities, investment securities, borrowings, etc.
3. 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.
4. Evaluation of hedge effectiveness
  The Group compares market fluctuations of hedged items with those of hedge methos and evaluates 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 the effectiveness of hedge is omitted.

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.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Significant Accounting Estimates)

Recoverability of deferred tax assets

Deferred tax assets and liabilities in the accompanying consolidated balance sheet as of March 31, 2025 are as follows:
Millions of yen
2025
2024
Deferred tax assets
23,570
15,860
Deferred tax liabilities
24,066
21,277
Deferred tax assets (Net)
857
—
Deferred tax liabilities (Net)
1,354
5,416
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 the actual timing and amount of the reversal of temporary differences differ from the estimates, it may have a significant impact on the amount of deferred tax assets in the consolidated financial statements for the following fiscal year.

(Changes to Accounting Policy)

(Application of Accounting Standards for Current Income Taxes)

The "Accounting Standards for Current Income Taxes " (ASBJ Statement No. 27, October 28, 2022; hereinafter referred to as "2022 Revised Accounting Standards") have been applied from the beginning of the current consolidated fiscal year.

Revisions to the classification of corporation tax, etc. (taxation on other comprehensive income),have been handled in accordance with the transitional treatments stipulated in the proviso of Paragraph 20-3 of the 2022 Revised Accounting Standards and the proviso of Paragraph 65-2(2) of the "Guidance on Accounting Standards for Tax Effect Accounting" (ASBJ Guidance No. 28, October 28, 2022; hereinafter referred to as "2022 Revised Guidance"). This has no impact on the consolidated financial statements for the previous consolidated fiscal year.

Furthermore, the 2022 Revised Guidance has been applied from the beginning of the current consolidated fiscal year with respect to the revisions related to the review of treatment in consolidated financial statements when gains or losses arising from the sale of subsidiary shares among group companies and are deferred for tax purposes, . This change in accounting policy has been retrospectively applied, and the consolidated financial statements for the previous consolidated fiscal year have been restated to reflect the retrospectively applied policy. This has no impact on the consolidated financial statements for the previous consolidated fiscal year.

(Accounting Standards Not Yet Adopted)

"Accounting Standards for Leases" (ASBJ Statement No. 34, September 13, 2024)

"Guidance on Accounting Standards for Leases" (ASBJ Guidance No. 33, September 13, 2024)

Overview
As part of the initiative by ASBJ to align Japanese standards with international standards, an IFRS-based review was conducted to develop an accounting standard for leases that recognizes assets and liabilities for all leases by lessees. The basic policy adopted a single accounting model based on IFRS 16, but instead of incorporating all provisions of IFRS 16, it only adopted the main provisions. The published lease accounting standard aims to provide a simplified and user-friendly standard, while ensuring that basically no adjustments will be required when applying the provisions of IFRS 16 provisions to individual financial statements.
Notes to Consolidated Financial Statements
Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025
For lessee accounting treatment, the method of expense allocation for leases follows the same single accounting model as IFRS 16. This model applies to all leases, whether they are classified as finance leases or operating leases, and requires the recognition of depreciation expenses related to right-of-use assets and interest expenses on lease liabilities.
Scheduled date of adoption
This accounting standard will be applied from the beginning of the fiscal year ending March 31, 2028.
Effect of adoption

The amount of impact the application of the "Accounting Standards for Leases" will have on consolidated financial statements is currently being assessed.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Changes to Presentation Methods) (Consolidated Statement of Income)

Previously, our company classified "interest income" arising from deposits with banks and other financial institutions as "non-operating income." The amount of "interest income" classified as "non-operating income" in the consolidated statement of income for the previous consolidated fiscal year was 251 million

(Notes to the Consolidated Balance Sheets)

*1 Assets pledges as collateral and secured debt Assets pledged as collateral are as follows:

Millions of yen

yen.

2025

2024

However, since funds are deposited in the course of our regular business activities in ALM (Asset and

Liability Management) operations, and the significance of has increased with rising deposit interest rates,

Securities

92,616

176,360

starting from this fiscal year, we have reclassified "interest income" as "operating revenue," similar to revenues from other transactions based on ALM management.

Operating loans

Investment securities

174,795

168,577

446,058

271,447

(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 shareholder value of the Company, thereby enhancing their awareness of the need to contribute to the efforts to archive improved business performance and greater enterprise value in the medium to long term.

Outline of the plan
The Plan is a performance-based share remuneration plan under which the Company’s shares will be acquired through a trust using money contributed by the Company and the Company’s shares and the money 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.
Stock remaining in the trust

In accordance with the “Practical Solution on Transactions of delivering the Company’s Own Stock to Employees etc. through Trust (ASBJ Practical Issue Task Force (PITF) No. 30, March 26, 2015)”, the Company recorded assets and liabilities of the trust on the Company’s balance sheet as assets and liabilities 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 ¥435 million and the number of the stocks was 917 thousand shares as of March 31, 2025, and ¥447 million and the number of the stocks was 943 thousand shares as of March 31, 2024.

The above assets are pledged as collateral for the following obligations:

Millions of yen

2025		2024
Call money	270,000	350,000
Current portion of long-term borrowings	—	149,800
Long-term borrowings	294,100	294,100

For call money, current portion of long-term borrowings and long-term borrowings, in addition to the assets pledged as collateral 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.

Millions of yen 2025 2024

Cash and deposits 25 25

Current assets (other) 6,735 126,115

Investment securities 22,867 10,689

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

Millions of yen

	2025	2024
Fair value of the securities receivable as
collateral	2,960,348	3,076,976
Securities lent	198,733	211,495
Collateral provided	824,490	1,018,185
On hand	1,937,124	1,847,296

*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:

Millions of yen

	2025	2024
Total credit line	947,158	956,058
Drawn amount	136,770	125,370
Undrawn amount	810,388	830,688

Since some of these contracts expire without the rights exercised, the undrawn amount itself does not necessarily affect future cash flows.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

*4 Items related to affiliated companies are as follows:

Millions of yen 2025 2024

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Notes to the Consolidated Statements of Comprehensive Income)

* Reclassification adjustments and tax effects related to other comprehensive income

Millions of yen 2025 2024

Investment securities (stocks) 6,151 5,531

*5 Balance sheet amount of securities lent under loan for consumption agreement, etc. are as follows:

Millions of yen 2025 2024

Valuation difference on available-for-sale securities:

Arising during the year	-18,883	7,407
Reclassification adjustment	-30	509
Before adjustment of income taxes and tax effect	-	7,917
Income taxes and tax effect	5,920	-2,456

Valuation difference on available-for-sale

18,914

-12,993 5,461

Securities	3,624	743
Investment securities	205,260	135,447

6 The fair value of the securities borrowed under loan for consumption agreement, etc. are as follows:

The fair value of the securities borrowed	10,193,297	10,259,702	Income taxes and tax effect	-792	-259
Securities loaned	9,289,223	9,272,226	Deferred gains or losses on hedges	1,304	587
Securities pledged as collateral	882,378	944,840	Revaluation reserve for land:
On hand	21,695	42,635	Income taxes and tax effect	-2	—

Millions of yen 2025 2024

securities

Arising during the year

Reclassification adjustment

2,096

—

846

—

Before adjustment of income taxes and tax effect

2,096

846

Deferred gains or losses on hedges:

*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 of land 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 of

Land (Ordinance No. 119 March 31, 1998).

