[Disclosure Booklet]

Explanatory Documents on the Status of Business and Property for the fiscal year ended Dec 31, 2020

This disclosure booklet is prepared by the Company for publication on the Internet under Article 46-4 of the Financial Instruments and Exchange Law. Contents

I Outline and Organization 1. Corporate Name ………………………………………………………………………………………………………… 1 2. Registration Date （ Registration Number ） …………………………………………………………………………… 1 3. History and Organization ………………………………………………………………………………………………… 1 4. Shareholders in the Top 10, Number of Shares Held and Percentage of Voting Rights ………………………… 3 5. Names of Board of Directors and Statutory Auditor ………………………………………………………………… 3 6. Names of Employees Specified by Cabinet Order …………………………………………………………………… 3 7. Business Operation ……………………………………………………………………………………………………… 4 8. Addresses of Head Office and Other Branches ……………………………………………………………………… 5 9. Other Business Operation ……………………………………………………………………………………………… 5 10. Engaged Businesses included in the Matters Set Forth in Article 7(3)(a), (3)-2, (3)-3(a) and from (4) to (9) of the Cabinet Office Ordinance on Concerning Financial Instruments Business …………………………………… 6 11. Complaint Processing and Dispute Resolution ……………………………………………………………………. 6 12. Financial Instruments Firms Associations and Certified Protection Organization Memberships……… 7 13. Financial Instruments Exchange Memberships………………………………………………………………………… 7 14. Investor Protection Fund Membership …………………………………………………………………………… 7

II Business Overview 1. Business Outline for the Current Period ……………………………………………………………………………… 8 2. Key Financial Data ……………………………………………………………………………………………………… 10

III Financial Matters 1. Financial Information ………………………………………………………………………………………………………13 2. Major Lenders and Borrowings ………………………………………………………………………………………… 19 3. Securities Held (Non-Trading) ……………………………………………………………………………………………19 4. Derivative Transactions (Non-Trading) …………………………………………………………………………………19 5. External Audit ………………………………………………………………………………………………………………20

IV Internal Control Structure 1. Overview of Internal Control …………………………………………………………………………………………… 21 2. Condition of Customers' Assets Segregation ………………………………………………………………………… 23

V Status of Consolidated Subsidiaries, etc. …………………………………………………………………………………27 I Outline and Organization

1. Corporate Name Citigroup Global Markets Inc. (the Company)

2. Registration Date September 30, 2007 ( Registration Number ) (The Director-General of the Kanto Bureau (Kinsho) No.130)

3. History and Organization

(1) History Year History

1972 ･ Smith Barney Tokyo Representative Office established 1977 ･ Salomon Brothers Asia Limited established in Hong Kong 1980 ･ Salomon Brothers Asia International Tokyo Representative Office established ･ Smith Barney Tokyo Branch opened

1982 ･ Salomon Brothers Asia Limited Tokyo Branch opened 1987 ･ Becomes Remote Member of Securities Exchange 1988 ･ Becomes Official Member of Tokyo Exchange 1989 ･ Becomes Standing Underwriting Manager for JGB syndication ･ Becomes Clearing Member of Tokyo International Financial Futures Exchange ･ Becomes Special Participant of Nagoya

1991 ･ Becomes Official Member of Osaka Securities Exchange 1998 ･ Salomon Smith Barney (Japan) Limited formed upon Salomon Brothers Asia Limited's acquisition of all operations of Smith Barney Tokyo Branch

1999 ･ Name changed to Nikko Salomon Smith Barney Limited upon acquisition of Nikko Securities' institutional businesses ･ Becomes Official Member of Nagoya Stock Exchange

2004 ･ Begins operation as Nikko Citigroup Limited 2008 ･ Nikko Citi Holdings Inc. established 2009 ･ Name changed to Citigroup Global Markets Japan Inc. 2017 ･ Japan headquarters moved to Otemachi Park Building

1 (2) Organization Chart As of December 31, 2020

Division General Department Depa rtment Unit

Marke ts Pl an ni ng and Co ntr ol

Sp read Pro du cts Sol ut io n Sal es Rates T rading C VA Trad i ng Rates Rates Quantitative Analysis Finance D esk Rates & Currencies Structuring Spre a d Pr oducts Spread Products Equity Trading Vice Chairman Vice Eq ui ty Execut io n Servi ces Chairman Equity Markets Equity Derivative Sales Eq ui ty Sale s C orp or ate Acce ss Pr im e F in ance Securities Services Fu tur es, Clea ring and FX Prime Br oke rage

Deput y He ad of Securit ie s Services Custody and Fund Services

Markets and Securities Services Foreign Exchange FX Sales Spread Products Sales Investor Sales Rates S ales Client Management Gr oup Rates & Currencies Structuring Sales Mul ti-Pr od uct Sal es Dep ut y He ad of I nves to r Sale s an d Head of Cro ss Cross Asset Sales Ass et So lu ti on s Cross Asset Solution Sales Corporate Solutions Corporate Solutions Group MAG Solutions Multi-Asset Group MAG P lat for m De vel op men t Investor Relationship Management I nve sto r Re lat io ns hi p Ma nag ers Securitized Products

Capital Markets Origination Equity Capital Markets Debt Capital Markets Banking, Capital Markets and Debt Syndicate A dviso ry Corporate Client s Investment Banking Financial Institutions

Banking, Capital Markets and M&A Global Asset Managers Group

Boa rd of Directors of rd Boa A dviso ry Chief Operating Officer Transaction Structuring Group

Shareholders Management

President Chief Operating Officer

Citi R esearch S trat egy & Macro Analysis Research Administration & Operations & '

Meeting Legal

CEO Legal ' Derivatives Documentation Group Meeting Independent Compliance Risk ICRM Compliance Assurance Management AML Compliance Central Compliance Mark et s ICRM ICRM Surveillance Banking & Research IC RM/ Control Group ICRM Sanctions Regulatory Liaison and Exam Management Credit Risk Management Credit Ana lytic s Market Risk Management Risk Management NPAC Underwriting Review Quantitative Risk and Stress Testing Operational Risk Management Risk O versig ht & Pr ogr am Ma nage men t Uni t HR Advisors U nit Human Resources Employee Relations & Control Reward & Mobility Management Committee Management Talent Management

Finance Financial Planning & Analysis Controllers Tax Country Treasurer Treasury Operations and Technology Markets Operations Cash Management Information Services Group Risk & Control Foreign Securities Operations Statutory Auditor Statutory Domestic Securities Operations KYC Utility OTC Derivatives Operations Okinawa Operations FXKYC& ユーティリティLoan Operations部 Middle Office

Technology Production Support Corporate Planning Securities Services Technology Markets Technology Operations Technology Global Functions Technology Corporate Affairs IT Governance and Administration Technology Regulatory Reporting

Government Affairs O&T Planning

Internal Audit

2 4． Shareholders in the Top 10, Number of Shares Held and Percentage of Voting Rights As of December 31, 2020 Number of shares Percentage of Name of shareholders held voting rights Citigroup Japan Holdings G.K. 3,842,000 100.00% Total 1 party

5． Names of Board of Directors and Statutory Auditor As of December 31, 2020 Name Representation Full-time/Non-Full-time

Representative Director, President and CEO Lee Robert Waite Yes Full-time

Director, Vice Chairman Fumiaki Kurahara No Full-time

Director Robert Itsuo Nakamura No Full-time

Director Muneyuki Kuzushima No Full-time

Statutory Auditor Yuichi Ito Full-time ( Note ) Fumiaki Kurahara assumed the office of Chairman on Jan 1, 2021. ( Note ) Hideki Ishibashi assumed the office of Director on Jan 1, 2021.

6． Names of Employees Specified by Cabinet Order (1) Persons overseeing the operations concerning the guidance for compliance with the laws and regulations, etc. with respect to the financial instruments business As of December 31, 2020 Name Title

Hideki Ishibashi Head of Compliance Division, Chief Internal Control Officer

Hiroko Tanaka General Counsel ( Note ) The tile of Bord of Director has been added to Hideki Ishibashi on Jan 1, 2021

(2) Persons overseeing the division to make an advice or conducting management with respect to the investment advisory business and investment management business

Not applicable

3 7．Business Operation

(1) Type I Financial Instruments Business ① Businesses under Article 28(1) (i) of Financial Instruments and Exchange Law (hereinafter referred to as the "FIEL") (i) Sale and purchase of Securities (excluding those falling under the category of Derivative Transactions; the same shall apply hereinafter), Exchange traded Derivatives (excluding Financial Instruments (limited to those in Article 2(24) (iii-2)) or Financial Indices (limited to the value of the Financial Instruments or figures calculated based thereon) related Exchange traded Derivatives (the same shall apply "Commodities related Exchange traded Derivatives" hereinafter ) or Foreign Exchange traded Derivative Transactions (excluding sale and purchase of Securities falling under Article 2(8) (x) of FIEL) (ii) Intermediary ("Baikai"), brokerage ("Toritsugi") (excluding Brokerage for Clearing of Securities,etc.) or agency service ("Dairi") for sale and purchase of Securities, Exchange traded Derivatives or Foreign Exchange traded Derivatives Transactions (excluding intermediary ("Baikai"), brokerage ("Toritsugi") or agency service ("Dairi") for sale and purchase of Securities falling under Article 2(8) (x) of FIEL) (iii) Intermediary ("Baikai"), brokerage ("Toritsugi") or agency service ("Dairi") for agency ("Itaku") of the following transactions; (a) Sale and purchase of Securities conducted in a Financial Instruments Exchange Market or Exchange traded Derivatives; or (b) Sale and purchase of Securities conducted in a Foreign Financial Instruments Market (meaning a market in a Foreign State similar to Financial Instruments Exchange Market; the same shall apply hereinafter) or Foreign Exchange traded Derivatives Transactions (iv) Brokerage for Clearing of Securities, etc.; or (v) Secondary Distribution of Securities or exclusive Offer to Sell, etc. to Professional (vi) The handling of a or Secondary Distribution of Securities, or the handling of a Private Placement of Securities or exclusive Offer to Sell, etc. to Professional Investors ② Business under Article 28(1) (ii) of FIEL Over-the-Counter Transactions of Derivatives or intermediary ("Baikai"), brokerage ("Toritsugi") ( excluding Brokerage for Clearing of Securities,etc.) or agency service ("Dairi") therefor; or, Brokerage for Clearing of Securities, etc. in relation to Over-the-Counter Transactions ③ Business under Article 28(1) (iii) (a) of FIEL Wholesale Underwriting of Securities that are specified by a Cabinet Order as those for which management of risks of loss is highly necessary ④ Business under Article 28(1) (iii) (b) of FIEL Wholesale Underwriting of Securities other than those listed in Article 28(1) (iii) (a) of FIEL ⑤ Business under Article 28(1) (iii) (c) of FIEL Acts listed in Article 2(8) (vi) that are other than Wholesale Underwriting of Securities ⑥ Securities, etc. Management Business

(2) Type II Financial Instruments Business

(3) Investment Advisory and Agency Business ① Business under Article 28(3) (ii) of FIEL. Agency or intermediation for the conclusion of an Investment Advisory Contract or a Discretionary Investment Contract