(Notes to the Consolidated Statements of Income)

* Details of the gain on sale of non-current assets are as follows:

Millions of yen 2025 2024

Remeasurements of defined benefit plans:

Arising during the year Reclassification adjustment	330 -285	1,865 -24
Before adjustment of income taxes and tax
effect	45	1,841
Income taxes and tax effect	-32	-563
Remeasurements of defined benefit plans	12	1,277
Share of other comprehensive income of entities accounted for using equity method: Arising during the year	36	109
Reclassification adjustment	-2	-1
Share of other comprehensive income of
entities accounted for using equity method	34	108

Total other comprehensive income -11,644 7,434

Land 1,163 —

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Notes to the Consolidated Statements of Changes in Net Assets) Previous fiscal year (From April 1, 2023 to March 31, 2024)

1 Type and number of issued shares and treasury shares

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Current fiscal year (From April 1, 2024 to March 31, 2025) 1 Type and number of issued shares and treasury shares

(Thousands of shares)

Type of share Number of shares at the Increase Decrease Number of shares at the

Type of share Number of shares at the beginning of the year

Increase Decrease Number of shares at the end of the year

beginning of the year

end of the year

Shares outstanding

88,000 ― ― 88,000

Shares outstanding 96,000

Common stock (Note 1)

—

8,000

88,000

Treasury shares 9,803

Common stock (Note 2, 3, 4)

2,523

8,127

4,199

Common stock

Treasury shares

4,199 1,481 80 5,601

Notes:

1 Decrease of 8,000 thousands of shares is due to cancellation of treasury shares.

2 Number of treasury shares include shares which are held by the “Board Benefit Trust (BBT)” (1,022 thousands of shares at the beginning of the fiscal year and 943 thousands of shares at the end of the fiscal year)

3 Increase of 2,521 thousands of treasury shares is due to purchase of treasury shares and 2 thousands of shares is due to purchase of shares less than one unit.

4 Decrease of 8,000 thousands of treasury shares is due to cancellation of treasury shares, 79 thousands of shares is due to delivery from the “Board Benefit Trust (BBT)” to respective person, 48 thousands of shares due to disposition through third-party allotment to employee stock ownership plan of the Company and 0 thousands of shares due to sale of shares less than one unit.

2 Stock acquisition rights, etc. No items to report.

3 Dividends

Dividends paid
1. Dividends paid during the year ended March 31, 2024
  The following was approved by the Board of Directors held on May 15, 2023.
  1. Total dividends ¥1,395 million
  2. Cash dividends per common share ¥16
  3. Record date March 31, 2023
  4. Effective date June 1, 2023
    Note Total dividends include dividends of ¥16 million to shares which are owned by “Board Benefit Trust (BBT)”
    The following was approved by the Board of Directors held on November 6, 2023.
    1. Total dividends ¥1,475 million
    2. Cash dividends per common share ¥17
    3. Record date September 30, 2023
    4. Effective date December 7, 2023
    Note Total dividends include dividends of ¥16 million to shares which are owned by “Board Benefit Trust (BBT)”
Dividends to be paid after the balance sheet date but the record date for the payment belongs to the year ended March 31, 2024
The following was approved by the Board of Directors held on May 13, 2024.
1. Total dividends ¥2,542 million
2. Cash dividends per common share ¥30
3. Record date March 31, 2024
4. Effective date June 4, 2024

Note Total dividends include dividends of ¥28 million to shares which are owned by “Board Benefit Trust (BBT)”

Common stock (Note)

Notes:

Number of treasury shares include shares which are held by the “Board Benefit Trust (BBT)” (943 thousands of shares at the beginning of the fiscal year and 917 thousands of shares at the end of the fiscal year)
Increase of 1,480 thousands of treasury shares is due to purchase of treasury shares and 1 thousands of shares is due to purchase of shares less than one unit.
Decrease of 25 thousands of shares is due to delivery from the “Board Benefit Trust (BBT)” to respective person, 54 thousands of shares due to disposition through third-party allotment to employee stock ownership plan of the Company.

Stock acquisition rights, etc. No items to report.
Dividends

Dividends paid
1. Dividends paid during the year ended March 31, 2025
  The following was approved by the Board of Directors held on May 13, 2024.
  1. Total dividends ¥2,542 million
  2. Cash dividends per common share ¥30
  3. Record date March 31, 2024
  4. Effective date June 4, 2024
    Note Total dividends include dividends of ¥28 million to shares which are owned by “Board Benefit Trust (BBT)”
    The following was approved by the Board of Directors held on November 11, 2024.
    1. Total dividends ¥3,545 million
    2. Cash dividends per common share ¥42
    3. Record date September 30, 2024
    4. Effective date December 5, 2024
    Note Total dividends include dividends of ¥38 million to shares which are owned by “Board Benefit Trust (BBT)”
Dividends to be paid after the balance sheet date but the record date for the payment belongs to the year ended March 31, 2025
The following was approved by the Board of Directors held on May 15, 2025.
1. Total dividends ¥3,499 million
2. Cash dividends per common share ¥42
3. Record date March 31, 2025
4. Effective date June 6, 2025

Note Total dividends include dividends of ¥38 million to shares which are owned by “Board Benefit Trust (BBT)”

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(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

Millions of yen 2025 2024

Cash and deposits 1,435,297 1,977,638 Time deposits with maturities of over three

months -10 -10

Cash and cash equivalents 1,435,287 1,977,628

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Financial Instruments)