4 (4) Supplemental Business Operation to Financial Instruments Business (i.e. the business conducted by the Company listed in Article 35(1) of FIEL） ① Lending and borrowing of Securities, or intermediary ("Baikai") or agency service ("Dairi") thereof ② Money loan incidental to a transaction ③ Money loan secured by Securities that are deposited for safe custody from customers ④ Agency service ("Dairi") for customers concerning Securities ⑤ Agency service ("Dairi") of the business pertaining to payment of earnings, redemption money or cancellation money with regard to beneficiary securities of Investment Trusts or foreign investment trusts, or the business pertaining to delivery of the Securities or any other assets belonging to the trust property pertaining to the Securities ⑥ Agency service ("Dairi") of the business pertaining to distribution of money, distribution of refunds or residual assets or payment of interest or redemption money with regard to Investment Securities, Investment Equity Subscription Rights Certificates or Investment Corporation Bonds, or Foreign Investment Securities ⑦ Conclusion of a Contract for Cumulative Investment ⑧ Provision of information or advice in relation to Securities ⑨ Agency service ("Dairi") of the business of any Counterparty Financial Business Operator, etc. ⑩ Retention of assets of a registered investment corporation ⑪ Consultation to any other business operator with regard to a business assignment, merger, company split, share exchange or share transfer, or intermediation for these matters ⑫ Consultation to any other business operator with regard to management ⑬ Sale and purchase of currencies and other assets designated by a Cabinet Order as being related to Derivative Transactions (excluding Transactions of Securities-Related Derivatives) or intermediary ("Baikai"), brokerage ("Toritsugi") or agency service ("Dairi") thereof ⑭ Sale and purchase of negotiable deposits and other monetary claims (excluding those that fall under the category of Securities), or intermediary ("Baikai"), brokerage ("Toritsugi") or agency service ("Dairi") thereof

8．Addresses of Head Office and Other Branches As of December 31, 2020 Category Address Head Office 1-1, Otemachi 1-Chome, Chiyoda-ku, Tokyo 100－8132

9．Other Business Operation (1) Registered businesses conducted by the Company listed in Article 35(2) of FIEL ① Business pertaining to transactions conducted by using fluctuations in commodity prices and other indicators, market gaps, etc. as specified by a Cabinet Office Ordinance (excluding business pertaining to transactions on a commodity market, etc. defined in Article 2(21) of the Commodity Futures Act) ② Business pertaining to money lending business defined in Article 2(1) of the Act on Controls, etc. on Money Lending or other money loan, or intermediary service of lending and borrowing of money ③ Business pertaining to conclusion of a Loan Participation Contract, or an intermediary, brokerage or agency service ④ Goods leasing business ⑤ Business pertaining to creation and sale of computer programs for the business of any other business operator, and a business to accept the entrustment of computing service ⑥ Business of a conclusion of a contract on the acquisition or transfer of Carbon Dioxide Equivalent Quotas, or an intermediary, brokerage or agency service ⑦ Derivertives transactions pertaining to Carbon Dioxide Equivalent Quaotas, or an intermediary, brokerage or agency service

5 ⑧ Business of concluding a contract for a guarantee or assumption of an obligation, or an intermediary, brokerage or agency service ⑨ Business of making an arrangement with or introducing another business operator, to customers of its Business

(2) Approved Businesses conducted by the Company listed in Article 35(4) of FIEL ① Business for intermediary, etc. of custody business, business for intermediary, etc. of fund service business and business for intermediary, etc. of foreign depositary receipt business ② Business for intermediary business related to LNG physical trading ③ Business for maritime freight index derivative transactions including intermediary and agency thereof

10．Engaged Businesses included in the Matters Set Forth in Article 7(3)(a), (3)-2, (3)-3 (a) and from (4) to (9) of the Cabinet Office Ordinance on Concerning Financial Instruments Business

① Securities-related business ② Sale and purchase of real estate trust beneficiary interests

11．Complaint Processing and Dispute Resolution

(1) Type I Financial Instruments Business Measures to conclude a Basic Contract for Implementation of Dispute Resolution Procedure with Financial Instruments Mediation Assistance Center (hereinafter referred to as the "FINMAC")

(2) Type II Financial Instruments Business Measures to utilize the Financial Futures Association of Japan (outsourcing to FINMAC) or measures to utilize Type II Financial Instruments Firms(outsourcing to FINMAC); otherwise, measures to utilize FINMAC directly as grievance procedure and dispute resolution prescribed in article 37-7(1) (ii) (b) of FIEL.

(3) Investment Advisory and Agency Business Measures to utilize the Center of Tokyo Bar Association, Daiichi Tokyo Bar Association, and Diani Tokyo Bar Association as the measures for dispute resolution prescribed in article 37-7(1)(iii)(b) of FIEA Measures to publicize the business operation system and internal policy on public website of the Company.

(4) Investment Management Business Not applicable

(5) Money Lending Business Measures to conclude a Basic Contract for Implementation of Dispute Resolution Procedure with Japan Financial Services Association

6 12．Financial Instruments Firms Associations and Certified Investor Protection Organization Memberships

・ Financial Instruments Firms Association : Japan Securities Dealers Association The Financial Futures Association of Japan Type II Financial Instruments Firms Association

13．Financial Instruments Exchange Memberships

Tokyo Stock Exchange Osaka Exchange Nagoya Stock Exchange Tokyo Financial Exchange

14． Investor Protection Fund Membership

Japan Investor Protection Fund

7 II Business Overview

1. Business Outline for the Current Period

In 2020, the emergence of the coronavirus and fiscal and monetary policy responses to it determined economic and trends globally, while the US presidential election was an important factor behind market movements. Through the spring, a lockdown was held in China, which is thought to be the source of coronavirus, and in Europe and the United States, which severely restricts economic and social activities, resulting in the historic nosedive in economic activity. Under these circumstances, the US stock market plunged in March, but after that, it turned into a rebound due to the aggressive policy response by the government and the central bank. Specifically, the Fed lowered the fed funds rate target range to the effective lower bound of 0-0.25% by March and resumed large-scale asset purchases. Meanwhile, in March, the Trump administration (at that time) decided on a large-scale economic relief program totaling USD2.2 trillion, which includes direct payment to the household sector, expanded unemployment benefits, and support measures for small enterprises (paycheck protection program). In other major countries / regions as well, similar financial and monetary policy measures to support the economy were implemented and the stock market turned to a rebound prior to the bottoming out of the economy driven by the lifting of the lockdown. In addition, Biden was elected in the US presidential election in November, accelerating the rise in stock prices globally. In Japan as well, a state of emergency was declared in April and May, and the GDP growth rate for the second quarter was a historic nosedive of -29.3%QoQ annualized. The state of emergency strongly put pressure on domestic demand, especially for personal consumption, and exports fell sharply due to the impact of lockdowns overseas. Under such circumstances, the government introduced the first supplementary budget for fiscal 2020 in April and the second supplementary budget in June. Meanwhile, the has launched additional easing measures, including raising the ETF purchase limit and expanding the purchase limit for corporate bonds and CP. The stock market began to rise without waiting for the bottom of the economy, linked to overseas markets, and rose significantly to 16% annually. In addition, in the second half of the year, the economy recovered at a pace that exceeded most expectations, despite the cautious economic view such as "L-shaped recovery." Yields on government bonds remained in a narrow range under the BOJ's curve control, and the dollar- yen exchange rate was on a gradual appreciation of the yen against the dollar.

Operating revenue totaled 66.1 billion yen, and Operating revenue, net of interest expense, amounted to 52.3 billion yen. Selling, general and administrative expenses totaled 36.5 billion yen, the operating income amounted to 15.8 billion yen and the ordinary income including non-operating income and expenses amounted to 15.8 billion yen. The net income before income tax amounted to 21.0 billion yen and the net income amounted to 15.5 billion yen with extraordinary income and loss and income taxes. Summaries by accounts are as follows.

8 (1) Commission received Commission received was 45.9 billion yen. The following is the breakdown by category.

① Brokerage commissions Brokerage commissions were 7.4 billion yen. Equity trading volume was 20,152.3 billion yen. Brokerage commissions on equities were 7.2 billion yen and brokerage commissions on JGB futures and ETFs totaled 0.1 billion yen.

② Underwriting and selling commissions Underwriting and selling commissions were 0.2 billion yen.

③ Subscription and distribution commissions There was no subscription and distribution commissions in the current fiscal year.

④ Other commissions Other commissions were 38.3 billion yen, mainly due to commissions from overseas subsidiaries and affiliates.

(2) Net trading income Net trading income recorded 13.6 billion yen. Trading gain related to equities was 8.1 billion yen. Trading gain related to bonds was 0.1 billion yen and trading gain related to foreign exchange and other were 5.4 billion yen.

(3) Interest revenue and expenses Net interest revenue and expenses were 7.2 billion yen loss.

(4) Selling, general and administrative expenses Selling, general and administrative expenses were 36.5 billion yen.

(5) Non-operating income and expenses Net non-operating income was 0.07 billion yen, including revaluation gain generated from assets and liabilities in foreign currencies and income of investments.

(6) Extraordinary income and loss Extraordinary income was 5.7 billion yen mainly from gain on early redemption of loan. Extraordinary loss was 0.5 billion yen mainly from restructuring loss.

(7) Income taxes Net income before income taxes amounted to 21.0 billion yen. Income taxes-current amounted to 6.2 billion yen and income taxes-deferred amounted to a benefit of 0.7 billion yen.

(8) Net income Net income amounted to 15.5 billion yen and net income per share was 4,039 yen.

9 2．Key Financial Data

(1) Overall Operating Results （Millions of Yen）

FY 2018 FY 2019 FY 2020

Capital stock 96,307 96,307 96,307 Total number of 3,842 3,842 3,842 (thousands) Operating revenue 70,083 78,875 66,128

（Commission received） 40,605 36,314 45,964

((Brokerage commissions)) 13,944 8,652 7,439

((Underwriting & selling commissions)) 970 236 206

((Other commissions)) 25,690 27,424 38,318 (((Profit distribution to Japan subsidiaries 21,545 22,162 33,470 concerning international transaction))) (((Other))) 4,144 5,262 4,847

(Net trading income) 3,679 6,516 13,688

((Equities and other)) (3,290) (4,457) 8,118

((Bonds)) 7,434 7,753 135

((Foreign exchange and other)) (463) 3,220 5,435

(((Foreign exchange))) (461) 3,433 5,651

(((Other))) (2) (212) (216)

（Financial revenue） 25,798 36,044 6,474

Financial expenses 20,622 31,995 13,743 Operating revenue, net of interest 49,461 46,879 52,384 expense Ordinary income 9,744 9,171 15,888

Net income 5,517 5,699 15,518

(2) Trading and underwriting volume in securities ① Equity Trading Activity (excluding electronically recorded transferable rights that must be indicated on securities, etc. (hereinafter referred to as Digitalized Securities)) （Millions of Yen）

FY 2018 FY 2019 FY 2020

Brokerage 34,431,776 23,103,217 20,152,368

Proprietary 13,233,918 10,545,399 6,537,581

Total 47,665,695 33,648,617 26,689,950

10 ①-2 Equity Trading Activity (limited to those for Digitalized Securities) Not applicable

② Underwriting, offering and solicitation for selling and others for professional investors, and subscription placement, offering placement, private placement and solicitation for placement for professional investors (excluding those for electronic public offering services and Digitalized Securities) （Millions of Yen）

Total sales Placement solicitation to Subscription Offering Private solicitation to Type Underwriting Offering professional Placement Placement Placement professional investors investors