Conditions of Financial instruments
1. Management policy
  The Company and a consolidated subsidiary, JSF Trust and Banking Co., Ltd. (“JSFTB”) mainly deal in financial instruments. The Company is engaged in the provision of loan services centered on loans for margin transactions. Loans for margin transaction are services which lend the money or stocks required in the settlement of standardized margin transactions, and the Company flexibly procures funding from short-term finance market, primarily from the call market. As part of its ALM, the Company utilizes securities such as government bonds to facilitate the efficient manage its funds.
  JSFTB, a consolidated subsidiary, is engaged in lending and other credit operations as banking business as well as finance and securities operations. In its finance and securities operations, JSFTB invests in highly-liquid, safe and secure securities such as government bonds, municipal bonds, public corporation bonds and government-backed bonds. Money borrowed from trust account transfers accounts for approximately half of its procured funding.
2. Financial instruments and risks
  Main financial instrument that the Company holds are trade loans receivable, collateral money for securities borrowed, short-term investments and investments in securities such as government bonds and equity securities. Collateral money for securities borrowed is the collateral for cash-secured bond lending transaction, 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, municipal bonds, public corporation bonds and government-backed bonds. Trade loans receivable held by the Company and JSFTB are exposed to credit risks that caused from counterparties’ 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 engages in derivative transactions, such as entering into forward exchange contract to hedge currency exchange risk of assets and liabilities denominated in foreign currency and conducting interest rate swaps with fixed-rate bonds and borrowings as the hedge items as a part of interest risk control . Hedge accounting is applied to the derivatives and the Company regularly monitors the hedge effectiveness whether the relationship between hedging derivatives and hedged assets and liabilities 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 part of interest risk control. Hedge accounting is applied to the derivatives held for ALM purpose, and the 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 report from JSFTB concerning its risk management.
  1. Integrated risk management
    The Company quantizes the risk by Value at Risk (VaR) approach after allocating risk capital within equity 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.
  2. 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 and controls 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. For individual
    Notes to Consolidated Financial Statements
    Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025
    lending operations, the company establishes an appropriate haircut for securities used as collateral, based on their volatility and market liquidity. The company accepts these securities as collateral and marks them to market daily to mitigate the collectability issues, and in the event of a borrower's default, the company promptly recovers claims by selling the collateral or taking other necessary actions. Additionally, as part of large credit exposure management, the company calculates the stress exposure for each counterparty on a daily basis across various business units and shares this information with the business operation department.
  3. Market risk
    The Risk Management Department quantizes and controls market risks. Back-testing which is the test compared calculated VaR and estimated profit or loss by using the fixed portfolio is performed to test the reliability of the Company’s market risk quantization model. On the other hand, the company manages investment losses appropriately by setting loss limits and other measures on a total profit and loss basis.
  4. Quantitative information of market risk
    The Company calculates VaR of short-term investments and investments in securities by using historical method or Delta method (confidence interval: 99%, holding period: 10-60 days, observation period: 20 days-5 year (methods, holding period and observation period are depending on purposes in holding)). Market risk amount (possible losses) of the Company is ¥7,874 million as of March 31, 2025 (¥7,216 million as of March 31, 2024).
    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.
  5. Liquidity risk
    The Company recognizes liquidity risk as a significant risk and strives to secure the liquidity required in the stable operation of its business by securing commitment lines from multiple financial institutions, diversifying its funding sources, and spreading out the funding maturities. In terms of cash flow management, the Company sets a minimum liquidity buffer under the assumption that certain stress events may occur in the financial markets. The Company monitors the status of its liquidity reserves by developing cash flow forecasts, assessing available funding amounts and asset liquidity, and verifying the concentration of large funding maturities. Additionally, the Company has established a system for reporting daily cash flow conditions to management. Furthermore, the Company conducts liquidity stress tests to assess the risk of potential cash outflows in stressed funding environments, allowing us to confirm and assess the required levels of immediate liquidity.
    Additionally, the Company receives daily reports on cash flow forecasts and other relevant information from JSFTB and monitors its liquidity reserves in an effort to manage liquidity risk on a consolidated basis. Furthermore, to prepare for unforeseen circumstances, the Company implements liquidity contingency measures such as holding a set amount of government bonds available for immediate liquidation.
  6. Subsidiary’s risk control system
    JSFTB 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, 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 the risk 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 a major risk variable is calculated by VaR (Delta method; holding period: 1 year, confidence interval: 99%, observation period: 5 years). JSFTB market risk amount is ¥4,088 million as of March 31, 2025 (¥4,870 million as of March 31, 2024).
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 derivative transactions.
Notes to Consolidated Financial Statements
Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

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, 2024)

	amount	Fair value	Differences
(1) Operating loans	1,058,630
Allowance for doubtful accounts *2	-15
(2) Securities and investment securities *3	1,058,630	1,058,610	-4
Available-for-sale securities	759,912	759,912	—
Assets total	1,818,526	1,818,522	-4
Long-term borrowings *4	466,400	463,962	-2,437
Liabilities total	466,400	463,962	-2,437
Derivative transactions *5	21,109	21,109	—

Millions of yen Carrying

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 1,823

Investments in affiliates 5,531

Investments in investment limited partnership 1,680

*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.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Current fiscal year (As of March 31, 2025)

Millions of yen Carrying

amount Fair value Differences

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, 2024)

Millions of yen

Operating loans 796,827
Allowance for doubtful accounts *2 -60
796,767 796,756 -10
Cash and deposits
1,977,638
—
—
—
Call loans
20,000
—
—
—
Operating loans
1,037,533
20,849
247
—
Due within one year
Due after
one year through five years
Due after
five years through ten years
Due after ten years
Securities and investment securities *3

Available-for-sale securities 631,506 631,506 —

Assets total	1,428,273	1,428,262	-10
Long-term borrowings *4	316,600	311,188	-5,411
Liabilities total	316,600	311,188	-5,411
Derivative transactions *5	20,728	20,728	—

Notes:

Securities purchased under resale agreements

Cash collateral provided for securities borrowed

Securities and investments securities Available-for-sale securities with maturities

Bond securities

1) Government bonds,

4,753,614 ― ― —

4,743,081 210,000 ― —

*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 1,545

Investments in affiliates 6,151

Investments in investment limited partnership 1,513

*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.

municipal bonds, etc. 16,570 40,797 36,000 285,500

2) Corporate bonds	161,650	121,689	500	—
3) Other	7,556	35,384	16,516	25,319

Total 12,717,645 428,719 53,263 310,819

Current fiscal year (As of March 31, 2025)

Due within one year	Due after one year through five years	Due after five years through ten years	Due after ten years
Cash and deposits 1,435,297	—	—	—
Call loans 10,000	—	—	—
Operating loans 790,503	6,060	263	—
Securities purchased under resale 6,441,120	—	—	—
Cash collateral provided for 4,087,086	220,000	—	—

Millions of yen

agreements

securities borrowed

Securities and investments securities Available-for-sale securities with maturities

Bond securities

1) Government bonds, municipal bonds, etc.

27,197 28,500 46,900 229,600

2) Corporate bonds	65,656	77,233	5,000	—
3) Other	3,725	45,319	30,455	77,070
Total	12,860,587	377,112	82,618	306,670

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Current fiscal year (As of March 31, 2025)

Millions of yen

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, 2024)

Millions of yen

Due within one year

Due after one year through two years

Due after two years through three years

Due after three years through four years

Due after four years through five years

Due after five years

Due within one year

Due after one year through two years

Due after two years through three years

Due after three years through four years

Due after four years through five years

Call money	1,506,000	—	—	—	—	—
Short-term borrowings	92,005	—	—	—	—	—
Commercial paper	438,466	—	—	—	—	—
Securities sold under
repurchase

Due after five years

Short-term borrowings	92,010	—	—	—	—	—	agreements	8,044,038	—	—	—	—	—
Commercial paper	589,066	—	—	—	—	—	Cash collateral
Securities sold under repurchase							received for securities lent	2,549,554	—	—	—	—	—
agreements 5,949,364		—	—	—	—	—		Long-term borrowings	1,000	18,500	79,900	214,200	2,000	1,000
Cash collateral								Total	12,631,064	18,500	79,900	214,200	2,000	1,000
received for securities lent 3,762,412		—	—	—	—	—
Long-term borrowings 149,800		1,000	18,500	79,900	214,200	3,000
Total 12,407,453		1,000	18,500	79,900	214,200	3,000

Call money 1,864,800 ― ― ― ― —

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Breakdown of financial instruments by each fair value level

The fair value of financial instruments is classified into the following three levels, depending on the observability and materiality of the inputs used to measure fair value.