Stocks 5,749 2,022 － 4,118 － 1,301 － JGBs － － － － Municipal bonds 13,708 13,708 － － Special bonds 206,000 － － 206,000 － － － FY 2018 Corporate bonds 53,060 － － 68,900 － － － Bonds Total 272,768 － － 288,608 － － － Beneficiary certificate － － 53,306 － Other － － － － － － － 1,441 45 － 360 － 2,356 － JGBs － － － － Municipal bonds 10,628 10,628 － － Special bonds 94,100 － － 94,100 － － － FY 2019 Corporate bonds 38,600 － － 74,700 － － － Bonds Total 143,328 － － 179,428 － － － Beneficiary certificate － － 47,313 － Other － － － － － － － Stocks 1,413 － － 1,072 － － － JGBs － － － － Municipal bonds 6,244 6,244 － － Special bonds 3,000 － － 3,000 － － － FY 2020 Corporate bonds 22,100 － － 8,100 － 4,160 － Bonds Total 31,344 － － 17,344 － 4,160 － Beneficiary certificate － － 213,009 － Other － － － － － － －

②-2 Underwriting, offering and solicitation for selling and others for professional investors, and subscription placement, offering placement, private placement and solicitation for placement for professional investors (limited to those for electronic public offering services ) Not applicable

②-3 Underwriting, offering and solicitation for selling and others for professional investors, and subscription placement, offering placement, private placement and solicitation for placement for professional investors (limited to services related to Digitalized Securities) Not applicable

(3) Other business activities The Businesses listed in Article 35(2) and (4) of FIEL have been omitted in consideration of financial statements impact.

11 (4) Regulatory capital adequacy ratio （Millions of Yen） FY 2018 FY 2019 FY 2020 Net capital ratio ( A / B X 100 ) 344.6% 406.9% 436.7% Net capital ( A ) 192,980 196,134 203,294 Risk total ( B ) 55,992 48,199 46,543 Market risk 25,759 22,772 22,862 Counterparty risk 18,823 14,990 13,585 Basic risk 11,409 10,436 10,095 Crypto-Assets, etc. Deduction -

(5) Number of employees and registered sales representatives FY 2018 FY 2019 FY 2020 Employees 774 783 794 （ Registered sales representatives ） （ 252 ） （ 254 ） （ 259 ）

12 III Financial Matters

1. Financial Information (1) Statement of financial condition （Millions of Yen） Previous fiscal year Current fiscal year Account （ As of December 31, 2019 ） （ As of December 31, 2020 ）

（ ASSETS ） Current assets 3,156,162 3,249,283 Cash and deposits 230,973 190,739 Cash segregated as deposits 8,891 7,089 Trading products 646,054 654,221 Trading securities and other 504,646 523,750 Derivatives 141,408 130,471 Margin transaction assets 3,893 2,964 Cash collateral pledged for securities 3,893 2,964 borrowing on margin transactions Loans secured by securities 2,100,091 2,203,046 Cash collateral pledged for securities borrowed 1,632,794 1,734,688 Loans on Gensaki transactions 467,297 468,358 Advance paid 302 85 -term guarantee deposits 152,930 187,509 Variation margin paid 820 - Accounts receivable 571 317 Accrued income 11,440 3,135 Others 192 173

Noncurrent assets 6,586 7,335 Property, plant and equipment 2 1 Furniture & fixtures 2 1 Intangible assets 412 473 Software 225 289 Others 187 183 Investments and other assets 6,172 6,860 Investment securities 742 742 -term loans receivable 648 619 Long-term guarantee deposits 1,259 1,237 Deferred tax assets 3,341 4,092 Others 180 168

Total Assets 3,162,748 3,256,619

13 （Millions of Yen） Previous fiscal year Current fiscal year Account （ As of December 31, 2019 ） （ As of December 31, 2020 ） （ LIABILITIES ） Current liabilities 2,868,779 2,920,023 Trading products 370,203 420,423 Trading securities and other 244,292 301,987 Derivatives 125,911 118,435 Trade date accrual 51,428 22,290 Margin transaction liabilities 3,462 3,169 Cash collateral received for securities 3,462 3,169 lending on margin transactions Loans payable secured by securities 2,229,962 2,321,426 Cash received on debt credit transaction of securities 346,148 599,671 Borrowings on Gensaki transactions 1,883,813 1,721,754 Deposits received 4,841 5,023 Guarantee deposits received 134,542 103,489 Variation margin received - 2,217 Short-term loans payable 55,000 20,000 Accounts payable 2,097 5,170 Accrued expenses 7,911 4,022 Income taxes payable 1,000 1,674 Reserve for bonuses 4,783 5,539 Others 3,543 5,576 Noncurrent liabilities 107,040 133,776 Bonds payable 2,600 2,600 Long-term loans payable 94,500 121,973 Reserve for retirement benefits 9,241 8,714 Others 698 488

Reserves under the special laws 3,121 3,091 Reserve for financial products transaction liabilities 3,121 3,091

Total Liabilities 2,978,940 3,056,891

（ NET ASSETS ） Shareholders' equity 187,990 203,509 Capital stock 96,307 96,307 Capital surplus 55,660 55,660 Legal capital surplus 55,660 55,660 Retained earnings/ (deficits) 36,022 51,541 Other retained earnings/ (deficits) 36,022 51,541 Retained earnings brought forward 36,022 51,541 Valuation and translation adjustments (4,182) (3,781) Deferred net gain/ (loss) on hedges (4,182) (3,781) Total Net Assets 183,807 199,727

Total Liabilities and Net Assets 3,162,748 3,256,619

14 (2) Statement of operations （Millions of Yen）

Previous fiscal year Current fiscal year Account from January 1, 2019 from January 1, 2020 ( to December 31, 2019 ) ( to December 31, 2020 )

Operating revenue 78,875 66,128 Commission received 36,314 45,964 Net trading income 6,516 13,688 Financial revenue 36,044 6,474

Financial expenses 31,995 13,743

Operating revenue, net of interest expense 46,879 52,384

Selling, general and administrative expenses 37,589 36,571

Trade-related expenses 7,543 6,056 Compensation 17,414 17,434 Occupancy 5,273 5,434 Administrative expenses 4,974 4,847 Depreciation 69 104 Taxes 1,569 1,560 Others 744 1,133