Current fiscal year (As of March 31, 2025)

Millions of yen Fair value

Level 1: Fair value based on quoted market prices for assets or liabilities that are the subject of the calculation of such fair value in an active market amongst the inputs to the measurement of observable 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 to which each of those inputs belong where multiple inputs are used that have a significant impact on the measurement of fair value.

Financial instruments that are stated at fair value in the accompanying consolidated balance sheets Previous fiscal year (As of March 31, 2024)

Classification

Equity securities	17,527	—	—	17,527
Bonds
Government and municipal	243,811	49,407	—	293,218
bonds, etc. Corporate bonds	—	146,768	—	146,768
Other	95,738	51,090	—	146,829
Other	13,692	13,469	—	27,161
Derivative transactions
Currency-related	—	879	—	879
Interest-related	—	21,373	—	21,373
Bonds-related	8	—	—	8
Equity securities-related	272	—	—	272

Securities and investment securities Available-for-sale securities

Level 1 Level 2 Level 3 Total

Classification Securities and investment securities

Millions of yen Fair value

Level 1 Level 2 Level 3 Total

Available-for-sale securities					Currency-related	—	296	—	296
Equity securities	21,583	—	—	21,583	Interest-related	—	1,426	—	1,426
Bonds					Bonds-related	81	—	—	81
Government and municipal	293,160	55,337	—	348,498	Liabilities total	81	1,722	—	1,804
bonds, etc. Corporate bonds	—	283,654	—	283,654
Other	26,971	52,167	—	79,139
Other	13,806	13,230	—	27,036
Derivative transactions
Currency-related	—	1,052	—	1,052
Interest-related	—	21,218	—	21,218
Assets total	355,522	426,660	—	782,182
Derivative transactions
Currency-related	—	7	—	7
Interest-related	—	678	—	678
Equity securities-related	474	—	—	474
Liabilities total	474	685	—	1,160

Assets total 371,051 282,988 ― 654,039 Derivative transactions

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Financial instruments other than that are stated at fair value in the accompanying consolidated balance sheets

Previous fiscal year (As of March 31, 2024)

Millions of yen

Fair value

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

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 not

changed 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

Classification

Operating loans	—	446,058	612,552	1,058,610
Assets total	—	446,058	612,552	1,058,610
Long-term borrowings (Note)	—	463,962	—	463,962
Liabilities total	—	463,962	—	463,962

Level 1 Level 2 Level 3 Total

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 estimated uncollectable amount, and such amounts are used as the fair value. Credit risk is considered in calculating

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

Current fiscal year (As of March 31, 2025)

these 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.

Millions of yen

Fair value

Classification Level 1 Level 2 Level 3 Total

Operating loans ― 174,795 621,961 796,756

Assets total ― 174,795 621,961 796,756 Long-term borrowings (Note) ― 311,188 ― 311,188 Liabilities total ― 311,188 ― 311,188

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 are available are classified as Level 1 fair value. This mainly includes listed equities, listed mutual funds, and government 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 from market participants with respect to cancellation or repurchase requests.

Long-term borrowings

For long-term loans with variable interest rates, the carrying amount are used as fair value because the fair 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 the execution 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 term of 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

Bond futures transactions and stock index futures transactions are valued using quoted market prices and are classified as Level 1 since 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.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Securities)

Available-for-sale securities with market value Previous fiscal year (As of March 31, 2024)
Millions of yen
Note Consolidated balance sheet carrying amounts of ¥1,545 million for unlisted equity securities, and ¥1,513 million 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.
Available-for-sale securities sold during the fiscal year Previous fiscal year (From April 1, 2023 to March 31, 2024)
Type Carrying amount Acquisition cost Differences
1. Equity securities 21,583 4,235 17,347
  Millions of yen
2. Bonds
  Proceeds from sale
  Gross realized gains
  Gross realized losses
3. Others 26,943 18,406 8,536

Subtotal 166,853 136,019 30,833

Equity securities ― ― —
Bonds

Government

Equity securities ― ― —
Government
Carrying amount
bonds, municipal
95,792
91,829
3,963
exceeding acquisition
bonds, etc.
cost
Corporate bonds
1,501
1,500
0
Other
21,032
20,047
985
Government bonds, municipal bonds, etc.
61,821
439
243
Corporate bonds
52,131
110
10
Other
11,325
4
1,121
Bonds
Others 4,954 605 294

130,232 1,160 1,670

Carrying amount not exceeding acquisition cost

bonds, municipal bonds, etc.

252,705 275,185 -22,479

Current fiscal year (From April 1, 2024 to March 31, 2025)

Corporate bonds

Other

282,153

58,106

282,960

60,272

-807

-2,165

Proceeds from sale

Millions of yen

Gross realized gains

Gross realized losses

(3) Others

103

-10

Subtotal

593,059

618,522

-25,463

(1) Equity securities 3,069

1,963

—

Total 759,912 754,541 5,370

Note Consolidated balance sheet carrying amounts of ¥1,823 million for unlisted equity securities, and ¥1,680 million for investments in investment limited partnership are not included above because they do not have market prices and their

(2) Bonds

Government bonds, municipal bonds, etc. 107,626 143 1,846 Corporate bonds ― ― —

fair value is extremely difficult to measure.				Other	4,160	—	48
				(3) Others	855	—	181
Current fiscal year (As of March 31, 2025)					115,711	2,106	2,076
		Millions of yen
Type	Carrying amount	Acquisition cost	Differences
(1) Equity securities	17,527	3,920	13,606
(2) Bonds
Government Carrying amount bonds, municipal	37,238	36,230	1,008
exceeding acquisition bonds, etc. cost Corporate bonds	23,946	23,925	21
Other	11,822	11,369	452
(3) Others	23,805	15,727	8,078
Subtotal	114,340	91,172	23,167
(1) Equity securities	—	—	—
(2) Bonds

Carrying amount not exceeding acquisition cost

Government
bonds, municipal bonds, etc.	255,980	284,096	-28,116
Corporate bonds	122,821	124,129	-1,308
Other	135,007	141,644	-6,636
(3) Others 3,355		3,457 -101

Subtotal 517,165 553,328 -36,162

Total 631,506 644,501 -12,995

102 Japan Securities Finance Co., Ltd. Integrated Report 2025 Japan Securities Finance Co., Ltd. Integrated Report 2025

- 34 -

103

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Derivative Transactions)

Derivative transactions for which hedge accounting is not applied Currency-related
Previous fiscal year (As of March 31, 2024)
Derivative transactions for which hedge accounting is applied

Currency derivatives

Previous fiscal year (As of March 31, 2024)

Millions of yen

Hedge accounting

Nature of transaction Hedged items

Contract or notional

Of which Fair value

over one year

Category

Millions of yen

Interest rate derivatives

Previous fiscal year (As of March 31, 2024)

Millions of yen

Fair value

	contract: Sell:						Variable rate received for fixed rate	Securities and Investments securities	677,218	498,972	20,186
Non-market	U.S. dollars	4,695	—	44	44		Variable rate paid
transactions	Euro	2,782	—	11	11		for fixed rate	Long-term borrowings	222,800	123,800	353
	Buy:					*2	Interest rate swaps:

U.S. dollars	22,026	—	150	150
Euro	108,709	—	376	376

Variable rate received
for fixed rate	Operating loans	9,590	9,590	*3
Variable rate paid
for fixed rate	Long-term borrowings	122,200	122,200	*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 value of derivative financial instrument is included in fair value of the respective assets and liabilities as hedged items.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Current fiscal year (As of March 31, 2025)

Millions of yen

(4) Stock derivatives

Previous fiscal year (As of March 31, 2024)

Hedge

Contract or

Of which

Millions of yen

accounting

Nature of transaction Hedged items

notional amounts

over one year Fair value

Hedge

Contract or

Of which

method

*1 Interest rate swaps:

accounting method

Nature of transaction Hedged items

notional amounts

over one year Fair value

Variable rate received for fixed rate

Variable rate paid

Securities and

Investments securities 567,251 470,970 21,860

*1 Stock index futures:

Sell Investments securities 13,430 ― -474

Note *1 Deferred hedge accounting is applied.

for fixed rate Borrowings 138,800 138,800 -1,913

*2 Interest rate swaps: Variable rate received

Current fiscal year (As of March 31, 2025)

Millions of yen

for fixed rate Loans 179,795 ― *3

Variable rate paid

for fixed rate Borrowings 179,100 119,100 *3

Hedge accounting method

Nature of transaction Hedged items

Contract or notional amounts

Of which Fair value over one year

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) Bond derivatives

Previous fiscal year (As of March 31, 2024) No items to report.

*1 Stock index futures:

Sell Investments securities 11,399 ― 272

Note *1 Deferred hedge accounting is applied.

Current fiscal year (As of March 31, 2025)

Millions of yen

Hedge accounting method

Nature of transaction Hedged items

Contract or notional amounts

Of which Fair value over one year

*1 Bond futures:

Sell Investments securities 15,245 ― -73

Note *1 Deferred hedge accounting is applied.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Retirement Benefits)

Outline of retirement benefit plans
The Company has defined benefit plans which consist of a defined benefit corporate pension plan and a 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 the simplified method has been adopted for the calculation of retirement benefit liability and retirement benefit expenses for the plans.

Defined benefit plan

Reconciliation of changes in retirement benefit obligation (the following table excludes certain plans mentioned in (3))

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(4) Reconciliation between retirement benefit obligation and plan assets and liability for retirement benefit and asset for retirement benefit recognized in consolidated balance sheets

Millions of yen 2025 2024

Funded retirement benefit obligation 7,072 7,855

Plan assets -10,905 -11,081

Unfunded retirement benefit obligation	-3,832 269	-3,226 243
Net liability and asset recognized in consolidated
balance sheets	-3,562	-2,982
Liability for retirement benefit	269	243
Asset for retirement benefit	-3,832	-3,226
Net liability and asset recognized in consolidated

Millions of yen 2025 2024

			balance sheets	-3,562	-2,982
Retirement benefit obligation at beginning of year	7,855	8,329
Service cost	217	256	(5) The components of retirement benefit expenses
Interest cost	102	74
Actuarial gains and losses	-672	-481		Millions of yen
Benefits paid	-429	-323		2025	2024
Retirement benefit obligation at end of year	7,072	7,855

Service cost	217	256
Interest cost	102	74
Expected return on plan assets	-221	-190
Amortization of actuarial gains or losses	-285	-24

Reconciliation of changes in plan assets (the following table excludes certain plans mentioned in (3))
Millions of yen
2025
2024
Retirement benefit expenses calculated by the
simplified method
26
26
Plan assets at beginning of year
11,081
9,509
Retirement benefit expenses
-161
142
Expected return on plan assets
221
190
Actuarial gains and losses
-341
1,384
Employer contributions
280
285
Benefits paid
-336
-287
Plan assets at end of year 10,905 11,081
Reconciliation of changes in retirement benefit liability whose plans adopted the simplified method

Millions of yen

2025 2024

Retirement benefit liability at beginning of year 243 217

Retirement benefit expenses 26 26

Contributions -0 -0

Retirement benefit liability at end of year 269 243

Remeasurements of retirement benefit plans before income taxes and related tax effects
Millions of yen 2025 2024
Actuarial gains or losses 45 1,841
Total 45 1,841
Accumulated remeasurements of retirement benefit plans before income taxes and related tax effects
Millions of yen 2025 2024
Unamortized actuarial gains or losses -2,058 -2,013
Total -2,058 -2,013
Notes to Consolidated Financial Statements
Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025
Notes to Consolidated Financial Statements
Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Plan assets

Percentage by major category of plan assets

2025 2024

(Tax Effect Accounting)

The principal components of deferred tax assets and deferred tax liabilities are as follows:

Millions of yen 2025 2024

Debt securities	29.4%	27.1%
Equity securities	35.4	36.8

Deferred tax assets:

General account	8.3	8.2	Accrued bonuses	169	173
Investment trust beneficiary certificates	—	25.7	Retirement benefit liability	365	520
Other	26.9	2.2	Allowance for doubtful accounts	20	9
Total	100.0%	100.0%	Deferred losses on hedges	9,834	5,768
Note1 Plan assets as of March 31, 2025 and 2024 include the retirement	benefit trust	contributed for the years ended	Net unrealized loss on available-for-sale	12,780	8,981
March 31, 2025 and 2024 which are 8.1% and 8.4% of total plan assets, respectively. securities
Note2 "Others" primarily include short-term funds such as bank account.			Other	343	358
			Subtotal	23,683	15,955
(b) Determination procedure of long-term expected rate of return on plan assets			Valuation allowance	-112	-95
In determining long-term expected rate of return on plan assets, the Company considers the current			Deferred tax assets total	23,570	15,860
and projected asset allocation, as well as current and future long-term rate of returns for various categories of the plan assets. Deferred tax liabilities:

Accrued business tax 170 143

Basis for calculation of actuarial assumptions

The assumptions used in accounting for the above plans as of March 31, 2025 and 2024 are as follows:

	2025	2024
(a) Discount rate	2.0%	1.3%
(b) Long-term expected rate of return on plan assets	2.0%	2.0%
(c) Expected salary increase rate	4.5%	4.5%

Defined contribution plans

For the years ended March 31, 2025 and 2024, the amount to be paid by the Company and its consolidated subsidiaries to the defined contribution plans was ¥36 million and ¥36 million, respectively.

Gain on evaluation of subsidiaries’ assets -158 -154 Net unrealized gain on other securities -7,432 -9,554 Gain on evaluation of acquired assets by merger -410 -452 Deferred loss on hedges -15,203 -10,345 Other -862 -769

Deferred tax liabilities total	-24,066	-21,277
Net deferred tax assets	857	—
Net deferred tax liabilities	-1,354	-5,416

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

2025 2024

Statutory tax rate 30.6% 30.6%

Equity in gains of affiliates	-1.7	-1.5
Expenses not deductible for tax purposes	0.2	0.4
Valuation allowance	0.1	-0.0
Income not credited for tax purposes	-4.7	-8.1
Elimination of dividend income	2.9	6.0
Tax credit under the wage increase promotion tax system	-0.5	-0.5
Other	0.7	0.4
Effective tax rate	27.6%	27.3%

Adjustment of deferred tax assets and deferred tax liabilities due to changes in corporate tax rates

With the Diet’s enactment of the "Act on Partial Revision of the Income Tax Act, etc." (Act No. 13 of 2025) on March 31, 2025, a "defense special corporate tax" will now be imposed from the consolidated fiscal year beginning on or after April 1, 2026.