Operating income 9,290 15,812

Non-operating income 104 75 Non-operating expenses 222 0

Ordinary income 9,171 15,888

Extraordinary income 930 5,700 Reversal of reserve for financial products - 29 transaction liabilities Gain on early redemption of loan 930 5,670

Extraordinary loss 1,286 532 Restructuring loss 1,082 425 Loss on early redemption of loan 145 39 Loss on disposal of fixed assets 57 67 Reserve for financial products transaction 1 - liabilities

Net income before income taxes 8,815 21,056

Income taxes - current 3,380 6,288 Income taxes - deferred (264) (751)

Net income 5,699 15,518

15 (3) Statement of changes in net assets

FY 2019 (from January 1, 2019 to December 31, 2019) （Millions of Yen） Valuation and Shareholders' equity translation adjustments Capital Retained surplus earnings

Other Total Deferred retained Total net assets Capital net gain earnings shareholder's stock / (loss) Legal capital equity on hedges surplus Retained earnings brought forward

Beginning balance 96,307 55,660 30,323 182,291 (4,518) 177,772 Changes of items during the fiscal year Net income - - 5,699 5,699 - 5,699 Net changes of net assets other than shareholders' - - - - 336 336 equity Total changes of items during the - - 5,699 5,699 336 6,035 fiscal year Closing balance 96,307 55,660 36,022 187,990 (4,182) 183,807

FY 2020 (from January 1, 2020 to December 31, 2020) （Millions of Yen） Valuation and Shareholders' equity translation adjustments Capital Retained surplus earnings

Other Total Deferred retained Total net assets Capital net gain earnings shareholder's stock / (loss) Legal capital equity on hedges surplus Retained earnings brought forward

Beginning balance 96,307 55,660 36,022 187,990 (4,182) 183,807 Changes of items during the fiscal year Net income - - 15,518 15,518 - 15,518 Net changes of net assets other than shareholders' - - - - 400 400 equity Total changes of items during the - - 15,518 15,518 400 15,919 fiscal year Closing balance 96,307 55,660 51,541 203,509 (3,781) 199,727

16 (4) Notes to the financial statements

① Notes to statement of financial condition

1) Assets pledged as collateral and collateralized liabilities （Millions of Yen） （Millions of Yen） ・ Assets pledged as collateral FY2019 FY2020 Trading products 2,264 12

(Note) In addition to the above, following assets are pledged as collateral. FY2019 Securities borrowed of 204 million yen were used as collateral for short-term loans payable.

FY2020 Not applicable

（Millions of Yen） （Millions of Yen） ・ Collateralized liabilities FY2019 FY2020 Short-term loans payable 2,000 －

2) Collateralized securities （Millions of Yen） （Millions of Yen） ・ Securities pledged out FY2019 FY2020 Securities loaned to customers for margin transactions 3,819 3,055 Securities loaned as collateral under financing agreement 442,727 729,984 Securities pledged related to securities sold under Gensaki 1,917,544 1,778,844 transactions Securities pledged as margin 24,028 29,760 Securities pledged as collateral for other transactions 87,973 47,691

（Millions of Yen） （Millions of Yen） ・ Securities received in FY2019 FY2020 Securities borrowed on margin transactions 3,819 3,055 Securities borrowed under financing agreements 1,901,903 2,002,870 Securities received related to securities purchased under 466,855 467,179 Gensaki transactions

（Millions of Yen） （Millions of Yen） 3) Accumulated depreciation of property, plant and equipment FY2019 FY2020 3 4

（Millions of Yen） （Millions of Yen） 4) Monetary claims from the affiliates and monetary debts to the affiliates FY2019 FY2020 ・ Short-term monetary claims from the affiliates 52 22 ・ Short-term monetary debts to the affiliates 43,147 15,961 ・ Long-term monetary debts to the affiliates 79,439 104,375

17 ② Notes to statement of operations （Millions of Yen） （Millions of Yen） Volume of transactions with the affiliates FY2019y FY2020y Operating transactions ・ Operating revenue from the affiliates 771 611 ・ Operating expenses to the affiliates 787 1,353 Other than Operating transactions 785 5,630

③ Notes to statement of changes in net assets

1) Outstanding shares

（FY2019） （Unit: shares） Number Number Number Number Types of shares at the beginning of at the end of increased decreased the fiscal year the fiscal year

Common stock 3,842,000 - - 3,842,000

（FY2020） （Unit: shares） Number Number Number Number Types of shares at the beginning of at the end of increased decreased the fiscal year the fiscal year

Common stock 3,842,000 - - 3,842,000

18 2. Major Lenders and Borrowings （Millions of Yen） FY2019 FY2020 Balance Balance at the at the Lender end of Lender end of the fiscal the fiscal year year Citicorp LLC 40,000 Citicorp LLC 10,000 Short-term Citigroup Financial Products Inc. 8,000

Citicorp LLC 67,000 Citicorp LLC 91,973

Long-term Citigroup Financial Products Inc. 8,000 Citigroup Financial Products Inc. 8,000

Citigroup Japan Holdings G.K. 12,000 Citigroup Japan Holdings G.K. 12,000

3. Securities Held (Non-Trading) （Millions of Yen） FY2019 FY2020 Unrealized Unrealized Book Value Fair Value Book Value Fair Value gain/ (loss) gain/ (loss) Current ------assets Equities ------

Bonds ------

Others ------Noncurrent 742 - - 742 - - assets Equities 742 - - 742 - -

Bonds ------

Others ------

4. Derivative Transactions (Non-Trading) （Millions of Yen）

FY2019 FY2020 Transaction type Fair value Fair value Notional Unrealized Notional Unrealized Asset Asset amount gain/ (loss) amount gain/ (loss) (Liability) (Liability) Interest rate swap on long-term cash collateral pledged for bonds 20,000 (4,182) (4,182) 20,000 (3,781) (3,781) borrowed

19 5. External Audit Pursuant to the Article 436(2) (i) of the Companies Act, the Company’s financial report and its supplementary schedules were audited by KPMG AZSA LLC. And the Company received audit report with unqualified opinion from KPMG AZSA LLC.