Accordingly, deferred tax assets and deferred tax liabilities related to temporary differences that are expected to be reversed in or after the consolidated fiscal year beginning on April 1, 2026, have been calculated by changing the statutory effective tax rate from 30.6% to 31.5%.

As a result of this change, the amount of deferred tax assets (net of deferred tax liabilities) decreased by 21 million yen in the current consolidated fiscal year. Additionally, “Income taxes – deferred” increased by 7 million yen, “Valuation difference on available-for-sale securities” increased by 155 million yen, “Deferred

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

gains or losses on hedges” decreased by 150 million yen, and “Remeasurements of defined benefit plans” decreased by 18 million yen.

Furthermore, “Deferred tax liabilities for land revaluation” increased by 2 million yen, resulting in a corresponding decrease in the “Revaluation reserve for land” by the same amount.

(Revenue Recognition)

Information on the revenue recognition is omitted as the importance of revenue subject to the accounting standards for revenue recognition is insignificant in the “Securities Finance Business”,” Trust Banking Business” and” Real Estate Leasing Business” conducted by the Group.

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

(Segment Information)

As described in the "(Changes to Presentation Methods)" section, starting from the current consolidated fiscal year, the Company has reclassified "interest income" arising from deposits with banks, etc., as "operating revenue." As such, the "operating revenue" for the previous consolidated fiscal year has also been reclassified and presented accordingly. As a result, "operating revenue" for the "Securities Finance Business " increased by 251 million yen compared to the previous method. However, this reclassification has no impact on segment profit (ordinary profit).

Outline of the reportable segments
The Group’s reportable segments are the Group’s business units for which separate financial information is available, and which are subject regular review by the Board of Directors in order to determine the distribution of management resources and evaluate business performance.
The Group’s reportable segments consist of the “Securities Finance Business” conducted by the Company, the “Trust Banking Business” conducted by JSF Trust and Banking Co., Ltd., a consolidated subsidiary, and the “Real Estate Leasing Business” conducted by Nihon Building Co., Ltd., a consolidated subsidiary.
The “Securities Finance Business” engages in loan operations for margin transactions, security financing operations, and securities investment operations. The “Trust Banking Business” engages in trust operations such as securities trusts, and in banking operations such as loans. The “Real Estate Leasing Business” mainly engages in leasing and managing operations for the real estate owned by the Group.
Calculation methods of operating revenue, profit or loss, assets, liabilities and other items for each reportable 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.

Information on operating revenue, profit or loss, assets, liabilities and other items for each reportable segment

Previous fiscal year (From April 1, 2023 to March 31, 2024)

Millions of yen

Real estate

Revenues:

Securities finance Trust banking

leasing Total

Revenues to 46,300		3,127	831	50,259
Intersegment
revenues and 21 transfers		141	391	554
Total 46,321		3,269	1,223	50,813
Segment profit 10,070		1,855	713	12,638
Segment assets 12,469,435		1,360,088	8,721	13,838,245
Others:
Depreciation
and
amortization	441	97	87	626
Extraordinary
income	18	—	—	18
(Gain on sale
of investment	(18)	(―)	(―)	(18)
securities)
Income taxes	2,203	567	242	3,013

third parties

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Current fiscal year (From April 1, 2024 to March 31, 2025)

Millions of yen

Real estate

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Reconciliation between total amounts of reportable segments and consolidated financial statements

Revenues: Revenues to third parties Intersegment revenues and

Securities finance Trust banking

leasing Total

Millions of yen

53,015	5,653	816	59,486
				Total segment profit	60,119	50,813
156	84	392	633	Elimination of intersegment transactions	-633	-554

Operating profit 2025 2024

Total	53,172	5,737	1,209	60,119
Segment profit	10,608	1,755	715	13,080
Segment assets	12,901,417	918,913	10,411	13,830,742
Others: Depreciation and

Other	—	—
Operating profit in consolidated financial statements	59,486	50,259

transfers

amortization Extraordinary income (Gain on sale of non-current assets)

(Gain on sale of investment securities)

(―) (―) (1,163) (1,163)

(664) (―) (―) (664)

Millions of yen

329

486

664

—

1,163

1,828

Total segment profit

Elimination of intersegment transactions

13,080

-1,347

12,638

-2,171

Ordinary profit 2025 2024

Share of profit of entities accounted for using

equity method 774 556

Other ― —

Ordinary profit in consolidated financial

statements 12,507 11,024

Income taxes 2,786 529 641 3,956

Millions of yen

Assets 2025 2024

Total segment assets	13,830,742	13,838,245
Elimination of intersegment credits	-43,986	-75,842
Elimination of investments and capital	-24,913	-24,913
Other	7,747	7,276
Total assets in consolidated financial statements	13,769,589	13,744,765

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Notes to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Millions of yen

Amounts in the consolidated financial

Other items Segment total Adjustments statements March 31, 2024

Current fiscal year (From April 1, 2024 to March 31, 2025)

Information by products and services

Loans for

Millions of yen 2025

Depreciation and amortization	626	0	626
Extraordinary income	18	—	18
(Gain on sale of non-current assets)	(―)	(―)	(―)
(Gain on sale of investment securities)	(18)	(―)	(18)
Income taxes	3,013	-0	3,012
March 31, 2025 Depreciation and amortization	486	0	486
Extraordinary income	1,828	—	1,828
(Gain on sale of non-current assets)	(1,163)	(―)	(1,163)
(Gain on sale of investment securities)	(664)	(―)	(664)

margin Bond lending Other Total

Income taxes 3,956 2 3,959

transaction Operating revenue to

external customers 9,275 22,318 27,892 59,486

Geographic information
1. Operating revenue
  Geographic information is not disclosed since revenue from external customers in Japan accounts for over 90% of the operating revenue in the consolidated statement of income.
2. Property, plant and equipment
Because there are no property, plant and equipment outside Japan, the geographic information is not disclosed.
[Related information]
Previous fiscal year (From April 1, 2023 to March 31, 2024)
1. Information by products and services
  Loans for
  Millions of yen 2024
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.

margin Bond lending Other Total

transaction Operating revenue to

external customers 11,581 23,250 15,428 50,259

Geographic information

Operating revenue
Millions of yen 2024
Japan Oversea Total
44,878 5,381 50,259
Note Operating revenue is classified based on the location of the customers.
Property, plant and equipment

[Negative goodwill incurred by reported segments] No items to report.

[Information of related parties]

Business transactions with related parties No items to report.
Note to significant affiliate companies No items to report.
(Per Share Information)
Yen
Because there are no property, plant and equipment outside Japan, the geographic information is not
disclosed.
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.

2025 2024

Net assets per share	1,630.45	1,725.62
Profit per share	124.61	94.04

Notes:

Diluted profit per share for the previous and current fiscal year are not stated as there are no potential shares that have dilutive effect.
The basis for calculating net assets per share is as follows:
Notes to Consolidated Financial Statements
Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025
Millions of yen 2025 2024
Total net assets
Amount deducted from total net assets
134,346
—
144,606
—
Net assets applicable to common shareholders
134,346
144,606
Number of shares (Thousands)
2025
2024
Number of common shares outstanding
88,000
88,000
Number of common treasury shares
5,601
4,199
Number of common shares outstanding on which net assets per share is calculated
82,398
83,800
The basis for calculating profit per share is as follows:
Millions of yen 2025 2024
Profit attributable to owners of parent 10,375 8,030 Profit not attributable to common shareholders ― — Profit applicable to common shareholders of the
parent company 10,375 8,030
Notes to Consolidated Financial Statements
Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025
(Subsequent Event) (Acquisition of treasury shares)
The Company’s Board of Directors held on May 15, 2025 has resolved to acquire treasury shares pursuant 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.
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 FY2023 through FY2025 by the flexible payment of dividends and acquisition of treasury shares.
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 1,700,000 shares (2.0% of the total number of issued shares excluding treasury shares)
3. Total amount of share acquisition costs UP to ¥2,800 million
4. Acquisition period
From May 16, 2025 to March 31, 2026
Number of shares (Thousands)
2025
2024
Weighted average number of common shares
83,268
85,399
For calculating “Net assets per share”, the Company’s own stocks which are held by the trust (BBT) (943 and 917 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) (961 and 923 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.

Supplementary Information to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Supplementary Information to Consolidated Financial Statements

Japan Securities Financial Co., Ltd. and Consolidated Subsidiaries Year ended March 31, 2025

Supplementary Statements

[Detailed Schedule of Bonds] No items to report.

[Detailed Schedule of Borrowings]

Millions of yen 2025

[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, 2025 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, 2025.

Classification At the beginning of the fiscal year

At the end of the

fiscal year

Average

interest rates

Repayment

due

(2) Other

Interim information for the current fiscal year

Millions of yen 2025

Short-term borrowings	92,010	92,005	0.569%	—
Long-term borrowings due within one	149,800	1,000	0.621%	—
year Lease obligation due within one year	—	—	—	—
				From March
Long-term borrowings	316,600	315,600	0.216%	2027

Interim consolidated accounting period

Current consolidated fiscal year

(except for due within one year)	To April	Operating revenue	27,491	59,486
	2031	Profit before income taxes	8,660	14,335

Lease obligation	—	—	—	—
(except for due within one year)
Other interest-bearing liabilities:
Call money (due within one year)	1,864,800	1,506,000	0.491%	—
Commercial papers (due within one	589,066	438,466	1.294%	—

Profit attributable to owners of parent 6,217 10,375

year) Total 3,012,276 2,353,071 ― —

Notes:

Yen 2025

Interim consolidated accounting period

Current consolidated fiscal year

Average interest rates are calculated based on the interest rates at the end of the fiscal year.
Cash collateral received for securities lent is excluded from other interest-bearing liabilities.
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:

Millions of yen 2025

Profit per share 74.20 124.61

Due after one year through two years

Due after two years through three

Due after three years through four years

Due after four years through five years

years

Long-term borrowings 18,500 79,900 214,200 2,000

To the Board of Directors

Japan Securities Finance Co., Ltd.

(English Translation) Independent Auditor’s Report

Crowe Toyo & Co.

Sumitomo Fudosan Kanda Bldg.,6F Kandamitoshirocho7

Chiyoda-ku, Tokyo 101-0053 Japan

Main +81 (3)3295 1040

Fax +81 (3)3295 1993

As of March 31, 2025, Japan Securities Finance Co., Ltd. (hereinafter referred to as "the Company") holds assets under management of 96,241 million yen of short-term investments on current assets, and 544,475 million yen of investments in securities on investments and other assets. Since these securities are exposed to interest rate risks arising from factors such as the Bank of Japan’s termination of its negative interest rate policy, the tariff policy of the United States, currency exchange risk, and various other risks, the Company aim to obtain stable income from securities investment by flexibly reviewing its portfolio under appropriate risk control in response to changes in the external environment. Furthermore, the Company monitors market conditions and endeavors to reduce market risk by hedging operations through derivatives transactions and others.

In addition, the Company applies hedge accounting using a variety of hedging instruments to hedge the risk as described in [Notes] (Derivative Transactions). Among derivative transactions, hedge accounting is applied to a wide range of transactions such as exchange contract transactions, interest rate swap transactions, bond futures transactions, and stock index futures transactions, and the diversification of hedging methods is progressing.

Since the Company is a specialized institution of securities finance and functions as an infrastructure in the securities market, there is a high demand for maintaining financial soundness and high creditworthiness by applying hedge accounting against various risks faced. For the qualitative point of view, evaluating the effectiveness of hedge accounting is highly important.

Based on the risk management policy set by the management, various hedging transactions are composed by advanced schemes using many inputs such as interest rates, currency exchange rates and stock indexes, and these are highly dependent on the judgment of the management.

In addition, in order to apply hedge accounting, it is determined in accordance

In regard to evaluate the effectiveness of hedge accounting, we mainly performed the following audit procedures based on the “Accounting Standards for Financial Instruments” and the “Practical Guidelines for Accounting for Financial Instruments”.

In order to evaluate the risk management policy and internal control design and operational related to hedging transactions, we discussed with management based on domestic and overseas economic and financial conditions. Additionally, we evaluated the results of the company's examination by inspecting the minutes of the board of directors and the management meeting.
At the start of implementation of hedging, we evaluated the effectiveness of hedging accounting mainly focusing on the following points.
- Compliance with risk management policies and others in accordance with the terms of hedging implementation.
- Documentation of hedging instruments, hedged items and methods for determining the effectiveness of hedge accounting, and evaluation of internal approval.
- Examination of applicability of hedge accounting by evaluating the correlation between hedged items and hedging instruments.
We evaluated whether the high effectiveness of hedge accounting was continuously maintained, mainly focusing on the following points, by taking regular measures after the start of hedging transactions.
- Assessing whether the validity is judged and documented once every 6 months in accordance with the “Practical Guidelines for Accounting for Financial Instruments” according to the same method established at the start of hedging transactions.
- Identification of inputs such as interest rates used in determining the effectiveness of hedge accounting and comparison with available external information.

https://www.crowe.com/jp/en-us

June 25, 2025

Crowe Toyo & Co.

Tokyo office

Shigeki Tsujimura, CPA Designated Partner, Engagement Partner

Yuko Saruwatari, CPA Designated Partner, Engagement Partner

Crowe Toyo & Co.

Sumitomo Fudosan Kanda Bldg.,6F Kandamitoshirocho7

Chiyoda-ku, Tokyo 101-0053 Japan

Main +81 (3)3295 1040

Fax +81 (3)3295 1993

https://www.crowe.com/jp/en-us

Opinion

Pursuant to Article 193-2, Section 1 of the Financial Instruments and Exchange Act of Japan, we have audited the accompanying consolidated financial statements of Japan Securities Finance Co., Ltd. and

its consolidated subsidiaries (the “Group”) included in “Financial Information” for the fiscal year from

April 1, 2024 to March 31, 2025, which comprise the consolidated balance sheet, the consolidated statements of income, comprehensive income, changes in net assets, and cash flows, significant accounting policies, other related notes, and the consolidated supplemental schedules.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in Japan.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming the auditor’s opinion thereon, and we do not provide a separate opinion on these matters.