20 IV Internal Control Structure

1． Overview of Internal Control The Company has the following divisions and departments which are responsible for internal control of the Company. ・ Legal Division Legal Division consists of Legal Department and Derivatives Documentation Group. The Division provides support to business operations including provision of legal advice in connection with general legal affairs, laws, regulations and rules relating to financial instruments transactions, implementation of legal, regulatory and compliance policies and procedures and also provides supervision of dispute resolution, etc. ・ Independent Compliance Risk Management Division Independent Compliance Risk Management Division consists of Markets Compliance, Surveillance, Central Compliance, AML Compliance, Banking & Research Compliance / Control Group and ICRM Compliance Assurance, Sanctions Compliance and Regulatory Liaison and Exam Management Units. The Division is seen as a key advocate within Citi of "Responsible Finance". This is accomplished by the following: ・ Setting standards through the creation and maintenance of Compliance policies and embedding the required standards into the business and operation of the company ・ Managing the regulatory environment by tracking Japanese and overseas regulatory developments and active participation in industry organizations ・ Providing advisory and support to other divisions to promote appropriate business behavior and activity that is consistent with the required standards ・ Conducting testing and surveillance to evaluate compliance with policies and regulations ・ Promoting appropriate risk management and governance through the development of procedures and systems to comply with applicable laws and regulations ・ Providing live and on-line trainings to increase understanding of employees regarding key laws, regulations and policies ・ Risk Management Division Risk Management Division consists of Credit Risk Management, Market Risk Management, NPAC, Underwriting Review, Quantitative Risk and Stress Testing, Operational Risk Management and Risk Oversight & Program Management Units. The Division is responsible for tracking credit status, management of markets risks, oversight of new products, underwriting review, development and management of risk models, management of risk operational risks and preparations / management of risk related reports. ・ Finance Division Finance Division consists of Controllers, Treasury, Financial Planning & Analysis and Tax Units. The Division is responsible for production, maintenance, and management of ledgers / reports, etc. of the Company's finance, accounting and tax, risk management based on the Company's Capital Adequacy Ratio, liquidity analysis, fund raising, fund management and planning of management accounting and budget of the Company. ・ Corporate Planning Division The Corporate Planning Division is responsible for the matters related to corporate planning of the Company and the matters related to assistance to President of the Company, etc.

21 ・ Corporate Affairs Division The Corporate Affairs Division is responsible for the planning and execution of communications and public affairs programs designed to strengthen the Company's recognition, enhance its brand and protect its reputation and also responsible for the promotion of the Company's CSR activities. ・ Government Affairs The office of Government Affairs is responsible for information gathering, research and analysis for the Company on government policies/activities as well as consultancy and advisory regarding relationship management with government agencies. It is also responsible for engagement in activities of business associations which the Company is involved in. ・ Operations and Technology Division Operations and Technology Division consists of Markets Operations Department, Technology Department and O&T Planning Unit. The Division is responsible for matters concerning settlement of financial products trades, etc. with Japanese and foreign customers, development of Company’s information technology strategies, systems development, systems operations and maintenance and risk management around Operations & Technology of the franchise, specifically, Information Security, Personal Information Protection, JIMU risk, Continuity of Business, Information Technology, Record Management and outsourcing management.

The Company also has established the below division which directly report to Board of Directors. ・ Internal Audit Division The Division conducts internal audits on the business of the Company and reports their results and evaluations to the Board of Directors.

22 2． Condition of Customers' Assets Segregation We have managed deposited cash and securities to secure and orderly stored them separately from our own property. Thus, even in the event of bankruptcy, deposited money and securities are refunded to customers under certainty. Asset segregation balance of cash and securities, and type of storage condition of the securities or the amount or quantity of securities at the end of December 2019 and December 2020 are as follows.

(1) Asset segregation based on article 43-2 of FIEL ① Condition of trust funds （Millions of Yen） Type As of December 31, 2019 As of December 31, 2020

Required segregation of customers’cash 7,729 6,017 deposits at the latest calculation date

Funds entrusted for segregated customers' cash deposits at the end of 8,847 7,047 the fiscal year

Required segregation of cash deposits 7,048 5,766 at the end of the fiscal year

② Condition of securities segregation (excluding Digitalized Securities) A. Securities for safe keeping As of December 31, 2019 As of December 31, 2020 Security Type Domestic securities Foreign securities Domestic securities Foreign securities

Equities (shares) thousand thousand thousand 9,054,763 thousand 685,016 shares 9,054,560 shares 1,323,718 shares shares

Bonds (face amount) millions of millions of millions 1,542,118 millions 142,023 yen 1,241,492 yen 129,879 of yen of yen Beneficiary certificates million million million million 109,836 122,722 151,632 67,022 (number of accounts) accounts accounts accounts accounts Stock purchase warrants - units - units - units - units (number of units)