Assessment of the effectiveness of hedge accounting
Key audit matter	How the scope of our audit addressed the key audit matter

Crowe Toyo & Co.

Sumitomo Fudosan Kanda Bldg.,6F Kandamitoshirocho7

Chiyoda-ku, Tokyo 101-0053 Japan

Main +81 (3)3295 1040

Fax +81 (3)3295 1993

https://www.crowe.com/jp/en-us

Crowe Toyo & Co.

Sumitomo Fudosan Kanda Bldg.,6F Kandamitoshirocho7

Chiyoda-ku, Tokyo 101-0053 Japan

Main +81 (3)3295 1040

Fax +81 (3)3295 1993

https://www.crowe.com/jp/en-us

with "Accounting Standards for Financial Instruments" (Corporate Accounting Standard No. 10) and "Practical Guidelines for Accounting for Financial Instruments" (Accounting System Committee Report No. 14), and requirements of effectiveness of hedge accounting are needed to be satisfied. However, the cases applied are diverse and complex. The decision requires careful judgment in the market and valuation methods.

Based on the above, we determined the assessment of the effectiveness of hedge accounting is particularly important in the consolidated financial statements for the

current fiscal year and constitutes a key audit matter.

Examining the effectiveness of hedge accounting by assessing the correlation between hedged items and hedging instruments.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion from an independent standpoint. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Other Information

The other information comprises the information included in the annual securities report but does not include the consolidated financial statements, the non-consolidated financial statements and our audit report thereon.

Management is responsible for preparation and disclosure of the other information. The Audit Committee is responsible for overseeing the duties of executive officers and directors in designing and operating the Group’s reporting process of the other information.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Management’s and the Audit Committee’s Responsibilities for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern and disclosing, as required by accounting principles generally accepted in Japan, matters related to going concern.

The Audit Committee is responsible for overseeing the duties of executive officers and directors in designing and operating the Group’s financial reporting process.

・ Identify and assess the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

・ Consider internal control relevant to the audit in order to design audit procedures that are appropriate

in the circumstances for our risk assessments, while the purpose of the audit of the consolidated financial statements is not expressing an opinion on the effectiveness of the Group’s internal control.

・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

・ Conclude on the appropriateness of management’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

・ Evaluate the overall presentation, structure and content of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation in accordance with accounting principles generally accepted in Japan.

・ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Audit Committee with a statement that we have complied with the ethical requirements regarding independence that are relevant to our audit of the consolidated financial statements in Japan, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an acceptable level.

From the matters communicated with the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we

Crowe Toyo & Co.

Sumitomo Fudosan Kanda Bldg.,6F Kandamitoshirocho7

Chiyoda-ku, Tokyo 101-0053 Japan

Main +81 (3)3295 1040

Fax +81 (3)3295 1993

https://www.crowe.com/jp/en-us

determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Opinion

Pursuant to Article 193-2, Section 2 of the Financial Instruments and Exchange Act of Japan, we have

audited the accompanying Management’s Report on Internal Control Over Financial Reporting for the consolidated financial statements as at March 31, 2025 of Japan Securities Finance Co., Ltd.(“Management’s Report”).

In our opinion, Management’s Report referred to above, which represents that the internal control over financial reporting as at March 31, 2025 of Japan Securities Finance Co., Ltd. is effective, presents fairly, in all material respects, the result of management’s assessment of internal control over financial reporting in accordance with standards for assessment of internal control over financial reporting generally accepted in Japan.

Basis for Opinion

We conducted our internal control audit in accordance with auditing standards on internal control over financial reporting generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Internal Control section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Management’s and the Audit Committee’s Responsibilities for Management’s Report Management is responsible for designing and operating internal control over financial reporting, and for the preparation and fair presentation of Management’s Report in accordance with standards for assessment of internal control over financial reporting generally accepted in Japan.

The Audit Committee is responsible for monitoring and verifying the design and operation of internal control over financial reporting.

Internal control over financial reporting may not prevent or detect misstatements.

Auditor’s Responsibilities for the Audit of Internal Control

Our objectives are to obtain reasonable assurance about whether Management’s Report is free from material misstatement, and to issue an auditor’s report that includes our opinion from an independent standpoint.

As part of an audit in accordance with auditing standards on internal control generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

・Perform audit procedures to obtain audit evidence relating to the result of management’s assessment

of internal control over financial reporting in Management’s Report. The design and performance of audit procedures for internal control audits is based on our judgement in consideration of the materiality of the effect on the reliability of financial reporting.

・Consider the overall presentation of Management’s Report with regards to the scope, procedures,

and result of the assessment of internal control over financial reporting including descriptions by management.

Crowe Toyo & Co.

Sumitomo Fudosan Kanda Bldg.,6F Kandamitoshirocho7

Chiyoda-ku, Tokyo 101-0053 Japan

Main +81 (3)3295 1040

Fax +81 (3)3295 1993

https://www.crowe.com/jp/en-us

・Obtain sufficient appropriate audit evidence regarding the result of management’s assessment of

internal control over financial reporting in Management’s Report. We are responsible for the direction, supervision, and performance of the audit of Management’s Report. We remain solely responsible for our audit opinion.

We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the internal control audit, the results of the internal control audit, any significant deficiencies in internal control that we identify, and the results of corrective measures for such significant deficiencies.

The fees for the audits of the financial statements of the Group and other services provided by us and our network firms for the year ended March 31, 2025 are presented in titled “Status of the Company” in “Corporate Governance” included in Item 3 “Information about Audits” in Part 1 of the annual securities report for the year ended March 31, 2025 of the Group.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan

Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

Notes to the Readers of Independent Auditor’s Report

This is an English translation of the independent auditor’s report as required by the Financial Instruments and Exchange Act of Japan for the conveniences of the reader.

Attention: This is an excerpt of the original content. To continue reading it, access the original document here.

Cash and deposits	1,977,638	—	—	—
Call loans	20,000	—	—	—
Operating loans	1,037,533	20,849	247	—

	Government
Carrying amount	bonds, municipal	95,792	91,829	3,963
exceeding acquisition	bonds, etc.
cost	Corporate bonds	1,501	1,500	0
	Other	21,032	20,047	985

Government bonds, municipal bonds, etc.	61,821	439	243
Corporate bonds	52,131	110	10
Other	11,325	4	1,121

	2025	2024	Retirement benefit expenses calculated by the
			simplified method	26	26
Plan assets at beginning of year	11,081	9,509	Retirement benefit expenses	-161	142

Expected return on plan assets	221	190
Actuarial gains and losses	-341	1,384
Employer contributions	280	285
Benefits paid	-336	-287

2025		2024
Number of common shares outstanding	88,000	88,000
Number of common treasury shares	5,601	4,199
Number of common shares outstanding on which net assets per share is calculated	82,398	83,800

	2025	2024
Weighted average number of common shares	83,268	85,399