B. Securities received as collateral B. Not applicable

23 C. Condition of securities segregation Security Type Depositary agent and segregation method ① With respect to CB-type corporate bonds with stock acquisition rights (including CB certificates, the same shall apply hereinafter), equity securities of investment corporations, beneficiary certificates and investment securities that are listed on Financial Instruments Exchange Markets (the hereinafter referred to as the “Domestically Listed Securities”), those securities that are the assets of the Company and the other securities that are not Customer-owned Securities (hereinafter referred to as "Company-owned Securities"), in principle, shall be managed separately from Customer-owned Securities by means of a ledger, etc., but stored together at Japan Securities Depository Center (hereinafter referred to as the "Depository", including the organization that is entrusted by the Depositary, the same shall apply hereinafter). 1. Convertible bond-type corporate ② Customer-owned Securities shall be managed in a manner whereby the holdings bonds with stock acquisition rights, of each customer can be immediately identified by means of the Company’s ledger, equity securities of investment etc.; provided, however, that Domestically Listed Securities that are not re- corporations, beneficiary securities deposited in the Depository at the customer’s request shall be stored in Japan and investment securities that are Information Processing, Ltd. or any other outside place of custody clearly segregated from Company-owned Securities and managed in a manner whereby listed on financial instruments the customer to whom the particular securities belong can be immediately exchange markets identified. Customer-owned Securities that have been delivered to the issuing company (including the transfer agent; the same shall apply hereinafter) for the exercise of stock acquisition rights of CB-type corporate bonds with stock acquisition rights etc. at the request of a customer shall be managed appropriately by means of the Company’s ledger, etc., in a manner whereby the issue, the amount and the issuing party of the particular securities can be immediately identified for each commissioning customer. With respect to domestically listed foreign securities, Company-owned Securities and Customer-owned Securities, in principle, shall be managed separately by 2. Domestically listed foreign securities means of a ledger, etc. but stored together at Depository. Customer-owned Securities shall be managed in a manner whereby the holdings of each customer can be immediately identified by means of the Company’s ledger, etc. ① The Japanese Government Bonds shall be managed at the Bank of Japan pursuant to the Transfer Law in a manner whereby Company-owned Securities etc. and Customer-owned Securities are clearly segregated and, with respect to Customer-owned Securities, the holdings of each customer can be immediately identified by means of the Company’s ledger of the book-entry accounts. 3. Corporate debt securities, stocks etc. handled at book-entry system under ② The corporate debt securities stocks etc.(excluding JGBs described in ① above) the transfer law shall be managed at the Depository pursuant to the Transfer Law in a manner whereby Company-owned Securities etc. and Customer-owned Securities are clearly segregated and, with respect to Customer-owned Securities, the holdings of each customer can be immediately identified by means of the Company’s ledger of book-entry accounts.

In principle, these securities shall be stored in Japan Information Processing, Ltd. or any other outside place of custody where Company-owned Securities, etc., and Customer-owned Securities are clearly segregated and managed in a manner whereby the holdings of each customer can be immediately identified by means of 4. Domestic bonds other than CB-type the Company’s ledger, etc. However, in the case of securities of large corporate bonds with stock denomination, etc., where a single certificate is held in common by the Company acquisition rights and securities set and the customer, and it is not possible to clearly segregate the place of custody of forth in section 3 above, and stock Company-owned portion etc. and Customer-owned portion, the place of custody acquisition rights securities, etc. shall be made clear and Company-owned portion etc. and Customer-owned portion shall be segregated by means of the Company’s ledger, etc. and Customer-owned Securities shall be managed in a manner whereby the holdings of each customer can be immediately identified.

24 Security Type Depositary agent and segregation method

With respect to domestic Beneficiary certificates of investment trust, in principle, these certificates shall be stored together at the Depository. In such a case, the place of custody of Company-owned Securities, etc. and Customer-owned Securities shall be clearly segregated and Customer-owned Securities shall be managed in a manner whereby the holdings of each customer can be immediately identified by means of the Company’s ledger, etc. However, in the case where a single certificate is held in common by the Company and the customer, and it is not possible to clearly segregate the place of custody of Company-owned portion etc. and Customer-owned portion, the place of custody shall be made clear and 5. Beneficiary certificates of investment Company-owned portion etc. and Customer-owned portion shall be segregated by trust means of the Company’s ledger etc. and Customer-owned Securities shall be managed in a manner whereby the holdings of each customer can be immediately identified. With respect to foreign Beneficiary certificates of investment trust, in principle, these certificates shall be managed clearly as Customer-owned Securities at an overseas Agency's facility and Customer-owned Securities shall be managed in a manner whereby the state of such management of Customer-owned Securities at the Agency can be immediately available and identified by means of the Company’s ledger.

With respect to the securities stored or managed at an overseas Custodial Facility, Company-owned Securities and Customer-owned Securities shall be segregated by establishing separate accounts, etc. as shown in the chart below, and Customer- owned Securities shall be managed in a manner whereby the holdings of each customer can be immediately identified by means of the Company’s ledger, etc.; 6. Securities stored or managed at provided, however, that in the case it is not possible to store or manage Customer- overseas custodial facilities owned Securities at the Custodial Facility in a manner whereby the holdings of each customer can be immediately identified, the Company shall manage these securities by means of the Company’s ledger in such a way that the Company-owned portion and the Customer-owned portion is segregated and the holdings of each customer can be immediately identified.

[Overview of overseas custody] Country of Type of securities Existence of segregated accounts Name of custodial facility establishment deposited and method of segregation

Euro denominated bonds, Separate accounts have been Euroclear Belgium Australian bonds, established for Company-owned Euro Yen bonds, Securities and customer-owned UK bonds, UK stocks Securities at each custodial facility, and the securities for the customers’ Turkish bonds, account is on a commingle basis. Citibank (Hong Kong) Ltd. Hong Kong Hong Kong stocks, Thailand stocks

Separate accounts have been US stocks, established for Company-owned Canadian stocks, Securities and customer-owned Citigroup Global Markets Inc. USA US bonds, Securities at each custodial facility, Canadian bonds, etc. and the securities for the customers’ account is on a separate basis.

③ Condition of asset segregation for Over-the-Counter Transactions of subject Securities-Related Derivatives Not applicable

25 ④ Condition of securities segregation (limited to Digitalized Securities (excluding rights based on article 1-12-2 of Order for Enforcement of FIEL)) Not applicable

(2) Asset segregation based on article 43-2-2 of FIEL Not applicable

(3) Asset segregation based on article 43-3 of FIEL (excluding those for Digitalized Securities) Not applicable

26 V Status of Consolidated Subsidiaries, etc.

The Company has no subsidiary and affiliate provided by the “Regulation for Terminology, Forms and Preparation of Consolidated Financial Statements” (Ordinance of the Finance Ministry No. 28 of 1976), article 2(3) and (7), respectively.

End

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